Python allows putting multiple open() statements in a single with. You comma-separate them. Your code would then be:

def filter(txt, oldfile, newfile):
    '''\
    Read a list of names from a file line by line into an output file.
    If a line begins with a particular name, insert a string of text
    after the name before appending the line to the output file.
    '''

    with open(newfile, 'w') as outfile, open(oldfile, 'r', encoding='utf-8') as infile:
        for line in infile:
            if line.startswith(txt):
                line = line[0:len(txt)] + ' - Truly a great person!\n'
            outfile.write(line)

# input the name you want to check against
text = input('Please enter the name of a great person: ')    
letsgo = filter(text,'Spanish', 'Spanish2')

And no, you don't gain anything by putting an explicit return at the end of your function. You can use return to exit early, but you had it at the end, and the function will exit without it. (Of course with functions that return a value, you use the return to specify the value to return.)

Using multiple open() items with with was not supported in Python 2.5 when the with statement was introduced, or in Python 2.6, but it is supported in Python 2.7 and Python 3.1 or newer.

http://docs.python.org/reference/compound_stmts.html#the-with-statement http://docs.python.org/release/3.1/reference/compound_stmts.html#the-with-statement

If you are writing code that must run in Python 2.5, 2.6 or 3.0, nest the with statements as the other answers suggested or use contextlib.nested.