Unigestion Holdings, S.A. v. UPM Tech., Inc.

412 F.Supp.3d 1273

UNIGESTION HOLDINGS, S.A. d/b/a Digicel Haiti, Plaintiff and Counterclaim-Defendant,

v.UPM TECHNOLOGY, INC. d/b/a UPM Telecom, Inc. and UPM Marketing, Inc.; UPM Telecom, Inc.; UPM Marketing, Inc.; Benjamin Sanchez a/k/a Benjamin Sanchez Murillo; Baltazar Ruiz; Tyler Allen; and Duy "Bruce" Tran, Defendants and Counterclaim-Plaintiffs,

v.Digicel USA, Inc., Additional Counterclaim Defendant.

Case No. 3:15-cv-185-SI

United States District Court, D. Oregon.

Signed September 3, 2019

Richard K. Hansen and Anne M. Talcott, Schwabe, Williamson & Wyatt, 1211 SW Fifth Ave, Suite 1600, Portland, OR 97204; Robert C.L. Vaughan, Cherine Smith Valbrun, and Leah B. Storie, Kim Vaughan Lerner LLP, One Financial Plaza, Suite 2001, Fort Lauderdale, FL 33394. Of Attorneys for Plaintiff, Counterclaim-Defendant, and Additional Counterclaim-Defendant.

Kathryn P. Salyer and Eleanor A. DuBay, Tomasi Salyer Baroway, 121 SW Morrison Street, Suite 1850, Portland, OR 97204; Christopher W. Savage, Davis Wright Tremaine, LLP, 1919 Pennsylvania Ave. NW, Suite 800, Washington, D.C. 20006. Of Attorneys for Defendants and Counterclaim-Plaintiffs.

OPINION AND ORDER

Michael H. Simon, District Judge.

Plaintiff Unigestion Holding, S.A. dba "Digicel Haiti" ("Digicel Haiti") provides mobile telecommunication services in Haiti. Defendants (collectively, "UPM") formerly provided mobile telecommunication services to Haiti. Digicel Haiti alleges that UPM provided these services by using certain practices and technologies fraudulently to access Digicel Haiti's telecommunications network in Haiti. In its Second Amended Complaint ("SAC"), Digicel Haiti alleges violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") under 18 U.S.C. §§ 1962(b) - (d), common law fraud, conversion, and unjust enrichment. ECF 104. In UPM's Second Amended Answer ("SAA"), UPM asserts counterclaims, alleging violations of §§ 201 and 202 of the Communications Act of 1934 under 47 U.S.C. § 151 et seq. , breach of implied-in-fact contract, money had and received, conversion, unjust enrichment, intentional interference with prospective advantage, and monopolization and attempted monopolization in violation of § 2 of the Sherman Act under 15 U.S.C. § 2. ECF 158. Two motions are pending before the Court. The first is Digicel Haiti's motion to dismiss UPM's antitrust counterclaim. ECF 162. The second is UPM's motion to dismiss Digicel Haiti's RICO claims. ECF 178. For the following reasons, both motions are granted.

STANDARDS

A. Motion to Dismiss Under Rule 12(b)(6)

A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc. , 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co. , 668 F.3d 1136, 1140 (9th Cir. 2012) ; Daniels-Hall v. Nat'l Educ. Ass'n , 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint "may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca , 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution , 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal , 556 U.S. 662, 678-79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

A complaint must contain sufficient factual allegations to "plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Starr , 652 F.3d at 1216. "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." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

B. Motion for Judgment on the Pleadings Under Rule 12(c)

"Analysis under Rule 12(c) is ‘substantially identical’ to analysis under Rule 12(b)(6) because, under both rules, a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy." Pit River Tribe v. Bureau of Land Mgmt. , 793 F.3d 1147, 1155 (9th Cir. 2015) (quoting Chavez v. United States , 683 F.3d 1102, 1108 (9th Cir. 2012) ). Dismissal for failure to state a claim under Rule 12(b)(6) "is proper if there is a ‘lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.’ " Conservation Force v. Salazar , 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balistreri v. Pacifica Police Dep't , 901 F.2d 696, 699 (9th Cir.1988) ). In addition, "to survive a motion to dismiss, a complaint must contain sufficient factual matter to state a facially plausible claim to relief." Shroyer v. New Cingular Wireless Services, Inc. , 622 F.3d 1035, 1041 (9th Cir. 2010) (citing Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ); see also Cafasso, United States ex rel. v. Gen. Dynamics C4 Sys., Inc. , 637 F.3d 1047, 1054 n.4 (9th Cir. 2011) ( Iqbal standard applies to review of Rule 12(c) motions).

