Court Opinion

ID: 2658493
Source: CourtListenerOpinion
Date Created: 2014-03-28 18:55:38.296477+00
Date Added: 2024-06-11T13:00:59.532606
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 13-1889

DAWN FLORES; ALFRED E. FLORES,

                Plaintiffs – Appellants,

           v.

ETHICON, INC.; JOHNSON & JOHNSON; STEVEN A. SCHEUER, M.D.;
GREATER LONG BEACH GENITO-URINARY MEDICAL GROUP, INC.; ST.
MARY MEDICAL CENTER; DIGNITY HEALTH; DOES 1-100, Inclusive,

                Defendants – Appellees.

Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston.  Joseph R. Goodwin,
District Judge. (2:12-cv-01804)

Argued:   January 29, 2014                 Decided:   March 28, 2014

Before DUNCAN, KEENAN, and WYNN, Circuit Judges.

Affirmed by unpublished opinion.      Judge Duncan wrote the
opinion, in which Judge Keenan concurred.   Judge Wynn wrote a
separate opinion dissenting in part.

ARGUED: Daniel Mitchell Graham, DANIEL M. GRAHAM, APC, Torrance,
California, for Appellants. Philip Combs, THOMAS COMBS & SPANN,
PLLC, Charleston, West Virginia, for Appellees.       ON BRIEF:
Gerald P. Peters, LAW OFFICE OF GERALD PHILIP PETERS, Thousand
Oaks, California, for Appellants.    David B. Thomas, Daniel R.
Higginbotham, THOMAS COMBS & SPANN, PLLC, Charleston, West
Virginia; Susanna M. Moldoveanu, BUTLER, SNOW, O'MARA, STEVENS &
CANNADA, PLLC, Memphis, Tennessee; Christy D. Jones, John C.
Henegan, BUTLER, SNOW, O'MARA, STEVENS &          CANNADA, PLLC,
Ridgeland, Mississippi, for Appellees Ethicon,   Incorporated and
Johnson & Johnson.   David P. Pruett, CARROLL,    KELLY, TROTTER,
FRANZEN & MCKENNA, Long Beach, California, for   Appellee Dignity
Health.

Unpublished opinions are not binding precedent in this circuit.

                                2
DUNCAN, Circuit Judge:

        Appellant Dawn Flores 1 appeals from the district court's

denial       of   her   motion       to   remand     to   California      state    court,

dismissal of her action without prejudice, and denial of her

motion to reconsider the dismissal and reinstate the action.

Flores contends that the district court lacked subject matter

jurisdiction because her complaint alleged a viable cause of

action against non-diverse defendants and that it abused its

discretion by dismissing her case for failure to comply with a

scheduling order.            For the reasons that follow we affirm.

                                             I.

     On December 29, 2003, Flores underwent surgery at St. Mary

Medical      Center     in    Long    Beach,      California     to   implant      in   her

pelvic cavity a transvaginal mesh sling produced and distributed

by Ethicon, Inc. and Johnson & Johnson (“J&J”).                       The mesh device

was implanted by Dr. Steven A. Scheuer, a member of Greater Long

Beach       Genito-Urinary       Medical     Group,       Inc.   (“GLBG”),    to    treat

Flores’s stress urinary incontinence.                      During the life of the

implant, which was removed on July 21, 2011, Flores developed

pelvic      infections,       hematuria,       and   necrosis     which    she    alleges

        1
       Dawn Flores’s husband, Alfred Flores, is also an appellant
but because all of his claims are derivative of hers, for
convenience we refer to only Mrs. Flores throughout.

                                             3
resulted      from     the    erosion        of    the   mesh     into      adjacent      pelvic

organs.

     On    March       14,    2012,       Flores      initiated    this      action      in    the

Superior Court of Los Angeles County, California against Ethicon

and J&J, New Jersey corporations, and Scheuer, GLBG, and Dignity

Health d/b/a St. Mary Medical Center, California residents and

entities. 2        Flores’s      complaint            raises    claims      of    negligence,

strict     products      liability,          breach      of    warranty,         and    loss   of

consortium.        On May 10, 2012, Ethicon and J&J removed the action

to   the    Central      District           of    California      contending           that    the

California      defendants           were    fraudulently         joined      and      that    the

district court therefore possessed subject-matter jurisdiction

to hear the case.            Flores filed a timely motion to remand on May

24, 2012.

     On     May    30,       2012,    the        Judicial     Panel    on    Multi-District

Litigation transferred Flores’s action to the Southern District

of West Virginia and consolidated it with thousands of similar

cases against Ethicon (the “MDL”).                          Flores’s motion to remand

remained pending before the district court.                           On October 4, 2012,

the district court entered Pretrial Order 17, requiring all MDL

plaintiffs        to   submit        an     abbreviated        Plaintiff      Profile         Form

     2
       Flores also names “Does 1-100” but the citizenship of
fictitious parties is not relevant for purposes of determining
diversity jurisdiction. 28 U.S.C. § 1441(b).

