SIMPSON et al v. SANDERSON FARMS INC et al
ORDER granting 74 Motion to Dismiss; granting 76 Motion to Dismiss for Failure to State a Claim; dismissing case with prejudice. Ordered by Judge Hugh Lawson on 2/5/2013. (nbp)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
MELISSA SIMPSON and
SABRINA ROBERTS on behalf of
themselves and all those similarly
Civil Action No. 7:12-CV-28 (HL)
SANDERSON FARMS, INC., PERRY
HAUSER, JEFF BLACK, DEMISHIA
CARRALGOMEZ, JANIE PERALES, KARINA
FONDON, and JENNIFER HARRISON
This case is before the Court on the Motion of Sanderson Farms, Inc.,
Perry Hauser, Jeff Black, Demishia Croft, and Jennifer Harrison Buster to
Dismiss Amended Complaint (Doc. 74) and Janie Perales’ Motion to Dismiss
Amended Class Action Complaint (Doc. 76).1 For the reasons discussed herein,
the motions are granted.
The six moving Defendants will be referred to collectively as “Defendants” for
purposes of this Order. Defendants Fondon and Carral-Gomez did not file a motion to
On February 16, 2012, Plaintiffs filed a putative class action suit under the
Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961,
et seq., and the Georgia RICO Act, O.C.G.A. § 16-14-1, et seq. Plaintiffs alleged
that Defendants have conspired to depress, and have in fact depressed, the
wages paid to hourly workers employed at the Sanderson Farms processing
facility in Moultrie, Georgia since 2008 by knowingly employing large numbers of
illegal aliens and by falsely attesting that the illegal aliens presented genuine
work authorization documentation or identification documents.
Hauser, Black, Croft,
subsequently moved to dismiss Plaintiffs’ complaint. On September 13, 2012, the
Court entered an order granting the motion to dismiss. (Doc. 65). The Court
found that Plaintiffs failed to adequately allege certain RICO predicate acts,
specifically violations of 8 U.S.C. § 1324(a)(3)(A) and 18 U.S.C. §§ 1028(a)(7)
and (f).2 The Court went on to dismiss the complaint in its entirety because
Plaintiffs failed to sufficiently allege a link between the depressed wages and the
false attestations. In other words, the Court found that Plaintiffs failed to establish
Title 8 United States Code Section 1324(a)(3)(A) relates to knowingly hiring
unauthorized workers who have been brought into the United States. Title 18 United
States Code Sections 1028(a)(7) and (f) deal with fraud and related activity in
connection with identification documents.
proximate cause. However, Plaintiffs were given leave to file an amended
Plaintiffs filed their amended complaint on October 5, 2012. (Doc. 66). The
amended complaint omits two counts from the original complaint - a federal
RICO claim against Defendants Hauser, Black, Croft, and Buster for violations of
18 U.S.C. § 1962(c) and a Georgia RICO claim against Defendants Hauser,
Black, Croft, and Buster for violations of O.C.G.A. § 16-14-4(b).3 The amended
complaint also deletes any mention of violations of 8 U.S.C. § 1324(a)(3)(A) and
18 U.S.C. §§ 1028(a)(7) and (f) as RICO predicate acts. Instead, the amended
complaint focuses on violations of 18 U.S.C. §§ 1546(a) and (b)(1)-(3), which are
RICO predicate acts relating to false attestations and the fraudulent use of
documents. The amended complaint also includes a new section entitled “These
RICO Violations (18 U.S.C. § 1546) Proximately Caused the Plaintiffs’ Wage
Depression.” (Am. Compl. ¶¶ 62-69).4
Defendants have now moved to dismiss Plaintiffs’ amended complaint.
Defendants contend that Plaintiffs have again failed to show that the alleged
false attestations proximately caused depressed wages. Defendants argue that
Plaintiffs have not shown any relationship between the alleged false attestations
These are labeled Counts V and VI in the original complaint.
