United States District Court, S.D. New York
MEMORANDUM OPINION AND ORDER
GREGORY H. WOODS, District Judge.
Jus Punjabi, a cable and satellite television network serving the U.S. Punjabi community, and its founder and CEO, Penny Sandhu, filed this suit against various individuals and entities that they allege committed fraud in various forms in conjunction with Get Punjabi, a rival television network. In response to a motion to dismiss, plaintiffs filed an amended complaint ("AC" at Dkt. Nos. 34, 36), adding as parties three additional entities, and including information about individual defendants' relationships to those entities.
On September 19, 2014, defendants Get Punjabi U.S. Inc., Harwinder Singh, Maninder Singh, Manish Vasisht, Pardes News Media, Inc., and Balwant Singh Mallah filed a motion to dismiss the amended complaint. Dkt. No. 38. Defendant Ashok Mathias, who answered the original complaint, see Dkt. No. 20, filed a "Joinder to Motion to Dismiss Amended Complaint, " Dkt. No. 39, and a "Response and Joinder to Reply in Support of Motion to Dismiss Amended Complaint, " Dkt. No. 43, in which he purports to join the argument sections of the other defendants' memoranda of law in support of their motion. Defendants IKK Onkar Media U.S. Inc., Iris Mediaworks, Limited, and Iris Mediaworks USA, Inc., who were added in the amended complaint, and defendant Amit Khurana have not appeared in this case.
For the reasons outlined below, the moving defendants' motion to dismiss is GRANTED as to the RICO and Lanham Act claims. Having thus dismissed the only claims raising a federal question, and that being the only basis for federal jurisdiction over this lawsuit, the Court declines to exercise jurisdiction over the remaining state law claims.
Ms. Sandhu founded Jus Punjabi in 2005 as a television network designed for the Punjabi community in the United States. Because most Punjabis in the U.S. speak the Punjabi dialect, and most of the Indian cable networks in the U.S. broadcast in Hindi, Ms. Sandhu saw an opportunity to create a network broadcasting in Punjabi. AC at ¶ 22. Additionally, because, according to plaintiffs, most Punjabis in the U.S. are well-educated and sophisticated, and most of the Indian cable networks in the U.S. broadcast primarily "simplistic, " "formulaic" content such as sitcoms and soap operas, Ms. Sandhu "envisioned a network that relied on information and news content." AC at ¶¶ 22-23, 27. As part of Ms. Sandhu's effort to create such a network, Jus Punjabi introduced daily live programming-otherwise unavailable to Indian television audiences in the U.S.-covering news and current events, and offering call-in participation from viewers. In founding Jus Punjabi, Ms. Sandhu cultivated relationships and negotiated with both advertisers and cable and satellite providers. She fully launched the 24-hour-a-day network in 2007, and it "swiftly gained the reputation of a premium cable and satellite channel." AC at ¶¶ 28-29.
The defendants are affiliated with Get Punjabi, a rival television network. Plaintiffs allege that defendants undertook a scheme to defraud them and ultimately destroy Jus Punjabi. Plaintiffs allege that all of the defendants began "more than two years ago to engage in sustained, ongoing schemes" to defraud plaintiffs and put them out of business. AC at ¶ 40. Defendants allegedly stole confidential information from plaintiffs and used it to try and appropriate Jus Punjabi's business, including usurping relationships Jus Punjabi had built up with advertisers and broadcasting "copycat" live call-in news shows, each starting 30 minutes before each of Jus Punjabi's identically-formatted shows aired. AC at ¶¶ 43-44.
The scheme to destroy Jus Punjabi allegedly originated with Ms. Sandhu's hiring of defendant Amit Khurana in 2008. At the time, Jus Punjabi sponsored Mr. Khurana's H-1B visa so that he could live and work in the United States. As part of his work at Jus Punjabi, Mr. Khurana had access to confidential information, including the price structures of agreements between Jus Punjabi and its advertisers, as well as the identities of key contact people at those advertisers. On November 3, 2011-after he had already worked at Jus Punjabi for about three years-Mr. Khurana signed a noncompete/confidentiality agreement. AC at ¶ 30.
At some point (plaintiffs do not say when), defendants (plaintiffs do not say who) allegedly recruited Mr. Khurana to steal information from Jus Punjabi and bring it to them. Defendants (again, unidentified) also allegedly recruited defendant Ashok Mathias, plaintiffs' accountant, and one of his associates, defendant Harwinder Singh, to provide defendants with confidential financial information, including "corporate and personal tax returns, bank account statements, confidential financial statements and budgets, and business plans and projections." AC at ¶ 45. Additionally, defendants (still unidentified) allegedly recruited defendant Balwant Singh Mallah to breach an employment agreement with Jus Punjabi and join Get Punjabi as on-air talent.
