Berckeley Investment Group, Ltd v. Douglas Colkitt

Filed July 26, 2001
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 00-3433
BERCKELEY INVESTMENT GROUP, LTD.
v.
DOUGLAS COLKITT; SHORELINE PACIFIC
INSTITUTIONAL FINANCE, THE INSTITUTIONAL DIVISION
OF FINANCE WEST GROUP; NATIONAL MEDICAL
FINANCIAL SERVICES CORPORATION
Douglas Colkitt,
Appellant
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D. C. No. 97-CV-1242)
District Judge: Honorable James F. McClure, Jr.
Argued: December 12, 2000
Before: SCIRICA, AMBRO, Circuit Judges, and
POLLAK, District Judge.**
(Filed: July 26, 2001)
_________________________________________________________________
** Honorable Louis H. Pollak, Senior United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.

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James P. Kimmel, Jr. , Esq. (Argued)
Peter Konolige, Esq.
Marcy L. Colkitt & Associates
983 Old Eagle School Road
The Woods, Suite 618
Wayne, PA 19087
Counsel for Appellant
Mitchell R. Katz, Esq. (Argued)
Jay Starkman, Esq.
Joel Magolnick, Esq.
Moscowitz, Starkman & Magolnick
Bank of America Tower, 37th Floor
100 Southeast 2nd Street
Miami, FL 33131
Luis E. Delgado, Esq.
Homer, Bonner & Delgado
Bank of America Tower,
Suite 3400
100 Southeast 2nd Street
Miami, FL 33131
Counsel for Appellee Berckeley
Investment Group, Ltd.
Michael J. Lawson, Esq. (Argued)
Lisa M. Carvalho, Esq.
Steefel, Levitt & Weiss, P. C.
One Embarcadero Center, 30th Floor
San Francisco, CA 94111
James J. Kutz, Esq.
Duane, Morris & Heckscher
305 North Front Street
P. O. Box 1003, 5th Floor
Harrisburg, PA 17108-1003
Counsel for Appellee Shoreline
Pacific Institutional Finance, The
Institutional Division of the
Financial West Group
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OPINION OF THE COURT
AMBRO, Circuit Judge:
Defendant-Appellant Douglas Colkitt appeals from the
District Court' s award of summary judgment in favor of the
Plaintiff-Appellee Berckeley Investment Group, Ltd.
("Berckeley"), and the denial of his own cross-motion for
summary judgment. Berckeley's claims against Colkitt are
for breach of contract -- more particularly, Colkitt' s refusal
to convert debentures held by Berckeley into unregistered
shares of National Medical Financial Services Corp.
("National Medical"), as required by the Offshore Convertible
Securities Purchase Agreement (the "Agreement") the two
entered into in 1996. Colkitt has interposed various
defenses, including the allegation that Berckeley violated
several registration provisions of the securities laws of the
United States, thereby voiding his obligations to convert the
debentures under the Agreement.
Berckeley' s complaint makes additional claims against
the broker of the transaction -- Shoreline Pacific
Institutional Finance, the Institutional Division of the
Financial West Group ("Shoreline" ) -- claiming breaches of
contract and fiduciary duty. Shoreline, in turn, has made
cross-claims against Colkitt for breach of contract and
contractual indemnification. The claims by and against
Shoreline remain unresolved.
While we recognize the benefits of the expeditious
resolution of the parties' conflict, we nevertheless find that
this Court, in the absence of the District Court' s
certification of its order as a partial final judgment
pursuant to Federal Rule of Civil Procedure 54(b), does not
have jurisdiction to entertain this appeal in light of the
pending claims against Shoreline. We therefore refuse
jurisdiction under 28 U.S.C. § 1291 and remand to the
District Court for consideration of those factors relevant to
such certification and, if it deems necessary, compliance
with Rule 54(b).
