Shenna Corral et al v. HG Staffing, LLC et al
Filing
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ORDER that Plaintiff's motion to voluntarily dismiss the action ECF No. 6 is GRANTED on the condition that it be with prejudice; Plaintiff have until 4/12/2019 to withdraw their motion or consent to the dismissal despite the condition; Defendants' Motion for Partial Summary Judgment ECF No. 61 is conditionally DENIED as moot. Signed by Judge Larry R. Hicks on 3/13/2019. (Copies have been distributed pursuant to the NEF - KW)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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Plaintiffs, ORDER
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v.
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***
Case No. 3:16-cv-00386-LRH-WGC
SHENNA CORRAL, et al.,
HG STAFFING, LLC; MEI-GSR
HOLDINGS LLC d/b/a GRAND SIERRA
RESORT; and Does 1 through 50, inclusive,
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Defendants.
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Before the court is plaintiffs’ motion to dismiss. ECF No. 60. HG Staffing, LLC and
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MEI-GSR Holdings LLC d/b/a Grand Sierra Resort, (collectively “defendants”) filed a response
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(ECF No. 65), to which plaintiffs replied (ECF No. 67). Because dismissal will not cause
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defendants to suffer plain legal prejudice and for the reasons set forth in this Order, the court
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grants plaintiffs’ motion; however, does so on the condition that it be with prejudice.
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Also before the court is defendants’ motion for partial summary judgment. ECF No. 61.
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Plaintiffs filed a response (ECF No. 68), to which defendants replied (ECF No. 69). In light of
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the court’s order on plaintiffs’ motion to dismiss (ECF No. 60), the court conditionally denies
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defendants’ motion as moot.
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I.
BACKGROUND
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This dispute centers on defendants’ alleged failure to pay plaintiffs overtime wages. See
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ECF No. 14. The dispute began in a separate and now independent matter: Sargent et al. v. HG
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Staffing et al., 3:13-cv-00453-LRH-WGC. Sargent was removed to this court in August 2013,
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and its proposed classes were conditionally certified in May 2014. Sargent, 3:13-cv-00453-LRH-
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WGC at ECF Nos. 1, 40. But the court later decertified the proposed classes in March 2016 for
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not being “similarly situated” as required by the FLSA. Id. at ECF No. 174. By this time, the
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parties had conducted extensive discovery and had filed multiple motions. See id. at ECF Nos.
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82–83, 85, 94, 97–108, 112–21.
After the court ordered decertification in Sargent, this matter was filed on June 28, 2016.
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ECF No. 1. 1 The complaint was later amended. ECF No. 14. The amended complaint asserted
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one FLSA violation for the narrow-proposed class of employees who were ServerTainers and
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dancing dealers, allegedly “required to attend dance classes of an hour or more, two to four times
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a week,” without compensation. Id. It does not allege any state-law claims. See id. The amended
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complaint was filed by six plaintiffs on behalf of themselves and all others similarly situated. 2 Id.
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The parties have agreed to use the discovery from Sargent in this matter. ECF No. 31. The
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parties have also conducted additional discovery particularly for this matter. ECF Nos. 22, 25–
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31, 55, 58; see also ECF No. 51 at 3; and Ramirez et al. v. HG Staffing, LLC et al., 3:16-cv-
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00318-LRH-WGC at ECF Nos. 72, Ex. 2; 88.
On June 14, 2016, a state-court action was also filed after the decertification order in
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Sargent. ECF No. 47, Ex. A. The state-court action does not assert any FLSA claims; it instead
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asserts state-law claims for lost wages under Chapter 608 of the Nevada Revised Statutes
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(“NRS”) on behalf of four named plaintiffs—one of which is a plaintiff in this matter. Id. In
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early 2017 and before any motions were decided in the state-court action, the state court stayed
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the state-court action pending an anticipated decision from the Nevada Supreme Court. See
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Ramirez, 3:16-cv-00318-LRH-WGC at ECF No. 72, Ex. 1. The stay was not lifted until
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December 20, 2017. Id. This parallel state-court action is currently pending.
