UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
decided: December 26, 1974.
CYNTHIA JO SAMUEL AND DENA MEYERS, INDIVIDUALLY, AND ON BEHALF OF ALL OTHER PERSONS SIMILARLY SITUATED, PLAINTIFFS, APPELLANTS PATRICIA FARLEY AND CYNTHIA LAMBERT, INTERVENING PLAINTIFFS
UNIVERSITY OF PITTSBURGH, THE PENNSYLVANIA STATE UNIVERSITY, INDIANA UNIVERSITY OF PENNSYLVANIA, TEMPLE UNIVERSITY, AND ALL OTHER STATE AND STATE-RELATED UNIVERSITIES AND COLLEGES IN THE COMMONWEALTH OF PENNSYLVANIA SIMILARLY SITUATED; WESLEY POSVAR, CHANCELLOR OF THE UNIVERSITY OF PITTSBURGH; JOHN W. OSWALD, PRESIDENT OF THE PENNSYLVANIA STATE UNIVERSITY; WILLIAM W. HASSOER, PRESIDENT OF INDIANA UNIVERSITY OF PENNSYLVANIA; PAUL R. ANDERSON, PRESIDENT OF TEMPLE UNIVERSITY, AND ALL OTHER CHANCELLORS AND PRESIDENTS OF ALL OTHER STATE AND STATE-RELATED UNIVERSITIES AND COLLEGES IN THE COMMONWEALTH OF PENNSYLVANIA SIMILARLY SITUATED; THE BOARDS OF TRUSTEES OF THE UNIVERSITY OF PITTSBURGH, THE PENNSYLVANIA STATE UNIVERSITY, INDIANA UNIVERSITY OF PENNSYLVANIA, TEMPLE UNIVERSITY, AND THE BOARDS OF TRUSTEES OF ALL OTHER STATE AND STATE-RELATED UNIVERSITIES AND COLLEGES IN THE COMMONWEALTH OF PENNSYLVANIA SIMILARLY SITUATED; WILLIAM H. REA, CHAIRMAN OF THE BOARD OF TRUSTEES OF THE UNIVERSITY OF PITTSBURGH AND ALL OTHER PERSONS ON THE BOARD OF TRUSTEES OF THE UNIVERSITY OF PITTSBURGH; ALBERT SHOEMAKER, CHAIRMAN OF THE BOARD OF TRUSTEES OF THE PENNSYLVANIA STATE UNIVERSITY AND ALL OTHER PERSONS ON THE BOARD OF TRUSTEES OF THE PENNSYLVANIA STATE UNIVERSITY; AND ALL OTHER PERSONS ON THE BOARD OF TRUSTEES OF THE PENNSYLVANIA STATE UNIVERSITY; JOSEPH W. SERENE, CHAIRMAN OF THE BOARD OF TRUSTEES OF INDIANA UNIVERSITY OF PENNSYLVANIA AND ALL OTHER PERSONS ON THE BOARD OF TRUSTEES OF INDIANA UNIVERSITY OF PENNSYLVANIA; WILLIAM R. SPOFFORD, CHAIRMAN OF THE BOARD OF TRUSTEES OF TEMPLE UNIVERSITY AND ALL OTHER PERSONS ON THE BOARD OF TRUSTEES OF TEMPLE UNIVERSITY AND ALL OTHER CHAIRMEN AND ALL OTHER PERSONS ON THE BOARDS OF TRUSTEES OF ALL OTHER STATE AND STATE-RELATED UNIVERSITIES AND COLLEGES IN THE COMMONWEALTH OF PENNSYLVANIA SIMILARLY SITUATED; R. V. ALLSHOUSE, REGISTRAR OF THE UNIVERSITY OF PITTSBURGH, AND ALL OTHER REGISTRARS OR PERSONS HOLDING SIMILAR POSITIONS IN ALL OTHER STATE AND STATE-RELATED UNIVERSITIES AND COLLEGES IN THE COMMONWEALTH OF PENNSYLVANIA SIMILARLY SITUATED; FREDERICK SEHRING, ASSISTANT REGISTRAR OF THE UNIVERSITY OF PITTSBURGH, AND ALL OTHER ASSISTANT REGISTRARS OR PERSONS HOLDING SIMILAR POSITIONS IN ALL OTHER STATE AND STATE-RELATED UNIVERSITIES AND COLLEGES IN THE COMMONWEALTH OF PENNSYLVANIA SIMILARLY SITUATED; MILTON J. SHAPP, GOVERNOR OF THE COMMONWEALTH OF PENNSYLVANIA; J. SHANE CREAMER, ATTORNEY GENERAL OF THE COMMONWEALTH OF PENNSYLVANIA; ROBERT P. CASEY, AUDITOR GENERAL OF THE COMMONWEALTH OF PENNSYLVANIA; AND EACH AND EVERY NAMED DEFENDANT AND EACH AND EVERY DEFENDANT SUBJECT TO JURISDICTION BY REPRESENTATION, INDIVIDUALLY AND IN THEIR OFFICIAL CAPACITY
Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil Action No. 71-1202).
