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?With prejudice? means that you cannot re-file your case ever. ?Without prejudice? means that you can re-file your case at a later date (as long as you are still within the statute of limitations).
The traditional meaning of 'without prejudice' it is to allow communications between parties without worrying that those communications, like letters or emails, will be used in court against the writer. However, it's a term often misused by lawyers. It should be used to preface settlement discussions.
Dismissal without prejudice means that the judge dismissed the plaintiff's or prosecutor's case without damaging their right to have their matter heard in court later. A prosecutor may ask to withdraw the case against a person to have more time to make a case stronger, find more evidence or question other witnesses.
A court may allow a plaintiff to voluntarily withdraw from the suit through a Rule 41(a) dismissal without prejudice if the plaintiff would suffer hardship from continuing the suit. Also, under Rule 37(b)(2), a court may dismiss without prejudice to sanction a party acting in bad faith.
For example, if someone was subject to an illegal search or arrested without probable cause, that could be considered a violation of the defendant's constitutional rights. Another situation that can lead to dismissal with prejudice is if the person charged with the crime successfully completes a diversion program.