There are other variations between the original complaint and the amended complaint,
but it is not necessary to address them in this Order.
and wages, or that the wages were depressed. Defendants contend Plaintiffs still
have not satisfied Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955,
167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937,
173 L.Ed.2d 868 (2009), as relates to proximate cause.
STANDARD OF REVIEW
A motion to dismiss filed pursuant to Federal Rule of Civil Procedure
12(b)(6) tests the facial sufficiency of a complaint. When considering a Rule
12(b)(6) motion to dismiss, the Court must accept as true all facts set forth in the
plaintiff’s complaint. Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th
The Supreme Court held in Twombly that
[w]hile a complaint attacked by a Rule 12(b)(6) motion
to dismiss does not need detailed factual allegations, a
plaintiff’s obligation to provide the grounds of his
entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements
of a cause of action will not do.
550 U.S. at 555 (internal quotations, citations, and alterations omitted). Further,
“[f]actual allegations must be enough to raise a right to relief above the
speculative level . . . on the assumption that all the allegations in the complaint
are true (even if doubtful in fact).” Id. (quotations and citations omitted). To avoid
dismissal, a complaint must contain sufficient factual matter, accepted as true, to
“state a claim to relief that is plausible on its face.” Id. at 570.
The Supreme Court went one step further in Iqbal, holding that “the tenet
that a court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions.” 556 U.S. at 678. “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Id. In considering a motion to dismiss, the court should “(1) eliminate any
allegations in the complaint that are merely legal conclusions; and (2) where
there are well-pleaded factual allegations, ‘assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.’” Am. Dental
Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 566
U.S. at 679).
To establish a prima facie civil RICO claim, a plaintiff must allege: (1) a
substantive predicate violation of 18 U.S.C. § 1962; (2) injury to his business or
property; and (3) a causal connection between the racketeering activity and the
injury. Avigan v. Hull, 932 F.2d 1572, 1577 (11th Cir. 1991) (citation omitted).
Defendants contend Plaintiffs have not satisfied the third prong of the RICO test.
The third prong requires a civil RICO plaintiff to establish that his alleged
injury was proximately caused by the defendant’s conduct. Hemi Group, LLC v.
City of New York, N.Y., --- U.S. ---, 130 S.Ct. 983, 989, 175 L.Ed.2d 943 (2010);
Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 462, 126 S.Ct. 1991, 164
L.Ed.2d 720 (2006) (holding that “a claim is cognizable under [18 U.S.C.] §
1964(c) only if the defendant’s alleged violation proximately caused the plaintiff’s
injury); Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268, 112 S.Ct. 1311,
117 L.Ed.2d 532 (1992) (same). This means Plaintiffs must show that their
injuries were proximately caused by the alleged predicate acts. See Anza, 547
U.S. at 461 (“When a court evaluates a RICO claim for proximate causation, the
central question it must ask is whether the alleged violation led directly to the
plaintiff’s injuries.”) The Court will again consider whether Plaintiffs have
sufficiently alleged under Twombly and Iqbal a link between the depressed
wages and the § 1546 violations.
Plaintiffs allege the following in support of their claim that the § 1546
violations proximately caused the wage depression:
62. Sanderson employs over 1,500 hourly workers at
its Moultrie Plant, which makes it one of the largest
employers in all of Colquitt County, Georgia. In order to
hire enough workers to staff the Sanderson Plant and to
keep it running, the Defendants must pay the market
hourly wage for unskilled labor.
63. The supply of unskilled workers includes people
who are illegally in the country (and unauthorized for
employment) as well as workers who are legally
authorized for employment. This market supply of labor
(i.e., “the mixed status labor pool”) is relatively “elastic,”
in that it is relatively responsive to changes in the level
64. The market supply of unskilled legal labor is
relatively unresponsive to changes in the level of wages
and is limited. In other words, even with higher wages,
there are relatively few additional unskilled legal
workers available to Sanderson (i.e., the market supply
for unskilled legal labor is relatively “inelastic”). This is
contrasted with the mixed status labor pool which is
relatively responsive and elastic, i.e., more workers will
accept employment at low wages.
