Improper Joinder Is Jurisdictional: District Courts Must Dismiss (Not Reach Merits) and Cannot Award Merits-Based Fees Against the Nondiverse Defendant

I. Introduction

Carver v. Baustert (5th Cir. Mar. 2, 2026) arises from public commentary following the death of LSU student Madison Brooks. After Brooks was killed on a highway outside Baton Rouge, the Baton Rouge District Attorney alleged her death followed a rape by four men (including plaintiffs Casen Carver and Everett Lee), who allegedly left her on the highway. Brooks’s mother, Ashley Baustert, discussed the allegations on a Fox News program and blamed the men for her daughter’s death.

Carver and Lee sued Baustert, the host Nancy Grace, and Fox News in Louisiana state court for defamation. Grace (a Georgia citizen) and Fox News (a New York citizen) removed on diversity grounds under 28 U.S.C. §§ 1332 and 1441(a)–(b), contending that in-state defendant Baustert was improperly joined to defeat diversity and trigger the forum-defendant rule (28 U.S.C. § 1441(b)(2)).

The district court denied remand, found improper joinder under Smallwood v. Ill. Cent. R.R. Co., and then—critically—went on to grant Baustert’s Rule 12(b)(6) motion on the merits and awarded her fees under La. Stat. Ann. § 13:3381(B)(1). Carver and Lee appealed.

The key issue on appeal was structural rather than substantive: once the district court concluded it lacked jurisdiction over the claims against the nondiverse defendant (because she was improperly joined), could it nevertheless adjudicate those claims on the merits and award fees premised on that merits ruling?

II. Summary of the Opinion

The Fifth Circuit vacated and remanded. It held that after determining Baustert was improperly joined, the district court lacked subject-matter jurisdiction over the claims against her and therefore could not:

  • adjudicate those claims on the merits (including via Rule 12(b)(6)); or
  • award fees that depended on the merits adjudication.

The court emphasized that improper-joinder analysis may resemble a Rule 12(b)(6) inquiry, but it remains jurisdictional in nature. The panel also clarified that its decision did not foreclose sanctions or fee awards on some other lawful basis.

Judge Oldham concurred to stress that the district court retains power to sanction misconduct even when it lacks subject-matter jurisdiction over the merits, citing inherent-authority sanctions doctrine and 28 U.S.C. § 1447(c).

III. Analysis

A. Precedents Cited

1. The Fifth Circuit’s improper-joinder framework

The panel grounded its jurisdictional holding in the Fifth Circuit’s en banc decision Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568 (5th Cir. 2004) (en banc). Smallwood explains how a removing defendant may show improper joinder to preserve diversity jurisdiction despite a nondiverse (or forum) defendant. It also describes the analysis as “a Rule 12(b)(6)-type analysis” while warning that “the focus of the inquiry must be on the joinder, not the merits.”

The court then relied on Int'l Energy Ventures Mgmt. v. United Energy Grp., 818 F.3d 193 (5th Cir. 2016), which reiterates the two improper-joinder paths: (i) actual fraud in pleading jurisdictional facts, or (ii) failure to state a plausible claim against the nondiverse defendant. Crucially, Int'l Energy supplies the remedial rule: once the court determines there is no jurisdiction over the nondiverse party, it cannot proceed to merits adjudication as to that party.

2. Jurisdiction first: courts cannot reach merits without power to act

The per curiam opinion treats the jurisdiction/merits boundary as mandatory, not prudential, invoking:

  • Steel Co. v. Citizens for a Better Env't, 523 U.S. 83 (1998), for the principle that jurisdiction must be established before a federal court may address merits (“never the twain shall meet”).
  • Ex parte McCardle, 74 U.S. (7 Wall.) 506 (1868), for the canonical formulation: “Without jurisdiction the court cannot proceed at all in any cause.”
  • Spivey v. Chitimacha Tribe of La., 79 F.4th 444 (5th Cir. 2023), as a contemporary Fifth Circuit application of the same “jurisdiction before merits” imperative.

