Wallace v. Mathias et al

Filing 29

MEMORANDUM AND ORDER - The "Motion to Dismiss" contained in the "Answer of Defendant William R. Mathias" (filing 25 ) is denied. The plaintiff's "Motion to Dismiss Counter-Claim" (filing 27 ) is granted. Mathias' "Counter-Claim of William Mathias Against Roger Wallace" is dismissed. Ordered by Judge John M. Gerrard. (GJG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
ROGER WALLACE,
Plaintiff,

4:12-CV-3011

vs.
MEMORANDUM AND ORDER
WILLIAM R. MATHIAS and
HERINGTON LIVESTOCK
MARKET, INC.,
Defendants.
This matter is before the Court on the "Motion to Dismiss" contained in
the "Answer of Defendant William R. Mathias" (filing 25) and the plaintiff's
"Motion to Dismiss Counter-Claim" (filing 27). Mathias' motion to dismiss
asserts six grounds for dismissal pursuant to Fed. R. Civ. P. 12(b): (1) lack of
subject-matter jurisdiction, (2) lack of personal jurisdiction, (3) improper
venue, (4) failure to join a party, (5) the amount in controversy fails to meet
the jurisdictional requirement, and (6) failure to state a claim upon which
relief can be granted. The plaintiff's motion to dismiss is directed at the
"counter-claim" alleged in Mathias' pleading. For the following reasons, the
Court denies Mathias' motion to dismiss, and grants the plaintiff's.
There is little explanation for most of the grounds for dismissal that
Mathias asserts. It appears that Mathias' first ground for dismissal, lack of
subject-matter jurisdiction, is directed at the existence of a "practice" within
the meaning of the Packers and Stockyards Act, 7 U.S.C. § 181 et seq. The
Packers and Stockyards Act prohibits every “unjust, unreasonable, or
discriminatory regulation or practice” in respect to the furnishing of
stockyard services. 7 U.S.C. § 208(a). And this Court's jurisdiction is based
upon the jurisdiction of the Secretary of Agriculture to have entertained the
complaint in the first instance. Rowse v. Platte Valley Livestock, Inc., 597 F.
Supp. 1055 (D. Neb. 1984). Mathias' argument is that the circumstances at
issue here were an isolated instance not constituting a "practice" within the
meaning of 7 U.S.C. § 208(a).1

The underlying facts of this case were set forth in detail in the Court's memorandum and
order of May 17, 2012 (filing 19), and will not be repeated here.
1

The Eighth Circuit has stated that an isolated instance does not
constitute a practice. Rice v. Wilcox, 630 F.2d 586 (8th Cir. 1980). But, the
Eighth Circuit has also explained that the Packers and Stockyards Act is
remedial legislation and should be liberally construed to further its life and
fully effectuate its public purpose. Id. Thus, in Rice, the Court concluded that
a "practice" had been established when, after a pattern of honoring drafts had
been established, two drafts were dishonored. Similarly, in Rowse, a practice
was found where the defendant paid part of the proceeds from the sale of
consigned cattle to itself and other creditors of the consignor, instead of to the
consignor or actual owner of the cattle.
The Court finds corresponding evidence of a practice here.2 First, as in
Rice, the basis for this case involved a deviation from a well-established
pattern of conduct between familiar buyers and sellers. And second, this case
does not involve an isolated incident—rather, it involves a course of conduct
in its own right. The plaintiff alleges, and the Department of Agriculture
found, that Mathias solicited two forms of payment for the same sale of
cattle, then negotiated the plaintiff's check despite promising not to, then
sent the plaintiff an incomplete refund. The allegations would support
finding several interrelated instances of malfeasance relating to at least two
different cattle sales. Given the facts, and the Court's duty to liberally
construe the Act, the Court finds the allegations here sufficient to support a
finding of subject-matter jurisdiction to proceed.
The next two grounds for dismissal urged by Mathias are lack of
personal jurisdiction and improper venue. The Court addressed the same
claims at length in its memorandum and order of May 17, 2012 (filing 19).
Mathias has given the Court no reason in this pleading to reconsider its
earlier conclusions, and the Court declines to do so.
Next, Mathias claims the case should be dismissed for failure to join a
party. Rule 12(b)(7) permits dismissal for failure to join a party under Fed. R.
Civ. P. 19, and Rule 19 requires a person to be joined as a party if in that
person's absence, the Court cannot accord complete relief among existing
parties. But Mathias' argument fails for one simple reason: his pleading
completely fails to identify any party that he apparently believes should have
been joined. As a result, there is "no showing that these unnamed individuals
would be either necessary or indispensable." Dominium Austin Partners,
L.L.C. v. Emerson, 248 F.3d 720, 726 n.4 (8th Cir. 2001).

