SIMPSON et al v. SANDERSON FARMS INC et al
Filing
65
ORDER granting 41 Motion to Dismiss Complaint. Plaintiffs have until 10/5/2012 to file an amended complaint if they so choose. Ordered by Judge Hugh Lawson on 9/13/2012. (nbp)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION
MELISSA SIMPSON and
SABRINA ROBERTS on behalf of
themselves and all those similarly
situated,
Civil Action No. 7:12-CV-28 (HL)
Plaintiffs,
v.
SANDERSON FARMS, INC., PERRY
HAUSER, JEFF BLACK, DEMISHIA
CROFT,
ARISTIDES
CARRALGOMEZ, JANIE PERALES, KARINA
FONDON, and JENNIFER HARRISON
BUSTER,
Defendants.
ORDER
This case is before the Court on a Motion to Dismiss (Doc. 41) filed by
Defendants Sanderson Farms, Inc., Perry Hauser, Jeff Black, Demishia Croft,
and Jennifer Harrison Buster.1 For the reasons discussed herein, the motion is
granted, but Plaintiffs will be given leave to amend their complaint.
I.
BACKGROUND
This is a putative class action suit brought under the Racketeer Influenced
and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., and the
1
The five moving Defendants will be referred to collectively as “Defendants” for purposes of this Order.
Defendants Perales, Fondon, and Carral-Gomez did not file a motion to dismiss.
Georgia RICO Act, O.C.G.A. § 16-14-1, et seq. (“Georgia RICO”). Plaintiffs
commenced this action on behalf of all hourly-paid workers, legally authorized to
be employed in the United States, who have been employed at the Sanderson
Farms processing facility in Moultrie, Georgia since 2008. Plaintiffs allege that all
of the Defendants have conspired to depress, and have in fact depressed, the
wages paid to the hourly workers by knowingly employing large numbers of
illegal aliens and by falsely attesting that the illegal aliens presented genuine
work authorization documentation or identification documents.
Plaintiffs have sued Sanderson Farms, the corporate employer; Perry
Hauser, the complex manager of the Moultrie plant until 2011; Jeff Black, the
assistant plant manager of the Moultrie plant until 2010 or 2011; Demishia Croft,
the human resources manager at the Moultrie plant from 2008 to 2010; Aristides
Carral-Gomez, a human resources clerk at the Moultrie plant from 2008 to 2010;
Janie Perales, a human resources clerk at the Moultrie plant until 2009; Karina
Fondon, a human resources clerk at the Moultrie plant until 2009; and Jennifer
Harrison Buster, the current corporate human resources manager at the
Sanderson Farms corporate headquarters, located in Mississippi.2
2
Plaintiffs group the Defendants together as follows in their complaint: Defendants Hauser, Black, and
Croft are referred to as the “Plant Manager Defendants;” Defendants Carral-Gomez, Perales, and Fondon
are referred to as the “HR Clerk Defendants;” and Defendant Buster is referred to as the “Corporate
Manager Defendant.” The Court uses these groupings where appropriate.
2
Plaintiffs’ complaint contains seven counts. Count I is a federal RICO
conspiracy claim under 18 U.S.C. § 1962(d). Count II is a Georgia RICO
conspiracy claim under O.C.G.A. § 16-14-4(c). Counts III and V are federal RICO
claims against certain Defendants. Counts IV and VI are Georgia RICO claims
against certain Defendants. Count VII is a Georgia RICO claim against
Defendant Sanderson Farms.
Defendants have now moved to have the complaint dismissed in its
entirety. Defendants argue that Plaintiffs have not sufficiently pled their
allegations as required by Federal Rule of Civil Procedure 8, 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), and further have
not properly alleged fraud as required by Federal Rule of Civil Procedure 9(b)
where applicable. Defendants also contend that Plaintiffs’ complaint fails to
establish proximate cause. Finally, Defendants argue that the state RICO claims
should be dismissed because the federal RICO claims cannot stand.3
Although the Court ultimately finds that the complaint fails because it does
not establish proximate cause, since Plaintiffs will be allowed to amend, the
Court will examine each alleged predicate act and determine whether the
3
The Georgia RICO provisions are modeled after the federal provisions, and the same analysis is
generally applied to both. See Morast v. Lance, 631 F.Supp. 474, 481 (N.D. Ga. 1986), aff’d, 807 F.2d
926 (11th Cir. 1987). As the Georgia RICO claims are based on the same predicate acts as the federal
RICO claims, if the Court finds that Plaintiffs have not stated a claim under a particular predicate act, the
Georgia RICO claims based on that predicate act fail.
3
complaint as it currently stands provides sufficient factual support for the
predicate act.
II.
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
Cir. 2009).
Under Rule 8, a pleading must contain “a short and plain statement of the
claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The
Supreme Court held in Twombly that:
While 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.
4
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). The court may also “infer from the factual allegations in the
complaint ‘obvious alternative explanation[s],’ which suggest lawful conduct
rather than the unlawful conduct the plaintiff would ask the court to infer.’” Id.
(quoting Iqbal, 556 U.S. at 682).
In addition, a civil RICO claim based on predicate acts of fraud must
comply not only with the standards set forth in Twombly and Iqbal, but also with
the Rule 9(b) heightened pleading standard, which requires that “[i]n alleging
fraud or mistake, a party must state with particularity the circumstances
constituting fraud or mistake.” Fed.R.Civ.P. 9(b); see also Am. Dental, 605 F.3d
at 1291; Ambrosia Coal & Const. Co. v. Pages Morales, 482 F.3d 1309, 1316-17
(11th Cir. 2007) (“To satisfy the Rule 9(b) standard, RICO complaints must
5
allege: (1) the precise statements, documents, or misrepresentations made; (2)
the time and place of and person responsible for the statement; (3) the content
and manner in which the statements misled the Plaintiffs; and (4) what the
Defendants gained by the alleged fraud.”)
III.
DISCUSSION
Under RICO, it is 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. § 1962(c).
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). To establish a
substantive violation of § 1962, a plaintiff must show: (1) the conduct (2) of an
enterprise (3) through a pattern (4) of racketeering activity. Edwards v. Prime,
Inc., 602 F.3d 1276, 1291-92 (11th Cir. 2010) (quotations and citations omitted). 4
A “pattern of racketeering activity” “requires at least two acts of racketeering
activity.” 18 U.S.C. § 1961(5); Edwards, 602 F.3d at 1292. To successfully allege
4
Sanderson Farms is the alleged RICO enterprise in the federal counts.
