United States District Court, E.D. Michigan, Southern Division
OPINION & ORDER GRANTING PLAINTIFF'S MOTION
FOR DISMISSAL WITHOUT PREJUDICE (DKT. 33)
A. GOLDSMITH, UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff Oron 2015, LLC's
motion to voluntarily dismiss its claims without prejudice
pursuant to Federal Rule of Civil Procedure 41(a)(2) (Dkt.
33). Defendant City of Southfield (the “City”)
opposes Oron 2015's motion, arguing that dismissal would
result in prejudice to the City. For the reasons stated
below, the Court grants Oron 2015's motion to dismiss.
Consequently, all other pending motions are dismissed as moot
(Dkts. 34, 37, and 42).
2015 initiated the present case as a putative class action on
behalf of all owners of real property in Southfield,
Michigan. Compl. ¶ 1 (Dkt. 1). The action challenges the
constitutionality of the City's adoption of certain
ordinances authorizing City officials to enter any premises,
without a warrant and upon reasonable cause, to perform an
inspection of the property. Id. ¶¶ 5-8.
The complaint alleges that failure to permit inspection may
result in criminal and civil infractions, inability to
lawfully rent or occupy the subject property, and liens being
placed on the property. Id. ¶¶ 14-16.
Pursuant to these ordinances, Oron 2015, a property owner in
Southfield, was forced to pay the City $340 in inspection
fees. Id. ¶¶ 20-22. The class action
complaint sets forth the following claims against the City:
(1) violation of due process under the Fifth and Fourteenth
Amendments, (2) violation of the Fourth Amendment's
protection against unreasonable searches, and (3) a state law
claim for unjust enrichment and assumpsit.
17, 2019, the Court entered an opinion and order granting in
part and denying in part the City's motion to dismiss and
denying Oron 2015's motion for class certification.
6/17/19 Op. (Dkt. 32). In relevant part, the Court held that
because Oron 2015 did not allege that it continued to own
property in Southfield, it faced no threat of future injury
and, therefore, lacked standing to pursue declaratory or
injunctive relief. Id. at 7. Consequently, Oron
2015's standing is limited to the recovery of damages for
previous injury. Id. The Court also denied Oron
2015's motion to certify class on the ground that the
typicality and adequacy elements under Federal Rule of Civil
Procedure 23(a) were not satisfied, given Oron 2015's
lack of standing to seek declaratory or injunctive relief.
Id. at 11.
2015 now seeks to voluntarily dismiss the action under
Federal Rule of Civil Procedure 41(a)(2) on the ground that
the limited damages recoverable render the continued cost of
litigation impractical. Pl. Mot. at 2. The City opposes Oron
2015's motion on the ground that it would suffer
prejudice if the case were dismissed. Def. Resp. at 6-7 (Dkt.
STANDARD OF REVIEW
Rule of Civil Procedure 41(a)(2) provides that when an answer
to a complaint or a motion for summary judgment has been
served, “an action may be dismissed at the
plaintiff's request only by court order, on terms that
the court considers proper.” In determining whether
voluntary dismissal under Rule 41(a)(2) is appropriate, a
district court, in its discretion, must ensure that plain
legal prejudice is not imposed on a defendant. Grover v.
Eli Lilly & Co., 33 F.3d 716, 718 (6th Cir. 1994).
In determining whether a defendant will suffer prejudice, a
court should evaluate the following factors: “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. A dismissal under Rule 41(a)(2) “may be
conditioned on whatever terms the district court deems
necessary to offset the prejudice the defendant may suffer
from a dismissal without prejudice, ” including payment
of costs incurred by a defendant. Bridgeport Music, Inc.
v. Universal-MCA Music Pub., Inc., 583 F.3d 948, 954
(6th Cir. 2009).
2015 seeks to voluntarily dismiss the present action in light
of this Court's determination that it lacks standing to
pursue declaratory or injunctive relief. Oron 2015 maintains
that as a result of this ruling, its recoverable damages are
limited to the $340 allegedly paid to the City in inspection
fees. Pl. Mot. at 2. Without the ability to spread the cost
of litigation across a class of plaintiffs, Oron 2015 asserts
that continuation of the case is impractical. Id.
