On Appeal from the United States District Court for the Eastern District of Pennsylvania
Before now we would not review underlying interlocutory orders if the district court did not abuse its discretion by entering judgment for failure to prosecute. See Sullivan v. Pacific Indem. Co., 566 F.2d 444, 445, (3d Cir. 1977); Marshall v. Sielaff, 492 F.2d 917, 919, (3d Cir. 1974). See also Spain v. Gallegos, 26 F.3d 439 (3d Cir. 1994). These cases establish that a party who tries to obtain appellate review of otherwise interlocutory orders by refusing to proceed to trial engages in an impermissible strategy.
GREENBERG, Circuit Judge.
I. THE HISTORY OF THE CASE
This matter is before this court on appeal following proceedings having an unusual procedural history. Appellee, McAllister Brothers, Inc., is a tugboat operator on the Delaware River in the Philadelphia area. McAllister employed John Bethel as a river docking pilot between December 1987 and December 1990, when it discharged him. Thereafter, Bethel brought this action against McAllister in the district court but he died after the trial. Consequently, Thomas Bethel, the administrator of his estate, is now the appellant. Our references to "Bethel" in this opinion, however, are to John Bethel.
Bethel alleged in the complaint that he sustained personal injuries on December 17, 1990, while working as a docking pilot for McAllister, which shortly thereafter wrongfully discharged him. He also contended that McAllister defamed him by asserting that it fired him because he refused to take a drug test after his injury, thereby suggesting that he was a drug user and hindering his efforts to obtain employment in the maritime and shipping industry. In addition to McAllister, Bethel sued appellee Frank J. Huesser, a supervisor at McAllister, charging that he was also liable for these alleged wrongs. Bethel obtained a judgment for his personal injuries under the Jones Act, 46 U.S.C. Section(s) 688, which McAllister satisfied, and McAllister obtained a judgment as a matter of law on the wrongful discharge claim, which is not at issue on this appeal. Inasmuch as we are not concerned with these claims, and because Huesser's presence in this litigation in no way affects our disposition of the issues, as a matter of convenience we will treat this case as simply a defamation action between Bethel, succeeded by the appellant, and McAllister. Of course, we nevertheless have considered the arguments Huesser set forth both in his brief and at oral argument.
At the trial, Bethel recovered a judgment for $554,000 in compensatory damages and $250,000 in punitive damages on the defamation claim. McAllister then successfully moved for a judgment as a matter of law under Fed. R. Civ. P. 50(b). The court concluded that the other towing companies in the Philadelphia area, which Bethel alleged would not hire him after McAllister discharged him, did not understand McAllister's statements as indicating that Bethel was a drug user, and further concluded that Bethel failed to prove that McAllister's statements caused him "special harm" as required by Pennsylvania law which is applicable to the defamation issues in this action. Agriss v. Roadway Express, Inc., 483 A.2d 456, 461 (Pa. Super. Ct. 1984); see also Solosko v. Paxton, 119 A.2d 230, 232 (Pa. 1956).
Bethel then appealed, but before we could hear and decide the appeal, he died on December 4, 1993, so appellant was substituted for him as a party. On February 4, 1994, over a dissent, in an unreported opinion we reversed the order granting the judgment as a matter of law and remanded the case for entry of a judgment in favor of the appellant. Bethel v. McAllister Bros., Inc., No. 93-1358 (3d Cir. Feb. 4, 1994). We found that there was sufficient evidence that McAllister had defamed Bethel to support the jury's verdict. Furthermore, we concluded that there was evidence that he had suffered special harm because Riverbus, Inc., a ferry operator that employed him after McAllister discharged him, terminated that employment when it learned from McAllister that it had discharged him for refusing to take a drug test. *fn1 In reaching this result, we relied on Bethel's testimony that Riverbus fired him when it acquired that information in a background check. We also indicated that the award of compensatory damages was predicated, at least in part, on Riverbus having fired him. On April 12, 1994, the district court entered judgment in favor of Bethel against McAllister in accordance with our mandate.
On March 1, 1994, McAllister moved in the district court for relief from the judgment to be entered on the remand pursuant to Fed. R. Civ. P. 60(b)(3), relying on evidence that it discovered after we reversed the judgment in favor of McAllister to establish that Bethel committed fraud at the trial. *fn2 The evidence was Bethel's testimony in an arbitration proceeding against Riverbus after it discharged him. Bethel testified in that proceeding that Riverbus discharged him for a myriad of reasons, of which his refusal to take the drug test as directed by McAllister was but one.
The district court granted McAllister's motion in an opinion and accompanying order, both dated July 11, 1994. The court found that Bethel had given "patently misleading" testimony and had "knowingly concealed a material fact" at the trial and thus had committed fraud. Consequently, the court vacated the judgment of April 12, 1994, and granted McAllister a new trial on both liability and damages. Thereafter, at appellant's request, the district court amended the order of July 11, 1994, by certifying it under 28 U.S.C. Section(s) 1291(b) so that he could seek leave to appeal. We, however, denied leave to appeal on September 19, 1994. In the meantime, the appellant sought reconsideration of the order of July 11, 1994, with respect to the scope of the retrial, which he argued the court should have limited to damages. The district court, by order entered December 13, 1994, adhered to its decision that the new trial would be on both liability and damages.
