Attorneys For Defendants Paul Manafort, Brad Zackson, CMZ Ventures, LLC, The Dynamic Group, and Barbara Ann Holdings LLC
Attorneys For Defendants Paul Manafort, Brad Zackson, CMZ Ventures, LLC, The Dynamic Group, and Barbara Ann Holdings LLC
Attorneys For Defendants Paul Manafort, Brad Zackson, CMZ Ventures, LLC, The Dynamic Group, and Barbara Ann Holdings LLC
)
YULIA TYMOSHENKO )
)
Plaintiff, )
v. ) Civil Action No. 11-02794 (AJN)
)
DMYTRO FIRTASH, et al. )
Defendants. )
)
Richard A. Hibey
Andrew T. Wise
MILLER & CHEVALIER CHARTERED
655 Fifteenth Street, N.W. Suite 900
Washington D.C. 20005-6701
Phone: (202) 626-5800
Fax: (202) 626-5801
Email: rhibey@milchev.com
awise@milchev.com
TABLE OF CONTENTS
ARGUMENT...................................................................................................................................3
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CONCLUSION..............................................................................................................................35
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TABLE OF AUTHORITIES
Page(s)
CASES
Alster v. Goord,
No. 05 Civ. 10883 (WHP), 2008 U.S. Dist. LEXIS 13827 (S.D.N.Y. Feb. 26, 2008) .............5
Ashcroft v. Iqbal,
556 U.S. 662 (2009)...................................................................................................4, 5, 24, 27
Coakley v. Jaffe,
49 F. Supp. 2d 615 (S.D.N.Y. 1999)..........................................................................................2
Conley v. Gibson,
355 U.S. 41 (1957).....................................................................................................................4
Filartiga v. Pena-Irala,
630 F.2d 876 (2d Cir. 1980).......................................................................................................8
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Goldstein v. Pataki,
516 F.3d 50 (2d Cir. 2008).........................................................................................................5
Illinois v. Allen,
397 U.S. 337 (1970).................................................................................................................15
In re Sinaltrainal Litig.,
474 F. Supp. 2d 1273 (S.D. Fla. 2006) ................................................................................6, 16
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Meisel v. Grunberg,
651 F. Supp. 2d 98 (S.D.N.Y. 2009)............................................................................25, 26, 27
Picard v. Kohn,
No. 11-cv-1181, 2012 U.S. Dist. LEXIS 22083 (S.D.N.Y. Feb. 22, 2012).......................20, 21
Rogers v. Grimaldi,
875 F.2d 994 (2d Cir. 1989).....................................................................................................24
Ross v. Woods,
412 F. App’x 392 (2d Cir. 2011) .............................................................................................22
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Sosa v. Alvarez-Machain,
542 U.S. 692 (2004)......................................................................................................... passim
Ward v. Silverberg,
85 N.Y.2d 994 (1995) ..............................................................................................................29
STATUTES
18 U.S.C. § 1346............................................................................................................................15
18 U.S.C. § 1856............................................................................................................................19
18 U.S.C. § 1964..............................................................................................................................2
28 U.S.C. § 1331..............................................................................................................................2
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28 U.S.C. § 1350........................................................................................................................2, 12
28 U.S.C. § 1367......................................................................................................................21, 22
OTHER AUTHORITIES
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)
YULIA TYMOSHENKO )
)
Plaintiff, )
v. ) Civil Action No. 11-02794 (AJN)
)
DMYTRO FIRTASH, et al. )
Defendants. )
)
Plaintiff Yulia Tymoshenko is the former Prime Minister of the Ukraine. According to
the Amended Complaint, Ms. Tymoshenko and her Batkivshchyna party were electorally ousted
Following Mr. Yanukovych’s election to office, Ms. Tymoshenko and a number of her allies
were arrested, charged with various criminal offenses, and tried in Ukrainian courts. Rather than
seeking redress in the Ukraine, either through the courts, the legislature, or the ballot box,
Tymoshenko filed suit in New York against a number of Ukrainian government officials and
transparent attempt to anchor the case in a court where it does not belong, Plaintiff threw in a
number of U.S.-based defendants, including individuals Paul Manafort and Brad Zackson and
business entities CMZ Ventures, LLC, the Dynamic Group, and Barbara Ann Holdings, LLC.
Outside of a few vague, conclusory, and factually unsupported accusations, Plaintiff does not tie
these five parties (hereinafter “the U.S. Defendants”) to the allegedly tortious or illegal acts of
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the Ukrainian Defendants. Instead, she seeks to create new federal common law, expand
application of U.S. laws in ways the U.S. courts have already rejected, and trigger this Court’s
jurisdiction in contravention of Supreme Court and Second Circuit jurisprudence that is clearly
Plaintiff makes four claims for relief in her Amended Complaint (DE 23), each of which
arises out of the same set of alleged facts. Plaintiff’s varied citations to 28 U.S.C. § 1331; the
Alien Tort Statute (ATS), 28 U.S.C. § 1350; the Racketeer Influenced and Corrupt Organizations
Act (RICO), 18 U.S.C. § 1964(c); and “state, federal, and international law” create confusion
about the cause of action under which the Plaintiff is proceeding. DE 23 at 9 ¶ 24; id. at 17
¶ 46.1 A fair reading of the Amended Complaint, however, suggests that Plaintiff’s claims arise
out of a single, core allegation — that she was injured as a result of being “arrested, detained,
¶ 2.
Defendants because formulaic recitations of labels and conclusions cannot suffice to state a
claim upon which relief can be granted. But apart from the pleading flaws throughout the
Amended Complaint, Plaintiff’s claims against the U.S. Defendants suffer from other
fundamental (and ultimately fatal) flaws. The primary statutory anchor of Plaintiff’s claim is the
1 See also, e.g., Coakley v. Jaffe, 49 F. Supp. 2d 615, 625 (S.D.N.Y. 1999) (characterizing plaintiffs’
complaint — which “sets forth a potpourri of vague and conclusory allegations that for the most part are
not explicitly linked to any specific factual assertions, making it extremely difficult to discern the precise
nature of the claim” — as a “shotgun pleading” that “illustrates plaintiffs’ utter disrespect for Rule 8”);
Maple Drive-In Theatre Corp. v. Radio-Keith-Orpheum Corp., 17 F.R.D. 226, 227 (S.D.N.Y. 1955)
(“While technically, perhaps, the pleader has indicated a causal connection between these misdeeds and
the specific injury he complains of, nevertheless the connection lacks genuine relevancy, and this shotgun
type of pleading could be employed to raise innumerable issues utterly foreign to the gravamen of the
complaint”).
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ATS, a jurisdictional statute that does not create a cause of action. As set forth in Part II, the
ATS grants district courts original jurisdiction over a limited subset of claims arising out of clear
and unambiguous rules of customary international law. Prior court decisions make clear that
even if Plaintiff could prove she had been subjected to “arbitrary detention,” as alleged, such a
claim would fail to establish injury under the law of nations — leaving her without recourse to
the ATS as a jurisdictional hook. The secondary statutory anchor of Plaintiff’s claim is the
RICO statute, and as explained in Part III that claim against the U.S. Defendants fails for three
reasons: (1) it ignores the established rule that RICO does not apply extraterritorially, (2) it fails
adequately to allege a predicate RICO offense by the U.S. Defendants, and (3) it fails adequately
to allege that the U.S. Defendants’ actions were the proximate cause of Plaintiff’s injuries. As
discussed in Parts IV and V, Plaintiff’s claims under New York state law for breach of fiduciary
duty and malicious prosecution, even if stretched beyond their current form to meet the relevant
pleading standards, are not properly brought in a U.S. Court and the Court should decline to
For these reasons, each of Plaintiff’s claims must be dismissed pursuant to Federal Rule
of Civil Procedure 12(b)(6) for failure to state a claim. In addition, as discussed in Part VI, the
does not allege that he has sufficient contacts with New York for the Court to properly exercise
ARGUMENT
Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain
statement of the claim showing that the pleader is entitled to relief.” In 2007, the Supreme Court
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emphasized that a complaint must provide sufficient factual allegations to provide the defendants
fair notice not only of the nature of the claim but also of the grounds on which the claim against
them rests. Bell Atl. Corp. v. Twombly, 550 U.S. 554 (2007). In Twombly, the Court explained:
Id. at 555 (citations omitted) (alteration in original). In other words, to avoid dismissal, a
plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Id. at
570 (dismissing plaintiff’s complaint because they “have not nudged their claims across the line
from conceivable to plausible”); id. (abandoning the “no set of facts” language from Conley v.
