On September 29, 2023, Justice Crane of the New York County Commercial Division issued a decision in NW Media Holdings Corp. v. IBT Media Inc., 2023 NY Slip Op. 33366(U), holding that an aiding and abetting claim does not lie against a defendant who urged others to aid misconduct but who did not himself provide any aid, explaining:
[T]he court dismisses the cause of action for aiding and abetting conversion because Plaintiffs fail to sufficiently allege that Jang provided substantial assistance to Choi. In order to allege the element of substantial assistance for an aiding and abetting cause of action, a plaintiff must allege that (1) a defendant affirmatively assists, helps conceal, or by virtue of failing to act when required to do so enables the fraud to proceed, and (2) the actions of the aider/abettor proximately caused the harm on which the primary liability is predicated. Additionally, merely urging a party to engage in misconduct does not amount to substantial assistance.
The complaint generally alleges that Jang directed other Defendants to delete data from the Workspace. However, that is where the allegations against Jang cease. Plaintiffs fail to allege that Jang took any actions that proximately caused the deletion of the documents. Rather, the complaint alleges that Jang essentially just urged that the deletion be done, and speculates as to Jang’s motives. The allegations against Jang are clearly distinguishable from those against Choi, who allegedly deleted the documents himself. Therefore, Plaintiffs have failed to adequately allege substantial assistance, requiring dismissal of this cause of action.
Plaintiffs’ reliance on Sayles v Ferone (137 AD3d 486 [1st Dept 2016]) is misplaced. In Sayles, the court found that a complaint stated a cause of action against an attorney for aiding and abetting conversion of funds related to the sale of property by directing the buyer to wire the sale proceeds into an account at a small out-of-state bank, rather than depositing the proffered check into his escrow account. That case only further illustrates the need for a plaintiff to establish that an aider and abettor defendant’s assistance was a proximate cause of the conversion.
In Sayles, the attorney’s alleged directions very directly caused the deposit of funds into a different account than the one in which they should have been deposited. The situation is different here, where the allegation that Jang directed that documents be deleted is bereft of any accompanying allegations that Jang took any particular actions to actually effectuate his direction. Rather, the complaint merely vaguely concludes that Jang provided substantial assistance in the form of a direct command and plan for the deletion of Plaintiffs’ data. This is insufficient.
(Internal quotations and citations omitted).