20-2172 Confederación Hípica De Puerto Rico, Inc.; Camarero Racetrack Corp. v. Confederaciónde Jinetes Puertorriqueños, Inc.

United States Court of Appeals
For the First Circuit
Nos. 19-2201
20-2172
CONFEDERACIÓN HÍPICA DE PUERTO RICO, INC.; CAMARERO RACETRACK
CORP.,
Plaintiffs, Appellees,
v.
CONFEDERACIÓN DE JINETES PUERTORRIQUEÑOS, INC.; ABNER ADORNO;
CARLOS QUIÑONES; CINDY SOTO; DAVID ROSARIO; EDWIN CASTRO; HÉCTOR
BERRÍOS; HÉCTOR RIVERA; JOMAR GARCÍA; KENNEL PELLOT; LUIS
NEGRÓN; MARIO M. SÁNCHEZ; PEDRO GONZÁLEZ; SASHA ORTIZ; STEVEN
FRET; MIGUEL A. SÁNCHEZ,
Defendants, Appellants,
ALEXIS VALDÉS; ANARDIS RODRÍGUEZ; DAVID ORTIZ; ERIK RAMÍREZ;
ISMAEL PERÉZ; ISRAEL O. RODRÍGUEZ; JOSÉ A. HERNANDEZ; JUAN
CARLOS DÍAZ; JORGE G. ROBLES; JAVIER SANTIAGO; MISAEL MOLINA;
KEVIN NAVARRO; PABLO RODRÍGUEZ; ALFONSO CLAUDIO; JONATHAN
AGOSTO; YASHIRA TOLENTINO; JOSÉ M. RIVERA; ALVIN COLÓN; JESÚS
GUADALUPE; JAN CARLOS SUÁREZ; ASOCIACION DE JINETES DE PUERTO
RICO, INC.; RAMÓN SÁNCHEZ; CONJUGAL PARTNERSHIP ADORNO-DOE;
CONJUGAL PARTNERSHIP DOE-SOTO; CONJUGAL PARTNERSHIP ORTIZ-DOE;
CONJUGAL PARTNERSHIP H. DOE-TOLENTINO; CONJUGAL PARTNERSHIP
ADORNO-DOE; CONJUGAL PARTNERSHIP VALDÉS-DOE; CONJUGAL
PARTNERSHIP CLAUDIO-DOE; CONJUGAL PARTNERSHIP COLÓN-DOE;
CONJUGAL PARTNERSHIP QUINONES-DOE; CONJUGAL PARTNERSHIP DOE-
SOTO; CONJUGAL PARTNERSHIP ORTIZ-DOE; CONJUGAL PARTNERSHIP
ALEMAN-DOE; CONJUGAL PARTNERSHIP CASTRO-DOE; CONJUGAL
PARTNERSHIP DELPINO-DOE; CONJUGAL PARTNERSHIP BERRÍOS-DOE;
CONJUGAL PARTNERSHIP RIVERA-DOE; CONJUGAL PARTNERSHIP CEPEDA-
DOE; CONJUGAL PARTNERSHIP PERÉZ-DOE; CONJUGAL PARTNERSHIP
RODRÍGUEZ-DOE; CONJUGAL PARTNERSHIP SUÁREZ-DOE; CONJUGAL
PARTNERSHIP SANTIAGO-DOE; CONJUGAL PARTNERSHIP GUADULUPE;
CONJUGAL PARTNERSHIP GARCÍA-DOE; CONJUGAL PARTNERSHIP DAVILA-
DOE; CONJUGAL PARTNERSHIP ROBLES-DOE; CONJUGAL PARTNERSHIP
HERNANDEZ-DOE; CONJUGAL PARTNERSHIP CABRERADOE; CONJUGAL
PARTNERSHIP DÍAZ-DOE; CONJUGAL PARTNERSHIP PELLOT-DOE; CONJUGAL

