Sandwiches, Inc. v. Wendy's Intern., Inc.

• Decision Date: 16 July 1987
• Docket Number: 87-1716 and 87-1770,Nos. 87-1451,s. 87-1451
• Citation: 822 F.2d 707
• Parties: 1987 Copr.L.Dec. P 26,155, 8 Fed.R.Serv.3d 358 SANDWICHES, INC., d/b/a Suburpia Submarine Sandwich Shoppes, Plaintiff- Appellant, Cross-Appellee, v. WENDY'S INTERNATIONAL, INC., Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 707

822 F.2d 707

1987 Copr.L.Dec. P 26,155, 8 Fed.R.Serv.3d 358

SANDWICHES, INC., d/b/a Suburpia Submarine Sandwich Shoppes Plaintiff- Appellant, Cross-Appellee, v. WENDY'S INTERNATIONAL, INC., Defendant-Appellee, Cross-Appellant.

Nos. 87-1451, 87-1716 and 87-1770.

United States Court of Appeals Seventh Circuit.

Submitted April 28, 1987.

Decided June 17, 1987.

As Amended July 16, 1987.

Howard A. Davis, Habush, Habush & Davis, S.C., Michael J. Jassak, Thomai H. Mihal, Mihal & Steffens, S.C., Milwaukee, Wis., for plaintiff-appellant/cross-appellee.

Richard S. Florsheim, Foley & Lardner, Milwaukee, Wis., Robert E. Shumaker, for defendant-appellee/cross-appellant.

Before COFFEY, EASTERBROOK and RIPPLE, Circuit Judges.

EASTERBROOK, Circuit Judge.

There are two cases on the district court's docket. In one Wendy's International, Inc., is the plaintiff and Suburpia Submarine Sandwich Shoppes of Milwaukee, Inc., and William Drilias are the defendants. Wendy's charges Suburpia and Drilias with slander; Wendy's believes they falsely accused it of stealing a commercial belonging to Suburpia. Suburpia calls this the "Cheeseburga" commercial; Wendy's made and used two commercials that Suburpia believes are derivative. In the second case Sandwiches, Inc., is the plaintiff and Wendy's the defendant. Sandwiches, as assignee of Suburpia's interest in the commercial, accused Wendy's of infringing its copyright. Wendy's maintains that Suburpia did not have a copyright in the "Cheeseburga" commercial.

The district court consolidated the cases at Sandwiches' request and decided, on motion for summary judgment, that neither Sandwiches nor Suburpia has a copyright in the Cheeseburga commercial. 654 F.Supp. 1066 (E.D.Wis.1987). The court concluded that the creator of the commercial, rather than the advertiser, owned the rights. It dismissed Sandwiches' suit with prejudice; Wendy's suit lives on, however and the district court will hold a trial on its claims of slander.

Sandwiches, contending that this order is the "final decision" in the only case in which it is a party, has filed two appeals--one from the order, and the other from the denial of motions to modify the order. Wendy's has filed a cross appeal. Yet the order does not wind up all litigation about the Cheeseburga commercial and its fallout; it dealt with two, consolidated cases. The district court did not say to what extent the cases are consolidated; it simply referred to a local rule that governs consolidations of every kind. If the cases have been consolidated for all purposes, then the judgment does not cover all claims and parties, and no one may appeal unless the district court makes the findings required by Fed.R.Civ.P. 54(b). See Ivanov-McPhee v. Washington National Insurance Co., 719 F.2d 927 (7th Cir.1983).

If the cases have not been fully consolidated, however, Sandwiches presumptively may appeal on the ground that all claims in a stand-alone suit have been disposed of. Things are not that simple, though. Suburpia is in bankruptcy; the trustee sold Suburpia's assets and business to Sandwiches. Suburpia maintains an independent existence, however; it and not Sandwiches will be called on to compensate Wendy's for any torts. The district court's order on the motion for summary judgment declares that Suburpia had no copyright to transfer. This is why the court declared that Sandwiches has no copyright. The disposition of Sandwiches' copyright claim derives from Suburpia's. The only declaration unique to Sandwiches' suit is that Sandwiches got no more than Suburpia had. If Sandwiches appealed now, the decision in Wendy's suit that Suburpia had no copyright to transfer would remain in force; Suburpia cannot appeal without a Rule 54(b) judgment; only when the litigation between Suburpia and Wendy's ends may the case be resolved fully on appeal.

The link between the legal positions of Suburpia and Sandwiches suggests that the cases are sufficiently closely related that they should be treated as consolidated for all purposes, even if that was imperfectly accomplished. This is the course this court followed in Ivanov-McPhee. Sandwiches says that this will force it to wait another year to have its claims resolved on appeal, which is inefficient and unjust. Yet delay is inevitable, given the inability of either Suburpia or Drilias to appeal now, and the link between the claims. Moreover, Sandwiches is free to seek to shorten the delay by convincing the district judge to enter a Rule 54(b) judgment. Even this would not necessarily supply appellate jurisdiction if the cases in the district court are sufficiently related to those covered by the Rule 54(b) judgment. See United States General, Inc. v. Albert, 792 F.2d 678 (7th Cir.1986). The district court would have to analyze this case closely to see whether the standard of Albert is met. Our court has insisted that only parties (and claims) whose legal and factual positions are distinct may appeal on a partial final judgment under Rule 54(b). E.g., FDIC v. Elefant, 790 F.2d 661 (7th Cir.1986); Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698, 701-02 (7th Cir.1984); A/S Apothekernes Laboratorium for Specialpraeparater v. I.M.C. Chemical Group, Inc., 725 F.2d 1140 (7th Cir.1984) (collecting cases). The issues must be sufficiently separate that the court may deal with one appeal confident that the same problem will not recur on a later appeal in the same case. The principles restricting the number of interlocutory appeals apply as well to determining whether cases have been so consolidated that an appeal is interlocutory.

We do not think this approach collides with the statement in Johnson v. Manhattan Ry., 289 U.S. 479, 496-97, 53 S.Ct. 721, 727-28, 77 L.Ed. 1331 (1933), that consolidated cases remain separate for purposes of identifying who is a party--and therefore who may appeal. Ivanov-McPhee shows that there are several kinds of consolidations. See also 9 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure Secs. 2382 and 2386 (1971). Generalizations that assume all consolidations are of one flavor do not always carry the day. We doubt, moreover, that the Supreme Court adheres to all of the language in Johnson. In Synar v. United States, 626 F.Supp. 1374 (D.D.C.) (three-judge court), affirmed, --- U.S. ----, 106 S.Ct. 3181, 92 L.Ed.2d 583 (1986), two suits were filed challenging the constitutionality of a statute. The district court, citing Johnson, see 626 F.Supp. at 1379, concluded that it had to decide whether each was an Article III case or controversy, which entailed a look at the standing of each set of plaintiffs. Yet the Supreme Court, without mentioning Johnson, stated that the consolidation of the cases in the district court made it unnecessary to decide whether the plaintiffs in one of the cases had standing, 106 S.Ct. at...