Filed: Mar. 18, 2020
Latest Update: Mar. 18, 2020
Summary: 19-3068-cv Thor Halvorssen v. Glenn R. Simpson, et al. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
Summary: 19-3068-cv Thor Halvorssen v. Glenn R. Simpson, et al. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE N..
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19-3068-cv
Thor Halvorssen v. Glenn R. Simpson, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE
OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER").
A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED
BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 18th day of March, two thousand twenty.
PRESENT:
REENA RAGGI,
DENNY CHIN,
RICHARD J. SULLIVAN,
Circuit Judges.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
THOR HALVORSSEN,
Plaintiff-Appellant,
-v- 19-3068-cv
GLENN R. SIMPSON, PETER FRITSCH, and
FRANCISCO D'AGOSTINO-CASADO,
Defendants-Appellees,
LEOPOLDO A. BETANCOURT-LOPEZ,
PEDRO JOSE TREBBAU-LOPEZ, FRANCISCO
CONVIT-GURUCEAGA,
Defendants.*
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
FOR PLAINTIFF-APPELLANT: HOWARD W. FOSTER, Foster PC,
Chicago, Illinois.
FOR DEFENDANTS-APPELLEES: JOSHUA A. LEVY (Rachel Clattenburg,
on the brief), Cunningham Levy Muse
LLP, Washington, D.C., for Glenn R.
Simpson and Peter Fritsch.
GARY J. MALONE (Robert L. Begleiter,
on the brief), Constantine Cannon LLP,
New York, New York, for Francisco
D'Agostino-Casado.
Appeal from the United States District Court for the Eastern District of
New York (Eric N. Vitaliano, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff-appellant Thor Halvorssen appeals from the district court's
judgment, entered August 28, 2019, dismissing his complaint against defendants-
appellees Glenn R. Simpson, Peter Fritsch, Francisco D'Agostino-Casado, and
defendants Leopoldo A. Betancourt-Lopez, Pedro Jose Trebbau-Lopez, and Francisco
* The Clerk of the Court is respectfully directed to amend the official caption to conform
to the above.
Convit-Guruceaga ("defendants") for violations of the Racketeer Influence and Corrupt
Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. Halvorssen alleged that Fusion
GPS ("Fusion"), whose principals are Simpson and Fritsch, conspired with others to
create and disseminate dossiers of false and damaging information about Halvorssen
and two other individuals. By memorandum and order entered August 26, 2019, the
district court granted motions filed by D'Agostino-Casado and by Simpson and Fritsch
to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6). We assume the parties'
familiarity with the underlying facts, the procedural history of the case, and the issues
on appeal.
BACKGROUND
The facts alleged in the complaint are assumed to be true for purposes of
this appeal. Halvorssen is the President of the Human Rights Foundation (the
"Foundation") and a critic of corruption in Venezuela. D'Agostino-Casado, Betancourt-
Lopez, Trebbau-Lopez, and Convit-Guruceaga (the "Venezuelan defendants") owned
Derwick Associates ("Derwick"), a Venezuelan energy company that purportedly
engaged in kickback schemes and overbilling in Venezuela. In July 2015, Halvorssen
became a shareholder of Harvest Natural Resources, Inc. ("Harvest"), a Texas-based
energy company with business interests in Venezuela, and one month later he sent a
letter to the Harvest board expressing concerns about the board's nomination of
D'Agostino-Casado to a board seat. The letter accused the Venezuelan defendants of
3
violating federal laws in connection with Derwick, including the Foreign Corrupt
Practices Act , 15 U.S.C. §§ 78dd-1 et seq., and money laundering statutes, and was
copied to various federal law enforcement officials.
In retaliation for the letter, in August 2015, the Venezuelan defendants
engaged Fusion to produce a dossier accusing Halvorssen of engaging in unsavory and
illegal activities and to publicize the dossier through a media campaign to discredit
Halvorssen and pressure the Foundation to dismiss him. Fusion gave the dossier to
Washington, D.C. journalist Kenneth M. Silverstein, who agreed to use the dossier to
write a "hit piece" about Halvorssen, which first appeared on the internet on September
28, 2015. App'x at 32. Between September 24, 2015 and October 2, 2015, Silverstein,
with the approval of Simpson and Fritsch, posted unflattering statements about
Halvorssen on Facebook. Simpson and Fritsch also engaged in search engine
optimization to ensure that Silverstein's story appeared on the first page of any internet
search for Halvorssen or the Foundation, though the complaint does not indicate when
this occurred. After a two-year hiatus, Silverstein again attacked Halvorssen,
publishing a blog post on October 26, 2017 accusing him of lying in testimony before the
U.S. Senate.
