McLain et al v. Fluor Enterprises, Inc. et al
Filing
502
ORDER & REASONS: ORDERED that Relators' Motion for Voluntary Dismissal of Pending Claims (Rec. Doc. 476) is GRANTED. Relators' remaining claims are DISMISSED with prejudice to Relators, but without prejudice to the United States. FURTHER ORDERED that Shaw's Motion to Dismiss Count 4 of Second Amended Complaint (Rec. Doc. 474) is DENIED as moot. FURTHER ORDERED that Shaw's Motion to Strike Relators' Untimely Opposition (Rec. Doc. 480) is DENIED as moot. FURTHER ORDE RED that Fluor's Motion for Summary Judgment Seeking Dismissal of Counts 1 and 2 (Rec. Doc. 488) is DENIED as moot. FURTHER ORDERED that Shaw's Motion for Summary Judgment (Rec. Doc. 492) is DENIED as moot. Signed by Judge Carl Barbier on 3/15/16. (sek)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
UNITED STATES OF AMERICA
ex rel. TERRY D. MCLAIN
ET AL.
CIVIL ACTION
VERSUS
NO: 06-11229
FLUOR ENTERPRISES, INC.,
ET AL.
SECTION: “J”(3)
ORDER & REASONS
Before the Court is a Motion for Voluntary Dismissal of
Pending Claims (Rec. Doc. 476) filed by Plaintiff-Relators, Terry
D. McLain and J. Len Hodges (“Relators”); an opposition thereto
(Rec.
Doc.
489)
filed
by
Defendant
Fluor
Enterprises
Inc.
(“Fluor”); and an opposition thereto (Rec. Doc. 490) filed by
Defendant Shaw Environmental, Inc. (“Shaw”). Before the Court are
also Shaw’s Motion to Dismiss Count 4 of Second Amended Complaint
(Rec.
Doc.
474),
Shaw’s
Motion
to
Strike
Relators’
Untimely
Opposition (Rec. Doc. 480), Fluor’s Motion for Summary Judgment
Seeking Dismissal of Counts 1 and 2 (Rec. Doc. 488), and Shaw’s
Motion for Summary Judgment (Rec. Doc. 492). Having considered the
motions and legal memoranda, the record, and the applicable law,
the Court finds that Relators’ Motion for Voluntary Dismissal of
Pending Claims should be GRANTED and all other motions DENIED as
moot.
FACTS AND PROCEDURAL BACKGROUND
As detailed more fully in a prior Order and Reasons, this qui
tam case concerns the Defendants’ alleged failure to comply with
Louisiana liquefied petroleum (“LP”) safety statutes during the
installation of temporary housing units (“THUs”) in the aftermath
of Hurricanes Katrina and Rita. (Rec. Doc. 466, at 2.) During this
time, Fluor, Shaw, and CH2M Hill Constructors, Inc. (“CH2M Hill”),
engaged subcontractors to install LP gas systems in THUs used to
house people displaced by Katrina and Rita. Id. The Relators allege
that
Defendants
reimbursement
violated
from
the
the
False
Federal
Claims
Emergency
Act
by
claiming
Management
Agency
(“FEMA”) for THU installations that did not comply with Louisiana
LP gas laws. Id.
The current pending complaint is the Second Amended Complaint
(“SAC”). (Rec. Doc. 370.) The SAC alleges two categories of claims:
“nullity” claims and “false statement” claims. (See Rec. Doc. 466,
at
3.)
In
underlying
their
“nullity”
subcontracts
were
claims,
Relators
absolutely
null
allege
as
a
that
matter
the
of
Louisiana law because the Defendants failed to obligate their
subcontractors to comply with the Louisiana LP gas laws, and
therefore Defendants’ claims for reimbursement made pursuant to
their subcontracts were false. In their “false statement” claims,
Relators allege that the Defendants misrepresented to FEMA that
their
subcontractors
and
staff
2
had
the
proper
training
and
licensing needed to perform LP gas installations or were in the
process of receiving these qualifications.
The Court dismissed Relators’ nullity claims against all
Defendants, finding that provisions of the subcontracts obligated
the subcontractors to comply with the state LP gas laws and the
subcontracts’ failure to specifically name the required LP gas
installation permits did not nullify the subcontracts. See id. at
27. The Court also dismissed Relators’ false-statement claims
against CH2M Hill, finding no issue of material fact regarding
whether CH2M Hill acted with specific intent of defrauding FEMA.
