CEVDET AKSUT VE OGULLARI KOLL.STI v. CAVUSOGLU et al
OPINION. Signed by Judge William J. Martini on 3/28/17. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CEVDET AKSÜT OĞULLARI KOLL. STI,
Civ. No. 2:14-3362
ROBIN A. CAVUSOGLU, et al.,
WILLIAM J. MARTINI, U.S.D.J.:
Plaintiff Cevdet Aksüt Oğullari Koll. Sti (“Plaintiff”) brings this action against
Huseyin Cavusoglu and multiple associates, including American Pistachio Commodities
Corporation d/b/a Sunrise Commodities, David Cottam, and Andrew Rosen (collectively
“Sunrise Defendants” or “Sunrise”), and Mordy Dicker, alleging thirteen counts of New
Jersey, federal and common law violations, in connection with the fraudulent importation
of food products from Turkey to the United States. This matter comes before the Court on
Sunrise Defendants’ partial motion to dismiss under Federal Rule of Civil Procedure 12(c)
for judgment on the pleadings with respect to Counts IV and V of the Complaint. There
was no oral argument. Fed. R. Civ. P. 78(b). For the reasons set forth below, Defendants’
motion to dismiss is GRANTED and Counts IV and V are DISMISSED.
In general, the Complaint alleges that Sunrise Defendants, Dicker and others
conspired with Cavusoglu in operating a fraudulent enterprise that induced Turkish food
suppliers to ship their goods to Defendants for sale in the United States (the “RICO
enterprise”). Plaintiff seeks to collect an unpaid debt of approximately $1.1 million in
connection with its business dealings with the RICO enterprise. The Court assumes the
parties’ familiarity with the facts of this case, which are summarized in two opinions
addressing previous motions to dismiss filed by Sunrise and Dicker. See Op. 3–8, ECF
No. 69; Op. 2–3, ECF No. 71.
The Court underscores a few facts that are particularly relevant to the instant motion.
Plaintiff is a Turkish corporation with its principal place of business in Nazilli, Turkey.
Compl. ¶ 5, ECF No. 1. Sunrise Defendants and Dicker are residents of the United States.
Id. at ¶¶ 30, 33, 35, 37. Cavusoglu is also a United States resident and operated several
shell corporations in connection with the alleged RICO enterprise out of Linden, New
Jersey. See id. at ¶¶ 6, 39–40. Cavusoglu coordinated with Sunrise and Dicker to have
Plaintiff’s goods stored at the Linden property. See id. at ¶¶ 69–83, 90–95, 147–56.
Plaintiff was first introduced to Cavusoglu through an individual named Aret
Museoglu, who was a representative of Plaintiff’s previous customer. Museoglu
recommended Cavusoglu as a business partner, representing that he was a “big player” in
the Turkish-food-import business. Id. at ¶ 137. After Plaintiff had delivered most of its
goods, Museoglu recanted his previous statements and admitted that he knew Cavusoglu
to be dishonest and that he took unfair advantage of his suppliers. See id. at ¶ 157. In
return for kickbacks from the sale of Plaintiff’s goods, Museoglu conspired with Cavusoglu
to induce Plaintiff to transact with the RICO enterprise by making false representations
about Cavusoglu’s personal integrity, intentions, market share, customer base and past acts.
See id. at ¶¶ 158, 160. Finally, the record reflects that Plaintiff’s invoices concerning some,
but not necessarily all, of the shipped goods indicate “FOB.IZMIR.” See id., Ex. 15.
Sunrise now moves to dismiss only Counts IV and V of the Complaint, which allege
violations of the New Jersey Racketeer Influenced Corrupt Organizations (“RICO”) Act,
N.J.S.A. § 2C:41-1 et seq., and the United States RICO Act, 18 U.S.C. § 1961 et seq.,
(collectively the “RICO claims”). See Compl. at ¶¶ 276–94; Br. in Supp. of Mot. to
Dismiss Pl.’s RICO Claims (“Defs.’ Mot.”) 1, ECF No. 126-1. Dicker joins the motion.
