Bizzie Walters v. Todd McMahen

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BIZZIE WALTERS; ANNIE HODGE; 

ANNETTE BALDWIN; KATRENA

COOPER; BARBARA ALLEN, on

behalf of themselves and all those

similarly situated,

Plaintiffs-Appellants,

v.

TODD MCMAHEN; TOL DOZIER;

NANCY HOLLIS; ALBERTO ASYN;

RICHARD JAMISON; JIM HUNGATE;

AMPARO HERRERA; MARIA SALIZAR

GONZALEZ; JEFF BECKMAN; JERRY  No. 11-1796

LAYNE; DAVID CASTRO; ANGIE

WOOD; JULIO UNZUETA; ELANA

FERNANDEZ; JIM BOOTH; TERRY

ASHBY; JEANETTE COX; LESLIE COX;

RANDY BROWN; EFREM ANDREWS;

GILBERTO FERNANDO RIVERA;

BENNIE GRAY; CHARLIE CARPENTER;

BEL HOLDEN; ROB HEFLIN; GARY

MILLER; EMPERATRIZ PAOLA

BEATTY; SANDRA HERRERA;

GUSTAVO GUS PAEZ,

Defendants-Appellees,



2 WALTERS v. MCMAHEN

and 

ELANA ASYN,

Defendant, 

PERDUE FARMS INCORPORATED,

Movant.



Appeal from the United States District Court

for the District of Maryland, at Baltimore.

Richard D. Bennett, District Judge.

(1:11-cv-00751-RDB)

Argued: May 16, 2012

Decided: July 5, 2012

Before NIEMEYER and KEENAN, Circuit Judges, and

Margaret B. SEYMOUR, Chief United States District Judge

for the District of South Carolina, sitting by designation.

Affirmed by published opinion. Judge Keenan wrote the opin-

ion, in which Judge Niemeyer and Judge Seymour joined.

COUNSEL

ARGUED: Howard W. Foster, FOSTER PC, Chicago, Illi-

nois, for Appellants. Maurice Baskin, VENABLE, LLP,

Washington, D.C., for Appellees. ON BRIEF: Matthew A.

Galin, FOSTER PC, Chicago, Illinois, for Appellants. Brooks

R. Amiot, JACKSON LEWIS LLP, Baltimore, Maryland,

Allan S. Rubin, JACKSON LEWIS LLP, Southfield, Michi-

WALTERS v. MCMAHEN 3

gan, for Appellees Efrem Andrews, Terry Ashby, Alberto

Asyn, Jeff Beckman, Jim Booth, Randy Brown, Charles Car-

penter, Jeanette Cox, Leslie Cox, Tol Dozier, Helena Fernan-

dez, Bennie Gray, Rob Heflin, Amparo Herrera, Bel Holden,

Nancy Hollis, Jim Hungate, Richard Jamison, Jerry Layne,

Todd McMahen, Naaman Garrett Miller, Gualberto Rivera,

and Angie Wood; William J. Hughes, Jr., COOPER LEVEN-

SON, Atlantic City, New Jersey, David Daneman, BISHOP,

DANEMAN & REIFF, LLC, Baltimore, Maryland, for

Appellees David Castro, Maria Salizar Gonzalez, Sandra Her-

rera, and Julio Unzueta.

OPINION

BARBARA MILANO KEENAN, Circuit Judge:

In this case, a group of hourly-wage employees of Perdue

Farms, Inc. (Perdue), a major poultry processing company,

filed a civil conspiracy action under 18 U.S.C. § 1962(d) of

the Racketeer Influenced and Corrupt Organizations Act

(RICO), 18 U.S.C. § 1961 et seq. These hourly-wage employ-

ees (the plaintiffs) alleged that certain corporate managers of

Perdue, human resources staff, and plant managers conspired

to hire aliens not authorized to work in the United States in

an effort to reduce labor costs. The plaintiffs asserted that this

illegal hiring practice has caused the depression of wages paid

to all hourly-wage employees at certain Perdue facilities. The

district court granted the defendants’ motion to dismiss filed

under Federal Rule of Civil Procedure 12(b)(6), holding that

the plaintiffs failed to allege a civil conspiracy claim on which

relief could be granted. We affirm, and hold that the plaintiffs

failed to state a cause of action for civil conspiracy because

they did not allege sufficiently a violation of two RICO predi-

cate acts.

