Verzilli v. Flexon, Inc. , 295 F.3d 421 ( 2002 )

Opinions of the United
2002 Decisions States Court of Appeals
for the Third Circuit
7-3-2002
Verzilli v. Flexon Inc
Precedential or Non-Precedential: Precedential
Docket No. 01-2282
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"Verzilli v. Flexon Inc" (2002). 2002 Decisions. Paper 373.
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PRECEDENTIAL
Filed July 3, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 01-2282
SUZANNE L. VERZILLI and LARRY M. VERZILLI,
v.
FLEXON, INC.; DAIRY FARMERS OF AMERICA, INC., as
Successor in Interest to MILK MARKETING, INC.,
d/b/a FARMERS CHEESE
v.
FLEXON, INC.,
Third-Party Plaintiff
v.
DAIRY FARMERS OF AMERICA, INC., as Successor in
Interest to Milk Marketing, Inc., d/b/a Farmers Cheese;
B.E.A., INC., JOHN WOLFE, t/d/b/a Wolfe Industrial
Service; GILCO; MILLER EDGE,
Third-Party Defendants
SUZANNE L. VERZILLI and LARRY VERZILLI, Appellants
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
(D.C. Civ. No. 98-886 )
Ila Jeanne Sensenich, United States Magistrate Judge
Argued April 30, 2002
Before: NYGAARD, ROTH, and WEIS, Circuit Judge s.
(Filed July 3, 2002)
J. Gerald Ingram, Esquire (ARGUED)
7330 Market Street
Youngstown, Ohio 44512
Attorney for Plaintiffs-Appellants
Thomas R. Doyle, Esquire (ARGUED)
Law Offices of Thomas R. Doyle
Two Chatham Center, Suite 1750
Pittsburgh, Pennsylvania 15219
Attorney for Appellee
OPINION OF THE COURT
WEIS, Circuit Judge.
The consent judgment and stipulation in this civil case
provides for an end to the litigation only upon the
affirmance on appeal of a controverted interlocutory order
entered by the District Court. We conclude that the
judgment is not final under 28 U.S.C. S 1291 and,
accordingly, we lack appellate jurisdiction. We therefore will
dismiss the appeal.
In this diversity personal injury suit, plaintiff 1 sought
damages from Dairy Farmers of America, Inc., and other
defendants. The parties consented to trial by a magistrate
judge pursuant to 28 U.S.C. S 636(c)(1). During the course
of the litigation, on April 3, 2001, the magistrate judge
ruled that the plaintiff ’s claim for damages would be
restricted because she had failed to follow the District
Court’s pretrial rules with respect to the production of the
report of one her medical experts.
After settling with the other defendants on pro rata
releases, the plaintiff agreed to enter into a consent
judgment with Diary Farmers of America, Inc. In
accordance with a stipulation between the parties, the
District Court entered a consent judgment "in favor of
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1. Although the husband is listed as a plaintiff, his damages are limited
to loss of consortium, a derivative claim. We will refer to plaintiff in the
singular.
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Plaintiffs Suzanne L. Verzilli and Larry Verzilli in the
amount of $13,000. Plaintiffs expressly reserve their rights
of appeal, and Defendant Dairy Farmers of America, Inc.
expressly denies any admission of liability." The Court also
stated in the judgment that "[t]his is a final order and there
is no just cause for delay."
In the stipulation that was filed together with the consent
judgment, the parties agreed that if this Court reversed,
". . . defendant, Dairy Farmers of America, Inc., will be
permitted to present a full and complete defense to all
issues in this case (damage and liability).
"The parties agree that there will be no further
proceedings in this case unless the Court’s order of
April 3, 2001 [pretrial ruling on damages] is reversed
on appeal.
"It is further understood and agreed that the consent
judgment of April 19, 2001 is a final appealable order
pursuant to 28 U.S.C. S 1291."
The plaintiff has appealed, contending that the District
Court erred in the pretrial ruling limiting her damages.
Before addressing the merits, we must determine if this
Court may entertain the appeal.
In the jurisdictional section of her brief in this Court,
plaintiff wrote, "The April 3, 2001 Consent Judgment was a
‘final order’ and determined that there was no just cause
for delay." No further elaboration or discussion of appellate
jurisdiction was presented. The defendant’s brief did not
mention the issue. Because both parties had failed to
clarify appellate jurisdiction, the Court advised them in
advance that they should be prepared to discuss the matter
at oral argument.
The jurisdiction of the Courts of Appeals is limited, and
they lack authority to review an appeal unless specified
requirements are satisfied. In general, an appeal must be
taken from a final decision under 28 U.S.C. S 1291. Some
exceptions exist, such as appeals from preliminary
injunctions or the certification of determinative questions of
law under 28 U.S.C. S 1292(b). Other appealable
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interlocutory orders are listed in section 1292 but are not
of concern here.
If a case involves a number of separate claims or parties,
the district court may designate certain partial
determinations as final for purposes of appeal under
Federal Rule of Civil Procedure 54(b). Here, however, there
is only one claim -- that of the plaintiff -- and at the time
the appeal was taken only one defendant remained in the
case. Accordingly, Rule 54(b) is not helpful.
Nor does the exception for certifications of controlling
questions of law, provided by 28 U.S.C. S 1292(b), apply in
this case. None of the prerequisites required by that
provision, such as certification by the district court and
acceptance by this Court, have been met. Indeed, it appears
that the parties have attempted to bypass those
requirements through the stipulation and consent
judgment.
We are aware that in the criminal procedural field, a
defendant may enter a guilty plea, reserving the right to
appeal a disputed ruling. See Fed. R. Crim. P. 11(a)(2). No
such provision, however, exists in the civil rules.
The issue before us is whether the consent judgment can
be considered final for purposes of section 1291. Generally,
pretrial conference orders are inherently interlocutory and
not appealable. Charles Alan Wright, Arthur R. Miller, &
Edward H. Cooper, Federal Practice & Procedure:
Jurisdiction 2d S 3914.27.
Preliminarily, we must consider whether a consent
judgment per se is appealable. The Courts of Appeals have
"jurisdiction of appeals from all final decisions of the
district courts . . . ." 28 U.S.C. S 1291. In an early case, the
Supreme Court held that a consent decree could be
appealed as of right. Pacific R.R. v. Ketchum , 101 U.S. 280,
296 (1879). The statutory language in effect at that time is
still extant in relevant portions of 28 U.S.C. S 1291. As the
Court remarked in Downey v. State Farm Fire & Cas. Co.,
266 F.3d 675, 682 (7th Cir. 2001), "for jurisdictional
purposes, there is no distinction between ‘consent’ and
‘adversial’ judgments" within the ambit of section 1291.
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The fact that the parties to an appeal have agreed upon
a judgment, however, raises another question. Those who
have consented to entry of a judgment are sometimes said
to lack standing to appeal. The reasoning underlying this
approach is that a party who has agreed to the terms of a
judgment has waived the right to attack it on appeal. That
theory, however, has its limits. If a party expressly reserves
the right to appeal, the appellate court may review the
contested issue. See Charles Alan Wright, Arthur R. Miller,
& Edward H. Cooper, Federal Practice & Procedure:
Jurisdiction S 3902.
There is some disagreement among the Courts of Appeals
on the so called "standing" issue. See, e.g., Clark v. Housing
Auth. of City of Alma, 971 F.2d 723 (11th Cir. 1992)
(consent decree is appealable in some circumstances);
Hudson v. Chicago Teachers Union, Local No. 1., 922 F.2d
1306 (7th Cir. 1991) (appeal allowed because "stipulation
memorialized their continued disagreement" with issues
previously decided by the district court); Dorse v. Armstrong
World Indus., Inc., 798 F.2d 1372 (11th Cir. 1986) (appeal
allowed when parties expressly stated an intent to appeal);
Greenhouse v. Greco, 544 F.2d 1302, 1305 (5th Cir. 1977)
(party who consented to dismissing case as moot so as to
appeal district court’s order was not barred from appealing
the case because the party did not consent to a judgment
that would preclude appellate review). But see Amstar Corp.
v. Southern Pac. Transp. Co. of Texas & Louisiana , 607 F.2d
1100 (5th Cir. 1979) (appeal precluded even when parties
expressly stipulated intent to appeal).
We have recognized that, as a general rule, a party
cannot appeal a consent judgment. There are two limited
exceptions: failure to assent and lack of subject matter
jurisdiction. In re Sharon Steel Corp., 918 F.2d 434, 437 n.3
(3d Cir. 1990). But we have also held that a party to a
consent judgment may obtain appellate review if there is an
explicit reservation of the right to appeal. Keefe v.
Prudential Prop. & Cas. Co., 203 F.3d 218, 223 (3d Cir.
2000). The stipulation in this case does preserve appellate
rights and thus eliminates the defense of waiver. That said,
however, finality remains an issue.
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The purpose of section 1291 is to prohibit piecemeal
review and dispose of what is, for all practical purposes, a
single controversy in one appeal. See Cobbledick v. United
States, 309 U.S. 323, 325 (1940) (discussing rationale for
finality as condition of review). But like many other terms
in the law, "final" depends on the context in which it is
used. Perhaps no one has better expressed frustration with
defining the word than Judge Jerome Frank. " ‘Final’ is not
a clear one-purpose word; it is slithery, tricky. It does not
have a meaning constant in all contexts. . . . [t]here is, still,
too little finality about ‘finality.’ " United States v. 243.22
Acres of Land in Town of Babylon Suffolk County, N.Y., 129
F.2d 678, 680 (2d Cir. 1942).
