AAA GAMING LLC and ILLINOIS GAMING INVESTMENTS, LLC v. Midwest Electronics Gaming, LLC

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued April 3, 2025
Decided April 29, 2025
Before
DAVID F. HAMILTON, Circuit Judge
MICHAEL B. BRENNAN, Circuit Judge
MICHAEL Y. SCUDDER, Circuit Judge
No. 24-2876
AAA GAMING LLC and ILLINOIS
GAMING INVESTMENTS, LLC,
Plaintiffs-Appellees,
v.
MIDWEST ELECTRONICS GAMING,
LLC,
Defendant-Appellant.
Appeal from the United States
District Court for the Northern
District of Illinois, Eastern
Division.
No. 1:16-cv-04997
John F. Kness,
Judge.
O R D E R
This appeal comes to us against the backdrop of an ongoing and protracted
dispute about the validity and enforcement of a contract. The district court determined
it lacked authority to convert the plaintiffs’ voluntary dismissal without prejudice to
one with prejudice and, separately, to award the defendant attorney’s fees pursuant to a
provision of the underlying contract. We affirm.
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1

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No. 24-2876 Page 2
I
AAA Gaming LLC and Illinois Gaming Investments, LLC entered into an
agreement with Midwest Electronics Gaming, LLC. As relevant here, the agreement
provided that in any dispute or litigation to enforce it, the “prevailing party” could
recover reasonable attorney’s fees and costs from the other party.
Invoking diversity jurisdiction, AAA Gaming and Illinois Gaming brought suit
against Midwest Electronics in federal district court alleging breach of contract. The
district court twice dismissed the complaint for failure to state a claim, concluding that
the Illinois Gaming Board had sole authority under Illinois law to determine the
validity and enforceability of the agreement. See J&J Ventures Gaming, LLC v. Wild, Inc.,
67 N.E.3d 243, 253 (Ill. 2016) (explaining that the Gaming Board has “exclusive
jurisdiction” to “determine the validity and enforceability of contracts that purport to
control the location and operation of video gaming terminals within licensed
establishments”). The dismissals were without prejudice, however, allowing AAA
Gaming and Illinois Gaming to petition the Board for a determination of whether the
agreement is in fact valid and enforceable.
The plaintiffs did so. But in the wake of proceedings before the Gaming Board
and in Illinois state court, AAA Gaming and Illinois Gaming then filed in the federal
district court a notice of voluntary dismissal without prejudice pursuant to Federal Rule
of Civil Procedure 41(a)(1)(A)(i). Why plaintiffs separately sought dismissal under
Rule 41 is not clear. Regardless, because the plaintiffs filed their notice of dismissal
before Midwest Electronics answered the complaint or moved for summary judgment,
the district court concluded that the filing of the Rule 41(a)(1)(A)(i) notice effected the
immediate dismissal of the suit without any necessary further action of the court. See
Nelson v. Napolitano, 657 F.3d 586, 587 (7th Cir. 2011).
For its part, Midwest Electronics responded by filing a Rule 60(b) motion seeking
to modify the dismissal to one with prejudice and separately asking the district court to
determine that Midwest Electronics was the “prevailing party” within the meaning of
the agreement so it could recover costs and attorney’s fees. The district court
determined it lacked jurisdiction both to convert a Rule 41(a)(1)(A)(i) voluntary
dismissal without prejudice to a dismissal with prejudice and, after such a dismissal, to
award costs and fees based on the agreement.
Midwest Electronics now appeals.

