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Mattson v. Cooperative
(District of S.D. (D. S.D) 2025)
Case details
Full caption
Mattson & Dostal v. Rosebud Electric Cooperative et al.
Country
United States
Jurisdiction
Federal
Court
District of South Dakota (D. S.D)
Decided
2025
Disposition
Dismissed
Majority
Roberto A. Lange (C. J.) (unanimous Court)
UNITED
STATES
DISTRICT
COURT
DISTRICT
OF
SOUTH
DAKOTA
CENTRAL
DIVISION
THOMAS
MATTSON,
EDWARD
J.
DOSTAL,
3:25-CV-03008-RAL
Plaintiffs,
vs.
OPINION
AND
ORDER
GRANTING
MOTION
TO
DISMISS
ROSEBUD
ELECTRIC
COOPERATIVE,
GRAND
ELECTRIC
COOPERATIVE,
BASIN
ELECTRIC
POWER
COOPERATIVE,
MOREAU-GRAND
ELECTRIC
COOPERATIVE,
INC.,
Defendants.
Plaintiffs
Thomas
Mattson
(Mattson)
and
Edward
J.
Dostal
(Dostal)
fi
led
a
pro
se
Complaint
in
this
case
against
Rosebud
Electric
Cooperative
(Rosebud),
Grand
Electric
Cooperative
(Grand
Electric),
Basin
Electric
Power
Cooperative
(Basin),
and
Moreau-Grand
Electric
Cooperative,
Inc.
(Moreau-Grand).
Doc.
1.
The
Complaint
invokes
federal
question
jurisdiction
under
28
U.S.C.
§
1331
over
claims
based
on
the
Public
Utilities
Regulatory
Policy
Act
(PURPA),
Racketeer
Influenced
and
Corrupt
Organizations
Act
(RICO),
and
Sherman
Act,
Case
3:25-cv-03008-RAL
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42
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and
"supplemental
jurisdiction"
under
28
U.S.C.
§
1337
for
claims
on
"commerce
regulation."'
Doc.
111}
Defendants
collectively
fi
led
a
motion
to
dismiss.
Doc.
15.
Plaintiffs
oppose
the
motion
and
fi
led
a
response.
Doc.
26.
Defendants
fi
led
a
reply,
which
pointed
out
that
Plaintiffs
relied
on
numerous
fi
ctitious
case
citations
and
quotations
in
their
response.
Doc.
35.
Plaintiffs
then
fi
led
a
notice
of
corrected
citations
as
well
as
a
sur-reply.
Does.
36,37.
For
the
reasons
explained
below,
the
motion
to
dismiss
is
granted.
I.
Factual
Allegations
Plaintiffs
helpfully
attached
many
documents
to
their
Complaint,
providing
context
for
their
various
allegations
and
a
history
of
their
litigation
of
these
matters.
"[Djocuments
necessarily
embraced
by
the
complaint
are
not
matters
outside
of
the
pleadings."
Zean
v.
Fairview
Health
Servs..
858
F.3d
520,
526
(8th
Cir.
2017)
(citation
omitted).
This
Court
makes
no
factual
fi
ndings
in
ruling
on
a
motion
to
dismiss
but
draws
the
factual
allegations
fi
:om
the
Complaint
and
attachments
thereto.
Prelude
LLC
(Prelude),
for
which
Mattson
was
President/CEO,
undertook
efforts
to
develop
twelve
qualifying
facilities
(QFs)
for
generating
electricity
though
wind
farms
to
be
located
in
Tripp
County,
Perkins
County,
and
Gregory
County,
South
Dakota.
Doc.
1
|
24;
Doc.
1-3
at
2-60.
Mattson
was
at
least
a
part
if
not
sole
owner
of
Prelude.
See
Doc.
1-7
at
59-61
'
28
U.S.C.
§
1337
grants
federal
district
courts
"original
jiuisdiction
of
any
civil
action
or
proceeding
arising
under
any
Act
of
Congress
regulating
commerce
or
protecting
trade
and
commerce
against
restraints
and
monopolies,"
with
a
few
exceptions
not
relevant
here.
28
U.S.C.
§
1337.
^
The
Complaint
does
not
invoke
a
specific
kind
of
jurisdiction
for
its
claims
for
"Fraudulent
Concealment"
(Count
5)
or
"Bad
Faith
and
Litigation
Misconduct"
(Count
11),
but
this
Court
will
explore
that
and
related
issues
with
these
claims
in
greater
detail
below.
Case
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required
response
to
Defendants'
Statement
of
Undisputed
Material
Facts
and
were
deemed
to
have
admitted
all
facts
set
forth
in
Defendants'
Statement.
Doc.
1-2
at
106-07.
Following
the
hearing,
on
January
2,2020,
Judge
Bobbi
J.
Rank
of
the
South
Dakota
Sixth
Judicial
Circuit
Court
granted
summary
judgment
and
dismissed
all
of
Prelude
and
Dostal's
claims
with
prejudice.
Id.
at
106-08.'^
"In
2023,
Plaintiffs
requested
FERC
mediation,
which
failed."
Doc.
1
K
21.
On
February
6,
2024,
Prelude,
Mattson,
and
Dostal
filed
a
petition
for
enforcement
with
FERC
against
Basin,
Rosebud,
and
Grand
Electric
under
Section
210(h)(2j(B)
of
PURPA
alleging
"the
Cooperatives
have
violated
PURPA
by
providing
false
avoided
cost
information,
using
all-requirements
contracts
to
circumvent
PURPA
purchase
obligations,
rejecting
Prelude's
power
purchase
agreements,
and
not
responding
to
Prelude's
interconnection
requests."
Doc.
1
^
21;
Prelude
LLC.
Thomas
Mattson
&
Edward
J.
Dostal.
187
FERC
^
61,008
(2024)
(attached
as
Exhibit
A).
On
April
4,2024,
FERC
declined
to
initiate
an
enforcement
action
against
Basin,
Rosebud,
and
Grand
Electric.
Doc.
1
|
21;
Prelude
LLC.
Thomas
Mattson
&
Edward
J.
Dostal,
187
FERC
K
61,008
(2024).
FERC,
on
July
10,
2024,
denied
a
request
to
reconsider
this
decision.
Doc.
1-2
at
5-6.
Following
FERC's
Notice
of
Intent
Not
to
Act,
Prelude,
Mattson,
and
Dostal
filed
a
pro
se
complaint
against
Defendants
in
the
Eastem
District
of
Wisconsin
on
August
6,
2024.
Doc.
^
22;
were
not
dealing
with
the
plaintiffs
in
good
faith.
The
fact
is
that
the
plaintiffs
didn't
request
this
information
prior
to
initiating
the
litigation
.
.
.
Doc.
1-2
at
78-79.
'
Plaintiffs
allege
that
Judge
Rank
dismissed
their
case
for
lack
of
jurisdiction
"without
addressing
the
merits,"
but
that
allegation
is
not
supported
by
the
state
court
order
attached
to
the
Complaint.
See
Doc.
1
f
43;
Doc.
1-2
at
107
(dismissing
PURPA
claims
with
prejudice
"as
Plaintiffs
have
failed
to
adduce
any
evidence
supporting
such
claims,
and
that
monetary
damages
are
not
awardable
on
claims
arising
under
PURPA").
