1 TEX. CIV. PRAC. & REM. CODE § 16.012(a), (b) (Vernon’s 2003).

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 05-10203

GEORGE W. HYDE,

Plaintiff - Appellee,

v.

HOFFMANN-LA ROCHE INC.; ROCHE LABORATORIES INC.,

Defendants - Appellants.

Appeal from the United States District Court

for the Northern District of Texas

No. 3:04-CV-1473-R

Before HIGGINBOTHAM, DeMOSS, and OWEN, Circuit Judges.

PRISCILLA R. OWEN, Circuit Judge:

The issue in this diversity case is whether the district court abused its

discretion in granting the plaintiff’s motion to dismiss voluntarily all his claims

without prejudice. Because the defendants would potentially be stripped of a

defense based on a Texas statute of repose,1 we vacate and remand for further

proceedings.

United States Court of Appeals

Fifth Circuit

F I L E D

December 20, 2007

Charles R. Fulbruge III

Clerk

United States Court of Appeals

Fifth Circuit

F I L E D

December 20, 2007

Charles R. Fulbruge III

Clerk
2

Id. § 16.012(b).

3

Id. § 16.012(a)(2).

2

I

George W. Hyde, a Texas citizen, sued Hoffman-La Roche Inc. and Roche

Laboratories Inc., claiming he suffered physical and psychological injuries from

ingesting the prescription drug Accutane during the early 1980s. The

defendants are, respectively, the manufacturer and distributor of Accutane in

the United States. The action was originally filed in Texas state court, but was

removed to federal court based on diversity jurisdiction. 

Shortly after removal, the Roche defendants filed a motion for summary

judgment asserting that Hyde’s claims are barred by a Texas statute of repose

that provides a fifteen-year period for filing a “products liability action,”

beginning on “the date of the sale of the product by the defendant.”2 The term

“products liability action” is broadly defined to include 

any action against a manufacturer or seller for recovery of damages

or other relief for harm allegedly caused by a defective product,

whether the action is based in strict tort liability, strict products

liability, negligence, misrepresentation, breach of express or implied

warranty, or any other theory or combination of theories, and

whether the relief sought is recovery of damages or any other legal

or equitable relief, including a suit for: (A) injury or damage to or

loss of real or personal property; (B) personal injury; (C) wrongful

death; (D) economic loss; or (E) declaratory, injunctive, or other

equitable relief.3

Hyde admits that he last took Accutane almost 20 years before he filed
4 TEX. CONST. art. I, § 13 (“All courts shall be open, and every person for an injury done

him, in his lands, goods, person or reputation, shall have remedy by due course of law.”).

5 TEX. CIV. PRAC. & REM CODE § 16.012(d) (Vernon 2003) (“This section does not apply

to a products liability action seeking damages for personal injury or wrongful death in which

the claimant alleges: (1) the claimant was exposed to the product that is the subject of the

action before the end of 15 years after the date the product was first sold; (2) the claimant’s

exposure to the product caused the claimant’s disease that is the basis ofthe action; and (3)the

symptoms ofthe claimant’s disease did not, before the end of 15 years after the date ofthe first

sale of the product by the defendant, manifest themselves to a degree and for a duration that

would put a reasonable person on notice that the person suffered some injury.” (emphasis

added)).

6 See id.

7 Rule 41(a)(2) provides for voluntary dismissal by order of the court, as follows:

Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's

request only by court order, on terms that the court considers proper. If a

defendant has pleaded a counterclaim before being served with the plaintiff’s

motion to dismiss, the action may be dismissed over the defendant’s objection

only if the counterclaim can remain pending for independent adjudication.

