Great Rivers Coop. of Iowa v. Farmland Indus.

• Decision Date: 10 May 1998
• Docket Number: No. 98-2527,98-2528,CROSS-APPELLEES,CROSS-APPELLANTS,98-2527
• Parties: (8th Cir. 1999) GREAT RIVERS COOPERATIVE OF SOUTHEASTERN IOWA; SAWYER COOPERATIVE EQUITY EXCHANGE; AND ROGER TACEY, PLAINTIFFS/APPELLANTS/, v. FARMLAND INDUSTRIES, INC.; HARRY CLEBERG; H. WAYNE RICE; AND ALBERT SHIVELY DEFENDANTS/APPELLEES/ NATIONAL COUNCIL OF FARMER COOPERATIVES AMICUS CURIAE Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 685

198 F.3d 685 (8th Cir. 1999)

GREAT RIVERS COOPERATIVE OF SOUTHEASTERN IOWA; SAWYER COOPERATIVE EQUITY EXCHANGE; AND ROGER TACEY, PLAINTIFFS/APPELLANTS/CROSS-APPELLEES, v. FARMLAND INDUSTRIES, INC.; HARRY CLEBERG; H. WAYNE RICE; AND ALBERT SHIVELY DEFENDANTS/APPELLEES/ CROSS-APPELLANTS.

NATIONAL COUNCIL OF FARMER COOPERATIVES AMICUS CURIAE

No. 98-2527, 98-2528

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: May 10, 1998

December 16, 1999

Appeal from the United States District Court for the Southern District of Iowa

[Copyrighted Material Omitted] Before Loken and Morris Sheppard Arnold, Circuit Judges, and Waters,¹ District Judge.

Waters, District Judge.

In this class action, Great Rivers Cooperative of Southeastern Iowa, an Iowa farm cooperative, Sawyer Cooperative Equity Exchange, a Kansas farm cooperative, and Roger Tacey, a Nebraska resident and hog producer,² both individually and on behalf of the class, appeal the district court's³ partial summary judgment orders rejecting their securities claims, their unjust enrichment claim, and a portion of their breach of fiduciary duty claims. Farmland Industries, Inc., a Kansas farm cooperative, Harry Cleberg, the Chief Executive Officer (CEO), President, and a director of Farmland, H. Wayne Rice, a former director of Farmland Foods (Foods) a subsidiary of Farmland, and Albert Shively, a director on, and the chair of, the Farmland's board of directors,⁴ appeal from the district court's order certifying the class. Because we affirm the district court's summary judgment rulings, we find it unnecessary to reach the issues raised by the cross-appeal.

I. A Jurisdictional Issue

We have jurisdiction over final orders and certain types of interlocutory orders. See 28 U.S.C. §§ 1291, 1292. In general, a pretrial order dismissing less than all of a plaintiff's claims is interlocutory and cannot be appealed unless it includes the grant or denial of an injunction, see § 1292(a)(1); or the district court has certified a controlling issue of law under 28 U.S.C. § 1292(b); or the court has directed entry of a partial final judgment with the determination required by Rule 54(b) of the Federal Rules of Civil Procedure; or the interlocutory order is appeasable under the narrow, judicially created "collateral order" doctrine.

In this case, after certifying a class, the district court ordered partial summary judgment dismissing the class's claims under Rule 10b-5 and § 12(2) of the federal securities laws, and nearly all of its breach of fiduciary duty and unjust enrichment claims under state law. The court left unresolved the class' federal law claims under RICO, § 14(e) of the Securities Exchange Act of 1934, and the Agricultural Fair Practices Act of 1967, plus state law claims against defendant Rice arising out of one transaction. Though the two summary judgment orders were interlocutory, at the class' request the district court both directed the entry of judgment pursuant to a Rule 54(b) determination there was no just reason for delay, and certified its rulings as controlling issues of law under 28 U.S.C. § 1292(b). The class then appealed, but we declined to exercise our discretion to permit a § 1292(b) appeal, rejected the district court's Rule 54(b) determination, and dismissed the appeals for lack of a final order. See Great Rivers Coop. of S.E. Iowa v. Farmland Ind., Inc., No. 97-8119 (8th Cir. June 25, 1997), and Nos. 97-2904 & 97-2906 (8th Cir. Aug. 21, 1997).

Returning to the district court, the class moved for dismissal of its remaining claims without prejudice under Rule 41(a)(2), explaining that its purpose was to "remove this obstacle" to immediate appellate review of the prior dismissal of its other claims. A notice, approved by the court, was sent to the class advising that the motion to dismiss had been filed "to facilitate appellate review" of the prior dismissals, and that the claims to be voluntarily dismissed could be reinstated if the appeal was successful. After giving the class an opportunity to comment, the district court granted the dismissal motion over Farmland's objection. The Clerk filed a separate judgment document. See Fed. R. Civ. P. 58. That document concluded, "Based on the foregoing and the prior rulings of the court, Plaintiffs' fourth amended complaint now stands DISMISSED in its entirety." The class then commenced these appeals.