                                                  4
(“PPF”)        containing        preliminary           interrogatory           responses,

including medical information, by December 3, 2012.                             Order 17,

whose    terms       were   agreed    upon       by   lead     counsel    for    the     MDL

plaintiffs and defense counsel, provides that “[i]f a plaintiff

does not submit a PPF within the time specified in this Order,

defendants may move immediately to dismiss that plaintiff’s case

without       first    resorting      to   [this       Order’s]     deficiency          cure

procedures.”         J.A. 281.

       Flores did not submit a timely PPF.                     On December 28, 2012,

Ethicon       moved    to   dismiss    Flores’s         case    with     prejudice       for

failure to comply with Order 17.                  Flores contended in opposition

that    she    was    reasonably     concerned        that   filing      the    PPF    would

waive her right to remand.                 On April 10, 2013, the district

court     denied      Flores’    motion          to   remand,     holding       that     the

California defendants were fraudulently joined because there was

no possibility that Flores could prevail against them in state

court on any cause of action raised in her complaint.                                 On May

20, 2013, the district court granted Ethicon’s motion in part,

dismissing       Flores’s     case    without         prejudice    for     her    ongoing

failure to submit a PPF.              Flores filed a motion to reconsider

the dismissal and reinstate her action which the district court

                                             5
denied on June 18, 2013.           At the time of the parties’ oral

argument on appeal, Flores had never submitted a PPF. 3

                                        II.

     We   review     “questions    of    subject    matter      jurisdiction   de

novo, ‘including those relating to the propriety of removal.’”

Md. Stadium Auth. v. Ellerbe Becket, Inc., 407 F.3d 255, 260

(4th Cir. 2005) (quoting Mayes v. Rapoport, 198 F.3d 457, 460

(4th Cir. 1999)).       The party seeking removal bears the burden of

establishing jurisdiction and we construe removal jurisdiction

strictly.     Id.    “If federal jurisdiction is doubtful, a remand

is necessary.”       Mulcahey v. Columbia Organic Chems. Co., 29 F.3d
148, 151 (4th Cir. 1994).

     We     review   for   abuse   of        discretion   the    imposition     of

sanctions for violation of a scheduling or discovery order.                    See

     3
        Prior to filing her appeal in this action, Flores
initiated a second action raising the same claims against the
same defendants in California Superior Court.      We raised the
question of whether this later action rendered the appeal before
us moot.    The parties agree, and we now hold, that Flores’s
appeal is not mooted by her pending state court action because
she has a continuing cognizable interest in the outcome of the
appeal.   Specifically, if we affirm the dismissal of Flores’s
first case, the statute of limitations may not be tolled in
relation to her later filed case, see Wood v. Elling Corp., 572
F.2d 755, 758 (Cal. 1977), and she would then be susceptible to
a statute of limitations defense. We are persuaded by the First
Circuit’s rule that a cognizable interest in the earlier filed
case persists in such circumstances. See Patriot Cinemas, Inc.
v. General Cinema Corp., 834 F.2d 208, 215-16 (1st Cir. 1987).

                                         6
Fed. R. Civ. P. 16(f); Rabb v. Amatex Corp., 769 F.2d 996, 999-

1000 (4th Cir. 1985).                 We review the denial of a Rule 59(e)

motion    for    abuse       of   discretion.             Robinson    v.     Wix   Filtration

Corp. LLC, 599 F.3d 403, 407 (4th Cir. 2010).                          “A district court

abuses its discretion when it acts arbitrarily or irrationally,

fails to consider judicially recognized factors constraining its

exercise of discretion, relies on erroneous factual or legal

premises,       or    commits      an    error       of    law.”       United      States      v.

Delfino, 510 F.3d 468, 470 (4th Cir. 2007).

                                            III.

       The district court denied remand on the ground that the

California       defendants,          Scheuer,       GLBG,     and     St.    Mary       Medical

Center,      were          fraudulently     joined           because       there         was   no

possibility       that       Flores     could       prevail    on    any     of    her    claims

against them in state court.                        On appeal Flores contends only

that   she      alleged       a   cognizable         claim    against        the   California

defendants for negligent failure to warn.

       Under the fraudulent joinder doctrine, a district court may

“disregard,          for     jurisdictional         purposes,       the    citizenship         of

certain nondiverse defendants, assume jurisdiction over a case,

dismiss      the           nondiverse     defendants,           and        thereby        retain

jurisdiction.”             Mayes, 198 F.3d at 461.                  To establish that a

defendant has been fraudulently joined, “the removing party must

                                                7
establish     either:       [t]hat    there    is    no   possibility        that    the

plaintiff would be able to establish a cause of action against

the in-state defendant in state court; or [t]hat there has been

outright     fraud    in    the    plaintiff's      pleading    of    jurisdictional

facts.”      Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th

Cir. 1993) (internal quotation marks omitted).

       The burden of showing no possibility of relief is heavy.

The    removing      party    “must     show     that     the    plaintiff     cannot

establish a claim against the nondiverse defendant even after

resolving all issues of fact and law in the plaintiff's favor.”

Id. at 232-33.          The standard is “even more favorable to the

plaintiff than the standard for ruling on a motion to dismiss

under Fed. R. Civ. P. 12(b)(6).”                    Hartley v. CSX Transport,

Inc., 187 F.3d 422, 424 (4th Cir. 1999).                   In fact, “‘there need

be only a slight possibility of a right to relief’ to defeat a

claim of fraudulent joinder.”              Mayes, 198 F.3d at 464 (quoting

Hartley, 187 F.3d at 426).

