Cromaglass Corp. v. Ferm
| Decision Date | 01 August 1974 |
| Docket Number | No. 72-1815,72-1815 |
| Citation | 500 F.2d 601 |
| Parties | CROMAGLASS CORPORATION, Williamsport, Pa. (a Pennsylvania corporation), Appellant, v. Carl FERM et al. |
| Court | U.S. Court of Appeals — Third Circuit |
John C. Youngman, Jr., Candor, Youngman, Gibson & Gault, Williamsport, Pa., William H. Pattison, Jr., Pattison, Wright & Pattison, Bethesda, Md., for appellant.
Nathaniel A. Humphries, Peter N. Lalos, Mason, Fenwick & Lawrence, Washington, D.C., for appellees.
Argued Sept. 13, 1973.
Before BIGGS, ADAMS and ROSENN, Circuit Judges.
Submitted en banc April 11, 1974.
Before SEITZ, Chief Judge, and BIGGS, VAN DUSEN, ALDISERT, ADAMS, GIBBONS, ROSENN, HUNTER, WEIS and GARTH, Circuit Judges.
This case presents the issue of appealability of sanctions imposed by the district judge for failure to comply with discovery orders. The original jurisdiction is stated in the complaint to be as follows: 'This Court has jurisdiction of the claim of plaintiff for relief which involves damages in excess of Ten Thousand Dollars ($10,000.00); and which arises under the laws of the United States, to wit: Title 35, U.S.Code, Sections 281-287, 289 and 292; and Title 28, Sections 1331, 1338 and 1355.'
Plaintiff-appellant Cromaglass Corporation (Cromaglass) sued the defendant-appellees, Ferm, Sechler, and Plast-A-Form Corporation alleging patent infringement, false marking, and unfair competition, in relation to the manufacture and sale of aerobic household sewage treatment units. The district court concluded on defendants' motion that Cromaglass' alleged failure to answer certain interrogatories warranted imposition of sanctions against it and ordered that a number of facts be taken as established, in favor of the defendants, in accordance with Rule 37(b)(2)(A) and that Cromaglass be precluded from supporting its claims or introducing certain designated matters in evidence in accordance with Rule 37(b)(2)(B). The court also made a finding of civil contempt against Cromaglass and its attorney Pattison and assessed against them as reasonable expenses and counsel fee the sum of $4,000.
Judge Muir filed his opinion, 344 F.Supp. 924, on June 27, 1972, and the order referred to is as follows:
'United States District Court For the Middle District of Pennsylvania
In accordance with the Opinion filed this day, It is Ordered and Adjudged that:
1. The Defendants' amended motion for imposition of sanctions on Plaintiff for failure to answer Interrogatories 20, 21, 24 and 25 as directed by the court's order of March 22, 1972, is granted.
2. The following facts shall be taken to be established for the purposes of this action in accordance with the claims of the Defendants.
2.1 Carl Ferm acquired no confidential or specialized knowledge or information respecting the fabrication or sale of aerobic sewage treatment equipment while in the employ of The Cromar Company, Plaintiff's predecessor.
2.2 There is no confidential or specialized knowledge or information of the Plaintiff involved in the fabrication of Defendants' aerobic sewage treatment equipment.
2.3 There is no confidential or specialized knowledge or information involved in the sale of Defendants' aerobic sewage treatment equipment to which Plaintiff has any right.
3. The plaintiff shall not introduce into evidence anything relating to matters contained in Sub-Paragraph (8) of Count IV of the Complaint except that Plast-A-Form Corporation initiated the manufacture and sale of aerobic sewage treatments units subsequent to April 19, 1969.
4. The Plaintiff and its patent attorney, William H. Pattison, Jr., are in civil contempt of the lawful order of this court dated March 22, 1972, by reason of Plaintiff's refusal to answer interrogatories 20, 21, 24, and 25 propounded to Plaintiff on June 4, 1971. This order shall not bar a finding of criminal contempt as to the same persons and Allan N. Young, Jr., President of Plaintiff, with respect to the same interrogatories.
5. The Plaintiff and the patent attorney, William H. Pattison, Jr., who advised it shall jointly and severally pay to the Defendants as reasonable expenses, including counsel fees, the sum of $4,000.00 within thirty days hereof, said expenses having been caused by the unjustified failure of Plaintiff to answer interrogatories 20, 21, 24, and 25 as required by the above order of March 22, 1972. There are no circumstances making the award unjust.
6. The Plaintiff is and has been since March 29, 1972 in default with respect to Paragraph 4 of the order of March 22, 1972, requiring submission of a proposal concerning inspection and photographing of parts of Plaintiffs' premises located in the Williamsport, Pa. area. Unless the default is cured within ten days from the date of this order, Defendants may move for additional sanctions.
