Court Opinion

ID: 9443168
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:12:54.218215+00
Date Added: 2024-06-11T17:29:23.800964
License: Public Domain

HASTIE, Circuit Judge, for himself and KALODNER, Circuit Judge
(concurring).
Judge KALODNER and I concur in the decision of the court that the judgment of the district court should be affirmed. However, we think that this court has jurisdiction of this appeal under Section 1292 (1) of Title 28, United States Code, not Section 1291 of Title 28 as the court holds.
Originally, this case was presented as an appeal under Section 1291 from a final decision of a district court. On rehearing it was urged, alternatively, that this is an appeal from an order which “refuses an injunction”; hence the order, if not a final decision, is nevertheless reviewable under Section 1292(1) which provides that an interlocutory order refusing an injunction is appealable to this court. In our opinion this alternative contention is sound. It enables us to agree that we have jurisdiction of this appeal. The court finds it unnecessary to consider this alternative basis of jurisdiction. We, however, must consider it since we think Section 1291 is inapplicable.
As concerns the present litigation, the enforced dismissal of plaintiff’s claim, though without prejudice, was an effective denial of all relief for which plaintiff had asked. One of plaintiff’s two specific prayers asked that defendant be restrained from dealing with an invention as his own property. In dismissing the claim the district court necessarily decided that plaintiff was not entitled to that relief. In recognition of that aspect of the order of dismissal this court in the concluding paragraph of its opinion states our reasons for believing that plaintiff is not entitled to an injunction in this suit. Thus, we have a case within the normal conception af appeal from an order refusing an injunction as authorized by Section 1292(1) of Title 28.1
On the merits, Judge MARIS speaks for us.
But despite our vote for affirmance, it seems to Judge KALODNER and me that the question of the effect of Rule 54(b) on our jurisdiction under Section 1291 is of such importance that we should state in some detail our reasons for disagreeing with the opinion of the court on this point. The view to which we are persuaded has recently been elaborated in opinions expressing the thinking of a majority of the judges of the Court of Appeals for the Second Circuit.2 Their reasoning considered, we are not sure that we can shed additional light upon the problem; but we are sure that in the effort and in the exposition of our minority views here, we can and shall avoid the heat generated elsewhere in connection with minority views on the other side of this question.
At the outset, it is conceded that the majority give us a simple working rule for the entertaining oif partial appeals in cases involving “multiple claims”. Hereafter, in any such case, within this circuit at least, if a district court says its order is a final judgment and says it in the talismanic language prescribed by Section 54 (b) of the Rules of Civil Procedure 3 the *278order is an appealable “final decision” within the meaning of Section 1291. Nothing more need be considered. But simple and attractive as this end result is, we are unable to surmount the obstacles which beset the path our brethren have travelled.
We all agree, as our earlier decisions have stated,4 5that Section 1291 of Title 28 is the source of our appellate jurisdiction and that our problem here is whether a particular order of the district court is a “final decision” within the meaning of Section 1291. We also agree that until the adoption of the present Rule 54(b) the order here presented for review would not have been a final decision within the meaning of Section 1291. Now, however, by force of that Rule the court decides that Section 1291 embraces what it did not embrace before. The court rationalizes and minimizes the effect thus claimed for Rule 54(b) by saying that the jurisdiction given this court by Section 1291 has not been altered but that the Rule has changed the impact oif Section 1291. There has never been any more to the conception of final decision under Section 1291, it is argued, than a requirement that an order not be subject to'revision by the trial court and that it be capable of immediate enforcement by execution or otherwise. All along the vice which made an order unappealable under Section 1291 was that actually, or in legal contemplation at least, the district court had not finished even with the part of the suit covered by the order. When Rule 54(b) provided procedure definitive of the completion of a portion of the litigation then, for the first time, such partial decision came to meet the unchanged standard of Section 1291.
We think this is too narrow a view of the meaning of Section 1291. It is true that one effect of the statute has been to preclude appeal where the order in question is subject to revision. But the statutory concept and its effect have been broader.5 Generally, and we think correctly, Section 1291 has been thought to reflect a policy against the waste of time of appellate courts and against other evils inherent in the piecemeal presentation of related issues for review. It is obvious that multiple appeals in a single suit are likely to compel the reviewing court to go over much ground more than once. And even if this is avoided, there is the equally serious danger that on partial appeal issues may not appear as clearly or in the same perspective as when the whole litigation is reviewed. It was arguable as a matter of first impression that Section 1291 carried this policy so far that any appeal was precluded until the whole litigation was finished in the trial court.6 But the Supreme Court in its construction of the statute occasionally found a portion of a law suit so distinct from the rest that the normal dangers of partial appeal were not present; where both in logic and in terms of the policy of Section 1291 that portion of the litigation might be reviewed as if it were a separate law suit. But these exceptions were few. And they were recognized cautiously in cases where the result seemed clearly consistent with the fundamental policy of Section 1291.7
