THE COLOMBIAN AIR FORCE PURCHASING AGENCY (ACOFA)

v.

UNION TEMPORAL OVL CVRA HELICOPTEROS 2018 LLC

THIS MATTER came before the Court upon Defendant’s Motion to Dismiss Plaintiff’s Amended Complaint (“Motion”) [DE 100]. The Court has reviewed the Motion, the Response and Reply thereto [DE 102, 113], and all other pertinent portions of the record. For the reasons discussed herein, the Motion [DE 100] will be GRANTED IN PART and DENIED IN PART.

BACKGROUND

This case stems from Defendants’ sale of two allegedly defective helicopters to Plaintiff, a Colombian governmental agency that purchases aeronautical and defense equipment and services for different branches of the Colombian Ministry of National Defense, including the Armada Nacional de Colombia (the Colombian Navy) and the Dirección General Marítima. See Amended Complaint [DE 90] ¶¶ 10, 19-20, 24-26. In 2018, Plaintiff invited approved vendors to bid for the opportunity to be awarded contracts to supply two used helicopters. Id. ¶ 19. The invitation to bid specified the technical requirements of the helicopters and required vendors to represent whether their bid complied with those requirements. Id. Several companies, including Defendant Union Temporal OVL CVRA Helicopteros 2018, LLC (“UT OVL”), responded to Plaintiff’s invitation to bid. Id. ¶ 20. UT OVL’s bid responses advised that UT OVL’s members – CVRA Aeronautical LLC (“CVRA”) and Optimum Vehicle Logistics LLC (“OVL”), who are the defendants in this case along with UT OVL – were registered and authorized by Plaintiff to participate in the bid process. Id. The bid responses also represented that two specific helicopters were responsive to Plaintiff’s invitation to bid and that they met all technical requirements of the invitation to bid. Id. The bid response also included other representations regarding the roles each defendant would play if UT OVL was awarded the contracts for the helicopters. See id. ¶¶ 21-22. Based on the bid response and the representations that were made, Plaintiff awarded the contracts to UT OVL. Id. ¶ 24. As such, Plaintiff and UT OVL entered into two separate contracts (the “Contracts”) [DE 90-1, 90-2], each pertaining to one “navalised” helicopter to be purchased by Plaintiff (for more than $6 million each). Amended Complaint ¶¶ 25-26. The Contracts mandated certain technical specifications for the helicopters, required UT OVL to provide certain documentation, including airworthiness certificates and aircraft registration certificates, and contained a warranty. Id. ¶¶ 27-28. Upon delivery of the helicopters, several technical specification deficiencies were discovered and reported to UT OVL. Id. ¶ 34. Plaintiff provided several follow-up notifications to Defendants regarding the deficiencies, but Defendants have failed to remedy the issues. Id. ¶¶ 35-36. Additionally, UT OVL has not delivered the airworthiness certificates mandated under the Contracts and has not satisfied various warranty claims. See id. ¶¶ 37-41, 44. Moreover, UT OVL has failed to provide technical service in accordance with the Contracts. See id. ¶¶ 45-50. In light of the foregoing conduct Plaintiff alleges on the part of Defendants, Plaintiff imposed sanctions against Defendants (in December 2019), which served to prevent Defendants from submitting bids to Plaintiff for a period of two years. Id. ¶¶ 42, 77, 81. Additionally, in December 2021, Plaintiff brought this lawsuit against Defendants, asserting the following eight claims – in its initial Complaint [DE¹] – in this case: Count I – Violation of 18 U.S.C. § 1962(c), the Racketeer Influenced and Corrupt Organizations Act (“RICO”); Count II – Breach of Magnuson-Moss Warranty Act (“MMWA”); Count III – Breach of Contract; Count IV – Breach of Contract; Count V – Breach of Warranty; Count VI – Negligent Misrepresentation; Count VII – Fraudulent Concealment; and Count VIII – Violation of the Florida Deceptive and Unfair Trade Practices Act.