Two years later, the Supreme Court drew a clear distinction between allegations of fact
and law. Ashcroft v. Iqbal, 556 U.S. 662 (2009). As the Court noted, “the tenet that a court must
accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”
Id. at 678. So, when applying Twombly’s “plausibility” standard, reviewing courts “are not
bound to accept as true a legal conclusion couched as a factual allegation.” Id. (citations
omitted). In Iqbal, the plaintiff had alleged that various U.S. government officials designed,
adopted, and executed an illegal policy relating to the treatment of post-9/11 detainees. Id. at
670. In affirming the dismissal of the complaint, the Supreme Court reiterated that Rule 8
complaint does not “suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
enhancement.’” Id. at 678 (citations omitted). Thus, Rule 8 “does not unlock the doors of
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discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79. Indeed,
“where the well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged – but it has not shown – that the pleader is entitled to
Judges of the Southern District of New York have dismissed a number of deficient
complaints on the authority of Twombly and Iqbal. For example, in Hopper v. Banana Republic,
LLC, No. 07 Civ. 8526 (WHP), 2008 U.S. Dist. LEXIS 13503, at *6 (S.D.N.Y. Feb. 25, 2008),
the court, citing Twombly, dismissed a negligent hiring and retaining claim “[b]ecause the
complaint includes only speculative and implausible facts concerning [accused employee’s]
propensities and Defendants’ knowledge of them.” See also Alster v. Goord, 05 Civ. 10883
(WHP), 2008 U.S. Dist. LEXIS 13827 (S.D.N.Y. Feb. 26, 2008) (applying Twombly to support
dismissal of § 1983 claims under even less stringent review of pro se plaintiff’s complaint
treatment were insufficient); Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008) (“at a bare
minimum, the operative standard requires the ‘plaintiff [to] provide the grounds upon which his
claim rests through factual allegations sufficient ‘to raise a right to relief above the speculative
In so doing, the courts have given proper heed to the Supreme Court’s concern for the
necessity of weeding out groundless complaints before the parties and courts waste their
resources. According to the Supreme Court, “when the allegations in a complaint, however true,
could not raise a claim of entitlement to relief, this basic deficiency should . . . be exposed at the
point of minimum expenditure of time and money by the parties and the court.” Twombly, 550
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Plaintiff’s allegations against the U.S. Defendants are even more deficient than those in
the cases described above. See DE 23 at 13-14, 34-43 ¶¶ 33-35, 37, 100-133 (setting forth the
only allegations specific to the U.S. Defendants). The Amended Complaint consists entirely of
formulaic recitations and cursory conclusions unsupported by any facts. The majority of the
Amended Complaint recites a litany of events that occurred in the Ukraine without even seeking
to tie the U.S. Defendants to those events whatsoever. See generally DE 23 at 1-10 ¶¶ 1-25; id.
Political diatribe cannot substitute for the requisite specific factual support under the
“plausibility test” set forth by the Supreme Court in Twombly. Indeed, even before Twombly,
courts noted the particular risk in ATS litigation that allowing cases to proceed on “vague,
conclusory, and attenuated allegations” will allow plaintiffs “to abuse the judicial process in
order to pursue political agendas.” In re Sinaltrainal Litig., 474 F. Supp. 2d 1273, 1275 (S.D.
Fla. 2006) (dismissing plaintiffs’ Alien Tort Statute and Torture Victim Protection Act claims
But even if Plaintiff’s Amended Complaint satisfied the notice pleading requirements of
Rule 8(a)(2), it nonetheless must be dismissed as to the U.S. Defendants on a variety of other
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grounds. As discussed in the immediately following sections, Plaintiff fails to allege the basic
Count One of the Amended Complaint purports to state a claim for relief pursuant to the
ATS, which grants a district court jurisdiction over a narrow set of claims arising out of
violations of the law of nations. This count should be dismissed against the U.S. Defendants
because the claim Plaintiff actually makes is not one the ATS recognizes, and it would be against
established ATS jurisprudence to expand this Court’s jurisdiction in the manner Plaintiff seeks.
The ATS was passed in 1789 as part of the first congressional statute on the judiciary,
and in the 170 years after its passage the statute provided jurisdiction in only one case. Sosa v.
Alvarez-Machain, 542 U.S. 692, 712 (2004). Judge Friendly famously called the statute a “‘legal
Lohengrin’…no one seems to know whence it came…” IIT v. Vencap, Ltd., 519 F.2d 1001,
1015 (2d Cir. 1975). The ATS does not create a cause of action. Rather, it confers jurisdiction
on a district court where (1) the a plaintiff is an alien, (2) the plaintiff claims damages for a tort
only, and (3) the alleged damages result from a violation of the law of nations (i.e. customary
international law) or a treaty of the United States. Presbyterian Church of Sudan v. Talisman
Energy, Inc., 582 F.3d 244, 255 (2d Cir. 2009). This “jurisdictional grant is best read as having
been enacted on the understanding that the common law would provide a cause of action for the
modest number of international law violations with a potential for personal liability” at the time
of the ATS’ enactment. Id. (quoting Sosa, 542 U.S. at 724). When the ATS was enacted, it
“enabled federal courts to hear claims in a very limited category defined by the law of nations
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and recognized at common law.” Sosa, 524 U.S. at 712. Those “three specific offenses against
the law of nations addressed by the criminal law of England: violation of safe conducts,
infringement of the rights of ambassadors, and piracy” shared common traits — each was a rule
“binding individuals for the benefit of other individuals[, which] overlapped with the norms of
state relationships.” Id. at 715 (citing 4 W. Blackstone, Commentaries on the Laws of England
68 (1769)). Given the narrowly defined universe of offenses recognized at the time of the ATS’
passage, the Supreme Court held that “courts should require any claim based on the present-day
law of nations to rest on a norm of international character accepted by the civilized world and
defined with a specificity comparable to the features of the 18th-century paradigms we have
In 2004, the U.S. Supreme Court construed the ATS for the first time in Sosa. To
consider properly the implication of the Court’s resolution of Sosa, especially as it relates to the
allegations in the Amended Complaint in this case, it is important to understand the development
As previously mentioned, following the statute’s passage, the ATS laid largely dormant
for close to two centuries. Then, in 1980, the Second Circuit held the ATS provided federal
subject matter jurisdiction over a tort claim arising out of a Paraguayan police inspector-
general’s torture and killing of a Paraguayan citizen. Filartiga v. Pena-Irala, 630 F.2d 876 (2d
Cir. 1980). In so holding, the court found that “an act of torture committed by a state official
against one held in detention violates established norms of the international law of human rights,
and hence the law of nations.” Id. at 880. Filartiga started a period of expansion of the ATS,
during which two courts in particular, the Second Circuit and the Ninth Circuit, “started the
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Judiciary down [a] path the [Supreme] Court [would later] tr[y] to hedge in.” Sosa, 542 U.S. at
In 2003, the Ninth Circuit held that a “clear and universally recognized norm prohibiting
arbitrary arrest and detention” granted a district court subject matter jurisdiction over a tort
coordination with the U.S. Drug Enforcement Agency. Alvarez-Machain v. United States, 331
F.3d 604, 620 (9th Cir. 2003). The Supreme Court granted certiorari and reversed. Sosa, 542
U.S. 692. In so doing, the Supreme Court considered and rejected many of the arguments
Plaintiff raises here in support of her claim for relief in Count One of the Amended Complaint.
