## Facts

- A Wisconsin franchisee sued a Texas franchisor in federal court under diversity jurisdiction, alleging misrepresentations inducing a $15,000 investment and asserting claims under common-law misrepresentation and Wisconsin franchise statutes.
- After the complaint was filed, the case experienced delay, including disruption following the death of plaintiff’s attorney.
- Following a final pretrial conference, the district court concluded necessary pretrial work had not been completed and entered an order conditionally dismissing the case for want of prosecution, with a stay.
- The conditional order stated dismissal would be vacated if plaintiff’s counsel completed specified discovery and submitted a new pretrial report by a set date.
- Plaintiff deliberately chose not to conduct the ordered discovery, asserting discovery would not benefit plaintiff and could assist defendant, and that plaintiff preferred to develop its case at trial.
- The district court dismissed the action after plaintiff did not comply with the discovery-directed conditions.
- Plaintiff appealed, challenging the court’s authority to require it to pursue discovery as a condition of avoiding dismissal when it was prepared to proceed to trial.

## Issues

1. Whether a district court, through Rule 16 case management or the discovery rules, may compel a party to conduct discovery it does not seek.
2. Whether dismissal is a proper sanction for refusing to conduct court-ordered discovery when the refusal does not amount to a failure to prosecute.

## Decision

- The Seventh Circuit reversed the dismissal and remanded.
- The court held the Federal Rules do not authorize a district court to force a party to pursue discovery as part of pretrial management.
- The court held dismissal for noncompliance with a discovery-compulsion order is permissible only if the noncompliance can fairly be treated as a failure to prosecute.
- Because plaintiff was willing to proceed to trial and the refusal reflected a tactical choice rather than abandonment of the case, the conduct did not constitute failure to prosecute.

## Legal Principles

- Rule 16 permits courts to manage pretrial proceedings, including scheduling and structuring discovery, but does not authorize compelling a party to initiate discovery it does not want.
- Courts may enforce discovery obligations arising from proper party-initiated discovery requests; sanctions may follow from wrongful noncompliance with such obligations.
- Dismissal is an extreme sanction and is improper when imposed solely to enforce a judicially imposed discovery program, absent a genuine failure to prosecute.

## Conclusion

The Seventh Circuit set limits on pretrial case-management authority by holding that a party may proceed to trial without conducting discovery, and that dismissal for refusing court-directed discovery is improper unless the refusal constitutes a true failure to prosecute.


Identiseal Corp. of Wis. v. Positive Identification Sys., Inc., 560 F.2d 298 (7th Cir. 1977)