Opinion ID: 774566
Heading Depth: 2
Heading Rank: 3

Heading: Establishment of Amount in Controversy as a Discovery Sanction

Text: 90 Chrysler makes one final argument as to why the amount-in-controversy requirement was satisfied in this case. It argues that plaintiffs' unwillingness to respond to discovery requests in state court entitled it to a factual finding by the district court that the amount in controversy was satisfied. In essence, Chrysler argues that the district court should have issued a discovery sanction in the form of a ruling that the amount-in-controversy requirement was satisfied. 91 Chrysler sought discovery relevant to the question of amount in controversy in federal court after the first removal, but the district court refused to grant such discovery. Chrysler then unsuccessfully sought mandamus from this court on that issue. Chrysler did not seek discovery in federal court after the second removal, and the sanction and fee award entered in connection with the second remand were unrelated to discovery in federal court. 92 Discovery is available in federal court to establish the presence of personal jurisdiction in that court, see, e.g., Butcher's Union Local No. 498, United Food & Comm'l Workers v. SDC Investment, Inc., 788 F.2d 535, 540 (9th Cir. 1986) (Discovery should ordinarily be granted where`pertinent facts bearing on the question of [personal] jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.' ) (citation omitted), and some courts have suggested that it may be appropriate to allow discovery relevant to jurisdictional amount prior to remanding, see, e.g., McCraw v. Lyons, 863 F. Supp. 430, 435 (W.D. Ky. 1994). But that issue is not now before us. Rather, the question before us is whether plaintiffs' unwillingness to respond to discovery requests in state court provided a basis for a federal court to make an adverse factual finding against plaintiffs. 93 It is true that an appropriate discovery sanction for refusing to respond to discovery requests on jurisdictional facts can be an adverse finding on the factual issue. For example, in Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982), the Supreme Court sustained a sanction that found the facts necessary to establish personal jurisdiction over a recalcitrant defendant. Although we have not found a case directly on point, we see no reason why a court cannot, in an appropriate case, sanction a defendant who refuses to respond to appropriate discovery requests on a fact relevant to subject matter jurisdiction by entering an order establishing that fact as true. 94 Subject matter jurisdiction cannot be established by consent of the parties, and a lack of subject matter jurisdiction is a non-waivable defect. See, e.g., Owen Equip. and Erection Co. v. Kroger, 437 U.S. 365, 377 n. 21 (1978). But a sanction in the form of an adverse factual finding rests on neither consent nor waiver. Rather, it rests on the reasonable assumption that the party resisting discovery is doing so because the information sought is unfavorable to its interest. In such a case, the sanction merely serves as a mechanism for establishing facts that are being improperly hidden by the party resisting discovery. See Fed. R. Civ. P. 26(g)(3), 37(b)(2)(A); Chilcutt v. United States, 4 F.3d 1313, 1324 (5th Cir. 1993). 95 In this case, however, the discovery abuse, if any, did not take place in the district court. Rather, it took place in California Superior Court. We are unaware of any authority, and Chrysler has supplied none, suggesting that a federal district court can sanction discovery abuse in state court when that court has neither found nor sanctioned such abuse itself. We therefore agree with the district court that it could not sanction plaintiffs for their failure to comply with Chrysler's state court discovery requests by finding the facts necessary to establish diversity jurisdiction.