Opinion
98 Civ. 3099 (JGK).
May 28, 2001.
OPINION AND ORDER
In an Opinion and Order dated March 22, 2001, familiarity with which is assumed, the Court dismissed cross- claims brought by Sequip Participacoes S.A., Industrias Verolme-Ishibras S.A., IVI International, Ltd. S.A., Sade Vigesa S.A., SV Engenharia S.A., (collectively the "IVI Group") against Petrobras Brasileiro S.A.-Petrobras and Brasperto Oil Services Company (collectively "Petrobras/Brasoil") in this action (the "Indemnity Action") See United States Fidelity Guaranty Co. v. Petroleo Brasileiro S.A.-Petrobras, No. 98 Civ. 3009, 2001 WL 300735 (S.D.N.Y. Mar. 27, 2001). The IVI Group now moves pursuant to Fed.R.Civ.P. 54 (b) for an order entering final judgment with respect to the IVI Group's cross-claims.
Rule 54(b) provides that the district court "may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." Thus, for a district court to enter a final judgment under Rule 54(b), there must be:
(1) multiple claims or multiple parties (2) at least one claim, or the rights and liabilities of at least one party, must be finally decided within the meaning of 28 U.S.C. § 1291, and (3) the district court must make "an express determination that there is no just reason for delay" and expressly direct the clerk to enter judgment.Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 16 (2d Cir. 1997) (emphasis in original) (citation omitted).
The decision to enter judgment under Rule 54(b) is left to the sound discretion of the district court. See Advanced Magnetics, Inc., 106 F.3d at 16; Ginett v. Computer Task Group, Inc., 962 F.2d 1085, 1092 (2d Cir. 1992) (citing CurtissWright Corp. v. General Elec. Co., 446 U.S. 1, 8 (1980)). "In the multiple party situation where the complaint is dismissed as to one defendant but not others, the court should not, as a general matter, direct the entry of a final judgment pursuant to Rule 54 (b) if the same or closely related issues remain to be litigated against the undismissed defendants.... In a case involving multiple claims, the court should not enter final judgment dismissing a given claim unless that claim is separable from the claims that survive." Cullen v. Margiotta, 811 F.2d 698, 710-11 (2d Cir. 1987), overruled on other grounds, Agency Holding Corp. v. Malley-Duff Assocs., Inc., 483 U.S. 143, 156 (1987) . Because of the general policy against piecemeal appeals, Rule 54(b) is to be used sparingly. See Advanced Magnetics. Inc., 106 F.3d at 16; Cullen, 811 F.2d at 710. In general, "a district court may properly make a finding that there is "no just reason for delay' only when "there exists some danger of hardship or injustice through delay which would be alleviated by immediate appeal.'" Advanced Magnetics. Inc., 106 F.3d at 16 (quoting Cullen, 811 F.2d at 711); see also L.B. Foster Co. v. America Piles, Inc., 138 F.3d 81, 86 (2d Cir. 1998). Such circumstances may exist where a plaintiff may be prejudiced by a delay in recovering a monetary award or "where an expensive and duplicative trial could be avoided if, without delaying prosecution of the surviving claims, a dismissed claim were reversed in time to be tried with the other claims." Advanced Magnetics, Inc., 106 F.3d at 16 (quotation and citation omitted).
