Petition for Writ of Certiorari — Baker v. IBP, Inc.

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Supreme Court, U.S.

| rtLe O

_ 04 149 JUL 27 2004

OFFICE OF THE CLERR

In The

Supreme Court of the Anited States

DEBORAH BAKER AND RICHARD ENYEART,

ON BEHALF OF THEMSELVES AND

ALL OTHERS SIMILARLY SITUATED,

Petitioners,

Vv.

IBP, INC.,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

G. ROBERT BLAKEY

Counsel of Record

NOTRE DAME LAW SCHOOL

Notre Dame, IN 46656-0780

(574) 631-5717

HOWARD W. FOSTER

JOHNSON & BELL, LTD.

55 East Monroe Street

Suite 4100

Chicago, IL 60603

(312) 372-0770

Attorneys for Petitioners

——----— —

——

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

Does Section 159 of the National Labor Relations Act

(29 U.S.C. § 159) that provides that statutory “repre-

sentatives ... shall be the exclusive representatives

... for the purpose of collective bargaining in respect

to ... conditions of employment...” preclude former

and present employees from suing for damages to

their property (albeit measured by lost wages, though

not a matter of collective bargaining), under RICO, a

federal statute not part of the labor laws?

Does the presence of divergent goals among members

of an association-in-fact “enterprise” under RICO (18

U.S.C. § 1961(4)), where the enterprise itself is bound

by a common goal (or “purpose”), that is, the commis-

sion of a pattern of racketeering activity, fracture the

required unity of the association-in-fact “enterprise”?

PARTIES TO THE PROCEEDINGS

PETITIONERS

Deborah Baker and Richard Enyeart, on behalf of them-

selves and all others similarly situated

RESPONDENTS

IBP, Inc.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ......0............cccccccecsseseseeee i

PARTIES TO THE PROCEEDING............................. il

TABLE OF AUTHORITIBG....................cssssssscscssesesees v

IE MINI ii csi sasassuasariacesedavavvanesarceveaverercsae 1

a ccc sony cans cabdadnsixdsesasaseue 1

PRUE PE MPUEE BOI VIIOIIN oociccccsscccccncssccecscsssscsencnecace 1

STATEMENT OF THE CASE ................cccccccccccceesseee 2

REASONS FOR GRANTING THE WRIT.................. 5

iil

THIS COURT SHOULD RESOLVE THE

SPLIT BETWEEN THE SEVENTH AND THE

SIXTH CIRCUITS ON THE RIGHT OF

WORKERS TO SUE EMPLOYERS FOR

MATTERS OUTSIDE OF THE COLLECTIVE

BARGAINING PROCESS UNDER STAT-

UTES THAT ARE INDEPENDENT OF THE

LABOR LAWS WITHOUT THE INTERVEN-

I chiccesesesdksnansscanannsnncesiasesasanes

TABLE OF CONTENTS -— Continued

Page

II. THIS COURT SHOULD RESOLVE THE

SPLITS BETWEEN THE SEVENTH CIR-

CUIT THAT LIMITS ENTERPRISE PLEAD-

ING TO THOSE NOT INVOLVING

DIVERGENT GOALS AND (1) THE SEC-

OND CIRCUIT THAT RECOGNIZED A

SIMILAR ENTERPRISE PLEADING UN-

DER AN ILLEGAL IMMIGRATION SCE-

NARIO, (2) THE SECOND CIRCUIT (AND

OTHERS) THAT RECOGNIZE ENTER-

PRISE PLEADINGS IN THE ORGANIZED

CRIME AREA, (3) OTHER CIRCUITS THAT

UPHOLD ENTERPRISE PLEADINGS THAT

REFLECT DIVERGENT GOALS, AND (4)

THE FIRST, SECOND, AND NINTH CIR-

CUITS THAT RECOGNIZE ENTERPRISE

PLEADINGS THAT INCLUDE FRAUD

VICTIMS OF A RICO VIOLATION ................ 8

III. SINCE ILLEGAL IMMIGRATION IMPOSES

POLITICAL, ECONOMIC AND _ TAX,

HEALTH, WELFARE, AND EDUCATION,

CORRECTIONS, AND LAW ENFORCEMENT

COSTS ON THE NATION, THIS COURT

SHOULD REVIEW THIS PETITION NOW

BECAUSE OF ITS NATIONAL IMPOR-

TANCE AND TURN BACK EFFORTS TO

UNDERMINE THE PRIVATE ENFORCE-

MENT MECHANISM ENERGIZED BY CON-

GRESS IN 1996 THAT IS A NECESSARY

SUPPLEMENT TO LAW ENFORCEMENT .... 18

CO Re sss tndsntunss nisareansannsabneneneaeraniensubniaiinntnan 30

TABLE OF AUTHORITIES

Page

CASES:

Aetna Casualty & Surety Co. v. P. & G. Auto Body,

GS FOE TGR (ROE Gar, TOBA) a wea siievscccecenscenerssccediopornanveness 17

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985)........... 7

Agency Holding Corp. v. Malley-Duff & Assc., 483

Ss BE ED sisticinschipihachachodncsiadh halehichnaithcsaabaichinaabiennk 28

American Society of Mechanical Engineers, Inc.,

Se a GE I vik sear inheinnvinsanstansinrvicianinnrnaanitnceias 28

Appalachian Coals, Inc. v. United States, 288 U.S.

NE Une sinhstanondiestielsuehiandiheneistes onmneliniadeldabtatidadassiimumiedeiats 27

Bachman v. Bear Stearns & Co., Inc., 178 F.3d 930

RR ORR Rete tee CNET A Ml 13

Baker v. IBP, Inc. 357 F.3d 685 (7th Cir. 2004).......... passim

Blue Shield of VA. v. McCready, 457 U.S. 465 (1982)....... 28

Branch v. Tunnell, 937 F.2d 1382 (9th Cir. 1991)............... 5

Bucklew v. Hawkins, Ash, Baptie & Co., 329 F.3d

ey CO A I iaeasihiiil icici ota ldnicadncascteniccossiaindadeinsas 9,13

Commercial Cleaning Services, L.L.C., v. Colin

Services Systems, Inc., 271 F.3d 374 (2d Cir.

i ee a AN RNA REN ERA a aE Lee ee 4,8,9

DeCanas v. Bica, 424 U.S. 351 (1976)... eececeseceeeeees 22

F-C.C. v. NextWave Personal Communications, Inc.,

Pe Se A SI kainic chstaidiiensbipncicnactmapitickieduaatimedaderaiaadceseis 6

Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir.

oe hak Fe A ot I ET et ORT ee 9,13

H.J., Inc. v. Northwestern Bell Telephone Co., 492

PN, Se TD iailaridienidi Moiee 2, 4, 28, 29

TABLE OF AUTHORITIES — Continued

Page

J. Truett Payne & Co. v. Chrysler Motor Corp., 451

Bs HI IED sa vaincccacnntnssassaidamsacbeadansenamaneeasenads 22

Jacobson v. Cooper, 882 F.2d 717 (2d Cir. 1989)............... 17

Jund v. Town of Hempstead, 941 F.2d 1271 (2d Cir.

ELF ss. seh anh acisecalaeecnbbeecih asia eiannmall eae enann aa aaa ciara 3

Mendoza v. Zirkle Fruit Co., 310 F.3d 1163 (9th Cir.

SEIIEAD ssicknivundcakiiexiasiiceuncnasbie ind teesaimicns pean ame aaaacdsiaetiaes 18

National Organization of Women v. Scheidler, 510

U.S. 249 (1994).............. Rssnhshanthidemisaabonihdspaammiatiguncnsadeaivad 2

Northern Sec. Co. v. United States, 193 U.S. 197

UII? ciisshcexaskdanbenadadesiclaccndighnaleloutanmumbenimamnamseanmiiecaiaaaice 11

Office & Pro’f Employees Int'l Union, Local 2 v.

BUC, GGR FB GS CAC. Cie, BGS vnssseccnscccsinsescsecscscscsses 6

Pfizer, Inc. v. India, 434 U.S. 308 (1978)..............eeeeeeeeeee 28

Plyler v. Doe, 457 U.S. 202 (1962)............sssccssssesessesssssseees 24

Pross v. Katz, 784 F.2d 455 (2d Cir. 1986)...................cceeeee 5

Reves v. Ernst & Young, 507 U.S. 170 (1993) ...............0... 11

Rotella v. Wood, 528 U.S. 549 (2000) .......... cece eee 28

Russello v. United States, 464 U.S. 16 (1983)...............0... 11

Salinas v. United States, 522 U.S. 52 (1997).............0.0... 13

Scheuer v. Rhodes, 416 U.S. 232 (1974)... eee eeeeeeeees 2

Sedima, S.P.R.L. v. Imrex, Co., 473 U.S. 479 (79%) ........ 28

Shearson/American Express, Inc. v. McMahon, 482

Fk See 6 REED vskschecrscsseccnersaensineenetane oneal 11

Swierkiewicz v. Sorema NA, 534 U.S. 506 (2002)............... 5

2, VA. UW. FEE, 457 UG. UGS CUP TGB) ac sssessessasacssrsssesnsnenansonine 29

vii

TABLE OF AUTHORITIES -— Continued

Page

Techt v. Hughes, 229 N.Y. 222, 128 N.E. 185 (19......... 29

Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th

PRI TUPI chies:sscnshcennisbudeddiamisiciunsiaaisiceinbestc ates? 4, 5,6, 7

United Energy Owners Committee., Inc. v. United

States Energy Management Systems, 837 F.2d

ES ieneccctnccscsvicsiandinrdasaireneesbancvanttauacitouecad. 17

United States v. Alonso, 740 F.2d 862 (11th Cir.

PITT ihn cane inaiaiabaannbiaiganmasaniamabbilitie dcaiamtine eats 16

United States v. Amato, 15 F.3d 230 (2d Cir. 1994).......... 12

United States v. Angelilli, 660 F.2d 23 (2d Cir. 1981)....... 16

United States v. Barone, 114 F.3d 1284 (1st Cir.

SORA Net RNR en OMe IS EE Lee 13

United States v. Beasley, 72 F.3d 1518 (11th Cir.

BPE whisteindcadinaennddntacaniumiaddilimeusidbesttonac ke 15, 16

United States v. Brooklier, 685 F.2d 1208 (9th Cir.

4 EIRENE PERN LE A RE TNS COON AAT GROSSO 14

United States v. Cauble, 706 F.2d 1322 (5th Cir.

_____ ERR ee Ore ere MeN RT SOT aa er 27

United States v. Coonan, 938 F.2d 1553 (2d Cir.

I ii hcriaehs aise ca eciasaan eee eiahec Salat! | Aecnunenioend 12

United States v. Darden, 70 F.3d 1507 (8th Cir.

SUITED ip dedialc ie clots sada hcen Git deh aeadgbibcanion es eebnileccasccousouduadite 15

United States v. Elliot, 571 F.2d 880 (5th Cir. 1978).... 14, 15

United States v. Griffin, 660 F.2d 996 (4th Cir.

IRUPIITTAD iiscsiiph sala lca Sibesieg alah aptonpntalincbeasdaceiiceansiaaiaiteeatanse sana 11, 16

United States v. Norton, 867 F.2d 1354 (11th Cir.

PE icehch tiaeksibbabiiahbinledicehaedbbaiedh aed arieaalase aes aaa Rea teninsinas 16

Vill

TABLE OF AUTHORITIES — Continued

Page

United States v. Riccobene, 709 F.2d 214 (8rd Cir.

PID iiiacisheeclsidcksccioisntihcsinlbseicasesblasahduiaiaiatsbicsaniselidabaleadaseaninaes 13

United States v. Salerno, 868 F.2d 524 (2d Cir.

SD laiiissteyihsviniesihcclaiatsiecatacnmbaehspaciaetaus eae olkabenitcandincsbiooaiarionias 13

United States v. Tocco, 306 F.3d 279 (6th Cir. 2002) ........ 13

United States v. Turkette, 452 U.S. 576 (1981)................. 29

Warner v. Alexander Grant & Co., 828 F.2d 1530

a MIND cists eis sasnaveinnvaxokaancddacicdionatadiaioreneureiaties 5

STATUTES:

TITLE 6, UNITED STATES CODE

i Saisie ds iptabnecdic abana Ataheoneabnibbeaakdnnakeusadebeaieoadabialane 26

TITLE 8, UNITED STATES CODE

I Sak ducicehstincadineshisuuwabetablakiceninnnssehieria danbnenaiisilandadniaiaiores 3

IN ar sicscntsxsicoiciiticeancaieleceeseneeiniestscanemtutemabieiodannes 3

TITLE 18, UNITED STATES CODE

Rn I Picshsicksspehcsiickeduiereieihaeicntauhinsdabaaaiacetadnaenaeeiaa 3

ee iisiidinssenissnissdeicaneieaenaannemmne 16

OS niuisrilininssiiscsicaeonrenatandead canteen sna 2

DF vsriinkccss crtsseiceseeicrerneiaiabaaesaman 2,17

SS vik cnictscssscrnssinciectisindannia sateen ean 2

TITLE 28, UNITED STATES CODE

GS Fh osissckisdcctscteantsrncion mine 1

TABLE OF AUTHORITIES -— Continued

Page

TITLE 29, UNITED STATES CODE

I STC aietiekddbnseoneianonecnuncasiiainind wichtareseusatenschecanteesiteteba becasue 1,4

i SD is enpiieiniceiiadtadanaetinnnepiobiotihidessclihediieteesteianiaddamiaascuiatinnieh 6

OTHER AUTHORITIES:

Edward Gross & Amitai Etzoini, ORGANIZATIONS IN

SUE SO I tae dsc slat cca aaaaagdesaierdaieaeaed tien 10

Dudley L. Poston, et al., Center for Immigration

Studies, Remaking the Political Landscape: The

Impact of Legal and Illegal Immigration on Con-

gressional Reapportionment 3 (2003)..............cccccceceeeeee 20

Steven A. Camarota, Center for Immigration

Studies, The Impact of Immigration on American

Workers: Testimony Prepared for the House Judi-

ciary Committee Subcommittee on Immigration

EE St 0 IE ehh a iaittinincesseiccteneussacstntactiartecsccserce 21

George J. Borjas, Increasing the Supply of Labor

Through Immigration: Measuring the Impact on

Native-born Workers 2 (2004)..........cccccccccccseseeccceeeee 21, 22

NATIONAL RESEARCH COUNCIL, THE NEW AMERI-

CANS: ECONOMIC, DEMOGRAPHIC, AND FISCAL EF-

FECTS OF IMMIGRATION 7 (James P. Smith &

Barry Edmonston, eds., 1997).............ccccccsssssssscssessseeees 21

Donald L. Huddle, Immigration and Jobs: The

Process of Displacement (1995) ...........cccccccccsssseeeeees 22, 23

Michael E. Fix & Jeffrey S. Passel U.S. ImmicRa-

TION: TRENDS AND IMPLICATIONS FOR SCHOOLS 16

NAAR oi EE NS erm TS RON Ae ee 24

TABLE OF AUTHORITIES — Continued

Page

Rebecca L. Clark et al., FISCAL IMPACTS OF UN.-

DOCUMENTED ALIENS: SELECTED ESTIMATES FOR

BRVEN STATES B-13 (1 GOS) .....ccccrccsccccsscccccccscssecscsccsscesess 25

Rebecca L. Clark & Scott A. Anderson, ILLEGAL

ALIENS IN FEDERAL, STATE AND LOCAL CRIMINAL

JUSTICE SYSTEMS IT (2000)...............cccsssosscssscsssssseessees 25

Nina Bernstein, A Longer Wait for Citizenship and

Cee TROTEOE, TE. 7. TED GOGDE) nsacnrerccccnssancsrersecenecsianasansnon 26

Carl Kaysen et al., ANTITRUST POLICY 17 (1959).............. 29

Eo PG NOE SRR 0 hOB may 0 St PO EASA ALIN Be Nat ADE 8 st Balt ms Fo

PETITION FOR A WRIT OF CERTIORARI

Petitioners respectfully request that a Writ of Certio-

rari issue to review the judgment of the United States

Court of Appeals for the Seventh Circuit entered on April

30, 2004.

