Verschleiser v. Frydman

Background

Pro se plaintiff Eli Verschleiser sued former business partner Jacob Frydman and numerous other individuals and entities. Verschleiser alleged that, after he separated from a shared real estate venture with Frydman, the defendants carried out a coordinated campaign to harm and disparage him and his businesses. The alleged conduct included publishing disparaging websites, videos, emails, and internet posts; hacking into Verschleiser’s computer and obtaining a list of business contacts; distributing allegedly false statements; and using lawsuits and court filings to harm him.

The complaint asserted claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Lanham Act, the Computer Fraud and Abuse Act (CFAA), and the Electronic Communications Privacy Act (ECPA), as well as claims under New York law for fraud, interference with prospective business relations, injurious falsehood, prima facie tort, and intentional infliction of emotional distress. The defendants collectively filed five motions to dismiss under Federal Rules of Civil Procedure 12(b)(2), 12(b)(6), 9(b), and 41(b).

Personal Jurisdiction

The Levick Defendants and Davis moved to dismiss for lack of personal jurisdiction, meaning that the court lacked authority over them. The court found that Verschleiser’s opposition did not address personal jurisdiction at all. It therefore concluded that he had abandoned his position that the court had jurisdiction over Davis and the Levick Defendants and granted the motions to dismiss their claims on that ground.

Statutes of Limitations

The court concluded that all claims were time-barred based on the allegations in the complaint. It found that the alleged RICO scheme was apparent, at the latest, in 2015, when Verschleiser allegedly encountered press statements, internet postings, mass emails, and litigation-related conduct. Because civil RICO claims generally have a four-year limitations period, the court concluded that those claims expired in 2019.

The court applied a six-year period through the doctrine of laches to the Lanham Act claims and concluded that they accrued in 2015. It concluded that the CFAA and ECPA claims, both based on the alleged April 2015 computer incident, were untimely under their two-year limitations periods. The New York fraud, injurious falsehood, tortious interference, intentional infliction of emotional distress, and prima facie tort claims were also untimely under the limitations periods the court applied to them. The court rejected Verschleiser’s assertions that the misconduct was ongoing or had occurred recently because those assertions were vague, conclusory, undated, or concerned conduct unrelated to his alleged injuries.

Pleading Deficiencies

The court also ruled that the complaint failed to state a claim under Rule 12(b)(6), which tests whether a complaint adequately alleges a legally viable claim. It found that the roughly 300-paragraph complaint repeatedly referred to “the defendants” without identifying what each of the 23 defendants allegedly did. The court stated that some defendants were not connected to particular wrongdoing and that allegations concerning others were too sparse or conclusory. These defects violated Rule 8’s requirement of a short and plain statement giving defendants fair notice.

The court separately addressed each category of claim. It concluded that the RICO claims did not adequately allege the required pattern of qualifying racketeering acts, and that the RICO conspiracy claims failed because the complaint did not adequately allege a substantive RICO violation. The Lanham Act claims failed because Verschleiser did not adequately identify a registered or unregistered trademark entitled to protection, and allegations about his name and likeness did not state a false-endorsement theory.

The CFAA claims failed because the complaint did not allege the kind of computer-related damage or loss required by the statute. The alleged loss of the value of an email list and lost business opportunities did not show harm to the computer, its data, or a computer service, and the complaint did not allege the required $5,000 loss. The CFAA conspiracy claims failed for the same reason. The ECPA claims failed because the complaint did not allege that communications were intercepted while they were being transmitted; obtaining a stored list of email addresses was not enough under the court’s analysis.

The common-law fraud claim failed because the complaint did not describe many alleged misrepresentations with the particularity required by Rule 9(b), and it did not allege that Verschleiser himself relied on the statements. The court explained that reliance by his investors or business associates was not enough. The tortious-interference claim failed because Verschleiser did not identify a specific business relationship or anticipated transaction. The injurious-falsehood and prima-facie-tort claims failed because he did not identify special damages with enough detail. The intentional-infliction-of-emotional-distress claim failed because he provided no specific facts supporting his assertion of severe emotional distress; the court also noted that he had not responded to the defendants’ argument concerning that claim.

Disposition

The court held that all of the claims were time-barred and inadequately pleaded. It granted all defendants’ motions to dismiss under Rule 12(b)(6) and, where applicable, Rule 9(b). It also granted the Rule 12(b)(2) motions to dismiss for lack of personal jurisdiction as to Davis and the Levick Defendants.

Verschleiser requested permission to amend the complaint. The court denied that request because amendment would be futile, particularly because the claims were clearly time-barred and Verschleiser had already brought similar litigation and had opportunities to revise his allegations. The court dismissed the complaint with prejudice and directed the Clerk to close the case.