
<head>

<title>USCA1 Opinion</title>



	<style type="text/css" media="screen, projection, print">



		<!--

		@import url(/css/dflt_styles.css);

		-->

	</style>

</head>

<body>

<p align=center>

</p><br>

<pre>                  United States Court of Appeals <br>                      For the First Circuit <br>                       ____________________ <br> <br>No. 97-2286 <br> <br>                  JOHN'S INSULATION, INC., ETC., <br> <br>                      Plaintiff, Appellant, <br> <br>                                v. <br> <br>             L. ADDISON AND ASSOCIATES, INC., ET AL., <br> <br>                     Defendants - Appellees. <br> <br>                       ____________________ <br> <br>           APPEAL FROM THE UNITED STATES DISTRICT COURT <br> <br>                FOR THE DISTRICT OF MASSACHUSETTS <br> <br>         [Hon. Edward F. Harrington, U.S. District Judge] <br>         [Hon. Lawrence P. Cohen, U.S. Magistrate Judge] <br> <br>                       ____________________ <br> <br>                              Before <br> <br>                     Torruella, Chief Judge, <br> <br>                  Bownes, Senior Circuit Judge, <br> <br>                    and Stahl, Circuit Judge.  <br> <br>                      _____________________ <br> <br>    Barry J. Byrnes for appellant. <br>    Paul M. Rezendes, with whom Nelson P. Lovins, Sarah T. Paineand Lovins & Metcalf were on brief for appellees. <br> <br> <br> <br>                       ____________________ <br> <br>                       September 11, 1998 <br>                       ____________________

