BRUCE G. VANYO (060134)
JEROME F. BIRN, JR. (128651)
REBECCA A.
MITCHELLS (151683)
WILSON SONSINI GOODRICH & ROSATI
Professional
Corporation
650 Page Mill Road
Palo Alto, California
94304-1050
Telephone: (650) 493-9300
Facsimile: (650) 565-5100
Attorneys for All Defendants
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
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IN RE SILICON GRAPHICS, INC. II __________________________________ This Document Relates to: ALL
ACTIONS. |
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Master File No. CLASS ACTION DEFENDANTS' Date: November 12, 1999 |
I. Plaintiffs' Motion Is Subject Rule 41(a)(2)
II. Plaintiffs' Motion for Dismissal Should Be Denied
Burnette v. Godshall, 828 F. Supp. 1439 (N.D. Cal.
1993),
aff'd, 72 F.3d 766 (9th Cir.
1995)
Champion v. Doe, No. C-88-0833-WHO (N.D. Cal. Oct. 24, 1988)
Diaz v. Trust Territory of Pacific Islands, 876 F.2d 1401 (9th Cir. 1989)
Henderson v. Duncan, 779 F.2d 1421 (9th Cir. 1986)
Holbrook v. Andersen Corp., 130 F.R.D. 516 (D. Me. 1990)
In re Exxon Valdez, 102 F.3d 429 (9th Cir. 1996)
In re Phillips Petroleum Sec. Litig., 109 F.R.D. 602 (D. Del. 1986)
In re Silicon Graphics, Inc. Sec. Litig., 183 F.3d 970 (9th Cir. 1999)
Kerrin v. Federated Dep't Stores, Inc., 100 F.R.D. 715 (N.D. Ga. 1983)
Larkin General Hosp. v. American Telephone & Telegraph
Co.,
93 F.R.D. 497 (E.D. Pa. 1982)
Link v. Wabash Railroad Co., 370 U.S. 626 (1962)
Pace v. Southern Express Co., 409 F.2d 331 (7th Cir. 1969)
Planet Ins. Co. v. Griffith, 712 F. Supp. 659 (N.D. Ill. 1989)
Robbin v. Fluor Corp., 835 F.2d 213 (9th Cir. 1987)
Russ v. Standard Ins. Co., 120 F.3d 988 (9th Cir. 1997)
Terrovona v. Kincheloe, 852 F.2d 424 (9th Cir. 1988)
Westlands Water Dist. v. United States, 100 F.3d 94 (9th Cir. 1996)
15 U.S.C. § 78u-4 et seq.
15 U.S.C. § 78u-5 et seq.
15 U.S.C. § 78aa
28 U.S.C. § 1367
N.D. Cal. Civ. L.R. 58-1
Fed. R. Civ. P. 23
Fed. R. Civ. P. 41
8 James Wm. Moore, et al, Moore's Federal Practice § 41.40 (3d ed. 1999)
This is a securities class action against Silicon Graphics, Inc. ("SGI") and certain of its officers and directors that is governed by the Private Litigation Securities Act of 1995 ("Reform Act"). Congress enacted the Reform Act to curb abusive securities litigation by dramatically strengthening the standard to plead securities fraud. Congress also created a safe harbor for forward-looking statements designed to encourage companies to predict the future by immunizing their predictions from liability under certain circumstances.
The Reform Act was also designed to correct the conduct of these cases. Congress found that the plaintiffs' bar was finding nominal investors in the defendant company to be the "plaintiff," filing suit, and extracting a settlement from the company so that it could avoid costly discovery. The Reform Act therefore created a preference for large institutional investors to be "lead plaintiffs," rather than individual investors with nominal amounts of stock. The Reform Act requires plaintiffs to move to be appointed "lead plaintiff." Congress intended that the "lead plaintiff" would be a plaintiff with a significant financial stake who would pursue the federal claims in the best interests of the plaintiff class.
Plaintiffs here were appointed lead plaintiffs, and their counsel was chosen as lead counsel. Plaintiffs now move to abandon this action and the federal claims of the class on whose behalf they filed this action. Plaintiffs cannot simply walk away.