*279On the other hand, if there was one situation where the restrictive policy embodied in the statute clearly precluded partial appeal, it was the case where plaintiff’s claim was opposed by defendant’s “compulsory counterclaim”.8 The case before us is a prime example. The plaintiff’s claim asserts rights of equitable character which he thinks he has against the defendant in relation to a particular invention as a result of certain acts and relationships of the parties. Defendant’s counterclaim asserts his alleged rights of legal character against plaintiff in connection with the same invention and as a result of the same acts and relationships. Whether there may be particular bits of evidence relevant to the claim and not the counterclaim, or vice versa, does not appear but does not matter. Essentially the same circumstances are the factual basis of both claim and counterclaim. The likelihood of pointless redundancy in such separate appeals on claim and counterclaim arising out of the same transaction was clear. Therefore, whether the district court had finished with the claim or not was immaterial. For until the counterclaim also was decided, adjudication was not comprehensive enough to amount to final decision within the meaning of Section 1291.9
Thus, we differ with the majority in our view that it was the quantum of litigation covered by partial decision in the claim-compulsory counterclaim situation beyond any possible deficiency of procedure in connection with the matter decided which resulted in the rule of non-finality until both claim and counterclaim had been adjudicated.
This conception of final decision continued after the Rules of Civil Procedure were adopted in 1938. Rule 54(b), as then enacted, recognized that an order disposing of a particular claim while a counterclaim “arising out of the [same] transaction” remained pending did not cover enough to constitute a final judgment. Such an order remained unappealable.10
At the same time, because more diverse matters could be brought together in one action under the new Rules than theretofore, the 1938 Rule 54(b) undertook to describe possible units of judicial action so distinct from the rest of the litigation as properly to be the subject of review before completion of the entire litigation. Apparently it was the intention of the draftsmen to respect the conceptions underlying adjudications which had defined “final decision” in the administration of Section 1291 before the liberalization of joinder.11 For although language of the Supreme Court not essential to the disposition of issues before the court at times had suggested that any partial disposition of an action lacked the coverage contemplated by Section 1291,12 actual adjudication before 1938 had recognized, as we already have indicated, the appealability of certain obviously integral portions of an action less than the entire litigation. It is not surprising, therefore, that after the adoption of the original Rule 54(b) the Supreme Court explicitly recognized “ * * * a judgment * * * which terminates the *280action with respect to such a claim [including any compulsory counterclaim] * * is final for purposes of appeal under § 128 [now Section 1291] of the Judicial Code”.13 Since this case, Reeves v. Beardall, is thought by the majority to lend support to their position, it seems desirable to state explicitly that it does not overrule any earlier decisions of the Court on the nature of final decision. Rather, in a situation which it had not considered before, the Supreme Court applied a conception of an appealable unit of litigation which was consistent both with the rationale olf its earlier decisions construing Section 1291 and with the Rules newly enacted in connection with the liberalization of joinder. In contrast, the present case discloses an old and familiar situation of claim and counterclaim with reference to the same transaction. Within this quantum of litigation disposition of less than all of the closely related opposing requests for judicial action has not heretofore constituted final decision under Section 1291; and if it does so now the meaning of Section 1291 in relation to old and familiar subject matter has been changed.
The present Rule 54(b) is an entire redraft adopted in 1948. It undertakes a new approach to finality in the disposition of one of several claims presented in an action. An express special finding that “there is no * * * reason for delay”' in the entry of judgment and “an express direction for the entry of judgment” by the district court are required as the hallmarks which must appear before an order which disposes of less than all of the claims in suit can be a final judgment. An obvious purpose of this new requirement is to provide such measure of certainty concerning appealability as is afforded by assurance that without these findings a partial disposition of a law suit is on its face incomplete and will not be appealable14
The court reasons that there is no significant distinction between this negative effect — which all of us concede — of a district court’s failure to comply with Rule 54(b) in postponing any Section 1291 final decision and the affirmative effect of converting into a Section 1291 final decision an order the Supreme Court has said is not of that character. In this same connection the court points out that every day district courts necessarily accelerate or postpone final decisions by promptness or delay in entering judgment upon trial find-, ings and opinions. But this very example illustrates just the distinction which we already have stressed. When we speak of such procedural steps as postponing or accelerating final decision, it is our unspoken premise that, procedure apart, the adjudication covers such subject matter as is comprehended by the phrase “final decision” in Section 1291. In other words, two things are necessary for such a final decision. The district court must take all the steps necessary to complete its action with reference to the claim and, in addition, the subject matter litigated must have scope enough to satisfy the statutory conception of final decision.
