Opinion ID: 770794
Heading Depth: 3
Heading Rank: 2

Heading: Defendants' Status as Prevailing Parties

Text: 35 Under Hawai'i law, a party may be deemed the prevailing party entitled to an award of statutory attorneys' fees under Haw. Rev. Stat. 607-14 without successfully litigating the merits of the party's claim. See Wong v. Takeuchi, 961 P.2d 611, 614 (Haw. 1998) (holding a defendant to be the prevailing party within the meaning of Haw. Rev. Stat.S 607-14 even though the plaintiff's action was dismissed on summary judgment on laches or statute of limitations grounds.) 36 Usually the litigant in whose favor judgment is rendered is the prevailing party. . . . Thus, a dismissal of the action, whether on the merits or not, generally means that defendant is the prevailing party. There is no requirement that the judgment in favor of the prevailing party be a ruling on the merits of the claim. 37 Id. (quoting Wright, Miller & Kane, Federal Practice and Procedure 2667 (2d ed. 1983). Here, the district court dismissed plaintiffs' action with prejudice and entered judgment for the defendants. Therefore, under Wong, the district court correctly deemed defendants to be prevailing parties. 38 Moreover, the fact that plaintiffs' Complaint was dismissed with prejudice for lack of subject matter jurisdiction did not deprive the district court of jurisdiction to award defendants attorneys' fees under Hawai'i law. Under the law of our circuit, a district court sitting in diversity may award attorneys' fees to the prevailing party under applicable state law, despite a dismissal of the action for lack of subject matter jurisdiction. See, e.g., Anderson v. Melwani, 179 F.3d 763, 765-66 (9th Cir. 1999) (awarding defendant contractual attorneys' fees under the law of the Commonwealth of the Northern Mariana Islands despite the dismissal of plaintiff's action for lack of subject matter jurisdiction arising from the failure to join an indispensable party); MacKay v. Pfeil , 827 F.2d 540, 542 n.3., 545 (9th Cir. 1987) (holding that plaintiff's action should have been dismissed for lack of subject matter jurisdiction under the Rooker-Feldman doctrine, but noting that the reasons for our holding do nothing to undermine the propriety of the award of attorney's fees under Alaska law). In a diversity action, if state law entitles a prevailing party to attorneys fees for permanently defeat[ing ] [a] lawsuit, that right is not lost by obtaining judgment on procedural grounds. Anderson, 179 F.3d at 766. 39 Here, plaintiffs filed a diversity action, alleging both direct and derivative claims. The district court dismissed all direct claims against defendants with prejudice. The court then dismissed all individual plaintiffs with prejudice, leaving only Kona. Subsequently, the district court dismissed all remaining claims with prejudice and entered judgment in favor of defendants because Kona lacked standing to sue derivatively on behalf of the Companies. The doctrine of res judicata bars all plaintiffs from re-litigating any of their claims. See Lundburg v. Stinson, 695 P.2d 328, 333-34 (Haw. Ct. App. 1985). Therefore, defendants clearly succeeded in permanently defeating all direct claims arising out of this lawsuit and the derivative claims of Kona. 10 40