Court Opinion

ID: 9843029
Source: CourtListenerOpinion
Date Created: 2023-09-24 02:24:47.251058+00
Date Added: 2024-06-11T09:14:25.974114
License: Public Domain

MURNAGHAN, Circuit Judge,
dissenting:
I respectfully dissent. A dismissal for failure to comply with the statute of limitations represents a “dismissal for lack of jurisdiction” under Fed.R.Civ.P. 41(b). The majority fails to appreciate how expansively the Supreme Court has interpreted the word “jurisdiction” in Rule 41(b). Furthermore, the majority has ignored precedent of our own circuit, which has held that a dismissal for failure to file a lawsuit within the statutory deadline does not represent an adjudication on the merits for res judi-cata purposes. The Pennsylvania federal court’s grant of summary judgment against the Shoups should not preclude them from proceeding with their action in the present case because the federal court in Maryland would be obliged to apply Maryland’s three-year statute of limitations, rather than Pennsylvania’s two-year limitations period.
I.
Underlying the majority’s erroneous holding is a fundamental misunderstanding of the Supreme Court’s decision in Costello v. United States, 365 U.S. 265, 81 S.Ct. 534, 5 L.Ed.2d 551 (1961), whose interpretation of Fed.R.Civ.P. 41(b) governs here.1 Rule 41(b) provides, in pertinent part:
Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits.
The Supreme Court gave an expansive interpretation to the term “jurisdiction” in Rule 41(b), construing it much more broadly than the word is traditionally used in other contexts:
*1183It is too narrow a reading of the exception to relate the concept of jurisdiction embodied there to the fundamental jurisdictional defects which render a judgment void and subject to collateral attack, such as lack of jurisdiction over the person or subject matter. We regard the exception as encompassing those dismissals which are based on a plaintiffs failure to comply with a precondition requisite to the Court’s going forward to determine the merits of his substantive claim.
Costello, 365 U.S. at 285, 81 S.Ct. at 544. The Shoups’ compliance with the Pennsylvania statute of limitations by effecting service on the defendant, not merely by instituting suit,2 was a “precondition requisite to the court’s going forward to determine the merits” of their lawsuit. Thus, dismissal for failure to comply with that precondition does not represent an adjudication on the merits under Rule 41(b).
The majority argues, however, that the Shoups’ untimeliness did not represent a failure to comply with a “precondition” to the Pennsylvania federal court’s consideration of their claims. Apparently, the majority believes that compliance with the Pennsylvania statute of limitations — a requirement left unfulfilled here because of untimely service of process, not untimely filing of the lawsuit-does not qualify as a “precondition” under Costello because a plaintiff's untimeliness does not absolutely preclude a court from adjudicating the substantive issues in the case.3 A plaintiff’s failure to comply with a statute of limitations generally does not deprive a court of subject-matter jurisdiction over the substantive claims. Under certain circumstances, a plaintiff might be excused from compliance with the Pennsylvania statute of limitations,4 in which case a court would proceed to a consideration of the merits of the lawsuit. See, e.g., Molineux v. Reed, 516 Pa. 398, 402, 532 A.2d 792, 794 (1987) (defendant who fraudulently or deceptively lulls plaintiff into inaction may be precluded from invoking statute of limitations defense). But here we do not have a case where a court has excused non-compliance with the statute of limitations — ie., waived a precondition.
In essence, the majority has construed “precondition” so narrowly that it has become virtually indistinguishable from a subject-matter jurisdictional requirement. Costello never intended such a narrow interpretation. In fact, Costello explicitly held that “jurisdiction” under Rule 41(b) encompassed more than mere subject-matter jurisdiction or personal jurisdiction. 365 U.S. at 285, 81 S.Ct. at 544. Although Costello held that the filing of an affidavit for good cause in a denaturalization proceeding was a “precondition” for Rule 41(b) purposes to a court’s decision on the merits, the Supreme Court quite clearly did not believe that the absence of such an affidavit deprived a court of subject-matter jurisdiction to decide the substantive issues in the case. See 365 U.S. at 285, 81 S.Ct. at 544, citing Title v. United States, 263 F.2d 28, 30 (9th Cir.1959) (affidavit a “procedural”, rather than “jurisdictional”, prerequisite), cert. denied, 359 U.S. 989, 79 S.Ct. 1118, 3 L.Ed.2d 978 (1959); United States v. Failla, 164 F.Supp. 307, 313 (D.N.J.1958) *1184(affidavit requirement may be waived by defendant).
The policies underlying Rule 41(b) demonstrate that limitations dismissals do not constitute adjudications on the merits:
All of the dismissals enumerated in Rule 41(b) which operate as adjudications on the merits ... primarily involve situations in which the defendant must incur the inconvenience of preparing to meet the merits because there is no initial bar to the Court’s reaching them_ In defining the situations where dismissals “not provided for in this rule” also operate as adjudications on the merits, and are not to be deemed jurisdictional, it seems reasonable to confine them to those situations where the policy behind the enumerated grounds is equally applicable.
Costello, 365 U.S. at 286, 81 S.Ct. at 545. The statute of limitations defense presents an initial bar to adjudication of the merits. If the defendant promptly raises the defense after the filing of the complaint, and the court finds the defense valid, the defendant will not “incur the inconvenience of preparing to meet the merits” of the plaintiffs lawsuit. Id. Thus, the policies underlying Rule 41(b) require that statute of limitations dismissals not be given res judicata effect. See Burgess v. Cohen, 593 F.Supp. 1122, 1125 (E.D.Va.1984) (Under Costello, summary judgment on statute of limitations grounds is a Rule 41(b) dismissal for lack of jurisdiction).
Not only has the majority misconstrued Costello, but it also has ignored our own circuit's decision in Stebbins v. Nationwide Mutual Ins. Co., 528 F.2d 934 (4th Cir.1975),5 which found that a dismissal for failure to comply with the statutory time limit for bringing a Title VII6 suit did not represent an adjudication “on the merits” for res judicata purposes.7 Id. at 937. Stebbins emphasized that failure to meet the deadline merely represented a failure “to comply with statutory preconditions to the bringing” of the action. Id. Although Stebbins never explicitly referred to Rule 41(b), its reference to “statutory preconditions” is virtually identical to Costello’s definition of “jurisdiction.”8 See 365 U.S. at 285, 81 S.Ct. at 544. For res judicata purposes, a dismissal for failure to comply with Pennsylvania’s statute of limitations should be treated no differently than a dismissal for failure to file suit within the Title VII deadlines.9
*1185The refusal to give claim preclusive effect to limitations dismissals need not lead to the sort of abuse feared by Bell & Howell and the majority, who envision plaintiffs “shop[ping] indefinitely for favorable statutes of limitations in every state where personal jurisdiction over a defendant might be found.”10 Our own circuit has devised a way to avoid the potential for such abuse. In Stebbins, we recognized that even though a limitations dismissal did not represent an adjudication on the merits, such a dismissal could be given claim pre-clusive effect under unusual circumstances where it would be “manifestly unfair” to subject a defendant to a second lawsuit and where the plaintiff was especially blameworthy. 528 F.2d at 937-38. Stebbins strikes the appropriate balance between a plaintiff’s interests in receiving a decision on the merits of her claim, a defendant’s interest in avoiding undue hardship in defending against lawsuits, and society’s dual interests in promoting judicial economy and providing relief for injured parties.11 See Symposium Note, Res Judicata Effects of Involuntary Dismissals: When Involuntary Dismissals Based Upon Prematurity or Failure to Satisfy a Precondition to Suit Should Bar a Second Action, 70 Cornell L.Rev. 667, 686-694 (1985) (praising the balance struck by Stebbins)', 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure [hereinafter “Wright, Miller & Cooper”] § 4437 at 350-51 (1981) (approving Stebbins’ approach); Restatement (Second) of Judgments § 20 comment n (1982) (non-merits dismissal may bar second action under special circumstances when fairness dictates).
The present case is not one warranting application of Stebbins’ “manifest unfairness” exception to the general rule that a limitations dismissal does not have claim preclusive effect. Whereas the plaintiff in Stebbins demonstrated an “intentional, wilful and contemptuous” disregard for the statutory time limits for filing suit, 528 F.2d at 937 n. 4, the Shoups’ failure to comply with the Pennsylvania statute of limitations was, in the words of the Pennsylvania federal court, mere “inadvertence.” Furthermore, Bell & Howell did not suffer the same sort of burden as the defendant in Stebbins. The Pennsylvania federal court granted summary judgment in favor of Bell & Howell before trial and before extensive preparation of a defense on the merits. By contrast, the defendant in Stebbins had to endure a full-blown trial on the merits. Id. at 937-38. Because the present case does not present the unusual circumstances found in Stebbins, the summary judgment against the Shoups on statute of limitations grounds should have no claim preclusive effect.
II.