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I. FACTS AND PROCEDURAL H ISTORY
On May 30, 1996, Colkitt and Berckeley entered into an
Agreement by which Berckeley purchased forty convertible
debentures issued by Colkitt at a price of $50,000 each, for
a total of $2, 000,000. The debentures had a term of one
year and paid interest of 6%, due quarterly. The debentures
further provided that Berckeley had the unilateral option to
demand that Colkitt convert each debenture into
unregistered shares of National Medical, a company led by
Colkitt as the Chairman of its Board of Directors and which
traded on the Nasdaq Stock Exchange. The number of
shares converted depended on the price of National Medical
stock and included a 17% discount from the market price.
The discount was, in part, because the National Medical
shares held by Colkitt for the transaction were not
registered with the Securities and Exchange Commission,
as would be required for sales of those shares within the
United States by Section 5 of the Securities Act of 1933. 15
U.S.C. § 77(e). The Agreement between Colkitt and
Berckeley was brokered by Shoreline and it was through
Shoreline that the $2,000,000 eventually passed to Colkitt
on May 31, 1996.
Berckeley made its first demands for conversion of the
debentures in September 1996, after the expiration of a
100-day waiting period required by the Agreement. Colkitt
initially refused to convert the debentures, but eventually
acceded to the conversion of 18,320 shares, a small fraction
of the requested share conversions, in November of 1996.
No other shares were converted despite Berckeley' s
demands. Colkitt also refused to make interest payments
on the debentures.
The battle of claims then began. Berckeley filed suit
against Colkitt, National Medical and Shoreline in the
United States District Court for the Middle District of
Pennsylvania on August 13, 1997.1 The complaint alleged
breaches of contract by both Colkitt and National Medical
and breaches of both fiduciary duty and contract by
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1. The District Court properly took original jurisdiction of this matter
pursuant to 28 U.S.C. § 1332(a), as there is complete diversity among
the parties and the amount in controversy exceeds $75,000.
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Shoreline. National Medical was eventually dismissed from
the action and the claims against it are immaterial to this
appeal. Colkitt filed his answer, affirmative defenses and
counterclaims on October 17. Shoreline filed a cross-claim
against Colkitt on December 10. The District Court
dismissed all of Colkitt' s counterclaims on April 1, 1998,
but Colkitt reasserted those counterclaims not dismissed
with prejudice in an amended counterclaim complaint, filed
April 21, 1998. Berckeley filed an answer and affirmative
defenses to Colkitt' s claims on May 13, 1998 and presented
the first of its motions for summary judgment in October of
that year.
As discovery progressed, Colkitt filed another set of
counterclaims and affirmative defenses, together with a
motion for summary judgment, in April 1999. In response,
Berckeley filed a second motion for summary judgment in
July 1999.
On December 7, 1999, the District Court granted
Berckeley' s motion for summary judgment and denied
Colkitt' s, but left open the question of damages. In its
December 7 Order, the Court noted that "the following
claims/issues remain for trial: (1) the amount of Berckeley' s
claim for damages due to the breach of contract by Colkitt
(Count I of the complaint); (2) Berckeley' s claims against
Shoreline Pacific for breach of contract and breach of
fiduciary duty (Counts II and III of the complaint); and (3)
Shoreline Pacific' s cross-claims against Colkitt for breach of
contract and contractual indemnity. " Recognizing the
pendency of these claims, the Court sought submissions
from the parties about how to proceed with trial and
expressly stated that the "entry of final judgment is
deferred pending disposition of the remaining claims."
Colkitt' s response to the District Court represented that
he "will shortly file a motion under Rule 54(b) and/or 28
U.S.C. § 1292(b) to immediately appeal the Court' s decision
regarding the grant of summary judgment on the lack of
scienter. " Berckeley filed a response outlining its
recommended procedure, including either dispositive
motions or a trial on damages, the entry of final judgment
and a one-year stay of the proceedings involving Shoreline.
The stay was recommended to permit Berckeley the
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opportunity to collect its damages from Colkitt, thereby
mitigating its claims against Shoreline and possibly limiting
Shoreline' s indemnification claims against Colkitt. In
response to these submissions, the District Court entered
its January 12, 2000 Order, which accepted Berckeley' s
proposed procedures. As to Colkitt' s submission, the Court
stated: "Colkitt indicates that he intends to file a motion for
leave to take an interlocutory appeal. While we do not
prejudge any such motion, we do not believe that the record
reflects the need for an interlocutory appeal."
