United States District Court, District of Columbia
G. SULLIVAN UNITED STATES DISTRICT JUDGE
action arises out of an alleged racketeering scheme spanning
about eight years whereby defendants-twenty-two companies and
individuals-purportedly used otherwise legitimate business
entities to defraud plaintiffs by making false promises to
sell agricultural goods. Plaintiffs sue defendants for: (1)
violation of 18 U.S.C. § 1962(c)(“RICO”);
(2) violation of 18 U.S.C. § 1962(d) (conspiracy to
violate RICO); (3) conspiracy to commit fraud; (4) fraud; and
(5) breach of contracts. Pending before the Court are several
motions: (1) nine defendants' eight motions to dismiss;
(2) one defendant's motion to strike certain
declarations; (3) plaintiffs' two motions to allow
alternate service for seven defendants; (4) plaintiffs'
motion for jurisdictional discovery.
Court has carefully considered the pending motions, the
opposition memoranda, the replies thereto, the entire record
herein, and the applicable law. The Court concludes that it
lacks personal jurisdiction over the nine defendants and
therefore GRANTS the eight pending motions
to dismiss. The Court also concludes that jurisdictional
discovery is not warranted and DENIES
plaintiffs' motion for jurisdictional discovery. Because
the Court lacks jurisdiction over the relevant defendants, it
DENIES AS MOOT plaintiffs' motions for
service and the motion to strike plaintiffs'
Court credits the complaint, which it must at this stage of
the proceedings. This matter arises out of an alleged
racketeering scheme, largely organized by two defendants, to
defraud plaintiffs by making false promises to provide
agricultural goods sold to and bought by plaintiffs. See
generally Compl., ECF No. 1. The Court first describes
the parties and then elaborates on the purported scheme.
Because most of the defendants have not entered an appearance
in the case, the Court focuses its discussion on the nine
defendants with pending motions to dismiss.
are two corporate entities and one individual. First, Nuevos
Destinos, LLC (“NDL”) is a company registered in
Florida with its principal place of business in the District
of Columbia (at the time of the injury) and Virginia
(presently). Id. ¶ 9. It purchases agricultural
products from Peru “for export from Peru and delivery
to the United States and other countries.” Id.
Plaintiff Nuevos Destinos Peru, S.A.C. (“NDP”) is
a company organized in Peru with its principal place of
business in the District of Columbia (at the time of the
injury) and Virginia (presently). Id. ¶ 10. It
is the Peruvian “affiliate” of NDL and
“serves as the purchasing agent” for NDL in Peru.
Id. Finally, plaintiff William P. Cook (“Mr.
Cook”) is a United States citizen who lives in the
Commonwealth of Virginia. Id. ¶ 11. He and his
wife are the principals of NDL, id. ¶ 9, and he
“personally financed all of the agricultural
transactions by which plaintiffs were defrauded, ”
id. ¶ 11.
include one United States citizen, one United States
corporation, and seven Peruvian citizens and corporations.
The “central mastermind” of the scheme is Ignacio
Harten Rodriguez Larrain (“Ignacio”).
Id. ¶ 13. He is a Peruvian citizen who,
“upon information and belief, ” presently lives
in the United States. He was the General Manager of Agricola
Peruana Del Sol, S.R.L. (“APS”), a Peruvian
company that processed and exported agricultural products
from Peru to other countries, including the United States.
Id. ¶¶ 13, 15. Neither Ignacio, nor APS
has entered an appearance in the case. The other central
figure, according to plaintiffs, is defendant Samuel Peck
(“Mr. Peck”), who was a founder and majority
shareholder of APS. Id. ¶ 12. Mr. Peck is a
United States citizen residing in Colorado. Id.
During the relevant time, Mr. Peck was also the Vice
President and chief buyer for defendant SKE Midwestern
(“SKE”), a United States corporation registered
and located in North Dakota. Id. ¶¶ 12,
17. SKE is a “beans broker, supplier, importer,
processor and shipper” with over twenty years'
experience in international markets, including Peru.
Id. ¶ 17. Defendant Emilio Farah (“Mr.
Farah”) is a citizen of Peru and an alleged principal
of two other defendant Peruvian corporations, Convalor,
S.A.C. (“Convalor”) and Confactor, S.A.C.
(“Confactor”). Id. ¶ 16. Mr. Farah
sought to buy, process, and sell agricultural products with
NDL and introduced plaintiffs to Ignacio. Id.
Jorge Harten Costa, Sr. (“Jorge, Sr.”) is
Ignacio's father and is also a Peruvian citizen.