Unless the order states otherwise, a dismissal under this paragraph (2) is

3

suit, but he asserted in his response to the motion for summary judgment that

the statute of repose would violate the Texas Constitution’s “open courts”

provision4if applied to his claims. He additionally asserted that his claims fall

within an exception to the statute of repose for latent diseases.5 Hyde did not

produce any evidence that he has actually satisfied the conditions of the latent

disease exception; he argued that it is sufficient under the statute’s provisions

that he “alleges” facts that meet the elements of the exception.6

Before responding to the summary judgment motion, however, Hyde filed

a motion to dismiss all his claims without prejudice pursuant to FED. R. CIV. P.

41(a)(2),7stating that he “no longer desire[d] to prosecute th[e] action.” The
without prejudice.

FED. R. CIV. P. 41(a)(2). The Federal Rules of Civil Procedure were amended effective

December 1, 2007. The amendments are not material to this appeal, however, and the court

therefore quotes from the amended Rules throughout this opinion. See FED. R. CIV. P. 41, 56

advisory committee’s note on 2007 amendments. 

8 679 A.2d 106 (N.J. 1996).

4

Roche defendants opposed dismissal and urged the court to rule on the pending

motion for summary judgment, arguing that Roche would be prejudiced if Hyde

refiled the lawsuit in a state without an applicable statute of repose. 

At some point, Hyde filed a virtually identical suit against the Roche

defendants in New Jersey state court, and the Roche defendants brought this to

the attention of the federal district court in Texas. They advised the court that

New Jersey does not have an applicable statute of repose and asserted it was

unlikely that New Jersey’s choice-of-law rules would result in that court

applying the Texas statute of repose, citing Gantes v. Kason Corp., in which the

New Jersey Supreme Court refused to apply Georgia’s statute of repose in a

products-liability action arising from an industrial accident that occurred in

Georgia.8

After the summary judgment motion and motion to dismiss had been

pending for several months, Hyde requested a continuance of the summary

judgment proceedings to allow additional time for discovery as to whether the

law of a forum other than Texas should apply in this case, “possibly” New
9 See FED. R. CIV. P. 56(f) (authorizing the district court to grant additional time for

discovery or enter other orders as are “just” when a summary judgment motion has been filed

prematurely).

10 FED. R. CIV. P. 41(a)(2).

5

Jersey.9In the same motion, Hyde urged the court to (1) grant his motion for

dismissal without prejudice, (2) deny the motion for summary judgment on the

merits, or (3) defer ruling on the summary judgment motion pending a decision

on whether the case would be transferred to a Florida multi-district litigation

panel for Accutane cases.

Four days after Hyde requested a continuance, the district court granted

Hyde’s motion for voluntary dismissal without prejudice. Although dismissal of

the case could have been subject to “terms that the court considers proper,”10 the

district court’s dismissal order was unconditional. 

The Roche defendants appeal the dismissal order, seeking remand to the

district court for consideration of its summary judgment motion. They argue

that dismissal has deprived them of a favorable judgment on the merits and

stripped them of an affirmative defense that is not available in the New Jersey

litigation. Hyde’s principal counter-argument is that his pursuit of the case in

New Jersey would not prejudice the Roche defendants because New Jersey law

might apply even if the case proceeded in Texas federal court.
11 FED. R. CIV. P. 56(f). It provides:

When Affidavits Are Unavailable. If a party opposing the motion shows by

affidavit that, for specified reasons, it cannot present facts essential to justify

its opposition, the court may: (1) deny the motion; (2) order a continuance to

enable affidavits to be obtained, depositions to be taken, or other discovery to

be undertaken; or (3) issue any other just order.

12 FED. R. CIV. P. 41(a). This rule provides:

(1) By the Plaintiff.

(A) Without a Court Order. Subject to Rules 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

6

II

As an initial matter, Hyde contends that we “should not view the instant

appeal as one strictly involving the issue of whether the district court abused its

discretion under Rule 41(a)(2)” because, Hyde asserts, the district court’s ruling

is also referable to Hyde’s motion for continuance and therefore the district court

was entitled to enter any order that was just pursuant to Rule 56(f).11 We reject

this argument. The district court’s order specifically referenced Hyde’s

voluntary motion to dismiss without prejudice. The court did not rule on Hyde’s

motion for continuance.