Case
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.
Concealment;
(6)
Fraudulent
Backdating
of
Avoided
Costs
in
Violation
of
PURPA;
(7)
Discriminatory
PPA
Penalties
in
Violation
of
PURPA;
(8)
Conspiracy
in
Violation
of
18
U.S.C.
§
1962(d)
(RICO);
(9)
Discriminatory
Rate
Offers
in
Violation
of
PURPA;
(10)
Conspiracy
to
Restrain
Qualifying
Facilities
(QF)
Trade
in
Violation
of
15
U.S.C.
§§
1-2
(Sherman
Act);
and
(11)
Bad
Faith
and
Litigation
Misconduct.
Id.
50-60.
Plaintiffs
seek
damages,
injunctive
relief,
and
a
declaratory
judgment.
See
id.
at
38-40.
Plaintiffs
allege
that
they
have
suffered
$3.34
billion
in
losses.
Doc.
26
at
(citing
Ex.
MM).
Defendants
filed
Motion
to
Dismiss
under
Federal
Rule
of
Civil
Procedure
12(b)(1)
and
12(b)(6)
and
a
Motion
to
Strike
Portions
of
the
Complaint
under
Rule
12(f).
Docs.
15,
16.
Defendants
argue
that
(1)
this
Court
lacks
subject-matter
jurisdiction
over
Plaintiffs'
PURPA
claims;
(2)
Plaintiff
Dostal
lacks
standing;
(3)
Plaintiffs'
claims
are
barred
by
res
judicata;
(4)
Plaintiffs
fail
to
state
claim
under
PURPA,
RICO,
or
the
Sherman
Act,
and
Plaintiffs
fail
to
state
a
fraudulent
concealment
claim;
(5)
Plaintiffs'
claims
under
and
the
Sherman
Act
are
barred
by
the
applicable
statutes
of
limitations;
(6)
Plaintiffs
seek
remedies
imavailable
under
PURPA;
(7)
Plaintiffs
lack
antitrust
standing;
(8)
Plaintiffs'
bad
faith
claim
fails
as
a
matter
of
law;
(9)
this
Court
should
strike
Mattson's
claims
because
he
is
attempting
to
circumvent
the
rule
must
be
represented
by
counsel;
and
(10)
this
Court
should
strike
portions
of
the
Complaint
containing
legal
argument.
Doc.
16.
Plaintiffs
filed
a
Response
Brief
titled,
"Plaintiffs'
Memorandum
in
Opposition
to
Defendants'
Motion
to
Dismiss
and
Motion
to
Strike,
and
Motion
for
Novo
Review
of
2020
State
Court
Order."
S^
Doc.
26.
Following
Plaintiffs'
Response
Brief,
Defendants
included
in
their
Reply
a
catalog
of
how
"Plaintiffs'
response
brief
contain[ed]
Defendants
have
also
interpreted
Count
4
as
asserting
a
claim
under
18
U.S.C.
§
1962(c).
Doc.
16
at
20.
8
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53
a
a
RICO
LLCs
De
and
decisions
in
state
and
federal
courts,
so
this
Court
can
refer
to
the
prior
decisions
whether
the
challenge
is
facial
or
factual.
Zean.
858
F.3d
at
526.
"[F]ederal
courts
are
courts
of
limited
jurisdiction."
United
States
v.
Affemov.
611
F.3d
970,
975
(8th
Cir.
2010).
This
Court
"has
a
special
obligation
to
consider
whether
it
has
subject
matter
jurisdiction
in
every
case."
Hart
v.
United
States.
630
F.3d
1085,
1089
(8th
Cir.
2011).
"This
obligation
includes
the
concomitant
responsibility
to
consider
sua
sponte
the
Court's
subject
matter
jurisdiction
where
the
Court
believes
that
jurisdiction
be
lacking."
Id.
(cleaned
up
and
citation
omitted).
This
Court
first
turns
to
the
text
and
judicial
interpretation
of
PURPA
to
determine
whether
it
has
jurisdiction
over
Plaintiffs'
PURPA
claims.
Congress
passed
PURPA
in
response
to
a
national
energy
crisis
"to
encourage
cogeneration
and
small
power
production,
and
to
encourage
geothermal
small
power
production
facilities,"
and
provided
for
rulemaking
authority
for
federal
and
state
regulatory
agencies.
16
U.S.C.
824a-
3;
see
also
FERC
v.
Mississippi,
456
U.S.
742,
756-57
(1982)
(reviewing
the
legislative
history
of
PURPA).
PURPA
"contains
essentially
three
requirements:
(1)
§
210
has
the
States
enforce
standards
promulgated
by
FERC;
(2)
Titles
I
and
III
direct
the
States
to
consider
specified
ratemaking
standards;
and
(3)
those
Titles
impose
certain
procedures
on
state
commissions."
Id
at
759.
Under
PURPA,
electric
utilities
are
required
"to
buy
all
the
power
produced
by
alternative
energy
generators
.
Qualifying
Cogeneration
Facilities
('QFs'),"
and
"to
pay
the
same
rate
they
would
have
if
they
had
obtained
that
energy
from
a
source
other
than
the
QFs,"
thereby
guaranteeing
QFs
"their
choice
of
this
'avoided
cost'
rate
as
calculated
either
at
the
time
of
contracting
or
the
time
of
delivery."
Winding
Creek
Solar
LLC
v.
Peterman,
932
F.3d
861,
862
(9th
Cir.
2019)
(citing
18
C.F.R.
§§
292.303(a),
292.304);
see
also
Great
Divide
Wind
Farm
2
LLC
V.
Becenti
Aguilar.
405
F.
Supp.
3d
1071,
1089,
1091
(D.N.M.
2019)
("PURPA
created
a
11
Case
3:25-cv-03008-RAL
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42
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11
of
49
PageID
#:
1056
m
a
y
§
.
.
Nelson,
766
F.3d
380,
388
(5th
Cir.
2014)).
Any
party
wishing
to
bring
an
as-implemented
challenge
must
first
petition
FERC
to
bring
that
challenge,
but
"[sjhould
FERC
decline
that
invitation,"
the
party
bring
the
challenge
in
federal
court.
Allco
Renewable
Energy
Ltd..
875
F.3d
at
72
(citing
16
U.S.C.
824a-3(h)(2)(B)).
In
deciding
an
as-implemented
challenge
before
it,
a
federal
court
issue
such
injunctive
or
other
relief
as
may
be
appropriate."
16
U.S.C.
§
824a-3(h)(2)(B).
Defendants
argue
that
this
Court
lacks
subject-matter
jurisdiction
over
Plaintiffs'
PURPA
claims
(Counts
1,
2,
3,
6,
7,
and
because
Plaintiffs
have
brought
as-applied
challenges,
cognizable
only
in
state
court.
Doc.
16
at
11-13.
In
response.
Plaintiffs
argue
that
the
state
court
"expressly
disclaim[ed]"
having
jurisdiction
over
PURPA
issues
related
to
data
claims
and
that
"FERC's
2024
declination
(187
FERC
61,008)
and
its
2025
order
finding
Basin's
interconnection
procedures
non-compliant
(190
FERC
61,170)
trigger
de
novo
federal
enforcement
imder
16
U.S.C.
