(emphasis added). Despite the misstatement in the pre-trial order, the parties were well aware that Plaintiff's state law fraud and breach of contract claims remained viable. The record does not support Defendants' argument that the district court dismissed these claims.[1]
B.
Even if we assume the district court dismissed all substantive claims after entering the order of default, the court retained jurisdiction to enforce the sanction. Defendants argue that constitutional limits on subject matter jurisdiction restrict the district court's authority to enforce a sanction after dismissing all substantive claims. See U.S. Const. Art III, § 2. Article III limits the federal courts' subject matter jurisdiction to specifically defined cases and controversies. Id. Accordingly, Article III limits a federal court's authority to impose and enforce sanctions when the case or controversy at issue is not properly before the federal courts. See Hernandez v. Conriv Realty Assoc., 182 F.3d 121, 124 (2d Cir. 1999) (holding "where federal subject matter jurisdiction does not exist, federal courts do not have the power to dismiss with prejudice, even as a procedural
- ↑ Defendants assert Plaintiff agreed to accept a default judgment in lieu of pursuing his fraud and breach of contract claims and thus consented to dismissal of these claims. This clearly is not the case. Plaintiff repeatedly objected to the district court's decision to limit the set-off hearing to issues related to the default judgment. Defendants also note that Plaintiff did not cross-appeal the dismissal of his remaining claims. The district court did not enter an order dismissing the claims. Accordingly, there was no dismissal for Plaintiff to appeal.
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