Diana Arias v. Joseph T. Cameron ( 2015 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_________________________
No. 13-14863
_________________________
D.C. Docket No. 1:13-cv-01254-TCB
DIANA ARIAS,
Plaintiff-Appellee,
versus
JOSEPH T. CAMERON, et al.,
Defendants-Appellants.
__________________________
Appeal from the United States District Court
for the Northern District of Georgia
__________________________
(January 20, 2015)
Before WILSON, ROSENBAUM, and BLACK, Circuit Judges.
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ROSENBAUM, Circuit Judge:
On the football field, a team with a weak defense may choose to emphasize
its offense. The trouble is, in the end, it can be hard to win without a reliable
defense.
That is much like the problem that Defendants-Appellants Joseph T.
Cameron and The Dow Chemical Company (“Dow”) have in this case. Plaintiff-
Appellee Diana Arias sued Cameron and Dow for injuries that Cameron allegedly
inflicted on Arias while Cameron was acting within the course of his employment
for Dow. When Defendants sought judgment in the case on the basis that Arias
had allegedly failed to timely perfect service upon them before the statute of
limitations ran, Arias moved to voluntarily dismiss the case without prejudice. By
doing so, Arias hoped to take advantage of Georgia law, which allows a plaintiff
who originally files a case within the statute-of-limitations period to voluntarily
dismiss her case and refile it within six months, thereby triggering a new period in
which to timely effect service. Defendants went on the offensive, opposing Arias’s
motion for voluntary dismissal on the basis that a voluntary dismissal without
prejudice would prejudice them by depriving them of their statute-of-limitations
defense.
The district court granted Arias’s motion and voluntarily dismissed the case
without prejudice. Defendants now appeal.
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But Defendants’ statute-of-limitations defense is, by no means, a certain
winner. So their offense—that they will suffer prejudice as the result of a
voluntary dismissal without prejudice because they will lose their statute-of-
limitations defense—necessarily falters since it depends on their unreliable
defense.
And even if Defendants had a viable statute-of-limitations defense that
would be destroyed by a voluntary dismissal without prejudice, all of the other
equities in this case—which a district court should consider under Rule 41(a)(2) in
determining whether to grant a motion for voluntary dismissal—favor Arias. For
these reasons, we find that the district court did not abuse its discretion when it
granted Arias’s motion for voluntary dismissal without prejudice.
I.
A. The Nature of the Case
In her complaint, Arias alleged that, on March 19, 2011, she was riding her
bicycle in Georgia when Defendant-Appellant Cameron, driving a rental car, failed
to yield and collided with her. According to the complaint, the car that Cameron
was driving was insured by Cameron’s employer, Dow, and Cameron was
operating the car within the course and scope of his employment. As a result of the
incident, the complaint asserts, Arias suffered “great bodily injuries.”
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When the incident occurred, Cameron produced a California driver’s license
to the Cobb County Police Department, which cited Cameron for failure to yield
under Georgia statute O.C.G.A. § 40-6-71 and issued Cameron a ticket.
On February 25, 2013, just over three weeks before the end of Georgia’s
two-year statutory period for filing such claims,1 Arias filed suit in Cobb County
State Court against Cameron and Dow. She claimed that she was entitled to
damages under two theories of recovery: negligence and stubborn litigiousness.
B. Arias’s Initial Attempts at Service
Upon the filing of her complaint, Arias attempted to serve both Cameron and
Dow. With regard to Cameron, Arias stated in the proceedings below that she
believed him to be a California resident, based on his production of a California
driver’s license at the time of the incident and based on Georgia law that generally
requires all residents of the state for more than thirty days to obtain a Georgia
driver’s license before operating a motor vehicle in the state, see O.C.G.A. § 40-5-
20(a). For this reason, Arias attempted to serve Cameron with the summons and
complaint pursuant to Georgia’s Non-Resident Motorist Act, O.C.G.A. § 40-12-1,
et seq. (“NRMA”), which sets forth requirements for service on those who are not
residents of Georgia, as the service requirements relate to complaints involving the
operation of a motor vehicle.
1
In Georgia, the statute of limitations for bringing a tort action involving claims of
personal injuries is two years from date that the cause of action accrued. See O.C.G.A. § 9-3-33.
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In an effort to comply with the NMRA, on March 13, 2013, Arias mailed the
summons and complaint to the Georgia Secretary of State to obtain service on
Cameron. Arias also sent Cameron a copy of the summons and complaint by
certified mail on the same date, which Cameron later received on March 23, 2013.
