Cotler v. Inter-County Orthopaedic Ass'n, PA, No. 75-1451

CourtU.S. Court of Appeals — Third Circuit
Citation526 F.2d 537
Docket Number75-1873.,No. 75-1451
PartiesJerome M. COTLER, Appellant, v. INTER-COUNTY ORTHOPAEDIC ASSOCIATION, P. A., et al. Jerome M. COTLER, Petitioner, v. INTER-COUNTY ORTHOPAEDIC ASSOCIATION, P. A., et al., Respondents, Honorable Mitchell H. Cohen, Nominal Respondent.
Decision Date01 December 1975

526 F.2d 537

Jerome M. COTLER, Appellant,
v.
INTER-COUNTY ORTHOPAEDIC ASSOCIATION, P. A., et al.
Jerome M. COTLER, Petitioner,
v.
INTER-COUNTY ORTHOPAEDIC ASSOCIATION, P. A., et al., Respondents,
Honorable Mitchell H. Cohen, Nominal Respondent.

Nos. 75-1451, 75-1873.

United States Court of Appeals, Third Circuit.

Argued October 30, 1975.

Decided December 1, 1975.


526 F.2d 538

Samuel J. Serata, Serata & Stanger, Bridgeton, N. J., for respondent Mahaveer P. Prabhaker.

Gerald M. Eisenstat, Shapiro, Eisenstat, Capizola, O'Neill, Lisitski & Gabage, Vineland, N. J., for respondents Basil Ingemi and Barbara Ingemi.

526 F.2d 539

Neil F. Deighan, Jr., Kisselman, Deighan, Montano & Summers, Camden, N. J., for respondents Warren C. Lummis, Steven Z. Kleiner, Jay R. Moore and Michael Brook Fisher, Ind. and T/A Lummis, Kleiner, Moore & Fisher.

Fred Lowenschuss Associates, Fred Lowenschuss, Philadelphia, Pa., for appellant; James J. Seeley, Camden, N. J., Gerald M. Eisenstat, Vineland, N. J., of counsel and on the brief.

Keron D. Chance, Bridgeton, N. J., for appellant The Farmers and Merchants National Bank of Bridgeton, New Jersey; Fred Lowenschuss, William D. Parry, Philadelphia, Pa., of counsel.

Before GIBBONS, Circuit Judge, MARKEY,* Chief Judge, Court of Customs and Patent Appeals, and WEIS, Circuit Judge.

OPINION OF THE COURT

GIBBONS, Circuit Judge.

By appeal in No. 75-1451 and by a petition for mandamus in No. 75-1873 Dr. Jerome M. Cotler, the plaintiff below, seeks relief from two orders of the district court. The first order granted defendants' motion to stay federal proceedings so long as actions pending in the Superior Court of New Jersey, Chancery Division, Cumberland County, Docket Number C-4204-73 and Camden County, Docket Number C-4268-73, are outstanding and undecided. The second order directed that the clerk of the district court "administratively terminate the action in his records, without prejudice to the right of the parties to reopen the proceedings for good cause shown for the entry of any stipulation or order, or for any other purpose required to obtain a final determination of the litigation." We conclude that the court's actions, which have the effect in this case of depriving the plaintiff of a federal forum for a cause of action over which the jurisdiction of the federal courts is exclusive, were beyond the lawful power of the district court and are remediable by mandamus.

I. BACKGROUND

The underlying dispute, which now involves three lawsuits all of which are at a standstill, grows out of the affairs of the Inter-County Orthopaedic Association, P.A. (Inter-County), a New Jersey professional corporation. Dr. Cotler, Dr. Basil Ingemi and Dr. Mahaveer Prabhaker practiced their specialty in that form. In March of 1973 Cotler advised Ingemi and Prabhaker that he intended to withdraw from the practice. Negotiations among the doctors to determine a buyout price failed. Acting on instructions from Ingemi, the attorney for Inter-County on July 29, 1974 filed in the Superior Court of New Jersey, Chancery Division, Cumberland County, a complaint naming the three doctors as defendants, seeking a declaratory judgment of the rights of the parties and other relief. The main thrust of the other relief was to compel Cotler to resign as an officer and director and to obtain from him an accounting for professional fees allegedly due Inter-County but received by him. Shortly thereafter Cotler commenced a shareholders' derivative action in the Superior Court, Chancery Division, Camden County against Inter-County, Prabhaker, Ingemi and several other defendants seeking damages, injunctive relief restraining the defendants from wasting corporate assets, an accounting, the cancellation of stock issued to Prabhaker under questionable circumstances, and the removal of the corporate counsel who had instituted the declaratory judgment action. By an order dated August 23, 1974 the Cumberland County action was consolidated with the Camden County action and venue assigned to Cumberland County. The affidavits suggest that Cotler's attorney, justifiably or not, is unhappy with the Cumberland County venue.

