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Alix v. McKinsey Update

posted by Stephen Lubben

Judge Furman has dismissed the federal RICO charges, and the case may be headed to state court. Our chances of actually finding out if McKinsey flouted rule 2014 (and § 327) are looking increasingly dim:

OPINION AND ORDER re: 88 JOINT MOTION to Dismiss by all defendants. filed by McKinsey Holdings, Inc., Kevin Carmody, Alison Proshan, McKinsey Recovery & Transformation Services U.S., LLC, Jon Garcia, Seth Goldstrom, Robert Sternfels, McKinsey & Company Inc. United States, Dominic Barton, McKinsey & Co., Inc. If Alix's allegations in this case are true (as the Court has assumed they are for purposes of this motion), they are certainly troubling. Moreover, Alix and AlixPartners may well have good reason to be upset about Defendants' alleged misconduct and may indeed have genuinely public-spirited reasons for seeking to deter it going forward. But that is not enough to state a claim for relief, much less a claim under the civil RICO statute, which provides a remedy only to those whose injuries directly resulted from a defendant's scheme. Defendants' motion to dismiss is accordingly GRANTED as to Alix's federal claims and those claims the First, Second, Third, and Fourth Causes of Action are dismissed with prejudice. The Court defers ruling on Defendants' motion to dismiss Alix's state-law claims until it confirms, following the parties' supplemental briefing in accordance with the schedule set forth above, that it has diversity jurisdiction over those claims. The Clerk of Court is directed to terminate the Individual Defendants Dominic Barton, Kevin Carmody, Jon Garcia, Seth Goldstrom, Alison Proshan, Robert Sternfels, and Jared D. Yerian as parties and to terminate ECF No. 88. SO ORDERED., (Jon Garcia, Seth Goldstrom, Alison Proshan, Robert Sternfels, Jared D. Yerian, Dominic Barton and Kevin Carmody terminated.) (Signed by Judge Jesse M. Furman on 8/19/19) (yv) (Entered: 08/19/2019)

Comments

Not sure, why Judge Furman did not discuss Commercial Cleaning Services, a second circuit RICO case...wherein clearly, the plaintiff was indirectly being hurt by the hiring of the illegal aliens by a competitor. There too as here, the plaintiff lacked so-called proximate causation, yet the case was allowed to proceed. Alix must take the appeal.

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