Jernard Griggs v. S.G.E. Management, L.L.C.

Case: 17-50655 Document: 00514659215 Page: 1 Date Filed: 09/27/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 17-50655 FILED
September 27, 2018
Lyle W. Cayce
JERNARD GRIGGS, Clerk
Plaintiff - Appellant
v.
S.G.E. MANAGEMENT, L.L.C.; STREAM GAS & ELECTRIC, LIMITED,
doing business as Stream Energy; STREAM S.P.E. G.P., L.L.C; STREAM
S.P.E., LIMITED; IGNITE HOLDINGS, LIMITED, formerly known as Ignite
Energy, Limited, doing business as Ignite, doing business as Ignite Powered
by Stream Energy; CHRIS DOMHOFF; ROB SNYDER; PIERRE KOSHAKJI;
DOUGLAS WITT; STEVE FLORES; MICHAEL TACKER; DONNY
ANDERSON; STEVE FISHER; RANDY HEDGE; LOGAN STOUT;
PRESLEY SWAGERTY,
Defendants - Appellees
Appeal from the United States District Court
for the Western District of Texas
Before STEWART, Chief Judge, and WIENER and HIGGINSON, Circuit
Judges.
WIENER, Circuit Judge:
When Plaintiff-Appellant Jernard Griggs began working as an
Independent Associate (“IA”) for Ignite, he agreed to Ignite’s Policies &
Procedures, which includes an arbitration clause covering all claims between
(1) any two or more IAs and (2) any IA and Ignite. The arbitration clause also
gives the arbitrator the “sole power” to decide questions of arbitrability.
Case: 17-50655 Document: 00514659215 Page: 2 Date Filed: 09/27/2018
No. 17-50655
Despite that, Griggs brought a class action in federal court, asserting RICO
claims against Defendants-Appellees Ignite, Stream, their related entities, and
several other IAs (collectively, “Defendants”). The district court (1) ruled that
the parties had agreed to arbitrate arbitrability; (2) compelled arbitration; and
(3) stayed the case pending arbitration. After the case had been stayed for a
year without Griggs having submitted his claims to arbitration, the court
dismissed the case without prejudice. Griggs appealed; we have appellate
jurisdiction; we affirm.
I. Facts and Proceedings
Stream is a Texas electricity provider that markets its services through
Ignite, its wholly owned subsidiary. Ignite is a multi-level marketing program
that Griggs contends is an illegal pyramid scheme in which the participants
(the IAs) are destined to lose money. 1 This court, sitting en banc, recently
described these entities:
Stream’s marketing arm, Ignite, operates a multi-level marketing
program in which IAs (1) sell energy to customers, and (2) recruit
other individuals to join as IAs who in turn sell energy to
customers and recruit individuals to join as IAs. Under the IA
program, Ignite charges individuals for the right to sell Stream
services to customers and to recruit IAs. 2
In that case, Torres v. S.G.E. Management, several IAs brought a class action
against Stream, Ignite, and several particularly successful IAs. 3 The district
court compelled arbitration, but this court reversed, holding that the
arbitration agreement was unenforceable. 4 The district court, on remand,
1 See Torres v. S.G.E. Mgmt., L.L.C., 838 F.3d 629, 632–33 (5th Cir. 2016) (en banc),
cert. denied, 138 S. Ct. 76 (2017). Griggs refers to these participants as “Ignite Associates.”
2 Id. at 633.
3 Id. at 634; Torres v. S.G.E. Mgmt., L.L.C., 397 F. App’x 63, 64 (5th Cir. 2010).
4 Torres, 397 F. App’x at 68.
2
Case: 17-50655 Document: 00514659215 Page: 3 Date Filed: 09/27/2018
No. 17-50655
certified a class, but only for those IAs who had joined Ignite between January
1, 2005 and April 2, 2011. 5 The court explained that Ignite had amended the
arbitration clause required for new IAs, effective April 3, 2011, eliminating the
defect. 6 This court upheld class certification en banc. 7
Griggs joined Ignite as an IA on March 22, 2012, obviously after the
amended arbitration clause took effect. When Griggs became an IA, he agreed
to Ignite’s “Policies & Procedures” and “Terms & Conditions.” Those two
documents and a third one titled the “Compensation Plan,” were parts of the
Independent Associate Agreement (“Agreement”). The Compensation Plan is
not in the record. The Policies & Procedures states that if it conflicts with
another part of the Agreement, the Policies & Procedures controls.