After reviewing the legislative history of the Statute, the Court cautioned against giving
the ATS a broad reading and instead set “a high bar to new private causes of action for violating
international law.” Id. at 727. Notably, the Court emphasized that the district court’s inquiry
“should (and, indeed, inevitably must) involve an element of judgment about the practical
consequences of making that cause available to litigants in the federal courts.” Id. at 732-33
(internal footnote omitted). Moreover, the Court articulated a “series of reasons [which] argue
for judicial caution when considering the kinds of individual claims that might implement the
First, the Court noted that a district judge who decided a case “in reliance on an
international norm will find a substantial element of discretionary judgment in the decision,”
given that common law is “made or created” and not merely “found or discovered.” Id. at 725-
26. Because the creation of a private right of action creates issues far beyond “the mere
consideration of whether underlying primary conduct should be allowed,” the Court recognized
that the decision whether to create such a right “is one better left to legislative judgment in the
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great majority of cases.” Id. at 727 (citing whether to permit enforcement without the check
conduct should be allowed). In this instance, where the private right of action would necessarily
implicate international issues, the Court expressed concern about district courts impinging on the
Finally, the Court noted that it had “no congressional mandate to seek out and define new
and debatable violations of the law of nations, and modern indications of congressional
understanding of the judicial role in the field have not affirmatively encouraged greater judicial
creativity.” Id. at 728. These factors led the Court to articulate the following rule: “federal
courts should not recognize private claims under federal common law for violations of any
international law norm with less definite content and acceptance among civilized nations than the
historical paradigms familiar when [the ATS] was enacted.” Id. at 732. The Court then rejected
the argument that an ATS claim could be sustained for “a single illegal detention of less than a
day, followed by the transfer of custody to lawful authorities and a prompt arraignment.” Id. at
738.
Justices Scalia and Breyer wrote concurring opinions to Justice Souter’s majority
opinion. In his concurrence, Justice Breyer suggested that jurisdiction under the ATS should
only exist where “consistent with those notions of comity that lead each nation to respect the
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sovereign rights of other nations by limiting the reach of its laws and their enforcement.” Id. at
761. This is because, Justice Breyer reasoned, only where international consensus exists
regarding both the wrongfulness of the behavior and the propriety of universal jurisdiction over
such behavior does “allowing every nation’s courts to adjudicate foreign conduct involving
foreign parties…not significantly threaten the practical harmony that comity principles seek to
protect.” Id. at 762. Justice Breyer found that the lack of such consensus “provides additional
support for the Court’s conclusion that the ATS does not recognize the claim at issue here –
where the underlying substantive claim concerns arbitrary arrest, outside the United States, of a
Justice Scalia articulated a different concern in his concurrence. While agreeing with the
majority’s holding and reasoning, Justice Scalia warned of the consequences of allowing even a
narrow window for lower courts to create causes of action for the enforcement of international-
belongs to the people’s representatives.” Id. at 747. In a prescient warning, he wrote “[o]ne
does not need a crystal ball to predict that this occupation will not be long in coming…” even
though the majority rejected the “more assertive view of federal judicial discretion over claims
based on customary international law” adopted by the Second and Ninth Circuits in the
In the five years following Sosa, district judges in the Southern District of New York
twice construed its holding narrowly as limited to the specific facts presented in that case. See
Wiwa v. Royal Dutch Petroleum Co., 626 F. Supp. 2d 377, 382 n. 4 (S.D.N.Y. 2009); Kiobel v.
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Royal Dutch Petroleum Co., 456 F. Supp. 2d 457, 466 (S.D.N.Y. 2006).2 Plaintiff cites both of
those cases, as well as language from various international declarations and conventions in
support of her argument that this Court may properly exercise jurisdiction over her ATS claim
because arbitrary detention has been incorporated into the law of nations and is therefore
actionable under the ATS. DE 23 at 83-84 ¶¶ 263-66. In so doing, however, Plaintiff ignores
both the reasoning set forth by the Supreme Court in reaching its decision in Sosa and specific
For example, Plaintiff claims the Universal Declaration of Human Rights (UDHR) and
the International Covenant on Civil and Political Rights (ICCPR) establish the status of
“arbitrary detention” as a violation of international law. But in Sosa, the Court addressed both
the UDHR and the ICCPR and held that both had “little utility under the standard [the Court] set
2 Recent developments suggest that the Supreme Court is trending in the opposite direction. The Kiobel
case reached the high court for argument this term, albeit on a different issue — whether a corporation
could be sued under the ATS. Following argument on that narrow issue, the Court took the unusual step
of ordering additional briefing on the following question: “[w]hether and under what circumstances the
Alien Tort Statute, 28 U.S.C. § 1350, allows courts to recognize a cause of action for violations of the law
of nations occurring within the territory of a sovereign other than the United States.” Kiobel v. Royal
Dutch Petroleum Co., No. 10-1491, 2012 U.S. LEXIS 1998, at *270 (Mar. 5, 2012). The final briefing
on that question is due June 29, 2012. It is the U.S. Defendants’ position that this Court need not await
the Supreme Court’s resolution of that question because the Amended Complaint fails to state a valid
ATS claim for the reasons set forth in Sections I and II of this memorandum. But the Supreme Court’s
request for additional briefing belies the notion that the reach of the ATS will expand, or that the Court
will countenance novel theories of ATS growth such as that advanced by Plaintiff in this matter.
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Sosa, at 734-735 (internal citations omitted). Nor are the other international conventions cited in
the Amended Complaint sufficient to overcome the Supreme Court’s reasoning in Sosa and
validly establish “arbitrary detention” as akin to the historical paradigms recognized at the time
the ATS was adopted. Id. at 732; see DE 23 at 84-85 ¶ 266(a)-(e) (citing various international
conventions and declarations as “confirm[ation] that the prohibition against arbitrary detention is
incorporated into the law of nations.”). But the Court need not reach that question because even
accepting the well-pleaded factual allegations in the Amended Complaint as true, as the Court
must do at this stage, Plaintiff does not articulate an “arbitrary detention” claim.
B. Even if “Arbitrary Detention” Were Actionable under the Alien Tort Statute, the
Amended Complaint Does Not Sufficiently Articulate Such a Claim
A fair reading of the Amended Complaint makes clear that Plaintiff complains of a
politically motivated prosecution that included her arrest, indictment, and trial by Ukrainian
prosecutors. A review of the limited case law on the ATS in the area of arbitrary detention
makes clear that while Plaintiff repeatedly uses the legal term “arbitrary detention,” what she
alleges as a factual matter is not an “arbitrary” detention but rather a detention (with legal
process) which she deems unjustified. That is not a complaint that states a valid claim under the
ATS.
In Sosa, while rejecting the applicability of the ATS to Plaintiff’s claim of “arbitrary
detention,” the Supreme Court focused on the plaintiff’s warrantless abduction from his home,
illegal overnight detention, and cross-border transport prior to judicial presentment. Sosa, 542
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U.S. at 698, 738. Wiwa, meanwhile, involved allegations that Nigerian police and military
officers beat, raped, shot and/or killed various individuals who protested the land development
activities of various international oil and gas companies. Wiwa v. Royal Dutch Petroleum Co.,
No. 96-cv-8386, 2002 U.S. Dist. LEXIS 3293, at *5 (S.D.N.Y. Feb. 28, 2002). In defining the
relevant terms, the district court concluded “[u]nder international law, ‘arbitrary detention’
occurs when a person is detained without warrant or articulable suspicion, is not apprised of
charges against him or her, and is not brought to trial.” Id. at *20 (defining “arbitrary detention”
and then dismissing plaintiff’s complaint because it contained “only a cursory assertion that
[plaintiff] ‘had previously been arrested and detained without charges’ at some undefined time in
the past.”).