3. The anti-evasion principle behind improper joinder

To underscore why improper joinder exists at all—preventing plaintiffs from defeating removal by naming a local defendant against whom there is no viable claim—the court cited Wecker v. Nat'l Enameling & Stamping Co., 204 U.S. 176 (1907).

4. Sanctions despite jurisdictional defects (concurrence)

Judge Oldham’s concurrence marshals authority that a federal court may sanction litigation misconduct even when subject-matter jurisdiction over the merits is absent, starting with:

  • United States v. United Mine Workers of Am., 330 U.S. 258 (1947), for the proposition that federal courts have jurisdiction to determine their own jurisdiction.
  • Willy v. Coastal Corp., 915 F.2d 965 (5th Cir. 1990), aff'd, 503 U.S. 131 (1992), holding that a district court may impose sanctions irrespective of subject-matter jurisdiction, because sanction authority is necessary to protect the court’s processes.
  • Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980), as the Supreme Court anchor for inherent powers “necessary to the exercise of all others.”
  • Fifth Circuit reiterations: Ben E. Keith Co. v. Dining All., Inc., 80 F.4th 695 (5th Cir. 2023); Ratliff v. Stewart, 508 F.3d 225 (5th Cir. 2007); Friends for Am. Free Enter. Ass'n v. Wal-Mart Stores, Inc., 284 F.3d 575 (5th Cir. 2002); Elliott v. Tilton, 64 F.3d 213 (5th Cir. 1995).

The concurrence also points to 28 U.S.C. § 1447(c), emphasizing that fee-shifting may accompany remand where the court lacks subject-matter jurisdiction, and cites Martin v. Franklin Cap. Corp., 546 U.S. 132 (2005), for the discretionary standard governing § 1447(c) fees.

5. Defamation concepts used to assess the joinder theory (concurrence)

While the per curiam decision does not resolve defamation merits, the concurrence explains why the claims against Baustert appear meritless, citing:

  • Zerangue v. TSP Newspapers, Inc., 814 F. 2d 1066 (5th Cir. 1987), for the “gist” or substantial-truth principle under Louisiana law.
  • Fitzgerald v. Tucker, 737 So. 2d 706 (La. 1999), for the proposition that honest expressions of opinion are not defamatory under Louisiana law.

B. Legal Reasoning

1. The core rule: once improper joinder is found, the federal court cannot decide merits as to that defendant

The Fifth Circuit’s reasoning proceeds in two linked steps:

  1. Improper joinder is a jurisdictional gateway. Under Smallwood and Int'l Energy, the question is whether the nondiverse defendant’s presence should count for diversity purposes—i.e., whether the court has jurisdiction to treat the case as properly removable.
  2. Jurisdictional defects foreclose merits adjudication. Once the district court concluded Baustert was improperly joined, it necessarily concluded it lacked subject-matter jurisdiction over the claims against her. Under Steel Co. and McCardle, the court had to stop—meaning it had to dismiss rather than deny those claims on the merits.

The opinion acknowledges a practical source of confusion: Smallwood calls for a “12(b)(6)-type analysis.” But the panel re-emphasizes that “type” does not mean “merits adjudication.” The resemblance is methodological (plausibility-style assessment), not remedial (a merits judgment).

2. Fees tethered to merits fail when the merits ruling is jurisdictionally void as to the nondiverse defendant

Baustert argued the fee award could stand as “collateral” to the merits ruling. The panel rejected that argument as foreclosed by Int'l Energy: in diversity cases, “as long as a non-diverse party remains joined, the only issue the court may consider is that of jurisdiction itself.” Because the district court awarded fees “pursuant to Baustert’s request in her Rule 12(b)(6) motion” and thus based the award on its merits disposition, the fee award fell with the void merits ruling.

Importantly, the court limited its holding: it did not hold fees/sanctions are categorically unavailable after a jurisdictional defect; it held only that the district court could not award fees “based on its merits ruling” where it lacked subject-matter jurisdiction to issue that ruling.

