The opinion of the court was delivered by: SPENCER WILLIAMS
Plaintiff Velma Burnette brings this action against Robert Godshall and others ("Defendants") alleging several causes of action arising out of an altercation she had with Mr. Godshall, a co-employee at Lockheed. After Plaintiff amended her complaint to add a cause of action under RICO, 18 U.S.C. § 1962 (b) and (c), Defendants removed the case to this Court. Plaintiff now moves to dismiss the RICO claim and to remand the action to state court. Also, both Plaintiff and Defendants move for Rule 11 sanctions. For the reasons expressed below, Plaintiff's RICO cause of action is DISMISSED WITH PREJUDICE; Plaintiff's motion to remand is DENIED; Plaintiff's motion for sanctions is DENIED; and Defendants' motion for sanctions is GRANTED.
Plaintiff Velma Burnette was employed by defendant Lockheed Missiles & Space Co. ("Lockheed") as a reproduction equipment operator in the print shop. She complains that on February 24, 1993, defendant Robert Godshall, a non-supervisory co-employee, assaulted her during a dispute over the use of a copier. Plaintiff claims that when she refused to interrupt a copy job to make copies for Godshall without authorization from her "lead man," Godshall pushed her against the table, "either severely injuring her arm, or severely aggravating a preexisting injury," and inflicting "severe emotional distress" and psychological damage. Complaint, P 10. Her supervisor took her to the hospital after the incident.
In reference to Godshall's conduct, Plaintiff filed a grievance on March 17, 1993, under the collective bargaining agreement ("CBA") between Lockheed and her union, the International Association of Machinists & Aerospace Workers. Her grievance, which was ultimately denied, alleged that Lockheed violated sections of the CBA providing that management rights decisions are subjected to a grievance and arbitration procedure, and that Lockheed agreed to maintain a safe workplace. In addition, Plaintiff filed a complaint in state court bringing causes of action for (1) assault and battery, (2) gross negligence of Lockheed amounting to willful disregard of her well-being, (3) conspiracy to oppress, harass and intimidate union members, and (4) violation of her statutory rights under California law, specifically Labor Code section 923 and Civil Code section 51.7.
Plaintiff filed an amended complaint in which she added a fifth cause of action for violation of the Federal Racketeer Influenced and Corrupt Organizations Act (RICO). 18 U.S.C. § 1962(b) and (c). Thereafter, Defendants removed the action to this Court, based upon (1) the pleaded statutory violation of RICO, and (2) Section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, which preempts state law claims which are founded on rights created by collective bargaining agreements, or which require interpretation of such agreements.
After the case was removed, Plaintiff notified Defendants that two recently decided cases, involving allegedly similar causes of action brought by unionized Lockheed employees against the corporation, had been remanded back to state court for lack of federal jurisdiction. Casey v. Goodness, unpublished, #C-92-20323 JW, (N.D.Cal. October 8, 1992); Hayden v. Reickerd, 957 F.2d 1506 (9th Cir. 1992). Plaintiff argues that these decisions are determinative in the present case, and that Defendants' defenses are barred by the doctrine of collateral estoppel. As such, she offered to stipulate to the dismissal of the RICO cause of action, without prejudice, if Defendants would stipulate to remand of the case to state court. Defendants responded with the following conditions of agreement: (1) that Plaintiff dismiss her RICO cause of action with prejudice, (2) that she agree to forego pursuing any rights and remedies under federal law, and (3) that Defendants retain rights to assert that any of Plaintiff's claims are preempted by federal law. These conditions are consistent with Defendants' argument that removal is proper because of both the pleaded RICO cause of action and the "gross negligence" cause of action, which they contend is not a state tort claim but a contractual claim arising under the CBA. Plaintiff firmly rejected Defendants' counteroffer and their suggestion that her claims are preempted by federal law.
Plaintiff now requests that this Court dismiss her fifth cause of action without prejudice, remand the action to California Superior Court, and impose sanctions on Defendants pursuant to Fed.R.Civ.P. 11 and 28 U.S.C. § 1447(c). Defendants oppose the motions and, in turn, request that Rule 11 sanctions be imposed on Plaintiff.
