SEARS, ROEBUCK & CO. v. MACKEY ET AL.
No. 34
Supreme Court of the United States
Argued February 28, 1956. - Decided June 11, 1956.
351 U.S. 427
Edward I. Rothschild аrgued the cause for respondents. With him on a brief for Mackey, respondent, was John Paul Stevens.
MR. JUSTICE BURTON delivered the opinion of the Court.
This action, presenting multiple claims for relief, was brought by Mackey and another in the United States District Court for the Northern District of Illinois, Eastern Division, in 1953. The court expressly directed that judgment be entered for the defendant, Sears, Roebuck & Co., on two, but less than all, of the claims presented. It also expressly determined that there was no just reason for delay in making the entry. After Mackey‘s notice of appeal from that judgment to the Court of Appeals for the Seventh Circuit, Sears, Roebuck & Co. mоved to dismiss the appeal for lack of appellate jurisdiction. The Court of Appeals upheld its jurisdiction and denied the
Although we are here concerned with the present appealability of the judgment of the District Court and not with its merits, we must examine the claims stated in the complaint so as to considеr adequately the issue of appealability.
The complaint contains six counts. We disregard the fifth because it has been abandoned and the sixth because it duplicates others. The claims stated in Counts I and II are material and have been dismissed without leave to amend. The claim contained in Count III and that in amended Count IV are at issue on the answers filed by Sears, Roebuck & Co. The appeal before us is from a
In Count I, Mackey, a citizen of Illinois, and Time Saver Tools, Inc., an Illinois corporation owned by Mackey, are the original plaintiffs and the respondents here. Sears, Roebuck & Co., a New York corporation doing business in Illinois, is the original defendant and the petitioner here. Mackey charges Sears with conduct violating the Sherman Antitrust Act in a manner prejudicial to three of Mackey‘s commercial ventures causing him $190,000 damages, for which he seeks $570,000 as treble damages. His first charge is unlawful dеstruction by Sears, since 1949, of the market for nursery lamps manufactured by General Metalcraft Company, a corporation wholly owned by Mackey. Mackey claims that this caused him a loss of $150,000. His second charge is unlawful interference by Sears, in 1952, with Mackey‘s contract to sell, on commission, certain tools and other products of the Vascoloy-Ramet Corporation, causing Mackey to lose $15,000. His third charge is unlawful destruction by Sears, in 1952, of the market for a new type of carbide-tipped lathe bit and for other articles manufactured by Time Saver Tools, Inc., resulting in a loss to Mackey of $25,000. Mackey combines such charges with allegations that Sears has used its great size to monopolize commerce and restrain competition in these fields. He asks for damages and equitable relief.
In Count II, Mackey claims federal jurisdiction by virtue of diversity of citizenship. He incorporates the allegations of Count I as to the Metalcraft transactions and asks for $250,000 damages for Sears’ wilful destruc-
In Count III, Mackey seeks $75,000 in a common-law proceeding against Sears for unlawfully inducing a breach of his Vascoloy commission contract.
In Count IV, Time Saver seeks $200,000 in a common-law proceeding against Sears for unlawfully destroying Time Saver‘s business by unfair competition and patent infringement.
The jurisdiction of the Court of Appeals to entertain Mackey‘s appeal from the District Court‘s judgment depends upon
If Mackey‘s complaint had contained only Count I, there is no doubt that a judgment striking out that count and thus dismissing, in its entirety, the claim there stated would be both a final and an appealable decision within the meaning of § 1291. Similarly, if his complaint had contained Counts I, II, III and IV, there is no doubt that a judgment striking out all four would be a final and appealable decision under § 1291. The controversy before us arises solely because, in this multiple claims action, the District Court has dismissed the claims stated in Counts I and II, but has left unadjudicated those stated in Counts III and IV.2
Before the adoption of the Federal Rules of Civil Procedure in 1939, such a situation was generally regarded as leaving the appellate court without jurisdiction of an attempted appeal. It was thought that, although the judgment was a final decision on the respective claims in Counts I and II, it obviously was not a final decision of
With the Federal Rules of Civil Procedure, there came an increasеd opportunity for the liberal joinder of claims in multiple claims actions. This, in turn, demonstrated a need for relaxing the restrictions upon what should be treated as a judicial unit for purposes of appellate jurisdiction. Sound judicial administration did not require relaxation of the standard of finality in the disposition of the individual adjudicated claims for the purpose of their appealability. It did, however, demonstrate that, at least in multiple claims actions, some final decisions, on less than all of the claims, should be appealable without waiting for a final decision on all of the claims. Largely to
“(b) JUDGMENT AT VARIOUS STAGES. When more than one claim for relief is presented in an action, the court at any stage, upon a determination of the issues material to a particular claim and all counterclaims arising out of the transaction or occurrence which is the subject matter of the claim, may enter a judgment disposing of such claim. The judgment shall terminate the action with respect to the claim so disposed of and the action shall proceed as to the remaining claims. In case а separate judgment is so entered, the court by order may stay its enforcement until the entering of a subsequent judgment or judgments and may prescribe such conditions as are necessary to secure the benefit thereof to the party in whose favor the judgment is entered.”
