Court Opinion

ID: 9479013
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:05:59.058371+00
Date Added: 2024-06-11T17:46:46.580187
License: Public Domain

*989POLITZ, Circuit Judge,
dissenting:
Bill Phillips’ motion to dismiss his personal injury case without prejudice was denied by the trial judge and affirmed by the majority because, given the procedural posture of the case, my colleagues conclude that such a dismissal would result in legal prejudice to Illinois Central Gulf Railroad (ICG). It is precisely because of the procedural posture of the case, and what I perceive to be an injustice to Phillips, that I respectfully dissent.
On July 29, 1985 a tractor-trailer, driven by Phillips, and an ICG locomotive collided near New Orleans. On January 12, 1987 Phillips filed a personal injury suit in state court in the county of his residence in Texas. ICG, a Delaware corporation, removed the case to the Western District of Texas and immediately moved for a dismissal for lack of personal jurisdiction or for a transfer pursuant to 28 U.S.C. § 1404(a) to the Eastern District of Louisiana. Phillips opposed the motions. Dubious of federal jurisdiction, on September 30, 1987 the district court for the Western District of Texas transferred the action to the Eastern District of Louisiana. The court did not indicate whether the transfer was ordered pursuant to 28 U.S.C. § 1404(a)1 or 28 U.S. C. § 1406(a).2
The case was received by the federal court in New Orleans on October 5, 1987. ICG promptly sought a summary judgment dismissal on the grounds that the action was time-barred by Louisiana’s one-year limitation period, in civilian terminology its one-year prescriptive period. Phillips responded by asking for alternative relief: (1) a return to the Western District of Texas; (2) a transfer to the Southern District of Mississippi where the train crew allegedly lived; or (3) a dismissal without prejudice under Fed.R.Civ.P. 41(a)(2).3
The court a quo denied Phillips’ motion and granted ICG a summary judgment, reasoning:
With respect to Plaintiff's Motion to Re-Transfer, it appears that Plaintiff had full opportunity to litigate the jurisdictional issues in the United States District Court in Texas and that Plaintiff did indeed participate in that litigation. This court does not find that any extraordinary circumstances appear or that any post-transfer matters have occurred that would cause this court to reverse, modify or in anyway [sic] disturb the interlocutory findings of the transferor court.
Finally, to permit this case to be dismissed without prejudice, as Plaintiff urges, so that it can be filed in Mississippi would be inappropriate considering the present procedural posture of this case with a Motion for Summary Judgment based on prescription pending. Under these circumstances such a dismissal, while obviously advantageous to the Plaintiff, clearly results in legal prejudice to the Defendant in that the dismissal would negate an otherwise valid prescription defense.

The Transfer Order

Transfers under sections 1404(a) and 1406(a) are discretionary. The pertinent operative language is “in the interest of justice.” If a transfer is found to be in the interest of justice, the court may transfer the case to a district where the action properly would lie. I am convinced beyond peradventure that it cannot be in the interest of justice to transfer a timely-filed *990case4 to a district where the merits will never be considered because the case will meet a certain procedural death due to the statute of limitations applicable in the transferee court.5
Such a result is inconsistent with the policy of deciding disputes on the merits. Indeed it is contrary to the jurisprudential policy “of removing whatever obstacles may impede an expedient and orderly adjudication of cases and controversies on their merits.” Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466-67, 82 S.Ct. 913, 916, 8 L.Ed.2d 39 (1962); see also Haire v. Miller, 447 F.Supp. 57 (N.D.Miss.1977) (finding it not in the interest of justice to transfer a case under 28 U.S.C. § 1406(a) where the suit would be barred by the transferee state’s statute of limitations); Axe-Houghton Fund A, Inc. v. Atlantic Research Corp., 227 F.Supp. 521 (S.D.N.Y.1964) (finding the same and ordering a transfer upon the requirement that the defendants would not thereafter plead the transferee state’s statute of limitations); Greve v. Gibraltar Enter., 85 F.Supp. 410 (D.N.M.1949) (finding that the words “in the interest of justice” included in 28 U.S.C. § 1404(a) must be given “paramount consideration” and ordering a transfer only because of defendant’s agreement to eschew the transferee state’s statute of limitations which, if invoked, would bar plaintiff’s action).
That none might think that I suggest that the transferring judge intentionally acted unjustly, I hasten to add that the court in the Western District of Texas was not told of Louisiana’s prescriptive period, a limitations period which is one-half that of Texas and one-sixth that of Mississippi.6 To the contrary, I am certain that if the court had been informed that limitations had already accrued in Louisiana, it either would have continued with the case in Texas, dismissed it for lack of personal jurisdiction, if that conclusion were reached, or transferred the case to Mississippi where it would not have met a certain demise for an untimely filing.