4 WALTERS v. MCMAHEN

I.

The plaintiffs are five hourly-wage employees of Perdue

who are authorized to work in the United States.1 They filed

the action on behalf of themselves and similarly-situated

employees, alleging that there is a conspiracy being con-

ducted within Perdue’s human resources department involv-

ing various levels of Perdue managers and human resources

clerks responsible for hiring hourly-wage employees. The

alleged object of this conspiracy is the receipt of increased

compensation from Perdue flowing to the employee conspira-

tors.

The plaintiffs asserted that the increased compensation

received by the employee conspirators results from a hiring

scheme designed to employ aliens brought into this country

illegally using fraudulent means (the hiring scheme). Accord-

ing to the plaintiffs, the hiring scheme operates in the follow-

ing fashion. At the lowest level of the conspiracy, the human

resources clerks responsible for hiring hourly-wage employ-

ees (the hiring clerks) knowingly process the employment

applications of unauthorized aliens who have been brought

into this country illegally.2 The hiring clerks knowingly

accept false identification documents and attest to their verac-

ity on Employment Eligibility Verification forms (I-9 forms)

required by the United States Department of Homeland Secur-

ity.

The plaintiffs further alleged that the managers of fourteen

Perdue facilities across the United States (the facility manag-

1

The named plaintiffs are Bizzie Walters, Annie Hodge, Annette Bal-

dwin, Katrena Cooper, and Barbara Allen.

2

The current and former hiring clerks named as defendants are Nancy

Hollis, Alberto Asyn, Elana Fernandez, Amparo Herrera, Maria Salizar

Gonzalez, Angie Wood, Julio Unzueta, Emperatiz "Paola" Beatty, Sandra

Herrera, Leslie Cox, Gustavo "Gus" Paez, and Gilberto "Fernando"

Rivera.

WALTERS v. MCMAHEN 5

ers) have instructed the hiring clerks to commit these acts.3

The facility managers, in turn, allegedly received their

instructions from certain Perdue corporate managers (corpo-

rate managers).4

Additionally, the plaintiffs asserted that the conspirators’

acts have resulted in the depression of wages of every hourly-

wage employee working for Perdue. According to the plain-

tiffs, this wage depression is both an effect of the hiring

scheme and the cause of the plaintiffs’ damages. As alleged

in the amended complaint, the conspirators benefit from the

hiring scheme by reducing labor costs,5 which in turn

increases Perdue’s profitability and results in higher compen-

sation for the conspirators.

The plaintiffs filed this action in federal district court in

Alabama in March 2010, alleging that the hiring clerks, the

facility managers, and the corporate managers (collectively,

the defendants) conspired to violate 18 U.S.C. § 1962(c).

According to the amended complaint, this conspiracy includes

the violation of two different statutes that qualify under RICO

as "predicate acts" identified in 18 U.S.C. § 1961(1).

First, the plaintiffs alleged that the hiring clerks individu-

ally violated 8 U.S.C. § 1324, which provides criminal penal-

ties for certain acts "relating to bringing in and harboring

certain aliens." 18 U.S.C. § 1961(1)(F). The particular subsec-

tion at issue, 8 U.S.C. § 1324(a)(3), establishes as a criminal

3

The current and former facility managers named as defendants are

Todd McMahen, Tol Dozier, Richard Jamison, Jim Hungate, Jeff Beck-

man, Jerry Layne, David Castro, Jim Booth, Terry Ashby, Jeanette Cox,

Randy Brown, Efrem Andrews, Charlie Carpenter, Bennie Gray, and Bel

Holden.

4

The corporate managers named as defendants are Rob Helfin, the

Senior Vice President of Human Resources for Perdue, and Gary Miller,

the regional human resource manager for the "Delmarva" region.

5

The authorized employees allege that "illegal immigrants will work for

extremely low wages."

6 WALTERS v. MCMAHEN

offense the act of knowingly hiring, during a 12-month

period, ten or more unauthorized aliens who have been

brought into the United States (the illegal hiring predicate).