The Policies & Procedures contains a provision requiring arbitration of
“any claim, dispute or other difference between two or more IAs or between
any IA(s) and Ignite or its affiliates, or any other claim or dispute of any kind
arising under or in any way related to these Policies & Procedures or any other
part of the [Agreement].” Its arbitration clause incorporates the rules of the
American Arbitration Association and states that “the arbitrator will have the
sole power to decide any question about the arbitrability of any claim.”
In May 2015, Griggs sued the various entities comprising Stream and
Ignite, as well as several individuals who were either employees of Stream and
Ignite or “Presidential Directors.” Presidential Directors are IAs “at the very
top of the pyramid” who have been financially successful as a result of Ignite.
Griggs alleged violations of the Racketeer Influenced and Corrupt
5 Torres v. SGE Mgmt. LLC, No. 4:09-CV-2056, 2014 WL 129793, at *10 (S.D. Tex.
Jan. 13, 2014), aff’d, 838 F.3d 629 (5th Cir. 2016) (en banc).
6 Id.
7 See Torres, 838 F.3d at 646.
3
Case: 17-50655 Document: 00514659215 Page: 4 Date Filed: 09/27/2018
No. 17-50655
Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq. Defendants moved to
compel arbitration, and the magistrate judge issued a report and
recommendation concluding that the arbitration agreement was valid and that
the parties had agreed to arbitrate arbitrability. 8 The district court granted
the motion to compel arbitration and stayed the case pending arbitration. 9
The case remained stayed for more than a year, during which time
Griggs refused to arbitrate. The district court ordered Griggs to show cause
why the case should not be dismissed for want of prosecution. Griggs
responded:
Griggs anticipated that this Court would have already dismiss[ed]
this case for want of prosecution because this Court left him only
an arbitration which he has not pursued. So, Griggs states the
following for the Court’s consideration:
1. Griggs understands and appreciates this Court’s
order compelling arbitration. Griggs believes
that the Court cons[idered] all arguments before
it ruled.
2. However, Griggs disagrees with this Court’s
conclusion that this matter must go to
arbitration.
3. Griggs will not pursue arbitration.
4. Griggs stands ready to litigate this case before
this Court to a conclusion.
8 Griggs v. SGE Mgmt., LLC, No. A-15-CV-422-LY-ML, 2015 WL 11423656, at *4–8
(W.D. Tex. Oct. 15, 2015).
9 The district court adopted the magistrate judge’s recommendation in its entirety.
Griggs v. SGE Mgmt., LLC, No. 1:15-CV-422-LY, 2015 WL 11438110, at *1–2 (W.D. Tex. Nov.
4, 2015).
4
Case: 17-50655 Document: 00514659215 Page: 5 Date Filed: 09/27/2018
No. 17-50655
...
Griggs and his counsel mean no offense to this Court. However,
they respectfully disagree with the Court’s arbitration order and
Griggs will either litigate this matter now before this Court or will
appeal when dismissed.
The district court then dismissed the case without prejudice, and Griggs
appealed.
II. ANALYSIS
Two issues are presented in this appeal: (1) whether there is appellate
jurisdiction and (2) whether the district court was within its discretion to
dismiss the case for failure to prosecute. We address each issue in turn.
