United States District Court, S.D. New York
OPINION & ORDER
RICHARD J. SULLIVAN UNITED STATES DISTRICT JUDGE.
November 9, 2016, Plaintiffs Neiman Nix ("Nix") and
DNA Sports Performance Lab, Inc. ("DNA Lab")
commenced this action in the New York State Supreme Court,
New York County, alleging that Defendants - the Office of the
Commissioner of Baseball, doing business as Major League
Baseball ("Major League Baseball" or
"MLB"), Robert D. Manfred, Allen H. Selig, Neil
Boland, and Awilda Santana - violated the Computer Fraud and
Abuse Act ("CFAA"), 18 U.S.C. § 1030 and
engaged in tortious interference with economic advantage and
defamation. (Doc. No. 1-1 ("Compl.").) On February
17, 2017, Defendants removed the case to this Court. (Doc.
No. 1.) Now before the Court are Plaintiffs' motions: (1)
for leave to voluntarily dismiss their CFAA claim, and (2) to
remand this action to the New York State Supreme Court
pursuant to 28 U.S.C. § 1447. (Doc. No. 13.) For the
reasons set forth below, the motions are GRANTED.
current resident of Texas, played professional baseball
within the Milwaukee Brewers and Cincinnati Reds
organizations until 2003. (Compi. ¶¶ 1, 9.) In
2006, Nix founded the American Baseball Institute
("ABI"), a player development academy based in
Clearwater, Florida. (Id. ¶¶ 13-14, 16.)
Plaintiffs aver that in 2011, Defendant Awilda Santana, an
MLB investigator, contacted players, coaches, and "other
members of ABI and the baseball community"' and
falsely accused Nix of "'misrepresenting"
himself and certain ABI affiliates as "MLB scouts"
and "agents" and "running fake tryouts."
(Id. ¶¶ 19-20.) According to Nix, these
"rumors" damaged his reputation and resulted in the
departure of several players from ABI and the diminution of
ABLs value as an enterprise. (Id. ¶¶ 28,
32.) In 2012, Nix established DNA Lab, a Florida corporation
headquartered in Miami Beach, Florida that Nix describes as
"a state of the art sports science testing
facility." (Id. ¶¶ 2, 40.) Although
Nix insists that he "never sold testosterone or anabolic
steroids" to clients, he alleges that MLB investigators
again made false accusations that he sold to players
performance-enhancing drugs that had been banned by the MLB.
(Id. ¶¶ 54, 57, 64.)
February 18, 2014, Plaintiffs filed a complaint against
Defendants in Florida state court. (Id. ¶ 77.)
Soon after, Defendants allegedly "began
hacking/attacking" the DNA Sports Lab's social media
accounts, which "severely disrupt[ed] Nix's ability
to do business." (Id. ¶ 79.) Plaintiffs
also insist that Defendants "hacked into and
destroyed" his former attorney's computer in
retaliation for filing the complaint. (Id. ¶
amending the Florida complaint, Plaintiffs missed several
initial case management conferences and failed to perfect
service for 261 days. On November 6, 2014, the Honorable John
W. Thornton, Jr., of the Eleventh Judicial Circuit of
Florida, dismissed the case for failure to prosecute in light
of Plaintiffs' non-compliance with several court orders
and failure to perfect service. (Doc. No. 16-3.) Although
Plaintiffs appealed that decision on December 5, 2014 (Doc.
No. 16-4), they voluntarily withdrew the appeal on April 24,
2015 (Doc. No. 16-5).
14, 2016, Nix and DNA Lab filed a separate suit in this
District against the same defendants named here, alleging
tortious interference with prospective economic advantage and
defamation and invoking diversity jurisdiction under 28
U.S.C. § 1332. See Complaint, Nix v. Office
of (he Comm 'r of Baseball, No. 16-cv-5604 (ALC)
(S.D.N .Y. July 14, 2016). On October 19, 2016, the
defendants in that case filed a pre-motion letter regarding
their contemplated motions for dismissal pursuant to Rule
12(b)(1) of the Federal Rules of Civil Procedure for lack of
subject matter jurisdiction and sanctions under Rule 11 of
the Federal Rules of Civil Procedure. Id. at Doc.
No. 10. After Judge Carter, to whom that case had been
assigned, held a brief pre-motion conference on October 27,
2016, Plaintiffs filed amotion for voluntary dismissal
without prejudice pursuant to Rule 41(a)(1)(A)(i) of the
Federal Rules of Civil Procedure on November 3, 2016.
Id. at Doc. Nos. 13, 14.
