UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

DESIGN BASICS, LLC, et al., )

)

Plaintiffs, )

)

vs. ) 2:16CV323-PPS

)

EENIGENBURG BUILDERS, INC., )

)

Defendant. )

OPINION AND ORDER

July 8 was the fifth anniversary of this protracted litigation. Plaintiff Design

Basics has filed a motion for leave to voluntarily dismiss the case without prejudice

under Rule 41(a)(2) of the Federal Rules of Civil Procedure. [DE 163.] That rule governs

when the voluntary dismissal of a lawsuit requires a court order, and provides: “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....Unless the order states

otherwise, a dismissal under this paragraph (2) is without prejudice.” Fed.R.Civ.P.

41(a)(2). Defendant Ennigenburg Builders opposes the motion, arguing that the

dismissal should be with prejudice. [DE 164.] Design Basics has not filed a reply.

The motion to dismiss represents a throwing in of the litigation towel. Design

Basics has suffered two significant losses in the Seventh Circuit on similar copyright

cases against other home builders. Design Basics claims that after the first, Design

Basics, LLC v. Lexington Homes, 858 F.3d 1093 (7th Cir. 2017), it “determined, in good

faith, that the decision in Lexington Homes did not bar the claims in this case.” [DE 163
at 2.] But after the more recent blow, in Design Basics LLC v. Signature Construction, Inc.,

994 F.3d 879 (7th Cir. 2021), Design Basics has “concluded that, regardless of what

evidence Plaintiffs have regarding actual copying, it is highly unlikely that it will

convince this Court that the copied plans are ‘virtually identical’ to Plaintiffs’ plans” as

required by Signature Construction. [DE 163 at 4 (emphasis in original).] As a result,

Design Basics has “decided that it is not appropriate to continue to press its claims in

this case in light of binding Seventh Circuit precedent.” [Id.] Eenigenburg Builders,

feeling that it has suffered enough from an unjustified claim of copyright infringement

and years of contentious discovery, has responded to Design Basics’ motion to dismiss

with an argument for dismissal with prejudice instead. [DE 164.] 

Whether or not to dismiss a complaint without prejudice under Fed.R.Civ.P.

41(a)(2) “is within the sound discretion of the district court and may be reversed only if

the appellant can establish that the court abused that discretion.” Kovalic v. DEC Intern.,

Inc., 855 F.2d 471, 473 (7th Cir. 1988). The court’s discretion is abused where the

defendant suffers “plain legal prejudice” from a dismissal without prejudice. Id.,

quoting United States v. Outboard Marine Corp., 789 F.2d 497, 502 (7th Cir. 1986). Several

factors have been identified “that a district court may wish to consider in making its

determination as to whether a defendant has suffered legal prejudice.” Ratkovich v.

Smith Kline, 951 F.2d 155, 158 (7th Cir. 1991). These include the defendant’s effort and

expense in defending the case, excessive delay and lack of diligence by the plaintiff, an

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insufficient rationale for seeking voluntary dismissal and whether the defendant has

filed a motion for summary judgment. Id. 

Eenigenburg makes a compelling case for dismissal with prejudice. The

litigation has pended for five years and disputatious discovery has finally been

completed. Eenigenburg represents that it prepared to file a motion for summary

judgment and did not only because just before it was due the parties “consented to a

two-month extension to explore resolution.” [DE 164 at 4.] Because the record shows

that Eenigenburg has expended considerable resources on preparation for trial and a

dispositive motion, it would be inequitable to allow Design Basics to take a voluntary

nonsuit retaining the ability to start the litigation over. Redwall Live Corp. v. ESG

Security, Inc., No. 1:13-cv-01849-SEB-DML, 2015 WL 791450 at *3 (S.D.Ind. Feb. 24, 2015). 

Eenigenburg also complains of discovery delay attributable to Design Basics,

citing as an example its refusal “to produce their ‘lawsuit spreadsheets’ when ordered

to do so on January 6, 2020, forcing further discovery proceedings that ultimately

ended in Eenigenburg’s favor March 24, 2021.” [DE 164 at 5, citing DE 122, 157.] Such

delay supports a finding of prejudice to Eenigenburg, as does Design Basics’

explanation for seeking dismissal. Design Basics has in essence conceded that it cannot

win under the applicable precedent of the Seventh Circuit. In such circumstances,

Eenigenburg is entitled at this juncture to finality and peace from this extended lawsuit.

Similarly, in Riviera Distributors, Inc. v. Jones, 517 F.3d 926, 927 (7th Cir. 2008), the

copyright owner plaintiff moved to dismiss without prejudice after more than a year of

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litigation, acknowledging that it lacked sufficient evidence to prove its claim. The court

dismissed the case with prejudice instead. Id. That decision was not appealed. Instead,

the Seventh Circuit was asked to review the district judge’s denial of the defendant’s

application for attorney’s fees under the Copyright Act. That decision was reversed, the

Seventh Circuit concluding that the defendant had “obtained a favorable judgment,”

and the fact that “this came about when Riviera threw in the towel does not make

Midwest less the victor than it would have been had the judge granted summary

judgment or a jury returned a verdict in its favor.” Id. at 928. 

All four factors repeatedly identified by the Seventh Circuit weigh in favor of a

determination that Eenigenburg will suffer legal prejudice if Design Basics is granted a

voluntary dismissal without prejudice. Ratkovich, 951 F.2d at 158. “[I]t is an abuse of

discretion for the district court to permit the voluntary dismissal of an action where the

defendant would suffer ‘plain legal prejudice’ as a result.” Wojtas v. Capital Guardian

Trust Co., 477 F.3d 924, 927 (7th Cir. 2007). Design Basics has filed no reply to

Eenigenburg’s memorandum, and so has not disputed this conclusion. I will grant in

part and deny in part Design Basics’ motion to voluntarily dismiss this case, which will

be dismissed with prejudice. Thereafter, as Riviera Distributors suggests, Eenigenburg

can file its motion for an award of attorney’s fees. The parties are encouraged to make a

good faith attempt to resolve the issues of fees and costs without the need for further

briefing and a ruling by me.

ACCORDINGLY:

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Plaintiffs’ Motion for Voluntary Dismissal Without Prejudice Pursuant to

Fed.R.Civ.P. 41(a)(2) [DE 163] is GRANTED IN PART and DENIED IN PART.

This action is DISMISSED WITH PREJUDICE pursuant to Fed.R.Civ.P. 41(a)(2),

the Court finding that only with prejudice is such a dismissal proper.

SO ORDERED.

ENTERED: July 9, 2021. /s/ Philip P. Simon 

UNITED STATES DISTRICT JUDGE

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