The complaint in Frow alleged a "joint" fraud. As the Court in Frow discovered, and recent commentators have correctly noted, if "the alleged liability is joint, a default judgment should not be entered against a defaulting defendant until all of the defendants have defaulted" or there has been "an adjudication as to the liability of the non-defaulting defendants."33

Here, Westinghouse argues that Frow does not preclude entry of a default judgment against more than one but less than all of the defendants when liability is joint and several. The appellants respond to this argument by relying on Frow as stare decisis, and raising the spectre of inconsistent adjudications. We find that Westinghouse's view is the correct one based upon our analysis of joint and several liability and our conclusion that there is little possibility of inconsistent adjudications of liability.34

Joint or common liability arises when a tortious act is committed by several persons acting in concert. It means that each tortfeasor is entirely responsible for the damage resulting from that concerted conduct.35 A successful plaintiff may look to any one of the defendants for full satisfaction of a damage award. Several or independent liability, on the other hand, arises when one defendant36 is found to have committed a tort without the aid of other defendants. A finding of liability as to one defendant is consistent with a finding of no liability as to the others, so long as there is no relationship between the parties requiring vicarious liability.

Anti-trust liability under Section 1 of the Sherman Act is joint and several.37 When these two distinct potentials for liability coexist in a single claim, there is a tension. The present case exemplifies that tension. If all twenty-nine of the defendants were found culpable of price-fixing, Westinghouse could seek to satisfy its judgment and damages award against all the defendants, or single out one price-fixer. But at the same time, only a small group of the defendants might be found to have conspired to fix the price of uranium, and the remaining defendants would be exonerated. Such a finding of liability as to nine defendants is not inconsistent with a finding of no liability as to the other twenty, because liability is potentially "several" as well as "joint".

Frow involved a claim of a joint tort to defraud the plaintiff of title to a res. To the extent that it holds that there cannot be inconsistent adjudications as to joint liability38 or as to a single res in controversy39 this ancient equity case remains good law. But to apply Frow to a claim of joint and several liability is to apply that venerable case to a context for which it was never intended,40 and ignores the several or independent aspects of the claim set forth in this complaint. The result in Frow was clearly mandated by the Court's desire to avoid logically inconsistent adjudications as to liability. However, when different results as to different parties are not logically inconsistent or contradictory, the rationale for the Frow rule is lacking.41 Such is this case involving joint and several liability.42

In International Controls Corp. v. Vesco, 535 F.2d 742 (2nd Cir. 1976), the Court reached a similar conclusion. In that case ICC filed a complaint alleging that Vesco and others had violated their fiduciary duties and conspired to violate the anti-fraud provisions of the Securities Exchange Act of 1934. Vesco defaulted, while the other defendants contested the allegations of the complaint. ICC attempted to satisfy the default judgment with the assets of Vesco & Co., Inc. The Company sought to overturn the default judgment on the basis of Frow. The Second Circuit disposed of that argument in a footnote stating:

We think it most unlikely that Frow retains any force subsequent to the adoption of Rule 54(b). In any event, at most Frow controls in situations where the liability of one defendant necessarily depends upon the liability of the others. 535 F.2d 742, 746-47 n.4.

We conclude that Frow does not preclude the entry of default judgment against a group of nine defaulters prior to adjudication on the merits as to the remaining defendants, where liability is joint and several.

Once Frow is placed in proper perspective, the entry of default judgment can be viewed as a simple exercise in the procedures set out in Rules 54 and 55 of the Federal Rules of Civil Procedure. Rule 55(b) permits the Court to enter default judgment against any party, with notice of the pending application for judgment, who fails to appear and respond to the allegations of the complaint. Rule 54 permits final judgment "as to one or more but fewer than all of the claims or parties upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment."43 The District Court, after waiting two years for the defaulters to appear, made the determination to enter judgment against the defaulters and proceed to the merits of the controversy. Such a determination will only be set aside for an abuse of discretion. Bogosian v. Gulf Oil Corp., supra, 561 F.2d 434. We find no abuse of discretion. To the contrary, the Court's determination to enter judgment against the nine defaulters is in accordance with the procedures set forth in the Federal Rules.

