Piper Aircraft Distribution System Antitrust Litigation, In re

• Decision Date: 15 March 1977
• Docket Number: VAN-S-AVIATION,No. 76-1360,76-1360
• Citation: 551 F.2d 213
• Parties: 1977-1 Trade Cases 61,323 In re PIPER AIRCRAFT DISTRIBUTION SYSTEM ANTITRUST LITIGATION.CORPORATION, Appellant, v. PIPER AIRCRAFT CORPORATION et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 213

551 F.2d 213

1977-1 Trade Cases 61,323

In re PIPER AIRCRAFT DISTRIBUTION SYSTEM ANTITRUST LITIGATION.

VAN-S-AVIATION CORPORATION, Appellant, v. PIPER AIRCRAFT CORPORATION et al., Appellees.

No. 76-1360.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 15, 1976.

Decided March 15, 1977.

Edward A. McConwell, Overland Park, Kan., for appellant; Roger C. Bern, Kansas City, Mo., on brief.

John T. Martin, Kansas City, Mo., for appellee Piper Aircraft Corp.; David R. Hardy, Harry P. Thomson, Jr., R. Lawrence Ward, Thomas J. Wheatley and Stephen W. Jacobson, Kansas City, Mo., on brief.

Harry P. Thomson, Jr., Kansas City, Mo., for appellee, Gregory Aviation Co.

Before BRIGHT and WEBSTER, Circuit Judges, and SMITH, Senior District Judge. ^*

WEBSTER, Circuit Judge.

Van-S-Aviation appeals from a multidistrict order of the District Court ¹ dismissing its class action allegations in six antitrust actions on grounds of collateral estoppel. Appellees resist the appeal, contending that it was untimely filed and that the District Court's order was interlocutory and not appealable. We reject these contentions and reverse the order of the District Court.

Appellant is a former dealer in aircraft manufactured by Piper Aircraft corporation. Appellees are Piper and several of its distributors. In its original complaint filed November 16, 1973, in the Western District of Missouri, appellant alleged that appellees had combined and conspired in restraint of trade by means of Piper's dual pricing and distribution system in violation of section 1 of the Sherman Act, 15 U.S.C. § 1; that Piper had discriminated in prices of goods of like grade and quality sold to the defendant distributors in violation of Section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a); and that certain distributors violated Section 2(f) of the Robinson-Patman Act by knowingly receiving such price benefits. 15 U.S.C. § 13(f).

Appellant in its complaint sought to represent a class of present and former dealers of Piper in the United States who were required to purchase aircraft under Piper's distribution system through appellee distributors and, as alleged by appellant, were likewise victimized by the acts of appellee in unlawful restraint of trade. ² The District Court ³ established a discovery schedule leading to a hearing to determine whether appellant was entitled to proceed with the case as a class action. See Fed.R.Civ.P. 23(c). Discovery commenced, and document inspection and other discovery took place in Iowa, Indiana and Pennsylvania. On January 28, 1976, appellees filed a motion to dismiss the class action allegations, contending that this issue had been resolved against appellant in a companion case in the Southern District of Florida and that appellant was barred from asserting it in this action on grounds of collateral estoppel. Similar motions had been filed in five other pending suits, which were thereupon transferred to the Western District of Missouri for consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407. ⁴ Following a hearing, the District Court granted all motions to dismiss class action allegations in all pending cases, holding that the class action issue had been conclusively determined against appellant in a companion case in the Southern District of Florida, ⁵ which had thereafter been dismissed by appellant without prejudice. ⁶ Van-S-Aviation appeals from that order.

I Appealability

We first consider the contention of appellees that the order of the District Court denying class action status was not an appealable order. ⁷ Appellant invokes our jurisdiction under 28 U.S.C. § 1291, relying on the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). To be appealable on this basis, an order must meet these tests:

(1) the order must be a final determination of a claim of right "separable from, and collateral to," rights asserted in the action; (2) it must be "too important to be denied review," in the sense that it "presents a serious and unsettled question"; and (3) its review cannot, in the nature of the question that it presents, await final judgment because "when that time comes, it will be too late effectively to review the . . . order and rights conferred . . . will have been lost, probably irreparably."

9 J. Moore, Federal Practice P 110.10, at 133 (2d ed. 1975) (footnote omitted); see In Re Cessna Distributorship Antitrust Litigation, 532 F.2d 64, 67 (8th Cir. 1976); United States v. Barket, 530 F.2d 181, 185-86 (8th Cir. 1975), cert. denied, 429 U.S. 917, 97 S.Ct. 308, 50 L.Ed.2d 282 (1976); Roach v. Churchman, 457 F.2d 1101, 1104 (8th Cir. 1972).