I. DISMISSAL OF FIFTH CAUSE OF ACTION (RICO)
In her amended motion, Plaintiff seeks to dismiss the fifth cause of action (civil RICO claim) without prejudice. Even though Defendants have filed an answer in this case, and have refused to stipulate to a voluntary dismissal without prejudice, this Court has the discretion to grant Plaintiff's motion and may do so "upon such terms and conditions as [it] deems proper." Fed.R.Civ.P. 41(a)(2). In exercising its discretion, the Court must make three separate determinations: (1) whether to allow the dismissal at all; (2) whether the dismissal should be with or without prejudice; and (3) what terms and conditions, if any, should be imposed. Spencer v. Moore Business Forms, Inc., 87 F.R.D. 118, 119 (N.D.Cal. 1980).
A. Whether to Allow Dismissal
In determining whether to allow dismissal, the Court is to consider whether doing so will unfairly affect the other side. Alamance Industries, Inc. v. Filene's, 291 F.2d 142, 146 (1st Cir. 1961). Thus, courts generally allow dismissal unless defendant will suffer "some plain legal prejudice." Hamilton v. Firestone Tire & Rubber Co., 679 F.2d 143, 145 (9th Cir. 1982). However, plain legal prejudice does not result merely because defendant will be inconvenienced by having to defend in another forum. Id. Nor does it result when the dismissal may cause defendant to incur substantial expense in preparing for trial. Durham v. Florida East Coast Railway Co., 385 F.2d 366, 368 (5th Cir. 1967). The court may dismiss the claim even where plaintiff would gain a tactical advantage thereby. Hamilton, 679 F.2d at 145.
In the present case, Defendants will suffer no legal detriment if Plaintiff's RICO claim is dismissed. They have not counterclaimed or otherwise filed for affirmative relief to be sufficiently prejudiced by dismissal of the fifth cause of action. While Plaintiff may have moved to dismiss the RICO claim as a way to avoid federal jurisdiction over the action, such tactical maneuvering does not constitute sufficient prejudice to Defendants to justify refusing her motion. Therefore, Plaintiff's fifth cause of action is DISMISSED.
B. Whether Dismissal With or Without Prejudice
Rule 41(a)(2) provides that, unless otherwise specified in the court's order, the dismissal is without prejudice. Whether to allow dismissal with or without prejudice is discretionary with the court, and it may order the dismissal to be with prejudice where it would be inequitable or prejudicial to defendant to allow plaintiff to refile the action. See Paulucci v. City of Duluth, 826 F.2d 780, 783 (8th Cir. 1987). The following factors are relevant in determining whether the dismissal should be with or without prejudice: "(1) the defendant's effort and expense involved in preparing for trial, (2) excessive delay and lack of diligence on the part of the plaintiff in prosecuting the action, [and] (3) insufficient explanation of the need to take a dismissal." Id. Additionally, "the district court must weigh the relevant equities and do justice between the parties in each case, imposing such costs and attaching such conditions to the dismissal as are deemed appropriate." McCants v. Ford Motor Co., 781 F.2d 855, 857 (11th Cir. 1986).
In the present case, Defendants should not have incurred significant expense in responding to the frivolous civil RICO claim. Also, it weighs in Plaintiff's favor that the trial has not yet started and no pretrial motions were pending at the time the dismissal motion was filed. However, given the admission of Plaintiff's attorney before this Court that the RICO cause of action was added without diligent research and in an attempt to obtain treble damages, the RICO claim is DISMISSED WITH PREJUDICE.
C. Whether Conditions to be Imposed
Since the RICO cause of action has been dismissed with prejudice, costs and attorney fees cannot be awarded to Defendants because there is no future risk of litigation. Cauley v. Wilson, 754 F.2d 769, 772 (7th Cir. 1985). However, a voluntary dismissal does not limit the court's power to impose sanctions against plaintiff under Fed.R.Civ.P. 11 for filing groundless claims. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395, 110 S. Ct. 2447, 2455, 110 L. Ed. 2d 359 (1990). As discussed in Section III below, Defendants will be reimbursed for the documented cost of defending the RICO claim, including reasonable legal fees.
II. DEFENDANTS' MOTION TO REMAND TO STATE COURT
Generally, a defendant in state court has the right to remove the case to the federal court in the district where the state court proceedings are pending if the case could have been filed originally in federal court (i.e. on federal diversity or federal question grounds). 28 U.S.C. § 1441(b). The removal statute further provides that "the entire case may be removed and the district court may determine all issues ...