Opinion ID: 500012
Heading Depth: 1
Heading Rank: 3

Heading: the summary judgment for petra and pibc

Text: 11 FCI challenges the district court's grant of summary judgment for Petra and PIBC. Specifically, FCI argues that (1) it was error to permit summary judgment before allowing any substantial merits discovery and (2) even on the existing record there are material issues of fact that render summary judgment inappropriate. 12 We do not reach the issue of whether the current record raises material questions of fact, because we agree with FCI that it was premature for the district court to grant summary judgment without first permitting discovery on the merits. Preliminarily, we note that the trial judge's grant of summary judgment was based on the erroneous assumption that FCI affirmatively waived discovery on the merits. See Mem.Op. at 15, 18. At oral argument, the following exchange took place between the trial judge and Mr. Kotelly, counsel for FCI: 13 THE COURT: Mr. Kotelly, what discovery have you attempted or pursued that leads to the Court's determination of the question of whether or not it has jurisdiction of this case? 14 MR. KOTELLY: Your Honor, as to the question as to whether this Court has jurisdiction over this matter, we feel that we do not need any further discovery.... 15 R.E. at 45-46. Mr. Kotelly, however, went on to make clear that the record was sufficient only as to the question of jurisdiction; he answered in the affirmative the court's inquiry about the plaintiff's desire for discovery on the merits: 16 THE COURT: So the discovery that you want goes essentially and solely to the question of the merits of the litigation, is that it? 17 MR. KOTELLY: That is correct [subject to the caveat that additional discovery might be needed as the jurisdiction in New York if the Court chose to transfer]. 18 Id. 6 Thus, the trial court was mistaken when it stated that [FCI] has asserted in oral argument that it is willing to rest on the present record in demonstrating [PBIC's] complicity in the check-kiting scheme. Mem.Op. at 15. 19 More fundamentally, under the Federal Rules of Civil Procedure, when a Rule 12(b)(6) motion to dismiss is converted into a motion for summary judgment, all parties must be given a reasonable opportunity to present all material made pertinent to such a motion by Rule 56. Fed.R.Civ.Proc. 12(b). Furthermore, it is settled that the term reasonable opportunity includes the opportunity to pursue reasonable discovery. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986) (summary judgment appropriate only after adequate time for discovery); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986) (plaintiff must have a full opportunity to conduct discovery); Gay v. Wall, 761 F.2d 175, 177-78 (4th Cir.1985); Sames v. Gable, 732 F.2d 49, 51-52 (3d Cir.1984). In the present case, it is clear that the district court failed to give FCI a reasonable opportunity to pursue merits discovery. When summary judgment was granted, virtually no discovery on the merits had occurred; the defendants had not responded to any of FCI's interrogatories or document requests, and a deposition subpoena to Kenneth J. Baiad, a former FCI employee implicated in the alleged check-kiting scheme, was still outstanding. 20 Petra and PIBC do not dispute that summary judgment is proper only after the plaintiff has been given adequate time for discovery. Petra and PIBC contend, however, that FCI cannot challenge the summary judgment order, because FCI failed to file a Rule 56(f) affidavit specifying the facts it hoped to adduce by further discovery, and how any facts so adduced would be material. Brief for Petra/PIBC at 10. We disagree. Under Rule 56(f), the district court may defer ruling on a summary judgment motion and permit further discovery so that the nonmoving party may obtain the information necessary to show an issue of material fact in dispute. See Fed.R.Civ.P. 56(f). The purpose of the affidavit is to ensure that the nonmoving party is invoking the protections of Rule 56(f) in good faith and to afford the trial court the showing necessary to assess the merit of a party's opposition. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 298, 88 S.Ct. 1575, 1597, 20 L.Ed.2d 569 (1968). Although several courts have held that filing an affidavit is necessary for the preservation of a Rule 56(f) contention, 7 other circuits have excused the absence of a Rule 56(f) filing on the ground that other documents filed by the plaintiff--such as opposing motions and outstanding discovery requests--sufficed to alert the district court of the need for further discovery and thus served as the functional equivalent of an affidavit. Sames v. Gable, 732 F.2d 49, 51-52 & n. 3 (3d Cir.1984) (where there were outstanding document requests, plaintiff's failure to file was not sufficiently egregious by warrant a non-merits resolution of the case); see also Cowan v. J.C. Penney Co., 790 F.2d 1529, 1532 (11th Cir.1986) (Rule 56 filing unnecessary where plaintiff had properly brought to court's attention that discovery was still outstanding). Given the particular facts before us, this latter, more flexible approach was the appropriate response. 21 Interrogatories and document requests addressed to each of the defendants and a deposition subpoena were outstanding at the time of the summary judgment decision. The district court thus had reason to know that FCI desired further discovery--indeed, it knew just what additional discovery FCI was seeking. Moreover, in response to the defendants' motions to dismiss, FCI had filed an Opposition as well as a Statement of a Material Facts As To Which There is a Genuine Dispute; the latter document made plain the use FCI sought to make of the information that still remained in the defendants' hands. We find that the combination of FCI's opposition to dismissal on the merits, the accompanying Statement of Material Issues, and the outstanding discovery requests served as an adequate substitute for a Rule 56(f) affidavit. 22 In addition, we find it significant that discovery on the merits would undoubtedly have long since occurred in this case, if not for the actions of the defendants. There was nothing improper about the way in which FCI served its interrogatories, document requests and subpoena. Petra and PIBC, however, objected to all of FCI's discovery requests on the ground that discovery was premature while their motions challenging personal jurisdiction and forum were pending. Counsel for Petra and PIBC reiterated at the October 17, 1986 hearing that we don't think that discovery should take place until the motions have been resolved. R.E. at 42. FCI filed motions to oppose the protective order motions--but to little avail. Because the district court (with one exception--allowing the deposition of Kamar) did not rule on the protective order motions until it dismissed the case entirely, no discovery on the merits was ever possible. 23 In sum, given the particular circumstances of this case, we do not think the district court's summary judgment was automatically justified by FCI's failure to file a Rule 56 affidavit. Given that (1) the trial court erred when it assumed that FCI had waived merits discovery; (2) FCI was not at fault in failing to conduct discovery on the merits; and (3) the outstanding interrogatories, document requests and deposition subpoena were sufficient to inform the district court that further discovery was needed, we find that FCI's failure to file a Rule 56 affidavit should not preclude it from challenging the district court's grant of summary judgment. Accordingly, because in the absence of a waiver, summary judgment is appropriate only after plaintiff has had a full opportunity to conduct discovery, we conclude that it was premature for the district court to dismiss the case against Petra and PIBC without first permitting discovery on the merits. 24 Reversed in part and affirmed in part.