                                                        United States Court of Appeals
                                                                 Fifth Circuit
                                                              F I L E D
                       REVISED OCTOBER 13, 2004
                IN THE UNITED STATES COURT OF APPEALS       September 17, 2004
                         FOR THE FIFTH CIRCUIT
                                                          Charles R. Fulbruge III
                                                                  Clerk

                            No. 04-20064
                          Summary Calendar



     MANZOOR A MEMON; ET AL

                      Plaintiffs

     MEMON CORPORATION INC

                      Plaintiff - Appellant

     v.

     ALLIED DOMECQ QSR; ET AL

                      Defendants

     BASKIN-ROBBINS INCORPORATED; BASKIN-ROBBINS USA CO

                      Defendants - Appellees



            Appeal from the United States District Court
                 for the Southern District of Texas
                          No. H-03-CV-1944


Before KING, Chief Judge, and JOLLY and CLEMENT, Circuit Judges.

PER CURIAM:

     Plaintiff-Appellant Memon Corporation Inc. (“Memon Corp.”)

appeals from the district court’s grant of Defendants-Appellees’

motion to dismiss and the district court’s denial of Memon

Corp.’s motion for new trial or relief from judgment under Rule

60(b).    For the following reasons, we REVERSE the district
                           No. 04-20064
                                -2-
court’s order insofar as it dismissed Memon Corp.’s suit and

REMAND for further proceedings not inconsistent with this

opinion.

                          I. BACKGROUND

     On April 24, 2003, Manzoor Memon, an officer of Memon Corp.,

filed a pro se complaint in Texas state court against Allied

Domecq QSR.1   The complaint raised a number of claims arising out

of Memon Corp.’s operation of a Baskin-Robbins ice cream

franchise, including breach of the franchise agreement,

conspiracy, fraud, and breach of the duty of good faith and fair

dealing.   Manzoor Memon (“Mr. Memon”) is not a licensed attorney,

but he nevertheless brought the suit on behalf of himself, his

brother and sister-in-law (Aamir H. Memon and Sanam A. Memon),

and the family’s corporation (Memon Corp.).

     Baskin-Robbins timely removed the case to federal district

court.   On June 11, 2003, Baskin-Robbins moved under Rule

12(b)(6) to dismiss Mr. Memon’s claims for lack of standing

because he was not a party to the franchise agreement and to

dismiss his siblings’ and Memon Corp.’s claims on the grounds

that they were improperly represented by Mr. Memon, a non-lawyer.




     1
        On June 11, 2003, Allied Domecq filed a Rule 21 motion to
substitute as defendants Baskin-Robbins Incorporated and Baskin-
Robbins USA, Co. (collectively “Baskin-Robbins”). The district
court granted the motion on October 30, 2003. For the purpose of
convenience, we therefore refer to the defendants below as
Baskin-Robbins.
                             No. 04-20064
                                  -3-
     On October 15, 2003, without having filed a response to

defendant’s motion to dismiss, Mr. Memon moved the district court

to dismiss the case without prejudice.      At an October 22

scheduling conference, Mr. Memon requested that the judge rule on

his motion to dismiss without prejudice.      When asked by the

district judge why he so moved, Mr. Memon replied that he lacked

funds to hire an attorney.    The judge promptly denied Mr. Memon’s

motion orally and set the case for trial.      In response to the

ruling, Mr. Memon asked the judge, “Can I get an attorney?”       The

judge replied, “I can’t practice law so I can’t advise you on

that.”

     Eight days later, on October 30, 2003, the district court

granted Baskin-Robbins’s 12(b)(6) motion, finding that Mr. Memon

lacked standing and that the other named plaintiffs, including

Memon Corp., were impermissibly represented by a non-lawyer.        The

district judge had never ordered Memon Corp. to retain an

attorney nor had he admonished the plaintiffs that Memon Corp.

could not proceed without an attorney.

     Soon after the dismissal, Memon Corp. hired an attorney and

filed a motion for new trial or, alternatively, a motion for

relief from final judgment under Rule 60(b).      The district court

denied the motion.   Memon Corp., now represented by counsel,

appeals the grant of the motion to dismiss and the denial of the

motion for new trial or relief from judgment.2

     2
        Neither Mr. Memon nor his siblings appeal the district
court’s judgment dismissing their individual claims.
                          No. 04-20064
                               -4-
                         II. DISCUSSION

     We review dismissals under Rule 12(b)(6) de novo.   Gregson

v. Zurich Am. Ins. Co., 322 F.3d 883, 885 (5th Cir. 2003).

Further, this court accepts “all well-pleaded facts as true,

viewing them in the light most favorable to the plaintiff.”

Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999).   "Thus,

the court should not dismiss [a] claim unless the plaintiff would

not be entitled to relief under any set of facts or any possible

theory that [it] could prove consistent with the allegations in

the complaint.”   Id.

     Memon Corp. asserts that de novo review is inappropriate,

arguing that Rule 12(b)(6) was not the proper procedural vehicle

through which to challenge its lack of legal representation.

Instead, Memon Corp. argues that this court should review the

motion to dismiss under the same abuse-of-discretion standard

under which we would review a Rule 41(b) involuntary dismissal.3

Memon Corp.’s objection is well taken, as no precedent exists for

dismissing under Rule 12(b)(6) on these grounds,4 and the


     3
        We affirm dismissals with prejudice under Rule 41(b)
“only upon a showing of a clear record of delay or contumacious
conduct by the plaintiff” and “where lesser sanctions would not
serve the best interest of justice.” Dorsey v. Scott Wetzel
Serv., Inc., 84 F.3d 170, 171 (5th Cir. 1996) (per curiam)
(quoting Salinas v. Sun Oil Co., 819 F.2d 105, 106 (5th Cir.
1987)).
     4
        Memon Corp. correctly observes that most courts resolving
claims by unrepresented corporations do not identify the source
of their authority. See, e.g., K.M.A., Inc. v. Gen. Motors
Acceptance Corp. (In re K.M.A., Inc.), 652 F.2d 398, 399 (5th
Cir. 1981); Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1384-86
                           No. 04-20064
                                -5-
appropriate measure for a judge to take when confronted with an

unrepresented corporation is inherently discretionary.5    Noting

the lack of clarity surrounding the proper procedure (and the

corresponding standard of review), we find that we need not

decide the proper standard of review, as we would reverse the

district court under either standard.

     Memon Corp. does not deny the well-settled rule of law that

a corporation cannot appear in federal court unless represented

by a licensed attorney.   See, e.g., Rowland v. California Men’s

Colony, 506 U.S. 194, 202 (1993) (“the lower courts have

uniformly held that 28 U.S.C. § 1654 . . . does not allow

corporations, partnerships, or associations to appear in federal

court otherwise than by licensed counsel”); Southwest Express Co.



(11th Cir. 1985). Some courts have specified that Rule 41(b)
authorizes dismissal under such circumstances. E.g., Transportes
Aereos de Angola v. Ronair, Inc., 104 F.R.D. 482, 504-05 (D. Del.
1985). Those cases, however, involved instances in which the
litigant failed to comply with a court order to retain counsel or
a local rule requiring representation. See id.; see also FED. R.
CIV. P. 41(b) (“For failure of the plaintiff to prosecute or to
comply with these rules or any order of court, a defendant may
move for dismissal of an action or of any claim against the
defendant.”). Neither is the case here, making Rule 41(b)
inapplicable. As we discuss below, the only authority for
dismissing a corporation for failure to retain counsel, absent a
court order or local rule, appears to be based on a judicial
interpretation of 28 U.S.C. § 1654. See Rowland v. California
Men’s Colony, 506 U.S. 194, 202 (1993); Palazzo, 764 F.2d at
1384-86.
     5
        As explained below, the judge might, inter alia, admonish
the corporation that it cannot proceed without counsel, order the
corporation to retain counsel within a certain period of time
(the appropriate amount of time also being within the judge’s
discretion), or dismiss the case without prejudice and allow the
corporation to re-file.
                             No. 04-20064
                                  -6-
v. ICC, 670 F.2d 53, 55 (5th Cir. 1982).    Although 28 U.S.C.

§ 1654 authorizes individuals to appear in federal courts pro se,

the statute is silent regarding corporations.    The lack of

authorization in § 1654 has been interpreted as barring

corporations from appearing in federal court without an attorney.

Rowland, 506 U.S. at 202.

     Memon Corp. argues, however, that the district court erred

in dismissing its claims with prejudice.6   We agree.   This court

has consistently recognized “that dismissal with prejudice is an

extreme sanction that deprives a litigant of the opportunity to

pursue his claim.”   Callip v. Harris County Child Welfare Dep’t,

757 F.2d 1513, 1519 (5th Cir. 1985) (internal quotation marks

omitted) (quoting McGowan v. Faulkner Concrete Pipe Co., 659 F.2d

554, 556 (5th Cir. 1981)).    Dismissal with prejudice was too

extreme a sanction in this instance.

