Petition — Arnold Industries, Inc. v. Stickler

8 2 - 1 9 59 Office-Supreme Court U.S.

rites D

No. MAY 31 993

ALEXEI vas,

In the Supreme Court of the United States

October Term, 1982

ARNOLD INDUSTRIES, INC., and

GEORGE BLACKSTONE,

Petitioners,

VS.

ARTHUR STICKLER,

Respondent.

PETITION FOR WRIT OF CERTIORARI

To the United States Court of Appeals

For the Tenth Circuit

Cary RopMAN Cooper, Counsel of Record

Bruce A. CRAMER

T. Scotr JOHNSTON

STEPHEN M. DANE

CoopEeR, STRAUB, WALINSKI &

CRAMER

900 Adams Street

Toledo, Ohio 43624

(419) 241-1200

EpwIn S. KAHN

KELLY, HAGLUND, GARNSEY & KAHN

300 Blake Street Building

1441 Eighteenth Street

Denver, Colorado 80202

(303) 296-9412

Counsel for Petitioners

THE GATES LEGAL PUBLISHING CO., CLEVELAND, OHIO—TEL. (216) 621-6647

QUESTIONS PRESENTED |

1. Whether a Notice of Appeal Filed Prior to the Entry of

a Nunc Pro Tunc Rule 54(b) Certification is Effective to

Vest Jurisdiction in the Court of Appeals.

2. Whether a Rule 54(b) Certification is Necessary When

All Non-Adjudicated Claims Have Been Stayed In-

definitely by Statute.

3. Whether the “Exceptional Circumstances” Doctrine of

Harris Truck Lines, Inc. v. Cherry Meat Packers, 371

U.S. 215 (1962), and Thompson v. Immigration and

Naturalization Service, 375 U.S. 384 (1964) Should Have

Been Applied in This Case.

II

LIST OF PARTIES TO PROCEEDINGS BELOW

AND RULE 28.1 STATEMENT

ARTHUR STICKLER: Plaintiff-Appellee

ARNOLD INDUSTRIES, INC.,

and

GEORGE BLACKSTONE: Defendants-Appellants

Arnold Industries, Inc., and George Blackstone are the

Petitioners herein; Arthur Stickler is the Respondent.

Arnold Industries, Inc. has no parent company and

owns no subsidiary companies.

TABLE OF CONTENTS

Questions Presented .......-...-----0-+scscee--sssseeceeseeneesesetenensnenenees

List of Parties to Proceedings Below and Rule 28.1

EES Te REL TA SEIS EASE IE ORC

Ce ecclsiseiioseepmeveneprareonnenammespeaims

Coprirnicrns Brel W nnn annnnnnennnmennsonenwcneensnnvenenscnnenssocene

i ccesemenceeerceeneencemenninetnmenenies

aia ceteneemesepremenecpenennenen

OS Oe Te re inrenececrererenrmne

Reasons for Granting the Wit ...............-..-....-c-scesseeeseeeees oe

6 SSS ELE SA SEIS SEE NEES SVEN TSE TT

Appendix:

Opinion of the Court of Appeals for the Tenth Cir-

cuit (October 22, 1982) .............. edie

Judgment of the United States District Court

eee Se eee pee

Order of the United States District Court (June

Oy. FE eee ;

Order of the United States District Court (No-

vember 23, 1982)

Order of ti.e United States Court of Appeals for

the Tenth Circuit Denying Petition for Rehear-

ing En Banc (March 4, 1983)

15

Al

A4

A6

A8

Al0

IV

TABLE OF AUTHORITIES

Cases

A.O. Smith Corp. v. Sims Consolidated Ltd., 647 F.2d

io Bg a Ty) 0 OSE ieee sees omenmcosarmoiec aoe 8, 11,12

Angel v. Bullington, 330 U.S. 183 (1947) ......................-- 4

Anderson v. Allstate Insurance Co., 630 F.2d 677 (9th

I a a wseceenenneseetecnerieenmneniontn 12

Arthur Andersen & Co. v. Finesilver, 546 F.2d 338 (10th

Cir. 1976), cert. denied, 429 U.S. 1096 (1977) .......... 7-8

Bankers Trust Company v. Mallis, 435 U.S. 381 (1978) 10

Brobst v. Brobst, 69 U.S. (2 Wall.) 96 (1864) ................ 10

Bush v. United Benefit Fire Insurance Co., 311 F.2d

ee ee 7

Cochran v. Birkel, 651 F.2d 1219 (6th Cir. 1981),

cert. denied, 454 U.S. 1152 (1982) .......... i alenesees 7

Cold Metal Process Co. v. United Engineering & Foun-

Ne eB Fr Re CI ences entrees +

Curtiss-Wright Corp. v. General Electric Co., 446 U.S.

or ssiiinteeneeitemc nent 8

Dawson v. Chyler Corp., 630 F.2d 950 (3d Cir. 1980),

core. denies, 450 US. S68 (7901) 12

Dickinson v. Petroleum Conversion Corp., 338 U.S. 507

a eerie 9

District 65, Distributive Processing & Office Workers

Union v. McKague, 216 F.2d 153 (3d Cir. 1954) ...... 7,8

Federal Trade Commission v. Minneapolis-Honeywell

Regulator Co., 344 U.S. 206 (1952) ...............-...-0-c-ceceees 4

Frankfort Oil Co. v. Snakard, 279 F.2d 436 (10th Cir.),

cert. denied, 364 U.S. 920 (1960) ..............................-- 12

Vv

Griggs v. Provident Consumer Discount Co., 103 S. Ct.

a 4

Harris Truck Lines, Inc. v. Cherry Meat Packers, 371

Or en 13, 14

Hodgson v. Mahoney, 460 F.2d 326 (1st Cir.), cert.

eee, Se ee Pee 972) 7

Kaufman & Ruderman, Inc. v. Cohn, 177 F.2d 849 (2d

i 6

Lemke v. United States, 346 U.S. 325 (1953) -............... 12

Leonhard v. United States, 633 F.2d 599 (2d Cir.

