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Only the Westlaw citation is currently available. United States District Court, N.D. Georgia, Rome Division. Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones, and Lora Sisson, individually and on behalf of a class, Plaintiffs, v. MOHAWK INDUSTRIES, INC., Defendant. No. CIV.A.4:04-CV-0003-H. April 12, 2004. Background: Current and former hourly employees brought action against employer, alleging violations of the federal and Georgia Racketeer Influenced and Corrupt Organizations Acts (RICO). Employer moved to dismiss. Holdings: The District Court, Murphy, J., held that: (1) employees were not required to satisfy heightened pleading requirements in pleading predicate act; (2) employees sufficiently
alleged predicate act; (3) employees sufficiently
alleged existence of an enterprise; (4) employees had standing
to sue employer under RICO; (5) Georgia's RICO did
not indicate legislative purpose to impose liability on corporations;
and (6) employees lacked
standing to assert unjust enrichment claim under Georgia law. Motion denied in part, and granted in part. [1] Racketeer Influenced and Corrupt Organizations 319Hk0 k. For a plaintiff
to have standing to pursue a private civil cause of action under the
Racketeer Influenced and Corrupt Organizations Act (RICO), the plaintiff
must prove the following elements: (1) that the defendant violated RICO;
(2) that the plaintiff sustained an injury to his business or property;
and (3) that the RICO violation caused the injury. 18
U.S.C.A. § § 1962, 1964(c). [2] Racketeer Influenced and Corrupt Organizations 319Hk0 k. To prevail
on a civil Racketeer Influenced and Corrupt Organizations Act (RICO)
claim under section making it unlawful for any person employed by or
associated with any enterprise engaged in, or the activities of which
affect, interstate or foreign commerce, to conduct or participate in
conduct of enterprise's affairs through a pattern of racketeering activity,
the plaintiff must show: (1) the existence of an enterprise; (2) that
the enterprise affected interstate commerce; (3) that the defendant
was employed by or associated with the enterprise; (4) that the defendant
participated, either directly or indirectly, in the conduct of the affairs
of the enterprise; and (5) that the defendant participated through a
pattern of racketeering activity. 18
U.S.C.A. § 1962(c). [3] Federal Civil Procedure 170Ak0 k. Rather than
apply heightened pleading requirements of rule requiring that fraud
be pled with particularity to Racketeer Influenced and Corrupt Organizations
Act (RICO) causes of action premised on non-fraud
predicate acts, better approach is to apply the general pleading requirements
of rule requiring that each averment of a pleading be simple, concise,
and direct. 18
U.S.C.A. § 1961 et seq.; Fed.Rules
Civ.Proc.Rules 8(e)(1), 9(b),
28 U.S.C.A. [4] Federal Civil Procedure 170Ak0 k. Employer's
alleged predicate acts of employing and harboring illegal workers did
not sound in fraud, and thus, current and former hourly employees were
not required to satisfy heightened pleading requirements of rule requiring
that fraud be pled with particularity, in action against employer alleging
violations of the Racketeer Influenced and Corrupt Organizations Act
(RICO); rather, employees only had to satisfy general pleading requirements
of rule requiring that each averment of pleading be simple, concise,
and direct. 18
U.S.C.A. § 1961 et seq.; Fed.Rules
Civ.Proc.Rules 8(e)(1), 9(b),
28 U.S.C.A. [5] Racketeer Influenced and Corrupt Organizations 319Hk0 k. For a plaintiff to plead a violation of statute
prohibiting employment of unauthorized aliens, as predicate act in a
Racketeer Influenced and Corrupt Organizations Act (RICO) case, the
plaintiff must simply allege that the aliens were brought into the United
States for the purpose of illegal employment, but there is no requirement
that the employer must have brought the aliens into this country. Immigration
and Nationality Act, 8
U.S.C.A. § 1324(a)(3); 18
U.S.C.A. § 1961 et seq. [6] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Employer's
alleged employment of illegal workers, knowing that those workers were
smuggled or otherwise brought into the United States illegally, supported
claim for violation of statute prohibiting employment of unauthorized
aliens, which served as predicate act in current and former employees'
action against employer under the Racketeer Influenced and Corrupt Organizations
Act (RICO). Immigration and Nationality Act, 8
U.S.C.A. § 1324(a)(3); 18
U.S.C.A. § 1961 et seq. [7] Racketeer Influenced and Corrupt Organizations 319Hk0 k. For purposes
of Racketeer Influenced and Corrupt Organizations Act (RICO) section
making it unlawful for any person employed by or associated with any
enterprise engaged in, or the activities of which affect, interstate
or foreign commerce, to conduct or participate in conduct of enterprise's
affairs through a pattern of racketeering activity, indictment must
name a RICO person distinct from the RICO enterprise, and those entities
must be distinct. 18
U.S.C.A. § 1962(c). [8] Racketeer Influenced and Corrupt Organizations 319Hk0 k. The definitive
factor in determining the existence of a Racketeer Influenced and Corrupt
Organizations Act (RICO) enterprise is the existence of an association
of individual entities, however loose or informal, that furnishes a
vehicle for the commission of two or more predicate crimes, i.e., the
pattern of racketeering activity requisite to the RICO violation; indeed,
