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Global One Communications World Holding B.V. v. Gaul

July 16, 2008


The opinion of the court was delivered by: Gary L. Sharpe U.S. District Judge


I. Introduction

This matter comes before the court on the plaintiff's motion for voluntary dismissal pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure (Dkt. No. 132), and the defendant's cross-motion to strike and for the imposition of costs and attorney's fees (Dkt. No. 134). For the reasons that follow, the plaintiff's motion is granted, and the defendant's cross-motion is denied.

II. Facts and Procedural History

The history of this case is complex, but no more than a summary of events is required here. Over seven years ago, in February of 2001, Global One Communications World Holding B.V. ("Global One") commenced this action, alleging that the defendant, Jeffrey Gaul, had engaged in cyberpiracy and trademark infringement in connection with his registration of a certain internet domain name. (See Compl.; Dkt. No. 1.) Following a transfer of venue, a parade of judicial reassignments (including one recusal), a period of inactivity lasting approximately three years, and numerous motions and letter requests, some of which exhibited an unfortunate degree of bitterness and rancor, Global One has concluded that it no longer wishes to pursue its claims. Gaul opposes the requested dismissal. After seven years of litigation he believes he is entitled to reimbursement for his costs. Moreover, having come this far, he desires that the matter progress to trial so that his innocence may be established.

III. Discussion

A. Global One's Motion for Voluntary Dismissal

Where, as here, an answer and a motion for summary judgment have been filed, and the defendant has refused to stipulate to dismissal, voluntary dismissal may only be effectuated by order of the court. See FED. R. CIV. P. 41(a). The decision whether to grant a Rule 41(a)(2) motion for voluntary dismissal lies within the sound discretion of the court. See Catanzano v. Wing, 277 F.3d 99, 109 (2d Cir. 2001). The court's decision should be informed by the following factors: (1) the plaintiff's diligence in bringing the motion; (2) any "undue vexatiousness" on the part of the plaintiff; (3) the extent to which the suit has progressed, including the defendant's effort and expense in preparation for trial; (4) the duplicative expense of potential relitigation; and (5) the adequacy of the plaintiff's explanation for the need to dismiss. See Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990).

In this case, at least three of the aforementioned factors militate in favor of dismissal. First, Global One's conduct in this case has not been unduly vexatious. Global's One's Complaint was not baseless or frivolous, nor has Global One engaged in any patently dilatory or inappropriate motion practice. Gaul appears to suggest that the court cannot resolve the question of vexatiousness without first holding a trial on the merits of Global One's claims. It is Gaul's view that if a trial were to show that his conduct was blameless, then the court would have no choice but to conclude that Global One's lawsuit was vexatious. However, a plaintiff's view of the law may be reasonable even if it is not ultimately sustained. Thus, in ruling that Global One's conduct has not been vexatious, the court reaches no conclusion concerning whether Global One would have prevailed on the merits had this case proceeded to trial; instead, the court simply finds that the lawsuit was filed in good faith, and that the legal arguments and litigation strategies employed by Global One were neither malicious, nor frivolous, nor otherwise improper.

On the matter of expenses, it does not appear that dismissal at this juncture would result in duplicative expenses should the case be reopened in the future. At this time, discovery has yet to commence, and a trial date has not been set.*fn1 Thus, in the event that Gaul successfully appeals the dismissal of his counterclaims, and the case is remanded for trial, discovery and trial preparation will start from precisely where they left off, with no need for re-doing what has already been done. The fact that Gaul may have expended substantial resources and efforts up to this point has no bearing on the issue of duplicative expenses, because the motions that have already been filed, argued, and decided will not have to be filed, argued, and decided again.

As to the plaintiff's explanation of the need for dismissal, it is adequate. Since the commencement of this action, Global One has discontinued its use of the "Global One" trademark, thereby rendering its request for injunctive relief moot. Moreover, Global One has no expectation of recovering damages from Gaul. Accordingly, from Global One's perspective, there is little point in continuing the action. This explanation is reasonable and betrays no sign of bad faith or ulterior motive.

Thus, three of the Zagano factors clearly weigh in favor of dismissal.

Whether the remaining two factors favor dismissal is less clear-cut. With respect to the plaintiff's diligence in bringing the motion for voluntary dismissal, Gaul argues that Global One should have sought voluntary dismissal years ago, when it first discontinued its use of the Global One trademark. It is unclear from the parties' submissions exactly when Global One discontinued its use of the trademark, but the precise date is ultimately irrelevant. Absent settlement or agreement with Gaul, Global One could not have been expected to seek voluntary dismissal of its claims so long as Gaul's counterclaims remained outstanding. The counterclaims were not dismissed until April 5, 2007. (See Oral Order dated April 5, 2007.)*fn2

Global One moved for voluntary dismissal on February 29, 2008. (Dkt. No. 132.) No explanation is provided as to why Global One did not file its motion for voluntary dismissal until nearly 11 months had elapsed from the date of the dismissal of Gaul's counterclaims. This period of delay raises serious doubts as to Global ...

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