Yesh Music v. Lakewood Church

• Decision Date: 14 August 2013
• Docket Number: No. 12–20520.,12–20520.
• Citation: 727 F.3d 356
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: YESH MUSIC, Richard Cupolo, & John Emanuele, Plaintiffs–Appellees v. LAKEWOOD CHURCH, Joel Osteen & Victoria Osteen, Defendants–Appellants.

727 F.3d 356

YESH MUSIC, Richard Cupolo, & John Emanuele, Plaintiffs–Appellees

v.LAKEWOOD CHURCH, Joel Osteen & Victoria Osteen, Defendants–Appellants.

No. 12–20520.

United States Court of Appeals,Fifth Circuit.

Aug. 14, 2013.

Thomas J. Fitzgerald, Attorney, Garbarini FitzGerald, P.C., New York, NY, William O. Angelley, Hightower Angelley, L.L.P., Dallas, TX, for Plaintiffs–Appellees.

Henry James Fasthoff, IV, Esq., Adams & Reese, L.L.P., Houston, TX, for Defendants–Appellants.

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

Before JOLLY, DAVIS, and PRADO, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Plaintiff–Appellee filed a copyright infringement complaint against Defendant–Appellant, which it later voluntarily dismissed without prejudice. Plaintiff–Appellee subsequently filed a motion to vacate its voluntary dismissal under Rule 60(b), which the district court granted. Because we find that a voluntary dismissal without prejudice is a “final proceeding” under Rule 60(b) and the district court did not abuse its discretion in dismissing this case, we AFFIRM.

I.

Plaintiff–Appellee Yesh Music is a general partnership comprised of Appellees Richard Cupolo and John Emanuele, two musicians who write, record, and perform ambient music. Defendant–Appellant Lakewood Church (“Lakewood”), pastored by Joel and Victoria Osteen, is a Houston-based non-denominational church and one of the largest churches in the United States. In February 2010, Yesh Music granted Lakewood a limited license to use a song entitled “Signaling Through the Flames” (“the Track”) in connection with various marketing media.

When Lakewood used the Track in a televised promotional broadcast, Yesh Music asserted that the limited license did not permit use of the Track on television and that in any case, the term of the license had expired. Unable to resolve their dispute, Yesh Music filed a copyright infringement suit against Lakewood in the district court in August 2011. On February 20, 2012, Yesh Music voluntarily dismissed the suit under Federal Rule of Civil Procedure 41(a)(1)(A)(i).

The next day, Yesh Music re-filed the same suit against Lakewood in New York federal court. In response, Lakewood asked the New York court to stay the action so that Lakewood could seek reimbursement of expenses incurred in the Texas action. In a hearing on its motion for costs in Texas district court, Yesh Music indicated that it had re-filed the action in New York in part because it wished to substitute a newly-formed Yesh Music LLC as the party in interest. In response, Lakewood asserted that Yesh Music's actions were mere legal posturing and that a New York venue would be burdensome on the parties. After voicing their respective concerns, the parties stipulated on the record before the Texas court as follows:

THE COURT: Okay. Then what have we agreed to here? We've agreed that the individual claimants will remain as plaintiffs. We've agreed that the case will proceed here and not in New York.... Is everybody okay with that?

[Parties agree]

On April 4, 2012, Yesh Music voluntarily dismissed its New York suit, again under Federal Rule 41(a)(1)(A)(i).

Under Rule 41(a)(1)(B), the two successive voluntary dismissals of the lawsuit had the effect of rendering the second dismissal as one with prejudice. As a result, to reinstate its claim in the Texas district court, Yesh Music filed a motion for relief from a final judgment under Federal Rule 60(b). Specifically, the motion requested that the court vacate Yesh Music's first voluntary dismissal and reinstate Yesh Music's original Texas lawsuit. However, Lakewood contested the motion, contending that Rule 60(b) only provides for relief from final judgments, and that an initial voluntary dismissal under Rule 41(a) is not a final judgment. Accordingly, Lakewood argued, the Texas district court did not have subject matter jurisdiction and could not vacate Yesh Music's first dismissal. Regardless, Lakewood argued that even if the district court could vacate the first dismissal, it would be an abuse of discretion to do so.

In its corresponding order, the district court rejected both of Lakewood's arguments. Recognizing the broad equitable power granted to district courts under Rule 60(b), it determined that district courts retain jurisdiction to vacate voluntary dismissals without prejudice. Moreover,because the parties had agreed to dismiss the New York action and reinstate the Texas action, the court found it would be unjust to deny Yesh Music's motion. Lakewood now appeals.

II.

We review a district court's grant of a Rule 60(b) motion for abuse of discretion. Frazar v. Ladd, 457 F.3d 432, 435 (5th Cir.2006). However, we review de novo any questions of law underlying the district court's decision. Id.

