Date: Aug 7, 2026

Injury-in-Fact Standing Makes “Shareholder” Status Under Minn. Stat. § 302A.751 a Merits Issue Subject to Forfeiture (Not a Jurisdictional Standing Bar)

1. Introduction

This Minnesota Supreme Court decision arises from a long-running intra-family dispute over the 2017 sale and reorganization of Upsher-Smith Laboratories, Inc. (USL), a closely held Minnesota pharmaceutical company, and the creation of ACOVA, Inc. to hold the non-generic assets. Appellant Serene Warren held her economic interests through multiple trusts and was a beneficial owner of shares; her father and brother (the Evenstad respondents) were also beneficial owners. Warren sued ACOVA, the Evenstad respondents, and trustee Howard J. Rubin, asserting multiple theories, including a request for equitable relief under Minn. Stat. § 302A.751, which authorizes relief “[i]n an action by a shareholder” for unfairly prejudicial conduct in closely held corporations.

After a 16-day bench trial and while the case was under advisement, respondents—relying on the then-new nonprecedential court of appeals decision Demskie v. U.S. Bank National Ass'n, No. A22-0777, 2022 WL 17751473 (Minn. App. Dec. 19, 2022)—argued that Warren lacked “statutory standing” because she was not a “shareholder” (registered owner) but only a beneficial owner. The court of appeals accepted that framing and reversed the § 302A.751 relief for lack of standing. The Supreme Court granted review to decide (i) whether a beneficial owner can sue under § 302A.751, and (ii) whether the “statutory standing” issue is waivable/forfeitable.

2. Summary of the Opinion

Holding 1: Because Warren had injury-in-fact standing, whether she qualified as a “shareholder” for purposes of Minn. Stat. § 302A.751 did not implicate standing or subject-matter jurisdiction; it instead concerned the legal sufficiency of her § 302A.751 claims.
Holding 2: Respondents forfeited any argument that Warren failed to state claims upon which relief can be granted by raising the “not a shareholder” theory extremely late and in a manner inconsistent with their prior litigation conduct.
Disposition: The Supreme Court reversed the court of appeals and remanded for further proceedings. The Court did not reach the substantive question whether a beneficial owner may initiate a § 302A.751 action.

3. Analysis

A. Precedents Cited

1) Minnesota standing doctrine and jurisdiction

The court reaffirmed that standing is “an essential element of a court’s jurisdiction” and is not waivable/forfeitable, citing Glaze v. State, 909 N.W.2d 322 and the often-quoted statement in State by McClure v. Sports & Health Club, Inc., 370 N.W.2d 844 that standing may be raised at any time. It reviewed injury-in-fact standing requirements using Lorix v. Crompton Corp., 736 N.W.2d 619, and emphasized concreteness and particularization with Minn. Sands, LLC v. County of Winona, 940 N.W.2d 183 and In re Sandy Pappas Senate Comm., 488 N.W.2d 795, among others (e.g., Webb Golden Valley, LLC v. State, 865 N.W.2d 689).

The court also highlighted Minnesota’s prudential standing framework (not bound by Article III limits), referencing Snyder's Drug Stores, Inc. v. Minn. State Bd. of Pharmacy, 221 N.W.2d 162 and federal observations that state courts are not constrained by Article III (e.g., N.Y. State Club Ass'n v. City of New York, 487 U.S. 1; ASARCO Inc. v. Kadish, 490 U.S. 605).

2) “Statutory standing” as a merits (cause-of-action) question

The centerpiece precedent for reframing “statutory standing” was the U.S. Supreme Court’s Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, quoted for the proposition that the absence of a statutory cause of action “does not implicate subject-matter jurisdiction.” The court also relied on federal appellate cases consistent with Lexmark: CGM, LLC v. BellSouth Telecomms., Inc., 664 F.3d 46 and Roberts v. Hamer, 655 F.3d 578.

Within Minnesota law, the court drew on State Board of Medical Examiners v. Olson, 206 N.W.2d 12 (quoting Bell v. Hood, 327 U.S. 678) for the principle that failure to state a proper cause of action is a merits determination, not a jurisdictional dismissal. It also pointed to Krueger v. Zeman Constr. Co., 781 N.W.2d 858 and Marine Credit Union v. Detlefson-Delano, 830 N.W.2d 859 as Minnesota examples where statutory eligibility limits were treated as questions of claim sufficiency rather than jurisdiction once injury-in-fact exists.