Defendants typically do not oppose a plaintiff's motion to voluntarily dismiss an action. This is not the "typical" situation. One day after this action was filed, plaintiffs and their counsel filed a nearly identical class action in California state court alleging claims under California state law. Plaintiffs were litigating both actions simultaneously. In July 1999, the Ninth Circuit affirmed dismissal in In re Silicon Graphics, Inc. Sec. Litig., 183 F.3d 970 (9th Cir. 1999), a class action filed in January 1996 and the first case in this Circuit interpreting the Reform Act's heightened pleading standards. In many pending two-track securities class actions, the plaintiffs began to abandon their federal claims. Indeed, in Bader v. Electronics for Imaging, Inc., No. C-97-4739-CAL, pending in this Court, the plaintiffs, represented by the same lead counsel as in this case, have also moved to dismiss.
Defendants have moved for partial summary judgment under the Reform Act's safe harbor, and to dismiss plaintiffs' complaint under the heightened pleading standards of the Reform Act. Plaintiffs' motion for voluntary dismissal should be denied to preserve the protections provided to defendants under the Reform Act, and to effectuate the purpose of the Reform Act's lead plaintiff provision.
The first federal complaint was filed on December 2, 1997. One day later, the first parallel state action was filed in the California state court. Plaintiffs in both actions are represented by the same law firms. Four more actions were filed in this Court. The same lawyers represented the new plaintiffs. Each case made substantively identical allegations. All of these cases were consolidated.
In January 1998, the "Allard Group" of plaintiffs moved to be appointed Lead Plaintiffs under the Reform Act, 15 U.S.C. § 78u-4(a)(3)(B). The Allard Group represented that they had a "very substantial financial interest in the relief sought by the class." Plfs' Motion to be Appointed Lead Plaintiffs at 4 (Jan. 29, 1998). The Allard Group promised that they would "fairly and adequately represent the interest of the class." Id. They said that they were "willing to serve as a representative party on behalf of the class" and that their "interests" were "clearly aligned with the members of the proposed class." Id. at 11, 13. In reliance on these representations and promises, the Court appointed the Allard Group as lead plaintiffs by Order dated April 3, 1998.
Plaintiffs then served subpoenas for production of documents on fourteen non-parties. Plaintiffs also filed an amended complaint. The parties stipulated to defer briefing on defendants' response until after the Ninth Circuit ruled on the Silicon Graphics case. Now that the Silicon Graphics decision has been issued, defendants wish to proceed with the motion for partial summary judgment and motion to dismiss that they have waited to file.
Plaintiffs move for voluntary dismissal under Fed. R. Civ. Proc. 41(a)(1). That provision applies where there is no answer or motion for summary judgment pending. The parties agreed to defer briefing on defendants' response to the complaint until the Ninth Circuit issued its ruling in Silicon Graphics. That opinion has been published. Thus, pursuant to the parties' agreement, defendants file concurrently herewith their motion to dismiss and motion for partial summary judgment. Accordingly, a motion for summary judgment is now pending and Rule 41(a)(1) is not applicable.1
Instead, Rule 41(a)(2) applies, which requires the Court to determine whether dismissal is proper, whether dismissal should be with prejudice, and what terms and conditions should be imposed. Burnette v. Godshall, 828 F. Supp. 1439, 1443 (N.D. Cal. 1993), aff'd, 72 F.3d 766 (9th Cir. 1995). In deciding whether to allow dismissal at all, the "[c]ourt is to consider whether doing so will unfairly affect the other side." Id. In this case, dismissal will prejudice defendants and absent class members.
The Reform Act is an extraordinary piece of legislation. It establishes many new procedures and standards designed to preclude abusive securities actions in part by giving defendants substantial protections. Because the Reform Act makes it harder for plaintiffs to bring a class action and imposes more rigorous demands upon the allegations of a complaint, it should be more difficult for plaintiffs to abandon a Reform Act case where they have been appointed the leaders of the class. Although defendants are not aware of any reported decision discussing an attempt to dismiss a Reform Act class action under Rule 41(a)(2), the Ninth Circuit has decided a consistent line of case authority that leaves little doubt that dismissal is improper.
In Westlands Water District v. United States, 100 F.3d 94, 96 (9th Cir. 1996), the Ninth Circuit held that a district court must determine whether the defendant will suffer some plain legal prejudice if the court grants a motion to dismiss without prejudice under Rule 41(a)(2). In determining whether there is "legal prejudice," the Ninth Circuit observed that "courts have examined whether a dismissal without prejudice would result in the loss of a federal forum, or the right to a jury trial, or a statute-of-limitations defense." Id. at 97 (citations omitted). When presented with these and similar significant substantive and procedural rights that would be lost to the non-moving defendants if such motion to dismiss were granted, the Ninth Circuit has repeatedly refused to condone dismissal.
