Lasswell Foundation for Learning and Laughter, Inc. v. Timothy Schwartz

• Court: Court of Appeals for the Eleventh Circuit
• Decided: October 29, 2020
• Docket: 20-10263
• Status: Unpublished

Opinion

USCA11 Case: 20-10263 Date Filed: 10/29/2020 Page: 1 of 6

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 20-10263 Non-Argument Calendar ________________________

D.C. Docket No. 8:17-cv-00046-JDW-CPT

LASSWELL FOUNDATION FOR LEARNING AND LAUGHTER, INC., FRED LASSWELL, INC., RED RYDER ENTERPRISES, INC., GOLDBOOK LTD,

Plaintiffs-Appellants,

versus

TIMOTHY SCHWARTZ, DESIGN TANK, INC., DOES 1-10, inclusive,

Defendants-Appellees. USCA11 Case: 20-10263 Date Filed: 10/29/2020 Page: 2 of 6

________________________

Appeal from the United States District Court for the Middle District of Florida ________________________

(October 29, 2020)

Before JILL PRYOR, LAGOA, and EDMONDSON, Circuit Judges.

PER CURIAM:

The Lasswell Foundation for Learning and Laughter, Inc., Fred Lasswell,

Inc., Red Ryder Enterprises, Inc., and Goldbook Ltd. (“Plaintiffs”) appeal the

district court’s sua sponte dismissal “with prejudice” of this civil action for want of

prosecution. Reversible error has been shown; we vacate the dismissal and remand

for further proceedings.

Plaintiffs filed this civil action against Defendant Timothy Schwartz in

February 2016, asserting claims for cybersquatting, trademark infringement,

copyright infringement, common law unfair competition, conversion, breach of

contract, and fraud.

During the course of the litigation, Plaintiffs experienced several changes in

lawyers, at least some of which resulted in delays and in extensions of time being 2 USCA11 Case: 20-10263 Date Filed: 10/29/2020 Page: 3 of 6

granted by the district court. Plaintiffs’ last attorneys-of-record were granted leave

to withdraw in early December 2019.

On 9 December 2019 -- almost four years after the commencement of the

civil action and one month before a jury trial was scheduled to begin -- the district

court entered sua sponte an order to show cause why the case should not be

dismissed for failure to prosecute.1 The district court summarized the procedural

history of the case and said, “[i]t is apparent that Plaintiffs are either unwilling,

reluctant to, or unable to prosecute this action diligently.” The final paragraph of

the district court’s show-cause order read this way:

Accordingly, Plaintiffs are ORDERED TO SHOW CAUSE why this case should not be dismissed for failure to prosecute. Plaintiffs’ response is due on or before December 18, 2019. No extensions will be granted. Failure to respond will result in the case being dismissed without prejudice without further notice. (emphasis added)

Plaintiffs -- who were then unrepresented corporate entities 2 -- filed no

response. Nor did Plaintiffs do or say anything else in the district court between

the time of the show-cause order and the pertinent dismissal order: nine days.

On 19 December, the district court entered an order dismissing the case

without prejudice. The district court said, “Plaintiffs have not responded to the

1 Defendant Schwartz filed no motion for involuntary dismissal. 2 As corporate entities, Plaintiffs were barred from appearing pro se. See Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir. 1985). 3 USCA11 Case: 20-10263 Date Filed: 10/29/2020 Page: 4 of 6

order and accordingly, for the reasons set forth in the show-cause order, this case is

DISMISSED without prejudice.”

Later that same day, however, the district court entered an amended order of

dismissal. The district court -- pointing to Fed. R. Civ. P. 41(b) and the district

court’s local rules -- dismissed sua sponte the case with prejudice for failure to

prosecute. The district court found Plaintiffs had engaged in a “clear pattern of

willful delay” based on the changes in lawyers, the resulting delays, and Plaintiffs’

failures to retain new local counsel and to respond timely to the show-cause order.

The district court also said -- without specific explanation -- that no lesser sanction

would better serve the interests of justice.

We review dismissal for failure to prosecute under an abuse-of-discretion

standard. Gratton v. Great Am. Communs., 178 F.3d 1373, 1374 (11th Cir. 1999).

The district court has authority -- under both its inherent powers and under

Fed. R. Civ. P. 41(b) -- to dismiss sua sponte a civil action for failure to prosecute.

See Fed. R. Civ. P. 41(b); Betty K Agencies, Ltd. v. M/V Monada, 432 F.3d 1333,

1337 (11th Cir. 2005). Dismissal with prejudice is considered “an extreme

sanction” that is appropriate only when the district court finds (1) “a party

engage[d] in a clear pattern of delay or willful contempt” and (2) “that lesser

sanctions would not suffice.” Betty K Agencies, Ltd., 432 F.3d at 1337-38.

4 USCA11 Case: 20-10263 Date Filed: 10/29/2020 Page: 5 of 6

Given the record in this case and our precedent in this area, we conclude that

the district court abused its discretion in dismissing the case with prejudice. First

and foremost, we cannot approve of the district court’s decision to dismiss the case

with prejudice despite the district court’s express representation to Plaintiffs that a

dismissal for inaction, in the face of the show-cause order, would be a dismissal

without prejudice.

On top of that lulling problem, we conclude that the district court made

insufficient findings to support a dismissal with prejudice. Although the district

court cited examples of conduct that it found constituted a “clear pattern of willful

delay,” the district court seems to have passed over the idea that a plaintiff’s mere

inability to prosecute a case might not be considered willful and by itself not

warrant the extreme sanction of dismissal with prejudice. We observe the district

court, in its show-cause order, had recently left open (when the history of the case

was already known) the possibility that Plaintiffs were “unable to prosecute” the

case.

The district court also offered no explanation for its conclusion that no lesser

sanction would suffice. Particularly in the light of the district court’s earlier

warning that, following the show-cause order, dismissal would be without

prejudice and also that the district court actually first did dismiss the case without

5 USCA11 Case: 20-10263 Date Filed: 10/29/2020 Page: 6 of 6

prejudice, it seems the district court had at one time in fact viewed a lesser sanction

to be appropriate and sufficient. The reason underlying the district court’s change

of mind leading to a significantly harsher sanction is not obvious from the record.

And, for now at least, we cannot approve it.

VACATED AND REMANDED.