Opinion
Master File No. 1:00-1898, MDL 1358 (SAS), M 21-88.
January 6, 2005
Michael Axline, Esq., Miller, Axline Sawyer, Sacramento, CA, Counsel for Plaintiffs The Orange County Water District and The City of Fresno.
Carla M. Burke, Esq., Scott Summy, Esq., Celeste A. Evangelisti, Esq., Baron Budd, P.C., Dallas, TX, Counsel for Plaintiffs City of Dodge City, Chisholm Creek Utilities Authority, City of Bel Aire, City of Park City, City of Galva, City of Ida Grove, City of Sioux City, North Newton School Corp., City of South Bend, City of Mishawaka, City of Rockport, Escambia County Utilities Authority, Patrick County School Board, Town of Hartland, Buchanan County School Board, Town of Matoaka, Town of Campbellsburg, Town of Rayville, Richland Parish, Town of Marksville, Craftsbury Fire District #2.
Victor Sher, Esq., Todd E. Robins, Esq., Sher Leff LLP, San Francisco, CA, Counsel for Plaintiffs The Orange County Water District, The City of Riverside, California-American Water Co., Quincy Community Services District, The City of Roseville, Martin Silver, et al., Sacramento County Water Agency, Sacramento Groundwater Authority, Citrus Heights Water District, Del Paso Manor Water District, Fair Oaks Water District, Florin Resource Conservation District, Rio Linda Elverta Community Water District, Sacramento Suburban Water District, San Juan Water District, City of Sacramento.
Robert Gordon, Esq., C. Sanders McNew, Esq., Stanley N. Alpert, Esq., Weitz Luxenberg, P.C., New York, NY, Liaison Counsel for Plaintiffs.
Nathan P. Eimer, Esq., Pamela R. Hanebutt, Esq., Lisa S. Meyer, Esq., Eimer Stahl Klevorn Solberg LLP, Chicago, IL, Counsel for Defendant Citgo Petroleum Corp. and Citgo Refining Chemicals Co. L.P.
Peter John Sacripanti, Esq., James A. Pardo, Esq., Stephen J. Riccardulli, Esq., McDermott, Will Emery LLP, New York, NY, Liaison Counsel for Defendants.
OPINION AND ORDER
I. INTRODUCTION
In prior opinions dated March 16, 2004, and September 3, 2004, I held that this Court has federal agent jurisdiction and bankruptcy jurisdiction over the MTBE cases consolidated before it. Some plaintiffs, but not all, have moved for certification of an interlocutory appeal pursuant to section 1292 of Title 28 to appeal this determination. For the reasons set forth below, plaintiffs' motion is denied.
See In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., No. M21-88, MDL 1358, 2004 WL 515535 (S.D.N.Y. Mar. 16, 2004) (" MTBE I") (federal agent jurisdiction); In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., No. M21-88, MDL 1358, 2004 WL 1969121 (S.D.N.Y. Sept. 3, 2004) (" MTBE II") (bankruptcy jurisdiction). Familiarity with these opinions is presumed.
II. LEGAL STANDARD
It is a "basic tenet of federal law to delay appellate review until a final judgment has been entered." However, a court, in its discretion, may certify an interlocutory order for appeal if the order "[1] involves a controlling question of law [2] as to which there is substantial ground for difference of opinion and [3] that an immediate appeal from the order may materially advance the ultimate termination of the litigation."
Koehler v. Bank of Bermuda, Ltd., 101 F.3d 863, 865 (2d Cir. 1996).
"In determining whether a controlling question of law exists the district court should consider whether: reversal of the district court's opinion could result in dismissal of the action; reversal of the district court's opinion, even though not resulting in dismissal, could significantly affect the conduct of the action; or, the certified issue has precedential value for a large number of cases." "Although technically the question of whether there is a controlling issue of law is distinct from the question of whether certification would materially advance the ultimate termination of the litigation, in practice the two questions are closely connected."
Primavera Familienstifung v. Askin, 139 F. Supp. 2d 567, 570 (S.D.N.Y. 2001).
SEC v. Credit Bancorp, Ltd., 103 F. Supp. 2d 223, 227 (S.D.N.Y. 2000).
