ALEYNIKOV v. THE GOLDMAN SACHS GROUP, INC.

Filing 402

OPINION. Signed by Judge Kevin McNulty on 4/14/2021. (ams, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
SERGEY ALEYNIKOV,
Plaintiff,
v.

Civ. No. 12-05994 (KM) (MAH)
OPINION

THE GOLDMAN SACHS GROUP, INC.,
Defendant.
KEVIN MCNULTY, U.S.D.J.:
This is a long running case between Sergey Aleynikov and Goldman
Sachs Group (“GSG”), the parent company of his former employer. I previously
granted GSG’s motion for judgment on the pleadings as to Mr. Aleynikov’s
claims and denied Mr. Aleynikov’s cross-motion. (DE 372, 373.) Counterclaims
remain. Now, Mr. Aleynikov moves, pursuant to Federal Rule of Civil Procedure
54(b), to convert that order to an appealable, final decision. (DE 399.) GSG
does not oppose the motion. (DE 400.) For the following reasons, the motion is
GRANTED.
I.

BACKGROUND
The background is more fully set out in a prior opinion. Aleynikov v.

Goldman Sachs Grp., Inc. (Rule 12(c) Op.), Civ. No. 12-5994, 2018 WL 1919834,
at *1–3 (D.N.J. Apr. 23, 2018). As relevant here, Mr. Aleynikov faced federal,
then state, criminal prosecution for allegedly transferring source code out of
GSG. Id. at *1. He brought this action seeking legal fees from GSG, alleging
that GSG’s bylaws promised fees to “officers,” and that he qualified as an
“officer” by virtue of his title as vice president. Id. at *1–2. (I will call the claims
for attorney’s fees the “original claims.”)
GSG counterclaimed, based on Mr. Aleynikov’s alleged theft of computer
code, alleging breach of contract, misappropriation of trade secrets, and
conversion. Aleynikov v. Goldman Sachs Grp., Inc. (SJ Op.), Civ. No. 12-5994,

2013 WL 5739137, at *2 (D.N.J. Oct. 22, 2013). Mr. Aleynikov asserted
counterclaims-in-reply, of which malicious prosecution, abuse of process, and
tortious interference remain (I will refer to these and GSG’s counterclaims
together as the “counterclaims”). See Aleynikov v. Goldman Sachs Grp., Inc.
(Counterclaim Op.), Civ. No. 12-5994, 2016 WL 6440122, at *2 (D.N.J. Oct. 28,
2016).
On the original claims for fees, I granted partial summary judgment in
Mr. Aleynikov’s favor, holding that he was entitled to advancement of certain
fees under a Delaware statute. SJ Op., 2013 WL 5739137, at *22–22. The
issues depended on interpretation of the corporate bylaws, and I relied in part
on the Delaware doctrine of contra proferentem, which provides that
ambiguities in bylaws are construed in favor of the non-drafting party, here,
Mr. Aleynikov. Id. at *18–20. In a 2–1 panel decision (Judge Fuentes dissented),
the Third Circuit reversed and remanded, holding that, under its interpretation
of Delaware law, (1) fact issues remained as to whether Mr. Aleynikov qualified
as an “officer” under the bylaws, and (2) contra proferentem was inapplicable.
Aleynikov v. Goldman Sachs Grp., Inc. (Appeal Op.), 765 F.3d 350 (3d Cir.
2014).
Mr. Aleynikov then brought a separate action in Delaware Chancery
Court, seeking legal fees incurred in the distinct context of defending against
GSG’s counterclaims. Rule 12(c) Op., 2018 WL 1919834, at *3. That court
expressed skepticism of the Third Circuit’s interpretation of Delaware law, but
felt bound by issue preclusion to apply it. Following a bench trial, the Delaware
court applied the Third Circuit interpretations of Delaware law and found that
Mr. Aleynikov had not met his burden to show that he was an officer for these
purposes. The Delaware Supreme Court affirmed. Id.
Back in this Court, GSG and Mr. Aleynikov each moved, pursuant to
Rule 12(c), for judgment on the pleadings as to Mr. Aleynikov’s claims for
advancement of fees, i.e., the original claims. Id. Because the Delaware court
had held a trial on the “officer” issue, GSG argued that the Delaware court’s

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decision had to be given preclusive effect. Id. at *5. I agreed, granted GSG’s
motion, and denied Mr. Aleynikov’s. Id. at *9.
Mr. Aleynikov asks that I convert my order granting judgment on the
pleadings as to the original claims into a final judgment, which he can appeal.
See Fed. R. Civ. P. 54(b). The counterclaims remain to be dealt with separately.
II.

DISCUSSION
Generally, a litigant may appeal only a final decision of the district court.