OPINIONS BELOW

The decision of the United States District Court for

the Central District of Illinois is reported at 2002 WL

31696701 (Mihm, J.) and reprinted in the Appendix to this

Petition.

The decision of the United States Court of Appeals for

the Seventh Circuit is reported at 357 F.3d 685 (Easter-

brook, J.) and reprinted in the Appendix to this Petition.

The order of the United States Court of Appeals for

the Seventh Circuit denying the petition for rehearing

before the panel or rehearing en banc is reprinted in the

Appendix to this Petition.

JURISDICTION

The jurisdiction of this Court rests upon 28 U.S.C.

§ 1254. The judgment of the United States Court of Ap-

peals for the Seventh Circuit was entered February 4,

2004. Petitioners’ timely petition for rehearing was denied

April 30, 2004.

STATUTORY PROVISIONS

29 U.S.C. § 159, in relevant part, provides:

Representatives designated or selected for the

purposes of collective bargaining . .. shall be the

exclusive representatives of all the employees in

such unit for the purpose of collective bargaining

in respect to rates of pay, wages, hours of em-

ployment, or other conditions of employment .. .

18 U.S.C. § 1962(c), in relevant part, provides:

It shall be unlawful for any person employed by

or associated with any enterprise ... to conduct

or participate, directly or indirectly, in the con-

duct of such enterprise’s affairs through a pat-

tern of racketeering activity...

18 U.S.C. § 1961(4), in relevant part, provides:

“enterprise” includes any individual, partner-

ship, corporation, association, or other legal en-

tity, and any union or group of individuals

associated in fact although not a legal entity.

18 U.S.C. § 1964(c), in relevant part, provides:

Any person injured in his ... property by reason

of a violation of section 1962 of this chapter may

sue therefore in any appropriate United States

District Court...

STATEMENT OF THE CASE

A. Statement of Facts

Petitioners are former, lawfully employed, hourly-paid

employees of Respondent IBP, Inc. (IBP)’s Joslin, Illinois,

meatpacking facility." The workers are unionized, and

" This statement of facts comes from the Complaint. (App. 24-36)

At this stage, a court must accept the allegations as true, must construe

them liberally, and must draw all reasonable inferences in favor of the

plaintiff. H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229,

249 (1989). A court may not dismiss a complaint unless “it is clear that

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

consistent with the allegations.” Jd., at 249-509 (emphasis added;

citations omitted). “[A]t the pleading stage, general factual ... allega-

tions embrace those specific facts that are necessary to support the

claim.” National Organization of Women v. Scheidler, 510 U.S. 249, 256

(1994) (citations omitted). “When a Federal court reviews the suffi-

ciency of a complaint, its task is necessarily a limited one. The issue is

not whether the claimant will ultimately prevail but whether the

claimant is entitled to offer evidence to support the claims.” Scheuer v.

Rhodes, 416 U.S. 232, 236 (1974).

their wages were set by a collective bargaining agreement

between IBP and the union. The collective bargaining

agreement is silent as to the question of employing illegal

workers.”

Petitioners’ brought this putative class action for

former and current employees under the Racketeer Influ-

enced and Corrupt Organizations Act (“RICO”)’ for injury

to their property* because their wage rates were depressed

as a result of IBP’s scheme for the employment of an

unlawful workforce.

The crux of Petitioners’ complaint was that their

wages would have been higher had IBP not engaged in a

scheme to employ unauthorized employees, that is, by

expanding the labor market to include unauthorized

workers that were willing to work at depressed wages and

benefits.” IBP’s “illegal immigrant hiring scheme” violated

RICO (18 U.S.C. §1961(1)(F)), which makes certain

violations of § 274 of the Immigration and Nationality Act

(“INA”) predicate offenses.® Petitioners’ alleged that: (1)

* “(To hire illegal aliens is not a . . . subject of collective bargaining

...” Baker v. IBP, Inc., 357 F.3d 685, 689 (7th Cir. 2004) App. 24-36

* 18 U.S.C. §§ 1961-1968, added to Title 18 by Title IX of the

Organized Crime Control Act of 1970, Pub. L. 91-452, 84 Stat. 941.

* “Lost wages” are “property” under RICO. Jund v. Town of

Hempstead, 941 F.2d 1271, 1286 (2d Cir. 1991)

* See infra Part III for data on the affect of the employment of

illegal immigrants.

* Section 274 of the INA is codified at 8 U.S.C. § 1324. In 1996,

Congress enacted § 203 of the Illegal Immigration Reform and Immi-

grant Responsibility Act, 104 Pub. L. No. 208, 110 Stat. 3009, 566

(codified at 8 U.S.C. § 1324(a)(3)(A)), which amended § 274 of the INA

to prohibit the employment of illegal aliens. Later that year, Congress

enacted the Antiterrorism and Effective Death Penalty Act, which, inter

alia, added the amended § 274 to RICO. Pub. L. No. 104-132, § 433, 110

Stat. 1274 (1996). These predicates were added “to help Federal law

enforcement officials” because groups “in this country, with ties to

others abroad, . . . [had] developed to prey upon illegal immigrants who

want to come to the United States.” 141 Cong. Rec. H1588 (daily ed.

February 10, 1995) (statement of Rep. McCollum). Concern was also

expressed over the high costs imposed by illegal immigration on the

(Continued on following page)

the IBP scheme violated § 274 of the INA and RICO,’ and

(2) they were proximately injured by receiving wages that

were depressed, that is, below what they would have been

in a lawful labor market. Petitioners “allege[d] that IBP...

expanded the pool of available labor and thus depressed the

price that labor can command. When supply rises and

demand is constant, price falls.” Baker v. IBP, 357 F.3d 685,

689-90 (7th Cir. 2004) App. 8 “[Wlages . . . [were] depressed

by about four dollars ($4.00) per hour ...” Jd. at 687. App.

B. The Proceedings Below

The Seventh Circuit held that the complaint failed to

state a claim for relief, and it dismissed it under Fed. R.

Civ. P. 12(b)(6), for two reasons: (1) Petitioners were

precluded from bringing a class action over wages by

Section 159 of the National Labor Relations Act, 29 U.S.C.

§ 159 (“Section 159”), since the union is the “exclusive

bargaining agent,” and (2) the goals of the members of an

State and Federal Welfare and Corrections Systems. See generally the

remarks of the various congressmen, id.

” The Seventh Circuit expressed skepticism about the “accuracy” of

the allegations in the Complaint (Baker, 357 F.3d at 687), commenting

that if the allegations were “true, managers at IBP .. . [had] committed

hundreds of felonies ... ,” and wondered, if they were true, why the

“United States ... [had] not commenced a criminal prosecution.” Jd.

While IBP has not been indicted, Tyson Foods, Inc., the subject of the

Sixth Circuit decision in_conflict with Baker, was the subject of an

indictment (although it was not convicted, see infra nn.73-74) for its

hiring of illegal aliens at 15 of its processing plants in nine different

states. Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 606 (6th Cir.

2004)). Similarly, Commercial Cleaning Services, L.L.C., the subject of

the Second Circuit decision in conflict with Baker, was prosecuted for

illegal alien offenses in 1996. Commercial Cleaning Services, L.L.C., v.

Colin Services Systems, Inc., 271 F.3d 374, 379 (2d Cir. 2001). Thus, this

litigation is not an example of the commercial fraud disputes that so

vexed members of this Court in the 1980’s. Congress knew what it was

doing in 1996 well after that controversy had abated in light of this

Court’s restrictive “pattern” decision in H.J., Inc.

association-in-fact RICO enterprise must not be “diver-

gent.”

REASONS FOR GRANTING THE WRIT

I. THIS COURT SHOULD RESOLVE THE SPLIT

BETWEEN THE SEVENTH AND THE SIXTH

CIRCUITS ON THE RIGHT OF WORKERS TO

SUE EMPLOYERS FOR MATTERS OUTSIDE

OF THE COLLECTIVE BARGAINING PROC-

ESS UNDER STATUTES THAT ARE INDE-

PENDENT OF THE LABOR LAWS WITHOUT

THE INTERVENTION OF A UNION.

The decision of the Seventh Circuit that holds that

employees cannot bind together to sue their employer for

damages to their “property” (albeit measured by lost

wages) under a statute that is (1) not part of the labor

laws, and (2) does not raise a matter under the collective

| bargaining agreement is in conflict with the decision of the

Sixth Circuit in Trollinger v. Tyson Foods, Inc., 370 F.3d

602 (6th Cir. 2004). Because this is an important question

of statutory interpretation at the heart of the employer-

employee relation in the context of illegal immigration, a

* Necessarily included in this Petition are two procedural issues

(pleading and amendment), in which the Seventh Circuit erred. See

supra n.1 (true; liberal; inferences; relief; general/specific; evidence) &

n.7. Baker resolved “divergent goals” and “participate in affairs” on a

Rule 12 motion in violation of these pleading standards. 357 F.3d at

691-92. In fact, the complaint fully alleged each element. App. 28-35

As such, Baker also conflicts with the Sixth Circuit in Trollinger, 370

F.3d at 615 (citing Swierkiewicz v. Sorema NA, 534 U.S. 506, 514 (2002)

(notice pleading)); 370 F.3d at 619 (proximate cause); 370 F.3d at 621

(enterprise). In any event, the appeal should be remanded to grant

Plaintiffs an opportunity to amend. That this opportunity was not

granted is in conflict with established procedure. See, e.g., Branch v.

Tunnell, 937 F.2d 1382, 1388 (9th Cir. 1991); Warner v. Alexander Grant

& Co., 828 F.2d 1530 (11th Cir. 1987); Pross v. Katz, 784 F.2d 455, 459-

60 (2d 1986).

pressing national matter, this split in the circuits should

now be settled by this Court.

In Trollinger, as in Baker, plaintiffs, four individuals,

on behalf of themselves and all others similarly-situated,

brought a wage-related dispute between [themselves and]

Tyson Foods, Inc. Jd. at 606. As in Baker, “[they] allege[d]

that Tyson violated RICO by engaging in a scheme with

several employment agencies to depress the wages of

Tyson’s hourly employees by hiring illegal immigrants.” Jd.

Relying upon Baker, Tyson urged the Sixth Circuit to

concur in the Seventh Circuit’s analysis and dismiss the

case because “the [National Labor Relations Act (NLRA)]

gives the union the exclusive right to prosecute it .. . Jd. at

620.

The Sixth Circuit rejected “Baker’s suggestion” that

the union had an “exclusive” right to sue. Jd. at 621. The

Sixth Circuit’s holding that the workers could sue over

wage claims was evident from a series of cases interpret-

ing both the Act and the subsequently enacted Section 301

of the Labor Management Relations Act (29 U.S.C. § 185).

These cases indicate that Congress did not intend to

preclude all worker lawsuits arising from the mandatory

bargaining issues. See Office & Prof Employees Int'l

Union, Local 2 v. FDIC, 962 F.2d 63, 66 (D.C. Cir. 1992) (R.

Ginsburg, J.) (“When a claim derives from a collective

bargaining agreement — an arrangement negotiated by a

union to which it is a signatory — the labor organization is

an appropriate (although not the only appropriate party)

to vindicate employees’ rights.”) (emphasis added). Trollin-

ger, 370 F.3d at 621. Hence, the union was not the “exclu-

sive” party to bring a claim for relief arising from cther

statutory rights not contemplated by Congress in enacting

the Act. The case for wage depression was such an area

not foreclosed by the Act.’ Id. Thus, Baker’s comment

* The principle involved is basic: One statutory right is not to be

denigrated by another unless Congress expressly or implicitly so

intends. See, e.g., FC.C. v. NextWave Personal Communications Inc.,

(Continued on following page)

“1 ain nee in naman

(“Individual workers may step into the union’s shoes only

if it has violated its duty of fair representation,” Baker, 357

F.3d at 609) is wrong. Trollinger, 370 F.3d at 621 (“The

historical context in which these statutes were enacted...

suggests that when Congress made unions the exclusive

representative of employees for purposes of collective

bargaining, it did not mean to establish unions as the

exclusive representative of employees for purposes of all

wage-related litigation.”) (emphasis added).

537 U.S. 293, 304 (2003) (“When two statutes are capable of co-

existence, it is the duty of the courts, absent a clearly expressed

congressional intention to the contrary, to regard each as effective”).

Since Congress expressly enacted RICO to co-exist with other criminal

and civil statutes, it would be contrary to Congress’ intent to have a

statute enacted before RICO to displace it except in the most clearly

required situations, which the issues in this Petition do not represent.

Pub. L. No. 91-452, § 904(b), 84 Stat. 947 (“Nothing in . . . [RICO] shall

supersede any provision of Federal, State, or other law imposing

criminal penalties or affording civil remedies in addition to those

provided in this title.”). Even in the labor law area, this Court is loath

to find that other statutes are displaced. See, e.g., Allis-Chalmers Corp.

v. Lueck, 471 U.S. 202, 212 (1985) (“In extending the pre-emptive effect

of § 301 beyond suits for breach of contract, it would be inconsistent

with congressional intent under [§ 301] to preempt state rules that

proscribe conduct, or establish rights and obligations, independent of a

labor contract”).

II. THIS COURT SHOULD RESOLVE THE SPLITS

BETWEEN THE SEVENTH CIRCUIT THAT

LIMITS ENTERPRISE PLEADING TO THOSE

NOT INVOLVING DIVERGENT GOALS AND (1)

THE SECOND CIRCUIT THAT RECOGNIZED A

SIMILAR ENTERPRISE PLEADING UNDER

AN ILLEGAL IMMIGRATION SCENARIO, (2)

THE SECOND CIRCUIT (AND OTHERS) THAT

RECOGNIZE ENTERPRISE PLEADINGS IN

THE ORGANIZED CRIME AREA, (3) OTHER

CIRCUITS THAT UPHOLD ENTERPRISE

PLEADINGS THAT REFLECT DIVERGENT

GOALS, AND (4) THE FIRST, SECOND, AND

NINTH CIRCUITS THAT RECOGNIZE ENTER-

PRISE PLEADINGS THAT INCLUDE FRAUD

VICTIMS OF A RICO VIOLATION.

Baker is in conflict with “enterprise” decisions in other

circuits in several scenarios: (1) illegal immigration, (2)

organized crime, (3) governmental enterprises, and (4)

commercial fraud.

(i) Tegal Immigration Litigation.

The Seventh Circuit’s decision clashes with the Second

Circuit in Commercial Cleaning Services, L.L.C. v. Colin

Service Systems, Inc., 271 F.3d 374, 379 (2d Cir. 2001).

Commercial sued Colin under RICO for commercial injury

caused by Colin’s alleged illegal immigrant hiring scheme.

The Second Circuit found no reason to object to an associa-

tion-in-fact enterprise described, in relevant part, as:

Colin is part of an enterprise composed of enti-

ties associated-in-fact that includes employment

placement services ... and ‘various immigrant

networks that assist fellow illegal immigrants in

obtaining employment, housing and illegal work

permits.’ * * * It alleges that Colin’s participation

in the affairs of the enterprise through the illegal

immigrant hiring scheme violates 8 U.S.C.

§ 1324(a), which prohibits hiring certain un-

documented aliens, and which is a RICO predi-

cate offense if committed for financial gain.”

The enterprise in Baker is indistinguishable from the one

alleged in Commercial Cleaning, i.e., the defendant and

others that assist it in recruiting illegal workers.’* The

Second Circuit found only one defect in the RICO claim, a

failure to plead the required state of mind in the commis-

sion of the predicate offenses.” Yet, as in Baker, defendant

Colin, presumably, “want[ed] to pay lower wages; the

recruiters [,that is, the employment placement services]

want[ed] to be paid more for services rendered (though .. .

Colin) would [have] lik[ed] to pay them less); the ...