6
a pattern of racketeering activity, a plaintiff must allege the commission of two or
more predicate acts within a ten-year time span that are related to each other
and which amount or pose a threat of continued criminal activity. Am. Dental, 605
F.3d at 1290-91. "An act of racketeering is commonly referred to as a ‘predicate
act.’” Edwards, 602 F.3d at 1292. The long list of RICO predicate acts is found in
18 U.S.C. § 1961. In addition, a plaintiff in a civil RICO action must also satisfy
the requirements of § 1964(c), which requires (1) a showing of an injury to
“business or property,” and (2) that such injury was “by reason of” the substantive
RICO violation. 18 U.S.C. § 1964(c).
Plaintiffs base their RICO claims on violations of 18 U.S.C. § 1546(a)
(relating to fraud and misuse of visas, permits, and other documents), 18 U.S.C.
§§ 1546(b)(1)-(3) (same), 18 U.S.C. § 1028(a)(7) (relating to fraud and related
activity in connection with identification documents), 18 U.S.C. § 1028(f) (same),
and 8 U.S.C. § 1324(a)(3)(A) (knowingly hiring unauthorized workers who had
been brought into the United States). The Court will now address each alleged
predicate act.
A.
8 U.S.C. § 1324(a)(3)(A)
One of the alleged predicate acts is a violation of 8 U.S.C. § 1324(a)(3)(A).
That code section provides: “Any person who, during any 12-month period,
knowingly hires for employment at least 10 individuals with actual knowledge that
7
the individuals are aliens described in [§ 1324(a)(3)(B)] shall be fined under Title
18 or imprisoned for not more than 5 years, or both.” 8 U.S.C. § 1324(a)(3)(A).
The term “alien” refers to (1) “an unauthorized alien,” as defined in § 1324a(h)(3),
who (2) “has been brought into the United States in violation of [§ 1324(a)].” 8
U.S.C. § 1324(a)(3)(B).
In support of the § 1324(a)(3)(A) claim, Plaintiffs allege as follows:
Specifically, since 2008, [the HR Clerk Defendants]
have personally hired hundreds of workers (and more
than ten per year, each) with actual knowledge that the
workers were unauthorized for employment, used
fraudulent identity documents that did not pertain/relate
to them, and had been brought into the country with the
assistance of others on their illicit journey sneaking
across the dangerous U.S.-Mexico border to their final
destination in the U.S. (in locations other than border
towns, including states that are not on the U.S.-Mexico
border, such as Georgia), and in obtaining fake/false
identity documents once here.
(Compl., ¶ 65).
As recognized by the Eleventh Circuit in Edwards, 602 F.3d at 1276, the
Fourth Circuit in Walters v. McMahen, 684 F.3d 435 (4th Cir. 2012), and the
Second Circuit in Commercial Cleaning Services, L.L.C. v. Colin Service
Systems, Inc., 271 F.3d 374 (2d Cir. 2001), the illegal hiring predicate act has
two mens rea elements, both of which must be present for there to be a violation.
“First, a defendant must hire ten or more aliens within a 12-month period with
actual knowledge that those aliens are not authorized to work in the United
8
States.” Walters, 684 F.3d at 440 (citing Edwards, 602 F.3d at 1292-93).
“Second, the defendant must have actual knowledge that the unauthorized aliens
hired were brought into the country in violation of 8 U.S.C. § 1324(a).” Id. (citing
Edwards, 602 F.3d at 1293; Commercial Cleaning Servs., 271 F.3d at 387).
The Court finds that Plaintiffs have not sufficiently pled a violation of the
illegal hiring predicate, specifically that the HR Clerk Defendants, or any of the
Defendants for that matter, had actual knowledge that the aliens hired were
brought into the country in violation of § 1324(a). It is not enough to make a
conclusory allegation that the hiring clerks had “actual knowledge” that the aliens
“had been brought into the country with the assistance of others.” (Compl., ¶ 65).
Plaintiffs have provided no factual support for the second element of the illegal
hiring predicate act. The complaint in Walters contained the exact same
allegations for the illegal hiring claim as those present in the complaint before the
Court. As noted by the Fourth Circuit in Walters, the allegations set forth by
Plaintiffs “merely recast[ ] the language of 8 U.S.C. § 1324(a)(3), and provide[ ]
no factual basis to support the statement that hiring clerks had ‘actual knowledge’
that the unauthorized aliens ‘had been brought into the country with the
assistance of others.’” Walters, 684 F.3d at 442. The Court finds the Walter
9
opinion persuasive, and finds that Plaintiffs have not sufficiently alleged a
violation of the illegal hiring predicate.5
B.
18 U.S.C. §§ 1028(a)(7) and (f)
Plaintiffs allege that the HR Clerk Defendants have personally violated 18
U.S.C. §§ 1028(a)(7) and (f), which are RICO predicate offenses.
Section 1028(a)(7) states that:
Whoever . . . knowingly transfers, possesses, or uses,
without lawful authority, a means of identification of
another person with the intent to commit, or to aid or
abet, or in connection with, any unlawful activity that
constitutes a violation of Federal law, or that constitutes
a felony under any applicable State or local law; . . .
shall be punished as provided in subsection (b) of this
section.
18 U.S.C. § 1028(a)(7).
Section 1028(f), the companion conspiracy statute, provides that “[a]ny
person who attempts or conspires to commit any offense under this section shall
be subject to the same penalties as those prescribed for the offense, the
commission of which was the object of the attempt or conspiracy.” 18 U.S.C. §
1028(f).
In their complaint, Plaintiffs allege the following in support of their §§
1028(a)(7) and (f) claims:
5
Plaintiffs similarly fail to state a claim under § 1324 as relates to their Georgia RICO claims.
10
The HR Clerk Defendants routinely accept, receive,
obtain, and use fake and fraudulent identification and
work authorization documents (including but not limited
to alien registration cards, drivers licenses, state IDs
and social security cards) as part of the process of
completing I-9 Forms and verifying work authorization,
knowing that these documents were not issued legally
for use by the processor, for the reasons identified in
¶¶25-49, inter alia. Thus, these actions violate 18
U.S.C. §§1546(a), (b)(1), (b)(2), and 18 U.S.C.
§§1028(a)(7) and (f).
The acceptance, receipt, obtaining, and/or usage of
fake and fraudulent identification and work authorization
documents during the new hire process occurs in the
Moultrie Plant, by the HR Clerk Defendants completing
the I-9 Form (as indicated by the signature in Section 2
of the I-9 Form), at the time the I-9 Form is completed
for each unauthorized alien (as noted by the date on the
I-9 Form), and in the presence of the unauthorized alien
on whose behalf the HR employee is falsely attesting.
