United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR
VOLUNTARY DISMISSAL, AND DISMISSING CASE WITHOUT
M. LAWSON UNITED STATES DISTRICT JUDGE
4, 2018, the plaintiff entity filed its complaint seeking to
enforce an agreement by the defendant to act as guarantor for
a construction loan in the amount of approximately $54
million. However, the plaintiff did not allege in the
complaint any facts about the identity or citizenship of any
of the members of the plaintiff LLC entity. After the Court
issued a show cause order, the plaintiff sought to file that
information under seal, contending that it feared that the
defendant would misuse that information for improper
purposes. The Court did not find adequate cause to seal the
basic jurisdictional facts. Thereafter, the plaintiff opted
to terminate the lawsuit, rather than disclose the
information, and has filed a motion for voluntary dismissal
without prejudice. The defendant, who has filed an answer to
the complaint, opposes the motion and asks that the dismissal
be with prejudice, and also seeks attorney's
plaintiff may dismiss his case on his own before a defendant
becomes involved in the lawsuit. Fed.R.Civ.P. 41(a)(1)(A)(i).
But once a defendant files an answer or a motion for summary
judgment, the plaintiff may dismiss his case only by court
order, and only “on terms that the court considers
proper.” Fed.R.Civ.P. 41(a)(2).
Schubiner has no quarrel with a dismissal, but he is not
content to let the plaintiff simply walk away. He says that
the plaintiff has caused excessive delay, and that the
defendant has responded to two motions and incurred costs and
attorney's fees. Those circumstances, says the defendant,
justify dismissal that cannot be revisited and compensation
for legal expenses.
Court does not see it that way. This lawsuit has been pending
for about ten weeks. The motions the defendant choose to
oppose - a motion to seal and a motion for voluntary
dismissal - did not require much effort. One might question
that they even required a response, except perhaps for
has the discretion to grant a motion for voluntary dismissal
if the defendant would not suffer “‘plain legal
prejudice' as a result of a dismissal without prejudice,
as opposed to facing the mere prospect of a second
lawsuit.” Grover v. Eli Lilly & Co., 33
F.3d 716, 718 (6th Cir. 1994) (quoting Cone v. W.
Virginia Pulp & Paper Co., 330 U.S. 212, 217
(1947)). When assessing potential prejudice, courts generally
will consider the “defendant's effort and expense
of preparation for trial, excessive delay and lack of
diligence on the part of the plaintiff in prosecuting the
action, insufficient explanation for the need to take a
dismissal, and whether a motion for summary judgment has been
filed by the defendant.” Id. at 718 (citing
Kovalic v. DEC Int'l, Inc., 855 F.2d 471, 474
(7th Cir. 1988)). These factors are merely a guide, and the
plaintiff need not prevail on all of them; nor is the
district court required to make any findings on the
sufficiency of the plaintiff's explanation for dismissal.
Rosenthal v. Bridgestone/Firestone, 217 Fed.Appx.
498, 502 (6th Cir. 2007) (citing Kovalic, 855 F.2d
at 474 (quotation marks omitted)).
literally, the first factor favors the plaintiff, since the
defendant incurred no expenses “prepar[ing]
for trial.” There has been no scheduling order entered
in the case, and no discovery has occurred. Contrary to the
defendant's assertion, there has been no dilatory action
by the plaintiff. The activity in this case has involved a
jurisdictional question and the plaintiff's apparent
struggle over revealing the identities of the LLC members
behind the lawsuit. Although the cause of the plaintiff's
angst over revelation is not readily apparent, the time taken
to address the issue can hardly be characterized as excessive
delay. There has been no motion for summary judgment or
motion of any kind filed by the defendant.
court's primary consideration in ruling on a motion for
voluntary dismissal under Rule 41(a)(2) motion is to protect
the nonmoving party from unfair treatment. Grover,
33 F.3d at 718. When a defendant claims unfairness over the
expense of defending the lawsuit, it is useful to look into
why the expense was incurred. And as noted above, the
defendant incurred attorney's fees over matters of
procedural fencing, which likely could have been avoided.
the Court may require payment of costs or attorney's fees
upon dismissal of a case under Rule 41 if appropriate.
Smoot v. Fox, 353 F.2d 830, 833 (6th Cir. 1965). And
occasionally, “without prejudice” dismissals are
accompanied by an award of costs. Ibid. But
“no circuit court has held that such costs are
mandatory.” DWG Corp. v. Granada Investments,
Inc., 962 F.2d 1201, 1202 (6th Cir. 1992).
determining whether payment of costs or fees should be a
condition of dismissal without prejudice, courts generally
consider: “(1) whether the plaintiff acted in good
faith in bringing and prosecuting the litigation; (2) whether
the defendant incurred substantial expenses in defending the
action; (3) whether the plaintiff delayed in bringing the
motion to dismiss; and (4) whether the work performed can be
used in a subsequently filed action.” Matthews v.
General RV Center, Inc., 2017 WL 411354, at *1 (E.D.
Mich. Jan. 31, 2017) (citations omitted). As discussed above,
these factors, except the last, favor the plaintiff. It is
unlikely that the work that defendant's attorney put in
this case will serve his client at a later time. But as
should be apparent by now, most of that work could have been
avoided by prudent litigation practice. Certainly, the
defendant had a right to aggressively pursue a dismissal of
the case against him. But choosing that course, when another
option was available, places the responsibility for the costs
of that choice squarely upon him, where the American Rule
assigns it. See Michigan Flyer, LLC v. Wayne Cty. Airport
Auth., 162 F.Supp.3d 584, 586-87 (E.D. Mich. 2016),
aff'd, 860 F.3d 425 (6th Cir. 2017) (noting that
the “American Rule” “usually governs
litigation in the United States, ” and requires that
“‘litigants must pay their own attorney's
fees'”) (quoting Christiansburg Garment Co. v.
EEOC, 434 U.S. 412, 415 (1978)).
reasons discussed above, the “proper”
“terms” for cessation of the case against the
defendant include a “without prejudice”
designation and no award of costs or expenses.
it is ORDERED that the plaintiff's
motion for voluntary dismissal [dkt. #14] is
further ORDERED that the complaint is