United States District Court, S.D. Ohio, Eastern Division
JOHN A. OLAGUES, Plaintiff,
STEPHEN D. STEINOUR, et al., Defendants.
Deavers Magistrate Judge.
OPINION & ORDER
ALGENON L. MARBLEY UNITED STATES DISTRICT JUDGE.
matter is before the Court on the Defendants* Motions to
Strike Plaintiffs Procedurally improper Complaint (ECF. No.
5). For the reasons stated below, Defendants' motion is
GRANTED. Plaintiff is directed to cause
counsel to file an Amended Complaint that complies with this
Order within thirty (30) days hereof. Failure to do so will
result in dismissal of this case without prejudice.
a shareholder of Defendant Huntington Bancshares Inc.
("Huntington"), brings this action against
Huntington and Defendant Stephen Steinour, the President and
CEO of Huntington. (ECF No. 1). Plaintiff alleges that a
series of stock transactions conducted by Steinour from 2014
to 2016 violate Section 16(b) of the Securities Exchange Act
of 1934, which requires company insiders to disgorge any
profits earned through short-swing trading. (Id. at
¶¶ 2, 4, 9). Through his suit, Plaintiff seeks to
recover $367, 847 "for the firm, Huntington Bancshares
Inc." (Id. at ¶¶6, 21).
STANDARD OF REVIEW
can strike from a pleading "any redundant, immaterial,
impertinent, or scandalous matter." Fed.R.Civ.P. 12(f).
Additionally, courts have inherent power to control their
dockets, which entails the power to strike a document or a
portion of a document. See Zep Inc. v. Midwest Motor
Supply Co., 726 F.Supp.2d 818, 822 (S.D. Ohio 2010);
see also Kirk v. Muskingum Cty. Ohio, No. CIV. A.
2:09-CV-0583, 2010 WL 3719286, at *2 (S.D. Ohio May 24,
20\0), report and recommendation adopted as modified,
No. 2:09-CV-00583, 2010 WL 3702581 (S.D. Ohio Sept. 17,
2010) (granting Defendants' Motion to Strike First
Amended Complaint that was filed untimely); Alpha Co-op.
Enterprises, Inc. v. Frognet DSL, LLC, No. 2:04-CV-749,
2005 WL 1629775, at *2-3 (S.D. Ohio July 5, 2005) (granting
motion to strike third party complaint when party was joined
improperly as a third party defendant). "A court has
broad discretion in determining whether to grant a motion to
strike." McKinney v. Bayer Corp., No.
10-CV-224, 2010 WL 2756915, at *l-2 (N.D. Ohio July 12,
2010); see also Sheets v. U.S. Bank, Nat. Ass'n,
No. 14-CV-10837, 2014 WL 5499382, at *2 (ED, Mich. Oct, 30,
2014) ("[C]ourts have liberal discretion to strike
law permits a party to "plead and conduct their own
cases personally or by counsel." 28 U.S.C. § 1654,
Plaintiffs, however, are "not permitted] to appear pro
se where interests other than their own are at
stake." Shepherd v. Wellman, 313 F.3d 963, 970
(6th Cir. 2002). In other words, "a nonlawyer can't
handle a case on behalf of anyone except himself."
Zanecki v. Health All Plan of Detroit, 576 Fed.Appx.
594, 595 (6th Cir. 2014) (internal quotations omitted).
Indeed, "courts have routinely adhered to the general
rule prohibiting pro se plaintiffs from pursuing
claims on behalf of others in a representative
capacity." Simon v. Hartford Life,
Inc., 546 F.3d 661, 664-65 (9th Cir. 2008)
(collecting cases). Thus, courts have barred pro se
plaintiffs from bringing qui tam actions on behalf
of the United States Government* Stoner et al v. Santa
Clara County Office of Education, et al, 502 F.3d 1116,
1126-27 (9th Cir. 2007), pro se prisoners from
maintaining class actions, Damron v. Sims, No.
2:09-CV-50, 2010 WL 2671277, at * 1 (S.D. Ohio June 30,
2010), and pro se plaintiffs from representing
corporations, Tat v. Hogan, 453 F.3d 1244, 1254
(10th Cir. 2006). The rule barring pro se plaintiffs
from bringing causes of action on behalf of others is
designed to "protect the rights of those before the
court by preventing an ill-equipped layperson from
squandering the rights of the party he purports to
represent." Zanecki, 576 Fed.Appx. at 595
(internal quotations omitted).
