2014 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-11-2014

American Capital Acquisitions v. Fortigent LLC

Precedential or Non-Precedential: Non-Precedential

Docket No. 14-1926

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Recommended Citation

"American Capital Acquisitions v. Fortigent LLC" (2014). 2014 Decisions. Paper 1251.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 14-1926

_____________

AMERICAN CAPITAL ACQUISITIONS PARTNERS LLC; 

LEE ARGUSH; NICHOLAS MARINIELLO; ALAN F. GAVORNIK,

 Appellants

v.

FORTIGENT LLC; ANDREW PUTTERMAN

______________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

(D.C. Civil No. 13-cv-05571)

District Judge: Honorable Anne E. Thompson

____________

Submitted Under Third Circuit LAR 34.1(a)

November 20, 2014

____________

Before: SMITH, HARDIMAN and BARRY, Circuit Judges

(Opinion Filed: December 11, 2014)

____________

OPINION*

____________

BARRY, Circuit Judge

American Capital Acquisitions Partners LLC, Lee Argush, Nicholas Mariniello, 

 

*

 This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent. 
2

and Alan F. Gavornik (unless otherwise noted, together “ACA” or “Appellants”) appeal 

from the order of the District Court dismissing their complaint against Fortigent LLC and 

Andrew Putterman (unless otherwise noted, together “Appellees”). We will affirm.

I. Background1

Argush, Mariniello, and Gavornik are the owners of ACA, which was co-owner of 

Concord Wealth Management (“Concord”). In April 2011, ACA sold its equity interest

in Concord to LPL Holdings, Inc. via a Stock Purchase Agreement (the “SPA”). 

Thereafter, Concord became a subsidiary of LPL Holdings (referred to herein and in the 

District Court’s opinion as “Concord-LPL”), and Argush, Mariniello, and Gavornik 

became senior executives of Concord-LPL and at-will employees of LPL Financial, 

another subsidiary of LPL Holdings. They executed employment agreements with LPL 

Financial which provided for additional compensation in the event that Concord-LPL 

reached certain revenue targets, and, in the SPA, LPL Holdings agreed to make additional 

purchase price payments to ACA provided that Concord-LPL reached certain timesensitive revenue targets. In April 2012, LPL Holdings became affiliated with Fortigent, 

LLC. Thereafter, Argush was directed to report to Putterman, Fortigent’s CEO. 

On August 9, 2013, ACA filed a complaint in the Superior Court of New Jersey, 

alleging claims for tortious interference with prospective advantage (Count I), tortious 

interference with contract (Count II), and civil conspiracy (Count III) against Fortigent 

and Putterman. ACA alleged that Fortigent and Putterman learned of the additional 

 

1

In reviewing the grant of a motion to dismiss, we accept all facts pleaded in the 

complaint as true. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).
3

payments that would flow to ACA if the revenue targets were met and attempted to 

prevent them from achieving the revenue targets in various ways. 

On September 19, 2013, Appellees removed the case to District Court based on 

diversity jurisdiction, 28 U.S.C. § 1332. ACA did not contest removal. Appellees then 

moved to dismiss Count I pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), and to 

dismiss Counts II and III pursuant to Rule 12(b)(6). On March 24, 2014, the Court 

granted the motion to dismiss with respect to all counts. 

The District Court dismissed Count I pursuant to Rule 12(b)(1), holding that ACA 

lacked standing because it claimed damages based on tortious interference with ConcordLPL, a non-party, and had “not established that any of Plaintiffs’ own prospective 

economic relationships, separate and distinct from Concord-LPL’s prospective economic 

relationships, were damaged by Defendants’ actions.” Am. Capital Acquisition Partners, 

LLC v. Fortigent, LLC, Civ. No. 13-5571, 2014 WL 1210580, *4 (D.N.J. Mar. 24, 2014). 

With respect to Count II, the Court held that ACA failed to state a claim because 

Fortigent cannot be held liable for interfering with contracts to which LPL Holdings and 

LPL Financial—corporate affiliates—are parties, unless ACA adequately pleaded facts to 

indicate that Fortigent sought to injure it in bad faith, which the Court held that it had 

failed to do. The Court dismissed Count II with respect to Putterman because ACA 

pleaded no facts to indicate that he was acting outside the scope of his employment, and 

held that Count II also failed because the complaint failed to adequately allege a breach 

of contract as required for a claim of tortious interference with contract. Finally, the 
4

Court dismissed Count III for failure to state a claim because it concluded that LPL 

Holdings, LPL Financial, Fortigent, and Putterman were legally incapable of forming a 

conspiracy, and because ACA failed to allege facts to suggest the existence of an 

unlawful means or purpose. 