a RICO enterprise may be an "amoeba-like" structure or a loose
informal association. 18
U.S.C.A. § 1962(c). [9] Courts 106k0 k. Opinions
of the United States Court of Appeals for the Fifth Circuit issued prior
to October 1, 1981, the date marking the creation of the Eleventh Circuit,
are binding precedent on courts within the Eleventh Circuit. [10] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Although
a pattern of racketeering activity must be shown by pointing to evidence
of the requisite number of racketeering acts by participants in the
enterprise, such evidence does not necessarily establish the existence
of a Racketeer Influenced and Corrupt Organizations Act (RICO) enterprise;
the enterprise is not the pattern of racketeering activity, but rather,
it is an entity separate and apart form the pattern of activity in which
it engages. 18
U.S.C.A. § 1962(c). [11] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Allegations
that employer participated in enterprise by paying third party employment agencies and other recruiters for illegal
workers, and that enterprise provided means for commission of immigration
law violations, supported current and former employees' claim, under
the Racketeer Influenced and Corrupt Organizations Act (RICO), that
employer operated or participated in affairs of an enterprise through
a pattern of racketeering activity. 18
U.S.C.A. § 1962(c). [12] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Liability
under the Racketeer Influenced and Corrupt Organizations Act (RICO)
depends on showing that the defendants conducted or participated in
the conduct of the RICO enterprises's affairs, not just their own affairs.
18
U.S.C.A. § 1962(c). [13] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Allegations
that employment agencies and other recruiters were separate and independent
entities from employer that paid them to hire illegal workers were sufficient
to show existence of an enterprise distinct from employer itself, for purposes of current and former employees' claim
under the Racketeer Influenced and Corrupt Organizations Act (RICO),
alleging that employer operated or participated in affairs of an enterprise
through a pattern of racketeering activity. 18
U.S.C.A. § § 1961(4), 1962(c). [14] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Allegations
that employment agencies and other recruiters shared common purpose
of obtaining illegal workers for employment by employer were sufficient
to show existence of common purpose among members of association-in-fact
enterprise, for purposes of current and former employees' claim under
the Racketeer Influenced and Corrupt Organizations Act (RICO), alleging
that employer operated or participated in affairs of an enterprise through
a pattern of racketeering activity. 18
U.S.C.A. § 1962(c). [15] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Current and
former hourly employees' complaint against employer, stating that employer
hired illegal workers, and thereby depressed employees' wages, sufficiently alleged injury to employee's "business
or property," for purposes of determining whether employees had
standing to sue employer under the Racketeer Influenced and Corrupt
Organizations Act (RICO). 18
U.S.C.A. § 1964(c). [16] Racketeer Influenced and Corrupt Organizations 319Hk0 k. For a pattern
of racketeering activity to be a cognizable cause of civil Racketeer
Influenced and Corrupt Organizations Act (RICO) injury to a private
plaintiff, one or more of the predicate acts must not only be the "but
for" cause of the injury, but the proximate cause as well. 18
U.S.C.A. § 1964(c). [17] Racketeer Influenced and Corrupt Organizations 319Hk0 k. For a plaintiff
to have standing under the Racketeer Influenced and Corrupt Organizations
Act (RICO), he must allege and prove that his injury flowed directly
from the commission of the predicate acts. 18
U.S.C.A. § 1964(c). [18] Federal Civil Procedure 170Ak0 k. Issue of
whether employer's alleged predicate acts of harboring and inducing
illegal aliens, and using and accepting bogus identification documents
proximately caused current and former employees' injuries, i.e., depressed
hourly wages, could not be resolved at motion to dismiss phase of employees'
action against employer, alleging violations of the Racketeer Influenced
and Corrupt Organizations Acts (RICO). 18
U.S.C.A. § 1964(c). [19] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Current and
former hourly employees' complaint against employer, stating that employer
hired illegal workers to depress employees' wages, sufficiently alleged
that employees sustained direct injury, for purposes of determining
whether employees had standing to sue employer under the Racketeer Influenced
and Corrupt Organizations Act (RICO). 18
U.S.C.A. § 1964(c). [20] Federal Civil Procedure 170Ak0 k. Issue of whether employer's alleged employment
of illegal aliens to depress wages caused injury to current and former
employees that was not speculative could not be resolved at motion to
dismiss phase of employees' action against employer, alleging violations
of the Racketeer Influenced and Corrupt Organizations Acts (RICO). 18
U.S.C.A. § 1964(c). [21] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Under Georgia
law, because predicate acts under Georgia's Racketeer Influenced and
Corrupt Organizations Act (RICO) are actually criminal offenses, statute
governing criminal responsibility of corporations applies when determining
whether a corporation is vicariously liable for the actions of its employees.