When considering requests for certification, district courts must carefully evaluate whether each of the above conditions are met. The Second Circuit has urged courts "to exercise great care in making a § 1292(b) certification." "[O]nly `exceptional circumstances [will] justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment.'" Section 1292 certification should be reserved for "those cases where an intermediate appeal may avoid protracted litigation."
See, e.g., Wausau Bus. Ins. Co. v. Turner Constr. Co., 151 F. Supp. 2d 488, 491 (S.D.N.Y. 2001) (denying motion for certification where defendant could not demonstrate substantial grounds for difference of opinion as to controlling questions of law).
Westwood Pharm., Inc. v. National Fuel Gas Distrib. Corp., 964 F.2d 85, 89 (2d Cir. 1992).
Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21, 25 (2d Cir. 1990) (quoting Coopers Lybrand v. Livesay, 437 U.S. 463, 475 (1978)).
Koehler, 101 F.3d at 865-66.
Indeed, even where the three legislative criteria of section 1292(b) appear to be met, district courts have "unfettered discretion to deny certification" if other factors counsel against it. These factors include: (1) the time an appeal would likely take; (2) the need for a stay pending appeal and the effect on the litigation, including discovery, that would result from a stay; (3) the probability of reversal on appeal; (4) the effect of a reversal on the remaining claims; (5) the benefit of further factual development and a complete record on appeal, particularly in rapidly developing or unsettled areas of law; and (6) the probability that other issues may moot the need for the interlocutory appeal.
National Asbestos Workers Med. Fund v. Philip Morris, Inc., 71 F. Supp. 2d 139, 162-63 (E.D.N.Y. 1999) (assuming the statutory criteria were met but nonetheless denying certification).
Id. at 163.
III. DISCUSSION
The second statutory factor for section 1292(b) certification has not been met. There is no substantial ground for a difference of opinion with respect to the Court's jurisdictional analysis. First, the Court applied well-settled principles of law to find that core bankruptcy jurisdiction exists because plaintiffs alleged arguably dischargeable claims that pre-date the confirmation of defendant Texaco's reorganization plan. Although plaintiffs cite opinions that suggest a split in authority as to what constitutes a discharged bankruptcy claim, those cases support my conclusion that a federal court should decide the issue. Second, this Court relied on substantial case law when it determined that defendants sufficiently alleged acting under the direction of a federal agency. Plaintiffs argue that there is a significant difference of opinion because other courts have not interpreted the "acting under" requirement in the same manner as this Court. However, neither disagreement outside this Circuit, nor the presence of disputed matters of first impression demonstrate a substantial ground for a difference of opinion.
See MTBE II, 2004 WL 1969121, at *17 (citing In re National Gypsum, Co., 118 F.3d 1056, 1064 (5th Cir. 1997); In re Chicago, Milwaukee, St. Paul Pacific R.R. Co., 6 F.3d 1184, 1192-93 (7th Cir. 1993); In re Chateaugay, 944 F.2d 997, 1005 (2d Cir. 1991); Timely Adventures, Inc. v. Phillips Props., Inc., No. M-95-049, slip op. at 4 (S.D. Tex. Apr. 3, 1996); Texaco, Inc. v. Sanders, 182 B.R. 937, 951 (S.D.N.Y. 1995); In re Johns-Manville Corp., 57 B.R. 680, 690 (S.D.N.Y. 1986)).
Notably, the cases cited by plaintiffs were decided by federal courts interpreting federal bankruptcy law. See Plaintiffs' Reply Memorandum of Law ("Pl. Reply") at 12-13 (citing Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 162 (7th Cir. 1994); In re Feitz, 852 F.2d 455 (9th Cir. 1988); and In re Mooney Aircraft, Inc., 730 F.2d 367 (5th Cir. 1984)).
See MTBE I, 2004 WL 515535, at *7-8 (citing, e.g., Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387 (5th Cir. 1998); In re Agent Orange Prods. Liab. Litig., No. 98 Civ. 6383, 2004 WL 231187 (E.D.N.Y. Feb. 9, 2004); Gurda Fams Inc. v. Monroe County Legal Assistance Corp., 358 F. Supp. 841 (S.D.N.Y. 1973)).
