13 22131 018 Motion to Dismiss Amended Complaint

7/22/2019 13 22131 018 Motion to Dismiss Amended Complaint

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO. 1:13-cv-22131-JLK

SEGUROS UNIVERSALES, S.A., a Guatemalananonymous society, FIANZAS UNIVERSALES,S.A. n/k/a ASEGURADORA FIDELIS, S.A., aGuatemalan anonymous society, and ORDENADORES,S.A., a Guatemalan anonymous society,

Plaintiffs,v.

MICROSOFT CORPORATION, a Washington

corporation,

Defendant.

_______________________________________/

MICROSOFT CORPORATIONS MOTION TO DISMISS

FIRST AMENDED COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF

Pursuant to Federal Rule of Civil Procedure 12(b)(6), Defendant Microsoft Corporation

(Microsoft) hereby moves for an Order dismissing the First Amended Complaint for Damages

and Injunctive Relief1 (the Amended Complaint) filed by Plaintiffs, Seguros Universales, S.A.

(Seguros), Fianzas Universales, S.A. n/k/a Aseguradora Fidelis, S.A. (Fianzas), and

Ordenadores, S.A. (Ordenadores) (collectively, the Plaintiffs), [D.E. 13]. In support of its

Motion, Microsoft submits the following Memorandum of Law.

MEMORANDUM OF LAW

I. INTRODUCTIONOn August 26, 2013, Plaintiffs filed an Amended Complaint in lieu of responding to

Microsofts motion to dismiss Plaintiffs initial complaint (the First Motion to Dismiss). As

with the initial complaint, the Amended Complaint should be dismissed. While Plaintiffs have

wisely abandoned their meritless claims of constructive fraud and abuse of process, they persist

1 While purporting to seek preliminary and permanent injunctions, Plaintiffs wholly fail toplead any of the traditional factors for injunctive relief, or, much less, any facts necessary tosupport it. Among other things, Plaintiffs do not because they cannot plead the existence ofany clear right currently in need of protection, or any pending dispute between the parties thatcould or should be enjoined. See Harry v. Wagner, 2013 WL 4648318, at *4 (M.D. Fla. 2013).

Case 1:13-cv-22131-JLK Document 18 Entered on FLSD Docket 09/20/2013 Page 1 of 33


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in attempting to unwind Microsofts enforcement of its intellectual property rights through the

legal process of Guatemala and recast those proceedings as an illegal enterprise under the

Racketeer Influenced and Corrupt Organizations (RICO) Act, 18 U.S.C. 1964, et seq. (Count

I). Plaintiffs also have added a new and baseless cause of action for fraud (Count II).

Despite their modest reworking, Plaintiffs core allegations are the same. Plaintiffs allege

that Microsoft submitted false or fraudulent sworn declarations to the Guatemalan

Fiscalia de Seccin de Delitos Contra La Propiedad Intelectual, (hereinafter referred to as the

Guatemalan Special Prosecutor), and thereby commenced an action in Guatemala that resulted

in a seizure order from a Guatemalan court (the Guatemalan Seizure Action). Plaintiffs

further assert that Microsoft relied on the Guatemalan Seizure Action to extort payments and

other concessions from Plaintiffs in Guatemala. Plaintiffs still cannot plead around the fact that,

as pointed out in Microsofts First Motion to Dismiss, this case has little, if anything, to do with

the United States or, much less, with the State of Florida. It has everything to do with

Guatemala. Just like in their initial complaint, Plaintiffs fail to acknowledge that they previously

entered into a written settlement agreement with Microsoft (the Settlement Agreement),

pursuant to which they released Microsoft from all claims asserted in this lawsuit.2 In the final

analysis, the Amended Complaint still rests on implausible allegations that are flatly contradicted

by the documents attached to or incorporated by reference in the Amended Complaint. The Court

should dismiss the Amended Complaint with prejudice for the following reasons.

First, as previously noted, by virtue of the clear and unambiguous terms of the Settlement

Agreement, Plaintiffs released Microsoft from any and all claims arising out of or relating to the

Guatemalan Seizure Action, including the claims asserted in this lawsuit.

Second, by indiscriminately asserting, as the core bases underlying all of their claims, that

Microsoft filed false declarations with the Guatemalan Special Prosecutor to secure a seizure

order from a Guatemalan court and conduct a fraudulent raid of Plaintiffs business offices

with the aid of Guatemalan law enforcement officers, Plaintiffs effectively ask this Court to

adjudicate and question the integrity and viability of Guatemalan judicial and governmental

proceedings. The Court should not accept the invitation to substitute its own judgment for that of

another sovereign nation with a paramount interest in regulating conduct within its territory, and

2 A true and correct copy of the Settlement Agreement, along with a certified English translation,is attached hereto as Exhibit A.



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resolving matters arising under its laws and litigated in its courts. The Court therefore should

dismiss the Amended Complaint under the doctrine offorum non conveniens, principles of

international comity, and/or the act of state doctrine.

Third, RICO does not apply extraterritorially to claims that involve a foreign RICO

enterprise and foreign predicate acts of racketeering activity. The Amended Complaint

alleges that: (i) Microsoft appears to operate in Guatemala through a foreign corporate

vehicle, i.e. Microsoft de Guatemala S.A. (Microsoft Guatemala);3 (ii) the alleged RICO

enterprise is foreign; and (iii) the alleged predicate acts of racketeering, i.e. the filing of

false declarations in the Guatemalan Seizure Action to extort a payment of US$70,000 (the

Settlement Payment) from Plaintiffs, occurred onforeign soil. The fact that Plaintiffs amended

their pleading to try and enhance the role purportedly played by the U.S. entity, Microsoft

Corporation (as compared to that of Microsoft Guatemala) in the alleged fraudulent scheme,

does not alter the undeniably foreign character of the RICO claim. The alleged fraudulent

scheme remains overwhelmingly extraterritorial. The fact that the companys global anti-piracy

software policies may have originated in the United States, does not transform an extraterritorial

claim into a domestic claim, or, much less, into an actionable claim under the RICO statute.

Fourth, the Amended Complaint, on its face, contradicts the factual foundation upon

which Plaintiffs claims purport to be based, namely, that Microsoft had no legitimate or lawful

basis to file a copyright infringement complaint against Plaintiffs with the Guatemalan Special

Prosecutor, or request that the Guatemalan Special Prosecutor seek the issuance of a seizure

order by the Guatemala court. Specifically, Plaintiffs concede that, more than sixteen (16)

months after the issuance of the seizure order, they still cannot document valid licenses for all

of the Microsoft software operated on their computers. Therefore, Plaintiffs claims that

Microsofts enforcement of the seizure order constitutes a RICO enterprise (Count I); was

fraudulent (Count II); or unjustly enriched Microsoft (Count III), are implausible. The

Amended Complaint should be dismissed with prejudice on that basis, as well.

To the extent the Court is not inclined to dismiss the Amended Complaint with prejudice

on the foregoing bases, there are still other grounds for dismissal:

The RICO and fraud claims (Counts I and II) fail, because Plaintiffs allegationsconcerning Microsofts predicate acts of racketeering activity and other unsubstantiated

3 See Am. Complaint, 29, 43 (alleging that Microsoft appears to operate in Guatemalathrough Microsoft Guatemala).



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acts of fraud, lack the requisite particularity under the controlling case law and Rule9(b) of the Federal Rules of Civil Procedure.

Finally, the Unjust Enrichment claim (Count III) should be dismissed, because, asdescribed in greater detail below, Plaintiffs fail to adequately plead duress underFlorida law or Guatemalan law. Accordingly, there is no basis to invalidate the

Settlement Agreement or find that it unjustly enriched Microsoft at Plaintiffs expense.

II. BACKGROUND

This case is about software infringement and the protection of intellectual property rights

in Guatemala.4 Plaintiffs assert that, [t]o aid in the conduct of their businesses, they installed

and operated Microsoft software, such as Windows, Word, Excel, Publisher, and Outlook, in

their business offices in Guatemala.5 Between 2008 and 2012, Seguros and Fianzas admit to

receiving documentation about Microsoft software infringement violations.6 One such document,

titled Impact of Software Piracy in Guatemala and Benefits of Correctly Handling Software

Assets at the Company (the Software Piracy Letter) and dated June 9, 2008, is attached to the

Amended Complaint.7 The Software Piracy Letter states that [c]opying computer programs

without . . . authorization infringes upon software ownership rights, which are expressly

recognized by Guatemalan law and international treaties of which Guatemala is a party.8

On or about March 7, 2012, Microsoft filed a criminal complaint with the Guatemalan

Special Prosecutor,9 in which it alleged that certain Microsoft software, without a license for

4See Am. Complaint, 13, 16, 24-25, 28; Exhibits to Complaint.5See Am. Complaint, 11.6 Am. Complaint, 18-19.7See Am. Complaint [D.E. 13-3, p. 3].8 Am. Complaint, [D.E. 13-3, p. 3].9Am. Complaint, [D.E. 13-1, pp. 2-30]. In the Amended Complaint, Plaintiffs purport to providewritten notice to Microsoft of certain issues of Guatemalan law pursuant to Rule 44.1, Fed. R.Civ. P. See Am. Complaint, [D.E. 13-1, pp. 8, 15]. Accordingly, Microsoft is compelled toaddress those issues and, together with its Motion, submits the sworn declaration of itsGuatemalan legal expert, Alfredo Skinner-Kle (the Skinner-Kle Declaration or Skinner-Kle Decl.). (The Skinner-Kle Declaration is attached hereto as Exhibit B.) As described inthe Skinner-Kle Declaration, Guatemalan law provides for both criminal and civil copyrightinfringement actions. The Guatemalan Special Prosecutor is responsible for prosecuting criminalcopyright infringement actions. However, the owner of a copyright, such as Microsoft, may file acomplaint requesting that the Guatemalan Special Prosecutor initiate a criminal proceedingagainst an infringing party (which is precisely what Microsoft did, in this case, when it filed theaforementioned criminal complaint, on or about March 7, 2012). If the Guatemalan SpecialProsecutor determines the complaint filed by a copyright owner has merit, he must request theissuance of a court order authorizing him to take any ex parte, precautionary remedial measure



