Graceland v. Plutus Enterprises LLC, 8:21-cv-02356

Background

Plaintiff Anahata Graceland, a Washington resident, alleges a 2019 pyramid/cryptocurrency scheme run by Plutus Enterprises and promoted by co-defendants including 7th Level Communications, LLC and Justin Verrengia.
Graceland filed a second amended complaint asserting federal RICO claims and multiple state-law claims (Florida RICO, FDUTPA, fraud, civil theft, exploitation of an elderly person).
7th Level is a Missouri LLC whose sole member is an Arizona citizen; Verrengia was alleged in the complaint to be a Pasco County, Florida resident but submitted a sworn declaration that he has lived and worked in Puerto Rico since 2018.
Defendants 7th Level and Verrengia moved to dismiss for lack of personal jurisdiction, improper venue, and failure to state a claim; the Court solicited supplemental briefing on venue and possible transfer.
The Court held that RICO nationwide-service confers personal jurisdiction (Graceland stated colorable RICO claims and defendants have U.S. contacts), but venue in the Middle District of Florida is improper because no defendant resides or transacts business there and no substantial part of the events occurred there.
The Court dismissed the action without prejudice for improper venue under 28 U.S.C. § 1406(a) and closed the case rather than transferring it.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Personal jurisdiction under RICO (18 U.S.C. § 1965(d))	Graceland: RICO’s nationwide service supports jurisdiction over defendants, including Verrengia (allegedly a Florida resident).	Defendants: No meaningful contacts with this district; Verrengia is not a Florida resident.	Court: Jurisdiction exists under RICO (colorable claim + nationwide contacts); Fifth Amendment due-process balance satisfied.
Venue under § 1965(a) and § 1391(b)	Graceland: Venue proper here because Verrengia resides and promoted the scheme from this district and defendants did business here.	Defendants: Verrengia lives in Puerto Rico; no defendant resides or transacts business in this district and no substantial events occurred here.	Court: Venue not proper under §1965(a) or §1391(b); Verrengia’s declaration disproves the complaint’s forum allegations.
Use of § 1965(b) ("ends of justice") to bring all defendants into this district	Graceland: Implicitly seeks §1965(b) to keep all defendants here.	Defendants: §1965(b) cannot save venue if no defendant satisfies §1965(a) or §1391(b) in this forum.	Court: §1965(b) inapplicable because venue is improper as to all defendants; even if considered, ‘‘ends of justice’’ do not favor this forum.
Transfer vs dismissal under § 1406(a)	Graceland: Did not identify a forum or argue for transfer in supplemental briefing.	Defendants: Oppose transfer; contend dismissal appropriate.	Court: Dismissed without prejudice rather than transfer because plaintiff failed to request or justify transfer; alternative proper forums exist.

Key Cases Cited

Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935 (11th Cir. 1997) (RICO nationwide service and Fifth Amendment due-process framework for federal statutes)
Courboin v. Scott, [citation="596 F. App'x 729"] (11th Cir. 2014) (colorable RICO claim required to invoke nationwide service)
In re Takata Airbag Prod. Liab. Litig., 396 F. Supp. 3d 1101 (S.D. Fla. 2019) (aggregate/nationwide-contacts analysis and pendent personal jurisdiction doctrine)
BankAtlantic v. Coast to Coast Contractors, Inc., 947 F. Supp. 480 (S.D. Fla. 1996) (overview of §§1965(a) and 1965(b) venue rules)
Crenshaw v. Antokol, 287 F. Supp. 2d 37 (D.D.C. 2003) (analysis of §1965(b) ‘‘ends of justice’’ and when it cannot cure venue defects)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Papasan v. Allain, 478 U.S. 265 (1986) (courts need not accept legal conclusions as facts)