On information and belief, copies of these fake and
fraudulent identification and work authorization
documents are then kept in the Moultrie Plant’s HR
office.
(Compl., ¶¶ 60-61).
Defendants contend that Plaintiffs fail to state a claim under § 1028.
Subsection (a)(7) creates liability for anyone who knowingly transfers,
possesses, or uses a means of identification of another person.6 Plaintiffs
6
Section 1028(d)(7) defines “means of identification” in pertinent part as “any name or number that may
be used, alone or in conjunction with any other information, to identify a specific individual, including any - (A) name, social security number, date of birth, official State or government issued driver’s license or
identification number, alien registration number, government passport number, employer or taxpayer
identification number; . . .” 18 U.S.C. § 1028(d)(7).
11
acknowledge their only contention under § 1028(a)(7) is that the HR Clerk
Defendants use the fake IDs during the hiring process.
Defendants argue that the allegedly fake documents are not “used” by the
employer. Instead, they are used by the employee to satisfy the employee’s
obligation to establish work eligibility. Defendants further contend that the
complaint does not state a Twombly or Rule 9(b) compliant claim under § 1028.
Because the predicate act is a fraud-based act, Defendants argue that Plaintiffs
have to plead this claim with particularity and provide specific information about
the documents presented, the types of documents involved, when the documents
were presented and to whom, and why a particular document did not appear to
be genuine or relate to the presenter - or in other words, the who, what, where,
when, and why.
Plaintiffs first state in response that Rule 9 is inapplicable to their § 1028
claims because the claims do not sound in fraud. Plaintiffs state that the Mohawk
courts “conclusively held” that false document violations do not sound in fraud
and are not subject to Rule 9(b). See Williams v. Mohawk Indus., Inc., 314
F.Supp.2d 1333 (N.D. Ga. 2004) (“Mohawk I”). However, Defendants correctly
point out that neither Mohawk II nor Mohawk III, which are the surviving appellate
opinions, address whether Rule 9 applied to the asserted predicate acts. See
Williams v. Mohawk Indus., Inc., 465 F.3d 1277 (11th Cir. 2006) (“Mohawk II”);
12
Williams v. Mohawk Indus., Inc., 568 F.3d 1350 (11th Cir. 2009) (“Mohawk III”).
The Court also points out that the plaintiffs in Mohawk did not make an allegation
under § 1028. The Court declines to extend to the § 1028 claims in this case a
determination by another district court that certain predicate acts do not sound in
fraud.
In any event, Plaintiffs contend that even if Rule 9(b) does apply, they have
made allegations sufficient to meet that standard. However, the Court finds that
regardless of what standard is applied, Plaintiffs fail to state a claim on the merits
under § 1028.
In response to Defendants’ argument that the complaint does not show a
violation of § 1028 because the employer does not use the fake IDs during the
hiring process, but rather the employees do, Plaintiffs argue that the hiring clerks
do in fact “use” the IDs, albeit temporarily, to certify the applicant is authorized for
employment. Plaintiffs urge the Court to apply a broad definition of the term
“use.” Further, Plaintiffs argue that this issue has already been decided by the
Mohawk courts, but the Court notes again that Mohawk did not involve a § 1028
claim, and the Court will not fold a § 1028 claim into Mohawk’s analysis of a §
1546 claim. The Court does not agree that the Mohawk holding necessarily
applies to § 1028.
13
Section 1028 prohibits identity theft. Other than Mohawk, which is not on
point, Plaintiffs have not provided any support for their argument that § 1028
encompasses an employer using a document as part of a hiring process, and the
Court has found none on its own. Plaintiffs have to allege something more than
just the HR Clerk Defendants looked at the documents prior to completing an I-9
Form. Plaintiffs have not alleged that any of the Defendants have stolen any
identity documents, and further have not alleged that any Defendants used the
identification of another person without lawful authority. The Court finds that
Plaintiffs have not stated a claim under § 1028(a)(7), and because the
substantive claim fails, the § 1028(f) conspiracy claim fails as well.7
C.
18 U.S.C. §§ 1546(a), (b)(1)-(b)(3)
Plaintiffs also contend that the HR Clerk Defendants violated 18 U.S.C. §§
1546(a) and 1546(b)(1)-(3), which are predicate acts under 18 U.S.C. §
1961(1)(B). These code sections relate to false attestations and the fraudulent
use of documents. Section 1546(a) provides in pertinent part:
Whoever knowingly makes under oath, or as permitted
under penalty of perjury under section 1746 of title 28,
United States Code, knowingly subscribes as true, any
false statement with respect to a material fact in any
application, affidavit, or other document required by the
immigration laws or regulations prescribed thereunder, .
. .[s]hall be fined under this title or imprisoned. . . .
18 U.S.C. § 1546(a).
7
Plaintiffs similarly fail to state a claim under § 1028 as relates to their Georgia RICO claims.
14
Section 1546(b) states:
Whoever uses (1)
an identification document, knowing (or having
reason to know) that the document was not issued
lawfully for the use of the possessor,
(2)
an identification document knowing (or having
reason to know) that the document is false, or
(3)
a false attestation,
for the purpose of satisfying a requirement of section
274A(b) of the Immigration and Nationality Act, shall be
fined under this title, imprisoned not more than 5 years,
or both.
18 U.S.C. § 1546(b)(1)-(3).
Plaintiffs allege the following with regard to the false attestation violations
under §§ 1546(a) and (b)(3):
51. When completing I-9 Forms for newly hired
hourly-paid workers, the HR Clerk Defendants routinely
falsely attest, under penalty of perjury, the following:
I attest, under penalty of perjury, that I have
examined the document(s) presented by the
above-named employee, that the above-listed
document(s) appear to be genuine and to relate to
the employee named, that the employee began
employment on (month/date/year) _____ and that
to the best of my knowledge the employee is
authorized to work in the United States.
52. In the case of illegal aliens, this is a false
attestation because the HR Clerk Defendants know the
documents presented are fake/fraudulent, for the
15
reasons identified in ¶¶ 25-49, inter alia. Thus, these
actions violate 18 U.S.C. § 1546(a) and § 1546(b)(3),
RICO predicate offenses.
