1996 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

4-17-1996

Bethel v. McAllister Bros Inc

Precedential or Non-Precedential:

Docket 95-1436

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Recommended Citation

"Bethel v. McAllister Bros Inc" (1996). 1996 Decisions. Paper 199.

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

 

No. 95-1436 

 

JOHN BETHEL 

v. 

MCALLISTER BROTHERS, INC.; 

FRANK J. HUESSER 

 Thomas Bethel, as 

 Administrator of the 

 Estate of John 

Bethel, 

 Appellant

 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Civ. No. 91-02032) 

 

Argued January 30, 1996 

BEFORE: GREENBERG, NYGAARD, and LAY,* Circuit Judges

(Filed: April 17, l996) 

 

 Patrick J. O'Connor (argued) 

 Thomas G. Wilkinson, Jr. 

 James E. Brown 

 Cozen and O'Connor 

 The Atrium 

 1900 Market Street 

 Philadelphia, PA 19103 

 Attorneys for Appellant

 
2 

*Honorable Donald P. Lay, Senior Judge of the United States Court 

 of Appeals for the Eighth Circuit, sitting by designation. 

 James F. Young (argued) 

 Donna L. Adelsberger 

 Krusen Evans and Byrne 

 601 Walnut Street 

 The Curtis Center, Suite 1100 

 Philadelphia, PA 19106 

 Attorneys for Appellee

 McAllister Brothers, Inc.

 Stephen J. Cabot 

 Maria L. Petrillo (argued) 

 Brian P. Kirby 

 John A. Gallagher 

 Harvey, Pennington, Herting 

 & Renneisen, Ltd. 

 Eleven Penn Center 

 1835 Market Street, 29th Floor 

 Philadelphia, PA 19103 

 Attorneys for Appellee

 Frank J. Huesser

 

OPINION OF THE COURT 

 

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 
3 

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. § 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 
4 

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.0 In reaching this result, we relied on 

 

0In our earlier opinion we pointed out that we probably could 

sustain the verdict on the ground that McAllister's statements 

constituted slander per se, thus obviating the need for a showing 

of special harm. Appellant, though noting this point in his 
5 

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.0 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, 

 

brief, does not rely on it in an effort to overturn the order he 

challenges on this appeal. 

0McAllister also asserted bases for the motion under Fed. R. Civ. 

P. 60(b)(2) and (6), which the district court rejected and which 

are not implicated on this appeal. 
6 

the district court amended the order of July 11, 1994, by 

certifying it under 28 U.S.C. § 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,0 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 

 

0The district court did not use the term "perjury" in describing 

Bethel's testimony in its July 11, 1994 opinion, but the parties 

have characterized its ruling as finding that Bethel had 

committed perjury. Therefore we, too, use that term. 
7 

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, 1995.0

 

0The district court exercised federal question and diversity 

jurisdiction. While the complaint recites that the court could 

exercise supplemental jurisdiction under 28 U.S.C. § 1367 over 

the defamation claim because it had federal question jurisdiction 

under 28 U.S.C. § 1331, and admiralty and maritime jurisdiction 

under 28 U.S.C. § 1333, this assertion is questionable. See Lyon 

v. Whisman, 45 F.3d 758 (3d Cir. 1995). However, the diversity 
8 

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[3], 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.0 

 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. 

 

jurisdiction was sufficient for the court to hear the case. We 

exercise jurisdiction under 28 U.S.C. § 1291. 

0Huesser makes the same contentions. 
9 

 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 allor-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 
10 

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. Quite to the contrary, 

he does not now seek a trial but argues only that a new trial 

should not have been granted. 

 Sullivan, 566 F.2d 444, is somewhat like Spain. There 

the plaintiffs sought to bring a class action against an 

insurance company predicated on a claim that it overcharged 

certain physicians for malpractice insurance. The named 
11 

plaintiffs moved to certify a class of plaintiffs, but on the day 

of trial the district court denied the motion to certify. The 

plaintiffs then refused to present any evidence, whereupon the 

court dismissed the action for failure to prosecute. 

 The plaintiffs then appealed, seeking only a review of 

the order denying class certification, as they did not contend 

that the dismissal was erroneous. Id. at 445. In these 

circumstances, we held that the plaintiffs had appealed from an 

interlocutory order, and dismissed the appeal for want of 

jurisdiction. Sullivan differed from Spain in one respect, 

however, because in the latter case the employee urged that the 

district court improperly dismissed the balance of the case for 

failure to prosecute after it entered the earlier order to which 

the employee objected. Thus, in Spain, unlike in Sullivan, we 

did not dismiss the appeal and instead affirmed the district 

court's order dismissing the case for failure to prosecute. 

