Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...

2004 WL 3634831 (C.A.11) (Appellate Brief) United States Court of Appeals, Eleventh Circuit.
Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora Sisson, individually and on behalf of a class, PlaintiffsAppellees, v.
MOHAWK INDUSTRIES, INC., Defendant-Appellant.
No. 04-13740-AA. October 12, 2004.
On Appeal from the United States District Court for the Northern District of Georgia, Rome Division

Brief for Appellees

Bobby Lee Cook, Cook & Connelly, 9899 Commerce Street, P.O. Box 370, Summerville, GA 30747, Tel: (706) 857-3421, Fax: (706) 857-1520, Howard Foster, Johnson & Bell Ltd, 55 E. Monroe Street, Suite 4100, Chicago, IL 60603, Tel: (312) 372-0770.
Matthew Thames, Goddard, Thames, Hammontree & Bolding, 2716 Cleveland Hwy., P.O. Box 399, Dalton, GA 307220399, Tel: (706) 278-0464, Fax: (706) 278-0465.
John E. Floyd, Joshua F. Thorpe, Ronan P. Doherty, Nicole G. Iannarone, Bondurant, Mixson & Elmore, LLP, 3900 One Atlantic Center, 1201 W. Peachtree Street, Atlanta, GA 30309, Tel: (404) 881-4100, Fax: (404)881-4111, Attorneys for Plaintiffs-Appellees.

*I STATEMENT REGARDING ORAL ARGUMENT

Plaintiffs respectfully request the Court to schedule oral argument in this matter. The basic legal principles of the federal Racketeer Influenced and Corrupt Organizations Act (”“RICO‘’), 18 U.S.C. § 1961, et seq., at issue in this appeal are not novel. Indeed, the District Court’s thorough opinion sets forth in detail how binding precedent from this Court and the United States Supreme Court compels the result in this case. In addition, three other Circuit Courts of Appeal have held that RICO claims like those Plaintiffs have asserted cannot be dismissed on the pleadings. Nevertheless, Plaintiffs agree that oral argument will aid the Court’s consideration and disposition of this appeal.

*ii TABLE OF CONTENTS

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT ......

C1

STATEMENT REGARDING ORAL ARGUMENT ......................................................................................................

i

STATEMENT OF JURISDICTION ......................................................................................................................................

xi

CERTIFICATE OF COMPLIANCE .....................................................................................................................................

xii

STATEMENT OF THE CASE ................................................................................................................................................

1

I. Statement of Facts .....................................................................................................................................................................

1

II. Course of Proceedings and Disposition in the District Court ..................................................................................

2

1

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...

III. Standard of Review ................................................................................................................................................................

2

SUMMARY OF THE ARGUMENT .....................................................................................................................................

3

ARGUMENT AND CITATIONS OF AUTHORITY .....................................................................................................

7

I. PLAINTIFFS HAVE BEEN ALLEGED MOHAWK’S PARTICIPATION IN AN ACTIONABLE

7

ASSOCIATION-IN-FACT RICO ENTERPRISE ............................................................................................................

A. The Complaint Alleges an Actionable Association-In-Fact RICO Enterprise That Consists of

8

Mohawk and Third-party Recruiters ......................................................................................................................................

B. Plaintiffs Allege that Mohawk Participates In the Affairs of Enterprise ............................................................

14

1. Plaintiffs Allege That Mohawk Participates In the Affairs of the Enterprise By Regularly Using the

15

Enterprise as a Vehicle to Commit the Racketeering Activity .....................................................................................

*iii 2. Baker is Wrongly Decided, Contrary to Eleventh Circuit Precedent and Would Wreak Havoc

16

with Criminal RICO Prosecutions ...........................................................................................................................................

3. Baker Does Not Support Dismissal in this Case ...........................................................................................................

20

C. Plaintiffs Allege That The Mohawk-Plus-Recruiters Enterprise Has The Common Purpose of

22

Profiting From the Illegal Hiring Activity ............................................................................................................................

II. PLAINTIFFS HAVE STANDING TO PURSUE THEIR RICO CLAIMS FOR LOST WAGES ..........

23

A. Plaintiffs’ Allegation That Mohawk Suppressed Their Wages Constitutes an ” “Injury to Business

25

or Property‘’ .....................................................................................................................................................................................

B. Plaintiffs’ Claims For Damages Are Not Speculative And Cannot Be Dismissed on the Pleadings .......

28

C. Plaintiffs Have Alleged A Direct Injury ..........................................................................................................................

34

III. MOHAWK IS NOT IMMUNE FROM PLAINTIFFS’ GEORGIA RICO CLAIMS .................................

36

A. Because Georgia’s RICO Statute Evidences A Clear Intent to Subject Corporations To Liability,

38

Mohawk Can Be Held Responsible Under O.C.G.A. §16-2-22(1)(a) .......................................................................

B. Plaintiffs’ Allegations State a Claim Under O.C.G.A. § 16-2-22(b)(1) ..............................................................

40

IV. PLAINTIFFS HAVE ALLEGED A CAUSE OF ACTION FOR UNJUST ENRICHMENT

42

UNDER GEORGIA LAW .........................................................................................................................................................

CONCLUSION ...............................................................................................................................................................................

44

*iv TABLE OF AUTHORITIES

Cases

A.D. Adair & McCarty Bros. v. Central Bank & Trust. Corp.,

43

20 Ga. App. 811, 93 S.E. 542 (1917) .................................................

2

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 151 (1987) ...........................................................................................
Baker v. IBP, Inc., 357 F.3d 685 (7th Cir. 2004) ...........................
Begala v. PNC Bank. Ohio N.A., 214 F.3d 776, 781 (6th Cir. 2000) ...............................................................................................................
Byrne v. Nezhat, 261 F.3d 1075, 1105 (11th Cir. 2001) .............
Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 164 (2001) .............................................................................................................
Chaset v. Fleer/Skybox Int’l, 300 F.3d 1083 (9th Cir. 2002) ....
Chen v. Mayflower Transit. Inc., 315 F. Supp.2d 886, 901-05 & n.17 (N.D. Ill. 2004) ............................................................................
Clark v. Security Life Ins. Co., 270 Ga. 165, 167 n.11, 509 S.E.2d 602,604 n. 11 (1998) ..................................................................
Cobb County v. Jones Group, 218 Ga. App. 149, 153, 460 S.E.2d 516, 521 (1995) ............................................................................
Commercial Cleaning Servs., Inc. v. Colin Serv. Sys., Inc., 271 F.3d 374, 380-85 (2d. Cir. 2001) .................................................
Cotton, Inc. v. Phil-Dan Trucking, Inc., 270 Ga. 95, 507 S.E.2d 730 (1998) ......................................................................................
*v Cox v. Administrator United States Steel & Carnegie, 17 F.3d 1386, 1399 (11th Cir. 1994) ........................................................
Dailey v. Quality School Plan, Inc., 380 F.2d 484, 486-87 (5th Cir. 1967) .............................................................................................
Danielsen v. Burnside-Ott Aviation Training Ctr., 941 F.2d 1220, 1229 (D.C. Cir. 1991) ..................................................................
DeCanas v. Bica, 424 U.S. 351, 356-57 (1976) .............................
Discon, Inc. v. NYNEX Corp., 93 F.3d 1055 (2d Cir. 1996) .....
Doug Grant, Inc. v. Greate Bay Casino Corp., 3 F. Supp.2d 518 (D.N.J. 1998) .......................................................................................
Dover v. State, 192 Ga. App. 429, 430, 385 S.E.2d 417, 420 (1989) .............................................................................................................
Dumas v. Major League Baseball Props., Inc., 104 F.Supp.2d 1220 (S.D. Cal. 2000) .........................................................
Federal Ins. Co. v. Westside Supply Co., Inc., 264 Ga. App.

4, 27 15, 16, 17, 19, 20, 21, 22, 30
1 37 9, 12 28 13, 21 39, 40, 41 39, 40 24, 29, 35, 36 36 30, 33, 34 25 25 32 12 28
7 28 36, 43 3

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
240, 590 S.E.2d 224 (2003) ...................................................................
Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir. 1997) ......
Hanover Shoe v. United Shoe Machine Corp., 392 U.S. 481, 489 (1968) .....................................................................................................
Hishon v. King & Spalding, 467 U.S. 69, 73 (1984) ....................
Holmes v. SIPC, 503 U.S. 258 (1992) ................................................
*vi In re Cardizem CD Antitrust Litig., 90 F. Supp. 2d 819, 825 (E.D. Mich. 1999) .............................................................................
In re Five Star Partners, L.P., 169 B.R. 994, 1006 (Bankr. N.D. Ga. 1994) ............................................................................................
In re Lorazepam & Clorazepate Antitrust Litig., 95 F.Supp.2d 30, 51 (D.D.C. 2003) ..........................................................
In re Polypropylene Carpet Antitrust Litig., 178 F.R.D. 603, 609 (N.D. Ga. 1997) .................................................................................
In re Terazosin Hydrochloride, 20 F.R.D. 672 (S.D. Fla. 2004) ...............................................................................................................
Jund v. Town of Hempsted, 941 F.2d 1271, 1286 (2d Cir. 1991) ...............................................................................................................
Klay v. Humana, Inc., 382 F.3d 1241, 2004 WL 1938845 (11th Cir. Sept. 1, 2004) ..........................................................................
Kwickie/Flash Foods, Inc. v. Lakeside Petroleum, Inc., 246 Ga. App. 729, 730 (2000) .......................................................................
Leatherman v. Tarrant County Narcotics Intel. & Coord. Unit, 507 U.S. 163, 168 (1993) ............................................................
Lerma v. Univision Communications, Inc., 52 F. Supp. 2d 1011 (E.D. Wis. 1999) .............................................................................
Libertad v. Welch, 53 F.3d 428, 437 n.4 (1st Cir. 1995) .............
Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) .........
Maiz v. Virani, 253 F.3d 641 (11th Cir. 2001) ...............................
*vii Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) ...........................................................................................
Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1168-70 (9th Cir. 2002) ......................................................................................................
Motors Acceptance Corp. v. Rozier, 278 Ga. 52, 53, 597

11, 12, 13, 21 27
3, 11 34, 36
44 39 44 27 44 25 20 42 33 32 25 24 31, 33, 34 32 24, 25, 26, 29, 30, 32, 33, 35, 36 39 4

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
S.E.2d 367, 368 (2004) ............................................................................
Mutual Serv. Ins. Co. v. Frit Indus., Inc., 358 F.3d 1312, 1318 (11th Cir. 2004) ...............................................................................
NOW v. Scheidler, 510 U.S. 249, 256 (1994) .................................
Patel v. Quality Inn South, 846 F.2d 700, 704 (11th Cir. 1988) ...............................................................................................................
Price v. Pinnacle Brands. Inc., 138 F.3d 602, 607 (5th Cir. 1998) ...............................................................................................................
Pryor v. CCEC, Inc., 257 Ga. App. 450, 452 (2002) ...................
Reaugh v. Inner Harbor Hosp., Ltd., 214 Ga. App. 259, 265, 447 S.E.2d 617 (1994) .............................................................................
Regional Pacesetters, Inc. v. Halpern Enters., Inc., 165 Ga. App. 777, 300 S.E.2d 180 (1983) ........................................................
Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339 (2d Cir. 1994) ..........................................................
Schoenbaum Ltd. Co., LLC v. Lenox Pines, LLC, 262 Ga. App. 457, 585 S.E.2d 643 (2003) ........................................................
Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 493-99 (1985) ...
*viii State v. English, 276 Ga. 343, 348, 578 S.E.2d 413 (2003) .............................................................................................................
State v. Military Circle Pet Center No. 94, Inc., 257 Ga. 388, 360 S.E.2d 248 (1987) .............................................................................
Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 619 (6th Cir. 2004) ...............................................................................................................
Turnquist v. Elliott, 706 F.2d 809, 812 (7th Cir. 1983) ...............
United States v. Baxter Int’l, Inc., 345 F.3d 866, 881 (11th Cir. 2003) ......................................................................................................
United States v. Carter, 721 F.2d 1514, 1527 (11th Cir. 1984) ...............................................................................................................
United States v. Castro, 89 F.3d 1443 (11th Cir. 1996) ..............
United States v. Church, 955 F.2d 688, 698 (11th Cir. 1992) ..
United States v. Cagnina, 697 F.2d 915, 921 (11th Cir. 1983) ............................................................................................................................
United States v. Elliott, 571 F.2d 880, 897-98 (5th Cir. 1978)

2 3, 23, 24, 33, 41
32 27 42 25, 36, 38 42 12 36 29 39 41 24, 29, 30, 34, 35, 36 25
3 15, 18
20 22, 23
22 9, 16, 18, 25
5

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
............................................................................................................................ United States v. Goldin Industries, Inc., 219 F.3d 1271, 1274 (11th Cir. 2000) .......................................................................................... United States v. Hawes, 529 F.2d 472, 479 (5th Cir. 1976) ...... United States v. Hewes, 729 F.2d 1302, 1311 (11th Cir. 1984) ............................................................................................................... *ix United States v. Massey, 89 F.3d 1433 (11th Cir. 1996) ..... United States v. Muyet, 994 F. Supp. 501, 506 & 515-16 (S.D.N.Y. 1998) .......................................................................................... United States v. Pipkins, 378 F.3d 1281 (11th Cir. 2004) .......... United States v. Polar, 369 F.3d 1248, 1252-53 (11th Cir. 2004) ............................................................................................................... United States v. Starrett, 55 F.3d 1525, 1542-43 (11th Cir. 1995) ............................................................................................................... United States v. Thevis, 474 F. Supp. 134, 137 (N.D. Ga. 1979) ............................................................................................................... United States v. Turkette, 452 U.S. 576, 580 (1981) .................... United States v. Valera, 845 F.2d 923 (11th Cir. 1988) .............. Westways World Travel v. AMR Corp., 182 F. Supp.2d 952, 959 (C.D. Cal. 2000) ................................................................................. *x FEDERAL STATUTES, RULES, AND REGULATIONS 8 U.S.C. § 1324............................................................................................ 18 U.S.C. § 1546 ......................................................................................... 18 U.S.C. § 196 1 ....................................................................................... 18 U.S.C. § 1962 ......................................................................................... 18 U.S.C. § 1964 ......................................................................................... 15 U.S.C. 15(a)............................................................................................. O.C.G.A. § 16-2-22 .................................................................................... O.C.G.A. § 16-14-4 .................................................................................... O.C.G.A. § 16-14-6 .................................................................................... O.C.G.A. § 16-14-13..................................................................................

7, 9, 13, 19
8 9, 20
20 14
18, 19 33
15, 18, 19, 21
9, 19, 20
8, 9 9
11, 14
1, 2, 3, 4, 5, 10, 36 1, 10, 21, 33, 34, 36
3, 4, 8 7, 14
5, 6, 26 26
6, 37 38, 40, 41, 42, 44 7, 38
38, 39 39 6

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
Restatement (Third) of the Law of Agency ..................................... H.R. Rep. No. 1365, 82d Congress, 2d Sess., 1952 U.S.C.C.A.N. 1653 (1952) ..................................................................... S. Rep. No. 44-689, at IV-V (1877) .................................................... House Comm. On the Judiciary, 100th Cong. ................................

12, 13 31, 32
32 32

*XI STATEMENT OF JURISDICTION
The District Court has jurisdiction over the federal claims asserted in Plaintiffs’ Complaint pursuant to 28 U.S.C. § 1331. The District Court has supplemental jurisdiction over Plaintiffs’ state law claims pursuant to 28 U.S.C. § 1367(a).
Mohawk Industries, Inc. (”“Mohawk‘’) appeals the District Court’s decision to deny Mohawk’s motion to dismiss the Complaint. The District Court certified that decision for interlocutory appeal pursuant to 28 U.S.C. § 1292(b), and this Court subsequently exercised its discretion to hear the appeal on July 28, 2004. Accordingly, this Court has jurisdiction over Mohawk’s appeal pursuant to 28 U.S.C. § 1292(b).
*xii STATEMENT OF THE ISSUES
I. Whether the District Court Correctly Held that Plaintiffs’ Complaint Alleges Mohawk’s Participation in the Affairs of an Association-in-Fact Enterprise Pursuant to 18 U.S.C. § 1962(c);
II. Whether the District Court Correctly Held that Plaintiffs Have Standing to Recover Damages;
III. Whether the District Court Correctly Held that Plaintiffs’ Complaint States a Claim Under Georgia’s RICO Statute; and
IV. Whether the District Court Correctly Held that Plaintiffs’ Complaint States a Claim for Unjust Enrichment Under Georgia Law.
*1 STATEMENT OF THE CASE
I. Statement of Facts.
Plaintiffs are current and former hourly Mohawk employees who allege that Mohawk has depressed their wages by illegally employing and harboring large numbers of undocumented aliens. See Compl. „ 1 (R1-1).1 The Complaint alleges that Mohawk conducted and participated in the affairs of an association-in-fact enterprise that includes independent employment agencies, including Temporary Placement Services, Inc. (”“TPS‘’), and other third-party recruiters. Plaintiffs allege that Mohawk associates with these entities by (1) using the enterprise to procure illegal workers, whom Mohawk then hires as employees; (2) using the enterprise to procure illegal workers who remain employed by TPS and other independent employment agencies, but whom Mohawk harbors and puts to work as temporary employees; and (3) paying the various other members of the enterprise fees for procuring illegal workers. Id. „ 76.
Plaintiffs allege that Mohawk’s illegal conduct directly injured them by suppressing the wages Mohawk paid them and its other hourly employees. Id. „„ 85-87. They bring this suit to recover damages under the federal and Georgia RICO statutes. Id. „„ 88-105. In addition, Plaintiffs allege that Mohawk has been *2 unjustly enriched by its unlawful conduct and seek to recover Mohawk’s illegal profits. Id. „„ 106-110.
7

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
II. Course of Proceedings and Disposition in the District Court.
Plaintiffs filed their Complaint on January 6, 2004. (R1-1). On February 9, 2004, Mohawk moved to dismiss the Complaint, arguing inter alia that (1) Plaintiffs had failed to allege Mohawk’s participation in a distinct enterprise; (2) Plaintiffs did not have standing to recover damages; (3) Plaintiffs had failed to allege the predicate acts of illegal hiring and harboring with sufficient particularity; and (4) corporations cannot be held liable under Georgia’s RICO statute. (R1-25). The District Court rejected these arguments in a detailed 53-page Order, dated April 12, 2004. See Order (R2-44).2 On May 27, 2004, the District Court granted Mohawk’s motion to certify its Order for interlocutory appeal. (R3-58). And on July 28, 2004, this Court granted Mohawk’s request for permission to appeal the District Court’s Order. (R3-59).
III. Standard of Review.
This Court reviews the District Court’s decision to deny a motion to dismiss de novo. See *3 Mutual Serv. Ins. Co. v. Frit Indus., Inc., 358 F.3d 1312, 1318 (11th Cir. 2004). The Supreme Court has held that a civil RICO complaint ””must be sustained if relief could be granted “under any set of facts that could be proved consistent with the allegations.’ ”“ NOW v. Scheidler, 510 U.S. 249, 256 (1994) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)) (emphasis added). Further, ”“[a]t this stage of the litigation, [the court] must accept [plaintiffs’] allegations as true.‘’ Hishon, 467 U.S. at 73. As a result, this Court has held that ”“the threshold of sufficiency to which a complaint is held at the motion-to-dismiss stage is “exceedingly low.’ ‘’ United States v. Baxter Int’l, Inc., 345 F.3d 866, 881 (11th Cir. 2003). The Court ”“must find‘’ that plaintiff has ”“no case‘’ to dismiss a complaint. Id. at 884.
SUMMARY OF THE ARGUMENT
Over the past two decades, Congress has endeavored to put teeth into the laws that prohibit illegal immigration and the domestic employment of undocumented aliens. In 1986, Congress made it a crime for an employer to knowingly employ undocumented aliens. See 8 U.S.C. § 1324A, et seq. In 1996, Congress substantially increased the penalties for employers that knowingly employ significant numbers of undocumented aliens. See 8 U.S.C. § 1324. In that same year, Congress added immigration-related crimes to the list of acts that constitute ”“racketeering activity‘’ under the federal RICO statute. See *4 18 U.S.C. § 1961 (1)(F) (listing any act indictable under 8 U.S.C. § 1324 as a RICO predicate act). In so doing, Congress authorized private civil suits like this one.3
In this appeal, Mohawk seeks to defeat those legislative decisions, at least as they apply to ”“legitimate corporations.‘’ Mohawk argues that even when an employer hires and harbors illegal workers through an association with third parties, it somehow engages only in its own business and is not participating in the affairs of a RICO enterprise as a matter of law. But Plaintiffs have alleged facts that show Mohawk repeatedly used the services and facilities of the enterprise to make the racketeering activity possible. Under this Court’s precedents, nothing more is required to plead Mohawk’s conduct of the enterprise’s affairs.
Rather than confront this authority, Mohawk engages in a game of semantics, improperly recasting its participation in the affairs of the enterprise alleged in the Complaint as Mohawk’s individual hiring activity. Mohawk argues that it cannot be held liable under RICO because the conduct Plaintiffs allege supposedly relates solely to Mohawk’s own business. But Mohawk offers the Court no limiting principle for this tautological argument. As a result, Mohawk’s argument would allow any RICO defendant to avoid prosecution whenever the racketeering activity arguably advances both the defendant’s own interests and the *5 interests of the enterprise and its other members. The false premise Mohawk advances here-that an employer’s illegal hiring and harboring activity by definition constitutes only the employer’s affairs-would prevent the government from using RICO to prosecute any employer for that conduct, even when the employer associates with independent third parties to accomplish its unlawful activity. In addition to defeating Plaintiffs’ claims, therefore, the erroneous argument that Mohawk urges on this Court would negate the addition of 8 U.S.C. § 1324 to the list of RICO predicate acts.
8

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
This Court should affirm the District Court’s thorough and well-reasoned decision to permit Plaintiffs to proceed with their properly-alleged federal RICO claims. First, neither the text of the statute nor the governing case law support Mohawk’s radical view that corporations are beyond RICO’s reach when they join forces with independent, third parties for the common purpose of profiting from illegal activity. Because Plaintiffs’ Complaint alleges those facts, see Compl. „ 76 (R1-1), the District Court properly rejected Mohawk’s enterprise arguments.
The Court should further affirm the District Court’s ruling that Plaintiffs have standing to pursue their RICO claims because Plaintiffs properly alleged that Mohawk’s illegal conduct proximately caused them injury in the form of suppressed wages. Damages for wages lost due to a RICO violation constitute an injury to business or property that Plaintiffs may recover pursuant to *6 18 U.S.C. § 1964(c). And because Plaintiffs sell their services to Mohawk without any intermediary, they suffer this injury directly and may rely on the RICO statute to recover damages.
Second, the Court should hold that corporations like Mohawk may be held liable for violating Georgia’s RICO statute pursuant to both subsections of Georgia’s corporate criminal responsibility statute, O.C.G.A. § 16-2-22. Because the Georgia RICO statute unquestionably is intended to apply to corporations, this Court should reverse the District Court’s decision to preclude Plaintiffs from proving Mohawk’s liability via O.C.G.A. § 16-2-22(a)(1). The Court should also affirm the District Court’s ruling that Plaintiffs’ allegations are sufficient to plead Mohawk’s corporate responsibility for violating the Georgia RICO statute under O.C.G.A. § 16-2-22(b)(1).
Finally, the Court should reject Mohawk’s attempt to dismiss Plaintiffs’ unjust enrichment claim on the theory that Plaintiffs ”“accepted‘’ the wages that Mohawk paid them. Plaintiffs allege that Mohawk’s illegal hiring has suppressed their wages and allowed Mohawk to earn unlawful profits that Mohawk should not be permitted to retain. As the District Court properly held, nothing more is required to plead unjust enrichment under Georgia law.
*7 ARGUMENT AND CITATIONS OF AUTHORITY
I. PLAINTIFFS HAVE ALLEGED MOHAWK’S PARTICIPATION IN AN ACTIONABLE ASSOCIATION-INFACT RICO ENTERPRISE.
To plead Mohawk’s violation of 18 U.S.C. § 1962(c), Plaintiffs need only allege (1) the existence of an enterprise; (2) that Mohawk associated with the enterprise; and (3) that Mohawk participated in the enterprise’s affairs through (4) a pattern of racketeering activity.4 See United States v. Goldin Industries. Inc., 219 F.3d 1271, 1274 (11th Cir. 2000). Plaintiffs satisfied those requirements by alleging Mohawk participated in the affairs of an enterprise that consists of Mohawk and independent, third-party recruiters (including third-party staffing companies) and has the common purpose of profiting from supplying Mohawk’s carpet factories with large numbers of undocumented workers. Mohawk offers three erroneous criticisms of Plaintiffs’ enterprise allegations: (1) Plaintiffs do not allege an enterprise because Mohawk is somehow not ”“distinct‘’ from third-party recruiters; (2) Plaintiffs’ allegations that Mohawk associates with third parties to obtain illegal workers somehow do not allege Mohawk’s participation in the enterprise’s affairs; and (3) Mohawk and the other members of the enterprise do not share a common purpose, even though they all benefit financially from Mohawk’s *8 illegal hiring scheme. As the District Court recognized, each of these criticisms conflicts with Supreme Court and Eleventh Circuit law and would require the Court to ignore, rather than to take as true, the allegations in the Complaint.
A. The Complaint Alleges an Actionable Association-In-Fact RICO Enterprise That Consists of Mohawk and Thirdparty Recruiters.
The federal RICO statute defines an ”“enterprise‘’ as ”“any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.‘’ 18 U.S.C. § 1961(4). In United States v. Turkette, 452 U.S. 576, 580 (1981), the Supreme Court emphasized the absence of any ”“restriction upon the associations embraced by this definition: an enterprise includes any union or group of individuals associated in fact.‘’ This Court similarly has recognized that the statute defines RICO enterprises broadly: In United States v. Hawes, 529 F.2d 472, 479 (5th Cir. 1976), we noted that “Congress gave the term ”“enterprise‘’ a very
9

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
broad meaning’.... [W]e are persuaded that ”“enterprise‘’ includes an informal, de facto association such as that involved in this case. In defining ”“enterprise‘’, Congress made clear that the statute extended beyond conventional business organizations to reach ” “any...group of individuals whose association, however loose or informal, [that] furnishes a vehicle for the commission of two or more predicate crimes. The statute demands only that there be association ”“in fact‘’ when it cannot be implied in law. There is no distinction, for ” “enterprise‘’ purposes, between a duly formed corporation that elects officers and holds annual meetings and an amoeba-like infra-structure that controls a secret criminal network.
*9 United States v. Elliott, 571 F.2d 880, 897-98 (5th Cir. 1978).5 Accordingly, this Court repeatedly has concluded that an ”“enterprise‘’ includes associations in fact among corporations and among corporations and individuals.6 Because Plaintiffs allege an association between Mohawk and independent, third-party recruiters, the Complaint properly pleads an actionable enterprise. See Compl. „ 76 (R1-1).
Conceding that a corporation plus third parties can form an association-in-fact enterprise, see Mhk Br. at 12-13,7 Mohawk argues Plaintiffs failed to meet the enterprise requirement by pleading an enterprise that consists solely of Mohawk and its agents. This argument requires Mohawk to distort Plaintiffs’ allegation that the enterprise includes independent recruiting firms as well as Mohawk. Specifically, Plaintiffs allege:
*10 Mohawk has engaged in an open and ongoing pattern of violations of 8 U.S.C. § 1324 and 18 U.S.C. § 1546 during the last five years through its participation in an association-in-fact enterprise with third party employment agencies and other recruiters, including Temporary Placement Services (”“TPS‘’), that supply Mohawk with illegal workers. Each recruiter is paid a fee for each worker it supplies to Mohawk, and some of those recruiters work closely with Mohawk to meet its employment needs by offering a pool of illegal workers who can be dispatched to a particular Mohawk facility on short notice as the need arises. Some recruiters find workers in the Brownsville, Texas area and transport them to Georgia. Others, like TPS, have relatively formal relationships with the company in which they employ illegal workers and then loan or otherwise provide them to Mohawk for a fee. These recruiters are sometimes assisted by Mohawk employees who carry a supply of social security cards for use when a prospective or existing employee needs to assume a new identity. Compl. „ 76 (emphasis added) (R1-1).
As the District Court properly held, this paragraph alleges an ”“association-in-fact‘’ enterprise between Mohawk and separate third parties:
After consideration of the allegations in the Complaint, the Court concludes that for the purposes of this Motion to Dismiss, Plaintiffs have adequately alleged that the recruiters are separate and independent entities from [Mohawk]. Whether the third party recruiters are in fact agents of [Mohawk] is a factual issue, but for the purposes of the instant Motion Plaintiffs have met their burden to allege that the association-in-fact enterprise consisted of [Mohawk] and separate entities. Order at 32-33 (emphasis added) (R2-44).
Plaintiffs expect to prove that TPS and other third parties that recruit undocumented workers for Mohawk include independent, separately incorporated businesses that service many clients, not just Mohawk. In other words, Plaintiffs have not alleged (and do not believe) that Mohawk is the corporate parent for the third-party recruiting firms identified in the Complaint or that all these different *11 entities are within the same corporate ”“family.‘’ Nor have Plaintiffs alleged that the third-party recruiters are Mohawk’s agents.
Accordingly, Mohawk’s suggestion that the allegations here are similar to those in Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir. 1997) is not correct. In Fitzgerald, the Seventh Circuit concluded that plaintiffs’ allegation that Chrysler sold fraudulent warranties through a network of franchised dealers, exclusively dedicated to selling Chrysler products, did not meet the enterprise requirement.8 As indicated, Plaintiffs have not alleged (nor could it fairly be inferred) that the employment agencies and other recruiters with whom Mohawk associates are exclusively devoted to recruiting Mohawk employees. Rather, the Complaint alleges that Mohawk associates with these separate entities to accomplish its unlawful harboring and employment of undocumented workers. Accordingly, whether these recruiters are Mohawk’s ”“agents‘’ is a fact question that cannot be decided on the pleadings and certainly cannot be resolved against Plaintiffs on a motion to dismiss. See Hishon, 467 U.S. at 73.9
10

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
*12 Moreover, even if Mohawk’s agency argument could be reconciled with the Complaint, it nevertheless fails because it conflicts with subsequent Supreme Court and Eleventh Circuit authority. In Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001), the Supreme Court sustained an enterprise that consisted of a closely-held corporation and its president. Although there was no question that the president was an agent of the corporation, ”“acting within the scope of his authority,‘’ id. at 163, the unanimous Court was satisfied that separate incorporation was sufficient to distinguish the corporation from the president, so that the two could form an actionable enterprise. Id. at 160-65.10 In other words, the agency relationship between the two members of the enterprise was immaterial; the only question under the RICO statute was whether the corporation and its president were legally distinct. See generally, Brief for the United States as Amicus Curiae in Cedric Kushner Promotions, Ltd. v. Don King, 2000 WL 85159, at * 19-21 (Jan. 25, 2001) (”“Agency doctrines ... do not negate the actual distinctness of principal and agent‘’ for purposes of defining a RICO enterprise‘’); Restatement (Third) of the Law of Agency § 1.01 cmt. c (Tentative Draft No. 2, *13 Mar. 14, 2001) (”“Despite their agency relationship, a principal and agent retain separate legal personalities.‘’).
Mohawk’s argument similarly contradicts Goldin, in which this Court held that three sister corporations had formed a RICO enterprise consisting of the corporations and the individuals who ran them. Once again, the individual members of the enterprise were unquestionably agents of one or more of the corporate members. See Goldin, 219 F.3d at 1273.11 And if Mohawk’s agency argument were correct, the Goldin Court would have been compelled to reverse the convictions based on the defendants’ argument that the RICO person and enterprise were not distinct. Instead, this Court affirmed because the corporations were legally ”“separate and distinct‘’ and ”“free to act independently and advance [their] own interests contrary to those of the other two corporations.‘’ 219 F.3d at 1277.
Finally, even the district courts bound to follow Fitzgerald have determined that an agency relationship does not defeat an actionable RICO enterprise. In Chen v. Mayflower Transit, Inc., 315 F. Supp.2d 886, 901-05 & n.17 (N.D. Ill. 2004), for example, the court held that Fitzgerald did not preclude a RICO enterprise involving separately incorporated local movers and a national moving corporation *14 even though the plaintiff alleged the local movers acted as the defendant’s agents.12 Because Plaintiffs allege that the enterprise in this case includes third-party recruiters, legally distinct from Mohawk itself, the Complaint satisfies RICO’s enterprise pleading requirement, regardless of whether Mohawk ultimately proves an agency relationship with those recruiters.13
B. Plaintiffs Allege That Mohawk Participates In the Affairs of the Enterprise.
Building on the false premise that Plaintiffs allege an enterprise that consists only of Mohawk employees and agents, Mohawk argues that Plaintiffs failed to allege Mohawk participated in the affairs of an enterprise, as opposed to participating in Mohawk’s own affairs.14 Because the Complaint alleges that Mohawk associates with third parties and participates in the affairs of the resulting enterprise by hiring, harboring and using illegal workers procured by those third *15 parties, Mohawk’s second argument cannot support dismissal. Mohawk bases this argument almost entirely on Baker v. IBP, Inc., 357 F.3d 685 (7th Cir. 2004), a Seventh Circuit decision that is wrongly decided and conflicts with Eleventh Circuit precedent. This Court should reject Baker because it would wreak havoc with criminal RICO prosecutions and immunize corporations from RICO liability even when they associate with third parties to conduct illegal activity.
1. Plaintiffs Allege That Mohawk Participates In the Affairs of the Enterprise By Regularly Using the Enterprise as a Vehicle to Commit the Racketeering Activity.
The Complaint alleges that Mohawk participates in the enterprise’s affairs by (1) using and harboring illegal workers employed by third-party employment agencies such as TPS; (2) knowingly employing and accepting false documents from illegal workers supplied by third-party recruiters; and (3) paying fees to third-party recruiters for obtaining these illegal workers. Compl. „ 76 (R1-1). Plaintiffs therefore have alleged that Mohawk directly participates in and conducts the affairs of an enterprise that consists of Mohawk and independent, third-party recruiters. Moreover, under Eleventh Circuit precedent, ”“proof that the facilities and services of the enterprise were regularly and repeatedly utilized to make possible the racketeering activity also establishes the conduct of the affairs of the enterprise “through’ a pattern of racketeering activity.‘’
11

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
United States v. Starrett, 55 F.3d 1525, 1542-43 (11th Cir. 1995) (emphasis added) (quoting *16 United States v. Carter, 721 F.2d 1514, 1527 (11th Cir. 1984)). Accordingly, Plaintiffs’ allegation that Mohawk associates with third-party recruiters to effect the hiring and harboring of illegal workers is sufficient to allege Mohawk’s conduct of the affairs of an enterprise.15 Mohawk’s argument that it also participates in its own affairs by employing these illegal workers in its own business, cannot negate Mohawk’s liability for engaging in the conduct the RICO statute proscribes. Accordingly, the District Court correctly held that Plaintiffs had pleaded Mohawk’s participation in the affairs of an enterprise. See Order at 32 (R2-44).
2. Baker is Wrongly Decided, Contrary to Eleventh Circuit Precedent and Would Wreak Havoc with Criminal RICO Prosecutions.
To the extent the Seventh Circuit’s decision in Baker would impose any additional or different requirements to pleading participation in the affairs of an enterprise, it is at odds with this Court’s precedents and should be rejected. As in this case, the Baker plaintiffs brought RICO claims against an employer that associated with third party recruiters for the purpose of procuring and employing illegal workers. 357 F.3d at 686-87. Although the Baker panel assumed these parties were sufficiently distinct to form an association-in-fact enterprise, the panel held that the complaint did not state a claim because the employer was *17 participating only in its own affairs, not the affairs of an enterprise. Id. at 691. On this point, Baker is wrongly decided, inconsistent with Eleventh Circuit law and would curtail the government’s ability to use RICO in criminal prosecutions.
Baker’s brief discussion of the ”“conduct or participate‘’ element consists of a series of questions that the Seventh Circuit does not answer: ”“[H]ow is IBP conducting the affairs of an enterprise through a pattern of racketeering activity?‘’ and ”“Even if the congeries is an enterprise, how is it that IBP operates or manages that enterprise through a pattern of racketeering activity?‘’ 357 F.3d at 691. In response to these questions, the Seventh Circuit offered only the conclusion that the ”“nub‘’ of the Baker complaint was that IBP operated itself rather than an enterprise when it hired illegal workers. Id. Without acknowledging the implications of the employer’s alleged reliance on the services of the enterprise to procure illegal workers, id. at 687, Baker concludes that the Complaint failed to allege the employer’s participation in the enterprise’s affairs.
In this case (as in Baker), the answers to the Seventh Circuit’s rhetorical questions are obvious: (1) Mohawk uses and harbors illegal workers employed by other members of the enterprise, such as TPS; (2) Mohawk hires illegal workers that the other members of the enterprise supply; and (3) Mohawk pays fees to the other members of the enterprise. Compl. „ 76 (R1-1). Indeed, Plaintiffs expect to prove that Mohawk coordinates closely with TPS and the other members of the *18 enterprise concerning when, where and how many illegal workers they will supply to Mohawk. All these activities involve Mohawk’s reliance on the services and facilities of an enterprise that extends beyond Mohawk itself and thereby establish Mohawk’s participation in the affairs of that enterprise. In Elliott, 571 F.2d at 898, Carter, 721 F.2d at 1527, Starrett, 55 F.3d at 1542-43 and most recently in United States v. Pipkins, 378 F.3d 1281 (11th Cir. 2004), this Court has confirmed the self-evident point that Mohawk seeks to avoid here: using the enterprise as a vehicle to commit racketeering activity constitutes participation in the enterprise.
Indeed, the Court’s recent Pipkins decision conclusively rebuts Mohawk’s suggestion that it cannot, as a matter of law, participate in the affairs of an enterprise by hiring illegal workers recruited by the enterprise’s other members. In Pipkins, one of the defendants (”“Pipkins‘’) challenged his RICO conspiracy conviction for running a child prostitution ring on the ground that the government had failed to prove his participation in the affairs of an enterprise. This Court held that the evidence was sufficient for the jury to find Pipkins had agreed to participate in an enterprise with ”“KK,‘’ another pimp, because KK recruited prostitutes for Pipkins and himself: Most tellingly, Pipkins and KK had an agreement to operate in tandem. According to KK, Pipkins said that KK ”“had a good catch hand and that [Pipkins] had a good turn hand, and that I could catch the girls and he would turn them out.‘’ KK explained that this meant that he was adept at finding and bringing girls to Pipkins’ house; Pipkins would win the girls’ loyalties, explain the rules of the game, and convince them to prostitute for him and *19 KK.... Clearly, there was evidence to support a finding that Pipkins and KK agreed to form an enterprise to make money through juvenile prostitution.
Id. at 1291 (citation omitted). Similarly, Plaintiffs allege that Mohawk associates with third-party recruiters who supply
12

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
Mohawk with illegal aliens. At times, Mohawk hires the illegal workers supplied by third-party recruiters to be its own employees, and at other times, it uses them as temporary workers and pays the third-party recruiters a fee. In either case, by accepting these recruits and putting them to work, Mohawk, no less than Pipkins, participates in the enterprise’s affairs.
If this Court followed Baker as Mohawk advocates, however, Pipkins would have escaped RICO liability. Even though Pipkins associated with KK for the purpose of having KK recruit juvenile prostitutes, Pipkins successfully could have argued he was only participating in his own affairs when he sent the girls out to work as prostitutes. Under Baker, Pipkins would not have operated or managed an enterprise when he ran his child prostitution ring, even though he ” “regularly and repeatedly utilized‘’ KK’s recruiting activities ”“to make possible the racketeering activity.‘’ Starrett, 55 F.3d at 1542-43.
Accepting Baker and the argument Mohawk urges upon the Court would bar important criminal RICO prosecutions by allowing any organization to escape liability by pretending that it is merely engaged in its own affairs. In addition to freeing Pipkins, Baker also would have insulated the defendants in Goldin and Thevis from criminal RICO liability. In Goldin, several corporations joined with *20 their owners to cheat their customers by short-weighing scrap metal. If Baker were the law, however, each corporate defendant would have successfully argued that it was only ”“operat[ing] itself unlawfully‘’ since weighing scrap was its business. 357 F.3d at 691. Likewise, in Thevis, where the enterprise consisted of a corporation and individuals running a pornography business, the corporate defendant could have argued it was simply operating itself.16 Eleventh Circuit law does not and should not countenance this result.
3. Baker Does Not Support Dismissal in this Case.
Regardless of how this Court ultimately views Baker, that decision cannot support dismissal here because Baker does not give Mohawk license to ignore the materially different allegations in Plaintiffs’ Complaint. Baker is distinguishable from this case because Plaintiffs have done more than allege ” “that [Mohawk] operates itself unlawfully.‘’ 357 F.3d at 691. The Complaint specifically alleges that Mohawk associates with third parties to accomplish the hiring and harboring *21 of illegal workers. See Compl. „ 76 (R1-1). And although some of those undocumented workers become Mohawk employees, Plaintiffs also allege that others remain in the employ of the enterprise’s other members, such as TPS. Id. This allegation demonstrates that Plaintiffs charge Mohawk with doing more than hiring illegal workers for its own business. To the contrary, Plaintiffs allege that Mohawk also has used and harbored illegal worker that ”“belong‘’ to third parties. Because Baker did not consider an allegation that the defendant corporation used (as temporary employees) illegal workers who remained in the employ of a separate, third-party member of the enterprise, Baker cannot support dismissal in this case.
Finally, Mohawk’s claim that it did not participate in the affairs of an enterprise is a factual argument that must be raised on summary judgment or at trial. In Starrett, 55 F.3d at 1546, this Court noted that ”“[t]he jury was entitled to consider in its entirety all circumstantial evidence of Nolan’s participation in the South Florida Outlaws.‘’17 Because Plaintiffs allege Mohawk’s participation in the affairs of a distinct enterprise, the Court cannot dismiss the Complaint.
*22 C. Plaintiffs Allege That The Mohawk-Plus-Recruiters Enterprise Has The Common Purpose of Profiting From the Illegal Hiring Activity.
Mohawk’s final enterprise argument, that Mohawk and the recruiters do not have a common purpose, also ignores the Complaint and Eleventh Circuit law. The Complaint specifically alleges that ”“[t]he recruiters and Mohawk share the common purpose of obtaining illegal workers for employment by Mohawk.‘’ Compl. „ 77 (R1-1).18 Further, the Complaint alleges that both Mohawk and the recruiters make money when Mohawk hires or uses illegal workers supplied by the recruiters. Id. „ 76. ”“This circuit has held that proof of an association’s devotion to “making money from repeated criminal activity’ demonstrates an enterprise’s common purpose of engaging in a course of conduct, regardless of whether the criminal activity is diverse.‘’ United States v. Church, 955 F.2d 688, 698 (11th Cir. 1992) (quoting United States v. Cagnina, 697 F.2d 915, 921 (11th Cir. 1983)). Given the allegations of the Complaint and Eleventh Circuit law, Mohawk’s speculation that recruiters and employers might have ”“divergent goals‘’ is not a basis for dismissal. 357 F.3d at 691. The Complaint does not allege divergence, and it may not be assumed.19
13

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
*23 II. PLAINTIFFS HAVE STANDING TO PURSUE THEIR RICO CLAIMS FOR LOST WAGES
The Complaint plainly alleges that Mohawk’s repeated RICO violations proximately caused Plaintiffs to suffer a direct injury to their business and property by unlawfully suppressing their wages:
[Plaintiffs] and the Class have suffered an injury to their ”“business or property,‘’ i.e., lost wages, as a direct result of Mohawk’s violations of federal RICO ....‘’ Complaint „ 86 (R1-1).20
In NOW v. Scheidler, 510 U.S. 249 (1994), the Supreme Court held that nothing more is required to plead standing in a civil RICO case. In Scheidler, plaintiffs alleged only that (1) the defendants’ ”“conspiracy “has injured the business and/or property interests of the [petitioners]’ ‘’ and (2) the defendant had threatened unspecified reprisals against one of the petitioners if she refused to quit her job. Id. at 256. The Supreme Court held that these bare allegations were sufficient to confer standing and preclude dismissal on the pleadings:
We have held that ””at the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support the claim.‘’ *24 Id. (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)) (emphasis added). The allegations in Plaintiffs’ Complaint also preclude dismissal for lack of standing.
Mohawk offers three objections to Plaintiffs’ standing: (1) Plaintiffs’ lost wages do not constitute a concrete injury to business or property; (2) Plaintiffs damages are ”“too speculative‘’ and (3) Plaintiffs suffered their injury indirectly. Mhk Br. at 14-24. The thrust of each claim, however, is that Mohawk does not believe Plaintiffs will be able to prove a direct injury as a result of Mohawk’s use, employment and harboring of thousands of undocumented workers. See Compl. „„ 74-75. Of course, that is not the proper inquiry on a motion to dismiss. Rather, the only question is whether Plaintiffs’ allegations-which must be accepted as trueare consistent with any set of facts that would entitle Plaintiffs to relief. See Scheidler, 510 U.S. at 256. Because Plaintiffs’ claims are more than sufficient to confer standing, the Second, Sixth and Ninth Circuits have rejected all the arguments that Mohawk asserts here.21 This Court should affirm the District Court’s conclusion that Plaintiffs have standing to pursue their claims.
*25 A. Plaintiffs’ Allegation That Mohawk Suppressed Their Wages Constitutes an ”“Injury to Business or Property.‘’
Mohawk cannot and does not dispute that lost wages generally qualify as an injury to business or property that satisfies § 1964(c).22 Instead, Mohawk contends that these Plaintiffs cannot recover their lost wages because they ”“accepted‘’ the wage that Mohawk paid them and their interest in lost wages is insufficiently concrete. See Mhk Br. at 16-17.23
These unsupported arguments ignore Plaintiffs’ ”“concrete‘’ interest in and entitlement to wages set by a market free from Mohawk’s violations of federal law. As the Ninth Circuit court explained in a similar case, civil RICO plaintiffs alleging injury due to illegal hiring need not allege a ”“property interest‘’ in their lost wages as if they were pursuing a constitutional claim for denial of due process. See Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1168 n.4 (9th Cir. 2002)24 Rather *26 than having to show that they were promised a higher wage as Mohawk demands here, the Mendoza court held that plaintiffs need only allege ”“a legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes.‘’ Id.
Mohawk’s suggestion that Plaintiffs waived this right by bargaining for and accepting a particular wage improperly rewrites the Complaint. Plaintiffs have not alleged any contract for a specific wage. Rather, as the District Court correctly observed, the Complaint alleges that Mohawk’s employment and harboring of illegal workers unlawfully expands the pool of workers available to Mohawk and thereby adversely affects the wages Mohawk pays Plaintiffs and its other hourly workers. Order at 37 (R2-44). Just as an employer charged with gender discrimination cannot avoid liability by arguing the plaintiff accepted lower wages than the men who held the same job, Mohawk cannot avoid its duty to comply with the federal hiring and immigration laws by claiming Plaintiffs accepted their unlawfully depressed wages.
14

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
Moreover, the Supreme Court’s interpretation of the Clayton Act’s identical ” “business or property‘’ terminology,25 establishes that a party who pays, i.e., *27 ”“accepts,‘’ a price unlawfully inflated by a violation of the antitrust laws has standing to pursue that injury:
We think it sound to hold that when a buyer shows that the price paid by him for materials purchased for use in his business is illegally high and also shows the amount of the overcharge, he has made out a prima facie case of injury and damage within the meaning of section 4 [of the Clayton Act].‘’
Hanover Shoe v. United Shoe Machine Corp., 392 U.S. 481, 489 (1968). Rather than precluding injury, paying a supracompetitive price gives rise to the injury-in-fact required to state a claim. See, e.g., In re Polypropylene Carpet Antitrust Litig., 178 F.R.D. 603, 609 (N.D. Ga. 1997) (only plaintiffs that absorbed the illegal cost increase by purchasing carpet subject to a price-fixing scheme had standing to pursue antitrust claims). By the same token, Plaintiffs’ receipt of lower wages due to Mohawk’s illegal conduct gives rise to a concrete injury to property in this case.
To support its contrary argument, Mohawk cites several cases that preclude recovery of gambling losses under RICO. In these cases, the courts found no injury to business or property because the plaintiffs, who paid money to purchase packs of trading cards hoping to receive randomly distributed collectible cards, had received precisely what they bargained for. See, e.g., *28 Price v. Pinnacle Brands, Inc., 138 F.3d 602, 607 (5th Cir. 1998).26 The distinction in this case is obvious: Mohawk’s compliance with federal immigration law is mandatory, not a game of chance. Plaintiffs did not agree to accept the risk that Mohawk would illegally suppress their wages by hiring and harboring thousands of undocumented workers. As the District Court held, this is a concrete injury to Plaintiffs’ business or property. See Order at 36-37 (R2-44).
B. Plaintiffs’ Claims For Damages Are Not Speculative And Cannot Be Dismissed on the Pleadings.
Mohawk’s argument that Plaintiffs’ damages are too speculative devolves to a naked claim that Plaintiffs will be unable to prove the precise wage effect of Mohawk’s illegal conduct. Mohawk argues that a host of intervening factorsnone of which appear in the Complaint--contradict Plaintiffs’ theory of the case and will render Plaintiffs’ damages uncertain and impossible to measure. See Mhk. Br. at 18-22. Even if Mohawk were correct on these points--and it is not-- Mohawk’s arguments must be reserved for summary judgment, after the parties have had the opportunity to conduct discovery and develop expert testimony.
*29 Two Courts of Appeals have directly rejected the same arguments that Mohawk makes here as premature and reinstated complaints that similarly sought to recover wages lost as a result of an employer’s scheme to hire large numbers of undocumented workers.27 In Mendoza, the district court dismissed because other market factors, including the skills and qualifications of each worker, the availability of legal workers and the profitability of defendants’ business could have prevented plaintiffs from receiving higher wages even in the absence of illegal hiring.28 The Ninth Circuit reversed because the plaintiffs alleged the defendants had the ability to depress wages through their conduct and had done so. Id. at 1171.29 Those allegations entitled plaintiffs to develop and present proof, including expert testimony, regarding the effect of the defendants’ illegal hiring. Id.
The Sixth Circuit reached the same conclusion in Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 618-19 (6th Cir. 2004), where Tyson argued that plaintiffs’ *30 chain of reasoning was speculative due to the same laundry list of contingencies. Id. Although the district court dismissed, the Court of Appeals reinstated the complaint because Tyson’s arguments turned on questions of fact that could only be resolved with evidence:
Tyson may be right--but we cannot say so at this preliminary stage in the proceeding. Given the unadorned allegations in the complaint, given the requirement that we must assume plaintiffs will be able to prove them and given the absence of any discovery (or expert reports) thus far, Tyson’s argument requires us to do as much speculating as plaintiffs’ multi-link chain of causation allegedly requires us to do. There are many fact-driven questions here ... and the speculativeness of our answers to all of them counsels against resolving this dispute as a matter of law at this early stage of the case. Id. at 619.30
As in Mendoza and Trollinger, Plaintiffs have alleged that Mohawk’s illegal conduct allows the company to pay depressed
15

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
wages and that Mohawk has done so. See Compl. „„ 3, 13-14, 33-35, 38 (R1-1). As in those cases, the issues Mohawk raises ”“are exceedingly complex and best addressed by economic experts and other evidence at a later stage in the proceedings.‘’ Mendoza, 301 F.3d at 1171 (emphasis added).31 Because the questions of whether and to what extent *31 Mohawk’s hiring and harboring of illegal workers has affected Plaintiffs’ wages are factual disputes that cannot be resolved on the pleadings, they cannot serve as the basis for a Rule 12 dismissal.
Moreover, this Court has permitted the recovery of RICO injuries far less concrete than those alleged here. In Maiz v. Virani, 253 F.3d 641 (11th Cir. 2001), plaintiffs sought and recovered damages for (1) funds the defendants defrauded from them and (2) the ”“lost value‘’ they would have earned had their funds been invested in other ventures. This Court sustained the multi-million dollar judgment because the ”“lost value‘’ damages were a recoverable injury to business and property under RICO, even though the returns were not guaranteed and were contingent on other market factors. Id. at 662-66. The financial injury plaintiffs suffered here is far less speculative than the scope of damages recovered in Maiz.
Mohawk also argues that the Complaint should be dismissed because Plaintiffs’ wage-suppression theory supposedly makes no economic sense. Mhk. Br. at 20-21. Based on the economic laws of supply and demand, Plaintiffs’ theory is the same one that repeatedly has led Congress to pass legislation to prevent employers from importing inexpensive labor that drives down wages for domestic workers.32 It is the same theory that led the Supreme Court to observe that *32 ”“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.‘’ DeCanas v. Bica, 424 U.S. 351, 356-57 (1976). The most important point, however, is that Mohawk cannot win dismissal by making economic allegations that contradict the Complaint.33 As in Mendoza, Plaintiffs’ theory ”“[t]hat wages would be lower if, as alleged, the [defendant] relied on a workforce consisting largely of undocumented workers, is a claim at least plausible enough to survive a motion to dismiss.‘’ 301 F.3d at 1171.
Mohawk contradicts the Complaint when it argues that Plaintiffs have failed to allege that all the predicate acts contribute to Mohawk’s suppression of their wages suppression theory. See, e.g., Compl. „„ 85-86 (R1-1) (attributing Plaintiffs’ *33 injury to all Mohawk’s violations of federal law).34 At the pleading stages of a RICO case, this allegation is sufficient to ”“embrace those specific facts that are necessary to support the claim.‘’ Scheidler, 510 U.S. at 256.35 More importantly, the law does not require Plaintiffs to plead or prove that each predicate is the sole, independent cause of Plaintiffs’ injury. See Cox v. Administrator, 17 F.3d 1386, 1399 (11th Cir. 1994) (”“proximate cause is not ... the same thing as a sole cause‘’). As the District Court properly held, Plaintiffs may recover on any of these predicate acts by proving that Mohawk’s conduct was ”“a substantial factor in the sequence of reasonable causation.‘’ Order at 40 n.7 (R2-44) (quoting *34 Maiz, 253 F.3d at 675 and Cox, 17 F.3d at 1399); accord Trollinger, 370 F.3d at 619-20.36 As a result, the economic impact of all Mohawk’s illegal activity is a matter on which Plaintiffs are entitled to conduct discovery.
C. Plaintiffs Have Alleged A Direct Injury.
Finally, Mohawk contends that Plaintiffs cannot pursue their claims because they are not the direct victims of Mohawk’s illegal conduct. In Holmes v. SIPC, 503 U.S. 258 (1992), the Supreme Court denied standing to RICO plaintiffs who suffer derivative or “passed-on’ injuries. See Trollinger, 370 F.3d at 613-14. In an attempt to avail itself of this authority, Mohawk contends that the illegal workers are the direct victims of Mohawk’s illegal conduct and Plaintiffs’ injury therefore is indirect. See Mhk Br. at 23.
The fatal detect in Mohawk’s argument is that it contradicts the Complaint, which alleges that Mohawk employs illegal workers for the purpose and with the effect of reducing the wages that Mohawk pays its hourly employees. See Compl. „„ 33, 35, 38, 82 (R1-1). Nothing more is required to confer standing in a RICO case. See Maiz, 253 F.3d at 656 (proof that defendants targeted plaintiffs, among *35 other entities, was sufficient to show standing at trial). Because Plaintiffs sell their services directly to Mohawk, they are directly victimized by Mohawk’s illegal conduct and have standing to pursue claims for their lost wages in the same way that a direct purchaser may pursue damages for price-fixing under the Clayton Act. See Trollinger, 370 F.3d at 616 (”“if direct purchasers who pay too much “obviously assert a direct injury’, so do direct employees who receive too little.‘’) (citation omitted); Mendoza, 301 F.3d at 1169-70 (same).37
Mendoza and Trollinger thoroughly consider the substance of Mohawk’s argument and reject it. Like Plaintiffs here, the Mendoza plaintiffs alleged that their employers’ illegal hiring scheme had the purpose and direct effect of depressing their
16

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
wages. 301 F.3d at 1170. Because ”“[n]either the government nor the undocumented workers are an intervening third party in this scheme,‘’ the Ninth Circuit held that ”“[t]he claims here thus differ fundamentally from the passed-on injury cases.‘’ Id. As a result, the court was ”“unable to discern a more direct victim of the illegal conduct‘’ than defendants’ legal workers. Id. Trollinger rejects a similar suggestion that the employees’ union was the only direct victim of the employer’s illegal hiring because ”“the direct employment relationship between *36 Tyson and plaintiffs distinguishes this dispute from the Holmes line of cases, where the plaintiffs had no relationship with the defendants except through intermediaries.‘’38 Because Plaintiffs here, like the Mendoza and Trollinger plaintiffs, sell their services directly to Mohawk without any intermediary, their injury is direct and Holmes cannot support a dismissal.
III. MOHAWK IS NOT IMMUNE FROM PLAINTIFFS’ GEORGIA RICO CLAIMS
The District Court granted Mohawk’s motion to dismiss Plaintiffs’ Georgia RICO claim to the extent it is predicated on violations of 8 U.S.C. § 1324, but refused to dismiss the Georgia RICO claim based on Mohawk’s violation of 18 U.S.C. § 1546. See Order at 45-49 & n.8 (R2-44). On appeal, Mohawk argues it is immune from liability under Georgia’s RICO statute because ”“a corporation itself is not capable of committing a crime.‘’ Mhk Br. at 24. That is not the law, as numerous corporations held liable for violating the Georgia RICO statute can attest.39
*37 Rather (and as Mohawk concedes at page 25 of its brief), Georgia law provides that corporations can be held responsible for criminal violations in two circumstances: ( ) if the criminal statute indicates a legislative purpose to impose liability on a corporation, and a corporate agent commits an element of the crime within the scope of his employment and on the corporation’s behalf, see O.C.G.A. § 16-2-22(a)(1), or (2) the corporation’s managerial employees approve, request or recklessly tolerate the crime while acting on the corporation’s behalf, id. § 16-2-22(a)(2). See Order at 46 (R2-44).40 Because the District Court concluded that the Georgia RICO statute reveals no clear intent to subject corporations to liability, the court held corporations cannot be prosecuted for violating the statute on the basis of § 16-2-22(a)(1). See Order at 46-47 (R2-44). As a result, the District Court restricted Plaintiffs to prosecuting their Georgia RICO claim under § 16-2-22(a)(2). Id. at 47-49 (R2-44). On appeal, Mohawk seeks total immunity from liability for its Georgia RICO violations by arguing that it cannot be held responsible under either § 6-2-22(a)( 1) or (2). This Court should make clear that corporations are subject to prosecution for violating Georgia’s RICO statute under both of § 6-2-22(a)’s provisions.
*38 A. Because Georgia’s RICO Statute Evidences A Clear Intent to Subject Corporations To Liability, Mohawk Can Be Held Responsible Under O.C.G.A. § 16-2-22(a)(1).
As Mohawk acknowledges, a corporation may be held criminally responsible for its agents’ conduct under § 16-2-22(a)(1) if the criminal statute at issue ” “clearly indicates a legislative purpose to impose liability on [a] corporation [s].‘’ Mhk Br. at 25. The Georgia legislature clearly expressed that purpose in the RICO statute by imposing liability on any ”“person‘’ that engages in the proscribed conduct. See O.C.G.A. § 16-14-4(a-c). The initial chapter of Georgia’s criminal code provides ”“for the purpose of this title [16], the term ... “Person’ means an individual, a public or private corporation [.]‘’ O.C.G.A. § 16-1-3(12). Because a private corporation is ” “unquestionably a “person’ under the RICO Act,‘’ Reaugh v. Inner Harbour Hosp., Ltd, 214 Ga. App. 259, 264, 447 S.E.2d 617, 622 (1994), the statute plainly expresses the legislature’s intent to hold corporations liable.
Further direct evidence of this intent appears in the Georgia RICO statute’s penalty provisions. Section 16-14-6(a)(5) permits a court to forfeit the charter of a domestic corporation or revoke a foreign corporation’s certificate to do business in Georgia. Similarly, § 16-14-6(a)(3) permits a court to dissolve or reorganize any ”“enterprise,‘’ which the Georgia RICO statute defines to include *39 ””corporations,‘’ id. § 16-14-3(6).41 Finally, § 16-14-15 requires alien corporations to establish an agent for service of process and register with the Secretary of State before acquiring real property within the state to ensure that these foreign corporations cannot evade forfeiture penalties for violating the Georgia RICO statute. See In re Five Star Partners, L.P., 169 B.R. 994, 1006 (Bankr. N.D. Ga. 1994). Any reading of the Georgia RICO act that immunizes all corporations from liability would violate Georgia’s basic canons of statutory construction by depriving these corporate penalty provisions of any meaning whatsoever.42
17

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
Rather than address these statutory indicators that the legislature intended Georgia RICO to apply to corporations, the District Court relied on a passing parenthetical comment in Cobb County v. Jones Group, 218 Ga. App. 149, 153, 460 S.E.2d 516, 521 (1995) that was subsequently repeated in a footnote in Clark v. Security Life Ins. Co., 270 Ga. 165, 167 n.11, 509 S.E.2d 602, 604 n. 11 (1998). See Order at 46-47 (R2-44). These remarks were made without analysis because both the Cobb County and Clark courts already had concluded the defendant faced criminal RICO liability on alternative grounds. See *40 Clark, 270 Ga. at 168, 509 S.E.2d at 604 (finding liability under § 16-2-22(a)(2)); Cobb County, 218 Ga. App. at 153, 460 S.E.2d at 521 (same). As a result, these additional observations from Clark and Cobb County do not constitute the holding of either case and they should neither bind nor persuade this Court in the face of clear evidence that the Georgia RICO statute is intended to apply to corporations. In the event, however, that this Court finds itself in any doubt on Georgia’s law on this point, Plaintiffs respectfully request the Court to certify this limited question to the Georgia Supreme Court while the parties continue to litigate Plaintiffs’ other claims and theories of liability.
B. Plaintiffs’ Allegations State a Claim Under O.C.G.A. § 16-2-22(a)(2).
Mohawk also acknowledges that it may be held criminally liable for violations of Georgia RICO, if the crime is authorized, requested or ”“recklessly tolerated‘’ by managerial officials. Mhk Br. at 25 (quoting O.C.G.A. § 16-2-22(a)(2)). The Complaint specifically alleges that Mohawk supervisors have committed the predicate acts, see Compl. „„ 20-21, 28, 31 (R11), and more generally alleges that Mohawk, i.e., the corporation acting through its officers and employees, has committed the predicate acts. Fed. R. Civ. P. 8 requires nothing *41 beyond this ”“short and plain statement,‘’ to notify Mohawk of the substance of Plaintiffs’ claims.43
State v. Military Circle Pet Center No. 94, Inc., 257 Ga. 388, 360 S.E.2d 248 (1987), confirms that the additional details Mohawk demands on appeal are matters of proof, not pleading. That case holds the state need not charge the details of corporate criminal responsibility under § 16-2-22(a)(2) in a criminal indictment, which is subject to a far more rigorous pleading standard than applicable here:
Although the state must prove the applicable provisions of the foregoing code provisions [including § 1622-2] at trial against a criminal defendant, it is not necessary that the state allege these provisions in the accusation. Id. at 389-90, 360 S.E.2d at 249 (emphasis added).44
At trial, Plaintiffs certainly expect to prove that Mohawk and its managerial officials authorized, committed or ”“recklessly tolerated‘’ the criminal conduct alleged in the Complaint. Because proving that set of facts certainly would be ”“consistent with the allegations‘’ of the Complaint, the Court may not dismiss Plaintiffs’ claims. Scheidler, 510 U.S. at 256. Accordingly, this Court should allow Plaintiffs to proceed with their Georgia RICO claims, *42 and hold that Plaintiffs may establish Mohawk’s criminal responsibility under either subsection of § 16-2-22(a).45
IV. PLAINTIFFS HAVE ALLEGED A CAUSE OF ACTION FOR UNJUST ENRICHMENT UNDER GEORGIA LAW
Georgia law affords a cause of action for unjust enrichment to recover the value of any benefit conferred upon the defendant and which, under the circumstances, the defendant should not be entitled to retain. See Regional Pacesetters, Inc. v. Halpern Enters., Inc., 165 Ga. App. 777, 300 S.E.2d 180 (1983). Mohawk’s sole argument for dismissal is that unjust enrichment cannot lie where there is an express contract. Mohawk’s argument contradicts the Complaint because Plaintiffs have not alleged any express contract in which Plaintiffs accepted a particular wage. The Court cannot assume such a contract exists merely because Mohawk says so in its brief, particularly when Mohawk’s Answer denies even employing any of the Plaintiffs. See R2-48, „„ 5-8. More importantly, Mohawk fails to cite a single case that dismisses an unjust enrichment claim for the plaintiffs failure to allege the absence of an express contract.
Second, the decisions that Mohawk cites require proof of an express agreement to bar a claim for unjust enrichment. See, e.g., Pryor v. CCEC, Inc., 257 Ga. App. 450, 452 (2002) (express contract); *43 Kwickie/Flash Foods, Inc. v. Lakeside Petroleum, Inc., 246 Ga. App. 729, 730 (2000) (same). By contrast, an unjust enrichment claim may coexist with an implied contract.46
18

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...
At this stage of the case, the record does not reveal what type of contract may be at issue. In the event the evidence demonstrates an implied contract, Plaintiffs will be entitled to pursue their claim for unjust enrichment. Accordingly, the Court may not dismiss the claim on the pleadings.
More importantly, Mohawk’s argument misses the point of Plaintiffs’ unjust enrichment claim. Plaintiffs allege Mohawk has unjustly enriched itself at Plaintiffs’ expense by employing and harboring thousands of illegal workers. The Complaint further alleges this conduct allowed Mohawk to extract substantial wage savings from all its hourly employees and thereby earn millions of dollars in unlawful profits. Because it would be inequitable to permit Mohawk to retain these ill-gotten gains, Plaintiffs seek an order requiring Mohawk to disgorge its illegal profits, not merely an award of back pay. See Compl. „„ 106-110 (R1-1). In this sense, Plaintiffs’ unjust enrichment is no different than similar claims *44 asserted to recover the profits due to unlawful overcharges ”“accepted‘’ by the plaintiffs in civil antitrust cases.47

CONCLUSION
Plaintiffs have pleaded the requisite elements of their claims, and they should be permitted to proceed with their action. This Court should affirm the District Court’s thorough and well-reasoned decision to deny Mohawk’s motion to dismiss Plaintiffs’ federal and Georgia RICO claims. The Court should also affirm the District Court’s decision to deny Mohawk’s motion to dismiss Plaintiffs’ unjust enrichment claim.
Finally, the Court should reverse the District Court’s ruling that limits Plaintiffs to pursuing their Georgia RICO claims pursuant to O.C.G.A. § 16-2-22(a)(2). Because the Georgia RICO statute is plainly intended to apply to corporations like Mohawk, Plaintiffs also should be permitted to employ O.C.G.A. § 16-2-22(a)(1) to establish Mohawk’s corporate criminal responsibility. In the event this Court concludes that the Georgia law is unclear on this point, Plaintiffs *45 request that the Court certify this single question to the Georgia Supreme Court while the parties proceed to discovery on Plaintiffs’ remaining theories of liability.

Footnotes

1

Specifically, Plaintiffs allege that Mohawk’s predicate acts include violations of 8 U.S.C. § 1324 and 18 U.S.C. § 1546. Id. „„ 58-

66 (R1-1). Although Mohawk argued to the District Court that Plaintiffs failed to plead the elements of certain of these predicates,

Mohawk has not raised that argument on appeal.

2

The District Court granted Mohawk’s motion to dismiss Plaintiffs’ claim for unjust enrichment with respect to Mohawk’s savings

on workers’ compensation benefits. See Order at 53 (R2-44). The District Court also denied Plaintiffs leave to amend their Georgia

RICO claim specifically to include predicate violations of 8 U.S.C. § 1324. Id. at 49 n.8 (R2-44).

3

See generally Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 151 (1987) (”“Both... [RICO and the antitrust laws]

bring to bear the pressure of private attorneys general on a serious national problem for which public prosecutorial resources are

deemed inadequate‘’).

4

By contrast, Georgia’s RICO statute does not require Plaintiffs to plead or prove an enterprise. See O.C.G.A. § 16-14-4(a); Dover

v. State, 192 Ga. App. 429, 430, 385 S.E.2d 417, 420 (1989). Accordingly, Mohawk cannot extend its enterprise arguments to

defeat Plaintiffs’ Georgia RICO claims.

5

See also United States v. Valera, 845 F.2d 923 (11th Cir. 1988) (a RICO enterprise may be as amorphous as a pick-up basketball

game in which the core players ”“sub-in‘’ as needed); United States v. Hewes, 729 F.2d 1302, 1311 (11th Cir. 1984) (”“[A] RICO

enterprise exists when a group of persons associates, formally or informally, with the purpose of conducting illegal activity.‘’).

6

See Goldin Indus., 219 F.3d at 1275 n.6 (corporations and individual owners who associated to defraud corporations’ customers

constituted enterprise); United States v. Thevis, 474 F. Supp. 134, 137 (N.D. Ga. 1979) (”” “a group of individuals associated in

fact with various corporations’ ‘’ to operate a pornography business constituted a RICO enterprise) (quoting indictment), aff’d, 665

F.2d 616, 625 (5th Cir. 1982).

7

This concession belies Mohawk’s insinuation that Plaintiffs seek to expand RICO beyond all recognizable boundaries. Compare

Mhk Br. at 12-13 & n.6 (RICO’s prototypical purpose is to protect legitimate business from criminal infiltration) with Cedric

19

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...

Kushner Promotions. Ltd. v. King, 533 U.S. 158, 164 (2001) (RICO is also intended to protect the public from enterprises used as a vehicle to commit unlawful activity) and Turkette, 452 U.S. at 589-91 (rejecting argument that RICO is addressed only to the criminal infiltration of legitimate business).

8

See, e.g.. Westways World Travel v. AMR Corp., 182 F. Supp.2d 952, 959 (C.D. Cal. 2000) (Fitzgerald does not preclude an

enterprise consisting of an airline defendant and a separate company operating a reservation system for the benefit of the defendant

and other airlines).

9

See also Begala v. PNC Bank, Ohio N.A., 214 F.3d 776, 781 (6th Cir. 2000) (where Plaintiffs did not allege that dealers were

agents or members of the defendant RICO person, it would violate established Rule 12(b)(6) procedures for the court to infer that

relationship in order to dismiss the complaint).

10

Cedric Kushner distinguished cases, like those cited at page 10 of Mohawk’s brief, in which the plaintiff attempted to construct an

enterprise out of the defendant corporation and its employees. 533 U.S. at 164 (distinguishing but not approving Riverwoods

Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339 (2d Cir. 1994) and Discon, Inc. v. NYNEX Corp., 93 F.3d 1055 (2d

Cir. 1996)). Both Riverwoods and Discon are cited prominently in Fitzgerald, 116 F.3d at 226, a pre-Cedric Kushner decision

upon which Mohawk so heavily relies.

11

See Restatement (Third) of the Law of Agency § 1.01 cmt. c (”“The elements of common-law agency are present in the

relationships between employer and employee, corporation and officer‘’).

12

Accord Westways, 182 F. Supp.2d at 959-60 (”“Merely acting as an agent at times does not negate the distinctiveness of [the

defendant] as an entity separate from [another member of the enterprise].‘’)(emphasis added).

13

Mohawk’s agency argument would preclude a RICO prosecution even if the company engaged a hit man to assassinate the

president of a competing carpet company. Although, the hit man undoubtedly would qualify as Mohawk’s agent, there can be no

doubt that Mohawk’s association in fact with this agent would be sufficient to sustain a RICO enterprise. See, e.g., United States v.

Muyet, 994 F. Supp. 501, 506 & 515-16 (S.D.N.Y. 1998) (affirming RICO convictions where the enterprise consisted of a criminal

gang and a ”“freelance‘’ killer for hire who was not a gang member).

14

RICO makes it ”“unlawful for any person employed by or associated with any enterprise...to conduct or participate, directly or

indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity....‘’ 18 U.S.C. § 1962(c).

15

See also Elliott, 571 F.2d at 898 (the RICO statute extends to reach any association of individuals that ”“furnishes a vehicle for the

commission of two or more predicate acts‘’).

16

The same argument also would have afforded immunity from RICO prosecution to the defendants in United States v. Massey, 89

F.3d 1433 (11th Cir. 1996) (attorney convicted of violating RICO for purpose of generating court appointed representations);

United States v. Castro, 89 F.3d 1443 (11th Cir. 1996) (same); United States v. Norton, 867 F.2d 1354 (11th Cir. 1989) (defendants

who paid kickbacks to union health plan to win contracts for their business participated in RICO enterprise); and United States v.

Hewes, 729 F.2d 1302 (11th Cir. 1984) (defendants violated RICO by operating corporations in a manner designed to fraudulently

induce the extension of credit). See also Klay v. Humana, Inc., __ F.3d __, 2004 WL 1938845 (11th Cir. Sept. 1,2004) (certifying a

civil RICO class action against HMO’s each engaged in their own businesses).

17

See also Chen, 315 F. Supp.2d at 901-08 (addressing the enterprise questions considered in Baker and Fitzgerald at summary

judgment).

18

Order at 35 (R2-44) (”“Because the Complaint in this case explicitly alleges that a common purpose exists - obtaining illegal

workers for employment by [Mohawk] - the Court cannot agree with [Mohawk] that Plaintiffs’ Complaint is deficient.‘’).

19

Moreover, Baker’s suggestion that divergent goals exist because recruiters want to be paid more and employers want to pay them

less is untenable. In ”“traditional‘’ RICO drug distribution enterprises, dealers want to be paid more and suppliers want to pay

them less, but that does not destroy the dealers and suppliers’ common purpose of making money from repeated criminal activity.

Indeed, in Church, 955 F.2d at 691-92, the enterprise members’ goals diverged to the point where one ordered the other murdered,

but that did not destroy their enterprise’s common purpose. Id. at 698.

20

See also id. „„ 3, 35, 38, 43, 47, 85-87, 89-92, 105 (R1-1).

21

See Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 619 (6th Cir. 2004); Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1168-70 (9th

Cir. 2002); Commercial Cleaning Servs., Inc. v. Colin Serv. Sys., Inc., 271 F.3d 374, 380-85 (2d. Cir. 2001).

20

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...

22

See, e.g., Dailey v. Quality School Plan, Inc., 380 F.2d 484, 486-87 (5th Cir. 1967) (claims for diminished commissions allege an

injury to business or property under § 4 of the Clayton Act); Libertad v. Welch, 53 F.3d 428, 437 n.4 (1st Cir. 1995) (lost wages

qualify as a concrete injury to business or property in a civil RICO case); Jund v. Town of Hempsted, 941 F.2d 1271, 1286 (2d Cir.

199 1) (lost wages are property under RICO).

23

The Georgia RICO statute does not restrict civil recovery to injuries to ”“business or property.‘’ See Reaugh v. Inner Harbor

Hosp., Ltd., 214 Ga. App. 259, 265, 447 S.E.2d 617 (1994). To the extent Mohawk’s standing arguments depend on this federal

requirement, they have no bearing on Plaintiffs’ Georgia claims.

24

Unlike this case, Turnquist v. Elliott, 706 F.2d 809, 812 (7th Cir. 1983) and Daneielsen v. Burnside-Ott Aviation Training Ctr., 941

F.2d 1220, 1229 (D.C. Cir. 1991) upon which Mohawk relies, involve claims that the defendant failed to pay the plaintiff a wage

set by statute.

25

Like § 1964(c) of the RICO statute, § 4 of the Clayton Act allows ”“person[s] who shall be injured in his business or property by

reason of anything forbidden in the antitrust laws‘’ to bring private civil suits for treble damages. 15 U.S.C. § 15(a). And the

Supreme Court has recognized that ”“even a cursory comparison of the two statutes reveals that the civil action provision was

patterned after the Clayton Act.‘’ Agency Holding Corp., 483 U.S. at 151 (noting the Congress’s reliance on the Clayton Act model

in drafting RICO).

26

Chaset v. Fleer/Skybox Int’l, 300 F.3d 1083 (9th Cir. 2002), Dumas v. Major League Baseball Props., Inc., 104 F.Supp.2d 1220

(S.D. Cal. 2000) and Doug Grant, Inc. v. Great Bay Casino Corp., 3 F. Supp.2d 518 (D.N.J. 1998) are to the same effect.

27

The Second Circuit rejected a substantially similar proximate cause challenge when it reinstated a RICO complaint that sought to

recover profits lost due to a competitor’s employment of illegal aliens. See Commercial Cleaning Servs., LLC v. Colin Serv. Sys.,

Inc., 271 F.3d 374, 382 (2d Cir. 2001).

28

Compare Mendoza, 301 F.3d at 1170-71 (describing district court’s recitation of possible intervening factors) with Mhk Br. at 19-

20.

29

Mohawk cannot distinguish Mendoza on the basis of the Ninth Circuit’s discussion of antitrust market power. Although RICO and

the Clayton Act are analogous, RICO plaintiffs do not have to allege market power, antitrust injury or RICO equivalents to state a

claim. See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 493-99 (1985). Indeed, the Sixth Circuit affirmed plaintiffs’ standing to

pursue lost wages due to a similar illegal hiring scheme absent any apparent allegation or discussion of the single employer’s

market power. See Trollinger, 370 F.3d at 619-20.

30

See also Cox v. Administrator United States Steel & Carnegie, 17 F.3d 1386, 1399 (11th Cir. 1994) (evidence that other economic

factors may have contributed to plaintiffs’ loss is not sufficient to grant summary judgment on proximate cause element of a RICO

claim).

31

The dictum from Baker, 357 F.3d at 692, on which Mohawk relies suggests only that it will be difficult for plaintiffs to prove (not

plead) that suppressed wages are attributable to violations of immigration law. Those questions of proof cannot support dismissal.

See Order at 44-45 (R2-44).

32

For example, Congress enacted alien contract labor laws in the late 1800s to respond to employers’ practice of encouraging excess

immigration ” “to oversupply the demand for labor so that the domestic laborers would be forced to work at reduced wages.‘’ H.R.

Rep. No. 1365, 82d Congress, 2d Sess., 1952 U.S.C.C.A.N. 1653 (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). The same economic considerations led Congress to enact the Immigration Reform

Control Act in 1986. See Patel v. Quality Inn South, 846 F.2d 700, 704 (11th Cir. 1988) (”“Congress enacted the IRCA to reduce

illegal immigration by eliminating employers’ economic incentive to hire undocumented aliens‘’).

33

The heightened summary judgment standards the Supreme Court announced for certain antitrust claims in Matsushita Elec. Indus.

Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) and which Mohawk invokes sub silentio, have not been extended to permit

dismissal of a RICO complaint before any discovery or expert analysis. The lone case Mohawk cites to support dismissal for

failure to plead a viable economic theory, Lerma v. Univision Communications, Inc., 52 F. Supp. 2d 1011 (E.D. Wis. 1999), is

inapplicable here because it concerns the pleading requirements for a refusal to deal claim under Wisconsin antitrust law.

34

See also Compl. „„ 13-38 (R1-1).

