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The 2nd U.S. Circuit Court of Appeals has reinstated a case between two cleaning companies over the alleged illegal hiring of undocumented workers. The decision could open the door for suits between private companies under the Racketeering Influenced and Corrupt Organizations statute (RICO). The class action was filed in Hartford, Conn., by Commercial Cleaning Services against competitor Colin Service Systems Inc. It alleges that Colin engaged in a pattern of the illegal hiring of undocumented workers to reduce its costs, enabling the company to underbid competing firms. Commercial Cleaning Services v. Colin Service Systems, No. 00-7571. “This makes it a lot easier for any suits alleging unfair competition under RICO to go forward,” said plaintiff’s lawyer Howard Foster of Johnson & Bell in Chicago. Foster said the ruling will permit him to bring similar suits against other industries including meat packing and agriculture. The decision reversed a district court ruling which found that Commercial had no standing to sue because it did not demonstrate proximate harm, a requirement established by the U.S. Supreme Court in Holmes v. Securities Investor Protection Corp. (1992). The appellate court did find that the complaint was deficient in one aspect and needed to be resubmitted. Judge Pierre Leval, who wrote the opinion, said Commercial failed to allege that Colin had actual knowledge the illegal aliens it hired were brought into the country in violation of the statute. Colin’s lawyers viewed that finding as a victory. “We’re pleased that the court agreed that the complaint was legally insufficient and should have been dismissed,” said Aaron Marcu, a partner at the New York office of Washington, D.C.’s Covington & Burling. “There is no basis to this case, and we are confident we will prevail when we return to the district court.” But whether or not Commercial proves its case, the ruling could represent a shift from the federal courts’ largely hostile attitude toward competitive-injury allegations under RICO. That makes the decision significant, according to G. Robert Blakey, a professor at Notre Dame Law School, who wrote the RICO laws in 1970. The court, in its decision, has “now told people who are competitively injured by the abuse of the immigration system that they have a remedy under RICO. Before, they didn’t have a remedy at all, which is why Congress put it in there.” Congress expanded the RICO law to include immigration-related crimes in 1996. The 2nd Circuit decision could end up supplementing the government’s efforts to catch employers who hire undocumented workers by permitting civil litigators to press their claims. “We will be acting as private prosecutors in the way RICO was intended and I think that is a desirable thing,” Foster said.

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