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Network Commodities, LLC, et al v. Golondrinas Trading Co.

March 28, 2013


The opinion of the court was delivered by: Hillman, District Judge


This matter comes before the Court by way of motion by Defendants Golondrinas Trading Co., LTD (hereinafter, "Golondrinas") and Damian Miriello (hereinafter, "Defendant Miriello") [Doc. No. 17] seeking to dismiss Plaintiffs' Second Amended Complaint. Dismissal is sought pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and 12(b)(6) for failure to state a claim upon which relief can be granted. Plaintiffs oppose Defendants' motion. The Court has considered the parties' submissions and decides this matter pursuant to Federal Rule of Civil Procedure 78.

For the reasons expressed below, the motion will be granted in part and denied in part.


In this action, Plaintiffs assert claims under both federal and state racketeering laws, specifically the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 through 1968, and the New Jersey RICO Statute, N.J.S.A. 2C:41-1 through 2C:41-6. Plaintiffs also allege claims for breach of contract, fraud in the inducement, and unjust enrichment. This court exercises both federal question and diversity subject matter jurisdiction over Plaintiffs' claims pursuant to 28 U.S.C. §§ 1331 and 1332.


Plaintiffs' Second Amended Complaint alleges that Defendants engaged in a deceptive and fraudulent scheme to induce Plaintiffs to enter into a series of shipping contracts providing for the future shipment of wholesale seafood product from Ecuador in exchange for cash advances paid by Plaintiffs. With respect to their business arrangements, Plaintiffs wired cash advances to Defendants with the expectation that Defendants would ship seafood product exclusively to the Port of New York, located in Newark, New Jersey, where Defendants were responsible for paying all duties, port fees, and entry charges. (Second Am. Compl. [Doc. No. 24] ¶¶ 50-51, 53, 84-85.) After shipment, Defendants arranged for transportation of the seafood product to a freezer storage company in Perth Amboy, New Jersey, known as Preferred Freezer, by way of a New Jersey common carrier. (Id. ¶¶ 53-55, 86-87.) Defendants allegedly paid the cost of the storage fees and remained the owners of the seafood product while it was stored in New Jersey until it was sold to vendors. (Id. ¶¶ 55-57, 87-88.) It was Defendants' responsibility to find buyers for the seafood product shipped into the state of New Jersey, and after the sale, Defendants would distribute the proceeds of sale to Plaintiffs. (Id. ¶¶ 64, 69, 90.)

Plaintiffs allege, though, that after a certain point in time, Defendants no longer had any intention of actually performing on these contracts. (Id. ¶¶ 4, 101-102.) Plaintiff Network Commodities alleges since the time it commenced doing business with Defendants in late 2006, it advanced a total of $3.75 million to Defendants with respect to "more than at least ten discrete agreements and shipments over a period of approximately five years." (Id. ¶¶ 48, 71.) However, Defendants apparently failed to ship or deliver any seafood product for all transactions since October 30, 2008 which correspond to wired cash advancements by Network Commodities in the amount of $359,158.40 of the total $3.75 million. (Id. ¶ 72.) Plaintiff Nebraskaland likewise contends that it advanced a total of $2.7 million to Defendants since early 2008, and while Defendants shipped and delivered seafood product initially, Defendants failed to ship or deliver any product since October 15, 2008, representing a total amount of $628,864.80 in cash advancements wired by Nebraskaland for which no product was received. (Id. ¶ 80, 91, 95.)

Both Plaintiffs contend that at the time they "negotiated the specific oral agreements, Defendants intended to take Network Commodities' [and Nebraskaland's] money with no intention to ship any product." (Id. ¶¶ 73, 92.) Plaintiffs further allege that "Defendants made these promises without the expectation of honoring their promises by shipping the seafood product." (Id. ¶¶ 74, 93.) Despite Plaintiffs making respective demands for repayment of these funds, Defendants have failed to pay Plaintiffs the funds owed to them. (Id. ¶¶ 76-77, 96-97.)

Plaintiffs originally filed suit in the Superior Court of New Jersey, Law Division for Camden County, and Defendants subsequently removed the action to this Court. (Notice of Removal [Doc. 1] ¶ 1.) Plaintiffs' Second Amended Complaint asserts causes of action for breach of contract (Count One), fraud in the inducement (Count Two), unjust enrichment (Count Three), violations of the federal RICO statute, 18 U.S.C. § 1691, et seq. (Count Four), and violations of the New Jersey RICO statute, N.J. Stat. Ann. § 2C:41-1, et seq. (Count Five). (Second Am. Compl. §§ 120-203.)


Defendants now seek to dismiss Plaintiffs' Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction as to Defendant Miriello and 12(b)(6) for failure to state a claim upon which relief can be granted.

A. Rule 12(b)(2) Standard

Federal Rule of Civil Procedure 12(b)(2) provides for dismissal of an action when the Court does not have personal jurisdiction over a defendant. "Once challenged, the plaintiff bears the burden of establishing personal jurisdiction." O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007) (citing Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001)). In deciding a motion to dismiss for lack of personal jurisdiction, the Court must "accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff." Carteret Sav. Bank v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir.), cert. denied, 506 U.S. 817 (1992) (citations omitted).*fn1

B. Rule 12(b)(6) Standard

In considering Defendants' motion pursuant to Rule 12(b)(6) for failure to state a claim, the Court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir. 2005); see also Phillips v. County of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008) ("[I]n deciding a motion under Fed.R.Civ.P. 12(b)(6), [a district court is] ... required to accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the light most favorable to" the plaintiff). It is well settled that a pleading is sufficient if it contains "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2).

A district court, in weighing a motion to dismiss, asks "'not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims[.]'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 n.8 (2007) (quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953 (2009) ("Our decision in Twombly expounded the pleading standard for 'all civil actions[.]'") (citation omitted). First, under the Twombly/Iqbal standard, a district court "must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions." Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (citing Iqbal, 129 S. Ct. at 1949).

Second, a district court "must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Fowler, 578 F.3d at 211 (citing Iqbal, 129 S. Ct. at 1950). "[A] complaint must do more than allege the plaintiff's entitlement to relief." Fowler, 578 F.3d at 211; see also Phillips, 515 F.3d at 234 ("The Supreme Court's Twombly formulation of the pleading standard can be summed up thus: 'stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest' the required element. This 'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of' the necessary element.") (citing Twombly, 550 U.S. at 556). "The defendant bears the burden of showing that no claim has been presented." Hedges v. U.S., 404 F.3d 744, 750 (3d Cir. 2005).


A. Personal Jurisdiction Over Defendant Miriello

Initially, Defendants argue that Plaintiffs' Second Amended Complaint should be dismissed in its entirety as to Defendant Miriello pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. (Br. in Supp. of Defs.' Partial Mot. to Dismiss [Doc. No. 17-1] (hereinafter, "Defs.' Br."), 4-6.) Defendant Miriello argues that he is not subject to personal jurisdiction in this Court because: (1) all of Plaintiffs' claims are based upon the contractual relationship between Plaintiffs and Golondrinas and the allegations directed at Miriello's conduct consist of actions taken in his corporate capacity on behalf of Golondrinas, which are insufficient to establish either general or specific jurisdiction in New Jersey; (2) Plaintiffs cannot demonstrate that Miriello had "continuous or systematic contacts" with New Jersey sufficient to establish general jurisdiction; (3) Plaintiffs failed to show that Miriello "purposely directed" his activity to New Jersey ...

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