Free Motion to Dismiss - District Court of California - California

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NICOLLE L. JACOBY (admitted pro hac vice) [email protected] OLIVIER P. STRAUCH (admitted pro hac vice) [email protected] DECHERT LLP 30 Rockefeller Plaza New York, NY 10112-2200 Telephone: 212.698.3500 Facsimile: 212.698.3599 H. JOSEPH ESCHER III (No. 85551) [email protected] FRANCE JAFFE (No. 217471) [email protected] DECHERT LLP One Maritime Plaza Suite 2300 San Francisco, CA 94111-3513 Telephone: 415.262.4500 Facsimile: 415.262.4555 Attorneys for Defendants AIG MATCHED FUNDING CORP., AIG FINANCIAL SECURITIES CORP., BANQUE AIG, AIG FINANCIAL PRODUCTS CORP., AMERICAN INTERNATIONAL GROUP, INC., and BANQUE AIG

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

RICHARD T. THIERIOT, an individual, Plaintiff, v. AIG MATCHED FUNDING CORP., AIG FINANCIAL SECURITIES CORP., AIG FINANCIAL PRODUCTS CORP., AMERICAN INTERNATIONAL GROUP, INC., BANQUE AIG, and DOES ONE THROUGH THIRTY, inclusive, Defendants.

Case No. C-07-05069 JW RS Action Filed: October 2, 2007 DEFENDANTS' NOTICE OF MOTION AND MOTION TO DISMISS AND STRIKE; MEMORANDUM OF POINTS AND AUTHORITIES (Fed. R. Civ. P. 9(b), 12(b)(6), 12(f)) Date: Time: Dep't: Judge: April 7, 2008 9:00 a.m. Courtroom 8, 4th Floor Honorable James Ware

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C-07-05069 JW RS

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TABLE OF CONTENTS Page MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 1 INTRODUCTION AND................................................................................................................. 1 SUMMARY OF ARGUMENT ...................................................................................................... 1 FACTUAL BACKGROUND ......................................................................................................... 3 ALLEGATIONS OF THE COMPLAINT...................................................................................... 6 ARGUMENT .................................................................................................................................. 8 I. PLAINTIFF'S CLAIMS ARE TIME-BARRED.................................................... 8 A. New York Law Governs This Dispute........................................................ 8 B. The Fraud Cause Of Action Is Time-Barred............................................. 11 C. The Unjust Enrichment Cause Of Action Is Untimely ............................. 13 D. The UCL Claim Is Time-Barred ............................................................... 14 II. PLAINTIFF FAILS TO ALLEGE ANY FALSE STATEMENT BY ANY OF THE DEFENDANTS OR ANY DUTY TO DISCLOSE AND FAILS TO PLEAD FRAUD WITH PARTICULARITY UNDER RULE 9(B) .............. 15 A. No Statements Are Attributed To Any Defendant.................................... 15 B. The Complaint Fails To Meet The Standards of Fed. R. Civ. P. 9(b)....... 15 C. The Contractual Disclaimers Bar The Fraud Claim.................................. 16 D. Plaintiff Does Not And Cannot Allege Any Duty To Disclose, And Thus Has No Claim Based On Omissions ................................................ 18 E. The Written Contracts Demonstrate That Allegedly "Concealed" Facts Were Actually Expressly Disclosed. ............................................... 19 III. PLAINTIFF'S UNJUST ENRICHMENT CLAIM FAILS BECAUSE THE RELATIONSHIP IS GOVERNED BY CONTRACT ......................................... 20 IV. THE CALIFORNIA UNFAIR BUSINESS PRACTICES LAW ("UCL") DOES NOT APPLY ............................................................................................. 22 V. PLAINTIFF HAS WAIVED HIS RIGHT TO JURY TRIAL..................................... 23 CONCLUSION ............................................................................................................................. 23

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TABLE OF AUTHORITIES Page Cases Abbatiello v. Monsanto Co., 522 F. Supp. 2d 524 (S.D.N.Y. 2007)............................................................................ 15, 16, 18 Asian Vegetable Research & Dev. Ctr. v. Institute of Int'l Educ., 944 F. Supp. 1169 (S.D.N.Y. 1996)........................................................................................... 19 Casa Herrera, Inc. v. Beydoun, 32 Cal. 4th 336 (2004) ............................................................................................................... 20 CIBC Bank & Trust Co. [Cayman] Ltd. v. Credit Lyonnais, 270 A.D.2d 138, 704 N.Y.S.2d 574 (1st Dep't 2000) ............................................................... 18 Clark-Fitzpatrick, Inc. v Long Island R. R. Co., 70 N.Y.2d 382, 521 N.Y.S.2d 653 (1987) ................................................................................. 20 Community Cause v. Boatwright, 124 Cal. App. 3d 888 (1st Dist 1981) ........................................................................................ 13 Consul Ltd. v. Solide Enters, Inc., 802 F.2d 1143 (9th Cir. 1986)................................................................................................ 9, 10 Continental Airlines Inc. v. Mundo Travel Corp., 412 F. Supp. 2d 1059 (E.D. Cal. 2006)...................................................................................... 22 Conwill v. Arthur Andersen LLP, 12 Misc. 3d 1171A, 2006 N.Y. Misc. LEXIS 1527 (June 21, 2006)................................... 17, 18 Cooper v. Pickett, 137 F.3d 616 (9th Cir. 1997)...................................................................................................... 16 Cumming v. City of San Bernardino Redevelopment Agency, 101 Cal. App. 4th 1229 (4th Dist. 2002).................................................................................... 13 DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242 (2d Cir. 1987)..................................................................................................... 16 Echostar DBS Corp. v. Gemstar-TV Guide Int'l, Inc., No. 05 Civ. 8510 (DAB), 2007 U.S. Dist. LEXIS 11346 (S.D.N.Y. Feb. 8, 2007) .................. 17 Emrich v. Touche Ross & Co., 846 F.2d 1190 (9th Cir. 1988)...................................................................................................... 3 Enron Corp. v Bank of Amer., 292 B.R. 752 (Bankr. S.D.N.Y. 2003) ....................................................................................... 18 Fagan v. First Sec. Invs., Inc., No. 04 Civ. 1021 (LTS) (THK), 2006 U.S. Dist. LEXIS 66065 (S.D.N.Y. Sept. 15, 2006) .......................................................................................................... 15 Feldman v. Granger 255 Md. 288, A.2d 421 (1969) ......................................................................................................................... 13 Florida ex. rel. Butterworth v. Exxon Corp., 109 F.3d 602 (9th Cir. 1997)...................................................................................................... 20 Gerlinger v. Amazon.com, Inc., 311 F. Supp. 2d 838 (N.D. Cal. 2004) ....................................................................................... 20

