United States District Court, E.D. Kentucky, Central Division, Lexington
UNITED STATES OF AMERICA, ex rel. JANE DOE, Plaintiff,
PREFERRED CARE, INC., et al., Defendants.
MEMORANDUM OPINION & ORDER
M. HOOD SENIOR U.S. DISTRICT JUDGE.
this False Claims Act case has been resolved. The parties
have worked out settlement agreements involving nearly every
claim and every defendant. But not all. At least one
defendant remains. The settling parties have filed a Joint
Stipulation of Dismissal under Federal Rule of Civil
Procedure 41. [DE 44]. That rule, however, allows only
dismissal of actions, not individual claims. And
because the current settlements do not dispose of the entire
action, the parties have taken the wrong procedural course to
reach their desired destination.
matter. The Court will still allow the parties'
stipulation to go forward, just under a different rule
because the Court construes filings “by their
substantive content and not by their labels.” See
Coleman v. Ohio State Univ. Med. Ctr., No. 2:11-cv-0049,
2011 WL 3273531, at *3 (S.D. Ohio Aug. 1, 2011). Rule 21
provides the proper mechanism by which to achieve the desired
result. See Fed. R. Civ. P. 21 (“On motion or
on its own, the court may at any time, on just terms, add or
drop a party.”). And under that rule, the stipulation
a False Claims Act filed against several defendants. The
United States has intervened in part, and the parties have
advised the Court that they have reached settlements. On
those claims, the parties have filed a Joint Stipulation of
Dismissal. [DE 44]. But the parties note that “[t]hese
stipulations of dismissal do not apply to any claim asserted
against Reliant Pro Rehab, LLC or Reliant Rehabilitation
Holdings, Inc.” [Id., p. 2]. Reliant has not
reached a settlement and will stick around regardless of the
stipulation filed by other parties. In other words, the
stipulation gets rid of only a portion of the
claims- not the entire action.
circuit, Rule 41 does not operate this way. The rule permits
plaintiffs to dismiss only the entire controversy, not a
portion of the claims. See Philip Carey Mfg. Co. v.
Taylor, 286 F.2d 782, 785 (6th Cir. 1961). “In the
Sixth Circuit, a notice of dismissal under Rule
41(a)(1)(A)(i) can only be used to dismiss all claims against
all defendants, not individual claims or parties.”
EQT Gathering, LLC v. A Tract of Property Situated
in Knott Cty., Ky., No. 12-58-ART, 2012 WL
3644968, at *1 (E.D. Ky. Aug. 24, 2012).
circuits disagree. See, e.g., Van Leeuwen v.
Bank of Am., N.A., 304 F.R.D. 691, 693-94 (D. Utah 2015)
(discussing the circuit split and citing cases). The Sixth
Circuit has itself muddled Rule 41's contours when it
affirmed a district court's Rule 41 dismissal of all
claims against one defendant, but not the entire action.
See Banque de Depots v. Nat'l Bank of Detroit,
491 F.2d 753, 757 (6th Cir. 1974). The Circuit has since
recognized that the “Sixth Circuit's interpretation
of Rule 41 is unclear.” Letherer v. Alger Grp.,
LLC, 328 F.3d 262, 265-66 (6th Cir. 2001) overruled
on other grounds by Blackburn v. Oaktree Capital
Mgmt., LLC, 511 F.3d 633, 636 (6th Cir. 2008). But in
Letherer the Court assumed that dismissal of
anything less than an entire action implicated Rule 21, not
Rule 41. See id. And even if Banque
conflicts with Taylor, this Court would be bound to
follow the earlier published decision. See Wallace v.
FedEx Corp., 764 F.3d 571, 583 (6th Cir. 2014)
(“one panel of [the Sixth Circuit] cannot overrule
another panel's published decision.”).
district courts in this circuit routinely apply
Taylor when plaintiffs attempt to dismiss less than
the entire controversy. See, e.g., See,
e.g., Sheet Metal Workers' Nat'l Pension
Fund Bd. of Trs. v. Courtad, Inc., No. 5:12-cv-2738,
2013 WL 3893556, at *4 (N.D. Ohio July 26, 2014) (“A
plaintiff seeking to dismiss only one defendant from an
action must move the Court to do so under Rule 21.”);
SAAP Energy v. Greenwich Ins. Co., No.