The District Court also suggested that Rule 37(d) F.R.C.P. supports entry of default judgment in this case. That Rule authorizes the imposition of sanctions against parties who refuse to participate in discovery. The Rule makes no mention of default judgment. However, default judgments have been sustained as a valid exercise of the District Court's power under Rule 37(d). National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643, 96 S. Ct. 2778, 2781, 49 L. Ed. 2d 747 (1977). Because we find that Rules 54(b) and 55(b) permit entry of default judgment in this case, we find it unnecessary to comment on the appropriateness of a default judgment under Rule 37(d).

Atlas Alloys, Inc. and Rio Algom Corporation appeal the orders enjoining the defaulting defendants from transferring assets out of the United States without prior approval of the Court.44 Appellants argue that the injunctions are erroneous because they are bottomed on an erroneously entered default judgment; that the District Court lacked the power to enter the injunctions; and assuming the Court was empowered to enter the injunctions, they are tantamount to an attachment of assets and, therefore, are an abuse of discretion.

We reject appellants' argument that the injunctions must be overturned because they are predicated on an erroneous default judgment. That argument assumes that Frow v. De La Vega prohibits the entry of default judgment in this case. Our prior discussion of the inapplicability of Frow to this action resolves that question and needs no further repetition here. Indeed, the starting point of our analysis is that the District Court's use of injunctive power was pursuant to a valid default judgment.

Appellants argue that the District Court lacked the power to enter the injunctions. Appellants' contention is that absent a final default judgment there are only three sources upon which these injunctions could be predicated: Rules 64 and 65 F.R.C.P. and the inherent equity powers of the district court. Appellants insist that none of those sources permit the Court to enter these injunctions.45 Westinghouse relies primarily on general equity powers in its argument in support of the injunctions. We find that both the inherent equity powers of Federal Courts and the All Writs Act, 28 U.S.C. § 1651(a) confer upon the district court power to enjoin the transfer of assets in this case.

The situation confronting the district court was extraordinary. In order to avoid execution on the default judgment, Rio Algom Limited instructed its American subsidiaries to transfer their assets to Canada. The defaulting defendant circumvented and even ignored the district court's restraining order in an effort to transfer funds out of the United States. Had the Court not exercised its injunctive powers the default judgment would have been rendered meaningless.

Federal Courts are empowered to restrain the removal of assets from the United States through injunctive relief. United States v. First National City Bank, 379 U.S. 378, 85 S. Ct. 528, 13 L. Ed. 2d 1365 (1965). See SEC v. Manor Nursing Centers, Inc., 458 F.2d 1082 (2d Cir. 1972). Such equitable relief is particularly appropriate when a default judgment has been entered. International Controls Corp. v. Vesco, 490 F.2d 1334, 1347 (2d Cir. 1974). Since a preliminary injunction seeks to preserve the status quo ante litem, (Seagrams Distillers Corp. v. New Cut Rate Liquors, 221 F.2d 815 (7th Cir. 1955)), it is also an appropriate means of maintaining the status quo as of the time the default judgment was entered. Given our conclusion that the default judgment was a proper exercise of the district court's discretion, it seems evident that the Court was empowered to enter all equitable orders necessary to preserve that judgment.

We also find support for the district court's authority to enter these injunctions in the All Writs Act, 28 U.S.C. § 1651(a).46 That Act simply empowers Federal Courts to enter such writs as are necessary to preserve the jurisdiction of the Court. In the anti-trust context, the Act has been recognized as an effective tool for preserving the status quo. F. T. C. v. Dean Foods Co., 384 U.S. 597, 604, 86 S. Ct. 1738, 1742, 16 L. Ed. 2d 802 (1966). The Act has been relied on for the entry of injunctive relief when necessary to preserve the jurisdiction of the district court over a Sherman Act claim. United States v. Western Pa. Sand and Gravel Association, 114 F. Supp. 158 (W.D.Pa.1953).47 If the defaulting corporations continued to transfer their assets out of the United States, the district court would be unable to enter any effective judgment as to damages. While the Court would not technically be robbed of subject matter jurisdiction, the Court's default judgment would be rendered meaningless and the Court would be powerless to enter any effective relief as to the defaulters. Confronted with such a situation, the District Court was empowered to enter any injunctive relief necessary to preserve its jurisdiction.