A. Appellate Jurisdiction
A plaintiff seeking to appeal an order compelling arbitration may only
do so if that order is a “final decision with respect to an arbitration.” 10 A final
decision is one that “ends the litigation on the merits and leaves nothing more
for the court to do but execute the judgment.” 11 When “the District Court has
ordered the parties to proceed to arbitration, and dismissed all the claims
before it, that decision is ‘final’ within the meaning of § 16(a)(3), and therefore
appealable.” 12 In contrast, if a district court orders that a case be stayed
pending arbitration instead of dismissing it, that order is not appealable. 13
Some circuits have held that district courts must stay a case when all claims
10 9 U.S.C. § 16(a)(3).
11 Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 86 (2000) (quoting Dig. Equip.
Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867 (1994); Coopers & Lybrand v. Livesay, 437
U.S. 463, 467 (1978)).
12 Green Tree, 531 U.S. at 89.
13 9 U.S.C. § 16(b)(1); Green Tree, 531 U.S. at 87 n.2.
5
Case: 17-50655 Document: 00514659215 Page: 6 Date Filed: 09/27/2018
No. 17-50655
are submitted to arbitration, but this circuit allows district courts to dismiss
such claims outright. 14
1. Voluntary Dismissal Under Rule 41(a)
Defendants contend that Griggs voluntarily dismissed the case under
Federal Rule of Civil Procedure 41(a). A voluntary dismissal of a case without
prejudice is not a final appealable decision. 15 Griggs contests whether the
dismissal was voluntary, explaining that he never invoked Rule 41(a).
There are three forms of voluntary dismissal under that Rule. The record
does not indicate that all parties stipulated to dismissal. 16 Defendants had not
answered or moved for summary judgment, so a court order was not required
for Griggs to dismiss the case. 17 The question then is whether Griggs’s response
to the show-cause order amounts to a voluntary dismissal under Rule
41(a)(1)(i), which allows a plaintiff to dismiss an action by filing a notice of
dismissal.
There is limited authority describing the notice requirements for a
plaintiff to dismiss a case under Rule 41(a)(1)(i). 18 It is clear, however, that “[a]
notice of dismissal is self-effectuating and terminates the case in and of itself;
no order or other action of the district court is required.” 19 In Bierman v.
14 Compare Katz v. Cellco P’ship, 794 F.3d 341, 345–47 (2d Cir. 2015), with Alford v.
Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992).
15 Marshall v. Kan. City S. Ry. Co., 378 F.3d 495, 499–500 (5th Cir. 2004) (citing Ryan
v. Occidental Petroleum Corp., 577 F.2d 298 (5th Cir. 1978)).
16 See Fed. R. Civ. P. 41(a)(1)(ii).
17 See Id. R. 41(a)(2).
18 This court has expounded somewhat on the requirements for a stipulated dismissal
under Rule 41(a)(1)(ii), explaining that it can be an oral dismissal, despite that Rule’s
requirement that a dismissal be filed with the court. Oswalt v. Scripto, Inc., 616 F.2d 191,
195 (5th Cir. 1980). But this court has also held that an informal statement that a party
would not pursue one claim was not sufficient to stipulate to dismissal of that claim. G.A.
Thompson & Co. v. Partridge, 636 F.2d 945, 951–52 (5th Cir. 1981).
19 Bechuck v. Home Depot U.S.A., Inc., 814 F.3d 287, 291 (5th Cir. 2016) (quoting In
re Amerijet Int’l, Inc., 785 F.3d 967, 973 (5th Cir. 2015) (per curiam)).
6
Case: 17-50655 Document: 00514659215 Page: 7 Date Filed: 09/27/2018
No. 17-50655
Tampa Electric Co., the district court ordered the plaintiff to file quarterly
status reports, warning that if he did not, the court would dismiss the
complaint. 20 After the plaintiff failed to comply and the court dismissed the
case, the plaintiff insisted that his failure to file the reports amounted to a Rule
41(a) notice of dismissal. 21 This court disagreed, explaining that the order
specifically stated that the case was dismissed for want of prosecution and
therefore was not voluntary. 22
In Vincent v. A.C. & S., Inc., the plaintiff informed the district court that
he had settled with the defendants. After that, the court ordered that the case
would be dismissed without prejudice on stipulation of the parties, but could
be reopened in ninety days if the settlement was not “consummated.” 23 The
parties stipulated to dismissal more than four months later. 24 This court stated
on appeal that the earlier order was not a voluntary dismissal, but rather “a
tentative termination of the . . . suit.” 25 By informing the court that the case
had settled, the plaintiff did not “instigate[] dismissal.” 26 These cases indicate
that a plaintiff’s inaction is not sufficient to dismiss a case voluntarily.
