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

                                             FILED
                                                           May 1, 2009

                            No. 08-20321              Charles R. Fulbruge III
                                                              Clerk

PILLAR PANAMA, S.A.; BASTIMENTOS HOLDINGS, S.A.

                                     Plaintiffs – Appellants
v.

FRANCIS DELAPE, a citizen of Texas; RICHARD KIIBLER, a citizen of
Texas; BENCHMARK EQUITY GROUP, INC., a Delaware corporation; SIX
DIAMOND RESORTS INTERNATIONAL,

                                     Defendants – Appellees

                               consolidated with


                            No. 08-20568


PILLAR PANAMA, S.A.; BASTIMENTOS HOLDINGS, S.A.

                                     Plaintiffs – Appellants
v.

FRANCIS DELAPE, a Citizen of Texas; RICHARD KIIBLER, a Citizen of
Texas; BENCHMARK EQUITY GROUP, INC., a Delaware Corporation,

                                     Defendants – Appellees
                   Appeals from the United States District Court
                        for the Southern District of Texas
                              USDC 4:07-CV-01922


Before GARWOOD, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
       Concluding that this controversy is unripe and, therefore, we lack
jurisdiction, we modify the district court’s take-nothing judgment to reflect a
dismissal without prejudice. We also vacate the sanctions awarded.
                                     I. Background
       Appellant Pillar Panama, S.A. (“Pillar”) is a Panamanian corporation and
Bastimentos Holdings is its wholly-owned subsidiary. In 2003, Pillar began
developing a resort housing development called the Red Frog Beach Club on the
Panamanian island of Bastimentos in the Caribbean Sea. The Red Frog project
is made up of multiple parcels of land. Pillar markets the Red Frog project
internationally, but the vast majority of its customers are United States citizens
and residents. Pillar has pre-sold several hundred housing units in the Red Frog
Project to United States citizens.
       Appellees Francis DeLape and Richard Kiibler are United States citizens
who have listed addresses in Houston, Texas. They are principals and owners
of Appellee Benchmark Equity Group, Inc. (“Benchmark”) (a Delaware
corporation with its principal place of business in Houston) and Appellee Six
Diamond Resorts International (“Six Diamond”) (a Cayman Islands corporation
with its principal place of business in Houston). In September 2006, Appellees




       *
         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.

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arrived in Panama and launched several resort projects of their own to compete
with other developers, including Pillar.
      Pillar and Appellees dispute title and possessory rights to the parcels of
land that Pillar is developing and marketing. Pillar claims to be the victor in
Panamanian court decisions, while Appellees cite actions of the town’s mayor
establishing their rights. Since this appeal was docketed, further developments
have taken place in the Panamanian courts that further complicate the question
of title and possessory rights.
      Pillar contends that Appellees have disparaged its services in violation of
§ 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B) (2006), reasoning that, as
part and parcel of developing and selling condominiums, Pillar provides services,
such as maintenance, to the condominium dwellers. Based on these contentions,
among others, Pillar filed the instant suit against DeLape, Kiibler, and
Benchmark seeking damages and injunctive relief. The complaint included
claims for violations of the Lanham Act and the Texas Deceptive Trade Practices
Act, T EX. B US. & C OM. C ODE A NN. § 17.46(b)(23) (Vernon 2008), as well as other
state law claims of unfair competition, tortious interference with contract and
prospective business relationships, defamation, trespass, and conversion. Pillar
asserts federal question jurisdiction under the Lanham Act, with supplemental
jurisdiction over the related state law claims.
      Before the district court, several of the Appellees filed motions to dismiss
for lack of personal jurisdiction and forum non conveniens. Over the next nine
months, various motions and responses were filed and the district court
conducted a number of conferences with the parties.
      On April 16, 2008, the district court issued an Interlocutory Judgment
directing that Pillar take nothing from Appellees. On May 1, 2008, the district
court reissued its Opinion on Summary Judgment rejecting Pillar’s claims,
ordering that Pillar take nothing from Appellees, and setting a hearing for

