Jurisdiction to Enter Sanctions About Jurisdiction

A frustrated district court imposed sanctions in Ben E. Keith Co. v. Dining Alliance, Inc., citing the persistent failure of defendant Dining Alliance LLC to identify its members (and thus, allow resolution of the question whether the federal courts had diversity jurisdiction). The sanction included a dismissal with prejudice.

The defendant protested that the district court lacked jurisdiction to do so (an awkward position, given that the entire problem arose from the defendant’s difficulty with jurisdictional infomation). The Fifth Circuit disagreed:

“A case-dispositive sanction does not require the district court to assess a claim’s merits, weigh the evidence proffered in support of or against them claim, or decide an issue that bears on the claim’s legal substance. It is a purely procedural order.”

The Court observed that Rule 41(b) refers to “the merits,” but noted Supreme Court authority holding that “the phrase on the merits ‘has come to be applied to some judgments … that do not pass upon the substantive merits of a claim.” No. 22-10340 (Sept. 12, 2023).