Wilson v. Dantas

13-367-cv
Wilson v. Dantas
In the
United States Court of Appeals
For the Second Circuit
________
A UGUST TERM 2013
No. 13‐367‐cv
R OBERT E. WILSON, III,
Plaintiff‐Appellant,
v.
D ANIEL VALENTE D ANTAS , O PPORTUNITY EQUITY
PARTNERS, L TD., FORMERLY KNOWN AS CVC/OPPORTUNITY
E QUITY PARTNERS, L TD., O PPORTUNITY INVEST II, INC.,
C ITIBANK, N.A., INTERNATIONAL E QUITY INVESTMENTS , INC.,
C ITIGROUP V ENTURE C APITAL INTERNATIONAL B RASIL, L.L.C.,
C ITIGROUP V ENTURE C APITAL INTERNATIONAL B RASIL, L.P.,
Defendants‐Appellees.
________
Appeal from the United States District Court
for the Southern District of New York.
No. 12 CV 3238 ― George B. Daniels, Judge.
________
A RGUED: D ECEMBER 12, 2013
D ECIDED: MARCH 6, 2014
________

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Before: C ABRANES , HALL , and C HIN, Circuit Judges.
________
Plaintiff‐appellant Robert E. Wilson, III appeals from the
January 7, 2013 judgment of the District Court for the Southern
District of New York (George B. Daniels, Judge) granting the motion
to dismiss of defendant‐appellee Citibank, N.A., and all related
Citibank entities for failure to state a claim upon which relief can be
granted. The complaint alleges that the Citibank defendants
engaged in tortious conduct and breached contractual obligations
owed to Wilson, resulting in his failure to receive compensation
purportedly owed to him in connection with private equity
investments in Brazil.
We hold that the District Court had jurisdiction to hear the
case under the Edge Act, 12 U.S.C. § 632, because Wilson’s claims
arose out of a foreign financial operation, and that it properly
dismissed Wilson’s claims against the Citibank defendants pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
Accordingly, we AFFIRM the judgment of the District Court.
________
TERRANCE G. R EED, Lankford & Reed, PLLC,
Alexandria, VA (Peter F. Langrock, Devin
McLaughlin, Langrock, Sperry & Wool, LLP,
Middlebury, VT; Martin F. Gusy, Gusy Van der
Zandt LLP, New York, NY, on the brief), for Robert
E. Wilson, III.
Philip C. Korologos, Boies, Schiller & Flexner
LLP, New York, NY, for Daniel Valente Dantas,

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Opportunity Equity Partners, Ltd., Opportunity
Invest II, Inc.
C ARMINE D. B OCCUZZI (Howard S. Zelbo,
Anthony M. Shults, on the brief), Cleary Gottlieb
Steen & Hamilton LLP, New York, NY, for
Citibank, N.A., International Equity Investments,
Inc., Citigroup Venture Capital International Brasil,
LLC, Citigroup Venture Capital International Brasil,
LP.
________
JOSÉ A. C ABRANES , Circuit Judge:
Plaintiff‐appellant Robert E. Wilson, III appeals from the
January 7, 2013 judgment of the District Court for the Southern
District of New York (George B. Daniels, Judge) granting the motion
to dismiss of defendant‐appellee Citibank, N.A. and all related
Citibank entities (the “Citibank defendants”) for failure to state a
claim upon which relief can be granted. The complaint alleges that
the Citibank defendants engaged in tortious conduct and breached
contractual obligations owed to Wilson, resulting in his failure to
receive compensation purportedly owed to him in connection with
private equity investments in Brazil.
We hold that the District Court had jurisdiction to hear the
case under the Edge Act, 12 U.S.C. § 632, because Wilson’s claims
arose out of a foreign financial operation, and that it properly
dismissed Wilson’s claims against the Citibank defendants pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
Accordingly, we AFFIRM the judgment of the District Court.

