Spraytex, Inc. v. DJS&T

• Decision Date: 23 September 1996
• Docket Number: No. 96-1172,96-1172
• Citation: 40 USPQ2d 1145,96 F.3d 1377
• Parties: , 40 U.S.P.Q.2d 1145 SPRAYTEX, INC., Plaintiff-Appellee, v. DJS&T and Homax Corporation, Defendants-Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1377

96 F.3d 1377

35 Fed.R.Serv.3d 1116, 40 U.S.P.Q.2d 1145

SPRAYTEX, INC., Plaintiff-Appellee, v. DJS&T and Homax Corporation, Defendants-Appellants.

No. 96-1172.

United States Court of Appeals Federal Circuit.

Sept. 23, 1996.

Richard H. Zaitlen, Loeb & Loeb, LLP, Los Angeles, California, submitted the motion to dismiss appeal for lack of jurisdiction, for plaintiff-appellee. With him on the motion were David L. Lubitz and David Victor.

Paul L. Gardner, Christensen, O'Connor, Johnson & Kindness, PLLC, Seattle, Washington, submitted the appellants' response in opposition to appellee's motion to dismiss appeal for lack of jurisdiction for defendants-appellants.

Before RICH, LOURIE, and CLEVENGER, Circuit Judges.

ORDER

LOURIE, Circuit Judge.

Spraytex, Inc. moves to dismiss DJS&T and Homax Corporation's (Homax) appeal for lack of jurisdiction. Homax opposes.

BACKGROUND

In March 1995, Spraytex filed an action in the United States District Court for the Central District of California seeking a declaratory judgment of noninfringement of Homax's United States Patent 4,310,095 (the '095 patent). ¹ Homax counterclaimed for (1) a declaratory judgment that the Spraytex product was covered by the parties' license agreement, (2) a declaratory judgment that Spraytex was in default for failure to pay royalties and that Homax could terminate the license agreement, and (3) damages for Spraytex's violation of the license agreement.

In August 1995, Spraytex filed a second action, seeking a declaratory judgment of noninfringement, invalidity, and unenforceability of Homax's newly issued United States Patent 5,409,148 (the '148 patent). Homax counterclaimed for infringement of the '148 patent. Both patents are related to a spray texturing apparatus and method, and both actions involve the same Spraytex device. The application that led to the '148 patent was a continuation of the application for the '095 patent.

The district court consolidated the cases in November 1995. On December 5, 1995, the court granted Spraytex's motion for summary judgment of noninfringement of the '095 patent and stated that "judgment on all claims is entered in favor of Spraytex." The December 5 document contains only the case number for the suit concerning the '095 patent. Homax appealed. No certification of the order was provided pursuant to Fed.R.Civ.P. 54(b).

In its motion to dismiss, Spraytex argues that the December 5, 1995 order is not a final judgment because, inter alia, the order did not dispose of the action concerning the '148 patent. ²

DISCUSSION

This motion presents a question of first impression for this court, namely, whether a judgment that disposes of fewer than all actions consolidated by the district court into one case may be separately appealed. Because this is an issue concerning our jurisdiction, we apply our own law and not the law of the regional circuit. Woodard v. Sage Prods., Inc., 818 F.2d 841, 844, 2 USPQ2d 1649, 1651 (Fed.Cir.1987) (in banc); Sanders Assocs., Inc. v. Summagraphics Corp., 2 F.3d 394, 395, 27 USPQ2d 1853, 1854 (Fed.Cir.1993).

In a case arising in whole or in part under the patent statute, this court has jurisdiction "of an appeal from a final decision of a district court of the United States." 28 U.S.C. § 1295(a). In a case involving more than one claim, there is no final decision until a judgment is entered adjudicating all of the claims. 9 James W. Moore, Moore's Federal Practice p 110.08, p. 45 (1996). However, Fed.R.Civ.P. 54(b) provides:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all of the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

Thus, Rule 54(b) requires clear and unmistakable direction by the district court before appeal may be taken on less than all claims in a case. In doing so, the court must make an express statement of finality and indicate the lack of a just reason for delay. W.L. Gore & Assocs., Inc. v. International Medical Prosthetics Research Assocs., Inc., 975 F.2d 858, 24 USPQ2d 1195 (Fed.Cir.1992). We review de novo a district court's determination whether a judgment is final with respect to one or more claims, while the determination that there was no just reason for delay is reviewed under an abuse of discretion standard. Id. at 862, 24 USPQ2d at 1198; see also Houston Indus., Inc. v. United States, 78 F.3d 564, 567 (Fed.Cir.1996).