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TABLE OF AUTHORITIES Page Harriman v. Northern Sec. Co., 197 U.S. 244 (1905) ................................................................................................................... 22 Harsco Corp. v Segui, 91 F.3d 337 (2d Cir. 1996)......................................................................................................... 17 Helfer v. Hubert, 208 Cal. App. 2d 22 (1962)........................................................................................................ 11 Hobart v. Hobart Estate Co., 26 Cal. 2d 412 (1945) ................................................................................................................ 11 Hokama v. E.F. Hutton & Co., 566 F. Supp. 636 (C.D. Cal. 1983)............................................................................................ 16 Hughes Elecs. Corp. v. Citibank Delaware, 120 Cal. App. 4th 251 (2004) ................................................................................................ 9, 10 Hughes v. BCI Int'l Holdings, No. 05 Civ. 9085 (HB), 2007 U.S. Dist. LEXIS 21666 (S.D.N.Y. Mar. 27, 2007) ......................................................... 15 In re Chateaugay Corp., 10 F.3d 944 (2d Cir. 1993) ........................................................................................................ 20 International Multifoods Corp. v. Commercial Union Ins. Co., 98 F. Supp. 2d 498 (S.D.N.Y. 2000).......................................................................................... 10 J.A.O. Acquisition Corp. v. Stavitsky, 18 A.D.3d 389, 795 N.Y.S.2d 569 (1st Dep't 2005) ................................................................. 15 Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) ..................................................................................................................... 8 Knievel v. ESPN, 393 F.3d 1068 (9th Cir. 2005)...................................................................................................... 3 Malmsteen v. Berdon, LLP, 477 F. Supp. 2d 655 (S.D.N.Y. 2007)........................................................................................ 18 Matusovsky v. Merrill Lynch, 186 F. Supp. 2d 397 (S.D.N.Y. 2002)........................................................................................ 20 McKeown v. First Interstate Bank, 194 Cal. App. 3d 1225 (1987).................................................................................................... 12 McNamara v. City of New York, No. 05 CV 6026 (SJ) (RML), 2007 U.S. Dist. LEXIS 25015 (E.D.N.Y. Mar. 30, 2007) .......................................................................................................... 15 Medimatch, Inc. v. Lucent Techs., Inc., 120 F. Supp. 2d 842 (N.D. Cal. 2000) ....................................................................................... 22 Melville v. Kennedy, 18 Cal. 3d 335 (1976) ................................................................................................................ 18 Mills v. Polar Molecular Corp., 12 F.3d 1170 (2d Cir. 1993)................................................................................................. 15, 16 Moore v. Kayport Package Express, Inc., 885 F.2d 531 (9th Cir. 1989)...................................................................................................... 16 iii
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Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459 (1992) ......................................................................................................... 8, 9, 10 Okura & Co. (Am.) v. Careau Group, 783 F. Supp. 482 (C.D. Cal. 1991)............................................................................................. 23 Rapoport v. Asia Elecs. Holding Co., 88 F. Supp. 2d 179 (S.D.N.Y. 2000).......................................................................................... 20 Remington Rand Corp. v. Amsterdam-Rotterdam Bank, N.V., 68 F.3d 1478 (2d Cir. 1995)....................................................................................................... 18 Resolution Trust Corp. v. BVS Dev., Inc., 42 F.3d 1206 (9th Cir. 1994)...................................................................................................... 19 Ritchie Capital Mgmt., L.L.C. v. Coventry First LLC, No. 07 Civ. 3494 (DLC), 2007 U.S. Dist. LEXIS 51081 (S.D.N.Y. July 17, 2007) ........................................................................................................... 15 River Colony Estates Gen. P'ship. v. Bayview Fin. Trading Group, Inc., 287 F. Supp. 2d 1213 (S.D. Cal. 2003) ...................................................................................... 11 Roots Ready Made Garments v. Gap Inc., No. C 07-03363 CRB, 2007 U.S. Dist. LEXIS 81108 (N.D. Cal. Oct.18, 2007) ................ 13, 14 Rothman v. Gregor, 220 F.3d 81 (2d Cir. 2000)....................................................................................................... 3, 4 Seippel v. Jenkens & Gilchrist, PC, 341 F. Supp. 2d 363 (S.D.N.Y. 2004).................................................................................. 18, 19 Shemtob v. Shearson, Hammill & Co., 448 F.2d 442 (2d Cir. 1971)....................................................................................................... 16 Stern v. Leucadia Nat'l Corp., 844 F.2d 997 (2d Cir. 1988)....................................................................................................... 16 Taylor v. Philip Morris, Inc., No. C 03-0758MMC, 2003 U.S. Dist. LEXIS 18807 (N.D. Cal. Oct. 20, 2003) ........................ 4 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003).................................................................................................... 16 Von Brimer v. Whirlpool Corp., 536 F.2d 838 (9th Cir. 1976)...................................................................................................... 11 Von Grabe v. Sprint PCS, 312 F. Supp. 2d 1285 (S.D. Cal. 2003) ...................................................................................... 16 Wender v. Gilberg Agency, 276 A.D.2d 311, 312 N.Y.S.2d 40 (1st Dep't 2000) ................................................................. 14 Statutes and Rules Fed. R. Civ. P. 9(b) ......................................................................................................................... 2 Fed. R. Civ. P. 12(b)(6).................................................................................................................... 1 Fed. R. Civ. P. 12(f) ......................................................................................................................... 1 Cal. Bus. & Prof. Code § 17200 ............................................................................................ 1, 2, 14 Cal. Bus. & Prof. Code § 17208 .................................................................................................... 14 Cal. C.C.P. § 338(d) ....................................................................................................................... 11 iv
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Cal. C.C.P. § 339(1) ....................................................................................................................... 13 NY CPLR § 202 ............................................................................................................................. 10 NY CPLR § 213(2) ........................................................................................................................ 14 NY CPLR § 213(8) ........................................................................................................................ 11 NY CPLR § 214(2) ........................................................................................................................ 14 N.Y. General Business Law § 349 ................................................................................................. 14 Other Authorities 3 Witkin, Cal. Proc. 4th, Actions, § 508 (1996)............................................................................ 14 Restatement Second of Conflicts of Laws, section 187 .................................................................... 8

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NOTICE OF MOTION AND MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on April 7, 2008, in Courtroom 8, of the above-titled United States District Court, at 9:00 a.m. or as soon thereafter as the matter may be heard, before the Honorable James Ware, defendants AIG Matched Funding Corp. ("AIG-MF"), AIG Financial Securities Corp. ("AIG-FS"), Banque AIG ("Banque"), AIG Financial Products Corp. ("AIGFP"), and American International Group, Inc. ("AIG, Inc.") (collectively, "Defendants" or "AIG"), will, and hereby do, move this Court, pursuant to Federal Rule of Civil Procedure 12(b)(6), for an order dismissing plaintiff Richard T. Thieriot ("Plaintiff")'s claims of fraud, unjust enrichment, and violation of the California Unfair Business Practices Act, California Business & Professions Code section 17200. Defendants also move to strike the jury demand pursuant to Rule 12(f). MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION AND SUMMARY OF ARGUMENT Almost eight years ago, Plaintiff's family trusts and family limited liability company entered into a set of transactions for which Plaintiff claimed significant tax benefits. Complaint

