On October 30, 2015, in Tesco Corp. v. National Oilwell Varco, L.P., the United States Court of Appeals for the Federal Circuit held for the first time that an attorney cannot appeal an order of the court containing critical statements about the attorney's conduct when the parties and attorneys in the case entered into a settlement agreement absolving them of any further liability. Though the language in the order may have been harmful to the attorneys' reputations, the settlement abrogated the case or controversy justifying appellate jurisdiction. ( (Fed. Cir. Oct. 30, 2015).)

Plaintiff Tesco Corporation (Tesco) sued defendant National Oilwell Varco, L.P. and other defendants for patent infringement relating to well drilling technology in the US District Court for the Southern District of Texas. During discovery, the parties disputed whether a Tesco brochure depicted the invention at issue prior to the on-sale bar date. After the trial, the district court issued an order dismissing the case with prejudice after finding that Tesco's attorneys made misrepresentations to the court about the contents of the brochure, which the court determined were made in bad faith. Tesco appealed, but during the pendency of the appeal the parties and the attorneys reached a settlement disposing of all claims.

Tesco's attorneys argued, however, that they had standing to assert their own appeal because the district court's opinion harmed their reputations. Although a non-party normally does not have standing to appeal from the judgment of a district court, an exception exists in the Federal Circuit for attorneys who are sanctioned by the court during litigation because the injury becomes personal to the sanctioned attorney and is treated as a judgment against him.

The Federal Circuit rejected Tesco's attorneys' argument and dismissed the appeal for lack of jurisdiction. The court noted that previous Federal Circuit court decisions addressing the appealability of a sanctions order did not address the effect of a subsequent settlement agreement on the attorneys' standing to pursue an appeal. Joining the First and Seventh Circuits, the court held that the intervening settlement agreement signed by the parties and attorneys in the case abrogates the case or controversy justifying appellate jurisdiction.