The plaintiffs asserted that each of the hiring clerks "have per-

sonally hired hundreds of [such] workers (and more than ten

per year, each) with actual knowledge that the workers were

unauthorized for employment" and "had been brought into the

country" illegally.

Second, the amended complaint alleged that the hiring

clerks individually violated 18 U.S.C. § 1546, which estab-

lishes as a criminal offense certain acts "relating to fraud and

misuse of visas, permits, and other documents." 18 U.S.C.

§ 1961(1)(B). In particular, the plaintiffs asserted that the hir-

ing clerks violated 18 U.S.C. § 1546(b)(1)-(3), which prohib-

its the use of false identification documents, and fraudulent

attestations regarding the validity of such documents, in the

completion of government forms (the false attestation predi-

cate). According to the plaintiffs, the hiring clerks routinely

accept false identification documents provided by unautho-

rized aliens and, knowing those documents to be false, attest

to their validity on the I-9 forms.

After the plaintiffs filed their complaint, the defendants

moved to transfer the case to Maryland, where Perdue’s cor-

porate headquarters are located. The defendants also filed a

motion to dismiss the complaint under Rule 12(b)(6). The dis-

trict court in Alabama granted the defendants’ motion to

transfer.

Once the case was transferred to Maryland, the defendants

renewed their motion to dismiss. The district court granted the

motion, and dismissed the action with prejudice. The plain-

tiffs filed a timely appeal from the district court’s judgment.

WALTERS v. MCMAHEN 7

II.

A.

We review de novo a district court’s dismissal of an action

under Rule 12(b)(6). Robinson v. Am. Honda Motor Co., 551

F.3d 218, 222 (4th Cir. 2009). In examining the sufficiency of

a complaint, we are guided by the Supreme Court’s instruc-

tions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007),

and Ashcroft v. Iqbal, 556 U.S. 662 (2009). As this Court has

noted, those decisions require that complaints in civil actions

be alleged with greater specificity than previously was

required. Robertson v. Sea Pines Real Estate Cos., ___ F.3d

___, ___, 2012 U.S. App. LEXIS 9694, at *19 (4th Cir.

2012).

The Supreme Court’s decision in Twombly incorporated

"[t]wo working principles." Iqbal, 556 U.S. at 678. First,

although a court must accept as true all factual allegations

contained in a complaint, such deference is not accorded to

legal conclusions stated therein. Id. The mere recital of ele-

ments of a cause of action, supported only by conclusory

statements, is not sufficient to survive a motion made pursu-

ant to Rule 12(b)(6). Id.

Second, to survive such a motion, a complaint must state a

"plausible claim for relief." Id. The determination whether a

complaint adequately states a plausible claim is a "context-

specific task," id. at 679, in which the factual allegations of

the complaint must be examined to assess whether they are

sufficient "to raise a right to relief above the speculative

level," Twombly, 550 U.S. at 555.

To satisfy this standard, a plaintiff need not "forecast" evi-

dence sufficient to prove the elements of the claim. Robert-

son, ___ F.3d at ___, 2012 U.S. App. LEXIS 9694, at *28.

However, the complaint must allege sufficient facts to estab-

lish those elements. Id. Thus, while a plaintiff does not need

8 WALTERS v. MCMAHEN

to demonstrate in a complaint that the right to relief is "proba-

ble," the complaint must advance the plaintiff’s claim "across

the line from conceivable to plausible." Twombly, 550 U.S. at

570.

B.

The district court concluded that the plaintiffs’ amended

complaint contained several deficiencies that were fatal to the

continued prosecution of their action. The court first deter-

mined that the amended complaint failed to plead with suffi-

cient particularity the existence of a conspiracy among the

defendants. The court also held that the amended complaint

lacked sufficient facts supporting either alleged RICO predi-

cate act. Finally, the court concluded that the entire theory on

which the amended complaint was based was barred by the

intracorporate immunity doctrine. Because we conclude that

the plaintiffs failed to plead sufficient facts to establish the

elements of either RICO predicate act, we affirm the district

court’s judgment on that limited basis.

