Opposition Brief — Mohawk Industries, Inc. v. Williams (No. 06-873)

In The

Supreme Court of the Gni

- @

MOHAWK INDUSTRIES, INC.,

Petitioner,

A

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE

JONES, and LORA SISSON, Individually

and on behalf of a class,

Respondents.

Sd

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Eleventh Circuit

*

BRIEF IN OPPOSITION TO THE

PETITION FOR CERTIORARI

HOWARD FOSTER JOHN E. FLOYD*

JOHNSON & BELL, LTD. JOSHUA F. THORPE

33 West Monroe Street RONAN P. DOHERTY

Suite 2700 NICOLE G. LANNARONE

Chicago, Illinois 60603 BONDURANT, MIXSON

(312) 372-0770 & ELMORE, LLP

3900 One Atiantic Station

BoBBY LEZ CooK

CooK & CONNELLY 1201 W. Peachtree Street, N.W.

9899 Commerce Street ae her ge 30309

P.O. Box 370

Summerville, Georgia 30747 Counsel for Respondents

(706) 857-3421

MATTHEW THAMES

GODDARD, THAMES,

HAMMONTREE & BOLDING

2716 Cleveland Highway

P.O. Box 399

Dalton, Georgia 30722-0399

(706) 278-0464

January 22, 2007 *Counsel of Record

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page

RR I CIEE EOE vinccscesiasorscnsaiciestinidecsimamcnatiniad i

Keds OF PAF RRA vecnsébtomsekitesvineewsestisbiseieiaian ii

SOTA POEs BIE sinsnseviatevisnnilsiansienenibeuisianiadisertabaataiin 1

REASONS FOR DENYING THE PETITION ............... 1

I. The Court Need Not Grant Certiorari To

Review Last Term’s Decision in Anza v. Ideal

Steel Supply Corporation ..........ccccsssesessseceseeeseees 2

A. The Eleventh Circuit Faithfully and Cor-

BOC AROS AAG. ccisiccssceccccessescerenvssersseesia 3

B. There Is No Circuit Split Over Anzza........... 7

I]. The Court Has Already Concluded It Would Be

a Mistake to Review the Enterprise Questions

Presented in Mohawk’s Petition ..................00006 9

A. The Circuit Courts Have Unanimously

Confirmed That Corporations Can Be

Members of Association-in-Fact Enter-

SUEUOG: .cssissenietsusdépiedeasesebudivncihleeacapeaiiatudie 12

B. Cedric Kushner Resolved Any Division of

Authority Over Whether a Corporation

and its Legally Distinct Agents Can Form

Oi AF BID svicciiipciatncttivenisevsicvaataatan 13

III. The Petition’s “Business or Property” Ques-

tions Are Not Presented In This Case................ 17

IV. The Court Should Decline to Review this

[esterbocwtiny GeO? ccinccssesessseccssosesaconteivoontensaxonte 20

CAIDA LAT D IN si ovcrenssiseennicsintotmempunijenemecadaliamatanes 22

TABLE OF AUTHORITIES

Page

CASES

Adarand Constructors, Inc. v. Pena, 515 U.S. 200

EERE ERR CT Sa a oN ED 7

Am. Constr. Co, v. Jacksonville, T:; & K.W. Ry. Co.,

TE IT srs itse sla ce ppmenindeiadiocoveneoesevenrtenvin’ 21

Am. Nat'l Bank & Trust Co. v. Haroco, Inc., 473

iii ines acaniahconcesisheneeeemelbconinciiavueaeneas 11

Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991

Ea itis sdidiniarensineeibecteustneeeditanenvonseonbsien passim

Associated General Contractors v. California State

Council of Carpenters, 459 U.S. 519 (1983)............0ee 6

Atlas Pile Driving Co. v. DiCon Fin. Co., 886 F.2d

eo seumennesuenseeeuie 13, 14

Baker v. IBP, Inc., 357 F.3d 685 (7th Cir. 2004) ............... 16

Board of Regents v. Roth, 408 U.S. 564 (1972)..............4. 19

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

a a aunemintineternie 16

Cedric Kushner Promotions, Ltd. v. King, 533 U.S.

TD i vacscinsdunidaeucienssnoveeviehocorsersvoesesevenss 13, 14, 15, 16

Copperweld Corp. v. Independence Tube Corp., 467

a acasenddunnens 15, 16

Cullen v. Margiotta, 811 F.2d 698 (2d Cir. 1987).............. 15

DeCanas v. Bica, 424 U.S. 351 (1976) ...........ccccceeeeeseseees 5,6

Diaz v. Gates, 470 F.3d 897 (9th Cir. 2005) (en banc)....... 18

ili

TABLE OF AUTHORITIES — Continued

Page

Dickinson v. Petroleum Conversion Corp., 338 U.S.

POPE RIT sccinnlinsgscsiccinnientesinasiiontiniedbaltasetsmdeiinidaiapiiisttadian 21

Doe v. Roe, 958 F.2d 763( 7th Cir. 1992)...........cccccsecessenees 18

E.I, Dupont De Nemours & Co., 431 F.3d 353 (9th

Sie SIT ch picirtaleeiisssiithiasitcainiiadieatipteaiintnlecmanibleebdianaaasioeadieaiesiiadic 17

Estelle v. Gamble, 429 U.S. 97 (1976)...........cccccccesseeeseeeees 21

Evans v. City of Chicago, 453 F.3d 916 (7th Cir.

ee stk vcsuscehdniieaseneiverintasoasbvlabbiaatiiapaaedninaiees 17, 18, 19

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

SINITED sntrstiissinbainseliidesdatinupicetiitiiuepnaniiaipeiiaimusiatacridiaastiae, 15

Gillespie v. U.S. Steel Corp., 379 U.S. 148 (1964)............ 21

Gilliard v. Mississippi, 464 U.S. 867 (1983).............:0eeeeeee 9

Gonzales v. Duenas-Alvarez, 127 S. Ct. ___ (Jan. 17,

SOE I sisciesisnicveiennsccasieandinleuiastlahichouiddntaapenaliutebiichisaadiembiinies 11