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Four other related cases with narrower proposed classes were filed as well. See Ramirez et al. v.
HG Staffing, LLC et al., 3:16-cv-00318-LRH-WGC; S. Reader et al. v. HG Staffing, LLC et al.,
3:16-cv-00387-LRH-WGC; Benson et al. v. HG Staffing et al., LLC, 3:16-cv-00388-LRH-WGC;
T. Reader et al. v. HG Staffing et al., LLC, 3:16-cv-00392-LRH-WGC.
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One of the named plaintiffs has since been terminated from this action. ECF No. 20.
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In January 2018, plaintiffs filed a motion to stay or in the alternative, dismiss this matter
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without prejudice based on the similarly natured claims in this action and the state-court action.
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ECF No. 47. After finding that a majority of the Colorado River Doctrine factors weighed
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against a stay, the court denied plaintiffs’ motion to stay with prejudice. ECF No. 59.
Plaintiffs now move to voluntarily dismiss this matter without prejudice, this time based
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on the Nevada Supreme Court’s ruling in Neville v. Eighth Judicial District Court in & for
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County of Clark, 406 P.3d 499 (Nev. 2017). ECF No. 60. Simultaneously, defendants move for
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partial summary judgment, arguing that the plaintiffs are barred by a two-year statute of
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limitations, 3 of whom are also barred because they never worked more than 40 hours per week
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as required to receive overtime under the FLSA. ECF No. 61. Defendants also allege that
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plaintiff Carrera should be dismissed “because she did not appear for deposition and her counsel
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stated on the record that she requested to withdraw from this action.” Id. The court’s Order as to
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these pending motions now follows.
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II.
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DISCUSSION
The Court dismisses plaintiffs’ action with prejudice pursuant to Federal Civil
Procedure Rule 41.
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Subject to certain exceptions, a plaintiff has the right to dismiss his or her action by filing
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“a notice of dismissal before the opposing party serves either an answer or a motion for summary
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judgment.” Fed. R. Civ. P. 41(a)(1)(A)(i). After the opposing party serves either an answer or a
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motion for summary judgment, the plaintiff loses this right. As defendants filed their answer to
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plaintiffs’ amended complaint on March 17, 2017, (ECF No. 23), dismissal is only permitted by
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court order. See Fed. R. Civ. P. 41(a)(2).
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The decision of whether to grant voluntary dismissal rests in the court’s discretion.
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Hamilton v. Firestone Tire & Rubber Co., Inc., 679 F.2d 143, 145 (9th Cir. 1982). “When ruling
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on a motion to dismiss without prejudice, the district court must determine whether the defendant
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will suffer some legal prejudice as a result of the dismissal.” Westlands Water Dist. v. United
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States, 100 F.3d 94, 96 (9th Cir. 1996). “Although case law does not articulate a precise
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definition of ‘legal prejudice,’ the cases focus on rights and defenses available to a defendant in
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future litigation,” concluding legal prejudice means “prejudice to some legal interest, some legal
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claim, some legal argument.” Id. at 97. Courts have specifically concluded that plain legal
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prejudice is more than “the prospect of a second lawsuit, . . . when plaintiff merely gains some
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tactical advantage,” or “the mere inconvenience of defending another lawsuit.” Hamilton, 679
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F.2d at 145; see also Westlands, 100 F.3d at 96 (“[T]he threat of future litigation which causes
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uncertainty is insufficient to establish plain legal prejudice.”); Veina v. Sutter Hotel Assocs. L.P.,
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No. C 98-0980 SI, 1998 WL 822773, at *3 (N.D. Cal. Nov. 9, 1998) (“[E]ven if plaintiff escapes
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some limits on discovery by refiling this action in state court, the fact that a plaintiff gains a
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tactical advantage by dismissing the action is not enough to show plain legal prejudice.”).
