Glidden v. Chromalloy American Corp., 86-1867

Citation808 F.2d 621
Decision Date23 December 1986
Docket NumberNo. 86-1867,86-1867
Parties, 8 Employee Benefits Ca 1114 Robert L. GLIDDEN, Plaintiff-Appellant, v. CHROMALLOY AMERICAN CORPORATION and Allied Products Corporation, Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Richard N. Molchan, Heyl, Royster, Voelker & Allen, Peoria, Ill., for plaintiff-appellant.

Raymond J. Kelly, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for defendants-appellees.

Before POSNER, COFFEY and EASTERBROOK, Circuit Judges.

EASTERBROOK, Circuit Judge.

Chromalloy American Corporation provided medical benefits to the employees of its Kewanee Machinery Division. The benefits were funded by a trust and awarded under the terms of a detailed plan, an "employee welfare benefit plan" for purposes of the Employee Retirement Income Security Act, 29 U.S.C. Sec. 1002(1)(A). Retired employees of the Division were entitled to benefits under the plan. In 1983 Chromalloy sold the assets of the Division to Allied Products Corporation. Allied decided not to make new contributions to the trust and terminated the plan. It used the funds in the trust at the time of the acquisition to continue benefits for another few months. Robert L. Glidden, who had retired from Chromalloy as the chief executive officer of the Division, brought this suit as a class action on behalf of "more than 120" retired employees of the Division, contending that employees who retire while a welfare benefit plan is in effect acquire vested benefits that may not later be terminated.

Glidden asked the district court to certify a class of "All retired salaried employees receiving pension benefits with Chromalloy American Corporation and Allied Products Corporation at the business located in Kewanee, Illinois." Glidden's counsel treated the action as one under Fed.R.Civ.P. 23(b)(3), because he attached a notice that would have allowed members to opt out. The defendants did not oppose the motion to certify the class, but neither did they endorse it. Both sides filed motions for summary judgment. While the motion to certify the class was pending, the district court granted the defendants' motion for summary judgment. The court stated:

Robert Glidden has sought to represent a class of corporate retirees and Defendants have raised no objection to his attempt to mount a class action. The Court, however, inadvertently neglected to enter the order certifying the class. The parties have agreed that there is no need to enter the order now, preferring to await the outcome of the appeal of the ruling on summary judgment. Accordingly, the Court will withhold entry of the certification order pending such appeal.

In other words, the failure to act on the motion to certify a class, "inadvertent" for a time, became advertent when the district court deliberately withheld decision and entered summary judgment. Recognizing that he had not acted on the motion, the judge--at the parties' request--tried to carve the case into pieces: the merits, to be decided (and appealed) first, followed by a decision on the certification of a class. This is inconsistent with Fed.R.Civ.P. 23(c)(1), which requires the decision on certification to be made "[a]s soon as practicable after the commencement of an action brought as a class action". See Watkins v. Blinzinger, 789 F.2d 474, 475 n. 3 (7th Cir.1986). The court's deferral also means that the "final decision" for purposes of 28 U.S.C. Sec. 1291 lies in the future. We must dismiss the appeal for want of jurisdiction.

The case is not over in the district court. The court has not identified the parties to be bound by the judgment, one of the elementary requirements of finality. The opinion granting summary judgment explicitly contemplates further proceedings to ascertain who shall be bound. The "judgment" entered after the issuance of the opinion states only: "Defendants' motion for summary judgment is GRANTED and Plaintiff's cross-motion for summary judgment is DENIED." A document of this sort is not a final judgment. See United States v. F.M. Schaefer Brewing Co., 356 U.S. 227, 232-35, 78 S.Ct. 674, 677-79, 2 L.Ed.2d 721 (1958). We are confronted with the possibility of two appeals: one on the merits, followed by a second appeal if either party should be dissatisfied with any aspect of the certification of the class (or the refusal to certify a class). A final decision is one wrapping up the case and leaving nothing but execution, see Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 105 S.Ct. 2757, 2760-61, 86 L.Ed.2d 340 (1985); this "judgment" does not meet that test.

