Reser's Fine Foods, Inc. v. Bob Evans Farms, Inc et al

Filing 129

Opinion and Order regarding Notice of Voluntary Dismissal 90 . Plaintiff's Notice for Voluntary Dismissal Without Prejudice is granted in part and denied in part. Dismissal without prejudice is granted subject to the Court's terms and conditions, and plaintiff's claims are hereby dismissed. Within 21 days, defendant shall submit an affidavit of fees as set forth in the Opinion and Order. Signed on 11/25/2013 by Chief Judge Ann L. Aiken. (lg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

RESER'S FINE FOODS,
INC., a domestic
business corporation,

Civ. No. 3:13-cv-00098-AA

Plaintiff,
OPINION AND ORDER
v.

BOB EVANS FARMS, INC., an
Ohio-based corporation;
BOB EVANS FARM FOODS, INC.,
an Ohio-based corporation,
Defendants.

AIKEN, Chief Judge:
Plaintiff

Reser's

Fine

Foods,

Inc.

seeks

to

voluntarily

dismiss its claims against defendants Bob Evans Farms,

Inc.,

Bob

Evans Farms LLC, and BEF Foods, Inc. without prejudice and without
conditions.
After reviewing the record, plaintiff's motion for voluntary
dismissal without prejudice is GRANTED in part and DENIED in part.
1 - OPINION AND ORDER

Specifically, dismissal without prejudice is GRANTED subject to the
Court's

terms

and

conditions.

Plaintiff's

request

that

no

conditions be imposed upon dismissal is DENIED.
PROCEDURAL BACKGROUND

On January 18, 2013, plaintiff filed suit against defendants
alleging breach of a non-disclosure agreement, misappropriation of
trade secrets,

and conversion relating to defendants'

production

and sale of baked refrigerated food items. On February 22,
defendants

filed

their

answer,

including

2013,

counterclaims

for

intentional contractual interference, violation of the Lanham Act,
unfair competition, breach of contract, and promissory estoppel.
On March 8,

2013, defendants moved for summary judgment on

plaintiff's claims. That same day, this Court granted plaintiff's
motion to stay summary judgment pending discovery. Thereafter, on
May 4, 2013, this Court denied plaintiff's motion for preliminary
injunction. During the next several months, the parties proceeded
with limited discovery.
On September 13, 2013, plaintiff filed a notice of voluntary
dismissal

without

prejudice

and

without

attorneys

fees.

On

September 17, 2013, this Court issued a scheduling order construing
that notice as a motion to voluntarily dismiss.
STANDARD

Federal Rule of Civil Procedure 41(a) (2) allows a plaintiff,
pursuant to an order of the court and subject to any terms and

2 - OPINION AND ORDER

conditions the court deems proper, to dismiss an action without
prejudice at any time. See Fed. R. Civ. P. 41 (a) (2); Stevedoring
Servs. of Am. v. Armilla Int'l B.V., 889 F.2d 919, 921 (9th Cir.
1989) .
A plaintiff's motion for voluntary dismissal without
prejudice is addressed to the court's sound discretion. Westlands
Water Dist. v. United States, 100 F.3d 94,

96 (9th Cir. 1996)

However, such a motion should be granted with prejudice, as
opposed to without, if the defendant "will suffer some plain
legal prejudice as a result." Smith v. Lenches, 263 F.3d 972,

975

(9th Cir. 2 0 01) .
DISCUSSION

I. Dismissal Without Prejudice
Plaintiff asserts that defendants will not suffer legal
prejudice if this motion is granted and plaintiff's claims are
dismissed without prejudice. Legal prejudice, in this context, is
defined as "prejudice to some legal interest, some legal claim,
some legal argument." Westlands, 100 F.3d at 97.
Defendants contend that they will suffer legal prejudice if
plaintiff's motion is granted because "a dismissal without
prejudice will not allow Bob Evans to pursue attorneys' fees and
costs under the Trade Secret Act and the NDA
at 12).

." (Doc. #103

The Ninth Circuit, however, has held that the incurrence

of expenses in defending against an action does not amount to

3 - OPINION AND ORDER

legal prejudice. Westlands, 100 F.3d at 97.
Nonetheless, defendants cite to case law suggesting that,
nwhere monetary or other burdens appear to be extreme or
unreasonable," the legal prejudice threshold is met.
at 14)

(Doc. #103

(citing Hanson v. NCO Fin Sys., Inc., Civ. 04-3059-CO,

2005 WL 751957

(D. Or. Apr. 1, 2005)). Nothing in this case,

however, indicates that defendants' monetary burdens to date have
been extreme or unreasonable given the normal course of
litigation. In addition to the fact that depositions have not yet
been taken, substantive summary judgment briefing was stayed
pending discovery. Thus, while this Court recognizes that eight
months of discovery have undoubtedly resulted in significant
costs, those costs do not constitute a nlegal prejudice," per the
definition proffered by the Ninth Circuit in Westlands. 100 F.3d
at 97.
Defendants further assert that they will suffer legal
prejudice because nReser's seeks dismissal to avoid an adverse
ruling on Bob Evans' motion for summary judgment and to avoid
complying with its discovery obligations." (Doc. #103 at 13). To
support this assertion, defendants cite to the theory that nthe
avoidance of an adverse ruling is an abusive reason to seek
dismissal." White v. Donley, 2008 WL 4185651, at *3 (C.D. Cal.
Sep. 4, 2008). Defendants' argument presupposes that plaintiff's
claims will fail, or at least have a substantial likelihood of

