Subsalve Usa Corp. v. Watson Mfg., Inc.

• Citation: 462 F.3d 41
• Decision Date: 07 September 2006
• Docket Number: No. 05-2645.,05-2645.
• Parties: SUBSALVE USA CORPORATION, Plaintiff, Appellant, v. WATSON MANUFACTURING, INC. and Lynden C. Cox, Defendants, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

462 F.3d 41

SUBSALVE USA CORPORATION, Plaintiff, Appellant, v. WATSON MANUFACTURING, INC. and Lynden C. Cox, Defendants, Appellees.

No. 05-2645.

United States Court of Appeals, First Circuit.

Heard August 1, 2006.

Decided September 7, 2006.

Jeffrey K. Techentin, with whom R. Bart Totten and Adler Pollock & Sheehan P.C. were on brief, for appellant.

John P. Gyorgy, with whom Thomas R. Noel and Noel & Gyorgy LLP were on brief, for appellees.

Before TORRUELLA, SELYA and DYK,^* Circuit Judges.

SELYA, Circuit Judge.

This appeal presents the conundrum of what to do when a district court order purports both to grant a motion to dismiss and to transfer the action to a different district. Based on clear evidence of the district judge's intent, we hold that the order should be construed as a transfer order and that, therefore, immediate appellate review of the underlying findings is unavailable.

I. BACKGROUND

On December 21, 2004, plaintiff-appellant Subsalve USA Corporation (Subsalve), a Rhode Island company, instituted a civil action in the United States District Court for the District of Rhode Island. The complaint named as defendants Watson Manufacturing, Inc., a Florida corporation, and Lynden C. Cox, a Watson functionary residing in Florida. Subsalve's statements of claim sounded in trademark and copyright infringement, unfair competition, and cybersquatting.

The defendants moved to dismiss for want of personal jurisdiction. See Fed. R.Civ.P. 12(b)(2). The district court referred the motion to a magistrate judge. See 28 U.S.C. § 636(b)(1)(B). After conducting an evidentiary hearing, the magistrate judge concluded that the defendants' contacts with the forum state were too attenuated to sustain an assertion of personal jurisdiction. In an apparent effort to ameliorate the terminal effect of this jurisdictional defect, the magistrate judge recommended—inconsistently —granting the motion to dismiss and transferring the action to the Northern District of Florida.¹

In due course, the district judge overrode Subsalve's objections to the magistrate judge's recommendation. See Subsalve USA Corp. v. Watson Mfg., Inc., 392 F.Supp.2d 221 (D.R.I.2005). His rescript stated explicitly that he adopted the magistrate judge's "ultimate conclusions: the Court lacks personal jurisdiction over both Watson and Cox, and this matter should be transferred to the Northern District of Florida." Id. at 222. In the penultimate paragraph, labeled "Transfer," the district judge observed that the arguments opposing transfer were "unpersuasive." Id. at 224. He added: "The decision to transfer rests within the Court's discretion . . . . This Court agrees with the analysis of Magistrate Lovegreen as well as his recommendation to transfer this matter." Id. The district judge made no similar mention of the recommended granting of the motion to dismiss.

Notwithstanding these clear indicia of his intention to transfer the action, the district judge issued the following order: "For the foregoing reasons, Defendants' Motion to Dismiss for Lack of Personal Jurisdiction is GRANTED. This matter shall be transferred to the Northern District of Florida." Id. This order is contradictory on its face: after all, the order purports both to terminate the action (by dismissal) and to continue it (by transfer) in another district. As we explain below, this deviated from the usual procedure under 28 U.S.C. § 1631, quoted supra note 1.

The statute authorizes the transfer of an action whenever the court finds that it lacks jurisdiction and that a transfer is consistent with the interest of justice. 28 U.S.C. § 1631. This language furnishes a court that lacks jurisdiction over an action with a choice between transfer and dismissal. See Britell v. United States, 318 F.3d 70, 72-76 (1st Cir.2003). That choice is subject to a rebuttable presumption in favor of the transfer alternative. See id. at 73. A dismissed action is a nullity, so a court desirous of effectuating a transfer under section 1631 should not dismiss the action but, rather, after making a finding that it lacks jurisdiction, should order transfer based on that finding. See, e.g., id. at 72-76; Capital Bank Int'l Ltd. v. Citigroup, Inc., 276 F.Supp.2d 72, 79 (D.D.C.2003); Enter. Rent-A-Car Co. v. Stowell, 137 F.Supp.2d 1151, 1159 (E.D.Mo.2001).

