## Facts

- Plaintiffs sued the Federal Reserve Bank of Chicago, its unknown shareholder banks, and the FDIC, claiming to act for holders of bearer bonds allegedly issued in 1934.
- Plaintiffs alleged the bank issued $25 billion in bearer bonds in exchange for 1665 metric tons of gold and sought redemption for principal plus 4% simple interest, totaling nearly $100 billion.
- The claim relied on assertions of authenticity and an alleged conspiracy to suppress recognition of the bonds.
- Defendants disputed the claim and moved to dismiss under Rule 12(b)(6); the motion was treated at some point as (or converted into) a summary-judgment motion.
- Plaintiffs filed a notice of voluntary dismissal under Federal Rule of Civil Procedure 41(a)(1).
- The sequence of key filings was unclear: the record did not establish whether plaintiffs’ Rule 41(a)(1) notice preceded any converted summary-judgment motion or other filing that would cut off the unilateral dismissal right.
- The district court refused to treat the notice as self-executing and dismissed the action with prejudice.

## Issues

1. Whether plaintiffs’ Rule 41(a)(1) notice required dismissal without prejudice when the record did not establish that defendants had served an answer or a motion for summary judgment before the notice.
2. Whether defendants bore the burden to show that a qualifying filing preceded the Rule 41(a)(1) notice and therefore terminated plaintiffs’ unilateral dismissal right.

## Decision

- The Seventh Circuit reversed.
- The court held plaintiffs were entitled to voluntary dismissal without prejudice under Rule 41(a)(1) because defendants did not demonstrate that an answer or a motion for summary judgment had been served before the notice.
- The court remanded with instructions to dismiss the case without prejudice.

## Legal Principles

- Under Federal Rule of Civil Procedure 41(a)(1), a plaintiff may dismiss an action without court order by filing a notice before the opposing party serves either an answer or a motion for summary judgment.
- A timely Rule 41(a)(1) notice is self-executing; if effective, the district court lacks discretion to deny dismissal and must treat the action as dismissed.
- A Rule 12(b)(6) motion does not, by itself, terminate the Rule 41(a)(1) right; only an answer or a qualifying motion for summary judgment does so.
- When the record does not establish that a qualifying answer or summary-judgment motion preceded the Rule 41(a)(1) notice, the plaintiff’s right to dismiss without prejudice remains, and the notice controls.

## Conclusion

The Seventh Circuit required dismissal without prejudice because the record did not show that defendants had served an answer or a motion for summary judgment before plaintiffs filed their Rule 41(a)(1) notice, making the notice effective and depriving the district court of authority to dismiss with prejudice.


Marques v. Fed. Rsrv. Bank of Chi., 286 F.3d 1014 (7th Cir. 2002)