          TORRUELLA, Chief Judge.  Plaintiff-appellant John's <br>Insulation, Inc., appeals from the dismissal of its complaint <br>against defendant-appellee L. Addison and Associates, Inc., and <br>from the default judgment entered on Addison's counterclaims <br>against John's Insulation.  John's Insulation also appeals from <br>several interlocutory orders.  Although the appeal from the <br>interlocutory orders presents some worrisome questions, we are <br>constrained to affirm the judgment. <br>I.  Background <br>          John's Insulation, Inc., an asbestos removal specialist, <br>was retained as a subcontractor by L. Addison and Associates, Inc., <br>a plumbing contractor, to assist in the performance of certain fire <br>and safety work at a Veteran's Affairs Hospital located in Jamaica <br>Plains, Boston.  In April 1991, after experiencing delays and other <br>construction problems, John's Insulation filed a complaint in the <br>U.S. District Court for the District of Massachusetts against <br>Addison and the Hartford Casualty & Insurance Company (the <br>underwriter of the payment and performance bonds), alleging a claim <br>against Hartford under the Miller Act, 40 U.S.C.  270(a)-(d), and <br>breach of contract and quantum meruit claims under Massachusetts <br>law against Addison.  Addison, in turn, asserted three <br>counterclaims against John's Insulation based on breach of <br>contract. <br>          Several intervening events complicated the picture.  In <br>1994, John's Insulation filed a Chapter 11 petition for <br>reorganization in the United States Bankruptcy Court for the <br>Eastern District of New York.  All proceedings in the original suit <br>were automatically stayed.  Addison, however, filed a notice of <br>claim with the bankruptcy court for damages arising from John's <br>Insulation's alleged contract violations, and moved to modify the <br>stay to permit the district court action to proceed.  The <br>bankruptcy court granted the motion to modify the stay, allowing <br>Addison to assert its claims as a set-off to John's Insulation's <br>claims.  Any recovery beyond the set-off, however, would remain <br>subject to the stay. <br>          On the twelfth day of trial, September 22, 1995, the <br>district court declared a mistrial because it had determined, as a <br>matter of law, that the plaintiff's chief witness, John's <br>Insulation Secretary and Treasurer John Fenn, lacked any <br>credibility.  After the jury exited the courtroom, plaintiff's <br>counsel, Mr. Barry J. Byrnes, asked for the names and addresses of <br>all the jurors.  After being advised of Mr. Byrnes' request, the <br>court responded that no jurors could be interviewed without its <br>express permission, and that counsel would be held in contempt if <br>any attempts were made to interview the jurors without such <br>permission.  The counselor replied that he would research the law <br>on that issue and make a formal application for permission to <br>interview the jurors.  The court noted that any such motion would <br>be denied because the practice of the court was not to interview <br>jurors.  The court then said:  "My next ruling is that your motion <br>to appear before this Court is revoked."  Finally, the court also <br>noted that Fenn should not appear as a witness in any future trial <br>in this case. <br>          In a written order memorializing its bench rulings, the <br>district court held "as a matter of law that [Fenn] is absolutely <br>incredible and without sufficient personal knowledge of the events <br>concerning which he testified."  The court therefore declared a <br>mistrial, "in order that the plaintiff's cause of action be not <br>prejudiced, . . . [and] so that the plaintiff is able to present <br>his evidence before a new jury untainted by the witness Fenn's <br>incredible testimony."  Id.  Furthermore, the district court <br>revoked the authorization it had previously granted to Barry <br>Byrnes, the plaintiff's attorney, to appear pro hac vice.  Finally, <br>the district court stayed all further proceedings in the case <br>pending the resolution of John's Insulation's bankruptcy petition.  <br>The written order, however, did not indicate whether Fenn had been <br>permanently barred from appearing as a witness in any future <br>proceedings in this case. <br>          John's Insulation appealed these orders.  On February 28, <br>1996, a prior panel of this court dismissed, as a premature appeal <br>from interlocutory orders, the appeal as to all district court <br>orders except the order staying the proceedings until the <br>resolution of the appellant's bankruptcy case.  With regard to the <br>stay order, we directed the district court to specify its reasons <br>therefor.  On March 26, 1996, the district court responded to our <br>order, stating that it refused to lift the stay.  