Stipulation of Dismissal in Federal Court Explained

What is a Stipulation of Dismissal?

Plaintiffs themselves can move a court to dismiss a case. Federal Rule of Civil Procedure 41(a)(1)(i) says that a plaintiff has a right to dismiss a case without prejudice (meaning the plaintiff can refile it later) "before the opposing party serves either an answer or a motion for summary judgment." That means when the defendant has not yet put up a fight over the merits of the case, the plaintiff can simply dismiss it. Even if the defendant has served an answer or a motion for summary judgment, the plaintiff can dismiss the case if the defendant signs a stipulation of dismissal.
A stipulation of dismissal is when both parties agree to dismiss a case. Since the dismissal is based on an agreement, it is generally not based on an admission of liability, but rather because the plaintiff no longer wants to pursue a litigation path at this point in time . A stipulation of dismissal can be for one or more of the claims, crossclaims, counterclaims or third-party claims in the action, and it can be filed at any time before a court has adjudicated the substantive issues in a federal case. The plaintiff’s right to dismiss a case under Rule 41(a)(1)(i) without involving the court is limited, however, because the opposing party must sign or otherwise agree to the stipulation of dismissal. This right is available only if the defendant has not already filed a responsive pleading (such as an answer to the complaint) or a dispositive motion (such as a motion to dismiss the complaint on grounds such as a lack of jurisdiction or a failure to state a claim).

The Legal Effect of a Stipulation of Dismissal

While the procedural (and administrative) aspects of a stipulation of dismissal in federal court can become somewhat complex, the legal implications are relatively clear. The provisions that will have the most weight in a federal court stipulation of dismissal are those related to federal law and policy. There are implications for the parties involved, as well as for future litigation before the courts. Federal Rules of Civil Procedure 41 (a) (1)(A)(ii) permits a plaintiff to voluntarily dismiss the action "by filing… a stipulation of dismissal signed by all parties who have appeared." While it’s clear that such a stipulation is preferable to an issue or concern related to a matter not explicitly addressed in the complaint, it is important to keep in mind that the general rule still applies – that the court must then enter the stipulation as an order. (Many courts, such as the Western District of Texas, make this a requirement or part – sometimes the dominant part – of the local process.) Because of that, a stipulation of dismissal requires consent from both the plaintiff and defendants, to the extent they have appeared in the case. If the defendant does not agree to the stipulation of dismissal, the plaintiff cannot unilaterally dismiss the case without an opportunity to be heard in federal court (in many states, the plaintiff only needs to file a notice of dismissal, without giving the defendant an opportunity to oppose it). For both parties, it is essential to consider the effect of the stipulation of dismissal on any potential counterclaims. This is particularly important in cases where it might benefit the counterdefendant to leave the pleading alive, but without an active hearing on it. Another issue often faced is that of an amendment of the complaint prior to dismissal. This is sometimes done to correct an error or to settle a dispute between parties (such as claims between defendants). In both of these situations, counsel must be aware of the effect of the stipulation of dismissal on matters not necessarily accounted for directly in the stipulation, procedures, or the amended complaint. In short, the consent of all parties that have appeared in the case must be obtained prior to stipulation of dismissal. For the defendant, doing so allows the litigant to preserve a cause of action, while also providing the opportunity to fully litigate the matter simultaneously.