65. In order to avail itself of the mixed status labor
supply, the Defendants must violate § 1546. The illegal
workers must make false attestations and the
Defendants must also make their own false attestations
(and accept their fake/false IDs) in order to employ
66. The wholesale failure to complete I-9 Forms for
large numbers of workers at the time of employment on
a mass scale would dramatically increase the risk of
federal prosecution. This is especially so following the
DHS raid at Sanderson in 2008.
67. Therefore, because the Defendants have chosen
to avail themselves of the mixed status labor pool, and
have chosen to continue to do so even after the 2008
raid by giving the illusion of compliance with federal law,
they must routinely violate § 1546 in the manner
68. Accordingly, but for the Defendants’ violations of
§ 1546, they would be limited to employing only legal
unskilled workers and, therefore, be forced to pay
69. As such, the violations of § 1546 are a direct and
substantial cause of the depressed wage rates that the
Plaintiffs, and the other legally authorized hourly
workers at Sanderson, complain [sic]. The wages that
Plaintiffs and the other legally authorized workers at
Sanderson would have received had the Defendants not
violated § 1546 represent an injury to their business or
property, within the meaning of 18 U.S.C. § 1964(c).
(Am. Compl. ¶ 62-69) (emphasis in original).
Defendants argue that there is no factual linkage between the presence of
unauthorized workers and allegedly depressed wages. Instead, Plaintiffs have
just conclusorily stated that the presence of unauthorized workers causes wage
depression. As in their first motion to dismiss, Defendants rely on Walters v.
McMahen, 684 F.3d 435 (4th Cir. 2012). There, the plaintiffs also alleged that
violations of the false attestation predicate resulted in depressed wages. The
Fourth Circuit held that the plaintiffs did not establish that the false attestations
depressed wages and affirmed the dismissal of the plaintiffs’ complaint.
The compensable injury resulting from a violation of 18
U.S.C. § 1962(c) necessarily is the harm caused by the
predicate acts, which must be related sufficiently to
each other that they constitute a pattern. Thus, the
RICO predicate acts must not only be a “but for” cause
of a plaintiff’s injury, but the proximate cause of that
injury as well.
In the present case, however, it is not the violation of
the false attestation predicate that has caused the harm
suffered by the plaintiffs. Rather, the fraudulent use of
identification documents and the false attestations
placed on the I-9 forms are fundamentally crimes
against the government of the United States, and such
actions do not directly impact the plaintiffs’ wage levels.
Although false attestations made by the hiring clerks are
one step in a chain of events that ultimately have
resulted in the employment of unauthorized aliens by
Perdue, the plaintiffs have not demonstrated that the
false attestations themselves have had a direct negative
impact on the plaintiffs’ wages, or on any other aspect
of their compensation.
This deficiency in the plaintiffs’ claim becomes obvious
by removing the false attestation acts from the plaintiffs’
narrative. If Perdue engaged in the hiring of
unauthorized aliens without the hiring clerks’ fraudulent
completion of the I-9 forms, such as by paying the
unauthorized employees in cash and not reporting their
employment to the United States government, the
alleged injury suffered by the plaintiffs would be the
same as that stated in the amended complaint.
Therefore, as this exercise plainly illustrates, the false
attestation violation cannot be a proximate cause of the
plaintiffs’ injury, because there is no direct relationship
between the injury asserted and the predicate act
alleged. For this reason, we hold that the plaintiffs’
allegations regarding the false attestation predicate are
684 F.3d at 444-45 (footnote omitted) (internal citations omitted).
Defendants state that Plaintiffs here have similarly failed to demonstrate
that the false attestations negatively impacted wages. According to Defendants,
Plaintiffs’ assertion that false attestations violative of § 1546 are the only means
by which unauthorized workers can be employed is dubious, and in any event
does not show proximate cause.
Defendants also point to the post-Twombly district court decision in
Walters, 795 F.Supp.2d 350 (D.Md. 2011), which was ultimately affirmed by the
Fourth Circuit as outlined supra, where the court found that Plaintiffs did not
make sufficient allegations to survive a motion to dismiss.
