New opinion—Third Circuit clarifies which dismissals trigger claim preclusion

Papera v. Pa. Quarried Bluestone Co.—civil—reversal—Bibas

When the plaintiffs in a civil dispute thought they’d agreed to a settlement with the defendants, they moved to dismiss their suit, which the district court granted. It gave them 60 days to either submit the settlement agreement for its approval or reopen the case and, when neither occurred, the court administratively closed the case. But the settlement fell through and, after the 60-day deadline, the plaintiffs refiled the suit. The district court granted summary judgment for the defendants based on claim preclusion.

Today, the Third Circuit vacated and remanded. The dismissal of the original suit was without prejudice because it was voluntary and it did not explicitly and unambiguously say it was with prejudice, FRCivP 41a. And dismissals without prejudice don’t trigger claim preclusion. The court adopted two clear-statement rules:

For purposes of claim preclusion, we will construe unclear dismissal orders as voluntary rather than involuntary. And we will construe unclear first voluntary dismissals as without prejudice, so they will not preclude relitigating the same claims. Only a clear and explicit statement will suffice to make a dismissal involuntary, or voluntary with prejudice.

Joining Bibas were Hardiman and Greenaway, Jr. The case was decided without oral argument.