15‐3023‐cv
Goel et al. v. Bunge, Ltd. et al.
In the
United States Court of Appeals
For the Second Circuit
________
AUGUST TERM 2015
No. 15‐3023‐cv
VIKAS GOEL AND RAINFOREST TRADING LTD.,
Plaintiffs‐Appellants,
v.
BUNGE, LTD., BUNGE S.A., GRAINS AND INDUSTRIAL PRODUCTS PTE
LTD., STATE BANK OF INDIA,
Defendants‐Appellees,
AMERICAN DIGITAL UNIVERSITY, INC., INTERNATIONAL MARITIME
UNIVERSITY, LLC, TELEDATA MARINE SYSTEMS LLC, TELEDATA
SYSTEMS AND SERVICES, LLC, AND ANUSH RAMACHANDRAN,
Defendants.*
________
Appeal from the United States District Court
for the Southern District of New York
________
* The Clerk of Court is directed to amend the official caption to conform
with the caption above.
ARGUED: APRIL 6, 2016
DECIDED: APRIL 28, 2016
________
Before: KEARSE, CABRANES, AND CHIN, Circuit Judges.
________
Plaintiffs‐appellants Vikas Goel and Rainforest Trading Ltd.
appeal August 7, 2015 and August 27, 2015 judgments of the United
States District Court for the Southern District of New York
(Katherine B. Forrest, Judge) dismissing as untimely their claims
under the Racketeer Influenced and Corrupt Organizations Act, 18
U.S.C. § 1961 et seq., and declining to exercise supplemental
jurisdiction over their state‐law claims. Concluding that the District
Court properly rejected plaintiffs’ argument that their claims are
timely under New York’s so‐called “savings statute,” N.Y. C.P.L.R. §
205(a), but that the Court erred by considering materials outside the
pleadings at the motion‐to‐dismiss stage, we VACATE the judgment
and REMAND for further proceedings.
________
ROBERT SENTNER, Sentner Safran LLP, New York,
NY (Victoria Safran, Sentner Safran LLP, New
York, NY, and Nicole F. Mastropieri, Nixon
Peabody LLP, New York, NY, on the brief), for
Plaintiffs‐Appellants.
WENDY H. SCHWARTZ, Binder & Schwartz LLP,
New York, NY (John C. Scalzo and Jennifer L.
Achilles, Reed Smith LLP, New York, NY, on the
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brief), for Defendants‐Appellees Bunge, Ltd., Bunge
S.A., and Grains and Industrial Products PTE Ltd.
BRIAN ROSNER (Natalie A. Napierala, on the brief),
Carlton Fields Jordan Burt, P.A., New York, NY,
for Defendant‐Appellee State Bank of India.
________
JOSÉ A. CABRANES, Circuit Judge:
Plaintiffs‐appellants Vikas Goel and Rainforest Trading Ltd.
(jointly, “plaintiffs”) appeal August 7, 2015 and August 27, 2015
judgments of the United States District Court for the Southern
District of New York (Katherine B. Forrest, Judge) dismissing as
untimely their claims under the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. § 1961 et seq. (“RICO”), and declining to
exercise supplemental jurisdiction over their state‐law claims.
Among other arguments, plaintiffs contend that their claims are
timely under New York’s so‐called “savings statute,” N.Y. C.P.L.R. §
205(a), and that the District Court erred by relying on materials
outside the pleadings in deciding motions to dismiss brought by
defendants‐appellees Bunge, Ltd., Bunge S.A., Grains and Industrial
Products PTE Ltd., and the State Bank of India (“SBI”) (jointly,
“defendants”).
We reject the argument that New York’s savings statute
governs the timeliness of plaintiffs’ federal claims, but we are
persuaded by plaintiffs’ second contention. Presented with
documents extrinsic to the complaint at the motion‐to‐dismiss stage,
the District Court should have either excluded the documents or,
3
pursuant to Federal Rule of Civil Procedure 12(d), treated the
motions to dismiss as motions for summary judgment. Because it
did neither, we must VACATE the judgment and REMAND for
further proceedings.