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240

Shei Me © dr UD iaineiiscioneh uibelencdbienaesidetindeteinisdiepuncaapianiierinentes 21

Hoffman Plastic Compounds, Inc. v. NLRB, 535

Fee Bae IE divkceieieseeradineiciccicnciah deiiin eeerecaciniamnahceasmumnnt 6

Holmes v. SIPC, 503 U.S. 258 (1902) .......ccccccccscsvcsccccssecese 6

James Cape & Sons Co. v. PCC Constr. Co., 453

Fe ie CR Be Picersnicentscniiiabenideiiiskelnbesinsinaenteemenial 8

Living Designs, Inc. v. E.I. Dupont De Nemours &

Co., 431-F.3d 353 (Sth Cir. 200B).......cccccccsssssseveseceees 16,17

McCray v. New York Fruit Co., 461 U.S. 961 (1983) .......... 9

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

iv

TABLE OF AUTHORITIES - Continued

Page

Mohawk Industries, Inc. v. Williams, 126 S. Ct.

EE TE Aiciiniaeihacnsicnsstenihsbicauddiudinhelce Nbcndisencloniakaiake 1,2,9

Norfolk Southern Ry Co. v. Sorrells, 127 S. Ct. __

Ns Sits SUN OD scskahs dc cichaterehansheahdicn ialecaislcnlidsita deaiabiionnctepinietpaladiide 11

NOW v. Scheidler, 510 U.S. 249 (1994) .......cccsesscssesessseeeees 11

Reiter v. Sonotone Corp., 442 U.S. 330 (1979)...........c00000 18

Riverwoods Chappaqua Corp. v. Marine Midland

Bank, N.A., 30 F.3d 339 (2d Cir. 1994) ............c000e0e 15, 16

Ross v. Moffitt, 417 U.S. 600 (1974)..............ee heihaablincaaateaea 4

Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984)............:cecccee 6

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

TI: Aan IUI ccinsncccancecimicdnceaascdic Saacidascteiegmanis Aiecadedainie i besibdedaaaaaieatamanisians 7

Trollinger v. Tyson Foods, Inc., No. 4:02-CV-23,

2006 WL 2868980 (E.D. Tenn. Sept. 29, 2006)........... 7,8

United States v. Blinder, 10 F.3d 1468 (9th Cir.

IT ccccssaninehicdadetecuietseleaimaicbdihedicancumuiupiiohaseammiacaniaine 13

United States v. Console, 13 F.3d 641 (3d Cir. 1993)........ 12

United States v. Feldman, 853 F.2d 648 (9th Cir.

MII iscsi cssicitcss cium cisasiieiesillclaciiareie apatite ctian ti caia l 15

United States v. Goldin Indus., 219 F.3d 1271 (11th

es Fe cctctestnlssteebibinicasintibcdickebtabianaisibiiiisisteonibdaisustsncmieas 14

United States v. Huber, 603 F.2d 387 (2d Cir. 1979)........ 12

United States v. Johnston, 268 U.S. 220 (1925) ................. 8

United States v. London, 66 F.3d 1227 (1st Cir.

TO PL I RTC eae Ia 12, 15

TABLE OF AUTHORITIES -— Continued

f Page

United States v. Perholtz, 842 F.2d 343 (D.C. Cir.

BEET ii psschcetetsinincingientenssiuassaccepholeeddbdgvedianarinstoennersesiive 13

United States v. Thevis, 665 F.2d 616 (5th Cir.

SPUN ci siudstndidtsvindesdiatabipseetshoudibincsadowwesdsetbintesueaeaiieda 13

STATUTES AND REGULATIONS

BRT 8 HER sirih ini apesidcaiobliodmabtitizeel 9,12

Rae re IE ccteitcharehhivicandaqakouaiiceoncbatanooinlbooncns 11, 13, 14

i PRLS. Me RIND ass Lids casnddnsnadpandooncuswrubiodiiendoieian passim

Fie ae TIO) sic icckiandivdndansnssacseiveaasavtadaneieidssiiaaaes 5

RULES

Ns BO asad snc scectiscetbauabidsadieibsseseuacediecdaanian 21

RE Rc SENN BE sicoccedovonsaxiinniscnisdapiiaaniideiadietensoaaativaaienaitiods 1

TREATISES

Robert L. Stern & Eugene Grossman, Supreme

Court Practice § 4.17 at 256 (8th ed. 2002).................008 4

David B. Smith & Terrance G. Reed, Civil RICO,

PP PREAS CUPP Rhes passe sntgiiiideaczvcknmbicansicncmacabecideae neta 5,18

SCHOLARLY AUTHORITIES

John Paul Stevens, Some Thoughts on Judicial

Restraint, 66 Judicature 177 (1982) ...........cccceceseseeeeserees 9

INTRODUCTION

This is Mohawk Industries, Inc.’s second Petition for a

writ of certiorari to review a 2004 district court decision

denying a motion to dismiss the plaintiffs’ federal RICO

claims. After an interlocutory appeal to the Eleventh

Circuit Court of Appeals, this Court granted certiorari last

Term to consider some of the enterprise questions Mohawk

reiterates in this second Petition. But after full briefing

and oral argument, the Court concluded that it had made

a mistake by granting certiorari and dismissed the writ as

improvidently granted. See Mohawk Industries, Inc. v.

Williams, 126 S. Ct. 2016 (2006), reproduced at Pet. App.

31a. The Petition offers the Court no reason to revisit that

decision or this case a second time.

,

vy

REASONS FOR DENYING THE PETITION

The Petition argues that the Eleventh Circuit’s

decision in Williams v. Mohawk Industries, Inc., 465 F.3d

1277 (11th Cir. 2006) (“Williams ITI”) raises three separate

questions worthy of this Court’s review. In truth, none of

the Questions Presented meets the Court’s guidelines for

granting certiorari. See Sup. Ct. Rule 10. Moreover, it is

worth recalling that Mohawk’s prior Petition, in Case No.

