Opinion ID: 702291
Heading Depth: 1
Heading Rank: 3

Heading: concha ii

Text: 56 Following the dismissal of their state law claims in Concha I, the Conchas filed an action in Los Angeles County Superior Court, alleging violations of state law by the London Defendants, the Brady Defendants, and the Jacobs Defendants (but not the Southland Defendants). The Conchas alleged three state law causes of action against each of the three defendant groups: (1) legal and accounting malpractice; (2) breach of contract; and (3) breach of fiduciary duty. Although the complaint states that it does not involve the administration of an ERISA plan, the factual allegations contained in the complaint essentially concern the defendants' alleged misdeeds in connection with the Plan. 57 Defendants removed Concha II to district court pursuant to 28 U.S.C. Sec. 1441, and under the local court rules the case was assigned to Judge Real, the district judge who presided over Concha I. The Conchas moved to remand, arguing that Judge Real had determined in Concha I that they were without standing under ERISA and, therefore, that the federal court was without subject-matter jurisdiction over the state law claims brought in Concha II. The defendants opposed the motion to remand on the grounds that the Conchas were raising the same state law claims that were at issue in Concha I and that, whether or not they were the same claims, they were preempted by ERISA. The district court denied the motion to remand on each of the grounds stated in the opposition papers filed by the defendants. 58 Before the district court issued its decision denying the motion to remand, the Conchas entered into a joint stipulation with the London and Jacobs Defendants. The stipulation provided that: In the event the plaintiffs' Motion to Remand is denied and the state action is not remanded, plaintiffs will dismiss the state action against [the defendants], with plaintiffs preserving any and all appeal rights in the state action. (emphasis added). Following the court's ruling, the Conchas entered a notice purporting to dismiss the entire action without prejudice pursuant to Fed.R.Civ.P. Rule 41(a)(1). Two days later, the district court entered an order dismissing the complaint against the London Defendants with prejudice.B. Discussion 59 On appeal, the Conchas seek to challenge the district court's denial of their motion to remand to state court. We first conclude that the complaint was dismissed with prejudice under Rule 41(a)(1) as to all defendants. Accordingly, we have jurisdiction over this appeal. On the merits, we conclude the Conchas' motion to remand was properly denied. 60
61 As an initial matter, we must determine whether or not there was an appealable final judgment in this case under 28 U.S.C. Sec. 1291. In the absence of such a judgment, we would be without jurisdiction. 62 The Conchas purported to dismiss their complaint without prejudice under Rule 41(a)(1), after the district court denied their motion to remand. An order refusing to remand is, of course, not a final appealable order under 28 U.S.C. Sec. 1291. Estate of Bishop v. Bechtel Power Corp., 905 F.2d 1272, 1274 (9th Cir.1990); see also 1A Moore's Federal Practice p 0.169[2.-3] (1993). Nor does such an order fall within the collateral order exception to the requirement of finality, Estate of Bishop, 905 F.2d at 1274, although on at least one occasion we have reviewed such an order without stating the basis for our jurisdiction. Oregon Egg Producers v. Andrew, 458 F.2d 382, 383 (9th Cir.1972); see also 1A Moore's Federal Practice p 0.169[2.-3] n. 13. 63 The question in the case before us, then, is whether the dismissal of the Conchas' complaint is a final appealable judgment. Because the parties demonstrate some confusion over whether--and in what circumstances--a voluntary dismissal under Rule 41(a)(1) may constitute such a judgment, we take this opportunity to clarify our law on the subject. 64 Rule 41(a)(1) states, in relevant part, that: 65 An action may be dismissed by the plaintiff without order of the court (i) by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, whichever comes first. 66 Under Rule 41(a)(1), a plaintiff has an absolute right voluntarily to dismiss his action prior to service by the defendant of an answer or a motion for summary judgment. Hamilton v. Shearson-Lehman American Express, Inc., 813 F.2d 1532, 1534 (9th Cir.1987). Even if the defendant has filed a motion to dismiss, the plaintiff may terminate his action voluntarily by filing a notice of dismissal under Rule 41(a)(1). Miller v. Reddin, 422 F.2d 1264, 1265 (9th Cir.1970). The dismissal is effective on filing and no court order is required. Id. The plaintiff may dismiss either some or all of the defendants--or some or all of his claims--through a Rule 41(a)(1) notice. Pedrina v. Chun, 987 F.2d 608, 609 (9th Cir.1993). Filing a notice of voluntary dismissal with the court automatically terminates the action as to the defendants who are the subjects of the notice. Unless otherwise stated, the dismissal is ordinarily without prejudice to the plaintiff's right to commence another action for the same cause against the same defendants. McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 934-35 (9th Cir.1987); see 5 Moore's Federal Practice p 41.02. Such a dismissal leaves the parties as though no action had been brought. Brown v. Hartshorne Public School Dist. No. 1, 926 F.2d 959, 961 (10th Cir.1991). 