Appeal from an order entered in the United States District Court for the Southern District of New York, Constance Baker Motley, Judge, vacating plaintiff's Rule 41(a)(1)(i) dismissal of his action. The Court of Appeals held that although the district court had conducted a hearing on plaintiff's application for a temporary restraining order, in the absence of service by defendants of either an answer or a motion for summary judgment, plaintiff was entitled under the terms of the rule to dismissal of his action without prejudice. Order vacated.
Before Moore, Friendly, and Meskill, Circuit Judges.
Rule 41 of the Federal Rules of Civil Procedure permits a plaintiff, under certain conditions, to dismiss an action without prejudice and without the consent of either the court or the defendant. This appeal presents for our consideration two issues: (1) our jurisdiction to entertain an appeal from a district court order purporting to vacate a plaintiff's notice of dismissal filed in apparent conformance with Rule 41(a)(1)(i), and (2) the proper interpretation of the conditions specified in Rule 41(a)(1)(i) under which the right to voluntary dismissal may be exercised.
The circumstances that prompted plaintiff-appellant to initiate and subsequently attempt to dismiss the lawsuit providing the backdrop for this appeal may be briefly set out. Edward O. Thorp, Professor of Mathematics at the University of California at Irvine and holder of a Ph.D. in mathematics, is a consultant and author whose major fields of interest include games of chance and gambling. Using his knowledge of probability and game theory, Thorp has devised a system for the playing of the card game known as "21" or "blackjack." Thorp's system, which purportedly helps its adherents to improve their chances of winning the game and thus to lower their chances of losing money, is explained in detail in Thorp's book, "Beat the Dealer; A Winning Strategy for the Game of 21," a "best-seller" first published in 1962. John Scarne, also a consultant and author on the subject of gambling, has dismissed Thorp's system as unworkable and has rejected as inaccurate Thorp's claims concerning the system's efficacy in his own recently released book, "Scarne's Guide to Casino Gambling."
In September of 1978, after seeing portions of Scarne's book in the form of printer's galleys, Thorp sued Scarne and his publisher, Simon & Schuster, Inc., in an effort to halt distribution of "Scarne's Guide to Casino Gambling." Thorp's complaint alleged that publication of Scarne's book would constitute unfair competition under the Lanham Act, 15 U.S.C. § 1125(a); copyright infringement, 17 U.S.C. § 101 Et seq.; common law unfair competition; injury to his business under New York's General Business Law §§ 279-n and 368-d; violation of his right to privacy and publicity under the common law and under New York's Civil Rights Law §§ 50 and 51; trade disparagement or trade libel under the common law; and defamation under the common law. In addition, Thorp alleged that he had no adequate remedy at law and that he would be irreparably harmed by distribution of defendants' book.
Relying solely on his statutory and common law unfair competition claims, Thorp requested a temporary restraining order prohibiting Simon & Schuster from releasing copies of Scarne's book to retail stores. A hearing on the application for a temporary restraining order was begun on October 13, 1978, and was continued on October 18, 1978. On October 18, Judge Motley denied Thorp's application for a temporary restraining order and set October 27 as the date for a hearing on Thorp's application for a preliminary injunction. On October 19, the day after the application for a temporary restraining order was denied, Thorp, apparently feeling that the cards were stacked against him, filed a notice of voluntary dismissal under Fed.R.Civ.P. 41(a)(1)(i). A few hours later, defendants filed a motion for summary judgment on two of plaintiff's causes of action: the Lanham Act unfair competition claim and the copyright infringement claim. On October 23 Judge Motley, apparently inadvertently, "so ordered" plaintiff's notice of dismissal.*fn1 By letter dated October 25, defendants moved to vacate the notice of dismissal and requested that the action go forward; by letter dated October 26, Thorp opposed this motion. On October 27 Judge Motley, ruling from the bench, vacated her dismissal order and Thorp's notice of dismissal. Plaintiff's requests for reargument of the vacatur decision, and in the alternative, for certification of the decision under 28 U.S.C. § 1292(b), were denied. Thorp filed a notice of appeal. By stipulation of the parties and order of the district court, the due date for Thorp's response to defendants' motion for summary judgment has been extended until ten days after final disposition of Thorp's appeal.
