NOT RECOMMENDED FOR PUBLICATION
File Name: 17a0499n.06
No. 16-3628
FILED
Aug 28, 2017
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
MALIBU MEDIA, LLC, )
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE SOUTHERN
DAVID RICUPERO, ) DISTRICT OF OHIO
)
Defendant-Appellant. ) OPINION
)
)
BEFORE: SUHRHEINRICH, BATCHELDER, and STRANCH, Circuit Judges
JANE B. STRANCH, Circuit Judge. Malibu Media filed suit against David Ricupero
for copyright infringement, alleging that he illegally downloaded various films owned by Malibu
Media. Ricupero brought a counterclaim against Malibu Media, seeking a declaratory judgment
that he was not a copyright infringer, which the district court dismissed as redundant to the
plaintiff’s claims. Malibu Media filed a motion to voluntarily dismiss the action pursuant to
Federal Rule of Civil Procedure 41(a)(2), which the district court granted. Ricupero appeals the
district court’s dismissal of Malibu Media’s claims against him and the dismissal of his
counterclaim. For the following reasons, we AFFIRM.
I. BACKGROUND
Malibu Media, LLC, produces pornographic films that it offers on the web via paid
subscription. Despite this fee structure, Malibu Media states that on a monthly basis
No. 16-3628, Malibu Media, LLC v. Ricupero
approximately 80,000 U.S. residents use BitTorrent, a peer-to-peer file transfer protocol used for
sharing large amounts of data over the Internet, to download Malibu Media’s movies. This has
spurred Malibu Media to file hundreds of copyright infringement claims in federal courts across
the country, including more than 200 cases in the U.S. District Court for the Southern District of
Ohio. Ricupero argues that these cases are all similarly pled and follow an inappropriate
litigation model.
Here Malibu Media brought suit against a John Doe defendant identified by his Internet
Protocol (IP) address, alleging that he had used BitTorrent technology to download, copy, and
distribute 26 movies copyrighted by Malibu Media. Malibu Media served a third-party subpoena
on the Internet Service Provider connected to the IP address to obtain the identity of the
subscriber, and subsequently filed an amended complaint naming David Ricupero as the
defendant. Ricupero filed an answer, as well as counterclaims for a declaratory judgment that he
was not a copyright infringer and for abuse of process. The parties consented to the jurisdiction
of a U.S. Magistrate Judge. The magistrate judge dismissed Ricupero’s counterclaims,
determining that the declaratory judgment claim was redundant to Malibu’s claim, and that the
abuse of process claim failed to state a claim upon which relief could be granted.
Ricupero filed a motion for reconsideration of the dismissal of the counterclaims, which
kicked off what the district court characterized as a “firestorm of motions filed over a three-and-
one-half month period.” The “tone and volume of the parties’ briefing” caused the district court
to describe the motions as “fall[ing] into two primary categories – motions raising what can be
characterized as more substantive issues1 and motions which exemplify a deterioration of civility
in the litigation process.”
1
One such substantive dispute concerned Ricupero’s hard drive. Ricupero states that his hard drive was
“forensically imaged, preserved, and examined” by an expert who determined that the computer was not used to
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Many of Ricupero’s arguments stem from his view of Malibu’s litigation model, which
he alleges is abusive and coercive to defendants. Cf. Malibu Media, LLC v. Doe, No. 1:14-cv-
493, 2016 WL 1242687, at *4 (S.D. Ohio Mar. 30, 2016) (“[Malibu Media’s] countless
voluntary dismissals filed in numerous other suits in this District and others . . . is more
concerning. . . . Throughout these cases, Malibu Media has not shown any indication that it
intends to prosecute the merits of its copyright infringement claims.”). Ricupero describes
Malibu Media as seeking out defendants based on an IP address, conducting early discovery on
the subscriber’s finances, and delaying service until the subscriber is notified of the suit and
reaches out to Malibu. If Malibu and the subscriber fail to reach a settlement, Ricupero states,
only then does Malibu name the subscriber, and then further delays discovery. According to
Ricupero, if a settlement is not reached by the close of discovery, Malibu will voluntarily dismiss
the complaint, often blaming the defendant’s conduct. Malibu takes issue with this
characterization of its conduct, and emphasizes its right to protect its copyrighted films from
infringement.
