Lamb vs XTO Energy, Inc. et al
Filing
87
Memorandum Opinion and Order granting 80 Motion to Dismiss filed by Harold Lamb. The court dismisses without prejudice this action; and denies Defendant's request for attorneys fees. (see order for further specifics) (Ordered by Judge Sam A Lindsay on 9/29/2014) (mpw)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
HAROLD LAMB,
Plaintiff,
v.
XTO ENERGY, INC.,
Defendant,
and
BANK OF AMERICA,
Nomimal Defendant.
§
§
§
§
§
§
§
§
§
§
§
§
§
§
Civil Action No. 4:13-CV-1025-L
MEMORANDUM OPINION AND ORDER
Before the court is Plaintiff’s Motion for Voluntary Dismissal Pursuant to Federal Rules of
Civil Procedure 23.1(c) and 41(a) (Doc. 80), filed September 5, 2014. After considering the motion,
response, reply, and applicable law, the court grants Plaintiff’s Motion for Voluntary Dismissal
Pursuant to Federal Rules of Civil Procedure 41(a) and Rule 23.1(c) (Doc. 80); dismisses without
prejudice this action; and denies Defendant’s request for attorney’s fees.
Plaintiff Harold Lamb (“Plaintiff” or “Lamb”) seeks a voluntary dismissal of this action
without prejudice so that he can pursue his claims in state court where a related case is pending. The
state case was filed on January 22, 2014, after this action was filed. Defendant XTO Energy, Inc.
(“Defendant” or “XTO”) opposes the motion. Defendant acknowledges that, because of the posture
of this case, Plaintiff need not provide notice to other unitholders under Rule 23.1. Defendant
nevertheless contends that dismissal under Rule 41(a)(1) is not appropriate. Defendant contends that
Plaintiff seeks to dismiss this case to avoid an adverse decision on Defendants’ motions to dismiss,
Memorandum Opinion and Order – Page 1
and that dismissal without prejudice at this stage would be inappropriate after it and Nominal
Defendant Bank of America have spent substantial money preparing their motions to dismiss.
Defendant contends that if Plaintiff’s motion is granted, it should be conditioned on Plaintiff paying
Defendant’s fees incurred in defending this lawsuit. Because of its status as nominal party,
Defendant Bank of America has not taken a position on Plaintiff’s motion.
Plaintiff replies that there is no evidence that his request to voluntarily dismiss this action
is motivated by bad faith or forum shopping, as there has been no adverse ruling in the case against
him. Plaintiff further asserts that Defendant’s contention that he is seeking to avoid an adverse
decision on Defendants’ motions to dismiss is purely speculative. Plaintiff contends that dismissal
of this case will avoid redundant, duplicative litigation, and that the briefing in this case is the same
in many respects as that filed in the state court action. Plaintiff also contends that Defendant rejected
his suggestion to resolve the jurisdictional issue in this case in a more efficient manner without
extensive motion practice.
Under Federal Rule of Civil Procedure 41(a), a plaintiff may dismiss an action without court
order, subject to Rule 23.1(c), by filing a notice of dismissal before the opposing party serves either
an answer or motion for summary judgment. Fed. R. Civ. P. 41(a)(1)(A)(i). Federal Rule of Civil
Procedure 23.1(c) provides as follows: “A derivative action may be settled, voluntarily dismissed,
or compromised only with the court’s approval. Notice of a proposed settlement, voluntary
dismissal, or compromise must be given to shareholders or members in the manner that the court
orders.” The parties agree that notice to the other unitholders is not required in this case with respect
to Lamb’s request for dismissal.
According to XTO, no controlling authority could be found by it or Lamb that addresses the
factors that a court should consider when deciding whether to permit a dismissal under Rule 23.1(c).
Memorandum Opinion and Order – Page 2
XTO urges the court to apply the authority courts use in deciding whether to allow a dismissal under
Federal Rule of Civil Procedure 41(a)(2). Lamb, as far as the court can ascertain, agrees that the
court should look to such authority; however, he contends that authority applying Rule 41(a)(2)
supports dismissal without prejudice. The court agrees that the standard to apply in determining
whether a dismissal with prejudice should be allowed is Rule 41(a)(2) and will apply that standard.