Rule 41(a)(2) of the Federal Rules of Civil Procedure precludes a plaintiff

from dismissing a lawsuit without the court’s permission if either an answer or

a motion for summary judgment has been served on the plaintiff and the

defendant does not consent to dismissal.12 A district court’s decision to dismiss
(ii) a stipulation of dismissal signed by all parties who have

appeared.

(B) Effect. Unless thenotice or stipulation states otherwise,the dismissal

is without prejudice. Butifthe plaintiff previously dismissed any federalor state-court action based on or including the same claim, a notice of

dismissal operates as an adjudication on the merits.

13 Ikospentakis v. Thalassic Steamship Agency, 915 F.2d 176, 177 (5th Cir. 1990).

14 Id. (citations omitted).

15 Id. at 177-78 (citations omitted).

16 915 F.2d at 176.

17 279 F.3d 314 (5th Cir. 2002).

7

a lawsuit under Rule 41(a)(2) is reviewed for abuse of discretion.13 Dismissal

without prejudice will generally be affirmed “unless the defendant will suffer

some plain legal prejudice other than the mere prospect of a second lawsuit.”14

A defendant may be substantially prejudiced by dismissal of a lawsuit if

dismissal “effectively strips him of a defense that would otherwise be available.

That [the] plaintiff may obtain some tactical advantage over the defendant in

future litigation is not ordinarily a bar to dismissal.”15

In determining whether Roche will suffer plain legal prejudice as a

consequence of the dismissal, we are guided by prior decisions of this court

including Ikospentakis,

16 and Elbaor v. Tripath Imaging, Inc.17 In Ikospentakis,

the defendants argued thatthe voluntary dismissal of Jones Act claims stripped

the defendants of a forum non conveniens defense that was available in federal
18 915 F.2d at 177-80.

19 Id. at 178-79.

20 874 F.2d 984 (5th Cir. 1989)(statute oflimitations clearly barred the plaintiff’s claims

and would not be available if the case were transferred).

21 Ikospentakis, 915 F.2d at 179.

22 Id. at 180.

8

court but unavailable in Louisiana state court.18 We agreed there was prejudice

because the courts of that state had “unequivocally rejected” the forum non

conveniens doctrine in Jones Act and maritime cases.19In analyzing what

constitutes legal prejudice, we emphasized thatthe availability of a defense need

not be established to a certainty:

[W]hether [the defendants] can sustain this defense beyond the

shadow of a doubt in federal court is not the point of the inquiry

concerning legal prejudice, although that circumstance made the

decision in Phillips [v. Illinois Central Gulf Railroad]

20

relatively

easy. The point of the inquiry, rather is that appellants’ invocation

of forum non conveniens is far from frivolous, and that if appellants

are relegated to litigating in theLouisiana state courts,they will not

even have the opportunity to pursue a forum non conveniens

dismissal.21

Because the forum non conveniens defense was not frivolous and because it was

virtually certain thatthe defense would be unavailable in state court, we vacated

the dismissal order and remanded the case to the district court with instructions

to consider the merits of the defense before proceeding further.22
23 279 F.3d at 314.

24 Id. at 318 (emphasis added).

25 Id. at 319 (citations omitted).

26 Id. (“We decline to adopt a rule that [would] allow[] a movant to garner a dismissal by simply

refusing to disclose the jurisdiction where they intend to re-file.”).