05-465, raised virtually all of the substantive issues that

Mohawk now presses in this second Petition. Although

Mohawk frames the first Question Presented as the proper

application of a decision from last Term, that question

merely subsumes and recycles the same proximate cause

2

arguments Mohawk raised in its initial Petition.’ Simi-

larly, the enterprise issues collected under the second

Question Presented repeat the arguments this Court

considered but declined to address when it dismissed

certiorari last Term.’ And although Mohawk has added a

third Question Presented concerning the definition of an

injury to business or property under 18 U.S.C. § 1964(c),

even that issue was presented in Mohawk’s initial Peti-

tion.’ Having already devoted substantial resources to this

case only to dismiss the initial grant of certiorari as

improvident, the Court should decline to review the case a

second time.

I. The Court Need Not Grant Certiorari To Re-

‘view Last Term’s Decision in Anza v. Ideal Steel

Supply Corporation.

First, Mohawk argues that the Court should grant

certiorari to address the Eleventh Circuit’s application of

Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006).

Rather than admit that it seeks this Court’s review to

' Compare Petition for a Writ of Certiorari at 18-23 (No. 05-465)

(hereinafter “2005 Pet.”) (plaintifffs failed to plead a direct and proxi-

mate injury to business or property) with Petition for a Writ of Certio-

rari at 10-16 (No. 06-873) (hereinafter “Petition” or “Pet.”) (same

argument under Anza).

* Compare 2005 Pet. at 10-18 (seeking certiorari to review whether

corporations and their agents may form an association in fact enter-

prise) and Br. of Pet. at 12-26, Mohawk Indus., Inc. v. Williams, 126

S. Ct. 2016, 2006 WL 282167 (2006) (No. 05-465) (arguing that corpora-

tions cannot be members of association-in-fact enterprises) with Pet. at

16-24 (reciting the same two arguments).

* Compare 2005 Petition at 19-21 (arguing that wage depression

cannot qualify as an injury to business or property) with Pet. at 24-28

(same argument).

3

correct the alleged misapplication of a properly stated rule

of law, Mohawk contends that Williams II both (1) ignores

Anza and (2) creates an immediate circuit split over the

very same decision. Of course, these contentions cannot

both be true; and in fact, Mohawk is wrong on both counts.

A. The Eleventh Circuit Faithfully and Cor-

rectly Applied Anza.

The Petition contends the Eleventh Circuit thumbed

its nose at this Court’s direction to further consider Wil-

liams v. Mohawk Industries, Inc., 411 F.3d 1252 (11th Cir.

2005) (“Williams I”) in light of Anza.‘ Even though Wil-

liams II cites Anza more than ten times,” Mohawk con-

tends the court of appeals “ignored” Anza’s central holding

“that RICO civil plaintiffs must plead an injury directly

caused by the RICO predicate acts and not by another ‘set

of actions ... entirely distinct from the alleged RICO

violation.’” Mohawk further claims that the Eleventh

Circuit ignored Anza’s holding that the “central question”

in evaluating a RICO plaintiffs allegations of injury is

“whether the alleged RICO violation led directly to the

plaintiff's injuries.”” But Williams II acknowledges and

applies those very holdings. Indeed, the Eleventh Circuit

began its proximate cause discussion by quoting Anza’s

“central question” for analyzing causation in a civil RICO

case and then underscored Anza’s emphasis that there “must

be ‘some direct relation’ between the injury alleged and the

* See, e.g., Pet. at 16 (Eleventh Circuit “faill[ed] to heed Anza in the

wake of this Court’s explicit instruction to do so”).

* See Williams II, Pet. App. at 14a-21la.

* Pet. at 3.

” Td. at 12.

4

injurious conduct in order to show proximate cause.” The

court of appeals then went on to examine the list of addi-

tional “motivating principle[s]” precisely as Anza in-

structs.’

As the losing party below, Mohawk obviously takes

great issue with the Eleventh Circuit’s conclusion in this

case. But given the court of appeals’ extensive and accu-

rate quotation of Anza, there can be no genuine contro-

versy over whether Williams II properly states the rule of

law announced in Anza. Accordingly, even if Mohawk were

correct (which it is not) and the Eleventh Circuit had

committed some technical error in applying Anza (which it

did not), certiorari is unwarranted because this Court “is

not primarily concerned with the correction of errors in

lower court decisions.”” To the contrary, Supreme Court

Rule 10 expressly provides that the writ will not be

granted to review the purported misapplication of a

properly stated rule of law. And in Ross v. Moffitt, 417 U.S.

600, 616-17 (1974), the Court explained that its discre-

tionary review “depends on numerous factors other than

the perceived correctness of the judgment we are asked to

review.” (emphasis added)

In any event, Mohawk’s criticisms of the Eleventh

Circuit’s application of Anza miss the mark. Anza held

that the defendant’s fraud on the State of New York tax

* Williams II, Pet. App. at 14a-15a.

* Id. at 15a-16a. Mohawk’s suggestion that Williams II defies Anza

by referring to the Respondents’ allegation that Mohawk intended to

injure them refers to the Eleventh Circuit’s standing analysis, not its

proximate cause analysis under Anza. See Pet. at 14.

Robert L. Stern & Eugene Grossman, Supreme Court Practice

§ 4.17 at 256 (8th ed. 2002).

5

authority did not cause a third party any injury cognizable

under RICO.” As the Court observed, the State — not the

defendant’s competitor — was the direct victim of this

misconduct.” As a result, the Anza Court held the plaintiff

could not recover damages for lost sales due to the defen-

dant’s decision to lower the prices it charged its custom-

ers."

As Williams II explains, the claims here are very

different because the plaintiffs do not seek to recover

damages for fraud (or any other misconduct) directed at

other parties.“ Rather, the plaintiffs allege they are the

direct victims of Mohawk’s illegal hiring and other racket-

eering activity, which directly and unlawfully expands the

pool of labor available to Mohawk and depresses the wages

Mohawk pays all its employees.” Protecting the wages and

working conditions of legal workers has been the primary

motivating factor behind the nation’s immigration laws for

at least a century.” And this Court’s precedents repeatedly

" See Anza, 126 S. Ct. at 1997.

* Id.

* Td.