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BACKGROUND
Wilson’s complaint alleges the following facts, which are
presumed to be true for the purposes of this appeal. While
employed by Citibank in the 1990s, Wilson designed an investment
program to create a large private‐equity fund targeting government‐
owned Brazilian companies that were being privatized. Beginning
in 1997, with the approval of Citibank’s upper management, Wilson
created a limited partnership, CVC/Opportunity Equity Partners, LP
(the “Partnership”), as an umbrella organization to oversee the
investment program. The Partnership was comprised of the limited
partner, Citibank through its subsidiary International Equity
Investments, Inc. (“IEII”), and the general partner, Opportunity
Equity Partners, Ltd. (“OEP”), an entity Wilson created with the
assistance of a Brazilian investment advisor Daniel Valente Dantas
and his related entities (the “Opportunity defendants”).
Pursuant to the Limited Partnership Agreement, OEP was
charged with managing and administering the underlying funds
into which the Partnership’s investors placed money for the private
equity investments. The co‐investors in the Partnership were IEII,
Brazilian pension funds, and the Opportunity defendants. Under
the terms of the Operating Agreement, each investor would receive
a pro rata ownership interest in the stock of the Partnership’s
portfolio companies.
In 1997, Wilson voluntarily resigned from Citibank, and
relocated to Brazil to participate in the general management of OEP.
Prior to joining OEP, Wilson personally negotiated an employment
agreement with Dantas, under which Wilson was entitled to 5% of
the “carried interest,” i.e., 5% of the total profits from the
investments owed to OEP as general partner. Wilson also entered
into OEP’s Shareholder Agreement, which provided that OEP

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would have 100 shares, of which Wilson and three other founding
principals each acquired one share. The remaining ninety‐six shares
were owned by a Dantas‐controlled entity. Each of the individual
shareholders and Dantas were made Directors of OEP, and devoted
their full time to managing the investments. From 1997 through
2008, the Partnership made ten large investments in Brazilian
companies, resulting in substantial profits for the Citibank
defendants and the Opportunity defendants.
In 2005, Citibank, through its wholly‐owned subsidiary IEII,
allegedly terminated OEP’s status as general partner, and appointed
CVC Brasil LLC, an IEII subsidiary, as the successor general partner.
This led to litigation among the Citibank defendants, Dantas, and
OEP, culminating in a confidential settlement agreement in April
2008, to which Wilson was not privy. The settlement resulted in the
winding down of the private‐equity investments and distribution of
the accompanying profits.
On March 23, 2012, plaintiff commenced the present suit in
New York state court against the Citibank defendants and the
Opportunity defendants. On April 26, 2012, Citibank removed the
case to the District Court pursuant to the Edge Act, 12 U.S.C. § 632.1
The claims in Wilson’s complaint stem from the defendants’ alleged
failure to honor contractual commitments to pay him for his work at
OEP. On January 7, 2013, the District Court granted the motion to
dismiss all claims asserted against the Citibank defendants pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and declined
1 The relevant portion of 12 U.S.C. § 632 states that
all suits of a civil nature at common law or in equity to which any corporation
organized under the laws of the United States shall be a party, arising out of
transactions involving international or foreign banking . . . or out of other
international or foreign financial operations . . . shall be deemed to arise under the
laws of the United States, and the district courts of the United States shall have
original jurisdiction of all such suits.

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to exercise supplemental jurisdiction over the remaining state‐law
claims asserted against the Opportunity defendants. This timely
appeal followed.
DISCUSSION
We review de novo a district court’s order granting a motion to
dismiss under Rule 12(b)(6), “accepting as true all allegations in the
complaint and drawing all reasonable inferences in favor of the non‐
moving party.” Gonzalez v. Hasty, 651 F.3d 318, 321 (2d Cir. 2011).
To survive a Rule 12(b)(6) motion to dismiss, the complaint must
include “enough facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim will have “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.” Iqbal, 556 U.S. at 678. Although all
allegations contained in the complaint are assumed to be true, this
tenet is “inapplicable to legal conclusions.” Id.
A. Jurisdiction
Although not raised by either party, we must “take[] it upon
ourselves to determine whether removal jurisdiction existed even
where that issue was not itself appealed.” In re Methyl Tertiary Butyl
Ether Prods. Liab. Litig., 488 F.3d 112, 121 (2d Cir. 2007). To be
removable under the Edge Act, 12 U.S.C. § 632, an action must:
(1) be a civil suit, (2) have a federally chartered corporation as a
party, and (3) arise “‘out of transactions involving international or
foreign banking, [including territorial banking], or out of
international or foreign financial operations.’” Am. Int’l Grp., Inc. v. Bank
of Am. Corp., 712 F.3d 775, 780–81 (2d Cir. 2013) (emphasis supplied)
(quoting 12 U.S.C. § 632).