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use[,] [was] being utilized at the business address of one of the Plaintiffs. 10 The criminal

complaint requested the issuance of an order by a Guatemalan court of competent jurisdiction to

search the business premises of the plaintiff and seize and confiscate any computer

equipment and/or media being used to reproduce or illegally store Microsoft software

without authorization.11 In addition, the criminal complaint requested that the Guatemalan

Special Prosecutor be appointed as bailee to store all computer equipment confiscated.12

On or about March 20, 2012, Microsofts legal counsel in Guatemala filed a declaration

amending the criminal complaint to reflect that two Plaintiffs, Seguros Universales, Sociedad

Annima, and Fianzas Universales, Sociedad Annima, operated at the address referenced in

the criminal complaint.13 The declaration also attached the Software Piracy Letter14 and noted:

I am also attaching a copy of a letter [i.e., the Software Piracy Letter] received

from ELDER GUERRA, TECHNOLOGY MANAGER at those entities [i.e.,Seguros and Fianzas], in which they were asked to reduce computer and legalrisks of using software without a license. [The letter] gave notice that [such use] isa crime under our laws, with consequences of up to four years of jail andsignificant fines and indemnities for each illegal software [program] found. Thatassistance was offered for free. He was also requested to begin the process ofcorrecting all existing irregularities. However, despite having provided sufficienttime to make the corrections, no positive response was received from them [i.e.,Seguros and Fianzas], and they continue to use software belonging to MicrosoftCorporation without the respective use license.15

On or about March 26, 2012, Microsoft made another filing with the Guatemalan Special

Prosecutor, which included additional evidence of infringement by Plaintiffs.16 On or about April

26, 2012, Microsoft added the third plaintiff, Ordenadores, to the criminal complaint.17

On or about April 27, 2012, the Second District Court for Criminal, Narcotics and

necessary to safeguard the rights of the copyright owner. The Guatemalan Special Prosecutormay enlist the aid of the local police to implement those measures. See Skinner-Kle Decl., 14.As described below, on or about April 27, 2012, the Guatemalan Special Prosecutor secured anorder from a Guatemalan court authorizing an audit of Plaintiffs business premises, and theseizure of any evidence of copyright infringement by Plaintiffs.10 Am. Complaint, [D.E. 13-1, p. 4].11 Am. Complaint, [D.E. 13-1, p. 10].12 Am. Complaint, [D.E. 13-1, p. 10].13 Am. Complaint, [D.E. 13-2, p. 3].14 Am. Complaint, [D.E. 13-2, p. 7].15 Am. Complaint, [D.E. 13-2, p. 3].16 Am. Complaint, [D.E. 13-4, p. 5].17 Am. Complaint, 34.



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Environmental Crimes in and for the Municipal District of Guatemala City (the Guatemalan

Criminal Court) entered an order authorizing the Guatemalan Special Prosecutor and its

authorized agents to conduct a physical inspection and audit of the computer hardware located

at Plaintiffs business offices (the Guatemalan Seizure Action).18 The audit was conducted

that same day.19 Plaintiffs allege that Microsofts representatives appeared with armed

Guatemalan law enforcement officers, halted Plaintiffs business operations, extorted a

settlement payment of US$70,000, and coerced Plaintiffs to accept the terms of the Settlement

Agreement, which they allege was executed by their authorized representative under duress.20

Contrary to Plaintiffs allegations of coercion and duress, the Settlement Agreement

actually states: [B]y means ofmutual concessions, we have decided by common agreement to

avoid any kind of litigation that to date may have arisen...acknowledging...that MICROSOFT

CORPORATION is the holder of copyright to the computer software...which the entity known as

SEGUROS...and related companies21 recognize and accept as valid.22 The Settlement

Agreement continues: The entity known as SEGUROSand related companies will pay THE

HOLDERS [i.e., Microsoft] the total sum of...($70000.00) as COMPENSATORY DAMAGES,

EXPENSES AND COURT COSTS that might to date have resulted from the unlicensed use of

the following software.23 Seguros also agree[d] to pay any taxes generated as a result of this

settlement.24 Moreover, Plaintiffs agreed to come into compliance with the copyright laws,

operate Microsoft software legally, and submit copies of the licenses and invoices for the

legalization of the software in use by July 27, 2012. 25 The Settlement Agreement sets forth

specific terms and conditions for legalizing and validating the software in question.26

By virtue of Plaintiffs obligations under the Settlement Agreement, Microsoft agree[d]

18See Settlement Agreement, p. 2, ONE.RECITALS; p. 6, FIVE.

19See Settlement Agreement, p. 2, ONE.RECITALS.20 Am.Complaint, 37-40, 43-45, 65, 73, 79-80, 83.21 Plaintiffs concede that Fianzas is Seguros affiliate and that Ordenadores are both Segurosand Fianzas affiliate. Am. Complaint, 9-10. For instance, Plaintiffs admit thatOrdenadores provides internal information and telecommunication services to Plaintiffs and isthe title holder of Plaintiffs computer servers. Am. Complaint, 10.22 Settlement Agreement, p. 3, TWO.SETTLEMENT (emphasis in original).23 Settlement Agreement, p. 3, TWO.SETTLEMENT (emphasis added). The $70,000.00 sumwas to be paid in four (4) installments of $17,500.00 each.Id.24 Settlement Agreement, p. 3, TWO.SETTLEMENT.25 Settlement Agreement, pp. 4-5, TWO.SETTLEMENT.26 Settlement Agreement, p. 5, THREE.



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to discontinue the legal actions brought and to not bring others of a civil, criminal or any other

nature resulting from the Proceedings filed against THE RESPONDENTS on the twenty-seventh

of April of the current year, as the result of any other type of activity it may have carried out

prior hereto.27 In view of these and other provisions, including general releases of liability, the

Settlement Agreement was signed by the parties, following a complete reading of the text

[therein], being duly acquainted with the content, purpose, validity and other legal effects

thereof.28 Notwithstanding the terms of the Settlement Agreement, on June 14, 2013, Plaintiffs

filed their initial complaint in this action.

III.FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) STANDARDIn order to withstand a motion to dismiss under Rule 12(b)(6), a complaint must contain

sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. 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.29 A

complaints allegations must be enough to raise a right to relief above the speculative level.30

IV. ARGUMENT

A. Plaintiffs Claims Are Barred by the Settlement Agreement.1. The Court May Consider the Settlement Agreement in Deciding the Motion.

In deciding a motion to dismiss, the Courts review is limited to the four corners of the

operative complaint and any documents referred to therein that are central to the claims at

issue.31 Stated differently, where a plaintiff refers to certain documents in the complaint, and

those documents are central to the plaintiffs claim, . . . the Court may consider the documents

part of the pleadings for purposes of Rule 12(b)(6) dismissal.32 [T]he defendants attaching

such documents to the motion to dismiss will not require conversion of the motion into a motion

for summary judgment.33 Where there is a conflict between allegations in a pleading and the

27 Settlement Agreement, pp. 5-6, FIVE.28 Settlement Agreement, p. 8, ELEVEN.29Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).30Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).31In re Fontainebleau LV Contract Litig., 716 F.Supp.2d 1237, 1246 (S.D. Fla. 2010).32Brooks v. Blue Cross and Blue Shield of Florida, Inc., 116 F.3d 1364, 1368 (11th Cir. 1997).33Brooks, 116 F. 3d at 1368;see also Venture Assoc. Corp. v. Zenith Data Sys. Corp., 987 F.2d429, 431 (7th Cir. 1993).



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central documents, it is well settled that the contents of the documents control. 34

Although Plaintiffs refer to an on the spot agreement to pay Microsoft $70,00035

thereby incorporating it by reference in the Amended Complaint they opportunistically fail to

attach a copy of the Settlement Agreement to their pleading. The reason is obvious. The

Settlement Agreement flatly contradicts the allegations in the Amended Complaint, and releases

Microsoft from any and all claims asserted in this lawsuit.36

2. The Settlement Agreement is Enforceable.

Plaintiffs allege that, on April 27, 2012, Microsoft: (i) proceeded to extort Plaintiffs by

demanding an on the spot agreement to pay US$70,000 or Microsoft would remove all of

Plaintiffs servers containing ALL of the Plaintiffs data and operational software, and (ii)

forced Plaintiffs[] to capitulate to Microsofts extortion to avoid the . . . shutting down of their

businesses.37 Further, they assert that, because of the capitulation under duress to Microsofts

demands, the Settlement Agreement is not a cognizable or enforceable agreement or contract

under the applicable Guatemalan law.38 Whether analyzed under Florida or Guatemalan law,

Plaintiffs cannot allege facts, which, if taken as true, are sufficient to raise duress as a plausible

defense to the formation or enforceability of the Settlement Agreement, and, more specifically,

to the payment terms of that agreement (pursuant to which Plaintiffs agreed to make a settlement

payment of US$70,000 to Microsoft and pay any taxes associated with the settlement).39

First, a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires

more than labels and conclusions, and a formulaic recitation of the elements of a cause of action

will not do.40 Here, the allegations of duress merely parallel the buzzwords typically found in

the case law. Second, Plaintiffs do not because they cannot allege facts, which, if taken as

true, are sufficient to raise even a plausible inference that there was anything involuntary about

Plaintiffs consent to the terms of the Settlement Agreement. For instance, the Settlement

Agreement expressly states that (a) the parties exercised their free will and agreed to mutual

34In re Fontainebleau LV Contract Litig., 716 F.Supp.2d at 1246.35See Am. Complaint, 37.36See Settlement Agreement, pp. 2-6, 8 ONE.RECITALS; TWO.SETTLEMENT; THREE;FIVE; ELEVEN.37 Am. Complaint, 37-3838 Am. Complaint, 40.39See Skinner-Kle Decl., 30.40Twombly, 550 U.S.at 555 ([T]he pleading must contain something more . . . than . . . astatement of facts that merely creates a suspicion [of] a legally cognizable right of action.).



