R. Reginald Hyde, II v. George Irish, 962 F.3d 1306

Investors (including George Hyde) and broker George Irish partnered on a Florida Keys development that failed and was foreclosed, prompting fraud, breach of fiduciary duty, and conspiracy claims.
The district court granted summary judgment for Irish; the Eleventh Circuit later questioned diversity jurisdiction and remanded for the district court to reassess jurisdiction.
The district court ultimately dismissed the underlying case for lack of subject-matter jurisdiction.
Separately, Irish moved for sanctions (under the court’s inherent powers and 28 U.S.C. § 1927) alleging plaintiffs knowingly asserted false allegations about misapplied investments; plaintiffs removed some allegations during the Rule 11 safe-harbor period.
The district court denied Irish’s sanctions motion; Irish appealed, raising (1) whether a court may adjudicate sanctions when it lacks jurisdiction over the underlying case and (2) whether denial of sanctions was an abuse of discretion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a district court may rule on sanctions under its inherent powers or § 1927 when it lacks subject-matter jurisdiction over the underlying case	The court’s lack of jurisdiction over the merits precludes deciding sanctions tied to that case	District court can decide collateral matters like sanctions even if it lacks jurisdiction over the underlying merits; constitutional and practical reasons support this	The court may adjudicate sanctions under its inherent powers or § 1927 despite lacking jurisdiction over the underlying case
Whether the district court abused its discretion by denying Irish’s sanctions motion	No bad faith; sanctions unwarranted	Plaintiffs knowingly or recklessly pleaded false allegations; exhibit attached to complaint proved falsity and warranted sanctions	No abuse of discretion: denial affirmed — evidence supported alternative plausible readings of the exhibit, showed at most negligence, and Irish’s multi-year delay undercut the motion

Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (sanctions can be collateral and courts may decide them apart from merits)
Willy v. Coastal Corp., 503 U.S. 131 (1992) (Rule 11 sanctions are collateral and may be adjudicated absent jurisdiction over underlying merits)
Capron v. Van Noorden, 6 U.S. (2 Cranch) 126 (1804) (court may not decide issues after losing jurisdiction over the case)
Ratliff v. Stewart, 508 F.3d 225 (5th Cir. 2007) (recognizing jurisdiction to decide sanctions despite lack of jurisdiction over underlying case)
Red Carpet Studios Div. of Source Advantage, Ltd. v. Sater, 465 F.3d 642 (6th Cir. 2006) (same)
In re Jaritz Indus., 151 F.3d 93 (3d Cir. 1998) (same)
Fidrych v. Marriott Int’l, Inc., 952 F.3d 124 (4th Cir. 2020) (same)
Zerger & Mauer LLP v. City of Greenwood, 751 F.3d 928 (8th Cir. 2014) (same)
Amlong & Amlong, P.A. v. Denny’s, Inc., 500 F.3d 1230 (11th Cir. 2007) (§ 1927 sanctions require showing of bad faith/gross deviation)
Hernandez v. Acosta Tractors Inc., 898 F.3d 1301 (11th Cir. 2018) (inherent-power sanctions require subjective bad faith)
Purchasing Power, LLC v. Bluestem Brands, Inc., 851 F.3d 1218 (11th Cir. 2017) (subjective bad faith standard for inherent-power sanctions; recklessness insufficient)
Schwartz v. Millon Air, Inc., 341 F.3d 1220 (11th Cir. 2003) (§ 1927 requires knowing or reckless conduct)
Peer v. Lewis, 606 F.3d 1306 (11th Cir. 2010) (sanctions motions must be served promptly)