Silivanch v. Celebrity Cruises, Inc.

333 F.3d 355, 2003 A.M.C. 2208, 56 Fed. R. Serv. 3d 599, 2003 U.S. App. LEXIS 12841
CourtCourt of Appeals for the Second Circuit
DecidedJune 25, 2003
DocketDocket Nos. 02-7229, 02-7279, 02-7320, 02-7595, 02-7600, 02-7603, 02-7604, 02-7606, 02-7607
StatusPublished
Cited by226 cases

This text of 333 F.3d 355 (Silivanch v. Celebrity Cruises, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Silivanch v. Celebrity Cruises, Inc., 333 F.3d 355, 2003 A.M.C. 2208, 56 Fed. R. Serv. 3d 599, 2003 U.S. App. LEXIS 12841 (2d Cir. 2003).

Opinion

SACK, Circuit Judge.

Plaintiffs-Appellees-Cross-Appellants (the “plaintiffs”) move to dismiss appeals filed by Defendants-Appellants-Cross-Ap-pellees Essef Corporation, Pac-Fab, Inc., and Structural Europe, N.V. (collectively “Essef’) and cross-appeals filed by Defendants-Cross-Appellants Celebrity Cruises, Inc., and Fantasia Cruising, Inc. (collectively “Celebrity”) from a mass tort action heard in the United States District Court for the Southern District of New York. The plaintiffs contend that we lack jurisdiction to hear the appeals because Essef did not file a notice of appeal within thirty days after judgment was entered as required by Fed. R.App. P. 4(a)(1). Essef relies on an extension of the time to file granted by the district court (James C. Francis IV, Magistrate Judge) under Fed. R.App. P. 4(a)(5) after the court found that the neglect that resulted in Essefs tardiness was excusable. The plaintiffs argue that Essefs neglect was not excusable and that the district court abused its discretion in holding otherwise. For the reasons set forth below, we agree with the plaintiffs.

In addition, Essef contends that the judgments appealed from did not become final and the time to appeal did not begin to run until the district court entered its Fed.R.Civ.P. 54(b) order on the docket in Silivanch, the “bellwether” case, which it did not do until after we held argument with respect to these motions. Essef bases this contention on the fact that although an order under Fed.R.Civ.P. 54(b), which directed that the judgment from which appeal was being sought was final and therefore appealable, was signed by the magistrate judge on January 25, 2002, and mailed to the parties, there was not then an entry in the docket for the “bellwether” action reflecting the issuance of the order. We conclude that the Rule 54(b) order was effective when it was signed and issued, even though it was not then entered in the “bellwether” action docket.

We therefore dismiss the appeals and cross-appeals for want of appellate jurisdiction.

BACKGROUND

The action before us arose from a 1994 outbreak of Legionnaires’ Disease on [359]*359board Celebrity’s cruise ship Horizon. The United States Centers for Disease Control and Prevention traced the outbreak to the presence of legionella' bacteria in filters designed, manufactured, and distributed by Essef that were operated in connection with the ship’s whirlpool spa. Water from the spa passed through silica sand and gravel within the filters, cleansing it of hair, dirt, and oils. Beneath the gravel, each filter contained a hub from which “laterals” radiated like the spokes of a wheel. Filtered water returned to the spa via holes in the laterals.

The filters were designed to be cleaned by running them in reverse. Water was forced through the laterals and up through the gravel and sand, dislodging built-up waste material. Waste water from this “backwashing” process was then thrown overboard.

According to the evidence adduced at trial, the filters did not backwash properly. Instead of lifting the entire sand bed and cleansing each grain, water flowed primarily through the center of each filter and failed to clean the outer edges. As waste material built up in the filters, “biofilms” of organic material formed. These biof-ilms trapped the legionella inside the filters, protecting the bacteria from disinfectants while providing a growth medium. The bacteria proliferated. As water containing the bacteria was released back into the whirlpool, it was aerosolized and inhaled by passengers in and near the spa.

Many victims of the outbreak, their families, and their estates, including these plaintiffs, subsequently brought suit against Celebrity and Essef for their injuries and those of their relatives. Celebrity, in turn, filed cross-claims against Essef for indemnification and other damages.

By the end of 1995, at least twenty-two separate such actions had been filed. All of the related cases were assigned to United States District Judge Lawrence M. McKenna in the United States District Court for the Southern District of New York. Judge McKenna ordered the cases consolidated for discovery before Magistrate Judge Francis who, with the consent of the parties pursuant to 28 U.S.C. § 686(c), was later designated to conduct all proceedings in the matter, including the entry of final judgments. Over the next several years, discovery proceeded. During that period, some of the plaintiffs settled with Celebrity and Essef.

In May 2000, the remaining plaintiffs, Celebrity, and Essef agreed to resolve the entire matter before Magistrate Judge Francis using a “bellwether” procedure. One case — the “bellwether” — brought by John and Joyce Silivanch, would be tried to a jury on all issues. The jury would determine if Celebrity, Essef, or both were liable for the Silivanches’ injuries. If the jury found such liability, it would determine each defendant’s proportional liability and Celebrity’s right of indemnification against Essef, if any, with regard thereto, in addition to the amount of the Silivanch-es’ compensatory damages. It would also determine each defendant’s liability for any punitive damages to all the plaintiffs as a group. The Silivanch jury’s findings on all issues, other than proximate cause with respect to the Silivanches’ injury and compensatory damages to be awarded to them, would be binding in all of the remaining cases, each of which would be tried separately on the reserved two issues. Any punitive damages awarded in the bellwether trial would be allocated by the court among the various plaintiffs.

In June 2000, the jury returned a verdict finding the defendants liable to the Silivanches. It also found that Essef had an' obligation to indemnify Celebrity in full. The jury awarded $4,200,000 in punitive damages ■ to the plaintiffs, and another [360]*360$2,800,000 to Celebrity, all to be paid by Essef.

The remaining plaintiffs then settled or tried their cases on the issues of causation and compensatory damages. Afterward, the district court apportioned the punitive damages award among those plaintiffs who had established the requisite proximate causation at trial, or against whom such causation had not been contested because of definitive medical evidence.

In November 2001, the district court severed Celebrity’s remaining claims against Essef, and, pursuant to Fed. R.Civ.P. 54(b),1 directed the clerk of the court to enter final judgment in, and close, some or all of the plaintiffs’ cases. Supplemental judgments as to punitive damages were signed by the magistrate judge, issued, and docketed for each plaintiff who was awarded punitive damages.

Shortly thereafter, on December 7, 2001, however, the district court ordered the clerk to reopen the cases that had been closed because the supplemental judgments “in many of the related cases ...

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333 F.3d 355, 2003 A.M.C. 2208, 56 Fed. R. Serv. 3d 599, 2003 U.S. App. LEXIS 12841, Counsel Stack Legal Research, https://law.counselstack.com/opinion/silivanch-v-celebrity-cruises-inc-ca2-2003.