The full text of <br>the body of its answer reads as follows: <br>            To allow the plaintiff to proceed to trial <br>            while in Bankruptcy Court provides it with <br>            the tactical advantage over the defendants <br>            of being in a "no lose" situation, a <br>            status which the plaintiff has used to <br>            conduct itself in a most antagonistic and <br>            unprofessional manner toward the Court and <br>            toward the defendants during the course of <br>            these proceedings.  Such a manner might <br>            well be designed to cover up a case <br>            lacking in any merit.  In addition, <br>            plaintiff itself has moved in the United <br>            States Court of Appeals to stay the <br>            proceedings in the District Court.  It <br>            should also be noted that plaintiff's <br>            attorney Byrnes' permission to appear in <br>            the District Court has been revoked and <br>            plaintiff has failed to designate another <br>            attorney to represent it.  This Court <br>            shall not try this case as long as <br>            Attorney Byrnes continues to <br>            unauthorizedly appear as counsel of record <br>            for the plaintiff. <br> <br>Upon receipt of the district court's answer, we vacated the stay <br>and remanded the case to the district court for further <br>proceedings.  In the meantime, John's Insulation filed a motion <br>requesting that the district court transfer the proceedings to the <br>U.S. Bankruptcy Court for the Eastern District of New York, in <br>which its bankruptcy case was pending.  On remand, the district <br>court denied the motion to transfer the case, and granted John's <br>Insulation's local counsel leave to withdraw from representing <br>John's, leaving it without an attorney of record. <br>          In November 1996, Addison moved to return the case to the <br>trial list and for an order requiring plaintiff's counsel to make <br>an appearance, on penalty of the dismissal of John's Insulation's <br>complaint and of entry of default judgment on Addison's <br>counterclaims.  Mr. Fenn responded to the motion by means of a <br>letter dated January 3, 1997, in which he stated that John's <br>Insulation had no intention of abandoning its complaint, and that <br>it was still searching for replacement counsel.   <br>          In March 1997, approximately one year after the stay had <br>been vacated and the case remanded to the district court, the court <br>held a conference in chambers, during which Mr. Fenn appeared on <br>behalf of John's Insulation to request additional time to obtain <br>new counsel.  The court granted John's Insulation until June 3, <br>1997, to retain replacement counsel, and denied Addison's request <br>to have the case returned to the trial list.  Mr. Fenn responded by <br>filing an affidavit in which he requested that, if John's <br>Insulation were unable to hire new counsel, and the court were to <br>dismiss its complaint, the counterclaims be transferred to the <br>bankruptcy court.  On May 20, 1997, the court scheduled a status <br>conference on July 7, 1997.  On May 30, 1997, Mr. Fenn wrote a <br>letter to the court requesting that the conference be rescheduled <br>because he had previously arranged a business trip for that date <br>and therefore would be unable to attend.  He also advised the court <br>that John's Insulation had been unable to retain an attorney due to <br>its financial situation, and requested additional time to hire an <br>attorney who would request a smaller retainer.  After the <br>defendants opposed the motion on the basis that a corporation, such <br>as John's Insulation, cannot be represented by a non-lawyer, and <br>that John's had been aware since September 1995 that it was <br>required to obtain new counsel, the district court denied the <br>request. <br>          At the status conference, no one made an appearance on <br>behalf of John's Insulation.  Three days later, the defendants <br>moved to dismiss John's Insulation's remaining causes of action and <br>for the entry of default judgment on their counterclaims.  The <br>district court granted the motion, advised that it would hold a <br>hearing to assess damages on Addison's counterclaims, and ordered <br>the defendants to submit documentation in support of their claim <br>for damages.  The district court did not indicate whether the <br>sanction was imposed under Fed. R. Civ. P. 37, 41(b), or 55(b)(2), <br>or, instead, pursuant to its inherent power to sanction abuses.  On <br>September 22, 1997, upon receipt of the documentation, the court <br>directed the entry of default judgment on Addison's counterclaims <br>in the amount of $734,825.87, plus pre-judgment interest at the <br>rate of 5.58%, and costs. <br>          John's Insulation now seeks review of the final orders <br>dismissing the complaint and entering default judgment on Addison's <br>counterclaims, as well as from a number of the district court's <br>interlocutory orders, including the order declaring a mistrial, the <br>order revoking Mr. Byrnes' authorization to appear pro hac vicebefore the court, and the order disqualifying Mr. Fenn from <br>testifying as an expert witness. <br>II.  