Thus, the court’s analysis of Rule 54(b) as procedural in the sense of changing the time when an order is appealable is beside the mark. Litigated cases characteristically involve numerous challenged rulings made before final decision, however defined. To call any such ruling itself a final decision within the meaning of Section 1291 would, of course, change the time of appeal. But in this case it would also change the quantitative conception under which final decision must include disposition of both claim and compulsory counterclaim, whether by one order or two, and whether the orders, if two, are entered simultaneously or at different times. This distinct and additional effect which the court now gives to Rule 54(b) involves serious difficulties which, as we see it, the proponents of the majority view do not resolve.
*281It is at least a novel conception of judicial power which enables a court of first instance in its discretion from case to case to determine whether its orders are sufficiently inclusive to be of appealable character. The conception is the more remarkable in this case because it involves authority to change the meaning of a statute at will and in the process to ignore the Supreme Court’s prior construction of that statute. Whether district courts of the United States organized and authorized solely to exercise certain original jurisdiction comprehended within the judicial power of the United States under Article III of the Constitution can exercise such a function is at least unclear.
Moreover, this sport in judicial power would derive from a mere rule of district court procedure. The Supreme Court has pointed out that the enabling act15 under which the present rules were adopted “was purposely restricted in its operation to matters of pleading and court practice and procedure” leaving undisturbed “the inability of a court, by rule, to extend or restrict the jurisdiction conferred by a statute”.16 It is true that the rules derive authoritative character from Supreme Court sanction. It is also true that in final analysis it is the Supreme Court which in the course of adjudication from case to case lays down the principles and precepts which give authoritative construction and systematic meaning to the statutory concept of ap-pealable final decision. But it would be something else for .the Court to undertake the alteration of this statutory concept of appealability through the promulgation of rules of district court procedure. Such a course would at least represent a departure from conventional and judicially approved notions of the nature and respective roles of legislation, adjudication and rule making.17
Although the opinion of the court does not analyze these difficulties, we think there is implicit recognition of their substantiality in the repeated denials by the draftsmen of the present Rules and the courts alike, including this court in this case, that the Rules generally or, 54(b) in particular, have any purpose or effect to enlarge judicial power o'r modify appellate jurisdiction.18 This is a reasonable inter*282pretation. It may well be a necessary one.19 We would give it effect by refusing to read into Rule 54(b) the purpose or effect of empowering a district court to make an order partially disposing of an action a final decision when it does not decide enough to meet the requirements of Section 1291 as authoritatively construed. This restrictive interpretation would leave unimpaired the usefulness of Rule 54(b) which derives from its above mentioned negative effect. The rule would be left to serve a very valuable purpose, and apparently its principal intended purpose. It would relieve litigants of the risk -of losing their right of appeal which heretofore has resulted from failure to take an immediate appeal from a partial disposition of an action under the mistaken belief that the order was not a final decision. For now, regardless of what an order must comprehend to have the scope essential to finality under Section 1291, it would not meet the procedural requirements of Rule 54(b) unless the district court had formally directed the entry of judgment and unless the court had made explicit what would normally be implicit in any attempted partial final judgment; namely, that there was in the view of the trial court no reason of fairness or administrative convenience for retaining jurisdiction over this adjudicated segment of the litigation until the entire action could be adjudicated and its disposition viewed as a total picture.20
Finally, we have noted but do not share the fears of our brethren and others that our view, if adopted, would jeopardize many other sections of the new Rules. Without burdening this opinion with an elaborate catalog of rules, it seems to us that nothing is claimed for other rules which presents difficulties equivalent to those encountered when Rule 54(b) is given the effect claimed for it in this case. There is, of course, a normal and proper effect which many rules exe'rt upon appeals as a necessary consequence of their regulation of procedure in the district court. Rule 54(b) is effective in the same way. It is only the questionable additional effect which we would avoid by our construction of the Rule.
Summarizing our analysis of the matter in question, it seems to us that there is a quantitative conception of final decision, as distinguished from- the new procedural steps and policy findings in the district court now prerequisite for the entry of finally dispositive partial judgment, for which we must continue to look to Section 1291 as authoritatively construed. A finding of a district court that no just cause exists for delaying partial judgment, such as was made in this case, does not of its own force and without regard to the coverage of the dispositive order make a “judgment” entered pursuant thereto ap-pealable, whatever the considerations may have been which induced the district court’s conclusion. At most such considerations might have effect in persuading the Supreme Court to reconstrue Section 1291 and recognize some hitherto unfo'rmulated exception to the present general rule against partial appeals. But it is not our function to declare such exception in a situation where neither the holdings nor. the reasoning of the Cou'rt in construing Section 1291 seem to permit it.

