(CN) – The 2nd Circuit rejected World Wrestling Entertainment’s bid to revive a racketeering claim that Jakks Pacific Inc., maker of Hannah Montana and Girl Gourmet toys, engaged in a “commercial bribery scheme to obtain a lucrative videogame license and amendments to toy licenses.”
The wrestling promoter allegedly agreed to issue two multimillion-dollar toy licenses to Jakks. One of WWE’s former executives, James Bell, convinced the company to hire his personal friend, Stanley Shenker, as an outside licensing agent. WWE said it later learned that Shenker had been acting as an agent for both WWE and Jakks.
Shenker met secretly with Jakks’ top executives and devised a plan “whereby Shenker would accept and split bribes from Jakks with Bell to secure the videogame license and related amendments to the domestic toy license and an international toy license secured by Jakks,” WWE claimed in a federal lawsuit.
They allegedly implemented this plan by laundering money through foreign companies and bank accounts.
WWE filed suit under the Racketeering Influenced and Corrupt Organizations Act.
The New York-based federal appeals court upheld a decision by U.S. District Judge Kenneth M. Karas that the claims, filed in 2004, are barred by a four-year statute of limitations that began running in mid-1998.
The court noted that Judge Karas had identified at least four red flags that should’ve notified WWE of a possible RICO claim by mid-1998 at the latest.
“In light of these ‘storm warnings’ … we are unmoved by plaintiff’s argument that defendants’ activities were fraudulently concealed during the statute of limitations period,” the court concluded.