In its order denying Ricupero’s motion for reconsideration, the district court remarked on
the increasing friction between the parties and concluded that “both parties claim patterns of
delay and stonewalling.” Some improvement followed and the court set a discovery deadline of
January 28, 2016, with dispositive motions due by February 29. On February 23, Malibu filed a
motion to voluntarily dismiss the case against Ricupero. On February 29, Ricupero filed a
infringe any of Malibu Media’s films. Ricupero claims that he repeatedly offered the imaged drive but Malibu
refused to take it. Malibu claims that Ricupero continually failed to produce his hard drives for imaging, requiring it
to move for extensions of discovery. Malibu charges that its expert ultimately received an image of the hard drive,
and later a declaration from Ricupero’s expert, which revealed that the two experts examined different images of the
hard drive. Malibu demanded a copy of the image that Ricupero’s expert examined and obtained that hard drive
image about a month later.
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motion for default judgment and a summary judgment motion on his counterclaims. He later
filed a response in opposition to Malibu’s motion to dismiss.
The court granted Malibu Media’s motion, determining that Ricupero would not suffer
plain legal prejudice due to the dismissal without prejudice and declined to condition the
dismissal on Malibu’s payment of Ricupero’s attorney’s fees and costs. Ricupero now appeals
both the district court’s dismissal of his counterclaim for a declaratory judgment that he did not
infringe Malibu Media’s copyright and the voluntary dismissal granted Malibu pursuant to Rule
41(a)(2).
II. ANALYSIS
A. Dismissal of Ricupero’s Counterclaim
The district court dismissed Ricupero’s counterclaim, finding that it was redundant to
Malibu Media’s copyright infringement suit and thus failed to state a claim upon which relief
could be granted under Rule 12(b)(6). See also Fed. R. Civ. P. 12(f) (“The court may strike from
a pleading . . . any redundant . . . matter.”) We review dismissal under Rule 12(b)(6) de novo.
Agema v. City of Allegan, 826 F.3d 326, 331 (6th Cir. 2016).
Ricupero argues that the district court’s dismissal was a decision whether or not to
exercise jurisdiction over a declaratory judgment action under the Declaratory Judgment Act, 28
U.S.C. § 2201(a) and is subject to a different standard of review. “We review a district court’s
decision to exercise jurisdiction over a declaratory judgment for abuse of discretion.” Scottsdale
Ins. Co. v. Flowers, 513 F.3d 546, 554 (6th Cir. 2008) (citations omitted). “Federal courts, and
federal district courts in particular, have ‘unique and substantial discretion in deciding whether to
declare the rights of litigants.’” W. World Ins. Co. v. Hoey, 773 F.3d 755, 758 (6th Cir. 2014)
(quoting Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995)). Courts evaluating jurisdiction
over a declaratory judgment do so using the five factors articulated in Grand Trunk W. R.R. Co.
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v. Consol. Rail Corp., 746 F.2d 323, 326 (6th Cir. 1984). The Grand Trunk factors examine
whether the declaratory judgment (1) would settle the controversy; (2) would serve a useful
purpose in clarifying the legal relations at issue; (3) is being used merely for “procedural
fencing” or to “provide an arena for a race for res judicata”; (4) would increase friction between
state and federal courts and improperly encroach on state jurisdiction; and (5) whether there is a
more effective, alternative remedy. Id. The district court did not discuss the Grand Trunk
factors in dismissing the counterclaim for a declaratory judgment, which Ricupero argues
constitutes reversible error.