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sanctions.       As part of this order, the district court concluded that it lacked
jurisdiction 1 and that forum non conveniens applied. 2                   After various further
skirmishes before the court, on August 18, 2008, the district court ruled as
follows:
      1.        Pillar Panama, S.A. takes nothing from Benchmark Equity
                Group, Inc., Six Diamond Resorts International, Francis
                DeLape, and Richard Kiibler.
      2.        Benchmark Equity Group Inc., Six Diamond Resorts
                International, Francis DeLape, and Richard Kiibler recover
                $385,000 in attorney’s fees from Pillar Panama, S.A.
The district court offered no further findings to support its order.
      Pillar appeals both the district court’s grant of summary judgment and its
order for sanctions. These two appeals have been consolidated into the one
appeal that is now before this panel.
                                  II. Standard of Review
      We review a dismissal for lack of subject matter jurisdiction de novo. PCI
Transp. Inc. v. Fort Worth & W. R.R. Co., 418 F.3d 535, 540 (5th Cir. 2005).
                                        III. Discussion
      It is a truism that a court must have jurisdiction to act. Ripeness is a
component of subject matter jurisdiction, because a court has no power to decide
disputes that are not yet justiciable. See Sample v. Morrison, 406 F.3d 310, 312
(5th Cir. 2005) (per curiam). To determine whether claims are ripe, this Court
evaluates (1) the fitness of the issues for judicial resolution, and (2) the potential
hardship to the parties caused by declining court consideration. Texas v. United
States, 497 F.3d 491, 498 (5th Cir. 2007), cert. denied, 129 S. Ct. 32 (2008).
These prongs must be balanced, Am. Forest & Paper Ass’n v. EPA, 137 F.3d 291,


      1
           “Having . . . no jurisdiction, Pillar Panama . . . will take nothing . . . .”
      2
        “Panama law governs this matter, and its courts have more jurisdiction and have
more convenience.”

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296 (5th Cir. 1998), and “[a] case is generally ripe if any remaining questions are
purely legal ones[.]” New Orleans Pub. Serv., Inc. v. Council of City of New
Orleans, 833 F.2d 583, 587 (5th Cir. 1987). It is fundamental, however, that
“even where an issue presents purely legal questions, the plaintiff must show
some hardship in order to establish ripeness.” Ctrl. & S. W. Servs., Inc. v. EPA,
220 F.3d 683, 690 (5th Cir. 2000). In this sense, the doctrines of ripeness and
standing 3 “often overlap in practice, particularly in an examination of whether
a plaintiff has suffered a concrete injury . . . .” Texas, 497 F.3d at 496. If the
purported injury is “contingent [on] future events that may not occur as
anticipated, or indeed may not occur at all[,]” the claim is not ripe for
adjudication. Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580-81
(1985).
       Here, uncertainty exists as to who holds title and possessory rights, a
question that must be and currently is being adjudicated by the appropriate
Panamanian authority. Notwithstanding Appellants’ insistence to this Court
that they have both title to and the right to possess the land at issue, it is
possible that the Supreme Court of Panama will determine that Appellants have
neither. In turn, the question of whether Appellants do indeed have the ability,
even the right, to deliver the services which form the basis of their Lanham Act
claim is “contingent on future events that may not occur as anticipated.” See id.
at 581. Consequently, the Lanham Act question is not ripe for consideration by
the district court or this Court. Appellants conceded as much at oral argument.




       3
         To establish standing, a plaintiff must have suffered an “injury in fact,” which the
Supreme Court has described as “an invasion of a legally protected interest which is (a)
concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical[.]”
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal citation, quotation marks,
and footnote omitted).

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       Because the Lanham Act question is not ripe for consideration, the case
should have been dismissed for want of subject matter jurisdiction without
consideration of the merits of the claims. See Sample, 406 F.3d at 312 (noting
that ripeness is an essential component of federal subject matter jurisdiction).
Because the Lanham Act forms the sole basis for supplemental jurisdiction over
Appellants’ state law claims, those claims, too, should have been dismissed for
want of jurisdiction. See Womble v. Bhangu, 864 F.2d 1212, 1213 (5th Cir. 1989)
(holding that state law claims cannot pend from a federal one over which the
district court lacks subject matter jurisdiction). We conclude, therefore, that the
consideration of the other issues in the case by the district court was surplusage.
Stanley v. CIA, 639 F.2d 1146, 1157 (5th Cir. Unit B Mar. 1981) (“A federal
district court is under a mandatory duty to dismiss a suit over which it has no
jurisdiction. When a court must dismiss a case for lack of jurisdiction, the court
should not adjudicate the merits of the claim.” (internal citations omitted)).
       Because the resolution of this case is based solely on lack of subject matter
jurisdiction, Appellants’ claims should be dismissed without prejudice. See Hitt
v. Pasadena, 561 F.2d 606, 608 (5th Cir. 1977) (noting that a dismissal for lack
of subject matter jurisdiction is not a determination of the merits). The effect of
our ruling, then, is to modify the district court’s take-nothing judgment to be a
dismissal without prejudice. Future events very well may make this claim ripe
and proper before the district court. It is just not proper now.
                                      IV. Sanctions
       “We review a [district] court’s imposition of sanctions for abuse of
discretion.” Natural Gas Pipeline Co. of Am. v. Energy Gathering, Inc., 2 F.3d
1397, 1410 (5th Cir. 1993).4 The district court’s final judgment ordered that


       4
         “[W]e recognize that a district court always has jurisdiction to impose sanctions
designed to enforce its own rules, even after that court no longer has jurisdiction over the
substance of a case[.]” Fleming & Assocs. v. Newby & Tittle, 529 F.3d 631, 637 (5th Cir. 2008).