With respect to Dow, counsel for Arias attested in the district-court
proceedings that, on February 6, 2013, he visited the Georgia Secretary of State’s
website to find the registered agent for Dow, but his query resulted in a showing of
no agent for service of process in Georgia. According to counsel for Arias, he did
not learn until “[m]uch later” that the website was “in transition and not
functioning properly.”
Based on the erroneous belief that Dow lacked a corporate presence in
Georgia, Arias mailed a copy of the summons and complaint to Georgia’s
Secretary of State on February 28, 2013, to obtain service on Dow in Delaware, its
place of incorporation. Arias also sent the summons and complaint to Dow’s
registered agent in Delaware via certified mail on March 13, 2013. On that same
date, Arias sent the summons and complaint to the New Castle County Sheriff’s
Department as well, to make service on Dow in Delaware.
On March 19, 2013, the day upon which Dow contends that the two-year
statute of limitations expired under O.C.G.A. § 9-3-33, Dow received the summons
and complaint that Arias sent by certified mail on March 13, 2013. One week
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later, on March 27, 2013, the New Castle County Sheriff’s Department personally
served Dow’s registered agent in Delaware with the summons and complaint.
Although Arias believed that she had adequately served Dow, on April 1,
2013, Georgia’s Secretary of State sent counsel for Arias a letter stating that Dow
was actually registered with the Office of Georgia Secretary of State, so the Office
returned the documents that Arias’s counsel had sent it for service upon Dow.
Alerted to the fact that Dow had a registered agent in Georgia, Arias immediately
attempted to obtain personal service on Dow’s agent. Towards this end, on April
4, 2013, Arias sent the summons and complaint to the Gwinnett County Sheriff’s
Department for service on Dow’s Georgia agent. The Sheriff’s Department served
Dow’s registered agent on April 9, 2013.
C. Removal of the State Court Action and the Defendants’ Motion to Dismiss
As a result of Arias’s service efforts, both Dow and Cameron received notice
of Arias’s action, and, on April 17, 2013, Dow and Cameron removed the matter to
federal court pursuant to 28 U.S.C. § 1441, asserting that the district court enjoyed
diversity jurisdiction over the parties under 28 U.S.C. § 1332.
One week later, on April 25, 2013, Defendants filed a motion to dismiss
pursuant to Rules 12(b)(2), 12(b)(5), and 12(b)(6), Fed. R. Civ. P. In the motion to
dismiss, Defendants asserted that Arias had failed to timely and properly serve
them, so the matter should be dismissed for improper service of process. They
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further argued that dismissal should be with prejudice, since, at the time that
Defendants filed their motion to dismiss, in Defendants’ view, Arias’s claims were
time-barred under Georgia’s two-year statute of limitations.
More specifically, Dow contended that Arias did not make proper service
upon it until April 9, 2013, after the statute of limitations expired. As to Cameron,
Defendants asserted that service on him under Georgia’s NRMA was improper
because Cameron claimed to have actually been a resident of Georgia at the time
of the accident.2 So Defendants argued that Arias should have served Cameron in
accordance with Georgia’s long-arm statute, O.C.G.A. § 9-10-91, which required
Arias to personally serve Cameron in California—something that Arias had not
done at that point.3
Cameron also contended that even if he were not considered to be a resident
of Georgia at the time of the incident, the NMRA service was deficient because
Arias had failed to comply with its strict requirements in that Arias allegedly had
omitted required pieces of information and did not file the proper papers with the
2
Despite the fact that he still apparently had no Georgia driver’s license at the time of the
incident, according to Cameron, he had lived in Georgia for approximately seven months and
was considering staying in Georgia permanently. Cameron stated that he engaged in daily life
activities such as entertaining friends at his home, had a gym membership, and received personal
mail in Georgia. Id.
3
Under O.C.G.A. § 9-10-94, a person of sound mind, who is of the age of majority and is
a nonresident of Georgia subject to personal jurisdiction under Georgia’s long-arm statute must
be served either personally or by leaving copies of the summons and complaint “at [his] dwelling
house or usual place of abode with some person of suitable age and discretion then residing
therein,” O.C.G.A. § 9-11-4(e)(7).
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state court after service.4 Cameron also alleged that the NMRA service was
untimely since he did not receive the complaint and summons by certified mail
until March 23, 2013, after the statute of limitations had expired.
D. Arias’s Further Attempts to Serve Cameron
The April 24, 2013, filing of the motion to dismiss put Arias on notice that
Cameron contended that he was a resident of Georgia at the time of the accident.
So Arias pursued personal service on Cameron in California, pursuant to Georgia’s
long-arm statute—the provision that would govern service on Cameron in
California if Cameron were a resident of Georgia at the time of the incident.
