Pacitti v. Macy's

Opinions of the United

1999 Decisions States Court of Appeals

for the Third Circuit

10-5-1999

Pacitti v Macy's

Precedential or Non-Precedential:

Docket 98-1803

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Filed October 5, 1999

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 98-1803

JOANNA PACITTI, a minor, by JOSEPH PACITTI, and

STELLA PACITTI, her parents and guardians,

Appellants

v.

MACY'S; MACY'S EAST, INC.

ON APPEAL FROM THE UNITED STATES

DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

(D.C. No. 97-cv-02557)

(District Judge: Honorable James T. Giles)

Argued: July 15, 1999

Before: GREENBERG, ALITO, Circuit Judges, and

STAFFORD, District Judge*

(Opinion Filed: October 5, 1999)

_________________________________________________________________

* The Honorable William H. Stafford, Jr., United States District Judge for

the Northern District of Florida, sitting by designation.

ALFRED W. PUTNAM, JR. (argued)

Drinker, Biddle & Reath

1345 Chestnut Street

Philadelphia National Bank Building

Philadelphia, PA 19107-3496

ALBERT C. OEHRLE

One East Airy Street

P.O. Box 657

Norristown, PA 19404

JOSEPH F. CLAFFY

Joseph F. Claffy & Associates, PC

100 S. High Street

West Chester, PA 19382

Counsel for Appellants

ROBERT P. JOY (argued)

DIANE M. SAUNDERS

Morgan, Brown & Joy, LLP

One Boston Place, Suite 1616

Boston, MA 02108-4472

JAMES M. PENNY, JR.

Obermayer Rebmann Maxwell

& Hippel LLP

One Penn Center - 19th Floor

1617 John F. Kennedy Boulevard

Philadelphia, PA 19103-1895

Counsel for Appellees

OPINION OF THE COURT

ALITO, Circuit Judge:

Stella and Joseph Pacitti, on behalf of their daughter,

Joanna Pacitti ("plaintiffs"), appeal the District Court's

grant of summary judgment in favor of Macy's East, Inc.

("Macy's") on their state-law contract and tort claims arising

from Macy's role as promoter and host of "Macy's Search

for Broadway's New `Annie' " (the "Search"). Plaintiffs also

appeal the District Court's order limiting the scope of

2

discovery. For the reasons that follow, we reverse on both

grounds and remand for further proceedings.

I.

In May 1996, the producers of "Annie," the Classic Annie

Production Limited Partnership (the "producers"), and

Macy's, a retail department store chain, entered into an

agreement under which Macy's agreed to sponsor the

"Annie 20th Anniversary Talent Search." See App. at 129a-

32a. Specifically, Macy's agreed to promote the event and to

host the auditions at its stores in the following locations:

New York City, Boston, Atlanta, Miami, and King of Prussia,

Pennsylvania. See id. at 129a-30a. The producers agreed to

select one finalist from each regional store to compete in a

final audition at Macy's Herald Square store in New York

City. See id. at 130a. The producers also agreed to offer the

winner of the final audition "a contract for that role to

appear in the 20th Anniversary Production of Annie .. .,

subject to good faith negotiations and in accordance with

standard Actors' Equity Production Contract guidelines"

(the "standard actors' equity contract"). 1 Id.

Macy's publicized the Search in newspapers and in its

stores in the five regional locations. All of the promotional

materials referred to the event as "Macy's Search for

Broadway's New `Annie.' " See id. at 59a-83a. Plaintiffs

learned of the Search from an advertisement in the

Philadelphia Inquirer that stated, in pertinent part:

If you are a girl between 7 and 12 years old and 4 È6<!DAG>

or under, the starring role in this 20th Anniversary

Broadway production and national tour could be yours!

Just get your hands on an application . . . and bring

it to the audition at Macy's King of Prussia store. . . .

Annie's director/lyricist . . . will pick the lucky actress

_________________________________________________________________

1. The Actors' Equity Association requires producers to attach its

standard "Agreement and Rules Governing Employment under the

Production Contract" to "all contracts where production is bonded as a

Bus and Truck Tour." See App. at 141a. As we discuss below, that

contract provides, among other things, that the producer retains the

authority to replace the actor at any time so long as the actor is

compensated through the term of the contract. See id. at 168a.

3

for final callbacks . . . at Macy's Herald Square. Annie

goes on the road this fall and opens on Broadway

Spring 1997.

Id. at 208a.

In June 1996, Joanna, then 11-years old, and her

mother picked up an application at the King of Prussia

store. The application form announced:

Annie, America's most beloved musical[,] and Macy's,

the world's largest store, are conducting a talent search

for a new "Annie" to star in the 20th Anniversary

Broadway production and national Tour of Annie. . . .