1980), cert. denied, 451 U.S. 908 (1981) ww... 7, 12

Local P-171 Amalgamated Meat Cutters v. Thompson

Farms Co., 642 F.2d 1065 (7th Cir. 1981) ........ 5, 7, 8, 15

Lytel v. Commissioners of Election, 541 F.2d 421 (4th

Cir. 1976), cert. denied, 438 U.S. 904 (1978) ............ 4

McLaughlin v. City of LaGrange, 662 F.2d 1385 (11th

Cir. 1981), cert. denied, 102 S. Ct. 2249 (1982) ...... 12

Morris v. Uhl & Lopez Engineers, Inc., 442 F.2d 1247

SO ee 12

Needham v. White Laboratories, Inc., 102 S. Ct. 427

ETS SSE DE Ree cee Ge aro CUR CA 11, 14

Ruby v. Secretary of the United States Navy, 365 F.2d

385 (9th Cir. 1966) (en banc), cert. denied, 386 U.S.

ee a 7

Sears, Roebuck & Co. v. Mackey, 351 U.S. 427 (1956) .... 8-9

Shepherd v. Pepper, 133 U.S. 626 (1890) 0... 10

Slicer v. Bank of Pittsburg, 57 U.S. (16 How.) 571

¢ ) ieee ee tess deci ecces aes 9

Sutter v. Groen, 687 F.2d 197 (7th Cir. 1982) 6, 12, 15

Thompson v. Immigration and Naturalization Service,

ee ec 13, 14

Tilden Financial Corp. v. Palo Tire Service, Inc., 596

wae Ore (ee Oe I 5, 7, 8, 12, 15

VI

Vale v. Bonnett, 191 F.2d 334 (D.C. Cir. 1951) ........ 6

Wheeler v. American Home Products Corp., 582 F.2d

or eee oe tee 10, 11, 12, 13

Williams v. Bernhardt Bros. Tugboat Service, Inc., 357

Pa Cee ee 8. 7,8

United States v. Hitchmon, 602 F.2d 689 (5th Cir.

ey es 7

United States v. Indrelunas, 411 U.S. 216 (1973) ........ 10

United States v. Vigil, 77 U.S. (10 Wall.) 423 (1870) 10

Statutes and Rules >

ae ee et Oe Oe 13

SD a 2, 3, 13

i Ul. ee YA se MHS nt REEDS needs 13

i Re OER 2

Fed. R. App. P

oe 4, 5,6, 13,15

ate 2... sie esses a ee ns 11

Ss gS Rial Seer LEU Si SoM nee saen ath ences ane cetre 11

ee 10

i le +

Fed. R. Civ. P.:

6(b) aeons 4

ee? 66 Ms passim

ee 5, 10, 11, 15

te)... “ 4

AE IRR Wop wo Sonata iter en 5, 10, 11, 15

VII

Texts

2 COLLIER ON BANKRUPTCY {362.04 (15th ed. 1982) ........ 13

6 J. Moore, W. Taccart & J. WICKER, Moore’s FEDERAL

PRACTICE {54.41[4] (2d ed. 1982) ..0..... 6,7

6A Moore’s FEDERAL PRACTICE {58.08 at 58-306 ............ 10, 11

9 Moore’s FEDERAL PRACTICE {203.11 at 3-51 20... 7,8

No.

In the Supreme Court of the United States

October Term, 1982

ARNOLD INDUSTRIES, INC., and

GEORGE BLACKSTONE,

Petitioners,

VS.

ARTHUR STICKLER,

Respondent.

PETITION FOR WRIT OF CERTIORARI

To the United States Court of Appeals

For the Tenth Circuit

Petitioners Arnold Industries, Inc. and George Black-

stone respectfully pray that a writ of certiorari issue to

review the judgment and opinion of the United States

Court of Appeals for the Tenth Circuit entered in this pro-

ceeding on October 22, 1982.

OPINIONS BELOW

The opinion of the United States Court of Appeals

for the Tenth Circuit is unreported and is reprinted at

Al of the Appendix to this petition. The judgment of

the United States District Court for the District of Colorado

dated March 2, 1982, is unreported and is reprinted at

A4 of the Appendix. The June 17, 1982 Order of the

District Court is unreported and is reprinted at A6 of

the Appendix.

JURISDICTION

The judgment sought to be reviewed by this petition

was rendered and entered on October 22, 1982. A timely

petition for rehearing was filed in the court below and was

denied on March 4, 1983. Al10. This petition for cer-

tiorari is filed within ninety days of the denial of the peti-

tion for rehearing. The Court’s jurisdiction is invoked

pursuant to 28 U.S.C. §1254(1).

STATUTES INVOLVED

11 U.S.C. §362 provides in relevant part:

(a) Except as provided in subsection (b) of this

section, a petition filed under sections 301, 302, or 303 of

this title operates as a stay, applicable to all entities,

of—

(1) the commencement or continuation, in-

cluding the issuance or employment of process, of a

judicial, administrative, or other proceeding against

the debtor that was or could have been commenced

before the commencement of the case under this

title, or to recover a claim against the debtor that

arose before the commencement of the case under

this title;

STATEMENT OF THE CASE

This is a damage action for breach of contract filed

in the United States District Court for the District of

Colorado. Jurisdiction is based upon diversity of citizen-

ship, 28 U.S.C. §1332. Following a trial by jury, judg-

ment was entered on March 2, 1982 in favor of plaintiff-

respondent Arthur Stickler against defendant Taos Equip-

3

ment Manufacturers, Inc. in the amount of $4,100.00 actual

damages and $250,000.00 exemplary damages and against

defendants-petitioners Arnold Industries, Inc. and George

Blackstone, jointly and severally, in the amount of

$483,350.00 actual damages and $800,000.00 exemplary

damages. A4-A5.

