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Moskowitz v. American Savings Bank, F.S.B.

United States District Court, D. Hawaii

October 30, 2017

CRAIG MOSKOWITZ, on behalf of himself and others similarly situated, Plaintiff,
v.
AMERICAN SAVINGS BANK, F. S . B ., Defendant.

         FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART DEFENDANT AMERICAN SAVINGS BANK, F.S.B.'S MOTION FOR RULE 41(D) COSTS AND STAY OF PROCEEDINGS FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART DEFENDANT AMERICAN SAVINGS BANK, F.S.B.'S MOTION FOR RULE 41(D) COSTS AND STAY OF PROCEEDINGS

          Kevin S.C. Chang United States Magistrate Judge.

         Before the Court is Defendant American Savings Bank, F.S.B.'s ("Defendant") Motion for Rule 41(d) Costs and Stay of Proceedings, filed July 19, 2017. On September 25, 2017, Plaintiff Craig Moskowitz ("Plaintiff") filed an Opposition.[1]Defendant filed a Reply on October 2, 2017.

         This matter came on for hearing on October 25, 2017. Justin Brackett, Esq., appeared, and Aytan Bellin, Esq., appeared by phone, on behalf of Plaintiff. Kevin Herring, Esq., and Michael Vieira, Esq., appeared, and John Doroghazi, Esq., appeared by phone, on behalf of Defendant. After careful consideration of the parties' submissions, the applicable law, and the arguments of counsel, the Court HEREBY RECOMMENDS that the Motion be GRANTED IN PART AND DENIED IN PART for the reasons articulated below.

         BACKGROUND

         A. The Connecticut Action

         On February 21, 2017, Plaintiff filed an action in the U.S. District Court for the District of Connecticut - Moskowitz v. American Savings Bank, F.S.B., Civil No. 3:17-00307 AWT ("Moskowitz I") - alleging violations of the Telephone Consumer Protection Act ("TCPA"). Mot., Ex. B. Plaintiff filed a Motion for Class Certification and for a Temporary Stay of Further Proceedings on That Motion concurrently with the complaint. Id., Ex. D.

         On March 10 and April 6, 2017, Defendant filed Motions for Extension of Time to Plead. Id., Exs. F & G.

         On April 21, 2017, Defendant filed a Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2). Id., Ex. E.

         On May 15, 2017, Plaintiff filed a Notice of Voluntary Dismissal. Id., Ex. H.

         B. The Present Action

         On June 23, 2017, Plaintiff commenced this action, asserting the same claims against Defendant as in Moskowitz I. Indeed, the Complaint is identical save for two changes: 1) paragraph 6 was edited to identify this district as the proper venue because it is where Defendant resides[2] and 2) a date in paragraph 11 was edited from 2015 to 2016. Compl. at ¶¶ 6 & 11.

         Defendant subsequently filed this Motion and a Motion to Stay Pending Decision of D.C. Circuit.

         DISCUSSION

         Defendant requests its fees and costs incurred in Moskowitz I pursuant to Rule 41(d) of the Federal Rules of Civil Procedure ("FRCP"). Plaintiff counters that attorneys' fees are never available under FRCP 41(d) and alternatively, that fees are only recoverable under FRCP 41(d) when the statute underlying the cause of action provides for them.

         FRCP 41(d) provides:

(d) Costs of a Previously Dismissed Action. If a plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant, the court:
(1) may order the plaintiff to pay all or part of the costs of that previous action; and
(2) may stay the proceedings until the plaintiff has complied.

