Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368 (1981)
Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368 (1981)
Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368 (1981)
2d 571
101 S.Ct. 669
449 U.S. 368
Syllabus
Respondent is lead counsel for the plaintiffs in four consolidated productliability suits in Federal District Court against petitioner and other
manufacturers. Petitioner moved to disqualify respondent from further
representation of the plaintiffs because of an alleged conflict of interest
arising from the fact that petitioner's liability insurer was also an
occasional client of respondent's law firm. Petitioner argued that
respondent's representation of the insurer would give him an incentive to
structure the plaintiffs' claims for relief so as to enable the insurer to avoid
any liability, thus increasing petitioner's own potential liability. In
accordance with the District Court's order, respondent obtained the
consent of both the plaintiffs and the insurer to his continuing
representation, and the court then allowed him to continue his
representation of the plaintiffs. Petitioner filed a notice of appeal pursuant
to 28 U.S.C. 1291, which vests the courts of appeals with "jurisdiction of
appeals from all final decisions of the district courts . . . except where a
direct review may be had in the Supreme Court." The Court of Appeals
held that district court orders denying disqualification motions were not
immediately appealable under 1291, but because it was overruling prior
cases, the court made its decision prospective only and, on the merits,
affirmed the District Court's order permitting respondent to continue
representing the plaintiffs.
Held:
1. Orders denying motions to disqualify the opposing party's counsel in a
civil case are not appealable final decisions under 1291. Such an order
does not fall within the "collateral order" exception of Cohen v. Beneficial
Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528, to the
requirement that all appeals under 1291 must await final judgment on
the merits in the underlying litigation. Petitioner has made no showing, as
required under the Cohen doctrine of immediately appealable "collateral
orders," that an order denying disqualification is effectively unreviewable
on appeal from a final judgment on the merits. The propriety of a district
court's denial of a disqualification motion will often be difficult to assess
until its impact on the underlying litigation may be evaluated, which is
normally after final judgment, and should the court of appeals conclude
after the trial has ended that permitting continuing representation was
prejudicial error, it would retain its usual authority to vacate the judgment
appealed from and order a new trial. Pp. 373-378.
2. The Court of Appeals, after properly concluding that the District Court's
order was not immediately appealable under 1291, erred in reaching the
merits of the District Court's order. The finality requirement of 1291 is
jurisdictional in nature. If an appellate court finds that the order from
which a party seeks to appeal does not fall within the statute, its inquiry is
over. A court lacks discretion to consider the merits of a case over which
it is without jurisdiction, and thus a jurisdictional ruling may never be
made prospective only. Pp. 379-380.
8 Cir., 612 F.2d 377, vacated and remanded.
Harvey M. Grossman, Los Angeles, Cal., for petitioner.
John R. Gibson, Kansas City, Mo., for respondent.
Justice MARSHALL delivered the opinion of the Court.
This case presents the question whether a party may take an appeal, pursuant to
28 U.S.C. 1291,1 from a district court order denying a motion to disqualify
counsel for the opposing party in a civil case. The United States Court of
Appeals for the Eighth Circuit held that such orders are not appealable, but
made its decision prospective only and therefore reached the merits of the
challenged order. We hold that orders denying motions to disqualify counsel
are not appealable final decisions under 1291, and we therefore vacate the
judgment of the Court of Appeals and remand with instructions that the appeal
be dismissed for lack of jurisdiction.
Petitioner was at all relevant times insured by Home Insurance Co. (Home)
under a contract providing that Home would be responsible only for some types
of liability beyond a minimum "deductible" amount. Home was also an
occasional client of respondent's law firm.3 Based on these facts, petitioner in
May 1979 filed a motion to disqualify respondent from further representation of
the plaintiffs. Petitioner argued that respondent had a clear conflict of interest
because his representation of Home would give him an incentive to structure
plaintiffs' claims for relief in such a way as to enable the insurer to avoid any
liability. This in turn, petitioner argued, could increase its own potential
liability. Home had in fact advised petitioner in the course of the litigation that
its policy would cover neither an award of compensatory damages for willful or
intentional acts nor any award of exemplary or punitive damages.4 The District
Court entered a pretrial order requiring that respondent terminate his
representation of the plaintiffs5 unless both the plaintiffs and Home consented
to his continuing representation.6 Id., at 157, 160.
