Court Opinion

ID: 9493210
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:01:18.338526+00
Date Added: 2024-06-11T17:55:42.882660
License: Public Domain

*635O’MALLEY, District Judge,
concurring in part and dissenting in part.
Although the majority eloquently deals with a number of difficult concepts, I can only concur in part in the conclusions the majority reaches. Specifically, I concur in the result reached in Sections II.A, and in both the reasoning and conclusion contained in Section II.B.2, of the majority opinion; I respectfully dissent, however, from Section II.B.l of the majority opinion, and would have declined to address certain matters discussed in Section II.A because they are unnecessary to a resolution of this appeal.
I.
I agree that this Court has jurisdiction to consider the issues raised in the Duffys’ appeal. The district court’s dismissal of the Duffys’ “refiled” action was a final appealable order, vesting this Court with jurisdiction to consider the rulings upon which that dismissal was premised.1 The Duffys’ refiled action was dismissed because the Duffys would not or could not satisfy certain conditions the district court imposed on refiling. In order to assess the propriety of the dismissal, this Court can and, indeed, must assess the validity of the conditions which were the predicate for that dismissal.2 This is true, regardless of when those conditions were imposed.
In light of the conclusion that the district court’s dismissal of the refiled action gave rise to an appealable order, a conclusion with which the majority agrees, I would have declined to reach the question of whether the district court’s dismissal of the original action, with its stringent conditions, was otherwise appealable. The question of what constitutes “legal prejudice” in the context of Rule 41(a)(2) dismissals is a complex, fact-specific one. I do not believe it is useful to engage in a discussion which could be read to establish parameters for this legal concept when that discussion is unnecessary to the Court’s determination of the appeal before it.3
I also agree that the district court abused its discretion in imposing a law-of-the-case rule upon the refiling of an action by the Duffys. Like the majority, I agree that such an order can be appropriate in some circumstances, and that the district court would be free to reach the same conclusions if presented with the same evi-dentiary questions in a new action. Also like the majority, however, I agree that the district court should not have applied an across-the-board law-of-the-case ruling as a condition precedent to refiling, in the absence of some prior notification to the parties of its intention to do so.
When the Duffys’ counsel sought dismissal mid-trial, the district court had several choices: to deny the request, to grant it unconditionally, or to grant it upon specified conditions. The district court chose the last of these routes; the court expressly granted the Duffys’ request upon the condition that the Duffys pay defendant’s costs. Thus, when the Duffys did dismiss this action, it was with the belief that, at some financial cost, a refiled action would provide them an opportunity to cure the *636discovery or evidentiary mistakes made to date. The district court did nothing to disabuse the Duffys or their counsel of the belief that, subject to the payment of costs, they would be permitted to “press the restart button” upon dismissal of their first action. The district court’s post-hoc decision to impose different conditions, after dismissal and after release of the jury, left the Duffys in the position of having to pay the defendant for the privilege of retrying the case for which their counsel was ill-prepared in the first instance. While the district court could have presented this “choice” to the Duffys and their counsel before dismissal, a choice the Duffys likely would have rejected, it did not do so. The district court’s belated law-of-the-case ruling rendered the Duffys dismissal useless from a strategy standpoint and constituted an abuse of the court’s discretion under Rule 41(a)(2).4
I respectfully dissent, however, from the majority’s conclusion that the district court abused its discretion when it imposed Ford’s attorney fees and costs upon the Duffys, rather than their counsel, as a condition of refiling. And, I dissent from the conclusion that the district court had an obligation “to give the Duffys notice of the approximate amount of costs for which they would be responsible upon refiling” prior to entering an order granting the Duffys’ request for dismissal. (Majority opinion at 630)
II.
As to the first of these conclusions, a review of the transcript reveals that the trial court made clear to all present during the proceedings, including the Duffys, that plaintiffs would be required to pay defendant’s costs as a condition of any refiling of their dismissed action. Neither the district court, nor any party, nor counsel made any reference to the payment of costs by counsel, and counsel certainly made no commitment on the record that they would be willing to share the burden of those costs. Indeed, it appears that, in considering the question of “costs,” the parties were referring to the language of Rule 41(d) of the Federal Rules of Civil Procedure, which expressly provides that, upon refiling of a dismissed action, “the court may make such order for the payment of costs of the action previously dismissed as it may deem proper and may stay the proceedings in the action until the plaintiff has complied with the order.” Rule 41(d) F.R.C.P. (emphasis added).5 Thus, the record reveals that notice of the district court’s intention to impose costs upon the Duffys themselves as a condition to refiling was provided prior to the dismissal entry.
There is, moreover, no apparent mechanism by which the district court could have imposed Ford’s costs upon counsel rather than the Duffys. First, as noted, the text of Rule 41(d) discusses the imposition of costs upon the plaintiffs, not counsel.6 *637Next, the costs were not imposed unconditionally; they were imposed as a condition to the refiling of a new action. While the Duffys necessarily would be involved in any such refiling, counsel might not be; counsel could withdraw or be replaced before the event triggering the obligation to pay costs ever occurred. Indeed, that is precisely what happened here — the Thom-ases were replaced and were no longer counsel of record when the refiling occurred. It would be difficult for the district court to condition the Duffys’ right to refile upon the performance of an act by someone no longer involved in the litigation.
