Addressing for the first time the issue of whether a voluntary dismissal without prejudice is a “final proceeding” under Rule 60(b), the U.S. Court of Appeals for the Fifth Circuit upheld the district court order granting plaintiffs’ motion to vacate its voluntary dismissal without prejudice. Yesh Music v. Lakewood Church, Case No. 12-20520 (5th Cir. Aug. 14, 2013) (Davis, J.) (Jolly, J. dissenting).
Plaintiffs (Yesh) are musicians who granted defendants (Lakewood, a Houston-based church) a limited license to use one of their songs in connection with Lakewood’s marketing. Lakewood later used the song in one if its televised promotional programs. Subsequently, Yesh sued Lakewood for copyright infringement in Texas district court, arguing that the limited license did not permit use of the song on television. Six months later, Yesh voluntarily dismissed the Texas suit under Fed. R. Civ. P. 41(a)(1), and the next day filed the same lawsuit in New York district court. Eventually, the parties agreed to litigate the case in Texas, and Yesh voluntarily dismissed the New York action under Fed. R. Civ. P. 41(a)(1).
Under Rule 41(a)(1)(B), because the Texas lawsuit had already been dismissed without prejudice, the New York action was dismissed with prejudice. Accordingly, in order to reinstate the lawsuit in Texas district court, Yesh moved for relief from a final judgment under Rule 60(b). In particular, Yesh requested that the court vacate its first voluntary dismissal and reinstate the original lawsuit. Lakewood contested the motion, arguing that a voluntary dismissal under Rule 41(a) is not a “final decision” within the meaning of Rule 60(b). Lakewood also argued that even if the district court could vacate the first dismissal, it would be an abuse of discretion to do so. The district court rejected Lakewood’s arguments and instead granted Yesh’s motion to vacate. Lakewood appealed.
Rule 60(b) provides that a court may relieve a party “from a final judgment, order or proceeding” for the specified reasons as well as “any other reason that justifies relief.” Accordingly, the Fifth Circuit identified the question in the present case as whether a voluntary dismissal under Rule 41(a) could be a “final judgment, order or proceeding” within the meaning of Rule 60(b). The Fifth Circuit determined that a “final judgment” includes voluntary dismissals under Rule 41(a) because such a dismissal “terminates, closes and ends [the] cause of action,” at least until such time as the plaintiff re-files the action. The Fifth Circuit further held that a voluntary dismissal is a “proceeding” within the meaning of Rule 60(b). Finally, the Fifth Circuit found that the district court acted within its discretion in granting the motion to vacate because the parties had agreed to litigate the case in Texas, and it would be “unfair to permit Lakewood to renege on its agreement because of the procedural path taken.”