Hourani v. Mirtchev , 282 F.R.D. 278 ( 2012 )

THE UNITED STATES DIS'I`RICT COURT
FOR THE DIS'I`RIC'I` OF COLUMBIA
DEVINCCI SALAH HOURANI, et al., )
)
Plaintif`f`s, )
) Civil Aotion No. 10-01618
v. ) (TFH)
)
ALEXANDER V. MIRTCHEV, et al., )
)
Defendants. )
)
()RDER
Pending before the Court are:
l. Plaintiffs’ Motion for Leave to Ainend Cornplaint [Dkt. No. 60];
2. Defendants’ Motion to Dismiss Cornplaint or in the Alternative, to Stay
Action Pending Arbitration ("Motion to Disrniss") [Dkt. No. 12};
3. Det`endants’ Motion to Strike I’ortions of the Complaint [Dkt. No. 13]; and
4. Defendants’ Motion for Leave to File 2012 Export Report [Dkt. No. 64].
After carefully considering the motions, the oppositions thereto, and the record of this
case, the Court GRANTS Plaintiffs’ Motion for Leave to Amend Complaint [Dkt. No.
60]; DENIES without prejudice Defendants’ Motion to Dismiss Complaint [Dkt. No. 12]
and Motion to Strike Portions of the Cornplaint [Dkt. No. 13]; and HOLDS IN
ABEYANCE Def`endants’ Motion for Leave to File 2012 Expert Report [Dkt. No. 64], as
further explained below.l
l 'l`his Order does not disturb the Court’s Jui.y 13, 2011 Order: (1) staying discovery; and hofding in
abeyance the (2) Motion for Leave to Take Jurisdiotional Discovery and; (3) Motion for Sanctions for
Filing False Docurnents pending resolution of any potential motions to dismiss See Order (July 13, 2011)
[Dkt. No. 53].
I. Motion for Leave to Amend Cornplaint
Rule l5(a) provides, inter alia, "a party may amend its pleading only with the
opposing party's written consent or the court's leave." Fed. R. Civ. P. l5(a)(2).2 The rule
further instructs, "[t]he court should freely give leave when justice so requires." Id.
Wliile the Court’s decision to grant or deny leave to amend is discretionary, the Court
abuses its discretion by denying leave to amend without providing "sufficient reason,
such as undue delay, bad faith or dilatory rnotive, repeated failure to cure deficiencies by
previous amendments or futility of amendment." See Firestone v. Fz`restone, 76 F.3d
1205, 1208 (D.C. Cir. 1996) (citing and quoting in part Foman v. Davis, 371 U.S. 178,
182 (1962)). Here, Defendants argue leave to file an amended complaint should be
denied for bad faith and futility of amendment
A. Bad faith
Defendants oppose Plaintiffs’ motion arguing the proposed amended complaint
represents a bad faith attempt by the plaintiffs to avoid dismissal of Plaintiffs’ original
complaint See Defs.’ Opp’n to the Pls.’ Mot. for Leave to Arnend Coinpl., at 7-8
("Opp’n") [Dlct. No. 61]. 'I`o do so, Defendants argue, the Plaintiffs’ amended complaint
alleges facts that contradict material factual allegations contained in the original
complaint. See id. at 7. Plaintiffs deny factual inconsistencies exist between the
amended complaint and the original complaint See Pl.’s Reply in Support of Their Mot.
for Leave to Amend at 6 ("Reply") [Dkt. No. 62].
2 Rule lS(a) also authorizes a party to amend its pleading as a matter or right within either: "21 days after
serving it, or . . . 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier." Fed.
R. Civ. P. l5(a)(l). However, Plaintiffs’ motion to file an amended complaint comes well over 21 days
after service of motions under Rule I2(b) and (f). See [Dkt. Nos. 12 and 13].
