Harriscom Svenska AB v. Harris Corp.

• Decision Date: 18 October 1991
• Docket Number: D,No. 23,23
• Citation: 947 F.2d 627
• Parties: HARRISCOM SVENSKA AB, Plaintiff-Appellant, v. HARRIS CORPORATION, Defendant-Appellee. ocket 91-7291.
• Court: U.S. Court of Appeals — Second Circuit

Page 627

947 F.2d 627

20 Fed.R.Serv.3d 1308

HARRISCOM SVENSKA AB, Plaintiff-Appellant, v. HARRIS CORPORATION, Defendant-Appellee.

No. 23, Docket 91-7291.

United States Court of Appeals, Second Circuit.

Argued Sept. 11, 1991.

Decided Oct. 18, 1991.

Mark D. Shuman, Boston, Mass., for plaintiff-appellant.

Allen B. Green (Richard A. Feinstein, Alison L. Doyle, Lori L. Jackson, McKenna & Cuneo, on the brief), Washington, D.C., for defendant-appellee.

Before KEARSE, MINER, and McLAUGHLIN, Circuit Judges.

KEARSE, Circuit Judge:

This is an appeal by plaintiff Harriscom Svenska AB ("Harriscom") from so much of a judgment of the United States District Court for the Western District of New York, Michael A. Telesca, Chief Judge, as granted in part a motion by defendant Harris Corporation ("Harris") for partial summary judgment and dismissed several counts of Harriscom's complaint. The district court ordered that a final judgment be entered pursuant to Fed.R.Civ.P. 54(b) dismissing

                counts I, IV, VII, and XIII of the complaint.   Because we conclude that the court's Rule 54(b) certification was insufficient and that even a sufficient certification would have been an abuse of discretion, we dismiss the appeal for lack of jurisdiction
                

I. BACKGROUND

Harris is a New York corporation in the business of manufacturing and distributing radio communications equipment, selling both within the United States and internationally through representatives. Harriscom, a Swedish corporation, began in 1983 to sell Harris products in Iran. Beginning in 1985, Harris failed to fill certain Harriscom orders for ultimate delivery to customers in Iran. Harriscom brought the present action against Harris for damages allegedly resulting from that failure. Harriscom's 16-count complaint asserted six breach-of-contract claims and 10 claims sounding in fraud or negligence, and claimed damages totaling more than $3,325,000.

Harris, invoking a force majeure clause in the parties' contract, interposed a defense of impossibility or commercial impracticability (the "force majeure defense"), alleging that an informal but enforced policy of the United States government prevented Harris from supplying Harriscom with the requested radio equipment for delivery to Iran. Harris also asserted a counterclaim alleging that Harriscom had breached a contractual obligation to purchase certain inventory reserved for Harriscom.

In December 1988, the court granted a motion by Harris to dismiss 10 counts of the complaint alleging negligence or fraud. The remaining six counts of the complaint, asserting contract claims, sought $1,500,000 in lost profits resulting from Harris's failure to fill orders submitted by Harriscom (count I); $1,250,000 as profits lost on additional orders that Harriscom's Iranian customers allegedly "were about to place" but did not because of Harris's failure to fill Harriscom's orders (count IV); $350,000 in damages resulting from Harriscom's forfeiture of performance bond guarantees (counts VII and XVI); $150,000 as the return of a deposit paid by Harriscom to reserve certain equipment that Harris failed to deliver (count X); and $75,000 in damages for incidental expenses incurred as a result of Harris's breach (count XIII).

Following a period of discovery, Harris moved for partial summary judgment dismissing Harriscom's contract claims on the ground of its force majeure defense. In a Decision and Order dated December 11, 1990 ("December 1990 Decision"), the district court granted Harris's motion in its entirety, finding that, "[a]ccording to the uncontroverted evidence, [Harris's] performance of its agreements with Harriscom Svenska was prevented by the Government's prohibition on the shipment of Harris equipment into Iran." Id. at 5. The court concluded that "[t]his prohibition, although effected by informal Government means ... both rendered the contract commercially impracticable pursuant to N.Y.U.C.C. § 2-615(a) and triggered the force majeure clause to which the parties had agreed." December 1990 Decision at 5-6. Thus, for either of these two reasons, Harris's performance was "excused as a matter of law." Id. at 6.