West's
Ga.Code Ann. § § 16-2-22, 16-14-4(a), 16-14-4(c). [22] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Georgia's
Racketeer Influenced and Corrupt Organizations Act (RICO) does not expressly
and clearly indicate a legislative purpose to impose liability on a
corporation for violations of the statute, as would permit the corporation
to be prosecuted for predicate acts that are actually
criminal offenses. West's
Ga.Code Ann. § § 16-2-22(a)(1), 16-14-4(a), 16-14-4(c). [23] Federal Civil Procedure 170Ak0 k. Issue of
whether corporation's board of directors, or any corporate officers
acting within scope of employment, authorized, requested, commanded,
performed, or recklessly tolerated violations of Georgia's Racketeer
Influenced and Corrupt Organizations Act (RICO) could not be resolved
at motion to dismiss phase of employees' action against corporation,
alleging that corporation violated Georgia's RICO by hiring illegal
workers in order to depress wages. West's
Ga.Code Ann. § § 16-2-22(a)(2), 16-14-4(a), 16-14-4(c). [24] Racketeer Influenced and Corrupt Organizations 319Hk0 k. Under Georgia
law, criminal liability will attach to a corporation for the acts of
its employees only if the crime is authorized, requested, commanded,
performed, or recklessly tolerated by the board of directors or by a
managerial official who is acting within the scope of his employment
in behalf of the corporation. West's
Ga.Code Ann. § § 16-2-22(a)(2), 16-14-4(a), 16-14-
4(c). [25] Implied and Constructive Contracts 205Hk0 k. Under Georgia
law, recovery under a theory of unjust enrichment presupposes the absence
of a contractual agreement. [26] Implied and Constructive Contracts 205Hk0 k. Under Georgia
law, the measure of damages under unjust enrichment is based upon the
benefit conferred upon the recipient, and not the cost to render the
service or cost of the goods. [27] Federal Civil Procedure 170Ak0 k. Issue of
whether employer reaped substantial wage savings by hiring and harboring
illegal workers could not be resolved at motion to dismiss phase of
current and former employees' action against employer,
alleging unjust enrichment claim under Georgia law. [28] Federal Civil Procedure 170Ak0 k. Current and
former employees lacked standing to assert a claim against employer
for unjust enrichment under Georgia law, as to amount of money employer
did not have to spend in dealing with workers' compensation claims given
that it allegedly hired illegal workers in order to depress wages, where
employer's higher profit margins due to lower workers' compensation
costs were not connected in any way to employees' receiving lower wages. John
Earl Floyd, Joshua
F. Thorpe, Ronan
P. Doherty, Nicole
G. Iannarone, Bondurant Mixson & Elmore,
Atlanta, GA, Bobby
Lee Cook, Cook & Connelly, Summerville,
GA, Howard
Foster, phv, Johnson & Bell, Chicago,
IL, Matthew Daniel Thames, Goddard Thames Hammontree & Bolding,
Dalton, GA, for Plaintiffs. Robert
Carl Cannon, Rosemary
C. Lumpkins, Constangy Brooks & Smith,
Atlanta, GA, Steven
Thomas Cottreau, phv, Juan
P. Morillo, phv, Virginia
A. Seitz, phv, Sidley Austin Brown &
Wood, Washington, DC, for Defendant. ORDER MURPHY, District J. *1 This is a class action alleging violations
of the federal and Georgia Racketeer Influenced and Corrupt Organizations
Acts ("RICO"). The case is before the Court on Defendant's
Motion to Dismiss [25]. I. Background A. The Parties Plaintiffs are current and former hourly employees
of Defendant who claim that Defendant's alleged employment and harboring
of illegal aliens has depressed their wages. (Compl.¶ 1.) Plaintiffs Gale Pelfrey, Shirley Williams,
Bonnie Jones, and Lora Sisson are citizens of Georgia and reside in
the Northern District of Georgia. (Id. ¶ ¶ 5-8.) Plaintiffs Pelfrey, Williams, and Sisson