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No. 24-2876 Page 3
II
Rule 60(b) permits a district court to reopen a case that a plaintiff voluntarily
dismissed without prejudice. See Waetzig v. Halliburton Energy Servs., Inc., 145 S. Ct. 690,
693 (2025). But while Rule 60(b) “give[s] a court the power to reopen a case,” the party
moving under the Rule must point to an independent basis that “would authorize a
federal court” to provide the specific relief it seeks. Id. at 696. As applied here, Midwest
Electronics must identify some grant of authority empowering the district court to
convert the voluntary dismissal into one with prejudice and award attorney’s fees
pursuant to its agreement with AAA Gaming and Illinois Gaming. We address each
request in turn and, in the end, conclude that the district court lacked authority to do
either in the circumstances of the case.
A
We begin with a district court’s authority to modify a Rule 41(a)(1)(A)(i)
voluntary dismissal without prejudice. Unless the plaintiff’s notice of dismissal
pursuant to Rule 41(a)(1)(A)(i) states otherwise, the voluntary dismissal is without
prejudice. See Fed. R. Civ. P. 41(a)(1)(B). And while a district court may dismiss a case
by court order under Rule 41(a)(2) “on terms that the court considers proper,”
Rule 41(a)(1)(A)(i) contains no corresponding provision. Consequently, where a plaintiff
properly proceeds under Rule 41(a)(1)(A)(i) and requests a dismissal without prejudice,
the district court is not permitted to impose conditions on that dismissal—including by
dismissing the case with prejudice instead. See Scam Instrument Corp. v. Control Data
Corp., 458 F.2d 885, 889–91 (7th Cir. 1972) (setting aside conditioned order of dismissal
with prejudice where plaintiff properly proceeded under Rule 41(a)(1)(A)(i)); see also 9
Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2366 (4th ed.
2025) (“The district court has no power to impose terms and conditions if a plaintiff
properly dismisses by notice under Federal Rule of Civil Procedure 41(a)(1).”).
Indeed, where a plaintiff files a notice of voluntary dismissal that complies with
Rule 41(a)(1)(A)(i), the notice “terminates the case all by itself,” and “[t]here is nothing
left to adjudicate.” Szabo Food Serv., Inc. v. Canteen Corp., 823 F.2d 1073, 1078 (7th Cir.
1987). So, we have emphasized, “a judge may not reject the Rule 41(a)(1)(A)(i) notice
and then decide the case on the merits.” Id.; see Smith v. Potter, 513 F.3d 781, 782–83 (7th
Cir. 2008) (concluding the district court “was not authorized to dismiss the suit with
prejudice” and its order doing so “was void” where the plaintiff sought voluntary
dismissal before the defendant answered the complaint or moved for summary
judgment); Winterland Concessions Co. v. Smith, 706 F.2d 793, 794–96 (7th Cir. 1983)

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No. 24-2876 Page 4
(holding that a district court lacked authority to vacate a voluntary dismissal without
prejudice and enter an order dismissing the action with prejudice).
By extension, Rule 60(b) does not empower a court to do indirectly what it
cannot do directly under Rule 41(a)(1)(A)(i). Absent extraordinary circumstances in
which a plaintiff seeks to set aside its own notice, see Nelson, 657 F.3d at 589, Midwest
Electronics identifies no authority permitting district courts to vacate a voluntary
dismissal without prejudice pursuant to a Rule 60(b) motion and instead enter a
dismissal with prejudice.
These principles find straightforward application to the facts before us. At the
time AAA Gaming and Illinois Gaming filed their notice pursuant to Rule 41(a)(1)(A)(i),
Midwest Electronics had neither answered the complaint nor moved for summary
judgment. Further, the plaintiffs specified that the dismissal would be “without
prejudice.” Their notice, then, resulted in immediate dismissal of the entire action
without prejudice. We therefore have little trouble concluding that the district court
lacked authority to convert the dismissal into one with prejudice.
B
We next address Midwest Electronics’s contention that the district court retained
authority to award costs and attorney’s fees pursuant to its underlying agreement with
AAA Gaming and Illinois Gaming.
To be sure, a Rule 41(a)(1)(A)(i) dismissal does not eliminate wholesale a district
court’s authority to award post-dismissal relief. Even after a plaintiff voluntarily
dismisses its suit, the Supreme Court has explained, a federal court may still consider
particular “collateral issues,” which are “independent proceeding[s] supplemental to
the original proceeding.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395 (1990)
(alteration in original) (quoting Sprague v. Ticonic Nat’l Bank, 307 U.S. 161, 170 (1939)).
Cooter & Gell held that a dismissal pursuant to Rule 41(a)(1)(A)(i) does not deprive a
district court of jurisdiction over a Rule 11 motion for sanctions. See id. at 398. “Because
a Rule 11 sanction does not signify a district court’s assessment of the legal merits of the
complaint,” the Court reasoned, “the imposition of such a sanction after a voluntary
dismissal does not deprive the plaintiff of his right under Rule 41(a)(1) to dismiss an
action without prejudice.” Id. at 396.
Cooter & Gell identified two additional categories of collateral issues: the
imposition of contempt sanctions and motions for costs and attorney’s fees. See id. at
395–96. As to the latter, the Supreme Court cited White v. New Hampshire Department of
Employment Security, which held that a request for attorney’s fees pursuant to 42 U.S.C.