21

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831...

35

In a footnote, Mohawk argues that because Plaintiffs have invoked RICO, they must satisfy Fed. R. Civ. P. 9(b)’s heightened

pleading requirements. See Mhk Br. at 21 n. 11. The text of Rule 9(b), however, imposes that requirement only on averments of

fraud or mistake. As the District Court properly held, Plaintiffs’ complaint includes no such averment and Rule 9(b) therefore does

not apply. See Order at 16-21 (R2-44). See also Leatherman v. Tarrant County Narcotics Intel. & Coord. Unit, 507 U.S. 163, 168

(1993) (rejecting attempts to extend Rule 9(b) by judicial interpretation); Mendoza, 301 F.3d at 1168 (applying Rule 8 to the same

RICO predicates). Plaintiffs’ allegation that Mohawk violated 18 U.S.C. § 1546 by accepting false documents does not aver fraud.

To the contrary, Plaintiffs allege a total absence of fraud in that Mohawk accepted documents it knew or had reason to know were

false or obtained by false statement. Compare Compl. „„ 16-17, 19-21, 63-64 (R1-1) with United States v. Polar, 369 F.3d 1248,

1252-53 (11th Cir. 2004) (§ 1546(a) requires only that the defendant act with knowledge; it does not impose any additional scienter

requirement).

36

These authorities similarly answer Mohawk’s argument that Plaintiffs’ cannot ”“establish‘’ proximate cause to support their

Georgia RICO claims. Mhk Br. at 27-28. To prevail at trial, Plaintiffs need only prove that Mohawk’s practice of knowing

acceptance of false employment documents in violation of 18 U.S.C. § 1546 is a substantial factor in the chain of causation. At this

stage, however, plaintiffs need only plead that Mohawk’s conduct has proximately caused their injury, as they do at Compl. „„ 93-

95. (R1-1).

37

It is this direct employment relationship that distinguishes Plaintiffs from every other hourly worker in Georgia and renders

Plaintiffs’ injury direct. See Mhk Br. at 23. Moreover, even if Mohawk’s illegal conduct causes some additional injury to any other

class of worker, that collateral injury does not render Plaintiffs’ injury less direct. See, e.g., Commercial Cleaning, 271 F.3d at 383-

84 (defendant’s illegal hiring may have more than one category of direct victim).

38

See also Commercial Cleaning, 271 F.3d at 382-84 (holding that a competitor claiming the loss of profitable contracts due to

defendants’ illegal hiring alleged a direct injury that could not be dismissed under Holmes).

39

See, e.g., Reaugh v. Inner Harbour Hosp., Ltd., 214 Ga. App. 259, 264-65, 447 S.E.2d 617, 622 (1994) (”“[t]he fact that

[defendant] was a legitimate corporation does not insulate it from RICO liability.‘’); Cotton, Inc. v. Phil-Dan Trucking, Inc., 270

Ga. 95, 507 S.E.2d 730 (1998) (affirming entry of preliminary injunction against corporate defendant under Georgia RICO);

Federal Ins. Co. v. Westside Supply Co., Inc., 264 Ga. App. 240, 590 S.E.2d 224 (2003) (affirming denial of summary judgment to

corporate defendant on Georgia RICO claim); Schoenbaum Ltd. Co., LLC v. Lenox Pines, LLC, 262 Ga. App. 457, 585 S.E.2d 643

(2003) (same).

40

Indeed, the passage from Byrne v. Nezhat, 261 F.3d 1075, 1105 (11th Cir. 2001), upon which Mohawk bases its suggestion that

corporations cannot commit any crime under Georgia law, expressly acknowledges that corporations may be held criminally liable

for the acts of their employees and agents pursuant to § 16-2-22.

41

See also O.C.G.A. § 16-14-6(a)(4) (authorizing the revocation of any license issued to an enterprise); id. § 16-14-13(c)

(authorizing state investigative agency to file RICO liens against persons, including any corporate names).

42

See Motors Acceptance Corp. v. Rozier, 278 Ga. 52, 53, 597 S.E.2d 367, 368 (2004) (”“This Court is to construe the statute to give

sensible and intelligent effect to all of its provisions and to refrain from any interpretation which renders any part of the statute

meaningless.‘’); State v. English, 276 Ga. 343, 348, 578 S.E.2d 413 (2003) (applying same canon in the criminal context).

43

In the event this Court concludes that Plaintiffs’ Complaint is lacking on this point, Plaintiffs request leave to clarify the point by

amending their complaint. See Fed. R. Civ. P. 15(a).

44

See also Clark, 270 Ga. at 168, 509 S.E.2d at 605 (question of corporate criminal liability under this provision is for the jury).

45

For Plaintiffs’ response to Mohawk’s proximate cause arguments under Georgia RICO see supra Part II(B) & n.36.

46

See e.g., Federal Ins. Co. v. Westside Supply Co., 264 Ga. App. 240, 247-48, 590 S.E.2d 224, 232 (2003) (absent a breach of an

express contract, questions of fact would preclude summary judgment on unjust enrichment and implied contract claims); A.D.

Adair & McCarty Bros. v. Central Bank & Trust. Corp., 20 Ga. App. 811, 93 S.E. 542 (1917) (unjust enrichment claim depends

upon implied promise to pay).

47

See e.g., In re Lorazepam & Clorazepate Antitrust Litig., 295 F.Supp.2d 30, 51 (D.D.C. 2003) (plaintiffs who ”“absorbed millions

of dollars in overcharges, which significantly increased [defendant’s] revenue and net earnings‘’ could assert unjust enrichment

claims under the laws of several states) (citing cases); In re Terazosin Hydrochloride, 220 F.R.D. 672 (S.D. Fla. 2004) (certifying

class of plaintiffs to pursue unjust enrichment claims to recover unlawfully inflated profits); In re Cardizem CD Antitrust Litig., 90

22

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones and Lora..., 2004 WL 3634831... F. Supp. 2d 819, 825 (E.D. Mich. 1999) (reviewing unjust enrichment claims to recover an illegal payment made to the defendant).
23

 
 j*)'.; filED IN Ct[RK'S orFiCE ·,'c. - .- ". (

~ - b2CQ4

IN THE UNITED STATES DISTRICT COURT.

\U~m.'lrlCM.•.~, CleO<

FOR THE NORTHERN DISTRICT OF GEOR<fIA '"lUlU ~Iki~

ROME DIVISION

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES and LORA SISSON, individually and on behalf of a class,
Plaintiffs,
vs.
MOHA WK INDUSTRIES, INC.,
Defendant.

)

)

) )

FCiilveilNAo.ct_ion_4

04
__

- CV
_ _

-

)

)

03
- -t;"; T' ,. .
. ~.'

) COMPLAINT - CLASS ACTION

)

)

)

)

)

)

COMPLAINT

Plaintiffs Shirley Williams ("Williams"), Gale Pelfrey ("Pelfrey"), Bonnie

Jones ("Jones") and Lora Sisson ("Sisson"), individually and on behalf of a class,

bring this action against Defendant Mohawk Industries, Inc. ("Mohawk"):

I. SUMMARY OF CLAIMS

1.

This is a class action under the federal and Georgia Racketeer Influenced

and Corrupt Organizations ("RICO") acts. The members of the class are current

and former hourly employees of Mohawk whose wages have been depressed by

Mohawk's employment and harboring of large numbers of illegal workers.

/

Plaintiffs seek injunctive and monetary relief on behalf of Mohawk's legallyemployed hourly workers in Georgia.
2. Mohawk is the second largest carpet and rug manufacturer in the United States. In 2002, its carpet and rug net sales were approximately $3.2 billion. Mohawk employs approximately 31,780 persons, most of whom are employed in Northwest Georgia. Mohawk owns or leases at least twenty-six facilities in Georgia.
3. Mohawk has, in its Georgia facilities, engaged in the widespread employment of illegal workers, i.e., workers who are not authorized to be employed in the United States. By employing and harboring illegal workers, Mohawk is able to reduce labor costs by depressing wages for its hourly workers and discouraging claims for workers compensation.
4.
Mohawk's conduct violates the federal Racketeer Intluenced and Corrupt Organizations Act, 18 U.S.c. § 1961 ef seq. ("federal RICO"), and Georgia's Racketeer Influenced and Conupt Organizations Act, O.e.G.A. § 16-14-1 et seq. ("Georgia RICO"), as more fully set f0l1h below.
-2-

II. PARTIES, JURISDICTION AND VENUE 5.
Plaintiff Gale Pelfrey is a citizen of Georgia and resides in the Northern District of Georgia. She is eligible to be employed in the United States and is a former hourly employee of Mohawk.
6. Plaintiff Shirley Williams is a citizen of Georgia and resides in the Northern District of Georgia. She is eligible to be employed in the United States and is a former hourly employee of Mohawk.
7. Plaintiff Bonnie Jones is a citizen of Georgia and resides in the NOlthern District of Georgia. She is eligible to be employed in the United States and is a current hourly employee of Mohawk.
8. Plaintiff Lora Sisson is a citizen of Georgia and resides in the NOlthern District of Georgia. She is eligible to be employed in the United States and is a former hourly employee of Mohawk.
-3-

9. Defendant Mohawk is a Delaware corporation with its principal place of business in Calhoun, Georgia. Mohawk may be served by service on its registered agent for service of process, Salvatore 1. Perillo, Post Oftice Box 12069, South Industrial Boulevard, Calhoun, Georgia 30703.
10. Mohawk is subject to the personal jurisdiction of this Court.
II. This CouI1 has subject matter jurisdiction over this case pursuant to 18 U.S.c. § I964(c), 28 U.S.C. § 1332 (federal question) and 28 U.S.c. § 1367 (ancillary jurisdiction).
12. Venue is proper in this district, pursuant to 28 U.S.c. § 1391(b), as Mohawk resides in this district and events giving rise to Plaintiffs' claims occurred in this district. Venue is also proper in this district pursuant to 18 U.S.c. § 1965, as Mohawk resides, is found in and transacts its affairs in the Northern District of Georgia.
-4-

III. FACTS Mohawk's Hiring and Harboring of Illegal Workers
13. Mohawk employs many thousands of hourly paid workers in its operations in North Georgia.
14. In an effort to keep labor costs as low as possible, Mohawk has engaged in the illegal hiring of persons who are not eligible for employment in the United States.
15. Mohawk has accepted for employment and continued to employ workers that it knew or had reason to know were not authorized to work in the United States.
16. Mohawk has knowingly and recklessly accepted as proof of eligibility for employment false documents or documents that do not match the identity of the person presenting them. For example, Mohawk has accepted drivers' licenses and other documents that obviously depict a person different than the person presenting the document as proof of eligibility for employment.
-5-

17. Mohawk also has knowingly and recklessly accepted as proof of eligibility for employment documents that retlect successive ditTerent names for a single person. Indeed, Mohawk frequently employs illegal workers who (a) tirst present eligibility documents that retlect one name, (b) work at Mohawk for some period of time, (c) leave their jobs at Mohawk, and then (d) return to work at Mohawk and present Mohawk with identification and work eligibility documents showing a different name.
18.
In some instances, when illegal workers have informed Mohawk that they
would return to their countries of origin, Mohawk supervisors have encouraged these employees to return to the United States and reapply for work at Mohawk in violation of United States law.
19. Although Mohawk was and is aware that numerous employees have used or are using identities different ti·om those they had previously used while employed at Mohawk, Mohawk has accepted and continues to accept new identification and work authorization documents that it knew or had reason to know were false or obtained by false statements from these persons.
-6-

20. Mohawk employees and/or supervisors have destroyed eligibility documents showing that workers have used different names and identification papers in an eff0\1 to conceal Mohawk's employment and harboring of illegal workers.
21.
Mohawk employees and supervisors have stated that they are aware that illegal workers can easi ly obtain false identification and work authorization documents.
22. Mohawk employees have traveled to the United States border, including areas near Brownsville, Texas, to recruit undocumented aliens that recently have entered the United States in violation of federal law. These employees and other persons have transported undocumented aliens ti'oll1 these border towns to North Georgia so that those aliens may procure employment at Mohawk. Mohawk has made various incentive payments to employees and other recruiters for locating workers that Mohawk eventually employs and harbors.
-7-

23. Various recruiters, including Mohawk employees, have provided housing to these illegal workers upon their arrival in North Georgia and have helped them find illegal employment with Mohawk.
24. Mohawk has conducted occasional audits of its workforce and discovered numerous illegal workers within that workforce. Although these infrequent audits often confirm the presence of large numbers of illegal workers and therefore put Mohawk on further notice that it is employing and harboring illegal workers, Mohawk has not increased the fi·equency of these audits.
25. Even when Mohawk terminates illegal workers after discovering that they are not authorized to work in the United States, many of those discharged illegal workers soon return to work at Mohawk under ditTerent names. For example, earlier this year, Mohawk discharged three employees that Mohawk had discovered to be illegally working in one of its facilities. Within two months after their discharge, Mohawk re-hired these same employees under ditTerent names to work on different shifts in the same facility.
-8-

26. This practice of "recycling" illegal workers is widespread at Mohawk.
27. Law enforcement personnel have raided Mohawk facilities in pursuit of undocumented aliens. On some of these occasions, illegal workers have hidden in balTels or other containers or run from the facilities being raided. This conduct has put Mohawk on further notice of the presence of large numbers of illegal workers in its workforce.
28. Mohawk employees and supervisors have assisted illegal workers in attempting to evade detection by law enforcement personnel.
29. Law enforcement authorities have arrested illegal workers at Mohawk facilities.
30. Law enforcement authorities have found undocumented aliens in possession of Mohawk paychecks or identification badges and fraudulent identitication documents.
-9-

31. Mohawk supervisors have stated that they prefer hiring illegal workers because they do not complain about working conditions or submit claims for workers' compensation.
32. Because illegal workers typically have no intention of tiling federal tax returns, many illegal workers int1ate their claimed exemptions to attempt to avoid withholding taxes. Many of Mohawk's illegal workers have intlated their claimed exemptions to avoid federal income tax withholding. This conduct has further put Mohawk on notice that large numbers of its workforce are not authorized for employment in the United States.
33. Mohawk's employment and harboring of large numbers of illegal workers has enabled Mohawk to depress wages and thereby to pay all of its hourly employees, including legally employed workers who are members of the class, wages that are lower than they would be if Mohawk did not engage in this illegal conduct.
-10-

34. Mohawk is the second largest carpet manufacturer in the United States and one of the largest employers in North Georgia. Mohawk employs tens of thousands of hourly workers in North Georgia.
35. Mohawk's widespread employment and harboring of illegal workers has substantially and unlawfully increased the supply of workers from which Mohawk makes up its hourly workforce. This unlawntl expansion of the labor pool has permitted Mohawk to depress the wages that it pays all its hourly elllployees, including the Plaintiffs and all Class members. If Mohawk had compl ied with the law by limiting its hourly workforce to those workers authorized to work in the United States, Mohawk would have had to pay higher wages to the Plaintiffs and the members of the Class.
36. One purpose and intended dIect of Mohawk's widespread employment and harboring of illegal workers is to deprive Mohawk's hourly workforce of any individual or collective bargaining power. Because Mohawk knows that Illany of its workers are not authorized to reside or work in the United States, Mohawk knows that those illegal workers are beholden to Mohawk. Mohawk is further
-11-

aware that its undocumented workers have virtually no effective means to complain about the terms of their employment.
37. Mohawk also is aware that its illegal employees are unlikely to file worker's compensation claims against Mohawk. As a direct and proximate result of Mohawk's employment and harboring of illegal workers, Mohawk has been able to save substantial sums of money in worker's compensation liability that it would have incurred ifit had not violated the law.
38. As a direct and proximate result of Mohawk's employment and harboring of illegal workers, Plaintiffs and all members of the Class have earned wages below the wages they would have earned if Mohawk had complied with the law.
IV. CLASS ACTION ALLEGATIONS 39.
Plaintiffs bring this action on behalf of all persons legally authorized to be employed in the United States who are or have been employed by Mohawk in hourly wage positions in Georgia at any time from January 5, 1999 to the present (the "Class"). The "Class Period" is t"om January 5, 1999 to the present.
-12-

40. The Class is so numerous that joinder of all Class members is impracticable. Plaintiffs bel ieve the Class contains many thousands of members, and the actual number of Class members can be ascet1ained through discovery.
41. There are numerous questions of law and fact common to the Class. Those questions include, but are not limited to: a. How many persons who are not authorized to be employed in the
United States has Mohawk employed in hourly wage positions during the Class Period? b. Has Mohawk knowingly or with reckless disregard employed workers who are not authorized for employment in the United States during the Class Period? c. Has Mohawk knowingly or recklessly harbored undocumented aliens in the United States in violation of federal law during the Class Period? d. To what extent has Mohawk's employment and harboring of persons who are not authorized to be employed in the United States in hourly
-13-

wage positions depressed the wages Mohawk provides to legal hourly employees? e. Is Mohawk part of an "enterprise" under the federal RICO statute? and f. Has Mohawk engaged in a pattern of racketeering activity under the federal RICO statute or acquired and maintained and interest in a pattern ofracketeering activity under the Georgia RICO statute'?
42. The claims of the Plaintiffs are typical of the claims of the Class. PlaintifTs are or were hourly workers whose wages have been depressed by Mohawk's employment and harboring of illegal workers. Plaintiffs have no interests that are antagonistic or adverse to the other Class members.
43. PlaintifTs were injured by direct and proximate reason of Mohawk's illegal conduct.
44. PlaintitTs wi II fairly and adequately protect the interests of the class.
45. PlaintifTs are adequate representatives of the Class. Plaintiffs are each authorized for employment in the United States and are or were hourly Mohawk
-14-

workers, whose wages have been depressed by Mohawk's employment and harboring of illegal workers. Plaintiffs have retained counsel that are experienced in class action litigation, RICO litigation and complex litigation. Accordingly, Plaintiffs will fairly and adequately protect and represent the interests of the Class.
46.
Plaintiffs seek certification of a class, altel11atively, under Fed. R. Civ. P. 23(b) (2) or 23(b) (3), or a combination thereof.
47. Mohawk's employment and harboring of illegal work.ers has the effect of depressing wages and benefits to the detriment of all members of the Class. Accordingly, declaratory and injunctive relief that prevents Mohawk from continuing to employ or harbor illegal workers is appropriate on a class wide basis.
48. The questions of law and fact common to all members of the Class predominate over any questions that may atfect only individual members of the Class.
-15-

49. A class action is a superior method of adjudicating the Class members' claims because individual actions would unnecessarily burden the Court and create the risk of inconsistent results.
50. Given the significant expense required to prosecute the foregoing claims against Mohawk, the costs of individual actions would exceed or consume the amount recovered in any individual action. The expense of pursuing individual actions will require individual members of the Class to forego their individual claims against Mohawk if they are not permitted to pursue those claims as a Class.
51.
PlaintitTs are not aware of any litigation concerning this controversy that has already been initiated by or against any members of the Class.
52. Because both Mohawk and the large majority of the Class members reside in this district and many of the events giving rise to this action took place in this district, it is both desirable and efficient to concentrate the litigation of these claims in this particular forum.
-16-

53. This action is manageable because the evidence proving that Mohawk is engaging in the alleged conduct is common to the Class. FUlthermore, the identities of the Class members are known to Mohawk.
V. MOHAWK HAS ENGAGED IN A PATTERN OF RACKETEERING ACTIVITY 54.
Mohawk is engaged in an ongoing pattern of racketeering activity as detined by 18 U.S.c. § 1961(5).
55. The federal RlCO pattern of racketeering activity engaged in by Mohawk consists of more than two acts of racketeering activity, the most recent of which occurred within ten years after the commission of a prior act of racketeering activity.
56. Mohawk is engaged in an ongoing pattern of racketeering activity as detined by O.e.G.A. § 16-14-3(8).
-17-

57. The Georgia RICO pattern of racketeering activity engaged in by Mohawk consists of more than two acts of racketeering activity, the most recent of which occurred within four years after the commission of a prior act of racketeering activity.
58. For purposes of federal RICO, the racketeering activity includes an open and ongoing pattern of violations of Section 274 of the Immigration and Nationality Act, 8 U.S.c. ~ 1324(a).
59. Specifically Mohawk has violated and continues to violate 8 U.S.c. § I 324(a)(3 )(A), which makes it a federal crime to: "'knowingly hire[] for employment at least 10 individuals with actual knowledge that the individuals are aliens ..." during a 12 month period. Mohawk has violated this provision of the Act, including by employing more than 10 aliens per year each year for the last four years, knowing that each such person was (a) smuggled or otherwise brought into the United States in violation of U.S. law; (b) illegally harbored once in the United States; (c) not lawfully admitted to the United States for permanent residence; and/or (d) not authorized for employment in the United States.
-18-

60. Mohawk has also violated and continues to violate 8 USc. ~ 1324(a)( I )(A)(iii), which makes it a federal crime to "conceal,[], harborll or shield from detection, or attempt[] to conceal, harbor or shield t!'om detection ... " aliens who have entered the U.S. illegally. Mohawk has violated this provision by (a) knowingly employing illegal aliens within its factories, warehouses and other facilities in Georgia and/or (b) taking steps to shield those illegal aliens fi'om detection, by, among other things, helping them evade detection during law enforcement searches and inspections.
61. Furthermore, Mohawk has also violated and continues to violate 8 U.S.c. § I324(a)(l )( A)(iv), which prohibits any person or entity from "encourag[ing] or induc[ing] an alien to come to, enter, or reside in the United States, knowing or in reckless disregard oflhe fact that such coming to, entry, or residence is or will be in violation oflaw[.]" By knowingly or recklessly employing and harboring undocumented aliens in its Georgia facilities, Mohawk has helped hundreds of aliens to avoid detection and enabled them to remain in the United States in violation of U.S. law. And by successively hiring and employing the same undocumented aliens under dit1erent names and accepting false identitication and
-19-

work authorization documents that retlect ditferent identities for these aliens, Mohawk has knowingly or recklessly encouraged any undocumented aliens that are discovered to retum to the United States and to their employment at Mohawk in violation of United States law.
62.
* Each violation of 8 U.S.c. 1324 constitutes an act of "racketeering
activity" under the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 (F).
63. For purposes of both federal and Georgia RICO, the racketeering activity also includes open and ongoing violations of 18 U.S.c. ~ I 546(a), including Mohawk's acceptance of identification documents and other documents that authorize employment in the United States that Mohawk knew or had reason to know were not lawfully issued for the bearer's use, were false and/or were obtained by false statements.
64. Mohawk has also violated and continues to violate 18 U.S.c. § 1546(b) by using identification documents that Mohawk knew or had reason to know were false and/or not lawfully issued to the bearer to falsely verify the eligibility of the
-20-

persons presenting them to work at Mohawk, and recording information ii'om those documents on 1-9 torms.
65. Each violation of 18 U.S.c. § 1546 constitutes "racketeering activity" under the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.c. § 1961(8).
66. Each violation of 18 U.S.c. § 1546 also constitutes "racketeering activity" under the Georgia Racketeer Intluenced and Corrupt Organizations Act. O.C .G.A. § 16-14-3(9)(A)(xxix).
The Acts of Racketeering Activity Committed by Mohawk Are Related
67. The acts of racketeering activity committed by Mohawk have the same or similar methods of commission in that they involve the knowing employment of illegal workers, the concealment, harboring and shielding from detection of illegal workers, and the acceptance or use of fraudulent documents in connection with the hiring of illegal workers.
-21-

68. The acts of racketeering activity committed by Mohawk have the same or similar objective: the reduction of wages paid to Mohawk's hourly workforce.
69. The acts of racketeering activity committed by Mohawk have the same or similar victims, including the plaintiffs and the other members of the Class.
70. The acts of racketeering activity committed by Mohawk are otherwise related by distinguishing characteristics including, but not limited to, the involvement of Mohawk, illegal workers, and other members of the association-infact enterprise identitied in paragraphs 76-84.
The Acts of Racketeering Activity Committed by Mohawk Involve a Distinct Threat of Long-Term Racketeering Activity
71. Mohawk's acts of racketeering activity involve a distinct threat of long-term racketeering activity.
72. Mohawk's practice of knowingly employing, harboring, concealing and shielding illegal workers and Mohawk's acceptance and use ofdocllments that are
-22-

not lawfully issued for the use of the possessor or are false has continued for years, is ongoing at the present time and will continue into the future unless halted by judicial intervention.
73. Mohawk's knowing employment, harboring, concealing and shielding of illegal workers and its acceptance and use of documents that are not lawfully issued for the use of the possessor or are false is pmt of its regular way of conducting business.
74. Mohawk has committed hundreds, and probably thousands, of violations of 8 U.S.c. § 1324 and 18 U.S.c. ~ 1546 as pmt of its pattern of racketeering activity.
75. Mohawk's knowing employment, harboring, concealing and shielding of illegal workers and its acceptance and use of documents that are not lawfully issued for the use of the possessor or are false is so pervasive that illegal workers now constitute a majority of the work force in many of Mohawk's facilities in North Georgia.
-23-

VI. THE ENTERPRISE 76.
Mohawk has engaged in an open and ongoing pattern of violations of 8 U.S.c. § 1324 and 18 U.S.c. § 1546 during the last tive years through its participation in an association-in-fact enterprise with third party employment agencies and other recruiters, including Temporary Placement Services ("TPS"), that supply Mohawk with illegal workers. Each recruiter is paid a fee for each worker it supplies to Mohawk, and some of those recruiters work closely with Mohawk to meet its employment needs by offering a pool of illegal workers who can be dispatched to a pal1icular Mohawk facility on short notice as the need arises. Some recruiters find workers in the Brownsville, Texas area and tranSpOt1 them to Georgia. Others, like TPS, have relatively formal relationships with the company in which they employ illegal workers and then loan or otherwise provide them to Mohawk for a fee. These recruiters are sometimes assisted by Mohawk employees who carry a supply of social security cards for use when a prospective or existing employee needs to assume a new identity.
-24-

77. The recruiters and Mohawk share the common purpose of obtaining illegal workers for employment by Mohawk. The enterprise has worked in this fashion continuously over at least the last tive years.
78. Mohawk palticipates in the operation and Illanagelllent of the atTairs of the enterprise, which exists for Mohawk's benetit.
79. This association of Mohawk and the recruiters constitutes an association-infact enterprise pursuant to 18 U.S.c. § 1961 (4).
80. The enterprise atTects interstate commerce in a variety of ways.
81. The enterprise atTects interstate commerce in that the illegal workers employed by Mohawk travel in intemational and interstate commerce in order to reach Mohawk facilities in North Georgia.
82. The enterprise also atTects interstate commerce in that it reduces the income of the legal workers who are still palt of the Mohawk hourly workforce.
-25-

83. The enterprise also atfects interstate commerce in that Mohawk, a member of the enterprise, is directly engaged in the production, distribution and acquisition of goods and services in interstate commerce.
84. Mohawk accepted and retained the benetits of the acts of racketeering activity, thereby ratifying the conduct of its managers, employees, and the members of the enterprise who assisted it in committing those acts of racketeering activity.
VII. MOHAWK HAS CAUSED PLAINTIFFS' WAGES TO BE DEPRESSED 85.
Mohawk's violations offederal and Georgia RICO proximately have caused the wages of Pelfrey, Williams, Jones, Sisson and all other members of the Class to be depressed below what they would have been in a labor market comprised of legally employed workers.
86. Pelfrey, Williams, Jones, Sisson and the Class have suffered an injury to their "business or property," i.e. lost wages, as a direct result ofMohawk's
-26-

violations of federal RICO, and injury as a result of Mohawk's violations of Georgia RICO.
87. Mohawk's unlawful conduct has allowed Mohawk to earn or retain significant funds to which it is not entitled. For example, Mohawk's widespread employment of illegal workers has permitted Mohawk to depress the wages for its hourly workers and to reduce the expenses it incurs as a result of worker's compensation claims. These savings contribute to Mohawk's profit margins and provide the financial motive for Mohawk's hiring of illegal workers.
COUNT I (Violation of 18U.S.C. § 1962(c»
88. Plaintiffs reallege and incorporate by reference herein the allegations set forth in paragraphs \-87 as if fully restated hereinafter.
89. The foregoing conduct constitutes a violation of 18 U.s.c. § 1961(c).
-17-

90. PlaintitTs have been injured in their propelty by reason of Mohawk's violations of 18 U.S.C. § 1962(c).
91. The injuries sutTered by plaintiffs were caused by Mohawk's violations of 18 U.S.c. § 1962(c).
92. Pursuant to 18 U.S.c. § 1964(c), plaintiffs are entitled to recover threefold the damages they have sustained and their costs of suit, including reasonable attorney's fees.
COUNT II (Violation ofO.e.G.A. § 16-14-4(a»
93. Plaintiffs reallege and incorporate by reference herein the allegations set forth in paragraphs 1-92 as iffully restated hereinafter.
94. Mohawk has acquired and maintained an interest in and control of personal property, including money, through a pattern of racketeering activity.
-28-

95. Plaintiffs have been injured by reason of Mohawk's violation ofO.e.G.A. ~ 16-14-4(a) and are entitled to recover three times the actual damages sustained.
96. In addition, Mohawk's actions showed wilfull misconduct, malice, fraud, wantonness, oppression and an entire want of care that raises the presumption of conscious indifference to consequences and specific intent to cause harm, entitling plaintiffs to receive punitive damages sufficient to deter, penalize, or punish Mohawk in light of the circumstances of the case.
97. PlaintitT are also aggrieved persons within the meaning of O.e.G .A. ~ 1614-6(b). As a result, Plaintiffs are entitled to appropriate preliminary and permanent injunctive relief.
98. Pursuant to O.e.G.A. § 16-14-6(a), plaintitTs ask the Court to issue appropriate orders and judgment requiring Mohawk to cease its illegal conduct and imposing reasonable restrictions upon Mohawk's future activities sufficient to prohibit future violations of the law.
-29-

COUNT III (Violation orO.CG.A. § 16-14-4(c»
99. PlaintitTs reallege and incorporate by reference herein the allegations set forth in paragraphs I-98 as if fully restated hereinafter.
100. Mohawk has endeavored to violate O.e.G.A. § 16-14-4(a), in violation of O.e.G.A. ~ 16-14-4(c).
101. Mohawk has also conspired with TPS and other recruiters, known and unknown, to violate O.e.G.A. § I6-14-4(a), in violation of O.e.G.A. § 16-14-4(c).
102. Mohawk has committed overt acts, which are also acts of racketeering activity, in furtherance of the conspiracy. These overt acts include violations of 18 U.S.c. § 1546.
103. Mohawk has also committed overt acts in furtherance of the conspiracy by having Mohawk employees travel in interstate commerce for the purpose of assisting Mohawk in hiring illegal workers.
-30-

104. Mohawk's actions show wilti.IlI misconduct, malice, fraud, wantonness, oppression and an entire want of care that would raise the presumption of conscious indifference to consequences, and specific intent to cause harm, entitling plaintiffs to receive punitive damages sutlicient to deter, penalize or punish Mohawk.
105. Mohawk's violations of federal and Georgia RICO are intended to and do in fact depress wages, and the Class is the direct victim of these violations.
COUNT IV
(Unjust Enrichment in Violation of Georgia Law) 106.
PlaintitTs reallege and incorporate by reference herein the allegations set forth in paragraphs 1-105 as if fully restated hereinafter.
107. Mohawk's employment and harboring of illegal workers has had the purpose and effect of depressing the wages paid to Mohawk's hourly workers who are eligible for employment in the United States. Mohawk's conduct therefore is
-31-

intended to and has the eHect of permitting Mohawk to reap substantial wage savings.
108. Mohawk's employment and harboring of illegal workers also has had the purpose and effect of reducing the number of worker's compensation claims that Mohawk receives. Mohawk supervisors have stated that they preter hiring illegal workers in part because they do not submit worker's compensation claims. Mohawk's conduct therefore is intended to and has the eHect of permitting Mohawk to limit the amount it must spend to respond to worker's compensation claims.
109. The savings that Mohawk has been able to achieve and continues to achieve through its employment and harboring of illegal workers have been unjustly and inequitably conferred on Mohawk at the expense of its hourly workers who are authorized for employment in the United States, including Plaintiffs and all other members of the Class. These cost savings permit Mohawk to earn larger protits than it would be able to earn if it did not employ and harbor illegal workers.
-32-

110. Under the circumstances, Mohawk has been unjustly enriched at the expense of the Plaintiffs and all the members of the Class. Mohawk therefore should be ordered to disgorge its unlawful protits or otherwise return the full amount of any wage savings and worker's compensation savings that are the direct and proximate result of Mohawk's unlawful conduct.
XIII. PRAYER FOR RELIEF Plaintitfs Pelfrey, Williams, Jones and Sisson demand judgment and other relief as follows: A. CeI1ification ofa Class pursuant to Fed. R. Civ. P. 23; B. Judgment in an amount equal to three times the actual damages sustained by the Class, pursuant to 18 U.S.c. § 1964(c); C. Reasonable attorney's fees, pursuant to 18 U.S.c. § 1964(c); D. Judgment in an amount equal to three times the actual damages
* sustained by the Class, pursuant to O.C.G.A. I6-14-6( c};
E. Attorneys' fees in the trial and appellate courts and costs of investigation and litigation reasonably incurred, pursuant to O.e.G.A. § 16-146( c};
-33-

F. Appropriate orders and judgments prohibiting Mohawk from engaging in the violations of law alleged herein, pursuant to O.e.G.A. ~ 16-14-4(a) and (b);
G. Judgment in an amount to be proven at trial that requires Mohawk to disgorge any unlawful profits or otherwise return the full amount of its unjust enrichment;
H. Trial by jury; and 1. Such other relief as the COUlt deems just and proper.
t.
This jth day of January, 2004. pectfi.I ubmitted,
\,, ~

COOK & CONNELLY 9899 Commerce Street Summerville, GA 30747 (706) 857-3421 (706) 857-1520 (facsimile)

Bobby Lee Georgia Bar No. 183 100

-34-

ohn E. Floyd Georgia Bar No. 266413 Joshua F. Thorpe Georgia Bar No. 710665 Ronan P. Doherty Georgia Bar No. 224885 Nicole G. Iannarone Georgia Bar No. 382510
BONDURANT, MIXSON & ELMORE, LLP 1201 W. Peachtree Street, N.W. 3900 One Atlantic Center Atlanta, Georgia 30309 (404) 881-4000 (404) 881-41 11 (facsimile)

V\-.~~/IA

Matthew Thames

I

Georgia Bar No. 703130

GODDARD, THAMES, HAMMONTREE & BOLDING 2716 Cleveland Hwy. P.O. Box 399 Dalton, GA 30722-0399 (706) 278-0464 (706) 278-0465 (facsimile)

-35-

·. ~ "

JOHNSON & BELL, LTD 55 E. Monroe Street Suite 4100 Chicago, IL 60603 (312) 372-0770 (312) 372-9818 (facsimile)

Howard Foster*

*Application for admission pro hac vice has been submitted

-36-

~nibb ~tah~s Jtl istrirt QIourt
__ _ N~O~R-"T.!lH£Ec!'R~NL- _ _ _ _ _ _ _ _ _ _ DISTRICT OF _ _ _ _.JGI.iEJiQUJiRl"G.l.Te,A_ _ _ _ _ _ _ __

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES and LORA SISSON, Individually and on Behalf of a Class
v.
MOHAWK INDUSTRIES, INC.

SUMMONS IN A CIVIL ACTION
CASE NUMBER:
4 lA-~\j-.·Oj

MOHAWK INDUSTRIES, INC.
c/o REGISTERED AGENT: SALVATORE J. PERILLO MOHAWK INDUSTRIES, INC. P. O. BOX 12069 CALHOUN, GA 30703

YOU ARE HEREBY SUMMONED and reQUIred to file with the Cieri< of this Court and serve upon

f"I""" PLAINnFF'S ATTORNEY

ancf~.,

BOBBY LEE COOK COOK & CONNELLY 9899 COMMERCE STREET P. O. BOX 370 SUMMERVILLE, GA 30747

JOHN E. FLOYD JOSHUA F. THORPE RONAN P. DOHERTY NICOLE G. IANNARONE BONDURANT, MIXSON & ELMORE 1201 W. PEACHTREE ST., N.W. 3900 ONE ATLANTIC CENTER

MATTHEW THAMES GODDARD, THAMES, HAMMOND TREE & BOLDING 2716 CLEVELAND HIGHWAY P. O. BOX 399 DALTON, GA 30722-0399

ATLANTA, GA 30309 . .
an answer 10 the complaint which is herewith serveQ upon you. within

20

days afler service of

this summons upon you. exciusiv·, of the day of service. If you fail 10 do so. Jud·)'Tlenl by default will be laKen

against you for the relief demandeo '" lhe complaint.

HOWARD FOSTER JOHNSON & BELL, LTD. 55 E. MONROE STREET SUITE 4100 CHICAGO, IL 60603

CLERK

DATE

DEP~\0'l.ULL

BY

CLERK

JtIuibb ~tat~5 JB istrict ([ourt

_ _ _ _ _--"N"'O"'R"T'-'H!.!E=..!RN~_ _ _ _ _ _ _ DISTRICT OF _ _ _ _--'G...E"'Q"'R~G.l.I.tIA~_ _ _ _ _ _ __

ROME DIVISION

SHIRLEY WILLIAMS, GALE PELFREY,

BONNIE JONES and LORA SISSON, Individually and on Behalf of a Class

SUMMONS IN A CIVIL ACTION -f!"Jr-;or ". I'!

v.

CASE NUMBER:

MOWHAWK INDUSTRIES, INC_

MOHAWK INDUSTRIES, INC.
c/o REGISTERED AGENT: SALVATORE J. MOHAWK INDUSTRIES, INC.
160 SOUTH INDUSTRIAL BOULEVARD CALHOUN, GA 30703

PERILLO

YOU ARE HEREBY SUMMONED and reqUIred to file with the Cieri< of this Coun ana serve upon

pL.AINnFF'S ATTORNEY I""~ .,-.(1..,...••1
BOBBY LEE COOK COOK & CONNELLY 9899 COMMERCE ST. P. O. BOX 370 SUMMERVILLE, GA 30747

JOHN E. FLOYD ~_
JOSHUA F. THORPE RONAN P. DOHERTY NICOLE G. IANNARONE BONDURANT, MIXSON
& ELMORE, LLP 1201 W. PEACHTREE ST.NW 3900 ONE ATLANTIC CENTER ATLANTA, GA 30309

MATTHEW THAMES GODDARD, THAMES,
HAMMONDTREE & BOLDING 2716 CLEVELAND HIGHWAY P. O. BOX 399 DALTON, GA 30722-0399

an answer 10 the complaint which is herewith served upon you. within

20

days aiter servIce of

this summons upon you. exciusiv.J of the day of servIce. If you fail to do so, jud-J'nent by default will be taKen

against you for the relief demanaea '" the complaInt.

HOWARD FOSTER JOHNSON & BELL, LTD. 55 E. MONROE STREET SUITE 4100 CHICAGO, IL 60603

. ,'. .
CLERK
BY DEPUTY ctSRK

==---!../~(-y--.:-c:::....J,\t_ _ _ __
DATE

 
 I
.;

FILED iN u.s.

DC.LCE. ~~r

OFRcr

.d]!n~

.

United States Court of Appeals AUG. ?;~o~

For the Eleventh Circuit

L~T'"1": . ' ... ~J

,ltFJM.AlS

.

I Clerk

No. 04-13740

FILED

-'-J) ·PI~"~"y Clerk

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

District Court Docket No. 04-00003-CV -HLM-4

Jun 9,2005
THOMAS K. KAHN CLERK

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES, LORA SISSON, individually and on behalf of a class,
Plaintiffs-Appellees,
versus
MORAWK INDUSTRIES INC.,

A TnJo COPt! - Attgsted Clto!h: U.S. C~)t:ft of AppeaJs.
Br. JlJ:;"Jft1{V Osputy Clerk Attanta. Georgfa

Defendant-Appellant.

Appeal from the United States District Court for the Northern District of Georgia

JUDGMENT
It is hereby ordered, adjudged, and decreed that the attached opinion included herein by reference, is entered as the judgment of this Court.
Entered: June 9, 2005 For the Court: Thomas K. Kahn, Clerk
By: Gilman, Nancy

AUG I 6 2005

uR~t~~~&,

INDUSTRIE~, r I L E2Wli WILLIAMS v. MOHAWK

··· ......,. . ... ... =''"l':'"~"'''''-'~ '~ ,....P.~....._ _ _- - ,
-INC.

! u.s_ COURT OF APPEALS

I
I !
I

Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones, Lora Sisson, individually and on behalf of a class, Plaintiffs-Appellees,
v.

Affirmed in part, reverset~p:~ifN1eIRtU1T
~:::,ree, I I.,n"d[~~i.~~g~sJ ganizatio s 0=>57 L, ____

MOHAWK INDUSTRIES, INC.,

Civil claim t undeifR0MA$ ~fl(AHN

Defendant-Appellant.

enced and Corm t Organizations ~ @}\R»

No. 04-18740.

must show: (1) R~,(j.Q~ola~.i...J~E9.!!,~ls:;:.:lt::::.e_ _ _ __

United States Court of Appeals, Eleventh Circuit.

injury to business or property; and (3) that such injury was by reason of substantive RICO violation. 18 U.S.CA § 1964(c).

June 9, 2005.
Background: Current and former hourly employees sued employer alleging widespread employment of illegal aliens, and '..~ asserting claims under federal and state Racketeer Influenced and Corrupt Organizations (RICO) acts. The United States District Court for the Northern District of

2. Racketeer Influenced and Corrupt Organizations 0=>26
"Pattern" of racketeering activity is shown, for purposes of Racketeer Influenced and Corrupt Organizations Act (RICO), when racketeer commits at least two distinct but related predicate acts. 18 U.S.C.A § 1962{c).

Georgia, No. 04-00003-CV-HLM-4, Harold L. Murphy, J., 314 F.Supp.2d 1333, denied in part employer's motion to dismiss, and employer appealed.
Holdings: The Court of Appeals held that:
(1) alleged recruitment and hiring of illegal aliens constituted "pattern of racketeering activity";
(2) hiring of i11egals potentially qualified as "~nterprise" ;
(3) common purpose requirement for pri, rna facie RICO case was satisfied;
(4) "business injury" element for prima facie RICO case was satisfied;

3. Aliens 0=>56

Racketeer Influenced and Corrupt Organizations <s;::>26

Employer's alleged recruitment of hun-

dreds of illegal aliens at border, hiring of

those aliens in order to cut costs and drive

down wages of its legal workers, and shield-

ing of illegal aliens from federal inspectors

constituted ''Pattern of racketeering activity"

within meaning of Racketeer Influenced and

Corrupt Organizations Act (RICO). Immi-

gration

and

Nationality

Act,

§ 274(a)(1)(A)(ili-iv), (a) (3)(A), 8 U.S.C.A.

§ 1324(a)(1)(A)(iii-iv), (a)(3)(A); 18 U.S.C.A.

§§ 1961(1)(F), 1962(c).

(5) employees stated proximate cause element of civil RICO claim;
(6) employees satisfied statutory standing element of prima facie RICO case; and
(7) employer was potentially liable under Georgia RICO.

4. Racketeer Influenced and Corrupt Organizations 18;;>50
Civil violation of Racketeer Influenced and Corrupt Organizations Act's (RICO) prohibition against conduct of enterprise through pattern of racketeering activity re-

Synopsis, Headnotes and Key Number Classification COPYRIGHT © 2005 by West, a Thomson business

The Synopsis, Headnotes and Key Number Classification constitute no part of the opinion of the court.

2566

WILLIAMS v. MOHAWK INDUSTRIES, INC.

quires that defendant participated in operation or management of enterprise itself. 18 U.s.C.A. § 1962(c).
5, Racketeer Influenced and Corrupt Organizations e=>44

8. Racketeer Influenced and Corrupt Organizations e:->2
Racketeer Influenced and Corrupt Organizations Act (RICO) is liberally construed. 18 U.S.C.A. § 1961 et seq.

Employer's alleged arrangements with recruiters and temporary employment agencies, under which recruiters supplied illegal aliens to work for employer or agencies furnished to employer illegal aliens already employed by agencies, potentially qualified as "enterprise" within meaning of Racketeer Influenced and Corrupt Organizations Act (RICO), in legal workers' action alleging that purpose of arrangements was to drive their wages down. 18 U.S.C.A. § 1962(c).

9. Racketeer Influenced and Corrupt Organizations <::=>62
"By reason of" requirement of Racketeer Influenced and Corrupt Organizations Act (RICO) implicates two concepts: (1) sufficiently direct injury so that plaintiff has standing to sue, and (2) proximate cause, whereby wrongful" conduct is shown to be substantial cause of alleged injury and causal connection is foreseeable. 18 U.S.C.A § 1964(c).

6. Racketeer Influenced and Corrupt Organizations <::=>36
Common purpose requirement for association-in-fact enterprise under Racketeer Influenced and Corrupt Organizations Act (RICO) case was satisfied in hourly employees' action agaInst employer alleging that employer had worked with recruiters and temporary employment agencies to recruit and employ illegal aliens in order to cut costs and drive down wages of legal workers; alleged common purpose was to reap large economic benefit. 18 U.S.C.A. § 1962(c).
7. Racketeer Influenced and Corrupt Organizations (';;;>59
"Business interest" injury element of prima facie civil Racketeer Influenced and Corrupt Organizations Act (RICO) case was satisfied in hourly employees' action against employer alleging recruitment and hiring of large numbers of illegal aliens in order to cut costs and drive down wages of legal workers. 18 U.S.C.A. § 1964(c).

10. Racketeer Influenced and Corrupt Organizations e:->62
Hourly employees who alleged that employer had used illegal immigrants to drive down their wages stated proximate cause element of their civil Racketeer Influenced and Corrupt Organizations Act (RICO) claim against employer by alleging that employer's actions had purpose and effect of unlawfully increasing supply of workers available for its hourly workforce and depriving that workforce of any bargaining power, directly resulting in depressed wages. 18 U.S.C.A. § 1964(c).
11. Racketeer Influenced and Corrupt Organizations (';;;>62
Test for standing to bring civil Racketeer Influenced and Corrupt Organizations Act (RICO) action is whether alleged injury was directly caused by RICO violation, not whether such harm was reasonably foreseeable. 18 U.S.C.A § 1964(c).

WILLIAMS v. MOHAWK INDUSTRIES, INC.

2567

12. Racketeer Influenced and Corrupt Or· ganizations e:o:>62
Hourly employees who alleged that employer had used illegal immigrants to drive down their wages satisfied statutory standing element of their prima facie civil Racketeer Influenced and Corrupt Organizations Act (RICO) case against employer; employer allegedly had engaged in widespread and knowing hiring and harboring of illegal aliens with express purpose and direct result of lowering wages of legal workers. 18 U.S.C.A. § 1964(c).
13. Corporations e:o:>526
Racketeer Influenced and Corrupt Or· ganizations e::>112
Under Georgia law, corporations may not be sued directly under state's Racketeer Influenced and Corrupt Organizations Act (RICO) statute; however, corporation is liable under Georgia RICO if crime in question is authorized, requested, commanded, performed, or recklessly tolerated by board of directors or by managerial official acting within scope of his employment. West's Ga. Code Ann. §§ 16-2-22(a)(1), 16-14-4(a).
14. Corporations e::>423
Racketeer Influenced and Corrupt Or· ganizations e::>112
Georgia corporation was potentially lia-
ble w its legal hourly workers under state's
Racketeer Influenced and Corrupt Organizations Act (RICO) based on its supervisors' and managers' alleged encouragement of illegal-immigrant employees to return to United States and reapply for work at corporation in violation of federal law, and those individuals' alleged knowing and reckless acceptance, as proof of eligibility for employment, of docu-

ments reflecting successive different names for single person. 18 U.S.CA § 1956; West's Ga.Code Ann. §§ 16-2-22(a)(2), 16-143(9), 16-14-4(a).
15. Implied and Constructive Contracts e::>60.1
Under Georgia law, existence of contract as matter of fact between hourly employees and employer precluded employees' unjust enrichment claim against employer alleging recruitment and hiring of illegal aliens as means of driving down legal workers' wages; if plaintiff employees were not paid, they could sue for breach of contract.
16. Implied and Constructive Contracts e::>3
Under Georgia law, hourly employees
lacked standing w assert unjust enrichment
claim against employer alleging that employer's recruitment and hiring of illegal aliens resulted in fewer worker's compensation claims, thus driving down legal workers' wages; there was no showing of any connection between increased profits from lowered worker's compensation claims and wages paid to legal workers.
Appeal from the United States District Court for the Northern District of Georgia.
Before ANDERSON, HULL and GIBSON*, Circuit Judges.
PER CURIAM:
In this case, Plaintiffs Shirley Williams, Gale Pelfrey, Bonnie Jones, and Lora Sisson

* Honorable John R. Gibson, United States Circuit

tion.

Judge for the Eighth Circuit, sitting by designa-

2568

WILLIAMS v. MOHAWK INDUSTRIES.. INC.

are current or former hourly employees of ous incentive payments to employees and

Defendant Mohawk Industries, Inc. The other recruiters for locating workers that

plaintiffs filed this class-action complaint al- Mohawk eventually employs and harbors.

leging that Mohawk's widespread and know- Furthermore, "[v]arious recruiters, including

i)

ing employment and harboring of illegal Mohawk employees, have provided housing

workers allowed Mohawk to reduce labor to these illegal workers upon their arrival in

costs by depressing wages for its legal hourly North Georgia and have helped them fmd

employees and discourage worker's-compen- illegal employment with Mohawk." Addi-

sation claims, in violation of federal and state tionally, Mohawk knowingly or recklessly ac-

RICO statutes. The plaintiffs also alleged cepts fraudulent documentation from the ille-

that Mohawk was unjustly enriched by the gal aliens.

lower wages it paid, as well as the reduced

number of worker's-compensation claims it The plaintiffs further allege that Mohawk

paid. The district court denied in part and has concealed its efforts to hire and harbor

granted in part Mohawk's 12(b)(6) motion, illegal aliens by destroying documents and

and this interlocutory appeal followed. Mter assisting illegal workers in evading detection

review and oral argument, we affirm in part by law enforcement. According to plaintiffs'

and reverse in part.

complaint, Mohawk takes steps to shield

those illegal aliens from detection by, among

I. BACKGROUND
Mohawk is the second largest carPet and rug manufacturer in the United States and has over 30,000 employees. According to the plaintiffs, Mohawk has conspired with recruiting agencies to hire and harbor illegal workers in an effort to keep labor costs as low as possible.1 For example, according to the plaintiffs' complaint
Mohawk employees have traveled to the United States Border, including areas near Brownsville, Texas, to recruit undocumented aliens that recently have entered

other things, helping them evade detection during law enforcement searches and inspections at Mohawk's facilities.
According to the complaint, Mohawk's widespread and knowing employment and harboring of illegal workers has permitted Mohawk to reduce labor costs. Mohawk has done so by reducing the number of legal workers it must hire and, thereby, increasing the labor pool of legal workers from which Mohawk hires. This practice permits Mohawk to depress the wages it pays its legal hourly workers.

the United States in violation of federal Finally, the plaintiffs allege that Mohawk

law. These employees and other persons is "able to save substantial sums of money"

have transported undocumented aliens by paying its workers reduced wages. Fur-

from these border towns to North Georgia thermore, Mohawk knows that illegal work-

so that those aliens may procure employ- ers are less likely to file worker's-compensa-

ment at Mohawk. Mohawk has made vari- tion claims, and, therefore. Mohawk is able to

1. At this point in the litigation, we must assume the facts set forth in the plaintiffs' complaint are true. See Marsh v. ButlerCourlty, 268 P.3d 1014, 1023 (11th Cir,2001) (en bariC) {setting forth the facts in the case by "[a]ccepting all well-pleaded factual allegations (with reasonable inferences

drawn favorably to Plaintiffs) in the complaint as true"}. Because we must accept the allegations of plaintiffs' complaint as true, what we set out in this opinion as "the facts" for Rule 12(b){6) purposes may not be the actual facts.

i

i

WILLIAMS v. MOHAWK INDUSTRIES, INC.

2569

I
~.

save additional monies. According to the [1] In civil cases,. however, RICO plain-

plaintiffs, these benefits constitute unjust en- tiffs must also satisfy the requirements of 18

richment under state law.

U.S.C. § 1964(c). Section 1964(c) states that

Ii
i; H

"[a]ny person injured in his business or propMohawk ftled a Rule 12(b)(6) motion to erty by reason of' RICO's substantive provi-

l'
fi

dismiss the plaintiffs' complaint for failure to sions has the right to "recover threefold the

state a claim. The district court determined damages he sustains

"18 U.S.C.

that the plaintiffs had stated a claim under § 1964(c). Thus, under § 1964(c), civil RICO

both' federal and state RICO statutes, as well claimants, such as the plaintiffs here, must

as a claim for unjust enrichment under state show (1) the requisite injury to "business or

law for paying legal workers lower wages property," and (2) that such injury was "by

because of the illegal workers Mohawk em- reason of' the substantive RICO violation.

ployed. However, the district court dis- We discuss each of these requirements in

missed the plaintiffs' unjust-enrichment claim turn.

'j

insofar as it was based on the reduced num-

ber of workers-compensation claims Mohawk A. Pattern ofRacketeering Activity

was forced to pay.2

Ail mentioned above, there are four re-

quirements under § 1962(c). Because ele-

II. FEDERAL RICO CLAIMS

ments (3) and (4)-a pattern of racketeering activity-are easily met in this case (at least

Pursuant to 18 U.S.C. § 1962(c), it is ille- at the motion-to-dismiss stage), we address

gal "for any person employed by or assoclat- them first.

ed with any enterprise engaged in, or the

activities of which affect, interstate or foreign [2] "A 'pattern of racketeering activity,' commerce, to conduct or participate, directly for purposes of the RICO Act, 'requires at

or indirectly, in the conduct of such enter- least two acts of racketeering activity.'''

prise's affairs through a pattern of racketeer- Cox v. Administrator U.S. Steel & Carnegie, ing activity...... 18 U.S.C. § 1962(c). 17 F.3d 1386, 1397 (11th Cir.1994), modified

Thus, in order to establish a federal civil on other grounds by 30 F.3d 1347 (11th

RICO violation under § 1962(c), the plaintiffs Cir.1994). "An act of racketeering is com-

"must satisfy four elements of proof: '(I) monly referred to as a 'predicate act.' A

conduct (2) of an enterprise (3) through a 'pattern' of racketeering activity is shown

pattern (4) of racketeering activity.''' Jones when a racketeer commits at least two dis-

v. Childers, 18 F.3d 899, 910 (11th Cir.1994) tinct but related predicate acts." Maiz v.

(quoting Sedima, S.P.R.L. v. Imrex Co., 473 Virani, 253 F.3d 641, 671 (11th Cir.200l)

U.S. 479, 496, 105 S.Ct. 3275, 3285, 87 (quotation marks, citations, and brackets

L.Ed.2d 346 (1985». These requirements omitted). "If distinct statutory violations are

apply whether the RICO claim is civil or found, the predicate acts will be considered

criminal in nature.

to be distinct irrespective of the .circum-

2. This Court reviews the denial of a Rule 12(b)(6) motion "de novo, applying the same standard as the district coun did." Hoffman-Pugh v. Ramsey, 312 F.3d 1222. 1225 (llth Cir.2002). A complaint should not be dismissed pursuant to

Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim." Beck v. Deluilte & Touche. 144 F.3d 732, 735 (lith Cir.1998) (internal quo· tation marks and citation omitted).

2570

WILLIAMS v. MOHAWK INDUSTRIES, INC.

stances under which they arose." Cox, 17 B. Conduct of an Enterprise

F.3d at 1397 (quotation marks, citations, and [4] With regard to elements (1) and (2) of

emphasis omitted).

the four-part test under § 1962(c), the plain-

[3] According to 18 U.S.C. § 1961(1)(F), " 'racketeering activity' means any act which is indictable under the Immigration and Na-

tiffs must establish "conduct of an enterprise" and that the enterprise had a common goal. See United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 2528-29, 69

tionality Act, section 274 (relating to bringing L.Ed.2d 246 (1981) ("The enterprise is an

in and harboring certain aliens), ... if the entity, for present purposes a group of per-

act indictable under such section of such Act sons associated together for a common pur-

was committed for the purpose of financial pose of engaging in a course of conduct.").

gain."In this case, the plaintiffs have al- Furthermore, Mohawk "must participate in

leged that the defendant has engaged in an the operation or management of the enter-

open and ongoing pattern of violations of prise itself." Reves v. Ernst & Young, 507

section 274 of the Immigration and Nationali- U.S. 170, 185, 113 S.Ct. 1163, 1173, 122

I

ty Act. In particular, plaintiffs allege that L.Ed.2d 525 (1993).

I
i

Mohawk has violated and continues to vio- An enterprise "includes any individual, late: (1) 8 U.S.C. § 1324(a)(3)(A), which partnership, corporation, association, or oth-

makes it a federal crime to "knOwingly hire[ ] .er legal entity, and any union or group of

for employment at least 10 individuals with individuals associated in fact although not a

actual knowledge that the individuals are legal entity." 18 U.S.C. § 1961(4). As stat-

aliens" during a twelve-month period; (2) 8 ed in United States v. Goldin Indus., Inc.,

U.S.C. § 1324(a)(l)(A)(iii), which makes it a 219 F.3d 1271, 1275 (11th Cir.20(0), "the

federal crime to "conceal(], harbor[], or existence of an enterprise is proved by evi-

shield from detection, or attempt[] to con- dence of an ongoing organization, formal or

ceal, harbor or shield from detection" aliens informal, and by evidence that the various

that have illegally entered the United States; associates function as a continuing unit." (in-

and (3) 8 U.S.C. § 1324(a)(I)(A)(iv), which ternal quotation marks and citation omitted).

makes it a federal crime to "encourage[] or Furthermore, "the definitive factor in deter-

inducer ] an alien to come to, enter, or reside' mining the existence of a RICO enterprise is

in the United States, knowing or in reckless the existence of an association of individual

disregard of the fact that such coming to, entities, however loose or informal, that fur-

entry, or residence is or will be in violation of nishes a vehicle for the commission of two or

law." According to the plaintiffs' complaint, more predicate crimes, that is, the pattern of

-Mohawk has committed hundreds, even thou- racketeering activity requisite to the RICO

sands, of violations of federal immigration violation." [d.

laws. Consequently, we conclude that the

plaintiffs have properly alleged a "pattern of [5] In this case, the plaintiffs have al-

racketeering activity."3

leged that Mohawk and third-party temp

3. There is no dispute that these predicate acts, if they occurred, are related. See Pelletier v. Zweifel, 921 F.2d 1465, 1496-97 (lIth Cir.1991) ("Predicate acts are related if they have the same or similar purposes, results, participants, victims,

or methods of commission, or otherwise are in· terrelated by distinguishing characteristics and are not isolated events." (internal quotation marks and citation omitted)).

WILLIAMS v. MOHAWK INDUSTRIES, INC.

2571

agencies/recruiters have conspired to violate federal immigration laws, destroy documentation, and harbor illegal workers. Specifically, the plaintiffs allege that
[e]ach recruiter is paid a fee for each worker it supplies to Mohawk, and some of those recruiters work closely with Mohawk to meet its employment need by offering a pool of illegal workers who can be dispatched to a particular Mohawk facility on short notice as the need arises. Some recruiters find workers in the Brownsville, Texas area and transport them to Georgia. Others, like TPS, have relatively formal relationships with the company in which they employ illegal workers and then loan or otherwise provide them to MohaWk for a fee. These recruiters are sometimes assisted by Mohawk employees who carry a supply of. social security cards for use when a prospective or existing employee needs to assume a new identity.
Given the Rule 12(b)(6) stage of the litigation, the plaintiffs' complaint must be taken as true, and it has sufficiently alleged an "enterprise" under RICO; that is an association-in-fact between Mohawk and third-party recruiters. This Court has never required anything other than a "loose or informal" association of distinct entities. Mohawk and the third-party recruiters are distinct entities that, at least according to the complaint, are engaged in a conspiracy to bring illegal workers into this country for Mohawk's benefit. As such, the complaint sufficiently alleges an "enterprise" under RICO.
[6] As for the common purpose, the plaintiffs' complaint alleges that "[t]he recruiters and Mohawk share the common purpose of obtaining illegal workers for employment by Mohawk." The complaint further alleges that "[eJach recruiter is paid a fee for each worker it supplies to Mohawk" and that "Mohawk has made various incentive pay-

ments to employees and other recruiters for locating workers that Mohawk eventually employs and harbors." Furthermore, "[t]he acts of racketeering activity committed by Mohawk have the same or similar objective: the reduction of wages paid to Mohawk's hourly workforce." What is clear from the complaint is that each member of the enterprise is allegedly reaping a large economic benefit from Mohawk's employment of illegal workers.
In United States v. Church, 955 F.2d 688, 698 (11th Cir.1992), this Court concluded that the common purpose of making money was sufficient under RICO. Because the complaint clearly alleges that the members of the enterprise stand to gain sufficient financial benefits from Mohawk's widespread employment and harboring of illegal workers, the plaintiffs have properly alleged a "common purpose" for the purposes of RICO.
Furthermore, Mohawk "must participate in the operation or management of the enterprise itself." Reves, 507 U.s. at 185, 113 S.Ct. at 1173. That is, Mohawk "must have some part in directing" the affairs of the enterprise. fd. at 179, 113 S.Ct. at 1170. However, the Supreme Court has cautioned that "RICO liability is not limited to those with primary responsibility for the enterprise's affairs .... " fd. In their complaint, the plaintiffs allege that "Mohawk participates in the operation and management of the affairs of the enterprise ... ," which includes some direction over the recruiters. 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 enterprise. Again, at this stage in the litigation, we simply cannot say whether the plaintiffs will be able to establish that Mohawk had "some part in directing" the affairs of the

2572

WILLIAMS v. MOHAWK INDIJSTRIES, INC.

enterprise. However, they have alleged suf- However, the Seventh Circuit in Baker

ficient acts to survive a Rule 12(b)(6) motion. also concluded that there was "another fatal

problem" with the complaint. Id. at 69l.

Accordingly, we conclude that the plain- Although stating that an "enterprise" argu-

tiffs' complaint states a claim that is cogniza- ably existed, the Seventh Circuit determined

ble under § 1962(c). In so doing, we note that there was not a common purpose among t'l /
that the allegations in this case are similar to the entities in the enterprise. Id. 'M-~

those in cases recently decided by the Sec- Specifically, the Seventh Circuit stated that

ond, Sixth, and Ninth Circuits. See Trolling- the employer "wants to pay lower wages; the

er v. Tyson Foods, 370 F.3d 602 (6th Cir. recruiters want to be paid more for services

2004) (former employees alleging employer rendered (though [the employer] would like

used illegal immigrants in order to depress to pay them less); the Chinese Mutual Aid

wages); Mendoza v. Zirkle Fruit Co., 301 Association wants to assist members of its

I.· ,.. j, I

F.3d 1163 (9th Cir.2002) (legally documented ethnic grQUp. These are divergent goals."
workers alleging that employers leveraged Id.~

I I~ I
I"I"
j
1,

hiring of undocumented workers in order to depress wages); Commercial Cleaning Servs., L.L.C. v. Colin Service Sys., Inc., 271 F.3d 374 (2d Cir.200l) (company alleging competitor hired undocumented workers in order to underbid competing firms). In each of these decisions, the circuit court determined that, at the Rule 12(b)(6) stage, the

In our circuit, however, there has never been any requirement that the "common purpose" of the enterprise be the sole purpose of each and every member of the enterprise. In fact, it may often be the case that different members of a RICO enterprise will enjoy different benefits from the commission of .predicate acts. This fact, however, is insuffi-

plaintiffs had alleged sufficient damages to cient to defeat a civil RICO claim. Rather,

be permitted to pursue their RICO claims. all that is required is· that the enterprise

I,
1; ! .

Although none of the opinions specifically addressed § 1962(c)'s requirements, each of

have a common purpose. In this case, the complaint alleges that Mohawk and the re-

these cases has essentially the same factual cruiters, under Mohawk's direction, worked

basis for RICO liability as the complaint together to recruit illegal workers to come to

before this Court.

Georgia and that they had the common pur-

We recognize that the above conclusion puts our circuit in conflict with the Seventh Circuit's decision in Baker v. IBP, Inc., 357
F.3d 685 (7th Cir.2004), cen. denied, - U.S.
- , 125 S.Ct. 412, 160 L.Ed.2d 318 (2004). In Baker, an employees' class-action lawsuit alleged that a meat-processing facility conspired with recruiters (and a Chinese aid group), and violated RICO by employing undocumented, illegal workers in an effort to

pose of providing illegal workers to Mohawk so that Mohawk could reduce its labor costs and the recruiters could get paid. This commonality is all that this circuit's case law requires. See Church, 955 F.2d at 69B. Again, while the plaintiffs may be unable to prove such allegations at trial, we cannot say at this 12(b)(6) stage of the litigation that they have failed to properly allege a common purpose.

drive down employee wages. The Seventh We recognize that the Baker Court "also

Circuit concluded that the employees' union concluded that there was no way to establish

was a necessary party to the lawsuit. I d. at that the employer "operate(d] or manage(d]

690-91.

th[e] enterprise through a pattern of racke-

WILLIAMS v. MOHAWK INDUSTRIES, INC.

2573

teering activity." Baker, 357 F.3d at 691 (emphasis omitted). However, as this Court has noted, "the Supreme Court has yet to delineate the exact boundaries of the operation or management test." United States v. Starrett, 55 F.3d 1525, 1546 (11th Cir.1995). Although the exact boundaries have not been established, it is possible that the plaintiffs will be able to establish that Mohawk played some part in directing the affairs of the enterprise. Whether the plaintiffs ultimately establish sufficient evidence to meet the boundaries of the operation-or-management test is a question best answered at the summary-judgment stage or at trial. Accordingly, we conclude that the plaintiffs have sufficiently alleged conduct that may potentially satisfy the operation-or-management test. AI; such, the plaintiffs are entitled to continue with their claims at this juncture.
Having reviewed the four elements of § 1962(c), we turn to § 1964(c).

C. Injury to "Business or Property" Interest Under RICO

[7,8] AI; indicated above, RICO's civil-

suit provision states that "[a]ny person in-

jured in his business or property by reason

of' RICO's substantive provisions has the

right to "recover threefold the damages he

sustains .... " 18 U.S.C. § 1964(c). "The

terms 'business or property' are, of course,

words of limitation which preclude [certain

forms 00 recovery." Doe v. Roe, 958 F.2d

763, 767 (7th Cir.1992). However, RICO is

to

I construe" Sedima, 473 U.S.

at 497-98, 105 Ret. at 3285-86

c-

cordingiy, we must determine whether the

plaintiffs have a "business or property" inter-

est that could be injured under RICO. 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.

Indeed, this case is similar to the Ninth Circuit's Mendoza decision, where legally documented agricultural workers sued fruit growers under RICO alleging that the growers depressed wages by hiring illegal workers. In Mendoza, the defendant claimed that the employees would have to show a "'property right' in the lost wages[] by showing that they were promised or contracted for higher wages." Mendoza, 301 F.3d at 1168 n. 4. The Ninth Circuit concluded that this argument was misplaced, pointing out that the plaintiffs' claim did not implicate procedural due process. fd. Rather, the Ninth Circuit concluded that ''what is required is precisely what the employees allege here: a legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes." Id. (citations omitted). Given that a relationship clearly exists between plaintiff workers and their employer, Mohawk, we conclude that a similar business interest exists in this case, and that the employees' alleged injury to their business interests satisfies the business-interest requirement. Consequently, the plaintiffs have alleged a sufficient injury to a business interest to pursue their RICO claims.
D. "By Reason Of' the Substantive RICO Violations
[9] We now turn to the "by reason of' requirement contained in § 1964(c). The "by reason of' requirement implicates two concepts: (1) a sufficiently direct injury so that a plaintiff has standing to sue; and (2) proximate cause, whereby the wrongful conduct is shown to be a substantial cause of the alleged injury and causal connection is foreseeable and not s eculative. See Trollinger, 370 F.3d at 61 ("RICO's civil-suit provision imposes two d tinct but overlapping limitations

2574

WILLIAMS v. MOHAWK INDUSTRIES, INC.

on claimants-standing and proximate causation." Id. (internal quotation marks

cause."); Green LeafNursery v. E.l. DuPont and citation omitted).

De Nemaurs and Co., 341 F.3d 1292, 1307

(11th Cir.2(03), cert. denied, 541 U.S. 1037, [to] In this case, the plaintiffs have al-

I'

124 S.et. 2094, 158 L.Ed.2d 723 (2004) leged sufficient proximate cause to withstand

I,

("[OJne or more of the predicate acts [in a defendant Mohawk's motion to dismiss. Ac-

i"i,

RICO claim] must not only be the 'but for' cording to their complaint, Mohawk has hired

cause of the injury, but the proximate cause illegal workers "[i]n an effort to keep labor

ag well." (citations omitted»; Mendoza, 301 costs as low ag possible." Furthermore,

F.ad at 1168-72 (concluding that the plain- "Mohawk's emploYment and harboring of

tiffs had satisfied both "statutory" and "con- large numbers of illegal workers has enabled

stitutional" standing requirements of RICO); Mohawk to depress wages and thereby pay

see also Holmes v. Securities Investor Pro- all of its hourly employees, including legally

tection Cerry., 503 U.S. 258, 268-69, ll2 s.et. employed workers who are members of the

1311, 1318, 117 L.Ed.2d 582 (1992) (stating in class, wages that are lower than they would

a RICO case that "a plaintiff who complain[sJ be if Mohawk did not engage in this illegal

of harm flowing merely from the misfortunes conduct." Again, the complaint alleges that

visited upon a third person by the defen- "Mohawk's widespread employment and har-

dant's acts was generally said to stand at too boring of illegal workers hag substantially

remote a distance to recover" (citations omit- and unlawfully increaged the supply of work-

ted». Despite some significant overlap, we ers from which Mohawk makes up its hourly

address the proximate cause and standing ,workforce. This unlawful expansion of the

concepts separately.4
j'

labor pool has permitted Mohawk to depress

I I

the wages that it pays all its hourly employ-

i

(i) Proximate Cause

ees .... " The plaintiffs also allege that

I

~ ;

"It is well-established that RICO plaintiffs "[o]ne purpose and intended effect of Mo-

must prove proximate causation in order to hawk's widespread employment and harbor-

recover." Coo;, 17 F.3d at 1399 (citations ing of illegal workers is to deprive Mohawk's

omitted). "A proximate cause is not, howev- hourly workforce of any individual or collec-

er, the same thing ag a sole cause. Instead, tive bargaining power" and that they "were

a factor is a proximate cause if it is a sub- injured by direct and proximate reason of

stantial factor in the sequence of responsible Mohawk's illegal conduct."

4. As the Sixth Circuit aptly explained,
the two concepts overlap and that is particu. larly true in the context of civil RICO claims. As a general matter. they overlap because a plaintiff who lacks standing to vindicate a derivative injury also will be unable to show proximate cause. And as a matter of RICO law, the two concepts overlap because they both grow out of the "by reason of" limitation in RICO-namely, the requirement that claimants establish that their injury was "by reason of" a RICO predicate act violation. The "by reason of" limitation, in other words, bundles together a variety of "judicial tools," some of

which are traditionally employed to decide causation questions and some of which are employed to decide standing questions. Holmes, 503 U.S. at 268, 112 S.Ct. [at 1318J ("Here we use 'proximate cause' to label generically the judicial tools used to limit a person's responsibility for the consequences of that person's own acts. At bottom. the notion of proximate cause reflects ideas of what justice demands, or of what is administratively possible and convenient.") (quotation omitted) .... Trollinger. 370 F.3d at 613.

WILLIAMS v. MOHAWK INDUSTRIES, INC.

2575

Given these allegations, which we must assu~e are true at this Rule 12(b)(6) stage of

bargained-for wage-scale; (3) that the iIlegal immigrants allegedly brought into this

the litigation, it is clear that the plaintiffs country through Tyson's efforts allowed

have properly alleged proximate cause. Ac- Tyson not to compete with other busi-

cording to the complaint, Mohawk's wide- nesses for unskilled labor; and (4) that

spread scheme of hiring and harboring of Tyson's legal workers did not "choose" to

illegal workers has the purpose and direct remain at Tyson for less money than other

result of depressing the wages paid to the businesses offered, but had no choice in

plaintiffs. This is all that is needed to estab- the matter given the hiring needs of the

lish proximate cause.

other businesses in the area and the influx

Our conclusion is consistent with the two of illegal immigrants at Tyson's facilities.

other circuits to have addressed this proxi- While Tyson's proximate-cause argument

mate cause issue in RICO decisions involving may well carry the day at the summary-

schemes to depress wages of legal workers judgment stage, it requires more assis-

by widespread hiring of illegal workers. See tance than the complaint alone provides.

Trollinger, 370 F.3d at 619; Mendoza, 301

One other circUit has reached the same

F.3d at 1171-72.

result on somewhat similar facts ... Men-

a; ;g.5 a

In Trollinger, the situation in which

Sixth Circuit former Tyson

ceomnpsliodyeereesdl~Dlldoiza~.~~~Q

}iI.a~

);t. It(t.$

a oultry processing plant sued their former employer under RICO, alleging that the use of illegal workers permitted the employer to lower wages via the collective-bargaining agreement with the union representing the employees. The Sixth Circuit, reviewing the district court's dismissal of the employees' complaint under Rule 12(b)(6), determined that "at this preliminary stage in the proceedings" it could not conclude that there was no likelihood of success on the merits. 1h!~~~. The Sixth Circuit explained that

Although the plaintiffs in this case may not ultimately satisfy the proximate-cause requirement, we conclude it remains possible that plaintiffs may prove their allegations, and we cannot say at this Rule 12(b)(6) stage that there is no possibility of such proof. Consequently, we join the Sixth and Nillth Circuits in concluding that employees such as the ones in this case have alleged sufficient proximate cause to proceed with their RICO claims.

it remained possible that the legal-worker plaintiffs might prove the following allega-

(ii) Statutory Standing

tions in their complaint:

[11 ] Lastly, we address RICO's statutory

(1) that Tyson hired sufficient numbers of standing limitation that also grows out of the

illegal aliens to impact the legal employees' ''by reason of' limitation in § 1964(c).

wages; (2) that each additional illegal "[T]he test for RICO standing is whether the worker hired into the bargaining unit by alleged injury was directly caused by the

Tyson has a measurable impact on the RICO violation, not whether such harm was

S. As noted earlier. in Mendoza. the Ninth Circuit was faced with a simBal" suit in which legally documented agricultural workers sued fruit growers under RICO alleging that the growers depressed wages by hiring illegal-immigrant

workers. 301 F.3d at 1166. Under almost the exact same legal theory as advanced in this case, the Mendoza Court concluded that the plaintiffs' ..causation allegations are sufficient at this stage." [d. at 1172.

2576

WILLIAMS v. MOHAWK INDUSTRIES, INC.

reasonably foreseeable." Bivens Gardens of hiring undocumented immigrants was to

O.ffice Bldg., Inc. v. Barnett Banks of Fla., depress the wages of legally documented em-

Inc., 140 F.3d 898, 908 (11th Cir.1998); see ployees. The Ninth Circuit concluded that

Sedima, 473 U.S. at 496-97, 105 RCt. at 3285 the plaintiffs had statutory standing because

("[TJhe plaintiff only has standing if, and can "we are unable to discern a more direct

only recover to the extent that, he has been victim of the illegal conduct." Mendoza, 301

injured in his business or property by the F.3d at 1170. The Ninth Circuit explained:

conduct constituting the violation" and the The documented employees here do not

plaintiff's damages must "flow from the com- complain of a passed-on harm. They al-

mission of the predicate acts."); Green Leaf lege that the scheme had the purpose and

Nursery, 341 F.3d at 1307 (stating that plain- direct result of depressing the wages paid

tiffs must show a "direct relation between to them by the growers. Thus, as the

the injury asserted and the injurious con- district court correctly determined, "plain-

duct" and that we ask "whether the alleged tiffs have stated a claim that they are the

conduct was 'aimed primarily' at a third par- direct victims of the illegal hiring scheme."

ty" (quotation marks and citations omitted»;

Bivens, 140 F.3d at 906 (concluding that a

We also note that the undocumented

!..

party whose alleged injuries result from "the workers cannot "be counted on to bring

i,:
j'"
'"

misfortunes visited upon a third person by suit for the law's vindication." As the

the defendant's acts lacks standing to pursue district court noted, the fact that RICO

a claim under RICO" (quotation marks and specifically provides that illegal hiring is a

citation omitted»; Pelletier v. Zweifel, 921 predicate offense indicates that Congress

F.2d 1465, 1497 (11th Cir.1991) (stating that contemplated the enforcement of the immi-

the plaintiff has RICO standing if he shows gration laws through lawsuits like this one.

"a causal connection between his injury and a predicate act").6 Thus, we must evaluate whether the plaintiffs' injury is sufficiently rurect to give plaintiffs standing to sue for Mohawk's alleged RICO violations.

Id. (internal citations omitted). The Ninth Circuit further stated that
the workers must be allowed to make their case through presentation of evidence, including experts who will testify about the

Both the Sixth and Ninth Circuits have labor market, the geographic market, and

expressly concluded that legal workers have the effects of the illegal scheme. Ques-

sufficiently direct injuries for RICO standing tions regarding the relevant labor market

in similar cases. Trollinger, 370 F.3d at and the growers' power within that market

615-618; Mendoza, 301 F.3d at 1170. The are exceedingly complex and best ad-

Ninth Circuit's Mendoza decision is particu- dressed by economic experts and other

larly well-reasoned and instructive on the statutory standing issue.

evidence at a later stage in the proceedings.

.As mentioned earlier, the Mendoza plain- Ia.. at 1171.

tiffs were legal workers who claimed that the [12] Plaintiffs' complaint clearly alleges

purpose and result of the defendants' scheme that Mohawk has engaged in widespread and

6. This Court has more often evaluated the ·'by reason of' requirement primarily as part of its proximate·cause analysis, as opposed to the distinct concept of standing. However, despite sig-

nificant overlap, we must also examine whether the plaintiffs' injury is sufficiently direct to per· mit standing.

WILLIAMS v. MOHAWK INDUSTRIES, INC.

2577

kno,Wing hiring and harboring of illegal aliens plaintiff must show that the defendant com-

with the express purpose and direct result of mitted predicate offenses (set forth in

lowering the wages of legal workers. For O.C.G.A. § 16-14-3(9» at least twice." ld.

example, the complaint alleges that "(o]ne at 521 (quotation marks and citation omit-

purpose and intended effect of Mohawk's widespread employment and harboring of illegal workers is to deprive Mohawk's hourly workforce of any individual or collective bargaining power." The plaintiffs also allege that "[t]he acts of racketeering activity committed by Mohawk have the same or similar objective: the reduction of wages paid to Mohawk's hourly workforce." Furthermore, the plaintiffs ''were injured by direct and proximate reason of Mohawk's illegal con-

ted).
With regard to their state-law RICO claim, the plaintiffs rely on 18 U.S.C. § 1546 (relating to the fraud and misuse of visas, permits, and other documents) for their predicate offenses.7 Despite being limited to § 1546, the plaintiffs have alleged sufficiently numerous violations to satisfy the racketeering activity requirement under Georgia state law. In fact, according to the complaint, "Mohawk

I

duct." Given this stage of the litigation, we has committed hundreds, probably thouconclude that the plaintiffs have sufficiently sands, of violations of ... 18 U.S.C. § 1546

alleged that Mohawk's illegal conduct was as part of its pattern of racketeering activi-

aimed primarily at them. Consequently, the ty."

district court correctly denied Mohawk's 12(b)(6) motion as it relates to the plaintiffs' federal civil RICO claim.

