WAKLEY et al v. SUSTAINABLE LOCAL FOODS LLC et al

Filing 121

ORDER granting Defendant's 69 Motion to Dismiss for Lack of Jurisdiction; granting 81 Motion to Dismiss for Lack of Jurisdiction; denying 90 Motion to Specially Designate Magistrate Judge to rule on 81 City's Motion to Dismiss (Copies to Plaintiffs via U.S. Mail). Signed by Judge William T. Lawrence on 5/19/2017. (JDC)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
VICTOR WAKLEY, et al.,
Plaintiffs,
vs.
SUSTAINABLE LOCAL FOODS, LLC, et al.,
Defendants.

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) Cause No. 1:16-cv-884-WTL-DKL
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ENTRY REGARDING PENDING MOTIONS
This cause is before the Court on the following motions: Defendant Sustainable Local
Food LLC’s Motion to Dismiss (Dkt. No. 69) and the Plaintiffs’ response thereto; and Defendant
the City of Indianapolis’s Motion to Dismiss (Dkt. No. 81) and the Plaintiffs’ response thereto.
For the reasons set forth below, both the motions are GRANTED. The City’s Motion to
Specially Designate Magistrate Judge to Rule on Motion (Dkt. No. 90) is DENIED inasmuch as
the City failed to obtain the consent of Plaintiff Julie Wakley.
Sustainable Local Food LLC’s Motion to Dismiss
Sustainable Local Foods LLC (“SLF Ohio”) moves to dismiss the complaint against it
pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. When a
defendant challenges the Court’s personal jurisdiction over it, the plaintiff bears the burden of
demonstrating the existence of jurisdiction. Jennings v. AC Hydraulic A/S, 383 F.3d 546, 548
(7th Cir. 2004). Where, as here, a motion to dismiss is resolved without an evidentiary hearing,
the plaintiff’s burden is satisfied if it makes a prima facie case of personal jurisdiction. Purdue
Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). “In evaluating
whether the prima facie standard has been satisfied, the plaintiff is entitled to the resolution in its

favor of all disputes concerning relevant facts presented in the record.” Id. (quotation and
citations omitted).
Where, as here, there is no applicable federal statute providing for nationwide service of
process, a federal district court may exercise personal jurisdiction over a defendant if a court of
the state in which it sits would have such jurisdiction. Fed. R. Civ. P. 4(k)(1)(A). This Court sits
in Indiana, and Indiana Trial Rule 4.4(A) provides for jurisdiction “on any basis not inconsistent
with the Constitution of this state or the United States”; in other words, Indiana permits the
exercise of personal jurisdiction to the full extent permitted by the Federal Due Process Clause.
LinkAmerica Corp. v. Albert, 857 N.E.2d 961, 967 (Ind. 2006).
There are two forms of personal jurisdiction that a court may exercise over a non-resident
defendant: “general” and “specific” jurisdiction. Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408 (1984). The Plaintiffs do not set forth any facts that suggest that general
jurisdiction is applicable here. Specific jurisdiction is applicable when the basis of the suit
“arises out of or is related to” the defendant’s contacts with the forum state. Jennings, 383 F.3d
at 549.
To establish specific jurisdiction under the familiar minimum contacts analysis, a
plaintiff must show that the defendant has purposefully availed itself of the
privilege of conducting activities within the forum state and that the exercise of
personal jurisdiction over that defendant would comport with traditional notions of
fair play and substantial justice.
Id. (citations and internal quotation marks omitted).
In this case, SLF Ohio asserts that it is an Ohio limited liability company owned by
Nicholas Bloom. This is consistent with the Plaintiff’s complaint, which identifies Defendant
Sustainable Local Foods LLC as being “an Ohio corporation,” and with the summons issued for
Defendant Sustainable Local Foods LLC, which is addressed “care of Nicholas Bloom” in