See Letter, ECF No. 127. Sunrise argues that, in light of the Supreme Court’s recent ruling
in RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090 (2016), Plaintiff’s RICO claims
fail as a matter of law because Plaintiff cannot show that it suffered a “domestic injury” to
its business or property. See Defs.’ Mot. at 3. In applying a legal test adopted by the
Southern District of New York, Sunrise asserts that any injury to Plaintiff occurred in
Turkey because Plaintiff maintained no business operations in the United States and
Plaintiff relinquished possession of its goods when it delivered them to a third-party shipper
in Turkey. See id. at 10–12.
Plaintiff responds that the RJR decision is distinguishable because all of the alleged
RICO predicate acts in RJR occurred in Europe, whereas all of the predicate acts in the
instant case occurred in the United States. See Pl.’s Br. in Opp’n to the Mot. to Dismiss
(“Pl.’s Opp’n”) 6–7, ECF No. 134. Furthermore, the RJR plaintiffs waived their damages
claims to domestic injuries. Id. Second, Plaintiff argues that its domestic property was
injured because of losses it incurred as a result of its inability to satisfy a judgment that it
obtained in 2011 against an entity connected to the RICO enterprise. See id. at 7–10. Third,
in applying a different test established by the Central District of California, Plaintiff argues
that this Court should look to where nearly all of the unlawful conduct took place—i.e., the
United States—in determining where the economic injury occurred. See id. at 13–15.
Finally, Plaintiff asserts that its domestic business was injured because it had
approximately $1 million of annual sales to customers in the United States prior to
transacting with the RICO enterprise. See id. at 16.
In its reply, Sunrise counters that the case upon which Plaintiff relies is an outlier
from the multitude of other district court decisions applying the RJR holding and is
otherwise distinguishable from the instant case because the plaintiff in that case maintained
substantial business operations within the United States. See Reply Br. in Further Supp. of
Mot. to Dismiss Pl.’s RICO Claims (“Defs.’ Reply”) 4–8, ECF No. 135. Sunrise argues
that Plaintiff’s claim of damage to its domestic business fails because it never maintained
any business operations within the United States and, therefore, cannot allege damage to a
United States-based business operation. See id. at 9–10. Sunrise further argues that
Plaintiff’s claim of damage to its judgment as property fails because it is a “downstream
effect” of Plaintiff’s initial injury. See id. at 12. Moreover, Plaintiff’s judgment concerns
only one transaction between Sunrise and Cavusoglu, which does not satisfy a pattern of
racketeering as required by law, and Plaintiff’s “lost-debt” theory of damages is not yet
cognizable before the Court. See id. at 13–15. Dicker joins Sunrise’s arguments in reply
and further asserts that any RICO claim against him fails because he has had no relationship
or involvement with any of the parties since 2007. See Letter, ECF No. 136. Sunrise notes,
and Plaintiff does not contest, that the New Jersey RICO statute is nearly identical to the
federal RICO statute. See Defs.’ Mot. at 3 n.2. The Court, therefore, will consider both
Pursuant to Federal Rule of Civil Procedure 12(c), judgment on the pleadings will
be granted only if “the movant clearly establishes there are no material issues of fact, and
he is entitled to judgment as a matter of law.” Sikirica v. Nationwide Insurance Co., 416
F.3d 214, 220 (3d Cir. 2005). The court “must view the facts presented in the pleadings
and the inferences to be drawn therefrom in the light most favorable to the nonmoving
party.” Id. In deciding a motion for judgment on the pleadings, the court “considers only
the complaint, any attached exhibits, documents relied upon in the complaint, matters of
public record, and any indisputably authentic documents.” See Hlista v. Safeguard Props.,
LLC, 649 F. App’x 217, 218 n.2 (3d Cir. 2016) (quotation and citations omitted).
The critical question before the Court is whether a foreign corporation, with its
principal place of business located in a foreign country, can allege a “domestic injury”
under RICO civil liability for predicate acts committed by U.S. residents while located in
the United States. Before answering that question, the Court will first address the Supreme
Court’s analysis of RICO civil liability, which established that a RICO civil plaintiff must
allege a “domestic injury.” The Court will next consider decisions issued by various
district courts in the aftermath of the RJR decision, including those brought to the fore by
the parties’ papers.
