Court Opinion

ID: 3038017
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:57:42.748255+00
Date Added: 2024-06-11T12:13:44.683930
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Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

5-22-2008

In Re Isolagen Inc
Precedential or Non-Precedential: Non-Precedential

Docket No. 07-2445

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Recommended Citation
"In Re Isolagen Inc " (2008). 2008 Decisions. Paper 1153.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/1153

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                                                    NOT PRECEDENTIAL

              UNITED STATES COURT OF APPEALS
                   FOR THE THIRD CIRCUIT

                             No. 07-2445

 IN RE: ISOLAGEN INC. SECURITIES & DERIVATIVE LITIGATION
                       (MDL No. 1741)

     RICHARD KEENE, derivatively and on behalf of Isolagen, Inc.,
                                      Appellant

                                  v.

FRANK M. DELAPE; ROBERT J. BITTERMAN; MICHAEL MACALUSO;
    JEFFREY W. TOMZ; OLGA MARKO; WILLIAM K. BOSS, JR.;
    MICHAEL AVIGNON; STEVEN MORRELL; HENRY Y.L. TOH;
  RALPH DE MARTINO; MARSHALL G. WEBB and ISOLAGEN, INC.
                  (D.C. Civil No. 06-cv-01302)

      APPEAL FROM THE UNITED STATES DISTRICT COURT
        FOR THE EASTERN DISTRICT OF PENNSYLVANIA
         District Judge: The Honorable Ronald L. Buckwalter

              Submitted Under Third Circuit LAR 34.1(a)
                            May 5, 2008

 Before: SCIRICA, Chief Judge, BARRY and HARDIMAN, Circuit Judges

                    (Opinion Filed: May 22, 2008)

                              OPINION
BARRY, Circuit Judge

       Richard Keene (“Keene”), suing derivatively on behalf of Isolagen, Inc. (the

“Company”), appeals the District Court’s order dismissing his complaint. We conclude

that the District Court’s order is not a final order within the meaning of 28 U.S.C. § 1291,

and will dismiss the appeal for lack of jurisdiction.

                                              I.

       The amended shareholders’ derivative complaint alleges, among other things, that

defendants, all former and current officers and directors of the Company, misrepresented

the Company’s progress toward gaining regulatory approval of its lead product candidate,

the Isolagen Process, and that certain of the defendants profited by trading the Company’s

stock at prices they knew were artificially high.

       In the District Court, defendants moved to dismiss the complaint on three

alternative grounds: (1) the complaint did not establish demand futility; (2) the complaint

did not allege facts sufficient to establish that any of the defendants breached any

fiduciary duties owed to the Company; and/or (3) the complaint was prematurely filed

because the outcome of this suit is contingent upon success by plaintiffs in the related

securities class action also pending before the District Court. The District Court granted

the motion in an order entered April 11, 2007, agreeing with defendants that the case was

not ripe for judicial review. In this regard, the Court concluded:

              The majority of the damages the Plaintiff is claiming are contingent
       upon the outcome of the related securities class action which is still pending

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       before this Court. The damages the Plaintiff is claiming are clearly
       contingent on the related securities class action lawsuit because the Plaintiff
       states as much in his Response to the Defendants’ Motion to Dismiss.
       Therefore, the damages claimed are premature and the Complaint is
       dismissed without prejudice.

(App. at 10) (citations omitted) (emphasis added.) The Court further stated that “should

this claim ripen, the Court expects that Defendants will renew arguments 1 and 2 for

dismissal at which time the Court will determine the merits of those arguments.” (Id. at

8.) This appeal followed.

                                              II.

       Defendants do not challenge Keene’s assertion that we have jurisdiction over this

appeal pursuant to 28 U.S.C. § 1291, but, because we are a court of limited jurisdiction,

we are obliged to raise the issue sua sponte. Frederico v. Home Depot, 507 F.3d 188, 192

(3d Cir. 2007). Therefore, we will only reach the merits of the appeal if we can first

satisfy ourselves that the District Court’s “without prejudice” dismissal of Keene’s

complaint qualifies as a “final decision” under § 1291.

       “The general rule is that ‘a party is entitled to a single appeal, to be deferred until

final judgment has been entered, in which claims of district court error at any stage of the

litigation may be ventilated.’” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712

(1996) (quoting Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868 (1994)).

The quintessential “final decision” is one that “ends the litigation on the merits and leaves

nothing for the court to do but execute the judgment.” Id. (quotation and citation

                                               3
omitted). For this reason, a dismissal order that “specifically contemplate[s] that there

could be subsequent proceedings in which the litigation over the controversy would

resume” is not considered a final order for purposes of appeal. Morton Int’l Inc. v. A.E.

Staley Mfg. Co., 460 F.3d 470, 482 (3d Cir. 2006); see also Twp. of Bensalem v. Am.

Fidelity Ins. Co., 644 F.2d 990, 994 (3d Cir. 1981) (stating that “we should not be quick

to review . . . an issue which the trial court considers to be unfinished business”).

       It is glaringly obvious that the District Court’s order is not a final decision

pursuant to § 1291 because it expressly “contemplates that there could be subsequent

proceedings”, Morton, 460 F.3d at 482, following resolution of the related securities class

action pending before it. Indeed, rather than ending litigation once and for all, the

Court’s without prejudice dismissal effectively stayed further action in this case pending

resolution of another case. Proceeding with appellate review under these circumstances

would be inconsistent “with the goal of the final judgment rule – to prevent piecemeal

litigation.” Frederico, 507 F.3d at 1922. We thus lack appellate jurisdiction under §

1291, and will dismiss Keene’s appeal for lack of jurisdiction.

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