Jurisdiction <br>          The notice of appeal in this case indicates that John's <br>Insulation is appealing from the judgment dated September 22, 1997, <br>"and each and every part thereof."  Because the judgment <br>conclusively settled all disputes in this case, it is a final <br>decision appealable as of right.  See Coleman v. American Red <br>Cross, 23 F.3d 1091, 1096 (6th Cir. 1994) (entry of judgment <br>dismissing complaint with prejudice for failure to prosecute is an <br>appealable final judgment); Enron Oil Corp. v. Diakuhara, 10 F.3d <br>90, 95 (2d Cir. 1993) (entry of judgment by default is an <br>appealable final judgment).  Accordingly, we have jurisdiction over <br>this appeal pursuant to 28 U.S.C.  1291. <br>III.  Scope of the Appeal <br>          Addison argues that the notice of appeal is insufficient <br>to provide us with jurisdiction over certain parts of the appeal.  <br>Relying on Fed. R. App. P. 3(c), which provides that "[a] notice of <br>appeal also must designate the judgment, order, or part thereof <br>appealed from," Addison contends that the absence of any reference <br>in the notice of appeal to any interlocutory orders deprives us of <br>jurisdiction to hear appeals from those orders.   <br>          Admittedly, the requirements of Rule 3(c) "are <br>jurisdictional in nature and their satisfaction is a prerequisite <br>to appellate review."  Smith v. Barry, 502 U.S. 244, 248 (1992); <br>see also Kotler v. American Tobacco Co., 981 F.2d 7, 10-11 (1st <br>Cir. 1992) (citing Smith).  On the other hand, as a general matter, <br>"[c]ourts will liberally construe the requirements of Rule 3."  <br>Smith, 502 U.S. at 248; see also Kotler, 981 F.2d at 11.  <br>Consequently, "noncompliance with 'mere technicalities' will not <br>defeat appellate jurisdiction . . . . so long as the litigant's <br>filing 'is the functional equivalent of what the rule requires.'"  <br>Kotler, 981 F.2d at 11.  Furthermore, "we do not examine the notice <br>in a vacuum but in the context of the record as a whole."  Kotler, <br>981 F.2d at 11.   <br>          Addison contends that, even taking the record as a whole <br>into consideration, the notice of appeal was insufficient to give <br>notice that John's Insulation sought review of the interlocutory <br>orders.  Since the purpose of Rule 3(c) is "to ensure that the <br>filing provides sufficient notice to other parties and the courts," <br>Smith, 502 U.S. at 248, Addison asserts that John's Insulation's <br>failure to designate the interlocutory orders is more than <br>"noncompliance with [a] mere technicalit[y]," id.  <br>          Addison's argument is ultimately successful, but not for <br>the reason it puts forward.  Contrary to Addison's contention, it <br>has been uniformly held that a notice of appeal that designates the <br>final judgment encompasses not only that judgment, but also all <br>earlier interlocutory orders that merge in the judgment.  See,e.g., <br>Tabron v. Grace, 6 F.3d 147, 153 n.2 (3d Cir. 1993); Williams v. <br>General Motors Corp., 656 F.2d 120, 125-26 (5th Cir. 1981); Cattinv. General Motors Corp., 955 F.2d 416, 428 (6th Cir. 1992); Glassv. Dachel, 2 F.3d 733, 738 (7th Cir. 1993); Employee Staffing <br>Servs. v. Aubry, 20 F.3d 1038, 1042 (9th Cir. 1994); Bowdry v. <br>United Airlines, Inc., 58 F.3d 1483, 1489 (10th Cir. 1995); see <br>generally 9 James W. Moore, et al., Moore's Federal Practice 203.17[3] at 3-92 & n.19 (1996); 9A Charles A. Wright, Arthur R. <br>Miller, and Edward H. Cooper, Federal Practice and Procedure 3949.4, at 67 & n.13 (1996).  Were this the end of our analysis, <br>Addison's argument would have to be rejected because all of the <br>prior orders were non-final unappealable orders which merged in the <br>final judgment. <br>          However, six circuit courts of appeals have recognized an <br>exception to the rule, holding that interlocutory rulings do not <br>merge into a judgment of dismissal for failure to prosecute, and <br>are therefore unappealable.  See, e.g., Marshall v. Sielaff, 492 <br>F.2d 917, 919 (3d Cir. 1974) (interlocutory rulings did not merge <br>with judgment of dismissal with prejudice for failure to <br>prosecute); Hughley v. Eaton Corp., 572 F.2d 556, 557 (6th Cir. <br>1978) (same); DuBose v. Minnesota, 893 F.2d 169, 171 (8th Cir. <br>1990) (same); Huey v. Teledyne, Inc., 608 F.2d 1234, 1239 (9th <br>Cir. 1979) (same); Ash v. Cvetkov, 739 F.2d 493, 497 (9th Cir. <br>1984) (same, but dismissal without prejudice); cf. Sere v. Board of <br>Trustees of the Univ. of Illinois, 852 F.2d 285, 288 (7th Cir. <br>1988) (Rule 37(b) dismissal with prejudice for failure to complete <br>discovery and to attend a deposition); Bowe v. First of Denver <br>Mortgage Investors, 613 F.2d 798, 800-801 (10th Cir. 1980) <br>(commenting favorably on holding in Huey). <br>     One reason given for this exception is that the general <br>rule "that rulings on interlocutory orders are encompassed within <br>a subsequent final judgment and may be reviewed as part of that <br>judgment . . . [should be] inapplicable where adherence would <br>reward a party for dilatory and bad faith tactics."  