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PARTNERSHIP NAVARRO-DOE; CONJUGAL PARTNERSHIP NEGRÓN-DOE;
CONJUGAL PARTNERSHIP SÁNCHEZ-DOE; CONJUGAL PARTNERSHIP SÁNCHEZ-
DOE 30; CONJUGAL PARTNERSHIP MOLINA-DOE; CONJUGAL PARTNERSHIP
RODRÍGUEZ-DOE 24; CONJUGAL PARTNERSHIP GONZÁLEZ-DOE; CONJUGAL
PARTNERSHIP SÁNCHEZ-DOE 29; CONJUGAL PARTNERSHIP ORTIZ-DOE 26;
CONJUGAL PARTNERSHIP FRET-DOE; CONJUGAL PARTNERSHIP DOE-
TOLENTINO; JANE DOES; JANE DOES 2-4; 6-35 JOHN DOES 1-2,
Defendants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Daniel R. Domínguez, U.S. District Judge]
Before
Lynch and Kayatta, Circuit Judges,
and Woodlock,* District Judge.
Axel A. Vizcarra-Pellot and Peter J. Porrata, with whom the
Law Offices of Peter John Poratta was on brief, for appellants.
Manuel Porro-Vizcarra and Roberto Lefranc Morales, with whom
Luz Yanix Vargas-Perez and Martínez-Álvarez Menéndez Cortada &
Lefranc Romero, PSC were on brief, for appellees.
April 4, 2022
* Of the District of Massachusetts, sitting by
designation.

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LYNCH, Circuit Judge. The Sherman Antitrust Act usually
forbids would-be competitors from staging a group boycott. 15
U.S.C. § 1; see Nw. Wholesale Stationers, Inc. v. Pac. Stationery
& Printing Co., 472 U.S. 284, 290 (1985). Federal statutes and
controlling Supreme Court case law create an exemption for certain
conduct, commonly called the labor-dispute exemption. See 15
U.S.C. § 17; 29 U.S.C. §§ 52, 101, 104, 105, 113.
In this action, brought by an association of horse owners
("Hípica") and the owner of a racetrack ("Camerero") against a
group of jockeys who demanded higher wages and refused to race,
the district court erroneously determined that the labor-dispute
exemption does not apply. The district court preliminarily and
permanently enjoined the work stoppage, awarded summary judgment
against the jockeys, their spouses and conjugal partnerships, and
an association representing them ("Jinetes"), and imposed
$1,190,685 in damages. Confederación Hípica de Puerto Rico v.
Confederación de Jinetes Puertorriqueños, Inc., 419 F. Supp. 3d
305, 311, 313 (D.P.R. 2019); Confederación Hípica De Puerto Rico,
Inc. v. Confederación De Jinetes Puertorriqueños, Inc., 296 F.
Supp. 3d 416, 421, 423-26 (D.P.R. 2017).
We reverse the district court's entry of summary
judgment against the jockeys and direct, on remand, dismissal of
the case. We also vacate sanctions that the district court imposed
against the defendants.

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I.
We briefly recount the background to this dispute.
Puerto Rico is home to one horse-racing track, the
Hipódromo Camarero in Canóvanas, which is operated by plaintiff
Camarero. Horse owners hire jockeys on a race-by-race basis.
Since 1989, the jockeys have been paid a $20 mount fee for each
race they participate in. The fortunate jockeys who finish in the
top five positions in each race share in the "purse" -- the prize
money for the top five horses. A Puerto Rico government agency,
established in its current form in 1987, regulates the sport. See
P.R. Laws Ann. tit. 15, § 198e. It embodied the compensation
structure we have described in regulations in 1989. See
Confederación Hípica de Puerto Rico, No. JH-88-12 (P.R. Admin. of
the Racing Sport & Indus. Racing Bd. Mar. 28, 1989).
The jockeys have long chafed at their employment
conditions. They object to the mount fee, which is about one-
fifth what jockeys receive in the mainland United States. They
also complain about pre-race weigh-in procedures and about the
conduct of racing officials.
In early June 2016, those long-simmering grievances
boiled over. On June 10, several jockeys delayed the start of a
race to demand that racing officials discuss the weigh-in
procedures. As a result of that delay, the officials fined those
jockeys. The jockeys responded through a pair of associations:

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defendant Jinetes and a second smaller group ("AJP"). On behalf
of dozens of jockeys, the associations disputed the fines and
objected to jockey compensation. The associations then attempted
to negotiate employment conditions with plaintiff Hípica, the
representative of the horse owners. Those negotiations resolved
none of the issues, and the racing regulators declined the jockeys'
request to mediate.
After negotiations failed, in pursuit of their demands
for increased compensation, thirty-seven jockeys refused to race
for three days. Jinetes claimed credit for organizing the work
stoppage. As no jockeys had registered to ride on June 30, July
1, and July 2, 2016, Camerero canceled the races scheduled for
those days.
Hípica and Camerero sued the jockeys, their spouses and
conjugal partnerships, and Jinetes, alleging that the defendants
engaged in a group boycott in violation of federal antitrust law.1
See 15 U.S.C. § 1. The defendants counterclaimed, alleging that
the plaintiffs violated federal civil rights and antitrust law.
See id.; 42 U.S.C. §§ 1981, 1983.
The plaintiffs sought and the district court granted a
temporary restraining order on July 1 to direct the jockeys back
1 The plaintiffs also sued AJP, which represented a
handful of jockeys. AJP settled and is not a party to this appeal.

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to work.2 Although the order came too late to restore the July 2
racing calendar, the jockeys otherwise complied. The district
court then held an extended preliminary and permanent injunction
hearing. On the first day of the hearing, the district court
sanctioned Jinetes, requiring the association to pay some of the
plaintiffs' attorney's fees because it concluded sua sponte that
defense counsel failed to meet and confer with plaintiffs' counsel
as ordered. After the hearing, the district court granted a
preliminary and permanent injunction, holding that the jockeys are
independent contractors, that they had acted in concert to restrain
trade, and that they could not benefit from the labor-dispute
exemption because of their independent-contractor status. The
district court reasoned that a 1979 decision of this court, San
Juan Racing Ass'n, Inc. v. Asociacion de Jinetes de Puerto Rico,
590 F.2d 31 (1st Cir. 1979), controlled its determination.
Proceeding to the damages stage, the district court
granted summary judgment to the plaintiffs. After trebling the
plaintiffs' losses, it awarded $602,466 in damages to Camarero and
$588,219 in damages to Hípica. The defendants appealed.
2 This appeal does not concern the propriety of the scope
of the injunctions. But see Authenticom, Inc. v. CDK Glob., LLC,
874 F.3d 1019, 1026 (7th Cir. 2017) ("The proper remedy for a
section 1 violation based on an agreement to restrain trade is to
set the offending agreement aside."). Our opinion should not be
read to endorse the scope of the relief the district court ordered.

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The defendants also moved to reconsider the judgment.
They contended that the plaintiffs failed to join indispensable
parties because they had never actually served the jockeys' wives
and conjugal partnerships. The district court denied the motion,
and the plaintiffs separately appealed from that denial.
II.
We start our analysis with the antitrust issues.
As this dispute turns on a question of law, we review de
novo both the district court's grant of summary judgment and its
issuance of the injunction. Spectrum Ne., LLC v. Frey, 22 F.4th
287, 291 (1st Cir. 2022) (citing Lawless v. Steward Health Care
Sys., LLC, 894 F.3d 9, 21 (1st Cir. 2018)).
"[T]here is an inherent tension between national
antitrust policy, which seeks to maximize competition, and
national labor policy, which encourages cooperation among workers
to improve the conditions of employment." H. A. Artists & Assocs.,
Inc. v. Actors' Equity Ass'n, 451 U.S. 704, 713 (1981). Most of
the time, antitrust law forbids would-be competitors from
colluding to increase prices. When the price is a laborer's wage,
however, a different set of rules apply. That must be so, lest
antitrust law waylay ordinary collective bargaining. See Brown
v. Pro Football, Inc., 518 U.S. 231, 236-37 (1996). Thus a pair
of exemptions -- one statutory and one nonstatutory -- shield

