In CMG Holdings Group v. Wagner, 15-CV-5814 (Oetken, J.)(September 7, 2016) the plaintiff, an experiential advertising company represented by Eaton & Van Winkle partner Lawrence Steckman sued several companies and former officers and employees for $60 million RICO damages arising from the alleged looting of the plaintiff, over a five-year period, as well as for the destruction of hard copy and computer files, as the individual defendants established, by theft and otherwise, a competing company.
In a 27-page opinion and order, Judge J. Paul Oetken of the U.S District Court in the Southern District of New York not only denied defendants’ motion to dismiss plaintiff’s three RICO claims, but denied as well, their motion to dismiss almost all of plaintiff’s other claims.
Referring to the complaint as “sprawling” and having pleaded the underlying schemes “in deep detail,” Judge Oetken explained that plaintiff, having pled “pervasive and particularized allegations of fraudulent behavior,” the complaint “plausibly alleged” the existence of a long-term, conspiratorial criminal agreement. The court refused to dismiss plaintiff’s claim for ten times compensatory damages [punitive damages] for all damages arising from non-RICO predicate crimes (for which treble damages are being sought).
Due to the “comprehensive nature” of the alleged scheme to deprive the owners of profits, defendants’ alleged extensive efforts to conceal their conduct, and the “chutzpah” with which Defendants allegedly executed their schemes – the court stated: “this case may present a rare occasion where punitive damages may potentially be justified.” The court also sustained plaintiff’s claims of misrepresentation and unfair competition, theft of corporate opportunities, breach of fiduciary duty (and aiding and abetting same), and tortious interference with contract, business relationships and prospective advantage.