Full Opinion

United States Court of Appeals For the Eighth Circuit ___________________________ No. 25-3085 ___________________________ Parker Stewart; imINDY, LLC, and its successors and assigns, doing business as TeeLaunch Plaintiffs - Appellants v. Plains Commerce Bank; Christopher Hamze, Individually and as Member of imINDY, LLC, Member of TeeLaunch LB, Organizer & Registered Agent of FANTOM DTG, LLC & Organizer of INFINITE SUPPLY, LLC; Nicholas Hamze, Individually and as Organizer & Registered Agent of FYMCO, LLC, Organizer of FANTOM DTG, LLC and Organizer & Registered Agent of INFINITE SUPPLY, LLC; Ted Hamze; Christopher Marbus; FYMCO, LLC, and its successors and assigns; TeeLaunch, LB and its successors and assigns; Fantom DTG, LLC, and its successors and assigns; Infinite Supply, LLC, and its successors and assigns; District Photo, and its successors and assigns Defendants - Appellees ____________ Appeal from United States District Court for the District of South Dakota - Southern ____________ Submitted: June 11, 2026 Filed: November 13, 2026 ____________ Before LOKEN, GRUENDER, and KELLY, Circuit Judges. ____________ KELLY, Circuit Judge. Parker Stewart and his cousin, Christopher Hamze, founded imINDY d/b/a TeeLaunch (imINDY), a custom T-shirt company. Stewart brought fourteen counts against several defendants connected to imINDY (collectively Defendants), including claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961–68, on his own behalf and on behalf of imINDY. The district court1 dismissed the action and awarded attorney fees. Stewart appeals, and we affirm. I. Stewart and Hamze2 established imINDY in 2012. They signed a Two Party Authorization Agreement (TPAA), which required that disbursements from imINDY’s bank account be authorized by both Stewart and Hamze. They also signed an Operating Agreement that entitled each to a 50% share in imINDY in exchange for $10,000. The Operating Agreement required that Hamze, as Chief Financial Officer, maintain accurate books for imINDY and open them for inspection by any Member at “all reasonable times[.]” In early 2017, Stewart began out-patient medical treatment. Stewart alleges that he and Hamze entered into a verbal agreement whereby Hamze would take on Stewart’s day-to-day managerial responsibilities in exchange for a bonus of 1% of net sales. Stewart further alleges that he was not consulted on any payments made from imINDY’s bank account during his leave of absence, in violation of his rights under the TPAA. He also alleges that Hamze refused to provide him with access to 1 The Honorable Roberto A. Lange, Chief Judge, United States District Court for the District of South Dakota. 2 Unless otherwise noted, we use “Hamze” to refer to Christopher Hamze only. -2- imINDY’s QuickBooks account, in violation of the requirements of the Operating Agreement. Facing declining sales and competition, imINDY’s business operations faltered. In March 2023, Hamze offered to purchase Stewart’s interest in imINDY for $225,000, and Stewart counteroffered at $500,000. At this time, Stewart alleges he only had access to imINDY’s books and records through a flash drive containing imINDY’s QuickBooks files. Stewart ultimately signed a Buyout Agreement in September 2023, selling his 50% share of imINDY and releasing all claims arising out of his ownership and employment by imINDY in exchange for $550,000. Stewart alleges that he discovered thousands of suspicious payments in the QuickBooks files days after the sale and that he would not have signed the Buyout Agreement had he been aware of these payments. In August 2024, imINDY was acquired by District Photo and dissolved the next day. In January 2025, Stewart initiated this action, bringing RICO claims both individually and on behalf of imINDY for alleged misconduct leading up to his sale of imINDY, in addition to state law claims and a request for declaratory relief. While Defendants’ motions to dismiss were pending, Stewart filed a motion for leave to file an amended complaint. The district court granted the motions to dismiss, dismissed the action without prejudice, and denied the motion for leave to amend as futile. The court denied Stewart’s motion