Before considering whether the district court erred in denying Thorp the opportunity voluntarily to dismiss his action without prejudice under Rule 41(a)(1)(i), we must determine whether the district court's vacatur of Thorp's notice of dismissal is an appealable order, as the second question goes to our jurisdiction to decide the first question.
The appealability of an order vacating a notice of dismissal under Rule 41(a) (1)(i) has been squarely upheld in this Circuit. In Littman v. Bache & Co., 246 F.2d 490 (2d Cir. 1957), defendant-appellee moved to dismiss plaintiff's appeal on the ground that the vacatur order was interlocutory. The Court held that although such an order is "not a final disposition of the action, but reopens the case for consideration upon the merits . . . it is settled that . . . if the lower court had altogether lost jurisdiction over the action when the order was entered, an appeal from it will not be dismissed, but will be decided on the merits."*fn2 246 F.2d at 492 (footnote omitted), appeal decided on the merits in Littman v. Bache & Co., 252 F.2d 479 (2d Cir. 1958). See also Kilpatrick v. Texas & P. Ry. Co., 166 F.2d 788 (2d Cir.), Cert. denied, 335 U.S. 814, 69 S. Ct. 32, 93 L. Ed. 369 (1948) (L. Hand, J.) (reversing on appeal district court order vacating plaintiff's notice of dismissal).*fn3 Because, under the Littman formula, the question of our jurisdiction is thus dependent on our determination of the validity of the district court's action, we must of course assert jurisdiction in order to make that determination. Cf. Phillips v. Negley, 117 U.S. 665, 671-72, 6 S. Ct. 901, 903, 29 L. Ed. 1013 (1886) (if an order "was made without jurisdiction on the part of the court making it, then it is a proceeding which must be the subject of review by an appellate court"; "the question of our jurisdiction is necessarily included in the question of the validity of the proceeding (below)"). See also Larsen v. Wright & Cobb Lighterage Co., 167 F.2d 320, 322 (2d Cir. 1948). Compare 5 Moore's Federal Practice P 41.02(6), at 41-43, and 9 Wright & Miller, Federal Practice and Procedure: Civil § 2376, at 246, Citing Ex Parte Skinner & Eddy Corp., 265 U.S. 86, 44 S. Ct. 446, 68 L. Ed. 912 (1924), and suggesting application for a prerogative writ as the appropriate path for review of an interlocutory order subverting a plaintiff's right to dismissal under Rule 41(a)(1)(i).
Although there is no transcript of the hearing held on appellant's application for temporary relief, it appears that the court indicated an inclination to grant a motion by defendants for partial summary judgment if such a motion were to be made and that the defense indicated an inclination to make such a motion. However, the district court's account of the hearing reveals that the defense was "directed" by the court to file a "formal" motion for summary judgment.*fn4 It appears, then, that the court and the litigants were well aware that no such motion had been filed or served, although the probable ruling on such a motion, if forthcoming, was clear to all. The trial court subsequently found that defendants' "formal" notice of motion for partial summary judgment was not filed (and presumably was not served) until several hours after Thorp filed his Rule 41(a)(1)(i) notice.*fn5 Defendants concede that to date no answer has been served.
Under the circumstances the unambiguous wording of the rule would appear to dictate that Thorp's notice of dismissal be given effect.
Subject to the provisions of Rule 23(e), of Rule 66, and of any statute of the United States, an action may be dismissed by the plaintiff without order of court (i) by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, whichever first occurs . . . . Unless otherwise stated in the notice of dismissal . . . the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court of the United States or of any state an action based on or including the same claim.
Fed.R.Civ.P. 41(a)(1).*fn6 In vacating plaintiff's notice of dismissal, however, the district court stated that defendants' brief in opposition to Thorp's application for a temporary restraining order would be treated as the "equivalent" of a motion for summary judgment. The district court then concluded that service of this "equivalent" by defendants had ...