Smith-Dickerson v. State Farm Mutual Automobile Insurance Company, Inc.
Filing
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ORDER by Judge Edward M. Chen Granting 29 Plaintiff's Motion to Dismiss Complaint Pursuant to Federal Rule of Civil Procedure 41. (emcsec, COURT STAFF) (Filed on 8/6/2018)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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JENNIFER SMITH-DICKERSON,
Plaintiff,
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v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, INC.,
Defendant.
United States District Court
Northern District of California
Case No. 18-cv-00189-EMC
ORDER GRANTING PLAINTIFF’S
MOTION TO DISMISS COMPLAINT
PURSUANT TO FEDERAL RULE OF
CIVIL PROCEDURE 41
Docket No. 29
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Plaintiff Jennifer Smith-Dickerson initiated this case in state court. After Defendant State
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Farm Fire and Casualty Company removed the case to federal court on the basis of diversity
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jurisdiction, Ms. Smith-Dickerson moved for a remand back to state court. This Court denied the
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motion to remand. Now pending before the Court is Ms. Smith-Dickerson‟s motion to dismiss
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pursuant to Federal Rule of Civil Procedure 41. According to Ms. Smith-Dickerson, she “seeks to
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dismiss this action in order to pursue not only the claims alleged in her Complaint against
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Defendant State Farm, but also to seek claims against the former owner of the Vehicle in state
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court for breach of contract and declaratory relief” – but she cannot “join[] the previous owner [in
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the instant case] as this would destroy diversity jurisdiction of this Court,” and therefore she is
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moving to dismiss so as to bring all claims in state court. Williams Decl. ¶¶ 6-7.
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Under Federal Rule of Civil Procedure 41(a)(2), Ms. Smith-Dickerson may dismiss her
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suit only with approval of the Court because State Farm has already answered her complaint. See
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Fed. R. Civ. P. 41(a)(2) (providing that, “[e]xcept as provided in Rule 41(a)(1) [e.g., allowing for
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a voluntary dismissal by the plaintiff without a court order prior to the opposing party serving an
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answer], an action may be dismissed at the plaintiff‟s request only by court order, on terms that the
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court considers proper”).
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“A district court should grant a motion for voluntary dismissal under Rule 41(a)(2) unless
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a defendant can show that it will suffer some plain legal prejudice as a result.” Smith v. Lenches,
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263 F.3d 972, 975 (9th Cir. 2001). “„[L]egal prejudice‟ means „prejudice to some legal interest,
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some legal claim, some legal argument.‟” Id. at 976. “[P]lain legal prejudice does not result
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merely because the defendant will be inconvenienced by having to defend in another forum or
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where a plaintiff would gain a tactical advantage by that dismissal.” Id.; see also Hamilton v.
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Firestone Tire & Rubber Co., 679 F.2d 143, 145 (9th Cir. 1982) (stating that “[p]lain legal
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prejudice . . . does not result simply when defendant faces the prospect of a second lawsuit or
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when plaintiff merely gains some tactical advantage”); Am. Nat’l Bank & Tr. Co. v. Bic Corp., 931
F.2d 1411, 1413 (10th Cir. 1991) (stating that “Rule 41(a)(2) provides no guarantee of federal
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United States District Court
Northern District of California
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jurisdiction to protect a removed action” and so “ it is not an abuse of discretion for the district
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court to dismiss an action without prejudice even where the plaintiff‟s only motive is to
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recommence the action in state court”).
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In the instant case, State Farm does not expressly claim any legal prejudice if the Court
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were to dismiss pursuant to Rule 41(a)(2). State Farm‟s only argument is that, as a matter of
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“fairness,” Ms. Smith-Dickerson should “be required to pay a portion of [its] costs and fees as a
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condition of dismissal without prejudice.” Opp‟n at 2. Rule 41(a)(2) does provide that a court
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may dismiss “on terms that [it] considers proper.” Fed. R. Civ. P. 41(a)(2). And it is not
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uncommon for a dismissal without prejudice to be conditioned on the plaintiff‟s payment of the
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defendant‟s costs of litigation. See generally 8 Moore‟s Fed. Prac. – Civ. § 41.40[10][d][i]. But
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see Westlands Water Dist. v. United States, 100 F.3d 94, 97 (9th Cir. 1996) (noting that
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“[i]mposition of costs and fees as a condition for dismissal without prejudice is not mandatory”).
