At page 228 Determining shareholder standing to sue for corporate injury32 citing cases“even 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.”
- de Borja v. Razon, No. 3:18-cv-01131-YY (D. Or. Dec. 21, 2021).See Rawoof v. Texor Petroleum Co., 521 F.3d 750, 757 (7th Cir. 2008); Massey v. Merrill Lynch & Co., 464 F.3d 642, 645 (7th Cir. 2006); Pagan v. Calderon, 448 F.3d 16, 28-29 (1st Cir. 2006); Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir. 1…
- de Borja v. Razon, No. 3:18-cv-01131-YY (D. Or. Sept. 30, 2020).“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”
- Stanko v. Schofield, No. 5:17-cv-05060 (D.S.D. Mar. 28, 2018).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…
- Airs Fragrance Prods., Inc. v. Clover Gifts, Inc., 395 F. App'x 482 (9th Cir. 2010).unpublishedSee United States v. Stonehill, 83 F.3d 1156, 1160 (9th Cir.1996); Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969).
- 2815 Grand Realty Corp. v. Goose Creek Energy, Inc., 656 F. Supp. 2d 707 (E.D. Ky. 2009).publishedStevens v. Lowder, 643 F.2d 1078, 1080 (5th Cir.1981); Papilsky v. Berndt, 466 F.2d 251, 255 (2d Cir.), cert. denied, 409 U.S. 1077 , 93 S.Ct. 689 , 34 L.Ed.2d 665 (1972); Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 732 (3d Cir.1970), ce…
- Cruz v. City of Los Angeles, 229 F. App'x 431 (9th Cir. 2007).unpublished(�‘[E]ven though a stockholder owns all, or practically all, of the stock in a corporation, such a fact of itself does not authorize him to sue as an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.)
- Diva's, Inc. v. Bangor, City of, 411 F.3d 30 (1st Cir. 2005).publishedSee Potthoff v. Morin, 245 F.3d 710, 717 (8th Cir.2001) (holding that the shareholder standing rule applies to civil rights actions brought pursuant to § 1983); Flynn v. Merrick, 881 F.2d 446 , 450 (7th Cir.1989) (holding that “filing suit…
- McDonald v. Domino's Pizza, Inc., 107 F. App'x 18 (9th Cir. 2004).unpublishedWhile a shareholder cannot maintain a civil rights action for injury suffered only by the corporation, see Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969), we have acknowledged that “[t]he same discriminatory conduct can result in both…
- Wantanabe Realty Corp. v. City of New York, 315 F. Supp. 2d 375 (S.D.N.Y. 2003).publishedPotthoff v. Morin, 245 F.3d 710, 716-17 (8th Cir.2001) (shareholder cannot sue under 42 U.S.C. § 1983 for injury to corporation); Gregory v. Mitchell, 634 F.2d 199, 202 (5th Cir.1981) (same); Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1…
- Smita Sanghvi Tarun Sanghvi v. City of Claremont, & Suzan Smith Paul Heid Algrid Leiga Diann Ring Karen Rosenthal Glenn D. Southard, 328 F.3d 532 (9th Cir. 2003).publishedErlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969).
Show 18 more citing cases
- Roger Potthoff v. William Morin, No. 99-2999 (8th Cir. Apr. 5, 2001).published Accord 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 at 228 (“[E]ven though a stockholder owns all, or practica…
- Roger Potthoff, an Individual v. William Morin, in His Individual Capacity Port Auth. of the City of St. Paul, a Pub. Corp., 245 F.3d 710 (8th Cir. 2001).published Accord 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 at 228 (“[E]ven though a stockholder owns all, or practica…
- Bentley v. Glickman, 234 B.R. 12 (N.D.N.Y. 1999).published(shareholder, who with wife owned all stock in the corporation, did not have standing to maintain § 1981 action)
- Alan F. Gersman v. Grp. Health Ass'n, Inc, 931 F.2d 1565 (D.C. Cir. 1991).published See Gregory v. Mitchell, 634 F.2d 199, 202 (5th Cir.1981); Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969).
