Mobile Mini Incorporated v. Bunger et al

Filing 110

ORDER granting 84 Plaintiff's motion to voluntarily dismiss the patent claim without prejudice. The Court declines to exercise supplemental jurisdiction over Plaintiff's remaining state law claims and will dismiss this action. The Clerk is directed to terminate this action. Signed by Judge David G Campbell on 04/21/16.(GAR)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Mobile Mini Incorporated, Plaintiff, 10 11 ORDER v. 12 No. CV-15-01648-PHX-DGC Steven G. Bunger, et al., 13 Defendants. 14 15 Plaintiff Mobile Mini, Inc. moves to voluntarily dismiss without prejudice its 16 patent infringement claim against Defendants Pro Box Portable Storage, LLC and Steven 17 G. Bunger, pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure. Doc. 84. 18 The Court will grant Plaintiff’s motion and dismiss this action. 19 I. Background. 20 Plaintiff filed this case on August 21, 2015. Plaintiff asserted state law claims for 21 breach of contract, breach of the covenant of good faith and fair dealing, tortious 22 interference with contract, civil conspiracy, breach of fiduciary duty, and aiding and 23 abetting breach of fiduciary duty. Doc. 1. Plaintiff also alleged that Defendants Bunger 24 and Pro Box infringed Plaintiff’s ‘243 Patent in violation of 35 U.S.C. § 271(a). Id. at 25 17. The patent claim is Plaintiff’s only federal claim, and it provided the basis for this 26 Court’s subject matter jurisdiction. Id. at 4. 27 Defendants served requests for production of documents related to the patent 28 infringement claim on November 12, 2015. Doc. 94 at 3. Plaintiff responded that 1 “Mobile Mini will produce non-privileged documents responsive to this request, which 2 are proportionate to the needs of this case.” Doc. 94-1 at 2-9. To date, Plaintiff has not 3 produced any documents related to the patent infringement claim. Doc. 94 at 3.1 4 Plaintiff submits that it is moving to dismiss its patent infringement claim for 5 strategic reasons. Doc. 84 at 3. Defendants do not dispute that assertion, but request that 6 the Court either dismiss the patent claim with prejudice or condition dismissal on the 7 production of documents so that Defendants can assess the propriety of moving for 8 Rule 11 sanctions. Doc. 94 at 5. 9 II. Voluntary Dismissal. 10 Rule 41(a)(2) provides that “an action may be dismissed at the plaintiff’s request 11 only by court order, on terms that the court considers proper.” Unless stated otherwise, a 12 dismissal is without prejudice. Id. The purpose of Rule 41(a)(2) “is to permit a plaintiff 13 to dismiss an action without prejudice so long as the defendant will not be prejudiced . . . 14 or unfairly affected by the dismissal.” Stevedoring Servs. of Am. v. Armilla Intern. B.V., 15 889 F.2d 919, 921 (9th Cir. 1989) (citations omitted). The district court’s main inquiry 16 when ruling on a motion for voluntary dismissal is “whether the defendant will suffer 17 some plain legal prejudice as a result of the dismissal.” Westlands Water Dist. v. United 18 States, 100 F.3d 94, 96 (9th Cir. 1996). 19 A defendant suffers “plain legal prejudice” when voluntary dismissal prejudices a 20 legal interest, legal claim, or legal argument. Id. at 97. Neither the inconvenience of 21 having to defend a claim in a different forum nor the tactical advantage plaintiff gains 22 from dismissal is sufficient to establish plain legal prejudice. Smith v. Lenches, 263 F.3d 23 972, 976 (9th Cir. 2001) (citing Hamilton v. Firestone Tire & Rubber Co., 679 F.2d 143, 24 145 (9th Cir. 1982)). 25 defending against a claim do not constitute legal prejudice, but that a court may condition The Ninth Circuit has held that expenses a party incurs in 26 27 28 1 The Court notes that Plaintiff’s Rule 34 responses were dated January 14, 2016 (Doc. 94-1 at 10), after the recent amendments to the Federal Rules of Civil Procedure went into effect. The responses violated Rule 34(b)(2)(B) by failing to produce documents or specify a date on which production would occur. -2- 1 dismissal without prejudice “upon payment of appropriate costs and attorney fees” in 2 order to protect the defendants’ interests. Westlands, 100 F.3d at 97 (citing Hamilton, 3 679 F.2d at 146). Courts are not required to impose costs and fees when they dismiss 4 actions without prejudice under Rule 41(a)(2). Id. 5 Defendants argue that they have incurred substantial expenses defending against 6 the patent claim. Doc. 94 at 4-6. But Defendants do not requested that the Court 7 condition dismissal on payment of costs and attorney fees. 8 Defendants contend that the Court should require Plaintiff’s compliance with 9 discovery requests so they can assess Rule 11 sanctions, but they provide no explanation 10 of why they believe such sanctions might be warranted. Defendants state only that the 11 requested documents “could” reveal that Plaintiff brought its patent claim in bad faith. 12 Id. Defendants cite no case where a court has conditioned a voluntary dismissal on 13 document production. Because the Court finds that dismissal of Plaintiff’s patent claim 14 will not cause Defendants to suffer plain legal prejudice, Plaintiff’s motion will be 15 granted. The Court will not dismiss the claim with prejudice or require the production of 16 documents. 17 III. Dismissal of Remaining State Law Claims. 18 Upon dismissal of Plaintiff’s only federal claim, the Court has discretion to 19 dismiss the remaining state law claims under 28 U.S.C. § 1367(c)(3). “To decline 20 jurisdiction under section 1367(c)(3), the district court must first identify the dismissal 21 that triggers the exercise of discretion and then explain how declining jurisdiction serves 22 the objectives of economy, convenience and fairness to the parties, and comity.” Trs. Of 23 Constr. Indus. & Laborers Health & Welfare Tr. v. Desert Valley Landscape and Maint., 24 Inc., 333 F.3d 923, 925 (9th Cir. 2003). 25 Plaintiff’s remaining state law claims are most properly addressed by the courts of 26 Arizona – courts charged with administering the laws of Arizona and more familiar with 27 state law claims. Courts have recognized that when all federal claims are eliminated 28 early in a case and only state claims remain, the district court has “a powerful reason to -3- 1 choose not to continue to exercise jurisdiction.” Carnegie-Mellon Univ. v. Cohill, 484 2 U.S. 343, 348-51 (1988); see Ove v. Gwinn, 264 F.3d 817, 821, 826 (9th Cir. 2001) 3 (holding that the district court properly declined to exercise supplemental jurisdiction 4 after granting defendants’ motion to dismiss federal claims). 5 discovery; no depositions have been taken, no expert reports produced. Defendants do 6 not contend that they would be prejudiced by dismissal; indeed, they do not object to it. 7 Doc. 94 at 5. The Court declines to exercise supplemental jurisdiction over Plaintiff’s 8 remaining state law claims. 9 10 IT IS ORDERED: 1. 11 12 This case is early in Plaintiff’s motion to voluntarily dismiss the patent claim without prejudice (Doc. 84) is granted. 2. 13 The Court declines to exercise supplemental jurisdiction over Plaintiff’s remaining state law claims and will dismiss this action. 14 3. 15 Dated this 21st day of April, 2016. The Clerk is directed to terminate this action. 16 17 18 19 20 21 22 23 24 25 26 27 28 -4-

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