Usm Corporation v. GKN Fasteners Limited, 578 F.2d 21, 1st Cir. (1978)

578 F.
2d 21
USM CORPORATION, Plaintiff-Appellant,

v.
GKN FASTENERS LIMITED, Defendant-Appellee.
No. 77-1433.
United States Court of Appeals,

First Circuit.
Submitted June 13, 1978.
Decided July 12, 1978.
Gerald D. Hosier, Hosier, Niro & Daleiden, LTD., Chicago, Ill., and
Chaplin, Barzun & Casner, Boston, Mass., for appellant on motion for
order directing a determination on the merits of appeal.
Gael Mahony, Boston, Mass., Gilbert B. Kaplan, Hill & Barlow, Boston,
Mass., Victor S. Friedman, and Fried, Frank, Harris, Shriver & Jacobson,
New York City, for appellee in opposition to motion.
Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit
Judges.
BOWNES, Circuit Judge.
We face the unusual issue of the retroactive effect of amended pleadings on the
jurisdiction of this court. On April 6, 1978, we ruled that no jurisdiction lay
with the court of appeals to entertain an appeal from a stay order issued on
August 8, 1977, by the district court. USM Corp. v. GKN Fasteners, Ltd., 574
F.2d 17 (1st Cir., 1978). We now rule, for reasons which we discuss below, that
the pleadings which were amended on May 10, 1978, do not retrospectively
validate the jurisdiction of this court. We begin with a brief resume of the
procedural history of the case.
Following removal, the federal district court ordered all proceedings stayed
pending arbitration. See 9 U.S.C. 3, 201, 202, 208. The stay order was
entered August 8, 1977. USM moved the district court for reconsideration on
August 12; the motion was denied on August 23. USM appealed the stay order
to this court on August 31. On October 19, GKN moved this court to dismiss
the appeal for lack of jurisdiction based on the so-called Enelow-Ettelson rule.
See USM v. GKN, supra. In light of GKN's motion to dismiss, USM filed with
the district court, on November 3, a motion to amend pleadings by dropping all
prayer for equitable relief (in the hopes of recasting its prayer in purely legal
form so as to invoke the jurisdiction of this court). The district court denied the
motion without prejudice to renew on December 11. The motion was renewed,
and granted, following our decision in April.
3
We first observe that appeals as of right must be filed within thirty days of the
date of entry of judgment or order by the district court. Fed.R.App.P. 4(a). This
requirement is mandatory and jurisdictional. United States v. Robinson, 361
U.S. 220, 224, 80 S.Ct. 282, 4 L.Ed.2d 259 (1960). Cf. Spound v. Mohasco
Industries, Inc., 534 F.2d 404, 410 (1st Cir.), cert. denied, 429 U.S. 886, 97
S.Ct. 238, 50 L.Ed.2d 167 (1976). The thirty day time period may be extended,
upon motion to the district court, for "excusable neglect." Excusable neglect
has been limited to situations where a party has failed to learn of the entry of the
order or judgment or in other extraordinary circumstances where injustice
otherwise would result. See e. g., Benoist v. Brotherhood of Locomotive
Engineers, 555 F.2d 671, 672 (8th Cir. 1977). The filing time limits cannot
otherwise be enlarged. Fed.R.App.P. 26(b). As early observed by the Supreme
Court: "When the time for taking an appeal has expired, it cannot be arrested or
called back by a simple order of court. If it could be, the law which limits the
time within which an appeal can be taken would be a dead letter." Credit Co. v.
Ark. Central Railway, 128 U.S. 258, 261, 9 S.Ct. 107, 108, 32 L.Ed. 448
(1888).
The district court, pursuant to Rule 15(a) of the Federal Rules of Civil
Procedure, allowed the motion to amend pleadings on May 10, 1978. In its
present "motion for order directing determination on the merits of appeal,"
USM now attempts to invoke the "relation back" doctrine, Fed.R.Civ.P. 15(c),
to validate retrospectively appellate jurisdiction of this court. In urging this
position so that we may now consider the propriety of the stay order, USM
runs afoul of substantial policy reasons for denying such an interpretation. A
compelling policy exists against piecemeal appeals. Cobbledick v. United
States, 309 U.S. 323, 324-325, 60 S.Ct. 540, 84 L.Ed. 783 (1940); 28 U.S.C.
1291. Also barring the way to accepting USM's interpretation is the
understanding that Rule 15 is not to be viewed as enlarging or restricting federal
jurisdiction. 3 Moore's Federal Practice P 15.02(2) at 815-816 (1974).1 The
doctrine of relating back in time to the original pleadings does not affect the
jurisdiction of the district court here in any manner. It would, however, enlarge
the proper scope of our jurisdiction to hold that the amended complaint,
purporting to state a purely legal cause of action, related back to the time of the
original appeal and thereby brought the appeal newly within the scope of the
Enelow-Ettleson gloss on 28 U.S.C. 1292(a)(1).2
5
As we have noted elsewhere, the "relation back" doctrine of Rule 15(c) is not
automatically applied in every situation. Cicchetti v. Lucey,514 F.2d 362, 367
(1st Cir. 1975). Where, as here, it would extend our jurisdiction, the application
of the doctrine is impermissible. Cf., id. at 368; Fed.R.Civ.P. 82. The Rules of
Civil Procedure and the Rules of Appellate Procedure are to be read as
harmonious with each other to the extent possible. Cf. Ondis v. Barrows, 538
F.2d 904, 908 (1st Cir. 1976). A flexible approach, accommodating the policies
expressed by the varying rules is essential. The policy favoring the liberal
granting of amendments and the further policy of permitting such amendments
to relate back in time, Fed.R.Civ.P. 15(c), stand counterpoised against the
policies favoring the expeditious handling of appeals and the strict time filing
requirements of Rule 4, Fed.R.App.P. 4(a). We hold that the amendment does
not relate back in time to the original pleadings in this unusual situation, where
the effect of such relation back would be to flout Rule 4 of the Appellate Rules
and enlarge the jurisdictional bounds of this court.
In so holding, we would like to remind the parties that no "right" of the