Specifically, in In re Exxon Valdez, 102 F.3d 429, 431-32 (9th Cir. 1996), plaintiffs sought to dismiss their actions to pursue their claims as class members in pending state actions. Plaintiffs moved to dismiss without prejudice after repeatedly failing to comply with defendants' discovery requests. The Ninth Circuit affirmed denial of the dismissal motion. It agreed that dismissal was improper where plaintiffs' motion was a "'thinly veiled attempt[] to avoid discovery'" and the expenditure of two and one-half years and substantial sums to obtain discovery "would prejudice the defendants." Id. at 432 (citation omitted). See 8 James Wm. Moore, et al, Moore's Federal Practice § 41.40[7][d] (3d ed. 1999) (advocating similar result).
Similarly, the Ninth Circuit has ruled that a Rule 41(a)(2) motion should be denied where a plaintiff's purpose is to avoid an adverse determination on the merits of the action. Terrovona v. Kincheloe, 852 F.2d 424, 429 (9th Cir. 1988) (denying Rule 41(a)(2) motion when summary judgment had been pending for three months and magistrate had already issued report and recommendation); see Moore's Federal Practice, supra, § 41.40[7][b][v] (advocating similar result). The Ninth Circuit also has ruled that a Rule 41(a)(2) motion should be denied where plaintiff seeks to remedy his failure to demand a jury trial. Russ v. Standard Ins. Co., 120 F.3d 988, 990 (9th Cir. 1997) (holding district court abused its discretion when it permitted plaintiff to dismiss action for express purpose of re-filing and making demand for jury trial); see Moore's Federal Practice, supra, § 41.40[7][b][vi] (advocating similar result).
In light of these holdings, the Court "should deny a motion for a voluntary dismissal that will prejudice the defendant by subjecting it to the less favorable law of a different forum." Moore's Federal Practice, supra, § 41.40[7][b][vii]. Contrary to plaintiffs'suggestions, the state court action is not duplicative of this one and cannot be. This Court has exclusive jurisdiction over the claim under Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b). See 15 U.S.C. § 78aa. This Court, and only this Court, can litigate the entirety of plaintiffs' claims. See 28 U.S.C. § 1367. An important corollary is that there can be no race to judgment as between this Court and the state court, because the state court lacks the power to adjudicate the federal securities claims.
Defendants would be significantly prejudiced by a dismissal because they would lose the protections of the Reform Act and its provisions that ensure the integrity of the proceedings. Among the key protections at issue here is the Reform Act's Safe Harbor for forward-looking statements, which provides immunity from liability for projections accompanied by meaningful cautionary statements. See 15 U.S.C. § 78u-5(c), 15 U.S.C. § 78u-5 (e). Defendants' pending motion for partial summary judgment is based on the Safe Harbor provision.
The Reform Act also changed the elements, procedures, and structure of securities claims and class actions. See, e.g., 15 U.S.C. § 78u-4(a)(2) (requiring the representative plaintiff to provide a sworn certificate with the filing of the complaint attesting to his independence and prior history as an investor); 15 U.S.C. § 78u-4(a)(3)(B) (requiring court to select lead plaintiff who is most capable of adequately representing the interests of the class, who has the largest financial interest, and prohibiting appointment of a professional plaintiff); 15 U.S.C. § 78u-4(a)(6) (restricting payment of attorneys' fees); 15 U.S.C. § 78u-4(a)(7) (requiring explanations to the class concerning detailed aspects of any settlement); 15 U.S.C. § 78u-4(a)(9) (requiring compulsory examination of plaintiff's counsel's potential conflict of interest); 15 U.S.C. § 78u-4(b)(1) and (2) (requiring particularized pleading of the allegedly false statement, the reasons why the statement was false, strong inference of scienter, and all supporting facts); 15 U.S.C. § 78u-4(b)(3) (requiring mandatory stay of discovery pending motion to dismiss); 15 U.S.C. § 78u-4(b)(4) (requiring plaintiff to prove loss causation); 15 U.S.C. § 78u-4(c) (requiring mandatory judicial review of each party's compliance with Fed. R. Civ. P. 11(b)); 15 U.S.C. § 78u-4(d) (requiring mandatory written polling of jurors regarding each defendant's scienter); 15 U.S.C. § 78u-4(e) (limiting the measure of damages); 15 U.S.C. § 78u-4(f) (applying proportionate, rather than joint and several, liability and extinguishing liability for settling defendants). All of these protections would be lost if this case were dismissed.
