D&G, Inc. v. Supervalu, Inc. et al

Filing 128

ORDER in case 0:09-cv-00983-ADM-AJB; granting (161) Motion for Entry of Judgment under Rule 54(b) in case 0:09-md-02090-ADM-AJB (Written Opinion). Signed by Judge Ann D. Montgomery on 08/30/2011. Associated Cases: 0:09-md-02090-ADM-AJB, 0:09-cv-00983-ADM-AJB, 0:09-cv-02940-ADM-AJB(TLU)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

In re Wholesale Grocery Products
Antitrust Litigation

MEMORANDUM OPINION
AND ORDER
Court File No. 09-MD-2090 ADM/AJB

This Order Relates to All Actions

Richard B. Drubel, Esq., Anne M. Nardacci, Esq., and Kimberly H. Schultz, Esq., Boies, Schiller
& Flexner LLP, Hanover, NH and Albany, NY; Joel C. Meredith, Esq., Steven J. Greenfogel,
Esq., and Daniel B. Allanoff, Esq., Meredith Cohen Greenfogel & Skirnick, PC, Philadelphia,
PA; Daniel Kotchen, Esq., and Daniel Low, Esq., Kotchen & Low LLP, Washington, DC; and
Elizabeth R. Odette, Esq., and W. Joseph Bruckner, Esq., Lockridge, Grindal, Nauen, PLLP,
Minneapolis, MN, on behalf of Plaintiffs.
Stephen P. Safranski, Esq., Heather M. McElroy, Esq., Martin R. Lueck, Esq., K. Craig
Wildfang, Esq., Jennifer G. Daugherty, Esq., James S. Harrington, Esq., E. Casey Beckett, Esq.,
and Damien A. Riehl, Esq., Robins, Kaplan, Miller & Ciresi, LLP, Minneapolis, MN and
Boston, MA, and Gordon J. MacDonald, Nixon Peabody LLP, Manchester, NH, on behalf of
Defendant SuperValu, Inc.
Charles A. Loughlin, Esq., Christopher J. MacAvoy, Esq., and David S. Shotlander, Baker Botts
LLP, Washington, DC; Nicole M. Moen, Esq., and Todd A. Wind, Esq., Fredrikson & Byron,
PA, Minneapolis, MN, on behalf of Defendant C&S Wholesale Grocers, Inc.
______________________________________________________________________________

I. INTRODUCTION
This matter is before the undersigned United States District Judge for consideration of
Plaintiffs JFM Market, Inc.’s, MFJ Market Inc.’s, King Cole Foods, Inc.’s, Millennium
Operations, Inc.’s, and Blue Goose Super Market’s (collectively, the “Arbitration Plaintiffs”)
Motion Requesting Certification of Final Judgment Pursuant to Fed. R. Civ. P. 54(b) [Docket
No. 161] (the “Motion”). Defendants C&S Wholesale Grocers, Inc. (“C&S”) and SuperValu,
Inc. (“SuperValu”) oppose the Motion. For the reasons set forth below, the Motion is granted.

II. BACKGROUND
The factual background of this multidistrict litigation has been set forth at length in the
Court’s previous orders and will not be repeated here, but rather is incorporated by reference.
The Arbitration Plaintiffs each have an agreement to arbitrate claims against either C&S or
SuperValu or both. On that basis, the Court dismissed without prejudice the claims of each of
the Arbitration Plaintiffs by Order dated July 5, 2011 [Docket No. 141] (the “July 5, 2011
Order”). The Arbitration Plaintiffs requested permission to file a motion to reconsider and
permission was denied on July 21, 2011 [Docket No. 154].
The Arbitration Plaintiffs now seek to appeal the dismissal of their claims, and invoke
Rule 54(b) of the Federal Rules of Civil Procedure (the “FRCP”) in seeking entry of judgment to
allow appeal. C&S and SuperValu (collectively “Defendants”) oppose entry of judgment,
arguing that the Arbitration Plaintiffs have not shown the requisite danger of hardship or
injustice, that an appeal would not serve judicial economy, and that an appeal would be
inconsistent with the Federal Arbitration Act.1

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Plaintiffs filed a Reply [Docket No. 171] brief in this matter. Defendants filed a Letter
[Docket No. 172] objecting to the filing of the Reply and addressing the arguments raised
therein. Under Local Rule 7.1(a), reply briefs are not permitted in support of non-dispositive
motions without prior permission of the Court. Under Local Rule 7.1(b), a motion under Rule
54(b) is not a dispostive motion. Plaintiffs called to inform the Court’s Calendar Clerk that they
would file the reply brief, but did not receive permission to do so. To the extent that Plaintiffs
attempted to invoke Local Rule 7.1(c), which adopts the briefing schedule for dispositive
motions for post-trial and post-judgment motions, in filing their reply brief, they cannot do so
because judgment has not yet been entered. For these reasons, Plaintiffs’ Reply and the
substantive legal arguments in Defendants’ Letter were not considered by the Court.
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III. DISCUSSION
A.

