Loop AI Labs, Inc., et al. v. Anna Gatti, et al.

In Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. ____, 137 S. Ct. 1178 (2017), this Court ruled that the use of civil monetary sanctions to punish, without affording heightened process, violates due process. Previously, in Ins. Corp. of Ir. v. Compagnie Des Bauxites De Guinee, 456 U.S. 694, 707 (1982) this Court applied the same principle to nonmonetary sanctions. Consistent with this jurisprudence, the Third, Fourth, Fifth, Eighth, Eleventh and DC Circuits do not authorize punitive nonmonetary sanctions. Courts in the First, Second and Tenth Circuits have found, however, that Nat’l Hockey League v. Metro. Hockey Club Inc., 427 U.S. 639 (1976) (“NHL”), authorizes the issuance of nonmonetary sanctions, without heightened process, to punish and deter. Similarly, the Ninth Circuit has dispensed with causation and authorizes punitive nonmonetary sanctions, as in this case where the district court issued terminating sanctions sua sponte citing NHL. The question presented is: Does Nat’l Hockey League v. Metro. Hockey Club authorize a court to issue punitive nonmonetary sanctions under Fed. R. Civ. P. 37(b)(2) and its inherent power without heightened process, or does due process limit civil nonmonetary sanctions to those that are “just” and calibrated solely to remedy prejudice directly and demonstrably caused by the sanctionable misconduct?