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From Antitrust Law Daily, January 25, 2018

Distribution company conspired to violate RICO; damages trebled to $105M

By Mark Engstrom, J.D.

In a lawsuit alleging fraudulent overcharges by a warehousing and distribution company—defendant Women’s Distribution Services, or WDS Inc.—the federal district court in Charlotte, North Carolina, has awarded treble damages, plus costs and reasonable attorney fees, to Cargill Inc. and Cargill Meat Solutions Corp. after a jury found that defendants Jennifer Maier (President and CEO) and Brian Ewert (Chief of Sales) were liable for participating in a RICO conspiracy under 18 U.S.C. §1962(d). After trebling, the total amount of the damages award was $105,531,807. In addition, the court ordered the plaintiffs to file a memorandum of law to indicate whether the defendants’ conduct was an unfair or deceptive trade practice under North Carolina law (Cargill, Inc. v. WDS, Inc., January 23, 2018, Whitney, F.).

The jury specifically found that the Maier and Ewert were liable for violating RICO §1962(d), which prohibits persons from conspiring to violate the substantive provisions of RICO, but were not liable for violating §1962(b), which prohibits the acquisition or control of a racketeering enterprise. In addition, the jury found that Ewert—but not Maier—was liable for violating §1962(a), which prohibits the investment in a racketeering enterprise, and §1962(c), which prohibits the participation in a racketeering enterprise. For those violations, the jury awarded Cargill $35,177,269 in damages. Punitive damages were rejected.

The jury also determined that the defendants had not misrepresented the amounts that were owed on products that WDS had supplied to Cargill, but nevertheless found that the defendants had misrepresented the margins that were charged on those products. The jury further found that the defendants had falsified business records, including invoices and alleged agreements, to further their misrepresentations. Finally, the jury found that all three defendants—Maier, Ewert, and WDS—had engaged in commercial bribery, conversion, fraud, civil conspiracy, and violations of North Carolina’s Unfair or Deceptive Trade Practices Act (N.C. Gen. Stat. §75-1.1), and were thereby liable to Cargill for $35,177,269 in damages. WDS was independently liable for breach of contract.

The case is No. 3:16-cv-00848-FDW-DSC.

Attorneys: Fitz E. Barringer (Robinson, Bradshaw & Hinson, PA) and Christine R. M. Kain (Faegre Baker Daniels LLP) for Cargill Inc. and Cargill Meat Solutions Corp. Alan B. Felts (Tuggle Duggins PA) for WDS, Inc.

Companies: Cargill, Inc.; Cargill Meat Solutions Corp.; WDS, Inc.

MainStory: TopStory RICO StateUnfairTradePractices NorthCarolinaNews

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