FAT Brands Inc. v. PPMT Capital Advisors, Ltd.

Background

FAT Brands Inc. brought contract and fraud claims arising from an alleged scheme connected to a financing deal. The defendants included PPMT Capital Advisors, Ltd.; Royal Gulf Capital Corporation; Karl Douglas; Wesley Ramjeet; and the SJ Global Defendants.

In an earlier order, the court dismissed FAT Brands’s claims against Ramjeet and the SJ Global Defendants for failure to state a claim. It also dismissed the claims against Kristina Fields and Mickey Edison for lack of personal jurisdiction. Claims against other defendants remained pending. FAT Brands then moved under Rule 54(b) for entry of final judgment on the dismissed claims.

Rule 54(b) standard

Rule 54(b) allows a court to enter a final judgment on fewer than all claims or parties only when there are multiple claims or parties, at least one claim or party’s rights and liabilities have been finally decided, and there is no just reason to delay judgment. Courts should use this procedure sparingly because it can lead to piecemeal appeals. Certification generally is not appropriate when the dismissed and remaining claims involve the same or closely related issues.

Court’s analysis

The court agreed that the first two requirements were satisfied: the case involved multiple claims or parties, and the liabilities of Ramjeet and the SJ Global Defendants had been finally determined. The motion therefore turned on whether there was no just reason for delay.

The court rejected FAT Brands’s argument that the dismissed claims were sufficiently separate. The claims against Ramjeet were based on vicarious-liability theories tied to Douglas’s alleged conduct. If Douglas were ultimately found not to have committed tortious conduct, an appeal concerning Ramjeet could become moot. The court therefore treated the claims against Ramjeet and Douglas as closely connected.

The court also found that FAT Brands’s claims against the SJ Global Defendants were intertwined with the remaining claims against the PPMT Defendants. The claims for fraud, conspiracy to commit fraud, and tortious interference with contract were brought against both groups. FAT Brands alleged that the SJ Global Defendants, Douglas, and PPMT acted as co-conspirators in a common scheme, with the SJ Global Defendants allegedly making misrepresentations indirectly through Douglas.

The court determined that allowing an immediate appeal could require appellate judges to review the same complicated factual history more than once, or could result in an advisory or unnecessary appellate decision after the remaining claims were resolved. The court also rejected FAT Brands’s claimed prejudice. Avoiding a possible second trial did not justify early certification, and the court found no unusual hardship from possible future service difficulties involving the SJ Global Defendants. Their attorneys remained counsel of record, and the court had already approved service through counsel and specified email addresses.

The court noted that FAT Brands was seeking an adverse judgment on its own dismissed claims, not trying to collect a monetary judgment. Thus, the court found that delay would not create the type of payment-related prejudice that could justify immediate appeal.

Disposition

Judge Jesse M. Furman denied FAT Brands’s motion for entry of final judgment under Rule 54(b). The order did not alter the earlier dismissal; it denied FAT Brands’s request to enter a final judgment at that stage. The Clerk of Court was directed to terminate ECF No. 160.