A. The Domestic Injury Requirement
RICO civil liability creates a cause of action for “[a]ny person injured in his business
or property” as a consequence of RICO predicate acts. See 18 U.S.C. § 1964(c). In RJR,
the Supreme Court addressed whether the civil cause of action applied extraterritorially—
i.e., “to events occurring and injuries suffered outside the United States.” See 136 S. Ct. at
2096. The case concerned an American cigarette manufacturer’s involvement in a scheme
where organized crime syndicates smuggled narcotics into Europe, the proceeds of which
were used to pay for large shipments of the manufacturer’s cigarettes into Europe. See id.
at 2098; see also European Cmty. v. RJR Nabisco, Inc., No. 02-cv-5771, 2011 WL 843957,
at *1–2 (E.D.N.Y. Mar. 8, 2011). The complaint alleged a pattern of racketeering
undertaken by the manufacturer, which consisted of money laundering, mail fraud, wire
fraud and other RICO predicate acts. See 136 S. Ct. at 2098. Plaintiffs, the European
Community and 26 of its member states, claimed that they were harmed by the
manufacturer’s predicate acts in the form of “competitive harm to their state-owned
cigarette businesses, lost tax revenue from black-market cigarette sales, harm to European
financial institutions, currency instability, and increased law enforcement costs.” See id.
The Supreme Court was confronted with two questions: (1) whether RICO’s
substantive prohibitions under § 1962 applied to conduct that occurred in foreign countries;
and (2) whether RICO’s private right of action under § 1964(c) applied to injuries suffered
in foreign countries. Id. at 2099. The Court articulated a two-step inquiry in analyzing
issues of extraterritoriality. First, courts must determine whether the statute in question
“gives a clear, affirmative indication that it applies extraterritorially.” If not, then courts
must determine whether the case at bar involves “a domestic application of the statute,”
which is determined by the statute’s “focus” and where the relevant conduct of that focus
occurred. If the relevant conduct occurred in the United States, “then the case involves a
permissible domestic application” of the statute; however, if the relevant conduct occurred
in a foreign country, “then the case involves an impermissible extraterritorial application
regardless of any other conduct that occurred in U.S. territory.” See id. at 2101.
In answering the second question, the Court held that § 1964(c) did not overcome
the presumption against extraterritoriality regardless of whether the alleged predicate acts
under § 1962 applied extraterritorially. See id. at 2106. Consequently, a private RICO
plaintiff “must allege and prove a domestic injury to its business or property.” Id.
(emphasis original). The Court acknowledged the potential for “international friction” if
RICO civil liability allowed recovery for foreign injuries in U.S. courts, including treble
damages, which might exceed recovery in foreign states. See id. at 2106–08. In applying
the first step of its inquiry, the Court found that “[n]othing in § 1964(c) provides a clear
indication that Congress intended to create a private right of action for injuries suffered
outside of the United States.” Id. at 2108. The Court declined to apply the second step,
however, because the plaintiffs waived their damages claims for domestic injuries at the
district court level. See id. at 2111. Consequently, the Supreme Court never addressed the
issue present now: whether a foreign corporation with no substantial business operations
in the United States can nevertheless allege a domestic injury under § 1964(c) for predicate
acts committed by U.S. residents that occurred within the United States. Indeed, as the
Court presciently counseled, “[t]he application of this rule in any given case will not always
be self-evident, as disputes may arise as to whether a particular alleged injury is ‘foreign’
or ‘domestic.’” Id.
B. District Courts’ Applications of the Domestic Injury Requirement
Several district courts have considered the meaning of “domestic injury” in light of
the Supreme Court’s RJR decision. As the parties’ papers indicate, two separate, and
apparently conflicting, lines of reasoning have emerged from these opinions. The first line,
for which Sunrise advocates, focuses on where the alleged injury was suffered. The second
line, for which Plaintiff advocates, focuses on where the conduct occurred that caused the
injury. Obviously, the outcome of the present dispute hinges on the prevailing line of
reasoning, which the Court will now consider.