[various immigrant networks that assisted fellow illegal

immigrants] wanted to assist members of . . . [their] ethnic

group[s]. These ... [were] divergent goals.” Baker, 357

F.3d at 691. If Baker’s analysis is required by RICO, and it

is not, Commercial Cleaning was wrongly decided, and it

is not." The split ought to be resolved by this Court now.

*° 357 F.3d at 379.

" The Commercial Cleaning Service, L.L.C. enterprise contained

other entities, but they are, in the words of Baker, “agents and employ-

ees” in the illegal scheme, which composed the enterprise, that it

believed came “perilously close” to violating the holding of Bucklew uv.

Hawkins, Ash, Baptie & Co., 329 F.3d 923, 934 (7th Cir. 2003) (citing

Fitzgerald v. Chrysler Corp., 116 F.3d 225, 226-228 (7th Cir. 1997) (“a

large, reputable manufacturer ... plus its dealers and other agents (or

any subset of the members of the corporate family) do not constitute an

enterprise”). The differences, therefore, are not material.

” E.g., 371 F.3d at 387: “[That Colin had actual knowledge that the

illegal aliens it hired were brought into the country in violation of the

{immigration statutes]].”

* For that matter, Baker’s analysis does not reflect general

organizational theory. The Baker opinion mistakenly confuses the goals

of members of an organization (personal goals) with the goals of the

organization (collective goals). A leading treatise on organizations

states:

(Continued on following page)

An organizational goal is a desired state of affairs that the

organization attempts to realize. * * * A goal... is a state that we

seek, not one that we have. Such future states of affairs ... [are]

images.

But whose image of the future does the organization pursue?

That of the top executives? The board of directors or trustees? The

majority of the members? Actually none of these. The organiza-

tional goal is that future state of affairs that the organization as a

collectivity is trying to bring about. It is in part affected by the

aims of the top executives, those of the board of directors and

those of the rank and file. Sometimes it is determined through

peaceful consultation, at other times it is the outcome of a power

play among the various organizational divisions, plants, cabals,

ranks, and ‘personalities.’

How then, does one determine what the goal of an organiza-

tion is? In part, the participants may act as informants. We may

interview ... [them]. In interviewing them, however, we must

carefully distinguish their personal goals from the goal of the

collectivity. * * * [W]e can [also] analyze the division of labor of

the organization, its flow of work, and its allocation of resources

* * *

Virtually all organizations have a formal, explicitly recog-

nized, sometimes legally specified organ for setting initial goals

and for their amendment. * * * In practice, goals are often set in a

complicated power play involving various individuals and groups

within and outside the organization.

* * *

Conflict goes on continually, but at the same time, persons

and groups bargain for some say in determining organization

goals, though often such bargaining is implicit or ‘silent’... The

net result is that what happens to be the goals of an organization

at a particular time may be seen as the features of a bargain

struck among negotiators, or as the terms of a truce among com-

batants, the goals are always temporary, likely to be modified

whenever the power balance shifts, either inside the organization

or in the environment.

Edward Gross & Amitai Etzoini, ORGANIZATIONS IN SOCIETY 8-13 (1985)

(citations omitted; emphasis added). If Baker’s analysis were correct,

“divergent [personal] goals” among members of a putative organization

would preclude the existence of any organizations in society (under

RICO or otherwise), since they could not have any common or collective

goals. Law and organizational theory are in accord. See United States v.

(Continued on following page)

Se Se eee ae wee ee

(2) Organized Crime.

RICO’s “legislative history ... clearly demonstrates

that ... [it] was intended to provide new weapons of

unprecedented scope for an assault upon organized crime

...” Russello v. United States, 464 U.S. 16, 26 (1983). Any

construction of RICO that jeopardizes its core purpose

cannot be correct. Yet, if Baker, is uniformly applied across

association-in-fact enterprises,* then organized crime

prosecutions are in serious jeopardy. For example, the

Second Circuit in United States v. Orena, 32 F.3d 704, 710

(2d Cir. 1994) faced a RICO prosecution in the context of

an internal war between opposing factions of the Colombo

Family of the Cosa Nostra. The Second Circuit observed:

Substantial evidence at trial established that af-

ter Colombo family boss Carmine Persico was in-

carcerated for a lengthy term in 1986 and a

committee that was appointed to govern the Co-

lombo Family proved unworkable, the Commis-

sion, [the top governing body of Cosa Nostra,]

appointed Orena as the acting boss of the Co-

lombo Family on Persico’s recommendation. * * *

In any event, there was considerable evidence

that Orena thereafter aspired to become the

official, rather than the acting, boss of the Co-

lombo family, displacing Persico. Persico, in turn,

Griffin, 660 F.2d 996, 1000 (4th Cir. 1981) (‘Critical ... is proof of a

common purpose ... [T]he evidence sufficiently supports the ...

inference ... that whatever the private purposes there may have been

there was also the required commonality of purpose [to commit the

predicate acts.].”) (emphasis added).

“ RICO’s crucial concepts are to be uniformly applied. See, e.g.,

Reves v. Ernst & Young, 507 U.S. 170, 177-86 (1993) (“conduct” read

identically in its verb and noun form in RICO); Shearson/American

Express, Inc. v. McMahon, 482 U.S. 220, 239 (1987) (“a ‘pattern’ for civil

purposes is a ‘pattern’ for criminal purposes” under RICO) (citation

omitted). Cf Northern Sec. Co. v. United States, 193 U.S. 197, 401

(1904) (antitrust) (Holmes, J. dissenting) (“The words cannot be read

one way in a suit which is to end in fine and imprisonment and another

way in one which seeks an injunction.”).

indicated his intention to replace Orena with

Persico’s son, Alphonse Persico, who was sched-

uled for release from imprisonment in June 1993.

This resulted in [violent] conflict[s] between

Orena and Persico factions of the Colombo Fam-

ily in 1991 and 1992...

Id. at 708.

Orena challenged his RICO convictions, arguing that

the enterprise allegation was “schizophrenic.” Jd. at 709.

The indictment alleged:

The members and associates of the Colombo Or-

ganized Crime Family of La Cosa Nostra (‘Co-

lombo family’) constituted an ‘enterprise’ as that

term is described in Title 18, United States Code,

Sections 1961(4) ..., that is, a group of individu-

als associated in fact.

Id. at 709.

The Second Circuit rejected Orena’s arguments. “The

existence of an internal dispute does not signal the end of

the enterprise ... ” Id. at 710 (citing United States v.

Coonan, 938 F.2d 1553, 1560-61 (2d Cir. 1991) (violent

infighting in “Westies,” an Irish gang, did not negate

existence of RICO enterprise)). The Circuit also turned to

basic conspiracy law. 32 F.3d at 710 (citing United States v.

Amato, 15 F.3d 230, 234 (2d Cir. 1994) (“Rivalry and

dissension ... do not necessarily signify dissolution of a

conspiracy.”).

The conflict between Baker and organized crime

prosecutions is not limited to association-in-fact enter-

prises that reflect internal disputes (an attribute that

might well be generalized to all such organizations — or,

for that matter, to all organizations — under RICO — or

otherwise.). The Seventh Circuit also believed that the

person, IBP, was not “distinct” from the enterprise, IBP

and its recruiters. Under the person-enterprise rule, a

distinction must exist between the “person” and the

“enterprise.” If no distinction can be drawn, the two

concepts collapse, and the pleading is improper for a

failure to plead distinct entities. The Seventh Circuit holds

that no distinctness is present between a corporation and

its subsidiaries and employees. See, e.g., Bachman v. Bear

Stearns & Co., Inc., 178 F.3d 930, 932 (7th Cir. 1999) (“A

firm and its employees, or a parent and its subsidiaries,

are not an enterprise separate from the firm itself” ).

Thus, the Baker court perceived the enterprise alleged

here as such a family of corporations under common

ownership. Baker, 357 F.3d at 691 (citing Bucklew, 329

F.3d at 934 (citing Fitzgerald, 116 F.3d at 226-28) (“a large,

reputable manufacturer ... plus its dealers [, independ-

ently owned or otherwise,] and other agents (or any subset

of the members of the corporate family) do not constitute

an enterprise”)). But in any conspiracy, its members are

bound by the common purpose of the conspiracy. This

makes the conspirators “partners” of each other.” If the

Seventh Circuit’s analysis were correct, then no associa-

tion-in-fact enterprise could ever exist, because they would

all be swallowed up by the “distinctness” requirement.

Hence, Baker is in conflict with the legion of organized

crime prosecutions from other circuits where the associa-

tion-in-fact enterprise was an organized crime family,

having divergent, personal goals, though the collectivity is

held together by a common purpose. Mob prosecutions

have been brought in the First,’* Second,” Third,” Sixth,”

’* Salinas v. United States, 522 U.S. 52, 633-66 (1997) (RICO

conspiracy is to be evaluated under traditional standards; “The

partners in the criminal plan must agree to pursue the same criminal

objective and may divide up the work, yet each is responsible for the

acts of each other”).

"* See, e.g., United States v. Barone, 114 F.3d 1284, 1288 (1st Cir.

1997).

" See, e.g., United States v. Salerno, 868 F.2d 524, 528 (2d Cir.

1989).

"* See, e.g., United States v. Riccobene, 709 F.2d 214, 222-24 (3rd

Cir. 1983).

” See, e.g., United States v. Tocco, 306 F.3d 279, 283-84 (6th Cir.

2002).

and Ninth” Circuits, which are now in conflict with Baker,

and would be subject to dismissal if Baker is correct.

“Organized crime” is not limited to the activities of

Cosa Nostra. In United States v. Elliot, 571 F.2d 880, 884

(5th Cir. 1978), the Fifth Circuit was faced with “Dixie

Mafia,” a group of ethnically southern whites. The core of

the RICO conspiracy charge was that the defendants

agreed to participate in the conduct of the affairs of an

“enterprise” whose purposes were to commit thefts, fence

stolen property, illegally traffic in narcotics, obstruct

justice, and engage in “other criminal activities.” The

Circuit Court observed:

This enterprise can best be analogized to a large

business conglomerate. Metaphorically speaking,

J. C. Hawkins was the chairman of the board,

functioning as the chief executive officer ... An

executive committee in charge of the “Counterfeit

Title, Stolen Car, and Amphetamine Sales De-

partment” was comprised of J. C. Delph, and

Taylor, who supervised the operations of lower

level employees such as Farr, the printer, and

Green, Boyd, and Jackson, the car thieves. An-

other executive committee, comprised of J. C. Re-

cea and Foster, controlled the “Thefts from

Interstate Commerce Department”, arranging

the purchase, concealment, and distribution of

such commodities as meat, dairy products, “Ca-

reer Club” shirts, and heavy construction equip-

ment. An offshoot of this department handled

subsidiary activities, such as murder and ob-

struction of justice. ... Each member of the con-

glomerate, with the exception of Foster, was

responsible for procuring and wholesaling what-

ever narcotics could be obtained. The thread

* See, e.g., United States v. Brooklier, 685 F.2d 1208, 1213 (9th Cir.

1982).

OL a thant as rhe

eit teat

tying all of these departments, activities, and in-

dividuals together was the desire to make money.

Elliot, 571 F.2d at 898.

Elliot’s analysis of the common objective requirement

of “enterprise” within RICO (and of conspiracy) is in

conflict with Baker. If RICO is to remain effective against

organized crime-type activities, as in Elliot, this split must

be now resolved.

One other type of RICO association-in-fact enterprise

prosecution merits attention. Organized criminal groups

often invade legitimate organizations; they then use them

as “fronts” or “instruments” for patterns of criminal

behavior. Two types of prosecutions illustrate this sce-

nario: often the group itself is the enterprise, but just as

often, the infiltrated organization is the enterprise. In the

first, the issues are the same as those already discussed.

See, e.g., United States v. Darden, 70 F.3d 1507 (8th Cir.

1995) (prosecution of the Jerry Lewis Organization (JLO),

a violent (murder) drug enterprise, that used as a front the

Subordinate Temple No. 1 of the Moorish Science Temple

of America, a religion founded in 1913 by an African-

American in Newark, New Jersey, as an alternative to

white Christianity.). In the second, the split presented in

this Petition is aptly illustrated. In United States uv.

Beasley, 72 F.3d 1518 (11th Cir. 1996), the Eleventh

Circuit faced the prosecution under RICO for a pattern of

murder, extortion, and arson in connection with a religious

cult founded in 1979, known as “Yahwehs” or “Black

Hebrew Israelites.” Hulan Mitchell, or Yahweh ben Yah-

weh, lead the cult. He established Temples in metropolitan

areas in the United States, including the Temple of Love

in Miami, Florida. He also created an ultra secret group

within the cult called the “Brotherhood”; to become a

member of the Brotherhood required killing a white

person. Numerous issues were raised on appeal, including

the propriety of naming as an enterprise “a group known

as the Yahwehs, ... and the Temple of Love, Inc.” Brief of

Richard Ingraham, United States v. Beasley, 1994 WL

16136346 *19 (11th Cir.). The Circuit upheld the enter-

prise formulation. Beasley, 72 F.3d at 1525. The Circuit

found that not all members of the Temple “supported or

were engaged in the homicidal activities ...” Jd. at 1526

n.7. It observed:

[T]here is a distinction between the conspirators

. and the general population of the Temple.

* ** This case is not the prosecution of a relig-

ion. The religion had adherents who never be-

came involved in illegal activity . . . Id.

Here, too, the Circuit faced a divergence between the

common goal of the enterprise (religion) and the personal

or private goals of the conspirators (a pattern of racketeer-

ing activity, including murder, extortion, and arson).

Nevertheless, the Circuit, in sharp contrast to Baker, but

fully consistent with Griffin, 600 F.2d at 1000, n.12, supra,

had no difficulty in properly upholding the convictions.

If the Baker decision is allowed to stand, then many

criminal RICO cases will be vulnerable to motions to

dismiss. Most RICO prosecutions allege association-in-fact

enterprises, and any competent defense counsel will cite

Baker’s “divergent goals” holding. District judges that

follow Baker will have no alternative but to dismiss

indictments.

(3) Governmental and Other Enterprises Re-

flecting Divergent Goals.

RICO’s definition of “enterprise” is expressly “in-

clu[sive].” 18 U.S.C. § 1961(1)(4). It is held to encompass “a

wide range of legitimate enterprises, ... including unions

..., courts [, and] police departments...” Beasley, 72 F.2d

at 1525.” No one ought seriously to argue that unions,

in carrying out their ordinary activities of collective

* A union, United States v. Norton, 867 F.2d 1354, 1359 (11th Cir.

1989), a court, United States v. Angelilli, 660 F.2d 23, 30-34 (2d Cir.

1981), and a police department may be an enterprise. United States uv.

Alonso, 740 F.2d 862, 870 (11th Cir. 1984).

bargaining, strikes and boycotts, or courts (most of all

courts, considering their universal practice of filing dis-

sents), or police departments (as well as a wide variety of

other governmental and private organizations) are charac-

terized by a unity of personal or private goals. Thus,

Baker’s confusion between personal or private goals (which

are inherently divergent in many organizations) and

collective or common goals (which coalesce in the organiza-

tion) must be seen as inconsistent with the statute’s

recognition of association-in-fact enterprises, and a mis-

take sharply at odds with the jurisprudence of the other

circuits.

(4) Commercial Fraud Litigation.