- Gersman v. Grp. Health Ass'n, Inc., 725 F. Supp. 573 (D.D.C. 1989).published(president and general manager of corporation who, with his wife, owned all the stock of corporation could not maintain action under 42 U.S.C. § 1983 to redress injury to corporation)
- Soranno's Gasco, Inc. v. Morgan, 874 F.2d 1310 (9th Cir. 1989).published Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969).
- Rosales v. AT & T Info. Sys., Inc., 702 F. Supp. 1489 (D. Colo. 1988).publishedTo support this contention, AT & T cites Gregory v. Mitchell, 634 F.2d 199, 202 (5th Cir.1981); Smith v. Martin, 542 F.2d 688, 690 (6th Cir.1976), cert. denied, 431 U.S. 905 , 97 S.Ct. 1697 , 52 L.Ed.2d 388 (1977); and Erlich v. Glasner, 4…
- Turner v. Officers of the Mid Valley Bank, 712 F. Supp. 1489 (E.D. Wash. 1988).publishedErlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969), citing 13 Fletcher, Cyclopedia of the Law of Private Corporations.
- Gaff v. Fed. Deposit Ins., 814 F.2d 311 (6th Cir. 1987).published Stevens v. Lowder, 643 F.2d 1078, 1080 (5th Cir.1981); Papilsky v. Bemdt, 466 F.2d 251, 255 (2d Cir.), cert. denied, 409 U.S. 1077 , 93 S.Ct. 689 , 34 L.Ed.2d 665 (1972); Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 732 (3d Cir.1970), cer…
- Emi Ltd. v. William Bennett, Kenneth Cory, Mary Ann Graves, & Gerald H. Goldberg, 738 F.2d 994 (9th Cir. 1984).publishedId.; Erlich v. Glasner, 418 F.2d at 228.
- Wilcox Dev. Co. v. First Interstate Bank of Oregon, 590 F. Supp. 445 (D. Or. 1984).publishedHospital, 698 F.2d 1019 -1021 (9th Cir.1983); Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969).
- Shell Petroleum, N v. v. Graves, 570 F. Supp. 58 (N.D. Cal. 1983).published Id.; Erlich v. Glasner, 418 F.2d at 228; Buschmann v. Professional Men’s Associa *63 tion, 405 F.2d 659 (7th Cir.1969).
- Shell Petroleum, N.V. v. Graves, 709 F.2d 593 (9th Cir. 1983).published Id.; Erlich v. Glasner, 418 F.2d at 228.
- 30 Fair empl.prac.cas. 1705, 31 Empl. Prac. Dec. P 33,328 Albert A. Gomez, Individually & on Behalf of All Others Similarly Situated v. Alexian Bros. Hosp. of San Jose Edmond T. Doyle, President, Individually & in His Off. Capacity & Alexian Bros. of Am., 698 F.2d 1019 (9th Cir. 1983).publishedRelying on the general rule that a shareholder cannot maintain an action for injury suffered only by the corporation, see Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969), defendants contend the injury was AES's only, not plaintiff's.
- Gomez v. Alexian Bros. Hosp. of San Jose, 698 F.2d 1019 (9th Cir. 1983).publishedRelying on the general rule that a shareholder cannot maintain an action for injury suffered only by the corporation, see Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969), defendants contend the injury was AES’s only, not plaintiff’s.