Van Dusen, Hunter and Garth, Circuit Judges
Author: Van Dusen
Opinion OF THE COURT
VAN DUSEN, Circuit Judge.
This is an appeal by the plaintiffs, two married, female graduate students at the University of Pittsburgh,*fn1 who also represent all married female students who since 1967 have attended any of the three defendant universities and who were classified as out-of-state students for tuition purposes on the basis of Rule B(2) of the Auditor General of Pennsylvania. See Samuel v. University of Pittsburgh, 56 F.R.D. 435 (W.D. Pa. 1972) (certification of plaintiff class). Plaintiffs appeal from an order entered by the District Court for the Western District of Pennsylvania on June 7, 1974. The order directed the defendant universities to bear the expense of identifying members of plaintiff class and notifying them that, although the defendants had been found liable to the plaintiffs as a class, their damage claims would not be adjudicated on a class-wide basis. For the reasons discussed herein, we find that the appeal must be dismissed for want of a final, appealable order.*fn2 See 28 U.S.C. § 1291.
The plaintiffs brought this action on December 28, 1971, to challenge the constitutionality of the Auditor General's Rule B(2), which classified*fn3 women students as resident or nonresident for tuition purposes. It provided:
"The domicile of a wife (adult or minor) is that of her husband. Where, however, an unmarried woman enrolled as a student having a Pennsylvania resident status marries a non-Pennsylvania resident, she shall continue to be classified as a Pennsylvania resident within the meaning of these Rules." Samuel v. University of Pittsburgh, 56 F.R.D. 435, 437 n.1 (W.D. Pa. 1972).
The plaintiffs assert that the rule denied female students equal protection of the laws. They sought both to have the operation of the Rule enjoined*fn4 and to have restitution made of such tuition amounts as were unconstitutionally collected. The district court certified the above-mentioned class in an opinion and order dated August 21, 1972. Samuel v. University of Pittsburgh, 56 F.R.D. 435 (W.D. Pa. 1972). On October 5, 1972, the district court ordered the members of the plaintiff class to be individually notified at their representatives' expense. On April 10, 1974, the district court by opinion and order found for the plaintiffs on the ground of the rule's unconstitutionality, but at the same time "decertified" the class with respect to the class members' damage claims. Samuel v. University of Pittsburgh, 375 F. Supp. 1119 (W.D. Pa. 1974). Motions of the plaintiffs to enter final judgment on the April 10, 1974, order pursuant to F.R. Civ. P. 54(b), and to certify the decertification of the class for interlocutory appeal pursuant to 28 U.S.C. § 1292(b), were denied on May 1 and May 29, 1974, respectively. On June 7, 1974, the court ordered the defendant universities to send, at their own expense, an approved form of notice of decertification to the class members. The plaintiffs filed timely notice of appeal from this last order, which order was stayed by this court, pending appeal, on July 10, 1974.*fn5
The plaintiffs-appellants assert this court's jurisdiction on the basis of criteria for application of the "collateral order doctrine" set forth in Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S. Ct. 2140, 42 U.S.L.W. 4804, 40 L. Ed. 2d 732 (1974).*fn6 In Eisen the Court held that an order allowing a suit to proceed as a class action and allocating to the defendants a substantial portion of the cost of notifying the plaintiff class was a "final" decision within the meaning of 28 U.S.C. § 1291. Rejecting any "verbal formula," the Court found a touchstone for the interpretation of § 1291 in the "'practical'" inquiry whether "'the inconvenience and costs of piecemeal review'" outweigh "'the danger of denying justice by delay,'" 417 U.S. at 171, 42 U.S.L.W. at 4808, quoting Cohen v. Beneficial Loan Corp., 337 U.S. 541, 546, 93 L. Ed. 1528, 69 S. Ct. 1221 (1949), and Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, 511, 94 L. Ed. 299, 70 S. Ct. 322 (1950). The Court reaffirmed two criteria in the Cohen decision:
"First, the District Court's finding was not 'tentative, informal or incomplete,' 337 U.S. at 546, but settled conclusively the corporation's claim that it was entitled by state law to require the shareholder to post security for costs. Second, the decision did not constitute merely a 'step toward final disposition of the merits of the case . . . .' Ibid. Rather, it concerned a collateral matter that could not be reviewed effectively on appeal from the final judgment."
417 U.S. at 171, 42 U.S.L.W. at 4808.
We find that the second Cohen criterion is not met by the district court's June 7, 1974, order.*fn7 The plaintiffs believe that the second criterion is satisfied because the June 7 order "involves a matter unrelated to any issue remaining before the District Court" and the class plaintiffs "can proceed no further in the District Court," thus making the order "a final disposition of class Plaintiffs' rights."*fn8 Plaintiffs'-Appellants' Reply to Defendants-Appellees' Motions to Dismiss at 5-6. Such an approach to the question of finality fails to confront the basic issue identified by the Court in Eisen, namely, whether the burdens of piecemeal review are justified by the injustice potentially resulting from delay.