§
824a-3(h)(2)(B)."
Doc.
26
at
29-30.
Plaintiffs
thereby
argue
that
these
claims
are
as-
implemented
challenges
within
federal
jurisdiction.
See
id.
at
31-33;
Erickson.
551
U.S.
at
94.
When
differentiating
between
as-applied
and
as-implemented
challenges,
courts
consider
whether
the
requested
relief
focuses
on
a
specific
order
affecting
the
QF
(as-applied
challenge)
rather
than
the
lawfulness
of
a
rule's
general
application
(as-implemented
challenge).
See,
e.g.,
ExelonWindl.L.L.C.,
766
F.3d
at
390;
Great
Divide
Farm
2
LLC,
F.
Supp.
3d
at
1098;
Mass.
Inst.
of
Tech.
v.
Mass.
Dep't
of
Pub.
Utils.,
941
F.
Supp.
233,
238
(D.
Mass.
1996).
For
example,
one
type
of
"as-applied
claim
challenges
'the
calculation
of
a
specific
avoided
cost[
]
rate.'"
CED
Red
Lake
Falls
Cmtv.
Hybrid.
LLC
v.
Minn.
Pub.
Utilities
Comm'n,
No.
19-CV-
1468,2020
WL
780055,
at
*3
(D.
Miim.
Feb.
18,2020)
fquoting
Swecker
v.
Midland
Power
Coop.
807
F.3d
883,
886
(8th
Cir.
201511:
see
also
Greensboro
Lumber
Co.
v.
Georgia
Power
Co.,
643
13
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may
§
"may
9)
Wind
405
F.
Supp.
1345,
1374-75
(N.D.
Ga.
1986)
("Any
subsequent
claim
that
a
nonregulated
utility
has
failed
to
adhere
to
its
implementation
plan
in
its
dealings
with
a
particular
qualifying
facility
must
be
bought
in
state
court,
which
has
exclusive
jurisdiction
'to
enforce
any
requirement'
of
a
nonregulated
utility's
implementation
plan."
(citing
16
U.S.C.
§
824a-3(g)(2)).
FERC
specifically
provided
examples
of
as-applied
challenges
in
its
Policy
Statement,
including
a
QF's
allegation
that
"a
particular
electric
utility,
subject
to
the
State
regulatory
authority's
jurisdiction,
refuses
to
negotiate,"
as
it
"involves
the
application
of
a
State-established
rule
and
would
properly
lie
before
a
State
judicial
forum
of
competent
jurisdiction,"
or
an
allegation
"that
a
contract
offered
to
it
by
the
nonregulated
utility
contains
unreasonable
interconnection
requirements."
Windwav
Techs..
Inc.
V.
Midland
Power
Coop..
COO-3089,
2001
WL
1248741,
at
*7
(N.D.
Mar.
5,
2001)
(citation
omitted).
Generally,
plaintiffs
bring
as-implemented
challenges
when
their
claims
concern
"an
order
that
interprets
a
PURPA
regulation
or
announces
a
bright-line
rule,"
but
when
a
nonregulated
utility
or
state
commission
"does
not
clearly
announce
a
rule
in
the
order,
any
challenge
to
the
order
is
an
as-applied
challenge."
CED
Red
Lake
Falls
Cmtv.
Hvbrid.
2020
WL
780055,
at
*3
(citing
Exelon
Wind
1.
L.L.C..
766
F.3d
at
390-91).
With
this
guidance
in
mind,
this
Court
considers
each
PURPA
count
alleged
by
Plaintiffs.
Count
1
alleges
that
Defendants
have
refused
to
process
and
have
delayed
facilitating
interconnection
requests
for
Plaintiffs'
QFs.
Doc.
1
1
50
(citing
Exhibits
S
and
T
showing
interconnection
requests).
Plaintiffs
allege
that
denying
them
access
to
their
guaranteed
transmission
grid
violates
of
FERC
Order
Nos.
888,
2222,
and
2023.
Plaintiffs
request
that
this
Court
"[ojrder
Rosebud,
Grand,
and
Moreau-Grand
to
produce
all
South
Dakota
PUC-required
interconnection
forms
and
compel
Basin
Electric
to
cease
obstructing
or
delaying
interconnection
of
Plaintiffs'
Qualifying
Facilities
(QFs),
in
accordance
with
18
C.F.R.
§
292.303."
Id
at
38.
This
14
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of
49
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own
No.
Iowa
LLC.
Id
count
plainly
requests
relief
that
focuses
on
a
specific
order
affecting
Plaintiffs'
QFs
rather
than
the
lawfulness
of
a
rule's
general
application.
See
Exelon
Wind
L
L.L.C..
766
F.3d
at
390;
Great
Divide
Wind
Farm
2
LLC.
405
F.
Supp.
3d
at
1098;
Mass.
Inst.
of
Tech..
941
F.
Supp.
at
238.
The
claim
in
Count
1
about
Defendants
not
having
connected
Plaintiffs'
QFs
to
the
transmission
grids
is
an
action
that
specifically
impacts
Plaintiffs
and
not
an
as-implemented
challenge.
CED
Red
Lake
Falls
Cmtv.
Hvbrid.
LLC.
2020
WL
780055,
at
*3
(citing
Exelon
Wind
I.L.L.C.,
766
F.3d
at
390-91).
Previous
courts
and
the
FERC
policy
statement
have
identified
disputes
about
interconnection
as
examples
of
as-applied
challenges
to
be
raised
in
fr
ont
of
a
state
judicial
forum.
See
Windwav
Techs..
Inc.,
2001
WL
1248741,
at
*7.
Therefore,
the
jurisdictional
grant
to
federal
district
courts
as
contained
in
PURPA
does
not
extend
to
Count
1,
and
PURPA
does
not
vest
this
Court
with
jurisdiction
over
the
as-applied
challenge
contained
in
Count
1.
Count
2
alleges
that
Defendants
misrepresented
avoided
cost
data
in
2013
and
later
perjured
themselves
in
state
court
proceedings
by
representing
that
Plaintiffs
had
never
requested
that
information.
Doc.
1
f
51.
Plaintiffs
ask
this
Court
to
"[ejnjoin
Defendants
from
making
further
misrepresentations
regarding
PURPA
obligations,
avoided
cost
rates,
QF
eligibility,
or
project
rights
in
any
regulatory
or
judicial
forum."
Id
at
40.
Plaintiffs
argue
that
Defendants'
2013
quote
was
contradicted
by
their
2016
disclosure
of
a
higher
avoided
cost
price.
Count
2
constitutes
an
as-applied
challenge
given
that
it
concerns
"the
calculation
of
a
specific
avoided
cost[
]
rate."
CEP
Red
Lake
Falls
Cmtv.
Hvbrid.
LLC.
2020
WL
780055,
at
*3
(citation
omitted).
See
also
Greensboro
Lumber
Co..
643
F.
Supp.
at
1374
("Any
subsequent
claim
that
a
nonregulated
utility
has
failed
to
adhere
to
its
own
implementation
plan
in
its
dealings
with
a
particular
qualifying
facility
must
be
bought
in
state
court
"
(citing
16
U.S.C.
