In its July 24, 2013 opinion in Newman v. Krintzman, the US Court of Appeals for the First Circuit held that a statute of limitations dismissal under New York law constituted a judgment on the merits. The First Circuit noted that principles of claim preclusion, or res judicata, bar successive suits between the same parties on causes of action that were or could have been litigated in the first action, if the first case resulted on a judgment on the merits. Therefore, because a statute of limitations dismissal was a merits decision, the plaintiffs were precluded from reasserting the same claims in another jurisdiction with a more generous limitations period.

In the late 1980s and early 1990s, the defendant borrowed "a boatload" of money from the Wendy Honig Trust. In return, the defendant executed certain promissory notes in favor of the trust, one of which was controlled by Massachusetts law while the rest were controlled by New York law. In 2009, after the defendant defaulted on the notes, the plaintiffs, trustees of the trust, brought an action in New York state court against the defendant. The trial court granted the motion to dismiss, citing New York's six-year statute of limitations period for contract actions. On appeal, the plaintiffs argued that the Massachusetts 20-year statute of limitations should apply to the Massachusetts note for actions involving "sealed instruments." The New York Appellate Division disregarded this argument and affirmed the trial court decision.

Three months later, the plaintiffs continued to pursue the matter in Massachusetts federal court. Asserting diversity jurisdiction, the plaintiffs sought to recover on the note governed by Massachusetts law. However, the US District Court for the District of Massachusetts dismissed the case, finding that the New York limitations dismissal was a judgment on the merits and therefore claim preclusive.

The First Circuit affirmed the district court decision. In its lengthy analysis, the First Circuit examined New York case law, principally relying on the jurisprudence stemming from Smith v. Russell Sage College decided by the New York Court of Appeals in 1981. The First Circuit concluded that, although New York law on this issue is unsettled, a limitations-based dismissal in New York was in fact a judgment on the merits, triggering claim preclusion principles. The New York dismissal therefore had full preclusive effect, and the plaintiffs could not reassert the same claim in another jurisdiction with a more generous limitations period.

Additionally, the First Circuit joined the US Court of Appeals for the Eighth Circuit's decision in Rick v. Wyeth, which made similar conclusions in 2011 on New York law by holding that a prior grant of summary judgment dismissing time-barred claims precluded the party from reasserting those claims in federal court.