* Williams II, Pet. App. at 16a-21a.

© See, e.g., Compl. 4 33-38, Pet. App. at 91a-93a.

© See H.R. Rep. No. 1365, 82d Congress, 2d Sess. at 10, 1952

U.S.C.C.A.N. 1653, 1662 (1952). See also S. Rep. No. 44-689, at IV-V

(1877) (noting Congressional conclusion that competition from foreign

workers depressed wages to “ruinously low rates”); House Comm. on

the Judiciary, 100th Cong., Grounds for Exclusion of Aliens Under the

Immigration and Nationality Act: Historical Background and Analysis

at 8 (Comm. Print 1988) (same), H.R. Rep. No. 98-115, pt. 1 at 95-96

(1983) (“IHegal immigration ... depresses the wages and working

conditions of low-skilled workers in this country, and reduces their

employment opportunities”), S. Rep. No. 99-132 at 16 (1985) (“we seek

to eliminate the illegal subclass now present in our society.... Their

(Continued on following page)

6

recognize the innate, direct connection between hiring

undocumented aliens and depressed wages for American

workers.”

To better fit Anza’s mold, the Petition mischaracter-

izes the Complaint to allege an injury passed on from one

category of employees to another.” This distortion — which

must be rejected on a motion to dismiss — actually under-

scores that the plaintiffs are the only direct victims of the

criminal conduct alleged. In Anza and its predecessor,

Holmes v. SIPC, 503 U.S. 258 (1992), the Court held that

the injuries alleged were not direct because there was a

“more immediate victim” to vindicate the statute’s pur-

poses.” Because the plaintiffs are the direct victims of

Mohawk’s racketeering activity, Anza does not require

dismissal. The only other court to consider Anza in the

illegal status and resulting weak bargaining position cause [undocu-

mented workers] to depress U.S. wages and working conditions”).

Indeed, it is for this reason that the Department of Labor must certify

that hiring certain foreign workers will not have “an adverse effect” on

the wages, terms and benefits of U.S. workers. 20 C.F.R. § 656.24(b x3).

See DeCanas v. Bica, 424 U.S. 351, 356-57 (1976) (“acceptance by

illegal aliens of jobs on substandard terms as to wages and working

conditions can seriously depress wage scales and working conditions of

citizens and legally admitted aliens”); Sure-Tan, Inc. v. NLRB, 467 U.S.

883, 893 (1984); Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S.

137, 147 (2002).

* See Pet. at 12-13 (arguing that the plaintiffs’ injuries are

derivative of conduct that Mohawk directs at other parties).

See Anza, 126 S.Ct. at 1998 (“[t]he requirement of a direct

causal connection is especially warranted where the immediate victims

of an alleged RICO violation can be expected to vindicate their laws by

pursuing their own claims.”); Holmes, 503 U.S. at 273. See also Assoct-

ated General Contractors, Inc. v. California State Council of Carpenters,

459 U.S. 519, 541 (1983) (identifying alternative plaintiffs with more

direct claims). Compare Pet. at 15 n.10 (arguing that the lack of any

direct victim is irrelevant under Anza).

context of similar illegal hiring allegations reached the

very same conclusion.”

Although Mohawk argues that Williams II defies this

Court’s June 5, 2006 GVR order, the Court did not direct

the Eleventh Circuit to dismiss the Complaint. The Court

has explained that a GVR is appropriate when it is “not

certain that the case [is] free from all obstacles to reversal

on [the] intervening precedent.” Such an order merely

indicates that the Court believes the intervening prece-

dent is “sufficiently analogous and, perhaps, decisive to

compel reexamination of the case.” As a result, the

Court’s GVR is not the functional equivalent of a summary

reversal, as the Petition argues. The Eleventh Circuit

complied with this Court’s direction and its application of

Anza provides no basis for a second grant of certiorari.

B. There is No Circuit Split Over Anza.

Nor did Williams I] create an immediate circuit split

over the proper application of Anza. Only two courts have

considered Anza’s impact on the proximate cause theory

alleged here, and bcth concluded that allegations of hiring

large numbers of undocumented workers are not “entirely

* See Trollinger v. Tyson Foods, Inc., No. 4:02-CV-23, 2006 WL

2868980 (E.D. Tenn. Sept. 29, 2006) (declining to certify an interlocu-

tory appeal aft.r denying the defendants’ motion for judgment on the

pleadings based on Anza). Accord Trollinger v. Tyson Foods, Inc., 370

F.3d 602, 619 (6th Cir. 2004) (pre-Anza case upholding the same

allegations of proximate cause); Mendoza v. Zirkle Fruit Co., 301 F.3d

1163, 1172 (9th Cir. 2002) (same).

** Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 222-23 (1995).

* United States v. Vanorden, 414 F.3d 1321, 1327 n.4 (11th Cir.

2005) (citing Henry v. City of Rock Hill, 376 U.S. 776, 776-77 (1964)).

8

distinct from” the injury of depressed wages for legal

workers.” As a result, there is no split of authority for this

Court to review.

The only conflict between Williams II and the Seventh

Circuit’s decision in James Cape & Sons Co. v. PCC

Construction Co., 453 F.3d 396 (7th Cir. 2006) is the

difference between the facts and claims alleged in the

respective complaints. In James Cape, the plaintiff sought

to recover RICO damages for lost profits on bids it alleg-

edly failed to win as a result of a bid-rigging scheme that

targeted a third party, the Wisconsin Department of

Transportation.“ That scheme directly injured the De-

partment, which had to make inflated payments to the

winning contractors. Following Anza, the Seventh Circuit

held that this more immediate victim “was fully capable of

pursuing appropriate remedies much like the State of New

York.”” Rather than a circuit split, therefore, Mohawk has

merely identified two different sets of facts for which Anza

compels two different results. Even if Mohawk (incor-

rectly) contends James Cape illustrates some problem with

the Eleventh Circuit’s analysis of this Complaint, that

type of fact-specific inquiry into the application of a

precedent that is less than a year old is not the type of

issue that typically concerns this Court.”

