Weit v. Continental Illinois Nat. Bank & Trust Co. of Chicago, s. 74-1658

• Decision Date: 17 May 1976
• Docket Number: 74-1659,75-1079,Nos. 74-1658,s. 74-1658
• Parties: 1976-1 Trade Cases 60,900 Jack WEIT et al., Plaintiffs-Appellants, v. CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST CO. OF CHICAGO et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1010

535 F.2d 1010

1976-1 Trade Cases 60,900

Jack WEIT et al., Plaintiffs-Appellants, v. CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST CO. OF CHICAGO et al., Defendants-Appellees.

Nos. 74-1658, 74-1659, 75-1079.

United States Court of Appeals Seventh Circuit.

Argued April 8, 1975.

Decided May 17, 1976.

Bryson P. Burnham, Watson B. Tucker, Earl A. Jinkinson, Jerald P. Esrick, Carl S. Lloyd, Keehn Landis, Chicago, Ill., for defendants-appellees.

James E. Beckley, Chicago, Ill., John P. Meyer, Danville, Ill., for plaintiffs-appellants.

Before SWYGERT and BAUER, Circuit Judges, and BRYAN, Senior District Judge. ^*

FREDERICK van PELT BRYAN, District Judge:

These are consolidated interlocutory appeals from three orders of the United States District Court for the Northern District of Illinois (Thomas R. McMillen, J.).

Plaintiffs Weit, Cox and McLallen were credit cardholders in the Midwest Bank Card System, Inc., and thereafter in the Interbank Card Association. They brought this antitrust action, alleging violations of Sections I and II of the Sherman Act against five Chicago banks and the Midwest Bank Card System, Inc., on behalf of themselves and all others similarly situated. The Midwest Bank Card System was a compatible credit card system ¹ under which the defendant banks issued credit cards.

The third amended complaint alleged in counts I and II that the defendant banks conspired to fix the interest rates charged cardholders. Counts III and IV repeated the allegations of the first two counts and further charged that defendant banks conspired with their correspondent banks ² to fix the interest rate charged cardholders. Counts V and VI alleged that defendant banks conspired among themselves and with their correspondent banks to fix the discount charged merchants who participated in the credit card system. It was alleged that this practice raised the prices of goods sold by participating merchants, to the damage of cardholders.

Plaintiffs sought treble damages in excess of three billion dollars, and an injunction directing renegotiation of all cardholder interest rates and merchant discount rates on an individual basis.

On August 3, 1973, the district court certified a plaintiff class for counts I-IV but refused to certify a plaintiff class on counts V and VI "at this stage of the proceedings." 60 F.R.D. 5. No appeal was taken from that order.

On June 4, 1974, the court below denied a motion by plaintiff McLallen for certification of a plaintiff class on counts V and VI. McLallen appealed. (No. 74-1659.) On June 13, 1974, the court denied a motion by all three plaintiffs to certify a class of defendants on counts I-IV. Plaintiffs appealed from that order. (No. 74-1658.)

Defendants moved to dismiss both appeals for want of appellate jurisdiction. On November 25, 1974 this court ordered that the appeals be consolidated and that the motions to dismiss be argued in conjunction with the argument on the merits.

On November 13, 1974, the district court determined the form of notice to be sent to members of the class certified on counts I-IV. The notice adopted by the court was substantially that suggested by the defendants. Plaintiffs appealed from that order. (No. 75-1079.) The defendants also moved to dismiss this appeal for want of appellate jurisdiction. On March 11, 1975 this court consolidated appeal 75-1079 with the other two appeals and directed that all three appeals be argued together.

The threshold question here is whether the orders of June 4 and 13 and November 13, 1974 are appealable. We conclude that none of them are appealable and thus we do not reach the merits.

I. Appeals Nos. 74-1658 and 74-1659

Each of these two interlocutory appeals is from an order denying a motion to certify a class. Each is taken pursuant to 28 U.S.C. § 1292(a)(1), which gives courts of appeals jurisdiction over appeals from

"(1) Interlocutory orders of the district courts . . . granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court."

In appeal No. 74-1659, plaintiff McLallen moved for certification of a plaintiff class on counts V and VI of the third amended complaint, which alleged a conspiracy by defendants and others to fix the discount rate charged merchants participating in the credit card system. In denying the motion the district court held that "(i)f plaintiff prevails, his presence alone will suffice for whatever injunctive relief is required" and that "(t)he plaintiffs are only incidentally interested" in the relief sought since the merchants themselves are the real parties in interest.