Filing a Stipulation of Dismissal

Filing a Stipulation of Dismissal requires parties to follow Federal Rules of Civil Procedure ("FRCP") 41. FCRP 41 governs the dismissal of claims, so a Stipulation of Dismissal is just one option under Rule 41 that allows for a dismissal by agreement of the parties. Rule 41(a)(1)(A)(i) allows for a plaintiff to unilaterally dismiss their complaint without a court order. Your dismissal on that ground will be effective after you filed the notice of dismissal. As stated in the Rule, however, if your pleading sought "relief that statutorily requires court approval, [the court’s] approval may be required before dismissal can take place…" Rule 41(a)(1)(A)(ii) provides that a plaintiff can dismiss their complaint by filing a stipulation signed by all appearing parties. This is also known as a Stipulation of Dismissal. The Stipulation of Dismissal should state either that the parties agreed to dismiss the action or the specific claims that each party agreed to dismiss. FRCP 41(a)(1)(A)(ii). A Stipulation of Dismissal automatically ends the case without a court order, provided that it is filed before the opposing party submits an answer or a motion for summary judgment. FRCP 41(a)(1)(A)(ii). If there are multiple parties, all must agree to the Stipulation of Dismissal. See FRCP 41(a)(1)(A)(ii). For more complicated cases, you may consider entering a Stipulation of Dismissal that is with a court order. Under Rule 41(a)(1)(B): "Unless the notice or stipulation states otherwise, the dismissal is without prejudice." This type of Stipulation is more appropriate for cases involving multiple parties if only a single party wishes to stipulate to the dismissal of the entire case. This also provides the court with the opportunity to review the terms of the dismissal and decide if the proposed dismissal is appropriate for the case. However, if all parties agree that the action should be dismissed and that the dismissal request is appropriate, obtaining a court order is not necessary. Under FRCP 41(a)(2): "Except as provided in this rule, an action may be dismissed on terms that the court considers proper." As one federal court has recognized, FRCP 41(a)(1)(ii) is permissive, giving a party less leeway than Rule 41(a)(2): Some district courts have construed FRCP Rule 41(a)(2) as requiring consent from every defendant, but the [Second Circuit] has held that "Rule 41(a)(1)(ii) speaks of actions, while 41(a)(2) refers to dismissals that purport to dispose of the action, and should not be construed as mandating the sort of ‘all or nothing’ approach applied by certain districts to 41(a)(2). The problem with that approach is that it seeks to defeat the very purpose of 41(a) by turning a dismissal without prejudice into one with prejudice. Van Der Veen v. Quigley, 525 F. Supp. 2d 606, 608-609 (S.D.N.Y. 2007), quoting out Adams v. Fed. Express Corp., 524 F.2d 810, 813 (2d Cir. 1975). Thus, if the court finds that the proposed Stipulation of Dismissal is appropriate (i.e., voluntary and fair), then a dismissal with the court order will be granted. The courts recognize that a stipulation of dismissal will be denied only on very narrow grounds: "the standard for granting a FRCP Rule 41(a)(2) dismissal is abuse of discretion, with the grounds for denial limited to the presence of fraud, collusion between the parties, and tortious conduct such as abandonment of grounds merely to get rid of a defendant or to avoid an obligation, or subsequent re-litigation of the same subject matter." Van Der Veen 525 F. Supp. 2d at 609, citing 10 James Wm. Moore et al., Moore’s Federal Practice § 41.40 (3d ed. 2006). In summary, in order to file a Stipulation of Dismissal: (1) The cases must not have been submitted to the opposing party (the complaint must still be read); (2) Other procedural rules must not apply; (3) All parties must sign the Stipulation of Dismissal; and (4) Parties must file the Stipulation of Dismissal without a court order as soon as possible.

Stipulation of Dismissal: Voluntary or Involuntary?

The distinction between a voluntary and involuntary dismissal is important in the Federal Courts because the Federal Rules of Civil Procedure do not provide for an automatic stipulation of dismissal in the event of a private settlement, even when the rights of the parties are unsettled.
A stipulation of dismissal may be either voluntary or involuntary. A voluntary dismissal occurs when the litigants themselves stipulate that the case should be dismissed. This stipulation can be "of any litigant" or "jointly" by all litigants providing that the parties have not stipulated to the contrary. An involuntary dismissal occurs when the court dismisses a case, as part of a court-ordered remedy or sanction, or pursuant to its inherent power.
A voluntary dismissal will generally insulate the parties against future claims involving the same subject matter, or even a very similar subject matter. Involuntary dismissals do not necessarily provide the parties with the same protection. When a court enters an involuntary dismissal, it does not automatically have the same res judicata or claim preclusion effect on future claims. Thus, the nature of the type of dismissal entered makes a difference in the future disposition of the claims. Even a stipulation of dismissal under Rule 41(a)(1)(A) can be considered a form of voluntary dismissal, depending on the intent and circumstance, even when the case may be labeled as dismissed with prejudice. Voluntary dismissals allow for the parties to litigate their rights effectively and achieve the goals that they have mutually agreed upon based on their voluntary stipulation.

Reasons for a Stipulation of Dismissal

Parties often file a Stipulation of Dismissal in federal court for a variety of reasons, either alone or at certain milestones during litigation. A common reason is when the parties have reached a settlement agreement and seek to terminate the litigation. In such cases, Rule 41(a)(1)(A)(ii) allows for the parties, who must be the "plaintiff[s]" and the "defendant[s]" in the case, to voluntarily dismiss the case by filing a stipulation along with their signature or the signature of their respective attorney(s). The parties must sign the stipulation "before the filing of a responsive pleading" or "before trial" if no responsive pleading is allowed, and contemporaneously file it with the court. Ill. 2014). Individually dismissed claims may also result from a stipulation. Parties may stipulate to the dismissal of particular individual claims or parties while continuing in litigation on other claims or aspects of the case. Where this is the case, the stipulated dismissal is either accomplished without obtaining consent from the court, or, where previously ordered, with the consent of the court. (See, e.g., Fed. R. Civ. P. 41(a)(2) (2018).) In order to dismiss specific claims, parties may employ a "pocket filing" rather than a formal stipulation which is filed with the court. See, e.g., Mullen v. Conley, No. 6:09-cv-62-MP-GRJ, 2010 WL 11507948, at *1 (N.D. Fla. Mar. 30, 2010) ("The Court is aware that the parties have filed a joint notice of non-opposition to Dr. Mullen’s motion to dismiss plaintiff’s Eighth Amendment claim. Although the Court has not received a formal stipulation of dismissal as contemplated by Fed.R.Civ.P. 41(a)(1)(ii) , the parties’ notice was filed pursuant to the Court’s earlier order providing that Dr. Mullen might file a "pocket filing" to timely dismiss the Eighth Amendment claim…. Because the parties have not specifically stated that the dismissal is with or without prejudice, the Court will treat the claim as having been voluntarily dismissed without prejudice…. The Clerk is directed to dismiss the Eighth Amendment claim against Dr. Mullen."). Further, parties may file a stipulation in order to obtain leave of the court to file a response to a motion or a reply to an opposition, even though motions in federal cases typically require a period of time for the non-filing party to respond. For example, as with dismissal of particular claims, the parties might agree to forego or temporarily set aside the court-ordered schedule to permit the respondent or reply party to respond or reply to motions. (See, e.g., Fed. R. Civ. P. 41(a)(2) (2018).) Moreover, a party might seek a stipulation so as to obtain leave of the court to amend a pleading or to extend a schedule for later filings. Compassionate individuals who work to ensure that particular matters are dismissed, such as a specific claim or a particular individual, often seek to resolve substantive issues regarding the now-dismissed matter for the purpose of facilitating the remaining parts of the case. In instances of dismissed claims or individual defendants, dismissal might be contingent on the parties resolving such issues, or other unresolved issues that present significant challenges to completing litigation of the remaining parts of the case. An order dismissing particular claims or individual defendants, provides the parties with an opportunity to resolve the remaining issues. These reasons and others might provide the impetus for a party to seek a stipulation.