There are, however, two issues under the Georgia RICO statute that warrant further discussion: (1) whether, under the Georgia

III. STATE LAW RICO

RICO statute, a corporation may be sued; and (2) whether the plaintiffs have sufficient-

Under the Georgia RICO statute, "[i]t is ly alleged proximate cause to have standing

unlawful for any person, through a pattern of to bring a Georgia RICO suit.

racketeering activity or proceeds derived

therefrom, to acquire or maintain, directly or A Whether Corporations May be Sued Un-

indirectly, any interest in or control of any

der Geargia RICO

enterprise, real property, or personal proper-

ty of any nature, including money." "Although this is a civil suit, RICO predi-

D.C.G.A. 16-14-4(a). Unlike federal civil cate acts are criminal offenses." Cobb Coun-

RICO, the Georgia RICO statute does not ty, 460 S.E.2d at 521 (quotation marks omit-

require proof of an "enterprise." Cobb ted). Therefore, in order to detennine

County v. Jones Group, P.L.C., 218 Ga.App. whether a corporation may be held liable

149, 460 S.E.2d 516, 520--21 (1995). Rather, under RICO, Georgia courts look to O.C.G.A

under Georgia RICO, the plaintiffs need only § 16-2-22. See Cobb County, 460 S.E.2d at

I

establish racketeering activity; that is, "a
~ \J.). ( . 7. According to D.C.G.A. § 16-14-3(9)(A)(xxix),

521.

~

attempt to rely on 1324, as they do with their

"racketeering activity" is defined as "conduct federal civil RICO daims, such a claim is barred

11

defined as 'racketeering activity' under 18 U.S.C.

under the Georgia RICO statute because·§ 1324

I

Section 1961(l)(A), (B), (C), and (D)." The only "racketeering activity" contained in 18 U.S.c.

is listed as a "racketeering offense" in 18 U.S.C. § 1961(1)(F), and not in subsections (A), ( ), (C).

I
,

§ 1961(1)(A), (B), (C), or (D) on which the plaintiffs rely iS § 1546. To the extent the plaintiffs
l

or (D).

\g \).~LJ

2578

WILLIAMS v. MORAWK INDUSTRIES, INC.

[13-J There are two means by which a reflect successive different names for a single

corporation may be held liable: (1) directly person." The plaintiffs' complaint is rife

(under O.C.G.A. § 16-2-22(a)(1»; and (2) with allegations that supervisors and manag-

through its agents and employees under certain situations (under O.C.G.A § 16-222(a)(2». The Georgia Supreme Court already has concluded that corporations may not be sued directly under RICO. Clark v. Security Life Ins. Co. of America, 270 Ga. 165, 509 S.E.2d 602, 604 n. 11 (1998) ("A

ers at Mohawk were either aware of, or in reckless disregard of, the misuse of various work-related documents. Consequently, the plaintiffs have alleged sufficient conduct that, if proven, would allow them to hold Mohawk liable under state law.

corporation may also face prosecution under

O.C.GoA § 16-2-22(a)(1) for a crime if the B. Standing to Pursue State-Law RICO

statute defining the crime clearly indicates a

Claims

legislative purpose to impose liability on a corporation. RICO, however, is not such a

As with Federal RICO claims, under Geor-

statute .... ").

gia's RICO statute, "[aJny person who is

injured by reason of any violation of' Geor-

Although a corporation cannot be prosecut;: gia's RICO statute "shall have a cause of

ed directly under RICO, a corporation will be action for three times the actual damages

liable under Georgia RICO "if the 'crime is sustained

"O.C.G.A. § 16-14-6(c).

authorized, requested, commanded, performed, or recklessly tolerated by the board of directors or by a managerial official who is acting within the scope of his employment.' " Clark, 509 S.E.2d at 604 (quoting § 16-2-

"[BJecause the state RICO act is modeled upon and closely analogous to the federal .RICO statute," Georgia courts "Jookto federal authority" in determining RICO standing,

22(a)(2». Whether the acts were performed Maddox v. So. Engineering Co., 231 Ga.App.

at the request, command, or authorization of 802, 500 S.E2d 591, 594 (1998) (quotation

I, ,

the board of directors or other managers is a marks and citation omitted). We already

question of proof at trial, not a sufficiency-of- have concluded that the plaintiffs have al-

the-pleading issue. See State v. Miliiary leged sufficient injury to pursue their federal

Circle Pet Center No. 94, Inc., 257 Ga. 388, RICO claims, and accordingly, we conclude

360 8.E.2d 248, 249 (1987) ("Although the that they have alleged a sufficient injury to

state must prove the applicable provisions of pursue their state RICO claims as well. Al-

[§ 16-2-22(a)(2)J at trial against a criminal though under Georgia law the plaintiffs are

defendant, it is not necessary that the state limited to predicate acts arising out of 18

allege these provisions in the accusation."). U.S.C. § 1546, we conclude that the plain-

tiffs' allegations are neither too remote nor

[14] In this case, the plaintiffs' complaint too indirect to satisfy Georgia's proximate-

alleges that "Mohawk supervisors have en- cause requirement under state-law RICO.

cOllraged these [illegal-immigrant] employees See Maddox, 500 8.E.2d at 594 ("In short,

to return to the United States and reapply the language 'by reason of imposes a proxi-

for work at Mohawk in violation of United mate causation requirement on the plaintiff."

States law." Furthermore, "Mohawk also (citation omitted»; id. (A plaintiff "must

has knowingly and recklessly accepted proof show a causal connection between his injury

of eligibility for employment documents that and a predicate act." (citation omitted».

WILLIAMS v. MORAWK INDUSTRIES, INC.

2579

IV. UNJUST ENRICHMENT

ed to Mohawk's purported savings from low-

[151 The plaintiffs' complaint claims that er wages should have been dismissed.

Mohawk's illegal conduct permits it "to reap substantial wage savings" because Mohawk pays plaintiffs lower wages than it would otherwise be forced to pay. Therefore, ac-

[16J Ai>, for plaintiffs' claims that hiring illegal workers resulted in fewer worker'scompensation claims, there is no reasonable

cording to the plaintiffs' complaint, Mohawk allegation that this fact, even if true, is conhas been unjustly enriched under state law. nected to the plaintiffs receiving lower

Plaintiffs also claim that Mohawk has been wages. To put it another way, the fact that

unjustly enriched because the hiring of illegal Mohawk may have increased profits by low-

aliens has led to a reduced number of work- ering the number of worker's-compensation

er's-compensation claims. Both of plaintiffs' claims it paid is not related to what wages

•

state-law unjust-enrichment claims fail.

Mohawk paid the plaintiffs. Consequently,

Here, the plaintiffs were all paid an agreed-upon wage. In essence, the plaintiffs have a contract to work for the defendant

the district court correctly determined that the plaintiffs did not have standing to assert this claim.

and were paid the agreed-upon wage. In

Georgia, "fuJnjust enrichment is an equitable concept and applies when as a matter of fact

V. CONCLUSION

there is no legal contract .... " St. Paul Mercury Ins. Co. v. Meeks, 270 Ga. 136, 508 S.E.2d 646, 648 (1998) (quotation marks and citation omitted); see Bonem v. Golf Club of Georgia, Inc., 264 Ga.App. 573, 591 S.E.2d 462,467-68 (2003). In this case, there was a legal contract as a matter of fact (Le., if the plaintiffs were not paid, they could sue for breach of the employment contract). See, e.g., SurgiJet, Inc. v. Hicks, 236 Ga.App. 80, 511 S.E.2d 194, 195 (1999); Brazzeal v. Commercial Cas. Ins. Co., 51 Ga.App. 471, 180

For all the above reasons, we conclude that the district court properly denied Mohawk's Rule 12(b)(6) motion as it related to both the plaintiffs' federal and state RICO claims. Furthermore, the district court properly dismissed the plaintiffs' unjust-enrichment claim as it related to worker's compensation. However, the district court should have also dismissed the plaintiffs' unjust-enrichment claim as it related to the agreed-upon wages that plaintiffs received.

RE. 853, 853 (1935). Therefore, there can be AFFIRMED IN PART, REVERSED IN

no unjust enrichment. Consequently, the PART, AND REMANDED FOR FUR-

plaintiffs' unjust-enrichment claim as it relat- THER PROCEEDINGS.

U.S. Court of Appeals, Eleventh Circuit-West, a Thomson business, Saint Palll, Minn.

 
 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION

Shirley Williams, Gale Pelfrey, Bonnie Jones, and Lora Sisson, individually and on behalf of a class,

Plaintiffs,

v.

CIVIL ACTION FILE

NO. 4:04-CV-0003-HLM

Mohawk Industries, Inc.,

Defendant.

ORDER

This is a class action alleging violations of the federal

and Georgia Rackeeter Influenced Corrupt Organizations

Acts ("RICO"). The case is before the Court on Plaintiffs'

Motion for Discovery [77].

A072A (Rev.8/82)

I. Background On January 6, 2004, Plaintiffs filed this lawsuit.
Plaintiffs are current and former hourly employees of Defendant who claim that Defendant's alleged employment and harboring of illegal aliens has depressed their wages. Plaintiffs assert the following claims: (1) a claim that Defendant's conduct violates 18 U.S.C.A. § 1962(c)(Compl.
1111 88-92); (2) a claim that Defendant's conduct violates O.C.G.A. § 16-14-4(a) (id. 1111 93-98); (3) a claim that
Defendant's conduct violates O.C.G.A. § 16-14-4(c) (id.1I1I 99-105); and a claim for unjust enrichment arising under
Georgia law (id. 1111 106-110). Plaintiffs also seek
certification of a class pursuant to Federal Rule of Civil Procedure 23. (kl1l46.)
2
A072A (Rev.8182)

On February 9, 2004, Defendant filed a Motion to

i I

Dismiss. Defendant requested that the Court dismiss

I

I

Plaintiffs' federal and state RICO claims. Defendant also

requested that the Court decline to exercise its pendent

jurisdiction over Plaintiffs' state law claims.

On April 12, 2004, the Court granted in part and denied

in part Defendant's Motion to Dismiss. (Order of Apr. 12,

2004.) The Court denied the Motion to Dismiss with respect

to Plaintiffs' federal and Georgia RICO claims and with

respect to Plaintiff's unjust enrichment claim relating to

Defendant's wage savings in employing Plaintiffs at a

reduced rate, but granted the Motion to Dismiss with

respect to Plaintiffs' unjust enrichment claim relating to

Defendant's savings with respect to workers' compensation

claims. (kL)

3
. AO 72A
(Rev.8/82)

On May 27, 2004, the Court granted Defendant's request to certify its April 12, 2004, Order for an interlocutory appeal. (Order of May 27, 2004.) The Court also stayed discovery pending resolution ofthe interlocutory
appeal. (ldJ
On June 9, 2005, the United States Court of Appeals for the Eleventh Circuit entered an Order affirming in part and reversing in part the Court's ruling on the Motion to Dismiss. Williams v. Mohawk Indus .. Inc., 411 F.3d 1252 (11 th Cir. 2005). The Eleventh Circuit affirmed the Court's decision with respect to Plaintiffs' RICO claims, but reversed the Court's denial of the Motion to Dismiss with respect to Plaintiffs' unjust enrichment claims based on Defendant's wage savings in employing Plaintiffs at a
reduced rate. kl
4
A072A . (Rev.8/82)

Defendant filed a petition for rehearing en banc with the Eleventh Circuit. On July 29, 2005, while that petition remained pending before the Eleventh Circuit, Plaintiffs filed a Motion to Lift the Stay of Discovery in this Court.
On August 8, 2005, the Eleventh Circuit denied Defendant's petition for rehearing en banco On August 11, 2005, Defendant filed a Motion to Continue the Stay of Discovery Pending its Petition for Certiorari.
On August 16, 2005, the Eleventh Circuit issued its mandate in the case. On August 18, 2005, the Eleventh Circuit returned the record on appeal to the Court.
On August 18, 2005, the Court entered an Order staying discovery in this case until the Supreme Court either denied Defendant's petition for a writ of certiorari or granted Defendant's petition and decided the case on its merits.
5
A072A (Rev.8/82)

(Order of Aug. 18,2005.) On October 7,2005, Defendant filed a petition for certiorari with the Supreme Court, raising the following questions for review: (1) whether a defendant corporation and its agents can constitute an enterprise under RICO; and (2) whether Plaintiffs had stated proximately caused injuries to business property by alleging that the hourly wages they accepted were too low. On December 12, 2005, the Supreme Court granted certiorari as to the first question presented in the petition. Mohawk Indus., Inc. v. Williams, 126 S. Ct. 830 (2005).
On April 25, 2006, the Supreme Court held oral arguments in the case. On June 5, 2006, the Supreme Court dismissed the writ of certiorari limited to the first question contained in the petition for certiorari as improvidently granted, granted the petition for certiorari, and
6
A072A (Rev.8/82)

remanded the case to the Eleventh Circuit for further consideration in light of Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006). Mohawk Indus., Inc. v. Williams, 126 S. Ct. 2016 (2006).
On September 27, 2006, the Eleventh Circuit issued an opinion concluding that the Court properly denied Defendant's Motion to Dismiss as to Plaintiffs' federal and state RICO claims. Williams v. Mohawk Indus., Inc., 465 F.3d 1277 (11th Cir. 2006). The Eleventh Circuit remanded
the case to this Court "for further proceedings." ld... at 1295.
On October 9, 2006, Defendant filed a petition for rehearing en banco On November 22, 2006, the Eleventh Circuit denied Defendant's petition for rehearing en banco On November 30, 2006, the Eleventh Circuit issued its mandate.
7
A072A (Rev.8/82)
I

On December 13, 2006, Plaintiffs filed their Motion for Discovery. Plaintiffs request that the Court issue an Order confirming that the stay of discovery in this case has expired according to its terms and directing the parties to proceed with discovery according to the terms outlined in the March 15, 2004, scheduling order entered by the Court.
On December 19, 2006, Defendant filed a second petition for a writ of certiorari with the Supreme Court. On January 2,2007, Defendant filed its response in opposition to Plaintiff's Motion for Discovery, arguing that the Court should stay discovery in this case until the Supreme Court denies Defendant's petition for a writ of certiorari or rules on the merits of the case.
8
A072A (Rev.8/82)
I

II. Discussion Plaintiffs have requested that the Court confirm that the
discovery stay imposed by the August 18, 2005, Order has expired, and that the Court allow Plaintiffs to conduct discovery as outlined in the March 2004 scheduling order. Plaintiffs argue that: (1) their "claims have already been submitted to far greater appellate scrutiny than would ordinarily occur after final judgment," (PI.'s Br. Supp. Mot. Discovery at 4); (2) further delay is no longer appropriate because the Eleventh Circuit has issued a mandate directing the Court to continue with the case, and Defendant must request any further stays from the Eleventh Circuit or from the Supreme Court, (id. at 4-5); (3) the violations of federal law alleged by Plaintiffs are longstanding and ongoing, (id. at 5); and (4) the Eleventh Circuit repeatedly
9
A072A . (Rev.8/82)

has confirmed the Court's conclusion that Plaintiffs' Complaint states a claim for which relief can be granted, and the likelihood that the Supreme Court will grant a second petition for a writ of certiorari in the case is remote.
Defendant, in turn, argues that a substantial probability exists that the Supreme Court will review at least one of the legal issues raised by its petition for a writ of certiorari, and that the Supreme Court will likely decide whether to grant the petition by the end of February 2007. Defendant contends that a further, modest delay of discovery will not prejudice Plaintiffs in the event that the Supreme Court denies the petition, and that a stay of discovery will conserve the resources of the parties and the Court in the event that the Supreme Court grants certiorari and ultimately dismisses Plaintiffs' federal RICO claim.
10
A072A (Rev.8/82)

A072A (Rev.8/82)

For the following reasons, the Court finds that Plaintiffs'
argument that 28 U.S.C.A. § 2101(f) prohibits the Court
from entering another stay of discovery is misplaced. 28
U.S.C.A. § 2101 (f) provides:
In any case in which the final judgment or decree of any court is subject to review by the Supreme Court on writ of certiorari, the execution and enforcement of such judgment or decree may be stayed for a reasonable time to enable the party aggrieved to obtain a writ of certiorari from the Supreme Court. The stay may be granted by a judge of the court rendering the judgment or decree or by a justice of the Supreme Court, and may be conditioned on the giving of security, approved by such judge or justice, that if the aggrieved party fails to make application for such writ within the period allotted therefor, or fails to obtain an order granting his application, or fails to make his plea good in the Supreme Court, he shall answer for all damages and costs which the other party may sustain by reason of the stay.
11

28 U.S.C.A. § 2101 (f). First, the opinion at issue is not a
final judgment, but instead resolves an interlocutory appeal. Second, Defendant does not seek a stay of the Eleventh Circuit's mandate in the case, but instead simply seeks a stay of discovery. The Eleventh Circuit simply returned the case to this Court "for further proceedings." Although those further proceedings likely will include conducting discovery, the Eleventh Circuit's opinion contained no guidelines concerning discovery and did not purport to limit the Court's inherent ability to manage the discovery proceedings in the
case. Consequently, 28 U.S.C.A. § 2101 (f) does not
prohibit the Court from entering a stay of discovery in the case.
Additionally, as discussed in the August 18, 2005, Order, the Court cannot agree with Plaintiffs that Supreme
12
A072A (Rev.8/82)

Court review of this case is highly unlikely. Even after the Supreme Court's decision in Anza, a substantial ground for difference of opinion exists as to whether the Eleventh Circuit correctly applied Anza to Plaintiffs' allegations, as to the RICO enterprise issue, and as to the RICO proximate cause issue. The Supreme Court very well may choose to grant certiorari with respect to at least one of those issues. If the Supreme Court ultimately issues a ruling that would result in the dismissal of Plaintiff's federal RICO claim, this Court likely would choose to decline supplemental jurisdiction over Plaintiffs' Georgia RICO claim, thus making discovery in this Court concerning Plaintiffs' claims unnecessary.1

A072A (Rev.a/82)

The Court generally declines to exercise supplemental jurisdiction in a federal question case after the resolution of the federal claims unless circumstances exist that make
13

The Court acknowledges that Plaintiffs argue that Defendant's alleged misconduct is ongoing, and that Plaintiffs are continuing to suffer damages. However, given that the Supreme Court is likely to resolve Defendant's petition for certiorari within a very short period of time, the Court finds that Plaintiffs will suffer little, if any, prejudice from a stay of discovery pending the resolution of Defendant's petition.
Given the above circumstances, the Court finds that staying discovery pending the resolution of Defendant's petition for a writ of certiorari will conserve the parties' resources and the resources of the Court, and will not

· AO 72A (Rev.8/82)

exercising supplemental jurisdiction appropriate. The Court, however, need not, and does not, determine at this point whether it ultimately would decline to exercise supplemental jurisdiction in this case if the Supreme Court dismisses Plaintiffs' federal claim.
14

significantly prejudice Plaintiffs. The Court therefore grants Defendant's Motion to Stay Discovery Pending its Petition for Certiorari, and stays discovery in this case until the Supreme Court either (a) denies Defendant's petition for a writ of certiorari or (b) decides the case on the merits after granting Defendant's petition.
III. Conclusion ACCORDINGLY, the Court DENIES Plaintiffs' Motion
for Discovery [77]. The Court STAYS discovery in this case until the Supreme Court either (a) denies Defendant's petition for a writ of certiorari or (b) decides the case on the merits after granting Defendant's petition. The Court stays the period oftime for Defendant to respond to any discovery
15
A072A (Rev.8f82)

requests that Plaintiffs may have served in accordance with

this Order.

!l'd~y IT IS SO ORDERED, this the

of January, 2007.

16
A072A (Rev.SIS2)

 
 Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 1 of 64

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION

Shi rley Wi ll i ams , Gale Pelfrey , Bonnie Jones , and Lora Sisson , i ndividual ly and on behalf of a class ,

Plaintiffs ,

v.

CIVIL ACTION FILE

NO . 4 :04-CV-0003-HLM

Mohawk Industries , Inc .,

Defendant .

ORDER

This is a class action alleging violations of the federal

and Georgia Racketeer Influenced Corrupt Organizations

Acts . The case is before the Court on Plaintiffs ' Motion fo r

Class Certification [174] .

AO 72A ( Rev. 81 82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 2 of 64
I . Background A. Factual Background 1 . The Parti es Plaintiff Shirley Jane Williams resides in Rome,
Georgia . ( Dep . of Shirley Jane Williams at 4 , 129 .) From 1999 through 2003, Plaintiff Williams was employed by Defendant , first at a printi ng plant and then at a warehouse . (Id . at 6-7, 137 .) Plaintiff Williams previously worked for Crown Craft , which Defendant bought . ( id . at 8-9 , 132-33 .)
Pla i nti ff Bonnie Jones i s a resident of Chatsworth , Georgia . (Dep . of Bonnie Jones at 3 .) Plaintiff Jones has been employed by Defendant for fourteen years, most recently worki ng as a creeler at Defendant ' s Caradon location . ( Id . at 3-5 ; Def.' s Resp. Mot. Class Ce rtification Ex . 11 .)
2
AO 72A (Rev-8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 3 of 64
Plaintiff Gale Pelfrey resides i n Rome , Georg ia . ( Dep . of Gale Peltrey at 4 .) From 1998-2001, Plaintiff Pelfrey worked at Crown Craft , which Defendant acqu i red in 2001 . ( fd . at 6 , 9 .) After defendant acquired Crown Craft, Plaintiff Pelfrey worked at a warehouse and then at a pri nt plant . ( Id . at 1 1 - 12 ; Def.'s Resp . Mot . Class Certifi cation Ex . 12 .) In 2002 , Defendant terminated Plaintiff Pelfrey ' s employment for job abandonment . ( Def.' s Resp . Mot . Class Certification Ex . 12 ; Pelfrey Dep . at 6 .)
Defendant is a Delaware corporation with its principal place of bus i ness i n Calhoun , Georgia . (Compl . ¶ 9 .) Defendant is the second-largest carpet and rug manufacturer i n the Un ited States . { id . ¶ 2 .) From January 1 , 1999 , to the present , Defendant , through its whollyowned subs idiaries , has employed more than 1 , 000 hourly
3
AO 72A

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 4 of 64
workers who are authorized to work in the United States . ( Def.'s Objs. & Resps . Pls .' Second Req . Adm is . N o . 4 ; Def.' s Objs . & Resps . Pls .' Fi rst Interrogs . No . 2 .)
2 . Defen dant's O rganization Defendant has employees in all fifty states, including Georgia . ( Decl . of Jerry L . Melton ¶ 9 .) From 1999 through 2000, Defendant completed twelve mergers and acquisitions . ( Melton Decl . ¶ 3 ; Dep . of Mark Dailey at 12 13 .) Defendant acquired the following companies : (1) Ho rizon Indust ries ; (2 ) Karastan ; ( 3 ) American Rug Craftsmen ; (4) Aladdin Mills; (4) Galaxy Carpet Mills ; (5) Diamond ; (6) World Carpets ; (7) Newmark & James ; (8) Ame ri can Weavers ; (9 ) Image Industri es ; ( 10 ) Durkan Patterned Carpets ; and (11) Crown Craft . (Melton Decl . ¶ 3 ; Dailey Dep . at 12-13 . ) Since 2000 , Mohawk has
4
AO 72A ( Rev . 8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 5 of 64
completed five mergers and acquisitions , i ncluding : (1) DalTile ; (2 ) Lees ; (3) Wayntex ; (4 ) Un ili n ; and (5) Columbia Flooring . ( Melton Decl . ¶ 4 ; Dailey Dep . at 12-13 .)
As a result of its rapid expansi on , Defendant's operations are highly decentralized in nature . (Melton Decl . ¶ 5 ; Dailey Dep . at 14 , 181 , 198 .) Consequently, primary operational and human resources responsibility for Defendant' s facilities and workforce ex ists at the location level and the divisional level . (Melton Decl . ¶ 5 ; Dailey Dep . at 14-15, 181 , 198 .) Until 2002 , Defendant' s corporate human resources department primarily focused on benefits . ( Melton Decl . ¶ 6 .)
S ince 1999 , Defendant has divided its operations into divisions , each of which have separate responsib ilities and business objectives . (Melton Decl . ¶ 7 .) Since 1999 ,
5
AO 72A ( Re v. $182 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 6 of 64
Defendant has had eight principal divisions . (Id .) Five of those divisions are included within Plaintiffs' proposed class definition, including : (1) the Residential Division ; (2) the Commercial Division ; (3) the Yarn Division ; (4) the Operations Division ; and ( 5) the Home Division . (Id .) Defendant's other divisions include the Un i l i n Divis ion , the Da l-Tile D ivi si on , and the former Paddi n g D ivi si on , all of wh i ch are excluded from Plaintiffs ' proposed class definition . (Id . ¶ 8 .) Subject to conditions and approvals, Defendant has permitted some employees to transfer between its divisions . ( Def.'s Objs . & Resps . Pls .' Second Req . Admis . No . 17 .)
Defendant's Residential Divi s ion primary manufactures carpet for installation in homes and apartments . (Melton Decl . ¶ 7 . a ; Decl . of Michael O'Neill ¶ 3 .) The Residential
6
AO 72A

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 7 of 64
Division includes the operations at approximately two dozen different locations, including numerous locations that Defendant has acquired through acquisitions and mergers . ( Melton Deci . ¶ 7 . a ; O' Neill Decl . ¶ 5 .)
Defendant's Commercial Division manufactures carpet for installation in commercial buildings, such as offices and hotels . (Melton Decl . ¶ 7 . b .) Pla i ntiffs' proposed class definition includes only a few locations within the Commercial Division . ( l d .)
Defendant's Yarn Division manufactures yarn for use in carpet and rug manufactur i ng . ( Melton Decl . ¶ 7 . c ; Decl . of Jerry Hendrix ¶ 3 .) The Yarn Division includes the operations of approximately fifteen different locations within Georgia, and consists of many locations that Defendant acqu i red i n mergers and acquisit ions . (Melton Decl . ¶ 7 . c ;
AO 72A ( Rev. 8 l82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 8 of 64
Hendrix Decl . ¶¶ 3 , 5 .) In 2005 , Defendant combined the Yarn D ivi si on with the Res i denti a l Di vision . ( Melton Decl . ¶ 7 . c .)
In 2005, Defendant created the Operations Division . ( Melton Decl . ¶ 7 . d ; O' Neil l Decl . ¶ 19 .) The Operations Division consists of a number of shared service and support functions that previously existed primarily within the Residential Division . (Melton Decl . ¶ 7 .d ; ONeill Decl . ¶ 19 .) Those functions included a national transportation and distri bution network, including warehouses , extrusion , and creation of carpet samples . ( Melton Decl . ¶ 7 . d ; O'Neill Decl . 1 19 .)
In 1999, Defendant created its Home Division by aggregating the operations of three companies Defendant had acquired : American Rug Craftsmen , American
8
AO 72A

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 9 of 64
Weavers , and Newmark & James . (Melton Decl . ¶ 7 . e ; Decl . of Patti D . S i lver ¶ 4 .) In 2000 , Defendant acqu i red Crown Craft , which in turn became part of the Home Division . ( S i lver Decl . ¶ 4 .) Defendant 's Home Division pri marily manufactures products for use in homes , such as p i llows , blankets , bath mats , and rugs . (Melton Decl . ¶ 7 . e .) S i nce 1999 , the Home Division has included the operations of over two dozen different locations . (Silver Decl . ¶ 5 .)
Each of the five divisions at issue in the proposed class definition has its own management structure in charge of operations at each location within each division . (Melton Decl . ¶ 12 .) Each division also has its own Division Director of Human Resources , who is respons i ble for human resources for the d iv i sion . ( Id .) From 1999 through 2007 , the Division Directors of Human Resources have reported
9
AO 72A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 10 of 64
directly to the operational management within their respective divisions . (Melton Decl . ¶ 1 2 ; O' Ne i ll Decl . ¶¶ 4 , 19 ; Hendrix Decl . ¶¶ 4 , 19 .) The Division Directors of Human Resources did not report directly to the corporate Vice President of Human Resources, but instead simply had an informal , " dotted line " relationship with that individual . ( Melton Decl . 113 ; O' Ne il l Decl . ¶¶ 4 , 19 ; Hendrix Decl . ¶ 19 .) The Division Directors of Human Resources consulted with the corporate Vice President of Human Resources, but ultimately had the power to decide issues concerning hiring procedures, employee discipline, wages, and the use of temporary agenc i es at the division level . (Melton Decl . ¶ 13 .)
Defendant also organizes some of its functions into two groups that exist outside of the division structure . (Melton
10
AO 72A ( Ftev . 8 1 62)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 11 of 64
Decl . 1 10 .) The Sales & Marketing Group handles sales to , and re l ationships with , Defendant's customers . ( Id .) The Corporate Group provides shared administrative and management funct i ons across Defendant ' s company , including executive management, accounts payable, accounts receivable , and information systems . ( Id . ) Hourly workers employed in the two Groups primarily are administrative and clerical employees who work in office environments . ( Id . )
Duri ng the proposed c lass peri od , Defendant had approximately seventy-one locations within Georgia that fall within Plaintiffs' proposed class definition . (Melton Decl . ¶ 11 .) Defendant assigns a un i que location number to each of its locations, and uses that number to identify the location . (Id .) Although most locations refer to a single
11
AO 72A

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 12 of 64
phys ical s ite , a location i nfrequently may refer to a number of buildings that are geographically close to one another . (Id .} Additionally, a single physical site may have more than one assigned location number. (Id .) Moreover, a few location numbers do not strictly correspond to a physical location, but instead refer to a function that may be spread across a number of physical sites . (Id .)
3. Defendant' s Hiring Practices From 1999 through 2007 , each of Defendant ' s divisions genera lly hired its own employees at its own h i ring locations . (Melton Decl . ¶ 14 ; O ' Neill Decl . ¶ 6 .) Each division had its own human resources personnel, who had responsibility for hiring employees, including verifying employment eligibility and completing 1-9 forms . (Melton Decl . 1 14 .) Each division ' s human resources personnel
12
AO 72A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 13 of 64
reported to that division's operational management . ( Id .) Defe n dant's co rpo rate- level personnel had no responsib ility for divisional employment decisions, including hiring and disciplining employees . {Id . 115 .)
For example , from 1999 through 2005 , the Resi dential Division maintained its own separate hiring locations for hourly employees, and conducted its hiring primarily at four county hiri ng centers . ( O' Neill Decl . ¶ 6 .) From 2005 to the present, the Residenti al Division has conducted its hiring at five county hiring centers, and locations within the Residential Division that fall outside those counties conduct their own hiring . (Hendrix Decl . 1 20 .) With one minor exception, the Residential Division's hiring locations did not hire employees for Defendant 's other divisions or groups . (O ' Neill Decl . ¶ 6 . ) Human resources personnel within the
13
A O 7 2A ( Rev .Bl82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 14 of 64
Residential Division, rather than Defendant's corporate headquarters ran the hiring centers . (O' Neil Decl . ¶ 7 ; Hendrix Decl . ¶ 21 .) Those personnel , in conj uncti on with management at plants within the Residential Division, determined which applicants to hire and for which jobs and shifts . (O'Neill Decl ¶ 7 ; Hendrix Decl . ¶ 21 .) Applicants for jobs within the Residential Division applied for jobs within that division and not for jobs with Defendant in general . (O ' Neill Decl . 18 ; Hendrix Decl . ¶ 22 .)
Employees of the Res i dent i a l D ivis ion were responsible for completing 1-9 forms . (O' Neill Decl . ¶ 9 ; Hendrix Decl . ¶ 23 .) The management of the Residential Division determined whether to discipline , includ i ng whether to terminate , its hourly employees . ( O ' Neill Decl . ¶ 10 ; Hendrix Decl . 1 24 .)
14
AO 72A ( Rev. 8/ 82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 15 of 64
S i m il arly, from 1999 through 2005 , Defendant 's Yarn Division maintained and managed its own separate hiring locations for hourly employees, and conducted its own hiring at each of its approximately fifteen locations . (Hendrix Decl . ¶ 6 .) Those hiring locations did not hire employees fo r Defendant's other divisions o r groups . .(I)d The Yarn Division 's personnel , inc l uding human resources personnel , ran the hir i ng locati ons and determined which applicants to hire and for which jobs and shifts . (Id . ¶ 7 .) Applicants who sought jobs within the Yarn Division applied for jobs within that division and not for jobs with Defendant in general . (Id . ¶ 8 .) The Yarn Division employees were responsible for competing the 1-9 forms . (Id . 19 .) The Yarn Division's management also determined whether to
15
A O 72 A ( Re v. 8I82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 16 of 64
disci pline , including whether to terminate , the Yarn D ivi si on 's hou rly emp l oyees . ( Id . ¶ 10 .)
The Home Division also maintains its own separate hiring locations for hourly employees . (Silver Decl . ¶ 6 .) From 1999 through 2007, the Home Division conducted its hiring for its plants in Cordon County, Georgia, at a hiring center in Calhoun , Georgia , and for its plants in Wh itfield County, Georgia , at a h i ri ng center i n Dalton , Georgia . (Id .) Home Divi s i on p lants located i n Jasper and H i awassee , Geo rg i a , d i d the ir own h i ri ng . { Id .} The Home Di v ision ' s hiring locations have not hired employees for Defendant's other divisions or groups . (Id .) Applicants who seek jobs within the Home Division complete applications for jobs within that divis ion , and not for jobs with Defendant in general . ( Id . ¶ 8 .)
16
AO 72A ( Rev. 81 82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 17 of 64
Home Division employees ran the Home Division's hiring centers . (Silver Decl . 17 .) Home Division human resources personnel operated the hiring centers in Calhoun and Dalton, while individual plant managers at the Hiawassee and Jasper plants oversaw hiring at those locations . (Id .) Those personnel determined which appl icants to hire and for which jobs and sh ifts . ( Id .) Those personnel also were responsible for completing the 1-9 forms . { Id . ¶ 9 .) The Home Div ision 's management determines whether to discipline, including whether to terminate , its hourly employees . ( Id . ¶ 10 .)
Defendant generally does not take language into consideration when determining whether to hire someone for employment, unless the job requirements make it necessary for the employee to have the ability to speak and
17
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 18 of 64
write English . ( Dep . of Matthew B . Brown Dated Aug . 30 , 2007 (" Brown Dep . III ") at 52 , 63-64 .)
Defendant contends that its human resources department follows the law with respect to completing 1-9 forms , and that Defendant does not knowi ngly allow an employee who is not eligible to work in the United States to wo rk for it . ( Brown Dep . III at 54 , 1 02 .) Defendant uses good faith efforts to collect and maintain 1-9 forms consistent with al l applicable laws and regulat ions , and denies the rema i nder of the request . ( Def.' s Objs . & Resps . Pls .' Second Req . Admis . No . 11 .)
Defendant does not distribute materials to its human resources personnel in its different divisions concerning completing 1-9 forms . (Brown Dep . III at 55-57 .) Government documents , however , are available to assist in
18
AO 72A ( Rev, $l 82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 19 of 64
completing 1-9 forms . { Id . at 56 .) Defendant does not use the SSA's Basic Pilot System . (Id . at 90 .)
I f Defendant has questions concerning an applicant 's eligibility for employment, Defendant investigates and resolves those questions before allowing the applicant to work for Defendant . ( Brown Dep . III at 98-99 .) S i milarly , if Defendant receives information from the SSA reporting a " no match " between the employee ' s name and social security number, Defendant will review the employee's employment eligibility . {Id . at 103 .) Defendant also has a practice of investigating questions and complaints concerning eligibility to work in the United States that come to Defendant ' s attention . ( Id . at 100, 102-03 .) Defendant , however, does not have a written policy describing its i nvesti gation process . ( Id . at 100 .) A report p resented by
19
AO 72 A ( Re v.81 82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 20 of 64

AO 72A (Rev.8/82)

Plaintiffs indicates that, during the period from January 2006 through August 2006, Defendant terminated some employees for discrepancies on work documents . (Pls .' Mot . Class Certif ication Ex . 17 .)
4 . Defendant' s Use of Temporary Employment Agencies
Defendant has ongoing relationships with employment agencies who supply Defendant with temporary employees ("temporary employment agencies"), and most of Defendant's day-to-day interactions with temporary employment agencies are informal and occur without a w ritten agreement . ( Dep . of Matthew B rown Dated Aug . 23 , 2007 ("Brown Dep . II ") at 53 ; Def.' s Objs . & Resps . Pls .' F i rst Interrogs . No . 10 ; Dep . of Kenneth Glenn Michaels at 46-47 , 50 , 52 ; Dep . of Catherine Stuff at 11 , 31 ; Decl . of Catherine Wari ng Stuff ¶ 5 ; Dep . of Ginger Talley at 1 1 ;
20

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 21 of 64
Dep . of Barbara Waters at 22-24 .) The decisions as to whether to use temporary employment agencies and which temporary employment agency to use generally are left to the discretion of local human resources managers, with approval from the human resources directors of their particular divisions . (Brown Dep . li at 44-45 , 48 , 50 , 53 ; Def.' s Objs . & Resps . Pls .' First Interrogs . No . 10 ; O ' Neill Decl . ¶¶ 16- 17 , 23 ; Hend rix Decl . ¶¶ 15- 16 , 28-29 ; Silver Decl . ¶¶ 15-16 .) Specifically , since 1999 , each division has had authority to determine whether, and to what extent, to use the servi ces of temporary agencies' employees . (Me lton Decl . ¶ 19 ; O'Neill Decl . ¶¶ 16-17,23 ; Hendrix Decl . 1115-16, 28-29 ; Silver Decl . ¶¶ 15-16 .)
Each division also has authority to determine which temporary agencies to use and to enter into, and to
21
AO 72A ( Rev . 81 82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 22 of 64
negotiate, fee agreements with those agencies . (Melton Decl . ¶ 19 ; O' Ne ill Decl . 1117, 23 ; Hendrix Dec l . ¶¶ 15- 16 , 28-29 ; Silver Decl . ¶¶ 15- 16 ; Brown Dep . I t at 57-60 .) Defendant's division management determines whether to discontinue use of a particular temporary agency or to discontinue the use of temporary employees for particular j obs or at part icular locations . (O' Neill Decl . ¶¶ 17 , 23 ; Hendrix Decl . ¶¶ 16 , 29 ; Silve r Decl . ¶ 16 .) No one at Defendant's corporate level i s responsible for temporary agency employees working within the divisions or for the divisions' relationships with temporary agencies . (Melton Decl . ¶ 20 . )
Similarly, evaluations as to performance of temporary employment agencies generally occur at the division or site level . (Brown Dep . 11 at 68 .) Such evaluations include
22
AO 72A ( Rev . 8182 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 23 of 64
consideration of whether the agencies are meeting their obligations to provide temporary employees who report to work on time , who are of good quality , who can perform the work they are sent to perform or learn to do so , who follow safety rules , and who do not cause h igh "turnover." ( Id . at 68 .)
Orders for temporary workers generally are placed by the human resources personnel, or by other supervisory personnel , at Defendant ' s various plants . (Michaels Dep . at 52 -53 , 59 ; Dep . of Cheryl Johannsen at 21 -22 ; Talley Dep . at 20 ; Wate rs Dep . at 35 -37 ; Stuff Dep . at 38 , 62-63 .) The temporary agencies ordinarily set the wage rates to be paid by Defendant to the temporary employees . ( Michaels Dep . at 55 -58 ; Stuff Dep . at 17-1 8 , 70 ; Talley Dep . at 1 2-14 ; Johannsen Dep . at 24 ; but see Waters Dep . at 34 (stating
23
A O 72 A ( R ev. 8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 24 of 64
that Defendant set wages to be paid to temporary employees) .)
Defendant requires that the temporary employment agencies perform drug screens and background checks on the temporary employees to be provided to Defendant . ( Brown Dep . f I at 63 , 65 ; Johannsen Dep . at 14- 15 ; Michaels Dep . at 64-65 ; Stuff Dep . at 44 , 48 .) Defendant also requires that the temporary employment agencies complete 1-9 forms accurate ly . (Brown Dep. I I at 63 , 79-80 ; Michaels Dep . at 20 ; Stuff Dep . at 75 , 77 ; Waters Dep . at 24-25,62 .)
Temporary agencies send invoices to Defendant's human resources departments, generally at the divisional level . ( ba i ley Dep . at 233-36 ; Brown Dep . 11 at 179 ; Johannsen Dep . at 26 ; Waters Dep . at 73 -74 ; Stuff Dep . at
24
AO 72A (Rev . 8162)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 25 of 64

AO 72A (Rev .8/82)

39 , 65-66 .) Defendant' s human resources employees verify the hours cla i med on the invoices , and forward the invoi ces to Defendant ' s accounts payable department . ( bailey Dep . at 233-36 ; Brown Dep . II at 179 .) Defendant ' s accounts payable department pays the invoices . (bailey Dep . at 23336 ; Brown Dep . 11 at 179 .)
5 . Defendant 's Wage -Setting Practices Since 1999 , each of Defendant 's d ivis ions has set wages and has independently determined the wages of its hourly emp l oyees . ( Melton Decl . 116 ; O ' Neill Decl . ¶¶ 12 , 20 ; Hendrix Decl . ¶¶ 12-13 , 26 -27 ; Silver Decl . ¶ 12 .) Defendant and its various divisions have used Wage Progression Tables ("WPTs") to determine wages to be paid to employees . ( Dep . of Matthew Brown Dated August 17 , 2007 (" Brown Dep . I" at 24 . ) Defendant' s Residential ,
25

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 26 of 64
Commercial, and Home divisions each have their own WPTs . ( Brown Dep . I at 1 9 , 24-25 , 99 , 102 ; Melton Decd . ¶ 16 .) The divisions use their respective WPTs to determine the wages to be paid to employees within those divisions for parti cular j obs . (Brown Dep . I at 25 .) Wages paid for a given job may differ from facility to facility or from division to d ivi si on . { ld . at 20 , 47 .)
The number of wage steps for each job , and the timing of the progression through those steps, differ by division . (Melton Decl . ¶ 16 .) The starting and top pay rates for hourly positions differ by division, and also frequently differ between the Georgia locations within each division . (Id . )
The WPTs list salary grades . (Brown Dep . I at 28 .) The salary grades for companies acquired by Defendant generally were in place when Defendant acquired those
26
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 27 of 64
companies, and Defendant continued to use those salary grades after it acquired the compan i es . ( Id . at 14 , 28 , 85 ; O'Neill Decl . ¶ 13 ; Silver Decl . 1 13 .)
In exceptional circumstances, some managers may provide for certain employees to receive hourly rates that exceed the top rates established by the applicable WPT for the employees' posi ti ons and divisions . ( Brown Dep . I at 79 , 83 .) Generally , however, the top rate listed on the WPT for a given job within a given division is the top rate that an employee within that division will receive for performing that job . ( Id . at 84 .)
Defendant ordinarily provides for an annual general wage increase ("GWI") to its total budget allocation for annua l wages on an annual basis . (Brown Dep . I at 29 ; Def.' s Obis . & Resps . Pls .' F i rst Interrogs . No . 4 . )
27
A O 72A ( Re v . 8 /82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 28 of 64

AO 7 2A ( Re v. 6/82 )

Defendant ' s corporate Human Resources department establishes the annual GWI, which generally is three percent per year, and communicates that increase to the d iv isions . ( Brown Dep . I at 67-68 ; Deb.' s Objs . & Resps . Pls .' First Interrogs . No . 4 . ) Each d iv ision , in turn , decides how to implement the GWI and whether to give employees in that d ivis i on the fu ll GWI for a g iven year. (Brown Dep . at 79 , 108 ; O ' Ne ill Decl . ¶ 14 ; Hendrix Decl . ¶¶ 13-14 , 26 27 ; Silver Decl . 1 14 .) Defendant generally anticipates that its divisions will administer the GWI as an across-the-board increase for all hour employees with i n that division . ( Pls .' Mot . Class Certification Ex . 30 at 1 .) The presidents and human resources d irectors of each d ivis i on , however, reta i n the discretion to allocate the GWI as they see fit within their divisions , subject to a budgetary cap . ( Def.' s Objs . &
Zs

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 29 of 64
Resps . Pls .' F i rst Interrogs . No. 4 ; O ' Neill Decl . ¶¶ 15 , 2122 ; Hendrix Decl . ¶¶ 13- 14 , 26-27 ; Silver Decl . ¶ 14 .)
The wage rates for given job grades generally will increase with GWI . (Brown Dep . I at 67-68, 86 .) Outside of GWI , Defendant makes no changes or adjustments to the wage rates for g iven job grades . ( Id . at 29 .)
When evaluating its wage rates, Defendant considers employee turnover and the available applicant pool . (Brown Dep . I at 133-35 .) When setting wage rates for a given position , Defendant also considers factors such as the relevant labo r market , the natu re of the positi on , the ski l l required to perform the position, and the employee's expe rience and tenure . ( Def.' s Objs. & Resps . P ls .' First Interrogs . No . 4 .) Wage rates for a g iven position generally are determined at the division level or local facility level .
29
AO 72A (Rev . 8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 30 of 64
( Id . ; Brown Dep . I at 13 , 1 5 .) Genera lly, as long as Defendant receives enough applicants to fill its positions , Defendant believes that its wages are competitive . (Brown Dep . I at 134 .)
In 2002 , Defendant created a corporate compensation department led by a Director of Compensation , who reports directly to Defendant ' s corporate Vice President of Human Resources . (Melton Decl . ¶ 17 .) The corporate compensation department has not played a significant role in setting hou rly wages for Defendant ' s employees , but instead principally has focused on the wages of salaried employees . (Id .) The Director of Compensation has evaluated hourly wages for administrative and clerical jobs, and has established recommended wage ranges for those positions . ( Id . 118 .) The management of each d ivi sion ,
30
AO 72A ( Rev . 8/ 8 2)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 31 of 64
however, has authority to devi ate from those recommended wage ranges for administrative and clerical employees . .(I)d
6 . Defendant's Records Defendant admits that it has records of, or is able to determine , the aggregate amount of time worked by a Georgia hourly employee within a larger time frame . (Def.'s Obis . & Resps . Pls .' Second Req . Adm is . No . 8 .) Defendant further admits that it has records of, or is able to determine , the aggregate amount of monetary compensation paid to a Georgia hourly employee over the course of a peri od of time . ( id . No . 9 .) Defendant adm its that it collected, and has maintained, the names and social security numbers, or other government identification numbers , of i ts Georg ia hour ly workers . ( Id . No . 13 .) Additionally, Defendant has admitted that it has collected
31
AO 72A ( Re v . 8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 32 of 64

A O 72A (Rev . 8 182 )

and maintained some data regarding the monetary compensation paid to Georgia hourly employees . { Id . No . 14 .}
Since 1997 , Defendant' s human resources personnel have used an Infi nium system , which stores human resources data concerning permanent employees . (Dep . of Mark Dailey at 224 . ) The information stored in that system inc l udes the employees ' names , social security numbers , j ob titles , h i re dates , and terminati on dates . ( fd . at 225 .)
7 . Plaintiffs ' Evidence Concerning Defendant's Alleged Employment of Illegal Imm i grants or Alleged Notice of Use of False Social Security Numbers or Documentation a. Testi mony of the Named Plaintiffs i . Plaintiff Wi ll i ams
Plaintiff Williams testified that her supervisor, Roy
32

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 33 of 64
Bennett , frequentl y stated that he could get " illega l s" to come in and do the jobs that Plaintiff Williams and her coworkers performed . (S . Williams Dep . at 14-15,35-36, 50 , 52 , 53,135,140-41, 145-46 .) Plai ntiff Williams testified that after one Hyster accident, her supervisor was angry and stated : "That' s why !prefer to hire illegal peop l e . There is none of this carryings on back here, all this talking, all this stuff going on ." ( Id . at 1 6-17 .) Accord i ng to Plaintiff Williams , Mr . Bennett stated that he prefe rred to hire illegals . ( Id . at 20-21 , 45-47 .)
According to Plaintiff Williams , Mr . Bennett reported that he had obta i ned twenty-three replacement workers , and claimed that the workers were illegal workers . (S . Will iams Dep . at 22-23 .) Plaintiff Williams also recalled her supervisor stating that he could send "Wayne" to Texas to
33
A O 72A ( Re v . 8 182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 34 of 64
bring back "enough people to replace the whole push ." ( Id .) Plaintiff Williams testified that she reported Mr . Bennett's comments to the plant manager, who informed Plaintiff to do her job if she wanted it . ( Id , at 146-47 . ) Sim ilarly , Plaintiff Williams testified that she reported Mr . Bennett' s comments to a human resources employee at her plant, and that the human resources employee told Plaintiff Williams that she needed to do her job . ( Id . at 146-48 .)
According to Plaintiff Williams, "Wayne" reported that he had been off from work because he had to go get his son , who i n turn had been to Texas to bring back illegal wo rkers . (S . Willi ams Dep . at 3 6-37 , 40-41 .) P laint i ff Williams recalls hear i ng "through the plant" that the workers were illegal . (Id . at 23 , 43 -44 .) Plainti ff Williams reca l ls that the employees could not speak English, and believes that
34
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 35 of 64
the employees were illegal workers because they could not speak Eng lish . ( Id . at 47 , 56-57 .)
According to Plaintiff Williams, Wayne reported that two busloads of workers had arrived for Defendant , and that the workers were packed in like sardines . (S . Williams Dep . at 61-62 .) Plaintiff Williams did not see a busload of illegal workers come to Defendant 's facility where she worked . (Id . at 64 .)
Pla i ntiff Williams also complains that Mr . Bennett called a temporary employment agency and obtained " Mexican " workers . ( S . Williams Dep . at 48-49 , 128 .) Although Mr. Bennett referred to some full-time employees as illegal, Plaintiff Williams does not know first-hand whether the fulltime employees or the temporary employees were illegal . ( Id . at 50-51 .)
35
AO 72A ( Rev . 8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 36 of 64
Plaintiff Williams also recalls that an employee named "Carlos" had a number of Social Security cards , driver's licenses , and a big rol l of cash . (S . Wi lliams Dep . at 19 , 5354 ) 153-54 .) Accord i ng to Plai ntiff Williams , Carlos offered to cash everyone ' s checks . ( Id . at 73-74 , 126 , 128 , 153 .) Plaintiff Williams testified that Carlos claimed to be an illegal worker and that Carlos contended that Mr . Bennett had knowledge of th i s fact and that Mr. Bennett would not do anyth i ng about i t . (Id . at 85-86 .)
Plaintiff Williams further complains that a Hispanic woman named " Ma ria" performed Plaintiff Wi l liams ' job , and that Plaintiff Wilfiams' wages were cut . (S . Williams Dep . at 21 .) Plaintiff Williams recalls that Maria translated for individuals whom Plaintiff Williams believed were illegal workers . ( Id . at 28-29 .) Plaintiff Williams states that she
36
AO 72A (Rev.8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 37 of 64
saw Maria g ive cards to " Mexicans ," and that she heard Mari a state on one occasion , " Here is your social secur ity card ." ( td . at 60 , 65 , 161 -62 , 175 .)
Plaintiff Will iams also recalls that one Hispanic employee left a plant operated by Defendant after an injury, and later came back to work for Defendant under a different name . ( S . Wil l i ams Dep . at 19 , 79 -85 , 156-57 , 172 .) According to Plaintiff Williams, the injured employee and Carlos both indicated that the injured employee was an i llegal worker . ( Id . at 79-80 , 82 -83 . ) Pla intiff Williams states that another employee worked for Defendant at different facilities under different names. ( Id . at 157-58 , 172 .)
ii . Plaintiff Jones Plaintiff Jones testified that she was working at Aladdin in 1993 or 1994 when the government raided the plant for
37
AO 72A ( Re v .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 38 of 64
illegal workers . (Jones Dep . at 11-13, 37 .) Plaintiff Jones also is aware of an audit that occurred more recently at the Caradon p l ant . ( Id . at 13 , 14-15 .)
Plaintiff Jones complains that a number of employees had false identification documents ; however, Plaintiff Jones cannot identify a specific employee or applicant who has false identification documents . (Jones Dep . at 22-23 .) Similarly, Plaintiff Jones cannot identify a supervisor or hiring employee who knowingly accepted false work authorization documents or hired i llegal aliens . ( ld . at 22 , 28-29 .) Plaintiff Jones does not know which employees supervisors allegedly encouraged to return to the United States and to re-apply for work with Defendant . (Id . at 2728 .) Plaintiff Jones also is not aware of anyone with Defendant traveling to the United States border to recruit
38
A4 72A (R ev . B /82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 39 of 64
undocumented aliens , transporting undocumented aliens , making incentive payments for locating such workers , providing housing to workers, helping workers find employment with Defendant, helping applicants apply for jobs, or destroying employment eligibility documents . (Id . at 28-32 , 44 , 63 , 70 -72 .) Plaintiff Jones complains that Defendant has more H i spanic workers than "American " workers . ( Id . at 45 .)
Plaintiff Jones states that she learned that some employees left Defendant ' s employ but later returned approximately three or four months later using different names . (Jones Dep . at 13-16, 56-59, 76 .) Plaintiff Jones also heard reports of illegal employees working under d ifferent names . ( !d . at 17 .)
According to Pla i ntiff Jones , Bobby Tucker , who was
39
AO 72A ( Rev . 8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 40 of 64
her supervisor at Aladdin in 1993, stated that he preferred to hire illegal workers . (Jones Dep . at 42, 51 .) Plaintiff Jones recalled that Mr . Tucker stated that he preferred to hire illegal workers because they did their jobs and did not complain, and did not care whether they took breaks . .(I)d
iii . P laintiff Pelfrey Mr. Bennett was Plaintiff Pelfrey's supervisor in the shipping department of the print plant . (Pelfrey Dep . at 12, 16 .) Plaintiff Pelfrey complains of suffering pay cuts and job transfers and seeing Hispanics performing her job . ( Id . at 9-10, 13-14 .) Plaintiff Pelfrey also contends that Mr . Bennett and the plant manager told employees that they preferred to hire illegal workers . (Id, at 89-90 .) Plaintiff Pelfrey has no first-hand knowledge that Defendant hired illegal aliens or individuals who were not
40
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 41 of 64
authorized to work in the United States . (Pelfrey Dep . at 54 .) Plaintiff Pelfrey heard talk in the plant indicating that an employee named " Maria " was obtaining false documents for some illegal wo rkers , but has no first-hand knowl edge of this occurring or of anyone using false documents to obtain jobs with Defendant . {Id . at 76-78 .) Plaintiff Pelfrey has no idea whether Maria received payment for her services, but heard a rumor that Maria received kickbacks for providing documents . ( !d . of 130 , 140 -42 .) Plaintiff Pelfrey contends that Mari a received preferent ia l treatment from the ir supervisor . (Id . at 14 1 -42 . )
Plaintiff Pelfrey also does not have first-hand knowledge of any of Defendant ' s employees helpi ng aliens avoid detection or remain in the United States, and has no first-hand knowledge of Defendant ' s employees accepting
41
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 42 of 64
false documents . (Pelfrey Dep . at 111-13 .) Plaintiff Pelfrey has no first-hand knowledge of any employees of Defendant allowing immigrants to live with them . (Id . at 54-55, 58-59, 81-83 .) Plaintiff Pelfrey suspects that some of the employees, including temporary employees, were illegal workers because the employees could not speak English . ( Id . at 30, 43-44 , 66 , 69 , 97 .)
Plaintiff Pelfrey recalls hearing that the son of an employee named Wayne Bishop picked up illegal workers and brought those employees to work at Defendant 's facilities. ( Pelfrey Dep . at 30 , 34 , 36-37 .) Plaintiff Pelfrey, however, has no first-hand knowledge of this incident . (Id .)
Plaintiff Pelfrey recalls working with one Hispanic individual who left Defendant's employ after an injury, but later returned to work for Defendant under a different name .
42
A O 7 2A ( R ev. 8182 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 43 of 64
( Pelfrey Dep . at 35 , 38-41 , 70 .) P l aintiff Pelfrey recalls Hispanic workers going home and coming back to work for Defendant, but does not know whether the workers were eligible to work in the United States . (Id . at 72-74 .)
Plaintiff Pelfrey recalls seeing a "bunch" of Social Security cards in an employee named Carlos's wallet . (Pelfrey Dep . at 30-32, 113 .) Although Plaintiff Pelfrey suspects that Carlos got kickbacks for bringing in workers, she has no first-hand knowledge that this occurred . ( Id . at 1 32-35, 139-40 .) Carlos, however, had lots of cash and offered to cash the employees ' checks . ( Id . at 30 , 130 , 13235, 139-40 .) Plaintiff Pelfrey saw Carlos bring in one worker, but also knows that some workers rode with Carlos to work. .()IdPlaintiff Pelfrey does not know whether the workers who rode with Carlos were temporary employees .
43
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 44 of 64
{ Id .} iv. Defen d ant's D ocuments
Plaintiffs have adduced evidence indicating that , at a June 26 , 2003 , human resources meeting , Defendant' s human resources personnel discussed the fact that the Soci al Security Administration ("SSA") had sent Defendant a list of 800 social security numbers for employees that did not match the names of the employees . ( Pls .' Mot . Class Certification Ex . 5 at 1 .) Other evidence presented by Pla i ntiffs indicates that Defendant' s human resources personnel forwarded the names of 400 individuals who reportedly had names and social security numbers either in Defendant's system or on their W-2 forms that did not match to the SSA ' s database . ( Id . Ex . 6 .) Defendant 's human resources department requested that divisional human
44
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 45 of 64
resources directors contact the employees to verify the information . ( Id . ) Plaintiffs also have presented a March 21 , 2007 , memorandum to Defendant' s twisting plant supervisors notifying the supervisors of recent problems with inva lid cards . ( Id . Ex . 8 .)
v. Wal-Mart Complaint In June 2005 , an employee of Defendant ' s Home division complained to Wal-Mart's ethics hotline concerning Defendant's alleged use of illegal immigrants in a plant . ( Pls .' Mot . Class Certificati on Ex. 9 .) Wa l- Mart requested that Defendant investigate the complaint and provide a report to Wal-Mart . {Id .}
vi . March 2006 E-Mail In Ma rch 2006 , one of Defendant' s employees sent an e-mail reporting that representatives of Defendant had
45
AO 72A ( Rev . 8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 46 of 64
asked two to three Hispanic employees in each of Defendant 's si tes about those employees ' expectations of how Defendant's operations would be affected by a rally protesting a " crackdown " on illega l immigrants . ( Pls .' Mot. Class Certification Ex. 4 .) The e-mail stated : "All areas felt that it would have little to no impact because : The people live paycheck to paycheck & can't afford the loss . There is a rumor in practi cally every Site that the ` march' is really a plot by the INS to assemble a large group of illegals, arrest them , & deport ." { Id .}
vii . Declaration of Chr istina Martinez Pla i ntiffs also ha ve presented a decl arati on from Christina Martinez, who works as a piece goods clerk for Defendant. (Decl . of Christina Martinez ¶ 2 .) According to Ms . Martinez, she has learned from her conversations with
46
AO 72A ( Re v . 8I82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 47 of 64
other employees that a substantial number of Defendant 's employees do not have proper documentation to work in the United States . (Id . ¶ 3 .) Ms . Martinez complains that one of Defendant's human resources employees stated that she was aware that many of Defendant 's employees were not legally authorized to work in the United States, but if applicants came to Defendant with a social security number and a false identification card, she could and would hire the appl i cants , and Defendant would employ the applicants . ( Id . ¶ 4 .)
Ms . Martinez further asserts that she provided translation services for November 2006 meetings concerning converting temporary employees to permanent employees of Defendant . (Martinez Decl . ¶ 5 .) According to Ms . Martinez, a number of temporary empl oyees stated
47
AO 72A (Rev . 8/ 82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 48 of 64
that they could not convert to permanent employment because they did not have the correct documentation . ( Id . ¶ 6•)
According to Ms . Martinez, in December 2006 , she was directed to meet with an attorney for Defendant . (Martinez Dec l . 17 .) During that meeting , the attorney informed Ms . Martinez of a lawsuit and asked her about four temporary employees . {Id .} Ms . Martinez informed the attorney that she understood that those employees could not legally work in the United States . ( Id .) Ms . Marti nez contends that , shortly after her meeting with Defendant' s attorney's , three of Defendant ' s human resources employees informed her that she should not be seeking information concerning the work status of Defendant 's employees , as this task was human resources ' j ob , and stated that , if she did so again ,
48
AO 72A ( Re v.81 82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 49 of 64
"'it could cost you you r job ."' ( id . ¶ 8 .) viii . Carpenter Action
Plaintiffs also have presented a copy of the complaint in Carpenter u . Mohawk Industries , Inc., Civil Action File No . 4 : 07-CV-0049-H LM . ( Pls .' Mot. Class Cert i fi cation Ex . 35 .) In that action, the plaintiff, a former supervisor at one of Defendant' s plants , asserts that Defendant term i nated h is employment after the plaintiff notified Defendant that some of the temporary workers at the plant were illegal i mmigrants .
8 . Expert Evi dence a . Dr. Borjas
Plaintiffs propose to present expert testimony from George Borjas, a labor economist . (Decl . of George Borjas ¶ 1 .) Dr. Borjas asserts that he has performed empirical
49
AO 72A (Re v. 8 /82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 50 of 64
research concerning the impact of increased immigration on wages and employment opportunities of the pre-existing work force. ( Id . ¶ 7 .) Accord i ng to Dr. Borjas , standard models of economic theory reveal unambiguous implications concerning the impact of immigration-induced supply shifts on the earn i ngs of compet i ng wo rkers . ( id . ¶ 8 .) Specifically, Dr. Borjas opines that, otherthings being equal, an immigration-induced increase in the size of the workforce deceases the wage of competing workers . ( Id . 19 .)
Accord i ng to Dr . Borjas , he prepared a 2003 paper that addressed a methodological approach to estimate the responsiveness in wages of competing workers to an immigration-induced increase in the labor supply . (Borjas Decl . ¶ 10 .) Accord i ng to Dr. Borjas , that paper revealed that wages during a particular decade grew slowest for
50
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 51 of 64
those groups that experienced the largest increase in immigration, and indicated that a ten percent immigrationinduced increase in the supply of workers deceased the wages of competing workers by three to four percent . (Id .)
Dr . Borjas opines that he can apply the econometric framework from his 2003 paper to the situation at issue in this litigation . (Borjas Decf . ¶ 11 .) Dr . Borjas further states that he has used methods to estimate the wage impact of h iri ng i l l ega l i mm ig rants by a part ic u l ar fi rm i n a sim il ar case invol vi ng pend i ng litigat ion . ( Id .) Accord i ng to D r. Borj as , the key result from this analysis, wage elasticity, measures the responsiveness of wages to an immigration-induced increase i n the supply of labor , which , in turn , can be used to calculate the damages to Pla i ntiffs on a class -wide basis . (td . ¶ 12 . ) Dr. Borjas states that he is not aware of
51
AO 72A ( Rev .8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 52 of 64
conceptual difficulties that will prevent application of those standard methodological approaches to this case . ( I d . ¶ 13 .)
Dr . Borj as op i nes that Defendant 's alleged practice of hiring illegal immigrants would tend to depress the wages that Defendant pays its workers below what would otherwise have been observed . ( Borjas Decl . ¶ 14 .) Dr. Borjas discusses Defendant's wage-setting practices and wage progression tab l es , and opines that Defendant' s approach to setting wages does not seem consistent with the wagesetting practices that one would expect to observe for a firm that attracts labor from a local pool of applicants by offering competiti ve wages that vary with local market conditions . ( Id . ¶¶ 1 5-18 .) According to D r. Borjas , Defendant' s approach to setting wages instead seems consistent with
52
AO 72A ( Rev. 8 1 8 2)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 53 of 64
that of a firm that pays a wage that guarantees a steady supply of applicant labor from some source , not necessari ly from the local labor market, and that this approach could be the result of access to a steady supply of undocumented labor that did not originate in the local labor market . (Id . ¶ 18 .)
Dr. Borjas opines that he can apply regress ion analysis to estimate wage elasticity to measure responsiveness, in percentage terms , of average hourly earnings for Defendant's employees to a percentage increase in the labor supply . (Borjas Decl . ¶ 1 9 .) Dr. Borjas sets forth a description of this analysis, as well as a description of the analysis to be used to estimate damages . (Id . ¶¶ 20-21 .) Dr. Borjas opines that damages for the individual class members and for the class can be established and
53
AO 72A ( Rev. 81 82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 54 of 64
calculated on a class-wide basis . (Id . ¶ 25 .) b . Daniel S. Hamermesh , Ph . D .
Plaintiffs also have presented a declaration from Dr . Dan i el S . Hamermesh , who studies the demand for labor. ( Decl . of Daniel S . Hamermesh ¶ 1 .) Dr . Hamermesh opines that the theory of labor implies that one can expect a firm's hiring of illegal workers to reduce the total wages of the fi rm's legal emp loyees . ( Id . ¶ 2 .) Dr. Hamermesh observes that the issue presented i n this case i s : "What happens in a labor market, and in an individual firm that employs workers in that market, when there is an increase in the supply of workers available to a particular firm in that market?" ( I d . 14 .) According to D r . Hamermesh , the analysis of changes such as that one has become fairly standard in the study of labor markets . ( Id . ¶ 5 .)
54
A O 7 2A (Rev . 8 /82 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 55 of 64
Dr. Hamermesh opines that "the exogenous i ncrease in the supply of workers of a given type can generally have two different direct impacts on employed workers in the labor market where it occurs ." ( Hamermesh Decl . 1 5 .) First , if the existing workers' hourly rates are rigid and cannot be competed down by the new workers , the demand for existing workers' services will be reduced, causing them to lose their jobs or work reduced hours . (Id .) Second, if wage rates are flexible , the total wages of at least some workers in the labor market will decrease . .()d
Dr. Hamermesh further op i nes that the influx of workers will have a greater impact on reduced wage rates and total wages among the low-skilled legal workers "who compete most closely with a low-skilled group of illegal immigrants who are brought i nto a labor market ." (Id . 17 .) According
55
AO 72A ( Re v . 6/82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 56 of 64
to Dr. Hamermesh , the applicable literature clearly i nd icates that immigrants to the United States reduce the wages of lower-skilled, lower-wage native workers . (Id . 18 .) Dr . Hamermesh opines that multiple regression analysis could be used to estimate the alleged impact of Defendant's alleged use of illegal immigrant workers on wages of its other workers . { Id . ¶ 11 .) According to D r. Hamermesh , using that analysis , "one can infer what the wage rates and total wages of the affected legsl workers would have been had the illegal workers not been hired by the company . ( Id . 112 .)
Dr . Hame rmesh further states that he believes that "the theory and statistical methods of labor economics can be usefully appl i ed to this case ." (Hamermesh Decl . ¶ 13 .) According to Dr. Hamermesh , with appropriate data , he or
56
AO 72A (R ev . 8 18 2 )

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 57 of 64
another experienced labor economist can " measure the impact of the influx of illegal workers on individual legal employees at Mohawk and on those employees as a class ." { Id . ¶ 13 .)
c. Criticisms by Defendant i . Declaration of Finis Welch
Defendant has presented the Declaration of Finis Welch , Ph . D ., i n oppos iti on to Plaintiffs ' Motion for Class Certi fication . ( Def.' s Resp . Pls .' Mot. Class Certification Ex . 15 .) Dr. Welch attempts to review and comment upon Dr . Bo rj as ' declaration and upon the declaration of Dr . Hamermesh . ( Decl . of Finis Welch , Ph . D . ¶ 4 .)
Dr. We l ch opines that: (1) Dr. Borjas' methodology is based on an analys i s that Dr. Borjas previously rejected , (Welch Decl . ¶¶ 6 , 9-11) ; (2) Dr. Borjas consistently has
57
AO 72A (Rev .8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 58 of 64
taken the position that examining the local effects of immigration is not possible , and that attempts to do so yield results that are completely uninformative, (id. ¶¶ 6, 12-15) ; (3) Dr. Borjas repeatedly has concluded that wage impacts of immigration can only be calculated at the national level due to capital and labor mobility and immigrant location decisions , (r d . ¶¶ 6 , 16-21) ; and (4) Dr. Borj as has noted that some groups of workers-specifically, those with skills that differ from the skills possessed by immigrants, actually may gain from a nationwide increase in immigration, (id. ¶¶ 6,42-46) .
Dr. Welch complains that Dr . Hamermesh has described immigration inaccurately as an "exogenous shock ," and has ignored the i nterconnectedness of labor markets . (Welsh Decl . ¶¶ 6 , 35-40 . ) Consequently, Dr.
58
AO 72A ( Rev. 81 82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 59 of 64
Welch opi nes that Dr. Hamermesh cannot i dentify, or estimate , the impact of Defendant' s alleged hiri ng of illegal workers on the wages o f Defendant's legal workers . ( Id . ¶¶ 6 ) 40-41 .) Dr. Weld further opines that Dr. Hamermesh' s statistical methodology does not provide a reliable benchmark for making wage comparisons to Defendant's employees . ( Id . ¶ 6 ; 40-41 .)
Dr. Welch further opines that Defendant ' s own database reveals " notable va riati on " in the use of temporary workers across Defendant's various locations . (Welch Decl . ¶ 57 .) Dr. Welch observes that Defendant has numerous vendors that supply it with temporary workers . (Id . ¶ 52 .) Dr. Welch also notes that many of Defendant ' s hourly employees likely never worked at locations that used temporary employees . ( Id . ¶ 53 .)
59
AO 72 A (Rev .8182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 60 of 64

ii . Declaration of Robert C . Divine Defendant also has presented the Declaration of Robert C . D i vi ne . ( Def.'s Resp . P l s .' Mot . Class Certificat i on Ex . 16 .)' Robert C . Divine is an attorney who practices in the area of immigration law . (Decl . of Robert C . Divine ¶¶ 1-2 .) Attorney Divine previously served as the first Chief Counsel of U . S . C itizenship and Immigration Services (" USCIS" ) , an

A O 7 2A ( Rev . 8 /8 2)

' In a footnote in their reply brief, Plaintiffs argue that the Court should strike Attorney Devine ' s declaration , contending that Attorney Devine ' s declaration actually is a thirty-page legal br ief filed in violation of the page limitations . To the extent that Plaintiffs sought to strike Attorney De vine' s declaration , Plainti ffs should have filed a separate Motion to Strike or Not ice of Objection to that declaration . Simply requesting affirmative relief in a footnote or the body of a reply bri ef is not sufficient to tri gger the motions reporting system used by the Clerk's office , and a party who requests relief in this way runs a very real risk of having his or her request for rel ief overlooked .
In any event, the Court declines to strike Attorney De vine' s declaration as a legal brief . Instead , the Court has not considered the porti ons of that declarati on that s imply appear to be legal conclusions . The Court further observes that Attorney Devine' s declaration d id not affect the Court ' s decis ion as to class certification .
60

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 61 of 64
agency within the United States Department of Homeland Securi ty . ( Id . ¶ 4 .) Attorney Di vine also previously served as the acting director and acting deputy director of USCIS . ( Id .)
USCIS manages the electronic employment verification system originally known as Basic Pilot and now known as EVerify. ( Devine Decl . ¶ 5 .) According to Attorney Devi se , Plaintiffs' proposal that they can ascertain who is "legally authorized to be employed in the United States" by having the Court order Defendant to run its employees' names through Basic P ilot or E-Verify i s erroneous . ( Id . ¶ 11 .) Attorney Devine complains that neither E-Verify nor the SSA's Social Security Number Verification Service ("SSNVS") allow the types of queries that Plaintiffs propose to subm it. ( Id . ¶ 15 . ) Accord i ng to Attorney Dev i ne , E-
61
AO 72A ( Rev . 6182)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 62 of 64
Verify : ( 1 ) only allows employers to submit queries about current employees at the time of hiring of the employees ; (2) does not allow queries for workers after hiring ; and (3) does not allow queries for former employees or applicants who are not hired . (Id .) Attorney Devine also notes that although the SSNVS allows queries about existing and former employees, those queries are allowed only to ensure that the records of such employees are correct for purposes of completing Internal Revenue Service Form W-2 . ( Id .) According to Attorney Devine, even if the queries proposed by Plaintiffs were permissible, the responses to those inquiries would not necessarily determine which workers are authorized to work in the United States . (Id . ¶¶ 16-26 .) Attorney Devine opines that proposed queries using private databases suffer from sim i lar problems . ( id . ¶¶ 27-28 . )
62
AO 7 2A ( Rev. 8 /82)

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 63 of 64

AO 72A ( Rev . 8182)

Sim i larly, Attorney Devi ne notes that SSA no-match letters , health insurer notifications, and [-9 forms do not establish whether given workers are authorized to work in the United States . ( id . ¶¶ 29-30 , 32-37 .) Finally, Attorney Devi ne opines that federal law prohibits an employer from using English language proficiency to determine whether a worker is authorized to work in the United States . (Id . ¶¶ 38-53 .)
9. Qualifications of Plaintiffs ' Counsel a . Bobby Lee Cook
Bobby Lee Cook, an attorney representing Pla i ntiffs , has experience representing classes in class act ions , and has been approved to act as class counsel in a number of cases . ( Decl . of Bobby Lee Cook ¶ 2 .) Attorney Cook has presented a declaration detailing the work that he and his co-counsel have performed in this case . (Id . ¶ 3 .)
63

Case 4:04-cv-00003-HLM Document 190 Filed 03/03/2008 Page 64 of 64
According to Attorney Cook, he has the experience and skill necessary to represent the class in this case . { !d . ¶ 4 .)
b. John E . Floyd Similarly, Attorney John E . Floyd, who also serves as class counsel for Plaintiffs, has submitted a declaration in di cati ng that h i s law firm has handled a number of federal and Georgia RICO cases, including class action cases . (Decl . of John E . Floyd 1 2 .) Attorney Floyd states that he has experience in litigating complex cases involving RICO claims, and that he has authored several publications concerning RICO . {id . 13 .) Attorney Floyd also indicates that the other attorneys from his law firm who are participating in this case have prior experience with class actions . (Id . ¶¶ 6-9 .) Attorney Floyd further provides information concerning the work that he and his co-counsel
64
AO 72A ( R e v . 8/82 )

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 1 of 72
have performed in this case . (Id . ¶ 10 .) Finally, Attorney Floyd opines that his law firm and the individual attorneys from that firm who are involved in this case have the experience and skill necessary to represent the class in this case . ( Id . ¶ 11 .)
c . Howard W. Foster Attorney Howard W . Foster, who also serves as counsel for Plaintiffs in this case, has provided a declaration indicating that he has considerable experience in RICO act ions , in clud i ng experien ce as c l ass counse l i n RICO actions proceeding under the same legal theory at issue in this case, and that he also teaches a class regarding Civil RICO at a law school . (Decl . of Howard W . Foster ¶ 2 .) Attorney Foster further provides the Court with information concerning the work that he and his co-counsel have
65
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 2 of 72
performed in this case . (Id . ¶ 3 .) Attorney Foster opines that he and his firm have the experience and skill necessary to represent the class adequately in this case . {Id . ¶ 4 .}
d . Matthew D . Thames Finally , Attorney Matthew D . Thames , who also se rves as counsel for Plaintiffs in this litigation, has submitted a declaration stating that Attorney Thames has significant experience in litigating against carpet manufacturers on behalf of plaint iff factory workers . ( Decl . of Matthew D . Thames ¶ 2 .) Attorney Thames further provides information concerning the work that he has performed in this case, and states that he has the experience and skill necessary to represent the putative class adequately . (Id . ¶¶ 3-4 .) B . Procedural Background On January 6 , 2004 , Plaintiffs filed this lawsuit .
66
AO 72A (Rev . 6l 82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 3 of 72
Plaintiffs are current and former hourly employees of Defendant who claim that Defendant's alleged employment and harboring of illegal aliens has depressed their wages . Plaintiffs assert the following claims : (1) a claim that Defendant ' s conduct violates 18 U . S . C .A. § 1962 (c) (Compl . ¶¶ 88-92) ; (2) a claim that Defendant's conduct violates O .C .G .A. § 16-14-4(a) (id . ¶¶ 93-98); (3) a claim that Defendant' s conduct vi olates O . C . G . A. § 1 6 - 14 -4 (c) (i d . ¶¶ 99-105) ; and a claim for unjust enrichment arising under Georgia law (id . ¶¶ 106-110) . Plaintiffs also seek certification of a class pursuant to Federal Rule of Civil Procedure 23 . ( Id . ¶ 46 .)
On February 9, 2004, Defendant filed a Motion to Dismiss . Defendant requested that the Court dismiss Plaintiffs' federal and state RICO claims . Defendant also
67
AO 72A ( Rev . 8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 4 of 72
requested that the Court decline to exercise its pendent j uri sdiction over Pla i ntiffs ' state law c l aims .
On April 12 , 2004 , the Court granted in part and denied in part Defendant' s Moti on to Dismiss . ( Order of Apr. 12 , 2004 .) The Court denied the Motion to Dismiss with respect to Plaintiffs' federal and Georgia RICO claims and with respect to Plaintiff's unjust enrichment claim relating to Defendant's wage savings in employing Plaintiffs at a reduced rate, but granted the Motion to Dismiss with respect to Plaintiffs' unjust enrichment claim relating to Defendant's savings with respect to workers' compensation claims . {Id .}
On May 27 , 2004, the Court granted Defendant ' s request to certify its Apri l 12 , 2004 , Order for an i nterlocutory appeal . (Order of May 27 , 2004 .) The Court also stayed discovery pending resolution of the interlocutory
68
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 5 of 72
appeal . (Id .) On June 9 , 2005 , the United States Cou rt of Appeals
for the Eleventh Circuit entered an Order affirming in part and reversing i n part the Court ' s ruling on the Motion to Dismiss . Williams v. Mohawk Indus ., Inc ., 411 F . 3d 1252 (11th Cir. 2005) . The Eleventh Circuit affirmed the Court's decision with respect to Plaintiffs' RICO claims, but reversed the Court's denial of the Motion to Dismiss with respect to Plaintiffs ' unjust enri chment cla i ms based on Defendant 's wage savings i n employing Pla i ntiffs at a reduced rate . Id .
Defendant filed a petition for rehearing en banc with the Eleventh Circuit . On July 29 , 2005 , while that petition remained pending before the Eleventh Circuit, Plaintiffs filed a Motion to Lift the Stay of D i scovery in this Court .
On August 8 , 2005 , the Eleventh Circuit den i ed
69
A O 7 2A (Rev .8182)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 6 of 72
Defendant's petition for rehearing en banc. On August 11 , 2005, Defendant filed a Motion to Continue the Stay of D is covery Pend i ng its Petiti on fo r Certi ora ri .
On August 16, 2005, the Eleventh Circuit issued its mandate in the case . On August 18 , 2005 , the Eleventh Circuit returned the record on appeal to the Court .
On August 18 , 2005 , the Court entered an Order staying discovery in this case until the Supreme Court either denied Defendant's petition for a writ of certiorari or granted Defendant' s petition and decided the case on its merits . (Order of Aug . 18 , 2005 .) On October 7 , 2005 , Defendant filed a petition for certiorari with the Supreme Court, raising the following questions for review : (1) whether a defendant corporation and its agents can constitute an enterprise under RICO ; and (2) whether Plaintiffs had stated
70
AO 72A ( Rev . &162)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 7 of 72
proximately caused injuries to business property by alleging that the hourly wages they accepted were too low . On Decembe r 12 , 2005 , the Supreme Court granted cert iorari as to the first question presented in the petition . Mohawk Indus ., Inc. v . Wil l i ams , 126 S . Ct . 830 (2005).
On April 25 , 2006 , the Supreme Court held o ral
arguments in the case . On June 5, 2006, the Supreme Court dismissed the writ of certiorari limited to the first question contained in the petition for certiorari as improvidently granted, and remanded the case to the Eleventh Circuit for further consideration in light of Anza v. Ideal Steel Supply or ., 126 S . Ct . 1991 (2006) . Mohawk Indus ., Inc ._ v . Williams, 126 S . Cf. 2016 (2006 ) .
On September 27, 2006, the Eleventh Circuit issued an opinion concluding that the Court properly denied
71
AO 72A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 8 of 72
Defendant 's Motion to D ismiss as to Plaintiffs' federal and state RICO claims , and that the Court improperly denied the Motion with respect to Plai ntiffs ' unjust enrichment claims . Williams v . Mohawk Indus . , Inc ., 465 F . 3d 1277 (11th Cir. 2006) . The Eleventh Circuit remanded the case to this Court "for further proceedings ." Id . at 1295 .
On October 9, 2006, Defendant filed a petition for rehearing en bans . On November 22 , 2006 , the Eleventh Circu i t denied Defendant ' s petition for rehearing en banc. On November 30, 2006, the Eleventh Circuit issued its mandate .
On December 13 , 2006 , Plaintiffs filed a Motion for Discovery . P laintiffs requested that the Court issue an Order confirming that the stay of discovery in this case had expired according to its terms and directing the parties to
72
AO 72A ( Rev . 8 182)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 9 of 72
proceed with discovery according to the terms outlined in the March 15 , 2004 , scheduling order ente red by the Court.
On December 19, 2006, Defendant filed a second petition for a writ of certiorari with the Supreme Court . On January 2 , 2007 , Defendant fi led a response in opposition to Plaintiff's Motion for Discovery, arguing that the Court should stay discovery in the case until the Supreme Court denied Defendant's petition for a writ of certiorari or ruled on the merits of the case .
On January 16 , 2007 , the Court entered an Orde r denyi ng Pla i ntiffs ' Motion for Discovery . (Order of Jan . 16 , 2007 .) The Court stayed discovery in the case until the Supreme Court denied Defendant's petition for a writ of certiorari or decided the case on the merits after granting Defendant' s petition . (ld . )
73
AO 72A ( Rev .8182)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 10 of 72
On Feb ruary 26 , 2007 , the Supreme Court denied Defendant 's second petition for a writ of certiorar i . Mohawk Indus ., Inc . v . Wil l iams , 127 S . Ct. 1381 ( 2007 ) . The case subsequently was returned to this Court for further proceedings .
On March 21, 2007, Plaintiffs filed an Emergency Motion for Hearing Regard i ng Mohawk' s Contact With Witnesses . (Docket Entry No . 85 .) On April 9 , 2007 , the Court denied that Mot i on . (Order of Apr. 9 , 2007 .)
On March 30 , 2007 , Plaintiffs filed a Motion for Sanctions and to Compel as a Result of Mohawk ' s Presentation of an Unprepared Corporate Designee . (Docket Entry No . 95 .) On that same day, Plaintiffs filed a Motion for the Entry of a Document Preservation Order . (Docket Entry No . 96 .) On Apri l 27 , 2007 , the Court entered
74
AO 7 2A ( Rev . 81 82 )