On April 29, 2013, Arias sent the summons and complaint to the San
Bernardino’s Sheriff’s Office in California to accomplish service on Cameron.
According to the San Bernardino Sheriff’s Department, it attempted to serve
Cameron on four occasions between May 4, 2013, and May 29, 2013, but it had no
success. On the second attempt, the Sheriff’s Department left a business card with
a name and contact telephone number, requesting that Cameron call the San
Bernardino Sheriff’s Department, after no one answered Cameron’s door. Still, it
was unable to serve Cameron.
4
For instance, although Arias mailed Cameron a copy of the complaint and summons, the
defendants claimed that she did not include the notice of service upon the Secretary of State, as
required by O.C.G.A. § 41-12-2. The defendants also contended that Arias did not “append”
Cameron’s return receipt, her affidavit of compliance, and the summons, process, and complaint
to the other papers and file them collectively with the state court to establish that she had
complied with the NMRA.
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So on May 16, 2013, counsel for Arias sent Cameron’s attorney a letter
stating that the San Bernardino Sheriff’s Department had been trying to serve
Cameron but was having no success. Counsel for Arias therefore asked Cameron’s
counsel whether Cameron would be willing to waive service, but Cameron refused.
As a result and after the San Bernardino Sheriff’s Department had made four
unsuccessful service attempts on Cameron, on May 29, 2013, Arias hired a process
server in California and requested that the server “stake out” Cameron’s residence
until accomplishing service on Cameron. Two days later, on May 31, 2013, the
process server personally served Cameron with the summons and complaint under
Georgia’s long-arm statute.
E. Cameron and Dow’s Motion for Summary Judgment
While Arias was still attempting to serve Cameron under Georgia’s long-
arm statute, on May 8, 2013, Defendants filed their Answer to the complaint and
re-filed their motion to dismiss as a motion for judgment on the pleadings,
pursuant to Rule 12(c). Defendants continued to make essentially the same
arguments concerning alleged failure to effect proper service.
Arias timely opposed the motion, arguing that service of process had been
timely and proper on both Defendants. She also asserted that it would be
inequitable to penalize her under the circumstances, since she had diligently
pursued service of Defendants. Along with her opposition to Defendants’ motion
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for summary judgment, Arias moved for voluntary dismissal of the case without
prejudice, pursuant to Rule 41(a)(2), Fed. R. Civ. P., as an alternative to the
granting of summary judgment to Defendants. She did so for the express purpose
of taking advantage of Georgia law, which allows a litigant to refile a case within
six months of the voluntary dismissal of the action after the expiration of the
applicable statute of limitations, when the original action was filed within the
applicable statute of limitations. O.C.G.A. § 9-2-61.
Defendants opposed Arias’s request for voluntary dismissal. Among other
reasons, Defendants contended that voluntarily dismissing the case would
eliminate Defendants’ statute-of-limitations defense, which was based on the claim
of ineffective timely service of process, since Georgia law allows a plaintiff to
revive her claims after the statute of limitations has already run and restart the
service clock.
The district court granted Arias’s motion to voluntarily dismiss her case and
denied as moot Defendants’ motion for summary judgment. But the court
nonetheless directed that if Arias chose to refile her claims, she must first pay
Defendants’ attorneys’ fees and costs incurred in this action, as the district court
determined those costs and fees. Defendants now appeal the district court’s
voluntary dismissal of Arias’s claims.
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II.
The decision of whether to grant a voluntary dismissal pursuant to Rule
41(a)(2), Fed. R. Civ. P., falls within the sound discretion of the district court.
Therefore, we review the district court’s decision to voluntarily dismiss the case
for an abuse of discretion. See Fisher v. Puerto Rico Marine Mgmt., Inc., 940 F.2d
1502, 1502-03 (11th Cir. 1991) (per curiam) (citing LeCompte v. Mr. Chip, Inc.,
528 F.2d 601, 604 (5th Cir. 1976)5).
III.
Rule 41(a) of the Federal Rules of Civil Procedure governs a plaintiff’s
ability to dismiss an action voluntarily and without prejudice. See Fed. R. Civ. P.
41(a). The rule allows a plaintiff to do so without seeking leave of court, as long
as the defendant has not yet filed an answer or a motion for summary judgment.
Fed. R. Civ. P. 41(a)(1)(A). If a defendant has made such a filing, the plaintiff
must obtain permission from the court to voluntarily dismiss her case: “Except as
provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only
by court order, on terms that the court considers proper.” Fed. R. Civ. P. 41(a)(2).
Such a dismissal is considered to be without prejudice unless otherwise specified
by the court.
5
Opinions of the Fifth Circuit issued prior to October 1, 1981, are binding precedent in
the Eleventh Circuit. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981).