I cannot agree with the majority’s suggestion that a summary judgment order invariably constitutes an adjudication on the merits. Such a result would exalt form over substance. Summary judgments, of course, have res judicata effect if they “rest on the lack of any genuine issue of material fact going to the merits of [a] *1186claim or defense.” 18 Wright, Miller & Cooper § 4444 at 391 (emphasis added). Where, however, summary judgment “is not rendered after an assessment of the relative merits of a claim but rather is predicated upon, for example, a procedural omission, then res judicata is not applicable and will not prevent reconsideration.” Ruffin v. ITT Continental Baking Co., 636 F.Supp. 857, 868 (N.D.Miss.1986). See also, 18 Wright, Miller, & Cooper § 4444 at 392 (decision should not be given increased preclusive effect merely because labelled “summary judgment”).
Contrary to the majority’s suggestion, our decision in Adkins v. Allstate Ins. Co., 729 F.2d 974 (4th Cir.1984), does not require that every summary judgment order be considered an adjudication on the merits. The majority conveys a misimpression about Adkins by quoting one sentence of that opinion out of context. In Adkins, we were merely responding to a plaintiffs argument that disposal of a case on summary judgment grounds could never have res judicata effect. See 729 F.2d at 976 n. 3. We quite correctly rejected that argument in Adkins, emphasizing that plaintiff’s position was directly contrary to well-settled law. Id. However, Adkins should not be read for the broader proposition that every order bearing the label “summary judgment” has claim preclusive effect. Instead, we must look beyond labels to determine whether the summary judgment pertained to the merits, or instead, was based solely on a procedural matter independent of the merits. As I have demonstrated, the Pennsylvania federal court’s grant of summary judgment against the Shoups for failure to comply with the statute of limitations did not represent an adjudication on the merits for res judicata purposes.
Indeed, the majority’s approach reads “on the merits” to extend to “not on the merits.” The merits of the plaintiffs’ claim of injurious malfunction of the mass mailing machine have never been addressed. The majority’s position amounts to a holding that “black” includes “white.” We, in 1989, should be long past George Orwell’s “1984.”
III.
Although the summary judgment on limitations grounds has no claim preclusive effect on the merits, the Pennsylvania federal court’s decision that the Shoups failed to comply with Pennsylvania's two-year statute of limitations should have issue pre-clusive effect. See 18 Wright, Miller & Cooper § 4435 at 334-36; id. § 4441 at 372-73; Burgess, 593 F.Supp. at 1125. In other words, the Shoups may not relitigate issues decided by the Pennsylvania federal court, such as whether they complied with the Pennsylvania statute of limitations or whether they qualified for equitable tolling of the statute. Thus, the court below would be obliged to dismiss the Shoups’ lawsuit on res judicata grounds if Pennsylvania’s two-year statute of limitations governed the diversity action in Maryland. I conclude, however, that Maryland’s three-year limitations period, rather than Pennsylvania’s two-year deadline, applies here.
To determine which statute of limitations applies to the Shoups’ claims, we must look to the choice Maryland courts would make in such a case. See Sokolowski v. Flanzer, 769 F.2d 975, 977 (4th Cir.1985), citing Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 494, 496, 61 S.Ct. 1020, 1020, 1021, 85 L.Ed. 1477 (1941) (federal court sitting in diversity case must apply the conflict of laws rules of the forum state). A proper choice depends on whether Maryland law would classify Pennsylvania’s statute of limitations as substantive or procedural in nature. See Sokolowski, 769 F.2d at 978 (in Maryland, laws of the state where tort occurred governs substantive matters while law of forum state governs procedural issues); Doughty v. Prettyman, 219 Md. 83, 88, 148 A.2d 438, 440 (1959) (same).
Maryland would classify Pennsylvania’s statute of limitations12 as procedural, and *1187thus would apply its own three-year limitations period13 to the Shoups’ action. Maryland considers a statute of limitations as procedural, see Doughty, 219 Md. at 88, 148 A.2d at 440, unless it extinguishes the underlying right and not merely the remedy. Sokolowski, 769 F.2d at 978. Based on our detailed analysis of Maryland law in Sokolowski, I conclude that Maryland courts would see Pennsylvania’s statute of limitations as extinguishing only the Shoups’ remedy, not their substantive rights. See id. at 979 (statute of limitations found procedural where limitations period was neither a part of the statutory provision creating the substantive right nor was specifically directed to a statutorily created right).
IV.
In conclusion, the summary judgment against the Shoups for failure to comply with Pennsylvania’s two-year statute of limitations represents a dismissal for lack of jurisdiction under Fed.R.Civ.P. 41(b), and thus does not constitute an adjudication on the merits for res judicata purposes. The dismissal should not preclude the Shoups from proceeding with their cause of action in federal district court in Maryland because that court would be obliged to apply Maryland’s three-year statute of limitations, rather than Pennsylvania’s two-year limitations period, to their lawsuit.
I would affirm the judgment of the district court.

