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STADLER v. MCCULLOCH

April 24, 1995

KAROL R. STADLER and RICHARD E. GROSSBERG, individually and on behalf of all others similarly situated, Plaintiffs,
v.
A. DONALD McCULLOCH, JR., REEF C. IVEY II, ALBERT J. DiMARCO and JOHN E. SYLVESTER, Defendants.



The opinion of the court was delivered by: J. CURTIS JOYNER

 Joyner, J.

 April 24, 1995

 I. BACKGROUND

 This Memorandum and Order addresses four outstanding motions in this dispute, all filed in the aftermath of this Court's Memorandum and Order of January 17, 1995. See Killian v. McCulloch, 873 F. Supp. 938 (E.D. Pa. 1995). The defendants in this action, A. Donald McCulloch, Jr., Reef C. Ivey, II, Albert J. DiMarco and John Sylvester, are former officers of Nutri/System, Inc., a Pennsylvania company that was placed in involuntary bankruptcy in May of 1993. In March of 1989, Nutri/System's board of directors adopted the Partnership Profit Sharing Plan ("the PPSP"), pursuant to which the company was to provide a percentage of its profits to key employees. Due to its precarious financial state, however, Nutri/System failed to fulfill the PPSP's obligations.

 This lawsuit ensued. On May 11, 1994, Plaintiffs Catherine Killian and Richard Grossberg, former Nutri/System employees, filed their second amended class action complaint. The plaintiffs subsequently submitted a motion seeking to have the action certified and maintained as a class action. The defendants not only opposed the class certification motion, but also filed a motion seeking summary judgment as to all of the claims brought by Ms. Killian and three of the claims brought by Mr. Grossberg. In our January 17 ruling, we first held that the scope of Pennsylvania's Wage Payment and Collection Law, 43 Pa. Stat. Ann. §§ 260.1-260.12 ("WPCL"), extends only to those employees based in Pennsylvania. Accordingly, we awarded summary judgment to the defendants as to the claims brought under the WPCL by the named plaintiffs, both of whom were based out of state. Id. at 942. In addition, we held that the release executed by Ms. Killian precluded her from bringing any claims related to the PPSP. Thus, we granted summary judgment to the defendants as to all of the claims brought by Ms. Killian. Id. at 943-44. We then denied the plaintiffs' motion for class certification, reasoning that since neither named plaintiff could bring WPCL claims, and since all of Ms. Killian's claims were barred by her execution of the release, neither Ms. Killian nor Ms. Grossberg were suitable representatives of the putative class. Id. at 945. We did, however, allow the plaintiffs to amend their complaint and to submit a new motion for class certification. Id.

 The plaintiffs filed their third amended class action complaint on February 15, 1995, which named Mr. Grossberg and Karol R. Stadler as plaintiffs. The third amended complaint contains eight counts, three of which have been brought against Mr. Sylvester. These claims, including breach of an implied covenant of good faith, fraudulent misrepresentation and negligent misrepresentation, each arise under state law. Indeed, the only federal claim contained in the third amended complaint, Count VI, has not been brought against Mr. Sylvester. In Count VI, the plaintiffs allege that the three other defendants failed to reimburse medical expenses to which the plaintiffs were entitled, in violation of ERISA.

 On February 21, 1995, the plaintiffs filed an amended motion for class certification. Two days later, on February 23, Plaintiff Killian filed a motion for direction of final judgment pursuant to Fed. R. Civ. P. 54(b). Meanwhile, on March 2, 1995, Defendant Sylvester filed a motion to dismiss the third amended complaint as it applies to him, pursuant to Rule 12(b)(1). Mr. Sylvester's motion includes a request for oral argument. Defendants McCulloch, Ivey and DiMarco submitted a response to Ms. Killian's Rule 54(b) motion and the amended motion for class certification on March 7, in which they acquiesce to the granting of the Rule 54(b) motion as long as this action is stayed pending the resolution of Ms. Killian's appeal of our January 17 ruling. Moreover, these defendants argue that the motion for class certification should be denied. Defendant Sylvester joins the response of the other defendants, but argues that the stay, if granted, should not delay the resolution of his Rule 12(b)(1) motion. The plaintiffs oppose the motion to stay. This memorandum will thus address: (1) Plaintiff Killian's Rule 54(b) motion, (2) Defendants' motion to stay, (3) the plaintiffs' motion for class certification, and (4) Defendant Sylvester's Rule 12(b)(1) motion.

 II. DISCUSSION

 A. Rule 54(b) Motion

 Rule 54(b) allows the district court to enter a final ruling as to one of the parties in a multiple claim or multiple party action if there is no just reason for delay. The rule provides, in pertinent part, as follows:

 
When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.

 Turning to the matter at hand, it appears that Rule 54(b) certification is warranted. First, the parties agree that our January 17 Order terminated Ms. Killian's claims and was therefore a final judgment as to her. Further, the parties acknowledge that the issues presented by Ms. Killian's appeal, including whether the protections contained in the WPCL extend to those workers based outside of Pennsylvania and whether the release signed by Ms. Killian precludes her from asserting claims based upon the PPSP, are separable from the remaining issues in the case. Thus, the appellate court is unlikely to revisit these issues in a subsequent appeal because resolution of the former issue would likely govern all potential plaintiffs and members of the putative class, while the latter issue concerns only Ms. Killian. Finally, we conclude that ...


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