Heart of America Grain Inspection Service, Inc. v. Missouri Dept. of Agriculture, s. 96-3249
| Decision Date | 02 December 1997 |
| Docket Number | Nos. 96-3249,96-3263,s. 96-3249 |
| Citation | 123 F.3d 1098 |
| Parties | HEART OF AMERICA GRAIN INSPECTION SERVICE, INC.; Thomas J. Clatanoff; Jack L. Covey; Stephen E. Plummer; Monty M. Uptegrove, Plaintiffs, v. MISSOURI DEPARTMENT OF AGRICULTURE; Stephen Bell; Tommy D. Hopkins, Defendants. STATE OF MISSOURI, ex rel. John L. SAUNDERS, Director, Missouri Department of Agriculture, Plaintiff-Appellant, v. HEART OF AMERICA GRAIN INSPECTION SERVICE, INC.; Thomas J. Clatanoff; Stephen E. Plummer; Jack L. Covey; Monty M. Uptegrove, Defendants-Appellees. HEART OF AMERICA GRAIN INSPECTION SERVICE, INC.; Thomas J. Clatanoff; Jack L. Covey; Stephen E. Plummer; Monty M. Uptegrove, Plaintiffs-Appellants, v. MISSOURI DEPARTMENT OF AGRICULTURE; Stephen Bell; Tommy D. Hopkins, Defendants-Appellees. STATE OF MISSOURI, ex rel. John L. SAUNDERS, Director, Missouri Department of Agriculture, Plaintiff-Appellee, v. HEART OF AMERICA GRAIN INSPECTION SERVICE, INC.; Thomas J. Clatanoff; Stephen E. Plummer; Jack L. Covey; Monty M. Uptegrove, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Gregory Scott, Assistant Attorney General, Jefferson City, MO, argued, for appellants/cross-appellees Missouri Department of Agriculture, et al.
Rebecca L. McGinnis, Kansas City, MO, argued, for appellees/cross-appellants Heart of America, et al.
Paul Rauschenbach, Assistant Attorney General, St. Louis, MO, argued, for appellee Tommy D. Hopkins in No. 96-3263.
Before BOWMAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and KYLE, 1 District Judge.
The Missouri Department of Agriculture, ex rel John L. Saunders, Director, Missouri Department of Agriculture (the Department); Stephen Bell; and Tommy D. Hopkins appeal from an order of the District Court 2 granting summary judgment to Heart of America Grain Inspection Service Inc., Thomas J. Clatanoff, Jack L. Covey, Stephen E. Plummer, and Monty M. Uptegrove (collectively, HOA) on HOA's counterclaim for declaratory and injunctive relief, and denying summary judgment to the Department on its own claim for declaratory and injunctive relief. HOA cross appeals from a number of decisions adverse to it. We affirm.
In 1992, HOA (some of whose employees were employed by the Department before joining HOA) was performing grain weighing, grading, and inspection services in grain warehouses in the Kansas City area that were licensed under the United States Warehouse Act, 7 U.S.C. §§ 241-73 (1994) (the USWA or the Act). Among other services, HOA provided Class II certified weights. Such weights are a grain industry standard (not a matter of federal or state law) and are obtained by a licensed weigher, using an approved scale, under twenty-five per cent supervision by a disinterested third party. HOA and the Department both offered Class II certification services in 1992, that is, they provided the supervisory, disinterested third party. HOA provided this service under authority of the Association of American Railroads, a trade group, and in October 1992 individuals working for HOA received federal licenses under the USWA (after the Department notified the United States Department of Agriculture (USDA) of HOA's grain certification activities).
In September 1992, the Department sent a letter to the grain industry over the signatures of Hopkins, who was then (and was from November 1981 through June 1994) the Division Director of Grain Inspection and Warehousing for the Department, and Mark Weaver, an assistant state attorney general. The letter related the Department's position that it had the exclusive right (subject to the rights of grain exchanges and boards of trade) to weigh and supervise the weighing of grain in all warehouses in the state of Missouri. The Department relied for its authority on the Missouri Grain Warehouse Law (the MGWL):
The department shall have the exclusive right to officially weigh or supervise the actual weighing of grain in licensed terminal warehouses subject to the provisions of this chapter, unless the owner or his agent indicates that no official weights are desired and may officially weigh or supervise the actual weighing of grain in public or private warehouses or industries upon application of the owners or operators thereof and their agreement to guarantee the operating costs.
