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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2006

## Text

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

=

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1933%3A3. Public record. Not legal advice.