Source: http://www.law.cornell.edu/supremecourt/text/449/368
Timestamp: 2014-09-15 04:38:02
Document Index: 12207037

Matched Legal Cases: ['§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291']

FIRESTONE TIRE & RUBBER COMPANY, Petitioner, v. John C. RISJORD. | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews FIRESTONE TIRE & RUBBER COMPANY, Petitioner, v. John C. RISJORD.
449 U.S. 368 (101 S.Ct. 669, 66 L.Ed.2d 571)
[HTML] Syllabus 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.
Held: 1. Orders denying motions to disqualify the opposing party's counsel in a civil case are not appealable final decisions under § 1291. Such an order does not fall within the "collateral order" exception of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528, to the requirement that all appeals under § 1291 must await final judgment on the merits in the underlying litigation. Petitioner has made no showing, as required under the Cohen doctrine of immediately appealable "collateral orders," that an order denying disqualification is effectively unreviewable on appeal from a final judgment on the merits. The propriety of a district court's denial of a disqualification motion will often be difficult to assess until its impact on the underlying litigation may be evaluated, which is normally after final judgment, and should the court of appeals conclude 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. 373-378.
from a district court order denying a motion to disqualify counsel for the opposing party in a civil case. The United States Court of Appeals for the Eighth Circuit held that such orders are not appealable, but made its decision prospective only and therefore 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 Appeals 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 multipiece truck tire rims for injuries caused by alleged defects in their products.
Based on these facts, petitioner in May 1979 filed a motion to disqualify respondent from further representation of the plaintiffs. Petitioner argued that respondent had a clear conflict of interest because his representation of Home would give him an incentive to structure plaintiffs' claims for relief in such a way as to enable the insurer to avoid any liability. This in turn, petitioner 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.
In accordance with the District Court's order, respondent filed an affidavit in which he stated that he had informed both the plaintiffs and Home of the potential conflict and that neither had any objection to his continuing representation of them both. He filed supporting affidavits executed by the plaintiffs and by a representative of Home. Because he had satisfied the requirements of the pretrial order, respondent was able to continue his representation of the plaintiffs. Petitioner objected to the District Court's decision to permit respondent to continue his representation if he met the statedconditions, and therefore filed a notice of appeal pursuant to 28 U.S.C. 1291.
In re Multi-Piece Rim Products Liability, 612 F.2d 377 (1980). Before considering the merits of the appeal, the court reconsidered and overruled its prior decisions holding that orders denying disqualification motions were immediately appealable under § 1291. The Court of Appeals reasoned that such orders did not fall within the collateral-order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), which allows some appeals prior to final judgment. Because it was overruling prior cases, the court stated that it would reach the merits of the challenged order "in fairness to the appellant in the instant case," but held that in the future, appellate review of such orders would have to await final judgment on the merits of the main proceeding.
612 F.2d, at 378-379. We granted certiorari, 446 U.S. 934, 100 S.Ct. 2150, 64 L.Ed.2d 786 (1980), to resolve a conflict among the Circuits on the appealability question.
Under § 1291, the courts of appeals are vested with "jurisdiction of appeals from all final decisions of the district courts . . . except where a direct review may be had in the Supreme Court." We have consistently interpreted this language as indicating that a party may not take an appeal under this section until there has been "a decision by the District Court that 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.' " Coopers s & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978), quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945). This rule, that a party must ordinarily raise all claims of error in a single appeal following final judgment on the merits, serves a number of important purposes. It emphasizes the deference that appellate courts owe to the trial judge as the individual initially called upon to decide the many questions of law and fact that occur in the course of a trial. Permitting piecemeal appeals would undermine the independence of the district judge, as well as the special role that individual plays in our judicial system. In addition, the rule is in accordance with the sensible policy of "avoiding 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." Cobbledick v. United States, 309 U.S. 323, 325, 60 S.Ct. 540, 541, 84 L.Ed. 783 (1940). See DiBella v. United States, 369 U.S. 121, 124, 82 S.Ct. 654, 656, 7 L.Ed.2d 614 (1962). The rule also serves the important purpose of promoting efficient judicial administration. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 170, 94 S.Ct. 2140, 2149, 40 L.Ed.2d 732 (1974).
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," and because it was "too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Id., at 546, 69 S.Ct. at 1225. Cohen did not establish new law; rather, it continued a tradition of giving § 1291 a "practical rather than a technical construction." Ibid. See, e. g., United States v. River Rouge Improvement Co., 269 U.S. 411, 413-414, 46 S.Ct. 144, 70 L.Ed. 339 (1926); Bronson v. LaCrosse & Milwaukee R. Co., 67 U.S. 524-531, 2 Black 524, 530-531, 17 L.Ed. 347 (1863); Forgay v. Conrad, 47 U.S. 201, 203, 6 How. 201, 203, 12 L.Ed.2d 404 (1848); Whiting v. Bank of the United States, 38 U.S. 6, 15, 13 Pet. 6, 15, 10 L.Ed. 33 (1839). We have recently defined this limited class of final "collateral orders" in these terms: "The order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, supra, 437 U.S. at 468, 98 S.Ct. at 2457 (footnote omitted). See Abney v. United States, 431 U.S. 651, 658, 97 S.Ct. 2034, 2039, 52 L.Ed.2d 651 (1977).