Halvorssen contended that he was not the only target of Fusion. Two
other individuals, William Browder and Aleksander Boyd, are also alleged to have been
targeted by Fusion. Browder is the principal of Hermitage Capital Management,
4
which for many years was the largest foreign investor in Russia. Halvorssen alleged
that Fusion was hired by a company with ties to the Russian government to, inter alia,
compile a dossier of damaging information about him in retaliation for drawing
attention to corruption in Russia, and that Fusion disseminated that information to
journalists between 2015 and 2016. Boyd is a journalist who reports on corruption in
Venezuela, including Derwick's purported kickback schemes. Halvorssen alleged that
in 2014 the Venezuelan defendants hired Fusion to produce a dossier that could be used
to smear Boyd in retaliation for his reporting on Derwick. 1 As part of this retaliation
campaign, persons burglarized Boyd's home on November 17, 2014.
Halvorssen alleged that these three schemes to disparage Boyd,
Halvorssen, and Browder constituted a pattern of racketeering activity in violation of
RICO. The conspiracy purportedly began in 2014, when Fusion compiled a dossier on
Boyd and burglarized his home, continued in 2015 when Fusion compiled dossiers on
Halvorssen and Browder and disseminated them, extended into 2016 as Fusion
continued to disseminate damaging information about Browder, and culminated with a
blog post by Silverstein critical of Halvorssen and Browder on October 26, 2017.
1 Although Halvorssen alleged that Boyd was the subject of false and sensational blog
posts, he does not indicate when the posts were made.
5
In its memorandum and order dismissing the complaint, the district court
held that Halvorssen failed to sufficiently allege a pattern of RICO activity. This
appeal followed.
DISCUSSION
A. Standard of Review
"We review de novo a grant of a motion to dismiss under Rule 12(b)(6),
accepting as true all well-pleaded allegations in the complaint and drawing all
reasonable inferences in plaintiffs' favor." Burgis v. N.Y.C. Dep't of Sanitation, 798 F.3d
63, 68 (2d Cir. 2015). "To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its
face." Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (internal quotation marks omitted).
However, "[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice."
Id.
B. Applicable Law
To state a claim under RICO, 18 U.S.C. § 1962(c), a plaintiff must allege
"(1) that the defendant (2) through the commission of two or more acts (3) constituting a
'pattern' (4) of 'racketeering activity' (5) directly or indirectly invests in, or maintains
[an] interest in, or participates in (6) an 'enterprise' (7) the activities of which affect
interstate or foreign commerce." Williams v. Affinion Grp., LLC, 889 F.3d 116, 123-24 (2d
Cir. 2018) (quoting Moss v. Morgan Stanley, Inc.
719 F.2d 5, 17 (2d Cir. 1983)). To state a
6
RICO conspiracy, a plaintiff must allege the existence of an agreement to violate RICO's
substantive provisions. Id. at 124.
The requirement that the plaintiff establish a pattern of racketeering
activity is intended to prevent the application of RICO to "isolated or sporadic" criminal
acts. United States v. Indelicato, 865 F.2d 1370, 1383 (2d Cir. 1989). To establish a
pattern, a plaintiff must identify at least two predicate acts and show that (1) the acts
are related both to each other (horizontal relatedness) and to the enterprise (vertical
relatedness) and (2) the conduct continued over a substantial period of time. See Reich
v. Lopez,
858 F.3d 55, 60-61 (2d Cir. 2017).
As to vertical relatedness, the plaintiff must plausibly allege "that the
defendant was enabled to commit the offense solely because of his position in the
enterprise or his involvement in or control over the enterprise's affairs, or because the
offense related to the activities of the enterprise." United States v. Burden, 600 F.3d 204,
216 (2d Cir. 2010). Horizontal relatedness requires that the predicate acts "have the
same or similar purposes, results, participants, victims, or methods of commission, or
otherwise are interrelated by distinguishing characteristics and are not isolated events."