Legal Standard
Rule 54(b) of the FRCP provides that in actions with multiple parties the Court may

direct entry of a final judgment as to one or more, but fewer than all, parties if the Court
determines that there is no just reason for delay. Fed. R. Civ. P. 54(b). To grant a motion under
Rule 54(b), the Court must find that (1) a final judgment is at issue and (2) there is no just cause
for delay. Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 7-8 (1980).
A decision to grant a Rule 54(b) motion rests in the “sound discretion” of district courts.
Harris v. Secretary, U.S. Dept. of the Army, 119 F.3d 1313, 1320 (8th Cir. 1997). Nonetheless,
54(b) certification should not be granted routinely or as an accommodation to counsel. Hayden
v. McDonald, 719 F.2d 266, 268 (8th Cir. 1983) (per curiam) (quotations omitted). Rule 54(b)
certification should be granted only if there exists “some danger of hardship or injustice through
delay.” Id. (quotation omitted). Relevant factors for district courts to consider are: (1)
relationship between adjudicated and unadjudicated claims, (2) possibility that future
developments could moot the need for review, (3) the possibility that a reviewing court may be
called to consider the same issue a second time, (4) presence or absence of a claim or
counterclaim that could create a setoff, and (5) miscellaneous factors, including time of trial,
expense, and solvency of the parties. Id. at 269 (quotation omitted).
B.

Analysis
The July 5, 2011 Order dismissed the Arbitration Plaintiffs’ claims without prejudice,

and the parties do not appear to dispute the Order is a final judgment. See Great Rivers Coop. of
S.W. Iowa v. Farmland Indus., Inc., 198 F.3d 685, 689 (8th Cir. 1999) (noting that dismissal

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without prejudice may be a final judgment). Rather, the parties dispute whether there is “just
cause for delay.” Defendants contend that the Arbitration Plaintiffs have failed to identify the
requisite “danger of hardship or injustice.” To the contrary, the central theme of the Arbitration
Plaintiffs’ argument has been that this case presents uniquely high costs that eviscerate their
ability to pursue claims individually in arbitration. Defendants counter that argument by
insisting that the Arbitration Plaintiffs may share costs among themselves and with the other
Plaintiffs as the groups’ claims proceed in parallel arbitration and litigation. Defs.’ Reply Mem.
in Support of Their Mot. to Dismiss or Stay under the Federal Arbitration Act [Docket No. 134]
at 18.
Expense is a factor that the Eighth Circuit has directed district courts to consider in a
Rule 54(b) analysis. Hayden, 719 F.2d at 269. Further, district courts are free to consider any
factor deemed relevant to a Rule 54(b) motion. Kirkwood v. Taylor, 590 F. Supp. 1375, 1387
(D. Minn. 1984). The expense of litigation and arbitration is a very significant issue in this case.
As Defendants noted in support of their successful Motion to Dismiss, coordination of parallel
proceedings will best assist in mitigating the extraordinary costs associated with prosecuting the
claims here. Coordination will best be served by having an immediate appeal because arbitration
costs will be avoided should the Arbitration Plaintiffs prevail and, win or lose, the Arbitration
Plaintiffs will best be able to coordinate the timing of their arbitration or litigation with the other
Plaintiffs if the issue of arbitrability is definitively resolved now. Plaintiffs have made the
requisite showing of a danger of hardship or injustice.
Defendants also argue that judicial economy is best served by denying the Motion
because future events may render the Arbitration Plaintiffs’ appeal moot. Specifically,

