Multiple Claims or Parties

Rule 54(b) has work to do only when an action has separable pieces. Its first sentence applies when an action presents “more than one claim for relief,” whether as a claim, counterclaim, crossclaim, or third-party claim, or when “multiple parties are involved,” and in either setting it lets the court direct entry of a final judgment on one or more, but fewer than all, claims or parties.¹ The rule is no exception to the final-judgment rule; it supplies the standards for applying that rule in multi-claim, multi-party actions.² A partial final judgment lifts a decided piece out of a larger action and sends it to the court of appeals while the remainder stays below, so the rule has nothing to lift unless the action has a remainder.

An action with one claim between one plaintiff and one defendant has no such piece. A ruling that disposes of the claim ends the case in the ordinary way, and a ruling that stops short leaves the claim pending. Rule 54(b) therefore “does not apply to a single claim action nor to a multiple claims action in which all of the claims have been finally decided.”³ Joinder explains the limit. The rule exists to mitigate the delay that liberal joinder of parties and claims would otherwise cause, and so it operates where joinder has produced a remainder for the decided piece to wait on.⁴

The threshold has two branches, and an action that satisfies either one clears it. A two-party suit in which the defendant counterclaims qualifies through the claim branch, even though the caption names only two litigants. The checklist follows the order in which a problem raises the questions.

Multiple Parties

The party branch asks what a ruling must accomplish for one party before the court can separate that party from the lawsuit. Without a direction under Rule 54(b), an order that adjudicates “the rights and liabilities of fewer than all the parties” does not end the action as to any party and stays open to revision until a judgment adjudicates all the claims and all the parties’ rights and liabilities.⁷

The caption shows whether several parties are involved, and the file usually shows just as easily whether one of them has had all its rights and liabilities adjudicated.⁸ The decisive question is therefore narrow: does the order conclusively determine every claim against at least one party? If it does, that party has left the case and the order is a candidate for certification. If the order leaves a portion of a single claim open as to all defendants, it does not qualify, however many parties the caption lists.⁹

A party makes a natural unit for an early appeal because its departure leaves nothing for the court of appeals to meet again. When every claim against one defendant has been decided, the appellate court can review that exit without waiting on anything still pending against the others. A ruling that resolves only part of a claim as to everyone offers no such unit. The court of appeals would review a fragment, the trial court would decide the rest, and a second appeal would follow on the remainder of the same claim, duplicating the briefs, record, argument, and opinions that a single appeal would have required only once.¹⁰ Whether the exit should be reviewed now, given how closely it relates to the remaining claims, is a separate question for the no-just-reason inquiry that follows.

Consider RFC, a defendant that won summary judgment in the multi-defendant suit that the previous section used as its example. The ruling resolved the claim against RFC while other claims remained for adjudication, so RFC could move for direction of final judgment under Rule 54(b), and the same motion is available to the plaintiffs if they want to appeal the judgment for RFC at once.¹¹ The court of appeals would still ask whether the ruling is legally separable from the claims that remain. If it is not, the appellate court might have to consider the same issues twice, once on an immediate appeal and again on appeal from the final judgment at the end of the case. Once is enough.¹²

Alonzi v. Budget Construction Co. shows the other side of the line. The order there left open the question of punitive damages against all of the defendants, and an order that leaves a portion of a single claim open as to every defendant does not qualify for a Rule 54(b) appeal.¹³ The order may have decided a great deal, and the caption may have listed many defendants, but no defendant had left the case, because each still faced the unresolved remedy question. No party-sized piece existed to send up, and an appeal would have returned to the same court once punitive damages were decided.

Pending crossclaims and third-party claims belong in the count of what remains, because the rule treats a counterclaim, a crossclaim, and a third-party claim as claims for relief just as it treats the original claim.¹⁴ Courts have also treated contribution and indemnity claims as claims distinct from the underlying complaint. One appellate opinion cited authority suggesting that such claims are separate for purposes of a Rule 54(b) certification, including a decision stating that “[t]hird party complaints seeking indemnity or contribution have in several instances been held to present a severable claim, capable of separate final adjudication under Rule 54(b),” and concluded that certification might be appropriate there if the judgment was final and there was no just reason for delay.¹⁵ The classification cuts both ways. A pending contribution crossclaim keeps a party in the case, and a final ruling on such a claim can itself be a unit to certify.

The party branch was not always part of the rule. As the Supreme Court later noted, the rule was amended after Sears, Roebuck & Co. v. Mackey to insure that orders finally disposing of some but not all of the parties could be appealed under its provisions.¹⁶ The text now speaks of parties as well as claims, so a ruling that finally removes one party gives the district court an independent basis for certification, on one condition: the party’s exit must be complete.