53. These false attestations occur at the Moultrie
Plant, by the HR Clerk Defendants completing the I-9
Form (as indicated by the signature in Section 2 of the I9 Form), at the time the I-9 Form is completed for each
unauthorized alien (and noted by the date on the I-9
Form), and in the presence of the unauthorized alien on
whose behalf the HR Clerk Defendant is falsely
attesting. On information and belief, these I-9 Forms are
then kept in the HR office of the Moultrie Plant.
(Compl., ¶¶ 51-53).
Specifically, Plaintiffs allege that when completing I-9 Forms for newly
hired workers, the HR Clerk Defendants routinely made false attestations
because they knew the documents being presented were fake or fraudulent.
Plaintiffs allege the following with regard to the acceptance, receipt,
obtaining, and use of fake or fraudulent documents pursuant to § 1546(a)8 and
(b)(1)-(2)9:
8
Plaintiffs also address the §1546 claims in their RICO interrogatories, and state as follows with regard to
§§1546(a) and (b):
The HR Clerk Defendants are alleged to have personally violated 18 U.S.C. §1546(a)
[and (b)], repeatedly, from 2008-2010, when they attest, under penalty of perjury, the
following for illegal aliens:
I attest, under penalty of perjury, that I have examined the document(s)
presented by the above-named employee, that the above-listed
document(s) appear to be genuine and to relate to the employee named,
that the employee began employment on (month/date/year) ______ and
that to the best of my knowledge the employee is authorized to work in
the United States. (Form I-9).
16
In the case of illegal aliens, this is a false attestation because the HR Clerk Defendants
know the documents presented are fake/fraudulent, for the reasons stated above (in
response 1(a)). These violations occur every time an I-9 Form is completed for an illegal
alien, which occurs on a weekly basis (if not more frequently). After the HR Clerk
Defendants were terminated, it is alleged that other HR personnel committed these
violations in the same manner, under the direction of the Plant Manager Defendants and
Buster. These individuals are unnamed co-conspirators because Plaintiffs do not yet
know their identities.
*****
Plaintiffs’ Counsel does not believe that this predicate act is subject to Fed. R. Civ. P.
9(b), but nevertheless states that: these false attestations occur at the Moultrie Plant, by
the HR Clerk Defendants/personnel completing the I-9 Form (as indicated by the
signature in Section 2 of the I-9 Form), at the time the I-9 Form is completed for each
unauthorized alien on whose behalf the HR Clerk/HR Personnel is falsely attesting. On
information and belief, these I-9 Forms are then kept in the HR office of the Moultrie
Plant. The I-9 Forms, photocopies of supporting documents/IDs and applications are in
the sole possession of Sanderson Farms, Inc. Plaintiffs do not have access to these
documents, and therefore, cannot provide any more details under Rule 9(b).
(Doc. 1-1, pp. 7-8).
9
Plaintiffs make the following allegations with regard to the §§ 1546(b)(1)-(2) claims in their RICO
interrogatories:
The HR Clerk Defendants are alleged to have personally violated 18 U.S.C. §1546(b)(1)
[and (2)], repeatedly, from 2008-2010, by accepting, receiving, obtaining, and using fake
and fraudulent identification and work authorization documents (including but not limited
to alien registration cards, drivers licenses, state IDs and social security cards) as part of
the process of completing I-9 Forms and verifying work authorization, knowing that these
documents were not issued legally for use by the processor, for the reasons stated above
in Response 1(a). These violations occur every time an I-9 Form is completed for an
illegal alien (when the illegal alien tenders fake IDs in connection with this process),
which occurs on a weekly basis (if not more frequently). After the HR Clerk Defendants
were terminated, it is alleged that other HR personnel committed these violations in the
same manner, under the direction of the Plant Manager Defendants and Buster. These
individuals are unnamed co-conspirators because Plaintiffs do not yet know their
identities.
*****
Plaintiffs’ Counsel does not believe that this predicate act is subject to Fed. R. Civ. P.
9(b), but nevertheless states that: these false attestations occur at the Moultrie Plant, by
the HR Clerk Defendants/personnel completing the I-9 Form (as indicated by the
signature in Section 2 of the I-9 Form), at the time the I-9 Form is completed for each
unauthorized alien (and noted by the date on the I-9 Form), and in the presence of the
unauthorized alien on whose behalf the HR Clerk/HR Personnel is falsely attesting. On
information and belief, these I-9 Forms are then kept in the HR office of the Moultrie
Plant. The I-9 Forms, photocopies of supporting documents/IDs and applications are in
17
60. The HR Clerk Defendants routinely accept,
receive, obtain, and use fake and fraudulent
identification and work authorization documents
(including but not limited to alien registration cards,
drivers licenses, state IDs and social security cards) as
part of the process of completing I-9 Forms and
verifying work authorization, knowing that these
documents were not issued legally for use by the
processor, for the reasons identified in ¶¶25-49, inter
alia. Thus, these actions violate 18 U.S.C. §§ 1546(a),
(b)(1), (b)(2), and 18 U.S.C. §§ 1028(a)(7) and (f).
61. The acceptance, receipt, obtaining, and/or usage
of fake and fraudulent identification and work
authorization documents during the new hire process
occurs in the Moultrie Plant, by the HR Clerk
Defendants completing the I-9 Form (as indicated by the
signature in Section 2 of the I-9 Form), at the time the I9 Form is completed for each unauthorized alien (as
noted by the date on the I-9 Form), and in the presence
of the unauthorized alien on whose behalf the HR
employee is falsely attesting. On information and belief,
copies of these fake and fraudulent identification and
work authorization documents are then kept in the
Moultrie Plant’s HR office.
(Compl., ¶¶ 60-61).
In the paragraphs referenced as establishing that the documents
presented to the HR Clerk Defendants were fraudulent or fake, that Defendants
were aware of that fact, that the documents were accepted and used anyway,
the sole possession of Sanderson Farms, Inc. Plaintiffs do not have access to these
documents, and therefore, cannot provide any more details under Rule 9(b).
(Doc. 1-1, pp. 8-9).
18
and that the HR Clerk Defendants made false attestations and fraudulently
completed the I-9 forms, Plaintiffs allege that:
25. Buster and the Corporate Manager Coconspirators directed the Plant Manager Defendants to
hire any person who could produce identification
documents (“IDs”) required by the Department of
Homeland Security’s (“DHS”) Form I-9, Employment
Eligibility Verification Form (“I-9” or “I-9 Form”),
regardless of whether the IDs looked real/genuine, and
regardless of whether the IDs related to the person
tendering them. The Plant Manager Defendants then
instructed the HR Clerk Defendants to conduct hiring in
this manner, which they did.
