Lobbin v. Target Corporation

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 STEPHEN M. LOBBIN et al., Case No.: 3:21-cv-01785-RBM-JLB 12 Plaintiffs, ORDER DISMISSING ACTION 13 v. WITHOUT PREJUDICE 14 TARGET CORPORATION et al., 15 Defendants. [17] 18 On February 1, 2023, the undersigned issued an Order to Show Cause (“OSC”), 19 directing Stephen M. Lobbin and SML Avvocati P.C. (“Plaintiffs”) to show cause, in 20 writing, why the case should not be dismissed for failure to prosecute. (Doc. 7.) Plaintiffs 21 responded to the OSC on February 15, 2023. (Doc. 8.) For the reasons outlined below, 22 the Court declines to extend the time for Plaintiffs to effect service and dismisses this case 23 without prejudice pursuant to Federal Rule of Civil Procedure 4(m) and 41(b). 24 I. BACKGROUND 25 On October 18, 2021, Plaintiffs filed a complaint against Target Corporation and 26 Kmart Corporation (“Defendants”). (Doc. 1.) The complaint asserts claims for intentional 27 misrepresentation, negligent misrepresentation, and violations of California Business & 28 Professional Code section 17200, related to Defendants’ conduct underlying a settlement 1 agreement entered between the parties in a related case pending before the undersigned, 2 The Eclipse Group LLP v. Target Corp., et al., Case No. 3:15-cv-01411-RBM-JLB (S.D. 3 Cal.) (“Related 2015 Case”). Summonses were issued by the Clerk of Court on October 4 19, 2021. (Doc. 2.) Pursuant to Federal Rule of Civil Procedure 4(m), Plaintiff had until 5 January 16, 2022 to serve Defendants in this case. The case was transferred to the 6 undersigned on April 5, 2022. (Doc. 6.) 7 On February 1, 2023, the Court ordered Plaintiffs to show cause why the case should 8 not be dismissed for failure to prosecute. (Doc. 7.) Plaintiffs timely responded to the OSC, 9 arguing good cause exists for its failure to timely serve Defendants. (Doc. 8.) Plaintiffs 10 allege they have asked Defendants’ counsel in the Related 2015 Case to informally accept 11 service of process in this action and stipulate to stay this action pending final resolution of 12 the 2015 Case. (Id. at 1-2.) Plaintiffs’ response does not indicate what date they made this 13 request to counsel for Defendants. (Id.) To date, counsel for Defendants have apparently 14 not provided a response to Plaintiffs’ request. (Id.) Plaintiffs request that the Court enter 15 an order staying this action pending a final resolution of the Related 2015 Case or grant an 16 additional thirty days to complete formal service of process on Defendants. (Id. at 2.) 17 Other than Plaintiffs’ response to the OSC, the record reveals that Plaintiffs have made no 18 effort to prosecute this action besides filing the operative complaint. 19 II. LEGAL STANDARND 20 Pursuant to Federal Rule of Civil Procedure 4(m), “[i]f a defendant is not served 21 within 90 days after the complaint is filed, the court—on motion or on its own after notice 22 to the plaintiff—must dismiss the action without prejudice against that defendant or order 23 that service be made within a specified time.” FED. R. CIV. P. 4(m). However, “if the 24 plaintiff shows good cause for the failure, the court must extend the time for service for an 25 appropriate period.” Id. Good cause, at a minimum, means excusable neglect. Boudette 26 v. Barnette, 923 F.2d 754, 756 (9th Cir. 1991). “In addition to excusable neglect, a plaintiff 27 may be required to show the following factors to bring the excuse to the level of good 28 cause: ‘(a) the party to be served personally received actual notice of the lawsuit; (b) the 1 defendant would suffer no prejudice; and (c) plaintiff would be severely prejudiced if his 2 complaint were dismissed.’” Lemoge v. United States, 587 F.3d 1188 , 1198 n.3 (9th Cir. 3 2009) (citing Boudette, 923 F.2d at 756 ). 4 “Rule 4(m) provides two avenues for relief. The first is mandatory: the district court 5 must extend time for service upon a showing of good cause. The second is discretionary: 6 if good cause is not established, the district court may extend time for service upon a 7 showing of excusable neglect.” Lemoge, 587 F.3d at 1198 (citation omitted). Good cause 8 has been found in situations where “service has been attempted but not completed, that 9 plaintiff was confused about the requirements of service, or that plaintiff was prevented 10 from serving defendants by factors beyond his control.” Allan Family Trust v. City of San 11 Diego, No. 21-cv-2049-JO, 2022 WL 7675275 , at *1 (S.D. Cal. Oct. 13, 2022) (citing AF 12 Holdings LLC v. Does 1-135, 2012 WL 1038671 , at *3 (N.D. Cal. Mar. 27, 2012)). In 13 situations where the Court extends the time for service despite an absence of good cause, 14 the Court may consider factors such as the statute of limitations bar, prejudice to the 15 defendant, actual notice of a lawsuit, and eventual service. Efaw v. Williams, 473 F.3d 16 1038, 1041 (9th Cir. 2007) (citation omitted). 