Brown v. Baeke

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
June 23, 2005
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

JOHN BROWN; JOSCELYN
BROWN,

Plaintiffs - Appellees,

v. No. 04-3326

JOHN L. BAEKE, JR., M.D.,

Defendant - Appellant,

and

JACLYN F. VOIGHT,

Defendant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
(D.C. No. 02-CV-2532-DJW)

Submitted on the briefs:

Michael R. O’Neal, Gilliland & Hayes, Hutchinson, Kansas, for appellant.

Brian F. McCallister, The McCallister Law Firm, Kansas City, Missouri, for
appellee.

Before HENRY, BRISCOE, and MURPHY, Circuit Judges.
BRISCOE, Circuit Judge.

This appeal 1
arises from a diversity medical malpractice action that was

assigned by consent of the parties to a magistrate judge. See 28 U.S.C. § 636(c).

After plaintiffs lost one expert standard-of-care witness due to a conflict problem,

defendant Baeke filed motions to (1) strike plaintiffs’ remaining standard-of-care

witness, who did not have the requisite level of recent clinical practice, and then

(2) grant summary judgment against plaintiffs for lack of an expert witness

required by Kan. Stat. Ann. § 60-3412. Plaintiffs conceded the grounds for the

motion to strike, but moved under Fed. R. Civ. P. 41(a)(2) for a dismissal without

prejudice to allow them to secure a qualified substitute for the stricken expert.

They also agreed to pay various costs and fees incurred by defendant. The

magistrate judge granted plaintiffs’ motion, though only after imposing a number

of additional conditions and making it clear that “[i]f Plaintiff fails to file a

subsequent action within 30 days of dismissal herein, this dismissal shall convert

into a dismissal with prejudice,” and denied as moot the other pending motions.

App. at 7. Defendant Baeke now appeals, arguing that plaintiffs’ Rule 41(a)(2)

1
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument

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motion should have been denied and the case disposed of with prejudice on the

merits. 2

“Federal Rule of Civil Procedure 41(a)(2) permits a district court to dismiss

an action without prejudice ‘upon such terms and conditions as the court deems

proper.’” Am. Nat’l Bank & Trust Co. v. BIC Corp. , 931 F.2d 1411, 1412 (10 th

Cir. 1991) (quoting rule). “The rule is designed primarily to prevent voluntary

dismissals which unfairly affect the other side, and to permit the imposition of

curative conditions.” Phillips USA, Inc. v. Allflex USA, Inc. , 77 F.3d 354, 357

(10 th Cir. 1996) (quotation omitted). These matters fall within the district court’s

discretion and “[r]eversal requires a clear abuse of discretion.” Am. Nat’l Bank &

Trust Co. , 931 F.2d at 1412. But “[a]bsent ‘legal prejudice’ to the defendant, the

district court normally should grant such a dismissal.” Ohlander v. Larson , 114

F.3d 1531, 1537 (10 th Cir. 1997). We exercise jurisdiction pursuant to 28 U.S.C.

2
We note that plaintiffs have filed a subsequent action as countenanced by
the dismissal order, see Brown v. Baeke, No. 04-2291-JWL, (D. Kan. filed June
24, 2004), which obviates any concern that defendant’s appeal might have been
mooted by conversion of the order under review to the prejudicial dismissal
defendant sought. We also note that the procedurally separate character of the
first, dismissed case and the second, pending case means that defendant “would
not be permitted to complain about the without-prejudice dismissal of the first
[case] at the end of the proceeding initiated by the second.” H.R. Techs., Inc. v.
Astechnologies, Inc., 275 F.3d 1378, 1383 (Fed. Cir. 2002); see also Mobley v.
McCormick, 40 F.3d 337, 340 (10th Cir. 1994) (holding party’s failure to take
appeal from without-prejudice dismissal of first action precluded review of
matters raised therein on appeal from disposition of second action). This point is
relevant to the jurisdictional discussion in footnote 3 below.

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§ 1291 over the judgment dismissing this action, 3
and affirm for reasons explained

below.

