Colón Cabrera v. Esso Standard Oil Co. (Puerto Rico), Inc.
723 F.3d 82
| 1st Cir. | 2013Background
- Colón Cabrera operated an Esso-branded gas station whose property was contaminated; he sued Esso in Puerto Rico courts and obtained partial summary judgment requiring Esso to investigate and remediate. Esso appealed; Puerto Rico Supreme Court denied certiorari.
- While the Commonwealth appeals were pending, Colón filed a federal RCRA suit seeking injunctive relief and penalties; Esso moved to dismiss and later answered with counterclaims asserting denial of access and seeking declaratory relief.
- Colón moved to voluntarily dismiss the federal case under Fed. R. Civ. P. 41(a)(2), asserting Esso had agreed to remediate and that the federal suit was unnecessary.
- The district court held the Rule 41 motion in abeyance, pursued settlement conferences (at the parties’ request and sua sponte), and after protracted negotiations granted dismissal but dismissed with prejudice and ordered fees/costs against Colón, criticizing his refusal to settle.
- Colón appealed, arguing dismissal with prejudice was an abuse of discretion because the court relied impermissibly on his decision not to settle rather than proper Rule 41(a)(2) factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal with prejudice under Rule 41(a)(2) was proper | Colón: dismissal should be without prejudice; refusing settlement is a protected litigant choice and not a basis for prejudice | Esso: Colón delayed and refused reasonable settlement offers, imposing costs and justifying dismissal with prejudice and fees | Reversed: Court abused discretion by relying on plaintiff’s refusal to settle; dismissal with prejudice inappropriate absent other proper prejudice findings |
| Whether a plaintiff’s conduct in settlement negotiations may justify prejudice | Colón: settlement choice is subjective and cannot be penalized; only dilatory or bad-faith negotiation conduct is relevant | Esso: negotiation delays and plaintiff’s conduct caused costs and prejudice that justify dismissal and fees | Affirmed in part: Court may consider procedural misconduct (delay, failure to participate, bad faith) during negotiations, but not the ultimate decision to reject settlement as a basis for dismissal with prejudice |
Key Cases Cited
- P.R. Mar. Shipping Auth. v. Leith, 668 F.2d 46 (1st Cir. 1981) (Rule 41(a)(2) dismissal without prejudice is the norm absent defendant prejudice)
- Doe v. Urohealth Sys., Inc., 216 F.3d 157 (1st Cir. 2000) (district court must protect nonmovant from unfair treatment when granting voluntary dismissal)
- Negrón-Almeda v. Santiago, 528 F.3d 15 (1st Cir. 2008) (abuse-of-discretion standard for reviewing Rule 41 rulings)
- Ehrheart v. Verizon Wireless, 609 F.3d 590 (3d Cir. 2010) (settlement is a subjective choice reflecting risk allocation; courts should not coerce settlements)
- Goss Graphics Sys., Inc. v. DEV Indus., Inc., 267 F.3d 624 (7th Cir. 2001) (parties have the prerogative to litigate rather than settle; courts should not penalize that choice)