PAMELA K. CHEN, District Judge.
On April 29, 2013, Plaintiff Alzal Corp. ("Alzal") initiated this action against Defendants IFC International Freight Corp. ("IFC"), Metropolitan Shipping Logistics ("Metropolitan"), and Ultimate Body and Transport Inc. ("Ultimate") for an alleged breach of a maritime contract to transport a 2008 Mercedes Benz 4W GL5, and seeking punitive damages. Metropolitan and Ultimate, who were served with the Second Amended Complaint in April 2014 (see Dkts. 33-34), have not appeared in this case. On July 7, 2014, IFC moved to dismiss the action under Rules 12(b)(1) and (b)(6). (Dkts. 36-39.) Because Alzal has failed to establish its standing as the proper party to bring this suit, IFC's motion is granted and the case is dismissed.
The following facts are taken from Alzal's Second Amended Complaint, and exhibits thereto. (Dkt. 24 ("SAC").)
On or around May 2008, non-party Auto Point Ltd. ("Auto Point") purchased a 2008 Mercedes Benz 4W GL5 bearing the vehicle identification number ("VIN") 4JGBF86E68A417133 (the "Vehicle") for $80,550.00. (SAC ¶ 6 & Ex. 7.) Auto Point subsequently sold the Vehicle to non-party Novruz Zeynalov ("Zeynalov") for shipment overseas to Baku, Azerbaijan. (Id. ¶ 8.) On or before June 18, 2008, Ilya Igdalev ("Igdalev"), allegedly acting as a representative of Auto Point, delivered the Vehicle to Metropolitan, a shipping broker in New Jersey. (Id. ¶¶ 8, 21, 25.) Attached to the Second Amended Complaint is a copy of a Metropolitan warehouse receipt dated June 18, 2008, reflecting that Metropolitan received the Vehicle. (Id. Ex. 1.) The receipt lists Zeynalov as both the "Shipper" and "Consignee." (Id.) Alzal alleges that Igdalev contracted with Metropolitan on behalf of Auto Point to ship the Vehicle to Zeynalov in Azerbaijan, citing as evidentiary support a Metropolitan shipping form, which names Zeynalov as both "Shipper" and "Consignee." (Id. ¶ 9 & Ex. 2.) Metropolitan generated a payment receipt, dated June 19, 2008, indicating that payments totaling $7,000.00 was received from Zeynalov, and that an outstanding balance of $7,300.00 remained. (Id. ¶ 10 & Ex. 3.) Metropolitan also issued an Invoice, dated June 19, 2008, stating that Zeynalov owed $6,000.00, due on July 4, 2008, for "Ocean Freight Service." The invoice was stamped "PAID." (Id. ¶ 11 & Ex. 4.)
Alzal alleges that upon payment, "Metropolitan became a bailee for the [V]ehicle." (Id. ¶ 11.) The Second Amended Complaint also states that Metropolitan transferred the Vehicle to IFC in Brooklyn for shipment and that IFC, through its acceptance of the Vehicle from Metropolitan, "created a constructive bailment between Auto Point Ltd. and I.F.C." (Id. ¶ 12; see id. ¶¶ 21, 25.) Alzal alleges, however, that "the assignment was illegal because no title documents accompanied the [V]ehicle and IFC as a shipping agent should have known this." (Id. ¶ 25.) Metropolitan, through IFC as its "shipping agent," thereafter shipped the Vehicle out of the country without proper title documents. (Id. ¶ 12.) According to Alzal, IFC "knew or should have known that it was illegal to ship a vehicle out of the United States without proper transport documents." (Id. ¶ 13.)
Because the Vehicle was shipped without proper title documents, United States Customs officials seized the Vehicle in Europe and returned it to the United States. (Id. ¶¶ 12, 21-22 & Ex. 5.) Alzal alleges that Metropolitan and IFC refused to return the Vehicle to Auto Point or Igdalev, who demanded its return. (Id. ¶¶ 14, 19-20, 22.) Instead, Metropolitan and IFC gave the Vehicle to Ultimate for body and fender repairs. (Id. ¶ 16.) Ultimate later filed a notice claiming a lien for work performed on the Vehicle. (Id. ¶ 17 & Ex. 6.) Alzal states that it has no knowledge of the current whereabouts of the Vehicle, and claims that IFC, Metropolitan, and Ultimate engaged in the course of conduct described above in a conspiracy to deprive Auto Point of the Vehicle. (Id. ¶¶ 18, 22, 26.)
