1997 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-22-1997

In Re: Orthopedic Bone

Precedential or Non-Precedential:

Docket 96-1704

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Recommended Citation

"In Re: Orthopedic Bone" (1997). 1997 Decisions. Paper 279.

http://digitalcommons.law.villanova.edu/thirdcircuit_1997/279
Filed December 22, 1997 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 96-1704 

IN RE: ORTHOPEDIC "BONE SCREW" PRODUCTS 

LIABILITY LITIGATION 

(MDL No. 1014) 

WILLIAM MICHAEL RAY, 

 Appellant. 

v. 

ROBERT L. EYSTER, M.D.; ST. JOSEPH MEDICAL 

CENTER, INC.; SOFAMOR, INC., a Foreign Corpo ration

(D.C. Civil No. 95-cv-03865) 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Civil Action No. 95-cv-03865) 

Argued on September 23, 1997 

BECKER, SCIRICA, and ROTH, 

Circuit Judges. 

(Opinion filed: December 22, 1997) 
 Gary A. Eaton, Esquire (Argued) 

 Eaton & Sparks 

 1717 East 15th Street 

 Tulsa, OK 74104 

 and 

 Green & Stites 

 3739 East 3lst Street 

 Tulsa, OK 74135 

 Attorneys for Appellant 

 David W. Steed, Esquire 

 Turner & Boisseau 

 825 North Waco 

 P.O. Box 397 

 Wichita, KS 67203 

 Attorney for Appellee Eyster 

 Stephen S. Phillips, Esquire 

 Philip H. Lebowitz, Esquire (Argued) 

 Pepper, Hamilton & Scheetz 

 18th & Arch Streets 

 3000 Two Logan Square 

 Philadelphia, PA 19103-2799 

 Attorneys for Appellee Sofamor, 

 Inc. 

OPINION OF THE COURT 

ROTH, Circuit Judge. 

This appeal is a part of multi-district product liability 

litigation, involving manufacturers of orthopedic bone screw 

devices. The district court, sitting as the transferee court, 

imposed the ultimate sanction of dismissing plaintiff's suit 

with prejudice for failure to comply with discovery orders. 

Because we find that the district court lacked subject 

matter jurisdiction of the case, we must determine whether 

it had the ability to impose the sanction of dismissal with 

prejudice. 

Facts and Procedural Background 

The appellant, William Michael Ray, originally filed this 

action as a pro se petition in Kansas state court, seeking 

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damages for personal injuries allegedly incurred as the 

result of the implantation of an internal spinalfixation 

device. Ray sued Sofamor, Inc., a Tennessee manufacturer 

and distributor of pedicle screw devices; his physician, Dr. 

Robert Eyster of Kansas; and St. Joseph Medical Center, a 

Kansas hospital where Ray underwent surgery. Four 

months later, defendants removed the case to federal court 

in the District of Kansas, alleging federal question 

jurisdiction. They contended that the case presented a 

federal question because it arose under the Medical Devices 

Amendments and Safe Medical Device Act ("MDA") to the 

Federal Food, Drug and Cosmetic Act, 21 U.S.C. S 301, et. 

seq. The action was then transferred to the United States 

District Court for the Eastern District of Pennsylvania as 

part of Multi-District Litigation ("MDL") 1014, known as the 

Bone Screw Litigation. 

After Ray filed his pro se petition, he became a plaintiff in 

a separate action filed in Tennessee, also alleging bone 

screw related claims. Ray is represented by counsel in the 

Tennessee action, Eugene Haffey, et al. v. Danek Medical, 

Inc., which was also transferred to MDL 1014. Counsel for 

Ray in Haffey is now representing him in this appeal. 

Counsel maintains, however, that he was not aware of the 

pro se action or of its removal and transfer to the MDL until 

after defendants had filed a motion to dismiss it as a result 

of Ray's failure to comply with discovery. 

Prior to the transfer of Ray's pro se action, the multidistrict transferee court had issued several orders governing 

pretrial procedures and discovery. In particular, Pretrial 

Order 6 required plaintiffs in MDL 1014 to provide 

defendants with answers to a questionnaire and with

authorizations for the release of medical records. When 

Ray's pro se action was transferred to MDL 1014, it was 

covered by PTO 6.1 Ray failed, however, to submit the 

required documents. On September 15, 1995, defendants 

informed the Plaintiffs' Legal Committee (appointed by the 

District Court to represent plaintiffs in MDL 1014) that Ray 

had failed to comply with PTO 6 and that, if noncompliance 

continued, defendants would file a motion to dismiss. App. 