Id. at 26. However, the Court denied Fluor’s and Shaw’s motions
seeking dismissal of the false-statement claims against them,
because there remained issues of material fact as to whether Fluor
and Shaw knowingly misled FEMA in violation of the FCA. Id. at 14,
18. Thus, only the false-statement claims against Fluor and Shaw
remain pending in this litigation.
The Relators wish to appeal the Court’s ruling that their
allegations of subcontract nullity have no merit. In order to
accommodate that purpose, Relators filed the instant Motion for
Voluntary Dismissal of Pending Claims (Rec. Doc. 476), seeking to
dispose of all remaining claims as to all parties, sufficient to
allow the entry of a final judgment and an appeal therefrom.
Relators submit that the voluntary dismissal of the pending false-
3
statement
claims
may
be
with
prejudice
to
them,
but
without
prejudice to the United States. 1
Defendants opposed Relators’ motion. Defendants do not oppose
dismissal of the remaining claims with prejudice, but they pray
that the Court also rule on their pending motions to dismiss (Rec.
Doc. 474) and for summary judgment (Rec. Docs. 488, 492). In their
motions, Defendants seek dismissal of all claims on the grounds
that
the
Louisiana
LP
gas
laws
were
inapplicable
to
the
installation of THUs at issue. According to Defendants, all of
Relators’ claims are premised on the assumption that the Louisiana
LP gas laws were applicable to them. Because the Court dismissed
the nullity claims without deciding whether the Louisiana LP gas
laws applied, Defendants argue that the Court should rule on their
motions and decide this issue before entering a final judgment.
Defendants assert that the record will be complete for appeal and
a final judgment should issue after their pending motions are
decided.
DISCUSSION
Under circuit precedent, a district court should freely grant
a motion for voluntary dismissal unless it finds the nonmoving
party “will suffer some plain legal prejudice other than the mere
prospect of a second lawsuit.” Hyde v. Hoffmann-La Roche, Inc.,
1
After investigating the Relators’ allegations for over six years, the United
States declined intervention on December 27, 2012. (Rec. Doc. 51.) The United
States consents to Relators’ Motion for Voluntary Dismissal of Pending Claims.
4
511 F.3d 506, 509 (5th Cir. 2007); Elbaor v. Tripath Imaging, Inc.,
279 F.3d 314, 317 (5th Cir. 2002). “Legal prejudice has been
defined as ‘prejudice to some legal interest, some legal claim,
[or] some legal argument.’” Espinoza v. Nacher Corp., No. 07-051,
2007 WL 1557107, at *2 (E.D. Tex. May 24, 2007) (quoting Westlands
Water Dist. v. United States, 100 F.3d 94, 97 (9th Cir. 1996)).
For example, courts have found legal prejudice to exist where
dismissal might result in a defendant’s loss of a potentially
valuable defense. Hyde, 511 F.3d at 509; United States ex rel.
Matthews v. HealthSouth Corp., 332 F.3d 293, 297 (5th Cir. 2003)
(citing Elbaor, 279 F.3d at 318). Likewise, a defendant’s loss of
significant time, effort, or expense in preparing for trial can
also constitute legal prejudice. United States ex rel. Doe v. Dow
Chem. Co., 343 F.3d 325, 330 (5th Cir. 2003).
In deciding whether to grant dismissal, a district court takes
a number of factors into consideration though “there is no single
formula for balancing a court’s discretion on a Rule 41(a)(2)
determination.” Oxford v. Williams Cos., 154 F. Supp. 2d 942, 951
(E.D.
Tex.
typically
2001).
include
These
(1)
factors,
when
in
among
the
other
course
of
considerations,
litigation
the
plaintiff files the motion, see id.; (2) whether the suit is still
in pretrial stages, see Templeton v. Nedlloyd Lines, 901 F.2d 1273,
1275-76
(5th
Cir.
1990);
(3)
whether
the
parties
have
filed
numerous pleadings and memoranda; (4) whether the parties have
5
attended
conferences;
(5)
whether
there
are
prior
court
determinations adverse to the plaintiff’s position, see Davis v.
Huskipower Outdoor Equip. Corp., 936 F.2d 193, 199 (5th Cir. 1991);
(6) whether hearings have been held; (7) whether any defendants
have been dismissed on summary judgment; and (8) whether the
parties
have
undertaken
significant
discovery,
see
Hartford
Accident & Indem. Co. v. Costa Lines Cargo Servs., Inc., 903 F.2d
352, 360 (5th Cir. 1990).