- Michael J. Von Brimer, Co-Executors of the Est. of Joseph W. Von Brimer, Deceased v. Whirlpool Corp., 536 F.2d 838 (9th Cir. 1976).publishedThis court has followed the Sutter principle even in instances when we were not strictly bound by California law, e. g., Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir. 1969), where we applied this principle to an individual who owned all t…
- Merco Props., Inc. v. Guggenheimer, 395 F. Supp. 1322 (S.D.N.Y. 1975).publishedThe Erlich decision was bottomed on the rule that “even 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.” *1326 Erlich v. Glasner, supra…
- RK Ventures, Inc. v. City of Seattle, 307 F.3d 1045 (9th Cir. 2002).published See Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969). “[I]njury to the corporation is not cognizable as injury to the shareholders, for purposes of the standing requirements.” Shell Petroleum, N.V. v. Graves, 570 F.Supp. 58, 63 (N.D.Cal…
At page 227 Determining scope of corporate stockholder recovery rights13 citing casesshareholder may not maintain action under Civil Rights Act for damages suffered by corporation
- Jerry Cox v. Mariposa Cnty., No. 1:19-cv-01105 (E.D. Cal. Oct. 26, 2021).Cal. July 21, 2021) (citing, inter 24 alia, Erlich v. Glasner, 418 F.2d 226, 227 (9th Cir. 1969)); see also Woods View II, LLC v. Kitsap 25 County, 484 F. App’x 160, 161 (9th Cir. 2012) (sole member of LLC engaged in real estate 26 develop…
- Lemminger v. Vill. of Johnson Creek, No. 2:15-cv-01541 (E.D. Wis. June 23, 2020).Indeed, “a plaintiff-shareholder cannot maintain a civil rights action [under 42 U.S.C. § 1983 ] for damages suffered by the corporation.” Flynn, 881 F.2d at 450 (citing Erlich v. Glasner, 418 F.2d 226, 227-28 (9th Cir. 1969).
- Pareto v. Fed. Deposit Ins., 139 F.3d 696 (9th Cir. 1998).publishedSee Shenberg v. DeGarmo, 61 Cal.App.2d 326, 330 , 143 P.2d 74, 76 (1943) Anderson v. Derrick, 220 Cal. 770, 773 , 32 P.2d 1078, 1079 (1934); see also Shell Petroleum, 709 F.2d at 595; Von Brimer v. Whirlpool Corp., 536 F.2d 838, 846 (9th C…
- 98 Cal. Daily Op. Serv. 1912, 98 Daily Journal D.A.R. 2691 Stanley Pareto Elbert Bressie Benjamin P. Liu Vilja Annamaria Fritzl John McCullough Edith Fritzl Heidi W. Moore Gottfried Noel Fritzl Wanda Hagan Theodore Hiatt Shih Chi Chow Shirley C. Chow Marilou Atencio Anton Atencio Gregory D. Shields Eleanor M. Shields Estelle Eichenberger Jack Lutzow Moses Noble, Jr. Ernst Meyer Phillip Yee Theodore J. Saenger Gayle I. Saenger Jack Block Tae Ryong Kim Chin Soon Kim Frank J. Schlessinger Raymond Vernazza Marion Gizzi Chester R. Williams Angelo Ferro Linda S. Williams Roger R. Franklin John P. Hurabieli Laverne Pareto John Pareto Muriel P. Burd Chae Woo Lee Hai Ja Lew Antonio Panebianco Cho Young Kugis Gebhardt Kugis Phyllis G. Zerwick John Hartung Arthur Holsten Eleanor Holsten Paul E. Kadden Shirley J. Kadden Thomas Kavanagh Cunningham Arizona, a P'ship v. Fed. Deposit Ins. Corp., as Receiver of Barbary Coast Nat'l Bank, Robert Wheeler Dickerson Kearny Paul Oliver Robert Imhoff, 139 F.3d 696 (9th Cir. 1998).publishedSee Shenberg v. DeGarmo, 61 Cal.App.2d 326, 330 , 143 P.2d 74, 76 (1943) Anderson v. Derrick, 220 Cal. 770, 773 , 32 P.2d 1078, 1079 (1934); see also Shell Petroleum, 709 F.2d at 595; Von Brimer v. Whirlpool Corp., 536 F.2d 838, 846 (9th C…
- Forest Ambulance Serv., Inc. v. Mercy Ambulance of Richmond, Inc., 952 F. Supp. 296 (E.D. Va. 1997).publishedFlynn v. Merrick, 881 F.2d 446, 450 (7th Cir.1989); Gregory v. Mitchell, 634 F.2d 199, 202 (5th Cir.1981); Erlich v. Glasner, 418 F.2d 226, 227-28 (9th Cir.1969).
