2008 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-28-2008

In Re: Bath Kitche

Precedential or Non-Precedential: Precedential

Docket No. 07-1520

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 PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 07-1520

IN RE: BATH AND KITCHEN FIXTURES

ANTITRUST LITIGATION

SAMUEL GORDON ARCHITECTS, P.C.;

WATERTOWN PLUMBING AND HEATING

SUPPLY COMPANY, INC.;

REPUBLIC PLUMBING SUPPLY COMPANY, INC.;

THAMES VALLEY WINNELSON COMPANY;

EAST COAST PETROLEUM;

JERMOR PLUMBING & HEATING, INC.;

COLONIAL SUPPLY CORPORATION;

BIS BIS IMPORTS BOSTON, INC.;

SCHAEFFER PLUMBING SUPPLY COMPANY, INC.;

SECURITY SUPPLY COMPANY;

DONATUCCI KITCHENS & APPLIANCES;

G.J. OLSON ARCHITECTS;

TRUMBULL INDUSTRIES, INC.;

OWNER SUPPLIED, LLC;

NORTH SHORE FAUCETS, INC.;

THE PLUMBING SOURCE, INC.;
 The Honorable Anne E. Thompson, United States District *

Judge for the District of New Jersey, sitting by designation.

2

NEENAN COMPANY, INC.,

Appellants

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

D.C. Civil Action Nos. 05-cv-1232, 05-cv-1065,

05-cv-1075, 05-cv-1044, 05-cv-0869, 05-cv-0801,

05-cv-0774, 05-cv-0689, 05-cv-1861, 05-cv-0678,

05-cv-0677, 05-cv-0626, 05-cv-0585, 05-cv-0535,

05-cv-0565, 05-cv-0537, 05-cv-0510

(Honorable Mary A. McLaughlin)

Argued January 28, 2008

Before: SCIRICA, Chief Judge,

RENDELL, Circuit Judge, and THOMPSON, District Judge*

(Filed : July 28, 2008)

ROBERT J. LaROCCA, ESQUIRE (ARGUED)

Kohn, Swift & Graf

One South Broad Street, Suite 2100

Philadelphia, Pennsylvania 19107
3

STEVEN A. ASHER, ESQUIRE 

Weinstein, Kitchenoff & Asher

1845 Walnut Street, Suite 1100

Philadelphia, Pennsylvania 19103

GERALD J. RODOS, ESQUIRE

Barrack, Rodos & Bacine

3300 Two Commerce Square

2001 Market Street

Philadelphia, Pennsylvania 19103

WARREN RUBIN, ESQUIRE

Law Offices of Bernard M. Gross

John Wanamaker Building, Suite 450

Juniper & Market Streets

Philadelphia, Pennsylvania 19107

Attorneys for Appellants

JOSEPH R. BAKER, ESQUIRE (ARGUED)

RICHARD J. FAVRETTO, ESQUIRE

MARK W. RYAN, ESQUIRE

Mayer Brown

1909 K Street, N.W.

Washington, D.C. 20006

BARBARA W. MATHER, ESQUIRE

Pepper Hamilton

3000 Two Logan Square
4

18th & Arch Streets

Philadelphia, Pennsylvania 19103

Attorneys for Appellee,

Trane Inc.

ERIC J. McCARTHY, ESQUIRE 

MARGARET M. ZWISLER, ESQUIRE

Latham & Watkins

555 11th Street, N.W., Suite 1000

Washington, D.C. 20004

Attorneys for Appellee,

Masco Corporation

STEPHEN W. ARMSTRONG, ESQUIRE

PETER BRESLAUER, ESQUIRE

Montgomery, McCracken, Walker & Rhoads

123 South Broad Street, 24th Floor

Philadelphia, Pennsylvania 19109

CHARLES G. CURTIS, JR., ESQUIRE

Heller Ehrman

One East Main Street, Suite 201

Madison, Wisconsin 53703-5118

ROBERT A. ROSENFELD, ESQUIRE

Heller Ehrman

333 Bush Street, Suite 3320

San Francisco, California 94104
5

Attorneys for Appellee,

Kohler Company

ADAM K. LEVIN, ESQUIRE

MITCHELL E. ZAMOFF, ESQUIRE

Hogan & Hartson

555 13th Street, N.W.

Washington, D.C. 20004

Attorneys for Appellee,

Eljer Plumbingware

OPINION OF THE COURT

SCIRICA, Chief Judge.

Plaintiffs appeal the District Court’s order striking as

untimely their notice of voluntary dismissal filed under Fed. R.