 Sullivan does not support McAllister's contention that 

we lack jurisdiction to consider the appeal from the orders of 

July 11, 1994, and December 13, 1994. In Sullivan, the order 

denying the motion to certify the class was interlocutory because 

a reversal of it would not have ended the litigation, as the 

certification of the class would have been a futile gesture 

unless the plaintiffs could proceed to trial. Thus, in Sullivan, 

unlike in this case, a reversal of the order denying 

certification and predating the dismissal would have resulted in 

further litigation, which would have required reinstatement of 
12 

the action. Here, a reversal, no less than an affirmance, would 

end this litigation. 

 Marshall, 492 F.2d 917, is also similar to Spain. In 

Marshall, a prisoner who brought a civil rights action under 42 

U.S.C. § 1983 against prison officials and medical personnel at 

the prison, would not proceed with the trial after the district 

court refused to grant a writ of habeas corpus ad testificandum

for certain persons the prisoner desired to call as witnesses at 

the trial. The district court dismissed the action for failure 

to prosecute, whereupon the prisoner appealed from both the 

dismissal and the denial of the writ. We affirmed the dismissal 

for lack of prosecution but would not reach the issues generated 

by the court having denied the application for the writ, pointing 

out that "[i]f a litigant could refuse to proceed whenever a 

trial judge ruled against him, wait for the court to enter a 

dismissal for failure to prosecute, and then obtain review of the 

judge's interlocutory decision, the policy against piecemeal 

litigation and review would be severely weakened." Id. at 919. 

 Yet Marshall, too, is distinguishable from this case. 

In Marshall, as in Sullivan, the appellant wished to appeal an 

order prior to the final order as a prelude to further 

litigation. Furthermore, in Marshall, as in both Spain and 

Sullivan, the appellant could obtain meaningful relief in the 

action only if the order of dismissal was vacated or reversed and

there then was a trial on the merits. 

 Our decisions in Spain, Sullivan, and Marshall, of 

course, fundamentally were premised upon the federal policy 
13 

against piecemeal appeals, codified in the final judgment rule of 

28 U.S.C. § 1291. See Carr v. American Red Cross, 17 F.3d 671, 

678 (3d Cir. 1994) ("The finality rule 'reflects federal policy 

against piecemeal appeals.'") (quoting Praxis Properties, Inc. v. 

Colonial Sav. Bank, 947 F.2d 49, 54 n.5 (3d Cir. 1991)). Section 

1291 provides that "[t]he courts of appeals . . . shall have 

jurisdiction of appeals from all final decisions of the district 

courts of the United States." While we give "a practical rather 

than technical construction" to section 1291, we must take care 

not to sacrifice the policy of limited appellate jurisdiction. 

Id. (citing Fassett v. Delta Kappa Epsilon, 807 F.2d 1150, 1156 

(3d Cir. 1986), cert. denied, 481 U.S. 1070, 107 S.Ct. 2463 

(1987)). With limited exceptions, we will not entertain an 

appeal unless the district court's order "ends the litigation on 

the merits and leaves nothing more for the court to do but 

execute the judgment." Digital Equip. Corp. v. Desktop Direct, 

Inc., 114 S.Ct. 1992, 1995 (1994) (citations and internal 

quotation marks omitted); Byrant v. Sylvester, 57 F.3d 308, 311 

(3d Cir. 1995). That standard permitting appellate review has 

been met here. If we set aside the district court's orders of 

July 11, 1994, and December 13, 1994, appellant will be entitled 

to entry of a judgment in his favor, and if we affirm the orders, 

by his own stipulation, he will not be entitled to a trial. In 

contrast to the situations raised by the appeals in Spain, 

Sullivan, and Marshall, the litigation would be terminated in 

either case. Consequently we are persuaded that notwithstanding 
14 

their original character, the orders of July 11, 1994, and 

December 13, 1994, are final and appealable. 

 In this regard, we observe that it is well established 

that otherwise non-appealable orders may become appealable where 

circumstances foreclose the possibility of piecemeal litigation. 

For example, an order dismissing a complaint without prejudice is 

ordinarily not appealable. Where, however, the plaintiff cannot 

cure the defect in the complaint or elects to stand on the 

complaint without amendment, the order becomes final and 

appealable. See Welch v. Folsom, 925 F.2d 666, 668 (3d Cir. 

1991); see also Umbenhauer v. Woog, 969 F.2d 25, 30 n.6 (3d Cir. 