The judgment of March 2, 1982 did not dispose of

plaintiff’s claims against defendants David Kimball and

Larry Krogness because each of them had earlier filed

personal bankruptcy petitions which stayed the action

against them. See 11 U.S.C. §362. The district court did

not add to the March 2 judgment a Rule 54(b) certifica-

tion. Petitioners’ timely post-trial motions for judgment

n.o.v., for a new trial, and to amend the judgment were

all denied on April 19, 1982. On April 22, 1982, peti-

tioners filed a notice of appeal from the judgment of

March 2.

By letter dated June 4, 1982, the United States Court

of Appeals for the Tenth Circuit advised petitioners that

it would consider summary dismissal of the appeal for

lack of jurisdiction. In response to that letter the parties

filed a joint motion in the district court seeking a Rule

54(b) certification. On June 17, 1982 the district court

made such a certification, specifically designating the cer-

tification to be effective and the judgment final on March

2, 1982 nunc pro tunc. A6. The Tenth Circuit was ad-

vised of the action taken by the parties and the nunc

pro tunc order of the district court. No new notice of

appeal was filed.

On October 22, 1982, the Tenth Circuit issued a per

curiam decision dismissing the appeal on the ground that

the April 22 notice of appeal was premature. Al. The

court of appeals ruled that a premature notice of appeal

cannot be cured by a subsequent nunc pro tunc Rule 54(b)

certification. The court further held that the nunc pro

4

ture 54(b) certification entered June 17 merged with the

prior order of March 2, 1982 to become a final judgment

as of June 17.

Petitioners timely filed a Petition for Rehearing and

Suggestion for Rehearing En Banc, which was denied on

March 4, 1983. A10.?

1. On November 5 1982, petitioners filed in the district

court a Motion for Relief from Judgment pursuant to Fed. R.

Civ. P. 60(b). On November 23, while the Petition for Re-

hearing was pending in the Tenth Circuit, the district court

granted the motion, vacated the Judgment of March 2 and the

Order of June 17, and entered a new judgment against peti-

tioners containing a Rule 54(b) certification. A8. Although a

timely notice of appeal was filed thereafter by petitioners, re-

spondent has filed a cross-appeal contesting the district court’s

jurisdiction to grant the 60(b) motion and challenging the No-

vember 23 judgment as an improper extension of the time for

filing a notice of appeal. Cf. Fed. R. App. P. 4(a), 26(b); Fed.

R. Civ. P. 6(b); Griggs v. Provident Consumer Discount Co., 103

S. Ct. 400, 403-04 n.3 (1982).

These proceedings in the courts below should not pose a

barrier to the granting of this petition. The issue of whether

petitioners have filed a timely appeal for review of the merits

of the judgment is not yet moot; that dispute remains a “live”

one. Nor does the fact that the Tenth Circuit has not yet

ruled on the appropriateness of the district court’s 60(b) de-

cision bar consideration of the issues raised in this petition. In

Cold Metal Process Co. v. United Engineering & Foundry Co.,

351 U.S. 445 (1956), the Court granted certiorari to consider

the effect of a 54(b) certification on the court of appeals’ ju-

risdiction, even though the court of appeals had addressed the

issue, had accepted jurisdiction, and was continuing to consider

the case on the merits. See id. at 450.

In addition, a failure to petition for certiorari at this stage

may be prejudicial in any future proceedings, so petitioners are

virtually forced to petition now. See Federal Trade Commis-

sion v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206

(1952); Angel v. Bullington, 330 U.S. 183 (1947); Lytle v. Com-

missioners of Election, 541 F.2d 421, 425 (4th Cir. 1976), cert.

denied, 438 U.S. 904 (1978).

If the Court is inclined to grant the petition but is con-

cerned about the effect of these lower court proceedings, peti-

tioners request that it defer consideration until after the Tenth

Circuit decides whether to address the merits of the appeal

below. If the Tenth Circuit does reach the merits of the appeal,

petitioners will voluntarily dismiss this petition. If the court

of appeals refuses to accept jurisdiction to hear the merits, this

petition should then be granted.

REASONS FOR GRANTING THE WRIT

A. Introduction.

This case presents the complex and heretofore un-

resolved interplay between nunc pro tune Rule 54(b) cer-

tifications, notices of appeal filed prior to the rendition

of such certifications, and recently amended Rule 4(a) of

the Federal Rules of Appellate Procedure.

The effect of nunc pro tunc 54(b) certifications on

appeals from technically non-final judgments, a question

never addressed by this Court, has had a roller coaster

history in the circuit courts, leaving judicial pronounce-

ments and expert commentaries on the issue hopelessly

confused. The decision of the panel below is in direct con-

flict with the Seventh Circuit’s decision in Local P-171

Amalgamated Meat Cutters v. Thompson Farms Co., 642

F.2d 1065 (7th Cir. 1981), which recognized the validity of

nunc pro tune 54(b) certifications and their utility for

perfecting appeals from technically non-final orders. The

Tenth Circuit’s refusal to give effect to the district court’s

express nunc pro tunc intention also (1) conflicts with every

Supreme Court interpretation of the purposes supporting

Rule 54(b) and the role the district court is expected to

perform in execution of the Rule, (2) ignores well-estab-

lished principles regarding nunc pro tunc orders generally,

and (3) fails to heed the clear prerequisites of finality

delineated in Rules 58 and 79(a) of the Federal Rules of

Civil Procedure.

In addition, by refusing to give effect to the notice

of appeal filed April 22, 1982, the Tenth Circuit’s decision

below is in direct conflict with the decisions of the Third

Circuit in Tilden Financial Corp. v. Palo Tire Service,

Inc., 596 F.2d 604 (3d Cir. 1979), and the Seventh Circuit

6

in Sutter v. Groen, 687 F.2d 197 (7th Cir. 1982). The

decision is also in apparent conflict with the language and

intent of the 1979 amendments to Fed. R. App. P. 4(a),

designed to avoid the loss of the right to appeal by filing

a notice of appeal prematurely.

A definitive resolution by the Supreme Court of the

interrelated procedural questions presented by this peti-

tion is essential to resolve the confused relationship be-

tween nunc pro tunc 54(b) certifications and pending ap-

peals and to resolve the conflicting decisions and con-

ceptual inconsistencies which have arisen among the cir-

cuits.