Sere, 852 F.2d <br>at 288.  Similarly, in a passage often quoted in subsequent <br>decisions, the Third Circuit explained: <br>          If a litigant could refuse to proceed <br>          whenever a trial judge ruled against him, <br>          wait for the court to enter a dismissal <br>          for failure to prosecute, and then obtain <br>          review of the judge's interlocutory <br>          decision, the policy against piecemeal <br>          litigation and review would be severely <br>          weakened.  This procedural technique would <br>          in effect provide a means to avoid the <br>          finality rule embodied in 28 U.S.C.A. <br>           1291.  To review the district court's <br>          [interlocutory ruling] under the facts of <br>          this case is to invite the inundation of <br>          appellate dockets with requests for review <br>          of interlocutory orders and to undermine <br>          the ability of trial judges to achieve the <br>          orderly and expeditious disposition of <br>          cases. <br> <br>Marshall, 492 F.2d at 919 (quoted in Sullivan v. Pacific Indemn. <br>Co., 566 F.2d 444, 445-46 (3d Cir. 1977); Huey, 608 F.2d at 1239; <br>Ash, 739 F.2d at 497; and Sere, 852 F.2d at 288).  The other reason <br>for the exception is that "by the dismissal of the suit [for <br>failure to prosecute or comply with a court order], any rulings <br>which preceded that action by the trial court are . . . rendered <br>moot."  Hughley, 572 F.2d at 557.   <br>     The Second and Fifth Circuits, however, have rejected the <br>Marshall exception.  See Gary Plastic Packaging Corp. v. Merrill <br>Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 178-79 (2d Cir. <br>1990) (order denying motion for class certification held to have <br>merged into final judgment resulting from class representative's <br>failure to prosecute its individual claim); Allied Air Freight, <br>Inc. v. Pan American World Airways, Inc., 393 F.2d 441, 444 (2d <br>Cir. 1968) (interlocutory orders in case dismissed without <br>prejudice for failure to prosecute held appealable); cf. Nichols v. <br>Mobile Bd. of Realtors, 675 F.2d 671, 675 (5th Cir. 1980) (noting <br>that the Marshall rule had apparently been rejected sub silentio in <br>a previous decision by another panel in the same circuit); Drake, <br>553 F.2d at 1187.  The analysis in Allied Air Freight relied on a <br>Supreme Court case in which the intentional use of a dismissal for <br>failure to comply with a court order was condoned as a means of <br>obtaining immediate appellate review of an interlocutory discovery <br>order.  See 393 F.2d at 444 (citing United States v. Procter & <br>Gamble Co., 356 U.S. 677, 680 (1958)). <br>     In Procter & Gamble, the defendants argued before the <br>Supreme Court that the Government's motion -- which requested that <br>if it were to violate the court's order to produce the grand jury <br>transcript, the district court should dismiss the complaint -- was <br>equivalent to a motion for voluntary dismissal, which at the time <br>was unappealable.  See 356 U.S. at 680.  The Supreme Court <br>disagreed, holding that the Government's unwavering opposition to <br>the underlying court order prevented the motion from being <br>characterized as one for voluntary dismissal.  Moreover, the Court <br>noted that although the Government could have tested the validity <br>of the order by other means, such as by subjecting itself to a <br>civil contempt finding, such means could lead to "unseemly conflict <br>with the District Court."  Id.  The Court thus saw nothing wrong <br>with the Government's decision to request that a final judgment be <br>entered as a means of obtaining immediate appellate review.  Id. at <br>681. <br>     In Allied Air Freight, the Second Circuit followed <br>Procter & Gamble in holding that the plaintiff's appeal from the <br>involuntary dismissal of their complaint permitted the court to <br>review prior interlocutory rulings.  See Allied Air Freight, 393 <br>F.2d at 444.  In a later decision, the Second Circuit also <br>suggested that the factual premise behind the Marshall exception <br>may be invalid.  See Gary Plastic Packaging, 903 F.2d at 179.  The <br>court pointed out that even if a plaintiff invites dismissal for <br>failure to prosecute as a way of obtaining immediate review of an <br>otherwise-interlocutory order, there is little danger that the <br>policy against piecemeal appeals will be undermined on a large <br>scale.  