Before entering final judgment pursuant to Rule 54(b), "the court must ensure that the claim upon which final judgment is being entered is separable and extricable from any remaining claim." Amalgamated Service Allied Industries Joint Bd. v. Supreme Hand Laundry, Inc., 182 F.R.D. 65, 67 (S.D.N.Y. 1998); see also Ginett, 962 F.2d at 1095-96; Hudson River Sloop Clearwater. Inc.. v. Dept. of Navy, 891 F.2d 414, 418 (2d Cir. 1989) . The IVI Group argues that the Court already determined that the dismissed cross-claims are separable and extricable from the remaining claims and issues in this action when it determined that all of the IVI Group's cross-claims arose from the construction contracts and not the indemnity agreements or performance bonds. The IVI Group also contends that because the Court's dismissal of the cross-claims was based upon forum selection causes contained in the construction contracts there is no risk that the Court of Appeals will be required to revisit the issues that the IVI Group seeks to present on appeal at this time. The thrust of the IVI Group's argument that the forum selection clauses contained in the construction contracts do not bar their cross-claims, however, is that the IVI Group's cross-claims were "inextricably intertwined" with the merits of the remaining claims and that the cross—claims were not within the scope of the forum selection clauses. Thus, in reviewing this Court's Opinion and Order dismissing the IVI Group's cross-claims, it would be necessary for a panel of the Court of Appeals to become familiar with the exceedingly complicated claims in this case, as they would be required to do for purposes of any final appeal. The possibility of such duplicative review by the Court of Appeals in this case runs counter to the purposes and policies behind the separable and extricable claims requirement of Rule 54(b), "namely the desire to avoid redundant review of multiple appeals based on the same underlying facts and similar issues of law." Hudson River Sloop Clearwater, 891 F.2d at 418; see also 10 Wright, Miller Kane, Federal Practice and Procedure, § 2659 at 114 (1998)
In addition, postponement of appeal until the remaining claims in this case have been adjudicated presents no danger of hardship or injustice to the IVI Group. The IVI Group argues that they will incur hardship and injustice as a result of a delay because the IVI Group participated in discovery for over one year and they incurred significant cost and expense in responding to Petrobras/Brasoil's discovery demands and in making submissions to Magistrate Judge Katz. However, that discovery is now completed and an immediate appeal will not recoup those costs nor will it relieve any additional expense that the IVI Group may incur in the future. Furthermore, much of that discovery was required in any case because the IVI Group is, and remains, a defendant in this case. To the extent the IVI Group is complaining about discovery on the issue of damages, that discovery would have been required in any event if it is ever determined on the ultimate appeal in this action that the cross- claims should proceed.
The parties do not dispute that there are multiple parties in this action and that the IVI Group's claims have been finally decided.
Moreover, certification under Rule 54(b) in this case does not serve the interests of sound judicial administration and efficiency. See Harriscom Svenska AB v. Harris Corp., 947 F.2d 627, 629 (2d Cir. 1991) This case has been pending for over three years and its companion action, United States Fidelity and Guaranty Co. v. Braspetro Oil Serv. Co., No. 97 Civ. 6124, 1999 WL 307666 (S.D.N.Y. May 17, 1999) (the "Declaratory Judgment
Action"), has been pending for almost four years. There has already been one interlocutory appeal in this action and permitting an immediate appeal of the IVI Group's claims would not expedite final resolution of all pending claims. The factual discovery in this action is complete and the expert discovery is almost complete. The Joint Pre-trial Order is due no later than the end of August and trial is expected to take place in the early fall.
The arguments by the IVI Group appear to be premised on the assumption that this action will be stayed pending a decision by the Court of Appeals on the dismissal of the cross-claims.
But the IVI Group has not moved for a stay pending appeal and has not shown any of the requirements for a stay such as a likelihood of success on appeal. An interlocutory appeal would necessarily delay all of the pre-trial preparations and it is highly unlikely that the Court of Appeals would render its decision prior to the expected date of trial. Thus, the Court would have to postpone trial pending the appeal. In any event, the fairest and most expeditious way to resolve all the complicated issues in this case is to set the case down for trial, resolve all pending claims after which a single appeal to the Court of Appeals may be asserted by any party. See Vannest v. Sage. Rutty Co., Inc., 8 F. Supp.2d 243, 245 (W.D.N.y. 1998). Finally, because all of the parties on the cross-claims have agreed that this case should be tried without a jury, this is not a case where a second jury would have to become familiar with the case. Rather, the Court having become familiar with the case, should be able to expedite any issues that remained after a single appeal.
CONCLUSION
For the foregoing reasons, the IVI Group's motion pursuant to Fed.R.Civ.P. 54(b) for an order entering final judgment with respect to the IVI Group's cross-claims is denied.
SO ORDERED.