67 Once the defendant files an answer or a motion for summary judgment, the plaintiff may no longer voluntarily dismiss without a court order under Rule 41(a)(1), but must file a motion for voluntary dismissal under Rule 41(a)(2). Court approval of a Rule 41(a)(2) motion is required. Although the procedure for obtaining a voluntary dismissal under Rule 41(a)(1) is different from the procedure for obtaining voluntary dismissal under Rule 41(a)(2), the rules regarding appealability are generally the same. A voluntary dismissal with prejudice under Rule 41(a)(1) has the same effect as a voluntary dismissal with prejudice under Rule 41(a)(2). By the same token, a voluntary dismissal without prejudice under Rule 41(a)(1) has the same effect as a voluntary dismissal without prejudice under Rule 41(a)(2). See 5 Moore's Federal Practice p 41.02 & . Therefore, in determining whether the Conchas may appeal from a voluntary dismissal under Rule 41(a)(1), we may look to cases that have considered the appealability of voluntary dismissals pursuant to Rule 41(a)(2). 68 Although the Conchas, the London Defendants, and the Brady Defendants appear to assume that a voluntary dismissal without prejudice is an appealable final judgment, that is not the law in this circuit. A voluntary dismissal without prejudice is ordinarily not a final judgment from which the plaintiff may appeal. Coursen v. A.H. Robins Co., Inc., 764 F.2d 1329, 1342, corrected, 773 F.2d 1049 (9th Cir.1985). Nor may a plaintiff appeal from a joint stipulation to voluntary dismissal, entered unconditionally by the court pursuant to a settlement agreement. Seidman v. City of Beverly Hills, 785 F.2d 1447, 1448 (9th Cir.1986); Plasterer's Local Union No. 346 v. Wyland Enterprises, Inc., 819 F.2d 217, 219 (9th Cir.1987). 69 In two cases, however, we have made clear that plaintiffs may appeal from a voluntary dismissal with prejudice, at least where the plaintiff is not acting pursuant to a settlement agreement intended to terminate the litigation. We first articulated this rule in Coursen, stating: While a plaintiff cannot appeal a voluntary dismissal without prejudice, he or she may appeal a dismissal with prejudice. A plaintiff may appeal a voluntary dismissal which imposes a condition that creates sufficient prejudice in a legal sense. Coursen, 764 F.2d at 1342, corrected 773 F.2d 1049 (citations omitted). We reiterated our rule in Unioil, Inc. v. E.F. Hutton & Co., Inc., 809 F.2d 548, 556 (9th Cir.1986), cert. denied, 484 U.S. 822, 108 S.Ct. 83, 98 L.Ed.2d 45 (1987). There, in a carefully reasoned analysis of the issue, we concluded that Coursen held that a dismissal with prejudice was appealable, whether voluntary or involuntary. 809 F.2d 548, 556 (9th Cir.1986). Under Coursen and Unioil, the appealability of a voluntary dismissal ordinarily depends on whether the action was dismissed with or without prejudice. The basic principle we follow is that the plaintiff may appeal a voluntary dismissal only when it is with prejudice to his right to commence another action for the same cause or otherwise subjects him to prejudicial terms or conditions. 7 70 While neither of our earlier cases offers a full explanation of the reasons for permitting appeals from voluntary dismissals that are with prejudice, the rationale underlying our rule is evident. A voluntary dismissal without prejudice is not adverse to the plaintiff's interests. The plaintiff is free to seek an adjudication of the same issue at another time in the same or another forum. Quite the opposite is true with respect to a voluntary dismissal with prejudice. By obtaining such a dismissal, the plaintiff submits to a judgment that serves to bar his claims forever. 71 There are also practical reasons underlying the distinction we draw. A voluntary dismissal with prejudice permits the appellate court to review the action of the district court that the plaintiff believes to be determinative of his claim--the action that caused him to dismiss his case. If the plaintiff prevails on appeal, and the determinative district court ruling is reversed, then his claim is remanded to the district court for further proceedings. However, if the plaintiff is unsuccessful in challenging the district court's action, then the dismissal operates as an adjudication on the merits and the litigation is terminated. Thus, a plaintiff who voluntarily dismisses his action with prejudice, and thereby secures review of an order that would not ordinarily be reviewable until after a trial on the merits, runs a serious risk of losing his claim entirely. Should the appellate court reject his appeal, the dismissal of his action with prejudice stands. The plaintiff is precluded from bringing another action for the same cause, thus forfeiting any possibility of ever obtaining a favorable determination on the merits. Accordingly, permitting appeals from voluntary dismissals with prejudice is not likely to undermine our normal appellate practice by encouraging a flow of appeals that are quasi-interlocutory in nature. To the contrary, it promotes judicial economy. 