Appeal from the United States District Court for the Western District of Pennsylvania.
Hunter and Becker, Circuit Judges, and Katz, District Judge.*fn*
Frank Nascone, a Pittsburgh-based franchisee of Spudnuts, a Utah-based fast food franchisor, appeals from an order of the district court for the Western District of Pennsylvania transferring this diversity and antitrust action to the District of Utah because of a forum selection clause in a franchise agreement that the court found to be applicable to the case and reasonable in scope and content. Nascone advances a number of arguments that the district court erred on the merits in issuing the transfer order. The critical issue on this appeal, however, is whether we have jurisdiction at this point to review the district court's order.
For many years this court -- and virtually every other court -- has held that such orders transferring venue are not appealable. See Mutual Life Insurance Co. v. Ginsburg, 228 F.2d 881 (3d Cir. 1955), cert. denied, 351 U.S. 979, 100 L. Ed. 1495, 76 S. Ct. 1050 (1956); C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure §§ 3846, 3855 (1976). In Coastal Steel Corp. v. Tilghman Wheelabrator, Ltd., 709 F.2d 190 (3d Cir. 1983), however, a divided panel held that a district court's order affirming a bankruptcy court's order denying a motion seeking dismissal on grounds that a forum selection clause required that the dispute be litigated in England, was appealable. The sweep of Coastal Steel is a matter of serious dispute between the parties. Appellee Spudnuts would distinguish the case and, inferentially, limit it to its facts, i.e., an outright dismissal leading, in effect, to a transfer of the action to the court system of a foreign nation.Nascone, on the other hand, asserts that, whatever its factual differences with this case, Coastal Steel is analytically indistinguishable and controlling.
Under these circumstances, we have scrutinized Coastal Steel so as to discern any material distinguishing features. We believe that Coastal Steel is distinguishable in that the plaintiff in that action requested only legal relief whereas the plaintiff here sought significant equitable relief.For the reasons set forth below, we believe this fact precludes use of the Enelow-Ettelson doctrine as a means for our attaining jurisdiction over the district court's transfer order on grounds that it amounted to an injunction.We also believe that, where the district court is essentially ruling on a motion to transfer venue within the federal system, be it "in the interests of justice" or because of a forum selection clause in a contract underlying the dispute, the order issued by the district court is not a collaterally final order. Accordingly, we hold that the order of the district court is not appealable.
Because of the importance of the appealability issue to the jurisprudence of this circuit, we shall explicate its ramifications at some length. First, we shall briefly chronicle the factual and procedural history of this case. Second, we shall outline the pre- Coastal jurisprudence on appealability in this circuit and elsewhere. Third, we shall examine Coastal, bifurcating our discussion to accommodate the alternative holdings on which the decision in that case rested, and expounding at some length on the Enelow-Ettelson doctrine. Finding that Coastal is materially distinguishable and that the order issued by the district court is accordingly unappealable, in part IV we shall treat the appeal as a petition for mandamus; see Gold v. Johns-Manville Sales Corp., 723 F.2d 1068, 1074 (3d Cir. 1983); Cheyney State College Faculty v. Hufstedler, 703 F.2d 732, 736 (3d Cir. 1983), and explore its merit, or, more accurately, its lack thereof. Accordingly, relief will be denied.
Spudnuts is a Utah corporation that franchises retail outlets for sale of its potato-based muffins, donuts, and other baked goods. In June of 1981, and following negotiations between the parties, Nascone entered into an Area Franchise Agreement with Spudnuts that granted Nascone the exclusive right to subfranchise stores in Western Pennsylvania. The Area Franchise Agreement also obligated Nascone to establish two Spudnut retail outlets within this exclusive territory during the following year. The Area Franchise Agreement contains a choice of law clause stating that all questions arising out of the agreement are to be governed by Utah law. The Area Franchise Agreement does not contain any explicit provision, however, calling for resolution of disputes in courts situated in Utah.
Later that month, the parties entered into another agreement under which Nascone was to operate a Spudnuts outlet on McKnight Road in Pittsburgh. This agreement, known as the McKnight Agreement, contained a forum selection clause stating: "This franchise shall be construed according to the laws of the State of Utah, and venue for any proceeding relating to the provisions hereof shall be Salt Lake County, State of Utah."
In 1982, Nascone brought a four-count suit against Spudnuts. Count I of the complaint pled fraud and demanded rescission of the two agreements, restitution of a $75,000 deposit paid under the agreement, and payment of related costs. Count II pled a violation Federal Trade Commission franchising regulations and demanded similar relief.Count II pled breach of contract and demanded damages.Count IV claimed that Spudnuts' contract violated the antitrust laws and demanded treble damages.
Spudnuts filed a motion (styled a "Motion to Dismiss") asking that the case against it be dismissed or, in the alternative, for transfer of the case to the District of Utah. The district court granted the transfer request. The court found as a fact that all counts of the complaint arose out of both the Area Franchise Agreement and the McKnight Agreement and that Nascone would not be put at "an unreasonable disadvantage by enforcement of the forum selection clause." As a matter of law, the district court concluded that "enforcement of the forum selection clause in this case would not be unreasonable."
