Phillips v. Illinois Cent. Gulf R.R., 88-3262
| Citation | 874 F.2d 984 |
| Decision Date | 07 June 1989 |
| Docket Number | No. 88-3262,88-3262 |
| Parties | Bill PHILLIPS, Plaintiff-Appellant, v. ILLINOIS CENTRAL GULF RAILROAD, Defendant-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Walter J. Suthon, III, Joe M. Inabnett, New Orleans, La., for plaintiff-appellant.
David S. Kelly, Bryan C. Misshore, New Orleans, La., for defendant-appellee.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before GEE, THORNBERRY and POLITZ, Circuit Judges.
Facts and Proceedings Below
The plaintiff brought this personal injury action against Illinois Central Gulf Railroad (ICG) more than one year, but less than two, after the accident that forms its basis. The plaintiff is a Texas resident; ICG is a Delaware corporation whose "presence" in Texas, Louisiana and Mississippi varies and is not clear in the record. The accident occurred in Louisiana. The statute of limitations for this case is two years in Texas, one year in Louisiana and six years in Mississippi.
Initially, the plaintiff filed suit in Texas state court. ICG removed the case to the Western District of Texas and filed a motion to dismiss for lack of personal jurisdiction and a motion to transfer. During the three month pendency of ICG's motion, the plaintiff conducted no discovery on any issue of personal jurisdiction, did not request dismissal without prejudice under Rule 41(a)(1) or (2), and made no request that, if ordered, the transfer be to any specific state--such as Mississippi. Moreover, the plaintiff declined or neglected to inform the court that his case was time-barred in Louisiana. At the hearing on ICG's motion, Judge Bunton held that the plaintiff failed to establish that ICG had sufficient contacts with Texas to warrant his exercising personal jurisdiction over ICG and transferred the case to the Eastern District of Louisiana, giving no indication whether the transfer was based on 28 U.S.C. Sec. 1404(a) or on Sec. 1406(a). 1
When the case arrived in Louisiana, ICG filed a motion for summary judgment on the ground that the action was time-barred under Louisiana's one-year prescriptive period. In response, the plaintiff filed a motion to amend the transfer order to send the case to Mississippi, a motion to retransfer the case to the Western District of Texas, and a motion to dismiss without prejudice under Rule 41(a)(2). The court granted ICG's motion for summary judgment and, given the "procedural posture" of the case, denied the plaintiff's motion to dismiss without prejudice, as well as his other motions. The court dismissed the case with prejudice.
Analysis
The plaintiff contends that the district court erred in denying his motion to dismiss without prejudice. Because the defendant in this action had filed an answer and a motion for summary judgment, the plaintiff's motion to dismiss is governed by Fed.R.Civ.Proc. 41(a)(2). This rule states, in relevant part,
... An action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper.... Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice.
Usually a court will grant a Rule 41(a)(2) motion providing for a dismissal without prejudice unless the defendant will suffer clear legal prejudice, other than the prospect of a subsequent suit on the same facts. Durham v. Florida East Coast Rwy. Co., 385 F.2d 366, 368 (5th Cir.1967). Dismissal without prejudice under this rule is, however, within the sound discretion of the trial court and may be reviewed only for an abuse of that discretion. McCants v. Ford Motor Co., Inc., 781 F.2d 855, 857 (11th Cir.1986) (citations omitted). We must, therefore, determine whether the district court abused its discretion in denying the plaintiff's motion.
Before us, the plaintiff maintains that, in denying his motion to dismiss without prejudice, the district court erroneously concluded that the pendency of the defendant's motion for summary judgment advancing a limitations defense automatically precluded granting that motion. In his view, the pendency of such a summary judgment motion should be irrelevant in a transferred case and should be only one of many factors to be considered even where the plaintiff has selected the forum. He further contends that a dismissal without prejudice while a motion for summary judgment on a statute of limitations defense is pending should be denied only if the plaintiff has been guilty of bad faith or abusive practices. That being so, because he did not select the forum or engage in abusive practices, in his view the district court abused its discretion in denying his motion.
In support of his contentions the plaintiff cites McCants v. Ford Motor Co., Inc., 781 F.2d 855 (11th Cir.1986). In McCants the plaintiff brought a wrongful death action in Alabama based on an accident that had occurred in Mississippi. As the case progressed, the defendant amended its answer to assert that the action was barred by the applicable Alabama statute of limitations. In consequence of the amendment, the plaintiff sought dismissal without prejudice under Rule 41(a)(2). The defendant objected to the dismissal, arguing that the loss of a statute of limitations defense constituted plain legal prejudice which prevented dismissal.
