Dtex, LLC v. Bbva Bancomer, S.A., No. 7:04-2273-13.

• Court: United States District Courts. 4th Circuit. United States District Court of South Carolina
• Writing for the Court: George Ross Anderson, Jr.
• Citation: 405 F.Supp.2d 639
• Parties: DTEX, LLC, Plaintiff, v. BBVA BANCOMER, S.A., Defendant.
• Docket Number: No. 7:04-2273-13.
• Decision Date: 20 December 2005

405 F.Supp.2d 639 DTEX, LLC, Plaintiff,
v.
BBVA BANCOMER, S.A., Defendant. No. 7:04-2273-13. United States District Court, D. South Carolina, Spartanburg Division. December 20, 2005.

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Beattie B. Ashmore, Price Paschal and Ashmore, Greenville, SC, Kevin A. Dunlap, Parker Poe Adams and Bernstein, Spartanburg, SC, Isham Faison Hicks, Parker Poe Adams and Bernstein, Charlotte, NC, for Plaintiff.

Frank Langston Eppes, Eppes and Plumblee, Greenville, SC, for Defendant.

ORDER (Written Opinion)

GEORGE ROSS ANDERSON, JR., District Judge.

This matter is before the Court on Defendant's Motion to Dismiss. Plaintiff,

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Dtex, Inc., a South Carolina corporation, brings this action against Defendant, BBVA Bancomer, S.A. ("Bancomer"), a financial institution headquartered in Mexico, seeking damages under South Carolina common law and treble damages under the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. For the reasons set forth below, the Court grants Defendant's motion to dismiss Plaintiff's claims under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under Federal Rule of Civil Procedure 12(b)(6) for failure to plead a valid RICO claim.

I. BACKGROUND

On July 13, 2004, Plaintiff filed its complaint against Defendant, asserting tortious interference with contract, intentional interference with prospective contractual relations, unfair and deceptive trade practices, and conversion. Defendant filed a timely motion to dismiss the complaint on October 5, 2004 pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, the doctrine of res judicata, the doctrine of prior pending action, and the doctrine of forum non conveniens. Plaintiff then moved on November 1, 2004 to amend the complaint, and Defendant filed the instant motion to dismiss the amended complaint on December 30, 2004. The amended complaint adds factual allegations to Plaintiff's contention that this Court has in personam jurisdiction over Defendant (specifically making alter ego allegations), and it also asserts a RICO claim, thereby seeking to come under 18 U.S.C. § 1965, RICO's nationwide service of process provision.

Plaintiff's claims arise from a dispute over certain factory equipment located in Chihuahua, Mexico and formerly owned by a Mexican corporation, Denimtex, S.A. de C.V. (the "Equipment"). Defendant avers that it loaned approximately $30 million to Denimtex in Mexico and that it holds a first priority lien over the Equipment. Plaintiff alleges that it obtained rights to the Equipment following Denimtex's default on the loans by entering a successful bid for the Equipment in an auction conducted in, Mexico by the Mexican Labor Court on July 5, 2002. The parties have been litigating their dispute in Mexico, first in the Mexican Labor Court and later in the Federal District Court, Federal Circuit Court (Labor Division), and Bankruptcy Court.

Plaintiff seeks to establish personal jurisdiction in this Court by alleging that Defendant is doing business in South Carolina both directly and through its independent subsidiary, Bancomer Transfer Services, Inc. ("BTS"), which is headquartered in Texas. The Court granted Plaintiff nearly a full year of exhaustive jurisdictional discovery to test its theories of personal jurisdiction, which depend upon certain international wire transfers, money transfers, U.S. banking registrations, and U.S. trademarks related to Defendant. Without conceding personal jurisdiction, Defendant allowed Plaintiff to depose representatives of its Mexico City office and Houston agency (which is similar to a bank branch but does not accept deposits). Although BTS is not a party to this action and has not submitted to personal jurisdiction in this Court, it also voluntarily produced a representative for a deposition in Texas. Plaintiff also served dozens of interrogatories and received over 2,500 documents in response to its document requests. In short, the record reflects that Plaintiff had a full and fair opportunity to test its theories of personal jurisdiction through discovery.

The gravamen of Plaintiff's complaint is that Defendant engaged in a course of

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criminal and corrupt practices to prevent Plaintiff from obtaining possession of the Equipment, which it purchased and paid for in Mexico. Plaintiff claims that Defendant's ultimate purpose is to extort money from Plaintiff in exchange for allowing Plaintiff to conduct its business in Mexico. [Am. Cplt. ¶ 22]. Plaintiff's allegations are wide-ranging, but the Court will summarize them here based on its own review of the amended complaint.

According to the amended complaint, Defendant has made numerous false and fraudulent misrepresentations to the Mexican Labor Board and to various Mexican courts during the pendency of the Mexican proceedings. [Am. Cplt. ¶¶ 43, 56, 60, 61, 62, 63, 75, 85, 88, 90, 93, 107]. The amended complaint further alleges that Defendant and its agents illegally denied Plaintiff access to the Equipment [Am. Cplt. ¶¶ 71-72], although Plaintiff was later able to take possession of the Equipment. [Am. Cplt. ¶ 80]. Plaintiff also claims that Defendant hired "thugs" to attempt to force entry into the facility where the Equipment is stored and has posted people outside the Equipment site to prevent Plaintiff from moving the Equipment. [Am. Cplt. ¶¶ 100, 105]. Finally, Plaintiff claims that Defendant has filed fraudulent criminal charges against its representatives that have caused those representatives to fear traveling to Mexico and has sought arrest warrants against Plaintiff's Mexican attorney. [Am. Cplt. ¶¶ 112, 119].

At oral argument on Defendant's motion to dismiss, the Court instructed Plaintiff to submit a RICO case statement, as required by Order of the Chief Judge of this District, explaining how the allegations in its amended complaint satisfied the statutory pleading requirements for RICO claims. Plaintiff used the case statement as an opportunity to supplement its amended complaint with additional factual allegations and legal theories. Thus, through Plaintiff's complaint, amended complaint, and RICO case statement, Plaintiff has had three opportunities to clarify and refine its claims against Defendant.

II. DISCUSSION

Defendant moves for dismissal under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, Rule 12(b)(6) solely for failure to state a claim under RICO, and the doctrines of res judicata, prior pending action, and forum non conveniens.¹

"When a court's personal jurisdiction is properly challenged by motion under Federal Rule of Civil Procedure 12(b)(2), the jurisdictional question thereby raised is one for the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction by a preponderance of the evidence." Mylan Laboratories, Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir.1993). Under Rule 12(b)(6), "a motion to dismiss for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts which would support its claim and would entitle it to relief. In considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff." Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993).

A. Specific and General Personal Jurisdiction

Defendant contends that Plaintiff has not satisfied its burden to establish that

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Defendant, a Mexican corporation, is subject to personal jurisdiction in this Court. See McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936) (plaintiff, bears burden of proof for personal jurisdiction). Personal jurisdiction exists where a defendant has "minimum contacts" with the forum "such that ... maintenance of the suit does not offend traditional notions of fair play and substantial justice." Lesnick v. Hollingsworth & Vose Co., 35 F.3d 939, 942 (4th Cir.1994) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). To meet this burden, Plaintiff must demonstrate that Defendant is subject to either specific or general jurisdiction in South Carolina.

Specific jurisdiction exists where a "defendant's contacts with the forum state provide the basis for the suit." Mitrano v. Hawes, 377 F.3d 402, 407 (4th Cir.2004). Plaintiff effectively concedes that specific jurisdiction does not lie here because the amended complaint contains no suggestion that Defendant's alleged business contacts in the United States bear any connection to the parties' dispute, which involves allegations of conduct that occurred solely in Mexico.

To establish general jurisdiction, Plaintiff must show that Defendant has purposefully established "`continuous and systematic'" contacts in the forum state. Base Metal Trading, Ltd. v. OJSC "Novokuznetsky Aluminum Factory", 283 F.3d 208, 213 (4th Cir.2002) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)); see also Lesnick, 35 F.3d at 943 (defendant must "purposefully avail[] itself of the privilege of conducting activities within the forum state") (internal quotation marks and citation omitted). Due process precludes a finding of general jurisdiction absent a showing that Defendant is "domiciled in, organized under the laws of, doing business, or maintaining ... its principal place of business in this State" or otherwise has an "enduring relationship" with South Carolina. Brown v. Geha-Werke GmbH, 69 F.Supp.2d 770, 779 (D.S.C.1999) (internal quotation marks and citation omitted).

Plaintiff has not sustained its burden of demonstrating that Defendant maintains the continuous and systematic presence necessary to satisfy the due process requirements for general jurisdiction in this...