. Decisions by the Second and Sixth Circuits, which the majority finds so persuasive, carry little weight with me because those circuits either dismissed out of hand or entirely ignored Costello’s applicability. In PRC Harris, Inc. v. Boeing Co., 700 F.2d 894 (2d Cir.1983), the Second Circuit dismissed Costello in a footnote, finding it inapplicable merely because it had not involved a dismissal on statute of limitations grounds. Id. at 896-97 n. 2. Neither Sixth Circuit opinion cited by the majority even mentioned Costello. See Nathan v. Rowan, 651 F.2d 1223 (6th Cir.1981), and Cemer v. Marathon Oil Co., 583 F.2d 830 (6th Cir.1978).

. In Pennsylvania, the filing of a lawsuit tolls the statute of limitations only if the plaintiff subsequently makes a good faith effort to serve process within the time prescribed by state law. Untimely service will nullify the tolling originally accomplished by the filing of suit. See Lamp v. Heyman, 469 Pa. 465, 478, 366 A.2d 882, 889 (1976); Pannill v. Seahorne, 278 Pa.Super. 562, 568, 420 A.2d 684, 686-87 (1980); Watts v. Owens-Corning Fiberglas Corp., 353 Pa.Super. 267, 271, 509 A.2d 1268, 1270 (1986), app. denied, 514 Pa. 632, 522 A.2d 559 (1987).

. The Shoups’ failure to serve process did, however, absolutely preclude substantive adjudication during the period up to the deadline for service, i.e., while time existed for the precondition to be met, because Bell & Howell apparently was unaware suit had been filed. Obviously, if the defendant has not been served and has not waived service, adjudication on the merits cannot take place. Of course, here service did ultimately occur at a time when the statute of limitations had run, but such service could manifestly not satisfy the precondition of timely service.