       Contrary to Flores’s contention, we are only permitted, not

required,     to     look    beyond     the    complaint        to    determine      the

propriety of removal.             Hartley, 187 F.3d at 426 (“[T]he court is

not bound by the allegations of the pleadings, but may instead

consider the entire record, and determine the basis of joinder

by    any   means    available.”      (emphasis     added)).         While   the    vast

majority of decisions in this Circuit review the entire record,

                                          8
and as a consequence, fraudulent joinder is typically only found

in   cases     of    legal    impossibility,       that      analysis    produces     the

exact result that the doctrine intends to prevent in a case such

as this.       Where a complaint is so inadequate and the record so

entirely lacking in factual support that we can only reasonably

conclude that the non-diverse defendants were added to defeat

jurisdiction, analysis of the entire record works an injustice

on the removing party.

        The extent of Flores’s allegations against the California

defendants is an assertion that all of the defendants, diverse

and non-diverse, “were negligent in failing to use reasonable

care      in     designing,       manufacturing,             marketing,        labeling,

packaging, supplying and selling the Product.”                          J.A. 32.      The

complaint contains no allegations of specific actions by the

California defendants that fell below a standard of reasonable

care.     The only theory of liability that Flores maintains on

appeal,      negligent       failure   to       warn,   is     not   alleged     in   the

complaint      and    was     never    argued      before      the   district    court.

Flores’ only reason for raising it now is the district court’s

creation and rejection of that argument in its order denying

remand.        It is unsurprising then that the complaint fails to

allege     two      necessary     elements        of    that     theory,    that      the

California defendants knew or should have known of the dangers

of the mesh implant and that consequently their failure to warn

                                            9
Flores       was    unreasonable,        in    even       a   conclusory   manner.        See

Carlin v. Superior Court, 920 P.2d 1347, 1351-52 (Cal. 1996).

Moreover,          there    are   no    factual         allegations   in   the       complaint

which would allow a court to reasonably infer such knowledge and

no     factual       basis     in      the    record      for     Flores   to    make     such

allegations, a fact which she admits repeatedly.                                Appellants’

Br. 25 4, 28 5.

       Contrary        to     Flores’s        assertion,        California      is    a   fact

pleading state.              A complaint must “state[] facts sufficient to

constitute a cause of action” when it is given “a reasonable

interpretation, reading it as a whole and its parts in their

context.”          City of Dinuba v. County of Tulare, 161 P.3d 1168,

1171       (Cal.    2007).        Unlike      in    a    notice   pleading      state,    when

assessing the sufficiency of the complaint, California courts

assume the truth of “all material facts properly pleaded, but do

not assume the truth of contentions, deductions or conclusions

of law.”       Id.         As articulated above, Flores has not alleged any

       4
       “Were the California defendants among the health care
providers who reported the risks associated with the implanted
mesh?    Were they aware of other health care providers who
reported the risks? We simply do not know at this point in the
litigation.”
     5
       “At this point, since there has been no discovery, it is
not known what the California residents knew at the time of
implantation.”; “Similarly, it is not now known whether the
California   resident   defendants,   at   some   point   after
implantation, learned of the risks associated with implanted
transvaginal mesh.”.

                                                   10
facts, or for that matter any sufficient conclusions of law,

that would allow a court to reasonably infer negligence of any

kind on the part of the California defendants. 6      Therefore on the

complaint as pled, even when all facts and reasonable inferences

are viewed in the light most favorable to Flores, there is no

possibility that she could prevail in state court against the

California defendants on her claim of negligent failure to warn.

Because negligent failure to warn is the only cause of action

before us on appeal, the district court’s denial of Flores’s

motion to remand is affirmed.

                                    IV.

        Flores also appeals the district court’s dismissal of her

case without prejudice in accordance with Case Management Order

17. 7       Flores does not contend that the district court’s decision

was inconsistent with Order 17 or that she ever complied with

        6
       Flores also argues that she should have been allowed to
amend her complaint to allege the necessary facts.     Flores has
admitted that she does not possess such facts, and in any case
she has waived this argument by raising it for the first time on
appeal. See United States v. Evans, 404 F.3d 227, 236 n.5 (4th
Cir. 2005).
     7
       To the extent that there is a question regarding our
jurisdiction to consider this dismissal on appeal, the general
rule in this Circuit is that dismissal of an action without
prejudice is final and appealable while dismissal of a complaint
without prejudice is not because a saving amendment is usually
possible. See, e.g., Domino Sugar Corp. v. Sugar Workers Local
Union, 392, 10 F.3d 1064, 1066-67 (4th Cir. 1993). The district
court’s order explicitly dismissed Flores’s case as a whole.

                                     11
the   Order        by     filing    a   PPF.          She    argues     that     she      was

substantially justified in not complying with Order 17. 8                                This

argument is meritless.