17 ("Compl.") ¶¶ 12, 26. That set of transactions involved the services of a major accounting firm, 18 Arthur Andersen ("Andersen"), and a nationally-recognized law firm, Sidley Austin Brown & 19 Wood ("Sidley"), neither of which is named as a defendant in this case. Id. ¶¶ 14, 16. As early as 20 February, 2001, Plaintiff alleges that he received an opinion letter from Sidley advising him that 21 despite the existence of an IRS notice that tax losses from inflated basis transactions would not be 22 allowable as deductions, Sidley's view was that the IRS would likely recognize the losses from 23 the transactions arranged by Plaintiff. Id. ¶¶ 22-24. Nearly four years ago the Internal Revenue 24 Service disallowed the tax losses claimed by the family entities in an amount over $50,000,000, 25 giving rise to the damages alleged in this Complaint. Id. ¶ 12 ("Plaintiff has been assessed 26 approximately $56 million in back taxes, interest and penalties as a result"), id. ¶ 30 ("Plaintiff 27 has been injured by the $7 million in fees and commissions charged for the transaction . . ." and 28
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listing other alleged injuries). Despite the obvious passage of time and absence of all the players who actually advised Plaintiff in these transactions, Plaintiff has now brought a complaint against a variety of AIG entities, none of whom provided any such advice. In particular, Plaintiff provides no factual allegations whatsoever that AIG gave him tax, legal or investment advice, advised him to enter into the transactions for tax purposes or otherwise, advised him to claim tax losses in connection with the transactions, or even suggested that tax losses could be claimed in connection with the transactions. In stark contrast to the roles played by Andersen and Sidley as Plaintiff's accounting, tax and legal advisers, AIG's role in these transactions was well-defined and strictly limited: AIG served as a counterparty on option transactions, and issued notes. This arm's-length relationship was governed by written agreements with Plaintiff's family entities. Plaintiff relies on those written agreements in his Complaint, but fails to attach them as exhibits or to describe their terms. See, e.g., id. ¶ 12. All of Plaintiff's claims are barred by the applicable statutes of limitations because, among other things, judicially-noticeable court filings show that he started litigation with the IRS regarding these transactions more than three years prior to filing this action. Each of the three causes of action also is defective for other, substantive reasons. The first cause of action, for fraud, fails because the Complaint fails to allege a single false statement by AIG, much less comply with the stringent particularity requirements of Federal Rule of Civil Procedure 9(b). Moreover, Plaintiff cannot state a claim based on an alleged "duty to disclose" due to the express contractual disclaimers of any fiduciary relationship or reliance on AIG by Plaintiff, found in the written agreements that Plaintiff failed to attach to the Complaint. The second cause of action, for unjust enrichment, fails because written contracts govern the alleged relationship. The third cause of action, for violation of the California Unfair Business Practices Act, California Business & Professions Code section 17200 ("UCL"), is improperly pled because New York law, not California law, applies to all claims relating to the agreements and relationship.