.By waiver a precondition would be deemed met.

. Cert. denied, 424 U.S. 946, 96 S.Ct. 1417, 47 L.Ed.2d 353 (1976).

. Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.

. Stebbins, a Fourth Circuit case, reached precisely the opposite conclusion as Nilsen v. City of Moss Point, 701 F.2d 556 (5th Cir.1983) (en banc), a case which the majority finds so persuasive. Nilsen held that a dismissal for failure to comply with Title VII’s deadlines represented an adjudication on the merits for res judicata purposes. Id. at 562. The majority fails to explain what authority it has to ignore our court's precedent in Stebbins in favor of another circuit’s decision that carries no precedential weight in the Fourth Circuit.

. I find novel indeed the majority's assertion that it is free to disregard the binding precedent of Stebbins merely because our opinion in that case did not go through the formality of citing, of actually referring to, Federal Rule 41(b). The Federal Rules of Civil Procedure were, of course, in force at the time we decided Stebbins, and had been so for many years, and we must assume that the members of our court who decided that case were familiar with those rules by which they were bound. Would the majority in the present case similarly feel free to disregard a decision of our circuit interpreting the "clearly erroneous" standard of review merely because the opinion in the case had not explicitly cited FedJR.Civ.P. 52(a)? I would hope not. The majority’s argument is particularly ironic because two opinions on which it relies never explicitly mention Rule 41(b). See Nilsen v. City of Moss Point, 701 F.2d 556 (5th Cir.1983) (en banc); Nathan v. Rowan, 651 F.2d 1223 (6th Cir.1981).
Stebbins is binding precedent in our circuit on the meaning of Rule 41(b)’s reference to "adjudication upon the merits.” The majority’s obvious dislike for the result in Stebbins does not give it the freedom to ignore binding precedent. The majority has no authority to overrule Steb-bins. Only the Supreme Court or our own court sitting en banc can do that.

.Prior to the Supreme Court’s decision in Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982), some courts held that failure to comply with Title VII’s deadlines deprived a court of subject-matter jurisdiction to consider the merits of a plaintiffs discrimination claims. See id at 392, 102 S.Ct. at *11851131. However, Stebbins clearly did not consider Title VII's deadlines as subject-matter jurisdictional requirements. Instead, Stebbins considered the statutory deadlines as equivalent to a statute of limitations that could be equitably tolled if necessary to promote justice. See Stebbins v. Nationwide Mutual Ins. Co., 469 F.2d 268, 270 (4th Cir.1972) (appeal of first dismissal against Stebbins), cert. denied, 410 U.S. 939, 93 S.Ct. 1403, 35 L.Ed.2d 606 (1973).

. It is by no means clear that forum shopping was in any way involved in the Shoups’ case. The plaintiffs were Pennsylvania residents. The site for the manufacture of the mass mailing machine and the site of the injury allegedly caused by it are not disclosed in the record.

. Stebbins is fully consistent with the Supreme Court’s decision in Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981), which held that courts may not, in the name of justice or equity, refuse to give preclusive effect to a final judgment on the merits that satisfies all the requirements of the res judicata doctrine. Id. at 399, 401, 101 S.Ct. at 2428, 2429. Stebbins does not condone the denial of preclusive effect to adjudications on the merits (if all the other requirements of res judicata are met). Instead, > Stebbins allows courts to give preclusive effect to non-merits dismissals under extraordinary circumstances.

. The applicable Pennsylvania statute of limitations provides, in pertinent part:
The following actions and proceedings must be commenced within two years:
*1187(2) An action to recover damages for injuries to the person or for the death of an individual caused by the wrongful act or neglect or unlawful violence or negligence of another....
42 Pa.Cons.Stat.Ann. § 5524.

. Md. Courts & Judicial Proceedings Code Ann. § 5-101.