appellant is thereby denied. As we noted in our original opinion, quoting from
the earlier case of New England Power Co. v. Asiatic Petroleum Corp., 456
F.2d 183, 185 (1st Cir. 1972), no important right, "other than the 'right' to stay
arbitration, will be irreparably lost by our declining to review the district court's
action at this juncture." We would also like to underscore the fact that the
Enelow-Ettelson rule provides an "errant exception to the general requirement
of finality." USM v. GKN, supra, 574 F.2d at 22. USM is not hereby deprived,
by virtue of a procedural requirement, of something to which it normally would
be entitled. Stay orders are typically not appealable because they are not final
orders. The existence of the Enelow-Ettelson exception is one of the loopholes
for which the law has become famous (or infamous). The possible mischief it
can wreak is apparent in this case.
Our ruling today is compatible with the spirit of the federal rules in
encouraging the "just, speedy, and inexpensive" determination of cases.
Fed.R.Civ.P. 1. The federal rules are designed to promote disposition of
litigation on the merits. Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 2
L.Ed.2d 80 (1957). As stated in our original opinion, the stay order by the
district court does not finally dispose of USM's claims. The stay order was
entered so that arbitration proceedings, freely contracted for by the parties,
could proceed to completion. The strong policy of giving effect to arbitration
clauses; the interest in promoting speedy resolution of issues; the disapproval

of fragmentary appeals; the strict jurisdictional time filing requirements, all
suggest the propriety of our action. Petitioner sought the amendment in the
district court solely for the procedural or tactical advantage of seeking the
jurisdiction of this court. We are dealing with experienced counsel who are
held to know the law, rules of procedure, and eccentricities such as that
presented by the Enelow-Ettelson rule. Cf. Crown Coat Front Co. v. United
States, 395 F.2d 160, 164-165 (2d Cir.), cert. denied, 393 U.S. 853, 89 S.Ct.
123, 21 L.Ed.2d 122 (1968).
8
The time for filing an appeal to the district court order expired thirty days from
August 8, 1977. Any flaw in the pleadings pertaining to the jurisdiction of this
court should have been corrected, or an attempt made to correct it, by filing a
motion with the district court, within the thirty day time limit for filing appeals.
Petitioner filed its motion with the district court to amend the pleadings on
November 3, 1977, well after the expiration of the thirty day limit. To allow
petitioner to enlarge the time for appeal in this instance would, we feel, defeat
the spirit of the Rules of Appellate Procedure. Cf. In Re Orbitec Corp., 520
F.2d 358, 361 (2d Cir. 1975). Petitioner will not be given another bite at the
appellate apple at this time.
Motion denied.
The Supreme Court's holding in Freeman v. Bee Machine Co., Inc., 319 U.S.
448, 63 S.Ct. 1146, 87 L.Ed. 1509 (1943), that a federal court, in an action
removed from state court, can permit an amendment which would not have
been allowed had the suit remained in state court, is not contrary. The Court
therein reiterated what was already expressed in the Federal Rules of Civil
Procedure, namely that the "rules apply to civil actions removed . . . and govern
procedure after removal." Fed.R.Civ.P. 81(c). The Court stated that federal
rules govern all proceedings in federal courts. 319 U.S. at 452, 63 S.Ct. 1146.
Allowance of the amendment did not enlarge federal jurisdiction in the district
court. Id. at 451, 63 S.Ct. 1146; 3 Moore's Federal Practice P 15.02(2) at 817818 (1974)
The effect of the amendment on this court would be more than merely
corrective, i. e., pleading a jurisdictional element existing at the time of the
original pleadings but omitted from the pleadings. It is recognized that such
amendments are to be liberally granted at the district court level. The effect of
the amended pleadings on this court is to alter our jurisdictional scope: by
retroactively changing the nature of the action it filed in the district court,
appellant attempts now to create ex post facto a jurisdictional element whose

absence earlier precluded our review. We do not wish to suggest that the
motion to amend should not have been granted. We merely limit the effect of
the amended pleadings on the jurisdiction of this court

Usm Corporation v. GKN Fasteners Limited, 578 F.2d 21, 1st Cir. (1978)

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578 F.

USM CORPORATION, Plaintiff-Appellant,

United States Court of Appeals,

In so holding, we would like to remind the parties that no "right" of the

clauses; the interest in promoting speedy resolution of issues; the disapproval

appellant attempts now to create ex post facto a jurisdictional element whose

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