Although it did not hear oral argument on the appeal, the Eighth Circuit
decided the case en banc and affirmed the trial court's order permitting
petitioner to continue representing the plaintiffs.8 In re Multi-Piece Rim
Products Liability, 612 F.2d 377 (1980). Before considering the merits of the
appeal, the court reconsidered and overruled its prior decisions holding that
orders denying disqualification motions were immediately appealable under
1291. The Court of Appeals reasoned that such orders did not fall within the
Under 1291, the courts of appeals are vested with "jurisdiction of appeals
from all final decisions of the district courts . . . except where a direct review
may be had in the Supreme Court." We have consistently interpreted this
language as indicating that a party may not take an appeal under this section
until there has been "a decision by the District Court that 'ends the litigation on
the merits and leaves nothing for the court to do but execute the judgment.' "
Coopers s & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57
L.Ed.2d 351 (1978), quoting Catlin v. United States, 324 U.S. 229, 233, 65
S.Ct. 631, 633, 89 L.Ed. 911 (1945). This rule, that a party must ordinarily raise
all claims of error in a single appeal following final judgment on the merits,
serves a number of important purposes. It emphasizes the deference that
appellate courts owe to the trial judge as the individual initially called upon to
decide the many questions of law and fact that occur in the course of a trial.
Permitting piecemeal appeals would undermine the independence of the district
judge, as well as the special role that individual plays in our judicial system. In
addition, the rule is in accordance with the sensible policy of "avoid[ing] the
obstruction to just claims that would come from permitting the harassment and
cost of a succession of separate appeals from the various rulings to which a
litigation may give rise, from its initiation to entry of judgment." Cobbledick v.
United States, 309 U.S. 323, 325, 60 S.Ct. 540, 541, 84 L.Ed. 783 (1940). See
DiBella v. United States, 369 U.S. 121, 124, 82 S.Ct. 654, 656, 7 L.Ed.2d 614
(1962). The rule also serves the important purpose of promoting efficient
judicial administration. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 170, 94
S.Ct. 2140, 2149, 40 L.Ed.2d 732 (1974).
Because the litigation from which the instant petition arises had not reached
final judgment at the time the notice of appeal was filed,11 the order denying
petitioner's motion to disqualify respondent is appealable under 1291 only if it
falls within the Cohen doctrine. The Court of Appeals held that it does not, and
5 of the other 10 Circuits have also reached the conclusion that denials of
disqualification motions are not immediately appealable "collateral orders."12
We agree with these courts that under Cohen such an order is not subject to
appeal prior to resolution of the merits.
An order denying a disqualification motion meets the first part of the "collateral
order" test. It "conclusively determine[s] the disputed question," because the
only issue is whether challenged counsel will be permitted to continue his
representation. In addition, we will assume, although we do not decide, that the
disqualification question "resolve[s] an important issue completely separate
from the merits of the action," the second part of the test. Nevertheless,
petitioner is unable to demonstrate that an order denying disqualification is
"effectively unreviewable on appeal from a final judgment" within the meaning
of our cases.
10
11
quoting Mercantile National Bank v. Langdeau, 371 U.S. 555, 558, 83 S.Ct.
520, 522, 9 L.Ed.2d 523 (1963).
12
An order refusing to disqualify counsel plainly falls within the large class of
orders that are indeed reviewable on appeal after final judgment, and not within
the much smaller class of those that are not. The propriety of the district court's
denial of a disqualification motion will often be difficult to assess until its
impact on the underlying litigation may be evaluated, which is normally only
after final judgment. The decision whether to disqualify an attorney ordinarily
turns on the peculiar factual situation of the case then at hand, and the order
embodying such a decision will rarely, if ever, represent a final rejection of a
claim of fundamental right that cannot effectively be reviewed following
judgment on the merits. In the case before us, petitioner has made no showing
that its opportunity for meaningful review will perish unless immediate appeal
is permitted. On the contrary, should the Court of Appeals conclude after the
trial has ended that permitting continuing representation was prejudicial error, it
would retain its usual authority to vacate the judgment appealed from and order
a new trial. That remedy seems plainly adequate should petitioner's concerns of
possible injury ultimately prove well founded. As the Second Circuit has
recently observed, the potential harm that might be caused by requiring that a
party await final judgment before it may appeal even when the denial of its
disqualification motion was erroneous does not "diffe[r] in any significant way
from the harm resulting from other interlocutory orders that may be erroneous,
such as orders requiring discovery over a work-product objection or orders
denying motions for recusal of the trial judge." Armstrong v. McAlpin, 625 F.2d
433, 438 (1980), cert. pending, No. 80-431. But interlocutory orders are not
appealable "on the mere ground that they may be erroneous." Will v. United
States, 389 U.S. 90, 98, n. 6, 88 S.Ct. 269, 275, n. 6, 19 L.Ed.2d 305 (1967).
