Filed: Jan. 30, 2012
Latest Update: Feb. 22, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 10-4086 _ GARY STRAUSSER; STRAUSSER ENTERPRISES INC. v. TOWNSHIP OF FORKS; KARL KLINE, Esquire; DAVID L. HOWELL _ On Appeal from the United States District Court For the Eastern District of Pennsylvania (D.C. Civil Action No. 5-09-cv-05859) District Judge: Honorable Mitchell S. Goldberg _ Submitted Under Third Circuit LAR 34.1(a) January 23, 2012 _ Before: AMBRO, CHAGARES and HARDIMAN, Circuit Judges (Opinion filed: Janu
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 10-4086 _ GARY STRAUSSER; STRAUSSER ENTERPRISES INC. v. TOWNSHIP OF FORKS; KARL KLINE, Esquire; DAVID L. HOWELL _ On Appeal from the United States District Court For the Eastern District of Pennsylvania (D.C. Civil Action No. 5-09-cv-05859) District Judge: Honorable Mitchell S. Goldberg _ Submitted Under Third Circuit LAR 34.1(a) January 23, 2012 _ Before: AMBRO, CHAGARES and HARDIMAN, Circuit Judges (Opinion filed: Janua..
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________
No. 10-4086
_______________
GARY STRAUSSER; STRAUSSER ENTERPRISES INC.
v.
TOWNSHIP OF FORKS; KARL KLINE, Esquire; DAVID L. HOWELL
_______________
On Appeal from the United States District Court
For the Eastern District of Pennsylvania
(D.C. Civil Action No. 5-09-cv-05859)
District Judge: Honorable Mitchell S. Goldberg
_______________
Submitted Under Third Circuit LAR 34.1(a)
January 23, 2012
_______________
Before: AMBRO, CHAGARES and HARDIMAN, Circuit Judges
(Opinion filed: January 30, 2012)
_______________
OPINION
_______________
AMBRO, Circuit Judge
Gary Strausser and Strausser Enterprises Inc. (“SEI”) appeal the District Court‟s
order staying their suit against the Township of Forks, Karl Kline, and David L. Howell,
pending the resolution of related state-court litigation. Because the District Court‟s stay
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order is not a “final decision[]” under 28 U.S.C. § 1291 and is not otherwise appealable,
we dismiss for lack of appellate jurisdiction.
I.
Because we write solely for the parties, we set forth only those facts necessary to
our decision. In 2000, the Township of Forks, Pennsylvania, tentatively approved SEI‟s
plans for the construction of a residential real estate development. Things, however, went
south. The Township and SEI are now caught in a thicket of litigation.
In 2007, SEI sued Forks in the Pennsylvania Court of Common Pleas, alleging that
the Township attempted to overcharge it for hundreds of thousands of dollars in
inspection, engineering, and legal fees. See Strausser Enters., Inc. v. Twp. of Forks, No.
C0048CV2007-005131 (Pa. Ct. Com. Pl.) (the “Fee Case”). The parties submitted the
case to arbitration and the amount due to Forks was greatly reduced.
After SEI filed the Fee Case, Forks filed three lawsuits of its own against SEI. In
its first suit, Forks alleged that it owned eight maple trees SEI had removed near the edge
of the planned development and that the trees‟ removal violated the Township‟s planned
residential development (“PRD”) zoning ordinance. See Twp. of Forks v. Strausser, No.
C0048-CV-2007-8272 (Pa. Ct. Com. Pl.) (the “Tree Case”). The Court of Common Pleas
has since granted SEI summary judgment in the Tree Case. SEI also filed a counterclaim
in that proceeding for abusive litigation, among other things, but the Court of Common
Pleas dismissed it. Two weeks after SEI filed its counterclaim, Forks sued SEI a second
time, demanding that it replenish certain escrow accounts. Twp. of Forks v. Strausser
Enters., Inc., No. C0048CV2009-l0928 (Pa. Ct. Com. Pl.) (the “Escrow Case”). That
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same day, Forks filed its third lawsuit against SEI. See Twp. of Forks v. Strausser, No.
C0048CV2009-10929 (Pa. Ct. Com. Pl.) (the “PRD Case”). In that action, Forks sought
a declaratory judgment that SEI‟s rights to certain phases of the development were
permanently terminated or forfeited. SEI claims that the Tree Case, the Escrow Case,
and the PRD Case are baseless and nothing more than retaliation for its filing the Fee
Case and a counterclaim in the Tree Case.
