Metex Corp. v. ACS Industries, Inc.

• Decision Date: 14 November 1984
• Docket Number: No. 84-5159,84-5159
• Citation: 748 F.2d 150
• Parties: METEX CORPORATION, a Delaware corporation, Appellant, v. ACS INDUSTRIES, INC., a Rhode Island corporation, George Botvin, and the United States Department of Justice, Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 150

748 F.2d 150

40 Fed.R.Serv.2d 445

METEX CORPORATION, a Delaware corporation, Appellant, v. ACS INDUSTRIES, INC., a Rhode Island corporation, George Botvin, and the United States Department of Justice, Appellees.

No. 84-5159.

United States Court of Appeals Third Circuit.

Argued Sept. 14, 1984.

Decided Nov. 14, 1984.

Edward A. Zunz, Jr. (argued), Joan E. Goldstein, Riker, Danzig, Scherer & Hyland, Morristown, N.J., for appellant.

John M. Calimafde, Dennis J. Mondolino (argued), Hopgood, Calimafde, Kalil, Blaustein & Judlowe, New York City, Bruce I. Goldstein, Saiber, Schlesinger, Satz & Goldstein, Newark, N.J., for appellees ACS Industries and George Botvin.

W. Hunt Dumont, U.S. Atty., Newark, N.J., Richard K. Willard, Acting Asst. Atty. Gen., Leonard Schaitman, Marleigh D. Dover (argued), Dept. of Justice, Civil Div., Washington, D.C., for appellee U.S. Dept. of Justice.

Before SEITZ and BECKER, Circuit Judges, and TEITELBAUM, District Judge. ^*

OPINION OF THE COURT

BECKER, Circuit Judge.

This case presents the question whether we have appellate jurisdiction over an order of the district court denying motions for summary judgment and for a "mandatory injunction," where the effect of the order was to deprive a plaintiff in an unfair competition suit of access under the Freedom of Information Act ("FOIA"), 5 U.S.C. Sec. 552 (1982), to certain materials developed by the Federal Bureau of Investigation in the course of a criminal investigation into the acts that formed the basis for the suit. The appeal presents a number of interesting questions concerning the character of the FOIA statute and the rules of interlocutory appealability. For the reasons that follow, we dismiss the appeal for lack of appellate jurisdiction.

I.

Appellant Metex Corporation brought suit in the District Court for the District of New Jersey against ACS Industries, its competitor in the knit wire mesh industry, and George Botvin, the controlling shareholder and principal officer of ACS, alleging that Botvin had attempted to misappropriate confidential trade information from Victor Parrill, a consultant to and former employee of Metex, by offering him a bribe. As part of an investigation of possible criminal behavior, the FBI, with the consent and cooperation of Parrill, taped a series of telephone calls and also taped a meeting during which a deal to sell information was allegedly made. Before bringing suit in this case, Metex requested the disclosure of these tapes and attendant records ¹ from the FBI's parent agency, the United States Department of Justice ("DOJ"), under FOIA. ² DOJ denied Metex's request on the ground that the materials were exempt from release because they were investigatory records compiled for law enforcement purposes. See 5 U.S.C. Sec. 552(b)(7)(C) (1982). Alternatively, DOJ asserted that the Privacy Act, 5 U.S.C. Sec. 552a (1982), precluded release of the materials without the consent of Botvin and Parrill. ³ After exhausting its administrative appeals and in lieu of a separate law suit, Metex joined the DOJ as a defendant in Metex's unfair competition suit against ACS, alleging in the third count of its complaint that it was entitled under FOIA to an injunction compelling the DOJ to release the relevant materials.

Metex subsequently moved for summary judgment on its claim against DOJ. The district court denied the motion, announcing from the bench that the 7(C) exemption "is clear at this stage even though ultimately the FOIA's presumption in favor of disclosure may require further scrutiny of defendant's claimed privacy right .... I need not do that in this summary judgment motion here today." Appendix at 165a. Immediately after this ruling was made, Metex asked the district court for leave to amend its motion to request an injunction ordering Botvin to consent to a release of the materials. When neither party objected, the court allowed the amendment, but denied the newly interposed request for injunctive relief. The district court formalized these decisions in an order issued on February 3, 1984, which: (1) denied Metex's motion for summary judgment and for an injunction to compel DOJ to produce certain materials pursuant to FOIA; and (2) denied Metex's request for a mandatory injunction to compel ACS and George Botvin to authorize release of the tape recordings and documentary records in possession of the DOJ. Metex appealed. ACS, Botvin, and the United States have moved to dismiss the appeal, arguing that this court lacks appellate jurisdiction. We first take up the appealability of the district court's order pertaining to DOJ, and then consider the appealability of the denial of the injunction against ACS and Botvin.