Here, after the district court compelled arbitration and stayed the case
in November 2015, the parties submitted a status report in February 2016,
notifying the court that Griggs had not submitted the dispute to arbitration.
More than a year later, the court again ordered a status report, and the parties
confirmed in June 2017 that Griggs still had not submitted the case to
arbitration. The court then ordered Griggs to show cause why it should not
20 604 F.2d 929, 930 (5th Cir. 1979).
21 Id.
22 Id. at 931.
23 833 F.2d 553, 554 (5th Cir. 1987).
24 Id. at 555.
25 Id.
26 Id. at 556.
7
Case: 17-50655 Document: 00514659215 Page: 8 Date Filed: 09/27/2018
No. 17-50655
dismiss the case “for want of prosecution.” Griggs responded that he
“disagree[d] with th[e] Court’s conclusion that this matter must go to
arbitration,” and informed the court that he would not “pursue” arbitration.
He added that he “st[ood] ready to litigate this case[.]” Finally, Griggs stated
“[d]ifferent district courts do not stay, but dismiss, allowing the plaintiff to
appeal an order of arbitration. . . . Griggs will either litigate this matter now
before this Court or will appeal when dismissed.”
These statements do not serve as a notice of dismissal, but rather are
statements of inaction. If the district court had not dismissed the case, it is
unlikely that the parties would have understood that Grigg’s response to the
show-cause order dismissed the case. Because that response was not a “self-
effectuating” 27 notice of dismissal, it was not a voluntary dismissal under Rule
41(a).
2. Dismissal Without Prejudice
We thus must determine whether the district court’s dismissal without
prejudice supports appellate jurisdiction. 28 This court has not expressly
addressed whether a Rule 41(b) dismissal without prejudice is an appealable
order, but it has exercised jurisdiction over appeals from such orders. 29
Rule 41 contemplates that some dismissals might not fall “under this
rule,” 30 so the question remains whether the fact that the dismissal was
without prejudice itself deprives the court of jurisdiction. Several unpublished
opinions of this court have held that a dismissal without prejudice is a final
Bechuck, 814 F.3d at 291 (quoting Amerijet, 785 F.3d at 973).
27
Castaneda v. Falcon, 166 F.3d 799, 801 (5th Cir. 1999) (“We must always be sure of
28
our appellate jurisdiction and, if there is doubt, we must address it, sua sponte if necessary.”).
29 See, e.g., Martinez v. Johnson, 104 F.3d 769, 771–72 (5th Cir. 1997); Boazman v.
Econ. Lab., Inc., 537 F.2d 210, 212–13 (5th Cir. 1976).