Plaintiffs pursuing such an avenue of appeal risk <br>forfeiting their potentially meritorious claims each time, because <br>the appellate court could affirm the dismissal.  See id.  With such <br>a high price to be paid, there is little risk of abuse. <br>     We choose to follow the majority rule of Marshall.  <br>First, the analysis in Procter & Gamble and Allied Air Freightdepended in large part on the fact that voluntary dismissals were <br>not appealable at the time.  See 393 F.2d at 444.  It is no longer <br>the rule that voluntary dismissals are unappealable; to the <br>contrary, most circuits hold that voluntary dismissals, and <br>especially those with prejudice, are appealable final orders.  See <br>generally 15A Federal Practice and Procedure  3914.8, at 614-16 <br>(citing cases); cf. Soto v. Flores, 103 F.3d 1056, 1059 n.1 (1st <br>Cir. 1997) (noting without discussion that plaintiff had <br>voluntarily dismissed her complaint in order to have a final <br>judgment from which she could appeal).  Consequently, a plaintiff <br>that deems an interlocutory ruling to be so prejudicial as to <br>deserve immediate review now has the alternative of dismissing the <br>complaint voluntarily. <br>     Indeed, currently the proper way to appeal an <br>interlocutory order is to move for a voluntary dismissal with <br>prejudice, instead of delaying the case until the district court is <br>forced to dismiss the case for failure to prosecute.  Gary Plastic <br>Packaging is likely correct in stating that there seems to be <br>little danger that the policy against piecemeal appeals will be <br>entirely undermined by a rule that permits plaintiffs to seek <br>review of interlocutory orders.  Our alternative to the Second <br>Circuit's rule, however, is not to entirely bar review of <br>interlocutory rulings, but instead to provide for review by means <br>of voluntary dismissal.  The claim made in Gary Plastic Packagingis as true of our alternative as it is of the Second Circuit's <br>rule. <br>     Furthermore, the validity of a dismissal for failure to <br>prosecute is entirely independent of the merits of prior <br>interlocutory decisions.  As one court stated:  <br>          It . . . follows that by the dismissal of <br>          the suit, any rulings which preceded that <br>          action by the trial court are thus <br>          rendered moot. . . . [O]n the contrary, <br>          [we] hold that the sufferance of a <br>          dismissal of a cause without prejudice is <br>          not to be employed as an avenue for <br>          reaching issues which are not subject to <br>          interlocutory appeal as of right.  <br> <br>Hughley, 572 F.2d at 557 (rejecting both rationale and holding of <br>Allied Air Freight).  The purpose of a Rule 41(b) dismissal for <br>failure to prosecute, for example, is to penalize dilatoriness and <br>harassment of defendants.  See Link v. Wabash R.R. Co., 370 U.S. <br>626, 629 (1962); see generally 9 Federal Practice and Procedure 2370, at 346-47 (2d ed. 1995).  In affirming a judgment <br>dismissing a complaint for failure to prosecute or to comply with <br>the district court's orders, an appellate court is determining that <br>the plaintiff's lack of diligence in litigation deserved to be <br>sanctioned by having its complaint ejected from the courts, <br>regardless of the merits of the case.  Thus, if a complaint was <br>correctly dismissed for failure to prosecute, the fact that earlier <br>interlocutory rulings may have been erroneous is irrelevant.  SeeAl-Torki v. Kaempen, 78 F.3d 1381, 1386 (9th Cir. 1996) ("[t]here <br>is no good reason to allow [a] plaintiff to revive his case in the <br>appellate court after letting it die in the trial court"). <br>     It is understandable that plaintiffs may sometimes find <br>that an interlocutory ruling has so damaged their case that seeing <br>it to trial would be a waste of resources.  However, in such <br>situations, the proper course of action is not to delay the <br>proceedings, but to file a motion for voluntary dismissal with <br>prejudice, stating explicitly that the purpose is to seek immediate <br>review of the interlocutory order in question.  Such a voluntary <br>dismissal has the virtues of giving the defendants and the district <br>court notice of the plaintiff's intentions, and of preventing <br>excessive delay.  The alternative -- to delay and delay until the <br>court loses patience and dismisses the complaint under Rule 41(b) <br>-- needlessly wastes the time and resources of all parties <br>involved. <br>     The dismissal and default judgment were imposed as a <br>sanction for John's Insulation's delay and failure to comply with <br>the court's orders.  Thus, regardless of the possibility that the <br>district court may have abused its discretion in its interlocutory <br>orders, a review of the merits of those orders is beyond the scope <br>of this appeal.