- Sirinakis v. Colonial Bank, 600 F. Supp. 946 (S.D.N.Y. 1984).published(stockholder may not maintain a civil rights action under 42 U.S.C. § 1983 for damages suffered by the corporation)
- EMI LTD. v. Bennett, 560 F. Supp. 134 (N.D. Cal. 1982).publishedVon Brimer v. Whirlpool Corp., 536 F.2d 838, 846 (9th Cir.1976); Erlich v. Glasner, 418 F.2d 226, 227-28 (9th Cir.1969); Papilsky v. Berndt, 466 F.2d 251, 255 (2d Cir.), cert. denied, 409 U.S. 1077 , 93 S.Ct. 689 , 34 L.Ed.2d 665 (1972); J…
- Sawmill Prods., Inc. v. TOWN OF CICERO, ETC., 477 F. Supp. 636 (N.D. Ill. 1979).publishedSmith v. Martin, 542 F.2d 688, 690 (6th Cir. 1976), cert. denied, 431 U.S. 905 , 97 S.Ct. 1697 , 52 L.Ed.2d 388 (1977); Erlich v. Glasner, 418 F.2d 226, 227 (9th Cir. 1969).
- Marty's Adult World of New Britain, Inc. v. Guida, 453 F. Supp. 810 (D. Conn. 1978).publishedSmith v. Martin, 542 F.2d 688, 690 (6th Cir. 1976), cert. denied, 431 U.S. 905 , 97 S.Ct. 1697 , 52 L.Ed.2d 388 (1977); Erlich v. Glasner, 418 F.2d 226, 227 (9th Cir. 1969); Merco Properties, Inc. v. Guggenheimer, 395 F.Supp. 1322, 1325 (S…
- Diva's, Inc. v. City of Bangor, 176 F. Supp. 2d 30 (D. Me. 2001).published(shareholder may not maintain action under Civil Rights Act for damages suffered by corporation)
Show 2 more citing cases
- Watkins v. Resorts Int'l Hotel & Casino Inc., 591 A.2d 592 (N.J. 1991).published(sole shareholders of corporation may not maintain civil rights action for corporation’s damages)
- Flynn v. Merrick, 881 F.2d 446 (7th Cir. 1989).published See Erlich v. Glasner, 418 F.2d 226, 227-28 (9th Cir.1969).
Other citing cases
- Alcan Aluminium Ltd. v. Franchise Tax Bd. of the State of California, Imperial Chem. Indus. Plc v. Franchise Tax Bd. of the State of California, 860 F.2d 688 (7th Cir. 1989).published
- Alcan Aluminium Ltd. v. Franchise Tax Bd., 860 F.2d 688 (7th Cir. 1988).published
- Moll v. South Cent. Solar Sys., Inc., 419 N.E.2d 154 (Ind. Ct. App. 1981).published
- Kusner v. First Pennsylvania Corp., 395 F. Supp. 276 (E.D. Pa. 1975).published
v.
Juda Glasner, Bezlial Orlanski, Neptali Friedman, Osher Zilberstein Juda Glasner and Osher Zilberstein Doing Business as the United Orthodox Rabbinate of Greater Los Angeles, United Orthodox Rabbinate of Greater Los Angeles, A. M. Bauman and Jacob Adler
David ERLICH, Appellant,
v.
Juda GLASNER, Bezlial Orlanski, Neptali Friedman, Osher Zilberstein; Juda Glasner and Osher Zilberstein doing business as the United Orthodox Rabbinate of Greater Los Angeles, United Orthodox Rabbinate of Greater Los Angeles, A. M. Bauman and Jacob Adler, Appellees.
No. 22480.
United States Court of Appeals Ninth Circuit.
October 28, 1969.
Joseph W. Fairfield (argued), Ethelyn F. Black and Alfred W. Omansky, Beverly Hills, Cal., for appellant.
Frederick C. Quimby Jr., (argued), of Veatch, Carlson, Dorsey & Quimby, Los Angeles, Cal., Thomas C. Lynch, Atty.Gen., Herschel T. Elkins, and A. Wallace Tashima, Deputy Attys. Gen., Henry F. Walker, Los Angeles, Cal., of Counsel, for appellees.