Parties seeking interlocutory review of class action determinations have frequently invoked the collateral order doctrine. Their attempts at obtaining review in this way have been generally unsuccessful. The reason for this is clear: a typical Rule 23 order refusing to certify a class, by its nature, fails to meet the tests set out by the Supreme Court in Cohen.

First, such an order cannot usually be characterized as "final." Rather, it is the common practice to leave a class action order subject to redetermination as the litigation progresses. See, e. g., Gerstle v. Continental Airlines, Inc., 466 F.2d 1374, 1377 (10th Cir. 1972); In Re Cessna Aircraft Distributorship Antitrust Litigation, 518 F.2d 213, 215 (8th Cir.), cert. denied, 423 U.S. 947, 96 S.Ct. 363, 46 L.Ed.2d 282 (1975) (order granting class status). See also Fed.R.Civ.P. 23(c). Second, examining the propriety of a class determination often requires an examination of the substance of the main action, so that the order appealed is not separable from the merits. See, e. g., Share v. Air Properties G. Inc., 538 F.2d 279, 284 (9th Cir. 1976). Third, because denial of class status is discretionary and usually turns on the facts peculiar to a given case, it seldom presents a question of general significance. But cf. In Re Cessna Distributorship Antitrust Litigation, supra, 532 F.2d at 67 (questions of exceptional importance to the parties may suffice). Discretionary orders generally are not suitable for treatment under the collateral order doctrine. See General Motors Corp. v. City of New York, 501 F.2d 639, 647 (2d Cir. 1974), citing Cohen v. Beneficial Industrial Loan Corp., supra, 337 U.S. at 547, 69 S.Ct. 1221. Finally, a class action determination does not usually evade review, because it can normally be effectively examined on appeal from final judgment. Williams v. Mumford, 167 U.S.App.D.C. 125, 511 F.2d 363, 366, cert. denied, 423 U.S. 828, 96 S.Ct. 47, 46 L.Ed.2d 46 (1975); Samuel v. University of Pittsburgh, 506 F.2d 355, 360 (3d Cir. 1974).

Thus, nearly every court which has considered the question has found that a discretionary order refusing to certify a class is not in itself appealable. ⁸ See City of New York v. International Pipe & Ceramics Corp., 410 F.2d 295, 299 (2d Cir. 1969); Samuel v. University of Pittsburgh, supra; Gosa v. Securities Investment Co., 449 F.2d 1330 (5th Cir. 1971); King v. Kansas City Southern Industries, Inc., 479 F.2d 1259 (7th Cir. 1973); Share v. Air Properties G. Inc., supra; Gerstle v. Continental Airlines, Inc., supra. See also In Re Cessna Aircraft Distributorship Litigation, 518 F.2d 213 (8th Cir.), cert. denied, 423 U.S. 947, 96 S.Ct. 363 46 L.Ed.2d 282 (1975); Walsh v. City of Detroit, 412 F.2d 226 (6th Cir. 1969) (order granting class status is not appealable).

This case, however, differs from those cited in an important respect. Here the denial of class status was based not on the District Court's exercise of its Rule 23 discretion, but on its determination that the result in the Florida proceeding barred it from even considering the granting of class status. Because of this different circumstance, the reasons which lead to a finding of nonappealability in the typical case are absent here.

In contrast to the usual case, the District Court's order here is plainly final; it precludes any future consideration by that court of the class action question. The order can be reviewed by us without examining the merits of the action; the only question presented, whether the Florida decision should be given collateral estoppel effect, is independent of the merits. Moreover, the basis for the District Court's order, collateral estoppel, presents an important question in the area of multi-district class action litigation. Finally, the danger of delay to the litigation if this appeal is not heard is serious enough that the class action issue, if not decided now, will "evade review." ⁹

This appeal is in many respects similar to the second appeal in the Cessna antitrust litigation, which involved a class action defendant's claimed right to crossclaim against its codefendant. In Re Cessna Distributorship Antitrust Litigation, supra. Here, as there, we are faced with the claimed denial of an important right separable from the merits which, if not heard now, will evade review. As in that case, "we think it appropriate under the facts presented to treat the order as appealable under the collateral order doctrine." Id., 532 F.2d at 66.

II Collateral Estoppel

The District Court relied entirely upon Judge Mehrtens' order denying class action status in the Florida case. The District Court said:

In the instant motion to dismiss the class action allegations of the plaintiff, the defendants point out that Van-S is requesting the exact same class which it requested and was denied in the Florida action. Defendants claim that the class action issue was fully litigated and conclusively determined in the Florida action. They further claim that Van-S is now estopped from relitigating that issue. For the reasons stated infra, I agree with the defendants and therefore grant their motion to dismiss the class action allegations of the plaintiff.

For the reasons stated above, I have decided...