In this case, Plaintiff does not allege that she was detained in an “arbitrary” fashion or
without legal process. Instead, her complaints are mainly about the very process she was
actually afforded in connection with her arrest, indictment, and trial. She complains of numerous
183. In some instances, she alleges that she was only given a few hours’ notice to appear for
those “interrogations.” Id. at 59 ¶ 184. She claims that during the course of the investigation,
her right to travel outside Kyiv was restricted by the prosecutor’s office. Id. at 60 ¶ 185. And
she complains that the investigation and trial that followed impaired her ability to earn money
and caused financial injury. Id. at 60 ¶ 186. Not only are these allegations not the akin to the
type of conduct that courts have cited as evidence of “arbitrary detention,” but they are also
complaints that U.S. courts have rejected when raised by defendants in U.S. criminal
prosecutions. See, e.g., Stein v. New York, 346 U.S. 156, 185 (1953) (“[W]e have never gone so
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The same analysis applies to Plaintiff’s complaints about her trial. As evidence that
prosecutions, arrest, and detentions have been “arbitrary,” Plaintiff alleges that she and other
officials have been detained on “nebulously defined criminal charges such as ‘excess of
authority’ and ‘causing state losses.’” DE 23 at 22 ¶ 63. Charging a defendant with an arguably
vague or nebulous statutory law violation cannot reasonably be cast as a violation of established
international law. See United States v. Skilling, 130 S. Ct. 2896 (2010) (limiting honest services
fraud statute, 18 U.S.C. § 1346, which prohibits schemes to deprive another of the intangible
right of honest services, in light of significant vagueness concerns). Plaintiff complains that
during her trial, she was “subjected to an unjustified and politically-motivated arrest ordered by
the [presiding] District Court…[because] the prosecutor claimed [Plaintiff] had been
disrespectful while examining the Prime Minister.” DE 23 at 61 ¶ 192. Again, this purported
violation of international law has a clear legal corollary in U.S. criminal procedure. See Frank v.
United States, 395 U.S. 147, 149 (1969) (“[A] person may be found in contempt of court for a
great many different types of offenses, ranging from disrespect for the court to acts otherwise
criminal”); see also Illinois v. Allen, 397 U.S. 337, 343-344 (1970) (listing constitutionally
permissible ways for a trial judge to handle an obstreperous defendant including physical
restraint and gag, contempt citation, and removal from the courtroom).
Finally, Plaintiff repeatedly complains about aspects of her trial such as judicial limits on
¶ 241; granting insufficient time to prepare for portions of trial, id. at 70-71 ¶¶ 218-223; and
limitations on her counsel’s ability to move throughout the courtroom. Id. at 72 ¶ 226. These
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procedural complaints are simply not the basis for a viable claim of “arbitrary detention” in
violation of the law of nations. See Delaware v. Van Arsdall, 475 U.S. 673, 679 (1986) (trial
judges retain wide latitude to impose reasonable limits on such cross-examination based on
concerns about, among other things, harassment, prejudice, confusion of the issues, the witness’
Finally, and critically, these insufficient allegations are not tied to the U.S. Defendants in
any meaningful or legally sufficient way. Not surprisingly, Plaintiff does not allege any
involvement of the U.S. Defendants in the decision-making by Ukrainian officials about her
indictment, arrest, trial, or detention. The sole attempt to tie the U.S. Defendants to the alleged
flaws in the legal process afforded Plaintiff is the baseless and unsupported allegation that
various Ukrainian officials “conspired with the remaining Defendants, who provided substantial
assistance in bringing about the arbitrary arrests and detentions of Plaintiffs.” DE 23 at 88 ¶ 275.
For the reasons set forth in section I of this Memorandum, such “vague, conclusory, and
attenuated allegations” cannot be allowed to provide an avenue for a plaintiff “to abuse the
judicial process in order to pursue political agendas.” See In re Sinaltrainal Litig., 474 F. Supp.
2d at 1275.
Congress passed the RICO statute “to protect[] legitimate businesses from infiltration by
organized crime,” United States v. Porcelli, 865 F.2d 1352, 1362 (2d Cir. 1989), not simply to
remedy general statutory criminal violations. H.J. Inc. v. Northwestern Bell Telephone Co., 492
U.S. 229, 245 (1989). In order to present a viable RICO claim, a plaintiff must adequately
plead at least the following: “(a) the existence of a RICO enterprise, (b) commission of two
predicate acts, (c) a pattern of racketeering activity, and (d) the causal link between the predicate
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acts and the RICO injury.” Adelphia Commc’ns Corp. v. Bank of Am. (In re Adelphia), 2007
Bankr. LEXIS 2851 at *52-53 (Bankr. S.D.N.Y. 2007). Of key importance here, Congress did
not articulate any intent for RICO to apply extraterritorially and without such expression, the
statute lacks extraterritorial reach. Norex Petroleum Limited v. Access Industries, Inc., 631 F.3d
29, 32-34 (2d Cir. 2010). For these reasons, Count II must be dismissed.
A. RICO Does Not Apply Extraterritorially and the Contacts with the U.S. Alleged
in the Amended Complaint Are Insufficient to Support Application as Sought by
Plaintiff
The slim contacts with the United States alleged by Plaintiff in her Amended Complaint
are insufficient to support extraterritorial application of the RICO statute. As a result, Count II
must be dismissed.
In Morrison v. Nat’l Austl. Bank Ltd., 130 S. Ct. 2869 (2010), the Supreme Court held
that absent an express intention by Congress of extraterritorial effect, a statute applies only
domestically. Morrison, 130 S. Ct. at 2877-78. Directly following the Morrison decision, the
Second Circuit had occasion to apply that holding to a RICO complaint involving an alleged
“massive racketeering scheme to take over a substantial portion of the Russian oil industry.”
Norex, 631 F.3d at 31. The Second Circuit held that the RICO statute “is silent as to any
extraterritorial application,” and ordered the complaint dismissed for failure to state a claim. Id.
at 32-33 (citing North South Finance Corp. v. Al-Turki, 100 F.3d 1046 (2d Cir. 1996)).
Notably, in so holding, the Second Circuit rejected the plaintiff’s argument that because a
number of RICO’s predicate acts possess an extraterritorial reach, RICO itself possessed the
same. Id. at 33 (citing Morrison, 130 S. Ct. at 2882-83). The Circuit also held the plaintiff’s
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allegation that some domestic conduct3 occurred did not support a claim of domestic application
of the statute, because as the Supreme Court recognized “it is a rare case of prohibited
extraterritorial application that lacks all contact with the territory of the United States.” Id.
(citing Morrison, 130 S. Ct. at 2884) (emphasis in the original). Under the same logic and
reasoning, the slim domestic contacts alleged by Plaintiff in this case, see DE 23 at 34-43 ¶¶ 100-
133, do not support extraterritorial application of the RICO statute and Count II of the Amended
B. The Amended Complaint Does Not Adequately Plead the Elements of a RICO
Offense
extraterritorial reach of the RICO statute, Count II nonetheless rests on a number of vague and
unsupported allegations about “the defendants” generally without articulation of specific facts
supporting the allegations and without delineation of what acts, if any, the U.S. Defendants are
alleged to have taken. As such, it wholly fails to adequately plead the elements of a RICO
offense.