Alzal alleges that it is the "successor in interest" to Auto Point's claim to the Vehicle. (Id. ¶¶ 14, 24, 26, 31.) Alzal explains that after Auto Point was adjudged bankrupt on June 19, 2013, the trustee in bankruptcy "relinquished all claim to the [V]ehicle[.]" (Id. ¶ 7.) "[H]ence the title was subsequently assigned to the plaintiff and the plaintiff is presently the owner of the [] [V]ehicle." (Id.)
IFC brings this motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of subject matter jurisdiction, and pursuant to Rule 12(b)(6), for failure to state a claim. A claim must be dismissed under Rule12(b)(1) for lack of subject matter jurisdiction "when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). In resolving a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, "the district court must take all uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). "Where jurisdictional facts are placed in dispute, the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings, such as affidavits," id. (quoting APWU v. Potter, 343 F.3d 619, 627 (2d Cir. 2003) (internal marks omitted)), in which case, "the party asserting subject matter jurisdiction `has the burden of proving by a preponderance of the evidence that it exists'" id. (quoting Makarova, 201 F.3d at 113).
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint for a plaintiff's failure "to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To withstand a motion to dismiss pursuant to Rule 12(b)(6), a complaint must plead facts sufficient "to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In evaluating a 12(b)(6) motion to dismiss, a district court must accept the factual allegations set forth in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See Nielsen v. Rabin, 746 F.3d 58, 62 (2d Cir. 2014); Cleveland v. Caplaw Enter., 448 F.3d 518, 521 (2d Cir. 2006). The liberal notice pleading standard of Rule 8(a) only requires that a complaint set forth "a short and plain statement of the claim showing that the pleader is entitled to relief." Twombly, 550 at 555. Under Rule 8(a)(2), the complaint need not set forth "detailed factual allegations," but the plaintiff must present "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. A complaint that "tenders `naked assertion[s]' devoid of `further factual enhancement'" will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 555 U.S. at 557). Rather, "[f]actual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly, 550 at 555. A complaint should be dismissed where a plaintiff has not "nudged [its] claims across the line from conceivable to plausible[.]" Id. at 570.
Alzal's Second Amended Complaint alleges that subject matter jurisdiction exists under 28 U.S.C. § 1333 as a maritime contract claim, and under 28 U.S.C. § 1337 as an action arising under an Act of Congress regulating commerce. (SAC ¶ 4.) Since Alzal fails to identify any Act of Congress that gives rise to its claims, federal jurisdiction over this action is dependent on whether Alzal can establish that the shipping agreements at issue constitute maritime contracts.
Federal district courts have original jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction . . ." 28 U.S.C. § 1331(1). This jurisdictional grant extends to contracts "which relate to the navigation, business, or commerce of the sea." Sirius Ins. Co. (UK) Ltd. v. Collins, 16 F.3d 34, 36 (2d Cir. 1994) (citations omitted); see Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 23 (2004) (a federal action can "be sustained under the admiralty jurisdiction by virtue of the maritime contracts involved"). The determination of whether maritime jurisdiction exists over a contract turns on "the nature and character of the contract" and whether the contract has "reference to maritime service or maritime transactions." Kirby, 543 U.S. at 24; see Kossick v. United Fruit Co., 365 U.S. 731, 735 (1961).
In Kirby, a seller of machinery entered into two bills of lading with a freight-forwarding company for the transportation of machinery from Australia to Alabama over both land and sea. 543 U.S. 18-20. Looking to the "nature and character of the [bills of lading]" at issue, the Supreme Court held that they constituted "maritime contracts because their primary objective is to accomplish the transportation of goods by sea from Australia to the eastern coast of the United States." Id. at 24.