§
824a-3(g)(2)).
The
allegations
in
Count
2
parallel
the
FERC
policy
statement's
example
of
an
as-applied
15
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challenge
to
"a
particular
electric
utility,
subject
to
the
State
regulatory
authority's
jurisdiction,
[who]
refuses
to
negotiate,"
as
it
"involves
the
application
of
a
State-established
rule
and
would
properly
lie
before
a
State
judicial
forum
of
competent
jurisdiction."
Windwav
Techs..
Inc..
2001
WL
1248741,
at
*7
(citation
omitted).
Defendants'
alleged
peijury
in
state
court^
is
also
an
action
specifically
taken
against
Plaintiffs,
and
to
the
extent
PURPA
conceivably
provides
relief
for
this
part
of
the
claim,
it
would
fall
within
in
the
as-applied
challenge
category.
Therefore,
the
jurisdictional
grant
to
federal
district
courts
as
contained
in
PURPA
does
not
extend
to
Count
2,
which
contains
an
as-applied
challenge
exclusively
within
state
court
PURPA
jurisdiction.
Count
3
alleges
that
Basin
rejected
Plaintiffs'
signed
and
seeks
enforcement
of
these
contracts,
adjusted
for
inflation,
as
well
as
"damages
for
the
resulting
harm."
Doc.
1
]|
52;
id
at
39.
Like
Counts
1
and
2,
this
claim
seeks
the
enforcement
of
specific
contracts
between
Plaintiffs
and
Defendants
and
thus
is
an
as-applied
challenge
outside
of
federal
PURPA
jurisdiction.
See
Greensboro
Lumber
Co.,
643
F.
Supp.
at
1374-75.
Count
6
alleges
that
Defendants
backdated
avoided
cost
rates
in
violation
of
regulations
governing
utilities'
cost
setting
and
disclosure
obligations.
Doc.
1
^
55.
Plaintiffs
further
allege
Defendants
aimed
to
invalidate
prior
avoided
cost
values
and
prevent
the
execution
of
Plaintiffs'
PPAs
through
this
haudulent
backdating
of
avoided
cost
rates.
Id
Count
6
constitutes
an
as-
applied
challenge
given
that
it
concerns
"the
calculation
of
a
specific
avoided
cost[
]
rate"
and
appears
to
also
seek
the
enforcement
of
specific
contracts
between
Plaintiffs
and
Defendants.
CEP
Red
Lake
Falls
Cmtv.
Hybrid.
LLC.
2020
WL
780055,
at
*3
(citation
omitted);
Greensboro
Lumber
Co..
643
F.
Supp.
at
1374-75:
see
also
Doc.
1
^
55
(requesting
"declaratory
and
injunctive
^
The
alleged
peijury
consists
of
statements
by
Defendants'
coimsel
during
a
motion
hearing,
at
which
Prelude
was
represented
and
Postal
was
participating
pro
se.
Doc.
1
Tf
39;
Doc.
1-2
at
79.
See
note
6.
16
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PPAs
supra
relief).
Therefore,
the
jurisdictional
grant
to
federal
district
courts
as
contained
in
PURPA
does
not
extend
to
Count
6,
an
as-applied
challenge
exclusively
within
state
court
PURPA
jurisdiction.
Count
7
alleges
that
Basin
violated
PURPA
"by
imposing
excessive
and
discriminatory
penalty
provisions
in
its
proposed
power
purchase
agreements
(PPAs)
for
Plaintiffs'
Qualifying
Facilities
(QFs)."
Doc.
1
^
56.
Plaintiffs
reference
a
PPA
publicly
disclosed
in
2023
allegedly
with
a
$167,000
per
megawatt
penalty
provision
and
a
2014
letter
from
Basin
as
illustrations
that
Basin
sought
to
apply
inappropriate
penalties
"broadly
to
QF
developers."
Id
Plaintiffs
allege
this
to
be
"use
[of]
contract
provisions
to
evade
[Basin's]
PURPA
obligations"
designed
to
"deter
independent
QFs—like
Plaintiffs'
wind.projects—from
entering
the
market,"
contrary
to
PURPA.
Id
These
allegations
in
Coimt
7
appear
to
present
an
as-applied
challenge,
in
that
they
allege
Basin
refused
to
negotiate
properly
and
presented
a
contract
containing
unreasonable
requirements.
Windwav
Techs..
Inc..
2001
WL
1248741,
at
*7.
Count
7
seeks
broad
injunctive
relief
fr
om
Basin's
practices,
but
it
is
not
directed
at
"an
order
that
interprets
a
PURPA
regulation
or
announces
a
bright-line
rule."
CED
Red
Lake
Falls
Cmtv.
Hybrid.
LLC.
2020
WL
780055,
at
*3
(citation
omitted).
Rather,
Count
7
essentially
raises
an
issue
with
"a
contract
offered
to
it
by
the
nonregulated
utility
[as]
contain[mg]
unreasonable
interconnection
requirements,"
which
is
an
as-applied
challenge
seeking
redress
for
Plaintiffs'
particular
contract.
Windwav
Techs..
Inc..
2001
WL
1248741,
at
*7.
Count
9
alleges
that
Basin
offered
Plaintiffs
discriminatory
rates
as
compared
to
South
Dakota
Wind
Partners,
which
"prevented
Plaintiffs
fr
om
entering
power
purchase
agreements,
rendering
their
QFs
financially
infeasible."
Doc.
1
^
58.
Plaintiffs
seek
damages
for
lost
opportunities
or
lost
wind
farms,
and
an
order
"requiring
Basin
to
sign
the
2016
ppa
[sic]
at
Basin's
17
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"[A]
federal
court
must
give
to
a
state-court
judgment
the
same
preclusive
effect
as
would
be
given
that
judgment
under
the
law
of
the
State
in
which
the
judgment
was
rendered."
Migra
v.
Warren
City
Sch.
Dist.
Bd.
of
Educ..
465
U.S.
75,
81
(1984).
This
Court
thus
looks
to
South
Dakota
law
to
define
the
preclusive
effect
of
the
prior
final
judgment
against
Plaintiffs
in
Prelude.
L.L.C..
and
Edward
J.
Dostal
v.
Electric
Power
Cooperative.
Rosebud
Electric
Cooperative.
Inc..
Butte
Electric
Cooperative.
Inc..
Grand
Electric
Cooperative.
Inc..
Moreau-Grand
Electric
Cooperative.
Inc..
and
Rushmore
Electric
Power
Cooperative.
Inc..
No.
61-CV-15-000050
(6th
Judicial
Cir.
2020).
See
Hanig
v.
City
of
Winner.
527
F.3d
674,
676
(8th
Cir.
2008)
(stating
that
federal
courts
"must
give
preclusive
effect
to
state-court
judgments
whenever
the
courts
of
the
State
from
which
the
judgments
emerged
would
do
so
.
.
.
.
[T]he
issue
must
decide
turns
on
the
South
Dakota
law
of
issue
and
claim
preclusion."
(internal
citation
omitted)).
While
South
Dakota
law
recognizes
the
difference
between
claim
and
issue
preclusion,
see
Merchs.