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 11 of 72
an Order denying the Motion for the Entry of a Document Preservation Order as moot, as Plaintiffs' counsel indicated an intent to withdraw that Motion without prejudice . (Order of April 27 , 2007 .) Sim il arly , on May 14 , 2007 , the Court entered an Order denying Plaintiffs' Motion for Sanctions without prejudice after Plaintiffs withdrew the Motion . (Order of May 14 , 2007 .)
On May 18 , 2007 , Plaintiffs filed a Not i ce of Death of Plaintiff. (Docket Entry No . 126 .) That Notice informed the Court of the death of Plaintiff Lora Sisson . ( Id . )
O n June 6 , 2007 , the pa rties filed a Jo i nt Sti pu l ation . ( Docket Entry No . 136 .) The Joint Stipulation states , in relevant part :
1 . Plai ntiffs allege that they a re current and former hourly employees of Mohawk .
75
AO 72A

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 12 of 72

A O 72 A ( Rev . 8 182 )

2 . Mohawk has denied that it employs or has employed Plaintiffs-or any other hourly workers-within the State of Georgia . Mohawk has contended that certain subsidiaries, including but not limited to Aladdin Manufacturing Corporation, Mohawk Carpet Corporation and Mohawk ESV, Inc ., have employed Plaintiffs and other hourly workers in Georgia .
3 . The parties stipulate that , for purposes of this action only, no party will rely on the fact or contention that one or more Mohawk subsidiaries-rather than Mohawk itself-may have employed, paid for, or contracted for hourly workers (a) in connection with any aspect of class certification, (b) to establish or dispute any liability or violation of state or federal law, or (c) to avoid the collection of any judgment or award in this acti on .
4 . The parties stipulate that, for purposes of this action only , no party will rely on the fact or contention that one or more Mohawk
76

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 13 of 72

AO 72A (Re v . 8/ 82)

subsidiaries-rather than Mohawk itself-may have contracted with or had other dealings with temporary employment agencies, recruiting firms, and individual recruiters (a) in connection with any aspect of class certification, (b) to establish or dispute any liability or violation of state or federal law, or (c) to avoid the collection of any judgment or award in this action .
5 . The parties stipulate that, for purposes of this action only, that Mohawk will assume any liability for the conduct of its subsidiaries . The parties further agree and stipulate that Plaintiffs need not and will not add any other Mohawk subsidiary as a defendant in this action .
6 . For purpose of this action only, the parties stipulate that any current or former hourly employee in Georgia of any Mohawk subsidiary (including, but not limited to, Gale Pelfrey, Shirley Williams and Bonnie Jones) has standing to pursue claims for injuries to their wages against Mohawk in this action .
77

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 14 of 72
7 . Nothing in these stipulations, however, will affect the ability of any party to rely upon other issues of corporate organization-including but not limited to Mohawk's divisional structure-(a) in connection with any aspect of class certification, or (b) to dispute any legal violation or liability.
On December 10, 2007, Plaintiffs filed a Notice of Death of Plaintiff, notifying the Court of the death of Plaintiff Shirley Williams . (Docket Entry No . 169 .)
On December 18, 2007, Plaintiffs filed their Motion for Class Certification . (Docket Entry No . 174 .) Plaintiffs request that the Court certify the following class :
All persons legally authorized to be employed in the United States who are or have been employed in hourly positions by Mohawk Industries , Inc., its
78
AO 7 2A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 15 of 72
subsidiaries or affiliates in Georgia at any time from January 5 , 1999 to the present, other than Excluded Employees .
Excluded Employees are employees whose employment at Mohawk has been limited to : Da l Tile , Unilin , or any Mohawk facility or fac ili ti es in M i lledgevi lle , Dublin , Tifton , Norcross , Kennesaw or Atlanta , Georg i a .
(id . at 1-2 .) Plaintiffs seek certification of their claim for injunctive relief under Federal Rule of Civil Procedure 23(b)(2), and request that the Court certify all of their claims under Rule 23(b)(3) .
Defendant opposes P laint i ffs' Motion fo r C l ass Certification . The briefing process for the Motion is complete , and the Court therefore concludes that the Motion is ripe for resolution by the Court .
79
A O 72 A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 16 of 72
II . Standard for Class Cert i fication A. In General Federal Rule of Civil Procedure 23 governs motions to
proceed as a class action in federal court. Rule 23 requires a two-step inquiry to determine whether class certification is appropriate . Fed . R . C iv . P . 23 . P l aintiffs bear the burden of satisfying each of Rule 23's certification requirements . Hudson v . Delta Air Lines Inc ., 90 F . 3d 451 , 456 ( 11th C i r. 1996) . The determination whether a plaintiff has satisfied the requirements imposed by Rule 23 is left to the discretion of the trial court . Califano v. Yamasak i, 442 U . S . 682 , 703 (1979) ; Armstrong v . Martin Marietta._Corp ., 1 38 F . 3d 1374 , 1386 (11th Cir. 1998) .
When assessing a motion for class certification, the Court ordinary does not inquire whether the plaintiffs have
80
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 17 of 72
adduced sufficient evidence to prevail on the merits of their cla i ms . E i sen v . Carlisle . & Jacque l in , 417 U . S . 156 , 178 ( 1974 ) ; Hudson v . Delta Ai r Lines ,, Inc ., 90 F . 3d 451 , 456 ( 11th Cir. 1 996 ) . The Court , however , " performs a'rigorous analysis ' ofithe arguments offered in support of certifying the cl ass ." Rhodes ... Cracker Barrel Old Country Store .,_ Inc., 213 F . R . D . 619 , 673 ( N . D . Ga . 2003 ) (c iting Gilchrist v. Bol ger, 733 F . 2d 1551 , 1556 ( 11th Cir . 1984 )) .
"When performing this analysis, the Court is not limited solely to the substance of the parties' pleadings ; indeed, the Cou rt should a ll ow-and has allowed i n this case-the pa rties to conduct discovery and adduce evidence relevant to the class certi fi cation i ssue ." Rhodes , 213 F . R . D . at 673 (ci ting Washington v . Brown &„_ Williamson Tobacco Corp , 959 F . 2d 1566 , 1570-71 (11th Cir. 1992)) . As the Supreme
81
AO 72 A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 18 of 72
Court has recognized, the need for such discovery varies
depending on the circumstances presented by each case :
"[T]he class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action ." [Coopers & L brand v . Livesa , 437 U .S . 463, 469 (1978)] (quoting Mercantile Nat. Bank v. Lan dg eau, 371 U .S . 555, 558) . Sometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim, and sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question .
Genera l Tel . Co . v . Falcon , 457 U . S . 147 , 160 ( 1982 ) ;
Hudson , 90 F . 3d at 457 ; see also In re Polypropylene
Carpet Antitrust Liti ., 178 F . R . D . 603 , 610-11 , 614 ( N . D . Ga . 1997) (" Polypropylene I") (noting , because motion for
82
AO 72A (Rev-8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 19 of 72
class certification pursuant to Rule 23(b)(3) requires court to examine whether evidence to be used by plaintiffs at trial is common to class , court must perform preliminary review of pla i nti ffs' proposed evidence ) . In sum , the Court must determine "through information submitted outside of the pleadings that the requirements of Rule 23 are met , not whether plaintiffs' claims are viable ." Telecomm Technical Sews . v. Siemens Rolm Commc' ns Inc ., 172 F . R . D . 532 , 543 ( N . D . Ga . 1997 ) . "Stated d ifferently , the Court wi ll examine whether sufficient evidence exists to reasonably conclude that Plaintiffs may proceed in the manner proposed, not whether the evidence can withstand any and all factua l challenges leveled by Defendant[] ." Rhodes , 213 F . R . D . at 673 .
B . Evaluation of Expert Testimony
83
AO 72A ( Rev . $ 182 )

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 20 of 72
At the class certification stage, the Court "need not evaluate competing expert opinions pursuant to Federal Rule of Evidence 702 or the rule of Daubert v . Merrill Dow Pharmaceuti cals , Inc ., 509 U . S . 579 , 113 S . Ct . 2786 , 125 L . Ed . 2d 469 ( 1993 ) ." In re Microcrystalline Cellulose Antit rust Litia ., 218 F . R . D . 79 , 83 ( E . D . Pa . 2003 ) . Indeed , at this stage of the proceedings , the Court "` should not delve into the merits of an expert's opinion, or indulge in dueling between oppos i ng experts ."' Fisher v . CIBA Speciality Chems . Co rd ., 238 F . R . D . 273 , 281 (S . D . Ala . 2006 ) ( quoting In re Natural Gas Commod ities Litia ., 231 F . R . D . 171 , 182 ( S . D . N . Y . 2005)) ( internal quotat i on marks omitted) . The Court also "need not assign any one opinion particular weight ." In re Microc stalline Cellulose Antitrust Liti ., 218 F . R . D . at 83 .
84
AO 72A (Rev . 8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 21 of 72
"An expert opin i on must meet only a ` low hurd l e' to receive consideration at the Rule 23 stage ." Fisher, 238 F . R . D . at 281 ( citing In re Natural Gas Commod ities Lifi ., 231 F . R. D . at 182 ) . The Court asks only "'whether the expert evidence is sufficiently probative to be useful in evaluating whether class certification requirements have been met ."' Id . (quoting Dukes v . Wal- Mart Inc ., 222 F . R. D . 189 , 191 (N .D . Ca l . 2004)) .
Defendant raises numerous arguments as to why Defendant believes the Court should not considerthe expert testimony presented by Plaintiffs . Those arguments , however, essentially present Daubert challenges or challenges to the merits of the opinions offered by Plaintiffs' experts . The Court need not, and does not , cons i der such challenges at th i s stage of the proceedings . Rather, the
85
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 22 of 72

AO 72A (Rev . 8/ 82)

Court concludes , for the limited purposes of ruling on the instant Motion, that the expert evidence presented by Plaintiffs is sufficiently probative to be useful to the Court in determining whether Plaintiffs have satisfied the requirements for class certification . Plaintiffs' expert evidence consequently satisfies the low hurdle required at this stage of the proceedings .
C. Requirements of the Federal Rules of Ci vil Procedure
Before the Court may certify a case as a class action, the case must satisfy all four requirements of Federal Rule of Civil Procedure 23(a), and also must fall within one of the categories described in Rule 24( b ) . Rhodes , 213 F . R . D . at 673-74 . Rule 23(a) requires Plaintiffs to show :
(1) the class is so numerous that joinder of all members is impracticable,
86

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 23 of 72

(2) there are questions of law or fact common to the class ,

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class , and

(4) the representative parties will fairly and adequately protect the interests of the class .

AO 72A ( Rev .8/82)

Fed . R . C iv. P . 23 (a ) . Plaintiffs argue that the putative class's claim for
injunctive relief qualifies for certification under Rule 23(b)(2) . Rule 23(b)(2) allows certification if "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a who le ." Fed . R. Civ. P . 23(b)(2) .
Plaintiffs also claim that the putative class fits within
87

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 24 of 72
Rule 23(b)(3) . Rule 23(b)(3) requires that : (1) questions o f law or fact common to members of the class predominate over questions affecting only individual members ; and (2) a class action must be superior to other available methods for the fair and efficient adj udication of the controversy. Fed . R .
The Court first addresses whether Plaintiffs have standing to pursue their claims . The Court then discusses Plaintiffs ' showing unde r Rule 2 3(a ) and , final ly, d i scusses whether Plaintiffs have satisfied the requirements of Rule 23(b)(2) or Rule 23(b)(3) .
III . Stand i ng As an in itial matter , Defendant contends that the named
88
AO 7 2A (Rev-8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 25 of 72
Plaintiffs lack standing to pursue their claims . The United
States Court of Appeals for the Eleventh Circuit has
observed :
[I]t is well-settled that prior to the certification of a class, and technically speaking before undertaking any formal typicality or commonality review, the district court must determine that at least one named class representative has Article I I I standing to raise each class subclaim . "[A]ny analysis of class certification must begin with the issue of standing ." "Only after the court determines the issues for which the named plaintiffs have standing should it address the question whether the named plaintiffs have representative capacity, as defined by Rule 23(a), to assert the rights of others ." It is not enough that a named plaintiff can establish a case or controversy between himself and the defendant by virtue of having standing as to one of many claims he wishes to assert . Rather, "each claim must be analyzed separately, and a claim cannot be asserted on behalf of a class unless at
89
AO 72A (Rev .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 26 of 72
least one named plaintiff has suffered the injury that gives rise to that claim ."
Prado-Steiman v . Bush , 221 F . 3d 1266 , 1279-80 ( 11th Cir. 2000 ) (citati ons omitted ) ( alteration i n o rig i nal ) . Pla i ntiffs , as the parties claiming jurisdiction, have the burden of establishing stand i ng . Fla .__ Pub . Interest Research Group Ci ti zen Lobby, Inc . v . Envtl . Prot . Agencv , 386 F . 3d 1070 , 1083 ( 11 th Cir. 2004).
"Article III of the United States Constitution limits the power of federal courts to adjudicating actual `cases' and ` controvers ies ."' Nat' I_Alliance for the Mentally lii, St. Johns, Inc . v . Bd . of Count Comm ' rs of St . Johns Count , 376 F . 3d 1292 , 1294 (11th Cir. 2004) . " The most significant case-or-controversy doctrine is the requirement of standing ." Id . "` In essence the question of standing is whether the
90
AO 72A ( Re v . 8B2)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 27 of 72

A O 7 2A ( Rev . 8 /82 )

litigant is entitled to have the court decide the merits of the dispute or of particu lar issues ."' Id . (quoti ng Warth v . Seldin, 422 U . S . 490 , 498 ( 1975 )) .
To satisfy the standing requirement, a party must show : (1) that he has suffered an injury in fact ; (2) that the inj ury is fairly traceable to the challenged action of the defendant ; and (3) that it is likely, as opposed to merely speculative, that the i nj ury "wil l be ` red ressed by a favorable decis ion ."' B i schoff u ._ Osceola County, Fla ., 222 F . 3d 874 , 883 ( 11th Cir . 2000) .
Here , the Court finds that at least one of the named Plaintiffs has standing to assert all of the claims advanced by Plaintiffs . Although Defendant correctly notes that the named Plaintiffs who are former employees of Defendant2
'Plaintiff Pelfrey i s a former employee of Defendant . As previously noted , Plaintiffs Williams and Sisson passed away since
91

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 28 of 72
lack standing to raise claims for injunctive relief, the evidence in the record indicates that Plaintiff Jones still is employed by Defendant . See Reid v . Lockheed Ma rtin Ae ronautics Co ., 205 F . R . D . 655 , 665 n . 13 ( N . D . Ga . 2001 ) (observing that former employees lacked standing to seek injunctive relief) . At least one named Plaintiff consequently has standing to pursue claims for injunctive relief.3

AO 72A ( Re v . 8182)

the filing of this action, and thus obviously are no longer employed by Defendant .
'To the extent that Defendant contends that Plaintiff Jones lacks standing to pursue claims because Plaintiff Jones worked at a faci lity that d id not use temporary labor , this issue " is more properly one of commonality and typicality than of standing ." Reid , 205 F . R . D . at 663 n . 9 . Consequently, the Court addresses that contention in connection with the commonal ity and typicality inquiries .
92

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 29 of 72
IV. Rule 23(a) A na lysis A . Numeros ity The numerosity requi rement i s satisfied if the proposed
class is so numerous that joinder of all members is impracticable . Fed R . Civ . P . 23(a)(1) . The impracticability requirement does not require that joinder be impossi ble ; rather, a plaintiff need only show that joinder would be extremely difficult or inconvenient . Anderson v . Garner, 22 F . Supp. 2d 1379 , 1384 (N .D . Ga . 1997) . Additi onally, a plaintiff "generally must proffer some ev idence or a reasonable estimate of the number of members comprising the purported class ." In re Disposable Contact Lens Antitrust Liti ., 170 F . R . D . 524 , 529 ( M . D . Fla . 1996) .
Here, Plaintiffs allege that the class satisfies the numerosity requirement , and Defendant apparently agrees .
93
AO 7 2A (Rev . 8 182)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 30 of 72
( Def.' s Resp . Pls .' Mot . Class Cert i ficat ion at 1 ("Plaintiffs seek to represent a c l ass cons ist i ng of 49 , 708 members .") . The Court finds that the proposed class is sufficiently numerous to make joinder of all members extremely difficult or inconvenient .
A second element of the numerosity requirement is that the proposed class meet a minimal standard of identifiability . Rhodes , 213 F . R . D . at 674 . Although "[ i ]t is not necessary that the members of the class be so clearly identified that any member can be presently ascertained . . . . [Plaintiffs] must establ i sh that there exists a legally definable `class ' that can be ascertained through reasonable effort ." Earnest v. Gen . Motors Corp ., 923 F . Supp . 1469, 1473 & n . 4 ( N . D . Ala . 1996) ( quotations a n d citations om itted ) . The cl ass s i mply must meet a "minimum standard of defi niteness
94
AO 72A (R ev . 8 18 2)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 31 of 72
which will allow the trial court to determine membership in the proposed c lass ." Id . ; see also Telecomm Techn i cal Seas ., 172 F . R . D . at 543-44 (noting all members of class need not be specifically identified and may be dispersed geographically) .
One court has noted that to meet Rule 23(a)'s requirement that the class be identifiable, "a proposed class definition must specify a particular group harmed during a particular time period via a particular manner, such that the district court can utilize objective indicia to determine who is and i s not part of the class ." Fisher, 238 F . R . D . at 301 . Courts have declined to certify classes "where the proposed [class] definition would require individualized fact-finding to identify c l ass members ." Id .
Plaintiffs suggest that they can identify the members of
95
AO 7 2A ( R ev . 8 /82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 32 of 72
the proposed class through Defendant 's records, notifications that third parties have provided to Defendant concerning use of social security numbers, submission of the names and soc i al security numbers of Defendant 's hourly workers to E-Verify, by reviewing 1-9 forms, and by using databases such as Lexis-Nexis or People Finder . Defendant devotes a significant amount of time and energy to contending that those methods will not allow Plaintiffs or the Court to identify the members of the proposed class . The Court , however, fi nds at this point , and solely for purposes of the instant Motion, that the alleged deficiencies pointed out by Defendant do not cause the proposed class to fail the "minimal" standard of ascertainability .
In sum , the Court finds that the proposed class satisfies the numerosity requirement . The Court further concludes
96
AO 72A ( R ev . 8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 33 of 72
that the proposed class meets the minimal standard of i denti fiab ility requ i red by Ru l e 23 ( a ) .
B. Commonality To satisfy the commonality requirement, a plaintiff must show the presence of questions of law or fact common to the entire class . Fed . R . Ci v . P . 23(a)(2) . Stated d i fferent ly, Rule 23(a)(2) requires a plaintiff to demonstrate the existence of issues subject to class-wide proof . Hudson , 90 F . 3d at 457 . " [W]hile it i s not necessary that every question of law or fact is common to every class member, commonal i ty will not exist as long as there is a predominance of individual issues ." Domestic Air, 137 F . R . D . at 699 ( citing 3 Herbert B . Newburg , Newb.ura~on_ Class Actions § 18 . 09 , at 464 (2d ed . 1985)). Here, Plaintiffs argue that several questions of fact and
97
AO 72 A (Rev.8/ 8 2)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 34 of 72
law are common to the proposed class . In pa rticular,
Plaintiffs contend that the common questions at issue in this
case i nclude :
(1) Enterprise : Has Mohawk conducted or participated, directly or indirectly, in the conduct of an enterprise's affairs? What are the nature and extent of the relationships between Mohawk and the third parties that supply Mohawk with illegal workers?
(2) Pattern of Racketeering Activi#v Has Mohawk engaged in a pattern of racketeering activity? How many persons who are not authorized to be employed in the United States has Mohawk employed in hourly positions in Georgia during the Class Period? Did Mohawk knowingly hire those unauthorized aliens? How many aliens has Mohawk harbored during the Class Period? Did Mohawk knowingly or recklessly harbor those aliens? Has Mohawk knowingly or recklessly
98
AO 72A (Re v .8/8 2)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 35 of 72

encouraged or induced aliens to come to or reside in the United States? Has Mohawk knowingly accepted false employment authorization documents? Has Mohawk knowingly used false identification documents?

(3) Conspiracy: Has Mohawk engaged in a conspiracy to violate § 16-4-4(a) of the Georgia RICO statute?

(4)

: To what extent has Mohawk's pattern

of racketeering activity depressed the wages

of the class members and/or increased or

ma i nta i ned Mohawk's profits?

(5) Injunctive_ Relief : What injunctive relief is required to remedy Mohawk's violations of the federal and Georgia RICO statutes?
( Pls .' Br. Supp . Mot . Class Certification at 15-16 .) For the following reasons, the Court concludes that this

99
AO 7 2A
(Rev . 8 182)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 36 of 72

case does not satisfy the commonality requirement . Contrary to Plaintiffs' arguments that Defendant engaged in one grand conspiracy to employ illegal workers, the evidence in the record indicates that Defendant's operations, including its use of temporary employment agencies and wage-setting practices, are extremely decentralized . Indeed , the evidence shows that Defendant 's corporate-level management, including its human resources department, did not enter into relationships with temporary agencies or even exercise control over those relationships, and d id not exercise control over wages . Instead , the evidence in the record demonstrates that each of Defendant's five divisions at issue in this case conducted its own hiring, entered into its own relationships with various temporary employment agencies, and had discretion and

AO 72A (Rev .8/82)

100

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 37 of 72

autonomy to choose whether to enter into such relationships and to set the terms of the relationships . The record further demonstrates that each division set its own wages for its non-temporary hourly employees . The record also shows that some locations within divisions even conducted their own hiring, and that the management at those locations had discretion to choose whether to use temporary employees or to engage in relationships with temporary employment agencies . The evidence thus reveals that the relationships with the various temporary employment agencies occurred on a division-by-division or facility-by-facility basis, rather than on a corporate-level basis . Under those circumstances, the Court finds that Plaintiffs have failed to satisfy the commonality requirement. See Reid , 205 F . R . D . at 669-70 (noting that plaintiffs in employment discrimination

AO 7 2A ( Re v . 8182 )

101

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 38 of 72

A O 7 2A ( Re v.618 2)

suit failed to satisfy commonality requirement where evidence indicated that employment practices were established at local level in various facilities) ; see also Cooper v. S . Co ., 390 F . 3d 695 , 715 ( 11th C i r. 2004) (stating courts frequently have declined to certify class actions where "class certification was sought by employees working in widely diverse job types, spread throughout d i ffe rent facilit i es and geog raph i c locations"); Wri aht v . Circuit City tores Inc ., 201 F . R . D . 526 , 541 (N .D . Ala . 2001) (observing, in discrimination case, that plaintiffs who were employed in different stores, in different states, in different departments, and at different levels within company hierarchy did not have claims that were susceptible to generalized proof or defenses) .4
4Plaintiffs argue that the Court should treat this case d ifferently because it is a RICO action , rather than an employment
102

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 39 of 72
C . Typicality The typicality requirement is satisfied if the claims and defenses of the representative parties are typical of the cla i ms and defenses of the c l ass . Fed R. Civ . P . 23(a)(3). A representative plaintiff's claim is typical if "the claims or defenses of the class and the class representative arise from the same event or pattern or practice and are based on the same legal theory ." Kornber v. Carnival Cru i se Lines Inc ., 741 F . 2d 1332 , 1 337 11th Cir . 1984 ) . Stated differently, the Court simply inquires whether the named representative's claims "have the same essential

AO 72A (Rev .8/82)

discrimination case . The Court understands and appreciates Pla intiffs' argument. The Court , however, cannot simply i gnore the evidence in the record , which fai ls to support Plaintiffs ' contention that Defendant engaged i n a corporate-wide RICO enterprise with temporary employment agenc ies to employ illegal workers and thereby depress the wages of workers who were eligible for employment in the United States .
103

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 40 of 72

characteristics as the claims of the class at large ." Appleyard v . Wallace , 754 F . 2d 955 , 958 (1 1 th Cir. 1985 ) .
"Typicality, however, does not require identical claims or defenses . A factual variation will not render a class representative's claim atypical unless the factual position of the representative markedly differs from that of other members of the class ." Kornbera , 741 F . 2d at 1337 . Furthermore , " [d]ifferences i n the amount of damages between the class representative and other class members does not affect typicality ." Id . A pla i ntiff thus can satisfy the typicality requirement "even though varying fact patterns support the claims or defenses of individual class members, or there is a disparity in the damages claimed by the representat i ve parti es and the other members of the class ." Domestic Air , 137 F . R . D . at 698 (quoting 7A Charles Alan

AO 7 2A ( Re v. 8 182)

104

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 41 of 72
Wright, Arthur R . Miller, & Mary Kay Kane, Federal Practice and Procedure : C ivil § 1764 (2d ed . 1986)) . " However, `there must be a nexus between the class representative's claims or defenses and the common questions of fact or law wh i ch unite the cl ass ."' Wr, i ht , 201 F . R . D . at 543 (quoting Kornberq , 74 1 F . 2d at 1337 ) .
For the following reasons, the Court finds that Plaintiffs have failed to satisfy the typicality requirement . First, Plaintiff Jones never worked at a facility owned by Defendant that used temporary labor . Plaintiff Jones' claims thus are not typical of the claims of members of the proposed class , many of whom may have worked at facilities owned by Defendant that used temporary labor .
Additionally, both Plaintiff Jones and Plaintiff Pelfrey worked at only a handful of Defendant 's facilities that
Los
AO 7 2A ( Re v. 8 /82 )

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 42 of 72

Plaintiffs seek to include in the class definition . As previously noted, the evidence in the record indicates that decisions as to the use of temporary labor, as to agreements with temporary employment agencies, and as to wage-setting were made by the various divisions or even on a facility-by-facility basis . Under those circumstances, the Court simply cannot find that the named Plaintiffs' claims are typical of those of the members of the proposed class at large . See _Co oper, 390 F . 3d at 714-15 (noting that district court did not abuse its discretion in concluding that plaintiffs failed to satisfy typicality requirement where compensation and promotion decisions were made by individual managers in disparate location, and where plaintiffs sought to represent very broad class that purported to represent all African-American employees of defendants, even though

AO 72 A
( Rev . 8182)

106

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 43 of 72

named plaintiffs, collectively, did not have claims that would have been typical of enti re class) ; _W_ri9ht, 201 F . R . D . at 544-45 (finding typicality requirement was not satisfied where class representatives worked in only six of 125 to 160 stores, warehouses, and service centers, located throughout fifteen states, that plaintiffs sought to include in class certification) .
Finally, Plaintiff Pelfrey fails the typicality requirement with respect to her claims for injunctive relief . As previously noted , Plainti ff Pelfrey lacks standing to seek inj unctive relief. Under those circumstances, Plaintiff Pelfrey does not meet the typicality requirement with respect to her claims for i njun ctive re lief. F ranze v . Equitable Assurance , 296 F . 3d 1250, 1254 (11th Cir. 2002) ("'Without individual standing to raise a legal claim, a named representative does not have

AO 72A (Rev .8/82)

107

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 44 of 72

the requisite typicality to raise the same claim on behalf of a class ."') (quoting Piazza v . Ebsco Indus ., 273 F . 3d 1341 , 1345 (11th Cir . 2001)) (alteration in original) .
In sum, the Court concludes that Plaintiffs have failed to satisfy the typicality requirement of Rule 23(a) . The Court next discusses Rule 23(a)'s adequacy requirement .
D . Adequacy To satisfy the adequacy requirement, Plaintiffs must show that they will fairly and adequately protect the interests of the class. Fed . R . Civ . P . 23(b)(4) . This requirement involves a two-part inquiry : (1) whether the proposed class' counsel possesses the qualifications and experience to conduct the litigation ; and (2) whether Plaintiffs possess interests that are antagonistic to the interests of other class members . Kirk atrick v . J . C . Bradford & Co., 827 F . 2d 718 ,

AO 72A ( Re v. 8 182)

108

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 45 of 72

726 (1 1 th Ci r. 1987) ; Tel ecomm Technical Servs ., 172 F . R . D . at 543-44 . The Court addresses those questions in turn .
Defendants do not contest the qualifications of proposed class counsel . Proposed class counsel have cons iderable experience in class action liti gation , and their performance in the litigation to date indicates that proposed c l ass counse l possess the necessary qua lificati ons and experience to conduct the litigation . The Court therefore concludes that Plaintiffs satisfy the first element of the adequacy requ irement of Ru le 2 3( a )(4 ) .
"The adequacy requirement also serves to `uncover conflicts of interest between named parties and the class they seek to represent ."' Wr~ht , 201 F . R . D . at 545 (quoting Rob i nson v . Sears Roebuck & Co ., 111 F . Supp . 2d 1101 ,

AO 72A (Rev .8182)

109

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 46 of 72

1124 ( E . D . Ark. 2000 )) . "'A class representative must be part of the class and possess the same interest and suffer the same injury as the class members ."' Id . (quoti ng Rob i nson , 111 F . Supp . 2d at 1124) . Further, " class representatives should have `the personal characteristics and integrity necessary to fulfill the fiduciary role of class representat ives ."' Id . (quoting Kirkpatrick , 827 F . 2d at 726) .
Defendant argues , among other things , that the named Plaintiffs are not adequate class representatives because the named class members lack sufficient knowledge and understanding of the nature of this action and the facts underlying this action . The Court has reviewed the depositions of each of the named Plaintiffs, and cannot find that the named Plaintiffs lack sufficient knowledge of the facts underlying this action or sufficient understanding of the

AO 72A ( Re v. 8 1&2 )

110

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 47 of 72

facts underlying this action to be adequate representatives . The Court therefore rejects this argument .
Defendant further contends that Plaintiff Pelfrey is not an adequate representative with respect to Plaintiffs' claims for injunctive relief, as Plaintiff Pelfrey is no longer employed by Defendant . See Wright , 201 F . R . D . at 546 (finding plaintiffs failed to satisfy adequacy requirement, partly because none of plaintiffs were current employees of defendant and had no ties to defendant or prospect of benefit from injunctive relief plaintiffs were seeking) . While this argument has merit, Plaintiff Jones remains employed by Defendant, and she has standing to seek injunctive rel i ef. The Court therefore cannot find that Plaintiffs fail the adequacy requirement based on this argument .
For the reasons discussed above , the Court f i nds that

AO 72A (Rev . 81 82)

III

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 48 of 72

Plaintiffs' counsel possess the qualifications and experience necessary to conduct this litigation, and that the named Plaintiffs are adequate class representatives . The Court therefore concludes that Plaintiffs satisfy the adequacy requirement .
E . Summary In sum, the Court finds that Plaintiffs satisfy the numerosity and adequacy requirements of Rule 23(a) . The Court, however, concludes that Plaintiffs cannot satisfy Rule 23(a)'s commonality and typicality requirements . The Court therefore cannot certify this case as a class action , because Pla i ntiffs have fa il ed to sat i sfy a l l of the requirements of Rule 23(a) . In an abundance of caution, however, the Court will discuss whether Plaintiffs can satisfy the requirements of Rule 23(b)(2) or Rule 23(b)(3) .

AO 7 2A ( Rev . $1 82)

112

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 49 of 72

IV. Rul e 23 ( b ) Analysi s In add i ti on to satisfying a ll of the cr iteria of Rule 2 3(a ),
Plaintiffs must meet the requirements set forth in Rule 23(b) . Here, Plaintiffs seek to certify their claims for injunctive relief under Rule 23 ( b)(2), and also seek to certify their claims under Rule 23(b)(3) . Pla i ntiffs thus seek to certify a " hybrid " class action . Rei d , 205 F . R . D . at 686 (describing " hybrid " class action as action in which plaintiffs sought to certify their claims for injunctive relief under Rule 23(b)(2) and their claims for damages under Rule 23(b)(3)) . The Court first addresses Plaintiffs' request for class certification under Rule 23(b)(2), and then addresses Plaintiffs ' request for class certification under Rule 23(b)(3) .

AO 7 2A (Rev-8/82)

1 13

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 50 of 72

A . Rule 23(b)(2) Class certification is appropriate under Rule 23(b)(2) when the plaintiffs satisfy the requirements of Rule 23(a) and the defendant " has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole ." Fed . R . Ci v . P . 23(b)(2) . "Subsection (b)(2) class actions are `limited to those class actions seeking preliminary injunctive or corresponding declaratory relief."' Barnes v . Am . Tobacco Co ., 161 F . 3d 127 , 142 (3d Cir . 1998 ) ( quoti ng 1 Newburg , supra , at 4-39 ) . Here , Pla i ntiffs seek injunctive rel i ef for only one of their three remaining claims-their claim for Defendant's alleged violation of O .C .G .A. § 16-14-4 (a ) . (Compl . ¶¶ 97-98 . ) Plaintiffs, however, also request an award of treble

AO 72A (Rev . 8/82)

114

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 51 of 72

damages , plus an award of punitive damages, in connection with that same claim . (Id . ¶V 95-96 .) Similarly, Plaintiffs request treble and punitive damages in connection with their cla i ms fo r alleged vi olations of 18 U . S . C .A. § 1962 ( c ) and O . C . G . A . § 16 - 14 -4 ( c) . ( I d . § XII ( p rayer fo r re lief)) .
Punitive damages and treble damages are "legal relief that can only be awarded in a Rule 23(b)(2) class action when the damages sought are ` inci dental ' to the claims for equ itable and dec l aratory relief." Cooper, 390 F . 3d at 720 (quoting Murra v . Aus lander, 244 F . 3d 807 , 812 ( 11th Cir. 2001)) . " Damage claims in a Rule 23(b)(2) class action must be incidental to the equitable and declaratory relief because the basic premise of such a class action-that class members suffer a common injury properly addressed by class-wide equitable relief-'begins to break down when the

AO 72A ( Re v. 8 182 )

115

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 52 of 72

cl ass seeks to recover . . . monetary rel ief to be allocated
based on ind ivi dual i nju ri es ."' Id . ( quot i ng All ison „ V. C itao
Petroleum Corp ., 151 F . 3d 402 , 4 1 3 ( 5th Cir. 1998)) . In
Murra , the United States Court of Appeals for the Eleventh
Circuit adopted the position of the United States Court of
Appeals for the Fifth Circuit in Allison :
By incidental, we mean damages that flow directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief . . . . Ideally, incidental damages should be only those to which class members automatically would be entitled once liability to the class (or subclass) as a whole is established . . . . Liability for incidental damages should not . . entail complex individualized determinations . Thus, incidental damages will, by definition, be more in the nature of a group remedy, consistent with the forms of relief intended for (b)(2) class actions .

AO 72A ( Rev . 8182 )

116

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 53 of 72

Mme, 244 F .3d at 812 (quoting Allison, 151 F .3d at 415) (emphasis in original ; omissions in original) . "!n keeping with the requirement that monetary damages be incidental to equitable relief in Rule 23(b)(2) class act ions , the advisory committee's note to Rule 23 explains that certification under section (b)(2) is not proper in `cases in which the appropriate final relief relates exclusively or predominately to money damages ."' _Co oper, 390 F . 3d at 720-21 (emphasis in original) .
Applying the rule set forth in Cooopielerr,, it is clear that the monetary damages sought by Plaintiffs are not simply incidental to the injunctive relief sought by Plaintiffs . Indeed, Plaintiffs primarily seek monetary damages . Consequently, certification under Rule 23(b)(2) is inappropriate .
To the extent that Plaintiffs contend that the Court

AO 72A ( Re v .8/82 )

117

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 54 of 72

simply may certify only Plaintiffs' claims for injunctive relief
under Rule 23(b)(2), this approach also is inappropriate . As
another judge in this District has noted, the Seventh
Amendment may prohibit such an approach . Re i d , 205
F . R . D . at 686 . As the Rei d court observed :
The Seventh Amendment preserves the right to a jury trial "in Suits at common law ." Although the amendment specifically mentions suits at common law, the Supreme Court has made clear that the right to jury trial applies in any suit "in which legal rights [are] to be ascertained and determined, in contradistinction to those where equitable rights alone [are] recognized, and equitable remedies [are] administered ."

AO 7 2A (Rev . $ 18 2)

Id . (citations omitted) (alterations in original) . The Reid court concluded that a jury trial was required with respect to the plaintiffs ' cla i ms for damages because the parties in Reid had the right to a jury trial in a Title VII case
1 18

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 55 of 72

seeking both compensatory and punitive damages, and
because both sides had demanded a j ury tria l . Id . The
Re id court noted :
Many of the factual issues relevant to Plaintiffs' damages claims, however, are also relevant to Plaintiffs' equitable claims . As such, the litigants have the right to a determination of these issues by a single jury. Adjudication would therefore require one jury to resolve the many individual and case-specific issues relating to Plaintiffs' employment discrimination claims prior to any ruling by the court with regard to equitable remedies . The court finds that such a task would be overly cumbersome and would result in litigation characterized by confusion and incoherency .

205 F . R . D . at 686-87 . In the instant case, Plaintiffs have a right to a jury trial
on their claims for damages, and they have demanded a

AO 7 2A (Rev . 8 /82)

119

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 56 of 72

jury trial on those claims . (Compl . § X111 E (Prayer for Relief) .) Consequently, a jury trial is required with respect to Plaint iffs' cla i ms fo r damages . Here , as in Reid , many of the factual issues relevant to Plaintiffs' damages claims also are relevant to Plaintiffs' claim for injunctive relief, and the parties have the right to have a single jury determine those issues . The Court agrees with the Reid court that employing an approach whereby one jury would resolve all of the many individual and case-specific issues relating to Plaintiffs' claims before the Court issued a ruling as to equitable remedies would be overly cumbersome, confusing, and highly inefficient . The Court consequently declines to adopt the approach suggested by Pla i ntiffs .
Additionally, even if the named Plaintiffs were willing to forego class certification with respect to damages to pursue

A O 7 2A ( Rev . 6182 )

120

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 57 of 72

injunctive relief on behalf of the class, it is far from clear that the named Plaintiffs would represent the interests of the othe r class members adequately . _Cooper , 390 F . 3d at 721 . As the Eleventh Circuit recognized in Cooper, "the monetary damages requested might be of far greater significance than injunctive relief"for many of the class members, especially for those who no longer work for Defendant . Id . For those reasons , the Court will not certify a class only as to Plaintiffs ' claim for injunctive relief .
In sum , the Court fi nds that Rule 23 (b )(2 ) cert ification is inappropriate because Plaintiffs' claims for monetary damages are not simply incidental to Plaintiffs' claim for injunctive relief . The Court further concludes that certification of only Plaintiffs' claims for injunctive relief under Rule 23(b)(2) is i nappropriate. The Court therefore

AO 72A (Rev .8182)

121

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 58 of 72
denies Plaintiffs' request for certification under Rule

AO 72A (Rev .8182)

B . Rule 23(b)(3)
Rule 23 ( b)(3) raises two questions : (1) whether issues
of law or fact common to members of the class predominate
over questions affecting only individual members ; and (2)
whether a class action is superior to other available
methods for the fair and efficient adjudication of the
controversy . Fed . R . C i v . P . 23(b)(3) states :
The matters pertinent to the findings [of predominance and superiority] include : (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions ; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class ; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum ; (D)
122

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 59 of 72

the difficulties likely to be encountered in management of a class action .
Id . The Advisory Comm ittee' s notes emphasize that Rule 23(b)(3) is designed for cases " in wh i ch a class action would achieve economies of time , effort , and expense , and promote uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results ." Id . adv isory comm ittee' s notes to the 1966 Revision of Rule 23(b)(3) (reprinted in 39 F . R . D . 69 , 102- 03 (1966)). Before reaching these issues , however, the Court must identify the substantive law govern i ng Plaint i ffs' claims .
A. Substant ive Law Governing Cla i ms 1 . Federal RICO Cla i ms
The Eleventh Circuit set forth a thorough summary of

AO 72A (Rev .8/82)

1 23

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 60 of 72

the law governing Plaintiffs' federal RICO claims in its previous opinion in this case . In the interest of brevity and effi ci ency, the Court incorporates that portion of the Eleventh Circuit's opinion into this Order, and will not repeat that portion of the opinion, or set forth an entirely new section summarizing the applicable law governing Plaintiffs' RICO claims , in th is Order. Williams, 465 F . 3d at 1282-92 .
2 . Georgia RICO Claims Similarly , the Eleventh Circuit ' s previous opinion in this case sets forth a thorough summary of the law governing Pla i ntiffs ' Georgia RICO claims . In the interest of brevity and efficiency, the Court again incorporates that portion of the Eleventh C i rcuit' s opinion into this Order , rather than repeating that portion of the opinion or setting forth an entirely new section summarizing Georgia RICO law in this

AO 72 A ( Rev. 8/82 )

124

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 61 of 72

Order. Will i ams , 465 F . 3d at 1292-94 . B. Predominance "The Rule 23(b)(3) predominance inquiry tests whether
proposed classes are sufficiently cohesive to warrant adjud i cation by representation ." Amchem Prods . Inc. v . Windsor , 52 1 U . S . 591 , 623 (1997) . A p laintiff may satisfy this requirement by showing that issues subject to classwide proof predominate over issues requiring proof that is unique to the individual class members . Jackson v . Motel 6 Multipurpose, Inc ., 130 F . 3d 999 , 1005 ( 11th Cir. 1997) .
In deciding this question, the Court must keep in mind two related purposes of class action litigation : (1) promoting economies of ti me , effort , and expense ; and (2) providing individuals with relatively small claims the opportunity to assert their rights . Fed . R . Civ. P . 23(b) advi sory

AO 7 2A (Rev . 8 /82)

125

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 62 of 72

committee's notes to the 1966 Revision of Rule 23(b)(3) ; Amchem , 521 U . S . at 617 ("the Advisory Committee [in drafti ng Ru l e 23(b)(3)] had dom i nantly i n m i nd vindicati on of 'the rights of groups of people who individually would be without effective strength to bring their opponents into court at all "'} . If common questions do not predom inate , however, no economies will be achieved through the use of the class a cti on devi ce . Fed . R. Civ . P . 23(b )(3) advisory comm ittee ' s notes to the 1966 Revision of Rule 23(b)(3) .
The predominance requirement "does not require that all issues be common to a l l parties ," rather, it mandates that "'resolution of the common questions affect all or a substantial number of the class members ."' Watson v . Shell Oil Co ., 979 F . 2d 1014 , 1022 (5th Cir. 1992 ) ( quoti ng Jenki ns v . RaXmark Indus ., Inc ., 782 F . 2d 468 , 472 (5th Cir.

AO 72A ( Rev . 6/82)

126

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 63 of 72

1986)). "Whether an issue predominates can only be determined after considering what value the resolution of the class-wide issue will have in each class member's underlying cause of action ." Rutstein v . Axis Rent-A-Car Sys ., Inc ., 211 F . 3d 1228 , 1234 ( 11th Cir. 2000 ) (citing Amchem , 52 1 U . S . at 623 ) . The Eleventh C i rcuit has warned that "'serious drawbacks to the maintenance of a class action are presented where initial determinations, such as the issue of liability vel non, turn upon highly ind ividualized facts ."' Id . at 1235-36 (quoting McCarth Kleind i enst , 741 F . 2d 1406 , 1415 (D . C . Cir. 1 984 )) .
"Common issues may predominate when liability can be determined on a class -wi de basis , even when there are some i ndividualized damage issues ." In re Visa Check/Master Money Antitrust Litia ., 280 F . 3d 1 24 , 139 (2d

AO 72A ( Rev . 81 8 2)

127

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 64 of 72

Cir. 2001) (citing Bertull i v . Indep . Assn of Cont'f Pilots, 242 F .3d 290 , 2 90 ( 5th C i r . 2001 ) ; accord Ste rling v . Ve ls ico l Chem . Corp ., 855 F . 2d 1188 , 1197 (6th Cir . 1988) ("where the defendant's liability can be determined on a class-wide basis because the cause of the disaster is a single course of conduct which is identical for each of the plaintiffs, a class action may be the best suited vehicle to resolve such a controversy") (quoting in In re Teletron i cs Pacing Sys ., Inc ., 172 F . R . D . 271, 288 (S .D . Ohio 1997)) .
Although "the presence of commonal ity alone is not sufficient to fulfill Rule 23(b)(3) ` [w]hen common questions present a significant aspect of the case and they can be resolved for all members of the class in a single adjudication, there is clear justification for handling the dispute on a representative rather than on an individual

AO 72 A (Rev .8182)

128

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 65 of 72

basis ."' Hanlon v . Chrysler Corp ., 150 F . 3d 1011 , 1022 (9th C ir. 1998) (quot i ng 7A Wri ght , Miller & Kane , supra, § 1778 ) ; accord Mullen v . Treasure Chest Casino LLC, 186 F .3d 620 , 626 ( 5th Cir. 1999) ("` In order to ` predominate ,' common issues must constitute a significant part of the i ndi vidual cases ."') (quoting Jenkins v . Raymark Indus ., 782 F .2d 468, 472 (5th Cir . 1986)) . "Common issues will not predominate over i ndividual questions if, ` as a practica l matter, the resolut i on of . . . [an] overa rching common i ssue breaks down into an unmanageable variety of individual legal and factual i ssues ."' Cooper, 390 F . 3d at 72 2 (quoting Andrews v . Am . Tel . & Tel . Co ., 95 F . 3d 1014 , 1023 (11th Cir. 1996)) (omission and alteration in original) .
Here , the resolution of the common issues that Plaintiffs cla i m ex i st will , by necessity , break down into an

AO 72A (Rev .8/82)

129

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 66 of 72

unmanageable number of individual legal and factual issues . As previ ously noted , the evidence i n the record fails to support a determination that Defendant engaged in a relationship with the various temporary employment agencies at a corporate-wide level . Rather, the evidence indicates that : (1) the individual divisions, and, in many cases , the i nd ivi dual faciliti es , had d i scretion to determine whether to enter into relationships with temporary employment agencies, to determine which of the various temporary employment agencies to use , and to determine whether to use temporary labor at all ; (2) Defendant ' s corporate-level management had little control over the relationships between the divisions or facilities and the temporary employment agencies ; (3) many facilities may have chosen not to use temporary labor at all during the

AO 72A ( Re v, 8 182)

130

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 67 of 72

proposed class period ; (4 ) the d ivi si ons each operated the ir own hiring centers and made their own decisions with respect to employee hiring and discipline ; (5) the divisions, rathe r than Defendant ' s corporate management , established wages for their hourly employees ; and (6) the wages for the hourly employees differed from division to division , and , often , from faci l ity to faci l ity for the same position . To determine whether a RICO enterprise existed, the Court will have to examine each of the relationships between the divisions or facilities and the various temporary employment agencies . Additionally, although the Court need not , and does not , evaluate the mer its of Defendant ' s statute of limitations argument at this point, it is highly likely that the Court will have to engage in fact-specific inquiries as to each member of the class, or as to each facility or

AO 72A (Rev .8/82)

131

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 68 of 72

division, to evaluate this argument . Under those circumstances, the Court cannot find that common issues predominate over individual inquiries .
For the reasons discussed above, the Court finds that individual factual issues and inquiries predominate over any common issues that this case may present . The Court therefore concludes that Plaintiffs have failed to satisfy Rule 23(b)(3)'s predominance requirement . Class certification under Rule 23(b)(3) consequently is inappropriate .
C . Superiority Plaintiffs seeking certification of a class under Rule 23(b)(3) also must show " that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy ." Fed . R . Civ . P . 23(b)(3) . When determining whether a case satisfies the superiority

AO 72A (Rev .8/82)

132

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 69 of 72

requi rement , the Court should consider :
(A) the class members' interests in individually controlling the prosecution or defense of separate act i ons;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members ;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum ; and
(D) the likely difficulties in managing a class action .
Id . The Court discusses those factors in turn .
First, the individual class members likely have little, if
any , i nte rest in pursu i ng separate actions against
Defendant. Second , to the Cou rt' s knowledge , the i nstant
action and the related Carpenter action are the only cases
filed that involve allegations of Defendant ' s alleged hiring of

AO 72A ( Rev . 8 /8 2)

133

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 70 of 72

i llegal workers . Th i rd , this case has been pending before the Court for more than four years , and the Court already has supervised class discovery in the case and ruled on a Motion to Dismiss . Defendant also has its headquarters in this Division, and many of the potential class members reside in or near this Division . Under those circumstances, these three factors counsel in favor of finding that Plaintiffs have satisfied the superiority requirement .
The fourth factor , howeve r, t i ps the scales i n favor of concluding that Plaintiffs have failed to satisfy the superiority requirement . As previously noted , resolution of the issues involved in this case will, by necessity, break down into an unmanageable number of individual legal and factual i ssues . Given th is concern , and given the Cou rt' s finding that common issues do not predominate , the Court

AO 7 2A (Rev . 8182 )

134

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 71 of 72
concludes that a class action is not superior to other available methods for adjudicating this controversy . The Court therefore finds that Plaintiffs have failed to satisfy the superiority requirement of Rule 23(b)(3) . The Court consequently cannot certify this case as a class action under Rule 23(b)(3) .
135
AO 72 A (Re v .8/82)

Case 4:04-cv-00003-HLM Document 190-2 Filed 03/03/2008 Page 72 of 72
V . Conclusion ACCORDINGLY, the Court DENIES Plaintiffs' Motion
for Class Certification [174] . Th is Order is not intended for p ubli cation .'
IT IS SO ORDERED, this the ~ day of March, 2008 .
UNITED1 STATE'$ DIS-FRIrY J1 JDGE

AO 72A (Rev .8/82)

'The Court has learned that certain of its Orders in other cases are available on Westlaw . The Court did not authorize the publicati on of many of those Orders, and the Court and its staff were not contacted prior to the publication of many of those Orders . The Court does not routinely make its Orders available on Westlaw or LEXIS , and would not ordinarily have chosen to publish many of the Orders attributed to th i s Court that are now available on Westlaw. The Court does not intend to author i ze the instant Order for publicat i on , and expects counsel to abide by this decision . The Court expects counsel or ind i viduals who seek to publish the Court' s Orders to consult the Court prior to sending the Orders to Westlaw, LEXIS , or any other sim i lar legal related publisher .
136

 
 Case 4:04-cv-00003-HLM Document 192 Filed 03/26/08 Page 1 of 2

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA
ROME DIVISION

Shirley Williams, Gale Pelfrey, Bonnie Jones, and Lora Sisson, individually and on behalf of a class,

Plaintiffs,

v.

CIVIL ACTION FILE

NO. 4:04-CV-0003-HLM

Mohawk Industries, Inc. Defendant.

ORDER This case is before the Court on Plaintiffs' Consent Motion to Stay Pending Resolution of Plaintiffs' Rule 23(F) Petition [191].

~A072A
(Rev. 8/82)

Case 4:04-cv-00003-HLM Document 192 Filed 03/26/08 Page 2 of 2
Plaintiffs request the Court to stay all proceedings in this action pending the resolution of Plaintiffs' petition for appellate review of the Court's March 3, 2008, Order regarding class certification. According to Plaintiffs, Defendant has consented to and does not oppose the Motion.
For the reasons set forth in Plaintiffs' Motion, the Court finds that the stay requested is warranted. The Court therefore GRANTS Plaintiffs' Consent Motion to Stay Pending Resolution of Plaintiffs' Rule 23(F) Petition [191 ].
J...b v- IT IS SO ORDERED, this the day of March,
2008.
2
~A072A
(Rev. 8/82)

 
 Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 1 of f2tl4ED IN CLERK'S OffiCE
U.S.D.C. Rome

United States Court of Appeals

For the Eleventh Circuit

JUN 2 9 2009

_ _ _ _ _ _ _ _ _ _----.:;.....-.

J. cR~.: ;.;.I~.~E-S-· ~~2~: ..,4rlRL...,·

No. 08-13446

FILED

[)

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

District Court Docket No. 04-00003-CV-HLM-4

May 28, 2009
THOMAS K. KAHN
 CLERK


SHIRLEY WILLIAMS,
 GALE PELFREY,
 BONNIE JONES,
 LORA SISSON, individually
 and on behalf of a class,


Plaintiffs-Appellants,

versus

MOHAWK INDUSTRIES, INC.,

Defendant-Appellee.

Appeal from the United States District Court

j

for the Northern District of Georgia

JUDGMENT

It is hereby ordered, adjudged, and decreed that the attached opinion included herein by reference, is entered as the judgment of this Court.

\c~..S\.lE.D AS MANDA".,..~
JUN 262009

Entered: May 28, 2009 For the Court: Thomas K. Kahn, Clerk
By: Clark, Djuanna

Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 2 of 24

Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 3 of 24

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCDI


No. 08-13446
N
D. C. Docket No. 04-00003-CV-HLM-4
SHIRLEY WILLIAMS,
 GALE PELFREY,
 BONNIE JONES,
 LORA SISSON, individually
 and on behalf of a class,


MOHAWK INDUSTRIES, INC.,

versus

Plaintiffs-Appellants, Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Georgia
(May 28, 2009)
Before BARKETT, PRYOR and FARRIS,* Circuit Judges.
*Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting by designation.

Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 4 of 24
PRYOR, Circuit Judge: This appeal concerns whether the district court abused its discretion when it
denied a motion to certify a class action for employees of Mohawk Industries who complain that Mohawk engaged in racketeering activity by hiring illegal aliens and depressing the employees' wages. This appeal is the third time that our Court has considered issues in this litigation. Williams v. Mohawk Indus., Inc. (Mohawk I), 411 F.3d 1252 (11th Cir. 2005) (per curiam); Williams v. Mohawk Indus .. Inc. (Mohawk II), 465 F.3d 1277 (11th Cir. 2006) (per curiam). We conclude that the district court abused its discretion when it denied the employees' motion for class certification. The district court erred when it ruled that the employees' complaint fails to present issues of law or fact common to the class, Fed. R. Civ. P. 23(a)(2), and when it ruled that the claims of the proposed representatives are not typical of the claims of the absent class members, id. (a)(3). Those errors also led the district court to misapply the standard for determining whether the employees may maintain a class action for compensatory relief, id. (b)(3), and a hybrid class for injunctive relief, id. (b)(2). We reverse and remand for further proceedings.
I. BACKGROUND Our discussion of the background is divided in two parts. First, we discuss the course of the litigation before the employees moved to certify a class action.
2


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 5 of 24
Second, we discuss the employees' motion for class certification and the denial of that motion by the district court.
A. The Course of the Litigation On January 6, 2004, current and former employees of Mohawk who worked for hourly wages at various facilities in northern Georgia filed a complaint that Mohawk engaged in a pattern of racketeering activity prohibited by the Racketeer Int1uence and Corrupt Organizations Act, 18 U.S.C. § 1962(c), by hiring and harboring illegal aliens in violation of the Immigration and Nationality Act, 8 U.S.C. §§ 1324(a)(l)(A)(iii), (a)(1)(A)(iv), (a)(3)(A). The employees alleged that Mohawk formed an enterprise with various temporary employment agencies to hire illegal aliens and depress wages. The employees alleged that they were harmed by the racketeering activity of Mohawk because their wages were depressed. The employees also alleged that Mohawk violated the Georgia statute that prohibits racketeering activity, Ga. Code Ann. § 16-14-4(a), (c), by committing various predicate acts involving fraud and misuse of visas, 18 U.S.C. §§ 1546(a), (b), and that Mohawk was unjustly enriched by its criminal activities under the law of Georgia. Mohawk moved to dismiss the employees' complaint for failure to state a claim, Fed. R. Civ. P. 12(b)(6). The district court granted the motion as to one
3


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 6 of 24
claim of unjust enrichment based on the alien workers' hesitation to bring worker's compensation claims, but denied the motion as to all other claims. At the request of Mohawk, the district court certified the order for an interlocutory appeal. We affirmed the decision of the district court that the employees stated claims under the federal and Georgia RICO statutes, but we reversed the decision that the employees stated a separate claim for unjust enrichment about agreed-upon wages. Mohawk 1,411 F.3d at 1266.
Mohawk petitioned the Supreme Court for a writ of certiorari and raised two questions for review: (l) whether a defendant corporation and its agents may constitute an enterprise under RICO; and (2) whether the employees had stated a claim that the alleged practices of Mohawk proximately caused injuries to business property in the form of depressed wages. The Supreme Court granted certiorari as to the first question, but then dismissed the petition as improvidently granted and remanded to our Court for further consideration in the light of Anza v. Ideal Steel Supply Corporation, 547 U.S. 451, 126 S. Ct. 1991 (2006). Mohawk Indus.. Inc. v. Williams, 547 U.S. 516,126 S. Ct. 2016 (2006). We again concluded that the claims of unjust enrichment failed and that the employees stated claims of racketeering under state and federal statutes, and we remanded to the district court for further proceedings. Mohawk II, 465 F.3d at 1295.
4


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 7 of 24
B. The Class Certification Decision After discovery commenced, the employees moved to certify the following class of lawful employees of Mohawk in North Georgia: All persons legally authorized to be employed in the United States who are or have been employed in hourly positions by Mohawk Industries, Inc., its subsidiaries or affiliates in Georgia at any time from January 5, 1999 to the present, other than Excluded Employees. Excluded Employees are employees whose employment at Mohawk has been limited to: Dal-Tile, Unilin, or any Mohawk facility or facilities in Milledgeville, Dublin, Tifton, Norcross, Kennesaw or Atlanta, Georgia. The employees sought certification of one of their claims under Georgia law, Ga. Code. Ann. § 16-14-4(a), for injunctive relief under Federal Rule of Civil Procedure 23(b)(2), and sought certification of all of their claims under Rule 23(b)(3). The employees alleged several common questions when they sought certification, including whether "Mohawk conducted or participated, directly or indirectly, in the conduct of an enterprise's affairs," whether "Mohawk engaged in a pattern of racketeering activity," and whether "Mohawk engaged in a pattern of racketeering activity .... [or] a conspiracy to violate § 16-14-4(a) of the Georgia RICO statute." Mohawk argued that its hiring and wage-setting practices were decentralized and differed significantly over time, that there was no evidence of a
5


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 8 of 24
single enterprise or conspiracy, and that proof of injury was not possible. The employees responded that "Mohawk's decentralization mantra" was irrelevant to the commonality analysis because the employees had alleged common questions for which they would present common proof.
The employees also argued that the claims of the named plaintiffs were typical: "The Named Plaintiffs' claims and the claims of the class members arise out of the same 'course of conduct' (the operation and management of an enterprise through which Mohawk hires and harbors illegal workers) and 'the same legal theory' (that this unlawful conduct depresses wages)." Mohawk responded that the claims of plaintiffs Jones and Pelfrey were not typical because Jones never worked at a Mohawk location that used temporary labor and Pelfrey was a former employee. The employees responded that Jones's claim was typical because her allegation, like the allegation of the class, was that the illegal hiring by Mohawk depressed all the wages of legal employees, regardless of location.
The employees also argued that the scheme by Mohawk to hire and harbor illegal workers satisfied the requirement that a defendant "has acted ... on grounds that apply generally to the class," Fed. R. Civ. P. 23(b)(2). Mohawk argued against certification under subsection (b)(2) on the ground that the damages sought by the employees were not incidental to their claim for equitable relief. The employees
6


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 9 of 24
responded that they were seeking certification of a hybrid class for only injunctive relief under subsections (b)(2) and (c)(4), and that class would be separate from the class for which they were seeking monetary damages under subsection (b)(3).
The employees argued that the common issues whether Mohawk conducted the affairs of an enterprise, engaged in a pattern of racketeering activity, and participated in a conspiracy, and whether and to what extent the class suffered injury predominated because those issues would have to be resolved in every class member's individual action. Mohawk argued that hiring and wage-setting differed across the class, there was no evidence of a single enterprise or conspiracy, there was no common method of proving injury or damages, and defenses based on statutes of limitation would require individual determinations. The employees responded that any hiring and wage discretion did not negate the existence of common questions, arguments about the existence of an enterprise and damages were premature arguments about the merits of their complaint, and the employees sought only damages incurred during the limitations period.
The district court denied class certification. The district court determined that the employees satisfied the requirements of numerosity, Fed. R. Civ. P. 23(a)(l), and adequacy of representation, id. (a)(4), but that the employees did not satisfy the requirements of commonality, id. (a)(2), and typicality, id. (a)(3). The
7


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 10 of 24
district court agreed with Mohawk that the employees had not satisfied the commonality requirement because "[c]ontrary to Plaintiffs' arguments that Defendant engaged in one grand conspiracy to employ illegal workers, the evidence in the record indicates that Defendant's operations, including its use of temporary employment agencies and wage-setting practices, are extremely decentralized." The district court also agreed with Mohawk that neither of the proposed class representatives presented claims typical of the class because Jones never worked at a Mohawk facility that used temporary labor and because both Jones and Pelfrey "worked at only a handful of [Mohawk's] facilities."
The district court agreed with Mohawk that a class could not be certified under subsection (b)(2). The district court concluded that the employees' demand for monetary damages was not incidental to their demand for injunctive relief. The district court also declined to certify a "hybrid class" for both monetary and injunctive relief on the ground that having one jury "resolve all of the many individual and case-specific issues relating to Plaintiff's claims before the Court issued a ruling as to equitable remedies would be overly cumbersome, confusing, and highly inefficient."
The district court refused to certify a class under Rule 23(b)(3) on the grounds that common issues did not predominate and the class action would not be
8


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 11 of 24
superior to other available methods of relief. The district court again relied on the corporate structure of Mohawk when it determined that class litigation would present an "unmanageable number of individual legal and factual issues" because "the evidence in the record fails to support a determination that Defendant engaged in a relationship with the various temporary employment agencies at a corporate­ wide level." The district court determined that the first three factors in the superiority analysis weighed in favor of the employees, but the district court determined that the "manageability" factor "tips the scales in favor of concluding that Plaintiffs have failed to satisfy the superiority requirement. ... [because] [a]s previously noted, resolution of the issues involved in this case will, by necessity, break down into an unmanageable number of individual legal and factual issues."
The district court did not evaluate the employees' expert testimony. The district court concluded that arguments by Mohawk attacking the experts were "essentially ... [evidentiary] challenges or challenges to the merits of the opinions offered by Plaintiffs' experts." The district court determined that "the expert evidence presented by Plaintiffs is sufficiently probative to be useful to the Court in determining whether Plaintiffs have satisfied the requirements for class certification."
II. STANDARD OF REVIEW
9


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 12 of 24
We review a denial of class certification for an abuse of discretion. Heffner v. Blue Cross & Blue Shield of Ala., Inc., 443 F.3d 1330, 1337 (lIth Cir. 2006). "[A]n abuse of discretion occurs if the judge fails to apply the proper legal standard or to follow proper procedures in making the determination, or makes findings of fact that are clearly erroneous." Birmingham Steel Corp. v. TVA, 353 F.3d 1331, 1335 (l1th Cir. 2003) (internal quotation marks and alterations omitted).
III. DISCUSSION Our discussion is divided in four parts. First, we address the employees' argument that the district court abused its discretion when it determined that the employees did not present a question of law or fact that was common to all members of the class under Rule 23(a)(2). Second, we address the employees' argument that the district court abused its discretion when it determined that the claims of the proposed class representatives were not typical of the claims of the class under Rule 23(a)(3). Third, we address the employees' argument that the district court abused its discretion when it determined that the questions of law or fact common to all class members do not predominate over any questions affecting individual members and that a class action is not superior under Rule 23(b)(3). Fourth, we address the employees' argument that the district court abused its
10


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 13 of 24
discretion when it declined to certify a hybrid class for injunctive relief under Rule 23(b)(2) and (c)(4).
A. The District Court Abused Its Discretion When It Determined That the Employees Failed To Present Questions of Law or Fact Common to All Members
of the Class. A class may be certified only if "there are questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). "Under the Rule 23(a)(2) commonality requirement, a class action must involve issues that are susceptible to class-wide proof." Murray v. Auslander, 244 F.3d 807, 811 (11th Cir. 2001). Commonality requires "that there be at least one issue whose resolution will affect all or a significant number of the putative class members." Stewart v. Winter, 669 F.2d 328, 335 (5th Cir. 1982) (footnote omitted). The employees presented two overarching questions that are common to all members of the class: (1) whether "Mohawk conducted or participated, directly or indirectly, in the conduct of an enterprise's affairs" under the federal RICO statute; and (2) whether "Mohawk engaged in a pattern of racketeering activity .... [or] a conspiracy to violate § 16-14-4(a) of the Georgia RICO statute." Under section 1962(c) of the federal RICO statute, the employees "'must satisfy four elements of proof: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.'" Mohawk 1,411 F.3d at 1256 (quoting Jones v. Childers, 18 F.3d 899,
11


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 14 of 24
910 (1Ith Cir. 1994)) (internal quotation marks omitted). As to elements one and two, all the employees must prove that Mohawk "participate[d] in the operation or management of the enterprise," Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S. Ct. 1163,1173 (1993). As to elements three and four, all the employees must prove that Mohawk engaged in a pattern of racketeering activity by hiring and harboring illegal aliens. The law of Georgia makes it "unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money." Ga. Code Ann. § 16-14-4(a). The Georgia RICO statute does not require proof of an enterprise, but it requires "'proof that the defendant committed predicate offenses ... at least twice. '" Mohawk 1,411 F.3d at 1264 (quoting Cobb County v. Jones Group. P.L.C., 218 Ga. App. 149, 154,460 S.E.2d 516,521 (1995)). All the employees allege and must prove under Georgia law that Mohawk violated federal criminal prohibitions of fraud and misuse of visas, 18 U.S.C. § 1546, which is a predicate offense under the law of Georgia, Ga. Code. Ann. § 16-14-3(9). These are all common questions because each employee would have to prove these elements of their claims of racketeering activity under federal and state law to establish the liability of Mohawk.
12


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 15 of 24
We agree with the employees that the district court erred when it relied on our precedents about the certification of a class action for a complaint of employment discrimination under Title VII of the Civil Rights Act of 1964, 42 u.s.C. § 2000e. In Klay v. Humana, Inc., 382 F.3d 1241, 1257 (lIth Cir. 2004), we explained that claims under RICO, in contrast with claims under Title VII, are often susceptible to common proof:
RICO claims are not simply individual allegations of underpayments lumped together, and the allegation of an official corporate policy or conspiracy is not simply a piece of circumstantial evidence being used to support such individual underpayment claims. Instead, the very gravamen of the RICO claims is the "pattern of racketeering activities" and the existence of a national conspiracy . . .. These are not facts from which jurors will be asked to infer the commission of wrongful acts against individual plaintiffs; these very facts constitute essential elements of each plaintiff's RICO claims. The district court relied on the decentralized decisions of Mohawk about hiring and wages to conclude that the employees' complaint does not present questions common to the class, but the employees' complaint is not dependent on proof of individual acts of disparate treatment as often is the case under Title VII. We agree with the employees that their complaint raises questions that are common to all members of the class. These common questions are sufficient to satisfy the low hurdle of Rule 23(a)(2). Whether Mohawk conducted the affairs of an enterprise through a pattern of racketeering activity that depressed the wages of
13


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 16 of 24
all employees is a question common to each employee's complaint. The district court abused its discretion when it ruled that the employees' complaint did not present questions of law or fact common to the proposed class.
B. The District Court Abused Its Discretion When It Determined That the Named Plaintiffs Did Not Present Claims that Were Typical of the Class.
A class may be certified only if "the claims or defenses of the representative parties are typical of the claims or defenses of the class." Fed. R. Civ. P. 23(a)(3). The claim of a class representative is typical if "the claims or defenses of the class and the class representative arise from the same event or pattern or practice and are based on the same legal theory." Kornberg v. Carnival Cruise Lines. Inc., 741 F.2d 1332, 1337 (11th Cir. 1984). "A class representative must possess the same interest and suffer the same injury as the class members in order to be typical under Rule 23(a)(3)." Auslander, 244 F.3d at 811. "The typicality requirement may be satisfied despite substantial factual differences ... when there is a strong similarity of legal theories." Id. (internal quotation marks omitted).
We agree with the employees that the district court abused its discretion when it ruled that the claims of Jones and Pelfrey were not typical of the claims of absent class members. Jones and Pelfrey allege that Mohawk conducted the affairs of an enterprise by hiring illegal labor, which depressed the employees' wages. This claim is typical of the claims of other members of the class because the claims
14


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 17 of 24
are based on the same legal theory. Because the employees' claim is that the hiring of illegal aliens by Mohawk depressed the wages of all legal hourly workers regardless of location, whether the two class representatives worked at a few locations is irrelevant. Although this legal theory may ultimately not be sustained by the evidence, it is typical of the class of which Jones and Pelfrey are representative.
C. The District Court Abused Its Discretion When It Considered Whether To Certify a Class Action Under Rule 23(b)(3).
A class action may be certified under subsection (b)(3) if "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3). "Common issues of fact and law predominate if they 'ha[ve] a direct impact on every class member's effort to establish liability and on every class member's entitlement to injunctive and monetary relief. '" Klay, 382 F.3d at 1255 (quoting Ingram v. Coca-Cola Co., 200 F.R.D. 685, 699 (N.D. Ga. 2001)) (alteration in original). "'[S]erious drawbacks to the maintenance of a class action are presented where initial determinations, such as the issue of liability vel non, turn upon highly individualized facts. '" Rutstein v. Avis Rent-A-Car Sys.. Inc., 211 F.3d 1228, 1235-36 (lith Cir. 2000) (quoting McCarthy v. Kleindienst,
15


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 18 of 24
741 F.2d 1406, 1415 (D.C. Cir. 1984)). "[T]he Rule requires a pragmatic assessment of the entire action and all the issues involved." 5 James Wm. Moore et aI., Moore's Federal Practice § 23.45[1], at 23-217 (3d ed. 2008). "Where, after adjudication of the classwide issues, plaintiffs must still introduce a great deal of individualized proof or argue a number of individualized legal points to establish most or all of the elements of their individual claims, such claims are not suitable for class certification under Rule 23(b)(3)." Klay, 382 F.3d at 1255. "Even if Rule 23(a)'s commonality requirement may be satisfied ... , the predominance criterion is far more demanding." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623-24, 117 S. Ct. 2231,2250 (1997).
In Klay, we explained that "the common issues of fact [in a RICO action], concerning the existence of a[n enterprise and] a pattern of racketeering activity .. . are quite substantial. They would tend to predominate over all but the most complex individual issues." 382 F.3d at 1258-59. "It is primarily when there are significant individualized questions going to liability that the need for individualized assessments of damages is enough to preclude 23(b)(3) certification." Id. at 1260.
Although "a court should not determine the merits of a claim at the class certification stage, it is appropriate to 'consider the merits of the case to the degree
16


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 19 of 24
necessary to determine whether the requirements of Rule 23 will be satisfied. '" Heffner, 443 F.3d at 1337 (quoting Valley Drug Co. v. Geneva Pharm., Inc., 350 F.3d 1181,1188 n.15 (lIth Cir. 2003)). A district court must consider, for example, how the class will prove causation and injury and whether those elements will be subject to class-wide proof:
[T]he issue of liability ... includes not only the question of violation, but also the question of fact of injury, or impact. ... In making the determination as to predominance, of utmost importance is whether "impact" should be considered an issue common to the class and subject to generalized proof, or whether it is instead an issue unique to each class member, and thus the type of question [that] might defeat the predominance requirement of Rule 23(b)(3). Alabama v. Blue Bird Body Co., 573 F.2d 309, 320 (5th Cir. 1978). "[I]f generalized proof of impact is ... improper, then the district court must carefully consider whether this requirement of individual proof does not defeat the class certification on either predominance or manageability grounds." Id. at 324. Certification under Rule 23(b)(3) also requires that the class action device "is superior to other available methods for fairly and efficiently adjudicating the controversy." "In many respects, the predominance analysis ... has a tremendous impact on the superiority analysis ... for the simple reason that, the more common issues predominate over individualized issues, the more desirable a class action lawsuit will be as a vehicle for adjudicating the plaintiffs' claims." Klay, 382 F.3d
17


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 20 of 24
at 1269. Rule 23(b)(3) provides what the Advisory Committee Notes describe as a
non-exhaustive list of four factors that are pertinent to the finding of superiority:
(A) the class members' interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action.
Fed. R. Civ. P. 23(b)(3).
Although the district court concluded that the employees' proposed class
action would be unmanageable, we have explained two reasons that the factor of
manageability is ordinarily satisfied so long as common issues predominate over
individual issues:
First, we are not assessing whether this class action will create significant management problems, but instead determining whether it will create relatively more management problems than any of the alternatives . . .. Second, where a court has already made a finding that common issues predominate over individualized issues, we would be hard pressed to conclude that a class action is less manageable than individual actions.
Klay, 382 F.3d at 1273. If a district court determines that issues common to all
class members predominate over individual issues, then a class action will likely be
more manageable than and superior to individual actions.
The district court failed to conduct a rigorous analysis of predominance and
superiority. The district court instead repeated its erroneous determination about a
18


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 21 of 24
lack of common issues. The district court stated, without any meaningful explanation, that the decentralized decisions of Mohawk regarding hiring and wages of hourly employees would mean that any common issues would "by necessity, break down into an unmanageable number of individual legal and factual issues." Because the district court abused its discretion by repeating its error about issues common to all class members, the district court did not and could not conduct the correct analysis to determine whether questions affecting only individual members predominated over questions common to all members of the class.
The employees argue that their injury is subject to common proof because every employee was damaged by the illegal hiring by Mohawk, irrespective of an employee's job description or location, but the district court failed to address the employees' argument about classwide proof. The district court instead accepted the employees' expert testimony without examining it or explaining its affect on the predominance analysis. On remand, the district court must test and evaluate the employees' argument that their injury is subject to common proof.
We remand for the district court to conduct a pragmatic assessment of whether common issues predominate over individual issues and whether a class action is superior to other forms of relief under Rule 23(b)(3). Because the denial
19


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 22 of 24
of class certification by the district court turned on the erroneous premise that there were no questions common to the class, the district court failed to consider whether the common issues predominated over individual issues and whether a class action was superior to individual actions. See Wooden v. Bd. of Regents of Univ. Sys. of Ga., 247 F.3d 1262, 1288 (lIth Cir. 2001) (holding that a denial of class certification should be vacated and remanded "to the extent it turned on the [incorrect] notion that Green could not serve as a class representative"). These are questions "for the district court to address in the first instance, not this Court ...."
D. If It Certifies a Class Under Rule 23(b)(3), the District Court Must Determine
 Whether Certification ofa Hybrid Class Under Rule 23(b)(2) and (c)(4) Is
 Appropriate.
 The employees admit that they are not entitled to maintain a class action
under Rule 23(b)(2) for most of their claims. Certification of a class under subsection (b)(2) is appropriate when "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." Fed. R. Civ. P. 23(b)(2). Monetary damages are "legal relief that can only be awarded in a Rule 23(b)(2) class action when the damages sought are incidental to the claims for equitable and declaratory relief." Cooper v. Southern Co., 390
20


Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 23 of 24
F.3d 695, 720 (lIth Cir. 2004) (internal quotation marks omitted). "[T]he advisory committee's note to Rule 23 explains that certification under section (b)(2) is not proper in 'cases in which the appropriate final relief relates exclusively or predominantly to money damages.'" Id. at 721 (quoting Fed. R. Civ. P. 23(b)(2), advisory committee's note (emphasis added)). It is undisputed that the employees seek primarily treble compensatory damages and punitive damages.
The employees seek a class for injunctive relief, under Rule 23(b)(2), as to one of their claims under state law, Ga. Code. Ann. § 16-14-4(a), and the employees argue that the district court should certify a hybrid class for that claim under Rule 23(c)(4), which permits certification "with respect to particular issues." Fed. R. Civ. P. 23(c)(4). We have explained that a "hybrid class action" may be certified in some cases:
"It is possible to create hybrids in given cases. Since in theory there should be no hard requirement that (b)(2) be mutually exclusive, and since subpart (c)(4)(A) allows an action to be maintained 'with respect to particular issues,' the fact that damages are sought as well as an injunction or declaratory relief should not be fatal to a request for a (b)(2) suit, as long as the resulting hybrid case can be fairly and effectively managed." Holmes v. Cont'l Can Co., 706 F.2d 1144, 1158 n.10 (lIth Cir. 1983) (quoting 3B J. Moore, Moore's Federal Practice 123.40[4], at 23-308 (2d ed. 1981)). . /As :wjththe analysis of predominance, the flawed analysis of commonality
21

Case 4:04-cv-00003-HLM Document 206 Filed 06/29/09 Page 24 of 24

by the district court infected its consideration of a hybrid class action. If the

district court determines that common issues predominate and certifies a class for

damages under subsection (b)(3), the district court must consider whether to certify

a class under subsection (b)(2) with respect to the employees' claim for equitable

relief. The district court declined to certify a hybrid class because allowing many

individual suits for liability and monetary relief followed by judicial resolution of

class-wide equitable relief would be "overly cumbersome, confusing, and highly

inefficient." This inefficiency dissolves if the district court determines common

issues predominate and certifies a class under subsection (b)(3). The definition of

the hybrid class under subsection (b)(2) would be confined to current employees of

Mohawk because only those members of the employees' proposed class have

standing to seek injunctive relief. See Nix v. Fulton Lodge No.2 of the Int'l Ass'n

of Machinists & Aerospace Workers, 452 F.2d 794, 797 (5th Cir. 1971). If the

employees succeed in establishing the liability of Mohawk in their suit for damages

under subsection (b)(3), the district court would consider whether to fashion

equitable relief under subsection (b)(2).

