Ascentive, LLC v. Opinion Corp. et al, No. 1:2010cv04433 - Document 102 (E.D.N.Y. 2012)
Court Description: ORDER granting 77 Motion to Dismiss. For all of the foregoing reasons, Ascentive's motion is granted, and Ascentive's complaint is hereby dismissed without prejudice. Ordered by Senior Judge I. Leo Glasser on 5/3/2012.
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Ascentive, LLC v. Opinion Corp. et al Doc. 102 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------x ASCENTIVE, LLC, Plaintiff, MEMORANDUM AND ORDER 10 Civ. 4433 (ILG) (SMG) - against OPINION CORP., et al. Defendants. ------------------------------------------------------x GLASSER, Senior United States District J udge: Before the Court is the m otion of plaintiff Ascentive, LLC (“Ascentive”) to voluntarily dism iss its com plaint without prejudice pursuant to Fed. R. Civ. P. 41(a)(2). Defendants Opinion Corp. and its officers Michael Podolsky and Alex Syrov (collectively, “PissedConsum er”) who have asserted a breach of contract counterclaim against Ascentive, oppose the m otion, contending that Rule 41(a)(2) does not perm it voluntary dism issal where, as here, there is a pendent counterclaim and, even if did, that the dism issal should be with prejudice. For the reasons set forth below, Ascentive’s m otion is granted, and Ascentive’s com plaint is hereby dism issed without prejudice. I. BACKGROU N D The factual background to this action is set out in the Court’s previous decision, fam iliarity with which is assum ed. See Ascentive, LLC v. Opinion Corp., No. 10 Civ. 4433 (ILG) (SMG), 20 11 WL 6181452, at *1-4 (E.D.N.Y. Dec. 30 , 20 11). In short, Ascentive on Septem ber 27, 20 10 filed a com plaint asserting various claim s arising under the Racketeer Influenced and Corrupt Organizations Act and the Lanham Act, as 1 Dockets.Justia.com well as various provisions of Pennsylvania state law.1 PissedConsum er on Novem ber 9, 20 10 filed its answer and also asserted a counterclaim alleging breach of contract. On Novem ber 23, 20 10 , Ascentive filed a m otion for a prelim inary injunction seeking to disable certain webpages operated by PissedConsum er. The Court held a hearing regarding Ascentive’s m otion on Decem ber 6 and 7, 20 10 . The parties conducted discovery in advance of the Court’s prelim inary injunction hearing and discovery has yet to close. The Court on Decem ber 13, 20 11 denied Ascentive’s prelim inary injunction m otion. See id. at *23. In light of the Court’s decision, Ascentive on J anuary 25, 20 12 filed a m otion to voluntarily dism iss its com plaint without prejudice pursuant to Fed. R. Civ. P. 41(a)(2), stating that it did so “after determining that it is not in its best financial interests to pursue the action.” Ascentive’s Mem orandum of Law dated J an. 25, 20 12 at 1 (Dkt. No. 77-1). In support of its m otion, Ascentive also subm itted a declaration from its Chief Executive Officer, Adam Schran (“Schran”), in which Schran states that “[a]fter the denial of Ascentive’s m otion for [a] prelim inary injunction, Ascentive reassessed the costs of pursuing this action” and “determ ined that it is not in its best econom ic interests to proceed with [its] claim s . . . at this tim e.” Declaration of Adam Schran dated J an. 24, 20 12 ¶¶ 2-3 (“Schran Decl.”) (Dkt. No. 77-2). PissedConsum er on February 24, 20 12 filed its opposition. PissedConsum er’s Mem orandum of Law in Opposition dated Feb. 24, 20 12 (“Defs.’ Opp’n”) (Dkt. No. 88). PissedConsum er argues that Ascentive is barred from voluntarily dism issing its com plaint without prejudice and, alternatively, if Ascentive is perm itted to voluntarily 1 Classic Brands, LLC (“Classic”) also filed suit against PissedConsum er and on March 8, 20 11, its action against PissedConsum er was consolidated with that of Ascentive. Classic has not m oved to voluntarily dism iss its com plaint. 2 dism iss the com plaint, dism issal should be with prejudice. Defs.’ Opp’n at 4-21. PissedConsum er also contends that if the Court is inclined to dism iss Ascentive’s com plaint without prejudice, then the Court should condition dismissal on, am ong other things, Ascentive providing it with attorney’ fees and with responses to certain outstanding discovery requests. Defs.’ Opp’n at 21-24. On March 9, 20 12, Ascentive filed its reply subm issions, arguing that Rule 41 does not bar its m otion and that all relevant factors m ilitate in favor of dism issing the com plaint without prejudice. Mem orandum of Law in Reply dated Mar. 9, 20 12 at 4-11 (“Pl.’s Reply”) (Dkt. No. 91). Ascentive further contends that the Court should grant dism issal without prejudice and with no conditions. Pl.’s Reply at 12. II. D ISCU SSION A. Le gal Stan d ard Whether to grant dism issal pursuant to Fed. R. Civ. P. 41(a)(2) is within the discretion of the Court. The Rule provides in relevant part: Except as provided in Rule 41(a)(1), an action m ay be dism issed at the plaintiff’s request only by court order, on term s that the court considers proper. If a defendant has pleaded a counterclaim before being served with the plaintiff’s m otion to dism iss, the action m ay be dism issed over the defendant’s objection only if the counterclaim can rem ain pending for independent adjudication. Fed. R. Civ. P. 41(a)(2). Any such dism issal is without prejudice unless the dism issal order otherwise provides. Id. Although voluntary dism issal without prejudice is not a m atter of right, there is a presum ption in this circuit that generally m otions to dism iss claim s without prejudice should be granted. Team Obsolete Ltd. v. A.H.R.M.A. Ltd., 216 F.R.D. 29, 36 (E.D.N.Y. 20 0 3) (citations om itted). 3 The Second Circuit recently confirm ed that there are two lines of authority “‘with respect to the circum stances under which a dism issal without prejudice m ight be im proper.’” Kwan v. Schlein, 634 F.3d 224, 230 (2d Cir. 20 11) (quoting Cam illi v. Grim es, 436 F.3d 120 , 123 (2d Cir. 20 0 6)). Under the first line of authority, dism issal without prejudice “would be im proper if ‘the defendant would suffer som e plain legal prejudice other than the m ere prospect of a second lawsuit.’” Kwan, 634 F.3d at 230 (quoting Cam illi, 436 F.3d at 123). “Plain legal prejudice” includes “the plight of a defendant who is ready to pursue a claim against the plaintiff in the sam e action that the plaintiff is seeking to have dism issed.” Cam illi, 436 F.3d at 124. For exam ple, this Circuit has explained, “plain legal prejudice” exists when “‘the cause has proceeded so far that the defendant is in a position to dem and on the pleadings an opportunity to seek affirm ative relief and he would be prejudiced by being rem itted to a separate action.’” Id. (quoting In re Skinner & Eddy Corp., 265 U.S. 86, 93-94, 44 S. Ct. 446, 68 L. Ed. 912 (1924)). The second line of authority “indicates that the test for dism issal without prejudice involves consideration of various factors, known as the Zagano factors.” Kwan, 634 F.3d at 230 (citing Cam illi, 436 F.3d at 123). The non-exhaustive list of Zagano factors are “[1] the plaintiff’s diligence in bringing the m otion; [2] any ‘undue vexatiousness’ on plaintiff’s part; [3] the extent to which the suit has progressed, including the defendant’s efforts and expense in preparation for trial; [4] the duplicative expense of relitigation; and [5] the adequacy of plaintiff’s explanation for the need to dism iss.” Zagano v. Fordham Univ., 90 0 F.2d 12, 14 (2d Cir. 1990 ). In Zagano, the Second Circuit affirmed the district court’s denial of the plaintiff’s Rule 41(a)(2) m otion because the action had been pending for four years, extensive discovery had already 4 taken place, the defendants would be prejudiced because of the resources they had spent in preparing for trial, and the plaintiff gave no indication that she would do anything but continue to pursue her case vigorously until ten days before the trial. Zagano, 90 0 F.2d at 14. PissedConsum er does not contend that it will suffer “plain legal prejudice” if Ascentive is perm itted to dism iss its com plaint without prejudice and instead focuses its analysis on the Zagano factors, contending that each factors weighs in favor of dism issing the com plaint with prejudice. Defs.’ Opp’n at 7-21.2 PissedConsum er further argues that the pendency of PissedConsum er’s com pulsory state law counterclaim bars relief under Fed. R. Civ. P. 41(a)(2). Defs.’ Opp’n at 4-6. The Court turns to this latter contention first. B. As ce n tive ’s Mo tio n is N o t Barre d While it is true that a plaintiff m ay not dism iss an action under Rule 41(a)(2) when the dism issal would deprive the Court of federal jurisdiction and, after dism issal, no independent basis would exist to adjudicate the counterclaim , see, e.g., Wentworth v. Hedson, 248 F.R.D. 121, 122 (E.D.N.Y. 20 0 8) (denying plaintiff’s Rule 41(a)(2) m otion where dism issal would destroy court’s subject m atter jurisdiction over defendant’s perm issive counterclaim s), such a circum stance is not presented here as PissedConsum er’s counterclaim is com pulsory, and the Court thus has an independent 2 PissedConsum er does argue that dism issal of Ascentive’s com plaint without prejudice will prejudice them generally but does not invoke the Cam illi line of authority in its discussion. Defs.’ Opp’n at 20 (“Courts routuinely [sic] deny 41(2) m otions where dism issal of the claim s without prejudice would threaten a defendant’s econom ic opportunities.”). Moreover, the one case from this Circuit that PissedConsum er cites in support of this contention—Deere & Co. v. MTD Holdings Inc., No. 0 0 Civ. 5936 (LMM), 20 0 4 WL 1432554 (S.D.N.Y. J une 24, 20 0 4)—involved an application of the Zagano factors. 5 basis to adjudicate the counterclaim : supplem ental jurisdiction pursuant to 28 U.S.C. § 1367.3 Indeed, where, as here, a defendant’s counterclaim is com pulsory, even after a court dism isses a com plaint pursuant to Fed. R. Civ. P. 41(a)(2), the court retains supplem ental jurisdiction over the counterclaim , and Rule 41 therefore does not bar dism issal of the com plaint. See, e.g., Eberhard Inv. Assocs., Inc. v. Santino, No. 0 1 Civ.3840 (LMM), 20 0 4 WL 594728, at *2 (S.D.N.Y. Mar. 25, 20 0 4) (“‘[W]hen there is an independent jurisdictional basis for the counterclaim , Rule 41 does not prohibit dism issal of the underlying com plaint. Sim ilarly, the pendency of a com pulsory counterclaim will not defeat dism issal, since the court m ay retain jurisdiction over a com pulsory counterclaim under Rule 13 so long as it had subject m atter jurisdiction over the m ain claim .’” (quoting 8 J am es W. Moore, Moore’s Federal Practice, § 41.40 [8][a] (3d ed. 1997))); 9 C. Wright, et al., Federal Practice & Procedure § 2365 (3d ed. 20 0 4) (“If the counterclaim is com pulsory, it is settled that the district court has . . . supplem ental jurisdiction under Section 1367 of Title 28 of the United States Code, to decide it even though the plaintiff’s claim is dism issed.”); 1 Michael C. Silberberg, et al., 3 Counterclaim s are com pulsory if they arise “out of the transaction or occurrence that is the subject m atter of the opposing party’s claim .” Fed. R. Civ. P. 13(a). Claim s arise out of the sam e transaction or occurrence if, “essential facts of the various claim s are so logically connected that consideration of judicial econom y and fairness dictate that all the issues be resolved in one lawsuit.” United States v. Aquavella, 615 F.2d 12, 22 (2d Cir. 1979). Sim ilarly, 28 U.S.C. § 1367(a) provides federal courts with supplem ental jurisdiction over “all other claim s that are so related to claim s in the action within such original jurisdiction that they form part of the sam e case or controversy under Article III of the United States Constitution.” A state law claim form s part of the sam e controversy if the state and federal claim “derive from a com m on nucleus of operative fact.” United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130 , 16 L. Ed. 2d 218 (1966). The parties do not dispute that PissedConsum er’s counterclaim is com pulsory. See Defs.’ Opp’n at 5; Pl.’s Reply at 3. 6 Civil Practice in the Southern District of New York § 11:16 (2d ed. 20 10 ) (“If the counterclaim is com pulsory, the court has supplem ental jurisdiction over it and m ay decide the counterclaim even if the plaintiff’s claim is dism issed. If, on the other hand, the counterclaim is perm issive, there m ust be independent grounds for the court to retain jurisdiction.”). Because PissedConsum er’s “counterclaim can rem ain pending for independent adjudication,” Ascentive’s m otion to dism iss its com plaint is not barred by Fed. R. Civ. P. 41(a)(2).4 C. Th e Zagan o Facto rs W e igh in Favo r o f D is m is s al W ith o u t Pre ju d ice PissedConsum er contends that an analysis of the Zagano factors counsels that dism issal without prejudice would be im proper. Defs.’ Opp’n at 7-21. With respect to the first factor—Ascentive’s diligence in bringing this m otion—this factor weighs in favor of Ascentive. While PissedConsum er is correct that courts often consider the length of tim e an action has been pending and the events that occurred during that period in determ ining a plaintiff’s diligence, see, e.g., Guzm an v. Hazem ag U.S.A., Inc., 145 F.R.D. 30 8, 310 (E.D.N.Y. 1993) (m otion to dism iss without prejudice denied where action pending for one year but plaintiff waited until the “eve of trial” to m ake m otion), this 4 PissedConsum er’s reliance on Bosteve Ltd. v. Marauszwki, 110 F.R.D. 257 (E.D.N.Y. 1986), is m isplaced. That case does not support the proposition that “voluntary dism issal is . . . barred where, as here, defendants’ claim s are com pulsory.” Defs.’ Opp’n at 5. In fact, in denying a m otion to dism iss pursuant to Fed. R. Civ. P. 41(a)(2), the court acknowledged that even if it decided to dism iss plaintiffs’ action, it would still have jurisdiction over defendant’s counterclaim s. Bosteve, 110 F.R.D. at 259 (“[T]he court notes that it m ust retain jurisdiction over defendant’s com pulsory counterclaim s, even if plaintiffs’ action were dism issed.”). Moreover, J ohn Evans Sons, Inc. v. Majik-Ironers, Inc., 95 F.R.D. 186, 189 (E.D. Pa. 1982), upon which the Bosteve court relied in support of this statem ent, explicitly notes that Rule 41(a)(2) “does not bar dism issal . . . where there is federal jurisdiction over the plaintiff’s claim and the counterclaim is a com pulsory counterclaim under Rule 13 because the court has ancillary jurisdiction to decide the counterclaim even though the plaintiff’s claim is dism issed.” 7 factor is not dispositive and “[e]ven where litigation has been pending for four years, courts have not found that to be dispositive evidence that a party was not diligent.” Shaw Fam ily Archives, Ltd. v. CMG Worldwide, Inc., No. 0 5 Civ. 3939 (CM), 20 0 8 WL 4127549, at *6 (S.D.N.Y. Sept. 2, 20 0 8) (citing Thom as v. N.Y. Dep’t of Corr. Servs., No. 0 0 Civ. 7163 (NRB), 20 0 4 WL 18710 60 (S.D.N.Y. Aug. 20 , 20 0 4)); see also Cantanzo v. Wing, 277 F.3d 99, 110 (2d Cir. 20 0 0 ) (even though litigation pending for 12 years, plaintiffs not dilatory in bringing m otion to voluntarily dism iss). A better m easure of diligence is whether a plaintiff m oved to dism iss the com plaint without prejudice within a reasonable period of tim e after the occurrence of the event that led to the plaintiff’s decision not to pursue the action. See, e.g., Shaw, 20 0 8 WL 4127549, at *6 (“Because [plaintiff’s] m otion to dism iss was m ade shortly after a series of events that have m ade pursuit of the litigation far m ore difficult and inefficient, the Court finds that [plaintiff] acted diligently.”); Hinfin Realty Corp. v. Pittston Co., 20 6 F.R.D. 350 , 355-56 (E.D.N.Y. 20 0 8) (“The Court finds that the plaintiffs were diligent in bringing their m otion to dism iss the action without prejudice because they filed it im m ediately after the events that led to their decision not to pursue the action at this tim e.”); Universal Marine Medical Supply, Inc. v. Lovecchio, No. 98 Civ. 3495 (ILG), 1999 WL 441680 , at *5-6 (E.D.N.Y. May 7, 1999) (granting plaintiff’s m otion to dism iss but finding that plaintiff was not diligent where plaintiff did not m ove until eight m onths after court decision providing basis for m otion). Under either m easure, Ascentive was diligent in bringing its m otion. This case has only been pending since Septem ber 27, 20 10 , and it was not until December 13, 20 11 that the Court denied Ascentive’s m otion for a prelim inary injunction. The Court’s decision provided the prim ary grounds for Ascentive’s m otion to voluntarily dism iss, 8 causing Ascentive to reassess the costs of pursuing this action and ultim ately to determ ine that it is not in its best econom ic interests to proceed with its claim s. Schran Decl. ¶¶ 2-3. Ascentive filed its m otion to voluntarily