Lead Opinion
Indiana Harbor Belt Railroad Company (“IHB”) moved for summary judgment on one of two counts seeking recovery from American Cyanamid Company (“Cyanam-id”) for cleanup costs resulting from a chemical leak. The district court granted IHB’s motion and entered judgment against Cyanamid. Cyanamid appeals under Federal Rule of Civil Procedure 54(b). Because we find that the requirements of Rule 54(b) have not been met, we dismiss this appeal for lack of jurisdiction.
I.
On January 9, 1979, IHB employees discovered that a railroad tank car was leaking in IHB’s Blue Island railroad yard. The tank car was owned by North American Car Corporation but was leased to Cyanamid. The car had been transported to the Blue Island yard by Missouri Pacific Railroad (“MoPac”) where it was to be picked up by Consolidated Rail Corporation (“Conrail”) to be delivered to Cyanamid’s facility in New Jersey. Shortly after the leak was discovered, IHB employees determined that the tank car contained acryloni-trile, a chemical used extensively in the manufacture of fabrics and plastics. Acrylonitrile is toxic and very flammable. Its vapors can form explosive mixtures with air and are easily ignited. Over 3000 people were temporarily evacuated from the area surrounding the Blue Island yard. IHB employees, with the assistance of the local fire department, were able to safely stop the leak. In order to clean up the yard and reduce the concentration of acryl-onitrile in the area’s groundwater to within the limits established by the Illinois Environmental Protection Agency, IHB incurred approximately one million dollars in total expenses.
On April 23, 1980, IHB filed a three-count complaint in federal district court seeking to recover the cleanup costs it incurred.
On May 22, 1980, Cyanamid moved to dismiss count II. The district court denied this motion. Indiana Harbor Belt Railroad Co. v. American Cyanamid Co.,
IHB then moved for summary judgment against Cyanamid on the strict liability theory set forth in Count II of its complaint. See Indiana Harbor Belt Railroad Co. v.
II.
Neither party questioned our ability to hear this case under Rule 54(b), but as we have frequently pointed out, we have an independent duty to determine whether we have jurisdiction over an appeal. See, e.g., United States General, Inc. v. Albert,
Prior to the adoption of the Federal Rules of Civil Procedure, judgments issued by a court in a lawsuit involving multiple claims and/or multiple parties were generally not appealable until all claims against all parties had been resolved. See, e.g., Collins v. Miller,
When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.
Fed.R.Civ.P. 54(b).
In evaluating whether the district court properly certified the judgment in favor of IHB on count II under Rule 54(b), we first determine whether the judgment the court entered was final under 28 U.S.C. § 1291. ODC Communications Corp. v. Wenruth Investments,
The critical issue in this case is the definition of the phrase “one claim for relief.” The meaning of this phrase is essential to determining whether Rule 54(b) applies to a given situation. First, the action must involve multiple claims for relief. In determining whether more than one claim for relief is presented, counterclaims, cross-claims, and third-party claims are considered in addition to and in the same manner as the claims presented in the plaintiff's complaint. Id.; ODC Communications,
Although the application of Rule 54(b) hinges on the definition of a “claim for relief,” the Supreme Court has never conclusively defined this phrase. Liberty Mutual Insurance Co. v. Wetzel,
For if there are different facts (and of course different issues) consideration of the appeals piecemeal rather than all at once will not involve a duplication in the efforts required of the judges to prepare for argument in, and to decide, each appeal. The gains from forcing the consolidation of appeals will therefore be small and will be outweighed by the benefits of an immediate appeal in resolving the parties’ rights with respect to a part of the controversy between them. By the same token, if there is a great deal of factual overlap between the decided and the retained claims, they are not separate, and appeal must be deferred till the latter are resolved.
Jack Walters,
Whether two counts involve a “significant factual overlap” may sometimes be difficult to determine. This case, however, does not address the outer fringes of the significant factual overlap theory, but rather lies at the core of the requirement that one of multiple claims must be fully adjudicated. Subsumed within the significant factual overlap theory is the rule that a claimant who has set forth a number of legal theories in support of only one possible recovery has stated only one claim for relief. In Minority Police Officers, for example, we stated that “[i]t is clear on the one hand that claims can be separate even if they have some factual overlap____, and on the other hand they cannot be separate if together they constitute a single cause of action for res judicata purposes, or if the claimant could not recover separately on each claim____”
The application of this rule to the present case is at first blush straightforward. IHB sought relief in the form of damages in an amount equal to the expenses it incurred in cleaning up its Blue Island yard after the acrylonitrile leaked from the tank car. In support of its asserted right to recover these damages from Cyanamid, IHB offered two legal theories: negligence and strict liability. These theories, however, are merely different bases for a single recovery. See, e.g., Automatic Liquid,
The present dispute is, however, possibly distinguishable from the prior precedent in this area. A substantial majority of those cases involved parties who were attempting to appeal from judgments dismissing one or more counts which the appellate courts determined to be merely alternative theories to the counts which remained unresolved in the district court. See, e.g., Tolson,
As discussed, the purpose of Rule 54(b) is to balance the competing policies of permitting accelerated review of certain judgments with the desire to avoid the waste in appellate resources which can accompany piecemeal review. Local P-171,
What underlies the rule that different legal characterizations of the same facts constitute only one claim for relief, however, is the recognition that it will be an uncommon case where summary judgment in favor of the plaintiff is possible on one theory, but not on the alternative theories. Apothekernes,
We also note that this lack of precision is inherent in Rule 54(b). This is illustrated by the accepted principle that an appeal from a judgment dismissing one of multiple counts is prohibited. Because the dismissal is not immediately appealable, the case may proceed to trial on the remaining issues. If the plaintiff does not prevail at trial, but then appeals the dismissed count and is successful, the possibility of a new trial on this count is raised. In the typical case, assuming perfect information was available at the outset, it would be more efficient to allow an immediate appeal of the dismissal followed by one consolidated trial, rather than one appeal sandwiched between two trials. Despite the existence of this possibility, there is no exception to the general rule which attempts to alleviate this hardship.