9

In Elbaor we further clarified that legal prejudice may exist even if it is

not legally certain that the defense would be lost if the case were dismissed.23

In Elbaor, we agreed with the district court that “dismissal would potentially

strip [the defendant] of a viable statute of limitations defense”24 under Texas

law, even though the plaintiffs asserted thatthe discovery rule applied and even

though it was not known whether limitations would be unavailable as a defense

in a forum in which the suit might be refiled. With regard to the merits of the

limitations defense, we held thatthe plaintiffs’“potential ability to plead around

the statute of limitations is irrelevant” in light of the holding in Ikospentakis

that “whether the defense will ultimately be successful is not the appropriate

inquiry.”25 Nor did the fact that it was unknown where the suit might be refiled

and thus whether the limitations defense would be lost negate legal prejudice

because it was the plaintiffs who failed to disclose the jurisdiction in which they

intended to refile, a fact peculiarly within their knowledge.26
27 Spence v. Glock, 227 F.3d 308, 311 (5th Cir. 2000) (citations omitted).

28 See Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941) (holding that federal

diversity courts must apply the conflict-of-laws rules of the forum state); Johansen v. E.I. Du

Pont de Nemours & Co., 810 F.2d 1377, 1380 (5th Cir. 1987) (“Erie principles require federal

diversity courts to apply the conflict of laws provisions ofthe forum state.”) (citations omitted).

29 Torrington Co. v. Stutzman, 46 S.W.3d 829, 848 (Tex. 2000) (citations omitted).

30 See Owens Corning v. Carter, 997 S.W.2d 560, 573 (Tex. 1999) (characterizing the

“borrowing statute” provisions of section 71.031 as “essentially a codified choice-of-law rule

governing the timeliness of actions”) (citations omitted); Malone v. Sewell, 168 S.W3d 243, 253

(Tex. App. – Fort Worth 2005, pet. denied) (same) (citations omitted).

10

III

Applying these principles, our first inquiry is whether the Roche

defendants have a viable (non-frivolous) defense under Texas law. In diversity

cases, a federal court must apply federal procedural rules and the substantive

law of the forum state, including its conflict-of-law rules.27 Although the parties

disagree about whether Texas or New Jersey substantive law applies in this

case, they agree the issue must be resolved by applying Texas’s choice-of-law

rules.28

While as a general proposition, Texas applies the “most significant

relationship” test in sections 6 and 145 of the Restatement (Second) of Conflict

of Laws in determining what law applies in tort cases,29 the Texas Legislature

has enacted legislation to govern choice of law in some respects. Section 71.03

of the Texas Civil Practice and Remedies Code is such a codification.30It

provides in pertinent part:
31 TEX. CIV. PRAC. & REM. CODE § 71.031 (emphasis added).

11

(a) An action for damages for the death or personal injury of

a citizen of this state, of the United States, or of a foreign country

may be enforced in the courts of this state, although the wrongful

act, neglect, or default causing the death or injury takes place in a

foreign state or country, if:

(1) a law of the foreign state or country or of this state

gives a right to maintain an action for damages for the

death or injury;

(2) the action is begun in this state within the time

provided by the laws of this state for beginning the

action;

(3) for a resident of a foreign state or country,the action

is begun in this state within the time provided by the

laws of the foreign state or country in which the

wrongful act, neglect, or default took place; and

(4) in the case of a citizen of a foreign country, the

country has equal treaty rights with the United States

on behalf of its citizens.

(b) Except as provided by Subsection (a), all matters

pertaining to procedure in the prosecution or maintenance of the

action in the courts ofthis state are governed by the law ofthis state.

(c) The court shall apply the rules of substantive law that are

appropriate under the facts of the case.31

The Texas Legislature chose the phrase “within the time provided by the

laws” rather than a more specific, more restrictive reference to “limitations.” At

least one Texas state court has held that the phrase “within the time provided

by the laws” in subsection (a)(3) includes both statutes of limitations and
32 Gilcrease v. Tesoro Petroleum Corp., 70 S.W.3d 265, 269 (Tex. App. – San Antonio

2001, pet. denied) (“Both statutes of limitations and statutes of repose serve to limit the

amount of time under which suit may be brought, and therefore, we hold a nonresident

plaintiff bringing suit under section 71.031 must satisfy not only the statute of limitations, but

also the statute of repose ‘of the foreign state or country in which the wrongful act, neglect, or

default took place.’”) (citations omitted).

