Rodriguez v. IC System
MEMORANDUM OPINION AND ORDER MOOTING 19 Motion for Summary Judgment; GRANTING IN PART AND DENYING IN PART 23 Motion to Dismiss; Dismissed with Prejudice; and Closing Civil Case. Signed by Judge David C Guaderrama. (em)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
MEMORANDUM OPINION AND ORDER
Presently before the Court are Plaintiff Salvador Rodriguez's ("Plaintiff') "Motion to
Voluntarily Dismiss His Complaint Pursuant to F.R.C.P. 41(a)(2)" (ECF No. 23) ("Motion to
Dismiss") and "Memorandum of Law/Brief in Support of His Motion to Voluntarily Dismiss His
Complaint Pursuant to F.R.C.P. 41(a)(2)" (ECF No. 23-6) ("Brief in Support of Motion to
Dismiss") filed on March 7, 2017. Plaintiffbrought this lawsuit alleging that Defendant IC
System 1 ("Defendant") violated the Fair Debt Collection Practices Act ("FDCPA"). In his
Motion to Dismiss, Plaintiff requests the Court to dismiss this case with prejudice, each side
bearing its own.costs and fees. Mot. to Dismiss at 1, ECF No. 23.
Plaintiff filed the Motion to Dismiss shortly after Defendant filed its "Motion for
Summary Judgment" (ECF No. 19) on February 21, which is also pending. Defendant filed a
"Response to Plaintiff's Motion to Voluntarily Dismiss His Complaint" (ECF No. 26)
("Response to Motion to Dismiss"); therein, Defendant requests the Court to deny Plaintiffs
Motion to Dismiss, grant its Motion for Summary Judgment, and allow it to seek its costs and
expenses. Resp. to Mot. to Dismiss at 12. Plaintiff followed by filing a "Reply in Support of His
Although Plaintiffs complaint names Defendant as "IC System," see e.g., First Am. Compl. at
1, ECF No. 13, Defendant indicates that its proper name is "I.C. System, Inc.," see Def.'s Am. Answer at
l, ECF No. 20.
Motion to Voluntarily Dismiss His Complaint Pursuant to F.R.C.P. 41(a)(2)" (ECF No. 29)
(''Reply in Support of Motion to Dismiss"). For the reasons that follow, the Court GRANTS IN
PART and DENIES IN PART Plaintifrs Motion to Dismiss, and consequently, DENIES AS
MOOT Defendant's Motion for Summary Judgment.
Federal Rule of Civil Procedure 41(a)(2) provides, in relevant part, that after a defendant
files an answer or a motion for summary judgment "an action may be dismissed at the plaintifr s
request only by court order, on terms that the court considers proper.... Unless the order states
otherwise, a dismissal under this paragraph (2) is without prejudice." Fed. R. Civ. P. 41(a)(2).
The purpose of authorizing the court to condition a voluntary dismissal on proper terms is "to
prevent unfair prejudice to the other side in the case." In re FEMA Trailer Formaldahyde Prod
Liab. Litig., 628 F.3d 157, 162 (5th Cir. 2010). "Voluntary dismissal under Rule 41(a)(2) is a
matter within the sound discretion of the district court." Templeton v. Ned/loyd Lines, 901 F.2d
1273, 1274 (5th Cir. 1990).
Courts have taken different approaches depending on whether the voluntary dismissal is
sought with or without prejudice. Motions for voluntary dismissal without prejudice "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); see also, e.g., United States ex rei. McLain v. Fluor Enters., Inc., No. 06-11229,2016
WL 1031324, at *3 (E.D. La. Mar. 15, 2016) ("[M]any 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."). "Typical examples of such prejudice occur when
a party proposes to dismiss the case at a late stage of pretrial proceedings, or seeks to avoid an
imminent adverse ruling, or may on refiling deprive the defendant of a limitations defense." In
re FEMA Trailer Formaldahyde Prod Liab. Litig., 628 F.3d at 162-63. Moreover, where a
dismissal without prejudice would have caused plain legal prejudice, it is within the discretion of
the district court to either deny the motion outright or grant the motion and attach conditions that
cure the prejudice. Elbaor, 279 F.3d at 317-18; see also Harris v. Devon Energy Prod Co.,
L.P., 500 F. App'x 267, 269 (5th Cir. 2012) (finding plain legal prejudice, where the dismissal
without prejudice of the suit was intended to avoid an imminent adverse result on summary
judgment, and "modify[ing] the district court's judgment to dismiss the suit with prejudice").