* See Williams II, Pet. App. at 14a-21a; Trollinger v. Tyson Foods,

Inc., No. 4:02-CV-23, 2006 WL 2868980, at *3-4 (E.D. Tenn. Sept. 29,

2006) (declining to certify an interlocutory appeal after denying the

defendants’ motion for judgment on the pleadings based on Anza).

* James Cape & Sons, 453 F.3d at 404.

eer

* See, e.g., United States v. Johnston, 268 U.S. 220, 227 (1925)

(“We do not grant a certiorari to review evidence and discuss specific

(Continued on following page)

9

II. The Court Has Already Concluded It Would Be

a Mistake to Review the Enterprise Questions

Presented in Mohawk’s Petition.

Last Term, the Court afforded Mohawk full briefing

and oral argument on all the enterprise issues collected

under the second Question Presented in Mohawk’s Peti-

tion. But rather than reach the merits of those questions,

the Court dismissed the writ as improvidently granted.”

That ruling came after the Court discovered Mohawk had

expressly waived its primary merits argument in the lower

courts. Because this second Petition seeks to revive the

same arguments the Court discarded last Term, certiorari

is even less appropriate now.

Mohawk first introduced the argument that a corpora-

tion cannot be a member of an association-in-fact RICO

enterprise pursuant to 18 U.S.C. § 1961(4) in its merits

brief in this Court last Term. For two years before that

filing, Mohawk had argued that corporations could be

members of such enterprises. In 2004, Mohawk told the

district court that: “Specifically, Mohawk agrees that a

corporation can be both a RICO person and part of

facts.”)} McCray v. New York, 461 U.S. 961, 963 (1983) (denying

certiorari because the question required further study in the lower

courts), Gilliard v. Mississippi, 464 U.S. 867, 869 (1983) (indicating

that certiorari was denied because a majority believed Supreme Court

review should be deferred urti] “more state supreme courts and federal

circuits have experimented” with the problem) (Marshall, J., dissent-

ing). See also John Paul Stevens, Some Thoughts on Judicial Restraint,

66 Judicature 177, 183 (1982) (“The doctrine of judicial restraint

teaches us that patience in the judicial resolution of conflicts may

sometimes produce the most desirable result.”).

* Mohawk, 126 S. Ct. at 2016.

10

an association-in-fact enterprise{.!™ And Mohawk

subsequently informed the Eleventh Circuit that its

arguments were perfectly consistent with RICO liability

for corporations that participated in the affairs of an

association-in-fact enterprise:

Indeed, rothing in Mohawk’s rule would af-

fect the RICO liability of a corporation that

truly participates in some larger association

of corporations or (non-agent) individuals

by engaging in racketeering activities on the en-

terprise’s behalf.”

Based on these concessions and Mohawk’s failure to

preserve the antecedent question of whether a corporation

can form an association-in-fact enterprise, the Court

questioned whether it properly could reach any of Mo-

hawk’s enterprise arguments at last Term’s oral argu-

ment.” In response, Mohawk’s counsel conceded Mohawk’s

failure to preserve the issue and urged the Court to

overlook that defect in its appeal.” But after devoting

substantial time to hearing the case, the Court declined to

reach the merits of Mohawk’s enterprise arguments in this

case.

* See Mohawk Dist. Ct. Reply Br. at 5 (emphasis added) (Dist. Ct.

Dkt. No. 43].

* Mohawk’s 11th Cir. Reply Brief at 11 n.8 (filed Nov. 5, 2004)

(emphasis added). See also Mohawk’s 11th Cir. Br. at 12-13 (filed Sept.

7, 2004) (“This [plaintiff's theory] would be a substantial departure

from current law, which requires that to sufficiently allege a

RICO enterprise, a plaintiff must allege that the enterprise is

comprised of a corporation and a separate, independent third

party.”) (emphasis added).

* See Tr. Oral Arg. at 5-10 (No. 05-465) (Apr. 26, 2006).

” Id. at 10 (suggesting that Mohawk waived the argument because

“current law in the Eleventh Circuit law” rendered it “utterly futile”).

11

This history is relevant here only because Mohawk

cannot correct the procedural defects that led the Court to

dismiss the writ on the very same enterprise questions

that Mohawk recycles in the present Petition. Mohawk is

still bound by the affirmative concessions it made in the

lower courts.” And this Court still does not consider

arguments that a petitioner failed to preserve for appeal.”

In two very recent Opinions, the Court has reaffirmed that

it will not consider arguments the Petitioner has already

conceded and will not rule in the first instance on claims

the lower courts did not consider.”

As discussed below, the Petition does not identify any

enterprise issue worthy of this Court’s attention. But given

the Court’s aversion to deciding questions not properly

“ Mohawk’s attempt to resurrect its enterprise arguments by

seeking an en banc review of the Eleventh Circuit precedents tl at led

Mohawk to concede a corporation can be a member of an association-in-

fact enterprise, see Pet. App. at 8la-83a, is too little too late. Neither

Mohawk’s en banc petition to the court of appeals nor its second

Petition to this Court makes any attempt to explain why Mohawk

should be permitted an about-face to argue the opposite of a position it

advocated for two years in the district court and the court of appeals.

* See, e.g., NOW w. Scheidler, 510 U.S. 249, 262 (1994) (refusing to

consider a constitutiora: ciialienge to RICO that the defendant failed to

raise below); Am. Nat'l Ban# & Trust Co. v. Haroco, Inc., 473 U.S. 606,

608 (1985) (refusing cemsider unpreserved argument that the

complaint failed to allege a violation of 18 U.S.C. § 1962(c)).

* Gonzales v. Duenias-Alvarez, 127 S. Ct. ___, 2007 WL 98723, at *8

(Jan. 17, 2007) (“Regardiess, the lower court did not consider the claims

and we decline to reach them in the first instance”) (collecting authori-

ties); Norfolk Southern Ry. Co. v. Sorrells, 127 S. Ct. , 2007 WL

57176 (Jan. 10, 2007) (rejecting a petitioner’s attempt to “smuggle” an

antecedent question into the merits briefing despite having conceded

the question in the lower courts).

12

developed below, the Court should deny certiorari in this

case even if it did.

