Clark v. Kraftco Corporation

• Decision Date: 26 August 1971
• Docket Number: Docket No. 71-1526.
• Citation: 447 F.2d 933
• Parties: Peter F. CLARK, as President of Ice Cream Drivers and Employees Union Local 757, etc., et al., Plaintiffs-Appellants, v. KRAFTCO CORPORATION et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

447 F.2d 933 (1971)

Peter F. CLARK, as President of Ice Cream Drivers and Employees Union Local 757, etc., et al., Plaintiffs-Appellants, v. KRAFTCO CORPORATION et al., Defendants-Appellees.

Docket No. 71-1526.

United States Court of Appeals, Second Circuit.

Argued August 9, 1971.

Decided August 26, 1971.

Samuel J. Cohen, New York City (Cohen, Weiss & Simon, Stanley M. Berman, New York City, on the brief), for plaintiffs-appellants.

John F. Cannon, New York City (Sullivan & Cromwell, New York City, on the brief), for defendant-appellee Kraftco Corp.

Before FEINBERG, MULLIGAN and TIMBERS, Circuit Judges.

FEINBERG, Circuit Judge:

This is a motion by appellee Kraftco Corporation to dismiss the appeal of Ice Cream Drivers and Employees Union Local 757 and Milk Drivers and Dairy Employees Union Local 680¹ from an order of the United States District Court for the Southern District of New York, Harold R. Tyler, Jr., J., 323 F.Supp. 358, denying the Locals' motion for summary judgment in a breach of contract suit under section 301 of the Labor Management Relations Act, 29 U. S.C. § 185. For reasons explained below, we agree with Kraftco that Judge Tyler's order is not "final" under 28 U. S.C. § 1291 and, therefore, dismiss the appeal.

The background of this motion can be briefly stated. Kraftco and Locals 757 and 680 signed an agreement, dated April 25, 1968, respecting the planned closing of Kraftco's Breyer Ice Cream Plant in Newark, New Jersey. Among other things, the agreement provided that the actuarial consultant to the industry-wide pension fund would determine the impact, if any, of the closing of the Breyer plant and that, if the pension fund was found to be adversely affected, Kraftco would pay to the fund an amount determined by the consultant. About 18 months after the agreement was signed, the consultant determined that the liability of Kraftco to the pension fund was $978,100. After Kraftco refused to pay that amount, the Locals instituted this suit.

In the district court, the Locals moved for summary judgment on the grounds that the agreement made the findings of the consultant final and binding on Kraftco and, in the absence of fraud or misconduct, the court could not go behind those findings. The district court did not agree and, relying primarily on its finding that the parties did not intend to allow the actuarial consultant to resolve ambiguities in the contract, denied summary judgment. In addition, the court set aside the findings of the consultant, remanded the case to the consultant for redetermination, pursuant to N.Y.C.P.L.R. § 7601, of Kraftco's liability to the pension fund, and ordered that the consultant's report include findings as to certain specific matters. From this order, the Locals filed a notice of appeal.

The Locals recognize that generally an order denying summary judgment is not appealable. They point out, however, that the district court not only denied summary judgment but also vacated the consultant's determination, set aside and reformed the contract sued upon and sua sponte compelled arbitration. Essentially, the Locals present two theories supporting appealability. First, relying on Goodall-Sanford, Inc. v. United Textile Workers, 353 U.S. 550, 77 S.Ct. 920, 1 L.Ed.2d 1031 (1957), they argue that Judge Tyler's order is appealable because it compelled arbitration in a section 301 suit. Second, citing Gillespie v. United States Steel Corp., 379 U.S. 148, 85 S.Ct. 308, 13 L.Ed.2d 199 (1964), they contend that the order is appealable under a practical construction of finality. This is so, they contend, because the order denied them the only relief they sought, the recovery of the sum determined by the consultant, and because the expense and delay involved in the remand to the consultant outweighs the inconvenience and cost of a piecemeal review.

As to the first argument, the Locals assume that Judge Tyler's order can properly be regarded as though it were an order compelling arbitration.² This is by no means clear. The contract does not provide for arbitration and neither party requested it. Thus, Kraftco argues that Judge Tyler did not reform the contract sued upon and turn it into an agreement to arbitrate. Doubtless the situation before us is an unusual one, and Judge Tyler's order is a hybrid. While the Locals' characterization of the order is certainly not far-fetched, the order also resembles a district court reversal of findings of a referee with a remand to him for further findings, for which Kraftco cites Bass v. Olson, 327 F.2d 662 (9th Cir. 1964) and Hillcrest Lumber Co. v. Terminal Factors, Inc., 281 F.2d 323 (2d Cir. 1960). Such a reference to a master would not ordinarily be regarded as final. See 5 J. Moore, Federal Practice ¶¶ 53.053, 53.133 (2d ed. 1970); cf. 1966 Amendment to Fed.R.Civ.P. 53 (expanded the term "master" to include "assessor").

On the assumption that the order directs arbitration, it is true that such an order, while seemingly interlocutory, may be appealable in certain circumstances. But even on that assumption, the Locals have overstated the scope of the Goodall-Sanford decision. That case was an action under section 301 to compel specific performance of an arbitration provision in a collective bargaining agreement. In that context, the Supreme Court, reasoning that the arbitration was "not merely a step in judicial enforcement of a claim nor auxiliary to a main proceeding, but the full relief sought," held that a decree ordering a specific performance of the arbitration provision was final within the meaning of 28 U.S.C. § 1291. 353 U.S. at 551-52. As the language just quoted indicates, however, that decision does not change the rule of this circuit that an order compelling arbitration when made in the course of a continuing litigation rather than when handed down in an independent proceeding is not a final order. Chatham Shipping Co. v. Fertex S.S. Corp., 352 F.2d 291, 294 (2d Cir. 1965); Farr & Co. v. Cia. Intercontinental De Navegacion, 243 F.2d 342, 345 (2d Cir. 1957). See Rogers v. Schering Corp., 262 F.2d 180, 182 (3d Cir.), cert. denied sub nom., Hexagon Laboratories, Inc. v. Rogers, 359 U.S. 991, 79 S.Ct. 1121, 3 L.Ed. 980 (1959).³ As Judge Tyler has retained jurisdiction over this suit and further action by him on the merits is necessary, the order appealed from is one made in the course of a continuing litigation. Therefore, even on the questionable assumption that Judge Tyler's order is the same as the more usual order directing arbitration, we conclude that it is interlocutory rather than final.

Nor do we believe that the district court's order is final under the rule of Gillespie v. United States Steel Corp., supra. All that the Court decided in Gillespie was that a court of appeals has the power to review an order in a "marginal" case within the "`twilight zone' of finality" where the questions presented on appeal are "fundamental to the further conduct of the case" and "the inconvenience and costs of piecemeal review" are outweighed by "the danger of denying justice by delay." 379 U.S. at 152-154, 85 S.Ct. at 311-312. Difficult...