PastPaperHero | Verdicts and judgments - Defaults and dismissals

Learning Outcomes

This article examines defaults and dismissals in federal civil litigation under the Federal Rules of Civil Procedure, emphasizing their requirements, consequences, and exam‑relevant nuances, including:

identifying when a party is in default and distinguishing entry of default from entry of default judgment under Rule 55;
determining when the clerk may enter a default judgment and when a judge must do so;
applying the standards for setting aside an entry of default or default judgment under Rules 55(c) and 60(b);
distinguishing voluntary dismissals under Rule 41(a) from involuntary dismissals under Rule 41(b) and assessing their preclusive effect;
spotting common MBE traps involving the two-dismissal rule, jurisdictional dismissals, Rule 60 relief, and “on the merits” language in Rule 41(b);
analyzing how defaults and dismissals interact with claim preclusion, final-judgment rules under Rule 54 and 28 U.S.C. § 1291, and partial final judgments under Rule 54(b);
comparing dismissals that operate as adjudications on the merits with those based on jurisdiction, venue, or party joinder that do not bar refiling;
integrating relief mechanisms under Rule 60(a) and 60(b) into default and dismissal fact patterns to evaluate whether a judgment can be modified or set aside.

MBE Syllabus

For the MBE, you are required to understand how lawsuits conclude prior to a full trial on the merits through defaults or dismissals, and the implications of these conclusions, with a focus on the following syllabus points:

The process for entry of default and default judgment under FRCP 55.
The distinction between “entry of default” and “default judgment,” and their respective consequences.
When the clerk may enter a default judgment and when a court order is required.
The requirements and effects of voluntary dismissal under FRCP 41(a), including the two-dismissal rule.
The grounds and effects of involuntary dismissal under FRCP 41(b), including which dismissals are “on the merits.”
The standards for setting aside an entry of default or a default judgment under FRCP 55(c) and FRCP 60(b).
The basic principles of claim preclusion (res judicata) as applied to defaults and dismissals.
How Rule 60(a) and 60(b) operate as post-judgment relief mechanisms in default and dismissal contexts.
How federal final-judgment rules (including partial final judgments under Rule 54(b)) interact with defaults and dismissals for appeal and preclusion purposes.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

A defendant fails to plead or otherwise defend an action. The clerk notes this failure on the docket. This notation is referred to as:
1. Default Judgment
2. Involuntary Dismissal
3. Entry of Default
4. Voluntary Dismissal
Which of the following dismissals typically operates as an adjudication on the merits, barring the plaintiff from refiling the same claim?
1. Voluntary dismissal by plaintiff before the defendant serves an answer or motion for summary judgment.
2. Dismissal for lack of subject matter jurisdiction.
3. Involuntary dismissal for failure to prosecute.
4. Dismissal for improper venue.
Under FRCP 55, when can the clerk enter a default judgment without involving the judge?
1. Whenever the defendant fails to appear.
2. Only if the defendant has appeared but failed to plead.
3. When the plaintiff's claim is for a sum certain and the defendant has failed to appear.
4. Never; the judge must always enter a default judgment.
A plaintiff files an action in federal court. Before the defendant answers, the plaintiff files a notice of dismissal. One month later, the plaintiff files the same action against the same defendant in the same federal court. Again, before the defendant answers, the plaintiff files a notice of dismissal. What is the effect of the second notice of dismissal?
1. It is without prejudice, allowing the plaintiff to file again.
2. It operates as an adjudication on the merits (with prejudice).
3. It requires court approval to be effective.
4. It converts the action into an involuntary dismissal.
A federal court dismisses a case “for failure to state a claim” under Rule 12(b)(6), and the order is silent about prejudice. Which statement is most accurate for MBE purposes?
1. The dismissal is without prejudice and never has claim-preclusive effect.
2. The dismissal is with prejudice and generally operates as an adjudication on the merits.
3. The dismissal is jurisdictional and therefore never preclusive.
4. The dismissal is automatically certified as final under Rule 54(b).

Introduction

Not all lawsuits proceed through a full trial to a verdict on the merits. The Federal Rules of Civil Procedure provide mechanisms for terminating actions earlier, either due to a party's failure to participate (defaults) or through various forms of dismissal. Understanding these procedural tools, their requirements, and their consequences—particularly their preclusive effect on future litigation—is essential for tackling Civil Procedure questions on the MBE.

On the exam, defaults and dismissals often appear at the end of a fact pattern, and you are asked whether a future suit is barred, whether the clerk or the judge has authority to act, or whether a party can obtain relief from a judgment that has already been entered. These issues are tightly linked to other procedural topics, especially subject-matter jurisdiction, personal jurisdiction, and claim preclusion. A technically improper default or dismissal might be void, while a properly entered order may end the case forever.

This article focuses on:

Default and default judgment under FRCP 55.
Voluntary and involuntary dismissal under FRCP 41.
Relief from judgments and orders under FRCP 60.
How these dispositions affect claim preclusion (res judicata) and finality under Rule 54.

Key Term: Default
A failure by a party (usually the defendant) to respond to pleadings or otherwise defend an action as required by the rules.

Key Term: Entry of Default
A formal notation by the clerk on the docket that a party is in default for failing to plead or otherwise defend within the time allowed.

Key Term: Default Judgment
A binding judgment entered in favor of a plaintiff when the defendant has failed to plead or otherwise defend the action.

Key Term: Voluntary Dismissal
Termination of an action at the plaintiff’s request, either by notice, by stipulation, or by court order, under Rule 41(a).

Key Term: Involuntary Dismissal
Termination of an action against the plaintiff’s wishes, typically for failure to prosecute, failure to comply with rules or court orders, or failure to state a claim, under Rule 41(b).

Key Term: Dismissal With Prejudice
A dismissal that operates as an adjudication on the merits, barring the plaintiff from bringing the same claim again against the same defendant.

Key Term: Dismissal Without Prejudice
A dismissal that does not operate as an adjudication on the merits, allowing the plaintiff to refile the same claim later (subject to the statute of limitations).

Key Term: Relief from Judgment (FRCP 60)
A procedural mechanism allowing a court, under specific circumstances (like mistake, fraud, or voidness), to set aside a final judgment, order, or proceeding.

Key Term: Claim Preclusion (Res Judicata)
A doctrine that bars a party from relitigating a claim that was, or could have been, raised and decided in a prior action resulting in a valid final judgment on the merits between the same parties.

