Case No.: 90-ERA-15
Date Issued: Sep 20, 1991

In the Matter of:

Steven P. Cable,
    Complainant,

v.

Arizona Public Service Co.,
    Respondent.

Nahum Litt
Chief Administrative Law Judge

   This proceeding arises under the Energy Reorganization Act of 1974 at 42 U.S.C. 5851, as amended (hereinafter the "Act") and the regulations promulgated thereunder at 29 C.F.R. Parts 18 and 24.

Procedural History

   On February 21, 1990, Administrative Law Judge John C. Holmes dismissed the above claim with prejudice for complainant's

refusal to set the claim for hearing, failure to appear at a scheduled deposition, and "his apparent inability to proceed to a hearing due to his unstable condition." On March 14, 1990, David K. Colapinto and Stephen M. Kohn filed a Notice of Limited Appearance as attorneys for the complainant. In particular, the Notice stated that "[t]his entry of appearance is limited to representation of complainant on the motion for reconsideration of the Order of Dismissal, review of said Order before the Secretary of Labor (if necessary), and complainant's motion to stay proceedings." The Notice further stated that "[u]pon reinstatement of the Complaint, complainant and undersigned counsel shall reevaluate the further participation of undersigned counsel in these proceedings." In conjunction with the Notice, Colapinto filed a Motion for Reconsideration on March 14, 1990 requesting that the February 21, 1990 Order of Dismissal be stayed.

   Administrative Law Judge Holmes issued an order dated April 2, 1990 which stayed his February 21, 1990 Order of Dismissal and which prohibited Cable from directly contacting the employees at Arizona Public Service (APS) so long as he retained counsel.

   Colapinto continued to represent the complainant and, on July 6, 1990, he filed a motion requesting that this matter be dismissed without prejudice. The respondent subsequently filed a Response to Complainant's Motion to Voluntarily Dismiss Without Prejudice on July 15, 1990 stating that the complaint should be dismissed with prejudice because it "will suffer legal harm . . . (as) this matter was previously dismissed when (Administrative Law Judge Holmes) granted the Respondent's Motion to Dismiss." In the alternative, APS requested that the following conditions be attached to a dismissal without prejudice: (1) attorney's fees and costs should be assessed against the complainant; and (2) all of the respondent's defenses, which were previously available, should not be waived.

   An Order requesting that the respondent submit its petition for attorney's fees and costs was issued by Administrative Law Judge Holmes on August 21, 1990. On September 7, 1990, Rebecca Winterscheidt, counsel for the respondent, submitted a Request for Attorney's Fees and Costs seeking a total of $20,836.61 in services and $673.61 in costs covering a period from December 6, 1989 through July 25, 1990.

   The complainant filed an Opposition to Respondent's Request for Attorney Fees on September 24, 1990 stating that APS failed to cite "any valid grounds justifying an award of attorneys fees and costs as a condition of dismissal." The complainant argues that an allegation of delay on his part "does not constitute legal prejudice." In the alternative, the complainant states that, if attorney's fees and costs are awarded, the requested amount of "almost $21,000.00 is excessive, to say the least." The complainant asserts that the respondent is not entitled to fees or costs for services which will be useful in a state court proceeding. Consequently, the complainant urges that "APS should not be reimbursed for hours expended investigating Mr. Cable's claim, which accounts for the overwhelming majority of hours expended by respondent's counsel." The complainant also challenges "reimbursement of hourly fees ranging from $85.00 per hour to $210.00 per hour for the work of three different attorneys, and alleges that the respondent engaged in "overkill." and "duplicative efforts." The respondent filed a response to the complainant's Opposition to Respondent's Request for Attorneys Fees on October 31, 1990.

   On November 28, 1990, the respondent filed a Motion to Dismiss With Prejudice for Complainant's Violation of the April 2, 1990 Order. In particular, the respondent states that, although Cable was represented by counsel, he "harassed" and "scared" APS employees when he contacted them in person regarding his Idealine program in contradiction to the April 2, 1990 Order. The respondent consequently requests that the matter be dismissed with prejudice and attorney's fees and costs awarded.

