Filing a stipulation of dismissal with prejudice can have unintended consequences. The stipulation, of course, will bar a plaintiff from re-asserting the dismissed claims in a later action, but that is not all. It also may preclude the plaintiff from seeking new and different relief; from presenting new evidence, new legal theories or new causes of action; and even from continuing with claims that are being asserted in a different pending action. The stipulation may have these drastic consequences even if the parties intended otherwise, as some recent decisions demonstrate.
Res Judicata Effect
A stipulation of dismissal with prejudice has res judicata effect under New York law. It thus bars not only those claims actually asserted in the first lawsuit, but also “all other claims arising out of the same transaction or series of transactions [as the claims in the first lawsuit]…even if based upon different theories or if seeking a different remedy.”1
