On May 12, 2010, the Court issued a Memorandum-Decision and Order (Dkt. No. 18) (the "May Order") in the above-captioned case, granting, in part, Defendants' Motion to dismiss (Dkt. No. 5). The Court's May Order dismissed with prejudice that portion of Plaintiffs' first cause of action, see Compl. (Dkt. No. 1, Ex. D), predicated on Defendants' allegedly negligent conduct prior to March 21, 2005, as the Court determined any claim for relief for that conduct was barred by the applicable statute of limitations. The Court dismissed without prejudice that portion of the first cause of action predicated on alleged negligence occurring after March 21, 2005. Id. The Court also dismissed Plaintiffs' remaining claims. Id.
Presently before the Court is Plaintiffs' Motion brought pursuant to Federal Rule of Civil Procedure 54(b) seeking entry of a final judgment with respect to the Court's May 12, 2010 dismissal with prejudice of Plaintiffs' pre-March 21, 2005 negligence claims, or alternatively, certifying, pursuant to 28 U.S.C. § 1292 and Rule 5(b) of the Federal Rules of Appellate Procedure, an interlocutory appeal challenging dismissal of those claims. Dkt. No. 20 ("Motion for Leave to Appeal"). For the following reasons, Plaintiffs' Motion is denied.
The Court assumes the parties' familiarity with the facts underlying this action. For a complete statement of those facts, reference should be made to the Complaint and the May Order.
In their Motion for Leave to Appeal, Plaintiffs focus on this Court's treatment of their first cause of action. In that first claim, Plaintiffs assert that Defendants committed professional negligence in their provision of accounting services. Compl. ¶¶ 74-84. The allegedly negligent acts occurred between September 2003 and December 2005. Id. ¶¶ 20-24, ¶¶ 74-84. Plaintiffs assert that cumulatively, this alleged negligence caused them to suffer damages in excess of $3,000,000. Id. ¶ 84.
The Court dismissed this first cause of action after an extended discussion in which it determined that New York's borrowing statute, see N.Y. C.P.L.R. 202, was applicable to this action; that under that statute, New York law provided the applicable statute of limitations and discovery and tolling rules, see N.Y. C.P.L.R. 203, 207, 214; the conduct underlying a portion of Plaintiffs' professional negligence claim occurred outside of the statute of limitations and were thus time-barred; and other conduct underlying that claim occurred within the limitations period, but Plaintiffs' pleadings did not allow the Court or a fact-finder to determine which of Plaintiffs' alleged damages were attributable to such conduct. May Order at 7-17. Accordingly, the Court segmented its dismissal of Plaintiffs' claim: it dismissed with prejudice for reason of untimeliness that portion predicated on alleged negligence occurring before March 21, 2005, and dismissed without prejudice that portion predicated on alleged negligence occurring after March 21, 2005, allowing Plaintiffs to re-plead their claim so as to allow for a damage assessment should they be successful in the litigation. Id.
In finding that New York law controlled with regard to both the statute of limitations and discovery rule and tolling provisions, the Court rejected Plaintiffs' argument that New Jersey's discovery rule should apply even as New York law provided the limitations period.*fn1 May Order at 10. The Court found that "there is no sound reason or applicable precedent given for why this isolated element of New Jersey law should be taken to operate in the present case." Id.
Plaintiffs now seek certification under Rule 54(b) as to that portion of their professional negligence claim that was dismissed with prejudice, or alternatively, seek leave to appeal the Court's determination that New Jersey's discovery rule is inapplicable to this case. Mot. for leave to appeal. Should their request for certification be granted, Plaintiffs plan to petition the Second Circuit Court of Appeals to certify this same issue to the New York State Court of Appeals for definitive resolution of what they characterize as a narrow legal issue of state law. See Pls.' Mem. in Supp. (Dkt. No. 20-1) at 1. They further ask for an order staying this litigation pending the disposition of their appeal. Id. at 16-17.
