Rajaratnam v. Motley Rice, LLC

Citation449 F.Supp.3d 45
Decision Date26 March 2020
Docket Number18-cv-3234(KAM)(RML)
Parties Raj RAJARATNAM, Plaintiff, v. MOTLEY RICE, LLC, a South Carolina limited liability company, Michael E. Elsner, an individual, Jayat P. Kanetkar aka Jay Kanetkar, an individual, RUDRA, an individual named pseudonymously, Brian P. Mallon, an individual, and John "Hank" Allison, an individual, Defendants.
CourtUnited States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)

Michael B. Smith, Jonathan Daniel Lupkin, Lupkin PLLC, New York, NY, for Plaintiff.

Abigail Bain Everdell, Robert D. Balin, Sharon Lee Schneier, Davis Wright Tremaine, LLP, Larry Howard Krantz, Krantz & Berman LLP, Lisa Ann Cahill, Lisa Cahill Law, New York, NY, for Defendants.


MATSUMOTO, United States District Judge:

Nearly eleven years ago, plaintiff Raj Rajaratnam ("plaintiff" or "Rajaratnam") was named as a defendant in a civil action in New Jersey federal court alleging he provided material support to the Liberation Tigers of Tamil Eelam ("LTTE"), a terrorist group more commonly known as the "Tamil Tigers." In 2011, a Vanity Fair article published statements by a confidential FBI informant claiming that Rajaratnam had expressed support for LTTE's terrorist activities in prepared remarks delivered at a 2002 fundraiser. Seven years later, with his civil action in New Jersey federal court still pending, Rajaratnam filed a suit in the Eastern District alleging federal racketeering violations by the law firm representing plaintiff in the New Jersey action, the confidential FBI informant, and three former federal agents associated with the Joint Terrorism Task Force. Plaintiff asserts that the defendants comprise a racketeering enterprise, the purpose of which is to illegally obtain confidential investigatory materials from federal law enforcement officials, which are used to identify wealthy targets, like Rajaratnam, and then defame and file lawsuits against them, in order to coerce a lucrative settlement. Plaintiff's action against the above-captioned defendants alleges violations of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO") and common law defamation. (ECF No. 42, Amended Complaint ("Compl.").)

Before the court are motions to dismiss by two sets of defendants: (1) the law firm Motley Rice LLC ("Motley Rice") and its member, Michael E. Elsner (collectively, "Motley Defendants"), (ECF No. 53-1, Mem. of Law in Supp. of Mot. by Defendants Motley Rice and Michael E. Elsner to Dismiss Amended Complaint ("Motley Mot.")); and (2) defendants Jayat Kanetkar, Brian Mallon, and John "Hank" Allison, all former members of the federal Joint Terrorism Task Force ("JTTF Defendants"), (ECF No. 56-1, Mem. of Law in Supp. of Defendants Allison, Kanetkar and Mallon's Mot. to Dismiss Amended Complaint ("JTTF Mot.")). Plaintiff served an opposition to both motions, (ECF No. 58, Consol. Mem. of Law in Opp. to Defendants' Motions to Dismiss ("Opp.")), to which both sets of defendants replied. (ECF No. 61, Motley Reply; ECF No. 60, JTTF Reply.)

For the reasons that follow, the court GRANTS defendants' motions, and DISMISSES the Amended Complaint in its entirety.


The following facts are derived from the allegations in plaintiff's complaint, which the court assumes are true for the purposes of defendants' motions.

I. Parties

Plaintiff, an ethnic Sri Lankan Tamil, left Sri Lanka when he was 14 years old and has a permanent residence in New York, New York, though he was incarcerated in Massachusetts at the time the Amended Complaint was filed. (Compl. ¶ 24.) Defendant Motley Rice was founded in 2003 and is a "well-known" South Carolina litigation firm representing primarily plaintiffs. Motley Rice is registered to practice in New York and maintains an office in this state. (Id. ¶ 18.)1 Michael Elsner is a member of Motley Rice. (Id. ¶ 19.) Brian P. Mallon is a former Special Agent with the United States Immigration and Naturalization Service ("INS") assigned to the Joint Terrorism Task Force ("JTTF"). (Id. ¶ 20.) John "Hank" Allison is a former Special Agent with the Federal Bureau of Investigation ("FBI") assigned to the JTTF. (Id. ¶ 21.) Jayat P. "Jay" Kanetkar (together, with Allison and Mallon, "JTTF Defendants"), is also a former FBI Special Agent. (Id. ¶ 23.) The complaint alleges that Kanetkar was the "handler" for defendant "Rudra," the pseudonym used for an FBI "Confidential Human Source." (Id. ¶¶ 22-23.)2

