Lazy Oil Co. v. Witco Corp. - 166 F.3d 581 (3d Cir. 1999)

Rule:

A premature notice of appeal, filed after disposition of some of the claims before a district court, but before entry of final judgment, will ripen upon the court's disposal of the remaining claims.

Facts:

The litigation began two separate class actions, each brought in the District Court for the Western District of Pennsylvania, by sellers of Penn Grade crude against three purchasers and refiners of this crude, Quaker State, Pennzoil, and Witco. The plaintiffs in both actions alleged that the defendants conspired to depress the price of Penn Grade Crude, in violation of the Sherman Antitrust Act. The cases were consolidated and, in June 1995, the District Court certified the consolidated case as a class action under Rule 23(b)(3), with the class comprising all "direct sellers of Penn Grade Crude" who sold oil to the defendants between January 1, 1981, and June 30, 1995. Shortly thereafter, the plaintiffs settled with Quaker State for $ 4.4 million. This settlement was approved by the District Court. In early 1997, after several months of negotiations, plaintiffs reached a settlement with the remaining defendants, under which Pennzoil would pay approximately $ 9.7 million and Witco would pay approximately $ 4.8 million, with neither defendant admitting any liability or wrongdoing. Upon presentation of the settlement to the class representatives, two of them, Lazy Oil Co. and Thomas A. Miller Oil Co., objected to the settlement. At least 384 class members joined Lazy Oil et al. in objecting to the terms of the settlement after receiving notice of its terms. Class Counsel thereafter moved to withdraw from representing the objectors. In February 1997, the District Court directed that notice of the proposed settlement be sent to all class members and published in local and national newspapers. The objectors filed motions, inter alia, requesting that the Court disapprove the settlement, for establishment of a producer subclass, and for disqualification of Class Counsel. After numerous evidentiary hearings, the Court approved the settlement and denied the objectors' motions.

Issue:

Does the appellate court have jurisdiction over the instant case?

Answer:

Yes.

Conclusion:

Exercising jurisdiction in the present case, in which the District Court disposed of the remaining issue and entered a final judgment prior to our consideration of the case, and in which no prejudice is alleged by any party, is consistent with its decision in Cape May Greene. Some courts that have followed a rule similar herein have revisited this doctrine in light of the Supreme Court's 1991 decision in FirsTier Mortgage Co. v. Investors Mortgage Insurance Co. In FirsTier, the Supreme Court stated that Federal Rule of Appellate Procedure 4(a)(2) "permits a notice of appeal from a nonfinal decision to operate as a notice of appeal from the final judgment only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment." Therefore, Rule 4(a)(2) does not support the Cape May Greene doctrine when the order from which a notice of appeal is filed is not one that would be final if followed immediately by entry of judgment. Relying on this distinction, the Fifth Circuit has recently abrogated its own version of the Cape May Greene doctrine. However, the court does not believe that Cape May Greene has been overruled by FirsTier. FirsTier simply limited the reach of Rule 4(a)(2)'s proviso. It did not hold that the Rule 4(a)(2) situation--announcement of a final decision followed by notice of appeal and then entry of the judgment--is the only situation in which a premature notice of appeal will ripen at a later date. In fact, Rule 4(a)(4) was amended in 1993 to provide that a premature notice of appeal would later ripen if it was filed after entry of a judgment, but while post-trial motions were pending. Such a premature notice of appeal ripens upon "entry of the order disposing of the last such motion outstanding." Thus, in a number of factual situations, a premature notice of appeal will become effective at a later date. Finally, Rule 2 of the Federal Rules of Appellate Procedure permits a court of appeals to "suspend the requirements or provisions" of any rule of appellate procedure. The purpose of the Rule is to ensure that justice is not denied on the basis of a mere technicality. For the court to decline jurisdiction in this appeal would elevate a mere technicality above the important substantive issues here involved, as well as the right of the parties in this case to have their dispute resolved on its merits. 

In this case, a notice of appeal was filed following final disposition of the key elements of the dispute: liability and the amount of damages. The appellees, both plaintiffs and defendants, were on notice that the objectors would be appealing the approval of the settlement and the denial of their motions by the District Court. No prejudice is claimed or apparent. Long before we considered any aspect of this case, the outstanding issue of allocation was resolved, a final judgment was entered, and the case was closed. Finding the precedent in Cape May Greene both intact and applicable to this case, the appellate court has jurisdiction.