Hamilton v. Shearson-Lehman American Exp., Inc., SHEARSON-LEHMAN

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: Before SNEED and SCHROEDER; MARQUEZ
• Citation: 813 F.2d 1532
• Parties: Timothy S. HAMILTON, Plaintiff-Appellant, v.AMERICAN EXPRESS, INC., a Delaware Corporation, Van Ridgeway, Charles Hilton, and Robert Chandler, Defendants-Appellees.
• Docket Number: SHEARSON-LEHMAN,No. 85-6511,85-6511
• Decision Date: 07 April 1987

Page 1532

813 F.2d 1532 7 Fed.R.Serv.3d 631 Timothy S. HAMILTON, Plaintiff-Appellant,
v.
SHEARSON-LEHMAN AMERICAN EXPRESS, INC., a Delaware
Corporation, Van Ridgeway, Charles Hilton, and
Robert Chandler, Defendants-Appellees. No. 85-6511. United States Court of Appeals,
Ninth Circuit. Argued and Submitted Dec. 4, 1986.
Decided April 7, 1987.

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Nicholas F. Coscia, Rancho Santa Fe, Cal., for plaintiff-appellant.

Ben Suter, Long Beach, Cal., for defendants-appellees.

Appeal from the United States District Court for the Southern District of California.

Before SNEED and SCHROEDER, Circuit Judges, and MARQUEZ, ^* District Judge.

MARQUEZ, District Judge:

Hamilton appeals the District Court's order which denied him the right to voluntarily dismiss his complaint under Rule 41(a)(1)(i), Fed.R.Civ.P. Hamilton contends the rule confers an absolute right upon a plaintiff to dismiss an action by filing a notice of dismissal prior to an answer or a motion for summary judgment. We agree and reverse the order of the District Court.

A. Procedural History

Hamilton filed his complaint in the District Court of the Southern District of California on August 23, 1984. On September 18, 1984, the parties entered into a stipulation stating Defendants were not required to file an answer if a pending Motion to Compel Arbitration was granted. On October 29, 1984, after a hearing, the District Court granted the Motion to Compel Arbitration. On November 29, 1984, a formal order was entered compelling arbitration and staying the proceedings.

On December 10, 1984, Hamilton filed a reparations complaint with the Commodities Futures Trading Commission (CFTC). The CFTC complaint was dismissed on June 15, 1985, as a parallel federal proceeding.

Hamilton next tried to have the proceedings in District Court dismissed so he could refile his reparations complaint with the CFTC. First, Hamilton attempted to file a Motion for Voluntary Dismissal under Rule 41(a)(2) but the Clerk refused to file the motion. ¹ Although the docket indicates the motion was not accepted for filing, Defendants filed an opposition to the motion as

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well as a Motion to Strike on August 16, 1985. On September 4, 1985, Plaintiff filed a Notice of Dismissal under Rule 41(a)(1)(i) in a second attempt to dismiss his complaint.

A hearing was held on the Motion for Voluntary Dismissal on October 7, 1985. The motion was denied and a formal order was entered on November 1, 1985. The District Court's Order denied both the Motion to Dismiss under Rule 41(a)(2) and the Notice of Dismissal under Rule 41(a)(1). Hamilton filed a timely notice of appeal.

B. Law

Our resolution of the effect of the Notice of Dismissal pursuant to Rule 41(a)(1)(i) disposes of this appeal and we do not address the Motion to Dismiss under Rule 41(a)(2). Insofar as material herein, Rule 41(a)(1)(i) provides:

"... an action may be dismissed by the plaintiff without order of the court (i) by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, whichever first occurs, ...

The language of this rule leaves little room for interpretation. Until an adverse party files an answer or a motion for summary judgment, the plaintiff can have the action dismissed merely by filing a notice of dismissal with the clerk. Rule 41(a)(1)(i) does not require leave of court to dismiss the action. The purpose of the rule is "to facilitate the voluntary dismissal of an action, but safeguard abuse by limiting its application to an early stage of the proceedings." 5 Moore's Federal Practice p 41.02 at 41-13.

Courts applying Rule 41(a) have given it a literal interpretation. ² The only exception to this rule occurs where the merits have been raised or the suit has reached an advanced stage, as was the case in Harvey Aluminum, Inc. v. American Cyanamid, 203 F.2d 105 (2nd Cir.), cert. denied, 345 U.S. 964, 73 S.Ct. 949, 97 L.Ed. 1383 (1953).

In Harvey, supra, the plaintiffs sought and obtained an ex parte temporary restraining order pending a hearing on their motion for a preliminary injunction. An evidentiary hearing was held over the course of several days and a lengthy record consisting of some 420 pages was generated. The District Court dissolved the temporary restraining order, finding the plaintiffs' chance of success on the merits "remote, if not completely nil." The plaintiffs filed a notice of dismissal pursuant to Rule 41(a)(1)(i). The defendants filed a motion to vacate...