1992) (holding that order of dismissal without prejudice was 

appealable where counsel informed court of appeals at oral 

argument that statute of limitations had run). Indeed, the 

orders in this case have even greater indicia of finality than an 

appealable order dismissing a complaint without prejudice as 

their reversal, unlike the reversal of an order dismissing a 

complaint without prejudice, will not lead to a trial in the 

district court.0

 Moreover, an otherwise non-appealable order may become 

final for the purposes of appeal where a plaintiff voluntarily 

and finally abandons the other claims in the litigation. See

Fassett, 807 F.2d at 1155-57. In Fassett, for example, the 

 

0We recognize that in some cases a reversal might lead to further 

proceedings regarding whether relief should have been granted 

under Rule 60(b)(3), see Stridiron v. Stridiron, 698 F.2d 204, 

208 (3d Cir. 1983), but even if there were such a reversal here 

it would not lead to further proceedings addressing the merits of 

the case as appellant has abandoned his right to a new trial. 
15 

district court granted summary judgment in favor of all the 

defendants save one in a diversity action. Choosing not to 

proceed to trial against the remaining defendant, the plaintiffs 

voluntarily dismissed their complaints against him. Id. at 1154. 

On appeal, we held that the summary judgments were appealable for 

two independent reasons. First, we found that the statute of 

limitations had run on the plaintiffs' claims against the 

remaining defendant at the time of the dismissals. Id. at 1155. 

Second, the plaintiffs represented at oral argument that they 

would not pursue their claims against the remaining defendant in 

the federal courts. Id. at 1156-57. In either case, there were 

no outstanding issues or parties remaining in the district court 

so that we had jurisdiction over the appeal. Id. at 1155, 1157. 

We explained that "it would be anomalous to hold that a plaintiff 

had no right to appeal the dismissal of all but one of his claims 

after that one claim not initially dismissed, had thereafter been 

voluntarily and finally abandoned." Id. at 1155. See also

Tiernan v. Devoe, 923 F.2d 1024, 1031 (3d Cir. 1991) (holding 

that settlement agreements between plaintiffs and three of four 

defendants were appealable where plaintiffs renounced claims 

against fourth defendant at oral argument).0

 

0Al-Torki v. Kaempen, F.3d , 1996 WL 89101 (9th Cir. 

Mar. 5, 1996), which Judge Nygaard cites is factually 

distinguishable because there the appellant challenged an order 

for a new trial after the original trial as well as the 

subsequent order dismissing his complaint when he did not proceed 

at the new trial. Thus, while he challenged the district court 

order granting a new trial, unlike appellant he sought a new 

trial himself in the event that the court of appeals upheld the 

district court's order granting a new trial. Furthermore, 

Al-Torki involved an appeal from an order for a new trial under 
16 

 We note a persuasive analogy in this case to our review 

of orders granting a new trial pursuant to Fed. R. Civ. P. 59. 

Like the grant of a Rule 60(b) motion, an order granting a new 

trial under Rule 59 ordinarily is interlocutory and nonappealable. National Passenger R.R. Corp. v. Maylie, 910 F.2d 

1181, 1183 (3d Cir. 1990) ("When an order granting a Rule 60(b) 

motion merely vacates the judgment and leaves the case pending 

for further determination, the order is akin to an order granting 

a new trial and in most instances, is interlocutory and 

nonappealable."). The grant of a new trial under Rule 59, 

however, does not escape review. On appeal following the new 

trial, we will review the order and may reinstate the judgment 

from the first trial if we find that the new trial should not 

have been granted. Blancha v. Raymark Indus., 972 F.2d 507, 511-

12 (3d Cir. 1992). In this case, it is as if the appellant were 

 

Fed. R. Civ. P. 59 rather than an appeal from an order for a new 

trial under Fed. R. Civ. P. 60(b)(3) following the vacation of a 

judgment on a post-trial motion for relief from a judgment. Judge 

Nygaard notes, typescript at 6 n.1, "[a]nalytically, [a] second 

trial held after grant of a new trial under Fed. R. Civ. P. 59 

can be viewed as a continuation of the first." But his support 

for this statement comes from 15B Charles A. Wright, Federal 

Practice and Procedure § 3915.5 at 299 (2d ed. 1992) which 

indicates that "[n]ew trial orders can be seen as part of the 

original and ordinary trial process." However, this 

characterization does not apply to a new trial ordered following 

the vacation of a judgment under Fed. R. Civ. P. 60(b)(3) which 

certainly is not part of the "original and ordinary trial 

process." Yet to a degree Al-Torki does support Judge Nygaard's 

position on this appeal. Nevertheless we believe that our result 

is correct for the reasons we have set forth. In fact, inasmuch 

as allowing the appeal on the limited issues which appellant 

raises does not offend principles of finality, we could justify 

dismissal of the appeal only as a sanction for appellant's 

failure to prosecute the case at the retrial. We see no reason 

for such a sanction as appellant is not seeking a new trial. 
17 

challenging the grant of a new trial after an adverse judgment in 

the second trial. The appellant is essentially willing to 

concede defeat in the second trial and to rest his success or 

failure completely on the outcome of our review of the district 

court's order granting a new trial under Rule 60(b). 

