Judge Shira Scheindlin
In Best Industries’ action, the Pegasus defendants brought a third-party suit against Hanjin Shipping Co., APL Co., and American President Lines Ltd. Pegasus invoked Federal Rule of Civil Procedure 14(c). Best’s "Stipulation and Order of Partial Dismissal" purported to dismiss its claims against the third-party defendants under Rule 41(a)(1)(A)(ii). District court held that absent agreement of all parties, Best and the third-party defendants could not dismiss, by stipulation, Pegasus’ claims in favor of Best under Rule 14(c)(2). Rule 14(c)(2) suggest that such third-party claims may not be dismissed by stipulation without the third-party plaintiff’s consent. It states that if the third-party plaintiff demands judgment in favor of the plaintiff, "the third-party defendant must defend under Rule 12." Texaco Exploration & Production v. AmClyde Engineered Products, confirms such reading of Rule 14(c)(2). The law of the case confirmed that Rule 41(a)(1)(A)(ii) requires that "a stipulation of dismissal [be] signed by all parties who have appeared." Although Pegasus and the third-party defendants have appeared, and the claims against the third-party defendants originated in Pegasus’ third-party compliant, Pegasus did not sign the stipulation.
