Youssef v. Tishman Construction Corp., 744 F.3d 821

Background

Youssef filed a qui tam action under the federal and New York False Claims Acts alleging a fraudulent billing scheme on publicly financed projects, including One World Trade Center.
The action was filed August 3, 2010 under seal, with the seal repeatedly extended as to intervene decisions by the government.
In December 2011, after the government declined to intervene, counsel stated the plaintiff would dismiss the matter, acknowledging that dismissal required court and government approval.
The U.S. Attorney consented to dismissal without prejudice as to the United States on December 22, 2011, and the district court entered an order dismissing with prejudice as to Youssef and without prejudice as to the United States and New York.
The dismissal was not entered on the docket until September 18, 2012, and counsel later learned of the dismissal with prejudice; Youssef refiled in EDNY in August 2012.
Youssef requested modification to reflect a without-prejudice dismissal; the district court denied and later allowed an appeal; the seal was lifted in October 2012.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Rule 41(a)(1) requires a dismissal without prejudice when filed before any answer or summary judgment.	Youssef argues the letter did not request a with-prejudice dismissal and Rule 41(a)(1) mandates a without-prejudice effect.	Defendants contend the FCA consent and the letter could support a with-prejudice dismissal under Rule 41(a)(1)(B).	Dismissal must be without prejudice under Rule 41(a)(1).
Whether FCA consent changes Rule 41(a)(1) or its presumption of prejudice.	Consent may integrate with Rule 41(a)(1) but does not convert the result to with prejudice absent explicit terms.	Consent aligns with a court-approved dismissal potentially with prejudice.	Consent is incorporated but does not alter the presumption of prejudice absent explicit terms.
Whether the plaintiff's letter can be read as a request for dismissal with prejudice.	The letter stated the plaintiff would not pursue the matter further, not a request for with-prejudice dismissal.	The language effectively requested a dismissal with prejudice.	The letter does not amount to a request for a with-prejudice dismissal.

Key Cases Cited

Commercial Space Mgmt. Co. v. Boeing Co., 193 F.3d 1074 (9th Cir. 1999) (Rule 41(a)(1) dismissal is without prejudice unless stated otherwise)
Yesh Music v. Lakewood Church, 727 F.3d 356 (5th Cir. 2013) (stipulated dismissals presumptively without prejudice)
Balsley v. LFP, Inc., 691 F.3d 747 (6th Cir. 2012) (stipulated dismissals presumptively without prejudice)
Anago Franchising, Inc. v. Shaz, LLC, 677 F.3d 1272 (11th Cir. 2012) (dismissals under Rule 41(a)(1) must explicitly state prejudice)
Green Aviation Mgmt. Co. v. Fed. Aviation Admin., 676 F.3d 200 (D.C. Cir. 2012) (presumption favors without-prejudice dismissal)
Poloron Prods., Inc. v. Lybrand Ross Bros. & Montgomery, 534 F.2d 1012 (2d Cir. 1976) (voluntary dismissal generally does not bar new suit)
In re Paine-Webber Ltd. P'ships Litig., 147 F.3d 132 (2d Cir. 1998) (Rule 41(a)(1) with 23(e) considerations and court approval context)
Bailey v. Shell W. E & P, Inc., 609 F.3d 710 (5th Cir. 2010) (consent requirements under FCA with Rule 41 interplay)
Minotti v. Lensink, 895 F.2d 100 (2d Cir. 1990) (consent rule applying to voluntary dismissals under FCA)
Williams v. Bell Helicopter Textron Inc., 417 F.3d 450 (5th Cir. 2005) (US may opt out for reasons other than merits in qui tam)
De Leon v. Marcos, 659 F.3d 1276 (10th Cir. 2011) (textual de novo review of district court interpretation)
ISC Holding AG v. Nobel Biocare Fin. AG, 688 F.3d 98 (2d Cir. 2012) (textual interpretation of district court orders reviewed de novo)
Pedrina v. Han Kuk Chun, 987 F.2d 608 (9th Cir. 1993) (vacatur/remand remedy for erroneous prejudicial dismissal)