Ohio-Sealy Mattress Mfg. Co. v. Duncan

• Decision Date: 11 August 1983
• Docket Number: No. 82-2681,OHIO-SEALY,82-2681
• Citation: 714 F.2d 740
• Parties: 1983-2 Trade Cases P 65,534 MATTRESS MANUFACTURING CO., et al., Plaintiffs-Appellants, v. Louis C. DUNCAN, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 740

714 F.2d 740

1983-2 Trade Cases P 65,534

OHIO-SEALY MATTRESS MANUFACTURING CO., et al., Plaintiffs-Appellants, v. Louis C. DUNCAN, et al., Defendants-Appellees.

No. 82-2681.

United States Court of Appeals Seventh Circuit.

Argued March 28, 1983.

Decided Aug. 11, 1983.

Frederic F. Brace, Jr., P.C., Brace & O'Donnell, Chicago, Ill., for plaintiffs-appellants.

Phil C. Neal, Friedman & Koven, Chicago, Ill., for defendants-appellees.

Before CUMMINGS, Chief Judge, BAUER and COFFEY, Circuit Judges.

BAUER, Circuit Judge.

The issue in this case is whether this court has jurisdiction to hear an appeal from an interlocutory order denying a motion to compel arbitration. We hold that it does not.

Ohio-Sealy Mattress Manufacturing Company (Ohio-Sealy) filed this action in 1979 against Sealy, Inc. alleging that Sealy's attempts to prevent Ohio-Sealy from expanding its West Coast business violated federal antitrust laws and the parties' license agreement. Ohio-Sealy then filed a motion to compel arbitration of the contractual claims. Two months later Ohio-Sealy renewed this motion. The matter was referred to a magistrate who recommended that the motion be denied. Shortly thereafter Ohio-Sealy moved for a preliminary injunction to restrain Sealy from terminating Ohio-Sealy's license if Ohio-Sealy manufactured Sealy-label bedding at its newly acquired San Diego plant. Ohio-Sealy's final motion on these issues, entitled Motion for Preliminary Injunction, requested that Sealy be: (1) required to allow Ohio-Sealy to manufacture Sealy mattresses at its San Diego plant; (2) restrained from controlling its subsidiary, Sealy Mattress Company of the Northwest; and (3) compelled to arbitrate. The district court, 548 F.Supp. 75, refused to compel arbitration or require Sealy to permit Ohio-Sealy to manufacture bedding in California. The matter concerning Sealy Mattress Company of the Northwest was referred to a magistrate for an evidentiary hearing.

Only the refusal to compel arbitration is challenged in this appeal. Sealy contends that this court has no jurisdiction over this appeal because the order denying Ohio-Sealy's motion to compel arbitration is not a final order under 28 U.S.C. § 1291, is not an interlocutory order within the meaning of 28 U.S.C. § 1292(a)(1), and was not certified for appeal under FED.R.CIV.P. 54(b).

In contrast, Ohio-Sealy asserts jurisdiction under several theories. First, Ohio-Sealy contends that the denial is a final order because it completely eliminates Ohio-Sealy's right to arbitration. It asserts that jurisdiction exists under 28 U.S.C. § 1291 because "if the district court's denial of arbitration is not reviewed now, it will never be reviewed." Appellants' reply br. at 10. In the alternative, Ohio-Sealy contends that the denial is appealable under 28 U.S.C. § 1292(a)(1) because it has the practical effect of denying an injunction. Ohio-Sealy also argues that jurisdiction exists under the Enelow-Ettelson rule ¹ and the collateral order doctrine. Finally, Ohio-Sealy maintains that this court has jurisdiction under the All Writs Act, 28 U.S.C. § 1651(a).

We first consider whether the order is final for purposes of 28 U.S.C. § 1291. Under section 1291 only final judgments may be appealed. A final judgment is one which ends the litigation on the merits, leaving nothing for the court to do but execute the judgment. Dilly v. S.S. Kresge, 606 F.2d 62 (4 Cir.1979). If an order is a provisional disposition of an issue, which does not result in the irretrievable loss of the litigant's rights, the order is not appealable under section 1291. United States v. Mellon Bank N.A., 545 F.2d 869 (3 Cir.1976). Thus, although the final judgment rule has been construed liberally, and is subject to judicially-created as well as statutory exceptions, it is nevertheless the general rule in federal practice. 9 J. MOORE, B. WARD & J. LUCAS, MOORE'S FEDERAL PRACTICE p 110.08 at 111-12 (2d ed. 1983).

The district court's denial of Ohio-Sealy's request to arbitrate does not meet the test of a final order. The pretrial denial does not mean that Ohio-Sealy necessarily will be denied arbitration. The district court's ruling is merely a discretionary ruling that Ohio-Sealy is not likely to prevail on its claim of a right to arbitration. There is, however, nothing final in this ruling; the district court has the power to compel arbitration if, after an evidentiary hearing, it concludes that the initial denial was erroneous.

Moreover, even if the denial is deemed to be a final judgment of the arbitration issue, it is not appealable because it is only one of many claims alleged in the complaint. The final disposition of one claim in a multi-count complaint is not final within the meaning of section 1291 unless the district court certifies it for direct appeal under FED.R.CIV.P. 54(b). University Life Insurance Company of America v. Unimarc Ltd., 699 F.2d 846 (7th Cir.1983). No such certification was granted here.

Next, we consider whether the denial of Ohio-Sealy's motion to compel arbitration qualifies as an appealable interlocutory order under 28 U.S.C. § 1292(a)(1). Ohio-Sealy combined its final motion to compel arbitration with other requests for injunctive relief. Simply casting a motion to compel arbitration in injunctive terms, however, is insufficient to bring the motion within the scope of section 1292(a)(1). Gould v. Control Laser Corp., 650 F.2d 617, 621 n. 7 (5th Cir.1981). Moreover, even if the denial of Ohio-Sealy's motion has the same effect as the denial of an injunction, this fact, without more, does not render the order an appealable interlocutory order. The litigant also must establish that the interlocutory order is likely to have "serious, perhaps irreparable" consequences which can be "effectively challenged" only by immediate appeal. Carson v. American Brands, Inc., 450 U.S. 79, 84, 101 S.Ct. 993, 997, 67 L.Ed.2d 59 (1980).

In general, orders related only to pretrial procedures are not appealable under 28 U.S.C. § 1292(a)(1). Switzerland Ass'n v. E. Horne's Market, Inc., 385 U.S. 23, 87 S.Ct. 193, 17 L.Ed.2d 23 (1966); Whyte v. THinc Consulting Group International, 659 F.2d 817 (7th Cir.1981). The effect of the order in this case was merely to determine in which forum the claims would be heard. Thus, because Ohio-Sealy has failed to establish that the denial is likely to have "serious, perhaps irreparable" consequences as required in Carson v. American Brands, Inc., 450 U.S. 79, 101 S.Ct. 993, 67 L.Ed.2d 59 (1980), this order is non-appealable at this stage in the litigation.

Under the Enelow-Ettelson exception, however, a ruling on the method or timing of trial may, under limited circumstances, be construed as an appealable order within the language of 28 U.S.C. § 1292(a)(1). The Enelow-Ettelson exception obtains if: (1) the challenged order is one staying or refusing to stay proceedings in the district court; (2) the action in which the order is made is, by its nature, an action at law; and (3) the stay was sought to permit the prior determination of some equitable defense. Jackson Brewing Co. v. Clarke, 303 F.2d 844, 845 (5th Cir.), cert. denied, 371 U.S. 891, 83 S.Ct. 190, 9 L.Ed.2d 124 (1962). Accord Whyte v. THinc Consulting...