The grant of summary judgment cannot be appealed immediately as a "collateral order"; it is the merits, and the disposition of the merits cannot be "collateral" to itself. Cf. Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), holding that a decision on class certification is not collateral to a decision on the merits, and that both certification and merits should be resolved in a single appeal at the end of the case. The district court did not authorize an interlocutory appeal under 28 U.S.C. Sec. 1292(b), and given Rule 23(c)(1) we would not have accepted such an appeal. The disposition of Glidden's claim ahead of the class certification is more like a partial final judgment under Fed.R.Civ.P. 54(b). That Rule authorizes entry of final judgment on one party's claim in a multi-party action. Glidden's case is done with, even if the status of the other retirees is uncertain, so perhaps on analogy to Rule 54(b) we have jurisdiction of Glidden's appeal.

The difficulty is that a partial final judgment under Rule 54(b) must contain "an express determination that there is no just reason for delay.... In the absence of such determination ..., any order or other form of decision, however designated, which adjudicates fewer than all 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". The judgment filed in the district court does not contain the necessary determination and therefore is not final with respect to Glidden. The operation of the Rule is mechanical. If the judgment contains the finding, then the party must appeal at once or not at all. Exchange National Bank v. Daniels, 763 F.2d 286, 290-92 (7th Cir.1985). If the judgment does not contain the declaration, the party must wait. Huckeby v. Frozen Food Express, 555 F.2d 542, 545-50 (5th Cir.1977); Baker v. Limber, 647 F.2d 912, 916 (9th Cir.1981). The clarity of the rule would be destroyed by a principle that the judgment is appealable when the district court's opinion, as opposed to the judgment, shows that the court contemplated the prospect of an immediate appeal. The parties and the courts need objective and easily available criteria to guide their decisions. The "intent" of the district judge is accordingly irrelevant. Diamond v. McKenzie, 770 F.2d 225, 229-30 (D.C.Cir.1985). To the extent Ellender v. Schweiker, 781 F.2d 314 (2d Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 315, 93 L.Ed.2d 289 (1986), makes appellate jurisdiction turn on the district judge's purpose rather than on the formal contents of the judgment, it is inconsistent with Diamond, Exchange National Bank, and United States v. Indrelunas, 411 U.S. 216, 93 S.Ct. 1562, 36 L.Ed.2d 202 (1973), and we do not follow it.

Moreover, the district judge must have a good reason to make the finding that allows an immediate appeal. United States General, Inc. v. Albert, 792 F.2d 678 (7th Cir.1986); Compact v. Metropolitan Government of Nashville, 786 F.2d 227, 230-31 (6th Cir.1986). A Rule 54(b) judgment multiplies the number of appeals in a single case, and it therefore should be used only in an exceptional situation. Exchange National Bank, 763 F.2d at 291. There was no good reason to authorize an appeal of the merits in advance of a resolution of the motion for class certification. Rule 23(c)(1) directs district judges to decide the question of certification first.

Perhaps we should treat the case as if the district judge had certified the class, so that nothing remains on remand and the judgment is final. The judge's opinion does not suggest that he viewed the motion for certification as a difficult one. Still, jurisdictional issues do not turn on what could or should have been done; they turn on what was done. What was done is that the judge, having noticed that the class was uncertified, deliberately withheld a decision on the pending motion. The disposition of the motion is not a foregone conclusion, either. A class of 120 retirees of the same employer is not necessarily "so numerous that joinder of all members is impracticable". Rule 23(a)(1); see also Andrews v. Bechtel Power Corp., 780 F.2d 124, 130-31 (1st Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 2896, 90 L.Ed.2d 983 (1986) (49 is not so numerous that class must be certified). And Glidden may not be the best representative of the class. One of the claims in the case is that retirees cannot protect their own interests, so that it is unjust to allow the employer to discontinue the plan after any person has retired. Glidden was the CEO of the Division and personally signed the benefit plan's documents on behalf of the firm. Glidden was in a wonderful position to learn whether the plan covered retirees and negotiate for additional contractual provisions that would protect retirees. He therefore has the weakest claim of any member of the class. Questions about the propriety of certifying a class may have led the district judge to reserve decision, which precludes the treatment of the case as if the class had been certified.

The last way to salvage jurisdiction in this case is the one the parties urged in response to our request for supplemental briefs on the jurisdictional problem. They suggest that Glidden's notice of appeal be treated as an...

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