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concessions in entering into the Agreement;41 and (b) the US$70,000 Settlement Payment was

made by Plaintiffs for their unlicensed use of software.42 Indeed, Plaintiffs allegations of

duress are so contrary to logic and good sense as to be rendered frivolous, given the fact that,

as Plaintiffs concede,43 the US$70,000 Settlement Payment was made by Plaintiffs in four (4)

separate installments of $17,500.00, three of which were spread out over a three (3) month

period after the alleged fraudulent raid on April 27, 2012.44 Plaintiffs do not because they

cannot allege that, at any time before or after making any of the installment payments, they

ever protested, disputed, or took steps to avoid the payment terms or the releases or waivers of

liability contained in the Settlement Agreement.45 To be sure, Plaintiffs indisputably received a

clear benefit from executing the Settlement Agreement, namely, that, in exchange for the

Settlement Payment and their compliance with other obligations, Microsoft:

agree[d] to discontinue the legal actions brought and to not bring others of a civil,criminal or any other nature resulting from the Proceedings . . . on the twenty-seventh of April of the current year, as the result of any other type of activity itmay have carried out prior hereto.46

Finally, Plaintiffs fail to allege why the only reasonable response to the so-called duress was to

sign the Settlement Agreement or even make the Settlement Payment, particularly each

installment payment over the three (3) month period after the alleged fraudulent raid.47

In short, Plaintiffs duress defense is nothing more than a barebones conclusion or legal

41 Settlement Agreement, p. 1, ONE.RECITALS; TWO SETTLEMENT.42 Settlement Agreement, p. 3, TWO SETTLEMENT.43 Am. Complaint, 41.44 Settlement Agreement, p. 3, TWO.SETTLEMENT.45See Davis v. Hefty Press, 11 So. 2d 884, 885-86 (Fla. 1943) (holding that, even if a contract isallegedly procured by duress, it is ratified, thereby waiving duress, where those who nowcomplain that the arrangement was infected in that manner recognized it and actually benefitedunder it); see also Am. Airlines, Inc. v. CardozaRodriguez, 133 F.3d 111, 119 (1st Cir. 1998)(a party seeking to avoid a contract based on duress must tender-back any consideration receivedin exchange); Howlett v. Holiday Inns, Inc., 120 F.3d 598, 601 (6th Cir. 1997). The law ofGuatemala on duress (coaccin) and ratification is in line with the law of Florida. SeeSkinner-Kle Decl., 29-32.46 Settlement Agreement, pp. 5-6, FIVE.47See Scratch Golf, LLC v. Lexington Ins. Co., 2009 WL 4377556, at *2 (11th Cir. 2009) (Forduress to exist . . . not only must a threat be improper, but it must leave the aggrieved partywithout any reasonable alternative other than to assent.); Friedman v. Bache & Co., 321 F.Supp. 347, 350 (S.D. Fla. 1970) (One of the elements of actionable duress is that thecircumstances involved allow a person no alternative.);see also Skinner-Kle Decl., 32.



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label, and cannot withstand the pleading mandates ofTwombly andIqbal. Plaintiffs assertions of

extortion or capitulation are insufficient to nudge their allegations of duress across the line

from conceivable to plausible,48 and amount to nothing more than the-defendant-unlawfully-

harmed-me accusations that are proscribed by the Supreme Court under Rule 8.49

3. The Settlement Agreement Releases Microsoft from All Claims Asserted byPlaintiffs in the Amended Complaint.

The law is well-settled that Florida courts enforce general releases to further the policy

of encouraging settlements.50 Numerous Florida cases have upheld general releases, even

when the releasing party was unaware of [a] defect at the time the agreement was executed,51

including circumstances where a party discovered negligence after the executing a settlement

agreement.52 Even more important, other courts have recognized this principle even in the face

of a fraudulent inducement claim. For example, in Kobatake v. E.I. DuPont De Nemours &Co.,53 the court held that the execution of such all-encompassing releases prohibits [plaintiffs]

from suing defendants [for fraudulent inducement].54 The law of Guatemala is in accord with

the law of Florida.55 As set forth below, Plaintiffs released the claims asserted in this lawsuit.

The Settlement Agreement provides that, by order of the [Guatemalan Criminal Court],

an audit was conducted on the computer hardware located at the facilities of the commercial

entity known as SEGUROS and related companies.56 Furthermore, paragraph seven (7) of the

Settlement Agreement unambiguously provides that Plaintiffs

hereby and henceforth waive all actions of any nature that may arise, whetherpast, present or future, on the basis of this claim and the Legal Proceeding thatwas conducted at its facilities on the twenty-seventh of April of the current year[i.e., 2012] [i.e., the Guatemalan Seizure Action] or of any other event related tothis proceeding.57

48See Perez, 2011 WL 2680503, at *449Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 555).50Mazzoni Farms, Inc. v. E.I. DuPont De Nemours and Co., 761 So. 2d 306, 314 (Fla. 2000).51Mazzoni Farms, Inc., 761 So. 2d at 306; see also Braemer Isle Condominium Assn, Inc. v.Boca Hi, Inc., 632 So. 2d 707, 707-08 (Fla. 4th DCA 1994) (enforcing general release althoughparty did not discover alleged defects until after executing the release).52Hardage Enters. v. Fidesys Corp., 570 So. 2d 436, 437-39 (Fla. 5th DCA 1990).53 162 F.3d 619, 625 (11th Cir. 1998).54Mazzoni Farms, Inc., 761 So. 2d at 306.55See Skinner-Kle Decl., 28.56 Settlement Agreement, p. 2, ONE.RECITALS.57 Settlement Agreement, p. 6, SEVEN.



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There is no question that the claims asserted by Plaintiffs in this action relate to or arise from the

Guatemalan Seizure Action.58 As inKobatake,59 where the Eleventh Circuit affirmed that actions

for fraud, civil conspiracy, spoliation of evidence, public nuisance, and racketeering were

properly barred by a settlement release provision,60 Plaintiffs claims here likewise are barred,

because paragraph seven (7) of the Settlement Agreement releases Microsoft from those

claims.61 Accordingly, the Amended Complaint must be dismissed with prejudice.

B. Forum Non Conveniens Mandates Dismissal of Plaintiffs Claims with Prejudice.

Under the doctrine offorum non conveniens, the Court should dismiss a complaint when

the following factors are satisfied:

(1) the trial court finds that an adequate alternate forum exists which possessesjurisdiction over the whole case, including all of the parties;

(2) the trial court finds that all relevant factors of private interest favor thealternate forum, weighing in the balance a strong presumption against disturbingplaintiffs initial forum choice;

(3) if the balance of private interests is at or near equipoise, the court further findsthat factors of public interest tip the balance in favor of trial in the alternateforum; and

(4) the trial judge ensures that plaintiffs can reinstate their suit in the alternateforum without undue inconvenience or prejudice.62

1. Adequate Alternate Forum

The first factor enunciated inAldana is easily met here. The available forum prong of

the analysis generally will be satisfied when the defendant is amenable to process in the other

58Am. Complaint, 57-58, 61-65, 67-71 (Count I); 72-73, 75 (Count II); 78-80, 83 (Count III).

55-60, 62, 68, 72-75.59Kobatake v. E.I. DuPont De Nemours & Co., 162 F.3d 619, 625 (11th Cir. 1998).60 At issue in Kobatake was a settlement agreement based on damages alleged incurred byplaintiffs in the use of defendants product, Benlate 50DF. 162 F.3d at 623, 625. Thesettlement agreement released defendant from, among other things, any and all claims arisingfrom or in any way related to [plaintiffs] use of Benlate.162 F.3d at 624-25.61 See Cerniglia v. Cerniglia, 679 So.2d 1160, 1164-65 (Fla. 1996) (summary judgment onclaims for assault and battery, intentional infliction of emotional distress, common-law fraud,and breach of contract because of general release); Caballero v. Phoenix Am. Holdings, Inc., 79So.3d 106, 107 (Fla. 3d DCA 2012) (summary judgment on retaliatory discharge, violations ofFlorida Whistleblowers Act, breach of contract, fraudulent inducement, unjust enrichment, andpromissory estoppel, because of general release);see also Skinner-Kle Decl., 28.62Aldana v. Del Monte Fresh Produce N.A., Inc., 578 F.3d 1283, 1290 (11th Cir. 2009).



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jurisdiction.63 As reflected in the Skinner-Klee Declaration, in an action for damages,

Guatemalan law confers jurisdiction on the court presiding over the territory in which the

damages occurred: Because the Complaint seeks damages against Microsoft that allegedly were

sustained by the plaintiffs in Guatemala and more specifically, at plaintiffs business offices in

Guatemala City the Guatemalan court presiding over that location would have jurisdiction to

hear plaintiffs claims.64 In any event, Microsoft also will agree to file a stipulation that, if the

Court dismisses the Amended Complaint on forum non conveniens grounds, it will voluntarily

submit to the jurisdiction of the Guatemalan courts for purposes of defending itself against any

claim for relief Plaintiffs may assert in that forum.65 As such, there is no question that Microsoft

would be amenable to process in Guatemala.

