Black Pearl v. Weid et al, No. 3:2009cv00592 - Document 16 (D. Or. 2009)
Court Description: Findings & Recommendation: Wied's Motion to Dismiss Plaintiff's Complaint 12 should be granted, the United States' Motion to Dismiss for Lack of Jurisdiction 10 should be granted as to the argument that the court lacks pers onal jurisdiction over Black Pearl's claims and otherwise denied as moot with leave to refile as set forth above, and the action should be dismissed without prejudice. In the event Black Pearl does not file a complaint compliant with the legal p rinciples analyzed above within thirty (30) days following the date the court's order issues, a final judgment should be prepared. Objections to the Findings and Recommendation are due by 9/28/2009. Signed on 9/14/09 by Magistrate Judge Paul Papak. (gm)
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Black Pearl v. Weid et al Doc. 16 FILED IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON " BLACK PEARL, Plaintiff, CV 09-592-PK FINDINGS AND RECOMMENDATION v. JOHN M. WEID, JAMES F. BERNATAWICZ, JOHN DOE 1-2, and UNITED STATES OF AMERICA, Defendants. PAPAK, Magistrate Judge: Plaintiff Black Pearl filed this action against John M. Wied, I James F. Bernatawicz, and two Doe defendants in the Clackamas County Circuit Court of the State of Oregon on April 28, 2009, alleging defendants' liability under Oregon law for fraudulent transfer, a claim characterized as "theft against property," and conspiracy to defraud. Bernatawicz removed the action to this court pursuant to 28 U.S.C. § 1442(a)(l) on May 29,2009, on the ground that he is an officer of a United States agency being sued for actions taken under color of his office. On I It appears that Wied's name is misspelled in the case caption. Page 1 - FINDINGS AND RECOMMENDATION Dockets.Justia.com July 7,2009, Bernatawicz filed a notice of substitution under 28 U.S.C. § 2679(d)(2) according to the terms of which the United States purported to substitute itself for Bernatawicz and replace him as the sole federal govemmental defendant in this action. Now before the court are the United States' motion (#10) to dismiss for lack of both subject-matter and personal jurisdiction and Wied's motion (#12) to dismiss for lack of personal jurisdiction. In connection with its motion, the United States argues that Black Pearl lacks subject-matter jurisdiction to bring its claims against the government both because Black Pearl has not complied with the procedural requirements set forth in Federal Civil Procedure Rule 4(i) for effectuating service of process on an officer ofthe United States and because Black Pearl has not met its burden to establish any waiver of sovereign immunity applicable to the claims it raises. In addition, both the United States and Wied argue that Black Pearl's claims must be dismissed for lack of personal jurisdiction because Black Pearl is a corporate entity appearing before the court in the person of a non-attorney representative. Black Pearl has filed no response in opposition to either defendant's motion to dismiss. I have considered the parties' motions and all of the pleadings on file. For the reasons set forth below, Wied's motion (#1:2) should be granted and the United States' motion (#10) should be granted as to the argument that the court lacks personal jurisdiction over Black Pearl's claims and denied as moot as to the argument that the court lacks subject-matter jurisdiction over the claims alleged against the governmental defendant, with leave to refile in the event Black Pearl refiles its complaint with the signature of an attomey representative. Page 2 - FINDINGS AND RECOMMENDATION LEGAL STANDARDS I. Motion to Dismiss for Lack of Personal Jurisdiction "It is the plaintiff's burden to establish the court's personal jurisdiction over a defendant." Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001). To survive a motion for dismissal for lack of personal jurisdiction where, as here, the court does not hold an evidentiary hearing, a plaintiff need only make aprimafacie showing of personal jurisdiction. See, e.g., AT&Tv. Compagnie Bruxelles Lambert, 94 F.3d 586, 589 (9th Cir. 1996), quoting Fields v. Sedgwick Assoc. Risky, Ltd., 796 F.2d 299,301 (9th Cir. 1986). "In detelmining whether [a plaintiff] has met this burden, uncontroverted allegations in [the] complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits[, if any,] must be resolved in [the plaintiff's] favor. ..." Id. II. Motion to Dismiss fOI' Lack of Subject-Matter Jurisdiction The federal cOUlis are courts of limited jurisdiction. See, e.g., Exxon ,"lobi! Corp. v. Allapattah Servs., 545 U.S. 546, 552 (2005), citing Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994). As such, the courts presume that causes of action "lie[] outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." Kokkonen, 511 U.S. at 377; see also, e.g., Vacek v. United Stales Postal Serv., 447 F.3d 1248, 1250 (9th Cir. 2006). A motion under Federal Civil Procedure Rule 12(b)(1) to dismiss for lack of subjectmatter jurisdiction may be either "facial" or "factual." See Safe Air v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004), citing While v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). In a facial attack on subject-matter jurisdiction, the moving pmiy asserts that a plaintiffs allegations are Page 3 - FINDINGS AND RECOMMENDATION insufficient on their face to invoke federal jurisdiction, whereas in a factual attack, the moving party disputes the factual allegations that, if true, would give rise to subject-matter jurisdiction. Where a defendant raises a facial challenge to subject-matter jurisdiction, the factual allegations of the complaint are presumed to be true, and the motion may be granted only if the plaintiff fails to allege an element necessalY for subject matter jurisdiction. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.l (9th Cir. 2003). By contrast, where a defendant raises a factual challenge to federal jurisdiction, "the district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summmy judgment," Safe Air v. lvIeyer, 373 F.3d at 1039, citing Savage, 343 F.3d at 1039 n.2, and "need not presume the truthfulness of the plaintiffs allegations," id., citing White, 227 F.3d at 1242. "Defective allegations of jurisdiction may be amended, upon terms, in trial or appellate courts." 28 U.S.C. § 1653. It is improper to dismiss an action based on a defective allegation of jurisdiction without leave to mnend "unless it is clear, upon de novo review, that the complaint could not be saved by amendment." Snell v. Cleveland, Inc., 316 F.3d 822, 828 n.6 (9th Cir. 2002), citing Lee v. City ofLos Angeles, 250 F.3d 668, 692 (9th Cir. 2001). FACTUAL BACKGROUND I. Plaintiffs Allegations Black Pearl alleges that it is a charitable trust doing business in Oregon. I take judicial notice that the Washington Secretary of State has recorded "Black Pearl" as the name of a nonprofit corporation organized under the laws of the State of Washington, with Jeffrey W. Strong serving as its sole officer. I further take judicial notice that, according to the Washington Secretary of State, Black Pearl was incorporated on April 15, 2009, that Black Pearl lacks any Page 4 - FINDINGS AND RECOMMENDATION registered agent, and that it shares an address with Jeffrey W. Strong. Black Pearl also alleges that, on April 23, 2007 (almost two years prior to its date of incorporation), it acquired real property located at 3680 Fir Grove Lane in Wilsonville, OR (the "property"). It fmiher alleges that on October 10, 2008, with the cooperation and assistance of Bernatawicz, defendant Weid purported to purchase the property at auction from Terrie Oldham, who was not at that time the owner of the property. It fmiher alleges that Bernatawicz and Weid were aware at the time Weid purported to purchase the property that Black Pearl owned the propeliy free of any liens or other encumbrances. Black Pearl's complaint is signed by Jeffrey W. Strong, identified as Black Pearl's "Attomey-in-Fact." The complaint does not include an Oregon or other state's bar identification number for Strong. I take judicial notice that Strong is not listed as a member of either the Oregon State Bar or the Washington State Bar Association. II. Evidence Offered by the United States In connection with its factual challenge to this court's subject matter jurisdiction over the claims against it, the United States offers evidence to establish that Bernatawicz was at all material times an Advisory Group Manager for the Intemal Revenue Service, and that all of his complained-of conduct took place in the course of his official employment duties. ANALYSIS· I. Personal Jurisdiction Both defendants argue that Black Pearl's pleading is fatally defective for having been signed by a pro se individual litigant rather than by an attorney, and therefore ineffective to bring Black Pearl's claims within the couli's personal jurisdiction. 28 U.S.C. § 1654 provides that Page 5 - FINDINGS AND RECOMMENDATION "parties may plead and conduct their own cases personally or by counsel. ... " The comis have uniformly construed Section 1654 to permit only individual litigants to appear in propria persona, and, in consequence, do not pennit corporate entities to appear other than through a licensed attorney representative. See, e.g., United States v. 9.19 Acres ofLand, 416 F.2d 1244, 1245 (6th Cir. 1969) and cases cited therein; see also, e.g., Simon v. Hartford Life and Accident Ins. Co., 546 FJd 661, 664 (9th Cir. 2008); c.E. Pope Equity Trust v. United States, 818 F.2d 696,697 (9th Cir. 1987); i'vfcShane v. United States, 366 F.2d 286,288 (9th Cir. 1966); L.R. 83.9(b) ("Unless otherwise specifically provided by law or Court order, a corporation may appear or act only through an attorney"). Moreover, Federal Civil Procedure Rule II(a) provides, in relevant pati, that "[e]veq pleading... must be signed by at least one attomey of record in the attorney's name - or by a patiy personally if the party is umepresented." Fed. R. Civ. P. I I (a). "The couli must strike an unsigned paper unless the omission is promptly cOlTected after being called to the attorney's or party's attention." Id. Black