Premium Service Corp. v. Sperry & Hutchinson Co., No. 73--2217

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: Before KOELSCH and CHOY; CHOY
• Citation: 511 F.2d 225
• Parties: 1975-1 Trade Cases 60,183 PREMIUM SERVICE CORPORATION, Plaintiff-Appellant, v. The SPERRY & HUTCHINSON COMPANY, Defendant, George A. Scott, Appellee.
• Docket Number: No. 73--2217
• Decision Date: 06 February 1975

Page 225

511 F.2d 225 1975-1 Trade Cases 60,183 PREMIUM SERVICE CORPORATION, Plaintiff-Appellant,
v.
The SPERRY & HUTCHINSON COMPANY, Defendant, George A. Scott, Appellee. No. 73--2217. United States Court of Appeals,
Ninth Circuit. Feb. 6, 1975.

Page 227

John Bodner, Jr. (argued), Howrey, Simon, Baker & Murchison, Washington, D.C., for plaintiff-appellant.

Michael L. Kirby (argued), Luce, Forward, Hamilton & Scripps, San Diego, Cal., for appellee.

Alan R. Wentzel (argued), Casey, Lane & Mittendorf, New York City, for defendant.

Before KOELSCH and CHOY, Circuit Judges, and MARKEY, ^* United States Court of Customs and Patent Appeals.

OPINION

CHOY, Circuit Judge:

Premium Service Corporation is engaged in antitrust litigation against the Sperry & Hutchinson Company (S&H) in the United States District Court for the District of Minnesota. S&H is charged with unlawfully monopolizing and attempting to monopolize segments of the trading stamp market. Premium Service is attempting to show that, as part of this alleged scheme, S&H has offered one of its customers, Walker-Scott Corporation, millions of dollars in tie-in loans and other inducements. Walker-Scott operates a chain of department stores in Southern California. As part of its pre-trial discovery for the Minnesota litigation, Premium Service served a subpoena duces tecum on George A. Scott in San Diego, requiring production of documents pertaining to dealings between Walker-Scott and S&H. Scott is Chairman of the Board of Walker-Scott.

Scott submitted a motion to quash the subpoena to the district court for the Southern District of California. The court granted the motion in part, denying Premium Service's demands for documents showing all payments from S&H to Walker-Scott, showing purchases of equity interests in Walker-Scott by S&H, and, very broadly, relating 'in any way, to any dealing, transaction, agreement or understanding' between the parties. The court also quashed Premium Service's subpoena of federal and state tax returns filed by Walker-Scott and by Scott as an individual from 1955 to 1972. The court further ordered that none of the documents which had been subpoenaed should be destroyed by Scott or by Walker-Scott. Premium Service appeals. We affirm.

Jurisdiction on Appeal

Scott argues at the outset that this court lacks jurisdiction over the appeal. We reject this contention. Our jurisdiction derives from 28 U.S.C. § 1291: 'The courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States . . . except where a direct review may be had in the Supreme Court.' Scott asserts that the district court's order in this case is not a 'final' decision. The Supreme Court has held that there exist marginal cases falling within a 'twilight zone' of finality; whether orders emanating from this zone are appealable must be determined by balancing the 'inconvenience and costs of piecemeal review' against 'the danger of denying justice by delay.' Gillespie v. United States Steel Corp., 379 U.S. 148, 152-53, 85 S.Ct. 308, 311, 13 L.Ed.2d 199 (1964). See generally Comment, Requiem for the Final Judgment Rule, 45 Texas L.Rev. 292 (1966).

Page 228

Even before announcing its expansive holding in Gillespie, the Court had firmly established the 'collateral order rule' in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). In Cohen, the Court held that an order denying a motion to require the plaintiff to post security in a stockholder's derivative action was appealable under section 1291. The language in Cohen is susceptible to codification in such a way as to produce a detailed test for finality. See, e.g., the three-prong test constructed by United States v. Cefaratti, 202 F.2d 13, 16 (D.C.Cir. 1952), cert. denied, 345 U.S. 907, 73 S.Ct. 646, 97 L.Ed. 1343 (1953). Regardless of how its holding is restated, however, the Court in Cohen applied common sense to the statutory language. Congress limited our jurisdiction to review of 'final decisions' not in order to deny appeal arbitrarily to some parties on some issues, but to enable all stages of litigation to be reviewed in one proceeding. 337 U.S. at 546, 69 S.Ct. 1221. If the district court has said its last word on an issue, and if its decision is of a nature that it will not be subject to review on appeal from the final judgment of the main proceeding, then the courts will not suppose Congress to have precluded immediate appeal of that decision. Cohen suggested that immediate appeal is particularly warranted when delay would render an appeal meaningless.

In the case before us, if the district court had denied Scott's motion to quash, Scott could have obtained review by electing to ignore the subpoena and appeal from the ensuing contempt citation. We would, therefore, lack jurisdiction to review the order denying the motion to quash. United States v. Ryan, 402 U.S. 530, 91 S.Ct. 1580, 29 L.Ed.2d 85 (1971); Cobbledick v. United States, 309 U.S. 323, 60 S.Ct. 299, 84 L.Ed. 783 (1940). ¹ Or, if the court granting Scott's motion had been the same court in which the main action was being litigated, Premium Service could have sought review of the order when it appealed from the final...