Mo.Rev.Stat. § 411.030.2 (1986). In the Department's view, or so it now claims, this statute gave the Department the sole right (with the exceptions we have noted above) to certify Class II grain weights. The Department took this position, even as to warehouses licensed under the USWA, notwithstanding two other sections of the MGWL. The first, concerning the scope of the MGWL, stated, "The provisions of the [MGWL] shall apply to all warehouses located within the state of Missouri not licensed under the provisions of the [USWA]." Id. § 411.015 (1986). The other relevant section provided:
This chapter shall not apply in any respect whatsoever to that part of any operation of any public or private warehouse, elevator, or structure in this state operating under a federal warehouse act, except as such warehouseman may make application for any of the services of the Missouri grain warehouse department, nor shall this chapter prohibit, infringe, or apply to any weighing or weighing supervision in or in connection with a federally licensed warehouse performed by any grain exchange or board of trade.
In 1993, the Department found it necessary to revise its regulations to reflect its position on the certification of grain weights. Also, during the 1993 Missouri legislative session, sections 411.015 and 411.681 were revised to eliminate the portions of those sections that prohibited state regulation of federally licensed warehouses. 3
On August 2, 1993, HOA filed a complaint in the District Court seeking a declaratory judgment and injunctive relief against the Department (Count I), and challenging certain actions taken by Hopkins and Bell as tortious interference with HOA's business relationships (Count II) and as violations of HOA's rights under 42 U.S.C. § 1983 (1994) (Count III). The Department then filed suit in Missouri state court seeking an injunction against HOA, which responded with a counterclaim in three counts, essentially reproducing its federal claims. The Department's suit was removed to federal court and consolidated with HOA's suit.
On July 21, 1994, the Department as a state agency was dismissed from HOA's suit on Eleventh Amendment grounds. On January 25, 1995, HOA's claim against Hopkins for declaratory and injunctive relief (Count I) was dismissed because he was no longer an employee of the Department. The District Court also granted summary judgment to Hopkins on HOA's Count II, tortious interference with business relationships, concluding that Hopkins was entitled to official immunity because sending the September 1992 letter was a discretionary act. In January 1996, the court granted Hopkins summary judgment on HOA's § 1983 claim (Count III), concluding that he was entitled to qualified immunity. Finally, on July 3, 1996, Bell, who was responsible for administering the Department's grain inspection program when HOA's claims were made, was granted summary judgment on all three counts: on Count I because he had no policy-making authority at the time the summary judgment was granted, on Count II because of privilege, and on Count III because of qualified immunity. The court granted summary judgment to HOA, however, on Count I of its counterclaim against the Department ex rel Saunders for declaratory and injunctive relief, having determined that the state law at issue was preempted by federal law.
The Department appeals, challenging the standing of the HOA individual plaintiffs to bring suit and the District Court's decision on preemption. HOA cross appeals, challenging all of the court's decisions adverse to HOA (except for the Eleventh Amendment dismissal of the Department and the dismissal of Count I as to Hopkins and Bell), and further claiming that the court erred in denying HOA's motion to compel discovery of certain Department files. We affirm.
The Department argues that the individual HOA plaintiffs are without standing to sue, and that the District Court erred by not dismissing them. According to the Department, the claims of the individual plaintiffs are merely derivative of the corporation's claims. We reject this argument.
It is true that the judiciary has created a prudential standing requirement "that a litigant must normally assert his own legal interests rather than those of third parties." Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 804, 105 S.Ct. 2965, 2970, 86 L.Ed.2d 628 (1985). We believe, however, that the HOA individual plaintiffs are not third parties without standing merely because they are asserting claims along with HOA, their corporation. "[A] shareholder with a direct, personal interest in a cause of action [may] bring suit even if the corporation's rights are also implicated." Franchise Tax Bd. v. Alcan Aluminium Ltd., 493 U.S. 331, 336, 110 S.Ct. 661, 665, 107 L.Ed.2d 696 (1990). The HOA individual plaintiffs have such direct and personal interests, as they are among those who personally are prevented from practicing their trade by virtue of the state's actions--as they would be regardless of their affiliation with HOA. Moreover, each is licensed under the USWA, which is the basis for the District Court's preemption decision; HOA, the corporation, does not itself hold a federal license but it does wish to do business with federally-licensed warehouses. Thus both the individuals and the corporation are in a position to assert distinct claims charging violations of their rights. 4
But even if we were mistaken about the standing of the individual HOA plaintiffs, our error would be of no consequence to our conclusion...
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