17 Further, district courts may dismiss a plaintiff’s action for failure to prosecute under 18 Federal Rule of Civil Procedure 41(b). In “[a]ctions or proceedings which have been 19 pending in this court for more than six months, without any proceeding or discovery having 20 been taken therein during such period, may, after notice, be dismissed by the Court for 21 want of prosecution . . .” CivLR 41.1(a). “When circumstances make such action 22 appropriate, a District Court may dismiss a complaint for failure to prosecute even without 23 affording notice of its intention to do so or providing an adversary hearing before acting.” 24 Link v. Wabash R.R. Co., 370 U.S. 626, 633 (1962). “The authority of a court to dismiss 25 sua sponte for lack of prosecution has generally been considered an ‘inherent power,’ 26 governed not by rule or statute but by the control necessarily vested in courts to manage 27 their own affairs so as to achieve the orderly and expeditious disposition of cases.” Id. at 28 629. 1 In determining whether to dismiss a claim for failure to prosecute, the court weighs 2 the following factors: (1) the public’s interest in expeditious resolution of litigation; (2) the 3 court’s need to manage its docket; (3) the risk of prejudice to defendants; (4) the availability 4 of less drastic alternatives; and (5) the public policy favoring disposition of cases on their 5 merits. Pagtalunan v. Galaza, 291 F.3d 639, 642 (9th Cir. 2002) (citing Ferdick v. 6 Bonzelet, 963 F.2d 1258, 1260 (9th Cir. 1992)). 7 III. DISCUSSION 8 A. Good Cause for Delayed Service 9 Plaintiffs explain the near eighteen-month delay in service is due to the pending 2015 10 Related Case and Defendants’ counsel’s lack of response to Plaintiffs’ request to accept 11 informal process on behalf of Defendants. These reasons, alone, do not support a finding 12 of good cause for failure to timely effect service under Federal Rule of Civil Procedure 13 4(m). See Crowley v. Factor 5, Inc., No. C 11-05528-SBA, 2014 WL 1868851 , at *2–3 14 (N.D. Cal. May 7, 2014) (finding plaintiff’s argument that case “effectively stayed” by 15 other pending related litigation did not support good cause for untimely service); In re 16 Waldner, 183 B.R. 879 (B.A.P. 9th Cir. 1995) (half-hearted attempts at service do not 17 constitute good cause). There is no evidence Defendants have attempted to evade formal 18 service of process. Compare Wei v. Hawaii, 763 F.2d 370, 371 (9th Cir. 1985) (evasion of 19 service can constitute good cause for untimely service). Plaintiffs have not identified any 20 inadvertent error or any other factor outside of Plaintiffs’ control that prevented timely 21 service. Without any argument to the contrary from Plaintiffs, “the law presumes injury 22 from unreasonable delay.” See Anderson v. AirWest, Inc., 542 F.2d 522, 524 (9th Cir. 23 1976) (presumption of prejudice may be rebutted by showing no actual prejudice occurred). 24 Accordingly, the Court declines to find good cause to extend the time for service under 25 Rule 4(m). 26 B. Discretionary Extension of Time to Effect Service 27 Plaintiffs’ response does not specify what date they requested Defendants’ counsel 28 to accept informal service of process. Therefore, it is unclear when, if at all, Defendants 1 received actual notice of this lawsuit. The response likewise provides no authority or legal 2 analysis demonstrating whether any of the claims in this case would be time barred if this 3 action is refiled. See Indep. Towers of Wash. v. Wash., 350 F.3d 925 , 929 (9th Cir. 2003) 4 (“[o]ur adversarial system relies on the advocates to inform the discussion and raise the 5 issues to the court.”). Again, prejudice to the Defendants is presumed absent any argument 6 to the contrary. Having considered the relevant factors, the Court finds the circumstances 7 do not warrant a discretionary extension of time for service. 8 C. Failure to Prosecute 9 Not only have Plaintiffs failed to timely serve Defendants in compliance with Rule 10 4(m), but they also have failed to demonstrate good cause for their failure to prosecute. 11 The factors outlined in Ferdick v. Bonzelet weigh in favor of dismissal of this case for 12 failure to prosecute. 13 1. Public’s Interest in Expeditious Resolution 14 The first factor “always favors dismissal.” Yourish v. Cal. Amplifier, 191 F.3d 983 , 15 990 (9th Cir. 1999). Plaintiffs initiated this action in October 2021. (Doc. 1.) Absent the 16 OSC and Plaintiffs’ response to the OSC, no action has been taken in this case since 2021. 