BACKGROUND
This case arises out of an alleged fraud. According to the
complaint, Goel founded and managed a computer‐equipment
distribution company called eSys Informatics, Ltd. (“eSys”). In 2006,
he contracted to sell fifty‐one percent of eSys’s shares to Teledata
Informatics Pte. Ltd. (“Teledata”), an Indian company purporting to
be in the software business, at the price of $105 million. Goel alleges
that Teledata was a sham operation; that it carried on no legitimate
business; and that it was only through the connivance of defendants,
who participated with Teledata in a complex scheme that involved
illegal loans used to generate profits from interest‐rate arbitrage,
that Teledata was made to appear an attractive investment partner.
All collapsed in the end, destroying the value of eSys and damaging
plaintiffs to the tune of hundreds of millions of dollars.
Following a 2009 fraud action brought by plaintiffs against
Teledata and its affiliates in Singapore, a 2010 action brought by SBI,
also in Singapore, to foreclose on eSys shares pledged as security on
a loan, and a 2010 state‐law action brought by plaintiffs against
Bunge, Ltd., Bunge S.A., and defendant Anush Ramachandran in
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New York state court,1 plaintiffs initiated this lawsuit. It was filed
on January 2, 2014, in the Supreme Court of the State of New York,
Westchester County.
Defendants removed, then moved to dismiss under Federal
Rule of Civil Procedure 12(b)(6), arguing, inter alia, that plaintiffs’
RICO claims were untimely under the applicable four‐year statute of
limitations. See Koch v. Christie’s Int’l PLC, 699 F.3d 141, 148 (2d Cir.
2012). The District Court agreed. It concluded that Goel had been
put on inquiry notice of his RICO claims no later than 2007, more
than four years before he filed this action, and had failed to
investigate with reasonable diligence the possibility that he had been
injured. Goel v. Am. Dig. Univ., Inc., Nos. 14 Civ. 2053 (KBF), 14 Civ.
1895 (KBF), 2015 WL 5037002, at *11‐13 (S.D.N.Y. Aug. 26, 2015).
Accordingly, the Court dismissed the RICO claims and, with no
federal claim remaining in the case, declined to exercise
supplemental jurisdiction over plaintiffs’ state‐law claims. Id. at *13.
On appeal, plaintiffs advance a number of arguments in
support of their central contention: that the District Court erred in
dismissing their RICO claims as untimely. We agree with plaintiffs
that the District Court improperly relied on materials outside the
complaint at the motion‐to‐dismiss stage. Accordingly, we conclude
that the judgment must be vacated and the cause remanded.
1 Most of plaintiffs’ claims in the New York case were dismissed for
failure to state a claim, see Goel v. Ramachandran, 111 A.D.3d 783 (N.Y. App. Div.
2d Dep’t 2013); the sole remaining count, a fraud claim, was dismissed without
prejudice pursuant to a stipulation of discontinuance.
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DISCUSSION
Though our conclusion that the District Court erred in
roaming outside the pleadings obviates the need to consider
plaintiffs’ other arguments, we pause to address their contention
that this action is timely under New York’s savings statute, N.Y.
C.P.L.R. § 205(a).2 This statute “effectively tolls the running of a
statutory period to permit refiling within six months when an action
has been timely commenced but dismissed on grounds other than
voluntary discontinuance, lack of personal jurisdiction, neglect to
prosecute, or the entry of a final judgment on the merits.” Goldstein
v. N.Y. State Urban Dev. Corp., 921 N.E.2d 164, 168 (N.Y. 2009).
On this point, we agree with the District Court: New York’s
savings statute is no help to plaintiffs. RICO is a federal law
governed by a federal statute of limitations, and that statute of
limitations is subject to federal, not state, tolling rules. See
Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339,
347 (2d Cir. 1994) (“[I]t seems obvious to us that . . . concerns for
uniformity . . . dictate that federal rather than state tolling doctrines
should govern in civil RICO actions.”); see also Burnett v. N.Y. Cent.
