Lin v. Shanghai City Corp., 950 F.3d 46

Plaintiffs (Lin, Chen, He) are former Joe’s Shanghai employees who pursued multiple lawsuits against the same defendants arising from identical workplace facts: an EDNY collective action (EDNY I), a New York State action (NYS Action), an EDNY individual action (EDNY II), and the present SDNY action.
Lin, Chen, and He joined the EDNY I collective; the EDNY I court denied adding them as named plaintiffs for Chinatown and denied certification for that location.
The NYS Action (same defendants, similar facts) was voluntarily dismissed by plaintiffs on February 9, 2018. Plaintiffs then filed EDNY II (adding FLSA and § 7434 claims) and promptly dismissed it, later filing the present SDNY suit with materially identical allegations.
Defendants opposed a later voluntary dismissal in the SDNY case, invoking Fed. R. Civ. P. 41(a)(1)(B) (the two‑dismissal rule) and asked for dismissal with prejudice. The district court treated that opposition as a cross‑motion for summary judgment as to Lin, Chen, and He, invited further submissions, received none, and granted summary judgment dismissing those plaintiffs under Rule 41(a)(1)(B); claims by putative opt‑ins were dismissed without prejudice.
The Second Circuit affirmed, holding plaintiffs had notice and opportunity regarding the possible conversion to summary judgment and that the two prior voluntary dismissals were "based on or included the same claim" because they arose from the same transaction or occurrence.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court could treat defendants' opposition as a cross‑motion and grant summary judgment sua sponte	Plaintiffs argued they lacked proper notice and opportunity to meet a summary‑judgment showing	Defendants argued their opposition and the court's invitation for briefing provided sufficient notice	Court held plaintiffs had reasonable notice and opportunity; conversion to summary judgment was proper
Whether Rule 41(a)(1)(B) bars re‑litigation when prior dismissals involved different legal claims (e.g., state claims versus later federal FLSA claims)	Plaintiffs argued the NYS Action did not include FLSA claims, so the SDNY claims are not the "same claim" under Rule 41	Defendants argued the rule applies when actions arise from the same transaction or occurrence, even if legal theories differ	Court held Rule 41 applies where the later suit arises from the same transaction/occurrence; adding new causes of action does not evade the rule
Whether plaintiffs' argument that the EDNY II dismissal was involuntary can save them from Rule 41	Plaintiffs contended the EDNY II dismissal was involuntary (raised on appeal)	Defendants maintained the claim is waived and insufficient to avoid the two‑dismissal rule	Court deemed the involuntariness argument waived because it was raised first on appeal and affirmed dismissal

Schwan‑Stabilo Cosmetics GmbH & Co. v. Pacificlink Intern. Corp., 401 F.3d 28 (2d Cir. 2005) (district courts may grant summary judgment sua sponte in certain circumstances)
Villante v. Dep’t of Corr., 786 F.2d 516 (2d Cir. 1986) (conversion inquiry asks whether opposing party reasonably should have recognized possibility of conversion)
Ramsey v. Coughlin, 94 F.3d 71 (2d Cir. 1996) (sua sponte summary judgment requires full and fair opportunity to respond)
Biondo v. Kaledia Health, 935 F.3d 68 (2d Cir. 2019) (standard of review for summary judgment is de novo)
Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588 (2d Cir. 1993) (motion papers that could lead to summary judgment may constitute adequate notice)
Commercial Space Mgmt. Co. v. Boeing Co., 193 F.3d 1074 (9th Cir. 1999) (analogizing Rule 41(a)(1) to res judicata principles)
Manning v. S.C. Dep’t of Highway & Pub. Transp., 914 F.2d 44 (4th Cir. 1990) (applying Rule 41(a)(1) in a res judicata‑like manner)
Greene v. United States, 13 F.3d 577 (2d Cir. 1994) (issues raised for first time on appeal are generally waived)