Similarly, here, the primary objective of the shipping agreement at issue was to transport the Vehicle from the United States to Azerbaijan by ocean freight, and that agreement was governed by IFC's bill of lading. (See Dkt. 39 ("Def. Mem.") at 6-7 (contending that any contractual relationship regarding the shipment of the Vehicle "would be governed by IFC's standard bill of lading terms").) The agreement to ship the Vehicle, which encompasses IFC's bill of lading, therefore is a maritime contract that confers federal subject matter jurisdiction over this action. See also Asoma Corp. v. SK Shipping Co., Ltd., 467 F.3d 817, 823 (2d Cir. 2006) ("Charter parties and bills of lading are interpreted using the ordinary principles of maritime contract law."); Aston Agro-Indus. AG v. Star Grain Ltd., No. 06 CV 2805 (GBD), 2006 WL 3755156, at *3 (S.D.N.Y. Dec. 20, 2006) (contracts between seller and purchaser of wheat were "not maritime contracts because their primary objective was not the transportation of goods by sea. Instead, their primary objective was, undoubtably, the sale of wheat"; by contrast, "charter parties to accomplish the shipment of the wheat[]" are maritime contracts because "it was the primary maritime objective of those contracts to transport the wheat by sea" (emphasis in original)).
IFC contends that "the alleged facts giving rise to Alzal's loss of the Vehicle are too attenuated to the business of maritime commerce to implicate admiralty and maritime jurisdiction." (Def. Mem. at 6.) The Court disagrees.
Under the Second Circuit's threshold inquiry,
The Court turns next to the question of whether Alzal may assert rights under the relevant maritime shipping contract. As discussed below, Alzal cannot establish the requisite standing to bring this action.
IFC additionally moves to dismiss this action on the ground that Alzal lacks standing. (Def. Mem. 1-2.) Standing is a limitation on federal court jurisdiction, and may be raised sua sponte by the Court. See Central States SE and SW Areas Health and Welfare Fund v. Merck-Medco Managed Care, L.L.C., 433 F.3d 181, 198 (2d Cir. 2005); Thompson v. Cnty. of Franklin, 15 F.3d 245, 248 (2d Cir. 1994). "In order to ensure that this `bedrock' case-or-controversy requirement is met, courts require that plaintiffs establish their `standing' as `the proper part[ies] to bring' suit." W.R. Huff Asset Mgmt. Co., LLC v. Deloitte & Touche LLP, 549 F.3d 100, 106 (2d Cir. 2008) (quoting Raines v. Byrd, 521 U.S. 811, 818 (1997))
Standing comprises three elements: injury-in-fact, causation, and redressability. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992); accord Port Washington Teachers' Ass'n v. Bd. of Educ. of Port Washington Union free Sch. Dist., 478 F.3d 494, 499 (2d Cir. 2007). These "are not mere pleading requirements but rather an indispensable part of the plaintiff's case[.]" Defenders of Wildlife, 504 U.S. at 561 (citations omitted). "At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice," id., because on a motion to dismiss, the court "presumes that general allegations embrace those specific facts that are necessary to support the claim." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889 (1990). Nonetheless, a plaintiff "cannot rely solely on conclusory allegations of injury or ask the court to draw unwarranted inferences in order to find standing." Baur v. Veneman, 352 F.3d 625, 637 (2d Cir. 2003). As is the case with other jurisdictional inquiries, standing "cannot be `inferred argumentatively from averments in the pleadings,' . . . but rather `must affirmatively appear in the record.'" Thompson, 15 F.3d at 247 (quoting FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990)). As the Second Circuit has observed, "like many cases under 12(b)(1) (but not under 12(b)(6)), it may become necessary for the district court to make findings of fact to determine whether a party has standing to sue." Rent Stabilization Ass'n of City of N.Y. v. Dinkins, 5 F.3d 591, 594 (2d Cir. 1993).
Alzal lacks the requisite injury to establish standing for two reasons. First, Alzal has no legally protected interest in the Vehicle, having never received a valid assignment from Auto Point. Second, even taking as true Alzal's unsupported contention that it succeeded to Auto Point's interest in the Vehicle, Alzal's allegations and exhibits to its pleading do not permit an inference that Auto Point was a party to a contract with IFC.
Since Alzal was not involved in the transactions at issue in this action, Alzal's claims depend on its ability to establish its right to the Vehicle as a successor in interest to Auto Point. Alzal asserts in this regard that after Auto Point "was adjudged bankrupt on June 19, 2013," Auto Point's trustee in bankruptcy "relinquished all claim to the [V]ehicle . . . hence the title was subsequently assigned to [Alzal] and [Alzal] is presently the owner of the subject [V]ehicle and as a result able to prosecute this lawsuit." (SAC ¶ 7.) As an initial matter, since "standing is to be determined as of the commencement of suit," Fenstermaker v. Obama, 354 Fed. App'x. 452, 455 n.1 (2d Cir. 2009) (quoting Defenders of Wildlife, 504 U.S. at 571 n.5), Alzal's allegation that Auto Point assigned its interest to the Vehicle after the closure of the bankruptcy proceeding on June 19, 2013 essentially establishes that Alzal did not have standing when it filed its original complaint on April 29, 2013. See Clarex Ltd. v. Natixis Sec. Am. LLC, No. 12 Civ. 0722 (PAE), 2012 WL 4849146, at *4 (S.D.N.Y. Oct. 12, 2012) ("courts cannot consider any amendments to the initial complaint or any post-filing assignments to plaintiffs to determine whether plaintiffs have standing") (citing Fenstermaker, 354 Fed. App'x. at 455 n.1).