B. The Relationship Between Notices of Appeal and

Subsequent Nunc Pro Tunc Certifications Is

Hopelessly Confused and the Circuits Are in Con-

flict.

The incipient use of nunc pro tunc 54(b) certifications

arose shortly after Rule 54(b) was amended in 1946 to

require an “express determination that there is no just

reason for delay” and an “express direction for the entry

of judgment” before a judgment on less than all the

claims presented in an action could be appealed. Initially,

appeals from partial judgments lacking such certifications

were permitted to be cured by obtaining nunc pro tunc

certifications, as was done in this case. See Vale v.

Bonnett, 191 F.2d 334 (D.C. Cir. 1951); Kaufman & Ruder-

man, Inc. v. Cohn, 177 F.2d 849 (2d Cir. 1949); 6 J. Moore,

W. Taccart & J. WicKER, Moore’s FEpERAL PRACTICE

954.41[4] (2d ed. 1982) (hereinafter cited as “Moore’s

FEDERAL PRACTICE”).

Subsequent decisions by other circuits rejected this

approach, however, apparently on the ground that the

filing of a notice of appeal, and the subsequent pendency

7

of that appeal, automatically divested the district court of

jurisdiction to enter any certification, nunc pro tunc or

otherwise. See, e.g., Williams v. Bernhardt Bros. Tugboat

Service, Inc., 357 F.2d 883 (7th Cir. 1966); Bush v. United

Benefit Fire Insurance Co., 311 F.2d 893 (5th Cir. 1963);

District 65, Distributive Processing & Office Workers Union

v. McKague, 216 F.2d 153 (3d Cir. 1954); 6 Moore’s FEDERAL

PracTIce §54.41[4].

Yet more recent judicial consideration of the esoteric

doctrine of “jurisdictional shift” has raised doubts as to

the conceptual validity of ignoring nunc pro tunc 54(b)

certifications. A split of authority has apparently developed

in the circuits as to the effect on a district court’s juris-

diction of the filing of a notice of appeal seeking review

of a technically non-appealable order, making the question

of the effect on jurisdiction of a notice of appeal from

a partial judgment lacking a Rule 54(b) certification

“clouded” according to the experts. See 9 Moore’s FEDERAL

PRACTICE {203.11 at 3-51. The better view, for persuasive

reasons outlined in Moore’s FEDERAL PRACTICE at {203.11,

has been adopted by a majority of the courts of appeals

and holds that an appeal taken from a non-final judgment

does not divest the district court of jurisdiction to take

further action with respect to that judgment. See Hodgson

v. Mahoney, 460 F.2d 326 (1st Cir.), cert. denied, 409 U.S.

1039 (1972); Leonhard v. United States, 633 F.2d 599 (2d

Cir. 1980), cert. denied, 451 U.S. 908 (1981); Tilden Fi-

nancial Corp. v. Palo Tire Service, Inc., 596 F.2d 604 (3d

Cir. 1979); United States v. Hitchmon, 602 F.2d 689 (5th

Cir. 1979) (en banc); Cochran v. Birkel, 651 F.2d 1219

(6th Cir. 1981), cert. denied, 454 U.S. 1152 (1982); Local

P-171 Amalgamated Meat Cutters v. Thompson Farms Co.,

642 F.2d 1065 (7th Cir. 1981); Ruby v. Secretary of the

United States Navy, 365 F.2d 385 (9th Cir. 1966) (en banc),

cert. denied, 386 U.S. 1011 (1967); Arthur Andersen &

8

Co. v. Finesilver, 546 F.2d 338 (10th Cir. 1976), cert.

denied, 429 U.S. 1096 (1977).

The obvious conflict between this general rule and

the approach utilized by the Tenth Circuit below in the

context of a nunc pro tunc 54(b) certification, a narrow

approach which has apparently been abandoned even by

those circuits which initially adopted it, compare Tilden

Financial Corp. v. Palo Tire Service, Inc. (3d Cir. 1979),

supra, with District 65, Distributive, Processing & Office

Workers Union v. McKague (3d Cir. 1954), supra; Local

P-171 Amalgamated Meat Cutters v. Thompson Farms Co.

(7th Cir. 1981), supra, with Williams v. Bernhardt Bros.

Tugboat Service, Inc. (7th Cir. 1966), supra, is noted in

footnote 35 of 9 Moore’s FEDERAL PRAcTIcE {203.11 but is

left unresolved by that treatise’s authors.

The net effect is a confusing conflict between the

circuits as to the effect to be given nunc pro tunc 54(b)

certifications. In particular, the Tenth Circuit decision be-

low squarely corflicts with the Seventh Circuit’s decision

in Local P-171, supra, which gave effect to such a nunc

pro tunc certification. See also A.O. Smith Corp. v. Sims

Consolidated Ltd., 647 F.2d 118, 120 (10th Cir. 1981) (ex-

pressly rejecting Local P-171). The Court should grant this

petition to resolve this conflict.

C. The Tenth Circuit’s Decision Conflicts With the

Purposes of Rule 54(b) As Articulated by This

' Court.

This Court has held that the district court’s intention

is paramount in the Rule 54fb) context. It is clear that

“the district court [is] to determine the ‘appropriate time’

when each final decision in a multiple claims action is

ready for appeal.” Curtiss-Wright Corp. v. General Electric

Co., 446 U.S. 1, 8 (1980) (emphasis added); Sears, Roebuck

9

& Co. v. Mackey, 351 U.S. 427, 437 (1956). Although the

district court’s decision as to when a 54(b) situation is

ripe for appeal is reviewable upon an abuse of discretion

standard, the Tenth Circuit did not find here that the

district court abused its discretion.

