Desert Valley Hospital, Inc. et al v. Blue Cross-Blue Shield of Alabama et al

Filing 127

ORDER DISMISSING CASE by Judge Margaret M. Morrow. Case Terminated. Made JS-6. (rne)

JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

Case No.

CV 10-08483 MMM (DTBx)

Date

August 14, 2012

Desert Valley Hospital, Inc. v. Blue Cross-Blue Shield of Alabama, et al.

Title

Present: The Honorable

MARGARET M. MORROW

R. Neal for ANEL HUERTA

N/A

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiff:

Attorneys Present for Defendant:

None

None

Proceedings:

Order Dismissing Case

On November 8, 2010, Desert Valley Hospital, Inc. commenced this action against multiple
defendants, all of which are Blue Cross Blue Shield health insurance companies, alleging violations
of the Employee Retirement Income Security Act (“ERISA”).1 On July 20, 2012, the court
dismissed Desert Valley’s claims against Blue Cross Blue Shield of Michigan associated with account
numbers V00001011650, V00090225107, V00090162709, V00000188027, V00090217105,
V00090217783, V0000911140, V00000807929, V00001024337, V00001000519, V00000970026,
V00001055669, V00000899670, V00090124125, and V00090124104, as reflected on the spreadsheets

1

Complaint, Docket No. 1 (Nov. 8, 2010). As amended, the complaint names Blue Cross-Blue
Shield of Alabama, Anthem Blue Cross Blue Shield of Georgia, Inc., Health Care Service
Corporation, Community Insurance Company, Inc., Horizon Blue Cross Blue Shield of New Jersey,
Regence Blue Cross Blue Shield of Utah, Premera Blue Cross, Care First of Maryland, Inc., Blue
Cross Blue Shield of Michigan, Anthem Health Plans of Virginia, BCBSM, Inc., HMSA, Inc., Blue
Cross Blue Shield of Missouri, Healthcare Assurance, Inc., Blue Cross Blue Shield of Massachusetts,
Blue Cross Blue Shield of Kansas, Blue Cross Blue Shield of Montana, and Does 1 through 10. (First
Amended Complaint, Docket No. 76 (Jun 13, 2011)). The parties subsequently stipulated that Blue
Cross Blue Shield of Massachusetts and Blue Cross Blue Shield of Kansas should be dismissed from
the action. (Order Upon Stipulation Re: Dismissal of Action Against Defendant Blue Cross Blue
Shield of Massachusetts with Prejudice, Docket No. 89 (Sep. 6, 2011); Stipulation for Dismissal of
Action Against Defendant Blue Cross Blue Shield of Kansas with Prejudice, Docket No. 95 (Sep. 30,
2011)).

attached to Desert Valley’s complaint, with prejudice.2 The court granted Desert Valley leave to
amend its complaint to assert claims associated with these account numbers against another defendant
or defendants, however.3 The court dismissed the balance of the complaint with leave to amend. The
court granted Desert Valley leave to file an amended complaint addressing the deficiencies noted in
its order within twenty (20) days of the date of the order.4 To date, Desert Valley has not filed an
amended complaint.
Rule 41(b) permits courts to dismiss an action sua sponte for failure to comply with a court
order. See, e.g., Link v. Wabash Railroad Co., 370 U.S. 626, 629-31 (1962) (“The authority of a
court to dismiss sua sponte . . . has generally been considered an ‘inherent power,’ governed not by
rule or statute but by the control necessarily vested in courts to manage their own affairs. . . . It
would require a much clearer expression of purpose than Rule 41(b) provides for us to assume that
it was intended to abrogate so well-acknowledged a proposition”); Yourish v. California Amplifier,
191 F.3d 983, 986 (9th Cir. 1999) (holding that a district court did not abuse its discretion in sua
sponte dismissing a complaint for failure to comply with a court order); Ferdik v. Bonzelet, 963 F.2d
1258, 1260 (9th Cir. 1992) (affirming a lower court’s dismissal for failure to follow court orders).
Where, as here, a plaintiff whose complaint has been dismissed with leave to amend takes no
action, the Ninth Circuit has held that the appropriate response is the sanction of a Rule 41(b)
dismissal. See, e.g., Edwards v. Marin Park, Inc., 356 F.3d 1058, 1065 (9th Cir. 2004) (“Yourish
and Ferdik both arose when plaintiffs, given the opportunity to amend or be dismissed, did nothing.
In that situation, resources continue to be consumed by a case sitting idly on the court’s docket. The
failure of the plaintiff eventually to respond to the court’s ultimatum – either by amending the
complaint or by indicating to the court that it will not do so – is properly met with the sanction of a
Rule 41(b) dismissal. . . . Hence we understand the Ferdik-Yourish rule to require a threatened Rule
12(b)(6) dismissal to ferment into a Rule 41(b) dismissal only upon a plaintiff’s inaction. When the
plaintiff timely responds with a formal notice of his intent not to amend, the threatened dismissal
merely ripens into a final, appealable judgment” (citations omitted)); see also, e.g., Grubb v.
Hernandez, No. ED CV 06-00807 SJO (AJW), 2009 WL 1357411, *4 (C.D. Cal. May 1, 2009)
(“Plaintiff has not clearly made and communicated an affirmative choice to stand on his dismissed
complaint and forgo amendment. Therefore, under the reasoning of Edwards, dismissal of this action
with prejudice under Rule 41(b) is appropriate”).
Involuntary dismissal with prejudice is appropriate when a majority of the following factors
favor dismissal: (1) the public’s interest in expeditious resolution of litigation; (2) the court’s need to
2