Civ. P. 41(a)(1)(A)(i). We will vacate and remand with

instructions to enter an order dismissing the complaint without

prejudice.

I.

Purchasers of bath and kitchen plumbing fixtures filed

putative class action complaints against manufacturers, alleging

a price-fixing conspiracy in violation of Section 1 of the

Sherman Act, 15 U.S.C. § 1. Seventeen cases were consolidated
 The four defendants divided into two groups, each of which 1

separately filed a motion to dismiss. There is no relevant

difference between the motions for the purpose of this appeal.

6

in the District Court. Instead of filing an answer, defendants

moved to dismiss the consolidated and amended complaint for

failure to state a claim under Fed. R. Civ. P. 12(b)(6).1

On July 19, 2006, the District Court issued a

memorandum opinion finding plaintiffs needed to plead more

facts to meet the notice standard of Fed. R. Civ. P. 8(a)(2). The

memorandum stated in relevant part:

[T]he Court will not dismiss the consolidated and

amended complaint with prejudice at this time as

the defendants request. At oral argument, the

Court asked counsel for the plaintiffs if there were

any supplemental facts that could be pled to

address the defendants’ arguments that the

consolidated and amended complaint did not

provide sufficient notice of the grounds upon

which the conspiracy claim was based. Counsel

implied that they might possess more information

than was alleged in the pleadings, but did not

supplement the complaint. . . . The Court,

nevertheless, will allow the plaintiffs an

opportunity to amend their pleadings. . . . An
 Although the July 19, 2006, order indicates the motions to 2

dismiss are “granted,” it also states the “Court will not dismiss

the consolidated and amended complaint at this time, but will

allow the plaintiffs thirty (30) days to amend their complaint.”

The District Court’s subsequent letter to counsel and January 24,

2007, order acknowledged the apparent ambiguity in the July 19,

2006, order as to whether the complaint had been dismissed.

 The docket notes: “Date Terminated: 08/30/2006.” 3

7

appropriate Order follows.2

The window for amendment was due to close on August 18,

2006, but on August 17, 2006, the District Court granted

plaintiffs’ unopposed motion for an extension through

September 1, 2006. On August 30, 2006, instead of amending

the complaint, plaintiffs filed a notice under Fed. R. Civ. P.

41(a)(1)(A)(i), voluntarily dismissing the action (the “Notice”).3

With one exception, not applicable here, a timely notice of

voluntary dismissal is without prejudice. Fed. R. Civ. P.

41(a)(1)(B). Defendants, seeking instead a dismissal with

prejudice, filed a “Motion for Entry of Judgment in Accordance

with the Court’s Memorandum and Order of July 19, 2006,”

contending plaintiffs could no longer voluntarily dismiss by

notice because the District Court already had granted

defendants’ motion to dismiss on July 19, 2006. Defendants

asked the District Court to strike the Notice and enter an order

of dismissal with prejudice. Plaintiffs opposed the motion. On
Although the January 24, 2007, order does not state the 4

complaint is dismissed “with prejudice,” defendants do not

dispute the finality of that order. See Shane v. Fauver, 213 F.3d

113, 115 (3d Cir. 2000) (“Because the order did not specify that

the dismissal was without prejudice, under Fed. R. Civ. P. 41(b)

the dismissal ‘operates as an adjudication upon the merits.’”).

There is some confusion in the record as to whether the January

24, 2007, order pertained to all the parties named in the notice

of appeal. Because the order appears to have disposed of all the

consolidated cases, we find that all plaintiffs are proper parties

to this appeal. Defendants do not contend otherwise.

 The District Court had federal question jurisdiction under 28 5

U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1291 to

review the District Court’s order striking the Notice and

dismissing the complaint. Our review is plenary. Manze v.

State Farm Ins. Co., 817 F.2d 1062, 1064 (3d Cir. 1987).

 Rule 41 received stylistic revisions, immaterial to this 6

appeal, effective December 1, 2007.

8

January 24, 2007, the District Court struck the Notice as

untimely filed and entered an order dismissing the complaint.4

This appeal followed.5

II.

Fed. R. Civ. P. 41(a)(1) provides: 6

(A) Without a Court Order. Subject to Rules
 When the notice is filed, the Clerk makes an appropriate 7

entry on the docket noting the termination of the action.