II.

Metex argues that the denial of its motion for summary judgment against the government on the FOIA claim is immediately appealable under either 28 U.S.C. Sec. 1291 or Sec. 1292. We consider these alleged grounds for jurisdiction in turn.

A.

Generally, Sec. 1291 does not give this court jurisdiction to consider the denial of a motion for summary judgment. See Forsyth v. Kleindienst, 599 F.2d 1203, 1207 (3d Cir.1979), cert. denied sub nom. Mitchell v. Forsyth, 453 U.S. 913, 101 S.Ct. 3147, 69 L.Ed.2d 997 (1981); Hart v. Overseas Nat'l Airways, Inc., 541 F.2d 386, 394 (3d Cir.1976). In Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225, 93 L.Ed. 1528 (1949), however, the Supreme Court announced the narrow "collateral order" exception that allows appellate review under Sec. 1291 of certain orders that are not formally final. The Supreme Court has more recently explained that "[t]o come within the 'small class' of decisions excepted from the final judgment rule by Cohen, the order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 2458, 57 L.Ed.2d 351 (1978) (emphasis added). Construing the collateral order doctrine narrowly, we have held that each of the three independent requirements must be met before appellate review is permitted. Lusardi v. Xerox Corp., 747 F.2d 174, at 176 (3d Cir.1984) (citing Rodgers v. United States Steel Corp., 508 F.2d 152, 159 (3d Cir.), cert. denied, 423 U.S. 832, 96 S.Ct. 54, 46 L.Ed.2d 50 (1975); Yakowicz v. Commonwealth of Pa., 683 F.2d 778, 783 (3d Cir.1982)).

Metex's appeal does not meet the Livesay test. The district court did not treat its ruling on the summary judgment motion as final; rather, it indicated that it was prepared to reconsider the motion at a later time. See Appendix at 165a (passage quoted supra at page 152). Because the district court explicitly left open renewed consideration of the FOIA claim, the order was not "conclusively determine[d]" within the meaning of Cohen. ⁴ Cf. Lusardi v. Xerox Corp., at 177-178 (certification of a class action under the Age Discrimination in Employment Act fails the first part of the Cohen test because the order "is subject to revision by the district court.").

B.

Appellant also contends that Sec. 1292 gives this court jurisdiction to consider the merits of its FOIA claim because it seeks injunctive relief against the DOJ. Section 1292(a)(1) allows review of orders by a district judge "granting, continuing, modifying, refusing or dissolving injunctions." The long-standing rule in this circuit, however, is that this language does not confer jurisdiction to hear an appeal from any denial of summary judgment merely because the granting of the motion would have resulted in an injunction. See Morgenstern Chemical Co. v. Schering Corp., 181 F.2d 160, 162 (3d Cir.1950). Morgenstern suggested that jurisdiction of such orders under Sec. 1292 would lie only when a party could demonstrate "the potential of drastic and far-reaching effect on the rights of the parties which is characteristic of orders which decide the propriety of granting or refusing injunctions." Id.

The approach to the denial of summary judgment developed by this court in Morgenstern is fully consistent with a recent opinion of the Supreme Court that discusses the applicability of Sec. 1292 to orders whose effect is the denial of immediate injunctive relief. In Carson v. American Brands, Inc., 450 U.S. 79, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981), the Court concluded that Sec. 1292(a)(1) allows jurisdiction over only a relatively narrow range of such orders: "[A]ppeal as of right under Sec. 1292(a)(1) will be available only in circumstances where an appeal will further the statutory purpose of 'permit[ting] litigants to effectually challenge interlocutory orders of serious, perhaps irreparable, consequence.' " Id. at 84, 101 S.Ct. at 996 (quoting Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 181, 75 S.Ct. 249, 252, 99 L.Ed. 233 (1955)). Carson then established a two-part test for appealability: the appellant must demonstrate that serious, perhaps irreparable, consequences will occur if an immediate appeal is not permitted, and that an immediate appeal is necessary to allow an effective challenge of the order. ⁵

Appellant does not present any factors specific to this appeal indicating that the Carson test has been met. Its failure in this regard is understandable. Dismissal of this appeal would not have serious consequences for appellant because its FOIA claim is still open for consideration on remand and, as the government noted at oral argument, the materials apparently are obtainable by more traditional discovery methods. ⁶ Moreover, dismissal of this appeal would not preclude an effective appeal if one is considered necessary at a later date: the issues regarding appellant's FOIA claim will not be obscured, and perhaps will be better illuminated, by the passage of time. ⁷

Metex attempts to justify an immediate appeal in this case by arguing that the Supreme Court has...