Opinion
CIVIL ACTION NO. 00-2638
April 13, 2004
ORDER
AND NOW, this 13th day of April, 2004, upon consideration of defendant American Meter Company's motion for certification of order for immediate interlocutory appeal (docket entry # 82) and plaintiffs Amco Ukrservice and Prompriladamco's response thereto, and the Court finding that:
(a) In a Memorandum and Order entered March 29, 2004, we denied American Meter's motion for summary judgment, which argued, inter alia, that the joint venture agreements at the heart of this action are unenforceable under the United Nations Convention on Contracts for the International Sale of Goods ("CISG") and that, under Pennsylvania's choice of law rules, Ukrainian law applies here and would also invalidate the agreements;
(b) American Meter has now moved pursuant to 28 U.S.C. § 1292(b) for certification of an interlocutory appeal on these two issues;
(c) For a court to certify an issue for interlocutory appeal, there must be (1) a controlling issue of law,
(2) substantial grounds for a difference of opinion, and
(3) material advancement of the ultimate termination of the litigation, Katz v. Carte Blanche Corp., 496 F.2d 747, 754 (3d Cir. 1974);
(d) The CISG and choice of law questions are certainly controlling questions of law because our resolution of these issues, if erroneous, would be reversible error on appeal, id. at 755;
(e) Nevertheless, we must deny this motion because American Meter has not satisfied the second and third criteria for an interlocutory appeal;
(f) American Meter has not shown that there are substantial grounds for disagreement on our resolution of either of the issues;
(g) As to the choice of law issue, it has vaguely asserted that "[a] different court may well analyze the issues differently and reach different conclusions about the reach and requirements of Ukrainian law", Def.'s Mot. at 3;
(h) However, it has not identified any specific errors in our treatment of the Ukrainian statutes and enabling regulations, and the bare fact that a question is complex or difficult is not a basis for an interlocutory appeal, see General Refractories Co. v. Allstate Ins. Co., No. 89-7924, 1995 WL 71044, at *1 (E.D. Pa. Feb. 22, 1995) (Hutton, J.) (noting that "if extensive briefs were indicative of the substantial grounds needed for certification, every case and every issue would be eligible, thereby defeating the intent to use certification in extreme cases only");
(i) As to our construction of the CISG, American Meter contends (apparently for the first time) that we erroneously failed to consider Article 3(1), which provides that "[c]ontracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production";
No American court appears to have applied Article 3(1) in a published opinion.
(j) This argument suffers from the same defect that ultimately undermined American Meter's assertions that the joint venture agreements are invalid under Article 14 of the CISG;
(k) As we explained in the Memorandum, the joint venture agreements were not sale or supply contracts, and American Meter's breach of discrete sale or supply contracts that the parties may have entered pursuant to their overarching joint venture relationship is not the basis of the plaintiffs' claims;
(1) Finally, it is not at all clear that an interlocutory appeal would appreciably hasten the termination of this litigation;
(m) The parties have reported that they will be ready for trial after November 1, 2004, and given the glacial pace of the appeals process, it is likely that we can conclude the trial long before the Court of Appeals would even crack open the parties' briefs;
In any event, it is not at all apparent that a victory in the Court of Appeals would terminate this litigation. If the Court endorsed our construction of the CISG but rejected our conclusion that this case involves a "false conflict" under Pennsylvania's choice of law rules, it would likely remand the case so that we could apply "true conflict" analysis. We would then weigh the competing governmental interests and apply Sections 6 and 188 of the Restatement (Second). See Melville v. American Home Assurance Co., 584 F.2d 1306, 1313-14 (3d Cir. 1978).
Without prejudging the issue, we note that American Meter would face an uphill battle because the Restatement strongly favors the validation of contracts:
Protection of the justified expectations of the parties is a factor. . . . of considerable importance with respect to issues involving the validity of a contract, such as capacity, formalities and substantial validity. Parties entering a contract will expect at the very least, subject perhaps to rare exceptions, that the provisions of the contract will be binding upon them. Their expectations should not be disappointed by application of the local law rule of a state which would strike down the contract or a provision thereof unless the value of protecting the expectations of the parties is substantially outweighed in the particular case by the interest of the state with the invalidating rule in having this rule applied.
Restatement (Second) of Conflict of Laws § 188 cmt. b (1971).
(n) It would thus appear that, notwithstanding the interesting issues of first impression that American Meter raised in its motion for summary judgment, this case is not a good candidate for an interlocutory appeal;
It is hereby ORDERED that the motion is DENIED.