In Re Urohealth Systems, Inc.

United States Court of Appeals
For the First Circuit

No. 00-2458

IN RE: UROHEALTH SYSTEMS, INC.,

Petitioner.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Ronald R. Lagueux, U.S. District Judge]

Before

Boudin, Circuit Judge,
Bownes, Senior Circuit Judge,
and Schwarzer*, District Judge.

Brooks R. Magratten, with whom Vetter & White were on brief,
for Urohealth Systems, Inc.

Albert R. Romano, with whom Romano & Spinella were on brief,
for John Doe.

June 12, 2001
______________________

*Of the Northern District of California, sitting by
designation.
 BOWNES, Senior Circuit Judge. Defendant-petitioner

Urohealth Systems, Inc. petitioned for an extraordinary writ to

review the district court’s stay order in this product liability

action. Urohealth contends that the district court flouted the

instructions in our earlier order in this case, Doe v. Urohealth

Systems, Inc., 216 F.3d 157 (1st Cir. 2000), and abused its

discretion in ordering the stay. We construe the extraordinary

writ as an appeal, vacate the stay order, and remand for further

proceedings.

I. BACKGROUND

On August 6, 1997, plaintiff John Doe sued Urohealth

in the United States District Court for the District of Rhode

Island. He asserted claims of strict liability, negligence, and

breach of warranty based on the alleged malfunction of a penile

prosthesis implanted on February 23, 1996.1

Discovery proceeded for sixteen months. During that

time, the district court chastised Doe for various abuses,

including designating in interrogatory answers multiple experts

that he had never in fact retained; not prosecuting his case

diligently; and propounding voluminous and inappropriate

discovery requests at the end of the discovery period. At the

1A fuller discussion of the claims and the procedural
history of this case can be found at Urohealth, 216 F.3d 157.

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initial close of discovery, Doe had not yet retained an expert.

Urohealth first moved for summary judgment on June 23,

1998. The district court extended the pretrial deadlines, and

Doe retained Edward Reese, Ph.D., as an expert. In response,

Urohealth supplemented its motion for summary judgment,

contending that Dr. Reese was unqualified and that his opinions

lacked foundation. The district court assigned that motion to

a magistrate judge, who ordered Urohealth to file a separate

Daubert motion to strike Dr. Reese. Urohealth did so on January

11, 1999.

On January 26, 1999, Doe sued Urohealth and Urohealth’s

wholly-owned subsidiary, Dacomed Corporation, in the Rhode

Island Superior Court, asserting the same product liability

claims as in the instant case. In the state court action, Doe

also sued the physician who implanted the prosthesis, Dr. Alan

Podis, and the treating hospital, Miriam Hospital.

On February 15, 1999, Doe moved to dismiss the federal

court action without prejudice under Fed. R. Civ. P. 41(a)(2).

Urohealth opposed the motion. In deciding the motion, the

district court correctly considered “the defendant’s effort and

expense of preparation for trial, excessive delay and lack of

diligence on the part of the plaintiff in prosecuting the

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action, insufficient explanation for the need to take a

dismissal, and the fact that a motion for summary judgment has

been filed by the defendant.” Urohealth, 216 F.3d at 160

(quoting Pace v. S. Express Co., 409 F.2d 331, 334 (7th Cir.

1969)). As we summarized in our earlier opinion:

The district court then indicated that, even
though the Pace factors favored Urohealth,
it did not believe that Urohealth would
“truly suffer legal prejudice” if it
dismissed the federal lawsuit without
prejudice because Urohealth still would have
to litigate these claims on behalf of
Dacomed in the state suit. Urohealth argued
that if the district court denied Doe’s Rule
41(a)(2) motion and granted Urohealth
summary judgment, the judgment would have
preclusive effect for both Urohealth and
Dacomed; thus, Urohealth could avoid
relitigating the case in state court. The
district court disagreed, reasoning that
even if summary judgment would preclude
relitigation for Urohealth in the state
case, Dacomed, which “is a separate entity,
albeit wholly owned by Urohealth,” would not
be protected by res judicata because it was
not a defendant in the federal case.

Id. at 161.

Urohealth appealed the district court’s order of

dismissal without prejudice. This court reversed the order on

the ground that “the district court’s main stated reason for

dismissing without prejudice was based on a legal error.” Id.

at 162-63. Specifically, we held that the district court erred

in assuming that Dacomed would not be entitled to assert a res

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judicata defense in state court if Urohealth had won summary

judgment in the federal action. We stated:

An evaluation of the res judicata effects
normally would not be part of the Rule
41(a)(2) analysis, but this case is unusual
because of the relationship of the two
entities. To the extent the district court
permissibly considered the potential
prejudice stemming from Urohealth’s having
to litigate on behalf of Dacomed in the
state case, we find an abuse of discretion
because the court erred in finding no
privity between the companies.