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“The purpose of awarding attorneys‟ fees on a voluntary dismissal without prejudice is to
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compensate the defendant for the unnecessary expense that the litigation has caused.” Cauley v.
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Wilson, 754 F.2d 769, 772 (7th Cir. 1985). The Ninth Circuit has expressly held that “a defendant
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is entitled only to recover, as a condition of dismissal under [Rule] 41(a)(2), attorneys[‟] fees or
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costs for work which is not useful in continuing litigation between the parties.” Koch v. Hankins,
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8 F.3d 650, 652 (9th Cir. 1993). Avoidable costs, of course, should not be awarded. See
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Westlands, 100 F.3d at 97-98.
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In the instant case, State Farm has asked to be awarded $7,100 in litigation costs. See
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Collier Decl. ¶ 18. However, the Court finds that the majority of the work identified by State
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Farm is work that will or will more than likely be useful in continuing litigation between the
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parties. For example, State Farm has asked to be awarded the fees its attorneys incurred in
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working on initial disclosures, but the initial disclosures will clearly still have significance in the
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new state court lawsuit that Ms. Smith-Dickerson is contemplating. As another example, State
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Farm has asked to be awarded the fees its attorneys incurred in drafting an answer to the
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complaint. This work will more than likely be useful in the state court lawsuit being contemplated
by Ms. Smith-Dickerson. Although State Farm probably cannot re-file the same exact answer in
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United States District Court
Northern District of California
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state court, it is more than likely that the answer that it filed in this case will be the template for the
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answer that will be filed in state court, with some modifications as necessary. And as yet another
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example, the time that State Farm‟s attorneys spent on the Rule 26(f) conference will not be
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rendered useless upon a dismissal of the instant case because the purpose of the conference was to
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discuss how the case would be litigated. Although the instant case will no longer be litigated upon
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a dismissal, the parties‟ discussion should still largely be applicable for purposes of the state court
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proceedings. A similar analysis applies to the time that State Farm‟s attorneys spent on the case
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management conference statement.
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Other litigation costs shall not be awarded because they are excessive or avoidable. For
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example, State Farm‟s attorney claims to have spent close to four hours to arrange a Rule 26(f)
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conference. The Court acknowledges State Farm‟s position that the number of hours is simply a
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reflection of Ms. Smith-Dickerson‟s failure to be responsive; nevertheless, the hours are excessive,
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particularly in light of the fact that Ms. Smith-Dickerson had filed a motion to remand. Also,
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State Farm seeks to charge Ms. Smith-Dickerson with the appearance fee it incurred upon removal
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to this Court. However, the decision to remove was made by State Farm and thus Ms. Smith-
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Dickerson should not be required to bear that cost.
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The only litigation cost for which payment – in part – is a fair condition of dismissal is the
appearance fee that State Farm incurred for appearing before the state court prior to the removal of
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the instant case to federal court.
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Requiring Ms. Smith-Dickerson to pay a part of this fee is fair because, when she files her
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new lawsuit in state court, then State Farm will be forced to pay another appearance fee. It is not
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reasonable for State Farm to pay two appearance fees in their entirety when Ms. Smith-Dickerson
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is effectively bringing only one lawsuit. On the other hand, requiring Ms. Smith-Dickerson to pay
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the full fee is not fair either. If State Farm had not removed the instant case, then Ms. Smith-
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Dickerson could have added the former owner of the car to the existing case and State Farm would
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not have to incur an appearance fee in a second case. To be clear, the Court is not punishing State
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Farm for exercising its removal rights; it is simply holding that Ms. Smith-Dickerson cannot be
held fully to blame for the accrual of two appearance fees. The Court also notes that there is
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United States District Court
Northern District of California
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nothing to suggest that Ms. Smith-Dickerson‟s failure to name the former owner of the car at the
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outset of litigation was done in bad faith.
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Accordingly, the Court hereby GRANTS Ms. Smith-Dickerson‟s motion to dismiss her
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case, but dismissal is conditioned on her payment to State Farm of $225 (i.e., half the cost of the
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state court appearance fee). See Collier Decl. ¶ 18. Payment shall be made within one week of
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the date of this order and, within two weeks of the date of this order, the parties shall file a joint
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stipulation of dismissal. The hearing on the motion to dismiss is VACATED.
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This order disposes of Docket No. 29.
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IT IS SO ORDERED.
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Dated: August 6, 2018
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______________________________________
EDWARD M. CHEN
United States District Judge
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