Tonner v. First Service Residential Corporation

Background

Stephen D. Tonner, appearing without a lawyer, filed a second amended complaint under the Racketeer Influenced and Corrupt Organizations Act, a federal law commonly called RICO. He alleged that the defendants engaged in fraud, theft, and extortion connected to a condominium unit in Ontario, Canada. He sought $3,350,000 in compensatory and punitive damages and other racketeering remedies.

The opinion states that Tonner was associated with Liliya Nugent, the former registered owner of the condominium unit, and was a minority shareholder of FirstService Corporation. Tonner appeared to assert claims on Nugent’s behalf and on behalf of FirstService Corporation. He also accused some defendants of criminal conduct and appeared to seek their criminal prosecution.

Court’s Analysis

Because Tonner was not alleged to be a lawyer, the court held that he could not represent Nugent or FirstService Corporation in federal court. The court explained that this rule also applies to a shareholder derivative action, including one asserting RICO claims. It therefore dismissed Tonner’s claims to the extent he asserted them on behalf of other people or entities.

The court also held that neither Tonner nor the court could direct prosecutors to bring criminal charges. To the extent Tonner sought to file a criminal action, the court dismissed that aspect of the complaint for lack of standing and lack of subject-matter jurisdiction.

Disposition

Judge Kimba M. Wood dismissed the complaint, which had been filed without advance payment of fees, for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(h)(3). The court denied leave to file a third amended complaint because it concluded that another amendment could not cure the defects. It directed the Clerk of Court to enter judgment dismissing the action and certified that any appeal would not be taken in good faith, so fee-free status was denied for purposes of an appeal.