Following the receipt of motions for final judgment and a
stay, the District Court entered its March 30, 2000 Order,
awarding damages to Berckeley in the amount of
$2,611,075.52. With respect to Colkitt' s threatened
interlocutory appeal, the Court stated the following: " Colkitt
indicated that he intends to file a motion for leave to take
an interlocutory appeal. No such motion was filed. Instead,
Colkitt has filed a motion ` for revision of and/or relief from'
our orders of December 7, 1999 and January 12, 2000. The
motion in effect is a motion for reconsideration." In fact,
Colkitt' s motion for reconsideration did cite Rule 54(b), but
neither the text of the motion nor its supporting
memorandum contained any discussion of Rule 54(b) or
partial final judgment.
The Court denied the motion for reconsideration and
granted a one-year stay of the proceedings involving
Shoreline, the stated purpose of which was "to allow
Berckeley to obtain a final judgment against Colkitt and
begin collection efforts, which would reduce or eliminate
Shoreline' s potential liability to Berckeley." The Order went
on to grant Berckeley' s motion for "the entry of final
judgment" and "directed" the clerk "to enter final judgment
in favor of Berckeley and against Colkitt . . . . " The Court
also directed the clerk "to close the file administratively
during the period of the stay" and stated that"[i]f no
motion to lift the stay is filed before it expires, the matter
will be deemed resolved and the case shall be closed."
Colkitt filed a notice of appeal on April 25, 2000. His
appeal was taken from "the Order and Final Judgment
entered by the district court on March 30, 2000 and from
the underlying orders of December 7, 1999 and January
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12, 2000." In a surreal (though presumably strategic)
change of course, Colkitt now claims that we do not have
jurisdiction because the judgment of the District Court was
not final for purposes of execution or appeal.2
II. DISCUSSION OF LAW
This Court' s appellate jurisdiction is conferred and
limited by Congress' s grant of authority. See Sheldon v. Sill,
49 U.S. (8 How. ) 441, 449 (1850) ("Courts created by
statute can have no jurisdiction but such as the statute
confers."). In this case, appellate jurisdiction is claimed
pursuant to 28 U.S.C. § 1291,3 which states that the
"courts of appeals (other than the United States Court of
Appeals for the Federal Circuit) shall have jurisdiction from
appeals from all final decisions of the district courts of the
United States . . . ." The clause "final decision" has been
interpreted to require that all proceedings and claims have
been terminated in the District Court. "Ordinarily, an order
which terminates fewer than all claims, or claims against
fewer than all parties, does not constitute a ` final' order for
purposes of appeal under 28 U.S.C. § 1291." Carter v. City
of Philadelphia, 181 F.3d 339, 343 (3d Cir.), cert. denied
sub nom., Roe v. Carter, 528 U.S. 1005 (1999); see also
Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 431-32 n.3
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2. Even had Colkitt not reversed course and argued that our jurisdiction
was lacking, we nevertheless would be required to examine, sua sponte,
the basis for our jurisdiction. See Ortiz v. Dodge, 126 F. 3d 545, 547 (3d
Cir. 1997); American Motorists Ins. Co. v. Levolor Lorentzen, Inc., 879
F. 2d 1165, 1169 (3d Cir. 1989).
3. Though Colkitt threatened to take an interlocutory appeal pursuant to
28 U.S.C. § 1292(b) in his response to the District Court' s December 7,
1999 Order, none of the parties now attempt to justify our jurisdiction
under that provision. This is perhaps because an application for
interlocutory appeal must be presented to this Court within ten days of
the District Court' s certification of the question of law. Braden v.
University of Pittsburgh, 552 F.2d 948, 950-51 (3d Cir. 1977) (en banc)
("It is well-settled that the neglect of a party to petition for leave to
appeal within ten days of the entry of the certification order deprives an
appellate court of jurisdiction to consider the petition, and that [Federal
Rule of Appellate Procedure] 26(b) forbids appellate courts to enlarge the
time for filing such a petition." (citation omitted)).
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(1956) ("In cases involving multiple parties where the
alleged liability was joint, a judgment was not appealable
unless it terminated the action as to all the defendants.")