Id. ¶ 20. He was a designated agent of APS.
Id. Defendant Jorge Emilio Harten Rodriguez Larrain,
Jr. (“Jorge, Jr.”) is also a Peruvian citizen and
Ignacio's brother (and Jorge, Sr.'s son).
Id. ¶ 21. He was also a designated agent of
APS. Id. Defendant Ofelia Maria Rodriguez Larrain
Salinas de Harten (“Ofelia”) is also a Peruvian
citizen. Id. ¶ 22. She is Jorge, Sr.'s wife
and Ignacio's mother. Id. Ofelia also became the
“nominal public head of” Peruvian Organic
International Trading, S.A.C. (“POIT”), another
defendant Peruvian company that became the “successor
in interest” to APS. Id. POIT has been
“continu[ing] the fraudulent schemes of APS and
[Ignacio].” Id. ¶ 23. POIT has not
entered an appearance in the case. Finally, defendant Javier
Rodriguez Larrain Salinas (“Javier”) is a
Peruvian citizen and Ignacio's uncle (Ofelia's
brother). Id. ¶ 24. When discussing these four
defendants collectively, the Court will refer to Jorge, Sr.;
Jorge, Jr.; Ofelia; and Javier as the “Harten
to plaintiffs, the racketeering organization essentially
functioned as a Ponzi scheme, id. ¶ 96, whereby
individual defendants-including the Harten family, Mr. Peck,
SKE, Convalor, Confactor, and Mr. Farah-would
“vouch” for Ignacio and APS, posing as
uninterested parties, see Id. ¶¶ 12-30. In
reality, these individual defendants had been defrauded by
Ignacio and APS and were seeking to recoup their losses by
recruiting new investors to defraud. See Id. The new
investors' funds would not be used to purchase
agricultural products, as the investors intended and Ignacio
and APS promised, but would rather be used to pay off the
debts. See id.
2007, Ignacio and Mr. Peck, on behalf of SKE, created APS,
which sold agricultural products internationally.
Id. ¶ 67. At some point, SKE and Mr. Peck
purchased significant amounts of products from APS. APS began
“defaulting” on its promises to provide SKE with
its agricultural products. Id. ¶ 70, see
Id. ¶¶ 71-74. By 2011, APS owed SKE $3.6
million. Id. ¶ 74. Accordingly, SKE's
President told Mr. Peck that “his job was on the
line” and he had to do “whatever it took to get
the Company's money back from APS and [Ignacio].”
Id. ¶ 74. At that point, Mr. Peck and Ignacio
devised a scheme “whereby [Mr.] Peck would issue
facially valid purchase orders on behalf of SKE and then
[Ignacio] would shop them around to financing sources in Lima
and abroad.” Id. ¶ 76. Mr. Peck and
Ignacio then sold the purchasing orders to investors,
including the Harten family and Mr. Farah. Id.
¶¶ 79-82. By 2012, Mr. Peck and Ignacio owed the
other defendants millions of dollars. See Id.
According to plaintiffs, these defendants sought to recover
their lost investments by vouching for Ignacio and APS with
the aim to recruit new investors. See Id. ¶ 96.
this scheme was ongoing, NDL was looking to expand its
business beyond financing exporting companies in Peru. In
2012, it sought to buy products directly from Peruvian
agricultural producers to sell and export. Id.
¶ 31. In April 2012, Mr. Farah introduced plaintiffs to
Ignacio in Peru. Id. ¶¶ 32, 103 (meeting
in Bujama, Peru). Mr. Farah said that Ignacio was “one
of the largest exporters of bean products in Peru” and
was “honest [and] well-connected.” Id.
¶ 31. In May 2012, plaintiffs met Mr. Peck at a lunch
organized by Ignacio in Peru. Id. ¶ 88. In an
effort to retain plaintiffs' business, Mr. Peck told
plaintiffs that “he had worked for a long time with
[Ignacio]” and that he was “very pleased with the
relationship.” Id. He also emphasized that APS
was a “top exporter” and confirmed that the
purchase order NDL was considering financing was “for
real, ” and that SKE had “committed to
purchase” the products at issue. Id. ¶
89. Mr. Peck did not disclose the debt that APS owed SKE, nor
did he mention his ownership stake in APS. Id.
¶ 91. A month later, plaintiffs also met with Jorge, Sr.
in Peru. Id. ¶ 106. Jorge, Sr. also recommended
his son's company and did not disclose APS' debts.
Id. In August 2012, Ignacio and his wife traveled to
the District of Columbia to meet with plaintiffs in person.
