Free Order - District Court of California - California

Case 5:07-cv-05022-PVT

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 In this action, Mr. Richard France filed a Complaint in Small Claims court on behalf of 19 20 case to this Court. Defendant United States Postal Service ("USPS") filed a motion to dismiss 21 based on lack of subject matter jurisdiction. The USPS argues that this court is without 22 jurisdiction because the United States Government has not waived its sovereign immunity for 23 claims of lost mail. On November 15, 2007, USPS filed a supplemental brief seeking dismissal 24 on the basis that Plaintiff Jaguar Associates Group ("JAG") may not appear pro se in this court. 25 Civil Local Rule 3-9(b) provides: "A corporation, unincorporated association, partnership or 26 other such entity may appear only through a member of the bar of this Court." Mr. France filed 27 28 The holding of this court is limited to the facts and the particular circumstances underlying the present motion. ORDER, page 1
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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

JAGUAR ASSOCIATES GROUP,

) ) Plaintiff, ) ) v. ) ) UNITED STATES POSTAL SERVICE, ) ) Defendants. ) __________________________________ )

Case No.: C-07-5022 PVT ORDER CONTINUING HEARING ON MOTION TO DISMISS TO ALLOW PLAINTIFF CORPORATION TO OBTAIN COUNSEL OR FOR MR. FRANCE TO SUBSTANTIATE RIGHT TO PROCEED IN INDIVIDUAL CAPACITY

Plaintiff Jaguar Associates Group ("JAG").1 On September 28, 2007, the USPS removed the

Case 5:07-cv-05022-PVT

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the Opposition to the Motion to dismiss and has told defense counsel, Ms. Melissa K. Brown, that he is not an attorney and does not intend to bring an attorney to the hearing on the motion to dismiss. (Brown Decl. ¶¶ 3, 5). Accordingly, because a corporation may not appear without counsel, if the claim is brought on behalf of JAG, JAG must appear through an attorney in order to prosecute this case. On November 16, 2007, the Court ordered Mr. France to file a declaration clarifying the nature of the claim. The Court required Mr. France to explain whether the claim is brought on his own behalf or on the behalf of the JAG and, if the claim is on behalf of JAG, to state whether JAG will appear through counsel. Mr. France timely filed a declaration. Mr. France first requested that Local Rule 3-9(b) be waived to allow JAG to appear pro se. "It has been the law for the better part of two centuries, for example, that a corporation may appear in the federal courts only through licensed counsel." Rowland v. California Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 202 (1993), citing Osborn v. Bank of U.S., 22 U.S. 738, 745 (1824). Accordingly, the Court cannot waive the requirements of the Local Rule. Mr. France next asks to be allowed to substitute in as Plaintiff, claiming a personal interest because he is a member of JAG and has a direct financial interest in the outcome of this case. In general, a corporation must bring suit itself for harms against the corporation. Mr. France has not presented any authority to allow him to bring a claim that belongs to the Corporation. Federal Rule of Civil Procedure 23.1 allows for shareholders to bring suit on behalf of the corporation only in limited circumstances where the Corporation has unfairly refused to act. In order to proceed on behalf of JAG, Mr. France "must allege with specificity facts with regard to each director" of JAG "from which it may be inferred that the particular director could or could not be expected to fairly evaluate the claims" that Mr. France seeks to prosecute in a derivative action on behalf of JAG. Lopes v. Vieira, 488 F.Supp.2d 1000, 1014 (E.D.Cal. 2007). Finally, Mr. France seeks to continue the Motion to Dismiss until March of 2008 in order // ORDER, page 2

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// // to find an attorney to represent JAG free of charge.2 At this point, Mr. France has not demonstrated that he has standing to represent JAG. Additionally, the case cannot be dismissed against a corporate entity on substantive grounds when the corporate entity has not properly appeared. Accordingly, IT IS HEREBY ORDERED THAT: 1. The Motion to Continue the Hearing is GRANTED and the Motion is continued to March 11, 2008; 2. Not later than February 26, 2008, Mr. France shall file a declaration either stating that JAG has found counsel or demonstrating his standing to sue as an individual on behalf of JAG; and 3. If Mr. France cannot demonstrate that he has standing or that JAG has obtained counsel, this lawsuit will be dismissed for lack of standing.

IT IS SO ORDERED Dated: December 12, 2007 ____________________________ PATRICIA V. TRUMBULL United States Magistrate Judge

Given the asserted lack of subject matter jurisdiction because the United States Government has not waived sovereign immunity for claims for lost mail, the Court is skeptical that JAG will be able to convince an attorney to take this case. ORDER, page 3

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Case 5:07-cv-05022-PVT

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copies mailed on 12/12

to:

Jaguar Associate Group c/o Richard H. France 22860 Old Santa Cruz Highway Los Gatos, CA 95033

/s/ Carolyn Frantz for _______________________________ CORINNE LEW Courtroom Deputy

ORDER, page 4