SEI also asserts that Forks has retaliated against it in ways other than the
prosecution of baseless litigation, including “the publication of false accusations of
criminal, immoral and horrific conduct, and attempts to delay, frustrate and ultimately
terminate [its] development rights.” SEI Br. at 4. For example, according to SEI, Forks
improperly refuses to release funds from a letter of credit. SEI also claims that Forks has
added substantial, punitive conditions to the development‟s final plans that were not
included in the tentative plans. According to SEI, Forks changed its curb specifications,
added construction of a drainage swale, and demanded that a road be widened. Forks
also restricted the issuance of permits for Phase 7 of the development. This restriction,
says SEI, prevented it from selling Phase 7 to another developer for $8 million. SEI had
previously sold other phases of the development to other real estate developers.
SEI filed the fifth suit in this saga in federal court. The complaint makes two
claims against Forks, Kline (Forks‟s Solicitor), and Howell (Chairman of Forks‟s Board
of Supervisors) under 42 U.S.C. § 1983: (1) retaliation against SEI for engaging in
protected conduct under the First Amendment (i.e., filing the Fee Case and the
counterclaim in the Tree Case), and (2) deprivation of SEI‟s right to the equal protection
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of the law. It also asserts two common law claims against Kline and Howell: (1) abuse
of process, and (2) malicious prosecution.
The District Court stayed the federal proceedings “until the resolution of the
underlying state court proceedings so that [the Court] can determine whether the
[d]efendants are entitled to Noerr-Pennington immunity.” The Court explained:
In a § 1983 action, a public entity is protected from liability pursuant to
Noerr-Pennington for filing a lawsuit as long as the public entity is
authorized by state law to file that lawsuit. Schneck v. Saucon Valley Sch.
Dist., 340 F. Supp. 2d 558, 573 (E.D. Pa. 2004) (citations omitted). A
public entity can only be liable for the filing of such a lawsuit if it was both
objectively baseless and subjectively intended to abuse the process. Id. at
574. Therefore, given the pendency of the underlying state civil litigation
and its direct correlation to potential Noerr-Pennington immunity, a stay
will provide all parties an opportunity to resolve the underlying litigation
and will allow full consideration of all relevant facts and legal issues from
those actions as they relate to the above-captioned action at a later time.
The Court ordered SEI‟s counsel to “notify the Court in writing within seven (7) days of
the resolution of all related underlying state court actions.”
SEI seeks to appeal the propriety of the District Court‟s stay order. At our
direction, the parties submitted supplemental briefing on the appealability of the District
Court‟s stay order.
II.
Under 28 U.S.C. § 1291, we have appellate jurisdiction over “final decisions” of
district courts, “except where a direct review may be had in the Supreme Court.”1
1
We also have appellate jurisdiction over certain interlocutory orders under 28 U.S.C.
§ 1292 and the collateral order doctrine announced in Cohen v. Beneficial Indus. Loan
Corp., 337 U.S. 541 (1949). SEI does not argue that the District Court‟s stay order fits
either of these two categories.
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Whether a decision is “final” depends on its effect. Marcus v. Twp. of Abington, 38 F.3d
1367, 1370 (3d Cir. 1994). “Ordinarily, a final decision will have two effects. First, the
decision will fully resolve all claims presented to the district court. Second, after the
decision has been issued, there will be nothing further for the district court to do.”
Aluminum Co. of Am. v. Beazer East, Inc.,
124 F.3d 551, 557 (3d Cir. 1997); see also
Catlin v. United States,
324 U.S. 229, 233 (1945) (“A „final decision‟ generally is one
which ends the litigation on the merits and leaves nothing for the court to do but execute
the judgment.”). Thus, “there is no final order if claims remain unresolved and their
resolution is to occur in the district court.” Aluminum Co. of
Am., 124 F.3d at 557.
The “usual rule” is that a stay order is not a “final decision[]” under § 1291.
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 10-11 n.11 (1983).
But, an order that stays a federal court suit pending the resolution of related state-court
litigation is final and appealable if it “amounts to a dismissal of the suit.”
Id. at 10. Such
an order is final and appealable if it “surrender[s] jurisdiction of a federal suit to a state
court” by “requir[ing] all or an essential part of the federal suit to be litigated in a state
forum.”