      Flores       contends     that    she    did    not    comply    with    the     Order

because      she    was     reasonably        concerned       that     doing   so      would

constitute     an       affirmative     act    that    would    deprive    her      of    her

right to remand.           Her argument appears to conflate the doctrines

of subject-matter and personal jurisdiction.                            Flores did not

challenge          the      district      court’s           exercise     of      personal

jurisdiction.            Her   motion    for       remand    rested    entirely      on    an

assertion that the non-diverse defendants were properly joined

and   that    the        district   court      therefore      lacked     subject-matter

jurisdiction.           It is a central premise of American jurisprudence

that federal courts are courts of limited jurisdiction and that

      8
       Flores also argues on appeal that the district court’s
dismissal was an abuse of discretion because 1) Order 17
violates due process and the Federal Rules of Civil Procedure,
2) dismissal violates Federal Rule of Civil Procedure 11 and
Multi-District Litigation Manual Rule 10.15, 3) the court
impermissibly failed to warn Flores or impose lesser sanctions
prior to dismissal, and 4) Ethicon did not demonstrate
substantial prejudice as a result of Flores’s failure to comply
with Order 17.     Flores had the opportunity to raise these
arguments in both her response to Ethicon’s motion to dismiss
and in her motion for reconsideration but she failed to do so
and they are therefore waived.    Evans, 404 F.3d at 236 n.5.
Flores arguably raised the lack of substantial prejudice to
Ethicon in her Rule 59(e) reply, but arguments raised for the
first time in Rule 59 motions are also generally considered
waived. Holland v. Big River Minerals Corp., 181 F.3d 597, 605
(4th Cir. 1999).

                                              12
“‘[n]o     action    of    the       parties      can     confer    subject-matter

jurisdiction upon a federal court.’”                    Orquera v. Ashcroft, 357
F.3d 413, 416 (4th Cir. 2003) (quoting Ins. Corp. of Ireland,

Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702

(1982)).       Because    any    reasonable       diligence    on   Flores’s     part

would have revealed that her concern was unfounded, her refusal

to comply with Order 17 was willful and unreasonable.                    Moreover,

the district court did not rule on Ethicon’s motion to dismiss

until    40   days   after      it   denied       Flores’s    motion   to   remand.

Therefore, even if her jurisdictional concern had originally had

merit she was given ample time to come into compliance with the

district court’s Order after that concern was removed.

     The      district    court      did    not     abuse    its    discretion    by

dismissing Flores’s case in accordance with the procedures of

Order 17 as a result of her unjustified refusal to comply, 9 and

its dismissal without prejudice is therefore affirmed.

     9
       Flores argued in her Rule 59(e) motion that although she
failed to submit a PPF, her submission of a different
noncompliant document after the entry of the dismissal without
prejudice satisfied the underlying informational needs of the
defendants. Her claim that the dismissal was therefore an abuse
of discretion is unavailing. The requirements of, and penalties
associated with, Order 17 are plain, and Flores had numerous
opportunities to file a PPF to cure the defect.    The district
court was under no obligation to accept any submission in place
of a timely-filed PPF, and its decision to enforce Order 17 in
light of Flores’s willful refusal to comply was well within its
discretion.

                                           13
                                           V.

     Finally, Flores appeals the district court’s denial of her

motion for reconsideration of its dismissal. 10                  Flores makes only

unsupported,     conclusory         assertions        that    she    satisfied       the

requirements     of    Federal      Rule        of   Civil    Procedure      59(e)   by

presenting new evidence after dismissal and by alleging that

dismissal would result in manifest injustice. 11                      The district

court’s denial of her motion is therefore affirmed.

                                           VI.

     For the foregoing reasons, the district court’s denial of

Flores’s     motion    to   remand,        dismissal     of    her    case     without

prejudice,    and     denial   of    her    motion     for    reconsideration        and

reinstatement are

                                                                             AFFIRMED.

     10
         Flores contends on appeal that she satisfied the
requirements for relief under both Rule 29 and Rule 59.
However, Flores did not move the district court for relief under
Rule 29 so that argument is waived. Evans, 404 F.3d at 236 n.5.
     11
        A Rule 59(e) motion “may only be granted in three
situations: ‘(1) to accommodate an intervening change in
controlling law; (2) to account for new evidence not available
at trial; or (3) to correct a clear error of law or prevent
manifest injustice.’”    Mayfield v. NASCAR, 674 F.3d 369, 378
(4th Cir. 2012) (quoting Zinkland v. Brown, 478 F.3d 634, 637
(4th Cir. 2007)).

                                           14
WYNN, Circuit Judge, dissenting in part:

      I agree that the district court correctly denied the motion

to remand and acted within its discretion in dismissing the case

without     prejudice      as   a     sanction   for     Plaintiffs’         refusal   to

comply with the district court’s pretrial discovery procedures.

Nonetheless, I cannot agree that the district court properly

denied Plaintiffs’ Rule 59(e) motion to reconsider the dismissal

and reinstate the case.             By the date of their motion, Plaintiffs

had remedied the discovery defect, which was the sole basis for

dismissal.       In denying Plaintiffs’ motion to reinstate the case,

the   district     court     observed     that     the   applicable          statute   of

limitations likely barred refiling of Plaintiffs’ action.                         Thus,

the   district     court     recognized     that    denial    of       the    motion   to

reinstate the case effectually dismissed Plaintiffs’ action with

prejudice.