In Hambric Sports Management, LLC v. Gaylord Sports Management, LLC, the undersigned
set forth the standard to be used under Rule 41(a)(2) for a motion to dismiss:
Ordinarily, a motion for voluntary dismissal “should be freely granted unless the
non-moving party will suffer some plain legal prejudice other than the mere prospect
of a second lawsuit.” Elbaor v. Tripath Imaging, Inc., 279 F.3d 314, 317 (5th Cir.
2002) (citation omitted). Rule 41(a)(2) evinces a preference for dismissal without
prejudice, as it provides, “Unless the order states otherwise, a dismissal under this
paragraph (2) is without prejudice.” Legal prejudice will exist when an affirmative
defense would be lost. Elbaor, 279 F.3d at 318. Legal prejudice may also exist if
the nonmovant could lose a forum non conveniens defense. Ikospentakis v. Thalassic
S. S. Agency, 915 F.2d 176, 179 (5th Cir. 1990). Finally, legal prejudice may exist
if “a plaintiff fails to seek dismissal until a late stage of trial, after the defendant has
exerted significant time and effort.” Davis v. Huskipower Outdoor Equip. Co., 936
F.2d 193, 199 (5th Cir. 1991). Whether legal prejudice exists under these
circumstances is a determination to be made by the court using its sound discretion.
If the court determines that legal prejudice exists, it may “refuse to grant a voluntary
dismissal.” Id. (citations omitted). “[T]he mere prospect of a second lawsuit is not
enough prejudice to a defendant to warrant denial of a motion to dismiss without
prejudice.” United States ex rel. Doe v. Dow Chem. Co., 343 F.3d 325, 330 (5th Cir.
2003).
A dismissal based on a motion filed pursuant to “Rule 41(a)(2) is within the
sound discretion of the court.” Kramer v. Butler, 845 F.2d 1291, 1294 (5th Cir.
1988) (citation and internal quotation marks omitted). From the plain text of Rule
41(a)(2), a court is essentially required to resolve three distinct issues: (1) whether
to permit a dismissal of the action; (2) whether any terms should be placed on or
accompany the dismissal; and (3) whether the dismissal is to be with or without
prejudice.
No. 3:09-CV-01662-L, 2013 WL 6181926, at*2-3 (N.D. Tex. Nov. 26, 2013).
Memorandum Opinion and Order – Page 3
XTO’s argument that Plaintiff is forum shopping to avoid an adverse ruling is unsupported
conjecture. Moreover, although XTO urges the court to apply the standard for Rule 41(a)(2), which
the court has done, ironically, the standard works against XTO. This case was initiated by Plaintiff
on December 31, 2013. None of the three conditions required to establish legal prejudice exists.
During the nine months since the case was filed, no scheduling order has been issued, no answers
or summary judgments have been filed, and there have been no decisions on the merits of Plaintiff’s
claims or the matters raised in Defendants’ motions to dismiss. Further, as the issues in this case
relate to and overlap those in the pending state case, judicial economy will be served if Plaintiff’s
motion is granted. For all of these reasons, the court concludes that XTO will not suffer any legal
prejudice if it is required to defend in state court and that no conditions should be placed on the
dismissal, namely, the payment of XTO’s attorney’s fees in preparing and filing its motion to
dismiss in January 2014.
For the reasons herein stated, the court grants Plaintiff’s Motion for Voluntary Dismissal
Pursuant to Federal Rules of Civil Procedure 41(a) and Rule 23.1(c) (Doc. 80); dismisses without
prejudice this action; and denies Defendant’s request for attorney’s fees. The court does not expect
to see this action again in federal court.
It is so ordered this 29th day of September, 2014.
_________________________________
Sam A. Lindsay
United States District Judge
Memorandum Opinion and Order – Page 4
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?