The U.S. Court of Appeals for the Fourth Circuit weighed in and widened the growing split on whether attorney fees are considered costs under Rule 41(d), which provides that defendants can recover theircosts from a prior suit upon refiling. The federal appellate courts have split, however, on whether those costs include attorney fees. The question whether to dismiss and refile under Federal Rule of Civil Procedure 41 is now more complicated, and potential attorney fees as costs will depend on the forum of the suit.
Citing Rule 41(d), two circuits have ordered plaintiffs to pay defendants' attorney fees as costs upon refiling. Under that same provision, another circuit has flatly rejected recovery of attorney fees as costs. Faced with this split, the Fourth Circuit embraced a third option, ruling that attorney fees can be costs in some instances, but not others, depending upon the basis for the underlying claims and what initially prompted the dismissal and refiling.