UT OVL is named a defendant in every count except for the RICO count. The other two defendants, CVRA and OVL, are named as defendants in Counts I and VII (the RICO and fraudulent concealment counts). The Court previously dismissed Plaintiff’s RICO claim (Count I) without prejudice, dismissed Plaintiff’s MMWA claim (Count II) with prejudice, and denied Defendants’ request for dismissal of all other claims. See [DE 72, 79]. On March², 2023, Plaintiff filed an Amended Complaint [DE 90], amending its RICO count (as well as certain general allegations). Pursuant to the Motion, Defendants now seek dismissal of Plaintiff’s amended RICO claim.

LEGAL STANDARD

At the pleading stage, a complaint must contain “a short and plain statement of the claim showing the [plaintiff] is entitled to relief.” Fed. R. Civ. P. 8(a). Although Rule 8(a) does not require “detailed factual allegations,” it does require “more than labels and conclusions”; a “formulaic recitation of the cause of action will not do.” Bell Atl. Corp v. Twombly, 550 U.S. 544, 555 (2007). When a claim sounding in fraud is alleged, the complaint “must satisfy the heightened pleading standards embodied in Federal Rule of Civil Procedure 9(b), which requires the plaintiff to ‘state with particularity the circumstances constituting fraud.’” Cisneros v. Petland, Inc., 972 F. 3d 1204, 1216 (11th Cir. 2020) (citation omitted). To do so, a plaintiff must allege “(1) the precise statements, documents, or misrepresentations made; (2) the time, place, and person responsible for the statement; (3) the content and manner in which these statements misled the Plaintiff[ ]; and (4) what the defendants gained by the alleged fraud.” Id. (citation omitted). To survive a motion to dismiss, “factual allegations must be enough to raise a right to relief above the speculative level” and must be sufficient “to state a claim for relief that is plausible on its face.” Twombly, 550 U.S. at 555, 570. “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The mere possibility the defendant acted unlawfully is insufficient to survive a motion to dismiss.” Sinaltrainal v. Coca-Cola Co., 578 F. 3d 1252, 1261 (11th Cir. 2009) (citing Iqbal, 556 U.S. at 679)). In considering a Rule 12(b)(6) motion to dismiss, the court’s review is generally “limited to the four corners of the complaint.” Wilchombe v. TeeVee Toons, Inc., 555 F. 3d 949, 959 (11th Cir. 2009) (quoting St. George v. Pinellas Cnty., 285 F. 3d 1334, 1337 (11th Cir. 2002)).¹ Courts must accept the factual allegations in the complaint as true and view them in the light most favorable to the plaintiff. Cambridge Christian Sch., Inc. v. Fla. High Sch. Athletic Ass’n, Inc., 942 F. 3d 1215, 1229 (11th Cir. 2019); Tims v. LGE Cmty. Credit Union, 935 F. 3d 1228, 1236 (11th Cir. 2019). But “[c]onclusory allegations, unwarranted deductions of facts or legal

ANALYSIS

The Court agrees with Defendants that Plaintiff’s RICO claim (Count I) is subject to dismissal. Under RICO, it is “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). A private plaintiff pursuing a civil RICO claim “must plausibly allege six elements: that the defendants (1) operated or managed (2) an enterprise (3) through a pattern (4) of racketeering activity that included at least two predicate acts of racketeering, which (5) caused (6) injury to the business or property of the plaintiff.” Cisneros, 972 F. 3d at 1211 (citing Ray v. Spirit Airlines, Inc., 836 F. 3d 1340, 1348 (11th Cir. 2016)). Here, Plaintiff fails to plausibly allege a “pattern of racketeering activity,”² a requirement that is “[e]ssential to any successful RICO claim.” Jackson v. BellSouth Telecomms., 372 F. 3d 1250, 1264 (11th Cir. 2004). Adequately pleading a pattern of racketeering activity requires alleging that: “(1) the defendants committed two or more predicate acts within a ten-year time span; (2) the predicate acts were related to one another; and (3) the predicate acts demonstrated criminal conduct of a continuing nature.” Id. (citations omitted); see also Cisneros, 972 F. 3d at