Finally, as the majority makes a point of noting, the district court neither sanctioned the Thomases, nor made findings against the Thomases evidencing a clear intention to do so.7 While a district court surely has the discretion to impose sanctions upon counsel for a variety of behaviors, it is under no obligation to do so in the absence of a motion from the opposing party seeking such sanctions or a record which reflects a clear factual predicate for doing so.
If it truly was counsel’s failures alone which caused the first trial to be aborted, it does seem unfair to impose the burden of Ford’s costs fully upon the Duffys. That is precisely what Rule 41(d) authorizes the district court to do, however, and precisely what this district court indicated it would do if the first action were dismissed mid-trial. There are, moreover, mechanisms for the shifting of costs between client and errant counsel (e.g., malpractice claims, contract actions, so on), which avoid placing the burden of their internecine disputes upon third parties, such as Ford or the court.8 I would let the Duffys resort to those mechanisms for help in reviving their claims (or redirecting them altogether) and decline to find that the district court abused its discretion in doing precisely what the Federal Rules of Civil Procedure allow it to do.
III.
I also disagree strongly with the majority’s conclusion that the district court was obligated to: (1) determine the approximate amount of “costs” the Duffys might face upon refiling of their action; and (2) provide the Duffys with notice of that figure before accepting the Duffys’ motion to dismiss. Not only is such an obligation inconsistent with the authority granted to district courts under the Federal Rules of Civil Procedure, it imposes a burden on trial courts which would be unworkable in practice.
The majority concludes that Rule 41(a) contains a notice requirement — that is, that a district court may not condition a voluntary dismissal without prejudice upon a requirement that is not disclosed to the party seeking dismissal before dismissal occurs. The majority then concludes that the district court violated this notice requirement by failing to: (1) calculate the approximate dollar amount of the costs the Duffys would be required to pay upon refiling; (2) inform the Duffys of that dollar figure; and (3) give the Duffys the chance to reassess the merits of their pending motion to dismiss. As I noted earlier, when discussing the impropriety of the district court’s belated imposition of a law-of-the-case condition on the Duffys’ dismissal, I agree that Rule 41(a) generally implies a notice obligation — i.e., a district *638court generally may not “condition” a dismissal upon a requirement that is neither disclosed nor contemplated by the parties prior to the effective date of that dismissal. But, I cannot agree that this notice requirement commands the unwieldy procedure the majority imposes here.
A review of the transcript reveals that the Duffys were put on notice that their dismissal would be conditioned on the payment of costs and were put on notice that these “costs” would include whatever costs might be authorized under “the rules.” Thus, there is no doubt that the Duffys and their counsel were aware both that costs would be imposed and that it was the Duffys who would bear the risk that those costs might entail more than they hoped. This notice is surely sufficient to meet the requirements of Rule 41(a); indeed, there is nothing in the text of Rule 41(a) or in the cases considering it that justifies imposing any greater obligation on the district court.
The majority, however, believes that the district court abused its discretion in this case because, when faced with a motion to dismiss mid-trial, it failed to suspend the proceedings, require Ford to calculate its costs and attorney fees, provide that information to the Duffys and their counsel, and give the Duffys time to contemplate their decision to abandon prosecution of their case. This exercise would have required Ford’s counsel to divert its attention from trial and calculate their time and accompanying fees, and would have required the district court to make an initial assessment of the reasonableness of those charges and of the legal definition of costs under the Federal Rules, all while the jury was being asked to sit and wait, and all so the Duffys could decide what strategy best suited them at that point in time. I cannot agree that Rule 41(a) mandates such an accommodating approach to plaintiffs who seek to dismiss actions which have matured to the point of trial.
The text of Rule 41(d), moreover, lends further support to the conclusion that the district court was not required to provide a cost estimate to the Duffys. Rule 41(d) grants a district court the authority to impose costs (including attorney fees, according to case law)9 on a plaintiff upon the refiling of an action previously dismissed in any court, whether or not the earlier dismissal was conditioned upon the threat of such costs. This rule, not cited by the majority at all, contains an independent grant of authority to impose costs. The authority granted in Rule 41(d) is not dependent upon notice to plaintiffs; the text of the rule itself constitutes such notice. Thus, I would find that the district court retained the authority under Rule 41(d) to impose costs upon the Duffys, even in the absence of notice of its intention to do so.
IV.
While I am not without some sympathy for the position in which the Duffys find themselves, and respect the majority’s effort to deal with these difficult issues, I cannot agree with all of the conclusions the majority reaches. I would reverse the dismissal of the Duffys’ refiled action, vacate the district court’s decision to impose a law-of-the-case rule upon refiling, and remand with directions to provide the Duffys a renewed opportunity to satisfy the condition of payment of Ford’s costs *639imposed by the trial court.10