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legitimate labor conduct from antitrust scrutiny. We deal here
with the statutory exemption.
The statutory labor-dispute exemption flows from both
the Clayton Act and the Norris-LaGuardia Act. H.A. Artists &
Assocs., 451 U.S. at 706 n.2 (citing 15 U.S.C. § 17 and 29 U.S.C.
§§ 52, 104, 105, 113). Through those two statutes, Congress
exempted labor disputes from antitrust law. See Milk Wagon
Drivers' Union, Loc. No. 753 v. Lake Valley Farm Prods., 311 U.S.
91, 101-03 (1940); Apex Hosiery Co. v. Leader, 310 U.S. 469, 503
(1940).
The Clayton Act declares that "[t]he labor of a human
being is not a commodity or article of commerce," subject to
antitrust law. 15 U.S.C. § 17. To implement that policy, the
Norris-LaGuardia Act provides that "persons participating or
interested in [a labor dispute]" may engage in an enumerated set
of acts -- including entering agreement to "refus[e] to perform
work" -- without falling afoul of the Sherman Act's prohibition on
"engag[ing] in an unlawful combination or conspiracy." 29 U.S.C.
§§ 104, 105; see Apex Hosiery Co., 310 U.S. at 503. The Norris-
LaGuardia Act defines a "labor dispute" by specifically providing
that:
(a) A case shall be held to involve or to grow
out of a labor dispute when the case involves
persons who are engaged in the same industry,
trade, craft, or occupation; or have direct or
indirect interests therein . . . when the case

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involves any conflicting or competing
interests in a "labor dispute" . . . of
"persons participating or interested" therein
. . . .
(b) A person or association shall be held to
be a person participating or interested in a
labor dispute if relief is sought against him
or it, and if he or it is engaged in the same
industry . . . in which such dispute occurs,
or has a direct or indirect interest therein,
or is a member, officer, or agent of any
association composed in whole or in part of
employers or employees engaged in such
industry . . . .
(c) The term "labor dispute" includes any
controversy concerning terms or conditions of
employment, or concerning the association or
representation of persons in negotiating,
fixing, maintaining, changing, or seeking to
arrange terms or conditions of employment,
regardless of whether or not the disputants
stand in the proximate relation of employer
and employee.
29 U.S.C. § 113.
The Supreme Court has explained that the statutory
exemption applies when four conditions are met. See J. Bauer, et
al., Kintner's Federal Antitrust Law § 72.3 (2021 update). First,
the conduct must be undertaken by a "bona fide labor organization."
H.A. Artists & Assocs., 451 U.S. at 717 n.20. Second, the conduct
must actually arise from a labor dispute, as defined under the
Norris-LaGuardia Act. 29 U.S.C. § 113. Once those two
prerequisites are satisfied, we apply a further "two-prong test":
the organization must "act[] in its self-interest and . . . not
combine with non-labor groups." See Am. Steel Erectors, Inc. v.