The Circuit Courts of Appeal are unanimous in hold-

ing that an association-in-fact enterprise can include the

victim of the RICO violation. Aetna Casualty & Surety Co.

v. PR & G. Auto Body, 43 F.3d 1546, 1557 (1st Cir. 1994)

(upholding judgments for insurance fraud; “Under § 1961

an enterprise may include a legitimate legal entity like

Aetna as the victim of the racketeering activity.”); Jacob-

son v. Cooper, 882 F.2d 717, 720 (2d Cir. 1989) (reversing

dismissal of complaint for failure to plead proper enter-

prise in real estate fraud; “Jacobson at some point volun-

tarily associated himself with one or both of the

defendants to constitute a legitimate enterprise before his

participation was foreclosed by the criminal activities of

the defendants.... Under this reading of the amended

complaint, the defendants named in this action would be

but members of a larger enterprise that included Jacob-

son.”); United Energy Owners Committee., Inc. v. United

States Energy Management Systems, 837 F.2d 356, 362-64

(9th Cir. 1988) (reversing dismissal of complaint for failure

to plead proper enterprise in fraudulent solar energy tax

shelter scheme; “(T]he plaintiffs are free to allege that

they or one of their members is a RICO enterprise or part

of a RICO enterprise ... RICO § 1962(c) requires proof of

‘(1) conduct (2) of an enterprise (3) through a pattern (4) of

racketeering activity.’ ... This language does not prohibit

the plaintiffs from including themselves in a legitimate,

albeit infiltrated, enterprise and has not been interpreted

to limit RICO enterprises to those persons engaged in the

illegal conduct. ... What is important is that the plaintiffs

must allege that ‘the defendants conducted the enterprise

through a pattern of racketeering activity.’ ... The plain-

tiffs have done so in this case.”) (emphasis in original;

citations omitted). Here, too, Baker’s confusion between

personal or private goals and collective or common goals is

starkly seen.

Ill. SINCE ILLEGAL IMMIGRATION IMPOSES

POLITICAL, ECONOMIC AND TAX, HEALTH,

WELFARE, AND EDUCATION, CORRECTIONS,

AND LAW ENFORCEMENT COSTS ON THE

NATION, THIS COURT SHOULD REVIEW

THIS PETITION NOW BECAUSE OF ITS NA-

TIONAL IMPORTANCE AND TURN BACK EF-

FORTS TO UNDERMINE THE PRIVATE

ENFORCEMENT MECHANISM ENERGIZED

BY CONGRESS IN 1996 THAT IS A NECES-

SARY SUPPLEMENT TO LAW ENFORCEMENT

Illegal immigration imposes important political,

economic and tax, health, welfare, and education, correc-

tions, and law enforcement costs on the nation. Congress

in 1996 added immigration predicates to RICO to aid law

enforcement by energizing the enforcement of provisions of

the immigration statutes by the use of private attorneys

general. The Second, Sixth, and Ninth Circuits” have

handed down decisions that faithfully follow the law as

written by Congress. The Seventh Circuit’s decision

threatens this favorable development in the law and

settled RICO jurisprudence.

* Mendoza v. Zirkle Fruit Co., 310 F.3d 1163 (9th Cir. 2002).

19 -

(1) Political Impact.

The impact of illegal immigration affects the political

processes of the nation at the highest levels. The popula-

tion of the United States is approaching 300 million.” The

fastest growing and largest minority is Hispanic.“ The

Hispanic population is now 39.9 million.” This year, the

illegal immigration population will rise to 8.5 million

persons, a net increase each year of 500,000.% Mexico is

the largest source for unauthorized immigration; that

number is now over five million; its percentage of the

unauthorized population is over 70%.” California, Arizona,

* See Press Release, U.S. Census Bureau, Hispanic and Asian

Americans Increasing Faster Than Overall Population (June 14, 2004),

available at http//:;www.census.gov/PressRelease/www/releases/achives/

race/001839.html; U.S. Census Bureau, Population Estimates, Annual

Estimates of the Population By Sex, Race and Hispanic Origin for the

United States: April 1, 2000 to July 1, 2003 (2004), available at

http://eire.census.gov/popest/data/national/tables/NC-EST 2003-03. pdf;

U.S. Census Bureau, Population Estimates, Annual Estimates of the

Components of Population Change By Race and Hispanic or Latino

Origin for the United States: July 1, 2002 to July 1, 2003 (2004),

available at http://eire.census.gov/popest/data/national/tables/NC-EST

2003-06.pdf; See also, 2 Minorities Spur Rapid U.S. Growth, N.Y.

TIMES, June 15, 2004, col. 1, at Al4.

* Press Release, U.S. Census Bureau, Hispanic and Asian Ameri-

cans Increasing Faster Than Overall Population (June 14, 2004),

available at http//:www.census.gov/PressRelease/www/releases/archives/

race/001839.html.

* Id.

** See U.S. Census Bureau, U.S. Dept of Commerce, ESCAP II:

Demographic Analysis Results (2001), available at http://www.cen

sus.gov/dmd/www/pdf/Report1.PDF; Center for Immigration Studies,

Current Numbers, available at http:/Avww.cis.org/topics/currentnum-

bers.html (“Net increase” represents all new illegal immigration minus

deaths, legalizations, and out-migration of illegal immigrants.).

* U.S. Immigration and Naturalization Service, Estimates of the

Unauthorized Immigrant Population Residing in the United States:

1990 to 2000 1 (January 2003), available at http://uscis.gov/graphics/

shared/aboutus/statistics/Ill_Report_1211.pdf. The current growth rate

of the Hispanic population is 13 percent, almost four times that of the

total population. With an illegal Mexican population growth of at least

(Continued on following page)

and Texas are the three states with the highest illegal

immigrant populations.” In fact, more than 8% of Califor-

nia’s population is composed of illegal immigrants.”

Arizona and Texas each follow with approximately 7% and

6%, respectively. Politically, the presence of illegal aliens is

important; its presence causes individual states to lose

seats in the House of Representatives; it also poses the

threat of affecting presidential elections by altering the

character of the Electoral College. U.S. Const. art. I, § 2;

art. II, § 1. Indiana, Michigan, and Mississippi each lost

one seat in 2000; Montana failed to gain a seat that it

would have had.” In all, nine seats relocated; Oklahoma,

Pennsylvania, Wisconsin, Kentucky, and Utah had one

fewer seat than they would have had but for illegal immi-

gration. California picked up six seats; New York, Texas,

and Florida gained the other three seats.” Thus, the

failure to curb illegal immigration distorts the processes of

government by significantly depriving citizens of the

weighted character of their votes in the House of Repre-

sentatives and in the Electoral College. All that can legally

be done ought to be done to curb it.

(2) Economic and Tax Impact.

Illegal immigration imposes important economic and

fiscal impacts. Two issues bring immigrants to the United

7 percent (twice that of the overall United States population growth)

these figures would make illegal Mexicans responsible for 5.6% of the

overall population growth in the nation. See Press Release, U.S. Census

Bureau, Hispanic and Asian Americans Increasing Faster Than Overall

Population, supra note 1 (stating that the total population growth is 3.3

percent).

* Dudley L. Poston, et al., Center for Immigration Studies,

Remaking the Political Landscape: The Impact of Legal and Illegal

Immigration on Congressional Reapportionment 3 (October 2003),

available at http://www.cis.org/articles/2003/back1403.pdf.

* Id.

States: family and jobs. Two thirds of legal immigrants are

admitted not because of needed skills, but because of

familial relations.” Most illegal aliens are here seeking

work. If they could not find it, they would not come. Immi-

grants (legal and illegal) increase the labor supply in low-

level jobs.” They concentrate in large population areas:

New York, Los Angeles, and Chicago, which account for

34.5% of the immigrant population.“ Nevertheless, the

huge volume of goods and services exchanged between

cities across the country creates pressure toward the

equalization of the price of labor.” Significantly, 75% of

illegal aliens lack a high school degree.” In 1997, the

National Research Council concluded that immigration

(legal and illegal) had a significant negative impact on the

wages of high school dropouts: the income of those who

lack a high school degree, 11 million of which are natives,

was reduced by up to $13 billion a year.” That figure is

roughly equal to combined federal expenditure on subsi-

dized school lunches, low-income energy assistance, and

the Women, Infants, and Children Program.” In fact, the

influx of immigration affected wages on the top as well as

* U.S. Immigration & Naturalization Service, U.S. Dep’t of Justice,

The Triennial Comprehensive Report on Immigration 12 (2002),

available at http://uscis.gov/graphics/aboutus/repsstudies/tri3.pdf (last

i modified October 31, 2003).

: * Steven A. Camarota, Center for Immigration Studies, The

Impact of Immigration on American Workers: Testimony Prepared for

the House Judiciary Committee Subcommittee on Immigration and

: Claims 1 (October 28, 2003), available at http:/Awww.house.gov/judiciary/

camarota103003.htm.

“ George J. Borjas, Increasing the Supply of Labor Through

Immigration: Measuring the Impact on Native-born Workers 2 (May

2004), available at http://www.cis.org/articles/2004/back504. pdf.

* Id.

* Camarota, supra n.38, at 11.

* NATIONAL RESEARCH COUNCIL, THE NEW AMERICANS: ECONOMIC,

DEMOGRAPHIC, AND FISCAL EFFECTS OF IMMIGRATION 7 (James P. Smith &

Barry Edmonston, eds., 1997).

* Id.

the bottom: in 2000, the typical native man without a high

school diploma earned $25,000; his reduction in wages was

$1,800; the typical male college graduate earned $73,000;

his wages were reduced by approximately $2,600.” Not

only are wages lost, taxes are higher. The National Re-

search Council also estimated in 2003 that for immigrant

households the fiscal cost — tax payments minus service

use — could be as high as $22 billion.“ If approximately

27% is illegal, this could place the illegal burden at $5.9

billion. Moreover, surveys indicate up to one-half of em-

ployers do not even deduct taxes from the pay of illegal

workers.” Typically, illegal aliens receive a tax-free wage

that is around 20-30% lower than the going wage in a

given occupation; thus employers gain excess profits of at

least 17% of the illegal alien’s wage.” Accordingly, the

economic and fiscal impact of illegal immigration is sub-

stantial. All that can legally be done ought to be done to

curb it.

(3) Health, Welfare, and Education.

The health, welfare, and educational costs of illegal

immigrant populations are an important and growing part

of public expenditures. Less than half of employed illegal

* Borjas, supra n.39, at 8. These national data put into unfavor-

able contrast the judicial skepticism on the damage in Baker, 357 F.3d

at 691. Only the fact of damage must not be speculative; the extent of

damages may be shown under a more relaxed standard, since a

defendant must be able to profit from the “uncertainty” created by his

own wrongful conduct. J. Truett Payne & Co. v. Chrysler Motor Corp.,

451 U.S. 557, 566 (1981) (antitrust). Compare DeCanas v. Bica, 424

U.S. 351, 356-57 (1976) (“illegal aliens [taking] substandard ... wages

... €an seriously depress wage scales ... [for] citizens and legally

admitted aliens”).

“ See Center for Immigration Studies, Costs, at http:/Awww.cis.org/

topics/costs.html.

“ Donald L. Huddle, Immigration and Jobs: The Process of

Displacement (May 1995), at http://Awww.npg.org/forum_seriesimm&

jobs.htm.

tittle ak < ttn Die teen!

aliens are covered by medical insurance or worker’s

compensation plans.” If they are injured, they are re-

placed, not treated, and they usually do not even receive

their last paycheck.“ Medicaid, however, provides health

care coverage for everyone, including illegal aliens, in

emergency care facilities.” In a study of ten states, more

than $2 billion was spent in 2002 for emergency Medicaid

expenditures, though not divided by native born.“ Never-

theless, five of the ten states studied reported data that

points to the likelihood that at least half of the emergency

expenditures were for illegal aliens for labor services for

pregnant women.” The Balanced Budget Act of 1997 also

made money available annually for distribution to states

with the highest number of illegal aliens; in six states, the

money was entirely used to reimburse moneys already

spent on undocumented aliens for emergency care ser-

vices.“ Indeed, during the debates on the 1995 Act, Con-

gressman Solomon told the House that then Governor

Wilson of California reported to him that two-thirds of the

babies born in Los Angeles hospitals are born to parents

who have illegally entered the United States. 141 Cong.

Rec. H1586 (1995) (statement of Rep. Solomon). In addi-

tion, in fiscal year 1995, approximately $1.1 billion in Aid

to Families with Dependent Children (AFDC) and food

stamps were provided to households with an illegal alien

parent.” Eighty-five percent of these AFDC households

“ Huddle, supra n.46.

“ U.S. Gen. Accounting Office, GAO-04-472, Report to Congres-

sional Requesters, Undocumented Aliens: Questions Persist About

Their Impact On Hospitals’ Uncompensated Care Costs 9 (May 2004).

“ Id. at 10.

“ Td.

“ Id. at 14.

“ U.S. Gen. Accounting Office, GAO/HEHS-98-30, Report to

Congressional Committees, Illegal Aliens: Extent of Welfare Benefits

Received on Behalf of the U.S. Citizen Children 6 (November 1998).

were in California, New York, Texas, and Arizona.” Any

child, regardless of immigration status, is also properly

eligible for free primary and secondary education under

Plyler v. Doe, 457 U.S. 202 (1982). As of 2000, immigrants

(legal and illegal) made up 20% of the 55 million students

in K-12. Approximately 1.1 million school-aged illegal

immigrants reside in the United States.” The cost of

admitting these illegal immigrants to primary and secon-

dary schools in the United States is about $7.6 billion.”

Thus, the health, welfare, and educational costs of illegal

immigrant populations are an important and growing part

of public expenditures.

(4) Corrections.

Immigration (legal and illegal) imposes important

costs on the corrections systems of the United States.

During the 1990's, the federal prison population more than

doubled.” According to the Bureau of Prisons, the cost of

incarcerating an inmate in 2002 was $22,517 in prison and

$17,706 for a community correction center.” More than

25% of the federal prison population is aliens.” In 2002,

criminal aliens cost the Federal Corrections budget $891

* See U. S. Census Bureau, Current Population Survey 2000,

available at http:/Awww.census.gov/apsd/techdoc/cps/cpsoct00.pdf; see also,

Michael E. Fix & Jeffrey S. Passel, U.S. IMMIGRATION: TRENDS AND

IMPLICATIONS FOR SCHOOLS 16 (Urban Institute 2003), available at

http://www.urban.org/UploadedPDF/410654_NABEPresentation. pdf.

* According to the U.S. Department of Education, in 1999-2000 the

average cost per student for the United States was $6,911. U.S. Dep’t of

Education, National Center for Educational Statistics, Current

Expenditures Per Pupil In Fall Enrollment In Public Elementary And

Secondary Schools By State: 1969-70 to 1999-2000, available at http://

nces.ed.gov/programs/digest/d02/tables/PDF/table169. pdf.

* U.S. Dep’t of Justice, Federal Bureau of Prisons, at http://www.

bop.gov/ipapg/ipaabout.pdf.

“ Id. at http://www.bop.gov/progstat/om015_03.pdf.

* Id. at http://www.bop.gov/fact0598.html.

PN NR a ne aR Rn Le ke ete Lael

st ea ene

million.” Nevertheless, less than 8% of the country’s

prison population is in federal prisons.” The Urban Insti-

tute’s 1994 study estimated, however, that 21,395 illegal

aliens were incarcerated in California, New York, Florida,

Texas, Illinois, New Jersey, and Arizona.” California bore

a cost of $368 million to incarcerate approximately 15,000

illegal aliens.” According to Congressman Foley, Florida

on any given day had approximately 5,504 criminal aliens

in state corrections facilities, annually costing taxpayers

an average of more than $14,000 per inmate. 114 Cong.

Rec. H1595 (1995) (statement of Rep. Foley). In all, Con-

gressman Packard reported to the House during the 1995

debates that criminal aliens cost the state and county

criminal justice systems more than $500 million per year,

costs, he thought, “[w]e cannot sustain.” 114 Cong. Rec.

1590 (1995) (statement of Rep. Packard).

(5) Law Enforcement.

Lawful and unlawful immigration is largely out of the

control of the Immigration and Nationalization Service

(INS).° One measure of those phenomena is the experience

* U.S. Dep’t of Justice, Bureau of Justice Statistics, available at

http://www.ojp.usdoj.gov/bjs/.

"on

* Rebecca L. Clark et al., FISCAL IMPACTS OF UNDOCUMENTED

ALIENS: SELECTED ESTIMATES FOR SEVEN STATES §-13 (Urban Institute

1994).

* Id.; U.S. Gen. Accounting Office, GAO/HEHS-95-22, Report to

the Honorable Barbara Boxer, U.S. Senate, Illegal Aliens: Assessing

Estimates of Financial Burden on California 6 (November 1994).

