United States District Court, S.D. Indiana, Indianapolis Division
JANE MAGNUS-STINSON, CHIEF JUDGE
case involves the sale of Plaintiff Larry Griggers'
ownership interests in several Ruth's Chris restaurants
to co-Plaintiff RC Management Holdings, LLC (“RC
Management”). After Mr. Griggers and RC Management
provided Defendant Judith Shopf an opportunity to exercise
her rights of first refusal, they brought this suit for
declaratory judgment. [Filing No. 12.] Presently
pending before the Court is Ms. Shopf's Motion to
Dismiss, in which she alleges that this Court lacks subject
matter jurisdiction over this matter. [Filing No.
63.] Ms. Shopf's Motion is fully
briefed and is now ripe for the Court's
filing her Motion to Dismiss, Ms. Shopf died in August 2018.
Plaintiffs now seek an order substituting her heirs as
defendants in this matter. As such, the Court will also
consider Plaintiffs' Motion to Substitute Party
Defendant. [Filing No. 83.]
reasons stated herein, the Court GRANTS both
Plaintiffs' Motion to Substitute Party Defendant and Ms.
Shopf's Motion to Dismiss.
Federal Rule of Civil Procedure 12(b)(1) “allows a
party to move to dismiss a claim for lack of subject matter
jurisdiction.” Hallinan v. Fraternal Order of
Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th
Cir. 2009). Jurisdiction is the “power to decide,
” and federal courts may only decide claims that fall
within both a statutory grant of authority and the
Constitution's limits on the judiciary. In re
Chicago, R.I. & P.R. Co., 794 F.2d 1182, 1188 (7th
Cir. 1986). The burden is on the party bringing the claim to
demonstrate that subject matter jurisdiction exists.
See Lee v. City of Chicago, 330 F.3d 456,
468 (7th Cir. 2003).
to dismiss under 12(b)(1) are meant to test the sufficiency
of the complaint, not to decide the merits of the
case.” Ctr. for Dermatology & Skin Cancer, Ltd.
v. Burwell, 770 F.3d 586, 588 (7th Cir. 2014). “In
the context of a motion to dismiss for lack of subject matter
jurisdiction, we accept as true the well pleaded factual
allegations, drawing all reasonable inferences in favor of
the plaintiff.” Iddir v. INS, 301 F.3d 492,
496 (7th Cir. 2002). In considering such a motion,
“[t]he district court may properly look beyond the
jurisdictional allegations of the complaint and view whatever
evidence has been submitted on the issue to determine whether
in fact subject matter jurisdiction exists.” St.
John's United Church of Christ v. City of Chicago,
502 F.3d 616, 625 (7th Cir. 2007) (citations omitted).
Shopf's Motion comes before this Court seven months after
the Court denied her previous Motion to Dismiss pursuant to
Rules 12(b)(2) and 12(b)(6) in March 2018. [Filing No.
46.] In that Order, [Filing No. 46], the Court
set forth the allegations contained in Plaintiffs'
Amended Complaint, [Filing No. 10], and those
allegations remain unchanged. As such, the Court incorporates
by reference the background of its March 2018 Order,
[Filing No. 46 at 4-9], and presents the following
abbreviated summary of the facts.
1994, Larry Griggers has been Chairman and CEO of various
Ruth's Chris entities in Indiana and Missouri,
(collectively, “the Ruth's Chris
entities”). [Filing No. 10 at 2.] Mr.
Griggers' transfer of ownership and management of the
Ruth's Chris entities was subject to a right of first
refusal by other shareholders and unitholders of the
Ruth's Chris entities. [Filing No. 10 at 3.]
Shopf, the widow of Mr. Griggers' former business
partner, is a successor in interest to her late husband's
ownership interest in the Ruth's Chris entities.
[Filing No. 10 at 2-3.]
August 2017, after a member of RC Management made an offer to
purchase Mr. Griggers' ownership interests in the
Ruth's Chris entities, Ms. Shopf was provided with notice
of the proposed transfer, along with the rest of the
shareholders and eligible unitholders of each entity.
[Filing No. 10 at 3-5.] In a letter dated September
11, 2017, Ms. Shopf's attorney challenged the transfer,
arguing that a “bundled” sale was not
permissible, the purchase price was unreasonably high, and
the transaction violated the Ruth's Chris entities'
governing documents. [Filing No. 10 at 7.] In
response, Mr. Griggers extended the time for Ms. Shopf to
exercise a right of first refusal. [Filing No. 10 at
Ms. Shopf's dispute concerning the proposed transaction,
Mr. Griggers and RC Management closed on the transaction and
signed an agreement (the “Provisional
Agreement”) to honor Ms. Shopf's right of