are former hourly employees of Defendant. (Compl.¶ ¶ 5, 6, 8.) Plaintiff Jones is currently an hourly
employee of Defendant. (Id. ¶
7.) Plaintiffs Pelfrey, Williams, Sisson, and Jones are eligible
to be employed in the United States. (Id. ¶ ¶
5-8.) Plaintiffs seek certification of a class consisting of
all current and former employees of Defendant legally authorized to
be employed in the United States who are or have been employed in hourly
wage positions at any time since January 5, 1999, to the present (the
"Class"). [FN1] (Id. ¶
39.) Defendant is the second largest carpet and rug
manufacturer in the United States. (Compl.¶
2.) Defendant employs approximately 31,780 persons, most of whom
are employed in Northwest Georgia. (Id.) Defendant owns or leases
at least twenty-six facilities in Georgia. (Id.) Defendant is
a Delaware corporation with its principal place of business in Calhoun,
Georgia. (Id. ¶ 9.) B. Plaintiffs' Allegations Plaintiffs allege that Defendant has engaged
in illegal hiring of persons who are not eligible for employment in
the United States in an effort to keep costs of labor as low as possible.
(Compl.¶ 14.) According to Plaintiffs, Defendant has
accepted for employment and continues to employ workers that it knew
or had reason to know were not authorized to work in the United States.
(Id. ¶ 15.) Plaintiffs
allege that Defendant has knowingly and recklessly accepted false documents
or documents that do not match the identity of the person presenting
the documents as proof of eligibility for employment. (Id. ¶
16.) Additionally, Plaintiffs claim that Defendant has knowingly
and recklessly accepted proof of eligibility for employment documents
reflecting successive different names for a single person. (Id.
¶ ¶ 17, 19.) Indeed, Plaintiffs allege that when
some illegal workers have informed Defendant that they would return
to their countries of origin, supervisors employed by Defendant have
encouraged those employees to return to the United
States and illegally reapply for work at Defendant. (Id. ¶ 18.) Plaintiffs claim that in an effort to conceal
Defendant's employment and harboring of illegal workers, Defendant's
employees have destroyed eligibility documents indicating that workers
have employed different names and identification papers. (Compl.¶ 20.) Furthermore, according to Plaintiffs, Defendant's
employees and supervisors have stated that they are aware that illegal
workers can easily obtain false identification and work authorization
documents. (Id. ¶ 21.) *2 Plaintiffs claim that Defendant's employees
have traveled to the United States border to recruit illegal aliens.
(Compl.¶ 22.) According to Plaintiffs,
those employees and other persons then transported the illegal aliens
to North Georgia for employment at Defendant's facilities. (Id.)
Plaintiffs allege that Defendant has provided incentive to its employees
and other recruiters by paying for locating illegal workers that Defendant
eventually employs and harbors. (Id.) Plaintiffs contend that
Defendant's employees and recruiters have provided housing for illegal
workers when the workers arrived in North Georgia, and have aided those
illegal workers in finding employment with Defendant. (Id. ¶
23.) Occasionally, Defendant audits its workforce
and discovers illegal workers are employed with Defendant. (Compl.¶ 24.) According to Plaintiffs, Defendant has
not increased the frequency of such audits despite
the fact that the audits reveal that a large number of illegal workers
are employed at Defendant. (Id.) Furthermore, Plaintiffs allege
that when Defendant terminates an illegal worker after discovering that
the illegal worker is not authorized to work in the United States, the
worker frequently returns to work under a different name. (Id.
