Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02652/USCOURTS-casd-3_11-cv-02652-3/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:1 Antitrust Litigation

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

PRIME HEALTHCARE SERVICES,

INC., a Delaware corporation,

 Plaintiff,

CASE NO. 11cv2652-GPC(RBB)

ORDER GRANTING

DEFENDANTS’ 41(b) MOTION

TO DISMISS

vs. [Dkt. No. 88]

SERVICE EMPLOYEES

INTERNATIONAL UNION, a Labor

Union; et al.,

Defendants.

Presently before the Court is a Federal Rules of Civil Procedure 41(b) motion

to dismiss filed by Defendants Service Employees International Union (“SEIU”)

and Service Employees International Union - United Healthcare Workers West

(“SEIU-UHW”). (Dkt. No. 88.) For the reasons provided below, this Court

GRANTS Defendants’ 41(b) motion and DISMISSES WITH PREJUDICE

Plaintiff’s First Amended Complaint (“FAC”).

BACKGROUND

On September 21, 2012, Plaintiff filed a FAC in the present action. (Dkt. No.

43.) Defendants SEIU and SEIU-UHW (collectively, “Defendants”) filed separate

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motions to dismiss Plaintiff’s FAC. (Dkt. Nos. 43, 57.) On July 25, 2013, this 1

Court granted both motions to dismiss, allowing Plaintiff leave to amend the FAC.

(Dkt. No. 87 at 30.) (“If Prime Healthcare wishes, it SHALL FILE an amended

complaint within thirty days of the date this Order is electronically docketed.

Failure to file an amended complaint by this date may result in dismissal with

prejudice.”) (emphasis in original). To date, Plaintiff has not filed a second

amended complaint. On November 1, 2013, Defendants filed a motion to dismiss

this action for lack of prosecution under Rule 41(b). (Dkt. No. 88.) Plaintiff filed a

notice of intent to appeal on November 4, 2013. (Dkt. No. 89) Defendants’ motion

has been fully briefed. (Dkt. Nos. 93, 94.)

LEGAL STANDARD

Federal Rule of Civil Procedure 41(b) provides that a defendant may move to

dismiss an action or claim “[i]f the plaintiff fails to prosecute or comply with these

rules or a court order.” Dismissal, however, “is a harsh penalty and is to be imposed

only in extreme circumstances.” Henderson v. Duncan, 779 F.2d 1421, 1423 (9th

Cir. 1986) (citations omitted). In determining whether to dismiss a case for failure

to comply with a court order, the district court weighs five factors: “(1) the public’s

interest in expeditious resolution of the litigation; (2) the court’s need to manage its

docket; (3) the risk of prejudice to the defendants; (4) the public policy favoring

disposition of cases on their merits; and (5) the availability of less drastic

alternatives.” Ferdik v. Bonzelet, 963 F.2d 1258, 1260-61 (9th Cir. 1992) (citations

and internal quotation marks omitted). In addition, “[a] dismissal for lack of

prosecution must be supported by a showing of unreasonable delay,” which creates

a presumption that the defendants have been injured. Henderson, 779 F.2d at 1423.

A third motion to dismiss was filed byDefendants Kaiser Foundation Health Plan, Inc., Kaiser 1

Foundation Hospitals, and Southern California Permanente Medical Group. (Dkt. No. 59.) These

Defendants do not join the present motion. 

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Unlike dismissals under Rule 41(b), a Rule 12(b)(6) dismissal for failure to

state a claim carries no stigma for disobedience of a court order. Edwards v. Marin

Park, Inc., 356 F.3d 1058, 1065 (9th Cir. 2004). Furthermore, the United States

Court of Appeals for the Ninth Circuit (“Ninth Circuit”) reviews Rule 41(b)

dismissals for “abuse of discretion in applying the five factors set forth in Ferdik,

963 F.2d at 1260, which pertain to the propriety of the sanction, not to the merits of

the underlying question (such as whether a complaint states a claim).” Id. (citing

Yourish v. California Amplifier, 191 F.3d 983, 986). On the other hand, the Ninth

Circuit reviews 12(b)(6) dismissals “de novo, reviewing directly the question

whether the plaintiff has stated a claim upon which relief could be granted.” Id.

(citing Stone v. Travelers Corp., 58 F.3d 434, 436-37 (9th Cir. 1995)).

ANALYSIS

Defendants file the present motion under Federal Rule of Civil Procedure

41(b), seeking involuntary dismissal of Plaintiff’s FAC with prejudice. (Dkt. No.

88-1.) Defendants argue Plaintiff’s failure to either amend or indicate intent to

appeal prior to the Court’s ordered deadline warrants Rule 41(b) sanctions. (Id. at 1-

2.) In response, Plaintiff claims Rule 41(b) sanctions are appropriate only in “cases

where there is a true failure to prosecute,” and that Plaintiff’s settlement attempts

and notice to opposing counsel of intent to appeal excuse any delay. (Dkt. No. 93 at

1-2.) Plaintiff requests instead that this Court enter a final judgment in this case

without Rule 41(b) sanctions. (Id. at 1, 3.) Defendants reply that neither Plaintiff’s

settlement attempts nor flawed communications with opposing counsel excuse

Plaintiff’s failure to either file a second amended complaint or notify the Court of

intent to stand on the FAC. (Dkt. No. 94.)

