Barrett v. Apple Inc.

Background

Carl Barrett and six other individuals filed a proposed class action against Apple Inc. and Apple Value Services LLC. The plaintiffs alleged that the defendants wrongfully withheld, concealed, and converted funds lost by victims of scams involving Apple gift cards. After the court partly granted and partly denied the defendants’ motion to dismiss, three plaintiffs voluntarily dismissed all their claims. Six plaintiffs, including Barrett, remained.

Barrett told his lawyers that he no longer wanted to participate in the case. His lawyers were unable to reach him despite several attempts. When the defendants sought to take the depositions of the named plaintiffs, the plaintiffs’ lawyers told the defendants about Barrett’s desire to leave the case and asked them to agree to his dismissal. The defendants did not agree and instead obtained an order requiring Barrett to verify written discovery responses and sit for a deposition. The opinion states that Barrett did not comply with either requirement.

Motion and parties’ positions

The plaintiffs moved under Federal Rule of Civil Procedure 41(a)(2), which allows a court to approve a voluntary dismissal when the defendant has already answered or moved for summary judgment and the parties have not signed a dismissal agreement. The plaintiffs initially requested dismissal of Barrett’s individual claims with prejudice.

The defendants did not oppose Barrett’s eventual dismissal, but asked the court to condition it on their completing, or choosing not to pursue, remedies for his failure to comply with discovery. They argued that Barrett’s testimony could affect class certification, including whether individual issues would outweigh issues common to the proposed class. They also argued that dismissing Barrett, whom the opinion identifies as residing in Maryland, might interfere with the court’s ability to enforce the existing discovery order. At the hearing, defense counsel also mentioned serving Barrett with requests for admission, which could be treated as admitted if he did not respond while he remained a party.

The plaintiffs argued that the defendants would not suffer legal prejudice from Barrett’s dismissal. They said Barrett had no unique deposition testimony relevant to class certification and agreed that the defendants could subpoena him for a deposition after his dismissal.

Court’s analysis

The court explained that voluntary dismissal should generally be allowed unless the defendant shows “legal prejudice,” meaning harm to a legal interest, claim, or argument. A tactical disadvantage is not enough.

The court was concerned about allowing the defendants to obtain admissions from Barrett through discovery that he was unlikely to answer. It concluded that losing that tactical advantage did not amount to legal prejudice. The court also rejected the defendants’ unsupported argument that Barrett’s dismissal might prevent enforcement of the existing discovery order. The court stated that Barrett’s desire to leave the case did not cancel his continuing duty to comply with discovery obligations and court orders.

The court therefore declined to condition Barrett’s dismissal on his prior compliance with the discovery order. It stated that the dismissal would not shield Barrett from the consequences of his noncompliance and referred any remaining discovery disputes or related sanctions to Judge DeMarchi.

Disposition

The court considered whether Barrett’s claims should be dismissed with or without prejudice. It noted that five proposed class representatives would remain, the case was expected to proceed to mediation and class-certification briefing, and there had been no excessive delay. The court also considered that the plaintiffs’ lawyer acknowledged Barrett himself had not confirmed a request for dismissal with prejudice.

The court granted the plaintiffs’ motion and ordered that Carl Barrett’s claims be dismissed without prejudice. The court also referred the parties to Judge DeMarchi to resolve the violation of the March 13, 2023 discovery order.