Reich, 858 F.3d at 61 (quoting H.J. Inc. v. Nw. Bell Tel. Co.,
492 U.S. 229, 240 (1989).
Where the enterprise at issue is primarily a legitimate business, horizontal relatedness
7
cannot be established "simply by linking each act to the enterprise," but rather there
must be a relationship "between the predicate crimes themselves." Id.
As to continuity, a plaintiff may allege either an open- or close-ended
pattern of racketeering activity. See
id. at 60. Here, Halvorssen alleged closed-ended
continuity, which involves predicate acts extending over a requisite minimum period of
time with no threat of future repetition. See Schlaifer Nance & Co. v. Estate of Warhol,
119
F.3d 91, 97 (2d Cir. 1997). We generally require that conduct extend for a minimum of
two years. See
Reich, 858 F.3d at 60; see also Spool v. World Child Int'l Adoption Agency,
520 F.3d 178, 184 (2d Cir. 2008) ("Although we have not viewed two years as a bright-
line requirement, it will be rare that conduct persisting for a shorter period of time
establishes closed-ended continuity, particularly where . . . '[t]he activities alleged
involved only a handful of participants' and do not involve a 'complex, multi-faceted
conspiracy.'").
C. Application
Here, even assuming that Halvorssen plausibly pleaded two or more
RICO predicate acts, we agree with the district court that he failed to plausibly allege a
pattern of racketeering activity. We consider two issues: first, whether the Browder
scheme is related to the Halvorssen and Boyd schemes, and second, whether the 2017
Silverstein article is related to the alleged enterprise.
8
First, we conclude that Halvorssen failed to plausibly allege horizontal
relatedness between the Browder scheme and the schemes against him and Boyd.
Halvorssen alleges that the schemes were similar because all involved efforts by Fusion
to retaliate against whistleblowers. The mere fact that Fusion was allegedly involved
in all three schemes, however, does not mean that the schemes were horizontally
related within the meaning of RICO. See Reich, 858 F.3d at 61. The Venezuelan
defendants were not alleged to have participated in the Browder scheme and, unlike the
Halvorssen and Boyd schemes, the Browder scheme did not involve the publication of
false allegations. Where, as here, the enterprise is not primarily in the business of
racketeering, the mere fact of overlapping participants is insufficient to establish
horizontal relatedness. See
id. at 62. Accordingly, the district court correctly excluded
the Browder scheme from the analysis.
Second, we conclude that Halvorssen failed to plausibly allege vertical
relatedness between the alleged enterprise and the 2017 Silverstein blog post.
Halvorssen pleads no facts plausibly connecting the 2017 blog post to defendants,
Fusion, the alleged enterprise, or the alleged conspiracy. Indeed, Halvorssen does not
allege that the content of the 2017 blog post was related to the information contained in
the 2015 dossier, and he alleged only that when Silverstein received the dossier in 2015,
he agreed to "turn the dossier into a devastating profile of Halvorssen and publish it
online." App'x at 22. That profile was published in 2015, whereas the blog post
9
referencing Halvorssen's 2017 testimony to the Senate Judiciary Committee was not
posted until 2017. Accordingly, the 2017 blog post does not meet the vertical
relatedness requirement, and the district court properly excluded it from the analysis.
See Burden, 600 F.3d at 216.
With the Browder scheme and 2017 blog post excluded, and no predicate
acts alleged after the October 2, 2015 Facebook post, we conclude that Halvorssen failed
to establish closed-ended continuity. 2 At most, the complaint alleged predicate acts
spanning eleven months beginning with the November 17, 2014 burglary of Boyd's
home and continuing through Silverstein's October 2, 2015 Facebook post critical of
Halvorssen. This eleven-month period falls far short of the two years we have
generally found constitutes the minimum amount of time necessary to establish closed-
ended continuity. See Reich, 858 F.3d at 60; see also
Spool, 520 F.3d at 184. Accordingly,
we conclude that Halvorssen failed to allege a pattern of racketeering activity, and that
the district court did not err in granting defendants' motions to dismiss. 3
* * *
2 Halvorssen does not identify any violations committed against him between Silverstein's
October 2, 2015 Facebook post and the October 26, 2017 blog post.
3 Defendants raise additional grounds for affirming the district court. In light of our
ruling on the issue of a pattern of racketeering activity, we do not reach them.
10
We have considered Halvorssen's remaining arguments and conclude
they are without merit. For the foregoing reasons, we AFFIRM the judgment of the
district court.
FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk of Court
11