(citing Hohorst v. Hamburg-American Packet Co. , 148 U.S.
262, 264 (1893)).
Recognizing, however, that "sound judicial
administration" could benefit from relaxing the"final
decision" rule, especially in complex cases involving
multiple litigants and claims, Federal Rule of Civil
Procedure 54(b) was first promulgated in 1939 to permit
the district court to enter "partial" final judgments of less
than all of the claims. Mackey, 351 U.S. at 433-34. Rule
54(b) now states the following:
(b) Judgment Upon Multiple Claims or Involving
Multiple Parties. When more than one claim for relief
is presented in an action, whether as a claim,
counterclaim, cross-claim, or third-party claim, or
when multiple parties are involved, the 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. In the absence of such determination and
direction, any order or other form of decision, however
designated, which adjudicates fewer than all the claims
or the rights and liabilities of fewer than all the parties
shall not terminate the action as to any of the claims
or parties, and the order or other form of decision is
subject to revision at any time before the entry of
judgment adjudicating all the claims and the rights
and liabilities of all the parties.
Fed. R. Civ. P. 54(b) (emphasis added). Put more succinctly
by the Supreme Court, "[i]f the District Court certifies a
final order on a claim which arises out of the same
transaction and occurrence as pending claims, and the
Court of Appeals is satisfied that there has been no abuse
of discretion, the order is appealable." Cold Metal Process
Co. v. United Eng' g & Foundry Co., 351 U.S. 445, 452 (1956).4
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4. While we will typically afford discretion to the District Court' s
determination that there is no just cause for delay, see Gerardi v. Pelullo,
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Berckeley and Shoreline argue on appeal that the District
Court' s Order of March 30, 2000 met the requirements of
Rule 54(b) and thus we have jurisdiction over this appeal.
Their argument, however, is weakened by the absence of
both "an express determination that there is no just reason
for delay," as literally required by the text of Rule 54(b), and
a clear indication from the District Court' s rulings that it
was considering all the questions relevant to a Rule 54(b)
determination. 5
Taking first the requirement of an express determination
that there is no just reason for delay, nowhere in the
District Court' s orders resolving this case did it use the
words "no just cause for delay" or make any statement of
an indisputably similar effect. Berckeley and Shoreline
maintain that we can imply that such a statement was the
District Court' s intent from similar language it used to
praise expedition in the resolution of the proceedings.
Specifically, Berckeley points to language in the Court' s
January 12, 2000 Order that acceptance of Berckeley' s
proposal to allow it to seek collection after the entry of
summary judgment "would not delay an appeal by more
than one or two months" and that the "matter is close to
resolution in this court, and may reach resolution if the
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16 F.3d 1363, 1368 (3d Cir. 1994); Curtiss-Wright Corp. v. General Elec.
Co. , 446 U.S. 1, 10 (1980), we are presented here with what is solely a
question of law entitled to plenary review -- our interpretation of the
requirements of Rule 54(b). See Griffiths v. CIGNA Corp. , 988 F. 2d 457,
462 (3d Cir.) (noting that though a motion for a new trial is ordinarily
reviewed for an abuse of discretion, where the outcome of that motion
relies on "legal precepts," the court would engage in plenary review), cert.
denied, 510 U.S. 865 (1993), overruled on other grounds, Miller v. CIGNA
Corp., 47 F.3d 586 (3d Cir. 1995).
5. The parties do not contest that the District Court ordered the entry of
final judgment as to at least one or more, but less than all, claims or
parties. See Waldorf v. Shuta, 142 F.3d 601, 611 (3d Cir. 1998) ("[a] final
judgment is ` an ultimate disposition of an individual claim entered in the
course of a multiple claims action' ") (citing Mackey, 351 U.S. at 436).
While the Court' s orders resolve Berckeley' s breach of contract claim
against Colkitt, see Gerardi, 16 F. 3d at 1370, the Court has not
terminated the claims of all parties, and thus it has not entered an
appealable final order under 28 U.S.C. § 1291. See Carter, 181 F. 3d at
343.
