First Classics, Inc. v. Jack Lake Productions, Inc., et al

Filing

Opinion issued by court as to Appellant First Classics, Inc.. Decision: Vacated and Dismissed. Opinion type: Non-Published. Opinion method: Per Curiam. The opinion is also available through the Court's Opinions page at this link http://www.ca11.uscourts.gov/opinions.

Case: 16-13424

Date Filed: 01/04/2017

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-13424
Non-Argument Calendar
________________________
D.C. Docket No. 1:15-cv-21324-KMW
FIRST CLASSICS, INC.,
a Delaware corporation,
PlaintiffCounter DefendantAppellant,
versus
JACK LAKE PRODUCTIONS, INC.,
a Canadian corporation,
JAAK JARVE,
as an individual,
DefendantsCounter ClaimantsAppellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 4, 2017)

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Before TJOFLAT, JILL PRYOR, and ANDERSON, Circuit Judges.
PER CURIAM:
First Classics, Inc. (“First Classics”) appeals the dismissal with prejudice of
its action against Jack Lake Productions, Inc. and Jaak Jarve (collectively “Jack
Lake”) after the parties filed a joint Stipulation and Notice of Dismissal. Although
the procedural history is somewhat convoluted, this matter began when First
Classics filed an action against Jack Lake in the Northern District of Illinois for
copyright infringement, breach of contract, and tortious interference. Jack Lake
responded by filing a separate lawsuit—raising identical claims—against First
Classics in the Southern District of Florida. First Classics asserted counterclaims in
the Florida lawsuit, and the parties agreed to transfer the Illinois case to the
Southern District. An unopposed motion to consolidate the two cases was filed.
Following court-ordered mediation in the original Florida action, the parties filed a
notice of settlement and the court sua sponte dismissed that case after the parties
failed to comply with an order to file a stipulation of dismissal. See Jack Lake
Prods. v. Bonfiglio, No. 15-cv-20780-JEM (S.D. Fla. Feb. 24, 2015). Thereafter,
the district court in this case denied the motion to consolidate as moot.
Apparently unable to finalize the terms of their settlement agreement, the
parties continued to litigate the instant matter. Nearly eight months after the first
court’s sua sponte dismissal, the parties filed a joint “Stipulation and Notice of
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Dismissal” pursuant to “Fed. R. Civ. P. 41(A)” in this action, which, it is urged on
appeal, was intended to be without prejudice. Instead, the district court dismissed
the action with prejudice in an order filed on February 2, 2016. First Classics
subsequently filed an unopposed motion to set aside the order of dismissal with
prejudice that was ultimately denied by the district court on May 19, 2016. The
district court, noting the parties’ failure to accurately label the stipulation under
Rule 41, “construed the dismissal under ‘Rule 41(A)’ to fall under Subsection
41(a)(2) and exercised its discretion in dismissing the Parties’ claims against each
other with prejudice.” In doing so, the district court highlighted “the convoluted
litigation history between the Parties, the inability of the Parties to reach a global
settlement, their continued litigation of claims they represented to another court
had been settled, their failure to comply with court order, and . . . the interests of
judicial economy.”
On appeal, First Classics argues that the parties intended the dismissal to be
without prejudice and that Rule 41(a)(1)—under which it is urged they intended to
file—requires dismissal to be without prejudice unless the stipulation provides
otherwise. First Classics further argues that a joint stipulation under Rule 41(a)(1)
is self-executing and the district court was without jurisdiction over this case once