 Finally, we point out that the order of dismissal does 

not preclude us from reviewing the orders of July 11, 1994, and 

December 13, 1994, even though the dismissal terminated the case 

in the district court and is not being reviewed. The appeal here 

is similar to an appeal from an order entered prior to a remand 

of a case by a district court to the state court from which the 

case had been removed. In such a case, an order entered prior to 

remand may be appealable even though the order of remand itself 

may not be appealable. See Aliota v. Graham, 984 F.2d 1350, 1353 

(3d Cir.), cert. denied, 114 S.Ct. 68 (1993). The sequence of 

events is the same here. The July 11, 1994, and December 13, 

1994 orders predated the order of dismissal. Of course, we do 

not go so far as to hold that orders entered before dismissal 

always are appealable after a dismissal. Sullivan demonstrates 

that they are not. Rather, we confine ourselves to the unique 

circumstances here in which a reversal of the earlier order would 

mean that the proceedings leading to the dismissal never should 

have been held. Other factual scenarios may lead to different 

results. Overall, we are satisfied that we have jurisdiction to 

review the July 11, 1994 and December 13, 1994 orders, and thus 

we reach the merits of this appeal. 
18 

III. THE MERITS 

 In discussing the merits, we first summarize the 

district court's comprehensive opinion of July 11, 1994. In that 

opinion, the court set forth the procedural background of the 

case and then described the facts. It indicated that Bethel had 

been injured on McAllister's vessel on December 17, 1990, when he 

fell down a flight of stairs. The following day, McAllister told 

Bethel to report to work to submit to a drug test that it claimed 

was being administered to all its river docking pilots that day. 

Bethel refused to report because he was unable to do so. On 

December 21, 1990, McAllister told Bethel that his employment was 

terminated, and he received a letter to that effect the following 

day. 

 Thereafter, rumors circulated in the Delaware River 

maritime community that McAllister terminated Bethel's employment 

because he was a drug user. Bethel never again obtained fulltime employment as a river docking pilot, although Riverbus, a 

New Jersey ferry operator, employed him as a captain operating 

boats between Camden and Philadelphia from March 25, 1992, until 

June 28, 1992. His Riverbus employment ended about three weeks 

before the trial in this case, which was from July 21, 1992, 

through July 27, 1992. Bethel testified that Riverbus fired him 

as the result of a background check, which he understood to mean 

that McAllister told Riverbus about Bethel's refusal to take the 

drug test. 

 The district court indicated that McAllister sought 

relief from the judgment on remand under Fed. R. Civ. P. 60(b)(3) 
19 

because of Bethel's fraud. In particular, the alleged fraud was 

that Bethel did not testify truthfully about the reasons Riverbus 

gave him for his discharge as Bethel, at an arbitration hearing 

in a proceeding against Riverbus ten months after the trial in 

this case, said Riverbus gave him additional reasons for his 

discharge. The district court also pointed out that, as we 

recognized in the earlier appeal, Bethel claimed three possible 

sources of lost earnings in this case, full-time docking pilot 

work, part-time docking pilot work, and the position at Riverbus 

which paid $37,000 per year. However, any claim based on loss of 

income from the first source was weak. 

 The district court compared Bethel's testimony at the 

jury trial on July 21, 1992, in this case, with his arbitration 

testimony ten months after the trial on May 17, 1993. At the 

jury trial, Bethel had testified that Riverbus told him that it 

was terminating his employment "due to an unsatisfactory 

background check" and he then explained that "[w]hat was told to 

me, is that they had called my previous employer and they had 

become aware that allegedly I refused to take a drug test. 

Therefore they did not -- they would not have me in their 

employ." Yet, at the arbitration hearing Bethel testified that 

on June 23, 1992, Riverbus gave him eight reasons why it was 

terminating his employment, which the district court in a fair 

characterization of his testimony at the arbitration hearing 

described in its July 11, 1994 opinion as follows: "(1) a bad 

background check, that included talking to McAllister, who told 

[Riverbus] that plaintiff refused to take a drug test; (2) having 
20 

been fired by former employers for being drunk; (3) failing to 

draw up a schedule for crew assignments; (4) reporting to work 

drunk; (5) not conducting a fire drill; (6) being late for work; 

(7) failure to get along with fellow employees; and (8) 

improperly changing the logs." 

 The court pointed out that the reasons that Riverbus 

gave Bethel for discharging him must have been fresh in his mind 

when he testified at the jury trial, as Riverbus had given them 

to him only three weeks earlier. Despite this fact, the court 

then indicated that it now knew in light of Bethel's testimony at 

the arbitration hearing that his "testimony given to the jury was 

patently misleading as to the reasons for his being discharged 

from Riverbus. A review of the versions of the testimony at both 

the trial and the arbitration discloses that [Bethel] only told 

the jury one of the reasons given for his firing. This turned 

out to be the reason the Third Circuit would later cite as the 

strongest evidence of his damages, in an otherwise 'weak' case." 

