United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
B. Zagel, United States District Judge.
the Court is Defendant Riyal's Motion to Dismiss For
Failure to State a Claim Pursuant to Fed.R.Civ.P. 12(b)(1),
12(b)(2), 12(b)(5), and 12(b)(6), combined pursuant to
Fed.R.Civ.P. 12(g). For the following reasons,
Defendant's Motion is granted.
Exeed Industries is a limited liability company incorporated
and based in the United Arab Emirates (“UAE”),
where it specializes in industrial building materials,
agriculture, and international industrial investments.
Plaintiff Exeed Electrocab is Exeed Industries'
subsidiary, likewise incorporated in the UAE.
Mohamed Fayyad Al-Hassan Riyal is the father-in-law of
Defendant Omar Younis, who, along with his brother, Defendant
Mohammed Younis, are former employees of Exeed Electrocab.
Plaintiffs have sued the brothers as well as Riyal and the
Younis family's co-owned company Wabel International,
which is based in Jordan (collectively
“Defendants”). However only the first
count-violation of the RICO statute-applies to Defendant
January 2, 2015, Plaintiffs filed their complaint in this
court, alleging violations of the Racketeer Influenced and
Corrupt Organizations Act (“RICO”) by Riyal and
the Younis brothers. Plaintiffs allege that Riyal's role
was to act as a fraudulent “agent” during
supplier agreements, to transfer the proceeds derived from an
illegal kickback scheme in and out of the United States by
use of his bank account, and to assist Defendants Mohammed
and Omar Younis in purchasing real estate using these illegal
to Plaintiffs, Defendants set up a secret illegal kickback
scheme no later than July 2005 while the two brothers were
employed by Exeed. In furtherance of the scheme, Defendants
allegedly inflated contract prices and duped some of
Plaintiff's suppliers into paying fraudulent invoices. In
some cases, payments were made directly to the Younis
brothers; in others, they were either made to their company
Wabel International, with Defendant Riyal at times falsely
acting as an “agent” of the company, or to a
nonexistent company, “Mohamed Riyal Engineering and
Marketing Consulting Co.” (“MREMC”).
Plaintiffs allege that payments made to MREMC were actually
made to Riyal's personal bank account, as were some of
the payments supposedly made to Wabel. On several occasions,
these payments were made via wire transfer from suppliers
with offices in the U.S., and two of the transfers originated
from banks in Chicago. Plaintiffs allege that the total
amount of illegal proceeds deposited into Riyal's account
exceeded 15 million dollars.
allege that in 2006, some of the illegal proceeds deposited
in Defendant Riyal's account were moved via wire transfer
into U.S. bank accounts that were ultimately used by
Defendant Omar Younis to purchase land in California and
Illinois. Although Defendants Omar Younis and Mohammed Younis
are now alleged to live in the United States, Defendant Riyal
is believed to reside in Jordan.
April 8, 2015, this Court authorized email service on Riyal
pursuant to Federal Rule of Civil Procedure 4(f)(3).
Plaintiffs attempted to provide Riyal with service of process
via an email address obtained from Defendant Omar Younis;
however, they received a response that the email could not be
delivered to that address. After engaging in limited
discovery, Plaintiffs obtained a different email address for
Riyal from Defendant Omar Younis, which they used to
successfully serve Riyal on September 24, 2015.
Plaintiffs' Motion to Deem Service Effective was granted
on June 1, 2016.
Riyal filed a motion to dismiss Count I of Plaintiff's
Amended Complaint on August 12, 2016 based on several
theories. First Riyal argues that this Court lacks personal
jurisdiction over Riyal because he lacks sufficient contacts
with Illinois to establish either general or specific
personal jurisdiction, and thus Count I must be dismissed
under Rule 12(b)(2). Second, Riyal argues that service of
process on Riyal was inadequate, and thus Count I must be
dismissed under Rule 12(b)(5). Third, he argues that the
Amended Complaint does not allege a domestic injury as
required under RJR Nabisco, Inc. v. European
Cmty., 136 S.Ct. 2090, 2111 (2016) and thus Count I must
be dismissed under Rules 12(b)(1) and 12(b)(6). Because
Defendant's third argument is dispositive, I will begin
motion under Federal Rule of Civil Procedure 12(b)(6)
“challenges the sufficiency of the complaint to state a
claim upon which relief may be granted.” Hallinan
v. Fraternal Order of Police of Chi. Lodge No. 7, 570
F.3d 811, 820 (7th Cir. 2009). When reviewing a Rule 12(b)(6)
motion to dismiss, the Court accepts as true all well-pleaded
factual allegations in the complaint and draws all reasonable
inferences in the non-movant's favor. Erickson v.
Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d
1081 (2007) (citing Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).
motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(1) asks the court to dismiss an action
over which it allegedly lacks subject matter jurisdiction.
Fed.R.Civ.P. 12(b)(1). “The burden of proof on a
12(b)(1) issue is on the party asserting jurisdiction.”
United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d
942, 946 (7th Cir.2003), overruled on other grounds by
Minn-Chem, Inc. v. Agrium, Inc.,683 F.3d 845 (7th
Cir.2012). All reasonable inferences are drawn in favor of
the plaintiff, and all well-pleaded allegations are accepted
as true. Long v. Shorebank Dev. Corp.,182 F.3d 548,
554 (7th Cir.1999). Finally, when considering a
Rule 12(b)(1) motion to dismiss, the ...