In DivX, LLC v. Realtek Semiconductor Corp., C.A. No. 20-1202-JLH (D. Del.), the parties disputed whether the case should be dismissed with or without prejudice after the plaintiff moved to dismiss its own case.
The defendant responded, opposing dismissal without prejudice and arguing that a with-prejudice dismissal was warranted under a four-factor test used in previous cases (which focuses mainly on effort and expense of the present and potential future litigation, progress of the present litigation, and diligence in moving to dismiss). Id., D.I. 74 at 9.
The defendant argued that plaintiff had filed an ITC action against it, resulting in millions of dollars in fees. Id. at 12.
The Court didn't go for it. It held that the fact that the defendant spent millions defending a co-pending ITC action isn't enough to support a dismissal with prejudice of the district court action:
When the Court stayed this case in 2021, it was in its infancy. It still is. There is no scheduling order and there has been no discovery. . . . For this reason, I find that a dismissal without prejudice would not result in a significant or duplicative additional expense were DivX to file again. Realtek points out that an extensive record was developed before the ITC (D.I. 69 at 11), but I see no reason why any benefit the ITC record would provide in this case wouldn’t be available in any subsequent case.
Realtek also points out that it spent “millions of dollar[s] and fees and costs” in the ITC case. (D.I. 69 at 3.) But if Realtek thinks that DivX acted improperly in the ITC proceeding, Realtek can ask the Commission for relief. Indeed, the record reflects that Realtek sought sanctions in the ITC, and the Commission’s decision not to award sanctions is currently on appeal to the Federal Circuit. Realtek Semiconductor Corporation v. ITC, No. 23-1095 (Fed. Cir.). . . .
NOW THEREFORE, for the reasons set forth above, it is HEREBY ORDERED that Defendant’s Motion to Dismiss Without Prejudice (D.I. 65) is GRANTED, and the Complaint is DISMISSED without prejudice.
Id., D.I. 78 at 3.
This is interesting not just because of the fact that an ITC action wasn't enough to support a for-prejudice dismissal, but also because it's a nice reminder of the factors for a for-prejudice dismissal:
In determining whether legal prejudice will result from dismissal of a claim without prejudice, courts in this circuit consider (1) any excessive and duplicative expense of a second litigation; (2) the effort and expense incurred by a defendant in preparing for trial; (3) the extent to which the pending litigation has progressed; and (4) the claimant’s diligence in moving to dismiss.
DivX, LLC v. Realtek Semiconductor Corp., C.A. No. 20-1012-JLH, at 3 (D. Del. June 4, 2024).
This part is nothing new—the Court has articulated these factors before. But it's good to keep them in mind when thinking about whether to push for a with-prejudice dismissal.
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