dism iss on J anuary 25, 20 12. It cannot be said that the nearly m onth and a half delay from the tim e of the issuance of the Court’s decision and the filing of Ascentive’s m otion was unreasonable. This is particularly so because during the intervening period Ascentive and PissedConsum er engaged in settlem ent discussions, and it was not until J anuary 24, 20 12—the day before Ascentive filed its m otion—that it becam e clear that they would not be able to consum m ate a settlem ent. Declaration of Abbe F. Fletm an dated Mar. 9, 20 12 ¶ 4 (“Fletm an Decl.”) (Dkt. No. 91-1).5 The second Zagano factor—undue vexatiousness by Ascentive—also weighs in Ascentive’s favor. In cases where “there is no evidence to suggest that the case was brought to harass the defendant,” Hinfin, 20 6 F.R.D. at 356, or that a plaintiff had “ill m otive,” Shaw, 20 0 8 WL 4127549, at *6 (citing J ewelers Vigilance Com m ., Inc. v. Vitale, Inc., No. 90 Civ. 1476 (MJ L), 1997 WL 582823 (S.D.N.Y. Sept. 19, 1997)), the second Zagano factor weighs in favor of granting dism issal. There is no evidence of any intent to harass or ill m otive on Ascentive’s behalf. Courts generally find vexatiousness “where plaintiffs have assured the court and the defendants that they intended to pursue their claim s prior to seeking a dism issal.” Id. (no ill m otive where plaintiff notified court of its desire to dism iss claim s as soon as pursuing them becam e unfeasible); cf. Pac. Elec. Wire & Cable Co. v. Set Top Int’l Inc., No. 0 3 Civ. 9623 (J FK), 20 0 5 WL 578916, at *5 5 Som e of Ascentive’s delay in filing its m otion to voluntarily dism iss appears to be attributable to PissedConsum er as the parties were not able to continue the settlem ent discussions they began on Decem ber 19, 20 11 until J anuary 24, 20 12 as counsel for PissedConsum er was on trial in the early part of J anuary. See Fletm an Decl. Ex. A; Affirm ation of J oel G. Macm ull dated Feb. 24, 20 12 ¶ 6 (Dkt. No. 88-1). 9 (S.D.N.Y. Sept. 2, 20 0 8) (finding ill m otive and vexatiousness where plaintiffs “assured the Court, in no uncertain term s, that th[e] case would continue” and “unilaterally and abruptly” canceled m ultiple depositions); Sec. & Exch. Com m ’n v. The Oxford Corp., 181 F.R.D. 269, 271 (S.D.N.Y. 1998) (finding undue vexatiousness where the “SEC gave the Court and parties every reason to believe” that it intended to participate in discovery when it had no intention to do so but nevertheless granting plaintiff’s m otion to voluntarily dism iss without prejudice). Ascentive has m ade no such affirm ative assurances to PissedConsum er or the Court here.6 Nor has PissedConsum er dem onstrated that Ascentive’s claim s are “baseless or frivolous” or that Ascentive “has engaged in any patently dilatory or inappropriate m otion practice.” See Shah, 20 11 WL 2638139, at *2. The third factor—the extent to which the suit has progressed, including the effort PissedConsum er has spent in preparation for trial—also weighs in favor of Ascentive. Where, as here, discovery rem ains in its early stages, this factor m ilitates in favor of dism issal without prejudice. See Lovecchio, 1999 WL 441680 , at *6 (granting m otion for voluntary dism issal where discovery was “far from com plete”); see also Catanzano, 277 F.3d at 110 (voluntary dism issal appropriate where, although litigation had been going on four years, “only halting discovery ha[d] taken place”); Team Obsolete, 216 F.R.D. at 36 (granting m otion for voluntary dism issal where plaintiff’s decision to drop 6 While it is true that Ascentive filed its m otion to voluntarily dism iss only days before its subm issions in opposition to PissedConsum er’s m otion to com pel were due, there is no evidence that Ascentive encouraged PissedConsum er to continue discovery while having no intention of pursuing this action, the relevant inquiry here. See, e.g., Shah v. RBC Capital Mkts. Corp., No. 10 Civ. 7672 (PGG), 20 11 WL 2638139, at *2 (S.D.N.Y. J une 5, 20 11) (granting m otion for dism issal without prejudice where plaintiff did not encourage defendant to continue discovery and there was no other evidence of bad faith). 