State
Bank
v.
Light.
458
N.W.2d
792,
793-94
(S.D.
1990),
it
has
applied
the
same
four
elements
in
both
claim
and
issue
preclusion
cases:
(1)
the
issue
in
the
prior
adjudication
must
be
identical
to
the
present
issue,
(2)
there
must
have
been
a
final
judgment
on
the
merits
in
the
previous
case,
(3)
the
parties
in
the
two
actions
must
be
the
same
or
in
privity,
and
(4)
there
must
have
been
a
full
and
fair
opportunity
to
litigate
the
issues
in
the
prior
adjudication.
Dakota.
Minn.
&
F..
R.R.
Corp.
v.
Acuity.
720
N.W.2d
655,
661
(S.D.
2006).
When
applying
the
elements
of
res
judicata,
"a
court
should
construe
the
doctrine
liberally,
unrestricted
by
technicalities.
However,
because
the
doctrine
bars
any
subsequent
litigation,
it
should
not
be
used
to
defeat
the
ends
of
justice."
People
exrel.
L.S..
721
N.W.2d
83,
(S.D.
2006).
"Res
judicata
applies
only
if
the
second
action
is
brought
on
the
same
'cause
of
action'
as
the
first."
Hicks
v.
O'Meara.
31
F.3d
744,
746
(8th
Cir.
1994)
(citation
omitted).
"A
cause
of
19
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Basin
we
90
also
supra
note
6.
Prelude's
counsel
and
Dostal
participated
in
this
hearing
and
had
the
opportunity
to
raise
with
the
state
court
any
concern
that
Defendants'
counsel
may
be
committing
pequry
or
misleading
Judge
Rank.
See
id.
Neither
Prelude's
counsel
nor
Dostal
did
so.
The
fourth
element
of
res
judicata
is
met
for
the
majority
of
the
PURPA
claims
concerning
events
that
predate
the
state
court's
2020
judgment.
The
doctrine
of
res
judicata
bars
the
relief
Plaintiffs
seek
fr
om
the
Court
for
Counts
1,2,
3,
6,
7,
and
9.
C.
Failure
State
a
PURPA
Claim
and
PURPA
Remedies
Finally,
Defendants
argue
that
Plaintiffs
have
failed
to
plead
a
claim
under
PURPA
and
improperly
seek
damages
under
PURPA
because
PURPA
does
not
have
a
provision
for
monetary
damages.
Doc.
16
at
19
(citing
AIlco
Renewable
Enerev
Ltd.
v.
Mass.
Elec.
Co..
208
F.
Supp.
3d
390,
397
(D.
Mass.
2016)).
Defendants
argue
that
PURPA
does
not
provide
for
a
private
right
of
action.
Doc.
16
at
19
(citing
Allco
Renewable
Energy
Ltd..
875
F.3d
at
66).
In
Allco,
the
First
Circuit
concluded
that
Congress
did
not
intend
to
provide
a
private
right
of
action
in
section
210
of
PURPA
"apart
fr
om
the
enforcement
mechanisms
it
expressly
contemplates."
See
875
F.3d
at
69-70.
PURPA
allows
to
petition
FERC
to
initiate
enforcement
actions
"against
a
State
regulatory
authority
or
nonregulated
electric
utility,"
and
if
FERC
declines
to
initiate
the
requested
enforcement
action,
"the
petitioner
may
bring
an
action
in
the
appropriate
United
States
district
court
to
require
such
State
regulatory
authority
or
nonregulated
electric
utility
to
comply
with
such
requirements."
16U.S.C.
§
824a-3(h)(2)(B).
This
Court
considered
whether
a
portion
of
Count
7
might
be
an
as-implemented
challenge
in
alleging
that
Basin,
a
nonregulated
electric
utility,
has
not
complied
with
the
requirements
of
Even
taking
Plaintiffs'
allegations
as
true
that
this
judgment
was
tainted
by
Defendants'
perjury,
this
Court
is
still
without
jurisdiction
over
Plaintiffs'
as-applied
challenges.
24
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t
o
Q
F
s
PURPA
by
including
excessive
and
discriminatory
penalty
provisions
generally
in
the
proposed
PPAs.
Doc.
1
^
56.
Nonelectric
utility
companies
are
allowed
to
have
penalty
provisions
within
their
contracts.
18
C.F.R.
292.304(e)(2)(ii)(C)
(listing
factors
affecting
rates
for
purchases
such
as
"[t]he
availability
of
capacity
or
energy
from
a
qualifying
facility
during
the
system
daily
and
seasonal
peak
periods,
including:
.
.
.
[t]he
terms
of
any
contract
or
other
legally
enforceable
obligation,
including
the
duration
of
the
obligation,
termination
notice
requirement
and
sanctions
for
non-compliance.");
Indep.
Energy
Producers
Ass'n.
Inc.
v.
Cal.
Pub.
Utils.
36
F.3d
848,
856-57
(9th
Cir.
1994)
(citing
Small
Power
Production
and
Cogeneration
Facilities:
Regulations
Implementing
Section
210
of
PURPA.
45
Fed.
Reg.
12214,
12226
(1980)'^).
To
the
extent
that
Plaintiffs
are
challenging
such
penalty
provisions
in
a
PPA
proposed
to
them
or
negotiated
with
them,
such
a
claim
is
an
as-applied
challenge
exclusively
within
state
court
jurisdiction.
If
Plaintiffs
are
more
generally
challenging
Basin
using
a
provision
in
contracts
with
non-plaintiff
QFs,
such
a
claim
more
arguably
might
be
an
as-implemented
challenge.
Solar
V.
City
of
Farmington.
2
F.4th
1285,
1289-90
(10th
Cir.
2021)
("PURPA
requires
that
utilities
implement
FERC
rules,
and
it
empowers
federal
courts
to
review
whether
the
utilities'
implementation
was
successful
on
its
face.").
But
Plaintiffs
lack
standing
to
raise
such
a
claim
for
non-parties.
See
Allco
Fin.
Ltd.
v.
Klee.
805
F.3d
89,
93-98
(2d
Cir.
2015),
as
amended
(Dec.
1,
2015)
(discussing
standing
with
respective
to
remedies
requested
involving
contracts
between
the
This
passage
of
the
Federal
Register
discussing
utilities'
implementation
of
contractual
guarantees
specifically
contemplated
the
use
of
penalty
provisions.
See
Small
Power
Production
and
Cogeneration
Facilities.
45
Fed.
Reg.
at
12226
("Accordingly,
the
value
of
the
service
from
the
qualifying
facility
to
the
electric
utility
may
be
affected
by
the
degree
to
which
the
qualifying
facility
ensures
by
contract
or
other
legally
enforceable
obligation
that
it
will
continue
to
provide
power.
Included
in
this
determination,
among
other
factors,
are
the
term
of
the
commitment,
the
requirement
for
notice
prior
to
termination
of
the
commitment,
and
any
penalty
provisions
for
breach
of
the
obligation.^''
(emphasis
added)).
25
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§
Common.
A.
of
for
Counts
4
and
8
Defendants
seek
dismissal
of
Plaintiffs'
RICO
claims
as
untimely.
Doc.
16
at
20-21.