for reconsideration and, in the same order, awarded attorney fees to Christopher and Nicholas Hamze based on an indemnification provision in the Buyout Agreement. Stewart appeals. II. We review the grant of the motions to dismiss de novo. H & Q Props., Inc. v. Doll, 793 F.3d 852, 855 (8th Cir. 2015). Here, the issues on appeal are whether the -3- district court properly dismissed Stewart’s RICO claims on behalf of imINDY and as an individual. A. The district court ruled that Stewart lacked capacity to bring a RICO claim on imINDY’s behalf. Federal Rule of Civil Procedure 17(b)(3) provides that the “[c]apacity to sue or to be sued is determined . . . by the law of the state where the court is located . . . .” Fed. R. Civ. P. 17(b)(3). South Dakota state law, in turn, authorizes Stewart to bring a derivative RICO action on imINDY’s behalf only if he is a member of imINDY throughout the action. See S.D. Codified Laws § 47-34A- 1103(a) (“[A] derivative action under § 47-34A-1102 may be maintained only by a person that is a member at the time the action is commenced and remains a member while the action continues.”). The district court found that Stewart was no longer a member of imINDY at the time he filed suit, and Stewart does not challenge this ruling on appeal. We therefore conclude that Stewart lacked legal capacity to bring a derivative RICO claim on imINDY’s behalf. Stewart suggests, nevertheless, that he has capacity to sue on behalf of imINDY because he is a real party in interest for the purposes of Federal Rule of Civil Procedure 17(a). But this argument conflates Stewart’s status as a real party in interest with his capacity to sue, when these are distinct legal inquiries that must be analyzed separately. See 6A Wright & Miller’s Federal Practice & Procedure § 1542 (3d ed. 2026) (articulating the distinction and explaining how one can be a real party in interest while lacking capacity to sue or vice versa); Lundquist v. Univ. of S.D. Sanford Sch. of Med., 705 F.3d 378, 379–80 (8th Cir. 2013). Whether Stewart is a real party in interest does not alter the district court’s ruling that he lacked legal capacity to bring the derivative claim. In short, Stewart has failed to identify reversible error with respect to his derivative RICO claim. -4- B. We turn next to whether Stewart adequately pled a RICO claim on his own behalf. “The generally recognized rule for determining whether a cause of action belongs to the corporation, rather than to an individual shareholder, is to ascertain whether ‘the injury to each stockholder is of the same character.’” Landstrom v. Shaver, 561 N.W.2d 1, 12 (S.D. 1997) (quoting Arent v. Distrib. Sci., Inc., 975 F.2d 1370, 1372 (8th Cir. 1992)). Or, stated differently, “under the general rule, for a shareholder to maintain an individual action, the shareholder must establish a special injury which is separate and distinct from that of other shareholders.” Id. (citation modified); see also Craig Outdoor Advert., Inc. v. Viacom Outdoor, Inc., 528 F.3d 1001, 1024 (8th Cir. 2008) (collecting cases). Stewart alleges several cognizable injuries in his complaint, but they all are derived from a diminution in imINDY’s value—necessarily a loss incurred by all shareholders—and thus are insufficient to enable Stewart to sue on his own behalf.3 Craig Outdoor, 528 F.3d at 1024 (“A shareholder generally may not sue on his own behalf—under [state] law or RICO—to recover the wrongful diminution in value of his stock or to recoup his share of money taken from the corporation; such claims must generally be pursued in a shareholders derivative action.”); Arent, 975 F.2d at 1374. For example, Stewart alleges that Defendants “unlawfully deplete[d] imINDY’s money” through payments to shell companies, “conceal[ed] the true financial state” of imINDY “caus[ing] [it] to be . . . unable to pay for expenses,” and “siphon[ed] money from imINDY, thereby defrauding [Stewart] by . . . diminishing the value of his ownership stake.” These allegations are fundamentally about imINDY’s declining value and thus are “indistinguishable from the injury suffered by [imINDY] as a [corporation].” Jewell v. United States, 548 F.3d 1168, 1173 (8th 3 Stewart’s