Dismissal Without Prejudice

In my view, the district court for the Eastern District of Louisiana erred in denying Phillips’ motion to dismiss without prejudice. The court exceeded its range of discretion. As the majority notes, under the law of this circuit a court should grant a Rule 41(a)(2) dismissal without prejudice unless the defendant will suffer thereby clear legal prejudice. This means more than the mere prospect of a trial on the merits. Durham v. Florida East Coast Ry., 385 F.2d 366 (5th Cir.1967). The majority acknowledges this rule but opts to follow decisions which they suggest impel the conclusion that the loss of a prescription defense is per se legal prejudice which precludes a dismissal without prejudice. See Placid Oil Co. v. Ashland Oil, Inc., 792 F.2d 1127 (Temp.Emer.Ct.App.1986); Love v. Silas Mason Co., 66 F.Supp. 753 (W.D.La.1946); Bamdad Mechanic Co. v. United Technologies Corp., 109 F.R.D. 128 (D.Del.1985). First, none of these cases is binding on this panel. Second, and more importantly, I do not accept these cases to be authority for the proposition that the Phillips case could not be dismissed without prejudice. I read these cases, and others the majority has declined to follow, as supportive of the proposition that the court should take a flexible approach to the decision whether the loss of a limitations defense constitutes clear legal prejudice.
I favor a rule which would require the district court to “exercise its broad equitable discretion under Rule 41(a)(2) to weigh the relevant equities and do justice between the parties in each case.” McCants v. Ford Motor Co., Inc., 781 F.2d 855, 857 (11th Cir.1986). In McCants, our colleagues in the Eleventh Circuit affirmed *991a dismissal without prejudice even though the defendant had filed a motion for summary judgment based on Alabama’s one-year statute of limitations, stating that
in most cases a dismissal should be granted unless the defendant will suffer clear legal prejudice, other than the mere prospect of a subsequent lawsuit, as a result. Thus it is no bar to a voluntary dismissal that the plaintiff may obtain some tactical advantage over the defendant in future litigation.
781 F.2d at 856-57 (citations omitted) (emphasis in original).
In reaching the conclusion that dismissal without prejudice was appropriate despite the defendant’s pending limitations defense, the McCants panel placed heavy reliance on our earlier Durham decision wherein we held that the potential loss of a contributory negligence defense did not constitute clear legal prejudice. In Durham we found significant the absence of evidence indicating bad faith on the part of plaintiff’s counsel. The McCants court found a like absence in the case before it.
Two district courts in the Second Circuit have concluded that the loss of a limitations defense did not constitute clear legal prejudice to the defendants. In Germain v. Semco Service Machine Co., 79 F.R.D. 85 (E.D.N.Y.1978), the district court dismissed a complaint without prejudice to enable the plaintiff to take advantage of a longer statute of limitations in another forum. The court rejected the defendant’s claim of prejudice, stating that the defendant had not acquired “a vested interest in the erroneous judgment of plaintiff’s counsel in having sued in New York.” Id. at 86. The court held that “[s]ince litigants generally ought not to be disadvantaged by such errors of counsel, [the loss of a statute-of-limitations defense] should not weigh heavily in the scales.” Id. The court also was impressed by the fact that the case was in the preliminary stages of discovery, resulting in little duplication of effort. And in Klar v. Firestone Tire & Rubber Co., 14 F.R.D. 176 (S.D.N.Y.1953), the court found no abusive intent on the part of the plaintiff and concluded a dismissal without prejudice was warranted to allow the plaintiff to refile and avoid dismissal because of the New York statute of limitations.7
I do not agree with the majority that the decisions in Placid Oil, Bamdad, and Love stand for the proposition that the loss of a prescription defense necessarily results in substantial legal prejudice to the defendant. In Placid Oil the refusal by the Temporary Emergency Court of Appeals to grant a dismissal without prejudice, which would have denied the defendant a statute-of-limitations defense, was footed on its finding that the plaintiff, simultaneously litigating a similar action in another state, was “forum shopping between two federal district courts.” 792 F.2d at 1135. Quoting Judge Learned Hand, the court held that a Rule 41(a)(2) dismissal should be denied “when the plaintiff’s purpose is so to maneuver the litigation that the defendant will lose his existing advantage.” Id. at 1134 (quoting Young v. Southern Pacific Co., 25 F.2d 630, 632 (2d Cir.1928)).
In Bamdad, the District of Delaware also refused to grant a dismissal without prejudice that would have deprived the defendant of a limitations defense under Delaware law. Like the Temporary Emergency Court of Appeals in Placid Oil, the Bamdad court was concerned with unwelcome forum shopping and the fact that the plaintiff was trying to have his cake and *992eat it too, moving to dismiss only after an adverse ruling on the limitations issue:
The problem with characterizing plaintiffs as innocent victims who seek only to try the merits of their case is that they chose to litigate the statute of limitations defense when it was raised here. Plaintiffs had ample opportunity to move to take their case to Connecticut in the eight months that elapsed between defendants’ motion and this Court’s summary judgment order. Instead, plaintiffs filed suit in Connecticut only after briefing, arguing, and losing the statute of limitations issue in this Court, failing to obtain reargument, and appealing to the Court of Appeals.
109 F.R.D. at 133; see also id. at 132 n. 4 (distinguishing the facts of Klar and Bol-ten).
That leaves, then, the Love case, a suit involving a claim for overtime pay under the Fair Labor Standards Act. After the defendant filed a plea of prescription based on Louisiana’s one-year statute of limitations, the plaintiff filed a motion to dismiss without prejudice to escape the prescriptive bar. In refusing to grant that motion, the court noted that any judgment recovered by the plaintiff would have to be paid by the government, which had contracted with the defendant employer for the production of wartime munitions. 66 F.Supp. at 754. The emphasis the court placed on protecting the public fisc vitiates the precedential value of Love in the factual situation presented in the Phillips litigation.
In my opinion, whether a defendant will suffer clear legal prejudice by the loss of a prescription or limitations defense as a result of a Rule 41(a)(2) dismissal without prejudice should be determined on a case-by-case basis, and not by application of a hard and fast rule. The nature and demographics of the suit, the timing of the motion, and the conduct and motive of the plaintiff are all factors to be weighed. The equities of the situation are to be assessed carefully. Doing so in the case at bar inexorably leads me to the conclusion that the district court erred in refusing to grant Phillips’ motion to dismiss without prejudice.
Phillips filed suit in the state court of his Texas residence. Suit was timely under Texas law. As a consequence of forces beyond his control the litigation was removed to federal court in Texas from which it was transferred “in the interests of justice” to a federal court in Louisiana where it faced a certain procedural demise. Phillips’ counsel may have demonstrated a lack of legal acuity, but the record contains no hint of ill motive or bad faith. There has been no maneuvering to gain unfair advantage. Phillips seeks only a trial on the merits. He should be allowed an opportunity to secure such, if a forum for same is available.