Appellants argue on appeal that the District Court erred when it failed to remand 

the entire case to state court after it concluded that it lacked subject matter jurisdiction 

with respect to Count I. They also argue that the Court erred in concluding that Counts II 

and III failed to state a claim, and in failing to provide them an opportunity to file an 

amended complaint. 

II. Jurisdiction and Standard of Review

The District Court had jurisdiction pursuant to 28 U.S.C. § 1332, and we have 

jurisdiction pursuant to 28 U.S.C. § 1291. Our review of a district court’s dismissal 

pursuant to Rule 12(b)(6) and its jurisdictional determinations is plenary. Ballentine v. 

United States, 486 F.3d 806, 808 (3d Cir. 2007).

III. Analysis

A. Remand of the Entire Action

Appellants do not contest the District Court’s determination that they lacked 

standing with respect to Count I. They argue, however, that given that finding, the Court

should have remanded the entire matter to state court. Appellants never raised this 

argument before now; thus, we are left without any analysis to review. As we have held, 

“It is axiomatic that arguments asserted for the first time on appeal are deemed to be 
5

waived and consequently are not susceptible to review in this Court absent exceptional 

circumstances.” Tri-M Grp., LLC v. Sharp, 638 F.3d 406, 416 (3d Cir. 2011) (internal 

quotation marks and citation omitted). We do, however, retain discretion to address such 

arguments, as “the waiver principle is only a rule of practice and may be relaxed 

whenever the public interest or justice so warrants.” Id. (quotation marks and citation 

omitted).

Appellants have made no attempt to explain why they failed to raise this argument 

before the District Court. Thus, we may consider it waived. Even if they had not waived 

the argument, however, it is clearly foreclosed by Supreme Court precedent and, 

therefore, unavailing.

Title 28 U.S.C. § 1447(c) provides: “If at any time before final judgment it 

appears that the district court lacks subject matter jurisdiction, the case shall be 

remanded.” When read literally, the statute could support Appellants’ argument in favor 

of remand. The Supreme Court, however, has rejected any such reading of § 1447(c). In 

Wisconsin Department of Corrections v. Schacht, 524 U.S. 381, 391-93 (1998), 

defendants removed a case to federal court, and then claimed that certain claims brought 

against the State were barred by the Eleventh Amendment. Plaintiff argued that, pursuant 

to § 1447(c), “if the ‘district court lacks subject matter jurisdiction’ over any claim, then 

every claim, i.e., the entire ‘case’ must be ‘remanded’ to the state court.” Id. at 391 

(quoting § 1447(c)). The Supreme Court rejected plaintiff’s interpretation of § 1447(c), 

holding that “the statute refers to an instance in which a federal court ‘lacks subject 
6

matter jurisdiction’ over a ‘case,’ and not simply over one claim within a case.” Id. at 

392. It held that the proper assertion of an Eleventh Amendment bar as to certain claims 

“does not destroy removal jurisdiction over the remaining claims,” and noted that the 

purpose of § 1447, which was to specify procedures for remand where removal is 

defective, did not favor plaintiff’s interpretation. Id.

Similarly, here, Appellees’ successful challenge to Count I on the basis of standing 

did not destroy jurisdiction over the remaining claims. This was not a case, for example, 

in which a claim was dismissed because it was discovered that it had been brought 

against a non-diverse party, thus destroying diversity jurisdiction.2 Therefore, for the 

same reasons the Supreme Court rejected the plaintiff’s reading of § 1447(c) in Schacht, 

we reject Appellants’ interpretation of § 1447(c) as requiring remand of the entire case. 

See also Shaw v. Marriott Int’l, Inc., 605 F.3d 1039, 1044 (D.C. Cir. 2010) (applying 

Schacht and holding that remand of an entire case to state court was not warranted where 

some, but not all, plaintiffs were found to have lacked standing); Lee v. Am. Nat’l Ins. 

Co., 260 F.3d 997, 1006 (9th Cir. 2001) (applying Schacht and rejecting the argument 

that because the district court lacked subject matter jurisdiction over one claim, the entire 

case must be remanded).

 

2 For the first time in their reply brief, Appellants argue that the dismissal of Count I may 

have affected the basis for removal because it may have impacted the amount in 

controversy. (See Reply Br. at 3-4.) The Notice of Removal, however, calculated the 

amount in controversy based on Count II, which alone created a sufficient basis for the 

$75,000 threshold. 
7

B. Remand of Count I

The question remains whether the District Court should have remanded Count I to 

state court instead of dismissing it. As Appellees point out, in Schacht, the Supreme 

Court left this question open. See 524 U.S. at 392 (observing that one could read 

§ 1447(c) to require remand “only of the relevant claims,” but not the entire case). In 

Shaw v. Marriott International, a D.C. Circuit case applying Schacht in a similar context, 

the court concluded that some, but not all, plaintiffs in a removed case lacked standing. 