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FACTUAL BACKGROUND In March of 2000, Banque entered into written agreements with each of ten Thieriot family trusts (the "Trusts") and one written agreement with the J.P. Thieriot Investment Group, LLC (the "LLC"). See Compl. ¶¶ 12, 17. Plaintiff repeatedly refers to these contracts, which are integral to all three of his claims, see, e.g., Compl. ¶¶ 9, 11, 12, 14, 16, 17, 18, 19, 23, 28, 34, 38. The agreements, whose authenticity is not in dispute, are thus properly considered by this Court on this motion, and do not convert Defendants' motion to a motion for summary judgment. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) ("We have extended the `incorporation by reference' doctrine to situations in which the plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint"). 1 The agreements explicitly confirm that Banque and the other Defendants did not advise Plaintiff in any way, shape or form with respect to the transactions Plaintiff now complains were improper. Plaintiff alleges no breach of contract by Banque or the other Defendants in connection with those transactions. Pursuant to these agreements, each of which specifies application of New York law, Banque and the Trusts and LLC bought and sold call options (the "Basket Options"). In a separate U.S. Tax Court proceeding, Parrott Enterprises, LLC, Angelica Thieriot, Tax Matters Partner, v. Commissioner, No. 1930-04 (U.S. Tax Court) (the "Tax Court Action"), Plaintiff has stated that these Basket Options were purchased to protect his family's wealth against the wild fluctuations the stock market experienced during this period and to make a profit. See Request for Judicial Notice ("RJN"), Ex. 1 (July 8, 2004 Petition for Readjustment) at 5(j), (k). 2 Plaintiff The eleven agreements are identical in all material respects. Accordingly, for the convenience of the Court, Defendants provide herewith the relevant documents comprising the agreement between Banque and the LLC as illustrative of all the agreements. See Declaration of Olivier P. Strauch ("Strauch Decl.") and Exhibits A-F thereto. Defendants respectfully request that this Court take judicial notice of the Tax Court Action. Judicial notice of matters of public record, such as other judicial proceedings and pleadings filed therein, is proper and does not convert this motion into one for summary judgment. See, e.g., Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988); Rothman v. Gregor, 220 F.3d 3
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has denied that the purpose of the Basket Option transactions was to avoid legally-owed taxes. Id. at 5(a), (m). AIG's only alleged involvement in this case arises out of Banque's execution of the eleven Basket Options with the Trusts and the LLC. AIG-FS acted as the registered U.S. brokerdealer on the trades; AIG, Inc. guaranteed its subsidiary Banque's obligations. See Strauch Decl. Ex. A (ISDA Master Agreement, Exhibit A thereto (General Guarantee of American International Group, Inc.)). The Basket Options consisted of (1) Banque buying from a Trust or the LLC a call option, which gave Banque the right to acquire an interest in a defined set or "basket" of largely media-industry stocks at a determined strike price, and (2) Banque selling to a Trust or the LLC a less expensive call option, which gave the Trust or LLC the right to acquire an interest in the same "basket" of stock, at a higher strike price, with the same expiration dates as the options Banque bought. Strauch Decl. Exs. B-C. At the same time, each Trust and the LLC purchased a zero-coupon note issued by AIG-MF (and guaranteed by AIG, Inc.) (the "Notes"). The Notes were in amounts sufficient to cover the maximum net obligation that could be owed to Banque under the Basket Options, and were pledged as collateral to secure those obligations. See Strauch Decl. Exs. D-F. Plaintiff does not allege that AIG-FP played any role in the transactions, but alleges only that AIG-FP "and/or . . . its subsidiaries" have "involvement" in the Son of Boss transactions in California. Compl. ¶ 8. The Basket Options were undertaken pursuant to, and explicitly governed by the terms of, eleven essentially identical ISDA Master Agreements between Banque and each Trust and the LLC. Each ISDA Master Agreement, including the LLC's agreement (executed by Plaintiff on behalf of the LLC), expressly provides that Banque and the other Defendants were not fiduciaries for, or advisors to, the Trusts or LLC: Party B [i.e., the Trusts and the LLC, in their respective agreements] hereby represents to Party A [i.e., Banque] that:81, 92 (2d Cir. 2000). This Court may also properly take judicial notice of the allegations contained in Plaintiff's previously-filed Tax Court Action, including for purposes of analyzing the timing of notice for statute of limitations purposes. See., e.g., Taylor v. Philip Morris, Inc., No. C 03-0758MMC, 2003 U.S. Dist. LEXIS 18807, at *4 (N.D. Cal. Oct. 20, 2003). 4
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. . . Party B is solely responsible for Party B's trading or investment decisions with respect to this Agreement and each Transaction entered into under this Agreement; and . . . Party B is not relying on [Banque] or any affiliate thereof in connection with any such decisions, and neither [Banque] nor any such affiliate is acting as an advisor to or fiduciary of Party B in connection with any Transaction under this Agreement . . . Strauch Decl. Ex. A (ISDA Master Agreement, Schedule, §5(f)(v)) (emphasis added)). The Trusts and LLC further represented that: . . . Party B has sufficient knowledge, experience and access to professional advice to make Party B's own legal, tax, accounting and financial evaluation of the merits and risks of entering into this Agreement and each Transaction hereunder, has reviewed the documentation relating to this Agreement and each Transaction hereunder carefully with Party B's financial, legal and tax advisors ...Party B acknowledges and understands that Transactions entered into under this Agreement may involve complex legal, tax and regulatory considerations that are highly dependent on facts and circumstances related to Party B, that [Banque] will have insufficient information regarding such facts and circumstances to determine the legal, tax and regulatory consequences of such Transactions for Party B and that Party B, together with its legal, tax and financial advisors, will be solely responsible for determining and evaluating such consequences and making its own independent decisions with respect to such Transactions based on such determinations and evaluations and any other factors or considerations deemed relevant by Party B or its advisors. Strauch Decl. Ex. A (ISDA Master Agreement, Schedule, §5(f)(vi)) (emphasis added). In addition, in each of the ISDA Master Agreements, the LLC and the Trusts expressly acknowledged that: . . . In connection with this Transaction ... [Banque] has paid a fee to Arthur Andersen LLP for its assistance in arranging the Transaction. [Banque] has paid fees to Arthur Andersen LLP for arranging similar transactions in the past and may do so again in connection with future transactions. Strauch Decl. Ex. A (ISDA Master Agreement, Schedule, §5(f)(viii) (emphasis added)). Each ISDA Master Agreement further provides that it is to "be governed by and construed in accordance with New York law." Strauch Decl. Ex. A (ISDA Master Agreement, Schedule, §4(h)). 3 In addition, each ISDA Master Agreement specifies in relevant part that the "Master
3

In addition, New York law is expressly selected in the AIG, Inc. Guarantee, Confirms, Note 5
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Agreement and all Confirmations form a single agreement between the parties" and contains a merger clause stating that the ISDA Master Agreement "constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto." Strauch Decl. Ex. A (ISDA Master Agreement §§ 1(c), 9(a)). The parties to each ISDA Master Agreement waived their right to a jury trial to the extent permitted by applicable law. See Strauch Decl. Ex. A (ISDA Master Agreement, Schedule §4(k)). Although not alleged in the Complaint, on July 8, 2004, Plaintiff filed a petition ("Petition") in the Tax Court Action challenging the IRS's opposition to the tax treatment he had claimed for the transactions. See RJN Ex. 1. More than three years after commencing the Tax Court Action, Plaintiff brings the instant case alleging that Defendants are liable for the penalties assessed by the IRS, as well as punitive damages, attorneys' fees and other professional fees. ALLEGATIONS OF THE COMPLAINT Plaintiff alleges that "[i]n or about 2000, Mr. Thieriot was []presented by his long-time tax and investment advisor at Arthur Andersen LLP . . . with an investment strategy that later became known as the `Son of BOSS.'" Compl. ¶ 12. Despite alleging that the "Son of BOSS" transaction was "presented" to him by Arthur Andersen, Plaintiff asserts in the most general terms that Defendants designed and promoted the transactions to him; that Defendants knew or should have known it would be challenged by the IRS and would not provide the allegedly-promised tax benefits; and that Defendants induced him to enter into the transactions through unspecified advice and omissions. See, e.g., id. ¶¶ 5-12, 16-20, 23-25. Plaintiff alleges that the IRS audited his 2000 tax returns and disallowed the tax losses he had claimed in connection with the transactions. Id. ¶ 26. Plaintiff seeks the return of the fees he allegedly paid in connection with the transactions, consequential damages including costs incurred in responding to the IRS audit, penalties and back taxes, punitive damages, and an injunction enjoining Defendants from, among

Purchase Agreement, Notes, and Pledge Agreement. See Strauch Decl. Ex. A, Exhibit A thereto (AIG, Inc. Guarantee) §8; id. Exs. B-C at 1; id. Ex. D at 8; id. Ex E (Notes §11); id. Ex. F §20. 6
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other things, promoting tax shelters and preparing tax returns involving tax shelters. See id. ¶¶ 10, 30, Prayer for Relief. Plaintiff alleges in conclusory terms that he "reasonably relied on the tax advice, investment advice and professional services rendered by defendants." Compl. ¶ 19. However, the Complaint does not identify a single affirmative statement, allegedly misleading or otherwise, made by any Defendant. In fact, the only affirmative statements alleged in the Complaint are attributed to the law firm Sidley, which has not been named as a defendant. Sidley allegedly "opined that Plaintiff's transactions had lawful tax benefits that were likely to be recognized by the IRS," id. ¶ 16, and "provided a further opinion letter to Mr. Thieriot advising him that, even with the issuance of notice 2000-44, the IRS would likely recognize any losses resulting from Plaintiff's Son of BOSS strategy." Id. ¶ 24. With respect to Defendants AIG-MF, AIG-FS, and Banque, Plaintiff alleges only that they "purposefully established contacts with California in participating in the Son of BOSS transactions." Id. ¶¶ 5, 6, 7. As to AIG, Inc. and AIG-FP, Plaintiff alleges only that they "purposefully established contacts with California through its involvement and/or the involvement of its subsidiary[ies] in the Son of BOSS transactions." Id. ¶¶ 8, 9 (emphasis added). The remaining allegations of the Complaint either refer generically to "Defendants" or "AIG" without attributing any specific conduct or statement to any Defendant, or consist of vague assertions, frequently in the passive voice, that do not attribute any statement to any particular Defendant, or often to any person at all. 4 Although Plaintiff alleges that "defendants made numerous knowingly false affirmative