The appellant did not wish to retry the case, as he had concluded that in light of the district court's findings that Bethel had committed perjury, *fn3 he could not succeed in a retrial. Thus, in his view, the order granting a new trial effectively awarded McAllister a final judgment. Therefore, at a conference on November 3, 1994, the appellant requested that the court enter a final judgment in McAllister's favor so that he could appeal the granting of the new trial. The court, though acknowledging that the appellant was in a difficult position, did not do so. In this regard we are perplexed by the appellant's articulated concerns because we can conceive of no way that the jury at a retrial could have learned of the district court's conclusion that Bethel had committed perjury, though we can understand how McAllister might have been able to use Bethel's testimony from the arbitration hearing at the retrial, particularly if appellant used Bethel's testimony from the first trial at a second trial. We explored the point at oral argument and appellant's attorney acknowledged that the district court never said that its holding under Rule 60(b)(3) somehow would be made known to the jury at the new trial.
In any event, appellant persisted in his efforts to have a final judgment entered in McAllister's favor. In a motion filed January 27, 1995, he reiterated that such a judgment should be entered because he could not proceed and wished to appeal immediately. The district court instead listed the case for trial. Appellant then unsuccessfully moved again for entry of judgment.
Ultimately, the case came on for trial on April 27, 1995. At that time, appellant was free to proceed with the trial but did not do so. Accordingly, the district court entered a final judgment against him, but did not do so on the ground that its opinion and order of July 11, 1994, granting relief under Fed. R. Civ. P. 60(b)(3), effectively had been a final judgment. Rather, as the court recited in its order of April 28, 1995, it dismissed the matter because of appellant's "failure to prosecute" the case. Appellant then appealed from the orders of July 11, 1994, December 13, 1994, and April 28, 1995. *fn4
II. THE SCOPE OF THE APPEAL
We initially address an objection raised by McAllister to our entertaining this appeal. In its brief, McAllister urges that appellant "has Waived his right to Appeal the July 11, 1994 and December 1, 1994 Orders [granting a new trial] by Failing to Prosecute his Case at the Second Trial of this Action." McAllister seemed to believe, however, that appellant could and did appeal from the order of dismissal, as it did not suggest that he could not appeal from it and it supported the dismissal on the merits. *fn5
We understand why McAllister concluded that appellant might be seeking a reversal of the order of dismissal. After all, the notice of appeal recites that appellant is appealing from that order. Furthermore, his brief sets forth the standard of review for orders of dismissal citing, inter alia, Titus v. Mercedes Benz of N. Am., 695 F.2d 746, 749 (3d Cir. 1982), and indicates that we can reverse the district court if it abused its discretion in dismissing the case. Brief at 28. Yet it did not appear clear to us from his overall brief that appellant was challenging the dismissal of the case or was seeking a new trial, for at the conclusion of his brief he requested that we reverse only the orders of July 11, 1994, and December 13, 1994, and enter judgment in his favor.
We explored this ambiguity at oral argument and inquired whether appellant was seeking a new trial. The answer was absolutely clear: his attorney stated that this was an all-or-nothing appeal in which appellant was seeking only the reinstatement of the judgment predicated on the verdict. Thus, regardless of how we decided the appeal our decision would end the case, either because the judgment entered on the verdict would be reinstated or because appellant would not proceed with a new trial as permitted by the district court in its orders of July 11, 1994, and December 13, 1994. Consequently, we need not decide whether we should uphold the order of dismissal, as appellant does not challenge that order.
McAllister predicates its contention that appellant waived his right to appeal from the July 11, 1994 and December 13, 1994 orders principally on three cases, Spain v. Gallegos, 26 F.3d 439 (3d Cir. 1994); Sullivan v. Pacific Indemn. Co., 566 F.2d 444 (3d Cir. 1977); and Marshall v. Sielaff, 492 F.2d 917 (3d Cir. 1974). In Spain, a female employee of the Equal Employment Opportunity Commission brought a district court action against the EEOC, charging sexual and racial discrimination, sexual harassment and unlawful retaliation. Immediately prior to the trial, the district court excluded certain evidence which the employee intended to offer in support of her sexual discrimination and harassment claims and barred her from proceeding on those claims on the basis of her remaining evidence. Nevertheless, the employee was free to proceed with her claims for racial discrimination and retaliation. But she declined to do so, as she regarded the excluded evidence as closely connected to those claims. The court then dismissed her case to the extent it was predicated on these remaining claims.We held that the district court abused its discretion in excluding the disputed evidence and we reversed the order dismissing the sexual discrimination and harassment claims. Nevertheless, we affirmed the dismissal of the racial discrimination and retaliation claims, as the employee "was obliged to proceed with the trial notwithstanding the exclusion of the evidence." 26 F.3d at 454. In reaching this conclusion, we explained that "[a] party disappointed with a court's ruling may not refuse to proceed and then expect to obtain relief on appeal from an order of dismissal or default." Id.
Spain clearly is distinguishable from this case. In that case the employee, though refusing to proceed with a trial though free to do so, later sought relief from the order entered as a consequence of her refusal to go forward. This case is different because while the appellant, like the employee in Spain, would not go forward with the trial he, unlike the employee in that case, does not seek to be relieved of the consequences of his failure to proceed. ...