33 TEX. CIV. PRAC. & REM. CODE § 71.031(c).

34 Id.

35 Id. § 71.031(a)(2),(3).

12

statutes of repose.32 Nothing in the context of section 71.031 or its history

indicates thattheTexas Legislature meantthe phrase “within the time provided

by the laws” to mean one thing in subsection (a)(2) and another in subsection

(a)(3). Accordingly, under Texas law, a resident plaintiff, such as Hyde, must

establish under subsection (a)(2) that his action was instituted in Texas “within

the time provided by the laws of [Texas] for beginning the action,” and that

includes Texas statutes of repose.

Hyde points out that subsection (c) of section 71.031 explicitly states that

courts “shall apply the rules of substantive law that are appropriate under the

facts of this case”33 and contends that statutes of repose are substantive, rather

than procedural, laws. Even assuming that is so in this context, subsection (c)

directs application of substantive law “as appropriate under the facts of the

case,”34 and this general directive does not override the more specific references

in subsections (a)(2) and (a)(3) to “the time provided by the laws.”35 We conclude
36 TEX. CIV. PRAC. & REM. CODE § 16.012(a),(b).

37 234 F. Supp.2d 651, 656 n.3 (E.D. Tex. 2002) (“It is important to note that Plaintiff

has not plead a statutory cause of action under § 71.031. Rather, Plaintiff's claims are based

in common law tort. Therefore, the Court cannot characterize Plaintiff's cause of action as a

71.031 claim absent a pleading designating it as such. This brings any application of 71.031

into question because using the choice of law provisions in 71.031 is permissive in common law

cases.” (citations omitted)).

38 583 S.W.2d 312 (Tex. 1979).

39 Id. at 313.

40 The 1973 version of former article 4678 provided:

Whenever the death or personal injury of a citizen of this State or of the United

States, or of any foreign country having equal treaty rights with the United

States on behalf of its citizens, has been or may be caused by the wrongful act,

neglect or default of another in any foreign State or country for which a right to

maintain an action and recover damages thereof is given by the statute or law

of such foreign State or country, such right of action may be enforced in the

13

that even if the Roche defendants’ wrongful acts occurred in New Jersey or

another state, in order to prevail in the Texas action, Hyde would nevertheless

be required to establish that his Texas suit was filed within the time permitted

under the Texas statute of repose for products liability actions, which is section

16.012(a) & (b) of the Texas Civil Practice and Remedies Code.36

Hyde asserts that section 71.031 does not apply to his claims because its

application is limited to “some assertion of a statutory claim subject to that

specific provision,” citing Beatty v. Isle of Capri Casino, Inc.,

37 which in turn

relied on the Texas Supreme Court’s decision in Gutierrez v. Collins.

38 The

Gutierrez decision construed the 1973 version of a predecessor statute,39 former

article 4678,40 and held that its directive to apply the Lex loci delicti rule was
courts of this State within the time prescribed for the commencement of such

actions by the statutes of this State. The law of the forum shall control in the

prosecution and maintenance of such action in the courts of this State in all

matters pertaining to the procedure.

41 583 S.W.2d at 314.

42 TEX. CIV. PRAC. & REM. CODE §§ 71.001et seq.

43 Id. § 71.001.

44 Id. §§ 71.021 et seq.

45 Id. § 71.031.

14

“mandatory only in statutory causes of action, such as a suit brought under the

Wrongful Death Statute” and that “in a common law cause of action . . . the

statute is merely permissive; that is, it authorizes one to bring suit in Texas, but

does not dictate any conflict of laws rules to be applied by the court.”41

The Texas Legislature has since made significant changes in the law.