We note that in De Beers Mines Ltd. v. United States, 325 U.S. 212, 65 S. Ct. 1130, 89 L. Ed. 1566 (1945), the Court overturned a preliminary injunction against the removal of assets which had been entered pursuant to the All Writs Act. In De Beers, as in the present case, the injunction was entered to prevent defendants from removing assets out of the United States, thereby avoiding enforcement of a final decree of the Court. In De Beers, however, there was no judgment against the parties who were enjoined. The motion for preliminary injunction was filed with the complaint and was supported only by the unproven allegations in the complaint and an affidavit stating that the defendants "could quickly withdraw their assets from the United States." Id. at 215, 65 S.Ct. at 1132. In the present case the defendants have confessed to the allegations of the complaint by their failure to contest those allegations, and a valid judgment has been entered against them. Indeed, the Court in De Beers suggested that had the injunction been pursuant to a final decree it would have been sustained. Id. at 220, 65 S.Ct. at 1134.

The All Writs Act empowers Federal Courts to protect their jurisdiction. The injunction in De Beers did not serve to preserve the Court's jurisdiction and was therefore not within the ambit of the Act. The injunctions in the present case, however, aid the Court in the exercise of its powers; i. e., in enforcing its judgment. For that reason, De Beers does not preclude use of the All Writs Act powers in this case.

Rio Algom Corporation and Atlas Alloys, Inc. argue that assuming the Court was empowered to enter the injunctions in this case, the Court abused its discretion in doing so. The enjoining of transfers of assets was, in effect, an attachment. An attachment or sequestration of assets prior to final judgment, they argue, is simply an abuse of the Court's equity powers.

The cases relied upon by appellants all involve a prejudgment sequestration of assets48 or diversity claims in which state attachment procedures govern.49 We find those cases inapposite. Here there has been a judgment entered against the defendants whose assets have been sequestered. In that situation, courts have permitted equitable restraints on assets because the default serves as an admission to the allegations in the complaint. See ICC v. Vesco, supra, 490 F.2d 1334. When a violation of law is present, Courts have considerable discretion in fashioning equitable orders to prevent the removal of assets from the United States. See SEC v. Manor Nursing Centers, Inc., supra, 458 F.2d 1082.

The district court's exercise of discretion in entering a preliminary injunction is measured against four prerequisites:(1) The plaintiffs have no adequate remedy at law and will be irreparably harmed if the injunction does not issue;

(2) The threatened injury to the plaintiffs outweighs the threatened harm the injunction may inflict on the defendant;

(3) The plaintiffs have at least a reasonable likelihood of success on the merits; and

(4) The granting of a preliminary injunction will not disserve the public interest. Fox Valley Harvestore v. A. O. Smith Harvestore Products, Inc., 545 F.2d 1096 (7th Cir. 1976).

We find each of those prerequisites met in this case.

There is no remedy at law which could effectively prevent the removal of the defaulter's assets from the jurisdiction of the United States Courts. Indeed, defaulters' conduct is particularly suited for equitable remedies. With regard to the requisite threat of irreparable harm, it is evident that without the Court's use of injunctive powers the plaintiffs' ability to satisfy the judgment would be seriously jeopardized.

The Court's injunctive orders do not place an onerous burden on the defaulting defendants. The Court's orders simply require prior approval of transfers of funds and permits transactions in the ordinary course of business. However, the threatened injury to plaintiff from the continued withdrawal of assets is substantial. We find that the scale tips in favor of the injunctions.

Since a judgment of liability has been entered against the defaulting defendants, there is clearly more than a reasonable likelihood of success on the merits. While it is conceivable that the defendants might prevail on the merits in the final analysis,50 plaintiff has a substantial likelihood of success against the defaulters at this posture of the litigation.