Before DUNIWAY, HUFSTEDLER and KILKENNY, Circuit Judges.
KILKENNY, Circuit Judge:
This is an appeal from a dismissal by summary judgment of appellant's Civil Rights[*] action. The controversy has been before this Court on two previous occasions. Erlich v. Glasner, 352 F.2d 119 (9th Cir.1965) and Erlich v. Glasner, 374 F.2d 681 (9th Cir.1967). We affirm.
Appellant and his wife own all the capital stock of West Coast Poultry Company, a California corporation. During the period in question, appellant was president and general manager of the corporation which was engaged in the business of slaughtering and dispensing kosher poultry. Appellee Glasner is a Civil Service employee, employed by the Department of Health of the State of California as Kosher Food Law representative. He is charged with the enforcement of California Penal Code § 383(b). In his official capacity, he filed two criminal complaints against appellant for alleged violations of the section just mentioned. These prosecutions were unsuccessful. In addition to his official duties as Kosher Food Law representative, the appellee Glasner, and others, are engaged in a private undertaking which oversees, to some extent, the production and distribution of kosher foods. This undertaking is conducted under the name of United Orthodox Rabbinate of Greater Los Angeles. The criminal actions were prosecuted against the appellant in his admitted capacity as president and manager of the corporation.
We are faced with the threshold question of whether appellant can maintain an action under the Civil Rights Act for damages suffered by a corporation, of which he is a stockholder.
It is clear that the claimed damages were suffered by the corporation, rather than by appellant. In the final analysis, appellant charges that appellee Glasner's interference with the business of West Coast Poultry Company "is a direct interference with plaintiff's right to operate his business and earn a livelihood for himself and family . . ." and that appellee Glasner's interference "with the business of West Coast Poultry Company is a direct interference with the right of the plaintiff to peacefully operate his business and earn a livelihood for himself and family * * *", and that as a direct result of "overt acts hereinabove set forth, plaintiff has sustained damage and injuries to his business and right and ability to earn a livelihood for himself and his family, all to plaintiff's damage in the sum of $250,000.00." (Emphasis supplied.) He also claims punitive damages. Nothing in the affidavits filed in opposition to the motion for summary judgment changes the nature of the appellant's demand for damages. For that matter, on the record before us, aside from a possible state action for malicious prosecution, it is difficult to even imagine any claim for damages, other than those suffered by the corporation, if any.
Appellant recognizes the fundamental rule that even 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. 13 Fletcher, Cyclopedia of The Law of Private Corporations 366, § 5910 (1961 rev. vol.) He would, however, avoid the effect of the general rule by claiming that "a cause of action may exist in favor of both corporation and the stockholder", citing Sutter v. General Petroleum Corp., 28 Cal.2d 525, 170 P.2d 898, 167 A.L.R. 271 (1946). His faith in Sutter is misplaced. There, the plaintiff claimed he was damaged individually and directly by reason of the fraud of the defendant which induced plaintiff to organize a corporation to take over an oil and gas lease and abandon his own petroleum development projects. The fraud of defendant rendered valueless the stock in the new corporation. Clearly, the case is not in point. For that matter, Sutter supports the position of appellee Glasner. It restates the uniform rule that generally a stockholder may not maintain an action in his own behalf for a wrong done by a third person to the corporation on the theory that such wrong devalued his capital stock. Such an action, it was there said, would authorize multitudinous litigation and ignore the corporate entity. Sutter also recognized that under proper circumstances a stockholder might bring a derivative action on behalf of the corporation. There is no claim that this is a derivative action. A more recent case supporting the same general rule is Toboni v. Pennington Millinery Co., 172 Cal.App.2d 47, 341 P.2d 845 (1959).
Simply stated, the claimed damages are those of the corporation, not those of the appellant. We find nothing in the Civil Rights Act which would permit appellant to circumvent the rule of law just stated, completely avoid the corporate entity and thus maintain an action in his own name. Appellant cannot maintain this action.
Our conclusions on this point render unnecessary a discussion of the other issues presented.
Affirmed.
Notes:
42 U.S.C. § 1983