Moreover, contrary to Alzal's contention, Auto Point had relinquished its right to the Vehicle during bankruptcy proceedings and thus its trustee did not retain an interest in the Vehicle that could be "assigned" to Alzal. Publicly available records of Auto Point's proceedings in the United States Bankruptcy Court, District of Minnesota, of which this Court takes judicial notice,
These filings suggest that Auto Point represented in its bankruptcy proceedings that the Vehicle was an asset included in its estate that was liquidated to satisfy its creditors. Auto Point thus did not retain an interest in the Vehicle that it could have "assigned" to Alzal, and Alzal cannot act as a "successor in interest" to Auto Point with respect to the Vehicle. See In re Century/ML Cable Venture, 311 F. App'x 455, 456-57 (2d Cir. 2009) (purported successor in interest of creditor lacked standing to pursue creditor's alleged breach of contract claim, where assignment of creditor's claim against debtor did not occur until after creditor's forfeiture of all its assets). These records accordingly preclude the Court from drawing an inference that Alzal succeeded in Auto Point's interest in the Vehicle.
Even assuming arguendo that Alzal is the successor to Auto Point's claims regarding the Vehicle, Alzal's claim nevertheless fails because Alzal has not alleged facts sufficient to support the existence of an enforceable contract between Auto Point and IFC. In New York, "privity is essential to a contract claim." Rexo Imports LLC v. Brighton Ford, Inc, No. 14-CV-6037-FPG, 2015 WL 500488, at *3 (W.D.N.Y. Feb. 4, 2015) (citing cases); CDJ Builders Corp. v. Hudson Grp. Const. Corp., 889 N.Y.S.2d 64, 65 (N.Y. App. Div. 2009) ("Liability for breach of contract does not lie absent proof of a contractual relationship or privity between the parties." (quoting Hamlet at Willow Creek Dev. Co., LLC v. Ne. Land Dev. Corp., 878 N.Y.S.2d 97, 112 (N.Y. App. Div. 2009))). Generally, "a nonsignatory to a contract cannot be named as a defendant in a breach of contract action unless it has thereafter assumed or been assigned the contract." In re Cavalry Const., Inc., 428 B.R. 25, 30 (S.D.N.Y. 2010) (quoting Crabtree v. Tristar Auto. Grp., Inc., 776 F.Supp. 155, 166 (S.D.N.Y. 1991)), aff'd 425 F. App'x 70 (2d Cir. 2011);
Alzal's Second Amended Complaint is bereft of any factual support for its assertion that Auto Point and IFC entered into a contractual agreement concerning the Vehicle. Alzal alleges that "Igdalev on behalf of Auto Point [] contracted with Metropolitan to ship th[e] [V]ehicle" and that the shipping form "establishes a maritime contract by and between the parties." (SAC ¶ 9.) With respect to IFC, Alzal alleges only that "[w]ith I.F.C. accepting the [V]ehicle from Metropolitan for shipping[,] this created a constructive bailment between Auto Point [] and I.F.C." (Id. ¶ 12.) Absent from the pleading is any allegation that IFC knew about Auto Point. More significantly, Alzal fails to allege that either Auto Point or Alzal were signatories to the contract. Nor could it, as the warehouse receipt, shipping form, payment receipt, and invoice referenced in and appended to the Second Amended Complaint all reflect agreements and payments only between Zeynalov, the overseas purchaser of the Vehicle, and Metropolitan. (See SAC ¶¶ 9-11 & Exs. 1-4.)
For the foregoing reasons, IFC's motion is granted on the basis that Alzal has failed to sufficiently establish standing to bring this action. The Second Amended Complaint is dismissed for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). The Clerk of Court is respectfully requested to close the case.
SO ORDERED.