In Westlands, the Ninth Circuit provided a simple, common sense definition of "prejudice": "We conclude that legal prejudice is just that--prejudice to some legal interest, some legal claim, some legal argument." 100 F.3d at 97 (emphasis added). If this action is dismissed, defendants will lose the actual rights afforded by the Reform Act. Defendants will lose their right to pursue their pending summary judgment motion based on the Safe Harbor provision. Defendants will also be subjected to liability based on a scienter standard that plaintiffs believe is lower than the standard prevailing in federal court. The prejudice defendants would suffer on dismissal is substantial.
Plaintiffs say that by abandoning the federal action and pursuing only the state action, plaintiffs are saving the courts and defendants time and expense. Plfs' Brief at 2. Plaintiffs fail to recognize that their actions may multiply the number of duplicative actions. By abandoning the class claims, plaintiffs invite duplicative individual actions. Moreover, plaintiffs seek dismissal without prejudice. Plaintiffs apparently believe that they are free to litigate in state court but, if the state court action is not proceeding to their satisfaction, they may return to federal court and refile their federal claims.
Thus, by seeking a dismissal without prejudice, plaintiffs are not necessarily eliminating one of their actions--they are simply putting it on hold and hedging their bets. This strategy was rejected in Kerrin v. Federated Dep't Stores, Inc., 100 F.R.D. 715 (N.D. Ga. 1983), in which the court denied a motion to dismiss without prejudice:
A federal forum for federal claims is certainly a defendant's right. If a state forum is more important to the plaintiff than his federal claims, he should have to make that assessment before the case is jockeyed from state court to federal court and back to state court. The jockeying is a drain on the resources of the state judiciary, the federal judiciary, and the parties involved; tactical manipulation such as plaintiff has employed cannot be condoned.
Id. at 717.
Indeed, courts have denied dismissal motions, notwithstanding pending parallel state actions, where defendants have been forced to litigate as a result of plaintiffs' manipulations. For example, in Planet Insurance Co. v. Griffith, 712 F. Supp. 659, 661 (N.D. Ill. 1989), the court denied dismissal of an insurance coverage declaratory action even though there were four pending state court actions. The federal action had been pending for two years, the parties had filed numerous pleadings including one party's counterclaim, substantial discovery had been involved, and defendants expended substantial fees and costs. The court found dismissal would prejudice the defendants. Id. ("If Planet wished to defer this insurance dispute until resolution of the underlying actions, it should have delayed filing this action or at least not waited two years to dismiss it.").
Similarly, in Holbrook v. Andersen Corp., 130 F.R.D. 516, 521 (D. Me. 1990), the court denied dismissal where plaintiff sought to pursue a pending state court action. The court rejected plaintiff's argument that the federal action was pending only ten months and that there would be a waste of judicial resources by virtue of the parallel suits. The court found defendant would be prejudiced because, among other things, it had spent over $50,000 in fees conducting discovery and pretrial preparation. The court observed that plaintiff's intent to join non-diverse defendants in state court proceedings was a "make-weight in an attempt to evade, for tactical purposes, the jurisdiction of this Court, which was, after all, originally invoked by Plaintiffs." Id. at 521; see Pace v. Southern Express Co., 409 F.2d 331, 334 (7th Cir. 1969) (denying dismissal where parallel state actions were pending, federal case had been pending 1 1/2 years, substantial discovery had been undertaken, and defendant successfully briefed motion for summary judgment; court agreed that federal litigation should be "'disposed of in a manner that will protect the defendant against future litigation'" and "'Defendants should not be harassed by multiple suits.'") (citation omitted).
In sum, the fact that defendants have been forced to litigate the federal issues, together with the threatened loss of this federal forum, will inflict substantial prejudice on defendants if the motion is granted.