30 Fed. R. Civ. P. 41(b).
8
Case: 17-50655 Document: 00514659215 Page: 9 Date Filed: 09/27/2018
No. 17-50655
decision if all that is left for the plaintiff to do is to submit the claim to
arbitration. 31 The Third, Ninth, and Eleventh Circuits have reached the same
conclusion. 32
In Green Tree Financial Corp.-Alabama v. Randolph, the Supreme Court
did not distinguish between dismissals with and without prejudice when
holding that a decision “order[ing] the parties to proceed to arbitration, and
dismiss[ing] all the claims before it, . . . is ‘final’ within the meaning of
31 See, e.g., Westlake Styrene Corp. v. P.M.I. Trading, Ltd., 71 F. App’x 442, 442 (5th
Cir. 2003) (“The dismissal without prejudice ended the litigation on the merits, by sending
all the issues to arbitration and leaving the district court nothing more to do than execute
the judgment. Thus, it was a final decision, and we have appellate jurisdiction.”); Brandom
v. Gulf Coast Bank & Tr. Co., 253 F.3d 706 (5th Cir. 2001) (unpublished) (“A district court
order compelling arbitration and dismissing a party’s underlying claims is immediately
appealable because it is a ‘final decision with respect to an arbitration’ within the meaning
of the Federal Arbitration Act.”). See also Inv. Partners, L.P. v. Glamour Shots Licensing,
Inc., 298 F.3d 314, 316 (5th Cir. 2002) (“[W]e conclude that appellate jurisdiction exists
because Investment Partners seeks to void the entire arbitration clause on public policy
grounds, albeit by means of attacking the remedy provision, and the Supreme Court disposed
of a similar argument, without submitting the issue first to the arbitrators, in [Green Tree].”);
Hirras v. Nat’l R.R. Passenger Corp., 10 F.3d 1142, 1144 n.2 (5th Cir. 1994) (“While an order
dismissing a complaint ‘without prejudice’ usually is not appealable because the plaintiff may
file an amended complaint, the district court’s order in this case is final and appealable
because no amendment is possible. ‘Without prejudice’ here simply meant without detriment
to [the plaintiff’s] ability to present the claims to an arbitrator.”), vacated on other grounds
by 512 U.S. 1231 (1994).
32 Hill v. Rent-A-Center, Inc., 398 F.3d 1286, 1288 (11th Cir. 2005) (“Contrary to the
defendant’s argument that the district court order is not appealable because it had dismissed
Hill’s case without prejudice to reinstatement if arbitration was not completed successfully,
the order was clearly a ‘final order’ insofar as compelled arbitration is concerned.”); Blair v.
Scott Specialty Gases, 283 F.3d 595, 602 (3d Cir. 2002) (“We conclude that even though the
District Court’s order dismissed this case without prejudice and directed the parties to
proceed with arbitration, the order was final and appealable.”); Interactive Flight Techs., Inc.
v. Swissair Swiss Air Transp. Co., 249 F.3d 1177, 1179 (9th Cir. 2001) (“[T]he district court’s
order and judgment sufficiently show that the court intended to close this case without
precluding the parties from bringing a new action after completing arbitration. It is only in
this sense that the dismissal was ‘without prejudice,’ and that is not enough to show that the
dismissal was interlocutory rather than an appealable final decision.” (citing Green Tree, 513
U.S. at 86–87)).
9
Case: 17-50655 Document: 00514659215 Page: 10 Date Filed: 09/27/2018
No. 17-50655
§ 16(a)(3), and therefore appealable.” 33 The Court explained that the Federal
Arbitration Act contemplates further proceedings after a dismissal for the
court “to enter judgment on an arbitration award,” which does not disturb
finality. 34 The Court has recently explained that finality is “given a practical
rather than a technical construction.” 35
Defendants rely on the Supreme Court’s decision in Microsoft v. Baker
and a recent Fourth Circuit decision, Keena v. Groupon, Inc., to support their
contention that a plaintiff may not appeal an order compelling arbitration
merely by convincing the district court to dismiss the case. 36 In Microsoft, the
plaintiffs filed individual claims and class allegations against Microsoft. The
district court struck the class allegations, “effectively declining to certify the
class.” 37 The Ninth Circuit denied the plaintiffs permission to appeal that
decision under Rule 23(f). The plaintiffs then stipulated to a voluntary
dismissal, with prejudice, of their individual claims. On appeal following the
voluntary dismissal, the plaintiffs sought a reversal of the district court’s order
striking the class allegations. The Ninth Circuit held that the voluntary
dismissal was an appealable final decision and vacated the district court’s
denial of class certification. The Supreme Court reversed, rejecting the
plaintiffs’ “voluntary-dismissal tactic” on the ground that the plaintiffs’ appeal
33 Green Tree, 531 U.S. at 89; see also Blair, 283 F.3d at 602 (“Green Tree . . . does not
draw any distinctions within the universe of dismissals.”).