In fact, there are only a limited number of circumstances
that will warrant denial of a Rule 41(a)(2) motion, because “the
[court] should not require that a plaintiff continue to prosecute
an action that it no longer desires to pursue.” Radiant Tech. Corp.
v. Electrovert USA Corp., 122 F.R.D. 201, 204 (N.D. Tex. 1988)
(citing LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604 (5th Cir.
1976)). Outright denial of a motion to dismiss may be appropriate
when “the defendant demonstrates: (1) that dismissal will preclude
the court from deciding a pending case or claim-dispositive motion;
or (2) there is an objectively reasonable basis for requesting
that the merits of the action be resolved in this forum in order
to avoid legal prejudice.” Radiant, 122 F.R.D. at 203-04. However,
a pending claim-dispositive motion, such as a motion for summary
judgment, is only a single factor within the court’s analysis and
does not, in and of itself, preclude dismissal. Pontenberg v. Bos.
Sci. Corp., 252 F.3d 1253, 1258 (11th Cir. 2001); Metro. Fed. Bank
6
of Iowa, F.S.B. v. W.R. Grace & Co., 999 F.2d 1257, 1262 (8th Cir.
1993). Further, a motion for voluntary dismissal should be denied
where “a plaintiff seeks to circumvent an expected adverse result.”
See, e.g., Davis, 936 F.2d at 199 (dismissal denied, in part,
because of a comprehensive recommendation issued by the magistrate
judge adverse to the plaintiff’s position).
In sum, many courts have taken the position that dismissals
without prejudice generally should be granted by the district court
if no prejudicial effects would result for the opposing party. A
different view has been taken, however, when a plaintiff wishes to
dismiss with prejudice. Schwarz v. Folloder, 767 F.2d 125, 129
(5th Cir. 1985). Where, as here, a plaintiff’s Rule 41(a)(2) motion
“specifically request[s] dismissal with prejudice, it has been
held that the district court must grant that request.” 9 Charles
Alan Wright & Arthur R. Miller, Federal Practice & Procedure §
2367 (3d ed. 2008) (emphasis added); see also Degussa Admixtures,
Inc. v. Burnett, 471 F. Supp. 2d 848, 851 (W.D. Mich. 2007) (“It
generally is considered an abuse of discretion for a court to deny
a plaintiff’s request for voluntary dismissal with prejudice.”
(citing Smoot v. Fox, 340 F.2d 301, 303 (6th Cir. 1964))).
In the instant case, the Court concludes that Relators’ Motion
for Voluntary Dismissal of Pending Claims should be granted. The
fact
that
Relators
seek
dismissal
with
prejudice
to
them
significantly reduces any injustice to Defendants. See Schwarz,
7
767 F.2d at 129 (“[N]o matter when a dismissal with prejudice is
granted, it does not harm the defendant.”). Indeed, Defendants
cite no case in which a court has refused to grant a dismissal
with prejudice at the plaintiff’s request. Moreover, Defendants
have failed to demonstrate that they will suffer legal prejudice
as a result of the dismissal. Considering the fact that Relators’
motion seeks dismissal with prejudice, and the proscription that
a Rule 41(a)(2) motion will be granted unless the defendant will
suffer some plain legal prejudice, the Court finds the Motion for
Voluntary Dismissal of Pending Claims to have merit. In light of
the Court’s grant of Relators’ motion to dismiss with prejudice,
Defendants’ motions will be denied as moot.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Relators’ Motion for Voluntary
Dismissal of Pending Claims (Rec. Doc. 476) is GRANTED. Relators’
remaining claims are DISMISSED with prejudice to Relators, but
without prejudice to the United States.
IT IS FURTHER ORDERED that Shaw’s Motion to Dismiss Count 4
of Second Amended Complaint (Rec. Doc. 474) is DENIED as moot.
IT IS FURTHER ORDERED that Shaw’s Motion to Strike Relators’
Untimely Opposition (Rec. Doc. 480) is DENIED as moot.
8
IT IS FURTHER ORDERED that Fluor’s Motion for Summary Judgment
Seeking Dismissal of Counts 1 and 2 (Rec. Doc. 488) is DENIED as
moot.
IT IS FURTHER ORDERED that Shaw’s Motion for Summary Judgment
(Rec. Doc. 492) is DENIED as moot.
New Orleans, Louisiana, this 15th day of March, 2016.
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
9
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