Case Name: GLO CO., an Illinois Corporation, Appellant, v. MURCHISON AND COMPANY, a Delaware Corporation, Barnsdall Oil Company, a Delaware Corporation and Sunray DX Oil Company, a Delaware Corporation
Court: United States Court of Appeals for the Third Circuit
Jurisdiction: United States
Decision Date: 1967-12-20
Citations: 397 F.2d 928
Docket Number: No. 16236
Parties: GLO CO., an Illinois Corporation, Appellant, v. MURCHISON AND COMPANY, a Delaware Corporation, Barnsdall Oil Company, a Delaware Corporation and Sunray DX Oil Company, a Delaware Corporation.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 397
Pages: 928–932

Head Matter:
GLO CO., an Illinois Corporation, Appellant, v. MURCHISON AND COMPANY, a Delaware Corporation, Barnsdall Oil Company, a Delaware Corporation and Sunray DX Oil Company, a Delaware Corporation.
No. 16236.
United States Court of Appeals Third Circuit.
Argued April 18, 1967.
Decided Dec. 20, 1967.
On Rehearing March 20,1968.
Certiorari Denied Nov. 12, 1968.
See 89 S.Ct. 290.
Van Dusen, Circuit Judge, dissented on rehearing.
Thomas Hart Fisher, Chicago, Ill., for appellant.
William S. Megonigal, Jr., Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for appellee, Murchison and Co.
E. Norman Veasey, Richards, Layton & Finger, Wilmington, Del. (Robert H. Richards, Jr., Wilmington, Del., on the brief), for appellee, Sunray DX Oil Co.
Before SMITH and FREEDMAN, Circuit Judges, and WORTENDYKE, District Judge.

Opinion:
OPINION OF THE COURT
PER CURIAM.
This is an appeal from orders of the United States District Court for the District of Delaware dismissing an action to enforce plaintiff's rights under contracts made with defendants. The order of dismissal for failure to prosecute was based upon the court's own motion under Civil Rule 12 of the United States District Court for the District of Delaware.
The present action was commenced on November 1, 1954. On September 18, 1963, the District Court issued an order to show cause why the case should not be dismissed for lack of prosecution. At oral argument, on its return, the Court warned plaintiff's counsel that no further delay would be tolerated. The Court then dismissed the rule to show cause. Upon return of a subsequent order to show cause, issued on June 3, 1966, plaintiff's counsel assured the Court that the matter would be moved for trial. Nevertheless, the Court dismissed plaintiff's case with prejudice and refused to reopen on motion for reargument. Plaintiff says that the dismissal was an abuse of judicial discretion.
The Court has a wide discretion as to penalties for failure of diligent prosecution. Lyford v. Carter, 274 F.2d 815 (2nd Cir. 1960). A dismissal of this case certainly appears justified by the inaction of counsel in failing to move for trial after repeated warnings by the court. However, a dismissal with prejudice is an extremely harsh penalty for such delay.
As the Court recognized, there appears to be no dispute that an amount of money is owed to plaintiff under the contracts in suit. A dismissal with prejudice has the effect of stripping plaintiff of the power to enforce these contract rights. Even the Court below intimated that this was not the result it wanted to bring about, stating: "My point is merely that with respect to that [the amount of money owed] I certainly don't want to dismiss a suit where somebody says T owe somebody some money'; but on the other hand I am considering very seriously dismissing this suit, and I don't want to do anything that is detrimental to a party who has a perfectly legitimate right, which the other side does not deny. The only thing I would like to do in the event I do dismiss this is to keep that matter open, so that if it does require litigation or the parties can't settle as to the amount that is due then it can be determined by the Court in the usual and proper manner." We agree that this should be the result. To' that end the cause should be reinstated and brought to trial with all convenient, speed.
The judgment of the District Court is. reversed, and the cause remanded for further proceedings not inconsistent with, the views herein expressed.
WILLIAM F. SMITH, Circuit Judge, did not participate in the decision of this case because of illness.
Reargued February 20, 1968
Before KALODNER, FREEDMAN and VAN DUSEN, Circuit Judges.
OPINION ON REHEARING
PER CURIAM:
This is an old suit which the district court, acting on its own motion, dismissed with prejudice under its Local Rule 12 which authorizes such disposition where no action has been taken for a period of one year.
We have the utmost sympathy with the desire of the district court to enforce its Local Rule 12. However, after consideration of the complex factual circumstances of the case, we conclude with the greatest reluctance that in view of the unusual nature of the circumstances of this case the interest of justice will best be served by affording plaintiff an opportunity to prove its case at trial.
We therefore set aside the dismissal of the action by the district court, which should fix a specific time for the trial of the case at which plaintiff will have the opportunity to go forward on pain of dismissal with prejudice for lack of prosecution.
. Rule 12 provides:
Subject to the provisions of Rule 23(c), F.R.Civ.P., in each cause pending, wherein no action has been taken for a period of one year, the Court may, on its own motion enter an order dismissing such cause unless good reason for the inaction is given. An application for a continuance shall not be deemed to be action precluding such dismissal. After any such application for dismissal has been filed, no application for a continuance or any proceeding taken under the discovery rules, F.R.Civ.P., shall be deemed to toll the application of this Rule.
. Local Rule 12 provides:
"Subject to the provisions of Rule 23 (c), FRCIV.P, in each cause pending, wherein no action has been taken for a period of one year, the Court may, on its own motion or upon application of any party and after reasonable notice, enter an order dismissing such cause unless good reason for the inaction is given. An application for a continuance shall not be deemed to be action precluding such dismissal. After any such application for dismissal has been filed, no application for a continuance or any proceeding taken under the discovery rules, FRCIV.P, shall be deemed to toll the application of this Rule."