November 2023

Aeronet Worldwide, Inc. v. AB&M Interstate Servs., Inc.

United States District Court, N.D. New York.

AERONET WORLDWIDE, INC., Plaintiff,

AB&M INTERSTATE SERVICES, INC., MOBI EXPRESS, INC., and DOES 1–10 Defendants.

6:22-cv-01081 (BKS/TWD)

Filed 10/10/2023

Attorneys and Law Firms

Appearances:

For Plaintiff: William E. Lakis, Jr., Lakis Law Offices, PC, 145 North Franklin Turnpike, Suite 122, Ramsey, NJ 07446

MEMORANDUM-DECISION AND ORDER

Brenda K. Sannes Chief U.S. District Judge

I. INTRODUCTION

*1 Plaintiff Aeronet Worldwide, Inc. brought this action against Defendants A B & M Interstate Services, Inc., AB&M Interstate Services, Inc., AB&M Logistics, LLC, Mobi Express, Inc., and Does 1 through 10, alleging violations of 49 U.S.C. § 14706, et seq. (the “Carmack Amendment” to the Interstate Commerce Act), and related state laws. (Dkt. No. 1).¹ Defendant Mobi Express has not answered the Complaint or otherwise appeared in this action. Presently before the Court is Plaintiff’s Motion for Default Judgment against Defendant Mobi Express under Rule 55(b) of the Federal Rules of Civil Procedure. (Dkt. No. 29). For the reasons that follow, Plaintiff’s Motion is denied.

II. FACTS²

Plaintiff is a Texas corporation doing business in the state of New York. (Dkt. No. 1, ¶ 2). Defendant Mobi Express is a Pennsylvania corporation also doing business in the state of New York. (Id. ¶ 6). Plaintiff alleges that Defendants, including Defendant Mobi Express, “were at all times material herein the agents, servants, employers, and/or employees of each of the other Defendants, and each of them, as such, were acting in the course and scope of their employment and/or agency at all times relevant to this action.” (Id. ¶ 9).

In 2020, “Plaintiff’s related entities” arranged for Defendants to “transport two pallets comprised of 66 boxes containing 1,320 units of automobile part assembly kits (the “Cargo”) from Auburn, New York[,] to … Laredo, Texas[,]” under “Aeronet waybill no. 111102405.” (Id. ¶¶ 10–11, 15). “The Cargo was duly tendered in its entirety to [ ] Defendants in good order and condition,” but was “never delivered and was lost.” (Id. ¶¶ 10, 16). Plaintiff alleges that “[i]n agreeing to transport the Cargo for consideration and receiving said Cargo for that purpose, [ ] Defendants were acting as motor truck carriers and were the carriers within the meaning of 29 U.S.C. § 14706, et seq.” (Id. ¶ 17).

“The commercial invoice value of the Cargo lost was [ ] $70,189.00,” (id. ¶ 10), and Plaintiff has “already suffered principal damages in excess of [ ] [$]39,492.02” addressing “[a] disputed claim” brought against Plaintiff by certain entities with an interest in the Cargo, (id. ¶ 11). Therefore, Plaintiff alleges, “[a]s a direct and proximate result of [ ] Defendants’ breach of their statutory obligations under the Carmack Amendment, Plaintiff has suffered or will suffer principal damages in the sum of not less than [ ] [$]109,681.02.” (Id. ¶¶ 11, 18).

III. DISCUSSION

A. Procedural Requirements

*2 “Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining a default judgment.” Priestley v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011). First, under Rule 55(a), the plaintiff must obtain a clerk’s entry of default. Fed. R. Civ. P. 55(a) (“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.”); see also Local Rule 55.1 (requiring a party seeking a clerk’s entry of default to “submit an affidavit showing that (1) the party against whom it seeks a judgment … is not an infant, in the military, or an incompetent person (2) a party against whom it seeks a judgment for affirmative relief has failed to plead or otherwise defend the action … and (3) it has properly served the pleading to which the opposing party has not responded.”). Second, under Rule 55(b)(2), the plaintiff must “apply to the court for entry of a default judgment.” Priestley, 647 F.3d at 505; see also Local Rule 55.2(b) (“A party shall accompany a motion to the Court for the entry of a default judgment, pursuant to Fed. R. Civ. P. 55(b)(2), with a clerk’s certificate of entry of default … a proposed form of default judgment, and a copy of the pleading to which no response has been made.”).

