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Ward v. Stewart

United States District Court, N.D. New York

February 26, 2018

KEVIN A. WARD, SR. and PAMELA WARD, individually and as Administrators of the Estate of Kevin A. Ward, Jr., deceased, Plaintiffs,

          THE LANIER LAW FIRM Attorneys for Plaintiffs

          THE LANIER LAW FIRM Attorneys for Plaintiffs

          WOODS OVIATT GILMAN LLP Attorneys for Defendant

          ICE MILLER LAW FIRM Attorneys for Defendant





         Plaintiffs Kevin A. Ward, Sr. and Pamela Ward (collectively "plaintiffs") filed this wrongful death action in state court after defendant Anthony Wayne Stewart ("Stewart" or "defendant") struck and killed their son, Kevin A. Ward, Jr. ("Ward"), during a sprint car race.

         Stewart removed plaintiffs' suit to federal court and asserted an indemnification counterclaim based on two liability releases (the "Releases"). Defendant then tried, and failed, to have the case transferred to the United States District Court for the Western District of New York, Rochester Division. Ward v. Stewart, 133 F.Supp.3d 455 (N.D.N.Y. 2015).

         Thereafter, the parties completed fact discovery and Stewart moved for partial summary judgment. Although he did not challenge plaintiffs' claims alleging reckless or intentional conduct, defendant argued that any negligence-based causes of action were barred by the Releases or, alternatively, by the doctrine of primary assumption of risk.

         Plaintiffs opposed Stewart's partial summary judgment motion and cross-moved seeking dismissal of defendant's counterclaim for indemnification. According to plaintiffs, the Releases on which this counterclaim relied were either inapplicable to the particular facts of this case or completely unenforceable as a matter of state law.

         On December 12, 2017, a Memorandum-Decision & Order resolved these issues. Ward v. Stewart, __ F.Supp.3d __, 2017 WL 6343534 (N.D.N.Y. Dec. 12, 2017) (the "December Order" or the "Order"). As relevant here, the December Order invalidated the Releases, dismissed Stewart's counterclaim, and concluded that disputed issues of fact precluded resolution of defendant's assumption-of-risk defense without the aid of a jury.

         On December 22, 2017, Stewart moved pursuant to 28 U.S.C. § 1292(b) seeking to certify certain portions of the December Order for interlocutory appeal or, in the alternative, for the entry of partial final judgment on his now-dismissed counterclaim pursuant to Federal Rule of Civil Procedure ("Rule") 54(b). Plaintiffs opposed. The motion has been fully briefed and will be decided on the basis of the submissions without oral argument.

         II. DISCUSSION[1]

         Stewart contends this Court should sanction an immediate appeal from the December Order principally because its holding upsets "decades of uniform and consistent law in New York accepting the validity of releases signed by automobile racing participants." Def.'s Mem. at 5.[2] As he tells it, the Order threatens to end "the entire automobile racing industry in the State of New York." Id.

         This hyperbolic account of the possible ramifications of the December Order on New York motorsports is apparently borne of necessity-Stewart's decision to remove this litigation from state court prevents him from taking an immediate appeal unless he can demonstrate the existence of certain, "exceptional" circumstances.

         Unlike civil practice in many state courts, federal appellate jurisdiction is generally limited to review of only the "final decisions" of the district courts. Compare Cobbledick v. United States, 309 U.S. 323, 324 (1940) ("Finality as a condition of review is an historic characteristic of federal appellate procedure."), and Koehler v. Bank of Bermuda Ltd., 101 F.3d 863, 865 (2d Cir. 1996) ("It is a basic tenet of federal law to delay appellate review until a final judgment has been entered."), with Nat'l Asbestos Workers Med. Fund v. Philip Morris, Inc., 71 F.Supp.2d 139, 150 (E.D.N.Y. 1999) (Weinstein, J.) ("In New York, for example, a party can appeal almost any interlocutory trial court order that relates to the merits of the case or that affects a substantial right."), and Richard C. Reilly, Practice Commentaries, C5701:1, N.Y.C.P.L.R. § 5701 ("[A]s a general rule almost anything can be appealed to the appellate division . . . .") (McKinney's 2015).

         "This final-judgment rule, now codified in [28 U.S.C. § 1291], preserves the proper balance between trial and appellate courts, minimizes the harassment and delay that would result from repeated interlocutory appeals, and promotes the efficient administration of justice." Microsoft Corp. v. Baker, 137 S.Ct. 1702, 1712 (2017) (citing Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981)); see also Nat'l Asbestos Workers Med. Fund, 71 F.Supp.2d at 149 (observing that the final-judgment rule preserves, inter alia, "the distinct and vital role of the trial judge in the federal system").

         "In § 1291 Congress has expressed a preference that some erroneous trial court rulings go uncorrected until the appeal of a final judgment, rather than having litigation punctuated by 'piecemeal appellate review of trial court decisions which do not terminate the litigation.'" Fischer v. N.Y. State Dep't of Law, 812 F.3d 268, 273 (2d Cir. 2016) (quoting United States v. Hollywood Motor Car Co., 458 U.S. 263, 265 (1982)).

         But as with nearly every rule, there are exceptions. Stewart identifies two as being relevant in this case: Section 1292(b)'s procedure for certifying a nonfinal order for interlocutory appeal and/or the entry of partial final judgment under Rule 54(b).[3]

         A. Section 1292(b)

         In 1958, Congress created a "procedure for establishing appellate jurisdiction to review nonfinal orders in civil actions." Interlocutory Appeals in the Federal Courts Under 28 U.S.C. § 1292(b), 88 Harv. L. Rev. 607, 609 (1975).