Besides being an available forum, Guatemala is an adequate, alternative forum. The

law is clear that [a]n adequate forum need not be a perfect forum. 66 The [a]dequacy of the

alternative forum does not require equivalence of result, but merely the existence of some

meaningful remedy.67 As described above, pursuant to the express terms of the Settlement

Agreement, Plaintiffs released Microsoft from, and waived the right to assert, any claim against

Microsoft arising out of or relating to the Guatemalan Seizure Action.68 In an apparent attempt to

circumvent the Settlement Agreement, Plaintiffs allege it is unenforceable, because it was

procured by duress.69 For the reasons described above and in the Skinner-Klee Declaration, the

Amended Complaint fails to adequately plead the defense of duress under either Florida or

Guatemalan law.70 Notwithstanding that conclusion, if the Court were to dismiss the Amended

63Lisa, S.A. v. Gutierrez Mayorga, 441 F. Supp. 2d 1233, 1236-37 (S.D. Fla. 2006), affirmed by240 Fed. Appx. 822, 823-24 (11th Cir. 2007) (quoting Satz v. McDonnellDouglas Corp., 244F.3d 1279, 1282 (11th Cir. 2001)).64 Skinner-Kle Decl., 22;see also Skinner-Kle Decl., 23 and 25 (indicating that Microsofthas filed a notice in the public record with the name and identity of its registered agent for thepurpose of service of process in Guatemala; 24 (explaining that Microsoft tacitly submittedto the jurisdiction of Guatemalan courts for purposes of any dispute arising under or relating tothe Settlement Agreement).65See Lisa, S.A., 441 F.Supp.2d at 1237 (Guatemala is an available forum, because defendantsconsented to jurisdiction there).66Lisa, S.A., 441 F. Supp. 2d at 1237 (quoting Satz, 244 F. 3d at 1283).67Lisa, S.A., 441 F. Supp. 2d at 1238 (quoting Polanco v. H.B. Fuller Co., 941 F.Supp. 1512,1526 (D. Minn. 1996)).68 Settlement Agreement, p. 6, SEVEN.69See Am. Complaint, 40.70See supra, pp. 8-10; Skinner-Kle Decl., 30-32.



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Complaint on forum non conveniens grounds, Plaintiffs would not be precluded from filing an

action for annulment in Guatemala to have the Settlement Agreement invalidated on the basis

of duress (or any other defense to the formation or enforceability of the Settlement Agreement

which may be recognized under Guatemalan law).71 The Guatemalan Code of Civil Procedure

permits the recovery of monetary damages in a civil annulment action.72

Moreover, to the extent their efforts to invalidate the Settlement Agreement prove

successful, Plaintiffs would be free to pursue other potential remedies against Microsoft for

monetary damages in Guatemala. For example, with respect to Plaintiffs allegations that

Microsoft filed a false or fraudulent criminal complaint and sworn declarations in the

Guatemalan Seizure Action, Plaintiffs could potentially assert a claim for abuse of process in

Guatemala.73 Based on the foregoing, Plaintiffs clearly would not be deprived of all meaningful

remedies if this case were dismissed in favor of the Guatemalan forum.

The mere fact the Plaintiffs may not be able to assert the exact claims asserted in this

action (including their RICO claim) does not render Guatemala an inadequate forum.74

[B]eing deprived of some relief is not sufficient to find that the Guatemalan forum is

inadequate.75 Indeed, several federal courts, including this Court, have previously determined

that Guatemala is an adequate, alternative forum.76 The same result should issue here.

2. Private Interests.

The second factor enunciated in Aldana likewise is easily met in this case. Private

interests include ease of access to sources of proof; availability of compulsory process for

attendance of unwilling, and the cost of obtaining attendance of willing[] witnesses . . . and all

71 Skinner-Kle Decl., 29, 33 (explaining that Guatemalan law recognizes both a civil orcriminal action for annulment of a contract).72 Skinner-Kle Decl., 33.73 Skinner-Kle Decl., 35 (stating that the Guatemalan Civil Code recognizes a cause of actionfor abuso del derecho (abuse of process) which permits a plaintiff to recovery monetarydamages).74 See Lisa, S.A., 441 F.Supp.2d at 1237-38 (Guatemala was an adequate alternative forum,notwithstanding the inability to assert a RICO claim) (citing cases);Republic of Panama v. BCCIHoldings S.A., 119 F.3d 935, 952 (11th Cir. 1997) (same).75Lisa, S.A., 441 F. Supp. 2d at 1237.76See Lisa, S.A., 441 F. Supp. At 1238;Aldana, 578 F.3d at 1290-92;Palacios v. The Coca ColaCo.,757 F.Supp.2d 347, 355-360 (S.D.N.Y. 2010);Polanco, 941 F. Supp. at 1526;Kieswetter v.Chiquita Brands Companies North America, Inc., 1992 WL 55183, at *2 (E.D. La. 1992);Bolanos v. Gulf Oil Corp., 502 F.Supp. 689, 691 (W.D. Pa. 1980).



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other practical problems that make trial of a case easy, expeditious and inexpensive. 77 The

presumption that a plaintiff has chosen a sufficiently convenient forum is weaken[ed] when,

as in this case, the plaintiff is a foreigner litigating far from home. 78 Perhaps the most

important private interest of the litigants is access to evidence.79 Here, the crux of the

Amended Complaint is that, by fil[ing] false declarations with the Guatemalan court, and, in

turn, secur[ing] a seizure order from the Guatemalan court, Microsoft:

(a)appeared with armed Guatemalan law enforcement officers at Plaintiffsbusiness offices in Guatemala;

(b) fraudulently raid[ed] Plaintiffs business offices in Guatemala;

(c) extort[ed] Plaintiffs by demanding an on the spot agreement to payUS$70,000;

(d) failed to disclose . . . the [US$70,000] payment . . . to the Guatemalan

authorities, as to evade Guatemalan tax laws and improperly shift the financialburden of paying those taxes to Plaintiffs; and

(e) committed tax evasion by forc[ing] Seguros, on behalf of Plaintiffs . . . topay the amount of Microsofts $21,000 (i.e., 31% of $70,000) tax liability to theGuatemalan government, resulting in additional damages to Seguros.80

Plaintiffs also allege that Microsofts alleged duress and tax evasion must be analyzed under

Guatemalan law.81 The only factually-supported allegations connecting this case to the United

States are that Microsoft is a Washington corporation and that Plaintiffs made three (3) of the

installment payments towards the Settlement Payment into a U.S. bank account.82

Because this case is rooted in the alleged fraudulent conduct and duress perpetrated

by Microsoft in Guatemala, it is not surprising that a vast majority of the potential witnesses and

relevant documents concerning the alleged fraud and duress also are located in Guatemala. 83

Plaintiffs are Guatemalan business entities.84 The various translated Guatemalan court

77See Lisa, S.A., 441 F. Supp.2d at 1238; Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).78Lisa, S.A., 441 F. Supp.2d at 1239 (emphasis added) (quotingLeon v. Million Air Cargo, Inc.,251 F.3d 1305, 1315 (11th Cir. 2001)).79Lisa, S.A., 441 F. Supp.2d at 1239.80See Am. Complaint, 16, 25, 26, 35, 31, 37, 43, 73-75, 79-83.81 Am. Complaint, 40, 43.82See Am. Complaint, 7, 41; Settlement Agreement, p. 4, TWO.SETTLEMENT.83 It bears reminding the Court that, even if there is evidence in the United States, such evidencecan be obtained under 28 U.S.C. 1782 (permitting a district court to compel production of adocument or other thing for use in a proceeding in a foreign or international tribunal).84 Am. Complaint, 4-6.



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documents that Plaintiffs attach to the Amended Complaint and contend are fraudulent, were

filed by Rodolfo Estuardo Varela Martinez, a Guatemalan, an attorney and notary [and] a

resident of the department of Guatemala.85 In addition, by the plain language of Plaintiffs

allegations, the duress in procuring the Settlement Payment allegedly occurred while the

fraudulent raid was taking place or the Settlement Agreement was being executed at Plaintiffs

business offices in Guatemala.86 Accordingly, many of the potential eyewitnesses are located in

Guatemala, as well. In sum, the majority of the documentary evidence figures to be written in

Spanish, and most of the material witness figure to be Spanish speakers. Thus, the cost

associated with translating documents and interpreting witness testimony would be exorbitant if

the matter were to proceed to trial in the United States. Here, as in Lisa, S.A., the costs

associated with any potential litigation would be far greater if this action were to proceed in this

forum.87 As such, the private interests weigh heavily in favor of dismissal.