It IV. CONCLUSION
We VACATE the decision of the district court denying class certificatio~

t !4 7;1Ai and REMAND for further proceedings consistent with this opinion/

,! I
( :' / 'I
(~

Cift TUru.Se. C ,., of

afs,

22

- :,?venrp . [­

By' - -- ~ - ~ •.: \ .

!

) DePutYt;lerk .- Atlanta; Gecrgia

 
 Case 4:04-cv-00003-HLM Document 225 Filed 04/12/10 Page 1 of 7

IN THE UNITED STATES DISTRICT COURT
 FOR THE NORTHERN DISTRICT OF GEORGIA

ROME DIVISION


SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES and LORA SISSON, individually and on behalf of a class,
Plaintiffs,
vs.
MOHAWK INDUSTRIES, INC.,
Defendant.

) ) ) Civil Action ) File No. 4:04-cv-03-HLM ) ) CLASS ACTION ) ) ) ) ) )

i'\..uruCJ;~""1 ORDER CERTIFYING SETTLEMENT CLASS AND PRELIMINARILY APPROVING SETTLEMENT
AGREEMENT AND PROVIDING FOR NOTICE

Plaintiffs Bonnie Jones and Gale Pelfrey, defendant Mohawk Industries, Inc.

and Mohawk's insurance carrier, Zurich American Insurance Co., have entered

into a Settlement Agreement which, if approved by this Court, will resolve this

class action. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, plaintiffs

applied for an order preliminarily approving the Settlement Agreement.

Having reviewed the Settlement Agreement, the Court finds that Plaintiffs'

Motion for Preliminary Approval should be GRANTED.

726672.1
1

Case 4:04-cv-00003-HLM Document 225 Filed 04/12/10 Page 2 of 7
NOW, THEREFORE, IT IS HEREBY ORDERED that: 1. The Court preliminarily approves the Settlement Agreement as fair, just, reasonable and adequate as to the members of the Settlement Class, subject to further consideration at the Settlement Fairness Hearing described below. 2. Pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure, and for the purposes of the Settlement only and contingent upon the Settlement being finally approved, this Action is hereby certified as a class action on behalf of: All persons legally authorized to be employed in the United States who are or have been employed in hourly positions by Mohawk Industries, Inc., its subsidiaries or affiliates in Georgia at any time from January 1, 1999 to December 31, 2009 (the "Class Period"), other than an Excluded Employee (the "Class" or the "Class Definition"). An "Excluded Employee" is an employee whose employment at Mohawk has been limited to: Dal-Tile, Unilin, or Mohawk facilities in Milledgeville, Dublin, Tifton, Norcross, Kennesaw, or Atlanta, Georgia. 3. For the purposes of the Settlement, the Court finds that the requirements of a class action under Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure have been satisfied in that: (a) the number of Settlement Class Members is so numerous that joinder of all members thereof is impracticable; (b) there are questions of law and fact common to the Settlement Class; (c) the claims
of the named representatives are typical of the claims of the Settlement Class they
726672.1
2

Case 4:04-cv-00003-HLM Document 225 Filed 04/12/10 Page 3 of 7
seek to represent; (d) the named plaintiffs will fairly and adequately represent the interests of the Settlement Class; (e) the questions of law and fact common to the members of the Settlement Class predominate over any questions affecting only individual members of the Settlement Class; and (1) a class action is superior to other available methods for the fair and efficient adjudication of the controversy.
Specifically, the Court finds that the issue of whether the defendant engaged in a pattern of racketeering activity in the manner alleged in the Complaint raises factual and legal questions that are common to all Settlement Class Members. The named plaintiffs are current and former hourly Mohawk employees who, like the Settlement Class Members, worked in Mohawk's non-excluded facilities in north Georgia. Like the Settlement Class Members, Pelfrey and Jones were paid hourly wages that the Complaint alleges were depressed by the conduct alleged therein. Accordingly, the claims of the named plaintiffs are typical of the claims of the Settlement Class. The Court finds no conflict or other reason why the named plaintiffs are not adequate to represent the Settlement Class, and the Court is satisfied that plaintiffs' counsel are adequate and competent to serve as class counsel. Thus, the requirements of Rule 23(a) are satisfied here. See Williams v. Mohawk Industries, Inc., 568 F.3d 1350, 1355-57 (11 th Cir. 2009).
726672.1
3

Case 4:04-cv-00003-HLM Document 225 Filed 04/12/10 Page 4 of 7
The Court further finds that the requirements of23(b)(3) are satisfied. In the settlement context, the "Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." Amchem Prods., Inc. v. Windsor, 521 U.S. 591,623 (1997). However, the "district court need not inquire whether the case, if tried, would present intractable management problems, for the proposal is that there be no trial." Id. at 620. Thus, any manageability issues that might or might not arise at trial from proving injury and damages on behalf of the class members are not relevant to certification of a settlement class.
4. For the purposes of the Settlement, plaintiffs Bonnie Jones and Gale Pelfrey are certified as Class Representatives.
5. The Court hereby appoints the following attorneys as Class Counsel for the Settlement Class:
Bobby Lee Cook
 Cook & Connelly
 9899 Commerce Street
 P.O. Box 370
 Summerville, GA 30747

726672.1
4

Case 4:04-cv-00003-HLM Document 225 Filed 04/12/10 Page 5 of 7
John E. Floyd Joshua F. Thorpe Ronan P. Doherty Nicole G. Iannarone Bondurant, Mixson & Elmore, LLP 3900 One Atlantic Center 1201 West Peachtree Street, N.W. Atlanta, Georgia 30309-3417
Howard Foster
 Foster P.C.
 55 W. Wacker Drive
 Suite 1400
 Chicago, IL 60601

William V. Johnson
 Johnson & Bell, Ltd
 33 West Monroe Street
 Chicago, Illinois 60603

Matthew Thames
 1419 Chattanooga Ave.
 P.O. Box 2203
 Dalton, GA 30722

6. The Court appoints Settlement Services, Inc. as the Claims
Administrator.
7. The Court approves the form and substance of the Notice (attached to
the Settlement Agreement as Exhibit A). The Claims Administrator shall cause the
Notice, substantially in the form attached hereto, to be mailed out in accordance
with the Settlement Agreement.
726672.1
5

Case 4:04-cv-00003-HLM Document 225 Filed 04/12/10 Page 6 of 7
8. The form and content of the Notice and the method set forth herein to notify members of the Settlement Class of the Settlement Agreement, its terms and conditions, and the deadlines and procedures for filing claims, opting out of the class or objecting to the Settlement Agreement, meet the requirements of Rule 23 of the Federal Rules of Civil Procedure and due process. The Court finds that mailing the Notice constitutes the best notice practicable under the circumstances, and that this method is reasonably calculated, under the circumstances, to apprise members of the Settlement Class of the pendency of this action and their right to object or exclude themselves from the Settlement, and shall constitute due and sufficient notice to all persons and entities entitled thereto.
9. A hearing pursuant to Rule 23(e) of the Federal Rules of Civil Procedure shall be held for the following purposes:
(a) to finally determine whether the Settlement is fair, reasonable, and adequate, and should be approved by the Court;
(b) to consider applications by the Class Representatives for the payment of Class Representative Awards and by Class Counsel for the payment of Settlement Administration, Withholding, Fee and Expense Awards, as described in the Settlement Agreement;
726672.1
6

Case 4:04-cv-00003-HLM Document 225 Filed 04/12/10 Page 7 of 7
(c) to rule upon such other matters as the Court may deem appropriate.
10. Plaintiffs shall file a Motion for Final Approval of the Settlement Agreement no later than 14 calendar days before the date of the Settlement Fairness Hearing.
IT IS SO ORDERED Dated:
726672.1
7

 
 Case 4:04-cv-00003-HLM Document 228 Filed 04/29/10 Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES and LORA SISSON, individually and on behalf of a class,
Plaintiffs,
vs.
MOHAWK INDUSTRIES, INC.,
Defendant.

) ) ) Civil Action ) File No. 4:04-cv-03-HLM ) ) CLASS ACTION ) ) ) ) ) )

t: ORDER PRELIMINARILY APPROVING AMENDED SETTLEMENT AGREEMENT AND CORRECTED NOTICE TO THE CLASS

On April 12, 2010, the Court certified a Settlement Class in this RICO action

and approved the parties Settlement Agreement as fair, just, reasonable and

adequate to the members of the Settlement Class, subject to further consideration at

a final Settlement Fairness Hearing. In addition, the Court approved the form and

substance of a proposed Notice to the Class and directed the Claims Administrator

to mail out the Notice in accordance with the Settlement Agreement.

On April 28, 2010, the parties informed the Court that they had agreed to a

short amendment to the Settlement Agreement. The purpose of the amendment is

to afford the estates of two deceased plaintiffs, Shirley Williams and Lora Sisson,

763297.1

1
EXHIBIT B-1

Case 4:04-cv-00003-HLM Document 228 Filed 04/29/10 Page 2 of 3

the option of petitioning the Court for a Class Service Award from the Settlement Fund. Plaintiffs' counsel does not represent the Williams or Sisson estates for this purpose, and any such application must be made by the duly authorized representative of the respective estates. The parties have also corrected the proposed Notice to inform the Class that the Williams and Sisson estates will have an opportunity to petition for Class Service Awards.
The Court has reviewed the First Amendment to the Settlement Agreement and the corrected Notice and is satisfied that the Settlement Agreement as amended remains fair, just, reasonable and adequate to the members of the Settlement Class. Even if the Williams or Sisson estates take advantage of this opportunity to petition for a Class Service Award, the Court must decide whether any such award is appropriate. Accordingly, the Court grants preliminary approval to the Settlement Agreement as amended, subject to further consideration at the Settlement Fairness Hearing scheduled for July 22, 2010. The Court further approves the corrected Notice attached to the First Amendment to the Settlement Agreement. The Court enters this preliminary approval NUNC PRO TUNC and directs the Claims Administrator to mail the corrected Notice according to the schedule in the Settlement Agreement, which was approved in the Court's April 12, 2010 Preliminary Approval Order.

763297.1

2
EXHIBIT B-2

Case 4:04-cv-00003-HLM Document 228 Filed 04/29/10 Page 3 of 3
Nothing in this Order should be construed to approve or disapprove of any party's application for a Class Service Award. Any applications for Class Service Awards shall be made according to the schedule established in the Court's April 12 Order. Pursuant to Fed. R. Civ. P. 23(e), the Court will consider the merits of any such applications for a Class Service Award at the July 22, 2010 Settlement Fairness Hearing.
IT IS SO ORDERED