605 F.3d at 1044. While the D.C. Circuit refused to order remand of the entire case to 

state court, it did remand the claims of those plaintiffs who lacked standing to the district 

court “so that it may determine the appropriate disposition.” Id. Thus, one could read 

Shaw to suggest that it may have been appropriate for the District Court in this case to 

remand Count I to state court. In Lee v. American National Insurance Co., the Ninth 

Circuit likewise applied Schacht and rejected the argument that the entire case should be 

remanded because some, but not all, of the plaintiff’s claims were standing-deficient, but 

held that those claims would “have to be disposed of in some manner on remand to the 

district court,” either by dismissal by the court or voluntary dismissal by the plaintiff. 

260 F.3d at 1006. The court observed that “there should be no obstacle to [plaintiff’s] 

refiling [the standing-deficient claims] in state court,” id., but held that it “need not 

decide” whether the district court should remand the standing-deficient claims to state 

court because plaintiff’s “consistent position on this appeal has been that his case must be 

remanded in its entirety,” id. at 1007, and plaintiff failed to present a “specific, cogent 
8

argument for our consideration on appeal.” Id. (quotation marks and citation omitted).

As Appellees also point out, Appellants failed to argue in their opening brief to us 

that the District Court erred in dismissing, rather than remanding, Count I, nor did they 

argue this point to that Court. For this reason, we may consider it waived. We have held 

that “an appellant’s failure to identify or argue an issue in his opening brief constitutes 

waiver of that issue on appeal,” absent extraordinary circumstances. United States v. 

Albertson, 645 F.3d 191, 195 (3d Cir. 2011) (quoting United States v. Pelullo, 399 F.3d 

197, 222 (3d Cir. 2005)). Here, Appellants have presented no extraordinary 

circumstances to justify their failure to raise this issue, arguing only that Appellees would 

not be prejudiced were the Court to consider the issue because Appellees were the ones 

who “introduced a Schacht-based argument” and then made an “intentional decision not 

to brief the partial remand issue.” (Reply Br. at 13-14.) As in Lee, however, until their 

reply brief, it was Appellants’ “consistent position on this appeal” that the case “must be 

remanded in its entirety,” 260 F.3d at 1007, and they fail to present a compelling 

argument in favor of partial remand. We consider the issue waived.

C. Rule 12(b)(6) Dismissal of Counts II and III

Appellants contend that the District Court erred in dismissing Counts II and III 

because it based its decision on grounds of “privilege” and “justification” that, under 

New Jersey law, are affirmative defenses for which Appellees had the burden of proof. 

Appellants contend that the Court violated the principles of Erie R. Co. v. Tompkins, 304 

U.S. 64, 78-80 (1938), by applying non-New Jersey caselaw to dismiss Counts II and III, 
9

and impermissibly applied a higher pleading standard, based on non-New Jersey law, in 

dismissing Count II.

Once again, the District Court never had the opportunity to consider this argument 

because Appellants failed to raise it before the Court. See Tri-M Grp., 638 F.3d at 416. 

As before, we consider the argument waived, as there are no extraordinary circumstances

justifying Appellants’ failure and so no reasoned consideration of it by the Court.3 

D. Leave to Amend

Finally, Appellants argue that the District Court erred in failing to grant them an 

opportunity to amend their complaint, despite the fact that they never requested leave to 

amend. We disagree. “[I]n ordinary civil litigation it is hardly error for a district court to 

enter final judgment after granting a Rule 12(b)(6) motion to dismiss when the plaintiff 

has not properly requested leave to amend its complaint.” Fletcher-Harlee Corp. v. Pote 

Concrete Contractors, Inc., 482 F.3d 247, 253 (3d Cir. 2007).

IV. Conclusion

We will affirm the order of the District Court.

 

3 Were we to consider the argument, however, we would conclude that the District Court 

ultimately did not err in dismissing Counts II and III on the stated grounds. We have held 

that “a complaint may be subject to dismissal under Rule 12(b)(6) when an affirmative 

defense . . . appears on its face.” ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 

1994); see Ball v. Famiglio, 726 F.3d 448, 461 (3d Cir. 2013). Thus, to the extent the 

Court dismissed the claims based on the existence of affirmative defenses, those defenses 

were apparent from the face of the complaint, and the Court was well within its rights to 

determine that no tortious interference with contract or civil conspiracy claim could lie, 

given the corporate affiliations of the various parties and the lack of adequate factual 

allegations.