JRA Architects & Project Managers, P.S.C. v. First Financial Group, Inc.

Not for Publication in West's Federal Reporter
United States Court of Appeals
For the First Circuit
No. 09-2443
JRA ARCHITECTS & PROJECT MANAGERS, P.S.C., ET AL.,
Plaintiffs, Appellees,
v.
FIRST FINANCIAL GROUP, INC., ET AL.,
Defendants,
_____________________
NILSA ORTÍZ-ALVARADO,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Francisco A. Besosa, U.S. District Judge]
Before
Lipez, Howard and Thompson,
Circuit Judges.
Alfredo Castellanos, Dayra Amill-Acosta and Castellanos &
Castellanos Law Firm, P.S.C., on brief for appellant Nilsa Ortíz-
Alvarado.
Jorge J. Oppenheimer-Méndez, Oppenheimer-Soltero Retirement
Plan Trust and Julie Soltero-Rinaldi on brief for appellees.
May 21, 2010
Per Curiam. This appeal arises from the district court's
allowance of the plaintiffs' voluntary dismissal--without prejudice
and without any conditions--of the complaints in two consolidated
cases. The sole appellant, Nilsa Ortíz-Alvarado ("Ortíz"), is a
defendant in both cases.
Where, as here, a defendant has answered the complaint or
moved for summary judgment,1 a plaintiff cannot unilaterally
dismiss an action without court approval "on terms that the court
considers proper." Fed. R. Civ. P. 41(a)(2). The purpose of
requiring such approval is to ensure that "'no other party will be
prejudiced.'" Doe v. Urohealth Sys., Inc., 216 F.3d 157, 160 (1st
Cir. 2000) (quoting P.R. Mar. Shipping Auth. v. Leith, 668 F.2d 46,
50 (1st Cir. 1981)). Accordingly, in ruling on a motion for
voluntary dismissal, "[t]he district court is responsible . . . for
exercising its discretion to ensure that such prejudice will not
occur." Id.In exercising that discretion, "courts typically look to
'the defendant's effort 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 the fact that a motion for summary judgment
has been filed by the defendant.'" Id. (quoting Pace v. S. Express
1
Ortíz filed an answer in both cases and a motion for summary
judgment in the JRA case.
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Co., 409 F.2d 331, 334 (7th Cir. 1969)). Although "courts need not
analyze each factor or limit their consideration to these factors,"
id. (citing Tyco Labs., Inc. v. Koppers Co., 627 F.2d 54, 56 (7th
Cir. 1980)), they serve as "a guide for the trial judge, in whom
the discretion ultimately rests." Tyco, 627 F.2d at 56.
This court's review of a district court's approval of a
voluntary dismissal is for abuse of discretion, Doe, 216 F.3d at
160, which can occur not only by failing to consider a significant
factor, relying on an improper factor, or making a serious mistake
in weighing the applicable factors, but also by failing to exercise
its discretion at all. Janney Montgomery Scott LLC v. Tobin, 571
F.3d 162, 166 (1st Cir. 2009) (so holding with respect to a
discretionary award of attorneys' fees). Where, as here, the
district court provides no explanation for dismissing a case
without prejudice and without imposing any conditions on the moving
party, such as paying the opposing party's attorneys' fees or
costs, and no reason for doing so is apparent from the record, this
court cannot assess whether an abuse of discretion has occurred.
Bridgeport Music, Inc. v. Universal-MCA Music Publ'g, Inc., 481
F.3d 926, 930-931 (6th Cir. 2007); Conafay by Conafay v. Wyeth
Labs., 793 F.2d 350, 354 (D.C. Cir. 1986). Indeed, "the best we
can do [under those circumstances] is to conclude that the district
court abused its discretion by not exercising it," Janney, 571
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F.3d at 166, and to remand for explicit consideration of the
appropriate factors, Urohealth, 216 F.3d at 163.
If, instead, the district court had provided "some
indication" of its reasons for rejecting Ortíz's colorable
arguments for dismissing the case with, rather than without,
prejudice or for imposing conditions on the dismissal to ensure
that she is not unduly prejudiced by the dismissal, then remand
would not be required. Bridgeport Music, 481 F.3d at 931; In re
Bayshore Ford Truck Sales, Inc., 471 F.3d 1233, 1259 (11th Cir.
2006). Citing relevant factors--her considerable expense in
actively defending the cases, the plaintiffs' relative lack of
diligence, the pendency of dispositive motions in both cases, and
the inadequacy of the plaintiffs' reasons for seeking dismissal--
Ortíz argued below that the cases should be dismissed with
prejudice or with conditions, and she presses those arguments on
appeal. Those arguments may, or may not, be sound in the
circumstances of these cases, and other factors may weigh in favor
of dismissal without prejudice or conditions. But the district
court, which was actively involved in the management of these
complex cases, is in a better position to apply and weigh such
factors, at least in the first instance.
The voluntary dismissals are vacated, and the case is
remanded to the district court for further proceedings. Each party
shall bear its own costs.
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