A. The Circuit Courts Have Unanimously Con-

firmed That Corporations Can Be Members

of Association-in-Fact Enterprises.

On the merits, Mohawk urges the Court to grant

certiorari and hold that corporztions cannot be members of

association-in-fact enterprises as a matter of law.” At oral

argument last Term and again in the Petition, Mohawk

concedes that the circuit courts have unanimously rejected

this argument.” The courts agree on this point, in spite of

Mohawk’s arguments about isolated snippets of the

statute, because § 1961’s broader structure, as well as the

drafters’ careful use of “includes” rather than “means” in

some but not all the definitions, demonstrates that § 1961(4)

is drawn to be as broadly inclusive as possible. Reading the

statute in context, the circuit courts universally have

held that Mohawk’s argument contradicts the plain

language, leads to absurd results and “makes nonsense of

the statute.”” And although Mohawk claims that all the

* See Pet. at 20-24.

* See Tr. Oral Arg. at 5-6 (No. 05-465) (Apr. 26, 2006) (Justice

Scalia observing that 10 federal circuits have concluded corporations

can be members of association-in-fact enterprises and that the Court

would have been unlikely to grant certiorari to review that question

standing alone); Jd. (Mohawk’s counsel acknowledging the lack of any

split of authority and the unlikelihood of Supreme Court review). Pet.

at 20-22 (acknowledging that the federal courts have universally

rejected Mohawk’s antecedent enterprise argument).

” United States v. Huber, 603 F.2d 387, 394 (2d Cir. 1979). See also

United States v. Masters, 924 F.2d 1362, 1366 (7th Cir. 1991); United

States v. London, 66 F.3d 1227, 1243-44 (1st Cir. 1995) (citing extensive

authority); United States v. Console, 13 F.3d 641, 652 (3d Cir. 1993);

(Continued on following page)

13

circuit courts have made a grave error that perniciously

extends RICO’s reach into “ordinary commercial activity,”

Congress has never amended the statute to immunize

corporations in the manner Mohawk proposes. Moreover,

in its amicus brief to the Court last Term, the United

States opposed Mohawk’s construction of the statute and

argued that it would “significantly impair the govern-

ment’s ability to enforce the statute’s substantive provi-

sions and to obtain effective remedies.”” The Court should

not grant certiorari to reconsider a statutory construction

that has been well-settled for decades only to make non-

sense of the statute and render RICO useless to goverr-

ment prosecutors as well as civil plaintiffs.

-B. Cedric Kushner Resolved Any Division of

Authority Over Whether a Corporation and

its Legally Distinct Agents Can Form a

RICO Enterprise.

Alternatively, Mohawk urges the Court to resolve a

“deeplening]” and “wid[ening]” circuit split over whether a

corporation and its legally distinct, non-employee agents

can form an association-in-fact enterprise.” But the Court

effectively answered that question in Cedric Kushner

Promotions, Ltd. v. King, 533 U.S. 158 (2001), holding

that 18 U.S.C. § 1962(c) requires nothing more than legal

United States v. Blinder, 10 F.3d 1468, 1473 (9th Cir. 1993); Atlas Pile

Driving Co. v. DiCon Fin. Co., 886 F.2d 986, 995 n.7 (8th Cir. 1989);

United States v. Perholtz, 842 F.2d 343, 352-53 (D.C. Cir. 1988); United

States v. Thevis, 665 F.2d 616, 625 (5th Cir. 1988).

* Pet. at 22.

* Br. for the United States as Amicus Curiae at 16 (05-465).

* Pet. at 16-18.

14

distinctness between the defendant and the RICO enter-

prise. In Cedric Kushner, the complaint named a corpora-

tion as the enterprise and the corporation’s president as

the defendant. Because the defendant was also the corpo-

ration’s sole owner and employee, he sought to dismiss on

the theory that there was no distinction between him and

the alleged enterprise. After acknowledging that the

statute “suggests” the enterprise cannot be “simply the

same ‘person’ [or defendant] referred to by a different

name,” the Court went on to hold that even a formal

distinction satisfied this requirement:

The corporate owner/employee, a natural person,

is distinct from the corporation itself, a legally

different entity with different rights and respon-

sibilities due to its different legal status. And we

can find nothing in the statute that requires

more “separateness” than that."

Even though the owner/employee was clearly a corporate

agent, alleged to be acting in furtherance of the corpora-

tion’s interests, this Court held that the defendant and his

corporation were separate enough to satisfy § 1962(c)’s

implied distinctness requirement.”

" Cedric Kushner, 533 U.S. at 163 (emphasis added).

“ In Cedric Kushner, the corporation was the enterprise, not a

member of a larger association in fact. But including the RICO person

in a broader association in fact enterprise is entirely consistent with

Kushner’s distinctness analysis because “[a] collective entity is some-

thing more than the members of which it is comprised.” Atlas Pile

Driving, 886 F.2d at 995 (concluding that a corporation can be the RICO

defendant as well as a member of a larger association in fact enter-

prise). See also United States v. Goldin Indus., 219 F.3d 1271, 1276

(11th Cir. 2000) (“To find that a defendant cannot be part of the

enterprise would undermine the purposes of the RICO statute”),

(Continued on following page)

15

Mohawk argues that there is a split between the

circuits that have (1) adopted a “distinct entities” test in

accordance with Cedric Kushner and (2) rejected an

enterprise comprised of a corporation plus its employees,

subsidiaries or agents on the grounds that such an entity

“is in reality no more than the defendant itself.’ With

only two exceptions, the cases Mohawk cites to support the

second half of this purported split pre-date Cedric

Kushner. And without exception, those rulings rely on

theories the Cedric Kushner Court unanimously rejected.“

For example, Cedric Kushner specifically disavowed the

argument that the RICO statute requires additional

distinctness because a corporation can only act through its

employees.” The Court similarly held that Copperweld

Corp. v. Independence Tube Corp., 467 U.S. 752 (1984), a

Sherman Act case holding that a corporation cannot

conspire with a wholly-owned subsidiary, has no applica-

tion to RICO.” Accordingly, while the Court’s opinion noted

and distinguished many of the cases that Mohawk now

London, 66 F.3d at 1243; United States v. Feldman, 853 F.2d 648, 658

(9th Cir. 1988); Cullen v. Margiotta, 811 F.2d 698, 729-30 (2d Cir. 1987).