The court acknowledged older Minnesota cases where “standing” language blurred the line between jurisdictional standing and cause-of-action limits—most notably State by McClure v. Sports & Health Club, Inc. and In re Est. of Jotham, 722 N.W.2d 447—but declined to define the “precise contours” beyond what was necessary here.

3) Forfeiture through litigation conduct

To conclude forfeiture, the court invoked procedural principles and precedent emphasizing orderly litigation: McCullough & Sons, Inc. v. City of Vadnais Heights, 883 N.W.2d 580 (purpose of forfeiture), Carlton v. State, 816 N.W.2d 590 (non-jurisdictional defenses can be waived), and the U.S. Supreme Court’s Arbaugh v. Y & H Corp., 546 U.S. 500 (statutory adequacy requirements are typically non-jurisdictional and cannot be raised after judgment).

Most importantly, the court relied on Patterson v. Wu Fam. Corp., 608 N.W.2d 863, which held that Rule 12’s timing provisions “set only the outer limits of waiver” (quoting Yeldell v. Tutt, 913 F.2d 533) and that a defense can be lost by inconsistent conduct even if nominally preserved. It also cited W.H. Barber Co. v. McNamara-Vivant Contracting Co., 293 N.W.2d 351 (inconsistency with pleadings and trial position), Miss. Valley Dev. Corp. v. Colonial Enters., Inc., 217 N.W.2d 760 (invoking court power can waive inconsistent defenses), Bradford-White Corp. v. Ernst & Whinney, 872 F.2d 1153 (unfairness of post-trial new defense), and Thiele v. Stich, 425 N.W.2d 580 (cannot seek appellate review under a new theory).

4) The role of Demskie in this litigation

Respondents’ late argument was triggered by Demskie v. U.S. Bank National Ass'n, No. A22-0777, 2022 WL 17751473 (Minn. App. Dec. 19, 2022), where the court of appeals affirmed dismissal on pleadings for failure to state a claim because beneficial owners were not “shareholders” under the Act. The Supreme Court noted that Demskie did not address standing and that, on review, the Supreme Court had “affirmed ... by an equally divided court” on that issue (Demskie v. U.S. Bank Nat'l Ass'n, 7 N.W.3d 382), leaving the substantive question unsettled. That unsettled backdrop made respondents’ reframing of Demskie as jurisdictional “standing” both consequential and, ultimately, unsuccessful.

B. Legal Reasoning

1) Injury-in-fact standing existed, so the dispute was not justiciability/jurisdiction

The court anchored its analysis in a clean sequencing: (i) determine whether Warren had standing in the jurisdictional sense; and, if yes, (ii) treat statutory “who may sue” limits as claim elements.

Warren had injury-in-fact standing because she alleged (and the district court found) economic harm to trusts of which she was a beneficiary—an “equitable interest” recognized in United States v. O'Shaughnessy, 517 N.W.2d 574—and economic loss is a classic injury in fact (citing Thompson v. St. Anthony Leased Hous. Assocs. II, LP, 979 N.W.2d 1).

With standing satisfied, the “shareholder” limitation in Minn. Stat. § 302A.751, subd. 1(b)(3) became an issue of whether Warren fit within the statute’s authorized plaintiff class—i.e., whether she stated and could prove a viable statutory claim—not whether the court had power to hear the dispute.

2) Recharacterizing “statutory standing” as “failure to state a claim”

The court expressly treated “shareholder” status as an element of the § 302A.751 cause of action (“just like every other required element”), aligning with Lexmark Int'l, Inc. v. Static Control Components, Inc. and the Minnesota principle from State Board of Medical Examiners v. Olson that cause-of-action defects are merits issues.

This is the opinion’s core doctrinal move: when a plaintiff already has injury-in-fact standing, a statutory limitation on who may sue generally does not become a jurisdictional standing defect; it becomes a Rule 12.02(e)-type problem (legal insufficiency) and is therefore subject to ordinary rules of preservation and forfeiture.