Plaintiffs also allege that defendants "financed their theft of Jus Punjabi's business by massive tax avoidance and money laundering schemes, " AC at ¶ 47, and that Get Punjabi is "primarily financed by illegal means, " including defendant Maninder Singh's operation of construction companies that employ illegal aliens and do not pay proper wages. AC at ¶ 49.
In Counts 1-4 of their complaint, plaintiffs allege violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). In particular they allege that the defendants: (1) "conducted and participated in the conduct of" a RICO enterprise "through a pattern of racketeering activity" in violation of 18 U.S.C. § 1962(c); (2) "received income derived, directly or indirectly, from a pattern of racketeering activity to use or invest, directly or indirectly, a part or all of such income, or the proceeds of such income, in the acquisition of an interest in, or the establishment or operation of" a RICO enterprise, in violation of 18 U.SC. § 1962(a); (3) "through a pattern of racketeering activity have acquired and maintained, directly or indirectly, an interest in" a RICO enterprise, in violation of 18 U.S.C. § 1962(b); and (4) conspired to violate these subsections, in violation of 18 U.S.C. § 1962(d). See AC at ¶¶ 58-73.
In Count 5, plaintiffs allege that the defendants violated the Lanham Act, 15 U.S.C. § 1125(a)(1), by misrepresenting the nature, characteristics, and qualities of Jus Punjabi's goods, services, and commercial activities, in their advertising, marketing, and promotional activities. See AC at ¶¶ 74-76. Counts 6-8 are claims under New York state law for tortious interference and breach of contract. See AC at ¶¶ 77-85.
III. LEGAL STANDARD-MOTION TO DISMISS
"Although on a motion to dismiss a court must accept all factual allegations as true and draw all inferences in the plaintiff's favor, dismissal is appropriate if the plaintiff can prove no set of facts that would entitle him to relief." Levy v. Southbrook Int'l Investments, Ltd., 263 F.3d 10, 14 (2d Cir. 2001), cert. denied, 535 U.S. 1054 (2002) (citations omitted). Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Rule 8 "does not require detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), plaintiffs must allege in their complaint facts that, if accepted as true, "state a claim to relief that is plausible on its face." Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To meet this plausibility standard, plaintiffs must "plead factual content that allows the court to draw the reasonable inference that the defendant[s] [are] liable for the misconduct alleged." Id.
Legal conclusions need not be accepted as true, thus "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557). To avoid dismissal, plaintiffs must "nudge their claims across the line from conceivable to plausible." Twombly, 550 U.S. at 570.
Also relevant to this case, as described in more detail below, is Federal Rule of Civil Procedure 9(b), which requires a party alleging fraud or mistake to "state with particularity the circumstances constituting fraud or mistake." Thus, where plaintiffs allege fraud, in their complaint they must: (1) "adequately specify the statements [they] claim were false or misleading"; (2) "give particulars as to the respect in which plaintiff[s] contend the statements were fraudulent"; (3) "state when and where the statements were made"; and (4) "identify those responsible for the statements." Lundy v. Catholic Health Sys., 711 F.3d 106, 119 (2d Cir. 2013) (quoting Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989)); see also Rombach v. Chang, 355 F.3d 164, 170 (2d Cir. 2004) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1176 (2d Cir. 1993)).
Defendants now move to dismiss plaintiffs' RICO and Lanham Act claims under Rule 12(b)(6) for failure to state a claim upon which relief can be granted, and urge the Court not to retain jurisdiction over the remaining state law claims. Because the Court agrees with the moving defendants that plaintiffs have failed to state a claim under any provision of RICO or under the Lanham Act, and because the Court declines to exercise its supplemental jurisdiction over the remaining state law claims, their motion is granted.
A. RICO Claims
The moving defendants assert that plaintiffs failed to properly allege their RICO claims because they did not allege RICO predicate acts of fraud with the requisite particularity and they did not adequately plead all of the required elements of a RICO violation. To establish a civil damages claim under RICO, plaintiffs must allege: "(1) a violation of the RICO statute, 18 U.S.C. § 1962; (2) an injury to business or property; and (3) that the injury was caused by the violation of Section 1962." Spool v. ...