Finley Lines Joint Protective Board Unit 200, Brotherhood Railway Carmen, a Division of Transportation Communications Union v. Norfolk Southern Corp.

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

FINLEY LINES JOINT PROTECTIVE

BOARD UNIT 200, BROTHERHOOD

RAILWAY CARMEN, A DIVISION OF

TRANSPORTATION COMMUNICATIONS

UNION; JACK H. WRIGHT,

Plaintiffs-Appellants,

No. 96-1517

v.

NORFOLK SOUTHERN CORPORATION;

NORFOLK SOUTHERN RAILWAY

COMPANY,

Defendants-Appellees.

Appeal from the United States District Court

for the District of South Carolina, at Spartanburg.

G. Ross Anderson, Jr., District Judge.

(CA-95-3903-7-3)

Argued: March 5, 1997

Decided: April 3, 1997

Before RUSSELL, MURNAGHAN, and MOTZ,

Circuit Judges.

_________________________________________________________________

Reversed by published opinion. Judge Motz wrote the opinion, in

which Judge Russell and Judge Murnaghan joined.

_________________________________________________________________

COUNSEL

ARGUED: Newton G. McCoy, C. MARSHALL FRIEDMAN, P.C.,

St. Louis, Missouri, for Appellants. Frank Huger Gibbes, III, GIB-

BES, GALLIVAN & WHITE, Greenville, South Carolina, for Appel-

lees. ON BRIEF: C. Marshall Friedman, Kenneth E. Rudd,

C. MARSHALL FRIEDMAN, P.C., St. Louis, Missouri; Susan

Ingles, Greenville, South Carolina, for Appellants. Stephanie H. Bur-

ton, GIBBES, GALLIVAN & WHITE, Greenville, South Carolina;

Mark D. Perreault, NORFOLK SOUTHERN CORPORATION, Nor-

folk, Virginia, for Appellees.

_________________________________________________________________

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

This is an appeal from an order vacating a notice of voluntary dis-

missal. Because at the time plaintiffs filed the notice, defendants had

not answered the complaint, moved for summary judgment, or filed

a motion to dismiss that had been treated as a motion for summary

judgment, we reverse.

I.

On November 22, 1995, Finley Lines Joint Protective Board Unit

200, Brotherhood Railway Carmen and J. H. Wright (collectively Fin-

ley) filed a complaint in the United States District Court for the East-

ern District of Tennessee alleging that the Norfolk Southern

Corporation and Norfolk Southern Railway Company (collectively

Norfolk) had violated certain provisions of the Railway Labor Act, 42

U.S.C. §§ 151-188 (1994). On December 5, 1995, Norfolk moved to

transfer the case to the United States District Court for the District of

South Carolina. On the same day, Norfolk also filed a motion to dis-

miss the action and attached to its memorandum in support of that

motion the affidavits of two Norfolk employees. Two days later, with-

out acting on the motion to dismiss, the district court in Tennessee

transferred the case to the District of South Carolina.

Finley then moved to enlarge the time to respond to Norfolk's

motion to dismiss. Norfolk opposed the motion and on January 25,

1996, the district court denied it. The next day, January 26, 1996, Fin-

ley filed a notice of voluntary dismissal without prejudice pursuant to

2

Fed. R. Civ. P. 41(a)(1)(i). Later that same day, Finley also filed a

memorandum in opposition to Norfolk's motion to dismiss and sup-

porting documents.

On February 5, 1996, Norfolk moved to vacate Finley's notice of

voluntary dismissal, arguing that Finley was not entitled to voluntarily

dismiss the case pursuant to Rule 41 because Norfolk's motion to dis-

miss and supporting affidavits constituted a motion for summary

judgment under Fed. R. Civ. P. 12(b)(6). On March 14, 1996, the dis-

trict court held a hearing and considered affidavits and memoranda

from both sides. Four days later the district court filed a nine page

memorandum order in which it granted Norfolk's motion to vacate

Finley's notice of voluntary dismissal and also granted the Compa-

ny's motion to dismiss the complaint with prejudice. The order con-

tained no rationale for granting the motion to vacate; it was solely

directed at the motion to dismiss.