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Further, the Court has held that neither incurring significant expenses defending the suit nor the
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fact that trial preparations have begun amount to plain legal prejudice. See Hamilton, 679 F.2d at
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145-46. Courts have held that when dismissal would strip a defendant of an absolute defense,
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that does amount to plain legal prejudice. See Tibbetts by and through Tibbets v. Syntex Corp.,
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996 F.2d 1227, 1993 WL 241567, at *1-2 (9th Cir. July 2, 1993) (unpublished) (citing Phillips v.
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Illinois Central Gulf Railroad, 874 F.2d 984 (5th Cir. 1989)).
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Plaintiffs have filed this motion to voluntarily dismiss the pending action without
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prejudice following the Nevada Supreme Court’s decision in Neville. Because Neville held that
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employees have a private right of action for NRS Chapter 608 wage claims, see Neville, 406 P.3d
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at 504, plaintiffs seek to forego litigation of their federal wage claims in federal court for their
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more encompassing state law wage claims currently pending in state court. Defendants argue that
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if the court were to grant plaintiffs’ motion, they would suffer plain legal prejudice because they
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would be deprived of the applicable statute of limitations defense. As articulated fully in their
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motion for partial summary judgment, defendants argue that because plaintiffs failed to file
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consent to opt-in to the collective action their claims are barred by the FLSA’s two-year statute
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of limitation.
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The court disagrees with defendants that dismissal would cause them plain legal
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prejudice. Defendants’ cited case law is readily distinguishable from the facts at hand. Courts
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have held that when a plaintiff seeks dismissal in order to refile their case in a more favorable
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jurisdiction, one where the statute of limitations has not expired, defendants are legally
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prejudiced. See Elbaor v. Tripath Imaging, Inc., 279 F.3d 314, 318-19 (5th Cir. 2002) (after
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plaintiffs failed to provide the jurisdiction in which they wished to refile if the voluntary
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dismissal was granted, the Court determined that defendants would be legally prejudiced
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“because such dismissal would potentially strip it of a viable statute of limitations defense.”);
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Phillips, 874 F.2d at 987 (affirming the lower court’s denial of voluntary dismissal reasoning that
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while “the mere prospect of a second lawsuit on the same facts is not sufficiently prejudicial to
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the defendant to justify denial, . . . the facts in the second lawsuit would differ in that the
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defendant would be stripped of an absolute defense to the suit.”). The Ninth Circuit, relying on
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the Fifth Circuit’s reasoning, came to a similar conclusion. See Tibbets, 1993 WL 241567, at *2
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(“Similarly [to Phillips], the district court here concluded that [the defendant] would be
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prejudiced by having to defend the suit in another state where the statute of limitations had not
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run,” and therefore, it “was not an abuse of discretion,” for the district court to deny plaintiff’s
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motion for voluntary dismissal.).
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This case law is readily distinguishable from the case at hand. Here, plaintiffs have
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brought a single claim, violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 207.
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Claims for violations of the FLSA must be brought within 2 years of the violation. 29 U.S.C. §
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255(a). However, a “cause of action arising out of a willful violation may be commenced within
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three years after the cause of action accrued.” Id. This statute of limitations does not change
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regardless of which court, state or federal, hears the claim. Cf. Manshack v. Southwestern
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Electric Power Co., 915 F.2d 172, 174-75 (5th Cir. 1990) (in distinguishing itself from Phillips,
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the Court held that because both the federal court and the Texas state court are governed by the
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same choice of law principals defendants would not be stripped of an absolute defense; and
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therefore, it was not an abuse of discretion to grant the voluntary dismissal). Similarly to
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Manshack, dismissal would not strip defendants of an absolute defense: even if plaintiffs were to
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assert a FLSA claim in the parallel state-court action, the claim is bound by the same statute of
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limitations in both state and federal court.
