Alpine Glass, Inc. v. Country Mutual Insurance Co., et al

Filing

OPINION FILED - THE COURT: MICHAEL J. MELLOY, C. ARLEN BEAM and RAYMOND W. GRUENDER. --Michael J. Melloy, Authoring Judge-- (PUBLISHED) [3938235] [10-3682]

United States Court of Appeals
FOR THE EIGHTH CIRCUIT

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No. 10-3682
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Alpine Glass, Inc.,
Plaintiff - Appellant,
v.
Country Mutual Insurance Company;
MSI Preferred Insurance Company;
Mutual Service Casualty Insurance
Company; Modern Service Insurance
Company; Country Preferred
Insurance Company; Country
Casualty Insurance Company,
Defendants - Appellees.

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Appeal from the United States
District Court for the
District of Minnesota.

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Submitted: October 19, 2011
Filed: August 2, 2012
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Before MELLOY, BEAM, and GRUENDER, Circuit Judges.
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MELLOY, Circuit Judge.

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Alpine Glass, Inc. (Alpine), appeals the district court's1 partial denial of
Alpine's motion to consolidate 482 short-pay claims for arbitration against Country
Mutual Insurance Co. and five of its subsidiaries (collectively, Country). Because the
district court's order is neither a final order under 28 U.S.C. § 1291 nor appealable
under the collateral order doctrine, we dismiss the appeal for want of jurisdiction.
I.
Under Minnesota's highly-regulated auto-glass-insurance framework, when an
insured driver has auto glass work performed, the driver does not pay the auto glass
company directly. Instead, the insured assigns his claim against his insurance
company to the auto glass company. That company then seeks reimbursement from
the insured's insurance company. The formulas that the glass and insurance
companies use to determine reimbursement are similar but not identical; the insurance
companies typically reimburse the glass companies less than the amount the glass
companies demand. In Minnesota, pursuant to the Minnesota No-Fault Automobile
Insurance Act, disputes over these "short pays" are subject to mandatory arbitration.
Minn. Stat. § 65B.525.
This case concerns 482 such claims by Alpine against Country. Alpine's
original complaint, filed in Minnesota state court on November 5, 2009, and naming
only Country Mutual Insurance Co. (Country Mutual), sought a declaratory judgment
consolidating all 482 claims into one arbitration. Country Mutual removed the case
to federal court based on diversity, after which Alpine moved to consolidate the
claims for arbitration. Once it became clear that some of the insurance policies had
been issued by Country Mutual's subsidiaries rather than by Country Mutual itself,

1

The Honorable Paul A. Magnuson, United States District Judge for the District
of Minnesota.
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Alpine filed an amended complaint on January 28, 2010, adding those subsidiaries
as named defendants.
Alpine moved for summary judgment on the issue of consolidation, and the
district court granted the motion as to some claims but denied it as to others. The
claims fell into two categories: those that were based on a policy that included a
two-year limitations clause and those that were not. The court consolidated for
arbitration the claims not subject to the limitations clause, as well as those claims that,
though subject to the clause, had been filed within two years of the filing of the
amended complaint. Altogether, the district court consolidated 248 of the claims. As
to the remaining 234 claims, the district court ruled that the limitations clause
prevented any action upon those policies and therefore the court was without power
to consolidate them. Finally, the district court assigned the matter to arbitration for
final determination.
Without moving for certification to appeal under 28 U.S.C. § 1292(b), Alpine
filed a direct appeal before this court, raising two issues. First, Alpine argued that the
district court erred when it denied Alpine's motion to consolidate as to the claims
based on policies containing the limitation clause. Second, Alpine argued that the
district court erred in basing the two-year period on the date of the filing of the
amended complaint, rather than on the date of the filing of the original complaint.
Prior to oral argument, we sua sponte requested supplemental briefing on this court's
jurisdiction to hear Alpine's appeal, specifically in light of Alpine Glass, Inc. v.
Illinois Farmers Ins. Co., 531 F.3d 679 (8th Cir. 2008) and Alpine Glass, Inc. v.
Allstate Ins. Co., 531 F.3d 685 (8th Cir. 2008).2

