Federal Court Rejects Deel's Ploy to Evade American Justice

A federal judge issued a significant ruling clearing Rippling’s civil RICO and trade secret theft lawsuit against Deel, its CEO, COO, and Board Chair to move forward towards trial in California, rejecting efforts by Deel to shift the dispute overseas, exclude Deel executives from the case and dismiss the corporate espionage case.

The decision ensures the case will proceed in an American courtroom despite desperate attempts by Deel and its top executives to escape accountability in the United States by fleeing to Dubai. The court’s decision to allow the RICO claim to proceed noted the open-ended threat of continued criminal activity, targeting additional victims beyond Rippling.

The Court’s order sends a clear message that this RICO and trade secrets theft case raise serious criminal misconduct allegations.

Key Excerpts from the 49-Page Ruling:

• Deel’s Executives Cannot Move to Dubai and Avoid US Courts

Judge Breyer held that you cannot orchestrate a corporate espionage scheme targeting an American company and then argue you are beyond the reach of American courts:  

"There are sufficient facts to support the allegations that the Individual Defendants knew Rippling would likely suffer harm at its headquarters in San Francisco; that each Individual Defendant took actions to direct and facilitate the theft of confidential information that was developed and used in San Francisco; and that the Individual Defendants used this information to interfere with Rippling’s California-based customers. Therefore, the Court finds that Rippling has sufficiently demonstrated that each of the Individual Defendants expressly aimed their conduct at California."

"Here, Rippling, not its Irish subsidiary, brings the underlying claims against the Individual Defendants. If the allegations are taken as true, and the Individual Defendants facilitated the theft of California-based trade secrets to compete with a California company for California customers, then California has a strong interest in adjudicating the dispute. FAC ¶ 13; X Corp., 724 F.Supp.3d at 945."

• Rippling’s Civil RICO Claim Heads Towards Trial

Judge Breyer found that "Rippling has alleged a potential threat of continued criminal activity (open-ended continuity) by pointing to other victims of the purported enterprise."

“Rippling sufficiently alleges that there was a coordinated enterprise including more than just Deel and its employees that had a common purpose among members to enrich themselves through racketeering conduct.”

“Rippling also demonstrates a pattern of racketeering. A “pattern” of racketeering activity requires at least two acts of racketeering activity, occurring within a 10-year period. 18 U.S.C. § 1961(5). Rippling plausibly asserts three predicate acts: obstruction of justice, wire fraud, and theft of trade secrets."

• Rippling Sufficiently Alleged Wire Fraud

Judge Breyer found that Rippling sufficiently alleged wire fraud with allegations that "the Bouazizes bribed O’Brien by transferring money “through the United States banking system.” FAC ¶ 176. That, too, is enough."

"But the allegation that Westgarth’s wife, who is not employed by Deel, sent $6,000 to O’Brien raises the inference that Westgarth was aware of the promise to pay O’Brien €5,000 per month for his espionage and did so surreptitiously through his wife’s account. See FAC ¶¶ 60, 64. That would support Rippling’s allegations that Westgarth agreed to commit wire fraud. Similarly, Rippling alleges that Westgarth “worked to erase all digital traces of contact with O’Brien,” which Rippling claims is obstruction of justice. FAC ¶ 142.

This ruling from Judge Breyer comes nearly a year after the Bouaziz Racketeering Enterprise was caught planting a thief inside Rippling to steal our most valuable trade secrets. 

After they were caught and attempted to cover up their crime by destroying evidence, they fled the U.S. and have not been back since. Rippling has already uncovered evidence that, according to Judge Breyer, “would support Rippling’s allegations that Westgarth agreed to commit wire fraud.” 

Meanwhile, they have installed a new management team, removed Phillippe Bouaziz as CFO, and hired a new Chief Compliance Officer, Chief Risk Officer, General Counsel, and President and CFO. 

After the ruling, Ripping issued subpoenas to depose two in-house Deel lawyers directly involved in the Bouaziz Racketeering Enterprise, David Mieli and Asif Malik. Rippling is also now greenlit to issue discovery requests to expose the full suite of misconduct by Deel’s criminal enterprise.

We will continue to hold Deel, its CEO, COO and Board Chair accountable in court for their misconduct.