ERIC J. LINDSEY, DBA E-Jays Panache Images, E-Jays Panache Images v. STARWOOD HOTELS & RESORTS WORLDWIDE INC., DBA Westin & Westin Hotels

This disposition is not appropriate for publication and is not precedent*
except as provided by 9th Cir. R. 36-3.
The Honorable Richard D. Cudahy, Senior United States Circuit**
Judge for the Seventh Circuit, sitting by designation.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ERIC J. LINDSEY, DBA E-Jays Panache
Images, E-Jays Panache Images,
Plaintiff - Appellant,
v.
STARWOOD HOTELS & RESORTS
WORLDWIDE INC., DBA Westin &
Westin Hotels,
Defendant - Appellee.
No. 08-56147
D.C. No. 2:02-cv-03822-GAF-
FMO
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding
Argued and Submitted October 5, 2010
Pasadena, California
Before: CUDAHY, Senior Circuit Judge and WARDLAW and W.**
FLETCHER, Circuit Judges,.
FILED
NOV 02 2010
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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2
Eric Lindsey appeals the district court’s order dismissing for lack of
standing his claims alleging violations of 42 U.S.C. § 1981 and California’s Unruh
Civil Rights Act, Cal. Civ. Code § 51, and breach of contract. We have jurisdiction
pursuant to 28 U.S.C. § 1291. We affirm in part, reverse in part, and remand.
The district court correctly determined that Panache Images was a
partnership as a matter of California law. See Cal. Corp. Code § 16202(a).
Panache’s members adopted bylaws, divided job responsibilities, exercised joint
control of the business through a board of directors, and made common financial
contributions to the enterprise. Lindsey signed the contract with Westin, but did so
in his capacity as “director” on behalf of Panache; the only parties to the contract
were Westin and Panache. The district court thus correctly concluded that Lindsey,
who brought this action in his individual capacity, could not assert contractual
claims belonging to the partnership. See Cal. Corp. Code §§ 16201, 16203,
16401(g); Lewis v. Hayes, 177 Cal. 587, 589-90 (1918); Carnation Co. v. Olivet
Egg Ranch, 189 Cal. App. 3d 809, 821 n.19 (1986). Cf. Domino’s Pizza, Inc. v.
McDonald, 546 U.S. 470, 479-80 (2006) (“Section 1981 plaintiffs must identify
injuries flowing from a racially motivated breach of their own contractual
relationship, not of someone else’s.”).

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3
The district court erred, however, by treating Lindsey’s lack of standing as a
defect of Article III standing that deprived the court of subject matter jurisdiction.
Whether a plaintiff possesses legally enforceable rights under a contract is a
question on the merits rather than a question of constitutional standing. Such a
plaintiff fails to state a claim on which relief can be granted. Harris v. Amgen, Inc.,
573 F.3d 728, 732 n.3 (9th Cir. 2009). See also Domino’s Pizza, Inc., 546 U.S. at
479 (“[W]e hold that a plaintiff cannot state a claim under § 1981 unless he has . . .
rights under the . . . contract.” (emphasis added)). Failure to state a claim is a defect
that does not affect a court’s jurisdiction under Article III. Steel Co. v. Citizens for
a Better Env’t, 523 U.S. 83, 89 (1998). We therefore construe Starwood’s motion
to dismiss for lack of standing as a motion to dismiss for failure to state a claim,
Fed. R. Civ. P. 12(b)(6), which the district court treated as a motion for summary
judgment by considering matters outside the pleadings. Fed. R. Civ. P. 12(d). The
district court’s erroneous conclusion that it lacked subject matter jurisdiction does
not affect the disposition of Starwood’s motion, so construed. We may affirm on
any ground supported by the record. McCormick v. Adams, No. 09-15546, 2010
U.S. App. LEXIS 18452, at *10 (9th Cir. Sept. 3, 2010). As we explain above, the
record provides an ample basis for summary judgment in favor of Starwood on
contractual claims brought by Lindsey in his individual capacity.

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4
The district court relied solely on its mistaken Article III analysis to deny
Lindsey’s motion to substitute Panache as plaintiff. Following Davis v. Yageo
Corp., 481 F.3d 661, 678 (9th Cir. 2007), the court reasoned that Lindsey could not
cure his lack of standing by invoking Fed. R. Civ. P. 17(a)(3). Davis, like the other
substitution cases cited by the court, involved a plaintiff who lacked Article III
standing because it had not suffered injury in fact. See 481 F.3d at 675. See also,
e.g., Zurich Ins. Co. v. Logitrans, Inc., 297 F.3d 528, 531 (6th Cir. 2002). Rule 17
is a proper procedural device to cure the failure to state a claim. The district court
was free to consider Lindsey’s motion to substitute Panache as plaintiff – or to
allow amendment of Lindsey’s complaint, see Fed. R. Civ. P. 15(a)(2) – free from
any perceived jurisdictional bar. We therefore reverse the denial of Lindsey’s Rule
17 motion and remand so that the district court may rule on this motion in the first
instance.
AFFIRMED IN PART, REVERSED IN PART, REMANDED. Each
side to bear its own costs.

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