_________________________________________________________________ 

1. Ray was served with PTO 6 on June 12, 1995. See App. 67. 

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at 80. Defendants also wrote Ray a letter. On November 13, 

1995, defendants moved to dismiss Ray's petition for failure 

to comply with PTO 6. It is at this point that Ray's counsel 

in Haffey claims to have become aware of Ray's pro se 

action. Counsel then filed a motion in opposition to the 

motion to dismiss. 

Because motions to dismiss for noncompliance with 

pretrial orders had been filed in other MDL 1014 actions as 

well as Ray's, the court had appointed a Special Discovery 

Master. The Special Discovery Master recommended that 

dismissal with prejudice be the sanction used to resolve 

these motions. The district court adopted this 

recommendation and ordered that Ray and other 

noncompliant plaintiffs appear to show cause why their 

actions should not be dismissed with prejudice. 

Counsel for Ray appeared at the show cause hearing.

Ray, however, was not present. The record reveals the 

district court's understandable confusion during this 

proceeding due to the fact that Ray was a pro se litigant in 

one case and was represented by counsel in another. App. 

121-138. The district court ordered a subsequent hearing 

at which Ray was specifically and pointedly instructed to be 

present. Notice was mailed the following day to Ray, 

notifying him of the July 9, 1996, hearing. On July 8, 

counsel for Ray filed a motion for continuance on the 

grounds that he had been unable to contact Ray. Neither 

counsel nor Ray was present at the July 9 proceeding. The 

district court therefore imposed the sanction of dismissing 

this case with prejudice for failure to comply with discovery. 

The court also held Ray in contempt for his failure to 

appear and imposed a $500 monetary sanction on him. 2 

At the same time that the discovery motions were being 

_________________________________________________________________ 

2. The order dismissing Ray's petition does not indicate under which rule 

the judge imposed the sanction of dismissal for Ray's failure to comply 

with an order of the court. We have held that Rule 37 is the applicable 

rule in such cases. In addition, Rule 16(f), which provides sanctions for 

failure to comply with pretrial and scheduling orders of the court, 

incorporates the sanctions under Rule 37 by reference, including the 

Rule 37(b)(2)(C) provision for dismissal for failure to comply with 

discovery orders. Fed. R. Civ. P. 16(f). 

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resolved, the district court was also considering several 

motions by other MDL plaintiffs to remand their actions to 

state court. These actions had been removed to federal 

court on the basis of federal preemption under the MDA. 

On June 20, 1996, the district court issued Pretrial Order 

409, finding that "[b]ecause the [Medical Devices 

Amendments to the Federal Food Drug and Cosmetic Act] 

do not completely preempt state law, they do not provide 

Federal jurisdiction." In re Orthopedic Bone Screw Products 

Liability Litigation, MDL 1014. 1996 WL 900348 (E.D. Pa. 

June 20, 1996). The district court then granted the motions 

and remanded these cases to their respective state courts. 

Analysis 

Ray bases his appeal on his contention that, because the 

district court did not have subject matter jurisdiction over 

his claim, it did not have the authority to impose the 

sanction of dismissal with prejudice for failure to comply 

with discovery orders. We will begin our discussion with the 

issue of subject matter jurisdiction. The parties concede 

that there is no federal question jurisdiction in this case. 

The parties also agree that there is no diversity of 

citizenship. Thus, the district court did not have subject 

matter jurisdiction of Ray's action. For this reason, Ray 

questions the ability of the district court to have sanctioned 

him by dismissing his action with prejudice. 

The defendants argue, however, that Ray's petition was 

properly before the court at the time it was dismissed and 

that, even if the court lacked jurisdiction, it had the 

inherent authority to dismiss the case with prejudice for 

failure to comply with court orders. As transferee court in 

MDL 1014, the district court was dealing with hundreds of 

transferred actions which had been brought by plaintiffs in 

courts all over the country. Ray filed his pro se petition in 

January of 1995 in state court. In April, the defendants 

removed Ray's action to federal district court in Kansas on 

the basis of complete preemption by federal law under the 

MDA. In June, Ray's case was transferred to MDL 1014 in 

the Eastern District of Pennsylvania. Although Ray did not 

move to remand, the district court did decide in numerous 

other actions that no such preemption existed under the 

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MDA.3 The defendants contend that, since the definitive 

Supreme Court ruling in Medtronic v. Lohr, 116 S.Ct. 2240, 

2254-58 (1996) (finding that the MDA does not completely 

preempt state causes of action) was issued on June 26, 

1996, only days before the district court sanctioned Ray 

with dismissal, his pro se action was properly before the 

district court. We disagree. 