Finally, the injunctions of the District Court do not disserve the public interest. To the contrary, the entry of these injunctions serves a strong national interest in effective and meaningful enforcement of the American anti-trust laws. See Perma Muffler v. International Parts Corporation, 392 U.S. 134, 88 S. Ct. 1981, 20 L. Ed. 2d 982 (1968). As the District Court correctly pointed out, the pattern of conduct engaged in by the defaulters "can only disserve the public interest" and the public interest is best served by "a firm insistence that they (the defaulters) respond to the orderly processes, the lawful processes, yes, the due process of his Court." (Order of Mar. 27, 1979)

We conclude that the district court did not abuse its discretion in enjoining the transfer of funds out of the United States and that each injunction should be and hereby is affirmed.

The appellants claim that they will be severely prejudiced by a hearing on damages against the defaulters. The appellants have difficulty in articulating precisely how they would be prejudiced. It is not disputed that a determination as to damages against the defaulters would have no collateral estoppel or res judicata effect.51 Nevertheless, appellants suggest there would be a psychological precedent which they would have difficulty overcoming should damages be determined. Appellants also point to the questionable validity of Westinghouse's claim under the Illinois Brick52 Doctrine as a basis for postponing a damages hearing. In Illinois Brick the Supreme Court held that only direct purchasers could maintain an action for damages against alleged price-fixers under section four of the Clayton Act.

We perceive the problems in proceeding to damages in terms of possible inconsistency and judicial economy, rather than actual prejudice. The possible inconsistency is that there could be two distinct damages awards on a single claim involving joint and several liability. Considerations of judicial economy are relevant because if the appellants are correct in their analysis of the applicability of Illinois Brick to this case, a damages hearing prior to resolution of that issue could prove to be a useless exercise.

If damages are entered against the defaulters now, and Westinghouse subsequently prevails on the merits against the answering defendants, damages would then have to be determined as to the answering defendants. The possibility of two distinct determinations as to the damages arising out of a single price-fixing claim is, indeed, an inconsistency. Just as the several or independent nature of plaintiff's claim permits different findings as to liability of individual defendants, the joint nature of plaintiffs' claim prohibits different findings as to damages against all defendants. While our research has uncovered situations in which inconsistent verdicts as to damages have resulted on a claim involving joint liability, the wholly unsatisfactory manner in which those cases have been handled convinces us that such a result is erroneous and must be avoided.53

It is suggested by Westinghouse that "judgments in differing amounts" are permissible in a joint and several claim. Yet, this argument ignores the fact that those defendants ultimately found liable are jointly liable for the entire damage award, and that Westinghouse could look to any one defendant for full satisfaction of the damage award.

Westinghouse may not split its claim and proceed to damages against the defaulters and then proceed to a separate damages award against the answering defendants. Westinghouse has chosen to initiate a single claim involving joint liability. That claim must be concluded just as it began as one action.54

Thus, while Westinghouse has secured a valid default judgment as to the defaulters' liability, a damages hearing may not be held until the liability of each defendant has been resolved. Should Westinghouse decide to pursue its claim against the answering defendants, a determination of damages as to the defaulters will have to be stayed until the entire claim is resolved. In the event that Westinghouse is successful on the merits, and establishes the anti-trust liability of the answering defendants, then a single damages hearing can be held. That would result in one damages award recoverable from the answering defendants and defaulters alike, in whatever manner it can be satisfied. However, should Westinghouse elect to dismiss its claim against the answering defendants, with prejudice, the liability of each defendant would be resolved and Westinghouse could proceed to a determination of damages as to the defaulters immediately.

There is another consideration which compels a stay of any damages determination if plaintiff elects not to dismiss the answering defendants. These defendants maintain that Westinghouse may not bring this claim for price fixing, as it is not a direct purchaser of uranium as is required by Illinois Brick v. Illinois, 431 U.S. 720, 97 S. Ct. 2061, 52 L. Ed. 2d 707 (1977). That case and its progeny place limitations on the circumstances which give rise to a price-fixing claim for damages under section four of the Clayton Act.55 The applicability of Illinois Brick to this claim is not an issue before this Court and we decline to pass on that question at this juncture. That issue is presently pending before the District Court. We simply point out that as long as the legal sufficiency of this claim remains at issue, the interests of judicial economy dictate that a damage hearing be held in abeyance.56

