Source: https://supreme.justia.com/cases/federal/us/449/368/
Timestamp: 2019-04-23 04:05:51+00:00

Document:
Respondent is lead counsel for the plaintiffs in four consolidated product liability suits in Federal District Court against petitioner and other manufacturers. Petitioner moved to disqualify respondent from further representation of the plaintiffs because of an alleged conflict of interest arising from the fact that petitioner's liability insurer was also an occasional client of respondent's law firm. Petitioner argued that respondent's representation of the insurer would give him an incentive to structure the plaintiffs' claims for relief so as to enable the insurer to avoid any liability, thus increasing petitioner's own potential liability. In accordance with the District Court's order, respondent obtained the consent of both the plaintiffs and the insurer to his continuing representation, and the court then allowed him to continue his representation of the plaintiffs. Petitioner filed a notice of appeal pursuant to 28 U.S.C. § 1291, which vests the courts of appeals with "jurisdiction of appeals from all final decisions of the district courts . . . except where a direct review may be had in the Supreme Court." The Court of Appeals held that district court orders denying disqualification motions were not immediately appealable under § 1291, but, because it was overruling prior cases, the court made its decision prospective only and, on the merits, affirmed the District Court's order permitting respondent to continue representing the plaintiffs.
after the trial has ended that permitting continuing representation was prejudicial error, it would retain its usual authority to vacate the judgment appealed from and order a new trial. Pp. 449 U. S. 373-378.
2. The Court of Appeals, after properly concluding that the District Court's order was not immediately appealable under § 1291, erred in reaching the merits of the District Court's order. The finality requirement of § 1291 is jurisdictional in nature. If an appellate court finds that the order from which a party seeks to appeal does not fall within the statute, its inquiry is over. A court lacks discretion to consider the merits of a case over which it is without jurisdiction, and thus a jurisdictional ruling may never be made prospective only. Pp. 449 U. S. 379-380.
612 F.2d 377, vacated and remanded.
MARSHALL, J., delivered the opinion of the Court, in which BRENNAN, STEWART, WHITE, BLACKMUN, POWELL, and STEVENS, JJ., joined. REHNQUIST, J., filed an opinion concurring in the result, in which BURGER, C.J., joined, post, p. 449 U. S. 380.
reached the merits of the challenged order. We hold that orders denying motions to disqualify counsel are not appealable final decisions under § 1291, and we therefore vacate the judgment of the Court of Appeal and remand with instructions that the appeal be dismissed for lack of jurisdiction.
Respondent is lead counsel for the plaintiffs in four product liability suits seeking damages from petitioner and other manufacturers of multi-piece truck tire rims for injuries caused by alleged defects in their products. [Footnote 2] The complaints charge petitioner and the other defendants with various negligent, willful, or intentional failures to correct or to warn of the supposed defects in the rims. Plaintiffs seek both compensatory and exemplary damages. App. 6-72.
argued, could increase its own potential liability. Home had, in fact, advised petitioner in the course of the litigation that its policy would cover neither an award of compensatory damages for willful or intentional acts nor any award of exemplary or punitive damages. [Footnote 4] The District Court entered a pretrial order requiring that respondent terminate his representation of the plaintiffs [Footnote 5] unless both the plaintiffs and Home consented to his continuing representation. [Footnote 6] Id. at 157, 160.
"avoid[ing] the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may give rise, from its initiation to entry of judgment."
Our decisions have recognized, however, a narrow exception to the requirement that all appeals under § 1291 await final judgment on the merits. In Cohen v. Beneficial Industrial loan Corp., supra, we held that a "small class" of orders that did not end the main litigation were nevertheless final and appealable pursuant to § 1291. Cohen was a shareholder's derivative action in which the Federal District Court refused to apply a state statute requiring a plaintiff in such a suit to post security for costs. The defendant appealed the ruling without awaiting final judgment on the merits, and the Court of Appeals ordered the trial court to require that costs be posted. We held that the Court of Appeals properly assumed jurisdiction of the appeal pursuant to § 1291 because the District Court's order constituted a final determination of a claim "separable from, and collateral to," the merits of the main proceeding, because it was "too important to be denied review,"
"Coopers & Lybrand v. Livesay, supra at 437 U. S. 468 (footnote omitted). See Abney v. United States, 431 U. S. 651, 431 U. S. 658 (1977)."