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A district court enjoys broad discretion in determining whether to allow a
voluntary dismissal under Rule 41(a)(2), Fed. R. Civ. P. Pontenberg v. Boston
Scientific Corp., 252 F.3d 1253, 1255 (11th Cir. 2001) (per curiam). Generally
speaking, a motion for voluntary dismissal should be granted unless the defendant
will suffer clear legal prejudice other than the mere prospect of a second lawsuit.
Id.; Fisher, 940 F.2d at 1502–03 (citing Durham v. Fla. E. Coast Ry. Co., 385 F.2d
366, 368 (5th Cir. 1967)).
The purpose of Rule 41(a)(2) “is primarily to prevent voluntary dismissals
which unfairly affect the other side, and to permit the imposition of curative
conditions.” McCants v. Ford Motor Co., Inc., 781 F.2d 855, 856 (11th Cir. 1986)
(citation and internal quotation marks omitted). We must consider the crucial
question of whether “the defendant [would] lose any substantial right by the
dismissal.” Pontenberg, 252 F.3d at 1255 (citation omitted). But, ultimately, the
determination of whether to grant such a dismissal falls within the sound discretion
of the district court. Fisher, 940 F.2d at 1503 (citing LeCompte, 528 F.2d at 604).
While the district court “should keep in mind the interests of the defendant, for
Rule 41(a)(2) exists chiefly for protection of defendants,” id., the court should also
weigh the relevant equities and do justice between the parties in each case,
imposing such costs and attaching such conditions to the dismissal as are deemed
appropriate. McCants, 781 F.2d at 857.
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Here, Cameron and Dow contend that the district court erred in granting
Arias’s motion for voluntary dismissal because the dismissal resulted in clear legal
prejudice to them: the loss of their statute-of-limitations defense if Arias re-files
her action in Georgia state court. We disagree that the district court abused its
discretion under the circumstances of this case.
A. Defendants’ Statute-of-Limitations Defense
To explain why, we first consider the strength of Defendants’ statute-of-
limitations defense. If the defense lacked merit, Defendants did not even arguably
suffer any cognizable prejudice as a result of the voluntary dismissal. We begin
with a review of applicable Georgia law.
Although Georgia law requires a process server to effect service within five
days of receipt of the complaint and summons, O.C.G.A. § 9-11-4(c)(5), it states
no time limit within which a plaintiff must seek service. Ga. Farm Bureau Mut.
Ins. Co. v. Kilgore, 462 S.E.2d 713, 715 (Ga. 1995). So, as long as service is
perfected before the statute of limitations expires, “the mere time lapse between the
date of filing and the date of service is not a valid basis for dismissal.” Id. (citation
and internal quotation marks omitted).
When a complaint is filed within the limitations period but service is
perfected after the limitations period ends, service relates back to the time of filing
“so as to avoid the limitation,” as long as service is timely perfected. Giles v. State
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Farm Mut. Ins. Co., 765 S.E.2d 413 (Ga. Ct. App. 2014) (citation and quotation
marks omitted). Although § 9-11-4(c)(5)’s five-day safe-harbor provision applies
by its language to process servers only and not to parties, service is, nevertheless,
always timely perfected if a party completes it within that period. See id. If
perfected service is attempted before the expiration of the statute of limitations but
is not made within the five-day period and the defendant asserts insufficiency of
service after the statute of limitations expires, service can still be timely perfected
and relate back to the time of filing, provided that the plaintiff acts with “the
greatest possible diligence to serve the defendant from that point forward.”6
Moody v. Gilliam, 637 S.E.2d 759, 761 (Ga. Ct. App. 2006) (citation and quotation
marks omitted).
Here, Arias attempted to complete service on Dow three different ways
before the statutory period ended on March 19, 2013: on February 28, 2013, she
sent a copy of the process to Georgia’s Secretary of State to make service on Dow
in Delaware; on March 13, 2013, by certified mail, she sent the process to Dow’s
registered agent in Delaware; and also on March 13, 2013, she arranged for the
New Castle County Sheriff’s Department to make service on Dow in Delaware.
6
Service is also timely perfected if the process server makes service within five days of
receipt of the summons and complaint from the clerk of court, regardless of how much time
lapses between the plaintiff’s filing of the action and the process server’s receipt of the complaint
and summons from the clerk, provided that service is accomplished within the statutory period.
See Giles, 765 S.E.2d 413. In this case, however, Plaintiff—not the clerk of court—provided the
various process servers with process, apparently after Plaintiff had obtained it from the clerk.
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So it is clear that Arias attempted to perfect service on Dow within the statutory
period.
