Internet E-Commerce Sites Successfully Defend Against a Federal RICO Action

Generally this internet e-commerce lawsuit, in which Ira P. Rothken represented the defendants, relates to a purported web traffic referral agreement under which plaintiff was allegedly paid only $5,000 of the millions it was owed for brokering referrals to defendants' websites. The relevant background was recounted in substantial detail in the Court's January 28, 2015 Order, which dismissed the First Amended Complaint with leave to amend.

In dismissing the Federal case in an Order dated May 18th, 2015 the Federal Court stated that:

"The plaintiff apparently believes a series of vague instant messages—sent over the course of two days, relating to a single purported scheme, and evincing no clear threat of repetition—constitutes a pattern of racketeering activity under the statute. The Court disagrees. See H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 242 (1989) ("Predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy [the continuity prong of the pattern] requirement: Congress was concerned in RICO with long-term criminal conduct."); Turner v. Cook, 362 F.3d 1219, 1229 (9th Cir. 2004) ("[W]hile two predicate acts are required under the Act, they are not necessarily sufficient."). Each discrete instant message at issue was sent over a short period of time in the course of communications between one sender and one recipient. Each involved—at most—another link in the chain of an alleged fraud, whereby defendant ... attempted to induce the plaintiff to deliver referrals in the absence of any intent on the part of [defendant] to provide the promised compensation in return. Such allegations are insufficient to establish RICO liability..."

The Court Ordered the case dismissed.