Tenth Circuit Holds District Court May Not Use Fed. R. Civ. P. 60(b) to Reopen a Case Voluntarily Dismissed Under Fed. R. Civ. P. 41(a), Creating Split with the Fifth Circuit

In Waetzig v. Halliburton Energy Services, No. 22-1252 (10th Cir. Sept. 11, 2023), a 2-1 panel of the Tenth Circuit holds that a district court lacks power under Rule 60(b) to reopen a case voluntarily dismissed by a plaintiff under Rule 41(a), because such a dismissal is not a “a final judgment, order, or proceeding.”

“Gary Waetzig commenced an age discrimination lawsuit in the District of Colorado against his former employer, Halliburton Energy Services, Inc. Because he was contractually bound to arbitrate his claim, he voluntarily dismissed his suit without prejudice under [Rule 41(a)(1)(A)(i)] and commenced arbitration. The arbitrator sided with Halliburton. Dissatisfied with the outcome, Mr. Waetzig returned to federal court. But instead of filing a new lawsuit challenging arbitration [under 9 U.S.C. § 10], he moved to reopen his age discrimination case and vacate the arbitration award. Relying on Rule 60(b), the district court concluded it had jurisdiction to consider Mr. Waetzig’s motion, reopened the case, and vacated the award.”

“Specifically, the court concluded that Rule 60(b) applied because (1) Mr. Waetzig mistakenly failed to stay the case pending arbitration rather than dismissing it, and (2) that mistake caused Mr. Waetzig to forfeit his ability to refile a new cause of action in federal court because of an intervening Supreme Court case interpreting FAA jurisdiction: Badgerow v. Walters, 142 S. Ct. 1310 (2022).” The district court then tossed the arbitration award on the ground that the arbitrator exceeded their authority.

The Tenth Circuit reverses and remands. “This appeal presents an open question in this circuit: Can a district court use Rule 60(b) to vacate a plaintiff’s voluntary dismissal without prejudice? . . . . As we explain, a voluntary dismissal without prejudice under Rule 41(a) divests the district court of subject-matter jurisdiction to consider a Rule 60(b) motion to reopen.”

The panel majority first observes that the plaintiff’s dismissal of an action under Rule 41(a)(1)(A)(i) is automatic and divests the district court of jurisdiction. “And the dismissal is without prejudice unless the notice states otherwise or the plaintiff previously dismissed a suit that included the same claim. Fed. R. Civ. P. 41(a)(1)(B).” Meanwhile, Rule 60(b) applies only to reopen “a final judgment, order, or proceeding.” Because a Rule 41(a)(1)(A)(i) dismissal is neither an order (it is entered without action by the court), nor a final judgment (it is without prejudice), Rule 60(b) may only apply if the dismissal is a “final . . . proceeding.”

The panel majority observes that there is “sparse” authority about what constitutes a “final proceeding.” Canvassing older cases, dictionaries dating back to the adoption of Rule 60, and other resources, it concludes that “a final proceeding must involve, at a minimum, a judicial determination with finality. As when a court issues an order or enters a judgment, there must have been some sort of determination. And there must be finality, so the matter has come to an end.”

The panel majority notes that the Fifth Circuit, in the “most robust consideration of the question,” held in Yesh Music v. Lakewood Church, 727 F.3d 356 (5th Cir. 2013) (2-1), that a Rule 41(a) voluntary dismissal without prejudice was a final proceeding. But the Tenth Circuit disagrees. It first notes that there is no judicial determination to a Rule 41(a) voluntary dismissal; the court takes no action on such a dismissal at all. Moreover, “the overarching dispute between the parties has not been resolved . . . . No rights have been determined. And no one has been burdened by court action, a requirement for Rule 60(b) relief. By choosing to dismiss without prejudice, the plaintiff is leaving the door open for a future suit.” Thus, absent a final proceeding, a district court has no power under Rule 60(b) to overturn a Rule 41(a) voluntary dismissal.

Dissenting, Judge Matheson would hold that the plaintiff’s Rule 41(a) dismissal became final “when Mr. Waetzig filed his Rule 60(b) motion because he lacked a federal forum due to the arbitration and an intervening Supreme Court decision . . . . [While the] majority would measure finality when Mr. Waetzig filed his Rule 41(a)(1)(A)(i) motion . . . , [finality] should be assessed when Mr. Waetzig filed the Rule 60(b) motion. Under this view, a court determines the finality of a proceeding under Rule 60(b) at the time it is asked to review that proceeding—not when the proceeding occurred.”