decision that the fair labor standards act preempted the rico claims made in this case the lower court stated that because because of the fair labor standards act records of ours in wages and that because the allegations made in this case regarding the claims under the rico are based on the proper recording and in the over time that that was sufficient to warrant preemption however the claims in under the rico under the rico claims made in this case it wasn't the proper or improper recording of the hours or the wages it was in fact the failure to properly reports the wages and to properly pay the taxes that's part of it as i understand you have an overt a claim for her unpaid overtime that's your claims i guess that's one of the yes there is a wage theft scheme that is and that that would seem to be in the heartland of what the district court's talking about when it says this is mimicking a claim under the act for bag i mean i have some ideas but why didn't you bring a claim under that act rather than sort of get more creative with rico well this is noted in the briefs there was a fairly responders act claim that was brought on behalf of mr and a collective class on the basis of the nonpayment of overtime i will say i will say that i do agree that the wage theft scheme has outlined in our complaint if the court decides that the  would preempt the rico in any situation then that claim would more closely follow the judge's reasoning in terms of the fact that it would be duplicate as to allow a claim under the fair labor standards act the fair labor standards decline was not brought to a conclusion you know what happened to that that's still ongoing at this time in another where in another suit yes there was a completely when we get a case after file judgment i mean there's nothing left for the just court to do as to this transaction an occurrence well again so they were brought a separate separate claim separate planes that were filed at separate times and amended at separate times and so the fair labor standards act claim proceeds through the court right now and this case was dismissed on the troll b six as i was as i mentioned earlier posture for us to get a case piecemeal i mean that's really what the final judgment rules to prevent right well again we're dealing with two different federal statutes and i believe that they have different goals they have different claims and remedies and that is part of the reason why this  the argument that i'm making i believe should warrant this case to be remanded back to the district court are you seeking under rico that you could not obtain under the fair labor standards well the damages that one can obtain for an employee under the under the act will say the fair labor standards act are unpaid wages and liquidated damages which are meant to which are meant to compensate for prejudgment interest to sensually intended to compensate prevailing plaintiffs for losses incurred because they did not receive their payments to which they were properly entitled to when they  in a fair labor standards act case say you have the situation their wages have not been paid well presumably in that situation social security withholding hasn't been made or payments haven't been made either the employer's proportion of it is can you not get that as a remedy in a fair labor standards case for the remedy of what the employer would have to pay to social security is that not available on a notice elec case the only the only remedy available under the under the say is the unpaid wages and liquidated damages now presumably and is practical for practical purposes when the employer does eventually pay whether to settlement or judgement the wages that were owed there is typically the tax withholdings are paid during that that settlement or that judgment but what we're talking about here is separate and apart from those that this case was dismissed prior to discovery had this case proceeded we would have been able to present evidence that mr torres did in fact have to file amended returns and was in fact penalize for not having had those  taxes withheld prior now the so security as it was it's all correct now there was there is still the ongoing and compound ing damages to mr torres in his retirement benefits in that because those benefits were not paid for however many years from the cash payments he has now lost out on a and we're being told by our accountants  amount for those nine payments is there are they're tired benefits at that point in your complaining or yes we did we did bring that in the complaint  damages provision sometimes look at their damage provision is simply and solely to compensate the employee for not having had access to that money forth for that period of time that's it it's  basically a pre judgment interest it is not to cover was not intended to cover every potential situation such as this one where the employees have suffered mr torres a suffered through so security benefit and the penalty the penalties that he received for the withheld means not having been paid properly and on time what what are the damages you're seeking for the workers compensation insurance scheme that would be available under rico but not under the fair labor standards let me be clear the to the tax penalties and and any damages flowing from that and so security benefits are what we're seeking in damages for ok for all of the where it is the worker's compensation insurance scheme didn't what work or what remedy for that it's the same remedy it's just a scheme that helped further the underlying scheme of limiting the that were hard of the employee have some sort of tax liability or harm the workers compensation insurance well the so the workers composition simply furthered the underlying scheme of the underlying tax scheme so it was one more method that the employer was using to solidify its original and main scheme of paying less in taxes by reporting is it we should reverse the street court it would seem to me why there are a lot of issues that the district court would initially have to deal with down the road and i think i think what judge bush's stance to you about is really i'm not i may be misunderstanding and you are correct me i know about but the connection between your injury and the rico wrong that are alleged and whether there has to be a connection between the two for you to proceed it's sort of a standing issue it's sort of what does yeah it if it's a whole lot of things but it would seem to me that the national issue is really the subject of your appeal which is whether the two causes of that can co exist in any way that is the got it right on the preemption issue there's lots of examples whether system fair labor standards act being a detailed remedial statute with a careful blend the court uses a careful blend of rights and enforcement powers  really not a preemption issue but when you look at the remedies you know fairly or standards act is designed to displace it's designed to displace the wages and hours disputes especially with respect to overtime and so when you focus