Opinion
No. 98-4180-SAC.
November 2000.
MEMORANDUM AND ORDER
The case comes before the court on the plaintiff's objections (Dk. 97) to the magistrate judge's report and recommendation (Dk. 95) concerning the plaintiff's oral motion for voluntary dismissal pursuant to Fed.R.Civ.P. 41(a)(2). The pro se plaintiff Michael R. Cuenca orally moved to dismiss his action without prejudice during a telephone conference call with the magistrate judge on June 12, 2000, which had been made to resolve a dispute over whether a non-party could attend the plaintiff's deposition. The defendants said they opposed the dismissal unless certain conditions were imposed. The magistrate judge set a briefing schedule on this issue. The parties filed their briefs. (Dks. 89 and 90). The district court referred the motion to dismiss to the magistrate judge for a report and recommendation. (Dk. 91).
On September 25, 2000, the magistrate judge filed his report recommending that the court grant the plaintiff's motion for dismissal without prejudice, but on the following conditions:
1) Upon refiling this action against the University of Kansas, the individually-named defendants, or any of its schools, departments, officials agents, or employees, plaintiff shall be required to pay to the University of Kansas $5,882.45 (the sum of defendants' requested costs and expenses);
2) Failure to pay the amount set forth by the Court within 20 days following the refiling of this action shall convert the dismissal without prejudice into a dismissal with prejudice; and
3) Plaintiff shall consent to the use, in any refiled action, of any material resulting from any discovery already conducted in this case.
(Dk. 95, p. 6).
STANDARD OF REVIEW
"De novo review is statutorily and constitutionally required when written objections to a magistrate's report are timely filed with the district court." Summers v. State of Utah, 927 F.2d 1165, 1167 (10th Cir. 1991) (citations omitted). "The district judge . . . shall make a de novo determination upon the record, or after additional evidence, of any portion of the magistrate judge's disposition to which specific written objection has been made." See Fed.R.Civ.P. 72(b). Those parts of the report and recommendation to which there has been no objection are taken as true and judged on the applicable law. See Campbell v. United States District Court for the Northern Dist. of California, 501 F.2d 196, 206 (9th Cir.), cert. denied, 419 U.S. 879 (1974); see also Summers v. Utah, 927 F.2d at 1167 (holding that "[i]n the absence of timely objection, the district court may review a magistrate's report under any standard it deems appropriate"). The district court has considerable judicial discretion in choosing what reliance to place on the magistrate judge's findings and recommendations. See Andrews v. Deland, 943 F.2d 1162, 1170 (10th Cir. 1991) (citing United States v. Raddatz, 447 U.S. 667 (1980)), cert. denied, 502 U.S. 1110 (1992). When review is de novo, the district court is "`free to follow . . . or wholly . . . ignore'" the magistrate judge's recommendation, but it "`should make an independent determination of the issues'" without giving "`any special weight to the prior'" recommendation. Andrews v. Deland, 943 F.2d at 1170 (quoting Ocelot Oil Corp. v. Sparrow Industries, 847 F.2d 1458, 1464 (10th Cir. 1988)). In short, the district court may accept, reject, or modify the magistrate judge's findings, or recommit the matter to the magistrate with instructions. See 28 U.S.C. § 636(b)(1)(C) (1994).