Id. at 22a. The reverse side of the application form

contained the "Official Rules [of] Macy's Search for

Broadway's New `Annie.' " See id. at 23a. In addition to

explaining the two-part audition process, the official rules

provided, in relevant part:

1. All participants must be accompanied by a parent or

legal guardian and must bring completed application

forms to one of the Macy's audition locations . . . and

be prepared to audition. . . .

2. The "Annie" selected at the "Annie-Off-Final

Callback" will be required to work with a trained dog.

The tour commences in Fall 1996, with a Broadway

opening tentatively scheduled for Spring 1997, [and]

with a post-Broadway tour to follow.

***

6. [Y]ou and your parent or legal guardian are

responsible for your own conduct, and hereby release

Macy's . . . and the Producers . . . from any liability to

or with regard to the participants and/or her parent or

legal guardian with respect to the audition(s).

***

8. All determinations made by the Producers or their

designated judges are being made at their sole

discretion and each such determination is final.

Id.3 Unlike Macy's contract with the producers, neither the

(Text continued on page 6)

_________________________________________________________________

3. Because the District Court relied heavily on the official rules in

rendering its decision, we provide them here in full:

4

1. All participants must be accompanied by a parent or legal

guardian and must bring completed application forms to one of the

Macy's audition locations on the dates and times listed on the

reverse of this form and be prepared to audition. Only one parent

or

legal guardian may accompany each participant.

2. The "Annie" selected at the "Annie-Off-Final Callback" will be

required to work with a trained dog. The tour commences Fall 1996,

with a Broadway opening tentatively scheduled for Spring 1997,

[and] with a post-Broadway tour to follow. Parent(s) or guardian(s)

will accompany tour children. Additional information on

arrangements for the final call-back and show rehearsals and

performances will be provided to each regional finalist selected to

attend the "Annie-Off-Final Callback" audition in New York City.

3. By participating, you agree to follow these Official Rules and

you

consent to the taking of a photograph, for identification purposes

only. You also agree that Macy's (and/or a Macy's designee) may use

your name, likeness, biographical data and/or [sic] voice for

advertising, promotional activities and/or publicity, whether or

not

related to the audition and also acknowledge that such use requires

neither any further permission nor any compensation. Participants

who are members of Actors' Equity Association must identify

themselves to an event representative as such, and will not be

audio

or video taped during the audition process. All application forms

are

the sole property of Macy's and Macy's is not responsible for any

lost, destroyed, incomplete, illegible or otherwise deficient or

unusable application forms.

4. In order to participate in the audition, you must complete and

return the reverse application form, be a U.S. resident, between

the

ages of 7 and 12 as of June 2, 1996[,] and you must be available

for

the final audition on Thursday, August 8, 1996[,] in New York City.

5. Macy's may require that you verify your date of birth and may

require that you provide a certified copy of your birth or

baptismal

certificate, school records or other document that states your date

of birth.

6. Participants' parents or legal guardians are responsible for any

tax obligations and expenses you may incur (such as the cost of

travel or hotel accommodations) for the initial audition. The

Classic

Annie Production Limited Partnership (the "Producers") will provide

travel and hotel accommodations to finalists selected for the

"Annie-

5

official rules4 nor any of the promotional materials included

a provision informing the participants that the winner of

the Search would receive only the opportunity to enter into

a standard actors' equity contract with the producers.

Joanna and her mother signed the official rules and

proceeded to the initial audition at the King of Prussia

store. Macy's publicized the event by placing balloons,

signs, pins, and other promotional materials advertising

"Macy's Search for Broadway's New `Annie' " throughout the

store. After auditioning hundreds of "Annie" hopefuls, the

producers selected Joanna as the regional finalist. In a

press release, Macy's announced Joanna's success to the

public: "One in Ten She'll Be a Star!!! Macy's Brings Local

Girl One Step Closer Towards `Tomorrow' to Become

Broadway's New `Annie.' " Id. at 77a. The press release

further provided:

Philadelphia's own, twelve year-old Joanna Pacitti, will

join nine other talented girls for a final audition to cast

the title role in the 20th Anniversary production of the

classic Tony Award-winning musical, Annie, coming to

Broadway this season. . . . Ten finalists, most of whom

were selected from over two thousand "Annie" hopefuls

_________________________________________________________________

Off" call-back in Macy's Herald Square on Thursday, August 8,

1996. In addition, you and your parent or legal guardian are

responsible for your own conduct, and hereby release Macy's East,

Inc., its affiliates and each of their respective officers,

directors,

employees, agents, successors and assigns (for purposes of this

Paragraph 6, all included within the term "Macy's") and the

Producers and their successors and assigns from any liability to or

with regard to the participants and/or her parent or legal guardian

with respect to the audition(s).