10 the claim s was “certainly far from any trial date”); cf. Zagano, 90 0 F.2d at 14 (affirm ing denial of m otion to voluntary dism iss where m otion m ade ten days from trial date and parties had engaged in “extensive discovery”). Though the parties did engage in discovery with respect to Ascentive’s prelim inary injunction m otion, m uch discovery— including the taking of additional depositions—rem ains to be com pleted, no pre-trial conference has been held, and a trial date has yet to be set. Under sim ilar circum stances, courts have concluded that this factor weighs in favor of the plaintiff. See, e.g., A.V. by Versace, Inc. v. Gianni Versace S.p.A., 261 F.R.D. 29, 32-33 (S.D.N.Y. 20 0 9) (granting m otion to voluntarily dism iss after pre-trial conference held where m ajority of the activity in case related to injunction m otion). PissedConsum er does not contend, m oreover, that it has expended any effort in preparation for trial. The fourth factor—the duplicative expense of relitigation—weighs in favor of Ascentive as well. “The m ere prospect of a second litigation” is insufficient to rise to the level of legal prejudice. J ones v. Sec. & Exch. Com m ’n , 298 U.S. 1, 19, 56 S. Ct. 654, 80 L. Ed. 10 15 (1936); D’alto v. Dahon Cal., Inc., 10 0 F.3d 281, 283 (2d Cir. 1996). Yet it is the specter of another suit by Ascentive that PissedConsum er prim arily com plains of. Defs.’ Opp’n at 17. In the event that Ascentive again files suit against PissedConsum er in another court, it is likely that the grounds will be the sam e and PissedConsum er will thus be able to use m uch of the work that it has com pleted in this action in defending any subsequent suit. See, e.g., Versace, 261 F.R.D. at 33 (“[E]ven if [plaintiff] were to relitigate the rem aining claim s in a future action, whatever work that defendants have done in preparing for trial can easily be used in a subsequent, sim ilar action.” (citation and quotation m arks om itted)). Further, if PissedConsum er is correct that there is a “com pelling absence of [a] factual or legal basis” to m aintain Ascentive’s claim s, Defs.’ 11 Opp’n at 17, and Ascentive asserts the sam e or sim ilar claim s in a subsequent action, PissedConsum er will sim ply be able to m ove to dism iss the claim s and, if it prevails, save itself from bearing the expense of any duplicative discovery altogether. Cf. Shaw, 20 0 8 WL 4127549, at *9 (where defendants argued, am ong other things, that “plaintiffs’ claim s are entirely without m erit” court found duplicative expenses m inim al because defendants could once again m ove to dism iss claim s in subsequent action). Finally, while it is true that courts som etim es take into account the am ount of legal fees a party has incurred in determining whether to grant a voluntary dism issal m otion, see, e.g., Deere, 20 0 4 WL 1432554, at *2 (voluntary dism issal inappropriate where case pending for four years, thousands of docum ents produced, 62 depositions taken, num erous m otions filed and adjudicated, and defendant had incurred m ore than six m illion dollars in legal fees), PissedConsum er has failed to provide the Court with any authority from this Circuit that supports its assertion that legal expenses of approxim ately $ 20 0 ,0 0 0 .0 0 in a case involving a fiercely litigated m otion for a prelim inary injunction m ilitates against dism issal without prejudice. The final Zagano factor—the adequacy of Ascentive’s explanation for the need to dism iss—also weighs in favor of Ascentive. Ascentive seeks to dism iss sim ply because it is no longer in its econom ic interests to proceed with its claim s. Schran Decl. ¶ 3. This explanation is perfectly reasonable. Indeed, courts frequently conclude that econom ic considerations constitute a reasonable explanation for seeking dism issal. See, e.g., Om ega Inst., Inc. v. Univ. Sales Sys., Inc., No. 0 8 Civ. 6473, 20 10 WL 475287, at *5 (W.D.N.Y. Feb. 5, 20 10 ) (m otion to voluntarily dism iss granted where “plaintiff did not and presently does not have the resources to continue litigating this m atter”); Versace, 261 F.R.D. at 33 (m otion to voluntarily dism iss granted where defendants would be 12 unable to pay any judgm ent obtained against them ); Hinfin , 20 6 F.R.D. at 357 (granting m otion to voluntarily dism iss and