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Waterville, Ohio. See Dkt. No. 3 at 2 (summons); Dkt. No. 89-1 (proof of service submitted by
Plaintiffs). It is also consistent with the information publically available on the Ohio Secretary
of State’s website, which shows that the Sustainable Local Foods in Waterville, Ohio, was
incorporated by Nicholas Bloom in 2012 and that Nicholas Bloom has been the registered agent
for SLF Ohio ever since.
The Plaintiffs clearly intended to, and did, sue SLF Ohio. The problem, according to
SLF Ohio, is that SLF Ohio is not the entity that was involved in the events out of which this
case arises. That appears to have been an Indiana limited liability company also called
Sustainable Local Foods LLC which, according to the information publically available on the
Indiana Secretary of State’s website, was created in 2015 and maintains an address and a
registered agent in Indianapolis, Indiana (“SLF Indiana”).
The Plaintiffs do not directly dispute that the legal entity involved in the events relevant
to this case was SLF Indiana, not SLF Ohio. Rather, they point out that Defendant James Bloom
signed for the certified letter sent to both himself and to SLF Ohio in Waterville, Ohio, and that
James Bloom has been associated with SLF Ohio; for example, he has been referred to as “the
owner of Sustainable Local Foods” in Toledo, Ohio newspaper articles. James Bloom’s
relationship with SLF Ohio is irrelevant, however; what is relevant is what legal entity was
involved in the events that took place in Indiana that are the subject of this lawsuit. The
Plaintiffs allege that James Bloom was involved in those events, but they offer nothing to dispute
SLF Ohio’s evidence that SLF Ohio was not. Accordingly, the Plaintiffs have failed to satisfy
their burden of making a prima facie case that SLF Ohio is subject to the jurisdiction of this
court. The motion to dismiss for lack of personal jurisdiction (Dkt. No. 69) is GRANTED and
Sustainable Local Food LLC (Ohio) is DISMISSED from this lawsuit.

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City of Indianapolis’s Motion to Dismiss
The City of Indianapolis moves to dismiss the Amended Complaint on the ground that
the Plaintiffs lack standing to maintain their claim under 42 U.S.C. § 1983. In that claim, which
is denominated the Tenth Cause of Action, the Plaintiffs allege that the Defendants conspired to
deprive them of their property without due process in violation of the Fourteenth Amendment.
However, as the City points out, according to the Amended Complaint, the property interest in
question—the lease of 101 S. Parker Avenue (hereinafter “the Property”)—belonged to Save Our
Veterans, Inc., not to the Plaintiffs (Victor and Julie Wakley) personally. Thus, considering only
the facts set out in the Amended Complaint, the Plaintiffs are not the real parties in interest with
regard to that claim; while they might have suffered financial injury when Save Our Veterans,
Inc., was evicted from the Property, that injury was derivative of the injury to the corporation,
and the Plaintiffs may not maintain a suit to recover for that derivative injury. See, e.g., Doermer
v. Callen, 847 F.3d 522, 533 (7th Cir. 2017) (“Even if Richard’s claims had merit . . . he could
not step up as litigation champion on behalf of the Corporation to vindicate its interests. He
cannot avoid that bar simply by re-characterizing the Corporation’s claims as his own.”) (citing
Knauf Fiber Glass, GmbH v. Stein, 622 N.E.2d 163, 165 (Ind. 1993) (“[T]he general rule of
corporations [is] that a shareholder may not maintain an action in his or her own name to redress
an injury to the corporation.”); Mid–State Fertilizer Co. v. Exchange Nat’l Bank of Chicago, 877
F.2d 1333, 1335 (7th Cir. 1989) (“Good reasons account for the enduring distinction between
direct and derivative injury. When the injury is derivative, recovery by the indirectly-injured
person is a form of double counting.”)).
In response to the City’s motion to dismiss, the Plaintiffs assert that Victor Wakley
personally leased the Property from The Changed Life commencing March 10, 2016. This is