The Amended Complaint makes a number of vague references to money laundering and
mail and wire fraud in the RICO count. See id. at 88-90 ¶¶ 278-83. But, again, “a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
3 The domestic conduct alleged by the plaintiff in Norex consisted of the following: “first, general
allegations that U.S. defendants ‘masterminded, operated and directed’ the illegal conduct; second,
allegations that Defendants used money transferred through U.S. wires to bribe Russian officials and
commit various violations of U.S. laws and statutes; third, that Defendants traveled between the U.S. and
Russia in aid of various aspects of the alleged Illegal Scheme; fourth, that an extortion attempt was made
by [a] Defendant [ ] while [plaintiff Company’s owner] was in San Francisco; and fifth, that the ‘final
extortion’ in Russia--namely the seizure of [a Russian oil company] -- violated the Hobbs Act.” Norex,
540 F. Supp. 2d at 443.
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Twombly, 550 U.S. at 555. Merely alleging the existence of a RICO enterprise does not suffice,
and in the Amended Complaint, Plaintiff does not set forth sufficient facts from which the court
could conclude that the U.S. Defendants were part of a RICO enterprise.
complaint alleging mail and wire fraud must show (1) the existence of a scheme to defraud, (2) a
defendant’s knowing or intentional participation in the scheme, and (3) the use of the interstate
mails or transmission facilities in support of the scheme. S.Q.K.F.C., Inc. v. Bell Atlantic Tricon
Leasing Corp., 84 F.3d 629, 633 (2d Cir. 1996) (emphasis added). If alleged as RICO predicate
acts, the averments of mail and wire fraud must be stated with particularity. In re Adelphia, 2007
Bankr. LEXIS 2851, at *54-55 (citing Fed. R. Civ. P. 9(b)). Here, Plaintiff’s allegations
regarding the U.S. Defendants’ knowing or intentional participation in a mail and wire fraud
scheme are plainly insufficient. As to the U.S. Defendants, the allegations consist of a collection
of references to New York-based real estate deals combined with unsubstantiated assertions that
the true purpose of the deals was to conceal money derived in the Ukraine. DE 23 at 38-43
¶¶ 113-133. But Plaintiff has not, because she cannot, produce any specific factual support
suggesting that the U.S. Defendants either had fraudulent intent themselves or knowledge of an
The money laundering allegations are similarly deficient. The substantive offense of
that property involved in a financial transaction represents the proceeds of some form of
unlawful activity and specific intent to enter into a transaction designed to conceal or disguise
the nature of the proceeds of specified unlawful activity. United States v. Huezo, 546 F.3d 174
(2d Cir. 2008). The Second Circuit has interpreted the latter element, “knowing that the
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conceal.” United States v. Stephenson, 183 F.3d 110, 120 (2d Cir. 1999). Here, the Amended
Complaint raises money laundering allegations in the context of the RICO claims, see DE 23 at
89-90 ¶¶ 280-81, but provides no specific factual allegations regarding the U.S. Defendants’
knowledge of the nature of the allegedly laundered proceeds or intent to enter into financial
Moreover, the Amended Complaint fails to adequately allege that the actions of the U.S.
Defendants were the proximate cause of those harms. Proximate cause, in this context, refers not
to the foreseeability of harm to the plaintiff, but instead to the directness of the relationship
between the purported enterprise’s alleged criminal acts and the plaintiff’s injuries. McBrearty
v. Vanguard Group, Inc., 353 Fed. Appx. 640, 641-42 & n.1 (2d Cir. 2009). Without such a tie,
the Amended Complaint must fail because a plaintiff does not have standing to bring a RICO
claim unless the defendant’s injurious conduct is both the factual and proximate cause of the
injury alleged. Lerner v. Fleet Bank NA, 318 F.3d 113, 120 (2d Cir. 2003).
Here, the Amended Complaint alleges that the U.S. Defendants engaged in potential
financial dealings with individuals in the Ukraine who used their own money to fund political
efforts that injured the Plaintiff. DE 23 at 34-43 ¶¶ 100-133. But this type of allegation, even if
true, is insufficient to satisfy the proximate cause requirement. “Acts that merely ‘furthered,
independently of the act’ do not directly cause that injury, and thus do not proximately cause it.”
Picard v. Kohn, No. 11-cv-1181, 2012 U.S. Dist. LEXIS 22083, at *9 (S.D.N.Y. Feb. 22, 2012)
(quoting DeSilva v. North Shore-Long Island Jewish Health Sys., Inc., 770 F. Supp. 2d 497, 524
(E.D.N.Y. 2011)). Thus, in a case involving Bernard Madoff’s bankruptcy, Judge Rakoff
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concluded that a Bankruptcy Trustee’s allegation that a purported criminal conspiracy “fed,
perpetuated, and profited from [Madoff Securities’] Ponzi scheme” was “the kind of causal
assertion that is too indirect to satisfy the proximate cause requirement” because the investors’
injuries “‘could have happened independently’ of the ‘flood of cash’ by which defendants merely
‘facilitated’ Madoff Securities’ operations…” Id. at *9-10. The same conclusion must apply to
When a federal court has original jurisdiction over a claim, it has the power to hear any
claim that is so related to the claim over which the court has original jurisdiction that it “form[s]
part of the same case or controversy under Article III of the United States Constitution.” 28
U.S.C. § 1367(a). Yet, the court need not exercise that power. “It has consistently been
recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff’s right.” United
Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966). Thus, “[t]he exercise of supplemental
jurisdiction is left to the discretion of the district court, and [appellate] review is limited to
whether the district court abused its discretion.” First Capital Asset Mgmt. v. Satinwood, Inc.,
(3) the district court has dismissed all claims over which it has
original jurisdiction, or
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28 U.S.C. § 1367(c). Only one of the four prongs of § 1367(c) needs to be satisfied in order to
decline to exercise supplemental jurisdiction. Correspondent Servs. Corp. v. J.V.W. Invs., 205 F.
Supp. 2d 191, 200 (S.D.N.Y. 2002). If the court determines that any of the prongs apply, the
court also must consider the factors articulated in Gibbs: whether judicial economy, convenience,
comity, and fairness to litigants favors the exercise of jurisdiction. Shahriar v. Smith &
Wollensky Rest. Group, Inc., 659 F.3d 234, 245 (2d Cir. 2011).
In particular, pursuant to section 1367(c)(3), if federal claims “are dismissed before trial,
even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as
well.” First Capital Asset Mgmt., 385 F.3d at 183. The Second Circuit has “repeatedly said” as
much. Oneida Indian Nation v. Madison Cty., 665 F.3d 408, 437 (2d Cir. 2011).4 This is
because in the usual case in which all federal-law claims are dismissed before trial, the balance
of the Gibbs factors “will point toward declining to exercise jurisdiction over the remaining
[non-federal] claims.” Id. (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988))
Here, section 1367(c)(3) warrants the Court’s exercise of its discretion to decline to
exercise supplemental jurisdiction over Plaintiff’s non-federal law claims set forth in Count III
4 See also, e.g., Ross v. Woods, 412 Fed. Appx. 392, 393 (2d Cir. 2011) (holding that it is
generally appropriate to dismiss pendent [non-federal] claims under circumstances in which the
district court has dismissed all claims over which it has original jurisdiction); Astra Media Group
LLC v. Clear Channel Taxi Media, LLC, 414 Fed. Appx. 334, 337 (2d Cir. 2011) (“[W]e have
generally held that where all the federal claims have been dismissed at a relatively early stage,
the district court should decline to exercise supplemental jurisdiction over pendent [non-federal]
claims.”); Burgess v. Harris Beach PLLC, 346 Fed. Appx. 658, 661 (2d Cir. 2009) (“In general,
where the federal claims are dismissed before trial, the [non-federal] claims should be dismissed
as well.”); Klein & Co. Futures, Inc. v. Bd. of Trade, 464 F.3d 255, 262 (2d Cir. 2006) (“It is
well settled that where, as here, the federal claims are eliminated in the early stages of litigation,
courts should generally decline to exercise pendent jurisdiction over remaining [non-federal]
claims.”).
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(breach of fiduciary duty and aiding and abetting breach of fiduciary duty) and Count IV
(malicious prosecution). In the event that the Court dismisses Plaintiff’s federal ATS and RICO
claims, Plaintiff’s non-federal claims should be dismissed as well. First Capital Asset Mgmt.,
385 F.3d at 182. Exercising supplemental jurisdiction over Plaintiff’s non-federal law claims in
this case would not promote economy, convenience, fairness, or comity. Gibbs, 383 U.S. at 726.
Instead, it would increase the costs and burdens on the parties and the Court, especially with
respect to such issues as the increased need for translation services for documents and witnesses.