Order Granting In Part And Denying In Part Defendants’ Motion to Dismiss (“Order”),
Docket No. 125 (July 20, 2012).
3

Order at 15.

4

Id.
2

manage its docket; (3) the risk of prejudice to defendants; (4) the availability of less drastic
alternatives; and (5) the public policy favoring disposition of cases on the merits. Pagtalunan v.
Galaza, 291 F.3d 639, 642 (9th Cir. 2002); Ferdik, 963 F.2d at 1260–61. Here, these factors weigh
in favor of dismissal with prejudice.
The first Pagtalunan factor – the public’s interest in expeditious resolution of litigation –
“always favors dismissal.” Pagtalunan, 291 F.3d at 642 (citation omitted). As to the second
factor,“[t]he trial judge is in the best position to determine whether the delay in a particular case
interferes with docket management and the public interest.” Pagtalunan, 291 F.3d at 642. Desert
Valley’s inattention to this action, and its nonresponsive behavior indicate that it does not intend to
prosecute this action and that the action’s continued presence on the court’s docket will waste valuable
resources. Thus, the second Pagtalunan factor also weighs in favor of dismissal with prejudice.
The third Pagtalunan factor considers whether the plaintiff’s actions have impaired defendants’
ability to proceed to trial or threatened to interfere with the rightful decision of the case. Id. Courts
have explained that “the risk of prejudice to the defendant is related to the plaintiff’s reason for
defaulting in failing to timely amend.” Yourish, 191 F.3d at 991. A plaintiff’s failure to provide an
excuse for the failure to amend is sufficient to establish prejudice. See, e.g., Foster v. Jacquez, No.
CV 09-01406 JFW, 2009 WL 1559586, *3 (C.D. Cal. May 28, 2009) (“Where a party offers a poor
excuse for failing to comply with a court’s order, the prejudice to the opposing party is sufficient to
favor dismissal,” citing Yourish); Grubb, 2009 WL 1357411 at *2 (“In the absence of a showing to
the contrary, prejudice to defendants or respondents is presumed from unreasonable delay,” citing
In re Eisen, 31 F.3d 1447, 1452-53 (9th Cir. 1994), in turn citing Anderson v. Air West, Inc., 542
F.2d 522, 524 (9th Cir. 1976)). As noted, Desert Valley has provided no reason or explanation for
its failure to amend. As a result, its inaction is impeding prompt resolution of this matter and this
factor, too, weighs in favor of dismissal.
The fourth Pagtalunan factor, which examines the availability of less drastic alternatives, is
neutral. On the one hand, the Ninth Circuit has explained that “dismissing [a] complaint with leave
to amend [is] not a sanction in response to [p]laintiffs’ failure to obey a court order. . . . Therefore,
the district court’s granting [p]laintiffs leave to amend [is] not a lesser sanction because they [have]
not yet disobeyed the court’s order.” Yourish, 191 F.3d at 992; but see, e.g., Grubb, 2009 WL
1357411 at *2 (“Plaintiff was given additional time to file a procedurally proper amended complaint
after his second amended complaint was stricken, and he was warned that his failure to do so could
lead to dismissal. This action cannot proceed without a complaint on file”). On the other hand,
Desert Valley’s failure to act in the face of the court’s order granting the motion to dismiss with leave
to amend indicates that there are no less drastic alternatives that are realistically available.
Finally, the fifth Pagtalunan factor weighs against dismissal, since “public policy strongly
favors disposition of actions on the merits.” Id.
In spite of the fourth factor’s neutrality and the fact that the fifth factor weighs against
dismissal, the court concludes that, on balance, the Pagtalunan factors favor involuntary dismissal
with prejudice in this case.
3

III. CONCLUSION
For the reasons stated, plaintiff’s action is dismissed with prejudice pursuant to Rule 41(b) for
failure to comply with court orders. Each party shall bear its own costs and attorneys’ fees.

CV-90 (12/02)

CIVIL MINUTES - GENERAL

4

Initials of Deputy Clerk AH