United States District Court, C.D. California
CIVIL MINUTES - GENERAL O'
CHRISTINA A. SNYDER, District Judge.
Proceedings: (IN CHAMBERS): DEFENDANT'S MOTION TO DISMISS (Dkt. No. 16)
The Court finds this motion appropriate for decision without oral argument. Fed.R.Civ.P. 78; Local Rule 7-15. Accordingly, the hearing date of March 2, 2015, is vacated, and the matter is hereby taken under submission. Furthermore, the parties' Stipulation to Continue Motion to Dismiss filed February 27, 2015 is thereby moot.
On November 20, 2014, plaintiff Alexander Leibman filed this lawsuit against defendant Alexander "Sasha" Prupes and Does 1 through 10. Dkt. No. 1. On January 15, 2015, plaintiff filed the operative First Amended Complaint ("FAC"). Dkt. No. 15. The gravamen of the FAC is that defendant, who was formerly in business with plaintiff, attempted to blackmail and extort money from plaintiff through threats that he would report plaintiff for tax fraud or evasion. Plaintiff asserts claims for civil blackmail and extortion, and for violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.
On February 2, 2015, defendant filed a motion to dismiss the FAC on the grounds that (1) the Court lacks subject matter jurisdiction over this action, (2) the Court lacks personal jurisdiction over defendant, and (3) plaintiff fails to state a claim. Dkt. No. 16. Plaintiff filed an opposition on February 9, 2015. Dkt. No. 20. Defendant replied on February 17, 2015. Dkt. No. 21. After considering the parties' arguments, the Court grants the motion to dismiss for the reasons that follow.
II. FACTUAL BACKGROUND
The FAC alleges the following facts, the truth of which the Court presumes for purposes of this motion only. Plaintiff, an individual, resided in Moscow, Russia from 2004 to November 2013, and has since resided in California. FAC ¶ 1. He invented a hair restoration formula, and owns medical clinics throughout the former Soviet Union. Id . Defendant was a dentist in the former Soviet Union, and now resides in new Jersey. Id . ¶ 2. The two men were formerly good friends. Id . ¶ 7.
In August 2013, plaintiff hired defendant in connection with a new medical clinic in Kiev, Ukraine. Id . ¶ 8. Defendant was paid a salary and reimbursed certain expenses, including room and board. Id . Plaintiff agreed to a 75/25 split of proceeds from the Kiev clinic, and agreed to invest up to $200, 000 in that clinic. Id . In February 2014, geopolitical unrest gripped Ukraine, causing plaintiff's investment to become a "total loss, " and putting defendant out of a job. Id . ¶ 9. Defendant took up residence in New Jersey in April 2014. Id . ¶ 10.
In the summer of 2014, plaintiff "considered retaining [defendant] for his services at another location in Moscow, " and "negotiated and discussed non-binding terms for the possibility of employing [defendant] at the Moscow facility." Id . ¶ 11. Plaintiff also, however, retained Russian legal counsel, who advised against retaining defendant on the grounds that he was not qualified and was not a Russian citizen. Id . ¶ 12. On August 21, 2014, plaintiff emailed defendant and stated: "Unfortunately, in the current situation, I cannot risk it and continue our business relationship." Id . ¶ 13 & Ex. 2. The email also read, "You can forget about the debt from Kiev." Id . Ex. 2.
On October 1, 2014, defendant sent plaintiff an email. Id . Ex. 3. This email expressed disappointment at being "fired, " and opined that the risks plaintiff had previously written about were not "real." Id . The email included the following accounting:
1. I received $30, 000 $8000 (interest) for three months of work in Moscow.
2. You deducted from my salary, as we agreed upon... about $8000. By the way for some reason you didn't keep me informed about the specific sums and I did not ask, presuming that you kept the books and I can always ask you.
3. Expense of the flight to Moscow $1000
4. Expense for food etc. in Moscow $2500 for three months
5. Expense for obtaining a visa in an American passport $560
6. Expense for obtaining a visa in a Canadian passport $980
7. Expenses (inevitable) during the stay in Kiev and Moscow 10 months × $3500 = $35, 000.
Id. Defendant wrote, "I understand that you also lost [money], and more than I did. But I lost money having practically eschewed other sources of income.... [A]lmost 3 years ago you invited me to a business discussion, ' offered me a job in Moscow with a salary of $25, 000 commission a month, and then after a couple of months, with clumsy excuses you declared that you changed your mind." Id . Defendant stated, "I believe that I deserve compensation for material and emotional damages." Id.
On October 11, 2014, defendant emailed plaintiff again, stating that he was "surprised by [plaintiff's] silence." Id . ¶ 14 & Ex. 4. Defendant wrote: "Until I receive your answer I do not want to undertake any actions, because there is no going back.... If you will not respond, I will take it to mean that this does not concern you and I can undertake whatever I see fit to defend my interests." Id.
That same day, plaintiff responded to defendant by email, stating: "Before you begin implementing your threats, I want you to understand that I do not plan to defend myself passively. Please weigh everything and think about who is in whose debt." Id . Ex. 5. Plaintiff alleges that these words were "to the effect that [defendant] was making unsupported threats and that [plaintiff] would not pay protection money to him." Id . ¶ 16.
Plaintiff alleges that on October 12, 2014, and thereafter, defendant "continued to write [plaintiff] long and threatening emails demanding a severance package.'" Id . ¶ 17. Plaintiff contends that on October 14, 2014, defendant "demanded $265, 000 from [plaintiff] in a threatening email if [defendant] were not immediately paid." Id . This email, as translated and attached to the FAC, states in its entirety:
I have tried to objectively assess my losses from that time in Florida when you offered me work in Moscow. As I have already written to you, not only did I not gain, but I lost. I believed in your earnest intent, I risked and I lost money. Unfortunately I could not manage these risks because everything was dependent upon you personally, except the revolution in Kiev of course. All that I was left to do for the duration of 30 months was to believe in your word and to conscientiously perform my work. Having arrived in Moscow, I obviously counted on being able to make up my losses in several years. Had I been able to work in Moscow for these same 30 months during which I earned nothing with a salary of $10000 per month 1%, it comes to about $400, 000 income that I would have earned in 5 years. You understand yourself that it is not a large amount of money for 5 years. But there was nothing left to do, except to "play to get losses back." And this is when you throw me out on the street, as they say, "without severance pay."
This is why I believe that I have a basis and right to seek justice by any means.
About the sum of the compensation I want to be maximally honest as well
1. I believe that you do not have to be responsible for the losses in Kiev. As far as I recall you spent $108, 000 minus approximately $8000 that you took out of my salary. When all is said and done neither you nor I built the barricades or stormed the Rada.
2. You paid me $30, 000 for 3 months, plus commissions of about $8000 (which I did not receive)
3. You paid me $5000 for the time when I went to the funeral.
All together, your expenditures come ...