Court Opinion

ID: 870308
Source: CourtListenerOpinion
Date Created: 2013-05-24 23:35:58.683748+00
Date Added: 2024-06-11T10:53:43.669583
License: Public Domain

Case: 12-31123       Document: 00512253466         Page: 1     Date Filed: 05/24/2013

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                            FILED
                                                                           May 24, 2013
                                     No. 12-31123
                                   Summary Calendar                        Lyle W. Cayce
                                                                                Clerk

COX, COX, FILO, CAMEL & WILSON, L.L.C.,

                                                  Plaintiff - Appellant

v.

SASOL NORTH AMERICA, INCORPORATED; TIMOTHY WARD; JAY
ARTHUR BLY; PETER MARKEY; MARY LOU SAPONE; WENDELL
RICHARD DICK ROGERS,

                                                  Defendants - Appellees

                   Appeal from the United States District Court
                      for the Western District of Louisiana
                             USDC No. 2:11-CV-856

Before HIGGINBOTHAM, OWEN, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       This case presents the question whether, under Federal Rule of Civil
Procedure 12(b)(1), a district court may dismiss a claim with prejudice to the
merits of that claim. We hold that it may not, and therefore VACATE and
REMAND.

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
    Case: 12-31123          Document: 00512253466      Page: 2   Date Filed: 05/24/2013

                                        No. 12-31123

                                             I.
      Plaintiff (“Cox”) sued defendants in Louisiana State Court, alleging
violations of the Louisiana Racketeering Act.1 Defendants removed to federal
court. There they moved, among other things, to dismiss Cox’s suit under
Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The district court found
that Cox lacked “standing” and dismissed “with prejudice” under Rule 12(b)(1).
Cox appeals.

                                             II.
      Rules 12(b)(1) and 12(b)(6) provide distinct grounds for dismissal of a claim
for relief. Rule 12(b)(6) applies when a plaintiff “fail[s] to state a claim upon
which relief can be granted.”2 Rule 12(b)(1) applies to claims over which a federal
district court “lack[s] . . . subject-matter jurisdiction.”3
      Cox contends that the district court erred by dismissing with prejudice
under Rule 12(b)(1), rather than remanding to the state court. Cox points to 28
U.S.C. § 1477(c), which provides that while “[a] motion to remand the case on the
basis of any defect other than subject matter jurisdiction must be made within
30 days after the filing of the notice of removal,” “[i]f at any time before final
judgment it appears that the district court lacks subject matter jurisdiction, the
case shall be remanded.”4
      Defendants reply in two ways. First, they claim that Cox waived this
argument by failing to raise it in the district court. We disagree, because this
claim of error cannot be waived. A dismissal under Rule 12(b)(1) is a dismissal
for lack of subject-matter jurisdiction. “A dismissal with prejudice is a final

      1
          LA. REV. STAT. § 15:1351 et seq.
      2
          FED. R. CIV. P. 12(b)(6).
      3
          FED. R. CIV. P. 12(b)(1).
      4
          28 U.S.C. § 1477(c).

                                             2
     Case: 12-31123         Document: 00512253466           Page: 3     Date Filed: 05/24/2013

                                         No. 12-31123

judgment on the merits.”5 Accordingly, to dismiss with prejudice under Rule
12(b)(1) is to disclaim jurisdiction and then exercise it. Our precedent does not
sanction the practice,6 and we will not do so here.7
       Second, defendants contend that the district court’s order should be
understood as holding that Cox lacked statutory standing—not Article III
standing—and that the district court therefore did not lack subject-matter
jurisdiction. They ask us to affirm under Rule 12(b)(6), arguing that Cox failed
to state a claim upon which relief could be granted. This argument has some
force. The district court did, of course, explain that because it found “there is no
standing, there is no jurisdiction and the court will grant the Motion to Dismiss
pursuant to [Rule] 12(b)(1).” We agree with defendants, however, that the court’s
analysis more closely tracked an inquiry into whether plaintiff stated a claim

       5
         Brooks v. Raymond Dugat Co., 336 F.3d 360, 362 (5th Cir. 2003) (citing Schwarz v.
Folloder, 767 F.2d 125, 130 (5th Cir. 1985)); see also Boudloche v. Conoco Oil Corp., 615 F.2d
687, 688 (5th Cir. 1980). A district court may, however, specifically dismiss with prejudice to
relitigating a question of federal jurisdiction—i.e., with prejudice to relitigating a non-merits
issue.
       6
         Defendants argue that a removal error is waivable even when a contemporaneous
objection would have prompted remand. They err by conflating “removal jurisdiction” with
subject-matter jurisdiction. In the cases on which they rely, while removal was improper, the
exercise of subject-matter jurisdiction was not. See Denman by Denman v. Snapper Div., 131
F.3d 546, 548 (5th Cir. 1998); In re Digicon Marine, Inc., 966 F.2d 158, 160 (5th Cir. 1992)
(discussing In re Shell Oil, 932 F.2d 1518, 1519 (5th Cir. 1991)); Baris v. Sulpicio Lines, Inc.,
932 F.2d 1540, 1543–46 (5th Cir. 1991).
       7
          Cf. Heaton v. Monogram Credit Card Bank of Georgia, 231 F.3d 994, 1000 (5th Cir.
2000) (“The district court properly concluded that it did not have jurisdiction but it erred in
granting summary judgment and dismissing with prejudice. Since the court lacked jurisdiction
over the action, it had no power to render a judgment on the merits.”); Boudloche, 615 F.2d at
688; Mills v. Harmon Law Offices, P.C., 344 F.3d 42, 45 (1st Cir. 2003) (“[T]he point of section
1447(c) is that a federal court does not have the authority to dismiss a claim over which it
never had jurisdiction in the first instance. The merits of the . . . claim are therefore irrelevant
to this determination.” (quoting Smith v. Wis. Dep’t of Agric., Trade & Consumer Prot., 23 F.3d
1134, 1139 n.10 (7th Cir. 1994) (internal quotation marks omitted) (alteration and omission
in original)); Christopher v. Stanley-Bostitch, Inc., 240 F.3d 95, 100 (1st Cir. 2001) (“When a
federal court concludes that it lacks subject matter jurisdiction over a case, it is precluded
from rendering any judgments on the merits of the case.”); but cf. U.S. ex rel. Batiste v. SLM
Corp., 659 F.3d 1204, 1211 (D.C. Cir. 2011) (relying on a 12(b)(6) case to find waiver).

                                                 3
     Case: 12-31123        Document: 00512253466           Page: 4      Date Filed: 05/24/2013

                                         No. 12-31123

under Louisiana’s Racketeering Act—a Rule 12(b)(6) question.8 But instead of
rewriting the district court’s order to affirm on the merits, we VACATE and
REMAND for further proceedings not inconsistent with this opinion.9

       8
         Cf. Lerner v. Fleet Bank, N.A., 318 F.3d 113, 130 (2d Cir. 2003) (“We affirm the district
court’s dismissal of plaintiffs’ RICO claims for lack of standing, but we do so under Rule
12(b)(6) for failure to state a claim rather than under Rule 12(b)(1) as the district court did.”).
       9
         We therefore need not address Cox’s dubious argument that the district court lacked
diversity jurisdiction.

                                                4