The orders appealed from in Eisen and Cohen exemplify the sorts of matters which "could not be reviewed effectively on appeal from the final judgment." 417 U.S. at 171, 42 U.S.L.W. at 4808. In Cohen the district court, in the face of a statute which allowed a corporation to demand security for its litigation expenses from the plaintiffs in a stockholder's derivative action, had allowed the plaintiff to proceed without posting such security. 337 U.S. at 543-45. The order appealed from thus determined who would bear the risk of loss of the corporation's counsel fees during the pendency of the litigation. An improper allocation of risk created by the order could not have been repaired retrospectively in an appeal brought after the district court litigation had reached its conclusion. Id. at 546. Similarly, the district court in Eisen had allowed the plaintiff class to proceed without bearing, during the pendency of the litigation, the risk of loss of the expense of notification, in the face of the "usual rule . . . that a plaintiff must initially bear the cost of notice to the class." 417 U.S. 178, 42 U.S.L.W. at 4811. If the Court had not allowed the appeal, the defendants might ultimately have prevailed on the merits and yet have been unable to recover the cost of notice from the representative plaintiffs.
The plaintiffs in the case now under appeal have shown no similar prejudice which could outweigh the burden of piecemeal review. Both in their brief opposing the defendants' motions to dismiss the appeal, see Plaintiffs'-Appellants' Reply to Defendants-Appellees' Motions to Dismiss at 4 (footnote), and again at oral argument, the plaintiffs advanced the thesis that the June 7 order may cause members of the class who pursue their damage claims individually to incur litigation expenses which could prove to have been unnecessary if the decertification were reversed on appeal from a final judgment. The prejudice arising from delay would only arise if, on appeal from a judgment with respect to the named plaintiffs, the court of appeals found that the action had been improperly decertified, but found that the plaintiffs are not entitled to recover their litigation expenses.*fn9 In this situation, absent class members who, prior to the reversal of the decertification order, settled or brought their damage claims to judgment might incur litigation expenses greater than their proportionate share of the class' litigation expenses would have been.*fn10
We do not find this possible prejudice to be sufficient to outweigh the burden of allowing the present appeal. It should not be unduly time consuming for the named plaintiffs to reduce their individual claims to judgment and bring a unitary appeal in which the damage and litigation expense awards, if any, can throw helpful light on the correctness of the challenged decertification order.*fn11 We take judicial notice of entries in the district court docket, which indicate that a hearing with respect to the named plaintiffs' damages was had on July 1, 1974.*fn12 Since there is no reason to believe that the proceedings in the district court will not continue with normal expedition, it is unlikely that great numbers of absent class members will incur substantial litigation expenses before a unitary appeal can be concluded.*fn13 For these reasons alone, we would find that the danger of injustice due to delay is so slight that the collateral order doctrine should not be applied to the June 7 order.
More importantly, however, we do not believe that the loss to absent class members of the economies inherent in class action adjudication is the type of prejudice which the Eisen and Cohen decisions contemplated as justification for immediate appeal. Whenever a district court refuses to certify a class, there is some danger that absent class members will file individual suits, thus incurring litigation expenses which might prove to have been unnecessary if the denial of class status is ultimately reversed. The above rationale would render immediately appealable virtually every adverse class action determination. We cannot believe that the Supreme Court intended such a result by its reaffirmation of Cohen in Eisen. Instead, we maintain the position adopted by this Circuit in Hackett v. General Host Corp., 455 F.2d 618, 623-24 (3d Cir.), cert. denied, 407 U.S. 925, 32 L. Ed. 2d 812, 92 S. Ct. 2460 (1972), that the more desirable route through which aspiring class representatives should be required to obtain review of adverse class action determinations is the mechanism of F.R. Civ. P. 54(b) or 28 U.S.C. § 1292(b).*fn14 Under these provisions the knowledge bred of the district court's proximity to the case can be brought to bear on the question of the propriety of immediate review.
The presence of such alternative routes for appellate review necessarily affects our judgment whether "the inconvenience and costs of piecemeal review" outweigh "the danger of denying justice by delay." The benefit of a district court's views as to appealability secured through certification under F.R. Civ. P. 54(b) or 28 U.S.C. § 1292(b) would be lost if aspiring class representatives were allowed to appeal, without such certification, adverse class action determinations under the collateral order doctrine. This loss, together with the additional burden placed on appellees and the appellate court whenever piecemeal appeals are permitted, greatly outweighs the danger that some class members may, by proceeding individually, lose the economies of scale associated with class treatment.*fn15
In their brief opposing defendants' motions to dismiss, the plaintiffs also appear to request this court to stay the district court's June 7 decertification order even if we find that we have no jurisdiction over the appeal. Plaintiffs'-Appellants' Reply to Defendants'-Appellees' Motions to Dismiss at 4 (footnote). If this court lacks jurisdiction, it cannot stay the proceedings in the district court. The equitable arguments for granting such a stay, in fact, go to the question of our jurisdiction under the collateral order doctrine; they have been considered and rejected above.
Accordingly, that part of the July 10, 1974, order of this court which stayed the June 7, 1974, order of the district court will be vacated and the appeal dismissed for want of an appealable order under 28 U.S.C. § 1291.