Finally, and perhaps most importantly, Rule 54(b) speaks in terms of directing “the entry of a final judgment as to one or more but fewer than all of the claims.” This language does not distinguish between the types of final judgments that are rendered. Given this language, it is unclear how IHB’s strict liability and negligence counts, which under existing authority would be “one claim for relief” if the strict liability count was dismissed, can be multiple claims when a judgment is entered in IHB’s favor on the very same count. We therefore dismiss this appeal for lack of jurisdiction.
Notes
. Jurisdiction in the district court was based on diversity of citizenship. 28 U.S.C. § 1332. The parties agree that Illinois law governs the merits of IHB’s negligence and strict liability counts.
. 28 U.S.C. § 1292(b) permits immediate appellate review, if certain requirements are met, from an order that would not otherwise be appealable. First, the district court must make a written finding that the "order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation____” 28 U.S.C. § 1292(b). Second, the party must make an application for appellate review with the court of appeals within ten days of the district court’s certification. Finally, the court of appeals has discretion to decide whether to permit the appeal. These requirements have not been met in this case.
. We have noted that there is some haziness in the standard an appellate court should apply when reviewing a Rule 54(b) certification because the “separateness" of the claims being appealed and those that remain in the district court invariably factor into both steps of the review. See, e.g., Local P-171, Amalgamated Meat Cutters v. Thompson Farms Co.,
There are thus two aspects to the proper function of a reviewing court in Rule 54(b) cases. The court of appeals must, of course, scrutinize the district court’s evaluation of such factors as the interrelationship of the claims so as to prevent piecemeal appeals in cases which should be reviewed only as single units. But once such juridical concerns have been met, the discretionary judgment of the district court should be given substantial def-erence____
. Because we hold that IHB’s negligence and strict liability theories constitute one claim for relief under Rule 54(b) and therefore the district court did not fully adjudicate one claim, we do not address the issue of whether multiple claims were raised in the action when Cyanam-id's various claims are considered.
. IHB also asserts that Rule 54(b) authorizes an immediate appeal from the district court's judgment because if affirmed, the judgment resolves all the issues involving IHB and would end its participation as a party to the lawsuit. We reject this argument because Cyanamid’s counterclaim against IHB is still pending.
Dissenting Opinion
dissenting:
The majority here asserts a novel and startling conclusion — that although plaintiff has won decisively on one theory, all other possible theories supporting its claim must be pursued to conclusion in the district court before judgment is appealable under Rule 54(b). What the majority seems to ignore here is the basic proposition that to “win” a plaintiff need prevail on only one theory, while to “win” a defendant must prevail on all the theories proposed by the plaintiff. I agree that what we have here is one “claim” of IHB against Cyanamid based on two theories— strict liability and negligence. Had IHB lost on its strict liability theory, that loss would not have been appealable, because the remaining negligence theory would have afforded a completely viable opportunity for plaintiff to achieve full vindication of its claim. However, I do not agree that IHB, once it has prevailed on its strict liability theory and received a money judg
The majority here has cited not a single case in which a plaintiff won all that was sought on summary judgment (with judgment entered to that effect), but was held not to have a final judgment for Rule 54 purposes.
I therefore respectfully dissent.
. In many of the Seventh Circuit cases cited by the majority, plaintiffs had lost on one or more theories, but had remaining to them alternate theories on which relief could be sought. A/S Apothekernes Laboratorium for Specialpraeparater v. I.M.C. Chemical Group, Inc.,
Several other Seventh Circuit cases involve appeals on claims for which counterclaims, directly attacking the foundations of the successful claims, still remained for disposition. See Automatic Liquid Packaging, Inc. v. Dominik,
There is a third-party complaint remaining, but it does not impede appeal under 54(b) because it involves a distinct party. Federal Deposit Ins. Corp. v. Elefant,
This is also true of the cases from other circuits cited by the majority. Tolson v. United States,
. The dubious procedural posture of the case at this point is underscored by an examination of what should happen next. Why, for example, should the plaintiff want to pursue these alternative theories when it has won all it sought and had judgment entered in its favor? The only plausible reason would be to confer finality on its claim since lack of finality presumably prevents collection of its judgment.
A plaintiff in this situation could, of course, elect to abandon its other theories to confer
The defendant, on the other hand, is placed in the odd position of having to push forward to achieve resolution of the plaintiff’s alternative theories in order to appeal an adverse decision that if affirmed would fully settle the issue.
Finally, consider the stance of this case if the plaintiffs original complaint had been the only claim involved — or if, upon remand, all the remaining claims were disposed of without additional consideration of the plaintiff’s negligence count. (As a practical matter, that is unlikely to occur in this case because Cyanamid’s cross and counterclaims against IHB both raise negligence issues. But the content of the outstanding claims in this case should not govern our treatment of the procedural problem here.) If the outstanding cross, counter and third-party claims were resolved, the defendant could presumably appeal the district court's ruling on strict liability without any further action on the negligence count — because in that case there would be no need for Rule 54(b) certification. The single claim involved in this appeal would be deemed finally decided as it stands, even with the negligence count unresolved, if the outstanding cross, counter or third-party claims were disposed of. The same would not be true if the district court had granted summary judgment for the defendant on the strict liability count. It is unclear what practical justification the majority finds for applying so different a standard for finality within a single claim under Rule 54(b); the key difference should be in determining finality as between unarguably distinct claims. Neither the rationale behind the rule nor any related case law supports the new standard announced here for determination of finality within single claims.
