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Smart-Tek Service Corp. v. United States Internal Revenue Service

United States District Court, S.D. California

July 27, 2015

SMART-TEK SERVICE CORP., Plaintiff,
v.
UNITED STATES INTERNAL REVENUE SERVICE, Defendant.

ORDER DENYING MOTION TO DISMISS AND DENYING MOTION FOR SUMMARY JUDGMENT

BARRY TED MOSKOWITZ, Chief District Judge.

On May 4, 2015, Defendant, United States Internal Revenue Service ("Defendant") filed a motion to dismiss Plaintiff, Smart-Tek Service Corporation's ("Plaintiff") Complaint ("Compl.") under Fed.R.Civ.P. 12(b)(6), or in the alternative, for summary judgment under Fed.R.Civ.P. 56. For the reasons discussed below, Defendant's motion to dismiss is DENIED. Defendant's motion for summary judgment is also DENIED without prejudice.

I. BACKGROUND

On February 27, 2015, Plaintiff commenced this action for declaratory and injunctive relief under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, after exhausting its administrative remedies. Plaintiff is a dissolved Florida corporation that had its last place of business in San Diego, California. (Compl. ¶ 5; Doc. 13-2.) Plaintiff was incorporated in Florida on January 12, 2010, and was administratively dissolved on September 27, 2013 for failing to file its annual report and pay its filing fee. (Doc. 13-2, Exh. A).

On May 12, 2014, Plaintiff sent Defendant a written request for agency records under FOIA. (Compl. ¶¶ 10, 17.) On September 29, 2014, Defendant acknowledged receipt of the FOIA request without making a final determination at that time. (Id. at ¶ 11.) On January 8, 2015, Plaintiff again contacted Defendant by certified letter, stating that it would bring this action if Defendant failed to provide the requested documents by the end of that month. (Id. at ¶ 14.) Other than Defendant's letter confirming receipt of Plaintiff's FOIA request, Plaintiff alleges that it received no other responsive documentation from Defendant. (Id. at ¶ 15.)

II. LEGAL STANDARD

A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). Dismissal under Rule 12(b)(6) for failure to state a claim is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is sufficient to state a claim, the court will take all material allegations as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

In the Ninth Circuit, the capacity of a dissolved corporation to sue or be sued is governed by the laws of the state of incorporation. See Levin Metals Corp. v. Parr-Richmond Terminal Co., 817 F.2d 1448, 1451 (9th Cir. 1987); Fed.R.Civ.P. 17(b)(2) ("[t]he capacity of a corporation to sue or be sued shall be determined by the law under which it was organized.").

III. DISCUSSION

Defendant moves to dismiss on the grounds that Plaintiff is a dissolved corporation, and therefore lacks the capacity to bring a suit under Fed.R.Civ.P. 17(b)(2). In opposition, Plaintiff argues that under Florida law, it has the capacity to sue in the course of "winding up" its business. In the alternative, Defendant moves for summary judgment on the basis of one attached exhibit showing that Plaintiff was administratively dissolved for failure to file an annual report (Doc. 13-2).

As discussed below, the Court finds that Plaintiff has legal capacity to sue and that a motion for summary judgment is premature.

A. Motion to Dismiss for Lack of Capacity to Sue

Fla. Stat. Ann. § 607.1622(8) states that "[a]ny corporation failing to file an annual report... shall not be permitted to maintain or defend any action in any court of this state until such report is filed and all fees and taxes due under this act are paid and shall be subject to dissolution[.]" The effect of dissolution under this provision is modified by § 607.1405, which provides, in relevant part:

(1) A dissolved corporation continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate ...

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