The drafters of Federal Rule 54(b) envisioned that the

parties in multi-party litigation would be able to rely on

the express direction from the district court to remove any

uncertainty regarding the appealability of a final judgment

which disposes of fewer than all parties or claims involved

in the case. The requirement in. Rule 54(b) that the

district court make an “express determination” and “ex-

press direction” for the entry of judgment eliminates any

doubt as to whether an immediate appeal may be sought

from a judgment disposing of fewer than all of the claims

or parties in a litigation. Dickinson v. Petroleum Con-

version Corp., 338 U.S. 507, 512 (1950). When a Rule 54(b)

order is interpreted by a court of appeals in a way that

conflicts with the actual intention of the district court,

the policy behind Rule 54(b) of alleviating ambiguity is

frustrated and substantial rights of the parties are impaired.

If the Tenth Circuit had given effect to the district

court’s unequivocal intentions, the merits of this case

would already have been argued and decided by the court

of appeals, the subsequent activity in the district court

would have been avoided, and this petition would have

been unnecessary. The interplay between nunc pro tunc

54(b) certifications and previously filed notices of appeal

is extremely important and requires immediate attention

by this Court.”

2. District judges possess broad discretionary power to enter

orders or judgments nunc pro tunc. See, e.g., Slicer v. Bank of

Pittsburg, 57 U.S. (16 How.) 571, 579 (1853). Indeed, nunc

pro tunc entries are permissible when necessary to complete

(Continued on following page)

10

D. The Tenth Circuit’s Decision Ignores the Require-

ments of Rules 58 and 79.

By refusing to give effect to the district court’s nunc

pro tunc intention, the Tenth Circuit’s decision below is

confusing in another respect. Even if the district court’s

Rule 54(b) certification ‘merges with the prior order to

become a final judgment,” A3, it cannot be said to be

“final” on June 17 because no judgment entry under Rule

79(a) was made by the Clerk on that date and no “separate

document” meeting the Rule 58 specifications for a judg-

ment effective on that date appears of record. Fed. R. App.

P. 4(a) (6); see Bankers Trust Company v. Mallis, 435 U.S.

38] (1978); United States v. Indrelunas, 411 U.S. 216

(1973).

Although there exist here two documents which refer

to the Judgment of “March 2, 1982” and either of which

may satisfy the separate document requirement for the

finality of a judgment for that date, there is absolutely

nothing in either of them to indicate a judgment that was

to be effective or entered on June 17, 1982. Moreover, the

judgment from which petitioners appealed was entered un-

der Rule 79(a) on March 2, 1982. No judgment was en-

tered on June 17, 1982.

Footnote continued—

or perfect appeals. Shepherd v. Pepper, 133 U.S. 626 (1890);

United States v. Vigil, 77 U.S. (10 Wall.) 423 (1870); Brobst v.

Brobst, 69 U.S. (2 Wall.) 96 (1864). In particular, nunc pro tunc

orders are appropriate wher used to validate appeals which are

technically premature. Wheeler v. American Home Products

Corp., 582 F.2d 891, 893 (6th Cir. 1977); 6A Moore’s FEDERAL

PRACTICE 958.08 at 58-306 to -307.

By refusing without explanation to give effect to the district

court’s nunc pro tunc order, the court of appeals so far departed

from the accepted and usual course of practice as to call for the

exercise of this Court’s supervisory authority. This petition

should be granted to explain the applicability of these general

principles to nunc pro tunc 54(b) certifications.

11

Although it has been held that the Rule 58 require-

ment can be met by giving effect to a nunc pro tunc order,

see Wheeler v. American Home Products Corp., supra;

6A Moore’s FEDERAL PRACTICE {58.08 at 58-306, the Tenth

Circuit did not give effect to the district court’s nunc pro

nunc intention, and the requirements of Rules 58 and 79(a)

for a judgment and entry effective June 17, 1982 have not

been met. Because the decision below has ignored these

two requirements, the Court should grant this petition and

clarify the interrelationship between nunc pro tunc 54(b)

certifications and Rules 58 and 79(a).

E. The Court of Appeals Has Refused to Apply the

Express Language of Fed. R. App. P. 4(a)(2).

Even if it could properly ignore the district court’s

nunc pro tunc intention, the court of appeals’ decision

nevertheless conflicts with the express provisions of Fed.

R. App. P. 4(a) (2). The general rule, stated in subsection

4(a)(2), is that premature notices are effective to vest

jurisdiction in the court of appeals. “Rule 4(a)(2)...

extend[s] to civil cases the provisions of Rule 4(b), deal-

ing with criminal cases, designed to avoid the loss of the

right to appeal by filing the notice of appeal prematurely.”

Fed. R. App. P. 4 advisory committee note. The only ex-

ceptions to this general rule are listed in subsection

4(a) (4), all of which “destroy the finality of the judg-

ment”. Fed. R. App. P. 4 advisory committee note. See

also Needham v. White Laboratories, Inc., 102 S. Ct. 427,

428 (1981) (Rehnquist, J., dissenting from the denial of

certiorari). None of the 4(a) (4) exceptions involve the

rendition of Rule 54(b) certifications or motions therefor.

The panel below, apparently relying on A.O, Smith Corp.,

assumed without discussion that such motions fell within

4(a) (4), even though the requirements of 54(b) are no-

i2

where mentioned there and even though the 54(b) certifi-

cation does not destroy the finality of the judgment from

which the appeal is taken.

The decisions from other circuits on the issue of the

effectiveness of a notice of appeal filed prior to the entry

of a Rule 54(b) certification which lacks nunc pro tunc

effect are in conflict with the decision below and A.O.

Smith. In both Tilden Financial Corp. v. Palo Tire Service,

Inc., 596 F.2d 604, 606-07 (3d Cir. 1979), and Sutter v.

Groen, 687 F.2d 197, 199 (7th Cir. 1982), the courts of ap-

peals for the Third and Seventh Circuits held that they

were vested with jurisdiction to consider the appeals there-

in even though the notices of appeal in each were filed prior

to the Rule 54(b) certification. See also Lemke v. United

States, 346 U.S. 325 (1953) (in criminal appeal context,

notice of appeal filed prior to entry of judgment is effec-

tive); Leonhard v. United States, 633 F.2d 599, 611 (2d Cir.

