Sec. & Exch. Comm'n v. Lidingo Holdings, LLC
Decision Date | 11 May 2018 |
Docket Number | Case No. C17-1600 RSM |
Parties | SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. LIDINGO HOLDINGS, LLC, et al., Defendants. |
Court | U.S. District Court — Western District of Washington |
This matter comes before the Court on Defendants Lidingo Holdings, LLC's, Kamilla Bjorlin's and Andrew Hodge's (collectively "Lidingo Defendants") Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), in which Defendant Brian Nichols has also joined. Dkts. #66 and #68. Defendants seek dismissal of all claims against them on the basis that they are time-barred. Id. Alternatively, Defendants argue that certain of Plaintiff's claims should be dismissed for the failure to adequately plead facts supporting the elements of those claims. Dkts. #66 at 11-18 and #68 at 3-12. Plaintiff opposes the motion, asserting that its claims are not time-barred, and that, even if some claims are barred against Defendant Lidingo, it has adequately pled its claims against the individual Defendants. Dkt. #69. Having reviewed the record before it, and neither party having requested oral argument on the motions, the Court now GRANTS IN PART AND DENIES IN PART Defendants' motions for the reasons discussed herein.
Plaintiff initially filed its Complaint in this matter in the United States District Court for the Southern District of New York. Dkt. #1. The matter was subsequently transferred to this Court on October 27, 2017. Dkt. #53. According to the parties:
Dkt. #61 at 1-2. Defendant Cassano has since been dismissed from this action. Dkt. #72. The instant motions to dismiss are ripe for review.
On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, the Court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id. at 678. This requirement is met when the plaintiff "pleads factual content that allows the court to draw thereasonable inference that the defendant is liable for the misconduct alleged." Id. Absent facial plausibility, Plaintiff's claims must be dismissed. Twombly, 550 U.S. at 570.
Though the Court limits its Rule 12(b)(6) review to allegations of material fact set forth in the Complaint, the Court may consider documents of which it has taken judicial notice. See F.R.E. 201; Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). The Lidingo Defendants have asked the Court to take judicial notice of business entity documents and a Form 10-K of Galena Biopharma, Inc. for the period ending December 31, 2013. Dkts. #66 at 20-22 and #67, Exs. A and B. The Court finds it unnecessary to consider those documents to resolve this matter, and declines Defendants' request on that basis. However, the Court does take judicial notice that Lidingo Holdings, LLC, with registered agent Kamilla Bjorlin, was formerly registered to do business in the State of Washington, but is now terminated. This information is contained in the public records maintained by the Secretary of State of the State of Washington, and can be retrieved on the public website for the Secretary of State of the State of Washington Corporations division. https://www.sos.wa.gov/corps/ (last visited May 9, 2018).
Defendants first move to dismiss all of Plaintiff's claims on the basis that they are time-barred pursuant to Nevada law. Dkts. #66 at 8-11 and #68 at 2-3. Defendants rely on Nevada Revised Statutes ("NRS") § 86.505(1) pertaining to dissolved corporations. Id. Plaintiff, relying on U.S. v. Summerlin, 310 U.S. 414, 417, 60 S. Ct. 1019, 1020, 84 L. Ed.1283 (1940), asserts that when it brings claims in its governmental capacity, it cannot become subject to any state statute of limitations. Dkt. #69 at 14. While acknowledging the general rule, this Court disagrees that it is applicable in this case.
In Williams v. United States, 674 F. Supp. 334 (1987), the United States District Court for the Northern District of Florida examined a Florida statute with nearly identical language to that of the Nevada statute, to determine whether the statute constituted a statute of limitations. The Court started by recognizing the general principle that Plaintiff asserts in this case - as a general rule, the United States is not bound by state statutes of limitation. Williams, 674 F. Supp. at 336. The court went on to determine, however, that the statute was a "prolongation" statute rather than a statute of limitations:
Williams, 674 F. Supp. at 336-37.
Neither the Ninth Circuit Court of Appeals nor...
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