Key Term: Sum Certain
A monetary amount that is either fixed in the pleadings or can be determined by simple arithmetic from definite figures, without judicial fact-finding (for example, a liquidated debt plus a specified interest rate).

Key Term: Two-Dismissal Rule
The Rule 41(a)(1)(B) principle that a plaintiff’s second voluntary dismissal by notice of an action based on or including the same claim operates as an adjudication on the merits.

Key Term: Adjudication on the Merits
A disposition that resolves the substantive rights of the parties (as opposed to dismissals on purely procedural or jurisdictional grounds) and can support claim preclusion.

Key Term: Void Judgment
A judgment that is a legal nullity because the court lacked subject-matter jurisdiction, personal jurisdiction, or violated fundamental due process; it may be attacked at any time under Rule 60(b)(4).

Key Term: Good Cause (Rule 55(c))
A flexible standard under which a court may set aside an entry of default, usually focusing on the defendant’s culpability, existence of a meritorious defense, and prejudice to the plaintiff.

Key Term: Final Judgment
A decision that leaves nothing for the court to do but execute the judgment—i.e., it resolves all claims against all parties (unless the court makes a Rule 54(b) certification for fewer than all claims or parties).

Key Term: Partial Final Judgment (Rule 54(b))
A judgment that disposes of fewer than all claims or parties, certified by the court as final and immediately appealable when there is “no just reason for delay.”

Understanding these concepts allows you to track where in the life-cycle of a case the fact pattern is situated, and to determine whether the disposition is final and on the merits, and who (clerk vs judge) is permitted to act.

Defaults and Default Judgments (FRCP 55)

When a defendant fails to plead (for example, by filing an answer) or otherwise defend an action after being properly served, the plaintiff can seek a default judgment. This process involves two distinct stages:

Entry of default.
Entry of default judgment.

On the MBE, these two steps are often conflated in distractor choices. The mere fact that the defendant has missed a deadline does not itself give the plaintiff a judgment; it only entitles the plaintiff to ask the clerk to enter the defendant’s default. Only after that has occurred can a default judgment be entered.

When Is a Party “In Default”

A defendant is at risk of default when all of the following are true:

The defendant has been properly served with process (or has waived service).
The time to respond has expired:
- Typically 21 days after service of process in federal court.
- 60 days after the request to waive service is mailed if the defendant waived service.
The defendant has not:
- Filed an answer, or
- Filed a Rule 12 motion, or
- Otherwise “defended” (for example, by moving for summary judgment).

“Otherwise defend” is interpreted broadly. Actions that show an intent to contest the claim—such as filing a Rule 12(b) motion to dismiss, a motion for a more definite statement, or a motion for summary judgment—prevent default even though they are not answers. If that motion is denied, the defendant must then serve an answer within the time set by the rules or by the court; failure to do so risks default.

Several additional nuances are tested on the MBE:

Proper service matters.
A court cannot enter a valid default judgment if the defendant was never properly served or did not receive adequate notice. An appearance without proper service can still support personal jurisdiction (because the defendant consents by appearing), but if service was defective and the defendant never appeared, any default judgment is void and subject to attack under Rule 60(b)(4).
Extensions and stipulations.
If the court extends the time to answer (for example, under Rule 6(b)), the defendant is not in default until that extended period expires. Stipulated extensions between the parties, when approved by the court or consistent with a scheduling order, also defer default.
Multiple defendants.
Each defendant is treated separately. One defendant may be in default while others timely respond. A default judgment can be entered against the defaulting defendant while the case proceeds against the others, but the court may delay making that default judgment final to avoid inconsistent results (often by withholding Rule 54(b) certification).
Multiple claims.
A defendant might answer some claims and ignore others. The court can enter default on the unanswered claims, while litigating the answered claims. Again, whether a partial default judgment is immediately appealable depends on whether the court certifies it as a partial final judgment under Rule 54(b).
Subject-matter jurisdiction cannot be defaulted.
Even if the defendant never appears, the court must independently ensure it has subject-matter jurisdiction. A default judgment entered without subject-matter jurisdiction is void and must be set aside if challenged.

MBE fact patterns often hide the key issue in the service or timing details. Before concluding that default is proper, always check:

Was service proper?
Has the response time actually run?
Did the defendant do anything that counts as “otherwise defend”?
Does the court have subject-matter jurisdiction?

If any of those is doubtful, a default judgment is vulnerable.

Entry of Default (FRCP 55(a))

The first step is obtaining an entry of default. This is a ministerial notation by the clerk on the court docket signifying that the defendant has failed to plead or defend within the time allowed.

Procedure:
- The plaintiff must request the default and support the request, usually by an affidavit or declaration stating:
  - The date and manner of service.
  - The absence of any responsive pleading or Rule 12 motion by the deadline.
  - Any relevant extensions or stipulations.
- Once satisfied that the record shows a failure to plead or defend, the clerk enters the default on the docket.
Effect:
- Entry of default cuts off the defendant's right to respond as of right. The defendant cannot simply file a late answer; instead, the defendant must move to set aside the default.
- For purposes of liability, the well-pleaded factual allegations of the complaint (other than those relating to the amount of damages) are treated as admitted by the defaulting party.
- Legal conclusions are not admitted by default; the court must still ensure that the complaint states a viable claim.

The court is not required to enter default sua sponte. If the plaintiff does nothing after the defendant misses the deadline, the case can simply sit. On the MBE, be alert to fact patterns where the defendant is “in default” in the colloquial sense (late) but no formal entry of default has occurred. Without the entry, the defendant is still free to answer late unless the court orders otherwise.

Entry of default does not itself award relief. It is essentially an interlocutory step. The plaintiff still must obtain a default judgment before the court’s decision becomes enforceable.

Because courts favor deciding cases on the merits, they tend to be generous in setting aside entries of default (as opposed to default judgments), especially when the defendant acts promptly and shows a plausible defense.

Exam Tip:
If the fact pattern says “the clerk entered Defendant’s default,” ask whether the question is about setting aside the default (Rule 55(c), “good cause”) or about a default judgment (Rule 55(b), requiring either the clerk or the judge). If only an entry of default exists, there is no final judgment yet, and appeal is not available.

