The opinion of the court was delivered by: Hon. William J. Martini
This matter comes before the Court on Plaintiffs' motion for fees, Defendant's motion to dismiss Plaintiffs' remaining claim pursuant to Federal Rule of Civil Procedure 12(b)(6), and Defendant's motion to condition voluntary dismissal of Plaintiffs' remaining claim on an award of attorney's fees to Defendant pursuant to Federal Rule of Civil Procedure 41(a).
For the reasons discussed below, the Court will GRANT Plaintiffs' motion IN PART and will award fees and costs in an amount to be determined. The Court will also DENY Defendant's motion to impose conditions on Plaintiffs' voluntary dismissal of their remaining claim. The Court will take no action on Defendant's motion to dismiss, as the parties have represented that this case has settled.
I.Factual and Procedural Background
Defendant BP Products North America, Inc. ("BP") is a refiner and marketer of gasoline and other petroleum products. Plaintiffs Ara Alboyacian, Mike Agolia, Ared Anac, Hagop Baga, Edward Balloutine, David Chong, Sevan Curukcu, Alfred Deppe, Joseph Klein, Raffi Korogluyan, Paul Lopes, Mary Lou Lopes, Abraham Manjikian, Imad Saleh, Walter Steele, Jayed Suddal, Aret Tokatlioglu, Richard Walter, Gregory Yigitkurt, Mike Yigitkurt, and Sahin Yigitkurt are franchisees that operate BP service stations throughout New Jersey pursuant to the Commissioner Marketer Agreement ("CMA"). This Court has previously recognized that the CMA creates a legal franchise under the New Jersey Franchises Practices Act, N.J.S.A. 56:10-1, et seq. (the "NJFPA"), between BP and the signatory. See, e.g., Sarwari v. BP Products North America, Inc., No. 06-2976, 2007 WL 1118344 (D.N.J. Apr. 9, 2007). On August 18, 2009, BP filed a complaint against Hillside Service, Inc., Mike Yigitkuri, and Vinod Oberoi (the "Hillside Defendants"), seeking a declaration from this Court that it has no obligation to continue business with the Hillside Defendants, that it is not obligated to renew the underlying CMAs, and that it is not responsible for any claimed lost value of the Hillside Defendants' business (the "Hillside Action"). On October 7, 2009, Plaintiffs filed this lawsuit seeking, among other relief, a declaration that BP's failure to renew the underlying CMAs would constitute a violation of the NJFPA.
Thereafter, BP moved for summary judgment in the Hillside Action and filed a Rule 12(b)(6) motion in this action. Plaintiffs filed a motion for partial summary judgment in this action seeking judgment solely on the issue of whether BP's failure to renew would violate the NJFPA. The Court subsequently granted summary judgment for the Hillside Defendants in the Hillside Action and partial summary judgment for Plaintiffs in this action. The Court also granted BP's motion to dismiss and dismissed nearly all of Plaintiffs' remaining claims.
The only claim that remains in this action is whether BP imposed unreasonable standards of performance on Plaintiffs in violation of the NJFPA. BP filed the pending Rule 12(b)(6) motion to dismiss that claim on February 23, 2012. Thereafter, counsel for the parties met several times to discuss settlement, and the Court, on counsel's request, refrained from deciding the motion pending the outcome of those discussions. On July 26, 2012, the parties notified the Court that they had reached a settlement on the remaining claim but still disputed the issue of attorney's fees. As part of the settlement, counsel represented that Plaintiffs would file a notice of voluntary dismissal pursuant to Federal Rule of Civil Procedure 41(a) once the Court resolved the fee dispute. The parties filed their pending fee motions on August 1, 2012. On August 14, 2012, the parties completed briefing the motions.
A. Voluntary Dismissal Under Rule 41(a)
BP asks the Court to condition Plaintiffs' voluntary dismissal of their remaining claims on an award of attorney's fees for BP. In the alternative, BP asks the Court to award BP attorney's fees for the time its counsel expended in briefing its pending motion to dismiss. The Court cannot grant either request.
Federal Rule of Civil Procedure 41(a) provides that a plaintiff may voluntarily dismiss an action "without a court order by filing . . . a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment." "A filing under the Rule is a notice, not a motion. Its effect is automatic: the defendant does not file a response, and no order of the district court is needed to end the action." In re Bath and Kitchen Fixtures Antitrust Litig., 535 F.3d 161, 166 (3d Cir. 2008).
BP argues that the Court has the authority to impose conditions on any voluntary dismissal under Rule 41(a) because Plaintiff's actions have required them to defend against a meritless claim. But Rule 41 "affixes a bright-line test to limit the right of dismissal to the early stages of litigation" -- the only question the Court should ask here is whether BP "has served either an answer or a summary judgment motion". Manze v. State Farm Ins. Co., 817 F.2d 1062, 1065 (3d Cir. 1987) (quotation omitted). Here, BP has filed neither an answer nor a motion for summary judgment. And contrary to BP's claims, the Court did not treat its earlier motion to dismiss as a motion for summary judgment. See ECF No. 39, at 4 (describing motion to dismiss standard). Nor does Plaintiffs' filing of a motion for partial summary judgment drag the litigation across the bright line Rule 41(a)(1) creates. The Rule explicitly allows for voluntary dismissal by notice before "the opposing party serves either an answer or a motion for summary judgment." (emphasis added). BP presents no authority for reading the rule other than in this plain fashion.*fn1 And the fact that BP filed a motion for summary judgment in the Hillside Action has no bearing on this action.*fn2 Plaintiffs' remaining claim in this action was not even an issue in the Hillside Action.
In the alternative, BP argues that even if Plaintiffs can voluntarily dismiss their action without approval from the Court or the imposition of conditions, the Court should grant BP an award of attorney's fees in connection with its motion to dismiss Plaintiffs' remaining claim. BP is correct that voluntary dismissal of an action pursuant to Rule 41(a) likely would not deprive this Court of jurisdiction to enter an award of attorney's fees, see, e.g., In re Schaefer Salt Recovery, Inc., 542 F.3d 90, 98 (3d Cir. 2008), but BP does not provide a basis for an award of fees other than Rule 41 and general equitable considerations. The Court cannot square the idea of awarding fees under Rule 41 with its finding that it lacks the authority to set conditions on Plaintiffs' voluntary dismissal, and BP does not provide any case law support for its position. Nor does the Court find that equity compels an award of fees.
For all of these reasons, the Court will deny BP's motion to set conditions on Plaintiffs' voluntary dismissal or to ...