Arizona, California, Florida, New Jersey, New York, and Texas (6 of the

7 states with the largest illegal alien populations) have each filed suits

to force the federal government to reimburse them for criminal justice

costs associated with undocumented aliens. Rebecca L. Clark & Scott A.

Anderson, ILLEGAL ALIENS IN FEDERAL STATE AND LOCAL CRIMINAL

JUSTICE SYSTEMS ii (Urban Institute 2000), available at http://www.

urban.org/UploadedPDF/410366_alien_justice_sum.pdf.

of Homeland Security. See Homeland Security Act of 2002, § 441, 116

(Continued on following page)

of the Department of Justice following September 11th.

The Department sought to interview 4,112 aliens who

might have the ability to help the Department with its

anti-terrorism programs. By February 2002, 45% of these

aliens could not be located because the INS lacked reliable

address information.” Similarly, and just as disturbingly,

in January 2002, the Department established the Ab-

sconder Apprehension Initiative; it examined an estimated

314,000 aliens with final orders of removal. The INS then

identified 5,046 who were from countries in which Al

Qaeda terrorists had a presence. As of June 24, 2002,

neither the INS nor the Federal Bureau of Investigation

(FBI) was able to locate 86% of the absconders.” The

Immigration Reform and Control Act of 1986, 100 Stat.

3359 (1986) (IRCA) made it illegal for an employer to hire

an illegal alien. Unfortunately, the Act is easily circum-

vented. Data from the INS’s database showed that over a

20-month period (October 1996 — May 1998), the INS

identified about 50,000 unauthorized aliens who had used

78,000 fraudulent documents to obtain employment.” The

INS, too, has too many responsibilities. Since 1994, it has

devoted only 2% of its enforcement resources to worksite

enforcement, and this was before 9/11.“ The results of the

investigations are as might be expected. In fiscal year 1998,

for example, the INS completed about 6,500 employer

investigations of about 3% of the country’s estimated

Stat. 2192 (2003) (6 U.S.C. § 251) (Supp. 2003)). For convenience, the

older usage is employed here. The Department is still overwhelmed

with work, see Nina Bernstein, A Longer Wait for Citizenship and the

Ballot, N.Y. TIMES, June 11, 2004, col. 5, at 1 (reporting a backlog of

100,000 petitions for citizenship in New York City).

* U.S. Gen. Accounting Office, GAO-03-188, Report to Congres-

sional Requesters, Homeland Security: INS Cannot Locate Many Aliens

Because It Lacks Reliable Address Information 3 (November 2002).

® Id. at 13.

“ U.S. Gen. Accounting Office, GAO/GGD-99-33, Report to

Congressional Committees, Illegal Aliens: Significant Obstacles to

Reducing Unauthorized Alien Employment Exist 10 (April 1999).

” id.at3.

number of employers of illegal aliens.” Ejighty-three

percent of the investigations resulted in no employer

sanctions.” The INS instituted criminal proceedings in

only 2% of the investigations.” The widespread use of

fraudulent documentation makes it difficult to prove the

required knowledge beyond a reasonable doubt on the part

of the offending employers. In fact, the INS was only able

to collect one-half of the criminal penalties it assessed,

principally because of employer bankruptcy.” In short, the

government alone through the INS, even supplemented by

the FBI, cannot do the job of curtailing illegal immigra-

tion, much less meet its increased responsibilities since

9/11.

(6) Private Enforcement.

In 1970, Congress enacted RICO to deal with “enter-

prise criminality.”” Like the antitrust statutes, Congress

used in RICO “a generality and adaptability [of language]

comparable to that found to be desirable in constitutional

provisions.” Appalachian Coals, Inc. v. United States, 288

U.S. 344, 359-60 (1933) (antitrust). Congress “drafted

Te Re Ele Or Ae ee oe, -

ee bee ee

® Id.

* Id.

” U.S. Gen. Accounting Office, GAO/T-GGD-99-105, Statement to

Chairman and Members of the Subcommittee, Illegal Aliens: Signifi-

cant Obstacles to Reducing Unauthorized Alien Employment 5 (1999).

“ U.S. Gen. Accounting Office, GAO/T-GGD/HEHS-99-175,

Testimony Before the Subcommittee on Immigration and Claims

Committee on the Judiciary, House of Representatives, Illegal Aliens:

Fraudulent Documents Undermining the Effectiveness of the Employ-

ment Verification System (July 1999).

* Statement to Chairman and Members of the Subcommittee,

Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien

Employment Exist, supra n.72, at 5.

” United States v. Cauble, 706 F.2d 1322, 1330 (5th Cir. 1983)

(“enterprise criminality” consists of “all types of organized criminal

behavior [ranging] from simple political corruption to sophisticated

white-collar schemes to traditional Mafia-type endeavors.”) (citations

omitted), cert. denied, 465 U.S. 1005 (1984).

RICO broadly enough to encompass a wide range of

criminal activity, taking many different forms, and likely

to attract a broad array of perpetrators operating in many

different ways.” H.J. Inc.,492 U.S. at 248-49. “The occasion

tor Congress’ action was the perceived need to combat

organized crime. But Congress, for cogent reasons, chose

to enact a more general statute. ... ” NOW, Inc., 510 US.

at 260 (citation omitted). Like the antitrust laws, RICO

creates “a private enforcement mechanism that ... deters

violators[;] deprives them of the fruits of their illegal

actions and ... provide[s] ample compensation to the

victims of [RICO] violations.” Blue Shield of VA. v.

McCready, 457 U.S. 465, 472 (1982) (antitrust) (citing

Pfizer, Inc. v. India, 434 U.S. 308, 313-14 (1978)); Rotella v.

Wood, 528 U.S. 549, 558 (2000) (“‘private attorneys gen-

eral’ dedicated to eliminating racketeering activity. * * *

The provision for treble damages is accordingly justified by

the expected benefit of suppressing racketeering.... ”).

Congress wanted private citizens to use the law to obtain

the relief that the Justice Department and the INS, given

their limited resources, cannot be expected to provide. See

Agency Holding Corp. v. Malley-Duff & Assc., 483 U.S.

143, 151 (1987) (“Both ... [RICO and the anti-trust

statutes] bring to bear the pressure of private attorneys

general on a serious national problem for which public

prosecutorial resources are deemed inadequate ... ”).

Moreover, like the antitrust statutes, “RICO is to be read

broadly.” Sedima, S.P.R.L. v. Imrex, Co., 473 U.S. 479, 497-

98 (1985); American Society of Mechanical Engineers, Inc.,

456 U.S. at 568-69 (1982) (antitrust). Indeed, RICO makes

its principle of liberal construction a matter of express

statutory language. 84 Stat. 947 (1970).

The significance of this Petition to effective admini-

stration of the federal immigration statutes and RICO can

hardly be overstated. Conflicts on these key issues of

“exclusive” representation and “common goals” in associa-

tion-in-fact enterprises ought not to be permitted to

continue. To permit these issues to fester is not fair to

workers seeking fair treatment in different circuits, and it

undermines RICO’s effectiveness, criminally and civilly,

Aan AERO a ss ash,

ile 2 hESC tt 0 he NOBEL IN he sabia

for example, as a guarantor of general integrity” of the

country’s national marketplace. Indeed, RICO is the only

statute that permits private citizens to sue to enforce the

immigration statutes.

if the immigration statutes are to be undermined, or

RICO is to be significantly limited, as attempted here by

the Seventh Circuit, that reform ought to come, if at all,

from Congress itself. H.J. Inc., 492 U.S. at 249. Congress

has deliberately enlarged RICO’s scope to bring the private

enforcement mechanism to bear on the general issue of

illegal aliens in the workplace, an enlargement that took

place in the teeth of complaints of the misuse of RICO in

the. commercial fraud area. That ought to end the matter

judicially, absent constitutional considerations not impli-

cated here. United States v. Turkette, 452 U.S. 576, 587

(1981) (“There is no argument that Congress acted beyond

its power.... That being the case, the courts are without

authority to restrict the application of ... [RICO]”). Justice

Cardozo put it well: “[A court’s] duty is done when ... [it]

enforce[s] the law as it is written.” Techt v. Hughes, 229

N.Y. 222, 228-29, 128 N.E. 185, 186 (1920), cert. denied, 254

U.S. 643 (1920); T'V.A. v. Hill, 487 U.S. 153, 194-95 (1978)

(“Our individual appraisal of the wisdom or unwisdom of a

particular course consciously selected by the Congress is to

be put aside in the process of interpreting a statute. Once

the meaning of an enactment is discerned and its constitu-

tionality determined, the judicial process comes to an end.

We do not sit as a committee of review, nor are we vested

with the power of veto”).

" “There are three possible kinds of force which a firm can resort

to: violence (or threat of it), deception, or market power” Carl Kaysen

et al., ANTITRUST POLICY 17 (1959). Antitrust focuses on the third;

“scheme to defraud” focus on the second; RICO focuses on the first and

second. Together, they seek a marketplace characterized by integrity,

fiscal and physical. Indeed, the litany of major company names in the

news for illegal conduct is dizzying. See, e.g., The Economist, June 28,

2003 (Enron, WorldCom, Tyco, Adelphia, HealthSouth, Imcone, Global

Crossing, etc.) (“[T]he basic task is to insure that existing laws are

vigorously enforced and that any loopholes in them are closed. .. . ”).

CONCLUSION

For these reasons, Petitioners respectfully urge this

Court to grant their Petition for a Writ of Certiorari and to

resolve these conflicts between the circuits on exclusive

representation and common goals.

G. ROBERT BLAKEY

Counsel of Record

NOTRE DAME LAW SCHOOL

Notre Dame, IN 46556-0780

(219) 631-5717 (telephone)

(219) 631-4197 (facsimile)

HOWARD W. FOSTER

JOHNSON & BELL, LTD.

55 East Monroe Street

Suite 4100

Chicago, IL 60603

(312) 372-0770

Attorneys for Petitioners

App. 1

357 F.3d 685

United States Court of Appeals, Seventh Circuit.

Deborah BAKER and Richard Enyeart,

Plaintiffs-Appellants, Cross-Appeliees, v. IBP, INC.,

Defendant-Appellee, Cross-Appellant.

No. 02-3967, 02-4065.

Argued May 30, 2003. Decided Feb. 4, 2004.

Howard William Foster (argued), Johnson & Bell,

Chicago, IL, for Plaintiffs-Appellants.

lan ee aT

David B. Johnson (argued), Eric S. Mattson and Emily

A. Mily, Sidley, Austin, Brown & Wood, Chicago, IL, for

Defendant-Appellee.

Before FLAUM, Chief Judge, and EASTERBROOK

and RIPPLE, Circuit Judges.

EASTERBROOK, Circuit Judge.

| Plaintiffs want to represent all persons, authorized to

7 work in the United States, who have been or are now

employed at IBP’s meat-processing plant in Joslin, Illinois.

They appeal from the district court’s decision that their

claim should have been submitted to the National Labor

Relations Board rather than a court. Despite Fed.R.Civ.P.

23(c)(1) (“As soon as practicable after the commencement

of an action brought as a class action, the court shall

determine by order whether it is to be so maintained”), the

district judge dismissed the suit without mentioning the

class aspects of the complaint. The two plaintiffs, as ex-

employees at Joslin, likely are poor representatives of its

current employees — not just because plaintiffs quit, but

because the plant’s workers already have a representative:

a union certified by the NLRB. The claim in this case is

App. 2

that IBP’s wages are too low, and that sort of contention

must be presented by the union rather than individual

members of the labor force. Plaintiffs’ request to proceed

on behalf of a class of all workers shows that they seek to

usurp the union’s role. But we are getting ahead of our-

selves.

Plaintiffs’ complaint alleges, and we must assume

given the case’s posture, that about half of the employees

at IBP’s Joslin plant are aliens who cannot lawfully work

in the United States — and that IBP not only knows in a

statistical sense that many of its non-citizen employees

lack the sort of visas that authorize working here but also

can identify which ones they are, yet winks at obviously

fake green cards and other spurious credentials. IBP

alerts its unauthorized employees to stay away the days

when immigration officials conduct inspections. (The

complaint leaves it to the imagination how IBP learns

these dates.) When immigration officials do manage to

catch and remove aliens not allowed to work (or be) in the

United States, IBP pays “recruiters” to smuggle them back

into the country and immediately re-employs them under

new aliases and new bogus identification. Moreover, the

complaint alleges, IBP has arrangements with immigrant-

welfare organizations, such as the Chinese Mutual Aid

Association based in Chicago, under which these groups

refer known illegals to IBP for employment. The upshot,

plaintiffs believe, is that wages at the Joslin plant are

depressed by about $4 per hour compared with what IBP

would have to pay if the labor force included only U.S.

citizens plus aliens holding green cards.

If the allegations are true, managers at IBP have

committed hundreds of felonies. We have no idea whether

any of the plaintiffs’ allegations is accurate, though we do

8 enna aah an at

App. 3

know that the United States has not commenced a crimi-

nal prosecution. Still, the Racketeer Influenced and

Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-68,

permits private actions for three times the loss caused by a

pattern of racketeering activity. See 18 U.S.C. § 1964(c).

Since 1996, RICO has included among its predicate of-

fenses “any act which is indictable under the Immigration

and Nationality Act, section 274 [8 U.S.C. § 1324] (relating

to bringing in and harboring certain aliens) ... if the act

indictable under such section of such Act was committed

for the purpose of financial gain”. 18 U.S.C. § 1961(1)(F).

Plaintiffs contend that, for financial gain (a reduction in

the wages it must pay), IBP brings in and employs illegal

aliens, violating 8 U.S.C. § 1324(a)(3)(A) and thus, deriva-

tively, RICO. (Section 274(a)(3)(A) makes it a crime to hire

more than 10 persons in any 12-month period “with actual

knowledge that the individuals are aliens described in

subparagraph (B)”. Subparagraph (B) reads: “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.”)

Two courts of appeals have held that similar allega-

tions present claims that must be resolved on the merits.

See Commercial Cleaning Services, L.L.C. v. Colin Service

Systems, Inc., 271 F.3d 374 (2d Cir.2001); Mendoza uv.

Zirkle Fruit Co., 301 F.3d 1163 (9th Cir.2002). Without

citing either decision, the district court nonetheless dis-

missed the suit for want of subject-matter jurisdiction, see

Fed.R.Civ.P. 12(b)(1), on the ground that it is a labor

dispute in disguise and must be presented to the NLRB.

See 2002 WL 31696701, 2002 U.S. Dist. LEXIS 24669, 171

L.R.R.M. 2355 (C.D.Ill. Oct.21, 2002). The district court

App. 4

relied principally on San Diego Building Trades Council v.

Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959).

Because Commercial Cleaning Services was commenced by

a competitor rather than an employee, Garmon was not

relevant to its disposition. But the plaintiffs in Mendoza

were employees; that decision cannot be distinguished so

easily — though for reasons that we discuss later it matters

that the labor force in Mendoza was not unionized, while

IBP’s staff not only has an exclusive bargaining represen-

tative but also works under a collective bargaining agree-

ment.

Subject-matter jurisdiction is the first question, as it

must be in all suits filed in federal court. The district

judge described Garmon as creating a rule of preemption

and held that, because the labor laws preempt RICO,

there is no federal jurisdiction. This reasoning is hard to

follow. Federal statutes do not “preempt” other federal

statutes, and, though one may repeal another implicitly if

they are irreconcilable, RICO was enacted after the

National Labor Relations Act. Federal laws do preempt

state laws, but preemption is a defense and thus does not

affect subject-matter jurisdiction. Caterpillar Inc. uv.

Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d

318 (1987); Gully v. First National Bank, 299 U.S. 109,

116, 57 S.Ct. 96, 81 L.Ed. 70 (1936).

Garmon held that state law may not regulate conduct

arguably protected or arguably forbidden by federal labor

laws. That is a genuine doctrine of preemption, with a

jurisdictional overlay: federal labor law so occupies the

field of labor relations that it is impossible to formulate a

claim under state law. See Avuco Corp. v. Machinists

Workers, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126

(1968). This misleadingly named doctrine of “complete

Nm i CN whe ates he Crate RN! ARAL sith 5

App. 5

preemption” has jurisdictional significance in the sense

that federal law’s dominance allows removal under 28

U.S.C. § 1441(b) without regard to diversity of citizenship.