VOLUNTARY DISMISSAL STANDARDS
Rule 41(a)(2) controls voluntary dismissals after the opposing party files an answer or motion for summary judgment. Under Rule 41(a)(2), "an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper." Thus, a dismissal without prejudice under Rule 41(a)(2) depends on the district court's discretion. American Nat. Bank and Trust Co. v. Bic Corp., 931 F.2d 1411, 1412 (10th Cir. 1991). "[C]ourts generally allow dismissal without prejudice unless the defendant will suffer some plain legal prejudice." Wimber By and Through Wimber v. Department of Social and Rehabilitation Services, 156 F.R.D. 259, 261 (D.Kan. 1994). "Plain legal prejudice `is just that — prejudice to some legal interest, some legal claim, some legal argument.'" Mayes v. Fujimoto, 181 F.R.D. 453, 456 (D.Hawaii 1998) (quoting Westlands Water Dist. v. United States, 100 F.3d 94, 97 (9th Cir. 1996)), aff'd, 173 F.3d 861 (9th Cir. 1999) (Table). In other words, the court must consider "`whether the opposing party will suffer prejudice in the light of the valid interests of the parties.'" Clark v. Tansy, 13 F.3d 1407, 1411 (10th Cir. 1993) (quoting Barber v. General Electric Co. 648 F.2d 1272, 1275 (10th Cir. 1981)). The factors relevant in determining whether defendants would suffer legal prejudice include:
the defendants' efforts and funds expended towards preparing for trial; the plaintiff's undue delay or lack of diligence in prosecuting the action; the adequacy of the plaintiff's explanation for needing to dismiss; the plaintiff's diligence in moving to dismiss; the present stage of litigation; and duplicative expenses involved in a likely second suit.Nunez v. IBP, Inc., 163 F.R.D. 356, 359 (D.Kan. 1995); see Clark, 13 F.3d at 1411. Neither the mere prospect of a second lawsuit nor a tactical advantage to the plaintiff amounts to legal prejudice. American Nat. Bank, 931 F.2d at 1412.
Rule 41(a)(2) also gives a court the discretion "to dismiss an action without prejudice `upon such terms and conditions as the court deems proper." American Nat. Bank and Trust Co. v. Bic Corp., 931 F.2d at 1412. "Conditions are designed to alleviate any prejudice a defendant might otherwise suffer upon refiling of an action." Id. "The district court should impose only those conditions which actually will alleviate harm to the defendant." Id.; see Nunez v. IBP, Inc., 163 F.R.D. at 359. Terms and conditions typically should include at least the payment of taxable costs, but they also may include the payment of some or all of the other expenses and/or attorneys' fees or a requirement on the use of discovery or about the refiling of certain claims. See 9 Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure § 2366, ¶. 305-314 (1995). The moving plaintiff "must be given a reasonable opportunity to withdraw his motion if he finds those conditions unacceptable" or too onerous. Woodzicka v. Artifex Ltd., 25 F. Supp.2d 930, 934 (E.D.Wis. 1998) (citing Marlow v. Winston Strawn, 19 F.3d 300, 304 (7th Cir. 1994)); see Mortgage Guar. Ins. Corp. v. Richard Carlyon Co., 904 F.2d 298, 301 (5th Cir. 1990); 9 Federal Practice and Procedure § 2366 p. 316. In sum, Rule 41(a)(2) is designed "`to prevent voluntary dismissals which unfairly affect the other side.'" Nunez v. IBP, Inc., 163 F.R.D. at 358 (quoting Clark, 13 F.3d at 1411).
"[A] defendant is a prevailing party under Rule 54 when, in circumstances not involving settlement, the plaintiff dismisses its case against the defendant, whether the dismissal is with or without prejudice." Cantrell v. IBEW, AFL-CIO, Local 2021, 69 F.3d 456 (10th Cir. 1995). "Rule 54 creates a presumption that the district court will award costs to the prevailing party." Id. (citations omitted). The non-prevailing party has the burden of overcoming this presumption. Id.
ANALYSIS AND HOLDING
Having carefully reviewed the record, including the parties' memoranda and attachments, the court finds that the weight of the factors favors a dismissal without prejudice but only upon conditions similar to those recommended by the magistrate judge. The court considers the following facts to be relevant in weighing the different factors.
Following the withdrawal of the plaintiff's counsel in March, the magistrate judge continued deadlines on at least two occasions for the plaintiff to obtain new counsel. The record indicates the only scheduled discovery that remained was the completion of the plaintiff's deposition for which the deadline had been extended to June 19th. Less than a week before his scheduled deposition, the plaintiff filed an emergency motion to continue his deposition and a motion for relief from a protective order. The magistrate judge heard these motions on June 8th and denied the continuance but, according to the parties, ordered the defendants to make available to the plaintiff all documents previously produced to the plaintiff's former counsel. After preparing these documents, the defendant's counsel telephoned the plaintiff saying the documents were ready for him to review. During that conversation, the plaintiff apparently requested more documents. Without contesting the request, the defendants' counsel secured the additional documents and again telephoned the plaintiff. At that time, the plaintiff told the defendants' counsel for the first time that he intended to dismiss his action next week. The defendants' counsel informed the plaintiff that he could not dismiss without the court's permission and that counsel would not agree to a continuance of his deposition which was scheduled to commence the following Monday on June 12th. The plaintiff arrived for his deposition on Monday morning but was accompanied by a non-party fact witness. A dispute over this person being present resulted in a telephone conference with the magistrate judge during which the plaintiff announced that he wanted to dismiss his action without prejudice. When the defendants' counsel objected, the magistrate judge gave dates for the filing of briefs.