Here, Plaintiff has complied with the procedural requirements for obtaining a default judgment against Defendant Mobi Express. On March 7, 2023, Plaintiff requested a clerk’s entry of default under Rule 55(a), and, as required by Local Rule 55.1, Plaintiff submitted an affidavit affirming that Defendant Mobi Express (1) is not an infant, in the military, or an incompetent person; (2) was properly served; and (3) has defaulted in this action. (Dkt. No. 19, at 1–2). Plaintiff properly served Defendant Mobi Express in accordance with Federal Rule of Civil Procedure 4(h)(1)(B) by serving the Complaint on an authorized agent for Defendant Mobi Express. (Dkt. No. 5). On March 7, 2023, Plaintiff received a clerk’s entry of default against Defendant Mobi Express. (Dkt. No. 20). And, on April 7, 2023, Plaintiff moved for a default judgment against Defendant Mobi Express under Federal Rule of Civil Procedure 55(b)(2) and Local Rule 55.2(b). (Dkt. No. 29). Therefore, as the procedural requirements for entry of a default judgment are met, the Court will address liability.

B. Liability

By failing to appear in this action or respond to Plaintiff’s Complaint, Defendant Mobi Express is deemed to have admitted the factual allegations in the Complaint with respect to liability (as distinct from damages). Greyhound Exhibitgroup, Inc., 973 F.2d at 158 (“[A] party’s default is deemed to constitute a concession of all well pleaded allegations of liability”). “The decision whether to enter default judgment is committed to the district court’s discretion.” Greathouse v. JHS Sec. Inc., 784 F.3d 105, 116 (2d Cir. 2015) (citation omitted). Even where a defendant has admitted all well-pleaded facts in the complaint by virtue of default, a district court “need not agree that the alleged facts constitute a valid cause of action,” and may decline to enter a default judgment on that ground. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (quoting Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). Indeed, the Second Circuit has “suggested that, prior to entering default judgment, a district court is ‘required to determine whether the [plaintiff’s] allegations establish [the defendant’s] liability as a matter of law.’ ” Id. (citation omitted).

Here, although Plaintiff pleads claims under both the Carmack Amendment and state law, the Carmack Amendment “preempts all state law on the issue of interstate carrier liability.” Aviva Trucking Special Lines v. Ashe, 400 F. Supp. 3d 76, 79 (S.D.N.Y. 2019)). Consequently, only the Carmack Amendment claim can be maintained.

The Carmack Amendment governs the liability of common carriers for loss or damage to goods transported in interstate commerce and creates uniform national rules that preempt all state and common law claims against carriers. See Project Hope v. M/V IBN SINA, 250 F.3d 67, 73–74, n. 6 (2d Cir. 2001); 49 U.S.C. § 14706(d). It “relieve[s] cargo owners ‘of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.’ ” Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 98 (quoting Reider v. Thompson, 339 U.S. 113, 119). The statute imposes broad liability on common carriers for all losses relating to goods they transport in interstate commerce. See Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 117–18 (2d Cir. 1999); Union Pacific R.R. v. Greentree Transp. Trucking, 293 F.3d 120, 127 (3d Cir. 2002). “Indeed, Carmack effectively codified the strict liability rule that governed the liability of common carriers at common law.” Sompo Japan Mut. Auto. Ins. Co. v. Union Pac. R.R. Co., 456 F.3d 54, 59 (2d Cir. 2006), abrogated on other grounds by Kawasaki, 561 U.S. 89 (2010).

*3 Under the Carmack Amendment, a plaintiff establishes a prima facie case by showing “delivery [to the carrier] in good condition, arrival in damaged condition, and the amount of damages.” Mo. Pac. R. Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964). For example, in Federal Insurance Co. v. CLE Transportation, Inc., the plaintiff sufficiently pleaded the elements of a claim under the Carmack Amendment by alleging that a “shipment of confections, drinks, and candy [was] initially delivered to [the defendant] in ‘good order and condition[,]’ … that [the defendant] failed entirely to deliver the bequeathed bonbons to California[,] [and that] [p]ursuant to its obligations under [an] insurance contract, [the plaintiff] [had] paid at least $96,850.35 for the losses suffered.” See No. 18-cv-11119, 2020 WL 1503455, at *2, 2020 U.S. Dist. LEXIS 55422, at *5 (S.D.N.Y. Mar. 30, 2020).