3
Our exercise of jurisdiction over defendant’s appeal, consistent with circuit
precedent, see Am. Nat’l Bank & Trust Co., 931 F.2d at 1412, is in accord with
the well-established rule that “a defendant can appeal if [a Rule 41(a)(2)] motion
for voluntary dismissal is granted, since this is [as to the defendant] an adverse
final judgment.” 9 Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 2376, at 418-19 & n.7 (2d ed. 1995 & Supp. 2005); see 8 James Wm.
Moore et al., Moore’s Federal Practice § 41.40[11][c] (3d ed. 2005) (“An order
granting a voluntary dismissal without prejudice is final and is appealable by the
defendant.”). The defendant’s right to appeal a without-prejudice dismissal has
been recognized and explained in a variety of settings. See, e.g., H.R. Techs.,
Inc., 275 F.3d at 1381-84; Farmer v. McDaniel, 98 F.3d 1548, 1551-54 (9th Cir.
1996), overruled on other grounds by Slack v. McDaniel, 529 U.S. 473 (2000);
Kirkland v. Nat’l Mortgage Network, Inc., 884 F.2d 1367, 1369-70 (11th Cir.
1989); LaBuhn v. Bulkmatic Transp. Co., 865 F.2d 119, 121-22 (7th Cir. 1988).
In the present context, appeal is routinely allowed without need for jurisdictional
elaboration. See, e.g., Ellett Bros., Inc. v. U.S. Fid. & Guar. Co., 275 F.3d 384,
388 (4th Cir. 2001); Pontenberg v. Boston Scientific Corp., 252 F.3d 1253, 1255
(11th Cir. 2001); Doe v. Urohealth Sys., Inc., 216 F.3d 157, 159-60 (1st Cir.
2000); D’Alto v. Dahon Cal., Inc., 100 F.3d 281, 282 (2d Cir. 1996); Grover ex
rel. Grover v. Eli Lilly & Co., 33 F.3d 716, 717 (6th Cir. 1994); Hamilton v.
Firestone Tire & Rubber Co., 679 F.2d 143, 145 (9th Cir. 1982); Williams v. Ford
Motor Credit Co., 627 F.2d 158, 159 (8th Cir. 1980); Stern v. Barnett, 452 F.2d
211, 212-13 (7th Cir. 1971); Am. Cyanamid Co. v. McGhee, 317 F.2d 295, 296-97
(5th Cir. 1963). In contrast, plaintiffs’ efforts to seek review of without-prejudice
dismissals under Rule 41(a)(2) raise issues of non-aggrievement and non-finality
that generally bar appellate jurisdiction. See 9 Federal Practice & Procedure
§ 2376, at 418 & n.6; 8 Moore’s Federal Practice § 41.40[11][b]; see, e.g.,
Palmieri v. Defaria, 88 F.3d 136, 140 (2d Cir. 1996) (“Because [the] plaintiff
may reinstate his action regardless of the decision of the appellate court,
permitting an appeal is clearly an end-run around the final judgment rule.”);
LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 603 (5th Cir. 1976) (explaining that
general rule barring appeal by plaintiff “can easily be understood since the
plaintiff has acquired that which he sought, the dismissal of his action and the
right to bring a later suit on the same cause of action, without adjudication of the
merits”).

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 Prejudice does not arise simply because a second action has been or may be

filed against the defendant, Am. Nat’l Bank & Trust Co. , 931 F.2d at 1412, which

is often the whole point in dismissing a case without prejudice. Rather, prejudice

is a function of other, practical factors including: “the opposing party’s effort and

expense in preparing for trial; excessive delay and lack of diligence on the part of

the movant; insufficient explanation of the need for a dismissal; and the present

stage of litigation.” Ohlander , 114 F.3d at 1537. These factors are neither

exhaustive nor conclusive; the court should be sensitive to other considerations

unique to the circumstances of each case. Id. And “[i]n reaching its conclusion,

the district court should endeavor to insure substantial justice is accorded to both

parties, and therefore the court must consider the equities not only facing the

defendant, but also those facing the plaintiff.” County of Santa Fe v. Public Serv.

Co. , 311 F.3d 1031, 1048 (10 th Cir. 2002) (quotation omitted).

The magistrate judge addressed all of the factors cited above, concluding

that the “factors taken as a whole and applied to the unique circumstances

presented in this case do not lead the Court to the conclusion that Defendants will

suffer legal prejudice if this case is dismissed if such dismissal is subject to a

number of curative conditions.” App. at 7. The eleven conditions imposed by the

magistrate judge incorporated not only those offered by plaintiffs but also those

requested by defendant in the event plaintiffs’ motion were granted. Compare id.

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at 7-9 with id. at 87-88 and id. at 97-99. Several conditions were imposed to

avoid redundancy of effort should the case be refiled, including carryover of

discovery and the pretrial order from the dismissed case, and plaintiffs were

required to pay fees and expenses incurred by defendant as a result of duplicative

effort that could not be avoided. On its face, nothing about the magistrate judge’s

order suggests an exercise of discretion that was “arbitrary, capricious, whimsical,

or manifestly unreasonable.” Phillips USA, Inc. , 77 F.3d at 357 (characterizing

abuse of discretion in Rule 41(a)(2) context).

Defendant nevertheless attempts to demonstrate such an abuse of discretion

by taking issue with the magistrate judge’s assessment of certain factors. We do

not find this effort persuasive.

On the delay/diligence factor, the magistrate judge considered the totality

of the circumstances, including the “uniquely unpredictable” expert designation

issues involved, plaintiffs’ active pursuit and response to discovery, and their

diligent overall prosecution of the case, and found that “Plaintiffs did not unduly

delay or fail to diligently pursue this litigation and Defendants will not be legally

prejudiced if this case is dismissed and curative measures taken.” App. at 6.

