The District Court May Consider Evidence Outside The Complaint In Resolving A Factual Challenge To Standing
APEX DIGITAL, INC. V. SEARS, ROEBUCK & COMPANY (July 16, 2009)
Apex brought a breach of contract claim against Sears, alleging Sears owed it in excess of $80 million. Sears moved to dismiss for a lack of subject matter jurisdiction. It asserted that Apex lacked standing because it had assigned away its rights in the Sears receivables. Sears attached to its motion a letter from Apex attesting to that fact. When Apex offered no response, the district court granted Sears' motion. Apex appeals.
In their opinion, Judges Posner, Ripple and Kanne affirmed. The plaintiff, said the Court, bears the burden of establishing standing, an essential component of any case. The Court agreed with Apex that a sufficient standing allegation is enough to overcome a facial challenge. With respect to a factual challenge, however, where the challenger accepts the sufficiency but challenges the truth of the allegation, the district court is permitted to look beyond the complaint and view any evidence submitted. Because Apex failed to proffer any evidence to rebut its own statement in the letter offered by Sears, the district court did not err in dismissing the complaint.