Arias only learned that she did not perfect service on Dow through her
February and March 2013 efforts when she received the letter dated April 1, 2013,
that Georgia’s Secretary of State sent advising that Dow was registered with the
Office of the Georgia Secretary of State. Allowing for three mailing days, cf.
O.C.G.A. § 9-11-6(e), Arias could have been expected to receive the Secretary of
State’s letter—and thus notice of insufficient service—on April 4, 2013. And, the
record reflects that that very day, Arias sent the summons and complaint to the
Gwinnett County Sheriff’s Department for service on Dow’s Georgia agent. The
Sheriff’s Department then served Dow’s registered agent on April 9, 2013—within
the five-day period from its receipt of the summons and complaint for service.
Because Arias immediately delivered the summons and complaint for service upon
learning that her original service on Dow was insufficient, and then the process
server accomplished proper service within the five-day safe-harbor period, Arias
appears to have timely perfected service on Dow that relates back to the time of her
filing her complaint within the limitations period.7
7
Dow asserts, “Defendants do not concede that any of Plaintiff’s service attempts were
made by authorized individuals, particularly given the numerous other flaws in her service
attempts.” This conclusory and entirely unsupported argument cannot carry the day for Dow, in
light of the fact that the record contains a notarized return of service on Dow, signed by a deputy
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With regard to Cameron, Arias learned that her service on him was arguably
insufficient when she received Defendants’ motion to dismiss, which they filed on
April 24, 2013—a Wednesday. Allowing time for service under O.C.G.A. § 9-11-
6(e), Arias should have taken action to effect proper service by Monday, April 29,
2013. See O.C.G.A. §§ 9-11-6(a); 1-3-1(d)(3) (when the last day of the period falls
on a Saturday or Sunday, the next business day following becomes the last day of
the period).
The record reveals that is exactly what she did. On April 29, 2013, Arias
sent the summons and complaint to the San Bernardino’s Sheriff’s Office for
service on Cameron in California. Despite four attempts by the Sheriff’s Office to
serve Cameron between May 4, 2013, and May 29, 2013—including the Sheriff’s
Office’s leaving of a note on Cameron’s door instructing him to call, and
Plaintiff’s communications in May with Cameron’s counsel about the service
attempts—the Sheriff’s Office was unable to make service on Cameron. Arias
then sought to effect service on Cameron in a third way since learning that
Cameron contested Arias’s original service efforts: she hired a private process
server and directed him to “stake out” Cameron’s residence until Cameron was
personally served. It still took two days to accomplish service. Under these
circumstances, it appears that Cameron may have been trying to evade service.
sheriff with Gwinnett County. Georgia law authorizes deputy sheriffs in the county where the
action is brought or where the defendant is found to serve process. See O.C.G.A. § 9-11-4(c)(1).
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A defendant’s evasion of service bears on the determination of whether a
plaintiff exercised diligence in attempting to accomplish service. In Feinour v.
Ricker Co., 604 S.E.2d 588 (Ga. Ct. App. 2004), overruled on different grounds by
Giles, 765 S.E.2d 413 at n.2, for example, the plaintiff filed her case on September
28, 2000, and began service attempts on the defendant on October 2, 2000. Id. at
590. Between October 2, 2000, and March 7, 2001, the defendant engaged in acts
to evade service. Id. at 590-91. The plaintiff made several efforts to serve the
defendant, first through one sheriff’s office, then another, then through a
professional process server, and last, through a court-appointed process server,
finally serving him on March 7, 2001, after the statute of limitations had expired.
Id. at 591. Although the trial court granted the defendant’s motion for summary
judgment based on untimely service, the appellate court reversed, concluding that
where there was “evidence that [the plaintiff’s] efforts to serve [the defendant]
were continuous and that she exercised the greatest possible diligence in light of
[the defendant’s] obvious and continued attempts to evade service,” summary
judgment for untimely service was improper. Id. at 591-92.
This case is substantially similar to Feinour. While the Feinour plaintiff
attempted service in four different ways over a five-month period, Arias tried three
different ways to obtain service on Cameron over a 27-day period. The first
method—through the San Bernardino Sheriff’s Office—involved four separate
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attempts, and, with respect to the third method, Arias instructed the process server
to effectively remain at Cameron’s house until service was accomplished. These
efforts were comparably continuous and diligent to those of the Feinour plaintiff.
As a result, when service was finally made on Cameron on May 31, 2013, it should
have related back to the filing of the complaint before the expiration of the statute
of limitations. Thus, Defendants’ statute-of-limitations defense appears to lack
merit.