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Loc. Union No. 7, Int'l Ass'n of Bridge, Structural, Ornamental &
Reinforcing Iron Workers, 536 F.3d 68, 76 (1st Cir. 2008) (quoting
United States v. Hutcheson, 312 U.S. 291, 232 (1941)). To
summarize, then, the statutory labor-dispute exemption applies to
conduct arising (1) out of the actions of a labor organization and
undertaken (2) during a labor dispute, (3) unilaterally, and
(4) out of the self-interest of the labor organization. See H.A.
Artists & Assocs., 451 U.S. at 714-15; see also Bauer, supra
§ 72.3.
We discuss the elements of the exemption in turn.
First, a labor organization is a "bona fide" group representing
laborers. H.A. Artists & Assocs., 451 U.S. at 717 n.20. It need
not be formally recognized as a union. See NLRB v. Wash. Aluminum
Co., 370 U.S. 9, 14-15 (1962). Second, a labor dispute broadly
encompasses "any controversy concerning terms or conditions of
employment." See Jacksonville Bulk Terminals, Inc. v. Int'l
Longshoremen's Ass'n, 457 U.S. 702, 709-12 (1982) (quoting 29
U.S.C. § 113(c)). Third, a labor group acts unilaterally unless
it coordinates with a nonlabor group. Hutcheson, 312 U.S. at 232;
see also Bauer, supra § 72.6. And fourth, a labor organization
acts in its self-interest when its activities "bear a reasonable
relationship to a legitimate union interest." Am. Steel Erectors,
533 F.3d at 76 (quoting Allied Int'l, Inc. v. Int'l Longshoremen's
Ass'n, 640 F.2d 1368, 1379 (1st Cir. 1981)); see Am. Fed'n of

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Musicians v. Carroll, 391 U.S. 99, 110–13 (1968); see also Bauer,
supra § 72.5.
We apply the statutory framework, emphasizing the first
two elements, as the second pair are not seriously disputed here.
We conclude that the jockeys' action fell within the labor-dispute
exemption. Jinetes, which advocates for the jockeys' terms of
employment, is a labor organization. The defendants sought higher
wages and safer working conditions, making this a core labor
dispute. See Loc. Union No. 189, Amalgamated Meat Cutters v.
Jewel Tea Co., 381 U.S. 676, 689 (1965). The plaintiffs make no
assertion that the defendants coordinated with any nonlabor group.
And the defendants acted to serve their own economic interests.
Because the dispute meets the statutory criteria, the labor-
dispute exemption applies.
The district court erred when it concluded that the
jockeys' alleged independent-contractor status categorically meant
they were ineligible for the exemption. We express no opinion on
whether the jockeys are independent contractors, because, by the
express text of the Norris-LaGuardia Act, a labor dispute may exist
"regardless of whether or not the disputants stand in the proximate
relation of employer and employee." 29 U.S.C. § 113(c). The
Court interpreted that provision in New Negro Alliance v. Sanitary
Grocery Co., 303 U.S. 552 (1938). There, a community association
encouraged a boycott of a grocery store in protest of the store's

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refusal to hire black employees. Id. at 559. The Supreme Court
held that the association's conduct fell within the labor-dispute
exemption because the association sought to influence the store's
terms of employment. Id. at 559-60; see also Columbia River
Packers Ass'n v. Hinton, 315 U.S. 143, 146 (1942). It explained
that the text of the Norris-LaGuardia Act was "intended to embrace
controversies other than those between employers and employees;
between labor unions seeking to represent employees and employers;
and between persons seeking employment and employers." New Negro
All., 303 U.S. at 560-61. New Negro Alliance thus precludes an
interpretation of the exemption limited to employees alone. See
also Am. Fed'n of Musicians, 391 U.S. at 111-14; H.A. Artists &
Assocs., 451 U.S. at 718, 721-22.
The key question is not whether the jockeys are
independent contractors or laborers but whether what is at issue
is compensation for their labor. We draw that principle from
Columbia River Packers Ass'n v. Hinton, 315 U.S. 143 (1942). In
that case, a group of fishermen tried to force exclusive contracts
on the canneries to which they sold fish. Id. at 145. Relying
on the fact that the fishermen were "independent entrepreneurs,"
the Supreme Court held that the labor-dispute exemption did not
apply. Id. at 144-45, 147. Instead, it explained that the
dispute "is altogether between fish sellers and fish buyers" and
"relat[es] solely to the sale of fish," without implicating "wages