Entry of Default Judgment (FRCP 55(b))

After entry of default, the plaintiff must seek a default judgment. This is the actual judgment entered in favor of the plaintiff because of the defendant's default.

In every case, the plaintiff’s recovery on default is limited by Rule 54(c): the default judgment cannot “differ in kind from, or exceed in amount,” the relief demanded in the complaint’s prayer for relief. On the MBE, a plaintiff cannot default a defendant for more money or different relief (for example, an injunction) than was requested in the complaint.

The route to default judgment depends on:

The nature of the claim (sum certain vs unliquidated).
Whether the defendant has appeared.
The identity and status of the defendant (for example, minor, incompetent, United States).

Entry by Clerk (FRCP 55(b)(1))

The clerk must enter a default judgment (without involving the judge) if all of the following are satisfied:

The plaintiff's claim is for a sum certain (or a sum that can be made certain by computation), such as:
- A fixed debt evidenced by a promissory note.
- A simple contract claim where the amount owed can be calculated by a formula using undisputed figures (for example, quantity × price).
- Accrued interest at a specified rate, where the principal and dates are certain.
The default was entered because the defendant failed to appear.
The defaulted defendant is not a minor or incompetent person.
The plaintiff provides:
- An affidavit (or equivalent) stating the amount due; and
- A statement that the defendant is neither a minor nor incompetent.

“Sum certain” is narrow. Claims for personal injuries, emotional distress, lost profits, or pain and suffering are not sums certain, because they require judicial fact-finding and credibility determinations.

Also, the clerk may only act if the defendant has not appeared at all in the action. If the defendant has appeared in any way (for example, by filing a motion, answer, or even formal settlement communications that are filed with the court), the clerk cannot enter default judgment; the plaintiff must proceed under Rule 55(b)(2) and give notice.

Remember that “appearance” is construed broadly. Even a letter to the court expressing an intent to contest the case, or participation in a scheduling conference, can be treated as an appearance.

Entry by Court (FRCP 55(b)(2))

In all other cases, the plaintiff must apply to the court (the judge) for a default judgment.

Examples of when a court order is required:

The complaint seeks unliquidated damages (tort claims, punitive damages, lost profits).
The defendant has appeared in the action.
The defendant is a minor or incompetent person.
The United States, a federal agency, or a federal officer in an official capacity is the defendant.
The complaint seeks non-monetary relief, such as an injunction or declaratory judgment.

The court has discretion whether to enter a default judgment and on what terms. It may consider, among other things, whether:

The complaint states a claim on which relief can be granted.
The court has subject-matter and personal jurisdiction.
The defendant’s conduct appears willful.
Lesser sanctions (such as monetary sanctions) might suffice.

Even for a defaulted defendant, the court must satisfy itself that the well-pleaded allegations, if taken as true, establish liability under some valid legal theory.

Hearings and Evidence

The court may conduct hearings or receive evidence to:

Determine the amount of damages (especially for non-sum-certain claims).
Establish the truth of the allegations.
Investigate any other matter, such as jurisdictional facts or the existence of a meritorious defense.

On default, well-pleaded factual allegations (except as to damages) are taken as admitted, but:

The court may still require proof on key points such as subject-matter jurisdiction, personal jurisdiction, and the factual basis for certain forms of relief (for example, equitable relief).
In a diversity case, the court may require evidence of the parties’ citizenship to ensure it has jurisdiction before entering default judgment.
For punitive damages or attorney’s fees, courts often demand specific evidence even in default situations.

Notice to an Appearing Defendant

If the defaulting party has appeared in the action (for example, by filing any motion, answer, or even by otherwise formally communicating an intent to defend), that party must be served with written notice of the application for default judgment at least 7 days before the hearing.

“Appearance” is construed broadly. Even if the defendant has not filed a responsive pleading, formal communications showing an intent to defend, such as a letter filed with the court or participation in a scheduling conference, can trigger the notice requirement.

If the plaintiff fails to give the required notice, the default judgment is vulnerable to being set aside as procedurally defective under Rule 60(b).

Special Defendants

Different rules apply to certain defendants:

Minors and incompetent persons.
A default judgment may be entered against a minor or incompetent person only if they are represented by a guardian, conservator, or other legally appropriate representative.
United States and federal agencies.
A default judgment against the United States, a federal agency, or a federal officer sued in an official capacity requires evidence that establishes the plaintiff’s right to relief. The court must be satisfied that the claim has merit and that the amount of damages is proper, even if the government fails to appear.
Multiple defendants.
When several defendants are sued on related claims, the court must consider whether entering a default judgment against one defendant before adjudicating the others could lead to inconsistent judgments. The court often delays making the default judgment final until the claims against the answering defendants are resolved, sometimes using Rule 54(b) certification to enter a partial final judgment.

Exam Tip:
If the fact pattern mentions that the defaulting defendant filed a notice of appearance or participated in settlement talks on the record, the clerk cannot enter default judgment under Rule 55(b)(1). A judge must enter any default judgment, and the defendant is entitled to 7 days’ notice of the hearing.

Setting Aside Default or Default Judgment (FRCP 55(c), 60(b))

The rules distinguish between setting aside an entry of default and setting aside a default judgment.

Setting aside an entry of default is governed by Rule 55(c), using the “good cause” standard.
Setting aside a default judgment is governed by Rule 55(c) and Rule 60(b), which impose stricter standards and time limits.

These differences are heavily tested because they change what the moving party must show and how sympathetic the court is likely to be.

Setting Aside Entry of Default

Under Rule 55(c), the court may set aside an entry of default for “good cause”. This is a relatively lenient standard. Courts typically consider three main factors:

Whether the default was willful or intentional, as opposed to the result of mistake, inadvertence, or excusable neglect.
Whether the defendant has a meritorious defense on the merits (the defendant need not prove the defense, but must allege facts that, if true, would constitute a defense).
Whether setting aside the default would prejudice the plaintiff (for example, because key evidence has been lost or there has been significant, harmful delay).

Because an entry of default is not a final judgment, courts often grant relief if:

The defendant moves promptly after learning of the default.
The default was not willful.
There is some plausible defense on the merits.

Prejudice in this context means more than having to continue litigating. It usually requires a showing of concrete harm, such as loss of evidence, increased difficulty of discovery, or spoliation.

Some courts also consider whether the defendant acted in good faith and whether there has been a pattern of dilatory conduct (such as repeated missed deadlines).

