Santa Rosa Memorial Hospital v. Jennifer Kent , 688 F. App'x 492 ( 2017 )

FILED
NOT FOR PUBLICATION
APR 26 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
SANTA ROSA MEMORIAL HOSPITAL, No. 15-16650
a California corporation; ST. HELENA
HOSPITAL, a California corporation; D.C. No. 3:08-cv-05173-SC
QUEEN OF THE VALLEY MEDICAL
CENTER, a California corporation;
CENTRAL VALLEY GENERAL MEMORANDUM*
HOSPITAL, a California corporation;
SAN JOAQUIN COMMUNITY
HOSPITAL, a California corporation;
SAN ANTONIO COMMUNITY
HOSPITAL, a California corporation;
CHILDREN’S HOSPITAL AT MISSION,
a California corporation, dba as CHOC at
Mission; SADDLEBACK MEMORIAL
MEDICAL CENTER, a California
corporation; ORANGE COAST
MEMORIAL MEDICAL CENTER, a
California corporation; ANAHEIM
MEMORIAL MEDICAL CENTER, a
California corporation; HOAG
MEMORIAL HOSP., a California
corporation; HEART HOSPITAL OF BK,
LLC, a North Carolina limited liability
company, dba Bakersfield Heart Hospital;
JOHN MUIR HEALTH, a California
corporation, dba John Muir Medical
Center-Concord Campus and as John Muir
Medical Center-Walnut Creek Campus;
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
SRM ALLIANCE HOSPITAL
SERVICES, a California corporation dba
Petuluma Valley Hospital; LANCASTER
HOSPITAL CORPORATION, a
California corporation, dba Lancaster
Community Hospital; FOUNTAIN
VALLEY REGIONAL HOSPITAL AND
MEDICAL CENTER, a California
corporation; MISSION HOSPITAL
REGIONAL MEDICAL CENTER, a
California corporation, dba Mission
Hospital,
Plaintiffs-Appellees,
v.
JENNIFER KENT, Director of the
California Department of Health Care
Services,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of California
Samuel Conti, District Judge, Presiding
Submitted April 21, 2017**
San Francisco, California
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2
Before: THOMAS, Chief Judge, MURGUIA, Circuit Judge, and BAYLSON,***
District Judge.
The California Department of Health Care Services (“Department”) appeals
the district court’s dismissal of the action below without prejudice and without an
award of costs and fees. We have jurisdiction pursuant to 28 U.S.C. § 1291, and
we affirm. Because the parties are familiar with the history of this case, we need
not recount it here.
I
The district court did not abuse its discretion by dismissing the action below
without prejudice. “A district court should grant a motion for voluntary dismissal
. . . unless a defendant can show that it will suffer some plain legal prejudice as a
result.” Smith v. Lenches, 263 F.3d 972, 976 (9th Cir. 2001) (citing Waller v. Fin
Corp. of Am., 828 F.2d 579, 583 (9th Cir. 1987)). “‘[L]egal prejudice’ means
‘prejudice to some legal interest, some legal claim, some legal argument.’” Id.(citing Westlands Water Dist. v. United States, 100 F.3d 94, 96 (9th Cir. 1996)).
Plain legal prejudice does not result merely because a dispute remains unresolved,
there is a threat of future litigation, the defendant will be inconvenienced by having
to defend in another forum, or the plaintiff would gain a tactical advantage by that
***
The Honorable Michael M. Baylson, United States District Judge for
the Eastern District of Pennsylvania, sitting by designation.
3
dismissal. Id. (citations omitted). Our analysis instead “focus[es] on the rights and
defenses available to a defendant in future litigation.” Westlands, 100 F.3d at 97.
An unresolved dispute of the kind here or in Zanowick v. Baxter Healthcare
Corporation, 2017 WL 929203 (9th Cir. 2017), does not constitute prejudice. The
Department argues that it lost the ability to litigate the federal issues in federal
court, the claims are continuing in state court, and summary judgment motions
were before the court. However, this does not constitute plain legal prejudice,
especially when the only procedural protection the Department claims it would
lose in state court is the ability to assert the defense of res judicata. See Zanowick,
2017 WL 929203, at *2 n.2, 4 (noting that “while a change from federal to state
court might create a tactical disadvantage to [defendants], that [is] not legal
prejudice” and finding no abuse of discretion when a decision either dismissing
with or without prejudice was well within the court’s ambit) (quoting Smith, 263
F.3d at 976).
Contrary to the Department’s arguments that Santa Rosa Mem’l Hosp. v.
Douglas, 552 F. App’x 637 (9th Cir. 2014), or Exceptional Child Care Center, Inc.
v. Armstrong, __ U.S. __, 135 S.Ct. 1378, 1385 (2015), left the district court no
discretion to dismiss without prejudice, dismissing either with or without prejudice
was well within the court’s ambit. See, e.g., Milgard Tempering, Inc. v. Selas
4
Corp. of Am., 902 F.2d 703, 715 (9th Cir. 1990) (noting “that dicta have no
preclusive effect”) (internal citation omitted); see also WPP Luxembourg Gamma
Three Sarl v. Spot Runner, Inc., 655 F.3d 1039, 1058 (9th Cir. 2011) (“District
courts have broad discretion in deciding . . . whether to dismiss actions with or
without prejudice.”).
Because the district court’s assessment of legal prejudice and its grant of the
motion for voluntary dismissal were not based on an erroneous view of the law or a
clearly erroneous assessment of the facts, the court did not abuse its discretion.
II
The district court did not abuse its discretion when it declined to award costs
and attorney’s fees to the Department. Although costs and attorney’s fees are often
imposed on a plaintiff who is granted a voluntary dismissal, a district court does
not automatically abuse its discretion by refusing to award such costs and fees.
Stevedoring Servs. of Am. v. Armilla Int’l B.V., 889 F.2d 919, 921 (9th Cir. 1989).
“In determining whether to award costs . . . to [a] defendant[] after a voluntary
dismissal without prejudice, courts generally consider the following factors: (1)
any excessive and duplicative expense of a second litigation; (2) the effort and
expense incurred by a defendant in preparing for trial; (3) the extent to which the
litigation has progressed; and (4) the plaintiff’s diligence in moving to dismiss.”
5
Williams v. Peralta Cmty. Coll. Dist., 227 F.R.D. 538, 540 (N.D. Cal. April 28,
2005) (quoting 8 James Wm. Moore et al., Moore’s Federal Practice §
41.40[10][d][I] (3d ed. 1999)). The merits of the plaintiff’s case are also relevant.
Id.; see Stevedoring, 889 F.2d at 922.
The Department has incurred duplicative expenses, and summary judgment
motions were before the court. However, the district court did not abuse its
discretion in refusing to order the payment of the Department’s costs and fees as a
condition precedent to the Plaintiffs’ voluntary dismissal without prejudice. The
district court’s decision is justified by its consideration of the legitimate factor of
the merit of the Plaintiffs’ claims. See Stevedoring, 889 F.2d at 922 (finding that
the plaintiff raised a substantial legal question that, upon adverse determination,
was dispositive of the action sufficient to support a decision to dismiss without
prejudice without payment of attorney’s fees); see also Cerciello v. Blackburn
Truck Lines Holding Co. Inc., 917 F.2d 27, at *2 (9th Cir. 1990) (unpublished)
(citing Stevedoring, 889 F.2d at 920–22).
AFFIRMED.1
1
The Plaintiffs’ motions for judicial notice are GRANTED.
6