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Defendants argue that a future decertification could moot the issue because the Arbitration
Plaintiffs have expressed reluctance to pursue claims individually. That possibility is speculative
and remote. Contrary to Defendants’ assertions, whether the Arbitration Plaintiffs would
individually pursue their claims in litigation is unknown. In particular, part of the Arbitration
Plaintiffs’ concern regarding prohibitive costs is potential confidentiality obligations in
arbitration that would not be implicated if this Court’s decision on arbitrability were reversed.
See Pls.’ July 8, 2011 Letter [Docket No. 148] at n.2 (stating Plaintiffs’ belief that confidentiality
requirements of arbitration would preclude information sharing and increase costs of arbitration).
The parties further dispute whether judicial economy favors Rule 54(b) certification.
Defendants aver judicial economy will be harmed by certification because future unnamed class
members may also have arbitration agreements, which may require arbitrability issues to be
addressed during a future appeal. Defendants’ request for relief in their Motion to Dismiss
[Docket No. 113] was that the Arbitration Plaintiffs be dismissed and that allegations on behalf
of the “Arbitration Subclasses” be struck from the Complaint. That motion was granted and that
relief was granted. July 5, 2011 Order at 11-12. The remaining Plaintiffs are not parties to
agreements to arbitrate with either Defendant. Any future analysis of arbitrability of unnamed
class members, therefore, will focus on typicality and other class certification requirements of
Rule 23 of the Federal Rules of Civil Procedure. Rule 23 and equitable estoppel are not one and
the same, and it is the only the latter that formed the basis of the July 5, 2011 Order. Further, the
threat of “piecemeal appeals” is insufficient to outweigh the Arbitration Plaintiffs’ interests in an
appeal. As recognized in Curtis-Wright, judicial economy is served if “no appellate court would
have to decide the same issues more than once even if there were subsequent appeals.” 446 U.S.

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at 8. The only foreseeable occasion to address the application of equitable estoppel by appeal in
this action is now. Judicial economy is not affected by Rule 54(b) certification here.
Finally, Defendants argue that Rule 54(b) certification here is inconsistent with the
Federal Arbitration Act (the “FAA”). Defendants argue that 9 U.S.C. § 16 evinces an intent of
Congress to allow appeals only of orders that favor litigation over arbitration, and not orders that
favor arbitration, like the Court’s July 5, 2011 Order. In Green Tree Fin. Corp.-Alabama v.
Randolph, the same argument was made–that the FAA allows immediate appeal only of orders
favoring litigation over arbitration. 531 U.S. 79, 86. The Supreme Court disagreed, however,
and noted that the FAA allows immediate appeal of any “final decision with respect to an
arbitration.” Id. (quoting 9 U.S.C. § 16(a)(3)).
Along those lines, Defendants argue that the Arbitration Plaintiffs may not appeal
because no final decision has been made here. This argument is circular. The sole reason that
no final decision exists is because judgment has not yet been entered–which is the precise issue
that is presently before the Court. As noted in Green Tree, the term “final decision” in the
context of the FAA is given its well-developed and longstanding meaning of a decision that
“ends the litigation on the merits and leaves nothing more for the court to do but execute the
judgment.” Id. (citations and quotations omitted). Of course, Green Tree was not a case with
multiple plaintiffs asserting claims, as is the case here.
Where multiple parties and multiple issues are present, Rule 54(b) is the mechanism for
designating final decisions where less than all claims or parties reach an ultimate disposition.
See Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 438 (1959) (noting that Rule 54(b) “does
not supersede any statute controlling appellate jurisdiction,” but rather allows for finality

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requirements to be administered practically in complex litigation). As noted above, it is not
disputed that the dismissal of the Arbitration Plaintiffs’ claims was a “final judgment” with
respect to Rule 54(b), and therefore once judgment is entered, a “final decision” will be rendered
for appeals purposes. Nothing in the FAA countermands entry of judgment here.
IV. CONCLUSION
Based upon all the files, records, and proceedings herein, IT IS HEREBY ORDERED
that the Arbitration Plaintiffs’ Motion Requesting Certification of Final Judgment Pursuant to
Fed. R. Civ. P. 54(b) [Docket No. 161] is GRANTED, and there being no just cause for delay,
the Court pursuant to Rule 54(b) of the Federal Rules of Civil Procedure directs the Clerk to
enter final judgment against the Arbitration Plaintiffs on all claims dismissed in the Court’s
Order dated July 5, 2011 [Docket No. 141].
LET JUDGMENT BE ENTERED ACCORDINGLY.

BY THE COURT:

s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT JUDGE
Dated: August 30, 2011.

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