“Standing Without a Cause?” – Sixth Circuit Re-Affirms the Firewall between Article III Standing and State-Law Causes of Action
Comprehensive Commentary on Stewart v. Martin, Nos. 24-3648/3708 (6th Cir. 2025)

1. Introduction

Stewart v. Martin is a quintessential “family feud” turned federal litigation. Two grandchildren (Daniel Stewart and Rachel Kosoff) accuse their uncle (David Martin, physician-turned-trustee) of siphoning millions from their late grandfather’s revocable trust. After prevailing at trial, they suddenly saw their $2.086 million judgment erased when the district court declared we never had jurisdiction because Ohio law gave you no right to sue.

The Sixth Circuit—speaking through Judge Thapar—restores the judgment and, more importantly, crystallises a doctrinal line: the existence of a state-law cause of action is a merits inquiry; it does not bear on Article III standing, particularly in diversity cases. The panel further cabins the “wholly insubstantial and frivolous” exception (derived from Bell v. Hood and Steel Co.) to federal-question jurisdiction, cautioning courts not to use it to blend merits and standing analyses.

A subsidiary issue—whether the plaintiffs needed expert testimony to prove damages—was remanded, but the standing/subject-matter-jurisdiction pronouncement is new binding precedent in the Sixth Circuit and a persuasive datum nationwide.

2. Summary of the Judgment

• Article III Standing: Plaintiffs suffered a concrete monetary loss traceable to and redressable by defendant; therefore they have standing.
• Cause-of-Action v. Jurisdiction: Even if Ohio’s trust law ultimately denies a beneficiary of a revocable trust a breach-of-duty claim, that merits defect does not defeat federal jurisdiction.
• Steel Co. “wholly insubstantial” doctrine: Applies only to determine whether a pleading raises a legitimate federal question under 28 U.S.C. §1331. It does not transmogrify a weak state-law claim in diversity into a standing failure.
• Protective Cross-Appeal: Court allows trustee’s conditional appeal on expert testimony but remands for the district court to resolve his Rule 50(b) motion first.
• Outcome: District court’s Rule 60(b)(4) vacatur is itself vacated; original judgment reinstated; case remanded for unresolved post-trial motions.

3. Detailed Analysis

3.1 Precedents Cited and Their Influence

• Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)
  Provides the canonical three-part standing test (injury-in-fact, causation, redressability) applied almost mechanical­ly to find standing here.
• Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998)
  Teaches that the absence of a statutory cause of action is merits-based, not jurisdictional; however, it carves out the “wholly insubstantial and frivolous” exception for federal-question jurisdiction. Stewart narrows that carve-out further.
• Lexmark Int'l v. Static Control Components, 572 U.S. 118 (2014)
  Emphasises the discrete elements of standing versus statutory zone-of-interests. Stewart quotes Lexmark to reinforce that Article III does not ask whether a cause of action exists.
• CHKRS, LLC v. City of Dublin, 984 F.3d 483 (6th Cir. 2021) & Charlton-Perkins v. Univ. of Cincinnati, 35 F.4th 1053 (6th Cir. 2022)
  Prior Sixth Circuit cases warning against conflating merits with jurisdiction. Stewart fortifies and elevates their logic to precedential status.
• Trust-Law Authority: Restatement (Third) of Trusts §74; Ohio Rev. Code §5806.03 (UTC §603); both state that trustees of revocable trusts owe duties exclusively to the settlor. These sources undergird (but do not resolve) the merits debate.

3.2 The Court’s Legal Reasoning Step-by-Step

1. Identify Injury – Loss of $2.086 million is a paradigmatic economic injury.
2. Traceability & Redressability – Money was distributed by David, can be repaid by David.
3. Disaggregate Merits – Whether Ohio allows the suit is a Substantive question, not a Jurisdictional one. Plaintiffs may lose on the merits yet stand in court.
4. Cabin the “Wholly Insubstantial” Route – That safety-valve expels truly bizarre, patently irrational claims; here, a standard breach-of-trust action—correct or not—is hardly frivolous.
5. Preserve Judicial Economy – By focusing solely on standing, the panel leaves the tricky question of Ohio trust beneficiaries’ rights for another day (and perhaps state court).

3.3 Likely Impact on Future Litigation

• Jurisdictional Clarity in Diversity Actions – Litigants can no longer boot a case from federal court merely by arguing that state law ultimately affords no remedy; motions under Rules 12(b)(1) or 60(b)(4) premised on that conflation should fail in the Sixth Circuit.
• Restrained Use of “Frivolous Claim” Dismissals – Stewart cautions district courts not to stretch Bell/Steel Co. to standing questions unless a claim is obviously nonsensical.
• Estate & Trust Practice – While the opinion ducks the final merits issue, its dicta reinforce that in a revocable-trust context beneficiaries have limited rights before the settlor’s death. Practitioners should draft explicit instructions if they want immediate enforceable duties to beneficiaries.
• Procedure: Protective Cross-Appeals – The panel endorses the practice, encouraging lawyers to preserve alternative arguments without the risk of waiver.
• Damages Proof in Fiduciary Litigation – On remand, the district court must decide whether Ohio law requires expert testimony to calculate post-distribution investment returns. The answer may influence future Ohio breach-of-trust trials.

4. Complex Concepts Simplified

Article III Standing

The U.S. Constitution only lets federal courts hear actual “cases or controversies.” A plaintiff therefore must show (1) real harm, (2) caused by the defendant, (3) fixable by the court.

Cause of Action

A substantive legal right created by statute, common law, or contract that allows a plaintiff to sue and obtain a remedy.

Revocable Trust

A living trust the settlor can modify or cancel during life. Because the settlor retains control, beneficiaries generally have no enforceable rights until the settlor dies.

Uniform Trust Code §603 / Ohio R.C. §5806.03

States that while a trust is revocable, the trustee’s duties are owed exclusively to the settlor.

“Wholly Insubstantial and Frivolous” Doctrine

A narrow gatekeeping device: if a federal claim is so patently meritless that it cannot raise a genuine federal question, the court may dismiss for lack of subject-matter jurisdiction. Stewart confines its use to § 1331 cases.

Protective Cross-Appeal

An appeal filed by a prevailing party to challenge contingent issues, activated only if the main appeal disturbs the judgment.

5. Conclusion

Stewart v. Martin provides a doctrinally crisp reminder that standing is about “who” can sue, whereas a cause of action is about “whether” the law supplies relief. By restoring the firewall between those inquiries—and by narrowing the misuse of the “wholly frivolous” escape hatch—the Sixth Circuit strengthens predictable jurisdictional practice in diversity cases. For estate planners, the opinion is an oblique warning: beneficiaries of revocable trusts may find themselves remediless if fiduciary obligations are not clearly imposed. For litigators, it underscores the strategic utility of protective cross-appeals and the potential need for expert testimony in complicated trust-accounting disputes. The judgment, therefore, is significant not only for its result but for its principled elaboration of federal jurisdictional boundaries.