Permitting wholesale appeals on that ground not only would constitute an
unjustified waste of scarce judicial resources, but also would transform the
limited exception carved out in Cohen into a license for broad disregard of the
finality rule imposed by Congress in 1291. This we decline to do.13
III
13
which a party seeks to appeal does not fall within the statute, its inquiry is over.
A court lacks discretion to consider the merits of a case over which it is without
jurisdiction, and thus, by definition, a jurisdictional ruling may never be made
prospective only. We therefore hold that because the Court of Appeals was
without jurisdiction to hear the appeal, it was without authority to decide the
merits.15 Con sequently, the judgment of the Eighth Circuit is vacated, and the
case is remanded with instructions to dismiss the appeal for want of
jurisdiction. See DiBella v. United States, 369 U.S., at 133, 82 S.Ct. at 661.
14
So ordered.
15
16
I agree with the result in this case and the analysis of the Court so far as it
concerns the question whether an order denying disqualification of counsel is
"effectively unreviewable on appeal from the final judgment." The Court's
answer to this question is dispositive on the appealability issue. Since it is
completely unnecessary to do so, however, I would not state, as the Court does,
ante, at 375-376:
17
"An order denying a disqualification motion meets the first part of the
'collateral order' test. It 'conclusively determine[s] the disputed question,'
because the only issue is whether challenged counsel will be permitted to
continue his representation."
18
In Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93
L.Ed. 1528 (1949), Justice Jackson stressed that the order before the Court was
"a final disposition of a claimed right" and specifically distinguished a case in
which the matter was "subject to reconsideration from time to time." Id., at 546547, 69 S.Ct., at 1225. Just recently in Coopers & Lybrand v. Livesay, 437 U.S.
463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), we held that an order denying class
certification was not appealable under the collateral-order doctrine, in part
because such an order is "subject to revision in the District Court." Id., at 469,
98 S.Ct., at 2458. The possibility that a district judge would reconsider his
determination was highly significant in United States v. MacDonald, 435 U.S.
850, 858-859, 98 S.Ct. 1547, 1551-1552, 56 L.Ed.2d 18 (1978), where the
Court held that the denial of a pretrial motion to dismiss an indictment on
speedy trial grounds was not appealable under the collateral-order doctrine. The
Court noted that speedy trial claims necessitated a careful assessment of the
particular facts of the case, and that "[t]he denial of a pretrial motion to dismiss
an indictment on speedy trial grounds does not indicate that a like motion made
after trialwhen prejudice can be better gaugedwould also be denied."
19
It is not at all clear to me, nor has it been to courts considering the question,
that an order denying a motion for disqualification of counsel conclusively
determines the disputed question. The District Court remains free to reconsider
its decision at any time. See Armstrong v. McAlpin, 625 F.2d 433, 439 (CA2
1980) (en banc), cert. pending, No. 80-431; id., at 451 (Van Graafeiland, J.,
concurring in part and dissenting in part); Fleischer v. Phillips, 264 F.2d 515,
516-517 (CA2), cert. denied, 359 U.S. 1002, 79 S.Ct. 1139, 3 L.Ed.2d 1030
(1959). The Court itself recognizes this possibility, ante, at 378-379, n. 13. And
in doing so the Court is not only being abstractly inconsistent with its
conclusion that the first prong of the Cohen test is satisfied. In this very case
the possibility of reconsideration by the trial judge cannot be dismissed as
merely theoretical. Petitioner's claim is that respondent will advance only those
theories of liability which absolve the insurer, or will advance those theories
more strenuously than others. Although it is impossible to discern if this is true
before trial, the issue may become clearer as trial progresses and respondent
actually does present his theories. As in MacDonald, it cannot be assumed that
a motion made at a later point in the proceedings"when prejudice can be
better gauged"will be denied.
20
Title 28 U.S.C. 1291 provides in relevant part: "The courts of appeals shall
have jurisdiction of appeals from all final decisions of the district courts of the
United States . . . except where a direct review may be had in the Supreme
Court."