As an initial matter, the Court notes that Plaintiff must obtain a final

judgment from this Court prior to filing a notice of appeal. WMX Technologies,

Inc. v. Miller, 104 F.3d 1133 (9th Cir. 1997) (en banc) (“We now specifically rule

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that a plaintiff, who has been given leave to amend, may not file a notice of appeal

simply because he does not choose to file an amended complaint. A further district

court determination must be obtained.”). The United States Court of Appeals for the

Ninth Circuit (“Ninth Circuit”) has expressly rejected the contrary holdings of other

circuits. Id. at 1136 (disapproving of Otis v. City of Chicago, 29 F.3d 1159, 1166-

68 (7th Cir. 1994) (en banc) (“finality springs into existence when the time for leave

to amend expires.”)). Absent notice of a plaintiff’s intent not to amend a complaint

when given leave to by the Court, “resources continue to be consumed by a case

sitting idly on the court’s docket.” Edwards v. Marin Park, Inc., 356 F.3d 1058,

1063-65 (9th Cir. 2004).

Weighing the five factors from Ferdik v. Bonzelet, 963 F.2d 1258, the Court

concludes that Plaintiff’s delay and failure to move the Court for final judgment

warrants Rule 41(b) sanction. In particular, the first three Ferdik factors weigh

heavily in favor of Rule 41(b) dismissal. See Yourish, 191 F.3d at 990 (1999)

(approving of the district court’s grant of Rule 41(b) involuntary dismissal where

three out of five Ferdik factors favored dismissal). Involuntary dismissal serves the

public’s interest in expeditious resolution of the litigation as well as the Court’s

need to manage its docket because Plaintiff’s noncompliance with the Court’s

deadline has caused this case to languish on the Court’s docket for over two months.

By failing to timely move the Court for final judgment in this matter, Plaintiff has

effectively tolled the allowed period to prepare an appeal. See Jung v. K. & D. Min.

Co., 356 U.S. 3355 (1958) (Permitting appeal nearly two years after petitioners were

given leave to file an amended complaint because neither the defendants nor the

district court acting sua sponte sought to dismiss the action with prejudice after

petitioners missed the amendment deadline).

Furthermore, this delay has prejudiced the Defendant. See Yourish, 191 F.3d

at 991 (“We have indicated that the risk of prejudice to the defendant is related to

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the plaintiff’s reason for defaulting in failing to timely amend.”) (citing Malone v.

U.S. Postal Service, 833 F.2d 128, 131 (9th Cir. 1987)). To explain the delay,

Plaintiff offers evidence of ongoing settlement negotiations as well as

communication to opposing counsel of intent to stand on the FAC. (Dkt. No. 93 at

1-2.) Neither reason explains Plaintiff’s failure to communicate Plaintiff’s intentions

to this Court by formal notice or motion for extension of time. Because

unreasonable plaintiff delay creates a presumption of injury to defendants,

Henderson v. Duncan, 779 F.2d 1421, 1423 (9th Cir. 1986); see also Yourish, 191

F.3d at 991-92, the Court finds that the third Ferdik factor also favors Rule 41(b)

dismissal.

The fourth Ferdik factor asks the Court to weigh the public policy favoring

disposition of cases on their merits. Ferdik, 963 F.2d at 1261. Public policy in this

case does not favor dismissal under either Rule 41(b) or Rule 12(b)(6), since both

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Plaintiff and Defendant seek dismissal of the FAC with prejudice. (Dkt. Nos. 88,

93.)

Last under the Ferdik analysis, the Court considers Plaintiff’s request that this

Court enter final judgment in this matter, dismissing the FAC with prejudice but

without Rule 41(b) sanction. (Dkt. No. 93 at 1.) Although Plaintiff proposes a “less

drastic alternative,” the Court concludes that the other Ferdik factors outweigh the

The Court notes that the Ninth Circuit in Edwards v. Marin Park, Inc. indicated that a

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complaint dismissed under Rule 41(b) would not be reviewed on the merits on appeal. 356 F.3d 1058,

1065 (9th Cir. 2004) (“conversion of a 12(b)(6) dismissal into one under Rule 41(b) . . . would . . .

unjustly deny plaintiffs . . . who exercise the right to stand on a complaint their right to an appeal on

the merits of the question whether the complaint is adequate as a matter of law.”). If this is the case,

the public policy favoring adjudication on the merits favors this Court’s dismissal of the abovecaptioned matter under Rule 12(b)(6) instead of Rule 41(b). However, the Ninth Circuit in other cases

has reviewed the merits of an underlying dismissal where the dismissal was converted to a Rule 41(b)

dismissal for failure to timely amend the complaint or notify the Court of intent to appeal. See Yourish

v. California Amplifier, 191 F.3d 983 (1999) (holding that the district court did not abuse its discretion

in dismissing Plaintiff’s case under Rule 41(b) but nonetheless reviewing the underlying Rule 9(b)

dismissal on the merits). The Court finds that even if the public policy favoring adjudication on the

merits weighs in favor of dismissal under Rule 12(b)(6) rather than under Rule 41(b), the first three

Ferdik factors outweigh this general public policy. See Id. 

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availability of this proposed alternative. See Yourish, 191 F.3d at 990. 

CONCLUSION

For the reasons stated above, the Court GRANTS Defendants’ motion to

dismiss, (Dkt. No. 88), and DISMISSES WITH PREJUDICE Plaintiff’s action in

its entirety under Federal Rule of Civil Procedure 41(b) as to all Defendants. The

Clerk of Court shall enter judgment accordingly.

Having so held, the Court hereby VACATES the hearing date set for this

matter on December 13, 2013 at 1:30 p.m.

IT IS SO ORDERED.

DATED: December 11, 2013

HON. GONZALO P. CURIEL

United States District Judge

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