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The Edge Act does not define the term “international or
foreign financial operations,” nor has it been defined in our case law.
Under the plain meaning of the phrase, however, Edge Act
jurisdiction extends to those foreign operations that consist of “[t]he
act or process of raising or providing funds,” including “[t]he
raising of funds by issuing capital securities (shares in the
business).” See Black’s Law Dictionary 707 (9th ed. 2009) (defining
“financing” and “equity financing”); see also Stamm v. Barclays Bank
of N.Y., 960 F. Supp. 724, 728 (S.D.N.Y. 1997) (defining “financial
operations” as “those operations that provide . . . capital or loan
money as needed to carry on business” (internal quotation marks
omitted)). In addition, “the suit must arise out of an offshore
banking or financial transaction of that federally chartered corporation”
that is a party to the suit. Am. Int’l Grp., 712 F.3d at 784 (emphasis
supplied).
In the instant case, the first two requirements are met because
this is a civil suit and Citibank is a federally chartered U.S. bank.
With regard to the third requirement, Wilson alleges that this case
involves an international investment program that made numerous
transactions involving private‐equity investments in Brazilian
companies. Pursuant to this program, the Citibank defendants
allegedly contributed $750 million in return for stock in the portfolio
companies, and they managed partnership funds from 2005 onward.
Wilson claims that the Citibank defendants violated fiduciary duties
and contractual obligations owed to him pursuant to the program.
Accordingly, jurisdiction is proper under the Edge Act.
B. Rule 12(b)(6) Dismissal
Turning to the merits, we address Wilson’s tort and contract
claims in turn.

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1. Tort Claims
The District Court dismissed Wilson’s claim in Count One for
breach of fiduciary obligation for failure to allege the existence of a
fiduciary duty between Wilson and the Citibank defendants. Wilson
argues that this holding is erroneous because Citibank owed a
fiduciary duty to OEP, which should extend to Wilson because “the
relation between OEP, Ltd. and Wilson was not that of a mere
shareholder to a corporation [as the District Court held], but rather
that of a quasi‐partner in a quasi‐partnership.” Appellant’s Br. 53.
As Citibank rightly asserts, however, the relationship between
Wilson and OEP does not create a fiduciary relationship between
Wilson and the Citibank defendants. A fiduciary relationship
between OEP’s shareholders and Citibank cannot arise by virtue of
the organizational structure outlined in OEP’s Shareholder
Agreement, to which Citibank was not a party. Cf. United States v.
Falcone, 257 F.3d 226, 234 (2d Cir. 2001) (noting that “a fiduciary
duty cannot be imposed unilaterally by entrusting a person with
confidential information” (internal quotation marks omitted)). In
the absence of mutual intent on the part of Wilson and the Citibank
defendants to create a fiduciary relationship, any reliance or trust
Wilson unilaterally placed in the Citibank defendants was
insufficient to create a fiduciary relationship. Cf. Bianchi v. Midtown
Reporting Serv., Inc., 959 N.Y.S.2d 788, 789 (4th Dep’t 2013) (noting
that the existence of a partnership depends upon, inter alia, the
express or implied intent of the parties).2
Wilson also claims in Count One that the Citibank defendants
aided and abetted the Opportunity defendants’ breach of their
2 Because Wilson was not in a fiduciary relationship with Citibank, his constructive fraud
claim also fails. See Klembczyk v. Di Nardo, 705 N.Y.S.2d 743, 744 (4th Dep’t 1999) (“The elements of
constructive fraud are the same as those for actual fraud, except that the element of scienter is
replaced by a fiduciary or confidential relationship between the parties.”).

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fiduciary duty to him. Specifically, Wilson alleges that the Citibank
defendants excluded Wilson from their litigation with Dantas and
OEP, and then entered into a confidential settlement agreement
precluding Wilson from obtaining the information necessary to
enforce his right to “carried interest.” Yet no authority exists for the
proposition that a litigating party aids and abets an injury to a third
party by entering into a confidential settlement agreement in the
normal course of litigation.
In the alternative, Wilson alleges that the Citibank defendants
instructed Dantas not to pay Wilson the “carried interest” that had
been promised to him. Such an allegation is implausible, however,
as the Citibank defendants had no incentive or reason to prevent the
Opportunity defendants from paying their employees out of profits
earned by OEP, nor does Wilson suggest one. As the District Court
rightly found, the Citibank defendants’ strategic decisions in their
litigation against Dantas and OEP were motivated by nothing more
than appropriate economic self‐interest.3
In Count Two, Wilson asserts a fraudulent concealment claim
against the Citibank defendants, also premised on Citibank’s
negotiation of a confidential settlement agreement with the
Opportunity defendants. The District Court dismissed this claim
for, inter alia, failure to allege an intent to defraud. See TVT Records
v. Island Def Jam Music Grp., 412 F.3d 82, 90–91 (2d Cir. 2005)
(fraudulent concealment requires a plaintiff to allege, inter alia, an
intent to defraud). Wilson argues on appeal that such intent exists
because, by keeping the settlement confidential, Citibank sought to
eliminate Wilson’s ability to obtain the compensation purportedly
owed to him under the Limited Partnership Agreement. Again,
such a motive is neither alleged in the Complaint, nor plausible. The
3 For similar reasons, Wilson’s tortious interference claims in Count Three, which are
premised upon allegations of misconduct during the course of litigation, also fail.

