Buchheim v. Fenton
- Proceeding
- district
- Area
- civil
- Panel
- Myron James Lorenz (author)
Analysis
The court considered a joint motion by the parties to dismiss a shareholder derivative action without prejudice and without providing notice to other shareholders. The court denied the motion without prejudice, finding that the parties failed to cite legal authority for waiving the notice requirement under Rule 23.1(c) and failed to provide evidentiary support that the dismissal would not prejudice other shareholders.
| What the court decided | The model |
|---|---|
Joint Motion to Dismiss Action Denied“For the above reasons, the Court DENIES the joint motion WITHOUT PREJUDICE.” | agree with court The court correctly identified that Federal Rule of Civil Procedure 23.1(c) requires notice of a proposed voluntary dismissal in a derivative action. The court properly noted that the parties' assertions in the motion were not evidence and that they failed to cite authority for dispensing with the notice requirement or to show a lack of prejudice to other shareholders. Denying the motion without prejudice is a procedurally sound response to a deficient motion. |
The order itself: sound — The order correctly applies the text of Rule 23.1(c) and identifies the specific deficiencies in the parties' motion: lack of legal authority for waiving notice and lack of evidentiary support for the absence of prejudice. The citations to Ninth Circuit precedent regarding the weight of statements in motions are appropriate. The order is concise and directly addresses the legal requirements for the motion.
Opinion
1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 GARY BUCHHEIM AND BRYAN Case No.: 3:21-cv-766-L-BGS
10 FLOAT,
11 Plaintiffs, ORDER ON JOINT MOTION TO 12 v. DISMISS ACTION 13 DENNIS FENTON, et al., 14 Defendants, 15 AND 16 17 ANAPTYSBIO, INC., 18 19 Nominal Defendant. 20 Pending before the Court is the parties’ joint motion to dismiss this derivative 21 action without prejudice. (ECF 30). 22 Under Federal Rule of Civil Procedure 23.1(c), “notice of a proposed . . . voluntary 23 dismissal . . . must be given to shareholders or members in the manner that the court 24 orders.” (emphasis added). 25 Here, the parties assert notice “is unnecessary because the stipulated dismissal is 26 without prejudice; no compensation or consideration in any form has passed directly or 27 28 | |}indirectly from any of the Defendants to Plaintiffs or Plaintiffs’ counsel; no promise to 2 || give any such compensation or consideration has been made; and the dismissal is without 3 || prejudice to the ability of AnaptysBio or other AnaptysBio shareholders to pursue 4 claims.” (ECF 30). 5 But the parties failed to cite any legal authority as to dispensing with Rule 23.1’s 6 || notice requirement. Their support for the request is also merely statements in a motion, 7 ||not evidence (e.g., declarations). See, e.g., U.S. v. Zermeno, 66 F.3d 1058, 1062, (9th Cir. 8 || 1995) (assertions made in pleadings are not considered evidence); Singh v. .N.S., 213 9 || F.3d 1050,1054 n.8 (9th Cir. 2000) (“statements in motions are not evidence and are 10 therefore not entitled to evidentiary weight.”’) (internal quotation marks and citation 11 |}omitted). And they failed to show the proposed dismissal will not prejudice other 12 shareholders (e.g., statute of limitations). See Cramer v. Gen. Tel. & Elecs. Corp., 582 13 || F.2d 259, 269 (3d Cir. 1978). 14 For the above reasons, the Court DENIES the joint motion WITHOUT 15 ||} PREJUDICE. Any subsequent request for dismissal without notice to shareholders must 16 || provide the relevant legal authority, analysis, and support. 17 IT ISSO ORDERED. 18 Dated: December 7, 2021 1 fee fp 20 H . James Lorenz, United States District Judge 22 23 24 25 26 27 28