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suggestion of Berckeley is followed." Neither of these
statements, however, contains "an express determination
that there is no just reason for delay," as required by Rule
54(b). In fact, neither of these statements even implies that
the District Court was considering the delay caused by an
immediate appeal of summary judgment, as the Court also
said in the same paragraph that "we do not prejudge any
such motion" by Colkitt for an interlocutory appeal. We
decline to adopt the position that general references to the
necessity of expedition can substitute for the "express"
determination required by the Rule. See Bhatla v. U. S.
Capital Corp. , 990 F.2d 780, 786 n.6 (3d Cir. 1993).
Recognizing the absence of any express statement of" no
just cause for delay," both Berckeley and Shoreline argue
that such an "express" statement is not of talismanic
importance in determining whether this Court has
jurisdiction after our holding in Carter v. City of
Philadelphia, 181 F. 3d 339 (3d Cir. 1999). Their reliance on
Carter for the proposition that this Court no longer requires
a district court to make the express determination of Rule
54(b) is misplaced. In Carter, we were asked to consider
whether Rule 54(b) required that district courts explain
their consideration of factors in support of the
determination that there was no just cause for delay. Id. at
344-45. We had previously held that a "proper exercise of
discretion under Rule 54(b) requires the district court to do
more than just recite the 54(b) formula of ` no just reason
for delay.' The court should clearly articulate the reasons
and factors underlying its decision to grant 54(b)
certification." Allis-Chalmers Corp. v. Philadelphia Elec. Co.,
521 F.2d 360, 364 (3d Cir. 1975); see also Waldorf v.
Shuta, 142 F.3d 601, 611 (3d Cir. 1998).
Carter was concerned with whether the court' s failure to
articulate the factors discussed in Allis-Chalmers divested
us of appellate jurisdiction, not whether the express
determination of "no just cause for delay" was required for
certification under Rule 54(b). Indeed, we noted in Carter
that the district court in that case had expressly stated
both that there was no just cause for delay and that it was
entering a final judgment. Carter, 181 F.3d at 343 n.8. We
further stated that "the requirements of Rule 54(b) are
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clearly met," id. at 346, and we went on to hold that Allis-
Chalmers' s requirement of a statement of reasons for a Rule
54(b) entry of final judgment "stands not as a jurisdictional
prerequisite but as a prophylactic means of enabling the
appellate court to ensure that immediate appeal will
advance the purpose of the rule." Id. at 345.6 Given the
clarity of our holding in Carter, Berckeley' s and Shoreline' s
argument that we intended to hold that an express
determination of ` no just cause for delay' was not a
jurisdictional prerequisite is unpersuasive.
Indeed, only one court has held that a district court' s
failure to state expressly that there was "no just cause for
delay" permits the exercise of jurisdiction by the court of
appeals. In Kelly v. Lee' s Old Fashioned Hamburgers, Inc.,
908 F.2d 1218 (5th Cir. 1990), the Fifth Circuit, en banc,
held that "[i]f the language in the order appealed from,
either independently or together with related portions of the
record referred to in the order, reflects the district court' s
unmistakable intent to enter a partial final judgment under
Rule 54(b), nothing else is required to make the order
appealable. We do not require the judge to mechanically
recite the words ` no just reason for delay.' " Id. at 1220.
Unlike Carter, the Fifth Circuit' s holding in Kelly does
establish the proposition on which Berckeley and Shoreline
must rely in support of their argument that this Court has
jurisdiction.
Further examination of the district court' s holding in
Kelly demonstrates that the circumstances supporting
jurisdiction in that case are not comparable to those
presented here, and therefore we do not address whether
this Court should adopt the Fifth Circuit' s holding in Kelly.7
(Text continued on page 13)
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6. In doing so, we concurred with other courts of appeals that have
considered the question. See Ebrahimi v. City of Huntsville Bd. of Educ.,
114 F.3d 162, 166 (11th Cir. 1997); Feinstein v. Resolution Trust Corp.,
942 F.2d 34, 39-40 (1st Cir. 1991); Fuller v. M.G. Jewelry, 950 F. 2d
1437, 1441 (9th Cir. 1991); Pension Benefit Guar. Corp. v. LTV Corp. , 875
F. 2d 1008, 1015 (2d Cir. 1989), rev' d on other grounds, 496 U.S. 633
(1990); Bank of Lincolnwood v. Federal Leasing, Inc., 622 F. 2d 944, 948-
49 (7th Cir. 1980).