II. Pertinent Allegations
A. Origins of the Enterprise3

Beginning in the 1970's, Motley Rice's predecessor, Ness Motley, engaged in high volume personal injury asbestos litigation, filing at least tens of thousands of lawsuits in state and federal courts. (Compl. ¶ 30.) Ness Motley entered into mass settlements to resolve asbestos claims, the merits of which varied, and in the process, netted hundreds of millions of dollars in contingency fees. (Id. ¶ 31.) In 2001, a lawsuit alleged that Ness Motley improperly induced medical experts to submit false testimony in asbestos personal injury suits, and also thwarted legislative attempts to reform asbestos litigation through the use of threats and intimidation. (Id. ¶ 33.)4 Ness Motley's successor, Motley Rice, also earned substantial fees through "bulk" settlements in litigation against tobacco companies. (Id. ¶ 34.)

B. Use of Government Secrets

After the terrorist attacks on September 11, 2001, Ness Motley filed a trillion-dollar lawsuit accusing Saudi banks, charities, and members of the Saudi royal family of financing al Qaeda ("9/11 Action"). (Compl. ¶ 36.) In 2002, Motley Rice hired Jean-Charles Brisard as its lead investigator. (Id. ¶ 38.) Brisard, a French author and analyst, claimed to have ties with French intelligence. (Id. ) Motley Rice sent Brisard to Bosnia in 2003 to obtain a secret document in the possession of the Central Intelligence Agency ("CIA"). (Id. ¶ 39.) The Department of Justice ("DOJ") initially opposed Motley Rice's efforts to obtain the document, but acquiesced after the Bosnian Supreme Court "ask[ed]" the government to share to document. (Id. ¶¶ 39-40.)

The document that Motley Rice sent Brisard to retrieve "supposedly" included a list of donors to Osama bin Laden. (Id. ¶ 41.) Brisard changed the spelling of one name on the list from "bin Mahfoodh" to "Khalid bin Mahfouz," the latter being one of the richest men in Saudi Arabia. (Id. ) Motley Rice named Khalid bin Mahfouz as a defendant in the 9/11 Action. (Id. ¶ 42.) When Brisard's alteration of the document came to light, however, Motley Rice replaced him with Michael Asimos. (Id. )

Using his access to information about the 9/11 Action, Asimos shared intelligence with "low-level government operatives," including personnel at the Department of Defense ("DoD"). (Id. ¶ 43.)5 Though Elsner, along with other Motley Rice attorneys, knew that Asimos shared information collected and generated for the 9/11 Action with DoD personnel, he encouraged Asimos's information-sharing because Motley Rice wanted access to sensitive information about ongoing government investigations. (Id. ) Plaintiff claims that each government operative that Asimos offered to share intelligence with was a "public official." (Id. ¶ 44.)6

C. Use of Military Intelligence

After the United States invasion of Iraq in March 2003, Asimos sought entry into Iraq to "gather intel for Motley Rice." (Compl. ¶ 50.) Asimos called Mark Heilbrun, a congressional staffer who worked with Senator Arlen Specter, and falsely represented that Paul Wolfowitz, the Deputy Secretary of Defense at the time, wanted Asimos in Iraq on a covert basis. (Id. ) To bolster his story, Asimos gave Heilbrun the cell phone number of a contact at the Office of the Secretary of Defense, Col. Steven Bucci, who corroborated Asimos's story to Heilbrun. (Id. ¶¶ 49, 51.) Asimos was eventually able to enter Iraq, and gained "access" to the Iraqi National Congress ("INC") by posing as a representative of the Pentagon. (Id. ¶ 52.) Asimos's INC access begat further access to Iraqi governmental and intelligence documents. (Id. ) Eventually, Asimos was forced to flee Iraq when an Iraqi government official inquired into his credentials. (Id. ¶ 53.) Asimos's and Bucci's fabrication had been perpetrated on Motley Rice's behalf. (Id. ¶ 54.)

