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Zora Analytics, LLC v. Sakhamuri

United States District Court, S.D. California

March 27, 2014

ZORA ANALYTICS, LLC, a California Limited Liability Company, Plaintiff,
v.
SRIKANTH SAKHAMURI, an individual; CIGNITI, INC., a Texas corporation; and DOES 1 through 10 inclusive; Defendants.

ORDER: (1) GRANTING DEFENDANT SAKHAMURI'S EX PARTE MOTION TO VACATE PLAINTIFF'S NOTICE OF VOLUNTARY DISMISSAL PURSUANT TO RULE 41(a)(1)(A)(i); (2)VACATING PLAINTIFF'S NOTICE OF VOLUNTARY DISMISSAL; (3) GRANTING DEFENDANT SAKHAMURI'S UNOPPOSED MOTION TO DISMISS WITH PREJUDICE; (4) DENYING PLAINTIFF'S VOLUNTARY MOTION TO DISMISS PURSUANT TO RULE 41(a)(2); (5) DENYING DEFENDANT SAKHAMURI'S REQUEST FOR ATTORNEYS' FEES; AND (6) GRANTING DEFENDANT SAKHAMURI'S REQUEST FOR COSTS UNDER RULE 54(d)(1)

JEFFREY T. MILLER, District Judge.

On November 11, 2013, Plaintiff Zora Analytics, LLC ("Zora Analytics") filed a notice of voluntary dismissal pursuant to Federal Rule of Civil Procedure ("Rule") 41(a)(1)(A)(i). Dkt. No. 37. On November 26, 2013, Defendant Srikanth Sakhamuri ("Sakhamuri") filed an ex parte motion to vacate Zora's notice of voluntary dismissal. Dkt. No. 38. In response, Zora filed an opposition to Sakhamuri's ex parte motion, as well as a motion for voluntary dismissal pursuant to 41(a)(2). Dkt. Nos. 40 and 41, respectively. Sakhamuri then filed an opposition to Zora's motion and a reply to its own ex parte motion. Dkt. Nos. 42 and 43, respectively. Zora did not file a reply to Sakhamuri's opposition. For the reasons set forth below, (1) Defendant Sakhamuri's ex parte motion to vacate Plaintiff Zora's notice of voluntary dismissal, Dkt. No. 38, is GRANTED; (2) Plaintiff Zora's notice of voluntary dismissal pursuant to Rule 41(a)(1)(A)(i), Dkt. No. 37, is VACATED; (3) Defendant Sakhamuri's unopposed motion to dismiss the third amended complaint, Dkt. No. 35, is GRANTED WITH PREJUDICE; (4) Plaintiff Zora's motion for voluntary dismissal pursuant to Rule 41(a)(2), Dkt. No. 41, is DENIED AS MOOT; (5) Defendant Sakhamuri's request for attorneys' fees is DENIED; and (6) Defendant Sakhamuri's request for costs is GRANTED in an amount to be taxed by the Clerk of Court.

BACKGROUND

On November 26, 2012, Zora filed a complaint against Sakhamuri in state court. On March 18, 2013, Sakhamuri filed an answer to Zora's complaint in state court and also removed the matter to this court based upon federal diversity jurisdiction. Zora filed an amended complaint in federal court on April 4, 2013, asserting allegations against Sakhamuri and an additional defendant, Cigniti, Inc. ("Cigniti") (and together with Sakhamuri, "Defendants"). Zora asserted four causes of action against Defendants: permanent injunction; violations of CUTSA; breach of written contract; and violations of the Lanham Act, 115 U.S.C. § 1125(a). Zora also asserted a fifth cause of action against Cigniti only for negligent hiring/supervision/training.

On April 25, 2013, Sakhamuri filed an answer to Zora's amended complaint. Cigniti then submitted a motion to dismiss Zora's complaint as it related to Cigniti pursuant to Rule 12(b)(6) for failure to state a claim on May 1, 2013. On June 18, 2013, the court granted Cigniti's motion to dismiss with leave to amend.

On July 12, 2013, Zora filed a second amended complaint in which Zora asserted three causes of action against Defendants: violations of the Lanham Act, 115 U.S.C. § 1125(a); intentional interference with prospective economic advantage; and violations of Unfair Business Practices, Cal. Bus. & Prof. Code § 17200. Zora also asserted two causes of action against Cigniti alone: breach of written contract and negligent supervision. On August 2, 2013, Defendants filed motions to dismiss Zora's claims. On September 9, 2013, the court granted Defendants' motions with leave to amend.