Here, Plaintiff alleges that on or about October 17, 2020, “Defendants” received the Cargo, shipped under “Aeronet waybill no. 111102405,” in “good order and condition.” (Dkt. No. 1, ¶¶ 10, 16). Plaintiff further alleges that “Defendants” failed entirely to deliver the Cargo to Laredo, Texas, where it was estimated to arrive on or about October 20, 2020. (Id.). And, finally, Plaintiff alleges that “[t]he commercial invoice value of the Cargo lost was [ ] $70,189.00,” (id. ¶ 10), and that Plaintiff has “already suffered principal damages in excess of [ ] [$]39,492.02” addressing “[a] disputed claim” brought against Plaintiff by certain entities with an interest in the Cargo, (id. ¶ 11).

While these facts resemble those in Federal Insurance Co., however, they lack specificity as to the relationships between Plaintiff and each Defendant, and Defendant Mobi Express and Defendant AB&M Interstate Services, and as to each Defendant’s role in the events giving rise to this action. In Federal Insurance Co., the plaintiff insurance company alleged that the shipper entered into a contract with a particular carrier and that that carrier received the goods to be transported. See 2020 WL 1503455, at *1, 2020 U.S. Dist. LEXIS 55422, at *1. By contrast, here Plaintiff has not alleged any particularized facts regarding Defendant Mobi Express’ role in the events giving rise to this action. It is unclear whether Plaintiff entered into a contract with Defendant Mobi Express and whether Defendant Mobi Express received the Cargo from Plaintiff. Moreover, Plaintiff has failed to plausibly allege a relationship between Defendants, instead referring to “Defendants” as a group and relying on a series of conclusory allegations. (See, e.g., Dkt. No. 1, ¶ 10 (“Defendants undertook to transport [the Cargo] from Auburn, New York[,] to … Laredo, Texas”); ¶ 9 (Defendants “were at all times material herein the agents, servants, employers, and/or employees of each of the other Defendants, and each of them, as such, were acting in the course and scope of their employment and/or agency at all times relevant to this action”); ¶ 17 (“In agreeing to transport the Cargo for consideration and receiving said Cargo for that purpose, [ ] Defendants were acting as motor truck carriers and were the carriers within the meaning of 29 U.S.C. § 14706, et seq.”)).

“ ‘[N]othing in Rule 8 prohibits collectively referring to multiple defendants where the claim alerts [the] defendants that identical claims are asserted against each defendant,’ so long as the allegations ‘provide[ ] enough information to put [each defendant] on notice of its alleged role’ ” in the misconduct at issue. Hunter v. Shanghai Huangzhou Elec. Appliance Mfg. Co., 505 F. Supp. 3d 137, 150 (N.D.N.Y. 2020) (quoting Tardibuono-Quigley v. HSBC Mortg. Corp. (USA), No. 15-cv-6940, 2017 WL 1216925, at *8, 2017 U.S. Dist. LEXIS 47982, at *22–23 (S.D.N.Y. March 30, 2017) (citations omitted)). As this Court has observed, the question is whether the allegations, even if they “refer to ‘Defendants’ collectively without distinguishing each Defendant’s particular role,” “simply ‘give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests,’ ” with “fair notice” defined as “that which will enable the adverse party to answer and prepare for trial, allow the application of res judicata, and identify the nature of the case so that it may be assigned the proper form of trial.” Id. (quoting Richards v. Johnson & Johnson, Inc., No. 17-cv-00178, 2018 WL 2976002, at *2, 2018 U.S. Dist. LEXIS 97899, at *4–5 (N.D.N.Y. June 12, 2018) (citations omitted)).

*4 Nevertheless, as discussed above, Plaintiff has not alleged any particularized facts regarding Defendant Mobi Express’ role in the events giving rise to this action. Nor has Plaintiff supplied documentary evidence in support of the same.³ Therefore, it is not clear, based on the Complaint, that Plaintiff has stated a claim against Defendant Mobi Express under the Carmack Amendment.

