their grain in Madison County or the counties contiguous with it, Oberbeck did not solicit business from these plaintiffs, and Oberbeck maintained commodity customer trading accounts with brokers in St. Louis, Missouri and Bloomington, Illinois. Oberbeck characterizes this affidavit as proving that Oberbeck neither resides in nor has transacted business in this district. It admits in its reply memorandum, however, that its brokers entered trades for its account through the Chicago Board of Trade.
We note that Oberbeck elected to submit the Luitjohan affidavit with its reply brief, despite the fact that it argued venue was improper in its motion to dismiss. This prevented the plaintiffs from responding to the affidavit. Arguments may not be presented for the first time in a reply brief. See Kastel v. Winnetka Board of Education, 946 F. Supp. 1329, 1335 (N.D. Ill. 1996). Nevertheless, we will consider the affidavit as Oberbeck raised its venue argument in its motion to dismiss, despite the fact that Oberbeck's strategy in submitting the affidavit with its reply memorandum prevented the plaintiffs from submitting an affidavit in opposition.
This leaves the court with: (1) a complaint which fails to allege that Oberbeck "is found, resides, or transacts business" in this judicial district or that "any act or transaction constituting the violation" occurred in this district, as required by 7 U.S.C. § 25(c); (2) an assertion in the plaintiffs' opposition to the motion to dismiss that Oberbeck engaged in futures trading before the Chicago Board of Trade; (3) Oberbeck's affidavit denying that it transacted business in this judicial district; and (4) Oberbeck's admission in its reply memorandum that its brokers, who are located outside this judicial district, entered trades for Oberbeck's account with the Chicago Board of Trade.
The plaintiff bears the burden of establishing that venue is proper. See, e.g., Zughni v. Pena, 851 F. Supp. 300, 302 (N.D. Ill. 1994). On a motion to dismiss for improper venue under Rule 12(b)(3), a court takes all allegations in the complaint as true, unless contradicted by the defendant's affidavits. Id. A court may also examine facts outside the complaint in order to determine whether venue is proper. Karlberg European Tanspa, Inc. v. JK- Josef Kratz Vertriebsgeselischaft MbH, 699 F. Supp. 669, 670 (N.D. Ill. 1988). When ruling on a motion to dismiss under Rule 12(b)(3), the court must resolve the factual conflicts in the parties' submissions in favor of the plaintiff and draw any reasonable inferences from those facts in the plaintiff's favor. National Hydro Systems v. Summit Constructors, Inc., 731 F. Supp. 264, 265 (N.D. Ill. 1989).
The plaintiffs have failed to establish that venue over Oberbeck is proper, as the venue allegations in the complaint do not even mention Oberbeck. In the Luitjohan affidavit, Oberbeck denies that venue in this district is improper. In contrast with the statements in the Luitjohan affidavit, however, Oberbeck concedes in its reply memorandum that its brokers entered trades for Oberbeck's account with the Chicago Board of Trade. In other words, Oberbeck concedes that its agents conducted trades on its behalf in Chicago. These facts convince the court that, while the plaintiffs' complaint may not properly allege venue as to Oberbeck, the plaintiffs should have an opportunity fully and fairly to present their contentions regarding venue as to Oberbeck. Accordingly, Oberbeck's motion to dismiss for lack of venue is granted, with leave for the plaintiffs to replead within 28 days of the date of the entry of this order.
3. Plaintiffs' State Law Claims
Oberbeck argues that jurisdiction over the plaintiffs' state law claims is improper because the court lacks jurisdiction over the plaintiffs' federal claims under the Commodities Exchange Act. Because the court cannot fully address whether subject matter jurisdiction is proper at this time, Oberbeck's motion to dismiss the plaintiffs' supplemental state law claims due to lack of federal jurisdiction is denied without prejudice.
Oberbeck also raises a host of conclusory challenges to the plaintiffs' pleading of their state law claims. These arguments feature sweeping criticisms of the plaintiffs and their complaint but do not include any citations to authority or specific discussion of the state claims' alleged flaws. Because this portion of Oberbeck's motion to dismiss is deficient, it is denied without prejudice.
B. ADMIS's Motion to Dismiss All Claims in Plaintiffs' Consolidated Complaint
With respect to ADMIS, the plaintiffs have alleged claims under RICO (Counts I, II, and III), the Commodities Exchange Act (Counts IV - VI), and the Illinois Consumer Fraud and Deceptive Practices Act (Count VIII). They also include counts for breach of fiduciary duty (Counts X, XV - XVI) and fraud (Count XII). ADMIS seeks dismissal of these claims under Fed. R. Civ. P. 8, 9(b) and/or 12(b)(6). For the reasons set forth below, we grant ADMIS' motion to dismiss the plaintiffs' complaint pursuant to Fed. R. Civ. P. 8, but deny the motion insofar as it seeks dismissal with prejudice. We note that, in the interests of clarity, we are striking the entire complaint as striking the portions relating to ADMIS would not further the goal of improving the complaint's lucidity.
As discussed above, the decision to strike the complaint means that we cannot resolve the threshold question of whether hedge-to-arrive-contracts are cash forward or futures contracts at this time. The plaintiffs and defendants disagree on this point, which is critical as cash forward contracts are outside the ambit of the Commodity Exchange Act. See 7 U.S.C. § 1a(11). Thus, a finding that the hedge-to-arrive contracts are cash forward contracts would warrant dismissal of all of the plaintiffs' Commodity Exchange Acts claims. Resolution of this issue, however, requires consideration of the factual allegations in the plaintiffs' complaint as well as the parties' arguments. Because the court has stricken the plaintiffs' complaint, determination of this issue will have to wait for another day.
To set the stage for our discussion of Rule 8 and the complaint, we provide the following summary of the arguments advanced by ADMIS regarding the complaint's alleged shortcomings:
. First, ADMIS argues that the plaintiffs' complaint violates Fed. R. Civ. P. 8 because it is confusing and prolix.
. Second, ADMIS argues that the plaintiffs' complaint violates Fed. R. Civ. P. 9 because it is conclusory and fails to specify the actions taken by the various defendants.