Zora filed a third amended complaint on October 15, 2013. That same day, Zora and Cigniti filed a joint motion to dismiss Cigniti from this action with prejudice. The court granted the parties' joint motion on October 23, 2013. In the third amended complaint, Zora re-alleged these causes of action against Sakhamuri: violations of Lanham Act, 115 U.S.C. § 1125(a); intentional interference with prospective economic advantage; and violations of Unfair Business Practices, Cal. Bus. & Prof. Code § 17200. Zora also alleged a breach of fiduciary duty cause of action based on allegations against Sakhamuri, alleging that he was Zora's agent more than a year after Sakhamuri ceased working on any of Zora's projects. On October 30, 2013, Sakhamuri filed a motion to dismiss the third amended complaint for failure to state a claim. Zora did not file a response to Sakhamuri's motion to dismiss, instead filing a notice of voluntary dismissal of the case without prejudice pursuant to Rule 41(a)(1)(A)(i) on November 21, 2013.

On November 26, 2013, Sakhamuri filed an ex parte motion to vacate Zora's notice of voluntary dismissal. Sakhamuri objected to the dismissal because Rule 41(a)(1)(A)(i) only permits a plaintiff to voluntarily dismiss its action without a court order before a defendant serves an answer in the case. As previously noted, Sakhamuri filed an answer to Zora's initial complaint in state court and an answer to Zora's amended complaint in this court. On December 9, 2013, Zora filed a response to Sakhamuri's ex parte motion, as well as a motion for voluntary dismissal pursuant to Rule 41(a)(2). Sakhamuri submitted a response to Zora's motion on January 27, 2014, in addition to a reply brief pertaining to its own ex parte motion on February 3, 2014.

EX PARTE MOTION TO VACATE VOLUNTARY DISMISSAL

In Sakhamuri's ex parte motion to vacate Zora's notice of voluntary dismissal pursuant to Rule 41(a)(1)(A)(i), Sakhamuri makes three primary arguments. First, Sakhamuri contends Zora's notice of voluntary dismissal is improper based upon Sakhamuri having already served an answer this case. See Fed.R.Civ.P. 41(a)(1)(A)(i). Second, Sakhamuri argues he is entitled to dismissal of the action with prejudice in light of Zora having had three opportunities to amend its complaint and Sakhamuri's pending motion to dismiss the third amended complaint at the time Zora filed its notice of dismissal. Noting that Zora opted not to file a response to Sakhamuri's motion to dismiss the third amended complaint, Sakhamuri contends he is nevertheless entitled to have the merits of the motion ruled upon by the court because he incurred significant costs and fees in preparing the motion. Third, Sakhamuri argues he should be entitled to file a motion for attorneys' fees and costs pursuant to applicable statutes, regardless of whether the court rules upon Sakhamuri's motion to dismiss the third amended complaint or, alternatively, orders dismissal of the case under Rule 41(a)(2). In either of these circumstances, Sakhamuri contends he is entitled to seek payment of reasonable fees and costs.

In light of Sakhamuri's answer to the amended complaint and the lack of a stipulation for dismissal between the parties, Zora concedes that its notice of voluntary dismissal should be vacated. For this reason, Zora now seeks a court order dismissing the case pursuant to Rule 41(a)(2) in a concurrently filed motion to dismiss. Fed.R.Civ.P. 41(a)(2). In its response, Zora agrees with Sakhamuri that the case should be dismissed with prejudice and has requested dismissal with prejudice in its pending motion. However, Zora argues Sakhamuri's argument regarding the attorneys' fees and costs is premature, particularly because Sakhamuri failed to provide any California authority explicitly authorizing the award of attorneys' fees in this instance. For these reasons, Zora argues that Sakhamuri's ex parte application should be denied, and Zora's concurrently filed motion for voluntary dismissal under Rule 41(a)(2) should be granted.

In sum, the parties agree that Zora's notice of dismissal pursuant to Rule 41(a)(1)(A)(i) was inappropriate in light of Sakhamuri having filed an answer in this case. Accordingly, the court grants Sakhamuri's ...


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