Grand Trunk directs courts to evaluate “efficiency, fairness, and federalism,” as they
depend on the facts of a particular case, in determining whether to exercise jurisdiction over a
declaratory judgment claim. W. World, 773 F.3d at 759. Our “essential question is always
whether a district court has taken a good look at the issue and engaged in a reasoned analysis of
whether issuing a declaration would be useful and fair.” Id. A district court will typically
examine the general principles—whether a declaratory judgment will “serve a useful purpose”
and if it will “terminate and afford relief from the uncertainty, insecurity, and controversy giving
rise to the proceeding.” Grand Trunk, 746 F.2d at 326. Courts have evaluated whether such a
“useful purpose” exists by looking specifically at the issue of redundancy and may appropriately
do so without relying on the Grand Trunk factors. See, e.g., Fed. Deposit Ins. Corp. v. Project
Dev. Corp., 819 F.2d 289 (6th Cir. May 27, 1987) (unpublished table decision) (finding that a
magistrate judge appropriately denied a motion to add a counterclaim because “when a
counterclaim merely restates the issue as a ‘mirror image’ to the complaint, the counterclaim
serves no purpose”); Orleans Int’l, Inc. v. Mistica Foods, L.L.C., No. 15-13525, 2016 WL
3878256, at *2-3 (E.D. Mich. Jul. 18, 2016) (dismissing declaratory judgment counterclaim
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under Rule 12(b)(6) because it was redundant to the plaintiff’s claims and therefore did not serve
a useful purpose); Pettrey v. Enter. Title Agency, Inc., No. 1:05-cv-1504, 2006 WL 3342633, at
*3 (N.D. Ohio Nov. 17, 2006) (determining that there was “no useful purpose” for retaining the
defendants’ declaratory judgment counterclaims when the factual and legal issues were identical
and the counterclaims would be rendered moot by adjudication of the plaintiff’s claims).
The district court dismissed Ricupero’s counterclaim under Rule 12(b)(6) because it was
redundant to Malibu Media’s copyright infringement suit. Since Ricupero failed to state a claim
upon which relief could be granted, the district court had no need to assess its discretion to
exercise jurisdiction over the declaratory judgment action under the Grand Trunk factors. Thus,
we review de novo the dismissal of Ricupero’s counterclaim.
Ricupero sought a declaratory judgment that he did not infringe on Malibu Media’s
copyright. The court found this counterclaim to be a “mirror image” of Malibu’s complaint, and
determined that the issues in the counterclaim would necessarily be resolved with the
adjudication of the infringement claim. Ricupero argues that redundancy is not the appropriate
issue at the pleading stage as it is distinct from the question of whether the counterclaim “serves
any useful purpose.” He posits that the court should have first determined whether Malibu
Media’s claims would have negated the need for declaratory relief and then avers that such a
determination is impossible at the pleading stage. Ricupero argues that any suit he files against
Malibu on the facts in the counterclaim would be duplicative and the district court should have
resolved the entire matter instead of forcing him to sue again.2 Malibu takes particular issue with
this argument, countering that Ricupero has not cited any authority for the notion that his
2
Ricupero also argues that the court improperly dismissed his counterclaim because it was compulsory. See Fed. R.
Civ. P. 13(a). But the compulsory nature of a counterclaim is irrelevant if it fails to survive Rule 12(b)(6), and thus
Ricupero’s argument has no bearing on the court’s dismissal.
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counterclaim could stand without Malibu’s complaint, and that dismissal of Malibu’s complaint
would moot his claim.
Ricupero’s counterclaim allegations track those made in Malibu Media’s complaint and
seek only a declaratory judgment that he did not infringe its copyrighted works. The heart of
Ricupero’s counterclaim is whether he infringed the copyrighted works; resolution of Malibu
Media’s copyright infringement claim would dispose of all factual or legal issues necessary for
deciding that counterclaim.
Indeed, Ricupero is not clear what “useful purpose” his counterclaim would serve,
arguing only that it would cause no prejudice to Malibu Media and may “deter against future
filing of copyright claims to obtain nuisance-value settlements.” A counterclaim would also
provide Ricupero an additional avenue for securing an award of attorney’s fees, especially where
Malibu Media later moved to voluntarily dismiss its complaint without prejudice under Rule
41(a)(2). See Malibu Media, LLC v. Doe, No. C 15-04441 WHA, 2016 WL 3383758, at *2-3
(N.D. Cal. June 20, 2016). But the fee-shifting provision of the Copyright Act, 17 U.S.C. § 505,
awards reasonable attorney’s fees to the prevailing party in a copyright infringement action
without regard to whether the defendant has asserted a counterclaim. See Mawdsley v.
