American States Insurance v. Dastar Corp.

dissenting:

I respectfully dissent. In holding that the parties engaged in manipulation of our jurisdiction, the majority fails to recognize the difference in litigating the duty to defend and the duty to indemnify. It also fashions a new rule of law which requires that before a voluntary dismissal of independent claims can be approved, District Courts must certify the appealability of remaining claims pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. In the process, the majority implies that trial judges who approve the dismissal of a claim without prejudice in order to permit the litigants to proceed on an independent claim actually facilitate manipulation. This is simply not true. When lawyers and trial judges agree to dismiss independent, unripe claims, they are faithful to the administration of justice, preserving the resources of the courts as well as clients. By focusing on manipulation as opposed to the intent underlying the final judgment rule, the majority misses the forest for the trees. As a result, they compel an outcome that is neither efficient nor just.

As the majority correctly observes, the purpose of the final judgment rule is to “prevent[ ] the…

Dastar Corporation, Entertainment Distributing, and Marathon Music & Video (collectively “Dastar”) appeal the district court’s grant of partial summary judgment in favor of American States Insurance *884 Company and American Economy Insurance Company (collectively “American”) on the sole issue of whether American owed Dastar a duty to defend in a separate action. Because the parties have engaged in manipulation to manufacture appellate jurisdiction after the district court’s grant of partial summary judgment, we DISMISS the appeal for lack of appellate jurisdiction.

I. BACKGROUND

Dastar was sued by Twentieth Century Fox Film Corp, SFM Entertainment and New Line Home Video, Inc. (collectively “Claimants”) for copyright infringement, violation of the Lanham Act, and for violations of California Business and Professions Code section 17200. On May 12, 1999, Dastar tendered the claim to American as “advertising injuries” covered by insurance policies issued by American. On June 30, 1999, American denied Dastar’s tender because it concluded that the Claimants’ First Amended Complaint did not allege “advertising injuries” covered by the policies.

On March 7, 2000, American…