Prior to Coastal Steel, the law on appealability of transfer orders was relatively well settled. If a defendant won a motion to transfer a case out of the circuit, the plaintiff could ask the transferor district court, under the appropriate circumstances, to certify the issue to the "transferor appellate court" (i.e., the appellate court serving the transferor district court) under 28 U.S.C. § 1292(b).*fn1 See Armor Elevator Co., Inc. v. Phoenix Urban Corp., 493 F. Supp. 876, 890 (D. Mass. 1980); see also McCreary Tire & Rubber Co. v. CEAT, 501 F.2d 1032 (3d Cir. 1974) (dictum); Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir.) (dictum), cert. denied, 419 U.S. 885, 42 L. Ed. 2d 125, 95 S. Ct. 152 (1974). Alternatively, the plaintiff could petition the transferor appellate court for a writ of mandamus blocking the transfer. See Solomon v. Continental American Life Insurance Co., 472 F.2d 1043 (3d Cir. 1973); see also Van Dusen v. Barrack, 376 U.S. 612, 615, 11 L. Ed. 2d 945, 84 S. Ct. 805 n. 3 (1964). If the devices failed, the plaintiff could, under certain conditions, move in the transfered district court for re-transfer back to the original transferor court; the transferor court's disposition of the original motion to transfer would not necessarily be res judicata. Compare Hoffman v. Blaski, 363 U.S. 335, 340, 4 L. Ed. 2d 1254, 80 S. Ct. 1084 n. 9 (1960) (transfer in the interests of justice did not preclude transferee court from determining whether it had jurisdiction and venue), with Hayman Cash Register Co. v. Sarokin, 669 F.2d 162 (3d Cir. 1982)(distinguishing Blaski and brring reconsideration of jurisdiction and venue issues by transferee district court where transferor courts had already decided issue in transferring case under 28 U.S.C. § 1406). If the transferee district court denied the motion to re-transfer, the plaintiff could petition the "transferee appellate court" (i.e., the appellate court serving the transferee district court) for a writ of mandamus. Id. And, if mandamus failed, and if the plaintiff ultimately could appeal from an adverse final judgment in the case, we believe the plaintiff could then raise the failure of the district court to re-transfer as grounds for reversal. See infra part III.B.
If the defendant lost the motion to transfer a case out of the circuit, the course of appellate proceedings was somewhat simpler. The defendant could ask the district court to certify the question to the court of appeals under 28 U.S.C. § 1292(b). See Friends for All Children v. Lockheed Aircraft Corporation, 230 U.S. App. D.C. 325, 717 F.2d 602 (D.C. Cir. 1983); McCreary, 501 F.2d 1032; Katz, 496 F.2d 747. Alternatively, the defendant whose motion to transfer or dismiss for forum non conveniens had been denied could petition the potential transferor appellate court for a writ of mandamus. See Paramount Pictures v. Rodney, 186 F.2d 111 (3d Cir.), cert. denied, 340 U.S. 953, 95 L. Ed. 687, 71 S. Ct. 572 (1951). It was quite clear, however, that absent certification from the district court under section 1292(b) and absent a petition for a writ of mandamus (or the equivalent of such a petition), the transferor appellate court could not review denials of motions for transfer or denial or motions to dismiss for forum non conveniens. See Compagnie Des Bauxites De Guinea v. Insurance Company of North America, 651 F.2d 877, 888 (3d Cir. 1981) (denial of forum non conveniens motion not appealable under 28 U.S.C. § 1291 or 28 U.S.C. § 1291); Wallace v. Norman Industries, Inc., 467 F.2d 824 (5th Cir. 1972); Kasey v. Molybdenum Corp. of America, 408 F.2d 16 (9th Cir. 1969) (denial of motion under section 1404(a) not appealable); Republic of Iraq v. First National City Bank, 313 F.2d 194 (2d Cir. 1963).
Thus, under the traditional view, at least as we have sketched it here, the order transferring venue would not be one over which we have appellate jurisdiction; at best, we could treat the appeal as a petition for a writ of mandamus, and apply the stringent standard of review applicable to requests for that writ. See Gold v. Johns-Manville Sales Corp., 723 F.2d 1068 (3d Cir. 1983).
It is submitted by the appellant, however, that this court's opinion in Coastal Steel altered the traditional law on the subject, or at least carved out an exception where the basis of a proposed transfer or dismissal was a forum selection clause in a contract underlying the dispute. There is indeed much to be said in support of this view. Coastal Steel involved an appeal from a district court order affirming an order of a bankruptcy court denying a forum non conveniens motion to dismiss the case on grounds that the contract underlying the dispute required controversies to be adjudicated in the courts of Great Britain. As we have suggested, under the view set out only two years earlier in Compagnie Des Bauxites De Guinea v. Insurance Company of North America, 651 F.2d 877, 887-88 (3d Cir. 1981), the order of the district ...