Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-15-03023/USCOURTS-ca2-15-03023-0/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 

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15‐3023‐cv

Goel et al. v. Bunge, Ltd. et al.   

In the 

United States Court of Appeals 

For the Second Circuit ________

AUGUST TERM 2015

No. 15‐3023‐cv

VIKAS GOEL AND RAINFOREST TRADING LTD.,

Plaintiffs‐Appellants,

v.

BUNGE, LTD., BUNGE S.A., GRAINS AND INDUSTRIAL PRODUCTS PTE

LTD., STATE BANK OF INDIA,

Defendants‐Appellees,

AMERICAN DIGITAL UNIVERSITY, INC., INTERNATIONAL MARITIME

UNIVERSITY, LLC, TELEDATA MARINE SYSTEMS LLC, TELEDATA

SYSTEMS AND SERVICES, LLC, AND ANUSH RAMACHANDRAN,

Defendants.*

________

Appeal from the United States District Court

for the Southern District of New York

________

   

 

* The Clerk of Court is directed to amend the official caption to conform

with the caption above.

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ARGUED: APRIL 6, 2016

DECIDED: APRIL 28, 2016

________

Before: KEARSE, CABRANES, AND CHIN, Circuit Judges.

________

Plaintiffs‐appellants Vikas Goel and Rainforest Trading Ltd.

appeal August 7, 2015 and August 27, 2015 judgments of the United

States District Court for the Southern District of New York

(Katherine B. Forrest, Judge) dismissing as untimely their claims

under the Racketeer Influenced and Corrupt Organizations Act, 18

U.S.C. § 1961 et seq., and declining to exercise supplemental

jurisdiction over their state‐law claims.  Concluding that the District

Court properly rejected plaintiffs’ argument that their claims are

timely under New York’s so‐called “savings statute,” N.Y. C.P.L.R. §

205(a), but that the Court erred by considering materials outside the

pleadings at the motion‐to‐dismiss stage, we VACATE the judgment

and REMAND for further proceedings.

________

ROBERT SENTNER, Sentner Safran LLP, New York,

NY (Victoria Safran, Sentner Safran LLP, New

York, NY, and Nicole F. Mastropieri, Nixon

Peabody LLP, New York, NY, on the brief), for

Plaintiffs‐Appellants.

WENDY H. SCHWARTZ, Binder & Schwartz LLP,

New York, NY (John C. Scalzo and Jennifer L.

Achilles, Reed Smith LLP, New York, NY, on the

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brief), for Defendants‐Appellees Bunge, Ltd., Bunge

S.A., and Grains and Industrial Products PTE Ltd.

BRIAN ROSNER (Natalie A. Napierala, on the brief),

Carlton Fields Jordan Burt, P.A., New York, NY,

for Defendant‐Appellee State Bank of India.

________

JOSÉ A. CABRANES, Circuit Judge:

Plaintiffs‐appellants Vikas Goel and Rainforest Trading Ltd.

(jointly, “plaintiffs”) appeal August 7, 2015 and August 27, 2015

judgments of the United States District Court for the Southern

District of New York (Katherine B. Forrest, Judge) dismissing as

untimely their claims under the Racketeer Influenced and Corrupt

Organizations Act, 18 U.S.C. § 1961 et seq. (“RICO”), and declining to

exercise supplemental jurisdiction over their state‐law claims.  

Among other arguments, plaintiffs contend that their claims are

timely under New York’s so‐called “savings statute,” N.Y. C.P.L.R. §

205(a), and that the District Court erred by relying on materials

outside the pleadings in deciding motions to dismiss brought by

defendants‐appellees Bunge, Ltd., Bunge S.A., Grains and Industrial

Products PTE Ltd., and the State Bank of India (“SBI”) (jointly,

“defendants”).   

We reject the argument that New York’s savings statute

governs the timeliness of plaintiffs’ federal claims, but we are

persuaded by plaintiffs’ second contention.    Presented with

documents extrinsic to the complaint at the motion‐to‐dismiss stage,

the District Court should have either excluded the documents or,

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pursuant to Federal Rule of Civil Procedure 12(d), treated the

motions to dismiss as motions for summary judgment.   Because it

did neither, we must VACATE the judgment and REMAND for

further proceedings.