The court concluded that if the jury knew about the additional 

reasons Riverbus gave Bethel for the discharge, it could have 

found that Bethel's failure "to take the drug test for defendant 

McAllister had little or nothing to do with the equally or more 

substantial ground advanced by Riverbus" for the discharge. The 

court concluded that Bethel "knowingly concealed a material fact 

-- indeed, seven material facts, being the undisclosed other 

grounds -- for being discharged by Riverbus." 

 The court discussed numerous precedents under Rule 

60(b), but naturally in the inherently fact-specific inquiry 
21 

triggered by a Rule 60(b)(3) motion, all differed on the facts. 

The court then said that there "can be no doubt that the withheld 

information was well within the scope of the question being 

asked, which foreclosed plaintiff's right to pick and choose 

those items of truth he preferred the jury to hear." The court 

indicated that while it is possible that McAllister's attorney 

could have cross-examined Bethel about the reasons for the firing 

more extensively than he did, the attorney's methods were 

understandable as Riverbus terminated Bethel long after discovery 

had been closed and only three weeks before trial. The judge 

indicated that Bethel's testimony was the only basis for the 

$554,000 award and that the jury had been told that Bethel who 

was 37 years old was earning $37,000 annually at Riverbus. In 

these circumstances, the court held that McAllister was entitled 

to a new trial. Furthermore, the trial was to be on both 

liability and damages because Bethel's testimony regarding what 

Riverbus told him was relevant on both issues. 

 We use the abuse of discretion standard in reviewing 

the district court's orders under Rule 60(b)(3). Central W. 

Rental Co. v. Horizon Leasing, 967 F.2d 832, 836 (3d Cir. 1992). 

In this review, we ascertain whether the misconduct prevented 

McAllister from fully and fairly presenting its defense. See

Stridiron v. Stridiron, 698 F.2d 204, 206-07 (3d Cir. 1983). 

 We cannot say that the district court abused its 

discretion in granting the new trial. In addition to the patent 

inconsistency between Bethel's trial testimony and arbitration 

testimony that we already have noted, there were other 
22 

inconsistencies between his trial and arbitration evidence. At 

trial, Bethel testified that Riverbus gave him a letter dated 

June 24, 1992, which stated that "due to unsatisfactory 

background check, that I was to be put on probation for the rest 

of my life." In fact, the letter, which was not produced at 

trial, said "that an unsatisfactory background check and 

performance rating has been given to Captain John Bethel and that 

[he] is placed on probationary status until further notice."0

Furthermore, as the district court noted, Bethel also testified 

at the arbitration hearing that Riverbus told him on June 28, 

1992, the date it actually discharged him, that it was doing so 

because he "refused to take a drug test in McAllister's and . . . 

didn't show up for work on the weekend." In the circumstances, 

it is perfectly clear that Bethel created a false impression that 

Riverbus told him that his difficulties arising from McAllister's 

discharge of him cost him his job at Riverbus, whereas he knew 

that Riverbus had told him that much more was involved. 

 This misrepresentation was not merely material to his 

case. It was crucial. Indeed, on the first appeal, though we 

reversed the district court's order granting McAllister a 

judgment in its favor under Rule 50(b), we characterized Bethel's 

case as "thin" and described aspects of it as "not . . . strong" 

and "weak." Indeed, it was so thin that the district court felt 

 

0In the appellant's reply brief, he contends that we should not 

rely on this letter as it was not in evidence before the district 

court and the court did not rely on the letter. We reject this 

contention as the district court did rely on the letter, quoting 

it in full. 
23 

that the verdict could not stand and, on the first appeal, one 

judge of this court agreed with him. The misrepresentation thus 

buttressed a weak case and was almost certainly the basis for the 

award of damages, as we cannot understand how the jury could have 

settled on its large award of compensatory damages, except on the 

basis of Bethel's loss of earnings attributable to Riverbus's 

discharge. Clearly, by concealing the actual reasons Riverbus 

gave him for his discharge, Bethel prevented McAllister from 

fully and fairly presenting its defense, as these events took 

place after discovery was closed and immediately before the 

trial. 