7. The audition is subject to all applicable laws and regulations.

8. All determinations made by the Producers or their designated

judges are being made at their sole discretion and each such

determination is final.

App. at 23a.

4. Throughout the remainder of this opinion, we refer to the official

rules

and the application form as the "official rules."

6

. . ., will vie for the chance to become Broadway's new

"Annie."

Id. (emphasis in original).

At the producers' expense, Joanna and her mother

traveled to New York City for Joanna to participate in the

"Annie-Off-Final Call Back" at Macy's Herald Square store.

After auditioning for two days, the producers selected

Joanna to star as "Annie" in the 20th Anniversary

Broadway production. Again, Macy's announced Joanna's

success to the public, referring to her as "Broadway's New

`Annie.' " See id. at 59a-83a.

Joanna and her mother met with the producers and

signed an "Actors' Equity Association Standard Run-of-the-

Play Production Contract." See id. at 133a-68a. Consistent

with the Actors' Equity Association's rules governing

production contracts, the producers retained the right to

replace Joanna with another actor at any time as long as

they paid her salary through the term of her contract. See

id. at 168a.

For nearly a four-month period, Joanna performed the

role of "Annie" in the production's national tour. In so

doing, Joanna appeared in over 100 performances and in

six cities. In February 1997, approximately three weeks

before the scheduled Broadway opening, the producers

informed Joanna that her "services [would] no longer be

needed," and she was replaced by her understudy. Id. at

12a.

On March 21, 1997, plaintiffs filed suit against Macy's in

Pennsylvania state court, alleging breach of contract and

the following tort claims: (1) fraudulent misrepresentation,

(2) equitable estoppel, (3) public policy tort, (4) breach of

implied covenant of good faith and fair dealing, and (5)

punitive damages. See id. at 15a-21a. In particular,

plaintiffs alleged that Macy's failed to deliver the prize it

had offered, i.e., the starring role of "Annie" on Broadway,

and that Macy's knew it could not award this prize but

promoted its ability to do so nonetheless. See id. Macy's

subsequently removed the suit to federal district court

based on diversity.

7

During discovery, plaintiffs sought to uncover information

on the relationship between Macy's and the producers and

on the pecuniary benefit Macy's received from sponsoring

the Search. Macy's objected to their request, and the

District Court limited discovery to "what promises, if any,

were made by defendant prior to and at the final audition

. . . in New York City that the person selected at that

audition would appear in the role as Annie." Id. at 38a.

Plaintiffs moved for reconsideration, and the District Court

denied that motion on December 19, 1997. See id. at 50a.

Macy's then moved for summary judgment, contending

that it did not deprive Joanna of any prize she had been

promised and that her rights were limited by the terms of

her contract with the producers. See id. at 24a, 126a. In

support of its motion, Macy's proffered, among other things,

its contract with the producers, which, as explained above,

specified that the successful contestant would receive only

the opportunity to enter into a standard actors' equity

contract with the producers.

The District Court granted summary judgment in favor of

Macy's. See Pacitti v. Macy's, No. Civ. A. 97-2557, 1998 WL

512938 (E.D. Pa. Aug. 18, 1998). Addressing plaintiffs'

breach of contract claim, the District Court concluded that

the contract was unambiguous and capable of only one

reasonable interpretation -- i.e., that Macy's offered only an

audition for the opportunity to enter into a standard actors'

equity contract with the producers for the title role in

"Annie." See id. at *3-4. Therefore, the Court rejected

plaintiffs' contention that Macy's offered Joanna a

guaranteed Broadway opening, see id. at *4, and the Court

concluded:

Plaintiffs received the benefit of their bargain by being

offered a contract with the Producers for the "Annie"

role, in exchange for Ms. Pacitti participating in

"Macy's Search for Broadway's New Annie." . . . When

the Producers offered a contract to Plaintiffs consistent

with the terms of the Official Rules[,] any possible

obligation Macy's had to Plaintiffs was fully met.

Id.

8

After rejecting plaintiffs' breach of contract claim, the

District Court turned to their tort claims. See id. Reasoning

that each cause of action was predicated upon the

assertion that Macy's offered Joanna the role of "Annie" on

Broadway, and concluding that Macy's made no such

representation, the District Court granted Macy's motion for

summary judgment on these claims as well. See id.

Plaintiffs then took this appeal. In their notice of appeal,

plaintiffs state only that they appeal from the District

Court's order granting summary judgment for Macy's. See

App. at 235a. In this appeal, however, plaintiffs also argue

that the District Court abused its discretion in limiting the

scope of discovery.

II.

