Prou v. Giarla

• Citation: 62 F.Supp.3d 1365
• Decision Date: 25 November 2014
• Docket Number: Case No. 13–24266–CIV.
• Court: United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
• Parties: Xavier PROU, Plaintiff, v. Justin GIARLA, et al., Defendants.

62 F.Supp.3d 1365

Xavier PROU, Plaintiff

v.Justin GIARLA, et al., Defendants.

Case No. 13–24266–CIV.

United States District Court, S.D. Florida, Miami Division.

Signed Nov. 25, 2014.

Entered Nov. 26, 2014.

Daniel B. Reinfeld, Daniel B. Reinfeld, PA, Hollywood, FL, for Plaintiff.

Justin Giarla, San Francisco, CA, pro se.

ORDER

DONALD L. GRAHAM, District Judge.

THIS CAUSE comes before the Court upon Defendant, Justin Giarla's, Motion to Dismiss Under Rule 12(b) for Lack of Jurisdiction, Improper Venue or Failure to State a Claim [D.E. 40] and incorporated Motion to Transfer [D.E. 42].

THE COURT has considered the Motions, the Response and Reply thereto, pertinent portions of the record, and is otherwise fully advised in the premises. For the reasons stated herein, Justin Giarla's Motion to Dismiss is GRANTED IN PART and DENIED IN PART and his incorporated Motion to Transfer is DENIED.

I. FACTUAL & PROCEDURAL BACKGROUND

Xavier Prou (“Plaintiff”) brings suit against Justin Giarla (“Defendant Giarla”), White Walls Gallery, 941 Geary Gallery, and Shooting Gallery (collectively referred to as “Defendants”) alleging, inter alia, conversion, civil theft, and racketeering. [D.E. 24]. Plaintiff seeks injunctive relief as well as monetary-damages in the amount of “$819,000.00 plus attorney's fees and costs incurred.” Id. at 9, ¶ 44. Plaintiff also seeks to replevy certain artworks allegedly in Defendants possession worth approximately $170,000.00. Id. at 10–11.

Plaintiff is a contemporary artist specializing in stencil graffiti art and is professionally known as “Blek Le Rat”. Id. at 4, ¶ 15. Although he is a French citizen, Plaintiff is domiciled in Miami Beach, Florida. Id. at 2, ¶ 1. Defendant Giarla “is an individual art dealer and sole proprietor doing business as Whitewalls Gallery, 941 Geary Gallery, and The Shooting Gallery.” [D.E. 40 at 8]. Defendant Giarla “sought artists such as Plaintiff to share in the profitable enterprise of contemporary art sales and to reap the rewards of successful sales to contemporary art investors.” [D.E. 24 at 5, ¶ 16].

Plaintiff entered into a consignment agreement with Defendant Giarla based upon a sale and showing of Plaintiff's work at Scope 2011 Art Basel in Miami, Florida. Id. at ¶ 19. On or about February 14th, 2012, Plaintiff received notice that eleven of his artworks had been sold on payment plans. Id. at ¶ 20. For these eleven works, Defendant Giarla was to pay Plaintiff $187,000.00. Id. at ¶ 21. Of this $187,000.00, Plaintiff allegedly only received $83,000.00. Id. Plaintiff contends that “the reported sales ... were manufactured or fabricated so as to generate the consignment of new and additional pieces from Plaintiff.”Id. at ¶ 22. As a result, on or about November 20th, 2012, Plaintiff “terminated his consignment agreement with Defendant [Giarla] and requested the return of all artworks and remittance of all money due.” Id. at 6, ¶ 23. After a year of his request not being honored, Plaintiff brought suit against Defendants for the aforementioned offenses. [D.E. 1].

In response to Plaintiff's allegations, Defendant Giarla contends that he only agreed to sell Plaintiff's art in his galleries located in San Francisco, California, from November 19th, 2011 until January 7th, 2012. [D.E. 41 at 2, ¶ 11]. Additionally, Defendant Giarla maintains that after the display, he informed Plaintiff via email that he was in possession of Plaintiff's art and desired to return them. Id. at 3, ¶ 18. Defendant Giarla now moves to dismiss Plaintiff's Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b) for Lack of Jurisdiction, Improper Venue, or Failure to State a Claim. [D.E. 40]. Alternatively, Defendant Giarla moves to transfer this action to the Northern District of California pursuant to 28 U.S.C. § 1404(a). [D.E. 42].

II. LAW & DISCUSSION

A. Personal Jurisdiction & 12(b)(2)

Defendant Giarla first moves to dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2), asserting that the Court lacks personal jurisdiction over him. In turn, Plaintiff argues that personal jurisdiction exists over Defendant Giarla and submits a number of exhibits in support of his position. See [D.E. 44]. However, both Plaintiff and Defendant Giarla confine their jurisdictional arguments “to the traditional analysis applied to a state's long-arm statute and the Fourteenth Amendment's requirement of ‘minimum contacts' ” and disregard the influence that Plaintiff's Federal RICO claims have on personal jurisdiction. Koch v. Royal Wine Merchants, Ltd., 847 F.Supp.2d 1370, 1374 (S.D.Fla.2012).