The district court had considered the issue of federal 

preemption by the MDA with regard to other cases which 

had been removed to federal court and then transferred to 

the Eastern District of Pennsylvania as part of MDL 1014. 

The only basis for removal of these cases was the alleged 

existence of a federal question based on the MDA. This was 

also the basis for the removal of Ray's petition. In PTO 409, 

the district court concluded that there was no federal 

question jurisdiction and remanded the challenged cases 

back to the state courts where they had originated. As Ray 

did not move for remand of his case, his petition was not 

among those cases remanded by PTO 409. 

Nevertheless, the defendants contend that, until a 

determination was made that the district court lacked 

jurisdiction in Ray's case, the court properly exercised its 

inherent authority to order discovery and conduct 

proceedings. This authority, they contend, included the 

authority to sanction Ray for lack of procedural compliance 

by dismissing the action with prejudice. The defendants 

make much of the fact that Ray never moved to remand his 

case and did not raise subject matter jurisdiction in the 

district court. Had Ray moved to remand his pro se action 

for lack of jurisdiction, no doubt the jurisdictional issue 

would have been resolved expeditiously. However, it is 

fundamental that a court may consider jurisdiction on its 

own. The issue of jurisdiction is always open for 

determination by the court. Underwood v. Maloney, 256 

F.2d 334 (3d Cir.), cert. denied, 358 U.S. 864 (1958). 

If a court then determines that it lacks subject matter 

jurisdiction, it cannot decide the case on the merits. It has 

no authority to do so. A federal court can only exercise that 

_________________________________________________________________ 

3. Pretrial Order 409, 1996 WL 900348 (E.D. Pa.) ( June 20, 1996), citing 

Michael v. Shiley, 46 F.3d 1316 (3d Cir. 1995). 

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power granted to it by Article III of the Constitution and by 

the statutes enacted pursuant to Article III. Bender v. 

Williamsport, 475 U.S. 534, 541 (1986); Marbury v. 

Madison, 1 Cranch (5 U.S.) 137, 173-80 (1803); see also 

Willy v. Coastal Corp., 503 U.S. 131, 137 (1992) (noting 

that "[a] final determination of lack of subject-matter 

jurisdiction of a case in a federal court, of course, precludes 

further adjudication of it."). If a case, over which the court 

lacks subject matter jurisdiction, was originallyfiled in 

federal court, it must be dismissed. If it was removed from 

state court, it must be remanded. See Bradgate Associates 

v. Fellows, Read & Associates, 999 F.2d 745, 750-51 (3d 

Cir. 1993) (finding that, where the district court lacks 

subject matter jurisdiction, it must remand a removed state 

court case, and it must dismiss a case, originallyfiled in 

federal court). The disposition of such a case will, however, 

be without prejudice. See, e.g., Winslow v. Walters, 815 

F.2d 1114, 1116 (7th Cir. 1987) (holding that "a ruling 

granting a motion to dismiss for lack of subject matter 

jurisdiction is not on the merits; its res judicata effect is 

limited to the question of jurisdiction."); Verret v. Elliot 

Equip. Corp., 734 F.2d 235, 238 (5th Cir. 1984) ("it would 

be inappropriate to enter any judgment on the merits when 

the dismissal is based on lack of subject matter 

jurisdiction"). 

However, despite this inability of a court to decide the 

merits of a case over which it lacks jurisdiction, a court 

does have inherent authority both over its docket and over 

the persons appearing before it. It has long been recognized 

that courts are vested with certain inherent powers that are 

not conferred either by Article III or by statute, but rather 

are necessary to all other functions of courts. U.S. v. 

Hudson, 7 Cranch 32, 34 (1812); Roadway Express Inc. v. 

Piper, 447 U.S. 752, 64, 100 S.Ct. 2455, 63 (1980). Of 

course, implicit in all these powers is the power to sanction. 

The Supreme Court has recognized the inherent power of 

courts to impose sanctions in order to manage their own 

affairs and achieve orderly and expeditious disposition of 

cases. Chambers v. NASCO Inc., 501 U.S. 32, 43; 111 S. Ct. 

123, 32 (1991). These powers include the power to manage 

their dockets and impose silence and order on those before 

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the court. Link v. Wabash, 370 U.S. 626, 30-31, 82 S.Ct. 