In an Order dated February 21, 1991 ("February 1991 Order"), the court amended its December 1990 Decision to reinstate count X of Harriscom's complaint, stating that that count had not been "disposed of substantively" by the December 1990 Decision. February 1991 Order at 1-2. The court also ordered that a final judgment be entered dismissing four other contract claims, stating

that entry of final judgment as to Counts I, IV, VII, and XIII, which were dismissed by the December 11, 1990 Decision and Order, is appropriate because no just reason for delay exists; and that a stay of this action, pending resolution of the appeal from this entry of judgment pursuant to Fed.R.Civ.P. 54(b), is appropriate.

February 1991 Order at 2. Accordingly, Harris's counterclaim and count X of the complaint remain pending in the district court. Count XVI of the complaint, which Harriscom has appealed from the judgment entered pursuant to the February 1991 Order, contending principally that summary judgment dismissing counts I, IV, VII, and XIII was improper because there are genuine issues of fact as to whether Harris's failure to fill Harriscom's orders was voluntary or was instead rendered impossible or impracticable by government interference, and whether Harris acted in good faith. For the reasons below, we conclude that the district court's Rule 54(b) certification was insufficient and improvident, and that we are therefore without jurisdiction to consider the present appeal.

                apparently had been dismissed in the December 1990 Decision, was not included in the Rule 54(b) certification.   Since the court did not order the entry of final judgment as to Count XVI or as to the fraud and negligence claims dismissed in 1988, the dismissal of those 11 claims remains interlocutory
                

II. DISCUSSION

Rule 54(b) provides an exception to the general principle that a final judgment is proper only after all claims have been adjudicated. It empowers the district court to enter a final judgment on fewer than all of the claims in an action, but "only upon an express determination that there is no just reason for delay." Fed.R.Civ.P. 54(b). Respect for the " 'historic federal policy against piecemeal appeals,' " Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 8, 100 S.Ct. 1460, 1465, 64 L.Ed.2d 1 (1980) (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 438, 76 S.Ct. 895, 901, 100 L.Ed. 1297 (1956)), requires that the court's power to enter such a final judgment before the entire case is concluded, thereby permitting an aggrieved party to take an immediate appeal, be exercised sparingly. See Curtiss-Wright Corp. v. General Electric Co., 446 U.S. at 8, 100 S.Ct. at 1465 ("Not all final judgments on individual claims should be immediately appealable, even if they are in some sense separable from the remaining unresolved claims.").

A certification under Rule 54(b) should be granted only if there are "interest[s] of sound judicial administration" and efficiency to be served, Curtiss-Wright Corp. v. General Electric Co., 446 U.S. at 8, 100 S.Ct. at 1465, or, in the "infrequent harsh case," Ansam Associates, Inc. v. Cola Petroleum, Ltd., 760 F.2d 442, 445 (2d Cir.1985), where "there exists 'some danger of hardship or injustice through delay which would be alleviated by immediate appeal,' " Cullen v. Margiotta, 618 F.2d 226, 228 (2d Cir.1980) (per curiam) (quoting Brunswick Corp. v. Sheridan, 582 F.2d 175, 183 (2d Cir.1978)). In general, a Rule 54(b) certification of the dismissal of fewer than all the claims in an action should not be granted " 'if the same or closely related issues remain to be litigated.' " National Bank of Washington v. Dolgov, 853 F.2d 57, 58 (2d Cir.1988) (per curiam) (quoting Cullen v. Margiotta, 811 F.2d 698, 710 (2d Cir.), cert. denied, 483 U.S. 1021, 107 S.Ct. 3266, 97 L.Ed.2d 764 (1987)); see Cullen v. Margiotta, 811 F.2d at 711 ("In a case involving multiple claims, the court should not enter final judgment dismissing a given claim unless that claim is separable from the claims that survive.").

Within this framework, the determination of whether to grant Rule 54(b) certification is committed to the discretion of the district court and will be set aside only for an abuse of discretion. Curtiss-Wright Corp. v. General Electric Co., 446 U.S. at 8-10, 100 S.Ct. at 1464-1466 (to justify reversal, district court's determination must be "clearly unreasonable"); Sears, Roebuck & Co. v. Mackey, 351 U.S. at 437, 76 S.Ct. at 900; Cullen v. Margiotta, 811 F.2d at 711. In order to be sure that the district court has exercised its discretion within...