Opinion
Docket No. 99-CV-0450E(F).
December 15, 2000
Linda H. Joseph, Esq., c/o Buchanan Ingersoll Professional Corporation, Buffalo, NY., Attorney[s] For The Plaintiff[s].
Joseph M. Finnerty, Esq., c/o Stenger Finnerty, Buffalo, NY., Attorney[s] For The Defendant[s].
MEMORANDUM AND ORDER
Plaintiff, a manufacture and seller of — inter alia — textile cutting machines and textile cutting machine parts, filed this action June 30, 1999 asserting four causes of action against defendant, a seller of — inter alia — generic replacement parts for textile cutting machines, for patent infringement and for infringement and for dilution of plaintiff's trademark under the Lanham Act, 15 U.S.C. § 1051 et seq., and, in a state law claim, for unfair competition. At issue are a patented electrical plug and certain additional, but unspecified, Eastman products. Compl. ¶¶ 18-19. Soon after defendant filed its Answer July 22, 1999, the parties entered into a stipulation, filed September 23, 1999, whereby defendant agreed not to market and sell an electrical plug bearing the Eastman name. The Scheduling Order in this action ends discovery March 30, 2001. Presently before this Court is plaintiff's November 8, 2000 motion, brought pursuant to Rules 16(a) and 41(a)(2) of the Federal Rules of Civil Procedure ("FRCvP"), to amend the Complaint by withdrawing its patent infringement claim without prejudice while simultaneously allowing it to limit the trademark and state law claims to the patented electrical plug. Such motion will be granted.
Preliminarily, this Court notes that "[d]efendant is not opposed to plaintiff's proposed withdrawal of its claim for patent infringement, as such, nor to the limitation of its remaining claims to a single product, a certain electrical plug designated as product no. 523C1-102." Def.'s Mem. of Law at 1. Accordingly, plaintiff will be granted leave to amend its Complaint. The issue to be decided, however, is the manner in which such withdrawal will be granted — i.e., with prejudice, without prejudice or without prejudice and conditioned upon an award of attorney fees and costs. For obvious reasons, defendant wishes such withdrawal to be granted with prejudice and conditioned upon an award of those attorney fees and costs that it has incurred in defending the action with respect to the withdrawn claim and products. Plaintiff desires no such prejudice or condition.
While FRCvP 41(a)(2) overlaps with FRCvP 16(a) "to the extent that a plaintiff can effectively amend the pleading by dismissing particular claims from the action" — 8 James Wm. Moore et al., Moore's Federal Practice § 41.13[6] (3d ed. 2000) — and is "functionally interchangeable in the circumstances present in this case, Rule 15(a) is technically the preferred rule to apply." Jet, Inc. v. Sewage Aeration Sys., 223 F.3d 1360, 1364 (Fed. Cir 2000); see also Wakefield v. Northern Telecom, Inc., 769 F.2d 109, 114 n. 4 (2d Cir. 1985) (noting that "a district court may permit withdrawal of a claim under Rule 15 subject to the same standard of review as a withdrawal under Rule 41(a)"). Nevertheless and because defendant does not oppose amending the Complaint, FRCvP 41(a)(2) analysis is required to determine the effect of such amendment.
FRCvP 41(a)(2) states that "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" and that, "[u]nless otherwise specified in the order, a dismissal under this paragraph is without prejudice." Factors relevant to the consideration of a motion to dismiss without prejudice made pursuant to FRCvP 41(a)(2) "include the plaintiff's diligence in bringing the motion; any `undue vexatiousness' on plaintiff's part; the extent to which the suit has progressed, including the defendant's effort and expense in preparation for trial; the duplicative expense of relitigation; and the adequacy of plaintiff's explanation for the need to dismiss." Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990). In determining whether to allow the withdrawal of plaintiff's claim without prejudice, moreover, this Court exercises "considerable discretion" and may "allow such a dismissal if the defendant will not be prejudiced thereby, and should consider defendant's effort and expense in defending the action as well as the plaintiffs' reasons for needing such a dismissal." Wakefield, at 114.
Citations omitted.