In any event, the Court declines to enter a default judgment against Defendant Mobi Express because Defendant AB&M Interstate Services’ continued participation in this litigation precludes Plaintiff’s request for a default judgment as to Defendant Mobi Express. See Grazette v. Rockefeller, No. 20-cv-965, 2022 WL 252631, at *2, 2022 U.S. Dist. LEXIS 16077, at *5 (S.D.N.Y. Jan. 26, 2022).

“[D]efault judgment cannot be issued where the relief requested would prejudice actively litigating defendants.” Knowles-Carter v. Feyonce, Inc., No. 16-cv-2532, 2017 WL 11567528, at *5, 2017 U.S. Dist. LEXIS 233031, at *15 (S.D.N.Y. Sept. 23, 2017) (collecting cases). “The key inquiry is whether the default judgment could result in inconsistent outcomes for similarly situated defendants.” El Omari v. Buchanan, No. 20-cv-2601, 2021 WL 465431, at *3, 2021 U.S. Dist. LEXIS 24776, at *6-7 (S.D.N.Y. Feb. 9, 2021). In some cases where non-defaulting and defaulting defendants “share a ‘closely related,’ if not identical, defense,” for instance, courts have denied a default judgment motion on the grounds that granting a default judgment against the non-defaulting defendant “would, in effect, decide the case before … the non-defaulting … Defendant had an opportunity to be heard.’ ” Known Litig. Holdings, LLC v. Navigators Ins. Co., No. 12-cv-269, 2015 WL 13636078, at *2-3, 2015 U.S. Dist. LEXIS 193205, at *7-8 (D. Conn. Feb. 11, 2015) (discussing case law).

*5 Here, Defendant AB&M Interstate Services is a named Defendant and continues to actively deny its liability, including in its Answer to the Complaint and Crossclaim against Defendant Mobi Express. (Dkt. No. 18). Moreover, both Defendants share certain common, virtually identical defenses, including that Plaintiff never delivered the Cargo to Defendants and that the Cargo did arrive in Laredo, Texas, in good order and condition. Of course, granting a default judgment as to liability against Defendant Mobi Express now would not prejudice Defendant AB&M Interstate Services’ ability to raise these defenses in its litigation with Plaintiff, since default judgments have no collateral estoppel effect against non-defaulting defendants in the same litigation. See Rivera v. Limassol Grocery, Corp., No. 16-cv-6301, 2019 WL 1320339, at *6, 2019 U.S. Dist. LEXIS 2821, at *19-21 (E.D.N.Y. Jan. 4, 2019) (discussing this principle and citing case law); Lemache v. Tunnel Taxi Mgmt., LLC, 354 F. Supp. 3d 149, 155-56 (E.D.N.Y. 2018) (same), report & recommendation adopted, 354 F.Supp.3d 149 (E.D.N.Y. 2019) (same). However, doing so would raise the prospect of inconsistent outcomes, since it is possible that, after granting a default judgment against Defendant Mobi Express based in part on its admission (through its default) that Plaintiff did deliver the Cargo to Defendants and that the Cargo did not arrive in Laredo, Texas, Defendant AB&M Interstate Services could later escape liability by proving that Plaintiff did not deliver the Cargo to Defendants, or that the Cargo did arrive in Laredo, Texas.

Furthermore, the Court perceives no meaningful prejudice to Plaintiff by reserving a formal judgment as to Defendant Mobi Express’ liability for a later stage of the case. Even if the Court were to grant Plaintiff’s request for a default judgment as to liability now, it would reserve a decision on damages for a later stage of the case, when a liability determination has been made as to the non-defaulting Defendant and a total damages award may be assessed against all Defendants together. Hunter, 505 F. Supp. 3d at 161. “Without a damages calculation to accompany the liability determination, no final judgment could be entered in [Plaintiff’s] favor, and there could be no enforceable judgment that [they] could attempt to collect.” Lemache, 354 F. Supp. 3d at 155. Moreover, because a default judgment against Defendant Mobi Express would have no collateral estoppel effect against the non-defaulting Defendant, granting such a default judgment now “does not assist [Plaintiff] in litigating the case against” Defendant AB&M Interstate Services. Id. For the foregoing reasons, the Court declines to enter a default judgment against Defendant Mobi Express at this time.