What Makes a Claim Separate

The claim branch faces a harder question than the party branch, because the rule never says how to tell one claim for relief from two. The caption cannot answer it. A pleading with five counts may state one claim or five, since “claim” is not necessarily synonymous with the counts in the complaint; it is much closer to “cause of action” or “legal right.”¹⁸ Courts fill the gap by reading the term in light of the rule’s purpose, which is to mitigate the delay that liberal joinder of parties and claims would otherwise cause.¹⁹

The proper inquiry, on that reading, is “whether the underlying factual bases for recovery state a number of different claims which could have been separately enforced.”²⁰ The possible recoveries should be multiple and not mutually exclusive.²¹ The Second Circuit reaches the same place from the facts, defining a claim in this setting as “the aggregate of operative facts which give rise to a right enforceable in the courts.”²² Either formulation asks whether the decided matter could have stood alone as a lawsuit.

Separate enforceability is the test because of what the court of appeals does with a certified ruling. A claim that could be enforced alone can be reviewed alone: the appellate court decides it without deciding anything the trial court still must resolve, and the later appeal from the remaining claims does not send the same question back up. Alternative routes to one recovery offer no such separation. When a plaintiff can collect once, on whichever theory succeeds, a ruling on one theory bears on how the trial court must treat the others, and the case returns for a second appeal on the same recovery. The amended rule leaves untouched the finality required of each decision on an individual claim; it permits an appeal from one or more final decisions on individual claims without waiting for decisions on all of them.²³

Three decisions show claims on the right side of the line. In Samaad v. City of Dallas the Fifth Circuit treated takings and equal-protection claims as separate because the grounds of recovery were not “mutually exclusive.”²⁴ In Hudson River Sloop Clearwater, Inc. v. Department of the Navy the Second Circuit recalled its earlier decision in Gottesman v. General Motors Corp., which found separate claims in allegations about different products because “[e]ach product involves separate markets and commercial considerations. Different exhibits, proof and witnesses will be necessary; different sets of operative facts will determine the result.”²⁵ The same opinion recalled that the Supreme Court in Mackey held separate counts of a four-count complaint to be separate claims: the first count sought antitrust damages for injury to three of the plaintiff’s commercial ventures, and the remaining counts sought common-law recovery for the injury to each venture.²⁶

On an exam, a multi-count complaint invites the wrong first move, which is to count the counts. Ask instead whether the recoveries are alternatives to one another. If the plaintiff could collect once on any of the counts, the stem presents one claim; if each count would support its own recovery without disturbing the others, the stem presents several.

Factual overlap trips up students because it sounds like the opposite of separateness, yet the test tolerates it. In Minority Police Officers Association of South Bend v. City of South Bend the Seventh Circuit recognized that claims can be separate even when their facts overlap, and also that they cannot be separate if together they constitute a single cause of action for res judicata purposes or if the claimant could not recover separately on each.²⁷ Some courts therefore weigh two considerations together: the factual overlap, or lack of it, between the decided and remaining claims, and whether those claims seek separate relief.²⁸

Distinct proof, as in Gottesman, is strong evidence of separateness, because different witnesses and exhibits mean the appellate court will not decide the same facts twice. Shared proof does not defeat separateness. It matters at the next step, where the court weighs whether the claims on appeal are so closely related to those yet to be tried that the same facts may have to be reviewed a second time.²⁹ The Seventh Circuit put that burden concretely: each appeal in a series may be simpler than one appeal from a final judgment, but the simplicity will usually be outweighed by the burden on the court of reacquainting itself again and again with the basic facts.³⁰

Even with these filters, the definition resists precision. One opinion reports that various courts focus on different things and hesitate to articulate hard-and-fast tests for what counts as a claim for relief.³¹ Practice is pragmatic. In Continental Airlines v. Goodyear Tire & Rubber Co. the Ninth Circuit upheld certification because the matters disposed of by the partial summary judgments were “sufficiently severable factually and legally from the remaining matters,” and the judgments completely extinguished the tire companies’ liability on the airplane damage claim.³²

The existence of multiple claims is a threshold the court of appeals must confirm before it has power over the appeal, so the district court’s conclusion on that point receives no deference. One court of appeals separated two challenges to a Rule 54(b) judgment. An appellee may argue that the complaint presents only one claim for relief, and the court of appeals reviews the district court’s finding of separate claims de novo, meaning it decides the question afresh; because the question goes to appellate jurisdiction, the court may raise it on its own.³³ An appellee may instead argue that the district court abused its discretion in finding no just reason for delay, and if the appellee does not press that argument, the court of appeals cannot raise it on its own, because it does not go to jurisdiction.³⁴ The Second Circuit draws the same line. It reserves wide deference for the no-just-cause determination and examines de novo whether the claims are sufficiently separate and distinct to be reviewed as single units or so interrelated as to be one indivisible whole.³⁵ Keeping the two inquiries apart prevents a strong equitable case for immediate appeal from standing in for the threshold finding of separate claims.