Fed. R. Civ. P. 41(d). For this provision to apply, the parties must be the same in both actions and the claims in the new action must be the same or based upon the same claims in the first action. Id. FRCP 41(d) confers broad discretion upon courts to order stays and payment of costs, though neither is mandatory. Platinum Logistics, Inc. v. Platinum Cargo Logistics, Inc., 3:15- CV-617-CAB-KSC, 2015 WL 11921401, at *4 (S.D. Cal. Sept. 15, 2015) (citing Esguivel v. Arau, 913 F.Supp. 1382, 1386 (CD. Cal. 1996)). Although FRCP 41(d) is intended "to serve as a deterrent to forum shopping and vexatious litigation, " id. (quoting Esguivel, 913 F.Supp. at 1386) (quotations omitted), it does not require a showing of subjective bad faith. Id. (quoting Esguivel, 913 F.Supp. at 1388). "Ultimately, [t]he purpose of Rule 41(d) is to protect defendants from the harassment of repeated lawsuits by the same plaintiff on the same claims.'" Id. (quoting Holt v. Kormann, No. SACV 11-01047 DOC, 2012 WL 5829864, at *2 (CD. Cal. Nov. 15, 2012)) (alteration in original) .

         The Court, exercising its discretion, finds that FRCP 41(d) applies here because 1) Plaintiff dismissed his previous action, Moskowitz I; 2) both Plaintiff and Defendant were parties in the previous action; and 3) Plaintiff has filed a substantively identical Complaint in this action.

         A. Attorneys' Fees and Costs Are Recoverable Pursuant to FRCP 41(d)

         Plaintiff argues that fees are not recoverable under FRCP 41(d). This Court has twice determined that FRCP 41(d) includes both expenses and attorneys' fees that were reasonably incurred in the prior case and will not contribute to the defense of this case. Aloha Airlines, Inc. v. Mesa Air Group, Inc., No. 07-00007 DAE-KSC, 2007 WL 2320672, at *4 (D. Haw. Aug. 10, 2007); Uy v. HSBC Bank USA, Nat. Ass'n, No. CIV. 14-00261 HG, 2014 WL 6471331, at *2 (D. Haw. Nov. 3, 2014), report and recommendation adopted, 2014 WL 6471747 (D. Haw. Nov. 18, 2014) .[3] Plaintiff has not articulated a legitimate basis to revisit these decisions. As with the plaintiff in Aloha Airlines, Plaintiff relies on Rogers v. Walmart Stores, Inc., 230 F.3d, 868 (6th Cir. 2000), to support his contention. However, this Court already considered and rejected the reasoning underlying the Rogers decision. Aloha Airlines, 2007 WL 2320672, at *3 (citing Rogers as a court that disallows attorneys fees under FRCP 41(d), and instead following the majority of courts that award attorneys' fees under FRCP 41(d)) .

         Plaintiff alternatively argues that fees are only recoverable when the statute underlying the cause of action provides for them and he relies exclusively on Azizian v. Federated Dept. Stores, Inc., 499 F.3d 950 (9th Cir. 2007) and Fourth Circuit and Seventh Circuit cases[4] for this proposition. Azizian is wholly irrelevant. The Azizian decision pertains to "costs on appeal" pursuant to Federal Rule of Appellate Procedure ("FRAP") 7 and consequently has no applicability here.[5] Demonstrating a fundamental misunderstanding of the law, Plaintiff criticizes this Court for failing to "even mention" Azizian in its Uy decision and proffers that Uy and Aloha Airlines are no longer good law and may not be followed in light of Azizian. Opp'n at 8-9. Applying Plaintiff's flawed logic, any case, pertinent or not, could upend valid, existing case law. The Azizian holding has no bearing on any FRCP 41(d) rulings, and Plaintiff could not identify a single case that discussed it in connection with FRCP 41(d), much less extended it to FRCP 41(d) .

         The Fourth and Seventh Circuit cases cited by Plaintiff do not compel a different result than Aloha Airline and Uy, as this Court is not bound to follow them. Putting that aside, however, adopting a rule that fees could only be awarded under FRCP 41(d) if the statute underlying the cause of action provides for them, would cause perverse results. It would allow plaintiffs whose conduct was intended to be deterred by FRCP 41(d) to escape fee awards simply because fees are unavailable with respect to the underlying claims. Given that the purpose of FRCP 41(d) is to deter vexatiousness and forum shopping and to protect defendants from the harassment of repeated lawsuits by the same plaintiff on the same claims, fees should not be predicated on the availability of fees as to the underlying claims. They should be predicated on whether or not a "plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant, " as contemplated by FRCP 41(d).