However, where a plaintiff seeks dismissal with prejudice, courts generally take a
different position. In re Upd Glob. Res., Inc., Nos. H-15-2488, H-15-2717, 2016 WL 3964362,
at *23 (S.D. Tex. July 21, 2016); see also Schwarz v. Folloder, 767 F.2d 125, 129 (5th Cir. 1985)
("The situation is different in the case of a dismissal with prejudice."). "Where ... 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."' United States ex rei. McLain, 2016 WL 1031324, at *3
(emphasis and alternation in original) (quoting 9 Charles Alan Wright & Arthur R. Miller,
Federal Practice & Procedure § 2367 (3d ed. 2008)); 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 plaintiffs request for voluntary dismissal with prejudice." (citing
Smoot v. Fox, 340 F.2d 301,303 (6th Cir. 1964), cited with approval in Schwarz, 767 F.2d at 129
& n.5)). This is because "no matter when a dismissal with prejudice is granted, it does not harm
the defendant: The defendant receives all that he would have received had the case been
completed." Schwarz, 767 F.2d at129.
Here, Plaintiff moves for dismissal with prejudice. Plaintiff states that while there is a
reasonable legal argument that Defendant violated the FDCPA, given that district courts are
divided on the issue of whether a particular pattern of calls evidences intent to harass, the
potential recovery, and the difficulty of winning at trial, Plaintiff decided not to pursue these
claims. Br. in Supp. of Mot. to Dismiss at 2, ECF No. 23-6; Reply in Supp. of Mot. to Dismiss
at 5-6, ECF No. 29. He further argues that dismissal with prejudice will terminate his FDCPA
claims permanently, and therefore, it will not cause "plain legal prejudice" to defendant. Reply
in Supp. of Mot. to Dismiss at 3.
Defendant counters that it has incurred costs and fees in defending the case and would be
prejudiced if dismissal is granted. Resp. to Mot. to Dismiss at 5-6. Specifically, it claims that it
has colorable "bad faith" claims 15 U.S.C. § 1692k(a)(3), the FDCPA's fee-shifting provision,
and further under 28 U.S.C. § 1927. /d. at 6. It argues that "it would not be able to assert [these
claims] if the voluntary dismissal is granted." Id In the following, the Court addresses each of
these claims in tum, and finds Defendant's claims unavailing.
1. Defendant's Claims for Fees and Costs under 15 U.S.C. § 1692k(a)(3)
Section 1692k(a)(3) provides, in relevant part: "On a finding by the court that an action
under this section was brought in bad faith and for the purpose ofharassment, the court may
award to the defendant attorney's fees reasonable in relation to the work expended and costs."
15 U.S.C. § 1692k(a)(3) (emphasis added). Thus, in order to receive an award of attorney's fees,
a "prevailing defendant must show affirmatively that the plaintiff brought the FDCPA claim in
bad faith and for the purposes ofharassment." Perry v. Stewart Title Co., 756 F.2d 1197, 1211
(5th Cir.), modified on other grounds, 761 F.2d 237 (5th Cir. 1985). The terms "bad faith" and
"harassment" connote "more than simply bad judgment or negligence"; they imply "the
conscious doing of a wrong because of a dishonest purpose or moral obliquity." Cunningham v.
Credit Mgmt., L.P., No. 3:09-CV-1497-G, 2010 WL 3791049, at *2 (N.D. Tex. Sept. 27, 2010)
(internal quotation marks and citation omitted); Grant v. Barro, No. 07-194-JJB-DLD, 2007 WL
3244986, at *1 (M.D. La. Nov.1, 2007) (same). The Court's authority to award attorney's fees
and costs under § 1692k is discretionary. See Thompson v. S & S Recovery, Inc., No. 1: 12CV77LG-JMR, 2013 WL 5278022, at *3 (S.D. Miss. Sept. 18, 2013).
Plaintiff states that he brought this case in good faith based on his personal knowledge of
the calls he received and on the pattern of repeated calls over a period of months to his
telephone, which continued after he told Defendant to stop. Mot. to Dismiss at 1-2. Plaintiff
brought this lawsuit on June 3, 2016, alleging that Defendant violated§ 1692d,2 § 1692d(5),3 and
§ 1629!' ofthe FDCPA "[w]ithin the one year period preceding the filing of this Complaint, and
continuing. through August 2015." Compl. ~~ 13,22-26, ECF No.1; see also First Am. Compl.
22-26, ECF No. 13. In a written discovery response served on September 13,2016, Plaintiff
explained that he received two sets of calls from Defendant: (1) calls to collect a debt from a Jose
Rodriguez, a third party whom Plaintiff does not know; and (2) calls to collect a separate debt
from Plaintiff, asking for him by name, Salvador Rodriguez. Def.'s Exs. 5 at 50, ECF No. 19-2.