III.  Analysis <br>     As a preliminary matter, we note that the district <br>court's order of September 22, 1997, does not cite any legal <br>authority in support of its decision to enter judgment dismissing <br>the complaint and enter judgment by default on the counterclaim.  <br>The first question we face, therefore, is to determine if there is <br>any source of authority for the district court's action. <br>     "A district court has broad authority to . . . dismiss a <br>case for failure to obey . . . orders," Robson v. Hallenbeck, 81 <br>F.3d 1, 2 (1st Cir. 1996).  One source of such authority is Fed. R. <br>Civ. P. 41(b).  On the other hand, "the rules of civil procedure do <br>not completely describe and limit the power of district courts."  <br>Brockton Sav. Bank v. Peat, Marwick, Mitchell & Co., 771 F.2d 5, 11 <br>(1st Cir. 1985).  Indeed, "[i]t has long been understood that <br>certain implied powers must necessarily result to our Courts of <br>justice from the nature of their institution, powers which cannot <br>be dispensed with in a Court, because they are necessary to the <br>exercise of all others."  Chambers v. NASCO, Inc., 501 U.S. 32, 43 <br>(1990) (citations omitted).  Those inherent powers to sanction <br>parties for litigation abuses include the power to "act sua sponteto dismiss a suit for failure to prosecute," id. at 44 (citing <br>Link, 370 U.S. at 630-31), and to enter default judgment, seeBrockton Sav. Bank, 771 F.2d at 12. <br>     The order's lack of citation to the Rules of Civil <br>Procedure makes it difficult to conclude that the court was acting <br>pursuant to its authority under Fed. R. Civ. P. 41(b) to dismiss <br>the complaint for failure to prosecute.  Not even Addison's motions <br>requesting such sanctions identified the rules pursuant to which <br>the court could impose them.  Because there is no conflict between <br>the authority granted by these rules and the court's inherent <br>powers, however, we may assume that the district court employed its <br>inherent powers in an attempt to vindicate the integrity of the <br>proceedings in this case. <br>     We review a district court's exercise of its inherent <br>powers only for abuse of discretion.  See Chambers, 501 U.S. at 44;  <br>National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. <br>639, 642 (1976).  In doing so, we must remain aware that "the most <br>severe in the spectrum of sanctions provided by statute or rule <br>must be available to the district court in appropriate cases, not <br>merely to penalize those whose conduct may be deemed to warrant <br>such a sanction, but to deter those who might be tempted to such <br>conduct in the absence of such a deterrent."  National Hockey <br>League, 427 U.S. at 643. <br>      Even if the provisions of the Rules of Civil Procedure <br>that permit the imposition of sanctions for litigation abuses are <br>not strictly applicable here, they may nevertheless be used by <br>analogy to guide our review of the district court's actions.  <br>Admittedly, "[i]t is hard to find an area of law in which the <br>governing rules are, and probably have to be, so vague."  Robson, <br>81 F.3d at 2.  Thus, on the one hand "[c]laims of abuse of <br>discretion under Rule 41(b) typically have not received a <br>sympathetic ear from us," Benjamin v. Aroostook Med. Ctr., Inc., 57 <br>F.3d 101, 107 (1st Cir. 1995) (citation omitted), because "case <br>management is a fact-specific matter within the ken of the district <br>court," Robson, 81 F.3d at 2-3.  On the other hand, we do not <br>rubber-stamp the decisions of the district court, see Benjamin, 57 <br>F.3d at 107, because "[d]ismissal with prejudice is a harsh <br>sanction, . . . which should be employed only when a plaintiff's <br>misconduct has been extreme, . . . and only after the district <br>court has determined that none of the lesser sanctions available to <br>it would truly be appropriate."  Estate of Sols-Rivera v. United <br>States, 993 F.2d 1, 2 (1st Cir. 1993) (citations omitted).  In <br>determining whether a plaintiff's misconduct has been extreme, "we <br>engage in an open-ended balancing test,"  Benjamin, 57 F.3d at 108, <br>taking into consideration:  <br>          [whether] there is extremely protracted <br>          inaction, disobedience of court orders, <br>          ignorance of warnings, contumacious <br>          conduct, . . . or some other aggravating <br>          circumstance such as prejudice to the <br>          defendant, glaring weakness in the <br>          plaintiff's case, and the wasteful <br>          expenditure of a significant amount of the <br>          district court's time. <br> <br>Estate of Sols-Rivera, 993 F.2d at 2-3 (citations omitted); see <br>also Robson, 81 F.3d at 2 (providing a non-exhaustive list of <br>pertinent considerations).  The review of orders entering default <br>judgment is guided by similar factors.  See Affanato v. Merrill <br>Bros., 547 F.2d 138, 140 (1st Cir. 1977). <br>     After reviewing the record of the proceedings before the <br>district court, we cannot say that the court abused its discretion <br>in ordering, as a sanction for John's Insulation's protracted delay <br>and repeated violation of court orders, the dismissal of the <br>complaint and the entry of default judgment on the counterclaim.  <br>First, John's Insulation's failure to retain new counsel delayed <br>the proceedings in this case for more than a year.  At the time <br>that the district court dismissed John's Insulation's complaint and <br>entered default judgment on Addison's counterclaims, John's <br>Insulation had been without legal representation for at least 15 <br>months.  