. As the majority points out, while the dismissal entry stated that it was "without prejudice,” the practical effect of the dismissal was to forever bar the Duffys’ claims. Thus, despite the characterization, the dismissal was certainly an "involuntary adverse judgment” from which an appeal does lie.

. The two conditions imposed in this case must be considered in tandem. While the Duffys primarily focus on their inability to pay Ford’s costs as a condition of refiling, the additional law-of-the-case condition affects the value of that refiling to the Duffys and, thus, is pertinent to the nature of the burden created by the district court’s imposition of costs.

.If pressed to address the issue, I would be inclined to find that "legal prejudice” did arise from imposition of the law-of-the-case condition on the Duffys’ original dismissal; I would do so for the same reasons the majority later concludes the district court abused its discretion by insisting on compliance with that same condition.

. Again, it is important to emphasize that it would not be an abuse of discretion to impose conditions on a dismissal which are so onerous as to render dismissal undesirable, provided, however, that some notice of those conditions occurs before dismissal, or at least at a point when reinstatement upon rejection of the conditions remains feasible. That is not what occurred here. .

. While no party specifically referred to Rule 41(d) on the record, it appears from the context of the discussion that the parties and the court were referring to the text of Rule 41 when discussing the motion to dismiss and the imposition of costs upon refiling. (See J.A. at 325-330, where the court refers to the concept of refiling "costs” under "the rules” and the Duffys’ counsel discusses examining the cost question for over thirty minutes prior to making the motion to dismiss). It is also clear, moreover, that the only section of Rule 41 which mentions the concept of costs, particularly costs imposed upon refiling, is Rule 41(d).

.Indeed, in all instances in which a district court conditioned refiling of a case upon payment of costs, I could find only one where the plaintiffs counsel (as opposed to the plaintiff himself) was ordered to make payment. See Whitehead v. Miller Brewing Co., 126 F.R.D. 581 (M.D.Ga.1989). And even in Whitehead, the district court characterized its decision to *637impose payment of costs on counsel as a sanction for "willful abuse [of] judicial processes.” Id. at 583 (citation omitted). The Whitehead court enforced this "sanction” by allowing counsel to withdraw from the refiled case only after payment of the costs.

. The district court characterized the performance of the Thomases as "inept,” but did not find or suggest that their actions were sanctionable.

. Indeed, at oral argument current counsel for the Duffys indicated that the Duffys have asserted a malpractice claim against the Thomases.

. See Esquivel v. Arau, 913 F.Supp. 1382, 1388-92 (N.D.Cal.1996) (undertaking a thorough analysis and holding that attorney fees may always be awarded under rule 41(d)); Edward X. Clinton, Jr., Does Rule 41(d) Authorize an Award of Attorney’s Fees?, 11 St. John's L.Rev. 81, 82 (1997) ("[m]ost courts that have addressed the' issue have held that fees may be awarded”); hut see Anders v. FPA Corp., 164 F.R.D. 383, 388-90 (D.N.J.1995) (holding that attorney fees may not be awarded under Rule 41(d) unless the underlying action already allows for shifting of attorney fees).

. Again, I would provide this renewed opportunity to satisfy the cost condition because the value of, or burden imposed by, that condition is materially different in the absence of the concomitant law-of-the-case condition.