As noted in the Court's memorandum and order of May 17, 2012 (filing 19), in
enforcement actions such as these, “the findings and orders of the Secretary [of Agriculture]
shall be prima facie evidence of the facts therein stated . . . .” 7 U.S.C. § 210(f).
2

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The only apparent candidates are Herington Livestock Market and
Doug Harrington, the broker whose financial malfeasance created this mess.
But Herington Livestock Market has been made a party; it simply hasn't
responded. See Filing 15. And Harrington is not a party because of his
bankruptcy; the plaintiff has satisfied Rule 19 by so pleading. See Rule 19(c).
There is no merit to Mathias' Rule 12(b)(7) argument.
Next, Mathias claims that the amount in dispute fails to meet the
jurisdictional requirement. The Court assumes that Mathias is referring to
the amount in controversy requirement of 28 U.S.C. § 1332. But that
requirement only applies in cases where federal jurisdiction is founded on
diversity of citizenship. This is a federal question case arising under the
Packers and Stockyards Act, and § 1332 does not apply. See, 7 U.S.C. § 210(f);
28 U.S.C. § 1331.
Finally, Mathias asserts that the plaintiff's complaint fails to state a
claim upon which relief can be granted. But he does not explain how. The
plaintiff's petition for enforcement of the Department of Agriculture's order
sets forth his claim, and the order of the Secretary, after which his "suit in
the district court shall proceed in all respects like other civil suits for
damages except that the findings and orders of the Secretary shall be prima
facie evidence of the facts therein stated . . . .” § 210(f). The plaintiff has
stated a claim for relief under the Packers and Stockyards Act.
Therefore, Mathias' Rule 12 motion will be denied. But the Court finds
more merit to the plaintiff's motion to dismiss, directed at Mathias' "counterclaim." Mathias' purported counterclaim does not actually ask for relief.
Instead, it reasserts his objections to venue and jurisdiction, denies liability,
then argues that if the Court was to enter judgment in favor of the plaintiff,
the plaintiff would receive a windfall and be unjustly enriched. So, Mathias
"prays for judgment against Plaintiff for the amount if any that the court
requires Defendant to pay to Plaintiff." Filing 25 at 6.
There are a number of problems with that. But first and foremost, a
pleading that states a claim for relief must contain "a short and plain
statement of the claim showing that the pleader is entitled to relief;" see Fed.
R. Civ. P. 8(a)(2), and "a demand for the relief sought, which may include
relief in the alternative or different types of relief." Rule 8(a)(3). The Eighth
Circuit has said that the sufficiency of a pleading is tested by the Rule 8(a)(2)
statement of the claim for relief and the demand for judgment is not
considered part of the claim for that purpose. Dingxi Longhai Dairy, Ltd. v.
Becwood Tech. Grp. L.L.C., 635 F.3d 1106, 1108 (2011). But a claim for relief
must demand relief from someone, and in this case Mathias' pleading does
not allege any requested relief which would satisfy the minimal requirements

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of Rule 8(a)(3). See Goldsmith v. City of Atmore, 996 F.2d 1155, 1161 (11th
Cir. 1993).
The fact of the matter is that Mathias is alleging a defense to the
plaintiff's claim, not a counterclaim. Mathias cannot avoid the requirements
of Rule 8(a) by asking for the "relief" of the plaintiff being ordered to refund a
judgment in his favor. Therefore, the Court will grant the plaintiff's motion to
dismiss Mathias' "counter-claim."
IT IS ORDERED:
1.

The "Motion to Dismiss" contained in the "Answer of
Defendant William R. Mathias" (filing 25) is denied.

2.

The plaintiff's "Motion to Dismiss Counter-Claim" (filing
27) is granted.

3.

Mathias' "Counter-Claim of William Mathias Against Roger
Wallace" is dismissed.

Dated this 10th day of July, 2012.
BY THE COURT:

John M. Gerrard
United States District Judge

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