Because the litigation from which the instant petition arises had not reached final judgment at the time the notice of appeal was filed, [Footnote 11] the order denying petitioner's motion to disqualify respondent is appealable under § 1291 only if it falls within the Cohen doctrine. The Court of Appeals held that it does not, and 5 of the other 10 Circuits have also reached the conclusion that denials of disqualification motions are not immediately appealable "collateral orders." [Footnote 12] We agree with these courts that, under Cohen, such an order is not subject to appeal prior to resolution of the merits.
representation. In addition, we will assume, although we do not decide, that the disqualification question "resolve[s] an important issue completely separate from the merits of the action," the second part of the test. Nevertheless, petitioner is unable to demonstrate that an order denying disqualification is "effectively unreviewable on appeal from a final judgment" within the meaning of our cases.
"the possibility that the course of the proceedings may be indelibly stamped or shaped with the fruits of a breach of confidence or by acts or omissions prompted by a divided loyalty,"
Brief for Petitioner 15, and at "the effect of such a tainted proceeding in frustrating public policy," id. at 16. But petitioner fails to supply a single concrete example of the indelible stamp or taint of which it warns. The only ground that petitioner urged in the District Court was that respondent might shape the products liability plaintiffs' claims for relief in such a way as to increase the burden on petitioner. Our cases, however, require much more before a ruling may be considered "effectively unreviewable" absent immediate appeal.
Abney v. United States, supra, or a violation of his constitutional right to bail, Stack v. Boyle, 342 U. S. 1 (1951), because those situations, like the posting of security for costs involved in Cohen, "each involved an asserted right the legal and practical value of which could be destroyed if it were not vindicated before trial." United States v. MacDonald, 435 U. S. 850, 435 U. S. 860 (1978). By way of contrast, we have generally denied review of pretrial discovery orders, see, e.g., United States v. Ryan, supra; Cobbledick v. United States, supra. Our rationale has been that, in the rare case when appeal after final judgment will not cure an erroneous discovery order, a party may defy the order, permit a contempt citation to be entered against him, and challenge the order on direct appeal of the contempt ruling. See Cobbledick v. United States, supra at 309 U. S. 327. We have also rejected immediate appealability under § 1291 of claims that "may fairly be assessed" only after trial, United States v. MacDonald, supra at 435 U. S. 860, and those involving "considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'" Coopers Lybrand v. Livesay, 437 U.S. at 437 U. S. 469, quoting Mercantile National Bank v. Langdeau, 371 U. S. 555, 371 U. S. 558 (1963).
"diffe[r] in any significant way from the harm resulting from other interlocutory orders that may be erroneous, such as orders requiring discovery over a work product objection or orders denying motions for recusal of the trial judge."
the judgment of the Eighth Circuit is vacated, and the case is remanded with instructions to dismiss the appeal for want of jurisdiction. See DiBella v. United States, 369 U.S. at 369 U. S. 133.
"The courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States . . . except where a direct review may be had in the Supreme Court."
Pursuant to 25 U.S.C. § 1407, the Judicial Panel on Multidistrict Litigation has ordered these and other suits against multi-piece truck tire rim manufacturers consolidated for trial in the United States District Court for the Western District of Missouri. App. 73.
The firm included Home in a list of its clients in the Martindale-Hubbell Law Directory and had occasionally represented the insurer on matters unrelated to the multi-piece rim litigation. At the time that petitioner filed its disqualification motion, respondent was defending Home and five other carriers against a suit on certain fire insurance policies. Home does not pay respondent or his firm a retainer.
In April, 1979, Home sent letters containing similar advice to the defendants in some of the other consolidated suits. The plaintiffs in these other actions were not represented by respondent.
In the alternative, the District Court stated that respondent could terminate his representation of Home in the unrelated matter. See n 3, supra.
The trial court based its determination that a potential conflict existed on its interpretation of Disciplinary Rule 5-105 of the Code of Professional Responsibility, most of which had been adopted verbatim as a local rule of court. That rule prohibits a lawyer from "continu[ing] multiple employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by his representation of another client," except when "it is obvious that he can adequately represent the interest of each and if each consents to the representation. . . ." The District Court agreed with petitioner that it was likely that the dual representation would adversely affect respondent's "exercise of his independent judgment. . . .'" App. 160, quoting International Business Machines Corp. v. Levin, 579 F.2d 271, 280 (CA3 1978). It therefore ordered that he "either comply with the consent requirement . . . or terminate his representation. . . ." App. 160.
Neither party elected to proceed under § 1292(b). Respondent chose to comply with the order rather than appeal. Petitioner chose to appeal the denial of its motion under § 1291, rather than under § 1292(b). After filing its notice of appeal, petitioner moved that respondent be held in contempt for allegedly failing to comply with the pretrial order, but this motion was subsequently withdrawn.
