Huang v. Behpour et al

Filing 69

ORDER GRANTING PLAINTIFF'S MOTION FOR VOLUNTARY DISMISSAL OF FIRST AMENDED COMPLAINT 42 ; 52 ; 57 ; 61 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 8/2/12. -- " The court grants Huang's motion for voluntary dismissal pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure. The court grants the motion without a hearing pursuant to Local Rule 7.2(d). The court also denies the motion to strike ECF No. 52-3. However, the court directs the Clerk of Court to immediately seal that document." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
)
Plaintiffs,
)
)
V.
)
)
ARMAND BEHPOUR; GC PACIFIC,
INC.; QUEEN EMMA REGENCY, LLC; )
COTTAGE CAPITAL, LLC; JOHN DOE )
DEFENDANTS 1-10; JANE DOE
)
DEFENDANTS 1-10; ROE
)
)
PARTNERSHIPS 1-10; AND ROE
GOVERNMENTAL ENTITIES 1-10
)
)
)
Defendants.
)
DONALD HUANG

CIVIL NO. 11-00456 SOM/RLP
ORDER GRANTING PLAINTIFF’S
MOTION FOR VOLUNTARY
DISMISSAL OF FIRST AMENDED
COMPLAINT

ORDER GRANTING PLAINTIFF’S MOTION FOR
VOLUNTARY DISMISSAL OF FIRST AMENDED COMPLAINT
I.

INTRODUCTION.
On July 22, 2011, Plaintiff Donald Huang filed the

original Complaint in this matter.

See ECF No. 1.

2012, Plaintiff filed a First Amended Complaint.

On April 19,

See ECF No. 42.

The First Amended Complaint asserts claims for copyright
infringement and a series of state law claims arising out of a
business transaction pertaining to a property in downtown
Honolulu.
On May 30, 2012, Huang filed a motion to dismiss his
First Amended Complaint.

See ECF No. 52.

Huang argues that

dismissal is appropriate because he has recently learned that
Defendants were not actually infringing on his copyrighted plans.
Huang says that, on or about April 24, 2012, Defendants sent him

a settlement communication that indicated that Defendants had not
used and did not plan on using Huang’s plans.

Because Huang

attached a copy of this settlement communication in support of
his motion, see ECF No. 52-3, Defendants have moved to strike the
letter and expunge it from the record.

See ECF No. 57.

Rather

than strike the exhibit and expunge it from the record, the
court, recognizing a compelling need to protect settlement
offers, directs the Clerk of Court to immediately seal the
settlement communication.1
The court grants Huang’s motion to voluntarily dismiss
the First Amended Complaint.
II.

BACKGROUND INFORMATION
Huang claims to be an architectural designer who

copyrighted a business and architectural plan that was supposed
to transform a downtown building into housing for elderly
residents with care facilities.
¶¶ 3, 9, 10, 27.

See First Amended Complaint

Huang alleges that Defendants promised that he

would be treated like a partner in the project.

Id. ¶¶ 20-21.

Huang alleges that Defendants have been using his plans without
compensating him.

Id. ¶ 24.

1

The exhibit is not here being offered or considered to
prove or disprove the validity or amount of a disputed claim.
Instead, Huang offers it to show that he now has notice of events
that he did not previously have. This use is not prohibited by
Rule 408 of the Federal Rules of Civil Procedure.
2

On April 24, 2012, Defendants notified Huang that they
were not using and were not planning on using his design, and
that, in any event, the Department of Planning and Permitting had
not approved Defendants’ plans for a group living facility.
ECF No. 52-3.

See

Huang says that, in light of the letter, he no

longer believes he has a claim for copyright infringement.

Huang

says that he now only has state-law claims and therefore seeks
voluntary dismissal of the First Amended Complaint.

He has

already filed an action in state court asserting his state-law
claims.
III.

LEGAL STANDARD
A.

Rule 12(h)(3) is Inapplicable.

Huang seeks dismissal of the First Amended Complaint
pursuant to Federal Rules of Civil Procedure Rule 12(h)(3), which
allows this court to dismiss an action whenever the court
determines that it lacks subject matter jurisdiction.
however, does not lack subject matter jurisdiction.

The court,

The First

Amended Complaint asserts a copyright claim for which this court
has exclusive jurisdiction pursuant to 28 U.S.C. 1338(a).
Whether the claim is supported by facts goes to the merits of the
claim, not to whether this court has subject matter jurisdiction.
Accordingly, Rule 12(h)(3) is inapplicable.

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B.

The Court Applies Rule 41(a)(2).

Because Huang is seeking to voluntarily dismiss his own
First Amended Complaint, the court construes his motion as one
under Rule 41(a)(2) of the Federal Rules of Civil Procedure,
which states that “an action may be dismissed at the plaintiff’s
request only by court order, on terms that the court considers
proper.”

Fed. R. Civ. P. 41(a)(2).
A Rule 41(a)(2) motion is addressed to the court’s

“sound discretion.”

Westlands Water Dist. v. United States, 100

F.3d 94, 97 (9th Cir. 1996).

“A district court should grant a

motion for voluntary dismissal under Rule 41(a)(2) unless a
defendant can show that it will suffer some plain legal prejudice
as a result.”
2001)).

Smith v. Lenches, 263 F.3d 972, 975 (9th Cir.