See Beneficial National Bank v. Anderson, 539 U.S. 1, 123

S.Ct. 2058, 156 L.Ed.2d 1 (2003). Yet plaintiffs filed their

case in federal court, exactly where the doctrine of “com-

plete preemption” directs litigants. Federal courts are

authorized to hear many labor-relations disputes by 29

U.S.C. § 185, and others by the federal-question jurisdic-

tion. See Teamsters v. Troha, 328 F.3d 325 (7th Cir.2003).

RICO is a federal statute, and a claim based on it there-

fore arises under federal law for purposes of 28 U.S.C.

§ 1331.

Applied to claims in federal court, and arising under

federal law, Garmon has nothing to do with either pre-

emption or subject-matter jurisdiction. It is a rule of

primary jurisdiction, allocating to an administrative

agency the first crack at certain matters. See, e.g.,

Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 49-50,

119 S.Ct. 292, 142 L.Ed.2d 242 (1998). And the doctrine of

primary jurisdiction is implemented by abstention — which

means by staying rather than dismissing the litigation.

See, e.g., Arsberry v. Illinois, 244 F.3d 558, 563-64 (7th

Cir.2001). Once the agency has completed its work, the

parties return to court for the resolution of any remaining

issues. Here, for example, if the dispute were referred to

the NLRB, and the Board determined that labor law

neither protected nor prohibited IBP’s conduct, the litiga-

tion could resume. Dismissal for want of subject-matter

jurisdiction was inappropriate.

IBP has filed a cross-appeal, arguing that the district

court’s decision should be one on the merits (and thus with

App. 6

prejudice to renewal later) rather than for lack of jurisdic-

tion. Yet although dismissal under Rule 12(b)(1) was

inappropriate, it does not follow that decision should have

been rendered on the merits; abstention in favor of the

Labor Board’s primary jurisdiction remains an option that

must be considered.

Garmon and its successors are principally about the

relation between state and federal policy, but the doctrine

applies even in federal-question cases that include issues

within the Labor Board’s charge. See Laborers Health &

Welfare Trust v. Advanced Lightweight Concrete Co., 484

U.S. 539, 552, 108 S.Ct. 830, 98 L.Ed.2d 936 (1988). We

applied this principle in Talbot v. Robert Matthews Dis-

tributing Co., 961 F.2d 654, 662 (7th Cir.1992), to hold

that a RICO action based on predicate acts that also

violate federal labor law is incompatible with the NLRB’s

role in implementing labor policy. But it was vital in

Talbot that “the underlying conduct of the plaintiffs’ RICO

claim [was] wrongful only by virtue of the labor laws”

(tbid.; emphasis in original), something that cannot be

said of plaintiffs’ claim here. Section 274 of the Immigra-

tion and Nationality Act is not one of the federal labor

laws; it post-dates the National Labor Relations Act and is

in some respects incompatible with it. Although aliens

may be “employees” for purposes of the NLRA, see Sure-

Tan, Inc. v. NLRB, 467 U.S. 883, 892, 104 S.Ct. 2803, 81

L.Ed.2d 732 (1984), those without proper visas do not

receive the same benefits under the NLRA as persons

whose employment is lawful. See Hoffman Plastic Com-

pounds, Inc. v. NLRB, 535 U.S. 137, 122 S.Ct. 1275, 152

L.Ed.2d 271 (2002). When the predicate offenses of a

particular claim under RICO are federal crimes other than

transgressions of the labor laws, no dispute falls within

| i i i

App. 7

the Labor Board’s primary jurisdiction, even if labor

relations turn out to be implicated in some other fashion.

See, e.g., United States v. Palumbo Brothers, Inc., 145 F.3d

850, 861-63 (7th Cir.1998). If the predicates are state

offenses that themselves would be preempted by Garmon,

then invoking those laws indirectly through RICO does not

evade that doctrine; but if the predicate acts are offenses

that could be prosecuted directly (as charges under 8

U.S.C. § 1324 could be) without any Garmon problem,

then it is difficult to see why invoking RICO in quest of

treble damages gives the Labor Board a role.

Je 6h ASAE IO ih Aa Nabe ea lia

How could a pattern of violating § 274 (the underlying

) activity that plaintiffs allege) be “arguably protected” or

“arguably prohibited” by § 7 or § 8 of the National Labor

Relations Act? IBP does not contend that hiring illegal

aliens is even “arguably” protected by the NLRA. Nor does

the NLRA prohibit or regulate the employment of aliens

(see Sure-Tan); it is immigration law, not the NLRA, that

distinguishes among categories of visa and thus deter-

mines which non-citizens are authorized to work. Accord-

ing to IBP, what is “arguably prohibited” by § 8(a)(5) of the

NLRA, 29 U.S.C. § 158(a)(5), is a failure to bargain with

the union. “Failure to bargain in good faith” is the best

classification of the activities alleged in plaintiffs’ com-

plaint, IBP insists. Yet employers must treat with unions

only about mandatory subjects of collective bargaining,

and then only at the union’s request. See Ford Motor Co. v.

NLRB, 441 US. 488, 99 S.Ct. 1842, 60 L.Ed.2d 420 (1979).

Whether to hire illegal aliens is not a mandatory subject of

bargaining; employers need not dicker with unions about

which federal crimes to commit! Anyway, the union

representing workers at IBP’s Joslin facility has not asked

to bargain about this subject, and it is not even arguably a

MI ey nelle Bao 8 0a) Rasirtek Oia. tials AA Beso Heed cadee Roam Bator ae teen al liane oe

App. 8

violation of the NLRA to refrain from bargaining about a

subject that neither employer nor union wants to negoti-

ate. In the absence of a request to bargain and a refusal to

do so, no one could file a charge with the NLRB; in the

absence of a (potential) charge the Board lacks primary

jurisdiction of the dispute. Perhaps there could be room for

bargaining between IBP and its unions over ancillary

subjects, such as the precautions IBP takes when recruit-

ing workers and evaluating the credentials applicants

proffer. Yet plaintiffs do not contend that the union

representing workers at Joslin has asked to bargain over

this subject and been rebuffed; and if it had tried in vain

to bargain, the union itself would be the aggrieved party.

It, and not individual workers, would be the right party to

file a charge that IBP had committed an unfair labor

practice.

What IBP tries to characte~ize as a potential dispute

about the bona fides of its bargaining strategy really has

nothing to do with negotiations and everything to do with

substance. The complaint alleges that IBP has expanded

the pool of available labor and thus depressed the price

that labor can command. When supply rises and demand

is constant, price falls. Employers and unions bargain in

the shadow of supply and demand; they do not bargain

about what supply and demand will be. IBP concedes that

the NLRB has never concluded that an employer violated

the Act by expanding the supply of labor and thus depress-

ing wages, or that the employer has any duty to bargain

about efforts to augment the supply of labor. Employers

regularly line up additional help; they may, for example,

recruit and train persons who will serve as permanent

replacements if the union strikes. This supply-expanding

activity is lawful, see NLRB v. Mackay Radio & Telegraph

= anhsehtnainianmendaeanaaeeaa

App. 9

Co., 304 U.S. 333, 345-46, 58 S.Ct. 904, 82 L.Ed. 1381

(1938), and employers need not bargain with unions about

it. Nor need employers bargain about other acts, such as

closing plants and moving operations to places where labor

is cheaper, that expand the effective size of the labor pool.

See First National Maintenance Corp. v. NLRB, 452 U.S.

666, 101 S.Ct. 2573, 69 L.Ed.2d 318 (1981) (adding,

however, that the employer must_bargain about what

happens to employees dismissed in the closure).

To see the limited effect of Garmon on activity that

affects the size of the labor pool, and thus the outcome of

bargaining over wages, consider claims under the anti-

trust law that particular activities have unduly raised (or

depressed) the price of labor and of goods made with that

labor. Most arrangements between labor and management

are protected from antitrust challenge by § 6 of the Clay-

ton Act, 15 U.S.C. § 17, and a “nonstatutory exemption” to

the Sherman Act. See Brown v. Pro Football, Inc., 518 U.S.

231, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996). But some -

remain open to contest, see Connell Construction Co. v.

Plumbers Union, 421 U.S. 616, 95 S.Ct. 1830, 44 L.Ed.2d

418 (1975), and the Supreme Court has never thought that

antitrust challenges to labor arrangements are forbidden

by the Garmon doctrine because they arise from, or may

affect, bargaining between unions and employers. Quite

the contrary, the Court held in Connell that Garmon does

not interfere with antitrust claims just because “labor law

questions [may] emerge as collateral issues in suits

brought under independent federal remedies”. 421 U.S. at

626, 95 S.Ct. 1830. If Garmon does not block contentions

that reduction of supply had driven the price of labor too

high, it does not block contentions that seeking out new

supply has driven the price too low. Many federal statutes

App. 10

require courts to resolve issues that touch on labor rela-

tions. Consider ERISA: pension and welfare benefits often

turn on the interpretation or validity of collective bargain-

ing agreements, questions that courts resolve without the

Labor Board’s assistance. See, e.g., Central States Pension

Fund v. Gerber Truck Service, Inc., 870 F.2d 1148 (7th

Cir.1989) (en banc); Moriarty v. Larry G. Lewis Funeral

Directors Ltd., 150 F.3d 773 (7th Cir.1998). Just so with a

claim under RICO.

Garmon preemption is only part of the battle for

plaintiffs, however. Their wages were set by a collective

bargaining agreement; the wages of persons working at

the Joslin plant today are determined under a collective

bargaining agreement. This suit is at its core about the

adequacy of the wages IBP pays, and, if the NLRB is out,

it still does not follow that plaintiffs are entitled to repre-

sent all of the other workers. They have a representative —

one that under the NLRA is supposed to be “exclusive”

with respect to wages, see 29 U.S.C. § 159(a) — their union.

Individual workers may step into the union’s shoes only if

it has violated its duty of fair representation. See Vaca v.

Sipes, 386 U.S. 171, 186, 87 S.Ct. 903, 17 L.Ed.2d 842

(1967). Yet the complaint does not name the union as a

party and does not contend that the union neglected its

duty to represent the employees’ interests with respect to

wages.

Unless something went seriously wrong with the

union’s representation of the workers, IBP as the employer

is not only entitled but also legally required to pay at the

rates specified by the collective bargaining agreement.

Without the union as a party, the litigants could not settle

this suit for higher hourly pay (or back pay) — that would

be a real refusal on IBP’s part to bargain with its union —

App. 11

nor could the judge order IBP to increase its rate of pay.

Yet it is only financial relief that plaintiffs seek. As ex-

employees, they could obtain nothing else. (Normally

equity will not enjoin the commission of a crime, such as

future violations of § 274. Whether RICO creates an

exception to this rule in private litigation is a question

that has divided the circuits, and that the Supreme Court

did not resolve in Scheidler v. National Organization for

Women, Inc., 537 U.S. 393, 123 S.Ct. 1057, 154 L.Ed.2d

991 (2003).) Plaintiffs have not established the foundation

for displacing the union as their representative with

respect to wages. We don’t say that this is impossible — for

all we know, the union may be controlled by persons not

authorized to work in the United States and may be

pursuing a policy of expanding employment opportunities

for those similarly situated — but only that plaintiffs have

not tried.

Lest this be taken as an invitation to add the union as

a party and start it anew as a hybrid RICO/DFR suit, we

add that there is another fatal problem in this complaint:

specification of the “enterprise.” Section 1962(c) makes it

“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”. For

purposes of this section, the “person” must be IBP, the

only defendant. But how is IBP conducting the affairs of

an enterprise through a pattern of racketeering activity?

The complaint alleges that the “enterprise” is IBP plus the

persons and organizations who help it find aliens to hire.

We may assume that this congeries is a “group of indi-

viduals associated in fact although not a legal entity” (18

App. 12

U.S.C. § 1961(4)) — though the complaint comes perilously

close to alleging that IBP plus its agents and employees is

the “enterprise,” a theory that won’t fly. See Bucklew v.

Hawkins, Ash, Baptie & Co., 329 F.3d 923, 934 (7th

Cir.2003). And it is not altogether clear how this “associa-

tion in fact” has a common purpose, an essential ingredi-

ent. See United States v. Turkette, 452 U.S. 576, 583, 101

S.Ct. 2524, 69 L.Ed.2d 246 (1981). IBP wants to pay lower

wages; the recruiters want to be paid more for services

rendered (though IBP would like to pay them less); the

Chinese Mutual Aid Association wants to assist members

of its ethnic group. These are divergent goals.

Even if the congeries is an enterprise, how is it that

IBP operates or manages that enterprise through a pattern

of racketeering activity? The nub of the complaint is that

IBP operates itself unlawfully — it is IBP that supposedly

hires, harbors, and pays the unlawful workers, for the

purpose of reducing its payroll. IBP does not manage or

operate some other enterprise by violating § 274; the

complaint does not allege — and on appeal plaintiffs do not

seek an opportunity to show — that IBP has infiltrated,

taken over, manipulated, disrupted, or suborned a distinct

entity or even a distinct association in fact. Contrast

United States v. Neapolitan, 791 F.2d 489, 500 (7th

Cir.1986). Without a difference between the defendant and

the “enterprise” there can be no violation of RICO. See

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496-97, 105

S.Ct. 3275, 87 L.Ed.2d 346 (1985); Fitzgerald v. Chrysler

Corp., 116 F.3d 225, 227-28 (7th Cir.1997); Haroco, Inc. v.

American National Bank & Trust Co., 747 F.2d 384, 401-

02 (7th Cir.1984), affirmed on other grounds, 473 U.S. 606,

105 S.Ct. 3291, 87 L.Ed.2d 437 (1985).

‘iii.

App. 13

These conclusions enable us to bypass still another

potential problem with plaintiffs’ theory: the difficulty of

establishing that unlawful hiring of aliens caused a

diminution in their wages. RICO provides treble damages

for direct injuries but not remote ones. See Holmes v.

| SIPC, 503 U.S. 258, 112 S.Ct. 1311, 117 L.Ed.2d 532

(1992). Although the ninth circuit concluded in Mendoza

that the injury workers suffer when wages are depressed

by competition from aliens is similar to the kind of injuries

redressed under the antitrust laws, things may not be so

straightforward. An increased supply of labor logically

affects, not just the wages at IBP’s Joslin plant, but wages

throughout the region (if not the country). Workers can

change employers (leaving IBP for higher pay elsewhere),

and this process should cause equilibration throughout the

labor market. Yet plaintiffs’ theory is not that too many

aliens depress wages around Joslin; it is that IBP pays

lower wages than some competitors, and that effect would

be very hard to attribute to particular violations of 8

U.S.C. § 1324(a)(3)(A). Suppose that plaintiffs believed

that IBP has violated the Fair Labor Standards Act by

failing to calculate other workers’ overtime premium;

could plaintiffs obtain damages from IBP even though it

had paid them all that the FLSA requires? Cf. Mid-State

Fertilizer Co. v. Exchange National Bank, 877 F.2d 1333

(7th Cir.1989). Given the other problems in this case,

however, it is unnecessary to decide whether this circuit

will follow Mendoza once the issue must be faced and

resolved.

The judgment is modified from a dismissal for lack of

jurisdiction to a dismissal for failure to state a claim on

which relief may be granted. As so modified, it is affirmed.

App. 14

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF ILLINOIS

DEBORAH BAKER and

RICHARD ENYEART,

individually and on behalf of

all others similarly situated,

)

Plaintiffs, ;

) Case No. 02-4019

)

Vv.

IBP, INC.,

Defendant.

ORDER

(Filed Oct. 21, 2002)

Before the Court is Defendant’s Motion to Dismiss

Pursuant to Rules 12(b)(1) and 12(b)(6). For the following

reasons, Defendant’s Motion To Dismiss Pursuant to Rule

12(b)(1) [#9] is GRANTED. The Motion to Dismiss Pursu-

ant to Rule 12(b)(6) is DENIED as moot. Plaintiffs’ Motion

for Leave to File Newly Decided Supplemental Authority

[#25] is DENIED as moot.