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or hours or other terms and conditions of employment." Id. at
147. From Columbia River Packers, thus, comes a critical
distinction in applying the labor-dispute exemption: disputes
about wages for labor fall within the exemption but those over
prices for goods do not. See Allen Bradley Co. v. Loc. Union No.
3, Int'l Bhd. of Elec. Workers, 325 U.S. 797, 807 n.12 (1945) ("We
do not have here, as we did in [Columbia River Packers], a dispute
between groups of business men revolving solely around the price
at which one group would sell commodities to another group. On
the contrary, Local No. 3 is a labor union and its spur to action
related to wages and working conditions."). Whether or not the
jockeys are independent contractors does not by itself determine
whether this dispute is within the labor-dispute exemption.
Nor, contrary to the district court's reasoning, does
this court's decision in San Juan Racing mandate a different
outcome. In that case, a previous generation of jockeys went on
strike to seek higher wages from a previous owner of the Hipódromo.
590 F.2d at 32. The district court entered a preliminary
injunction, and we found no abuse of discretion in its conclusion
that the plaintiffs were likely to succeed on the merits. Id. at
33; see Am. Eutectic Welding Alloys Sales Co. v. Rodriguez, 480
F.2d 223, 226 (1st Cir. 1973) (orders granting preliminary
injunctions are reviewed for abuse of discretion). We held that
the "sparse" record supported the district court's preliminary

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conclusion that the jockeys' "collective refusal to deal with
plaintiff until their fees were increased constituted an illegal
effort to control prices through concerted action." San Juan
Racing, 590 F.2d at 32. The issue of concern in this case -- the
labor-dispute exemption -- was expressly not considered by the San
Juan Racing court.3 Id. A decision cannot create a precedent on
an issue unless the issue was actually decided. Gately v.
Massachusetts, 2 F.3d 1221, 1228 (1st Cir. 1993). Thus, San Juan
Racing does not preclude the jockeys from availing themselves of
the labor-dispute exemption.
We also reject the plaintiffs' contention that the
labor-dispute exemption does not apply because, in their view, it
is the Puerto Rico government that controls the jockeys' wages.
The argument fails both factually and legally.
The record shows that the plaintiffs have considerable
influence with regulators and have direct ability to affect the
3 In dicta, San Juan Racing referred to Taylor v. Loc. No.
7, Int'l Union of Journeymen Horseshoers, 353 F.2d 593 (4th Cir.
1965) (en banc). Assuming, for present purposes, that Taylor was
decided correctly, the circumstances were materially different
from this case. In Taylor, the Fourth Circuit, noting the
defendants were independent contractors, held that a group of
farriers was not entitled to use the labor dispute exemption to
protect their strike in favor of higher rates. Id. at 602-06.
Unlike the jockeys, however, and like the fishermen in Columbia
River Packers, the farriers provided not just labor but also a
product -- horseshoes -- to their customers. Id. at 607 (Sobeloff,
J., dissenting). We do not interpret Taylor to apply to a labor-
only case, such as we have here.

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jockeys' earnings. The plaintiffs admit that the horse owners
could have paid the jockeys at least some of the money they sought,
e.g., payment for exercising horses, without permission from
racing regulators. The record also shows that, in 1989, the
regulators set the jockeys' payment under the influence of both
the jockeys and the owners. As the plaintiffs conceded at oral
argument, the owners still can influence the jockeys' pay, but
they never offered to ask the regulators to raise rates. Further,
the plaintiffs agreed in 2007 to increase the jockeys' compensation
by giving the jockeys a share of the revenue from simulcast races.
Taken together, the evidence establishes that the plaintiffs have
power to influence -- and in some cases to adjust unilaterally --
the jockeys' compensation.
The law also provides the plaintiffs with no support.
Contrary to the plaintiffs' arguments, their dispute with the
defendants is a labor dispute because it centers on the
compensation they pay the jockeys for their labor. The labor-
dispute exemption applies in regulated industries. See, e.g.,
Pittsburgh & Lake Erie R.R. Co. v. Ry. Lab Executives' Ass'n, 491
U.S. 490, 514 (1989). At oral argument, the plaintiffs also
suggested that the defendants' work stoppage was an illegal
secondary boycott. They did not plead that claim in their
complaint, raise it before the district court, or argue it in their
briefs. It is thus triply waived. See Sparkle Hill, Inc. v.

