Cullen v. Ryvyl Inc.

Opinion

8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MARK CULLEN, Individually and on Case No. 3:23-cv-0185-GPC-SBC behalf of all others similarly situated, 12 13 Plaintiff, ORDER DISMISSING 14 v. DEFENDANT J. DREW BYELICK WITHOUT PREJUDICE 15 RYVYL INC. F/K/A GREENBOX POS, 16 BEN ERREZ, FREDI NISAN, J DREW BYELICK, BENJAMIN CHUNG, EF 17 HUTTON F/K/A KINGSWOOD 18 CAPITAL MARKETS, A DIVISION OF BENCHMARK INVESTMENTS, INC., 19 and R.F. LAFFERTY & CO., 20 Defendants. 21 22 23 24 25 26 27 1 Before the Court is Defendant J. Drew Byelick’s Request for Order 2 Dismissing All Claims Against Byelick With Prejudice. ECF No. 74. Plaintiffs 3 responded with a Request for Voluntary Dismissal of Byelick as a Defendant 4 Without Prejudice, ECF No. 75. 5 “Under Ninth Circuit precedent, when a plaintiff fails to amend his complaint 6 after the district judge dismisses the complaint with leave to amend, the dismissal is 7 typically considered a dismissal for failing to comply with a court order” under 8 Federal Rule of Civil Procedure (“Rule”) 41(b). Yourish v. California Amplifier, 9 191 F.3d 983, 986 (9th Cir. 1999). However, this principle is limited to 10 circumstances in which the plaintiff failed to take any action in response to the 11 court’s dismissal with leave to amend, such as by amending the complaint, 12 requesting an extension of time to amend, or indicating that they would not amend. 13 Edwards v. Marin Park, Inc., 356 F.3d 1058, 1065 (9th Cir. 2004); see Turley v. 14 Lezano, No. 3:22-CV-1719-GPC, 2024 WL 584436, at *1 (S.D. Cal. Feb. 13, 2024) 15 (dismissing under Rule 41(b) where a pro se detained plaintiff had not filed an 16 amended complaint “nor sought an extension of time to file”). 17 Here, Byelick argues that dismissal with prejudice for failure to comply with 18 a court order under Rule 41(b) is appropriate because Plaintiffs failed to file a 19 second amended complaint by the Court’s deadline of March 31, 2024, ECF No. 71 20 at 40. ECF No. 74 at 1, ECF No. 77 at 16-17. However, Plaintiffs and all 21 Defendants except Byelick filed a joint motion for an extension of time to file the 22 second amended complaint, ECF No. 72, and the Court granted it on March 28, 23 2024, ECF No. 73. Though the Court’s grant of an extension does not clearly apply 24 as to Byelick, it does indicate that Plaintiffs intend to file a second amended 25 complaint, or at the very least that they did not “fail[] to take any action.” 26 Edwards, 356 F.3d at 1065. Thus, “there has been no disobedience to a court’s 27 order to amend” justifying a Rule 41(b) involuntary dismissal. See id. The Court 28 1 |) will therefore not analyze this question under Rule 41(b) as Byelick suggests. ECF 2 || No. 77 at 16-17. 3 Instead, the Court treats this as a request for voluntary dismissal without 4 || prejudice under Rule 41(a) per Plaintiffs’ response and request. ECF No. 75. 5 || “Where the request is to dismiss without prejudice, a District Court should grant a 6 || motion for voluntary dismissal under Rule 41(a)(2) unless a defendant can show 7 || that it will suffer some plain legal prejudice as a result.” Kamal v. Eden Creamery, 8 || LEC, 88 F.4th 1268, 1279 (9th Cir. 2023) (cleaned up). Legal prejudice is 9 || prejudice to a legal interest, claim, or argument. /d. at 1280. The threat of future 10 || litigation, the inconvenience of defending against another suit, and even the 11 || inconvenience of defending against suit in another forum in which the plaintiff has 12 || tactical advantage do not constitute legal prejudice. Jd. 13 Because Defendant Byelick has shown no more than inconvenience due to 14 || the uncertainty of future litigation, the Court GRANTS Plaintiffs’ request for 15 || voluntary dismissal without prejudice.! See Fischman on behalf of Sempra Energy 16 || & S. California Gas Co. v. Reed, No. 16-CV-1006-WQH-AGS, 2017 WL 3337162, 17 || at *1-2 (S.D. Cal. Aug. 4, 2017). It DENIES Byelick’s request for dismissal with 18 || prejudice. The Court dismisses Byelick as a defendant in this action without 19 || prejudice. 20 IT IS SO ORDERED. 21 ||Dated: April 25, 2024 7 Lt 2 Hon. athe Coke 23 United States District Judge 24 25 26 ' Byelick contends that “a dismissal without prejudice . . . would likely be used as a Seeunties Litigation Reform Act [(°PSLRA"),|" ECE No. 77 at 13, But Blainuitts 28 || file suit again, their new suit would still need to meet the requirements of the PSLRA. More importantly, this is not a relevant consideration under Rule 41 (a).