III.

A.

Lakewood's primary argument on appeal is that the district court lacked jurisdiction to vacate Yesh Music's voluntary dismissal without prejudice.

In reinstating Yesh Music's claim, the district court purported to grant relief from a judgment under Rule 60(b)(6). Rule 60(b) provides, in relevant part:

On motion and just terms, the court may relieve a party ... from a final judgment, order, or proceeding for the following reasons:

....

(6) any other reason that justifies relief.

Specifically, the “final judgment, order, or proceeding” that the district court vacated in the instant case was Yesh Music's Rule 41 voluntary dismissal. Under Rule 41(a)(1)(A),

[T]he 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.

Rule 41(a)(1) “on its face grants a plaintiff an unconditional right to dismiss his complaint by notice and without order of the court at any time prior to the defendant's service of an answer or motion for summary judgment.” Pilot Freight Carriers, Inc. v. Int'l Bhd. of Teamsters, 506 F.2d 914, 915 (5th Cir.1975). Moreover, the first time a plaintiff voluntary dismisses his claim, it is without prejudice. SeeRule 41(a)(1)(B). “[T]he effect of a Rule 41(a)(1) dismissal is to put the plaintiff in a legal position as if he had never brought the first suit. The plaintiff suffers no impairment beyond his fee for filing. Stated differently, the plaintiff is free to return to the dismissing court or other courts at a later date with the same claim.” Harvey Specialty & Supply, Inc. v. Anson Flowline Equip. Inc., 434 F.3d 320, 324 (5th Cir.2005).¹ Relying on this reasoning, Lakewood argues that a Rule 41(a)(1)(a)(i) voluntary dismissal without prejudice is not a “final judgment, order, or proceeding”; and because Rule 60(b) only empowers a district court to vacate final dispositions, the district court is without jurisdiction to vacate a Rule 41(a)(1)(A)(i) voluntary dismissal without prejudice.

When interpreting Rules 41(a)(1) and 60(b), we are to “ ‘give the Federal Rules of Civil Procedure their plain meaning.’ As with a statute, our inquiry is complete if we find the text of the Rule[s] to be clear and unambiguous.” ² We need look no further than the text of Rule 60(b), Lakewood contends, because it only permits vacatur of a “final judgment, order, or proceeding;” moreover, Rule 41(a)(1)(B) deems first voluntary dismissals to be without prejudice. However, reading these rules together does not necessarily lead to Lakewood's proffered conclusion. What the rules do not indicate and what we must determine is whether a voluntary dismissal without prejudice can be a “ final judgment, order, or proceeding” within the meaning of Rule 60(b).

To provide this missing link, Lakewood relies on our decision in Harvey Specialty & Supply v. Anson, 434 F.3d 320. In that case, the court considered whether a Rule 41(a)(1) voluntary dismissal without prejudice was a “final judgment” for purposes of collateral estoppel.³Id. at 323–24. Recognizing that a plaintiff has an “absolute right” to a first voluntary dismissal and is free to return to court with the same claim, the court concluded that “[u]ltimately, a Rule 41(a)(1) dismissal is not a ‘final judgment.’ ” Id. at 324.

However, the question before the Harvey court—whether a voluntary dismissal without prejudice deserves preclusive effect—is a fundamentally different question than the question before us—whether a voluntary dismissal without prejudice is a “final judgment, order, or proceeding” subject to vacatur. Specifically, the requirement that a disposition be final does not necessarily mandate that it have been irrevocably judicially resolved. ⁴ Unlike the technical interpretation offered by Lakewood, a plain reading of “final” supports defining it as something which is practically “finished,” “closed,” or “completed.” See Gillespie v. U.S. Steel Corp., 379 U.S. 148, 152, 85 S.Ct. 308, 13 L.Ed.2d 199 (1964) (“[T]he requirement of finality is to be given a ‘practical rather than a technical construction.’ ”). Unless a plaintiff acts to re-file her claim in the future, a Rule 41(a)(1)(A) voluntary dismissal terminates, closes, and ends her cause of action, and it can rightly be considered “final.” ⁵

That determination does not end our inquiry, however, as we must also determine whether a voluntary dismissal without prejudice is a “judgment, order, or proceeding.” While judgments and orders might imply the involvement of a judicial action, a “proceeding” does not necessarily require any such action. Rather, “[t]he term ‘proceeding’ is indeterminate,” and may be used to describe the entire course of a cause of action or any act or step taken in the cause by either party. See Reid v. Angelone, 369 F.3d 363, 368 (4th Cir.2004).⁶

Although we have not previously considered the question, the weight of the caselaw from other circuits supports the conclusion that a dismissal without prejudice can be considered a final proceeding. In Williams v....