World Wrestling Entertainment, Inc. v. Jakks Pacific, Inc.
Opinion of the Court
SUMMARY ORDER
Plaintiff-appellant World Wrestling Entertainment, Inc. appeals the dismissal of two sets of claims that it brought against defendants, who include a former employee (James Bell), a former licensing agent (Stanley Shenker), and several business partners: (1) claims under the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. §§ 1962(c) and (d), and 1964(c) (“RICO”), and (2) antitrust claims brought pursuant to the Sherman Act, 15 U.S.C.
We review de novo a district court’s order granting a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil procedure, accepting all factual allegations as true and drawing all reasonable inferences in favor of the plaintiff. See, e.g., Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 124 (2d Cir. 2008).
Having accepted all of plaintiffs allegations as true, we conclude that plaintiffs RICO claims&emdash;which were filed in October 2004-are time-barred under a four-year statute of limitations that began running in mid-1998. A four-year statute of limitations “begins to run [on a RICO claim] when the plaintiff discovers-or should have reasonably discovered-the alleged injury.” McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 233 (2d Cir. 2008). The RICO statute of limitations-which is borrowed from the statute of limitations in the Clayton Act, see 15 U.S.C. § 15b; see also Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 156, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987)-runs even where the full extent of the RICO scheme is not discovered until a later date, so long as there were “storm warnings” that should have prompted an inquiry, Staehr v. Hartford Fin. Servs. Group, Inc., 547 F.3d 406, 427 (2d Cir. 2008) (describing the “storm warnings” rule as “well-settled law in this Circuit”).
In this case, the District Court identified at least four “storm warnings” that put plaintiff on inquiry notice of a possible RICO claim by mid-1998 at the latest. See World Wrestling Entm’t, Inc. v. Jakks Pac., Inc., 530 F.Supp.2d 486, 528-29 (S.D.N.Y. 2007). First and most important, in March 1998 plaintiff received a complaint from an incumbent licensee that its bid on a license renewal was not being seriously considered. See J.A. 147-48 (Am.Compl.f 109) (“Acclaim went over Bell’s head and complained to [plaintiffs] senior management ... that it was not being permitted to submit a renewal proposal, [and] Acclaim was told it could do so.”). Second, another licensee complained by letter in January 1997 that plaintiff had granted a license to defendant Jakks Pacific, Inc. that conflicted with plaintiffs prior agreement with that licensee. See J.A. 139 (Am.Compl.f 70) (“Playmates accused [plaintiff] of not acting in good faith to allow two competing companies to market such similar toy lines.”). Third, plaintiff agreed to several licenses with Jakks in 1997 and 1998 that were “well below [the] prevailing market rates,” J.A. 148 (Am.Compl.f 110), even though the marketplace for video game licenses was “intense,” J.A. 146 (Am.Compl^ 103). Fourth and finally, defendant Jakks inexplicably bid against itself when it submitted a joint bid with defendant THQ, Inc. for a videogame license, after having been granted the license by plaintiff s management on favorable terms just six weeks earlier. See J.A. 149 (Am.Compl.l 114) (“On April 8, 1998, [plaintiff] approved the deal memo ... to grant the videogame license to Jakks.”); J.A. 158 (Am. Compl.f 157) (“On June 23, 1998, [plaintiff] executed a videogame license agreement with THQ/Jakks effective as of June 10, 1998.”).
For substantially similar reasons, we conclude that plaintiffs antitrust claims were time-barred.
We have considered plaintiffs remaining arguments and find them to be without merit. Accordingly, we AFFIRM the judgment of the District Court.
. As indicated in the District Court's Opinion and Order of March 21, 2006, defendants argued that plaintiff's antitrust claims were time-barred in their motions to dismiss, but the Court did not reach the statute of limitations issue because it found another argument — that plaintiff had failed to allege a cognizable antitrust injury — persuasive. See World Wrestling Entm't, Inc. v. Jakks Pac., Inc., 425 F.Supp.2d 484, 515 (S.D.N.Y. 2006). Because our review is de novo, we choose to affirm on the basis of the statute of limitations alone. See Headley v. Tilghman, 53 F.3d 472, 476 (2d Cir. 1995) ("We are free to affirm on any ground that finds support in the record.”).
Reference
- Full Case Name
- WORLD WRESTLING ENTERTAINMENT, INC. v. JAKKS PACIFIC, INC., Jakks Pacific (H.K.), Ltd., Road Champs Ltd., THQ, Inc., THQ/Jakks Pacific LLC, Bell Licensing, LLC, James Bell, Jack Friedman, Stephen Berman, Joel Bennett, and Brian Farrell, Stanley Shenker and Associates, Inc., Stanley Shenker, and The Joint Venture of THQ, Inc.
- Cited By
- 2 cases
- Status
- Published