In examining the plaintiffs’ allegations concerning the two

RICO predicate acts, we first observe that the plaintiffs have

alleged that the defendants violated 18 U.S.C. § 1962(d) by

conspiring to violate 18 U.S.C. § 1962(c). Subsection (d) pro-

vides, in relevant part, that "[i]t shall be unlawful for any per-

son to conspire to violate any of the provisions of subsection

(a), (b), or (c) of this section." Subsection (c) provides, in

material part:

It shall be unlawful for any person employed by or

associated with any enterprise engaged in, or the

activities of which affect, interstate or foreign com-

merce, to conduct or participate, directly or indi-

rectly, in the conduct of such enterprise’s affairs

through a pattern of racketeering activity . . . .

18 U.S.C. § 1962(c).

WALTERS v. MCMAHEN 9

An act of racketeering under RICO commonly is referred

to as a "predicate act." Maiz v. Virani, 253 F.3d 641, 671

(11th Cir. 2001). A "pattern" of racketeering activity is shown

when a racketeer commits at least two distinct but related

predicate acts. See Sedima, S.P.R.L. v. Imrex Co., 473 U.S.

479, 496 n.14 (1985). While private litigants may recover for

racketeering injuries under 18 U.S.C. § 1964(c), their injuries

must "flow from the commission of the predicate acts." 473

U.S. at 497. And, in the present case, because the plaintiffs

allege only two predicate acts in support of their civil conspir-

acy claim, their failure to plead sufficient facts to establish the

elements of either predicate act would require that the

amended complaint be dismissed. See Crest Constr. II, Inc. v.

Doe, 660 F.3d 346, 358 (8th Cir. 2011).

1.

We turn to consider the first predicate act alleged by the

plaintiffs, namely, the knowing act of hiring multiple unau-

thorized aliens brought into this country illegally. The plain-

tiffs allege that each of the hiring clerks personally violated

the illegal hiring predicate, which provides in relevant part:

(A) Any person who, during any 12-month period,

knowingly hires for employment at least 10 individ-

uals with actual knowledge that the individuals are

aliens described in subparagraph (B) shall be fined

under title 18, United States Code, or imprisoned for

not more than 5 years, or both.

(B) An alien described in this subparagraph is an

alien who—

(i) is an unauthorized alien (as defined in

section [1324a(h)(3) of this title]), and

(ii) has been brought into the United States

in violation of this subsection.

10 WALTERS v. MCMAHEN

8 U.S.C. § 1324(a)(3).

This particular predicate act has been analyzed in similar

contexts by two of our sister circuits. See Edwards v. Prime,

Inc., 602 F.3d 1276 (11th Cir. 2010); Commercial Cleaning

Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374 (2d Cir.

2001). As our sister circuits have explained, the illegal hiring

predicate has two distinct mens rea elements, both of which

must be present in order for a violation to occur. First, a

defendant must hire ten or more aliens within a 12-month

period with actual knowledge that those aliens are not autho-

rized to work in the United States. Edwards, 602 F.3d at

1292-93. Second, the defendant must have actual knowledge

that the unauthorized aliens hired were brought into the coun-

try in violation of 8 U.S.C. § 1324(a). Id. at 1293; Commer-

cial Cleaning Servs., 271 F.3d at 387.

This second element is a crucial component of any viola-

tion of the illegal hiring predicate. It is this element, requiring

actual knowledge that the aliens were "brought into" this

country illegally, that distinguishes 8 U.S.C. § 1324(a)(3),

which contains the element and qualifies as a RICO predicate

act, from 8 U.S.C. § 1324a(a)(1), which does not contain the

element and is not a RICO predicate act but otherwise is sub-

stantially similar.6 See Nichols v. Mahoney, 608 F. Supp. 2d

526, 534-35 (S.D.N.Y. 2009) (comparing the two provisions).

Under 8 U.S.C. § 1324(a)(3), the RICO predicate act, the hir-

ing of ten or more unauthorized aliens with knowledge that

they were brought into this country illegally, exposes the

employer to the imposition of fines or to a term of imprison-

ment of up to five years, or both. Edwards, 602 F.3d at 1293.

6

Section 1324a(a)(1) provides, in relevant part:

In general. It is unlawful for a person or other entity—

(A) to hire, or to recruit or refer for a fee, for employment in the

United States an alien knowing the alien is an unauthorized alien

(as defined in subsection (h)(3) of this section) with respect to

such employment . . . .