B. Precedent
But even if we very charitably described Defendants’ statute-of-limitations
defense as potentially viable—a description that we do not endorse, the district
court still did not abuse its discretion in voluntarily dismissing the case without
prejudice because our precedent allowed it to do so. McCants v. Ford Motor Co.,
Inc., 781 F.2d 855 (11th Cir. 1986), decided nearly thirty years ago, drives the
outcome of this issue.
In McCants, we held that, under the facts of the case, the loss of a statute-of-
limitations defense alone did not necessarily constitute per se legal prejudice
sufficient to bar a dismissal without prejudice under Rule 41. Id. at 859. The
plaintiff in McCants filed a wrongful-death action under Mississippi products-
liability law in an Alabama federal court, based on a jeep accident that occurred in
Mississippi. Id. at 856. When the plaintiff originally filed suit, she did so within
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the limitations period, but she sued the wrong party, A.M. General, believing it to
be the manufacturer of the jeep. Id. When she discovered the error, the plaintiff
sought leave to amend her complaint to add Ford as a defendant, since it was the
actual manufacturer of the jeep. Id. Rather than granting the plaintiff leave to
amend the complaint, and after the one-year statute of limitations had run under
Alabama law, the district court dismissed the action without prejudice. Id. Shortly
thereafter, the plaintiff filed a second suit, this time naming Ford as a defendant.
Id.
Ford did not plead the statute of limitations in its answer but raised it in an
amended answer about eight months after the initiation of the suit and a month
before it filed its summary-judgment motion. Id. at 857. The district court denied
the motion for summary judgment and, the following day, granted the plaintiff’s
motion for dismissal without prejudice. Id. The dismissal without prejudice
provided the plaintiff with the opportunity to refile the action in Mississippi, which
had a longer limitations period.
On appeal, Ford argued, among other things, that it had suffered legal
prejudice when the case was dismissed without prejudice because it had lost its
statute-of-limitations defense. Id. Ford further contended that the district court
had abused its discretion in allowing the dismissal because it had failed to
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acknowledge the importance of the loss of Ford’s limitation defense when the
court balanced the equities of the case. Id.
We upheld the district court’s granting of the plaintiff’s motion to dismiss,
stating, “[T]he likelihood that a dismissal without prejudice will deny the
defendant a statute of limitations defense does not constitute plain legal prejudice
and hence should not alone preclude such a dismissal.” Id. at 858. We found
support for this view in our precedent—namely, Durham v. Florida East Coast
Railway Co., 385 F.2d 366. Id. We also noted that “no evidence in the record
[suggested] that [McCants] or her counsel acted in bad faith in filing this action in
Alabama or in filing it more than one year after the accident occurred.” Id. at 859.
Under the circumstances, we concluded that Ford could not be said to have
suffered “any plain legal prejudice other than the prospect of a second lawsuit on
the same set of facts.” Id. Consequently, we determined that the district court did
not abuse its discretion in allowing the dismissal without prejudice because the loss
of a valid statute-of-limitations defense did not alone necessarily constitute a bar to
dismissal without prejudice. Id.
McCants does not require a district court to find a lack of legal prejudice
every time a defendant is potentially stripped of a statute-of-limitations defense.
Rather, McCants and its progeny hold only that the loss of a statute-of-limitations
defense alone does not amount to per se prejudice requiring denial of a voluntary
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dismissal without prejudice. A district court must look to the particular facts of the
case, including, among others, whether the plaintiff’s counsel has acted in bad
faith, and “weigh the relevant equities and do justice between the parties” when
evaluating a motion for a voluntary dismissal under Rule 41(a)(2). McCants, 781
F.2d at 857; Goodwin v. Reynolds, 757 F.3d 1216, 1219 (11th Cir. 2014). Nor is it
a “bar to a voluntary dismissal that the plaintiff may obtain some tactical advantage
over the defendant in future litigation.” Goodwin, 757 F.3d at 1219 (citing
McCants, 781 F.2d at 856-57).
Here, based on our review of the underlying facts, we conclude that the
district court acted well within its discretion when it granted Arias’s motion for
voluntary dismissal. First, the parties here do not dispute that Arias filed her
lawsuit in Georgia state court before the two-year statute of limitations ran.
Second, as explained above, Arias acted diligently in attempting to serve Cameron
and Dow with the summons and complaint. Third, none of the facts of this case
demonstrate bad faith on the part of Arias’s counsel, a factor that should be
examined when considering a motion for voluntary dismissal without prejudice.