16(b) of the Securities and Exchange Act of 1934
("Section 16(b)"), prohibits insiders, in certain
circumstances, from making short-swing profits. See
15 U.S.C.A. § 78p(b). The statute authorizes the issuer
to bring suit against an insider to disgorge the short-swing
profits obtained improperly. Id. If the issuer
"refuse[s] to bring... suit within sixty days after
request" or "fail[s] diligently to prosecute"
the suit, shareholders are authorized to bring suit "in
the name and in behalf of the issuer." Id. A
shareholder who brings suit "will have no direct
financial interest in the outcome of the litigation, since
any recovery will inure only to the issuer's
benefit." Gollust v. Mendell, 501 U.S. 115, 12?
(1991). Thus, "[i]t is well settled that, since recovery
is for the corporation, it is the real party in interest and
the stockholder plaintiff is but the mere vehicle of
recovery." Blau v. Lamb, 314 F.2d 618, 619-20
(2d Cir. 1963) (internal quotations omitted).
Phillips v. Tobin, the Second Circuit addressed the
question of whether a plaintiff could proceed pro se
in a stockholder's derivative suit alleging violations of
different provisions of the Securities Exchange Act of 1934.
548 F.2d 408, 411 (2d Cir. 1976). The Court recognized that
"[c]ourts have repeatedly held that the substantive
right in a stockholder's derivative suit is that of the
corporation, and not that of the stockholders, "
Id. (internal quotations omitted). Reasoning that a
derivative action is "a mere procedural device to
enforce the corporate claim, " the Court held that
"[s]ince a corporation may not appear except through an
attorney, likewise the representative shareholder cannot
appear without an attorney." Id. Thus, the
Second Circuit reversed the lower court's order allowing
the plaintiff to prosecute the suit prose. Id.
instant Motion, Defendants argue that Plaintiff cannot appear
pro se because the suit is on behalf of Huntington
and his claim implicates interests other than his own, (ECF
No. 6). Defendants correctly state the law.' The real
party in interest in this case is Huntington, and Plaintiff
brings the action on its behalf. Indeed, Plaintiff
acknowledged in his complaint that any recovery he obtains
will go to Huntington. See ECF No. 1 at ¶ 6
("Plaintiff seeks to "obtain a recovery for the
firm, Huntington Bancshares Inc."); see also
ECF No. 9 at ¶ 8 ("In this 16(b) suit ... there is
just one beneficiary, it is Huntington
Bancshares.*). Thus, Plaintiffs ability to bring a
lawsuit under Section 16(b) is a "mere procedural device
to enforce the corporate claim." Phillips, 548
F, 2d at 411. As such, Plaintiff cannot proceed pro se.
See Shepherd, 313 F.3d at 970-71 (holding plaintiffs
could not proceed pro se on behalf of decedent's
minor child or decedent's estate in § 1983 claim
against officer that fatally shot decedent).
tries to save his complaint by arguing that the suit is a
private right of action under Section 16(b), not a
representative action or derivative action on behalf of the
shareholders. (ECF No. 9 at ¶¶ 9, 13, 55). The
issue, however, is not who Plaintiff is acting on behalf
of-it is that he is acting on behalf of another entity in the
first place. While Plaintiff is correct that he is not acting
on behalf of the shareholders of Huntington, he is
still acting on behalf of an entity-Huntington itself. Having
a private right of action just means that an individual,
rather than the SEC, can sue to enforce the provisions of
Section 16(b). While Plaintiff has a private right of action
to sue, he is still suing on behalf of another entity-the
issuer-under the statute. Thus, he cannot appear pro
also argues mat he has brought numerous other pro se
cases alleging violations of Section 16(b) and no other court
or attorney suggested that he could not appear pro
se. (ECF No. 9 at ¶¶ 6, 15, 16, 17, 18, 26).
This argument is unpersuasive for several reasons. First, his
no longer true. In Olagues v. Muncrief, et al., No.
17-cv-153 (N.D. Ok. June 6, 2017), the Court decided this
exact issue. See ECF No. 22. The Court found that
Plaintiffs suit under Section 16(b) was "representative
in nature" and held that he could not proceed pro
se. Muncrief, No. 17-cv-153, ECF No. 16. Thus, the Court
ordered Plaintiff to filed an Amended Complaint through
counsel. Id. Second, contrary to Plaintiffs
contention, it is not clear from the record that the Southern
District of New York allowed him to proceed pro se
in Dimon.There, in a similar Section 16(b) suit, the
Court ordered Plaintiff to show cause as to why his action
should not be dismissed for lack of counsel. Olagues v.
Dimon, et al., No. 14-cv-4872, ECF No. 4. Plaintiff
responded to the show cause order, ECF No. 10, but it is not
clear from the docket that the Court ever made a definitive
ruling on the issue. Instead, Plaintiff obtained counsel.
See Id. at ECF No. 17. Finally, from the ...