26. As a result, hundreds of illegal aliens were hired
by the HR Clerk Defendants using IDs that were
obviously fake, including: a) IDs with pictures that
appeared to have been cut and pasted from another
document and then re-laminated on the ID, making it
feel thicker; b) photographs with images of more than
one face; c) IDs issued from Mexico; and/or d) IDs
which were not issued from the U.S. government or any
State. (This is a non-exhaustive list of common
examples of fake/fraudulent documents.)
27. The vast majority of these same workers knew
little or no English.
28. The HR Clerk Defendants hired these individuals
despite their flagrant use of these fake/fraudulent
documents, as well as unsupported claims of U.S.
citizenship.
29. The nurses at the Moultrie Plant were responsible
for conducting physicals for the newly hired workers. In
order to conduct the physicals (which included, among
other things, a urine test), the nurses needed to see a
picture ID. The Plant nurses frequently noticed that the
19
IDs being used by these workers appeared to be
obvious fakes, for the reasons stated above.
30. The Plant nurses raised their concerns and
suspicions with the HR Clerk Defendants and Plant
Manager Defendants. For example, they discussed the
issue with Defendants Perales, Fondon, and [CarralGomez]. Defendant Perales responded that she could
“get a busload of Mexicans anytime they [Sanderson]
needed them.” Defendant Fondon thought it was “funny”
but irrelevant that so many of these workers could not
speak English. Defendant [Carral-Gomez] agreed that
their IDs did not look real.
32. The nurses also discussed these problems with
the Plant Manager Defendants and Defendants Buster.
Defendants Buster, Hauser, Black, and Croft all
responded in the same general way: “It did not matter
[that the IDs did not look real] as long as they passed
the I-9 process.” Defendant Hauser even commented
on at least one occasion that “they [the individuals with
bad IDs] were good workers.”10
33. Once hired, these illegal alien workers assumed a
Sanderson pseudonym, which was used solely for
employment purposes. However they were known to
friends at the Plant by their real name. For example,
there was an illegal alien worker who went by the name
of “Vivian Flores” at the Plant, but her “real name” was
“Arelly Ponce.”
41. On information and belief, at some point during
the relevant period, Buster and the Corporate Manager
Co-conspirators decided to use DHS’ E-Verify program
(as well as other similar software programs) at the Plant
for the reasons described above and below.
10
Plaintiffs state in their RICO interrogatory responses that a plant nurse has signed a sworn statement
detailing her encounters with all Defendants where she confronted them about the immigration issues.
(Doc. 1-1, p. 14). This sworn statement has not been provided to the Court or presumably to any
Defendant.
20
43. When using E-Verify, the person conducting
hiring must still comply with the I-9 Form’s verification
requirement, regardless of whether the applicant
“passes” E-Verify. The I-9 Form requires the person
conducting hiring to verify, under penalty of perjury, that
the IDs appear genuine and relate to the employee
presenting them, in order to confirm work authorization.
44. Accordingly, on information and belief, Buster
instructs the Plant Manager Defendants to complete I-9
Form[ ] and to utilize the E-Verify Program, but not to
check for, and/or to disregard signs of, identity theft,
which Buster knows is not detected by the program.
She instructs the Plant Managers to hire workers if their
documents pass the program, regardless of other
obvious facts indicating that the applicant is not really
who they say they are, i.e., are lying about their identity.
45. The Plant Manager Defendants in turn instruct the
HR Clerk Defendants to complete the I-9 Forms and
hire individuals despite information that the applicant is
lying about their identity/background/work authorization
status and/or whose background information (as
provided in the interview/application/new hire process)
is plainly invalid and/or inconsistent on its face.
46. For example, an applicant using an Arkansas ID
when the worker’s application states he is from Mexico
and lists no education, work history, or prior addresses
in Georgia, is plainly using someone else’s identity. The
same is true of the following: workers whose birth date
on the application differs from the date on the tendered
IDs; workers who claim to live in Georgia for the past
few years, but produce an out of state ID issued just
days earlier; workers who have been previously
employed at the Moultrie Plant under different names;
and/or workers who cannot speak basic English, but
claim to be U.S. citizens. (This is a non-exhaustive list.)
(Compl., ¶¶ 25-30, 32-33, 41, 43-46).
21
Defendants argue that these predicate acts involve fraud and are subject
to Rule 9(b)’s heightened pleading standard, but Plaintiffs have not alleged fraud
with particularity. Plaintiffs, again relying on the Mohawk cases, argue that these
allegations do not sound in fraud and are not subject to Rule 9(b). But as
discussed supra, the surviving Mohawk opinions do not address whether Rule 9
applies to § 1546 claims or not. Thus, the Court will look elsewhere to decide this
issue.
Section 1546 is entitled “Fraud and misuse of visas, permits, and other
documents.” 18 U.S.C. § 1546. The acts prohibited by this code section involve
immigration document fraud, obtaining employment through fraudulent means,
fraudulently completing immigration forms, and making fraudulent or false
attestations on immigration forms. The Court has little trouble finding that the §
1546 claims are subject to Rule 9(b), as it is well-settled in the Eleventh Circuit
that, when the racketeering activities alleged are predicated upon acts of fraud,
the plaintiff must plead those predicate acts with the same particularity required
by Rule 9(b). See Ambrosia Coal, 482 F.3d at 1316; Am. Dental, 605 F.3d at
1291 (mail and wire fraud); Kivisto v. Miller, Canfield, Paddock & Stone, PLC,
413 F.App’x 136, 139 (11th Cir. 2011) (mail fraud). The Southern District of
Florida in Magnifico v. Villanueva, 783 F.Supp.2d 1217 (S.D. Fla. 2011), a postMohawk case, similarly found that § 1564 is governed by Rule 9(b).
22
Since Rule 9(b) applies to the § 1546 claims, Plaintiffs must allege: “(1) the
precise statements, documents, or misrepresentations made; (2) the time, place,
and person responsible for the statement; (3) the content and manner in which
these statements misled the Plaintiffs; and (4) what the defendants gained by the
alleged fraud.” Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364,
1380-81 (11th Cir. 1997). Plaintiffs do not have to show reliance on the
defendants’ fraudulent misrepresentations or statements. Magnifico, 783
F.Supp.2d at 1228 (citing Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639,
661, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008)).