Finley appeals, asserting that the district court erred in both rulings.

Our conclusion that the district court erred in granting the motion to

vacate Finley's notice of voluntary dismissal without prejudice dis-

poses of the need, or ability, to review its decision as to Norfolk's

motion to dismiss.

II.

Determination of the critical issue presented in this appeal --

whether the district court properly vacated Finley's notice of volun-

tary dismissal -- depends upon the proper interpretation and interrela-

tion of Rule 41(a)(l)(i) and Rule 12(b)(6).

Rule 41(a)(l) provides that "an action may be dismissed by the

plaintiff without order of court (i) by filing a notice of dismissal at

any time before service by the adverse party of an answer or of a

motion for summary judgment, whichever first occurs." Fed. R. Civ.

P. 41(a)(1). Thus, a plaintiff need not secure court approval to dismiss

his case without prejudice if he acts before the defendant serves an

answer or motion for summary judgment. This "dismissal is available

as a matter of unconditional right . . . and is self executing, i.e., it is

effective at the moment the notice is filed with the clerk and no judi-

cial approval is required." Marex Titanic, Inc. v. Wrecked and Aban-

3

doned Vessel, 2 F.3d 544, 546 (4th Cir. 1993) (citing Matthews v.

Gaither, 902 F.2d 877, 880 (11th Cir. 1980), and Kenrose Mfg. Co.

v. Fred Whitaker Co., 512 F.2d 890, 895 (4th Cir. 1972)).

Norfolk recognizes these controlling principles and concedes that

it neither answered the complaint nor moved for summary judgment

prior to January 26, 1996, the date Finley filed its notice of voluntary

dismissal. Nevertheless, Norfolk asserts that Finley had no right to

dismiss under Rule 41(a)(1)(i) because Norfolk's December 5, 1995

motion to dismiss was supported by materials outside the complaint

and thus must be treated as a motion for summary judgment under

Rule 12(b)(6).

Rule 12(b)(6) provides that "[i]f . . . matters outside the pleadings

are presented to and not excluded by the court , the motion [to dis-

miss] shall be treated as one for summary judgment and disposed of

as provided in Rule 56." Fed. R. Civ. P. 12(b)(6) (emphasis added).

The district court had not considered Norfolk's Rule 12(b)(6) motion

when Finley filed its Rule 41(a)(1)(i) notice. Indeed, the only action

the district court had taken prior to January 26, 1996 when Finley

filed its notice was to deny Finley's motion for an extension to time

to respond to the Rule 12(b)(6) motion.1

Norfolk maintains a Rule 12(b)(6) motion to dismiss supported by

outside materials is converted into a motion for summary judgment

at the time "that it was served." Brief of Appellees at 17. There is

some limited support for this theory. See Yosef v. Passamaquoddy

Tribe, 876 F.2d 283, 286 (2d Cir. 1989) (possibly dicta -- because

it is unclear from the opinion whether the district court actually con-

sidered extraneous materials attached to the motion to dismiss and so

_________________________________________________________________

1 Norfolk notes that at the March 1996 hearing on its motion to dismiss,

the district court indicated it would rely on these extraneous materials

and Finley assented to this reliance. However, Norfolk acknowledges, as

it must, that this hearing took place two months after Finley had moved

under Rule 41(a)(l)(i). Indisputably, the only action taken by the district

court prior to Finley's Rule 41(a)(l)(i) motion was to deny Finley's

motion for an extension of time. Thus, Norfolk cannot proffer any evi-

dence that the district court considered its Rule 12(b)(6) motion before

Finley moved to dismiss without prejudice under Rule 41(a)(l)(i).

4

converted the motion to one for summary judgment prior to the plain-

tiff's filing the Rule 41(a)(l)(i) notice); Exxon Corp. v. Maryland Cas.

Co., 599 F.2d 659, 661 (5th Cir. 1979) (same); Kurkowski v. Volcker,

819 F.2d 201, 203 (8th Cir. 1987) (alternative holding); Tedeschi v.

Barney, 95 F.R.D. 182, 183 (S.D.N.Y. 1982) (alternative holding).

