Clark v. Kraftco Corp. Court Opinion

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933

Ivt(»r F. CLARK, as President of Ice 
(’ream Drivers and Employees Union 
| , K.al 757, etc., et al., Plain tiffs-Appel­
lant*,

v.
KRAFTCO CORPORATION et al., 

Defendants-Appellees.
Docket No. 71-1526.

United States Court of Appeals, 
Second Circuit.

Argued Aug. 9, 1971. 
Decided Aug. 26, 1971.

CLARK v. KRAFTCO CORPORATION
Cite as 447 F.2d 933 (1971)

plant closing “damaged” the pension 
fund in certain amount and which re­
manded case to consultant for redetermi­
nation of employer’s liability to pension 
fund as if  it were in arbitration and 
which retained jurisdiction was order 
made in course of continuing litigation 
and was not final and therefore not ap­
pealable. 28 U.S.C.A. § 1291; Labor 
Management Relations Act, 1947, § 301, 
29 U.S.C.A. § 185; Fed.Rules Civ.Proc. 
rule 53, 28 U.S.C.A.; CPLR N.Y. 7601.

Dispute relating to agreement be­
tween union and employer respecting 
employer’s liability to industry-wide em­
ployee pension fund. The United States 
District Court for the Southern District 
of New York, Harold R. Tyler, Jr., J., 
denied union’s motion for summary 
judgment, 323 F.Supp. 358, and the un- 
i< n appealed. On motion by employer to 
dismiss appeal for lack of finality, the 
Court of Appeals, Feinberg, Circuit 
Judge, held that district court’s order 
*Mch denied union’s motion for summa­
ry judgment to enforce determination of 
actuary that plant closing “damaged” 
the pension fund in certain amount and 
*Hich remanded case to consultant for 
^determination of employer’s liability 
to pension fund as if  it were in arbitra­
tion and which retained jurisdiction was 
rder made in course of continuing liti- 

L»bon and was not final and therefore 
* 4 appealable.

3. Courts <3=405(12.2)
Order compelling arbitration, when 

made in course of continuing litigation 
rather than when handed down in inde­
pendent proceeding, is not final order 
and is not appealable.

4. Courts <3=405(12.1)
Power of Court of Appeals to re­

view order in “marginal” case within 
the “twilight zone” of finality when the 
questions presented on appeal are funda­
mental to further conduct of the case 
and when inconvenience and costs of 
piecemeal review are outweighed by the 
danger of denying justice by delay 
should be used sparingly.

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5. Courts <3=405(14.8)
Pretrial order that limits legal or 

factual issues to be presented or which 
controls procedure to be used at trial is 
not appealable as matter of right. 28 
U.S.C.A. § 1292(b). m .

Motion to dismiss appeal granted.

! Courts <3=405(3.9)
Generally, order denying summary 

• *.uent is not appealable. 1

1 Courts <3=405(12.15)
District court’s order in proceeding 

dispute relating to agreement be- 
union and

6. Courts <3=405(12.1)
Federal policy against piecemeal or 

premature appellate review is basic one 
and case for review of apparently inter­
locutory order must be very strong to 
warrant review.

employer respecting 
-lover’s liability to industry-wide em- 
<‘ ■ •0 pension fund which denied un-

Samuel J. Cohen, New York City 
(Cohen, Weiss & Simon, Stanley M. Ber­
man, New York City, on the brief), for 
plaintiff s-appellants.

John F. Cannon, New York City (Sul­
livan & Cromwell, New York City, on

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931 447 FEDERAL REPORTER, 2d SERIES

.Before FEINBERG, MULLIGAN and 
TIMBERS, Circuit Judges.

FEINBERG, Circuit Judge:
This is a motion by appellee Kraftco 

Corporation to dismiss the appeal of Ice 
Cream Drivers and Employees Union Lo­
cal 757 and Milk Drivers and Dairy Em­
ployees Union Local 680 1 from an order 
of the United States District Court for 
the Southern District of New York, 
Harold R. Tyler, Jr., J., 323 F.Supp. 
358, denying the Locals’ motion for 
summary judgment in a breach of 
contract suit under section 301 of the 
Labor Management Relations Act, 29 U. 
S.C. § 185. For reasons explained be­
low, we agree with Kraftco that Judge 
Tyler’s order is not “final” under 28 U. 
S.C. § 1291 and, therefore, dismiss the 
appeal.

The background of this motion can be 
briefly stated. Kraftco and Locals 757 
and 680 signed an agreement, dated 
April 25, 1968, respecting the planned 
closing of Kraftco’s Breyer Ice Cream 
Plant in Newark, New Jersey. Among 
other things, the agreement provided 
that the actuarial consultant to the in­
dustry-wide pension fund would deter­
mine the impact, if any, of the closing 
of the Breyer plant and that, if  the pen­
sion fund was found to be adversely af­
fected, Kraftco would pay to the fund an 
amount determined by the consultant. 
About 18 months after the agreement 
was signed, the consultant determined 
that the liability of Kraftco to the pen­
sion fund was $978,100. After Kraftco 
refused to pay that amount, the Locals 
instituted this suit.