IV. CONCLUSION

For these reasons, it is hereby

ORDERED that Plaintiff’s Motion for Default Judgment (Dkt. No. 29) is DENIED without prejudice, with leave to refile after resolution of the claims against the actively litigating Defendant.

IT IS SO ORDERED.

All Citations

Slip Copy, 2023 WL 6599077

Footnotes

The claims against A B & M Interstate Services, Inc. and AB&M Logistics, LLC were dismissed by stipulation of the parties on March 9, 2023. (Dkt. No. 24).
The facts are taken from the Complaint. (Dkt. No. 1). Because Defendant Mobi Express has failed to respond to the Complaint, the well-pleaded allegations therein are deemed admitted and assumed to be true for purposes of this Motion. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992).
The Second Circuit has observed that a motion for default judgment may be granted based on “the factual allegations in the complaint, combined with uncontroverted documentary evidence submitted by plaintiffs” with their motion. Bricklayers & Allied Craftworkers Local 2 v. Moulton Masonry & Contr., LLC, 779 F.3d 182, 189 (2d Cir. 2015); see also, e.g., Cabrera v. 1560 Chirp Corp., No. 15-cv-8194, 2017 WL 1289349, at *11, 2017 U.S. Dist. LEXIS 33380, at *28–29 (S.D.N.Y. March 6, 2017) (applying Bricklayers and its progeny and relying on affidavit outside the complaint to find that Plaintiff met elements of a FLSA claim on a motion for default judgment), report & recommendation adopted, 2017 WL 1314123, 2017 U.S. Dist. LEXIS 53368 (S.D.N.Y. Apr. 6, 2017); Zurita v. Bergen Pizza Inc., No. 12-cv-3874, 2016 U.S. Dist. LEXIS 28170, at *8–10 (March 1, 2016) (same), report & recommendation adopted, 2016 WL 1089262, 2016 U.S. Dist. LEXIS 35938 (E.D.N.Y. March 21, 2016). This approach is also consistent with Federal Rule of Civil Procedure 55(b)(2), which establishes that “[t]o the extent that the plaintiff’s allegations are inadequate, ‘a district court has discretion … to require proof of necessary facts’ to satisfy itself that there is ‘a valid cause of action.’ ” Cent. Produce Corp. v. 32-18 M&M Corp., No. 17-cv-3841, 2018 WL 4327923, at *2, 2018 U.S. Dist. LEXIS 114731, at *5 (E.D.N.Y. July 9, 2018) (quoting Au Bon Pain, 653 F.2d at 65), report & recommendation adopted, 2018 WL 4326925, 2018 U.S. Dist. LEXIS 154092 (E.D.N.Y. Sept. 10, 2018); see also Fed. R. Civ. P. 55(b)(2) (providing that “[t]he court may conduct hearings … when, to enter or effectuate judgment, it needs to … establish the truth of any allegation by evidence”).

End of Document

Heselton v. Espinoza

United States District Court, S.D. Illinois.

STACEY HESELTON, LANETTE HESELTON, Plaintiffs,

PEDRO ESPINOZA, ROLINE EXPRESS, INC., and FLOCK FREIGHT, INC., Defendants.

Case No. 21-cv-1592-DWD

10/24/2023

DAVID W. DUGAN, United States District Judge

MEMORANDUM AND ORDER

*1 DUGAN, District Judge:

In this matter, Plaintiffs Stacey and LaNette Heselton assert multiple claims for negligence and loss of consortium against Defendants Pedro Espinoza, Roline Express, Inc., and Flock Freight, Inc., following a vehicle accident on September 26, 2021 in Effingham, Illinois (Doc. 48). Specifically, Plaintiff asserts a negligence claim against Defendant Espinoza, the driver of the tractor trailer which struck Plaintiff Stacey Heselton’s vehicle (Count 1). Plaintiff also asserts a vicarious liability claim (Count 2) and negligent hiring claim (Count 3) against Defendants Roline Express and Flock Freight, Inc. for their involvement in the employment of Espinoza and contract for transporting the freight load carried by Espinoza at the time of the accident. Now before the Court is Plaintiffs’ Motion to Dismiss Without Prejudice (Doc. 62) and Supplement in Support (Doc. 64). Defendants Pedro Espinoza, Roline Express, Inc., and Flock Freight, Inc. oppose the Motion (Docs. 65, 66, 68).

