Tennessee Supreme Court Reconciles Federal Rules on Voluntary Dismissal with Tennessee’s Three-Dismissal Rule

The Tennessee Supreme Court recently ruled that two voluntary dismissals – one in a California state court and one in a Tennessee federal court – do not preclude a plaintiff from re-filing an action based on the same claims in a Tennessee state court.

In Cooper v. Glasser, the court analyzed Rule 41 (a)(1)(B) of the Federal Rules of Civil Procedure and Rule 41.01(2) of the Tennessee Rules of Civil Procedure.

The federal Rule 41 provides that a plaintiff’s notice of dismissal is “without prejudice” unless the plaintiff previously dismissed any action (federal or state) based on the same claims.

Tennessee’s Rule 41 (the “three-dismissal rule”) is unique in the Nation and provides that a voluntary dismissal by a plaintiff is on the merits if the plaintiff has twice dismissed any action in any court (federal or state) based on the same claims.

These rules are in conflict – in federal court, a plaintiff can only dismiss and re-file a case one time. (Remember too that one has to get court permission to voluntarily dismiss a case in federal court.)  However, in Tennessee state court, a plaintiff can dismiss and refile a case two times.

In Cooper, the plaintiff originally filed the case in a California state court and then voluntarily dismissed the case. The plaintiff re-filed in federal court in Tennessee and the federal court exercised supplemental jurisdiction over plaintiff’s state law claims. The plaintiff again dismissed the case, and attempted to re-file in a Tennessee state court. The trial court granted summary judgment to the defendant finding that the federal rule controlled, and the Court of Appeals affirmed. 

The Tennessee Supreme Court reversed the case relying on the U.S. Supreme Court’s holding in Semtek International Inc. v. Lockheed Martin Corp., in which the Court held that a federal district court exercising diversity jurisdiction should apply the claim-preclusion law of the state in which the federal court sits. Conversely, in federal question cases, the federal rules control. 

The Tennessee Supreme Court acknowledged that Semtek did not directly address whether federal or state claim-preclusion law controls supplemental state law claims filed in federal court. However, the court found that supplemental state law claims are more akin to diversity cases then federal question cases because they require the federal courts to apply and interpret substantive state law. 

Thus, the Tennessee Supreme Court held that the dismissal of the supplemental state law claims in federal court did not preclude the re-filing of the claims in a Tennessee state court under Tenn. R. Civ. P. 41.01(2) since that dismissal was the second dismissal of the claims. However, the court noted that a plaintiff who twice dismisses supplemental state law claims in a federal court will be barred from bringing the same claims in the same federal court.

Confused?  I am.  This stuff is complicated and is extremely fact intensive.  Do not take a voluntary dismissal of any claim without doing your own research and determining exactly what right, if any, to re-file you will have if you decide to do so.  And, if you are a lay person who is trying to decide whether or not to dismiss a claim but may want to re-file it, do not do so without consulting a lawyer first.  This case must be read in conjunction with Tennessee’s saving statute to get a full understanding of what rights survive.  And, if you have a lawsuit pending in another state, all of this means absolutely nothing to you and your out-of-state case.

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