RICO Class Action Defeated

David Brian Weinberg

Case Conclusion Date:May 1, 2011

Practice Area:Class Action

Outcome:Summary Judgment for the Defense

Description:In a summary judgment order issued by U.S. District Court Judge Lisa Godbey Wood, the Court dismissed the plaintiffs’ putative class action alleging violations of Georgia’s Racketeer Influenced and Corrupt Organizations (RICO) statute premised on mail fraud and wire fraud. The case focused on the sale of undeveloped lots in a resort community developed by a long time NYSE traded client. Plaintiffs, on behalf of a putative class of approximately 700 lot purchasers, sought treble damages, punitive damages, and attorneys’ fees totaling in excess of $100,000,000.00. The decision reinforces the value of a well-crafted merger clause in real estate sales contracts and the importance of distinguishing between reliance and proximate cause in RICO actions premised on mail or wire fraud.