See Flor v. BOT Fin. Corp., 79 F.3d 281, 284 (2d Cir. 1996) (issue of first impression, by itself, is not sufficient to demonstrate a "substantial difference of opinion"); In re Air Crash Near Nantucket Island, No. 00-MDL-1344, 2004 WL 2269675, at *1 (E.D.N.Y. Oct. 8, 2004) ("Disagreement among courts outside the Second Circuit does not establish a substantial ground for difference of opinion"); Credit Bancorp, 103 F. Supp. 2d at 227 ("The fact that there is a [sic] some level of disagreement among the courts does not mean, however, that the standards of 1292(b) are necessarily satisfied."); In re NASDAQ Market Makers Antitrust Litig., 938 F. Supp. 232, 235 (S.D.N.Y. 1996) (opinions from other circuits "do not control in this Circuit and do not in themselves create `substantial grounds' for a difference of opinion").
Furthermore, plaintiffs have not demonstrated that interlocutory review would materially advance the ultimate termination of the litigation — the last, and most important, of section 1292(b)'s three factors. "An immediate appeal is considered to advance the ultimate termination of the litigation if that `appeal promises to advance the time for trial or to shorten the time required for trial.'" In this case, interlocutory appeal would not only fail to terminate these actions, but it could make the litigation even more protracted and expensive in the event of reversal because plaintiffs would surely continue to litigate these claims in sixteen state courts. This is not a case warranting departure from the "general policy [prohibiting] piecemeal appellate review."
See Koehler, 101 F.3d at 865-66 ("The use of § 1292(b) is reserved for those cases where an intermediate appeal may avoid protracted litigation."); Lerner v. Millenco, L.P., 23 F. Supp. 2d 345, 347 (S.D.N.Y. 1998) ("The Court of Appeals has emphasized the importance of the third consideration in determining the propriety of an interlocutory appeal.").
In re Oxford Health Plans, Inc., 182 F.R.D. 51, 53 (S.D.N.Y. 1998) (quoting 16 Charles A. Wright Arthur Miller, Federal Practice and Procedure § 3930 p. 432 (2d ed. 1996)).
See In re Air Crash, 2004 WL 2269675, at *2 (interlocutory appeal would not advance ultimate termination of litigation because parties could still litigate some claims in this court or raise their claims in countries where subject matter jurisdiction also existed); Certain Underwriters at Lloyd's, London v. ABB Lummus Global, Inc., No. 03 Civ. 7248, 2004 WL 1286806, at *7 (S.D.N.Y. June 10, 2004) (holding that interlocutory appeal would not advance the litigation because arguments concerning debtors' ability to contribute to reorganization plan would be proceeding in different courts on different schedules); In re Worldcom, Inc. Secs. Litig., No. 02 Civ. 3288, 2003 WL 22953644, at *7 (S.D.N.Y. Dec. 16, 2003) (finding that if the appeal were accepted and the actions in the MDL were remanded, it would not terminate the litigation because it would only "multiply into scores of separate state court actions, proceeding on different schedules in courts across the country"). See also In re NASDAQ, 938 F. Supp. at 235 (noting that plaintiffs "may well benefit from the economies of coordinated discovery and other pretrial proceedings conducted in the multidistrict class action").
Credit Bancorp, 103 F. Supp. at 227.
Plaintiffs' briefs merely reargue points I rejected when I considered the jurisdictional issues in the first instance. Section 1292 was "not intended as a vehicle to provide early review of difficult rulings in hard cases." Because the requirements of section 1292 have not been met, I need not consider other factors. Accordingly, plaintiffs' motion for certification is denied.
See Certain Underwriters, 2004 WL 1286806, at *7 (certifying interlocutory appeal would not advance interest of federal system because "it would merely allow the plaintiffs to raise before the Court of Appeals for the Second Circuit substantially the same arguments being raised in the bankruptcy appeal").
German v. Federal Home Loan Mortgage Corp., 896 F. Supp. 1385, 1398 (S.D.N.Y. 1995).
IV. CONCLUSION
For the reasons set forth above, the plaintiffs' request for certification to pursue interlocutory appeal is denied. The Clerk of the Court is directed to close this motion. A conference is scheduled for January 13, 2005 at 2:00 p.m.
SO ORDERED.