Defendants contend Plaintiffs have not satisfied the “who, what, when,
where, and how” requirement for the § 1546 fraud claims. Defendants assert that
the complaint must set forth the precise documents at issue, the date and
circumstances of the claimed presentment, the identity of the employee, how and
why the documents did not appear to be genuine or relate to the presenting
employee, how and when the Defendants participated in the alleged activity,
what the HR Clerk Defendants gained by the fraud, who directed the HR Clerk
Defendants to commit the alleged acts, when the HR Clerk Defendants were so
directed, or how the HR Clerks were directed. In response, Plaintiffs point to
various paragraphs in the complaint, along with their RICO interrogatories, and
state that the following:
23
Here, the false statements were made on the I-9 Form
in the form of the attestation (¶51); by Perales, Fondon,
and [Carral-Gomez] personally, at the Plant, as
indicated by their individual signatures on the I-9 Form
(not by the Plant Manager Defendants or Buster); on the
date the aliens were hired (as indicated in Section 2 of
the I-9 Form) (¶53); the statements were false because
the HR Clerks knew the hired employee was not
authorized to work in the U.S. and was using
fake/fraudulent IDs for the reasons detailed in ¶¶25-49
(¶52); the HR Clerks were directed to do this by Croft,
Black, and Hauser through training, instruction, and
supervision (¶¶21-22, 73-74, Inter. 9); and the
Defendants were able to sufficiently staff the Plant at
sub-market wages, keeping Sanderson profitable (see,
e.g., ¶¶ 16, 23-24, 77).
(Doc. 56, p. 22). Plaintiffs further argue that because the fraudulent statements
(the false attestations on the I-9 Forms) are in Defendants’ sole possession, Rule
9(b) is relaxed and they are not required to produce every detail prior to
discovery.
Defendants reply that these allegations are not sufficient to state a claim
under Rule 9(b), and further that all of the information is not in their sole
possession, as the ID documents presented to the HR Clerk Defendants remain
in the possession of the employee.
Upon careful consideration and review, the Court finds that Plaintiffs have
alleged violations of § 1546 sufficient under Rule 9(b) to withstand a Rule
12(b)(6) motion to dismiss. While Plaintiffs do not allege specific names of the
alleged illegal workers, the Court does not believe such specificity is required at
24
this juncture. See Walters, 684 F.3d at 443 (“[W]e conclude that the plaintiffs’
failure to identify any of the unauthorized aliens involved is not fatal to their
amended complaint.”) And while no specific dates are given, the Court tends to
agree with Plaintiffs that there is no way they could know that information at this
time since the I-9 Forms at issue are in Defendants’ possession. Plaintiffs have
provided sufficient information to apprise all of the Defendants of the facts
supporting the § 1546 claims.11
D.
18 U.S.C. § 1962(d)
Under 18 U.S.C. § 1962(d), it is unlawful for any person to conspire to
violate any provision of § 1962(a), (b), or (c) of RICO. “A plaintiff can establish a
RICO conspiracy claim in one of two ways: (1) by showing that the defendant
agreed to the overall objective of the conspiracy; or (2) by showing that the
defendant agreed to commit two predicate acts.” Am. Dental, 605 F.3d at 1293
(internal citation and quotation omitted). “A plaintiff need not offer direct evidence
of a RICO agreement; the existence of a conspiracy ‘may be inferred from the
conduct of the participants.’” Id. (citation omitted).
Count I of the complaint contains the federal RICO conspiracy claim.
Plaintiffs detail the conspiracy scheme as follows:
72. The HR Clerk Defendants are responsible for
conducting the actual hiring and work authorization
verification of illegal aliens, which violates 18 U.S.C.
11
Plaintiffs similarly have stated a claim under § 1546 as relates to their Georgia RICO claims.
25
§1546(a), 18 U.S.C. §§(b)(1)-(3), 18 U.S.C. §§
1028(a)(7), (f), and 8 U.S.C. §1324(a)(3)(A), which are
made RICO predicate acts by 18 U.S.C. §§1961(1)(B)
and (F).
73. The Plant Manager Defendants are responsible
for instructing, supervising, and overseeing the HR
Clerk Defendants and the day-to-day hiring at the Plant,
which includes the hiring of illegal aliens in the manner
described above.
74. The HR Clerk Defendants report to the Plant
Manager Defendants about all hiring/staffing issues at
the Plant. The Plant Manager Defendants know that the
HR Clerk Defendants hire large numbers of illegal aliens
because that is the goal of the hiring policy. Additionally,
they are stationed at the Plant, frequently walk around
the Plant floor, and can observe the large number of
illegal, Spanish speaking workers. They also know
which employees to tip-off before any rumor of a DHS
enforcement action. The Plant Manager Defendants
have also been alerted to the illegal alien problem at the
Plant by the staff nurses. They approve of these hiring
policies and procedures and have not stopped such
practices.
75. The Plant Manager Defendants report directly to
Buster and the Corporate Manager Co-conspirators
about hiring practices and staffing issues at the Moultrie
Plant. Buster knows that the Moultrie Plant is staffed
with a large number of illegal aliens because that is the
goal of the hiring policy. Additionally, although she
works in the corporate office in Mississippi, she visits
the Plant on a periodic basis to observe its operations
and can see the large number of illegal, Spanish
speaking workers. She has also been alerted to the
illegal alien problem at the Plant by the staff nurses.
Buster sets and approves of these hiring policies and
procedures, and has not stopped such practices.
26
76. The Plant Manager Defendants also work closely
with Buster and the Corporate Manager Co-conspirators
to set depressed wage levels at the Moultrie Plant,
which resulted in Plaintiff Simpson earning a starting
wage of $8.50/hour in 2008 and an ending wage rate of
$11.40/hour in 2010, and Plaintiff Roberts earning a
starting wage of $8.50/hour in 2009 and an ending
wage rate of $11.55/hour in 2010. Members of the
putative class have reported earning similar wages.
Other than probationary wage increases for the first
year and cost of living wage increases, raises were not
given to putative class members.
77. Buster and the Plant Manager Defendants know
that illegal aliens are willing to work in the dangerous
and physically demanding conditions of a chicken
processing plant for these very low wages, such as the
wage rate received by the Plaintiffs. Buster and the
Plant Manager Defendants know that in order to attract
an entire workforce of legally authorized individuals,
they would need to raise the wages. But, because they
can hire a large number of illegal aliens instead, they
are able to keep wages lower than they otherwise would
be.
78. Since at least 2008 (and earlier), the Individual
Defendants have conspired to commit a pattern of
racketeering activity in repeated violation of at least
seven different RICO predicate acts, including: 18
U.S.C. §1546(a), 18 U.S.C. §1546(b)(1), 18 U.S.C.
