Solv-Ex Corp. v. Quillen

186 F.R.D. 313, 1999 U.S. Dist. LEXIS 7290, 1999 WL 329656
CourtDistrict Court, S.D. New York
DecidedMay 17, 1999
DocketNo. 96 Civ. 6057 JSR
StatusPublished
Cited by1 cases

This text of 186 F.R.D. 313 (Solv-Ex Corp. v. Quillen) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Solv-Ex Corp. v. Quillen, 186 F.R.D. 313, 1999 U.S. Dist. LEXIS 7290, 1999 WL 329656 (S.D.N.Y. 1999).

Opinion

MEMORANDUM ORDER

RAKOFF, District Judge.

On July 24, 1997, at the conclusion of a conference originally convened for the purpose of hearing argument on plaintiffs motion to stay this action pending plaintiffs reorganization under Canadian bankruptcy law, the parties orally consented to dismiss the ease without prejudice. See transcript, July 24, 1997 (“Tr.”). Roughly fifteen months later, plaintiff and another party filed a suit in New Mexico state court against the instant defendants and several others, asserting, inter alia, certain claims identical to those previously asserted in the instant action. See Solv-Ex Corp. v. Deutsche Bank, [315]*315No. CV 98-11647 (Second Judicial District, County of Bernalillo, New Mexico). After removing the New Mexico action to the United States District Court for the District of New Mexico, the instant defendants moved this Court on January 25, 1999 for an order enjoining plaintiff from pursuing the New Mexico action, on the ground that the filing of that suit in another forum violated a condition orally stated by plaintiffs counsel during the July 24, 1997 conference to the effect that the original action, if refiled, would “automatically come back to this Court as a related case.” Tr. at 36.

Plaintiffs response was threefold. First, it argued that the voluntary dismissal of the instant suit was by stipulation of the parties under Fed.R.Civ.P. 41(a)(1), rather than by order of the Court under Fed.R.Civ.P. 41(a)(2), and that, accordingly, this Court had no jurisdiction to enforce the terms and conditions of the dismissal, see Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Second, plaintiff argued that even if this Court had jurisdiction to grant defendants’ motion, the stated condition was intended to assure only that if the case were refiled in the Southern District of New York it would return to this judge, not that the plaintiff was forever binding itself not to refile these claims in another jurisdiction. Finally, plaintiff argued that the parties and claims in the New Mexico action were sufficiently distinct from those involved in the New York action that the New Mexico action could not, despite the overlaps, reasonably be deemed a refiling of the prior action.

Finding itself in substantial agreement with each of plaintiffs arguments, the Court telephonically advised the parties on January 29, 1999 that defendants’ motion would be denied. This Memorandum Order will formally confirm that determination and briefly state the reasons therefor.

Federal Rule of Civil Procedure 41(a) provides three mechanisms for dismissing an action at the plaintiffs instance. First, the plaintiff may file a notice of dismissal “at any time before service by the adverse party of an answer or of a motion for summary judgment.” Fed.R.Civ.P. 41(a)(1). Second, if either an answer or motion for summary judgment has already been filed, the plaintiff may secure the consent of all parties to a stipulation of dismissal. Fed.R.Civ.P. 41(a)(l)(ii). Finally, the plaintiff may obtain an order of the court dismissing the action “upon such terms and conditions as the court deems proper.” Fed.R.Civ.P. 41(a)(2).

The first two mechanisms are grouped together in subsection (1) of Rule 41(a) because either of them may be accomplished without leave of court. The difference between them is that a dismissal under subsection (l)(i) is a unilateral dismissal as of right, whereas a dismissal under subsection (l)(n) is in the nature of a contractual agreement among the parties. Either way, however, the Court before whom the dismissal occurs is ordinarily without jurisdiction to enforce any agreements by the parties regarding the terms and conditions of such dismissals. See Kokkonen, 511 U.S. at 380-382, 114 S.Ct. 1673; Hester Industries, Inc. v. Tyson Foods, Inc., 160 F.3d 911 (2d Cir. 1998).

By contrast, the third kind of dismissal, set forth separately in subsection (2) of Rule 41(a), requires a court order. Concomitantly, any terms or conditions of that order may be enforced by the court pursuant to its inherent authority “to manage its proceedings, vindicate its authority, and effectuate its decrees.” Kokkonen, 511 U.S. at 380,114 S.Ct. 1673.

Here, any fair reading of the transcript of the July 24, 1997 conference shows that the dismissal was the result of the parties’ voluntary agreement and stipulation pursuant Rule 41(a)(1) rather than by court decree pursuant to Rule 41(a)(2). Specifically, the Court, after expressing reservations about plaintiffs request for a lengthy stay, asked plaintiffs counsel “why isn’t it more appropriate for Solv-ex simply to dismiss without prejudice, which it can do on its own as to the Zweig defendants who are the main ones kicking and screaming here and can do with an agreement that ... clearly would be forthcoming with respect to the other defendants.” Tr. at 13. After counsel for the Zweig defendants indicated that for “busi[316]*316ness reasons” his clients supported a voluntary dismissal without prejudice, id. at 30, and counsel for the other defendants likewise supported such a dismissal provided plaintiff agreed to toll the statute of limitations as to those defendants’ counterclaims, id. at 32, plaintiffs counsel stated that “we agree as a plaintiff pursuant to Rule 41 to dismiss the action without prejudice.... ” Tr. at 36.

With all parties now in agreement, counsel for the Zweig defendants then sought to clarify precisely how the agreement was to be effected:

MR. SMITH [counsel for the Zweig defendants]: Your honor, I just have the most mundane question. How is this to be effectuated? Is this a stipulation of dismissal upon the record pursuant to Rule 41?
THE COURT: Yes. All right, anything else?
MR. MALONEY [plaintiffs counsel]: Thank you, your Honor.
THE COURT: Very Good. Thank you.
[Proceeding concluded]

Tr. at 37.

The informed use of the word “stipulation” in the above colloquy, and the wholly voluntary and consensual nature of the dismissal that it effected, make evident that the dismissal was pursuant to Rule 41(a)(1). It is true that, later that evening, the Court signed a written order that, after dealing with other matters in the case, recited that “pursuant to the representations of the parties set forth on the record at the hearing, see transcript, the Complaint herein, and all counterclaims thereto, are voluntarily dismissed without prejudice, upon the terms and subject to the conditions specified on the record.” See

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Cite This Page — Counsel Stack

Bluebook (online)
186 F.R.D. 313, 1999 U.S. Dist. LEXIS 7290, 1999 WL 329656, Counsel Stack Legal Research, https://law.counselstack.com/opinion/solv-ex-corp-v-quillen-nysd-1999.