INTERNATIONAL TRANSPORT MANAGEMENT CORPORATION et al v. BROOKS FITCH APPAREL GROUP, LLC
2:11-cv-01921
D.N.J.Feb 2, 2012Background
- ITM provided international freight forwarding and release services for Brooks Fitch shipments from China/Cambodia to U.S. ports.
- Plaintiffs allege Brooks Fitch diverted goods and failed to pay suppliers and ITM/ONEL, causing shortages and losses.
- Plaintiffs moved to amend in 2011 to add RICO claims against Joseph Safdieh and Eli Safdieh; prior amendment denied for lack of specificity.
- The current motion to amend was renewed and opposed on futility grounds under Rule 12(b)(6) and Rule 9(b).
- Judge Falk evaluates the proposed Second Amended Complaint under Rule 15(a) and RICO pleading standards, denying the motion without prejudice.
- Court notes that the underlying conduct spans 2008–2011, but finds deficiencies in the alleged 1962(b), (c), and (d) claims and in particularity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1962(b) injury and nexus | Safdieh influence in Brooks Fitch harmed ITM/ONEL. | Any injury arises from racketeering, not independent impact of control. | 1962(b) claim inadequately pled; no independent injury or nexus shown. |
| 1962(c) pattern and particularity | Predicate acts show a fraud scheme by Safdiehs affecting the enterprise. | Allegations lack specificity and fail Rule 9(b) requirements; insufficient pattern. | 1962(c) claim deficient; fails Rule 9(b) and pattern pleading. |
| 1962(d) conspiracy | Conspiracy to commit RICO violations based on (b) and (c). | If substantive claims fail, 1962(d) fails as derivative. | Denied without prejudice; dependent on curable deficiencies in (b) and (c). |
Key Cases Cited
- Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir. 1993) (injury under 1962(b) must be independent of racketeering injury)
- Zenith Radio Corp. v. Hazeltine Research Inc., 401 U.S. 321 (U.S. 1970) (leave to amend should be freely granted when justice requires)
- In re NAHC, Inc. Sec. Litig., 306 F.3d 1314 (3d Cir. 2002) (futility standard mirrors Rule 12(b)(6) pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plaintiff must plead plausible claims with factual content)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (claims must be > merely speculative; plausible will suffice)
- Harrison Beverage Co. v. Dribeck Importers, Inc., 133 F.R.D. 463 (D.N.J. 1990) (lenient standard for amendment; denial if clearly futile)
- Seville Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786 (3d Cir. 1984) (Rule 9(b) requires particularity in fraud pleadings)
- Annulli v. Panikkar, 200 F.3d 189 (3d Cir. 1999) (theft by deception is not per se a RICO predicate act)
- Kolar v. Preferred Real Estate Investments, Inc., 361 Fed. Appx. 354 (3d Cir. 2010) (pattern of racketeering must be pled with specificity)