See, e.g., id. ¶ 12 ( "[a]t the time that Plaintiff considered and entered the strategy, however, it was never referred to [as "Son of BOSS"] and was simply marketed as a sound investment strategy that provided additional, legal tax benefits"); id. ¶ 12 ("Plaintiff, however, was misinformed and misled about the nature and soundness of the Son of BOSS strategy, which in fact, has been determined by the IRS to be an abusive and illegal tax shelter . . ."); id. ¶ 16 ("the documentation and information provided to Plaintiff about the Son of BOSS strategy . . . made it appear to be a sound investment strategy with lawful tax benefits . . ."); id. ¶ 16 ("Plaintiff was specifically advised that the strategy sold to him was a customized, unique investment strategy . . .") (all emphasis added). 7
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representations," the Complaint provides only two purported "examples": "creating documentation to make the Son of BOSS transaction appear to be a legitimate strategy with lawful tax benefits; [and] creating documentation to make the Son of BOSS transaction appear to be a customized and unique transaction created specifically for Plaintiff, when, in fact, it was a strategy mass-marketed to numerous other clients and taxpayers . . . ." Id. ¶ 28. See also, e.g., id. ¶ 17 ("Plaintiff signed, in California, boilerplate documentation presented to them [sic] . . . [which] gave the Son of BOSS transaction the false semblance of a legal and legitimate business investment"). However, Plaintiff does not describe, quote from, or summarize the relevant contents of any such "documentation." Nor does Plaintiff specify who created such documentation, who provided it to Plaintiff, how it was provided to him, or when he received it, let alone specifically allege any statements that were false or misleading. Plaintiff also alleges in non-specific terms that Defendants "concealed," (1) that the transaction was "mass marketed," see id. ¶¶ 14, 16; 23; (2) that unspecified Defendants paid referral fees to Arthur Andersen, see id. ¶¶ 13, 17, 18, 28; (3) that Sidley's opinion letters had been "mass-generated," id. ¶ 28, see also id. ¶ 16; and (4) that the IRS challenged "Son of BOSS" transactions similar to the ones at issue, either before or after the transactions were executed, see id. ¶¶ 21, 22, 23, 28. ARGUMENT I. PLAINTIFF'S CLAIMS ARE TIME-BARRED A. New York Law Governs This Dispute. As a threshold matter, New York law applies to the contracts at issue in this case. Federal district courts apply the choice of law doctrine of the states in which they sit. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). California courts follow the Restatement Second of Conflicts of Laws, section 187, which strongly favors enforcement of choice of law provisions where freely and voluntarily agreed upon. 5 See Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th Plaintiff alleges that the "paperwork was voluminous and highly technical, and it was presented to Plaintiff for signature without any negotiation of any venue, jurisdiction or choice of 8
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459, 465 (1992). California courts will enforce a contractual choice of law provision so long as "the chosen state has a substantial relationship to the parties or their transaction," or "there is any other reasonable basis for the parties' choice of law." Id. at 466. If either test is met, the court will enforce the provision unless "the chosen state's law is contrary to a fundamental policy of California." Id. (emphasis in original). If no conflict exists, the provision is applied; if such a conflict exists, California will apply its own law only if it finds it has a "materially greater interest than the chosen state in the determination of the particular issue." Id. at 465; see also, e.g., Consul Ltd. v. Solide Enters, Inc., 802 F.2d 1143, 1147 (9th Cir. 1986); Hughes Elecs. Corp. v. Citibank Delaware, 120 Cal. App. 4th 251, 259 (2004). Because in many instances there is no conflict between California and New York law, either law could apply with the same result. However, where there is a conflict, this Court should apply New York law to all of Plaintiff's claims, including the fraud claim. Enforcement of a contractual choice of law provision that, as here, states that an agreement "will be governed by and construed in accordance with [New York] law," requires a California court to apply New York law to "to all causes of action arising from or related to their contract." Nedlloyd, 3 Cal. 4th at 468 (emphasis added). "When a rational businessperson enters into an agreement establishing a transaction or relationship and provides that disputes arising from the agreement shall be governed by the law of an identified jurisdiction, the logical conclusion is that he or she

law clauses contained therein." Compl. ¶ 17. There is no allegation that Plaintiff was somehow tricked or coerced into signing the "paperwork." Nor could there be, given express representations that, among other things, the Trusts and LLC had "reviewed the documentation relating to this Agreement and each transaction thereunder carefully with [their] financial, legal and tax advisors and ha[ve] determined that entering into this Agreement and each transaction hereunder is consistent with [their] objectives." See supra p. 5. Indeed, as Plaintiff acknowledged in the ongoing Tax Court Action, he relied on the advice of both legal and tax counsel in entering into the transactions. See RJN, Ex. 1 at 6 (m) (Plaintiff was "advised by its nationally recognized and qualified legal tax adviser that there was substantial authority for the tax positions taken on their tax returns. Moreover, the Thieriot family reasonably relied in good [] faith on its nationally recognized and qualified tax professional that there was a greater than 50 percent likelihood that the tax treatment would be upheld if challenged by the IRS"); id., Ex. 2 (Order dated Oct. 31, 2006) at 1 (concluding that Plaintiff's reliance on advice of counsel defense waived Plaintiff's attorney-client privilege on that issue). 9
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intended that law to apply to all disputes arising out of the transaction or relationship." Id. at 469. Each of Plaintiff's claims clearly arises from the transactions and/or the relationship created by the controlling written agreements ­ the ISDA Master Agreements and Confirms. This Court should enforce the New York choice of law provision selected by the parties in the ISDA Master Agreements as well as in the Confirms, Note Purchase Agreement, Notes, Pledge Agreement and AIG, Inc. Guarantee. The Complaint alleges that AIG, Inc. ­ which acted as guarantor of the obligations of its subsidiaries Banque and AIG-MF ­ has its principal place of business in New York. See Compl. ¶ 9; Strauch Decl. Ex. A (ISDA Master Agreement, Exhibit A thereto (General Guarantee of American International Group, Inc.); id. Exs. B-C at 1; id. Ex. E at 5. "This fact alone is sufficient to establish a `substantial relationship' between New York and the parties as well as a `reasonable basis' for a contractual provision requiring application of New York law." Hughes, 120 Cal. App. 4th at 258 (citation omitted). See also, e.g., Consul Ltd., 802 F.2d at 1147 ("If one of the parties resides in the chosen state, the parties have a reasonable basis for their choice.") Indeed, even where (unlike here) no state's law is expressly selected, courts find New York law a reasonable choice to govern complex commercial transactions involving residents of different states or countries, because "New York is a leading center of banking, commerce and insurance in the United States, and the law developed by its courts is generally recognized and respected in such a light." International Multifoods Corp. v. Commercial Union Ins. Co., 98 F. Supp. 2d 498, 502 (S.D.N.Y. 2000). Finally, this Court should apply New York law including New York's choice of law doctrine and any applicable laws regarding limitation of actions. See Hughes, 120 Cal. App. 4th at 259-265. This Court accordingly should apply New York's so-called "borrowing statute," New York Civil Practice Law and Rules ("CPLR") § 202. CPLR § 202 provides that, for causes of action accruing outside of New York, claims will be subject to the shorter of the applicable statute of limitation of (1) New York, or (2) of the state where the cause of action accrued. See CPLR § 202. Assuming arguendo that Plaintiff has pled any valid claims, they all accrued in California. See, e.g., Compl. ¶¶ 4-10, 12, 14, 17, 26, 30, 35, 38. Thus, the shorter of New York's or California's limitations period applies to each of Plaintiff's claims and bars them. 10
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B.