It gave limited relief. The courts interpreted it as not relaxing the requirement of a “final decision” on each individual claim as the basis for an appeal, but as author-
Largely to overcome this difficulty, Rule 54 (b) was amended, in 1946, to take effect in 1948.7 Since then it has read as follows:
“(b) JUDGMENT UPON MULTIPLE CLAIMS. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, the court may direct the entry of a final judgment upon one or more but less thаn all of the claims only upon an express determination
that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates less than all the claims shall not terminate the action as to any of the claims, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims.” (Emphasis supplied.)
In this form, it does not relax the finality required of each decision, as an individual claim, to render it appealable, but it does provide a practical means of permitting an appeal to be taken from one or more final decisions on individual claims, in multiple claims actions, without waiting for final decisions to be rendered on all the claims in the case. The amended rule does not apply to a single claim action nor to a multiple claims action in which all of the claims have been finally decided. It is limited expressly to multiple claims actions in which “one or more but less than all” of the multiple claims have been finally decided and are found otherwise to be ready for appeal.
To meet the demonstrated need for flexibility, the District Court is used as a “dispatcher.” It is permitted to determine, in the first instance, the appropriate time when each “final decision” upon “one or more but less than all” of the claims in a multiple claims action is ready for appeal. This arrangement already has lent welcome certainty to the appellate procedure. Its “negative effect” has met with uniform approval. The effect so referred to is the rule‘s specific rеquirement that for “one or more but less than all” multiple claims to become appealable, the District Court must make both “an express determination that there is no just reason for delay” and “an express direction for the entry of judgment.” A party adversely affected by a final decision thus knows that
In the instant case, the District Court made this certification, but Sears, Roebuck & Co. nevertheless moved to dismiss the appeal for lack of appellate jurisdiction under § 1291. The grounds for such a motion ordinarily might be (1) that the judgment of the District Court was not a decision upon a “claim for relief,” (2) that the decision was not a “final decision” in the sense of an ultimate disposition of an individual claim entered in the course of a multiple claims action, or (3) that the District Court abused its discretion in certifying the order.
In the case before us, there is no doubt that each of the claims dismissed is a “claim for relief” within the meaning of Rule 54 (b), or that their dismissal constitutes a “final decision” on individual claims. Also, it cannot well be argued that the claims stated in Counts I and II are so inherently inseparable from, or clоsely related to, those stated in Counts III and IV that the District Court has abused its discretion in certifying that there exists no just reason for delay. They certainly can be decided independently of each other.
Petitioner contends that amended Rule 54 (b) attempts to make an unauthorized extension of § 1291. We disagree. It could readily be argued here that the claims stated in Counts I and II are sufficiently independent of those stated in Counts III and IV to satisfy the requirements of Rule 54 (b) even in its original form. If that were so, the decision dismissing them would also be appealable under the amended rule. It is nowhere contended today that a decision that would have been appealable under the original rule is not also appealable under the amended rule, provided the District Court makes the required certification.
Rule 54 (b), in its original form, thus may be said to have modified the single judicial unit practice which had been developed by court decisions. The validity of that rule is no longer questioned. In fact, it was applied by this Court in Reeves v. Beardall, 316 U. S. 283, without its validity being questioned.
We reach a like conclusion as to the validity of the amended rule where the District Court acts affirmatively and thus assists in properly timing the release of final decisions in multiple claims actions. The amended rule adapts the single judicial unit theory so that it better meets the current needs of judicial administration. Just as Rule 54 (b), in its original form, resulted in the release of some decisions on claims in multiple claims actions before they otherwise would have been released,10 so amended Rule 54 (b) now makes possible the release of more of such decisions subject to judicial supervision. The amended rule preserves the historic federal policy against piecemeal appeals in many cases more effectively than did the original rule.11
Accordingly, the appellate jurisdiction of the Court of Appeals is sustained,12 and its judgment denying the motion to dismiss the appeal for lack of appellate jurisdiction is
Affirmed.
The result in these two litigations of course has significance for the parties. That is, however, of relative insignificance compared to the directions which judges in the district courts and courts of appeals will draw from the Court‘s opinions. For me, what is said has not a little kinship with the pronouncements of the Delphic oracle.
The opinion in Cold Metal Process Co. v. United Engineering & Foundry Co., post, p. 445, declares that
The Court does indicate that what has been the core of the doctrine of finality as applied to multiple claims litigation—that only that part of a litigation which is separate from, and independent of, the remainder of the litigation can be appealed before the completion of the entire litigation—is no longer to be applied as a standard, or at least as an exclusive standard, for deciding what is final for purposes of § 1291. The Court does not, however, indicate what standards the district courts аnd the courts of appeals are now to apply in determining when a decision is final. It leaves this problem in the first
For me, the propositions emerging from analysis of the relationship of Rule 54 (b) to
1.