F. 3d at 1215 (citing 18 U.S.C. § 1961(1)). “A plaintiff must put forward enough facts with respect to each predicate act to make it independently indictable as a crime.” Id. (citing Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F. 3d 1364, 1381 (11th Cir. 1997)). In this case, Plaintiff’s RICO claim is premised upon the predicate acts of mail fraud and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343. See Amended Complaint ¶ 88. As indicated above, “[i]n addition to alleging the requisite number of individually chargeable predicate acts, a plaintiff must plausibly allege that the defendant is engaged in ‘criminal conduct of a continuing nature.’” Cisneros, 972 F. 3d at 1216 (citing Jackson, 372 F. 3d at 1264). “Continuity ‘is both a closed– and open-ended concept, referring either to a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition.’” United States v. Browne, 505 F. 3d 1229, 1259 (11th Cir. 2007) (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 241 (1989)). Thus, pleading continuity requires alleging “a series of related predicates extending over a substantial period of time” (closed-ended continuity) or “the threat of continuity” (open-ended continuity). Cisneros, 972 F. 3d at 1216 (quoting H.J. Inc., 492 U.S. at 242); see also Jackson, 372 F. 3d at 1265-67. Nonetheless, “independently chargeable instances of mail or wire fraud cannot constitute a ‘pattern of racketeering activity’ when they arise from a single transaction.” Cisneros, 972 F. 3d at 1216 (citations omitted). “Because each use of the mails or wires in furtherance of a single instance of fraud is independently indictable under the federal mail and wire fraud statutes, to hold otherwise could make RICO cases out of one allegedly fraudulent transaction,” which “would contravene the clear purpose of RICO.” Id. (internal citation omitted); see also In re Takata Airbag Prod. Liab. Litig., 396 F. Supp. 3d 1101, 1158-59 (S.D. Fla. 2019) (“Given the routine use of mail and wire communications in business operations, RICO claims premised on mail or wire fraud must be particularly scrutinized because of the relative ease with which a plaintiff may mold a RICO pattern from allegations that, upon closer scrutiny, do not support it.” (quoting Crawford v. Franklin Credit Mgmt. Corp., 758 F. 3d 473, 489 (2d Cir. 2014)) (cleaned up) (internal quotation marks omitted)). In dismissing the prior version of Plaintiff’s RICO claim, the Court explained that Plaintiff has not shown (and cannot show) criminal conduct of a continuing nature because Plaintiff’s RICO claim stems from a single transaction. [DE 72] at 8; [DE 79] at 2-3. In the instant Motion, Defendant maintains that Plaintiff’s amended RICO claim continues to suffer from the same deficiency. Plaintiff does not appear to contend in its response that its amended RICO claim stems from more than one transaction. Instead, Plaintiff insists that “[a]cts that are part of the same scheme or transaction can qualify as distinct predicate acts.” [DE 102] at 8 (quoting Cox v. Adm’r

U.S. Steel & Carnegie, 17 F. 3d 1386, 1397 (11th Cir. 1994)). However, the foregoing statement – which was made in a case (Cox) that was not predicated on mail or wire fraud – does not conflict with the Eleventh Circuit’s clear pronouncement in Cisneros that “independently chargeable instances of mail or wire fraud cannot constitute a ‘pattern of racketeering activity’ when they arise from a single transaction.” 972 F. 3d at 1216 (emphasis added) (citations omitted). Thus, Plaintiff has failed to show that its amended RICO claim cures the single-transaction deficiency that resulted in dismissal of the prior version of Plaintiff’s RICO claim. Plaintiff also separately maintains that it has adequately pled both closed-ended and openended continuity. But even putting aside the single-transaction issue, the factual allegations in the Amended Complaint do not plausibly establish either closed-ended or open-ended continuity. First, as noted above, “[c]losed-ended continuity can be established by ‘proving a series of related predicates extending over a substantial period of time.’” Ferrell v. Durbin, 311 F. App’x 253, 256 (11th Cir. 2009) (quoting Jackson, 372 F. 3d at 1265). For purposes of closed-ended continuity, a