3. Public Interests.

While this Court need not consider the public interest factors given that the private

interest factors strongly favor dismissal,88 the public interest factors nevertheless favor

dismissal of this case, as well. Relevant public interest factors include the sovereigns interests

in deciding the dispute, the administrative burdens posed by trial, and the need to apply foreign

law.89 Here, given the nature of this case Guatemalan plaintiffs suing for fraud, duress,

and tax evasion arising from a Guatemalan court proceedings and conduct allegedly causing

injury solely in Guatemala there is no question that this dispute bears little relation to the

United States, or, much less, Florida.90 Importantly, the Guatemalan context of the underlying

events gives rise to a Guatemalan interest in local adjudication, and as such, cut[s] squarely in

favor of dismissal of this case.91 Plaintiffs certainly appear to have no qualms about

85See Am. Complaint, [D.E. 13-1, pp. 3, 15; 13-2, pp. 3, 6; 13-4, pp. 3, 7].86See Am. Complaint, 36-40.87Lisa, S.A., 441 F. Supp.2d at 1239-40.88See Aldana, 578 F.3d at 1298.89Lisa, S.A., 441 F. Supp.2d at 1240 (quoting Satz v. McDonnell Douglas Corp., 244 F.3d 1279,1284 (11th Cir. 2001)).90See Morse v. Sun Intl Hotels Ltd., No. 98-7451-Civ, 2001 WL 34874967, at *6 (S.D. Fla. Feb.26, 2001) (public interest factors weighed in favor of dismissal where Florida plaintiff suedBahamian hotels for negligence based on an accident that occurred in the Bahamas).91Palacios, 757 F.Supp.2d at 362-63 (The interest in protecting jurors from sitting on caseswith no relevance to their own community weighs heavily in favor of dismissal.); see also



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emphasizing Guatemalas interests in this litigation when it suits them or magnifies their

importance: (a) Seguros is a major Guatemalan insurance . . . [with] 243 employees, enjoys

annual revenue of US$38 Million and is ranked the fourth (4th) largest insurance company in

Guatemala by revenues; and (b) Fianzas is ranked the second (2nd) largest surety company in

Guatemala by annual revenues of US$ 5.25 Million.92 In fact, this lawsuit stems from software

infringement and intellectual property enforcement in Guatemala, the legal implications of which

are highlighted by Plaintiffs in the Amended Complaint: Plaintiffs were 100% compliant but

lacked documentation for 2% of their software licenses. This, in a country [i.e., Guatemala] with

an average compliance rate of a mere [sic] 20%, i.e., 80% non-compliance.93 Finally, Plaintiffs

allege that Guatemalan law governs the determination of various claims or defenses in this

action.94 This element also weighs heavily in favor offorum non conveniens dismissal.95

In sum, Plaintiffs ask this Court to pass judgment on, question, and second guess the

propriety, integrity, and viability of court proceedings in a foreign jurisdiction, i.e., Guatemala.

The Court should not engage in such endeavors.96 As such, the administrative burden of this

case should be on the jurisdiction with the most significant contacts with the alleged occurrences,

i.e., Guatemala.97 In Lisa, S.A., the court held that, because the alleged fraud occurred in

Guatemala, the conduct causing the injury occurred in Guatemala, and Guatemalan law would

likely apply, Guatemala [was] a far more appropriate forum to litigate the lawsuit. 98 The same

is true here.99 The Court should dismiss this case in favor of the Guatemalan forum.

4. Reinstatement of Lawsuit in Guatemala.

The final factor also is easily satisfied in this case. As emphasized above, Plaintiffs may

Piper Aircraft, 454 U.S. at 260 ([T]here is a local interest in having localized controversiesdecided at home. (citation and internal quotation marks omitted)); Do Rosario Veiga v. WorldMeteorological Organization, 486 F.Supp.2d 297, 307 (S.D.N.Y. 2007) (same).92 Am. Complaint, 8-9.93 Am. Complaint, 50.94 Am. Complaint, 44-45.95See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 268 n.29 (1981) (Manyforum non conveniensdecisions have held that the need to apply foreign law favors dismissal.); Lisa, S.A., 441F.Supp.2d at 1240 (same);Morse, 2001 WL 34874967, at *7 (same).96 See Chesley v. Union Carbide Corp., 927 F.2d 60, 66 (2d Cir. 1991) (U.S. courts are notresponsible for supervising the integrity of judicial systems of other sovereign nations).97Lisa, S.A., 441 F.Supp.2d at 1241 (citation and internal quotation marks omitted).98Lisa, S.A., 441 F. Supp. 2d at 1240-41.99SeealsoPalacios, 757 F.Supp.2d at 362-63.



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reinstate their lawsuit against Microsoft in Guatemala without jurisdictional hurdles.100

C. International Comity Mandates Dismissal of Plaintiffs Claims with Prejudice.

Principles of international comity limit a domestic courts jurisdiction to hear claims like

those asserted in this lawsuit.101 Comity refers to the spirit of cooperation in which a domestic

tribunal approaches the resolution of cases touching the laws and interests of other sovereign

states.102 The rationale for dismissal is deference to the foreign countrys legal, judicial,

legislative, and administrative system of handling disputes over which it has jurisdiction, in a

spirit of international cooperation.103 Comity should be withheld only when its acceptance

would be contrary or prejudicial to the interest of the nation called upon to give it effect.104

The limits on a domestic courts jurisdiction to prescribe the law of a foreign dispute

involve more than just a question of discretion. With respect to any dispute, a state should defer

to the other state if that states interest is clearly greater. 105 A nation having some basis for

jurisdiction, even over its own nationals, should refrain from exercising that jurisdiction with

respect to a person or activity having connections with another state when the exercise of such

jurisdiction would be unreasonable.106 A court should weigh the relative significance of effects

on the United States as compared with those elsewhere, and the relative importance to the

violations charged of conduct within the United States as compared with conduct abroad.107

Application of the foregoing principles all favor dismissal of Plaintiffs claims. As stated

previously, the crux of this lawsuit is that Microsoft, after allegedly fil[ing] false declarationsand, in turn, secur[ing] a seizure order from the Guatemalan court, allegedly conducted a

fraudulent raid of Plaintiffs business offices with armed Guatemalan law enforcement

officers; proceeded to extort Plaintiffs by demanding an on the spot agreement to pay

100See Skinner-Kle Decl., 22-25.101See Philadelphia Gear Corp. v. Philadelphia Gear de Mexico, 44 F.3d 187, 191-92 (3d Cir.1994) (abuse of discretion in failing to properly consider issue of international comity); Sequihuav. Texaco, Inc., 847 F. Supp. 61 (S.D. Tex. 1994) (dismissing complaint on grounds of comity).102Socit Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S.D. Iowa, 482 U.S. 522, 542n. 27 (1987).103Fleeger v. Clarkson Co., 86 F.R.D. 388, 392 (N.D. Tex. 1980); Sequihua, 847 F. Supp. at 63.104Philadelphia Gear Corp., 447 F.3d at 191 (quoting Somportez Ltd. v. Philadelphia ChewingGum Corp., 453 F.3d 435, 440 (3d Cir. 1971), cert. denied, 405 U.S. 1017 (1972)).105Restatement (Third) of Foreign Relations Law of the United States 403(3) (1987).106Id. at 403(1).107Timberlane Lumber Co. v. Bank of America Natl Trust and Say. Assn, 549 F.2d 597, 614(9th Cir. 1976).



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US70,000; and committed tax evasion by forcing Seguros, on behalf of Plaintiffs, to pay

Microsofts tax liability, i.e., US$ 21,000, to the Guatemalan government, which conferred an

inequitable benefit on Microsoft.108 On balance, the interests of Guatemala in monitoring the

conduct of litigants (like Microsoft) in proceedings, within the exclusive jurisdiction of the

courts of Guatemala (like the Guatemalan Seizure Action), far outweigh any interest the United

States may have in regulating the conduct of litigants in those same proceedings. Put another

way, Plaintiffs claims concern matters regulated by the Guatemalan courts and the Guatemalan

Special Prosecutor, and involve activity taken by Microsoft exclusively in Guatemalan courts

pursuant to Guatemalan law. Guatemala has a paramount interest in resolving matters arising

within its borders, litigated in its courts, and/or requiring the application of its laws. Resolution

of Plaintiffs claims by this Court directly challenges Guatemalas sovereign interest in matters

relating to the Guatemalan Seizure Action without interference from a United States court.

In short, resolution of the issues alleged by Plaintiffs in this lawsuit should occur in the

nation that is best able to consider the policy, legislative, and judicial interests of Guatemala and

that has the greatest connection to this matter. That nation is Guatemala. Plaintiffs attempt to

assert a RICO claim does not alter this conclusion, because, as discussed in more detail below,

the RICO claim entails the application of United States law to conduct that allegedly occurred in

Guatemala, and not the United States.109 Stated differently, the RICO claim involves the direct

extraterritorial application of United States law, and as such, implicates significant

considerations of international comity.110 Accordingly, this Court should refrain from

exercising jurisdiction and dismiss Plaintiffs claims with prejudice.

D. The Act of State Doctrine Mandates Dismissal of Plaintiffs Claims with Prejudice.

The act of state doctrine prohibits a United States court from passing judgment on the

validity of an act of a foreign sovereign taken within its own territory.111 The doctrine is not

some vague doctrine of abstention but a principle of decision binding on federal and state courts

108See Am Complaint, 16, 25, 26, 35, 31, 37, 43, 73-75, 79-83.109See Am. Complaint, 65.110 Cf. C.A. Westel de Venezuela v. Am. Tel. & Tel. Co., 1992 WL 209641, at *19 (S.D.N.Y.1992) (international comity not implicated where RICO claim entailed application of U.S. law toalleged racketeering activity that occurred in the United States, and not in Venezuela).111 Glen v. Club Mediterranee, S.A., 365 F.Supp.2d 1263, 1267 (S.D. Fla. 2005) (citing W.S.Kirkpatrick & Co. v. Environmental Tectonics Corp., 493 U.S. 400, 405 (1990));see also VanityFair Mills v. T. Eaton Co., 234 F.2d 633, 646 (2nd Cir. 1956).