9

23(e), 23.1(c), 23.2, and 66 and any applicable

federal statute, the plaintiff may dismiss an action

without a court order by filing: (i) a notice of

dismissal before the opposing party serves either

an answer or a motion for summary judgment; or

(ii) a stipulation of dismissal signed by all parties

who have appeared. (B) Effect. Unless the notice

or stipulation states otherwise, the dismissal is

without prejudice. But if the plaintiff previously

dismissed any federal-or state-court action based

on or including the same claim, a notice of

dismissal operates as an adjudication on the

merits.

Three key aspects of Rule 41(a)(1)(A)(i) control our

analysis. First, a filing under the Rule is a notice, not a motion.

Its effect is automatic: the defendant does not file a response,

and no order of the district court is needed to end the action.7

Second, the notice results in a dismissal without prejudice

(unless it states otherwise), as long as the plaintiff has never

dismissed an action based on or including the same claim in a

prior case. Third, the defendant has only two options for cutting

off the plaintiff’s right to end the case by notice: serving on the

plaintiff an answer or a motion for summary judgment.

Here, it is undisputed that on the date plaintiffs filed the
10

Notice: (1) plaintiffs had never before dismissed an action based

on or including the same claim; and (2) defendants had not

served an answer or a motion for summary judgment.

Accordingly, the parties agree a timely Notice would have

resulted in automatic dismissal without prejudice. The

timeliness of the Notice depends on whether the “action” to

which the Rule refers remained pending when the Notice was

filed.

The Rule “affixes a bright-line test to limit the right of

dismissal to the early stages of litigation,” Manze, 817 F.2d at

1065, which “simplifies the court’s task by telling it whether a

suit has reached the point of no return. If the defendant has

served either an answer or a summary judgment motion it has;

if the defendant has served neither, it has not.” Id. (quoting

Winterland Concessions Co. v. Smith, 706 F.2d 793, 795 (7th

Cir. 1983)). Up to the “point of no return,” dismissal is

automatic and immediate – the right of a plaintiff is

“unfettered,” Carter v. United States, 547 F.2d 258, 259 (5th

Cir. 1977). A timely notice of voluntary dismissal invites no

response from the district court and permits no interference by

it. See Marex Titanic, Inc. v. Wrecked & Abandoned Vessel, 2

F.3d 544, 545, 547–48 (4th Cir. 1993) (district court may not

vacate a timely filed notice of dismissal); Am. Cyanamid Co. v.

McGhee, 317 F.2d 295, 297 (5th Cir. 1963) (“[The notice] itself

closes the file. There is nothing the defendant can do to fan the

ashes of that action into life and the court has no role to play.

This is a matter of right running to the plaintiff and may not be
 A district court retains jurisdiction to decide “collateral” 8

issues – such as sanctions, costs, and attorneys’ fees – after a

plaintiff dismisses an action by notice. See Cooter & Gell v.

Hartmarx Corp., 496 U.S. 384, 396–98 (1990).

11

extinguished or circumscribed by adversary or court.”). A

proper notice deprives the district court of jurisdiction to decide

the merits of the case. See Manze, 817 F.2d at 1065–66 8

(district court may not decide defendant’s motion to dismiss

after plaintiff’s effective Rule 41(a)(1)(A)(i) notice); 8 James

Wm. Moore et al., Moore’s Federal Practice § 41.33[6][e] (3d

ed. 2008) (“A defendant’s motion for entry of a final judgment

under Rule 54(b) should be denied if the action has already been

dismissed by notice.”); 9 Charles Alan Wright & Arthur R.

Miller, Federal Practice & Procedure: Civ. 3d § 2367, at 559–61

(3d ed. 2008) (“After the dismissal, the action no longer is

pending in the district court and no further proceedings in the

action are proper.”).

Because a motion to dismiss under Fed. R. Civ. P.

12(b)(6) is neither an answer nor a motion for summary

judgment, its filing generally does not cut off a plaintiff’s right

to dismiss by notice. Manze, 817 F.2d at 1066. Only when a

motion filed under Fed. R. Civ. P. 12(b)(6) is converted by the

district court into a motion for summary judgment does it bar
 See Fed. R. Civ. P. 12(d) (“If, on a motion under Rule 9

12(b)(6) or 12(c), matters outside the pleadings are presented to

and not excluded by the court, the motion must be treated as one

for summary judgment under Rule 56. All parties must be given

a reasonable opportunity to present all the material that is

pertinent to the motion.”).

12

voluntary dismissal. Id. Here, defendants do not contend their 9

motion was converted to a motion for summary judgment, or

that it should be treated as an answer.

