Lee v. CVS Pharmacy, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LISA L. LEE, on behalf of herself and ) Case No.: 3:20-cv-01923-BEN-DEB all others similarly situated,, ) 12 ) ORDER: Plaintiff, 13 ) v. ) (1) DENYING MOTION TO 14 ) DISMISS AS MOOT CVS PHARMACY, INC., a Rhode 15 ) Island corporation; CVS HEALTH ) (2) GRANTING IN PART JOINT 16 CORPORATION, INC., a Delaware ) MOTION TO DISMISS corporation; and DOES 1 through 100, 17 ) inclusive, ) [ECF No. 5, 7] 18 Defendant. ) 19 ) 20 I. INTRODUCTION 21 Plaintiff Lisa L. Lee, on behalf of herself and all others similarly situated (“Plaintiff”), 22 brought this civil antitrust and unfair competition class action against Defendants CVS 23 PHARMACY, INC., a Rhode Island Corporation, and CVS HEALTH CORPORATION, 24 INC., a Delaware Corporation (collectively, “Defendants”). ECF No. 1. 25 Before the Court are (1) Defendants’ Motion to Dismiss, ECF No. 5, and (2) the Joint 26 Motion to Dismiss the Case brought by Plaintiff and Defendants, ECF No. 7. 27 After considering the papers submitted, supporting documentation, and applicable 28 law, the Court GRANTS IN PART the Motion. 1 II. BACKGROUND 2 On August 3, 2020, Plaintiff filed this putative class action in the San Diego Superior 3 Court against Defendants, alleging claims for relief for (1) violation of the Cartwright Act, 4 (2) violation of California’s Unfair Competition Law, and (3) injunctive relief for 5 violations of the Consumer Legal Remedies Act. ECF No. 1. 6 On September 25, 2020, Defendant filed a Notice of Removal. ECF No. 1. On 7 October 2, 2020, Defendants filed a Motion to Dismiss for lack of jurisdiction and failure 8 to state a claim. ECF No. 5. However, on October 19, 2020, the parties filed a Joint Motion 9 to Dismiss the case, pursuant to which the parties ask that (1) “[t]he individual claims of 10 Plaintiff against Defendants shall be dismissed in their entirety with prejudice pursuant to 11 Fed. R. Civ. P. 41(a)(1) and (2),” (2) “[t]he class claims against Defendants shall be 12 dismissed in their entirety without prejudice pursuant to Fed. R. Civ. P. 41(a)(1) and (2),” 13 (3) “[e]xcept as otherwise agreed upon, each party shall bear his/her/its own costs and 14 attorneys’ fees,” and (4) “[t]he dismissal shall not operate as an adjudication on the merits.” 15 ECF No. 7. 16 III. LEGAL STANDARD 17 Rule 41(a) of the Federal Rules of Procedure (“Rule 41(a)”) governs voluntary 18 dismissal of lawsuits. If a plaintiff wants to dismiss a case without a court order, the 19 plaintiff may do so pursuant to Rule 41(a)(1), “[s]ubject to Rules 23(e), 23.1(c), 23.2, and 20 66 . . . by filing” either (1) “a notice of dismissal before the opposing party serves either an 21 answer or a motion for summary judgment” or (2) “a stipulation of dismissal signed by all 22 parties who have appeared.” FED. R. CIV. P. 41(a)(1); see also Cannon ex rel. Bridgepoint 23 Educ., Inc. v. Clark, No. 13CV2645 JM NLS, 2015 WL 4624069, at *3 (S.D. Cal. Aug. 3, 24 2015) (noting that “voluntary dismissal under Federal Rule of Civil Procedure 25 41(a)(1)(A)(i) is subject to Federal Rule of Civil Procedure 23.1(c), which provides that a 26 derivative action can be voluntarily dismissed only with the court’s approval.”). Where a 27 plaintiff does not proceed by filing a notice or stipulation of dismissal, “an action may be 28 dismissed at the plaintiff’s request only by court order, on terms that the court considers 1 proper.” FED. R. CIV. P. 41(a)(2). Unless the order states otherwise, dismissal under Rule 2 41(a)(2) is without prejudice. Id. 3 A dismissal without a court order under Rule 41(a)(1) is subject to Rule 23(e) of the 4 Federal Rules of Civil Procedure (“Rule 23(e)”), governing dismissal of class actions. Rule 5 23(e) provides that any claims arising out of either a (1) “certified class” or (2) “class 6 proposed to be certified for purposes of settlement . . . may be settled, voluntarily 7 dismissed, or compromised only with the court’s approval.” FED. R. CIV. P. 23 (emphasis 8 added); see also In re Syncor ERISA Litigation, 516 F.3d 1095, 1100 (9th Cir. 2008) (“The 9 purpose of Rule 23(e) is to protect the unnamed members of the class from unjust or unfair 10 settlements affecting their rights.”). The result of Rule 23(e) is that certified class claims 11 or claims proposed for certification for settlement purposes cannot be dismissed under Rule 12 41(a)(1) because Rule 41(a)(1): (1) allows for dismissals without a court order and (2) is 13 subject to Rule 23(e), which requires a court order for dismissal. 14 IV. DISCUSSION 15 In ordinary non-class litigation, “parties are free to settle their disputes on their own 16 terms, and plaintiffs may voluntarily dismiss their claims without a court order.” Frank v. 17 Gaos, 139 S. Ct. 1041, 1046 (2019) (citing FED. R. CIV. P. 41(a)(1)(A)). In a class action, 18 however, whether court approval is required depends on whether case has been certified. 