2

In both cases, this court sua sponte requested supplemental briefing on the
jurisdictional issue.
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II.
Under 28 U.S.C. § 1291, this court has "jurisdiction of appeals from all final
decisions of the district courts of the United States." A district court's order is final
"if it ends the litigation on the merits and leaves nothing more for the district court
to do but execute the judgment." Illinois Farmers, 531 F.3d at 681 (internal quotation
and alteration omitted). In Illinois Farmers, we concluded that a district court's order
consolidating claims for arbitration was not a final order under § 1291 because,
"[u]nder the No-Fault act, an arbitrator's decision on a legal question is subject to de
novo review by the district court." Id. at 682 (internal quotation omitted). In that
case, as here, "the district court will not only have to confirm (or vacate, or modify)
any arbitral award, but it will also have to review the arbitrator's legal determinations
de novo." Id. Here, because "the district court will have more to do than simply
execute the judgment following the No-Fault arbitration," this court lacks jurisdiction
under § 1291. Id. (internal quotation omitted).
Alpine contends, however, that this court has jurisdiction under the collateral
order doctrine. Whether the collateral order doctrine supports jurisdiction for an
appeal from a denial of a summary judgment motion to consolidate claims for
arbitration is a question of first impression for this court.
"[B]est understood . . . as a practical construction" of the final judgment rule,
Digital Equipment Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867 (1994), the
collateral order doctrine applies to "decisions 'which finally determine claims of right
separate from, and collateral to, rights asserted in the action, too important to be
denied review and too independent of the cause itself to require that appellate
jurisdiction be deferred until the whole case is adjudicated.'" Midland Asphalt Corp.
v. United States, 489 U.S. 794, 798 (1989) (quoting Cohen v. Beneficial Indus. Loan
Corp., 337 U.S. 541, 546 (1949)). Jurisdiction is proper under that doctrine if the
order appealed from "(1) conclusively determines a disputed issue; (2) which is an
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important issue completely separate from the merits; and (3) is effectively
unreviewable on appeal from a final judgment." Illinois Farmers, 531 F.3d at 684
(citation omitted). This analysis requires a consideration of the importance of the
interests that immediate appellate review vindicates: "The crucial question, however,
is not whether an interest is important in the abstract; it is whether deferring review
until final judgment so imperils the interest as to justify the cost of allowing
immediate appeal of the entire class of relevant orders." Mohawk Indus., Inc. v.
Carpenter, 130 S.Ct. 599, 606 (2009). Finally, the Supreme Court has repeatedly
stressed that this "'narrow' exception should stay that way and never be allowed to
swallow the general rule that a party is entitled to a single appeal, to be deferred until
final judgment has been entered." Digital Equip., 511 U.S. at 868 (citing RichardsonMerrell, Inc. v. Koller, 472 U.S. 424, 436 (1985)).
In Illinois Farmers and Allstate, we held that we lacked jurisdiction to review
a district court's order consolidating claims for arbitration because that order was
effectively reviewable following the entry of a final judgment. Thus, in neither case
did our holding turn on whether a consolidation order is sufficiently important to
merit review under the collateral order doctrine—though we observed in dicta that
"[e]ven if Allstate could establish that its interest regarding consolidation would be
irretrievably lost if it had to wait for a final judgment, this interest is not sufficiently
important to merit consideration as a collateral order." Allstate, 531 F.3d at 688 n.3
(internal quotation omitted); see also Illinois Farmers, 531 F.3d at 685 ("[t]he chance
that the litigation at hand might be speeded, or a particular injustice averted by a
prompt appellate decision are, standing alone, insufficient reasons" for applying the
collateral order doctrine (internal quotation omitted)). In this case, it is unclear
whether the district court's order denying consolidation is effectively unreviewable
on appeal.3 We need not address the issue, however, because Alpine's interest in