     In virtually every case in which a district court dismissed

the claims (or struck the pleadings) of a corporation that

appeared without counsel, the court expressly warned the


     6
        Although the dismissal order in this case did not specify
whether it was with or without prejudice, the order constituted a
dismissal with prejudice. See Hall v. Tower Land & Inv. Co., 512
F.2d 481, 483 (5th Cir. 1975) (noting that the grant of a motion
to dismiss for failure to state a claim constitutes a judgment on
the merits, even if it fails to indicate that it is a dismissal
with prejudice); FED. R. CIV. P. 41(b) (“Unless the court in its
order for dismissal otherwise specifies, a dismissal under this
subdivision and any dismissal not provided for in this rule,
other than a dismissal for lack of jurisdiction, for improper
venue, or for failure to join a party under Rule 19, operates as
an adjudication upon the merits.” (emphasis added)).
                           No. 04-20064
                                -7-
corporation that it must retain counsel or formally ordered it to

do so before dismissing the case.    See, e.g., Donovan v. Road

Rangers Country Junction, Inc., 736 F.2d 1004, 1005 (5th Cir.

1984) (per curiam); K.M.A., Inc., 652 F.2d at 399; D-Beam Ltd.

P’ship v. Roller Derby Skates, Inc., 366 F.3d 972, 973 (9th Cir.

2004).   Other courts have dismissed such cases without prejudice,

allowing the corporation to re-file after acquiring a lawyer.

See, e.g., Capital Group, Inc. v. Gaston & Snow, 768 F. Supp.

264, 265-66 (E.D. Wis. 1991).

     The district judge never admonished Memon Corp. that it was

required to hire an attorney (or ordered it to do so) before he

dismissed the case with prejudice.   We do not agree with Baskin-

Robbins’s assertion that the following dialogue during the

October 22 scheduling conference constituted sufficient warning

from the court:

     The Court: [Y]ou also have a motion to dismiss; is
     that correct?
     Counsel for Baskin-Robbins: That’s correct, Your
     Honor.
     The Court: All right. We’re working on that. All
     right. If you know what I mean. All right?
     Counsel for Baskin-Robbins: Okay.
     The Court: Now, we’re just going to set a scheduling
     order today. All right? It may or may not go away,
     but right now we’re here to set a scheduling order.
     You understand Mr. Memon?
     Mr. Memon: Yes, sir.

We cannot accept that the judge’s statement that “[i]t may or may

not go away” in the midst of this exchange adequately admonished

Mr. Memon that the court would soon dismiss the case with

prejudice unless Memon Corp. retained counsel.
                          No. 04-20064
                               -8-
     Although Baskin-Robbins’s motion to dismiss had been pending

for nearly four months, Mr. Memon apparently believed that his

own motion to dismiss without prejudice obviated the need to

respond to Baskin-Robbins’s motion.7   We do not see how Memon

Corp.’s failure to respond to the motion to dismiss would justify

dismissal with prejudice in this instance.    See Rogers v. Kroger

Co., 669 F.2d 317, 320 (5th Cir. 1982) (reversing district

court’s dismissal with prejudice under Rule 41(b) for failure to

prosecute; noting that dismissal with prejudice is “reserved for

the most egregious of cases”).

     Moreover, we find the colloquy between the district judge

and Mr. Memon especially important.    After the district court

denied Mr. Memon’s motion to dismiss without prejudice, the

following exchange occurred:

     The Court: At this time we stand adjourned. The case
     is still going on, sir. Okay. You understand that?
     Mr. Memon: Can I get an attorney?
     The Court: What?
     Mr. Memon: Am I allowed to--
     The Court: I can’t practice law so I can’t advise you
     on that. All right. Off the record.

This conversation casts sufficient doubt on Baskin-Robbins’s

contention that Mr. Memon knew that he needed either to hire a

     7
         We note that this belief was not unreasonable, since
Baskin-Robbins had not filed an answer or a motion for summary
judgment. See FED. R. CIV. P. 41(a) (“[A]n action may be
dismissed by the plaintiff without order of court . . . by filing
a notice of dismissal at any time before service by the adverse
party of an answer or of a motion for summary judgment, whichever
first occurs . . . .”); 9 CHARLES ALAN WRIGHT & ARTHUR R. MILLER,
FEDERAL PRACTICE AND PROCEDURE § 2363, at 259 (2d ed. 1995) (“[A]
motion to dismiss under Rule 12 does not terminate the right of
dismissal by notice.”).
                             No. 04-20064
                                  -9-
lawyer or face dismissal with prejudice.      Eight days later,

without providing any warning to Memon Corp., the district court

dismissed with prejudice.    Under these particular facts, this was

error.

     Finally, because we have determined that the district court

erred in dismissing Memon Corp.’s claims with prejudice, we need

not reach the question of Memon Corp.’s motion for new trial or

relief from judgment pursuant to Rule 60(b).

                            III. CONCLUSION

     For the foregoing reasons, we REVERSE the judgment of the

district court insofar as it dismissed Memon Corp.’s case with

prejudice and REMAND for further proceedings not inconsistent

with this opinion.