Effect on the Record and Closing the Case

The entry of a stipulation of dismissal leads to a formal closure of the case. Although the case is effectively resolved with the signing of the agreement, a stipulation of dismissal has no legal effect at either the state or federal level until it is filed in the case. Both courts require that a stipulation of dismissal be filed with the court if the case is to be formally closed. The parties to the dismissal may file the agreement with the court. In federal court, Local Rule 41.1 requires the parties tender a Proposed Order of Dismissal at the time of filing a stipulation of dismissal. The Proposed Order must be submitted on a separate document. The header of the document must include the caption of the case, the docket number of the case, and the title of the document ("Stipulation of Dismissal with Prejudice and Order"). The Proposed Order does not need to be signed or filed as a separate document; simply tendering the Proposed Order with signature lines for the court to sign the document satisfies the requirement. Unlike dismissals entered by the court, ProSe litigants are required to serve the stipulation of dismissal on the parties listed in the cloned distribution list. A copy of the stipulation must be filed with the Federal Circuit Court of Appeals within 60 days of any dismissal by the district court to complete the formal action and to be reflected in the official record.

Stipulation of Dismissal Frequently Asked Questions

1. What is a stipulation of dismissal in federal court?

A stipulation of dismissal is an agreement between the parties in a lawsuit to end the case. Under Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure, parties can file a stipulation of dismissal before their case goes to trial, and the clerk of the court will enter an order ending the case.

2. Do I have to file a stipulation of dismissal or can I use another method to end my case?

The stipulation is the simplest method to end a case. The Rule allows it to occur without a court order. But if a complaint has also been dismissed as to one defendant by an order or agreement, then the case must be ended by an order of the court or a stipulation signed by all parties who have appeared in the action. In general, an order (signed by the judge) is required when a defendant has previously filed a responsive motion or pleading. An answer or motion to dismiss with an answer accompanying it constitutes a responsive pleading. If this is the case, an order, or a stipulation signed by all parties who have appeared, must be filed with the court.

3. Even if the defendant has filed an answer, why would I want to use a stipulation of dismissal to end my case instead of getting a judge’s order dismissing the case?

Parties often enter into stipulations of dismissal to resolve issues such as no longer needing to proceed against a particular defendant. The stipulation of dismissal is a simpler and easier route than filing a motion with the court, which has to go through certain steps before the judge can sign the order of dismissal. A judge will not only be involved if your case is in the unusual situation where all parties have not signed the stipulation.

4. Will a stipulation of dismissal prevent me from bringing the lawsuit against the same defendant again?

It depends on the way that the stipulation is worded. Usually , the case is dismissed with prejudice unless otherwise stated. If the parties want to reserve the right to re-assert the action, the language in the stipulation should indicate that the defendants can be sued in the future on the same grounds. However, if all parties are on board, there is usually no need to re-litigate the same issue.

5. Can I change my mind after a stipulation of dismissal is filed and have the case be heard by the court?

The simple answer is: not usually. Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure provides that "A stipulation of dismissal filed at any time before the trial or hearing begins—except as to any claim for relief not dismissed in the order—automatically terminates the action." The Plaintiff cannot unilaterally resume the action once the stipulation has been filed.
When a stipulation of dismissal is filed, the case is resolved before a judge has had a chance to hear the case. When there is a dismissal request that the court has not yet ruled upon, the matter is still before the court. If the court has dismissed the case, then the court will not have any further involvement in the case. In many cases, the parties may have entered into a settlement agreement that sets forth conditions for the resolution. If that is the case, the terms detailed in the agreement control the dismissal.

6. Will a stipulation of dismissal prevent me from other forms of legal action, like arbitration or a similar lawsuit?

No, a stipulation of dismissal will not limit the plaintiff’s ability to pursue other legal claims. But, if the plaintiff wants to proceed with another action, the essential elements of the action must be absolutely the same as what was set forth in the first lawsuit.