On August 22, 1974, Cotler filed in the United States district court a complaint

526 F.2d 540
charging Inter-County, Ingemi, Prabhaker and several other defendants with violations of § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j, and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, and with several pendent state law causes of action. Although Cotler's allegations in the state and federal suits are not identical, it is fair to say that the pendent claims largely duplicate those in the state court proceedings. The parties are not identical, however, and at least one alleged cause of action, against The Farmers & Merchants National Bank of Bridgeton, New Jersey, is not involved in the state court proceedings. Moreover, the state court lacks jurisdiction to entertain the § 10(b) claim. 15 U.S.C. § 78aa. Thus the orders of which Cotler complains stay the determination of a cause of action over which the district court has exclusive jurisdiction, and closely related causes of action over which it has pendent jurisdiction, in favor of a state court proceeding in which the parties are not identical

II. APPEALABILITY

(A) Final Judgment

Cotler contends that staying the federal action and administratively terminating it pending the trial of the state court claims has the effect of a final order, 28 U.S.C. § 1291, or of the denial of an injunction, 28 U.S.C. § 1292(a)(1).

This court's treatment of the appealability under § 1291 of stay orders has not been unwavering. In Arny v. Philadelphia Transportation Co., 266 F.2d 869, 870 (3d Cir. 1959) we held that a stay of federal court proceedings pending the decision of state court litigation between the parties representing the same interests was not a final order...

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28 practice notes
  • Moses Cone Memorial Hospital v. Mercury Construction Corporation, No. 81-1203
    • United States
    • United States Supreme Court
    • February 23, 1983
    ...proceedings. Calvert Fire Insurance Co. v. Will, 560 F.2d 792, 794 (CA7 1977), citing Cotler v. Inter-County Orthopaedic Assn., 526 F.2d 537, 540 (CA3 1975). Cf. Drexler v. Southwest Dubois School Corp., 504 F.2d 836, 838 (CA7 1974) (en banc) (stay of litigation pending exhaustion of state ......
  • Brace v. O'Neill, No. 76-2207
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • November 10, 1977
    ...a general rule this circuit has held that a stay order is not final and hence is not appealable. Cotler v. Inter-County Orthopaedic Ass'n, 526 F.2d 537, 540 (3d Cir. Page 249 1975); Stateside Machinery Co., Ltd. v. Alperin, 526 F.2d 480 (3d Cir. 1975); Arny v. Philadelphia Transp. Co., 266 ......
  • New Jersey Ed. Ass'n v. Burke, No. 77-1828
    • United States
    • U.S. Court of Appeals — Third Circuit
    • May 3, 1978
    ...217 U.S. 268, 30 S.Ct. 501, 54 L.Ed. 762 (1910), which we have recently cited as controlling, Cotler v. Inter-County Orthopedic Assn., 526 F.2d 537 (3d Cir. 1975), would seem to dispose of the contention that established canons of comity bar declaratory judgment in the action before us. In ......
  • Will v. Calvert Fire Insurance Company, No. 77-693
    • United States
    • United States Supreme Court
    • June 23, 1978
    ...from ruling de novo on purely legal questions surrounding such federal claims. See Cotler v. Inter- Page 675 County Orthopaedic Assn., 526 F.2d 537 (CA3 1975); McGough v. First Arlington National Bank, 519 F.2d 552 (CA7 1975); Clark v. Watchie, 513 F.2d 994 (CA9 1975). As recognized by Judg......
  • Request a trial to view additional results
28 cases
  • Moses Cone Memorial Hospital v. Mercury Construction Corporation, No. 81-1203
    • United States
    • United States Supreme Court
    • February 23, 1983
    ...proceedings. Calvert Fire Insurance Co. v. Will, 560 F.2d 792, 794 (CA7 1977), citing Cotler v. Inter-County Orthopaedic Assn., 526 F.2d 537, 540 (CA3 1975). Cf. Drexler v. Southwest Dubois School Corp., 504 F.2d 836, 838 (CA7 1974) (en banc) (stay of litigation pending exhaustion of state ......
  • Brace v. O'Neill, No. 76-2207
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • November 10, 1977
    ...a general rule this circuit has held that a stay order is not final and hence is not appealable. Cotler v. Inter-County Orthopaedic Ass'n, 526 F.2d 537, 540 (3d Cir. Page 249 1975); Stateside Machinery Co., Ltd. v. Alperin, 526 F.2d 480 (3d Cir. 1975); Arny v. Philadelphia Transp. Co., 266 ......
  • New Jersey Ed. Ass'n v. Burke, No. 77-1828
    • United States
    • U.S. Court of Appeals — Third Circuit
    • May 3, 1978
    ...217 U.S. 268, 30 S.Ct. 501, 54 L.Ed. 762 (1910), which we have recently cited as controlling, Cotler v. Inter-County Orthopedic Assn., 526 F.2d 537 (3d Cir. 1975), would seem to dispose of the contention that established canons of comity bar declaratory judgment in the action before us. In ......
  • Will v. Calvert Fire Insurance Company, No. 77-693
    • United States
    • United States Supreme Court
    • June 23, 1978
    ...from ruling de novo on purely legal questions surrounding such federal claims. See Cotler v. Inter- Page 675 County Orthopaedic Assn., 526 F.2d 537 (CA3 1975); McGough v. First Arlington National Bank, 519 F.2d 552 (CA7 1975); Clark v. Watchie, 513 F.2d 994 (CA9 1975). As recognized by Judg......
  • Request a trial to view additional results

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