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Washington-As Congress wages a battle over illegal immigration and its impact on this nation, the Supreme Court is about to enter the fray in a context involving one of the law’s most powerful weapons-RICO. In 1996, Congress expanded the reach of RICO-the Racketeer Influenced and Corrupt Organizations Act-to include violations of federal immigration law. A decade later, the justices this month will consider whether a corporation and its outside recruiters, alleged to have engaged in the systematic recruiting and hiring of illegal workers, can constitute an “enterprise” under RICO. Mohawk Industries v. Williams, No. 05-465. The high court case stems from a class action against carpet giant Mohawk Industries Inc., most of whose more than 30,000 employees work in northwest Georgia. The suit was brought by Howard Foster of Chicago’s Johnson & Bell, who has pioneered the use of RICO on behalf of workers who lost jobs or had wages artificially depressed because of their employers’ alleged hiring and concealment of illegal immigrants. Mohawk, which is appealing its defeat of a motion to dismiss in the 11th U.S. Circuit Court of Appeals, is urging the justices to reject that circuit’s view of “enterprise,” a view that will transform the powerful RICO law into a “general civil liability statute for virtually all alleged corporate conspiracies and business disputes,” contends its high court counsel, Carter G. Phillips of Sidley Austin’s Washington office. The company has drawn support from the U.S. Chamber of Commerce, the National Association of Manufacturers and other business groups who believe that the case against Mohawk is another example of RICO run amok. “Even though the underlying issue is immigration, that’s not why we are in this case,” said Robin Conrad, senior vice president of the National Chamber Litigation Center. “We really do think [RICO] needs to be reined in and courts need to take a much more measured approach to what is subject to RICO and what isn’t.” But Foster, who will face off against Phillips, counters that Mohawk is asking for “judicial veto” of Congress’ addition of illegal hiring of undocumented aliens to the list of predicate crimes subject to RICO prosecution, and for treble damages, as well as for broad corporate immunity from RICO. The Bush administration and the National Association of Shareholder and Consumer Attorneys (NASCA) have entered the high court case on Foster’s side. A ‘total collapse’ At its broadest, Mohawk’s approach resurrects the argument that RICO should apply only to organized crime, an argument rejected several times by Congress and the court, said G. Robert Blakey of the University of Notre Dame Law School, known as the “father of RICO.” At its narrowest, Mohawk’s argument seeks RICO immunity for employers, he added. “There’s been a total collapse of public enforcement against employers,” said Blakey, who joined the NASCA brief. “The only little boy with his finger in the dike is private enforcement of RICO.” If the Supreme Court accepts Mohawk’s argument, he added, “It would frustrate exactly what Congress intended in 1996, and then there’d be no enforcement.” The focus of this disagreement is RICO Section 1961(4). RICO makes it a crime for any person employed by, or associated with, any enterprise engaged in interstate or foreign commerce to conduct or participate in the conduct of such enterprise’s affairs through a pattern of racketeering. Section 1961(4) states that a RICO enterprise “includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity[.]“ In the high court, Phillips argues first that the statutory definition of “enterprise” limits association-in-fact enterprises to groups of individuals, not corporations. “Section 1961(4) plainly states that an ‘association-in-fact’ enterprise consists of a ‘group of individuals,’ ” Phillips contends in his brief. “ Congress’ choice of the word ‘individuals,’ rather than the very different terms ‘persons’ or ‘entities,’ reflects an intent to limit the otherwise boundless scope of an ‘association-in-fact’ enterprise.” Interpreting “individuals” in this way, he said, serves the aim of the association-in-fact enterprise, which is to bring the control of gangs and organized crime families within RICO’s ambit. But even if corporations could be members of association-in-fact enterprises, he said, the alleged enterprise of Mohawk and its recruiters is contrary to the high court’s rulings on RICO’s scope. The justices have held that a RICO claim must plead an enterprise that is functionally distinct from the RICO defendant, he said. In this case, the alleged enterprise is created by Mohawk’s contracting for recruiting and employment services, he said, adding, “But, a separate ‘enterprise’ is not formed by a corporation’s ordinary contractual agreement with a third party for business services.” The 11th Circuit’s approach would “permit the pleading of a RICO claim anytime a corporation contracts for services or otherwise acts through an ‘agent’ rather than through its own employees,” he told the court. But Foster countered, “Mohawk here is asking the court to interpret RICO in a way that would make it extremely difficult to prosecute a corporation or partnership or any business entity, and it also wants to read corporations out of RICO all together.” The term “includes” in Section 1961(4) is illustrative, not exhaustive, he said. Mohawk’s view conflicts with the Supreme Court’s general recognition that RICO is to be interpreted broadly, he said, “in light of Congress’ self-consciously expansive language and overall approach.” The “any union” language in Section 1961(4) is broad enough to encompass an association comprised of corporations and others, added Foster. And requiring a “functionally distinct” enterprise, he said, would immunize corporations from association-in-fact liability because the corporation could always claim it was performing its own functions and activities. “It’s hard for me to see how it would be easy for a majority of justices to agree with Mohawk unless they wanted to do fairly radical surgery on the statute,” he said.

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