“substantial period of time” is measured “in years, not in weeks.” Cisneros, 972 F. 3d at 1216 (citing Jackson, 372 F. 3d at 1267). In other words, “closed-ended continuity cannot be met with allegations of schemes lasting less than a year.” Ferrell, 311 F. App’x at 256 (quoting Jackson, 372 F. 3d at 1266). Even a period of closer to two years, however, is often insufficient – at least standing alone – to establish closed-ended continuity. See id. (finding that a complaint alleging misrepresentations over an almost two-year period did not sufficiently allege closed-ended continuity, and explaining, inter alia, that the complaint only involved a single scheme and two victims); see also Spool v. World Child Int’l Adoption Agency, 520 F. 3d 178, 184 (2d Cir. 2008) (“Since the Supreme Court decided H.J. Inc., we have never held a period of less than two years to constitute a substantial period of time. This conception of the substantiality requirement accords with that of other circuits. Although we have not viewed two years as a bright-line requirement, it will be rare that conduct persisting for a shorter period of time establishes closed-ended continuity . . . .” (internal quotation marks and citations omitted)). Moreover, “where the RICO allegations concern only a single scheme with a discrete goal, the courts have refused to find a closed-ended pattern of racketeering even when the scheme took place over longer periods of time.” Jackson, 372 F. 3d at 1267 (collecting cases). Here, Plaintiff contends that it has adequately alleged closed-ended continuity because it has alleged fraudulent actions extending over a three-year period and “more than ‘a single scheme with a discrete goal.’” [DE 102] at 8, 9. Regarding the time period involved, it is wholly unclear how Plaintiff has calculated a three-year period.³ Although the Amended Complaint does include certain conclusory allegations concerning a three-year period, see Amended Complaint ¶¶ 78, 87, 94, the factual allegations viewed in the light most favorable to Plaintiff establish a far shorter period. For starters, Plaintiff alleges that Defendants’ acts to defraud Plaintiff began with the submission of Defendants’ bid response in late 2018 – though it does allege elsewhere that Defendants initially made misrepresentations as early as June 2018. See Amended Complaint ¶¶ 55, 61, 80, 90. Plaintiff separately alleges that Defendants’ misrepresentations continued through June 2020, when Defendants’ counsel sent a demand letter to Plaintiff. Id. ¶ 61. However, the non-conclusory allegations do not reveal any misrepresentations that occurred after 2018. At the very least, no new misrepresentations beyond those made in the submission of the bid response are alleged. Plaintiff does allege that the use of mail and/or wires in connection with Defendants’ scheme to defraud occurred between June 2018 and June 2020. Id. ¶ 90. Thus, even if the Court were to assume that this provides the relevant period for purposes of closed-ended continuity, the

Amended Complaint identifies a two-year period at best, not a three-year period. Regardless, even if the Court were to accept that Plaintiff adequately alleged a two-year period for purposes of considering closed-ended continuity, that would not change the fact that this case is still about a single scheme to defraud with a discrete goal. In arguing otherwise, Plaintiff asserts that

OVL Defendants made material misrepresentations regarding the condition of Helicopter 251 and Helicopter 252 including but not limited to misrepresentations identified in paragraph 90 above.”).

For the foregoing reasons, Plaintiff has failed to plausibly allege a pattern of racketeering activity. Therefore, Count I fails to state a claim upon which relief can be granted.

CONCLUSION

For the reasons discussed above, it is ORDERED and ADJUDGED that the Motion [DE 100] is GRANTED IN PART and DENIED IN PART. Count I of the Amended Complaint [DE 90] is DISMISSED without leave to amend.⁷ However, Defendants’ request for dismissal based on lack of subject matter jurisdiction is denied for the reasons stated in DE 101.8

ared M. Strauss United States Magistrate Judge