Andreo v. Friedlander, Gaines, Cohen, Rosenthal & Rosenberg

Summary

The court addresses motions for summary judgment, judgment on the pleadings, and dismissal in a dispute arising from allegedly fraudulent private placements of limited partnership interests in satellite communication facilities. It treats the motion as one for judgment on the pleadings and analyzes the sufficiency of the plaintiffs’ securities fraud aiding-and-abetting claims, RICO claims, statute of limitations arguments, and state-law claims against a law firm. The court concludes that the amended complaint adequately pleads securities fraud aiding and abetting under a recklessness standard but does not sufficiently plead the law firm’s participation in or conspiracy to violate RICO.

Holdings

1. The motion was properly treated as a motion for judgment on the pleadings rather than as a motion for summary judgment or an untimely Rule 12(b)(6) motion.
2. The amended complaint adequately stated an aiding-and-abetting securities-fraud claim against Friedlander Gaines under Rule 9(b).
3. The amended complaint did not state a RICO claim against Friedlander Gaines under 18 U.S.C. § 1962(c).
4. The amended complaint did not adequately state a RICO-conspiracy claim against Friedlander Gaines.
5. The federal and state claims were not subject to dismissal on statute-of-limitations grounds at the pleading stage because the allegations of fraudulent concealment sufficiently invoked equitable tolling.
6. The amended complaint adequately stated a breach-of-contract claim based on plaintiffs' alleged status as intended third-party beneficiaries of the contract between Rabin and Friedlander Gaines.
7. CUTPA does not apply to the purchase and sale of securities, so the CUTPA claim was dismissed.
8. The court retained the state-law claims because the amended complaint stated a federal cause of action and the state claims arose from the same occurrences.
9. Under binding Second Circuit precedent, section 17(a) of the Securities Act of 1933 provides a private right of action.

Questions Presented

1. Whether the motion should be treated as one for summary judgment, dismissal under Rule 12(b)(6), or judgment on the pleadings.
2. Whether the amended complaint pleaded an aiding-and-abetting securities-fraud claim against Friedlander Gaines with the particularity required by Rule 9(b).
3. Whether the amended complaint adequately alleged that Friedlander Gaines conducted or participated in a RICO enterprise under 18 U.S.C. § 1962(c).
4. Whether the amended complaint adequately alleged a RICO conspiracy under 18 U.S.C. § 1962(d).
5. Whether the statute of limitations barred the federal and state claims.
6. Whether the amended complaint stated a Connecticut third-party-beneficiary breach-of-contract claim.
7. Whether CUTPA applies to claims arising from the purchase and sale of securities.
8. Whether the court should retain pendent state-law claims.
9. Whether section 17(a) of the Securities Act of 1933 provides a private right of action in the Second Circuit.

Disposition

other