Exam Tip:
On the MBE, if the defendant moves quickly, has any colorable defense, and the only “prejudice” is that the plaintiff has to litigate the case, a motion to set aside the entry of default should be granted.

Setting Aside Default Judgment

A default judgment is a final judgment, and thus carries greater weight. Under Rule 55(c), it may be set aside only as allowed by Rule 60(b) (Relief from a Judgment or Order).

Rule 60(b) lists specific grounds for relief:

60(b)(1): Mistake, inadvertence, surprise, or excusable neglect (for example, a calendaring error by counsel, or misunderstanding a deadline).
60(b)(2): Newly discovered evidence that could not have been discovered in time to move for a new trial under Rule 59.
60(b)(3): Fraud, misrepresentation, or misconduct by an opposing party (often called “fraud on the court” when especially serious).
60(b)(4): The judgment is void (for example, because the court lacked subject-matter or personal jurisdiction, or there was a serious due process violation such as lack of notice).
60(b)(5): The judgment has been satisfied, released, or discharged; the judgment is based on an earlier judgment that has been reversed or vacated; or it is no longer equitable that the judgment should have prospective application (typical in injunctions and institutional reform cases).
60(b)(6): Any other reason that justifies relief (a residual, “catchall” provision, used sparingly for extraordinary circumstances not covered by 60(b)(1)-(5)).

Time limits:

Motions under 60(b)(1)–(3) must be made no more than one year after the judgment is entered. This one-year period is absolute; the court cannot extend it.
Motions under 60(b)(4)–(6) must be made within a reasonable time. What is “reasonable” depends on the circumstances, including when the movant learned of the problem, the length of the delay, and potential prejudice to the other side.

A void judgment (for example, entered without personal jurisdiction or in violation of due process) can often be attacked long after entry, provided the delay is not extreme and the judgment has not been relied upon to the parties’ substantial detriment. Courts treat void judgments as legal nullities; they must be set aside if properly challenged.

By contrast, a judgment that is merely erroneous (for example, the court had jurisdiction but misapplied the law) is not void. The remedy is a timely appeal, not Rule 60(b)(4).

Rule 60(b)(6) is not a backdoor to evade the one-year limit on 60(b)(1)-(3). If the real complaint is mistake, excusable neglect, or ordinary fraud, 60(b)(6) cannot be used to end-run around the one-year period.

Exam Tip:
Distinguish between an erroneous judgment and a void judgment. A judgment entered by a court that had jurisdiction but misapplied the law is erroneous and must be attacked by appeal, not by a Rule 60(b)(4) motion. A judgment entered by a court that had no jurisdiction (subject-matter or personal) is void and must be set aside under 60(b)(4).

Rule 60(b) is not a substitute for a timely appeal. It cannot be used merely because a party disagrees with the court’s legal reasoning; it is reserved for specific kinds of problems in obtaining or maintaining the judgment.

Exam Tip:
On the MBE, relief from a void judgment (for example, entered without personal jurisdiction) is available under Rule 60(b)(4), and the one-year limit does not apply. If a party moves within a reasonable time after learning of such a judgment, the court must set it aside.

Worked Example 1.1

Plaintiff sued Defendant in federal court for 100,000 dollars for breach of contract (a sum certain based on the contract terms). Defendant was properly served but failed to file an answer or any motion within the required time. Plaintiff filed an affidavit showing Defendant's failure and requested entry of default, which the clerk entered. Defendant has still not appeared. Can the clerk enter a default judgment?

Answer:
Yes. Under FRCP 55(b)(1), the clerk must enter default judgment if the claim is for a sum certain, the defendant failed to appear, and the defendant is not a minor or incompetent. Here, the claim is for a sum certain (100,000 dollars), Defendant failed to appear, and there's no indication Defendant is a minor or incompetent. Therefore, the clerk can enter the default judgment upon Plaintiff's request and affidavit of the amount due, so long as the judgment does not exceed or differ in kind from the relief demanded in the complaint.

Worked Example 1.2

Plaintiff sued Defendant in federal court. Defendant filed an answer. Plaintiff now wishes to dismiss the case but intends to refile it later in state court. Can Plaintiff simply file a notice of dismissal?

Answer:
No. Because Defendant has served an answer, Plaintiff can no longer voluntarily dismiss by simply filing a notice under FRCP 41(a)(1)(A)(i). Plaintiff must either obtain a stipulation of dismissal signed by all parties who have appeared (FRCP 41(a)(1)(A)(ii)) or obtain a court order granting dismissal (FRCP 41(a)(2)). Dismissal by court order is typically without prejudice unless the court specifies otherwise, but the court can impose conditions (such as payment of costs) to avoid unfair prejudice to Defendant.

Worked Example 1.3

Defendant timely filed a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction but did not file an answer. The court denied the motion, and Defendant failed to answer within the time allowed by the court’s order. Plaintiff obtained an entry of default and now seeks a default judgment. Defendant moves to set aside the entry of default, arguing that his lawyer mis‑calendared the answer deadline but that he has a strong defense on the merits. How should the court rule?

Answer:
The court should likely set aside the entry of default. Under Rule 55(c), an entry of default may be set aside for “good cause.” Here, the default was not willful but resulted from counsel’s mistake, Defendant has a meritorious defense, and Plaintiff has not yet obtained a default judgment. Courts favor resolving cases on the merits and generally find good cause in this situation, especially when the motion is prompt and there is no concrete prejudice to the plaintiff.

Worked Example 1.4

Plaintiff sues Defendant in federal court for negligence. Before Defendant answers or moves for summary judgment, Plaintiff files a notice of voluntary dismissal. Plaintiff then files the same action in state court, later voluntarily dismisses it there as well by filing a notice of dismissal, and finally files the same action again in federal court. Defendant moves to dismiss, arguing that the claim is barred. How should the court rule?

Answer:
The court should dismiss the federal action with prejudice. Under the two-dismissal rule, the second voluntary dismissal by notice of an action “based on or including the same claim” operates as an adjudication on the merits. The second notice (here, in state court) converts that dismissal into a with-prejudice adjudication, barring a third suit on the same claim against the same defendant.

