Both state and federal courts have procedural rules that allow a plaintiff to voluntarily dismiss a claim without prejudice and then to refile it within the applicable statute-of-limitations period. However , a plaintiff’ s right to this procedural avenue is not absolute, and courts maintain broad discretion in deciding whether to dismiss a claim with or without prejudice. If a court allows a plaintiff to voluntarily dismiss a time-barred claim without prejudice, the plaintiff may be able to refile the claim in a jurisdiction with a longer statute of limitations. As a result, the defendant loses the ability to assert a statute-of-limitations defense in subsequent litigation. Courts disagree about whether the defendant’s loss of a statute- of-limitations defense constitutes “clear legal prejudice” sufficient to bar voluntary dismissal without prejudice.
This Note explores this disagreement. First, it examines the two ways courts currently decide motions for voluntary dismissal of time-barred claims. Next, it argues that both approaches overlook a fundamental factor: res judicata (claim preclusion). Specifically, courts do not consider that statute-of-limitations dismissals are not claim preclusive in every jurisdiction. To account for the differences in preclusion law, this Note proposes that, as a threshold inquiry, courts should determine what the claim-preclusive effect of a statute-of-limitations dismissal would be. Based on this determination, a court can decide whether the loss of a statute-of-limitations defense results in “clear legal prejudice” to the defendant and whether a dismissal without prejudice is warranted.