BHARI INFORMATION TECHNOLOGY SYSTEM PRIVATE LIMITED, Plaintiff,
KOMAL SRIRAM, Defendant.
PAUL W. GRIMM, District Judge.
This Memorandum Opinion disposes of Defendant Komal Sriram's Motion to Dismiss the Amended Complaint, ECF No. 11, and accompanying Memorandum of Points and Authorities, ECF No. 11-4; Plaintiff Bhari Information Technology System Private Ltd.'s Response, ECF No. 13; and Defendant's Reply, ECF No. 14. A hearing is not necessary. See Loc. R. 105.6. For the reasons stated herein, Defendant's Motion to Dismiss shall be GRANTED.
For purposes of considering Defendant's Motion, this Court accepts the facts that
Plaintiff alleged in its Complaint as true. See Aziz v. Alcoac, 658 F.3d 388, 390 (4th Cir. 2011). In 1991, Defendant incorporated Ram Pension Consultants, Inc. ("RPC") in the State of Maryland. See Am. Compl. ¶¶ 2, 9, ECF No. 10. "RPC is a business process outsourcing (BPO') company that administers and manages 401-K and other pension plans." Pl.'s Opp'n 2 (citing Sriram Aff. ¶ 8, ECF No. 11-2). Defendant is a United States Citizen residing in India and was the sole owner and shareholder of RPC. Am. Compl. ¶¶ 4, 9. At the time of incorporation, Defendant "lived full-time in Maryland." Pl.'s Opp'n 2. In 2005, Defendant sold RPC to Plaintiff Bhari Information Technology System Private Ltd. ("BITECH"), a Dubai corporation, for more than $375, 000. Am. Compl. ¶¶ 2-3.
From the time of the sale through 2013, Defendant acted as a consultant to RPC, under direction of its new owner, BITECH. Id. ¶¶ 14-15. Although Plaintiff remitted the payment for the sale, the shares were never transferred. Id. ¶¶ 12-13. Instead, according to Plaintiff, Defendant used telephone and email communications to divert contracts and business opportunities to other corporations, such as Info-Drive Ltd., a non-party to this case. See id. ¶ 16. Info-Drive Ltd. is an Indian corporation with a wholly-owned United States subsidiary. Pl.'s Opp'n 3.
Plaintiff filed this action on May 21, 2013, alleging fraudulent concealment and tortious interference arising out of Defendant diverting customers away from RPC, the company he sold to BITECH. See Compl., ECF No. 1. Defendant filed a Motion to Dismiss for Lack of Subject Matter and Personal Jurisdiction, ECF No. 8. On July 22, 2013, in lieu of responding to Defendant's Motion, Plaintiff filed its First Amended Complaint pursuant to Fed.R.Civ.P. 15(a)(1)(B), adding a RICO claim in addition to the fraudulent concealment and tortious interference claims. See Am. Compl. I denied Defendant's Motion to Dismiss as moot because Plaintiff had filed an Amended Complaint. Paperless Order, ECF No. 12. Then, Defendant filed the pending motion, which has been briefed fully.
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) provides for "the dismissal of a complaint if it fails to state a claim upon which relief can be granted." Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This Rule's purpose "is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.'" Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears in mind the requirements of Rule 8, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, " Fed.R.Civ.P. 8(a)(2), and must state "a plausible claim for relief, " as "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice, " Iqbal, 556 U.S. at 678-79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly ). "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 663. When ruling on such a motion, the court must "accept the well-pled allegations of the complaint as true, " and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997).
That said, "factual allegations must be enough to raise a right to relief above a speculative level.'" Proctor v. Metro. Money Store Corp., 645 F.Supp.2d 464, 472-73 (D. Md. 2009) (quoting Twombly, 550 U.S. at 545). Particularly, the Court is not required to accept as true "a legal conclusion couched as a factual allegation, " Papasan v. Allain, 478 U.S. 265, 286 (1986), or "allegations that are merely conclusory, unwarranted deductions of fact or unreasonable inferences, " Veney v. Wyche, 293 F.3d 726, 730 (4th Cir. 2002) (citation omitted).
Where the allegations in a complaint sound in fraud, the plaintiff also must satisfy the heightened pleading requirements of Fed.R.Civ.P. 9(b) by "stat[ing] with particularity the circumstances constituting fraud." "The purposes of Rule 9(b) are to provide the defendant with sufficient notice of the basis for the plaintiff's claim; to protect the defendant against frivolous suits; to eliminate fraud actions where all of the facts are learned only after discovery; and to safeguard the defendant's reputation." Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *5 (D. Md. Jan. 22, 2013) (citations omitted); see Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 780 (4th Cir. 2013). Rule 9(b) requires that Plaintiff must allege "the time, place and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby." Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999) (citing 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure: Civil 3d § 1297, at 590 (2d ed. 1990)); see also Biktasheva v. Red Square Sports, 366 F.Supp.2d 289, 295 (D. Md. 2005) (citing cases). However, Rule 9(b) permits "intent, knowledge, and other conditions of a person's mind [to] be alleged generally." Fed.R.Civ.P. 9(b).
A. Motion to Dismiss the RICO Claim (Count I)
RICO "is concerned with eradicating organized, long-term, habitual criminal activity, '" not "all instances of wrongdoing.'" Mitchell Tracey v. First Am. Title Ins. Co., No. WDQ-12-1329, 2013 WL 1296390, at *6-7 (D. Md. Mar. 28, 2013) (quoting U.S. Airline Pilots Ass'n v. Awappa, LLC, 615 F.3d 312, 317 (4th Cir. 2010)). Courts, therefore, must "exercise caution' to ensure that RICO's extraordinary remedy does not threaten the ordinary run of commercial transactions, '" while at the same time "read[ing] the terms of the statute liberally' to effectuate its remedial purposes.'" Id. (quoting U.S. Airline Pilots, 615 F.3d at 317 (internal quotation marks omitted)). The Fourth Circuit "will not lightly permit ordinary business contract or fraud disputes to be transformed into federal RICO claims." Flip Mortg. Corp. v. McElhone, 841 F.2d 531, 538 (4th Cir. 1988). In Flip Mortgage, the Fourth Circuit was concerned with the application of RICO to "[a claim that] does not rise above ...