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far more plausible inference is that Citibank’s motive was to end
nearly four years of contentious litigation with Dantas, and, as
discussed next, Wilson’s right to seek compensation stemmed not
from the Limited Partnership Agreement, but solely from OEP’s
Shareholder Agreement and Wilson’s agreement with Dantas.4
2. Contract Claims
Wilson’s contract claims similarly lack merit. Wilson asserts a
breach of contract claim in Count Seven against CVC Brasil—the
Citibank subsidiary that took over as General Partner in 2005—on
the theory that, under the Limited Partnership Agreement, CVC
Brasil assumed the obligation to compensate Wilson when it
replaced OEP as General Partner.
Wilson’s reliance on the Limited Partnership Agreement is
misplaced inasmuch as the agreement, to which Wilson was not a
party, expressly disclaims the existence of any third‐party
beneficiaries. See Limited Partnership Agreement § 13.15 (“This
Agreement . . . is entered into for the sole and exclusive benefit of
the General Partner and the Limited Partners . . . and no other
Person will have any rights hereunder . . . .”). Moreover, there is no
evidence that any provisions in the Limited Partnership Agreement
grant enforceable rights to any entity other than the General and
Limited Partner.
Indeed, courts within this Circuit have consistently held that
“even where a contract expressly sets forth obligations to specific
individuals or categories of individuals, those individuals do not
have standing to enforce those obligations by suing as third‐party
beneficiaries when the contract contains a negating clause.” In re
4 As Wilson has not alleged any actionable torts, his claim for civil conspiracy in Count Five
also fails. See Anesthesia Assocs. of Mount Kisco, LLP v. N. Westchester Hosp. Ctr., 873 N.Y.S.2d 679, 685
(2d Dep’t 2009) (requiring allegations of an “actionable, underlying tort” to plead civil conspiracy).

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Lehman Bros. Holdings Inc., 479 B.R. 268, 275–76 (S.D.N.Y. 2012). For
instance, in India.Com, Inc. v. Dalal, 412 F.3d 315 (2d Cir. 2005), we
held that “the mention of [a third party] in the contract as a broker
entitled to a commission is insufficient to confer third‐party status
where the parties themselves are explicit that they did not intend to
create third‐party beneficiaries.” Id. at 322; cf. Diamond Castle
Partners IV PRC, L.P. v. IAC/InterActiveCorp, 918 N.Y.S.2d 73, 75 (1st
Dep’t 2011) (construing negating clause to exclude plaintiffs “in light
of the numerous contract provisions granting plaintiffs enforceable
rights”). Accordingly, in light of the negating clause, and lack of any
other clause affirmatively granting him rights, Wilson may not rely
upon the Limited Partnership Agreement to enforce contractual
rights owed to him and purportedly assumed by CVC Brasil.
Wilson also alleges several quasi‐contract claims in Counts
Four and Eight, including promissory estoppel and unjust
enrichment. “To establish a viable cause of action sounding in
promissory estoppel, a plaintiff must allege,” among other elements,
“a clear and unambiguous promise.” Rogers v. Town of Islip, 646
N.Y.S.2d 158, 158 (2d Dep’t 1996). The sole allegation of a “promise”
in Wilson’s complaint is that, “[i]n reliance upon Citibank’s
judgment and assurances that Plaintiff would receive the
compensation promised in writing by Dantas, Plaintiff relocated . . .
to Brazil.” Joint App’x 24. Whether this “assurance” amounted to a
promise by Citibank to indemnify Wilson in the event that Dantas
breached the contract is neither clear nor unambiguous. With
regard to Wilson’s unjust enrichment claim, it was the Opportunity
defendants and Dantas, not the Citibank defendants, who allegedly
owed Wilson the “carried interest.” Since the Citibank defendants
were never contractually obligated to pay Wilson, they were not
enriched at his expense.

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CONCLUSION
To summarize, we hold that:
(A1) Under the Edge Act, the term “international or foreign
financial operations” encompasses those foreign operations
that consist of the act or process of raising or providing funds,
including the raising of funds by issuing capital securities.
(A2) Jurisdiction under the Edge Act is proper here. This is a civil
suit, Citibank is a federally chartered U.S. bank, and Wilson’s
claims arise out of numerous transactions involving Citibank’s
private‐equity investments in Brazilian companies.
(B) The District Court properly dismissed Wilson’s tort and
contract claims pursuant to Rule 12(b)(6) for failure to state a
claim upon which relief can be granted.
For the reasons stated above, we AFFIRM the judgment of the
District Court, entered January 7, 2013.

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