Chappell & Co. v. Frankel

Decision Date13 October 1966
Docket NumberNo. 296,Docket 29781.,296
Citation367 F.2d 197
PartiesCHAPPELL & CO., Inc., T. B. Harms Company, Williamson Music, Inc., Frank Loesser and Frank Music Corp., Plaintiffs-Appellants, v. J. Jay FRANKEL, Defendant-Appellee.
CourtU.S. Court of Appeals — Second Circuit

Julian T. Abeles, New York City, for plaintiffs-appellants (Robert C. Osterberg, New York City, on the brief).

Martin J. Machat, Alan Kahn, David I. Barrett, New York City, for defendant-appellee.

Before LUMBARD, Chief Judge, and WATERMAN, MOORE, FRIENDLY, SMITH, KAUFMAN, HAYS, ANDERSON and FEINBERG, Circuit Judges.

Submitted to Court in Banc September 28, 1966.

WATERMAN, Circuit Judge:

Appellants commenced this action in the United States District Court for the Southern District of New York on June 10, 1964, alleging that the manufacture and sale of certain phonograph records by two corporations, which appellee controlled,1 infringed copyrights owned by appellants, in violation of federal copyright law. 17 U.S.C. § 1 et seq.2 The complaint sought a temporary and a permanent injunction pursuant to Sections 101(a) and 112 of the Copyright Act, a royalty computed as provided in Sections 101(e) and 1(e), an order directing the appellee to deliver up for destruction all infringing phonograph records and all means for producing them as authorized by Section 101(d), and for other relief. In his answer, appellee alleged as his defense that the corporations he controlled had been licensed to manufacture and sell the phonograph records containing the compositions subject to appellants' copyrights which are alleged to have been infringed.3 Appellants took the position that it was incontrovertible that the defendant's corporations had not been so licensed. Therefore, prior to trial, pursuant to federal rule 56, Fed.R.Civ.P. 56, appellants moved on affidavits and counter affidavits for "an interlocutory summary judgment * * on the issue of liability," and for the appointment of a special master to compute the royalties and damages due them, "* * * reserving for the Court upon the conclusion of such hearings the question of such other relief to which each of plaintiffs shall be entitled * * *." The court below denied the motion for summary judgment on the ground that there was a genuine issue whether the appellee had been issued licenses for the musical compositions in question or whether, in any event, the appellants were at least estopped to deny appellee's right to sell and distribute phonograph records containing musical compositions copyrighted by appellants.

An appeal from the denial of this motion was heard by a panel consisting of Judges Waterman, Moore and Feinberg, who were unanimously of the belief that the order below was not a final appealable order, and that this court had no appellate jurisdiction to entertain the appeal. It had been stated in Peter Pan Fabrics, Inc. v. Dixon Textile Corp., 280 F.2d 800 at 802 (2 Cir. 1960) that it had been settled in this circuit that orders denying summary judgment motions encompassing prayers for permanent injunctions were appealable under 28 U.S.C. § 1292(1). Therefore, panel judges requested a vote as to whether the full court of nine judges should consider the case in banc. In banc consideration was agreed to unanimously and thereupon it was also unanimously agreed by the affirmative vote of all nine judges, for the reasons hereinafter set forth, that the appeal should be dismissed.

At the outset it is completely clear that an order refusing to grant a motion for summary judgment is not a "final decision" within Section 1291 of the Judicial Code, 28 U.S.C. § 1291, and we thus have no appellate jurisdiction to review the lower court's order under that section. Doehler Metal Furniture Co. v. United States, 149 F.2d 130, 135 (2 Cir. 1945); see Valdosta Livestock Co. v. Williams, 316 F.2d 188 (4 Cir. 1963). What is more, the lower court's denial of appellants' motion for summary judgment was directly concerned with the merits of appellants' substantive claim for relief and thus cannot be brought within the judicially created exception to the final decision rule, which permits appeal from "collateral" orders where irreparable harm is threatened in the absence of immediate review. See, e. g., United States v. Wood, 295 F.2d 772 (5 Cir. 1961), cert. denied, 369 U.S. 850, 82 S.Ct. 933, 8 L.Ed.2d 9 (1962). See, generally, Note, Appealability in the Federal Courts, 75 Harv.L.Rev. 351, 364-67 (1961). It is almost equally clear that we ought not review a lower court's denial of a summary judgment motion by means of a prerogative writ, which we can on occasion issue pursuant to the All Writs Statute. 28 U.S.C. § 1651(a). We have only recently received a scholarly reminder that the prerogative writs are of "limited scope." A. Olinick & Sons v. Dempster Bros., Inc., 365 F.2d 439 (2 Cir. August 8, 1966) (Friendly, J., concurring). Traditionally, the prerogative writs have been reserved for extraordinary circumstances. In re Josephson, 218 F.2d 174 (1 Cir. 1954). And a garden variety denial of a summary judgment motion on the ground that there is a genuine issue as to a material fact can hardly satisfy this "extraordinary circumstances" test. Cf. Bigart v. Goodyear Tire & Rubber Co., 361 F.2d 317 (2 Cir. 1966). Of course, in some cases we can review interlocutory denials of summary judgment motions under the Interlocutory Appeals Act of 1958 which grants the courts of appeals discretion to review any interlocutory order in a civil case if the trial judge decides that the issue he ruled upon involves a controlling question of law as to which there is a substantial ground for difference of opinion and that an immediate appeal from the interlocutory order may materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b). Here, however, the Interlocutory Appeals Act is inapplicable because the trial judge has not certified that he is of the opinion that his order should be reviewed immediately under the provisions of that Act.4 Thus, it would appear we have jurisdiction to review the trial court's denial of appellants' motion for summary judgment if, but only if,5 this jurisdiction is granted by Section 1292(a) (1) of the Judicial Code, 28 U.S.C. § 1292(a) (1), which grants the courts of appeals jurisdiction to hear appeals from interlocutory orders "granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions * *."