 We acknowledge that it is less clear that the 

misrepresentation was responsible for the verdict on liability, 

though it well may have been, as it is possible that the jury 

might have believed that Riverbus had not discharged Bethel 

because it believed him to be a drug user if it knew that 

Riverbus gave Bethel additional reasons for discharging him. In 

any event, in view of the appellant's concession that he does not 

want a new trial, any uncertainty of the consequence of the 

perjury on the verdict of liability does not matter, as a finding 

of liability without an opportunity for a damages trial would be 

of no use to him. As we have indicated, appellant made it clear 

at oral argument that the only relief he wanted on this appeal 

was a reinstatement of the verdict in Bethel's favor and entry of 

a judgment on it.0 In these circumstances, we need not explore 

 

0This concession is understandable since Bethel's arbitration 

proceeding against Riverbus resulted in a decision after the 
24 

the possibility that even if we held that the district court 

should have limited its order for a new trial to a trial on 

damages, the line of cases culminating in Spain, which we 

discussed above, would preclude appellant from proceeding with 

the case on the theory that he refused to proceed on a trial 

which would have included damages, when he had an opportunity to 

do so.0

IV. CONCLUSION 

 For the foregoing reasons, we will affirm the orders of 

July 11, 1994, and December 13, 1994, and will dismiss the appeal 

to the extent that appellant recited in his notice of appeal that 

it was taken from the order of April 28, 1995. 

 

 

trial requiring his reinstatement and because Bethel died before 

the original appeal. In these circumstances, the damages the 

appellant could have demonstrated at a retrial surely would have 

been limited. Furthermore, a liability trial would have been 

very difficult for the appellant because there is evidence that 

Bethel died from an adverse reaction to drug use. Indeed, his 

death certificate recites that such a reaction was the cause of 

death. Accordingly, while Bethel contended McAllister defamed 

him by suggesting that he was a drug user, McAllister at a 

retrial would have been in a position to assert a truth defense. 

0In some situations, it might be appropriate for a court to 

conduct a hearing to determine the relevant facts on a motion 

under Rule 60(b)(3), but in this case that was not necessary 

because the records of the trial and the arbitration proceeding 

conclusively demonstrated the fraud and nothing that the 

appellant produced on the motion in the district court was 

adequate to trigger a need for a hearing. See Stridiron, 698 

F.2d at 207. 
25 

NYGAARD, Circuit Judge, concurring. 

 The district court, after earlier granting defendants' 

motion for relief from judgment and ordering a new trial, 

dismissed the case for failure to prosecute when appellant, who 

first stated unequivocally that he would present his case, later 

recanted and expressly refused to proceed to trial. The 

appellant does not challenge the propriety of the district 

court's dismissal. Indeed, the majority and I also agree that 

there was nothing improper about it. Without challenging the 

propriety of that dismissal, however, appellant asks that we 

review the underlying interlocutory orders granting a new trial. 

I would not do so. Unless we can vacate or reverse the dismissal 

order, the case is over; because that appropriate dismissal lies 

athwart the way to review all other underlying, interlocutory 

orders. 

 Before now we would not review underlying interlocutory 

orders if the district court did not abuse its discretion by 
26 

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. 

 We established this narrow scope of review for three 

reasons: first, there is a presumption of propriety for court 

orders -- they are enforceable unless stayed or reversed; second, 

to avoid piecemeal litigation -- because, as we recognize, the 

results of the new trial may well cure complaints about the 

interlocutory orders; and third, to vindicate and encourage 

proper respect for the district court's authority -- because, we 

simply cannot allow counsel to flout proper orders of the 

district courts. The majority cannot overturn our precedent. 

Instead, it creates an exception to our holdings in Spain, 

Sullivan, and Marshall, which is both unnecessary and imprudent. 

I would not do so. I would affirm the district court's 

dismissal, and hence not reach the propriety of the interlocutory 

orders. 

I. 

 Appellant incorrectly theorizes that a decision 

granting a new trial is always reviewable after any subsequent 

judgment. In Blancha v. Raymark Indus., 972 F.2d 507 (3d Cir. 

1992), we held that: 
27 

[w]hile an order granting a new trial is 

purely interlocutory and thus is not an 

appealable final order within the meaning of 

section 1291, such an order is reviewable 

after a final order is entered following 

retrial. 

Id. at 511-512 (emphasis added). 

 If, however, there is no retrial because the district 

court dismisses the case in response to plaintiff's clear and 

unequivocal refusal to proceed with a second trial, and 

especially where as here, the appellant does not challenge the 

dismissal, then the earlier interlocutory order is simply not 

reviewable. This result is both fair and prudent. Where the 

dismissal was a sanction, as for failure to prosecute, the case 

is distinguishable from those cases where the case was properly 

litigated to a conclusion, and the unsuccessful party then seeks 

on appeal to challenge the interlocutory order granting a new 

trial. 

Al-Torki v. Kaempen, -- F.3d ---, ---, 1996 WL 89101, *4 (9th 

Cir. March 5, 1996). We would serve a greater purpose by 

admonishing counsel to follow proper procedure and to heed the 

orders of our colleagues on the trial bench, and by requiring 

that litigants give the system the chance to resolve disputes 

through trial, rather than allowing them to simply take a dive 

and then seek relief in the court of appeals. 