3

Alpine stresses that, if the district court's order stands, then Alpine will be
forced into piecemeal arbitration of the claims that were not consolidated, thereby
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consolidation here is not "sufficiently important to merit consideration as a collateral
order." Id. at 688 n.3.
Alpine argues that, absent appellate review, it is faced with the onerous
prospect of slogging through 234 individual arbitrations when, under its view of the
law, those arbitrations should have been consolidated into one. But the Supreme
Court has made clear that "the avoidance of litigation for its own sake" is insufficient
to warrant review under the collateral order doctrine. Will v. Hallock, 546 U.S. 345,
353 (2006). If convenience to the parties alone justified further abrogation of the
final judgment rule, then the collateral order doctrine would "swallow the general rule
that a party is entitled to a single appeal, to be deferred until final judgment has been
entered." Mohawk Indus., 130 S.Ct. at 605 (internal quotation omitted). An
erroneous decision by the trial court always threatens to raise the aggrieved party's
litigation costs, yet the Supreme Court has cabined jurisdiction under the collateral
order doctrine to cases where "some particular value of a high order was marshaled
in support of the interest in avoiding trial." Will, 546 U.S. at 352. We thus "decline[]
to find the costs associated with unnecessary litigation to be enough to warrant"
jurisdiction under the collateral order doctrine. Lauro Lines s.r.l. v. Chasser, 490 U.S.
495, 499 (1989); see also Digital Equip., 511 U.S. at 872 ("[a]n erroneous district
court decision will, as a practical matter, sound the 'death knell' for many plaintiffs'
claims that might have gone forward if prompt error correction had been an option.
But if immediate appellate review were available every such time, Congress's final
decision rule would end up a pretty puny one, and so the mere identification of some
interest that would be 'irretrievably lost' has never sufficed to meet the third Cohen
requirement.").

rendering the consolidation order unreviewable following final judgment. However,
the parties at oral argument were unable to articulate a reason why Alpine could not
pursue a single claim to final judgment, which would then allow Alpine to properly
place the consolidation issue before this court as an appeal from a final order.
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Further, Alpine's narrow focus on the cost of piecemeal arbitration in this case
is misplaced. When determining whether to apply "the blunt, categorical instrument
of § 1291 collateral order appeal," Digital Equip., 511 U.S. at 883, "we do not engage
in an individualized jurisdictional inquiry. Rather, our focus is on the entire category
to which a claim belongs." Mohawk Indus., 130 S.Ct. at 605 (emphasis added)
(internal quotation omitted). A holding that Alpine may appeal under the collateral
order doctrine would therefore apply to all denials of summary judgment motions to
consolidate arbitrations—whether those appeals concerned one or one thousand
claims. See Digital Equip., 511 U.S. at 876–77. Rather than analyze the specific
effect of the ruling on the parties before us, we instead must look to the interests that
immediate appellate review would vindicate across this entire class of cases.
Aside from the parties' interests in efficient arbitration—which, as discussed
above, does not support collateral order review—the only other interest Alpine
identifies is the State of Minnesota's public policy interest in efficiently administered
arbitration proceedings in the auto glass industry. While Minnesota's "No-Fault Act
and [] Rules of No-Fault Arbitration are silent on the ability of courts to consolidate
arbitration proceedings," the Minnesota Supreme Court has determined that one of
the No-Fault Act's purposes is to promote efficient resolution of arbitration and
litigation. Illinois Farmers Ins. Co. v. Glass Serv. Co., 683 N.W.2d 792, 805–06
(Minn. 2004) (citing Minn. Stat. § 65B.42). Alpine argues that, given the policy in
favor of consolidation, this court should find the avoidance of onerous arbitration to
be sufficiently important to warrant immediate review. But not every public policy
preference can support jurisdiction under the collateral order doctrine; rather, such
jurisdiction must rest upon a "substantial public interest or some particular value of
a high order." Mohawk Indus., 130 S.Ct. at 605. The interests and values the
Supreme Court has found sufficient are weightier than the interest at stake here. See
Will, 546 U.S. at 352–53 ("In each case, some particular value of a high order was
marshaled in support of the interest in avoiding trial: honoring the separation of
powers, preserving the efficiency of government and the initiative of its officials,
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respecting a State's dignitary interests, and mitigating the government's advantage
over the individual."). Accordingly, the denial of a motion to consolidate arbitrations
does not "imperil a substantial public interest" sufficient to warrant jurisdiction under
the collateral order doctrine. Will, 546 U.S. at 353 ("That is, it is not mere avoidance
of a trial, but avoidance of a trial that would imperil a substantial public interest, that
counts when asking whether an order is effectively unreviewable if review is to be
left until later." (internal quotation omitted)).4
Accordingly, we dismiss Alpine's appeal for lack of appellate jurisdiction.
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4

We note that, in exceptional circumstances, a party may pursue appellate
review without reliance on the collateral order doctrine. The "safety valves" of
interlocutory appeal under 28 U.S.C. § 1292(b), as well as a petition for a writ of
mandamus, provide "potential avenues of review apart from collateral order appeal."
Mohawk Indus., 130 S.Ct. at 607.
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