351 U.S. 427 (1956), 34, Sears, Roebuck & Co. v. Mackey

Docket Nº:No. 34
Citation:351 U.S. 427, 76 S.Ct. 895, 100 L.Ed. 1297
Party Name:Sears, Roebuck & Co. v. Mackey
Case Date:June 11, 1956
Court:United States Supreme Court
 
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351 U.S. 427 (1956)

76 S.Ct. 895, 100 L.Ed. 1297

Sears, Roebuck & Co.

v.

Mackey

No. 34

United States Supreme Court

June 11, 1956

Argued February 28, 1956

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

In a multiple claims action, the Federal District Court expressly directed that judgment be entered for the defendant on two, but less than all, of the claims presented. The court also expressly determined that there was no just reason for delay in making the entry. On appeal from that judgment, the Court of Appeals upheld its jurisdiction and denied a motion to dismiss, relying upon 28 U.S.C. § 1291 and Rule 54(b) of the Federal Rules of Civil Procedure, as amended in 1946.

Held: the appellate jurisdiction of the Court of Appeals is sustained, and its judgment denying the motion to dismiss the appeal for lack of appellate jurisdiction is affirmed. Pp. 428-438.

(a) Rule 54(b), as amended, does not relax the finality required of each decision, as an individual claim, to render it appealable, but does provide a practical means of permitting an appeal to be taken from one or more final decisions on individual claims, in multiple claims actions, without waiting for final decisions to be rendered on all the claims in the case. Pp. 434-435.

(b) The application of the amended rule is limited expressly to multiple claims actions in which "one or more but less than all" of the multiple claims have been finally decided and are found otherwise to be ready for appeal. P. 435.

(c) The amended rule requires that for "one or more but less than all" multiple claims to become appealable, the District Court must make both "an express determination that there is no just reason for delay" and "an express direction for the entry of judgment." Pp. 435-436.

(d) In this case, each of the claims dismissed was a "claim for relief" within the meaning of Rule 54(b), and the dismissal of each constituted a "final decision" on the individual claim. P. 436.

(e) The claims adjudged by the District Court could properly be decided independently of the claims which the court did not adjudge. P. 436.

(f) Amended Rule 54(b) does not constitute an unauthorized extension of 28 U.S.C. § 1291, since the District Court cannot, in

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the exercise of its discretion, treat as "final" that which is not "final" within the meaning of § 1291. Pp. 436-437.

(g) In the exercise of its discretion under amended Rule 54(b), the District Court may release for appeal final decisions upon one or more, but less than all, claims in multiple claims actions, and any abuse of that discretion is reviewable by the Court of Appeals. P. 437.

(h) Rule 54(b), as amended, does not supersede any statute controlling appellate jurisdiction, and it scrupulously recognizes the statutory requirement of a "final decision" under § 1291 as a basic requirement for an appeal to the Court of Appeals. P. 438.

(i) Rule 54(b), as amended, is valid in both its "affirmative" and "negative" aspects. The rule is not rendered invalid because, though its "affirmative" operation, a final decision may be released for appeal to the Court of Appeals at a time when, under prior law, it would not have been appealable. P. 438.

218 F.2d 295 affirmed.

BURTON, J., lead opinion

MR. JUSTICE BURTON delivered the opinion of the Court.

This action, presenting multiple claims for relief, was brought by Mackey and another in the United States District Court for the Northern District of Illinois, Eastern Division, in 1953. The court expressly directed that judgment be entered for the defendant, Sears, Roebuck & Co., on two, but less than all, of the claims presented. It also expressly determined that there was no just reason for delay in making the entry. After Mackey's notice of appeal from that judgment to the Court of Appeals for the Seventh Circuit, Sears, Roebuck & Co. moved to dismiss the appeal for lack of appellate jurisdiction. The Court of Appeals upheld its jurisdiction and denied the

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motion, relying upon 28 U.S.C. § 1291 and Rule 54(b) of the Federal Rules of Civil Procedure, as amended in 1946. Because of the importance of the issue in determining appellate jurisdiction and because of a conflict of judicial views on the subject,1 we granted certiorari. 348 U.S. 970. For the reasons hereafter stated, we sustain the Court of Appeals and its appellate jurisdiction.