The Court of Appeals also stated that orders granting motions to disqualify counsel would be appealable under § 1291. 612 F.2d at 378. That question is not presented by the instant petition, and we express no opinion on it. Neither do we express any view on whether an order denying a disqualification motion in a criminal case would be appealable under § 1291.
During pendency of its appeal to the Eighth Circuit, petitioner filed a federal court action against Home, charging that by consenting to respondent's continuing representation of the plaintiffs in the multi-piece rim products liability suits, the insurer had breached its fiduciary duty to petitioner. App. 217. At the time of oral argument, counsel for petitioner represented that no resolution had been reached in that litigation. Tr. of Oral Arg. 7-8.
In addition to the Eighth Circuit decision currently before us, five other Circuits now follow the rule that denials of disqualification motions are not appealable. See In re Continental Investment Corp., 637 F.2d 1 (CA1 1980); Armstrong v. McAlpin, 625 F.2d 433 (CA2 1980), cert. pending, No. 80-431, overruling Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (CA2 1974); Melamed v. ITT Continental Baking Co., 592 F.2d 290 (CA6 1979) (Melamed II), overruling Melamed v. ITT Continental Baking Co., 534 F.2d 82 (CA6 1976) (Melamed I); Community Broadcasting of Boston, Inc. v. FCC, 178 U.S.App.D.C. 256, 546 F.2d 1022 (1976); Cord v. Smith, 338 F.2d 516 (CA9 1964). Five Circuits permit such appeals under § 1291. See Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (CA7 1978); MacKethan v. Peat, Marwick, Mitchell & Co., 557 F.2d 395 (CA4 1977); Kroungold v. Triester, 521 F.2d 763 (CA3 1975); Fullmer v. Harper, 517 F.2d 20 (CA10 1975); Uniweld Products, Inc. v. Union Carbide Corp., 385 F.2d 922 (CA5 1967), cert. denied, 390 U.S. 921 (1968) .
Counsel for respondent represented at oral argument in this Court that the case was, at that time, in the discovery stage. Tr. of Oral Arg. 336.
Although there may be situations in which a party will be irreparably damaged if forced to wait until final resolution of the underlying litigation before securing review of an order denying its motion to disqualify opposing counsel, it is not necessary, in order to resolve those situations, to create a general rule permitting the appeal of all such orders. In the proper circumstances, the moving party may seek sanctions short of disqualification, such as a protective order limiting counsel's ability to disclose or to act on purportedly confidential information. If additional facts in support of the motion develop in the course of the litigation, the moving party might ask the trial court to reconsider its decision. Ultimately, if dissatisfied with the result in the District Court and absolutely determined that it will be harmed irreparably, a party may seek to have the question certified for interlocutory appellate review pursuant to 28 U.S.C. § 1292(b), see n 7, supra, and, in the exceptional circumstances for which it was designed, a writ of mandamus from the court of appeals might be available. See In re Continental Investment Corp., 637 F.2d at 7; Community Broadcasting of Boston, Inc. v. FCC, 178 U.S.App.D.C. at 262, 546 F.2d at 1028. See generally Comment, The Appealability of Orders Denying Motions for Disqualification of Counsel in the Federal Courts, 45 U.Chi.L.Rev. 450, 468-480 (1978). We need not be concerned with the availability of such extraordinary procedures in the case before us, because petitioner has made no colorable claim that the harm it might suffer if forced to await the final outcome of the litigation before appealing the denial of its disqualification motion is any greater than the harm suffered by any litigant forced to wait until the termination of the trial before challenging interlocutory orders it considers erroneous.
The United States, in its brief amicus curiae, has challenged petitioner's standing to attack the order permitting respondent to continue his representation of the plaintiffs. In light of our conclusion that the Eighth Circuit was without jurisdiction to hear petitioner's appeal, we have no occasion to address the standing issue.
Two other Courts of Appeals that have overruled their precedent and held that orders denying disqualification motions are not immediately appealable have similarly made their decisions prospective only, and therefore reached the merits of the disputes before them. See Armstrong v. McAlpin, 625 F.2d at 441-442 (citing need to provide guidance to district courts and to avoid waste of judicial resources); Melamed II, 592 F.2d at 295 (earlier ruling in Melamed I established appealability as law of the case). To the extent that the rationales of those cases would allow a court to agree to decide the merits of a case over which it is without jurisdiction, we respectfully disagree.
"[t]he denial of a pretrial motion to dismiss an indictment on speedy trial grounds does not indicate that a like motion made after trial -- when prejudice can be better gauged -- would also be denied."
later point in the proceedings -- "when prejudice can be better gauged" -- will be denied.

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