1980) (premature notices of appeal become effective when

subsequent actions of the district court make final the order

or judgment from which an appeal is taken (citing cases) ),

cert. denied, 451 U.S. 908 (1981); Anderson v. Allstate In-

surance Co., 630 F.2d 677, 680-81 (9th Cir. 1980) (same);

Dawson v. Chrysler Corp., 630 F.2d 950, 955 n.4 (3d Cir.

1980) (following Tilden), cert. denied, 450 U.S. 959 (1981).

By contrast, the Eleventh Circuit ayparently has adopted

the approach utilized by the Tenth Circuit here. See Mc-

Laughlin v. City of LaGrange, 662 F.2d 1385, 1387 (11th Cir.

1981), cert. denied, 102 S. Ct. 2249 (1982). This petition

should be granted to resolve this conflict and to clarify how

3. Indeed, the Tenth Circuit itself has in the past given

effect to premature notices in the Rule 54(b) context. Morris

v. Uhl & Lopez Engineers, Inc., 442 F.2d 1247 (10th Cir. 1971);

Frankfort Oil Co. v. Snakard, 279 F.2d 436, 438 (10th Cir.),

cert. denied, 364 U.S. 920 (1960). The panels below and in

A.O. Smith neglected to distinguish or even cite these two intra-

circuit precedents.

13

notices of appeal filed before the grant of Rule 54(b) cer-

tifications are to be treated under Fed. R. App. P. 4(a).

F. The Judgment of March 2, Was a Final, Appeal-

able Judgment and No 54(b) Certification Was

Necessary.

Prior to trial defendants Kimball and Krogness filed

bankruptcy petitions under Chapter 7 of the Bankruptcy

Reform Act of 1978, 11 U.S.C. §101 et seq. listing plaintiff-

respondent Arthur Stickler as a creditor. By operation of

the automatic stay provision of that Act, 11 U.S.C. §362, no

further judicial proceedings against those defendants could

take place, see generally 2 CoLLIER ON BANKRUPTCY 9362.04

(15th ed. 1982), and the district court here stayed the pro-

ceedings as to the bankrupt defendants. Furthermore, de-

fendant Kimball was granted a bankruptcy discharge on

November 20, 1981, the effect of which was to enjoin per-

manently the continuation of the action as against him.

11 U.S.C. §524.

There remained no issues to be decided by the district

court. There would be no inconvenience or costs of piece-

meal review because the claims against Krogness and Kim-

ball might never be litigated. This petition should be

granted to clarify the relationship between 11 U.S.C. §362

and Fed. R. Civ. P. 54(b) and to correct the judgment be-

low.

G. The ‘Exceptional Circumstances’? Doctrine of

Harris Truck Lines, Inc. v. Cherry Meat Packers,

371 U.S. 215 (1962), and Thompson v. Immigra-

tion and Naturalization Service, 375 U.S. 384

(1964) Should Have Been Applied in This Case.

When a party takes an action which is technically erro-

neous but which, if properly done, would have served to

14

protect the right to appeal, and the district court concludes

that the act was in fact properly done, the doctrine of ex-

ceptional or unique circumstances permits the appeal to be

heard on the merits. Thompson v. Immigration and

Naturalization Service, 375 U.S. 384 (1964); Harris Truck

Lines, Inc. v. Cherry Meat Packers, 371 U.S. 215 (1962).

In order to invoke the Thompson exception, two pre-

requisites must be met: (1) the appellant must rely on a

statement by the district court and (2) he must perform

an act which, if timely done, would preserve his right to

appeal. Needham v. White Laboratories, Inc., 102 S. Ct.

427, 429 (1981) (Rehnquist, J., dissenting from the denial

of certiorari).

Both of these prerequisites have been met here. The

petitioners relied on the nunc pro tunc statement and in-

tention of the district court’s June 17, 1982 certification and

order, a statement and intention the court of appeals later

held the district court could not properly make or have. If

timely made, the district court’s 54(b) certification would

have preserved petitioners’ right to appeal. Indeed, each

separate act—the filing of the notice of appeal and the en-

try of the 54(b) certification—standing alone was timely;

the court of appeals held simply that the reversal in the

order of their occurrence destroyed the timeliness of both.

Under these circumstances, the policy considerations under-

lying Thompson and the federal rules of civil and appellate

procedure require that the Tenth Circuit’s judgment below

be vacated.

15

CONCLUSION

The Supreme Court should grant this petition for at

least six reasons:

1. The decision below squarely conflicts with the

Third Circuit’s decision in Tilden Financial Corp. v.

Palo Tire Services, Inc. and the Seventh Circuit’s de-

cisions in Local P-171 Amalgamated Meat Cutters v.

Thompson Farms Co. and Sutter v. Groen.

2. The decision below perpetuates the utter con-

fusion surrounding the interplay between Rule 54(b)

certifications, nunc pro tunc or otherwise, notices of

appeal filed before the entry of such certifications,

and recently amended Rule 4(a) of the Federal Rules

of Appellate Procedure.

3. The rationale upon which the decision below

is based conflicts with the letter and the spirit of

every decision of this Court construing the operation

of Rule 54(b) and has effected a result which is con-

trary to the purposes for which Rule 54(b) was

drafted.

4. The decision below violates those principles

recognized by this Court as governing the propriety

and effect of nunc pro tunc orders generally.

5. The Tenth Circuit’s decision ignores the ex-

press requirements of Rules 58 and 79(a) of the Fed-

eral Rules of Civil Procedure.

6. The Tenth Circuit has misinterpreted the in-

tention and effect of the 1979 amendments to Rule 4

of the Federal Rules of Appellate Procedure.

16

Review is necessary to resolve these conflicts, to clarify

the interplay between the rules of procedure involved in

this context so as to insure their uniform application, and

to reverse the clearly erroneous decision of the court

below.

