Commercial Litigation and Arbitration

MTD for Lack of Standing Is under 12(b)(1) (No Subject Matter Jurisdiction), Not 12(b)(6) — Dismissal Is Not on Merits and Is Presumptively without Prejudice — Complaint Must Allege Non-Conclusory Facts Showing Jurisdiction

Allstate Ins. Co. v. Global Med. Billing, Inc., 2013 U.S. App. LEXIS 7277 (6th Cir. April 8, 2013):

We review a dismissal for lack of standing de novo. McGlone v. Bell, 681 F.3d 718, 728 (6th Cir. 2012) (citing Prime Media, Inc. v. City of Brentwood, 485 F.3d 343, 348 (6th Cir. 2007)). Although the parties and the district court considered the issue of standing as a failure to state a claim under Rule 12(b)(6), it is more properly considered an attack on the court's subject-matter jurisdiction under Rule 12(b)(1). Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 795 n.2 (5th Cir. 2011); see also Murray v. U.S. Dep't of Treasury, 681 F.3d 744, 748 (6th Cir. 2012) (noting that a party must have standing to invoke the subject-matter jurisdiction of the federal courts). The distinction is important because a dismissal for failure to state a claim is considered an adjudication on the merits with full preclusive effect in later litigation, while a dismissal for lack of subject-matter jurisdiction does not operate as a merits adjudication and is presumably granted without prejudice. See Pratt v. Ventas, Inc., 365 F.3d 514, 523 (6th Cir. 2004).

As with a motion under Rule 12(b)(6), a facial challenge to subject-matter jurisdiction under Rule 12(b)(1) requires the district court to accept all the factual allegations in the complaint as true. Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430, 440 (6th Cir. 2012). To adequately allege jurisdiction, the complaint "must contain non-conclusory facts which, if true, establish that the district court had jurisdiction over the dispute." Id.

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