Opinion ID: 1236954
Heading Depth: 3
Heading Rank: 2

Heading: Material alteration in legal relationship

Text: This was the Cadkins' first voluntary dismissal of copyright claims against the Trust and May-Loo. Although the notice of dismissal did not state whether the voluntary dismissal was with or without prejudice, [u]nless the notice or stipulation states otherwise, [a first voluntary] dismissal is without prejudice. Fed.R.Civ.P. 41(a)(1)(B); see also City of S. Pasadena v. Mineta, 284 F.3d 1154, 1157 & n. 2 (9th Cir.2002) (noting first voluntary dismissal is without prejudice unless otherwise specified). The Cadkins' voluntary dismissal does not alter the legal relationship of the parties because [the Trust and May-Loo] remain[] subject to the risk of refiling following a dismissal without prejudice. Oscar, 541 F.3d at 981. We therefore hold the Trust and May-Loo are not prevailing parties and are not entitled to attorney's fees. See id. at 982. We are not persuaded by either of the Trust's and May-Loo's arguments why Oscar does not control here. First, the Trust and May-Loo maintain the legal relationship between the parties changed because the Cadkins waived the copyright claim by omitting it from the second amended complaint, making the voluntary dismissal equivalent to a dismissal with prejudice as to that claim. Although we have consistently held all causes of action alleged in an original complaint which are not alleged in an amended complaint are waived, Marx v. Loral Corp., 87 F.3d 1049, 1055 (9th Cir.1996) (internal quotation marks and alteration omitted), we have never applied this waiver rule to a new lawsuit filed after a voluntary dismissal without prejudice. In fact, we have squarely held waiver in one lawsuit does not carry over to a subsequent lawsuit following a voluntary dismissal without prejudice under Rule 41(a). In City of South Pasadena, 284 F.3d at 1156, the city filed a lawsuit against the state of California, which failed to invoke sovereign immunity, but the city then voluntarily dismissed the lawsuit without prejudice and filed a new cause of action containing many of the same claims. When the state invoked sovereign immunity in the second lawsuit, the district court found the state had waived that defense by failing to assert it in the original lawsuit. See id. On appeal, we held the state had waived immunity in the prior lawsuit, but that waiver had no effect on the new lawsuit following the voluntary dismissal: The city . . . voluntarily dismissed [the first] action pursuant to [Rule] 41(a)(1)(ii). This was the city's first voluntary dismissal, and it was therefore without prejudice. Such a dismissal leaves the situation as if the action never had been. . . . We have adhered slavishly to this interpretation of Rule 41(a). Id. at 1157 (internal quotation marks and footnote omitted). Rejecting the city's argument that there is no categorical rule that waiver of sovereign immunity cannot carry over to a subsequent action, we held [Rule] 41(a)(1) provides a categorical rule that is much broader  one that disallows the `carry-over' of any waivers from a voluntarily dismissed action to its reincarnation. Id. at 1158. The Trust's and May-Loo's attempt to differentiate between waiver of affirmative defenses and waiver of claims is a distinction without significance in light of our characterization of Rule 41(a) as a categorical rule. The Trust and May-Loo also argue the district court's two prior dismissals of the copyright claims are sufficient to confer prevailing party status on them, relying on Watson v. County of Riverside, 300 F.3d 1092, 1093 (9th Cir.2002) (upholding attorney's fees award to plaintiff who had obtained preliminary injunction, but no other relief). Their reliance on Watson is misplaced. There, plaintiff obtained a preliminary injunction to prevent his government employer from presenting certain information at an administrative termination hearing, but his claim for permanent injunctive relief became moot when the administrative hearing was completed. See id. at 1094. Having succeeded in winning a preliminary injunction that prevented the use of his report at the administrative hearing, [plaintiff] obtained significant, court-ordered relief that accomplished one of the main purposes of his lawsuit. Id. at 1096. The change in the employer's behavior carrie[d] all the `judicial imprimatur' necessary to satisfy Buckhannon.  Id. ; see also Buckhannon, 532 U.S. at 603, 121 S.Ct. 1835 (holding `a prevailing party' is one who has been awarded some relief by the court). In contrast, the Trust and May-Loo remain subject to the risk that the Cadkins will refile their copyright claims, despite the district court's orders dismissing without prejudice the original complaint and first amended complaint and the voluntary dismissal without prejudice of the second amended complaint. The Cadkins have not been deprived of the ability to seek relief in federal court against the Trust and May-Loo under the Copyright Act.