 In Marshall, the plaintiff refused to proceed with 

trial, and the district court dismissed the case for failure to 

prosecute. We stated that "the scope of appellate review of an 

order of dismissal is extremely narrow, confined solely to 

whether the trial court has abused its discretion." 492 F.2d at 

918. Appropriately, we found that the district court did not 

abuse its discretion: 

Indeed, appellant left the district court no 

choice. . . . [T]he "proper procedure" was to 

proceed. . . . The issues in the case may 

well have been resolved. . . . If appellant 

had proceeded, he might have been successful. 
28 

If appellant had proceeded and lost, the 

appellate court would have had a complete 

record upon which to make its determination. 

 For these reasons we affirm the 

dismissal for lack of prosecution and do not 

reach the substantive issue involving the 

[underlying ruling] . . . . 

Id. at 919. 

 Marshall emphasized that if we were to review the 

interlocutory rulings, we would "undermine the ability of trial 

judges to achieve the orderly and expeditious disposition of 

cases." Id. What appellant would have us do, and what the 

majority does, directly undermines the trial court's authority to 

control the proceedings before it. 

 In Sullivan, plaintiffs sued an insurance company for a 

premium refund. Plaintiffs sought class certification, which was 

denied by the district court on the day of trial. In the face of 

this ruling, plaintiffs refused to present any evidence. The 

court then dismissed the case for failure to prosecute. We noted 

that, since plaintiffs did not contend that the court abused its 

discretion by dismissing for failure to prosecute, the only 

matters they presented for review on appeal were the 

interlocutory class certification decisions. We dismissed for 

lack of an appealable order. Counsel for appellant, here, made 

it very clear at oral argument that he does not challenge the 

district court's discretion in dismissing his case. 

 In Spain, we faced the situation where, after the 

district court granted partial summary judgment, the plaintiff 

refused to proceed on her remaining claims of racial 

discrimination and unlawful retaliation. She believed (as 
29 

appellant here mistakenly believes) that the court's previous 

rulings effectively precluded her from succeeding on her 

remaining claims. The court appropriately dismissed the 

remaining claims for failure to prosecute. On appeal, we held 

that the court did not abuse its discretion in so doing. Spain's 

refusal to prosecute her remaining claims forever barred any 

recovery on them. We reasoned 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. 

26 F.3d at 454. Bethel was no less obliged to proceed simply 

because he had an earlier underlying judgment in his favor. 

 The majority tries to distinguish Spain on the basis 

that the appellant here does not seek to be relieved of the 

dismissal. I believe that he must, however, have the order of 

dismissal set aside before the interlocutory rulings can be 

reviewed. The majority, instead, saves appellant (and future 

appellants like him) from his own sanctionable conduct and grants 

him an undeserved opportunity to have the judgment from the first 

trial reinstated. The majority reasons that, because review 

under our ruling on the merits will end this litigation, the 

underlying interlocutory orders were transformed into final 

appealable orders. 

 This reasoning, while temptingly efficient, does not 

comport with law or logic. The general rule is that an order 

granting a new trial becomes reviewable after the second trial 

(or other judgment entered in the normal course of proceedings). 
30 

If the second trial is aborted by a dismissal when a litigant 

refuses to proceed at the moment of trial, the litigant must 

suffer the consequences of his refusal. I would conclude that 

Bethel's position, that he need not challenge the dismissal for 

failure to prosecute, is fatal to his appeal.0 

 Were we simply to affirm this unquestionably proper 

dismissal order, which I say we must, we would do no injustice to 

appellant. When the district court informed appellant well 

before the date of the second trial that, if he refused to 

proceed, it would dismiss the case for failure to prosecute, the 

record establishes that the appellant clearly indicated he 

 

0Analytically, a second trial held after grant of a new trial 

under Fed. R. Civ. P. 59 can be viewed as a continuation of the 

first. The new trial order thus merges with the second judgment. 

New trial orders can be seen as part of the 

original and ordinary trial process, to be 

protected against immediate appellate 

intrusion for reasons little different from 

the reasons that preclude direct appeal from 

evidentiary rulings during the course of 

trial. In many cases a retrial can be 

accomplished much more quickly than an 

appeal, and the result may avoid the need for 

any appeal. 

15 B Charles A. Wright et al., Federal Practice and Procedure

§3915.5 (2d ed. 1992 & Supp. 1995). 

 Although this case involves the grant of a new trial 

under Fed. R. Civ. P. 60(b)(3), the grant of a new trial under 

either rule is an unappealable interlocutory order which is 

afforded review after subsequent judgment. When appeal is taken 

from a properly obtained judgment in the continued proceedings, 

if the judgment is inconsistent with the result in the first 

trial, the appellate court can then determine whether the initial 

result prevails because the grant of the new trial was error. 

