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Supreme Court Dismisses Civil Racketeering Case

Posted on: Monday, 5 June 2006, 21:00 CDT

WASHINGTON _ Having heard and considered a civil racketeering case against an employer that hired undocumented workers, the U.S. Supreme Court decided Monday that it shouldn't have heard the case in the first place.

In a one-paragraph decision, the court unanimously dismissed the case against Mohawk Industries Inc. as "improvidently granted" and returned it to the U.S. 11th Circuit Court of Appeals. The lower court was ordered to reconsider whether employees suing the Georgia-based carpet maker were actually harmed by the company's employment tactics.

Mohawk stands accused by several longtime employees of harboring and employing undocumented workers in an effort to hold down wages and benefits. The employees claim that Mohawk's relationship with its labor providers amounted to a "criminal enterprise" as envisioned under the Racketeering Influenced and Corrupt Organizations Act.

Although the case has yet to be tried, the novel use of RICO laws _ normally a weapon against corrupt unions, gangs and organized crime _ had been hailed and reviled as a potentially powerful deterrent to employers in states such as Texas that hire illegal labor. An estimated 14 percent of the nation's 11.5 million illegal immigrants reside in the Lone Star state.

Civil RICO actions, though difficult to prove, carry economic sanctions that include triple damages. At least one immigration-related RICO case has been settled by a fruit company in Washington.

In another racketeering case decided Monday, Anza v. Ideal Steel, the high court ruled that a steel production company could not sue one of its rivals for racketeering without showing that it had suffered a directly connected loss.

In so doing, the court remanded both the Anza and Mohawk RICO cases to lower courts, where the issue of directly connected damages could be considered.

In December, the court agreed to hear Mohawk's claim that corporate actions can't be branded as racketeering _ even if they are illegal _ because corporations are specifically exempt from anti-racketeering statutes. Oral arguments were heard in April. And although the court has decided to avoid that particular issue for the moment, the remand is a victory of sorts for Mohawk.

"We're pleased," said Juan Morillo, who represents Mohawk. "We're getting the proverbial second bite at the apple."

Howard Foster, who argued the case on behalf of the Mohawk employees, said he's pleased that the court decided to ignore the company's enterprise question. He said he is happy to return to the lower court where the employees have persistently prevailed.

"They (Mohawk) may be glad to have a second bite at the apple, but that doesn't mean there will be a different outcome," Foster said.

The case is Mohawk Industries v. Williams.

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(c) 2006, The Dallas Morning News.

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Source: The Dallas Morning News

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