Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-03169/USCOURTS-cand-3_05-cv-03169-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Injunctive &amp; Declaratory Relief

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

HUNTER LANDERS, an individual residing

in California,

Plaintiff,

 v.

CURRAN & CONNORS, INC., a Delaware

corporation and DOES 1 through 50, inclusive,

Defendants. /

No. C 05-03169 WHA

ORDER GRANTING IN PART

AND DENYING IN PART

MOTION TO ALTER JUDGMENT 

AND VACATING HEARING

INTRODUCTION

In this diversity action for declaratory and injunctive relief pursuant to California

Business and Professions Code §§ 16600 and 17200, this Court previously granted summary

judgment to defendant Curran & Connors, Inc. on grounds that the action was moot. Plaintiff

Hunter Landers now moves pursuant to FRCP 59(e) to alter the judgment. Plaintiff has not

demonstrated any grounds to vacate the judgment, but has demonstrated that defendant should

not be declared the prevailing party for purposes of costs and attorney’s fees. His motion,

therefore, is GRANTED IN PART AND DENIED IN PART.

STATEMENT

The facts underlying this litigation are discussed in more detail in the Court’s order

dated February 2, 2006, granting C & C’s motion for summary judgment. In brief, this suit

began as an attempt by plaintiff to invalidate an anti-competition covenant in an employment

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For the Northern District of California

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agreement with his former employer, C & C. After resigning, plaintiff took employment in the

California office of Creative Strategy Group, Inc., a competitor to C & C.

Defendant initially provided ambiguous statements about whether it planned to enforce

the covenant to prevent Landers from engaging in competitive activities outside of California. 

At the hearing on the summary-judgment motion, however, defense counsel categorically

committed to the position that defendant would not so enforce the covenant. Defense counsel

stated that defendant would not seek to enforce the anti-competition covenant anywhere or

anytime and that Landers was free to solicit or accept clients anywhere in the world. Defense

counsel also confirmed that C & C would not seek to restrict Landers’ use of certain vendors

that C & C also uses. Finally, defense counsel indicated that C & C had no intention of

bringing claims against plaintiff for misappropriation of trade secrets, although defense counsel

reserved the right to pursue such claims should a violation occur.

On the basis of defense counsel’s representations, the February order found that

plaintiff’s complaint was moot and summary judgment for C & C was granted. Judgment was

entered accordingly on February 2, 2006 (Judgment at 1):

For the reasons stated in the accompanying order granting

summary judgment, FINAL JUDGMENT IS HEREBY ENTERED in

favor of defendant Curran & Connors, Inc. and against plaintiff

Hunter Landers. The Clerk SHALL CLOSE THE FILE.

Plaintiff now moves to modify that judgment. He requests that the judgment be

amended to read (Br. 1):

For the reasons stated in the accompanying order granting

summary judgment, FINAL JUDGMENT IS HEREBY ENTERED, and

the Complaint of plaintiff Hunter Landers is dismissed without

prejudice as moot, there no longer being any case or controversy. 

The Clerk SHALL CLOSE THE FILE.

ANALYSIS

Plaintiff seeks (1) to have the dismissal be without prejudice and (2) to find that

defendant was not the prevailing party.

1. LEGAL STANDARD.

Relief under FRCP 59(e) is “an extraordinary remedy, to be used sparingly in the

interests of finality and conservation of judicial resources.” Carroll v. Nakatani, 342 F.3d 934,

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945 (9th Cir. 2003). A motion under FRCP 59(e) “should not be granted, absent highly unusual

circumstances, unless the district court is presented with newly discovered evidence, committed

clear error, or if there is an intervening change in the controlling law.”

2. APPLICATION.

Plaintiff’s instant motion does not provide such “highly unusual circumstances”

favoring relief.

First, defendant seeks to have the judgment provide that his action was “dismissed

without prejudice.” As an initial matter, there is no such thing as a judgment for dismissal

without prejudice. It is inconsistent with the definition of a judgment. See Fed. R. Civ.

Proc. 54(a). If plaintiff is correct that the dismissal should have been without prejudice then the

judgment would have to be vacated.

But plaintiff is not correct. According to plaintiff, where a court dismisses an action as

moot, it must be without prejudice. There is no such rule. “Some cases—mainly involving

private plaintiffs as well as private defendants—find that discontinuance has mooted the action;

even then it may be noted that a new action can be filed if the conduct should be resumed.” 