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No. 24-2876 Page 5
§ 1988 is a collateral matter, not a motion to alter or amend the judgment subject to the
requirements of Rule 59(e). See 455 U.S. 445, 451–52 (1982). A district court, therefore,
retains authority to award attorney’s fees under § 1988 after it enters final judgment—
without having to alter or amend the judgment. See id.
Applying these cases, we have found that a court may lack authority to resolve
the merits of a claim yet nevertheless have jurisdiction to award attorney’s fees to the
prevailing party where federal law expressly grants courts the authority to do so—as is
the case in § 1988, Rule 11, and the like. See, e.g., Szabo Food Serv., 823 F.2d at 1076–79
(explaining that a Rule 41(a)(1)(A)(i) dismissal does not deprive a district court of
authority to award attorney’s fees under Rule 11); Citizens for a Better Env’t v. Steel Co.,
230 F.3d 923, 925–28 (7th Cir. 2000) (concluding the district court retained authority to
award attorney’s fees pursuant to a federal statute following dismissal for lack of
subject matter jurisdiction).
The Supreme Court’s language in Cooter & Gell could be read to suggest that
attorney’s fees are, as a categorical matter, a collateral issue over which district courts
always retain authority—regardless of whether a party is entitled to them by virtue of a
federal statute, rule, or contract. But that construction would extend Cooter & Gell
beyond its more narrow holding about Rule 11. And, to date, neither the Supreme
Court nor our court has had occasion to address whether, following a Rule 41(a)(1)(A)(i)
dismissal, a court may award attorney’s fees pursuant to an agreement between the
parties that underlies their dispute. This is an unresolved and difficult question.
The district court concluded it lacked this authority, explaining that to determine
whether Midwest was the “prevailing party” would essentially require a merits
interpretation of the disputed contract. “[T]he definition of a contractual term and the
concomitant enforcement of the relevant contractual provision,” the district court
reasoned, “is not a collateral issue.”
On these facts, we agree. Ruling on Midwest Electronics’s request for fees would
require the district court to first find that the agreement between the parties is a valid
contract and, from there, interpret the specific attorney’s fees provision to determine
who is the “prevailing party” within the meaning of the agreement. But whether that
provision is part of a valid contract is the subject of much controversy and
disagreement. This core dispute dominated the parties’ briefing and oral argument on
appeal. And the question of the agreement’s validity led the district court to twice
dismiss the complaint without prejudice under Rule 12(b)(6) and, as a result, the parties
to litigate the issue before the Illinois Gaming Board.

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No. 24-2876 Page 6
Against the backdrop of this procedural history, Midwest Electronics’s
application for attorney’s fees is bound up in the merits of the underlying dispute—so
much so that we are hesitant to hold that the district court committed any error in not
seeing the request as collateral. An award of attorney’s fees here would necessarily
require the district court to assess the legal merits of the breach of contract claim. In the
final analysis, then, we conclude the district court lacked authority to award fees.
Perhaps in some set of circumstances a request for attorney’s fees pursuant to a
contract between the parties could appropriately be considered a collateral matter, such
that a court may award fees following a Rule 41(a)(1)(A)(i) voluntary dismissal without
prejudice. But these facts are not before us today. So we save the broader legal question
for another day and another case where it is more cleanly presented—unencumbered
by an extraneous dispute about the validity of the underlying agreement containing the
attorney’s fee provision.
AFFIRMED

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No. 24-2876 Page 7
HAMILTON, Circuit Judge, concurring. I join the order affirming the district court’s
denial of relief under Federal Rule of Civil Procedure 60(b). I write separately to
highlight an issue that the order does not address expressly, the appropriate standard of
review for such a denial of relief. I would review the district court’s denial of relief here
only for an abuse of discretion and would find the denial here was not an abuse of
discretion.
When questions are framed in terms of “jurisdiction,” as was the case here,
appellate courts are accustomed to thinking in terms of firm rules of law and de novo
review. See generally, e.g., Village of DePue v. Exxon Mobil Corp., 537 F.3d 775, 782 (7th
Cir. 2008) (applying de novo review to denial of motion to remand to state court).
Closer to this case, the same tends to be true when considering the scope of a district
court’s power to take certain actions after a case has been closed, whether by a final
judgment or, as in this case, a voluntary dismissal. See Continental Indemnity Co. v. BII,
Inc., 104 F.4th 630, 636 (7th Cir. 2024) (reviewing denial of request for post-judgment
ancillary enforcement of judgment); Philos Technologies, Inc. v. Philos & D, Inc., 802 F.3d
905, 911 (7th Cir. 2015) (grants of relief under Rule 60 generally reviewed for abuse of
discretion, but de novo review applied to grant of Rule 60(b)(4) motion challenging a
judgment as void for lack of personal jurisdiction).
In fact, though, on a number of questions framed in terms of “jurisdiction,” a
district court has substantial discretion. Examples include whether to exercise
supplemental jurisdiction under 28 U.S.C. § 1367, whether to exercise jurisdiction under
the Declaratory Judgment Act, 28 U.S.C. § 2201, and perhaps whether to exercise
ancillary jurisdiction over an effort to enforce a federal judgment, at least where the
enforcement would require the court to decide the merits of a separate and substantial
dispute that could be heard just as well in another forum. See Continental Indemnity, 104
F.4th at 636–37 (collecting cases).
I suggest that the question here—whether to adjudicate Midwest’s claim for
attorney fees under the terms of the parties’ contract, which may or may not be void
and unenforceable—may be another of those matters best committed to the sound
discretion of a district court. The district court is most familiar with the case, the parties,
history, and other avenues for resolving their dispute, such as in this case a separate
breach-of-contract action in the Illinois state courts.