D. Rosetta

After Asimos returned from Iraq, Motley Rice helped him form Rosetta Research and Consulting LLC ("Rosetta"). (Compl. ¶ 55.) Rosetta's stated mission was to perform investigative work to support the 9/11 Action. (Id. ¶ 56.) In reality, Asimos, along with Brian Mallon and other investigators, used Rosetta to exploit government contacts to obtain information to build a database of government intelligence on terrorism. (Id. ) From June 2003 until 2006, Motley Rice, Asimos, and Mallon used Rosetta to "obtain, transport, transmit, and/or transfer in interstate or foreign commerce documents worth more than $5,000 obtained by means of false or fraudulent pretenses." (Id. ¶ 57.) The complaint does not specify the nature of the documents or how they were falsely obtained.

E. Use of Bribes to Access FBI Databases

Rosetta offered valuable information to Mike Dick, Mallon's friend at the FBI, in exchange for his assistance with Rosetta's operations, and even gave Dick a Rosetta email address. (Compl. ¶ 61.) According to plaintiff, Rosetta's offers of valuable information were bribes because Dick was a "public official." (Id. ¶ 62.) Dick's relationship with Rosetta drew the scrutiny of the DOJ's Office of the Inspector General and, eventually, he was reprimanded. (Id. ¶ 63.) In addition, an "unnamed FBI analyst" who worked for Rosetta and searched confidential FBI databases on behalf of the "Motley Rice Enterprise" was also a "public official." (Id. ¶¶ 64-65.) Plaintiff "believes" that discovery will show that "Asimos, Mallon, and/or another agent of Rosetta and/or the Motley Rice Enterprise offered things of value" to the analyst in violation of the federal bribery statute. (Id. ¶ 65.)

F. Witness Manipulation

In 2...

To continue reading

Request your trial
5 cases
  • Black v. Ganieva
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • June 30, 2022
    ...RICO predicate act), reconsideration denied, 18 Civ. 667, 2021 WL 4472513 (N.D.N.Y. Sept. 30, 2021); Rajaratnam v. Motley Rice, LLC, 449 F.Supp.3d 45, 72 (E.D.N.Y. 2020) (“plaintiff cannot rely on defendants' litigation activities in the N.J. Action to plead the predicate acts of mail or wi......
  • Broccoli v. Ashworth
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • March 28, 2023
    ...is well-established . . . that reputational harm alone, cannot support a claim for mail or wire fraud.” Rajaratanam v. Motley Rice, LLC, 449 F.Supp.3d 45, 73 (E.D.N.Y. 2020); see also United States v. Ferrara, 701 F.Supp. 39, 43 (E.D.N.Y. 1988), aff'd, 868 F.2d 1268 (2d Cir. 1988) (“[I]f on......
  • Campos v. Lavinsky
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • November 14, 2022
    ...189 F.3d 165, 173 (2d Cir. 1999) (quoting McLaughlin v. Anderson, 962 F.2d 187, 191 (2d Cir. 1992)); Rajaratnam v. Motley Rice, LLC, 449 F.Supp.3d 45, 68 (E.D.N.Y. 2020). Here, Plaintiff alleges, in conclusory fashion, that the Defendants conspired against him. (ECF No. 5, Amended Complaint......
  • Black v. Ganieva
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • June 30, 2022
    ...courts are loath to treat claims casting defamatory statements as mail or wire fraud predicates. See Rajaratnam v. Motley Rice, LLC, 449 F.Supp.3d 45, 73-74 (E.D.N.Y. 2020) (“Just as courts are loath to permit litigation activities to be shoehorned into civil RICO predicates, courts express......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT