P.H. Glatfelter Company v. Windward Prospects Limited , 847 F.3d 452 ( 2017 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 15-3847, 16-1197, & 16-1310
P.H. GLATFELTER CO.,
Plaintiff-Appellant/Cross-Appellee,
v.
WINDWARD PROSPECTS LTD.,
Defendant-Appellee/Cross-Appellant.
____________________
Appeal from the United States District Court for the
Eastern District of Wisconsin, Green Bay Division.
No. 15-MC-46 — William C. Griesbach, Chief Judge.
____________________
ARGUED JANUARY 19, 2017 — DECIDED JANUARY 31, 2017
____________________
Before FLAUM, MANION, and WILLIAMS, Circuit Judges.
FLAUM, Circuit Judge. These three appeals arise out of a dis-
covery dispute between P.H. Glatfelter Co., a paper manufac-
turer, and Windward Prospects Ltd., an English company on
which Glatfelter served a non-party subpoena. Two of the ap-
peals are taken by Glatfelter from the district court’s orders
denying both Glatfelter’s motion to compel responses to its
subpoena and Glatfelter’s motion for reconsideration. The
third appeal, which we treat as a cross-appeal, was taken by
2 Nos. 15-3847, 16-1197, & 16-1310
Windward to seek an award of fees and costs under Federal
Rule of Civil Procedure 37. For the reasons that follow, we dis-
miss all three appeals for lack of jurisdiction.
I. Background
The present appeals are ancillary to an ongoing multi-
party effort to clean up polychlorinated biphenyls (PCBs) in
the bed of the Lower Fox River in northeastern Wisconsin. See
generally United States v. P.H. Glatfelter Co., 768 F.3d 662, 665–
67 (7th Cir. 2014); NCR Corp. v. George A. Whiting Paper Co., 768
F.3d 682, 686–89 (7th Cir. 2014); United States v. NCR Corp., 688
F.3d 833, 835–36 (7th Cir. 2012). From the mid-1950s through
the 1970s, several paper mills and a coating plant discharged
wastewater containing PCBs into the Lower Fox River. By
1979, when the EPA banned PCB use, approximately 250,000
pounds of PCBs had been released into the river bed. Begin-
ning in the 1990s, the EPA and the Wisconsin Department of
Natural Resources began investigating the contamination to
develop a cleanup plan under the Comprehensive Environ-
mental Response, Compensation, and Liability Act
(CERCLA). The EPA’s final plan, adopted in 2002, proposed a
cleanup proceeding in stages through a combination of
dredging and capping at various sites.
The remediation cost for the Lower Fox River is estimated
to be approximately $700 million. See, e.g., P.H. Glatfelter Co.,
768 F.3d at 667. Under CERCLA, the obligation to pay for the
cleanup falls on the parties responsible for creating the haz-
ard, and potentially responsible parties (PRPs) may be liable
for the full costs of remediation. Paper manufacturers NCR
Corporation and Appvion, Inc. were named by the EPA as
PRPs and have funded the ongoing cleanup. Other companies
Nos. 15-3847, 16-1197, & 16-1310 3
with a potential role in the discharge of PCBs, including Glat-
felter, also were named as PRPs and agreed to perform reme-
dial work.
In late 2007, the EPA issued a unilateral administrative or-
der directing the PRPs to begin remedial work in the last four
operable units of the Lower Fox River. NCR and Appvion un-
dertook many of those remedial efforts. They then sued other
PRPs, including Glatfelter, in the Eastern District of Wiscon-
sin, seeking to recover the cleanup costs and to require other
PRPs to pay for future remedial work. 1 The district court ini-
tially ruled on summary judgment that NCR and Appvion
were not entitled to any equitable contribution from the other
paper mills involved. In 2014, we reversed and remanded the
cost recovery action back to the district court. See NCR Corp.,
768 F.3d at 687, 689–90, 713. That action remains pending,
with Appvion seeking recovery against Glatfelter and other
PRPs for the Lower Fox River cleanup costs Appvion has in-
curred, in addition to subrogation and declaratory relief.
1 As we observed in NCR Corp., 768 F.3d at 692:
Appvion finds itself in a materially different position
from NCR when it comes to the choice between cost re-
covery and contribution. In fact, it appears to be in an un-
usual, possibly unique, position among parties incurring
costs under CERCLA: it was initially identified as a PRP
by the government and paid response costs in that capac-
ity, but later it was held to fall outside of CERCLA’s stat-
utory grounds for liability. It is now on the hook for re-
sponse costs only as NCR’s indemnitor pursuant to an
agreement signed when the companies split up. It is seek-
ing the costs of response it paid directly while it was re-
garded as a PRP.
4 Nos. 15-3847, 16-1197, & 16-1310
Windward is an English entity allegedly conducting Ap-
pvion’s defense of CERCLA claims and managing Appvion’s
responsibility for the Lower Fox River cleanup operations.
Windward ratified the commencement of the cost recovery
action by Appvion and has stated that Windward will be
bound by the result. To defend against Appvion in the cost
recovery action, Glatfelter sought discovery relating to Ap-
pvion’s costs from both Appvion and Windward. Glatfelter
contends that identifying those costs (and any potential off-
sets from insurance, settlements, or indemnification pay-
ments) depends on understanding how funds changed hands
between Appvion and its insurers or indemnitors, including
Windward.
Glatfelter first attempted to obtain discovery from Wind-
ward through Appvion, which refused to accept service on
Windward’s behalf. Glatfelter next sent a copy of its discovery
request by certified mail to Windward’s counsel at his home
office in New Hampshire. He returned the envelope uno-
pened. Glatfelter then filed a motion to compel responses to
its discovery requests in the Eastern District of Wisconsin. The
district court denied the motion, ruling that Windward’s rati-
fication of Appvion’s action did not, on its own, give Glatfelter
an independent right to seek discovery from the former under
Federal Rules of Civil Procedure 33 or 34, but that there are
other ways to obtain discovery from non-parties.
Glatfelter next issued a subpoena to Windward at its attor-
ney’s New Hampshire address. Windward’s counsel in-
formed Glatfelter that Windward would not be making any
production because it was not subject to the jurisdiction of the
United States federal courts. Windward also objected to the
Nos. 15-3847, 16-1197, & 16-1310 5
subpoena to the extent that it sought documents or infor-
mation available from another more convenient, less burden-
some, or less expensive source (i.e., Appvion).
Glatfelter then instituted this ancillary proceeding in the
District of Massachusetts, 2 seeking to compel Windward to re-
spond to the subpoena. Glatfelter also simultaneously moved
under Rule 45(f) to transfer the case to the Eastern District of
Wisconsin, where the cost recovery action was pending before
Judge Griesbach, who had presided over the case since it was
first filed. Following a hearing, the magistrate judge in Mas-
sachusetts ordered a transfer to the Eastern District of Wis-
consin, and the ancillary action was docketed before Judge
Griesbach. After receiving additional arguments and evi-
dence, he denied the motion to compel, concluding that the
court lacked personal jurisdiction over Windward and that
Glatfelter had not established which documents it sought that
were not already subject to production by Appvion. Glatfelter
filed a motion for reconsideration, which the district court
also denied.
Glatfelter appealed the district court’s denial of its mo-
tions, and Windward filed a third appeal regarding fees,
which we treated as a cross-appeal. In our order dated July
25, 2016, we directed that Windward’s cross-appeal be taken
with the other appeals, and instructed the parties to address
all jurisdictional issues in their briefs.
2 Rule 45(d)(2)(B) provides that “the serving party may move the court
for the district where compliance is required for an order compelling pro-
duction” and “the order [to compel production] must protect a person
who is neither a party nor a party’s officer from significant expense result-
ing from compliance.” Fed. R. Civ. P. 45(d)(2)(B)(i)-(ii).
6 Nos. 15-3847, 16-1197, & 16-1310
On January 17, 2017, two days before oral argument was
scheduled in this case, Glatfelter notified this Court of a pro-
posed consent decree among NCR, Appvion, the United
States, and the state of Wisconsin that had been submitted to
the district court. If approved and entered, the proposed de-
cree would potentially resolve Appvion’s claims against Glat-
felter in the cost recovery action that gave rise to these ancil-
lary proceedings.
II. Discussion
“The initial inquiry in any appeal is whether the court to
which the appeal has been taken has jurisdiction to entertain
the appeal.” Sik Gaek, Inc. v. Harris, 789 F.3d 797, 799 (7th Cir.
2015) (citation omitted). The federal courts of appeal have ju-
risdiction over all final decisions of the federal district courts.
See 28 U.S.C. § 1291. A final decision is one that “ends the liti-
gation on the merits, leaving nothing for the [district] court to
do but execute the judgment.” Midland Asphalt Corp. v. United
States, 489 U.S. 794, 798 (1989) (citation omitted). The general
rule is that pretrial discovery orders, such as those at issue
here, are not final in terms of winding up the underlying law-
suit. See Sik Gaek, Inc., 789 F.3d at 799. An exception exists,
however, under the collateral order doctrine, where an order
“conclusively determine[s] the disputed question, resolve[s]
an important issue completely separate from the merits of the
action, and [is] effectively unreviewable on appeal from a fi-
nal judgment.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 468
(1978) (citing Abney v. United States, 431 U.S. 651, 658 (1977);
United States v. MacDonald, 435 U.S. 850, 855 (1978)).
Glatfelter emphasizes that this ancillary discovery issue
has been conclusively decided by the district court’s two or-
ders and is collateral to the underlying cost recovery suit, and
Nos. 15-3847, 16-1197, & 16-1310 7
that this appeal is, for all practical purposes, Glatfelter’s only
chance to obtain discovery from Windward, a non-party to
the main action. See, e.g., Carter Prods., Inc. v. Eversharp, Inc.,
360 F.2d 868, 870 (7th Cir. 1966) (finding jurisdiction over an
appeal from the Illinois district court’s denial of a motion to
compel deposition testimony of non-party to underlying Cal-
ifornia litigation, because, “[f]or all practical purposes[,] …
this appeal [is appellants’] only opportunity for review of the
district court’s order denying access to the information”).
Thus, Glatfelter contends, the collateral order doctrine ought
to apply.
The problem for Glatfelter is that this ancillary action was
transferred from the District of Massachusetts to the Eastern
District of Wisconsin prior to this appeal. In our Circuit, we
have recognized the appealability of pretrial discovery orders
only where they were issued by a district court in an ancillary
proceeding and said district court was not within the jurisdic-
tion of the circuit court having appellate jurisdiction to review
the final adjudication of the main action. See, e.g., Sik Gaek, Inc.,
789 F.3d at 799 (“Here, the district court order denying sanc-
tions was issued in a jurisdiction not that of the main proceed-
ing. Consequently, appellants cannot obtain effective review
of the order as part of an appeal of a final adjudication of the
main action ….”); see also id. (citing cases); Hernly v. United
States, 832 F.2d 980, 981 n.1 (7th Cir. 1987) (“This court has
previously decided that it has jurisdiction. The order ap-
pealed from was deemed final because it was entered in a dif-
ferent district court from where the main action is pending.”)
(citation and internal quotation marks omitted). Because the
ancillary action (this discovery dispute) is in the same district
court where the main action (the cost recovery action) is cur-
rently pending, Glatfelter could obtain review of the denial of
8 Nos. 15-3847, 16-1197, & 16-1310
its motions to compel and for reconsideration on appeal from
the final judgment in the main action.
We have not yet ruled directly on whether one may appeal
an order in an ancillary action entered in a district court lo-
cated in the same circuit as the district court handling the
main action. However, other circuits that have considered the
issue have held such orders interlocutory and not immedi-
ately appealable. See, e.g., Barrick Grp., Inc. v. Mosse, 849 F.2d
70, 73 (2d Cir. 1988) (“Under these circumstances, a circuit
court can consider any appeal on discovery issues at the same
time as the appeal from the judgment in the underlying ac-
tion. This approach avoids piecemeal proceedings, strength-
ens the rule of finality and provides ultimately for the effec-
tive review of all issues.”); Hooker v. Cont’l Life Ins. Co., 965
F.2d 903, 905 (10th Cir. 1992) (focusing on whether the appeal-
ing party “has any means, other than an immediate appeal, to
obtain appellate review,” and concluding that “[b]ecause the
same circuit court will have jurisdiction to review both the
discovery order and the final adjudication …, appellate re-
view of the order denying discovery will not be foreclosed by
delaying review until a final adjudication of the entire ac-
tion”); In re Subpoena Served on Cal. Pub. Utils. Comm’n, 813
F.2d 1473, 1475–80 (9th Cir. 1987) (dismissing, sua sponte, ap-
peal of an order quashing a non-party subpoena for want of
appellate jurisdiction because court could review the order
with appeal from final adjudication of main action).
Glatfelter nonetheless points to decisions by the Eleventh
and Federal Circuits that it claims support its position: that an
order denying a motion to compel may still be appealable,
even if entered by a district court located within the same cir-
cuit as the court presiding over the main action. See Ariel v.
Nos. 15-3847, 16-1197, & 16-1310 9
Jones, 693 F.2d 1058, 1059 (11th Cir. 1982) (per curiam) (con-
cluding that appellate jurisdiction existed over Southern Dis-
trict of Florida order quashing subpoena issued in connection
with main action pending in Middle District of Florida); Heat
& Control, Inc. v. Hester Indus., Inc., 785 F.2d 1017, 1020–22
(Fed. Cir. 1986) (holding that appellate jurisdiction existed
with respect to Northern District of West Virginia order grant-
ing a motion to quash a non-party subpoena in connection
with a main action pending in the Northern District of Cali-
fornia). Glatfelter thus contends that there is a circuit split
here that ought to be resolved in its favor.
To cut to the chase, however, even setting aside the appar-
ent limitations of these two cases, 3 there certainly is no circuit
3
For example, the circuit decisions on which Ariel relied all involved
situations where the two district courts at issue were in different circuits.
See Nat’l Life Ins. Co. v. Hartford Accident & Indem. Co., 615 F.2d 595 (3d Cir.
1980) (finding appellate jurisdiction over denial of motion to compel dis-
covery from non-party in Third Circuit where main action was pending in
Fifth Circuit); Republic Gear Co. v. Borg-Warner Corp., 381 F.2d 551 (2d Cir.
1967) (same for denial of motion to compel discovery in Second Circuit
where main action was pending in Seventh Circuit); Gladrow v. Weisz, 354
F.2d 464 (5th Cir. 1965) (same for appeal of order requiring discovery of
non-party in Fifth Circuit where main action was pending before board of
patent interferences of United States Patent Office); Horizons Titanium
Corp. v. Norton Co., 290 F.2d 421 (1st Cir. 1961) (same for order granting
motion to quash subpoena in First Circuit where main action was pending
in D.C. Circuit). Additionally, the treatise to which Ariel cited in support
of its analysis has since been updated to include language reflecting that
“[t]his exception has itself now been limited to situations in which the two
districts are in different circuits.” 8 CHARLES ALAN WRIGHT AND ARTHUR
R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2006 (3d ed. 2016).
As for the Federal Circuit case, in Hester, a patent owner sought dis-
covery in the Northern District of West Virginia from a non-party who
allegedly had infringed the patent at issue in a litigation pending before
10 Nos. 15-3847, 16-1197, & 16-1310
split or authority in favor of Glatfelter’s position on the issue
of whether a discovery order in an ancillary proceeding is im-
mediately appealable when entered by the very same district
court that is presiding over the main action. Cf. In re Subpoena
Served on Cal. Pub. Utils. Comm’n, 813 F.2d at 1474–75
(contrasting “a nonappealable interlocutory order issued by
the district court having jurisdiction over the main action”
with “an interlocutory order issued by a district court of a dif-
ferent circuit from the district court where the case was
the Northern District of California. 785 F.2d at 1020–21. The Northern Dis-
trict of West Virginia quashed the subpoena, and the patent owner ap-
pealed to the Federal Circuit, which concluded that, because the California
district court lacked jurisdiction over the non-party infringer, the patent
owner could not challenge the West Virginia district court’s decision on
appeal from the California district court’s final judgment, and the collat-
eral order doctrine applied. The Federal Circuit then considered whether
its result should have been different because it was the same appellate
court that would have jurisdiction over an appeal on the merits from the
California district court. See id. at 1021. The court of appeals observed that,
prior to the creation of the Federal Circuit, the order by the West Virginia
district court would have been appealable to the Fourth Circuit, and be-
cause such an order would have been appealable as a final disposition of
the only proceeding in the ancillary court:
[W]e are satisfied that it does not matter that the Federal
Circuit is the same appellate court that would possess ju-
risdiction over an appeal from the California district
court’s final action on the merits. The California court has
no jurisdiction over Hester, a nonparty to the main in-
fringement action, and Heat & Control has no other
means of effectively obtaining review than by appealing
the West Virginia court’s order, necessarily to this court.
Thus, the West Virginia court’s order is appealable, and
this court possesses jurisdiction to hear it.
Id. at 1021–22.
Nos. 15-3847, 16-1197, & 16-1310 11
filed”). Indeed, the Federal Circuit in Hester specifically ob-
served that “[i]f the district court granting Hester’s motion to
quash were the same court in which the main action is being
litigated, [appellant] could seek review, as an error of the
court, when and if it appeals from the final judgment.” 785
F.2d at 1021.
Glatfelter protests that we should nonetheless find juris-
diction over its appeals because the only reason this ancillary
action, which was commenced in a district court in another
circuit, is now in the same court as the main action, is that
Glatfelter moved for transfer under Rule 45(f). Rule 45(f),
which Glatfelter emphasizes was only recently promulgated
in 2013, 4 provides:
When the court where compliance is required
did not issue the subpoena, it may transfer a
motion under this rule to the issuing court if the
person subject to the subpoena consents or if the
court finds exceptional circumstances…. To en-
force its order, the issuing court may transfer
the order to the court where the motion was
made.
4 Windward pushes back on this characterization of Rule 45(f), noting
that transfer is hardly a novel concept and was available long before 2013.
See, e.g., 28 U.S.C. § 1404 (change-of-venue provision). Windward explains
the Rule 45(f) transfer provision as one that was included because the new
Rule 45 requires a motion to compel to be brought in the court of compli-
ance, see Fed. R. Civ. P. 45(d)(2)(B), not in the issuing court (presiding over
the main action). Thus, Glatfelter would previously have had the option
of bringing its motion to compel in the Eastern District of Wisconsin,
where no immediate appeal would be available; according to Windward,
the “new” Rule 45(f) does not change that principle.
12 Nos. 15-3847, 16-1197, & 16-1310
Fed. R. Civ. P. 45(f). 5 Glatfelter emphasizes that the purpose
of this rule is to efficiently consolidate motions before a single
judge presiding over complex litigation. A holding that we
lack appellate jurisdiction over its appeals would, according
to Glatfelter, put parties in the position of either being forced
to litigate a motion to compel before a district judge who has
had no contact with the underlying case, or forfeiting appel-
late review if the motion were to be denied. Glatfelter relat-
edly claims that the Rules Advisory Committee could not
have intended that litigants lose access to immediate appeal
upon transfer into the circuit of the main action under Rule
45(f).
Glatfelter has it backwards. By allowing for transfers, Rule
45(f) allows for consolidation of motions in a single appropri-
ate court, thereby avoiding piecemeal litigation in multiple
fora as well as piecemeal appeals. See, e.g., United States v.
Nixon, 418 U.S. 683, 690 (1974) (noting the “strong congres-
sional policy against piecemeal reviews, and against obstruct-
ing or impeding an ongoing judicial proceeding by interlocu-
tory appeals”); Cobbledick v. United States, 309 U.S. 323, 325
(1940) (“Since the right to a judgment from more than one
court is a matter of grace and not a necessary ingredient of
justice, Congress from the very beginning has, by forbidding
piecemeal disposition on appeal of what for practical pur-
poses is a single controversy, set itself against enfeebling judi-
cial administration.”). Glatfelter is correct that this discovery
dispute is ancillary and does not require consideration with
the underlying main action. However, as the Supreme Court
5
Windward opposed Glatfelter’s transfer motion, contending that
even if jurisdiction existed over Windward, this matter lacks the “excep-
tional circumstances” required by Rule 45(f) as a predicate to transfer.
Nos. 15-3847, 16-1197, & 16-1310 13
explained in Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100
(2009), the collateral order doctrine “must never be allowed to
swallow the general rule that a party is entitled to a single ap-
peal, to be deferred until final judgment has been entered.” Id.
at 106 (citation and internal quotation marks omitted).
Glatfelter complains that “a final disposition of a discov-
ery dispute would, at most, be unreviewable and, at best,
would have to await a plenary appeal from a merits judg-
ment.” Yet the availability of plenary appeal from a final judg-
ment is precisely why discovery orders like these are interloc-
utory and not immediately appealable. Our Circuit has con-
sistently underscored that “what is critical is whether the
party unsuccessfully seeking the subpoena has any other
means of obtaining review.” Carter Prods., 360 F.2d at 872. It is
only then that we should “extricate appellants from the cul-
de-sac in which the district court’s order leaves them.” Id.
Here, Glatfelter has a clear road forward. It may not be Glat-
felter’s preferred route, but, “[t]hat a ruling may burden liti-
gants in ways that are only imperfectly reparable by appellate
reversal of a final district court judgment has never sufficed.”
Mohawk Indus., 558 U.S. at 107 (citation, alteration, and inter-
nal quotation marks omitted). As the denials of Glatfelter’s
motions would be reviewable on appeal from a final judg-
ment, we dismiss these appeals for lack of jurisdiction. 6
Windward submitted in its briefs and at oral argument
that it would voluntarily dismiss its cross-appeal if we found
that we lack jurisdiction over Glatfelter’s appeals. Windward’s
(likely premature) cross-appeal is thus also dismissed.
6
Because we lack jurisdiction in the first place, the potential effect of
the proposed consent decree on this action is moot.
14 Nos. 15-3847, 16-1197, & 16-1310
III. Conclusion
For the foregoing reasons, we dismiss this case in its en-
tirety for lack of jurisdiction.