         As relevant here, the statutory enactment vests a district court with discretion to certify an order in a civil action for immediate appeal if (1) it "involves a controlling question of law" (2) "as to which there is substantial ground for difference of opinion" and (3) "an immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b).

         "[T]he proponents of an interlocutory appeal have the burden of showing that all three of the substantive criteria are met." In re Facebook, Inc., IPO Sec. & Derivative Litig., 986 F.Supp.2d 524, 529 (S.D.N.Y. 2014) ("In re Facebook"). However, "even where the three legislative criteria of [§ 1292(b)] appear to be met, district courts retain 'unfettered discretion to deny certification' if other factors counsel against it." Id. (quoting Transp. Workers Union of Am., Local 100, AFL-CIO v. N.Y. City Transit Auth., 358 F.Supp.2d 347, 351 (S.D.N.Y. 2005)).

         As courts have repeatedly observed, § 1292(b) "was not intended to open the floodgates to a vast number of appeals from interlocutory orders in ordinary litigation or to be a vehicle to provide early review of difficult rulings in hard cases." Primavera Familienstifung v. Askin, 139 F.Supp.2d 567, 570 (S.D.N.Y. 2001) (internal citation and quotation marks and citation omitted). Instead, "[c]ertification is only warranted in 'exceptional cases, ' where early appellate review 'might avoid protracted and expensive litigation.'" Id.

         Stewart contends two issues[4] warrant § 1292(b) certification:

1. Whether the Court correctly determined that the Releases are unenforceable pursuant to Section 5-326 of New York's General Obligations Law.
2. Whether the Court correctly denied Stewart's motion for partial summary judgment as to Plaintiffs' negligence claims, based on its finding that there were questions of fact regarding Ward, Jr.'s assumption of the risk.

         At the outset, these issues do not stand out as the kind of "exceptional" ones seemingly contemplated by § 1292(b). Whether considered individually or in combination, they appear on their face to be precisely the sort of run-of-the-mill litigation disputes that are raised (by parties) and resolved (by trial courts) during the course of nearly any civil matter.

         By framing the issues in this way, Stewart signals that his desire for an immediate appeal is based on simple disagreement: either the December Order answered these questions wrong, or that the questions themselves are difficult to answer when applied to the facts of this case.

         But neither of those arguments are of a type that would ordinarily provide a basis for immediate appeal under § 1292(b). Weber v. United States, 484 F.3d 154, 159 n.3 (2d Cir. 2007) ("Congress did not intend 28 U.S.C. § 1292(b) to serve an error-correction function."); Williston v. Eggleston, 410 F.Supp.2d 274, 276 (S.D.N.Y. 2006) ("Interlocutory appeal was not intended as a vehicle to provide early review of difficult rulings in hard cases . . . . ").

         This is because the federal policy restricting interlocutory appeals to only truly "exceptional" situations aligns with a simple reality: even incorrectly decided, a nonfinal order partially denying summary judgment-like the December Order at issue here-is generally of no immediate consequence to anyone other than the parties themselves. See, e.g., Camreta v. Greene, 563 U.S. 692, 709 n.7 ("A decision of a federal district court judge is not binding precedent in either a different judicial district, the same judicial district, or even upon the same judge in a different case."); Oneida Indian Nation of N.Y. v. Pifer, 840 N.Y.S.2d 672, 674 (N.Y. A.D.3d Dep't 2007) ("Federal court rulings on issues of state law are not binding on state courts.").

         1. The Releases

         In other words, even assuming the December Order overlooked, failed to apply, (or, as Stewart's moving papers suggest, disregarded), a "well-established exception" to the applicability of § 5-326 of New York's General Obligations Law, then the Order itself poses no danger at all-other courts considering the issue will surely locate the exception and are free to apply it in appropriate cases. Cf. Transp. Workers Union of Am., Local 100, AFL-CIO, 358 F.Supp.2d at 354 ("Certification is to be reserved for the exceptional case in which the law is fundamentally uncertain.").

         The bigger problem for Stewart's argument, though, is that no such blanket "motorsports-participation" exception to § 5-326 exists. Among other things, a party seeking § 1292(b) certification may demonstrate there is "substantial ground for difference of opinion" on a controlling question of law by showing "there is genuine doubt as to whether the district court applied the correct legal standard in its order." In re Facebook, 986 F.Supp.2d at 540.

         In order to make this determination, "the district court must analyze the strength of the arguments in opposition to the challenged ruling in order to determine whether the issue for appeal is truly one on which there is a substantial ground for dispute." Jackson v. Caribbean Cruise Line, Inc., 88 F.Supp.3d 129, 142 (E.D.N.Y. 2015) (citation and internal quotation marks omitted).

         That analysis begins, again, with the language of the relevant provision itself. Section 5-326 of New York's General Obligations Law provides that:

[e]very covenant, agreement or understanding in or in connection with, or collateral to, any contract, membership application, ticket of admissions or similar writing, entered into between the owner or operator of any pool, gymnasium, place of amusement or recreation, or similar establishment and the user of such facilities, pursuant to which such owner or operator receives a fee or other compensation for the use of such facilities, which exempts the said owner or operator from liability for damages caused by or resulting from the negligence of the owner, operator or person in charge ...

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