In support of its motion, plaintiff argues that the proposed Amended Complaint is brought in good faith because it "streamlines this action by limiting it to a single product" and "will in all likelihood expedite this litigation." Pl.'s Mem. of Law at 4. Plaintiff also argues that defendant "will not [be] prejudiced [because] the claims with respect to the patented plug are identical to those asserted in the original Complaint." Ibid. Nonetheless, conspicuously absent are any articulated reasons as to why over thirteen months were allowed to pass before the instant motion was filed. From what can be gathered from plaintiff's submissions, such delay is attributable to settlement negotiations which ultimately proved unsuccessful and to a belated desire to expedite this action by dropping those portions which require further discovery. Id. at 2. Such reasons standing alone, however, are not demonstrative of plaintiff's diligence in bringing the motion and will not justify withdrawal of plaintiff's claim without prejudice. Indeed, defendant has opined that the delay in seeking the instant motion could be attributable to a desire to "avoid fulfilling [plaintiff's] reciprocal and outstanding discovery obligations." Finnerty Aff. ¶ 15. Similarly, this Court is not wholly satisfied that plaintiff's desire to expedite its trademark and state law claims through amending the Complaint four months prior to the expiration of formal discovery justifies the withdrawal of its patent claim without prejudice. Defendant argues — and this Court can find nothing in the record which traverses such contention — that it has been subjected to "extensive and searching discovery demands" by plaintiff and, in the process, has "expended considerable sums of money" defending against all of plaintiff's claims. Def.'s Mem. of Law at 9, 10. Under such circumstances, allowing plaintiff to withdraw its claim without prejudice for convenience's sake presumably works to undermine finality as well as notions of judicial economy and efficiency.
Nevertheless, "a dismissal without prejudice should be granted where the defendant will not suffer any legal prejudice" and the prospect of recommencing withdrawn claims does not constitute legal prejudice. Mercer Tool Corp. v. Friedr. Dick GmbH, 175 F.R.D. 173, 176 (E.D.N.Y 1997). In this regard, defendant claims that it has suffered prejudice in the form of "harm and expense already suffered as a result of its protracted litigation" and that "defendant will most assuredly incur duplicative litigation expenses should plaintiff's claims [be] withdrawn without prejudice." Def.'s Mem. of Law at 10. "However, the advanced state of the litigation and the legal and other expenses incurred by themselves do not mandate a denial of plaintiff's motion, although they are proper factors to be evaluated in the event terms are to be imposed as a condition of granting a motion for voluntary dismissal." Louis v. Bache Group, Inc., 92 F.R.D. 469, 461 (S.D.N.Y 1981). "Indeed, such dismissals have been granted on the eve of trial and even after trial has commenced." Ibid. This Court holds that defendant has not established such undue prejudicial harm as to require granting the motion with prejudice. Consequently and in light of this Court's weighing of the above factors, plaintiff will be allowed to withdraw its claim without prejudice.
Inasmuch as this Court will allow plaintiff to amend the Complaint and withdraw its patent infringement claim without prejudice while simultaneously limiting its trademark and state law claims to the patented electrical plug, the issue that remains is whether such will be conditioned upon an award of those attorney fees and costs that defendant has incurred in defending the action with respect to the withdrawn claim and products. "The prejudice that [defendant] can justifiably claim is the burden of expense involved in the litigation up to this point." Ibid. FRCvP 41(a)(2) provides that dismissal shall be made "upon such terms and conditions as the court deems proper" and courts often award attorney fees and costs when a plaintiff dismisses a suit without prejudice. Colombrito v. Kelly, 764 F.2d 122, 133 (2d Cir. 1985). "The purpose of such awards is generally to reimburse the defendant for the litigation costs incurred, in view of the risk (often the certainty) faced by the defendant that the same suit will be refiled and will impose duplicative expenses upon him." Ibid. This Court believes that the facts of the instant case may require an award of those attorney fees and costs that defendant has incurred in defending the action with respect to the soon-to-be withdrawn claim and products. In light of the fact that defendant has not proffered proof of such fees and costs, however, any discussion of such award at this time would be improper.
Accordingly, it is hereby ORDERED that plaintiff's motion to amend the Complaint by withdrawing its patent infringement claim without prejudice while simultaneously limiting its trademark and state law claims to the patented electrical plug is granted, that plaintiff shall serve and file such proposed Amended Complaint by January 10, 2001 and that defendant may serve and file not later than January 17, 2001, a motion for an award of those attorney fees and costs that defendant has incurred in defending this action with respect to the withdrawn claim and products.