Standing to Sue – Subject-matter Jurisdiction

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7^th Circuit Court of Appeals

Case Name: Craftwood II, Inc., et al. v. Generac Power Systems, Inc., et al.

Case No.: 18-2883

Officials: EASTERBROOK, KANNE, and HAMILTON, Circuit Judges.

Focus: Standing to Sue – Subject-matter Jurisdiction

Two corporations, Craftwood II and Craftwood III, operate hardware businesses in California. They contend in this suit under the Telephone Consumer Protection Act, 47 U.S.C. §227, that defendants sent them unsolicited fax advertisements. Defendants moved to dismiss the complaint under Fed. R. Civ. P. 12(b)(1), contending that plaintiffs lack standing to sue. The district judge granted that motion—not so much because he found the lack of an injury as because he thought that defendants had substantially (though not technically) met the requirements of a defense in §227(b)(1)(C). On appeal defendants contend expressly what is only implicit in the district court’s decision: that unless plaintiffs prove injury from a violation of law, the suit must be dismissed for lack of a case or controversy. That proposition contradicts the holding of Bell v. Hood, 327 U.S. 678 (1946), among many other decisions showing that a plaintiff’s failure on the merits does not divest a federal court of jurisdiction.

The district court erred in dismissing the complaint for lack of jurisdiction, and it would not be appropriate to dismiss it under Rule 12(b)(6) or 12(c) either. Perhaps, after discovery (which has yet to occur), the record will show the absence of a material factual dispute. But as things stand plaintiffs have a plausible grievance. The judgment is vacated, and the case is remanded for proceedings consistent with this opinion.

Vacated and remanded

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.