Opinion
Case No. 2:00-CV-194
February 27, 2001
ORDER OF DISMISSAL
In accordance with this Court's Opinion of this date;
IT IS HEREBY ORDERED that Plaintiff's Motion to (Voluntarily) Dismiss without Prejudice (Dkt. No. 21) is GRANTED and this action is DISMISSED without PREJUDICE.
IT IS FURTHER ORDERED that Plaintiff's Motion to Modify the Stipulated Protective Order (Dkt. No. 25) is DENIED.
OPINION
This matter is before the Court on Plaintiff's Motion to (Voluntarily) Dismiss without Prejudice and Plaintiff's Motion to Modify Stipulated Protective Order. It is apparent from Defendant Duramax Marine, L.L.C.'s briefing that it opposes both motions.
Plaintiff R.W. Fernstrum Company seeks voluntary dismissal of its Complaint pursuant to Federal Rule of Civil Procedure 41(a)(2) for the purpose of allowing Plaintiff to pursue an alternative dispute process of the National Advertising Division of the Better Business Bureau ("NAD"). This is essentially a non-binding industry dispute resolution process. See, e.g., Warner-Lambert Co. v. Breathasure, Inc., 204 F.3d 87, 809 (3rd Cir. 2000); Quigley Corp v. Gumtech, Inc., 2000 W.L. 264130 (E.D.Pa. March 9, 2000) (unpublished decision). Plaintiff now expresses greater confidence in that process because that process is usually resolved quickly ( i.e., within a few months) and without all of the burdens and expenses of litigation. ( See Plaintiff's Motion to Dismiss, Exhibit 1 (NAD Procedures).) Since the request is made after the filing of an answer, dismissal is conditioned upon the district court's approval pursuant to Rule 41(a)(2). According to the Sixth Circuit Court of Appeals, in assessing whether the district court should grant dismissal, the district court must assess: defendant's efforts and expense of preparation for trial, excessive delay and lack of diligence on the part of the plaintiff in prosecuting the action, insufficient explanation for the need to take a dismissal, and whether a motion for summary judgment has been filed by the defendant. Grover by Grover v. Eli Lilly and Co., 33 F.3d 716, 718 (6th Cir. 1994). If dismissal is permitted without prejudice , then the district court may impose conditions upon the dismissal, which include the award of reasonable attorney fees and costs. Smoot v . Fox, 353 F.2d 830, 833 (6th Cir. 1965); Spa Gas, Inc. v. AP Propane, Inc., 972 F.2d 348, 1992 W.L. 172129 (6th Cir. July 22, 1992) (unpublished decision). The question of whether to modify an existing protective order sealing confidential documents is a matter of discretion for the district court. See Meyer Goldberg, Inc. of Lorain v. Fisher Foods, Inc., 823 F.2d 159, 161 (6th Cir. 1987).
This lawsuit was filed on October 17, 2000. This Court heard Plaintiff's motion for a preliminary injunction, which sought a restriction on Defendant's advertising, on December 5, 2000. The Court then determined that the request for preliminary injunction should be denied. The Magistrate Judge assigned this matter issued a Case Management Order on January 18, 2001, which called for discovery and an expected trial date in February 2002. On January 19, 2001, the Magistrate Judge approved a Stipulated Protective Order, which protected documents exchanged between the parties which contain confidential or proprietary information. Defendant apparently released testing documents to Plaintiff on November 30, 2000, which documents have been treated as subject to the Stipulated Protective Order. Plaintiff has, thus, requested that the Stipulated Protective Order be modified to permit the documents' use in the NAD process. Defendant argues that the action should not be dismissed, but that if it is dismissed the dismissal should be conditioned upon payment of attorney fees and other litigation costs, upon disclosure to the NAD of the preliminary injunction ruling, and upon an order preventing the use of discovery materials in the NAD proceedings. Plaintiff believes that the use of all of the discovery materials is fundamentally fair and would not threaten the interests of Defendant since the NAD proceedings themselves are not open to the public.
Upon review of these matters, the Court determines that this action should be dismissed without conditions. The dismissal was sought not long after this action was commenced and long before trial or the completion of discovery. There were no pending motions for summary judgment or motions to dismiss. The dismissal was sought for the purposes of pursuing alternative dispute resolution through a significant industry group. The contemplated dispute resolution is, in this Court's judgment, likely to save both of the parties significant resources should they participate in good faith. While it is tempting to assess Plaintiff attorney fees and costs as a condition for the dismissal given the prior determination that Defendant was more likely to prevail, the Court believes that it should refrain from doing so. This is because the dispute resolution process is more likely to save Defendant resources than the continuation of the current litigation. Also, the Court recognizes that the preliminary injunction motion was heard early in these proceedings and its resolution may not be reflective of proofs that could be later offered. The Court also believes that it is unnecessary to order that the Plaintiff refer the NAD to this Court's preliminary injunction ruling since Defendant is free to bring this to the NAD's attention.
Finally, the Court sees no reason to either modify the Stipulated Protective Order nor to prohibit the use of all discovery materials. The scheduled NAD proceedings are conducted in accordance with their own procedures. The parties can fairly use those procedures, including procedures that call for an advertiser to support advertising claims with confidential filings, without reference to the protected discovery in this case. Because the Stipulated Protective Order has not been modified, the request for a like condition of dismissal is moot. Furthermore, there are insufficient reasons for justifying additional conditions to dismissal relating to the use of discovery materials not subject to the Stipulated Protective Order.
As such, an Order shall enter granting without conditions Plaintiff's Motion to Dismiss without Prejudice and denying Plaintiff's Motion to Modify Stipulated Protective Order.