                                              6
Appellees recover $385,000 in attorney’s fees from Pillar. The same day that the
district court issued its final judgment, it also issued its Opinion on Safe-Harbor
Notice, overruling Pillar’s objections to its notice of potential sanctions as
defective and in violation of Federal Rule of Civil Procedure 11. In this opinion,
the district court neither referenced nor relied on Rule 11 as its basis for
imposing sanctions against Pillar; rather, the district court cited Chambers v.
NASCO, Inc., 501 U.S. 32 (1991), and found that the multiple examples of
“Pillar’s intransigence” were sufficient to trigger the court’s inherent power to
sanction bad faith conduct.
       This Court has reversed sanctions awards when, as here, the district court
merely made a generalized complaint about the sanctioned party’s conduct. See,
e.g., Goldin v. Bartholow, 166 F.3d 710, 722-23 (5th Cir. 1999); Elliott v. Tilton,
64 F.3d 213, 217 (5th Cir. 1995); cf. Travelers Ins. Co. v. St. Jude Hospital of
Kenner, La., Inc., 38 F.3d 1414, 1417 n.6 (5th Cir. 1994) (finding of bad faith
supported by five paragraphs in order specifically addressing plaintiff’s conduct).
“Moreover, the standard for the imposition of sanctions using the court’s
inherent powers is extremely high. The court must find that the very temple of
justice has been defiled by the sanctioned party’s conduct.” Goldin, 166 F.3d at
722-23 (internal quotation marks and citation omitted). Because “[n]othing in
the record reflects conduct that reaches this level[,] . . . the imposition of
sanctions using the court’s inherent powers . . . constitutes an abuse of
discretion,” and requires reversal. Id. at 723. Appellants are warned, however,




 “‘It is well established that a federal court may consider collateral issues after an action is no
longer pending.’” Id. at 637-38 (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395
(1990)); see also Willy v. Coastal Corp., 503 U.S. 131, 137-39 (1992) (holding that a district
court had jurisdiction to impose Rule 11 sanctions regardless of the existence of subject-matter
jurisdiction).

                                                7
that contemplated future filings in the courts should be carefully scrutinized
before filing to ensure that they present a current case or controversy.5
                                      V. Conclusion
       Accordingly, the district court’s judgment is MODIFIED to reflect a
dismissal of the case without prejudice. The award of sanctions is REVERSED.
Our resolution of this case means that there will be no further activities in the
district court in this case. Accordingly, we need not decide Appellants’ request
to send this case to another district judge, and we express no opinion on that
matter.




       5
          Although Appellees moved for Rule 11 sanctions, it appears that the district court
imposed sanctions against Pillar pursuant to its inherent powers, not Rule 11. Regardless,
the record would not have supported such an award. “A district court abuses its discretion if
it imposes Rule 11 sanctions based on (1) an erroneous view of the law or (2) a clearly
erroneous assessment of the evidence.” Skidmore Energy, Inc. v. KPMG, 455 F.3d 564, 566
(5th Cir. 2006). Rule 11 imposes an objective standard of “reasonableness under the
circumstances.” Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866, 873 (5th Cir. 1988) (en
banc). “The district court is not only required to determine whether the total hours claimed
are reasonable, but also whether particular hours claimed were reasonably expended.” La.
Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995) (citation omitted).
        Appellees submitted an affidavit to the district court stating they incurred $540,481.62
in legal fees for 1,174.7 hours. The affidavit also listed the documents drafted for this case,
the hearings and meetings attended, and the people who performed legal work and their
corresponding billing rates. The affidavit further averred that the billing rates were
reasonable and customary for those charged in the Houston area for the same or similar
services performed by professionals with comparable experience, ability, and reputation.
However, no billing records were submitted; there was no indication of how much time was
spent on any particular document, hearing, or meeting; and there was no indication of who
was performing what task at which applicable billing rate. It is impossible to determine from
this record whether “particular hours claimed [by Appellees] were reasonably expended on the
litigation” or were caused by any sanctionable conduct. Id. at 325. Accordingly, the imposition
of sanctions pursuant to Rule 11 would have constituted an abuse of discretion.

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