BACKGROUND

Plaintiff Deborah Baker was an employee of Defen-

dant, IBP, Inc. from early 1997 through April 1998.

Complaint § 44. Plaintiff Richard Enyeart was an em-

ployee of Defendant from 1997 through 2001. Complaint

q 44. On March 6, 2002, they filed this class action on

behalf of all persons legally authorized to be employed in

the United States who have been hired within the last

several years by Defendant as hourly wage earners in its

Joslin, Illinois, meat processing facility. Complaint { 1.

lA eA i mG! ee ees 6 eee oe

App. 15

Their Complaint alleges that Defendant knowingly em-

ployed undocumented, illegal immigrants for unskilled

positions at its Joslin facility in an effort to reduce labor

costs by driving down employee wages. Complaint { 16.

Plaintiffs claim that for several years Defendant has

relied upon a large network of recruiters throughout the

world to identify and recruit illegal immigrants to work for

Defendant. Complaint 7 20, 35, 37. Defendant allegedly

pays these recruiters $200-$500 per employee, provides

them with offices, and pays for other business expenses.

Complaint 7 21. In exchange for these benefits, the re-

cruiters must submit to supervision and strict discipline

by IBP. Complaint { 22.

As a result of these activities, IBP allegedly receives a

constant stream of illegal immigrant workers, which

enables it to pay a starting wage of approximately $9 per

hour to both its legal and illegal unskilled employees.

Complaint { 24, 41. Workers in another meat processing

facility approximately 50 miles from Joslin receive a

starting wage of $13 per hour. Complaint J 25, 43. Accord-

ing to Plaintiffs, the differencé between this wage level

and the wages paid by IBP is the direct result of Defen-

dant’s illegal hiring activity. Complaint { 25.

In sum, Plaintiffs claim that they have been injured

through their employment at depressed wages by IBP,

which they claim is a direct, proximate and intended

result of Defendant’s alleged illegal hiring activity. Com-

plaint { 40. Therefore, Plaintiffs have brought this pro-

posed class action pursuant to the Racketeer Influenced

and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961

et seq. Complaint J 5. They assert that Defendant's alleged

activity violates the Immigration and Nationality Act,

App. 16

8 U.S.C. § 1324(a)(1)(B), and constitutes a predicate offense

under RICO. Complaint J 33, 34.

ARGUMENT

Defendant argues that Plaintiffs’ Complaint should be

dismissed pursuant to Rule 12(b)(1) because this Court

lacks subject matter jurisdiction. See Defendant’s Motion

to Dismiss J 2. Defendant claims that at all times relevant

to the Complaint, the wages paid to Plaintiffs were gov-

erned by union contracts. Therefore, Defendant argues,

Plaintiffs’ injury stems from alleged conduct governed by

the National Labor Relations Act (NLRA), and this case

falls within the exclusive jurisdiction of the National

Labor Relations Board (NLRB). In sum, Defendant argues

that Plaintiffs’ RICO claim is preempted.

* Garmon

As the Supreme Court has made clear, “When an

activity is arguably subject to [sections 157 or 158] of the

[NLRA], the States as well as the federal courts must

defer to the exclusive competence of the National Labor

Relations Board....” San Diego Bldg. Trades Council,

Millmen’s Union, Local 2020, Bldg. Material and Dump

Drivers, Local 36 v. Garmon, 359 U.S. 236, 245 (1959).

“Congress did not merely lay down a substantive rule of

law to be enforced by any tribunal competent to apply law

generally to the parties. It went on to confide primary

interpretation and application of its rules to a specific

and specially constituted tribunal. ... Congress evidently

considered that centralized administration of specially

designed procedures was necessary to obtain uniform

application of its substantive rules....” Jd. at 242-43.

App. 17

(quoting Garner v. Teamsters, etc. Union, 346 U.S. 485,

490-91.

As Plaintiffs point out in their Memorandum in

Opposition to IBP’s Motion to Dismiss for Lack of Subject

Matter Jurisdiction, Garmon primarily focused on the

conflict between federal and state law. “[C]ourts have

indicated a hesitation to extend Garmon preemption to

cases involving conflicts between the NLRA and other

federal statutes.” United States v. Palumbo Bros., Inc. 145

F.3d 850, 862 (7th Cir. 1998). Furthermore, “[clongressional

intent behind one federal statute should not be thwarted

by the application of another federal statute if it is possi-

ble to give effect to both laws.” Id.

Nevertheless, the Seventh Circuit Court of Appeals

has also recognized that “[t]he Garmon doctrine is de-

signed to protect the primary jurisdiction of the NLRB”

from federal courts as well as state courts “by providing

the NLRB with exclusive jurisdiction to determine

whether given conduct falls within the NLRA.” Talbot v.

Robert Matthews Distrib. Co., 961 F.2d 654, 659 (7th Cir.

1992) (citations omitted); see Palumbo Bros., Inc., 124 F.3d

at 861 (“as a general rule, the NLRB preempts both

federal and state claims based on conduct that is ‘arguably

prohibited’ under the NLRA”). Thus, the NLRA can

preempt civil RICO claims. See id. at 870-71 (“.. . RICO is

not designed to protect the private rights of employees or

unions; rather, their avenue for relief lies within the scope

of labor grievance procedures or a LMRA lawsuit. If an

employee or union attempts to disguise a legitimate labor

dispute as a RICO claim, we recognize the potential

conflict and appreciate why courts have applied either the

NLRA or § 301 of the LMRA to preempt that civil RICO

claim.”).

App. 18

II. Talbot

While it is true that the predicate acts alleged by

‘Plaintiffs are not wrongful “only by virtue of the labor

laws,” Talbot, 961 F.2d at 662, Plaintiffs’ alleged injury

ceases to exist once the collective bargaining agreement is

considered. Plaintiffs allege that they were injured

“through their employment at depressed wages by IBP.”

Complaint 7 40. If these wages were set by the collective

bargaining agreement negotiated by Plaintiffs’ union as

Defendant claims, however, then Plaintiffs no longer have

any injury to complain of in this case.

Damages are an essential element of a RICO claim, as

is causation. Lujan v. Defenders of Wildlife, 504 U.S. 555,

560-61 (1992). Once the collective bargaining agreement is

considered, Plaintiffs can no longer allege damages, or if

they can, they must first allege that Defendant’s illegal

hiring activity was a proximate cause of their injury

because it infected the collective bargaining process. Once

this necessary step is taken, the claim is preempted by the

NLRA. Section 158(d) of that Act provides, “[T]o bargain

collectively is the performance of the mutual obligation of

the employer and the representative of the employees to

... confer in good faith with respect to wages.” 29 U.S.C.A.

§ 158(d) (1998). Plaintiffs must allege that Defendant

failed to collectively bargain in good faith, and therefore

that the wages agreed to in the collective bargaining

agreement were the unlawful product of an unfair labor

practice, or Plaintiffs will not be able to prove that they

were damaged by Defendant’s conduct, and they will not

have standing under RICO. See Holmes v. Sec. Investor

Protection Corp., 503 U.S. 258, 268 (1992) (holding that

standing under RICO requires a showing that the defen-

dant’s conduct was a “but-for” cause as well as a proximate

App. 19

cause of the plaintiff’s injury). Failing to bargain collec-

tively in good faith is proscribed by section 158 of the

NLRA, and “[w]hen an activity is arguably subject” to that

section “of the Act, the States as well as the federal courts

must defer to the exclusive competence of the National

Labor Relations Board.” Garmon, 359 U.S. at 245.

Plaintiffs correctly assert that “where a federal

statute independently proscribes the conduct as well as

the NLRA, the NLRA does not preclude enforcement of

that statute.” United States. v. Boffa, 688 F.2d 919 (3rd

Cir. 1982), quoted in Talbot, 961 F.2d at 662. Plaintiffs

apply this rule of law to Defendant’s alleged illegal hiring

practices, and argue that since the Immigration Act and

RICO proscribe this conduct, which has nothing to do with

the NLRA, preemption does not apply.

This Court finds that Plaintiffs’ focus is misplaced.

Preemption under the NLRA in this case does not stem

form Defendant’s alleged illegal hiring practices, but

rather from Plaintiffs’ allegation that they were injured by

depressed wages. In order for Plaintiffs to prove damages

in the form of depressed wages, they must first allege that

Defendant bargained in bad faith. Without this allegation,

Plaintiffs cannot show that they suffered depressed wages,

since there is no allegation that Defendant did not pay the

wages agreed to in the collective bargaining agreement.

Once this necessary allegation is made, preemption is

inevitable, because failing to exercise good faith in collec-

tive bargaining is wrongful “only by virtue of the labor

laws.” Talbot, 961 F.2d at 662.

App. 20

III. Rule 12(b)(6) Motion Distinguished

Plaintiffs correctly assert that if this Court were to

consider the collective bargaining agreement proffered by

Defendant as part of its Rule 12(b)(6) Motion to Dismiss

For Failure to State a Claim, the 12(b)(6) Motion would be

converted into a Rule 56 Motion for Summary Judgment.

Rule 56 does not, however, govern a Rule 12(b)(1) motion

when the Court looks beyond the complaint. Crawford v.

United States, 796 F.2d 924, 928 (7th Cir. 1986); Osborn v.

United States, 918 F.2d 724, 729 (8th Cir. 1990). As Judge

Posner stated in Crawford,

We are not being nitpickers in insisting on the

difference between a jurisdictional determination

and summary judgment. The purpose of sum-

mary judgment is to determine whether a trial

can be averted... . But no case can properly go to

trial if the court is not satisfied that it has juris-

diction. ... The jurisdictional issue must be re-

solved first. [citation omitted]. The omission from

the Federal Rules of Civil Procedure of a provi-

sion for converting a Rule 12(b)(1) motion into a

summary judgment motion if evidence is submit-

ted with it was not an oversight.

Crawford, 796 F.2d at 928; see Osborn, 918 F.2d at 729 (“It

is ‘elementary,’ ... that a district court has ‘broader power

to decide its own right to hear the case than it has when

the merits of the case are reached.’ [citation omitted] ...

Moreover, because jurisdiction is a threshold question,

judicial economy demands that the issue be decided at the

outset rather than deferring it until trial, as would occur

with denial of a summary judgment motion.”).

In sum, this Court is free to consider materials —

including the affidavit of IBP’s Complex Personnel Manager

App. 21

and the collective bargaining agreements governing the

Joslin facility from November 29, 1996 through March 5,

2006 — in determining whether it has subject matter

jurisdiction over Plaintiffs’ claims. See Osborn, 918 F.2d at

730.

IV. Summary Proceedings are Reasonable in this

Case

When a defendant believes the trial court lacks

jurisdiction, the “proper course is to request an evidentiary

hearing on the issue.” Crawford, 796 F.2d at 928. Oral

testimony may not be required if affidavits and other

documents are submitted. Jd. The Court may treat the

summary judgment procedures in Rule 56 “loosely as a

form of trial by affidavit,” looking “to those procedures for

guidance in organizing a documentary inquiry into juris-

diction.” Id. “No format is specified by statute or rule for

evidentiary hearings on jurisdiction; any rational mode of

inquiry will do. {citation omitted]. But the upshot must be

a decision by the district court on jurisdiction — not a

decision that there is or is not enough evidence to have a

trial on the question.”

Applying this rule, this Court finds that there is no

genuine issue of material fact regarding whether Plain-

tiffs’ wages were set through collective bargaining. The

exhibits proffered by Defendant clearly show that at all

times relevant to the Complaint, Plaintiffs’ wages were

governed by the collective bargaining agreements. See

Defendant’s Memorandum in Support of its Motion to

Dismiss for Lack of Subject Matter Jurisdiction, Exhibits 1

and 2. In their Memorandum in Opposition to IBP’s

Motion to Dismiss for Lack of Subject Matter Jurisdiction,

App. 22

Plaintiffs do not deny that their wages were governed by

the agreement. Rather, they argue that, “even assuming

the authenticity of the collective labor agreements submit-

ted by IBP in support of its motion, those agreements have

nothing to do with this case and provide this Court with no

basis for dismissing Plaintiffs’ claims.” Plaintiffs’ Memo-

randum at 4 n.6. In these circumstances, this Court may

conclude that there is no triable issue regarding whether

Plaintiffs’ wages were controlled by the agreements. See

Crawford, 796 F.2d at 930.

Although Defendant did not formally request an

evidentiary hearing on the issue of jurisdiction, it did

submit an affidavit and documentary evidence, and

Plaintiffs did reply. The Seventh Circuit has determined

that “there is no set form for determining a contested issue

of jurisdiction,” and “[a] summary proceeding without oral

testimony is fine if reasonable in the circumstances.” Jd. In

this case, a summary proceeding is reasonable given the

uncontested force of the collective bargaining agreements.

Therefore, even accepting all of Plaintiffs’ well-

pleaded facts as true and drawing all reasonable infer-

ences in Plaintiffs’ favor (See Massey v. Wheeler, 221 F.3d

1030, 1033 (7th Cir. 2000), this Court finds that Plaintiff’s

wages are governed by collective bargaining agreements

with Defendant, that Plaintiffs will not-be able to prove

damages in the form of depressed wages without attacking

the collective bargaining process, and therefore that

Plaintiffs’ claim is preempted by the NLRA. See 29

U.S.C.A. § 158(d). Because Plaintiffs cannot prove an

essential element of their RICO claim (i.e., damages)

without invoking preemption under the NLRA, dismissal

pursuant to Rule 12(b)(1) for lack of subject matter juris-

diction is appropriate.

App. 23

CONCLUSION

For the foregoing reasons, Defendant’s Motion to

Dismiss Pursuant to Rule 12(b)(1) [#9-1] is GRANTED.

Defendant’s Motion to Dismiss Pursuant to Rule 12(b)(6)

[#9-2] is DENIED as moot. Plaintiffs’ Motion for Leave to

File Newly Decided Supplemental Authority [#25] is

DENIED as moot. This case is dismissed without preju-

dice.

ENTERED this 21st day of October, 2002.

/s/ Michael M. Mihm

Michael M. Mihm

United States District Judge

App. 24

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF ILLINOIS

ROCK ISLAND DIVISION

DEBORAH BAKER and RICHARD

ENYEART, individually and on behalf

of all others similarly situated,

Plaintiffs, No. 02-4019

Vv.

IBP, Inc., a Delaware Corporation

Defendant.

COMPLAINT

(Filed Mar. 6, 2002)

I. NATURE OF ACTION

1. This is a class action brought on behalf of all

persons legally authorized to be employed in the United

States (“U.S.”) who have been employed by defendant IBP,

Inc. (IBP), one of the world’s largest producers of fresh

beef and pork-related beef products, as hourly wage

earners in its Joslin, Illinois meat processing facility

during the last four years.

2. The Complaint contends that all such persons

have been victimized by a scheme perpetrated by IBP to

depress the wages paid to its employees by knowingly

hiring a workforce substantially comprised of undocu-

mented illegal immigrants for the express purpose of

depressing wages (hereafter “the Illegal Immigrant Hiring

Scheme”).

3. IBP perpetrates the Illegal Immigrant Hiring

Scheme through a complex and highly disciplined network

App. 25

of recruiters throughout the world, who obtain illegal

immigrants, provide for their transportation to the U.S.,

housing in the U.S., documentation and other necessities

of life so that they can be employed and exploited by IBP

at depressed wages.

4. While the work at IBP’s Joslin plant is grueling

and extremely dangerous, IBP avoids paying what would

otherwise be market wages to its employees as a result of

IBP’s perpetration of the Illegal Immigrant Hiring

Scheme.

5. The Illegal Immigrant Hiring Scheme violates the

Racketeer Influenced and Corrupt Organizations Act, 18

U.S.C. § 1961 et seg. (RICO) and has directly and proxi-

mately caused the wages paid to plaintiffs and the class

members to be substantially depressed, 1.e., below the

level other meat processors in the surrounding area pay

their employees, below the level in the area other employ-

ers of unskilled workers pay their employees, and well-

below the wages that IBP would have to pay to attract a

workforce composed entirely of lawful workers.