Moreover, the majority of those documents and witnesses are likely located overseas, where the
vast majority of the events underlying Plaintiff’s complaint allegedly occurred. Otherwise, aside
from a short-lived motion to intervene filed by judgment creditor Universal Trading &
Investment Co., Inc., which did not involve the U.S. Defendants, no motions have been filed
(and certainly no substantive motions), discovery has not yet commenced, and the case is clearly
Instead, as in First Capital Asset Mgmt., “many of the litigants are foreign nationals, and
this case is likely to go on for years.” 385 F.3d at 183. There, the Second Circuit found that the
district court did not abuse its discretion in declining to exercise supplemental jurisdiction over
the plaintiffs’ non-federal claims after it dismissed the plaintiffs’ RICO claims prior to trial. Id.
Likewise, this Court should decline to exercise supplemental jurisdiction over Plaintiff’s
non-federal claims, and it should dismiss them for want of jurisdiction. Plainly, there are judicial
permit this matter to be resolved where it more appropriately belongs: in Ukraine or in the
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In the event that the Court determines it should retain supplemental jurisdiction over
Plaintiff’s non-federal claims, the Court should nonetheless dismiss Counts III and IV pursuant
to Federal Rule of Civil Procedure 12(b)(6) for failing to meet the pleading standards mandated
Assuming arguendo that New York law applies to Plaintiff’s non-federal claims, they fail
for factual insufficiency. Plaintiff has simply failed to plead any involvement by any of the U.S.
Defendants in their claims of breach of fiduciary duty and malicious prosecution. None of the
U.S. Defendants are mentioned by name in either Count III or Count IV, see DE 23 at 91-93 ¶¶
286-294, and the factual allegations that conceivably address the Defendants are so vague and
conclusory that the U.S. Defendants are left guessing Plaintiff’s theory as to their liability. See
id. at 91-92 ¶ 288 (“Firtash and his affiliates, agents and co-conspirators not only had actual
knowledge of the officials’ breach of their fiduciary duty to Ukrainian citizens, but also actively
5 In her Amended Complaint, Plaintiff states without explanation that her non-federal claims are
“brought under the laws of the State of New York.” DE 23 at 18 ¶ 47. In the normal course, a
federal court adjudicating non-federal law claims that are pendent to a federal claim “must apply
the choice of law rules of the forum state.” Rogers v. Grimaldi, 875 F.2d 994, 1002 (2d Cir.
1989). This would entail determining whether Ukrainian law provides relief for Plaintiff’s
claims of breach of fiduciary duty and malicious prosecution and, if so, what the elements of
such claims would be, whether they conflict with the elements of those claims under New York
law, and, if so, which jurisdiction has the greater interest in this litigation. See, e.g., Hanly v.
Powell Goldstein, LLP, No. 05-cv-5089, 2007 U.S. Dist. LEXIS 17152, at *12 (S.D.N.Y. Mar. 9,
2007) (“In New[]York, the first question to resolve in determining whether to undertake a
choice-of-law analysis is whether a conflict of laws exists), aff’d 290 Fed. Appx. 435 (2d Cir.
2008); Tripodi v. Local Union No. 38, 120 F. Supp. 2d 318, 321 (S.D.N.Y. 2000) (applying
“interest” analysis in malicious prosecution case). The U.S. Defendants expressly reserve the
right to fully litigate all relevant choice-of-law issues. But at this juncture in the case, when it is
abundantly clear that the Court should dismiss Counts III and IV either on jurisdictional grounds
or for failing to meet the applicable pleading standards, the expenditure of resources on such an
endeavor would be unwise.
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facilitated and enabled the breach by, among other things, paying substantial kickbacks to these
officials for their assistance.”); id. at 92 ¶ 291 (“The remaining Defendants directed, conspired
with, and/or facilitated, aided and abetted these government officials’ selective and malicious
A. Count III Fails to Allege a Cognizable Breach of Fiduciary Duty Claim against
the U.S. Defendants
Under New York law, “[t]he elements of a breach of fiduciary duty claim are (1) that a
fiduciary duty existed between plaintiff and defendant, (2) that defendant breached that duty, and
(3) damages as a result of the breach.” Meisel v. Grunberg, 651 F. Supp. 2d 98, 114 (S.D.N.Y.
2009). Plaintiff alleged that the relevant fiduciary relationship here was between “the Ukrainian
government and Naftogaz officials” on the one hand, and Ukrainian citizens as a whole on the
other. DE 23 at 91 ¶ 287. The U.S. Defendants are obviously not Ukrainian government
officials or Naftogaz officials. Plaintiff has not alleged and cannot allege that these Defendants
had a fiduciary duty to her, meaning that Plaintiff has not alleged that the U.S. Defendants
To state a claim for aiding and abetting a breach of fiduciary duty under New York law, a
plaintiff “must adequately plead (1) the existence of a violation by the primary wrongdoer, (2)
knowledge of the violation by the aider and abettor[,] and (3) substantial assistance by the aider
and abettor of the primary wrongdoer.” Hilton Head Holdings v. Peck, No. 11-cv-7768, 2012
U.S. Dist. LEXIS 24984, at *11-12 (S.D.N.Y. Feb. 23, 2012). Plaintiff has stated that the
Ukrainian government and Naftogaz officials “breached their fiduciary duty to represent and
protect the financial interests of Ukrainian citizens, by securing a favored position for RUE in the
Russia-Ukraine gas trade and not challenging Firtash and RUE’s Stockholm arbitration claims.”
DE 23 at 91-92 ¶ 288. The Amended Complaint goes on to state that “Firtash and his affiliates,
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agents and co-conspirators” had “actual knowledge” of this breach and “actively facilitated and
First, it is unclear whether Plaintiff has adequately alleged the underlying primary
violation.6 In her Amended Complaint, Plaintiff states in conclusory fashion that because
Ukrainian government officials were “charged with representing Ukrainian citizens’ interests in
the Russia-Ukraine gas trade and Stockholm arbitration,” those officials had a “duty to act for the
benefit of Ukrainian citizens given that Naftogaz is an entirely state-owned company.” Id. at 91
¶ 287. So, while the claimed fiduciary duty was purportedly owed to the entire Ukrainian
citizenry and purportedly breached as to the entire Ukrainian citizenry, Plaintiff is claiming that
the breach damaged her in particular — and not solely because of purported losses to Ukrainian
citizens as a whole, but because of vague “financial loss and physical injury” purportedly
“intertwined with the political persecution and arbitrary detentions to which [Plaintiff was]
subjected.” Id. at 91 ¶ 288. It is unnecessary to unpack this tangled theory, however, because as
demonstrated infra, Plaintiff has altogether failed to plead that the U.S. Defendants had actual
It is also unclear whether Plaintiff even intends to characterize the U.S. Defendants as
Firtash’s “affiliates, agents and co-conspirators.” But, assuming that Plaintiff did intend as
much, their conclusory allegations concerning these Defendants’ purported knowledge of the
breach and active facilitation of that breach are insufficient as a matter of law. “To participate
knowingly means to have actual knowledge, as opposed to merely constructive knowledge, and a
plaintiff may not merely rely on conclusory and sparse allegations that the aider or abettor knew
6 Again, to allege such a violation, Plaintiff must plead the existence of a fiduciary duty between
herself and defendants, that defendants breached that duty, and that Plaintiff suffered damages as
a result. Meisel, 651 F. Supp. 2d at 114.
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or should have known about the primary breach of fiduciary duty.” Meisel, 651 F. Supp. 2d at
115 (alterations and internal quotation marks omitted). Moreover, the “aider o abettor must also
provide substantial assistance to the primary violator.” Id. “Under New York law, substantial
assistance may only be found where the alleged aider and abettor affirmatively assists, helps
conceal or fails to act when required to do so, thereby enabling the breach to occur.” Id.
While Plaintiff has asserted that “Firtash and his affiliates, agents and co-conspirators”
had “actual knowledge” of this breach and “actively facilitated and enabled” it, she has pled no
facts from which it can be inferred that the U.S. Defendants had actual knowledge of the
purported breach of fiduciary duty or any facts that would render plausible Plaintiff’s claim that
the U.S. Defendants provided substantial assistance to anyone with respect to an alleged breach.