Id. at 10 n.11. However, the order is not final and appealable “merely because it
may have the practical effect of allowing a state court to be the first rule on a common
issue.”
Id.
Here, the District Court‟s stay order does not “amount to a dismissal of the suit.”
Id. at 10. In its federal complaint, SEI alleges that it has been deprived of its rights under
the First and Fourteenth Amendments. Win or lose in state court, SEI must return to the
District Court to resolve these constitutional claims because they are not included in any
5
of the pending state-court suits. Those cases involve only issues of substantive
Pennsylvania law, such as whether Forks may require SEI to replenish certain escrow
accounts and whether SEI‟s rights to certain phases of the development are terminated or
forfeited. Therefore, the effect of the stay will not dispose of SEI‟s claims nor will it
leave nothing for the District Court to do.
To be sure, whether SEI prevails in state court will affect the character and scope
of the federal litigation. However, this is not to suggest, as SEI argues, that the District
Court is “requir[ing] all or an essential part of the federal suit to be litigated in a state
forum.” Id. at 10 n.11. Instead, the District Court permissibly allowed “a state court to
be the first rule on a common issue.”
Id. If SEI prevails in state court, then the parties
may return to District Court to litigate all the factual and legal issues pertaining to SEI‟s
constitutional claims. But if SEI does not prevail, then we can assume (for present
purposes) that SEI will be effectively precluded from proving that the state litigation was
objectively baseless. If the state litigation turns out not to be objectively baseless, then
Forks can claim Noerr-Pennington immunity for filing and prosecuting the suits.
Nonetheless, as noted above, SEI‟s complaint includes other allegations of retaliatory
conduct unrelated to the filing and prosecution of the state lawsuits, allegations that
cannot be shielded by Noerr-Pennington. These include SEI‟s allegations that Forks
improperly refused to release funds from SEI‟s letter of credit and improperly added new
conditions to the development‟s final plans. So even if the resolution of the state-court
litigation effectively decides the Noerr-Pennington question in Forks‟s favor, SEI still
6
has a possible path to recovery on its constitutional claims that it may pursue in District
Court.
SEI claims its case is similar to Trent v. Dial Medical of Florida, Inc., where we
held that staying a federal negligence action pending resolution of a related state-court
class action on the issues of duty and breach amounted to a requirement that all or an
essential part of the federal suit be litigated in a state forum. 33 F.3d 217, 221 (3d Cir.
1994). We disagree. Unlike SEI, Trent could not pursue his federal claims absent a
favorable outcome in the related state-court litigation.
Id. at 222.
We have carefully considered the other cases SEI claims are comparable to its
own, and also find them to be distinguishable. In Moses H. Cone, the federal and state
proceedings involved the “identical issue of arbitrability.” 460 U.S. at 10. In fact, that
issue was the “only substantive issue present in the federal suit.”
Id. The Supreme Court
explained that “a stay of the federal suit pending resolution of the state suit meant that
there would be no further litigation in the federal forum; the state court‟s judgment on the
issue would be res judicata.”
Id. As a result, the plaintiff was “effectively out of
court[,]” and the “stay order amount[ed] to a dismissal of the suit.”
Id. In contrast, as
explained above, resolution of the state suits in SEI‟s case will not resolve or prevent
further litigation in federal court.
Schall v. Joyce also does not suggest that the District Court‟s stay order is final
and appealable. 885 F.2d 101, 102-03 (3d Cir. 1989). In that case, Schall sought to
challenge in federal court the constitutionality of Pennsylvania‟s confession of judgment
procedures and sought to have a judgment previously entered against her in state court by
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confession marked satisfied. Id. The district court in that case specifically directed
Schall to go to state court to try to have the judgment in question opened or struck. As
we explained, the district court‟s actions demonstrated a clear surrender of its jurisdiction
to a state forum.
Id. at 105. The court had directed Schall to try and obtain an important
aspect of the relief sought in her federal complaint in a state forum. Unlike Schall, SEI
will not obtain any relief on the constitutional claims raised in its federal complaint in the
pending state litigation.
The District Court‟s stay order serves only to delay deciding the claims in SEI‟s
federal complaint. And “[i]f . . . [a stay] order only serves to delay the federal
adjudication, it is not final and not appealable.” Marcus, 38 F.3d at 1372.
* * * * *
For the foregoing reasons, we dismiss for lack of appellate jurisdiction.
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