BACKGROUND

This case arises out of an alleged fraud.    According to the

complaint, Goel founded and managed a computer‐equipment

distribution company called eSys Informatics, Ltd. (“eSys”).  In 2006,

he contracted to sell fifty‐one percent of eSys’s shares to Teledata

Informatics Pte. Ltd. (“Teledata”), an Indian company purporting to

be in the software business, at the price of $105 million.  Goel alleges

that Teledata was a sham operation; that it carried on no legitimate

business; and that it was only through the connivance of defendants,

who participated with Teledata in a complex scheme that involved

illegal loans used to generate profits from interest‐rate arbitrage,

that Teledata was made to appear an attractive investment partner.  

All collapsed in the end, destroying the value of eSys and damaging

plaintiffs to the tune of hundreds of millions of dollars.  

Following a 2009 fraud action brought by plaintiffs against

Teledata and its affiliates in Singapore, a 2010 action brought by SBI,

also in Singapore, to foreclose on eSys shares pledged as security on

a loan, and a 2010 state‐law action brought by plaintiffs against

Bunge, Ltd., Bunge S.A., and defendant Anush Ramachandran in

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New York state court,1 plaintiffs initiated this lawsuit.  It was filed

on January 2, 2014, in the Supreme Court of the State of New York,

Westchester County.

Defendants removed, then moved to dismiss under Federal

Rule of Civil Procedure 12(b)(6), arguing, inter alia, that plaintiffs’

RICO claims were untimely under the applicable four‐year statute of

limitations.  See Koch v. Christie’s Int’l PLC, 699 F.3d 141, 148 (2d Cir.

2012).  The District Court agreed.  It concluded that Goel had been

put on inquiry notice of his RICO claims no later than 2007, more

than four years before he filed this action, and had failed to

investigate with reasonable diligence the possibility that he had been

injured.  Goel v. Am. Dig. Univ., Inc., Nos. 14 Civ. 2053 (KBF), 14 Civ.

1895 (KBF), 2015 WL 5037002, at *11‐13 (S.D.N.Y. Aug. 26, 2015).  

Accordingly, the Court dismissed the RICO claims and, with no

federal claim remaining in the case, declined to exercise

supplemental jurisdiction over plaintiffs’ state‐law claims.  Id. at *13.

On appeal, plaintiffs advance a number of arguments in

support of their central contention: that the District Court erred in

dismissing their RICO claims as untimely.  We agree with plaintiffs

that the District Court improperly relied on materials outside the

complaint at the motion‐to‐dismiss stage.  Accordingly, we conclude

that the judgment must be vacated and the cause remanded.

 

1 Most of plaintiffs’ claims in the New York case were dismissed for

failure to state a claim, see Goel v. Ramachandran, 111 A.D.3d 783 (N.Y. App. Div.

2d Dep’t 2013); the sole remaining count, a fraud claim, was dismissed without

prejudice pursuant to a stipulation of discontinuance.

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DISCUSSION

Though our conclusion that the District Court erred in

roaming outside the pleadings obviates the need to consider

plaintiffs’ other arguments, we pause to address their contention

that this action is timely under New York’s savings statute, N.Y.

C.P.L.R. § 205(a).2    This statute “effectively tolls the running of a

statutory period to permit refiling within six months when an action

has been timely commenced but dismissed on grounds other than

voluntary discontinuance, lack of personal jurisdiction, neglect to

prosecute, or the entry of a final judgment on the merits.”  Goldstein

v. N.Y. State Urban Dev. Corp., 921 N.E.2d 164, 168 (N.Y. 2009).

On this point, we agree with the District Court: New York’s

savings statute is no help to plaintiffs.    RICO is a federal law

governed by a federal statute of limitations, and that statute of

limitations is subject to federal, not state, tolling rules.    See

Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339,

347 (2d Cir. 1994) (“[I]t seems obvious to us that . . . concerns for

uniformity . . . dictate that federal rather than state tolling doctrines

should govern in civil RICO actions.”); see also Burnett v. N.Y. Cent.