In upholding the district court's order granting the plaintiff's motion to dismiss, the Eleventh Circuit stated:
... [T]he likelihood that a dismissal without prejudice will deny the defendant a statute of limitations defense does not constitute plain legal prejudice and hence should not alone preclude such a dismissal. Id. at 858.
The McCants' court went on to state:
... We find no evidence in the record to suggest that appellee or counsel acted in bad faith in filing this action in Alabama.... Under the circumstances, we cannot find appellant to have suffered any plain legal prejudice other than the prospect of a second lawsuit on the same set of facts.
The plaintiff also cites Bolten v. General Motors Corporation, 180 F.2d 379 (7th Cir.1950); Klar v. Firestone Tire & Rubber Co., 14 F.R.D. 176 (S.D. N.Y.1953), and Germain v. Semco Service Machine Co., Inc., 79 F.R.D. 85 (E.D. N.Y.1978). In each of these cases the courts upheld grants of dismissal without prejudice despite the fact that the dismissal deprived the defendant of a statute of limitations defense.
In contrast, the defendant contends that the loss of a statute of limitations defense always constitutes the type of clear legal prejudice that mandates the denial of a Rule 41(a)(2) motion. In support of this contention the defendant cites Placid Oil Co. v. Ashland Oil, Inc., 792 F.2d 1127 (Em.App.1986); Love v. Silas Mason, 66 F.Supp. 753 (W.D. La.1946); and Bamdad Mechanic Co. Ltd. v. United Technologies Corp., 109 F.R.D. 128 (D.Del.1985). In each of these cases the plaintiff moved for dismissal under Rule 41(a)(2) after the defendant had raised a statute of limitations defense. In each case the court held that loss of the statute of limitations defense constituted the type of plain legal error which precluded granting dismissal under Rule 41(a)(2).
In reaching this conclusion the court in Placid Oil noted:
When considering a dismissal without prejudice, the court should keep in mind the interests of the defendant, for it is his position which should be protected. 9 Wright & Miller, Federal Practice & Procedure: Civil, Secs. 2362, 2364 at 149, 165 (1971), citing LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604 (5th Cir.1976).
The court stated that a dismissal without prejudice should not be granted
... when the plaintiff's purpose is so to maneuver the litigation that the defendant will lose his existing advantage.
The court then held that precisely that situation exists where the plaintiff's motive in seeking a dismissal without prejudice is to avoid the defendant's statute of limitations defense.
The plaintiff contends that the decisions in Placid Oil and Bamdad Mechanic were based on the court's finding that the plaintiffs in those actions engaged in "egregious forum shopping and other abusive conduct...." The plaintiff further maintains that, absent such conduct, denial of a motion to dismiss without prejudice is an abuse of discretion. We do not agree. The decisions in Placid Oil and Bamdad Mechanic were based on the court's determination that loss of a statute of limitations defense would constitute substantial legal prejudice to the defendants in those cases. These cases, therefore, conflict directly with those cited by the plaintiff.
We have not yet addressed the issue of whether loss of a statute of limitations defense constitutes the type of clear legal prejudice that precludes granting a motion to dismiss without prejudice. After reviewing the decisions of other courts on this issue we are persuaded, however, that those cases denying the motion to dismiss are better reasoned. We agree that the mere prospect of a second lawsuit on the same facts is not sufficiently prejudicial to the defendant to justify denial of a Rule 41(a)(2) motion to dismiss. See e.g., Durham v. Florida East Coast Rwy. Co., 385 F.2d 366, 368 (5th Cir.1967). In this case, however, the facts in the second lawsuit would differ in that the defendant would be stripped of an absolute defense to the suit--the difference between winning the case without a trial and abiding the unknown outcome of such a proceeding. If this does not constitute clear legal prejudice to the defendant, it is hard to envision what would.
The plaintiff argues that this holding should not be applicable to cases transferred pursuant to 28 U.S.C. Sec. 1406(a) or Sec. 1404(a). In support of this argument the plaintiff cites Goldlawr, Inc. v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962). In Goldlawr the Court held that...
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