WALTERS v. MCMAHEN 11

In contrast, under 8 U.S.C. § 1324a(a)(1), the act of hiring

unauthorized aliens without knowledge that they were brought

into this country illegally limits the employer’s exposure to

the imposition of civil penalties.7 Id.

The district court determined that the plaintiffs’ allegations

with respect to the illegal hiring predicate were deficient in

two respects. The district court stated that the plaintiffs: 1)

failed to identify any employee actually known to be an unau-

thorized alien; and 2) made only conclusory allegations

regarding the manner in which the unauthorized aliens were

brought into the United States. Although we disagree with the

district court’s determination that a plaintiff must identify a

particular unauthorized alien worker to satisfy the pleading

standards established in Twombly and Iqbal, we nevertheless

agree with the court’s ultimate holding that the plaintiffs

failed to allege sufficient facts to state a plausible claim that

the defendants violated the illegal hiring predicate.

Initially, as the plaintiffs observe, the purported name of an

unauthorized alien hired by Perdue likely would emerge only

in the form of a pseudonym used by the alien on the I-9 form.

The inclusion of such a pseudonym in the complaint would be

of minimal value with respect to increasing the plausibility of

the plaintiffs’ claim. Moreover, the mission of the alleged

conspiracy is the defendants’ procurement of the unauthorized

aliens brought into the country and hiring them to work for

Perdue. Thus, because the individual aliens are not alleged to

be conspirators but are merely subjects of the hiring scheme,

they need not be described with the same detail as the con-

spirators, at least some of whom must be identified with a

degree of particularity. See Aetna Cas. Sur. Co. v. P & B

Autobody, 43 F.3d 1546, 1562 (1st Cir. 1994) (noting that

each defendant must agree with one or more co-conspirators).

7

While a pattern of violations of 8 U.S.C. § 1324a(a)(1) could expose

an employer to a criminal sentence of up to six months’ imprisonment,

even repeated violations of that statute would not qualify as a RICO predi-

cate act. Edwards, 602 F.3d at 1293.

12 WALTERS v. MCMAHEN

Instead, the fatal deficiency of the illegal hiring predicate

allegations is the failure to provide sufficient factual support

concerning the unauthorized aliens’ entry into the United

States. As stated above, the illegal hiring predicate requires

that the violator employ at least ten aliens within a 12-month

period "with actual knowledge" that each employee is "an

unauthorized alien" and that each "has been brought into the

United States." 8 U.S.C. § 1324(a)(3).

The amended complaint contains only two allegations that

bear on the transportation of aliens into the United States.

Paragraph 54 of the amended complaint provides, in relevant

part, that "since 2006, [the hiring clerk defendants] have per-

sonally hired hundreds of workers (and more than 10 per year,

each) with actual knowledge that the workers . . . had been

brought into the country with the assistance of others on their

illicit journey across the U.S.-Mexico border . . . ." Also,

paragraph 108 provides, in relevant part, that "on information

and belief, Defendant Paez [a hiring clerk] is also responsible

for directly working with ‘coyotes’ and ‘runners’ to obtain

employment at Perdue for the illegal immigrants when they

arrive in the local community. For these services, Paez

charges the local immigrants a fee."

These paragraphs fail to establish the elements of a viola-

tion of the illegal hiring predicate. Paragraph 54 merely

recasts the language of 8 U.S.C. § 1324(a)(3), and provides 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."

Likewise, paragraph 108, which alleges that a single hiring

clerk at one facility, on occasion, has worked with "coyotes"

and "runners" to obtain unauthorized aliens for employment

at Perdue, does not render plausible the contention that this

clerk knowingly hired ten or more unauthorized aliens within

one year knowing that they each received assistance crossing

the border between the United States and Mexico. Moreover,

WALTERS v. MCMAHEN 13

this allegation in paragraph 108 does not support a conclusion

that a widespread conspiracy is being conducted to hire unau-

thorized aliens at fourteen Perdue facilities.8 Thus, the plain-

tiffs’ allegations regarding the illegal hiring predicate fail to

advance their claim "across the line from conceivable to plau-

sible." Twombly, 550 U.S. at 570.

