The Third Circuit, in an unpublished nonprecedential opinion, has held that the district court is required to resolve a sanctions motion filed while a case was pending. It must do so even though the underlying case was dismissed. In this particular case, the district court held that the sanctions motion was “moot” after it granted summary judgment. The Third Circuit disagreed:
We hold that the District Court’s refusal to reach the merits of the Rule 11 motion was in error. A district court “must resolve any issues about imposition of sanctions,” including Rule 11 sanctions, “prior to, or contemporaneously with, entering final judgment.” Gary, 517 F.3d at 202. This obligation to resolve “collateral issues” is not mooted “after an action is no longer pending,” Willy v. Coastal Corp., 503 U.S. 131, 137-38 (1992) (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395 (1990)), for a district court retains jurisdiction to impose Rule 11 sanctions even when it lacks subject-matter jurisdiction over the claim giving rise to the sanctionable conduct, Lazorko v. Pa. Hosp., 237 F.3d 242, 247 (3d Cir. 2000). Here, therefore, the final judgment on the Brice’s claims against Bauer did not moot Bauer’s Rule 11 motion, and the District Court erred by declining to decide that motion on its merits.
Because we do not ordinarily consider issues not passed upon below, Goldenstein v. Repossessors Inc., 815 F.3d 142, 149 (3d Cir. 2016), and because “motions under Rule 11 must be decided in the first instance by the trial court absent extraordinary circumstances,” Gary, 517 F.3d at 202-03, we will not consider the parties’ arguments on the merits of Bauer’s Rule 11 motion and we will remand for the District Court to address the merits of Bauer’s Rule 11 motion in the first instance. While the Brices object that further proceedings in the District Court may duplicate a parallel sanctions determination in state court under Pennsylvania Rule of Civil Procedure 1023.2, we are persuaded that the proceedings will address—and may impose different sanctions for—different alleged misconduct. That is, the District Court’s Rule 11 determination will address whether the Brices’ earlier filings in federal court warrant sanctions, see Fed. R. Civ. P. 1, while any state court determination under Pennsylvania Rule of Civil Procedure 1023.2 will address whether the Brices’ subsequent filings in state court warrant sanctions, see Robinson v. State Emps.’ Ret. Bd., No. 1136 C.D. 2014, 2015 WL 5314660, at *5 (Pa. Commw. Ct. Mar. 10, 2015). Thus, we perceive no judicial economy concerns arising from the two sanctions determinations proceeding concurrently.