See, e.g., DE 23 at 13-15, 34-43, 91-92 ¶¶ 33-37, 100-33, 286-89. At most, the Amended
Complaint alleges that CMZ Ventures and the Dynamic Group are investment vehicles through
which Firtash “and his associates…channel[ed] their illegal proceeds,” id. at 13 ¶ 33; that
Barbara Ann Holdings and Mr. Zackson “acted as agents for Firtash and his associates by
covertly investing their money through CMZ Ventures, Kallista Investments, and the Dynamic
Fund,” id. at 13 ¶ 34; and that Mr. Manafort “assist[ed] Firtash to become a major ‘investor’ and
silent partner in defendants CMZ Ventures…Group DF and their affiliated companies,” id. at 14
¶ 35. But there is nothing in those allegations to suggest — much less properly plead — that any
of these Defendants had actual knowledge of the purported breach of fiduciary duty or that they
Thus, while Plaintiff has recited the elements in support of her claim, her “allegations are
nothing more than labels and conclusions that fail under Iqbal” and Twombly. Hilton Head
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Holdings, 2012 U.S. Dist. LEXIS 24984, at *12; see also Horvath v. Banco Comercial
Portugues, S.A., No. 10-cv-4697, 2011 U.S. Dist. LEXIS 15865, at *24 (S.D.N.Y. Feb. 15, 2011)
(“Other than baldly asserting that Millennium had actual knowledge, the Complaint does not
allege any facts that allow this Court to infer that Millennium had such knowledge….For similar
reasons, Plaintiff has failed to plead sufficient facts to establish that Millennium provided BCP
substantial assistance.”).7
In short, Plaintiff has not — and cannot — make any plausible allegations that Mr.
Manafort, Mr. Zackson, Barbara Ann Holdings, CMZ Ventures, and Dynamic Fund actually
knew about or were in any way involved in the alleged breach of fiduciary duty owed to
¶¶ 287-288. Accordingly, should the Court exercise supplemental jurisdiction over Count III,
7 Plaintiff’s only, albeit half-hearted, attempt to tie any of the U.S. Defendants to her breach-of-
fiduciary-duty claim is to state that because Mr. Manafort had been “a key advisor to President
Yanukovich and other Ukraine political figures since approximately 2003, he knew exactly how
Firtash and his affiliated companies and associates were able to skim billions of dollars from the
natural gas deals between Russia and Ukraine, and he knew that the monies were used to pay off
political figures and government officials in Ukraine.” DE 23 at 15 ¶ 37. Plaintiff fails to
explain how Mr. Manafort’s role as “a key advisor to President Yanukovich and other Ukraine
political figures” possibly equates to knowledge as to “exactly how Firtash and his affiliated
companies and associates were able to skim billions of dollars from the natural gas deal between
Russia and Ukraine, and he knew that the monies were used to pay off political figures and
government officials in Ukraine.” There is no obvious connection between Mr. Manafort’s
advisory role and any actual knowledge of Firtash’s money skimming or payoffs relating to the
natural gas deal, and Plaintiff has not attempted to provide an explanation. Plaintiff’s bald
assertion amounts to nothing more than speculation. See Glidepath Holding B.V. v. Spherion
Corp., No. 04-cv-9758, 2010 U.S. Dist. LEXIS 33255, at *40-41 (S.D.N.Y. Mar. 26, 2010)
(“[E]ven assuming arguendo that Thompson did breach his fiduciary duties…Plaintiffs have not
pointed to any evidence aside from pure conjecture that Spherion knowingly induced or
participated in that breach. Accordingly, Plaintiffs claims for aiding and abetting breach of
fiduciary duty also fail for this reason.”); see also GEO Group, Inc. v. Cmty. First Servs., No. 11-
cv-1711, 2012 U.S. Dist. LEXIS 45654, at *31-32 (E.D.N.Y. Mar. 30, 2012) (“GEO alleges only
that Nelson-Dabo worked at both GEO and CFS at the same time…and that other individuals
who also worked for both GEO and CFS committed torts. These facts alone do not raise an
inference of actual knowledge…‘above the speculative level.’”).
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the Court should nonetheless dismiss that count as to the U.S. Defendants for failure to state a
Similarly, the Court should dismiss Count IV, which purports to allege a claim of
malicious prosecution. Should the Court exercise supplemental jurisdiction over Plaintiff’s non-
federal claims, and assuming arguendo that New York law applies to Plaintiff’s malicious
To establish a claim for malicious prosecution under New York law, a plaintiff must
show: “(1) the commencement or continuation of a criminal proceeding by the defendant against
the plaintiff; (2) the termination of the proceeding in favor of the accused; (3) the absence of
probable cause for the criminal proceeding; and (4) actual malice.” Hanly, 2007 U.S. Dist.
LEXIS 17152, at *16. As to the first element, the defendant must “play an active role in the
prosecution, such as giving advice and encouragement or importuning the authorities to act.” Id.
(internal quotation marks omitted). As to the second element, “a criminal action is terminated in
the accused’s favor…where a judicial determination of the accused’s innocence on the merits of
the action has been made.” Ward v. Silverberg, 85 N.Y.2d 994 (1995). All in all, “[t]he law in
New York ‘places a heavy burden on malicious prosecution plaintiffs.’” Lawrence v. City
Cadillac, No. 10-cv-3324, 2010 U.S. Dist. LEXIS 132761, at *17 (S.D.N.Y. Dec. 8, 2010).
As with Plaintiff’s breach-of-fiduciary-duty claim, she has not alleged that the U.S.
(“Defendant prosecutors Pshonka, Kuzmin, Nechvoglod, and Frolova selectively and maliciously
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prosecuted Plaintiffs on politically-motivated and false charges, with the purpose of intimidating
it appears that Plaintiff’s theory is that the U.S. Defendants “directed, conspired with, and/or
facilitated, aided, and abetted these government officials’ selective and malicious prosecution of
Plaintiffs.” Id.; see also id. at 2 ¶ 2 (“These political persecutions have been carried out at the
direction of Defendant Viktor Pshonka, Ukraine’s Prosecutor General, with the knowledge,
consent, and material support, if not at the request, of the remaining Defendants and their agents
and co-conspirators, in an attempt to quash political opposition in Ukraine and unjustly enrich
Yet there are no facts alleged in the Amended Complaint tending to plead such a claim.
Taking the elements somewhat out of order, Plaintiff has failed to assert anywhere in the entire
Amended Complaint that any of the criminal proceedings terminated in her favor. Id. In fact,
her complaint seems to be just the opposite — that she has been wrongfully detained without
meaningful resolution of her case. Without pleading this essential element of malicious
prosecution, any attempt by Plaintiff to plead that the U.S. Defendants “directed, conspired with,
and/or facilitated, aided, and abetted” the prosecutors to commit malicious prosecution likewise
fails.
Moreover, while Plaintiff has listed various criminal proceedings initiated against and
arbitrary detentions of “Tymoshenko and her allies,” see id. at 51-52 ¶ 160; id. at ¶¶ 17-22, 25,
63, 69, 75, 160, 169-70, 174-83, 189-92, 196, 200, 207, nowhere does she explain how the U.S.
Defendants assisted or encouraged the authorities (or anyone else) to act in this regard. See
Hanly, 2007 U.S. Dist. LEXIS 17152, at *16. At a more basic level, Plaintiff has alleged no
facts indicating that these Defendants ever had contact with the prosecutors or any other
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individuals within the Ukrainian law enforcement community — or that they encouraged or
In sum, Plaintiff has altogether failed to allege any facts from which the Court could infer
that the U.S. Defendants were in any way involved in any so-called malicious prosecution. As
Hanly v. Powell Goldstein, 290 Fed. Appx. 435, 440 (2d Cir. 2008). Plaintiff’s Amended
Complaint attempts to do precisely what the Second Circuit rejected in Hanly — it asks the
Court to draw conclusions about how “certain unspecified actions should be interpreted or
labeled.” Id. Because “merely reciting labels” does not satisfy Plaintiff’s burden, should the
Court exercise supplemental jurisdiction over Count IV, the Court should nonetheless dismiss
that count as to the U.S. Defendants for failure to state a claim upon which relief can be granted.
