In a February 6, 2015 decision, Germain Real Estate Co., LLC v. HCH Toyota, LLC, the US Court of Appeals for the Eighth Circuit found that a state court's dismissal without prejudice was sufficiently firm to be considered final for purposes of issue preclusion under Arkansas law (, Nos. 13-3492 and 13-3723 (8th Cir. Feb. 6, 2015)).

In this breach of contract action, the plaintiffs, Germain Real Estate and GM Enterprises, brought suit in Arkansas state court alleging that the defendants refused to sell Germain a property in accordance with an option to purchase. The plaintiffs sought specific performance of the option to purchase. The court dismissed the action without prejudice. The plaintiff subsequently filed an amended complaint, and the defendants again filed motions to dismiss for failure to state facts upon which relief could be granted. After the parties submitted briefs and the state court conducted another hearing, the court again dismissed the case without prejudice. The plaintiffs did not appeal this decision nor re-file their lawsuit in state court. Instead, the plaintiffs filed suit in federal court, seeking specific performance of the option to purchase and declaratory relief, among other claims. The district court dismissed the case, holding that issue preclusion barred the claims set out in the federal complaint as the issue of Germain's purchase option had been fully litigated in state court. Germain appealed, arguing that issue preclusion did not apply because although the state court judgment decided certain issues, it was a dismissal without prejudice and therefore not a final judgment.

The Eighth Circuit upheld the district court's decision. Noting that Arkansas courts have not previously addressed this exact issue, the Eighth Circuit explained that its role was to predict how the state supreme court would decide the matter. The court determined that the state court dismissal was sufficiently firm to be given preclusive effect because:

Practitioners in the Eighth Circuit should be aware that a dismissal without prejudice from Arkansas state court that is neither appealed nor re-filed will be considered a "final judgment" for the purposes of issue preclusion.