More on Rule 41 Dismissals of Actions and Claims

Earlier this year, the Eleventh Circuit reiterated its rule that litigants cannot voluntarily dismiss individual claims under Federal Rule of Civil Procedure 41(a)(1). That portion of the rule permits plaintiffs to voluntarily dismiss “an action without a court order.” So plaintiffs can dismiss only entire actions under Rule 41(a)(1), and attempts to dismiss individual claims are ineffective.

Last week, in Rosell v. VMSB, LLC, the Eleventh Circuit added that litigants cannot voluntarily dismiss individual claims Rule 41(a)(2). That part of Rule 41 permits voluntary dismissals via court order. But, according to the Eleventh Circuit, it also permits the dismissal only of entire actions. So when the litigants in Rosell settled the only unresolved claim, they needed to either obtain a partial judgment under Federal Rule of Civil Procedure 54(b) or amend the complaint to remove the settled claim. Otherwise, there would be no final decision and no opportunity to appeal.

As I said earlier this year, I have my doubts about the “actions-only” interpretation of Rule 41. Rosell only reinforces those doubts.

The Rosell Litigation

Simplifying a bit, Rosell involved three kinds of wage-and-overtime claims. A magistrate judge recommended granting summary judgment for the defendant on two of the claims but leaving a third claim for trial. Before the district court could evaluate the report and recommendation, the parties settled that third claim.

The district court agreed with the magistrate judge and entered summary judgment for the defendant on two of the claims. The district court also approved of the settlement (as Eleventh Circuit caselaw required for that particular type of claim) and directed the parties to file file a joint stipulation of dismissal for the third claim. The parties did so. The plaintiffs then appealed their loss on the other two claims.

The Ineffective Voluntary Dismissal

The Eleventh Circuit dismissed the appeal. It was not clear under which part of Rule 41(a) the third claim had been dismissed. But whether it was done via stipulation under Rule 41(a)(1) or by court order under Rule 41(a)(2), it was ineffective.

As for Rule 41(a)(1), it governs voluntary dismissals without the district court’s involvement:

Without a Court Order. Subject to Rules 23(e), 23.1(c), 23.2, and 66 and any applicable federal statute, the plaintiff may dismiss an action without a court order by filing:

1. a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment; or
2. a stipulation of dismissal signed by all parties who have appeared.

The Eleventh Circuit held in Perry v. Schumacher Group of Louisiana (and reiterated earlier this year in In re Esteva) that Rule 41(a)(1) permits the voluntary dismissal of only entire actions. That’s because the rule speaks of dismissing an “action”—not claims.

As for Rule 41(a)(2), it governs voluntary dismissals via court order. And it includes the same “action” language:

By Court Order; Effect. Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff’s request only by court order, on terms that the court considers proper. . . .

So neither part of Rule 41(a) authorized the dismissal in Rosell. That meant the third claim had not been resolved, so there was no final, appealable decision. To appeal, the parties needed to either obtain a partial judgment under Federal Rule of Civil Procedure 54(b) or amend the complaint to eliminate the third claim.

Doubts About “Actions Only”

As I said in my post about Esteva, I have doubts about the actions-only interpretation of Rule 41. Rosell doesn’t do anything to change that.

I also have some doubts about the Eleventh Circuit’s proffered alternatives. Amending the complaint to remove a claim seems like needless procedural wheel spinning. I also wonder whether such an amendment is proper in a case like Rosell, in which the Eleventh Circuit requires the district court to evaluate the settlement.

As for Rule 54(b), this isn’t what Rule 54(b) is for. I explained as much a few years ago when the en banc Fifth Circuit said district courts can use Rule 54(b) in a similar context. Briefly, the rule exists to slice up for appeal an action that involves multiple claims or parties, so that a resolved part of the case does not need to wait for a traditional end-of-proceedings appeal. Rule 54(b) is thus one way of permitting appeals before the end of district court proceedings. It’s an awkward fit for this scenario—if the parties want to voluntarily dismiss all remaining claims, there is nothing left to split up in the district court, and those proceedings are effectively over.

Even more awkward is Rule 54(b)’s requirement that there be no just reason for delaying an appeal. Once all claims have been resolved—either through court decision or agreement by the parties—there will never be a reason (just or otherwise) for delay. As the dissent from the just-mentioned Fifth Circuit decision explained, this is an odd use of Rule 54(b):

Imagine getting to the end of a movie, watching the credits run to the end, and then seeing a screen permitting you to leave the theater “if there’s no just reason for delay.” What else were you going to do?

Other Rule 54(b) requirements raise similar oddities. District courts entering a partial judgment under Rule 54(b) should consider the relationship between the resolved and pending claims, the potential for accelerating the rest of the litigation, and whether the resolved claims might be mooted by future proceedings. These considerations become irrelevant if all claims have been resolved.

Rosell v. VMSB, LLC, 2023 WL 3398509 (11th Cir. May 12, 2023), available at the Eleventh Circuit and Westlaw