R.R. Co., 380 U.S. 424, 433 (1965) (“[T]he period of time within which
an action may be commenced is a material element in a uniformity
2 We think it appropriate to reach this issue because resolving it in
plaintiffs’ favor would put to rest the question of timeliness, rather than delaying
its consideration until a later stage in the litigation—the result of today’s
disposition.
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of operation which Congress would not wish to be destroyed by the
varying provisions of the State statutes of limitation. The
incorporation of variant state saving statutes would defeat the aim
of a federal limitation provision designed to produce national
uniformity.” (alterations, citation, and internal quotation marks
omitted)). This principle applies irrespective of the forum in which
a RICO claim is first asserted, rendering inconsequential—at least
for this purpose—plaintiffs’ decision to file in state rather than
federal court. See Sawyer v. Atlas Heating & Sheet Metal Works, Inc.,
642 F.3d 560, 562‐63 (7th Cir. 2011) (applicable statute of limitations
is determined by “[t]he source of law, and not the identity of the
forum”). Accordingly, the District Court did not err in holding that
New York’s tolling provision does not operate to save plaintiffs’
claims.
We reach a different conclusion with respect to the District
Court’s reliance on documents outside the complaint on defendants’
motions to dismiss. A motion brought under Rule 12(b)(6)
challenges only the “legal feasibility” of a complaint. Global Network
Commc’ns, Inc. v. City of New York, 458 F.3d 150, 155 (2d Cir. 2006).
The test of a claim’s “substantive merits” is “reserved for the
summary judgment procedure, governed by [Federal Rule of Civil
Procedure] 56, where both parties may conduct appropriate
discovery and submit the additional supporting material
contemplated by that rule.” Id. (internal quotation marks omitted).
Because a Rule 12(b)(6) motion challenges the complaint as
presented by the plaintiff, taking no account of its basis in evidence,
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a court adjudicating such a motion may review only a narrow
universe of materials. Generally, we do not look beyond “facts
stated on the face of the complaint, . . . documents appended to the
complaint or incorporated in the complaint by reference, and . . .
matters of which judicial notice may be taken.” Concord Assocs., L.P.
v. Entm’t Props. Tr., ‐‐‐ F.3d ‐‐‐, 2016 WL 1075947, at *2 n.2 (2d Cir.
Mar. 18, 2016) (internal quotation marks omitted).
We have recognized, however, that in some cases, a document
not expressly incorporated by reference in the complaint is
nevertheless “integral” to the complaint and, accordingly, a fair
object of consideration on a motion to dismiss. A document is
integral to the complaint “where the complaint relies heavily upon
its terms and effect.” Chambers v. Time Warner, Inc., 282 F.3d 147, 153
(2d Cir. 2002) (internal quotation marks omitted). Merely
mentioning a document in the complaint will not satisfy this
standard; indeed, even offering “limited quotation[s]” from the
document is not enough. Global Network Commc’ns, 458 F.3d at 156;
see also Goldman v. Belden, 754 F.2d 1059, 1066 (2d Cir. 1985). “In
most instances where this exception is recognized, the incorporated
material is a contract or other legal document containing obligations
upon which the plaintiff’s complaint stands or falls, but which for
some reason—usually because the document, read in its entirety,
would undermine the legitimacy of the plaintiff’s claim—was not
attached to the complaint.” Global Network Commc’ns, 458 F.3d at
157.
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In deciding defendants’ motions to dismiss in this case, the
District Court relied on two sources extrinsic to the complaint:
Goel’s deposition testimony from the 2010 New York action and an
affidavit Goel submitted in connection with the 2010 Singapore
foreclosure proceeding. See Goel, 2015 WL 5037002, at *6‐7, *9. In the
District Court’s view, each tended to show that Goel was on notice
of defendants’ fraudulent scheme no later than 2007. See id. at *11‐
12. The Court observed that documents outside the complaint are
generally off‐limits on a motion to dismiss, but it considered these
sources nonetheless, on the theory that each was integral to the
complaint.3 Id. at *8‐9.