8 72 In this case, the Conchas seek to challenge the district court's order denying their motion to remand to state court. Whether or not we have jurisdiction to consider the appeal depends, as we have stated, on whether the Conchas' action was dismissed with or without prejudice. At first glance, the answer appears to be clear. The Conchas' notice of voluntary dismissal purports to dismiss the entire action without prejudice. On appeal, the Conchas maintain that their complaint was indeed dismissed without prejudice as to all defendants. If they are correct, then the Conchas would not be limited in their ability to bring another suit for the same cause, and there would consequently be no final judgment from which to appeal. See Unioil, 809 F.2d at 556. Thus, we would have no jurisdiction to consider the Conchas' challenge to the district court's order denying their motion to remand. 73 Things are not, however, quite as simple as they seem. We still must consider whether the Conchas Rule 41(a)(1) dismissal, though labelled a dismissal without prejudice, should nevertheless be treated as a dismissal with prejudice. If so, then we would have jurisdiction to consider the Conchas' appeal of the district court's denial of their motion to remand. In this unusual case, we conclude that the label attached to the dismissal is not dispositive. As we noted in Coursen, the appealability of an order depends on its effect rather than its language. 764 F.2d at 1342 (citing LeCompte v. Mr. Chip, 528 F.2d 601, 603 (5th Cir.1976)). 74 There is no question that the Conchas' 41(a)(1) notice was intended to permit them to appeal the underlying order they considered determinative. Before the district court ruled on the Conchas' motion to remand, the parties entered into stipulations, providing that, if the motion were denied, the Conchas would dismiss their complaint with plaintiffs preserving any and all appeal rights in the state action. This stipulation makes clear that the parties intended that the Conchas be afforded the right to appeal the denial of the motion to remand. Protecting the Conchas' right to appeal could only be accomplished through a dismissal with prejudice. 75 Moreover, it is apparent that the Conchas would have absolutely nothing to gain by filing a voluntary dismissal without prejudice. While a dismissal without prejudice might ordinarily permit them to file a similar action based on the same cause in either state court or federal court, in this case any such filing would be fruitless. The Conchas dismissed their action because they were unwilling to proceed in federal court. Thus, the right to file once again in district court would be of no practical benefit. Only the filing of a subsequent action in state court could offer any prospect of achieving the Conchas' objective. However, that prospect would be wholly illusory. If the Conchas were to file a subsequent action in state court, it would undoubtedly be removed forthwith, thereby putting the Conchas right back in federal court, in precisely the same position in which they were prior to the dismissal. Thus, a voluntary dismissal without prejudice could serve no conceivable purpose in this case. 76 It is therefore clear to us what effect the Conchas, and indeed all the parties, intended the dismissal to have. It was to be a dismissal that would permit an appeal--a dismissal with prejudice. We therefore treat the Conchas' 41(a)(1) notice as a dismissal with prejudice as to all defendants, and conclude that we have jurisdiction to consider whether the district court properly denied the Conchas' motion to remand. 9
77 On the merits, we have little difficulty in concluding that the district court properly denied the Conchas' motion to remand. All three of the state-law claims contained in the Conchas' complaint in Concha II concern the defendants' alleged misdeeds in connection with the Plan. Indeed, the complaint appears merely to restate the allegations contained in the complaint in Concha I. The district court may properly assert federal jurisdiction where the complaint raises claims that fall within ERISA's broad preemptive scope. Felton v. Unisource Corp., 940 F.2d 503, 506-10 (9th Cir.1991). Here, there is no question that the Conchas' claims relate to the administration of an ERISA-covered plan, notwithstanding the self-serving disclaimer inserted on the face of the pleading. Because ERISA preempts the Conchas' state-law claims, and because the Conchas have standing to file an ERISA claim (as explained supra part II.B.3), denial of the Conchas' motion to remand was proper. We affirm the denial of the Conchas' motion and the dismissal with prejudice of the claims in Concha II as to all defendants.