Opinion ID: 63782
Heading Depth: 2
Heading Rank: 1

Heading: Service as to USAA

Text: Rule 4(m) permits a district court to dismiss a case without prejudice if the plaintiff fails to serve the defendant within 120 days of filing the complaint. Thompson v. Brown, 91 F.3d 20, 21 (5th Cir. 1996). If, however, the plaintiff can establish good cause for failing to serve the defendant, the court must extend the time for service. Id. Even if the plaintiff lacks good cause, the court has discretionary power to extend the time for service. Id. A discretionary extension may be warranted, for example, if the applicable statute of limitations would bar the refiled action, or if the defendant is evading service or conceals a defect in attempted service. FED.R.CIV.P. 4(m) advisory committee's note (1993). Assuming arguendo that Millan cannot show good cause, we find that the district court erred in refusing to grant Millan additional time for service under the discretionary provisions of Rule 4(m). Millan argues, and USAA GIC agrees, that where the applicable statute of limitations likely bars future litigation, a district court's dismissal of claims under Rule 4(m) should be reviewed under the same heightened standard used to review a dismissal with prejudice. [5] See Boazman v. Econ. Lab., Inc., 537 F.2d 210, 213 (5th Cir.1976) (where the dismissal is without prejudice, but the applicable statute of limitations probably bars further litigation, the standard of review of the District Court's dismissal should be the same as is used when reviewing a dismissal with prejudice.). We have recognized that dismissal with prejudice is an extreme sanction that deprives a litigant of the opportunity to pursue his claim. Gonzalez v. Firestone Tire & Rubber Co., 610 F.2d 241, 247 (5th Cir. 1980). Consequently, this Court has limited district courts' discretion to dismiss claims with prejudice. See Price v. McGlathery, 792 F.2d 472, 474 (5th Cir. 1986). A district court's dismissal with prejudice is warranted only where `a clear record of delay or contumacious conduct by the plaintiff' exists and a `lesser sanction would not better serve the interests of justice.' Gray v. Fid. Acceptance Corp., 634 F.2d 226, 227 (5th Cir.1981) (quoting Durham v. Fla. East Coast Railway Co., 385 F.2d 366, 368 (5th Cir.1967), and Brown v. Thompson, 430 F.2d 1214, 1216 (5th Cir.1970)). Additionally, where this Court has affirmed dismissals with prejudice, it has generally found at least one of three aggravating factors: (1) delay caused by [the] plaintiff himself and not his attorney; (2) actual prejudice to the defendant; or (3) delay caused by intentional conduct. McGlathery, 792 F.2d at 474. Millan and USAA GIC agree that dismissal of Millan's claims will likely have the effect of dismissal with prejudice and thus should be reviewed under this heightened standard. Although the heightened standard of review is generally applied to dismissals for failure to prosecute after the defendant has been served, we have also used it to review dismissals for failure to prosecute where the underlying basis was untimely or insufficient service. Sealed Appellant v. Sealed Appellee, 452 F.3d 415, 416-18 (5th Cir.2006); Porter v. Beaumont Enters. & Journal, 743 F.2d 269, 271-72 (5th Cir.1984); Veazey v. Young's Yacht Sale & Serv., Inc., 644 F.2d 475, 476-77 (5th Cir.1981). [6] We fail to see any principled reason why a district court's dismissal of claims due to a delay between filing and service should be subjected to a lower standard of review merely because the district court characterizes the delay as a failure to timely or properly serve the defendant, as opposed to a failure to prosecute. Indeed, the heightened standard of review is to be applied to the equivalent of a Rule 41(b) dismissal. Berry v. CIGNA/RSI-CIGNA, 975 F.2d 1188, 1190 (5th Cir.1992). Accordingly, we apply that standard to review the district court's dismissal of Millan's claims under Rule 4(m).
This Court has recognized that delay which warrants dismissal with prejudice must be longer than just a few months; instead, the delay must be characterized by `significant periods of total inactivity.' McNeal v. Papasan, 842 F.2d 787, 791 (5th Cir.1988) (quoting John v. Louisiana, 828 F.2d 1129, 1131 (5th Cir.1987)). Our precedents have generally reserved dismissals with prejudice for egregious and sometimes outrageous delays. Rogers v. Kroger Co., 669 F.2d 317, 321 (5th Cir.1982). In short, these are cases where the plaintiff's conduct has threatened the integrity of the judicial process, often to the prejudice of the defense, leaving the court no choice but to deny that plaintiff its benefits. Id. We do not perceive a clear record of delay in this case. Millan served USAA four days after the Rule 4(m) deadline for service, after making two attempts at service within the 120 days. Likewise, the record does not establish that Millan's delays in effecting service resulted from contumacious conduct. We have recognized that it is not a party's negligenceregardless of how careless, inconsiderate, or understandably exasperatingthat makes conduct contumacious; instead it is the `stubborn resistance to authority' which justifies a dismissal with prejudice. McNeal, 842 F.2d at 792 (quoting John, 828 F.2d at 1131-32); see also Gray, 634 F.2d at 227-28 (finding delay caused by plaintiff's negligent, but not contumacious conduct, insufficient to warrant dismissal with prejudice). Millan's conduct, while certainly negligent, cannot be characterized as contumacious. Indeed, Millan complied with the district court's order by filing the return of service upon USAA into the record by October 9, 2007. The court then issued an order in the case to pass for 30 days; obtain answer or default, suggesting that the court believed Millan had complied with its order. This conduct is far short of contumacious.
Further, the record in this case does not contain any of the three aggravating factors listed above. First, arguably the delay in this case resulted from Millan's actions in his capacity as a lawyer, rather than in his capacity as a litigant. Second, the only potential prejudice identified by USAA GIC is that of having to defend the case on its merits and the possibility of someone having to pay damages to Millan. That is not the sort of prejudice that requires dismissal. Finally, as mentioned, the delay in this case resulted from Millan's negligence; no evidence shows intentional misconduct.