      “Mindful of the strong policy that cases be decided on the

merits, and that dismissal without deciding the merits is the

most extreme sanction,” imposed only “with restraint,” United

States v. Shaffer Equip. Co., 11 F.3d 450, 462 (4th Cir. 1993),

I   would    reverse    the     district    court’s      denial        of    Plaintiffs’

motion      to   reinstate      the    action.         Because     I    believe    that

dismissal is an unduly harsh sanction for a case in which there

is no evidence of bad faith by Plaintiffs or prejudice to the

                                           15
opposing party, I respectfully dissent from Section V of the

majority opinion.

                                               I.

       As the majority notes, Plaintiffs Dawn and Alfred Flores

initiated this action in California after Mrs. Flores developed

pelvic      infections,       hematuria,       and     necrosis       following      surgical

implantation of a synthetic mesh device manufactured by Ethicon,

Inc.       [J.A. 27]         Plaintiffs alleged that, like numerous women

throughout          the    country,     Mrs.        Flores        sustained    “severe    and

debilitating         injuries”       caused    by     the     synthetic       mesh   device. 1

J.A.       37.      Plaintiffs’       case    is     one     of    thousands    of    similar

actions          pending    against    Ethicon       in     multi-district       litigation

assigned to the Southern District of West Virginia (the “multi-

district litigation”).

       Following           removal    to     federal         court     and     transfer    of

Plaintiffs’ action to the multi-district litigation, and while

       1
       Plaintiffs further alleged that the United States Food and
Drug Administration has received “thousands of reports from
numerous manufacturers . . . regarding the severe health
complications related to the use of transvaginal placement of
surgical mesh.”     J.A. 31.    According to Plaintiffs, health
problems associated with the use of synthetic transvaginal mesh
include infections, urinary problems, recurrence of pelvic organ
prolapse, incontinence, and erosion of the mesh following
surgery.   Complications include bleeding, infection, discharge,
pain, backaches, bowel movement difficulties, bladder outlet
obstruction, and vaginal scarring and shortening. [J.A. 31]

                                               16
Plaintiffs’ motion to remand to state court remained pending,

Ethicon moved to dismiss the case with prejudice under Federal

Rule 37 of Civil Procedure for Plaintiffs’ failure to comply

with   the    court’s    pretrial       order    (“Order        17”)     requiring    all

multi-district       litigation        plaintiffs         to    submit    a    five-page

“Plaintiff Profile Form” by December 3, 2012.                            [J.A. 286-94]

Ethicon argued that “[t]he information contained in a completed

[Plaintiff Profile Form], as well as the medical records that a

plaintiff     must   submit     with     the    completed        [Plaintiff        Profile

Form]” were “essential to the defense of this action” and that

Plaintiffs’ failure to submit a Plaintiff Profile Form warranted

immediate     dismissal    of     the   case.         J.A.      292.      In   response,

Plaintiffs    asserted     that    they    had       no   objections      to   filing   a

Plaintiff Profile Form, but feared that engaging in discovery

would be viewed by the court as an affirmative act waiving their

right to remand.        [J.A. 296]

       Upon   consideration       of    the     motions,        the     district    court

denied Plaintiffs’ motion to remand [J.A. 356], but also found

that “Ethicon has not provided sufficient support to dismiss

this action with prejudice.”               J.A. 371.            The court therefore

granted   the   motion     to   dismiss        “to    the      extent    Ethicon    seeks

dismissal of plaintiffs’ case” but denied the motion “insofar as

Ethicon seeks such dismissal with prejudice.”                           J.A. 371.     The

                                          17
court entered its order dismissing the case without prejudice on

May 20, 2013.

      Within hours of the court’s dismissal, Plaintiffs served

Ethicon with a “Plaintiff Fact Sheet.”        [J.A. 412]   A Plaintiff

Fact Sheet is a twenty-six-page discovery form setting forth and

expanding   upon   the   information    and   medical   authorizations

requested in the Plaintiff Profile Form.        [J.A. 308-355 (sample

Plaintiff Fact Sheet)]       Both forms were established under Order

17.   In short, a Plaintiff Fact Sheet is simply a more detailed

version of the Plaintiff Profile Form. 2        Under Order 17, only

those plaintiffs selected to participate in the multi-district

litigation discovery pool must file the more detailed Plaintiff

Fact Sheet.     [J.A. 281]     Although they were not so selected,

Plaintiffs explained that they served the Plaintiff Fact Sheet

      2
       Notably, the majority opinion omits Plaintiffs’ filing of
the Plaintiff Fact Sheet from its recitation of the facts, and
only later identifies the Plaintiff Fact Sheet in a footnote as
“a different noncompliant document[.]”       Ante at 13, n.9.
However, the district court never found that filing the
Plaintiff Fact Sheet did not fulfill Plaintiffs’ discovery
obligations under Order 17, or that the Plaintiff Fact Sheet was
deficient or otherwise “noncompliant.”    To the contrary, both
Ethicon and the district court acknowledged that the Plaintiff
Fact Sheet is a more in-depth discovery document than a
Plaintiff Profile Form. [J.A. 413, 432 n.2] Simple comparison
of the two documents indisputably shows that the Plaintiff Fact
Sheet contains all of the information required by a Plaintiff
Profile Form.    It would, therefore, be inaccurate to suggest
that Plaintiffs failed to submit the information that Order 17
required.