in on that i think it completely displaces that business for just about sixty years as a small restaurant in grand rapids and rico's been around for just not quite fifty years and so it was around for thirty years before rico came about and when you look at that and probably which labor statutes they want to make predicate felonies they did the labor management relations act they did not include the fair labor standards act in that they did not include the failure to withhold two employment  taxes they did not include failure to withhold fica food or medicare or social security those of those other two categories they could have social security all of these schemes even medicare was around at that time although in its infancy so congress if we give them their due and say they could have a car that out and we need to take it out at face value they didn't do that here they picked other felonies because that's what the rico statute was designed to do it was designed to focus on enterprises big ticket items and here we've got a mom and pop shop and ask a lot of what you're arguing certainly goes to their their claim for unpaid overtime but why would this same reasoning extend to the failure to withhold you know the social security stuff in the potential tax liability why isn't that something that's outside of this preclusion for lack of a better term sure i'll take them one at a time if i could st rico is designed to discourage certain types of harm to two people were their property it's not designed to stop harm to the government or to the l n the big bad you know some rd party someone else some worker's compensation scheme is designed how did my client allegedly harm mr torrens i had a rico case criminal rico where the harm parties were state government plea and the government brings the case there or they're operating on behalf of themselves and other governments but i mean this isn't in the statute that it has to be against private parties as you know but it does if you want to have standing to sue for an well the district court looked at something very carefully and that's it mr reza touched on it but there were actually three lawsuits filed against my clients here why are we getting one i mean this is very strange that the plaintiffs are the masters of their own complaint we moved to dismiss them for a class in this case it was not granted it was deemed individualized in part because a rd lawsuit was filed for fair labor standards act retaliation now had i predict the future i could move to consolidate and try to get rid of all of those but now with three lawsuits i left them alone because they had different standards and so the conditional certification for the fair labor standards act is different than class certification one is an opt in you know you have to opt in to a fairly were standard to case here the court said there no conditional cert these are highly individualized claims specific to mr taurus there are some alternative means that they should have invoked if they wanted to litigate the social security and tax liability issues both both  the i r s and social security have hotlines and whistleblower statutes that they could have brought those are direct statutes that allow incentivize it's almost like a u t m you respect i'm sorry you know but this happens purportedly this happens often enough that on the i r s website under it's frequently asked questions you point to says if you don't get a w two or if your paycheck is wrong what do you do and if it comes to the time to file your taxes and still not right what do you do want to tell you about the hotline so you can report to the government so they can consider pursuing it to you have a private cause of action and then you can be a whistleblower for either social security or the i r s those things weren't done here instead they said how was i har torres brought this lawsuit brought these three lawsuits and said he was somehow harmed in this attenuated distant future now the i r s specifically says no that's not the case it's not my client may have separate independent duties to withhold it's called mandatory withholding it's got regulations and procedures for dealing with that but it's the taxpayer all to me when we cited the case law the taxpayers burden on him his argument is that he was paid in cash his argument was not that he wasn't paid for all hours worked with that he was paid some portion of his work in taxpayer to report those earnings now if his w two is wrong something to do with whether they be able to be brot well it does in the sense that there is no there is no damage there is no remedy anything that befell befell upon mr torres is his own fault his responsibility is to report his taxes and when he failed to do so he's got options paid and to pay them and when he didn't do that that would have put money into the social security bucket that would have put money into the i r s his pocket so that they're not now coming after him allegedly for for a failure to amend or failure to pay now those things could have been attached to a complaint so i could contend with them they're with the cause that could be brought by the individual but i don't think they can be brought by the same individual and this is why i mean when you look at the case law that interprets the both you know that the suggestion is because he was paid something in cash that that creates a rico violation and i'm saying it's there's nothing illegal or unlawful about paying somebody in cash arguably my client you know according to these allegations violated its duties to the tax man or to the social security now pending for fairly for standards act violations now that was not deemed widespread it was not granted conditional certification rather was deemed individual ice because we allege in the lawsuit that mr torres asked to be paid in cash and so the point there is is that that lawsuit is a fair labor standards act lawsuit straight time versus overtime and intermittent torres's employment and possibly that of other employees would make it really hard to  well i disagree your honor it's actually incentivizes attorneys to take those types of cases it provides double damages treble damages if it's willful and it also provides for attorney's fees even if there's one nickel of overtime that's unpaid arguably you get reasonable attorney's fees so those are properly incentivised by the fair labor standards act rico is an entirely different scheme however that's designed to stop enterprises here we've got a mom and pop restaurant allegedly conspiring with themselves you know the other post e that i'll point out which occurred after the briefing was that there were other defendants named other restaurants mr mr talley's niece who runs kind of an upscale place the next town over his son who runs a nicer kind of trying your place by the stadium further north all these other folks were implicated as well they were dropped for the purposes of this appeal those claims allegedly go back one thousand and fifteen years in some cases the point is the only one that's left