RICO-mania.

RICO-mania.

RICO-mania.

Oral argument from the court.
April 26 2006 5:55 PM

RICO-Mania

The Supreme Court contemplates whether illegal hiring is racketeering.

If you have never taken a class with Yale's resident literary wizard, Harold Bloom—and you probably shouldn't if your name is Naomi Wolf—it may be hard to imagine that an entire hour spent deconstructing the difference between the word means and the word includes could be riveting. But riveting it can be, in the hands of the right literary thinkers. And if those thinkers choose to assume, as might Bloom, that every word in every piece of legislation passed by Congress is chosen deliberately and thoughtfully, rather than in the crazed and half-assed manner so often associated with legislative drafting, all the better. Justice Antonin Scalia doesn't pound on the table at oral argument very often. But when he's trying to make the point that the word includes is, in fact, exclusive, he's driven to brute physical violence this morning.

"Words, words, words," said Hamlet. But then look how that turned out.

Dahlia Lithwick Dahlia Lithwick

Dahlia Lithwick writes about the courts and the law for Slate, and hosts the podcast Amicus.

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Former workers at Mohawk Industries, a Georgia-based carpet company, brought a class-action suit against the corporation under RICO, the Racketeer Influenced and Corrupt Organizations Act. RICO is the 1970 statute whose principal object was fighting organized crime. But Mohawk, like Tyson Foods and Wal-Mart, has not been accused of operating speak-easies or shaking down the local dry cleaner. The criminal "enterprise" that it's accused of conducting is contracting with outside recruiting companies to hire illegal immigrants and then cook their work papers. The former employees claim that this both violated immigration laws and artificially depressed their wages.

This case has yet to go to trial on the merits. It's been hung up by appeals over this extremely narrow, almost Talmudic question: Can an enterprise as contemplated by the RICO statute be composed of a corporation and outside recruiters who allegedly conspired to hire illegal workers? The 11th Circuit Court of Appeals agreed with the employees that it could and refused to dismiss the claims. Mohawk appealed.

One of the two issues in the case is a purely textual one: Section 1961(4) provides that a RICO enterprise "includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." [Italics mine]. Mohawk claims that this definition doesn't encompass corporations, since corporations are not mentioned in the second clause of that sentence. Corporations aren't mentioned, it says, because Congress drafted RICO to target organized crime and gangs, not big companies who futz with the law.

Still with me?

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We are fighting about whether everything that comes after "and" in that definition is an exclusive list of possible RICO violators, or merely a list of possible examples. The second issue is whether Mohawk was conducting the affairs of a distinct enterprise—as required under RICO—or just doing its own normal business. If it was just performing its own business functions, it's not a violation of RICO.

Carter Phillips has 30 minutes to represent Mohawk, and it's not clear the court even wants to hear his textual arguments. Scalia asks, "Why is this before us? You didn't argue this in the courts below and you didn't brief it here."

Phillips responds that this textual issue was "absolutely settled" against Mohawk on the 11th Circuit and so it made no sense to argue it there. "On the 11th Circuit and nine other circuits!" injects Scalia. Justice Ruth Bader Ginsburg is similarly insistent that "you can't … include questions not presented below." The justices go on in this vein for some time before turning to the merits of the textual issue.

Justice Sam Alito asks why the provision uses the word includes before listing the components of a RICO enterprise, pointing out that elsewhere Congress used the word means when it intended to create an exclusive definition, and includes only when it offered a general list of examples.

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Phillips responds that includes and means are synonymous in the statute, then turns to the second issue in the case, pointing out that under RICO, the enterprise must forward some separate and distinct purposes and not merely advance the company's own business interests. Justice David Souter stops him, doubtful that "manufacturing false Social Security cards" for illegal workers comes under the definition of a corporation conducting its own routine business affairs. Souter adds that providing fake IDs is "the something extra being done by the recruiters and you. The something extra is this scheme to provide phony papers."

Phillips does a masterful job of never quite admitting that offering illegal workers fake work documents is an ordinary part of a corporation's business. He makes it sound very tidy: "The company exists to hire people. … The temp agencies are paid to transport employees."

Scalia says he "hates getting the courts into the business of looking at whether companies are doing part of their regular business" or becoming involved in a separate, illegal enterprise.

Howard Foster of Chicago's Johnson & Bell is given 15 minutes to defend the workers. Using RICO to go after companies who hire illegally is his thing. He is quickly called upon to explain why the word includes isn't all-inclusive. He replies that RICO uses concepts and terms of great breadth. Scalia replies that the word union in Section 1961 either means a labor union, which makes no sense, or else the word modifies individuals, in which case corporations are excluded. "You're just as bad off" either way, he crows.

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Chief Justice John Roberts presses Foster on the difference between RICO and ordinary laws against criminal conspiracy. The answer he seems to want is "treble damages and attorneys' fees." That's why RICO is so attractive to these workers. But for some reason Foster fights him on this, explaining instead, and in painstaking detail, the substantive differences between RICO and the existing conspiracy laws.

Roberts becomes frustrated when Foster says that RICO involves interstate commerce. Says the new chief: "Congress did not enact RICO because normal criminal conspiracy law did not touch interstate commerce. … Your complaint is fully met under conspiracy law."

Malcolm Stewart, an assistant to the solicitor general, has 15 minutes to defend broadening RICO to reach Mohawk, and Alito again challenges him on why the drafters used includes instead of means. Justice Stephen Breyer points out that in enacting RICO, Congress was worried about "organized crime taking over pizza parlors and trade unions." The intent was never "to RICO-ize vast amounts of commercial activity." Scalia adds that the language is "at least ambiguous," meaning that it should be read as narrowly as possible. Then he bangs his hand on the bench to emphasize that "every other section that says includes is exclusive!"

Carter offers up the best four-minute rebuttal of a formerly losing argument I've ever heard, including the amazing claim that handing out fake Social Security cards is somehow central to Mohawk's routine business purposes—and thus not a separate illegal enterprise—because "to do our business, we have to have ID cards … in order to fill out forms … required by immigration law." Thus, providing fake documents seems to "allow us to do our business."

And in this, a debate that turns so pointedly on the meanings of simple words, he closes with a nod to Breyer: "I have never heard the word RICO-ize before, but I embrace it wholeheartedly." Stop them, before they RICO again.