At the time, Plaintiff's debt was in the amount of $401, which he owed to AT&T for Internet and
See 15 U.S.C. § 1692d ("A debt collector may not engage in any conduct the natural
consequence of which is to harass, oppress, or abuse any person in connection with the collection of a
See 15 U.S.C. § 1692d(5) ("Without limiting the general application of the foregoing, the
following conduct is a violation of this section: ... Causing a telephone to ring or engaging any person in
telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the
See 15 U.S.C. § 1692f("A debt collector may not use unfair or unconscionable means to collect
or attempt to collect any debt. ...").
Defendant submitted these exhibits in support of its Motion for Summary Judgment.
phone services. Id at 9, 30. Prior to bringing this lawsuit, on November 19,2015, Plaintiff
called Defendant to settle, and did settle, that debt by making a payment of$300. Id at 3-6, 9,
33. Plaintiff's Complaint, reasonably read, alleges facts regarding the two sets of calls. Compl.
11-12 (calls regarding Plaintiff's own debt); id.
14-16 (calls regarding the third-party
debt). However, Count I (asserting violations of§§ 1692d and 1692d(5)) and Count II (asserting
violations of§ 1692f)-the only claims stated in the Complaint-are premised on the third-party
calls only. Id
Plaintiff's case, however, began to unravel during discovery. On August 9, 2016,
Defendant served its Initial disclosures, as part of which it produced its "account history"
regarding Plaintiff's debt; the "account history" included a log of the calls Defendant made to
Plaintiff regarding that debt. Mot. to Dismiss, Ex. B, ECF No. 23-3. The log shows that
Defendant made several calls to Plaintiff at three different phone numbers, including one for his
cell phone, between July and August 2015. ld Critically, at his deposition taken on October 12,
2016, Plaintiff testified that he received calls seeking to collect the third-party debt, but that these
calls took place earlier than alleged in his Complaint:
Q. Okay. So, you said besides the call that we went over with I.C. System, you
state that they still called you on this Jose Rodriguez debt. Correct?
A. Yes, sir.
Q. Okay. To the best of your knowledge, what period did you receive these eight
A. It was the time of-- of-- I will say around August time frame, two thousand -2015. August, November-- no, no, no. I will-- I will say August 2014 to the time
frame of February 2015.
Def.'s Exs. at 42:1-43:3. Defendant argues, therefore, that Plaintifrs claims based on these calls
are barred by statute of limitations. Mot. for Summ. J. at 5-6 (citing 15 U.S.C. § 1692k(d) ("An
action to enforce any liability created by this subchapter may be brought ... within one year
from the date on which the violation occurs.")), ECF No. 19. Plaintifrs counsel represents that
"[d]uring Plaintifr s deposition ... was the first time Plaintiff mentioned that the telephone calls
began in 2014," and believes that "Plaintiff was mistaken" as to the timing of these calls. Br. in
Supp. of Mot. to Dismiss at 2 n.1 (emphasis added). Plaintiffs own cell phone records-which
Plaintiff obtained from his carrier, T-Mobile US, Inc., on September 17,2016, in response to a
subpoena duces tecum issued by Plaintiff--reveals that in August 2015, Defendant made eleven
calls to Plaintiffs cell phone, though a few of them went unanswered. Def s Exs. at 26
(provided on a compact disc).
The Court finds that Plaintiff did not bring this lawsuit in bad faith or otherwise for a
"dishonest purpose or moral obliquity." Cf. Grant, 2007 WL 3244986, at *1. The record
evidence shows that Defendant made several calls to Plaintiff between July and August 2015,
some of which appear to be regarding Plaintiffs own debt. Plaintiff also testified that he
received calls regarding the third-party debt, and there is no evidence that Plaintiff fabricated
those calls. It appears that Plaintiff perceived that some of the calls Defendant made between
July and August 2015 were for the third party, Jose Rodriguez. See Reply in Supp. of Mot. to
Dismiss at 4 ("At one point, Plaintiff recalls the Defendant asking for Jose Rodriguez, causing
him to think some of the calls were not for him."). Accordingly, it does not appear to the Court
that Plaintiff brought this case for any reason other than satisfying a perceived grievance. As
such, Defendant's claim under§ 1692k(a)(3) is unavailing, and therefore, dismissal ofthe case
with prejudice would not cause any prejudice on this ground.