Id. at 161. We remanded the case to the district court, leaving

open the narrow possibility that the district court could, for

other reasons, dismiss the case without ruling on Urohealth’s

motion for summary judgment. Id. at 163.

On remand, the case was assigned to a different

district court judge, who ordered the parties to file new

memoranda supporting and opposing the motion to dismiss. On

November 8, 2000, the district court issued an order to stay the

federal matter until the resolution of parallel state court

proceedings. It stated:

I have at times stayed the federal action to
await the outcome of the state case because
the state outcome could make this litigation
moot, and since the state case is the more
comprehensive case, I think that’s the most
judicially economic result in this case. So
I’m not going to rule on the motion to
dismiss without prejudice or with prejudice.
I’m going to stay this case until the state
court litigation is completed, and then I

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 will determine whether there’s anything left
to do, or decide, in this matter.

On November 24, 2000, Urohealth petitioned this court

for an extraordinary writ under Fed. R. App. P. 21(c). On

December 28, 2000, we issued an order conditionally treating the

extraordinary writ as a notice of appeal. We stated:

it appears that an extraordinary writ does
not lie because the challenged order is
appealable . . . . Nonetheless, there is
precedent for treating a petition for an
extraordinary writ as a notice of appeal . .
. and we exercise our discretion to do so
under the peculiar circumstances of this
case.

(citations omitted). We deferred the final disposition of the

question of our jurisdiction to the merits panel.

II. DISCUSSION

The first question before us is whether we have

jurisdiction over this matter, given that Urohealth petitioned

for an extraordinary writ rather than noticing a direct appeal

of the stay order. Urohealth sought review of the stay order by

means of a common law writ of certiorari, which is one of

several writs historically within the power of a court of

appeals under the All Writs Act, 28 U.S.C. § 1651(a). Under the

Act, Congress authorized federal courts to “issue all writs

necessary or appropriate in aid of their respective

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jurisdictions and agreeable to the usages and principles of

law.” Id.

The Supreme Court has defined the parameters of the use

of writs, holding them to be “extraordinary remedies . . .

reserved for really extraordinary cases.” Will v. United

States, 389 U.S. 90, 107 (1967); see also Boreri v. Fiat S.P.A.,

763 F.2d 17, 26 (1st Cir. 1985). Furthermore, it is well-

established that an extraordinary writ, such as a writ of

certiorari or a writ of mandamus, may not be used as a

substitute for an appeal and will not lie if an appeal is an

available remedy. See, e.g., Stauble v. Warrob, Inc., 977 F.2d

690, 693 (1st Cir. 1992) (mandamus is not a substitute for

appeal and will not lie if the petitioner has a remedy through

a direct appeal); In re Bushkin Assocs., Inc., 864 F.2d 241, 243

(1st Cir. 1989) (mandamus will not lie if there exist other

adequate means to attain relief).

Here, Urohealth apparently assumed that a direct appeal

was not an available remedy. This assumption is not supported

by applicable case law, however. The Supreme Court has held

that a district court’s stay order is appealable as a “final

decision” under 28 U.S.C. § 1291 if the purpose of the stay is

to effectively surrender jurisdiction of the federal suit to the

state court. Moses H. Cone Mem’l Hosp. v. Mercury Constr.

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Corp., 460 U.S. 1, 10 & n.11 (1983). There, the district court

stayed the federal proceedings because the state and federal

actions involved an identical issue. Id. at 10. The Court held

that the district court’s stay order was appealable, stating:

“a stay of a federal suit pending resolution of the state suit

meant that there would be no further litigation in the federal

forum; the state court’s judgment on the issue would be res

judicata.” Id.

Similarly, the stay order in the present case

effectively amounted to a dismissal of the federal suit. The

state and federal litigation were substantially alike and

Urohealth and Dacomed were likely in privity. Urohealth, 216

F.3d at 162. It is therefore probable that any decision in

state court would have had a preclusive effect on the federal

litigation. Id. Furthermore, the district judge indicated that

the reason for issuing a stay was to “await the outcome of the

state case because the state outcome could make this [federal]

litigation moot . . . .” Accordingly, an appeal would have been

an available remedy to Urohealth, precluding an extraordinary

writ. See Moses H. Cone, 460 U.S. at 10 & n.11.

It is thus clear that Urohealth should have appealed

the district court’s order rather than seeking an extraordinary

writ. We now must consider whether we should nonetheless treat

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Urohealth’s petition for an extraordinary writ as a notice of

appeal. There is precedent for this course of action. See,

e.g., In re Bethesda Mem’l Hosp., 123 F.3d 1407, 1408 (11th Cir.