BACKGROUND

For purposes of Digicel Haiti's motion to dismiss UPM's antitrust counterclaim, the Court accepts as true the well pleaded facts alleged by UPM in its counterclaim. In addition, certain allegations from Plaintiff's SAC are included as background. In deciding Digicel Haiti's motion to dismiss, the Court gives no presumption of truth to Digicel Haiti's allegations in the SAC, except where UPM's antitrust counterclaim endorses or relies upon Digicel Haiti's allegations. For purposes of UPM's motion to dismiss Digicel Haiti's RICO claims, the Court accepts as true the well-pleaded facts alleged by Digicel Haiti in its SAC.

A. Digicel Haiti

Digicel Haiti is a wholly owned subsidiary of Digicel Holdings, Ltd., which also owns Additional Counterclaim Defendant Digicel USA, Inc. ("Digicel USA") and Digicel Jamaica, Ltd. ("Digicel Jamaica"). Digicel Haiti is the leading provider of telecommunications services in Haiti, where it solely operates and has an estimated market share of between 75 and 90 percent of local telephone service in Haiti. SAA, ¶ 250 (ECF 158 at 29). Digicel USA operates a set of international telephone switching systems—equipment with the capacity to transmit a call from the United States to an overseas telecommunications network—located in Miami, Florida and New York City, New York.

Digicel Haiti tracks and charges its local customers in Haiti through the use of pre-paid Subscriber Identity Module ("SIM") cards. A SIM card acts as a small circuit board. When the card is placed inside a cellular telephone, the card identifies the device as associated with an individual customer's unique telephone number and account. SIM cards allow customers to access Digicel Haiti's cellular network and, in turn, allow Digicel Haiti to charge for communications made from cellular devices containing specific SIM cards. Digicel Haiti's customers use these SIM cards for voice, data, and messaging services on the Digicel Haiti network. Digicel Haiti's customers can add credits, in the form of minutes, to their SIM cards by using, among other methods, vouchers and online "top-ups."

When a user of a Digicel Haiti SIM card makes a local call within Haiti, that user incurs charges of approximately $0.09 per minute of wireless service. If a Digicel Haiti customer travels to the United States and uses his or her Digicel Haiti SIM card to make calls back to Haiti, the user of that SIM card generally incurs charges of at least $1.99 for each minute of wireless service used. Digicel Haiti also offers a Roam-Like-You're-Home ("RLYH") pricing plan. For a monthly access fee of approximately $20 to $25, the RLYH plan allows registered Digicel Haiti customers to call back to Haiti while traveling in the United States at rates similar to the local rate in Haiti during the authorized, pre-paid period.

When someone in the United States not registered on a Digicel Haiti RLYH plan originates a call to one of Digicel Haiti's subscribers in Haiti, a "third-party carrier"—typically, a United States telecommunications carrier, which does not have the internal capacity to transport a call to Haiti, also sometimes referred to as a "wholesaler"—picks up that telephone call from the United States-based originating caller and transports it to one of the Digicel USA switching gateways. From that switching gateway, Digicel USA picks up the call and transports it to Haiti, where Digicel Haiti "terminates" the call on its local network in Haiti. The terminating end of a call is the party being called by the party originating the call. On Digicel Haiti's behalf, Digicel Jamaica bills the third-party carrier at the rate of $0.23 per minute for international calls that terminate on Digicel Haiti's network. That fee includes the cost of terminating the call on Digicel Haiti's network and the cost of switching services performed by Digicel USA. Digicel Haiti then pays Digicel USA a fee for its services through an intercompany transfer. Digicel Haiti does not authorize international or domestic telephone traffic to enter its telecommunications network in Haiti by any other route or under any other form of agreement.

B. UPM

UPM is an Oregon...