R.R. Co., 380 U.S. 424, 433 (1965) (“[T]he period of time within which

an action may be commenced is a material element in a uniformity

 

2 We think it appropriate to reach this issue because resolving it in

plaintiffs’ favor would put to rest the question of timeliness, rather than delaying

its consideration until a later stage in the litigation—the result of today’s

disposition.

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of operation which Congress would not wish to be destroyed by the

varying provisions of the State statutes of limitation.    The

incorporation of variant state saving statutes would defeat the aim

of a federal limitation provision designed to produce national

uniformity.” (alterations, citation, and internal quotation marks

omitted)).  This principle applies irrespective of the forum in which

a RICO claim is first asserted, rendering inconsequential—at least

for this purpose—plaintiffs’ decision to file in state rather than

federal court.  See Sawyer v. Atlas Heating & Sheet Metal Works, Inc.,

642 F.3d 560, 562‐63 (7th Cir. 2011) (applicable statute of limitations

is determined by “[t]he source of law, and not the identity of the

forum”).  Accordingly, the District Court did not err in holding that

New York’s tolling provision does not operate to save plaintiffs’

claims.

We reach a different conclusion with respect to the District

Court’s reliance on documents outside the complaint on defendants’

motions to dismiss.    A motion brought under Rule 12(b)(6)

challenges only the “legal feasibility” of a complaint.  Global Network

Commc’ns, Inc. v. City of New York, 458 F.3d 150, 155 (2d Cir. 2006).  

The test of a claim’s “substantive merits” is “reserved for the

summary judgment procedure, governed by [Federal Rule of Civil

Procedure] 56, where both parties may conduct appropriate

discovery and submit the additional supporting material

contemplated by that rule.”  Id. (internal quotation marks omitted).  

Because a Rule 12(b)(6) motion challenges the complaint as

presented by the plaintiff, taking no account of its basis in evidence,

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a court adjudicating such a motion may review only a narrow

universe of materials.    Generally, we do not look beyond “facts

stated on the face of the complaint, . . . documents appended to the

complaint or incorporated in the complaint by reference, and . . .

matters of which judicial notice may be taken.”  Concord Assocs., L.P.

v. Entm’t Props. Tr.,  ‐‐‐ F.3d  ‐‐‐, 2016 WL 1075947, at *2 n.2 (2d Cir.

Mar. 18, 2016) (internal quotation marks omitted).

We have recognized, however, that in some cases, a document

not expressly incorporated by reference in the complaint is

nevertheless “integral” to the complaint and, accordingly, a fair

object of consideration on a motion to dismiss.    A document is

integral to the complaint “where the complaint relies heavily upon

its terms and effect.”  Chambers v. Time Warner, Inc., 282 F.3d 147, 153

(2d Cir. 2002) (internal quotation marks omitted).    Merely

mentioning a document in the complaint will not satisfy this

standard; indeed, even offering “limited quotation[s]” from the

document is not enough.  Global Network Commc’ns, 458 F.3d at 156;

see also Goldman v. Belden, 754 F.2d 1059, 1066 (2d Cir. 1985).    “In

most instances where this exception is recognized, the incorporated

material is a contract or other legal document containing obligations

upon which the plaintiff’s complaint stands or falls, but which for

some reason—usually because the document, read in its entirety,

would undermine the legitimacy of the plaintiff’s claim—was not

attached to the complaint.”    Global Network Commc’ns, 458 F.3d at

157.

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In deciding defendants’ motions to dismiss in this case, the

District Court relied on two sources extrinsic to the complaint:

Goel’s deposition testimony from the 2010 New York action and an

affidavit Goel submitted in connection with the 2010 Singapore

foreclosure proceeding.  See Goel, 2015 WL 5037002, at *6‐7, *9.  In the

District Court’s view, each tended to show that Goel was on notice

of defendants’ fraudulent scheme no later than 2007.  See id. at *11‐

12.  The Court observed that documents outside the complaint are

generally off‐limits on a motion to dismiss, but it considered these

sources nonetheless, on the theory that each was integral to the

complaint.3  Id. at *8‐9.