Dismissal of Actions (FRCP 41)

Dismissal under FRCP 41 allows for the termination of an action without a full trial. Dismissals can be voluntary (initiated by the plaintiff) or involuntary (ordered by the court or initiated by the defendant). A key distinction is whether the dismissal is with prejudice (bar to refiling) or without prejudice (refiling permitted, subject to limitations periods).

Rule 41 primarily addresses dismissal of an “action” (the entire case). Dismissal of individual claims within an action is permitted by Rule 41(a)(2) but, in practice, federal courts often treat dropping individual claims or parties as an amendment under Rule 15 or a severance under Rule 21. For MBE purposes, focus on what the rule actually permits (dismissal of the “action”) but recognize that courts sometimes permit dismissal of fewer than all claims under the same mechanisms.

Voluntary Dismissal (FRCP 41(a))

A plaintiff may voluntarily dismiss their own action under certain conditions. Voluntary dismissal is often used to:

Avoid an unfavorable ruling (for example, an imminent summary judgment).
Move the case to a more favorable forum.
Refile after correcting a defect (for example, in the pleadings or in jurisdiction).

The mechanism for voluntary dismissal affects whether court approval is needed and whether the dismissal counts as “with prejudice.”

Dismissal Without Court Order (FRCP 41(a)(1))

There are two ways to dismiss an action without a court order:

By Notice (41(a)(1)(A)(i))
By Stipulation (41(a)(1)(A)(ii))

By Notice (41(a)(1)(A)(i))

The plaintiff can file a notice of dismissal before the opposing party serves either:

An answer, or
A motion for summary judgment.

Key points:

A pre‑answer Rule 12(b) motion (for example, a motion to dismiss for failure to state a claim or for lack of jurisdiction) does not cut off the right to dismiss by notice; only an answer or a summary judgment motion does.
The notice is effective upon filing; no court approval is required, and the dismissal is self-executing.
The dismissal is without prejudice, unless:
- The notice states that the dismissal is with prejudice; or
- The two-dismissal rule applies.

The notice can dismiss the entire action or, in some courts, fewer than all defendants (though some judges prefer use of Rule 21 for dropping parties). On the MBE, if you see “before Defendant served an answer or motion for summary judgment,” think “plaintiff can unilaterally dismiss by notice.”

Remember that a Rule 41(a)(1) dismissal leaves the parties as though the action had never been filed, subject to:

Any costs that may be imposed if the plaintiff later refiles in federal court (Rule 41(d)).
Any statute of limitations problems. Rule 41 does not itself toll limitations; plaintiffs must rely on applicable state “savings statutes.”

By Stipulation (41(a)(1)(A)(ii))

All parties who have appeared can sign a stipulation of dismissal.

The stipulation is effective upon filing; court approval is generally not required.
Unless the stipulation states otherwise, the dismissal is without prejudice.
This method is commonly used to implement settlements. Parties often stipulate to dismissal “with prejudice” as part of a settlement agreement.

A stipulated dismissal does not trigger the two-dismissal rule, because that rule applies only to dismissals by notice.

The Two-Dismissal Rule

Under Rule 41(a)(1)(B), if the plaintiff has previously dismissed any federal or state court action based on or including the same claim, and then files a second notice of dismissal, that second notice operates as an adjudication on the merits.

Important points for the exam:

The first dismissal can be in federal or state court; the second notice can be filed in either system. The rule is indifferent to forum.
The rule applies only to dismissals:
- By notice (not by stipulation or court order).
- By the same plaintiff against the same defendant, based on or including the same claim.
The “same claim” is interpreted broadly, generally following the same “transaction or occurrence” test used for claim preclusion.
The second such notice is treated as a with prejudice dismissal and has claim-preclusive effect, but only as to the parties and claims implicated by the second notice (not necessarily the entire complaint if multiple unrelated claims are in play).

Exam Tip:
Watch for a plaintiff who serially files and then voluntarily dismisses by notice. On the second notice, the dismissal is with prejudice and bars refiling of the same claim, even if the plaintiff did not intend that result. Be sure the fact pattern involves two dismissals by notice, not a notice plus a stipulated dismissal.

Dismissal By Court Order (FRCP 41(a)(2))

If the plaintiff cannot dismiss by notice (because an answer or summary judgment motion has been served), they must obtain a court order.

The court has discretion to grant dismissal “on terms that the court considers proper.”
- Terms may include payment of costs or attorney’s fees to the defendant.
- The court may impose conditions to minimize unfair prejudice to the defendant, such as prohibiting refiling in certain forums or requiring that discovery already taken be usable in any later action.
Unless the order states otherwise, dismissal under 41(a)(2) is without prejudice. The court can specify that the dismissal is with prejudice, particularly if the case has progressed substantially and dismissal would otherwise be unfair to the defendant.
If a defendant has pleaded a counterclaim before being served with the plaintiff’s motion to dismiss:
- The action cannot be dismissed over the defendant’s objection unless the counterclaim can remain pending for independent adjudication (for example, the court has jurisdiction over the counterclaim and it does not depend on the plaintiff’s claims).
- If the counterclaim is closely tied to the plaintiff’s claims and cannot stand alone, the court may deny dismissal or require that the counterclaim proceed separately in a different procedural posture.

Exam Tip:
When a voluntary dismissal is “by court order,” assume it is without prejudice unless the order expressly states otherwise or the context clearly indicates a with-prejudice dismissal (for example, as part of a settlement or as a sanction).

Involuntary Dismissal (FRCP 41(b))

An action may also be terminated involuntarily, typically at the defendant’s request, or on the court’s own motion.

Rule 41(b) provides that, if the plaintiff fails to prosecute or to comply with the rules or a court order, a defendant may move to dismiss the action, or the court may dismiss on its own.

Grounds:
- Failure to prosecute the action (for example, long periods of inactivity, failure to serve, ignoring scheduling orders).
- Failure to comply with the Federal Rules (for example, failure to attend depositions, failure to make required disclosures).
- Failure to comply with a court order (for example, discovery orders, pretrial orders).
- Dismissal under Rule 12(b)(6) for failure to state a claim is treated as a 41(b) dismissal unless the dismissal order states otherwise (for example, “without prejudice” or “with leave to amend”).
Effect:
Unless the dismissal order states otherwise, an involuntary dismissal operates as an adjudication on the merits—that is, with prejudice—which triggers claim preclusion. The plaintiff is barred from bringing the same claim again in federal court (and usually in state court, via full faith and credit).
Exceptions:
Dismissals for the following reasons are not adjudications on the merits and are therefore without prejudice:
- Lack of subject-matter jurisdiction (Rule 12(b)(1)).
- Lack of personal jurisdiction (Rule 12(b)(2)).
- Improper venue (Rule 12(b)(3)).
- Failure to join a required party under Rule 19.