We cannot embrace this interpretation, however, because it is at

odds with the language and intent of Rule 12(b)(6), our decision in

Wilson-Cook Med. Inc. v. Wilson, 942 F.2d 247 (4th Cir. 1991), and

the better reasoned out-of-circuit precedent.

First, and most obviously, the plain language of the rule does not

permit conversion upon service. Rule 12(b)(6) does not provide that

a motion to dismiss supported by materials outside the pleadings shall

be treated as one for summary judgment when "filed" with the court

or when "served" on a party. Rather, the rule expressly states that a

motion to dismiss supported by such materials "shall be treated" as a

summary judgment motion only when the materials are"presented to

and not excluded by the district court." Fed. R. Civ. P. 12(b)(6). This

language can only mean, as Professor Moore has concluded, that the

"mere submission [or service] of extraneous materials does not by

itself convert a Rule 12(b)(6) motion into a motion for summary judg-

ment." 2A James Wm. Moore, Moore's Federal Practice ¶ 12.09[3]

(2d. ed. 1996).

Moreover, holding as Norfolk urges would undermine one of the

critical features of the conversion provision of Rule 12(b)(6). If a

motion to dismiss supported by extraneous materials automatically

converts to a summary judgment motion upon service, the discretion

Rule 12(b)(6) vests in the district court to determine whether or not

to "exclude" matters outside the pleadings would be eliminated. Id.

See e.g., Wilson-Cook, 942 F.2d at 247; Keeler v. Mayor & City

Council of Cumberland, 928 F. Supp. 591, 594 (D. Md. 1996);

Walker v. Tyler County Comm'n, 886 F. Supp. 540, 542 n.1 (N.D.W.

Va. 1995).

Norfolk's suggestion also conflicts with Rule 12(b)(6)'s require-

ment that a court provide parties with notice of its intention to treat

a motion to dismiss as one for summary judgment and"a reasonable

opportunity to present all material made pertinent to such a motion by

5

Rule 56." Fed. R. Civ. P. 12(b)(6); see also Anheuser-Busch v.

Schmoke, 63 F.3d 1305, 1311 (4th Cir. 1995), vacated on other

grounds, 116 S. Ct. 1821 (1996); Johnson v. RAC Corp., 491 F.2d

510, 513-14 (4th Cir. 1974); Gay v. Wall, 761 F.2d 175, 177-178 (4th

Cir. 1985).

Furthermore, Norfolk's conversion upon service rule is at odds

with our recent holding in Wilson-Cook, 942 F.2d 247. In that case,

the defendant contended that its Rule 12(b)(6) motion had been con-

verted into a summary judgment motion preventing the plaintiff from

voluntarily dismissing without prejudice because the district court had

not expressly rejected materials outside the pleadings submitted in

support of the motion. We rejected this argument. We concluded that

although the district court had not expressly excluded the materials,

it had refused to consider them in ruling on the motion and so "effec-

tively excluded" them. Id. at 252. Thus, the Wilson-Cook holding

accords with our conclusion here that no conversion occurs unless and

until a court indicates that it will consider the extraneous material.

Conversely, the Wilson-Cook holding would not have been possible

if we were to adopt Norfolk's theory that a speaking Rule 12(b)(6)

motion is converted into a summary judgment motion when served.

Additionally, our interpretation of Rule 12(b)(6) accords with the

better reasoned view that "conversion takes place at the discretion of

the court, and at the time the court affirmatively decides not to

exclude extraneous matters." Aamot v. Kassel , 1 F.3d 441, 445 (6th

Cir. 1993); Manze v. State Farm Ins. Co., 817 F.2d 1062, 1066 (3rd

Cir. 1987); 9 Charles Alan Wright & Arthur R. Miller, Federal Prac-

tice & Procedure § 2363, at 259 (2d. ed. 1995) ("[U]nless formally

converted into a motion for summary judgment under Rule 56, a

motion to dismiss under Rule 12 does not terminate the right of dis-

missal by notice."). See also David v. Denver , 101 F.3d 1344, 1352

(10th Cir. 1996); Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir.