While
"QJudicial
economy
supports
dismissing
a
complaint
for
failure
to
satisfy
the
statute
of
limitations,"
Waldner
v.
Am.
Truck
&
Trailer.
277
F.R.D.
401,
408
(D.S.D.
2011),
it
is
"not
ordinarily
a
ground
for
Rule
12(b)(6)
dismissal
unless
the
complaint
itself
establishes
the
defense."
Jessie
v.
Potter.
516
F.3d
709,
713
n.2
(8th
Cir.
2008).
Therefore,
the
plaintiffs
own
allegations
must
clearly
indicate
that
the
claims
are
untimely.
Arthur
R.
Miller
&
A.
Benjamin
Spencer,
Federal
Practice
and
Procedure
§
1357
(4d
ed.),
Westlaw
(September
2025
Update).
"The
court
may
consider
the
pleadings
themselves,
materials
embraced
by
the
pleadings,
exhibits
attached
to
the
pleadings,
and
matters
of
public
record."
Humphrey
v.
Eureka
Gardens
Pub.
Facility
Bd..
891
F.3d
1079,1081
(8th
Cir.
2018)
(cleaned
up
and
citation
omitted).
"Section
1962
of
the
Act
makes
it
unlawful
for
any
person
employed
by
or
associated
with
any
enterprise
engaged
in,
or
the
activities
of
which
affect,
interstate
or
foreign
commerce,
to
conduct
or
participate,
directly
or
indirectly,
in
the
conduct
of
such
enterprise's
affairs
through
a
pattern
of
racketeering
activity."
Gomez
v.
Wells
Farao
Bank.
N.A..
676
F.3d
655,
660
(8th
Cir.
2012)
(cleaned
up
and
citation
omitted).
provides
a
private
cause
of
action
to
"[a]ny
person
injured
in
his
business
or
property
by
reason
of
a
violation
of
section
1962
of
this
chapter,"
and
allows
a
person
to
"sue
therefor
in
any
appropriate
United
States
district
court
and
Q
recover
threefold
the
damages
he
sustains
and
the
cost
of
the
suit,
including
a
reasonable
attorney's
fee."
18
U.S.C.
§
1964(c).
See
also
Dahlaren
v.
First
Nat'l
Bank
of
Holdrege.
533
F.3d
681,
689
(8th
Cir.
2008).
"Civil
RICO
actions
are
governed
by
a
four-year
statute
of
limitations."
Ass'n
of
Commonwealth
Claimants
v.
Movlan,
71
F.3d
1398,
1402
(8th
Cir.
1995);
see
also
Rotella
v.
27
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49
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1072
Statute
Limitations
N.
5B
RICO
RICO
independent
injury
on
account
of
the
defendant's
wrongful
conduct").
"However,
non-
independent
injuries
will
not
cause
a
cause
of
action
to
accrue."
Kraft.
2021
WL
3186153,
at
*3.
"Indeed,
a
predicate
act
does
not
necessarily
create
a
new
injury[.]"
Id
The
"discovery
of
the
injury,
not
discovery
of
the
other
elements
of
a
claim,
is
what
starts
the
clock."
Rotella.
528
U.S.
at
555.
"In
other
words,
when
a
plaintiff
exercising
reasonable
diligence
can
discover
its
injury,
the
limitations
period
begins
to
run
even
if
there
is
'confusion
as
to
what
the
actual
source
of
the
injury
was.'"
In
re
EpiPen
Direct
Purchaser
Litig..
2021
WL
147166,
at
*5
(quoting
Robert
L.
Kroenlein
Tr.
ex
rel.
Alden
v.
Kirchhefer.
F.3d
1268,
1278-79
(10th
Cir.
2014)).
Defendants
argue
that
the
allegations
revolve
aroimd
avoided
cost
rates
fr
om
2009
to
2015,
discriminatory
rates
in
2011
and
2013,
and
false
statements
to
the
state
court
in
2019.
Doc.
16
at
20-21.
Defendants
highlight
specifically
that
Plaintiffs
knew
of
these
injuries
because
they
"filed
a
complaint
against
Defendants
over
the
alleged
rate
violations
in
2015."
Id
at
21.
noted
above,
Plaintiffs
assert
the
claims
are
timely.
Doc.
at
44.
1.
Count
4
For
Count
4,
the
main
injuries
that
Plaintiffs
allege
are.
the
three
highlighted
by
Defendants:
avoided
cost
rates
fr
om
2009
to
2015,
discriminatory
rates
in
2011
and
2013,
and
false
statements
to
the
state
court
in
2019.
Doc.
1
1|53.
Plaintiffs
also
allege
that
since
2020,
when
the
state
court
issued
the
decision,
Defendants
have
"persisted"
in
this
behavior.
Id
They
include
in
Count
4
the
argument
that
"[t]he
2025
violations
trigger
the
separate
accrual
rule
for
new
injuries"
but
do
not
allege
that
recent
violations
are
distinct
fr
om
previous
injuries.
Id
Rather,
"the
facts
constituting
fr
aud
were
discovered
or,
by
reasonable
diligence,
should
have
been
discovered"
by
the
initiation
of
Plaintiffs'
state
court
case
in
2015,
which
concerned
the
avoided
cost
rates,
or
by
the
very
latest,
by
the
alleged
2019
peijury,
during
which
both
Prelude's
counsel
and
Dostal
were
present.
29
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new
new
764
As
26
Hope.
F.3d
at
790.
Even
if
the
limitations
clock
were
to
start
fr
om
the
December
30,
2019
hearing
date
where
Plaintilfs
allege
peijury
occurred,
the
four-year
statute
of
limitations
would
have
run
on
Count
4
on
December
30,2023,
before
Plaintiffs
fi
led
the
present
Complaint
or
even
the
earlier
version
of
this
suit
in
the
Eastern
District
of
Wisconsin.
See
Doc.
1-2
at
(listing
date
of
hearing).
Plaintiffs
have
described
Defendants'
behaviors
as
"persisting"
following
that
alleged
2019
peijury,
making
it
clear
that
any
more
recent
behaviors
are
not
independent
injuries
triggering
a
separate
accrual
rule.
Kraft.
2021
WL
3186153,
at
*3
("Indeed,
new
predicate
act
does
not
necessarily
create
a
mjury[.]").
Equitable
tolling
is
not
appropriate
or
warranted
in
this
case
where
Plaintiffs
knew
or
should
have
known
of
the
underlying
injuries
for
the
past
ten
years
since
the
fi
ling
of
their
state
court
suit
See
Rotella.
528
U.S.
at
560-61
(noting
"where
a
pattern
remains
obscure
in
the
face
of
a
plaintiffs
diligence
in
seeking
to
identify
it,
equitable
tolling
may
be
one
answer
to
the
plaintiffs
difficulty").
Therefore,
as
the
statute
of
limitations
has
run,
Count
4
is
dismissed
with
prejudice.
2.
Count
8
The
claim
in
Count
8
fails
for
the
same
reasons.
The
alleged
predicate
acts
of
advocating
false
avoided
cost
rates,
denying
data
requests,
and
denying
valid
interconnection
applications
were
all
at
least
known
by
Plaintiffs
at
the
time
of
the
fi
ling
of
their
2015
state
court
suit.
