Entretelas Americanas S.A. v. Rafael Ignacio Soler ( 2021 )

20-1125-cv
Entretelas Americanas S.A. v. Rafael Ignacio Soler
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
AMENDED SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
"SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 7th day of January, two thousand twenty-one.
PRESENT: ROBERT D. SACK,
DENNY CHIN,
RAYMOND J. LOHIER, JR.,
Circuit Judges.
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ENTRETELAS AMERICANAS S.A.,
Plaintiff-Appellant,
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RAFAEL IGNACIO SOLER,
Defendant-Appellee.
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FOR PLAINTIFF-APPELLANT: Paul A. Batista, Paul Bautista, PC, New York,
New York.
FOR DEFENDANT-APPELLEE: Vincent J. Syracuse, Tannenbaum Helpern
Syracuse & Hirschtritt LLP, New York, New
York; Richard Walker Trotter, Feuerstein
Kulick LLP, New York, New York
Appeal from the United States District Court for the Southern District of
New York (Kaplan, J.).
UPON DUE CONSIDERATION, IT IS ORDERED, ADJUDGED, AND
DECREED that the order of the district court is AFFIRMED.
Plaintiff-appellant Entretelas Americanas S.A. ("Entretelas") appeals from
the district court's order, entered March 10, 2020, dismissing its claims against
defendant-appellee Rafael Ignacio Soler. The district court adopted the report and
recommendation of the magistrate judge (Lehrburger, M.J.) recommending that Soler's
motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure be granted without prejudice. The district court granted Entretelas leave to
amend its complaint by April 7, 2020. Entretelas never filed an amended complaint and
instead filed its notice of appeal on March 31, 2020. We assume the parties' familiarity
with the underlying facts, the procedural history of the case, and the issues on appeal.
"Normally, an order dismissing a complaint with leave to amend is
interlocutory and not appealable at that time." DiVittorio v. Equidyne Extractive Indus.,
Inc., 822 F.2d 1242, 1246 (2d Cir. 1987). An appellant, however, can render such a non-
final order "final" and appealable by disclaiming any intent to amend. Slayton v. Am.
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Express Co., 460 F.3d 215, 225 (2d Cir. 2006). "Even where the appellant does not
explicitly disclaim intent to replead, we will treat a premature appeal from a judgment
granting leave to amend as an appeal from a final judgment if the deadline for
amendment has passed." Id. at 224 n.7 (citing Festa v. Loc. 3 Int'l Brotherhood of Elec.
Workers, 905 F.2d 35, 37 (2d Cir. 1990)). Here, the deadline for amendment has long
passed, and in its brief on appeal, Entretelas refers to the district court's March 10, 2020
order as a "final judgment that disposes of all claims in the underlying action."
Appellant's Br. at 1. In these circumstances, we conclude that the nonfinality of the
district court's order is cured and this appeal is properly before us.
We review a district court's dismissal under Federal Rule of Civil
Procedure ("Rule") 12(b)(6) de novo, accepting the complaint's factual allegations as true
and drawing all reasonable inferences in the plaintiff's favor. See Vega v. Hempstead
Union Free Sch. Dist., 801 F.3d 72, 78 (2d Cir. 2015).
Soler worked for Entretelas as an executive-level employee and CEO from
1999 through 2017. Entretelas alleges three claims under the Racketeer Influenced and
Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962(c), 1956, and 1951; a breach of
contract claim; and an unjust enrichment claim. Soler brought a separate cause of action
against Entretelas in the Argentinian court system, alleging, inter alia, that Entretelas
failed to provide him with bonuses he was entitled to and that he received "off the
books" compensation from Entretelas (the "Argentina Litigation"). Appellee's Br. at 8.
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The magistrate judge held that the RICO claims fail to state a cause of
action and that the court lacked jurisdiction as to the remaining common law claims.
The court further held that even if it could exercise jurisdiction over the common law
claims, those claims should be dismissed on forum non conveniens grounds.
1. RICO Claims
Section 1962 of RICO provides that "[i]t shall be unlawful for any person
employed by or associated with any enterprise engaged in, or the activities of which
affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in
the conduct of such enterprise's affairs through a pattern of racketeering activity or
collection of unlawful debt." 18 U.S.C. § 1962(c). To sufficiently allege that the
defendant violated RICO, a plaintiff must plead four elements: "(1) conduct, (2) of an
enterprise, (3) through a pattern (4) of racketeering activity." Anatian v. Coutts Bank
(Switzerland) Ltd., 193 F.3d 85, 88 (2d Cir. 1999) (internal quotation marks omitted). To
establish civil liability, a plaintiff must also "plead injury to [its] business or property as
a result of the RICO violation." Id.The magistrate judge held that while the complaint sufficiently alleged the
first three elements, it failed to state a claim for the fourth element -- "racketeering
activity" -- because it failed to meet the pleading requirements for "predicate acts."
