Marks v. San Francisco Real Estate Bd.

• Decision Date: 11 September 1980
• Docket Number: No. 77-2987,77-2987
• Citation: 627 F.2d 947
• Parties: 1980-2 Trade Cases 63,551 Stephen H. MARKS, Appellant, v. SAN FRANCISCO REAL ESTATE BOARD et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 947

627 F.2d 947

1980-2 Trade Cases 63,551

Stephen H. MARKS, Appellant, v. SAN FRANCISCO REAL ESTATE BOARD et al., Appellees.

No. 77-2987.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Nov. 15, 1979.

Decided Sept. 11, 1980.

Francis O. Scarpulla, San Francisco, Cal., for appellant.

Ronald D. Rattner, M. Laurence Popofsky, San Francisco, Cal., on brief; Moses Lasky, Lasky, Haas, Cohler & Munter, San Francisco, Cal., for appellees.

Appeal from the United States District Court for the Northern District of California.

Before SNEED and KENNEDY, Circuit Judges, and LARSON, ^* Senior District Judge.

LARSON, Senior District Judge.

I.

This is an antitrust action which alleges price-fixing of real estate commission rates in Marin County, California. The initial complaint was filed on February 24, 1971. The suit was certified as a class action on April 10, 1972. Plaintiff commenced discovery and began compiling a list of class members, which was completed on September 20, 1974, after considerable delay. On May 13, 1974, the defendants had moved for an order decertifying the class and dismissing the action for lack of prosecution. The district court, relying on this Court's decision in Kline v. Coldwell Banker & Co., 508 F.2d 226 (9th Cir. 1974), cert. denied, 421 U.S. 963, 95 S.Ct. 1950, 44 L.Ed.2d 449 (1975), decertified the class on February 24, 1975; but did not rule on the motion to dismiss. Marks v. San Francisco Real Estate Board, 69 F.R.D. 353 (N.D.Cal.1975).

Plaintiff subsequently undertook two appeals of the class decertification order. The first was pursuant to 28 U.S.C. § 1292(b), which this Court refused to accept because it believed the order was reviewable under 28 U.S.C. § 1291 as a final judgment under the "death knell" doctrine. Plaintiff's § 1291 appeal was heard and the case was remanded to the district court for an evidentiary hearing on whether the death knell had in fact sounded. Hooley v. Red Carpet Real Estate, 549 F.2d 643 (9th Cir. 1977). After plaintiff's petition for rehearing or rehearing en banc was denied on March 23, 1977, he decided not to petition the Supreme Court for certiorari. On July 12, 1977, plaintiff moved for a pretrial conference in the district court. During the period while the class decertification order was on appeal, the case had been assigned to a different trial judge. The pretrial conference was held on August 12, 1977, at which time this judge dismissed the action.

The proper measure for review of the dismissal is whether the court below abused its discretion. Link v. Wabash Railroad Co., 370 U.S. 626, 633, 82 S.Ct. 1386, 1390, 8 L.Ed.2d 734 (1962); Huey v. Teledyne, Inc., 608 F.2d 1234 (9th Cir. 1979); Citizens Utilities Co. v. American Tel. & Tel. Co., 595 F.2d 1171, 1174 (9th Cir. 1979); Anderson v. Air West Inc., 542 F.2d 522, 524 (9th Cir. 1976). In the August 16, 1977, written order embodying the judgment of dismissal the trial judge stated that it was based on failure to prosecute.

However, examination of the transcript of the August 12 pretrial conference reveals that a major reason for the dismissal was merely that the case had been pending too long. When defendants suggested that it was a stale and aged case, the judge agreed, remarking that:

"I think this is a stale case. I think it's a stale case. I am not going to set a pre-trial hearing. I am not going to consider reconsideration (of the class decertification) in the case and I think what I am going to do is dismiss the action with prejudice."

Later, he continued:

"There has been enough time in the case. * * * I am satisfied that you've had all the opportunity that a litigant ought to have."

This is not an acceptable reason for the involuntary dismissal of an action. Cherry v. Brown-Frazier-Whitney, 548 F.2d 965, 969 (D.C. Cir. 1976); 5 Moore's Federal Practice P 41.11(2) (2d ed. 1979).

Defendants contend that the necessary failure to prosecute is present, particularly in the delay in preparing the class list. Even if this claim were true, an earlier lack of diligence is not grounds for dismissal when the plaintiff is currently displaying diligence. Cristanelli v. United States Lines, 74 F.R.D. 590, 593 (C.D.Cal.1977). However, the record shows that plaintiff has been assiduous in his prosecution of this action. He has compiled a list of some 13,000 transactions which provides the names of the class members. In the course of discovery to compile this list, he was hindered by at least one instance of intentional document destruction by the defendants. Plaintiff unflaggingly pursued his appeal of the class decertification order. He requested the pretrial conference, a demonstration that he was ready and eager to proceed to trial. In fact, plaintiff claims to have been prepared for trial since late 1974.

