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Chipotle Mexican Grill, Inc. v. Chevedden

United States District Court, D. Colorado

March 14, 2014



WILLIAM J. MARTÍNEZ, District Judge.

Plaintiff Chipotle Mexican Grill, Inc. ("Plaintiff") has filed this action for a declaratory judgment against Defendants John Chevedden, James McRitchie, and Myra K. Young (collectively "Defendants"), arising out of an alleged violation of the regulations under the Securities Exchange Act of 1934, 17 C.F.R. § 240.14a-8. (ECF No. 1.) This matter is before the Court on Defendants' Motion to Dismiss for Lack of Jurisdiction ("Motion") (ECF No. 10) and Plaintiff's Motion for Summary Judgment (ECF No. 19). The Court agreed to rule on these motions on an expedited basis. (ECF No. 17.) For the reasons set forth below, Defendants' Motion is granted and the case is dismissed for lack of jurisdiction.


Rule 12(b)(1) empowers a court to dismiss a complaint for "lack of jurisdiction over the subject matter." Fed.R.Civ.P. 12(b)(1). Dismissal under Rule 12(b)(1) is not a judgment on the merits of a plaintiff's case. Rather, it calls for a determination that the court lacks authority to adjudicate the matter, attacking the existence of jurisdiction rather than the allegations of the complaint. See Castaneda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994) (recognizing federal courts are courts of limited jurisdiction and may only exercise jurisdiction when specifically authorized to do so).

A Rule 12(b)(1) motion to dismiss "must be determined from the allegations of fact in the complaint, without regard to mere conclusory allegations of jurisdiction." Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir. 1971). When considering a Rule 12(b)(1) motion, however, the court may consider matters outside the pleadings without transforming the motion into one for summary judgment. Holt v. United States, 46 F.3d 1000, 1003 (10th Cir. 1995). Where a party challenges the facts upon which subject matter jurisdiction depends, a district court may not presume the truthfulness of the complaint's "factual allegations... [and] has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1)." Id.

The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction. Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974). A court lacking jurisdiction "must dismiss the cause at any stage of the proceeding in which it becomes apparent that jurisdiction is lacking." See id.


This action is the most recent in a line of cases brought by corporate plaintiffs challenging shareholder proposals submitted by Defendant Chevedden. ( See ECF No. 13 at 2-8 (citing, e.g., Apache Corp. v. Chevedden, 696 F.Supp.2d 723 (S.D. Tex. 2010); KBR Inc. v. Chevedden, 776 F.Supp.2d 415 (S.D. Tex. 2011); Waste Connections, Inc. v. Chevedden, 2014 WL 554566 (5th Cir. Feb. 13, 2014)); see also Express Scripts Holding Co. v. Chevedden, 2014 WL 631538 (E.D. Mo. Feb. 18, 2014); EMC Corp. v. Chevedden, No. 14-cv-10233-MLW (Mass. March 7, 2014); Omnicom Group, Inc. v. Chevedden, No. 14 Civ. 0386 (S.D.N.Y. March 11, 2014).[2] Plaintiff seeks a declaration that the shareholder proposal at issue here, which Defendants submitted for inclusion in Plaintiff's proxy statement for its upcoming stockholder meeting, violates the Securities Exchange Act and can therefore be excluded from Plaintiff's proxy statement. (Compl. (ECF No. 1).) In their Motion to Dismiss, Defendants argue that Plaintiff lacks standing to sue because it can show no injury in fact, and that the case should therefore be dismissed for lack of jurisdiction. (ECF No. 10.)

A declaratory judgment may be granted only in "a case of actual controversy within its jurisdiction". 28 U.S.C. § 2201(a). This refers directly to the "case or controversy" requirement of Article III of the United States Constitution. U.S. Const. Art. III § 2; see Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S.Ct. 843, 848 (2014) (holding that "the Declaratory Judgment Act does not extend the jurisdiction of the federal courts." (internal quotation marks omitted)). The limitation of jurisdiction to an actual controversy is a "bedrock requirement" that protects the system of separated powers, and from which the concept of standing arises. Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S. 464, 471 (1982); see also Raines v. Byrd, 521 U.S. 811, 818 (1997) ("No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies.'" (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 37 (1976))).

Of the justiciability doctrines created to enforce the case or controversy limitation, the requirement that a litigant "have standing' to invoke the power of a federal court is perhaps the most important". Allen v. Wright, 468 U.S. 737, 750 (1984). "[T]he standing question is whether the plaintiff has alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf." Warth v. Seldin, 422 U.S. 490, 498-99 (1975) (citing Baker v. Carr, 369 U.S. 186, 204 (1962)).

A plaintiff must show three elements to establish standing to assert a claim:

[1] The plaintiff must have suffered an injury in fact..., [2] there must be a causal connection between the injury and the conduct complained of-the injury has to be fairly traceable to the challenged action of the defendant, and... [3] it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal citations omitted). Allegations of future injury cannot satisfy the injury in fact requirement if the injury is merely possible, but "must be certainly impending'" to establish standing. Clapper v. Amnesty Int'l USA, 133 S.Ct. 1138, 1143 (2013) (quoting Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)).

The Tenth Circuit "has repeatedly characterized standing as an element of subject matter jurisdiction." Hill v. Vanderbilt Capital Advisors, LLC, 702 F.3d 1220, 1224 (10th Cir. 2012). Because Plaintiff is the party invoking this Court's jurisdiction, it bears the burden of ...

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