In his first brief, the plaintiff wrote the dismissal was needed "to correct the pleadings [by adding a retaliation claim], to seek new counsel, and to start the case over." (Dk. 89, p. 2). In his objection to the report and recommendation, the plaintiff writes that he "had every intention of proceeding with the case and the scheduled deposition" until the magistrate judge denied his request to lift the protective order and his motion for extension and granted him only one business day to review documents before his deposition. (Dk. 97, p. 2). While admitting that the defendant's counsel did not learn until June 9th of his intent to dismiss the action, the plaintiff writes that the defendants' counsel was aware of his long-planned family trip that would soon take him out of the country. The plaintiff challenges the defendants' counsels' time spent in opposing the motion to dismiss as unreasonable in its futility because of the magistrate judge's comments that his motion was likely to be granted. Finally, the plaintiff calls the court's attention to his right to withdraw his motion if he rejects the conditions.
The defendants' pleadings and attachments substantiate that their counsel have expended substantial time and effort in discovery. It is true that much of this work will not be wasted in the event that the plaintiff refiles his action. On the hand, the defendants have been harmed by the wasted time and effort expended as a result of the plaintiff's delay in obtaining new counsel, delay in asking for documents to be made available for his review prior to his deposition, delay in seeking a continuance of his deposition, delay in requesting a non-party witness to be present at his deposition, delay in telling the defendants of his intention to dismiss, and delay in moving for the dismissal. The plaintiff's reasons for seeking a dismissal now, particularly those most recently offered, lack the character and substance to explain away or otherwise justify the prejudice caused the defendants.
Because conditions here can alleviate the prejudice to the defendants, the court finds that the above factors do not establish the manifest legal prejudice required to prevent dismissal. Courts often award attorney's fees and particularly costs as a condition. Taragan v. Eli Lilly and Co., Inc., 838 F.2d 1337, 1340 (D.C. Cir. 1988). It is not mandatory, however, to condition dismissal on costs to the defendant. DWG Corp. v. Granada Investments, Inc., 962 F.2d 1201, 1202 (6th Cir. 1992). These conditions, like the other possible conditions, serve to protect the defendants from undue prejudice and inconvenience caused by the premature dismissal. Taragan, 838 F.2d at 1340. After reviewing closely the defendants' counsels' record of billed hours and cutting in half the number of hours billed for opposing the plaintiff's motion to dismiss, the court finds that the defendants have incurred the following reasonable attorneys' fees as a result of the plaintiff's dilatory conduct leading to his motion to dismiss without prejudice: $846 for Ms. Marino (7.05 hours times $120) and $1144.75 for Ms. McCloud (12.05 hours times $95). In addition, the court concurs with the defendants' request that the plaintiff pay one-half of their expenses or $1274.35 as a condition.
The court grants the plaintiff's motion to dismiss without prejudice upon the following conditions:
1) Upon refiling this action against the University of Kansas, the individually-named defendants, or any of its schools, departments, officials, agents or employees, the plaintiff shall be required to pay to the University of Kansas $3,265.10 (the determined sum of attorneys' fees and costs);
2) The plaintiff's failure to pay the above amount within twenty days after refiling this action shall convert this dismissal without prejudice into a dismissal with prejudice; and
3) The plaintiff shall consent in the refiled action to the use of material produced during the discovery conducted in this case.
The plaintiff shall have ten days to file with the court his election to accept or reject these conditions. If the plaintiff elects to accept the conditions or files no timely election, then the court shall enter an order that dismisses this action without prejudice on the above conditions. If the plaintiff files a document rejecting these conditions, the magistrate judge promptly will conduct a conference and set the final deadlines for the completion of all remaining pretrial matters.
IT IS SO ORDERED.