Pearl's complaint is not signed by an attorney of record, and this defect has unequivocally been brought to Black Pearl's attention by means of the parties' motions. Black Pearl has failed to COlTect the defect and, indeed, has failed to respond in any manner to the parties' motions. In consequence, Black Pearl has not filed a cognizable pleading and has not subjected itself to this court's personal jurisdiction. Black Pearl's complaint should therefore be stricken, with leave to refile either upon court order pursuant to Local Rule 83.9(b) or after obtaining properly licensed legal representation, and the action dismissed without prejudice. II. Subject-Matter Jurisdiction While it is unnecessary, in light of the analysis set forth above, to consider the merits of Page 6 - FINDINGS AND RECOMMENDATION the United States' motion to dismiss for lack of subject-matter jurisdiction, it is worth noting2 that the United States' factual challenge to subject-matter jurisdiction appears to be well taken. The courts lack subject-matter jurisdiction over claims against the United States where the government has not consented to suit on such a claim. See, e.g., Balser v. DOJ, 327 FJd 903, 907 (9th Cir. 2003), citing ,l,;fcCarthy v. US., 850 F.2d 558, 560 (9th Cir. 1988). Consent to suit, or waiver of sovereign immunity, "cannot be implied, ... must be unequivocally expressed [and] is to be strictly construed... in favor of the sovereign." Dunn & Black, P.s. v. United States, 492 FJd 1084, 1088 (9th Cir. 2007) (citations omitted). It is, as noted above, the plaintiffs burden to assert grounds sufficient to rebut the default presumption that subject-matter jurisdiction is unavailable. See Kokkonen, 511 U.S. at 377; Vacek, 447 FJd at 1250. Black Pearl's purported pleading is entirely silent as to the sovereign immunity issue, and as Black Pearl has filed no opposition to the United States' motion to dismiss, it has not otherwise asserted the existence of any applicable waiver. In consequence, Black Pearl's allegations would be insufficient to meet its burden to establish this court's subject-matter jurisdiction over its claims against the government,3 This court would therefore likely lack jurisdiction to consider Black Pearl's claims against the United States (and/or against 2 Federal Civil Procedure Rule 12(h)(3) provides that "[i]fthe court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3). 3 Furthermore, in light of clear and long-standing jurisprudence establishing that the United States has not waived its sovereign immunity in connection with actions against agents of the I.R.S. acting in their official capacity, see, e.g., Gilbert v. Da Grossa, 756 F.2d 1455, 1458 (9th Cir. 1985), and that actions seeking to enjoin tax-collection activity are ba11'ed by the AntiInjunction Act, see, e.g., Elias v. Connett, 908 F.2d 521, 523 (9th Cir. 1990), it appears highly unlikely that the defect in Black Pearl's pleading could be cured by amendment, Page 7 - FINDINGS AND RECOMMENDATION Bematawicz, see, e.g., Sierra Club v. Whitman, 268 F.3d 898, 901 (9th Cir. 2001» even if Black Pearl were represented by an attorney. Moreover, because the court would lack subject-matter jurisdiction over the claims against the governmental defendant(s), and because those claims would constitute the sole ground for asseliing federal jurisdiction over Black Pearl's action, the court would lack discretion to exercise supplemental jurisdiction over the claims against Wied and the Doe defendants. See Skysign Int'l, Inc. v. City and County a/Honolulu, 276 F.3d 1109, 1118 n.7 (9th Cir. 2002) (where a comi lacks subject-matter jurisdiction over federal claims, it lacks discretion to exercise supplemental jurisdiction over state-law claims); Brady v. Brown, 51 F.3d 810, 816 (9th Cir. 1995) (where a federal claim is found to be insufficiently substantial to confer federal jurisdiction, the court is divested of supplemental jurisdiction over remaining state-law claims). CONCLUSION For the reasons set forth above, I recommend that Wied's motion (#1:'>.) be granted, the United States' motion (#10) be granted as to the argument that the court lacks personal jurisdiction over Black Pearl's claims and otherwise denied as moot with leave to refile as set forth above, and the action dismissed without prejudice. In the event Black Pearl does not file a complaint compliant with the legal principles analyzed above within thhiy days following the date the court's order issues, a final judgment should be prepared. SCHEDULING ORDER The Findings and Recommendation will be referred to a district judge. Objections, if any, are due September 28,2009. Ifno objections are filed, then the Findings and Recommendation will go under advisement on that date. Page 8 - FINDINGS AND RECOMMENDATION If objections are filed, then a response is due within 10 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement. !iJ r-j D"'dthl, 14th doy ,r S,pl=bcr, 2 0 ( ) \ 01 \·~~a}z H~norable Paul Papak United States Magistrate Judge Page 9 - FINDINGS AND RECOMMENDATION --
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