28 U.S.C. § 1291; Def. Distrib. v. Att’y Gen. of N.J., 972 F.3d 193, 198 (3d Cir.
2020). An order granting judgment on the pleadings as to some, but not all
claims, is not “final.” In re Fosamax (Alendronate Sodium) Prods. Liab. Litig. (No.
II), 751 F.3d 150, 156 (3d Cir. 2014). But Fed. R. Civ. P. 54(b) allows a district
court to convert such a partial order into a final, appealable decision. Id.
Rule 54(b) “requires that a district court first determine whether there
has been an ultimate disposition on a cognizable claim for relief,” i.e., whether
there is a “final judgment” on that claim. Elliott v. Archdiocese of N.Y., 682 F.3d
213, 220 (3d Cir. 2012) (quotation marks and citation omitted). If there is, the
court decides “whether there is any just reason for delay, taking into account
judicial administrative interests as well as the equities involved.” Id.
That threshold finality requirement is satisfied here. For Rule 54(b)
purposes, an order is final when it “end[s] the litigation on the merits” as to a
specific claim in a multi-claim action. Gerardi v. Pelullo, 16 F.3d 1363, 1369
(3d Cir. 1994) (citation omitted); Sussex Drug Prods. v. Kanasco, Ltd., 920 F.2d
1150, 1153–54 (3d Cir. 1990). Orders granting judgment on the pleadings are
final as to those claims. See Mele v. Fed. Rsrv. Bank of N.Y., 359 F.3d 251, 253
(3d Cir. 2004). Because there is nothing left to do on the original claims besides
execute the judgment, they can be “dispatch[ed]” to the Court of Appeals.
Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 8 (1980).
Next, the Third Circuit has identified factors to consider when deciding
whether there is “just reason for delay”:
(1) the relationship between the adjudicated and unadjudicated
claims;
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(2) the possibility that the need for review might or might not be
mooted by future developments in the district court;
(3) the possibility that the reviewing court might be obliged to
consider the same issue a second time;
(4) the presence or absence of a claim or counterclaim which could
result in set-off against the judgment sought to be made final;
(5) miscellaneous factors such as delay, economic and solvency
considerations, shortening the time of trial, frivolity of competing
claims, expense, and the like.
Berckeley Inv. Grp., Ltd. v. Colkitt, 455 F.3d 195, 202 (3d Cir. 2006) (citation
omitted) (formatting altered). I apply those five factors as follows.
First, the adjudicated original claims are distinct from the unadjudicated
counterclaims. The former relate to the interpretation of GSG’s bylaws, while
the latter relate to Mr. Aleynikov’s alleged crimes and the investigation thereof.
In other words, the original claims involve narrow contract interpretation
issues as to Mr. Aleynikov’s position at GSG as it relates to the issue of
advancement of fees under a Delaware statute and the bylaws; the
counterclaims, by contrast, involve a separate sequence of events and tort
claims arising therefrom. The two can proceed on separate tracks.
Second, there are no likely future developments in this Court that will
moot appellate review of the original claims. The counterclaims’ resolution will
not impinge on the legal issues underlying the original claims.
Third, because the original claims and counterclaims are distinct, the
Third Circuit will not have to reconsider issues decided by an appeal of the
original claims in a later appeal of the counterclaims.
Fourth, there is no set-off, at least in the current state of affairs. The
original claims were dismissed. Any such issues will be moot in the case of
affirmance and can be addressed in the event of reversal.
Fifth, administrative concerns support allowing an immediate appeal. An
appeal relating to the original claims will not delay proceedings on the
counterclaims, as the parties appear to agree. They have submitted a

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consensual discovery schedule for the counterclaims, which the Court soordered. (DE 398.)
The Third Circuit could adhere to its prior decision as law of the case,
apply it to this Rule 54(b) appeal, and affirm. That will dispose of the issue in
one way. On the other hand, it could revisit the reasoning of its prior decision,
given the unusual paths this case has taken. As an appeal reversing summary
judgment and finding an issue of fact, that ruling was in some sense
provisional, and the Court might revisit the law of the case in light of the
Delaware court’s evolving view of applicable Delaware law.
I express no view, and do not presume to handicap litigants’ chances on
appeal. My only point is that, either way, an immediate appeal is likely to
streamline the case by disposing of an important yet severable component.
Thus, I expressly determine that there is no just reason for delay.
III.

CONCLUSION
For the reasons set forth above, Mr. Aleynikov’s Rule 54(b) motion is

granted. A separate order will issue.
Dated: April 14, 2021
/s/ Kevin McNulty
___________________________________
Hon. Kevin McNulty
United States District Judge

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