The present case involves two actions consolidated into one, rather than one action involving more than one claim. The fundamental question presented by this case is whether consolidation is to be viewed as merging the actions or whether the actions retain their separate identities for purposes of appellate review. If the actions merge into one for jurisdictional purposes, appeal will be proper, absent certification under Rule 54(b), only after disposition of all of the claims in the consolidated case. If the actions remain separate for jurisdictional purposes despite the consolidation, then appeal will be proper after the disposition of each portion of the consolidated case. Our sister circuits have answered this fundamental question in three different ways. ³ We briefly describe the other circuits' views on this jurisdictional question before stating our own view.

The Ninth and Tenth Circuits have ruled that there can be no appeal of a judgment concerning a portion of a consolidated action absent certification pursuant to Fed.R.Civ.P. 54(b). See Huene v. United States, 743 F.2d 703, 705 (9th Cir.1984); Trinity Broadcasting Corp. v. Eller, 827 F.2d 673, 675 (10th Cir.1987). Generally, those circuits have determined that the actions merge and are similar to a case with several claims or counterclaims. Thus, in those circuits, certification pursuant to Fed.R.Civ.P. 54(b) is required for separate appeals in consolidated actions.

In the First and Sixth Circuits, however, separate appeals are permitted of judgments disposing of fewer than all claims in a consolidated case. See Albert v. Maine Cent. R.R. Co., 898 F.2d 5, 6-7 (1st Cir.1990); Beil v. Lakewood Eng'g & Mfg. Co., 15 F.3d 546, 551 (6th Cir.1994). ⁴ In those circuits, the actions retain their separate identities despite consolidation and no Rule 54(b) certification is required to seek review of the disposition of an individual action.

Finally, it appears that the remaining circuits consider their jurisdiction on a case-by-case basis, often considering the extent of consolidation and permitting separate appeals in limited circumstances. See, e.g., Hageman v. City Investing Co., 851 F.2d 69, 71 (2d Cir.1988) (there is a strong presumption that a judgment on some but not all actions in a consolidated case is not appealable absent Rule 54(b) certification); Bergman v. City of Atlantic City, 860 F.2d 560, 566-67 (3d Cir.1988) (noting that the circuit follows a case-by-case approach and that, when actions are consolidated for all purposes of discovery and trial, a judgment in one but not all actions is not appealable absent Rule 54(b) certification); Eggers v. Clinchfield Coal Co., 11 F.3d 35, 39 (4th Cir.1993) (indicating that the circuit would follow a case-by-case approach in considering appealability of the disposition of fewer than all actions in a consolidated case); Ringwald v. Harris, 675 F.2d 768, 771 (5th Cir.1982) (following a case-by-case approach; if the consolidated cases could have been brought as one action, separate appeal is not permitted absent Rule 54(b) certification); Ivanov-McPhee v. Washington Nat'l Ins. Co., 719 F.2d 927, 930 (7th Cir.1983) (when there are no purposes for which the actions retained separate identities and the actions could have been brought as one action, separate appeal is not permissible absent Rule 54(b) certification); Tri-State Hotels, Inc. v. Federal Deposit Ins. Corp., 79 F.3d 707, 711 (8th Cir.1996) (when actions are not formally merged for all purposes but only for convenience, appeal in one action is not precluded because the other action is still pending in the district court); Lewis Charters, Inc. v. Huckins Yacht Corp., 871 F.2d 1046, 1048-49 (11th Cir.1989) (if the consolidation is for limited purposes and each action retains its separate identity, an appeal of one of two actions is permissible); Phillips v. Heine, 984 F.2d 489, 490 (D.C.Cir.1993) (absent Rule 54(b) certification, if the actions were consolidated for all purposes, the time for appealing an order disposing of only one action does not begin to run). It appears that the results of this case-by-case approach in most appeals have required Rule 54(b) certification unless the consolidation was for limited purposes.

As noted above, the basic issue before us is whether consolidation is viewed as merging the actions so that appeal of a decision concerning only one action, absent certification, is premature or whether the actions retain their separate identities for purposes of appellate review, in which case appeal of a decision concerning only one action is proper. In three previous cases, we have to some degree treated actions consolidated by the district court as one case, although we have not considered whether an uncertified appeal of a decision in one aspect of a consolidated case may be...