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Ramirez v. iBasis

March 24, 2010

ORLANDO RAMIREZ, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED PLAINTIFF,
v.
IBASIS, INC., DEFENDANT.



The opinion of the court was delivered by: Matsumoto, United States District Judge

FOR ELECTRONIC PUBLICATION ONLY MEMORANDUM & ORDER

Presently before the court is defendant's motion for attorneys' fees and costs pursuant to Federal Rule of Civil Procedure 41(d). (See Doc. No. 35, Notice of Motion.) Defendant requests that the court award attorneys' fees and costs against plaintiff and his counsel, jointly and severally, for initially commencing an action in the United States District Court for the District of New Jersey, voluntarily dismissing that action after defendant filed a motion to dismiss or transfer venue, and re-commencing the virtually identical instant action in this district. Defendant also requests that this matter be stayed until any award is paid by plaintiff or his counsel as provided by Rule 41(d). (See Doc. No. 35, Notice of Motion at 2.) For the reasons set forth herein, defendant's motion is denied.

BACKGROUND

On March 13, 2008, plaintiff, Orlando Ramirez ("plaintiff" or "Ramirez"), represented by his then attorneys, filed a putative class action in the United States District Court for the District of New Jersey*fn1 (the "New Jersey Action") on behalf of himself and other purchasers of telephone calling cards distributed by defendant iBasis ("defendant" or "iBasis"). (See Doc. No. 39, Declaration of Paul M. Weiss ("Weiss Decl.") ¶ 2.) In that case, plaintiff alleged that defendant violated the consumer protection laws of various states,*fn2 where the calling cards were allegedly distributed, by failing to adequately disclose applicable rates, fees and surcharges.

According to plaintiff's counsel, Paul M. Weiss, "Mr. Ramirez had a good faith belief that venue in New Jersey was proper" because iBasis has sufficient business in the tri-state region to justify a business center in New York, indicating that a substantial part of the events giving rise to this instant multi-state class action took place in that District."*fn3 (Doc. No. 39, Declaration of Paul M. Weiss ("Weiss Decl.") ¶ 2.) Mr. Weiss further states that "initiating suit in the District of New Jersey was sensible because that Court had substantial experience with similar 'calling card' cases." (Id. ¶ 3.) In particular, Mr. Weiss states that a similar case against one of iBasis's competitors was "in preparation for a trial on the merits[,]" while another calling card vendor's motion to dismiss was denied by Judge Faith Hochberg of that court. (Id. ¶¶ 3-4.)

Defendant contends that venue in New Jersey was improper. Before defendant was served with process in the New Jersey Action, in an effort to avoid the expense of a motion to dismiss or transfer venue, defendant's attorney, Michael Hassen, telephoned Mark S. Fistos, one of plaintiff's attorneys, on or about March 31, 2008, to request that the New Jersey Action be transferred to this district. (Hassen Decl. ¶¶ 7-8.) Mr. Hassen explained to Mr. Fistos that the Eastern District of New York (the "Eastern District") was the proper venue because plaintiff lived in this district and the calling card at issue in the litigation was purchased and used in this district. (Id. ¶ 7.) Plaintiff's counsel declined to transfer venue to this court. (Id. ¶ 9.)

According to Mr. Hassen, "[b]ecause plaintiff refused to voluntarily transfer the New Jersey Action" to this court, defendant "had no alternative but to file a motion to dismiss, or, in the alternative, to transfer venue (the "Transfer Motion")." (Hassen Decl. ¶ 11.) Defendant filed its Transfer Motion on June 16, 2008 in the New Jersey Action. (Id.; see Weiss Decl. ¶ 5.)

Thereafter, plaintiff's counsel requested that defendant withdraw its motion and stipulate to transfer venue to the Southern District of New York (the "Southern District"). (Id.) Plaintiff's counsel believed that the Southern District was the proper venue because defendant's "primary operations" are located in New York. (Id.) Defendant declined plaintiff's offer because its counsel believed that venue was not proper in the Southern District of New York. (See Hassen Decl. ¶ 16.) According to plaintiff's counsel, defendant "insisted" that it would consent only to transfer venue to the Eastern District. (Weiss Decl. ¶ 7.) On July 7, 2008, the day on which plaintiff's opposition to defendant's Transfer Motion was due, plaintiff voluntarily dismissed the New Jersey Action pursuant to Fed. R. Civ. P. 41(a)(1)(A)(i). (Id. ¶ 7; see Hassen Decl. ¶¶ 17-18.)

On December 19, 2008, "after additional research and consideration," plaintiff re-filed his case in the Eastern District. (Weiss Decl. ¶ 8.) Defendant's counsel contends, and a review of both pleadings confirms, that the instant action is "virtually identical to the New Jersey Action." (See Hassen Decl. ¶ 22.) It is undisputed that the New Jersey Action and the present matter involve the same claims by the same plaintiff against the same defendant. Mr. Weiss notes that plaintiff and his counsel "are prosecuting another virtually identical 'calling card' class action" in this district before Judge Weinstein.*fn4 (Weiss Decl. ¶ 8.)

Defendant seeks $32,175.54 in attorneys' fees and costs and requests that the court award sanctions against plaintiff and his counsel, jointly and severally. (See Doc. No. 35, Def. Mem. at 14 n.5, 9.) Defendant asserts that the fees and costs that it incurred to prepare its Transfer Motion "could have been avoided . . . ." (Hassen Decl. ¶ 24.)

Plaintiff opposes defendant's motion on the grounds that the New Jersey Action was voluntarily dismissed, thereby avoiding further expense to the parties. (See Doc. No. 38, Pl. Mem. at 1.) Additionally, plaintiff contends that he is unable to pay any sanction and that his attorneys are not subject to sanctions under Rule 41(d). (See id. at 8-10.)

DISCUSSION

A. Legal Standard

Rule 41(d) ...


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