Federal Trade Commission v. Assail, Inc;

* Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
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United States Court of Appeals
Fifth Circuit
F I L E D
May 10, 2004
Charles R. Fulbruge III
Clerk
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 03-50795
FEDERAL TRADE COMMISSION
Plaintiff - Appellee
v.
ASSAIL, INC; ET AL
Defendants
PAR 3 INC
Appellant
Appeal from the United States District Court
for the Western District of Texas
No. W-03-CV-7
Before KING, Chief Judge, and REAVLEY and EMILIO M. GARZA,
Circuit Judges.
PER CURIAM:*
Par 3, Inc., a nonparty to the underlying suit, appeals the
district court’s denial of its motion to dissolve a preliminary
injunction as to it. We dismiss the appeal as moot.
While Par 3’s appeal was pending, the district court

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converted the preliminary injunction into a permanent injunction
and entered a final judgment. The district court’s grant of a
permanent injunction rendered this particular appeal moot. See
Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc.,
527 U.S. 308, 314 (1999) (“Generally, an appeal from the grant of
a preliminary injunction becomes moot when the trial court enters
a permanent injunction, because the former merges into the
latter.”); La. World Exposition, Inc. v. Logue, 746 F.2d 1033,
1038 (5th Cir. 1984).
As Par 3 admits (repeatedly) in its brief to this court, the
objections it has to the preliminary injunction are the same
objections it would have to the permanent injunction. According
to Par 3, the district court lacked jurisdiction to enjoin it
(either by preliminary injunction or by permanent injunction)
because Par 3 is not a party to the suit, did not submit to the
jurisdiction of the court, and disputes that it is the alter ego
of the defendant in the underlying suit. Because all the issues
raised by Par 3 are common to the preliminary injunction and the
permanent injunction, Par 3’s appeal cannot be saved from
mootness on the ground that it involves issues particular to the
preliminary injunction. See La. World Exposition, 746 F.2d at
1038; cf. Grupo Mexicano, 527 U.S. at 317-18 (holding that an
appeal from a preliminary injunction was not rendered moot by an
order granting a permanent injunction, where the issue appealed
“[was] independent of [the plaintiffs’] claim on the merits” and

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“ha[d] nothing to do with the validity of the permanent
injunction”). We note that, had Par 3 appealed the permanent
injunction, it could have gotten “as broad a review on the merits
of the order granting the permanent injunction as [it] could have
obtained on appeal” from the order denying its motion to dissolve
the preliminary injunction. La. World Exposition, 746 F.2d at
1038.
Par 3’s remaining arguments are, likewise, unmeritorious.
Contrary to Par 3’s assertion, the district court had the power
to convert the preliminary injunction into a permanent
injunction; it is settled that a district court has jurisdiction
to proceed with the merits of the case and to grant a permanent
injunction while an appeal of a preliminary injunction order is
pending. Ry. Labor Executives’ Ass’n v. City of Galveston, 898
F.2d 481, 481 (5th Cir. 1990); see also Webb v. GAF Corp., 78
F.3d 53, 55 (2d Cir. 1996). Furthermore, Par 3 may not convert
this appeal into an appeal of the order granting a permanent
injunction, through Federal Rule of Civil Procedure 4(a)(2) or
otherwise. See Certified Grocers of Ill., Inc. v. Produce Union,
Local 703, 816 F.2d 329, 331 (7th Cir. 1987). Thus, we conclude
that Par 3’s appeal is moot.
At oral argument, the Federal Trade Commission wisely
conceded that Par 3 may challenge the final judgment and the
permanent injunction either through a motion under Rule 60(b) of
the Federal Rules of Civil Procedure or in contempt proceedings.

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If Par 3 chooses to pursue either of these options, the district
court may find guidance in Zenith Radio Corp. v. Hazeltine
Research, Inc., 395 U.S. 100 (1969).
Accordingly, we DISMISS as moot Par 3’s appeal from the
district court’s denial of its motion to dissolve the preliminary
injunction. Each party shall bear its own costs.

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