Dakota, Minnesota & Eastern Railroad v. Schieffer, 715 F.3d 712

DM & E sued its former President and CEO Schieffer in federal court to enjoin arbitration over severance benefits under the Employment and Consulting Agreements; the contracts authorize fees if Schieffer prevails in related disputes.
DM & E asserted federal question jurisdiction under ERISA as the severance dispute arises from an employee benefit plan.
The district court initially remanded, concluding it lacked jurisdiction to adjudicate arbitrability under the Employment Agreement.
On appeal, the Eighth Circuit previously held the district court lacked federal subject-matter jurisdiction to rule on arbitrability or Employment Agreement issues.
Schieffer seeks attorneys’ fees under the contracts or remand for fee consideration; DM & E argues lack of jurisdiction precludes any contract-based fee award.
The court agrees that there is no federal jurisdiction to award contract-based fees and denies Schieffer’s motions; no opinion is expressed on DM & E's prevailing-party contention

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal jurisdiction exists to award contract-based fees	Schieffer	DM & E	No jurisdiction; insufficient original jurisdiction; no supplemental jurisdiction
Whether supplemental jurisdiction can exist without original federal jurisdiction	Schieffer	DM & E	Supplemental jurisdiction cannot exist when original jurisdiction is lacking
Whether Schieffer is a prevailing party under the contract	Schieffer	DM & E	Not addressed due to lack of subject-matter jurisdiction

Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (Supreme Court 1994) (jurisdictional limits; burden of proving jurisdiction)
Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (Supreme Court 1990) (sanctions; not applicable where private contract rights at issue)
Ratliff v. Stewart, 508 F.3d 225 (5th Cir. 2007) (fee sanctions cases not governing here)
Overholt Crop Ins. Serv. Co. v. Travis, 941 F.2d 1361 (8th Cir. 1991) (diversity jurisdiction; contract-based fee awards)
Rissman v. Rissman, 229 F.3d 586 (7th Cir. 2000) (federal question jurisdiction; fee awards after dismissal)
Scarfo v. Ginsberg, 175 F.3d 957 (11th Cir. 1999) (supplemental jurisdiction; jurisdictional prerequisite)
Peacock v. Thomas, 516 U.S. 349 (Supreme Court 1996) (supplemental jurisdiction requires proper jurisdiction first)
Musson Theatrical, Inc. v. Fed. Exp. Corp., 89 F.3d 1244 (6th Cir. 1996) (supplemental jurisdiction cannot survive jurisdictional failure)
United States v. Afremov, 611 F.3d 970 (8th Cir. 2010) (cited in jurisdictional analysis)