Fourth, Defendants’ claimed statute-of-limitations defense is weak, at best. And,
finally, the only reason that Defendants even arguably have a statute-of-limitations
defense is because they removed the case to federal court. Had the case stayed in
Georgia court, where Arias chose to file it, there would have been no question that
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she would have been able to voluntarily dismiss the case and take advantage of
Georgia’s six-month refiling provision. So Defendants effectively “created” the
very statute-of-limitations defense that they now complain that they have been
“stripped” of—a defense that did not even arguably exist until they removed the
case to federal court.
Moreover, although Defendants suggest that Arias should not be able to
avoid the entry of summary judgment by voluntarily dismissing her action, for the
reasons that we have previously discussed, it is surely not certain that summary
judgment was appropriate. And, even if summary judgment were likely, this
circuit has declined to adopt a bright-line rule precluding a district court from
granting a Rule 41(a)(2) voluntary dismissal without prejudice when a motion for
summary judgment is pending. See Pontenberg, 252 F.3d at 1258. As we have
explained, “the mere attempt to avoid an adverse summary judgment ruling in and
of itself, particularly where there is no evidence of bad faith, does not constitute
plain legal prejudice.” Id. The district court’s attachment of conditions to the
dismissal—requiring Arias to pay attorneys’ fees and costs incurred in this
litigation if she refiles—further weighs in favor of affirming the district court’s
voluntary dismissal of the case without prejudice.
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Nor, as Defendants urge, is McCants inconsistent with controlling precedent
in this Circuit.8 Defendants suggest that McCants conflicts with LeCompte v. Mr.
Chip, Inc., 528 F.2d 601 (5th Cir. 1976), and Exxon Corp. v. Maryland Casualty
Co., 599 F.2d 659 (5th Cir. 1979). We disagree.
Neither Exxon nor LeCompte considers or addresses the specific question of
whether the potential loss of a defense upon voluntary dismissal without prejudice
alone constitutes per se “prejudice” to a defendant, requiring denial of a motion for
voluntary dismissal. Rather, these cases use the term “prejudice” in a more general
sense and do not involve the potential loss of a defense upon voluntary dismissal.
In fact, in Exxon, our predecessor court did not even consider a motion for
permissive voluntary dismissal under Rule 41(a)(2). Instead, that case dealt with
dismissal as of right under Rule 41(a)(1). And, to the extent that the Court
discussed prejudice in LeCompte, it relied on Durham v. Florida East Coast
Railway Co., 385 F.2d 366 (5th Cir. 1967). See LeCompte, 528 F.2d at 604.
Durham—a case that predates both Exxon and LeCompte—is entirely
consistent with McCants. In Durham, the plaintiff sued his employer for failure to
8
When circuit authority is in conflict, a panel should look to the line of authority
containing the earliest case because a decision of a prior panel cannot be overturned by a later
panel. Walker v. Mortham, 158 F.3d 1177, 1188-89 (11th Cir. 1998) (citing Johnson v. City of
Fort Lauderdale, 126 F.3d 1372, 1380 n.10 (11th Cir. 1997); Robinson v. Tanner, 798 F.2d
1378, 1383 (11th Cir. 1986) (per curiam); see also Bonner, 661 F.2d at 1209 (holding that
decisions of prior panels are binding on subsequent panels and can be overturned by the court
sitting en banc only)).
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provide a safe workplace. Id. at 367. The defendant pled contributory negligence
as an affirmative defense. Id. When the matter was called for trial, the plaintiff
contended that he had discovered new evidence and moved for leave to amend the
complaint to add a new claim under the Federal Safety Appliance Act, an act under
which the plaintiff may recover without regard to any contributory negligence. Id.
The district court denied the motion for leave to amend, prompting the plaintiff to
move to voluntarily dismiss the suit without prejudice. Id. The trial court denied
the motion and called the case for trial. Id. When counsel announced that he could
not proceed with the trial of the case, the district court dismissed the action with
prejudice. Id. The plaintiff then appealed.
On appeal, the former Fifth Circuit emphasized that dismissing actions with
prejudice was the most severe sanction and should be imposed only when a clear
record of delay or contumacious conduct by the plaintiff exists. Id. at 368 (citation
omitted). Because those circumstances did not exist in Durham, the Court opined
that the “crucial question” in determining whether voluntary dismissal should have
been granted was whether the defendant would lose any substantial right by the
dismissal without prejudice requested by the plaintiff. Id. As the Court explained,
“[D]ismissal should be allowed unless the defendant will suffer some plain legal
prejudice other than the mere prospect of a second law suit. It is no bar to
dismissal that plaintiff may obtain some tactical advantage thereby.” Id. (citation
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and quotation marks omitted). Although a voluntary dismissal would have resulted
in the defendant’s loss of its contributory-negligence defense, the Court concluded
that the record did not disclose any prejudice to the defendant upon the granting of
a voluntary dismissal, other than the annoyance of a second litigation on the same
subject. Id. at 369. So the Court reversed the district court’s dismissal with
prejudice and remanded the case for dismissal of the complaint without prejudice.