In the Amended Complaint, Plaintiff claims that the Court “has personal jurisdiction over
all parties by virtue of their residence in New York, their business and/or tortious activities in
this state, or by operation of Fed. R. Civ. P. 4(k)(1-2).” DE 23 at 17 ¶ 45. Despite this bald
assertion, this Court lacks personal jurisdiction over Mr. Manafort. As a result, should the Court
decline to dismiss the Amended Complaint against Mr. Manafort for failure to state a claim, it
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should nonetheless dismiss the complaint against him for lack of personal jurisdiction. Fed. R.
Civ. P. 12(b)(2).
On a Rule 12(b)(2) motion, the plaintiff bears the burden of establishing jurisdiction over
a defendant. Tamam v. Fransabank SAL, 677 F. Supp. 2d 720, 725 (S.D.N.Y. 2010). Because
no discovery has taken place, to survive such a motion the plaintiff must plead “factual
allegations that constitute a prima facie showing of jurisdiction.” Id. (internal quotation marks
and alterations omitted). “A prima facie showing of jurisdiction does not mean that plaintiff
must show only some evidence that defendant is subject to jurisdiction; it means that plaintiff
must plead facts which, if true, are sufficient in themselves to establish jurisdiction.” Id.
(internal quotation marks omitted) (emphasis added). And while the court assumes the truth of
the plaintiff’s factual allegations for purposes of this analysis, the court “need not draw
allegations or a legal conclusion couched as a factual allegation will not establish a prima facie
Plaintiff first asks the Court to exert personal jurisdiction over Mr. Manafort pursuant to
Federal Rule of Civil Procedure 4(k)(1), see DE 23 at 17 ¶ 45, which provides that “[s]erving a
summons or filing a waiver of service establishes personal jurisdiction over a defendant who is
subject to the jurisdiction of a court of general jurisdiction in the state where the district court is
located.” Fed. R. Civ. P. 4(k)(1). This jurisdictional inquiry is two-fold: (1) the court looks to
the law of the forum state (here, New York) to determine whether it may exert personal
jurisdiction over the defendant; (2) if so, the court then considers whether subjecting the
defendant to personal jurisdiction comports with the requirements of due process. Tamam, 677
F. Supp. 2d at 726.
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New York’s long-arm statute confers personal jurisdiction over a foreign defendant who
“transacts any business within the state” where the plaintiff’s claim arises from that business
activity. N.Y. CPLR § 302(a)(1). Here, Plaintiff seems to contend that Mr. Manafort “had the
New York defendants act as [his] agents with regard to all activities of their racketeering
enterprise that were conducted from the New York offices.” DE 23 at 14 ¶ 35. Given this
“agency” theory of personal jurisdiction, Plaintiff must adequately allege that Mr. Manafort
“knew of, consented to, controlled, and benefitted from the business transaction.” Greenman-
Pedersen, Inc. v. Berryman & Henigar, Inc., No. 09-cv-0167, 2009 U.S. Dist. LEXIS 72884, at
*9 (S.D.N.Y. Aug. 18, 2009). Plaintiff has not done so, nor could she.
Plaintiff alleges that Mr. Manafort is a “well-known Washington, D.C. lobbyist and
political consultant.” DE 23 at 14 ¶ 35 (emphasis added). Yet, Plaintiff has alleged no facts that
would establish personal jurisdiction over Mr. Manafort in New York. Despite her “agency”
theory of personal jurisdiction, Plaintiff has not alleged that Mr. Manafort knew of any of the
New York-based business transactions complained of in the Amended Complaint — much less
that he had an agency relationship with any of the other individual defendants, consented to any
business transactions undertaken by those defendants in New York, that he controlled those
transactions, or that he benefitted from them. Id.; Greenman-Pedersen, Inc., 2009 U.S. Dist.
LEXIS 72884, at *9.9 Instead, the Court is left with only “conclusory non-fact-specific”
9 Indeed, no New York business transactions are the root cause of Plaintiff’s claims. Instead,
Plaintiff’s complaint is with the Ukrainian Defendants’ alleged actions in Ukraine. Even if funds
from the natural gas transactions were ultimately invested in New York, see DE 23 at 14 ¶ 35, “a
defendant may not be subject to personal jurisdiction under CPLR § 302(a)(1) simply because
[his] contact with New York was a link in a chain of events giving rise to the cause of action.”
Tamam, 677 F. Supp. 2d at 728-29. Regardless, the Court need not address this issue, as it is
clear that Plaintiff has not alleged sufficient facts (or any facts) establishing a prima facie
showing of personal jurisdiction over Mr. Manafort.
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allegations from which the Court is asked to draw “argumentative inferences” in Plaintiff’s
favor. Tamam, 677 F. Supp. 2d at 725. Thus, Plaintiff has failed to properly allege that the
Court has personal jurisdiction over Mr. Manafort pursuant to Rule 4(k)(1).
Alternatively, Plaintiff asks the Court to assert personal jurisdiction over Mr. Manafort
under Federal Rule of Civil Procedure 4(k)(2). See DE 23 at 17 ¶ 45. “Rule 4(k)(2) is designed
to fill a gap in the enforcement of federal law for courts to exercise personal jurisdiction over
defendants having sufficient contacts with the United States to justify the application of United
States law…but having insufficient contact with any single state to support jurisdiction under
state long-arm legislation.” Tamam, 677 F. Supp. 2d at 731 (internal quotation marks omitted).
Pursuant to this rule, personal jurisdiction is proper “where: (1) the plaintiff’s cause of action
arises under federal law; (2) the defendant is not subject to the jurisdiction of any one state; and
(3) sufficient contacts with the United States exist such that the exercise of personal jurisdiction
over the defendant is consistent with the requirement of due process.” Id.
In this case, even if the Court were to decline to dismiss either of Plaintiff’s federal
claims, “Plaintiff[ ] ha[s] not certified that [Mr. Manafort is] not subject to jurisdiction in any
other state.” Id. Additionally, while Mr. Manafort arguably has sufficient contacts with the
United States as a whole, Plaintiff has utterly failed to establish that haling Mr. Manafort into
court in New York is at all reasonable. See id. Plaintiff “must establish that defendant had
sufficient contacts with the forum such that ‘maintenance of the suit does not offend traditional
notions of fair play and substantial justice.’” Id. (quoting Int’l Shoe Co. v. Washington, 326 U.S.
310, 316 (1945)). “The minimum contacts test requires plaintiff to allege jurisdictional facts
sufficient to show that defendants purposefully directed their activities at residents of the forum
and the litigation results from alleged injuries that arise out of or related to those activities such
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that defendants could reasonably foresee being haled into court in the forum.” Id. (internal
As established above, Plaintiff has alleged no facts tending to show that Mr. Manafort
had any contacts with the state of New York (see DE 23 at 14-15 ¶¶ 35, 37) — much less
sufficient contacts such that “maintenance of the suit does not offend ‘traditional notions of fair
play and substantial justice.’” Int’l Shoe Co., 326 U.S. at 316. The Amended Complaint alleges
not a single fact showing that Mr. Manafort purposefully directed his activities at residents of
New York, or that he could reasonably foresee being haled into court in New York.
Accordingly, the Court should find that it does not have personal jurisdiction over Mr. Manafort
CONCLUSION
For the above stated reasons, Paul Manafort, Brad Zackson, CMZ Ventures, LLC, the
Dynamic Group, and Barbara Ann Holdings, LLC respectfully request that the Court grant their
Motion to Dismiss.
Respectfully Submitted,
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that, on the 27th day of April, 2012, a true and genuine copy of
the foregoing was filed by ECF, which will automatically send notification and a copy of such