The Fraud Cause Of Action Is Time-Barred. California's statute of limitations for fraud is three years from "the discovery, by the

aggrieved party, of the facts constituting the fraud . . . ." Cal. C.C.P. § 338(d); see also, e.g., River Colony Estates Gen. P'ship. v. Bayview Fin. Trading Group, Inc., 287 F. Supp. 2d 1213, 1221 (S.D. Cal. 2003). 6 The statute begins to run when "one has knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry." Von Brimer v. Whirlpool Corp., 536 F.2d 838, 848 (9th Cir. 1976) (quoting Hobart v. Hobart Estate Co., 26 Cal. 2d 412, 437 (1945)). "`[W]hen [the] knowledge had by or imputed to plaintiff is such as to compel the conclusion that a prudent man would have suspected the fraud, the court may determine as a matter of law that there has been `discovery.'" Von Brimer, 536 F.2d at 848 (quoting Helfer v. Hubert, 208 Cal. App. 2d 22, 26-27 (1962)). The fraud claim is time-barred. The allegations of the Complaint, as well as the public record of Plaintiff's pending Tax Court Action (commenced in summer 2004), show that Plaintiff was at least on inquiry notice of the alleged fraud significantly before July 8, 2004. Plaintiff alleges that his "tax returns have since been audited by the IRS, with the IRS taking the position that losses from the Son of BOSS facility are not allowable for tax purposes" (Compl. ¶ 26), but he conveniently omits to allege exactly when he was audited by the IRS, or when the IRS notified him that it would disallow the claimed losses. However, Plaintiff was on full notice of the IRS's challenge to the transactions well prior to July 8, 2004, when Plaintiff responded to the IRS's audit by commencing a proceeding in United States Tax Court. See RJN Ex. 1. Plaintiff's Petition reflects his actual knowledge of the IRS' challenge to the transaction and the basis for the alleged fraud, and furthermore attaches the IRS' written notice, dated April 13, 2004, stating the IRS's determination to disallow the claimed tax benefits. See RJN Ex. 1, Exhibit A thereto, New York's limitations period for fraud is the longer of six years from accrual or two years from discovery. See NY CPLR § 213(8). California's statute is the potentially shorter period in application here and thus applies, see supra p. 10. However, even were New York law to apply, Plaintiff's fraud claim is time-barred. AIG's last involvement in any aspect of the challenged transaction took place in 2000, and Plaintiff was clearly on notice of the alleged fraud no later than summer 2004, when he commenced his Tax Court Proceeding. Thus, Plaintiff's claim should have been asserted, at latest, by 2006. 11
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"Notice of Final Partnership Administrative Adjustment." Plaintiff cannot claim that he was not on notice of the IRS's challenge to his transaction, and therefore the entire basis of his fraud claim, at the very latest by the time he commenced his action in Tax Court. As that date is more than three years before Plaintiff filed the Complaint, the fraud claim is time-barred. McKeown v. First Interstate Bank, 194 Cal. App. 3d 1225 (1987) is directly on point. In McKeown, plaintiffs entered into a loan transaction with a bank. The IRS audited plaintiffs' tax returns for the years relevant to the transactions, and subsequently provided a notice of deficiency to plaintiffs. Plaintiffs commenced a proceeding in U.S. Tax Court to challenge the IRS's position, but ultimately lost. Plaintiffs then asserted claims for inter alia fraud, breach of fiduciary duty, and negligence, alleging that the bank had wrongfully induced them to enter into the transaction by representing that plaintiffs would not suffer any tax liability. See McKeown, 194 Cal. App. at 1228. The McKeown Court held that all of plaintiffs' claims were time-barred, concluding that the relevant statutes of limitation ran from when plaintiff knew or should have known the essential facts underlying the claim, and when plaintiffs suffered appreciable and actual harm. Id. at 1229. "[N]otification of the tax deficiency . . . constituted harm sufficient to trigger the running of the statute. . . . The taxpayer to whom a notice of deficiency is sent is put to the choice of paying the deficiency, incurring the expense of petitioning for redetermination, or facing collection by the government. Appellants had at that point suffered appreciable harm." Id. (emphasis added). Furthermore, the McKeown plaintiffs paid attorneys' fees in January 1977 for representation in the tax court proceeding which meant that they "therefore suffered appreciable harm at least as early as January 1977." Id. Finally, the court rejected the argument that the claims did not accrue until the Tax Court rendered a final determination upholding the IRS's challenge to their tax position. See id. at 1231-32. Based on McKeown, Plaintiff was put on notice of his potential claim no later than when he received the IRS's deficiency notice ­ i.e., in April 2004, even before he filed the Tax Court action in July 2004: `Focusing attention on the date . . . when the appellant received the 12
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notice of the tax deficiency . . . from the Appellate Division of the Internal Revenue Service, we are of the opinion that any reasonable and prudent man, being in the place of the appellants, would have known or certainly should have known at that time, that he had sustained legal harm as of that date, if not before. The appellants . . . had known for over three and a half years that the Internal Revenue Service disagreed with their position. Certainly, when they received notice of the tax deficiency assessment . . . it became necessary for them to incur the expense of retaining legal counsel.' Id. at 1230 (quoting Feldman v. Granger 255 Md. 288, 296-297, 257 A.2d 421, 425 (1969)). Moreover, the Complaint alleges that "[p]rior to the time that the Son of BOSS was promoted to Plaintiff, the IRS had issued Notice 1999-59, published December 27, 1999, entitled `Tax Avoidance Using Distributions of Encumbered Property,'" which warned of certain transactions being marketed to taxpayers that consistent of "a contrived series of steps" that created "artificial losses." Compl. ¶ 21 (emphasis added). It further alleges that "[o]n September 5, 2000, the IRS published Notice 2000-44, entitled `Tax Avoidance Using Artificially High Basis,' addressing similar transactions to Notice 1999-59 and warning that the IRS would not allow deductions from transactions "designed to produce noneconomic tax losses by artificially overstating basis." Id. ¶ 22. According to Plaintiff, "[a]s a result of IRS Notices 1999-59 and 2000-44, defendants knew and/or had reason to know that the Son of BOSS transaction was not a legitimate or legal means for declaring capital losses for income tax purposes for Plaintiff." Id. ¶ 23. However, if Defendants were put on notice as to potential IRS challenge to the transactions by public records, then Plaintiff was also. See, e.g., Cumming v. City of San Bernardino Redevelopment Agency, 101 Cal. App. 4th 1229, 1235 (4th Dist. 2002); Community Cause v. Boatwright, 124 Cal. App. 3d 888, 901 (1st Dist 1981). 7 C. The Unjust Enrichment Cause Of Action Is Untimely. Under California law, unjust enrichment and quasi-contract claims are subject to a twoyear statute of limitations. See Cal. C.C.P. § 339(1); see also, e.g., Roots Ready Made Garments v. Gap Inc., No. C 07-03363 CRB, 2007 U.S. Dist. LEXIS 81108, at *12 (N.D. Cal. Oct.18,

