In Gist v. Zoan Management, No. S064925, the Oregon Supreme Court clarifies the circumstances under which a party can appeal from a judgment of voluntary dismissal. More than 50 years ago, the Oregon Supreme Court held that “a party may not appeal from a judgment which he voluntarily requested.” Steenson v. Robinson, 236 Or 414, 416-17 (1963). Now, in Gist, the court announces that the Steenson rule does not apply if the judgment was a voluntary dismissal with prejudice.
In Gist, the plaintiff filed a wage-and-hour class action against his employer and two related companies. The defendants moved to compel arbitration, and the court ordered the parties to arbitrate. But the plaintiff argued that he could not afford to pay the arbitrators. As his counsel explained, if the plaintiff could not get an appellate court to reverse the order compelling arbitration, “the case is over, my client loses, it’s done.” Thus, after two unsuccessful attempts to begin an interlocutory appeal, the plaintiff decided to create a final judgment by moving to dismiss all of his claims with prejudice.
When the plaintiff appealed from that general judgment of dismissal, the Appellate Commissioner dismissed the appeal as barred by Steenson. But the Oregon Supreme Court disagreed.
In Gist, the Oregon Supreme Court explains that Steenson “was designed to address a particular abuse of the legal system” under the procedural rules of the time. In 1963, a plaintiff could terminate a case with a voluntary nonsuit. But in an action at law, the resulting judgment was without prejudice. As a result, a plaintiff who received an unfavorable pretrial ruling could take a voluntary nonsuit, appeal the judgment, and see if the appellate court would reverse it. If so, the plaintiff would proceed with the benefit of that ruling. If not, that case was over, but the plaintiff could turn around and refile the same claims the next day. Rinse and repeat, as many times as the plaintiff wished.
Steenson put a stop to that merry-go-round by barring appeals from voluntary nonsuits. But under modern civil procedure, a voluntary dismissal can be with prejudice. Res judicata then prevents re-filing the same claims. In such a case, the Gist court reasons, the Steenson rule is unnecessary.
Furthermore, even Steenson acknowledged that appeals were permissible in cases where the plaintiff had taken a nonsuit “because of a ruling which precludes recovery.” Reviewing its cases since Steenson, the court noted that it had never inquired into whether a given ruling actually precluded recovery. Rather, in cases where res judicata would bar re-filing the claims, the court had been willing to treat the plaintiff’s decision to voluntarily dismiss as sufficient to demonstrate that the trial court ruling in some manner precluded recovery.
For those reasons, Gist now recognizes an exception to Steenson “when there is a judgment on all claims and any voluntarily dismissed claims were dismissed with prejudice.”
So here, Mr. Gist goes back to the Court of Appeals for a decision on whether the trial court erred by compelling arbitration. And litigants in other cases could face some difficult choices. If a pretrial ruling is extremely adverse—but not fatal—will the plaintiff persevere in the trial court, with litigation expenses mounting all the while? Or will the plaintiff gamble by voluntarily dismissing with prejudice, so that it can immediately appeal?
The statements and views expressed in this posting are my own and do not reflect those of my law firm, are intended for general informational purposes only, and do not constitute legal advice or legal opinion.