alleged injuries may have been caused by breaches of contractual obligations owed to him under the TPAA and the Operating Agreement. But they nevertheless took the form of a loss in imINDY’s financial value that “affected all . . . shareholders equally” and cannot form the basis for “an individual shareholder claim.” Arent, 975 F.2d at 1373. -5- Cir. 2008). “[I]f we were to accept [Stewart’s] argument, personal financial loss alone would become the touchstone for shareholder standing.” Id. To the extent Stewart alleges that Defendants caused him individualized reputational harm, such harm cannot form the basis for Stewart’s RICO claim because it “is not an injury to ‘business or property’ within the meaning of 18 U.S.C. § 1964(c).” Hamm v. Rhone-Poulenc Rorer Pharms., Inc., 187 F.3d 941, 954 (8th Cir. 1999). While harm to business or property that is caused by reputational harm may form the basis for a RICO claim, such downstream harms are not alleged here. See Med. Marijuana, Inc. v. Horn, 604 U.S. 593, 614 (2025). As his counsel has conceded,4 Stewart retains the option to bring his claims in state court, and he may have been able to bring a derivative RICO claim before he sold his shares in imINDY. Under these circumstances, we do not find that “equity demands . . . we permit [Stewart] to assert his admittedly derivative claims for individual recovery.” Craig Outdoor, 528 F.3d at 1025 & n.11. Nor do we find it to be a manifest injustice that Stewart, “who created the corporate form” to receive the benefits of limited liability, “cannot rend the veil [he] wove” and directly recover for imINDY’s losses. Landstrom, 561 N.W.2d at 14 (quoting Kagan v. Edison Bros. Stores, Inc., 907 F.2d 690, 693 (7th Cir. 1990)). III. Stewart also challenges the denial of his request for leave to amend. The denial of leave to amend a complaint is reviewed under an abuse of discretion standard, but if the district court bases its denial on the futility of a proposed amendment, the underlying legal conclusions are reviewed de novo. H & Q Props., Inc. v. Doll, 793 F.3d 852, 855 (8th Cir. 2015). Here, Stewart’s challenge to the district court’s 4 Although Stewart clarified in two letters under Rule 28(j) of the Federal Rules of Appellate Procedure that he does not wish to proceed in state court, “state courts have concurrent jurisdiction to consider civil claims arising under RICO.” Tafflin v. Levitt, 493 U.S. 455, 467 (1990). -6- finding of futility is based exclusively on his contention that the district court wrongly dismissed his RICO claims. Because we conclude that the RICO claims were properly dismissed, this argument is unavailing. The district court did not err in denying leave to amend. IV. Finally, we turn to Stewart’s argument that the district court improperly awarded attorney fees to Christopher and Nicholas Hamze. Before addressing the merits, we must assure ourselves of our jurisdiction. A. Defendants contend that we cannot review Stewart’s challenge to the award of attorney fees because it was not identified in an original or amended notice of appeal as required by Federal Rule of Appellate Procedure 4(a)(4)(B)(ii). See Whitaker v. Garcetti, 486 F.3d 572, 585 (9th Cir. 2007) (“[A] party wishing to challenge the attorney fees decision ‘must file a notice of appeal[] or an amended notice of appeal’ specifying its appeal of that decision.”) (quoting Fed. R. App. P. 4(a)(4)(B)(ii)); see also Miles v. Gen. Motors Corp., 262 F.3d 720, 722–23 (8th Cir. 2001) (holding that we lacked jurisdiction to consider an appellant’s argument because they failed to file an amended notice of appeal as required by Rule 4). Stewart concedes that he never identified the award of attorney fees in a notice of appeal. But he argues that he filed the functional equivalent of an amended notice— and thus satisfied the Rule’s requirements—by clearly identifying his intent to appeal the attorney fees in his statement of issues. The Supreme Court has held that we must “liberally construe” the Rules governing notices of appeal. Smith v. Barry, 502 U.S. 244, 248 (1992). Accordingly, even “if a litigant files papers in a fashion that is technically at variance with the letter of a procedural