These exceptions are explicitly recognized in Rule 41(b). A dismissal on these grounds does not bar a later suit in a court that has jurisdiction and is a proper venue, though issue preclusion may still apply to specific determinations (for example, a particular court’s lack of jurisdiction).

Due process considerations:
Because an involuntary dismissal with prejudice is a severe sanction, courts generally require:
- Notice to the plaintiff of the risk of dismissal.
- An opportunity to be heard.
- A record showing that lesser sanctions would be inadequate (particularly for dismissals as a sanction for discovery abuses under Rule 37).

On the MBE, you are unlikely to be tested on the details of sanction standards, but you should recognize when a dismissal under 41(b) has preclusive effect and when it does not.

Exam Tip:
A dismissal “for lack of subject-matter jurisdiction” never has claim-preclusive effect on the asserted claim. The plaintiff is free to refile in a court with proper jurisdiction. By contrast, a dismissal “for failure to state a claim” (12(b)(6)), if not accompanied by leave to amend, generally does operate as a judgment on the merits and can support claim preclusion.

Worked Example 1.5

A federal court entered judgment on a jury verdict against Defendant on January 1. On January 20, Defendant discovered a contemporaneous email from Plaintiff admitting that the contract at issue was forged, but Defendant did nothing. Eighteen months later, Defendant moves for relief under Rule 60(b)(2) based on newly discovered evidence. How should the court rule?

Answer:
The motion must be denied as untimely. Motions under Rule 60(b)(1)–(3), including newly discovered evidence under 60(b)(2), must be filed no more than one year after the judgment is entered. Eighteen months is too late. If the judgment were void (for example, for lack of jurisdiction), 60(b)(4) might be available beyond one year, but here the asserted ground is 60(b)(2), which is time-barred.

Worked Example 1.6

Plaintiff sues Defendant in federal court for personal injuries from a car accident. The court dismisses the action “for lack of personal jurisdiction.” Plaintiff then sues Defendant in a state court that clearly has personal jurisdiction based on the same accident. Defendant moves to dismiss on res judicata grounds, arguing that Plaintiff already had her day in court. What result?

Answer:
The state court should deny the motion. A dismissal for lack of personal jurisdiction is not a judgment on the merits and does not have claim-preclusive effect. Rule 41(b) expressly excludes dismissals for lack of jurisdiction from the “adjudication on the merits” default rule. Plaintiff is free to sue in a court that has proper jurisdiction.

Relief from Judgments and Orders (FRCP 60) Beyond Defaults

Rule 60 applies not only to default judgments but to any final judgment, order, or proceeding. Beyond the 60(b) grounds already discussed, note:

Rule 60(a) (Clerical mistakes):
Allows correction of clerical mistakes and errors arising from oversight or omission in a judgment, order, or other part of the record. The court may correct such errors at any time, on its own initiative or on motion. If an appeal is pending, the district court may correct the error only with the appellate court’s leave.
- Examples include mis-typed dates, arithmetic errors in judgment amounts, or misidentification of parties.
- Rule 60(a) is limited to corrections that do not alter the substantive rights of the parties. If the change would alter the result in a meaningful way, 60(a) is not available; the party must use Rule 59 or Rule 60(b).
Interaction with appeals:
If an appeal is pending, the district court has limited power to alter the judgment. Usually:
- The district court may indicate that it would grant a 60(b) motion if it had jurisdiction.
- The appellate court can then remand for that purpose.

On the MBE, you will not be expected to fully understand the procedural subtleties of appellate interaction but must recognize:

The main 60(b) grounds and their time limits.
The difference between clerical corrections under 60(a) and substantive relief under 60(b).
That Rule 60 relief is discretionary (except for void judgments) and does not replace a timely appeal.

Worked Example 1.7

Defendant was never served with the complaint in a federal action and never appeared. Through a credit report, Defendant learns that a default judgment was entered against him 18 months ago. He promptly moves under Rule 60(b) to set aside the judgment, arguing lack of personal jurisdiction due to defective service. How should the court rule?

Answer:
The court should grant the motion. Because Defendant was never properly served and never appeared, the court lacked personal jurisdiction. The default judgment is therefore void and must be set aside under Rule 60(b)(4). The one-year time limit does not apply to 60(b)(4) motions; the only requirement is that the motion be made within a reasonable time after the defendant learns of the judgment. Moving immediately upon discovering the judgment satisfies this requirement.

Claim Preclusion and Defaults/Dismissals

Many MBE questions combine procedure with preclusion doctrine. For claim preclusion (res judicata) to apply, three requirements must be met:

There must be a valid, final judgment on the merits.
The second suit must involve the same claim (often defined broadly as arising from the same transaction or occurrence).
The parties in the second suit must be the same as, or in privity with, the parties in the first suit.

For these purposes:

A default judgment is treated as a judgment on the merits and has claim-preclusive effect, as long as the rendering court had jurisdiction and there was adequate notice.
An involuntary dismissal under Rule 41(b) (other than for jurisdiction, venue, or failure to join a required party) is treated as an adjudication on the merits.
A voluntary dismissal with prejudice (whether by stipulation or court order) is on the merits and precludes later suits on the same claim.
A voluntary dismissal without prejudice (including most first notices of dismissal) is not on the merits and does not bar refiling.
A dismissal for lack of subject-matter jurisdiction, lack of personal jurisdiction, improper venue, or failure to join a required party is not on the merits and does not support claim preclusion, even if the dismissal order uses the phrase “with prejudice.”

Note, however, that jurisdictional determinations can sometimes have issue-preclusive effect. A court’s determination that it lacks subject-matter jurisdiction over a particular type of claim might preclude relitigation of that jurisdictional issue in a later action between the same parties, even though the claim can be pursued in a court that does have jurisdiction.

Exam Tip:
The preclusive effect of a federal judgment—especially a diversity judgment—can be tricky. As a general rule, the preclusive effect of a federal judgment is determined by the law of the court that rendered it. For MBE purposes, focus on whether the first judgment was (1) final and (2) on the merits, subject to the Rule 41(b) exceptions.