We cannot agree. It is true, as defendants emphasize, that
plaintiffs “expressly allege[d] that [a] substantial portion of the facts
described [in the complaint] was learned in the [New York action],”
Bunge Defs.’ Br. at 32 (internal quotation marks omitted) (second
alteration in original); true also, as the District Court stressed, that
plaintiffs “filled the Complaint with allegations relying on and
referencing the court filings and ‘sworn testimony’ from [the New
York action] in order to detail . . . how the scheme worked,” Goel,
2015 WL 5037002, at *9. But neither observation supports the
District Court’s consideration of Goel’s deposition testimony and
affidavit.
3 The District Court expressly declined to judicially notice the relevant
facts recited in the documents, Goel, 2015 WL 5037002, at *9 n.6, and therefore did
not provide plaintiffs the opportunity to be heard required by Federal Rule of
Evidence 201(e); thus, we do not consider defendants’ argument that Goel’s
deposition testimony and affidavit were proper objects of judicial notice.
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As for the first, we fail to apprehend its significance. That
Goel learned about the particulars of defendants’ alleged fraud
during the New York lawsuit simply hasn’t a thing to do with
whether his complaint relies heavily on the effect of deposition
testimony he gave in connection with that case.
As for the second, though plaintiffs’ complaint indeed refers
to “sworn testimony” from the New York action, it does not refer to
Goel’s sworn testimony. See, e.g., J.A. 32 ¶ 73 (referring to “the
testimony of Bunge Ltd. officers”); J.A. 36 ¶ 93 (referring to “the
testimony of Bunge representatives”); J.A. 36 ¶ 96 (referring to
“sworn Bunge Ltd. testimony”); J.A. 37 ¶ 97 (referring to
“[d]ocuments produced by Bunge”). Much less does it so heavily
rely on the terms and effect of Goel’s testimony that the deposition
transcript may fairly be deemed integral to the complaint.4 A
complaint that alleges facts related to or gathered during a separate
litigation does not open the door to consideration, on a motion to
dismiss, of any and all documents filed in connection with that
litigation. See Global Network Commc’ns, 458 F.3d at 156 (complaint’s
reference to plaintiff’s guilty pleas in separate proceedings did not
permit consideration of “the content of his testimony proffered in
exchange for the pleas, as the nexus between the two [was] too
attenuated to render that testimony integral to the complaint”). A
contrary rule would permit the improper transformation of the Rule
4 The connection between the complaint and Goel’s affidavit from the
Singapore foreclosure action appears to be even more attenuated; the complaint
mentions the Singapore proceeding only in passing. See J.A. 25 ¶ 38.
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12(b)(6) inquiry into a summary‐judgment proceeding—one
featuring a bespoke factual record, tailor‐made to suit the needs of
defendants.
Of course, the Federal Rules of Civil Procedure contemplate
that when a district court is presented with materials outside the
pleadings at the motion‐to‐dismiss stage, circumstances sometimes
favor their consideration. If the court wishes to take account of such
materials, however, the Rules oblige it to “treat[ ] [the motion] as
one for summary judgment under Rule 56” and give all parties “a
reasonable opportunity to present all the material that is pertinent to
the motion.” Fed. R. Civ. P. 12(d); see also Chambers, 282 F.3d at 154.
In this case, the District Court “considered converting
[defendants’] motion[s],” but ultimately decided against it. Goel,
2015 WL 5037002, at *8 n.5. Because neither Goel’s deposition
testimony nor his affidavit can properly be deemed integral to the
complaint, that decision was in error. The appropriate occasion to
consider these documents, which may be relevant to the timeliness
of the RICO claims, is on summary judgment, not a motion to
dismiss. Accordingly, the judgment must be vacated and the cause
remanded.5
5 We leave the question of SBI’s immunity under the Foreign Sovereign
Immunities Act, 28 U.S.C. § 1602 et seq.—which was not addressed below and
which is far afield from the issue of timeliness—for the District Court to consider
in the first instance.
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CONCLUSION
In sum, we conclude that the District Court erred by relying
on materials outside the pleadings in deciding defendants’ motions
to dismiss. We thus VACATE the judgments of August 7, 2015 and
August 27, 2015 and REMAND for such further proceedings as may
be appropriate in the circumstances.
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