. General Electric Co. v. Marvel Rare Metals Co., 1932, 287 U.S. 4,30, 53 S.Ct. 202, 77 L.Ed. 408; Ward Baking Co. v. Weber Bros., 3 Cir., 1916, 230 P. 142; Drittel v. Friedman, 2 Cir., 1946, 154 F.2d 033. Contrast the more limited effect of the order involved in Morgenstern Chemical Co. v. Schering Corp., 3 Cir., 1950, 181 F.2d 160.

. The opinion of Judge Learned Hand, for himself, Chief Judge Swan and Judge Augustus Hand, in Flegenheimer v. General Mills, 2 Cir., 1951, 191 F.2d 237, and the separate opinion of Judge Frank in Pabellon v. Grace Line, 2 Cir., 1931, 191 F.2d 169, 176. The contrary views of Judges Chase and Clark appear in Judge Clark’s opinion in Pabellon v. Grace Line, supra, and more recently have been elaborated in Judge Clark’s separate opinion in Lopinsky v. Hertz Drive-Ur-Self Systems, 2 Cir., 1951, 194. F.2d 422. Judge Medina did not sit in any of these cases.

. “Judgment Upon Multiple Claims. When more than one claim for relief is pre*278sented 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 than 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. * * * ”

. E. g., Cohen v. Globe Indemnity Co., 1941, 120 F.2d 791; Canister Co. v. National Can Corp., 1947, 163 F.2d 683.

. Catlin v. U. S., 1945, 324 U.S. 229, 65 S.Ct. 631, 89 L.Ed. 911; Collins v. Miller, 1920, 252 U.S. 364, 40 S.Ct. 347, 64 L.Ed. 616; Ex parte National Enameling & Stamping Co., 1906, 201 U.S. 156, 26 S.Ct. 404, 50 L.Ed. 707; Hohorst v. Hamburg-American Packet Co., 1893, 148 U.S. 262, 13 S.Ct. 590, 37 L.Ed. 443.

. Countervailing special considerations of policy have resulted in the allowance of appeal from specified interlocutory orders under Section 1292 of Title 28. They are not relevant to the present argument.

. Withenbury v. U. S., 1866, 5 Wall. 819, 18 L.Ed. 613; Hill v. Chicago & Evanston R. R. Co., 1891, 140 U.S. 52, 11 S.*279Ct. 690, 35 L.Ed. 331; United States v. River Rouge Improvement Co., 1926, 269 U.S. 411, 46 S.Ct. 144, 70 L.Ed. 339. Compare Dickinson v. Petroleum Conversion Corp., 1950, 338 U.S. 507, 70 S.Ct. 322, 94 L.Ed. 299.