Defendant, in contrast, focuses on the events surrounding the loss of the expert

and judges the actions of plaintiffs’ counsel in that regard more harshly. But

defendant cites no authority to suggest that the magistrate judge’s broader view of

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the relevant circumstances was inappropriate; indeed, we find that view more in

keeping with the thrust of the case law discussed above. The same is true of the

magistrate judge’s consideration of the curative effect of the conditions imposed

in the dismissal order on any prejudice associated with delay. Finally, as for the

comparatively harsh or favorable interpretation of the conduct of plaintiffs’

counsel, debatable differences in judgment do not betoken an abuse of discretion.

Under our deferential standard, “we do not evaluate whether we would have made

a different finding in the first instance, nor do we reverse adequately supported

findings simply because the evidence is subject to multiple interpretations.”

United States v. Anthony , 172 F.3d 1249, 1254 (10 th Cir. 1999); see Deboard v.

Sunshine Mining & Refining Co. , 208 F.3d 1228, 1245 (10 th Cir. 2000).

Turning to the explanation of plaintiffs’ need for dismissal, the magistrate

judge concluded:

The uniquely unpredictable circumstances presented with
respect to the expert witness deficiencies establish sufficient
justification for seeking dismissal without prejudice. The basic
purpose of the Federal Rules is to administer justice through fair
trials, not through summary dismissals based on procedural
technicalities. If rules of procedure work as they should in an honest
and fair judicial system, they not only permit, but should as nearly as
possible guarantee, that bona fide complaints be carried to an
adjudication on the merits. The Court finds Plaintiffs sufficiently
have explained the need for a dismissal and that this third factor
weighs in favor of dismissal without prejudice.

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App. at 7 (citation and quotation omitted). Again, the magistrate judge’s

thoughtful consideration of the opposing equities does not remotely suggest an

abuse of its discretion.

Defendant, however, sees in these circumstances a tactical effort simply to

evade summary judgment, and argues that plaintiffs “should not be permitted to

avoid an adverse decision on a dispositive motion by dismissing a claim without

prejudice.” Phillips USA, Inc. , 77 F.3d at 358. While we are sensitive to this

concern, we do not think it applies here. In Phillips USA, Inc. , the plaintiff

moved to dismiss a claim facing a substantial challenge on res judicata grounds.

In denying the motion to dismiss, the court pointed out that the plaintiff had not

made any effort to meet, or explain why it could not at that time meet, the

pending merits challenge but, rather, had just offered a perfunctory excuse about

extraneous matters demanding the attention of its chief executive officer to justify

the request for dismissal. Id. Here, in contrast, plaintiffs’ reason for dismissal

related directly to the deficiency underlying the motion for summary judgment

and, far from walking away from the problem, they sought a reasonable solution

and offered significant practical concessions to make it work.

The magistrate judge acknowledged that the stage-of-litigation factor did

not favor dismissal, but defendant argues that the magistrate judge failed to give

this consideration sufficient weight. In light of the curative conditions imposed,

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the effect of which would be to effectively bring any refiled case up to the

advanced discovery and pretrial stage at which the initial action was dismissed,

we see no basis for questioning the magistrate judge’s decision not to accord this

factor decisive weight.

Similarly, the magistrate judge concluded that the effort and expense put

into the case by defendant at the time plaintiffs moved for dismissal did not

warrant denial of the motion, because “the ability of the parties to use discovery

in the new case combined with Defendants’ ability to seek reimbursement for any

duplicative expenses will alleviate any legal prejudice to Defendants with respect

to the efforts and expenses expended by Defendants to date in preparing for trial

in this case.” App. at 6. Defendant contends that this reflects a backward

approach to the Rule 41(a)(2) question. He insists that the court should look

primarily to the other factors and, only if they do not clearly settle the matter,

then consider if the curative conditions imposed to obviate prejudice to the

opposing party should tip the scales in favor of dismissal. No authority is cited

for this facially uncompelling view, and we find it inconsistent with the

controlling case law discussed above. By marginalizing the effect of curative

conditions included in the dismissal order, defendant would have us assess the

central issue of prejudice in an abstract manner divorced from – indeed, contrary

to – the practical realities of the situation. The case law, on the other hand,

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directs that prejudice be assessed in light of the particular circumstances of each

case. Moreover, as this case illustrates, the effective use of curative conditions

can help balance competing equities and ensure that substantial justice is done for

all parties, which is the goal of the Rule 41(a)(2) analysis.

In sum, defendant has failed to show that the magistrate judge abused his

discretion in granting plaintiffs’ motion to dismiss this action without prejudice.

Under the deferential standard that governs our review of such matters, we must

affirm the judgment entered below.

The judgment of the magistrate judge is AFFIRMED.

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