In Elsevier, Inc. v. Grossman, the Southern District of New York (“SDNY”)
considered the domestic injury question where plaintiffs, who were publishing companies
based in Amsterdam, Paris, London and New York, alleged RICO claims related to the
fraudulent conduct of defendant, who was a Brazilian citizen and resident. 199 F. Supp.
3d 768, 774 (S.D.N.Y. 2016). Plaintiffs alleged that defendant defrauded them by
acquiring journal subscriptions at a discounted rate for individual readers and then
forwarding those subscriptions to Brazilian institutions, which were not eligible for the
discounted rate. Id. at 775. In service of the scheme, defendant established a New York
corporation and bank account, which he used to pay plaintiffs. Defendant also maintained
a New York residence where some of the subscriptions were sent. Id. at 774–75. Despite
committing a substantial amount of conduct relevant to the mail fraud statute’s “focus” in
the United States, the court determined that defendant could not be civilly liable under §
1964(c). Plaintiffs alleged injuries to their businesses and properties. In general, the court
determined that business injuries occur where substantial negative business consequences
are felt and that property injuries occur where plaintiffs parted with their property or where
the property was damaged. See id. at 786. The court reasoned that plaintiffs’ business
injuries were not domestic because defendant’s conduct only affected plaintiffs’
relationships with Brazilian institutions and had no impact on plaintiffs’ U.S. customers.
See id. at 787–88. Plaintiffs’ property injuries were not domestic because plaintiffs
released control of their property in the Netherlands, which was where they shipped
journals to the United States and Brazil. See id. at 788–89.
A month later, in Bascuñan v. Elsaca, the SDNY applied similar reasoning where
the individual plaintiff and defendants were Chilean citizens and residents, and corporate
plaintiffs and defendants were incorporated in either Chile or the British Virgin Islands.
No. 15-cv-2009, 2016 WL 5475998, at *1 (S.D.N.Y. Sept. 28, 2016). The court analogized
§ 1964(c) to New York’s choice-of-law statute, which provides that an economic injury
accrues where the injured party resides. A business’s residence is either its place of
incorporation or its principal place of business. See id. at *4. Thus, plaintiffs’ injuries
were not domestic because their businesses were incorporated abroad and they had no
business operations in the United States. See id. at *5–6. The court did not distinguish
between business and property injuries.
In Tatung Co., Ltd. v. Hsu, the Central District of California departed from the
SDNY and applied the second line of reasoning, which focused on where the RICO
predicate acts occurred that caused the alleged harm. See No. 13-cv-1743, 2016 WL
6683201, at *5–8 (C.D. Cal. Nov. 14, 2016). Plaintiff was a foreign corporation and
defendants were mainly U.S. citizens and residents. See id. at *7. Plaintiff maintained a
“hub” of business in the United States, and extended credit and delivered goods to one of
the defendants within the United States.1 When defendant defaulted on its credit
obligation, Plaintiff was awarded a judgment through arbitration, which proceeded in
California pursuant to a contractual agreement. Plaintiff subsequently alleged a RICO
conspiracy between defendant and many others to fraudulently siphon funds from
defendant’s corporation and render it an empty shell, in avoidance of the judgment. See
id. The court found that RICO civil liability was appropriate because “the defendants
specifically targeted their conduct at California with the aim of thwarting [plaintiff’s] rights
in California” and that “[i]t would be absurd to find that such activity did not result in a
domestic injury to [p]laintiff.” See id. at *8. The court declined to follow “the Bascuñan
rule” because it amounted to “immunity for U.S. corporations who, acting entirely in the
United States, violate civil RICO at the expense of foreign corporations doing business in
this country.” See id. at *7. “It is ludicrous to think that a foreign individual could not sue
under civil RICO for financial injuries incurred while they are working, traveling, or doing
business in this country as the result of an American RICO operation.” Id.
Other courts have considered the “domestic injury” question under varying
circumstances, but most of them did not focus on where the RICO predicate acts occurred;
rather, most of the courts appear to have focused on where plaintiffs’ injuries were felt.