“The historic rule in the federal courts has always prohibited piecemeal disposal of litigation and permitted appeals only from final judgments except in those special instances covered by statute. . . . Rule 54 (b) was originally adopted in view of the wide scope and possible content of the newly created ‘civil action’ in order to avoid the possible injustice of a delay in judgment of a distinctly separate claim to await adjudication of the entire case. It was not designed to overturn the settled federal rule stated above . . . .”
“. . . After extended consideration, it [the Committee] concluded that a retention of the older fed-
eral rule was desirable, and that this rule needed only the exercise of a discretionary power to afford a remedy in the infrequent harsh case to provide a simple, definite, workable rule. This is afforded by amended Rule 54 (b). It re-establishes an ancient policy with clarity and precision. . . .” Report of Advisory Committee on Proposed Amendments to Rules of Civil Procedure 70-72.
2.
3. While the principle against piecemeal appeals has been compendiously and therefore, at times, loosely phrased as implying that the whole of a litigation, no matter what its nature, must be completed before any appeal is allоwed, see Collins v. Miller, 252 U. S. 364, 370, the underlying rationale of the principle has been respected when not susceptible of this mechanical way of putting it. What have been called exceptions are not exceptions at all in the sense of inroads on the principle. They have not qualified the core, that is, that there should be no premature, intermediate appeal.
Thus the Court has permitted appeal before completion of the whole litigation when failure to do so would preclude any effective review or would result in irreparable injury. See Forgay v. Conrad, 6 How. 201; Cоhen v. Beneficial Industrial Loan Corp., 337 U. S. 541, 545-547; Swift & Co. v. Compania Caribe, 339 U. S. 684, 688-689. A
4. The expansion by the Federal Rules of the allowable content of a proceeding and the range of a litigation inevitably enlarged the occasions for severing one aspect or portion of a litigation from what remains under the traditional test of a “final decision.” On the basis of prior cases, we held that it was not a departure from the policy against piecemeal appeals to permit an appeal with respect to that part of a multiple claims litigation based on a set of facts separate and independent from the facts on which the remainder of the litigation was based. Reeves v. Beardall, 316 U. S. 283. The Note of the Advisory Committee, quoted supra, demonstrates that the amended Rule 54 (b) was designed in accordance with the historic policy against premature appeal and with the decisions of this Court allowing appeal from a “judgment of a distinctly separate claim.” What the Rule did introduce, however, was a discretionary power in the district judge to control appealability by preventing a party from even attempting to appeal a severable part of a litigation unless the district judge has expressly certified that there is no just reason for delay and has expressly directed entry of judgment on that phase of the litigation. This provision was directed to the kind of difficulty encоuntered in Dickinson v. Petroleum Conversion Corp., 338 U. S. 507, in ascertaining whether the district judge is in fact finished with a separable part of the litigation.
The principles which this Court has heretofore enunciated over a long course of decisions under § 1291 furnish ready guides for deciding the appealability of the certified parts of the litigation in the two cases now before the Court. Count II in Sears, Roebuck & Co. v. Mackey, ante, p. 427, is appealable since the transactions and occurrences involved in it do not involve any of those embraced in Counts III and IV. Count I involves at least two transactions which are also the subject matter of Counts III and IV, but is appealable under § 1292 (1) as an interlocutory order denying an injunction. In Cold Metal Process Co. v. United Engineering & Foundry Co., post, p. 445, the counterclaim, even if not compulsory, is based in substantial part on the transactions involved in the main litigation and hence not appealable.
5. Of course, as the Court‘s opinion appears to recognize, that crucial principle of the doctrine of finality that the court of appeals has no jurisdiction unless there is a “final decision” cannot be left to the district court. It is one thing for a district court to determine whether it is or is not through with a portion of a litigation. It is quite another thing for it to determine whether the requirements of § 1291 are satisfied so as to give jurisdiction to the court of appeals. A district court can no more confer
6. In summary, then, the Court rightly states, even if it does not hold, that § 1291 is unimpaired by Rule 54 (b). Section 1291 is what a long course of decision has construed it to be. The unifying principle of decisions for over a century is observance of hostility in the federal judicial system to piecemeal appellate review (with a few strictly defined exceptions not here relevant, see
Notes
Contra: See Rieser v. Baltimore & O. R. Co., supra, concr. op. of Judge Frank, at 205-208; Bendix Aviation Corp. v. Glass, supra, concr. op. of Judge Hastie, at 277-282; Pabellon v. Grace Line, Inc., supra, concr. op. of Judge Frank, at 176-181; Flegenheimer v. General Mills, Inc., 191 F. 2d 237 (C. A. 2d Cir.). See also, Gold Seal Co. v. Weeks, 93 U. S. App. D. C. 249, 209 F. 2d 802.