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Interstate Mat Corp., 788 F.3d 25, 29-30 (1st Cir. 2015). Nor,
even had the plaintiffs preserved it, would that argument have
merit. The National Labor Relations Act prohibits "secondary
boycotts" -- using a strike to influence the labor policies of a
person other than the laborers' direct employer -- as an unfair
trade practice. 29 U.S.C. § 158(b)(4)(i)(B); see Loc. Union No.
25, A/W Int'l Bhd. of Teamsters v. NLRB, 831 F.2d 1149, 1152 (1st
Cir. 1987) (citing Nat'l Woodwork Mfrs.' Ass'n v. NLRB, 386 U.S.
612, 632 (1976)). If a labor group boycotts to obtain a concession
that its "immediate employer is not in a position to award," it
violates that prohibition. Id. at 1153 (quoting NLRB v. Enter.
Ass'n of Steam, Hot Water, etc. Pipefitters, 429 U.S. 507, 525-26
(1977)). But that is not the case here. The defendants here
sought to change the rates the plaintiffs paid them. The owners
could have approved some increases themselves and could have
influenced regulators to approve other fee increases across the
industry. So the secondary boycott argument fails as well.
The plaintiffs also appear to advert to a line of cases
holding unlawful private restraints of trade intended to influence
government action. Yet they fare no better with that argument.
Even if the jockeys ultimately sought to influence a political
body through their work stoppage, their political activism would
make no difference. As long as an employee-employer relationship
-- broadly understood -- is at the core of the controversy, as

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here, then any political motivations for a work stoppage would not
take a dispute out of the labor exemption. See Jacksonville Bulk
Terminals, 457 U.S. at 711-19.4
As the labor-dispute exemption applies, the district
court erred in granting the plaintiffs an injunction and summary
judgment. The plaintiffs are legally precluded from prevailing
on their antitrust claims. See Apex Hosiery, 310 U.S. at 503. On
remand, the district court must dismiss the complaint. See Bruns
v. Mayhew, 750 F.3d 61, 71–73 (1st Cir. 2014) (explaining that
when we hold that the plaintiff has failed to state a claim on
which relief can be granted as a matter of law, the appropriate
disposition is to remand the case with instructions to dismiss the
complaint).
III.
We next turn to the sanctions the district court imposed
regarding the conduct of Jinetes's attorneys.
We review an order imposing sanctions for abuse of
discretion. In re Ames, 993 F.3d 27, 34 (1st Cir. 2021). A
district court abuses its discretion to sanction misconduct when
4 None of the Supreme Court's subsequent cases about
politically motivated anticompetitive actions alter that rule.
See Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S.
492, 499-501 (1988) (curtailing politically motivated boycott rule
for sale of goods); FTC v. Superior Ct. Trial Laws. Ass'n, 493
U.S. 411, 425 (1990) (labor exemption not argued); see also
Superior Ct. Trial Laws. Ass'n v. FTC, 856 F.2d 226, 230 n.6 (D.C.
Cir. 1988).