Respectfully submitted,

Cary RopMAN Cooper, Counsel of Record

Bruce A. CRAMER

T. Scott JOHNSTON

STEPHEN M. DANE

Cooper, STRAUB, WALINSKI &

CRAMER

900 Adams Street

Toledo, Ohio 43624

(419) 241-1200

Epwin S. KAHN

KELLY, HAGLUND, GARNSEY & KAHN

300 Blake Street Building

1441 Eighteenth Street

Denver, Colorado 80202

(303) 296-9412

Counsel for Petitioners

Al

APPENDIX

OPINION OF THE COURT OF APPEALS

FOR THE TENTH CIRCUIT

(Filed October 22, 1982)

No. 82-1553

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

ARTHUR STICKLER,

Plaintiff-Appellee,

v.

ARNOLD INDUSTRIES, INC., an Ohio Corporation,

and GEORGE BLACKSTONE,

Defendants-Appellants,

TAOS EQUIPMENT MANUFACTURERS, INC., a

New Mexico Corporation, DAVID KIMBALL, LARRY

KROGNESS,

Defendants.

APPEAL FROM THE UNITED States District Court

For THE District oF CoLorapo

(D. C. No. 80-Z-419)

Submitted on the briefs pursuant to Tenth Circuit Rule 9:

Before Setu, Chief Judge, McKay and SEYMOUR,

Cireuit Judges.

PER CURIAM.

This three-judge panel has determined unanimously

that oral argument would not be of material assistance

in the determination of this appeal. See Fed.R.App.P.

34(a); Tenth Circuit R. 10(e). The cause is therefore

ordered submitted without oral argument.

This is an appeal from the judgment of the district

court awarding plaintiff actual and exemplary damages

for alleged breach of contract.

Following a trial by jury, judgment was entered on

March 2, 1982 in favor of plaintiff against defendant Taos

Equipment Manufacturers, Inc. in the amount of $4,140

actual damages and $250,000 exemplary damages and

against defendants Arnold Industries, Inc. and George

Blackstone, jointly and severally, in the amount of

$483,350 actual damages and $800,000 exemplary damages.

The order of March 2, 1982 did not dispose of the claims

against defendants Kimball and Krogness nor did it ex-

pressly direct entry of final judgment as to defendants

Taos Equipment Manufacturers, Arnold Industries and

George Blackstone, pursuant to Rule 54(b) of the

Fed.R.Civ.P. Defendants’ motion for judgment notwith-

standing the verdict, motion for new trial and motion

to amend judgment were denied on April 19, 1982. On

April 22, 1982, defendants Arnold Industries and George

Blackstone filed a notice of appeal.

This court advised the parties that it was considering

summary dismissal of the appeal for lack of appellate

jurisdiction and directed the parties to address that issue.

The parties immediately filed a joint motion in district

court seeking a Rule 54(b) determination. On June 17,

1982, the district court entered an order certifying the

prior judgment as a final judgment pursuant to Rule 54(b),

—

A3

nunc .pro tunc March 2, 1982. The parties then filed a

joint response in this appeal, requesting the court, as a

matter of equity, to permit perfection of the appeal sub-

sequent to the filing of the notice of appeal.

There is no question that this court lacked appellate

jurisdiction at the time the notice of appeal was filed.

Rule 54(b) provides that in cases involving multiple claims

or multiple parties, 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 not just reason for delay and upon an

express direction for the entry of judgment. Absent such

a determination, an order which adjudicates the rights

and liabilities of fewer than all the parties does not ter-

minate the action and is not final for purposes of appeal.

Golden Villa Spa, Inc. v. Health Industries, Inc., 549 F.2d

1363 (10th Cir. 1977).

In this circuit appellate jurisdiction must exist at the

time of filing the notice of appeal. Parties cannot cure

a jurisdictional default by subsequently obtaining a Rule

54(b) certification. A.O. Smith Corp. v. Sims Con-

solidated, Ltd., 647 F.2d 118 (10th Cir. 1981). The Rule

54(b) certification merges with the prior order to become

a final judgment, appealable only upon the timely filing

of a new notice of appeal. The notice of appeal filed April

22, 1982 was premature and no notice of appeal was filed

subsequent to the Rule 54(b) certification. Accordingly,

the appeal is dismissed for lack of jurisdiction.

APPEAL DISMISSED.

A4

JUDGMENT OF THE UNITED STATES

DISTRICT COURT

(Filed March 2, 1982)

Civil Action No. 80-Z-419

IN THE UNITED STATES DISTRICT COURT

For THE DIsTRICT oF COLORADO

ARTHUR STICKLER,

Plaintiff,

v.

ARNOLD INDUSTRIES, INC., an Ohio corporation,

GEORGE BLACKSTONE, and TAOS EQUIPMENT

MANUFACTURERS, INC., a New Mexico corporation,

Defendants.

JUDGMENT

This action came on for trial on February 23, 1982

before the Court and, through stipulation of counsel, a jury

of eight duly sworn to try the issues herein, the Honorable

Zita L. Weinshienk, Judge, presiding.

The trial proceeded to conclusion and the jury sub-

sequently returned with a verdict for the plaintiff, it is

hereby

ORDERED that judgment is entered for the plaintiff

and against defendant Taos Equipment Manufacturers,

Inc., in actual damages in the amount of $4,140.00 and ex-

emplary damages in the amount of $250,900.00 for a total

amount of $254,140.00, and it is

AS

FURTHER ORDERED that judgment is entered for the

plaintiff and against defendants Arnold Industries, Inc.,

and George Blackstone, in actual damages in the amount

of $483,350.00 and exemplary damages in the amount of

$800,000.00 for a total amount of $1,283,350.00, and it is

FURTHER ORDERED that said judgments are joint

and several and shall accrue interest at the legal rate as

provided by law, and it is

FURTHER ORDERED that plaintiff shall have his

costs upon the filing of a Bill of Costs with the Clerk of

this Court within ten (10) days of the entry of this judg-

ment.

DATED at Denver, Colorado this 2nd day of March,

1982.