See, e.g., Absolute Activist Value Fund Ltd. v. Devine, No. 15-cv-328, 2017 WL 519066,
at *19–20 (M.D. Fl. Feb. 8, 2017) (finding that foreign corporate plaintiffs suffered their
economic injuries where they were located, not where the RICO predicate acts occurred);
City of Almaty, Kazakhstan v. Ablyazov, No. 15-cv-5345, 2016 WL 7756629, at *9
(S.D.N.Y. Dec. 23, 2016) (sharing in the Tatung court’s hesitation to apply a blanket rule
but nevertheless finding that foreign plaintiffs did not suffer a domestic injury because they
did not hold assets, maintain business operations or have any other presence in the United
States); Exeed Indus., Inc. v. Younis, No. , 2016 WL 6599949, at *3 (N.D. Ill. Nov. 8, 2016)
(finding that foreign plaintiffs did not suffer a domestic injury despite the fact that the
illegally obtained funds were used to purchase land in the United States).
Notably, however, a sister court in this district looked to where defendant’s conduct
occurred. See Akishev v. Kapustin, No. 13-cv-7152, 2016 WL 7165714, at *5–8 (D.N.J.
Dec. 8, 2016). In Akishev, plaintiffs were citizens of multiple foreign countries that were
induced to purchase used cars from defendant’s dealership, which was based in
Pennsylvania and New Jersey. See id. at *7. Plaintiffs were induced to purchase the cars
through defendant’s misrepresentations on its United States-based website. See id. The
court reasoned: “If plaintiffs traveled to the United States, went to the physical location of
Exhibits filed in connection with defendants’ motion for summary judgment in Tatung indicated that plaintiff
maintained warehouses where it stored inventory in El Paso, Texas, and Los Angeles, California, to which it referred
as the “El Paso HUB” and “Los Angeles HUB.” See Decl. of Gopi K. Panchapakesan in Supp. of Bird Marella Defs.’
Opp’n to Tatung’s Mot. for Partial Summ. J. 89, 233, ECF No. 793-2.
[defendant’s] purported car dealerships . . . , chose a car, paid for it on the spot, and
arranged for the car to be shipped to Eastern Europe, plaintiffs would have suffered from
a clear domestic injury when [defendant] failed to deliver the car and failed to return
plaintiffs their money.” Id. Thus, RICO civil liability should not be precluded simply
because foreign plaintiffs were fraudulently induced to make purchases over the internet
instead of in person. See id. at *8. In its reasoning, the court appeared to focus on where
plaintiffs’ injuries were felt—i.e., on defendant’s United States-based website and,
therefore, in the United States. Nonetheless, in finding that plaintiffs suffered a domestic
injury, the court concluded that “the extraterritoriality analysis should be a two-way street”
and that “[t]he locus delecti of the crimes committed is the United States.” See id.
These cases exhibit a wide array of factual scenarios and justifiable reasoning, with
no clear victor in the “domestic injury” debate. What is clear from the statute and the
Supreme Court is that the “focus” of § 1964(c) is the injury suffered and not the predicate
acts that caused the injury. See RJR, 136 S. Ct. at 2108 (“the presumption against
extraterritoriality must be applied separately to both RICO’s substantive prohibitions and
its private right of action”); see also Ablyazov, 2016 WL 7756629, at *6 (“RJR Nabisco
makes clear that ‘domestic injury to business or property’ is an independent requirement
for bringing a private RICO action—separate and apart from the requirement of a
substantive RICO violation that is either domestic or permissibly extraterritorial—and, as
such, the existence of such an injury cannot, as a matter of logic, turn entirely on whether
it was caused by conduct occurring in the U.S.”) (emphasis original). The Court, therefore,
concludes that the only relevant inquiry is where Plaintiff’s injury occurred—i.e. where the
impact of Plaintiff’s injury was felt—and not where the predicate acts occurred. In light
of this understanding, the Court will now apply the facts before it.