Because default judgments are “on the merits” for claim preclusion but issues have not been actually litigated, they ordinarily do not support issue preclusion (collateral estoppel). The same is true for most voluntary dismissals with prejudice: they bar later suits on the same claim but do not necessarily resolve any particular issue for future litigation against different parties.

Finality and Partial Final Judgments (Rule 54(b))

Claim preclusion and appealability both require a final judgment. In multi-claim or multi-party litigation, deciding some claims or parties but not others raises questions about when there is a final judgment.

Rule 54(b) addresses this situation:

If an action presents multiple claims or involves multiple parties, any order that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties, and is not a final judgment, unless:
- The court expressly determines that there is “no just reason for delay,” and
- The court expressly directs entry of judgment as to those claims or parties.

Without a Rule 54(b) certification:

A default judgment against one of several defendants is generally not a final judgment for appeal purposes if claims remain against other defendants.
A dismissal of some, but not all, claims against a defendant may not be final for preclusion purposes until the remaining claims are resolved or the court enters 54(b) certification.

With a proper 54(b) certification:

The judgment is treated as final and appealable.
It can have claim-preclusive effect, even though other claims remain pending in the same action.

On the MBE, you are unlikely to see the detailed mechanics of 54(b) certification, but you should recognize:

Dismissals of an entire action (for example, a Rule 12(b)(6) dismissal of all claims) are final judgments.
Dismissals of some claims or parties in a multi-claim or multi-party case may not be final without 54(b) certification.
Default judgments against fewer than all defendants may be treated as partial judgments and are not automatically final unless the court certifies them under 54(b).

Worked Example 1.8

Plaintiff sued Defendant in federal court for breach of contract. After discovery, Plaintiff repeatedly failed to appear at status conferences and ignored a court order to file a pretrial statement. The court dismissed the action under Rule 41(b) for failure to prosecute, and the dismissal order was silent as to prejudice. Plaintiff later files the same breach-of-contract claim in state court. Defendant asserts claim preclusion based on the federal dismissal. Is the state court likely to dismiss?

Answer:
Yes. Under Rule 41(b), an involuntary dismissal for failure to prosecute operates as an adjudication on the merits unless the dismissal order states otherwise or falls within one of the enumerated exceptions (jurisdiction, venue, or necessary-party joinder). Here, the dismissal was for failure to prosecute, the order did not state that it was without prejudice, and none of the exceptions apply. The state court must recognize the federal judgment as a final adjudication on the merits and dismiss the claim as barred.

Relief from Judgments and Orders in the Final-Judgment Context

Relief under Rule 60(b) is available only from final judgments, orders, or proceedings. Interlocutory orders (such as partial summary judgment orders or discovery sanctions) can be revised by the district court at any time before final judgment under Rule 54(b), without needing to meet the stricter Rule 60(b) standards.

For MBE purposes, this distinction matters when:

A party attempts to use Rule 60(b) to attack an order that is not yet final (for example, a partial summary judgment order).
A party waits too long to appeal a final judgment and tries to re-open it via 60(b) instead.

Courts generally:

Treat 60(b)(4) motions (void judgments) as mandatory if the judgment truly is void.
Treat 60(b)(1)–(3) motions as discretionary and strictly subject to the one-year limit.
Use 60(b)(6) sparingly, only for extraordinary circumstances.

Additional Traps in Preclusion Problems

When evaluating a second action, ask:

Was the first disposition a final judgment?
Was it on the merits (with Rule 41(b)’s exceptions in mind)?
Does the second action involve the same claim (same transaction or occurrence)?
Are the parties the same (or in privity)?

Common MBE traps:

Treating a jurisdictional dismissal as claim-preclusive.
Ignoring the effect of a voluntary dismissal with prejudice (for example, taken as part of a settlement).
Overstating the preclusive effect of a default judgment by assuming issue preclusion as well as claim preclusion.

Additional Traps and Special Situations

Counterclaims and Voluntary Dismissal

When the defendant has asserted a counterclaim, special rules apply to voluntary dismissal.

If the counterclaim was filed before service of the plaintiff’s motion to dismiss, the action may be dismissed over the defendant’s objection only if the counterclaim can remain pending for independent adjudication.
If the counterclaim is permissive and depends on the presence of the plaintiff’s claim, dismissal might effectively end the entire case unless the defendant agrees to the dismissal or the court severs the counterclaim.
A plaintiff’s voluntary dismissal does not automatically dismiss a defendant’s counterclaim. If the court has jurisdiction, the counterclaim can continue even if the plaintiff’s affirmative claims are gone.

Class Actions and Voluntary Dismissal

In class actions:

After a class has been certified, Rule 23(e) requires court approval for any settlement, voluntary dismissal, or compromise of the claims of a certified class.
The court must ensure that any proposed dismissal is fair, reasonable, and adequate to the class.
Even pre-certification, courts often scrutinize dismissals and settlements that may affect putative class members, particularly if there is potential for abuse (for example, “pick-off” attempts).

On the MBE, you are unlikely to get deep into Rule 23(e), but you should know that voluntary dismissal in the class-action context is less freely available than in ordinary single-plaintiff cases.

Offers of Judgment (Rule 68) and Dismissals

While not a type of dismissal, Rule 68’s offer-of-judgment mechanism sometimes appears in questions about terminating litigation:

A defending party may serve an offer of judgment on specified terms at least 14 days before trial.
If the plaintiff rejects the offer and later obtains a judgment less favorable than the offer, the plaintiff must pay the defendant’s costs incurred after the offer was made (including, in most federal question cases, taxable costs but not attorney’s fees, unless a fee-shifting statute applies).

This does not itself dismiss the action but can influence settlement and dismissal decisions.

Costs of Previously Dismissed Actions (Rule 41(d))

If a plaintiff has previously dismissed an action in any court and then files an action based on or including the same claim against the same defendant, the federal court may:

Order the plaintiff to pay all or part of the costs of the previous action; and
Stay the proceedings until the plaintiff has complied.

This is separate from the two-dismissal rule. It does not itself bar the new action, but it protects the defendant from repeated filings by imposing costs.

Service and Dismissal for Failure to Serve (Rule 4(m))

Although not part of Rule 41, failure to serve can lead to dismissal:

If a defendant is not served within 90 days after the complaint is filed, the court must dismiss the action without prejudice or order that service be made within a specified time.
If the plaintiff shows good cause for the failure, the court must extend the time for service.

