In re Bath and Kitchen Fixtures Antitrust Lit.

• Decision Date: 28 July 2008
• Docket Number: No. 07-1520.,07-1520.
• Citation: 535 F.3d 161
• Parties: In re BATH AND KITCHEN FIXTURES ANTITRUST LITIGATION. Samuel Gordon Architects, P.C.; Watertown Plumbing and Heating Supply Company, Inc.; Republic Plumbing Supply Company, Inc.; Thames Valley Winnelson Company; East Coast Petroleum; Jermor Plumbing & Heating, Inc.; Colonial Supply Corporation; Bis Bis Imports Boston, Inc.; Schaeffer Plumbing Supply Company, Inc.; Security Supply Company; Donatucci Kitchens & Appliances; G.J. Olson Architects; Trumbull Industries, Inc.; Owner Supplied, LLC; North Shore Faucets, Inc.; The Plumbing Source, Inc.; Neenan Company, Inc., Appellants.
• Court: U.S. Court of Appeals — Third Circuit

535 F.3d 161

In re BATH AND KITCHEN FIXTURES ANTITRUST LITIGATION Samuel Gordon Architects, P.C.; Watertown Plumbing and Heating Supply Company, Inc.; Republic Plumbing Supply Company, Inc.; Thames Valley Winnelson Company; East Coast Petroleum; Jermor Plumbing & Heating, Inc.; Colonial Supply Corporation; Bis Bis Imports Boston, Inc.; Schaeffer Plumbing Supply Company, Inc.; Security Supply Company; Donatucci Kitchens & Appliances; G.J. Olson Architects; Trumbull Industries, Inc.; Owner Supplied, LLC; North Shore Faucets, Inc.; The Plumbing Source, Inc.; Neenan Company, Inc., Appellants.

No. 07-1520.

United States Court of Appeals, Third Circuit.

Argued January 28, 2008.

Filed: July 28, 2008.

Robert J. LaRocca, Esquire, (Argued), Kohn, Swift & Graf, Steven A. Asher, Esquire Weinstein, Kitchenoff & Asher Gerald J. Rodos, Esquire Barrack, Rodos & Bacine Warren Rubin, Esquire Law Offices of Bernard M. Gross Philadelphia, PA, Attorneys for Appellants.

Joseph R. Baker, Esquire, (Argued), Richard J. Favretto, Esquire, Mark W. Ryan, Esquire, Mayer Brown, Washington, D.C. Barbara W. Mather, Esquire, Pepper Hamilton Philadelphia, PA, Attorneys for Appellee, Trane Inc.

Eric J. McCarthy, Esquire, Margaret M. Zwisler, Esquire, Latham & Watkins, Washington, D.C., Attorneys for Appellee Masco Corporation.

Stephen W. Armstrong, Esquire, Peter Breslauer, Esquire, Montgomery, McCracken, Walker & Rhoads, Philadelphia, PA, Charles G. Curtis, Jr., Esquire, Heller Ehrman, Madison, WI, Robert A. Rosenfeld, Esquire, Heller Ehrman, San Francisco, CA, Attorneys for Appellee, Kohler Company.

Adam K. Levin, Esquire, Mitchell E. Zamoff, Esquire, Hogan & Hartson, Washington, D.C., Attorneys for Appellee, Eljer Plumbingware.

Before: SCIRICA, Chief Judge, RENDELL, Circuit Judge, and THOMPSON, District Judge.^*

OPINION OF THE COURT

SCIRICA, Chief Judge.

Plaintiffs appeal the District Court's order striking as untimely their notice of voluntary dismissal filed under Fed. R.Civ.P. 41(a)(1)(A)(i). We will vacate and remand with instructions to enter an order dismissing the complaint without prejudice.

I.

Purchasers of bath and kitchen plumbing fixtures filed putative class action complaints against manufacturers, alleging a price-fixing conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Seventeen cases were consolidated in the District Court. Instead of filing an answer, defendants moved to dismiss the consolidated and amended complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6).¹

On July 19, 2006, the District Court issued a memorandum opinion finding plaintiffs needed to plead more facts to meet the notice standard of Fed.R.Civ.P. 8(a)(2). The memorandum stated in relevant part:

[T]he Court will not dismiss the consolidated and amended complaint with prejudice at this time as the defendants request. At oral argument, the Court asked counsel for the plaintiffs if there were any supplemental facts that could be pled to address the defendants' arguments that the consolidated and amended complaint did not provide sufficient notice of the grounds upon which the conspiracy claim was based. Counsel implied that they might possess more information than was alleged in the pleadings, but did not supplement the complaint.... The Court, nevertheless, will allow the plaintiffs an opportunity to amend their pleadings.... An appropriate Order follows.²

The window for amendment was due to close on August 18, 2006, but on August 17, 2006, the District Court granted plaintiffs' unopposed motion for an extension through September 1, 2006. On August 30, 2006, instead of amending the complaint, plaintiffs filed a notice under Fed. R.Civ.P. 41(a)(1)(A)(i), voluntarily dismissing the action (the "Notice").³ With one exception, not applicable here, a timely notice of voluntary dismissal is without prejudice. Fed.R.Civ.P. 41(a)(1)(B). Defendants, seeking instead a dismissal with prejudice, filed a "Motion for Entry of Judgment in Accordance with the Court's Memorandum and Order of July 19, 2006," contending plaintiffs could no longer voluntarily dismiss by notice because the District Court already had granted defendants' motion to dismiss on July 19, 2006. Defendants asked the District Court to strike the Notice and enter an order of dismissal with prejudice. Plaintiffs opposed the motion. On January 24, 2007, the District Court struck the Notice as untimely filed and entered an order dismissing the complaint.⁴ This appeal followed.⁵

II.