FOR THE COURT:

JAMES R. MANSPEAKER, Clerk

By: /s/ STEPHEN P. EHRLICH

Chief Deputy Clerk

A6

ORDER OF THE UNITED STATES

DISTRICT COURT

(Filed June 17, 1982)

Civil Action No. 80-Z-419

IN THE UNITED STATES DISTRICT COURT

For THE DISTRICT OF COLORADO

ARTHUR STICKLER,

Plaintiff,

Vv.

ARNOLD INDUSTRIES, INC., an Ohio corporation;

GEORGE BLACKSTONE; TAOS EQUIPMENT MANU-

FACTURERS, INC., a New Mexico corporation; DAVID

KIMBALL; and LARRY KROGNESS,

Defendants.

ORDER

This matter is before the Court on the Joint Motion of

Plaintiff and Defendants Arnold Industries and George

Blackstone to enter Rule 54(b) Determination. It is

ORDERED that the Joint Motion of Plaintiff and De-

fendants Arnold Industries and George Blackstone to Enter

Rule 54(b) Determination is granted.

Because defendant David Kimball and defendant Larry

Krogness each filed a bankruptcy petition listing plaintiff

as a creditor, stay orders were in effect as to both said de-

fendants during the pendency of this lawsuit. For this

reason the Court finds that there was and is no just reason

for delay, and it is, therefore,

A7

FURTHER ORDERED that the Judgment of March

2, 1982, entered against defendants Arnold Industries, Inc.,

George Blackstone, and Taos Equipment Manufacturers,

Inc., is affirmed and is a final judgment pursuant to Fed.

R.Civ.P. 54(b), nunc pro tune March 2, 1982.

DATED at Denver, Colorado, this 17th day of June,

1982.

BY THE COURT:

/s/ Zita L. WEINSHIENK, Judge

United States District Court

ORDER OF THE UNITED STATES

DISTRICT COURT

(Filed November 23, 1982)

Civil Action No. 80-Z-419

IN THE UNITED STATES DISTRICT COURT

For THE DISTRICT OF COLORADO

ARTHUR STICKLER,

Plaintiff,

Vv.

ARNOLD INDUSTRIES, INC., an Ohio corporation;

GEORGE BLACKSTONE; TAOS EQUIPMENT MANU-

FACTURERS, INC., a New Mexico corporation; DAVID

KIMBALL; and LARRY KROGNESS,

Defendants.

ORDER AND JUDGMENT

This matter is before the Court on November 23, 1982,

on defendants Arnold Industries, Inc., and George Black-

stone’s Motion for Relief from Judgment pursuant to Fed-

eral Rule of Civil Procedure 60(b). The Court has con-

sidered the statements and arguments of counsel and has

made oral findings of fact and conclusions of law, which are

incorporated by reference as if fully set forth herein. <Ac-

cordingly, it is

ORDERED that the defendants’ Motion for Relief from

Judgment pursuant to Fed.R.Civ.P. 60(b) be, and it hereby

is, granted; and it is

FURTHER ORDERED that this Court’s Judgment of

March 2, 1982, and its Order of June 17, 1982, pertaining

Ag

to the Rule 54(b) motion, be, and they hereby are, va-

cated; and it is

FURTHER ORDERED that judgment is entered for the

plaintiff and against defendant Taos Equipment Manufac-

turers, Inc., in actual damages in the amount of $4,140.00

and exemplary damages in the amount of $250,000.00 for a

total amount of $254,140.00; and it is

FURTHER ORDERED that judgment is entered for

the plaintiff and against defendants Arnold Industries, Inc.,

and George Blackstone, in actual damages in the amount of

$483,350.00 and exemplary damages in the amount of

$800,000.00 for a total amount of $1,283,350.00; and it is

FURTHER ORDERED that said judgments are joint

and several and shall accrue interest from March 2, 1982,

at the legal rate as provided by law; and it is

FURTHER ORDERED that the costs previously taxed

in favor of plaintiff are hereby confirmed; and it is

FURTHER ORDERED that, because defendant David

Kimball and defendant Larry Krogness each filed a bank-

ruptcy petition listing plaintiff as a creditor and because

stay orders were in effect as to both said defendants dur-

ing the pendency of this lawsuit, the Court finds that there

is no just reason for delay; and it is

FURTHER ORDERED that the judgment entered here-

by against defendants Arnold Industries, Inc., and George

Blackstone be, and it hereby is, certified as a final judg-

ment pursuant to Fed.R.Civ.P. 54(b) as of the date of the

filing of this Order.

DATED at Denver, Colorado, this 23rd day of Novem-

ber, 1982.

BY THE COURT:

/s/ Zita L. WEINSHIENK

Judge United States District Court

Al0

ORDER OF THE UNITED STATES COURT OF

APPEALS FOR THE TENTH CIRCUIT DENY-

ING PETITION FOR REHEARING EN BANC

(Filed March 4, 1983)

No. 82-1553

Before Honorable Otiver Setu, Chief Judge, Honorable

Witt1am J. Hoiitoway, Jr., Honorable Rosert H. Mc-

WituiamMs, Honorable James E. Barrett, Honorable

WILLIAM E. Doyte, Honorable Monroe G. McKay, Honor-

able JAMES K. Locan and Honorable STEPHANIE K. SEy-

MouR, Circuit Judges, United States Court of Appeals

ARTHUR STICKLER,

Plaintiff-Appellee,

Vv.

ARNOLD INDUSTRIES, INC., an Ohio Corporation, and

GEORGE BLACKSTONE,

Defendants-Appellants,

TAOS EQUIPMENT MANUFACTURERS, INC., a New

Mexico Corporation, DAVID KIMBALL,

LARRY KROGNESS,

Defendants.

This matter comes on for consideration of appellants’

petition for rehearing and suggestion for rehearing en

banc.

Upon consideration thereof, the petition for rehearing

is denied by the panel to whom the case was originally

submitted.

All

The petition having been denied by the panel and no

member of the panel nor judge in regular active service

on the court having requested that the court be polled on

rehearing en banc, the suggestion for rehearing en banc

is denied.

/s/ Howarp K. PuiILurps

Clerk