GICC Cap. Corp. v. Tech. Fin. Grp., Inc., 67 F.3d 463, 465 (2d Cir. 1995) ("[P]laintiff must
plead at least two predicate acts."). Predicate acts are those that are "indictable under
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specified federal statutes . . . as well as certain crimes chargeable under state law." RJR
Nabisco, Inc. v. Eur. Cmty., 136 S. Ct. 2090, 2096 (2016) (internal quotation marks
omitted).
Allegations of mail fraud and wire fraud under 18 U.S.C. §§ 1341, 1343
"must be made with the particularity required by [Rule 9(b)]," which requires that the
complaint allege content, date, place, or intent of any alleged misrepresentation.
McLaughlin v. Anderson, 962 F.2d 187, 191 (2d Cir. 1992). "Pursuant to this higher
pleading standard, the complaint must adequately specify the statements it claims were
false or misleading, give particulars as to the respect in which plaintiffs contend the
statements were fraudulent, state when and where the statements were made, and
identify those responsible for the statements." Id. (internal quotation marks omitted).
"[N]ot every use of the mails or wires in furtherance of an unlawful scheme to deprive
another of property constitutes mail or wire fraud." Id. at 192 (internal quotation marks
omitted); accord Anatian, 193 F.3d at 88 (plaintiff failed to allege RICO predicate acts of
mail and wire fraud with sufficient particularity).
Here, Entretelas has failed to plead time, place, and content with respect
to any of the alleged misrepresentations made by Soler. We agree with the district
court's reasoning that Entretelas has failed to sufficiently allege how it was harmed by
Soler's conduct, or how it relied upon those misrepresentations to its detriment. See
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Anatian, 193 F.3d at 88 ("[A] plaintiff must plead injury to business or property as a
result of the RICO violation.").
As to money laundering, we also agree with the magistrate judge's
holding that Entretelas failed to meet the requisite pleading standard as it failed to
allege that Soler engaged in financial transactions "involv[ing] the proceeds of specified
unlawful activity." 18 U.S.C. § 1956(a). Rather, Entretelas alleged only that Soler used
funds derived from his compensations, including salary, director's fees, profit sharing,
and reimbursement of expenses. See United States v. Maher, 108 F.3d 1513, 1527 (2d Cir.
1997) ("[A] defendant need not know precisely what specified unlawful activity
produced the money, so long as he believed that the money was from some unlawful
activity.").
As to extortion, even assuming that Soler committed predicate acts of
extortion in violation of RICO, Entretelas did not sufficiently allege that such violations
proximately caused injury. See Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 23
(2d Cir. 1990). Instead, Entretelas relied on the conclusory assertion that it was injured
"[b]y reason of the foregoing" alleged extortion scheme. App'x at 15. A "threadbare
recital[] of a cause of action's elements, supported by mere conclusory statements,
do[es] not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Because Entretelas failed to
plausibly allege proximate causation, we need not and do not decide whether it has
plausibly alleged that Soler committed extortion.
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Accordingly, we affirm the dismissal of the RICO claims, substantially for
the reasons set forth by the district court.
2. Common Law Claims
The magistrate judge held that it had no federal jurisdiction over the
common law claims on the basis that plaintiff has failed to plausibly allege the amount
in controversy. Entretelas claims only that, with respect to the common law claims, it
has "been damaged in an amount to be determined at trial." App'x at 16. Accordingly,
we affirm the district court's dismissal of plaintiff's common law claims for breach of
contract and unjust enrichment for failure to sufficiently plead the amount in
controversy.
Additionally, the magistrate judge did not abuse its discretion in declining
to exercise supplemental jurisdiction over these claims. See Baylis v. Marriott Corp., 843
F.2d 658, 665 (2d Cir. 1988) ("When all bases for federal jurisdiction have been
eliminated from a case so that only pendent state claims remain, the federal court
should ordinarily dismiss the state claims."); Pension Benefit Guar. Corp. ex rel. St. Vincent
Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 727 (2d Cir.
2013) ("[I]n the usual case in which all federal-law claims are eliminated before trial, the
balance of factors to be considered under the pendent jurisdiction doctrine . . . will point
toward declining to exercise jurisdiction over the remaining state-law claims.").
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We have considered Entretelas's remaining arguments and conclude they
are without merit. For the foregoing reasons, we AFFIRM the order of the district
court.
FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk
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