United States District Court, D. South Dakota, Western Division
RUDY STANKO, individually, and on behalf of similarly situated cattle ranchers on the Pine Ridge Reservation and b towns, also known as “Butch, ” Plaintiff,
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.
JEFFREY L. VIKEN, CHIEF JUDGE
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)
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). (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).
RULE 12(b)(1) MOTION TO DISMISS
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 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).
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
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 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).
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. 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).
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 toward the corporation, then only the
corporation has standing to assert a claim.”
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.”)).
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] 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.
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 ...