Sisney v. State
754 N.W.2d 639 (2008)
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Rule of Law:
An inmate is an incidental, not an express, third-party beneficiary of a public contract between the state and a food service provider, and therefore lacks standing to sue for breach of that contract.
Facts:
- The State of South Dakota entered into a contract with CBM Inc. to provide food services at Department of Correction facilities.
- The contract stipulated that the menu should have an average of 2500 to 2700 calories per day and that food substitutions must be available for religious dietary needs.
- Charles E. Sisney, an inmate at the South Dakota State Penitentiary, is Jewish and follows a kosher diet.
- In April 2007, CBM began serving a new kosher diet which Sisney alleged provided 400 to 500 fewer calories than the contractual minimum.
- Sisney also alleged that the new food did not meet the requirements of his religious beliefs.
- Sisney filed an administrative grievance with Douglas Weber, the Director of Prison Operations.
- Weber responded to the grievance by stating that Sisney's calorie study was incomplete and that no action would be taken.
Procedural Posture:
- Charles E. Sisney filed a pro se complaint in the circuit court against the State of South Dakota, Douglas Weber, and CBM Inc.
- The complaint alleged breach of contract, claiming Sisney was a third-party beneficiary, and included claims under 42 USC § 1981 and § 1985.
- Defendants filed a motion to dismiss for failure to state a claim upon which relief could be granted.
- The circuit court granted the defendants' motion to dismiss, concluding Sisney lacked standing as a third-party beneficiary and his federal claims were insufficiently pleaded.
- Sisney, as the appellant, appealed the dismissal to the Supreme Court of South Dakota.
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Issue:
Does an inmate have standing as a third-party beneficiary to sue for breach of a food services contract between the State and a private company?
Opinions:
Majority - Zinter, Justice
No, an inmate does not have standing as a third-party beneficiary to sue for breach of a food services contract between the State and a private company. Under South Dakota law (SDCL 53-2-6), a contract must be made 'expressly for the benefit of a third person' for that person to enforce it. For public contracts, there is a strong presumption that members of the public are only incidental beneficiaries, not intended third-party beneficiaries. The contract between the State and CBM was made for the express benefit of the State to fulfill its obligations, and any benefit to inmates like Sisney was merely incidental. The contract's language does not clearly manifest an intent by the contracting parties to make CBM directly liable to inmates for nonperformance.
Analysis:
This decision solidifies the high bar for establishing third-party beneficiary status in the context of public contracts. It establishes a strong presumption that individuals receiving services under a government contract, such as prisoners, are merely incidental beneficiaries and cannot sue for breach. This ruling protects government contractors from a flood of litigation by the general public and reinforces the principle that only the direct parties to a contract—or those expressly named as beneficiaries—have the right to enforce it. The case serves as a clear example of how courts strictly interpret the 'expressly for the benefit' requirement to limit third-party enforcement rights.
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