A. We turn first to plaintiffs' argument that the District

Court erred in granting summary judgment in favor of

Macy's on the breach of contract claim. We exercise plenary

review over a grant of summary judgment and apply the

same legal standard used by the District Court. See Hullet

v. Towers, Perrin, Forster & Crosby, Inc., 38 F.3d 107, 111

(3d Cir. 1994). In so doing, we evaluate the evidence in the

light most favorable to the nonmoving party and draw all

reasonable inferences in that party's favor. See id. We

conclude that the District Court erred.

Under the law of Pennsylvania,5"[t]he promoter of a

[prize-winning] contest, by making public the conditions

and rules of the contest, makes an offer, and if before the

offer is withdrawn another person acts upon it, the

promoter is bound to perform his promise." Cobaugh v.

Klick-Lewis, Inc., 561 A.2d 1248, 1249 (Pa. Super. Ct. 1989)

(quoting Annotation, Private Rights and Remedies Growing

Out of Prize-winning Contests, 87 A.L.R.2d 649, 661). An

_________________________________________________________________

5. Because the laws of New York and Pennsylvania are identical in all

aspects material to the resolution of this case, and because the parties

do not assert a preference for the law of one jurisdiction over the other,

we, like the District Court, will not engage in a choice of law analysis.

See Pacitti v. Macy's, No. Civ. A. 97-2557, 1998 WL 512938, at *2 n.2

(E.D. Pa. Aug. 18, 1998). In addressing plaintiffs' breach of contract

claim, however, we refer only to the law of Pennsylvania.

9

offer has been defined as "a manifestation of willingness to

enter into a bargain, so made as to justify another person

in understanding that his assent to that bargain is invited

and will conclude it." Cobaugh, 561 A.2d at 1249 (citing

Restatement (Second) of Contracts S 24; 8 P.L.E. Contracts

S 23). The offer to award a prize results in an enforceable

contract if the offeree performs the required action before

the offer is withdrawn. See id.

Here, the parties entered into an enforceable contract

under Pennsylvania law. Macy's offered girls the

opportunity of becoming "Broadway's New `Annie' " by

participating in and winning the auditions, and Joanna

participated in and won the auditions. Therefore, the

dispute in this appeal relates to the parties' interpretation

of that contract and, in particular, to the question whether

the District Court properly found that the contract is

unambiguous. Determining whether a contract is

ambiguous is a legal question, and our review is plenary.

See Mellon Bank, N.A. v. Aetna Business Credit, Inc., 619

F.2d 1001, 1011 (3d Cir. 1980).

The purpose of contract interpretation is to ascertain and

effectuate the objectively manifested intentions of the

contracting parties. See Hullet v. Towers, Perrin, Forster &

Crosby, Inc., 38 F.3d 107, 111 (3d Cir. 1994) (citing Mellon

Bank, 619 F.2d at 1009). The court first determines

whether the contract is ambiguous. See Hullet , 38 F.3d at

111 (citing Stendardo v. Federal Nat'l Mortgage Ass'n, 991

F.2d 1089, 1094 (3d Cir. 1993)). A contract is ambiguous

if it is capable of more than one reasonable interpretation.

See Mellon Bank, 619 F.2d at 1011 (defining ambiguity as

an "[i]ntellectual uncertainty [or] the condition of admitting

two or more meanings, of being understood in more than

one way, or referring to two or more things at the same

time. . . ."). If the contract as a whole is susceptible to more

than one reading, the factfinder resolves the matter. See

Hullet, 38 F.3d at 111. On the other hand, where it is

unambiguous and can be interpreted only one way, the

court interprets the contract as a matter of law. See id.

In determining whether a contract is ambiguous, the

court "assumes the intent of the parties to an instrument

is `embodied in the writing itself, and when the words are

10

clear and unambiguous the intent is to be discovered only

from the express language of the agreement.' " Id. (citing

County of Dauphin v. Fidelity & Deposit Co., 770 F. Supp.

248, 251 (M.D. Pa.), aff'd, 937 F.2d 596 (3d Cir. 1991)).

This does not mean, however, that the court is confined to

the "four corners of the written document." Hullet, 38 F.3d

at 111 (citing Mellon Bank, 619 F.2d at 1011). Rather, the

court reads the contract in the context in which it was

made. See Hullet, 38 F.3d at 111 (citing Steuart v.

McChesney, 444 A.2d 659, 662 (Pa. 1982)). Therefore, to

determine the parties' intentions, the court may consider,

among other things, "the words of the contract, the

alternative meaning suggested by counsel, and the nature

of the objective evidence to be offered in support of that

meaning." Hullet, 38 F.3d at 111 (quoting Mellon Bank, 619

F.2d at 1011).