7. Indeed, the "touch the bases" approach taken by the Kelly dissenters,
see Kelly, 908 F.2d at 1223, has merit both because it is consistent with
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the plain meaning of Rule 54(b) and because it would result in a
predictable process by which appeals are taken under that rule. See also
Taylor v. FDIC, 132 F. 3d 753, 760 (D.C. Cir. 1997). That argument
proceeds from the recognition that Rule 54(b) is a simple rule. Its
substance is comprised of two sentences. The first sentence details the
mechanism by which a district court may enter partial final summary
judgment. A court must make both an "express determination that there
is no just reason for delay" and an "express direction for the entry of
judgment." Fed. R. Civ. P. 54(b). The word "express" separately modifies
both the determination of no just cause for delay and the direction for
the entry of judgment. Black' s Law Dictionary defines "express" as
"[c]lear; definite; explicit; plain; direct; unmistakable; not dubious or
ambiguous." Black' s Law Dictionary 580 (6th ed. 1990); see also Kelly,
908 F.2d at 1222 (referring to the substantially similar definition in
Webster' s Third New International Dictionary). "Under this definition,
` express determination that there is no just reason for delay' can mean
only one thing: The judge' s very words must state specifically that he or
she has decided that there is no just reason for delay." Kelly, 908 F. 2d
at 1222. Thus, the argument proceeds, it is self-evident that the first
sentence of Rule 54(b) requires an explicit manifestation that the district
court has determined there is "no just cause for delay" and directing the
entry of final judgment.
The second sentence explains the effect of a district court' s failure to
comply with the mechanism detailed in the first. It begins by stating "[i]n
the absence of such determination and direction, " thereby echoing the
first sentence' s requirements of both an "express determination" that
there is "no just cause for delay" and "express direction" for entry of
judgment. The second sentence goes on to state broadly that any court
order that does not comply with both of these requirements "shall not
terminate the action as to any claims or parties" and the order shall be
subject to later revision. As the dissent in Kelly notes, the second
sentence' s prohibition applies to all orders, "however designated, "
thereby limiting an appellate court' s ability to find alternative indicia of
finality where there has not been strict compliance with the rule. "The
inclusion of the ` however designated' proscription serves to underscore
the importance of the ` express determination' requirement in the [present
Rule]. The drafters apparently viewed this requirement as absolute --
one that could not be circumvented by use of a mere title." Kelly, 908
F. 2d at 1226. Furthermore, while the first sentence permits the district
court some discretion by stating it "may" enter partial final judgment
where the two requirements are met, the second sentence' s use of the
word " shall" arguably allows no discretion for an appellate court to take
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The district court in Kelly was undoubtedly passing on the
propriety of a partial final summary judgment under Rule
54(b). The district judge solicited a judgment form pursuant
to Rule 54(b) from the dismissed defendant, the signed
judgment was captioned " F. R.C. P. 54(b) JUDGMENT," and
the order directed "that there be final judgment entered
pursuant to Federal Rule of Civil Procedure 54(b) . . . ." Id.
at 1219. There were thus three indications that the district
court, though it did not state " no just cause for delay,"
intended to enter a judgment under Rule 54(b). The clarity
of the district court' s ruling was a necessary condition of
the Fifth Circuit' s holding that the absence of an express
determination of "no just cause for delay" would not defeat
its jurisdiction. After noting the district court' s three
references to its intent to enter judgment under Rule 54(b),
the Fifth Circuit stated that "[t]he only question, then, is
whether this language reflects with unmistakable clarity the
district judge' s intent to enter a partial final summary
judgment under Rule 54(b). We have no doubt that it does."
Id. at 1221.