763297.1

3
EXHIBIT B-3

 
 Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 1 of 66

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA

ROME DIVISION
Shirley Williams, Gale Pelfrey, Bonnie Jones, and

J"2. FILED IN OPEN COURT ~~ 2:2-/0 Hatteu, CIetk

B1:..

~~~__~,I

'"' :DIpay em

Lora Sisson, individually

and on behalf of a class,

Plaintiffs,

v.

CIVIL ACTION FILE

NO. 4:04-CV-0003-HLM

Mohawk Industries, Inc.,

Defendant.

ORDER

This is a class action alleging violations of the federal

and Georgia Racketeer Influenced Corrupt Organizations

Acts. The case is before the Court on Plaintiffs' Motion for

Final Approval of the Settlement Agreement [230], Plaintiffs'

Motion for Order Approving Class Service Awards for Gale

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 2 of 66

Pelfrey and Bonnie Jones [231], Plaintiffs' Motion for Order Approving an Administration, Withholding, Expense, and Attorneys' Fee Award [232], the Motion to File Out of Time Motion filed by Ronald David Cronan, Temporary Administrator of the Estate of Lora Cronan-Sisson [236],1 and the Motion for Order of Class Service Award filed by Ronald David Cronan, Temporary Administrator of the Estate of Lora Cronan-Sisson [237]. I. Background
A. Procedural Background On January 6, 2004, Plaintiffs filed this lawsuit. (Docket Entry No.1.) The four original Plaintiffs were current and former hourly employees of Defendant who worked for Defendant in north Georgia. The two surviving

A072A (Rev. 8/82)

lThe Court grants the Motion to File Out of Time Motion. (Docket Entry No. 236.)
2

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 3 of 66
Plaintiffs and Class Representatives are Gale Pelfrey, a former employee of Defendant, and Bonnie Jones, who still works for Defendant.
Plaintiffs alleged that Defendant violated the federal and Georgia RICO Acts by hiring illegal aliens. Plaintiffs also alleged that Defendant harbored illegal workers who were hired and supplied by temporary employment agencies. Plaintiffs alleged that this conduct depressed the wages that they earned for their work at Defendant, beginning in January 2009.
Defendant initially responded to this lawsuit by filing a Motion to Dismiss. The Court denied that Motion with respect to Plaintiffs' federal and Georgia RICO claims, and Defendant appealed to the United States Court of Appeals for the Eleventh Circuit. The case ultimately made a trip to
3

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 4 of 66
the United States Supreme Court and another trip to the Eleventh Circuit before being remanded to the Court in February 2007.
Plaintiffs and Defendant diligently pursued class discovery over an eight-month period. In response to Plaintiffs' document requests, Defendant produced nearly one million pages and over twenty million electronic records. Plaintiffs also conducted depositions of Defendant's corporate representatives on a number of topics, and took discovery from several temporary employment agencies that had supplied Defendant with workers in Northwest Georgia, resulting in 10,000 pages of document discovery and depositions of seven more witnesses. Defendant, in turn, took written discovery and deposition testimony from
4

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 5 of 66
the Class Representatives. The parties also litigated and resolved a series of discovery-related disputes.
On December 18, 2007, Plaintiffs filed a Motion to Certify Class. On March 3, 2008, the Court denied class certification. Plaintiffs appealed to the Eleventh Circuit, which vacated the Court's decision and remanded for further class certification proceedings, including consideration of whether Plaintiffs could satisfy the predominance and superiority requirements of Federal Rule of Civil Procedure 23(b)(3). Defendant filed a petition for a writ of certiorari to the Supreme Court, which the Supreme Court denied on November 2, 2009.
On April 9, 2010, Plaintiffs filed an unopposed Motion for Preliminary Approval of Settlement, which the Court granted on April 12, 2010. (Order of Apr. 12,2010 (Docket
5

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 6 of 66
Entry No. 225).) On that same day, the Court entered a second Order directing counsel for the parties to appear before the Court on July 22, 2010, for a final hearing to approve the Settlement Agreement in this case. (Order of Apr. 12, 2010 (Docket Entry No. 226).) Subject to further review at the final fairness hearing, the Court certified a Settlement Class in this action and preliminarily approved the parties' Settlement Agreement as being fair, just, reasonable, and adequate to the members of the Settlement Class. In advance of the final fairness hearing, the Court directed the Settlement Administrator to mail the Class Notice in accordance with the terms of the Settlement Agreement. The Court also set a schedule for Class Members to file any objections to, or exclusions from, the
6

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 7 of 66
settlement and for Plaintiffs to file their Motion for Final Approval of the settlement.
On April 29, 2010, the Court granted Plaintiffs' Motion for Preliminary Approval of Amended Settlement Agreement and Corrected Notice to the Class. (Order of Apr. 29, 2010.)
On July 8, 2010, Plaintiffs 'filed their Motion for Final Approval of the Settlement Agreement, their Motion for Order Approving Class Service Awards for Gale Pelfrey and Bonnie Jones, and their Motion for Order Approving an Administration, Withholding, Expense and Attorneys' Fee Award. (Docket Entry Nos. 230-32.) On July 9, 2010, Ronald David Cronan, Temporary Administrator of the Estate of Lora Cronan-Sisson ("Ms. Sisson") filed a Motion
7

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 8 of 66
for Order for Class Service Award to Ms. Sisson. (Docket Entry No. 237.)
On July 22, 2010, the Court held a final hearing in this case to approve the Settlement Agreement. This Order memorializes the actions taken by the Court during the July 22, 2010, hearing.
B. The Settlement Agreement The Settlement Agreement required Defendant and its insurer, Zurich, to establish a Settlement Fund of $18 million. (Settlement Agreement 1l1l1(A).) The Settlen1ent Agreement also requires Defendant to conduct annual training concerning verification of employment eligibility and to maintain a telephone hotline to receive reports of alleged employment eligibility violations. (klllll.)
8

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 9 of 66
The Settlement Agreement required Defendant and Zurich to establish a Settlement Fund Account with initial deposits totaling $12 million within seven business days after preliminary approval. The Settlement Agreement then required Zurich to deposit up to an additional $6 million to bring the Settlement Fund Account up to $18 million, as necessary.
The Settlement Agreement provided that the individual awards to Class Members will be based in part on each Class Member's length of service at Defendant in hourly jobs at facilities covered by the Class Definition. Consequently, the longer a Settlement Class Member worked for Defendant, the more substantial the award to that Class Member.
9

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 10 of 66
The parties agreed that the two surviving Class Representatives, Ms. Jones and Ms. Pelfrey, could apply for awards of up to $25,000 each in recognition of their service
to the Class. (Settlement Agreement 11 111(0)(1 ).) The
Settlement Agreement also contemplated that Class Counsel would apply for an award of up to one-third of the Settlement Fund, or up to $6 million, to: (1) pay the costs of settlement administration, initially estimated at $285,000; (2) pay employer withholding obligations on the wage portions of the awards to individual Class Members; (3) reimburse Class Counsel for the expenses they advanced and incurred to prosecute the case; and (4) pay attorneys' fees. Defendant and Zurich agreed not to oppose that application. (kllllll(B)(2).) The Settlement Agreement further provided that, in the event the costs of settlement administration and
10

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 11 of 66
the employer withholding obligations exceed $500,000, a supplemental payment would be made 'from the Settlement Fund. (llllllll(B)(3).)
The Settlement Agreement provided that, after deduction of the foregoing items, the remainder of the Settlement Fund would be allocated 1/3 to a Wages Fund
and 2/3 to a Non-Wages Fund. (Settlement Agreement 11
III(B)(3).) The funds then would be distributed to the Class Members according to their length of service with Defendant. Specifically, the Settlement Agreement provided that each Class Member would receive a Base Award depending on the length of his or her employment with Defendant, as follows:
• Class Members with one to twenty-nine days of service would receive a base award of $25;
11
A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 12 of 66

A072A (Rev.8/82)

• Class Members with thirty to ninety days of service would receive a base award of $75; and
• Class Members with ninety days of service or more would receive a base award of $150.
(kl ~ III(C)(1 ).) One-third of each Base Award was to be paid from the Wages Fund, and the remaining two-thirds was to be paid from the Non-Wages Fund.
Next, the Settlement Agreement provided that each Class Member also would be allocated an Additional Award, calculated as a pro-rata share of the Settlement Fund that remained after making the Base Awards. Those pro rata shares were to be calculated by taking each Class Member's days of service as a percentage of the total days of service for all Class Members. Thus, the longer a Class Member worked for Defendant, the higher his or her pro rata share of the remaining funds, and his or her Additional
12


Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 13 of 66
Award, would be. One-third of each such Additional Award was to be paid from the Wage Fund, while two-thirds of the Additional Award was to be paid from the Non-Wage Fund.
The Settlement Agreement provided that each Class Member would be allocated an Individual Wages Fund Award and an Individual Non-Wages Fund Award. The Individual Wages Fund Award would consist of 1/3 of the individual's Base Award and Additional Award, while the Individual Non-Wages Fund Award would consist of 2/3 of each Class Member's Base Award and 2/3 of the Class Member's Additional Award.
The Settlement Agreement further provided that, to claim their individual awards, Class Members must complete, and timely return, a Claim Form and Release. Any awards not claimed by Class Members were to revert
13

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 14 of 66
to Zurich. In the event that more than fifty percent of the approximately 48,000 Class Men1bers filed a claim, Zurich had the right, but not the obligation, to terminate the
Settlement Agreement. (Settlement Agreement 11 IV. )
The Settlement Agreement required Defendant to conduct annual training concerning the federal and Georgia laws relating to verifying employment eligibility. Additionally, Defendant agreed to maintain a hotline to allow callers to report anonymously alleged violations of federal and Georgia law relating to verification of employment eligibility at Defendant's facilities included within the Class Definition.
(Settlement Agreement 11 II.) The Settlement Agreement
also required Defendant to maintain those efforts for two years after the effective date of the settlement.
14

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 15 of 66
On April 26, 2010, the parties agreed to a short amendment to the Settlement Agreement that would allow the duly authorized representatives of the estates of Shirley Williams and Ms. Sisson, who were both named plaintiffs in this action, an opportunity to apply to the Court for Class Service Awards. The parties also agreed to correct the Class Notice to ensure that the Class had notice that the Williams and Sisson estates, as well as Ms. Jones and Pelfrey, as the surviving Class Representatives, might seek an award from the Settlement Fund.
c. Notice Process and Responses
The Court's April 12, 2010, Order appointed Settlement Services, Inc. ("SSI") as the Claims Administrator. After determining that mailing the Class Notice was the best notice practicable under the circumstances, the Court
15

A072A (Rev. 8/82)

- -- ----- - - - - - - - - - - -
Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 16 of 66
ordered that the Class Notice be mailed to the members of the Class.
On May 11, 2010, 551 mailed the Corrected Class Notice (the "Notice") to the Class by first class mail. (Decl.
of Mark Patton 11 5.) 551 has extensive experience in administering class action settlements. (kl 11 2.) 551
mailed the Notice to a list of 48,151 Class Members compiled from Defendant's employee databases. (kl1l5.) Before mailing the Notice, 551 updated the last-known addresses of the Class Members by using the National Change of Address system and other similar databases. (kl)
Of the 48,151 Notices mailed on May 11,2010,13,164
were returned as undeliverable. (Patton Decl. 11 8.) For
each of those returned Notices, 551 attempted to trace the
16

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 17 of 66
Class Member to discover an alternative address. (ld.J
Using that process, SSI identified alternative addresses and re-mailed the Notice to 11 ,459 of the 13, 164 returned Notices. (JJi.)
SSI also created, and has maintained, a website,
www.williamslawsuit.com. (Patton Dec!. ~ 6 &Ex. A.) That
website allows Class Members to download the entire Notice and Claim Form and Release in English or Spanish.
(ldJ The website describes the settlement, the Class
Members' right to participate, and the minimum award that Class Members will receive if they file valid claims with the Claims Administrator. (JJi.) The website also describes the Class Members' right to opt out of, or object to, the settlement, including asserting objections to the amount of the Settlement Fund, the amount of the Class Member
17

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 18 of 66
Service Awards, and the amount of the Administration,
Withholding, Expense, and Attorneys' Fee Award. (ldJ The
website further lists significant dates and deadlines for the
Class Members to exercise their rights. (ldJ
SSI also established a telephone hotline to answer Class Members' questions concerning the settlement.
(Patton Decl. 11 7.) The telephone hotline provided a
voicemail menu to answer frequently asked questions, and also allowed Class Members to ask the Claims Administrator additional questions. (kl) As of June 30, 2010, SSI had received 1,422 telephone calls. (kl)
No Class Member 'filed a timely objection to any aspect
of the settlement. (Patton Decl. 1111 9-10.) Six Class
Members excluded themselves from the settlement by
18

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 19 of 66
timely opting out of the Class and the settlement on or
before June 25, 2010. (kl & Ex. S.)
II. Motion for Final Approval of Settlement Agreement As an initial matter, the Court observes that the Class
Action Fairness Act ("CAFA") does not apply here because Plaintiffs filed this action prior to the statute's effective date, February 18, 2005. Tmesys, Inc. v. Eufaula Drugs, Inc., 462 F.3d 1317, 1319 (11th Cir. 2006) (observing that CAFA would not apply where case was commenced prior to CAFA's effective date, February 18, 2005) (per curiam). In any event, the concerns addressed by CAFA are not applicable here because the proposed Settlement does not involve coupons, present the prospect of a net loss by class members, or discriminate based on geographic locations of
class members. 28 U.S.C.A. §§ 1712-14.
19
A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 20 of 66

A072A (Rev.8/82)

Before the Court may grant final approval to the settlement, the Court must determine that: (1) the settlement is fair, adequate, and reasonable; and (2) the settlement is not the product of collusion between the parties. lngram v. The Coca-Cola Co., 200 F.R.D. 685, 688 (N.D. Ga. 2001). For the reasons discussed above, the Court concludes that the proposed settlement in this case satisfies those requirements.
A. The Settlement Is Fair, Adequate, and Reasonable
In Bennett v. Behring Corporation, 737 F.2d 982 (11th Cir. 1984), the Eleventh Circuit approved a district court's reliance on the following six factors in assessing the fairness of a class action settlement: (1) the likelihood of success at trial; (2) the range of possible recovery; (3) the point on or below the range of possible recovery at which a
20


Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 21 of 66

A072A (Rev.8/82)

settlement is fair, adequate, and reasonable; (4) the complexity, expense, and duration of litigation; (5) the substance and amount of opposition to the settlement; and (6) the stage of the proceedings at which the settlement was achieved. 737 F.2d at 986. Additionally, the judgment of experienced counsel is relevant to approving a settlement. 1ng[am, 200 F.R.D. at 689 (N.D. Ga. 2001) (collecting cases). For the reasons discussed below, the Court finds that those factors strongly support approving the settlement in this case.
1. Likelihood of Success at Trial and Range of Potential Recovery
The Court first should compare the benefit the settlement provides to the class with the likely recovery for the class at trial. Ingram, 200 F.R.D. at 689. "This question implicates the first three of the Bennett factors, which are
21


Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 22 of 66
closely related: '(1) the likelihood of success at trial; (2) the range of possible recovery; and (3) the point on or below the range of possible recovery at which a settlement is fair,
reasonable and adequate.'" kl (quoting Bennett, 737 F.2d
at 986). "This standard often justifies approving settlements that are substantial compromises of the relief that could be
obtained through litigation." kl For the reasons discussed
below, however, the Court concludes that the results obtained under the settlement are consistent with, and, in some respects, exceed, "the relief that the class could expect to obtain at trial, while obviating the risks that further
litigation entails." kl
Here, Plaintiffs' claims have survived over six years of litigation and appeals, and could prove valuable, based on a potential class of 48,000 employees and an eleven-year
22

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 23 of 66
class period. Plaintiffs, however, still face the hurdle of obtaining class certification, an issue on which the Court previously ruled against Plaintiffs. Even if Plaintiffs obtained class certification, their claims and their alleged damages-­ wage depression--are difficult to prove. To litigate this case through trial, Plaintiffs and Defendant would be required to devote much more time and many more resources, and a jury ultimately might decide to award nothing to Plaintiffs. The proposed settlement eliminates those risks and expenses and substitutes a certain recovery for Class Members who do not opt out of the proposed settlement. Those factors counsel in favor of approving the proposed settlement.
The Court also has considered the reasonableness of the proposed settlement in light of the significantly less
23

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 24 of 66
favorable results obtained in similar cases. Plaintiffs have presented information indicating that several similar actions have been resolved with no benefit for the employee class
members. (Pis.' Sr. Supp. Mot. Final Approval at 9-10 &
n.30-33.) Moreover, Plaintiffs also presented information indicating that several similar cases had proceeded for years, and that the employee class members in those cases had yet to recover anything. (kL at 10-11 & n. 34-36.) Plaintiffs' information indicated that an employee class had recovered monetary relief in only one similar case, and that the recovery in that case, approximately $1.3 million, was significantly less than the Settlement Fund in this case. (kL at 11.) Although the $18 million Settlement Fund in this case is less than the damages that Plaintiffs might hope to recover at trial, that fact does not present an obstacle to
24

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 25 of 66
approval of the settlement. In re Domestic Air Trans~ Antitrust Liti~, 148 F.R.D. 297,325 (N.D. Ga. 1993) ("That the proposed settlement amounts to a fraction of potential recovery does not render the proposed settlement inadequate and unfair.").
Additionally, the settlement includes training and hotline requirements that benefit the Class Members by helping ensure that Defendant's hiring and compliance processes deter the employment of illegal workers. Litigating this case through trial might potentially produce additional improvements or injunctive relief; however, as the Court .previously cautioned counsel, any remedy that requires the Court to monitor Defendant's employment practices is far from certain in this case. Consequently, the proposed settlement provides the Class Members with significant
25

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 26 of 66

A072A (Rev.8/82)

benefits that would not be guaranteed, but instead would be greatly delayed by further litigating this case.
In sum, comparing the relief obtained to the issues presented by this case, the settlement provides the Class Members with a reasonable result with respect to the major objectives of th is litigation. Indeed, "[t]he benefit of obtaining guaranteed relief, in the face of serious obstacles to successful litigation, enhances the value of the settlement to the class and strongly demonstrates its fairness." Ingram, 200 F.R.D. at 690. The Court therefore finds that the first three Bennett factors counsel in favor of approving the proposed settlement.
2. Complexity, Expense, and Dura'tion of Further Litigation
The fourth Bennett factor--the complexity, expense, and duration of further litigation--also favors approving the
26


Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 27 of 66
proposed settlement. Further litigation in this case will be highly complex, expensive, and uncertain. This case has remained pending for well over six years, and the parties have vigorously litigated the case at every stage. Litigation of this case has been time-consuming and expensive. The Class Representatives have devoted significant time and attention to participating in this litigation, and Class Counsel have invested hundreds of thousands of dollars in expenses and thousands of hours of attorney time to litigate this case. Defendant likewise has made significant investments in expenses and attorneys' fees to defend this action.
As Plaintiffs point out, the parties still have much work to do before the case can proceed to trial. If the case proceeded to trial, the Court would have to resolve the class certification issue, and there is no guarantee that the Court
27

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 28 of 66
would grant certi'fication. Even if the Court certified a class, Defendant doubtlessly would appeal, which would cause further delay and expense to both sides.
Further, the parties would have to devote significant time to merits and expert discovery after the class certification stage. The parties also would file motions for summary judgment and to exclude expert testimony. If Plaintiffs' claims survived, the resulting trial would require months of preparation by the parties and weeks of court time.
Taking the above considerations into account, lithe likely alternative to settlement now is lengthy, burdensome, and expensive litigation." Ingram, 200 F.R.D. at 691. Given the strength of the relief offered by the settlement, "the added benefit of obtaining it now rather than years from now
28

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 29 of 66
makes approval of this settlement in the best interests of the
class." kl The Court therefore finds that this factor
counsels in favor of granting final approval of the proposed settlement.
3. Substance and Amount of Opposition The fifth Bennett factor requires the Court to consider the substance of, and amount of, any opposition to the proposed settlement. Bennett, 737 F.2d at 986. Here, although thousands of Class Members returned claim forms, only six of the Class Members submitted timely requests to opt out of the settlement. (Patton Dec!. ~~ 9-10
& Ex. B.) No Class Member, however, filed objections to
any aspect of the Settlement Agreement, indicating that the terms of the settlement agreement are satisfactory to the Class Members. In re Motorsports Merch. Antitrust LitiSL.,
29

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 30 of 66

A072A (Rev.8/82)

112 F. Supp. 2d 1329, 1338 (N.D. Ga. 2000) ("The lack of objection to the settlements suggests that the terms are satisfactory to those affected. "). This factor therefore counsels in favor of granting final approval to the settlement.
4. Stage of Litigation at Which Settlement Was Reached
The final Bennett factor requires the Court to consider the stage of litigation at which the proposed settlement was achieved. Bennett, 737 F.2d at 986. As previously noted, the parties already have spent over six years litigating this case, including over a year of conducting discovery that was, at times, contentious. The parties have engaged in several appeals and have participated in lengthy settlement negotiations. Under those circumstances, the Court finds that the proposed settlement is reasonable in light of the
30


Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 31 of 66
stage of the proceedings at which it was achieved. 5. Judgment of Class Counsel
Further, "[i]n a case where experienced counsel represent the class, the Court 'absent 'fraud, collusion, or the like, should hesitate to substitute its own judgment for that of counsel.'" Ingram, 200 F.R.D. at 691 (quoting Cotton v. Hinton, 559 F.2d 1326, 1330 (5th Cir. 1977)). In light of Class Counsel's qualifications, which include substantial experience litigating class actions and other complex cases, the Court "has confidence in their collective judgment that the benefits of this settlement far outweigh the delay and
considerable risk of proceeding to trial." ld.:.
6. Summary After taking into account the above factors, the Court concludes that the proposed settlement is fair, adequate,
31

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 32 of 66
and reasonable. Before granting final approval to the proposed settlement, however, the Court must determine that the proposed settlement is not the product of collusion.
B. The Settlement Is Not the Product of Collusion The Court also must consider "whether there is any evidence that the settlement was the product of collusion, by examining the negotiating process, to determine whether the compromise was the result of arms-length bargaining between the parties." Ingram, 200 F.R.D. at 693. The Court had the opportunity to observe the conduct of the parties and counsel during the litigation of this case, and is well aware that this case has been adversarial, involving a high level of contention between the parties throughout the litigation. The settlement negotiations in this case were lengthy, and the first efforts began in February 2007. The
32

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 33 of 66
most recent round of negotiations, which were conducted with the aid of Attorney Hunter Hughes, a highly experienced, talented, and independent mediator, required more than six months to complete. (Dec!. of Hunter R. Hughes, 1111{1{4-14.) Attorney Hughes had to devote all of his considerable skill to mediating this settlement because it was so difficult to reach an agreement among the various parties. (kl1{1{13-14.) "Parties colluding in a settlement would hardly need the services of a neutral third party to broker their deal." Ingram, 200 F.R.D. at 693. Additionally, this case does not present circumstances in which Class Counsel "will obtain a disproportionately large fee in relation to the size of the settlement and where the class will receive a limited or dubious benefit." kl
The Court finds that all of the facts and circumstances
33
A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 34 of 66
in this case point to a true arms-length negotiation, and demonstrate that the proposed settlement is not the product of collusion. This factor therefore counsels in favor of granting final approval to the proposed settlement.
C. Summary In sum, the Court finds that the proposed settlement is fair, adequate, and reasonable, and that the proposed settlement is not the product of collusion. The Court therefore grants Plaintiffs' Motion for Final Approval of the Settlement Agreement, and grants final approval to the proposed Settlement Agreement in this case. .. III. Motions for Class Service Awards Ms. Pelfrey and Ms. Jones, the two surviving Class Representatives, each have requested Class Service Awards of $25,000, to be paid from the Settlement Fund.
34
A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 35 of 66
The temporary administrator of Ms. Sisson's estate also has filed a request for a Class Service Award of $25,000, to be paid from the settlement fund to Ms. Sisson's estate. Such compensation would be in addition to the compensation that Ms. Pelfrey, Ms. Jones, and Ms. Sisson's estate otherwise would receive as members of the Class from the Settlement Fund. No one has objected to the requested Class Service Awards.
"Courts routinely approve incentive awards to compensate named plaintiffs for the services they provided and the risks they incurred during the course of the class action litigation." In re S. Ohio Correctional Facility, 175 F.R.D. 270, 272 (S.D. Ohio 1997). "Such awards are justified when the class representatives expend considerable time and effort on the case, especially by
35

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 36 of 66
advising counsel, or when the representatives risk retaliation as a result of their participation." Ingram, 200 F.R.D. at 694. Here, Ms. Pelfrey, Ms. Jones, and Ms. Sisson helped to prosecute the Class's claims by investigating and substantiating the claims, helping to prepare the Complaint, and producing documents. (Dec!. of Bonnie Jones 1111 3-4, 7-9; Dec!. of Gale Pelfrey 1111 4-5, 7­
9; Aft. of Ronald David Cronan 11 2.) Ms. Jones and Ms.
Pelfrey also prepared for, and sat for, depositions. (Jones
Dec!. 11 9; Pelfrey Dec!. 11 9.) Ms. Jones, Ms. Pelfrey, and
Ms. Sisson also kept themselves informed about this case, and regularly communicated with Class Counsel concerning the progress of the case. (Jones Dec!. 1111 10-11; Pelfrey
Dec!. 1111 10-11; Cronan Aft. 11 2.) Ms. Jones and Ms.
Pelfrey also attempted to ensure that any settlement would
36

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 37 of 66
be fair to the Class Members. (Jones Dec!. 11 11; Pelfrey Decl.1I1111.) Ms. Jones, Ms. Pelfrey, and Ms. Sisson thus conferred bene'fit to the Class Members.
Additionally, Ms. Jones, Ms. Pelfrey, and Ms. Sisson bore risks to represent the Class Members in this action. Ms. Jones, Ms. Pelfrey, and Ms. Sisson all were hourly workers in North Georgia. Participating in this case required those ladies to become public figures overnight, even though they had no interest in publicity or in giving media interviews. (Jones Dec!. 11 14; Pelfrey Dec!. 11 15; Cronan Aff. 113.) Ms. Jones, Ms. Pelfrey, and Ms. Sisson faced countless questions about the case from their friends, co-workers, and other members of the community. (Jones Dec!. 1115; Pelfrey Dec!. 1116; Cronan Aff. 113.) Given the nature of Plaintiffs' allegations and the potential impact that
37

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 38 of 66
this case could have on one of the region's largest employers, Ms. Jones, Ms. Pelfrey, and Ms. Sisson all faced concern that their participation in this lawsuit could have a negative effect on their lives and livelihoods. (Jones Dec!. ~ 15; Pelfrey Dec!. ~~ 6,13-14,16-17; Cronan Aff. ~ 3.) Ms. Jones and Ms. Sisson, who worked for Defendant when Plaintiffs filed this lawsuit, faced the risk that Defendant might retaliate against them for participating in this litigation. (Jones Dec!. ~~ 12-13; Cronan Aff. ~ 3.) Although Ms. Pelfrey was no longer employed by Defendant when Plaintiffs filed this lawsuit, she faced the risk that her service to the Class Members might result in adverse employment action at her subsequent employer, as well as the fear that her participation in this action might result in another employer's refusal to hire her or retain her. (Pelfrey
38

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 39 of 66
Dec!. 1J1J 2, 13-14.)
Ms. Jones, Ms. Pelfrey, and Ms. Sisson also bestowed a substantial benefit on the Class Members. As discussed
sLipra Part 11., the $18 million Settlement Fund IS an
impressive and hard-fought recovery for the Class Members. The settlement also requires Defendant to take steps to improve its hiring processes, including conducting training, and to permit employees to report suspected hiring violations. Under those circumstances, Ms. Jones, Ms. Pelfrey, and Ms. ,Sisson have conferred significant benefits on the Class Members.
Finally, the amount of the requested Class Service Awards is reasonable, especially when compared with incentive awards approved in other cases. Here, the requested Class Service Awards are only $25,000, as
39

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 40 of 66
compared with the $300,000 awarded to each class representative in l.o.gram. Ingram, 200 F.R.D. at 694.
Finally, the Court considers the fact that no Class Member objected to the requested Class Service Awards. The lack of objections is particularly significant where, as here, the Notice informed the Class Members that the Class Representatives could seek Class Service Awards of up to $25,000. The lack of objections provides strong evidence that the requested Class Service Awards are fair and reasonable.
For the reasons discussed above, the Court concludes that the requested Class Service Awards are appropriate, in light of the substantial services that Ms. Jones, Ms. Pelfrey, and Ms. Sisson provided to the Class Members. The Court therefore grants the Motions for Class Service
40

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 41 of 66

A072A (Rev. 8/82)

Awards filed on behalf of Ms. Jones, Ms. Pelfrey, and the estate of Ms. Sisson. IV. Motion for Order Approving Administration,
Withholding, Expense and Attorneys' Fee Award Plaintiffs also seeks an Order approving an Administration, Withholding, Expense, and Attorneys' Fee Award of $6 million. The requested award includes: (1) payment of the costs of settlement administration, currently estimated at $285,000; (2) payment of withholding taxes on the Class Members' wage awards; (3) payment of $363,615.00 in expenses paid by Class Counsel through May 31, 2010; and (4) payment of the balance as an attorneys' fee award to Class Counsel. Plaintiffs note that neither Defendant nor Zurich oppose such an award, and that, even though the Class Notice informed Class Members that Class Counsel would seek such an award, no
41


Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 42 of 66
Class Member has objected to the proposed award. The Court first addresses the portion of the requested award relating to expenses, and then addresses the portion of the requested award relating to attorneys' fees.
A. Expenses When considering a request for an award of expenses, a court must determine whether class counsel has established that the expenses requested are reasonable and necessary to the prosecution of the case. Waters v. Int'I Precious Metals Cor~, 190 F.3d 1291,1298 (11th Cir. 1999). A court also must examine the costs for which reimbursement is requested, to ensure that class counsel
does not obtain a secret or unintended profit. kl For the
following reasons, the Court finds that the portion of the requested award relating to expenses is fair and reasonable
42

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 43 of 66
to the Class Members, that the costs incurred are necessary to the prosecution of the case, and that Class Counsel are not making a secret or unintended profit.
With respect to settlement administration costs, Plaintiffs have presented evidence indicating that 551 agreed to administer the settlement in this case for a flat fee
of $285,000. (Dec!. of Joshua F. Thorpe ,-r 4.) Class
Counsel selected 551 to administer the settlement partly because 551 agreed to administer the settlement for a competitive price that limited the risk of cost overruns to the Class Members, and partly because Class Counsel was familiar with excellent work that 551 provided in other large class actions. (kl) Class Counsel have indicated that they do not presently anticipate that the costs of settlement administration will exceed the $285,000 flat fee that counsel
43

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 44 of 66
negotiated with 551, and that the settlement administration expense incurred is fair and reasonable to the Class Members. The Court agrees with Class Counsel that the requested settlement administration expense in this case is fair and reasonable to the Class Members, is necessary, and does not present an opportunity for Class Counsel to obtain a secret or unintended profit.
With respect to the employer withholding tax obligations, the Settlement Agreement requires Class Counsel to pay withholding taxes on the Class Men1bers' wage awards. (Settlement Agreement ~~ III(C)(5)-(6).) Class Counsel have indicated that the total amount of the employer withholding tax obligations is not yet known and cannot be determined until after the deadline for Class Members to file claims expires. (Sr. Supp. Mot. Award at
44

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 45 of 66
8.) Class Counsel further has indicated that Defendant negotiated for this provision to prevent preserving an openended liability after settlen1ent. (kl at 8-9.) The employer withholding expenses are set by law, and the Claims Administrator will make those payments to the appropriate tax authorities. (kl at 9.) Under those circumstances, the Court finds that the employer withholding expenses are fair and reasonable to the Class Members, are necessary, and do not present a potential secret or unintended profit for Class Counsel.
With respect to out-of-pocket expenses, Class Counsel have presented evidence indicating that they have advanced a total of $363,615 in expenses to prosecute this case during the period from 2003 to May 31, 2010. (Decl.
of John E. Floyd mJ 8-9; Decl. of Howard Foster mJ 12-14;
45

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 46 of 66
Dec!. of Matthew Thames ~ 8.) Class Counsel incurred those expenses for open records requests for information concerning possible illegal workers for Defendant, for court and court reporter fees, for document and database reproduction and analysis, for expert witness and consulting fees, for travel expenses for meetings, depositions, document review and production, for mediation fees, and for other customary expenditures. Class Counsel have indicated that the expenses incurred represent the actual out-of-pocket costs that Class Counsel paid for external expenses or the standard rates that Class Counsel charge for internal expenses, and that the expenses incurred were reasonable and necessary to the prosecution of this case. (Floyq Dec!. ~ 9; Foster Dec!. ~ 16; Thames Dec!. ~ 8.) The Court finds that the expenses sought by Class Counsel are
46

A072A (Rev.B/B2)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 47 of 66
fair and reasonable to the Class Members, that those expenses were necessary for the prosecution of this case, and that Class Counsel is not obtaining a secret or unintended profit for those expenses.
In sum, the Court concludes that the expenses for which Class Counsel request reimbursement are fair and reasonable to the Class MerTlbers. The Court further finds that the expenses were necessary, and that Class Counsel will not obtain a secret or unintended profit from the requested expenses. The Court therefore approves the portion of the requested award relating to expenses.
B. Attorneys' Fees Plaintiffs have moved for an Order awarding the rest of the $6 million requested award as attorneys' fees to Class Counsel. "It is well-settled that attorneys who represent a
47

A072A (Rev.8/82)

----------------~------
Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 48 of 66
class and achieve a significant benefit for the class are entitled to be compensated for their services." In re Friedman's Inc. Secs. Liti~, No.1 :03-CV-3475-WSD, 2009 WL 1456698, at *2 (N.D. Ga. May 22, 2009). The Court, however, must approve the fee award requested by
counsel. kl
"Under the 'common benefit' doctrine, when litigation confers substantial benefits on members of a class, courts are authorized to award attorneys' fees to class counsel to spread the costs proportionately among class members." In re Freidman's, Inc. Secs. Liti~, 2009 WL 1456698, at *2. In Camden I Condominium Association, Inc. v. Dunkle, 946 F.2d 768 (11th Cir. 1991), the Eleventh Circuit established that attorneys' fees in a class action should be a reasonable percentage of a common fund created for the benefit of the
48

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 49 of 66
class. 946 F.2d at 775. Although Camden I set a twentyfive percent recovery as an appropriate benchmark, the court indicated that the benchmark could be adjusted, depending on the circumstances of the case. ~
When determining the amount of attorneys' fees to award, the Court should consider factors such as: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill required to perform the legal services properly; (4) preclusion of other employment by counsel caused by accepting the case; (5) the customary fee in similar cases; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the
49

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 50 of 66
professional relationship with the client; and (12) awards in similar cases. Johnson v. Georgia Highway Express, Inc., 488 F.2d 714,717-19 (5th Cir. 1974), overruled on other grounds, Blanchard v. Bergeron, 489 U.S. 87 (1989). Additionally, the Court should consider the following factors when evaluating an attorneys' fee award in a common fund case: (1) whether the settlement confers a non-monetary benefit on the class; (2) whether there are any substantial objections to the settlement terms or the fees request; (3) the economics involved in prosecuting a class action; (4) the time required to reach a settlement; and (5) any additional relevant factors that are unique to a particular case. Camden I, 946 F.2d at 775.
With respect to the first Johnson factor, the time and labor invested by Class Counsel, Class Counsel have
50

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 51 of 66
presented evidence indicating that counsel have spent more than 9,500 hours prosecuting this case over a seven-year period. (Floyd Decl. ~ 5; Foster Decl. ~ 6; Thames Decl. ~ 6.) Class Counsel spent significant time during 2003 investigating the background facts, interviewing witnesses, and conducting research before filing this action. (Floyd Decl. ~~ 4-7; Foster Decl. ~~ 5-11; Thames Decl. ~~ 5-7; Decl. of Bobby Lee Cook ~~ 5-6.) Class Counsel also spent significant time and effort to oppose Defendant's Motion to Dismiss this action, both in this Court and on appeal. After the case was remanded to the Court, Class Counsel had to conduct a massive discovery effort to support Plaintiffs' request for class certification. (Floyd Decl. ~ 4; Foster Dec!. ~ 5; Cook Decl. ~ 6; Thames Decl. ~ 5.) The discovery process was difficult, and, at times, contentious, requiring
51

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 52 of 66
counsel to resolve discovery disputes. (Floyd Dec!. ~~ 4-6; Foster Decl. ~~ 5-9; Thames Decl. ~~ 5-6.) Class Counsel also had to analyze and extract information from databases that Defendant produced to attempt to answer questions concerning the potential Class Members. Additionally, Class Counsel had to work with experts to analyze complicated legal and economic issues. Class Counsel then briefed the issue of class certification, pursued an appeal after the Court denied class certification, and opposed Defendant's petition for a writ of certiorari following the Eleventh Circuit's Order vacating the Court's denial of class certification. Class Counsel further devoted significant time to preparing for, and participating in, lengthy settlement negotiations, as well as to negotiating and drafting the terms of the Settlement Agreement. (Floyd Dec!. ~ 4U); Foster
52

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 53 of 66
Decl.1J 5; Cook Decl.1J 7; Thames Decl.1J 5(h).) The Court finds that this factor certainly counsels in favor of granting the requested attorneys' fee award.
As for the second Johnson factor--the complexity and difficulty of the issues involved--this case presented novel questions involving the federal and Georgia RICO statutes, which are two highly complex statutes. Defendant responded to the Complaint by filing a Motion to Dismiss, which the Court denied as to Plaintiffs' federal and Georgia RICO claims. A series of appeals to the Eleventh Circuit and the Supreme Court followed, taking nearly three years to complete. The case was made more difficult by the fact that Plaintiffs sought to represent a class. In light of those circumstances, the Court concludes that the difficult and complex nature of the case counsels in favor of granting the
53

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 54 of 66
requested fee award. The third Johnson factor, the skill required to perform
the legal services to obtain the settlement, and the ninth Johnson factor, the attorneys' expertise, reputation, and ability, also support awarding the requested fees. Class Counsel are highly experienced in complex class actions, and have significant experience with the federal and Georgia RICO statutes. As previously noted, Class Counsel litigated this highly complex and difficult case for over seven years, ultimately negotiating an $18 million settlement that, to date, is the highest award that employees ever have received in a RICO case seeking to hold an employer liable for illegal hiring. Class Counsel also faced opposition from extremely able, prominent, and nationally-known counsel. Under those circumstances, the
54

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 55 of 66
Court finds that the third and ninth Johnson factors counsel in favor of granting the requested attorneys' fees award.
The fourth Johnson factor, preclusion of other employment, also counsels in favor of awarding the requested fees. As previously noted, this case was complex, demanding, and time-intensive, requiring Class Counsel to devote over 9,500 hours of work over a nearly­ seven year period. Once Class Counsel undertook to represent Plaintiffs in this action, they were not free to use their time for other purposes. This factor therefore counsels in favor of granting the requested fees.
The fifth Johnson factor, the customary fee, also supports approving the requested award in this case. The customary fee in a class action is a contingent fee. Here, the maximum potential attorneys' fee award in this case is
55

A072A (Rev. 8182)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 56 of 66
29.7 percent of the common fund, and the minimum potential award is 28.6 percent. (Pis.' Br. Supp. Mot. Awar at 11-12.) Both of those percentages fall well within the percentage range of attorneys' fees commonly awarded in class actions. In re Friedman's. Inc. Sees. Liti~, 2009 WL 1456698, at *2 (collecting cases). The attorneys' fee award sought also is relatively consistent with the total recorded lodestar in this case, which is $3,969,944 at current rates. (Floyd Dec!. ~ 5; Foster Dec!. ~ 6; Thames Dec!. ~ 6.)2 This factor therefore counsels in favor of granting Plaintiffs' requested attorneys' fee award.

A072A (Rev.8/82)

2The lodestar in this case is understated, because the Cook & Connelly law firm did not keep time records for this action. (Cook Dec!. ~ 8.) Moreover, Class Counsel also reduced the lodestar by applying the same billing judgment and reductions that they would make in any case in which the client received hourly statements and paid for fees and expenses on a monthly basis. (Floyd Decl. ~~ 5-6; Foster Decl. ~~ 6-9; Thames Decl. ~~ 6-7.)
56

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 57 of 66
The sixth Johnson factor, whether the fee is fixed or contingent, also counsels in favor of awarding the fees requested. Class Counsel prosecuted this action on an entirely contingent fee basis, and, as such, assumed a significant risk of nonpayment or underpayment for all the work that Class Counsel have performed over the past seven years. This factor therefore counsels in favor of granting the attorneys' fee award requested.
Under the seventh Johnson factor, the time limitations imposed by the circumstances, a higher fee may be appropriate if class counsel must provide services on an accelerated schedule. Counsel have not litigated this case on an expedited basis, and this factor therefore neither counsels for nor against granting the requested attorneys' fees award.
57
A072A
(Rev.a/a2)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 58 of 66
The eighth Johnson factor, the amount involved and the results obtained, also supports awarding the amount of fees requested. As previously noted, the proposed settlement provides for a Settlement Fund of $18 million, and this result far surpasses the result in any other case asserting a similar theory. Moreover, the Settlement Agreement requires Defendant to take steps to improve its hiring process, including providing training, and to establish a hotline that allows reports of future violations of the immigration laws. The Court therefore concludes that this factor counsels in favor of granting the attorneys' fees award requested.
The tenth Johnson factor, the undesirability of the case, also weighs in favor of granting the requested attorneys' fees award. As previously discussed, this case involved
58

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 59 of 66
complex and novel questions of federal and Georgia RICO law, and few attorneys would consider undertaking such litigation against a company with Defendant's resources and influence in the area. The case also required thousands of hours of attorney time and required counsel to advance hundreds of thousands of dollars in out-of-pocket expenses. Class Counsel, however, faced a significant risk of failing to obtain any settlement or judgment at all in this case. Few lawyers would be willing to accept this case under those circumstances. Consequently, this factor counsels in favor of awarding the attorneys' fees requested.
The eleventh Johnson factor, the nature and length of the professional relationship between counsel and client, also weighs in favor of granting the relief requested. Although Attorney Matthew Thames previously had
59

A072A (Rev. 8182)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 60 of 66
represented Ms. Jones and Ms. Sisson in connection with workers' compensation matters before filing this lawsuit, those individual matters were of a very different nature than the instant lawsuit, and Attorney Thames has never expected Ms. Jones or Ms. Sisson to be a recurring client of the type who might warrant a reduced fee arrangement.
(Thames Decl. 11 4.) None of the other Class Counsel had
any professional relationship with Plaintiffs before filing this action. Consequently, neither Plaintiffs nor Class Counsel had an expectation that a pre-existing relationship might warrant a reduced fee. Class Counsel also has no reason to expect that they will represent Plaintiffs in any future matters. Under those circumstances, this factor counsels in favor of approving the requested attorneys' fees award.
The twelfth Johnson factor, awards in similar cases,
60
A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 61 of 66
also supports granting the requested attorneys' fees award. As previously noted, the percentage award requested in this case is consistent with the percentage fee awards approved in similar cases. This factor therefore counsels in favor of approving the requested attorneys' fees award.
Camden I also allows the Court to consider the time required to reach the settlement. As discussed previously, the parties reached a settlement in this case only after more than six years of contentious litigation, two rounds of interlocutory appeals, and months of mediation with Attorney Hughes. This factor therefore counsels in favor of awarding the fees requested.
Camden I also provides that courts may consider the amount and substance of any objections to a requested fee award. Here, as previously noted, no Class Members
61

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 62 of 66
objected to the requested attorneys' fees award. This factor consequently counsels in favor of approving the requested attorneys' fees award.
Camden I also allowed courts to consider any non­ monetary benefits of the settlement. As noted above, the Settlement Agreement requires Defendant to take steps to improve its hiring process, including providing annual training sessions and establishing a hotline to report hiring violations. Those non-monetary requirements will benefit the Class Members, and the Court therefore finds that this factor counsels in favor of approving the requested attorneys' fees award.
Finally, Camden I permits courts to consider the economics of prosecuting a class action. As previously discussed, prosecuting this case required Class Counsel to
62

A072A (Rev. 8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 63 of 66
make significant investments of time and money, with a very high risk of obtaining no return on those investments. This factor therefore counsels in favor of granting the requested attorneys' fees award.
In sum, the Court finds that the Camden and Johnson factors counsel in favor of approving the requested attorneys' fees award in this case. The Court therefore grants the portion of the Motion pertaining to the attorneys' fees award. The Court approves an Administration, Withholding, Expense, and Attorneys' Fee Award of $6 million, which includes: (1) payment of the costs of settlement administration, currently estimated at $285,000; (2) payment of withholding taxes on the Class Members' wage awards; (3) payment of $363,615.00 in expenses paid by Class Counsel through May 31,2010; and (4) payment
63

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 64 of 66

A072A (Rev.8/82)

of the balance as an attorneys' fees award to Class Counsel. V. Conclusion
ACCORDINGLV, the Court GRANTS Plaintiffs' Motion for Final Approval of the Settlement Agreement [230], and grants FINAL APPROVAL to the proposed settlement agreement in this case. The Court GRANTS Plaintiffs' Motion for Order Approving Class Service Awards for Gale Pelfrey and Bonnie Jones [231], GRANTS the Motion to File Out of Time Motion filed by Ronald David Cronan, Temporary Administrator of the Estate of Lora CronanSisson [236], and GRANTS the Motion for Order of Class Service Award filed by Ronald David Cronan, Temporary Administrator of the Estate of Lora Cronan-Sisson [237], and ORDERS that Gale Pelfrey, Bonnie Jones, and the
64


Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 65 of 66
estate of Lora Cronan-Sisson receive $25,000 each, for services as class representatives, to be paid from the settlement fund in this case. This $25,000 award shall be in addition to the amount that Ms. Jones, Ms. Pelfrey, and the estate of Ms. Cronan-Sisson otherwise will obtain based on membership in the settlement class.
Finally, the Court GRANTS Plaintiffs' Motion for Order Approving an Administration, Withholding, Expense, and Attorneys' Fee Award [232], and APPROVES an Administration, Withholding, Expense, and Attorneys' Fee Award of $6 million, which includes: (1) payment of the costs of settlement administration, currently estimated at $285,000; (2) payment of withholding taxes on the Class Members' wage awards; (3) payment of $363,615.00 in expenses paid by Class Counsel through May 31, 2010;
65

A072A (Rev.8/82)

Case 4:04-cv-00003-HLM Document 244 Filed 07/22/10 Page 66 of 66
and (4) payment of the balance as an attorneys' fee award to Class Counsel.
The Court DIRECTS the Clerk to ADMINISTRATIVELY CLOSE this case. The Court will defer directing the Clerk to enter a jUdgment in this case until after the conclusion of the claims process and until either Defendant's insurance carrier's option to terminate the settlement expires or the parties inform the Court that the conditions required to trigger the action have not occurred. The Court DIRECTS counsel to notify the Court promptly once either of those events has occurred.
r!
IT IS SO ORDERED, this the .d.,}aay of July, 2010.
66

A072A (Rev. 8/82)

 
 314 F.Supp.2d 1333 (2004)
Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones, and Lora Sisson, individually and on behalf of a class, Plaintiffs, v.
MOHAWK INDUSTRIES, INC., Defendant.
No. CIV.A.4:04-CV-0003-H.
United States District Court, N.D. Georgia, Rome Division.
April 12, 2004.
1334567 *1334 *1335 *1336 *1337 John Earl Floyd, Joshua F. Thorpe, Ronan P. Doherty, Nicole G. Iannarone, Bondurant Mixson & Elmore, Atlanta, GA, Bobby Lee Cook, Cook & Connelly, Summerville, GA, Howard Foster, phv, Johnson & Bell, Chicago, IL, Matthew Daniel Thames, Goddard Thames Hammontree & Bolding, Dalton, GA, for Plaintiffs.
Robert Carl Cannon, Rosemary C. Lumpkins, Constangy Brooks & Smith, Atlanta, GA, Steven Thomas Cottreau, phv, Juan P. Morillo, phv, Virginia A. Seitz, phv, Sidley Austin Brown & Wood, Washington, DC, for Defendant.
ORDER
MURPHY, District Judge.
This is a class action alleging violations of the federal and Georgia Racketeer Influenced and Corrupt Organizations Acts ("RICO"). The case is before the Court on Defendant's Motion to Dismiss [25].
I. Background
A. The Parties
Plaintiffs are current and former hourly employees of Defendant who claim that Defendant's alleged employment and harboring of illegal aliens has depressed their wages. (Compl.¶ 1.) Plaintiffs Gale Pelfrey, Shirley Williams, Bonnie Jones, and Lora Sisson are citizens of Georgia and reside in the Northern District of Georgia. (Id. ¶¶ 5-8.) Plaintiffs Pelfrey, Williams, and Sisson are former hourly employees of Defendant. (Compl.¶¶ 5, 6, 8.) Plaintiff Jones is currently an hourly employee of Defendant. (Id. ¶ 7.) Plaintiffs Pelfrey, Williams, Sisson, and Jones are eligible to be employed in the United States. (Id. ¶¶ 5-8.) Plaintiffs seek certification of a class consisting of all current and former employees of Defendant legally authorized to be employed in the United States who are or have been employed in hourly wage positions at any time since January 5, 1999, to the present (the "Class").[1] ( 1338 Id. *1338 ¶ 39.)
Defendant is the second largest carpet and rug manufacturer in the United States. (Compl.¶ 2.) Defendant employs approximately 31,780 persons, most of whom are employed in Northwest Georgia. (Id.) Defendant owns or leases at least twenty-six facilities in Georgia. (Id.) Defendant is a Delaware corporation with its principal place of business in Calhoun, Georgia. (Id. ¶ 9.)
B. Plaintiffs' Allegations
Plaintiffs allege that Defendant has engaged in illegal hiring of persons who are not eligible for employment in the United States in an effort to keep costs of labor as low as possible. (Compl.¶ 14.) According to Plaintiffs, Defendant has accepted for employment and continues to employ workers that it knew or had reason to know

were not authorized to work in the United States. (Id. ¶ 15.) Plaintiffs allege that Defendant has knowingly and recklessly accepted false documents or documents that do not match the identity of the person presenting the documents as proof of eligibility for employment. (Id. ¶ 16.) Additionally, Plaintiffs claim that Defendant has knowingly and recklessly accepted proof of eligibility for employment documents reflecting successive different names for a single person. (Id. ¶¶ 17, 19.) Indeed, Plaintiffs allege that when some illegal workers have informed Defendant that they would return to their countries of origin, supervisors employed by Defendant have encouraged those employees to return to the United States and illegally reapply for work at Defendant. (Id. ¶ 18.)
Plaintiffs claim that in an effort to conceal Defendant's employment and harboring of illegal workers, Defendant's employees have destroyed eligibility documents indicating that workers have employed different names and identification papers. (Compl.¶ 20.) Furthermore, according to Plaintiffs, Defendant's employees and supervisors have stated that they are aware that illegal workers can easily obtain false identification and work authorization documents. (Id. ¶ 21.)
Plaintiffs claim that Defendant's employees have traveled to the United States border to recruit illegal aliens. (Compl.¶ 22.) According to Plaintiffs, those employees and other persons then transported the illegal aliens to North Georgia for employment at Defendant's facilities. (Id.) Plaintiffs allege that Defendant has provided incentive to its employees and other recruiters by paying for locating illegal workers that Defendant eventually employs and harbors. (Id.) Plaintiffs contend that Defendant's employees and recruiters have provided housing for illegal workers when the workers arrived in North Georgia, and have aided those illegal workers in finding employment with Defendant. (Id. ¶ 23.)
Occasionally, Defendant audits its workforce and discovers illegal workers are employed with Defendant. (Compl.¶ 24.) According to Plaintiffs, Defendant has not increased the frequency of such audits despite the fact that the audits reveal that a large number of illegal workers are employed at Defendant. (Id.) Furthermore, Plaintiffs allege that when Defendant terminates an illegal worker after discovering that the illegal worker is not authorized to work in the United States, the worker frequently returns to work under a different name. (Id. ¶ 25.) Plaintiffs claim that this practice, termed "recycling," is widespread at Defendant. (Id. ¶ 26.) According to Plaintiffs, Defendant has been further put on notice of illegal workers because many illegal workers artificially inflate their 1339 claimed exemptions, *1339 thus avoiding paying federal income tax. (Id. ¶ 32.)
Plaintiffs allege that law enforcement authorities have raided Defendant's facilities in search of illegal workers. (Compl.¶ 27.) Plaintiffs claim that when such raids have occurred, illegal workers have hidden in barrels or other containers or have fled. (Id.) According to Plaintiffs, the number of illegal workers who run or hide has put Defendant on notice that it employs a large number of illegal workers. (Id.) Moreover, Plaintiffs contend that Defendant's employees and supervisors have assisted illegal workers in evading the law enforcement authorities. (Id. ¶ 28.)
Plaintiffs state that law enforcement authorities have arrested some illegal workers at Defendant's facilities. (Compl.¶ 29.) Plaintiffs further allege that law enforcement authorities have discovered undocumented aliens in possession of paychecks issued by Defendant or identification badges and fraudulent identification documents. ( Id. ¶ 30.)
According to Plaintiffs, Defendant's supervisors have stated that illegal workers are preferable because those workers are more tolerant of working conditions and do not submit claims for workers' compensation. (Compl.¶ 31.) Plaintiffs contend that because many of Defendant's workers are undocumented aliens, Defendant knows that those workers are beholden to Defendant, and thus are unlikely to complain about working conditions or file workers compensation claims. (Id. ¶¶ 36-37.) Consequently, Plaintiffs believe that Defendant saves a considerable amount of money by employing undocumented aliens. (Id. ¶ 37.)
According to Plaintiffs, Defendant's practice of employing and harboring large numbers of illegal workers has allowed Defendant to depress wages; consequently, the wages paid to hourly employees, including the legally employed hourly employees who are members of the Class, are lower than those wages would be if Defendant did not employ and harbor illegal workers. (Compl. ¶ 33.) Plaintiffs allege that Defendant employs tens of thousands of hourly workers in North Georgia (id. ¶ 34), and Defendant's widespread employment and harboring of illegal workers has substantially increased the supply of workers from which Defendant hires its hourly workers

(id. ¶ 35). Plaintiffs contend that because of the increased size of the labor pool, Defendant has depressed the wages it pays to all of its hourly employees, including members of the Class. (Id.) In other words, Plaintiffs claim that Defendant had only hired persons legally authorized to work in the United States, Defendant would have had to pay higher wages to Plaintiffs and the members of the Class. (Id.) Thus, according to Plaintiffs, as a direct and proximate result of Defendant's employment and harboring of illegal workers, the wages that Plaintiffs and the members of the Class have earned have been depressed.
C. Plaintiffs' RICO Claims
1. Pattern of Racketeering Activity
Plaintiffs first allege that Defendant is engaged in an ongoing pattern of racketeering activity as defined by 18 U.S.C.A. § 1961(5) & (8). (Compl.¶¶ 54, 56.) According to Plaintiffs, Defendant has engaged in racketeering activity, namely, an open and ongoing pattern of violations of Section 274 of the Immigration and Nationality Act, 8 U.S.C.A. § 1324(a), more than twice, and the most recent occurrence took place within ten years after the commission of a prior act of racketeering activity. (Id. ¶ 55, 57, 58.) In particular, Plaintiffs allege that Defendant has violated and continues to violate: (1) 8 U.S.C.A. § 1324(a)(3)(A), which makes it a federal crime to 1340 "knowingly hire[ ] for employment *1340 at least 10 individuals with actual knowledge that the individuals are aliens" during a twelve month period (id. ¶ 59); (2) 8 U.S.C.A. § 1324(a)(1)(A)(iii), which makes it a federal crime to "conceal[ ], harbor[ ] or shield from detection, or attempt[ ] to conceal, harbor or shield from detection" aliens that have illegally entered the United States (id. ¶ 60); and (3) 8 U.S.C.A. § 1324(a)(1)(A)(iv), which makes it a federal crime to "encourage[ ] or induce[ ] an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law" (id. ¶ 61). Plaintiffs contend that each violation of 8 U.S.C.A. § 1324 constitutes an act of "racketeering activity" as defined by 18 U.S.C.A. § 1961(1)(F). (Id. ¶ 62.)
According to Plaintiffs, the "racketeering activity" also includes Defendant's open and ongoing violations of 18 U.S.C.A. § 1546(a) by knowingly accepting various false identification documents and other false documents indicating authorization for legal employment, and Defendant's continued violations of 18 U.S.C.A. § 1546(b) by using such documents to fill out I-9 forms. (Compl.¶¶ 63-64.) Plaintiffs allege that each violation of 18 U.S.C.A. § 1546 constitutes an act of "racketeering activity" as defined by 18 U.S.C.A. § 1961(1)(B) as well as O.C.G.A. § 16-14-3(9)(A)(xxix). (Id. ¶¶ 65-66.)
Plaintiffs claim that the acts of Defendant's racketeering activity have the same or similar methods of commission in that those acts involve the knowing employment of illegal workers, the concealment, harboring, and shielding from detection of illegal workers, and the acceptance or use of fraudulent documents in connection with the hiring of illegal workers. (Compl. ¶ 67.) According to Plaintiffs, the acts of racketeering activity have the same or similar objective 0907 i.e. the reduction of wages paid to Defendant's workforce. (Id. ¶ 68.) Plaintiffs allege that the victims of those acts of racketeering activity are the same or similar. (Id. ¶ 69.) Plaintiffs also contend that the distinguishing characteristics of the acts of racketeering activity include the involvement of Defendant, illegal workers, and other third parties who assist in the recruitment and transportation of undocumented aliens. (Id. ¶¶ 70, 76-84.)
According to Plaintiffs, those acts of racketeering activity have occurred over a long period of time, and have become a part of Defendant's regular way of doing business. (Compl.¶¶ 71-73.) Plaintiffs assert that Defendant has committed hundreds, and perhaps thousands, of violations of 8 U.S.C.A. § 1324 and 18 U.S.C.A. § 1546 as part of its racketeering activity. (Id. ¶ 74.) Indeed, Plaintiffs claim that Defendant's racketeering activity has been so pervasive that illegal workers currently constitute a majority of the workforce in many of Defendant's facilities in North Georgia. (Id. ¶ 75.)

2. Enterprise
Plaintiffs also allege that Defendant has engaged in its pattern of racketeering activity through its participation in an association-in-fact enterprise, as defined by 18 U.S.C.A. § 1961(4), with third party employment agencies and other recruiters who supply Defendant with illegal workers. (Compl.¶¶ 76, 79.) Plaintiffs claim that one such recruiter is Temporary Placement Services ("TPS"), which has a formal relationship with Defendant in that TPS employs illegal workers and then loans those workers to Defendant for a fee. (Id.) According to Plaintiffs, other recruiters simply find workers in an area surrounding Brownsville, Texas, and then transport those workers to 1341 Georgia. (Id.) Plaintiffs contend that TPS and other recruiters *1341 also occasionally assist current and prospective illegal workers in assuming new identities. (Id.) Plaintiffs allege that those recruiters share the common purpose of obtaining illegal workers for employment with Defendant. (Id. ¶ 77.) Additionally, Plaintiffs contend that Defendant participates in the operation and management of the affairs of the enterprise, which exists for Defendant's benefit. (Id. ¶ 78.)
Plaintiffs allege that the enterprise affects interstate commerce in that the illegal workers employed by Defendant travel in international and interstate commerce to reach Defendant's facilities in North Georgia. (Compl.¶¶ 80, 81.) According to Plaintiffs, the enterprise also affects interstate commerce in that the wages of legal workers employed with Defendant are depressed. (Id. ¶ 82.) Furthermore, Plaintiffs state that because Defendant is a member of the enterprise and is directly engaged in the production, distribution, and acquisition of goods and services in interstate commerce, the enterprise affects interstate commerce. (Id. ¶ 83.)
According to Plaintiffs, Defendant, by accepting and retaining the benefits of the racketeering activity, ratified the conduct of Defendant's managers, employees, and the members of the enterprise who assisted Defendant in committing those acts of racketeering activity. (Id. ¶ 84.)
3. Causation
Plaintiffs next allege that Defendant's violations of federal and Georgia RICO proximately caused the wages of Plaintiffs and the members of the Class to be lower than their wages otherwise would have been had the labor pool consisted solely of legally employed workers. (Compl.¶ 85.) Thus, Plaintiffs and the Class claim that they have suffered an injury to their business or property. (Id. ¶ 86.) As a result, Plaintiffs contend that Defendant has earned or retained significant funds to which it is not entitled. (Id. ¶ 87.)
D. Procedural Background
On January 6, 2004, Plaintiffs filed this lawsuit. Plaintiffs assert the following claims: (1) a claim that Defendant's conduct violates 18 U.S.C.A. § 1962(c) (Compl. ¶¶ 88-92); (2) a claim that Defendant's conduct violates O.C.G.A. § 16-14-4(a) (id. 93-98); (3) a claim that Defendant's conduct violates O.C.G.A. § 16-14-4(c) (id. 99-105); and a claim for unjust enrichment arising under Georgia law (id. ¶¶ 106-110). Plaintiffs also seek certification of a class pursuant to Federal Rule of Civil Procedure 23. (Id. ¶ 46.)
On February 9, 2004, Defendant filed its Motion to Dismiss pursuant to Federal Rules of Civil Procedure (12)(b) (6) and (12)(b)(1),[2] in which Defendant requests that the Court dismiss Plaintiffs' federal and state RICO claims. Defendant also requests that the Court decline to exercise its pendent jurisdiction over Plaintiffs' state law claims.
1342 *1342 II. Standard Governing Motions to Dismiss
The standard for a court to dismiss a claim is whether "it appears beyond doubt that the plaintiff can prove no set of facts to support his claim." GSW, Inc. v. Long County, 999 F.2d 1508, 1510 (11th Cir.1993) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). When considering a motion to dismiss, the Court "must accept the allegations in the complaint as true, construing them in the light most favorable to the plaintiffs."

White v. Lemacks, 183 F.3d 1253, 1255 (11th Cir.1999). However, "[a]s a general rule, conclusory allegations and unwarranted deductions of fact are not admitted as true in a motion to dismiss." S. Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d 402, 408 n. 10 (11th Cir.1996).
III. Discussion
A. Plaintiffs' Federal RICO Claim
18 U.S.C.A. § 1962(c) provides: "It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt." 18 U.S.C.A. § 1962(c). RICO establishes both civil remedies and criminal penalties for violations of § 1962. See 18 U.S.C.A. §§ 1963-1964. In particular, § 1964(c) provides that "[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee ...." 18 U.S.C.A. § 1964(c). Thus, for a plaintiff to have standing to pursue a private civil cause of action under RICO, the plaintiff must prove the following elements: (1) that the defendant violated § 1962; (2) that the plaintiff sustained an injury to his business or property; and (3) that the violation of § 1962 caused the injury. Avirgan v. Hull, 932 F.2d 1572, 1577 (11th Cir.1991) (citing O'Malley v. O'Neill, 887 F.2d 1557, 1560-61 (11th Cir.1989)). Likewise, to prevail on a civil RICO claim under § 1962(c), the plaintiff must show: (1) the existence of an enterprise; (2) that the enterprise affected interstate commerce; (3) that the defendant was employed by or associated with the enterprise; (4) that the defendant participated, either directly or indirectly, in the conduct of the affairs of the enterprise; and (5) that the defendant participated through a pattern of racketeering activity. United States v. Starrett, 55 F.3d 1525, 1541 (11th Cir.1995).
18 U.S.C.A. § 1961 provides definitions for some of the terms used in § 1962(c). "Racketeering activity" includes a number of "predicate acts" that the racketeer must commit for a violation of RICO. 18 U.S.C.A. § 1961(1). Notably, violations of 8 U.S.C.A. § 1324 and 18 U.S.C.A. § 1546, the predicate acts that Plaintiffs allege Defendant committed, are among those predicate acts listed in § 1961(1). 18 U.S.C.A. § 1961(1)(B) & (F). A "pattern of racketeering activity" is defined as at least two acts of racketeering activity that occurred within ten years after the commission of a prior act of racketeering activity. 18 U.S.C.A. § 1961(5); see Pelletier v. Zweifel, 921 F.2d 1465, 1496 (11th Cir.1991) ("A `pattern' of racketeering activity is shown when a racketeer commits at least two distinct but unrelated predicate acts."). Section 1961 also provides that an "`enterprise' includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals 1343 associated in fact although not a legal entity." 18 U.S.C.A. § 1961(4). Likewise, a "person" liable under § 1962(c) *1343 is defined as "any individual or entity capable of holding a legal or beneficial interest in property." 18 U.S.C.A. § 1961(3).
Defendant contends that the Court should dismiss Plaintiffs' Complaint because: (1) the Complaint does not sufficiently allege the elements of the RICO predicate action; (2) the Complaint fails to identify a legally sufficient RICO enterprise; and (3) Plaintiffs lack standing to assert their RICO claims. The Court addresses each of those arguments in turn.
1. Sufficiency of Pleadings
a. Whether Plaintiffs Failed to Plead Predicate Acts with Particularity
As a threshold matter, the Court addresses Defendant's contention that Plaintiffs' Complaint fails to meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). When pleading a RICO action, it is well-settled that where the predicate act sounds in fraud (e.g. mail fraud, wire fraud, or securities fraud), the plaintiff must plead that predicate act with particularity as required by Federal Rule of Civil Procedure 9(b). Byrne v. Nezhat, 261 F.3d 1075, 1109-10 (11th Cir.2001) (mail fraud); Republic of Panama v. BCCI Holdings (Lux.), 119

F.3d 935, 949 (11th Cir.1997) (wire fraud); Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1380-82 (11th Cir.1997) (mail fraud and wire fraud); Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505, 1511-12 (11th Cir.1988) (securities fraud); see also 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1251.1 n. 13 (citing cases finding that fraud claims brought under RICO must comply with pleading requirements of Rule 9(b)).
As the United States Court of Appeals for the Eleventh Circuit has not yet addressed whether the heightened pleading requirement of Rule 9(b) applies to RICO causes of action premised on non-fraud predicate acts, some ambiguity exists as to whether the particularized pleading requirements of Rule 9(b) apply in all RICO actions. Compare Taylor v. Bear Stearns & Co., 572 F.Supp. 667, 682 (N.D.Ga.1983) (Forrester, J.) ("It seems, however, to this court at least that there are many sound reasons for requiring that, like fraud, [RICO] must be pled with particularity.") and Helicopter Support Sys., Inc. v. Hughes Helicopters, Inc., No. 83-1450-Civ.-T-15, 1984 WL 3238, at *1 (M.D.Fla. June 22, 1984) (same) with Planned Parenthood of Columbia/Willamette, Inc. v. Am. Coalition of Life Activists, 945 F.Supp. 1355, 1380 n. 25 (D.Or.1996) (finding Rule 9(b) inapplicable where predicate acts are extortion and coercion); and United States v. Int'l Bhd. of Teamsters, 708 F.Supp. 1388, 1395-96 (S.D.N.Y.1989) ("This court is not persuaded by the reasoning of the courts that have applied Rule 9(b) to RICO actions not sounding in fraud, and adopts the reasoning of courts that limit the application of Rule 9(b) to fraud based RICO claims."); and United States v. Bonanno Organized Crime Family of LaCosa Nostra, 683 F.Supp. 1411, 1426-27 (E.D.N.Y.1988) (finding "no basis for extending the reach of Rule 9(b) to all RICO cases"). Those courts holding that Rule 9(b) applies in all RICO actions reason such heightened pleading is appropriate in light of the in terrorem effect of pleading RICO and in order to put the RICO defendant on notice of the claim against him. See Taylor, 572 F.Supp. at 682 ("First, the mere invocation of the statute has such an in terrorem effect that it would be unconscionable to allow it to linger in a suit and generate suspicion and unfavorable opinion of the putative defendant unless there is some articulable factual basis which, if true, would warrant 1344 recovery under the statute. Second, the concepts within the statute are so nebulous *1344 that if the cause of action were only generally pled, a defendant would have no effective notice of a claim showing that the pleader is entitled to relief.")
Plaintiffs urge the Court to find that the appropriate pleading standard for non-fraud RICO predicate activities is the standard provided in Rule 8(e)(1). See Fed. R. Civ. Proc. 8(e)(1) ("Each averment of a pleading shall be simple, concise, and direct. No technical forms of pleading or motions are required."). Specifically, Plaintiffs contend that the reasoning underlying Taylor is inapplicable in light of Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985). In Sedima, the United States Supreme Court held that a plaintiff in a RICO action need not allege and prove that the defendant had previously been convicted under RICO. 473 U.S. at 492, 105 S.Ct. 3275. In reaching that conclusion, the Supreme Court dismissed the argument that a RICO conviction should be required to pursue a civil RICO action, stating, "[a]s for stigma, a civil RICO proceeding leaves no greater stain than do a number of other civil proceedings." Id. Plaintiffs urge the Court to conclude that in light of the foregoing language from Sedima, Rule 9(b) is limited to cases that actually involve fraud or mistake, and does not apply in every case where the defendant claims it is stigmatized.
The Court finds Plaintiffs' reasoning persuasive, and finds that the better approach, and certainly the majority approach, is to apply the liberal pleading standards of Rule 8 to RICO actions involving non-fraud predicate activities. Additionally, the Court notes Taylor and Helicopter Support Sys. are distinguishable because the predicate activities in those cases were mail fraud and wire fraud, rather than a non-fraud predicate act.[3] Accordingly, the Court finds that where a predicate act does not sound in fraud, the plaintiff asserting a RICO claim need only comply with the general pleading requirements of Rule 8(e)(1), rather than the heightened pleading requirements of Rule 9(b).[4]
Having determined that Rule 9(b) is inapplicable in cases involving non-fraud RICO actions, the Court next addresses Defendant's argument that the predicate acts enumerated in Plaintiffs' Complaint sound in fraud, and must therefore be pled with particularity. In support of its position, Defendant cites to a string of criminal cases where courts referred to the predicate acts alleged in the instant lawsuit as "acts of fraud." See, e.g., United States v. Rodriguez-Suazo, 346 F.3d 637 (6th Cir.2003); United States v. Thiongo, 344 F.3d 55, 58 (1st Cir.2003); United States v. Hendricks, No. 99-4562, 2000 WL 341914, at *2 (4th Cir. Apr.3, 2000); United States v. Yum, 776

F.2d 490, 491 (4th Cir.1985). Those cases, however, do not require a finding that the predicate acts based on 1345 violations of 8 U.S.C.A. § 1324(a) and 18 *1345 U.S.C.A. § 1546 sound in fraud. The cases relied upon by
Defendant involve defendants who were charged with making false representations, or conspiring to make false representations, to the federal government. By contrast, Plaintiffs do not allege that Defendant made false representations to Plaintiffs or the government; rather, Plaintiffs allege that Defendant has employed and harbored illegal workers. The predicate acts in this case consequently do not sound in fraud. Because the predicate acts in this case do not sound in fraud, the Court finds that Rule 9(b) is inapplicable to this case. Instead, Plaintiffs need only satisfy the requirements of Federal Rule of Civil Procedure 8.
The Court further notes that it has evaluated the Complaint, and finds that it satisfies the requirements set forth in Rule 8. Accordingly, the Court cannot dismiss the Complaint on the ground that Plaintiffs failed to plead the predicate acts adequately.
b. Whether Plaintiffs Failed to Allege All the Elements Required to Plead a Violation of 8 U.S.C.A. § 1324(a)(3)
Defendant also contends that Plaintiffs have failed to plead sufficiently the violation of 8 U.S.C.A. § 1324(a)(3), one of the predicate acts alleged in the Complaint. Specifically, Defendant claims that the Complaint fails to allege all the required elements of § 1324(a)(3), which provides:
(A) Any person who, during any 12-month period, knowingly hires for employment at least 10 individuals with actual knowledge that the individuals are aliens described in subparagraph (B) shall be fined under Title 18 or imprisoned for not more than 5 years, or both.
(B) An alien described in this subparagraph is an alien who 0907
(i) is an unauthorized alien (as defined in section 1324a(h)(3) of this title), and
(ii) has been brought into the United States in violation of [8 U.S.C.A. § 1324(a)].
8 U.S.C.A. § 1324(a)(3). Defendant contends that to plead a violation of § 1324(a)(3) adequately, Plaintiffs must allege that Defendant knowingly hired ten or more aliens and that Defendant itself brought those aliens into the United States.
In support of its position, Defendant relies on System Management, Inc. v. Loiselle, 91 F.Supp.2d 401 (D.Mass.2000). The Court, however, does not agree that the holding of Loiselle is as limited as Defendant insists. In Loiselle, the defendant owner and chief executive officer of a janitorial and custodial services company was sued by two competitor corporations and four former employees. Loiselle, 91 F.Supp.2d at 404. The plaintiffs alleged that the defendant had violated RICO by engaging in racketeering activity including "knowingly hiring at least ten individuals with knowledge that they were `aliens' as described in 8 U.S.C. § 1324(a)(3)(A)." Id. at 408. The defendant argued, and the court agreed, that the RICO claim premised on § 1324(a)(3) should be dismissed because the plaintiffs failed to allege "how the aliens entered the country or whether [the defendant] had knowledge of the purpose for which they entered." Id. The court reasoned that the language of § 1324(a)(3)(B)(ii) "seems to require, in order for liability to attach, that the aliens have been brought into the country by an employer for the purpose of illegal employment." Id. In other words, "the Plaintiffs must allege that [the defendant] had knowledge of how the aliens had been brought into the United States and that they were brought into the United States in violation of this employment provision." Id. Thus, Loiselle holds that simple allegations that the 1346 defendant knowingly hired undocumented aliens are insufficient to *1346 state a claim under § 1324(a)(3); rather, a plaintiff must additionally allege that the defendant knew that the aliens were brought into the United States for the purpose of illegal employment. Loiselle, however, did not hold that the employer itself must have brought the aliens into the United States for a claim to arise under § 1324(a)(3). Accordingly, the Court concludes that for a plaintiff to plead a violation of § 1324(a)(3) adequately, the plaintiff must simply allege that the aliens were brought into the United States in violation of subsection (a), but there is no requirement that the employer must have brought the aliens into this country.

Turning to the Complaint, the Court concludes that Plaintiffs have pleaded adequately the elements of § 1324(a) (3). Specifically, Plaintiffs have alleged that Defendant has hired illegal workers knowing that those workers were "smuggled or otherwise brought" into the United States illegally. (Compl.¶ 59.) See Mendoza v. Zirkle Fruit Co., No. CS-00-3024-FVS, 2000 WL 33225470, at *4 (E.D.Wash. Sept.27, 2000) (finding "the plaintiffs have adequately pled a predicate act ... by alleging that the defendants knew that some of their workers were unlawfully brought into the United States"). Accordingly, the Court denies Defendant's Motion to Dismiss as to this ground.
2. Enterprise
The Court next determines whether the Complaint adequately alleges the existence of a RICO enterprise. Defendant contends that Plaintiffs' Complaint fails as a matter of law to allege that a RICO enterprise existed and that the Court thus must dismiss Plaintiffs' Complaint. Specifically, Defendant claims: (1) that Plaintiffs have not and cannot allege that Defendant participated in the affairs of a RICO enterprise, rather than its own affairs, through the alleged immigration law violations; (2) that Plaintiffs have failed to allege a RICO enterprise distinct from Defendant; and (3) that Plaintiffs have failed to allege the existence of a common purpose and unified structure.
As explained supra Part III.A., 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," 18 U.S.C.A. § 1961(4), and a RICO "person" is "any individual or entity capable of holding a legal or beneficial interest in property," 18 U.S.C.A. § 1961(3). "For the purposes of [§ 1962(c)], the indictment [or complaint] must name a RICO person distinct from the RICO enterprise. The plain language of the statute requires that [those] entities be distinct." United States v. Goldin Indus., Inc., 219 F.3d 1268, 1271 (11th Cir.2000) (hereinafter "Goldin I"). The Eleventh Circuit does not require a strict, formal association of participants; rather, "the existence of an enterprise `is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit.'" United States v. Goldin Indus., Inc., 219 F.3d 1271, 1275 (11th Cir.2000) (hereinafter "Goldin II") (quoting United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981)). "[T]he definitive factor in determining the existence of a RICO enterprise is the existence of an association of individual entities, however loose or informal, that furnishes a vehicle for the commission of two or more predicate crimes, that is, the pattern of racketeering activity requisite to the RICO violation." Id.; United 1347 States v. Elliott, 571 F.2d 880, 897-98 (5th Cir.1978);[5]see also United States v. *1347 Hawes, 529 F.2d 472, 479 (5th Cir.1976) (recognizing that Congress gave the term "enterprise" a very broad meaning). Indeed, "a RICO enterprise may be an `amoeba-like' structure or a loose informal association." Avirgan v. Hull, 932 F.2d 1572, 1578 (11th Cir.1991) (citing United States v. Cagnina, 697 F.2d 915, 921 (11th Cir.1983)).
Notably, the existence of an enterprise is a separate element that the plaintiff must prove 0907 i.e. although a pattern of racketeering activity must be shown by pointing to evidence of the requisite number of racketeering acts by participants in the enterprise, such evidence does not necessarily establish the existence of an enterprise. Turkette, 452 U.S. at 583, 101 S.Ct. 2524. Indeed, "[t]he `enterprise' is not the `pattern of racketeering activity'; it is an entity separate and apart form the pattern of activity in which it engages." Id. Nevertheless, the Eleventh Circuit recognizes that "under our case law, a RICO enterprise need not possess an `ascertainable structure' distinct from the associations necessary to conduct the pattern of racketeering activity." Goldin II, 219 F.3d at 1274-75 (quoting United States v. Weinstein, 762 F.2d 1522, 1537 n. 13 (11th Cir.1985)).
In support of its position that the Complaint fails to allege the existence of an enterprise adequately, Defendant relies heavily on a similar opinion issued by the Seventh Circuit, Baker v. IBP, Inc., 357 F.3d 685 (7th Cir.2004). In Baker, unionized current and former employees of one of the defendant's meat-processing plants filed a class action lawsuit on behalf of all current and former hourly employees at that plant who were authorized to work in the United States. Baker, 357 F.3d at 686. Specifically, the complaint in Baker alleged that nearly half of the employees at the defendant's plant were aliens who were unauthorized to work legally in the United States. Id. The plaintiffs claimed that the defendant turned a blind eye to bogus identification documents, alerted its illegal workers when immigration officials were about to conduct inspections, and paid recruiters to smuggle captured

illegal workers back into the United States for re-employment under pseudonyms. Id. at 687. The complaint further alleged that the defendant had arrangements with immigrant welfare organizations, who referred known undocumented aliens to the defendant for employment. Id. Plaintiffs alleged that as a result of that activity, wages at the defendant's plant were depressed compared with what the defendant would have had to pay if the labor pool consisted only of persons legally authorized to work in the United States. Id.

In affirming the district court's dismissal of the complaint, the Seventh Circuit first concluded that the union representing the plaintiffs was the proper representative with respect to the wages issue rather than the employees individually. The court also concluded that "there [was] another fatal problem in [the] complaint: specification of the `enterprise.'" Baker, 357 F.3d at 691. The complaint alleged that the "enterprise" was the defendant plus the persons and organizations who assisted the defendant in recruitment of illegal workers. The court first noted that the complaint came "perilously close to alleging that [the defendant] plus its agents and employees is the `enterprise,' a theory that won't fly." Id. (citing Bucklew v. Hawkins, Ash, Baptie & Co., 329 F.3d 923, 934 (7th Cir.2003)).

1348 *1348 The court also found that the complaint was flawed for failure to identify a common purpose: "it is not altogether clear how this `association in fact' has a common purpose, an essential ingredient." Id. (citing Turkette, 452 U.S. at 583, 101 S.Ct. 2524). The court took a conservative reading as to whether the members of the "association in fact," had a common purpose concluding that their goals were divergent because the defendant wanted to pay lower wages, the recruiters wanted to be paid for their recruitment services, and the immigrant welfare organizations wanted to assist members of the ethnic group. Id. Consequently, the court found that no common purpose existed. Id.

Finally, the Baker court found that the plaintiffs failed to allege that the defendant operated or managed the purported enterprise through a pattern of racketeering. Baker, 357 F.3d at 692. The court explained that the complaint was insufficient because "[t]he nub of the complaint [was] that [the defendant] operate[d] itself unlawfully 0907 it is [the defendant] that supposedly hires, harbors, and pays the unlawful workers, for the purpose of reducing its payroll." Id. at 361. Specifically, the court stated that "[the defendant] does not manage or operate some other enterprise by violating [8 U.S.C.A. § 1324]; the complaint does not allege 0907 and on appeal plaintiffs do not seek an opportunity to show 0907 that [the defendant] ha[d] infiltrated, taken over, manipulated, disrupted, or suborned a distinct entity or even a distinct association in fact." Id. The Court therefore found that the plaintiffs failed to allege that the defendant operated an enterprise through a pattern of racketeering activity. Id.

Turning to the instant case, the Court first considers Defendant's argument that Plaintiffs have failed to allege that Defendant operated or participated in the affairs of an enterprise through a pattern of racketeering activity. Specifically, Defendant contends that Plaintiffs have failed to allege that Defendant, through its allegedly illegal conduct, operated or participated in the affairs of an "association in fact" as opposed to Defendant's own affairs. In support of its position, Defendant points to various paragraphs in the Complaint that allege that Defendant, as opposed to the purported enterprise, harbored and employed illegal workers in order to reduce the cost of its workforce. (See Compl. ¶¶ 3, 14, 16-18, 59-61; 63-64, 67.)

In response, Plaintiffs argue that the Complaint alleges that Defendant "participates in the affairs of an enterprise that transcends [Defendant] itself and that consists of [Defendant] and various other persons and entities." (Def. Br. Resp. at 7 (emphasis deleted).) Specifically, Plaintiffs point to the following language in the Complaint:

1349

Mohawk has engaged in an open and ongoing pattern of violations of 8 U.S.C. § 1324 and 18 U.S.C. § 1546 during the last five years through its participation in an association-in-fact enterprise with third party employment agencies and other recruiters, including Temporary Placement Services ("TPS"), that supply Mohawk with illegal workers. Each recruiter is paid a fee for each worker it supplies to Mohawk, and some of those recruiters work closely with Mohawk to meet its employment needs by offering a pool of illegal workers who can be dispatched to a particular Mohawk facility on short notice as the need arises. Some recruiters find workers in the Brownsville, Texas area and transport them to Georgia. Others, like TPS, have relatively formal relationships with the company in which they employ illegal workers and then loan or otherwise provide them to Mohawk for a fee. These recruiters are sometimes assisted *1349 by Mohawk

employees who carry a supply of social security cards for use when a prospective or existing employee needs to assume a new identity.
(Compl.¶ 76.) Plaintiffs maintain that given the nature of an association-in-fact enterprise, it is to be expected that the defendant will be engaged in the management of its own affairs 0907 what is most important, however, is that the defendant also participates in the affairs of an enterprise.
Defendant correctly asserts that "liability `depends on showing that the defendants conducted or participated in the conduct of the enterprises's affairs, not just their own affairs.' "Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163, 121 S.Ct. 2087, 150 L.Ed.2d 198 (2001) (quoting Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993)) (internal quotation omitted) (emphasis deleted). The Eleventh Circuit has nevertheless recognized that "the definitive factor in determining the existence of a RICO enterprise is the existence of an association of individual entities, however loose or informal, that furnishes a vehicle for the commission of two or more predicate acts." Goldin II, 219 F.3d at 1275; Weinstein, 762 F.2d at 1537. Here, the Complaint alleges that Defendant participated in the conduct of an enterprise's affairs by paying recruiters for illegal workers and by maintaining a formal relationship with TPS, and that those parties, as an association-infact, provided the means for the commission of a number of immigration law violations. Consequently, the Court finds that Plaintiffs' Complaint sufficiently alleges that Defendant operated or participated in the affairs of an enterprise through a pattern of racketeering activity.
The Court next addresses whether Plaintiffs have failed to allege an enterprise distinct from Defendant itself. Although the Complaint clearly alleges that the other members of the alleged enterprise are independent third parties rather than employees or agents of Defendant (Compl.¶ 76.), Defendant urges the Court to follow Baker, and to find that the Complaint fails to allege the existence of an enterprise.
At this stage in the litigation, however, the Court need only determine whether the Complaint sufficiently alleges the existence of an enterprise separate from Defendant. After consideration of the allegations in the Complaint, the Court concludes that for the purposes of this Motion to Dismiss, Plaintiffs have adequately alleged that the recruiters are separate and independent entities from Defendant. Whether the third party recruiters are in fact agents of Defendant is a factual issue, but for the purposes of the instant Motion Plaintiffs have met their burden to allege that the association-in-fact enterprise consisted of Defendant and separate entities. See Cedric Kushner Promotions, 533 U.S. at 164, 121 S.Ct. 2087 (citing Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339, 344 (2d Cir.1994)); In re Managed Care Litig., 298 F.Supp.2d 1259, 1276-77 (S.D.Fla.2003) (finding complaint sufficiently alleged control and participation in association-in-fact enterprise). Cf. Fitzgerald v. Chrysler Corp., 116 F.3d 225, 228 (7th Cir.1997) ("[W]here a large, reputable manufacturer deals with its dealers and other agents in the ordinary way, so that their role in the manufacturer's illegal acts is entirely incidental, differing not at all from what it would be if these agents were the employees of a totally integrated enterprise, the manufacturer plus its dealers and other agents ... do not constitute an enterprise within the meaning of [RICO]."). Accordingly, 1350 the Court cannot conclude that Plaintiffs have failed to allege *1350 the existence of an enterprise district from Defendant itself.
Defendant next argues that Plaintiffs have failed to allege the existence of an enterprise because the Complaint does not adequately allege the existence of a common purpose among the members of the association-in-fact. Specifically, Defendant claims that rather than alleging a common purpose between Defendant and the recruiters, Plaintiffs' Complaint indicates that the members of the purported enterprise had divergent goals and purposes. ( See Compl. ¶ 22 ("Mohawk has made various incentive payments to employees and other recruiters for locating workers that Mohawk eventually employs and harbors.").) Defendant therefore contends that as a matter of law, no enterprise exists. Defendant cites to the following language in Baker in support of its argument: "[the employer] wants to pay lower wages; the recruiters want to be paid more for services rendered (though [the employer] would like to pay them less); and the [immigrant welfare organizations] want [ ] to assist members of [their] ethnic group." Baker 357 F.3d at 691. Thus, because the members of the enterprise have divergent goals, Defendant concludes that no association-in-fact enterprise exists.
Plaintiffs respond that in this case, the members of the enterprise indeed share a common purpose namely, "the common purpose of obtaining illegal workers for employment by Mohawk." (Compl.¶ 77.) Moreover, Plaintiffs maintain that no authority exists in the Eleventh Circuit for the proposition that divergent individual goals of

persons in a purported association-in-fact enterprise precludes the existence of such enterprise as a matter of law.
The Eleventh Circuit takes a broad approach as to what qualifies as an enterprise. See United States v. Hewes, 729 F.2d 1302, 1310-12 (11th Cir.1984) (upholding jury determination that "`informal, de facto association' existed among the defendants that united them in the common purpose of making money from repeated criminal activity") (quoting Elliott, 571 F.2d at 898); Cagnina, 697 F.2d at 921-922 (finding evidence sufficient to support jury's finding of enterprise where common purpose of making money existed). Because the Complaint in this case explicitly alleges that a common purpose exists 0907 obtaining illegal workers for employment by Defendants 0907 the Court cannot agree with Defendant that Plaintiffs' Complaint is deficient.
In sum, the Court finds that the Complaint adequately sets forth allegations concerning the existence of an enterprise. Specifically, Plaintiffs have sufficiently alleged that Defendant participated in the affairs of a RICO enterprise as opposed to its own affairs, that a RICO enterprise exists distinct from Defendant, and that a common purpose and unified structure exists among the participants in the purported enterprise. Consequently, the Court denies Defendant's Motion to Dismiss on the ground that the Complaint fails to allege the existence of an enterprise.
3. Standing Under RICO
Defendant also argues that Plaintiffs do not have standing to sue because (1) Plaintiffs failed to allege injury to a concrete interest in business or property; and (2) Plaintiffs cannot show that Defendant's alleged violations of 8 U.S.C.A. § 1324 proximately caused Plaintiffs' injuries. The Court discusses each of those arguments in turn.
a. Whether Plaintiffs Have Alleged Injury to their "Business or Property"
1351 The Court turns first to whether Plaintiffs have alleged an injury to their *1351 business or property. Defendant argues that each Plaintiff accepted employment with Defendant at an agreed-upon wage rate, and that Plaintiffs cannot allege an injury to their business or property because Defendant paid each Plaintiff in accordance with those wage rates. In other words, Defendant claims that because it compensated Plaintiffs as the parties agreed, no injury has occurred, and Plaintiffs thus lack standing to pursue this action.
The Court cannot agree that as a matter of law Plaintiffs have failed to allege an injury to their business or property. The premise of Defendant's argument is that Defendant and Plaintiffs were able to bargain freely on a fair wage rate; however, assuming that Plaintiffs have been injured by reason of Defendant's alleged racketeering activities, the presence of illegal workers in the labor pool adversely has affected Plaintiffs' ability to command higher wage rates. In other words, if Plaintiffs are correct regarding issues of causation, Plaintiffs had no power to command higher wage rates due to the influx of illegal workers. Consequently, Plaintiffs' acceptance of lower wages could not act as a waiver of their alleged injuries. See Mendoza, 301 F.3d at 1168 n. 4. ("[W]hat is required is precisely what the employees allege here: a legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes."). Thus, the Court cannot agree with Defendant that Plaintiffs have failed, as a matter of law, to allege an injury to Plaintiffs' business or property. The Court therefore cannot find that Plaintiffs lack standing based on this argument.
b. Whether Plaintiffs Have Alleged Injury "By Reason of" a Violation of § 1962(c)
Defendant further argues that Plaintiffs have not alleged an injury "by reason of" a violation of § 1962(c) and that Plaintiffs consequently cannot show that Defendant's alleged violations caused Plaintiffs' injuries. Section 1964(c) requires a plaintiff to show that he sustained injury "by reason of" the defendant's violation of § 1962. The Supreme Court, in Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 112 S.Ct. 1311, 117 L.Ed.2d

532 (1992), held that the "by reason of" language of § 1964(c) requires a showing of both direct and proximate causation. 503 U.S. at 268-69, 112 S.Ct. 1311. "In order for a pattern of racketeering activity to be a cognizable cause of civil RICO injury to a private plaintiff, one or more of the predicate acts must not only be the `but for' cause of the injury, but the proximate cause as well." Green Leaf Nursery v. E.I. DuPont De Nemours & Co., 341 F.3d 1292, 1307 (11th Cir.2003) (citing Holmes, 503 U.S. at 268, 112 S.Ct. 1311). Thus, for a plaintiff to have standing under RICO, he must allege and prove that "`his injury flowed directly from the commission of the predicate acts.'" Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., Inc., 140 F.3d 898, 906 (11th Cir.1998) (quoting Pelletier, 921 F.2d at 1499).
In analyzing whether a plaintiff has adequately alleged an injury "by reason of" a violation of § 1962(c), the Supreme Court in Holmes recognized that "`the infinite variety of claims that may arise make it virtually impossible to announce a black-letter rule that will dictate the result in every case.'" Holmes, 503 U.S. at 272 n. 20, 112 S.Ct. 1311 (quoting Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 536, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) (footnote omitted)). Thus, "use of the term `direct' should merely be understood as a reference to the proximate-cause enquiry that is informed by the [policy] considerations set out in the text [of the Holmes opinion]." Id. In conducting proximate cause analysis under 1352 RICO, a court must *1352 therefore consider the following policy considerations on a case-by-case basis: (1) whether other parties are in a more suitable position to vindicate the law 0907 i.e. whether the plaintiff is the direct victim of the alleged illegal conduct; (2) whether the court can identify a method to apportion possible recoveries; and (3) whether the damages alleged by the plaintiff are too speculative, that is, whether the court has the ability to identify what portion of the plaintiff's damages arose from the defendant's alleged RICO violations as opposed to other independent conditions. Id. at 273, 112 S.Ct. 1311.
In its Motion to Dismiss, Defendant first contends that Plaintiffs cannot show, and thus cannot allege, that Plaintiffs are the direct victims of Defendant's alleged wrongdoing, and that Plaintiffs consequently are not the best-suited persons to maintain this action. Defendant next contends that Plaintiffs' theory of damages is simply too speculative to support a finding that Defendant's conduct proximately caused Plaintiffs' injuries.[6] The Court addresses each of those arguments in turn.[7]
i. Direct Injury
In the instant action, Defendant first claims Plaintiffs lack standing because the legally authorized hourly workers constituting the putative class are not the direct victims of Defendant's alleged pattern of racketeering activity 0907 i.e. Plaintiffs are not the best persons to vindicate RICO. Defendant relies primarily on Holmes for the proposition that where a plaintiff's injury is derived from a direct injury to a third party, that plaintiff lacks standing to bring an action pursuant to RICO for such "passed-on" injury. Defendant argues that Plaintiffs are not the "first victims" of Defendant's alleged immigration law violations; rather, the direct victims are the undocumented aliens who, because of their status, cannot command equal wages or enjoy equal benefits, such as workers' compensation.
1353 Plaintiffs cite Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir.2002), in which *1353 the Ninth Circuit found that a putative class of legal hourly workers had standing to bring a RICO action against two agricultural companies that had allegedly hired illegal workers, thereby depressing the wages paid to documented workers. 301 F.3d at 1166. Like Defendant in the instant matter, the defendants in Mendoza urged the court to find that the plaintiffs were not the "first victims" of the alleged illegal conduct. The court in Mendoza concluded that because the defendants engaged in illegal conduct to gain "disproportionate bargaining power in employment contracts" with their workers, the legal, documented employees were the direct victims of the defendants' illegal conduct. Because "the [illegal conduct] had the purpose and direct result of depressing the wages paid to [the documented employees] by the growers," the court could not "discern a more direct victim of the illegal conduct." Id. at 1170. The court further explained: "Neither the government nor the undocumented workers are an intervening third party in this scheme, despite the [defendants'] arguments to the contrary." Id.
Plaintiffs also rely on Commercial Cleaning Services, LLC v. Colin Service Systems, Inc., 271 F.3d 374 (2d Cir.2001), in which the Second Circuit held that the plaintiffs, who were competitors of the defendant, adequately stated a direct proximate relationship between their injuries and the defendant's alleged illegal conduct. 271 F.3d

at 381. In that case, a cleaning service brought a RICO class action, alleging that the defendant, also a cleaning service, hired undocumented aliens in violation of 8 U.S.C.A. § 1324, thereby driving down the defendant's cost of employment. Id. at 378. The plaintiff claimed that the defendant's illegal conduct allowed the defendant to charge lower prices for its services, thereby undercutting its competition. Id.
The Commercial Cleaning court applied the Holmes policy considerations, and found that the plaintiffs had suffered direct injury due to the defendant's alleged racketeering activity. Commercial Cleaning, 271 F.3d at 385. Specifically, the Second Circuit reasoned that no class of persons would "have a greater incentive to ensure that a RICO violation does not go undetected or unremedied, and whose recovery would cure the loss suffered by there plaintiffs." Id.
The Court finds Mendoza persuasive, and applies the Mendoza court's reasoning to this case. Here, Plaintiffs clearly allege that their injury is the result of Defendant's attempt to gain a commercial advantage over the employment of its workforce, which directly causes harm to Plaintiffs. Accordingly, the Court finds that the Complaint alleges a direct injury to Plaintiffs. Plaintiffs therefore do not lack standing based on the failure to allege a direct injury.
ii. Speculative Nature of Damages
The Court next considers whether the damages theory alleged in Plaintiffs' Complaint is too speculative to permit Plaintiffs to have standing to pursue their claims. Defendant sets forth a number of arguments in support of its position that the calculation of damages is exceedingly tenuous and speculative. Specifically, Defendant claims that there are numerous other factors that could affect Plaintiffs' wages, such as the demand for labor in the relevant market, the supply of qualified workers, the overall profitability of the industry, and the status of the local, state, national, and international economies.
Defendant also submits that Plaintiffs have failed to allege that Defendant employs a sufficient number of illegal 1354 workers or has such a large presence in the labor market to support a conclusion that any *1354 pay
discrepancies can be attributed to Defendant's allegedly illegal conduct. In particular, Defendant contends that Plaintiffs' allegation that Defendant has assisted "hundreds" of illegal workers is insufficient as a matter of economic sense to cause depressed wages. (See Compl. ¶ 61.) Defendant further submits that if it were paying depressed wages to its employees, Plaintiffs could simply seek employment elsewhere.
Defendant also claims that Mendoza is distinguishable because the defendants in that case enjoyed market power sufficient to give them the power to "define wages in this labor market, akin to a monopsony or oligopsony." Mendoza, 301 F.3d at 1171. Defendant maintains that Plaintiffs have not, and cannot, allege that Defendant has such market power to dictate unilaterally the labor market. Thus, Defendant contends that it is too speculative to gauge the difference between the current level of compensation and the level of compensation that would have existed but for Defendant's alleged illegal conduct.
At this stage in the litigation, however, the Court cannot agree that the damages attributable to Plaintiffs' RICO claims are so tenuous and speculative that the Court should dismiss the Complaint for lack of standing. Simply put, at this point, the Court cannot say that as a matter of law, Plaintiffs have failed to establish that Defendant's alleged RICO violations were the proximate cause of Plaintiffs' depressed wages. Of course, after some discovery it may appear that Plaintiffs' theory is too speculative. At this early juncture, however, the Court cannot dismiss the Complaint for lack of standing on this ground.