In this case, the District Court concluded that the

contract was unambiguous and capable of only one

reasonable interpretation -- i.e., that Macy's offered only an

audition for the opportunity to enter into a standard actors'

equity contract with the producers for the title role in

"Annie." See Pacitti v. Macy's, No. Civ. A. 97-2557, 1998 WL

512938, at *3-4 (E.D. Pa. Aug. 18, 1998). In reaching this

conclusion, the Court noted that the official rules

repeatedly referred to the promotion as an "audition," as

opposed to a "contest," and vested "sole discretion" in the

producers to make final determinations. See id. at *3.

Hence, the District Court found that "Plaintiffs could not

reasonably have relied upon Macy's as the selector of

`Annie' or as a controller of the Producers," id., and that "it

was obvious that Macy's was promoting auditions for the

benefit of the Annie Producers." Id. at *4. The District Court

also found that plaintiffs "knew that while Macy's was

promoting the search, it was not the entity that would be

contracting with the new `Annie.' " Id. at *3. Rather, the

District Court noted, plaintiffs "wholly expected" to sign a

standard actors' equity contract with the producers and,

according to the Court, their expectation is evidenced by

the fact that they executed such a contract after Joanna

won the Search. See id. The Court explained further:

The contract which she signed with the Producers did

not guarantee her that she would open on Broadway,

11

but instead considered her to be like every other actor

in "Annie" who had won their role through an audition

process but could be replaced at the Producers'

discretion pursuant to the standard equity contract.

Id. Therefore, the District Court rejected plaintiffs'

contention that Macy's offered Joanna a guaranteed

Broadway opening, see id. at *4, and the Court concluded:

Plaintiffs received the benefit of their bargain by being

offered a contract with the Producers for the "Annie"

role, in exchange for Ms. Pacitti participating in

"Macy's Search for Broadway's New Annie." . . . When

the Producers offered a contract to Plaintiffs consistent

with the terms of the Official Rules[,] any possible

obligation Macy's had to Plaintiffs was fully met.

Id.

Applying the standards discussed above, we conclude

that the District Court erred in determining that the

contract was capable of only one reasonable interpretation.

Plaintiffs' interpretation -- that Macy's offered the prize of

performing as "Annie" on Broadway for at least some period

-- is a reasonable alternative to that of the District Court.

The official rules and promotional materials referred to

the promotion as "Macy's Search for Broadway's New

`Annie.' " The official rules provided that the producers and

Macy's were "conducting a talent search for the new `Annie'

to star in the 20th Anniversary Broadway production," and

the advertisement in the Philadelphia Inquirer promised

that "[t]he starring role in this 20th Anniversary Broadway

Production and National Tour could be yours!" From these

assertions, one reasonably could conclude that Macy's

offered the winner of the Search the prize of starring as

"Annie" on Broadway. In addition, the use of the word

"audition," as opposed to "contest," in the official rules does

not make plaintiffs' interpretation unreasonable. As

plaintiffs assert:

[T]he word `audition' refers to the process a contestant

must undergo before she can `win' the prize. . . . It

follows, one would think, the girl selected after the

`final audition' has won something more than an

`audition.'

12

Appellants' Br. at 20-21 (emphasis in original).

Moreover, it is not unreasonable to conclude that Macy's

had the ability to offer the winner of the Search the starring

role on Broadway. The official rules provided that:

Annie, America's most beloved musical[,] and Macy's,

the world's largest store, are conducting a talent search

for a new "Annie" to star in the 20th Anniversary

Broadway production and national Tour of Annie. . . .

App. at 22a (emphasis added). That passage suggests that

Macy's and the producers jointly promoted and hosted the

Search. It does not indicate any relative imbalance of

authority in favor of the producers. Nor do we believe that

the clause vesting "sole discretion" in the producers

supports only the interpretation that the producers were

"the sole determiners of the Annie role." Pacitti, 1998 WL

512938, at *3 (emphasis added). Rather, that clause can be

interpreted more narrowly as only restricting Macy's from

selecting the winner of the auditions.

Further, Macy's at no point revealed -- either through its

printed materials or other means -- that the winner of the

Search would receive only the opportunity to sign a

standard actors' equity contract with the producers. 6 Nor do

the facts suggest that plaintiffs -- none of whom was a

member of the Actors' Equity Association -- had any

knowledge greater than that provided by Macy's. 7 We do not

believe that Macy's role was so "obvious" that it need not

_________________________________________________________________

6. Macy's should have manifested its intention in the contract by limiting

or qualifying its offer accordingly. See Cobaugh , 516 A.2d at 1250-51

(noting that it is the duty of the drafter of the contract to exercise due

care in explaining its offer so as not to mislead the public); Hutchinson

v. Sunbeam Coal Corp., 519 A.2d 385, 390 n.5 (Pa. 1986) ("[I]n

determining the intention of the parties to a written contract, the

writing

must be construed against the party drafting the document.").