                                   18
instead of the Plaintiff Profile Form to minimize any potential

prejudice to Ethicon.               [J.A. 373 n.1]

       Having          submitted     the        Plaintiff      Fact    Sheet,     Plaintiffs

moved, pursuant to Federal Rule 59(e) of Civil Procedure, for

reconsideration           of   dismissal          and   reinstatement       of    the    case.

[J.A. 372]             In their motion, filed May 29, 2013, Plaintiffs

advised      the       district      court       that    the    applicable       statute   of

limitations likely barred refiling and that unless the case was

reinstated, “the [d]ismissal [o]rder may turn out to be exactly

what the [c]ourt did not intend”—a dismissal with prejudice.

J.A.       379.         Plaintiffs         argued       that    such    a   sanction       was

unwarranted and would result in manifest injustice, given the

substantial injuries sustained by Mrs. Flores, the absence of

any pattern of dilatory conduct by Plaintiffs, and the lack of

prejudice         to    Ethicon. 3         In    opposing      Plaintiffs’       Rule    59(e)

motion, Ethicon confirmed that on the afternoon of May 20, 2013,

it   had     received       Plaintiffs’          Plaintiff      Fact   Sheet,     which,    it

acknowledged,            was   “a     more        extensive      disclosure       than     the

[Plaintiff Profile Form.]”                      Nonetheless, Ethicon asserted that

       3
       The majority opinion states that Plaintiffs failed to
raise the issue of substantial prejudice to Ethicon in their
motion for reconsideration.   Ante at 12, n.8.    But Plaintiffs
explicitly argued that dismissal of the case would result in
manifest injustice because, among other reasons, “there has been
absolutely no showing of prejudice incurred by [Ethicon].” J.A.
380.

                                                  19
Plaintiffs’ failure to submit the information by December 3,

2012, had “deprived the defendants any opportunity to consider

[Plaintiffs’] case for the discovery pool.”                      J.A. 413.        Ethicon

articulated no other grounds for prejudice.

       Despite   its    previous    ruling        dismissing        the    case   without

prejudice,   the       district    court        denied   Plaintiffs’        motion    for

reconsideration and reinstatement on the grounds that Plaintiffs

failed to show clear error of law or newly discovered evidence

justifying reconsideration under Rule 59(e).                     [J.A. 431]        As to

manifest injustice, the district court stated that although it

was “cognizant of the fact that the plaintiffs’ case might be

barred by the applicable statute of limitations[,]” such was

“the   result    of    strategic    decisions           made   by    the    plaintiffs’

counsel” in failing to submit a Plaintiff Profile Form before

the case was dismissed.           J.A. 438.         The district court made no

findings   regarding       bad    faith    by     Plaintiffs        or    prejudice    to

Ethicon.    Plaintiffs timely appealed.

                                          II.

       Rule 37 of the Federal Rules of Civil Procedure permits the

district court to impose a variety of sanctions upon parties who

fail to comply with a discovery order, including “dismissing the

action or proceeding in whole or in part[.]”                         Fed. R. Civ. P.

37(b)(2)(A)(v).          However,    the        power    to    dismiss     a   case   “is

                                           20
appropriately exercised only with restraint.”                   Dove v. CODESCO,

569 F.2d 807, 810 (4th Cir. 1978).                     “‘Against the power to

prevent     delays    must    be   weighed      the    sound   public      policy   of

deciding cases on their merits.’”                  Id. at 810 (quoting Reizakis

v. Loy, 490 F.2d 1132, 1135 (4th Cir. 1974)).                        Thus, while a

district court has discretion in fashioning a discovery sanction

under Rule 37, this discretion is tempered when the sanction

terminates     the    action       without     a    decision    on    the      merits.

Reizakis, 490 F.2d at 1135; Wilson v. Volkswagen of Am., Inc.,

561 F.2d 494, 503 (4th Cir. 1977) (stating that “[t]he power to

impose sanctions under Rule 37(b) for failure, after court order

in discovery proceedings to produce documents, is discretionary

with the Trial Court.          It is not, however, a discretion without

bounds or limits but one to be exercised discreetly and never

when it has been established that failure to comply has been due

to inability, and not to willfulness, bad faith, or any fault of

[the   non-complying         party].”)    (quotation      marks      and     footnotes

omitted).      This    is    because     the   court’s    interest      in    judicial

administration and enforcement of its orders conflicts with “the

party’s rights to a trial by jury and a fair day in court.”

Mutual Fed. Sav. & Loan Ass’n v. Richards & Assoc., 872 F.2d 88,

92   (4th   Cir.     1989)    (reviewing       sanction   of   default        judgment

imposed under Rule 37).

                                          21
       To balance these competing interests and determine whether

dismissal under Rule 37 is an appropriate sanction, “a court

must consider” the following four factors:

       (1) whether the noncomplying party acted in bad faith;
       (2) the amount of prejudice the noncompliance caused
       the adversary; (3) the need for deterring the
       particular   sort  of   noncompliance;   and (4)   the
       effectiveness of less drastic sanctions.

