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
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
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
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, ...