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alike, whereby the act within its own boundaries of one sovereign State . . . becomes . . . a rule

of decision for the courts of this country.112 In this context, even if the defendant is a private

party, not an instrumentality of a foreign state, and even if the suit is not based specifically on a

sovereign act, the Court should nevertheless decline to decide the merits of the case if in doing

so [it] would need to judge the validity of the public acts of a sovereign state performed within

its own territory.113 [T]he relevant acts are not merely those of the named defendants, but any

governmental acts whose validity would be called into question by adjudication of the suit.114

Here, the allegations that serve as the bases for all of Plaintiffs claims are that Microsoft

filed the criminal complaint and supporting false declarations with the Guatemalan Special

Prosecutor to secure[] a seizure order from the Guatemalan court and conduct a fraudulent

raid of Plaintiffs business with the aid of Guatemalan law enforcement officers.115

Importantly, the complaint and sworn declarations, which Plaintiffs allege are false or

fraudulent, were deemed sufficient by:

(1) the Guatemalan Special Prosecutor, which, based on Microsofts criminalcomplaint and sworn declarations, initiated criminal proceedings against thePlaintiffs and requested an order from the Guatemalan Criminal Court authorizingcertain precautionary remedial measures to be executed with the aid ofGuatemalan law enforcement (i.e., the alleged fraudulent raid and the seizureof evidence of infringement);116 and

(2) the Guatemalan Criminal Court, which, upon receiving the request from the

Guatemalan Special Prosecutor, issued the order authorizing the aforementionedprecautionary remedial measures.117

The relevant acts of the Guatemalan Special Prosecutor, Guatemalan Criminal Court, and

Guatemalan law enforcement clearly constitute governmental or public acts of a sovereign

112 Glen, 365 F.Supp.2d at 1267 (quoting W.S. Kirkpatrick & Co., 493 U.S. at 406); see alsoCallejo v. Bancomer, S.A., 764 F.2d 1101, 1112-1113 (5th Cir. 1985); First Nat. City Bank v.Banco Nacional de Cuba, 406 U.S. 759, 769 (1972)).113Callejo, 764 F.2d at 1113 (citing Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 428(1964)); Compaa de Gas de Nuevo Laredo v. Entex, Inc., 686 F.2d 322, 325-26 (5th Cir. 1982)(applying act of state doctrine in suit between private parties).114Callejo, 764 F.2d at 1115.115 Am. Complaint, 13, 35-37;see also Am. Complaint, 13-16, 25-26, 28, 31-31, 34-40, 45,49-50, 57-58, 61-65, 68-70, 72-75, 78-79.116See Skinner-Kle Decl., 13-16; Am. Complaint, Exhibit A, Criminal Complaint, [D.E.13-1, pp. 6-8, 10-11, 13); Settlement Agreement, p.2, ONE.RECITALS; p. 6, FIVE.117See Settlement Agreement, p.2, ONE.RECITALS; p. 6, FIVE; Skinner-Kle Decl., 14-15



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state.118 The act of state doctrine operates as an issue preclusive device, foreclosing judicial

inquiry into the validity or propriety of such acts in litigation between any set of parties.119

Deciding the merits of this lawsuit would require this Court to judge the validity or second

guess the acts of Guatemalan state actors. Because the act of state doctrine precludes this Court

from addressing those claims,120 the Amended Complaint must be dismissed with prejudice.121

E The RICO Claim Should Be Dismissed with Prejudice as RICO Does Not Apply

Extraterritorially Where the Alleged Enterprise and Predicate Activity Are Foreign.

This districts decision in Sorota v. Sosa122 is dispositive of Plaintiffs RICO claim

(Count I). There, the plaintiff, Sorota, was approached about owning a Peruvian telephone

company (Sparq), which Sosa agreed to manage and split profits if Sorota provided the

capital.123 While in Florida, Sorota alleged, Sosa induced him to wire money on 18 separate

occasions from a Florida bank account . . . for the ostensible purpose of operating thecompany.124 However, Sosa misappropriated much of the money for his own personal use in

both Florida and Peru.125 Sosa also established two (2) additional Peruvian companies to take

over Sparqs money and property and redirect Sparqs business contracts and profits.126

Sorota filed a RICO claim, alleging that, by repeatedly inducing Sorota to wire money

with fraudulent intent, Sosa engaged in a pattern of racketeering activity, and that Sparq,

together with the other Peruvian companies, formed an enterprise which provided cover to

defraud Sorota and served as the vehicle for receiving moneys from [him] induced by

fraud.127 In response, Sosa moved to dismiss the RICO claim, contending that RICO does not

apply extraterritorially and that Sorota alleged a foreign (rather than a domestic) RICO

enterprise.128 In dismissing Sorotas RICO claim with prejudice, the court stated as follows:

[S]everal courts have examined the RICO statute and determined that the focusof RICO is on the enterprise as the recipient of, or cover for, a pattern of criminal

118See Callejo, 764 F.2d at 1113.119Glen, 365 F.Supp.2d at 1271 (citation and internal quotation marks omitted).120Glen, 365 F.Supp.2d at 1271 (unjust enrichment not viable because of act of state doctrine).121See Glen, 365 F.Supp.2d at 1271.122 842 F.Supp.2d 1345 (S.D. Fla. 2012).123Sorota, 842 F.Supp.2d at 1346.124Sorota, 842 F.Supp.2d at 1346-47.125Sorota, 842 F.Supp.2d at 1346-47.126Sorota, 842 F.Supp.2d at 1347.127Sorota, 842 F.Supp.2d at 1347.128Sorota, 842 F.Supp.2d at 1347.



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activity. While one court has asserted that [t]he focus of the statute is theracketeering activity, . . . other courts have persuasively explained that RICOdoes not punish the predicate acts of racketeeringindeed, each predicate act is,itself, a separate crimebut only racketeering activity in connection with anenterprise. Thus, regardless of where the predicate acts of racketeering occur,

RICO does not apply where . . . the alleged enterprise and impact of thepredicate activity upon it are entirely foreign.129

The court concluded that Sorota alleged a foreign not a domestic RICO enterprise,

because, among other things, the role of [the] alleged enterprise . . . was to act as the recipient

of, and cover for, Sosas racketeering activity by receiving and holding the funds that he

fraudulently induced Sorota to wire to Peru.130 The court continued:

[T]he enterprise operated entirely in Peru, with its only connection to the UnitedStates being that the funds it possessed originated from (and possibly returned to)a Florida bank account. Such a limited connection with the United States is

insufficient. While aspects of Sosas racketeering activity (i.e., the wire fraud)allegedly took place in the United States, RICO does not apply where, as here,the alleged enterprise and the impact of the predicate activity upon it are entirelyforeign.131

The courts findings in Sinapsis Trading USA, LLC v. Secure Wrap of Miami, Inc. also

are instructive.132 There, the plaintiffs generally alleged that the defendants Secure Wrap of

Miami, Inc. and certain of their employees were displeased with [p]laintiffs success in

winning a contract to be the exclusive vendor at Miami International Airport for luggage

services, and in retaliation, engaged in a world-wide criminal racketeering scheme.

133

Specifically, the plaintiffs alleged, defendants published false information and obtained false

affidavits that led to criminal proceedings and ultimately caused the plaintiffs to lose airport

business in Argentina and damage to their reputation throughout the world.134 Defendants moved

to dismiss, contending, among other things, that the alleged conduct at issue did not implicate

RICO.135 In response, the plaintiffs argued that the racketeering conduct occurred from Florida

base: Plaintiffs are seeking to apply RICO to conduct occurring, being orchestrated from

129Sorota, 842 F.Supp.2d at 1350.130Sorota, 842 F.Supp.2d at 1350.131Sorota, 842 F.Supp.2d at 1350-51.132 2013 WL 1455824, at *6 (S.D. Fla. 2013) (Sinapsis).133Sinapsis, 2013 WL 1455824, at *1134Sinapsis, 2013 WL 1455824, at *2-3.135Sinapsis, 2013 WL 1455824, at *1.



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and/or emanating from Miami-Dade County, Florida[,] and elsewhere in the United States. 136 In

its analysis, the court noted that a [a] RICO enterprise is shown where a group of persons

associates, formally or informally, with the purpose of conducting illegal activity. 137 The court

rejected plaintiffs arguments, finding that the complaint proffered no facts . . . to support the

contention of a pattern of racketeering activity by an enterprise from Florida.138

Applying the rationale ofSorota and Sinapsis to this case, Plaintiffs RICO claim cannot

withstand dismissal with prejudice. Plaintiffs, which are all Guatemalan business entities,139 do

not because they cannot allege any new facts that would locate or identify a RICO enterprise

in the United States, or that would substantiate any assertion that the impact of the alleged

predicate acts of racketeering was domestic.140 Put another way, the Amended Complaint does

not alter the conclusion that the alleged Microsoft RICO Enterprise and predicate acts of

racketeering activity were located or occurred in Guatemala. For instance, Plaintiffs allege:

(a) Microsoft appears to operate through a foreign corporate vehicle, Microsoftde Guatemala, S.A (Microsoft Guatemala), in Guatemala, and conduct[ed]business in Guatemala through Microsoft Guatemala;141

(b) Microsoft fraudulently obtained a seizure order from the GuatemalanCourt after filing with the Guatemalan Special Prosecutor (i) a complaintrequesting an ex parte seizure order under Guatemalan law that alleged aviolation of Microsofts intellectual property rights, and (ii) fraudulent orfalse declarations that Plaintiffs were infringing Microsoft copyright [sic];142

(c) Microsoft appeared with armed Guatemalan law enforcement officers atPlaintiffs business offices in Guatemala, halted Plaintiffs business operationsin Guatemala, extort[ed] Plaintiffs by demanding an on the spot agreement topay US$70,000, and, as to the tax liability on the US$70,000, evade[d]Guatemalan tax laws and improperly shift[ed] the financial burden of payingthose taxes to Plaintiffs;143

(d) The operations of Microsoft in its international intellectual propertyenforcement programs and consequent dealings with Plaintiffs constitute aracketeering operation;144

136Sinapsis, 2013 WL 1455824, at *6, n. 6.137Sinapsis, 2013 WL 1455824, at *5 (citation and internal quotation marks omitted).138Sinapsis, 2013 WL 1455824, at *6, n. 6.139See Am. Complaint, 4-6.140See Sorota, 842 F.Supp.2d at 1350-51.141See Am. Complaint, 29, 43, 45 (emphasis added); Sorota, 842 F. Supp. 2d at 1350.142See Am. Complaint, 13, 15, 16, 25, 28, 31, 35 (emphasis added).143See Am. Complaint, 36-37, 43-44 (emphasis added).144 Am. Complaint, 59.