¶ 25.) Plaintiffs claim that this practice, termed
"recycling," is widespread at Defendant. (Id. ¶ 26.) According to Plaintiffs, Defendant has
been further put on notice of illegal workers because many illegal workers
artificially inflate their claimed exemptions, thus avoiding paying
federal income tax. (Id. ¶ 32.) Plaintiffs allege that law enforcement authorities
have raided Defendant's facilities in search of illegal workers. (Compl.¶
27.) Plaintiffs claim that when such raids have occurred, illegal
workers have hidden in barrels or other containers or have fled. (Id.)
According to Plaintiffs, the number of illegal workers who run or hide
has put Defendant on notice that it employs a large number of illegal
workers. (Id.) Moreover, Plaintiffs contend that Defendant's
employees and supervisors have assisted illegal workers in evading the
law enforcement authorities. (Id. ¶
28.) Plaintiffs state that law enforcement authorities
have arrested some illegal workers at Defendant's facilities. (Compl.¶
29.) Plaintiffs further allege that law enforcement authorities
have discovered undocumented aliens in possession of
paychecks issued by Defendant or identification badges and fraudulent
identification documents. (Id. ¶
30.) According to Plaintiffs, Defendant's supervisors
have stated that illegal workers are preferable because those workers
are more tolerant of working conditions and do not submit claims for
workers' compensation. (Compl.¶ 31.)
Plaintiffs contend that because many of Defendant's workers are undocumented
aliens, Defendant knows that those workers are beholden to Defendant,
and thus are unlikely to complain about working conditions or file workers
compensation claims. (Id. ¶ ¶
36-37.) Consequently, Plaintiffs believe that Defendant saves
a considerable amount of money by employing undocumented aliens. (Id.
¶ 37.) *3 According to Plaintiffs, Defendant's
practice of employing and harboring large numbers of illegal workers
has allowed Defendant to depress wages; consequently, the wages paid
to hourly employees, including the legally employed hourly employees
who are members of the Class, are lower than those wages would be if
Defendant did not employ and harbor illegal workers. (Compl.¶
33.) Plaintiffs allege that Defendant employs tens of thousands
of hourly workers in North Georgia (id. ¶
34), and Defendant's widespread employment and harboring of illegal
workers has substantially increased the supply of workers from which
Defendant hires its hourly workers (id. ¶
35). Plaintiffs contend that because of the increased size of
the labor pool, Defendant has depressed
the wages it pays to all of its hourly employees, including members
of the Class. (Id.) In other words, Plaintiffs claim that Defendant
had only hired persons legally authorized to work in the United States,
Defendant would have had to pay higher wages to Plaintiffs and the members
of the Class. (Id.) Thus, according to Plaintiffs, as a direct
and proximate result of Defendant's employment and harboring of illegal
workers, the wages that Plaintiffs and the members of the Class have
earned have been depressed. C. Plaintiffs' RICO Claims 1. Pattern of Racketeering Activity Plaintiffs first allege that Defendant is engaged
in an ongoing pattern of racketeering activity as defined by 18
U.S.C.A. § 1961(5) & (8). (Compl.¶ ¶ 54, 56.)
According to Plaintiffs, Defendant has engaged in racketeering activity,
namely, an open and ongoing pattern of violations of Section 274 of
the Immigration and Nationality Act, 8
U.S.C.A. § 1324(a), more than twice, and the most recent occurrence took place
within ten years after the commission of a prior act of racketeering
activity. (Id. ¶ 55, 57,
58.) In particular, Plaintiffs allege that Defendant has violated and
continues to violate: (1) 8
U.S.C.A. § 1324(a)(3)(A), which makes it a federal crime to "knowingly hire[
] for employment at least 10 individuals with actual knowledge that
the individuals are aliens" during a twelve month period (id.