7. We disagree with the District Court's assertion that based on the

general release clause, it is clear that plaintiffs"knew that while Macy's

was promoting the search, it was not the entity that would be

contracting with the new `Annie.' " Pacitti, 1998 WL 512938, at *3. That

clause provides:

[Y]ou and your parent or legal guardian are responsible for your

own

conduct, and hereby release Macy's . . . and the Producers . . .

from

any liability to or with regard to the participants and/or her

parent

or legal guardian with respect to the audition(s).

App. at 23a. As is clear from the language quoted above, that clause not

only releases Macy's but also the producers.

13

have limited its offer to public, and we find it telling that

Macy's contract with the producers contained qualifications

on the prize to be offered. Therefore, we conclude that it

was reasonable for plaintiffs to believe that Macy's offered

the starring role of "Annie" on Broadway.

We reach this conclusion even though plaintiffs executed

a standard actors' equity contract with the producers.

Courts may consider the subsequent actions of the

contracting parties to ascertain the parties' intentions and

resolve any ambiguities. See Department of Transp. v.

Mosites Constr. Co., 494 A.2d 41, 43 (Pa. Commw. Ct.

1985) ("The intention of the parties must control the

interpretation of the contract but if the intent is unclear

from the words of the contract, we may examine extrinsic

evidence including consideration of the subject matter of

the contract, the circumstances surrounding its execution

and the subsequent acts of the parties."); see also In re

Estate of Herr, 161 A.2d 32, 34 (Pa. 1960). Joanna's

contract with the producers, however, does not

demonstrate plainly and unambiguously that when

plaintiffs contracted with Macy's, they "wholly expected" to

execute a standard actors' equity contract with the

producers.

For these reasons, we hold that the contractual language

is ambiguous, and its interpretation should be left to the

factfinder for resolution. Accordingly, the District Court

erred in concluding that Macy's is entitled to judgment as

a matter of law.

B. Macy's also contends that plaintiffs' claims are barred

by the express release in the official rules. The official rules

provide, in pertinent part:

[Y]ou and your parent or legal guardian are responsible

for your own conduct, and hereby release Macy's . . .

and the Producers . . . from any liability to or with

regard to the participants and/or her parent or legal

guardian with respect to the audition(s).

App. at 23a. That paragraph simply releases Macy's from

liability "with respect to the audition(s)." It does not allow

Macy's to escape liability arising from this action. We

therefore reject Macy's contention.

14

C. With respect to the tort causes of action, plaintiffs

maintain that the District Court erred in granting summary

judgment. As noted above, the District Court dismissed

these claims because it had rejected the predicate upon

which each claim was based, i.e., that Macy's offered the

successful participant the role of "Annie" on Broadway. See

Pacitti, 1998 WL 512938, at *4. Because we conclude that

the contract reasonably may be interpreted to make such

an offer, we reverse on these claims as well and remand for

further proceedings.

III.

We now turn to plaintiffs' contention that the District

Court abused its discretion by limiting the scope of discovery.8

Specifically, plaintiffs argue that the District Court's

discovery order precluded them from uncovering facts

relevant to their fraudulent misrepresentation claims.

Macy's asserts that review of this issue is improper and, in

the alternative, that the District Court's order was a proper

exercise of discretion. We conclude that review is

appropriate and that the District Court abused its

discretion.

A. As a preliminary matter, we must determine whether

we have jurisdiction to review the discovery order. Macy's

argues that we lack jurisdiction because plaintiffs' notice of

appeal does not indicate that they are appealing the

discovery order. In their notice of appeal, plaintiffs specify

only the District Court's order of August 19, 1998, granting

summary judgment for Macy's. See App. at 235a.9 We

_________________________________________________________________

8. Citing Arnold Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564,

568 (3d Cir. 1986), and Mannington Mills, Inc. v. Congoleum Indus., Inc.,

610 F.2d 1059, 1073 (3d Cir. 1979), plaintiffs also argue that they were

not given sufficient opportunity to conduct discovery to withstand Macy's

motion for summary judgment and that therefore reversal of the

summary judgment order is required. In response, Macy's contends that

because plaintiffs failed to file a Rule 56(f) motion, they have not

preserved this issue for appeal. Because we are reversing on the breach

of contract claim, we need not address this issue.

9. The notice of appeal provides, in full:

15

conclude that plaintiffs' notice of appeal from the District

Court's final judgment is sufficient to support the Court's

earlier discovery order.