Id. ¶ 33.
those recommendations and references, NDL began transacting
with APS in May 2012. Id. ¶¶ 36, 100-102
(stressing the importance of the recommendations to
plaintiffs' decision to work with Ignacio and APS). NDL
entered into several contracts with APS for various
agricultural products. Ultimately, it provided over $1.5
million for about 1, 500 metric tons of products.
Id. ¶¶ 36, 37. Ultimately, APS only
delivered about 64 of the 1, 500 tons of products.
Id. The amounts “disbursed by NDL to APS for
[agricultural] products . . . were solely for the benefit of
NDL or its customers; or for customers for whom [Ignacio] led
NDL to believe APS had specific purchaser orders, including
SKE (which NDL later found out to be largely false).”
Id. ¶ 37. Despite its many efforts, plaintiffs
have been unable to “get a full and complete accounting
of where its money went.” Id. ¶ 128.
Plaintiffs have also been unsuccessful in recovering the
money that they allege they are owed. See, e.g.,
id. ¶ 145 (alleging to have received $48, 540
of the $1.7 million owed).
plaintiffs uncovered the defendants' scheme, the Harten
family created POIT, the company that succeeded APS, in 2014.
Id. ¶ 144. According to plaintiffs, defendants
have continued the same racketeering activity through POIT.
See Id. ¶¶ 83-84, 136-141.
their eight pending motions to dismiss, the nine defendants
challenge the complaint on several grounds. See
Defs.' Mots. to Dismiss (“Defs.' Mots.”),
ECF Nos. 35, 36, 37, 38, 45, 50, 52, 54. All nine defendants
argue that the Court lacks personal jurisdiction over them
pursuant to Federal Rule of Civil Procedure 12(b)(2). See
Id. Five of the defendants challenge the plaintiffs'
choice of forum pursuant to Federal Rule of Civil Procedure
12(b)(3) and the forum non conveniens doctrine.
See Defs.' Mots., ECF Nos. 45, 50, 52, 54. Seven
of the defendants also argue that they were improperly served
pursuant to Federal Rule of Civil Procedure 12(b)(5).
See Defs.' Mots., ECF Nos. 35, 36, 37, 38, 50,
52. Finally, five of the defendants argue that plaintiffs
failed to state a RICO claim pursuant to Federal Rule of
Civil Procedure 12(b)(6). See Defs.' Mots., ECF
Nos. 45, 50, 52, 54. Because the Court agrees that it lacks
personal jurisdiction over all nine defendants, it need not
reach their other arguments. See Galvan v. Fed. Prison
Indus., Inc., 199 F.3d 461, 463 (D.C. Cir.
1999)(“Jurisdiction must be established before a
federal court may proceed to any other
question.”)(citing Steel Co. v. Citizens for a
Better Env't, 523 U.S. 83, 94-95 (1998)).
The Court Lacks Personal Jurisdiction Over the
nine defendants submit similar arguments in their eight
motions to dismiss. See Defs.' Mots., ECF Nos.
35, 36, 37, 38, 45, 50, 52, 54. Essentially, the defendants
argue-and the Court agrees-that this case is a Peruvian
dispute about activities that occurred in Peru and injuries
that were caused in Peru. See, e.g., Def.'s
Mot., ECF No. 54-1 at 1-2 (“The complaint . . .
describes an ordinary business dispute between two Peruvian
companies . . . . [t]he conduct described in the complaint
takes place almost entirely in Peru”). First, because
none of the defendants reside here, all argue that the Court
lacks general jurisdiction as they are not essentially
“at home” in the District of Columbia (American
defendants) or in the United States (Peruvian defendants).
See Defs.' Mots., ECF Nos. 35, 36, 37, 38, 45,
50, 52, 54. The Peruvian defendants, including the Harten
family, Confactor, Convalor, and Mr. Farah, also argue that
the Court cannot establish jurisdiction over them by way of
the RICO statute because it only provides for nationwide
service of process on domestic defendants. Defs.' Mots.,
ECF Nos. 35, 36, 37, 38, 50, 52. The American defendants, SKE
and Mr. Peck, also argue that the Court cannot acquire
jurisdiction over them via the RICO statute because the Court
does not have jurisdiction over at least one of the
defendants in the enterprise, as it must. See
Defs.' Mots., ECF Nos. 45, 54. Finally, all of the
defendants contend that the purportedly unlawful conduct
occurred in Peru, and thus, the Court cannot acquire specific
jurisdiction over them pursuant to the District of
Columbia's long arm statute or Federal Rule of Civil
Procedure 4(k)(2) because there is no “substantial
connection” between the defendants and the forum.