   On December 21, 1990, an Order was issued which required that the complainant respond to the Motion to Dismiss With Prejudice within 30 days. The complainant, through his counsel, filed a Motion for Enlargement of Time in which to respond to the Motion to Dismiss With Prejudice on January 25, 1991. An extension of time was granted on January 29, 1991 and, again through his counsel, the complainant filed an Opposition to the Respondent's Motion to Dismiss with Prejudice on February 22, 1991. In his Opposition, the complainant noted the following: (1) pursuant to Rule 41(a) of the Federal Rules of Civil Procedure, this matter is already dismissed without prejudice because the respondent did not file an answer or a motion for summary judgment in response to his July 2, 1990 Motion to Dismiss Without Prejudice; (2) in the April 2, 1990 Order,

Administrative Law Judge Holmes exceeded his authority in prohibiting the complainant from contacting the respondent or its employees so long as he was represented by counsel; and (3) the complainant nevertheless complied with the April 2, 1990 Order because he was not represented by counsel with respect to the Idealine dispute.

   Meanwhile, by letter dated January 30, 1991, Richard V. Habura, Assistant District Director of the Employment Standard Administration, informed the complainant that its "investigation did not verify that discrimination was a factor in the actions comprising (Cable's) complaint." Habura further stated that Cable's Idealine files and personal property were being returned to his attorney, David Colapinto.

   On March 4, 1991 the respondent filed its reply to complainant's opposition to the dismissal with prejudice and argued the following: (1) the complainant's response was untimely and should not be considered; (2) the complainant's violation of the April 2, 1990 Order must result in a dismissal with prejudice; (3) Administrative Law Judge Holmes did not exceed his authority in issuing the April 2, 1990 Order prohibiting contact with APS employees while Cable was represented by counsel; and (4) the complaint was represented by counsel in matters concerning his personal property and Idealine program at the time he made contact with APS employees.

Discussion and Conclusions

   Initially, it must be noted that it is contrary to the documentary evidence of record for David K. Colapinto to maintain that his appearance in this matter is "limited to representation of complainant on the motion for reconsideration of the Order of Dismissal, review of said Order before the Secretary of Labor (if necessary), and complainant's motion to stay proceedings." All of the motions and oppositions to motions filed on behalf of the complainant, after reinstatement of this matter on April 2, 1990, contain Colapinto's signature. Moreover, by letter dated January 30, 1991, the record discloses that Cable's Idealine files and personal property were returned to Colapinto, as counsel for the complainant, by the Employment Standards Administration. Consequently, it is determined that David K. Colapinto was, and is, representing the complainant beyond reconsideration of the February 1990 Order of Dismissal in all aspects of this claim,

including matters concerning the Idealine files.

   On July 6, 1990, Colapinto filed a Motion to Dismiss Without Prejudice on behalf of the complainant which was opposed by the respondent on July 15, 1991. Rule 41 of the Federal Rules of Civil Procedure is applicable to voluntary dismissals in cases arising under the Act. Hettinger v. GPU Nuclear Corp., 87-ERA-7 (Decision and Order of the Secretary, March 18, 1991); Cooper v. Bechtel Power Corp., 88-ERA-2 (Decision and Order of the Secretary, October 3, 1989); Nolder v. Raymond Kaiser Engineers, Inc., 84-ERA-5 (Decision and Order of the Secretary, June 28, 1985). Rule 41(a)(1)(i) permits a voluntary dismissal without order of the court upon notice by the complainant and reads, in pertinent part, as follows:

[A]n action may be dismissed by the (complainant) without order of the 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 . . .. Unless otherwise stated in the notice of dismissal . . ., the dismissal is without prejudice.

Fed. R. Civ. P. 41(a)(1)(i).

   Under the facts of the present case, the respondent filed neither a motion for summary judgment nor an answer. The filing of a request for a hearing is "the equivalent of an answer." Nolder, 84-ERA-5 at 8. However, such a hearing request must be filed by the respondent in order to render the provisions of Rule 41(a)(1)(i) inapplicable. The complainant in this case requested a hearing by telegram dated January 2, 1990. Farinholt v. Virginia Power, 89-ERA-27 (Decision and Order of the Secretary, December 13, 1989); Cooper, 88-ERA-2 at 2. As a result, this matter is properly dismissed without prejudice pursuant to Rule 41(a)(1)(i) of the Federal Rules of Civil Procedure.