In appeal No. 74-1658, a motion by all of the three plaintiffs to certify a defendant class on counts I through IV was denied by the district court for a variety of reasons, including the venue provisions of the National Banking Act, 12 U.S.C. § 94, and the requirements of Rule 23(b), F.R.Civ.P. The class plaintiffs sought to have certified would have consisted of the named defendant banks plus all their correspondent banks in Illinois who participated in either of the two credit cards systems (Midwest Bank Card System and the Interbank-Master Charge System) involved in this litigation. ³ It is clear that neither of the orders appealed from granted or denied an injunction. Both merely refused to certify a class a plaintiff class on counts V and VI, and a defendant class on counts I-IV.

Plaintiffs, however, argue that each of the orders had the effect of substantially narrowing the scope of such injunctive relief as might eventually be granted and therefore should be considered interlocutory orders refusing an injunction appealable within the purview of 28 U.S.C. § 1292(a)(1). We fail to see how either order has that effect.

As to counts V and VI, an injunction against continuation of the present merchant discount practices and the bank interchange practices in favor of one plaintiff would, as a practical matter, result in the elimination of the practices, as the court below indicated.

As to counts I through IV, it is clear that any injunction against the named defendant banks would, for all practical purposes, prevent correspondent banks in Illinois from continuing the enjoined practices under the compatible credit card system. Injunctive relief against the named defendants only would not circumscribe the scope of potential relief in the slightest degree.

In any event, we agree with the District of Columbia Circuit in Williams v. Mumford, 167 U.S.App.D.C. 125, 511 F.2d 363, 369 (1975), that "the denial of class action treatment constitutes neither issuance nor denial of an injunction." (Footnote omitted) Plaintiffs' argument that the refusal to certify a class action affects the scope of potential injunctive relief and is therefore appealable under 28 U.S.C. § 1292(a)(1) is, as the D.C. Circuit said, "an unwarranted expansion of the statutory language (of § 1292(a)(1))." Id., at 369. See also Greenhouse v. Greco, 496 F.2d 213 (5th Cir. 1974); Weight Watchers of Philadelphia, Inc. v. Weight Watchers International, Inc., 455 F.2d 770, 774 (2d Cir. 1972); City of New York v. International Pipe and Ceramic Corp., 410 F.2d 295, 299 (2d Cir. 1969); 9 Moore, Federal Practice, P 110.20, at 232 (2d Ed. 1973) ("The obvious intention (of § 1292(a)(1)) was to permit an appeal from an interlocutory order that temporarily granted part or all of the ultimate relief sought by the bill."). Such cases as Brunson v. Board of Trustees, 311 F.2d 107 (4th Cir. 1962) (per curiam), cert. denied, 373 U.S. 933, 83 S.Ct. 1538, 10 L.Ed.2d 690 (1963); Yaffe v. Powers, 454 F.2d 1362 (1st Cir. 1972); and Build of Buffalo, Inc. v. Sedita, 441 F.2d 284 (2d Cir. 1971), relied on by the plaintiffs, are not apposite here. These were civil rights cases where the acts of the defendants were of such a nature that the wrong done could not be remedied by an injunction in favor of individual plaintiffs only. The holdings in these cases that orders denying class action motions were appealable under 28 U.S.C. § 1292(a)(1) were based on special facts and circumstances which are wholly absent here.

We hold that neither of the orders appealed from in Nos. 74-1658 and 74-1659 are orders "granting, continuing, modifying, refusing or dissolving injunctions" within the purview of Section 1292(a)(1) and are therefore not appealable.

II. Appeal No. 75-1079

The remaining appeal, No. 75-1079, is from the district court's order of November 13, 1974, which adopted, with some modifications, defendants' proposal for notifying the certified plaintiff class of the pendency of this action. The district court rejected plaintiffs' proposal, including their request that the notice be placed in the regular monthly statements sent by the banks to their cardholders. The proposal would have greatly reduced the costs of notice to the plaintiffs.

Plaintiffs contend that this interlocutory order is appealable under28 U.S.C. § 1291 and Cohen v. Beneficial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). ⁴

28 U.S.C. § 1291, the so-called "final judgment" rule, provides that

"The court of appeals shall have jurisdiction of appeals from all final decisions of the district courts . . . except where a direct review may be had in the Supreme Court."

The general rule is that only orders having the effect of ultimately resolving the litigation are appealable. ⁵ An exception to that broad rule, however, has been created for "orders which finally determine" controversies in a case that are "separable from, and collateral to, rights asserted in the action" and which are "too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred . . . ." Cohen, supra, at 546, 69 S.Ct. at 1225-26, 93 L.Ed. at 1536. The Supreme Court recognized in Cohen that this exception to the final judgment...