In addition, Plaintiff alleges that, in February 2001, Sidley provided him with an "opinion letter[]" that expressly brought IRS Notice 2000-44 to his attention. See Compl. ¶¶ 16, 24. 13
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2007). 8 The statute of limitations for quasi-contractual claims begins to run immediately upon performance of the service at issue. See 3 Witkin, Cal. Proc. 4th, Actions, § 508 (1996) ("When services are performed at the request of another without a contract, the duty implied by law to pay for them arises immediately on performance. Hence the statute begins to run, and the plaintiff may recover only for the value of services rendered within 2 years before the suit is filed.") Any alleged breach of some implied agreement to "provide Plaintiff with a legitimate business investment with lawful tax benefits" (Compl. ¶ 34), or any performance by Plaintiff, i.e., payment of fees, occurred upon execution of the ISDA Master Agreements and Confirms, i.e. at latest on June 14, 2000, when the Basket Options expired and were settled. Plaintiff does not specifically allege the date upon which the Trusts and LLC entered into the agreements with Banque and/or allegedly paid fees, but does allege that the transactions were "[]presented" to him in 2000, and must have been reflected on Plaintiff's tax returns for the year 2000, which the IRS challenged. See Compl. ¶¶ 12, 26. Any alleged performance under, or breach of, an implied agreement must have occurred in 2000, far more than two years before the Complaint was filed. D. The UCL Claim Is Time-Barred. The New York statute of limitation applicable to statutory causes of action, including the statutory unfair competition claim, 9 is three years from injury by the allegedly deceptive act or practice. See NY CPLR § 214(2) (three year statute of limitations for claims under statute); Wender v. Gilberg Agency, 276 A.D.2d 311, 312, 716 N.Y.S.2d 40 (1st Dep't 2000). 10 Again,

New York's limitations period for claims under contract, express or implied, is six years, see NY CPLR § 213(2), and therefore California's shorter statute applies, see supra pp. 10 and 11 n.6. However, even were New York's statute of limitations to apply, the result would be the same, since any action brought after 2006 would be untimely.
9

8

As noted, infra Point IV, Plaintiff's unfair competition claim should have been brought under analogous New York law (i.e., N.Y. General Business Law § 349) and is subject to the shorter of New York's or California's applicable statute of limitation.

