Superior Court of Massachusetts, Suffolk, Business Litigation Session
IN RE OVASCIENCE, INC. STOCKHOLDER LITIGATION
MEMORANDUM AND ORDER ALLOWING WESTMORELANDâS MOTION
TO DISMISS IS INDIVIDUAL AND CLASS CLAIMS WITHOUT
Kenneth W. Salinger, Justice Superior Court
Plaintiffs assert claims under the federal Securities Act of
1933 on behalf of themselves and a proposed class of
investors who purchased stock in OvaScience, Inc. Plaintiffs
have sued OvaScience, some of its officers and directors, and
three investment banks that served as underwriters during
OvaScienceâs January 2015 secondary public stock offering.
months ago Judge Sanders denied Plaintiffsâ motion to certify
a class and allowed Defendantsâ motion for
partial summary judgment as to the claims by Phillip Hoffman,
Carlos Rivas, and Cesar Castellanos [34 Mass.L.Rptr.
587]. The only remaining plaintiff is
Westmoreland County Employee Retirement System.
now moves pursuant to Mass.R.Civ.P. 41(a)(2) for a voluntary
dismissal of its claims without prejudice. It filed a
parallel federal action two weeks after Judge Sanders denied
class certification in this case. Westmoreland wants to
dismiss this case without prejudice and instead press its
claims and seek class certification in the pending federal
action. Defendants oppose this request. The Court concludes,
in the exercise of its discretion, that Westmoreland should
be allowed to dismiss this case without prejudice. It will
therefore ALLOW the motion.
is entitled to dismiss its claims without prejudice if it
wishes to do so, so long as Defendants will not be unfairly
prejudiced as a result. See Quest Systems, Inc. v.
Zepp, 28 Mass.App.Ct. 489, 496-97 (1990). The Court
finds that Defendants will not be unfairly prejudiced if
Westmoreland is permitted to dismiss its claims in this
action without prejudice so that it may instead prosecute and
seek class certification in the pending, parallel federal
have made no showing that such a dismissal now would somehow
impair their ability to defend against these claims in
federal court, or that they would be unfairly prejudiced in
some other way if the Court were to allow Westmorelandâs
motion. The mere fact that Defendants would prefer that any
dismissal of Westmorelandâs claims be with prejudice is not
grounds for denying Westmorelandâs request for leave to
dismiss these claims voluntarily without prejudice.
Defendantsâ main reason for opposing the motion for a
voluntary dismissal is that they want to keep Westmoreland
from moving for class certification in federal court, under
different legal rules. Defendants argue that Westmoreland is
improperly seeking a "do-over" on an issue that has
already been decided by Judge Sanders. The Court disagrees.
limited class certification issues decided by Judge Sanders
will not arise or have to be relitigated in Westmorelandâs
federal action. Judge Sanders determined that it would
violate due process to compel OvaScience investors who do not
reside in Massachusetts to join a plaintiff class, given that
under Massachusetts law they have no right to opt out of the
class. She also determined that it would not be appropriate
to certify a plaintiff class consisting only of OvaScience
investors who reside or have a principal place of business in
Massachusetts [34 Mass.L.Rptr. 610]. It appears that both
sides agree that neither of these issues will arise in
federal court if Westmoreland is able to seek class
certification there. In federal court Westmoreland would
presumably be seeking certification of a class under
Fed.R.Civ.P. 23(b)(3), which means that any putative class
member could opt out of the class by making a timely request
for exclusion. See Fed.R.Civ.P. 23(c)(2)(B)(v). And it would
be seeking certification of a nationwide class. As a result,
Westmoreland would not be seeking "do-over" in
federal court of the class certification issues that have
already been decided in this case.
Defendantâs real reason for opposing voluntary dismissal is
that they now have a tactical advantage over Westmoreland,
having defeated class certification under Massachusetts law
in this action, that would be lost if Westmoreland is allowed
to end this case and seek class certification in federal
defendantsâ loss of the upper hand in a pending proceeding,
or a plaintiffâs countervailing gain of some "tactical
advantage" by dismissing an action without prejudice and
then pursuing the same claims in some other forum, is no
reason to deny a motion for voluntary dismissal. Davis v.
USX Corp., 819 F.2d 1270, 1275 (4th Cir. 1987);
Bechuck v. Home Depot U.S.A., Inc., 814 F.3d 287,
299 (5th Cir. 2016); Rosenthal v. Bridgestone/Firestone,
Inc., 217 Fed.Appx. 498, 502 (6th Cir. 2007); Mullen
v. Heinkel Filtering Systems, Inc., 770 F.3d 724, 728
(8th Cir. 2014); Smith v. Lenches, 263 F.3d 972, 976
(9th Cir. 2001); American Natâl Bank & Trust Co. v. BIC
Corp., 931 F.2d 1411, 1412 (10th Cir. 1991); Arias
v. Cameron, 776 F.3d 1262, 1272 (11th Cir. 2015);
Walter Kidde Portable Eqpt., Inc. v. Universal Sec.
Instruments, Inc., 479 F.3d 1330, 1337 (Fed.Cir. 2007).
Court concludes that Westmoreland has presented a legitimate
reason for seeking to dismiss this action and proceeding
instead in federal court. Westmoreland should be allowed to
abandon its state court action based on its determination
that pursuing its claims in federal court is in the best
interest of the putative class members. Cf. Smith v.
Lenches, 263 F.3d at 976 (affirming voluntary dismissal
without prejudice of class claims in federal action under
Securities Exchange Act of 1934 because plaintiff decided
that it would be in best interest of putative class members
to instead challenge same "alleged wrongs" in state
court under state law).
to Litigate in Federal Court
also complain that if this case is dismissed then they will
have to incur additional expense to defend themselves against
the same claims in the federal action. But that is not a
basis for ...