Kirkland’s, Inc., No. 3-13-0462, 2013 WL 5754947, at *2 (M.D. Tenn. Oct. 23, 2013) (“If
Plaintiff’s claim for infringement is denied, Defendant could be the prevailing party without
having asserted a counterclaim.”). Thus we affirm the district court’s dismissal of the
counterclaim as redundant.
B. Voluntary Dismissal of Malibu Media’s Complaint
Federal Rule of Civil Procedure 41(a)(2), for voluntary dismissal by court order, provides
that “an action may be dismissed at the plaintiff’s request only by court order, on terms that the
court considers proper. . . . Unless the order states otherwise, a dismissal under this paragraph (2)
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is without prejudice.” We review dismissal under Rule 41(a)(2) for an abuse of discretion.
Grover by Grover v. Eli Lilly & Co., 33 F.3d 716, 718 (6th Cir. 1994). “Generally, an abuse of
discretion is found only where the defendant would suffer ‘plain legal prejudice’ as a result of a
dismissal without prejudice, as opposed to facing the mere prospect of a second lawsuit.” Id.
(citations omitted). To examine prejudice, we consider “the defendant’s effort and expense of
preparation for trial, excessive delay and lack of diligence on the part of the plaintiff in
prosecuting the action, insufficient explanation for the need to take a dismissal, and whether a
motion for summary judgment has been filed by the defendant.” Id.; see also Bridgeport Music,
Inc. v. Universal-MCA Music Pub., Inc., 583 F.3d 948, 953 (6th Cir. 2009) (“Bridgeport II”).
These factors are only a guide, however, and the trial judge ultimately retains discretion to grant
the motion to dismiss. Rosenthal v. Bridgestone/Firestone, Inc., 217 F. App’x 498, 502 (6th Cir.
2007).
The district court evaluated the four Grover factors and determined that they weighed in
favor of dismissal. Ricupero argues that the court abused its discretion in granting a voluntary
dismissal because Malibu’s litigation model—filing a motion for voluntary dismissal where
settlement is not reached by the close of discovery—results in unfair treatment to the defendant.
We begin our analysis with the Grover factors.
First assessing Ricupero’s effort and the expense of preparation, the court found that
discovery was relatively limited in the case, and any excessive energy spent on motions practice
was the result of Ricupero’s own litigation tactics. Ricupero argues that Malibu’s several
requests for extensions, which he frequently opposed, were intended to hang him with the cost of
extended litigation, and that he was often compelled to correct Malibu’s misrepresentations of
law and fact. Malibu counters that its extensions were necessary based on Ricupero’s own
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failure to produce discovery. The record shows some support for both positions. Though
Ricupero has clearly expended great energy and effort in defending himself against what he
views as Malibu Media’s suspect litigation tactics, the record reveals that much of this effort was
directed at matters that did not advance either discovery or the litigation as a whole. As the court
noted, Ricupero repeatedly expressed dissatisfaction with Malibu Media’s discovery responses,
but did not seek to compel or obtain the information he purportedly sought. Instead, many of
Ricupero’s actions—such as failing to produce his imaged hard drive until compelled by the
court—can fairly be seen as holding up the progression of discovery. The effort and expense
Ricupero has expended in litigation is thus not dispositive of the issue of legal harm.
Similarly, in evaluating excessive delay or lack of diligence on the part of the plaintiff,
the court found that any delay by Malibu Media was the result of Ricupero’s failure to provide it
with his electronic devices and storage systems until ordered to do so. Ricupero counters that
Malibu’s inability to keep to its own discovery schedule, evidenced through five discovery-
related extensions, weighs against dismissal. He emphasizes that Malibu Media brought its
motion to dismiss only six days before the deadline for dispositive motions, when it could or
should have known the facts underlying its claimed rationale for dismissal at the start of the case,
and when it was on notice that Ricupero intended to file a summary judgment motion. But the
timing of the motion here carries little weight in determining the legal harm to Ricupero,
especially where Malibu attributes this timing to information it learned in Ricupero’s deposition.