Il. PARTIES AND JURISDICTION

6. Plaintiffs Deborah Baker (“Baker”) and Richard

Enyeart (“Enyeart”), U.S. citizens, were employed by IBP’s

Joslin, Illinois facility.

7. IBP is a corporation organized under the laws of

the state of Delaware with its principal place of business

in South Dakota. As alleged below, it has committed a

pattern of racketeering activity in this district.

App. 26

8. This Court has subject matter jurisdiction over

this case pursuant to 28 U.S.C. § 1331 and 18 U.S.C.

§ 1964(a).

Ill. CLASS ALLEGATIONS

9. This action is brought and may be maintained as

a class action pursuant to Fed. R. Civ. P. 23(b)(2) and (3).

Plaintiffs bring this action on behalf of themselves and all

other persons, legally authorized to be employed in the

U.S., who have been employed by IBP at its Joslin, Illinois

facility (“the Class”).

10. The Class for whose benefit this action is brought

is so numerous that joinder of all Class members is im-

practicable... The actual number can only be ascertained

through discovery of IBP’s books and records.

11. Among the questions of fact and law that are

common to the Class are:

e Whether IBP is engaging in the Illegal Im-

migrant Hiring Scheme;

¢ Whether IBP is doing so in order to depress

its employees’ wages;

e Whether the Illegal Immigrant Hiring

Scheme has caused employees’ wages to be

depressed;

e Whether IBP conducts the Illegal Employ-

ment Hiring Scheme through its worldwide

network of recruiters,

e Whether the Illegal Immigrant Hiring

Scheme violates the Immigration and Na-

tionality Act and RICO; and

App. 27

e Whether IBP should be enjoined from con-

ducting further racketeering activity and

further association with its network of re-

cruiters.

12. Plaintiffs’ claims are typical of those of the Class

in that they arise from the damages they have suffered as

a result of the Illegal Immigrant Hiring Scheme. Plaintiffs

seek no relief that is antagonistic to or adverse to other

Class members.

13. Plaintiffs are committed to the vigorous prosecu-

tion of this action, and have retained counsel who are

competent in the prosecution of class actions, RICO and

complex litigation. Accordingly, Plaintiffs will fairly and

adequately protect and represent the interests of the

Class.

14. Questions of law or fact common to the Class

predominate over issues affecting individual Class mem-

bers. Therefore, a class action is the only appropriate

method for the fair and efficient adjudication of this

controversy for the following reasons, among others:

e The individual amounts of damages in-

volved, while not insubstantial, are gener-

ally not large enough to justify individual

actions;

e The costs of individual actions would unrea-

sonably consume the amounts that would be

recovered;

e Individual actions would unduly burden the

judicial system; and

e Individual actions brought by Class mem-

bers would create a risk of inconsistent

App. 28

results and would be unnecessarily duplica-

tive of this litigation. -

15. Plaintiffs anticipate no difficulty in the

management of this action because the evidence

proving the Illegal Immigrant Hiring Scheme is

ascertainable through discovery, the identities of the

Class members are known to IBP and damages can be

calculated to a reasonable certainty through expert

testimony.

IV. STATEMENT OF OPERATIVE FACTS

A. The Illegal Immigrant Hiring Scheme: Years

of Racketeering Activity

16. For at least the last several years, IBP, which

claims to employ over 50,000 workers, has aggressively

engaged in an effort to reduce labor costs by driving down

employee wages. Its primary strategy for doing so is the

knowing employment of undocumented, illegal immigrants

for unskilled positions in its processing facilities.

17. Illegal immigrants, because of their impover-

ished economic state, their desperate need for employment

and their illicit presence in this country, tend to work for

wages significantly below what a labor market comprised

of U.S. citizens would pay.

18. They can also be exploited in other ways as well.

Owing to their constant fear of apprehension by law

enforcement authorities, IBP’s illegal immigrant workers

tolerate deplorable workplace conditions and do not file

worker’s compensation claims when they are injured on

the job.

App. 29

19. IBP’s efforts at worker exploitation have been so

successful that, as one investigative journalist found, the

company has been able to “set the industry standard for

low wages and poor working conditions.”

20. However, IBP is unable to attract large numbers

of illegal immigrants to work for the company on its own.

Consequently, it relies upon a large network of recruiters

throughout the world to identify qualified candidates for

low wage unskilled labor, induce them to work for the

company and often provide assistance in transportation to

one of IBP’s facilities, housing once there and other ameni-

ties.

21. IBP typically pays its recruiters $200-$500 per

employee, often provides them with offices in their com-

munities, and pays for other business expenses.

92. In exchange for these benefits, recruiters must

submit to a regimen of strict discipline set by IBP. This

regimen requires recruiters to carefully screen candidates

so as [sic] employ only those with personality traits consis-

tent with IBP’s desired worker profile; typically, these are

illegal immigrants who feel vulnerable, submissive, have

little knowledge of the U.S. legal system and a pressing

need for immediate employment. IBP enforces this profile

by sending its employment personnel to meetings of

prospective employees at the recruiters’ offices. At these

meetings, the IBP employees conduct oversight of the

recruiters’ prospective candidates and reject candidates

who do not fit the profile. Recruiters who do not produce

quality candidates have their pay cut, are disciplined by

IBP or are terminated.

93. IBP instructs its recruiters to coach illegal

immigrant workers to: (i) deny, if asked, that they have

App. 30

been smuggled into the U.S.; and (ii) credibly present

verification documents to IBP which both the recruiters

and IBP know are falsified (and are typically supplied by

the recruiter), all in an elaborate scheme to hide the illegal

employment activity. Many such illegal immigrants are

recruited in Morocco, and have their passage into the U.S.

paid for by the recruiter. The recruiter then aids and abets

their unlawful entry into the country where they are hired

by IBP at employment “fairs” in New York City, Chicago

and other locations.

24. The result is that IBP receives a constant stream

of illegal immigrants seeking immediate employment.

These workers accept unskilled positions at a starting

wage of approximately $9/hour, no questions asked.

25. However, workers in another meat processing

facility in the area receive a starting salary of approxi-

mately $13.00 per hour. The difference between this wage

level and the wages paid by IBP is the direct result of the

success of the Illegal Immigrant Hiring Scheme.

26. IBP employment personnel, including Mary

Baylor at the Joslin, Illinois facility, hire these illegal

immigrants with a wink and a nod, knowing they are

being presented with falsified documents in order to

establish work eligibility, including documents bearing

names of former IBP employees who have left the com-

pany, green cards which have been purchased in IBP’s

parking lot (with her knowledge), non-existent social

security numbers (which could be verified with a simple

phone call to the INS), Illinois drivers licenses and state

ID’s which are obviously falsified, and other blatantly false

documents.

App. 31

27. Another IBP manager told a worker he knew to

be illegal that he would be hired if he purchased a birth

certificate and obtained an “Iowa ID.”

28. The Joslin IBP facility has frequently been

raided by the Immigration and Naturalization Service

(INS). In one 1997 raid the INS apprehended 142 sus-

pected illegal immigrants and returned 128 (voluntarily)

back to Mexico the following day.

29. Since then, IBP has managed to obtain advance

notice of INS inspections, and leaks word of the impending

inspection. On inspection day, approximately half its

workers are absent. (Other illegal workers, who were not

tipped off, have hidden in frigid meat lockers for up to

three hours, putting their lives at risk). Nevertheless, IBP

happily takes the absent workers back the following day,

no questions asked — even though IBP knows they fled

from the INS.

30. Frequently, IBP rehires workers under a differ-

ent name and social security number after the INS has

informed IBP that the workers are illegal immigrants.

31. Plaintiffs are not aware of the precise number of

illegal immigrants IBP employs at its Joslin facility, but

on information and belief Plaintiffs allege that the number

employed is over 250 per year, year in and year out, since

the knowing employment of illegal immigrants became a

RICO predicate offense in 1996. Plaintiffs believe ap-

proximately half of IBP’s approximately 2000 workers at

the Joslin plant are illegal immigrants, and the vast

majority were hired by IBP with actual knowledge of their

illegal status and further, with knowledge that they were

smuggled into the U.S. and harbored in the U.S.

App. 32

32. Additionally, the act of knowingly employing an

illegal immigrant constitutes harboring such person, and

each time IBP knowingly hires an illegal immigrant

and/or provides such person with housing, it harbors that

person from detection.

V. THE RACKETEERING ACTS

33. In order to perpetrate the Illegal Hiring Scheme,

IBP has knowingly hired illegal workers that it knows to

have been harbored and/or smuggled, in violation of

§ 274(a)(3) of the Immigration and Nationality Act (“the

Act”), which provides that: “Any person who, during any

12-month period, knowingly hires for employment at least

10 individuals with actual knowledge that the individuals

are aliens ... shall be fined under Title 18, or imprisoned

for not more than 5 years, or both.” 8 U.S.C. § 1324(a)(1)(B).

Plaintiffs believe and thereon allege that IBP has commit-

ted at least ten violations of the Act in each year since

1996, with actual knowledge that each individual hired

was smuggled into the U.S. and harbored once here, and

that its violations are ongoing, continuous and will not

stop without judicial intervention.

34. The violation of the Act is one of the predicate

offenses under RICO. 18 U.S.C.§ 1961(1)(F).

VI. THE RICO ENTERPRISE

35. As detailed above, IBP has formed an ongoing

association with its many recruiters throughout the world

for the purpose of executing an essential aspect of the

Illegal Immigrant Hiring Scheme, the identification and

recruitment for employment of illegal immigrants who are

App. 33

willing to be exploited by IBP. IBP could not successfully

conduct the Illegal Immigrant Hiring Scheme without this

enterprise, and its success in executing the Scheme for

several years is the result of the discipline and single-

mindedness it brings to this disparate group scattered

throughout the world. Through IBP’s management tech-

niques, the group has functioned as a unit for years and

continues to supply IBP with the illegal workers it needs

to depress workers’ wages at the Joslin, Illinois facility.

36. Additionally, the recruiters permit IBP to shift

responsibility for much of the illegal activity to others,

thereby using the enterprise as a front to facilitate more

racketeering activity than it could possibly commit on its

own.

37. For example, the Chinese Mutual Aid Associa-

tion in Chicago is an IBP front organization. It combines

both legitimate functions, offering services to newly-

arrived immigrants, with illicit recruiting functions for

IBP. IBP benefits from the large number of vulnerable

immigrants (many illegal and undocumented) who pass

through the organization’s office, as it has a full-time IBP

recruiter working on the premises distributing IBP em-

ployment applications. When that recruiter has gathered a

significant number of “acceptable” candidates for IBP

employment, he contacts IBP’s employment office in

Chicago. IBP sends an employment operative to the

Chinese Mutual Aid Association office for a meeting at

which IBP screens the candidates. If IBP approves of the

recruiters’ selections, IBP completes the employment

process at the Chinese Mutual Aid Association and makes

arrangements for the illegal immigrants to be bused as

soon as possible to Joslin, Illinois, where IBP arranges for

App. 34

temporary housing, thereby conducting pre-employment

harboring of the illegal workers.

38. This association of IBP and its recruiters consti-

tutes an association-in-fact enterprise affecting interstate

or foreign commerce pursuant to 18 U.S.C. § 1961(4).

However, the recruiters have existences apart from their

affiliation with IBP. As stated, they conduct both legiti-

mate and illicit activities. The illicit activities, facilitating

IBP’s Illegal Immigrant Hiring Scheme, are concealed and

separated from their legitimate activities.

39. As stated above, IBP, a “person” within the

meaning of RICO, has committed a pattern of racketeering

activity (the Illegal Immigrant Hiring Scheme) through

the association-in-fact enterprise with its recruiters since

1996. Section 1962(c) of RICO makes it illegal “[flor any

person ... associated with any enterprise . . . to conduct or

participate, directly or indirectly, in the conduct of such

enterprise's affairs ... through a pattern of racketeering

activity.”

40. Plaintiffs and Class members have been dam-

aged in their business and property rights through their

employment at depressed wages by IBP. These injuries are

the direct, proximate and intended result of the Illegal

Immigrant Hiring Scheme, which is targeted at IBP’s

employees. These injuries were the intended and foresee-

able consequence of the Illegal Immigrant Hiring Scheme

and are compensable pursuant to Section 1964(c) of RICO.

41. There is only one reason for IBP’s perpetration of

the Illegal Immigrant Hiring Scheme: IBP knows that the

Illegal Immigrant Hiring Scheme drives down the wages

paid to all the workers at its Joslin facility.

App. 35

42. As intended, the Illegal Immigrant Hiring

Scheme has driven the wages paid to the legal workers at

the Joslin plant well below the wages they would other-

wise be receiving.

43. For example, workers at another meat process-

ing plant approximately 50 miles from Joslin receive

starting wages of approximately $4 (four) dollars an hour

more than workers at the Joslin IBP plant. Upon informa-

tion and belief, that plant, Farmland Foods of Monmouth,

Illinois, does not knowingly hire illegal immigrants in

order to drive down wages, and that crucial fact accounts

for the difference in wages paid by the two meat proces-

sors.

VII. PLAINTIFFS’ EMPLOYMENT BY IBP

44. Plaintiff Deborah Baker, a U.S. citizen, was

employed to work at IBP’s Joslin, Illinois facility from

early 1997 through April 1998.

45. Baker was paid hourly wages of $7-9 dol-

lars/hour, which rate was depressed as a result of the

Illegal Immigrant Hiring Scheme.

46. Plaintiff Richard Enyeart, a U.S. citizen, was

employed at IBP’s Joslin, Illinois facility from 1997

through 2001 at wages varying between $7/hour and

$9.42/hour, which at all times were depressed as a result

of the Illegal Immigrant Hiring Scheme.

App. 36

VIII. PRAYER FOR RELIEF

Plaintiffs demand judgment and other relief as fol-

lows:

A. Certification of the Class pursuant to Fed. R. Civ.

P. 23(b)(3);

B. Judgment in an amount equal to three times the

damage caused the putative Class by IBP’s racketeering

activity/the Illegal Immigrant Hiring Scheme, pursuant to

18 U.S.C.§ 1964(c);

C. Preliminary and permanent injunctions enjoining

IBP from any further racketeering activity or any further

association with its recruiters;

D. Appropriate attorney’s fees, pursuant to 18 U.S.C.

§ 1964;

E. Trial by jury, pursuant to Fed. R. Civ. P. 38;

F. For any other relief the Court deems just and

proper.

DATED: March 5, 2002.

Deborah Baker and

Richard Enyeart

By /s/ Robert K. Leyshon

Robert K. Leyshon

Winstein, Kevensky

& Wallace

224 18th St.

4th Floor

Rock Island, IL 61204

(309) 794-1515

App. 37

Steve W. Berman

Andrew M. Volk

Hagens Berman LLP

1301 Fifth Avenue,

Suite 2900

Seattle, WA 98101

(206) 623-7292

Howard W. Foster

Johnson & Bell, Ltd.

55 E. Monroe St.,

Suite 4100

Chicago, IL 60603

(312) 372-0770

Attorneys for Plaintiffs

App. 38

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

April 30, 2004

Before

Hon. JOEL M. FLAuUM, Chief Judge

Hon. FRANK H. EASTERBROOK, Circuit Judge

Hon. KENNETH F. RIPPLE, Circuit Judge

DEBORAH BAKER and Appeals from the

RICHARD ENYEART, United States District

Plaintiffs-Appellants, Court for the Central

Cross-Appellees, District of Illinois.

Nos. 02-3967 & 02-4065 v. | No. 02-4019.

IBP, INC., Michael M. Mihm,

Defendant-Appellee, Judge.

Cross-Appellant.

Order

Plaintiffs-appellants filed a petition for rehearing and

rehearing en banc on February 18, 2004. No judge in

regular active service has requested a vote on the petition

for rehearing en banc, and all of the judges on the panel

have voted to deny rehearing. The petition for rehearing is

therefore DENIED.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.