When, however, the entire case is dismissed for failure to 

prosecute, unless the court abused its discretion in ordering the 

sanction, the correctness of any interlocutory decisions is 

irrelevant and the sanction prevails. 
31 

understood the consequences of a judgment for failure to 

prosecute: his appeal of the underlying rulings would be barred. 

 The district court indicated, as we did in Marshall, 

that if appellant prevailed at the second trial his allegations 

of error would be cured by results; and if not, he could then 

appeal. The court did not demand anything unreasonable from 

appellant, but required only that he give the system a chance to 

produce a favorable result under well-established procedure. And 

if the court's interlocutory ruling had caused him to lose, he 

could appeal. That is how the system works. Appellant 

nevertheless chose to quit at a most inopportune time. We should 

not save him from his knowing and calculated decision. 

 The court in Al-Torki, confronted this very issue, and 

held that an order granting a new trial is unreviewable if the 

claims are subsequently dismissed for failure to prosecute. Like 

appellant, Al-Torki won at the first trial. After the district 

court granted defendant a new trial, Al-Torki failed to appear at 

the second trial, and the district court dismissed the case for 

failure to prosecute. Unlike appellant, Al-Torki argued that the 

district court erred by dismissing for failure to prosecute. 

 After the appellate court rejected Al-Torki's argument 

regarding the dismissal, it determined that, as a result of the 

proper dismissal, the order granting the new trial was 

unreviewable. The court opined: 

This case presents a simple refusal to appear 

at the time set for trial. Such a willful 

failure to appear for trial forfeits a 

litigant's right to appeal interlocutory 

orders prior to judgment. 
32 

1996 WL 89101, *5. Appellant's conduct here was no less willful. 

The result and reasoning in Al-Torki is sound, and it is 

consistent with our jurisprudence. 

II. 

 I fully recognize that a litigant who has succeeded in 

a first trial may not want to fight the battle again, and that 

the rule denying immediate review of an order granting a new 

trial places burdens on the originally successful litigant. 

Nevertheless, new trial orders are not unusual, and the rule is 

firmly rooted in the policies embodied by Congress in 28 U.S.C. 

§1291, which support appeals only from, and of, final judgments, 

save in very limited circumstances. 

 Moreover, the law recognizes these burdens and provides 

a procedure by which a party may move for entry of judgment in 

favor of the opposing party. If his motion is granted, he may 

then appeal without enduring the second trial. See United 

States V. Procter & Gamble Co., 356 U.S. 677 (1958) (entry of a 

final judgment in favor of party sought by opposing party allows 

the opposing party to appeal the adverse underlying rulings); 

Trevino-Barton v. Pittsburgh Nat'l Bank, 919 F.2d 874 (3d Cir. 

1990) (same). This procedure affords review of the order, even 

though the party appealing solicited the judgment. 

A party who is willing to gamble on review of 

the new trial order, however, may be able to 

win the right to appeal by soliciting entry 

of an adverse final judgment. There is a 

cogent argument that the solicited judgment 

is final if the scope of review is limited to 

the order granting a new trial and affirmance 

of that order leads to affirmance of the 

judgment rather than remand for a new trial. 
33 

Appeal is bought at the cost of wagering all 

on reversal of the new trial order, but this 

cost may seem small to a party who is unable 

to afford a new trial in any event. 

15B Charles A. Wright et al., Federal Practice and Procedure

§3915.5 (2d ed. 1992 & Supp. 1995). 

 Appellant states that he moved for entry of judgment on 

this basis, but the district court denied the motion. He did not 

attempt to appeal this order -- which would be rendered 

essentially unreviewable following a retrial -- under the 

collateral order doctrine of Cohen v. Beneficial Indus. Loan 

Corp., 337 U.S. 541 (1949), and instead emphatically indicated to 

the court and opposing counsel that, he would indeed "put on a 

complete trial." Nonetheless, appellant refused to go forward on 

the day of trial, and the district court, not surprisingly, 

dismissed the case for failure to prosecute. 

III. 

 Appellant's refusal to try his case combined with 

counsel's statement at oral argument on appeal that appellant now 

will risk all on our decision, does not substitute for his 

obligation to obey proper orders and to follow proper procedure, 

and can neither nullify the otherwise proper dismissal, nor 

resuscitate his earlier verdict. I would hold that the district 

court's underlying orders are not reviewable after a dismissal 

for failure to prosecute unless and until appellant can 

successfully challenge the dismissal. Because the dismissal here 

is unassailed and unassailable, I would affirm the judgment of 
34 

the district court, and never reach the issue of whether the 

district court erred by ordering a new trial.