C. Plaintiff Cannot Allege a Domestic Injury to Its Property
Plaintiff first alleges damage to its property in the form of its $1.12 million judgment
against Cavusoglu in a previous case. Plaintiff argues that a judgment is domestic property
under § 1964(c) and that Plaintiff “has suffered actual monetary loss and out-of-pocket loss
since its 2010 lawsuit claims became, as a matter of law, ‘property’ upon the entry of
judgment against [Cavusoglu’s shell entity] in July 2011.” See Pl.’s Opp’n at 7–10. It is
well settled that all claims sounding in fraud, including RICO claims, must be alleged with
particularity. See Fed. R. Civ. P. 9(b); Lum v. Bank of Am., 361 F.3d 217, 220 (3d Cir.
2004), abrogated in part on other grounds by Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 557 (2007). Plaintiff alleges that Sunrise conspired with Cavusoglu to avoid payment
of Plaintiff’s judgment by engaging in fraudulent litigation, which resulted in the execution
of a fraudulent settlement agreement of $500,000 in December 2012. See Pl.’s RICO Case
Statement 5, ECF No. 113. Plaintiff also broadly alleges that Sunrise and Cavusoglu used
litigation as a means of delaying, hindering and defrauding their customers, in connection
with the greater RICO enterprise. See id. at 7–8.
The original subject of the RICO enterprise’s fraudulent scheme was Plaintiff’s food
products and the initial injury was the fraudulent conversion thereof. To be clear, the Court
agrees that judgments are generally considered to be property, but that does not mean that
they constitute the type of property that may be subject to recovery under § 1964(c) in all
cases. Here, the judgment is a byproduct of Plaintiff’s attempt to remedy its initial injury.
In other words, the judgment is a “downstream effect of the initial injury” and it does not
constitute damage to Plaintiff’s business or property under § 1964(c). See Exeed Indus.,
2016 WL 6599949, at *3.
Furthermore, the Court agrees with Sunrise that Plaintiff’s “lost-debt” theory of outof-pocket loss is not presently cognizable given Plaintiff’s ongoing attempt to satisfy its
judgment through the instant litigation. Plaintiff cannot currently show that its debt cannot
be collected. Consequently, it cannot show a concrete financial loss, which RICO law
requires for recovery. See Maio v. Aetna, Inc., 221 F.3d 472, 483 (3d Cir. 2000) (“Thus,
‘a showing of injury requires proof of a concrete financial loss and not mere injury to a
valuable intangible property interest.’” (quoting Steele v. Hospital Corp. of Am., 36 F.3d
69, 70 (9th Cir. 1994)). Plaintiff, therefore, cannot presently sustain a claim of damage to
its judgment as domestic property.
Plaintiff’s second claim of domestic property damage is naturally the fraudulent
conversion of its food products. Plaintiff asserts that it remained the lawful owner of its
goods until its bank released the bill of lading to Cavusoglu’s bank and the goods were
unloaded at a port in the United States. See Decl. of Oguz Kanyilmaz (“Kanyilmaz Decl.”)
¶¶ 4–6, ECF No. 134-2. As a result, Plaintiff argues that its injuries began to accrue in the
United States and thus the fraudulent conversion is a domestic injury. See id. at ¶ 7.
The Court finds the Elsevier court’s test to be more persuasive in determining the
situs of Plaintiff’s injury—i.e., the situs of injury is where Plaintiff physically parted with
the property in reliance of Cavusoglu’s statements. See Elsevier, 199 F. Supp. 3d at 786.
It is indisputable that Plaintiff relinquished physical control of its property when it
delivered the goods to the third-party carrier in Izmir for delivery to the United States.