California's limitations period for §17200 Unfair Competition Law claims is four years from the time the claim accrued. See Cal. Bus. & Prof. Code § 17208. Because the transactions were completed in 2000, even were California law to apply to this cause of action, it would be timebarred. 14
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according to the Complaint, the transactions were complete in 2000, and the fees he alleges he paid Defendants in connection with the agreements ­ which he alleges as injury ­ well before 2004. Therefore, the UCL claim (or any potential claim under New York unfair competition law) is time-barred. II. PLAINTIFF FAILS TO ALLEGE ANY FALSE STATEMENT BY ANY OF THE DEFENDANTS OR ANY DUTY TO DISCLOSE AND FAILS TO PLEAD FRAUD WITH PARTICULARITY UNDER RULE 9(B) A. No Statements Are Attributed To Any Defendant. Plaintiff's fraud claim fails for the simple reason that the Complaint does not identify a single affirmative statement ­ false or otherwise ­ made by any Defendant. See supra pp. 6-8. With no alleged misrepresentation (and no possible allegation of reliance on any statement), there is no fraud claim. See, e.g., McNamara v. City of New York, No. 05 CV 6026 (SJ) (RML), 2007 U.S. Dist. LEXIS 25015, at *9-11 (E.D.N.Y. Mar. 30, 2007) (dismissing fraud claim where "complaint fails to set forth the specific fraudulent acts, statements, or omissions made by Defendants . . . [and] sets forth only general or conclusory allegations that fraudulent statements were made"); Hughes v. BCI Int'l Holdings, No. 05 Civ. 9085 (HB), 2007 U.S. Dist. LEXIS 21666, at *11 (S.D.N.Y. Mar. 27, 2007) (dismissing cross-claim for fraud that "fails to identify . . . specific misrepresentations made"); Fagan v. First Sec. Invs., Inc., No. 04 Civ. 1021 (LTS) (THK), 2006 U.S. Dist. LEXIS 66065, at *18-19 (S.D.N.Y. Sept. 15, 2006); J.A.O. Acquisition Corp. v. Stavitsky, 18 A.D.3d 389, 391, 795 N.Y.S.2d 569, 571 (1st Dep't 2005). B. The Complaint Fails To Meet The Standards of Fed. R. Civ. P. 9(b). In addition, Federal Rule of Civil Procedure 9(b) requires Plaintiff to plead the details of the alleged fraud with specificity. See, e.g., Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993); see also, e.g., Ritchie Capital Mgmt., L.L.C. v. Coventry First LLC, No. 07 Civ. 3494 (DLC), 2007 U.S. Dist. LEXIS 51081, at *11 (S.D.N.Y. July 17, 2007). Thus, in order to plead a claim of fraud based on affirmative misrepresentations, Plaintiff must "`(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.'" 15
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Abbatiello v. Monsanto Co., 522 F. Supp. 2d 524, 533 (S.D.N.Y. 2007) (quoting Mills, 12 F.3d 1170, 1175 (2d. Cir. 1993)). See also Von Grabe v. Sprint PCS, 312 F. Supp. 2d 1285, 1305 (S.D. Cal. 2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997) (plaintiff alleging fraud must plead the "`who, what, when, [and] where'" of the alleged fraud in order to state a claim); Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107-08 (9th Cir. 2003). Because the Complaint lacks any allegations of affirmative statements by any Defendant, and lacks any other specific, factual allegations of fraud, the Complaint clearly fails to allege fraud as required by Rule 9(b). In addition, conclusory allegations of fraud ­ with which the Complaint is filled, see, e.g., Compl. ¶¶ 12, 14, 15, 16, 19, 20, 23, 28, 29, 31, ­ will not support a claim under Rule 9(b). See, e.g., Shemtob v. Shearson, Hammill & Co., 448 F.2d 442, 444 (2d Cir. 1971); Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989). Furthermore, allegations made "on information and belief," e.g., Complaint ¶¶ 6, 12, 14, 16, 17, 26, are ordinarily insufficient to support a fraud claim under Rule 9(b). See, e.g., Stern v. Leucadia Nat'l Corp., 844 F.2d 997, 1003 (2d Cir. 1988) ("[F]raud pleadings generally cannot be based on information and belief"); Moore, 885 F.2d 531 at 540 ("[A]llegations of fraud based on information and belief usually do not satisfy the particularity requirements under Rule 9(b)"). Finally, Rule 9(b) "is not satisfied where the complaint vaguely attributes the alleged fraudulent statements to "defendants.'" Mills, 12 F.3d at 1175; compare, e.g., Compl. ¶¶ 15 ("defendants failed to register plaintiff's Son of BOSS transaction as a tax shelter"); and id. ¶ 23 ("defendants failed to inform Plaintiff of the illegality of the Son of BOSS tax shelter scheme"). Plaintiff must specifically link alleged statements to individual Defendants; his complete failure to do so is fatal to the fraud claim. See Mills, 12 F3d at 1175; see also, e.g., DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242, 1249 (2d Cir. 1987); Hokama v. E.F. Hutton & Co., 566 F. Supp. 636, 645 (C.D. Cal. 1983). C. The Contractual Disclaimers Bar The Fraud Claim. Furthermore, Plaintiff cannot state any claim based on alleged representations expressly disclaimed in the ISDA Master Agreements. One New York court has already reached this 16
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conclusion regarding the exact same allegations and ISDA Master Agreements at issue here: "In this case, the disclaimer provisions of the [ISDA Master Agreements] sufficiently track the substance of the alleged misrepresentations, negate, and provide a complete defense to any claims that require a finding of representations, reliance or fiduciary duty." Conwill v. Arthur Andersen LLP, 12 Misc. 3d 1171A, 2006 N.Y. Misc. LEXIS 1527, at *12-13 (June 21, 2006) (internal quotation omitted). See also, e.g., Harsco Corp. v Segui, 91 F.3d 337, 345-46 (2d Cir. 1996) (fraud claim properly dismissed: where contracting party had disclaimed representations outside contract, party could not claim reliance on such alleged representations); Echostar DBS Corp. v. Gemstar-TV Guide Int'l, Inc., No. 05 Civ. 8510 (DAB), 2007 U.S. Dist. LEXIS 11346, at *11 (S.D.N.Y. Feb. 8, 2007) ("if the allegations of a complaint are contradicted by documents incorporated in the complaint, the documents control and the court need not accept the allegations of the complaint as true"). In Conwill, the plaintiff alleged that he was approached by Arthur Andersen with a transaction that would supposedly provide a significant tax advantage. The transaction involved plaintiff entering into option transactions with Sumitomo Bank, and assigning the options to another entity, and then claiming a tax loss. Despite alleged representations and legal opinions promising tax benefits, plaintiff's tax treatment of the transaction was later challenged by the IRS. 11 Plaintiff sued Andersen and the other parties to the transaction, including Sumitomo, alleging that defendants had fraudulently induced him to enter in to the transactions. See Conwill, 2006 N.Y. Misc. LEXIS 1527, at *1-7. However, as part of the transaction, the parties executed an assignment and assumption agreement in which the plaintiff represented among other things that the parties thereto "were not acting as his fiduciaries with respect to either the FX Option Agreements or with respect to his decision to enter into" the agreement itself. Id., at *6 (emphasis added). On this basis, the court dismissed plaintiff's claims against Sumitomo for, inter alia, breach of fiduciary duty, fraud in

Although not expressly so named in Conwill, the transaction as described therein was also a so-called "Son of BOSS" transaction. 17
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the inducement, negligent misrepresentation and professional malpractice, breach of contract to provide tax and investment advisory services, and civil conspiracy. Id., at *12-13. The same result should apply here. D. Plaintiff Does Not And Cannot Allege Any Duty To Disclose, And Thus Has No Claim Based On Omissions. A plaintiff alleging fraud by concealment must specify "`(1) what the omissions were; (2) the person responsible for the failure to disclose; (3) the context of the omissions and the manner in which they misled the plaintiff; and (4) what defendant obtained through the fraud.'" Abbatiello, 522 F. Supp. 2d at 533 (quoting Malmsteen v. Berdon, LLP, 477 F. Supp. 2d 655, 664-65 (S.D.N.Y. 2007)). Plaintiff fails to do so, and the fraud claim fails on this basis as well. Equally important, "a concealment of facts supports a cause of action for fraud only if the non-disclosing party has a duty to disclose." Remington Rand Corp. v. Amsterdam-Rotterdam Bank, N.V., 68 F.3d 1478, 1483 (2d Cir. 1995). See also, e.g., Melville v. Kennedy, 18 Cal. 3d 335, 346-7 (1976)("[b]eing grounded solely on omissions, the validity of the present count depends on allegations that would establish some duty to disclose on the part of defendant"). "[A]n arm's length transaction with a large financial institution acting as the counterparty on an option transaction, will not generally give rise to a fiduciary duty unless one is created by agreement." Conwill, N.Y. Misc. LEXIS 1527, at *12-13 (citing Enron Corp. v Bank of Amer., 292 B.R. 752 (Bankr. S.D.N.Y. 2003)). Indeed, in an arms-length commercial transaction such as the one at issue, "no ... fiduciary relationship will arise absent extraordinary circumstances." Id. (citing CIBC Bank & Trust Co. [Cayman] Ltd. v. Credit Lyonnais, 270 A.D.2d 138, 139, 704 N.Y.S.2d 574 (1st Dep't 2000)). Based on the express contractual disclaimers present here, see supra pp. 4-5, 8 n.5, Plaintiff ca