. 28 U.S.C. § 1404(a) provides:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.

. 28 U.S.C. § 1406(a) provides:
The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.

.Fed.R.Civ.P. 41(a)(2) provides in pertinent part:
[A]n action shall not be dismissed at the plaintiffs instance save upon order of the court and upon such terms and conditions as the court deems proper ... Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice.

. The statute of limitations for filing actions of this kind in Texas is two years. Civ.Prac. & Rem. § 16.003. Suit was filed on January 12, 1987, less than 18 months after the accident.

. Louisiana Civil Code art. 3492 establishes a one-year prescriptive period for tort suits.

. The Mississippi statute of limitations for personal injury actions is six years. Miss.Code Ann. § 15-1-49.

. In Bolten v. General Motors Corp., 180 F.2d 379, 381 (7th Cir.), cert. denied, 340 U.S. 813, 71 S.Ct. 41, 95 L.Ed. 598 (1950), the Seventh Circuit held that a plaintiff has an absolute right to dismiss under Rule 41(a)(2), restricted only by the requirement that it be done "upon order of the court and upon such terms and conditions as the court deems proper.” Although the court acknowledged that in some situations a defendant might acquire substantive legal rights that could not be protected adequately by any terms and conditions the court might impose, it found that the loss of a limitations defense did not constitute legal prejudice. The Seventh Circuit subsequently abandoned the view expressed in Bolten that a plaintiff has an absolute right of dismissal under Rule 41(a)(2). Grivas v. Parmelee Transp. Co., 207 F.2d 334 (7th Cir.1953), cert. denied, 347 U.S. 913, 74 S.Ct. 477, 98 L.Ed. 1069 (1954). Thus, it is uncertain whether the ruling in Bolten with respect to the loss of a limitations defense remains the law of that circuit.