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Sprint Solutions, Inc. v. J&S Investments of Delaware, Inc.

United States District Court, D. New Jersey

January 31, 2017



          CRAIG S. HILLIARD GENE MARKIN STARK & STARK, PC PRINCETON PIKE CORPORATE CENTER On behalf of Defendants J&S Investments of Delaware, Inc., doing business as CELLUSALES, Frank J. Altamura, and Sarabjit Singh, also known as Sam Singh.

          SABINA DHILLON LAW FIRM OF SABINA DHILLON, LLC On behalf of Defendant Karamjeet Singh, also known as Ricky Singh


          NOEL L. HILLMAN, U.S.D.J.

         This case involves claims concerning the illegal trafficking of wireless phones overseas. Pending before the Court are two motions. Plaintiffs, Sprint Solutions, Inc. and Sprint Communications Company L.P. (hereinafter “Sprint”) have moved to dismiss the counterclaims lodged against it by Defendant Karamjeet Singh, also known as Ricky Singh. Defendant Frank J. Altamura has moved to dismiss four counts in Sprint's complaint against him for Sprint's failure to properly plead those counts in accordance with Federal civil Procedure Rules 9(b) and 12(b)(6). For the reasons expressed below, Sprint's motion will be granted, and Altamura's motion will be denied.


         Sprint sells wireless handsets and other mobile devices under various brands, including, Sprint, Sprint Prepaid, Boost Mobile, Virgin Mobile, payLo, and Assurance Wireless, for use on Sprint's wireless network at prices significantly below the wholesale price of the phones to make them more widely accessible to consumers. Briefly summarized from Plaintiff's 48-page Complaint, Defendants J&S Investments of Delaware, Inc. d/b/a Cellusales, Sarabjit Singh a/k/a Sam Singh, Frank J. Altamura, and Karamjeet Singh a/k/a Ricky Singh, as well as other co-conspirators, are perpetrators of an unlawful scheme to profit from the illegal acquisition and resale of new Sprint wireless handsets by stealing the substantial financial investment that Sprint makes in its phones, for their own profit and to the detriment to Sprint and its customers.[1]

         Defendant Cellusales was initially identified as a potential trafficker through its profile on the online marketplace CellPex, offering new iPhones for sale. Sprint's undercover investigators responded to the advertisement and contacted Defendant Sam Singh, who is Cellusales's Director of Global Distribution. At an in person meeting on January 13, 2016, Sam Singh confirmed to the investigator that Defendants are handset traffickers who acquire new phones in bulk that are unlocked and exported for resale overseas. During its investigation, Sprint learned, inter alia, that Defendants were actively looking to enter into an open purchase order to buy 2, 000 new Sprint phones per week, all of which they confirmed would be unlocked and exported, to be used on wireless networks other than Sprint.

         Accordingly, Sprint filed the instant suit against Defendants for common law and statutory unfair competition, tortious interference with existing and prospective business relations and existing contract, conspiracy to commit fraud and fraudulent misrepresentation, unjust enrichment, common law fraud and fraudulent misrepresentation, violations of the Computer Fraud and Abuse Act (“CFAA”), trademark infringement and false advertising under the Lanham Act, contributory trademark infringement, conversion, and violations of the New Jersey Computer Fraud and Abuse Act. The Complaint seeks monetary damages, attorneys' fees and costs, and injunctive relief.

         Defendants, through previous counsel, filed their Answers to Sprint's Complaint, denying Sprint's claims. In his Answer, Defendant Ricky Singh lodged two counterclaims against Sprint -“False and Malicious Allegations” and “Frivolous Litigation.”[2]Sprint has moved to dismiss those counterclaims, arguing that they are not cognizable claims. Singh has opposed Sprint's motion.

         Even though Defendant Frank J. Altamura filed an Answer to Sprint's Complaint, Altamura's current counsel has moved to dismiss four counts in Sprint's Complaint against him. Altamura also asks that the Court permit him to file an amended Answer after the resolution of his motion to dismiss. Sprint has opposed Altamura's motion as procedurally improper, but Sprint also argues that if Altamura's motion is considered by the Court, it should be denied because Sprint's claims against Altamura are properly pleaded and substantively viable.


         A. Subject Matter Jurisdiction

         This Court has jurisdiction over this matter under 28 U.S.C. §§ 1331 and 1338 because Sprint's claims for violation of the United States Trademark Act, Title 15 of the United States Code and the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq. arise under federal law.[3] This Court has supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over Sprint's state law claims because those claims are so related to the federal claims that they form part of the same case or controversy.

         B. Standard for Motion to Dismiss

         When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6), a 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, 351 (3d Cir. 2005). 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). Under the liberal federal pleading rules, it is not necessary to plead evidence, and it is not necessary to plead all the facts that serve as a basis for the claim. Bogosian v. Gulf Oil Corp., 562 F.2d 434, 446 (3d Cir. 1977). However, “[a]lthough the Federal Rules of Civil Procedure do not require a claimant to set forth an intricately detailed description of the asserted basis for relief, they do require that the pleadings give defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.” Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S. 147, 149-50 n.3 (1984) (quotation and citation omitted).

         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 claim.'” Bell Atlantic 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, 556 U.S. 662, 684 (2009) (“Our decision in Twombly expounded the pleading standard for ‘all civil actions' . . . .”); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (“Iqbal . . . provides the final nail-in-the-coffin for the ‘no set of facts' standard that applied to federal complaints before Twombly.”).

         Following the Twombly/Iqbal standard, the Third Circuit has instructed a two-part analysis in reviewing a complaint under Rule 12(b)(6). First, the factual and legal elements of a claim should be separated; a district court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Fowler, 578 F.3d at 210 (citing Iqbal, 129 S.Ct. at 1950). 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.'” Id. (quoting Iqbal, 129 S.Ct. at 1950). A complaint must do more than allege the plaintiff's entitlement to relief. Id.; see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (stating that 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”). A court need not credit either “bald assertions” or “legal conclusions” in a complaint when deciding a motion to dismiss. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir. 1997). 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) (citing Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).

         A court in reviewing a Rule 12(b)(6) motion must only consider the facts alleged in the pleadings, the documents attached thereto as exhibits, and matters of judicial notice. S. Cross Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd.,181 F.3d 410, 426 (3d Cir. 1999). A court may consider, however, “an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document.” Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). If any other matters outside the pleadings are ...

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