See Defs.' Mots., ECF Nos. 35, 36, 37, 38, 45,
50, 52, 54. As such, the defendants conclude that exercising
jurisdiction would violate due process. See id.
plaintiffs' briefing regarding personal jurisdiction
focuses on each defendant's role in the RICO scheme and
is therefore largely irrelevant to the Court's
jurisdictional analysis. Pls.' Opp'n, ECF No. 64 at
8-43. That said, plaintiffs respond that
personal jurisdiction lies in this Court pursuant to Federal
Rule of Civil Procedure 4(k)(2), known as the “federal
long arm statute.” Id. at 9-15. Plaintiffs
contend that jurisdiction is proper because “each of
the defendants herein, had more than fair warning that the
activities of APS and POIT would subject them to the
jurisdiction of the U.S” because all the defendants had
“personal knowledge” of the purported
“business plan”: to defraud “U.S.-based
customers.” Id. at 12. Moreover, plaintiffs argue
that the defendants purposefully directed their activities at
the forum by soliciting plaintiffs, citizens of the forum at
the time, and encouraging investment in APS. See Id.
Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears
the burden of establishing a factual basis for personal
jurisdiction.” Canuto v. Mattis, No. 16-2282,
2018 WL 3213318, at *4 (D.D.C. June 30, 2018)(citing
Okolie v. Future Servs. Gen. Trading & Contracting
Co., W.L.L., 102 F.Supp.3d 172, 175 (D.D.C. 2015);
Crane v. N.Y.Zoological Soc'y, 894 F.2d 454, 456
(D.C. Cir. 1990)). To meet that burden, the plaintiff
“‘must allege specific acts connecting [the]
defendant with the forum.'” Okolie, 102
F.Supp.3d at 175 (quoting Second Amendment Found. v. U.S.
Conf. of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001)).
“In assessing whether this showing has been made, facts
asserted by the plaintiff . . . [are] presumed to be true
unless directly contradicted by affidavit, ” AGS
Int'l Servs. S.A. v. Newmont USA
Ltd., 346 F.Supp.2d 64, 81 (D.D.C.
2004)(quotations and citations omitted), but a Court
“‘may receive and weigh affidavits and other
relevant matter to assist it in determining the
jurisdictional facts, '” Okolie, 102
F.Supp.3d at 175 (quoting Buesgens v. Brown, 567
F.Supp.2d 26, 31 (D.D.C. 2008)).
Court assumes, for the purposes of resolving personal
jurisdiction only, that defendants were properly
served.However, “service of process does not
alone establish personal jurisdiction.” Mwani v.
bin Laden, 417 F.3d 1, 8 (D.C. Cir. 2005). “Before
a court may exercise personal jurisdiction over a defendant,
there must be more than notice to the defendant.”
Omni Capital Intern., Ltd. v. Rudolf Wolff & Co.,
Ltd., 484 U.S. 97, 104 (1987). There must also be
“authorization for service of summons on the defendant,
” and a “constitutionally sufficient relationship
between the defendant and the forum.” Id.
Thus, “[t]wo requirements must be met for a District of
Columbia court to exercise personal jurisdiction over a
defendant.” Bradley v. DeWine, 55 F.Supp.3d
31, 39 (D.D.C. 2014). “First, the defendant must
qualify for either general or specific jurisdiction under the
relevant . . . statutes.” Id. “Second,
the exercise of jurisdiction over the defendant must comply
with the Due Process Clause . . . .” Id. at
39-40 (citations omitted).
whether a court may exercise personal jurisdiction over a
defendant “typically implicates a state's
jurisdictional statute or rule.” Alkanani v. Aegis
Def. Servs., LLC, 976 F.Supp.2d 13, 21 (D.D.C. 2014)
(quotations and alterations omitted). Therefore, this Court
has personal jurisdiction over the defendants if a District
of Columbia court could exercise personal jurisdiction over
them. See Fed. R. Civ. P. 4(k)(1)(A); see also
Daimler AG v. Bauman, 571 U.S. 117, 125
(2014)(“Federal courts ordinarily follow state law in
determining the bounds of their jurisdiction over
the Court may also exercise personal jurisdiction if it is
authorized by a federal statute or rule. See, e.g.,
Fed.R.Civ.P. 4(k)(1)(C). Plaintiffs contend that the Court
has jurisdiction over the defendants because it is authorized
by the RICO statute, by Federal Rule of Civil Procedure
4(k)(2), and by the District of Columbia long arm statute.
See Pls.' ...