* See Pet. at 18.

“ See Resp. Br. at 44-50 (05-465).

“ Compare Kushner, 533 U.S. at 166-67 with Riverwoods Chappa-

qua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339, 344 (2d Cir.

1994) (“Because a corporation can only function through its employees

and agents, any act of the corporation can be viewed as an act of such

an enterprise.”).

“ Compare Cedric Kushner, 533 U.S. at 166 (Copperweld “doctrine

turns on specific antitrust objectives”) with Fitzgerald v. Chrysler Corp.,

116 F.3d 225, 228 (7th Cir. 1998) (citing Copperweld for proposition that

Chrysler and its wholly-owned distributors could not be held liable

under RICO).

16

recites in its petition, Cedric Kushner’s analysis disman-

tles the analytical underpinnings of those cases.”

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

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

Cir. 2003) are the only post-Cedric Kushner cases Mohawk

can cite for any lingering doubt about the consequences of

Cedric Kushner’s unanimous conclusion that legally

distinct entities are separate enough to serve as the

defendant and enterprise in a RICO case. Because both

Bucklew and Baker fail to acknowledge Cedric Kushner

and instead apply Copperweld despite Cedric Kushner’s

contrary admonition, those cases are wrongly decided.“

And although this Court granted certiorari based on

Mohawk’s Baker arguments last Term, Mohawk made no

effort to defend Baker in its merits briefs. After closely

reviewing the merits of this question last Term, the Court

dismissed certiorari as improvidently granted.

The Petition urges the Court to revisit the question in

this case because Mohawk contends the Ninth Circuit’s

decision to follow Cedric Kushner in Living Designs, Inc. v.

E.I. Dupont de Nemours & Co., 431 F.3d 353, 361 (9th Cir.

2005), further extends the circuit split.“ But Mohawk cited

“ While the United States took no position on this particular point,

the government did oppose Mohawk on the merits and argued that

Mohawk’s reference to the Riverwoods line of cases was a “non sequi-

tur” in this case. See U.S. Amicus Br. at 27-30 (No. 05-465).

“ See Bucklew, 329 F.3d at 934 (citing Copperweld for the proposi-

tion that “A parent and its wholly owned subsidiaries no more have

sufficient distinctness to trigger RICO liability than to trigger liability

for conspiring in violation of the Sherman Act”); Baker, 357 F.3d at 691

(citing Bucklew).

* See Pet. at 18.

17

Living Designs, to this Court in its merits brief last Term,”

months before the Court decided to forego the enterprise

issues presented in this case. The Court also declined to

reach any of the enterprise issues presented in Living

Designs, by denying the writ in that case one week after

dismissing certiorari here.” Accordingly, there has been no

material change in the circuit courts with respect to the

enterprise question the Court dismissed in June 2006. And

Mohawk can offer the Court no reason to reinstate certio-

rari to take up the very same question it declined to reach

~— in either this case or Living Designs — last Term.

Ill. The Petition’s “Business or Property” Ques-

tions Are Not Presented in this Case.

In its third Question Presented, Mohawk urges the

Court to grant certiorari to address two separate issues

concerning the meaning of “business or property” under 18

U.S.C. § 1964(c). The short answer is that neither of these

issues has anything to do with this case.

First, Mohawk argues that the Court should grant

certiorari to resolve a purported circuit split over whether

depressed wages can qualify as an injury to business or

property. Mohawk concedes that several circuits have

concluded that plaintiffs can bring RICO suits to recover

lost wages, but claims the Seventh Circuit created a circuit

split on this question with its decision in Evans vu. City of

Chicago, 434 F.3d 916, 925 (7th Cir. 2006). What the

° See Br. of Pet. at 31, 35 (Feb. 2, 2005) (No. 05-465).

*" See E.I. Dupont de Nemours & Co. v. Living Designs, Inc., 126

S. Ct. 2861 (June 12, 2006).

* See Pet. at 24-25.

18

Petition does not confess, is that Evans expressly distin-

guishes the depressed wage claims made in this very case.

In Evans, the plaintiff sought to recover damages for

income lost because he could not work during a period of

alleged false imprisonment. Like every circuit to consider

the issue, the Seventh Circuit held that the “inability to

pursue or obtain meaningful employment” is a “personal

injury” that cannot be recovered under RICO.” The same

limitation applies to private antitrust suits seeking dam-

ages for injuries to “business or property” under Section 4

of the Clayton Act, on which 18 U.S.C. § 1964(c) is mod-

eled.* Evans cites and follows these authorities, including

precedents from both the Seventh Circuit and Eleventh

Circuits. Accordingly, there is no dispute in these or any

other circuit courts abc:t the proposition of law applied in

Evans.”

* Evans, 434 F.3d at 926 (collecting cases); Doe v. Roe, 958 F.2d

763, 767 (7th Cir. 1992) (“Not surprisingly, all other courts construing

this language have likewise concluded that a civil RICO action cannot

be premised solely upon personal or emotional injuries”) (collecting

authorities) see also, David B. Smith and Terrance G. Reed, Civil RICO,

10.04[{1] (Compensable Injuries) (2006) (“One proposition about RICO

damages which appears to have widespread support is that the

business or property limitation in section 1964(c) does not permit

recovery for personal injuries. This limitation applies to private

antitrust suits under section 4 of the Clayton Act and courts have

similarly construed section 1964(c) in reliance on this interpretation of

section 4”) (internal quotations omitted).

“ See Reiter v. Sonotone Corp., 442 U.S. 330, 339-40 (1979).