We cannot agree.    It is true, as defendants emphasize, that

plaintiffs “expressly allege[d] that [a] substantial portion of the facts

described [in the complaint] was learned in the [New York action],”

Bunge Defs.’ Br. at 32 (internal quotation marks omitted) (second

alteration in original); true also, as the District Court stressed, that

plaintiffs “filled the Complaint with allegations relying on and

referencing the court filings and ‘sworn testimony’ from [the New

York action] in order to detail . . . how the scheme worked,” Goel,

2015 WL 5037002, at *9.    But neither observation supports the

District Court’s consideration of Goel’s deposition testimony and

affidavit.   

 

3 The District Court expressly declined to judicially notice the relevant

facts recited in the documents, Goel, 2015 WL 5037002, at *9 n.6, and therefore did

not provide plaintiffs the opportunity to be heard required by Federal Rule of

Evidence 201(e); thus, we do not consider defendants’ argument that Goel’s

deposition testimony and affidavit were proper objects of judicial notice.

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As for the first, we fail to apprehend its significance.    That

Goel learned about the particulars of defendants’ alleged fraud

during the New York lawsuit simply hasn’t a thing to do with

whether his complaint relies heavily on the effect of deposition

testimony he gave in connection with that case.   

As for the second, though plaintiffs’ complaint indeed refers

to “sworn testimony” from the New York action, it does not refer to

Goel’s sworn testimony.    See, e.g., J.A. 32 ¶ 73 (referring to “the

testimony of Bunge Ltd. officers”); J.A. 36 ¶ 93 (referring to “the

testimony of Bunge representatives”); J.A. 36 ¶ 96 (referring to

“sworn Bunge Ltd. testimony”); J.A. 37 ¶ 97 (referring to

“[d]ocuments produced by Bunge”).   Much less does it so heavily

rely on the terms and effect of Goel’s testimony that the deposition

transcript may fairly be deemed integral to the complaint.4    A

complaint that alleges facts related to or gathered during a separate

litigation does not open the door to consideration, on a motion to

dismiss, of any and all documents filed in connection with that

litigation.  See Global Network Commc’ns, 458 F.3d at 156 (complaint’s

reference to plaintiff’s guilty pleas in separate proceedings did not

permit consideration of “the content of his testimony proffered in

exchange for the pleas, as the nexus between the two [was] too

attenuated to render that testimony integral to the complaint”).  A

contrary rule would permit the improper transformation of the Rule

 

4 The connection between the complaint and Goel’s affidavit from the

Singapore foreclosure action appears to be even more attenuated; the complaint

mentions the Singapore proceeding only in passing.  See J.A. 25 ¶ 38.

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12(b)(6) inquiry into a summary‐judgment proceeding—one

featuring a bespoke factual record, tailor‐made to suit the needs of

defendants.

Of course, the Federal Rules of Civil Procedure contemplate

that when a district court is presented with materials outside the

pleadings at the motion‐to‐dismiss stage, circumstances sometimes

favor their consideration.  If the court wishes to take account of such

materials, however, the Rules oblige it to “treat[ ] [the motion] as

one for summary judgment under Rule 56” and give all parties “a

reasonable opportunity to present all the material that is pertinent to

the motion.”  Fed. R. Civ. P. 12(d); see also Chambers, 282 F.3d at 154.   

In this case, the District Court “considered converting

[defendants’] motion[s],” but ultimately decided against it.    Goel,

2015 WL 5037002, at *8 n.5.    Because neither Goel’s deposition

testimony nor his affidavit can properly be deemed integral to the

complaint, that decision was in error.  The appropriate occasion to

consider these documents, which may be relevant to the timeliness

of the RICO claims, is on summary judgment, not a motion to

dismiss.  Accordingly, the judgment must be vacated and the cause

remanded.5

 

5 We leave the question of SBI’s immunity under the Foreign Sovereign

Immunities Act, 28 U.S.C. § 1602 et seq.—which was not addressed below and

which is far afield from the issue of timeliness—for the District Court to consider

in the first instance.

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CONCLUSION

In sum, we conclude that the District Court erred by relying

on materials outside the pleadings in deciding defendants’ motions

to dismiss.  We thus VACATE the judgments of August 7, 2015 and

August 27, 2015 and REMAND for such further proceedings as may

be appropriate in the circumstances.

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