Currently, the wrongful death provisions are contained in subchapter A of

chapter 71 of the Texas Civil Practices and Remedies Code, entitled “Wrongful

Death.”42 Chapter 71 is entitled “Wrongful Death; Survival; Injuries Occurring

Out of State.”43 The survival statute is now codified in subchapter B, which is,

appropriately, entitled “Survival.”44 Section 71.031 is found in subchapter C,

which is entitled “Death or Injury Caused by Act or Omission Out of State.”45

The structure of Chapter 71 reflects that section 71.031 is independent of the

wrongful death and survival statutes, and by its terms section 71.031 applies to

all personal injury claims in which “the wrongful act, neglect, or default causing
46 Id.

47 997 S.W.2d 560, 565-66 (Tex. 1999).

48 Id. at 571.

49 679 A.2d at 106.

15

the death or injury takes place in a foreign state or country” regardless of

whether the claims are statutory or common-law claims.46

In 1999, the Supreme Court of Texas considered the legislative history of

section 71.031, particularly the 1997 amendments, in Owens Corning v. Carter.

47

Although the court was primarily focused on section 71.031(a)(3) and its

application to asbestos plaintiffs who resided in Alabama but had filed suits in

Texas courts, the court confirmed that subsections (a)(2) and (a)(3) of section

71.031 “appl[y] to all personal injury and wrongful death actions.”48 Section

71.031 is not limited in its application to wrongful death or survival claims.

Accordingly, even if it were determined that the Roche defendants’ wrongful

acts, neglect or default occurred in New Jersey, the Texas statute of repose is

applicable to a suit maintained in Texas.

If Hyde were permitted to pursue his claims in New Jersey state court, it

seems unlikely that the Texas statute of repose would be applied in light of the

New Jersey Supreme Court’s refusal to apply Georgia’s statute of repose in

Gantes.49 In that case, the court conducted a choice-of-law analysis in order to

determine whether Georgia’s 10-year statute of repose would apply to the
50 Id. at 107, 114-15.

51 Id. at 111-12.

52 Id. at 112.

53 TEX. CIV. PRAC. & REM. CODE § 16.012(a),(b).

54 Elbaor, 279 F.3d at 318.

16

plaintiff’s products-liability claim. The plaintiff’s decedent was killed in Georgia

by a machine manufactured and sold in New Jersey, and the complaint was

otherwise governed by Georgia substantive law.50 Applying a governmental

interests choice-of-law analysis,the New Jersey Supreme Court refused to apply

Georgia’s statute of repose because of New Jersey’s “strong interest in

encouraging the manufacture and distribution of safe products for the public”

and “deterring the manufacture and distribution of unsafe products within the

state.”51 The court also found it “significant . . . that New Jersey does not have

a statute of repose that qualifies or limits the liability of manufacturers.”52 The

court concluded that New Jersey’s interests outweighed Georgia’s interest in

applying Georgia’s statute of repose and compensating its resident plaintiffs.

The Roche defendants’ defense based on section 16.012 of the Texas Civil

Practice and Remedies Code53 is potentially stripped, just as the defense in

Elboar was potentially stripped.54 We need not resolve Hyde’s open courts
55 TEX. CONST. art. I, § 13; but see Burlington N. & Sante Fe Ry. Co. v. Poole Chem. Co.,

419 F.3d 355, 360-61 (5th Cir. 2005) (holding that TEX. CIV. PRAC. & REM. CODE § 16.01 does

not violate the Texas constitution’s open courts provision).

56 See Elbaor, 279 F.3d at 319 (“[T]he Elbaors’ potential ability to plead around the

statute of limitations is irrelevant.”). 

17

challenge to section 16.012 under the Texas constitution55 or whether Hyde

comes within the exception to the Texas statute of repose.56 Because the Roche

defendants have established legal prejudice, the district court abused its

discretion in granting Hyde’s voluntary motion to dismiss without prejudice.

* * * * *

We VACATE the district court’s order dismissing this case without

prejudice and REMAND for proceedings consistent with this opinion.