34 Green Tree, 531 U.S. at 86.
35 Microsoft Corp. v. Baker, 137 S. Ct. 1702, 1712 (2017) (quoting Eisen v. Carlisle &
Jacquelin, 417 U.S. 156, 171 (1974)); cf. Ameser v. Nordstrom Inc., 368 F. App’x 504, 507 (5th
Cir. 2010) (“[T]his court’s determination of its jurisdiction over a dismissal or denial without
prejudice to refile varies depending on the circumstances[.] . . . Each case requires an
examination of the finality of the underlying order.”).
36 Microsoft, 137 S. Ct. at 1715; Keena v. Groupon, Inc., 886 F.3d 360, 364 (4th Cir.
2018).
37 Microsoft, 137 S. Ct. at 1717 (Thomas, J., concurring).
10
Case: 17-50655 Document: 00514659215 Page: 11 Date Filed: 09/27/2018
No. 17-50655
sought review of the “inherently interlocutory” order striking the class
allegations, not the review of final order dismissing the case. 38 The Court
explained that 28 U.S.C. § 1291’s “firm final-judgment rule is not satisfied
whenever a litigant persuades a district court to issue an order purporting to
end the litigation.” 39 “Because [this] dismissal device subverts the final-
judgment rule and the process Congress has established for refining that rule
and for determining when nonfinal orders may be immediately appealed, . . .
the tactic does not give rise to a ‘final decision’ under § 1291.” 40
The plaintiff in Keena brought a class action against Groupon, which
then moved to enforce an arbitration clause. The district court ordered the
parties to arbitrate and stayed the case pending arbitration. 41 A few weeks
later, the plaintiff moved to amend that order, seeking dismissal with prejudice
and “advis[ing] the court that she would not pursue arbitration because the
costs of that process outweighed the potential recovery.” 42 The district court
agreed to amend the order and dismissed the case with prejudice. The Fourth
Circuit, comparing these facts to the tactic in Microsoft, explained that “Keena
unsuccessfully sought the district court’s certification of an interlocutory
appeal. Then, in another creative ‘voluntary-dismissal tactic,’ Keena’s lawyer
sought to preempt the denial of interlocutory review by voluntarily dismissing
Keena’s complaint with prejudice.” 43 The “voluntary-dismissal tactic also
fail[ed] to account for the longstanding principle that a party is not entitled to
38 Id. at 1715 (majority op.) (quoting Camesi v. Univ. of Pitt. Med. Ctr., 729 F.3d 239,
244 (3d Cir. 2013)).
39 Id. at 1715
40 Id. at 1712.
41 Keena, 886 F.3d at 362.
42 Id.
43 Id.at 364.
11
Case: 17-50655 Document: 00514659215 Page: 12 Date Filed: 09/27/2018
No. 17-50655
appeal from a consensual dismissal of her claims.” 44 The Fourth Circuit held
that it did not have appellate jurisdiction because the dismissal order was not
an appealable final decision under § 1291. 45
Those two cases are distinguishable from this one. Microsoft involved a
tactic to avoid Rule 23(f)’s procedure governing appeals of class-certification
decisions. The plaintiff in Keena sought a voluntary dismissal with prejudice
after the district court had stayed the case.