“Legal prejudice does not result merely because a

defendant will be inconvenienced by potentially having to defend
the action in a different forum or because the dispute will
remain unresolved.”

WPP Luxembourg Gamma Three Sarl v. Spot

Runner, Inc., 655 F.3d 1030, 1059 n.6 (9th Cir. 2011).

Expenses

incurred in defending a lawsuit also do not amount to legal
prejudice.

Westlands Water Dist., 100 F.3d at 97.

Instead, to

have “legal prejudice,” there must be “prejudice to some legal
interest, some legal claim, some legal argument.”

Id.

Even if a defendant is not legally prejudiced by a
plaintiff’s voluntary dismissal of a complaint, the court may
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protect the defendant’s interests by imposing attorney’s fees and
costs as a condition of granting the voluntary dismissal.
Imposition of such fees and costs is not required.

Id.

If the

court does impose fees, fees should only be awarded for work that
cannot be used in future litigation.
IV.

Id.

ANALYSIS
Huang seeks to dismiss his First Amended Complaint

without prejudice because, while he no longer intends to pursue
his copyright claim, he wishes to pursue his state-law claims in
a case he filed in state court on July 20, 2012.
12-1-2004-07 ECN.

See Civil No.

Because Defendants do not demonstrate that

they will suffer legal prejudice if the motion is granted, the
court grants the motion and dismisses the First Amended Complaint
without prejudice.
Defendants argue that Huang’s claims are frivolous and
should therefore be dismissed with prejudice.

Alternatively,

Defendants ask that any dismissal be conditioned on Huang’s
payment of Defendants’ fees and costs.

Defendants contend that

“the frivolity of his claim” is shown by Huang’s acknowledgment
that Defendants have not infringed on his copyrighted work.
Opposition at 9, ECF No. 58.

See

However, Defendants make no showing

that the copyright infringement claim was frivolous when filed;
they show only that they convinced Huang to dismiss that claim
based on information they gave him after this action was filed.

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According to Defendants, allowing the First Amended
Complaint to be dismissed without prejudice would mean that
everything would start over and Huang would delay “the inevitable
entry of summary judgment.”
58.

See Opposition at 11, 17, ECF No.

This argument is unpersuasive.

to do over.

First, there is very little

Defendants have not, for example, filed the motion

for summary judgment they claim would be inevitably granted.
Instead, shortly after Defendants informed Huang that they had
not been infringing and had no plans to infringe on his copyright
and that the Department of Planning and Permitting had refused to
approve the proposed group living facility, Huang filed the
present motion to dismiss.

This saved Defendants the need to

file any motion concerning the copyright claim.

Second, to the

extent Defendants have made preparations to litigate the statelaw claims, that preparation will transfer to the state-court
case.
Nor is the court persuaded that dismissal of the
copyright infringement claim should be conditioned on the payment
of attorney’s fees.

Defendants contend that “Plaintiff knew or

reasonably should have known . . . at the time he filed his
Complaint and his First Amended Complaint, that Defendants had
not built anything on the subject property, and thus could not
have yet violated any copyright Plaintiff had obtained.”
Opposition at 13-14.

Defendants are not persuasive on this

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point.

Even if nothing had been erected, Defendants

theoretically could have been working off of Huang’s design.

The

letter Defendants sent Huang in April 2012 informed Huang that
Defendants had not been using his plans and had no intention of
using those plans.

The letter also told Huang that the

Department of Planning and Permitting had denied an application
for a conditional use permit to establish a group living facility
based on concerns about parking that made the site unsuitable.
Nothing in the record indicates that, before the date of the
letter, Huang knew that his plans had not been submitted as part
of the conditional use permit application or that Defendants were
not otherwise using his plans without paying for them.
Defendants also seek to condition the dismissal of the
Complaint on the payment of costs.

However, Defendants fail to

submit anything detailing those costs.

Without such information,

this court cannot tell whether conditioning dismissal on payment
of costs is appropriate.
Although the court is allowing the voluntary dismissal
of this case without prejudice and without conditioning it on the
payment of fees and costs, the court is not precluding Defendants
from submitting a motion in compliance with Local Rule 54.3 that
seeks attorney’s fees, either pursuant to an agreement and state
law, or for bad faith conduct under Rule 11, 28 U.S.C. § 1927,
and/or the court’s inherent powers, if such a motion is

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appropriate.

Similarly, the court is not precluding Defendants

from seeking costs as a prevailing party, if such a motion is
appropriate and complies with Local Rule 54.2.

The court is not

here stating that any motion for fees and costs is appropriate,
only that this order, while not awarding fees or costs, does not
preclude Defendants from seeking fees and costs, and does not
preclude either the denial or award of fees or the taxation or
other award of costs.
V.

CONCLUSION.
The court grants Huang’s motion for voluntary dismissal

pursuant to Rule 41(a)(2) of the Federal Rules of Civil
Procedure.

The court grants the motion without a hearing

pursuant to Local Rule 7.2(d).
The court also denies the motion to strike ECF No. 523.

However, the court directs the Clerk of Court to immediately

seal that document.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, August 2, 2012.

/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge

Huang v. Behpour et al., Civ. No. 11-00456 SOM/RLP; ORDER GRANTING PLAINTIFF’S MOTION
FOR VOLUNTARY DISMISSAL OF FIRST AMENDED COMPLAINT

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