November 9, 2016, Plaintiffs filed the instant suit against
Defendants, this time in New York Supreme Court, alleging
tortious interference with business relations, defamation,
and violations of the CFAA. (Doc. No. 1-1.) On February 17,
2017, Defendants removed the case to this Court pursuant to
28 U.S.C. § 1441(a), asserting that this Court had: (1)
original jurisdiction pursuant to the 28 U.S.C. § 1331
over Plaintiffs' CFAA claim, and (2) supplemental
jurisdiction over Plaintiffs' state law tort claims
pursuant to 28 U.S.C. § 1367. (Doc. No. 1.) On February
27, 2017, the case was assigned to my docket. That same day,
the Court issued an order directing Plaintiffs, no later than
March 29, 2017, to file either: (1) a motion to remand,
pursuant to 28 U.S.C. § 1447(c), or (2) an amended
complaint conforming to the pleading standards under Rule 8
of the Federal Rules of Civil Procedure. (Doc. No. 6.) On
March 29, 2017, Plaintiffs moved to voluntarily dismiss their
CFAA claim and remand this case to New York State Supreme
Court pursuant to 28 U.S.C. § 1447. (Doc. No. 13.) On
April 12, 2017, Defendants filed their opposition brief and
declaration. (Doc. Nos. 15, 16.) The motion was fully briefed
on April 19, 2017, when Plaintiffs submitted their reply.
(Doc. No. 18.)
Dismissal Under Rule 41
have submitted a proposed stipulation voluntarily dismissing
their CFAA claim with prejudice and without costs to any
party pursuant to Rule 41(a)(1)(A)(ii). (Doc. No. 13-4.)
Under that provision, "the plaintiff may dismiss an
action without a court order by filing a stipulation of
dismissal signed by all parties who have appeared."
Fed.R.Civ.P. 41(a)(1)(A)(ii); (see also Doc. No.
13-4). Since Defendants have not yet joined that stipulation,
it has no legal effect. Nevertheless, Plaintiffs have also
requested leave to voluntarily dismiss their CFAA claim
pursuant to Rule 41 (a)(2), which allows a court to grant a
motion to voluntarily dismiss a complaint or cause of action
"upon such terms and conditions as the court deems
proper." Catanzano v. Wing, 277 F.3d 99, 109
(2d Cir. 2001) (quoting Fed.R.Civ.P. 41(a)(2)). Of course,
"[v]oluntary dismissal without prejudice is . .
. not a matter of right, " Zagano v. Fordham
Univ., 900 F.2d 12, 14 (2d Cir. 1990) (emphasis added),
and before granting dismissal under Rule 41(a)(2), a court
must "evaluat[e] whether substantial prejudice would
result from a dismissal without prejudice, " S.E.C.
v. Chakrapani, No. 09-cv-1043 (RJS), 2010 WL 2605819, at
*2 (S.D.N.Y. June 29, 2010); accord Kwan v. Schlein,
634 F.3d 224, 230 (2d Cir. 2011). Even so, "courts have
generally subjected motions for voluntary dismissal
with prejudice to far less scrutiny, "
Commercial Recovery Corp, v. Bilateral Credit
Corp., LLC, No. 12-cv-5287 (CM), 2013 WL 8350184, at *5
(S.D.N.Y. Dec. 19, 2013), although the Court must still
inquire as to whether the voluntary dismissal "will be
unduly prejudicial to the defendants, "Lan v. Time
Warner, Inc., No. 1 l-cv-2870 (AT) (JCF), 2016 WL
6778180, at *6 (S.D.N.Y. Oct. 18, 2016), report and
recommendation adopted, 2016 WL 6779526 (S.D.N.Y. Nov.
15, 2016) (citation omitted); accord Lakah v. UBS
AG, No. 07-cv-2799 (LAP), 2016 WL 4257527, at *6
(S.D.N.Y. July 29, 2016).
Plaintiffs are willing to dismiss their CFAA claim with
prejudice (Doc. No. 13-4), and Defendants have not even
attempted to articulate any harms they will suffer as a
result of such a dismissal of the CFAA claim (see
Doc. No. 15). And even though, as discussed in the next
section, the dismissal of the CFAA claim will result in
remanding this case to state court, "nearly all courts
grant" dismissal under Rule 41 (a)(2) "when
defendant's only argument against dismissal is that the
plaintiff manifestly seeks to defeat federal
jurisdiction." Katzman v. Am, Airlines, Inc.,
No. 97-cv-8321 (JSM), 1997 WL 752730, at *1 (S.D.N.Y. Dec. 4,
1997) (collecting cases). Put simply, "[c]ourts have
uniformly held that defendants are not prejudiced under Rule
41(a)(2) by having to face trial in state court."
Id., Accordingly, the Court dismisses
Plaintiffs' CFAA claim with prejudice and without
Court next turns to Plaintiffs' motion to remand. A civil
action brought in state court may be removed to a federal
district court "only if it could have originally been
commenced in federal court on either the basis of federal
question jurisdiction or diversity jurisdiction."
Philip v. Deutsche Bank Nat, Tr. Co., No. 1
l-cv-8960 (PGG), 2012 WL 2354242, at *2 (S.D.N.Y. June 20,
2012) (quoting A udi of Smithtown, Inc. v. Volkswagen of
Am., Inc., No. 08-cv-1773 (JFB) (AKT), 2009 WL 385541,
at *3 (E.D.N.Y. Feb. 11, 2009) and citing 28 U.S.C. §
1441(a)). If a case is removed and a federal district court
determines that it lacks jurisdiction over the matter, it
must be remanded. See 28 U.S.C. § 1447. When