Stanko v. Schofield et al
Filing
20
ORDER denying as moot 8 Motion to Dismiss for Failure to State a Claim; granting 8 Motion to Dismiss for Lack of Jurisdiction; granting 13 Motion to Dismiss. Signed by Chief Judge Jeffrey L. Viken on 3/28/18. (SB)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
RUDY STANKO, individually, and on
behalf of similarly situated cattle
ranchers on the Pine Ridge Reservation
and border towns, also known as
“Butch,”
Plaintiff,
CIV. 17-5060-JLV
ORDER
vs.
SOUTH DAKOTA STATE BRAND
BOARD; JAKE SCHOFIELD,
individually and in his official capacity
as a South Dakota State Brand
Inspector; PHILIP LIVESTOCK
AUCTION; THOR ROSETH, individually
and as owner of the Philip Livestock
Auction; DEFENDANTS IX through 4X,
individually, will be named after
discovery,
Defendants.
INTRODUCTION
Plaintiff Rudy Stanko filed a multi-count complaint against the defendants
under the Civil Rights Act, 42 U.S.C. § 1983, and state law. (Docket 1). Mr.
Stanko seeks declaratory and injunctive relief. Id. The defendants filed
motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). (Dockets
8 & 13). For the reasons stated below, defendants’ motions to dismiss pursuant
to Rule 12(b)(1) are granted.
ANALYSIS
Defendants the South Dakota State Brand Board (“Brand Board”) and
Jake Schofield, a full-time brand inspector with the Brand Board, (jointly
“Brand Board Defendants”) seek dismissal from the complaint pursuant to
Fed. R. Civ. P. 12(b)(1).1 (Docket 9 at p. 13). The Brand Board Defendants
challenge the court’s jurisdiction for the state law cause of action for claim
and delivery asserting Mr. Stanko does not meet the diversity jurisdiction
requirements of 28 U.S.C. § 1332(a). (Docket 9 at p. 2). Defendants Philip
Livestock Auction and Thor Roseth (jointly “Philip Livestock Defendants”) join
Mr. Schofield in seeking dismissal on the basis of Fed. R. Civ. P. 12(b)(6).
(Dockets 9 & 13).
I.
RULE 12(b)(1) MOTION TO DISMISS
Rule 12 provides in part that “a party may assert the following defenses by
motion: . . . lack of subject-matter jurisdiction . . . .” Fed. R. Civ. P. 12(b)(1).
“In order to properly dismiss for lack of subject matter jurisdiction under Rule
12(b)(1), the complaint must be successfully challenged on its face or on the
factual truthfulness of its averments.” Titus v. Sullivan, 4 F.3d 590, 593 (8th
Cir. 1993) (internal citation omitted). “In a facial challenge to jurisdiction, all of
the factual allegations concerning jurisdiction are presumed to be true and the
Philip Livestock Auction and Thor Roseth filed a motion to dismiss
pursuant to Rule 12(b)(1), but did not file a supporting legal memorandum.
(Docket 13). The court will incorporate their Rule 12(b)(1) motion in the
analysis of the Brand Board Defendants’ Rule 12(b)(1) motion.
1
2
motion [to dismiss] is successful if the plaintiff fails to allege an element
necessary for subject matter jurisdiction.” Id. (internal citation omitted).
While considering a Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction the court must “accept all factual allegations in the pleadings as true
and view them in the light most favorable to the nonmoving party.” Great Rivers
Habitat Alliance v. Federal Emergency Management Agency, 615 F.3d 985, 988
(8th Cir. 2010). “[T]he tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal conclusions.”
Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
“The burden of proving federal jurisdiction, however, is on the party
seeking to establish it, and this burden may not be shifted to the other party.”
Great Rivers Habitat Alliance, 615 F.3d at 988 (internal quotation marks and
brackets omitted). “The burden of establishing that a cause of action lies within
the limited jurisdiction of the federal courts is on the party asserting jurisdiction
. . . .” Arkansas Blue Cross & Blue Shield v. Little Rock Cardiology Clinic, P.A.,
551 F.3d 812, 816 (8th Cir. 2009).
The Brand Board Defendants move to dismiss the complaint under Rule
12(b)(1) on the basis Mr. Stanko has no standing to bring the lawsuit. (Docket 9
at pp. 10-12). They assert the livestock which are the subject of this litigation
are not owned by Mr. Stanko, but rather by Nebraska Beef Packers, Inc., a
Nebraska corporation. Id. at p. 11. The Brand Board Defendants represent to
the court that “the cattle are branded with a ‘Bar Mill Iron’ brand registered in
3
Nebraska to Nebraska Beef Packers, Inc.” Id. Mr. Stanko acknowledges this
registration, but avoids the ownership of the brand issue by declaring
“defendant’s [sic] memorandum exhibits the name Rudy ‘Butch’ Stanko is on the
registration of the brand Bar Mill Iron.” (Docket 14 at p. 5).