Farmland argues we lack appellate jurisdiction because "plaintiffs cannot manufacture appellate jurisdiction over interlocutory orders . . . simply by dismissing temporarily" their remaining claims without prejudice. Our prior dismissals established that the district court's partial summary judgment rulings were non-appealable until the case had proceeded to final judgment. Thus, there can be little doubt that basing this appeal on a disingenuous voluntary dismissal was contrary to the strong policy that parties must "raise all claims of error in a single appeal following final judgment on the merits." Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374, 101 S. Ct. 669, 66 L. Ed. 2d 571 (1981). A plaintiff whose strongest claims have been dismissed in an interlocutory order may expedite appeal by dismissing its remaining claims with prejudice. But a dismissal without prejudice, coupled with the intent to refile the voluntarily dismissed claims after an appeal of the interlocutory order, is a clear evasion of the judicial and statutory limits on appellate jurisdiction.

Some district courts, frustrated by appellate court resistance to Rule 54(b) determinations and § 1292(b) certifications, have been willing to assist efforts to create apparent but illusory final orders. See, e.g., Horwitz v. Alloy Automotive Co., 957 F.2d 1431, 1432-33 (7th Cir. 1992). But the circuit courts are understandably and uniformly hostile to these tactics. Many circuits have dismissed such appeals for lack of jurisdiction, concluding that, in the absence of a Rule 54(b) determination, a voluntary dismissal without prejudice is not a final judgment because the dismissed claims can be later revived. See Chappelle v. Beacon Commun. Corp., 84 F.3d 652, 654 (2d Cir. 1996); Mesa v. United States, 61 F.3d 20, 21 (11th Cir. 1995); Cook v. Rocky Mountain Bank Note Co., 974 F.2d 147, 148 (10th Cir. 1992); Cheng v. Commissioner 878 F.2d 306, 309-11 (9th Cir. 1989); Ryan v. Occidental Pet. Corp., 577 F.2d 298, 303 (5th Cir. 1978). Farmland urges us to follow those decisions and dismiss these appeals. Our problem is that these decisions ignore the well-established test for determining whether a district court judgment that seemingly ends the case is an appealable "final decision" within the meaning of 28 U.S.C. § 1291.

A dismissal without prejudice can be an appealable final order. See United States v. Wallace & Tiernan Co., 336 U.S. 793, 794 n.1, 69 S. Ct. 824, 93 L. Ed. 1042 (1949); United States v. National City Lines, Inc., 334 U.S. 573, 577, 68 S. Ct. 1169, 92 L. Ed. 1584 (1948). "To be a final order or judgment, there must be 'some clear and unequivocal manifestation by the trial court of its belief that the decision made, so far as [the court] is concerned, is the end of the case.'" Goodwin v. United States, 67 F.3d 149, 151 (8th Cir. 1995), quoting Fiataruolo v. United States, 8 F.3d 930, 937 (2d Cir. 1993). Here, we have the requisite "clear and unequivocal manifestation" -- a final judgment of the district court dismissing the class's complaint "in its entirety." That is a final decision, and while we have no more desire to permit "manufactured interlocutory appeals" than our sister circuits, we find no authority in § 1291 to decide that some "final decisions" are appealable but others are not. Thus, in our view, the question whether parties will be permitted to "manufacture" appeals in this fashion is not jurisdictional, as we observed without discussing the issue in Chrysler Motors Corp. v. Thomas Auto Co., 939 F.2d 538, 540 (8th Cir. 1991).

Concluding that we have appellate jurisdiction does not leave us defenseless against this kind of accelerated interlocutory appeal. In Chrysler, the parties jointly stipulated to the dismissal without prejudice under Fed. R. Civ. P. 41(a)(1)(ii), a form of dismissal that is an "unconditional right" of the parties "which contains no exceptions that call for the exercise of judicial discretion by any court." See Gardiner v. A.H. Robins Co., Inc., 747 F.2d 1180, 1190 (8th Cir. 1984). Here, on the other hand, the class moved to dismiss its remaining claims without prejudice under Rule 41(a)(2). "It is axiomatic that a dismissal pursuant to Rule 41(a)(2) is not one of right but is rather a matter for the discretion of the trial court." United States v. Gunc, 435 F.2d 465, 467 (8th Cir. 1970). Thus, what Farmland presents as a jurisdictional issue is in fact the question whether the district court abused its discretion when it dismissed the remaining claims without prejudice for the purpose of allowing the class to appeal the court's interlocutory summary judgment orders. See, e.g., Hamm v. Rhone-Poulenc Rorer Pharm., Inc., 187 F.3d 941, 951 (8th Cir. 1999) (affirming discretionary denial of Rule 41(a)(2) voluntary dismissal).⁵

This Rule 41(a)(2) issue arises in a number of different contexts that may call for different responses. For example, in rejecting the jurisdictional challenge in Missouri ex rel. Nixon v. Coeur D'Alene Tribe, 164 F.3d 1102, 1106 (8th Cir.), cert. denied, 119 S. Ct. 2400 (1999), we noted that a dismissal without prejudice of additional defendants does not do the same violence to the policy against piecemeal appeals as a dismissal without prejudice of remaining claims against the same defendants. In most cases, however, a district court does abuse its discretion when it frustrates the limitations on federal appellate jurisdiction by entering a Rule 41(a)(2) order dismissing remaining claims without prejudice for the purpose of...