3) Forfeiture applied on this record

The court’s forfeiture conclusion rested on a “unique confluence of circumstances,” emphasizing:

Inconsistency with respondents’ own litigation positions: ACOVA’s pleadings acknowledged beneficial ownership without claiming that it barred § 302A.751 relief, and ACOVA’s counterclaim affirmatively alleged Warren was a “shareholder.” The Evenstad respondents themselves held shares via trusts yet treated themselves as shareholders for § 302A.751 and contractual purposes.
Extraordinary delay: the “not a shareholder” theory arrived years into litigation, after extensive discovery and a 16-day trial, while the matter was under advisement—exactly the kind of sandbagging disfavored by Patterson v. Wu Fam. Corp. and Bradford-White Corp. v. Ernst & Whinney.
Misframing the issue as jurisdictional standing: despite Demskie being a failure-to-state-a-claim decision, respondents pressed only a standing/jurisdiction theory in the district court, implicating Thiele v. Stich concerns about shifting theories.

Because respondents forfeited the argument, the Supreme Court declined to decide whether § 302A.751 permits a beneficial owner to initiate the action—leaving that substantive statutory question for another day.

C. Impact

1) A procedural precedent with broad reach

The decision’s practical holding is procedural but potentially far-reaching: Minnesota courts should not treat many “statutory standing” objections as jurisdictional when injury-in-fact standing exists. Litigants should expect “who may sue” requirements in statutes (like “shareholder,” “aggrieved,” or other plaintiff-class terms) to be litigated as merits/pleading issues—subject to forfeiture if raised too late or inconsistently.

2) Litigation strategy in closely held corporation disputes

In § 302A.751 cases, defendants now face substantial risk if they litigate through trial without timely challenging whether the plaintiff is a “shareholder” as defined by Minn. Stat. § 302A.011, subd. 29. The opinion pressures early motion practice (Rule 12.02(e) or summary judgment) and discourages post-trial “jurisdictional” reframing.

3) Substantive question remains open

The Court did not decide whether a beneficial owner can initiate a § 302A.751 action. Given Demskie v. U.S. Bank Nat'l Ass'n, 7 N.W.3d 382 (equally divided affirmance on that aspect), uncertainty remains. Future litigants will likely litigate that issue directly—this time with clearer preservation expectations.

4. Complex Concepts Simplified

Standing (jurisdictional/justiciability sense): Whether the plaintiff has enough of a personal stake (a real, particular harm) for the court to hear the case. In Minnesota, this is a prudential doctrine, but it is still treated as jurisdictional in the sense that it cannot be waived or forfeited.
Injury-in-fact standing: Standing based on actual harm—here, alleged and found economic harm to Warren’s beneficial interests in trusts.
“Statutory standing”: A common label for “does the statute authorize this plaintiff to sue?” The Court held that when injury-in-fact standing exists, this is typically not “standing” at all; it is a merits question about whether the plaintiff has stated a claim (a valid cause of action) under the statute.
Failure to state a claim (Rule 12.02(e)): A defense arguing that—even accepting the plaintiff’s factual allegations—the law does not provide a remedy for that plaintiff under that statute. This defense can be forfeited if raised too late or inconsistently.
Waiver vs. forfeiture: Waiver is intentional relinquishment; forfeiture is failure to timely assert. The Court treated respondents’ conduct as forfeiture.
Shareholder vs. beneficial owner (Chapter 302A): A “shareholder” is the person registered on the corporation’s books (Minn. Stat. § 302A.011, subd. 29). A “beneficial owner” can hold voting/disposition power through arrangements like trusts (Minn. Stat. § 302A.011, subd. 41(a)). Whether beneficial owners count as “shareholders” under § 302A.751 remains undecided here.

5. Conclusion

The Minnesota Supreme Court established a clear procedural rule: when a plaintiff has injury-in-fact standing, a statutory limitation such as “in an action by a shareholder” in Minn. Stat. § 302A.751 does not create a jurisdictional standing defect; it is an element going to the legal sufficiency of the claim. Because such merits defenses are forfeitable, respondents could not recast a late-breaking, post-trial argument as nonwaivable “standing” to undo years of litigation. The decision meaningfully reshapes how Minnesota litigants should raise and preserve “statutory standing” arguments—early, explicitly, and as merits defenses—while leaving the underlying beneficial-owner question under § 302A.751 for future cases.