On the MBE, you may see a dismissal for failure to timely serve. That dismissal is without prejudice, but the claim may still be time-barred if the statute of limitations has run.

Worked Example 1.9

Plaintiff sues Defendant in federal court. Defendant answers and asserts a compulsory counterclaim arising from the same transaction. Plaintiff, realizing that the federal court lacks subject-matter jurisdiction over the state-law claim, moves under Rule 41(a)(2) to dismiss the action without prejudice so she can refile in state court. Defendant objects, wanting to keep his counterclaim in federal court. The federal court clearly has diversity jurisdiction over the counterclaim. Can the district court grant plaintiff’s motion?

Answer:
Yes, but only if the counterclaim can remain pending for independent adjudication. Under Rule 41(a)(2), if a defendant has pleaded a counterclaim before being served with the plaintiff’s motion to dismiss, the action may be dismissed over the defendant’s objection only if the counterclaim can remain pending for independent adjudication. Here, the court has diversity jurisdiction over Defendant’s counterclaim, so it can proceed even if Plaintiff’s claim is dismissed. The court may grant Plaintiff’s motion to dismiss her claim without prejudice, while allowing Defendant’s counterclaim to continue.

Worked Example 1.10

Plaintiff brought a federal-question action against City, challenging a municipal ordinance and seeking injunctive relief. The court entered a permanent injunction against City. Three years later, circumstances changed significantly, and compliance with the injunction became extremely burdensome to City and arguably unnecessary to protect Plaintiff’s rights. City moves under Rule 60(b)(5) to modify or dissolve the injunction. Is Rule 60(b)(5) the proper vehicle?

Answer:
Yes. Rule 60(b)(5) permits relief from a judgment when it is no longer equitable that the judgment should have prospective application. Permanent injunctions are classic examples of judgments with prospective effect. If City can show a significant change in factual conditions or law such that continued enforcement is inequitable, the court may modify or dissolve the injunction under Rule 60(b)(5), subject to the requirement that the motion be filed within a reasonable time.

Key Point Checklist

This article has covered the following key knowledge points:

Default involves failure to plead or defend; obtaining a default judgment is a two-step process: entry of default and entry of default judgment (FRCP 55).
Entry of default is a clerk’s notation that the defendant has failed to respond; it does not itself grant relief but cuts off the defendant’s right to respond as of right.
The clerk can enter default judgment only when the claim is for a sum certain, the defendant has not appeared, the defendant is not a minor or incompetent, and the plaintiff provides an affidavit of the amount due.
In all other default situations—non-sum-certain claims, appearing defendants, minors/incompetents, or the United States as defendant—the court must enter the default judgment and may hold a hearing on damages or jurisdictional facts.
Defaults admit well-pleaded factual allegations (except as to damages) but do not admit the amount of unliquidated damages or legal conclusions.
Entries of default may be set aside for “good cause” under Rule 55(c); courts typically consider willfulness, existence of a meritorious defense, and prejudice to the plaintiff.
Default judgments require relief under Rule 60(b), which has stricter standards and time limits. Motions under 60(b)(1)–(3) must be filed within one year; motions under 60(b)(4)–(6) must be filed within a reasonable time.
A judgment entered without subject-matter jurisdiction or personal jurisdiction is void and must be set aside under Rule 60(b)(4); the one-year limit does not apply.
Rule 60(a) permits correction of clerical errors in judgments; Rule 60(b) provides substantive grounds for relief and cannot be used simply to reargue the merits.
Voluntary dismissal by notice under Rule 41(a)(1)(A)(i) is available only before the defendant serves an answer or motion for summary judgment and is usually without prejudice.
The two-dismissal rule provides that a second voluntary dismissal by notice of the same claim by the same plaintiff against the same defendant operates as an adjudication on the merits (with prejudice) and bars refiling.
Voluntary dismissal by stipulation (all parties who have appeared sign) is without prejudice unless the stipulation states otherwise and does not trigger the two-dismissal rule.
Voluntary dismissal by court order under Rule 41(a)(2) is generally without prejudice, but the court can impose conditions (such as payment of costs) and may specify that the dismissal is with prejudice.
A defendant’s counterclaim can limit the plaintiff’s ability to dismiss: if a counterclaim has been pleaded and can remain pending for independent adjudication, the court may dismiss the plaintiff’s claim while retaining the counterclaim.
Involuntary dismissal under Rule 41(b) for failure to prosecute, obey rules, or comply with a court order operates as an adjudication on the merits unless the order states otherwise.
Dismissals for lack of subject-matter jurisdiction, lack of personal jurisdiction, improper venue, or failure to join a required party under Rule 19 are not on the merits and do not bar refiling in a proper court.
A dismissal for failure to state a claim (12(b)(6)), if not accompanied by leave to amend, is generally treated as an adjudication on the merits and can support claim preclusion.
Default judgments and dismissals “with prejudice” are typically final judgments on the merits for claim-preclusion purposes, provided the court had jurisdiction.
Claim preclusion requires a valid final judgment on the merits, identity of claim (usually same transaction or occurrence), and identity or privity of parties.
Default judgments usually do not support issue preclusion because issues were not actually litigated, though they do support claim preclusion.
Finality is essential for both appeal and preclusion. Rule 54(b) allows for partial final judgments in multi-claim or multi-party cases if the court expressly certifies no just reason for delay.
In multi-defendant cases, default judgments against fewer than all defendants may not be final absent Rule 54(b) certification.
Rule 41(d) allows a court to impose costs on a plaintiff who refiles after a previous dismissal of the same claim.
Failure to timely serve the defendant under Rule 4(m) can lead to dismissal without prejudice, though refiling may be time-barred by the statute of limitations.

Key Terms and Concepts

Default
Entry of Default
Default Judgment
Voluntary Dismissal
Involuntary Dismissal
Dismissal With Prejudice
Dismissal Without Prejudice
Relief from Judgment (FRCP 60)
Claim Preclusion (Res Judicata)
Sum Certain
Two-Dismissal Rule
Adjudication on the Merits
Void Judgment
Good Cause (Rule 55(c))
Final Judgment
Partial Final Judgment (Rule 54(b))

Verdicts and judgments - Defaults and dismissals