IN RE MASTER KEY ANTITRUST LITIGATION cases where class certification is denied 11 through the absence of immediate review. See id. It is plain enough that the class action order in this case is not one which is fundamental to the appellees' initiative to pursue this litigation. We anticipate that several of the appellees, which include 14 of our largest state governments, can "reasonably be expected to continue the[ir] action[s] in [their] individual [capacities]," Kohn v. Royall, Koegel & Wells, supra, 496 F.2d at 1099, were class certification to be removed. Discovery procedures have revealed that the claims of several of the appellees alone will involve sums running into tens, if not hundreds, of thousands of dollars. Thus this case is analogous to General Motors Corp. v. City of New York, supra, 501 F.2d at 645, where class action status was held to be not fundamental to the litigation because the City of New York's claim was large enough to guarantee that it would have prosecuted the case alone had the order been reversed. We also find that the appellants' attack on the class certification order is not sufficiently separable from the merits of the underlying dispute to permit an interlocutory appeal under the collateral order doctrine." The gist of appellants' argument is that the certifications of the class actions will prejudice their defense at the trial on liability by allowing appellees to substitute proof of generalized harm for what appellants believe to be the statutory requirement of proof of particularized injury." They argue that each appellee must prove that the impact of the alleged conspiracy reached to and injured them as “eventual" or “final" consumers of the builders' hardware and master key systems, another way of arguing perhaps that appellees 10. We recognize that it was Judge Friendly's view that nearly always review of the merits will be separable from review of the class action order, Parkinson v. April Industries, Inc., supra, 520 F.2d 650, 659 (2d Cir. 1975) (concurring opinion). but this appears to be the exception that probes the rule. 121 528 FEDERAL REPORTER, 2d SERIES lack standing to sue. We need not follow the path of this reasoning to its end to conclude that it invokes consideration of matters which are crucial to the merits of the underlying dispute. See In re Cessna Aircraft Distributorship Antitrust Litigation, 518 F.2d 213, 216 (8th Cir. 1975). Surely the question of what must be proven to establish liability is not a matter which is separable from the claim for relief. It is not, therefore, a matter which can properly 11. If the appellees establish at the trial for liability that the defendants engaged in an unlawful national conspiracy which had the effect of stabilizing prices above competitive levels, and further establish that the appellees were consumers of that product, we would think that the jury could reasonably conclude that appellants' conduct caused injury to each appellee. See In re Ampicillin Antitrust Litigation, 55 F.R.D. 269, 275–76 (D.D.C.1972); Illinois v. Harper & Row Publishers, Inc., 301 F.Supp. 484 (N.D.III.1969). The amount of such injury could then be computed at a separate trial for damages, and appropriate substratification of classes could be utilized to facilitate that determination. See Union Carbide & Carbon Corp. v. Nisley, 300 F.2d 561, 567 (10th Cir. 1961), cert. dismissed, 371 U.S. 801, 83 S.Ct. 13, 9 L.Ed.2d 46 (1962); Aamco Automatic Transmissions, Inc. v. Tayloe, 67 F.R.D. 440 (E.D.Pa. 1975); Sommers v. Abraham Lincoln Federal Savings & Loan Ass'n, 66 F.R.D. 581, 591-92 (E.D.Pa.1975); Barr v. WUI/TAS, Inc., 66 F.R.D. 109, 115 (S.D.N.Y.1975); Wainright v. Kraftco Corp., 54 F.R.D. 532, 534-35 (N.D.Ga.1972). Appellants argue that the class action is unmanageable because, since each appellee has purchased the master key systems from contractors who in turn had purchased through different distributors (each of whom may have "passed on" all or only a portion of the conspiratorial overcharge), different issues of fact will predominate at both the trial for liability and the trial for damages. The diversity of the situations of the Various appellees, and the possibility that wholesaler intermediaries or general contractors have absorbed some or all of the alleged overcharges, would seem, however, to be a matter that may appropriately be dealt with by further class stratification pursuant to Fed.R.Civ.P. 23(c)(1). Appellants contend, however, that the mere existence of sue intermediaries renders recovery impossible for both ultimate consumers and for those persons placed in the middle of the distribution chain. We are aware that the Supreme Court s ruled that antitrust violators cannot claim, as a defense in an action brought by a direct be before us as a collateral issue for interlocutory appeal. We find somewhat closer the question whether appellants have established that they face irreparable harm from the defense of the class action. One of the class actions which has been certified here includes all the state, county and local governments in the United States and is estimated to have over 21,000 members. While many of the costs purchaser, that the purchaser was not injured because the defendant's overcharges were passed on by the plaintiff as part of its sale price to other buyers. Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968). We are also aware that one court of appeals at least temporarily read Hanover Shoe to imply that such subsequent buyers (which, of course, would include ultimate consumers) are barred from bringing suit against the manufacturerconspirators. Mangano v. American Radiator & Standard Sanitary Corp., 438 F.2d 1187 (3d Cir. 1971). However, others have suggested that Mangano has given Hanover Shoe too literal an application, and have argued that the latter case did not intend to enshrine "privity as a requirement of the antitrust laws." In re Western Liquid Asphalt Cases, 487 F.2d 191, 197 (9th Cir. 1973), cert. denied, 415 U.S. 919, 94 S.Ct. 1419, 39 L.Ed.2d 474 (1974). See also Note, Mangano and Ultimate-Consumer Standing: The Misuse of the Hanover Doctrine, 72 Colum.L. Rev. 394, 404-10 (1972). We find it unnecessary at this time finally to determine our position in this controversy, or even to determine whether, indeed, as appellants argue, appellees are "ultimate" consumers. note, however, that our court has found no difficulty in permitting ultimate consumers to participate in a settlement in a drug industry price-fixing case. West Virginia v. Charles Pfizer & Co., 440 F.2d 1079, 1088 (2d Cir.) (wholesalers and retailers sold to consumers at a fixed markup), cert. denied, 404 U.S. 871, 92 S.Ct. 81, 30 L.Ed.2d 115 (1971). See also In re Multidistrict Vehicle Air Pollution M.D.L. No. 31, 481 F.2d 122, 129 (9th Cir 1973); South Carolina Council of Milk Producers, Inc. v. Newton, 360 F.2d 414, 417-18 (4th Cir.), cert. denied, 385 U.S. 934, 87 S.Ct. 295, 17 L.Ed.2d 215 (1966). If considerations of double recovery, cf. Hawaii v. Standard Oil Co. of California, 405 U.S. 251, 264, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972), are paramount, it may be pointed out here that no distributors or general contractors have come forward to file suit, even if at this late date they could do so under 15 U.S.C. § 15b. We IN RE MASTER KEY ANTITRUST LITIGATION which are peculiarly associated with tion proceedings, economies of judicial time as well as parties' expense. Having come this far, it seems unlikely that appellants will be forced to settle by mere virtue of the costs of defense of the class actions. Accordingly, we feel that appellants are not exposed to any such extraordinary risk of irreparable harm as would merit the conclusion that interlocutory review is essential to avoid "the danger of denying justice by delay," Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, 511, 70 S.Ct. 322, 324, 94 L.Ed. 299 (1950). Our conclusion is that appellants' efforts to obtain "piecemeal 12. Even under the test espoused by Judge Mansfield in his concurring opinion in General Motors Corp. v. City of New York, 501 F.2d 639, 659 (2d Cir. 1974), which we view as a "balancing test" rather than one requiring that all three prongs be affirmatively established, we find that appellants have failed to establish that these orders are appealable. In our view. the "danger of denying justice by delay" of the appeal of the class action order is not so great as to justify "the inconvenience and cost of [this effort at] piecemeal review." Id. at 659, 13 review," id., of Judge Blumenfeld's certification orders in this case is not justified under 28 U.S.C. § 1291 and our cases.12 Accordingly we lack jurisdiction to hear this portion of the appeal. [7, 8] II. Consolidation. The issue of consolidation stands on no different footing from that of class action designation. Absent exceptional circumstances, an order of consolidation is not appealable. Levine v. American Export Industries, Inc., 473 F.2d 1008 (2d Cir. 1973). We have held, however, that an order of consolidation may be a "collateral order," appealable under Cohen v. Beneficial Industrial Loan Corp., supra, where the order goes "beyond the permissible objective of judicial economy to deny a party his due process right to prosecute his own separate and distinct claims or defenses without having them so merged into the claims or defenses of others that irreparable injury will result." Katz v. Realty Equities Corp. of New York, 521 F.2d 1354 (2d Cir. 1975), quoting Garber v. Randell, 477 F.2d 711, 716 (2d Cir. 1973).13 We think that this is a narrow exception, however, and only in the plainest cases of prejudice through confusion of issues should interlocutory review of these discretionary orders be allowed. See National Association for Advancement of Colored People of Louisiana v. Michot, 480 F.2d 547, 548 (5th Cir. 1973) (denying consolidation); United States v. Chelsea Towers, Inc., 404 F.2d 329 (3d Cir. 1968) (denying consolidation); 9 C. Wright & A. Miller, Federal Practice and Procedure § 2386 (1971). The argument made by appellants to bring the consolidation order in this case citing Gillespie v. United States Steel Corp., 379 U.S. 148, 152-53, 85 S.Ct. 308, 13 L.Ed.2d 199 (1964), and Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, 70 S.Ct. 322, 94 L.Ed. 299 (1950). 13. Judge Friendly disagreed and would, were the questions presented anew, hold that a consolidation order is not appealable. Katz v. Realty Equities Corp. of N. Y., 521 F.2d 1354 (2d Cir. 1975) (Friendly, J., concurring). 