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Goel v. Bunge, Ltd.

United States Court of Appeals, Second Circuit

April 28, 2016

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.

Argued: April 6, 2016

Appeal from the United States District Court for the Southern District of New York

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 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.

Before: Kearse, Cabranes, and Chin, Circuit Judges.

JoséA. 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, 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 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 ...


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