The Court agrees that litigating this matter further would be
noneconomical, as the cost of litigation would vastly
outweigh any potential recovery. Consequently, Oron 2015 has
supplied adequate explanation justifying dismissal of the
respect to procedural history, the present case is not at an
advanced stage, nor is there any indication of excessive
delay or lack of diligence by Oron 2015. “Absent
substantial trial preparation or extensive motion practice, a
defendant usually will not suffer significant harm by the
dismissal of a case at the pretrial stage.” GW
Equity, LLC v. Vercor, LLC, No. 3-07-CV- 1128-O, 2008 WL
4392661, at *3 (N.D. Tex. Sept. 25, 2008). The present action
was initiated on August 27, 2018 and, therefore, was pending
only a year before the Court imposed a stay of the
proceedings on August 21, 2019. See Order Staying
Case (Dkt. 44). Although discovery was scheduled to close on
July 29, 2019, the City's motion to compel, filed on July
19, 2019, demonstrates that discovery is not yet complete.
See Def. Mot. to Compel (Dkt. 37). Further, the
parties' motion practice has not been unusually
extensive. Oron 2015 filed a motion to certify class on
January 30, 2019 (Dkt. 17), while the City filed a motion to
dismiss on January 31, 2019 (Dkt. 19). The Court resolved
these motions on June 17, 2019. Two weeks later, on July 1,
2019, Oron 2015 promptly filed the present motion to dismiss.
Although the City has filed a motion for summary judgment
(Dkt. 42), it did so on August 15, 2019, over a month after
it was on notice of Oron 2015's motion seeking to dismiss
the present action. Under these circumstances, the City will
not suffer prejudice through the Court's dismissal.
City contends that it would be inequitable to prevent it from
obtaining a favorable decision on the merits of the present
action when a subsequent class action is likely to be filed
by a different plaintiff. However, the mere prospect that a
defendant may face a second lawsuit does not warrant denial
of a motion for voluntary dismissal. Jones v. W. Reserve
Transit Auth., 455 Fed.Appx. 640, 643 (6th Cir. 2012)
(citing Bridgeport Music, 583 F.3d at 953). Indeed,
“courts have generally followed the traditional
principle that dismissal should be allowed unless the
defendant will suffer some plain legal prejudice other than
the mere prospect of a second lawsuit.” 9 Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, Federal
Practice & Procedure § 2364 (3d ed. 2017). Any
prejudice occasioned by the prospect of subsequent litigation
can be mitigated through the award of attorney fees incurred
by the City in defending the present action.
may protect defendants from prejudice stemming from a
plaintiff's voluntary dismissal of an action without
prejudice by conditioning such dismissal on payment of the
defendant's attorney fees and costs. Spar Gas, Inc.
v. AP Propane, Inc., 972 F.2d 348, 348 (6th Cir. 1992).
However, “the district court's discretion in
awarding costs and fees is limited to imposing conditions
that will alleviate the harm . . . that the defendant will
suffer if the motion is granted.” Id.
(internal marks omitted). Thus, when conditioning voluntary
dismissal without prejudice on payment of a defendant's
fees, “the court should award only those fees
representing legal work that could not be used in subsequent
litigation on the same claims.” Id.
the City contends that it has incurred more than $50, 000 in
attorney fees and costs- including expenses related to
document production and to responding to Oron 2015's
motion for class certification. Def. Resp. at 21-22. Should a
different plaintiff file a similar lawsuit challenging the
constitutionality of the City's ordinances, all materials
produced by the City during discovery in the present action
may be reused in the subsequent action. Fees and costs
attributable to the City's document productions,
therefore, are not recoverable. But other fees and costs
incurred by the City in defending the present action prior to
Oron 2015's filing of its motion to dismiss may be
awarded. While the City has not submitted the customary
itemization showing attorney hours and rates, the Court will
grant twenty-one days in which the City may submit such
documentation in ...