City of Daytona Beach Police Officers' and Firefighters' Retirement System v. Ergen et al

Filing 13

ORDER dismissing this action without prejudice by Judge Christine M. Arguello on 12/13/13. (dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 13-cv-02631-CMA-MJW
CITY OF DAYTONA BEACH POLICE OFFICERS’
AND FIREFIGHTERS’ RETIREMENT SYSTEM, derivatively on
behalf of nominal defendant DISH NETWORK CORPORATION,
Plaintiffs,
v.
CHARLES W. ERGEN,
JOSEPH P. CLAYTON,
JAMES DeFRANCO,
CANTEY M. ERGEN,
STEVEN R. GOODBARN,
DAVID K. MOSKOWITZ,
TOM A. ORTOLF, and
CARL E. VOGEL,
Defendants.

ORDER FOR VOLUNTARY DISMISSAL OF CASE

This civil action comes before the court on Plaintiff City of Dayton Beach Police
Officers’ and Firefighters’ Retirement System’s Motion for Voluntary Dismissal Without
Prejudice (Doc. # 12), filed December 6, 2013, indicating that it wishes to dismiss this
civil action. The Court has reviewed Plaintiff’s motion, the case file, and the applicable
law and is sufficiently advised in the premises.
Fed. R. Civ. P. 41(a)(1)(A)(ii) allows a voluntary dismissal by plaintiffs without
court approval by filing a stipulation of dismissal signed by all parties who have
appeared. Here, there has been no appearance by Defendants and the notice is

signed by Plaintiff. However, Rule 41 is also subject to Fed. R. Civ. P. 23.1(c).
Fed. R. Civ. P. 41(a)(1)(A). Fed. R. Civ. P. 23.1(c) further requires:
A derivative action may be settled, voluntarily dismissed, or compromised
only with the court's approval. Notice of a proposed settlement, voluntary
dismissal, or compromise must be given to shareholders or members in
the manner that the court orders.
Plaintiffs argue that the particular posture of this derivative action does not
require notice to shareholders because the concerns embodied in Rule 23.1 are not
present. In Papilsky v. Berndt, the Second Circuit described several of the policies
served by the notice requirement of Rule 23.1:
1) To prevent collusive private settlements which confer benefits solely
upon plaintiff and his counsel, rather than the corporation whose claim
they have presented.
2) To prevent malfeasing corporate officers from “buying off”
shareholders bold enough to challenge their action.
3) To preserve potentially valid claims from extinguishment through the
purely private decision of the particular shareholder presenting the
claim.
466 F.2d 251 (2 Cir.), cert. denied 409 U.S. 1077, 93 S.Ct. 689, 34 L.Ed.2d 665 (1972);
see also 7C Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, and Richard L.
Marcus, Federal Practice and Procedure § 1839 (3d ed.) (Notice and court approval
is intended to discourage the private settlement of a derivative claim under which a
shareholder-plaintiff and attorney personally profit to the exclusion of the corporation
and the other shareholders).

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The record of this case presents no trace of any collusive or other inappropriate
motivation behind Plaintiff’s decision to seek dismissal. Plaintiff states that it has not
reached a settlement in this case. It seeks dismissal at the direction of the magistrate
judge who denied Plaintiff’s unopposed motion to stay, which it sought so that it may
participate in another action in the District Court of Clark Country, Nevada captioned In
Re Dish Network Corporation Derivative Litigation, Case No. A-13-686775-B, in which a
shareholder of DISH Network Corporation makes essentially identical allegations as the
case at bar. (Doc. # 9, at 2.) Moreover, because Plaintiff seeks a dismissal without
prejudice and does so without giving notice to its shareholders, such a dismissal would
not have preclusive effect on other actions. See Papilsky, 466 F.2d at 260 (failure to
give notice strips an otherwise final judgment of its res judicata effect). And, because
the complained of conduct took place in the spring and summer of 2013, other
shareholders will not likely “face an insurmountable statute of limitations hurdle if they
commenced a new action.” Cf. Grima v. Applied Devices Corp., 78 F.R.D. 431, 432
(E.D.N.Y. 1978) (declining to dismiss shareholder derivative claim without prejudice
and without Rule 23.1 notice four years after alleged conduct because the statute of
limitations may preclude a later suit). For these reasons, the Court determines that
the specific facts of this case dictate that notice to shareholders is not necessary.
A voluntary dismissal pursuant to Rule 41(a)(1) is effective immediately upon the
filing of a written notice of dismissal, and no subsequent court order is necessary. See
Hyde Constr. Co. v. Koehring Co., 388 F.2d 501, 507 (10th Cir. 1968) (“Rule 41(a)(1)
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provides for a dismissal without order of the court by filing a notice of dismissal at any
time before service by the adverse party of an answer.”) (internal quotation marks and
citation omitted). The notice closes the file. See id.; see also Janssen v. Harris, 321
F.3d 998, 1000 (10th Cir. 2003) (“The filing of a notice of dismissal pursuant to Rule
41(a)(1)(i) does not require an order of the court.”) (citation omitted); Marex Titanic, Inc.
v. The Wrecked & Abandoned Vessel, 2 F.3d 544, 546 (4th Cir. 1993) (stating voluntary
dismissal is “self-executing, i.e., it is effective at the moment the notice is filed with the
clerk and no judicial approval is required”).
Accordingly, IT IS ORDERED that Plaintiff City of Dayton Beach Police Officers’
and Firefighters’ Retirement System’s Motion for Voluntary Dismissal Without Prejudice
(Doc. # 12), filed December 6, 2013, is GRANTED and this civil action is hereby
voluntarily DISMISSED WITHOUT PREJUDICE.
Dated: December

13 , 2013.
BY THE COURT:

________________________________
CHRISTINE M. ARGUELLO
United States District Judge

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