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Last Minute Cuts, LLC v. Biddle

United States District Court, W.D. Tennessee, Western Division

October 18, 2019

LAST MINUTE CUTS, LLC and QUANNAH HARRIS, Plaintiffs,
v.
JERRY BIDDLE; JOHN McCLAIN; and ROXANNA GUMUCIO, Defendants.

          REPORT AND RECOMMENDATION

          TU M. PHAM UNITED STATES MAGISTRATE JUDGE.

         Before the court is defendants Jerry Biddle, John McClain, and Roxanna Gumucio's motion to dismiss.[1] (ECF Nos. 29, 30, 31.) For the following reasons, it is recommended that the motion to dismiss be granted in part and denied in part.

         I. PROPOSED FINDINGS OF FACT

         Plaintiffs Last Minute Cuts, a limited liability company organized under Tennessee law, and Quannah Harris filed this lawsuit against Jerry Biddle, John McClain, and Roxanna Gumucio on September 14, 2018. (Complaint, ECF No. 1.) Plaintiffs have amended their complaint twice. (First Am. Compl, ECF No. 10; Second Am. Compl., ECF No. 21.) The following findings of fact are based on the well-pleaded allegations in the second amended complaint and the exhibits attached to the complaint. (Second Am. Compl., ECF No. 21.) Consistent with the pro se pleading standard and Federal Rule of Civil Procedure 12(b)(6), the court has construed the factual averments in the complaint liberally and accepts all well-pleaded allegations as true for purposes of the present motion. It is worth noting the defendants have denied the wrongdoing alleged in the complaint. (ECF No. 26.)

         Quannah Harris is a barber in Memphis. (Id. at 1.) Harris owns and operates a barbershop, Last Minute Cuts, LLC. (Id. at 2.) Barbershops in Tennessee are regulated by the State Board of Cosmetology and Barber Examiners (“the Board”), a part of the Tennessee Department of Commerce and Insurance. (Id. at 11.) Jerry Biddle and John McClain are investigators for the Board. (Id. at 2.) Roxana Gumucio is the Executive Director of the Board. (Id.)

         Plaintiffs allege that, for two decades, Biddle has demanded money and sexual favors from Harris and the owners of other businesses regulated by the Board in exchange for favorable inspection reports. (Id. at 3.) On July 30, 2014, Biddle and McClain wrote and submitted an unfavorable inspection report for Last Minute Cuts based largely on supposedly unsanitary conditions at the facility. (Id. at 11-13.) Biddle and McClain did not provide this inspection report, or an associated notice of violation, to Last Minute Cuts and forged the signature of an employee of the business on both documents. (Id. at 2-3.) Later, Biddle submitted a report that claimed Last Minute Cuts was not open for a follow-up inspection.[2] (Id. at 16.) However, Last Minute Cuts was open for inspection when Biddle claimed it was closed, and in fact was inspected by another investigator for the Board that day. (Id. at 3.) The plaintiffs claim that Biddle and McClain's falsified inspection reports were submitted “as a result of [Harris] not providing money or sexual favors” to Biddle. (Id. at 4.) The plaintiffs further allege that Biddle made sexual and offensive statements to Harris during a 2017 inspection. (Id. at 3.)

         On September 17, 2017, a hearing regarding Last Minute Cuts's licensure was held before an administrative law judge (“ALJ”) employed by the Board. (Id. at 2.) At the hearing, Gumucio submitted the falsified documents created by Biddle and McClain to the ALJ. (Id.) Gumucio knew that the documents were falsified when she submitted them to the ALJ. (Id.) As a result of the hearing, the Board took some form of disciplinary action against Last Minute Cuts, though it is unclear from the complaint exactly what action was taken. (Id. at 4.)

         Plaintiffs allege that the defendants have violated their constitutional rights to procedural and substantive due process. As such, plaintiffs bring suit against each of the defendants in their individual capacities for money damages under 42 U.S.C. § 1983 and seek attorney's fees under 42 U.S.C. § 1988. Although there is a passing reference to state law claims in the jurisdiction section of the complaint, it does not appear that plaintiffs have brought any claims other than ones under § 1983. Defendants have moved to dismiss under Rule 12(b)(6)[3] for failure to state a claim upon which relief can be granted. (ECF No. 30.)

