United States District Court, S.D. New York
February 7, 2005.
OSRECOVERY, INC., et al., Plaintiffs,
ONE GROUPE INTERNATIONAL, INC., et al., Defendants.
The opinion of the court was delivered by: LEWIS KAPLAN, District Judge
Defendant Latvian Economic Commercial Bank ("Lateko") moves for
reconsideration of so much of this Court's recent decision as
sustained subject matter jurisdiction over certain of the RICO
claims asserted on behalf of domestic plaintiffs. OSRecovery,
Inc. v. One Groupe Int'l, Inc., No. 02 Civ. 8993 (LAK), 2005 WL
121741 (S.D.N.Y. Jan. 21, 2005). It argues in substance that this
Court based its decision on an inference that domestic plaintiffs
would be able to satisfy the effects tests by inferring that
Lateko issued debit cards that gave certain other defendants
access to the accounts of domestic plaintiffs, thus resulting in
the loss of their funds. It argues that this overlooked APWU v.
Potter, 343 F.3d 619 (2d Cir. 2003), which, it contends,
precludes the drawing of any such inference.
Lateko overreads Potter. No one, least of all the
undersigned, questions that "[j]urisdiction must be shown
affirmatively, and that showing is not made by drawing from the
pleadings inferences favorable to the party asserting it." Id.
at 623. The statement, however, is meaningful only in the
appropriate procedural context.
On a motion to dismiss for lack of subject matter jurisdiction,
the complaint "will be construed broadly and liberally." 5B
CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE: CIVIL
3D § 1350, at 180 (2004). This, of course, does not mean that
conclusory or argumentative assertions will be taken in the
plaintiff's favor. Id. at 181-85. But the plaintiff is entitled
to some latitude at the pleading stage, particularly where the
alleged deficiency of the pleading could be cured readily by
"In resolving a motion to dismiss for lack of subject matter
jurisdiction under Rule
12(b)(1), a district court may refer to evidence outside the
pleadings, such as affidavits and other documents. While the
plaintiff has the ultimate burden of establishing subject matter
jurisdiction and generally must establish jurisdiction by a
preponderance of the evidence when the defendant makes a `factual
challenge' on a Rule 12(b)(1) motion, `where "[subject matter]
jurisdiction is so intertwined with the merits that its
resolution depends on the resolution of the merits, the trial
court should employ the standard applicable to a motion for
summary judgment."'" First Capital Asset Mgmt., Inc. v.
Brickellbush, 218 F.Supp.2d 369, 378-79 (S.D.N.Y. 2002),
aff'd, 385 F.3d 159 (2d Cir. 2004).
That is what the Court did here. As the evidence permitted the
inference that at least some domestic plaintiffs were injured by
Lateko's alleged RICO violations, the matter could not be
resolved on this motion. While the Court might have held an
evidentiary hearing, it concluded that the question of which
plaintiffs, if any, were injured and in what ways is intertwined
with the merits. Accordingly, the matter will be deferred for
trial, at least in the absence of a timely summary judgment
motion permitting pretrial resolution. See 5B CHARLES ALAN
WRIGHT ET AL. § 1350, at 243-45.
Motion for reconsideration denied.
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