Jonas et al v. Waterman et al

Filing 53

ORDER ADOPTING FINDINGS AND RECOMMENDATIONS and granting 10 Motion to Dismiss for Failure to State a Claim and Judge McNeil is DISMISSED from this action. Plaintiff Blacktail Mountain Ranch Co., LLC is DISMISSED. Signed by Judge Dana L. Christensen on 6/12/2013. (APP, ) Copy mailed to Jonas this date.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION

JUN 12 2013
Clerk, U.S District Court
District Of Montana
Missoula

CV 13-16-M -DLC- JCL

EDWIN R. JONAS III, and
BLACKTAIL MOUNTAIN RANCH
CO., L.L.C., a Nevada limited liability
company,

ORDER

Plaintiffs,
vs.
RONALD F. WATERMAN, ESQ.,
GOUGH, SHANAHAN, JOHNSON &
WATERMAN, a professional limited
liability partnership, and
HONORABLE CHARLES B.
McNEIL, a/k/a C.B. McNEIL,
Defendants.

Plaintiffs Edwin R. Jonas and Blacktail Mountain Ranch Co., LLC
("Plaintiffs") filed this suit in January 2013 alleging legal malpractice against their
former attorneys and claims against Hon. Charles B. McNeil under 42 U.S.C. §
1983. United States Magistrate Judge Jeremiah C. Lynch issued Findings and
Recommendations to dismiss Plaintiffs' complaint against Judge McNeil on
March 25, 2013. (Doc. 23). Plaintiffs timely filed objections and are therefore
entitled to de novo review of the specified findings and recommendations to which
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they object. 28 U.S.C. § 636(b)(1). The portions of the findings and
recommendations not specifically objected to will be reviewed for clear error.

McDonnell Douglas Corp. v. Commodore Bus. Mach., Inc., 656 F.2d 1309, 1313
(9th Cir. 1981). For the reasons stated below, this Court adopts Judge Lynch's
findings and recommendations in full. Additionally, this Court grants Defendants'
motion to dismiss Plaintiff Blacktail Mountain Ranch Co., LLC ("BMR") from
these proceedings. The parties are familiar with the factual and procedural
background of this case so it will not be repeated here.
First, Plaintiffs make numerous objections to Judge Lynch's findings and
recommendations that Judge McNeil has absolute immunity from civil liability for
judicial acts taken in his official capacity. However, Plaintiffs' objections fail to
advance any plausible arguments showing that Judge McNeil acted outside his
official capacity or acted without subject matter jurisdiction. As Judge Lynch
pointed out in his findings and recommendations, the Montana Constitution
clearly provides that Montana's district courts have original jurisdiction in all civil
matters. Mont. Canst. art VII, § 4. Additionally, original jurisdiction in all civil
matters is bestowed by statute to Montana's district courts. Mont. Code. Ann. § 35-302(1 )(b)&( c). Plaintiffs fail to advance any credible arguments denying these
constitutional and statutory grants of jurisdiction. Because Judge McNeil was
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acting within his official capacity and with subject matter jurisdiction, he is
immune from civil liability and is dismissed from this litigation.
Next, Plaintiffs object to Judge Lynch entering his March 13, 2013 Order
before Plaintiffs could file their responsive brief and, as a result, argue they were
denied due process of law. Plaintiffs are mistaken. In his Order, Judge Lynch
allowed Plaintiffs to make arrangements for BMR to obtain counsel and gave them
14 days to file a status report advising the Court whether it had done so. (Doc.
17.) In addition to this 14 day period, Plaintiffs requested additional time to retain
counsel for BMR and argued Plaintiff Jonas ("Jonas") is legally able to represent
BMR in this Court. (Docs. 20, 21.) Judge Lynch reviewed these filings, granted
the extension, and gave BMR an additional 45 days to obtain counsel. (Doc. 22.)
As a result, Plaintiffs have received due process of law.
Plaintiffs next object to Judge Lynch's findings and recommendations that
limited liability companies ("LLCs") must be represented by a licensed attorney in
federal court. Plaintiffs argue that Judge Lynch incorrectly assumed prior case
law, which requires corporations to be represented by an attorney, also applies to
LLCs. Plaintiffs argue "this is a case of first impression" and "deserves a fresh
and thorough review by this court [sic]." (Doc. 26.) Plaintiffs are again mistaken.
The Second and Seventh Circuit U.S. Courts of Appeal have considered this very
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issue and have found that LLCs, like corporations, are required to appear in
federal court through licensed counsel. See United States v. Hagerman, 545 F .3d
579 (7th Cir. 2008); Lattanzio v. COMTA, 481 F.3d 137 (2d Cir. 2007).
Additionally, the United States Supreme Court has expressly found that "a
corporation may appear in federal courts only through licensed counsel. As the
courts have recognized, the rationale for that rule applies equally to all artificial
entities." Rowland v. Cal. Men's Colony, 506 U.S. 194, 201-02 (1993)(citations
omitted). Plaintiffs' objections ignore this clear precedent, and instead argue their
case fits into a narrow exception outlined by United States v. Reeves, 431 F .2d
1187 (9th Cir. 1970). However, Plaintiffs fail to acknowledge the Reeves decision
was based upon the individual facts of the case, did not follow federal precedent
and has not been followed by any other federal court. Rowland, 506 U.S. at 202 n.
5. Plaintiffs also cite C.E. Pope Trust v. United States, 8 F.2d 696 (9th Cir. 1987)
to support their argument. However, C.E. Pope Trust, like Reeves, was limited to
the facts of the case and is not applicable in this case. The issue of whether an
LLC is required to be represented in federal court by a qualified attorney has been
settled by the federal judiciary and Plaintiffs' arguments do not persuade the Court
to stray from this clear authority.
Finally, Plaintiffs argue that Plaintiff Jonas is a qualified attorney and is fit
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to represent BMR in these proceedings. This Court does not doubt that Jonas is an
experienced attorney. However, experience alone does not qualify an individual
to represent an LLC in this Court. This Court's Local Rule 83 .8(b) requires "[a]ny
entity other than an individual, including but not limited to a corporation, an
unincorporated association, a partnership, or a union, may appear only by an
attorney." If the attorney representing an LLC is not a member of this District's
Bar, Local Rule 83.1(d) provides for an appearance through this District's pro hac
vice process. Attorneys seeking to appear pro hac vice must follow the procedures
outlined in Local Rule 83.1(d). Jonas has not followed the procedures laid out in
83.1 (d) and, therefore, is not qualified to represent BMR in this proceeding.
Because BMR is not represented by a qualified attorney, Defendants' motion to
dismiss PlaintiffBlacktail Mountain Ranch Co., LLC from this proceeding will be
granted.
There being no clear error in Judge Lynch's remaining findings and
recommendations,
IT IS HEREBY ORDERED:
1. Judge Lynch's Findings and Recommendations (doc. 23) are ADOPTED
in full.
2. Defendant Hon. Charles B. McNeil's Motion to Dismiss (doc. 15.) is

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GRANTED and Judge McNeil is DISMISSED from this action.
3. PlaintiffBlacktail Mountain Ranch Co., LLC is DISMISSED.

.

tf,t

Dated this 1£. day of June 2013 .

Dana L. Christensen, Chief udge
United States District Court

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