1386, 88-89 (1962). In addition courts have the authority to 

punish contempt whether the sanctioned conduct is before 

the court or beyond it. Ex parte Robinson, 19 Wall. 505, 

510 (1874). Nevertheless, even though the choice of

sanction may be within the court's discretion, this power is 

not without limit. Link v. Wabash, 447 U.S. at 765.

The question we face here is whether the inherent power 

to sanction extends in a case, over which the court lacks 

subject matter jurisdiction, to permit the court to impose a 

sanction which will be dispositive of the merits of the case. 

We think not. 

We come to this conclusion despite the fact that we

recognize that there is abundant authority permitting the 

imposition of sanctions in the absence of jurisdiction over 

a case. The Supreme Court held unanimously in Willy v. 

Coastal Corp. that the absence of jurisdiction will not 

operate automatically to invalidate all proceedings below. 

The Willy Court, however, addressed the imposition of Rule 

11 sanctions, awarding attorneys' fees incurred in 

responding to sanctionable conduct. Willy did not involve a 

dismissal with prejudice. In approving the sanction in Willy, 

the Court relied in large measure on the principle that 

Article III concerns are not implicated by Rule 11 sanctions 

since they are collateral to the merits and do not result in 

the Court assessing the legal merits of a complaint over 

which it lacks jurisdiction. Courts have an interest in 

maintaining order. For this reason, Rule 11 sanctions, 

which are imposed on persons appearing before the court, 

may be upheld in the absence of jurisdiction where they are 

consistent with a court's inherent power to manage its 

docket and maintain order. Permitting the imposition of 

Rule 11 sanctions by a court, later found to lack 

jurisdiction over the case, does not affect the 

appropriateness of such sanctions. Willy, 503 U.S. at 138. 

Defendants contend that the Supreme Court's holding in 

Willy is applicable to this case. We conclude, however, that 

Willy is not controlling here because Willy involved a 

sanction collateral to the merits of the case. The sanction of 

dismissal with prejudice, imposed on Ray, is not collateral 

to the merits. It acts to terminate the cause of action. A 

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court's power to determine the merits of a case is distinct 

from its power to exercise its authority over a person 

appearing before the court. This distinction is inherent in 

the reliance by the Court in Willy on the notion that Rule 

11 sanctions could stand in the absence of jurisdiction 

because they were collateral to the merits of the action and 

did not signal a legal conclusion by the sanctioning court. 

The defendants seek to obscure this difference. We 

conclude, however, that where, as here, the court lacks 

subject matter jurisdiction, it may not act in a way that 

determines the cause of action even though it may still--as 

in Willy--exercise its authority over the person before the 

court in the interest of enforcing compliance with the 

court's procedures. A court has an interest in enforcing 

cooperation with its orders by persons appearing before the 

court whether it has jurisdiction or not. A court also has an 

interest in deterring noncompliant behavior by future 

litigants. National Hockey League v. Metropolitan Hockey 

Club, Inc., 427 U.S. 639, 643; 96 S.Ct. 2778, 2781 (1976). 

However, where jurisdiction is found to be lacking, there 

can be no adjudication of the merits of the case. This 

prohibition must bar the imposition of a sanction which will 

terminate the case on the merits. For this reason, we will 

leave undisturbed the District Court's $500 monetary 

sanction against Ray but we will vacate the dismissal with 

prejudice.4 

Conclusion 

In this case, the already complicated task of the 

transferee court in multi-district litigation was made more 

so by Ray's failure to comply with the district court's 

orders. We recognize the need for the district court to be 

able to enforce compliance with its rules. Where, however, 

the district court lacked subject matter jurisdiction, it could 

_________________________________________________________________ 

4. For the reasons we have stated, we disagree with the conclusion 

reached by the Ninth Circuit in In re Exxon Valdez, 102 F.3d 429 (9th 

Cir. 1996) and by the Second Cicuit in Hernandez v. Conriv Realty 

Assoc., 116 F.3d 35 (2d Cir. 1997) that, despite a lack of subject matter 

jurisdiction, a district court may dismiss a case with prejudice as a 

sanction for repeated discovery violations. 

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not impose a sanction that has the effect of adjudicating 

the merits of the case. We will, therefore, affirm the 

imposition of the monetary sanction, but we will vacate the 

dismissal of the case with prejudice and remand this case 

to the District Court with instructions to remand it to the 

state court. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

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