Opinion
CIVIL NO. H-00-261
November, 2000
MEMORANDUM OPINION
This civil action was filed by plaintiff National Satellite Sports, Inc. ("NSSI") on January 27, 2000. Named as defendants were Jerome Sapperstein and six other entities, including Comcast Satellite Communications, Inc., Primestar, Inc., successor-in-interest to Comcast, Primestar, Inc., Phoenixstar, Inc., successor-in-interest to Primestar, Inc., Primestar Partners L.P., and Phoenixstar Partners, L.P., successor-in-interest to Primestar Partners, L.P. These entities will be referred to herein as the "Comcast/Primestar Defendants."
Suit was brought by plaintiff under § 605 of the Federal Communications Act of 1934, 47 U.S.C. § 605, as amended, and under state law. NSSI sought damages from defendants for their allegedly illegal use of plaintiff's closed circuit telecast of the June 28, 1997 championship boxing match between Evander Holyfield and Mike Tyson.
Proceedings were delayed when counsel for plaintiff engaged in several months of discussions with defendants in an attempt to determine if certain aspects of this matter could be resolved short of litigation. When these discussions were unproductive, the Comcast/Primestar Defendants filed their answer to the complaint on May 30, 2000, and on July 13, 2000, defendant Sapperstein filed his answer. On July 14, 2000, a Scheduling Order was entered by the Court.
Thereafter, the parties engaged in discovery, including the serving of interrogatories and requests for the production of documents. There were various discovery disputes which arose between the parties, leading to conferences between counsel in efforts to resolve those disputes. Both plaintiff and the Comcast/Primestar Defendants served motions to compel on the opposing party or parties. On October 12, 2000, plaintiff filed a motion for leave of court to file an amended complaint. Defendants have not submitted an opposition to that motion.
These motions were never brought to the attention of the Court pursuant to Local Rule 104.8. There has accordingly been no ruling by the Court on the parties' discovery disputes.
Presently pending before the Court is plaintiff's Motion for Order of Dismissal of Action. An opposition to that motion has been filed by the Comcast/Primestar Defendants, and plaintiff has recently replied to this opposition. For the reasons stated herein, plaintiff's motion for a dismissal of this action will be granted. The Order of Dismissal to be entered by the Court will be with prejudice, and court costs will be assessed against plaintiff. The request of the Comcast/Primestar Defendants for an award of attorneys' fees will be denied.
Plaintiff's motion was filed under Rule 41(a), F.R.Civ.P. Since defendants have answered the complaint, and since the parties have not stipulated to a dismissal of the action, the pending motion must be considered by the Court under Rule 41(a)(2), which provides in pertinent part as follows:
Except as provided in paragraph (1) of this subdivision of this rule, an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper . . . Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice.
Plaintiff's motion did not request that the dismissal of this action be without prejudice or with prejudice. Defendants have argued that under the circumstances here, dismissal of this action must be with prejudice. In its reply memorandum, plaintiff indicates that it would not object to the dismissal of this action with prejudice.
It is well established that the decision to grant a voluntary dismissal under Rule 41(a)(2) is a matter committed to the discretion of the district court. Davis v. USX Corp., 819 F.2d 1270, 1273 (4th Cir. 1987). Under all the circumstances here, this Court has concluded that the dismissal of this case should be with prejudice, particularly since plaintiff has indicated that it is not objecting to such a dismissal. In successfully defending this case, the Comcast/Primestar defendants have incurred attorneys' fees and costs, and they should not be required to duplicate their efforts if plaintiff re-instituted this action at a later date. The Comcast/Primestar Defendants argue that the Court's Order of Dismissal should require plaintiff to pay their reasonable attorneys' fees and costs. Although the Court will require plaintiff to pay costs pursuant to 28 U.S.C. § 1920, plaintiff will not be required to pay the reasonable attorneys' fees of the Comcast/Primestar Defendants. The defendants in this case are the prevailing parties and as a result of their efforts in defense of the action, this suit is being dismissed with prejudice. The prevailing party is prima facie entitled to costs. Lichter Foundations, Inc. v. Welch, 269 F.2d 142, 146 (6th Cir. 1959). Under the circumstances here, this Court is satisfied that costs should be taxed against plaintiff, the party which did not prevail. Defendants should file an appropriate Bill of Costs pursuant to § 1920.
The Comcast/Primestar Defendants have not, however, on this record convinced the Court that they are entitled to an award of attorneys' fees. Plaintiff NSSI sought an Order of Dismissal in this case because it determined, following discovery, that the expense of pursuing this litigation to a conclusion would not be in the best economic interests of NSSI and because uncertainty existed as to the extent to which any judgment obtained would be enforceable against defendants. According to plaintiff, these grounds for dismissal became apparent only upon the receipt of the Comcast/Primestar Defendants' opposition to NSSI's motion to compel. In particular, plaintiff has based its arguments for dismissal upon the affidavit of Pamela J. Strauss, Esq., Associate General Counsel and Secretary of Phoenixstar, Inc., which was included as an exhibit of the Comcast/Primestar Defendants to their opposition to plaintiff's motion to compel. As stated by Ms. Strauss, the corporate history of the Phoenixstar entities is complex and has changed rapidly over a short period of time. When a suit is dismissed with prejudice pursuant to Rule 41(a)(2), an award of attorneys' fees must be based upon proven, "exceptional circumstances" such as a finding that "plaintiff's suit was . . . unnecessary, groundless, vexatious and oppressive. . . ." Lawrence v. Fuld, 32 F.R.D. 329, 332-33 (D.Md. 1963). The Comcast/Primestar Defendants have made no such showing here. There is no statutory provision for the allowance of counsel fees to a defendant for the successful defense of a suit of this sort. Id. at 332. Although they argue that this action was frivolous because NSSI failed to make a reasonable pre-filing inquiry, the record here does not support this contention. NSSI's decision to seek a dismissal of this action was made only after discovery had been undertaken by the parties and after NSSI had determined that it would face difficulties in determining which entity had committed the alleged wrongful acts and that it would face further difficulties in enforcing any judgment which it might obtain after incurring the costs of continuing to litigate the case. The attorneys' fees expended by the Comcast/Primestar Defendants were put to good use in this case. As a result of their vigorous defense during the discovery period, they have prevailed before a trial and even before the filing of a motion for summary judgment.
The Comcast/Primestar Defendants suggest in a footnote that the Court should subject NSSI and its counsel to the payment of attorneys' fees and costs pursuant to Rule 11, F.R.Civ.P., and 28 U.S.C. § 1927.
However, these Defendants have not made the necessary showing which would entitle them to any such award either under Rule 11 or under § 1927.
For all these reasons, plaintiff's Motion for Order of Dismissal of Action will be granted, and this suit will be dismissed with prejudice. Court costs will be imposed against plaintiff, and the request of the Comcast/Primestar Defendants for an award of attorneys' fees will be denied. An appropriate Order will be entered by the Court.