Opinion ID: 169789
Heading Depth: 4
Heading Rank: 1

Heading: jurisdiction

Text: Because it may be dispositive, we first address the jurisdictional challenge. M s. Allen asserts that, follow ing its grant of summary judgment to defendants, the district court had jurisdiction only over the specific issue in its referral to the magistrate judge, which she narrowly frames as consideration of a sanction under Rule 11 payable as attorney fees. Because the magistrate judge ultimately recommended the Rule 11 sanction be paid into court, not as attorney fees to defendants, M s. Allen contends the magistrate judge exceeded the scope of the referral and, consequently, the district court lacked jurisdiction to impose the sanction. W e can find no basis in the law to support this argument. The Supreme Court has consistently held that federal courts retain jurisdiction over issues, such as sanctions, that are collateral to the merits, even -8- after the underlying litigation has terminated. In Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990), it held: It is well established that a federal court may consider collateral issues after an action is no longer pending. . . . Like the imposition of costs, attorney’s fees, and contempt sanctions, the imposition of a Rule 11 sanction is not a judgment on the merits of an action. Rather, it requires the determination of a collateral issue: whether the attorney has abused the judicial process, and, if so, what sanction would be appropriate. Such a determination may be made after the principal suit has been terminated. Id. at 395-96 (citations omitted). In Willy v. Coastal Corp., 503 U.S. 131, 138 (1992), the Court held that, even where a federal court lacked subject matter jurisdiction over the underlying action, it retained jurisdiction to impose Rule 11 sanctions for abuses of the judicial process. M s. Allen cites no authority, nor can we find any, for her assertion that a district court that chooses to refer a postjudgment sanction issue to a magistrate judge for initial consideration and recommendation, somehow loses jurisdiction to impose a sanction if the resulting recommendation was not squarely described in the referral order. M oreover, the district court rejected M s. Allen’s argument (albeit without discussion) that the magistrate judge’s recommendation had exceeded the scope of its referral order. The district court’s referral order referenced Rule 11(c), the legal basis of the magistrate judge’s recommendation and the court’s ultimate sanction. M s. Allen suggests no substantive legal difference under Rule 11 between a sanction paid into court and a sanction paid to -9- defendant as attorney fees. See Rule 11(c)(2) (stating that sanction under Rule 11 may include penalty paid into court or, by motion, an order directing payment to the movant of reasonable attorneys’ fees). In short, the referral order directed the magistrate judge to make a recommendation as to whether M s. Allen engaged in conduct sanctionable under Rule 11, the magistrate judge did so, and we conclude that its recommendation that the resulting sanction should properly be paid to the court under Rule 11(c)(1)(B), rather than to the defendants, is well within the scope of the referral.