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December 24, 2002


The opinion of the court was delivered by: John G. Koeltl, United States District Judge


The plaintiffs, Pamela K. Martens ("Martens") and Judith P. Mione ("Mione") (collectively "the plaintiffs"), are among the named plaintiffs in this employment discrimination class action against Smith Barney, Inc. ("Smith Barney") and two of its officers, including James Dimon ("Dimon"). The plaintiffs allege violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as well as additional federal and New York State laws. Martens and Mione now move pursuant to 28 U.S.C. § 1292(b) for an order certifying for interlocutory appeal the May 3, 2002 Opinion and Order ("Opinion and Order") of Judge Motley to whom this case was then assigned. The Opinion and Order granted the defendants' motion to compel arbitration of the plaintiffs' outstanding claims. In the alternative, the plaintiffs move for reconsideration of the same Opinion and Order on the ground that the Court erred in denying discovery into the costs of arbitration.


This case has a lengthy history that has taken it through the district court and the Court of Appeals, and now places the action in this Court upon reassignment from Judge Motley. Familiarity with the prior opinions is presumed.

This case began as a nationwide class action in which Martens, Mione, and additional named plaintiffs sued their employer, Smith Barney, for, among other claims, gender discrimination, harassment, and retaliation in violation of Title VII. On July 28, 1998, the district court approved an amended settlement agreement ("Settlement Agreement") among the parties. Martens v. Smith Barney Inc., 96 Civ. 3779, 1998 WL 1661385 (S.D.N.Y. July 28, 1998), which became effective on February 1, 1999. Plaintiffs Martens and Mione opted out of the class, however, and were not bound by the Settlement Agreement. Id. at *4 & Ex. A.

As a condition of employment with Smith Barney, Martens and Mione each signed a Uniform Application for Securities Registration ("Form U-4") with the National Association of Securities Dealers ("NASD") requiring that any employment dispute between the plaintiffs and defendants be arbitrated rather than resolved in court. Martens v. Smith Barney, Inc., 190 F.R.D. 134, 136, 138 (S.D.N.Y. 1999). Martens and Mione also signed Smith Barney's own mandatory arbitration policy contained in various Smith Barney Employee Handbooks and Applications for Employment. Martens v. Smith Barney, Inc., 96 Civ. 3997, 2002 WL 867666, at *1 (S.D.N.Y. May 3, 2002) (hereinafter Martens I). Martens and Mione now challenge the enforceability of these provisions.

In August 1999, Dimon and Smith Barney moved to compel arbitration of Martens' and Mione's claims. Without ruling on the defendants' motion, Judge Motley dismissed the plaintiffs' claims for failure to prosecute. See Martens v. Smith Barney, Inc., 194 F.R.D. 110 (S.D.N.Y. 2000).*fn1 The Court of Appeals for the Second Circuit reversed the dismissal and remanded the case to the district court. See Martens v. Thomann, 273 F.3d 159, 179-82 (2d Cir. 2001).

Judge Motley then afforded the parties the opportunity to file any relevant motions by March 8, 2002. Order filed Feb. 25, 2002. In response, Martens and Mione moved to supplement their papers in opposition to Smith Barney's still-open motion to compel arbitration. Specifically, the plaintiffs argued that the Supreme Court's intervening decision in Green Tree Financial Corp. — Alabama v. Randolph, 531 U.S. 79 (2000), compelled the district court to allow the plaintiffs to conduct limited discovery into the costs of arbitration prior to ruling on the defendants' motion.

In an Opinion and Order filed on May 3, 2002, the district court granted the defendants' motion to compel arbitration pursuant to the Form U-4 arbitration provision signed by both Martens and Mione. Martens I, 2002 WL 867666, at *1. Judge Motley denied the plaintiffs' motion to file a supplemental memorandum as moot. Id. Shortly thereafter, the case was transferred from Judge Motley to this Court.


The plaintiffs now move for an order certifying for interlocutory appeal Judge Motley's Opinion and Order granting the defendants' motion to compel arbitration. In the alternative, the plaintiffs seek reconsideration of the decision on the ground that the district court erred in denying limited discovery into the cost of arbitration.

28 U.S.C. § 1292(b) provides that a district court may certify an interlocutory order for appeal if it is of the opinion that (1) the order "involves a controlling question of law;" (2) "as to which there is substantial ground for difference of opinion;" and (3) "that an immediate appeal of the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b). The determination of whether § 1292(b) certification is appropriate under these standards lies within the discretion of the district court. See, e.g., Ferraro v. Sec'y of U.S. Dep't of Health & Human Servs., 780 F. Supp. 978, 979 (E.D.N.Y. 1992) (collecting cases and citations).

Interlocutory appeals under Section 1292(b) are an exception to the general policy against piecemeal appellate review embodied in the final judgment rule, and only "exceptional circumstances [will] justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978); see also Flor v. Bot Fin. Corp., 79 F.3d 281, 284 (2d Cir. 1996) (per curiam) (collecting cases). Because piecemeal litigation is generally discouraged, the Court of Appeals has repeatedly emphasized that a district court is to "exercise great care in making a § 1292(b) certification." Westwood Pharm., Inc. v. Nat'l Fuel Gas Distrib. Corp., 964 F.2d 85, 89 (2d Cir. 1992) see also Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro in Amministrazione Straordinaria, 921 F.2d 21, 25 (2d Cir. 1990) ("The power to grant an interlocutory appeal must be strictly limited to the precise conditions stated in the law.") (internal alteration omitted) (quoting Gottesman v. Gen. Motors Corp., 268 F.2d 194, 196 (2d Cir. 1959)). Section 1292(b) was not intended "to open the floodgates to a vast number of appeals from interlocutory orders in ordinary litigation," Telectronics Proprietary, Ltd. v. Medtronic, Inc., 690 F. Supp. 170, 172 (S.D.N.Y. 1987) (internal quotation marks omitted), or to be a "vehicle to provide early review of difficult rulings in hard cases." German v. Fed. Home Loan Mortgage Corp., 896 F. Supp. 1385, 1398 (S.D.N.Y. 1995); see also Abortion Rights Mobilization, Inc. v. Regan, 552 F. Supp. 364, 366 (S.D.N.Y. 1982); McCann v. Communications Design Corp., 775 F. Supp. 1506, 1534 (D. Conn. 1991). Rather certification is warranted only in exceptional cases, where early appellate review "might avoid protracted and expensive litigation." Telectronics, 690 F. Supp. at 172; see also In re Buspirone Patent Litigation, 210 F.R.D. 43, 49 (S.D.N.Y. 2002); German, 896 F. Supp. at 1398.

Finally, the institutional efficiency of the federal court system is among the chief concerns underlying § 1292(b). The efficiency of both the district court and the appellate court are to be considered, and the benefit to the district court of avoiding unnecessary trial time must be weighed against the inefficiency of having the relevant Court of Appeals hear multiple appeals in the same case. See Harriscom Svenska AB v. Harris Corp., 947 F.2d 627, 631 (2d Cir. 1991) ("It does not normally advance the interests of sound judicial economy to have piecemeal appeals that require two (or more) three-judge panels to familiarize themselves with a given case, instead of having the trial judge, who sits alone and is intimately familiar with the whole case, ...

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