The rule in this circuit has been that we have jurisdiction in a case like the present under Section 1292(a) (1), on the theory that a trial court's order denying a plaintiff's motion for summary judgment and for permanent injunctive relief was an order "refusing" an injunction.6 Peter Pan Fabrics, Inc. v. Dixon Textile Corp., 280 F.2d 800, 802 (2 Cir. 1960); United States v. New York, N.H. & H.R.R., 276 F.2d 525, 545 (2 Cir.) cert. denied, 362 U.S. 961, 964, 80 S.Ct. 877, 4 L.Ed.2d 876 (1960); Federal Glass Co. v. Loshin, 217 F.2d 936 (2 Cir. 1954); Raylite Elec. Corp. v. Noma Elec. Corp., 170 F.2d 914 (2 Cir. 1948). We hold that the denial of appellants' motion for summary judgment is not appealable under Section 1292(a) (1), and as our result here is inconsistent with the result reached in the above cases we are reversing the rule set forth therein which until now has settled the matter in this circuit in favor of appealability, Peter Pan Fabrics, Inc. v. Dixon Textile Corp., 280 F.2d 800 at 802.

We recognize that though we are privileged in accord with the genius of the common law to decide cases on a case-by-case basis it "does not relieve us of the judicial obligation to pay proper heed to precedent: the question still is `not what we would hold if we now took a fresh look but whether we should take that fresh look,' Mississippi River Fuel Corp. v. United States, 314 F.2d 953, 958, 161 Ct.Cl. 237 (1963) (concurring opinion of Davis, J.)." Crown Coat Front Co., Inc. v. United States, 363 F.2d 407 (2 Cir. June 22, 1966) (Friendly, J., concurring). On the other hand the doctrine of stare decisis has never been thought to limit a court's power to "take a fresh look" in appropriate instances, see Helvering v. Hallock, 309 U.S. 106, 60 S.Ct. 444, 84 L.Ed. 604 (1940), and several factors have persuaded us that it is now appropriate for all the active judges of the court sitting in banc to take that "fresh look" at our judge-made rule permitting an order denying a plaintiff's motion for summary judgment and permanent injunctive relief to be appealed under Section 1292(a) (1). First, the rule of our circuit has commanded no following in other federal courts of appeals7 and has been much criticized by the commentators.8 This unfavorable reaction to our earlier decisions has led us to the "* * * strong * * * view that the challenged precedent is probably wrong * * *." Mississippi River Fuel Corp. v. United States, 314 F.2d 953, 958, 161 Ct.Cl. 237 (1963) (Davis, J., concurring). Second, the present case is proof enough that our earlier decisions tend to encourage interlocutory appeals, thereby both delaying an ultimate resolution of the case and unnecessarily consuming judicial resources at the trial and appellate levels.9 Third, and most important, the enactment of the Interlocutory Appeals Act of 1958 would seem to be the sort of "intervening development in the law, * * *" ibid., that frequently justifies a court's reconsideration of its prior rulings, for that Act, which allows interlocutory appeals in those cases in which the argument for interlocutory appeal is most persuasive removes much of the initial justification for our earlier decisions.10

Persuaded by these developments and by further reasons to be considered hereafter we are of the belief that our court should align itself with the majority view, first expressed by the Third Circuit in Morgenstern...

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