In the district court, the Locals moved 
for summary judgment on the grounds 
that the agreement made the findings of 
the consultant final and binding on 
Kraftco and, in the absence of fraud or 
misconduct, the court could not go be-

I. Both Locals are affiliated with the In­
ternational Brotherhood of Teamsters, 
Chauffeurs, Warehousemen and Helpers 
of America.

hind those findings. The district court 
did not agree and, relying primarily , , 
its finding that the parties did not in 
tend to allow the actuarial consultant ? , 
resolve ambiguities in the contract. d, 
nied summary judgment. In additi. ■ 
the court set aside the findings of 
consultant, remanded the case to the con­
sultant for redetermination, pursuant ; 
N.Y.C.P.L.R. § 7601, of Kraftco’s liabili­
ty to the pension fund, and ordered that 
the consultant’s report include finding* 
as to certain specific matters. From tin* 
order, the Locals filed a notice of appeal

[1] The Locals recognize that goner 
ally an order denying summary judg­
ment is not appealable. They point out, 
however, that the district court not only 
denied summary judgment but also \a 
cated the consultant’s determination, set 
aside and reformed the contract sued 
upon and sua sponte compelled arbitra­
tion. Essentially, the Locals present 
two theories supporting appealability 
First, relying on Goodall-Sanford, Inc. v 
United Textile Workers, 353 U.S. 550, 77 
S.Ct. 920, 1 L.Ed.2d 1031 (1957), they 
argue that Judge Tyler’s order is ap­
pealable because it compelled arbitration 
in a section 301 suit. Second, citing Gil­
lespie v. United States Steel Corp.. ■ 
U.S. 148, 85 S.Ct. 308, 13 L.Ed.2d 19V 
(1964), they contend that the order 
appealable under a practical construction 
of finality. This is so, they contend, L 
cause the order denied them the only , 1 
lief they sought, the recovery of the sum 
determined by the consultant, and !- 
cause the expense and delay invo vn, . 
the remand to the consultant out .vi-ivi* 
the inconvenience and cost of a P" *’ 
meal review.

[2] As to the first argume.a.  ̂
Locals assume that Judge Tyler 
can properly be regarded as thou*n • 
were an order compelling arbitiM

2. As stated above, the remand to the ■
arial consultant was jiursuant to N- - 

. L .R . § 7601 “as if it were an arbitrm
In addition, Judge Tyler order,’ i



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CLARK v. KRAFTCO CORPORATION
Cite ns 1ST F :

- ; ;: hv no means clear.' The contract
nv.t provide for arbitration and nei­

ther party requested it. Thus, Kraftco 
4f(,ups that Judge Tyler did not reform 

contract sued upon and turn it into 
in agreement to arbitrate. Doubtless 
(he situation before us is an unusual 
.„.. and Judge Tyler’s order is a hybrid. 

While the Locals’ characterization of the 
vtder is certainly not far-fetched, the 
r,jer also resembles a district court re­

versal of findings of a referee with a 
n-mand to him for further findings, for 
which Kraftco cites Bass v. Olson, 327 
y 2d 662 (9th Cir. 1964) and Hillcrest 
Lumber Co. v. Terminal Factors, Inc., 
ZM F.2d 323 (2d Cir. 1960). Such a 
reference to a master would not ordi­
narily be regarded as final. See 5 J. 
Moore, Federal Practice UK 53.05[3], 53.- 
!3[3] (2d ed. 1970); cf. 1966 Amend­
ment to Fed.R.Civ.P. 53 (expanded the 
term “master” to include “assessor”).

935

•ubjeet to waiver by stipulation of the 
thirties,” the determination on remand 
k* attended by the formalities which 

formally accompany an arbitration under 
•Article 75 of the New York Civil Practice 
fj)w and Rules.”

• >imilarly inapplicable is the confusing 
• o«> of eases concerning whether an order

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compelling arbitration when made in the 
course of a continuing litigation ra ther 
than when handed down in an independ­
ent proceeding is not a final order. 
Chatham Shipping Co. v. Fertex S.S. 
Corp., 352 F.2d 291, 294 (2d Cir. 1965); 
Farr & Co. v. Cia. Intercontinental De 
Navegacion, 243 F.2d 342, 345 (2d Cir. 
1957). See Rogers v. Schering Corp., 
262 F.2d 180, 182 (3d Cir.), cert, denied 
sub nom., Hexagon Laboratories, Inc. v. 
Rogers, 359 U.S. 991, 79 S.Ct. 1121, 3 
L.Ed. 980 (1959).3 As Judge Tyler 
has retained jurisdiction over this suit 
and further action by him on the merits 
is necessary, the order appealed from is 
one made in the course of a continuing 
litigation. Therefore, even on the ques­
tionable assumption that Judge Tyler’s 
order is the same as the more usual or­
der directing arbitration, we conclude 
that it is interlocutory rather than final.