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No. 24-2876 Page 8
S CUDDER , Circuit Judge, concurring. Like Judge Hamilton, I write to offer
perspective on a question that our decision does not answer. Today’s holding is limited
to the unique factual circumstances and procedural history of the case before us. But I
would go further and conclude that, following a plaintiff’s Rule 41(a)(1)(A)(i) voluntary
dismissal without prejudice, a district court always lacks authority to award attorney’s
fees pursuant to the terms of a contract underlying the parties’ dispute.
“Our basic point of reference when considering the award of attorney’s fees,” the
Supreme Court has emphasized, “is the bedrock principle known as the American Rule:
Each litigant pays his own attorney’s fees, win or lose, unless a statute or contract
provides otherwise.” Baker Botts L.L.P. v. ASARCO LLC, 576 U.S. 121, 126 (2015)
(quoting Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252–53 (2010)). When a
district court awards attorney’s fees under a federal statute or federal rule, the court has
authority to do so on the basis of federal law.
Relying on its Article I power, Congress created a right to attorney’s fees by
enacting, for example, 42 U.S.C. § 1988 and Rule 11 (via the Rules Enabling Act). And “a
motion seeking an award under any of these rules or statutes,” we have explained, “is a
case or controversy that may be adjudicated to the extent the movant has suffered at its
adversary’s hands an injury [that] may be redressed by a decision in its favor.” Citizens
for a Better Env’t v. Steel Co., 230 F.3d 923, 927 (7th Cir. 2000). So Article III, too, “presents
no obstacle to fee-shifting.” Id. at 928. A district court, therefore, retains authority to
award attorney’s fees where “federal law authorizes the district court to make the
award”—even where it lacks jurisdiction to resolve the merits of an underlying claim.
See id. at 926–28.
Not so for a request for attorney’s fees brought pursuant to a contractual fee-
shifting provision. The district court derives its authority to award fees in such
instances from the contract itself. As this case shows, the question of whether a
particular contract allows an award of attorney’s fees can itself pull a federal court into
determining the contract’s validity, interpreting its terms, and enforcing its
provisions—all aspects of the merits analysis in a classic breach of contract dispute like
the one here. So I fail to see how an award of attorney’s fees under a contract is an
“independent proceeding[] supplemental to the original proceeding” that “does not
signify a district court’s assessment of the legal merits,” such that it can properly be
considered collateral to the underlying dispute. Cooter & Gell v. Hartmarx Corp., 496 U.S.
384, 395–96 (1990) (quoting Sprague v. Ticonic Nat’l Bank, 307 U.S. 161, 170 (1939)).
This matters in cases like the one before us because a Rule 41(a)(1)(A)(i)
voluntary dismissal divests a district court of its jurisdiction to adjudicate the merits of

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No. 24-2876 Page 9
a breach of contract action. See Szabo Food Serv., Inc. v. Canteen Corp., 823 F.2d 1073, 1078
(7th Cir. 1987). Following a Rule 41(a)(1)(A)(i) dismissal, the contract authorizing the
award of attorney’s fees is no longer before the federal court—unlike the various federal
statutes or rules that empower federal courts to award fees after a case has been
terminated.
Yes, this is a question of jurisdiction—a court either has authority to grant the
requested relief or it does not. See Cooter & Gell, 496 U.S. at 393–95 (framing the issue as
whether the district court had “jurisdiction to award attorney’s fees”). So, for my part, I
do not see why a district court’s ability to award fees would turn on the individual facts
and circumstances of a given case. Nor do I see the question presented as implicating
standards of review. If a district court is without jurisdiction to consider an application
for attorney’s fees, the court must deny that request. A matter cannot be committed to a
court’s discretion where federal law has not authorized the district court to undertake
the relevant action. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998)
(“Without jurisdiction the court cannot proceed at all in any cause.” (quoting Ex parte
McCardle, 74 U.S. (7 Wall.) 506, 514 (1868))). And the fact that Congress—in unrelated
provisions of Title 28—affirmatively vests district courts with jurisdiction over certain
actions but, at the same time, provides them discretion in whether to exercise it says
nothing about a court’s jurisdiction to consider the relief requested here: the authority
to award fees in the absence of any grant of judicial authority, based on a contract no
longer before the court.
While the question must await another day, I would conclude that, following a
Rule 41(a)(1)(A)(i) dismissal, a district court cannot award attorney’s fees pursuant to a
contract underlying the parties’ dispute. It lacks the jurisdiction to do so.

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