Unigestion Holding v. Upm Tech., Inc., Case No. 3:15-cv-185-SI

Decision Date26 July 2016
Docket NumberCase No. 3:15-cv-185-SI
PartiesUNIGESTION HOLDING, S.A., a foreign corporation, d/b/a DIGICEL HAITI, Plaintiff, v. UPM TECHNOLOGY, INC. d/b/a UPM TELECOM, INC, and UPM MARKETING, INC., an Oregon corporation; UPM TELECOM, INC., an Oregon a/b/n; UPM MARKETING, INC., an Oregon a/b/n; BENJAMIN SANCHEZ a/k/a BENJAMIN SANCHEZ MURILLO, an Oregon resident; BALTAZAR RUIZ, an Oregon resident, and TYLER ALLEN, an Oregon resident, Defendants.
CourtU.S. District Court — District of Oregon

Richard K. Hansen and Anne M. Talcott, SCHWABE, WILLIAMSON & WYATT, 1211 SW Fifth Ave, Suite 1600, Portland, OR 97204; Robert C.L. Vaughan, Cherine Smith Valbrun, and Leah B. Storie, KIM VAUGHAN LERNER LLP, One Financial Plaza, Suite 2001, Fort Lauderdale, FL 33394. Of Attorneys for Plaintiff.

Kathryn P. Salyer and Eleanor A. DuBay, TOMASI SALYER BAROWAY, 121 SW Morrison Street, Suite 1850, Portland, OR 97204; Christopher W. Savage, DAVIS WRIGHT TREMAINE, LLP, 1919 Pennsylvania Ave. NW, Suite 800, Washington, D.C. 20006. Of Attorneys for Defendants.

Michael H. Simon, District Judge.

Plaintiff Unigestion Holding, S.A., doing business as "Digicel Haiti," ("Digicel Haiti" or "Plaintiff")1 provides mobile telecommunication services to Haiti for profit. Defendants also provide mobile telecommunication services to Haiti for profit. Digicel Haiti alleges that Defendants provide these services by using certain technologies that fraudulently access Digicel Haiti's telecommunications network. Based on this characterization of Defendants' business activities, Digicel Haiti asserts claims against Defendants, alleging common law fraud, violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") under 18 U.S.C. §§ 1962(b)-(d), common law conversion, and common law unjust enrichment.

On February 3, 2016, the Court denied Defendants' motion to dismiss, ruling that, among other things, Digicel Haiti's allegations of technological fraud through active concealment satisfy, at this stage of the litigation, the pleading elements of common law fraud in Oregon. After the Court's ruling, Defendants filed their answer, asserting affirmative defenses and counterclaims. Defendants' counterclaims include allegations that Digicel Haiti violates 47 U.S.C. § 214 by operating in the United States as an international common carrier without formal authorization.

Digicel Haiti now moves to dismiss Defendants' counterclaims. Digicel Haiti also asks the Court to take judicial notice of a public record that was filed with the Federal Communications Commission ("FCC"). According to Digicel Haiti, this document is relevant to whether Digicel Haiti confines its operations to Haiti. Digicel Haiti cites this document insupport of its assertion that it does not operate in the United States and, therefore, does not violate 47 U.S.C. § 214 and other relevant statutory provisions. In response to the assertion that Digicel Haiti does not operate outside of Haiti, Defendants filed their own motion to dismiss. Defendants argue that Digicel Haiti cannot show harm if it does not carry international calls to Haiti. Defendants, therefore, move to dismiss the amended complaint based on lack of subject matter jurisdiction or, in the alternative, for reconsideration of the Court's earlier denial (ECF 58) of Defendants' motion to dismiss. For the following reasons, Digicel Haiti's motion for judicial notice is granted in part and denied in part; Digicel Haiti's motion to dismiss Defendants' counterclaims is denied; and Defendants' motion to dismiss or, in the alternative, to reconsider also is denied.


Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint "may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2(9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

A complaint must contain sufficient factual allegations to "plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Starr, 652 F.3d at 1216. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). "Establishing the plausibility of a complaint's allegations is a two-step process." Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990, 995 (9th Cir. 2014). At the first step, "a court should 'identif[y] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.'" Id. at 996 (quoting Iqbal, 556 U.S. at 679) (alteration in original). At the second step, "a court should 'assume the[ ] veracity' of 'well pleaded factual allegations' and 'determine whether they plausibly give rise to an entitlement to relief.'" Id. (quoting Iqbal, 556 U.S. at 679) (alteration in original).

Additionally, "[w]hen faced with two possible explanations, only one of which can be true and only one of which results in liability, plaintiffs cannot offer allegations that are 'merely consistent with' their favored explanation but are also consistent with the alternative explanation." In re Century Aluminum Co. Sec. Litig., 729 F.3d 1104, 1108 (9th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). Plaintiffs must offer "[s]omething more . . . such as facts tending to exclude the possibility that the alternative explanation is true, . . . in order to render plaintiffs' allegations plausible within the meaning of Iqbal and Twombly." Id. A complaint will survive a motion to dismiss where a plaintiff "offer[s] facts that tend[] to exclude the defendant'sinnocuous alternative explanation." Eclectic Props., 751 F.3d at 997. Moreover, if two alternative explanations exist, "one advanced by defendant and the other advanced by plaintiff, both of which are plausible, plaintiff's complaint survives a motion to dismiss under Rule 12(b)(6). Plaintiff's complaint may be dismissed only when defendant's plausible alternative explanation is so convincing that plaintiff's explanation is implausible." Id. at 996 (quoting Starr, 652 F.3d at 1216).

A motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) "may be facial or factual." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). According to the Ninth Circuit, "In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Id. In the case of a facial attack on the allegations in a complaint, "[f]or purposes of ruling on a motion to dismiss for want of standing, both the trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party." Warth v. Seldin, 422 U.S. 490, 501 (1975); see Savage v. Glendale Union High Sch., Dist. No. 205, Maricopa Cty., 343 F.3d 1036, 1039 n.1 (9th Cir. 2003).

These standards apply equally to a defendant's counterclaims when a plaintiff brings a motion to dismiss a counterclaim. See Willson v. Bank of Am., N.A., 2004 WL 1811148, at *2 (N.D. Cal. Aug. 12, 2004) (stating that on a motion to dismiss, allegations of the counterclaim were required to be taken as true); Safeco Ins. Co. of Am. v. Mirczak, 662 F. Supp. 1155, 1160 (D. Nev. 1987) (same).


For purposes of Digicel Haiti's motion to dismiss counterclaims, the Court accepts as true the following facts alleged in those counterclaims. Certain allegations from Plaintiff's amended complaint also are included as background, but in deciding Digicel Haiti's motion to dismiss, the Court gives no presumption of truth to Plaintiff's allegations in the amended complaint. The Court separately addresses the effect of Digicel Haiti's motion for judicial notice and Defendants' motion to dismiss or reconsider.

A. Digicel Haiti's Operations

Digicel Haiti is the largest local telephone company in Haiti, with a market share in excess of 75 percent. When someone from outside of Haiti calls one of Digicel Haiti's customers in Haiti, the call must pass through Digicel Haiti's switching system in Haiti. The switching system allows Digicel Haiti to manage call routing, account for any billing and associated regulatory charges, and maintain monopoly control over access to its customers in Haiti. Digicel Haiti also uses telephone switches in Miami and New York for the purpose of routing calls that originate on third-party...

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