We note that, prior to Twombly and Iqbal, the Ninth Circuit

made a contrary holding with respect to similar language in

a complaint involving the illegal hiring predicate. In Mendoza

v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002), the court

held that an allegation the defendant company knew that

unauthorized aliens hired were smuggled into the United

States sufficiently supported the illegal hiring predicate for

purposes of surviving a motion under Rule 12(b)(6). Id. at

1168. However, at the time Mendoza was decided, the dis-

missal of a complaint was appropriate only if it was "clear

that no relief could be granted under any set of facts that

could be proved consistent with the allegations." Mendoza,

301 F.3d at 1167 (quoting Swierkiewicz v. Sorema N.A., 534

U.S. 506, 514 (2002)). As the decisions in Twombly and Iqbal

have made clear, the standard employed in Mendoza no lon-

ger is applicable.

Additionally, we disagree with the plaintiffs’ contention

that the use of "judicial experience and common sense," as

authorized by Iqbal, 556 U.S. at 679, would lead to a conclu-

sion that the aliens were "brought into the United States,"

within the meaning of 8 U.S.C. § 1324(a)(3)(B)(ii), because

it is not plausible that they crossed over the border from Mex-

ico and walked to Maryland or to any other Perdue location

on their own. The plaintiffs conflate the rendering of any

assistance to aliens during their course of travel with the act

8

The plaintiffs also refer us to their allegations involving illegal aliens

obtaining false identification documents at facilities in the United States.

However, these allegations have no bearing on the issue whether and in

what manner the illegal aliens were "brought into the United States."

14 WALTERS v. MCMAHEN

of bringing unauthorized alien workers into the United States.

However, because the illegal hiring predicate requires that

unauthorized alien workers be "brought into the United

States," a violation requires that a party other than the aliens

actively assist with the alien workers’ entry into the United

States. Once these alien workers have arrived in the United

States, any assistance that they receive from other parties is

immaterial to the illegal hiring predicate. Therefore, while

"judicial experience and common sense" may suggest that

unauthorized aliens arriving in Maryland or other states did

not travel there entirely by foot, it is not so obvious that such

aliens allegedly employed at Perdue’s facilities necessarily

were "brought into the United States" by others. Accordingly,

we conclude that the plaintiffs have not alleged sufficiently a

violation of the illegal hiring predicate.

2.

The second RICO predicate act identified in the plaintiffs’

amended complaint involves the fraudulent use and false

attestation of documents. The particular provision that the

plaintiffs assert was violated by the hiring clerks, 18 U.S.C.

§ 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,

WALTERS v. MCMAHEN 15

shall be fined under this title, imprisoned not more

than 5 years, or both.

18 U.S.C. § 1546(b).

The district court concluded that the allegations concerning

the false attestation predicate were insufficient for two rea-

sons. First, the district court focused on the plaintiffs’ failure

to identify any single unauthorized employee. Second, the dis-

trict court held that the plaintiffs failed to state sufficient facts

to support their claims regarding this predicate act.

For the reasons we already have stated, we conclude that

the plaintiffs’ failure to identify any of the unauthorized aliens

involved is not fatal to their amended complaint. Additionally,

we observe that the plaintiffs have provided a significantly

greater level of detail regarding the false attestation predicate

than they did regarding the illegal hiring predicate.9 However,

because the plaintiffs have not alleged facts establishing that

they suffered an injury proximately caused by the hiring

clerks’ violation of the false attestation predicate, their claim

also fails with regard to this predicate act.

As the Supreme Court noted in Beck v. Prupis, we are

guided by the "well-established common law of civil conspir-

acy" when determining whether a plaintiff has been "injured"

for purposes of 18 U.S.C. § 1962(c), based on a conspiracy

alleged under 18 U.S.C. § 1962(d). Beck, 529 U.S. 494, 500

(2000). While a "mere violation" of 18 U.S.C. § 1962(d) is all

that is required to establish criminal liability, a plaintiff may

recover in an action for civil conspiracy only upon establish-

9

The parties dispute whether Rule 8 or Rule 9 of the Federal Rules of

Civil Procedure provides the appropriate standard for pleading a violation

of the false attestation predicate. Because we conclude that this RICO

predicate act does not qualify as the proximate cause of the plaintiffs’ inju-

ries, we need not address the issue which Rule establishes the appropriate

pleading standard.