4 - OPINION AND ORDER

failing, on the merits. Plaintiff correctly identifies several
elements of this case that suggest defendants' assumptions are
premature. Specifically, "there is a pending dispositive motion
that is not fully briefed, no depositions have been taken, ediscovery has not been completed,
incomplete .

[and] discovery is

." (Doc. #118 at 9)

Accordingly, plaintiff's

reasons for dismissal are not comparable to those expressed in
the cases defendant cites in support of its "avoidance of an
adverse ruling" argument. See AF Holdings LLC v. Navasca, 2013 WL
1748011 (N.D. Cal. Apr. 23, 2013)

(relating likelihood of adverse

ruling to plaintiff's inability to establish standing); In re
Exxon Valdez, 102 F.3d 429 (9th Cir. 1996)

(granting dismissal

with prejudice because defendants spent exorbitant amounts of
money and time, two and a half years, pursuing discovery); InfaLab, Inc. V. KDS Nail Int'l, 2009 WL 161197 (E.D. Cal. Jan. 22,
2009)

(granting dismissal with prejudice upon completion of

discovery and plaintiff's concession of several other claims)
Therefore, defendants have not established legal prejudice to
warrant voluntary dismissal of plaintiff's claims with prejudice.
II. Dismissal Conditioned on an Award of Costs and Fees
Alternatively, defendants ask the Court to award attorneys'
fees and costs as a condition of dismissal without prejudice.
Although the court can protect a defendant's interests by
conditioning dismissal on the payment of appropriate costs and

5 - OPINION AND ORDER

attorneys' fees,

such an award is not mandatory. Stevedoring

Servs. of Am., 8 8 9 F. 2d at 921. Importantly, "if the district
court decides it should condition dismissal on the payment of
costs and attorney fees, the defendants should only be awarded
attorney fees for work which cannot be used in any future
litigation of these claims." Westlands, 100 F.3d at 97.
Plaintiff contends that dismissal should be granted without
conditions because "litigation among the parties will continue on
Ielated issues asserted in BEF's four counterclaims." (Doc. #96
at 7). Plaintiff's argument suggests that defendants'
counterclaims tie current and subsequent litigation such that
defendants' work to date will still be "useful" even after
dismissal. However, plaintiff's own characterization of
defendants' counterclaims illustrates the significant differences
between the claims plaintiff currently moves to dismiss and the
four counterclaims asserted by defendants.

(Doc. #96 at 2, 3) . To

clarify, plaintiff's claims allege "breach of a nondisclosure
agreement between the parties, misappropriation of trade secrets,
and conversion." Id. at 2. In contrast, defendants' counterclaims
allege "intentional interference with contractual or economic
relations, false advertising under the Lanham Act, unfair
competition, and breach of contract." Id. at 3. While the
parties' claims may be related, defendants' counterclaims raise
issues distinct from those raised by plaintiff's claims.

6 - OPINION AND ORDER

Perhaps more persuasive is plaintiff's assertion that
defendants' "existing work product will certainly be useful" if
plaintiff decides "at some point to resume pursuing its present
trade secrets and breach of contract claims." (Doc. #118 at 11).
While that may be true, the Ninth Circuit has held that
"defendants' interests can be protected by conditioning the
dismissal without prejudice upon the payment of appropriate costs
and attorney fees." Westlands, 100 F.3d at 97
(citing Koch v. Hankins, 8 F. 3d 650, 652

(emphasis added)

(9th Cir. 1993)). Thus,

the imposition of fees is suitable so long as defendants can show
affirmatively which work product will be unusable in future
litigation.
Based on the above analysis, this Court finds it appropriate
to condition dismissal of plaintiff's claims without prejudice
upon the payment of appropriate costs and attorney fees.
Specifically, dismissal is conditioned upon payment of
defendants' fees incurred in defending plaintiff's motion for
preliminary injunction and in bringing their motion for summary
judgment, to the extent such work product is unrelated to
defendants' counterclaims or is unusable in future litigation.
CONCLUSION

For the reasons cited above, plaintiff's Motion for
Voluntary Dismissal Without Prejudice (Doc. #90)

is GRANTED in

part and DENIED in part. Dismissal without prejudice is GRANTED

7 - OPINION AND ORDER

subject to the Court's terms and conditions, and plaintiff's
claims are HEREBY DISMISSED. Within 21 days from the date of this
order, defendants shall submit an affidavit of fees as set forth
above.
IT IS SO ORDERED.
Dated this

8 - OPINION AND ORDER

of November 2013.