In Manze, we rejected the defendant’s argument that its

motion to dismiss under Fed. R. Civ. P. 12(b)(6) was

“equivalent” to a motion for summary judgment that should

have barred the plaintiff’s dismissal by notice. Id. We

acknowledged the defendant’s preferred approach had some

“theoretical appeal” because motions to dismiss may impose

much labor and expense on parties and judges – sometimes they

are as time-consuming as motions for summary judgment. Id.

at 1065 (citing Tele-Views News Co. v. S.R.B. TV Publ’g Co., 28

F.R.D. 303, 307–08 (E.D. Pa. 1961)). Moreover, Rule 41 may

permit a strategic advantage for a plaintiff: if prospects for

prevailing on the merits appear dim, the plaintiff can obtain a

dismissal without prejudice after imposing high costs on

defendants and judges. But the drafters of Rule 41 provided for

only two responses – answer and motion for summary judgment

– as “point[s] of no return.” Id. (quoting Winterland

Concessions, 706 F.2d at 795). It would be improper to graft a
 The consequences of following the Rule have sometimes 10

appeared substantially unfair or wasteful, especially when the

district court already has delved into the merits, warranting a

departure from the literal text. In Harvey Aluminum, Inc. v. Am.

Cyanamid Co., 203 F.2d 105 (2d Cir. 1953), the plaintiff sued

for specific performance of an asset purchase contract and

obtained an ex parte temporary restraining order to prevent the

defendant from selling the disputed property to a third party. Id.

at 107. The district court held an extensive hearing (420 pages

transcribed) and denied the plaintiff’s motion for a preliminary

injunction. Id. Before the defendant had filed an answer or

motion for summary judgment, the plaintiff filed a notice of

dismissal under Rule 41(a)(1). Id. The defendant moved to

strike the notice, but the district court applied the Rule by its

literal terms and found the notice effective. Id. The Court of

Appeals for the Second Circuit reversed, holding literal

compliance with the Rule’s text unwarranted on the facts. Id. at

107–08. The district court had conducted a lengthy hearing on

the merits in denying the preliminary injunction, and it had

opined that the prospects for the plaintiff to succeed on the

merits appeared “remote if not completely nil.” Id. at 107. In

these circumstances, a “literal application” of Rule 41(a)(1)

“would not be in accord with its essential purpose of preventing

arbitrary dismissals after an advanced stage of a suit has been

13

new category onto the literal text of the Rule. Id.

As in Manze, we apply the literal terms of Rule 41.10
reached.” Id. at 108.

Harvey has been criticized for blurring the Rule’s

“bright-line” timing test, and it has been distinguished when

appropriate. See Universidad Cent. Del Caribe, Inc. v. Liaison

Comm. on Med. Educ., 760 F.2d 14, 18 (1st Cir. 1985) (“Harvey

Aluminum has not been well received.”); see also Marex Titanic,

2 F.3d at 547; Hamilton v. Shearson-Lehman Am. Express, Inc.,

813 F.2d 1532, 1534 (9th Cir. 1987); Winterland Concessions,

706 F.2d at 796; Pilot Freight Carriers, Inc. v. Int’l Bhd. of

Teamsters, 506 F.2d 914, 916 (5th Cir. 1975); D.C. Elecs., Inc.

v. Nartron Corp., 511 F.2d 294, 297 (6th Cir. 1975). The

Second Circuit has itself limited Harvey Aluminum to its

“extreme” circumstances. Thorp v. Scarne, 599 F.2d 1169,

1176 (2d Cir. 1979). We distinguished Harvey Aluminum in

Manze. 817 F.2d at 1066 n.4. Whatever vitality the case

retained in the Second Circuit, “its reasoning could not be

persuasive [in Manze] since the district court proceedings had

not advanced so far” as they had in Harvey Aluminum. Id. In

Manze, as of the date the plaintiff dismissed by notice, no

extensive hearing had been held and the district court had taken

no position on the merits of the case.

14

Furthermore, we reject defendants’ contention that the District

Court’s granting plaintiffs the right to amend, and an extension

of time within which to do so, limited or nullified the option of

dismissing available to plaintiffs under the Rule. Here, the

Notice was timely because defendants had filed neither an

answer nor a motion for summary judgment as of the date of the
15

Notice, and because the District Court’s July 19, 2006, order had

not clearly put an end to the “action” to which Rule 41 refers.

III.

For the foregoing reasons, we will vacate the January 24,

2007, order of the District Court and remand with instructions

to enter an order dismissing the complaint without prejudice.