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Sunday, April 30, 2017

FAIRFAX FINANCIAL HOLDINGS LIMITED, ET AL. VS. S.A.C. CAPITAL MANAGEMENT, L.L.C., ET AL. A-0963-12T1

FAIRFAX FINANCIAL HOLDINGS LIMITED, ET AL. VS. S.A.C.
          CAPITAL MANAGEMENT, L.L.C., ET AL.
A-0963-12T1
Plaintiff Fairfax Financial Holdings, a Canadian corporation, and plaintiff Crum & Forster Holdings Corp., a New Jersey corporation, commenced this action claiming that defendants New York-based hedge funds, analysts, and others involved in the New York financial market conspired in violation of racketeering laws to disparage plaintiffs so as to drive down their stock values. Some defendants profited from the alleged enterprise's actions by "shorting" plaintiffs' stock and some defendants profited in other indirect ways. After considerable discovery, including the production of millions of pages of documents and the conducting of approximately 150 depositions, all plaintiffs' RICO and common law claims were dismissed by way of summary judgment.
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In affirming in part and reversing in part, the court held, among other things: (1) the RICO claims were properly dismissed because New Jersey choice-of-law rules mandated the application of New York law, which, unlike New Jersey law, does not recognize a private civil RICO cause of action; (2) New Jersey's six-year statute of limitations applied to plaintiffs' disparagement claim rather than a shorter New York limitations period; (3) New York substantive law applied to plaintiffs' disparagement and tortious interference with prospective economic advantage claims and required that plaintiffs demonstrate special damages, which required their identification of lost customers; (4) plaintiffs' identification of 180 lost customers was sufficient to meet New York's special-damages requirement but their expert's attempt to quantify the portion of the market lost to plaintiffs as a result of the alleged disparagement did not meet New York's special-damages standard; and (5) two groups of New York defendants were properly dismissed on personal jurisdiction grounds because, among other things, plaintiffs presented insufficient evidence to support its theory on the assumption such a theory is cognizable of conspiracy-based jurisdiction.