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Further, unlike in Phillips where the plaintiffs sought voluntary dismissal so that they
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could refile in a jurisdiction where the statute of limitations was not a bar to the action, that is not
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the case here. Rather, plaintiffs wish to abandon their federal claims in favor of the more
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encompassing state law claims. That does not amount to plain legal prejudice. See Smith v.
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Lenches, 263 F.3d 972, 975-76 (9th Cir. 2001) (After the California Supreme Court ruled on an
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issue of state law, the federal district court granted plaintiff’s motion to voluntarily dismiss their
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federal claims in favor of pursuing their parallel state claims based on the same facts. The Ninth
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Circuit affirmed, finding that the district court’s dismissal with prejudice “only strengthens
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[their] conclusion that the dismissal caused no legal prejudice and was not an abuse of
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discretion.”); Davis v. USX Corp., 819 F.2d 1270, 1275 (4th Cir. 1987) (reversing the lower
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court’s denial of plaintiff’s motion for voluntary dismissal, reasoning that “in cases involving the
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scope of state law, courts should readily approve dismissal when a plaintiff wishes to pursue a
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claim in state court.”).
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However, after deciding to grant voluntary dismissal, the court must determine whether
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such dismissal operates with or without prejudice. The Second, Fourth, Fifth, Sixth, Seventh, and
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Eighth Circuits have all held that Rule 41(a)(2) provides the district court with authority to grant
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dismissal on the condition that it be with prejudice. See Gravatt v. Columbia University, 845
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F.2d 54, 55-56 (2d Cir. 1988); Andes v. Versant Corp., 788 F.2d 1033, 1037 (4th Cir. 1986);
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Elbaor, 279 F.3d at 320; U.S. v. One Tract of Real Property, 95 F.3d 422, 425 (6th Cir. 1996);
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Marlow v. Winston & Strawn, 19 F.3d 300, 304 (7th Cir. 1994); Jaramillo v. Burkhart, 59 F.3d
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78, 79 (8th Cir. 1995). Because allowing plaintiffs to refile this case, which has been pending for
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over 5 years, would be inequitable, the court finds that granting plaintiffs’ motion on the
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condition that it be with prejudice is appropriate.
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First, defendants have spent considerable time and money engaging in discovery and
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generally litigating this already 5-year-old case. See ECF No. 66. Additionally, this condition is
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not overly broad for the situation at hand: there is only one pending claim and therefore,
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dismissal with prejudice will only affect the claim under which defendants have also asserted a
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statute of limitations defense. Contra Elbaor, 279 F.3d at 320 (finding that dismissal with
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prejudice was overly broad because the statute of limitations defense did not apply to all of the
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claims). Further, plaintiffs have made the choice to split their claims between federal and state
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court. However, that does not mean that the court should allow them to fully litigate their claims
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in state court, and then, should they be unsuccessful, permit them to return to federal court and
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take another bite at the apple. If plaintiffs truly wish to abandon their federal law claims in favor
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of their state law claims, the court will allow them to do so, but they will not be permitted to
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return to federal court and attempt to relitigate this action at a later date.
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III.
CONCLUSION
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IT IS THEREFORE ORDERED that plaintiffs’ motion to voluntarily dismiss the action
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(ECF No. 60) is GRANTED on the condition that it be with prejudice. Plaintiffs have 30 days
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from the date of this Order to withdraw their motion or consent to the dismissal despite the
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condition. See Lau v. Glendora Unified School Dist., 792 F.2d 929, 931 (9th Cir. 1986) (holding
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that a plaintiff be given a “reasonable period of time within which to refuse the conditional
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voluntary dismissal by withdrawing her motion for dismissal or to accept the dismissal despite
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the imposition of conditions.”). A failure to respond within the 30 day window shall constitute a
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consent to dismissal with prejudice.
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IT IS FURTHER ORDERED that defendants’ motion for partial summary judgment
(ECF No. 61) is conditionally DENIED as moot.
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IT IS SO ORDERED.
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DATED this 13th day of March, 2019.
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LARRY R. HICKS
UNITED STATES DISTRICT JUDGE
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