1:12-CV-00098-TBR, 2014 WL 12726322, at *2-4 (W.D. Ky. May
21, 2014); Columbia Gas Transmission, LLC v. Raven Co.,
Inc., Civil No. 12-72-ART, 2014 WL 12650688, at *1 (E.D.
Ky. Mar. 6, 2014) (Rule 41 motion must dismiss “all
claims against all defendants, not individual claims or
parties”); CNX Gas Co., LLC v. Miller Energy Res.,
Inc., No. 3:11-CV-362-TAV-CCS, 2014 WL 11638566, at *2
(E.D. Tenn. Jan. 8, 2014) (“Rule 41(a)(2) . . . is not
the correct procedural vehicle for . . . dismissal of one of
multiple parties”); EQT Gathering, LLC v. A Tract
of Property Situated in Knott Cty., Ky., No. 12-58-ART,
2012 WL 3644968, at *2 (E.D. Ky. Aug. 24, 2012) (Rule 41
dismissals may only “eliminate all claims against all
defendants”); Barrientos v. UT-Battelle, LLC,
284 F.Supp.2d 908, 916 (S.D. Ohio 2003) (“voluntary
dismissal under [Rule 41(a)(2)] is only available to dismiss
entire actions, not single claims.”).
those cases, so it is here. Plaintiffs may not dismiss only
some of the claims or defendants under Rule 41.
Taylor commands that parties use Rule 21 to dismiss
only portions of claims or defendants.
though, that a Court may intervene in the Rule 41 context.
After all, the rule allows dismissal without a court
order and “explicitly leaves the option to dismiss in
the plaintiff's hands; once the plaintiff gives his
notice, the lawsuit is no more.” Aamot v.
Kassel, 1 F.3d 441, 444 (6th Cir. 1993). “Civil
Rule 41(a)(1)(A)(ii) orders, generally speaking, are
‘self-executing' and do ‘not require judicial
approval.'” Exact Software N. Am., Inc. v.
DeMoisey, 718 F.3d 535, 540 (6th Cir. 2013) (quoting
Green v. Nevers, 111 F.3d 1295, 1301 (6 Cir. 1997)).
Indeed, under Rule 41 the parties do not ask for an
order of dismissal; they instead tell the Court
about the dismissal. Usually, permission is superfluous.
but not always. Courts “may decline to permit a
voluntary dismissal when required to avoid short-circuiting
the judicial process, or to safeguard interests of persons
entitled to the court's special protection.”
Green, 111 F.3d at 1301. And among the reasons for
judicial intervention is when a party attempts to dismiss
less than the entire action. In short, “a Rule 41
notice purporting to dismiss certain claims is
ineffective.” Malik v. F-19 Holdings, LLC, NO.
5:15-130-KKC, 2016 WL 2939150, at *4 (E.D. Ky. May 19, 2016).
parties here cannot use Rule 41. They must take a detour.
Rule 21 provides the alternate path. See Taylor, 286
F.2d at 785. The end result is the same. Rule 41 or Rule 21,
some parties are leaving this lawsuit. But the distinction is
not meaningless. First, because “[d]ropping less than
the entirety of an action . . . risks prejudice to the other
parties.” EQT Gathering, LLC, 2012 WL 3644968,
at *3. And second because this is federal court where
“[e]specially here, the rules matter.”
ECIMOS, LLC v. Nortek Global HVAC, LLC, ---
Fed.Appx. ---, 2018 WL 2459915, at *1 (6th Cir. June 1,
2018). This Court will enforce the rules.
for the reasons stated herein, IT IS ORDERED
(1) That the Court construes the parties' Joint
Stipulation of Dismissal under Rule 41(a)(1) as a ...