Clean Smile Inc et al v. Arkansas Economic Development Commission et al
MEMORANDUM OPINION AND ORDER granting defts' Motion to Dismiss 5 14 ; pltfs' complaint is dismissed for lack of jurisdiction. Signed by Judge Susan Webber Wright on 11/10/11. (vjt)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
CLEAN SMILE INC.; ANTON D.
GLASSCO; and JEROME A. JAMES II;
STATE OF ARKANSAS; MIKE BEEBE;
GRANT TENNILLE; and PATRICIA
No. 4:11CV00566 SWW
Memorandum Opinion and Order
Before the Court is a motion to dismiss filed by the defendants to which plaintiffs
responded. For the following reasons, the motion is granted.
According to the allegations of the complaint, Clean Smile, Inc. (“Clean Smile”), is a
minority-owned corporation.1 Plaintiff Anton D. Glassco is the chairman of the board of Clean
Smile, and Jerome A. James II is the president. The corporation participates in a state-sponsored
Minority Business Enterprise (“MBE”) program. Clean Smile was developing new technology in
the form of a fragrance automation system which had been presented to a number of companies,
including General Motors. Am. Comp. at ¶ 10. When Clean Smile applied for annual recertification in the MBE program, defendant Patricia Nunn Brown, Director of the Small and
Minority Business Division of the Arkansas Economic Development Commission, requested
The Court granted plaintiffs’ motion for leave to amend their First Amended Complaint. The
only change from the original complaint was the deletion of the corporation as a plaintiff. See docket
entries 26 & 28.
information about Clean Smile’s contact at General Motors. After Clean Smile failed to provide
the requested information, Brown refused to re-certify the company, which plaintiffs allege
caused their potential product sale to General Motors to be placed on hold and allow other
companies to move in with competing similar technology. Plaintiffs claim Brown’s treatment of
them was based on their race in violation of federal law. In addition to suing Brown in her
official capacity, plaintiffs name the State of Arkansas, as well as Governor Mile Beebe, and
Grant Tennille,2 Interim Director of the Arkansas Economic Development Commission, in their
Plaintiffs assert defendants violated Title VI of the Civil Rights Act of
1964, 42 U.S.C. 2000d, which prohibits racial discrimination in programs receiving federal
funds, and 42 U.S.C. § 2000(b). They also claim pursuant to 42 U.S.C. § 1983 that defendants
violated their rights under federal law. Defendants move for dismissal of the complaint, arguing
plaintiffs lack standing and fail to state a claim for relief. In addition, defendants assert they are
entitled to sovereign immunity.
Without standing, there is no case or controversy under Article III of the Constitution.
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Standing requires: (1) that the plaintiff
have suffered an “injury in fact,” that is, an invasion of a legally protected interest that is (a)
concrete and personal and (b) actual and imminent, rather than hypothetical; (2) a causal
connection between the injury and the complained-of conduct; and (3) a likelihood that the injury
will be redressed by a favorable decision. Id. at 560–61. Because standing is a jurisdictional
Plaintiffs sued Maria Luisa M. Haley, former Executive Director of the Arkansas Economic
Development Commission, in her official capacity. Defendants filed a suggestion of death of Haley and,
pursuant to Fed.R.Civ.P. 25(d), Tennille is automatically substituted as a defendant in his official
capacity. The Court hereby directs the Clerk to substitute Grant Tennille in place of Haley as a party
defendant in his official capacity only.
requirement, the plaintiff has the burden of establishing it. Green Acres Enters., Inc. v. United
States, 418 F.3d 852, 856 (8th Cir. 2005).
“[A] corporate officer cannot maintain a personal action against a third party for harm
caused to the corporation, unless the officer alleges a direct injury not derivative of the
company’s injury.” Alternate Fuels, Inc. v. Cabanas, 538 F.3d 969, 972 (8th Cir. 2008). See also
Jewell v. United States, 548 F.3d 1168, 1173 (8th Cir. 2008). Plaintiffs allege they are “formally
employed” by Clean Smile. They claim
15. PAT BROWN’s refusal to recertify our MBE certification has placed a
potential product sale to General Motors stagnate since we no longer hold the
certification that started our five year sales process with General Motors.
16. As of today, Clean Smile, Inc. has still been denied recertification of its MBE
status with the state of Arkansas and prevents us from doing future business
without the ability to prove MBE status.
17. As of today, other companies have come out with similar combined control
network automation technology due to inferior service and segregated treatment
received from the Arkansas Economic Development Commission and Pat Brown.
First Am. Compl.
The Court finds plaintiffs fail to allege they suffered a direct injury not connected to the
alleged discriminatory action against the corporation. Therefore, the Court lacks subject matter
jurisdiction and has no authority to address the issues raised in plaintiffs’ complaint.
IT IS THEREFORE ORDERED that plaintiffs’ complaint is dismissed for lack of
DATED this 10th day of November, 2011.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE
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