An appeal in toto was taken from this order by the plaintiff Cromaglass and this constitutes the subject matter of what is presently before us. No appeal was taken by Cromaglass' counsel, william H. Pattison, Jr., Esquire.
A motion to dismiss the appeal was filed by the appellees, as follows: 'Appellees, by their attorneys, hereby move the Court for an order dismissing the appeal filed herein by Appellant from the order of June 27, 1972 of the U.S. District Court for the Middle District of Pennsylvania in Civil Action No. 71-23, on the ground that such order is a nonappealable interlocutory order.'
On November 16, 1972, another panel of this court had before it this motion to dismiss the appeal on the ground that the order appealed from was a nonappealable interlocutory order. This motion was denied. 1 There was also a motion before that panel for a stay of appellate proceedings pending disposition of appellees' motion to dismiss which also was denied, and the defendant was granted ten days to serve its brief and appendix. On November 24, 1972, an order was entered by that same panel referring the appellees' motion to strike certain portions of appellant's appendix to the panel which would consider the appeal on the merits.
It is apparent that if the appeal is dismissed, it is unnecessary to consider the motion to strike certain portions of appellant's appendix.
Judge Muir denoted his order as one imposing sanctions in civil contempt. The parties apparently agree that the contempt order here appealed from sounds in civil contempt, and with this conclusion we have no dispute. See shillitani v. United States, 384 U.S. 364, 86 S.Ct. 1531, 16 L.Ed.2d 622 (1966).
The appellate courts will look to the substance of the order rather than the form. See, e.g., Southern Railway Co. v. Lanham, 403 F.2d 119 (5 Cir. 1967). The distinction is whether the penalty compensates the injured party (civil) or whether it is solely punitive to vindicate the public justice (criminal). Civil contempt is wholly remedial. See Fireman's Fund Ins. Co. v. Myers, 439 F.2d 834, 837 (3 Cir. 1971). A judgment in civil contempt serves only the purpose of a party litigant, and is intended to coerce compliance with an order of the court or to compensate for damage caused by noncompliance as here.
The previous panel denied the motion to dismiss the appeal in its totality. We had believed it to be well settled both in this circuit and other circuits that, at least with respect to a party to the litigation, and order holding a party in civil contempt was in fact an interlocutory order and was not appealable except on final judgment. This we thought was made clear by such cases as Fireman's Fund Ins. Co. v. Myers, 439 F.2d 834 (3 Cir. 1971); Securities and Exchange Commission v. Naftalin, 460 F.2d 471, 475 (8 Cir. 1972). Appellants' attorney is not a party to the litigation but on the other hand he has not appealed. See Southern Railway Co. v. Lanham, 403 F.2d 119, 124 (5 Cir. 1968); Fenton v. Walling, 139 F.2d 608 (9 Cir.), cert. denied, 321 U.S. 798, 64 S.Ct. 938, 88 L.Ed. 1086 (1943).
It is interesting to note that the appellees in their brief supporting their motion to dismiss have made no specific reference whatsoever to the lack of appealability of a civil contempt order.
Paragraphs 2 and 3 of Judge Muir's order, based upon Rule 37(b)(2)(A) and (B), Fed.R.Civ.P., present an issue as to appealability which is not as easily determinable as that portion of the order which deals with civil contempt. Its disposition requires the discussion set out hereinafter. It is clear that these sanctions do not represent a 'final order,' appealable as of right under 28 U.S.C. 1291. Assuming the order to be 'final' with respect to the claims involved, see Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 76 S.Ct. 895, 100 L.Ed.2d 1297 (1956), it adjudicates fewer than all the claims raised in the complaint. Hence, absent a Rule 54(b) certification by the district court, the general 'finality' prerequisite of this statute has not been met, unless the order is deemed to fall within one of the exceptions to this rule. See Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949); Forgay v. Conrad, 47 U.S. (6 How.) 201, 12 L.Ed. 404 (1848). The sanctions imposed represent neither a collateral matter which could not be reviewed on final judgment nor a judgment which is final except for ministerial acts; therefore, an appeal will not lie under 28 U.S.C. 1291. See Eisen v. Carlisle, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974); United States v. Estate of Pearce, 498 F.2d 847 (3 Cir. 1974); 9 J. Moore, Federal Practice PP110.08-110.11 (2d ed. 1973).
Cromaglass asserts that 28 U.S.C. 1292(a)(1) provides a basis of appeal, urging that the imposed sanctions...
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