Court Opinion

ID: 9384584
Source: CourtListenerOpinion
Date Created: 2023-04-04 14:00:27.790894+00
Date Added: 2024-06-11T17:17:54.508146
License: Public Domain

22-1795
   Farag v. XYZ Two Way Radio Serv., Inc.

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                    SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION
TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS
GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S
LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH
THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY
CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT
REPRESENTED BY COUNSEL.

         At a stated term of the United States Court of Appeals for the Second Circuit,
   held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
   City of New York, on the 4th day of April, two thousand twenty-three.
   PRESENT:
              DENNY CHIN,
              RICHARD J. SULLIVAN,
              MYRNA PÉREZ,
                    Circuit Judges.
   _____________________________________
   AHMED FARAG,
                          Plaintiff-Appellant,
                          v.                                                   No. 22-1795
   XYZ TWO WAY RADIO SERVICE, INC.,
   MOHAMED MOWAD, SANDY CHECK, JERRY
   CHING HOR, AHMED MOHARREM, CHI YUEN
   LO, SHENGWEI ZHANG, MOHAMED SALEM,
   DINDYAL RAMPERSAUD,
                    Defendants-Appellees.*
   __________________________________

   * The Clerk of Court is respectfully directed to amend the official case caption as set forth above.
For Plaintiff-Appellant:                                     Kevin K. Tung, Kevin Kerveng
                                                             Tung, P.C., Flushing, NY.

For Defendants-Appellees:                                    Deana Davidian, Lisa C.
                                                             Solbakken, Robert C. Angelillo,
                                                             Thomas G. O’Brien, Arkin
                                                             Solbakken LLP, New York, NY.

       Appeal from a judgment of the United States District Court for the Eastern

District of New York (Eric R. Komitee, Judge).

       UPON       DUE       CONSIDERATION,              IT     IS   HEREBY        ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is

AFFIRMED.

       Ahmed Farag appeals from the district court’s dismissal of his complaint

against XYZ Two Way Radio Service, Inc. (“XYZ”) – a cooperative association of

ground-transportation drivers – and several of its directors and shareholders

(collectively, “Defendants”), alleging violations of the Racketeer Influenced and

Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. (“RICO”), and various state-law

claims. 1    Primarily, the complaint asserts that Defendants engaged in “an

ongoing fraudulent scheme” by “wrongfully terminat[ing]” its employment

contracts with certain XYZ drivers, which in turn forced the dismissed drivers to

1Although the action in the district court included other plaintiffs, Farag is the only plaintiff
appealing from the district court’s judgment dismissing the complaint.
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sell their shares in the cooperative “at a diluted price.” J. App’x at 96, 99, 103.

The district court dismissed Farag’s RICO claim for failure to state a claim and his

state-law claims for abandonment – both with prejudice.           On appeal, Farag

contends that (1) he adequately pleaded his RICO claim, (2) he did not abandon

the state-law claims, and (3) in any event, his RICO and state-law claims should

not have been dismissed with prejudice. We assume the parties’ familiarity with

the underlying facts, procedural history, and issues on appeal.

      “We review de novo a district court’s dismissal of a complaint pursuant to

Rule 12(b)(6), . . . accepting all factual allegations in the complaint as true[] and

drawing all reasonable inferences in the plaintiff’s favor.” Dolan v. Connolly, 794

F.3d 290, 293 (2d Cir. 2015). “We review for abuse of discretion a district court’s

decision whether dismissal of a complaint should be with prejudice.”         Cruz v.

FXDirectDealer, LLC, 720 F.3d 115, 125 (2d Cir. 2013).

      The district court properly dismissed Farag’s RICO claim. To state a civil

RICO violation, a plaintiff must plausibly allege that he was injured by “a pattern

of racketeering activity” consisting of “at least two predicate [racketeering] acts.”

First Cap. Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 178 (2d Cir. 2004)

(alteration and internal quotation marks omitted) (citing 18 U.S.C. § 1961(5)). In

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his complaint, Farag asserts that Defendants’ predicate racketeering acts consisted

of “mail fraud in violation of 18 U.S.C. § 1341” and money laundering “in violation

of 18 U.S.C. § 1957.” J. App’x at 110. With respect to mail fraud, we have long

held that allegations of fraud “must be made with the particularity required by

Federal Rule of Civil Procedure 9(b).” McLaughlin v. Anderson, 962 F.2d 187, 191

(2d Cir. 1992). This heightened pleading standard requires a plaintiff to “state

the contents of the communications, who was involved, where and when they took

place, and explain why they were fraudulent.” Mills v. Polar Molecular Corp., 12

F.3d 1170, 1176 (2d Cir. 1993). Farag has not done so here. The complaint states

in a conclusory fashion that Defendants committed mail fraud by filing “erroneous

or false 10-5 violation[] [notices] against” Farag and other dismissed drivers.

J. App’x at 98–99.     Completely absent from the complaint, however, are

allegations as to what “the contents” of the notices were, “where and when” the

notices were filed, and “why” the notices “were fraudulent.” Mills, 12 F.3d at 1176

(emphasis added). Although Farag alleges elsewhere in the complaint that he

was “wrongfully terminated” along with other XYZ drivers and was subsequently

compelled by Defendants to sell his XYZ shares at a “diluted and depressed

value,” J. App’x at 99, 102, nowhere in the complaint does he explain how he was

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deceived or defrauded by Defendants’ alleged conduct. Because the complaint

has failed to “identify [any] fraudulent communications” or “provide [any]

detailed description of any underlying scheme,” we agree with the district court

that Farag has not plausibly stated any instance of mail fraud underlying his RICO

claim. Sp. App’x at 13.

      Farag’s allegation of money laundering fares no better.         The complaint

asserts that Defendants violated the federal money-laundering statute by

conducting “monetary transactions in fraud to criminally deprive” the dismissed

drivers of their equity interests in XYZ.     J. App’x at 110.   But other than this

“legal conclusion[] masquerading” as a factual allegation, the complaint is “devoid

of any specific facts or circumstances supporting [Farag’s] assertion” of money

laundering. De Jesus v. Sears, Roebuck & Co., 87 F.3d 65, 70 (2d Cir. 1996) (citations

omitted). In light of the complaint’s barebones and conclusory allegations of mail

fraud and money laundering, we affirm the district court’s dismissal of Farag’s

RICO claim.

      The district court also properly dismissed Farag’s state-law claims. In a

“counseled” case, “a court may, when appropriate, infer from a party’s partial

opposition that relevant claims or defenses that are not defended have been

                                          5
abandoned.” Jackson v. Fed. Express, 766 F.3d 189, 198 (2d Cir. 2014). In keeping

with this principle, we have routinely affirmed the district court’s dismissal of a

plaintiff’s claims when the plaintiff “did not discuss them in his opposition to [the

defendant]’s motion to dismiss.” Gross v. Rell, 585 F.3d 72, 94 (2d Cir. 2009); see

also, e.g., Elliot-Leach v. N.Y.C. Dep’t of Educ., 710 F. App’x 449, 450 n.1 (2d Cir. 2017).

Here, Farag’s opposition to Defendants’ motion to dismiss only addressed the

standing and scope-of-authority issues as to some of his state-law claims.                   In

response to Defendants’ argument that the complaint failed to plausibly state the

elements of each of the state-law claims, Farag offered merely the conclusory

assertion that the complaint had “stated a claim for each and every cause of

action.”   J. App’x at 485.         Further, Farag “explicitly abandoned” his state-law

claims, Conboy v. AT & T Corp., 241 F.3d 242, 250 (2d Cir. 2001), stating that he was

“not seeking damages for any claims beyond the RICO cause of action,” J. App’x

at 485 (emphasis added).        2      Given this concession and Farag’s failure to

meaningfully discuss his state-law claims in his opposition to Defendants’ motion,

2 Farag further explained that “the state[-]law claims were filed in conjunction with the [RICO]
claim[] for the purpose of establishing a pattern of wrongful conduct,” suggesting his apparent
belief that the state-law claims might serve as valid racketeering predicates. J. App’x at 486.
Farag was mistaken, since none of the state-law claims alleged in the complaint are listed as a
predicate “racketeering activity” under RICO. 18 U.S.C. § 1961(1).
                                               6
we cannot say that the district court erred in dismissing Farag’s state-law claims

for abandonment.

      Finally, the district court did not abuse its discretion by dismissing the RICO

and state-law claims with prejudice. Although courts are generally “free[]” to

“give leave” to amend pleadings “when justice so requires,” Fed. R. Civ.

P. 15(a)(2), we have found no abuse of discretion where – as here – a district court

denied a request for leave to amend made conclusorily in an opposition brief

“without specifying what additional factual allegations it would include if leave

were granted.” WC Cap. Mgmt., LLC v. UBS Sec., LLC, 711 F.3d 322, 334 (2d Cir.

2013). In this case, Farag never made a formal motion to amend, and when the

district court offered Farag the opportunity to amend his complaint during the

pre-motion conference and at oral argument for the motion to dismiss, Farag

repeatedly declined, see, e.g., J. App’x at 31–32, 38–41, 596–97. Farag offers no

explanation as to how “an amended complaint would cure the deficiencies”

identified by the district court, WC Cap. Mgmt., 711 F.3d at 334, nor did he ever

“advise[] the [d]istrict [c]ourt of any proposed revisions” to the operative

complaint, Cruz, 720 F.3d at 126. Under these circumstances, we conclude that

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the district court did not abuse its discretion by dismissing Farag’s RICO and

state-law claims with prejudice.

      We have considered Farag’s remaining arguments and find them to be

without merit. Accordingly, we AFFIRM the judgment of the district court.

                                    FOR THE COURT:
                                    Catherine O’Hagan Wolfe, Clerk of Court

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