Discussion

As further explained in the Court’s prior Order at Doc. 64, the Court construes Plaintiffs’ Motion to Dismiss as a request for dismissal under Fed. R. Civ. P. 41(a)(2) because Defendants Espinoza and Roline Express, Inc. have already filed answers in this matter, and Defendants do not consent to Plaintiffs’ request for dismissal. Fed. R. Civ. P. 41(a)(2) permits the Court to dismiss a case on “terms that the court considers proper.” Dismissals under Rule 41(a)(2) are “within the sound discretion of the district court.” Kovalic v. DEC Int’l, Inc., 855 F.2d 471, 473 (7th Cir. 1988). “The district court abuses that discretion ‘only when it can be established that the defendant will suffer plain legal prejudice as the result of the district court’s dismissal of the plaintiff’s action.’ ” Solomon v. Armor Corr. Health, Inc., No. 19-CV-12-JPS, 2020 WL 407127 (E.D. Wis. Jan. 23, 2020) (internal citations omitted). The following factors indicate whether the defendant will suffer “plain legal prejudice” if the action is dismissed without prejudice:

(1) the effort and expense of preparing for trial; (2) plaintiff’s delay and lack of diligence in prosecuting the action; (3) ‘insufficient explanation for the need to take a dismissal’ and (4) whether the defendant has filed a motion for summary judgment.

Id. (citing Pace v. S. Exp. Co., 409 F.2d 331, 334 (7th Cir. 1969)).

Defendants oppose dismissal (Docs. 65, 66). All Defendants argue that they will suffer “plain legal prejudice” if this case is dismissed without prejudice because Plaintiffs intend to pursue this action in a different district, specifically the Superior Court of California, Los Angeles County where Plaintiffs filed a second lawsuit against Defendants on September 25, 2023 (Doc. 65-1). Defendants Espinoza and Roline Express, Inc. argue that they will be prejudiced by a dismissal because Defendants have conducted extensive discovery and incurred substantial costs in litigating this matter here, in addition to having expert depositions scheduled (Doc. 66). Defendant Flock Freight also argues that dismissal at this stage will allow Plaintiffs to “reset the [discovery] clock” and re-litigate this case for a second time in California (Doc. 65).

*2 In addition to the extensive discovery and late stage of these proceedings, Defendant Flock Freight further contends that it will be prejudiced by a dismissal because it believes Plaintiffs are forum shopping to avoid an adverse ruling on Defendant’s pending Motion to Dismiss (Doc. 65). Defendant Flock Freight filed its Motion to Dismiss on September 1, 2023 (Doc. 56). In its Motion, Flock Freight argues that the Seventh Circuit’s recent decision in Ye v. GlobalTranz Enterprises, Inc., 74 F.4th 453 (7th Cir. 2023) bars Plaintiffs’ negligent hiring claims against it because Defendant is a federally licensed freight broker (Doc. 65, p. 6). In Ye, the Seventh Circuit held that negligent hiring claims against a federally licensed freight broker are entirely preempted by the Federal Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 14501(c)(1). See Ye, 74 F.4th at 453.

Plaintiffs filed their response to Defendant’s Motion on September 29, 2023 (Doc.

59), just five days prior to filing their current Motion to Voluntarily Dismiss. Thus, Defendant Flock suggests that Plaintiffs are motivated to litigate this matter in California, in part, to avoid a ruling on the pending Motion to Dismiss and instead proceed in an apparently more favorable venue. In support of this argument, Defendant Flock maintains that precedent out of the Ninth Circuit Court of Appeals may be more favorable to Plaintiffs on the specific preemption issue presented here, and thus litigating this matter in California would be prejudicial to Defendant’s position in this Court. See, e.g., Miller v. C.H. Robinson Worldwide, Inc., 976 F.3d 1016 (9th Cir. 2020) (holding that negligent hiring claims against a federally licensed freight broker fell within the FAAAA’s preemption exception for “the safety regulatory authority of a State with respect to motor vehicles”). Accordingly, as an alternative argument, Defendant Flock Freight asks the Court to first rule on the merits of its Rule 12(b)(6) Motion before considering Plaintiffs’ Motion to Dismiss. See Mezyk v. U.S. Bank Pension Plan, No. 3:09-CV-384-JPG, 2011 WL 147303, at *2 (S.D. Ill. Jan. 18, 2011) (“[D]ismissal without prejudice may be inappropriate where the plaintiff seeks to avoid an adverse ruling by the Court.”) (citing Kapoulas v. Williams Ins. Agency, Inc., 11 F.3d 1380, 1385 (7th Cir. 1993). Defendant Flock Freight further asks the Court to award it reasonable attorney fees and costs pursuant to Fed. R. Civ. P. 41(d).