3. The concurrence’s clarification: sanction authority survives, but must rest on a valid source

Judge Oldham’s concurrence harmonizes the majority’s jurisdictional command with practical case-management: even when a court cannot adjudicate merits, it may still police abuse of the judicial process. The concurrence identifies two principal pathways:

  • Inherent-power (and related) sanctions as described in Willy v. Coastal Corp. and Roadway Express, Inc. v. Piper.
  • 28 U.S.C. § 1447(c) fees in remand settings, with discretion framed by Martin v. Franklin Cap. Corp..

The concurrence’s additional discussion of the allegedly defamatory statements illustrates a factual basis the district court may consider on remand when evaluating sanctions: whether the joinder of Baustert was a “thinly-veiled and illegitimate effort” to prevent removal and whether the defamation claims were plainly implausible under the “gist”/truth defense and opinion protections recognized in Zerangue and Fitzgerald.

C. Impact

1. Procedural discipline in removal/improper-joinder cases

The decision reinforces a bright-line procedural sequence for district courts confronting improper joinder: a jurisdictional finding (improper joinder) must be implemented through jurisdictional remedies (dismissal of claims over which jurisdiction is lacking), not through merits dispositions dressed in Rule 12(b)(6) language.

2. Fee awards must be correctly sourced

The vacatur of the Louisiana statutory fee award (as awarded here) signals that when a court lacks subject-matter jurisdiction over a party, it cannot award fees that depend on a merits ruling against that party. On remand (and in future cases), litigants seeking fees must tie them to a valid jurisdiction-surviving authority (e.g., sanctions doctrine, § 1447(c) where applicable), and courts must articulate that basis explicitly.

3. Litigation behavior and “jurisdictional misconduct”

The concurrence’s emphasis on sanctions power is likely to influence practice in removal disputes: parties who attempt to manipulate forum through implausible joinder theories may face financial consequences even if the court cannot reach merits. The opinion thus separates two ideas that are often conflated: (i) lack of power to decide merits, and (ii) continuing power to protect the judicial process.

IV. Complex Concepts Simplified

  • Diversity jurisdiction (28 U.S.C. § 1332): Federal jurisdiction based on parties being citizens of different states (and meeting any amount-in-controversy requirement).
  • Removal (28 U.S.C. § 1441): The mechanism by which a defendant can move a case filed in state court into federal court if the case could have been filed there initially.
  • Forum-defendant rule (28 U.S.C. § 1441(b)(2)): Even if diversity exists, a case generally may not be removed if a “properly joined” defendant is a citizen of the forum state.
  • Improper joinder: A doctrine preventing a plaintiff from defeating diversity removal by naming an in-state (or nondiverse) defendant against whom the plaintiff has no plausible claim (or by fraudulently pleading jurisdictional facts).
  • “Rule 12(b)(6)-type analysis”: A plausibility-style look at whether the complaint states a claim; in improper-joinder analysis it is used to decide a jurisdictional question, not to enter a merits judgment against the challenged defendant.
  • Vacated and remanded: The appellate court wiped out the district court’s orders and sent the case back for further proceedings consistent with the appellate ruling.
  • Collateral sanctions/fees: Certain sanctions or fee awards may be imposed to protect court processes even if the court lacks power to decide the underlying merits—so long as the award rests on a valid legal source (e.g., inherent powers, § 1447(c) in proper settings).

V. Conclusion

Carver v. Baustert sharpens a procedural rule with practical consequences: once a district court concludes a nondiverse defendant was improperly joined, the court lacks subject-matter jurisdiction over the claims against that defendant and must dismiss rather than adjudicate merits—including by granting a Rule 12(b)(6) motion. Fee awards that depend on such an impermissible merits ruling cannot stand.

At the same time, the opinion (especially the concurrence) underscores that jurisdictional limits on merits do not disable the court’s authority to address litigation abuse. On remand, any fee shifting or sanctions must be anchored in a lawful, jurisdiction-surviving source of authority, not in a merits decision the court lacked power to make.