Here, unlike the “inherently interlocutory” nature of class-certification
decisions discussed in Microsoft, the district court’s dismissal in favor of
arbitration does not raise a concern about “piecemeal appeals” because the
dismissal ended the litigation on the merits. 46 And, unlike Microsoft and
Keena, the instant dismissal was not voluntary, as we discussed in the
preceding section. Griggs stated that he “stands ready to litigate this case
before this Court to a conclusion” and “will either litigate this matter now
before this Court or will appeal when dismissed.” Those statements of inaction
do not amount to a “voluntary-dismissal tactic” or a “consensual” dismissal of
Griggs’s claims. 47
44 Id. at 365.
45 Id.
46 See Microsoft, 137 S. Ct. at 1707 (“The tactic would undermine § 1291’s firm finality
principle, designed to guard against piecemeal appeals, and subvert the balanced solution
Rule 23(f) put in place for immediate review of class-action orders.”); id. at 1715 (“Plaintiffs
in putative class actions cannot transform a tentative interlocutory order . . . into a final
judgment within the meaning of § 1291 simply by dismissing their claims with prejudice.”
(emphasis added)); id. (“The one-sidedness of respondents’ voluntary-dismissal device
‘reinforce[s] our conclusion that [it] does not support appellate jurisdiction of prejudgment
orders denying class certification.’” (quoting Coopers & Lybrand, 437 U.S. at 476)).
47 Keena, 886 F.3d at 365 (“Keena’s voluntary-dismissal tactic also fails to account for
the longstanding principle that a party is not entitled to appeal from a consensual dismissal
of her claims.”).
12
Case: 17-50655 Document: 00514659215 Page: 13 Date Filed: 09/27/2018
No. 17-50655
The district court made clear over the course of a year and a half that it
would take no action in this case. If Griggs took the court’s dismissal without
prejudice as an invitation simply to re-file, he would have obtained the same
result. The district court’s action “ended the litigation on the merits, by sending
all the issues to arbitration and leaving the district court nothing more to do
than execute the judgment. Thus, its order was a final decision, and we have
appellate jurisdiction.” 48
B. Dismissal for Failure to Prosecute
Rule 41(b) authorizes the district court to dismiss an action sua sponte
for failure to prosecute or comply with a court order. 49 We review for abuse of
discretion. 50 When a dismissal is without prejudice but “the applicable statute
of limitations probably bars future litigation, our examination is searching,
and we review the dismissal as we would a dismissal with prejudice.” 51 Neither
party’s briefing discusses whether the heightened standard applies in this
case. Even under the more exacting standard, however, Defendants would
prevail.
Dismissal with prejudice is appropriate only when there is “a showing of
(a) a clear record of delay or contumacious conduct by the plaintiff, and (b)
where lesser sanctions would not serve the best interests of justice.” 52 “In most
48 Westlake Styrene Corp., 71 F. App’x at 442; see Green Tree, 531 U.S. at 521 (“We
therefore conclude that where, as here, the District Court has ordered the parties to proceed
to arbitration, and dismissed all the claims before it, that decision is ‘final’ within the
meaning of § 16(a)(3), and therefore appealable.”).
49 McCullough v. Lynaugh, 835 F.2d 1126, 1127 (5th Cir. 1988).
50 Bryson v. United States, 553 F.3d 402, 403 (5th Cir. 2008).
51 Nottingham v. Warden, Bill Clements Unit, 837 F.3d 438, 441 (5th Cir. 2016) (citing
Coleman v. Sweetin, 745 F.3d 756, 766 (5th Cir. 2014) (per curiam) (internal quotation
omitted)).
52 Gates v. Strain, 885 F.3d 874, 883 (5th Cir. 2018) (quoting Morris v. Ocean Sys.,
Inc., 730 F.2d 248, 252 (5th Cir. 1984)).
13
Case: 17-50655 Document: 00514659215 Page: 14 Date Filed: 09/27/2018
No. 17-50655
cases, a plain record of delay or contumacious conduct is found if one of the
three aggravating factors is also present: (1) delay caused by the plaintiff; (2)
actual prejudice to the defendant; or (3) delay as a result of intentional
conduct.” 53 Here, there is a clear record of intentional delay and contumacious
conduct.
After the district court granted Defendants’ motion to compel arbitration
and stayed the case, Griggs persistently refused to arbitrate as ordered.