Although Plaintiffs’ original motion did not provide an explanation for their need to dismiss this case, Plaintiffs filed a Supplement explaining that dismissal is sought here because litigating this case in California will be more convenient and appropriate (Doc. 67). According to Plaintiffs, after extensive discovery they learned of Defendant Flock Freight’s involvement in this case, and subsequently confirmed that all Defendants are located in California (Doc. 67). Plaintiffs also represent that all of Defendant Espinoza’s former employers, in addition to Plaintiffs’ only other witness to the collision, are all located and employed in California. Plaintiffs further indicate that they have been unable to successfully serve their fact witnesses in California because multiple witnesses have refused to comply with their service attempts, which has hindered the pursuit of Plaintiffs’ case. Accordingly, Plaintiffs now believe that it is in their best interests to pursue their claims in California because all Defendants and all evidence is located there. Plaintiffs thus ask that the Court dismiss this action.

As mentioned above, the dismissal of a plaintiff’s complaint without prejudice under Rule 41(a)(2) is within the district court’s sound discretion. See Tyco Lab’ys, Inc. v. Koppers Co., 627 F.2d 54, 56 (7th Cir. 1980). In deciding whether to grant a Fed. R. Civ. P. 41(a)(2) motion to dismiss, courts should consider a variety of factors, including: “the defendant’s effort and expense of preparation for trial, excessive delay and lack of diligence on the party of the plaintiff in prosecuting the action, insufficient explanation for the need to take a dismissal, and the fact that a motion for summary judgment has been filed by the defendant.” Tyco Laboratories, Inc., 627 F.2d at 56; see also Stern v. Barnett, 452 F.2d 211, 213 (7th Cir. 1971) (“In exercising its discretion the court follows the traditional principle that dismissal should be allowed unless the defendant will suffer some plain legal prejudice other than the mere prospect of a second lawsuit.”). There is no mandate that each and every factor be resolved in favor of the moving party before dismissal is appropriate; the factors are merely a guide for the courts. Id.; see also Ripper v. Leisure Properties, LLC, No. 18-CV-1719-SMY-RJD, 2019 WL 2422356 (S.D. Ill. June 10, 2019).

*3 Here, the relevant factors in this case weigh in favor of voluntary dismissal. This litigation, although pending since December 2021, is not at an advanced stage procedurally. Discovery is still on-going, and trial is not set until March 2024, although the parties recently moved to continue this date (Doc. 60). While Defendants have expended effort in motion practice and discovery, here such efforts do not amount to “plain legal prejudice.” See Tyco Laboratories, Inc., 627 F.2d at 56 (the commencement of discovery alone does not create plain legal prejudice needed to defeat dismissal without prejudice). Nor is it apparent that these discovery efforts will be rendered worthless by a dismissal. Id. at 56 (rejecting argument that extensive discovery would be tantamount to “plain legal prejudice” when parties agreed at oral argument to the utilization of evidence discovery in the dismissed case in plaintiff’s subsequently filed case); in accord Elliott v. Abbott Lab’ys, Inc., No. 3:13-CV-000480-NJR, 2019 WL 8268546, at *4 (S.D. Ill. Aug. 27, 2019) (Finding “the efforts and expenses expended by [Defendant] thus far in this Court would also be useful and relevant in other courts without being wasted.”). And even though this case has been pending since December 2021, the current record before the Court does not support a finding of excessive delay or lack of diligence.