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it had been filed.1 Jack Lake, the party who filed the joint stipulation with the
district court, has chosen not to participate in this appeal.
This Court recently considered, for the first time, the appropriate standard to
use in reviewing a district court’s construction of an ambiguous Rule 41(a) filing.
See Anago Franchising, Inc. v. Shaz, LLC, 677 F.3d 1272, 1276–77 (11th Cir.
2012). We found that the “determination of whether a document was filed under
Rule 41(a)(1) or Rule 41(a)(2) is a legal conclusion that can be made on the face of
the filing and does not depend on facts the district court should find in the first
instance.” Id. at 1276. Accordingly, we review the decision of the district court on
this issue de novo. Id. As we held in Anago, a de novo review requires this Court
to search for the parties’ intent when they filed the contested document and “the
best indication of that intent is the document itself.” Id.
The determination of whether the joint Stipulation and Notice of Dismissal
was filed pursuant to Rule 41(a)(1) or Rule 41(a)(2) is particularly salient here
because it decides whether the district court had jurisdiction to enter its order
dismissing the case with prejudice. A stipulation filed pursuant to Rule 41(a)(1) “is
self-executing and dismisses the case upon its . . . filing unless it explicitly
conditions its effectiveness on a subsequent occurrence.” Id. at 1278. A district
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First Classics also argues that, even if it retained jurisdiction after the stipulation was filed, the
district court was required to provide notice of its intention to dismiss the case with prejudice.
Because we need not reach the issue to resolve this case on appeal, we decline to address that
argument.
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court “need not and may not take action after the stipulation becomes effective
because the stipulation dismisses the case and divests the district court of
jurisdiction.” Id. (emphasis added). In contrast, dismissal pursuant to Rule 41(a)(2)
expressly requires the approval of the district court and is not effective unless and
until the court takes appropriate action.
Accordingly, we first review, de novo, whether the district court’s decision
to “construe[] the dismissal under ‘Rule 41(A)’ to fall under Subsection 41(a)(2)”
and to “exercise[] its discretion in dismissing the Parties’ claims against each other
with prejudice” was correct. Here, the parties styled the document a “Stipulation
and Notice of Dismissal.” The word “stipulation” appears in Rule 41(a)(1) but not
in its counterpart, Rule 41(a)(2). See Anago, id. at 1276. (“The parties styled the
document a ‘Stipulation,’ which is expressly required in Rule 41(a)(1)(A)(ii) and
not mentioned in Rule 41(a)(2).”). Moreover, rather than requesting the court’s
permission to dismiss the action, the document merely provides the court with
“notice of dismissal,” which strongly indicates that the parties did not consider a
court order necessary to make it effective. See id. (“[T]he Stipulation does not
contemplate that a court order is necessary to make it effective. There is no
signature line for the district court, and the statement retaining jurisdiction is not a
request made to the district court but a declaration of retained jurisdiction.”).
Finally, the parties clearly envisioned that this document would effectuate the
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dismissal when they included, in the body of the stipulation, the provision that
“this action and counterclaims shall be, and is [sic], dismissed.” We therefore
conclude that the Stipulation and Notice of Dismissal was filed pursuant to Rule
41(a)(1)(A)(ii) and that the district court’s construction of the document as falling
under Rule 41(a)(2) was in error. 2
Accordingly, because a stipulation filed under Rule 41(a)(1) is selfexecuting, it was effective upon filing and the district court was without
jurisdiction to enter its subsequent order dismissing with prejudice. Moreover, the
terms of Rule 41expressly provide that “[u]nless the notice or stipulation states
otherwise, the dismissal [under Rule 41(a)(1)] is without prejudice.” Fed. R. Civ.
P. 41(a)(1)(B). Therefore, because the Stipulation and Notice of Dismissal was
silent on the issue of prejudice, and because the district court was without
jurisdiction to enter its subsequent order, this action should have been, and in fact
was, dismissed without prejudice. Accordingly: (1) the district court’s February 2,
2016 “Order Dismissing Case” with prejudice is VACATED; (2) the district
court’s May 19, 2016 “Order Denying Plaintiff’s Motion to Set Aside Order of

2

We are aware that several drafts of the proposed settlement agreement included in the record on
appeal provide that “[t]he parties agree to the dismissal with prejudice of all claims and
counterclaims in the Litigation.” Because Jack Lake—as the party who filed the stipulation—
chose not to oppose First Classics’ motion to set aside the order at the district court and has
chosen not to participate in this appeal we are unable to infer that any intent that may have been
expressed in these draft settlement agreements carried forward to the stipulation.
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Dismissal with Prejudice” is VACATED as moot; and (3) this appeal is
DISMISSED.
VACATED AND DISMISSED.

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