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SHAW GROUP INC. v. PICERNE INVESTMENT CORPORATION

United States District Court, W.D. Pennsylvania


September 14, 2005.

THE SHAW GROUP INC. and SHAW ENVIRONMENTAL & INFRASTRUCTURE, INC., Plaintiffs,
v.
PICERNE INVESTMENT CORPORATION, Defendant.

The opinion of the court was delivered by: WILLIAM STANDISH, Senior District Judge

MEMORANDUM ORDER

Plaintiffs, The Shaw Group Inc. and Shaw Environmental & Infrastructure, Inc. (individually, "SEI"), filed this diversity action against defendant, Picerne Investment Corporation, on October 15, 2002, seeking damages for breach of contract and breach of the implied covenant of good faith and fair dealing.*fn1 SEI has filed a motion for voluntary dismissal without prejudice under Fed.R.Civ.P. 41(a) (2). In the motion, SEI offers no explanation for its request for a voluntary dismissal without prejudice, although SEI asserts that defendant will not be prejudiced by such a dismissal because (1) liability discovery is ongoing, (2) no motions for summary judgment on the issue of liability have been filed,*fn2 and (3) discovery on the issue of damages has not begun.

Defendant has filed a memorandum of law opposing SEI's motion to the extent the motion seeks a voluntary dismissal without prejudice. First, defendant objects to SEI's failure to offer any explanation of the basis for the motion. Second, defendant contends that SEI's claims in this case are meritless because SEI has never had an ownership interest in the agreement that is at issue in this case. Third, defendant notes that this litigation has been proceeding for almost three years. Fourth, defendant asserts that it has incurred approximately $200,000.00 in legal expenses to defend this action. Finally, defendant disputes SEI's assertion that defendant would not be prejudiced by a voluntary dismissal of SEI's claims without prejudice.

  With respect to the factors to be considered in ruling on a motion for voluntary dismissal without prejudice under Fed.R.Civ.P. 41(a) (2), the district court in Schandelmeier v. Otis Division of Baker-Material Handling Corp., 143 F.R.D. 102 (W.D.Pa. 1992), stated:

* * *
In ruling on a motion to dismiss without prejudice under Rule 41(a) (2), it is necessary to weigh the prejudice to the defendant, both in terms of legal prejudice and litigation expense, together with the plaintiff's diligence in bringing the motion and explanation therefore. Conafay v. Wyeth Laboratories, 793 F.2d 350 (D.C. Cir. 1986); Zagano v. Fordham University, 900 F.2d 12, 14 (2d Cir.), cert. denied, 498 U.S. 899, 111 S.Ct. 255, 112 L.Ed.2d 213 (1990). Another factor to consider is the pendency of a dispositive motion by the non-moving party. See, e.g., Chance v. Farm Bureau Mutual Insurance Co., 756 F. Supp. 1440 (D.Kan. 1991).
Beyond general agreement on the factors to be considered, the Courts of Appeal have diverged in their approach to Rule 41(a) (2) dismissals, the Ninth Circuit, Hamilton v. Firestone Tire and Rubber Co., Inc., 679 F.2d 143 (9th Cir. 1982); Morgan v. Walter, 758 F.Supp. 597 (D. Idaho1991), and Fifth Circuit, (footnote omitted) Manshack v. Southwestern Electric Power Co., 915 F.2d 172 (5th Cir. 1990), taking a fairly "pro-dismissal without prejudice" stance, while the Second Circuit, Zagano, supra, 900 F.2d at 14-15, and Eleventh Circuit, Fisher v. Puerto Rico Marine Management, Inc., 940 F.2d 1502 (11th Cir. 1991), take a more restrictive view.
The Third Circuit lines up with the more restrictive circuits. (Footnote omitted). Ferguson v. Eakle, 492 F.2d 26, 28-29 (3d Cir. 1974); see also Thomas v. Amerada Hess Corp., supra.
Turning to the specifics of this case, plaintiffs move to dismiss their complaint after it has been pending for twenty months and has been scheduled for trial. Plaintiffs do not explain why they seek dismissal without prejudice, nor do they provide any opposition to defendants' dispositive motion which undoubtedly has been the product of some effort and expense on the part of defendants. Under those circumstances, dismissal must be with prejudice.
* * *
143 F.R.D. at 102-03.

  After consideration, the Court agrees with defendant that SEI's motion for a voluntary dismissal without prejudice should be denied because (a) like the plaintiffs in Schandelmeier, supra, SEI offers no explanation for the requested dismissal without prejudice; (b) SEI did not act diligently in seeking the requested dismissal under Fed.R.Civ.P. 41 (a) (2); (c) the motion for dismissal without prejudice was filed by SEI shortly before the deadline for the filing of defendant's motion for summary judgment on the issue of liability and the exhibits attached to defendant's memorandum of law in opposition to SEI's motion support defendant's contention that SEI does not have any interest in the agreement that is the subject of this litigation; and (d) defendant has incurred substantial legal expenses to defend the claims of SEI for the past three years.*fn3 Under the circumstances, SEI's motion for a voluntary dismissal without prejudice under Fed.R.Civ.P. 41(a) (2) will be denied.

  AND NOW, this 14th day of September, 2005, IT IS SO ORDERED.

20050914

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