. The terminology now used in Rule 13 of the Federal Rules of Civil Procedure, 28 U.S.C., to describe a situation long familiar in pleading.

. General Electric Co. v. Marvel Rare Metals Co., 1932, 287 U.S. 430, 53 S.Ct. 202, 77 L.Ed. 408; Winters v. Ethell, 1889, 132 U.S. 207, 10 S.Ct. 56, 33 L.Ed. 339; Ayres v. Carver, 1854, 17 How. 591, 15 L.Ed. 179. And see references to this antecedent doctrine in cases cited in note 10, infra.

. Nachtman v. Crucible Steel Co., 3 Cir., 1948, 165 F.2d 997; Eastern Transport Co. v. U. S., 2 Cir., 1947, 159 F.2d 349; Toomey v. Toomey, 1945, 80 U.S. App.D.C. 77, 149 F.2d 19. Accord: Coffman v. Federal Laboratories Inc., 3 Cir., 1948, 171 F.2d 94. Cf. Cohen v. Globe Indemnity Co., 3 Cir., 1941, 120 F.2d 791.

. See Moore, Judicial Code Commentary (1949) 510-11.

. E. g., Collins v. Miller, 1920, 252 U.S. 364, 370, 40 S.Ct. 347, 64 L.Ed. 616.

. Reeves v. Beardall, 1942, 316 U.S. 283, 285, 62 S.Ct. 1035, 1087, 86 L.Ed. 1478.

. Lyman v. Remington Rand, Inc., 2 Cir., 1951, 188 F.2d 806; David v. District of Columbia, 1950, 88 U.S.App.D.C. 92, 187 F.2d 204; Winsor v. Daumit, 7 Cir., 1950, 179 F.2d 475.

. 48 Stat. 1084 (1934).

. See Sibbach v. Wilson & Co., 1941, 312 U.S. 1, 10, 61 S.Ct. 422, 424, 85 L.Ed. 479; Cf., Mississippi Publishing Corp. v. Murphree, 1946, 326 U.S. 438, 66 S.Ct. 242, 90 L.Ed. 185; Meek v. Centre County Banking Co., 1925, 268 U.S. 426, 45 S.Ct. 560, 69 L.Ed. 1028.

. Cf., Davidson Bros. Marble Co. v. U. S. ex rel. Gibson, 1909, 213 U.S. 10, 18-19, 29 S.Ct. 324, 53 L.Ed. 675; Hudson v. Parker, 1895, 156 U.S. 277, 284, 15 S.Ct. 450, 39 L.Ed. 424; both cited in support of the language of Sibbach v. Wilson & Co., supra, note 16. For the contrary view of a chief architect of the new rules, see Moore, Judicial Code Commentary (1949) 516-17.

. See Audi Vision, Inc., v. R.C.A. Mfg. Co., 2 Cir., 1943, 136 F.2d 621, 624, 147 A.L.R. 574; Hunteman v. New Orleans Public Service, Inc., 5 Cir., 1941, 119 F.2d 465, 466 ; 3 Moore Federal Practice (1st ed. 1938) 3155. Particularly noteworthy is the note of the Advisory Committee on Rule 54(b), 28 U.S.C.A. Federal Rules of Civil Procedure, page 118, stating the draftsmen’s conception that the “historic rule in the federal courts [wMch] has always prohibited piecemeal disposal of litigation and permitted appeals only from final judgments” should be retained “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”. And with optimism concerning the results of their highly competent labors they add “This is afforded by amended Rule 54(b) which re-establishes an ancient policy with clarity and precision”. Whether in the light of subsequent events this is an over-estimation of the potential of a few words however well chosen for the simple solution of such a problem as this or an under-estimation of the capacity of judges for obfuscation, it is significant of the limited effect intended for the new rule.
The note is further significant in its revelation that experience with the earlier form of Rule 54 (b) had shown a tendency to employ the rule, contrary to its intention, to enlarge the field of appeals from partial judgments not final under precedent conceptions. The new rule was conceived restrietively to avoid this consequence of its predecessor.

. Flegenheimer v. General Mills, supra, note 2. This holding was anticipated by comments of Judge Frank in Clark v. Taylor, 2 Cir., 1947, 163 F.2d 940, 951 note 12.

. See cases cited in note 14, supra.