United States District Court, W.D. Pennsylvania
MEMORANDUM AND ORDER
Bissoon United States District Judge.
reasons that follow, this case will be dismissed, sua
sponte, pursuant to the provisions of 28 U.S.C. §
1915, as frivolous and for failing to state a claim on which
relief may be granted. Accordingly, the Court will deny
Plaintiff's Motion for a Preliminary Injunction (Doc. 4)
and vacate the Clerk's Entry of Default (Doc. 12).
been granted leave to proceed in forma pauperis
(“IFP”), Plaintiff is subject to the screening
provisions in 28 U.S.C. § 1915(e). See Atamian v.
Burns, 2007 WL 1512020, *1-2 (3d Cir. 2007) (“the
screening procedures set forth in [Section] 1915(e) apply to
[IFP] complaints filed by prisoners and non-prisoners
alike”) (citations omitted). Under that statute, the
Court is required to dismiss any action that is frivolous or
malicious, fails to state a claim upon which relief can be
granted, or that cannot or should not proceed on the merits.
28 U.S.C. § 1915(e)(2)(B); Fedee v. Dow, 2012
WL 5472120, *2 (D. N.J. Nov. 8, 2012) (citations omitted);
see Collins v. Cundy, 603 F.2d 825, 828 (10th Cir.
1979) (“[T]here is no constitutional right to the
expenditure of public funds and the valuable time of the
federal courts to prosecute an action that is totally without
having been granted IFP, (Doc. 2), Plaintiff filed his
Complaint and a Motion for Temporary Restraining
Order/Preliminary Injunction on May 25, 2016. (Docs. 3 and
4). The Court reviewed the Complaint and Motions to determine
whether emergency relief in the form of a temporary
restraining order was warranted and determined that Plaintiff
had not met the requirements of Federal Rule of Civil
Procedure 65(b) and that it would treat the Motion as one for
Preliminary Injunction. (Doc. 5.) The Court directed
Plaintiff to serve Defendants. Plaintiff moved for service by
the U.S. Marshal which was effectuated on August 16, 2016.
(Docs. 6-10). Defendants did not appear, answer or otherwise
respond to the Complaint. On September 23, 2016, Plaintiff
requested entry of Default. (Doc. 11). On October 18, 2016
the Clerk of Court's Entered Default as to Defendants
Michael Moore and the Moore Consulting Group. (Doc. 12.) That
Plaintiff requested default which was subsequently entered,
(see Docs. 11 and 12), is immaterial to the IFP screening
analysis. 28 U.S.C. § 1915(e)(2) (“The Court shall
dismiss the case at any time if the court determines
that … the action fails to state a claim on which
relief may be grated.”) (emphasis added).
asserts he is bringing a shareholder derivative lawsuit
pursuant to Federal Rule of Civil Procedure 23.1. (Compl.,
Doc. 3 at 1.) He alleges he and non-party Jeffrey Duke are
the only members of CMB2, LLC (“CMB2”), a limited
liability corporation formed in the state of Maryland.
(Id. at 2.) According to the Complaint, on March 25,
2014, CMB2, “subject to an asset purchase agreement,
” purchased the assets of Expression Tributes, Inc.,
(“ETI”) and Universal Technologies, Inc.,
(“UTI”), Pennsylvania corporations engaged in the
business of funeral home website design and hosting,
businesses formerly owned by Defendant Michael Moore.
(Id.) Included in the purchased assets were
intellectual property, customer lists, the Seller's
office fileserver and the Seller's customer files.
alleges that Defendant Moore “intentionally began a
series of unlawful acts which interfered and harmed
CMB2.” (Id.) Specifically, he argues
Defendants violated the Computer Fraud and Abuse Act, 18
U.S.C. § 1030, by unlawfully accessing computers in the
possession of CMB2 with the intent to cause damage and steal
information ultimately resulting in the erasure of a number
of client websites (id. at ¶ 1); Defendants
violated the Trade Secrets Act, 18 U.S.C. § 1832 by
“using, copying, and retaining the customer list assets
owned by CMB2” (id. at ¶ 2); and
Defendants engaged in conversion or civil theft by knowingly
stealing monies from CMB2. (Id. at ¶ 3).
attempt to bring a pro se shareholder's
derivative suit is impermissible. Just as a business entity
cannot represent itself in court, Simbraw, Inc. v. United
States, 367 F.2d 373, 373 (3d Cir. 1966), neither may a
shareholder acting on behalf of a corporate entity. See
Phillips v. Tobin, 548 F.2d 408, 411-15 (2d Cir. 1976)
(“Since a corporation may not appear except through an
attorney, likewise the representative shareholder cannot
appear without an attorney.”); Business Watchdog v.
ITEX Corp., 2014 WL 5525718, at *1 (S.D.N.Y. Oct. 29,
2014); Tang v. Vaxin, Inc., 2016 WL 892757, at *13
(N.D.Ala., Mar. 9, 2016); Brojer v. Kuriakose, No.
11-CV-3156, 2011 WL 3043778, at *3 (E.D.N.Y. July 20, 2011);
see also United States v. High Country Broad. Co., 3
F.3d 1244, 1245 (9th Cir.1993) (finding a shareholder's
request to intervene pro se was just a means to avoid the
requirement that a corporation be represented by counsel and
thus impermissible.); Cramer v. General Telephone &
Electronics Corp., 582 F.2d 259, 267 (3d Cir. 1978)
(“In a shareholder's derivative suit, the
substantive claim belongs to the corporation.”)(citing
Ross v. Bernhard, 396 U.S. 531, 538-39
(1970). The Court finds the justification against
pro se shareholder's derivative suits even stronger in
the context of a closely-held corporation, as Plaintiff's
corporation is, where “the distinction between the
interests of the corporation as an entity and interests of
its shareholders may seem more formal than real.”
Shareholder Deriv. Actions L. & Prac. § 2:5
foregoing reason, Plaintiff's action is DISMISSED WITHOUT
PREJUDICE to his refiling after retaining counsel. IT IS
FURTHER ORDERED that Plaintiff's Motion for a Preliminary
Injunction (Doc. 4) is DENIED. The Court hereby VACATES the
Clerk's Entry of Default (Doc. 12).
 The Court of Appeals for the Third
Circuit has never directly addressed this question. However,
the Circuit Court did examine whether a court may award
attorney's fees to a pro se attorney
shareholder-objector. Zucker v. Westinghouse Elec.,
374 F.3d 221 (3d Cir. 2004). The Court views the facts at bar
sufficiently distinguishable from those examined by the Third
Circuit, as Plaintiff here is not a licensed attorney.
Moreover, Plaintiff is ...