Wright and Miller, Federal Practice and Procedure, § 3533.5 (2d Supp. 2005) (emphasis

added).

Defendant’s authority goes no further. “A dismissal for lack of jurisdiction is plainly

not a determination of the merits of a claim. Ordinarily such a dismissal is ‘without

prejudice.’” Korvettes, Inc. v. Galaries Anspach, Inc., 617 F.2d 1021, 1024 (3d Cir. 1980)

(emphasis added). The Korvettes opinion did not announce a rule that dismissal for mootness

must be without prejudice. Rather, the court merely indicated that such dismissals often will be

without prejudice.

Likewise, no Ninth Circuit authority demands that dismissal on mootness grounds be

without prejudice. The opinions that plaintiff cites from this circuit and district merely confirm

the proposition that such dismissal may be without prejudice. See, e.g., Abe v. Dyer, 256 F.2d

728, 729 (9th Cir. 1958); Sharper Image Corp. v. Neotec, Inc., 373 F. Supp. 2d 993, 1000 (N.D.

Cal. 2005). Defendant provides decisions showing that dismissal for mootness also may be

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with prejudice. See, e.g., Stewart v. M.M. & P. Pension Plan, 608 F.2d 776, 785 (9th Cir.

1979); see also Lee v. Schmidt-Wenzel, 766 F.2d 1387, 1391 (9th Cir. 1985).

The general principles of the mootness doctrine are useful in determining whether

dismissal on such grounds should be with prejudice. “Mootness will be found . . . if the

plaintiff is not likely to be affected by any repetition of the challenged conduct, or if effective

relief can be provided in the event of any recurrence.” Wright and Miller, Federal Practice and

Procedure, § 3533.5 (2d Supp. 2005). If defendant can never again engage in the challenged

conduct, the action is permanently moot. Put differently, all potential issues are settled.

Here, defendant, through counsel, has provided judicial admissions that it will not seek

to enforce plaintiff’s declaratory-relief action. Defendant may not enforce the anti-competition

covenant. Should defendant, unwisely, seek to enforce the covenant, plaintiff has effective

relief. Much as with a settlement agreement, defendant’s judicial admissions will estop any

such enforcement action. 

In the interim, plaintiff should not continue to dangle this litigation over defendant,

threatening defendant that it may be hauled back to court at any moment. It seems ironic that

plaintiff, who brought this action under the pretense of avoiding future litigation, is the party

most anxious to run to the courthouse.

* * *

Second, plaintiff seeks to alter the judgment to remove any suggestion that defendant

“prevailed” over plaintiff. “[A] dismissal of the action, whether on the merits or not, generally

means that defendant is the prevailing party.” Wright and Miller, Federal Practice and

Procedure, § 2667 (3d ed. 1998). This presumption is modified, however:

[I]n suits seeking injunctive relief, if the defendant alters its

conduct so that plaintiff’s claim becomes moot before judgment is

reached, costs may be allowed if the court finds that the changes

were the result, at least in part, of plaintiff’s litigation. The key in

these cases is whether the plaintiff actually has gained some

benefit, either directly or indirectly, from the litigation. If not, the

mootness of plaintiff’s claim may prevent a finding that plaintiff

is a prevailing party entitled to attorney’s fees.

Ibid.

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Here, plaintiff did not derive any actual benefit from this action. Plaintiff did not

modify his behavior as a result—he engaged in competitive conduct before and may continue to

do so now.

On the other hand, if it is true that defendant never had an intention to enforce the anticompetition covenant against plaintiff, defendant could and should have been more forthcoming

and clear about this lack of intention. That would have greatly reduced the duration and

expense of the litigation.

Due to defendant’s delay, the judgment will be altered such that neither party shall be

deemed the prevailing party for purposes of costs or attorney’s fees. The judgment shall now

read as follows:

For the reasons stated in the order granting summary judgment

and in the order granting in part and denying in part the motion to

alter judgment, FINAL JUDGMENT IS HEREBY ENTERED. Neither

party shall be deemed the prevailing party for purposes of costs

and attorney’s fees. The Clerk SHALL CLOSE THE FILE.

CONCLUSION

For the foregoing reasons, plaintiff’s motion is GRANTED IN PART AND DENIED IN

PART. Finding no further argument on this motion necessary, the hearing is hereby VACATED.

IT IS SO ORDERED.

Dated: March 21, 2006 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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