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(e) Microsoft directed and coordinated . . . (1) [Microsoft Guatemala], (2)Business Software Alliance, (3) Sofier Trading World, and (4) as yet unidentifiedadditional parties (the Microsoft RICO Enterprise);

(f) The Microsoft RICO Enterprise made coordinated fraudulent representations

to Plaintiffs . . . to the Guatemalan courts, and to Guatemalan lawenforcement;145 and

(g) The predicate acts set forth in this Complaint, including defrauding andextorting the three (3) Plaintiffs including by filing false sworn declarations andfalse supporting letters to secure an improper payment of US$70,000 and to evadeMicrosofts tax obligations while shifting them to Plaintiffs . . . constitutes [sic] apattern or patterns of racketeering activity.146

The haphazard allegations that Microsoft directed and coordinated the Microsoft RICO

Enterprise do not because they simply cannot change the geographic location of the alleged

Microsoft RICO Enterprise or where the alleged predicate acts of racketeering occurred (i.e.,

Guatemala). To be sure, Microsofts mere location in the United States as a Washington

corporation and nothing else would be insufficient to establish a domestic enterprise.147 The

only allegations in the Amended Complaint connecting the alleged enterprise to the United

States are that (1) Microsoft purportedly diverted the US$70,000 allegedly extorted from

Plaintiffs away from [Microsoft Guatemala] and to itself in the United States; and (b) Plaintiffs

made three (3) of the installment payments towards the US$70,000 directly into a U.S. bank

account.148 As in Sorota, however, the unremarkable allegation that the US$70,000 payment

may have been accepted by Microsoft in the United States does not establish a sufficient

connection to the United States to permit the application of the RICO statute in this case. 149

145 Am. Complaint, 63.146 Am. Complaint, 65.147See In re Mouttet, 2013 WL 2111283, at *8 (Bank. Ct. S.D. Fla. 2013) ([E]ven though mailand money went into or through Florida because a principal of the Plaintiffs was located inFlorida, this is not enough to trigger application of Federal RICO. (emphasis added)); NorexPetroleum Ltd. v. Access Industs., Inc., 631 F.3d 29, 33 (2nd Cir. 2010) ([S]imply alleging thatsome domestic conduct occurred cannot supportdomestic application of RICO).148 Am. Complaint, 41, 43.149 See Sorota, 842 F. Supp. 2d at 1350; In re Mouttet, 2013 WL 2111283, at *8; Cedeo v.Intech Group, Inc., 733 F.Supp.2d 471, 473 (S.D.N.Y. 2010) (dismissing a RICO claim asseeking extraterritorial application where the contacts with the United States . . . were limited tothe movement of funds into and out of U.S.-based bank accounts); c.f. Borich v. BP Products N.Am., Inc., 2013 WL 2357528, at *3-5 (Ill. N.D. 2013) (Congress passed RICO to eradicateorganized, long-term activity; where defendant acted in Texas by sending agreement to plaintiff



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Sorotas findings are noteworthy in this regard:

[I]t is worth reiterating the Supreme Courts observation [in Morrison v.Morrison, 130 S.Ct. 2869, 2884 (2010)] that it is a rare case of prohibitedextraterritorial application that lacks all contact with the territory of the UnitedStates, and that the presumption against extraterritorial application would be a

craven watchdog indeed if it retreated to its kennel whenever some domesticactivity is involved in the case.150

As in Sinapsis, Plaintiffs proffer no other facts in the Amended Complaint to support any

contention that Microsoft operated or conducted a pattern of racketeering activity by an

enterprise from this forum, i.e., Florida, much less anywhere else in the United States.

Accordingly, because Plaintiffs do not because they cannot allege a domestic RICO

enterprise, and the alleged predicate acts of racketeering activity upon which Plaintiffs rely are

entirely foreign, the RICO Claim should be dismissed with prejudice.151 Since Plaintiffs have

already amended their complaint as a matter of course (i.e., the Amended Complaint), any

further effort by Plaintiffs to amend their RICO claim would be futile and cause undue delay.152

in Illinois, which was sent back to Texas, plaintiffs RICO claim still failed to allege a domesticpattern of racketeering activity from which she was injured).150Sorota, 842 F.Supp.2d at 1351. The crux of the Amended Complaint clearly is Microsoftsalleged misuse of the legal process in Guatemala by allegedly filing false or fraudulentdeclarations, and in turn, obtaining a fraudulent seizure order from a Guatemalan court. The

misuse of a foreign jurisdictions legal process, such as by committing an abuse of process orfraud on the court, while possibly tortious or illegal under the foreign law of Guatemala, [is]not within reach of the [RICO] statute. See Sinapsis, 2013 WL 1455824, at *6;see also Annulliv. Panikkar, 200 F.3d 189, 199200 (3d Cir. 1999) (RICO does not cover garden-variety statelaw crimes, torts, and contract breaches unless they constitute mail or wire fraud).151C.f. Tymoshenko v. Firtash, 2013 WL 1234821, at *11-13 (S.D.N.Y. 2013) (dismissing RICOclaim because the focus of Plaintiffs allegations [was] on a foreign enterprise and a pattern ofracketeering activity that occurred abroad, even though various defendants were based in theU.S., and plaintiffs alleged that U.S. defendants laundered illegally obtained funds through the[U.S.] and elsewhere in order to conceal profits, including kickbacks to Ukrainian officials);Norex Petroleum Ltd., 631 F.3d at 3233 (affirming dismissal where plaintiffs allegednumerous acts in the [U.S.] . . . including mail and wire fraud [and] Hobbs Act violations,because allegations insufficient to support extraterritorial application of RICO).152 See Sorota, 842 F. Supp.2d at 1350-51, n.4 (leave to amend futile after finding RICOallegations impermissibly extraterritorial because the enterprise operated entirely [abroad], withits only connection to the United States being that the funds it possessed originated from . . . aFlorida bank account);Burch v. Pioneer Credit Recovery Inc., 551 F.3d 122, 126 (2d Cir. 2008)(affirming denial of leave to amend as futile because motions to amend should generally bedenied in instances of futility, undue delay, bad faith or dilatory motive) (citing Forman v.Davis, 371 U.S. 178, 182 (1962) ([P]leading is not an interactive game in which plaintiffs file a



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F. Plaintiffs Claims Are Undermined By Concessions in the Amended Complaint and

Settlement Agreement.

The Amended Complaint cannot withstand dismissal with prejudice based on Plaintiffs

own concessions. Specifically, Plaintiffs concede, on the face of the Amended Complaint, that

they are unable to document valid licenses for at least two (2) percent of the Microsoft software

they were operating on their computers at the time of the Guatemalan Seizure Action.153

Accepting this allegation as true for purposes of this Motion, Plaintiffs admission undermines

the foundational fact supporting each of their claims, namely, that there was no legitimate or

lawful basis to request the issuance of a seizure order by the Guatemalan court and/or to

enforce that order against Plaintiffs.154 Stated differently, by conceding that they cannot produce

valid licenses for at least two (2) percent of the Microsoft software utilized on their computers,

Plaintiffs are admitting to have infringed on Microsofts intellectual property rights, or at aminimum, that the prospect of software infringement existed. The Settlement Agreement itself

confirms that Plaintiffs were engaged in the unlicensed use of Microsoft software,155 and

consequently, any contradictory allegations in the Amended Complaint must be rejected by this

Court.156 In light of Plaintiffs concessions, the Court is compelled to find that the alleged

fraudulent enforcement of the seizure order against Plaintiffs in Guatemala cannot possibly

support any claim for relief asserted by Plaintiffs. Furthermore, Plaintiffs conclusory allegations

of fraud and duress simply fail to square with any plausible reading of Plaintiffs own

factual allegations and the Settlement Agreement.157 The Court should dismiss the Amended

complaint, and then bat it back and forth with the Court over a rhetorical net until a viablecomplaint emerges. Rather, plaintiffs have the responsibility to plead their case adequately,without defendants or the Courts assistance.)).153 Am. Complaint, 49-50.154See Am. Complaint, 57-58, 63, 65, 68, 70 (Count I); 72-73, 75 (Count II); 78-80, 83(Count III).155 Settlement Agreement, p. 3, TWO. SETTLEMENT.156See Weaver v. Opera Tower, 2008 WL 4145520, at *3-4 (S.D. Fla. 2008) (dismissing claimsbecause agreements at issue contradict specific allegations of complaint); Hillcrest Pacific Corpv. Yamamura, 727 So. 2d 1053, 1056 (Fla. 4th DCA 1999) (affirming dismissal with prejudicebecause Agreement plainly contradicts the allegations of the complaint and is fatallyinconsistent with Pacifics claim of fraud in the inducement); see also Lopez v. Ernie HaireFord, Inc., 974 So. 2d 517, 519 (Fla. 2nd DCA 2008) (citing cases for proposition that a partyhas a duty to learn and know the contents of a proposed contract before he signs and delivers itand is presumed to know and understand its contents, terms and conditions).157See Iqbal, 129 S.Ct. at 1949; Twombly, 550 U.S. at 555.