Hillig v. Comm’r of Internal Revenue, 916 F.2d 171, 174 (4th

Cir. 1990); cf. Davis v. Williams, 588 F.2d 69, 70 (4th Cir.

1978) (applying substantially similar four-part test to sanction

of dismissal with prejudice under Federal Rule 41(b) of Civil

Procedure).     We utilize the same four-part balancing test to

assess whether a sanction of default judgment under Rule 37 is

appropriate.        Mutual Fed. Sav. & Loan Ass’n, 872 F.2d at 92.

This balancing test “[i]nsure[s] that only the most flagrant

case, where the party’s noncompliance represents bad faith and

callous disregard for the authority of the district court and

the Rules, will result in the extreme sanction of dismissal or

judgment by default.”         Id.; accord Hillig, 916 F.2d at 174-75

(stating that the “harsh sanction” of dismissal under Rule 37

“is reserved for only the most flagrant case, where the party’s

noncompliance represents bad faith and callous disregard for the

authority of the district court and the Rules”) (quotation marks

omitted); cf. Projects Mgmt. Co. v. Dyncorp Int’l LLC, 734 F.3d
366,   373   (4th    Cir.   2013)   (cautioning   that,   although   courts

                                      22
possess    the      inherent       power      to     dismiss       a    case,     orders     of

dismissal “must be entered with the greatest caution” and are

“appropriate when a party deceives a court or abuses the process

at   a   level     that     is    utterly      inconsistent             with    the     orderly

administration of justice or otherwise undermines the integrity

of the process”) (quotation marks omitted).

     A party seeking relief from dismissal may move the court to

alter or amend its judgment under Federal Rule 59(e) of Civil

Procedure.        Rule 59(e) “permits a district court to correct its

own errors, sparing the parties and the appellate courts the

burden of unnecessary appellate proceedings.”                            Pac. Ins. Co. v.

Am. Nat’l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998)

(quotation marks omitted).                The district court may grant a Rule

59(e)    motion     to    prevent      manifest           injustice.           See    EEOC   v.

Lockheed Martin Corp., 116 F.3d 110, 112 (1997); Hutchinson v.

Staton, 994 F.2d 1076, 1081 (4th Cir. 1993).                                 We review the

district court’s denial of a Rule 59(e) motion for abuse of

discretion.           See        Matrix     Capital         Mgmt.        Fund,        L.P.   v.

BearingPoint,        Inc.,       576 F.3d 172,    192-96       (4th     Cir.    2009)

(holding     that     the    district       court         abused       its   discretion      in

denying the plaintiffs’ Rule 59(e) motion seeking to alter the

judgment     of     dismissal      with     prejudice         and       allow    an     amended

complaint).        Generally speaking, failure by the district court

to actually exercise its discretion by considering and balancing

                                              23
relevant factors amounts to an abuse of discretion.                         See James

v. Jacobson, 6 F.3d 233, 239 (4th Cir. 1993).

                                      III.

      In this case, the district court’s denial of Plaintiffs’

motion     for    reconsideration     and    reinstatement          is   flawed     on

several fronts.        First, the district court failed to undertake

the   multi-factor     balancing     test    before   effectually        dismissing

Plaintiffs’ action with prejudice.                In denying reinstatement of

the case, the court recognized that the applicable statute of

limitations likely barred refiling the action.                      See Dove, 569
F.2d at 810 n.3 (assuming the prejudicial effect of a dismissal

without prejudice handed down after the statute of limitations

had run).        Thus, the district court acknowledged that denial of

reinstatement       would   likely   end    the    case    and    thus   ultimately

preclude Plaintiffs from exercising their “rights to a trial by

jury and a fair day in court.”              Mutual Fed. Sav. & Loan Ass’n,
872 F.2d at 92.       Denial of reinstatement effectively transformed

the   district       court’s   earlier       order    of        dismissal     without

prejudice into a dismissal with prejudice.                  See Dove, 569 F.2d

at 809-10 (construing dismissal without prejudice as dismissal

with prejudice where the plaintiff could not refile the action

due   to   statute    of    limitations).          And,    of    course,     had   the

district court dismissed the case with prejudice in the first

                                       24
instance, it would have been required to perform the four-part

balancing test at that time.                     Hillig, 916 F.2d at 174 (stating

that    “[a]       court       must     consider      .    .    .      four     factors     before

dismissing a case” under Rule 37).

       Despite       recognizing         the     finality         of      its   order      denying

reconsideration          of     dismissal,        the      court       made     no    attempt     to

justify      the    severity       of    the     sanction       imposed.             The   district

court   made        no   findings        indicating         bad      faith      by    Plaintiffs,

prejudice       to       Ethicon,        the     need       for        deterrence,         or    the

ineffectiveness of less drastic sanctions.                             See Wilson, 561 F.2d

at 516 (faulting district court for failing to make appropriate

findings       on    “critical          issues    which        the      District       Court     was

required      to    address       in    determining         whether        to    grant      default

judgment” as a Rule 37 sanction).                         In short, the district court

failed to support its decision with any findings demonstrating

“flagrant”         and   “callous        disregard”        for      the    authority        of   the

court necessitating the “harsh” sanction of dismissal.                                     Hillig,
916 F.2d at 174-75.

       Nor    does       the     record    reflect         such        “callous       disregard.”