   Due to the automatic nature of a Rule 41(a)(1)(i) dismissal without prejudice, this office loses jurisdiction over the claim and the respondent's opposition to a dismissal without prejudice and motion to dismiss with prejudice cannot be considered. Santiago v. Victim Services, Inc., 753 F.2d 219, 221 (2d Cir. 1985). Moreover, a Rule 41(a)(1) dismissal without prejudice

precludes an award of attorney's fees and costs. Smith v. Phillips, 881 F.2d 902 (10th Cir. 1989); Johnson Chemical Co. v. Home Care Products, Inc., 823 F.2d 28 (2d Cir. 1987); Szabo Food Service, Inc. v. Canteen Corp., 823 F.2d 1073 (7th Cir. 1987). This is because the plain language of Rule 41(a)(1), which applies early in a proceeding where no answer or motion for summary judgment is filed, does not permit the attachment of terms and conditions to a dismissal without prejudice as does the language found at Rule 41(a)(2) where the proceeding is at an advanced stage and the parties have invested a significant amount of time and resources. Consequently, the respondent's request for attorney's fees and costs is denied.

   Although this matter falls within the narrow provisions of Rule 41(a)(1)(i) and is dismissed without prejudice, serious questions concerning counsel's representation have been raised. First, as previously noted, it is improper for Colapinto to misrepresent his relationship with the complainant in order to circumvent the provisions of an administrative order. This conduct is wholly inappropriate in any judicial proceeding and raises the question of whether this matter should be referred to the local bar association.

   Second, the complainant is cautioned against exhibiting conduct which harasses or intimidates the respondent's employees. Physical or verbal abuse of one party by another party to a proceeding before this office is never permissible.

   Third, the procedural history of this case indicates an abuse of judicial process which could lend itself to the imposition of Rule 11 sanctions. Fed. R. Civ. P. 11. Indeed, in Cooter & Gell v. Hartmarx Corp., ___U.S. ___, 110 S. Ct. 2447, 2455 (1990), the United States Supreme Court holds that Rule 11 sanctions may be assessed "even after the plaintiff has filed a notice of dismissal under Rule 41(a)(1)." The Court maintains that "Rule 41(a)(1) does not codify any policy that the plaintiff's right to one free dismissal also secures the right to file baseless papers." Id. at 2457.

   The Energy Reorganization Act provides important remedies for an employee who suffers discrimination upon reporting health and safety concerns. Therefore, meritorious claims, which may or may not ultimately lead to a decision in the complainant's favor, are properly filed. Indeed, a complainant is entitled to a great degree of latitude and the litigation of even a marginal claim

should not be discouraged or impeded. However, a claim, which is without merit or which is designed to harass the respondent and waste its resources as well as the resources of this office, constitutes an abuse of the judicial process which will not be tolerated.

   Rule 11 imposes a duty upon the attorney to conduct a reasonable inquiry and determine that any papers filed are "well-grounded in fact, legally tenable, and 'not interposed for any improper purpose'". Cooter & Gell, 110 S. Ct. at 2454.¹ Moreover, § 1927 of title 28 of the United States Code provides that counsel may be held personally liable for filing claims which are not well-grounded in fact or law. Morris v. Adams-Millis Corp., 758 F.2d 1352 (10th Cir. 1985); Blair v. Shenandoah Women's Center, Inc., 757 F.2d 1435 (4th Cir. 1985). Although it is determined that Rule 11 sanctions will not be assessed in this matter, counsel shall seriously consider the merits of a claim before filing it with this office.

¹ In the event that an order imposing Rule 11 sanctions upon a party is issued by this office, then 29 C.F.R. §18.29(b) provides that "the administrative law judge responsible for the adjudication . . . may certify the facts to the Federal District Court having jurisdiction in the place in which he or she is sitting to request appropriate remedies." See generally Moore v. Secretary of Health and Human Services, 651 F. Supp. 514 (E.D. Mich. 1986).