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Tymoshenko v. Firtash

United States District Court, Second Circuit

August 28, 2013

YULIA TYMOSHENKO and JOHN DOES 1 through 50, on behalf of themselves and all those similarly situated, Plaintiffs,
v.
DMYTRO FIRTASH, et al., Defendants.

OPINION & ORDER

KIMBA M. WOOD, District Judge.

Yulia Tymoshenko, former Prime Minister of Ukraine, brings this action on behalf of herself and other former officials (collectively, "Plaintiffs") for alleged violations of their human rights. Plaintiffs' Amended Complaint ("AC") asserts claims under the Alien Tort Statute ("ATS"), the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and state law for breach of fiduciary duty and malicious prosecution.

Defendant Nadra Bank moves to dismiss the AC pursuant to Federal Rules of Civil Procedure 8, 9(b), 12(b)(1), 12(b)(2), and 12(b)(6). For the following reasons, the Court GRANTS Nadra Bank's motion to dismiss.

I. RELEVANT BACKGROUND

Because the factual background of this case is fully detailed in previous opinions, the Court provides only a summary here. See Tymoshenko v. Firtash, No. 11-CV-2794, 2013 WL 1234943 (S.D.N.Y. Mar. 27, 2013) (Wood, J.) [Dkt. No. 79]; Tymoshenko v. Firtash, 2013 WL 1234821 (S.D.N.Y. Mar. 26, 2013) (Wood, J.) [Dkt. No. 78]. The following allegations, drawn from the AC, are accepted as true for purposes of Nadra Bank's motion to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

While serving as Prime Minister, Tymoshenko renegotiated Ukraine's natural gas contracts with Russia and, in doing so, eliminated RosUkrEnergo AG ("RUE") as an intermediary. (AC ¶ 9). RUE, a company in which Defendant Dmytro Firtash owns a 45% stake (AC ¶ 31), consequently suffered a"significant loss of business." (AC ¶ 9). Firtash allegedly retaliated against Tymoshenko by financing the election of her party's political opposition- including current President Viktor Yanukovych (AC ¶ 147)-and by bribing Ukrainian officials to engage in"a widespread and systematic pattern of political persecution" against Plaintiffs. (AC ¶ 23). Specifically, Plaintiffs claim that they"have been arbitrarily arrested, detained, and prosecuted on unfounded, politically-motivated criminal charges in violation of international law." (AC ¶ 2)

Plaintiffs contend that this political persecution is facilitated by a complex racketeering scheme perpetuated by both American and foreign individuals and businesses (collectively, "Defendants"). (AC ¶¶ 27-44). To transfer funds into offshore accounts and conceal illegal kickbacks to Ukrainian government officials, Firtash and other Defendants allegedly engaged in money laundering, mail fraud, and wire fraud using a"labyrinth of shell companies." (AC ¶¶ 95-96, ¶¶ 278-83). Nadra Bank is named as one of the thirty-nine companies which are allegedly part of this"labyrinth." (AC ¶ 96).

Nadra Bank is Ukraine's fifth largest bank. (AC ¶ 135). In May 2011, Firtash-through a holding company, Centragas Holding AG-acquired a controlling interest in Nadra Bank. (AC ¶¶ 96, 135). Subsequently, "Firtash and Centragas have used Nadra Bank to transfer unlawfully obtained proceeds... to bank accounts in New York and elsewhere and to Firtash [and his] organized crime associates to be used for political bribery and other unlawful purposes." (AC ¶ 137). Plaintiffs note that, as of June 2011, Nadra Bank had roughly $500 million deposited in New York accounts. (AC ¶ 136).

Plaintiffs filed their Complaint and Amended Complaint on April 26, 2011 and December 19, 2011, respectively. The AC alleges violations of the ATS and RICO, as well as state law claims for breach of fiduciary duty and malicious prosecution. (AC ¶ 261-94). Between April and August 2012, the United States-based individuals and corporations named in the AC (collectively, the"U.S. Defendants") and Defendant RUE moved to dismiss the AC. The Court granted RUE's motion to dismiss because Plaintiffs had failed to establish personal jurisdiction over RUE, a Ukrainian corporation. [Dkt. No. 79]. The Court also granted the U.S. Defendants' motion to dismiss, holding (1) that the political persecution discussed in the AC is not actionable under the ATS because it is not"arbitrary, " and (2) that Plaintiffs failed to state a claim under RICO because the alleged misconduct occurred abroad. [Dkt. No. 26]. On September 4, 2012, Defendant Nadra Bank moved to dismiss the AC pursuant to Rules 8, 9(b), 12(b)(1), 12(b)(2), and 12(b)(6). [Dkt. No. 66]. On April 22, 2013, this Court requested additional briefing from the parties regarding"the effect, if any, "of the Supreme Court's recent decision in Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659 (2013), on the issues presented in Nadra Bank's motion to dismiss. [Dkt. No. 81]. Nadra Bank submitted its supplemental materials on April 29, 2013 [Dkt. No. 83], and Plaintiffs responded on May 6, 2013, [Dkt. No. 84].

II. LEGAL STANDARD

To survive a 12(b)(6) motion to dismiss, a plaintiff must plead factual allegations adequate"to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible"when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Aschcroft, 556 U.S. at 678 (2009). The Court must accept as true all well-pleaded factual allegations in the complaint and"draw[] all inferences in the plaintiff's favor." Allaire Corp v. Okumus, 433 F.3d 248, 249-50 (2d Cir. 2006) (internal quotations omitted).[1] "[T]he standards for dismissal under 12(b)(6) and 12(b)(1) are substantively identical." Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d Cir. 2003).

III. DISCUSSION

A. Plaintiffs' ...


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