¶ 59); (2) 8
U.S.C.A. § 1324(a)(1)(A)(iii), which makes it a federal crime to "conceal [ ], harbor[ ] or shield from detection, or attempt[
] to conceal, harbor or shield from detection" aliens that have
illegally entered the United States (id. ¶ 60); and (3) 8
U.S.C.A. § 1324(a)(1)(A)(iv), which makes it a federal crime to "encourage[ ] or
induce[ ] an alien to come to, enter, or reside in the United States,
knowing or in reckless disregard of the fact that such coming to, entry,
or residence is or will be in violation of law" (id. ¶ 61). Plaintiffs contend that each violation
of 8
U.S.C.A. § 1324 constitutes an act of "racketeering activity" as
defined by 18
U.S.C.A. § 1961(1)(F). (Id. ¶ 62.) According to Plaintiffs, the "racketeering
activity" also includes Defendant's open and ongoing violations
of 18
U.S.C.A. § 1546(a) by knowingly accepting various false identification documents
and other false documents indicating authorization for legal employment,
and Defendant's continued violations of 18
U.S.C.A. § 1546(b) by using such documents to fill out I-9 forms. (Compl. ¶
¶ 63-64.) Plaintiffs allege that
each violation of 18
U.S.C.A. § 1546 constitutes an act of "racketeering activity" as
defined by 18
U.S.C.A. § 1961(1)(B) as well as O.C.G.A.
§ 16-14-3(9)(A)(xxix). (Id. ¶ ¶ 65-66.) *4 Plaintiffs claim that the acts of Defendant's
racketeering activity have the same or similar methods of commission
in that those acts involve the knowing employment of illegal workers,
the concealment, harboring, and shielding from detection of illegal
workers, and the acceptance or use of fraudulent
documents in connection with the hiring of illegal workers. (Compl.¶ 67.) According to Plaintiffs, the acts of racketeering
activity have the same or similar objective--i.e. the reduction
of wages paid to Defendant's workforce. (Id. ¶ 68.) Plaintiffs allege that the victims of those
acts of racketeering activity are the same or similar. (Id. ¶ 69.) Plaintiffs also contend that the distinguishing
characteristics of the acts of racketeering activity include the involvement
of Defendant, illegal workers, and other third parties who assist in
the recruitment and transportation of undocumented aliens. (Id.
¶ ¶ 70, 76-84.) According to Plaintiffs, those acts of racketeering
activity have occurred over a long period of time, and have become a
part of Defendant's regular way of doing business. (Compl.¶ ¶ 71-73.) Plaintiffs assert that Defendant has
committed hundreds, and perhaps thousands, of violations of 8
U.S.C.A. § 1324 and 18
U.S.C.A. § 1546 as part of its racketeering activity. (Id. ¶ 74.) Indeed, Plaintiffs claim that Defendant's
racketeering activity has been so pervasive that illegal workers currently
constitute a majority of the workforce in many of Defendant's facilities
in North Georgia. (Id. ¶ 75.) 2. Enterprise Plaintiffs also allege that Defendant has engaged
in its pattern of racketeering activity through its participation in
an association-in-fact enterprise, as defined by 18
U.S.C.A. § 1961(4), with third party employment agencies and other recruiters who supply Defendant
with illegal workers. (Compl.¶ ¶ 76,
79.) Plaintiffs claim that one such recruiter is Temporary Placement
Services ("TPS"), which has a formal relationship with Defendant
in that TPS employs illegal workers and then loans those workers to
Defendant for a fee. (Id.) According to Plaintiffs, other recruiters
simply find workers in an area surrounding Brownsville, Texas, and then
transport those workers to Georgia. (Id.) Plaintiffs contend
that TPS and other recruiters also occasionally assist current and prospective
illegal workers in assuming new identities. (Id.) Plaintiffs
allege that those recruiters share the common purpose of obtaining illegal
workers for employment with Defendant. (Id. ¶ 77.) Additionally, Plaintiffs contend that Defendant
participates in the operation and management of the affairs of the enterprise,
which exists fo Defendant's benefit. (Id. ¶ 78.) Plaintiffs allege that the enterprise affects
interstate commerce in that the illegal workers employed by Defendant
travel in international and interstate commerce to reach Defendant's
facilities in North Georgia. (Compl.¶ ¶
80, 81.) According to Plaintiffs, the enterprise also affects
interstate commerce in that the wages of legal workers employed with
Defendant are depressed. (Id. ¶ 82.) Furthermore, Plaintiffs state that because
Defendant is a member of the enterprise and is directly engaged in the
production, distribution, and acquisition of goods and services in interstate
commerce, the enterprise affects
interstate commerce. (Id. ¶ 83.) *5 According to Plaintiffs, Defendant,
by accepting and retaining the benefits of the racketeering activity,
ratified the conduct of Defendant's managers, employees, and the members
of the enterprise who assisted Defendant in committing those acts of
racketeering activity. (Id. ¶
84.) 3. Causation Plaintiffs next allege that Defendant's violations
of federal and Georgia RICO proximately caused the wages of Plaintiffs
and the members of the Class to be lower than their wages otherwise
would have been had the labor pool consisted solely of legally employed
workers. (Compl.¶ 85.) Thus,
Plaintiffs and the Class claim that they have suffered an injury to
their business or property. (Id. ¶
86.) As a result, Plaintiffs contend that Defendant has earned
or retained significant funds to which it is not entitled. (Id.
