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BABB v. CapitalSOURCE, INC., 14-712-cv. (2015)

Court: Court of Appeals for the Second Circuit Number: infco20150106083 Visitors: 5
Filed: Jan. 06, 2015
Latest Update: Jan. 06, 2015
Summary: 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 REPRESENT
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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.

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment entered on February 10, 2014, is REVERSED in part and AFFIRMED in part.

Plaintiffs appeal from the dismissal of their Second Amended Complaint ("SAC") for lack of jurisdiction under the so-called Rooker-Feldman doctrine, see District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v. Fid. Trust Co., 263 U.S. 413 (1923); see also Fed. R. Civ. P. 12(b)(1), and the alternative dismissal of their claims under the Racketeering Influenced and Corrupt Organizations Act ("RICO"), Pub. L. No. 91-452, tit. IX, 84 Stat. 922, 941-48 (1970) (codified as amended at 18 U.S.C. §§ 1961-1968), for failure to state a claim, see Fed. R. Civ. P. 12(b)(6). Plaintiffs contend both that these decisions were incorrect and that dismissal should not have been ordered without allowing them to amend their complaint. See Fed. R. Civ. P. 15(a)(2). We assume the parties' familiarity with the facts and the record of prior proceedings, which we reference only as necessary to explain our decision to reverse the district court's jurisdictional holding and to affirm the judgment on the merits.

1. Rooker-Feldman

On de novo review of the district court's application of Rooker-Feldman, see Hoblock v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 83 (2d Cir. 2005), we identify error in light of our most recent controlling precedent, see Vossbrinck v. Accredited Home Lenders, Inc., ___ F.3d ___, No. 12-3647-cv, 2014 WL 6863669 (2d Cir. Dec. 8, 2014). Vossbrinck makes clear that plaintiffs' suit is not barred by Rooker-Feldman because the SAC seeks damages for injuries suffered as a result of defendants' alleged fraud and does not attempt to reverse or undo a state court judgment. See id. at *3. We therefore reverse the district court's holding that it lacked jurisdiction.

2. Failure To State a RICO Claim

"We review de novo dismissal of a complaint for failure to state a claim upon which relief can be granted, accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff's favor." Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 113 (2d Cir. 2013) (internal quotation marks omitted).

To state a RICO claim predicated on mail or wire fraud, a complaint must "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." Moore v. PaineWebber, Inc., 189 F.3d 165, 173 (2d Cir. 1999); see also Fed. R. Civ. P. 9(b). "The plaintiffs must also identify the purpose of the mailing [or wire communication] within the defendant's fraudulent scheme." Moore v. PaineWebber, Inc., 189 F.3d at 173 (internal quotation marks omitted). "In addition, the plaintiffs must allege facts that give rise to a strong inference of fraudulent intent." Id. (internal quotation marks omitted).

Here, the SAC fails to plead the purportedly fraudulent statements with any particularity, fails to identify the purposes of the mailings or wire communications within the fraudulent scheme, and fails to allege facts that might support a finding of fraudulent intent. Accordingly, we conclude that the district court was correct that the SAC's RICO claims must be dismissed pursuant to Fed. R. Civ. P. 12(b)(6).

3. Leave To Amend

No different conclusion is warranted because plaintiffs were denied leave to amend their complaint, a decision we review only for abuse of discretion. See Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir. 2008). Because plaintiffs were alerted to the deficiencies in their complaint at a pre-motion conference before filing the SAC, and because the district court was clear at that conference that it would not allow plaintiffs any more amendments after the SAC, the denial of another attempt to amend was not an abuse of discretion. See id. at 191-92.

We have considered plaintiffs' remaining arguments and conclude that they are without merit. We therefore REVERSE the district court's jurisdictional holding but, on the merits, AFFIRM the judgment of dismissal.

FootNotes


* The Clerk of Court is directed to amend the official caption as shown above.
Source:  Leagle

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