Single Claims in Disguise

Rule 54(b) names the claim as its unit. It allows judgment on “one or more, but fewer than all, claims or parties,” and it gives no such power over a remedy, a theory, or an issue.³⁸ Parts of claims are not eligible, such as liability only on a claim for damages.³⁹ A complaint can ask for many remedies and argue many theories while asserting one right, and then the rule has nothing to sever. Three recurring mistakes treat a single claim as several: treating a ruling on one remedy, on one theory, or on a dependent request as a ruling on a claim. Each fails for the same reason. The rest of the claim stays in the trial court, and a second appeal would revisit the same facts and law.

Liberty Mutual Insurance Co. v. Wetzel illustrates the first mistake. Female employees sued under Title VII, challenging their employer’s policies and praying for an injunction, damages, and attorney’s fees. The district court declared the policies unlawful, directed that judgment be entered on that ruling, and recited that there was no just reason for delay. The court of appeals heard the appeal, but the Supreme Court held the order not appealable and vacated the judgment with instructions to dismiss.⁴⁰ The employees had won a ruling on liability and no injunction, damages, or fees, so the order finally disposed of none of their prayers for relief.

The Court’s answer began with the scope of the rule. Rule 54(b) does not apply to a single-claim action, and in a multiple-claim action it permits an appeal from one or more final decisions on individual claims without relaxing the finality that each decision requires.⁴¹ The employees’ complaint asserted one legal right, and a complaint asserting only one legal right states a single claim for relief even if it seeks multiple remedies for the violation of that right.⁴² The district court’s determination and direction could not supply a second claim, because they condition the power to certify; they do not create the thing certified.

The remedies were consequences of the one right. A ruling on liability alone leaves them before the trial court on the same facts and the same legal theory, so an immediate appeal would be followed by a second one once the remedies were decided. The rule authorizes judgment on claims and parties, not on parts of claims.⁴³ That limit protects against the problem the court of appeals would otherwise face: if the decided matter is not legally separable from what remains, the court might consider the same issues twice, once on the early appeal and again on appeal from the final judgment.⁴⁴

A pleading built in parts can still contain several claims, and Mackey shows where the line falls. Its first count sought antitrust damages for injury to three of the plaintiff’s ventures, and the remaining counts sought common-law recovery for the injury to each venture, so the Supreme Court treated the counts as separate claims.⁴⁵ The employees’ parts were remedies for one violation of one right. The parts in Mackey were distinct grounds of recovery for distinct injuries, each able to stand alone. The number of counts or prayers decides nothing; the number of separately enforceable rights decides the question.

The second mistake treats a ruling on one legal theory as a ruling on a claim. Alternative theories that lead to the same recovery are routes to a single recovery, and the recoveries are mutually exclusive, so the theories state one claim.⁴⁶ A ruling against one theory removes a route without deciding whether the recovery will be awarded, and the trial court still holds the claim. An order that disposes of particular legal issues but not an entire claim does not qualify.⁴⁷ On appeal, the court asks de novo whether the pleading presents multiple claims or the trial judge merely ruled on one of the theories supporting a single claim.⁴⁸

The question to ask of such a ruling is what it removed from the case: a recovery, or only a route to one.

The third mistake involves requests that have no life apart from the main claim. In Hudson River Sloop Clearwater, Inc. v. Department of the Navy the Second Circuit cited decisions treating a claim for prejudgment interest, which depended on liability for the principal (Cinerama, Inc. v. Sweet Music, S.A.), and a claim for attorney’s fees, which depended on the underlying claim for damages (Aetna Casualty & Surety Co. v. Giesow), as not separate for Rule 54(b) purposes.⁴⁹ The reason follows from how such requests are measured. Interest is computed on whatever principal the defendant is found to owe, and fees follow the success of the underlying claim, so neither can be decided or enforced separately until the main claim is resolved. An appellate ruling on interest before liability was settled would be wasted if liability were later reversed. The allegations in Gottesman stand on the opposite side of the line, because each rested on its own markets, exhibits, proof, and witnesses.⁵⁰

The exam move that ties the three traps together is to ask what right the pleading asserts, and whether the ruling takes that right off the table or only a remedy, a theory, or a dependent request inside it. In the second case the order stays interlocutory under the rule’s second sentence, however the district court words its recital, and it remains open to revision until a judgment adjudicates all the claims and all the parties’ rights and liabilities.⁵¹ The next section turns to the second requirement, which tests whether even a genuinely separate claim has been finally disposed of.