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Complaint with prejudice on this basis alone.158

G. Even Assuming Plaintiffs Could Survive a Motion to Dismiss Based on the

Foregoing Arguments, There are Still Other Grounds for Dismissal.

1. The RICO and Fraud Claims Are Not Pled With the Requisite Particularity.Counts I (RICO) and II (fraud) fail to satisfy the pleading requirements set forth by

Twombly, Iqbal, and Federal Rule of Civil Procedure 9(b). While a complaint attacked by a

Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation

to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions,

and a formulaic recitation of the elements of a cause of action will not do. 159 Factual

allegations must be enough to raise a right to relief above the speculative level.160 In addition to

the aforementioned requirements, because RICO claims are essentially a certain breed of fraud

claims, they are subject to the heightened pleading standards of [Rule 9(b).]161

In that regard,

each predicate act must be pleaded with particularity,162 and thus, the complaint must set forth:

(1) precisely what statements were made in what documents or oralrepresentations or what omissions were made, and (2) the time and place of eachsuch statement and the person responsible for making (or, in the case ofomissions, not making) same, and (3) the content of such statements and themanner in which they misled the [party who was defrauded], and (4) what the[party perpetrating the fraud] obtained as a consequence of the fraud.163

Requiring a plaintiff to plead fraud with particularity serves an important purpose . . . by

158See Twelve Inches Around Corp. v. Cisco Systems, Inc., 2009 WL 928007, at *4 (S.D.N.Y.2009) (dismissing fraud claim where plaintiffs concession in complaint undermined plaintiffsconclusory claims of reliance);Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1095 (2d Cir.1995) (dismissing complaint with prejudice: the Complaints attenuated allegations of controlare contradicted both by more specific allegations in the Complaint );Delman v. EntertainmentPartners Group, Inc., 2008 WL 3914465, at *3 (C.D. Cal. 2008) (plaintiff contradicted hisconspiracy allegations by stating that he was fired because he was unruly and disruptive on theset; plaintiff thus failed to state the basic elements of a civil conspiracy claim); see also GreatAmerican Fidelity Ins. Co. v. JWR Const. Svcs., Inc., 882 F.Supp.2d 1340, 1346 (S.D. Fla. 2012).159Twombly, 550 U.S. at 555 (citations and internal quotation marks omitted).160Id. ([T]he pleading must contain something more . . . than . . . a statement of facts thatmerely creates a suspicion [of] a legally cognizable right of action. (citation omitted)).161Sinapsis, 2013 WL 1455824, at *3;see also Ambrosia Coal & Constr. Co. v. Pages Morales,482 F.3d 1309, 131617 (11th Cir. 2007)).162Sinapsis, 2013 WL 1455824, at *4 (citing cases).163Brooks v. Blue Cross and Blue Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir. 1997);seealso Pirelli, 631 F.3d at 441-42 (In adding flesh to the bones of the word particularity . . . aplaintiff ordinarily must describe the who, what, when, where, and how of the fraud . . . .);D.H.G. Props., LLC v. Ginn Cos., LLC, 2010 WL 5584464, at *4 (M.D. Fla. 2010).



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alerting defendants to the precise misconduct with which they are charged and protecting

defendants against spurious charges of immoral and fraudulent behavior. 164 Therefore, mere

conclusory allegations of fraud clearly are insufficient.165

Plaintiffs RICO and fraud claims fail when held to these benchmarks. In order to state a

claim for relief under Federal RICO section 1962(c) . . . the plaintiff must allege (1) conduct, (2)

of an enterprise, (3) through a pattern, (4) of racketeering activity.166 Plaintiffs allegations

concerning the alleged RICO enterprise and pattern of racketeering activity merely parrot

the elements of a RICO action under the statute. For example, Plaintiffs indiscriminately allege

that the operations of Microsoft in its international intellectual property enforcement programs

and consequent dealings with Plaintiffs constitute a racketeering operation, and Microsoft

directed and coordinated, and was a member of, the Microsoft RICO Enterprise, which

included Microsoft Guatemala, Business Software Alliance, and Sofier Trading World.167

Plaintiffs further assert that the Microsoft RICO Enterprise engaged in a pattern of racketeering

activity and the following predicate acts of racketeering: mail fraud, wire fraud, acts

interfering with commerce in violation of 18 U.S.C 1951, and fraud.168 Yet, other than the

conclusory assertions that Microsoft defrauded or extorted $70,000 and evaded a $21,000

tax liability, the Amended Complaint is devoid of any facts to substantiate Plaintiffs allegations

that Microsoft engaged in mail fraud, wire fraud, acts interfering with commerce in

violation of 18 U.S.C. 1951, or any type of fraud.

With respect to Plaintiffs threadbare allegations that Microsoft engaged in mail fraud,

wire fraud, or fraud,169 the case ofSinapsis Trading USA, LLC v. Secure Wrap of Miami,

LLC170

is instructive. In Sinapsis, the plaintiffs alleged that defendants and their agents

constitute[d] an enterprise that has committed

mail and wire fraud, extortion, perjury, and other unlawful acts by: (1)publishing false criminal claims . . .; (2) extorting Plaintiffs by making threats ofpersonal injury and threatening to file false criminal charges; and (3) defrauding

164Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505, 1511 (11th Cir. 1988).165Talib v. Skyway Comms. Holding Corp., 2005 WL 1610707, at *4 (M.D. Fla. 2005).166In re Mouttet, 2013 WL 2111283, at *10 (citing Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S.479, 496 (1985)).167 Am. Complaint, 58-59 (emphasis added).168 Am. Complaint, 61, 64 (emphasis added).169See Am. Complaint, 64.170 2013 WL 1455824, at *4-7 (S.D. Fla. 2013).



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Plaintiffs by diverting sales and harming [plaintiffs] reputation.171

The defendant moved to dismiss, contending that the complaint was not pled with

particularity.172 The court granted the motion, noting that no single allegation [in the complaint]

suffices to provide the who, what, where, when, and why of any aspect of the fraud, and that,

at no point, is the hallmark of a fraud claim a false representation that was relied on by the

[p]laintiffs even articulated.173 The court found the alleged mail fraud and wire fraud

insufficient, because the complaint did not specify the dates of the communications; what

precise statements were made to whom or by whom; where they were made; or whether that

person spoke for any one of the [d]efendants.174 Similarly, the court rejected as insufficient the

allegations of false criminal affidavits and false statements, because plaintiffs did not allege

what defamatory statements were made, how they were false, and who was misled.175

Here, as in Sinapsis, Plaintiffs allegations of mail fraud, wire fraud, and fraud are

equally deficient, because they are unsubstantiated and lack any detail about what, when, where,

and how they might have occurred (i.e., when, why, where, and how Microsoft used the mail

for the purpose of executing [a fraudulent] scheme or artifice;176 when, why, where, and how

Microsoft use[d] . . . interstate wires in furtherance of [a fraudulent] scheme; 177 when, why,

where, and how Microsoft carried out a fraudulent scheme to extort monies from its licenses

under ostensible copyright policing and enforcement;178 when, why, where, and how Microsoft

create[d] the false appearance that multiple independent parties had vetted Microsoftsallegations of infringement, etc.179). Nor does the Amended Complaint adequately describe

what the scheme sought to accomplish (and whether that involves an intent to defraud).180

Moreover, Plaintiffs conclusory assertions that Microsofts sworn declarations contained

171 2013 WL 1455824, at *4.172Sinapsis, 2013 WL 1455824, at *1.173Sinapsis, 2013 WL 1455824, at *5 (emphasis added); see also In re MasterCard Intl, 313F.3d 257, 263 (5th Cir. 2002).174Sinapsis, 2013 WL 1455824, at *5; see also Leonard v. StuartJames Co., Inc., 742 F.Supp.653, 659 (N.D. Ga. 1990) (dismissing securities fraud claims for similar reasons).175Sinapsis, 2013 WL 1455824, at *5.176See Sinapsis, 2013 WL 1455824, at *4 (citation and internal quotation marks omitted).177See Sinapsis, 2013 WL 1455824, at *4 (citation and internal quotation marks omitted).178See Am. Complaint, 18.179See Am. Complaint, 75.180See Sinapsis, 2013 WL 1455824, at *5.



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false statements do not salvage their RICO and fraud claims, because, in many instances, the

Amended Complaint (a) does not identify the specific statements in the declarations that

allegedly are false; or (b) much less, explain how or why any such statements are false or

fraudulent, including by providing factual substantiation for the imprecise and deficient

assertions that Plaintiffs held all licenses required or complied with Microsofts software

licensing compliance reports.181 But, most importantly, Plaintiffs do not because they cannot

allege with particularity the hallmark of a fraud claim -- a false representation that was relied

on by Plaintiffs.182 Stated differently, Plaintiffs cannot allege any injury or harm that they

incurred in reliance on a false representation made to them by Microsoft (i.e., how that reliance

defrauded Plaintiffs in making the Settlement Payment or entering into the Settlement

Agreement).183

Plaintiffs allegations that Microsoft engaged in acts interfering with commerce in

violation of 18 U.S.C. 1951 are equally deficient. Section 1951 provides that

Whoever in any way or degree obstructs, delays, or affects commerce or themovement of any article or commodity in commerce, by robbery or extortion orattempts or conspires so to do, or commits or threatens physical violence to anyperson or property in furtherance of a plan or purpose to do anything in violationof this section shall be fined under this title or imprisoned not more than twentyyears, or both.184

As referenced in 1951, extortion is defined as obtaining property from another, with his

consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color

of official right.185 Plaintiffs allege that, on April 27, 2012, Microsoft appeared at Plaintiffs

b

Documents

13 22131 018 Motion to Dismiss Amended Complaint