Section 1292(b) of the Judicial Code provides appellate courts with a flexible tool for interlocutory review of complex and controlling questions of law. Interlocutory review is permitted to assure orderly and efficient administration of complex cases.57 Our decision today should be viewed in that context. Our conclusion is that Frow does not control this case and that the entry of default judgment was not an abuse of discretion. Nevertheless, the question of damages must await resolution of the issue of liability as to all parties. As a practical matter, Westinghouse must elect whether to abandon its claim against the answering parties and pursue the question of damages solely against the defaulters, or proceed to the merits on the entire claim. Should Westinghouse choose the latter course, the judgment against the defaulters will remain interlocutory until a judgment on the merits is reached.

Our result today is mandated by the nature of joint and several liability.58 While the liability of each defendant presents separate and distinct issues entirely independent of each other, there is a single unified damage to the plaintiff. The defaulting defendants have confessed to the Westinghouse allegations by their refusal to appear. The defaulters may have to accept full responsibility for the damage ultimately proven by Westinghouse as a result of that default.

The cause is REMANDED to the District Court to proceed in accordance with the views herein expressed.

SWYGERT, Circuit Judge, dissenting in part and concurring in part.

With one important exception, I concur in all respects in the result reached by Judge Campbell in these appeals; however, my concurrence as to the hearing on damages as well as the issuing of the injunction is based on reasons different from those advanced by him.

In my view Frow v. De La Vega controls this case. The trial judge's analysis of that decision as being apposite to the case at bar is, in my judgment, irrefutable. In re Uranium Antitrust Litigation, 473 F. Supp. 382, 385-88 (N.D.Ill.1979). I do disagree, however, with his further analysis that Rule 54(b), Federal Rules of Civil Procedure, may be used to circumvent the application of Frow so as to permit the entry of a judgment against the defaulting defendants and a concomitant assessment of damages while leaving the liability-damage question as to the remaining defendants for a future trial on the merits.

Rule 54(b) was designed to regulate the appealability of claims, multiple as to parties or claims or both. It is a procedural device to avoid the final judgment rule. Its use was never intended to, nor could it, formulate or modify substantive law. The Rules Enabling Act, 28 U.S.C. § 2072, provides that the Federal Rules of Civil Procedure "shall not abridge, enlarge or modify any substantive right . . .." Frow speaks to substantive rights: a claim of joint tort liability may not be split or severed among defendants so as to permit recovery against some, but not all, the defendants who have acted in combination to cause the tort.

The tort alleged in this action stems from the asserted violation of the antitrust laws. Westinghouse is the sole plaintiff, and it asserts a single claim against twenty-nine defendants. Damages, whatever the extent, can flow only from the single injury which was assertedly caused by all or some of the defendants acting jointly. Those damages after proper assessment may be collected from all or any of the defendants found liable, on a selective basis at the will of Westinghouse. This eventuality, that is, collectibility, is what makes the claim for damages "joint and several." The claim is not several in relation to the issue of liability-damage for the single tort (injury) caused by the joint conspiratorial aims and acts of the defendants. For these reasons, the total damages, if any, owing to Westinghouse are identical conceptually with the title to the res in Frow.

Insofar as the impending damage hearing is concerned, my reasoning leads practically to a result identical to that reached by my Brothers. Westinghouse, unable at this point to obtain a judgment, must await trial of the appearing defendants before it can have a hearing on damages. Alternatively, if Westinghouse elects to dismiss its claim against the appearing defendants, a default judgment can be entered and the hearing to assess damages may be had immediately upon the dismissal.

In respect to the injunction, I again part company to a large extent with the reasoning of Judge Campbell. Given the applicability of Frow so as to bar the entry of a judgment against the defaulting defendants at this time, any reliance on the default judgment to authorize the injunction is misplaced. The entry of a default under Rule 55(a) and the potentiality of a binding default judgment under Rule 55(b) provide a solid ground for the application of both the All Writs Act and the inherent equity powers of the Federal Courts so as to give the trial court the power to enjoin the removal of assets from the United States, which may be subject to a writ of execution under the default judgment if and when entered.