Jose Demelo and Marie Demelo, Petitioners, v. Woolsey Marine Industries, Inc., Respondent, 677 F.2d 1030 (5th Cir. 1982)

Robert C. Galloway, Gulfport, Miss., for George Eng.

George F. Bloss, III, Gulfport, Miss., for Woolsey Marine.

W. F. Holder, II, Gulfport, Miss., for U. S. F. & G.

Richard P. Salloum, Gulfport, Miss., Walter E. Ross, Floyd G. Hewitt, Jr., Biloxi, Miss., for Toche Marine.

Before RUBIN, SAM D. JOHNSON and GARWOOD, Circuit Judges.

GARWOOD, Circuit Judge:

This case is before us on the application of petitioners Jose, and wife Marie, DeMelo for leave to appeal under 28 U.S.C. § 1292(b) from the district court's order entered March 9, 1982, confirming, and overruling the DeMelos' motion to reconsider, its previous order sustaining the plea to the jurisdiction of defendant Woolsey Marine Industries, Inc. ("Woolsey").

The DeMelos, Portuguese nationals legally resident in Mississippi, sued Woolsey, Toche Marine, Inc. ("Toche") and George Engine Company, Inc. ("George Engine") for personal injuries in the United States District Court for the Southern District of Mississippi asserting diversity and maritime jurisdiction. The DeMelos' suit alleged, in substance, that Jose was injured at the Biloxi, Mississippi plant of his employer, Toche, when paint manufactured by Woolsey ignited while he was spray painting a boat which Toche was building for George Engine. Recovery was sought against Woolsey on the assertion that the paint was defective and that there were inadequate warnings concerning its dangerous characteristics. Woolsey, a New York corporation, was served under the Mississippi "long arm" statute. Finding that Woolsey had never done business in Mississippi and that the paint, though manufactured by Woolsey, was purchased by Toche in Louisiana from a Woolsey distributor, the district court granted Woolsey's motion to dismiss on the ground that "Woolsey has never had that minimal contact with the State of Mississippi to accord this suit the benefit of due process." It certified to this Court "pursuant to 28 U.S.C. Section 1292(b)" the question of its "personal jurisdiction ... over Woolsey," reciting in its order the appropriate findings called for by section 1292(b). The district court made no explicit reference to Fed. R. Civ. P. 54(b). The DeMelos' claims against Toche and George Engine remain pending in the district court.

As the order in question disposed of all claims against Woolsey, it clearly had the requisite finality to be appealable under 28 U.S.C. § 1291, had the district court made a proper certification under Rule 54(b). Farrell v. Piedmont Aviation, Inc., 411 F.2d 812 (2d Cir.), cert. denied, 396 U.S. 840, 90 S. Ct. 103, 24 L. Ed. 2d 91 (1969); 10 Wright & Miller, Federal Practice and Procedure: Civil § 2656, at 43 (1973).

Here, however, the certificate and purported appeal are pursuant to section 1292(b), rather than Rule 54(b), and, as it relates to our jurisdiction, we raise the question of whether we may hear the appeal under these circumstances. Our holding is that we may.

It is settled that Rule 54(b) is limited to orders that would be "final" if entered in a simple single-claim, two-party case. Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 76 S. Ct. 895, 100 L. Ed. 1297 (1956); Liberty Mutual Ins. Co. v. Wetzel, 424 U.S. 737, 96 S. Ct. 1202, 47 L. Ed. 2d 435 (1976). By contrast, section 1292 (entitled "Interlocutory decisions") is clearly directed at orders which are interlocutory in nature. See Johnston v. Cartwright, 355 F.2d 32, 38 (8th Cir. 1966). Does the fact that the order could properly be certified under Rule 54(b) render it sufficiently "final" to preclude resort to section 1292(b), even though no Rule 54(b) certificate is made? Or, is the order interlocutory and subject to section 1292(b) by reason of the fact that in the absence of a Rule 54(b) certificate it cannot be appealed under 28 U.S.C. § 1291 and remains subject to revision by the trial court? As Judge Wisdom has observed, "(e)ven learned commentators are of two minds on this point." Local P-171, etc. v. Thompson Farms Co., 642 F.2d 1065, 1069 n. 4 (7th Cir. 1981).

The view that a potential Rule 54(b) order may not be made the subject of a section 1292(b) appeal is articulated in 10 Wright & Miller, supra, § 2658 at 62, as follows:

"Nonetheless, Section 1292(b) and Rule 54(b) are mutually exclusive. The former applies only to orders that would be considered interlocutory even if presented in a simple single-claim, two-party case. Rule 54(b), as stated above, applies only to adjudications that would be final under Section 1291 if they occurred in an action having the same limited dimensions. Therefore, if an order is final under Section 1291, Section 1292(b) cannot apply and resort must be had to Rule 54(b) in the multiple-party or multiple-claim situation." (Footnote omitted.)