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curious, in light of the fact that the Plaintiffs attached to their Amended Complaint a lease
between Southeast Neighborhood Development, Inc., and Save Our Veterans, Inc., for the
Property that also covers the same time period. The Seventh Circuit allows a plaintiff to
supplement the facts in his complaint with his brief in opposition to a motion to dismiss, see,
e.g., Defender Sec. Co. v. First Mercury Ins. Co., 803 F.3d 327, 335 (7th Cir. 2015) (“[N]othing
prevents a plaintiff opposing dismissal from elaborating on the complaint or even attaching
materials to an opposition brief illustrating the facts the plaintiff expects to be able to prove.”)
(citations omitted); see also Bible v. United Student Aid Funds, Inc., 799 F.3d 633, 640 n.1 (7th
Cir. 2015) (A party opposing a motion to dismiss “is free to elaborate upon the facts in a brief.”);
but see Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir. 1984)
(“[C]onsideration of a motion to dismiss is limited to the pleadings . . . [and thus] it may have
been questionable for the district court to have relied on the plaintiffs’ briefs to embellish the
conclusory allegations of the complaint.”). However, the Plaintiffs have offered no explanation
regarding the seemingly conflicting leases or how if, as they seem to allege in the Amended
Complaint, Save Our Veterans, Inc., had a valid and enforceable lease for the Property with
Southeast Neighborhood Development, Inc., at the time of the eviction, they believe that Save
Our Veterans, Inc., and Victor also had a valid and enforceable lease for the Property with The
Changed Life at the same time. Nor have they explained what due process they believe Victor
was entitled to from the City that he did not receive or why they believe Julie is a real party in
interest with regard to the constitutional claim. In other words, they have failed to provide the
Court with facts that “‘state a claim to relief that is plausible on its face’” with regard to their
constitutional claim, which they were required to do for their Amended Complaint to survive the
City’s motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic

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Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Accordingly, the City’s motion to dismiss is
GRANTED with regard to the Plaintiffs’ constitutional claim and that claim is dismissed
without prejudice.
What Happens Next?
Magistrate Judge LaRue already has granted the Plaintiffs leave “to replead the claims
against LISC [another Defendant] . . ., if they can do so consistent with their obligations under
Rule 11 of the Federal Rules of Civil Procedure.” Dkt. No. 120 at 10. The deadline for doing so
is June 1, 2017. If the Plaintiffs wish to attempt to pursue their constitutional claims and believe
they have a good faith basis for doing so, they also shall replead those claims by June 1, 2017.
The failure to do so will result in their constitutional claim being dismissed with prejudice. To
be clear, if the Plaintiffs wish to pursue any of their claims against LISC or their constitutional
claim against the any of the Defendants, they shall file a Second Amended Complaint by June 1,
2017. The Second Amended Complaint must contain all of the claims against all of the
Defendants that the Plaintiffs wish to pursue, not just the claims implicated by the various
motions to dismiss. In other words, if the Plaintiffs file a Second Amended Complaint, it will be
as if their Amended Complaint never existed; no claim will be preserved because it was in the
Amended Complaint if it does not appear in the Second Amended Complaint. The Plaintiffs
should focus on stating clearly the facts that support their claims, avoiding unnecessary
repetition,1 legal conclusions without factual support, and allegations of wrongdoing of various

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For example, beginning in ¶ 6, the Amended Complaint repeatedly contains a lengthy
parenthetical injected into the middle of sentences that adds nothing of substance to the
allegation and makes the sentences very difficult to understand.
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Defendants unrelated to the Plaintiffs.2 The Plaintiffs should not name Sustainable Local Foods
LLC (Ohio) as a Defendant in any Second Amended Complaint, as that Defendant has been
dismissed for lack of personal jurisdiction and the Plaintiffs are not entitled to replead their
claims against that Defendant.
SO ORDERED: 5/19/17
_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana

Copy by United States Mail to:
Victor Wakley
P.O. Box 11292
Indianapolis, IN 46201
Julie Wakley
P.O. Box 11292
Indianapolis, IN 46201
Copies to all counsel of record via electronic notification

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For example, it is irrelevant to the Plaintiffs’ claims whether a Defendant “perpetrated a
fraud upon the Internal Revenue Service” or illegally “pirated jobs”; those allegations have no
place in the Plaintiffs’ complaint.
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