Wuersch & Gering Wins Appeal Dismissing RICO and Fraud Case Against German Company

Wuersch & Gering won an appeal denying US jurisdiction over claims against LFoundry GmbH, a German technology company,  by our client’s bankrupt French subsidiary, LFoundry Rousset, SAS, and a class of individual French plaintiffs.  LFoundry GmbH, Atmel Corporation of California and its French subsidiary, Atmel Rousset, SAS, were sued in 2014 in the United States District Court for the Southern District of New York by LFoundry Rousset and a putative class of about 750 of its former employees at a silicon wafer factory located in Rousset, France, that was sold by Atmel Rousset to LFoundry’s French subsidiary in 2010.

The Plaintiffs claimed that the sale of the factory had been a fraud to avoid compensation that would have been owed to the employees under French law from a closing of the factory. The complaint alleged that, instead of closing the factory, Atmel conspired with LFoundry to sell the factory under contrived circumstances that would inevitably lead to its bankruptcy.  Plaintiffs asserted civil RICO and RICO conspiracy, fraud and tortious interence claims and sought damages of $200 million, which would have been trebled under the RICO statute.

Our client and the Atmel defendants moved to dismiss the complaint for lack of personal jurisdiction, for failure to state a claim, and on the ground of forum non conveniens.  On July 21, 2015, The District Court (Judge Swain) granted the motion on the ground of forum non conveniens conditioned on a consent to jurisdiction in France, and judgment was entered on August 27, 2015.  The Plaintiffs appealed to the US Court of Appeals for the Second Circuit, which affirmed the lower court’s decision on June 27, 2016.

Wuersch & Gering’s team included Gregory F. Hauser, Sherica R. Bryan and Brad Fishman.The Atmel defendants were represented by Freshfields.