Lenches

This is a rare case. In the district court, defendants gained a dismissal with prejudice of all claims against them, which were based on federal law. Yet they complain that they were entitled to more: the right to proceed with their counterclaim seeking a declaration that their alleged conduct did not violate state law — an issue that was pending in state court. The district court dismissed the counterclaim without prejudice. Concluding that the district court’s dismissal of the counterclaim meant to convey no opinion on its merits, we decline the invitation to allow a party achieving a complete victory in federal court to seek even more.

In this securities class action under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, Appellees denominated for purposes of this appeal by the name of the lead plaintiff (“Smith”) filed a motion to dismiss voluntarily their federal claims under Federal Rule of Civil Procedure 41(a)(2). The district court granted the motion. Defendants — Appellants Lenches, Rosenzweig, Saltzman, Avi-da, and Electronics for Imagining (collectively “EFI”) appeal contending that the district court abused its discretion by: (1) granting the…