Federal Rule of Appellate Procedure 3(c) states that the

notice of appeal must "designate the judgment, order or

part thereof appealed from." Fed. R. App. P. 3(c). However,

we liberally construe the requirements of Rule 3(c). See

Drinkwater v. Union Carbide Corp., 904 F.2d 853, 858 (3d

Cir. 1990); Williams v. Guzzardi, 875 F.2d 46, 49-50 (3d

Cir. 1989). Thus, we have stated:

[W]hen an appellant gives notice that he is appealing

from a final order, failing to refer specifically to earlier

orders disposing of other claims or other parties does

not preclude us from reviewing those orders.

Shea v. Smith, 966 F.2d 127, 129 (3d Cir. 1992) (citing

Murray v. Commercial Union Ins. Co., 782 F.2d 432, 434 (3d

Cir. 1986)). And we have explained: "[S]ince . . . only a final

judgment or order is appealable, the appeal from afinal

judgment draws in question all prior non-final orders and

rulings." See Drinkwater, 904 F.2d at 858 (exercising

jurisdiction over unspecified order because finality doctrine

barred plaintiff from appealing that order until after the

entry of final judgment) (citing Elfman Motors, Inc. v.

Chrysler Corp., 567 F.2d 1252, 1253 (3d Cir. 1977) (per

curiam)); see also Polonski v. Trump Taj Mahal Assocs., 137

F.3d 139, 144 (3d Cir.), cert. denied, 119 S. Ct. 66 (1998)

("[Liberal] treatment is particularly appropriate where the

order appealed is discretionary and relates back to the

judgment sought to be reviewed."); Tabron v. Grace, 6 F.3d

_________________________________________________________________

Notice is hereby given that Joanna Pacitti, a minor, by Joseph

Pacitti and Stella Pacitti, her parents and guardians, plaintiffs

in the

above-named case, hereby appeal to the United States Court of

Appeal[s] for the Third Circuit from an order granting summary

judgment in favor of defendant Macy's and Macy's East and against

plaintiffs which dismissed the action as to defendant Macy's and

Macy's East. The said Order hereby appealed from was entered in

this action on the 19th day of August, 1998.

App. at 235a.

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147, 153 n.2 (3d Cir. 1993) ("[W]e construe notices of

appeal liberally as covering unspecified prior orders if they

are related to the specified order that was appealed from.");

Wright, Miller & Cooper, Federal Practice & Procedure,

Jurisdiction 3d S 3949.4 ("[A] notice of appeal that names

the final judgment is sufficient to support review of all

earlier orders that merge in the final judgment under the

general rule that appeal from a final judgment supports

review of all earlier interlocutory orders.").

We have reviewed orders not specified in the notice of

appeal where: (1) there is a connection between the

specified and unspecified order, (2) the intention to appeal

the unspecified order is apparent, and (3) the opposing

party is not prejudiced and has a full opportunity to brief

the issues. See Polonski, 137 F.3d at 144 (exercising

jurisdiction over order granting attorney's fees even though

notice of appeal specified only the order granting summary

judgment); Tabron, 6 F.3d at 153 n.2 (reviewing order

denying request for counsel even though notice of appeal

specified only the order granting summary judgment).

Review is appropriate here. The discovery order is

sufficiently related to the order granting summary

judgment. The final judgment rule barred plaintiffs from

appealing the discovery order until the District Court

granted Macy's motion for summary judgment. Plaintiffs'

notice of appeal from the final judgment, therefore, brought

up for review the earlier interlocutory discovery order. Cf.

Drinkwater, 904 F.2d at 858; Polonski, 137 F.3d at 144;

Tabron, 6 F.3d at 153 n.2; Wright, Miller & Cooper, Federal

Practice & Procedure, Jurisdiction 3d S 3949.4. Moreover,

Macy's had notice of plaintiffs' intent to appeal the

discovery order since plaintiffs sought review of the entire

judgment and argued the merits of the discovery order in

their opening appellate brief. See Polonski, 137 F.3d at 144

(stating that "the appellate proceedings clearly manifest an

intent to appeal"); see also Canady v. Crestar Mortgage

Corp., 109 F.3d 969, 974 (4th Cir. 1997) (noting that

arguing merits of issue in opening appellate brief puts

appellee on notice as to that issue). And finally, we discern

no prejudice to Macy's. Accordingly, we have jurisdiction.

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B. Having found that we have jurisdiction to review this

issue, we must next determine whether the District Court

abused its discretion in limiting discovery to "what

promises, if any, were made by defendant prior to and at

the final audition . . . in New York City that the person

selected at that audition would appear in the role as

Annie." App. at 38a. Plaintiffs contend that the District

Court abused its discretion by unduly limiting discovery to

preclude them from obtaining information relevant to their

fraudulent misrepresentation claims. We review the District

Court's discovery order for abuse of discretion. See Arnold

Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564,

568 (3d Cir. 1986).