During that time, this 1991 case remained at a standstill.  <br>Addison moved twice for an order returning the case to the trial <br>calendar and explicitly requiring John's Insulation to obtain new <br>counsel on pain of dismissal and entry of default judgment.  See In <br>re Victor Publishers, Inc., 545 F.2d 285, 286 (1st Cir. 1976) <br>(corporations cannot be represented by persons not licensed to <br>practice law).  The district court denied both requests for <br>sanctions, but in March 1997, it ordered John's Insulation to <br>obtain new counsel within the following three months. <br>     At the end of the three months, no successor counsel had <br>made an appearance on behalf of John's Insulation.  The district <br>court then scheduled a status conference to be held in chambers on <br>July 7, 1997.  Mr. Fenn responded on behalf of John's Insulation, <br>writing a letter requesting that the conference be postponed <br>because he was scheduled to be in Chicago on that date.  The <br>letter, however, provided no explanation for John's Insulation's <br>inability to retain a new attorney other than to state that it was <br>"due to financial reasons stemming from its bankruptcy.  Attorney's <br>[sic] that I have contacted request a sizeable retainer which <br>John's Insulation, at this time, is not in a position to <br>guarantee."  The district court denied the motion for continuance, <br>but no one appeared on the appointed date on behalf of John's <br>Insulation.  Addison then requested the imposition of sanctions for <br>the third time, and the district court granted the request.  <br>     Under the circumstances of this case, the delay alone <br>suffices to support the district court's choice of sanctions.  But <br>in addition to the delay, John's Insulation failed to comply with <br>several other court orders.  The most significant is John's <br>Insulation's failure to appear at the conference scheduled by the <br>district court even though it was on notice that the district court <br>had specifically rejected its request for a continuance.  It is <br>axiomatic that a party may not ignore a district court order with <br>impunity.  See, e.g., Goldman, Antonetti v. Medfit Int'l, Inc., 982 <br>F.2d 686, 692 (1st Cir. 1993) (dismissal with prejudice for failure <br>to attend pretrial and settlement conference); Barreto v. Citibank, <br>N.A., 907 F.2d 15, 16 (1st Cir. 1990) ("discovery orders, other <br>pre-trial orders, and, indeed, all orders governing the management <br>of a case are enforceable under pain of sanction for unjustifiable <br>violation").  John's Insulation's explanation for its failure to <br>appear at the conference -- that Mr. Fenn had a prior business <br>commitment in Chicago -- is inadequate.  For one thing, Mr. Fenn's <br>unavailability was irrelevant, because the court had made clear <br>that John's Insulation was no longer to be represented by non- <br>lawyers.  For another, John's Insulation could have at least sent <br>a representative to appear at the conference, if only to indicate <br>that notwithstanding its failure to comply with the order to obtain <br>counsel, it was still interested in prosecuting the case. <br>     Although dismissal and default judgment are the two most <br>severe sanctions available, we do not deem the district court's <br>decision to impose them in this case to have been an abuse of <br>discretion.  "[T]he law is well established in this circuit that <br>where a noncompliant litigant has manifested a disregard for orders <br>of the court and been suitably forewarned of the consequences of <br>continued intransigence, a trial judge need not first exhaust <br>milder sanctions before resorting to dismissal."  Figueroa-Ruiz v. <br>Alegra, 896 F.2d 645, 649 (1st Cir. 1990).  The purpose of <br>sanctions, moreover, is not merely to penalize violations of court <br>procedures, but also to deter future violations by other parties, <br>and thus sanctions do not have to be strictly proportional to the <br>severity of a given party's violations.  See National Hockey <br>League, 427 U.S. at 643. <br>     Finally, we reject John's Insulation's argument that, the <br>complaint having been dismissed, the district court lost <br>jurisdiction to hear the counterclaim asserted by Addison because <br>the automatic stay renders void all unauthorized post-petition <br>proceedings.  See 11 U.S.C.  362(a)(1).  The bankruptcy court <br>lifted the automatic stay "to permit the action . . . , including, <br>without limitation, the counterclaim[] asserted by Addison . . . to <br>continue to a final judgment," but that "any affirmative recovery <br>by Addison on the Counterclaim, other than by way of setoff, shall <br>remain subject to the automatic stay and the provisions of the <br>Bankruptcy Code."  We read the bankruptcy court order to have <br>lifted the stay for the purpose of obtaining a final judgment on <br>both the complaint and the counterclaim.  Of course, because the <br>complaint was dismissed, the amount of the setoff is exactly zero.  <br>Consequently, the district court was permitted to determine the <br>amount that Addison was entitled to recover on its counterclaim, <br>but the bankruptcy stay will prevent Addison from collecting on <br>that judgment except as the bankruptcy court may permit. <br>IV.  Conclusion <br>     For the reasons explained above, we affirm the judgment <br>below dismissing John's Insulation's complaint, as well as the <br>order for the entry of default judgment on Addison's counterclaim. </pre>

</body>

</html>