1996). As the First Circuit recently explained:

[T]he proper approach to Rule 12(b)(6) conversion is func-

tional rather than mechanical. A motion to dismiss is not

automatically transformed into a motion for summary judg-

ment simply because matters outside the pleadings are filed

with, and not expressly rejected by, the district court. If the

6

district court chooses to ignore the supplementary materials

and determines the motion under the Rule 12(b)(6) standard,

no conversion occurs.

Garita Hotel Ltd. Partnership v. Ponce Fed. Bank , 958 F.2d 15,

18-19 (1st Cir. 1992) (collecting cases).

Finally, we note that, contrary to Norfolk's suggestion, no policy

concerns mandate against the conclusion we reach here. It is true that

Rule 41(a)(1) is "designed to permit a disengagement of the parties

at the behest of the plaintiff only in the early stages of a suit, before

the defendant has expended time and effort in the preparation of his

case." Armstrong v. Frostie Co., 453 F.2d 914, 916 (4th Cir. 1971).2

Moreover, "one can question the wisdom of allowing a party, through

adroit lawyering, to dismiss a case in order to avoid an unfavorable

decision on the merits." Marex, 2 F.3d at 547. Even so, we must fol-

low the "plain meaning of Rule 41(a)(1)(i)'s text." Id.

Thus, although in Marex the plaintiff had been "dissembling, if not

downright fraudulent," and the defendant had expended considerable

time and effort, we refused to hold that a Rule 41(a)(l)(i) voluntary

dismissal was unavailable to the plaintiff. Id. Finley did not engage

in activity comparable to that of the plaintiff in Marex, nor, prior to

the filing of the Rule 41(a)(l)(i) notice, was Norfolk put to the effort

demanded of the defendant in that case. Accordingly, Marex fore-

closes Norfolk's suggestion that equitable concerns require us to bend

Rule 41(a)(l)(i) in this case.

Indeed, as the Sixth Circuit recently noted in considering this ques-

_________________________________________________________________

2 Notwithstanding Norfolk's reliance on Armstrong, the case does not

support Norfolk's position. We did not hold there that, upon service,

defendant's Rule 12(b)(6) motion to dismiss the amended complaint

automatically became a summary judgment motion foreclosing the plain-

tiff from invoking Rule 41(a)(1)(i). See Marex , 2 F.3d at 547 n.5. Rather,

in Armstrong we upheld the district court's order vacating a plaintiff's

notice of voluntary dismissal of an amended complaint because the

defendant had earlier filed an answer and motion for summary judgment

in response to the similar original complaint. Armstrong, 453 F.2d at

916.

7

tion, Norfolk's theory, "[p]ermitting a defendant, merely by append-

ing to this Rule 12(b)(6) motion material `outside the pleadings,'

regardless of their scope, content or form, to abuse a plaintiff's right

to voluntarily dismiss his action without prejudice, not only circum-

vents the plain language of the rule, but flies in the face of the `time

and effort rationale.'" Aamot, 1 F.3d at 444.

Rule 41(a)(l)(i) itself provides a defendant who wishes to "avoid

wasting time or money" and "preclude future prejudice to its inter-

ests" with a simple remedy to prevent a plaintiff from sua sponte dis-

missing an action without prejudice: the defendant can file an answer

or move for summary judgment. Id. See also Carter v. United States,

547 F.2d 258, 259 (5th Cir. 1977). If a defendant fails to pursue this

remedy, it cannot circumvent the rule simply by serving the plaintiff

with a motion to dismiss, supported by extraneous materials. A plain-

tiff confronted with such a response is free to invoke Rule 41(a)(l)(i).

Accordingly, we reject Norfolk's theory. Instead we hold that a

Rule 12(b)(6) motion to dismiss supported by extraneous materials

cannot be regarded as one for summary judgment until the district

court acts to convert the motion by indicating that it will not exclude

from its consideration of the motion the supporting extraneous materi-

als.

III.

The district court erred in vacating Finley's notice of voluntary dis-

missal. Accordingly, its judgment is

REVERSED.

8