is my client so how is he conspiring with himself being the all the things that you might say of your client down the road well this is why judge will only said there was a failure of state a claim he looked at the other lawsuits he looked at this lawsuit as alleged and when he did so you have to look at it in context taking everything is true there were no tax returns attach no penalties and interest attached no social security statement attach none of those things were attached i mean to take social security in context if there were a a recovery under the fair labor standards act at that time taxes and withholdings would be taken out it's how it's done in fair labor standards act cases across the country when you settle in or there's a judgment taxes are taken out in the year that it's received now the cash that mr torres allegedly received he knew about and the rico cases say you can't have a rico case when you know about the fraud when you received a legit fraud and just receiving cash puts him on notice that he should have done something about it right then and there now again the s website talks about the frequently asked questions this must come up it's not just ubiquitous to the restaurant industry mister mr vitale is not alone here if he makes a mistake the remedy is for the taxpayer to say hey boss you got my paycheck wrong hey boss you got my w two rock and the i r s has a remedy if you don't do it if if your employer does not comply it's not to rattle off a rico lawsuit or several of rico lawsuits as we're seeing here  referenced in our briefing is to file a form with your tax return that says my w two is wrong but certainly he knows how much cash he receives he can report that and that's what the i r s says and so i point them out in context because that's the other category of alleged harm is that somehow we've heard him these a v the tax man now the i r s may very well after listens to this transcript may want to give my client a call but the point here is whether or not mr torres has a cause of action for rico and the case law suggests otherwise same thing with worker's comp there's no allegation here a number of district court right now that the the the  philadelphia excuse me out of new york yes have adopted the the civil holding which tried to talk about that separateness in that distinctness you don't just have to have a separateness of the enterprise again here there allegedly is not one it's just one guy running his restaurant and his general manager his longtime general manager who he lives with his girlfriend ms pearson so there's no separateness there there's no separateness as to the injury from  citations for for the court but in doing so again same thing with the social security any eventual fair labor standards act recovery would be paid into the lockbox at that time but i think it's highly speculative for somebody to suggest that they've got a retirement benefit in the arista context some of the cases we do say fair labor standards act displaces the arista claim under the rico can also be brought by an individual who is also filing a claim under the fair labor standards act the court the lower court it seemed like their concern was  opened up the floodgates every can every fair labor standards act claim will now become a rico case i don't believe so not every wage in our case can be will lend itself case on the contrary here in this case we have and intent to defraud the government which led to individuals being harmed now the would be a rico claim every time an employer pays somebody on the table yes if they're paying that i would be a pretty big deal yes exactly yes if they're paying under the table so as to avoid as in this case as to avoid tax and increasing their income their taxable income that in my opinion would be lend itself more to rico case then a simple misunderstanding of the law its misrepresentation of the law versus misrepresentation of fact if congress chose to omit violations of the fair labor standards act as a predicate offense or rico why should we say that that that specific omission implies that a more general statute that covers the same kinds of conduct likewise is not meant to be a predicate for rico well congress outline specific predicate acts that it felt would cover what its goal was and that was to stop organized crime to stop corruption stop bribery is a matter of fact judge maloney of the lower court his opinion cite five different areas that the rico was supposed to cover the tax scheme as outlined in the complaint in this case but stay on my question all right the point you know there's this rule of construction that if a general provision and a specific provisions speak to the same point we look to the specific provision in the event of a conflict this would be sort of analogous to that congress omits a very specific statute that deals with the problem your client jet basically had why should we say that omission implies that they didn't want to capture this with a more general much more general offense like wire or you know wire fraud because including the fair labor standards act would not have accomplished the same goal as as this now the filler center's act was created to alleviate substandard payment of wages and to ensure that workers were paid an honest day wage for an honest day's work it did not contemplate anything outside of that realm it did include a cause of action later on for retaliation and it did include then it does indeed include liquidated damages those liquidated damages were to cover the loss of the use of that money for that period of time the rico has and creates a completely different cause of action based on fraud or schemes to defraud you know so i mean the point is it's a much more general way of getting at something specific and congress chose not to put that specific thing as a predicate so why why should wire fraud be a predicate when a violation of this specific act isn't well because that kind of tell us this is not what congress had  mine i do not believe so because they cover two different things the wire fraud in this context was predicated on this misinforming or providing in misinformation to the government as to the employer taxable income so as to avoid tax liability that could've remedied a lot of this himself to some extent isn't that fair well could he that's the question he received a w two as as most people do most workers do they receive a w two from their employer they take that w two down to h and r block and they get their taxes done that's what most people do was was he is it fair to say well he should have known that all of these other cash payments after being told as alleged in the complaint by his employer that it wasn't taxable is it fair to say that he should have then reported that at the time and again let me remind the court as i said he has since then filed his taxes and he was penalize and there is no remedy other than i suppose being a whistleblower to the i r s and hoping that they get to it eventually for him to redress to to be made whole for the social security