III. CERTIFICATION UNDER RULE 54(b)
Federal Rule of Civil Procedure 54(b) provides, in relevant part, "[w]hen an action presents more than one claim for relief . . . the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay." FED. R. CIV. P. 54(b). "Thus, to have a final judgment under the rule, (1) multiple claims or multiple parties must be present, (2) at least one claim, or the rights and liabilities of at least one party, must be finally decided within the meaning of 28 U.S.C. § 1291, and (3) the district court must make 'an express determination that there is no just reason for delay' and expressly direct the clerk to enter judgment." Ginett v. Computer Task Group, 962 F.2d 1085, 1091 (2d Cir. 1992) (emphasis omitted). 28 U.S.C. § 1291 conditions appeal on there being a "final decision," see Acha v. Beame, 570 F.2d 57, 62 (2d Cir. 1978), which is defined as a judgment or order "that conclusively determines the pending claims of all the parties to the litigation, leaving nothing for the court to do but execute its decision." Citizens Accord, Inc. v. Town of Rochester, 235 F.3d 126, 128 (2d Cir. 2000). A non-final ruling "may not be certified regardless of whether the district court makes the requisite express determination that there is no just cause for delay. This category of 'non-final ruling' includes an order granting or denying summary judgment that only partially adjudicates the claim, or an order dismissing only a portion of a claim." Information Res. v. Dun and Bradstreet Corp., 294 F.3d 447, 451-52 (2d Cir. 2002) (quotation marks and citations omitted).
Rule 54(b) is meant to "preserve the historic federal policy against piecemeal appeals." Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 438 (1956). Hence, with respect to the third step of the above inquiry, "[g]enerally, a district court may properly make a finding that there is 'no just reason for delay' only when 'there exists some danger of hardship or injustice through delay which would be alleviated by immediate appeal.'" Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 16 (2d Cir. 1997) (quoting Cullen v. Margiotta, 811 F.2d 698, 711 (2d Cir. 1987)). Additionally, in determining whether a case warrants Rule 54 certification, "a district court must take into account judicial administrative interests as well as the equities involved." Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 8 (1980); see also Ginett, 962 F.2d at 1095. A district court's power to enter a final judgment under Rule 54(b) should "be exercised sparingly." Harriscom Svenska AB v. Harris Corp., 947 F.2d 627, 629 (2d Cir. 1991). Accordingly, "certification of the dismissal of fewer than all the claims in an action should not be granted if the same or closely related issues remain to be litigated." Id. (quotations and citations omitted)
Plaintiffs assert that "there can be no dispute that the Plaintiffs satisfy the first two prongs of [the above] standard." Pls.' Mem. in Supp. at 5. As to the third prong, they argue that Rule 54(b) certification in this action serves the interests of judicial economy, as it will eliminate the potential for duplicative trial and discovery costs. Id. at 6. Additionally, Plaintiffs contend that certification will not burden the Court of Appeals for the Second Circuit because, upon certification by this Court, they intend to move to have the Second Circuit certify to the New York Court of Appeals, what they characterize as a narrow legal issue of first impression that is central to this action, namely the proper application of the N.Y. C.P.L.R. 202 borrowing statute. Id. at 6-9.
Defendants contest each of Plaintiffs' arguments. They assert that the Court has not issued a "final decision" as to Plaintiffs' professional negligence claim since other conduct contained in that same claim remains to be litigated. Defendants argue that the Court has an ongoing role in determining the merits of Plaintiffs' first cause of action, that the claim is not "final" for purposes of 28 U.S.C. § 1291, and certification, therefore, must be denied. Opp'n Mem. (Dkt. No. 22) at 10-14. Next, Defendants note that judicial economy is only one consideration in a court's determination of whether "there is no just reason for delay;" another important consideration is whether an immediate appeal would alleviate some degree of hardship. Id. at 14 (citing Ansam Assoc. Inc., v. Cola Petroleum, Ltd., 760 F.2d 442, 445 (2d Cir. 1985) for the proposition that judicial economy alone is an insufficient basis for Rule 54(b) certification). Defendants emphasize that Plaintiffs ...