§1546(b)(2), 18 U.S.C. §1546(b)(3), 18 U.S.C.
§1028(a)(7), 18 U.S.C. §1028(f), and 8 U.S.C.
§1324(a)(3)(A). As a result, hundreds of acts of
racketeering have been committed during this time. The
Scheme is open and ongoing, and it will not stop without
judicial intervention.
(Compl., ¶¶ 72-78).
27
Plaintiffs provide the following factual allegations to support the federal
RICO conspiracy claim outlined in Count I of the complaint:
16. Defendant Buster, along with other Corporate
Manager Co-conspirators, have conspired with the Plant
Manager Defendants and the HR Clerk Defendants to
approve and carry out the Scheme at Sanderson’s
Moultrie Plant, described more fully below. The Scheme
saves Sanderson millions of dollars in labor costs
because illegal aliens will work for extremely low wages,
will typically not complain about workplace conditions
and injuries, and because of their vulnerable situation,
will accede to managers’ demands to work harder than
American citizens and legal aliens.
19. The Defendants’ Scheme subverts the law
against knowingly hiring illegal aliens. This is done by
directing the HR Clerk Defendants to falsely attest that
illegal aliens have presented genuine work authorization
documents that relate to the employee(s) tendering
them, in order to facilitate their illegal employment. The
HR Clerk Defendants are directed by their superiors, the
Plant Manager Defendants, to accept these false
documents and make these false attestations. The Plant
Manager Defendants, are, in turn, directed by their
superiors in Sanderson’s corporate headquarters (in
Laurel, Mississippi), including Corporate Manager
Defendant Buster, to conduct the Plant’s hiring in this
manner so as to ensure that hundreds of illegal aliens
are hired and so that labor costs are kept very low. The
Scheme emanates from the highest level of the
Company down to the HR Clerks at the Moultrie Plant
who interview job applicants and carry out the hiring on
a daily basis.
20. At the Moultrie Plant, the Scheme is carried out
under the direction of Defendants Hauser, Black, and
Croft, with the assistance of Defendants Perales,
Fondon, [Carral-Gomez], and other unnamed HR Clerks
28
(who succeeded the HR Clerk Defendants after they
were terminated). The HR Clerk Defendants (and their
successors) are responsible for personally conducting
the application, interview, hiring, and work authorization
verification process for new hires, including the illegal
aliens, and for falsely attesting that these illegal aliens’
work authorization/identity documents are genuine and
relate to them.
21. The HR Clerk Defendants report directly to
Defendant Croft and the other Plant Manager
Defendants about the hiring process, including the
staffing needs and how the hiring process for hourlypaid workers is conducted. Defendant Croft was the HR
Manager at the Moultrie Plant until 2010. During this
time, she had authority over all hiring and firing
decisions there and was responsible for training,
supervising, and overseeing the HR Clerk’s hiring
practices. From time to time, she also personally
conducted the hiring as needed, including the hiring of
illegal aliens.
22. The HR Clerk Defendants also report to
Defendants Hauser and Black, who are part of the
management of the Plant. As the Complex Manager
and Deputy, respectively, they have final authority over
all Moultrie Plant decisions. They have approved of the
illegal hiring policies described above and below, and
ensure that the Plant conducts hiring in accordance with
the policies set forth by Buster and the other Corporate
Manager Co-conspirators.
23. Defendants Hauser, Black, and Croft report
directly to Buster and others in the corporate
headquarters in Laurel, Mississippi. Defendants Hauser,
Black, and Croft are responsible for assisting Buster
and the other Corporate Manager Co-conspirators in
setting hourly wages for the Class which are depressed
below what they would be absent the Scheme. Others
are part of the conspiracy to facilitate the Scheme at the
29
Moultrie Plant. Defendants Black, Hauser, and Croft
have directed all of the Moultrie Plant’s HR personnel,
including the HR Clerk Defendants, to conduct hiring in
the manner described below, which results in the
constant and systematic employment of illegal aliens.
24. The Scheme subverts the law against knowingly
hiring illegal aliens. The Scheme saves Sanderson
millions of dollars in labor costs and is thus undertaken
for financial advantage. If the Defendants were not
hiring large numbers of illegal aliens, Sanderson would
have to pay the Plaintiffs and the Class significantly
higher wages. For this reason, the Scheme increases
the profitability of Sanderson.
(Compl., ¶¶ 16, 19-24).
Plaintiffs then go on to allege that Buster and the Corporate Manager Coconspirators directed the Plant Manager Defendants to hire any person who
could produce an ID as required for an I-9 Form, regardless of whether the ID
looked genuine and regardless of whether the ID related to the person tendering
it. The Plant Manager Defendants then instructed the HR Clerk Defendants to
conduct hiring in this manner. (Compl., ¶ 25). Plaintiffs allege that nurses raised
concerns with the HR Clerk Defendants, Plant Manager Defendants, and
Defendant Buster about fake IDs. (Compl., ¶¶ 29-30, 32). The Plant Manager
Defendants and Defendant Buster are alleged to have “all responded in the same
general way: ‘It did not matter [that the IDs did not look real] as long as they
passed the I-9 process.’” (Compl., ¶ 32). Allegations are made about supervisors
preferring Mexican workers (Compl., ¶ 34), and about tip offs prior to a DHS raid
30
at the plant in December 2008. Plaintiffs allege that the Plant Manager
Defendants circulated a list of illegal alien workers to floor supervisors and an HR
Manager told the illegal workers not to come in the next day unless their
paperwork was in order. (Compl., ¶¶ 36-37). Defendants Fondon and Perales
were fired by Sanderson following the raid “in order to give the illusion that the
Company had a policy of following the law. But according to Perales, she was
fired for following the directions she was given by her superiors.” (Compl., ¶ 38).
Plaintiffs go on to allege in support of their conspiracy theory with regard to use
of the E-Verify program that, on information and belief, Buster instructs the Plant
Manager Defendants to complete I-9 Forms and utilize the E-Verify Program, but
not to check for, or to disregard signs of, identity theft. She instructs the Plant
Managers Defendants to hire workers if their documents pass the program,
regardless if it appears they are lying about their identity. Then the Plant
Manager Defendants instruct the HR Clerk Defendants to complete the I-9 Forms
and hire individuals despite information that the applicant is lying about his
identity. (Compl., ¶ 44-45).
As noted above, a RICO conspiracy can be established in one of two
ways: “(1) by showing that the defendant agreed to the overall objective of the
conspiracy; or (2) by showing that the defendant agreed to commit two predicate
31
acts.” Am. Dental, 605 F.3d at 1293. The existence of a conspiracy “may be
inferred from the conduct of the participants.” Id. (citation omitted).