14 528 FEDERAL REPORTER, 2d SERIES within the collateral order doctrine of Katz and Garber is that the several appellees are differently situated in the distribution chain of the master key systems and, therefore, different issues will be important in the proof of particularized injury to each of them. This is a renewal of their "unmanageability" argument, made against the class action certification orders. See note 11 supra. Appellants' position is that in a consolidated trial for liability, distinctions among the various appellees will be lost upon the jury in the face of sweeping allegations of national conspiracy. They are concerned that mere proof that an unlawful conspiracy existed and that “generalized harm" has occurred may improperly be allowed to suffice for proof of liability. Here, as above, see id., we need not microscopically examine on the bare bones of this abstract record appellants' contention that particularized injury to each appellee is a prerequisite to establishing liability in a bifurcated antitrust trial. For appellants have failed completely to suggest that a variety of separate issues applicable peculiarly to individual plaintiffs will cause confusion to the jury and prejudice to the defense. Instead, they have raised only one issue the issue of lack of "impact" or causation or standing-and complained that that defense may apply differently to some of the plaintiffs than it will to others. We do not think that this one defense, even assuming it may have varying application (and without expressing any view as to its validity), will be so confused by consolidation as to justify immediate review of that order. We do not find here the type of "exceptional circumstances" which must be present to authorize an interlocutory appeal from the order of consolidation.14 [9-12] III. Bifurcation. Appellants also seek review of Judge Blumenfeld's order that separate trials be held on liability and damages. Such an order is ordinarily firmly within the discretion of the trial court under Fed.R.Civ.P. 42(b). And we need not review his exercise of that discretion at this stage of the case, for an order for a bifurcated trial is likewise not appealable under the theory that it is a "final order." 9 J. Moore, Federal Practice 110.13[8] (1975); 9 C. Wright & A. Miller, supra, § 2392. Nor can we accept appellants' argument that this order falls within the narrow strictures of the "collateral order" doctrine. Their contention is that the costs of conducting a series of separate mini-trials as to damages will be prohibitive and will, therefore, force appellants into an unfavorable settlement. They also argue that separating the liability and damage trials will cause prejudice to the defense by facilitating the appellees' ability to sidestep proof of specific injury, and allowing a showing of generalized harm to suffice. Even assuming, arguendo, that these reasons bear substantially on concerns which are appropriate in determining the application of the collateral order doctrine, we cannot give credence to them. The cost of mini-trials for damages should bear equally in the minds of the appellees, as for appellants, as a reason for settling claims prior to trial. We cannot assume at this point that it is the appellants, rather than appellees, who would be compromising their meritorious position by an early settlement. Therefore we cannot conclude that appellants face the risk of irreparable injury from this order. Nor do we assume that Judge Blumenfeld will fail to identify to the jury at the trial for damages the extent to which unlawful price overcharges are recoverable by these appellees, see text at note 11 & note 11 supra. Appellants' claimed sources of irreparable harm are entirely too speculative to suffice as the basis for interlocutory re 14. In Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975), where liability was tried separately from damages, the Supreme Court has allowed general allegations of harm to suffice at the trial for liability in a price-fixing case. See also Bray v. Safeway Stores, Inc., 403 F.Supp. 412 (N.D. Cal., filed Feb. 26, 1975). view under the collateral order doctrine. 15 Appellants' final argument is that they will be prejudiced in their defense if the same jury does not hear both the liability and damage portions of the action. They also suggest that use of separate juries in these two trials might infringe their Seventh Amendment rights. Without in any way commenting on the validity of these arguments, we merely note that they are wholly speculative at this point. Judge Blumenfeld has indicated that one jury may hear both the liability and damage claims in this action. Cf. Swofford v. B & W, Inc., 336 F.2d 406, 415 (5th Cir. 1964), cert. denied, 379 U.S. 962, 85 S.Ct. 653, 13 L.Ed.2d 557 (1965). It would plainly be premature for us to rule on the appropriateness of using two juries where only one, in fact, may be involved. We should only note that bifurcated trials have frequently been employed with great success, see 9 C. Wright & A. Miller, supra §§ 2390-91; Green v. Wolf Corp., 406 F.2d 291, 301 (2d Cir. 1968), cert. denied, 395 U.S. 977, 89 S.Ct. 2131, 23 L.Ed.2d 766 (1969) (class action in securities litigation), even in antitrust suits, see Goldfarb v. Virginia State Bar, supra. Appeal dismissed for lack of jurisdic tion. KEY NUMBER SYSTEM 15. Appellants have also claimed that there may be geographic marketing variations which make a consolidated national liability determination prejudicial. However, we believe this contention is wholly unavailing for two reasons. First, appellees' claim is that the conspiracy has been national in scope and has achieved uniform price overcharges throughout the entire country. Second, the "marketing variation" argument will most likely be completely subsumed within the "particularized injury" defense, which we have rejected as a ground for interlocutory appeal in the text. |