Id.
Durham supports our subsequent decision in McCants, where we concluded
that the loss of a statute-of-limitations defense alone does not constitute per se
prejudice requiring denial of a motion for voluntary dismissal. Indeed, our
decision in McCants cited to and relied upon Durham. In short, McCants does not
violate our prior-precedent rule, and we are bound to follow it.
We also respectfully reject Defendants’ contention that McCants should be
limited to its facts. Defendants suggest that McCants should apply to only those
situations where a defendant delays in raising the affirmative defense that it hopes
to preserve against a voluntary dismissal. Because Defendants here raised their
statute-of-limitations defense in a motion to dismiss one week following their
removal of the case to federal court, they assert that McCants should not apply.
But the way in which we framed the issue in McCants reveals that the timing
of the defendant’s assertion of the defense did not drive the result in the case. As
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we described it, the issue in McCants was simply “whether it constitutes an abuse
of discretion for a district court to dismiss without prejudice an action that is time-
barred as brought, where the purpose or effect of such dismissal is to allow the
plaintiff to refile the action in a place or manner in which it is not similarly
barred.” 781 F.2d at 858. Nor did we limit our holding that “the loss of a valid
statute of limitations defense [does not] constitute a bar to a dismissal without
prejudice,” id. at 859, to circumstances where defendants delay in raising their
statute-of-limitations defense. And we decline to so restrict McCants today.
We recognize, as Defendants point out, that other circuits have found clear
legal prejudice to exist when a Rule 41(a)(2) dismissal is granted in the face of a
valid statute-of-limitations defense. See Wojtas v. Capital Guardian Trust Co.,
477 F.3d 924, 927-28 (7th Cir. 2007); Grover ex rel. Grover v. Eli Lilly & Co., 33
F.3d 716, 719 (6th Cir. 1994); Metro. Fed. Bank of Iowa F.S.B. v. W. R. Grace &
Co., 999 F.2d 1257, 1262 (8th Cir. 1993); Phillips v. Illinois Cent. Gulf R.R., 874
F.2d 984, 987 (5th Cir.1989). And we acknowledge that both the Fifth and Eighth
Circuits have expressly announced their disagreement with our decision in
McCants. See Phillips, 874 F.2d at 987; Metro. Fed. Bank of Iowa, 999 F.2d at
1263.
But we are bound by the prior-precedent rule to follow McCants. See Smith
v. GTE Corp., 236 F.3d 1292, 1303 (11th Cir. 2001) (citation and quotation marks
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omitted) (“Under our prior precedent rule, a panel cannot overrule a prior one’s
holding even though convinced it is wrong.”). So even if we disagreed with it, we
would nonetheless be required to be faithful to it. See id.
We do not disagree with McCants, though. Rule 41(a)(2) contemplates that
the district court will weigh the equities in determining how to rule on a motion for
voluntary dismissal. The equities of this case—including the dubious merit of
Defendants’ statute-of-limitations defense, the consistent diligence of Arias, the
apparent attempts by Cameron to evade service, and the fact that Defendants could
not even arguably invoke their statute-of-limitations defense had they not removed
the case from Arias’s chosen forum court in the first place—provide a good
example of why a per se rule prohibiting district courts from allowing dismissals
without prejudice any time that a statute-of-limitations defense might possibly be
lost could significantly undermine the district court’s ability to balance the equities
in ruling on a motion for voluntary dismissal under Rule 41(a)(2).
The fact that McCants does not render loss of a statute-of-limitations defense
per se prejudice does not mean that a party that could suffer the loss of such a
defense upon a voluntary dismissal without prejudice will necessarily be at the
losing end of a motion for voluntary dismissal without prejudice. Rather, McCants
allows for a motion for voluntary dismissal without prejudice to be denied if a
statute-of-limitations defense could be lost, provided that consideration of all of the
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equities in the case warrant such a conclusion. We think that this is the correct
formulation of what Rule 41(a)(2) requires.
Finally, based on all of these considerations, we conclude that the district
court did not abuse its discretion when it granted Arias’s motion for voluntary
dismissal without prejudice under Rule 41(a)(2).
V.
In sum, we conclude that it is unlikely that Defendants had a meritorious
statute-of-limitations defense in the first place. But even if they did, in view of the
equities, the district court did not abuse its discretion in granting Arias’s motion for
voluntary dismissal without prejudice pursuant to Rule 41(a)(2). We therefore
affirm the order of the district court.
AFFIRMED.
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