rule,” they satisfy the rule’s requirements if their “action is the functional equivalent of what the rule requires.” Torres v. Oakland Scavenger Co., -7- 487 U.S. 312, 316–17 (1988). In assessing whether Stewart filed the functional equivalent of a notice of appeal challenging the award of attorney fees, we consider whether “the appellant’s intent to challenge [the order] is clear” and whether “the adverse party will suffer no prejudice if review is permitted.” Lincoln Composites, Inc. v. Firetrace USA, LLC, 825 F.3d 453, 458 (8th Cir. 2016) (quoting Hallquist v. United Home Loans, Inc., 715 F.3d 1040, 1044 (8th Cir. 2013)); Hairston v. Wormuth, 107 F.4th 867, 870 (8th Cir. 2024). We conclude that this is the unusual case where both requirements have been met. Stewart’s statement of issues did more than merely mention the award of attorney fees. Instead, it explicitly laid out both his intent to challenge the awarded fees and the argument he intended to present on appeal. Cf. Hairston, 107 F.4th at 870 (finding no jurisdiction where the appellant’s filing did not even mention the post-trial motions that the appellant intended to challenge). Stewart’s statement of issues was filed before an amended notice of appeal would have been due, which means Defendants received timely notice of his intent to appeal the attorney fees. And Defendants have not identified any prejudice resulting from Stewart’s failure to comply with procedural formalities. We acknowledge that Stewart’s choice to forgo filing an amended notice of appeal could have prejudiced the opposing parties—whether by creating confusion or uncertainty or for other reasons— especially because Stewart was represented by counsel who is expected to understand and comply with procedural requirements. But there is no indication that any prejudice occurred here. Defendants were able to fully brief and argue the issue, and they do not suggest that they were in any way impaired by a lack of adequate notice. B. Satisfied that we have jurisdiction, we turn to the merits. We review a district court’s award of attorney fees for abuse of discretion. Burton v. Nilkanth Pizza Inc., 20 F.4th 428, 431 (8th Cir. 2021) (citation omitted). “Abuse of discretion in awarding attorney’s fees occurs ‘when there is a lack of factual support’ for the -8- district court’s decision, or ‘it fails to follow applicable law.’” Id. (quoting Martin v. Ark. Blue Cross & Blue Shield, 299 F.3d 966, 969 (8th Cir. 2002) (en banc)). The district court’s underlying factual conclusions for awarding attorney fees “are reviewed under a clearly erroneous standard.” Litton Microwave Cooking Prods., v. Leviton Mfg. Co., 15 F.3d 790, 795 (8th Cir. 1994). Here, the district court awarded attorney fees based on an indemnity provision in the Buyout Agreement in which Stewart “indemnifie[d] Christopher Hamze and imINDY LLC, along with their employees, agents, successors and assigns, Christopher’s family, insurers, and attorneys from any and all actions . . . arising out of Christopher’s and [Stewart’s] ownership of and employment through imINDY LLC.” On appeal, Stewart’s only argument is that the award of attorney fees is reversible error because his complaint plausibly alleges that the Buyout Agreement was fraudulently induced and thus unenforceable. However, the district court must award attorney fees based on its own factual determinations and legal conclusions. See Fed. R. Civ. P. 54(d)(2)(C) (“The court must find the facts and state its conclusions of law . . . .”). And in carrying out this inquiry—contrary to Stewart’s suggestion—the district court was not obligated to accept his well-pled allegations as true.5 Accordingly, Stewart fails to identify any reversible error. 5 Of course, the district court would be required to accept any well-pled allegations of fraud when analyzing whether Stewart’s state law claims warrant dismissal under Federal Rule of Civil Procedure 12(b)(6). But the district court never engaged in this inquiry because it declined to exercise supplemental jurisdiction over the state law claims, resulting in a dismissal without prejudice. -9- V. For the foregoing reasons, we affirm. ______________________________ -10-