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."
An order denying a disqualification motion meets the first part of the "collateral order" test. It "conclusively determines the disputed question," because the only issue is whether challenged counsel will be permitted to continue his representation. In addition, we will assume, although we do not decide, that the disqualification question "resolves 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.
An order refusing to disqualify counsel plainly falls within the large class of orders that are indeed reviewable on appeal after final judgment, and not within the much smaller class of those that are not. The propriety of the district court's denial of a disqualification motion will often be difficult to assess until its impact on the underlying litigation may be evaluated, which is normally only after final judgment. The decision whether to disqualify an attorney ordinarily turns on the peculiar factual situation of the case then at hand, and the order embodying such a decision will rarely, if ever, represent a final rejection of a claim of fundamental right that cannot effectively be reviewed following judgment on the merits. In the case before us, petitioner has made no showing that its opportunity for meaningful review will perish unless immediate appeal is permitted. On the contrary, should the Court of Appeals conclude 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. That remedy seems plainly adequate should petitioner's concerns of possible injury ultimately prove well founded. As the Second Circuit has recently observed, the potential harm that might be caused by requiring that a party await final judgment before it may appeal even when the denial of its disqualification motion was erroneous does not "differ 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." Armstrong v. McAlpin, 625 F.2d 433, 438 (1980), cert. pending, No. 80-431. But interlocutory orders are not appealable "on the mere ground that they may be erroneous." Will v. United States, 389 U.S. 90, 98, n. 6, 88 S.Ct. 269, 275, n. 6, 19 L.Ed.2d 305 (1967). Permitting wholesale appeals on that ground not only would constitute an unjustified waste of scarce judicial resources, but also would transform the limited exception carved out in Cohen into a license for broad disregard of the finality rule imposed by Congress in § 1291. This we decline to do.
We hold that a district court's order denying a motion to disqualify counsel is not appealable under § 1291 prior to final judgment in the underlying litigation.
Insofar as the Eighth Circuit reached this conclusion, its decision is correct. But because its decision was contrary to precedent in the Circuit, the court went further and reached the merits of the order appealed from. This approach, however, overlooks the fact that the finality requirement embodied in § 1291 is jurisdictional in nature. If the 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, by definition, a jurisdictional ruling may never be made prospective only. We therefore hold that because the Court of Appeals was without jurisdiction to hear the appeal, it was without authority to decide the merits.
Con sequently, 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 133, 82 S.Ct. at 661.
"An order denying a disqualification motion meets the first part of the 'collateral order' test. It 'conclusively determines the disputed question,' because the only issue is whether challenged counsel will be permitted to continue his representation."
In Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), Justice Jackson stressed that the order before the Court was "a final disposition of a claimed right" and specifically distinguished a case in which the matter was "subject to reconsideration from time to time." Id., at 546-547, 69 S.Ct., at 1225. Just recently in Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), we held that an order denying class certification was not appealable under the collateral-order doctrine, in part because such an order is "subject to revision in the District Court." Id., at 469, 98 S.Ct., at 2458. The possibility that a district judge would reconsider his determination was highly significant in United States v. MacDonald, 435 U.S. 850, 858-859, 98 S.Ct. 1547, 1551-1552, 56 L.Ed.2d 18 (1978), where the Court held that the denial of a pretrial motion to dismiss an indictment on speedy trial grounds was not appealable under the collateral-order doctrine. The Court noted that speedy trial claims necessitated a careful assessment of the particular facts of the case, and that "the 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."
It is not at all clear to me, nor has it been to courts considering the question, that an order denying a motion for disqualification of counsel conclusively determines the disputed question. The District Court remains free to reconsider its decision at any time. See Armstrong v. McAlpin, 625 F.2d 433, 439 (CA2 1980) (en banc), cert. pending, No. 80-431; id., at 451 (Van Graafeiland, J., concurring in part and dissenting in part); Fleischer v. Phillips, 264 F.2d 515, 516-517 (CA2), cert. denied, 359 U.S. 1002, 79 S.Ct. 1139, 3 L.Ed.2d 1030 (1959). The Court itself recognizes this possibility, ante, at 378-379, n. 13. And in doing so the Court is not only being abstractly inconsistent with its conclusion that the first prong of the Cohen test is satisfied. In this very case the possibility of reconsideration by the trial judge cannot be dismissed as merely theoretical. Petitioner's claim is that respondent will advance only those theories of liability which absolve the insurer, or will advance those theories more strenuously than others. Although it is impossible to discern if this is true before trial, the issue may become clearer as trial progresses and respondent actually does present his theories. As in MacDonald, it cannot be assumed that a motion made at a later point in the proceedings"when prejudice can be better gauged"will be denied.
Title 28 U.S.C. 1291 provides in relevant part: "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 28 U.S.C. 1407, the Judicial Panel on Multidistrict Litigation has ordered these and other suits against multipiece truck tire rim manufacturers consolidated for trial in the United States District Court for the Western District of Missouri. App. 73.
The District Court certified its pretrial order on disqualification for interlocutory appeal pursuant to 28 U.S.C. 1292(b), which provides in relevant part:
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., supra, 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.