17 Despite the February 1 OSC notifying Plaintiffs of their failure to timely effect service and 18 failure to prosecute, Plaintiffs have done nothing more than request a stay of the case or 19 additional time for service. (Doc. 7.) This protracted delay necessarily weighs in favor of 20 dismissal. 21 2. Court’s Need to Manage its Docket 22 The district court is in the best position to decide when delay in a particular case 23 interferes with docket management and the public interest. Ash v. Cvetkov, 739 F.2d 493 , 24 496 (9th Cir. 1984). Plaintiffs’ failure to timely effect service “has resulted in a continued 25 delay in the prosecution of this case and has ‘impermissibly allowed [P]laintiff[s] to control 26 the pace of the docket rather than the [C]ourt.’” Johnson v. United States, No. 22-cv-118827 BAS-AGS, 2023 WL 2414266 , at *2 (S.D. Cal. Mar. 7, 2023) (citing Smith v. Cty. of 28 Riverside Sheriff Dep’t, No. ED CV 17-1969-DSF (SP), 2019 WL 7865170 , at *3 *(C.D. 1 Cal. Nov. 18, 2019)). Therefore, this factor weighs in favor of dismissal. 2 3. Risk of Prejudice to Defendants 3 “[T]he failure to prosecute diligently is sufficient by itself to justify a dismissal, even 4 in the absence of a showing of actual prejudice to the defendant from the failure. The law 5 presumes injury from unreasonable delay.” In re Eisen, 31 F.3d 1447, 1552-53 (9th Cir. 6 1994). The Court looks at “the strength of the plaintiff’s excuse for the default” in 7 weighing whether prejudice is sufficient to support dismissal. Malone v. U.S. Postal Serv., [8] 833 F.2d 128, 131 (9th Cir. 1987) (citation omitted). Here, Plaintiffs’ excuse for their 9 failure to timely effect service upon Defendants is not persuasive. The record shows 10 Plaintiffs have been deliberately proceeding in dilatory fashion and have simply been 11 awaiting resolution in the 2015 Related Case before proceeding with the instant case. See 12 Link, 370 U.S. at 633 . The loss of evidence, loss of memory by a witness, and Defendants’ 13 ability to go to trial in this case may not necessarily be a concern given the litigation in the 14 2015 Related Case and the evidence obtained therein. However, given the near eighteen 15 month-delay in service, the third factor weighs in favor of dismissal. 16 4. Public Policy 17 Given that public policy favors disposition of cases on the merits, this factor weighs 18 against dismissal. Pagtalunan, 291 F.3d at 643 (citation omitted). 19 5. Less Drastic Alternatives 20 The Court should make a “reasonable exploration of possible and meaningful 21 alternatives” to dismissal. In re Eisen, 31 F.3d at 1455 (citation omitted). 22 The February 1 OSC warned Plaintiffs about their failure to timely effect service 23 upon the Defendants. (Doc. 7 at 1.) Plaintiffs’ response does not show any attempt to 24 effect formal service of process upon Defendants, but rather, shows Plaintiffs only want to 25 further delay this case due to the pending 2015 Related Case. (See generally Doc. 8.) 26 Plaintiff had over one year to request a stay or an extension of time to effect service prior 27 to the undersigned’s OSC, but they choose to remain silent. 28 Moreover, any lesser sanction, such as a monetary sanction, would not cure the delay 1 ||in this case and Plaintiffs’ failure to comply with Rule 4(m). See Jn Re Eisen, 31 F.3d at 2 || 1455 (finding dismissal only proper sanction). Given Plaintiff Lobbin’s claim of financial 3 ||hardship in the 2015 Related Case, monetary sanctions may be more detrimental to 4 Plaintiffs than dismissal of this case. See The Eclipse Group LLP, Case No. 3:15-cv5 ||01411-RBM-JLB, Dkt. 261 at 2—5 (S.D. Cal. Aug. 20, 2020) (Lobbin opposing Defendant 6 || Target’s request for attorney’s fees, in part, based upon financial hardship). 7 Four out of five factors weigh in favor of dismissal for failure to prosecute. 8 || Therefore, the Court dismisses the entirety of this civil action without prejudice based upon 9 || Plaintiffs’ failure to prosecute and timely effect service pursuant to Federal Rule of Civil 10 || Procedure 41(b) and 4(m), respectively. See Johnson, No. 22-cv-1188-BAS-AGS, 2023 11 || WL 2414266, at *3 (dismissing case without prejudice due to plaintiffs failure to prosecute 12 || and comply with the Court’s order to show cause requiring completion of service of process 13 |} or submission of request for extension of time for service); see also O’Brien v. Visa USA, 14 225 Fed. App’x 677, 678 (9th Cir. 2007) (affirming dismissal for failure to prosecute 15 || and failure to timely effect service pursuant to Rule 4(m)). 16 IV. CONCLUSION 17 For the reasons stated above, this action is DISMISSED WITHOUT 18 ||} PREJUDICE. The Clerk of Court is DIRECTED to close this case. 19 IT IS SO ORDERED. 20 ||DATE: April 10, 2023 7 ‘RUTH BERM@DEZ MONTENEGRO UNITED STATES DISTRICT JUDGE