NorthStar Business Enterprises, LLC v. Nelson
0:24-cv-03492
| D. Minnesota | Jun 23, 2025Background
- This case involves disputes over the management and distribution of Prince’s estate, specifically between NorthStar Business Enterprises, LLC and L. Londell McMillan (plaintiffs) and several heirs of Prince, primarily Sharon Nelson (defendants/counterclaim-plaintiffs).
- During estate probate, the parties executed several agreements: the NorthStar Agreement (naming NorthStar as business advisors/managers for the heirs and providing for legal services), the Expectancy Agreement (transferring a ten-percent interest in the heirs’ estate share to McMillan and Spicer), and the Prince Legacy LLC Operating Agreement (centralizing management of part of the estate).
- The Nelsons allege that McMillan and Spicer misrepresented and concealed material facts when procuring their agreement signatures, and deprived them of independent legal counsel.
- Key portions of the dispute, including the validity of these agreements and claims of fraud and breach of fiduciary duty, are also being litigated in the Delaware Court of Chancery.
- NorthStar moved to dismiss or stay the Minnesota federal case, invoking the Rooker-Feldman doctrine (federal courts lack jurisdiction to review certain state court judgments) and seeking a stay in favor of the Delaware proceeding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rooker-Feldman Doctrine bars federal review of rescission claims on Expectancy Agreement | Court lacks jurisdiction: Rescinding the Expectancy Agreement would reverse the state probate order | Claims seek damages for wrongdoing in obtaining the Order, not direct review of Order | Jurisdiction is barred only as to claims for rescission/voiding the Expectancy Agreement; damages claims survive |
| Dismissal of damages claims relating to Expectancy Agreement | All damages claims flow from the need to invalidate the Agreement and are thus barred | Damages claims are independent—they target misconduct, not the validity of the Probate Order | Court retains jurisdiction over damages/disgorgement claims based on wrongful conduct in obtaining the Agreement |
| Motion to Stay pending Delaware litigation | Stay necessary to avoid duplicative litigation and inconsistent judgments | The case should proceed on remaining claims | Stay is granted: Judicial efficiency and fairness support pausing the Minnesota proceeding |
| Dismissal under Rule 12(b)(6) and judgment on the pleadings | Claims are factually and legally insufficient; pleadings are closed | Factual disputes remain; pleadings not closed | Denied as moot without prejudice (may be revisited post-Delaware action) |
Key Cases Cited
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005) (explains limits of federal court jurisdiction under Rooker-Feldman doctrine)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (articulates Rule 12(b)(6) pleading standard)
- Landis v. N. Am. Co., 299 U.S. 248 (1936) (recognizes federal court’s inherent power to stay proceedings)
- D.C. Ct. of Appeals v. Feldman, 460 U.S. 462 (1983) (elaborates on Rooker-Feldman doctrine applicability)