16 WALTERS v. MCMAHEN

ing injury caused by an act that is itself tortious. Id. at 501-02

& 501 n.6. Thus, in the present case, the plaintiffs were

required to allege facts establishing that a violation of the

false attestation predicate proximately caused the plaintiffs’

injury. See Anza v. Ideal Steel Supply Corp., 547 U.S. 451,

453 (2006) (citing Holmes v. Sec. Investor Prot. Corp., 503

U.S. 258, 268 (1992) for proposition that plaintiff in action

invoking 18 U.S.C. § 1962(c) must sufficiently allege that the

RICO violation was the proximate cause of plaintiff’s injury).

The "central question" therefore is whether the plaintiffs’

injuries were the direct result of the alleged predicate act. Id.

at 461. The Supreme Court has identified three reasons sup-

porting this requirement of a direct link between an alleged

predicate act and a plaintiff’s injury. These reasons are: (1)

the factual difficulty of measuring indirect damages and dis-

tinguishing among distinct independent causal factors; (2) the

complexity of apportioning damages among plaintiffs to

remove the risk of multiple recoveries; and (3) the vindication

of the law through compensation of directly-injured victims.

See Holmes, 503 U.S. at 269-70 (1992). Applying the proxi-

mate causation standard used in Anza and Holmes, we con-

clude that the hiring clerks’ acts did not cause the injury

alleged by the plaintiffs. The injury alleged in the amended

complaint is the depression of wages suffered by the plaintiffs

as the result of Perdue’s employment of unauthorized aliens.

Notably, however, the wage depression alleged by the plain-

tiffs is not directly linked to any violation of the false attesta-

tion predicate.

The first rationale identified in Holmes supporting the

requirement of proximate causation illustrates the central defi-

ciency of the plaintiffs’ claim. Here, the factual challenges

involved in attempting to measure indirect damages and to

distinguish among distinct independent causal factors would

be insurmountable.

The compensable injury resulting from a violation of 18

U.S.C. § 1962(c) necessarily is the harm caused by the predi-

WALTERS v. MCMAHEN 17

cate acts, which must be related sufficiently to each other that

they constitute a pattern. Anza, 547 U.S. at 457. 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. Hemi Group, LLC v. City of New York, ___ U.S. ___,

___, 130 S. Ct. 983, 989 (2010).

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 ulti-

mately may 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 com-

pensation.

This deficiency in the plaintiffs’ claim becomes obvious by

removing the false attestation acts from the plaintiffs’ narra-

tive. 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 gov-

ernment, 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 viola-

tion cannot be a proximate cause of the plaintiffs’ injury,

because there is no direct relationship between the injury

asserted and the predicate act alleged.10 Hemi Group, ___ U.S.

10

We disagree with the plaintiffs’ additional argument that, even if the

amended complaint fails to state a claim for conspiracy under 18 U.S.C.

§ 1962(d) to violate 18 U.S.C. § 1962(c), the amended complaint should

be construed as alleging claims against each defendant for individual vio-

18 WALTERS v. MCMAHEN

at ___, 130 S. Ct. at 989. For this reason, we hold that the

plaintiffs’ allegations regarding the false attestation predicate

are legally insufficient.

III.

In conclusion, we hold that the plaintiffs have not alleged

a plausible violation of either RICO predicate act. Thus, as a

matter of law, the plaintiffs have failed to establish a claim

supporting their allegation under 18 U.S.C. § 1962(d) of a

conspiracy to violate 18 U.S.C. § 1962(c). Accordingly, we

affirm the district court’s judgment dismissing the plaintiffs’

complaint.11

AFFIRMED

lations of 18 U.S.C. § 1962(c). There are two distinct problems with such

an argument. First, the plaintiffs have alleged a single conspiracy count,

and they have not cited any authority to suggest that we can rewrite their

complaint at this stage. Moreover, we decline to do so. Second, as

described in detail above, the plaintiffs have failed to plead sufficient vio-

lations of either RICO predicate under 18 U.S.C. § 1962(c), rendering

their request moot.

11

Because we conclude that the plaintiffs have failed to plead ade-

quately a cause of action under 18 U.S.C. § 1962(d), we need not address

the separate issue whether the intracorporate immunity doctrine bars their

cause of action.