Zebra Strategies Inc. v. Gonzalez- Nazario

Background

Zebra Strategies, Inc. moved under Federal Rule of Civil Procedure 41(a)(2) to dismiss this action without prejudice. A dismissal without prejudice generally permits a plaintiff to bring the matter again. Zebra said it wanted to add the defendants in this case as third-party defendants in another case pending in the same district. Ada Gonzalez-Nazario, Sago Inc., and Sean Goodman opposed the motion. Gonzalez-Nazario also asked the court to dismiss the action with prejudice, which would bar refiling.

Court’s analysis

For a Rule 41(a)(2) dismissal without prejudice, the court applied five factors known as the Zagano factors: the plaintiff’s diligence, any improper or excessively troublesome conduct, how far the case has progressed, duplicated litigation expenses, and the adequacy of the plaintiff’s explanation.

The court concluded that at least four factors opposed dismissal. Zebra waited until after the parties litigated a motion to dismiss and until shortly before the end of fact discovery. The court noted that Zebra had known about the other lawsuit for more than three months before seeking dismissal. The court also found that this case had substantially progressed: the motion to dismiss had been decided, the parties had engaged or tried to engage in discovery, fact discovery had ended, and the deadline for expert disclosures had also passed. Only trial and any motion for summary judgment remained.

The court found that requiring defendants to repeat discovery in another lawsuit would be unnecessarily expensive and unfair. It also found that Zebra had not offered a persuasive explanation for relitigating the dispute or a compelling reason why the defendants’ liability should be decided in a new case.

Rulings

The court denied Zebra’s motion to dismiss this case without prejudice. It also denied Gonzalez-Nazario’s request to dismiss the action with prejudice, explaining that a plaintiff who seeks dismissal without prejudice and objects to dismissal with prejudice must be allowed to withdraw its motion and continue litigating.

The court did not rule on Gonzalez-Nazario’s and Sago’s requests for fees under the Defend Trade Secrets Act because they could seek those fees only if they were later determined to be prevailing parties and otherwise met the statute’s requirements. The court directed that any fee application by Goodman wait until judgment, with applications due 14 days after judgment. The conclusion states that defendants’ requests for relief were also denied. The case therefore continued.