Tandy HAIRSTON; Truitt Glasper, doing business as Loan Store Corp., doing business as Loan Store Corp., Inc., Appellants, v. ALERT SAFETY LIGHT PRODUCTS, INC., Appellee, 307 F.3d 717

WOLLMAN, Circuit Judge. Plaintiffs appeal the district court’s order dismissing their suit with prejudice. We reverse and remand for further proceedings. I. In 1993, a fire damaged the Loan Store Corp., a Florissant, Missouri, business owned and operated by plaintiffs Tandy Hairston and Truitt Glasper. On May 9, 2000, plaintiffs brought suit against Alert Safety Light Products, Inc. (Alert), the manufacturers of a power strip that plaintiffs alleged was the cause of the fire.

During the discovery phase of the litigation, Alert subpoenaed Hairston and plaintiffs’ accountant Joseph Joyner, or any other representative of plaintiffs’ accountant McKinley, Jones & Associates (McKinley Jones) for depositions to be taken on June 13, 2001. Neither Hairston nor Joyner appeared for the deposition. On July 18, 2001, Alert moved for an order to show cause why Hairston, Joyner, and McKinley Jones should not be held in contempt for failure to appear for their depositions. On July 31, 2001, plaintiffs filed an untimely request for an extension of time to respond to the motion.

The district court denied the plaintiffs’ motion on August 1, 2001, noting that it had entered the show cause orders that day. Those orders directed Hairston and Joyner, or any other agent, officer or representative of McKinley Jones, to show cause on or before August 10, 2001, why they should not be held in contempt for their failure to attend the June 13 deposition. The order issued to Hairston recited the possible sanctions, including the dismissal with prejudice of the claim, that could be imposed upon a finding of contempt. Hair-ston, Joyner, and McKinley Jones filed no response to the show cause orders.

Hair-ston did finally give a deposition on August 16, 2001, the same day that the court found Hairston, Joyner, and any other representative of McKinley Jones to be in contempt for failing to appear for the June 13 depositions and for failing to respond to the show cause orders. The district court dismissed the entire case with prejudice and ordered plaintiffs to pay Alert’s fees and costs for the show cause proceedings. The court subsequently denied plaintiffs’ motions to set aside and reconsider the dismissal. II. We review the district court’s imposition of the sanction of dismissal for abuse of discretion.

Martin v. Daimler-Chrysler Corp., 251 F.3d 691, 694 (8th Cir.2001). The court should resort to the sanction of dismissal only “when the ‘failure to comply has been due to ... willfulness, bad faith, or any fault of petitioner.’ ” Edgar v. Slaughter, 548 F.2d 770, 772 (8th Cir.1977) (quoting Societe Internationale v. Rogers, 357 U.S. 197, 212, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958)). The court’s “discretion is bounded by the requirement of Rule 37(b)(2) that the sanction be ‘just’ and relate to the claim at issue in the order to provide discovery.” Avionic Co. v.

General Dynamics Corp., 957 F.2d 555, 558 (1992) (citing Shelton v. Am. Motors Corp., 805 F.2d 1323, 1329 (8th Cir.1986)). Plaintiffs contend that these facts are similar to those in Edgar v. Slaughter, and assert that the dismissal sanction was not “just.” See Edgar, 548 F.2d at 772. Our examination of the record reveals that the facts of this case fall somewhere between those in Edgar and those in cases in which the district court clearly did not abuse its discretion. See Everyday Learning Corp. v. Larson, 242 F.3d 815, 817-18 (8th Cir.2001); Avionic Co., 957 F.2d at 558; Denton v. Mr.

Swiss of Mo., Inc., 564 F.2d 236, 240-41 (8th Cir.1977). In those eases, the plaintiffs had numerous opportunities to respond to the courts’ orders and repeatedly failed to do so. Here, although plaintiffs should have responded to the district court’s show cause order, it appears that plaintiffs’ counsel were attempting to try to work out arrangements for Hairston’s deposition and for the resolution of discovery disputes. Thus, plaintiffs’ conduct and lack of responsiveness did not rise to the level of that which occurred in the foregoing three cases.

In Avionic and Everyday Learning, we stated that in cases of willfulness and bad faith “the district court need not investigate the propriety of a less extreme sanction.” Everyday Learning, 242 F.3d at 818; see also Avionic, 957 F.2d at 558. Nowhere in its three rulings concerning the dismissal of this action does the district court state that it found the action of plaintiffs to be willful and in bad faith. Without first making this essential finding, the district court dismissed the action in its entirety with prejudice without any contemplation of a lesser sanction.

Plaintiffs’ willful and bad faith conduct must also be the source of prejudice to the defendant. Denton, 564 F.2d at 241 (finding that defendants were clearly prejudiced by plaintiffs’ noncompliance with discovery orders).

The district court stated in the August 16 dismissal order that Hairston and McKinley Jones failure to appear to be deposed “severely jeopardized the ability of the defendant ... to adequately defend this lawsuit and prepare for the October 9, 2001 trial date.” Although Hairston did fail to appear for his June 13 deposition, he had been deposed by the time the district court issued the dismissal order. Thus, any prejudice to Alert had been ameliorated.

Furthermore, we are concerned that in denying the plaintiffs’ motion to set aside the dismissal order, the district court did not take the opportunity to more fully explain the basis for the dismissal, but instead addressed new “facts” that had come to light after its issuance of the order. Rule 59(

e) motions permit the court after reconsideration to correct manifest errors of law or fact. See Lupo v. R. Rowland & Co., 857 F.2d 482, 485 (8th Cir.1988) (citing White v. N.H. Dep’t of Employment Sec., 455 U.S. 445, 450, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982)). In denying the motion, the court stated that Hairston had no interest in the case because he had assigned his litigation interest to Glasper, that the Loan Store was a defunct corporation, and that Glasper had no interest in the case because the true nature of the action was one of subrogation.

Thus, the district court declared that “[a]s this lawsuit stands now, ... none of the named plaintiffs are the real parties-in-interest.” Although this may or may not be true, we do not believe it was an appropriate ground upon which to deny the motion to set aside, for in effect it constituted a ruling on the sufficiency of the pleadings rather than a finding upon which a judgment of contempt could properly be based.

Although we recognize that the district court has wide discretion in these matters, and while we can certainly understand the district court’s frustration with the manner in which this case has proceeded, we conclude that the district court went beyond the bounds of its discretion in this case. The crux of Edgar is that the district court should use the dismissal sanction sparingly.

Here, however inart-fully the case has been pleaded and however dilatorily prosecuted, we believe that the imposition of lesser sanctions, for example, the assessment of appropriate monetary terms (which we note counsel have offered to pay as a condition of reinstatement of the complaint), the striking of pleadings, limitations on discovery or in the admission of evidence, would constitute both an adequate vindication of the district court’s orders and a deterrent to any future lack of diligence in complying with discovery requests and trial schedules.

Accordingly, the order is reversed, and the case is remanded for further proceedings not inconsistent with the views set forth in this opinion. . In light of the basis upon which we affirm the district court, we deny plaintiffs’ motion to strike Alert’s appendix. . The district court did not explicitly specify under what authority it dismissed the suit. The parties have proposed three possibilities. It is clear to us from the court's order that the dismissal was entered under Rule 37 by way of a sanction for discovery violations. .

Although the court's statement that the "lawsuit from its inception has been fraught with serious pleading defects, bordering on fraudulent” might be read as bearing upon the question of willfulness and bad faith, it lacks the explicitness with which a finding of willfulness and bad faith should be expressed.