Court Opinion

ID: 35351
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:27:04+00
Date Added: 2024-06-11T17:13:26.314200
License: Public Domain

United States Court of Appeals
                                                                  Fifth Circuit
                                                               F I L E D
                 IN THE UNITED STATES COURT OF APPEALS           May 10, 2004
                         FOR THE FIFTH CIRCUIT
                                                           Charles R. Fulbruge III
                                                                   Clerk

                             No. 03-50795

     FEDERAL TRADE COMMISSION

                       Plaintiff - Appellee

     v.

     ASSAIL, INC; ET AL

                       Defendants

     PAR 3 INC
                       Appellant

          Appeal from the United States District Court
                for the Western District of Texas
                          No. W-03-CV-7

Before KING, Chief Judge, and REAVLEY and EMILIO M. GARZA,

Circuit Judges.

PER CURIAM:*

     Par 3, Inc., a nonparty to the underlying suit, appeals the

district court’s denial of its motion to dissolve a preliminary

injunction as to it.    We dismiss the appeal as moot.

     While Par 3’s appeal was pending, the district court

     *
          Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.

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converted the preliminary injunction into a permanent injunction

and entered a final judgment.   The district court’s grant of a

permanent injunction rendered this particular appeal moot.     See

Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc.,

527 U.S. 308, 314 (1999) (“Generally, an appeal from the grant of

a preliminary injunction becomes moot when the trial court enters

a permanent injunction, because the former merges into the

latter.”); La. World Exposition, Inc. v. Logue, 746 F.2d 1033,

1038 (5th Cir. 1984).

     As Par 3 admits (repeatedly) in its brief to this court, the

objections it has to the preliminary injunction are the same

objections it would have to the permanent injunction.   According

to Par 3, the district court lacked jurisdiction to enjoin it

(either by preliminary injunction or by permanent injunction)

because Par 3 is not a party to the suit, did not submit to the

jurisdiction of the court, and disputes that it is the alter ego

of the defendant in the underlying suit.   Because all the issues

raised by Par 3 are common to the preliminary injunction and the

permanent injunction, Par 3’s appeal cannot be saved from

mootness on the ground that it involves issues particular to the

preliminary injunction.   See La. World Exposition, 746 F.2d at

1038; cf. Grupo Mexicano, 527 U.S. at 317-18 (holding that an

appeal from a preliminary injunction was not rendered moot by an

order granting a permanent injunction, where the issue appealed

“[was] independent of [the plaintiffs’] claim on the merits” and

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“ha[d] nothing to do with the validity of the permanent

injunction”).   We note that, had Par 3 appealed the permanent

injunction, it could have gotten “as broad a review on the merits

of the order granting the permanent injunction as [it] could have

obtained on appeal” from the order denying its motion to dissolve

the preliminary injunction.    La. World Exposition, 746 F.2d at

1038.

     Par 3’s remaining arguments are, likewise, unmeritorious.

Contrary to Par 3’s assertion, the district court had the power

to convert the preliminary injunction into a permanent

injunction; it is settled that a district court has jurisdiction

to proceed with the merits of the case and to grant a permanent

injunction while an appeal of a preliminary injunction order is

pending.   Ry. Labor Executives’ Ass’n v. City of Galveston, 898

F.2d 481, 481 (5th Cir. 1990); see also Webb v. GAF Corp., 78

F.3d 53, 55 (2d Cir. 1996).    Furthermore, Par 3 may not convert

this appeal into an appeal of the order granting a permanent

injunction, through Federal Rule of Civil Procedure 4(a)(2) or

otherwise.   See Certified Grocers of Ill., Inc. v. Produce Union,

Local 703, 816 F.2d 329, 331 (7th Cir. 1987).   Thus, we conclude

that Par 3’s appeal is moot.

     At oral argument, the Federal Trade Commission wisely

conceded that Par 3 may challenge the final judgment and the

permanent injunction either through a motion under Rule 60(b) of

the Federal Rules of Civil Procedure or in contempt proceedings.

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If Par 3 chooses to pursue either of these options, the district

court may find guidance in Zenith Radio Corp. v. Hazeltine

Research, Inc., 395 U.S. 100 (1969).

     Accordingly, we DISMISS as moot Par 3’s appeal from the

district court’s denial of its motion to dissolve the preliminary

injunction.   Each party shall bear its own costs.

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