The firm included Home in a list of its clients in the Martindale-Hubbell Law
Directory and had occasionally represented the insurer on matters unrelated to
the multipiece rim litigation. At the time that petitioner filed its disqualification
motion, respondent was defending Home and five other carriers against a suit
on certain fire insurance policies. Home does not pay respondent or his firm a
retainer.
4
In April 1979 Home sent letters containing similar advice to the defendants in
some of the other consolidated suits. The plaintiffs in these other actions were
not represented by respondent.
In the alternative, the District Court stated that respondent could terminate his
representation of Home in the unrelated matter. See n. 3, supra.
The trial court based its determination that a potential conflict existed on its
interpretation of Disciplinary Rule 5-105 of the Code of Professional
Responsibility, most of which had been adopted verbatim as a local rule of
court. That rule prohibits a lawyer from "continu[ing] multiple employment if
the exercise of his independent professional judgment in behalf of a client will
be or is likely to be adversely affected by his representation of another client"
except when "it is obvious that he can adequately represent the interest of each
and if each consents to the representation. . . ." The District Court agreed with
petitioner that it was likely that the dual representation would adversely affect
respondent's " 'exercise of his independent judgment. . . .' " App. 160, quoting
International Business Machines Corp. v. Levin, 579 F.2d 271, 280 (CA3
1978). It therefore ordered that he "either comply with the consent requirement
. . . or terminate his representation. . . ." App. 160.
The Court of Appeals also stated that orders granting motions to disqualify
counsel would be appealable under 1291. 612 F.2d, at 378. That question is
not presented by the instant petition, and we express no opinion on it. Neither
do we express any view on whether an order denying a disqualification motion
in a criminal case would be appealable under 1291.
9
During pendency of its appeal to the Eighth Circuit, petitioner filed a federalcourt action against Home, charging that by consenting to respondent's
continuing representation of the plaintiffs in the multipiece rim productsliability suits, the insurer had breached its fiduciary duty to petitioner. App.
217. At the time of oral argument, counsel for petitioner represented that no
resolution had been reached in that litigation. Tr. of Oral Arg. 7-8.
10
In addition to the Eighth Circuit decision currently before us, five other Circuits
now follow the rule that denials of disqualification motions are not appealable.
See In re Continental Investment Corp., 637 F.2d 1 (CA1 1980); Armstrong v.
McAlpin, 625 F.2d 431 (CA2 1980), cert. pending, No. 80-431, overruling
Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (CA2
1974); Melamed v. ITT Continental Baking Co., 592 F.2d 290 (CA6 1979)
(Melamed II), overruling Melamed v. ITT Continental Baking Co., 534 F.2d 82
(CA6 1976) (Melamed I); Community Broadcasting of Boston, Inc. v. FCC, 178
U.S.App.D.C. 256, 546 F.2d 1022 (1976); Cord v. Smith, 338 F.2d 516 (CA9
1964). Five Circuits permit such appeals under 1291. See Westinghouse
Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (CA7 1978); MacKethan
v. Peat, Marwick, Mitchell & Co., 557 F.2d 395 (CA4 1977); Kroungold v.
Triester, 521 F.2d 763 (CA3 1975); Fullmer v. Harper, 517 F.2d 20 (CA10
1975); Uniweld Products, Inc. v. Union Carbide Corp., 385 F.2d 992 (CA5
1967), cert. denied, 390 U.S. 921, 88 S.Ct. 853, 19 L.Ed.2d 980 (1968).
11
Counsel for respondent represented at oral argument in this Court that the case
was, at that time, in the discovery stage. Tr. of Oral Arg. 35-36.
12
13
The United States in its brief amicus curiae, has challenged petitioner's standing
to attack the order permitting respondent to continue his representation of the
plaintiffs. In light of our conclusion that the Eighth Circuit was without
jurisdiction to hear petitioner's appeal, we have no occasion to address the
standing issue.
15
Two other Courts of Appeals that have overruled their precedent and held that
orders denying disqualification motions are not immediately appealable have
similarly made their decisions prospective only and therefore reached the
merits of the disputes before them. See Armstrong v. McAlpin, 625 F.2d, at
441-442 (citing need to provide guidance to district courts and to avoid waste of
judicial resources); Melamed II, 592 F.2d at 295 (earlier ruling in Melamed I
established appealability as law of the case). To the extent that the rationales of
those cases would allow a court to agree to decide the merits of a case over
which it is without jurisdiction, we respectfully disagree.