But no indicia of the District Court' s intent to enter
judgment under Rule 54(b) is evident from its rulings in
this case. The District Court' s order does not cite Rule 54(b)
or discuss its application, but only states that it is granting
"final judgment" on the claims between Berckeley and
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jurisdiction pursuant to 28 U.S.C. § 1291 where those requirements are
deficient. See Miller v. French, 120 S. Ct. 2246, 2253 (2000) (discussing
the difference between "shall" and "may" in statutory interpretation).
The Supreme Court and this Court have repeatedly held that the
Federal Rules of Civil Procedure, like any other statute, should be given
their plain meaning. Business Guides, Inc. v. Chromatic Communications
Enters. , Inc., 498 U.S. 533, 540 (1991); Pavelic & LeFlore v. Marvel
Entertainment Group, 493 U.S. 120, 123 (1989); Walker v. Armco Steel
Corp., 446 U.S. 740, 750 n.9 (1980); United States v. Nahodil, 36 F.3d
323, 328 (3d Cir. 1994). " As with a statute, our inquiry is complete if we
find the text of the Rule to be clear and unambiguous." Business Guides,
Inc., 498 U.S. at 540-41.
The manner in which we dispose of this case does not require us to
address, head on, the issue presented in Kelly . Thus, we leave for
another day deciding whether the words "no just cause for delay" are
required in haec verba to confer appellate jurisdiction under Rule 54(b).
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Colkitt, while holding the remaining claims by and against
Shoreline in abeyance during a one-year stay. In light of the
well-known rule that a judgment is not appealable unless it
terminates all claims, see, e.g. Carter, 181 F.3d at 343, we
do not take the invocation of the words "final judgment" to
indicate that the Court intended to grant an appealable
partial final judgment under Rule 54(b). The sole reference
to the immediate appeal of its entry of summary judgment
is the Court' s statement that "we do not prejudge any such
motion" by Colkitt for an interlocutory appeal. Not only
does this statement disclaim that it is making any ruling at
all, but it appears to refer to a hypothetical motion
pertaining to the interlocutory appeal provisions of 28
U.S.C. § 1292.
The only reference to the application of Rule 54(b) in this
case is a lone citation to "Fed. R. Civ. P. 54 and 56"
contained in the motion for the entry of final judgment filed
by Berckeley and repeated once in its Memorandum of Law,
and the similarly summary citation in Colkitt' s Motion for
Reconsideration. Given the generality of these references
and the paucity of any further discussion of the
requirements of Rule 54(b), we are not persuaded that the
District Court intended to enter partial final judgment in
compliance with the dictates of that Rule. The facts of this
case are in stark contrast to those of Kelly and we are
unconvinced that the District Court' s "language reflects
with unmistakable clarity the district judge' s intent to enter
a partial final summary judgment under Rule 54(b)." Kelly,
908 F. 2d at 1221.
Even the Fifth Circuit has recognized that the absence of
an express determination of no just cause for delay cannot
be excused where it is unclear whether the district court
intended to enter a partial final judgment under Rule 54(b).
See Briargrove Shopping Ctr. Joint Venture v. Pilgrim Enters. ,
Inc., 170 F.3d 536 (5th Cir. 1999). Discussing its holding in
Kelly, the court concluded that, "[t]he intent must be
unmistakable; the intent must appear from the order or
from documents referenced in the order; we can look
nowhere else to find such intent nor can we speculate on
the thought process of the district judge." Id. at 539.
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Indeed, the facts in Briargrove substantially mirror those
presented here. "Unlike the facts in Kelly , the district court
nowhere mentions Rule 54(b). And in further contrast with
the Kelly facts, neither of the parties in the instant case
submitted a motion mentioning Rule 54(b) to the district
court." Id. at 539-40 (citations omitted). While the failure to
mention Rule 54(b) will not, by itself, defeat jurisdiction
under that section, United States v. Ettrick Wood Prods.,
Inc., 916 F.2d 1211, 1217 (7th Cir. 1990), where there is a
concurrent failure to make an express determination of no
just cause for delay, we cannot reasonably conclude that
the District Court intended to enter a partial final judgment
pursuant to that Rule.