The Court cannot impute bad faith motives to Plaintiffs’ rnotion. The original
complaint alleges a broad sweeping conspiracy to deprive Plaintiffs of their business
interests in Kazakhstan - implicating the highest levels of the Kazakhstan government
See, e.g., Compl. at 2 [Dkt. No. 1]. Nonetheless, with respect to KTK Television and
Alma Media, two businesses in which Plaintiffs had interests, the original complaint
alleges the President of Kazakhstan’s daughter played a substantial, indeed primary, role
in depriving Plaintiffs of their assets. See id. 111 118, 126. The proposed amended
complaint focuses on those events. See First Arnended Cornpl. 111 12-14 {Dkt. No. 60-3];
Reply at 6~7. That the original complaint included additional allegations and alleged a
broader conspiracy does not preclude Plaintiffs from narrowing the focus of their lawsuit,
nor does it suggest bad faith. See Iiarrisorz v. Rubin, 174 F.3d 249, 253 (D.C. Cir. 1999)
("a plaintiff is not bound by the legal theory on which he or she originally relied"
(citation omitted)).
B. Futz`lizy
Moreover, the Court cannot conclude at this time that granting Plaintiffs’ motion
would be liitile. Counts l and II of Plaintiffs’ proposed amended complaint allege
Defendants violated the RICO Act, 18 U.S.C. § 1962(0), (d). First. Am. Compl. at 9-10.
Count lII of the proposed amended complaint alleges Defendants conspired with others to
defame Plaintiffs. Id. at 10-12. Defendants argue Plaintiffs’ motion should be denied as
futile because Counts I, II, and IlI of the proposed amended complaint fail to state valid
claims. See Opp’n at 11-15. "A district court has discretion to deny a motion to amend
on grounds of futility where the proposed pleading would not survive a motion to
dismiss." fn re Im‘erBank Funding Corp. Sec. Ll`tz`g., 629 F.3d 213, 215 (D.C. Cir. ZOlO)
(citation omitted).
Here, the proposed amended complaint alleges facts, beyond mere legal
conclusion, suflicient to support a claim that Defendants - a District of Columbia-based
enterprise - and others engaged in series of related racketeering predicates against the
Plaintiffs; over an extended period of time and; that Defendants’ involvement directly led
to injuries suffered by Plaintiffs. See First Am. Compl. 1111 17»48; see also Western
Assocs. Ltd. Pshp. v. Market Square Assocs., 235 F.3d 629, 633 (D.C. Cir. 2001)
(outlining the elements of 18 U.S.C. § 1962(0)) (quoting in part Pyramid Sec. Ltd. v. IB
Resolution, Inc., 924 F.Zd 1114, 1117 (D.C. Cir. 1991). Further, the proposed amended
complaint narrows the scope of the alleged RICO conspiracy and adds facts constituting
more than "bare, conclusory assertions," Opp’n at 14, to sufficiently allege the
defendants and others conspired to violate § 1962(0) in violation of § l962(d). See First
Am. Compl. 1111 1l-16. Finally, at least at this stage, Plaintiffs proposed amended
complaint alleges sufficient factual detail to prevent the Court from concluding Count III
could not survive a motion to dismiss. Id. 1111 12-16, 57-63. Without concluding whether
Plaintiffs’ proposed amended complaint will ultimately survive a motion to dismiss, the
Court cannot find - at this stage - that granting Plaintiffs leave to tile a first ainended
complaint would be futile.
The Plaintiffs’ Motion for Leave to Amend Coinplaint is thus GRAN'I`EI).
Accordingly, the Clerk of the Court is instructed to accept for filing forthwith Plaintiffs'
First Amended Complaint, the Court having decided that their motion for leave to amend
must be granted. As a result of this ruling, Defendants' pending motions to dismiss and
to strike portions of the original complaint are DENIED without prejudice
II. Motion for Leave to File 2012 Expert Report
Defendants have also filed a Motion for Leave to File 2012 Expert Report [Dkt.
No. 64]. Defendants contend the expert’s report is "relevant to several motions" before
the Court. See Mem. in Support of Mot. for Leave to File 2012 Expert Report at l-2. In
light to the Court’s rulings herein, the Court finds the report’s only remaining relevance
pertains to the Defendants’ motion for sanctions, see Defs.’ Consolidated Opp’n to Pls.’
Mot. to Take jurisdictional Disc. and Mot. for Sanctions for Filing False Docnrnents
{Dkt. No. 24]. Accordingly, the Court HOLDS IN ABEYANCE, this motion until the
Court endeavors to address Defendants’ motion for sanctions
SO ORI)ERED
Aprii?, 2012 /
Thomas F.
UNITED STATES DI ICT JUDGE