¶ 87.) D. Procedural Background On January 6, 2004, Plaintiffs filed this lawsuit.
Plaintiffs assert the following claims: (1) a claim that Defendant's
conduct violates 18
U.S.C.A. § 1962(c) (Compl.88-92); (2) a claim that Defendant's conduct violates
O.C.G.A.
§ 16-14-4(a)
(id. 93-98); (3) a claim that Defendant's conduct violates O.C.G.A.
§ 16-14-4(c)
(id. 99-105); and a claim for unjust enrichment arising under
Georgia law (id. ¶ ¶ 106-110).
Plaintiffs also seek certification of a class pursuant to Federal
Rule of Civil Procedure 23. (Id. ¶
46.) On February 9, 2004, Defendant filed its Motion
to Dismiss pursuant to Federal Rules of Civil Procedure (12)(b)(6) and
(12)(b)(1), [FN2] in
which Defendant requests that the Court dismiss Plaintiffs' federal
and state RICO claims. Defendant also requests that the Court decline
to exercise its pendent jurisdiction over Plaintiffs' state law claims. II. Standard Governing Motions to Dismiss The standard for a court to dismiss a claim is
whether "it appears beyond doubt that the plaintiff can prove no
set of facts to support his claim." GSW,
Inc. v. Long County,
999 F.2d 1508, 1510 (11th Cir.1993) (citing
Conley
v. Gibson,
355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). When considering a motion to dismiss, the Court "must accept the
allegations in the complaint as true, construing them in the light most
favorable to the plaintiffs." White
v. Lemacks,
183 F.3d 1253, 1255 (11th Cir.1999). However,
"[a]s a general rule, conclusory allegations and unwarranted deductions
of fact are not admitted as true in a motion to dismiss." S.
Fla.
Water Mgmt. Dist. v. Montalvo,
84 F.3d 402, 408 n. 10 (11th Cir.1996). III. Discussion A. Plaintiffs' Federal RICO Claim [1][2] 18
U.S.C.A. § 1962(c) provides: "It shall be unlawful for any person employed
by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign
commerce, to conduct or participate, directly or indirectly, in the
conduct of such enterprise's affairs through a pattern of racketeering
activity or collection of unlawful debt." 18
U.S.C.A. § 1962(c). RICO establishes both civil remedies and criminal penalties
for violations of § 1962. See
18
U.S.C.A. § § 1963- 1964. In particular, § 1964(c) provides
that "[a]ny person injured in his business or property by reason
of a violation of section
1962 of this chapter may sue therefor
in any appropriate United States district court and shall recover threefold
the damages he sustains and the cost of the suit, including a reasonable
attorney's fee ...." 18
U.S.C.A. § 1964(c). Thus, for a plaintiff to have standing to pursue a private
civil cause of action under RICO, the plaintiff must prove the following
elements: (1) that the defendant violated § 1962; (2) that
the plaintiff sustained an injury to his business or property; and (3)
that the violation of § 1962 caused the
injury. Avirgan
v. Hull,
932 F.2d 1572, 1577 (11th Cir.1991) (citing
O'Malley
v. O'Neill,
887 F.2d 1557, 1560-61 (11th Cir.1989)).
Likewise, to prevail on a civil RICO claim under § 1962(c), the plaintiff
must show: (1) the existence of an enterprise; (2) that the enterprise
affected interstate commerce; (3) that the defendant was employed by
or associated with the enterprise; (4) that the defendant participated,
either directly or indirectly, in the conduct of the affairs of the
enterprise; and (5) that the defendant participated through a
pattern of racketeering activity. United
States v. Starrett,
55 F.3d 1525, 1541 (11th Cir.1995). *6 18 U.S.C.A. § 1961 provides definitions for some of the terms used in § 1962(c). "Racketeering activity" includes a number of "predicate acts" that |
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