Federal Rule of Civil Procedure 23 gives trial courts the discretion to make appropriate orders for the protection of a plaintiff class. As plaintiffs concede, Rule 23 considerations apply even under a Rule 41(a)(1) motion for voluntary dismissal. Plfs' Brief at 4. In this case, the class faces serious statute of limitation problems. The filing of this class action does not toll the one-year statute of limitations applicable to Section 10(b) claims within which others must file class actions. Robbin v. Fluor Corp., 835 F.2d 213, 214 (9th Cir. 1987) (pendency of securities class action tolls limitations as to individual actions but not subsequent class actions). Members of the class may have reasonably relied upon the Allard Group's notice, published pursuant to the Reform Act, that it wished to lead the class. Members of the class may not have filed a class action within the one-year limitations period, or challenged the Allard Group's leadership, in reliance on the fact that the Allard Group represented that it would faithfully prosecute the federal class claims. The Allard Group now wish to abandon the class they were supposedly leading. This leaves class members in the position that they now could pursue only individual actions under Section 10(b).
Plaintiffs say that the "class can obtain complete relief" in the parallel state action. Plfs' Brief at 2. Plaintiffs are wrong. The state action does not and cannot raise plaintiffs' Section 10(b) and Section 20 claims because only a federal court has jurisdiction over those claims. See 15 U.S.C. § 78aa. Thus, plaintiffs seek to dismiss the action where all claims can be asserted and abandon absent class members, forcing them to file individual actions if they wish to assert and protect their federal claims.
In In re Phillips Petroleum Securities Litigation, 109 F.R.D. 602, 608-09 (D. Del. 1986), a number of securities class actions arising out of a hostile takeover attempt were pending in the District of Delaware. In one of the class actions, plaintiff sought to voluntarily dismiss under Rule 41(a)(1) in order to file a class action in state court. The court, effecting its obligations under Rule 23, viewed plaintiff's request in light of his fiduciary duties to the class, stating:
The [] plaintiff has represented . . . he intends to rely solely on state-law claims in a subsequently filed class action. The possible federal claims of any class members within the [] class could thus be raised only in individual actions in federal court. The class members represented by the Delaware plaintiffs, on the other hand, may have all their possible claims - state as well as federal - raised here. The [] plaintiff thus could not adequately fulfill his fiduciary duty to represent the best interest of the class by filing state-law claims only.
Id. at 609 (footnote omitted). The court granted plaintiff's motion to voluntarily dismiss, due to the pendency of other, similar federal actions, but ordered as a condition to dismissal that plaintiff not file a duplicative state court class action arising out of the same facts. Id.
Judge Orrick raised similar concerns in Champion v. Doe (Continental Savings of America), No. C-88-0833-WHO (N.D. Cal. Oct. 24, 1988). In Champion, plaintiff sought dismissal of a class action under Fed. R. Civ. P. 41(a)(1) to pursue a later-filed state court class action. At the hearing, Judge Orrick expressed his concern that dismissal of the federal complaint, and the resulting loss of claims for violation of federal laws, including the securities laws, was not in the best interests of the class. September 21, 1988 Transcript at 3, 6. Consistent with that concern, Judge Orrick denied plaintiffs' motion for voluntary dismissal and issued an order staying the state court class action. See Exs. A and B to Declaration of Rebecca A. Mitchells (Order dated Oct. 24, 1988; Sept. 21 Transcript).
Phillips and Champion provide clear guidance on the appropriate course of action in this case. Because the plaintiff class would be prejudiced by dismissal, because they would lose the ability to assert their federal claims with their state claims, plaintiffs' motion should be denied. Moreover, because the plaintiff class would be prejudiced by the maintenance of two identical class actions, the Court should issue an order staying the state court class action. See Champion; Phillips, 109 F.R.D. at 608 (noting the obvious prejudice arising from pursuit of duplicative class actions).
Plaintiffs mistakenly rely on Larkin General Hospital, Ltd. v. American Telephone & Telegraph Co., 93 F.R.D. 497, 499 (E.D. Pa. 1982). There, both class actions were federal antitrust actions. In contrast, here there is no other federal class action raising federal claims. Thus, plaintiffs' motion to abandon the federal claims should be denied.