Pursuant to Fed. R. Evid. 201, the court takes judicial notice that the
brand “Bar Mill Iron” is registered in Nebraska to Nebraska Beef Packers, Inc.,
and lists “Rudy ‘Butch’ Stanko” as the president of the corporation.2 See Docket
10-1 ¶ 8. The facts contained in the official Nebraska state website are “not
subject to reasonable dispute because [they] . . . can be accurately and readily
determined from sources whose accuracy cannot reasonably be questioned.”
Fed. R. Evid. 201(b)(2). Mr. Stanko argues he should be allowed to pursue the
claims in the complaint as “Nebraska Beef is solely owned by the Plaintiff and is
the Plaintiff’s property.” (Docket 14 at p. 9 n.1).
“To acquire Article III standing, a plaintiff must have a ‘personal stake in
the outcome of the controversy.’ ” Potthoff v. Morin, 245 F.3d 710, 715 (8th Cir.
2001) (citing Baker v. Carr, 369 U.S. 186, 209 (1962)). “A corporation is an
entity separate and distinct from its stockholders and its separate entity will
generally be recognized.” Id. at p. 716 (citing Bankers Life & Cas. Co. v. Kirtley,
338 F.2d 1006, 1013 (8th Cir. 1964)). “Generally, if a harm has been directed
See Nebraska brand registration #13033.50 at
http://www.nebraska.gov/nbc/brandbook/book.cgi.
2
4
toward the corporation, then only the corporation has standing to assert a
claim.” Id.
The United States Court of Appeals for the Eighth Circuit “adopted this
shareholder standing rule and held that ‘[a]ctions to enforce corporate rights or
redress injuries to the corporation cannot be maintained by a stockholder in his
own name . . . even though the injury to the corporation may incidentally result
in the depreciation or destruction of the value of the stock.’ ” Id. (citing In
Brictson v. Woodrough, 164 F.2d 107, 109 (8th Cir. 1947)). “The shareholder
standing rule applies even if the plaintiff is the sole shareholder of the
corporation.” Id. In Potthoff, the court concluded “the shareholder standing
rule applies to civil rights actions brought pursuant to 42 U.S.C. § 1983 by
shareholders claiming injury to their corporations.” Id. at 717 (referencing
Gregory v. Mitchell, 634 F.2d 199, 202 (5th Cir. 1981) (extending shareholder
standing rule to civil rights actions under § 1983) (citing cases); Erlich v.
Glasner, 418 F.2d 226, 228 (9th Cir. 1969) (“[E]ven though a stockholder owns
all, or practically all, of the stock in a corporation, such a fact of itself does not
authorize him to sue as an individual. . . . We find nothing in the Civil Rights Act
which would permit [the plaintiff-stockholder] to circumvent the rule of law just
stated, completely avoid the corporate entity and thus maintain an action in his
own name.”)).
Mr. Stanko’s argument ignores the clear directive of the case law stated
above. The court finds that “even accepting as true all facts pled by [Mr. Stanko]
5
and granting him the benefit of all reasonable inferences therefrom, the record
does not reflect any cognizable injury to [Mr. Stanko] that is distinct from the
harm suffered by [Nebraska Beef, Inc.].” Id. at 718. The court must dismiss
Mr. Stanko’s claims for lack of standing to sue under Article III. Id. at 717.
Whether Nebraska Beef, Inc., has a viable claim is not resolved by this
order. Mr. Stanko is notified he may not represent the corporation in a legal
capacity because he is not a licensed attorney. “It has been the law for the
better part of two centuries . . . that a corporation may appear in the federal
courts only through licensed counsel.” Rowland v. Cal. Men’s Colony, Unit II
Men’s Advisory Council, 506 U.S. 194, 201-02 (1993). The United States Court
of Appeals for the Eighth Circuit has consistently held that a non-lawyer may not
represent a corporation in federal court. Steele v. City of Bemidji, 257 F.3d 902,
905 (8th Cir. 2001). See also Lattanzio v. COMTA, 481 F.3d 137, 139-40 (2d
Cir. 2007) (“[A] layperson may not represent a separate legal entity such as a
corporation . . . .” (citing Rowland, 506 U.S. at 202) (other internal citations
omitted); United States v. 9.19 Acres of Land, More or Less, in Marquette County,
Michigan, 416 F.2d 1244, 1245 (6th Cir. 1969) (“The United States District Court
was clearly correct in ruling that a corporate president may not represent his
corporation before a federal court. . . .”).
6
ORDER
Based on the above analysis, it is
ORDERED that the defendants’ motions to dismiss (Dockets 8 & 13) are
granted.
IT IS FURTHER ORDERED that the complaint (Docket 1) is dismissed
without prejudice.
Dated March 28, 2018.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
CHIEF JUDGE
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?