Dismissal of RICO suit against Josh Harris by fellow Apollo co-founder Leon Black

On June 30, 2022, a Davis Polk team secured dismissal of a federal RICO lawsuit filed against Josh Harris by fellow billionaire and former Apollo CEO Leon Black. The federal lawsuit, filed in October 2021 and amended in January 2022 to include Harris as a defendant, comes after (i) public revelations concerning Black’s close relationship with, and substantial payments to, convicted sex offender Jeffrey Epstein, and (ii) the filing of a separate state court lawsuit by Guzel Ganieva, in which she claims that Black (who does not deny the two had an affair) sexually assaulted her. In his federal lawsuit, Black claimed he was the victim of a racketeering enterprise allegedly comprised of Harris, Ganieva, and PR professional Steven Rubenstein, who Black says forged an “unholy alliance” to destroy him using the allegations in Ganieva’s lawsuit.

The Davis Polk team led by partner Paul Spagnoletti filed a motion to dismiss, which explained that the amended complaint not only lacked any cognizable legal claim against Harris, but reflected Black’s badly misguided effort to blame Harris for problems that were of Black’s own making. The motion to dismiss set out the pleading’s multiple and significant defects including its total failure to allege basic elements of a RICO claim—these included the lack of a single well-pleaded allegation establishing that Harris and Ganieva ever knew, met or spoke to one another (they did not).

In a thorough 63-page decision, the Court (Judge Paul Engelmayer) granted Harris’s motion (and the motions of the other defendants), dismissing Black’s RICO claims for multiple independent reasons. The Court concluded that Black failed to allege the existence of a RICO enterprise between defendants because Black’s “nebulous and overtly conjectural allegations [did] not come close to knitting Ganieva, Harris, and Rubenstein together in any solid or coherent way in concerted acts towards a common end” and “paper[ed] over the absence of concretely pled facts indicative of a relationship between the supposed enterprise’s central figure [(Ganieva)] and her two supposed lead backers through the use of vague claims to the effect that the three made ‘common cause’ in an ‘unholy alliance.’” (The Court went on to note in particular that the “allegations regarding Ganieva’s relationship with Harris [were] conclusory, vague, indirect, clever, and cute. They are not factual, concrete, specific, declarative, or trustworthy.”) The Court also concluded, consistent with Davis Polk’s arguments, that Black failed to allege any viable predicate act by Harris, and therefore could not allege the requisite threat of continuing criminal activity; failed to allege a cognizable RICO injury; and failed to allege a RICO conspiracy claim.

Recognizing the amended complaint’s RICO claims were “glaringly deficient in fundamental respects” and it would be “futile to allow repleading,” the Court dismissed them with prejudice. The Court declined to exercise supplemental jurisdiction over the remaining state law claims.

The Davis Polk litigation team included partner Paul Spagnoletti, counsel Lindsay Schare and associates Luca Marzorati and Roshaan Wasim, all based in the New York office.