In the Amended Complaint, Plaintiff predicates the Court's subject-matter jurisdiction on the federal question presented by his Federal RICO claims (Counts V–VIII) brought under 18 U.S.C. § 1961, et seq., particularly, §§ 1962(a) -(d). The Eleventh Circuit previously acknowledged that “[s]ection 1965(d) of the RICO statute provides for service in any judicial district in which the defendant is found. When a federal statute provides for nationwide service of process, it becomes the statutory basis for personal jurisdiction.” Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 942 (11th Cir.1997). Therefore, “if personal jurisdiction can be established under RICO, the doctrine of pendent personal jurisdiction would come into play, making it unnecessary to consider Florida's long-arm statute.” Koch, 847 F.Supp.2d at 1374 ; see also IUE AFL–CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1056 (2d Cir.1993), cert. denied, 513 U.S. 822, 115 S.Ct. 86, 130 L.Ed.2d 38 (1994) (“[U]nder the doctrine of pendent personal jurisdiction, where a federal statute authorizes nationwide service of process and the federal and state claims ‘derive from a common nucleus of operative fact’ ... the district court may assert personal jurisdiction over the parties to the related state law claims even if personal jurisdiction is not otherwise available.” (internal citation omitted)).

In evaluating personal jurisdiction under a federal statute's nationwide service of process provision, the Court “must ... examine a defendant's aggregate contacts with the nation as a whole rather than his contacts with the forum state.”Republic of Panama, 119 F.3d at 947. The rationale underlying this approach “is that the Fifth Amendment's Due Process Clause [and not the Fourteenth Amendment's] requires consideration of ‘fairness' and ‘reasonableness' when resolving a question of personal jurisdiction.” Koch, 847 F.Supp.2d at 1375. This consideration is applicable “only if a defendant has established that his liberty interests actually have been infringed.” Id. (citing Republic of Panama, 119 F.3d at 946 ). Hence, Defendant Giarla “bears the burden of demonstrating that assertion of jurisdiction in this forum will make litigation ‘so gravely difficult and inconvenient’ that he will be at a ‘severe disadvantage’ in comparison [to Plaintiff].” Id. (quoting Republic of Panama, 119 F.3d at 948 ).

As stated above, Defendant Giarla's arguments against personal jurisdiction are limited to an analysis regarding Florida's long-arm statute and the Fourteenth Amendment's requirement of “minimum contacts.” [D.E. 24 at 10–15]. Although Defendant Giarla argues that “[t]he alleged art was shipped from France to [ ] California, the agreement between the parties was consummated in California, the sales were in California mostly to California purchasers and the alleged proceeds from the sales were received in California,” he fails to demonstrate how this Court's exercise of personal jurisdiction would be so gravely difficult and inconvenient as to place him at a severe disadvantage compared to Plaintiff. Indeed, the record shows that Defendant Giarla and his galleries previously participated in art shows in Florida, namely Art Basel/SCOPE Art Fair 2011, 2012, and 2013. [D.E. 44–4–44–10]. Therefore, the Court finds that Defendant Giarla does not carry his burden of presenting a “compelling case that would render personal jurisdiction unreasonable.” Koch, 847 F.Supp.2d at 1375. However, the Court's analysis does not end with this conclusion.

B. Failure to State a Claim & 12(b)(6)

Having found a statutory basis for personal jurisdiction, the Court must next determine if Plaintiff adequately states a Federal RICO claim. “For the purposes of a motion to dismiss, the Court must view the allegations of the complaint in the light most favorable to Plaintiff, consider allegations of the complaint as true, and accept all reasonable inferences.” Omar ex. rel. Cannon v. Lindsey, 334 F.3d 1246, 1247 (11th Cir.2003) (citations omitted). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quotations and citations omitted). For a claim to have facial plausibility, a plaintiff must plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The plausibility standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. Therefore, “[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do.” Id.

As mentioned above, Plaintiff asserts Federal RICO violations by Defendant Giarla and his galleries pursuant to 18 U.S.C. §§ 1962(a) -(d). Defendant Giarla counters Plaintiff's assertion and argues that Plaintiff fails to state a federal RICO claim against him insofar as the Amended Complaint does not allege “predicate acts with sufficien[t] specificity to establish a pattern of racketeering or ... that the [ ] predicate acts caused any injury.” [D.E. 48 at 6].

Accordingly, the Federal RICO Act makes it illegal “for any person employed by or associated with any enterprise engaged in, or the activities of which affect,...