We are buttressed in this conclusion by the absence of
any indication, in a colloquy with counsel or written
document (order, memorandum or opinion), that the
District Court was considering any of those factors relevant
to Rule 54(b), particularly those factors related to whether
there was a justifiable cause for delay. See Briargrove, 170
F. 3d at 540 ("the district court in this case did not issue
any orders or memoranda discussing the substantive
concerns surrounding a Rule 54(b) certification"). We
announced an illustrative list of Rule 54(b) factors in Allis-
Chalmers Corp., including:
(1) the relationship between the adjudicated and
unadjudicated claims; (2) the possibility that the need
for review might or might not be mooted by future
developments in the district court; (3) the possibility
that the reviewing court might be obliged to consider
the same issue a second time; (4) the presence or
absence of a claim or counterclaim which could result
in set-off against the judgment sought to be made final;
(5) miscellaneous factors such as delay, economic and
solvency considerations, shortening the time of trial,
frivolity of competing claims, expense, and the like.
Depending upon the facts of the particular case, all or
some of the above factors may bear upon the propriety
of the trial court' s discretion in certifying a judgment
as final under Rule 54(b).
Allis-Chalmers Corp., 521 F.2d at 364 (citations omitted).
While the consideration of these factors is not a
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jurisdictional prerequisite, see Carter, 181 F.3d at 345, this
case illustrates why explaining the relevant factors in
determining that there is no just cause for delay has the
importance we attributed to it in Allis-Chalmers . Without
the District Court' s consideration of the relevant factors, we
find ourselves as frustrated as Berckeley and Shoreline, for
we, as much as they, want to reach the merits of this
appeal by Colkitt, who now finds it to his strategic
advantage to undermine his own appeal by delaying any
decision on the merits. But we are stymied because we are
unable even to assess whether the District Court evaluated
those factors that might show no just cause for delay.
As an example, were we to assume the District Court
intended to enter judgment under Rule 54(b), we would find
little on the current record that would allow us to review
whether the District Court properly made that judgment.
While there was some general discussion of the relationship
between the adjudicated claims of Berckeley and Colkitt
and the unadjudicated claims involving Shoreline, and the
District Court did comment on the effect of partial final
judgment on the remaining claims, none of those
discussions was in the context of the application of Rule
54(b). Furthermore, there was no analysis of the particular
factors relating to whether just cause for delay existed,
including "whether the claims under review [are] separable
from the others remaining to be adjudicated and whether
the nature of the claims already determined [is] such that
no appellate court would have to decide the same issues
more than once even if there were subsequent appeals."
Carter, 181 F. 3d at 346 (citing Curtiss-Wright Corp., 446
U.S. at 8). Indeed, the Sixth Circuit has held that, in the
absence of a statement of reasons explaining the entry of
partial final judgments under Rule 54(b), it will not accord
deference to the district court' s determination of the issue.
Corrosioneering, Inc. v. Thyssen Envtl. Sys., Inc. , 807 F. 2d
1279, 1282-83 (6th Cir. 1986). We will similarly not accord
deference to the District Court where it has not announced
that there is "no just cause for delay" and did not consider
those factors relevant to this inquiry. Indeed, it can hardly
be said that we must accord deference to the District Court,
given our doubt that the Court ever intended to enter a
partial final judgment under Rule 54(b).
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Thus, we abstain from considering the merits of the Fifth
Circuit' s position in Kelly until an analogous case, one in
which there is an unmistakable intent to enter judgment
under Rule 54(b) but no express determination of"no just
cause for delay," presents itself. For purposes of Colkitt' s
appeal, we cannot say that the District Court' s orders show
any such unmistakable intent. We therefore find the appeal
premature until the District Court enters final judgment as
to all parties and claims or chooses to make an express
determination that there is no just cause for delay of the
appeal of the entry of summary judgment. We leave this
determination in the capable hands of the District Court,
"the one most likely to be familiar with the case and with
any justifiable reasons for delay." Bank of Lincolnwood v.
Federal Leasing, Inc., 622 F. 2d 944, 948 (7th Cir. 1980)
(citing Mackey, 351 U.S. at 437).
* * * * *
For the reasons noted above, we dismiss this appeal for
lack of jurisdiction and remand to the District Court for
further proceedings.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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