2. Defendant's Claims for Fees and Costs under 28 U.S.C. § 1927
Section 1927, on the other hand, provides, in relevant part: "Any attorney ... who so
multiplies the proceedings in any case unreasonably and vexatiously may be required by the
court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred
because of such conduct." 28 U.S.C. § 1927 (emphasis added). "[S]anctions under§ 1927 must
be predicated on actions that are both 'unreasonable' and 'vexatious."' Edwards v. Gen. Motors
Corp., 153 F.3d 242, 246 (5th Cir. 1998). This requires "evidence of bad faith, improper
motive, or reckless disregard of the duty owed to the court." Id. "Because § 1927 sanctions are
penal in nature, ... and in order not to dampen the legitimate zeal of an attorney in representing
his client,§ 1927 is strictly construed." Travelers Ins. Co. v. St. Jude Hosp., Inc., 38 F.3d 1414,
1416-17 (5th Cir. 1994).
In its brief, Defendant primarily recites case law interpreting and applying § 1927, see
Resp. to Mot. to Dismiss at 10-12, and then concludes, without analysis, that "[c]onsistent with
the arguments contained herein," this case would be ripe for appropriate relief under § 1927, id
at 12. Elsewhere in its brief, Defendant faults Plaintifr s counsel for not moving for dismissal
sooner, in particular, promptly after it served its initial disclosures that included its own call log.
Id at 2-3.
Plaintifr s counsel (on behalf of Plaintiff) responds, backed by an affidavit, that counsel
served discovery requests on Defendant, seeking to determine how Defendant's records were
created and kept, and whether there were additional sources of records that could help clear up
the inconsistency between Defendant's record and Plaintifrs testimony. Reply in Supp. of Mot.
to Dismiss at 5. Further, once counsel obtained full discovery and determined that there were no
additional records, counsel conferred with Defendant and offered to dismiss the case with
The Court finds it troubling that Plaintiff's counsel had not moved for dismissal sooner.
Defendant produced its call log on August 9, 2016, and Plaintiff's cell phone carrier produced
his phone log on September 17. However, Plaintifrs counsel did not review them until
November 18. See Mot. to Dismiss, Ex. C., ~ 3, ECF No. 23-4. Meanwhile, Plaintiff testified at
his deposition on October 12, which provided clues as to whether Plaintiff had a meritorious, and
if so, worthy, claims against Defendant. Moreover, Plaintiff's counsel discussed the strengths
and weaknesses of the case with the opposing counsel on December 6, 2016. Id
4. It seems to
the Court that Plaintiff should have moved for dismissal promptly thereafter; instead, Plaintiff
waited until after Defendant filed its Motion for Summary Judgment on February 21,2017, and
filed his Motion to Dismiss on the same day (March 7) on which he filed his response to
The Court finds that Plaintiff's counsel was, at most, sluggish in prosecuting this case.
Nevertheless, it finds that counsel's conduct did not rise to the level of deserving sanctions under
18 U.S.C. § 1927. Cf. Baulch v. Johns, 70 F.3d 813, 817 (5th Cir. 1995) ("[S]anctions may not
be imposed for mere negligence on the part of counsel."). There is no evidence, and Defendant
has not pointed to any evidence, of bad faith, improper motive, or reckless disregard of the duty
owed to the court. As such, Defendant's claim under§ 1927 is unavailing, and therefore,
dismissal of the case with prejudice would not cause any prejudice on this ground.
Accordingly, the Court concludes that Plaintiff's Motion to Dismiss should be granted in
all respects, except for his request that each side bear its own costs. See Fed. R. Civ. P. 54(d)(1)
("Unless a federal statute, these rules, or a court order provides otherwise, costs--other than
attorney's fees--should be allowed to the prevailing party."); Schwarz, 767 F.2d at 130 ("Because
a dismissal with prejudice is tantamount to a judgment on the merits, the defendant ... is clearly
the prevailing party and should ordinarily be entitled to costs."). Defendant may file a proposed
bill of costs pursuant to this District's Local Rule CV-54(a).
For the foregoing reasons, IT IS ORDERED THAT Plaintiff Salvador Rodriguez's
"Motion to Voluntarily Dismiss His Complaint Pursuant to F.R.C.P. 4l(a)(2)" (ECF No. 23) is
GRANTED IN PART and DENIED IN PART. The Motion is DENIED as to Plaintiff's
request that each side bear its costs and GRANTED as to Plaintiff's all other requests.
IT IS THEREFORE ORDERED that the above-captioned cause of action is
DISMISSED WITH PREJUDICE to Plaintiff's right to refile same or any part thereof; that
each party SHALL BEAR its own fees; and that costs SHALL BE TAXED against Plaintiff.
IT IS FURTHER ORDERED that Defendant IC System's "Motion for Summary
.Judgment" (ECF No. 19) and all other pending motions, if any, are DENIED AS MOOT.
So ORDERED and SIGNED this
/2'/i;zy ofMay 2017.
UNITED STATES DISTRICT JUDGE
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