Bankers Trust Co. v. Mallis
435 U.S. 381 (1978)

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U.S. Supreme Court

Bankers Trust Co. v. Mallis, 435 U.S. 381 (1978)

Bankers Trust Co. v. Mallis

No. 76-1359

Argued November 30, 1977

Decided March 28, 1978

435 U.S. 381




In dismissing respondents' action against petitioner under § 10(b) of the Securities Exchange Act of 1934, the District Court failed to set forth the judgment in a separate document as required by Fed.Rule Civ.Proc. 58. Despite the absence of a separate judgment, but without objection by petitioner, the Court of Appeals assumed appellate jurisdiction under 28 U.S.C. § 1291, giving courts of appeals jurisdiction of appeals from all "final decisions" of the district courts, and reversed on the merits.


1. Under the circumstances, the parties should be deemed to have waived Rule 58's separate judgment requirement, and hence the Court of Appeals properly assumed appellate jurisdiction under § 1291.

2. Where, however, the case's posture changed between the time of the Court of Appeals' decision and the presentation of the case to this Court, respondents' counsel having urged here that the Court of Appeals' judgment be affirmed on a theory different from that court's reasoning in reversing the District Court, the writ of certiorari is dismissed as having been improvidently granted.

Certiorari dismissed. Reported below: 568 F.2d 824.

Page 435 U. S. 382


Respondents sued petitioner Bankers Trust Co. under § 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, 15 U.S.C. § 78j(b) (1976 ed.), for allegedly fraudulent statements. The District Court for the Southern District of New York dismissed the action on the ground that the fraud alleged had not occurred "in connection with the purchase or sale" of a security, as required by § 10(b). Mallis v. Federal Deposit Ins. Corp., 407 F.Supp. 7 (1975). The Court of Appeals for the Second Circuit reversed, holding that respondents were "purchasers [of securities] by virtue of their acceptance of [a] pledge" of stock, and that petitioner was "a seller by virtue of its release of [a] pledge." Mallis v. Federal Deposit Ins. Corp., 568 F.2d 824, 830 (1977). We granted certiorari to consider the correctness of these rulings of the Court of Appeals. 431 U.S. 928 (1977).

We find ourselves initially confronted, however, by a difficult question of federal appellate jurisdiction. As the Court of Appeals noted in its opinion, a search of the District Court record fails to uncover "any document that looks like a judgment." 568 F.2d at 827 n. 4. Because both the parties and the District Court "proceeded on the assumption that there was an adjudication of dismissal," ibid., [Footnote 1] the Court of Appeals felt free to consider the merits of the appeal. The Court of Appeals action, however, conflicts with the decisions of other Courts of Appeals concluding that a judgment set forth on a "separate document" is a prerequisite to appellate

Page 435 U. S. 383

jurisdiction. [Footnote 2] We conclude that the Court of Appeals for the Second Circuit was correct in deciding that it had jurisdiction in this case despite the absence of a separate judgment.

Appellate jurisdiction was invoked under 28 U.S.C. § 1291, which provides that the "courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States." The issue posed is whether a decision of a district court can be a "final decision" for purposes of § 1291 if not set forth on a document separate from the opinion. The issue arises because of Fed.Rule Civ.Proc. 58, which reads in part:

"Every judgment shall be set forth on a separate document. A judgment is effective only when so set forth and when entered as provided in Rule 79(a). [Footnote 3]

Page 435 U. S. 384

We assume, without deciding, that the requirements for an effective judgment set forth in the Federal Rules of Civil Procedure must generally be satisfied before § 1291 jurisdiction may be invoked. [Footnote 4] We nonetheless conclude that it could not have been intended that the separate document requirement of Rule 58 be such a categorical imperative that the parties are not free to waive it."

The sole purpose of the separate document requirement, which was added to Rule 58 in 1963, was to clarify when the time for appeal under 28 U.S.C. § 2107 begins to run. [Footnote 5] According to the Advisory Committee that drafted the 1963 amendment:

"Hitherto some difficulty has arisen, chiefly where the court has written an opinion or memorandum containing some apparently directive or dispositive words, e.g., 'the plaintiff's motion [for summary judgment] is granted,' see United States v. F. & M. Schaefer Brewing Co.,356 U. S. 227, 356 U. S. 229 . . . (1958). Clerks on occasion have viewed these opinions for memoranda as being in themselves a

Page 435 U. S. 385

sufficient basis or entering judgment in the civil docket as provided by Rule 79(a). However, where the opinion or memorandum has not contained all the elements of a judgment, or where the judge has later signed a formal judgment, it has become a matter of doubt whether the purported entry of a judgment was effective, starting the time running for post-verdict motions and for the purpose of appeal . . ."

"The amended rule eliminates these uncertainties by requiring that there be a judgment set out on a separate document -- distinct from any opinion or memorandum -- which provides the basis for the entry of judgment."

28 U.S.C.App.p.7824. The separate document requirement was thus intended to avoid the inequities that were inherent when a party appealed from a document or docket entry that appeared to be a final judgment of the district court, only to have the appellate court announce later that an earlier document or entry had been the judgment, and dismiss the appeal as untimely. The 1963 amendment to Rule 58 made clear that a party need not file a notice of appeal until a separate judgment has been filed and entered. See United States v. Indrelunas,411 U. S. 216, 411 U. S. 220-222 (1973). Certainty as to timeliness, however, is not advanced by holding that appellate jurisdiction does not exist absent a separate judgment. If, by error, a separate judgment is not filed before a party appeals, nothing but delay would flow from requiring the court of appeals to dismiss the appeal. Upon dismissal, the district court would simply file and enter the separate judgment, from which a timely appeal would then be taken. Wheels would spin for no practical purpose. [Footnote 6]

Page 435 U. S. 386

In United States v. Indrelunas, we recognized that the separate document rule must be "mechanically applied" in determining whether an appeal is timely. Id. at 411 U. S. 221-222. [Footnote 7] Technical application of the separate judgment requirement is necessary in that context to avoid the uncertainties that once plagued the determination of when an appeal must be brought. Cf. United States v. F. M. Schaefer Brewing Co.,356 U. S. 227 (1958). The need for certainty as to the timeliness of an appeal, however, should not prevent the parties from waiving the separate judgment requirement where one has accidentally not been entered. As Professor Moore notes, if the only obstacle to appellate review is the failure of the District Court to set forth its judgment on a separate document, "there would appear to be no point in obliging the appellant to undergo the formality of obtaining a formal judgment." 9 J. Moore, Federal Practice

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