Doc.
1157;
Hope,
457
F.3d
at
790.
Plaintiffs
again
rely
on
the
alleged
act
of
perjiuy
in
December
of
2019
as
an
independent
injury,
which,
as
noted
above,
appears
to
relate
directly
to
the
data
disputes
and
therefore
does
not
constitute
an
independent
injury.
Id.
But
like
Count
4,
even
if
the
alleged
perjury
did
count
as
an
independent
injury,
Plaintiffs
would
still
have
only
until
December
30,
2023
to
fi
le
Count
8.
30
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60
a
new
RICO
In
Co\int
10,
Plaintiffs
allege
that
Basin
engaged
in
a
conspiracy
to
restrain
trade
in
the
market
for
qualifying
facilities
through
discriminatory
rates
and
exclusionary
practices
(1)
by
offering
Plaintiffs
2
cents
per
kWh
while
offering
South
Dakota
Wind
Partners
LLC
4.3
cents
per
kWH
in
2011,
and
(2)
by
offering
Plaintiffs
2.16
cents
per
kWh
in
2014.
Iff
In
their
motion
to
dismiss,
Defendants
argue
that
(1)
Plaintiffs'
Sherman
Act
count
is
barred
by
the
applicable
statute
of
limitations;
(2)
Plaintiffs
lack
antitrust
standing;
and
(3)
the
count
fails
to
state
a
claim
under
Section
1
or
Section
2.
Doc.
16
at
20-22,26-28.
Plaintiffs
argue
that
the
Sherman
Act
claims
are
properly
pleaded
and
that
their
claims
are
preserved
by
equitable
tolling.
Doc.
at
43^5,
53.
This
Court
finds
that
the
dismissal
of
Count
10
is
appropriate
on
multiple
grounds.
A.
Statute
of
Limitations
discussed
above,
"[a]
court
may
dismiss
a
claim
under
Rule
12(b)(6)
as
barred
by
the
statute
of
limitations
if
the
complaint
itself
establishes
that
the
claim
is
time-barred."
Illig
v.
Union
Electric
Co.,
652
F.3d
971,
976
(8th
Cir.
2011)
(citation
omitted).
Claims
"under
the
Sherman
Act
must
be
filed
within
four
years
after
the
cause
of
action
accrued,"
and
"[gjenerally,
the
period
commences
on
the
date
the
cause
of
action
accrues,
that
being,
the
date
on
which
the
wrongdoer
commits
an
act
that
injures
the
business
of
another."
In
re
Pre-Filled
Propane
Tank
Antitrust
Litig.,
860
F.3d
1059,
1063
(8th
Cir.
2017)
(cleaned
up
and
citations
omitted);
see
also
Little
Rock
Cardiology
Clinic
PA
v.
Baptist
Health,
591
F.3d
591,
595,
602
(8th
Cir.
2009)
(affirming
where
district
court
dismissed
claims
alleging
violations
of
Section
2
with
prejudice
for
failing
to
allege
an
overt
act
within
the
four-year
limitations
period).
Here,
Plaintiffs
have
specifically
identified
the
dates
of
two
alleged
injures
in
Count
10:
Basin's
2011
offer
of
2
cents
per
kWh
and
Basin's
2014
offer
of
2.16
cents
per
kWh.
Doc.
1159.
Both
causes
of
actions
accruing
in
2011
and
2014
respectively
are
now
barred
by
the
applicable
statute
of
limitations
for
claims
asserted
under
38
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As
V.
Fraudulent
Concealment
and
Bad
Faith
Plaintiffs
have
alleged
two
other
claims
for
fr
audulent
concealment
and
bad
faith
and
litigation
misconduct,
Count
and
Count
11
respectively.
See
Doc.
1
54,
60-61.
This
Court
will
address
each
count
in
turn.
Defendants
argue
that
Count
5
should
be
dismissed
as
it
is
not
a
standalone
cause
of
action,
and
"[t]o
the
extent
Plaintiffs
intended
to
assert
a
fr
audulent
misrepresentation
claim
under
South
Dakota
law,"
Plaintiffs
have
failed
to
state
a
claim.
Doc.
16
at
24.
Count
5
alleges
that
Defendants'
fr
audulent
concealment
of
avoided
cost
data
fr
om
2008
to
2015
and
pequry
in
2019
necessitate
tolling
the
statute
of
limitations
"through
at
least
2025."
Doc.
11
54.
Construing
the
Complaint
liberally,
Count
5
is
requesting
that
the
statute
of
limitations
for
claims
alleged
in
the
Complaint
be
tolled
under
doctrine
of
fr
doctrine
of
"fraudulent
concealment"
has
been
referred
to
by
courts
as
"'equitably
toll[ing]'
the
running
of
a
limitations
period"
and
by
others
as
"a
form
of
'equitable
estoppel.'"
Klehr
v.
A.O.
Smith
Corp..
521
U.S.
179,
194
(1997)
Cciting
Grimmett
v.
Brown.
75
F.3d
506,514
(9th
Cir.
1996);
Wolinv.
Smith
Bamev
Inc..
83
F.3d
847,
(7th
Cir.
1996)).
"To
invoke
fr
audulent
concealment,
Plaintiffs
must
allege
facts
showing:
(1)
Defendants'
concealment
of
Plaintiffs'
cause
of
action,
(2)
failure
by
Plaintiffs
to
discover
the
existence
of
their
cause
of
action,
and
(3)
due
diligence
by
Plaintiffs
in
attempting
to
discover
the
claim."
In
re
Pork
Antitrust
Litig..
495
F.
Supp.
3d
753,772
(D.
Minn.
2020)
(cleaned
up
and
citation
omitted).
Any
invocation
of
the
doctrine
of
fr
audulent
concealment
must
also
meet
Rule
9(b)'s
heightened
pleading
standard.
Id.
For
both
antitrust
and
civil
claims,
"a
plaintiff
who
is
not
reasonably
diligent
may
not
assert
'fraudulent
concealment.'"
Klehr.
521
U.S.
at
194-96
(concluding
that
fr
audulent
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the
audulent
concealment.
The
some
852
RICO
actions
in
previous
litigation
and
specifically
references
Federal
Rule
of
Civil
Procedure
11,
this
Court's
inherent
power,
and
28
U.S.C.
§
1927.
See
Chambers.
501
U.S.
at
42-43;
Fed.
R.
Civ.
P.
11(c);
U.S.C.
§
1927.
All
three
sources
of
authority
to
sanction
a
party
are
limited
in
some
capacity.
A
party
seeking
Rule
11
sanctions
must
file
a
request
for
sanctions
"in
the
action
and
in
the
court
where
the
sanctionable
pleading
was
filed."
OarFin
Distrib..
Inc.
v.
Nora.
No.
ll-CV-863,
2012
WL
13028132,
at
*2
(D.
Minn.
My
16,
2012).
A
Rule
11
motion
for
sanctions
"must
be
made
separately
fr
om
any
other
motion,"
and
therefore
is
not
appropriate
to
include
within
a
complaint.
See
Fed.
R.
Civ.
P.
11(c)(2).
"Similarly,
numerous
courts
have
held
that
a
party's
litigation
before
another
court
cannot
form
the
basis
for
an
award
of
sanctions
under
28
§
1927."
