                                                                                                                           Opinions of the United
1996 Decisions                                                                                                             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Precedential or Non-Precedential: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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                  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




                                1
*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


                                  2
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


                                3
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

0
In 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


                                  4
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.
0
 McAllister 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.

                                  5
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

0
The 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.


                                  6
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


0
The 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


                                 7
                   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.
0
 Huesser makes the same contentions.

                                 8
            We explored this ambiguity at oral argument and

inquired whether appellant was seeking a new trial.    The answer

was absolutely clear:    his attorney stated that this was an all-

or-nothing appeal in which appellant was seeking only the

reinstatement of the judgment predicated on the verdict.      Thus,

regardless of how we decided the appeal our decision would end

the case, either because the judgment entered on the verdict

would be reinstated or because appellant would not proceed with a

new trial as permitted by the district court in its orders of

July 11, 1994, and December 13, 1994.    Consequently, we need not

decide whether we should uphold the order of dismissal, as

appellant does not challenge that order.

            McAllister predicates its contention that appellant

waived his right to appeal from the July 11, 1994 and December

13, 1994 orders principally on three cases, Spain v. Gallegos, 26

F.3d 439 (3d Cir. 1994); Sullivan v. Pacific Indemn. Co., 566

F.2d 444 (3d Cir. 1977); and Marshall v. Sielaff, 492 F.2d 917

(3d Cir. 1974).    In Spain, a female employee of the Equal

Employment Opportunity Commission brought a district court action

against the EEOC, charging sexual and racial discrimination,

sexual harassment and unlawful retaliation.    Immediately prior to

the trial, the district court excluded certain evidence which the

employee intended to offer in support of her sexual

discrimination and harassment claims and barred her from

proceeding on those claims on the basis of her remaining

evidence.    Nevertheless, the employee was free to proceed with

her claims for racial discrimination and retaliation.    But she


                                 9
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


                                10
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




                                11
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


                                  12
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




                                  13
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

0
We 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.


                                14
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

0
Al-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

                                15
          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 non-

appealable.   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.

                                 16
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.




                                  17
                           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 full-

time 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)


                                    18
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


                                  19
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


                                 20
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


                                21
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


0
In 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.

                                 22
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

0
This concession is understandable since Bethel's arbitration
proceeding against Riverbus resulted in a decision after the


                                  23
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.
0
 In 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.


                                24
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


                                25
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:




                                  26
           [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.


                                27
          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


                                 28
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).



                                 29
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

0
Analytically, 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.

                                  30
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.


                                  31
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.


                                32
          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




                                33
the district court, and never reach the issue of whether the

district court erred by ordering a new trial.




                               34