“ To be sure, Evans noted a disagreement with Diaz v. Gates, 470

F.3d 897 (9th Cir. 2005) (en banc), cert. denied, 126 S. Ct. 1069 (2006),

but that concerned (1) whether income lost to false imprisonment was a

personal injury and (2) conflicting property rights under state law. See

Evans, 434 F.3d at 931 n.26. Those disagreements are not implicated

(Continued on following page)

19

As Evans recognized, however, not every claim for lost

wages is a claim for personal injury and, in the proper

circumstances, a plaintiff may “recover under RICO for

loss of an employment opportunity.”” To illustrate the

distinction between personal injuries and damages that

qualify as injuries to business or property, the Evans court

cited the Eleventh Circuit’s analysis in this case:

Where an employee is able to establish that he

has been unlawfully deprived of a property right

in promised for or contracted for wages, the

courts have been amenable to classifying the loss

of those wages as injury to “business or property.”

See e.g., Williams v. Mohawk Industries, Inc., 411

F.3d 1252, 1260 (11th Cir. 2005).

Given the Evans court’s apparent agreement with the

Eleventh Circuit’s analysis in Williams I, which is re-

peated verbatim in Williams II, there is no circuit split for

the Court to resolve here.

Mohawk also urges the Court to grant certiorari to

address an opaque dispute over whether “property” may

derive from federal or state law — or both. Section 1964(c)

is presumably broad enough to protect property interests

defined by any source of authority, including federal and

state law.” But whatever the merits or consequences of

here because the Respondents do not allege false imprisonment or

personal injury.

“ Evans, 434 F.3d at 928.

" Id.

“ Even in the takings jurisprudence that Mohawk improperly

seeks to import here, this Court has held that “property” under the

Fourteenth Amendment can be defined by any source, including state

law. See Board of Regents v. Roth, 408 U.S. 564, 577 (1972).

20

this debate, it was neither considered nor resolved in

Williams II. In fact, the Eleventh Circuit specifically

declined to rule on whether depressed wages constitutes

an injury to property under § 1964(c):

We need not reach whether plaintiffs have a

property interest because plaintiffs clearly have

alleged a business interest affected by Mohawk’s

alleged RICO violations.”

This ruling renders any debate over the potential sources

of property interests academic in this case. The Court,

therefore, should not grant certiorari on the Petition’s

third Question Presented.

IV. The Court Should Decline to Review this Inter-

locutory Order.

Finally, the Court should deny Mohawk’s second

Petition because the issues at stake here will be greatly

shaped and illuminated by the evidence. With respect to

both the enterprise and proximate cause issues that

Mohawk advances, the Eleventh Circuit held that the

Respondents had plainly alleged enough to proceed, but

emphasized that they would have to prove their case to

prevail.” Ultimately, the question of whether Mohawk’s

” Pet. App. at 12a. The Petition misrepresents the Complaint by

suggesting the Respondents alleged only an injury to property. See Pet.

at 24. In fact, the Complaint alleges the Respondents and the class

have suffered an injury to both business and property. Pet. App. at 103a

(Compl. ¥ 86).

” See Williams II, Pet. App. at 9a (“Whatever difficulties the

plaintiffs may have in proving such an allegation, they have sufficiently

alleged that Mohawk is engaged in the operation or management of the

emterprise.”), id. at 21a (“Although the plaintiffs’ evidence in this case

eg mot ultimately prove the proximate-cause requirement, we

(Continued on following page)

21

racketeering activity depresses wages for its legal employ-

ees is a question of fact that can only be resolved with

data, factual analysis and expert testimony. These issues,

therefore, are not well-suited to decision as a matter of law

on a motion to dismiss. And even if Mohawk could con-

vince the Court that the Complaint was deficient in some

respect, the plaintiffs would be entitled to seek leave to

amend their allegations, which “should be freely given

when justice so requires.”

For these and other similar reasons, this Court

traditionally has preferred to grant the writ to review final

rather than interlocutory orders.” Because the review of a

non-final order induces inconvenience, litigation costs and

delay in reaching ultimate justice, lack of finality may “of

itself alone” furnish “sufficient ground for the denial of the

application.” More than a century ago, the Court advised

that it would not “issue a writ of certiorari to review a

decree of the circuit court of appeals on an appeal from an

interlocutory order unless it is necessary to prevent

extraordinary inconvenience and embarrassment in

the conduct of the cause.”™ Allowing this case to proceed to

conclude that the plaintiffs’ complaint states a sufficiently direct

relation between their alleged injury and Mohawk’s alleged u. ‘awful

predicate acts to withstand Mohawk’s motion to dismiss.”).

“ Fed. R. Civ. P. 15(a).

© Estelle v. Gamble, 429 U.S. 97, 115 (1976) (the Court’s “normal

practice is to deny[] interlocutory review”) (Stevens, J., dissenting).

* Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251, 258

(1916). See also Gillespie v. United States Steel Corp., 379 U.S. 148,

152-53 (1964).

“ Am. Constr. Co. v. Jacksonville, T. & K.W. Ry. Co., 148 U.S. 372,

384 (1893) (emphasis added). See also Dickinson v. Petroleum Conver-

sion Corp. , 338 U.S. 507, 511 (1950);

22

class and merits discovery — more than three years after

the case was filed — hardly meets that standard.

——_ —_+

CONCLUSION

For the foregoing reasons, the Court should deny

Mohawk’s second Petition for certiorari in this interlocu-

tory appeal.

Respectfully submitted,

HOWARD FOSTER JOHN E. FLOYD*

JOHNSON & BELL, LTD. JOSHUA F. THORPE

33 West Monroe Street RONAN P. DOHERTY

Suite 2700 NICOLE G. IANNARONE

Chicago, Illinois 60603 BONDURANT, MIXSON

(312) 372-0770 & ELMORE, LLP

3900 One Atlantic Station

ee 1201 W. Peachtree Street, N.W.

OOK & CONNELLY .

9899 Commerce Street Atlanta, Georgia 30309

(404) 881-4100

P.O. Box 370

Summerville, Georgia 30747 Counsel of Record

(706) 857-3421 for Respondents

MATTHEW THAMES

GODDARD, THAMES,

HAMMONTREE & BOLDING

2716 Cleveland Highway

P.O. Box 399

Dalton, Georgia 30722-0399

(706) 278-0464

Additional Counsel

for Respondents January 22, 2007

=