OarFin
Distrib..
Inc..
2012
WL
13028132,
at
*2.
And
fi
nally,
"[b]ecause
of
their
veiy
potency,
inherent
powers
must
be
exercised
with
restraint
and
discretion."
Chambers.
501
U.S.
at
44.
Plaintiffs
have
only
pleaded
allegations
of
litigation
misconduct
undertaken
by
Defendants
in
other
cases
within
Count
11,
this
Court
dismisses
this
cause
of
action.
VI.
Plaintiff
Dostal's
Standing
to
Defendants
argue
that
Plaintiff
Dostal's
claims
should
be
dismissed
for
lack
of
standing.
Doc.
16
at
11-13.
"Article
III
of
the
Constitution
limits
the
jurisdiction
of
federal
courts
to
'Cases'
and
'Controversies.'"
Murthv
v.
Missouri.
603
U.S.
43,
56
(2024).
Courts
implement
this
limit
through
different
justiciability
doctrines,
including
standing
and
ripeness.
DaimlerChrvsler
Corp.
V.
Cuno.
547
U.S.
332,
352-53
(2006).
Broadly
speaking,
the
standing
inquiry
concerns
whether
the
plaintiff
is
the
appropriate
party
to
bring
a
particular
suit.
Raines
v.
Bvrd.
521
U.S.
811,818
(1997);
Flast
v.
Cohen.
392
U.S.
83,99-100
(1968).
The
three
requirements
for
standing
are
(1)
an
injury
in
fact,
(2)
that
the
injury
likely
was
caused
by
the
defendant,
and
(3)
a
likelihood
that
a
44
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conduct
U.S.C.
As
Sue
VII.
Litigation
on
Behalf
of
LLC
Within
their
motion
to
dismiss,
Defendants
move
to
strike
the
pleadings
under
Federal
Rule
of
Civil
Procedure
12(f).
Doc.
16
at
29.
Defendants
argue
for
striking
Mattson's
claims
because
Mattson
purportedly
assigned
himself
these
claims
fr
om
his
company,
Prelude,
to
circumvent
the
rule
that
LLCs
must
be
represented
by
counsel.
at
30.
Mattson
has
responded
that
a
motion
to
strike
is
a
drastic
remedy
not
warranted
here
and
that
Prelude's
assignment
of
claims
to
Mattson
is
valid.
Doc.
at
46-48.
Prelude's
assignment
of
these
claims
is
alleged
in
the
Complaint
and
attached
as
an
exhibit.
Doc.
1
^
24;
Doc.
1-7
at
59-61
(attaching
assignment
of
claims
dated
September
12,
2024);
Doc.
at
47.
In
the
previous
federal
action
fi
led
in
the
Eastern
District
of
Wisconsin,
the
court
dismissed
Prelude
as
a
party
after
it
failed
to
obtain
counsel,
which
appears
to
have
motivated
Mattson
to
have
Prelude
assign
its
claims
to
himself
for
$1.
S^Doc.
1-2
at
49-50.
Although
the
court
in
the
Eastern
District
of
Wisconsin
noted
this
assignment
in
its
opinion
and
order
dismissing
the
case,
it
did
not
address
whether
this
assignment
was
proper
as
the
case
was
ultimately
dismissed
for
lack
of
personal
jurisdiction.
See
id.
at
48-58.
In
federal
court,
corporations
and
LLCs
must
be
represented
by
counsel
and
not
proceed
pro
se.
Rowland
v.
Cal.
Men's
Colonv.
Unit
II
Men's
Advisorv
Council.
U.S.
194,
201-02
(1993);
Ackra
Direct
Mktg.
Corp.
v.
Fingerhut
Corp.,
86
F.3d
852,
857
(8th
Cir.
1996);
Supreme
Pro
Clean
LLC
v.
Lowrv,
CIV.
16-5117,
2017
WL
3209450,
at
*2
(D.S.D.
Feb.
14,
2017)
("The
rule
requiring
corporations
to
be
represented
by
an
attorney
applies
to
limited
liability
companies.
.
.
."
(citation
omitted)).
"While
28
U.S.C.
§
1654
protects
parties
rights
to
plead
and
conduct
their
cases,
that
right
has
never
been
interpreted
to
allow
an
individual
to
appear
for
a
corporation
pro
se."
Carr
Enters..
Inc.
v.
United
States.
698
F.2d
952,
953
(8th
Cir.
1983).
A
46
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Pro
Se
Id
26
26
may
506
No.
own
non-lawyer
who
seeks
to
represent
the
interests
of
a
corporation
or
an
LLC
"constitutes
the
unauthorized
practice
oflaw
and
results
in
a
nullity."
Supreme
Pro
Clean
LLC.
2017
WL
3209450,
at
*2
(citation
omitted).
An
assignment
does
not
alter
this
rule:
"Federal
courts
have
refused
to
countenance
circumvention
of
the
requirement
that
a
corporation
be
represented
by
counsel
through
the
corporation's
assignment
of
a
claim
to
a
non-lawyer."
GEVHC.
LLC
v.
Redbum.
No.
CIV.
07-3875,
2008
WL
3896107,
at
*1
(D.
Minn.
Aug.
20,
2008)
(citing
Pridsen
v.
Andresen.
113
F.3d
391,
393
(2d
Cir.
1997);
Palazzo
v.
Gulf
Oil
Corp..
764
F.2d
1381,
1385-86
(11th
Cir.
1985);
Jones
v.
Niagara
Frontier
Transp.
Auth..
722
F.2d
20,23
(2d
Cir.
1983)).
Prelude's
alleged
assignment
of
its
claims
to
Mattson
at
least
in
this
instance
does
not
circumvent
"the
requirement
that
a
corporation
be
represented
by
counsel
through
the
corporation's
assignment
of
a
claim
to
a
non-lawyer."
Id.
Mattson
cannot
bring
Prelude's
claims
pro
se
and
is
not
purporting
to
do
so.
The
motion
to
strike
is
denied,
but
for
reasons
explained
above,
the
case
must
be
dismissed.
VIII.
Fictitious
Case
Citations
in
Plaintiffs'
Response
Within
their
reply.
Defendants
highlight
that
"Plaintiffs'
response
brief
contains
fictitious
cases,
incorrect
case
citations,
and
non-existent
quotations,"
and
proceed
to
document
inconsistencies
between
Plaintiffs'
citations
and
Defendants'
subsequent
legal
research.
Doc.
35
at
9-12.
Defendants
note
that
"[fjederal
courts
have
inherent
authority
to
impose
sanctions
for
bad
faith
litigation
conduct
and
abuses
of
the
judicial
process,
including
assessments
of
attorney's
fees"
but
do
not
specifically
request
that
this
Court
impose
sanctions.
See
id.
at
5-6
(collecting
case
law
on
sanctions
for
filing
fictitious
case
citations
or
quotations).
Shortly
after
the
Defendants'
reply,
Plaintiffs
filed
a
"Notice
of
Corrected
Citations."
Doc.
36.
Plaintiffs
additionally
filed
a
sur-reply
to
address
issues
raised
in
the
response,
and
they
noted
"that
47
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