The trial judge also seemed to feel that plaintiff had to go ahead and attempt to make a "death knell" showing and that he could not now choose to proceed to trial on the individual claim. It is apparent that plaintiff was trapped in the prevailing confusion over the requirements for a death knell appeal. To obtain review of the class certification order it was necessary for plaintiff to claim that neither he nor any other member of the class could continue the action individually. Now that Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), has eliminated death knell appeals, plaintiff must be willing to proceed to trial, albeit reluctantly, on his individual claim in order to obtain eventual review of the decertification order. This plaintiff was and is prepared for such a trial.

In the circumstances of this case, dismissal was an abuse of discretion. The judgment below is reversed and the action remanded for further proceedings.

II.

Judges SNEED and KENNEDY concur in part I of this opinion. Part II represents my views alone.

I believe that the class decertification order can and should be reviewed now. A dismissal with prejudice is a final judgment. An appeal from a dismissal gives the Court of Appeals power to review all interlocutory orders in the case. Sackett v. Beaman, 399 F.2d 884, 889 (9th Cir. 1968); Grabner v. Willys Motors, Inc., 282 F.2d 644, 646 (9th Cir. 1960). When the dismissal is found to be improper, however, there is no longer a final judgment supporting review of the interlocutory orders. See Blake v. City of Los Angeles, 595 F.2d 1367, 1386 (9th Cir. 1979). This paradoxical situation does not necessarily deprive the Court of the power to review a particular interlocutory order. Review in this context would not always evade the final judgment rule nor would it contravene the policies behind the rule.

For several years courts have struggled to establish principles governing appeals of class certifications and decertifications. Recently, in Coopers & Lybrand v. Livesay, supra, the Supreme Court placed narrow limits on review of these orders. See Eluska v. Andrus, 587 F.2d 996, 1000 (9th Cir. 1978); Loya v. Immigration & Naturalization Service, 583 F.2d 1110, 1112 (9th Cir. 1978). The rationales enunciated in these decisions are the usual policies against piecemeal review. Courts are rightly concerned about the delay, harassment, and waste of judicial time which could result if every interlocutory order could be appealed. See Cobbledick v. United States, 309 U.S. 323, 325, 60 S.Ct. 540, 541, 84 L.Ed. 783 (1940); Blake v. City of Los Angeles, supra; Blackie v. Barrack, 524 F.2d 891, 895 (9th Cir. 1975), cert. denied, 429 U.S. 816, 97 S.Ct. 57, 50 L.Ed.2d 75 (1976).

There are competing considerations. Forcing the parties to proceed on the basis of an erroneous trial court order can result in needless cost and misspent judicial energy. See Gillespie v. United States Steel Corp., 379 U.S. 148, 152-53, 85 S.Ct. 308, 310-11, 13 L.Ed.2d 199 (1964); Curlott v. Campbell, 598 F.2d 1175, 1179 (9th Cir. 1979) (Sneed, J.) (courts should avoid "enthroning technicality," thereby "usurp(ing) the claims of justice"); Wescott v. Impresas Armadoras, S. A. Panama, 564 F.2d 875, 880-81 (9th Cir. 1977); 9 Moore's Federal Practice P 110.07 (2d ed. 1975); Id. at P 110.12 ("once an appeal has been taken in good faith, and the attendant expense of time, money and manpower has been suffered, a court of appeals is not powerless to prevent further useless expenditure.")

A doctrine of pendant appellate review has developed which to some extent harmonizes these opposing policies. Under this doctrine, if a court properly undertakes review of an interlocutory order, it may review other orders in the case, even though those orders alone would not be appealable. See Marcera v. Chinlund, 595 F.2d 1231, 1236 n. 8 (2d Cir.), vacated and remanded on other grnds., 442 U.S. 915, 99 S.Ct. 2833, 61 L.Ed.2d 281 (1979); Merrill-National Lab., Inc. v. Zenith Lab., Inc., 579 F.2d 786, 791 (3d Cir. 1978); Yamamoto v. Omiya, 564 F.2d 1319, 1325 n. 11 (9th Cir. 1977); Genosick v. Richmond Unified School Dist., 479 F.2d 482 (9th Cir. 1973). The reasons for the doctrine can be extended to this situation. There is no question that the dismissal is appealable. Judicial efficiency would clearly be aided by review of the class decertification order now. Otherwise, the parties will be forced to go through trial on the individual claim and then, regardless of the outcome, bear the cost of another appeal, and possibly additional trial time on class issues. This Court need not be apprehensive about interfering with the trial judge's discretion to change a class status order. There appears to be no chance that the class will be re-certified now.

This case is distinguishable from Huey v. Teledyne, supra. In that case the dismissal was found to be proper and there was a strong suggestion that plaintiffs had sought dismissal to circumvent the policy against piecemeal appeals and obtain review of the order denying class certification. See also Sullivan v. Pacific...