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Freedom Medical, Inc. v. Gillespie

United States District Court, Third Circuit

July 23, 2013

FREEDOM MEDICAL, INC.
v.
THOMAS R. GILLESPIE, III, et al.

MEMORANDUM

MARY A. McLAUGHLIN, J.

McLaughlin, J. July 23, 2013 The plaintiff, Freedom Medical, Inc. (“Freedom Medical”), instituted this suit against a number of former employees, several companies they control, and various associated individuals. Freedom Medical alleges that the defendants combined together to steal its inventory and business opportunities as part of an association-in-fact enterprise in violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c), and that the defendants conspired to violate this provision of the RICO statute. Freedom Medical also brings a number of state law claims against various sets of defendants.

Freedom Medical has filed a motion seeking the entry of final judgment pursuant to Federal Rule of Civil Procedure 54(b) on certain of its claims or, in the alternative, certification of the Court’s May 23, 2013 order, which granted summary judgment in favor of four defendants on Freedom Medical’s RICO conspiracy claim, for interlocutory appeal. The Court will deny the motion.

I. Background

In a May 23, 2013 memorandum and order, this Court granted summary judgment in the defendants’ favor on (a) all claims against defendant Sandra “Dawn” Hall, which included the substantive RICO claim under § 1962(c) and the RICO conspiracy claim referenced above, as well as state law claims for conversion and civil conspiracy, and (b) the same two RICO claims against defendants U.S. Med-Equip, Inc., Gregory Salario, and Gurmit Bhatia (collectively, the “U.S. Med Defendants”). The Court found that Freedom Medical had failed to establish a genuine issue of material fact demonstrating the defendants’ participation in a RICO enterprise or agreement to facilitate a RICO violation. In that same order, the Court denied the U.S. Med Defendants’ motion for summary judgment on the state law claims against them.

In a separate order, bearing today’s date, the Court has denied without prejudice Freedom Medical’s motion for default judgment against defendants Signature Medical Ltd., LLC and Signature Emergency Products, LLC (“SEP” and, together, the “Signature Defendants”) on all claims against them, except for one. The Court has entered judgment against SEP on Freedom Medical’s state law misappropriation of trade secrets claim.

In addition to the claims remaining against the U.S. Med and Signature Defendants, Freedom Medical has unresolved claims against five other defendants.

II. Analysis

Freedom Medical has moved for the entry of final judgment pursuant to Federal Rule of Civil Procedure 54(b) on all claims against Ms. Hall, its RICO claims against the U.S. Med Defendants, and all claims against the Signature Defendants. In the alternative, Freedom Medical seeks an order certifying the Court’s May 23 order for interlocutory appeal. The Court finds that neither requested certification is appropriate under the circumstances, and will deny Freedom Medical’s motion in full.

A. Final Judgment Under Rule 54(b)

Rule 54(b) provides that, when an action involves 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.” Certification of a final decision under Rule 54(b) entails two separate findings: that (1) there has been a final judgment on the merits; and (2) there is “no just reason for delay.” Berckeley Inv. Grp., Ltd. v. Colkitt, 455 F.3d 195, 202 (3d Cir. 2006) (quotation marks and citation omitted).

In determining whether no just reason for delay exists, a district court should consider the following factors: (1) the relationship between the adjudicated and unadjudicated claims; (2) the possibility that the need for review might or might not be mooted by future developments in the district court; (3) the possibility that the reviewing court might be obliged to consider the same issue a second time; (4) the presence or absence of a claim or counterclaim which could result in a setoff against the judgment to be made final; and (5) other factors, such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense, and the like. Id. at 203; Allis-Chalmers Corp. v. Phila. Elec. Co., 521 F.2d 360, 364 (3d Cir. 1975).

Rule 54(b) requests need not be granted routinely. Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 10 (1980). A district court must be careful “to assure that application of the Rule effectively ‘preserves the historic federal policy against piecemeal appeals.’” Id. at 8 (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 438 (1956)). The decision of whether to grant a Rule 54(b) motion is left to “the sound judicial discretion of the district court.” Id.

With respect to the claims against the Signature Defendants, the Court finds that certification of final judgment is not warranted. Aside from Freedom Medical’s misappropriation of trade secrets claim against SEP, there has been no final judgment on the merits as to these claims, the Court having denied without prejudice Freedom Medical’s motion for default judgment on all but that one claim.[1] The trade secrets claim against SEP also is not ripe for Rule 54(b) certification, which Freedom Medical seeks so that it may execute on its judgment. The Court has not calculated the damages due to SEP’s ...


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