Additionally, under § 1964(c) a Plaintiff must plead
injury to “business or property by reason of” the violation
of § 1962(d). Plaintiffs allege that the “hourly wages for
the Class . . . are depressed below market levels (the
going rate for unskilled labor in the area by employers
which do not employ illegal workers).” Am. Compl. § 73.
Plaintiffs state no underlying data or figures to support
assertion. The complaint states no facts addressing: (1)
the wages of any class members (2) the market wage of
area employers who do not employ illegal workers (3)
how the Plaintiffs can purport to determine which area
employers do and do not “employ illegal workers” for
purposes of calculating market wages. Plaintiffs,
therefore, cannot sustain a claim because they fail to
“raise a right to relief above a speculative level.”
Twombly, 550 U.S. at 555, 127 S.Ct. 1955.
Id. at 357.
Defendants note that Plaintiffs allege the wages of class members, but
argue that the allegations of above minimum wage starting rates followed by
significant raises undermine and do not demonstrate injury. Defendants point out
that Plaintiffs do not provide information about the market wage of area
employers who do not employ illegal workers or how they purport to determine
which area employers do and do not employ illegal workers for purposes of
calculating market wages. As Plaintiffs do not allege the market wage paid by
area employers who do not employ illegal workers, Defendants contend there is
no factual basis for any comparison of wage levels or for an inference that
Sanderson’s wage levels are below those of unidentified employers of only legal
workers. Thus, Defendants argue, Plaintiffs have not made sufficient allegations
under Twombly and Iqbal to establish proximate cause and survive the motions
In response, Plaintiffs generally fall back on the same argument presented
in response to Defendants’ first motion to dismiss - that their pleadings would be
deemed sufficient under Williams v. Mohawk Indus., Inc., 465 F.3d 1277 (11th
Cir. 2006) (“Mohawk II”). Plaintiffs also again point to Mendoza v. Zirkle Fruit Co.,
301 F.3d 1163 (9th Cir. 2002), and Trollinger v. Tyson Foods, Inc., 370 F.3d 602
(6th Cir. 2004), cases where similar wage depression complaints have withstood
causation challenges. But once again, all of these cases were pre-Twombly
and/or Iqbal. They were governed by a different, more lenient standard. The
Court will say it once more - those cases simply have little precedential value.
Perhaps it is time for the Eleventh Circuit to revisit Mohawk II in light of
Twombly and Iqbal. But that is not for this Court to say. What the Court can say
is that in its opinion, Plaintiffs’ amended complaint cannot survive the motions to
dismiss because it fails to allege sufficient facts to show that the § 1546
violations proximately caused depressed wages. The Court agrees with
Defendants that actual data is required to support the wage depression claim.
Plaintiffs’ statement that “but for” the violations, Defendants would be limited to
employing only legal unskilled workers and, therefore, be forced to pay higher
wages is conclusory and not supported by any actual facts. In any event,
showing “but for” causation does not carry the day. Plaintiffs must also show
some direct relation between the injury and the injurious conduct. The Court must
ask “whether the alleged violation led directly to the plaintiff’s injuries.” Anza, 547
U.S. at 461. Based on the allegations before it, the Court cannot find that the §
1546 violations led to Plaintiffs’ injuries, i.e., the depressed wages. At this point,
Plaintiffs have not raised a right to relief about a speculative level as required by
Twombly. Thus, the amended complaint fails.
For the foregoing reasons, the Court grants the Motion of Sanderson
Farms, Inc., Perry Hauser, Jeff Black, Demishia Croft, and Jennifer Harrison
Buster to Dismiss Amended Complaint (Doc. 74) and Janie Perales’ Motion to
Dismiss Amended Class Action Complaint (Doc. 76).
Plaintiffs, who are represented by counsel well versed in wage depression
RICO claims, were given an opportunity to cure the deficiencies in the complaint
and failed to do so. Under the circumstances, the Court finds dismissal of the
complaint with prejudice appropriate.
SO ORDERED, this the 5th day of February, 2013.
s/ Hugh Lawson
HUGH LAWSON, SENIOR JUDGE