Federal Judge Rossie Alston Jr has tossed six of the eight claims made by Amazon against former AWS real estate managers.
Progress has been made on the now three-year-old case against the company’s former real estate managers, Carl Nelson and Casey Kirschner, and other individuals and companies involved in the real estate deals in question. The claims made include RICO, fraud, and breach of contract among others.
A federal judge has dismissed the majority of the claims made in the long-running lawsuit in which Amazon claims Kirschner and Nelson defrauded it of millions of dollars in a kickback scheme with Northstar Commercial Partners and others.
Northstar is pursuing a separate lawsuit against IPI Partners for ‘unfairly ousting them’ from a deal as a result of this case.
The case regards eleven commercial real estate transactions in Northern Virginia made by either Nelson or Kirschner on behalf of Amazon, nine of which were leases and two direct purchases. Amazon claims that the individuals received ‘kickbacks’ (illicit payments) for facilitating the deals, and that the value of said kickbacks constitutes their damages. In the initial lawsuit, Amazon said that its informant described the scheme as involving kickbacks in excess of $8 million.
Ultimately, this seems to have been the downfall of Amazon’s claim, as for all real estate transactions, Amazon either does not claim any damages based on paying above-market value, or has been unable to prove that it did.
Judge Alston, rejecting Amazon’s claim that the kickbacks themselves were damages, has instead stated that without quantifiable damages all claims bar one for civil conspiracy and another for tortious interference would have to be dropped.
The Judge approved the tortious interference claim, having concluded that “a reasonable juror could conclude that the Watson Defendants interfered with Nelson’s and Casey Kirschner’s employment relationships by bribing them and thereby depriving Amazon of its employees’ honest services.” This decision also enabled the civil conspiracy claim to get through to trial. The civil conspiracy claim will proceed against Nelson, Kirschner, real estate developer and Northstar CEO Brian Watson, and related entities, while the latter tortious interference claim only stands against Watson and related entities.
While dismissing many of Amazon’s claims, Judge Alston also noted that in order to investigate Kirscher and ‘obtain physical possession of Casey Kirschner’s laptop without alerting him to its investigation into the alleged kickback scheme at issue here, Amazon sent a malware alert to Casey Kirschner’s work laptop, directing him to take the laptop to the IT department of his local Amazon office.’
This fact was previously held under a seal in the case, and Amazon has not disputed the accusation.
Despite the ruling, the core question of whether Nelson and Kirschner were receiving money as part of a 'massive fraud and kickback scheme' or as a permissible business activity remains undecided.
In a statement after the ruling, Amazon said it plans to continue pursuing the case. A trial date has been set for May 1.