In Jones v. L.A. Central Plaza, No. 22-55489 (9th Cir. July 26, 2023), the Ninth Circuit holds that the district court erred by sua sponte granting a Rule 12 dismissal on the pleadings for lack of Article III standing, when the parties had already briefed summary judgment on the same standing issue.
Jones sued the defendant liquor store under Title III of the Americans with Disabilities Act (ADA) for “a variety of barriers to access that” he allegedly encountered on a visit. Title III does not permit an award of compensatory damages, only injunctive relief. Plaintiff later filed a motions for summary judgment on liability. The store did not cross-move for summary judgment, but in its opposition to the plaintiff’s motion it argued “that the case should be dismissed for lack of jurisdiction because Jones had failed adequately to show Article III standing.” Plaintiff answered the argument in his reply brief.
Instead of ruling on the summary judgment motion, “the district court sua sponte addressed whether the allegations of Article III standing in Jones’s operative complaint were sufficient to satisfy the applicable pleading standards of Ashcroft v. Iqbal, 556 U.S. 662, 678– 79 (2009) . . . . Concluding that those allegations were insufficient, the district court held that it ‘must dismiss the first amended complaint.’” The district court further held that “[b]ecause the deadline to amend the complaint under the court’s Rule 16 pretrial scheduling order had long passed,” plaintiff could not successfully amend the original complaint and thus the district court dismissed the case without prejudice on standing grounds.
The Ninth Circuit vacates and remands. Because the defendant did not raise the standing issue at the pleading stage, the parties instead “presented the issue of Article III standing to the court in the context of a summary judgment motion, and they based their arguments on the evidentiary materials in the summary judgment record. However, rather than resolve the question actually presented by the parties as to whether Jones had adequately established standing with factual evidence under summary judgment standards, the district court sua sponte decided to examine the adequacy of the complaint’s allegations of Article III standing under Iqbal’s pleading standards.”
The panel holds that it was error for the district court, on its own motion, to convert summary judgment into a Rule 12 motion to dismiss. As a general proposition, courts do not reach out to decide issues not presented to them. “In our adversary system, it is generally up to the parties to decide, within the parameters of the applicable procedural rules, what particular relief they wish to seek, what type of motion they wish to present to obtain that relief, and which arguments they wish to make in support.”
The rules do envision that courts sometimes, “with appropriate notice, . . . raise issues sua sponte and even . . . convert the form of the motion that a party has chosen to present to the court.” Relevant to this case, when presented with a motion to dismiss under “Rule 12(b)(6) or for judgment on the pleadings under Rule 12(c), the district court may choose to exclude such extrinsic matters and address the motion under the applicable Rule 12 standards, or it may convert the motion into ‘one for summary judgment under Rule 56.’ See FED. R. CIV. P. 12(d) . . . .”
Yet the panel notes that the federal rules nowhere authorize a district court to do the reverse, i.e., converting a summary judgment motion into a motion to dismiss. And “here the district court effectively . . . converted a summary judgment motion addressed to the adequacy of the evidence of standing into a motion to dismiss addressed to the adequacy of the complaint’s allegations of standing.”
This violated the rule of party presentation that undergirds the adversarial system. “By disregarding the more robust [summary judgment] procedural device the parties have invoked to frame the issue, such a reverse conversion unjustifiably ignores the fuller evidentiary record assembled by the parties after they have already incurred the expense of discovery.”
The “district’s court’s sua sponte conversion of a summary judgment motion addressing sufficiency of the evidence into a pleadings motion addressing the adequacy of the complaint’s factual allegations under Iqbal either (1) does not change the ultimate outcome or (2) changes it in a way that seems exceedingly difficult to justify. Either way, it makes little sense not to simply decide the issues as the parties presented them.”
“Such a reverse conversion of a summary judgment motion into a pleadings motion is even more problematic when, as here, the district court provided no notice to the parties that it was contemplating doing so. Given the due process and fairness concerns presented, a district court generally must provide the parties with adequate notice that it is contemplating invoking a particular procedural device sua sponte . . . . [T]he fact that the district court has the power and the obligation to raise jurisdictional issues such as standing sua sponte, see FED. R. CIV. P. 12(h)(3), does not mean that it has discretion, later in the litigation, to retroactively examine the adequacy of the complaint’s factual allegations of standing under Iqbal.”
Here, “the record confirms the impropriety of the district court’s manner of proceeding. In its ruling, the district court itself opined that Jones had ‘provided facts that could demonstrate standing with his motion for summary judgment,’ but it nonetheless inexplicably chose to ignore those facts and instead to parse the language of Jones’s complaint for compliance with Iqbal. And the court provided no notice whatsoever that it planned to dispose of the case in this novel and unjustifiable manner.” The panel thus remanded the case for further consideration of the standing issue under the proper standard.
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