Melamed v. ITT Continental Baking Co.

• Decision Date: 27 April 1976
• Docket Number: No. 75-1970,75-1970
• Citation: 534 F.2d 82
• Parties: 1976-1 Trade Cases 60,852 Maynard B. MELAMED, Trustee in Bankruptcy for Laub Baking Company, for Sandusky Baking Company, and for Jersey Bread Company, Plaintiff-Appellee, v. ITT CONTINENTAL BAKING COMPANY, a corporation, and International Telephone and Telegraph Corporation, a corporation, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 82

534 F.2d 82

1976-1 Trade Cases 60,852

Maynard B. MELAMED, Trustee in Bankruptcy for Laub Baking Company, for Sandusky Baking Company, and for Jersey Bread Company, Plaintiff-Appellee, v. ITT CONTINENTAL BAKING COMPANY, a corporation, and International Telephone and Telegraph Corporation a corporation, Defendants-Appellants.

No. 75-1970.

United States Court of Appeals Sixth Circuit.

Argued Feb. 19, 1976.

Decided April 27, 1976.

Eric M. Oakley, Squire, Sanders & Dempsey, Cleveland, Ohio, John H. Schafer, Charles Lister, Johnathan M. Weisgall, Covington & Burling, Washington, D. C., Gordon A. Thomas, Craig D. Walley, ITT Continental Baking Co., Inc., Rye, N. Y., for defendants-appellants.

Robert S. Balantzow, Nadler, Sokolsky, Bahas & Balantzow, Cleveland, Ohio, Stanley A. Walton, Winston & Strawn, Chicago, Ill., for plaintiff-appellee.

Before PECK and MILLER, ^* Circuit Judges, and McALLISTER, Senior Circuit Judge.

PER CURIAM.

Defendants have appealed from an order of the district court, Northern District of Ohio, denying their motion to disqualify certain, but not all, of the attorneys representing plaintiff in this antitrust action.

In October, 1974, plaintiff, as trustee in bankruptcy for Laub Baking Company, Sandusky Baking Company and Jersey Bread Company (hereafter collectively referred to as "Laub"), initiated the present action in district court. The complaint, in four counts, alleges violations of the Sherman Act, 15 U.S.C. §§ 1, 2 (two counts), the Robinson-Patman Act, 15 U.S.C. §§ 13, 14, 15, 26 (one count), and the Ohio Valentine Act, Ohio Rev.Code § 1331.01 et seq. (one count as pendent claim to the federal causes of action). Generally, the plaintiff claims that, in an effort to create and maintain a monopoly in bakery goods in Northern Ohio and Southwestern Michigan, defendants (hereafter referred to collectively as "Continental") have engaged in "various predatory prices, discriminatory discounts, and price-wars." Further, plaintiff alleges that Continental "subsidized" its unprofitable marketing activity in the Northern Ohio and Southeastern Michigan region by utilizing financial resources drawn from its more profitable, monopolistic marketing operations in other regions of the United States. On account of the asserted monopolistic practices, plaintiff alleges that Laub was forced out of business in January, 1974.

On February 26, 1975, Continental filed a motion to disqualify the law firm of Winston & Strawn from further representation of plaintiff in the action. Subsequent to filing of the complaint in October, 1974, and prior to filing of the motion to disqualify in February, 1975, Continental filed an answer, filed and answered interrogatories, noticed a deposition, and permitted counsel for plaintiff to initiate an inspection of documents. Plaintiff filed interrogatories and requests for production of documents. On February 4, 1975, a protective order, which had been sought by Continental, was entered by agreement of the parties. The protective order provided that documents made available to plaintiff in response to plaintiff's initial request for documents were to be provided solely for purposes of the present action and were not to be used for any other purpose nor shown to persons not specified in the order.

On June 26, 1975, the district court denied Continental's motion to disqualify Winston & Strawn, concluding that "defendant has not made a sufficient showing of the necessity to disqualify Winston & Strawn as counsel for plaintiff" and that "plaintiff's right to counsel of his own choice should not be set aside without a demonstration of compelling reasons." Continental then filed a timely notice of appeal. Subsequently, plaintiff moved the district court to compel Continental's compliance with certain discovery demands. Continental then moved to deny plaintiff's motion or, alternatively, to stay all discovery pending appeal. On August 1, 1975, the district court denied all pending motions on the ground that it lacked jurisdiction. Plaintiff then moved this Court to dismiss the appeal for lack of jurisdiction or, in the alternative, either to order continuation of discovery pending appeal or to expedite the appeal. On November 5, 1975, this Court denied plaintiff's motion.

Initially, we are confronted with the issue of whether the district court's order denying Continental's motion for disqualification of Winston & Strawn is appealable at this stage of the proceedings as a final decision of the district court pursuant to 28 U.S.C. § 1291. While this precise issue has not previously been before this Court, other circuits considering the question have generally concluded that an order denying a motion for disqualification is appealable under 28 U.S.C. § 1291. Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (2d Cir. 1974) (en banc) (cases cited); see Kroungold v. Triester, 521 F.2d 763 (3d Cir. 1975); Fullmer v. Harper, 517 F.2d 20 (10th Cir. 1975); Yablonski v. United Mine Workers, 147 U.S.App.D.C. 193, 454 F.2d 1036 (1971) (dicta), cert. denied,406 U.S. 906, 92 S.Ct. 1609, 31 L.Ed.2d 816 (1972); Uniweld Products, Inc. v. Union Carbide Corp., 385 F.2d 992 (5th Cir. 1967), cert. denied, 390 U.S. 921, 88 S.Ct. 853, 19 L.Ed.2d 980 (1968). Contra, Cord v. Smith, 338 F.2d 516 (9th Cir. 1964).

In Cord, although an order denying a motion for disqualification was held not appealable under 28 U.S.C. § 1291, the court, treating the appeal from the order as a petition for a writ under the All Writs Act, 28 U.S.C. § 1651, stated at page 522:

Continued participation as an attorney, by one who is disqualified by a conflict of interest from so doing, will bring about the very evil which the rule against his participation is designed to prevent, and a subsequent reversal based upon such...