Specifically, a status report submitted three months after the arbitration order
stated: “Plaintiff has not submitted the case to arbitration.” More than a year
after that, another status report explained that “plaintiff has not submitted
the dispute to arbitration.” When the district court ordered Griggs to show
cause why the case should not be dismissed “for want of prosecution” he
responded that he “disagree[d] with this Court’s conclusion that this matter
must go to arbitration,” “[would] not pursue arbitration,” and “[stood] ready to
litigate this case before this Court to a conclusion.” The district court was well
within its discretion to dismiss this case for want of prosecution in response to
Griggs’s disobedience to its prior order. 54
53 Stearman v. Comm’r, 436 F.3d 533, 535 (5th Cir. 2006) (citing Tello v. Comm’r, 410
F.3d 743, 744 (5th Cir. 2005), cert. denied, 546 U.S. 873 (2005)).
54 Generally, “[u]nder the final judgment appealability rule, a party may obtain review
of prejudicial adverse interlocutory rulings upon his appeal from adverse final judgment, at
which time the interlocutory rulings (nonreviewable until then) are regarded as merged into
the final judgment terminating the action.” Dickinson v. Auto Ctr. Mfg. Co., 733 F.2d 1092,
1102 (5th Cir. 1983) (citing 9 Moore’s Federal Practice, ¶ 110.07 (2d ed. 1974)). However, in
the context of dismissal for failure to prosecute, courts prudently decline to review adverse
interlocutory rulings because the matter under review is the dismissal itself. Thus, in Ash v.
Cvetkov, the Ninth Circuit explained:
We are of the opinion that the general rule should not apply in this
situation . . . It would be unwise to encourage all would-be appellants from
interlocutory orders to delay for the purpose of dismissal for lack of prosecution
and review of otherwise unreviewable decisions. . . . [T]he sufferance of
dismissal without prejudice because of failure to prosecute is not to be
14
Case: 17-50655 Document: 00514659215 Page: 15 Date Filed: 09/27/2018
No. 17-50655
III. CONCLUSION
The district court’s dismissal without prejudice is AFFIRMED.
employed as an avenue for reaching issues which are not subject to
interlocutory appeal as of right.
739 F.2d 493, 497 (9th Cir. 1984) (emphasis added); see also Shannon v. Gen. Elec. Co., 186
F.3d 186, 192 (2d Cir. 1999) (Sotomayor, J.) (embracing the “general rule that interlocutory
orders do not properly merge with a final judgment dismissing an action for failure to
prosecute”); John’s Insulation, Inc. v. L. Addison & Assocs., Inc., 156 F.3d 101, 105 (1st Cir.
1998) (applying the “majority rule” that “interlocutory rulings do not merge into a judgment
of dismissal for failure to prosecute”); Marshall v. Sielaff, 492 F.2d 917, 919 (3d Cir. 1974)
(“If a litigant could refuse to proceed whenever a trial judge ruled against him, wait for the
court to enter a dismissal for failure to prosecute, and then obtain review of the judge's
interlocutory decision, the policy against piecemeal litigation and review would be severely
weakened.”); DuBose v. Minn., 893 F.2d 169, 171 (8th Cir. 1990) (citations omitted) (“Allowing
use of such an avenue would circumvent the policy against piecemeal litigation and review.”);
Knoll v. Am. Tel. & Tel. Co., 176 F.3d 359, 366 (6th Cir. 1999) (holding that the court “need
not review” interlocutory rulings “[i]n light of” the conclusion that the district court did not
abuse its discretion in dismissing plaintiff’s action for lack of prosecution and citing DuBose).
Such an approach is particularly appropriate here because Griggs should not be
permitted, through recalcitrance, to obtain the review of the arbitration clause that he was
expressly denied in the district court, a review that Congress has foreclosed under the
Federal Arbitration Act. See 9 U.S.C. § 16(b) (disallowing appeal to be taken from an
interlocutory order compelling arbitration); see also Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 22 (1983) (noting the “statutory policy of rapid and unobstructed
enforcement of arbitration agreements”).
15