SCVNGR, Inc. d/b/a LevelUp v. DailyGobble, Inc. d/b/a Relevant
Filing
116
MEMORANDUM OPINION. Signed by Judge Richard G. Andrews on 10/2/2018. (nms)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
SCVNGR, INC. d/b/a LEVELUP,
Plaintiff;
Civil Action No. 17-1857-RGA
V.
DAILYGOBBLE, INC. d/b/a RELEVANT,
Defendant.
MEMORANDUM OPINION
Carl D. Neff, and Wali Rushdan, II, FOX ROTHSCHILD LLP, Wilmington, DE; Brian C.
Carroll, SCVNGR, INC. d/b/a LEVEL UP, Boston, MA, attorneys for Plaintiff.
Stephen B. Brauerman & Sara E. Bussiere, BAYARD, P.A. , Wilmington, DE; Hao Ni, NI,
WANG & MASSAND, PLLC, Dallas, TX, attorneys for Defendant.
October ~
018
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ANf t tRICT JUDGE:
Plaintiff SCVNGR, Inc. d/b/a LevelUp filed a motion to dismiss Count II of its
Complaint without prejudice. (D.I. 109). The Court has considered the parties' briefing. For the
following reasons, the Court GRANTS Plaintiffs motion to dismiss without prejudice.
I.
BACKGROUND
Plaintiff SCVNGR, Inc. d/b/a Level Up initiated this action against Defendant
DailyGobble, Inc. d/b/a Relevant in the United States District Court for the District of Rhode
Island. (D.I. 1). Plaintiffs Complaint alleged two causes of action. Count I alleges Defendant
infringed U.S. Patent No. 8,924,260 ("the '260 patent"). Id. Count II alleges a claim for tortious
interference with contractual relations under Rhode Island state law. Id. Defendant filed a motion
to dismiss for improper venue. (D.I. 92). The Rhode Island Court then transferred the case to the
this Court. (D.I. 97). Plaintiff now requests dismissal of Count II without prejudice. (D.I. 109).
II.
LEGALSTANDARD
Rule 41 (a)(2) of the Federal Rules of Civil Procedure provides, "an action may be
dismissed at the plaintiffs request only by court order, on terms that the court considers
proper. ... Unless the order states otherwise, a dismissal under this paragraph (2) is without
prejudice." " [T]he grant or denial of voluntary dismissal without prejudice is a matter of judicial
discretion ... ." Ockert v. Union Barge Line Corp. , 190 F.2d 303 , 304 (3d Cir. 1951). A motion
for voluntary dismissal without prejudice should be granted unless the dismissal will result in
legal prejudice to the defendant. Sanitec Indus., Inc. v. Sanitec Worldwide, Ltd. , 2006 WL
890880, at *1 (D. Del. Apr. 3, 2006) (citing DuToit v. Strategic Minerals Corp., 136 F.R.D. 82,
85 (D. Del. 1991)). "The mere prospect that a defendant will face a subsequent lawsuit is not
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legal prejudice." Reach & Assocs. v. Dencer, 2004 WL 253487, at* 1 (D. Del. Feb. 9, 2004)
(citing DuToit, 136 F.R.D. at 85).
In determining whether legal prejudice will result from dismissal of the claim, "a court
should consider 1) any excessive and duplicative expense of a second litigation; [2)] the effort
and expense incurred by a defendant in preparing for trial ; [3)] the extent to which the pending
litigation has progressed; and [4)] the claimant' s diligence in moving to dismiss. " Reach &
Assocs., 2004 WL 253487, at * 1 (alteration in original) (internal quotations omitted); Peltz v.
Sears, Roebuck & Co., 367 F. Supp. 2d 711 , 715 (E.D. Pa. 2005). Plaintiff contends that the
Court should look to differing factors taken from other courts and circuits (D.I. 109 at 3), but
also cites to cases using the factors listed above. Peltz, 367 F. Supp. 2d at 715.
III.
DISCUSSION
Plaintiff argues that Defendant will not suffer legal prejudice from a dismissal without
prejudice of Count II because the mere prospect of a second litigation alone does not create legal
prejudice. (D.I. 109 at 4). Defendant asserts that Plaintiff is forum-shopping to force Defendant
to expend time, money, and other resources on litigation in multiple venues. 1 (D.I. 110 at 4-6).
Defendant further argues that Count II should not be dismissed because it "arises out of the same
nucleus of operative fact" as Count I, Plaintiffs patent infringement claim. (Id. at 6).
Defendant has failed to show that it will suffer any legal prejudice if Plaintiffs motion to
dismiss is granted. With regard to the first two factors , the effort and expense Defendant has
expended on discovery related to Count II will not be wasted. Plaintiff states in its motion that it
intends to refile Count II in Rhode Island state court. Any discovery related to Count II may be
1
Plaintiff and Defendant currently have a pending proceeding in the E.D. Texas in addition to
the current action.
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used in defending that litigation. While Defendant argues that it has invested significant effort
and time in discovery, at the time of Plaintiffs filing, the parties had only engaged in written
discovery and document production. (D.I. 109 at 4; D.I. 110 at 6). Defendant also contends that
permitting Plaintiff to refile Count II in Rhode Island state court will create excessive and
duplicative expense because any litigation of Count II will have to determine whether
Defendant's technology infringes the ' 260 patent. (D.I. 110 at 6-7). Plaintiff responds that Count
II does not require litigation of whether the ' 260 patent was infringed because the elements of
tortious interference with contractual relations are unrelated to infringement. (D.1. 112 at 1-2).
Defendant counters that Plaintiff specifically pled Defendant's use of infringing technology to
support Count II and therefore the claims "arise from the same nucleus of operative fact. " (D.1.
110 at 6-7).
However, Defendant' s reliance on the "same nucleus of operative fact" test is misplaced.
The determination of whether claims "arise from the same nucleus of operative fact" is relevant
to determine whether a federal court may exercise supplemental jurisdiction over a state law
claim, not whether a motion to dismiss a state law claim without prejudice must be denied.
Compare Cindrich v. Fisher, 341 F. App ' x 780, 789 (3d Cir. 2009) (discussing whether the
district court had abused its discretion in exercising supplemental jurisdiction), with Reach &
Assocs., 2004 WL 253487, at * 1 (listing factors for determination of legal prejudice caused by
voluntary dismissal). While litigation in Rhode Island state court and the instant litigation may
overlap, Defendant has not shown that it creates legal prejudice beyond " [t]he mere prospect that
[Defendant] will face a subsequent lawsuit." Reach & Assocs., 2004 WL 253487, at* 1.
Additionally, while the instant litigation had been ongoing for over two years at the time
Plaintiff filed its motion to dismiss, discovery has not yet closed. There is over one year until
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trial is scheduled to begin. This is not a case where the Plaintiff has filed a motion to dismiss on
the eve of trial. Moreover, there is no evidence that Plaintiff has unreasonably delayed filing its
motion to dismiss. The instant case was transferred to this Court on January 8, 2018. (D.I. 98).
Plaintiff filed its motion roughly two months later, on March 15, 2018 . (D.I. 109). Courts have
upheld motions for dismissal without prejudice even when the movant took longer than two
months to file. The docket in Reach & Assocs. shows that the motion to dismiss in that case was
filed four months after court order dismissing some defendants for lack of personal jurisdiction.
No. 02-cv-1355 (D.I. 53).
The Court finds that the Defendant will not suffer legal prejudice if Count II is dismissed
without prejudice.
IV.
CONCLUSION
For the foregoing reasons, Plaintiffs motion to dismiss Count II without prejudice is
GRANTED.
A separate order will be entered .
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