         FRCP 41(d) is collateral to the underlying claims in a case, unlike other cost provisions such as FRAP 7 and 39, and FRCP 68. It is akin to a sanction, unconnected to the actual claims presented in the litigation, and concerns a plaintiff's conduct related to litigation, versus a party's liability as to the claims in a given case. Appellate costs, like FRCP 54 fees and costs, are awarded to prevailing parties. In those instances, the award of fees and costs is tied to the claims in a respective action, and it logically follows that the statute underlying the cause of action must provide for fees and costs.

         For the reasons stated above, the Court concludes, as it has before, that FRCP 41(d) permits the recovery of both fees and costs. The Court does not impose a requirement that fees are only available when authorized by the statutes/provisions governing the underlying claims.

         B. Defendant Need Not Establish Bad Faith or Vexatiousness

         Plaintiff asserts that Defendant has utterly failed to demonstrate that he "acted in bad faith, vexatiously, wantonly, or for oppressive purpose." Opp'n at 9. However, as already noted, a showing of subjective bad faith is not required. Neither is vexatiousness the standard applied by the Court with respect to FRCP 41(d). Uy, 2014 WL 6471331, at *2. FRCP 41(d) is meant to serve as a deterrent to forum shopping and vexatious litigation, but it does not follow that vexatiousness or forum shopping are preconditions to an FRCP 41(d) award.

         The pertinent facts in this case are uncontested: Plaintiff commenced Moskowitz I against Defendant; Defendant filed a motion to dismiss for lack of personal jurisdiction; Plaintiff, without responding to the motion to dismiss, voluntarily dismissed Moskowitz I; and following the dismissal, Plaintiff filed an identical lawsuit against Defendant here. This sequence of events falls squarely within FRCP 41(d) and is precisely the type of situation covered by FRCP 41(d). To wit, Plaintiff has "commence[d] an action based upon or including the same claim[s] [as brought in a previously dismissed action] against the same defendant." Esquivel, 913 F.Supp. at 1387 (quotations omitted) (alterations in original).

         Plaintiff submits that he reasonably believed (and still believes) that specific jurisdiction existed with respect to Defendant in Connecticut. He nevertheless dismissed Moskowitz X and elected to refile in this district to avoid questions concerning the existence of personal jurisdiction. According to Plaintiff, his voluntary dismissal saved time and money and conserved the resources of the Connecticut district court as well as the Second Circuit.[6] These arguments are unavailing.

         A plaintiff "bears the responsibility of determining the appropriate forum in which to prosecute her case . . . and of establishing that personal jurisdiction exists." Id. (citing Decker Coal Co. V. Commonwealth Edison Co., 805 F.2d 834, 839 (9th Cir. 1986); Data Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1285 (9th Cir. 1977)). Plaintiff's dismissal of Moskowitz X (without responding to Defendant's motion to dismiss) and subsequent refiling of the identical action here arguably demonstrates some recognition that Moskowitz I "was vulnerable on the grounds asserted in [Defendant's] motion." Id. Plaintiff simultaneously defends the propriety of jurisdiction in Connecticut while acknowledging that during his review of Defendant's motion to dismiss, he

became aware of two non-binding district court cases from outside of the Second Circuit that held that notwithstanding the state in which a defendant's call to a cell phone is received, there is no specific jurisdiction over the defendant in that state if the number of [sic] receiving cell phone contains an out-of-state area code.

Opp'n at 10-11. Thus, despite Plaintiff's claim that his decision to voluntarily dismiss Moskowitz I was primarily motivated by a desire to conserve resources and minimize costs, it is equally as plausible that Plaintiff sought ...


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