         II. PROPOSED CONCLUSIONS OF LAW

         A. Claims Brought by Harris on Behalf of Last Minute Cuts

         Before the court can address the defendants' motion to dismiss, there is a threshold issue. Harris purports to assert claims on behalf of an LLC in this suit. (Second Am. Compl., ECF No. 21.). Neither party has raised the issue of whether Harris, as a non-lawyer, may appropriately do so.

         Federal Rule of Civil Procedure 17(b)(2) requires federal courts to look to state law to determine a corporate entity's capacity to sue or be sued. Fed.R.Civ.P. 17(b)(2). Under Tennessee law, an LLC, like a corporation, is treated as if it is a separate legal person distinct from its owners and officers. See Tenn. Code Ann. § 48-249-104. This rule applies even if an LLC has only one owner or only one officer. Collier v. Greenbrier Developers, LLC, 358 S.W.3d 195, 200 (Tenn. Ct. App. 2009). The effect of this is that a claim on behalf of an LLC is treated as if it belongs to the LLC, not the LLC's owner. Cf. Keller v. Estate of McRedmond, 495 S.W.3d 852, 866 (Tenn. 2016).

         Appearances in federal court are governed by 28 U.S.C. § 1654. The Sixth Circuit has interpreted § 1654 to generally prohibit pro se litigants from asserting claims for persons other than themselves in federal court. Olagues v. Timken, 908 F.3d 200, 203 (6th Cir. 2018) (“[W]e have consistently interpreted § 1654 as prohibiting pro se litigants from trying to assert the rights of others.”). Because a corporation is a separate legal entity from its shareholders, § 1654 prohibits pro se litigants from asserting claims on behalf of a corporation in federal court. Id. At 202 (“[A] pro se plaintiff cannot represent the interests of a company. . . .”). Since Tennessee law treats an LLC as being a separate legal person from its owner, the same logic bars the owner of an LLC from asserting claims on its behalf in court pro se. The appropriate response for a court presented with claims brought by a pro se litigant on behalf of some other person is generally to dismiss the claims without prejudice. Zanecki v. Health All. Plan of Detroit, 576 Fed.Appx. 594, 595 (6th Cir. 2014).

         Ordinarily, the court is not required to consider arguments that parties have not raised in their briefs. Dorris v. Absher, 179 F.3d 420, 425 (6th Cir. 1999). There are three reasons the court does so here. First, judges are obliged to prevent the unauthorized practice of law. Zanecki, 576 Fed.Appx. at 595. Non-lawyer representation of others raises unauthorized practice of law concerns. Id. Second, the purpose of the rule prohibiting non-lawyers from bringing claims on behalf of others is to protect the interests of those before the court. Olagues, 908 F.3d at 203. Allowing a pro se litigant to bring claims on behalf of an LLC would present fair representation problems. See Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423, 1427 (7th Cir. 1985). An LLC may have multiple owners, each with an interest in the company. See Tenn. Code Ann. § 48-249-303. Representation by one owner may not fairly protect the interests of other owners. Even when an LLC has only one owner, other stakeholders in the LLC, like its creditors or employees, may still need fair representation of their interests. Scandia Down, 772 F.2d at 1427. Third, some courts have considered non-lawyer representation of others to present standing concerns. See First Hartford Corp. Pension Plan & Tr. v. United States, 194 F.3d 1279, 1291 (Fed. Cir. 1999) (“[P]ro se actions by non-attorneys on behalf of corporations fail for lack of standing.”); Managing Members of Edgewood MHP Partners, LLC. v. Non-Managing Members of Edgewood MHP Partners, LLC., No. 18-2256-TLP-dkv, 2018 WL 3966990, at *2 (W.D. Tenn. June 26, 2018), report and recommendation adopted sub nom., 2018 WL 3966278 (W.D. Tenn. Aug. 17, 2018). Standing is ...


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