Polar Air Cargo Worldwide Wins Dismissal of Civil RICO and Other Claims
August 31, 2023
On August 30 2023, the U.S. District Court for the Southern District of New York dismissed all claims brought against Cravath client Polar Air Cargo Worldwide, Inc. (“Polar”) by Cargo on Demand, Inc. (“COD”) alleging violations of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”) and other claims brought under New York state law.
Polar is an international cargo airline and joint venture between Atlas Air Worldwide Holdings, Inc. and DHL. COD alleged that from 2014 to 2021, there was an agreement between Polar’s former freight forwarder customer, COD, and several former members of Polar’s senior management, wherein COD paid what it called “consulting fees” to LLCs owned by the Polar executives as a condition of doing business with Polar. COD further alleged that after entering into a partnership with Polar, under which it shared commercially sensitive information, and ceasing payment of those fees, Polar took a series of actions which harmed COD’s business, including terminating the agreement between the companies.
COD brought claims against Polar under RICO and New York state common law. Cravath filed a motion to dismiss COD’s complaint in January 2023, arguing that COD’s substantive RICO claim did not allege a RICO enterprise because it did not allege Polar was distinct from the other members of the RICO enterprise, the former Polar executives and their LLCs. Cravath also contended that COD’s complaint failed to allege a pattern of racketeering activity, in part because COD failed to plead wire fraud with particularity. Cravath also argued that COD’s RICO conspiracy claim should be dismissed for those same reasons and the Court should decline to exercise supplemental jurisdiction over COD’s state law claims.
In his opinion, Judge Jesse M. Furman agreed with Cravath’s arguments that COD had not alleged a RICO enterprise or a pattern of racketeering activity. With respect to the RICO enterprise, Judge Furman ruled that COD’s alleged enterprise consisted of Polar associating with its own employees and companies controlled by Polar management, and that did not satisfy RICO’s distinctness requirement. As to the pattern of racketeering, the Court rejected each of COD’s alleged predicate acts and held that COD failed to satisfy Rule 9(b)’s heightened pleading standard as to its wire fraud claims.
The Cravath team was led by partners Wes Earnhardt and Benjamin Gruenstein and practice area attorney Lindsay J. Timlin. Mila Gauvin II also worked on this matter.
The case is Cargo on Demand, Inc. v. Polar Air Cargo Worldwide, Inc., No. 22‑cv‑10243 (S.D.N.Y.).
Related Practices & Industries
People
- Photo
-
-
J.D., 2004, University of North Carolina School of Law
-
B.A., 2000, University of North Carolina at Chapel HillPhi Beta Kappa
- New York
Education
Admitted In
- Photo
-
-
J.D., 1999, Harvard Law Schoolmagna cum laude
-
A.B., 1996, Harvard CollegePhi Beta Kappa, summa cum laude
- New York
- District of Columbia
Education
Admitted In
- Photo
-
-
J.D., 2009, Columbia Law SchoolHarlan Fiske Stone Scholar
-
B.A., 2004, University of Virginia
- New York
Education
Admitted In
Related News
Deals & Cases
October 03, 2022
Buckeye Wins Affirmance of Dismissal of Claims Challenging its Acquisition by IFM
On October 3, 2022, the Supreme Court of the State of Delaware issued an order affirming the Delaware Court of Chancery’s dismissal of claims brought against Cravath clients Buckeye Partners, L.P., Buckeye GP LLC, and Buckeye GP LLC’s board of directors (collectively, “Buckeye”) by a former unitholder, Walter E. Ryan, Jr.
Deals & Cases
August 29, 2022
Williams Wins Interest and Fee Motion Against ETE Following Judgment for $410 Million Contractual Breakup Fee
On August 25, 2022, the Delaware Court of Chancery granted in full Cravath client The Williams Companies, Inc.’s (“Williams”) motion for interest, attorneys’ fees and expenses, totaling more than $185 million at the time the motion was taken under submission. The decision followed post‑trial discovery, briefing and oral argument between January and May 2022.
Deals & Cases
August 11, 2022
Morgan Stanley Wins Dismissal of Claims with Prejudice in Lawsuit Related to Italian Shipping Company’s Restructuring
On August 5, 2022, the New York Supreme Court, Commercial Division, dismissed with prejudice a lawsuit brought by Moby S.p.A., one of the world’s largest passenger shipping companies, against Cravath client Morgan Stanley and two of its employees. The lawsuit was related to Moby’s restructuring proceeding in Milan, Italy.
Deals & Cases
July 14, 2022
Starz Wins Appeal Affirming Timeliness of Copyright Infringement Claims
On July 14, 2022, the U.S. Court of Appeals for the Ninth Circuit issued a precedential decision affirming the U.S. District Court for the Central District of California’s holding that the Copyright Act did not impose a time‑based bar on damages for copyright infringement claims separate from the three‑year statute of limitations and that, therefore, the copyright infringement claims brought by Cravath client Starz Entertainment, LLC (“Starz”) were timely.