iii. Summary
In sum, the Court denies Defendant's Motion to Dismiss on the grounds that Plaintiffs lack standing under RICO to pursue their claims. Specifically, the Court finds that Plaintiffs have sufficiently alleged an injury to their "business or property" and that such injury was proximately caused by Defendant's allegedly illegal conduct. The Court next addresses Defendant's arguments in support of dismissal of Plaintiffs' state law claims.

B. Plaintiffs' Georgia RICO Claims

Plaintiffs' Complaint also includes claims for violations of Georgia RICO, O.C.G.A. § 16-14-4(a) & (c). (Compl.¶¶ 93-105). Defendant contends that Plaintiffs' Georgia RICO claims fail as a matter of law because Defendant, as a corporation, is incapable of violating that statute.

The Eleventh Circuit has recognized that "[u]nder Georgia law, a corporation qua corporation, cannot be held to answer for a crime, and therefore could not violate the Georgia RICO statute." Byrne v. Nezhat, 261 F.3d 1075, 1105 (11th Cir.2001) (citing Cobb County v. Jones Group, 218 Ga.App. 149, 153, 460 S.E.2d 516, 521 (1995)). "This is not to say that a corporation may disregard the law with impunity. If a crime has been committed, the agents of the corporation who are responsible are subject to prosecution." Id.

Because RICO predicate acts are actually criminal offenses, O.C.G.A. § 16-2-22, entitled "Criminal responsibility of corporations," applies when determining whether a corporation is vicariously liable for the actions of its employees. O.C.G.A. § 16-2-22; Cobb County, 218 Ga.App. at 153, 460 S.E.2d at 521. Section 16-2-22 provides that a corporation may be prosecuted for a criminal act or omission only if:

(1) The crime is defined by a statute which clearly indicates a legislative purpose to impose liability on a corporation, and an agent of the corporation performs the conduct which is an element of the crime while acting within the scope of his office or employment and in behalf of the corporation; or

1355

*1355 (2) The commission of the crime is authorized, requested, commanded, performed, or recklessly tolerated by the board of directors or by a managerial official who is acting within the scope of his employment in behalf of the corporation.

O.C.G.A. § 16-2-22(a)(1) & (2).

Defendant first contends that Plaintiffs cannot pursue a Georgia RICO action under § 16-2-22(a)(1) because nowhere in the Georgia RICO statute does any indication of legislative purpose to impose liability on a corporation exist.

The weight of authority supports Defendant's argument. See Clark v. Sec. Life Ins. Co. of Am., 270 Ga. 165, 167 n. 11, 509 S.E.2d 602, 604 n. 11 (1998) ("A corporation may also face prosecution under O.C.G.A. § 16-2-22(a) (1) for a crime if the statute defining the crime clearly indicates a legislative purpose to impose liability on a corporation. RICO, however, in not such a statute because O.C.G.A. § 16-4-4 prohibits only `persons' from engaging in racketeering activity."); Cobb County, 218 Ga.App. at 153, 460 S.E.2d at 521 ("`RICO does not contain in its definition any indication of a legislative purpose to impose criminal liability on a corporation."') (quoting incorporated language of trial court's order). Accordingly, the Court concludes that because the Georgia RICO statute does not expressly and clearly indicate a legislative purpose to impose liability on a corporation for violations of the statute, Plaintiffs cannot avail themselves of § 16-2-22(a)(1) to impose liability for Georgia RICO violations on Defendant.

Notwithstanding the inapplicability of § 16-2-22(a)(1), the Court finds that Plaintiffs may pursue their Georgia RICO claims against Defendant under § 16-2-22(a)(2). As the Georgia Supreme Court held: "criminal liability will attach to the employer for the acts of the employee only if the `crime is authorized, requested, commanded, performed, or recklessly tolerated by the board of directors or by a managerial official who is acting within the scope of his employment in behalf of the corporation.'" Clark, 270 Ga. at 167, 509 S.E.2d at 604 (quoting O.C.G.A. § 16-2-22(a)(2).) It is not fatal to Plaintiffs' Complaint that they have not alleged that Defendant's board of directors or any corporate officers acting within the scope of employment authorized, requested, commanded, performed, or recklessly tolerated violations of Georgia RICO. On the contrary, such facts are a matter of proof; thus, Plaintiffs simply must set forth the necessary proof at trial. State v. Military Circle Pet Ctr., No. 94, Inc., 257 Ga. 388, 389-90, 360 S.E.2d 248, 249 (1987) ("Although the state must prove the applicable provisions of [§ 16-2-22(a)(2)] at trial against a criminal defendant, it is not necessary that the state allege these provisions in the accusation."). At this point, therefore, the Court cannot hold that Plaintiffs' Georgia RICO claims fail as a matter of law for failure to name any managerial official, officer, or similar person of Defendant who would satisfy the

requirements of § 16-2-22. Accordingly, the Court denies Defendant's Motion to Dismiss with respect to Plaintiffs' Georgia RICO claims.[8]
1356 *1356 C. Plaintiffs' Unjust Enrichment Claim
Finally, the Court addresses whether Plaintiffs have stated a claim for unjust enrichment arising under Georgia law (Compl.¶¶ 106-110). Specifically, Plaintiffs claim that Defendant's illegal conduct permits Defendant "to reap substantial wage savings" because Defendant pays Plaintiffs lower wages than what Defendant would otherwise be forced to pay. (Id. ¶ 107). Plaintiffs also claim that Defendant has been unjustly enriched because the hiring of illegal workers has led to a reduced number of worker's compensation claims; therefore, Defendant retains money it otherwise would have to spend on responding to worker's compensation claims. Plaintiffs further allege that Defendant, through the employment of illegal workers and at the expense of Plaintiffs, enjoys larger profits than Defendant would earn if it used legal, authorized workers. (Id. ¶ 109.) Consequently, Plaintiffs claim that Defendant has been unjustly enriched, and that the Court should order Defendant "to disgorge its unlawful profits or otherwise return the full amount of any wage savings and worker's compensation savings that are the direct and proximate result of [Defendant's] unlawful conduct." (Id. ¶ 110.)
Unjust enrichment has been defined in the following manner:
The concept of unjust enrichment in law is premised upon the principle that a party cannot induce, accept, or encourage another to furnish or render something of value to such party and avoid payment for the value received; otherwise the party has been unjustly enriched at the expense of another and, in fairness and good conscience, must reimburse the other to the extent of the value conferred. Inherent in unjust enrichment is the requirement that the receiving party knew of the value being bestowed upon them by another and failed to stop the act or to reject the benefit.
Reidling v. Holcomb, 225 Ga.App. 229, 232, 483 S.E.2d 624, 626 (1997); see also Larkins, Ga. Contracts, § 12-3 (discussing generally unjust enrichment remedy). Recovery under a theory of unjust enrichment "presupposes the absence of a contractual agreement." Fed. Ins. Co. v. Westside Supply Co., 264 Ga.App. 240, 248, 590 S.E.2d 224, 232 (2003) (citing Ga. Tile Distribs., Inc. v. Zumpano Enters., Inc., 205 Ga.App. 487, 488, 422 S.E.2d 906 (1998)). "`The measure of damages under ... unjust enrichment is based upon the benefit conferred upon the [recipient] and not the cost to render the service or cost of the goods.'" Hollifield v. Monte Vista Biblical Gardens, Inc., 251 Ga.App. 124, 130-31, 553 S.E.2d 662, 669 (2001) (addition supplied) (quoting Zampatti v. Tradebank Int'l Franchising Corp., 235 Ga.App. 333, 340, 508 S.E.2d 750 (1998)).
Defendant contends that Plaintiffs' unjust enrichment claim fails because Plaintiffs accepted employment at an 1357 agreed-upon rate. Plaintiffs have not alleged *1357 that Defendant failed to compensate Plaintiffs in accordance
with that rate.[9] In other words, Defendant submits that unjust enrichment is inapplicable where an express contract exists for payment of an item or service, and the defendant avoids payment for that item or service. Defendant notes that in this case, the parties entered into a contract for a certain wage rate and Defendant paid wages in accordance with that contract. At this point in the litigation, however, the Court cannot agree that as a matter of law Defendant has been unjustly enriched by suppressing Plaintiffs' wages. Accordingly, the Court denies Defendant's Motion to Dismiss as to Plaintiffs' unjust enrichment claim as it relates to Defendant's savings in employing Plaintiffs at a diminished wage rate.
The Court notes, however, that Plaintiffs cannot base their claim of unjust enrichment on Defendant's alleged savings with respect to worker's compensation claims. Defendant argues, and the Court agrees, that Plaintiffs lack standing to assert a claim of unjust enrichment as to the amount of money Defendant did not have to spend in dealing with worker's compensation claims. Essentially, the Complaint alleges that because illegal workers tend to refrain from filing worker's compensation claims, and because Defendant consequently spent less money dealing with worker's compensation claims, Defendant enjoyed higher profitability. The Court cannot fathom how higher profit margins due to lower worker's compensation costs are connected in any way to Plaintiffs' receiving lower wages. That is to say, Plaintiffs' labor in no way caused lower worker's compensation costs. Consequently, the Court finds that Plaintiffs cannot claim unjust enrichment as to worker's compensation claims.

IV. Conclusion
ACCORDINGLY, the Court DENIES IN PART and GRANTS IN PART Defendant's Motion to Dismiss [25]. Specifically, the Court DENIES Defendant's Motion to Dismiss as to all Federal and Georgia RICO allegations in Plaintiff's Complaint, DENIES Defendant's Motion to Dismiss as to Plaintiffs' unjust enrichment claim as it relates to Defendant's wage savings in employing Plaintiffs at a diminished wage rate, and GRANTS Defendant's Motion to Dismiss as to Plaintiff's unjust enrichment claim as it relates to Defendant's savings with respect to worker's compensation claims.
[1] Plaintiffs' Complaint also sets forth a number of allegations relating to the certification of a class of Defendant's former and current hourly employees. (See Compl. ¶¶ 39-53.) Those allegations are not relevant to the instant Motion.
[2] Defendant moves to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) only with respect to the elements of 18 U.S.C.A. § 1964(c), which provides the requirements for a plaintiff to have standing to pursue a civil private right of action under RICO. Apparently, some question exists as to whether a motion to dismiss under § 1964(c) is properly characterized as a 12(b)(6) motion (i.e. failure to state a claim upon which relief can be granted) or a 12 (b)(1) motion (i.e. lack of jurisdiction over the subject matter). See Moore v. PaineWebber, Inc., 189 F.3d 165, 169 n. 3 (2d Cir.1999) (applying 12(b)(6), but expressing belief that 12(b)(1) was more appropriate ground for dismissal). The Court appreciates the distinction between 12(b)(1) and 12(b)(6), but concludes that for the purposes of the instant Motion, an analysis under 12(b)(6) suffices.
[3] In Helicopter Support Sys., the plaintiff also asserted a claim for commercial bribery. Helicopter Support Sys. at *1. The court found that the plaintiff failed to show that commercial bribery was a predicate offense under § 1961(1); thus, it was unnecessary to address whether that offense required heightened pleading under Rule 9(b). Id.
[4] Defendant's reliance on Club Car, Inc. v. Club Car Import, Inc. 276 F.Supp.2d 1276 (S.D.Ga.2003), is misplaced. In that case, the plaintiff was required to plead predicate acts of extortion and mail fraud with particularity simply because Local Rule 9.1 for the United States District Court for the Southern District of Georgia requires such specificity. See L.R.S.D. Ga. 9.1 ("All pleadings which allege violations of ..., RICO, and other similar statutes, whether federal or state, shall specifically state each alleged violation.") This Court, however, has no such provision in its Local Rules. Consequently, the Court does not find Club Car applicable in this case.
[5] Opinions of the Fifth Circuit issued prior to October 1, 1981, the date marking the creation of the Eleventh Circuit, are binding precedent on this Court. See Bonner v. City of Prichard, 661 F.2d 1206, 1209-11 (11th Cir.1981) (en banc).
[6] Defendant does not contend that other parties are better-situated to vindicate the aims of RICO. Because the Court concludes that Plaintiffs' injuries, as alleged, are not derivative of injury to a third party, the Court sees no reason why a party other than Plaintiffs should instead pursue this action.
[7] As an initial matter, the Court addresses Defendant's argument that Plaintiffs have standing as to pursue their federal RICO action only as to the predicate act of employing illegal workers. Specifically, Defendant claims that because Plaintiffs cannot show that the predicate acts of harboring and transporting illegal aliens and the use and acceptance of fraudulent documents caused injury to Plaintiffs, Plaintiffs lack standing with respect to those predicate acts.
The Eleventh Circuit has stated that "[i]f no injury flowed from a particular predicate act, no recovery lies for the commission of that act." Pelletier, 921 F.2d at 1497-98 (finding no standing as to predicate act of bankruptcy fraud where predicate act actually benefitted plaintiff). However, "a wrongful act `is a proximate cause if it is a substantial factor in the sequence of reasonable causation.'" Maiz v. Virani, 253 F.3d 641, 675 (11th Cir.2001) (quoting Cox v. Adm'r U.S. Steel & Carnegie, 17 F.3d 1386, 1399 (11th Cir.1994)) (internal quotation marks omitted). Thus, while a predicate act may not be a "but for" cause of a plaintiff's injuries, the plaintiff may

nevertheless have standing to pursue a RICO claim where that predicate act was a substantial factor "in perpetuating [the racketeer's] scheme and in causing significant injury to [the plaintiff]." Id.
With respect to the predicate acts of harboring and inducing illegal aliens and the use and acceptance of bogus identification documents, the Court cannot conclude at this point that those predicate acts do not constitute substantial factors in causing injury to Plaintiffs. Accordingly, the Court concludes that Plaintiffs do not lack standing to claim that those predicate acts proximately caused their injuries.
[8] Defendant also contends that Plaintiffs' Georgia RICO claims fail because Plaintiffs' Complaint fails to allege that violations of 8 U.S.C.A. § 1324 constituted "racketeering activity" for purposes of Georgia RICO. (See Compl. ¶ 62 ("Each violation of 8 U.S.C. § 1324 constitutes an act of `racketeering activity' under [federal RICO], 18 U.S.C. § 1961(F) [sic].").) Plaintiffs respond that Defendant has misread the Complaint, but nonetheless request leave to amend their Complaint to clarify that their Georgia RICO claims are indeed predicated on violations of § 1324.
The Court agrees with Defendant that Plaintiffs' Complaint does not state a cause of action under Georgia RICO with respect to violations of § 1324, but for a different reason than that advanced by Defendant. O.C.G.A. § 16-14-3(9)(A)(xxix) defines "racketeering activity" as including "[a]ny conduct defined as `racketeering activity' under 18 U.S.C. Section 1961(1)(A), (B), (C), and (D)." O.C.G.A. § 16-14-3(9)(A)(xxix). That definition of racketeering activity, however, does not include those acts falling under § 1961(1)(F). Violations of § 1324 appear in subsection (F), thus acts violating § 1324 cannot qualify as predicate acts for purposes of Georgia RICO. Accordingly, the Court finds that Plaintiffs' Complaint can only allege a claim based on Georgia RICO as to 18 U.S.C.A. § 1546. The Court denies Plaintiffs' request to amend their Complaint to clarify that Plaintiffs' Georgia RICO claims are predicated on violations of § 1324 as futile.
[9] This argument is similar to Defendant's argument with respect to whether Plaintiffs alleged an injury to their business or property. See supra Part III.A.3.a.
Save trees - read court opinions online on Google Scholar.

 
 Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 1 of 29

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES and LORA SISSON, individually and on behalf of a class,
Plaintiffs,
vs.
MOHAWK INDUSTRIES, INC.,
Defendant.

) ) ) Civil Action ) File No. 4:04-cv-03-HLM ) ) CLASS ACTION ) ) ) ) ) )

BRIEF IN SUPPORT OF PLAINTIFFS' UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT

Bobby Lee Cook Cook & Connelly 9899 Commerce Street P.O. Box 370 Summerville, GA 30747 Tel: (706) 857-3421 Fax: (706) 857-1520
Howard Foster Foster P.C. 55 W. Wacker Drive Suite 1400 Chicago, IL 60601 Tel: (312) 726-1600

Matthew Thames 1419 Chattanooga Ave. P.O. Box 2203 Dalton, GA 30722 Tel: (706) 278-0466
William V. Johnson Johnson & Bell, Ltd 33 West Monroe Street Chicago, Illinois 60603 Tel. (312) 372-0770

John E. Floyd Joshua F. Thorpe Ronan P. Doherty Nicole G. Iannarone Bondurant, Mixson & Elmore, LLP 3900 One Atlantic Center 1201 W. Peachtree Street Atlanta, GA 30309 Tel: (404) 881-4100 Fax: (404) 881-4111

Attorneys for Plaintiffs

755856.1

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 2 of 29
INTRODUCTION Subject to this Court’s approval, the parties to this action have reached a settlement agreement that provides significant benefits to the proposed class, including an $18 million Settlement Fund and a commitment from Defendant Mohawk Industries, Inc. (“Mohawk”) to conduct training regarding verification of employment eligibility. The settlement relieves both sides of the uncertainty and expense of continued, protracted litigation. For nearly six years, the parties have waged a hardfought battle over plaintiffs’ claim that Mohawk violated the federal and Georgia Racketeer Influenced and Corrupt Organizations (“RICO”) Acts by hiring illegal workers in its Northwest Georgia facilities. No other case based on similar allegations has resulted in more than a $1.3 million settlement, and most such cases have not resulted in any class relief. In the absence of a settlement, this action would likely go on for many more years and the outcome would be uncertain for both sides. The parties’ battle has already included three rulings by the Eleventh Circuit Court of Appeals, a trip to the United States Supreme Court and an initial, now vacated, ruling by this Court that plaintiffs were not entitled to class certification. As matters stand, this Court would, in accordance with the Eleventh Circuit’s most recent ruling, have to make a new determination as to whether plaintiffs are entitled to class certification. If the Court
755856.1
1

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 3 of 29
certified the class, motions for summary judgment, motions to bar plaintiffs’ experts, motions to decertify the class, a trial and more appeals would surely follow. The result of those years of additional litigation would not be guaranteed for either side. The parties and Mohawk’s insurance carrier, Zurich American Insurance Co. (“Zurich”), have thus reached a settlement that meets the requirements of fairness, adequacy and reasonableness.
Plaintiffs Bonnie Jones and Gale Pelfrey move this Court to enter the attached Proposed Order: (1) preliminarily approving the Settlement Agreement; (2) provisionally certifying the proposed Class; (3) preliminarily certifying Plaintiffs Jones and Pelfrey as Class Representatives; (4) preliminarily certifying the undersigned plaintiffs’ counsel as Class Counsel; (5) authorizing the form and manner of Notice to be sent to Class Members concerning the Settlement Agreement; (6) approving the Settlement Agreement’s time frame for exclusion requests (“opt outs”) and objections; and (7) approving a time frame for conducting a formal fairness hearing.
I. Summary of the Class Claims Plaintiffs filed this lawsuit more than six years ago, on January 6, 2004.1 The
four original plaintiffs were current and former hourly employees who worked for
1 See Complaint (Jan. 6, 2004) [Dkt. No. 1]. See also Order at 66-67 (Mar. 3, 2008) [Dkt. No. 190] (recounting procedural history) (“Class Certification Order”).
755856.1
2

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 4 of 29
Mohawk in north Georgia. The two surviving plaintiffs are Gale Pelfrey, a former Mohawk employee, and Bonnie Jones, who still works for Mohawk.2
Plaintiffs alleged that Mohawk had violated the federal and Georgia RICO Acts by hiring illegal aliens. In addition, plaintiffs alleged that Mohawk had harbored illegal workers who were hired and supplied by temporary employment agencies. Plaintiffs alleged this conduct had depressed the wages that they earned for their work at Mohawk from January 1999 forward.
II. Summary of the Litigation The procedural history of the case reflects long and hard-fought efforts by each
side. Mohawk has mounted a staunch defense, challenging plaintiffs at every juncture. And plaintiffs have responded to each such challenge.
A. Mohawk Moved to Dismiss the Complaint. First, Mohawk moved to dismiss the complaint. Because Congress did not add immigration predicates to the RICO statute until 1996, there were, at the time this action was filed, relatively few prior cases in which employees sought to use RICO statutes to recover damages for wage depression allegedly caused by illegal hiring. By the time the Court considered Mohawk’s Motion to Dismiss, a split in the circuit courts
2 Plaintiffs filed Notices of Death for Lora Sisson and Shirley Williams on May 18, 2007 [Dkt. No. 126] and December 10, 2007 [Dkt. No. 169] respectively.
755856.1
3

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 5 of 29
of appeal had developed over the viability of plaintiffs’ legal theories. This Court denied Mohawk’s Motion to Dismiss plaintiffs’ federal and Georgia RICO claims, but the split in authority led to a three-year appeal over whether plaintiffs could pursue their claims for wage depression. After two trips to the Eleventh Circuit and an intervening trip to the U.S. Supreme Court, the case was remanded to this Court so that discovery could begin in February 2007.
B. The Parties Conducted Extensive Discovery. Over an eight-month discovery period, plaintiffs and Mohawk diligently pursued class discovery. In response to plaintiffs’ document requests, Mohawk produced nearly one million pages and over 20 million electronic records. Plaintiffs also deposed Mohawk corporate representatives on the issues of Mohawk’s (1) document management systems and retention efforts; (2) corporate and division structure; (3) wages; (4) hiring policies; and (5) relationships and practices with temporary employment agencies. In addition, plaintiffs took discovery of several temporary employment agencies that had supplied Mohawk with workers in Northwest Georgia. That effort produced an additional 10,000 pages of documents and depositions of seven additional witnesses. In turn, Mohawk took written discovery and deposition testimony from the Class Representatives. In addition, the parties litigated and
755856.1
4

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 6 of 29
resolved a series of discovery-related disputes over Mohawk’s document retention policies and Mohawk’s response to plaintiffs’ document requests.
In the course of conducting class discovery, the parties gathered significant information relevant to the risks of the litigation and the benefits of settlement. For example, the parties have collected and exchanged detailed information and records concerning the size and membership of the class. From Mohawk’s databases and other records, the parties have discovered the volume of hours, wages and benefits paid to the class members. In addition, the parties have uncovered information that relates to the merits of plaintiffs’ action and their ability to establish or contest damages.
C. This Court Denied Class Certification. On December 18, 2007, plaintiffs moved for class certification to pursue both damages and injunctive relief, and Mohawk opposed the motion. In addition to documents and testimony from the parties, both sides presented expert testimony from labor economists and immigration experts. On March 3, 2008, this Court denied class certification. The Court held that plaintiffs had standing and had satisfied the Rule 23(a) requirements of numerosity and adequacy.3 In particular, the Court held that Plaintiffs Pelfrey and Jones were adequate
3 See Class Certification Order [Dkt. No. 190] at 93-97 (numerosity), 108-112 (adequacy).
755856.1
5

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 7 of 29
class representatives, with sufficient knowledge of the claims to represent the Class.4
The Court also held that plaintiffs’ counsel were well qualified to represent the
plaintiffs in this litigation:
Proposed class counsel have considerable experience in class action litigation, and their performance in the litigation to date indicates that proposed class counsel possess the necessary qualifications and experience to conduct the litigation.5
Nevertheless, the Court denied class certification after concluding that plaintiffs had
not met the requirements of commonality, typicality, predominance or superiority for a Rule 23(b)(3) class action.6
On appeal, the Eleventh Circuit vacated this Court’s decision and remanded for
further class certification proceedings. In Williams v. Mohawk Industries, Inc., 568
F.3d 1350, 1355-57 (11th Cir. 2009) (“Williams III”), the court of appeals held that the
proposed class satisfied all the Rule 23(a) requirements, including commonality and
typicality. Williams III, however, remanded for further consideration of whether plaintiffs could meet the Rule 23(b)(3) requirements of predominance and superiority.7
4 Id. at 110-11. 5 Id. at 109. 6 Id. at 97-108. In addition, the Court declined to certify a class to pursue injunctive relief under Rule 23(b)(2) and (c)(4). Id. at 117-22. 7 Williams III, 568 F.3d at 1357-60. The Eleventh Circuit further remanded for further consideration of whether to certify a hybrid class for injunctive relief under Rules 23(b)(2) and (c)(4).
755856.1
6

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 8 of 29

The Supreme Court denied Mohawk’s Petition for Certiorari to review Williams III on November 2, 2009.8 The conflicting decisions of this Court and the Eleventh Circuit

regarding whether class certification is appropriate illustrate the risks for both sides in

this litigation.

D.

The Parties Engaged in Settlement Efforts.

Like the litigation that precedes it, the Settlement Agreement the parties now

propose to the Court is the product of long and hard-fought negotiations. Over the

course of the dispute, the parties made several attempts at settlement negotiations. The

Eleventh Circuit first required the parties to discuss settlement in 2005, at the outset of

Mohawk’s interlocutory appeal in Williams I. The parties next tried to conduct their

own settlement negotiations in the spring of 2007, but those discussions broke down.

The parties did not have any additional settlement discussions until the Eleventh

Circuit again required mediation in late 2008 as part of plaintiffs’ appeal in Williams

III. Although the parties spent a day with an Eleventh Circuit mediator and continued

to discuss a possible resolution over the following months, they were unable to make

any significant progress towards settlement.

Settlement discussions did not resume until the Eleventh Circuit vacated the

denial of class certification in Williams III. At that point, Mohawk’s insurance carrier,

8 Mohawk Industries, Inc. v. Williams, 130 S. Ct. 500 (2009).
755856.1
7

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 9 of 29
Zurich, joined the discussions and the parties engaged Hunter Hughes, a private mediator in Atlanta, Georgia. As the Court knows, Mr. Hughes is an experienced, diligent and talented mediator who has helped settle numerous difficult and highprofile cases.9 The parties worked with Mr. Hughes for several months, including a full day mediation session with representatives for Mohawk, Zurich and plaintiffs’ counsel. After four months of hard-fought negotiations, however, the parties remained at an impasse.
On December 2, 2009, the parties’ counsel, counsel for Zurich and the mediator attended a Court-ordered a status and settlement conference, at which the Court urged the parties to take full account of the risks of further litigation in this matter and to redouble their efforts to settle the case. After another full day of mediation, the parties preliminarily reached agreement on the terms of a settlement and then prepared the Settlement Agreement, attached hereto as Exhibit 1.
III. Summary of the Proposed Settlement
9 See, e.g., Ingram v. Coca-Cola Co., 200 F.R.D. 685, 687 (N.D. Ga. 2001) (noting Mr. Hughes’ involvement in settling the Coca-Cola Title VII class action); Tucker v. Walgreen Co., No. 05-440, 2007 WL 2915587, at * (S.D. Ill. Oct. 5, 2007) (Mr. Hughes successfully mediated an employment class action against Walgreens).
755856.1
8

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 10 of 29
The proposed settlement requires Mohawk and Zurich to establish a Settlement Fund of $18 million.10 The proposed settlement also requires Mohawk to conduct annual training regarding verification of employment eligibility and to maintain a telephone hotline to receive reports of alleged employment eligibility violations.11
The Settlement Agreement requires Mohawk and Zurich to establish a Settlement Fund Account with initial deposits totaling $12 million within seven business days after preliminary approval. Zurich is then required to deposit up to an additional $6 million to bring the Settlement Fund Account up to $18 million as necessary. The individual awards to Class Members will be based in part on each Class Member’s length of service at Mohawk in hourly jobs at facilities covered by the Class Definition. As a result, the longer a Settlement Class Member worked for Mohawk, the more substantial the award to that Class Member. Distributions from the Settlement Fund Account will proceed as follows:
The Class Representative Service Awards. The parties have agreed that the two surviving class representatives, Bonnie Jones and Gale Pelfrey, may apply for awards of up to $25,000 each in recognition of their service to the Class.12
10 See Settlement Agreement ¶ III(A). 11 Id. ¶ II. 12 Id. ¶ III(D)(1).
755856.1
9

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 11 of 29
The Administration, Withholding, Expense and Fee Award. The proposed settlement contemplates that Class Counsel will apply for an award of up to one-third of the Settlement Fund (up to $6 million) to (1) pay the costs of settlement administration, which will likely be approximately $285,000; (2) pay employer withholding obligations on the wage portion of the awards to individual Class Members; (3) reimburse Class Counsel for the expenses they have advanced and incurred to prosecute this case (Class Counsel estimate that such expenses totaled approximately $365,000 as of December 31, 2009); and (4) pay attorneys’ fees. Mohawk and Zurich have agreed that they will not oppose any of this application.13
Supplemental Settlement Administration Payment. In the event the costs of settlement administration and the employer withholding obligations exceed $500,000, a supplemental payment will be made from the Settlement Fund.14
Awards to Individual Class Members. After deduction of the foregoing items, the remainder of the Settlement Fund will be allocated 1/3 to a Wages Fund and 2/3 to a Non-Wages Fund.15 Those funds will then be distributed to the Class Members according to their length of service at Mohawk. First, the Settlement Agreement
13 Id. ¶ III(B)(2). 14 Id. ¶ III (B)(3). 15 Id. ¶ III (B)(4).
755856.1
10

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 12 of 29
provides that each Class Member will receive a Base Award depending on their length of their employment at Mohawk:
• Class Members with 1 to 29 days of service will receive a base award of $25;
• Class Members with 30 to 90 days of service will receive a base award of $75; and
• Class Members with 90 days of service or more will receive a base award of $150.16
One third of each such Base Award shall be paid from the Wages Fund and the remaining 2/3 of each such Base Award shall be paid from the Non-Wages Fund.
Second, the Settlement Agreement provides that each Class Member shall also be allocated an Additional Award calculated as a pro-rata share of the Settlement Fund that remains after making the Base Awards. Those pro rata shares will be calculated by taking each Class Member’s days of service as a percentage of the total days of service for all Class Members. Accordingly, the longer a Class Member worked at Mohawk the higher his or her pro rata share of the remaining funds and his or her Additional Award will be. Like the Base Award, 1/3 of each such Additional Award shall be paid from the Wage Fund and 2/3 of the Additional Award shall be paid from the Non-Wage Fund. 16 Id. ¶ III(C)(1).
755856.1
11

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 13 of 29
Each Class Member will be allocated an Individual Wages Fund Award and an Individual Non-Wages Fund Award. The Individual Wages Fund Award will consist of 1/3 of the individual’s Base Award and Additional Award. The Individual NonWages Fund Award consists of 2/3 of each Class Member’s Base Award and 2/3 of the Class Member’s Additional Award.
To claim their individual awards, Class Members must complete and timely return a Claim Form and Release. While the precise amount allocated for individual awards cannot be determined until the Court determines the other awards set forth above, the amount allocated for individual Class Members awards is likely to be $11,950,000 or more. Any awards not claimed by Class Members shall revert to Zurich. In the event that more than fifty percent of the approximately 48,000 Class Members file a claim, Zurich has the right, but not the obligation, to terminate the Settlement Agreement.17
The Settlement Agreement requires Mohawk to conduct annual training on the federal and Georgia laws relating to verifying employment eligibility. In addition, Mohawk has agreed to maintain a hotline to which callers may anonymously report alleged violations of federal and Georgia law relating to the verification of
17 Id. ¶ IV.
755856.1
12

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 14 of 29
employment eligibility at the Mohawk facilities included within the Class Definition.18 The Settlement Agreement requires Mohawk to maintain these efforts for two years after the effective date of the settlement. These provisions benefit the class by helping ensure that Mohawk’s compliance processes deter the employment of illegal workers.
In accordance with Rule 23(e)(3), the parties state that the Settlement Agreement is the only agreement the parties have made in connection with this proposed settlement. IV. The Court Should Approve the Proposed Settlement
A. The Law Governing Approval of Class Settlements Rule 23(e) requires court approval of any class action settlement.19 In Bennett v. Behring Corporation, the Eleventh Circuit held that the purpose of this review is to
18 Id. ¶ II. 19 The Class Action Fairness Act (“CAFA”) does not apply to this case because this action was filed prior to the statute’s effective date of February 18, 2005. See Pub. L. 109-2, § 9, Feb. 18. 2005, 119 Stat. 14 (“The amendments made by this Act [CAFA] shall apply to any civil action commenced on or after the date of enactment of this Act [February 18, 2005].”); Tmesys, Inc. v. Eufaula Drugs, Inc., 462 F.3d 1317 (11th Cir. 2006) (same). In any event, this settlement does not (a) involve coupons or (b) present the prospect of a net loss by class members or (c) discriminate based on geographic location of class members, which are the three specific settlement concerns addressed by that Act. See 28 U.S.C. §§ 1712-14.
755856.1
13

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 15 of 29
ensure the class settlement is “fair, adequate and reasonable and is not the product of collusion between the parties.”20 The approval process occurs in several steps.
First, the district court conducts a preliminary evaluation of the fairness and adequacy of the settlement to determine whether there is good reason to schedule a full fairness hearing and notify the settlement class.21 “The purpose of this cursory examination is to detect defects in the settlement that would risk making ‘notice to the class, with its attendant expenses, and a hearing ... futile gestures.’”22 The Court’s task, therefore “is to conduct a threshold examination of the overall fairness and adequacy of the settlement in light of the likely outcome and the cost of continued litigation.”23 If the settlement appears to be fair and adequate upon a preliminary examination, then the Court directs the plaintiffs to send notice of the proposed
20 737 F.2d 982, 986 (11th Cir. 1984) (quoting Cotton v. Hinton, 559 F.2d 1326, 1330 (5th Cir. 1977)). 21 See Manual for Complex Litigation (Fourth) § 21.632 at 320-21; In re Skinner Group, Inc., 206 B.R. 252, 261-62 (Bankr. N.D. Ga. 1997). See e.g., Order Granting Preliminary Approval of Partial Settlement With Covenant Funeral Service of Chatanooga, LLC, In re Tri-State Crematory Litig., MDL No. 1467 (Oct. 4, 2004). 22 In re Electronic Data Sys. Corp. “ERISA” Litig., 2005 WL 1875545, at *4 (E.D. Tex. June 30, 2005) (quoting Newberg on Class Actions § 11:25 (4th ed. 2002)). 23 In re Inter-Op Hip Prosthesis Liability Litig., 204 F.R.D. 330, 350 (N.D. Ohio 2001) (citation omitted).
755856.1
14

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 16 of 29
settlement to the class. After receiving any objections from the class members, the court conducts a final fairness hearing on approval.24
At this final fairness hearing, Bennett directs the district court to evaluate the settlement in light of the following factors “(1) the likelihood of success at trial; (2) the range of possible recovery; (3) the point on or below the range of possible recovery at which a settlement is fair, adequate and reasonable; (4) the complexity, expense and duration of litigation; (5) the substance and amount of opposition to the settlement; and (6) the stage of proceedings at which the settlement was achieved.”25 The district court evaluates these six factors in light of “the strong judicial policy favoring settlement as well as by the realization that compromise is the essence of settlement.”26 “‘[A]ccordingly class-action settlements will be disapproved only upon ‘considerable circumspection.’”27
24 See generally Manual for Complex Litigation, Fourth, § 21.632 at 320-21; In re Skinner, 206 B.R. at 261-62; McNamara, 214 F.R.D. at 426; In re Prudential Ins., 962 F. Supp. at 562. 25 Bennett, 737 F.2d at 986; see also Sterling v. Stewart, 158 F.3d 1199, 1204 (11th Cir. 1998). 26 See also United States v. Alabama, 271 Fed. Appx. 896 (11th Cir. 2008); United States v. City of Miami, 614 F.2d 1322 (5th Cir. 1980) 27 Mashburn v. National Healthcare, Inc., 684 F. Supp. 660, 667 (M.D. Ala. 1988) (quoting Jamison v. Butcher & Sherrerd, 68 F.R.D. 479, 481 (E.D. Pa. 1975)).
755856.1
15

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 17 of 29
B. The Court Should Grant Preliminary Approval of the Settlements This proposed settlement is at the first stage described above, in which the Court’s task is to “determine whether notice of the proposed settlement pursuant to Rule 23(e) should be given to class members” and a fairness hearing conducted.28 With an eye towards the factors for final approval identified in Cotton and Bennett, the Court should grant preliminary approval of these settlements and order that notice be sent to the Class.
1. The Proposed Settlement Is Reasonable in Light of the Possible Recovery and Uncertainty of Outcome at Trial.
The first three factors identified by the Eleventh Circuit essentially require the Court to consider the reasonableness of the settlement in light of the possible recovery and risk of loss.29 Plaintiffs’ claims have survived six years of litigation and appeals, and with a potential class of 48,000 employees and an eleven-year class period, they may prove valuable. However, plaintiffs still face the hurdle of obtaining class certification, which this Court initially denied. Even if plaintiffs obtained class certification, their claims and alleged wage depression damages remain difficult to prove. To litigate the case through trial, plaintiffs and Mohawk would have to devote many more years and resources to the case. After that, the result would turn on the
28 2 H. Newberg and A. Conte, Newberg on Class Actions § 11.25, at 11-36 (3d ed. 1992). 29 See Bennett, 737 F.2d at 986.
755856.1
16

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 18 of 29
decision of a jury that might decide to award nothing. The proposed settlement
eliminates all those risks and expenses and replaces them with a certain recovery for
any Class Member who does not opt out.
In addition, the Court can and should consider the reasonableness of the
proposed settlement in light of the far less favorable results that have been obtained in
other similar cases.30 The parties are aware of several similar actions that have been
resolved with no benefit for the employee class members. For example, in Baker v.
IBP, Inc., the employees’ claims were dismissed on the pleadings.31 In Trollinger v.
30 See, e.g., Manual for Complex Litigation (Fourth) § 21.62 at 316 (district court can consider “the comparison of the results achieved for individual class . . . members by the settlement or compromise and the results achieved . . . for other claimants pressing similar claims”). 31 357 F.3d 685 (7th Cir. 2004). Accord Nichols v. Mahoney, 608 F. Supp.2d 526 (S.D.N.Y. 2009) (dismissing similar wage depression claims by employees); Hager v. ABX Air, Inc., Civil Action File No. 2:07-cv-317, 2008 WL 819293 (S.D. Ohio Mar. 25, 2008) (granting-in-part motion to dismiss similar claims; plaintiff later dismissed remaining claims without prejudice); Cruz v. Cinram, Inc., Civil Action File No. 4:08cv-342, Final Dismissal Order [Dkt. No. 52] (N.D. Ala. Nov. 12, 2008) (dismissing RICO claims after plaintiff failed to file an amended complaint); Zavala v. Wal-Mart Stores, Inc., 393 F.Supp.2d 295 (D.N.J. 2005) (dismissing RICO claims); System Management, Inc. v. Loiselle, 91 F.Supp.2d 401 (D. Mass. 2000) (dismissing employees’ claims). Cf. also Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969 (9th Cir. 2008) (affirming the dismissal of county’s attempt to hold employers’ liable for immigration violations under RICO statute); DelRio-Mocci v. Connolly Properties, Inc., Civil Action File No. 08-2753, 2009 WL 971394 (D.N.J. Apr. 9, 2009) (dismissing immigration based RICO claims against apartment owner); Powell v. WalMart Stores, Inc., Civil Action File No. 1:06CV00603, 2007 WL 987321 (N.D. Ohio Mar. 30, 2007) (dismissing employee’s claim for personal injury based on illegal hiring RICO claims against employer).
755856.1
17

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 19 of 29
Tyson Foods, Inc., the district court certified a class but granted summary judgment against the employee class.32 The result was the same in Marin v. Evans Fruit Co.,
where the plaintiffs filed suit in 2006 and the court certified a class in 2008. After merits discovery, the court granted summary judgment against the employee class.33
And in Cunningham v. Offshore Specialty Fabricators, Inc., where the plaintiff-
employees filed suit in 2004, the district court granted summary judgment on their RICO claims on April 1, 2010.34
The parties are further aware of additional cases in which the litigation has
proceeded for years and the employees have yet to recover anything against the
defendants. For example, in Brewer v. Salyer, the plaintiffs filed suit in September
2006 and the court certified a class in May 2009, but the employer has filed for
bankruptcy and the plaintiffs remain in merits discovery in their case against the employer’s president.35 In Valenzuela v. Swift Beef Co., the plaintiffs filed suit in
32 See Trollinger v. Tyson Foods, 543 F. Supp.2d 842 (E.D. Tenn. 2008). Marin v. Evans Fruit Co., 2:06-cv-03090 (E.D. Wash) (summary judgment granted for employer) 33 Civil Action File No. CV-06-3090, 2008 WL 5377915 (E.D. Wash. Dec. 23, 2008). 34 See Cunningham v. Offshore Specialty Fabricators, Inc., 5:04-cv-00282, Summary Judgment Order [Dkt. No. 519] (E.D. Tex. Apr. 1, 2010), available on PACER. 35 Civil Action File No. 1:06cv1324, 2010 WL 144423 (Jan. 11, 2010 E.D. Cal. 2010). See also Hall v. White, Civil Action File No. 3:07-cv-484, Joint Notice Regarding Case Status [Dkt. No. 141] (N.D. Ala. Mar. 5, 2010) (plaintiffs filed suit against employer’s officers in March 2007; any claims against employer were discharged in bankruptcy on Dec. 10, 2009).
755856.1
18

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 20 of 29
2006, the court denied class certification in January 2009 and the parties then agreed to terminate the case.36 And in Hernandez v. Balakian, the plaintiffs filed suit in 2006 but dismissed without prejudice two years later.37 In fact, Mendoza v. Zirkle Fruit Co., which resulted in a settlement fund of approximately $1.3 million, is the only other case in which employees recovered anything from pursuing similar claims.
In light of this history, the proposed settlement in this case easily meets Rule 23(e)’s standard that the settlement be “fair, reasonable, and adequate.” First and foremost, the $18 million Settlement Fund here is more than ten times higher than the fund in the only other case to produce a financial benefit for employee class members. In addition, this proposed settlement includes the training and hotline features that benefit the Class by helping ensure that Mohawk’s hiring and compliance processes deter the employment of illegal workers. As a result, the proposed settlement provides the Class Members with significant benefits that would be uncertain and much delayed by further litigating the case.
2. The Proposed Settlement Is Reasonable in Light of the Complexity, Expense and Duration of the Litigation.
36 Civil Action File No. 3:06-cv-02322 (N.D. Tex), Order denying class certification [Dkt. No. 91] and Stipulation of Dismissal With Prejudice [Dkt. No. 92], available on PACER. 37 No. 1:06-cv-01383 (E.D. Cal.) (filed in 2006, dismissed without prejudice in 2008). See also Motino v. Toys “R” Us, Inc., Civil Action File No. 2:06-cv-00370, (D.N.J. Apr. 1, 2009) (plaintiffs filed suit in January 2006 and dismissed without prejudice on Apr. 1, 2009).
755856.1
19

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 21 of 29
The Eleventh Circuit has also directed district courts to consider the reasonableness of proposed class settlements in light of “the complexity, expense and duration of litigation.” Bennett, 737 F.2d at 986. This factor also favors preliminary approval of the proposed settlement because further litigation will be highly complex, expensive, and uncertain. The proposed settlement offers the Class a certain and substantial recovery and reforms Mohawk’s hiring practices. There is no assurance of any recovery—let alone a more substantial recovery—if the litigation continues.
This case has already been pending for over six years. It has been hard-fought, time-consuming, and expensive. The Class Representatives have already devoted significant time and attention to participating in the litigation. Class Counsel have invested hundreds of thousands of dollars in expenses as well as millions of dollars in attorney time to litigate the case. Mohawk has made similar investments in expenses and attorneys’ fees to defend the case.
Despite all that effort and expense, there remains much work to do before this case can be tried. After six years, the case remains in the class certification stage. Following Williams III, there is no guarantee that such a class will be certified. And even if this Court certifies a class, further requests to appeal—with all the attendant delay and expense—will certainly follow.
In addition, the parties will have to devote years to further merits and expert discovery. Motions for summary judgment and to exclude expert testimony will
755856.1
20

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 22 of 29
follow. And in the event plaintiffs’ claims survive, the resulting trial would take many months to prepare and many weeks of court time to try. Neither side can predict what result a jury might return. But both sides can predict with certainty that those proceedings will require years of additional litigation, hundreds of thousands of dollars in expenses, and many millions in attorneys’ fees. Considering “the complexity, expense and duration” of continued litigation, the Court should preliminarily approve the Settlement Agreement.
3. The Proposed Settlement Is Reasonable in Light of the Stage of the Proceedings at Which It Has Been Achieved.
Finally, this Court must consider “the stage of proceedings at which the settlement was achieved.” Bennett, 737 F.2d at 986. This factor also supports preliminary approval because the parties have already spent more than six years litigating this case. Settlements have been approved and affirmed on appeal in this Circuit at far earlier stages of litigation or discovery.38
The settlement negotiations themselves have been lengthy. The parties have made several efforts to resolve the case, beginning in February 2007. Even this last round of negotiations, conducted with the aid of an experienced, independent mediator,
38 See, e.g., Cotton, 559 F.2d at 1332 (affirming approval of settlement with little formal discovery); Mashburn, 684 F. Supp. at 669 (“The law is clear that early settlements are to be encouraged, and accordingly, only some reasonable amount of discovery should be required to make these determinations [regarding the fairness of the settlement].”).
755856.1
21

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 23 of 29
has taken more than six months to complete. Moreover, it was not until the Court urged the parties to redouble their efforts that the impasse was broken and the parties reached the Settlement Agreement now before the Court.
IV. The Court Should Certify a Settlement Class. Where the case is presented for class certification and settlement at the same
time, the “judge should make a preliminary determination that the proposed class satisfies the criteria of Rule 23(a) and at least one of the subsections of Rule 23(b).”39 Accordingly, the Court should preliminarily certify the following class for settlement:
All persons legally authorized to be employed in the United States who are or have been employed in hourly positions in Georgia by Mohawk Industries, Inc., its subsidiaries or affiliates at any time from January 1, 1999 to December 31, 2009 (the “Class Period”), other than an Excluded Employee (the “Class” or the “Class Definition”). An “Excluded Employee” is an employee whose employment at Mohawk has been limited to: Dal-Tile, Unilin, or Mohawk facilities in Milledgeville, Dublin, Tifton, Norcross, Kennesaw, or Atlanta, Georgia. After the substantial class certification proceedings in this Court and in the Court of Appeals, it is clear that this Class should be certified for settlement purposes. In 2007, this Court held that the proposed class satisfied most of Rule 23(a)’s requirements, including the requirement that plaintiffs and their chosen counsel were
39 Manual for Complex Litigation (Fourth) § 21.632 at 321.
755856.1
22

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 24 of 29
adequate to represent the class. In Williams III, the Court of Appeals further held that the proposed class satisfied all the elements of Rule 23(a).40
Williams III remanded for a practical assessment of whether common proof of injury would predominate and whether class certification was superior to requiring the individual plaintiffs to prosecute their own claims in separate trials.41 The parties’ agreement to settle the case resolves those issues entirely, however, because any questions about common proof of injury are—fundamentally—questions about the manageability of proof at trial. As the Supreme Court held in Amchem Prods., Inc. v. Windsor, those manageability concerns present no obstacle to certifying a settlement class: “Confronted with a request for settlement-only class certification, a district court need not inquire whether the case, if tried, would present intractable management problems, for the proposal is that there be no trial.”42 As a result, this Court has recognized that “[u]nder Amchem, manageability concerns are eliminated in the settlement class context[.]”43
40 Williams III, 568 F.3d at 1355-57. 41 Id. at 1357-59. 42 Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997) (citation omitted). 43 Ingram v. Coca-Cola Co., 200 F.R.D. 685, 697 (N.D. Ga. 2001) (Story, J.) The parties reserve their respective positions on whether the class should be certified in the absence of a settlement.
755856.1
23

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 25 of 29
In addition, certifying the class for the purposes of settlement is superior to resolving the plaintiffs’ claims in a host of individual trials. Indeed, this Court has already held that most of the factors that Rule 23(b)(3) identifies for considering superiority favor class certification in this case.44 As in Ingram v. Coca-Cola Co., another employee class action, class certification and settlement allows all the class members an opportunity to receive compensation for their claims without incurring the risks and expense necessary to pursue an individual lawsuit.
Resolution of class members’ claims for injunctive and monetary relief in this single class action is superior to resolution of this controversy through the filing of a host of individual actions. Class treatment is superior as a matter of efficiency, consistency, and ensuring that class members actually obtain relief. . . . Class treatment is also superior because it removes real barriers to class members obtaining relief. Absent class treatment, each employee would have to incur the difficulty and expense of filing an individual claim and would have to take the personal risk of litigating directly against his or her current or former employer. Many employees would likely be unable to bear such costs and risks.45
As a result, the Court should provisionally certify the class and appoint Jones and Pelfrey as Class Representatives and plaintiffs’ counsel as Class Counsel. V. SCHEDULE FOR SETTLEMENT APPROVAL
The Settlement Agreement requires the Class Administrator to mail Notice within 30 days after the Court grants preliminary approval of the Settlement
44 See Class Certification Order [Dkt. No. 190] at 132-34. 45 Ingram, 200 F.R.D. at 701.
755856.1
24

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 26 of 29
Agreement.46 The Settlement Agreement then sets a timetable for filing claims as well as deadlines for Class Members who wish to exclude themselves from the Class or object to the Settlement Agreement, all based on the date of Notice.47
A. The Notice The parties propose to have the Claims Administrator mail individual notice to the class members using the addresses contained in Mohawk’s databases as updated by the National Change of Address database or similar databases. A proposed Notice of Class Action, Proposed Settlement Agreement and Settlement Hearing, upon which the parties have agreed, is attached as Exhibit A to the Settlement Agreement. The Notice sets forth the material terms of the proposed settlement and comports with Rule 23 and the requirements of due process. In addition, the Notice directs class members to a website where they can obtain information about the settlement. The Notice sets forth the allocation method that will govern the distribution of the Settlement Fund, describes the procedures for exclusion requests ("opt outs") and objections, and specifies the date, time and place of the formal fairness hearing. B. Proposed Schedule for Final Approval Once the Court grants preliminary approval, the Settlement Agreement establishes, inter alia, the following schedule:
46 Settlement Agreement ¶ V(C). 47 Id. ¶¶ III(C)(2), V(D).
755856.1
25

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 27 of 29

Day 0 By Day 30

Preliminary Approval Claims Administrator mails Notice

By Day 75

Objections and Opt Outs must be received

Day 90-105

Court holds Settlement Hearing to rule on final approval

Day 120

Deadline for Class Members to postmark Claim Forms and Releases

+17 days

Zurich’s deadline to exercise Termination Option, if triggered; absent exercise of Termination Option, Court enters final judgment

+ 30 Days

Absent appeal, Settlement Agreement becomes final and binding

+20 Days

Individual awards mailed

CONCLUSION

Plaintiffs respectfully request that the Court preliminary approve the settlement

and enter the Proposed Order attached hereto as Exhibit 2. This 9th day of April 2010,

Respectfully submitted:

/s/Ronan P. Doherty Georgia Bar No. 224885 doherty@bmelaw.com

755856.1
26

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 28 of 29
CERTIFICATE OF COMPLIANCE Pursuant to Local Rule 7.1D of the Local Rules for the United States District Court for the Northern District of Georgia, I hereby certify that the foregoing pleading has been prepared in Times New Roman, 14 point font, as permitted by Local Rule 5.1B.
/s/Ronan P. Doherty Georgia Bar No. 224885 doherty@bmelaw.com
755856.1

Case 4:04-cv-00003-HLM Document 224-3 Filed 04/09/2010 Page 29 of 29

CERTIFICATE OF SERVICE I hereby certify that I have electronically filed the within and foregoing BRIEF IN SUPPORT OF PLAINTIFFS' UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT with the Clerk of Court using the CM/ECF system, which will automatically send email notification of such filing to the following attorneys of record:

R. Carl Cannon ccannon@constangy.com

Juan P. Morillo juan.morillo@cliffordchance.com

Steven T. Cottreau

Jena S. Tarabula

steve.cottreau@cliffordchance.com jtarabula@constangy.com

This 9th day of April 2010.

/s/ Ronan P. Doherty Ronan P. Doherty Georgia Bar No. 224885

755856.1

 
 I

I

0 -1

I

No.04-13740-AA

FILED _.S,C_URTOFAPPEALS _[!_T_ CIRCUF

!_EP 0 7 2004_

L

j

TFIOMAKS.KAHN

I

IN THE

.......

CLERR

UNITED STATES COURT OF APPEALS-----

I

FOR THE ELEVENTH CIRCUIT

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES,

I

and LORA SISSION, individually and on behalf of a class,

I

Plaintiffs-Appellees,

V.

I

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE NORTHERN DISTRICT

I

OF GEORGIA, ROME DIVISION

I

BRIEF OF APPELLANT MOHAWK INDUSTRIES, INC.

I

R. Carl Cannon

Carter G. Phillips

Rosemary C. Lumpkins

Juan P. Morillo

I

CONSTANGY, BROOKS & SMITH, LLC

Steven T. Cottreau

230 Peachtree Street, N.W., Suite 2400

Brandi Feingold

I

Atlanta, Georgia 30303-1557 Telephone: 404-515-8622

SIDLEY AUSTIN BROWN & WOOD LLP

Facsimile: 404-525-6955
I

1501 K Street, N.W.
Telephone: 202-736-8000 Facsimile: 202-736-8711

I

Counsel for Appellant

I

I

I

I

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE

I

DISCLOSURE STATEMENT

I

Pursuant to Federal Rule of Appellate Procedure 26.1(a), Appellant

i

Mohawk Industries, Inc., tkrough undersigned counsel, states that there is no

parent corporation or publicly held corporation that owns 10% or more of Mohawk
I Industries, Inc.'s stock. In compliance with Eleventh Circuit Rule 26.1-1, Mohawk

I

Industries, Inc. hereby provides "a complete list of the trial judge(s), all attorneys,

I

persons, associations of persons, firms, pam_erships, or corporations that have an

i

interest in the outcome of the particular case or appeal, including subsidiaries,

conglomerates, affiliates and parent corporations, including any publicly held
I corporation that owns 10% or more of the party's stock, and other identifiable legal

I

entities related to the party":

I

(l) Bondurant, Mixon & Elmore, LLP, Attorneys for Appellees

I

(2) R. Carl Cannon, Attorney for Appellant

(3) Constangy, Brooks & Smith, LLC, Attorneys for Appellant

I (4) Bobby Lee Cook, Attorney for Appellees

I

(5) Cook & Colmelly, Attorneys for Appellees

I

(6) Steven T. Cottreau, Attorney for Appellant

(7) Ronan P. Doherty, Attorney for Appellees
I
(8) Brandi Feingold, Attorney for Appellant
I

I

I

I

(9) John E. Floyd, Attorney for Appellees

I

(10) Howard Foster, Attorney for Appellees

I

(11) Goddard, Thames, Harrunontree & Bolding, Attorneys for Appellees

I

(12) Mark D. Hopson, Attorney for Appellant

(13) Mark T. Hurst, Attorney for Appellant
I

(14) Nicole G. Iamaarone, Attorney for Appellees

I

(15) Jolmson & Bell, Ltd., Attorneys for Appellees

I

(16) Bomfie Jones, Appellee

I

(17) Rosemary C. Lumpkins, Attorney for Appellant

(18) Mohawk Industries, Inc., Appellant
I (19) Juan P. Morillo, Attorney for Appellant

I

(20) Honorable Harold L. Murphy, United States District Judge

I

(21) Gale Pelfrey, Appellee

I

(22) Carter G. Phillips, Attorney for Appellant

(23) Virginia A. Seitz, Attorney for Appellant
I (24) Sidley Austin Brown & Wood LLP, Attorneys for Appellant

I

(25) Lora Sisson, Appellee

I

(26) Matthew Thames, Attorney for Appellees

I

(28) Joshua F. Thorpe, Attorney for Appellees

(29) Shirley Williams, Appellee
I

I

ii

I

I

STATEMENT REGARDING ORAL ARGUMENT

I

Appellant Mohawk Industries, Inc. ("Mohawk") respectfully requests

I

that this Court schedule oral argument in this matter. Oral argument is warranted

I

because the question of whether Appellees have stated a cognizable claim under

the Racketeer Influenced and Corrupt Organizations Act ("R/CO"), 18 U.S.C.
I § 1961, et seq., involves issues of first impression in this Circuit with significant

I

consequences. For instance, this Court has not addressed whether a company's

I

hiring of its own employees may constitute participation in an enterprise through a

I

pattern of racketeering activity. Nor has the Court addressed whether an alleged

association of a company and its third party employment and recruiting agents can
I constitute a RICO enterprise. Indeed, the Seventh Circuit--the only other Circuit

I

to have addressed these identical issues--held that RICO claims identical to those

I

of Appellees failed as a matter of law. Accordingly, Mohawk believes that oral

I

argument will be helpful to this Court's consideration and disposition of the

important legal issues raised by this appeal.
I

I

I

I

I

I

iii

I

I

TABLE OF CONTENTS

I

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE

DISCLOSURE STATEMENT ..................................................................................

i

I

STATEMENT REGARDING ORAL ARGUMENT .............................................

iii

I

TABLE OF AUTHORITIES ...................................................................................

vi

I

STATEMENT OF JURISDICTION ..........................................................................

x

STATEMENT OF THE ISSUES ...............................................................................

1

I

STATEMENT OF THE CASE ..................................................................................

1

I

A. Nature Of Case And Course Of Proceedings ............................. 1

B. Disposition Below .......................................................................

2

I

STATEMENT OF FACTS ........................................................................................

4

I

SUMMARY OF THE ARGUMENT ........................................................................

5

STATEMENT OF THE STANDARD OF REVIEW ...............................................

7

I

ARGUMENT .............................................................................................................

8

I

I.

APPELLEES' FEDERAL RICO CLAIM FAILS AS A

MATTER OF LAW ..............................................................................

8

I

A. By Hiring Employees, Mohawk Only Participates In Its

Own Affairs--Not Those Of A RICO Enterprise ...................... 9

I

B. Appellees' Complaint Fails To Allege The Existence Of

An Enterprise With A Unified Structure And Conmlon

I

Purpose .....................................................................................

14

I]. APPELLEES LACK STANDING BECAUSE THEY HAVE

I

SUFFERED NO PROXIMATELY CAUSED INJURY TO

BUSINESS OR PROPERTY .............................................................

14

I

A. Appellees Have Suffered No Injury To "Business Or

Property." .................................................................................

16

I

I

iv

I

I

B°

Appellees' Damages Theory Is Impermissibly

I

Speculative ...............................................................................

18

C°

Appellees Are At Most Indirect Victims Of The Alleged

I

RICO Violations ......................................................................

22

I

III. APPELLEES' GEORGIA RICO CLAIMS FAIL AS A

MATTER OF LAW ...........................................................................

24

I

A°

Appellees Failed To Allege Facts Sufficient To Establish

That Mohawk Is Liable ............................................................

24

I

B°

Appellees Cannot Establish Proximate Causation Under

Georgia RICO ..........................................................................

27

I

IV. APPELLEES' UNJUST ENRICHMENT CLAIM FAILS AS A

MATTER OF LAW ...........................................................................

28

I

V,

CONCLUSION ..................................................................................

30

I

I

I I

I

I

I

I

I

I

V

I

I

I

TABLE OF AUTHORITIES

I

CASES

I

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

passim

I

Bd. of Regents of State Colls. v. Roth, 408 U.S. 564 (1972) ..................................

18

I

*Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., 140 F.3d 898 (llth Cir. 1998) ..........................................................

16, 22, 23

I

Brooks v. Blue Cross & Blue Shield of Fla., Inc.,

116 F.3d 1364 (llth Cir. 1997) ....................................................................

21

I

*Byrne v. Nezhat, 261 F.3d 1075 (1 lth Cir. 2001) ...........................................

24-26

I

Car Carriers, Inc. v. FordMotor Co., 745 F.2d 1011 (7th Cir. 1984) .................. 21

Chaset v. Fleer/Skyboxlnt'l,

300 F.3d 1083 (9th Cir. 2002) ............................

17-18

I

Ci O, of Jacksonville v. Dept. of Navy, 348 F.3d 1307 (1 lth Cir. 2003) ................... 2

I

*Clark v. Security Life Ins. Co. of Am., 270 Ga. 165 (1998) ..................................

25

I

Cochran v. Ogletree, 244 Ga. App. 537 (2000) .....................................................

29

I

Cox v. Adm 'r U. S. Steel & Carnegie, 17 F.3d 1386 (1 lth Cir. 1994) ................... 28

Crossland h_vesonent Co., Inc. v. Rhodes, 274 F. Supp. 2d 1302

I

(N.D. Fla. 2003) ............................................................................................

29

I

Danielsen v. Burnside-Ott Aviation Training CO'., Inc., 941 F.2d 1220 (D.C. Cir.

1991) .............................................................................................................

17

I

Dirt Hogs Inc. v. Natural Gas Pipeline Co., Inc.,

210 F.3d 389 (10th Cir. 2000) ......................................................................

10

I

I

vi

I

I

Doug Grant, Inc. v. Great Bay Casino Corp.,

I

3 F. Supp. 2d 518 (5th Cir. 1995) .................................................................

18

I

Dumas v. Major League Baseball Props., Inc., 104 F. Supp. 2d 1220 (S.D. Cal. 2000) ............................................................................................

17

I

Duracelllnc. v. SWConsultants, h tc., 126 F.R.D. 571 (N.D. Ga. 1989) .............. 21

I

*Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir. 1997) ....................................................................................

9, 10, 13

I

*Green Leaf Nursery v. E.I. DuPont De Nemours & Co.,

341 F.3d 1292 (1 lth Cir. 2003) ........................................................

15, 16, 28

I

Itollifield v. Monte Vista Biblical Gardens, Inc.,

251 Ga. App. 124 (2001) ..................................................................

28-29, 30

I ttolmes v. See. hTvestor Prot. Corp., 503 U.S. 258 (1992) ......................... 18, 22, 23

I

Honduras Aircraft Registry, Ltd. v. The Gov "t of Honduras,

129 F.3d 543 (1 lth Cir. 1997) ........................................................................

7

I

Jackson v. BellSouth Telecomms., 372 F.3d 1250 (1 lth Cir. 2004) ......................... 7

I

Kwickie/Flash Foods, hlc. v. Lakeside PetT'oleum, Inc.,

246 Ga. App. 729 (2000) ..............................................................................

29

I

Lerma v. Univision Communications, h zc., 52 F. Supp. 2d 1011

(E.D. Wis. 1999) ...........................................................................................

21

I

Maddox v. Southern Eng'g Co., 231 Ga. App. 802 (1998) ............................... 27, 28

I

Marshall County Bd. Of Educ. v. Marshall County Gas Dist.,

992 F.2d 1171 (1 lth Cir. 1993) ......................................................................

8

I

Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002) ............................ 22, 24

I

Mifitaty Circle Pet Ctr. v. State, 181 Ga. App. 657 (1987) ................................... 26

I

Moore v. PaineWebberlnc.,

189 F.3d 165 (2d Cir. 1999) ..................................... 15

I

vii

I

I

I

Morast v. Lance, 631 F. Supp. 474 (N.D. Ga. 1986) .............................................

27

I

N.G.L. Travel Assocs. v. Celebrity Cruises, Inc., 764 So. 2d 672 (Fla. Dist. Ct. App. 2000) .......................................................................

29, 30

I

Napier v. Bruce, No. 02 C 8319, 2004 WL 1194747

(N.D. Ill. May 27, 2004) .........................................................................

21-22

I

Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182 (1 l th Cir. 2002) ..................... 8

I

Price v. Pinnacle Brands, Inc., 138 F.3d 602 (5th Cir. 1998) ................................ 17

I

Ptyor v. CCEC, Inc., 257 Ga. App. 450 (2002) ......................................................

29

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

6, 9

I *Riverwoods Chappaqua Colp. v. Marine Midland Bank, N.A.,

30 F.3d 339 (2d Cir. 1994) ...........................................................................

10

I

*Sedima, S.P.R.L.v. Imrex Co., Inc., 473 U.S. 479 (1985) ........................ 6, 8, 9, 15

I

State v. Military Circle Pet Ctr., 257 Ga. 388 (1987) ...................................... 26, 27

I

In re TaxableMun. BondSec. Litig., 51 F.3d 518 (5th Cir. 1995) ......................... 18

I

Ta_,lor v. Bear Stearns & Co., 572 F. Supp. 667 (N.D. Ga. 1983) ........................ 21

Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) .............................. 20
I

Turnquist v. Elliott, 706 F.2d 809 (7th Cir. 1983) ..................................................

17

I

United States v. Goldin Industries, Inc., 219 F.3d 1271 (1 lth Cir. 2000) ............... 9

I

United States v. Neapolitan, 791 F.2d 489 (7th Cir. 1986) .................................... 10

I

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

6, 13, 14

WTSP-TI_, Inc. v. Number One Realty Center, Inc.,

I

490 So. 2d 1273 (Fla. Dist. Ct. App. 1986) ..................................................

29

I

viii

Zampatti v. TradebankInt'l Franchising Corp., 235 Ga. App. 333 (1998) .......... 29 STATUTES

8 U.S.C. § 1324 .........................................................................................

3, 4, 20, 21

18 U.S.C. § 1546 .................................................................................

3, 4, 21, 22, 28

'18 U.S.C. § 1961, etseq ............................................................................

iii, x, 1,4

*18U.S.C. § 1962(c) ................................................................................................

8

"18 U.S.C. § 1964(c) ................................................................................

6, 8, 15, 17

28 U.S.C. § 1292 ...........................................................................

x, 2

28 U.S.C. § 1331 .......................................................................................................

x

28 U.S.C. § 1367(c) ................................................................................................. Fed. R. Civ. P. 8 .................................................................................................

24 26, 27

Fed. R. Civ. P. 9(b) .................................................................................................

21

Fed. R. Civ. P. 12(b)(1) and 12(b)(6) ............................................................. *O.C.G.A. § 16-2-22 (a)(1), (a)(2), (b)(2) .....................................................

x, 7, 15 7, 25, 26

*O.C.G.A. § 16-14-1, et seq .................................................................................

1, 4

*O.C.G.A. § 16-14-2(b) ..........................................................................................

25

O.C.G.A. § 16-14-6(c) .............................................................................................

27

ix

I

I

STATEMENT OF JURISDICTION
I Appellant Mohawk Industries, Inc. ("Mohawk") appeals from the

I

judgment of the United States District Court for the Northern District of Georgia

I

(Murphy, J.) denying Mohawk's motion to dismiss Appellees' Complaint pursuant

I

to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). The District Court had jurisdiction over

Appellees' Complaint under 28 U.S.C. § 1331 and the Racketeer Influenced and

I Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq.

I

This Court has jurisdiction to review the District Court's judgment of

I

April 12, 2004, denying the dismissal of Appellees' Complaint pursuant to

I

28 U.S.C. § 1292. On May 27, 2004, the District Court amended its April 12, 2004

Order to permit Defendant to seek interlocutory review. Pursuant to 28 U.S.C.

I

§ 1292(b), on June 10, 2004, Mohawk timely filed a Petition for Permission to

I

Appeal. On July 28, 2004, this Court granted that petition. Accordingly, this

I

Court has jurisdiction to review the District Court's April 12, 2004 Order.

I

I

I

I

I

I

I

I

STATEMENT OF THE ISSUES
I A. Whether Appellees' Complaint alleges the existence of and participation in

I

an enterprise, as required by RICO, 18 U.S.C. § 1961, et seq.

I

B. Whether Appellees have standing to bring their RICO claims.

I

C. Whether Appellees state a claim under Georgia's RICO statute, O.C.G.A.

§ 16-14-1, etseq.

I D. Whether Appellees state a claim for unjust enrichment under Georgia law.

I

STATEMENT OF THE CASE

I

A. Nature Of Case And Course Of Proceedings

On January 6, 2004, Appellees filed a putative class action on behalf
I of former and current hourly employees of Mohawk Industries in Georgia.

I

Appellees alleged that Mohawk violated the Racketeer Influenced and Corrupt

I

Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., by hiring and harboring

I

persons unauthorized to work in the United States and by knowingly accepting

false identifications. Appellees claimed that this conduct resulted in the artificial

I suppression of wages that Mohawk paid to its legal employees.

I

On February 9, 2004, Mohawk moved to dismiss the Complaint,

I

arguing, in part, that Appellees' claims did not allege participation in a RICO

I

enterprise and advanced an impermissibly speculative wage suppression theory.

The Court granted in part and denied in part Mohawk's motion by Order dated

I

I

I

I

April 12, 2004. On April 23, 2004, Mohawk filed a motion with the District Court
I requesting pemtission to appeal. On May 27, 2004, the Court granted Mohawk's

I

motion. On June 10, 2004, Mohawk filed a petition for pemtission to appeal,

I

which this Court granted by order dated July 28, 2004.1

I

B. Disposition Below

The District Court granted in part and denied in part Mohawk's

I

motion to dismiss Appellees' Complaint. Specifically, the District Court held that

!

"[Appellees] have sufficiently alleged that [Mohawk] participated in the affairs of

I

a RICO enterprise as opposed to its own affairs, that a RICO enterprise exists

distinct from [Mohawk], and that a conmaon purpose and unified structure exists
I among the participants in the purported enterprise." R2,44, p.35-36 (April 12,

I

2004 Order). The District Court also held that Appellees adequately allege a

I

proximately caused injury to their business or property. R2,44, p.36-37. In

!

particular, the Court found that Appellees' allegation that "the presence of illegal

workers in the labor pool adversely has affected [Appellees'] ability to command
I higher wage rates," stated an injury to business or property, even though Appellees

!

agreed to work for the wages Mohawk paid them. R2,44, p.37. The District Court

I

I

Once the District Court certifies an order for appeal under § 1292(b), and this Court grants leave to appeal, the entire order becomes subject to interlocutory

appellate review. See Ci_ of Jacksonville v. Dept. of Navy, 348 F.3d 1307, 1310

I

(1 lth Cir. 2003).

I

I

I

also rejected Mohawk's argument that Appellees' damages theory was
I impermissibly speculative. R2,44, p.45.

I

In addition, the District Court permitted some of Appellees' Georgia

I

law claims to proceed. Specifically, the Court held that Appellees stated a claim

I

under Georgia RICO. R2,44, p.47-48. The Court concluded that Georgia law

requires Appellees to prove that the Mohawk board of directors or an officer
I approved of the alleged wrongdoing. R2,44, p.48. Although Appellees failed to

I

make such an allegation, the District Court excused the omission, concluding that

I

"[Appellees] simply must set forth the necessary proof at trial." R2,44, p.48.

I

The District Court, however, dismissed Appellees' Georgia RICO

claims based on violations of 8 U.S.C. § 1324, concluding that Georgia law does
I not include that provision in the defmition of racketeering activity. See R2,44,

I

p.49. Accordingly, Appellees' Georgia RICO claims rest solely on alleged

I

document fraud violations of 18 U.S.C. § 1546. 2 Additionally, the Court denied

I

Mohawk's Motion to Dismiss as to Appellees' claim of unjust enrichment based

on their wage suppression theory. 3

I

2 Section 1324 prohibits the bringing in, harboring, and hiring of unauthorized

I

workers. Section 1546 prohibits the knowing acceptance of false identification documents.

I

3 The District Court granted Mohawk's Motion to Dismiss as to Appellees' claim of unjust enrichment regarding workers' compensation savings concluding that

Appellees lacked standing because there was no relation between Appellees wages

I

and lower workers' compensation costs. R2, 44, p.52.

I

I

I

STATEMENT OF FACTS
I On January 6, 2004, Appellees filed a putative class action on behalf

I

of former and current hourly employees of Mohawk, under the Racketeer

I

Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. and under

I

Georgia's RICO Act, O.C.G.A. § 16-14-1, et seq. and Georgia's common law

unjust enrichment.

They allege that their "wages have been depressed by

I

Mohawk's employment and harboring of large numbers of illegal workers." RI,1,

I

p. I(7 1) (Complaint).

I

Appellees allege that Mohawk, "the second largest carpet and rug

I

manufacturer in the United States," violated federal immigration law by hiring and

harboring employees who are not authorized to work ha the United States and by

I

knowingly accepting false identifications.

See Rl,1, pp.2,5(77 2, 14-16).

!

Appellees allege five different RICO predicate acts. 4 Appellees assert that these

I

alleged predicate acts constitute RICO violations because Mohawk and its hiring

I

4 See RI,1, 7 59 ("Mohawk has violated [8 U.S.C. § 1324(a)(3)(A)] by employing

more than 10 aliens per year each year for the last four years"); id. at 7 60

I

("Mohawk has violated [the harbo_lg provision, § 1324(a)(1)(A)(iii)]

by

(a) knowingly employing illegal aliens within its factories, warehouses and other

facilities in Georgia and/or (b)taking steps to shield those illegal aliens from

I

detection"); id. at 7 61 ("Mohawk has knowingly or recklessly encouraged [m]any

undocumented aliens that are discovered to return to the United States and to their

I

employment at Mohawk in violation of [8 U.S.C. § 1324(a)(1)(A)(iv)]"); id. 77 16-

17, 63-64 [same](alleging that Mohawk accepted and used improper work

i

authorization documents in connection with hiring employees [in violation of 18 U.S.C. § 1546(a)].

I

4

I

I

recruiters constitute a RICO enterprise. See RI,1, p.24-25(¶¶ 76, 77, 79) (alleging
i an "association-in-fact enterprise with third party employment agencies and other

I

recruiters").

The only recruiter identified in the Complaint is Temporary

I

Placement Services ("TPS"). RI,1, p.24(¶ 76).

I

Appellees seek a retroactive pay increase (in the form of treble

damages) on the ground that their wages are and were "lower than they would
I [have] be[en] if Mohawk did not engage in this illegal conduct." RI,1, p.10(¶ 33).

I

Finally, Appellees claim that Mohawk has been unjustly enriched, alleging that

I

"cost savings permit Mohawk to earn larger profits than it would be able to earn if

I

it did not employ and harbor illegal workers." See RI,1, p.32(¶ 109).

SUMMARY OF THE ARGUMENT
I Appellees' RICO claims are insufficient as a matter of law. Indeed,

I

the Seventh Circuit recently affirmed the dismissal of a materially identical

I

complaint. In Baker v. 1BP, lnc., as here, a class of current and former employees

I

alleged that defendant knowingly hired unauthorized workers and that such hiring

resulted in depressed wages to authorized workers. 357 F.3d 685,686-87 (7th Cir.

I

2004). The Baker court concluded that plaintiffs' contentions did not adequately

I

allege the existence of and participation in a RICO enterprise because hiring only

I

constitutes participation in the employer's own affairs and not those of a RICO

I

enterprise. See Baker, 357 F.3d at 691.

I

I

I

I

As in Baker, Appellees' Complaint in this case fails to state a claim.

First_, Appellees fail to allege participation in a RICO enterprise. Under RICO, the

I

defendant must be distinct from the alleged enterprise and the defendant must

I

conduct the affairs of the enterprise--not just its own affairs--through a pattern of

I

racketeering activity. See Reves v. Ernst & Young, 507 U.S. 170, 185 (1993);

Sedima, S.P.R.L.v. hnrex Co., 473 U.S. 479, 496 (1985). Here, Appellees' alleged
I

injury stems solely from Mohawk's hiring of its own employees. Such conduct is

I

Mohawk's operation of itself, not an enterprise. In short, a corporation cannot be

I

held liable under RICO for conducting routine business activity, like hiring.

I

Appellees RICO claims also fail because a company combined with its recruiting

agents performing an ordinary business function does not constitute a RICO
I enterprise. Lastly, the alleged enterprise is insufficient because it consists of

I

members with divergent, not conmaon, goals. See United States v. Turkette, 452

I

U.S. 576, 583 (1981).

I

Second, Appellees lack standing under RICO because they were not

"injured in [their] business or property by reason of [the alleged conduct]." See 18
I U.S.C. 1964(c). Simply put, the receipt of a bargained-for wage is not an injury to

I

business or property. Moreover, Appellees lack standing because they are merely

I

indirect victims of the alleged conduct. Additionally, Appellees' damages theory

I

is too speculative to satisfy RICO's proximate cause requirements. This is so

I

I

I

I

because myriad factors influence wage rates and it is therefore impossible to

ascertain what, if any, impact the alleged presence of unauthorized workers had on

I

the wages of Mohawk's employees.

I

Third., Appellees' claims under Georgia RICO also fail because under

I

Georgia law, a corporation cannot be vicariously liable where there is no showing

I

that the board of directors or officers of the corporation authorized or recklessly

tolerated the alleged predicate criminal acts. See O.C.G.A. § 16-2-22(a)(2) (2004).

I

Appellees' Complaint fails to allege that any director or officer of Mohawk

I

authorized the alleged conduct and accordingly Appellees Georgia RICO claina is

I

deficient as a matter of law.

Fourth, all of Appellees' unjust enrichment claims should have been
I

dismissed.

Unjust enrichment is inapplicable where, as here, a company

I

contracted to pay a particular wage and paid that wage pursuant to its contract.

I

STATEMENT OF THE STANDARD OF REVIEW

I

This Court reviews de novo a district court's denial of a motion to

dismiss a claim for failure to state a claim under Fed. R. Civ. P. 12(b)(6). See
I Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1262 (1 lth Cir. 2004); Honduras

I

Aircraft Registly, Ltd. v. Gov't of Honduras, 129 F.3d 543, 546 (1 lth Cir. 1997).

I

"To survive a motion to dismiss, plaintiffs must do more than merely state legal

I

conclusions; they are required to allege some specific factual bases for those

I

I

I

conclusions or face dismissal of their claims." Jackson, 372 F.3d at 1263.
I

Although the complaint must be read liberally, the court may not make liberal

I

inferences beyond what has actually been alleged. "[C]onclusory allegations,

I

unwarranted deductions of facts or legal conclusions masquerading as facts will

I

not prevent dismissal." Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188

(llth Cir. 2002). "[W]hen, on the basis of a dispositive issue of law, no
I

construction of the factual allegations [of a complaint] will support the cause of

I

action," dismissal is appropriate. Marshall County Bd. Of Educ. v. Marshall

I

Count. Gas Dist., 992 F.2d 1171, 1174 (1 lth Cir. 1993).

I

ARGUMENT

I. APPELLEES' FEDERAL RICO CLAIM FALLS AS A MATTER OF

I

LAW.

To state a RICO claim under § 1962(c), Appellees must allege
I

"(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity."

I

Sedima, 473 U.S. at 496; see also 18 U.S.C § 1962(c). This Court has

I

unequivocally held that without proof of the existence of and participation in an

I

enterprise, there can be no violation of RICO. See Jackson, 372 F.3d at 1264

("Essential to any successful RICO claim are the basic requirements of establishing
I a RICO enterprise and a 'pattern of racketeering activity.'"). In addition, the RICO

I

Act imposes a statutory limitation on who is entitled to file suit under the statute.

I

See 18 U.S.C. § 1964(c). Specifically, § 1964(c) provides that only persons

I

I

I

"injured in [their] business or property by reason of [the alleged misconduct]" have
I

standing to sue. Here, Appellees' claim fails because they cannot show as a matter

I

of law that the alleged hiring constitutes participation in an enterprise's affairs or

I

that they have suffered an injury to business or property as a result.

I

A. By Hiring Employees, Mohawk Only Participates In Its Own Affairs--Not Those Of A RICO Enterprise.

I

RICO "liability depends o11 showing that the defendants conducted or

I

participated in the conduct of the 'enterprise's affairs,' not just their own affairs."

Reves, 507 U.S. at 185. Accordingly, unless there is an enterprise that is distinct

I from the defendant itself, there can be no RICO violation. See Sedima, 473 U.S. at

I

496-497; Baker, 357 F.3d at 692; Fitzgerald v. Chrysler Corp., 116 F.3d 225,227-

I

228 (7th Cir. 1997). 5 The necessity of pleading the existence of and participation

in the affairs of a RICO enterprise is not merely a technical requirement, but is
I

fundamental to the purpose of RICO. "The central role of the concept of enterprise

I

under RICO cannot be overstated. It is precisely the criminal infiltration and

I

manipulation of organizational structures that created the problems which led to

I

5 This is so even though the association may be informal. Appellees relied heavily

on United States v. Goldin Industries, Inc., 219 F.3d 1271 (1 lth Cir. 2000) below

I

to argue that they have satisfied the RICO enterprise requirements because an enterprise need not possess an "ascertainable structure." See R2,37,6-7. That an

association may be informal or indirect to satisfy the enterprise requirement does

I

not eviscerate the requirement.

Indeed, this Court, in Goldin, expressly

acknowledges that "RICO forbids the imposition of liability where the enterprise is

I

nothing more than a subdivision or a part of the person." See Goldin, 219 F.3d at 1276.

I

I

I

I

the passage of RICO." United States v. Neapolitan, 791 F.2d 489, 500 (7th Cir.

1986). Accordingly, the Circuit Courts that have addressed this question have

I

found that a defendant (consisting of nothing more than itself and its employees

I

and agents) involved in the operation of its routine business is not RICO enterprise.

I

See e.g., Dirt Hogs Inc. v. Natural Gas Pipeline Co., 210 F.3d 389, 2000 WL

368411 at *3 (10th Cir. April 10, 2000) (unpublished decision) ("Because the
I

enterprise identified by plaintiff appears to be nothing more than another name for

I

[defendant] and its agents, conducting the corporation's business, the complaint

I

fails to describe an enterprise distinct from the defendant corporation.");

I

Fitzgerald, 116 F.3d at 228 (7th Cir. 1997) ("[W]here a large, reputable

manufacturer deals with its ... agents in the ordinary way, so that their role in the
I manufacturer's illegal acts is entirely incidental, differing not at all from what it

I

would be if these agents were the employees of a totally integrated enterprise, the

I

manufacturer plus its ... agents ... do not constitute an enterprise within the

I

meaning of [RICO]."); Rivelq.voods Chappaqua Corp. v. Marine Midland Bank, 30

F.3d 339, 344 (2d Cir. 1994) ("[B]y alleging a RICO enterprise that consists
I merely of a corporate defendant associated with its own employees or agents

I

carrying on the regular affairs of the defendant, the distinctness requirement many

I

not be circumvented.").

I

I

10

I

I

I

Under this line of authority, Appellees' Complaint fails to allege a

RICO enterprise. Specifically, Appellees' enterprise allegations merely state that

I

Mohawk and its recruiting agents hired Mohawk employees. See RI,1, p.24(¶ 76)

I

("Mohawk has engaged ... in an association-in-fact

enterprise with third party

I

employment agencies and other recruiters, including Temporary Placement

I

Services ("TPS"), that supply Mohawk with illegal workers."). The hiring of

Mohawk employees, by Mohawk and its agents, is simply Mohawk carrying on its

I

regular business affairs.

I

Indeed, the Seventh Circuit recently affirmed the dismissal of a

I

complaint in a case materially identical to this one. Specifically, in Baker, as here,

current and former employees filed a class action on behalf of hourly employees
I under RICO alleging that defendant knowingly hired unauthorized workers and

I

that such hiring resulted in depressed wages to legal employees. See Baker, 357

I

F.3d at 687. In Baker, the district court dismissed plaintiffs' complaint because

I

plaintiffs did not meet the enterprise requirements of RICO. See Baker, 357 F.3d

at 692. The Baker court recognized that plaintiffs had merely alleged that
I defendant and its employment recruiters hired defendant's employees. The Court

I

held that this was insufficient to state a claim under RICO:

I

But how is [Defendant] conducting the affairs of an

enterprise through a pattern of racketeering activity? The

I

complaint alleges that the 'enterprise' is [Defendant] plus the persons and organizations who help it find aliens to

I

11

I

I

hire .... [T]he complaint comes perilously close to

I

alleging that [Defendant] plus its agents and employees is

the 'enterprise,' a theory that won't fly .... The nub of the

I

complaint

is that [Defendant]

operates

itself

unlawfully .... Without a difference between the defendant

and the 'enterprise' there can be no violation of RICO.
I

Baker, 357 F3d at 691-92. As in Baker, Appellees' allegations here begin and end

I

with Mohawk's alleged unlawful hiring of unauthorized workers. This, however,

I

is not a legally sufficient basis for a RICO claim.

I

The danger of sanctioning Appellees' broad RICO liability theory is

apparent. Under Appellees' theory, any company engaged in conducting its own
I affairs through its employees and agents will be subject to RICO claims for treble

I

damage liability. That is simply not the intent and purpose of RICO. Indeed, if

I

successful, Appellees' theory would allow future plaintiffs to bring RICO claims

I

simply by alleging that a company fraudulently manages itself or that its

relationships with its business partners are fraudulent (and, for example, use mail
I or wire fraud as the RICO predicate acts). Small and large companies would

I

become vulnerable to RICO claims attacking the manner in which they engage in

I

routine business practices such as hiring. This would be a substantial departure

I

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
I

I

I

12

I

I

separate, independent third party. 6
I

Previous attempts to expand RICO in tiffs fashion have been rejected.

I

For example, in Fitzgerald, the Seventh Circuit concluded that a defendant

I

manufacturer's agents, who participated in retail sales of automobiles with the

I

defendant, did not meet the RICO enterprise requirement. Fitzgerald, 116 F.3d at

228. As Judge Posner explained:
I

Read literally, RICO would encompass every fraud case

I

against a corporation, provided only that a pattern of fraud and some use of the mails or telecommunications to

further the fraud were shown; the corporation would be

I

the RICO person and the corporation plus its employees

the 'enterprise.'

The courts have excluded this far-

I

fetched possibility by holding that an employer and its employees cannot constitute a RICO enterprise.

I

What we cannot imagine, and what we do not fmd any

support for in appellate case law, is applying RICO to a

I

free-standing corporation such as [Defendant] merely because [Defendant] does business through agents, as

virtually every manufacturer does.
I Fitzgerald, l l6 F.3d at 226-27. Similarly, here, Appellees merely allege an

I

enterprise consisting of a company and its recruiting agents. As such, their

I 6 Indeed, Appellees' Complaint seeks to expand RICO liability beyond previously

I

recognized boundaries. In fact, "[t]he prototypical RICO case is one in which a person bent on criminal activity seizes control of a previously legitimate finn and

uses the finn's resources, contacts, facilities, and appearance of legitimacy to

I

perpetrate more, and less easily discovered, criminal acts that he could do in his

own person, that is, without channeling his criminal activities through the

I

enterprise that he has taken over." FitzgeraM, 116 F.3d at 227; See also Turkette, 452 U.S. 576, 591 (1981).

I

13

I

I

Complaint fails as a matter of law.
I

B. Appellees' Complaint Fails To Allege The Existence Of An

I

Enterprise With A Unified Structure And Common Purpose,

To withstand dismissal, Appellees' Complaint must allege the
I existence of an enterprise with a common purpose and unified structure. See, e.g.,

I

Turlcette, 452 U.S. at 583 (An association-in-fact enterprise is "a group of persons

I

associated together for a conmaon purpose of engaging in a course of conduct").

I

Participants in an alleged RICO enterprise consisting of an employer and its

recruiters lack such a common purpose or unified structure.
I Here, Appellees allege that "[t]he recruiters and Mohawk share the

I

conunon purpose of obtaining illegal workers for employment by Mohawk." R1,1,

I

p.25(¶ 77). The court in Baker rejected a sinfilar allegation of common purpose.

I

As the Baker court explained, the employer "wants to pay lower wages; the

recruiters want to be paid more for sen, ices rendered (though [the employer] would

I like to pay them less) .... These are divergent goals." Baker, 357 F.3d at 691.

I

Because Mohawk and its recruiters have different goals and purposes, they cam_ot

I

comprise a RICO enterprise as a matter of law. Accordingly, for this independent

I

reason, Appellees' RICO claims are insufficient as a matter of law.

II, APPELLEES

LACK STANDING

BECAUSE

THEY HAVE

I

SUFFERED NO PROXIMATELY OR PROPERTY.

CAUSED INJURY TO BUSINESS

I

Appellees' claim for a retroactive wage increase fails because

I

14

I

I

I

Mohawk's alleged hiring and harboring of unauthorized workers did not

proximately cause an injury to their business or property. In order to sue for a

I

violation of RICO, a plaintiff must allege that he has been "injured in his business

I

or property by reason of a [RICO] violation." 18 U.S.C. § 1964(c); see also

I

Sedima, 473 U.S. at 496 ("[P]laintiff only has standing if ... he has been injured in

I

his business or property by the conduct constituting the violation.").

Thus,

causation of an injury is not oIfly an element of Appellees' claim, but also a

I

statutory prerequisite to standing under RICO. 7 To show injury "by reason of" a

I

RICO violation, a RICO plaintiff must set forth allegations showing that the

I

violation is the proximate cause of the injury to plaintiff's business or property.

See Green LeafNursel y v. E.L DuPont De Nemours & Co., 341 F.3d 1292, 1307
I (1 lth Cir. 2003) ("In order for a pattern of racketeering activity to be a cognizable

I

cause of civil RICO injury to a private plaintiff, one or more of the predicate acts

I

nmst not Olfly be the 'but for' cause ... but the proximate cause as well.").

I

Additionally, a plaintiff must show a "'direct relation between the

injury asserted and the injurious conduct alleged,'" that is, "the alleged conduct
I

I

7 There is some confusion as to how to characterize challenges to RICO standing. See, e.g., Moore v. PaineWebbel, Inc., 189 F.3d 165, 169 n.3 (2d Cir. 1999)

(noting that a similar challenge should be treated as a motion under Fed. R. Civ. P.

I

12(b)(1) for lack of subject matter jurisdiction). This Court has not yet spoken to

the issue, and Mohawk accordhlgly moved below under both Fed. R. Civ. P.

I

12(b)(l) and 12(b)(6). The district court chose to evaluate this issue under 12(b)(6). See R2,44,12 n.2.

I

15

I

I

was 'aimed primarily' at a third party." See Green Leaf Nursery, 341 F.3d at 1307
I (quoting Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., h_c., 140 F.3d

I

898, 906 (1 lth Cir. 1998)) (emphasis added) (holding that a party whose alleged

I

injuries result from "the misfortunes visited upon a third person by the defendant's

I

acts lack standing to pursue a claim under RICO). Put simply, "'the test for RICO

standing is whether the alleged injury was directly caused by the RICO violation,
I

not whether such harm was reasonably foreseeable.'"

See Green Leaf Nursely,

I

341 F.3d at 1308 (quoting Bivens, 140 F.3d at 908. In this case, Appellees'

I

damages theory fails as a matter of law because (1) payment of a bargained-for

I

wage does not constitute an injury to "business or property;" (2)Appellees'

damages theory is impermissibly speculative; and (3)Appellees are, at most,
I indirect victims of Mohawk's alleged ilmnigration law violations.

I

A. Appellees Have Suffered No Injury To "Business Or Property."

I

Appellees accepted employment at an agreed-upon wage rate. They

do not allege that Mohawk failed to pay them that rate. Instead, they seek a
I retroactive wage increase comprised of the difference between the wages they
I actually received and the wages that they assert they would have received in a

I

labor market that did not include the unauthorized workers that Mohawk allegedly

I

added to the labor market. RI,1, p.10 (¶33). They seek this additional

compensation even though Appellees received the precise wages they bargained
I

I

16

I

I

for with Mohawk.
l

Appellees' claim for a retroactive wage increase fails under RICO

I

because they have not suffered an injury to their business or property. Instead,

I

they received the full "benefit of their bargain." Dumas v. Major League Baseball

I

Props., Inc., 104 F. Supp. 2d 1220, 1222 (S.D. Calif. 2000). And, the case law is

clear that an employee is entitled to bargained-for wages, but not to more. See,
I e.g., Price v. Pinnacle Brands, Inc., 138 F.3d 602, 606-07 (5th Cir. 1998) (holding

I

that the plaintiffs had failed to allege any injury to "business or property" because

I

"plaintiffs do not allege that they received something different than precisely what

I

they bargained for."), s Accordingly, because Plaintiffs received the full benefit of

their bargain, they lack standing to bring a RICO claim.
I Appellees also lack standing because their interest in the higher wages

I

they could have hypothetically obtained is too abstract, intangible, and speculative

I

to constitute an interest in "business or property." See 18 U.S.C. § 1964(c). RICO

!

requires a plaintiff to provide "proof of concrete financial loss." See Chaset v.

I

8 See also Turnquist v. Elliott, 706 F.2d 809, 812 (7th Cir. 1983) (finding that

plaintiff lacked a property interest in wages that defendant had not agreed to pay

I

because "[n]o one every promised to pay [plaintiff] the prevailing rate or suggested that he should be paid at that rate."). Danielsen v. Burnside-Ott Aviation Training

Ctr., 941 F.2d 1220, 1229 (D.C. Cir. 1991) (expressing doubt about whether

I

plaintiffs' claim--that the misclassification of their work and wage rate entitled

them to higher wages--was an interest in "business or property" because "each

I

employee in fact received precisely the compensation the agreed work.").

bargained for in return for

I

17

I

I

Fleer/Skybox Int'l, 300 F.3d 1083, 1087 (9th Cir. 2002); see also Bd. of Regents of
I State Colls. v. Roth, 408 U.S. 564, 577 (1972) (stating that "[t]o have a property

I

interest in a benefit, a person clearly must have more than an abstract need or

I

desire for it ... more than a unilateral expectation of it. He must, instead, have a

I

legitimate claim of entitlement to it."); Doug Grant, Inc. v. Greate Bay Casino

Corp., 3 F. Supp. 2d 518, 534 (D.N.J. 1998) (stating that "[a] lost opportunity to
I obtain a financial benefit is too speculative to constitute an injury to business or

I

property under RICO."). Here, Appellees' mere desire for a wage higher than the

I

one they agreed to accept and in fact received is not a tangible interest in "business

I

or property" within the meaning of RICO. Thus, because Appellees have not

adequately alleged an injury to their "business or property," they lack standing to
I b_lg a RICO claim.

I

B. Appellees' Damages Theory Is Impermissibly Speculative.

!

Appellees' causation theory also fails because it is too speculative to

meet the demands of proximate causation. See In re Taxable Mun. Bond See.
I Litig., 51 F.3d 518, 523 (5th Cir. 1995). In short, speculative damages are not
I compensable under RICO. Id. "The less direct an injury is, the more difficult it

I

becomes to ascertain [what] amount of a plaintiff's damages [are] attributable to

I

the [RICO] violation, as distinct from other, independent factors." Holmes v. Sec.

InvestorProt. Corp., 503 U.S. 258,269 (1992).
I

I

18

I

I

Appellees allege that "Mohawk's employment and harboring of large
I numbers of illegal workers has enabled Mohawk to depress wages and thereby to

I

pay all of its hourly employees, including legally employed workers ..., wages that

I

are lower than they would be if Mohawk did not engage in this illegal conduct."

I

R I,I, p.10 (¶ 33). These allegations are insufficient as a matter of law because the

alleged hiring of unauthorized workers and their effect on wages is inherently
I uncertain and impossible to measure. A wage rate indisputably depends upon

I

many factors, including the demand for labor in the relevant market, the supply of

I

qualified laborers, the profitability of the employers and the industry as a whole,

I

and the state of the local, regional, national and international economies, to name a

few relevant variables.

At bottom, here, it will simply be impossible to

I

approximate the extent to which Appellees' wages were depressed (if at all) by

I

Mohawk's alleged immigration law violations as opposed to the numerous other

I

factors affecting the relevant labor market(s) or Appellees' individual employment

I

decisions and skills. 9

Indeed, Judge Posner in the Baker decision discussed the flawed
I nature of plaintiffs' causation theory, which is identical to Appellees' theory:

I

9 Moreover, Appellees' contention that they would command a higher wage absent

I

the presence of unauthorized workers is not a foregone conclusion. Mohawk

would not necessarily pay a higher wage. One practical consequence of a rising

I

tide of wages, is that Mohawk may simply abandon the market and take its business elsewhere (e.g., offshore).

I

19

I

I

An increased supply of labor logically affects, not just

I

the wages at [the employer's] plant, but wages

throughout the region (if not the country). Workers can

I

change employers (leaving [the employer] for higher pay elsewhere), and this process should cause equilibration

throughout the labor market. Yet plaintiffs' theory is not

I

that too many aliens depress wages around [employer

plant]; it is that [the employer] pays lower wages than

I

some competitors, and that effect would be very hard to

attribute

to particular

violations

of 8 U.S.C.

§ 1324(a)(3)(A).

Suppose that plaintiffs believed that

I

[their employer] has violated the Fair Labor Standards

Act by failing to calculate other workers overtime

I

premium; could plaintiffs obtain damages from [the employer] even though it had paid them all that the FLSA

requires?
I Baker, 357 F.3d at 692. _°

I

Moreover, Appellees' theory of causation misunderstands the nature

I

of labor markets. For example, Mohawk is not the only employer in Georgia. If

I

Mohawk were, in fact, paying "depressed wages" to its employees, Plaintiffs--

who are legal workers--could

(and presumably would) seek jobs with other

I

employers who are not suppressing wages. Yet Plaintiffs allege that Mohawk still

I

attracts a workforce of "approximately 31,780 persons," while only "hundreds"

I

_0Recently, the Sixth Circuit permitted a wage suppression theory of damages to

survive a motion to dismiss. See Trollinger v. Tyson Foods, Inc., 370 F.3d 602

I

(6th Cir. 2004). The Court, however, expressed doubt about plaintiffs ability

ultimately to prevail on the proximate cause issue. Trollinger, 370 F.3d at 619

I

("Tyson may be right--but we cannot say so at this preliminary stage in the

proceeding.").

The Sixth Circuit, however, did not address the RICO enterprise

issues raised by this appeal. Indeed, the Court specifically noted that the issues

I

remained open on remand.

I

20

I

I

may be illegal. RI,1, pp.2,19-20(¶¶ 2, 61). Such a causation theory is nonsensical.
I It is contrary to logic and fundamental economics to suggest that a single employer

I

can suppress wages in a competitive market. See Baker, 357 F.3d at 692

I

(plahltiffs' theory is "that [the employer] pays lower wages than some competitors,

I

and that effect would be very hard to attribute to particular violations of 8 U.S.C.

§ 1324(a)(3)(A)"). "To survive a motion to dismiss, a claim must make economic
I and factual sense." Lerma v. Univision Communications, Inc., 52 F. Supp. 2d

I

1011, 1025 (E.D. Wisc. 1999) (citing Car Carriers, Inc. v. Ford Motor Co., 745

I

F.2d 1101, 1110 (7th Cir. 1984)). Plaintiffs' RICO claims simply do not.

I

Finally, Plaintiffs have failed to allege how four of the five predicate

offenses--the harboring of illegal aliens, the inducing of illegal aliens to enter the
I United States, and the use and acceptance of false identification documents (RI,1,

I

p.19-21(¶¶ 61-64))---could have separately caused, let alone proximately caused,

I

wage suppression. 11 These predicate acts may (or may not) facilitate the

I

11 Moreover, the heightened pleading requirement of Rule 9(b) of the Federal

Rules of Civil Procedure should apply to these predicate acts (an issue that this

I

Court has not yet addressed). See Taylor v. Bear Stearns & Co., 572 F. Supp. 667,

682 (N.D. Ga. 1983) ("It seems, however, to this court ... that there are many

I

sound reasons for requiring that, like fraud, [RICO] must be pled with

particularity.").

In any event, it is well settled that Rule 9(b) applies to RICO

predicate acts sounding in fraud. See, e.g., Brooks v. Blue Cross & Blue Shield of

I

Fla., Inc., 116 F.3d 1364, 1380 (1 lth Cir. 1997); Duraeell bze. v. SW Consultants.

Inc., 126 F.R.D. 571,574 (N.D. Ga. 1989). Thus, at a minimum, Rule 9(b) should

I

apply to the alleged violations of Section 1546, which prohibits the acceptance of fi'audulent documents. This is clearly a fraud-based predicate act. See Napier v.

I

21

I

I

employment of illegal workers, but they do not independently increase the labor
I supply, and thus ca_mot proximately cause any wage suppression. Accordingly,

I

Plaintiffs lack standing to bring a RICO claim based on these predicate acts. In

I

sum, Appellees' causation theory is starkly implausible and purely speculative and

I

cannot withstand a motion to dismiss._Z

C. Appellees Are At Most Indirect Victims Of The Alleged RICO

I

Violations.

I

Appellees are also not the direct victims of Mohawk's alleged

conduct, as required to establish RICO standing. See Hohnes, 503 U.S. at 268;

I Bivens Gardens, 140 F.3d at 906. In Hobnes, the Supreme Court made clear that

I

one aspect of proximate cause is "a demand for some direct relation between the

I

Bruce, No. 02 C 8319, 2004 WL 1194747, at *4 n. 6 (N.D. Ill. May 27, 2004)

(identifying 18 U.S.C § 1546 as a criminal fraud statute).

I

J2 The District Court's reliance on Mendoza v. Zirkle Fruit Co. is misplaced. 301

F.3d 1163, 1171 (9th Cir. 2002). In that case, the Ninth Circuit reversed the

I

district court's dismissal of the complaint, but the Ninth's Circuit's conclusion

turned on plaintiffs' allegation "that the growers singularly have the ability to

I

define wages in this labor market, akin to monopsony or oligopsony power." Mendoza, 301 F.3d at 1171 (emphasis added). Further, plaintiffs alleged that

defendants "comprise a large percentage of the fruit orchards and packing houses

I

in the area, and therefore affect wages throughout the labor market." Thus, the

decision in Mendoza turned on the allegation of market power and the defendants'

I

ability to influence the relevant labor market. Here, by contrast, no allegation of market power could be made, because Appellees have not alleged and could not

credibly assert that Mohawk possesses such market power in the Georgia

I

employment markets.

Accordingly, the district court incorrectly relied on

Mendoza and should have concluded that Appellees' damages theory is

I

impermissibly speculative.

I

22

I

I

injury asserted and the injurious conduct alleged." Holmes, 503 U.S. at 268.
I "Thus, a plaintiff who complain[s] of harm flowing merely from the misfortunes

I

visited upon a third person by the defendant's acts [is] generally said to stand at too

I

remote a distance to recover." ld. at 268-69 (citing 1 J. Sutherland, Law of

I

Damages 55-56 (1882)); see also, e.g., Bivens Gardens, 140 F.3d 898 (harm to

corporation does not give shareholders RICO standing).
I Here, Plaintiffs are not the first victims of Mohawk's alleged illegal

I

hiring, hlstead, the direct victims, if any, are, as Appellee's own Complaint

I

acknowledges, the unauthorized workers themselves because they are less likely to

I

have the bargaining power to command equal wages and equal treatment with

respect to such matters as workers' compensation. See RI,1, pp.10-11 (¶¶ 31, 36).
I hadeed, the Appellees are no more direct victims of the alleged

I

conduct than any other worker in the labor pool employed by any other employer.

I

Plaintiffs allege that Mohawk added to the supply of workers in the market. RI,I,

I

p.11(¶ 35). /xal increase in the labor pool would (if it were to have any effect at all)

affect wages throughout the relevant labor market. Thus, all authorized workers in
I the labor market would be affected (if at all) equally by such conduct. In short, on

I

Appellees' allegations, they have suffered no greater injury than any other hourly

I

worker in Georgia. This is not a direct injury.

I

In sum, allowing Appellees' damages theory to proceed would place

I

23

I

I

this Circuit in conflict with (1) the Seventh Circuit's view in Baker that violations
I of the immigration laws cannot cause illegal wage depression and (2)the Ninth

I

Circuit's decision in Mendoza that market power is essential to establish a direct

I

relation between illegal hiring and wages paid to legal workers.

I

Ill. APPELLEES' LAW.

GEORGIA RICO CLAIMS FAIL AS A MATTER OF

I

A. Appellees Failed To Allege Facts Sufficient To Establish That Mohawk Is Liable. 13

I

Appellees' Georgia RICO claims against Mohawk fail because

I

Mohawk cannot be liable for the alleged actions. In Georgia, a corporation itself is

not capable of committing a crime. Specifically, in Byrne v. Nezhat, 261 F.3d