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it ignores a material factor, relies on an improper factor, or
"makes a serious mistake in weighing" the proper factors. Id.
(quoting Anderson v. Beatrice Foods Co., 900 F.2d 388, 394 (1st
Cir. 1990)).
At 2:44 p.m. on the afternoon before the first day of
the preliminary injunction hearing, the district court ordered
counsel to meet and attempt to agree on a joint stipulation of
facts. It also ordered plaintiffs' counsel to provide notice of
the order to defense counsel by phone or email. Opting for email,
at 3:15 p.m., plaintiffs' counsel invited defense counsel to a
meeting scheduled at 6:00 p.m. at the offices of plaintiffs'
counsel. Defense counsel did not attend that meeting.
At the hearing the next morning, the district court sua
sponte raised concerns regarding defense counsel's failure to
attend the previous evening's meeting. Defense counsel explained
that they received insufficient notice, having not checked their
email before 7:00 p.m. The district court sanctioned Jinetes's
attorneys, requiring payment for one-half hour of plaintiffs' fees
for their three attorneys (i.e., $600). The district court later
raised that award to $2,848.75 without explanation.5
5 The district court, through its oral order at the
hearing, appeared to sanction defense counsel and not Jinetes.
Its written orders required the Jinetes to pay the attorneys' fees
through its attorneys until Jinetes communicated to the court that
the association "would be taking care of payment of the sanctions

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The district court failed to explain on what basis it
rested its authority to sanction Jinetes or its attorneys. Since
there was no relevant filing to bring sanctions under Rule 11(b)
into play, see Balerna v. Gilberti, 708 F.3d 319, 323 (1st Cir.
2013), there are only three6 potential sources of authority to
consider: 28 U.S.C. § 1927; the district court's inherent authority
to sanction litigation misconduct; and the district court's
contempt power. See generally G. Joseph, Sanctions: The Federal
Law of Litigation Abuse § 1 (6th ed., Dec. 2021 update). The
district court could not, without a bad faith finding in this
context, impose a sanction under either § 192, see Jensen v.
Phillips Screw Co., 546 F.3d 59, 64 (1st Cir. 2008), or under its
inherent power, see In re Charbono, 790 F.3d 80, 87-88 (1st Cir.
2015). Nor could the district have sanctioned Jinetes as a
punishment for contempt because it never held contempt
proceedings. See Int'l Union, United Mine Workers v. Bagwell, 512
imposed by the Court." Thereafter the district court specifically
directed its sanction order be paid by Jinetes.
6 We note that the district court, some nine months after
orally imposing the sanctions, issued a written order stating that
it had done so under Fed. R. Civ. P. 37(b). We can find no
authority under Rule 37(b) to impose a sanction for the failure by
Jinetes's counsel to attend the meeting to discuss stipulations.
Our case law is clear that "[s]anctions under Rule 37(b)(2) may
not be levied without the issuance, and subsequent violation, of
a formal order under Rule 37(a)." In re Williams, 156 F.3d 86,
89 n.1 (1st Cir. 1998) (citing R.W. Int'l Corp. v. Welch Foods,
Inc., 937 F.2d 11, 18 (1st Cir. 1991)). No violation of any of
the specified orders under Rule 37(a) was implicated by defense
counsel's failure to attend the meeting.

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U.S. 821, 833 (1994) (citing Cooke v. United States, 267 U.S. 517,
534 (1925)) (describing procedural requirements for civil contempt
committed outside the presence of the court).
The record is barren of any findings to support the
sanctions other than that defense counsel failed to meet and
confer. Without a finding of bad faith or the deployment of
contempt proceedings, we cannot sustain the district court's award
of attorneys' fees. We thus vacate that sanction.
IV.
We need not reach any of the other issues the defendants
raise on appeal.
The defendants contend that the district court erred
when it effectively ignored their counterclaims in entering
judgment. Defense counsel, however, informed us at oral argument
that if the defendants prevailed on the labor-dispute exemption
issue, they would drop their counterclaims on remand.
Finally, the defendants' challenge to the district
court's denial of their motion to reconsider the judgment is moot.
The challenge was rooted in the plaintiffs' alleged failure to
join indispensable parties: the jockeys' spouses and conjugal
partnerships. As no claims against any of those parties survive
this appeal, we do not reach the reconsideration issue.

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V.
We reverse the district court's judgment, vacate the
injunction and sanctions orders, and remand the case with
instructions to dismiss the complaint and counterclaims.

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