Defendants argue that the conspiracy claim fails mainly because the
allegations do not meet the Iqbal standard as they are just conclusory
statements, bare assertions, and recitations of a conspiracy claim. According to
Defendants, Plaintiffs must do more than conclusorily allege that they “directed”
others to do things or that Defendants “approved” the scheme.
Assuming the veracity of the statements contained in the complaint, which
the Court must do at this point, along with the statements contained in Plaintiffs’
RICO interrogatories,12 the Court finds that Plaintiffs have made allegations
12
See Resp. to Interrog. 9:
Plaintiffs allege a three-tiered conspiracy to hire illegal aliens and depress wage rates at the Plant. Each
member in each tier of the conspiracy is responsible for carrying out certain functions in order to
accomplish the goal of the conspiracy (hiring large numbers of illegal aliens to depress wage rates). The
allegations in the complaint include the following:
At the Plant level (the lowest level), the HR Clerk Defendants (and their unnamed co-conspirator
successors) are the individuals who are hiring the illegal aliens, falsely attesting to their work
authorization, and accepting/using/obtaining/receiving their fake IDs (i.e., personally committing
the predicate acts). The HR Clerk Defendants report directly to the Plant Manager Defendants
(the middle tier) about all hiring and staffing issues.
In the middle tier, the Plant Manager Defendants instruct/supervise/oversee/train the HR Clerk
Defendants to conduct hiring in the manner described above. They approve of, and do not halt,
such hiring practices. The Plant Manager Defendants report directly to Buster (the
highest/corporate tier). The Plant Manager Defendants act as a liaison between the HR Clerk
Defendants (at the Plant level) and Buster (at the Corporate level).
At the highest tier (corporate level), Buster sets this hiring policy and instructs the Plant Manager
Defendants to implement it at the Plant. Buster also works with the Plant Manager Defendants to
set the Plant’s wage levels at depressed levels, knowing that illegal aliens will work for low wages
and knowing that in order to attract an entire workforce of legally authorized individuals, they
would need to raise the wages.
32
sufficient to allow the inference of the existence of a conspiracy and have thus
stated a claim under Rule 12(b)(6). The § 1962(d) conspiracy claim will not be
dismissed.13
E.
Proximate Cause
As noted at the beginning of this Order, to state a RICO claim pursuant to
18 U.S.C. § 1964, a plaintiff must allege three elements: (1) violation of § 1962;
(2) injury to business or property; and (3) that the violation caused the injury.
Avrigan, 932 F.2d at 1577 (citation omitted). The Court has already addressed
the alleged § 1962 violations. As for the second and third prongs, the Supreme
Court has interpreted this language as requiring 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, 461, 126
S.Ct. 1991, 164 L.Ed.2d 720 (2006).
Plaintiffs allege in their complaint that the illegal hiring scheme has injured
their business or property and the predicate acts are a “substantial and direct
The conspiracy has been ongoing since the Plant opened in 2005 and continues until the present.
The object of the conspiracy is to hire a large number of illegal aliens in order to keep wages
lower than they would otherwise be if the Plant was staffed with only legal workers.
(Doc. 1-1, pp. 12-13).
13
Plaintiffs’ Georgia state RICO conspiracy claim also survives.
33
factor in causing the depressed wages about which the Plaintiffs, and the other
legally authorized hourly workers at Sanderson, complain. No other party has
been damaged by the Scheme.” (Compl., ¶ 80).
Defendants argue that Plaintiffs have not sufficiently alleged a direct injury
or proximate cause. While the Court finds that Plaintiffs have alleged an injury to
their business interests, the Court agrees with Defendants that Plaintiffs have not
sufficiently alleged proximate cause. Civil RICO plaintiffs must prove that their
injuries were proximately caused by the alleged RICO violation. See Anza., 547
U.S. at 462 (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 has already determined that Plaintiffs have failed to state a
claim with respect to their § 1324(a)(3)(A) and §§ 1028(a)(7) and (f) claims.
Thus, for purposes of determining whether Plaintiffs have sufficiently alleged
proximate cause, the Court will only consider the remaining predicate acts under
§§ 1546(a) and (b)(1)-(3). This means Plaintiffs must sufficiently allege under
34
Twombly and Iqbal a link between the depressed wages and the § 1546
violations, in particular the I-9 Form false attestations.
Plaintiffs point to a string of cases, including Mohawk II, as conclusive
support that they have sufficiently alleged proximate cause. See Mendoza v.
Zirkle Fruit Co., 301 F.3d 1163, 1170-71 (9th Cir. 2002); Trollinger v. Tyson
Foods, Inc., 370 F.3d 602, 618-21 (6th Cir. 2004); Commercial Cleaning Serv.,
LLC v. Colin Serv. Sys., Inc., 271 F.3d 374 (2d Cir. 2001). But overlooked or
disregarded in all of Plaintiffs’ briefs is that all of these cases were pre-Twombly
and/or Iqbal. They were governed by a different, more lenient standard. Those
cases simply have little precedential value.
In order to survive a motion to dismiss, Plaintiffs must plead facts showing
or tending to show that Defendants’ violations of the false attestation predicate
and their acceptance of fake documents proximately caused depressed wages.
As it stands now, Plaintiffs just conclusorily state that these predicate acts “are a
substantial and direct factor in causing the depressed wages. . . .” (Compl., ¶¶
80, 85, 89, 94, 99, 104). That is not sufficient. Thus, even though the Court found
supra that Plaintiffs have alleged certain predicate act violations sufficient to
survive the motion to dismiss, Plaintiffs have not met the proximate cause
requirement. This causes the entire complaint to fail.
35
IV.
CONCLUSION
For the foregoing reasons, the Court grants Defendants’ Motion to Dismiss
(Doc. 41). However, Plaintiffs will be given the opportunity to file an amended
complaint to remedy the insufficiencies outlined in this Order. See Welch v.
Laney, 57 F.3d 1004, 1009 (11th Cir. 1995) (“Where a more carefully drafted
complaint might state a claim upon which relief could be granted, the district
court should allow the plaintiff [an opportunity] to amend the complaint rather
than dismiss it.”) Should Plaintiffs decide to file an amended complaint, they will
have until October 5, 2012 to file it.
SO ORDERED, this the 13th day of September, 2012.
s/ Hugh Lawson
HUGH LAWSON, SENIOR JUDGE
mbh
36
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