Opinion
Case No. 4:03-CV-1521 SNL.
December 28, 2007
ORDER
In accordance with the Memorandum filed herein this date,
IT IS HEREBY ORDERED that Plaintiff's request for leave to amend (Doc. #250, filed Oct. 26, 2007) be, and is, HEREBY GRANTED. So Ordered.
MEMORANDUM
This cause is before the Court on Plaintiffs' motion (Doc. #250, filed Oct. 26, 2007), wherein Plaintiffs seek leave to file a third amended complaint "which is identical to the Second Amended Complaint except for the deletion of all references to [Defendants'] status as an unlicensed provider of DUR services." After reviewing the parties' arguments and the relevant legal standard, the Court HEREBY GRANTS Plaintiffs' motion, subject to the limitations defined herein.
ANALYSIS
In their motion, Plaintiffs seek leave to further amend their complaint to make the following deletions, modifications, and/or additions:
• Delete subpart (l) from paragraph 10;
• Delete subpart (a) from paragraph 67;
• Delete paragraphs 127 through 130;
• Delete "license" from paragraph 133;
• Delete paragraph 134;
• Rearrange, modify, and/or expand upon paragraphs 137 through 138;
• Delete subpart (a) from paragraph 145;
• Delete subpart (c) from paragraph 146;
• Delete subpart (h) from paragraph 179; and
• Delete subpart (i) from paragraph 180. See Docs. ##80 250 app. 1.
In support of their motion, Plaintiffs rely on Rule 15(a), which pertains to amended pleadings. Under the Federal Rules, courts should freely grant leave to amend when justice so requires. FED. R. CIV. P. 15(a)(2). Here, Plaintiffs state that leave should be granted in that Plaintiffs are seeking to "stream line this litigation"; and despite Plaintiffs' repeated efforts, Defendants oppose the amendments, save a "host of conditions." Specifically, Defendants stipulate to Plaintiffs' proposed amendments on condition that (I) Plaintiffs pay its reasonable costs and fees in opposing the claim; and (II) Defendants are permitted to impeach Plaintiff's witnesses at trial regarding the claim. See FED. R. CIV. P. 41(a)(2) (In situations where an amendment purports to dismiss a claim or action, the court may grant leave "on terms that the court considers proper."); accord Hamm v. Rhone-Poulenc Rorer Pharmaceuticals, Inc., 187 F.3d 941, 950 (8th Cir. 1999).
I. Defendants' Request for Reasonable Costs and Fees Incurred
In support of their request for reasonable costs and fees, Defendants urge the Court to "take into account any prejudice that the opposing party will suffer as a result of the amendment, and [sic] subject leave to amend to reasonable conditions." (quoting Hayden v. Feldman, 159 F.R.D. 452, 454 (D.N.Y. 1995)). In that way, Defendants first state that they have "been forced to incur substantial costs and expenses, due to [Plaintiffs'] failure to properly investigate their unlicensed activity claim," in that they expended "substantial efforts . . . to discover information necessary to defeat this claim," and "to file adequate pleading in the first instance." Specifically, Defendants cite specific instances wherein they engaged in discovery and/or filed pleadings in order to address the merits of the claim which Plaintiffs now seek to dismiss.
Despite Defendants' arguments, the Court is not satisfied that conditional leave is appropriate. First, Plaintiffs' claims relating to Defendants' status as an unlicensed provider of DUR services comprise a relatively slight and subordinate element within their eight-count complaint. Compare with Hayden, 159 F.R.D. at 455 (where plaintiffs conceded that seventy-five percent of the work done by defendant's attorneys prior to the amendments was deemed to have been unnecessary, and thus the "award of attorney's fees and costs incurred in preparing that motion to dismiss . . . is reasonable compensation for that prejudice.").
Next, although Plaintiffs' second amended complaint (Doc. #80, filed Aug. 16, 2004) contains the now disputed allegations, which were presumably known to be unfounded as of July of 2003,FN1 Defendants were seemingly in just as good a position to uncover the legal (or unfounded) basis of Plaintiffs' claims. Moreover, Defendants' allegedly repeated representations, that they were in fact licensed to provide such services, imaginably (albeit superficially) put Plaintiffs on notice that such was required by the law. See Doc. #80 at ¶ 67(a).