[3] On the assumption that the or­
der directs arbitration, it is true that 
«uch an order, while seemingly interlocu­
tory, may be appealable in certain cir­
cumstances. But even on that assump­
tion. the Locals have overstated the 
M-ope of the Goodall-Sanford decision. 
That case was an action under section 
*91 to compel specific performance of an 
arbitration provision in a collective bar- 
raining agreement. In that context, the 
Supreme Court, reasoning that the arbi­
tration was “not merely a step in judi­
cial enforcement of a claim nor auxiliary 
*o a main proceeding, but the full relief 
*‘>ught,” held that a decree ordering a 
•W ific performance of the arbitration 
J revision was final within the meaning 
*f 23 U.S.C. § 1291. 353 U.S. at 551-52. 
’u the language just quoted indicates, 
- '*ever, that decision does not change 
’-‘e rule of this circuit that an order

ipra. All that 
ie was <

the'power to review an order f

H H N H R H B S S Bof finality^* where the questions presen'
W rm w m M H i
further conduct of t 
inconvenience and costs of piecemeal re-

refusing or granting a stay pending arbi­
tration is an appealable interlocutory 
order under 28 U.S.C. § 1292(a). See 
the thorough analysis of these decisions 
in Standard Chlorine, Inc. v. Leonard, 3S4 
F.2d 304 (2d Cir. 1967).

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936 447 FEDERAL REPORTER, 2d SERIES

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[5] Judge Tyler did not rule that 
Krafteo had no liability under the 
contract. Rather he decided that on 
one particular theory of the law and 
facts such liability could not be found 
and ordered “further proceedings” 
under Fed.R.Civ.P. 56(d). This does 
not differ appreciably from a pre-trial 
order that limits the legal or factual 
issues to be presented or controls the 
procedure to be used at trial. Such 
an order is not appealable as a matter of 
right. Cf. 28 U.S.C. § 1292(b). It is 
true that the Locals will incur expense 
and delay as a result of the order below, 
but probably no more so than had Judge 
Tyler simply denied summary judgment 
on his construction of the contract and 
provided that all the issues should be 
tried in the district court in the first in­
stance rather than remanding some of 
them to the consultant. No doubt the 
Lpcals would say that such a course 
would also have been uncalled for under 
the contract, but the correctness of an 
order does not ordinarily determine its 
finality. In that event, the Locals would 
still have been “required to bear the 
costs of witness fees, appraisers’ fees,

4. Memorandum of Plaintiffs-Appellants in 
Opposition to Motion to Dismiss Appeal 
at 22.

5. The Locals also rely on Plymouth Mutual 
Life Insurance Co. v. Illinois Mid-Conti­
nent Life, Insurance Co., 378 F.2d 389 
(3d Cir. 1907), where an appeal was al­
lowed from a post-judgment order modify­
ing a judicially-approved settlement agree-

attorneys’ fees, [and] a., stenograph* 
transcript,” expenses which they r ,< 
urge as justifying appealability.4 •

Moreover, unlike Gillespie, interest# <­
judicial efficiency will not be served < 
allowing the appeal. Neither side hi..- 
briefed the basic substantive issue# 
appeal and we, obviously, have not r 
sidered them. Indeed, allowing the a; 
peal at this time rather than after th 
district court makes an award, if am 
may very well result in the needless < t 
penditure of judicial effort. Even \ver<* 
we to reverse Judge Tyler’s order, v> 
could not grant full relief to the Local' 
because Krafteo raises the issue, r. ■*. 
passed upon by Judge Tyler, that unit - 
the Locals’ theory, the consultant's im­
port contains clear errors totaling a# 
much as $500,000.5

[6] The federal policy against pieo 
meal or premature appellate review is * 
basic one, embodying several important 
considerations. See American Exprwi 
Warehousing, Ltd. v. Transameriea h- 
surance Co., 380 F.2d 277, 280 (2d (it  
1867). In light of this policy, tic 
case for review of this apparently int<- 
locutory order must be very strorv 
While the Locals’ arguments have I>«p 
presented persuasively, they are not >u' 
ficient to carry the day. We era- *• 
Kraftco’s motion to dismiss the applet 
for lack of finality under 28 U.S.C I 
1291.

ment. However, the court there eui|>M 
sized that since a post-judgment order 
involved, “the policy against and the I>r- ’ 
ability of avoidable piecemeal review an 
less likely to be decisive after judgim-i** 
than before.” 378 F.2d at 391. At n>** 
the case indicates that “it is someone- 
appropriate” for practical reasons to f  “  
the technical rules of finality. I  ■ 

we do not think that this is such a 1

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