Although we are here concerned with the present appealability of the judgment of the District Court, and not with its merits, we must examine the claims stated in the complaint so as to consider adequately the issue of appealability.

The complaint contains six counts. We disregard the fifth because it has been abandoned, and the sixth because it duplicates others. The claims stated in Counts I and II are material, and have been dismissed without leave to amend. The claim contained in Count III and that in amended Court IV are at issue on the answers filed by Sears, Roebuck & Co. The appeal before us is from a

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judgment striking out Counts I and II without disturbing Counts III and IV, and the question presented is whether such a judgment is presently appealable when the District Court, pursuant to amended Rule 54(b), has made "an express determination that there is no just reason for delay" and has given "an express direction for the entry of judgment."

In Count I, Mackey, a citizen of Illinois, and Time Saver Tools, Inc., and Illinois corporation owned by Mackey, are the original plaintiffs and the respondents here. Sears, Roebuck & Co., a New York corporation doing business in Illinois, [76 S.Ct. 897] is the original defendant and the petitioner here. Mackey charges Sears with conduct violating the Sherman Antitrust Act in a manner prejudicial to three of Mackey's commercial ventures causing him $190,000 damages, for which he seeks $570,000 as treble damages. His first charge is unlawful destruction by Sears, since 1949, of the market for nursery lamps manufactured by General Metalcraft Company, a corporation wholly owned by Mackey. Mackey claims that this caused him a loss of $150,000. His second charge is unlawful interference by Sears, in 1952, with Mackey's contract to sell, on commission, certain tools and other products of the Vascoloy-Ramet Corporation, causing Mackey to lose $15,000. His third charge is unlawful destruction by Sears, in 1952, of the market for a new type of carbide-tipped lathe bit and for other articles manufactured by Time Saver Tools, Inc., resulting in a loss to Mackey of $25,000. Mackey combines such charges with allegations that Sears has used its great size to monopolize commerce and restrain competition in these fields. He asks for damages and equitable relief.

In Count II, Mackey claims federal jurisdiction by virtue of diversity of citizenship. He incorporates the allegations of Count I as to the Metalcraft transactions, and asks for $250,000 damages for Sears' wilful destruction

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of the business of Metalcraft, plus $50,000 for Mackey's loss on obligations guaranteed by him.

In Count III, Mackey seeks $75,000 in a common law proceeding against Sears for unlawfully inducing a breach of his Vascoloy commission contract.

In Count IV, Time Saver seeks $200,000 in a common law proceeding against Sears for unlawfully destroying Time Saver's business by unfair competition and patent infringement.

The jurisdiction of the Court of Appeals to entertain Mackey's appeal from the District Court's judgment depends upon 28 U.S.C. § 1291, which provides that "The courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States. . . ." (Emphasis supplied.)

If Mackey's complaint had contained only Count I, there is no doubt that a judgment striking out that count and thus dismissing, in its entirety, the claim there stated would be both a final and an appealable decision within the meaning of § 1291. Similarly, if his complaint had contained Counts I, II, III and IV, there is no doubt that a judgment striking out all four would be a final and appealable decision under § 1291. The controversy before us arises solely because, in this multiple claims action, the District Court has dismissed the claims stated in Counts I and II, but has left unadjudicated those stated in Counts III and IV.2

Before the adoption of the Federal Rules of Civil Procedure in 1939, such a situation was generally regarded as leaving the appellate court without jurisdiction of an attempted appeal. It was thought that, although the judgment was a final decision on the respective claims in Counts I and II, it obviously was not a final decision of

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the whole case, and there was no authority for treating anything less than the whole case as a judicial unit for purposes of appeal.3 This construction of the judicial unit was developed from the common law, which had dealt with litigation generally [76 S.Ct. 898] less complicated than much of that of today.4

With the Federal Rules of Civil Procedure, there came an increased opportunity for the liberal joinder of claims in multiple claims actions. This, in turn, demonstrated a need for relaxing the restrictions upon what should be treated as a judicial unit...

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