Blueprint Capital Advisors, LLC v. Murphy

Decision Date23 December 2022
Docket NumberCivil Action 2:20-cv-07663 (JXN) (ESK)
PartiesBLUEPRINT CAPITAL ADVISORS, LLC, Plaintiff, v. PHILIP MURPHY, in his official capacity as Governor of the State of New Jersey, STATE OF NEW JERSEY DIVISION OF INVESTMENT, BLACKROCK, INC., BLACKROCK ALTERNATIVE ADVISORS, CLIFFWATER, LLC, TIMOTHY WALSH, OWL ROCK CAPITAL CORPORATION, SAMANTHA ROSENSTOCK, JASON MACDONALD, CHRISTOPHER MCDONOUGH, COREY AMON, DINI AJMANI, DERRICK GREENE, GEORGE HELMY, and MATTHEW PLATKIN, in their individual and professional capacities, Defendants.
CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey

BLUEPRINT CAPITAL ADVISORS, LLC, Plaintiff,
v.
PHILIP MURPHY, in his official capacity as Governor of the State of New Jersey, STATE OF NEW JERSEY DIVISION OF INVESTMENT, BLACKROCK, INC., BLACKROCK ALTERNATIVE ADVISORS, CLIFFWATER, LLC, TIMOTHY WALSH, OWL ROCK CAPITAL CORPORATION, SAMANTHA ROSENSTOCK, JASON MACDONALD, CHRISTOPHER MCDONOUGH, COREY AMON, DINI AJMANI, DERRICK GREENE, GEORGE HELMY, and MATTHEW PLATKIN, in their individual and professional capacities, Defendants.

Civil Action No. 2:20-cv-07663 (JXN) (ESK)

United States District Court, D. New Jersey

December 23, 2022


OPINION

JULIEN XAVIER NEALS, United States District Judge

THIS MATTER comes before the Court on the following: Plaintiff Blueprint Capital Advisors, LLC's (“Plaintiff” or “BCA”) Appeals of the Magistrate Judge decision (ECF Nos. 115, 170); Defendant Timothy Walsh's Motion to Dismiss or to Compel Arbitration; (ECF No. 123); Defendants BlackRock, Inc.'s and BlackRock Alternative Advisors' Motion to Dismiss the Amended Complaint (“BlackRock Defendants”) (ECF No. 125); Defendant Cliffwater, LLC's Motion to Dismiss the Amended Complaint (ECF No. 126); the Motion to Dismiss the Amended Complaint filed on behalf of Defendants Philip Murphy, State of New Jersey Division of

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Investment (“DOI”), Jason MacDonald, Christopher McDonough, Corey Amon, Dini Ajmani, Derrick Greene, George Helmy, and Matthew Platkin (collectively, the “State Defendants”) (ECF No. 128); Defendant Owl Rock Capital Corporation's Motion to Dismiss the Amended Complaint (ECF No. 129), and Defendant Samantha Rosenstock's Motion to Dismiss the Amended Complaint (ECF No. 130). Plaintiff BCA filed its opposition to the various motions (ECF Nos.

138, 139). Defendants in turn filed their respective replies, Rosenstock (ECF No. 142); Cliffwater (ECF No. 143); Owl Rock (ECF No. 144); State Defendants (ECF No. 145); BlackRock Defendants (ECF No. 146); and Walsh (ECF No. 147). The Court exercises jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1343, and supplemental subject matter jurisdiction over Plaintiff's related state claims pursuant to 28 U.S.C. § 1367(a). Venue is proper in this district pursuant to 28 U.S.C. § 1391(b). After carefully considering the parties' written and oral arguments, for the reasons that follow, the Defendants' motions to dismiss (“MTD”) are GRANTED in part and DENIED in part, and Plaintiff's Appeals (ECF Nos. 115, 170) are DENIED AS MOOT based on the Court's rulings on Defendants' motions.

I. BACKGROUND AND PROCEDURAL HISTORY[1]

Plaintiff is a Delaware corporation, headquartered in Newark, New Jersey.[2]Plaintiff filed a 102 page Amended Complaint seeking “declaratory, injunctive and equitable relief, as well as monetary damages, to redress Defendants' violations of 42 U.S.C. § 1981 (“§ 1981”); 42 U.S.C. § 1983 (“§ 1983”); 42 U.S.C. § 1985 (“§ 1985”); New Jersey Civil Rights Act; racketeering in violation of 18 U.S.C. § 1962 and N.J.S.A. 2C:41-2; violation of the Fifth Amendment Takings

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Clause; breaches of contract, fiduciary duty, duty of confidentiality; unfair competition; civil conspiracy; fraud; commercial disparagement; tortious interference with prospective economic advantage; aiding and abetting racketeering; and aiding and abetting fraud.” Am. Compl., ECF No. 78 ¶ 8.