One of the better descriptions of "final" may be found in
Coopers & Lybrand v. Livsey, 437 U.S. 463 (1978). There,
the Court said that a final judgment under section 1291 is
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 & Lybrand , 437 U.S. at
467 (quoting Catlin v. United States, 324 U.S. 229, 233
(1945)). See Quackenbush v. Allstate Ins. Co. , 517 U.S. 706,
712 (1996); Cunningham v. Hamilton County, Ohio , 527 U.S.
198, 204 (1999). See also Digital Equip. Corp. v. Desktop
Direct, Inc., 511 U.S. 863 (1994) (refusal to enforce
settlement agreement alleged to shelter a party from suit is
not immediately appealable); Bethel v. McAllister Bros., Inc.,
81 F.3d 376, 381-82 (3d Cir. 1996) (because the litigation
would be terminated whatever the disposition of non-
appealable orders, a final judgment existed for
jurisdictional purposes).2
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2. Bethel illustrates another tactic to accelerate appeal of interlocutory
pretrial rulings through refusal to proceed to trial and accepting a
dismissal for failure to prosecute. In Spain v. Gallegos, 26 F.3d 439 (3d
Cir. 1994), we held that a party disappointed with a court’s ruling may
not decline to proceed and then expect to obtain relief on appeal from a
dismissal. Marshall v. Sielaff, 492 F.2d 917, 919 (3d Cir. 1974), pointed
out that to condone such a procedural technique"would in effect provide
a means to avoid the finality rule embodied in 28 U.S.C.A. S 1291."
Because of its unique factual circumstances, the district court ruling in
Bethel was final because no further procedures were available whatever
the outcome of the appeal.
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In some circumstances, the path to finality may be
shortened through agreement of the parties. Stipulations
dependent on the outcome of an appeal can, in appropriate
settings, be enforced so as to create finality. In Nixon v.
Fitzgerald, 457 U.S. 731 (1982), the parties agreed upon a
liquidation of damages after filing a petition for certiorari.
The petitioner paid respondent $142,000, and respondent
agreed to accept an additional $28,000 if the Court ruled
against petitioner. If the Court decided in favor of
petitioner, no further sums would be due. Id. at 743-44.
The Supreme Court concluded that because the parties
retained a sufficient financial stake in the outcome of the
appeal, an actual controversy existed and was justiciable.
Id.
Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982),
presented somewhat similar conditions. There, the parties
stipulated in advance on the amount of the damages due
respondents contingent upon a favorable ruling. If the
decision was unfavorable, respondents would not be
entitled to any relief. The Supreme Court concluded that
the agreements did not deprive it of jurisdiction. Havens
Realty Corp, 455 U.S. at 370-71.
In Keefe, 203 F.3d at 222, the parties stipulated that if
it prevailed on appeal, defendant would pay plaintiff a
certain sum. If the Court did not decide the controverted
issue, then defendant would pay a greater sum. If plaintiff
were successful on appeal, then defendant would pay yet a
higher amount. The damage issue, therefore, was settled
and the stipulation eliminated the need for any further
litigation in the district court. Only the ministerial act of
entering judgment remained. That being so, we concluded
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A conflict among the courts of appeals exists on the question of
whether a district court’s dismissal of some claims without prejudice
allows other claims to be appealed without orders under Federal Rule of
Civil Procedure 54(b). Compare State Treasurer of the State of Michigan
v. Barry, 168 F.3d 8 (11th Cir. 1999), with James v. Price Stern Sloan,
Inc., 283 F.3d 1064 (9th Cir. 2002); See Fassett v. Delta Kappa Epsilon
(New York), 807 F.2d 1150 (3d Cir. 1986) (voluntary dismissal final
because statute of limitations had run).
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that the consent judgment was final. Keefe, 203 F.3d at
224.
In contrast, the parties’ stipulation in the case before us
covers only one possible outcome of the appeal -- an
affirmance by this Court. According to the stipulation, if
this Court should decide to reverse, then the matter would
return to the District Court for a full trial. Similarly, if this
Court declined to decide the propriety of the pretrial ruling,
the case would be remanded to the District Court.
Therefore, unlike Keefe or Bethel, only one possible ruling
by this Court would effectively end the District Court’s
work. Left open is the possibility of two other dispositions,
either a reversal or a dismissal for lack of appellate
jurisdiction, that would require further adjudication by the
District Court, namely, a full trial. Thus, the stipulation
does not create finality in the consent judgment and, in the
absence of that element, this Court lacks jurisdiction.
Accordingly, the appeal will be dismissed for lack of
jurisdiction.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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