Federal Rule of Civil Procedure 41(d) provides that you don’t get two bites at the apple free. A voluntary dismissal followed by refiling the same action subjects the plaintiff to paying the ‛costs“ of the defendant in the first action, in the discretion of the judge in action number 2:

If a plaintiff who has once dismissed an action in any court commences an action based upon or including the same claim against the same defendant, the court may make such order for the payment of costs of the action previously dismissed as it may deem proper and may stay the proceedings in the action until the plaintiff has complied with the order.

The ambiguous word in the Rule is ‛costs.“ ‛Costs“ normally mean statutory costs and do not include attorneys' fees, unless the substantive statute contemplates an award of attorneys' fees. But Rule 41(d) is different, as illustrated by the opinion of Magistrate Judge Kiyo A. Matsumoto in New Phone Co., v. N.Y.C. Dept. of Info. Tech. & Telecomms., 2007 U.S. Dist. LEXIS 74693 (E.D.N.Y. Oct. 5, 2007). The plaintiff in New Phone Co. had previously voluntarily dismissed the very same suit against the very same defendants, and later — in violation of an injunction — filed two additional suits against the same defendants based upon or including the same claim. Magistrate Judge Matsumoto concluded that the plaintiff should reimburse both the costs and the attorneys' fees incurred by the defendants in the first action.

"[W]here a plaintiff . . . voluntarily dismisses a lawsuit and then files a second suit against the same defendants predicated on the same facts, defendants may be entitled to recover their costs and attorneys' fees expended in defending the first suit and to stay the second suit until payment of those costs." Stiftung v. Sumitomo Corp., No. 99 CIV 1108, 2001 WL 1602118, at *9 (S.D.N.Y. Dec. 14, 2001) (imposing sanctions pursuant to Fed. R. Civ. P. 37 and finding that, because plaintiff voluntarily dismissed the first action, if plaintiff had thereafter filed the second complaint in federal rather than state court, defendants "immediately would have been eligible for costs and fees"). In addition, "[e]ven where a dismissal by a plaintiff is a matter of right under Fed. R. Civ. P. 41(a), expenses may be imposed pursuant to Fed. R. Civ. P. 41(d) should the suit be reinstituted." Gallagher v. Donald III, No. 92 CIV. 1371, 1993 WL 488215, at *1 (S.D.N.Y. Nov. 16, 1993) (citations omitted).

...[A]ttorneys' fees, as well as costs, may be awarded pursuant to Rule 41(d). See Restaurant Teams Int'l, Inc. v. Dominion Capital Fund Ltd., No. 99 Civ. 4138, 2002 WL 1603150, at *2 (S.D.N.Y. July 18, 2002); Stiftung, 2001 WL 1602118, at *9; International Controls and Measurements Corp. v. Watsco, Inc., 853 F. Supp. 585, 592 (N.D.N.Y. 1994) ("Pursuant to Local Rule 41(d), defendants seek their costs and reasonable attorney fees incurred in defending this motion. That rule provides that the court has discretion to award such costs and fees.").

Pursuant to Rule 41(d) — and, in a footnote, pursuant to the Court’s inherent power — the New Phone Co. Court recommended that the plaintiff reimburse defendants their costs and attorneys' fees expended in the first action.

The restyled version of Rule 41(d) taking effect on December 1, 2007, continues to use only the word ‛costs,“ without reference to attorneys' fees. It is (to say the least) a vigorous reading of the phrase ‛make such order for the payment of costs of the action previously dismissed as it may deem proper“ that converts the Rule into a vehicle for awarding attorneys' fees as well as costs. If the Rule is intended to authorize an award of attorneys' fees as well as costs, or as part of ‛costs,“ the Rule should be amended to state that explicitly. The current reading of rule 41(d) may be just, but it is in tension with the text of the Rule.