19 Compare id. at 1046 (“By contrast, in a class action, the ‘claims, issues, or defenses of a 20 certified class—or a class proposed to be certified for purposes of settlement—may be 21 settled, voluntarily dismissed, or compromised only with the court’s approval.’”) (citing 22 FED. R. CIV. P. 23(e)) with Employers-Teamsters Local Nos. 175 & 505 Pension Tr. Fund 23 v. Anchor Capital Advisors, 498 F.3d 920, 923-24 (9th Cir. 2007) (holding that putative 24 class members of a non-certified class lack standing to appeal an order appointing the lead 25 plaintiff who voluntarily dismissed the case before certification because without a certified 26 class, only the parties to the case have standing). 27 Previously, Rule 23 was written in such a manner that it was unclear whether court 28 approval was required for dismissal of individual claims in a case that was originally filed 1 as a class action, even if the settlement and dismissal did not pertain to the putative class 2 claims. See, e.g., Diaz v. Tr. Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 1989) 3 (interpreting the previous version of Rule 23 to require court approval even before 4 certification of a class). However, in 2003, the Congress revised Rule 23 to make clear 5 that court approval is only required in a putative class action where the plaintiff seeks to 6 approve a settlement of both individual and class claims. See, e.g., Gesberg v. LinkUs 7 Enterprises, Inc., No. 208CV02428MCECMK, 2009 WL 10690922, at *1-2 (E.D. Cal. 8 Mar. 27, 2009) (noting that the current version of Rule 23(e) reflects amendments resolving 9 the ambiguity over whether the previous rule’s requirement of court approval for class 10 action settlements extended “to require court approval of settlements with putative class 11 representatives that resolved only individual claims”) (citing FED. R. CIV. P 23, Advisory 12 Committee’s notes (2003 amendment)). In such a case, the Court must certify the class 13 prior to approving the settlement and dismissal of the class claims. Id. However, where 14 the settlement and dismissal only pertain to the class representative’s individual claims, 15 court approval is not required to dismiss the individual claims as the putative class claims, 16 having not yet been certified, have not come into existence; thus, there is nothing to 17 dismiss. Ripley v. Bridgestone Retail Operations, LLC, No. C09-1482 RSM, 2010 WL 18 11684294, at *2 (W.D. Wash. Sept. 2, 2010) (providing that “prior to certification, the 19 named plaintiffs may dismiss class claims without approval” because “Rule 23(e) does not 20 provide the district court with any supervisory authority over such dismissals, nor does it 21 require notice to the absent class members”) (citing MOORE’S FEDERAL 22 PRACTICE 3d, § 23.64[2][a], pp. 23-316:16 – 23-316:17 (2007)). 23 In this case, the parties jointly seek to dismiss individual claims in the putative class 24 action under both Rule 41(a)(1) and 41(a)(2) with prejudice. The parties advise that 25 “Plaintiff has not sought class certification, a class was not certified, and no notice was sent 26 to a prospective class.” ECF No. 7 at 2:7-10. Thus, “[t]his is a putative class action, but 27 no class has been certified, nor is certification being proposed for purposes of 28 settlement.” Allred v. Chicago Title Co., No. 19CV2129-LAB (AHG), 2020 WL 5847550, *1 (S.D. Cal. Oct. 1, 2020) (“Although the motion seeks dismissal of all claims with 2 prejudice, the Court construes this as a request to dismiss Plaintiffs’ own claims with 3 prejudice, and putative class claims without prejudice.”) (citing FED. R. Civ. P. 23(e)). 4 “TB]ecause no class has been certified in this case, Rule 23 does not mandate either Court 5 approval of the instant setthement or notice to putative class members.” As a result, the © Court finds no reason to deny the Joint Motion. In granting the Joint Motion, which 7 || dismisses the entire case, the Court finds the Motion to Dismiss preceding it moot. See, 8 e.g., Tur v. YouTube, Inc., 562 F.3d 1212, 1214 (9th Cir. 2009) (concluding “that ? || an issue is moot when deciding it would have no effect within the confines of the □□□□□□□□ 10 |lv. ORDER I] Pursuant to Rule 41(a), the parties jointly move to dismiss this action with prejudice 12 as to Plaintiff Lisa L. Lee’s individual claims and without prejudice as to the class claims. 13 Having read and considered the Joint Motion submitted by Plaintiff and Defendants, and 14 good cause appearing, the Joint Motion is GRANTED IN PART as follows: 15 1. Plaintiff Lisa L. Lee’s individual claims against Defendants are dismissed in 16 || their entirety as to all claims for relief with prejudice pursuant to Rule 41(a)(2). 17 2. The Joint Motion is DENIED as to the putative class claims. Although this 18 || case was filed as a putative class action, Plaintiff did not seek class certification, and as 19 such, the Court did not certify the class. Therefore, with no certified class claims having 20 || come into existence, any dismissal will not affect putative class members’ claims. 21 3. Each party is to bear its own costs, fees, and expenses. 22 4. This dismissal shall not operate as an adjudication on the merits except to the 23 || extent authorized by Rule 41(a)(1)(B). 24 5. Defendants’ Motion to Dismiss, ECF No. 5, is DENIED as moot due to the 25 |! Court’s dismissal of the entire case. 26 6. The Clerk of the Court is directed to close this case. 27 IT IS SO ORDERED. □ 28 || DATED: January 28, 2021 HON. ROGER T. BENITE-