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Kim v. Kimm

United States Court of Appeals, Second Circuit

February 27, 2018

Daniel Kim, Plaintiff-Appellant-Cross-Appellee,
v.
Michael S. Kimm d/b/a Kimm Law Firm, Michael-Hyun W. Lee, Hyung Suk Choi a/k/a Stephen Choi, Chul Ho Park a/k/a/ Charlie Park, Jin Young Chung a/k/a Jamie Chung, Charlie and You, Inc. d/b/a Sik Gaek, Swan U.S.A., Inc. d/b/a Sik Gaek, Defendants-Appellees-Cross-Appellants, Michael-Hyun W. Lee, Defendant-Appellee, Hyung Suk Choi, AKA Stephen Choi, Defendant. MICHAEL-HYUN W. LEE, Defendant-Appellee, HYUNG SUK CHOI, AKA STEPHEN CHOI, Defendant.

          Submitted: October 23, 2017

         Plaintiff-Appellant Daniel Kim appeals from a judgment entered in favor of Defendants-Appellees Michael S. Kimm, Michael-Hyun W. Lee, Hyung Suk Choi, Chul Ho Park, Charlie Park, Jin Young Chung, Charlie and You, Inc., and Swan U.S.A., Inc., by the United States District Court for the Eastern District of New York (Allyne R. Ross, Judge). Kim alleges that the defendants were members of two enterprises that conspired to sue him for, inter alia, trademark infringement, and brings claims against them pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. In two opinions, the district court granted the defendants' motion to dismiss, denied the plaintiff's motions to disqualify the defendants' counsel and for leave to amend his amended complaint, and denied the defendants' motion for sanctions. We agree with the district court's resolution of these motions. Accordingly, the judgment of the district court is

          Daniel Kim, Haworth, NJ, Plaintiff- Appellant-Cross-Appellee, pro se.

          Michael S. Kimm, Adam Garcia, Kimm Law Firm, Englewood Cliffs, NJ, for Defendants-Appellees-Cross-Appellants.

          Before: Jacobs, Sack, and Parker, Circuit Judges.

          Sack, Circuit Judge.

         The plaintiff Daniel Kim brings this action pursuant to the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., alleging that the defendants engaged in a scheme to fraudulently bring suit against him for, inter alia, trademark infringement. The defendants moved to dismiss the action for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), arguing that their prior acts, as part of litigation they brought against the plaintiff, do not constitute predicate acts for purposes of RICO. Kim subsequently moved to disqualify defendant Michael S. Kimm as counsel for the defendants and sought leave to further amend his amended complaint.

         The United States District Court for the Eastern District of New York (Allyne R. Ross, Judge) dismissed Kim's action for failure to state a claim, agreeing with the defendants that Kim could not sustain a RICO action based on the defendants' prior litigation activities. The district court also denied Kim's motion for leave to amend and to disqualify Kimm as counsel for the defendants. The defendants then moved for sanctions pursuant to Federal Rules of Civil Procedure Rule 11. The district court denied the motion.

         Kim, now proceeding pro se, appeals the district court's judgment dismissing his action and the district court's denial of his motions for leave to amend and to disqualify Kimm. Kimm and his co-defendants cross-appeal, challenging the district court's denial of sanctions against Kim. We agree with the district court that the alleged litigation activities do not constitute RICO predicate acts. We also conclude that the district court did not abuse its discretion in denying Kim leave to amend, Kim's motion to disqualify, and the defendants' motion for sanctions. The judgment of the district court is therefore affirmed.

         BACKGROUND

         I. The Sik Gaek I Lawsuit

         The instant action arises from an earlier litigation, Sik Gaek, Inc. v. Yogi's II, Inc., et al, No. 10-CV-4077 (ARR) (E.D.N.Y. 2010) ("Sik Gaek I), which was filed in the United States District Court for the Eastern District of New York on September 7, 2010. In Sik Gaek I, Sik Gaek, Inc., the owner and operator of a restaurant, sued Daniel Kim and the restaurant Kim owned, Yogi's II, Inc., over the use of a trademark that Sik Gaek, Inc. allegedly owned. Sik Gaek, Inc. alleged that Kim and Yogi's II, Inc. had failed to pay a $2 million fee pursuant to a trademark license agreement and that, "in a sinister scheme, " Kim had attempted to circumvent the license and register the trademark himself. Appellant App'x at 48-52. Sik Gaek, Inc. brought claims against Kim and Yogi's II, Inc. for, inter alia, breach of contract, fraudulent trademark registration, and trademark infringement. The district court granted summary judgment in favor of the defendant Kim on August 14, 2014. Sik Gaek, Inc. v. Yogi's II, Inc., 2014 WL 4063403, 2014 U.S. Dist. LEXIS 113165 (E.D.N.Y. Aug. 14, 2014). On August 21, 2014, the remaining claims against the defendant Yogi's II, Inc. were dismissed by agreement of the parties.

         II. District Court Proceedings

         On August 15, 2015, Daniel Kim, a lawyer and a defendant in Sik Gaek I, filed the instant action, bringing claims against parties in the Sik Gaek I lawsuit: the owner of Sik Gaek, Inc., his wife and business partner, their two attorneys, and an accountant. In his amended complaint, Kim alleges that the defendants were members of two criminal enterprises that conspired to sue him for trademark infringement and breach of contract in Sik Gaek I. According to Kim, the Sik Gaek I lawsuit was nothing more than an "ill-conceived scheme or artifice-designed to "extort $2 million" from him. Appellant App'x at 9. Kim alleges that the defendants completed false paperwork to pose as the owners of a trademark, licensed the trademark to a third-party, and then sued Kim for violating the licensing agreement. Kim claims that these false legal documents were intended to mislead the district court and therefore were predicate acts of obstruction of justice, mail fraud, and wire fraud that constituted a pattern of racketeering activity. Kim also brought a RICO conspiracy claim, alleging that "the entire scheme or artifice could never have been set in motion without the express agreement, cooperation and coordination of each individual defendant and his assigned role." Appellant App'x at 40.

         On September 11, 2015, the defendants filed a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The defendants argued that Kim had failed adequately to allege a pattern of racketeering activity, as required to state a RICO claim. The defendants raised other arguments supporting their motion to dismiss, based on, inter alia, the doctrines of collateral estoppel and res judicata. Kim subsequently moved to disqualify Kimm as counsel in this litigation and to bar him from participating in any defendant's defense other than his own. Kim also opposed the defendants' motion to dismiss and moved for leave to file a second amended complaint.

         By unpublished opinion and order dated August 9, 2016, the district court granted the defendants' motion to dismiss. Appellant App'x at 257-76. The court decided that Kim had failed to state a RICO claim because he had not alleged predicate acts constituting a pattern of racketeering activity. The court found that most of the alleged predicate acts concerned litigation activity in SikGaek I -specifically, the preparing, signing, and filing of declarations by Chul Ho Park, Michael Kimm, and Hyung Suk Choi, all of whom are defendants in the instant action-and reasoned that "[w]ell-established precedent and sound public policy preclude such litigation activities from forming the basis for predicate acts under [RICO]." Dist. Ct. Op. at 8, Appellant ...


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