Finally, no plain legal prejudice would ensue with dismissal. Contrary to Defendant Flock Freight’s presumption, it is not a foregone conclusion that its motion to dismiss would be granted or that it would be conclusively dispositive. Indeed, the federal preemption argument Defendant relies on is an affirmative defense which Defendant bears the burden of proof. Further, this analysis may require a factual finding as to whether Defendant Flock was a trucking broker opposed to a motor carrier, a fact which the parties currently dispute. Compare Doc. 48, ¶¶ 10, 29 (Plaintiffs allege that Defendant Flock is a registered motor carrier) with Doc. 56, pp. 3-4 (Defendant Flock insists that Flock has never been a “registered motor carrier” and construes Plaintiffs’ allegations as a “blatant misstatement … that is factually incorrect.”). If such factual dispute is indeed relevant to the preemption question, Defendant has not yet shown how the Court is to resolve this factual dispute on a Rule 12(b)(6) Motion to Dismiss. See, e.g., Geinosky v. City of Chicago, 675 F.3d 743, 751 n.1 (7th Cir. 2012) (“A motion under Rule 12(b)(6) can be based only on the complaint itself, documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice”).¹ Nevertheless, without commenting on the merits of Defendant Flock’s Motion, “the pendency of [a dispositive] motion is not enough to show prejudice. See Simons v. Fox, 725 F. App’x 402, 406 (7th Cir. 2018) (unpublished) (citing Tyco Laboratories, Inc., 627 F.2d at 56). Nor does the fact that Plaintiffs plan to litigate a second lawsuit result in prejudice. Tyco Laboratories, Inc., 627 F.2d at 56 (“[W]e expressly observed that the prospect of a second lawsuit would not be sufficient to meet [the plain legal prejudice] standard.”); Stern, 452 F.2d at 213.

Conclusion

For these reasons, Plaintiffs’ Motion to Dismiss pursuant to Rule 41(a)(2) (Doc. 62) is GRANTED over Defendants’ objections. This matter is DISMISSED without prejudice. All pending motions are DENIED, as moot, and without prejudice. All deadlines and hearings are hereby terminated. The Clerk of Court is DIRECTED to enter judgment accordingly, and to close this case.

Finally, Defendant Flock Freight’s request for attorney fees and costs under Fed.

R. Civ. P. 41(d) is DENIED. When a plaintiff who previously dismisses an action in any Court files an action based on or including the same claim against the same defendant, the Court may order the plaintiff to pay all or part of the costs of the previous action. See Fed. R. Civ. P. 41(d)(1). The decision to award fees and costs is left to the Court’s discretion. Esposito v. Piatrowski, 223 F.3d 497, 500–01 (7th Cir. 2000). The purpose of this rule is to prevent forum shopping and vexatious litigation. Esposito, 223 F.3d at 500-01. Thus, a “judge who reasonably believed that the plaintiff had imposed a gratuitous expense on the defendant by filing in the wrong court and now wanted to dismiss without prejudice in the expectation of refiling in the right court would therefore be justified in conditioning voluntary dismissal on the plaintiff’s reimbursing some or all of the defendant’s expenditures in litigating the jurisdictional issue.” Wells Fargo Bank, N.A. v. Younan Properties, Inc., 737 F.3d 465, 468 (7th Cir. 2013). However, any fee award should “reimburse the defendant for expenses incurred in preparing work product that will not be useful in subsequent litigation of the same claim.” Id.

*4 Here, Defendant Flock Freight provides no argument or basis to support an award of fees or costs. Further, the facts and circumstances do not warrant the costs in this instance. It is not clear to the Court that Plaintiffs are engaged in forum shopping; rather Plaintiffs are pursuing their claims in two jurisdictions that both have jurisdiction to hear their claims. Moreover, it appears that the expenses incurred by Defendant in preparing work product in this case will be useful in subsequent litigation, and Defendant has not otherwise shown that it has incurred “gratuitous expense” in the three months Defendant Flock Freight has been involved in this litigation, having first entered its appearance on August 16, 2023 (Doc. 53).

SO ORDERED.

Dated: October 24, 2023

DAVID W. DUGAN

United States District Judge

All Citations

Slip Copy, 2023 WL 7003467

Footnotes

In its Motion to Dismiss, Defendant Flock appears to have copied a screenshot from a federal website to support its argument that it was not acting as a registered motor carrier (Doc. 56, p. 4). However, the screenshot is partially illegible, and Defendant does not otherwise explain how the Court can take judicial notice of this fact from an unidentified source. See, e.g. Fed. R. Evid. 201.

End of Document