Fed.R.Civ.P. 41(a)(1)⁶ provides:

(A) Without a Court Order. Subject to Rules 23(e), 23.1(c), 23.2, and 66 and any applicable federal statute, the plaintiff may dismiss an action without a court order by filing: (i) a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment; or (ii) a stipulation of dismissal signed by all parties who have appeared. (B) Effect. Unless the notice or stipulation states otherwise, the dismissal is without prejudice. But if the plaintiff previously dismissed any federal-or state-court action based on or including the same claim, a notice of dismissal operates as an adjudication on the merits.

Three key aspects of Rule 41(a)(1)(A)(i) control our analysis. First, a filing under the Rule is a notice, not a motion. Its effect is automatic: the defendant does not file a response, and no order of the district court is needed to end the action.⁷ Second, the notice results in a dismissal without prejudice (unless it states otherwise), as long as the plaintiff has never dismissed an action based on or including the same claim in a prior case. Third, the defendant has only two options for cutting off the plaintiff's right to end the case by notice: serving on the plaintiff an answer or a motion for summary judgment.

Here, it is undisputed that on the date plaintiffs filed the Notice: (1) plaintiffs had never before dismissed an action based on or including the same claim; and (2) defendants had not served an answer or a motion for summary judgment. Accordingly, the parties agree a timely Notice would have resulted in automatic dismissal without prejudice. The timeliness of the Notice depends on whether the "action" to which the Rule refers remained pending when the Notice was filed.

The Rule "affixes a bright-line test to limit the right of dismissal to the early stages of litigation," Manze, 817 F.2d at 1065, which "simplifies the court's task by telling it whether a suit has reached the point of no return. If the defendant has served either an answer or a summary judgment motion it has; if the defendant has served neither, it has not." Id. (quoting Winterland Concessions Co. v. Smith, 706 F.2d 793, 795 (7th Cir.1983)). Up to the "point of no return," dismissal is automatic and immediate — the right of a plaintiff is "unfettered," Carter v. United States, 547 F.2d 258, 259 (5th Cir.1977). A timely notice of voluntary dismissal invites no response from the district court and permits no interference by it. See Marex Titanic, Inc. v. Wrecked & Abandoned Vessel, 2 F.3d 544, 545, 547-48 (4th Cir. 1993) (district court may not vacate a timely filed notice of dismissal); Am. Cyanamid Co. v. McGhee, 317 F.2d 295, 297 (5th Cir.1963) ("[The notice] itself closes the file. There is nothing the defendant can do to fan the ashes of that action into life and the court has no role to play. This is a matter of right running to the plaintiff and may not be extinguished or circumscribed by adversary or court."). A proper notice deprives the district court of jurisdiction to decide the merits of the case.⁸ See Manze, 817 F.2d at 1065-66 (district court may not decide defendant's motion to dismiss after plaintiff's effective Rule 41(a)(1)(A)(i) notice); 8 James Wm. Moore et al., Moore's Federal Practice § 41.33[6][e] (3d ed. 2008) ("A defendant's motion for entry of a final judgment under Rule 54(b) should be denied if the action has already been dismissed by notice."); 9 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure: Civ.3d § 2367, at 559-61 (3d ed. 2008) ("After the dismissal, the action no longer is pending in the district court and no further proceedings in the action are proper.").

Because a motion to dismiss under Fed.R.Civ.P. 12(b)(6) is neither an answer nor a motion for summary judgment, its filing generally does not cut off a plaintiff's right to dismiss by notice. Manze, 817 F.2d at 1066. Only when a motion filed under Fed.R.Civ.P. 12(b)(6) is converted by the district court into a motion for summary judgment does it bar voluntary dismissal.⁹ Id. Here, defendants do not contend their motion was converted to a motion for summary judgment, or that it should be treated as an answer.

In Manze, we rejected the defendant's argument that its motion to dismiss under Fed.R.Civ.P. 12(b)(6) was "equivalent" to a motion for summary judgment that should have barred the plaintiff's dismissal by notice. Id. We acknowledged the defendant's preferred approach had some "theoretical appeal" because motions to dismiss may impose much labor and expense on parties and judges — sometimes they are as time-consuming as motions for summary judgment. Id. at 1065 (citing Tele-Views News Co. v. S.R.B. TV Publ'g Co., 28 F.R.D. 303, 307-08 (E.D.Pa.1961)). Moreover, Rule 41 may permit a strategic advantage for a plaintiff: if prospects for prevailing on the merits appear dim, the plaintiff can obtain a dismissal without prejudice after imposing high costs on defendants and judges. But the drafters of Rule 41 provided for only two responses — answer and motion for summary judgment — as "point[s] of no return." Id. (quoting Winterland Concessions, 706 F.2d at 795). It would be improper to graft a new category onto the literal text of the Rule. Id.

As in Manze, we apply the literal terms of Rule 41.¹⁰ Furthermore, we reject defendants' contention that the District Court's granting plaintiffs the right to amend, and an...