Plaintiffs move to abandon their federal claims--for now. Plaintiffs apparently believe that they may resume this action if their state court case does not proceed to their satisfaction. Plaintiffs also appear to be putting their federal claims on hold in the hope that the Ninth Circuit or the Supreme Court may soften the Reform Act's pleading standards at some later date. If plaintiffs do not wish to pursue their federal claims, they should abandon those claims now with prejudice. Plaintiffs cannot be permitted to put their federal claims on standby with an option to renew those claims at an unspecified later date.2 Accordingly, if the Court dismisses this action, dismissal should be with prejudice.
Rule 41(a)(2) allows the Court to dismiss an action "upon such terms and conditions as the court deems proper." Fed. R. Civ. P. 41(a)(2). The Court thus has discretion to dismiss with prejudice. This discretion under Rule 41(a)(2) is consistent with the Court's inherent power to dismiss with prejudice. See Link v. Wabash Railroad Co., 370 U.S. 626, 629-30 (1962) (the inherent power to dismiss an action with prejudice "is necessary in order to prevent undue delays in the disposition of pending cases and to avoid congestion in the calendars of the District Courts"); Henderson v. Duncan, 779 F.2d 1421, 1423 (9th Cir. 1986) ("The district court has the inherent power sua sponte to dismiss a case for lack of prosecution.").
Moreover, dismissal with prejudice would be proper under the Court's Rule 11 findings. The Reform Act requires mandatory judicial review of each party's and counsel's compliance with Rule 11. 15 U.S.C. § 78u-4(c)(1), (2); N.D. Cal. Civ. L.R. 58-1. If this Court dismisses this case, defendants request that the Court impose sanctions on plaintiffs for the unnecessary burden and expense they caused by moving to be appointed lead plaintiffs, promising the Court they would serve as lead plaintiffs for the class, and jockeying between federal and state court. Plaintiffs' abandonment of the class's federal claims is completely inconsistent with their representations to this Court and the Congressional intent underlying the Lead Plaintiff provision.
Defendants request that, if the Court grants dismissal, the Court enter Rule 11 sanctions dismissing the case with prejudice and awarding defendants the legal expenses they incurred in this federal action, which defendants would submit upon the Court's request.
Plaintiffs do not wish to notify the class they are leading that they have decided to abandon their federal claims. That is inconsistent with Rule 23. Rule 23(e) requires that "[a] class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs." Thus, plaintiffs must tell the class members about their decision to abandon their federal claims.
In Diaz v. Trust Territory of Pacific Islands, 876 F.2d 1401, 1411 (9th Cir. 1989), the Ninth Circuit observed that "[v]ery few cases involving a voluntary pre-certification dismissal have actually held notice not required." In Diaz, the Ninth Circuit reversed the lower court's dismissal of part of a class action where the court failed to give notice or inquire into possible prejudice. The Ninth Circuit held that "notice of dismissal protects the class from prejudice it would otherwise suffer if class members have refrained from filing suit because of knowledge of the pending class action." Id. at 1409. "Lack of time from dismissal until expiration of the statute of limitations makes it likely the class will learn of the dismissal too late." Id. at 1411. Thus, the two factors that the Ninth Circuit found present in Diaz, and that compelled reversal for failure to give notice, are present here: "The likelihood of prejudice, resulting from reliance on the filing of the class action, compounded by the impending expiration of the statute of limitations at the time the class allegations are dismissed." Id. at 1409-10.
Accordingly, at a minimum, Diaz requires that the Court dismiss the action with prejudice and that plaintiffs issue notice to the class to determine whether another class member wishes to step forward and be appointed lead plaintiff to continue prosecution of the federal claims.
For the foregoing reasons, plaintiffs' motion to dismiss their action without prejudice should be denied.
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Dated: October 21, 1999 |
Respectfully submitted, WILSON SONSINI GOODRICH & ROSATI _______________________________ Attorneys for Defendants |
1 Many of the considerations under Rule 41(a)(1) are the same as a motion to dismiss under Rule 41(a)(2). Since this is a class action, a motion to dismiss under both Rule 41(a)(1) and Rule 41(a)(2) is subject to Rule 23(e). Accordingly, under Rule 41 and Rule 23(a), plaintiffs cannot dismiss this case without the Court's approval. As discussed below, dismissal here is improper under Rule 23 because of the resulting prejudice to the plaintiff class.
2 Defendants believe that such an attempt would be barred by the applicable statute of limitations.
Source: File to director from Wilson Sonsini Goodrich & Rosati