March 28, 2006
Kelley Drye obtained a significant victory for Lucent Technologies in a RICO action brought in federal court in Manhattan by Lucent's former subcontractor, National Group for Communications ("NGC"), against Lucent, certain of its senior executives, and other entities.
More than 10 years ago, the Saudi government awarded Lucent a $4.6 billion contract to modernize the Saudi telecommunications infrastructure. NGC alleged that Lucent and the other defendants engaged in a pattern of racketeering designed to secure Lucent competitive advantages from the Saudi government in the performance of the contract. As a result, NGC claimed to have lost two subcontracts and sought treble damages in excess of $200 million under the federal RICO statute.
The Court granted the defendants' motions to dismiss, before any discovery, holding that NGC's RICO allegations concerning one of its subcontracts and its extortion allegations were barred by RICO's four-year statute of limitations. The Court dismissed the rest of the allegations because NGC failed to plead an enterprise associated in fact, in particular that the members of the enterprise had acted jointly with a common purpose. The Court also granted Lucent’s request that the dismissal be with prejudice and without leave to replead. NGC has filed a Notice of Appeal.
In a separate motion last year, Kelley Drye succeeded in blocking NGC’s efforts to add members of the Lucent board of directors as defendants.