FN1 . Specifically, Plaintiffs were advised that the activities allegedly engaged in by Defendants were not of the type requiring formal certification and/or licensing. See Woodall Letter, Maryland Insurance Administration, July 2, 2003.
Here, the Court notes that in exercising its discretion, a motion for voluntary dismissal must be considered in light of certain factors, i.e. the movant's explanation for dismissal, potential costs of judicial resources, and possible prejudice to defendants. See Hamm, 187 F.3d at 950. However, generally, prejudice to defendant comes into play in situations where plaintiff seeks to dismiss his claim only to restate his position in a more favorable forum. See id. ("a party is not permitted to dismiss merely to escape an adverse decision nor to seek a more favorable forum."). Absent a sufficient showing of the existence and prejudicial effect of these factors, the Court declines to impose reasonable costs and fees.
C.f. Skinner v. First American Bank of Virginia, No. 93-2493, 1995 WL 507264, at *3 (4th Cir. 1995) (denial of leave to amend was not an abuse of discretion where plaintiffs sought to amend their complaint to dismiss their claims without prejudice, where plaintiffs' motion was made after the completion of discovery, "when the case was ripe for summary judgment"; a large part of defendant's discovery would have been unusable in a subsequent adjudication; and the only "apparent effect" of plaintiffs' proposed amendment would have been to avoid an adverse ruling.). Here, the instant dismissal of the DUR claims will be deemed with prejudice. See Jaramillo v. Burkhart, 59 F.3d 78, 79 (8th Cir. 1995) ("unlike a dismissal without prejudice, a dismissal with prejudice operates as a rejection of the plaintiff's claims on the merits and res judicata precludes further litigation.").
II. Defendants' Request to Admit Evidence for the Purpose of Impeachment
As to Defendants' next proposed condition, the Court defers for trial this, and similar, evidentiary matter(s), to be resolved in accord with the Rules of Evidence.
CONCLUSION
Although Plaintiffs do not have an automatic right to amend, given the instant facts and Rule 15's liberal amendment policy, the Court sees no "good reason" to deny Plaintiffs leave. See Popp Telcom v. American Sharecom, Inc., 210 F.3d 928, 943 (8th Cir. 2000) ("The classic `good reasons' for rejecting an amendment are: `undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the non-moving party, or futility of amendment. . . .'" ) (quoting Thompson-El v. Jones, 876 F.2d 66, 67 (8th Cir. 1989)).
On review of Plaintiffs' proposed amendments, the Court finds leave proper. However, Plaintiffs are limited only to those amendments which purport to delete references to ESI's status as an unlicenced provider of DUR services.FN2
FN2 . Specifically, Plaintiffs' proposed third amended complaint seeks to rearrange, modify, and/or expand upon paragraphs 137 through 138. These amendments are improper and impermissible in that they will cause Defendants' unnecessary burden in re-reading and re-addressing similarly-stated allegations.
In accordance with the limitations detailed and imposed herein ( supra note 2), Plaintiffs' motion (Doc. #250) is HEREBY GRANTED. Plaintiffs may file a third amended complaint which deletes references to its former claim regarding ESI's status as an unlicensed provider of DUR services.FN3
FN3 . In their reply to Defendants' opposition, Plaintiffs provide the Court with a proposed text order relating to the "stipulation of dismissal with prejudice" of certain counts contained in Plaintiffs' complaint, and cite a similar order filed by this Court in In re Express Scripts, Inc., PBM Litigation, No. 4:05-MD-1672, Doc. #83, filed Sep. 2, 2005. This Court cannot similarly rule in the instant action, in that (I) the case cited by Plaintiffs involved a situation wherein both parties unconditionally stipulated to the dismissal; and (II) Rule 41(a)(1)(A) only applies in cases in which the movant seeks to dismiss an action without order of the Court (i) before the adverse party serves an answer or a motion for summary judgment, or (ii) upon joint stipulation of all parties. FED. R. CIV. P. 41(a)(1)(A)(i)-(ii).