1997) (“precedent permits us to treat the petition for the writ

of mandamus as a direct appeal, and we do so here”); Clorox Co.

v. United States Dist. Ct., 779 F.2d 517, 520 (9th Cir. 1985)

(treating a writ of mandamus as a notice of appeal); In re

Roberts Farms, Inc., 652 F.2d 793, 795 (9th Cir. 1981) (unaware

that an appeal had also been filed, the court construed the writ

of mandamus as a notice of appeal); see generally Smith v.

Barry, 502 U.S. 244, 247-49 (1992) (courts should liberally

construe the requirements for a notice of appeal under Fed. R.

App. P. 3).2 We conclude that it is appropriate to treat

Urohealth’s petition as an appeal under these particular factual

circumstances.

In submitting its petition for an extraordinary writ,

Urohealth followed the normal procedures required for a notice

of appeal. Urohealth provided a copy of its petition for a writ

of certiorari to the opposing party and to the district court

within the time period allotted for a notice of appeal. See

2Although this court has not spoken on this particular
issue, we have recognized our power to treat a notice of appeal
as a petition for a writ of mandamus. Phinney v. Wentworth
Douglas Hosp., 199 F.3d 1, 3 (1st Cir. 1999).

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Smith, 502 U.S. at 248 (stating that the purpose of a notice of

appeal is to “ensure that the filing provides sufficient notice

to other parties and the courts.”) Furthermore, if this court

had acted on Urohealth’s petition immediately upon its receipt,

Urohealth still would have had time to correctly file a notice

of appeal.3 For these reasons, we will treat the petition for

a writ of certiorari as a notice of appeal.4

Having determined that we have jurisdiction over this

matter, we now proceed to the merits of Urohealth’s appeal.

Urohealth contends that the district court erred in refusing to

rule on Doe’s motion to dismiss and in staying the case pending

resolution in the state court. We review the district court's

issuance of a stay order for abuse of discretion. Walsh v.

Walsh, 221 F.3d 204, 213 (1st Cir. 2000).

When remanding this matter for further proceedings

consistent with our opinion, we provided detailed guidance to

the district court. We explained that Urohealth would be

3
At the time this court issued a preliminary order on this
matter, the thirty-day time period for filing an appeal had
already expired.
4
This conclusion should not be construed as holding that
extraordinary writs should always be treated as notices of
appeal. See Clorox Co., 779 F.2d at 520 (treating a writ of
mandamus as a notice of appeal on the limited facts of the case,
but concluding that generally it is “unwise to blur the
distinction between mandamus and appeal procedures by allowing
one to substitute for the other . . . .”)

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prejudiced if the state court action was allowed to proceed and

Urohealth was forced to litigate on behalf of Dacomed.

Urohealth, 216 F.3d at 161-63. We stated that, absent new

reasons to support a voluntary dismissal, Doe’s motion to

dismiss should be denied and Urohealth’s motions should be

heard. Id. at 163. We left only narrow room for the district

court to allow Doe’s motion to dismiss without prejudice:

This [remand] does not necessarily preclude
the possibility that for some other reason
the district court could dismiss the case
without ruling on the summary judgment
motion, but given the record, it is somewhat
difficult to discern what that reason might
be. As matters now stand, the defendant has
made a significant investment of time and
money in the case, a motion for summary
judgment apparently is ripe for decision,
and judgment in favor of Urohealth would
avoid what may be otherwise years of
litigation in state court against its
subsidiary on an identical claim.

Id. We also made clear our disapproval, absent unusual

circumstances, of forcing Urohealth or Dacomed to litigate all

over again in state court a matter that had been brought to the

present stage in a federal court:

We do think that a plaintiff cannot conduct
a serious product liability claim in a
federal court, provoke over a year's worth
of discovery and motion practice, allow the
case to reach the stage at which the
defendant filed a full-scale summary
judgment motion, and then when matters
seemed to be going badly for plaintiff
simply dismiss its case and begin all over

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 again in a state court in what is
essentially an identical proceeding.

Id.

The district court’s order did not comport with our

opinion in Urohealth. Rather, it stayed the case until the

completion of the state court litigation. By allowing that

litigation to proceed, its ruling was tantamount to dismissing

the federal case without prejudice. Cf. Moses H. Cone, 460 U.S.

at 10. Therefore, it effectively reinstated the very ruling

this court reversed. Contrary to our opinion, at no point did

the district court mention any new reasons to support its

decision to not rule on the summary judgment motion. See

Urohealth, 216 F.3d at 163.

The court's failure to follow the law of the case

amounts to an abuse of discretion. See United States v.

Alexander, 106 F.3d 874, 876 (9th Cir. 1997). A review of the

record indicates that Doe submitted no new arguments that would

warrant dismissal without prejudice. Accordingly, we vacate the

stay order and remand this matter. We direct the district court

to deny Doe's motion to dismiss and to hear Urohealth's pending

motions forthwith.

Vacated and remanded for further proceedings consistent

with this opinion.

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