noting that “[e]conom ic concerns, such as those raised by the plaintiff, alm ost always dictate the course of litigation, and this case is no exception”). Further, there is no indication that Ascentive seeks dism issal to “avoid the prospect of an adverse decision on a dispositive m otion.” Galasso v. Eism an, Zucker, Klein & Ruttenberg, 310 F. Supp. 2d 569, 573 (S.D.N.Y. 20 0 4) (m otion for voluntary dism issal denied where plaintiff’s explanation—“to preserve plaintiff’s right to be heard, obtain discovery and obtain justice”—was “patently inadequate” and “insulting” to the court). In sum , because each of the Zagano factors weighs in favor of Ascentive, Ascentive’s m otion to dism iss the com plaint without prejudice is granted. D. N o Co n d itio n s o f D is m is s al are W arran te d PissedConsum er contends that an award of attorney’s fees is warranted as a condition of dism issal of Ascentive’s com plaint without prejudice. Defs.’ Opp’n at 22. It also seeks to have the Court im pose the following conditions on its dism issal of Ascentive’s claim s: (1) that Ascentive be barred from refilling these or substantially sim ilar claim s in an action against PissedConsum er in this district without first receiving the Court’s perm ission; (2) that any such action filed by Ascentive in another federal or state court include, am ong other things, a copy of this Court’s m em orandum and order denying Ascentive’s m otion for a prelim inary injunction; and (3) that before dism issal, Ascentive should provide responses to PissedConsum er’s outstanding discovery dem ands. Defs.’ Opp’n at 23-24. With respect to attorney’s fees, the Second Circuit has stated: 13 Fee awards are often m ade when a plaintiff dism isses a suit without prejudice under Rule 41(a)(2). The purpose of such awards is generally to reim burse the defendant for the litigation costs incurred, in view of the risk (often the certainty) faced by the defendant that the sam e suit will be refiled and will im pose duplicative expenses upon him . Colom brito v. Kelly, 764 F.2d 122, 133 (2d Cir. 1985) (citations om itted). “However, fees and costs are to be awarded only when justice so dem ands. Courts within this circuit have refused to award fees and costs following a Rule 41(a)(2) dism issal absent circum stances evincing bad faith or vexatiousness on the part of the plaintiff.” BD ex rel. J ean Doe v. DeBuono, 193 F.R.D. 117, 125 (S.D.N.Y. 20 0 0 ) (citations and internal quotation m arks om itted); accord Icon Licensing Grp., LLC v. Innovo Azteca Apparel, Inc., No. 0 4 Civ. 7888 (KMK), 20 0 5 WL 9920 0 1, at *4 n.6 (S.D.N.Y. Apr. 27, 20 0 5) (granting m otion to voluntarily dism iss without prejudice and concluding that attorney’s fees unwarranted where no showing of bad faith or vexatiousness by plaintiff). As discussed above, PissedConsum er has failed to establish any bad faith or vexatiousness on the part of Ascentive. See Part II.C. supra. An award of attorney’s fees is thus unwarranted. The Court will not im pose the other conditions urged by PissedConsum er either. Forcing Ascentive to spend the tim e and m oney to respond to PissedConsum er’s discovery requests will undercut the very reason it seeks to dism iss its claim s to begin with: to conserve its econom ic resources. In any event, PissedConsum er fails to adequately articulate how the discovery it seeks with respect to a Washington State investigation of Ascentive and Schran that occurred in April 20 0 9 bears on whether Ascentive had a good faith basis in bringing suit against PissedConsum er to begin with— a point J udge Gold recognized in the March 7, 20 12 hearing with the parties. Tr. of Hearing before Magistrate J udge Gold on Mar. 7, 20 12 at 5-6 (Dkt. No. 90 ). As for 14 PissedConsum er’s other proposed conditions, it has provided the Court no legal basis for it to conclude that such term s are proper, and the Court declines to im pose them . III. CON CLU SION For all of the foregoing reasons, Ascentive’s m otion to voluntarily dism iss its claim s without prejudice is hereby GRANTED. SO ORDERED. Dated: Brooklyn, New York May 3, 20 12 / s/ I. Leo Glasser Senior United States District J udge 15
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