See Rosenthal, 217 F. App’x at 502 (finding that the district court did not abuse its discretion in
granting the plaintiff’s motion to dismiss, which was filed after the court had expressed its
inclination to rule favorably on the defendant’s pending summary judgment motion, and that
“plaintiffs’ delay in filing the motion to dismiss did not sufficiently prejudice defendant to
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preclude dismissal”). The issue is the extent to which Malibu’s delay caused legal harm to
Ricupero. In this case, when much of that delay was premised on Ricupero’s own litigation
tactics, we find that the district court did not err in weighing this factor in favor of Malibu Media.
Third, the court also accepted Malibu’s explanation for its dismissal: that it had learned,
shortly before filing its motion to dismiss, that pursuing the case would not be financially
justified based on the state of Ricupero’s personal finances. Malibu states that it first learned of
Ricupero’s finances at his January 26, 2016, deposition, where he stated that he had recently
started his own business and that he and his roommates could not afford cable. Ricupero argues
that his financial situation should have been obvious from the outset, but fails to point to any
place in the record from which Malibu could have gleaned this information. Ricupero also
argues that his finances provide insufficient justification to warrant a dismissal without
prejudice. But a plaintiff’s cost-benefit analysis of pursuing further litigation may serve as
sufficient explanation of its dismissal. See Bridgeport II, 583 F.3d at 955 (determining that the
district court did not abuse its discretion in granting the motion to dismiss where it concluded
that the “plaintiffs’ cost-benefit analysis provided a reasonable explanation for seeking dismissal
in [the] cases”); see also Malibu Media, LLC v. Shekoski, No. 13-12217, 2015 WL 2353117, at
*2 (E.D. Mich. May 15, 2015) (finding that “whether Plaintiff seeks dismissal to avoid expensive
litigation, or because it no longer has a good faith belief that Defendant is the direct infringer,
Plaintiff has a justifiable reason to dismiss th[e] lawsuit”). While this explanation may be fairly
scant, Ricupero does not actually dispute his limited financial means or show how it was known
earlier. The court did not err in finding this cost-benefit analysis to be a sufficient explanation
for purposes of this factor.
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Finally, in evaluating the fourth Grover factor, the court noted that at the time Malibu
Media filed its motion to dismiss, no summary judgment motion was pending. Ricupero filed his
motion for summary judgment six days later, on the deadline, and argues that the order of filing
makes no difference because Malibu knew that he intended to file for summary judgment, and
the relevant inquiry is whether such a dispositive motion was pending. See Grover, 33 F.3d at
718. The court concluded that Ricupero’s after-the-fact filing should not be held against Malibu,
and that dismissal was justified despite the pending summary judgment motion.
The existence of a pending motion for summary judgment is not dispositive. In
Rosenthal, the defendants’ summary judgment motion was pending at the time the district court
granted the plaintiffs’ motion to dismiss. See 217 F. App’x at 499. Though that court had
indicated its inclination to grant summary judgment in defendants’ favor on all claims, the
plaintiffs subsequently filed a motion to dismiss, which was granted. Id. Defendants argued
“that the pending summary judgment motion precluded the court from granting the motion to
dismiss” but we rejected that argument because “[t]here is no requirement that each of the
Grover factors be resolved in favor of the moving party before dismissal is appropriate,” and that
“the existence of a pending motion for summary judgment is a factor that should be considered,
but its existence does not mandate a finding of plain legal prejudice.” Id. at 502. Here,
particularly when Ricupero’s motion for summary judgment was filed after the motion to
dismiss, we find that the court did not abuse its discretion by granting Malibu Media’s motion to
dismiss.
Ricupero makes one final argument that he will suffer legal harm from dismissal of the
complaint: he will lose defenses and “[c]ourts readily find plain legal prejudice where dismissal
results in stripping a defendant of an absolute defense.” Id. at 500. Ricupero claims that he
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retains two absolute defenses: innocence/non-infringement and a statute of limitations defense
for some of the films copyrighted by Malibu Media that he allegedly downloaded. But Ricupero
has not shown how he will lose either of these defenses in a subsequent action. Should Malibu
Media assert a second copyright infringement lawsuit against Ricupero, dismissal in this action
will not affect Ricupero’s ability to raise either a non-infringement or statute of limitations
defense. “Where a defense is still available in the second action, courts are less likely to find
plain legal prejudice.” Rosenthal, 217 F. App’x at 501. And as the district court noted, simply
the threat of a second lawsuit is not enough to show that Ricupero will suffer legal prejudice
from dismissal. See Grover, 33 F.3d at 718.