Plaintiff, therefore, suffered its injury upon delivery to the carrier in Izmir. See id. at 789
(finding that goods left plaintiff’s control at the point of shipment with a third-party
Furthermore, the Court is skeptical of Plaintiff’s claim that the presence of “FOB”
on its invoices is meaningless with respect to where it released control of the goods. See
Kanyilmaz Decl. at ¶ 4. As the parties are undoubtedly aware, “FOB” is an acronym for
“free on board,” which is a contractual term that generally presumes that the property
passes from seller to buyer at the point indicated. See Swift Canadian Co. v. Banet, 224
F.2d 36, 38 (3d Cir. 1955). Here, the invoices in the record clearly indicate “FOB.IZMIR,”
which presumes that the property passed from Plaintiff to Cavusoglu at the point of
shipment in Izmir, Turkey. See Compl., Ex. 15. In New Jersey, the meaning of this phrase
indicates that the risk of loss passed to Cavusoglu after Plaintiff delivered its goods to the
third-party carrier in Izmir. See N.J.S.A. § 12A:2–319(1)(a). If Plaintiff did not intend for
the risk of loss to pass upon delivery to the carrier, then it could have chosen the receiving
port in New Jersey or the Linden property instead. While not dispositive in and of itself,
the Court regards the presence of “FOB.IZMIR” on Plaintiff’s invoices as supportive of
the fact that Plaintiff relinquished control of its property in Turkey. The Court concludes
that Plaintiff cannot allege a domestic injury to its property under § 1964(c).
D. Plaintiff Cannot Allege a Domestic Injury to Its Business
Plaintiff argues, without pointing to any evidence in the record, that the damage to
its business caused by the RICO enterprise is a domestic injury. Plaintiff claims that it
maintained approximately $1 million of annual business for four years prior to its dealings
with Cavusoglu and Sunrise. See Pl.’s Opp’n at 16. Plaintiff cites to a trial transcript from
a previous case as support, apparently unaware of the limits placed on this Court by Rule
12(c). See Mele v. Fed. Reserve Bank of N.Y., 359 F.3d 251, 257 (3d Cir. 2004) (“In
deciding a Rule 12(c) motion, the court does not consider matters outside the pleadings.”).
Consequently, the Court finds that there is no evidence in the record to support Plaintiff’s
claim of a domestic injury to its business.
Even assuming that Plaintiff can establish its previous business earnings at summary
judgment, the Court finds that Plaintiff cannot allege a domestic injury to its business
because its business is entirely located in and operated out of Turkey. Plaintiff would have
this Court employ the Tatung court’s reasoning in looking to where the RICO predicate
acts occurred to determine that it suffered a domestic injury. See Pl.’s Opp’n at 10–11.
Plaintiff’s reliance on Tatung is misguided. In Tatung, plaintiffs clearly maintained
substantial business operations within the United States and contractually availed
themselves to dispute resolution via arbitration within the United States. See Tatung, 2016
WL 6683201, at *7. Accordingly, plaintiff could plausibly argue that its United Statesbased business was harmed by defendants’ RICO conduct and that it, therefore, suffered a
domestic injury because it felt the impact of that injury within the United States. See
Ablyazov, 2016 WL 7756629, at *9 (distinguishing Tatung from the facts before that court
by noting that plaintiffs did not maintain a presence in the United States).
In the instant case, Plaintiff never maintained any operations, instrumentalities or
other presence in the United States. See id. Furthermore, Plaintiff never “traveled” through
the internet to Defendants’ United States-based website, as was the case in Akishev. See
Akishev, 2016 WL 7165714, at *7–8. Indeed, it appears to the Court that the initial act of
fraud, which caused Plaintiff to rely on Cavusoglu, was committed by Museoglu, who is
mysteriously not a named defendant in this case. See Compl. at ¶¶ 137, 157–60. Neither
party addresses this fact in their papers and the Complaint does not make clear where
Museoglu was when he convinced Plaintiff that Cavusoglu was a worthy business partner.
If Museoglu was present in Turkey when he made those convincing statements, Plaintiff’s
domestic injury argument would be even weaker than it already is.
Irrespective of Museoglu, the Court returns to the question of where the impact of
Plaintiff’s injury was felt. The Court finds that Plaintiff’s injury was felt in the only place
that it has ever been located, in Turkey. See Devine, 2017 WL 519066, at *20; Ablyazov,
2016 WL 7756629, at *7–8. Plaintiff, therefore, cannot allege a domestic injury to its
business and Plaintiff’s RICO claims must be dismissed.
For the reasons stated above, Sunrise Defendants’ motion to dismiss is GRANTED
and Plaintiff’s RICO claims, Counts IV and V, are DISMISSED WITH PREJUDICE.
An appropriate order follows.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: March 28, 2017
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