The Federal Rules of Civil Procedure provide, in pertinent

part:

Parties may obtain discovery regarding any matter, not

privileged, which is relevant to the subject matter

involved in the pending action, whether it relates to the

claim or defense of the party seeking discovery or to

the claim or defense of any other party. . . . The

information sought need not be admissible at the trial

if the information sought appears reasonably

calculated to lead to the discovery of admissible

evidence.

Fed. R. Civ. P. 26(b)(1). It is well recognized that the federal

rules allow broad and liberal discovery. See In re Madden,

151 F.3d 125, 128 (3d Cir. 1998) ("Pretrial discovery is . . .

`accorded a broad and liberal treatment.' ") (citing Hickman

v. Taylor, 329 U.S. 495, 507 (1947)); see also Wright, Miller

& Marcus, Federal Practice & Procedure, Civil 2d S 2007

("The rule does allow broad scope to discovery and this has

been well recognized by the courts.").

To succeed on a claim for fraudulent misrepresentation

under Pennsylvania law, plaintiffs must establish the

following elements: (1) a misrepresentation, (2) a fraudulent

utterance, (3) an intention to induce action on the part of

the recipient, (4) a justifiable reliance by the recipient upon

the misrepresentation, and (5) damage to the recipient as a

proximate result. See Banks v. Jerome Taylor & Assocs.,

700 A.2d 1329, 1333 (Pa. Super. Ct. 1997). To prove these

18

elements, plaintiffs must demonstrate that Macy's

fraudulently misrepresented that the successful participant

would perform as "Annie" on Broadway, that it did so with

the intent to induce participation in the Search, and that

Joanna relied to her detriment upon the misrepresentation.

Plaintiffs seek production of the following: (1) Macy's

communications with, and relationship to, the producers

regarding the terms of the contract that the producers

intended to offer the successful contestant and (2) the

pecuniary benefit Macy's received as a result of the Search.

See Appellants' Br. at 12, 24. This information could shed

light on Macy's knowledge that it could not offer a

Broadway opening and its motives for failing to limit the

offer accordingly. Thus, we conclude that the discovery

sought here is directly relevant to the subject matter of this

dispute.

We also find it noteworthy that Macy's submitted its

contract with the producers in support of summary

judgment. As previously noted, the federal rules permit

discovery of, among other things, "any matter, not

privileged, which is relevant to the subject matter involved

in the pending action, whether it relates to the claim or

defense of the party seeking discovery or to the claim or

defense of any other party . . . ." Fed. R. Civ. P. 26(b)(1)

(emphasis added).

Macy's asserts that the only relevant representations are

"those to which plaintiffs were . . . privy" and "upon which

plaintiffs could have reasonably relied." Appellee's Br. at 34.

This "what they don't know can't hurt them" argument is

unconvincing. The fact that plaintiffs were not privy to the

information that Macy's possessed when Joanna relied on

its representations and participated in the Search forms the

very basis of plaintiffs' fraudulent misrepresentation claims.10

_________________________________________________________________

10. Plaintiffs also argue that the District Court erred in limiting the

number of depositions. In light of our disposition here, the District

Court

on remand can reconsider whether additional depositions are necessary

to effectuate plaintiffs' discovery needs with respect to their fraudulent

misrepresentation claims. Only if one of the factors in Federal Rules of

Civil Procedure 26(b)(2) is present should the Court limit the number of

depositions. See Fed. R. Civ. P. 26(b)(2) (setting forth situations in

which

courts may limit the number of depositions).

19

Accordingly, we conclude that the District Court erred in

limiting discovery.

IV.

For the reasons discussed above, we reverse the grant of

summary judgment on all claims and remand for further

proceedings in accordance with this opinion. We also

reverse and remand for plaintiffs to conduct discovery

consistent with this opinion.

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WILLIAM STAFFORD, Senior District Judge, dissenting.

I cannot agree that the district judge erred in granting

summary judgment in favor of Macy's. Macy's offered

Joanna Pacitti the opportunity of starring in the 20th

Anniversary Broadway production and national tour of

"Annie." Joanna Pacitti received that opportunity. She

auditioned for the part of Annie; she was selected by the

show's producers to play the part of Annie; and she, in fact,

played the part of Annie, performing in over one hundred

performances in six cities during the production's national

tour. She did not, however, appear on Broadway because

the producers decided to replace her before the Broadway

opening.

The district court concluded, and I agree, that Joanna

Pacitti received the benefit of her bargain with Macy's.

Because I do not believe that her contract with Macy's was

subject to the interpretation urged by Plaintiffs, I must

respectfully dissent.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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