Ricupero has not shown that the law “clearly dictates a result” in his favor, such that it
would be “unfair to subject him to continued exposure to potential liability by dismissing the
case without prejudice.” Id. at 719. Accordingly, we find that the district court did not abuse its
discretion in granting Malibu Media’s motion to dismiss without prejudice.
C. Payment of Attorney’s Fees and Costs
Finally, Ricupero argues that the dismissal without prejudice should have been with
payment of attorney’s fees and costs. The district court determined that such an award was not
necessary because there was no indication that Malibu Media had brought the action against
Ricupero in bad faith, or that it deliberately sought to increase Ricupero’s costs through extended
litigation.
Ricupero appears to argue that the dismissal of Malibu’s complaint under Rule 41(a)(2)
makes him a “prevailing party” within the meaning of 17 U.S.C. § 505, which would entitle him
to fees under the Copyright Act. (See Appellant’s Br. at 68-69) He offers no support for this
contention. Rule 41(a)(2) “is not a fee-shifting statute like § 505 of the Copyright Act,” which
requires the evaluation of specific factors to award attorney’s fees. Bridgeport Music, Inc. v.
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Universal-MCA Music Pub., Inc., 481 F.3d 926, 931 (6th Cir. 2007) (“Bridgeport I”). Rule
41(a)(2) is a “discretionary procedural rule that explicitly allows a district court to impose terms
and conditions upon a voluntary dismissal as the court deems proper.” Id. (internal quotations
and citation omitted). We review the district court’s determination for abuse of discretion. Id. at
929.
The magistrate judge assessed the general factors used to evaluate whether to award
attorney’s fees, including whether the plaintiff acted in good faith in bringing the action,
extensive discovery costs were involved, and extraordinary expenses were incurred in defending
the action. The court determined that it could not conclude that Malibu brought the action solely
for the purpose of harassing, embarrassing, or abusing Ricupero, but rather that it was acting to
protect its copyright by bringing an infringement action against a person who it believed was
infringing on that right. Similarly, the court determined that there was no evidence that Malibu
attempted to increase Ricupero’s costs in defending the action by delaying or extending the
litigation—to the contrary, the court found that the length of the litigation was due in large part
to Ricupero’s own conduct.
On appeal, Ricupero once more argues that Malibu Media abused the discovery process
and conducted the litigation in a manner that intended to increase the cost of his defense. There
is some litigation history suggesting that Malibu Media has sued multiple individuals and
employed a litigation model of pushing for and obtaining nuisance value settlements or
dismissing the claim. Ricupero suggests that the possibility of incurring fees could reduce
Malibu’s incentives to bring “meritless” suits and better balance the litigants’ positions. While
this last sentiment may be true, it does not mean that the district court abused its discretion in
declining an award of attorney’s fees. Examining the dynamics exhibited throughout the
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litigation as a whole, and particularly Ricupero’s conduct, the court determined that a fee award
was not appropriate to alleviate any harm to Ricupero as a result of dismissal without prejudice.
We cannot say that this was an abuse of discretion.
Ricupero’s final argument is that “[a]ny dismissal should be conditioned on Malibu
providing proper responses to [his] discovery demands.” This argument appears to be another
request for fees as a prevailing party in the litigation, but insofar as Ricupero seeks specific
documents or interrogatories, he is not clear as to what those documents or interrogatories might
be. Without any indication of what “discovery” Ricupero seeks for Malibu to “produce,” we do
not make any such condition on the dismissal. We also find that the district court did not abuse
its discretion in denying this request.
III. CONCLUSION
For the reasons discussed, we AFFIRM the district court’s dismissal of Ricupero’s
counterclaim and of Malibu Media’s suit pursuant to Rule 41(a)(2).
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