Court Revives Civil RICO Lawsuit Against Major Consulting Firm
According to reporting from Bloomberg Law, Jay Alix, of New York City based financial services company AlixPartners, received a favorable decision in a civil RICO case in a federal appeals court. The United States District Court for the Southern District of New York has revived Mr. Alix’s federal civil RICO lawsuit against McKinsey & Co., the multi-billion management consulting firm. Here, our West Palm Beach RICO claims lawyers highlight the key things to know about this lawsuit.
Background: Civil RICO Lawsuit Over (Allegedly) Concealed Conflicts of Interest
Jay Alix filed a federal civil RICO lawsuit against McKinsey & Co. on the grounds that the management consulting firm allegedly secured lucrative contracts, in large part, because it concealed conflicts of interest. The contracts in questions were largely related to corporate bankruptcy work, including the bankruptcy filing of major companies such as SunEdison Inc.
Federal Court Originally Dismissed the Civil RICO Lawsuit
A federal court in New York initially dismissed the civil RICO lawsuit that Mr. Alix filed against McKinsey & Co. Notably, federal and state civil racketeering laws have notoriously high pleading standards. It is far harder to prove a civil RICO violation than it is to prove mere fraud or otherwise improper conduct. A significant number of civil RICO lawsuits do not survive a motion to dismiss.
In order to get through the initial motion to dismiss in a civil RICO lawsuit, a plaintiff must be prepared to submit a comprehensive pleading. Among other things, a civil RICO plaintiff must allege facts that support that the defendant engaged in a pattern of racketeering activity as part of an enterprise. The lower court determined that Mr. Alix failed to meet this standard.
Revived on Appeal: Civil RICO Lawsuit May Proceed
Upon reviewing the specific facts on the case, the United States District Court for the Southern District of New York determined that the lower court erred in its dismissal of the civil RICO claim at the pleading stage. Notably, the appeals court emphasized that courts must “draw all reasonable inferences” in favor of the plaintiff during the pleading stage of the process.
The appeals court found that the court failed to give Mr. Alix’s civil RICO pleading the proper weight. In drawing favorable inferences on his behalf, the New York federal appeals court determined that it was plausible that he would eventually prevail in litigation. As such, his civil RICO lawsuit against McKinsey & Co. has been revived and will be allowed to move forward.
Contact Our West Palm Beach Civil RICO Attorneys Today
At Pike & Lustig, LLP, our Florida civil RICO lawyers are committed to providing the highest level of legal representation to our clients. If you have specific questions about civil RICO litigation and motions to dismiss, we can help. Call us now or connect with one of our attorneys online to set up your strictly private consultation. Our law firm provides civil RICO representation throughout South Florida, including in West Palm Beach, Jupiter, Fort Lauderdale, Miami, and Miami Beach.