This rationale is supported by the decision in Luckenbach Steamship Co. v. H. Muehlstein & Co., 280 F.2d 755 (2d Cir. 1960), in which dismissal of a defendant's indemnity action against a third party was held not subject to appeal under section 1292(b), the court noting that "(t)he situation comes within the express terms of F.R. 54(b)," and that the requisite Rule 54(b) certification had not been made.¹ 

A somewhat similar approach is espoused in the Advisory Committee's Note accompanying the proposed 1961 amendments to Rule 54(b), viz.:

"There has been some recent indication that interlocutory appeal under the provisions of 28 U.S.C. § 1292(b), added in 1958, may now be available for the multiple-parties cases here considered. See Jaftex Corp. v. Randolph Mills, Inc., 282 F.2d 508 (2d Cir. 1960). The Rule 54(b) procedure seems preferable for those cases, and § 1292(b) should be held inapplicable to them when the rule is enlarged as here proposed. See Luckenbach Steamship Co., Inc. v. H. Muehlstein & Co., Inc., 280 F.2d 755, 757 (2d Cir. 1960); 1 Barron & Holtzoff, supra, § 58.1, p. 321 (Wright ed. 1960)."² 

The contrary analysis is well expressed as follows in 16 Wright, Miller, Cooper & Gressman, Federal Practice and Procedure: Jurisdiction § 3929, at 147 (1977):

"Civil Rule 54(b) provides that no judgment disposing of less than all the claims as to all of the parties is final, unless the district court explicitly determines there is no just reason for delay and expressly orders entry of judgment. Since the Rule itself provides that absent such entry of judgment, any order disposing of less than all the claims or parties is not final, § 1292(b) should be available to permit certification and appeal." (Footnote omitted.)

To the same effect is 6 Moore's Federal Practice P 54.30(2.-2), at 455.³  The opinion in Thompson Farms, 642 F.2d at 1069 n. 4, states that this analysis "seems preferable." Our per curiam opinion in Benada Aluminum Products Co. v. Home Insurance Co., 368 F.2d 1001 (5th Cir. 1966), appears to assume that availability of certification under Rule 54(b) does not preclude resort to section 1292(b). Other decisions at least inferentially support this view. See Jaftex Corp. v. Randolph Mills, Inc., 282 F.2d 508 (2d Cir. 1960);⁴  Willmar Poultry Co. v. Morton-Norwich Products, Inc., 520 F.2d 289 (8th Cir. 1975), cert. denied, 424 U.S. 915, 96 S. Ct. 1116, 47 L. Ed. 2d 320 (1976); Williams v. Pacific Maritime Association, 421 F.2d 1287 (9th Cir. 1970).⁵ 

The issue was squarely faced in Sass v. District of Columbia, 316 F.2d 366 (D.C. Cir. 1963), where the district court certified under section 1292(b) its order dismissing the defendant's complaint against a third party. The Court of Appeals recognized that the district court could have allowed the appeal under Rule 54(b), stated that "the better practice" was to follow Rule 54(b) and expressed its agreement with the above-quoted portion of the Advisory Committee's Note accompanying the 1961 amendments to the rule. Nevertheless, the Court had "no doubt" of its power to accept the appeal under section 1292(b), and did so.⁶  The authorities were reviewed at length in Gunter v. Hutcheson, 497 F. Supp. 362 (N.D. Ga. 1980), and the district court concluded that it had authority to certify under section 1292(b), despite the fact that the order in question could also have been made immediately appealable under Rule 54(b). The Eleventh Circuit accepted the section 1292(b) appeal without discussion of the jurisdictional issue. Gunter v. Hutcheson, 674 F.2d 862 (11th Cir. 1982).

In our view the Sass approach is correct. Nothing in the language of section 1292(b) precludes its application to this class of case. Any requirement that the order be interlocutory is met by reason of the absence of a Rule 54(b) certificate. While we fully agree with the Advisory Committee that use of Rule 54(b) is clearly preferable, we also agree with Sass and Gunter that such preference does not render section 1292(b) inapplicable.⁷  We are also mindful that "practical, not technical, considerations are to govern the application of principles of finality" and that we should not "exalt form over substance" to dismiss appeals. Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d 1228, 1231 (5th Cir. 1973).⁸  Except in an unusual case (such as Gunter), it may safely be assumed that if we refuse the section 1292(b) appeal because no Rule 54(b) certificate was given, the trial court will thereupon give the required certificate, and we will once more have the appeal. No good purpose is served by such an exercise in formalism. The matters to be found by the district court in a certification under section 1292(b) embrace the substance of all considerations favoring present appealability which are to be found in a Rule 54(b) certificate. Thompson Farms.⁹  We agree with the statement in Wright, Miller, Cooper & Gressman, supra, § 3929, at 149:

"Surely if the court would have been prepared to review a judgment under Rule 54(b), it achieves little to deny § 1292(b) review and compel entry of judgment. Compliance with the more demanding standards of § 1292(b) should be sufficient." (Footnote omitted.)

For the same reasons, we hold that in exercising our discretion as to whether to permit a section 1292(b) appeal in a case such as this which more appropriately would have come to us under Rule 54(b), we should generally allow the appeal unless we would have found a Rule 54(b) certification by the trial judge an abuse of discretion.¹⁰  See Curtiss-Wright Corporation v. General Electric Company, 446 U.S. 1, 100 S. Ct. 1460, 64 L. Ed. 2d 1 (1980). Again, generally there is simply no good purpose to be served by sending the case back to the trial judge to make a Rule 54(b) certificate, when he has already certified that prompt appellate resolution of the matter will materially advance the ultimate termination of the entire litigation.

There is nothing special about this particular case to indicate that our determination of whether to accept the appeal should be on a more restrictive basis than if the district judge's certificate had explicitly been under Rule 54(b). Had it been so, it would not have been an abuse of discretion.¹¹ 

Accordingly, the application to appeal the district court's dismissal of the DeMelos' suit against Woolsey for want of personal jurisdiction over Woolsey is GRANTED.¹²