Here, the district court's failure to follow the usual praxis sparked a firestorm of activity. After receiving notification of the transfer, the clerk in the Northern District of Florida opened a docket on October 6, 2005. Five days later, the clerk in the District of Rhode Island entered a judgment that read in its entirety:

Judgment is hereby entered in favor of defendants, Watson Manufacturing, Inc. and Lynden C. Cox against plaintiff, Subsalve USA Corporation pursuant to this court's decision and order entered on September 29, 2005 granting defendants' motion to dismiss. This matter shall be transferred to the Northern District of Florida. (Emphasis omitted).

On October 19, the clerk physically transferred the case file to the Northern District of Florida.

Seizing upon the district court's awkward locution, Subsalve filed a notice of appeal on October 26. It asserted that the September 29 order effected a final dismissal of the action on the merits and, thus, was immediately appealable. See 28 U.S.C. § 1291. Realizing what had happened, the district judge, acting sua sponte, purposed to issue a corrective order. That order, which invoked Fed. R.Civ.P. 60(a), vacated the October 11 judgment. The next day, Subsalve's appeal was docketed in this court. See Fed. R.App. P. 12(a).

II. ANALYSIS

Although the parties are in agreement as to the historical facts, they vouchsafe markedly different interpretations of where the case now stands. Subsalve argues that the September 29 order was a final order of dismissal, immediately appealable, which should be reversed because the district court did, in fact, have in personam jurisdiction over the parties sued. The defendants counter that the September 29 order was an interlocutory transfer order, not immediately appealable, and that we lack appellate jurisdiction to consider the existence vel non of personal jurisdiction at this juncture.

To wend our way through this labyrinth, we begin with the order itself. We then consider what, at this point in time, lies within the compass of our appellate jurisdiction.

A. The September 29 Order.

The threshold question in this case is whether the September 29 order effectuated a dismissal or a transfer of the action. Because this preliminary inquiry bears on the permissible scope of our review, we have jurisdiction to undertake it. See USM Corp. v. GKN Fasteners, Ltd., 574 F.2d 17, 18 (1st Cir.1978); see also Lane v. United States, 727 F.2d 18, 21 (1st Cir. 1984). Put simply, we have jurisdiction to determine the existence and extent of our own subject-matter jurisdiction.

A trial court's conversation with an appellate court proceeds primarily through its decrees. See Berkovitz v. Home Box Office, Inc., 89 F.3d 24, 29 (1st Cir.1996); Advance Fin. Corp. v. Isla Rica Sales, Inc., 747 F.2d 21, 26 (1st Cir.1984). Consequently, the September 29 order itself is "the most likely source of enlightenment in our quest to understand its nature." Berkovitz, 89 F.3d at 29.

Subsalve emphasizes that the first clause of the September 29 order purports to grant the defendants' motion to dismiss and argues, on this basis, that the order must be read as a final order of dismissal. Under its construction, everything that follows the first clause—including the statement purporting to transfer the action— must be ignored because the dismissal put an end to the case and left nothing upon which the district court could continue to act.

The defendants take a more holistic view. They say that the order should be read in its entirety and in light of the district judge's statements (both contemporaneous and subsequent). So read, they assert, the order must be construed as a transfer order. Under their construction, the "no jurisdiction" finding is important, but the order of dismissal itself must be disregarded as an imprecise locution—a lapsus linguae, as it were. On balance, we find the defendants' position more persuasive.

There are times when courts must be practical. Cf. Gibbs v. Buck, 307 U.S. 66, 78, 59 S.Ct. 725, 83 L.Ed. 1111 (1939) (declining to order "useless" remand when the district court had attempted, albeit belatedly, to correct its own error and had thereby made clear what a remand would yield); Jusino v. Zayas, 875 F.2d 986, 990 (1st Cir.1989) (refusing to force the parties "round and round the mulberry bush" for no better reason than "ceremonial punctiliousness"). Subsalve invites us, in effect, to ignore the reality of events and to accord decretory significance to the sequencing of the September 29 order. We decline the invitation to put on blinders and take so struthious a view. The reality is that the two contradictory clauses were written as part of a single order; that order, on its face, was internally inconsistent; and the judge could not have intended that both commands be obeyed. Given the facts, we fail to see how grammatical happenstance (which, in this instance, gives full meaning to one clause while emasculating the other) provides a principled basis for resolving the inconsistency. We think, rather, that court orders, like statutes, should be read as a whole. See United States v. Ven-Fuel, Inc., 758 F.2d 741, 751-52 (1st Cir.1985) (explaining that, in general, "[a]ll words and provisions of statutes" should "be given effect" and constructions that "would render . . . words or phrases meaningless, redundant, or superfluous" should be avoided).

This leaves us with an order which, fairly read, directs two incompatible results. Ordinarily, an appellate court confronted with an internally inconsistent order would vacate the offending order and return the...