Movement Mortgage LLC v. Intercontinental Capital Group, Inc., 3:22-cv-00147

Movement Mortgage and 48 former employees of Intercontinental Capital Group (ICG) sought declaratory relief regarding the enforceability of forum selection clauses in employment agreements after failing to purchase ICG’s direct-to-consumer business.
After negotiations broke down, a number of ICG employees joined Movement, prompting ICG to threaten lawsuits for breach of agreements and misappropriation of confidential information, specifying intent to enforce forum selection clauses.
ICG responded to the complaint by stating they would not pursue claims outside North Carolina, effectively mooting the controversy about forum selection.
ICG asserted counterclaims for breach of contract, breach of fiduciary duty, tortious interference, and unfair/deceptive practices against specific former employees and Movement.
Certain Individual Plaintiffs (excluding two also named in counterclaims) moved for voluntary dismissal without prejudice, arguing the forum issue was now moot and ICG had not counterclaimed against them.
ICG did not oppose dismissal if limited conditions regarding discovery responses were imposed to avoid undue prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Voluntary dismissal of Certain Individual Plaintiffs under Rule 41(a)(2)	No prejudice since ICG no longer pursuing claims outside NC; no counterclaims against them	Dismissal acceptable only if Plaintiffs respond to outstanding discovery requests	Dismissal granted with specific limited discovery conditions
Forum selection clause enforceability	Sought declaration voiding out-of-state litigation	Moot—ICG won’t pursue claims outside NC	Issue moot; no live controversy remains
Scope of discovery obligations post-dismissal	Discovery requests are burdensome, overbroad, info available from Movement	Discovery from former employees essential; obtaining it as non-parties is more burdensome	Plaintiffs must provide specific, limited info before dismissal
Prejudice to defendant from voluntary dismissal	No substantial prejudice if dismissed	Need to maintain access to critical evidence via discovery	Minimal prejudice with limited discovery safeguards

Andes v. Versant Corp., 788 F.2d 1033 (4th Cir. 1986) (setting standard for denial of motion for voluntary dismissal only when defendant would suffer substantial prejudice)
Davis v. USX Corp., 819 F.2d 1270 (4th Cir. 1987) (district court has broad discretion to impose conditions on voluntary dismissal to prevent undue prejudice)