Defendant Philip Murphy is the Governor of the State of New Jersey. Id. ¶ 13. Defendant State of New Jersey, Department of the Treasury, Division of Investment is a government entity that makes investment decisions on behalf of New Jersey's pension systems. The State of New Jersey Department of Treasury houses the Division of Investment, which oversees the $80 billion pension fund. The DOI, in turn, manages investments on behalf of the public pension and retirement funds for New Jersey's current and retired employees. The DOI, by virtue of the size of those public employee funds, is one of the largest money managers in the United States. Id. ¶ 14. Defendant BlackRock, Inc., is an American global investment management corporation based in New York, New York. Id. ¶ 15. Defendant BlackRock Alternative Advisors is a Delaware corporation headquartered in New York City, with its principal place of business located in New York, New York. Id. ¶ 16. Defendant Cliffwater, LLC, is a Delaware corporation, headquartered in Los Angeles, California, with its principal place of business in Marina Del Rey, California. Id. ¶ 17. Defendant Timothy Walsh is a former member of BCA's Board of Advisors and is currently a Managing Director at Owl Rock Capital LP. Upon information and belief, Mr. Walsh is a resident of the state of Indiana. Id. ¶ 18. Capital Corporation is a Maryland corporation headquartered in New York City, with its principal place of business in New York, New York. Id. ¶ 19. Defendant Samantha Rosenstock is the former Head of Investments at New Jersey's Division of Investment. Upon information and belief, Ms. Rosenstock is a resident of New Jersey. Id. ¶ 20. Defendant Jason MacDonald is a former Senior Portfolio Manager at New Jersey's Division of Investment.

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Upon information and belief, Mr. MacDonald is a resident of New Jersey. Id. ¶ 21. Defendant Christopher McDonough is the former Director of New Jersey's Division of Investment. Upon information and belief, Mr. McDonough is a resident of Pennsylvania. Id. ¶ 22. Defendant Corey Amon is the current Director of New Jersey's Division of Investment. Upon information and belief, Mr. Amon is a resident of New Jersey. Id. ¶ 23. Defendant Dini Ajmani is the New Jersey Assistant Treasurer. Upon information and belief, Ms. Ajmani is a resident of New Jersey. Id. ¶ 24. Defendant Derrick Greene is the owner and operator of Greene Consultants LLC, a campaign consulting firm and the current Senior Advisor to the Office of the Governor for the State of New Jersey for Diversity, Race, and Urban Planning, operating out of the Secretary of State's office. Upon information and belief, Mr. Greene is a resident of New Jersey. Id. ¶ 25. Defendant George Helmy is the Chief of Staff to the Office of the Governor for the State of New Jersey. Upon information and belief, Mr. Helmy is a resident of New Jersey. Id. ¶ 26. Defendant Matthew Platkin is a Partner at the law firm Lowenstein Sandler, a former senior member of the Murphy election campaign, and most recently the former Chief Counsel to Office of the Governor of the State of New Jersey. Upon information and belief, Mr. Platkin is a resident of New Jersey. Id. ¶ 27.[3]

Plaintiff's principals, Jacob Walthour and Carrie Pickett founded BCA in 2015, after decades at prestigious financial services firms, including Morgan Stanley, Citadel Investment Group, Cowen & Company, and Defendant Cliffwater. Am. Compl., ECF No. 78 ¶ 29. Walthour and Pickett engaged in extensive research on public pension funds following the 2008 financial crisis and developed the FAIR program.[4] Id. ¶¶ 29-31. Realizing the competitive value of its

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proprietary FAIR program, BCA took extensive steps to protect that proprietary information by not describing it on its website; non-disclosure agreements with employees, consultants, vendors, and third-parties; watermarking documents as confidential; and by taking steps to secure copyright protection for the FAIR business mark. Id. ¶¶ 31-32.

Plaintiff asserts that the DOI[5]fraudulently misappropriated the FAIR program through a series of actions beginning in 2015 and culminating in the DOI launching the FAIR program with an alternative asset manager, Defendant BlackRock in 2016. Id. ¶ 2.

In the spring of 2015, Walthour reached out to Defendant Jason MacDonald, senior asset manager at the DOI, who directed Walthour to then-DOI director, Defendant Christopher McDonough. Id. ¶ 48. McDonough, briefed by MacDonald, worked to induce reliance and trust from BCA from the start. Id. ¶ 49. Throughout the summer of 2015, Walthour emailed McDonough presentations and materials on the FAIR program and met with McDonough and MacDonald on multiple occasions. Id. ¶¶ 49-53. During those meetings, Walthour presented BCA's FAIR program, explained how the FAIR program would work and the enormous time that had been devoted to developing the program. Id. ¶ 49. In response, McDonough misrepresented that the DOI wanted to pursue the program with its creator BCA proposing, and that they wanted to implement it by year-end. Id. ¶ 50. McDonough further represented that he wanted the DOI to be the anchor investor and a 10% owner in the platform. Id. Throughout these discussions,

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McDonough and MacDonald assured BCA that they personally were committed to investing $500 million with BCA, and that securing the SIC's approval for the BCA mandate was a formality as the FAIR program was badly needed and the SIC had approved 100% of proposed investments in recent history. Id. ¶ 51. Accordingly, McDonough directed BCA to begin preparing a term sheet, and further informed BCA that the DOI would direct its outside consultant, Cliffwater, to immediately begin the formal due diligence required under New Jersey law. Id. McDonough instructed BCA to provide that due diligence as quickly as possible, which BCA began doing by the end of June. Id.

From almost the start, McDonough and Walthour discussed the need for BCA to immediately prepare for a year-end launch. Id. ¶ 53. In reliance on the DOI's and McDonough's representations, by early July, BCA began building out its investment platform and infrastructure necessary to launch the FAIR program and business plan with the DOI by year-end. Id. It prepared the legal, operational, advisory, transactional and other infrastructures the business would require; began interviewing and hiring personnel; and secured office space in Manhattan for those personnel to work. Id. By the first week of August, BCA had retained outside counsel; established an advisory board, which included defendant Walsh; completed their CIO and...

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