Although Plaintiffs’ concern that engaging in discovery would

jeopardize their motion to remand may have been misguided, their

behavior does not demonstrate a “pattern of indifference and

disrespect to the authority of the court,” Mutual Fed. Sav. &

Loan Ass’n, 872 F.2d at 93, rising to the level of bad faith.

                                                 25
See Hillig, 916 F.2d at 174-175 (vacating order of dismissal

where there was no evidence of bad faith and the circumstances

of the case did “not merit the harsh sanction of dismissal for

failure to comply with a discovery order”); Dove, 569 F.2d at

810 (reversing order of dismissal as abuse of discretion where

the record “disclose[d] a number of minor defaults” but “nothing

which [could] be construed as evidence of deliberate delay on

the part of Dove or his attorneys”); cf. Wilson, 561 F.2d at

503-12 (holding that the evidence was insufficient to establish

a pattern of misconduct to justify sanction of default, although

the district court had issued two orders compelling discovery

and extended the discovery deadline, and notwithstanding that

the plaintiffs had only received incomplete responses to their

interrogatories and requests for documents).

     Moreover,      any   prejudice     arising    from    Plaintiffs’    initial

failure to serve the Plaintiff Profile Form is minimal.                   Ethicon

suggested in its motion to dismiss that prejudice arose because

it   had   been    “deprived    .   .    .   any   opportunity    to     consider

[Plaintiffs’] case for the discovery pool.”                   J.A. 413.      This

argument   is     inapposite,   however,     because      Plaintiffs   submitted

the Plaintiff Fact Sheet, which is the very document that would

have been required had they been selected to participate in the

discovery pool.      In other words, since the day of the dismissal,

Ethicon has possessed all of the information it would have had

                                        26
if Plaintiffs had timely filed their Plaintiff Profile Form and

had then been selected to participate in the discovery pool.

Ethicon advanced no other grounds for prejudice, and none is

apparent from the record.

      The    district        court’s   refusal      to     reinstate    the      case   is

particularly         baffling      given     its    previous      decision       denying

Ethicon’s Rule 37 motion to dismiss the case with prejudice.

The   district       court      explicitly    rejected      Ethicon’s     argument       in

support of dismissal with prejudice, concluding that Ethicon had

“not provided sufficient support to dismiss this action with

prejudice.”        J.A. 371.       The court nevertheless found some merit

to Ethicon’s position and agreed to dismiss the case without

prejudice     as     a   sanction    for     Plaintiffs’     failure      to    file    the

Plaintiff     Profile        Form.     Immediately         following      the    court’s

dismissal,        Plaintiffs       fully     complied      with     their       discovery

obligations by serving the Plaintiff Fact Sheet, which contained

all   of    the    information       required      under    Order   17.         Yet    when

Plaintiffs requested reinstatement of the case--having cured the

single      defect       that    prompted      dismissal--the       district          court

refused.

      Why would the district court, having determined that there

was insufficient evidence to dismiss the case with prejudice at

a time when Plaintiffs’ discovery remained outstanding, refuse

to reinstate the case once the discovery had been served?                              What

                                             27
did the district court mean when it dismissed the case without

prejudice?        Without prejudice to what, if not reinstatement?

Nothing in the record suggests a satisfactory answer to these

questions.           Nothing    occurred    between       the    dismissal    without

prejudice and the order denying reinstatement to explain the

district court’s abrupt change of heart.

       These     unanswered     questions       are    especially     concerning    in

light of the district court’s suggestion that central blame for

the    dismissal       lay     with    “strategic       decisions      made   by   the

plaintiffs’ counsel.”           J.A. 438.       We have long recognized that,

in granting judgment against a party based on the failings of

counsel,       the     court    should     first        carefully      consider    the

availability of less severe sanctions.                    See, e.g., Hillig, 916
F.2d at 174 (“A dismissal sanction is usually inappropriate when

it    unjustly    penalizes      a    blameless       client    for   the   attorney’s

behavior.”); Reizakis, 490 F.2d at 1135 (“Rightfully, courts are

reluctant to punish a client for the behavior of his lawyer.”).

Here, there is no evidence the district court considered lesser

sanctions.

       In sum, the district court ended Plaintiffs’ case without

engaging in the balancing test we have, for years, required to

ensure that the “harsh sanction of dismissal” is “reserved for

only the most flagrant case” evincing “bad faith and callous

disregard for the authority of the district court[.]”                          Hillig,

                                           28
916 F.2d    at   174-75     (quotation     marks     omitted).        The       district

court’s      refusal    to    reinstate    the       case    results        in    manifest

injustice to Plaintiffs, who have been denied their day in court

without      the   requisite     showing       of    bad     faith     or    prejudice.

Because      nothing     in     this   case         indicates        that        Plaintiffs

“deceive[d] [the] court or abuse[d] the process at a level . . .

utterly inconsistent with the orderly administration of justice”

or    otherwise      “undermine[d]     the     integrity        of    the     [judicial]

process,” Projects Mgmt., 734 F.3d at 373, I would hold that the

district     court     abused   its    discretion       in    denying        Plaintiffs’

motion for reconsideration and reinstatement.                         Accordingly, I

respectfully dissent.

                                          29