I 1075 (llth Cir. 2001), a medical patient brought a Georgia RICO civil claim

I

against Northside Hospital and other defendants. The district court dismissed the

I

action "on the ground that [the corporation] was not capable of committing a

I

crime." Id. at 1105. This Court upheld the dismissal holding that:

Under Georgia law, a corporation qua corporation, cannot be

I

held to answer for a crime, and therefore could not violate the

Georgia RICO statute. This is not to say that a corporation may

I

disregard the law with impunity.

If a crime has been

committed, the agents of the corporation who are responsible

are subject to prosecution.
I _3 If this Court decides that Appellee's federal RICO claims should have been

I

dismissed, this Court may wish to remand the remaining state law claims (Georgia

R/CO and unjust enrichment, see Sections III and IV) to the District Court for a

I

determination as to whether it should exercise supplemental jurisdiction over those claims. See 28 U.S.C. § 1367(c).

I

24

I

I

Byrne, 261 F.3d at 1105 (citations omitted).
I As such, a corporation can only be held civilly liable under Georgia

I

RICO under the laws of criminal vicarious liability. See O.C.G.A. § 16-14-2(b). _4

I

Vicarious liability, however, only attaches in certain narrowly defined situations.

I

See O.C.G.A. § 16-2-22. First, a corporation can be vicariously liable if the statute

defining the crime "clearly indicates a legislative purpose to impose liability" on
I corporations. O.C.G.A. § 16-2-22(a)(1). The Georgia Court of Appeals, however,

I

has foreclosed that path to recovery under Georgia RICO. See Clark v. SecuriO,

I

Life Ins. Co., 270 Ga. 165, 168 n.ll (1998) ("A corporation may also face

I

prosecution under O.C.G.A. § 16-2-22(a)(1) for a crime if the statute defining the

crime clearly indicates a legislative purpose to impose liability on a corporation.
I RICO, however, is not such a statute.").

I

Second, a corporation can be vicariously liable for the crimes of its

I

employees if "the crime is authorized, requested, COlmnanded, performed, or

I

recklessly tolerated by the board of directors or by a managerial official who is

acting within the scope of his employment on behalf of the corporation."

I

I

I

14 See also Clark v. Security Life hTs. Co., 270 Ga. 165, 168 (1998) ("Because [Georgia] RICO is directed to organized criminal elements, we conclude that it is

more appropriate to assess vicarious liability under it in accordance with liability

I

for criminal acts.").

I

25

I

I

O.C.G.A. § 16-2-22(a)(2) (2004)) 5 Thus, Appellees must show that Mohawk's
I board of directors or officers approved the alleged predicate acts. Appellees,

I

however, have not alleged and cannot show such approval. 16 Accordingly, the

I

Complaint cannot withstand a motion to dismiss. See Byrne, 261 F.3d at 1105

I

(upholding dismissal of RICO claim where "complaint neither alleges nor

mentions which [Mohawk] agent was responsible for [Mohawk's] violation of the
I Georgia RICO statute"). 17

I

The District Court, however, held that Appellees need not make

I

allegations required to show their entitlement to relief. R2,44, p.48. Instead, the

I

District Court relied on State v. Military Circle Pet Co'., 257 Ga. 388 (1987), to

conclude that the vicarious liability requirements of O.C.G.A. § 16-2-22 are issues
I of proof to be established at trial. R2,44, p.48-49. Military Circle, however, deals

I

with state law criminal indictment notice issues--not federal civil pleading

I

requirements:

I

t5 Managerial officials are defined by statute to include "an officer of the

corporation or any other agent who has a position of comparable authority for the

I

fommlation of corporate policy or the supervision of subordinate employees"

O.C.G.A. § 16-2-22(b)(2) (2004). "Not every corporate agent is a 'managerial

I

official,' only 'top' management is intended to be covered." Military Circle Pet Ctr. v. State, 181 Ga. App. 657, 660 (1987), rev'd on other grounds, 257 Ga. 388

(Ga. 1987).

I

16 Instead, Appellees make vague allegations about the conduct and statements of

umlamed and unidentified "supervisors." R1,1, ¶¶ 20, 21, 28, 31.

I

17This failure is fatal to the Complaint under Fed. R. Civ. P. 8.

I

26

I

I

We agree with the state that it was not required to allege

I

the provisions of O.C.G.A. § 16-2-22 in the accusations

in question ... Although the state must prove the

I

applicable provisions of the foregoing code sections at trial against a criminal defendant, it is not necessary that

the state allege these provisions in the accusation.

I

O.C.G.A. § 17-7-71 (c), and the standards of due process,

govern the requirements of the indictment, and these

!

requirements were satisfied in the accusations in question.

I

Militaty Circle, 257 Ga. at 389-90 (citations omitted). But, Fed. R. Civ. P. 8(a)

I

requires a pleader to set forth "a short and plain statement of the claim showing

that the pleader is entitled to relief." See Fed. R. Civ. P. 8(a). Here, because
I Appellees can neither prove nor even allege that a single board member or officer

I

approved the alleged conduct, the Georgia RICO claim fails as a matter of law.

I

B. Appellees Cannot Establish Proximate Causation Under Georgia RICO.

I

Similar to federal RICO, Georgia RICO requires Appellees to show

I

that they were "injured by reason of any violation of [Georgia] Code Section 16-

14-4... " O.C.G.A. § 16-14-6(c). The "by reason of" language in the Georgia
I statute imposes the same proximate cause requirement of its federal counterpart.

I

Morast v. Lance, 631 F. Supp. 474, 481 (N.D. Ga. 1986) (opinion of Murphy, J.)

!

("A party, indirectly injured by a RICO offense, does not have standing to bring a

I

RICO claim."), aft'd, 807 F.2d 926 (1 lth Cir. 1987); Maddox v. Southern Eng'g

Co., 231 Ga. App. 802, 806 (1998) (proximate cause is an "essential element" of a
I

I

27

I

I

Georgia RICO claim); Green Leaf Nursery, 341 F.3d at 1307 (quoting Cox v.
I Adm'r U.S. Steel & Carnegie, 17 F.3d 1386, 1399) (1 lth Cir. 1994) (concluding

I

that a predicate act is only "a proximate cause [of the RICO injury] if it is a

I

substantial factor in the sequence of responsible causation.").

Accordingly,

I

Appellees must allege that they have suffered an injury that was proximately

caused by a violation of the Georgia RICO statute. Appellees have failed to do so.
I Moreover, as the District Court ruled, the only statutory violation that

I

can constitute a predicate act under Georgia law is knowing acceptance of false

I

identification documents in violation of 18 U.S.C. § 1546. To have standing,

I

therefore, Appellees must claim that Mohawk's alleged acceptance and use of false

identification documents proximately caused a reduction in their wages. Such a
I theory is even more speculative than Appellees' causation theory with respect to

I

illegal hiring. Nowhere in the complaint is their injury directly tied to violations of

I

18 U.S.C. § 1546. Because they neglected to plead an "essential element" of their

I

claim, it fails as a matter of law. See Maddox, 231 Ga. App. at 806.

IV. APPELLEES'

UNJUST ENRICHMENT

CLAIM FAILS AS A

I

MATTER OF LAW.

Appellees have not stated a cognizable claim for unjust enrichment.
I An unjust emichment claim is premised on the principle that a party cannot induce,

I

accept, or encourage another to furnish or render an item or service of value to the

I

party and avoid payment for that item or service. See Hollifield v. Monte Vista

I

28

I

I

Biblical Gardens, Inc., 251 Ga. App. 124, 130-31 (2001). It is well established
I that unjust enrichment only applies when there is no legal contract between the

I

parties. "Unjust enrichment theory does not lie where there is an express contract."

I

P1yor v. CCEC, hzc., 257 Ga. App. 450, 452 (2002). 18

I

Moreover, unjust enrichment is inapplicable where payment has been

made for the benefit conferred. See Crossland Inv. Co. v. Rhodes, 274 F. Supp. 2d
I 1302, 1312 (N.D. Fla. 2003) ("More fundamentally, deciding how much [plaintiff]

I

should be paid for the work it did is not a job for the court after the fact. It was a

I

job for the parties in advance. They made the contracts they made and now must

I

live with them."). 19 Here, Mohawk agreed to pay a bargained-for wage to

I

18 See also Kwickqe/Flash Foods, Inc. v. Lakeside Petroleum, Inc., 246 Ga. App.

729, 730 (2000) (same); Cochran v. Ogletree, 244 Ga. App. 537 (2000) (same);

Zampatti v. Tradebank Int'l. Franchising Corp., 235 Ga. App. 333, 340 (1998)

I

(same).

19 See also N.G.L Travel Assocs. v. Celebrity Cruises, Inc., 764 So. 2d 672, 675

I

(Fla. Dist. Ct. App. 2000) ("[Plaintiff] failed to demonstrate that the [defendant]

retained a benefit [and] failed to demonstrate how the port charges [were] inflated

I

[by defendant] ... there is no dispute that [plaintiff] knew precisely what conmlission rate it would earn per cruise booking [and that it] agreed to accept that

amount as payment for the service provided. [Plaintiff] received exactly what it

I

bargained for. Unjust enrichment 'cannot exist where payment has been made for

the benefit conferred.'"); WTSP-TV, Inc. v. Number One Real_ Centep, Inc., 490

I

So. 2d 1273,1274 (Fla. Dist. Ct. App. 1986) (citation omitted) ("[U]njust enrichment ... is not applicable to a dispute of this kind. Plaintiff received the full

measure of its bargain with [defendant], i.e., its property was sold and the

I

conmaission was earned."). Although these cases arise in Florida, the elements of

unjust em'ichment are the same as those in Georgia: (1) plaintiff conferred a

I

benefit on the defendant, who has knowledge of the benefit; (2)the defendant accepts and retains the conferred benefit; and (3) under the circumstances it would

I

29

I

I

Appellees, which Appellees accepted and Mohawk paid. Appellees have received
I the wages they bargained for. Thus, they have no claim for unjust enrichment.

I

V. CONCLUSION.

I

For the foregoing reasons, the portions of the district court's order

denying dismissal of Appellees' Complaint should be reversed with instructions to
I dismiss Appellees' Complaint with prejudice.

I

Respectfully submitted,

I

ATTORNEYS FOR APPELLANT

I

Dated: September 7, 2004.

By:

_ Ca_O _'_

R. Carl Cannon

I

I

I

I

I

I

I be inequitable for the defendant to retain the benefit without paying for it. See

I

N.G.L. TravelAssocs., 764 So. 2d at 675 n.5; Hollifield. 251 Ga. App. at 130.

I

I

30

I

I

CERTIFICATE OF SERVICE
I This is to certify that I have this day served the Appellees with the

I

foregoing by having a copy of same deposited in the United States Mail in an

I

envelope, with sufficient First Class postage affixed thereon, properly addressed to

I

their counsel of record as follows:

Bobby Lee Cook, Esq.

I

COOK & CONNELLY

9899 Colrunerce Street

I

Summerville, GA 30747

Matthew Thames, Esq.

I

GODDARD, THAMES, HAMMONTREE & BOLDING

I

27 I6 Cleveland Hwy. P.O. Box 399

Dalton, GA 30722-0399

I

I

John E. Floyd, Esq. Joshua F. Thorpe, Esq. Ronan P. Doherty, Esq. Nicole G. Iannarone, Esq. BONDURANT, MIXSON &
ELMORE LLP
1201 W. Peachtree Street, N.W. 3900 One Atlanta Center
Atlanta, GA 30309

Howard Foster, Esq. JOHNSON & BELL, 55 E. Monroe Street Suite 4100

LTD.

Chicago, IL 60603

I

This 7th day of September 2004.

I

I

R. Carl Cannon Counsel for Defendant Mohawk Industries, Inc.

I

I

I

I

 
 Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)

2006 WL 3846526 (U.S.) (Appellate Petition, Motion and Filing) Supreme Court of the United States.
MOHAWK INDUSTRIES, INC., Petitioner, v.
Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones, and Lora Sisson, individually and on behalf of a class, Respondents.
No. 06-873. December 19, 2006.
On Petition for a Writ of Certiorari to the United States Court of Appeals for the Eleventh Circuit
Petition for a Writ of Certiorari
Carter G. Phillips,* Juan P. Morillo, Steven T. Cottreau, Matthew J. Warren, Sidley Austin LLP, 1501 K Street, NW, Washington, DC 20005, (202) 736-8000, Counsel for Petitioner.
*i QUESTIONS PRESENTED
1. Whether plaintiffs’ alleged wage-suppression damages are a direct injury under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 (“RICO”), and whether the Eleventh Circuit’s holding can be reconciled with Anza v. Ideal Steel Supply Co., 126 S. Ct. 1991 (2006).
2. Whether a corporation and its agents can constitute an association-in-fact RICO enterprise and whether a company’s hiring of its own employees may constitute participation in the conduct of an enterprise that is distinct from the company itself?
3. Whether employees who received the wages for which they contracted have suffered an injury to “business or property” within the meaning of 18 U.S.C. § 1964(c)?

*II STATEMENT REQUIRED BY RULE 14.1
Pursuant to Supreme Court Rule 14.1, petitioner states that all parties to the proceeding in the court whose judgment is sought to be reviewed are listed in the caption above.

STATEMENT REQUIRED BY RULE 29.6
Pursuant to Supreme Court Rule 29.6, petitioner Mohawk Industries, Inc. states that there is no parent corporation or publicly held corporation that owns 10% or more of Mohawk Industries, Inc.’s stock.

*iii TABLE OF CONTENTS

QUESTIONS PRESENTED ..............................................................................................................................................................

i

STATEMENT REQUIRED BY RULE 14.1 ...............................................................................................................................

ii

STATEMENT REQUIRED BY RULE 29.6 ...............................................................................................................................

ii

1

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)

TABLE OF AUTHORITIES ..............................................................................................................................................................

iv

OPINIONS BELOW .............................................................................................................................................................................

1

JURISDICTION ......................................................................................................................................................................................

2

STATUTORY PROVISIONS ...........................................................................................................................................................

2

STATEMENT OF THE CASE .........................................................................................................................................................

2

REASONS FOR GRANTING THE PETITION ........................................................................................................................

10

I. THE ELEVENTH CIRCUIT IGNORED THIS COURT’S HOLDING IN ANZA ...................................................

10

II. THIS COURT SHOULD RESOLVE THE CIRCUIT SPLIT ON WHETHER A DEFENDANT

16

CORPORATION AND ITS AGENTS ACTING ON ITS BEHALF CAN CONSTITUTE A DISTINCT

ASSOCIATION-IN-FACT ENTERPRISE ..................................................................................................................................

III. A CLAIM FOR SUPPRESSED WAGES IS NOT AN INJURY TO “BUSINESS OR PROPERTY”

24

UNDER RICO .........................................................................................................................................................................................

CONCLUSION ........................................................................................................................................................................................

28

*iv TABLE OF AUTHORITIES CASES Anza v. Ideal Steel Supply Co., 126 S. Ct. 1991 (2006) ................................................... Baker v. IBP, 357 F.3d 685 (7th Cir. 2004) .......................................................................... Board of Regents v. Roth, 408 U.S.564 (1972) ................................................................... Bieter Co. v. Blomquist, 987 F.2d 1319 (8th Cir. 1993) .................................................. Brittingham v. Mobil Corp., 943 F.2d 297 (3d Cir. 1991) .............................................. Bunker Ramo Corp. v. United Bus. Forms, Inc., 713 F.2d 1272 (7th Cir. 1983) ... Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) .................................. Davis v. Mutual Life Ins. Co., 6 F.3d 367 (6th Cir. 1993) ............................................... DeBuono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S. 806 (1997) ............ DeCanas v. Bica, 424 U.S. 351 (1976) ................................................................................... DeMauro v. DeMauro, 115 F.3d 94 (1st Cir. 1997) .......................................................... Diaz v. Gates, 420 F.3d 897 (9th Cir. 2005), cert. denied sub. nom Parks v. Diaz, 126 S. Ct. 1069 (2006) ......................................................................................................

passim 10, 18, 20
26 26 18, 20 22 17 18 16 13 26, 27 24

2

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
Discon, Inc. v. NYNEX Corp., 93 F.3d 1055 (2d Cir. 1996) .......................................... Evans v. City of Chi., 434 F.3d 916 (7th Cir. 2006) .......................................................... Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir. 1997) ........................................... Harper v. Virginia Dep’t of Taxation, 509 U.S. 86 (1993) ............................................. Hecht v. Commerce Clearing House, Inc., 897 F.2d 21 (2d Cir. 1990) ..................... Helvering v. Morgan’s, Inc., 293 U.S. 121 (1934) ............................................................ *v Isaak v. Trumbull Sav. & Loan Co., 169 F.3d 390 (6th Cir. 1999) ....................... Jaguar Cars, Inc. v. Royal Oak Motor Car Co., 46 F.3d 258 (3d Cir. 1995) .......... James Cape & Sons Co. v. PCC Constr. Co., 453 F.3d 396 (7th Cir. 2006) ........... Jund v. Town of Hempstead, 941 F.2d 1271 (2d Cir. 1991) ........................................... Libertad v. Welch, 53 F.3d 428 (1st Cir. 1995) ................................................................... Living Designs, Inc. v. E.I. DuPont De Nemours & Co, 431 F.3d 353 (9th Cir. 2005), cert. denied, 126 S. Ct. 2861 (2006) .......................................................................... Maddox v. Southern Eng’g Co., 500 S.E.2d 591 (Ga. Ct. App. 1998) ....................... Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002) ......................................... NYNEX Corp. v. Discon, Inc., 525 U.S. 128 (1998) .......................................................... Old Time Enters., Inc. v. International Coffee Corp., 862 F.2d 1213 (5th Cir. 1989) .................................................................................................................................................... Patterson v. Mobil Oil Corp., 335 F.3d 476 (5th Cir. 2003) .......................................... Rice v. Janovich, 742 P.2d 1230 (Wash. 1987) ................................................................... Reves v. Ernst & Young, 507 U.S. 170 (1993) ..................................................................... Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339 (2d Cir. 1994) ........................................................................................................................................... Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) ......................................................... United States v. Feldman, 853 F.2d 648 (9th Cir. 1988) ................................................. United States v. Huber, 603 F.2d 387 (2d Cir. 1979) ....................................................... United States v. Masters, 924 F.2d 1362 (7th Cir. 1991) ................................................ *vi United States v. Navarro-Ordas, 770 F.2d 959 (11th Cir. 1985) .......................... United States v. Perholtz, 842 F.2d 343 (D.C. Cir. 1988) ...............................................

18 25 18, 19 16 28 22 26, 27 20 15 24 25 18
7 24, 25, 26
19 18
27 24, 27
17 18, 19
24 22 23 23 22 23 3

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)

United States v. Thevis, 665 F.2d 616 (5th Cir. 1980) ...................................................... Williams v. Mohawk Indus., Inc., 411 F.3d 1252 (11th Cir. 2005), vacated by 126 S. Ct. 2016 (2006) .................................................................................................................. Yamaha Motor Corp. v. Calhoun, 516 U.S. 199 (1996) .................................................. STATUTES 18 U.S.C. § 1961 ............................................................................................................................. §§ 1961-1968 .................................................................................................................................... § 1962(c) ............................................................................................................................................ § 1964(c) ............................................................................................................................................ RULE Fed. R. Civ. Proc. 12(b)(6) .......................................................................................................... SCHOLARLY AUTHORITY Samuel Alito, Jr., Racketeering Made Simple(r), in The RICO Racket 1 (G. McDowell ed., 1989) ..................................................................................................................... OTHER AUTHORITY Webster’s Third International Dictionary of the English Language (1969) ............

23 1, 8, 9
23
6, 21 2
17 4, 24
5
22
21

*1 Petitioner Mohawk Industries, Inc. (“Mohawk”) respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Eleventh Circuit in this case.

OPINIONS BELOW
Petitioner Mohawk Industries, Inc. (“Mohawk”) respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Eleventh Circuit in this case.
The opinion of the district court denying in part and granting in part petitioner’s motion to dismiss was reported at 314 F. Supp. 2d 1333 (N.D. Ga. 2004) and is reproduced in the appendix (Pet. App.) at 32a-69a. The order of the district court certifying the case for interlocutory appeal was unpublished and is reproduced at Pet. App. 70a-74a. The order of the Eleventh Circuit granting Mohawk’s petition for interlocutory appeal was unpublished and is reproduced at Pet. App. 75a. The June 9, 2005 opinion of the court of appeals affirming in part and reversing in part the district court’s order was published at 411 F.3d 1252 (11th Cir. 2005) (“Williams I”). The order of the court of appeals denying rehearing en banc for Williams I was unpublished and is reproduced at Pet. App. 76a. This Court’s December 12, 2005 order granting certiorari limited to the first question in Mohawk’s petition was published at 126 S. Ct. 830 (2005) and is reproduced at Pet. App. 30a. This Court’s June 5, 2005 order dismissing its partial grant of certiorari as improvidently granted, granting certiorari without limitation, vacating Williams I, and remanding to the Eleventh Circuit for reconsideration in light of Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006), was published at 126 S. Ct. 2016 (2006) and is reproduced at Pet. App. 31a. The September 27, 2006 opinion of the court of appeals after remand was published at 465 F.3d 1277 (11th Cir. 2006) (“Williams
4

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
II”) and is reproduced at Pet. App. 1a-29a. The order of the court *2 of appeals denying rehearing en banc for Williams II was unpublished and is reproduced at Pet. App. 77a.
JURISDICTION
The judgment of the court of appeals was entered on September 27, 2006. An order denying rehearing was entered on November 22, 2006. This Court has jurisdiction under 28 U.S.C. § 1254(1).
STATUTORY PROVISIONS
The relevant statutory provisions are listed in the appendix. See Pet. App at 78a-79a.
STATEMENT OF THE CASE
This case presents three important questions about the scope and construction of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 (“RICO”), which have divided the courts of appeals and which have significant consequences for civil RICO litigation. Plaintiffs filed this RICO suit on behalf of a putative class of current and former hourly employees of Mohawk. Plaintiffs allege that Mohawk hired illegal immigrants and thereby suppressed the wages that plaintiffs were offered and voluntarily accepted. The Eleventh Circuit’s ratification of this theory of liability (i)is at odds with this Court’s, direct injury holding in Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006), (ii) exacerbates a deep split among the courts of appeals over RICO’s association-in-fact enterprise requirements, and (iii) adds to widening circuit conflicts over the meaning of civil RICO’s injury to “business or property” standing requirement.
Last Term, this Court initially granted certiorari in this case to resolve the second of these three questions: namely, whether a defendant corporation can conduct or participate in *3 the conduct or the affairs of a distinct association-in-fact enterprise where the only members of the putative “association-in-fact enterprise” are the corporation and its agents. That question was argued before this Court on April 26, 2006. In light of this Court’s Anza decision, this Court chose not to resolve the enterprise issue, instead granting certiorari in this case on the direct injury question presented, vacating the Eleventh Circuit’s opinion, and remanding this case for reconsideration in light of Anza.
On remand, however, the Eleventh Circuit ignored the central holding of Anza - 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.” Id. at 1997. Instead, the Eleventh Circuit fundamentally misread Anza to hold that it is enough for civil RICO standing where there is some “correlation” between the predicate act (illegal hiring) and the asserted injury (depressed wage levels). See Pet. App. at 18a. This cramped misinterpretation limits Anza to its facts and deprives the case of its import: confining RICO civil litigation to instances where the alleged injury actually stems from the RICO violation itself - and not from other tangential acts. Other courts of appeals have faithfully executed the clear holding in Anza, which makes the Eleventh Circuit’s approach particularly worthy of this Court’s review.
This case also presents a second critical and still unresolved question on which this Court granted certiorari in this case last Term: whether a corporation can constitute an association-in-fact RICO enterprise and whether such an enterprise is distinct from the defendant corporation itself. As the Eleventh Circuit candidly acknowledged, its decision below “puts our circuit in conflict” with the Seventh Circuit’s construction of the enterprise requirement in a materially indistinguishable case. Pet. App. at 10a. Indeed, the split in the courts of appeals on this question has widened to a 3-3 split, as the Ninth Circuit has joined the Sixth and Eleventh *4 Circuits in concluding that such enterprises are distinct and thus permissible, while the Second, Third, and Seventh Circuits have held they are not. This split warrants this Court’s attention at least as much as it did last Term.
The third question meriting this Court’s review is whether plaintiffs have alleged an injury to their “business or property,” as required for civil RICO standing by 18 U.S.C. § 1964(c). The courts of appeals are deeply divided on the extent to which
5

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
state law defines the interests that convey standing under civil RICO. Below, the Eleventh Circuit held that plaintiffs had a sufficient interest because they have “a legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes.” Pet. App. at 13a (internal quotation marks omitted). That “entitlement,” however, is neither a property right nor a business under civil RICO.
In reaching these flawed conclusions, the Eleventh Circuit’s decision permits plaintiffs to proceed with RICO suits based upon ordinary business conduct. As Justice Breyer noted during oral argument in this case last Term, Congress never intended to “RICO-ize, with its treble damages and private plaintiffs and everything, vast amounts of ordinary commercial activity.” Tr. Oral Arg. at 44-45, Mohawk Indus., Inc. v. Williams, 126 S. Ct. 2016 (2006) (No. 05-465). But that is precisely what the Eleventh Circuit (and other courts of appeals) has permitted: a suit, alleging a contrived enterprise based upon ordinary business contracts, brought by plaintiffs with no cognizable injury, and certainly, no injury directly caused by the conduct prohibited by RICO. The Court should grant certiorari to help restore civil RICO to its proper role: that of a narrowly drawn remedy aimed at providing redress to the direct victims of crimes - not a blunderbuss weapon employing in terrorem remedies to extort windfall recoveries.
1. On January 6, 2004, the respondents filed a complaint in the United States District Court for the Northern District of Georgia on behalf of a putative class of current and former *5 hourly employees of petitioner Mohawk. Pet. App. at 85a109a. Mohawk was the only named defendant. Mohawk (and its subsidiaries) is a leading manufacturer of carpet, rugs, tile, and other floor coverings. Plaintiffs asserted a federal RICO claim under 18 U.S.C. § 1962(c), two claims under Georgia’s RICO statute (Ga. Code Ann. § 16-14-4), and a claim for unjust enrichment. All of these claims stemmed from plaintiffs’ allegation that Mohawk had knowingly employed illegal aliens and that this employment of illegal workers somehow depressed wages for all of Mohawk’s legal hourly workers throughout the State of Georgia.1 See Pet. App. at 88a-92a (Compl. ¶¶ 14-35).
The Complaint almost exclusively alleged misdeeds by Mohawk or its employees unrelated to any RICO enterprise. For example, plaintiffs alleged that “Mohawk has accepted for employment … workers that it knew or had reason to know were not authorized to work in the United States”; that “Mohawk has knowingly and recklessly accepted” obviously false documentation for employees; that “Mohawk supervisors have encouraged … employees to … [illegally] reapply for work at Mohawk”; that “Mohawk employees and/or supervisors have destroyed eligibility documents” to conceal Mohawk’s employment of illegal workers; that “Mohawk employees have traveled to the United States border … to recruit undocumented aliens”; and that “Mohawk employees and supervisors have assisted illegal workers in attempting to evade detection by law enforcement.” Pet. App. at 88a-89a, 91a (Compl. ¶¶ 15-18, 20, 22, 28).2
*6 In an attempt to satisfy § 1962(c)’s requirement that the defendant conduct the affairs of a distinct “enterprise” (and not just its own affairs), plaintiffs alleged that Mohawk had participated in “an association-in-fact enterprise with third party employment agencies and other recruiters.” Pet. App. at 101a (Compl. ¶ 76). In particular, plaintiffs alleged that these thirdparty recruiters supplied illegal workers to Mohawk and that Mohawk paid the recruiters a fee for each worker they supplied. See id. Plaintiffs asserted without explanation that Mohawk participated in the operation and management of the affairs of this “enterprise.” Id. (Compl. ¶¶ 77, 78). Plaintiffs further asserted that the enterprise “exists for Mohawk’s benefit.” Id. (Compl. ¶ 78). Plaintiffs did not name any participants in this supposed “enterprise” other than Mohawk and its employment recruiters.
Plaintiffs asserted that they “have suffered an injury to their ‘business or property,’ i.e. lost wages, as a direct result of Mohawk’s violation of federal RICO.” Pet. App. at 103a (Compl. ¶ 86); see 18 U.S.C. § 1964(c)(civil RICO plaintiffs must be “injured in [their] business or property by reason of a violation of section 1962”). According to plaintiffs, the wages that Mohawk pays (and that plaintiffs accepted) are “depressed” by Mohawk’s alleged misconduct. See Pet. App. at 91a-92a (Compl. ¶33) (“Mohawk’s employment and harboring of large numbers of illegal workers has enabled Mohawk to depress wages and thereby to pay all of its hourly employees … wages that are lower than they would be if Mohawk did not engage in this illegal conduct.”). This depression supposedly occurs because Mohawk’s employment of undocumented workers effects an “unlawful expansion of the labor pool” in north Georgia that “permit[s] *7 Mohawk to depress the wages that it pays all its hourly employees.” Id. at 92a (Compl. ¶35). The Complaint offered no explanation for how Mohawk could pay below-market wages and retain its workforce, nor did it claim that Mohawk had sufficient market power to depress wages throughout Georgia. Instead, plaintiffs merely alleged generally that Mohawk’s employment of “hundreds” of illegal aliens somehow depressed the wages of the millions of workers in Georgia. Id. at 98a (Compl. ¶ 61).
6

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
2. Mohawk moved to dismiss all four counts of the complaint, arguing inter alia that respondents had failed to plead a legally sufficient RICO enterprise and that they had not pled a direct injury to business or property proximately caused by the alleged predicate acts.3 The district court denied Mohawk’s motion to dismiss the federal and Georgia RICO claims.4 Pet. App. at 69a. The district court, however, granted Mohawk’s motion to certify an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) and stayed discovery pending resolution of the appeal. Pet. App. at 74a. The court found that there was “substantial ground for difference of opinion” both as to whether plaintiffs had pled an adequate RICO enterprise and as to whether they had pled sufficient proximately caused direct injury to business or property, and concluded that these issues merited immediate review. Id. at 72a-73a.
3. The Eleventh Circuit accepted the certification, Pet. App. at 75a, and affirmed the district court’s denial of *8 Mohawk’s motion to dismiss the federal and Georgia RICO claims5 Williams I, 411 F.3d at 1266.
4. Mohawk filed a petition for certiorari on October 7, 2005, requesting review on two questions: (1) whether Mohawk, together with its agents, can constitute an enterprise under RICO, and (2) whether plaintiffs pied direct injuries to business or property. Mohawk Cert. Pet. at *i, Mohawk Indus., Inc. v. Williams, 126 S. Ct. 830, 2005 WL 2566486 (Oct. 7, 2005). This Court granted certiorari limited to the first question on December 12, 2005. See Pet. App. at 30a. That question was briefed on the merits and was argued on April 26, 2006.
On June 5, 2006, this Court issued its opinion in Anza. That same day, the Court issued an order dismissing its partial grant of certiorari as improvidently granted, granting certiorari without limitation, vacating Williams I, and remanding to the Eleventh Circuit for reconsideration in light of Anza. See Pet. App. at 31a. Petitioner’s reply brief had proposed precisely this course of action if the Court were to decide the causation issue in Anza in the way that it did. Pet. Reply at *13 n.10, Mohawk Indus., Inc. v. Williams, 126 S. Ct. 830, 2006 WL 951123 (Apr. 11, 2006).
5. On remand, the Eleventh Circuit ordered supplemental briefing on the RICO claim limited to the impact of Anza and reaffirmed (Williams II).6 Rather than faithfully apply Anza’s *9 direct injury guidance and determine whether the claimed injury was caused by actions “entirely distinct” from the claimed RICO violation, the court of appeals recited verbatim the paragraphs from Williams I in reiterating its holding that “the plaintiffs have alleged sufficient proximate cause.” Compare Pet. App. at 16a, with Williams I, 411 F.3d at 1261-62. The Eleventh Circuit purported to distinguish Anza, asserting that there was a “correlation between illegal hiring and lower wages,” Pet. App. at 18a, and suggesting that plaintiffs’ allegations about the “purpose and intended effect” of Mohawk’s supposed illegal hiring were sufficient, id. at 16a. The Eleventh Circuit also claimed that “the concerns expressed in Anza” only apply where another directly injured party could bring a RICO civil suit. Id. at 18a-19a.
The Eleventh Circuit also upheld the legal sufficiency of the enterprise allegations. The Eleventh Circuit held that a plaintiff could survive a motion to dismiss by alleging an “enterprise” consisting of any “loose or informal association of distinct entities.” Pet. App. at 8a (internal quotation marks omitted). The court further held that the plaintiffs’ general allegation that “Mohawk participates in the operation and management of the affairs of the enterprise” was sufficient participation in the conduct of a distinct enterprise. Id. at 9a-10a (internal quotation marks omitted).
The Eleventh Circuit candidly acknowledged that its enterprise “conclusion puts our circuit in conflict with the Seventh Circuit’s decision in Baker v. IBP, Inc.” Pet. App. at 10a. In Baker, the Seventh Circuit confronted materially identical allegations.7 That court, however, held that the *10 enterprise allegations were legally flawed: allegations that a corporate defendant was unlawfully hiring its workers did not constitute the requisite participation in a separate enterprise - they only amounted to a claim that the corporation was “operat[ing] itself unlawfully.” Baker v. IBP, Inc., 357 F.3d 685, 691 (7th Cir. 2004) (Easterbrook, J.). The Eleventh Circuit rejected this analysis, claiming that it was “possible” for plaintiffs to establish that Mohawk operated or managed the supposed “enterprise” of Mohawk and its recruiters. Pet. App. at 12a. The Eleventh Circuit did not explain how this could be “possible” or how Mohawk’s hiring of its own employees constituted the operation or management of the affairs of a distinct enterprise - as opposed to Mohawk’s own affairs.
Finally, the Eleventh Circuit concluded that plaintiffs’ bid for a retroactive wage increase was a cognizable interest under RICO. Pet. App. at 12a-13a. According to the Eleventh Circuit, plaintiffs have a “ ‘legal entitlement to business relations unhampered by the RICO predicate statutes,’ ” which confers civil standing under § 1964(c). Id. at 13a (quoting Mendoza v.
7

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
Zirkle Fruit Co., 301 F.3d 1163, 1168 n.4 (9th Cir. 2002)).
6. On October 18, 2006, Mohawk filed a petition for rehearing en banc, specifically asking the Court to review the panel’s interpretation of Anza and to reconsider preexisting Eleventh Circuit precedent holding that corporations may be constituent members of an association-in-fact enterprise. The Eleventh Circuit denied the petition on November 22, 2006. Pet. App. at 77a.
REASONS FOR GRANTING THE PETITION
I. THE ELEVENTH CIRCUIT IGNORED THIS COURT’S HOLDING IN ANZA.
Last Term, this Court vacated the Eleventh Circuit’s prior decision in this case and remanded with instructions to *11 reconsider in light of this Court’s Anza decision. The Eleventh Circuit failed to follow the Court’s direction to apply Anza’s holding to this case, and instead reaffirmed its prior ruling on bases that Anza squarely rejects and caused an immediate split with the Seventh Circuit over the interpretation of the direct injury requirement after Anza.
In Anza, plaintiff Ideal Steel Supply Corp. (“Ideal”) brought a RICO action against its competitor National Steel Supply, Inc. (“National”) and National’s owner-operators Joseph and Vincent Anza. Plaintiff alleged that National unlawfully failed to charge state sales tax to customers that paid in cash. Anza, 126 S. Ct. at 1994. Plaintiff alleged that this amounted to state tax fraud and permitted National effectively to cut its prices. See id. at 1995. Ideal pled that its lost sales were “direct[ly]” caused by this racketeering scheme. Am. Compl. ¶ 1, Ideal Steel Supply Corp. v. Anza, 02 Civ. 4788 (RMB) (S.D.N.Y. Sept. 13, 2002), available at 2006 WL 122082, at *5-20 (hereafter “Anza Complaint”) (“[T]he intent and direct effect of [the RICO violation] is to cause Ideal, National’s principal competitor, to lose a substantial part of its business to National.”).8 Significantly, Ideal’s injury was not a derivative or passed-on injury; it alleged an injury that was entirely its own. See Anza, 126 S. Ct. at 1997 (“Ideal asserts it suffered its own harms when the Anzas failed to charge customers for the applicable sales tax” (emphasis added)).
This Court held that Ideal failed to plead a proximately-caused direct injury cognizable under RICO. See id. at 1997- *12 98. Critically, this Court did not hold that plaintiff’s theory of causation was illogical - it was perfectly logical that the reduction of effective prices by 8.25% (the amount of New York’s sales tax) could cause customers to switch steel suppliers. Instead, Anza held that RICO’s direct injury requirement demands more than logic. The “central question” in evaluating whether a RICO plaintiff has pled a direct injury is “whether the alleged RICO violation led directly to the plaintiff’s injuries.” Id. at 1998. Under this analysis, Ideal’s alleged injury was indirect, because “[t]he cause of Ideal’s asserted harms … is a set of actions (offering lower prices) entirely distinct from the alleged RICO violation (defrauding the State).” See id. at 1997. In short, RICO requires that the alleged injury be immediately caused by the RICO violation and not be dependent upon some other intervening choice or action.
This Court explained that its indirect-injury conclusion was confirmed by two “discontinuit[ies]” between the cause of Ideal’s asserted harms and the alleged predicate acts. Id. First, National “could have lowered its prices for any number of reasons unconnected to the asserted pattern of fraud.” Id. (“[T]he fact that a company commits tax fraud does not mean the company will lower its prices; the additional cash could go anywhere.”). Second, Ideal’s alleged injury “could have resulted from factors other than” National’s decreased prices. Id. This Court reasoned that “[b]usinesses lose and gain customers for many reasons, and it would require a complex assessment to establish what portion of Ideal’s lost sales were the product of National’s decreased prices.” Id. It concluded that the direct injury requirement “is meant to prevent these types of intricate, uncertain inquiries from overrunning RICO litigation.” Id. at 1998.
The instant case has identical defects which are patently apparent. Indeed, last Term this Court vacated and remanded this case for reconsideration in light of Anza. Plaintiffs in this case allege that Mohawk paid them a depressed wage because *13 Mohawk allegedly hired other undocumented workers. But under Anza, Mohawk’s conduct with respect to other parties does not cause a direct injury to the plaintiffs. As in Anza, “[t]he cause of [plaintiffs’] asserted harms … is a set of actions [(payment of lower wages)] entirely distinct from the alleged RICO violation [(hiring unauthorized workers)].” Id. at 1997.
8

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
Likewise, this fundamental flaw is confirmed by the same two principal factors set forth in the Anza decision. First, just as the defendant in Anza “could have lowered its prices for any number of reasons unconnected to the asserted pattern of fraud,” Mohawk could have set plaintiffs’ wages based upon a host of economic, business, and competitive reasons unrelated to its alleged hiring of unlawful workers, Id. Second, as in Anza, simply because a company “commits [immigration violations] does not mean the company will lower its [wages].” Id. As a result, the Eleventh Circuit’s decision permits precisely the types of “speculative” and “intricate” causation inquiries that this Court has sought to exclude from RICO litigation.
In reaching its decision, the Eleventh Circuit misread this Court’s Anza opinion in two critical respects. First, the court held that the direct injury requirement is met because of a “correlation between illegal hiring and lower wages.”9 Pet. App. at 18a. But a mere correlation is not enough to sustain a RICO claim. If it were, then Ideal’s injury in Anza would have been direct, for there certainly could be a correlation *14 between lost sales and its sole competitor’s effective price cuts. Instead, Anza requires an assessment of whether the RICO violation is the action immediately causing the alleged injury. Despite the Anza decision’s efforts to emphasize this point, the Eleventh Circuit ignored this critical holding of Anza.
Moreover, the court of appeals’ claim that “Anza’s concern about speculative damages, ‘intricate, uncertain injuries,’ and unwieldy apportionment are not implicated in this case” is baffling. Id. at 19a. Here, plaintiffs must show that they would have received some hypothetical higher wage rate if Mohawk had not engaged in the alleged unlawful hiring. But numerous “factors other than [Mohawk’s] alleged acts of fraud” affect the wages that an employer pays - including the overall health of the national and local economies, the profitability of the carpet industry, competition for labor from other Georgia employers, and the individual skills and productivity of each worker. Anza, 126 S. Ct. at 1997. These inherent complications in plaintiffs’ claim for depressed wages confirm the indirect nature of the injury alleged.
The Eleventh Circuit also rested its holding of a direct injury upon a basis that Anza held to be impermissible. The Eleventh Circuit repeatedly noted that a direct injury existed because plaintiffs specifically pied that Mohawk’s “hiring and harboring of illegal workers has the purpose and direct result of depressing the wages paid to the plaintiffs.” Pet. App. at 17a, 23a-24a. This reliance on the averments of a “purpose” to injure plaintiffs and on conclusory allegations of “directness” flatly contradicts Anza. In fact, the Anza plaintiff made identical allegations - that “[t]he purpose and direct effect” of the defendants’ tax fraud was to cause the alleged RICO injury. See Anza Compl. ¶ 32. This Court rejected the adequacy of such allegations, concluding that a “RICO plaintiff cannot circumvent the proximate-cause requirement *15 simply by claiming that the defendant’s aim was to [cause the alleged injury].” Anza, 126 S. Ct. at 1998.10 The Eleventh Circuit’s interpretation of Anza has already created a new circuit split. In contrast to the Eleventh Circuit, the Seventh Circuit has applied Anza to bar complaints alleging injuries that were not directly caused by the RICO violation. In James Cape & Sons Co. v. PCC Construction Co., the plaintiff (“Cape”) alleged that the defendant construction companies conspired to learn the amount of Cape’s bids for state contracts, used this knowledge “to unfairly manipulate the bidding process by underbidding Cape by small increments,” and thereby caused Cape to lose bids and business. 453 F.3d 396, 398 (7th Cir. 2006). The Seventh Circuit held that there was no direct injury because “[a] court could never be certain whether Cape would have won any of the contracts that were the subject of the conspiracy ‘for any number of reasons unconnected to the asserted pattern of fraud.’ ” Id. at 403 (quoting Anza, 126 S. Ct. at 1997). The Eleventh Circuit’s holding in the instant case, however, would have permitted Cape’s suit to proceed, for there certainly could be a “correlation” between the defendants’ bid manipulation violations and Cape’s alleged damages.
In short, the Eleventh Circuit has adopted a cramped interpretation of Anza that robs the direct injury requirement of its important gatekeeping function: confining RICO litigation to cases where the victim seeks redress for an injury directly caused by the racketeering activity. The Eleventh Circuit’s decision continues to permit creative plaintiffs to *16 plead RICO claims that are far-fetched and far afield from RICO’s core purposes.
The Eleventh Circuit’s failure to heed Anza in the wake of this Court’s explicit instruction to do so warrants certiorari. This Court has often granted certiorari after a lower court fails correctly to interpret a decision that it was instructed to consider in an order granting certiorari, vacating the previous opinion, and remanding for reconsideration. See, e.g., DeBuono v. NYSAILA Med. & Clinical Servs. Fund, 520 U.S. 806, 812 (1997); Harper v. Virginia Dep’t of Taxation, 509 U.S. 86, 94 (1993).
II. THIS COURT SHOULD RESOLVE THE CIRCUIT SPLIT ON WHETHER A DEFENDANT CORPORATION AND ITS AGENTS ACTING ON ITS BEHALF CAN CONSTITUTE A DISTINCT ASSOCIATION-IN-FACT
9

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
ENTERPRISE.
The second critical issue presented by this case is an issue that this Court has already recognized as warranting its attention: whether a corporate defendant can conduct or participate in the conduct of the affairs of a RICO “enterprise” comprised solely of the corporation and its non-employee agents performing tasks for the corporation. Last Term, this Court initially granted certiorari in this case to resolve the deep divide amongst the courts of appeals on this issue. That divide has since widened. The Eleventh Circuit’s holding that the enterprise allegations here are sufficient parallels similar holdings in the Sixth and Ninth Circuits. The Second, Third, and Seventh Circuits disagree, holding that such “associations-in-fact” are indistinct from the corporations themselves. Indeed, the Eleventh Circuit itself acknowledged that its decision that a manufacturer and its employment recruiters could comprise an association-in-fact enterprise “puts our circuit in conflict” with the Seventh Circuit’s construction of the enterprise requirement in a materially identical case. Pet. App. at 10a. This Court should again grant certiorari to resolve this question.
*17 Section 1962(c) makes it “unlawful for any person employed by or associated with any enterprise … to conduct or participate … in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” 18 U.S.C. § 1962(c). The statute contemplates “two distinct entities: (1) a ‘person’; and (2) an ‘enterprise’ that is not simply the same ‘person’ referred to by a different name.” Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 (2001). Plaintiffs proceeding under § 1962(c), therefore, must plead and prove an enterprise that is distinct from the defendant. Thus, a RICO plaintiff cannot sue a corporation and name that same corporation as the RICO enterprise. Relatedly, plaintiffs must show that a defendant “conducted or participated in the conduct of the ‘enterprise’s affairs,’ not just [its] own affairs.” Reves v. Ernst & Young, 507 U.S. 170, 185 (1993).
In the wake of Cedric Kushner and Reves, plaintiffs have creatively pied around these requirements by suing a corporation and naming as a “distinct” enterprise an association in fact consisting of the corporation and other agents with which it contracts.11 Grappling with this issue, the courts of appeals generally have recognized that a defendant corporation’s association with its own employees does not form an enterprise distinct from the corporation *18 itself.12 The circuits, however, have divided over whether a corporation and non-employee agents performing tasks for the corporation form a distinct RICO enterprise.
The Eleventh Circuit in the decision below and the Sixth and Ninth Circuits have concluded that an enterprise can be pled adequately so long as the corporation and the agents in the alleged “enterprise” are “distinct entities,” even if those agents are merely performing services for the corporation. The “distinct entities” test used by the Eleventh Circuit in the instant case, see Pet. App. at 8a, 9a, mirrors the Sixth Circuit’s test in Davis v. Mutual Life Insurance Co., 6 F.3d 367, 377 (6th Cir. 1993).
The Ninth Circuit recently joined the Sixth and Eleventh Circuits in holding that an enterprise can consist of a corporation and non-employee agents working on its behalf. Living Designs, Inc. v. E.I. DuPont De Nemours & Co, 431 F.3d 353 (9th Cir. 2005), cert. denied, 126 S. Ct. 2861 (2006).
By contrast, the Second, Third, and Seventh Circuits have held that because a corporation necessarily acts through agents, an “enterprise” consisting of a defendant corporation and agents acting on its behalf do not constitute an enterprise distinct from the corporation itself. See Baker, 357 F.3d at 691-92; Fitzgerald v. Chrysler Corp., 116 F.3d 225, 228 (7th Cir. 1997) (Posner, C.J.); Discon, Inc. v. NYNEX Corp., 93 F.3d 1055, 1064 (2d Cir. 1996); Brittingham v. Mobil Corp., 943 F.2d 297, 303 (3d Cir. 1991). These courts have reasoned that because a corporation can act only through agents, an “enterprise” of a defendant and entities acting on its behalf “is in reality no more than the defendant itself.” Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339, 344 (2d Cir. 1994); see Fitzgerald, 116 F.3d at 228; Discon, 93 F.3d at 1064; Brittingham, 943 F.2d at 303.
*19 In Fitzgerald the Seventh Circuit found that the defendant Chrysler’s association with its “affiliates and agents” was not a separate enterprise. 116 F.3d at 226 (Posner, C.J.). The Fitzgerald plaintiffs alleged that Chrysler had engaged in a scheme fraudulently to deny warranty protection to consumers, and that it carried out this scheme through an “association-in-fact” enterprise with Chrysler dealerships. See id. The Seventh Circuit held that this supposed enterprise was not distinct from Chrysler itself. See id. at 228. The court recognized the illogic in applying RICO liability to a corporation using outside agents when no liability would attach for the corporation’s use of its own employees in the same way: “we cannot imagine … applying RICO to a freestanding corporation such as Chrysler merely because Chrysler does business through agents, as virtually every manufacturer does.” Id. at 227.
10

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
The Second Circuit has reached similar conclusions. In Riverwoods, the Second Circuit held that “a RICO enterprise that consists merely of a corporate defendant associated with its own employees or agents carrying on the regular affairs of a defendant” is not distinct from the corporate defendant. 30 F.3d at 344. The Second Circuit later followed the same rule in Discon to hold that a corporation and third parties working on its behalf could not form an enterprise. In Discon, the plaintiffs alleged that the enterprise consisted of several entities within a single corporate structure and their “attorneys, accountants and other agents.” 93 F.3d at 1064 (internal quotation marks omitted). The Second Circuit concluded that this enterprise was indistinguishable from the corporation itself; neither a corporation’s “agents” nor its “employees” were distinct from the corporation “so long as those persons act on behalf of the corporation.” Id.13
*20 The Third Circuit has followed suit, holding that an “enterprise” consisting of a defendant corporation and advertising agencies acting on its behalf is not distinct from the corporation itself. See Brittingham, 943 F.2d at 302. In Brittingham the court explained that a corporate defendant is differently situated from an individual defendant accused of manipulating his corporate employer; “when a defendant is itself a collective entity, it is more likely that the alleged enterprise is in reality no different from the association of individuals or entities that constitute the defendant or carry out its actions.” Id. at 302.14
The Eleventh Circuit recognized this conflict as applied to the particular facts of this case, stating that the decision below “puts our circuit in conflict with the Seventh Circuit’s decision in Baker v. IBP, Inc.” Pet. App. at 10a. The Baker case involved allegations that are almost identical to the allegations in the instant case. The Baker plaintiffs alleged an enterprise consisting of “IBP plus the persons and organizations who help it find aliens to hire.” 357 F.3d at 691. The Baker court rejected these allegations as insufficient. The conflict with the holding below could not be more plain. For the same reasons the Court granted review last Term, it should do the same now.
In addition, the Court should grant review here to consider an antecedent misinterpretation of RICO’s enterprise definition that has gained wide acceptance among lower courts, but is clearly wrong: the flawed view that a corporation can be a member of an association-in-fact *21 enterprise.15 RICO’s definition provides that “ ‘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.” 18 U.S.C. § 1961(4) (emphasis added). It is plain - both from ordinary meaning and structure of the statute itself - that the “group of individuals associated in fact” refers only to groups of natural persons, not groups of corporations. See Webster’s Third International Dictionary of the English Language 1152 (1969) (defining “individual” as “a single human being as contrasted with a social group or institution”); 18 U.S.C. § 1961(4) (listing at outset of definition “individual” separately from other entities, including “corporation).16 Indeed, when confronted with this issue last Term, the United States did not defend the Eleventh Circuit’s holding that corporations were “individuals” within the meaning of RICO’s enterprise definition. See Br. of United States as Amicus Curiae at *6, Mohawk Indus., Inc. v. Williams, 2006 WL 680358 (Mar. 16, 2006).
Instead, the focus last Term was on whether the definition of “enterprise” - in light of its introduction by the term *22 “includes” - was comprehensive or instead merely provided a list of examples that could be judicially expanded upon. As this Court has recognized, “the term ‘includes’ may sometimes be taken as synonymous with ‘means,’ ” and thus as introducing a comprehensive list. Helvering v. Morgan’s, Inc., 293 U.S. 121, 125 (1934). The structure of RICO provides powerful evidence that Congress used “includes” to introduce comprehensive definitions.17
A reading of § 1961(4) to mean what it says accords with the “two aims” of RICO: “to make it unlawful for individuals to function as members of organized criminal groups” and “to stop organized crime’s infiltration of legitimate businesses.” S. Alito, Jr., Racketeering Made Simple(r), in The RICO Racket 1, 3-4 (G. McDowell ed., 1989) (emphasis added). Expanding the meaning of “group of individuals” to encompass corporations takes RICO well beyond these purposes. Such an expansion threatens to “RICO-ize, with its treble damages and private plaintiffs and everything, vast amounts of ordinary commercial activity.” Tr. Oral Arg. at 44-45, Mohawk, 126 S. Ct. 2016 (2006) (Breyer, J.) (No. 05-465).
The circuit courts’ rationales for “RICO-izing” groups of corporations are thoroughly unpersuasive. For instance, the Eleventh Circuit has baldly held that “a group of corporations can be a ‘group of individuals associated in fact.’ ” United States v. Navarro-Ordas, 770 F.2d 959, 969 n.19 (11th Cir. 1985). See also United States v. Feldman, 853 F.2d 648, 655-56 (9th Cir. 1988). Others have grafted language onto § 1961 (4) that is plainly not there. See *23 Bunker Ramo Corp. v. United Bus. Forms, Inc., 713 F.2d 1272, 1285 (7th Cir. 1983) (adding to end of enterprise definition “and any combination of
11

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
them”); United States v. Thevis, 665 F.2d 616, 625 (5th Cir. 1980) (approving of “enterprise” consisting of “ ‘a group of individuals associated in fact with various corporations’ ”). Other courts have simply relied on the term “includes” - without any analysis of whether “includes” was used elsewhere in RICO to introduce comprehensive definitions. See, e.g., United States v. Masters, 924 F.2d 1362, 1366 (7th Cir. 1991); Thevis, 665 F.2d at 625; United States v. Perholtz, 842 F.2d 343, 354 (D.C. Cir. 1988); United States v. Huber, 603 F.2d 387, 394 (2d Cir. 1979).
Throughout this litigation, petitioner has contended that the enterprise alleged is legally deficient. Indeed, petitioner specifically asked the Eleventh Circuit to rehear this case en banc to reconsider long-established, but deeply flawed, precedents holding that an association-in-fact enterprise may consist of a group with a corporation as a constituent member. See Pet. App. at 81a-83a (requesting reconsideration of Navarro-Ordas, 770 F.2d at 969 n.19 and United States v. Goldin Indus., Inc., 219 F.3d 1271, 1275 (11th Cir. 2000)).18
The courts of appeals may be unanimous on this point, but they are unanimously wrong and their reasoning does not withstand scrutiny. As a result, numerous civil suits - most of which result in strike suit settlements - are predicated upon a theory that lacks support in the statute. This Court should grant certiorari to correct this misinterpretation of RICO and *24 restore “association-in-fact” enterprises to the scope Congress intended.
III. A CLAIM FOR SUPPRESSED WAGES IS NOT AN INJURY TO “BUSINESS OR PROPERTY” UNDER RICO.
The Eleventh Circuit’s decision also raises a third important issue concerning the meaning of injury to “business or property.” Under RICO, only a “person injured in his business or property by reason of a [RICO] violation” has standing to bring a civil claim. 18 U.S.C. § 1964(c). See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985) (“[T]he plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation.”).
Plaintiffs in this case claim that their allegedly depressed wages constitute an injury to “their property by reason of Mohawk’s violations of 18 U.S.C. § 1962(c).” Pet. App. at 104a (Compl. ¶ 90) (emphasis added). The lower courts have divided four to one over whether an hourly wage injury constitutes an injury to “business or property.” Below, the Eleventh Circuit joined the Second and Ninth Circuits and the Washington Supreme Court in holding that such injuries do give rise to civil RICO standing. See Pet. App. at 12a-13a (allegations of depressed wages constitute injury to business); Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1168 (9th Cir. 2002) (allegations of depressed wages constitute injury to property); Diaz v. Gates, 420 F.3d 897, 898 (9th Cir. 2005) (en banc), cert. denied, 126 S. Ct. 1069 (2006) (finding “lost employment, employment opportunities, and … wages” from false imprisonment an injury to property); Jund v. Town of Hempstead, 941 F.2d 1271, 1286 (2d Cir. 1991) (upholding a damages award for “lost wages” related to demotion); *25 Rice v. Janovich, 742 P.2d 1230, 1237 (Wash. 1987) (“loss of wages was an injury to his ‘business’ ”).19
In contrast, the Seventh Circuit has concluded that hourly wages are not sufficient to confer civil RICO standing. In Evans v. City of Chicago, plaintiff alleged that he had been “damaged in his ‘business or property’ by being falsely imprisoned … because he lost potential income during that period of time.” 434 F.3d 916, 925 (7th Cir. 2006). The Seventh Circuit rejected that view, holding that the plaintiff’s “loss of income as a result of being unable to pursue employment opportunities” was “quintessentially [a] pecuniary loss[] derivative of personal injuries,” which the court found did not fall within the interests protected by the terms “ ‘business or property.’ ” Id. at 926-27. The Seventh Circuit expressly acknowledged that its decision created a circuit split, noting that its decision was “at odds with that of the … Ninth Circuit” en banc decision in Diaz v. Gates. Id. at 930 n.26 (citing Diaz, 420 F.3d 897).
Further, this conflict over whether an injury to wages is sufficient to support RICO standing implicates underlying circuit conflicts over the meaning of the terms “property” and “business” in RICO § 1964(c). The Ninth Circuit has accepted allegations identical to those of plaintiffs in this case as alleging a sufficient injury to “property.” In Mendoza v. Zirkle Fruit Co., the Ninth Circuit also confronted RICO claims of hourly workers seeking to recover depressed wages stemming from allegations of unlawful hiring. The court held that the plaintiffs adequately “allege[d] an injury to their property in the form of lost wages.” 301 F.3d at 1168. The Ninth Circuit rejected defendants’ argument that the plaintiffs *26 were required “to show a ‘property right’ in the lost wages, by showing that they were promised or contracted for higher wages.” Id. at 1168
12

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)
n.4. According to the court, the “case does not implicate procedural due process,” id., an analysis of which typically relies on whether state law recognizes a property interest, see, e.g., Board of Regents v. Roth, 408 U.S. 564, 577 (1972). Instead, the court found - as a matter of federal law - a property right in the form of “a legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes.” Mendoza, 301 F.3d at 1168 n.4. This approach is similar to that adopted by the Eighth Circuit, which has also upheld a property interest without looking to principles of state law and rejecting the defendants’ contention that “whether a particular interest amounts to property … is quintessentially a question of state law.” Bieter Co. v. Blomquist, 987 F.2d 1319, 1329 n.7 (8th Cir. 1993) (citations and internal quotation marks omitted).20
In contrast to the Eighth and Ninth Circuits, the First and Sixth Circuits have held that state law determines the contours of “property” under RICO. The only role for federal law, according to these circuits, is to narrow (not expand) the class of interests otherwise recognized by state law that satisfy civil RICO’s “property” requirement. See Isaak v. Trumbull Sav. & Loan Co., 169 F.3d 390, 397-98 (6th Cir. 1999); *27 DeMauro v. DeMauro, 115 F.3d 94, 96-97 (1st Cir. 1997).21 Thus, in evaluating a plaintiff’s civil RICO claim that her husband fraudulently concealed marital assets during divorce proceedings, the First Circuit examined New Hampshire law to decide what property interest the plaintiff had in the marital assets. DeMauro, 115 F.3d at 96 (deciding how “much of the real property and monies described in the complaint [are] Annette’s property”). Likewise, the Sixth Circuit scrutinized Ohio law in deciding what property interests plaintiffs possessed when they purchased an interest in timeshare resorts. Isaak, 169 F.3d at 397-98 (concluding that Ohio state law gave plaintiffs more than a contract interest including “the right to use, enjoy or dispose of land or chattels”). See also DeMauro, 115 F.3d at 97 (federal law will “decide whether a given interest, recognized by state law, rises to the level of ‘business or property’ ” for purposes of § 1964(c)); Patterson v. Mobil Oil Corp., 335 F.3d 476, 492 n.16 (5th Cir. 2003) (stating that “federal law should determine whether a given property interest, recognized by state law, rises to the level of RICO ‘business or property’ ”).
In this case, the Eleventh Circuit quoted the Ninth Circuit’s holding in Mendoza verbatim, but did not attempt to justify it as a federally-created “property” interest. Instead, the Eleventh Circuit held that plaintiffs’ allegations of depressed wages constituted an injury to their business because they have “ ‘a legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes.’ ” See Pet. App. at 13a (quoting Mendoza, 301 F.3d at 1168 n.4). See also Rice, 742 P.2d at 1236 (rejecting defendants’ claim that “lost wages are not recoverable”).22
*28 This Court should grant certiorari to resolve the issues of whether a wage-related injury constitutes an injury to “business or property” under RICO. In so doing, this Court will have the opportunity to resolve underlying splits over the meaning of each of the two terms - “business” and “property” - that support RICO standing. Plaintiffs’ alleged wage-suppression injuries are plainly not injuries to property under state law (and plaintiffs have cited no case suggesting otherwise). Nor are those injuries to a business as that term is used within RICO. Like the other questions presented in this petition, the Eleventh Circuit’s contrary holding continues to ensure that RICO reaches beyond its admittedly broad scope and, with the promise of treble damages and attorneys’ fees, intrudes upon labor and other business disputes that are already the province of other extensive areas of substantive law and regulation.

CONCLUSION For the foregoing reasons, the petition for a writ of certiorari should be granted.

Footnotes

*

Counsel of Record

1

While the allegations in the Complaint must be taken as true at this stage, Fed. R. Civ. Proc. 12(b)(6), Mohawk vigorously denies

any illegal conduct.

2

The Complaint set forth five alleged RICO predicate acts: (1) knowingly hiring more than 10 illegal aliens during a 12-month

period, in violation of 8 U.S.C. § 1324(a)(3)(A); (2) harboring illegal aliens, in violation of 8 U.S.C. § 1324(a)(1)(A)(iii); (3)

encouraging illegal aliens to enter the United States, in violation of 8 U.S.C. § 1324(a)(1)(A)(iv); (4) accepting false identification

documents, in violation of 18 U.S.C. § 1546(a); and (5) using false identification documents, in violation of 18 U.S.C. § 1546(b).

13

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)

See Pet. App. at 97a-99a. See also 18 U.S.C. § 1961(1)(B), (F) (providing that violations of 8 U.S.C. § 1324 and 18 U.S.C. § 1546 constitute “racketeering activity” for RICO purposes).

3

Georgia courts have followed federal RICO caselaw when interpreting the scope of proximate cause for the Georgia RICO statute.

See Maddox v. Southern Eng’g Co., 500 S.E.2d 591, 594 (Ga. Ct. App. 1998).

4

The district court partially granted Mohawk’s motion to dismiss the unjust enrichment claim, dismissing plaintiffs’ claim for unjust

enrichment based on Mohawk’s supposed benefit from workers’ compensation savings. Pet. App. at 69a.

5

The Eleventh Circuit reversed the district court’s judgment on the unjust enrichment claims in part, holding that plaintiffs’ unjust

enrichment claim should have been dismissed in its entirety because plaintiffs contracted for the wages they received. Williams I,

411 F.3d at 1266.

6

The briefing limitation was prompted by plaintiffs’ request that the Eleventh Circuit preclude supplemental briefing on “the

enterprise issues that Mohawk unsuccessfully argued to the Supreme Court.” Appellees’ Resp. to Mohawk Indus., Inc.’s Mot. for

Leave to File Supplemental Briefing at 4, Williams v. Mohawk Indus., Inc., No. 04-13740-AA (11th Cir. filed Jul. 7, 2006).

Mohawk opposed the limitation, noting that the court may wish to reconsider en banc circuit precedent holding that a corporation

may be a member of an association-in-fact enterprise.

7

In Baker, the plaintiffs alleged that the defendant corporation was violating immigration laws by employing illegal aliens - and,

like plaintiffs here - claimed that the RICO enterprise consisted of the defendant corporation and third parties that assisted in

recruiting employees.

8

Ideal’s complaint extensively detailed each step of the causal chain between National’s tax fraud and Ideal’s claimed losses. Ideal

pied that it and National were sole competitors and that they “compete primarily on the basis of price.” Anza Compl. ¶¶ 19-22.

National’s tax fraud enabled it to cut the effective price of its products by 8.25%, and this illegal discount gave National a

“competitively significant price advantage over Ideal.” Id. ¶¶ 32-34. This price advantage caused a “steep drop in taxable cash

sales” at Ideal’s facilities, which “can only be explained by National’s unlawful price advantage.” Id. ¶¶ 35-36.

9

The Eleventh Circuit found support for this correlation in DeCanas v. Bica, 424 U.S. 351 (1976). Pet. App. at 17a-18a. But

DeCanas had nothing to do with RICO or its direct injury requirement - instead it dealt only with state police power to regulate the

employment of illegal aliens. 424 U.S. at 356-57. The notion that there is a relationship between illegal hiring and lower wages that

is sufficient to justify a State’s enactment of laws of general applicability does not remotely support the notion that there is a

sufficiently direct injury to one set of employees resulting from a single employer’s hiring decisions with respect to employees.

10

In addition, the Eleventh Circuit misread Anza to hold that dismissal is inappropriate where “[t]here is no more direct injured party

who could bring suit.” Pet. App. at 19a. This reflects a fundamental misunderstanding of Anza. The issue is not whether there is

another (or “more direct”) victim. Instead, the issue is whether the RICO violation immediately causes the injury or whether

instead the direct cause of injury is distinct from the alleged violation. Anza, 126 S. Ct. at 1997.

11

The Cedric Kushner Court took note of this type of an enterprise, stating that a purported “enterprise” comprised of a corporation

and its employees and agents would be an “oddly constructed entity” and noting it would present “quite different circumstances”

than the enterprise in Cedric Kushner. 533 U.S. at 164. Cedric Kushner itself involved an individual who was president and sole

shareholder of a closely held corporation and who was accused of conducting the affairs of that corporation (the alleged RICO

“enterprise”) through a pattern of racketeering. See id. at 160. This Court held that the defendant, as an individual, was distinct

from the corporation he controlled. See id. at 163. Indeed, Cedric Kushner presented a classic RICO fact pattern - an individual

defendant using an organization (the RICO enterprise) for criminal purposes.

12

See, e.g., Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339, 344 (2d Cir. 1994); Old Time Enters., Inc. v.

International Coffee Corp., 862 F.2d 1213, 1217 (5th Cir. 1989).

13

This Court’s decision in NYNEX Corp. v. Discon, Inc., 525 U.S. 128 (1998), reversed the Second Circuit’s decision only as to the

plaintiffs’ Sherman Act claims; this Court did not review the Second Circuit’s decision on the RICO claims. Id. at 133.

14

The Third Circuit later overruled a different portion of Brittingham, which addressed application of § 1962(c) to “officers and

employees acting through a corporate enterprise,” see Jaguar Cars, Inc. v. Royal Oak Motor Car Co., 46 F.3d 258, 266, 268-69 (3d

Cir. 1995). Jaguar Cars did not alter Brittingham’s holding that a defendant corporation and its third-party agents could not

constitute a RICO enterprise. See id. at 268.

15

The reasons why this view is flawed, though summarized below, are set forth more fully in the merits briefs in this case from last

Term. See Pet. Br. at *12-26, Mohawk Indus., Inc. v. Williams, 126 S. Ct. 2016, 2006 WL 282167 (2006) (No. 05-465); Pet. Reply

14

Mohawk Industries, Inc. v. Williams, 2006 WL 3846526 (2006)

at *1-8, Mohawk, 2006 WL 951123.

16

At oral argument in this case last Term, Chief Justice Roberts commented that “it does seem kind of strange to encompass

[corporations] under the term individuals when the same statute uses individuals and corporations separately.” Tr. Oral Arg. at 29,

Mohawk Indus., Inc. v. Williams, 126 S. Ct. 2016 (2006) (No. 05-465). See also id. at 32 (Kennedy, J.) (“A person is defined - in

sub (3) just above it. A person includes any individual or entity. Then the next thing [§ 1961(4)] says individual. So it’s not a - it

doesn’t sound like a corporation.”); id. at 51 (Souter, J.) (noting the “peculiarity of the definition” of enterprise, which lists “A, B,

C, and D, and then it repeats one, but only one, of the items on the list and says groups of these items, i.e., individuals, are

included”).

17

Justice Alito commented on this point at oral argument, asking:

“Why shouldn’t includes here be read to mean means when that seems to be the way it’s used in other subsections of this provision

and when the only thing that seems to be … omitted from the list is what’s involved here, which is a group consisting of a

corporation or … other legal entity … and natural persons.” Tr. Oral Arg. at 42, Mohawk, 126 S. Ct. 2016 (No. 05-465).

18

That Mohawk is appealing pursuant to 28 U.S.C. § 1292(b) is of no moment. The district court specifically granted Mohawk

permission to file an interlocutory appeal concerning whether “Plaintiffs had adequately alleged the existence of a RICO

enterprise.” Pet. App. at 70a. See also Yamaha Motor Corp. v. Calhoun, 516 U.S. 199, 205 (1996) (“the appellate court may

address any issue fairly included within the certified order because ‘it is the order that is appealable, and not the controlling

question identified by the district court’ ” (quoting 9 J. Moore & B. Ward, Moore’s Federal Practice ¶ 110.25[1], at 300 (2d ed.

1995))).

19

The First Circuit has also suggested without holding that wagerelated injuries suffice to establish civil RICO standing. See Libertad

v. Welch, 53 F.3d 428, 437 n.4 (1st Cir. 1995) (“Plaintiffs … could have standing to sue under RICO, if they were to submit

sufficient evidence of injury to business or property such as lost wages”).

20

Ultimately, the Eighth Circuit found an injury to property in the form of a loss of “what likely would have been the most valuable

use of [plaintiff’s] property.” 987 F.2d at 1329. The court recognized that “the existence of a property interest” is typically

controlled by state law in “takings or due process cases,” id. at 1329 n.7, but held that plaintiff had “not suffered a taking” and

rejected a theory that the plaintiff “would have to first … acquir[e] a cognizable property right” under state law before bringing a

civil RICO suit. Id. at 1329 n.9.

21

The Fifth Circuit has also endorsed this approach. See Patterson v. Mobil Oil Corp., 335 F.3d 476, 492 n.16 (5th Cir. 2003)

(relying upon, e.g., Price v. Pinnacle Brands, Inc., 138 F.3d 602, 607 (5th Cir. 1998)).

22

The Second Circuit has also noted that it concurs with the holdings of the Eleventh Circuit and Washington Supreme Court, noting

that “[e]ven were no property rights at play, we could not agree that loss of employment does not injure one’s ‘business.’ ” Hecht

v. Commerce Clearing House, Inc., 897 F.2d 21, 24 n.2 (2d Cir. 1990).

15

 
 No. 06-873
Sn
SuprrmCr ourtof thr

MOHAWKINDUSTRIES,
V.

INC., Petitioner,

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES, and LORASISSON, Individually and on behalf of a class,
Respondents.

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

HOWARDFOSTER JOHNSON& BELL, LTD. 33 West Monroe Street Suite 2700 Chicago, Illinois 60603 (312) 372-0770
BOBBYLEE COOK COOK & CONNELLY 9899 Commerce Street P.O. Box 370 Summerville, Georgia 30747 (706) 857-3421

JOHN E. FLOYD* JOSHUAF. THORPE RONANP. DOHERTY NICOLEG. IANNARONE BONDURANTM, IXSON
& ELMORE,LLP 3900 One Atlantic Station 1201 W. Peachtree Street, N.W. Atlanta, Georgia 30309 (404) 881-4100
Counsel for Respondents

MATTHEWTHAMES GODDARDT, HAMES,
HAMMONTRE8E~ BOLDING 2716 Cleveland Highway
P.O. Box 399 Dalton, Georgia 30722-0399 (706) 278-0464

January 22, 2007

*Counsel of Record

COCKLE LAWBRIEF PRINTING CO. (800) 225-6964 OR CALL COLLECT(402) 342-2831

BLANK PAGE

TABLE OF CONTENTS

Page

TABLOEFCONTEN...T..S...........................................

i

TABLOEFAUTHORIT..I.E...S.....................................

ii

INTRODUC...T..I..O...N................................................

1

REASONSFOR DENYINGTHE PETITION ...............

1

I. The Court Need Not Grant Certiorari To

Review Last Term’s Decision in Anza v. Ideal

Steel SupplyCorporatio.n..................................

2

A. The Eleventh Circuit Faithfully and Cor-

rectly AppliedAnza.....................................

3

B. There Is NoCircuit Split Over Anza ...........

7

II. The Court Has Already Concluded It Would Be a Mistake to Review the Enterprise Questions

Presentedin MohawkP’setition ........................

9

A. The Circuit Courts Have Unanimously

Confirmed That Corporations Can Be

Members of Association-in-Fact

Enter-

prises............................................................

12

B, Cedric Kushner Resolved Any Division of

Authority Over Whether a Corporation

and its Legally Distinct Agents Can Form

a RICOEnterprise.......................................

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

InterlocutoryOrder............................................

20

CONCLU..S..I..O..N.......................................................

22

ii

TABLE OF AUTHORITIES Page

CASES

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

(1995..).............................................................................

7

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

148U.S.372(1893.)......................................................

21

Am. Nat’l Bank & Trust Co. v. Haroco, Inc., 473 U.S.606(1985.)..............................................................
Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006.).....................................................................

11 passim

Associated General Contractors v. California State

Councilof Carpenters,459 U.S. 519 (1983)....................

6

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

986(8thCir. 1989.)....................................................

13, 14

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

Boardof Regents v. Roth, 408 U.S. 564 (1972)... .............. 19

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

923(7thCir. 2003.)........................................................

16

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

158(2001.)....................................................

13,14, 15,

Copperweld Corp. v. Independence Tube Corp., 467

U.S.752(1984.)........................................................

15, 16

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

DeCanavs. Bica, 424U.S. 351(1976)............................

5, 6

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

iii

TABLE OF AUTHORITIES - Continued

Page

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

507(1950.).....................................................................

21

Doev. Roe, 958F.2d 763(7th Cir. 1992)...........................

18

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

Cir.2005.)......................................................................

17

Estelle v. Gamble4,29U.S. 97(1976)...............................

21

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

2006.)..................................................................

17,18,19

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

1998.).............................................................................

15

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

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

9

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

2007..).............................................................................

11

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

U.S.251(1916.).............................................................

21

Hoffman Plastic Compounds, Inc. v. NLRB, 535

U.S.137(2002.)...............................................................

6

Holmevs. SIPC,503U.S. 258(1992).................................

6

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

F.3d396(7thCir. 2006)...................................................

8

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

Co., 431F.3d353(9th Cir. 2005)..............................

16, 17

McCrayv. NewYork Fruit Co., 461 U.S. 961 (1983) .......... 9

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

2002..)..............................................................................

7

iv

TABLE OF AUTHORITIES - Continued Page

MohawkIndustries, Inc. v. Williams, 126 S. Ct.

2016(2006.)..............................................................

1, 2, 9

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

(Jan.10,2007.)...............................................................

11

NOWv. Scheidler, 510U.S. 249(1994).............................

11

Reiter v. SonotoneCorp., 442 U.S. 330 (1979) ..................

18

Riverwoods Chappaqua Corp. v. Marine Midland Bank,N~A.,30 F.3d 339 (2d Cir. 1994)....................
Rossv. Moffitt, 417U.S.600(1974).................................... Sure-Tan,Inc. v. NLRB4, 67 U.S. 883(1984) .....................

15, 16 4 6

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

Cir.2005.)........................................................................

7

Trollinger v. Tyson Foods, Inc., No. 4:02-CV-23, 2006WL2868980(E.D. Tenn. Sept. 29, 2006) ........... 7, 8

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

1993..)............................................................................

13

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

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

1988..)............................................................................

15

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

Cir.2000..).....................................................................

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 (lst Cir. 1995..)...................... ................................................. 12, 15

United States v. Masters, 924 F.2d 1362 (7th Cir.

1991..)............................................................................

12

v

TABLE OF AUTHORITIES - Continued
United States v. Perholtz, 842 F.2d 343 (D.C. Cir. 1998.).............................................................................
United States v. Thevis, 665 F.2d 616 (5th Cir. 1982..)............................................................................

Page 13 13

STATUTES AND REGULATIONS

18U.S.C§. 1961(4.)...................................................... 18U.S.C§. 1962(c.)................................................ 18U.S.C§. 1964(c.)....................................................

9, 12 11, 13, 14
passim

20C.F.R§. 656.24(b)(3..).....................................................

5

RULES

Fed.R.Civ.Proc.15(a)......................................................

21

SupC. t.Rule10..................................................................

1

TREATISES

Robert L. Stern & Eugene Grossman, Supreme CourtPractice§ 4.17 at 256(8th ed. 2002).....................
David B. Smith & Terrance G. Reed, Civil RICO, 10.0411(2]006.)..........................................................

4 5, 18

SCHOLARLY AUTHORITIES

John Paul Stevens, Some Thoughts on Judicial

Restraint, 66 Judicature177(1982)...............................

9

INTRODUCTION
This is MohawkIndustries, 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.
REASONS FOR DENYING THE PETITION
The Petition argues that the Eleventh Circuit’s decision in Williams v. MohawkIndustries, Inc., 465 F.3d 1277 (llth Cir. 2006) ("Williams II") 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’sprior Petition, in Case No. 05-465, raised virtually all of the substantive issues that Mohawk now presses in this second Petition. Although Mohawkframes 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 Mohawkraised in its initial Petition. 1 Similarly, 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.2 And although Mohawkhas 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 Petition. ~ 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 Review 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
1 ComparPeetition for a Writof Certiorari at 18-23(No. 05-465) (hereinafter"2005Pet.") (plaintifffs failed to pleada direct andproximateinjury to businessor property)withPetition for a Writof Certiorari at 10-16 (No. 06-873)(hereinafter "Petition" or "Pet.") (same argumentunder Anza).
Compar2e005Pet. at 10-18(seekingcertiorari to reviewwhether corporationsand their agents mayforman association in fact enterprise) andBr. of Pet, at 12-26, MohawIkndus., Inc. v. Williams, 126 S. Ct. 2016,2006WL282167(2006)(No. 05-465)(arguingthat corporations cannotbe memberosf association-in-factenterprises) withPet. at 16-24(reciting the sametwoarguments).
s Compar2e005Petition at 19-21(arguing that wagedepression cannotqualify as an injury to businessor property)with Pet. at 24-28 (same argument).

correct the alleged misapplication of a properly stated rule of law, Mohawkcontends that Williams H 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, Mohawkis wrong on both counts.
A. The Eleventh Circuit Faithfully and Correctly Applied Anza.
The Petition contends the Eleventh Circuit thumbed its nose at this Court’s direction to further consider Williams v. MohawkIndustries, Inc., 411 F.3d 1252 (11th Cir. 2005) ("Williams I’) in light of AnzaJ Even though WilZiams II cites Anza more than ten times, 5 Mohawkcontends the court of appeals "ignored" Anza’s central holding "that RICOcivil plaintiffs must plead an injury directly caused by the RICOpredicate acts and not by another ’set of actions ... entirely distinct from the alleged RICO violation. ’’8 Mohawkfurther claims that the Eleventh Circuit ignored Anza’s holding that the "central question" in evaluating a RICOplaintiff’s allegations of injury is %vhether the alleged RICOviolation led directly to the plaintiff’s injuries. ’7 But Williams H 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
4 See, e.g., Pet. at 16(EleventhCircuit"fail [ed] to heedAnzain the wakeof this Court’sexplicit instructionto doso").
5 See WilliamsH, Pet. App.at 14a-21a.
Pet. at 3. 7 Id. at 12.

4
injurious conduct in order to show proximate cause. ’~ The court of appeals then went on to examine the list of additional "motivating principle[s]" precisely as Anza instructs.9
As the losing party below, Mohawkobviously takes great issue with the Eleventh Circuit’s conclusion in this case. But given the court of appeals’ extensive and accurate quotation of Anza, there can be no genuine controversy over whether Williams H properly states the rule of law announced in Anza. Accordingly, even if Mohawkwere 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. "1° 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. Andin 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
8 W~lliamHs , Pet. App.at 14a-15a. 9 Id. at 15a-16a.Mohawks’usggestionthat WilliamsHdefies Anza by referring to the Respondents’allegation that Mohawikntended to injure themrefers to the EleventhCircuiFsstandinganalysis, not its proximatecauseanalysis underAnza.See Pet. at 14. ~0 Robert L. Stern &EugeneGrossman,SupremeCourt Practice § 4.17at 256(8th ed. 2002).

authority did not cause a third party any injury cognizable under RICO1. 1 As the Court observed, the State - not the defendant’s competitor - was the direct victim of this misconduct. 12 As a result, the Anza Court held the plaintiff could not recover damages for lost sales due to the defendant’s decision to lower the prices it charged its customers. 13
As Williams H explains, the claims here are very different because the plaintiffs do not seek to recover damages for fraud (or any other misconduct) directed other parties." Rather, the plaintiffs allege they are the direct victims of Mohawk’sillegal hiring and other racketeering activity, which directly and unlawfully expands the pool of labor available to Mohawkand depresses the wages Mohawkpays all its employees. 15 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. 16 Andthis Court’s precedents repeatedly
1~ See Anza, 126 S. Ct. at 1997.
~Id.
13 Id.
Williams H, Pet. App. at 16a-21a. See, e.g., Compl. ~ 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) ("Illegal 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 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 w17orkers.
To better fit Anza’s mold, the Petition mischaracterizes the Complaint to allege an injury passed on from one category of employees to another, is This distortion - which must be rejected on a motion to dismiss - actually underscores 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 purposes. ~9 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 weakbargaining position cause [undocumented workers] to depress U.S. wages and working conditions"). Indeed, it is for this reason that the Departmentof Labor mustcertify 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)(3).
1~ See DeCanavs. Bica, 424 U.S. 351, 356-57(1976) (~acceptance illegal aliens of jobs on substandard terms as to wages and working conditions can seriously depress wagescales and workingconditions of citizens and legally admitted aliens"); Sure-Tan,Inc. v. NLRB,467U.S. 883, 893 (1984); Hoffrnan Plastic Compounds,Inc. v. NLRB,535 U.S. 137, 147 (2002).
~8 See Pet. at 12-13 (arguing that the plaintiffs’ injuries are
derivative of conduct that Mohawdkirects 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 RICOviolation can be expected to vindicate their laws by pursuing their ownclaims."); Holmes,503U.S. at 273. See also Associated GeneralContractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 541 (1983) (identifying alternative plaintiffs with more direct claims). ComparePet. at 15 n.10 (arguing that the lack of any direct victim is irrelevant under Anza).

7
context of similar illegal hiring allegations reached the v2e°ry same conclusion.
Although Mohawkargues that Williams H defies this Court’s June 5, 2006 GVRorder, the Court did not direct the Eleventh Circuit to dismiss the Complaint. The Court has explained that a GVRis appropriate when it is "not certain that the case [is] free from all obstacles to reversal on [the] intervening precedent. "21 Such an order merely indicates that the Court believes the intervening precedent is "sufficiently analogous and, perhaps, decisive to compel reexamination of the case. "22 As a result, the Court’s GVRis 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 II 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 both concluded that allegations of hiring large numbers of undocumented workers are not "entirely
so See Trollinger v. TysonFoods,Inc., No. 4:02-CV-23,2006WL 2868980(E.D. TennSept. 29, 2006)(declining to certify an interlocutory appeal after denyingthe defendants’ motionfor judgmenton the pleadingsbasedon Anza). AccordTrollinger v. TysonFoods,Inc., 370 F.3d 602, 619 (6th Cir. 2004) (pre-Anza case upholding the same allegations of proximatecause); Mendozva. Zirkle Fruit Co., 301F.3d 1163,1172(9th Cir. 2002)(same).
21 AdarandConstructors,Inc. v. Pena,515U.S. 200,222-23(1995). 22 UnitedStates v. Vanorden,414 F.3d 1321, 1327n.4 (llth Cir. 2005)(citing Henryv. City of RockHill, 376U.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 H 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 RICOdamages for lost profits on bids it allegedly failed to win as a result of a bid-rigging scheme that targeted a third party, the Wisconsin Department of Transportation. ~4 That scheme directly injured the Department, 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, Mohawkhas merely identified two different sets of facts for which Anza compels two different results. Even ff Mohawk(incorrectly) 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 i~s6sue that typically concerns this Court.
23 See W~lliams H, Pet. App. at 14a-21a; Trollinger v. Tyson Foods, Inc., No. 4:02-CV-23, 2006 WL2868980, 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. ~Id. ~ See, e.g., United States v. Johnston, 268 U.S. 220, 227 (1925) (’Wee 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 Mohawkfull briefing and oral argument on all the enterprise issues collected under the second Question Presented in Mohawk’s Petition. But rather than reach the merits of those questions, the Court dismissed the writ as improvidently granted/7 That ruling came after the Court discovered Mohawkhad 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.

Mohawkfirst 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, Mohawkagrees that a

corporation can be both a RICO person and part of

facts."); McCrayv. NewYork, 461 U.S. 961, 963 (1983) (denying certiorari because the question required further study in the lower courts); Gilliard v. Mississippi, 464U.S. 867, 869(1983)(indicating that certiorari wasdenied because a majority believed SupremeCourt reviewshouldbe deferred until "morestate supremecourts and federal
circuits have experimented"with the problem)(Marshall, J., dissenting). See also John Paul Stevens, SomeThoughtson Judicial Restraint, 66 Judicature 177, 183 (1982) ("The doctrine of judicial restraint teaches us that patience in the judicial resolution of conflicts may sometimepsroducethe mostdesirable result.").
27 Mohawk1,26 S Ct. at 2016.

10

an association-in-fact

enterprise[.] "28 And Mohawk

subsequently informed the Eleventh Circuit that its

arguments were perfectly consistent with RICOliability for corporations that participated in the affairs of an

association-in-fact enterprise:

Indeed, nothing in Mohawk’s rule would affect the RICOliability of a corporation that
truly participates in some larger association of corporations or (non-agent) individuals by engaging in racketeering activities on the ent2esrprise’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 argument. 3° In response, Mohawk’scounsel conceded Mohawk’s

failure to preserve the issue and urged the Court to overlook that defect in its appeal. 31 But after devoting

substantial time to hearing the case, the Court declined to

reach the merits of Mohawk’senterprise arguments in this

case.

28 See MohawDkist. Ct. ReplyBr. at 5 (emphasisadded)[Dist. Ct.
Dkt.No.43]. 2~ Mohawkl’lsth Cir. ReplyBrief at 11 n.8 (filed Nov.5, 2004)
(emphasisadded).See also Mohawkl’lsth Cir. Br. at 12-13(filed Sept. 7, 2004)("This [plaintiff’s theory] wouldbe a substantial departure from current law, whichrequires that to sufficiently allege a RICOenterprise, a plaintiff must allege that the enterprise is comprised of a corporation and a separate, independent third party.") (emphasisadded).
SeeTr. OralArg.at 5-10(No.05-465()Apr.26, 2006). 8~ Id. at 10 (suggesting that Mohawwkaivedthe argumentbecause
"currentlawin the EleventhCircuitlaw"renderedit "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, a~ And this Court still does not consider as3rguments 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 t3h4e 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
B2 Mohawk’sattempt to resurrect its enterprise arguments by seeking an en banc review of the Eleventh Circuit precedents that led Mohawtko concede a corporation can be a memberof an association-infact enterprise, see Pet. App. at 81a-83a, is too little too late. Neither Mohawk’sen 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 advocatedfor two years in the district court and the court of appeals.
See, e.g., NOWv. Scheidler, 510U.S. 249, 262(1994) (refusing consider a constitutional challenge to RICOthat the defendant failed to raise below); Am. Nat’l Bank& Trust Co. v. Haroco,Inc., 473 U.S. 606, 608 (1985) (refusing to consider unpreserved argument that complaintfailed to allege a violation of 18 U.S.C. § 1962(c)).
Gonzales v. Duenas-Alvarez, 127 S. Ct. ,2007 WL98723, at *8 (Jan. 17, 2007)(’~Regardless, the lower court did not consider the claims and we decline to reach themin the first instance") (collecting authorities); Norfolk Southern Ry. Co. v. Sorrells, 127 S. Ct. , 2007 WL 57176(Jan. 10, 2007) (rejecting a petitioner’s attempt to "smuggle" 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 ff it did.
A. The Circuit Courts Have Unanimously Confirmed That Corporations Can Be Members of Association-in-Fact Enterprises.
On the merits, Mohawk urges the Court to grant certiorari and hold that corporations cannot be membersof association-in-fact enterprises as a matter of law. 35 At oral argument last Term and again in the Petition, Mohawk concedes that the circuit courts have unanimously rejected this argument.38 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. "37 And although Mohawkclaims that all the
~5SeePet. at 20-24.
See Tr. Oral Arg. at 5-6 (No. 05-465)(Apr. 26, 2006)(Justice Scahaobservingthat 10 federal circuits have concludedcorporations can be memberosf association-in-fact enterprises and that the Court wouldhave been unlikely to grant certiorari to reviewthat question standing alone); Id. (Mohawk’csounselacknowledgintghe lack of any split of authority and the unlikelihoodof SupremCe ourtreview). Pet. at 20-22 (acknowledgingthat the federal courts have universally rejected Mohawka’sntecedententerprise argument).
UnitedStates v. Huber6, 03F.2d 387,394(2d Cir. 1979).See also UnitedStates v. Masters,924F.2d 1362, 1366(7th Cir. 1991); United States v. London6, 6F.3d1227,1243-44(lst Cir. 1995)(citing extensive authority); UnitedStates v. Console,13F.3d 641, 652(3d Cir. 1993);
(Continuedon followingpage)

13
circuit courts have made a grave error that perniciously e’~x8tends 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 government’s ability to enforce the statute’s substantive provisions and to obtain effective remedies. "39 The Court should not grant certiorari to reconsider a statutory construction that has been well-settled for decades only to make nonsense of the statute and render RICOuseless to government 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, Mohawkurges the Court to resolve a "deep[ening]" and "wid[ening]" circuit split over whether a corporation and its legally distinct, non-employee agents can form an association-in-fact enterprise. 4° 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
UnitedStates v. Blinder, 10F.3d 1468,1473(9th Cir. 1993);Atlas Pile DrivingCo. v. DiConFin. Co., 886F.2d 986, 995n.7 (Sth Cir. 1989); UnitedStates v. Perholtz, 842F.2d 343, 352-53(D.C.Cir. 1988);United States v. Thevis,665F.2d616,625(5th Cir. 1988).
s8 Pet. at 22. ~9Br. for the UnitedStates as AmicuCs uriaeat 16(05-465). 4oPet. at 16-18.

14
distinctness between the defendant and the RICOenterprise. In Cedric Kushner, the complaint named a corporation as the enterprise and the corporation’s president as the defendant. Because the defendant was also the corporation’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 responsibilities due to its different legal status. And we van find nothing in the statute that requires m4~ore "separateness" than that.
Even though the owner/employee was clearly a corporate agent, alleged to be acting in furtherance of the corporation’s interests, this Court held that the defendant and his corporation were separate enough to satisfy § 1962(c)’s i4m2plied distinctness requirement.
4~CedricKushner5, 33U.S. at 163(emphasisadded).
~ In Cedric Kushner,the corporation wasthe enterprise, not a membeorf a larger association in fact. But including the RICOperson in a broaderassociation in fact enterprise is entirely consistent with Kushnefsdistinctness analysis because"[a] collective entity is something morethan the membersof whichit is comprised."Atlas Pile Driving,886F.2d at 995(concludingthat a corporationcan be the RICO defendantas well as a membeorf a larger association in fact enterprise). See also UnitedStates v. GoldinIndus., 219F.3d 1271, 1276 (llth Cir. 2000) ("To find that a defendant cannot part of the enterprise would underminethe purposes of the RICOstatute");
(Continuedon followingpage)

........................

I

15
Mohawk argues that there is a split between the circuits that have (1) adopted a "distinct entities" test accordance with Cedric Kushner and (2) rejected 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. ’~3 With only two exceptions, the cases Mohawkcites to support the second half of this purported split pre-date Cedric Kushner. And without exception, those rulings rely on theories the Cedric Kushner C~ ourt 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. 45 The Court similarly held that Copperweld Corp, v. Independence Tube Corp., 467 U.S. 752 (1984), Sherman Act case holding that a corporation cannot conspire with a wholly-owned subsidiary, has no application to RICO4. 6 Accordingly, while the Court’s opinion noted and distinguished many of the cases that Mohawk now
London,66 F.3d at 1243;UnitedStates v. Feldman,853 F.2d 648, 658 (9th Cir. 1988);Cullenv. Margiotta,811F.2d698,729-30(2d Cir, 1987).
SeePet. at 18. 44SeeResp.Br. at 44-50(05-465). 45 CompareKushner,533 U.S. at 166-67with RiverwoodsChappaqua Corp. v. MarineMidlandBank, N.A., 30 F.3d 339, 344 (2d Cir. 1994)("Becausea corporation can only function throughits employees and agents, any act of the corporationcan be viewedas an act of such an enterprise."). "~ ComparCe edricKushner,533U.S. at 166(Copperweld"doctrine turns onspecific antitrust objectives")withFitzgeraldv. ChryslerCorp., 116F.3d225, 228(7th Cir. 1998)(citing Copperwefldor propositionthat Chrysler and its wholly-ownedistributors could not be held liable under RICO).

16
recites in its petition, Cedric Kushner’s analysis dismant4l7es 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 RICOcase. Because both Bucklew and Baker fail to acknowledge Cedric Kushner and instead apply Copperweld despite Cedric Kushner’s c4o8ntrary 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 Mohawkcontends 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. 49 But Mohawkcited
" Whilethe UnitedStates tookno positionon this particular point, the governmentdid oppose Mohawkon the merits and argued that Mohawk’rseference to the Riverwoodsline of cases wasa "nonsequitur" in this case. SeeU.S.AmicuBs r. at 27-30(No.05-465).
See Bucklew,329F.3d at 934(citing Copperwelfdor the proposition that "Aparent and its wholly ownedsubsidiaries no morehave sufficient distinctnessto trigger RICOhability thanto trigger liability for conspiringin violation of the ShermaAn ct");Baker,357F.3d at 691 (citingBucklew).
SeePet. at 18.

17
Living Designs, t5o° 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. 51 Accordingly, there has been no material change in the circuit courts with respect to the enterprise question the Court dismissed in June 2006. And Mohawkcan offer the Court no reason to reinstate certiorari to take up the very same question it declined to reach - in either this case or Living Designs - last Term.
III. The Petition’s "Business or Property" Questions Are Not Presented in this Case.
In its third Question Presented, Mohawkurges 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 RICOsuits to recover lost wages, but claims the Seventh Circuit created a circuit split on this question with its decision in Evans v. City of Chicago, 434 F.3d 916, 925 (7th Cir. 2006). 55 What the
~oSeeBr. of Pet. at 31, 35(Feb.2, 2005)(No.05-465). 51 See E.L Dupontde Nemours&Co. v. Living Designs, Inc., 126 S. Ct. 2861(June12, 2006). ~2SeePet. at 24-25.

18
Petition does not confess, is that Evans expressly distinguishes 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.53 The same limitation applies to private antitrust suits seeking damages for injuries to "business or property" under Section 4 of the Clayton Act, on which 18 U.S.C. § 1964(c) is modeled. 54 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 .55
~ Evans, 434 F.3d at 926 (collecting cases); Doev. Roe, 958 F.2d 763, 767(7th Cir. 1992)(’2~ot surprisingly, all other courts construing this language have likewise concluded that a civil RICOaction cannot be premised solely upon personal or emotional injuries") (collecting authorities) see also, DavidB. Smith and Torrance G. Reed, Civil RICO, 10.0411] (CompensableInjuries) (2006) ("One proposition about 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 section 4~) (internal quotations omitted).
See Reiter v. SonotoneCorp., 442U.S. 330, 339-40(1979). 55 To be sure, Evansnoted a disagreement with Diaz vo Gates, 470
F.3d 897(9th Cir. 2005)(en banc), cert. denied, 126S. Ct. 1069(2006), but that concerned (1) whether incomelost to false imprisonmentwas 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. "58 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. MohawkIndustries, Inc., 411 F.3d 1252, 1260 (llth Cir. 2005)Y
Given the Evans court’s apparent agreement with the Eleventh Circuit’s analysis in Williams I, which is repeated verbatim in Williams H, there is no circuit split for the Court to resolve here.
Mohawkalso 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. ~8 But whatever the merits or consequences of
here because the Respondentsdo not allege false imprisonmentor personalinjury.
66Evans,434F.3dat 928.
57 /d.
6aEven in the takings jurisprudence that Mohawkimproperly seeks to import here, this Court has held that "property" under the Fourteenth Amendmecnatn be defined by any source, including state law. See Boardof Regentsvo Roth,408U.S.564, 577(1972).

2O
this debate, it was neither considered nor resolved in Williams H. 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 a5lsleged RICOviolations.
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 Interlocutory 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. 6° Ultimately, the question of whether Mohawk’s
59 Pet. App.at 12a. ThePetition misrepresentsthe Complaintby suggestingthe Respondentaslleged only an injury to property. SeePet. at 24. In fact, the Complaintalleges the Respondentsand the class havesufferedan injury to bothbusinessand property.Pet. App.at 103a (Comp~l.I 86).
60 See WilliamsII, Pet. App.at 9a ("Whateverdifficulties the plaintiffs mayhavein provingsuchan allegation, theyhavesufficiently alleged that Mohawiks engagedin the operation or managemenotf the enterprise."); id. at 21a("Althougthhe plaintiffs’ evidencein this case may not ultimately prove the proximate-cause requirement, we
(Continuedon followingpage)

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, w"6h1enjustice so requires.

which "should be freely given

For these and other similar reasons, this Court traditionally has preferred to grant the writ to review final rather than interlocutory orders. °2 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. "Ss 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. "64 Allowing this case to proceed to

concludethat the plaintiffs’ complaintstates a sufficiently direct relation betweentheir alleged injury and Mohawk’aslleged unlawful predicate acts to withstandMohawkm’sotionto dismiss.").
61Fed.R. Civ.P. 15(a).
Estelle v. Gamble4, 29 U.S. 97, 115(1976)(the Court’s "normal practiceis to deny[] interlocutoryreview")(Stevens,J., dissenting).
68 Hamilton-BrowSnhoeCo. v. Wolf Bros. &Co., 240U.S. 251, 258
(1916). See also GiUespiev. UnitedStates Steel Corp., 379 U.S. 148, 152-53(1964).
e4 Am.Constr. Co. v. Jacksonville, T &K.W.Ry. Co., 148U.S. 372, 384(1893) (emphasisadded). See also Dickinsonv. PetroleumConversion Corp.,338U.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’ssecond Petition for certiorari in this interlocutory appeal.

Respectfully submitted,

HOWARDFOSTER JOHNSON& BELL, LTD. 33 West Monroe Street Suite 2700 Chicago, Illinois 60603 (312) 372-0770
BOBBYLEE COOK COOK~ CONNELLY 9899 Commerce Street P.O. Box 370 SummerviUe, Georgia 30747 (706) 857-3421

JOHNE. FLOYD* JOSHUAF. THORPE RONANP. DOHERTY NICOLEG. IANNARONE BONDURANTM, IXSON
& ELMORE,LLP 3900 One Atlantic Station 1201 W. Peachtree Street, N.W. Atlanta, Georgia 30309 (404) 881-4100
Counsel of Record for Respondents

MATTHEWTHAMES GODDARDT, HAMES,
HAMMONTRE&E BOLDING 2716 Cleveland Highway P.O. Box 399 Dalton, Georgia 30722-0399 (706) 278-0464

Additional Counsel for Respondents

January 22, 2007

 
 FILED

No. 06-873

JAN2 2 2007

IN THE

SUPREME

¢. mt of trdt h tatta

MOHAWIKNDUSTRIES, INC.,
V°

Petitioner,

SHIRLEY WILLIAMS, GALEPELFREY, BONNIE JONES, AND LORASISSON, INDIVIDUALLYANDON BEHALFOF A CLASS,
Respondents.

OnPetition for a Writof Certiorari to the UnitedStates Coui’t of Appeals
for the EleventhCircuit

BRIEF OF THE CHAMBER OF COMMERCEOF THE UNITED STATES OF AMERICA AS AMICUS CURIAE
IN SUPPORT OF PETITIONER

ROBIN S. CONRAD AMAR D. SARWAL NATIONAL CHAMBER
LITIGATION CENTER, INC.
1615 H Street, N.W. Washington, D.C. 20062 (202) 463-5337

NOELJ. FRANCISCO
(Counsel of Record) DONALEDARLCHILDRESSHI JOHNM. GORE
JONES DAY
51 Louisiana Avenue, N.W~ Washington, D.C. 20001
(202) 879-3939

Counsel for AmicusCuria~
i
WILSON-EPEPSRINTINGCo., INC. - (202) 789-0096 -WASHINGTODN.,C. 20001

BLANKPAGE

CORPORATE DISCLOSURE STATEMENT
The Chamber of Commerce of the United States of Americais a not-for-profit corporation that has neither a parent nor stockholders.

1

TABLE OF CONTENTS CORPORADTIESCLOSURSETATEME.N..T..................

Page i

TABLOEFAUTHORI..T..I..E..S.......................................

iii

INTERESTOF THEAMICUSCURIAE.... ~.........................1

SUMMOAFRAYRGUM..E..N...T.....................................

2

ARGU.M....E..N...T..............................................................

5

THIS COURT’ S REVIEW IS WARRANTED

TO DETERMINE WHETHERA CORPORATE

DEFENDANTCAN BE A CONSTITUENTOF A RICO

ASSOCIATION.IN-FEANCTTERPRI.S...E......................

5

CONCL.U...S..I.O...N.........................................................

20

.°.
III

TABLE OF AUTHORITIES

Cases

Page

All WorMProf’l TravelServs., Inc. v. Am.Airlines, Inc.,

282F. Supp.2d1161(C.D.Cal. 2003)........................

18

Anzav. Ideal Steel Supply Corp., 126S. Ct. 1991

(200.6..)............................................................................ 3

Atlas Pile Driving Co. v. DiConFin. Co., 886F.2d 986 (SthCir.1989..)............................................................... 4

Bennettv Berg,685F.2d1053(8th Cir. 1982).................. 14

Blankenshipv. W. UnionTel. Co., 161 F.2d 168 (4thCir.1947..).............................................................. 8

Bunker RamoCorp. v. United Bus. Forms, Inc., 713 F.2d

1285(7thCir.1983.)...................................................... 4

Chanvg. Chen,80F.3d1293(9th Cir. 1996)..................... 14

ChevronU.S.A. Inc. v. Echazabal,536U.S. 73 (2002)........ 9

Duncavn. Walker5, 33U.S.167(2001)...............................

7

H.J. Inc. v. Nw.Bell Tel. Co.,492U.S.229(1989)............ 11

Helveringv. Morgan’sI,nc., 293U.S.121(1934)............... 9

Leocavl. Ashcrofi5, 43U.S.1 (2004).................................

11

Mirandav. PonceFed. Bank, 948 F.2d 41 (lstCir.1991..)............................................................. 16

Mohawlkndus., Inc. v. Williams, 126S. Ct. 830 (No.05-465O,ct.7, 2005.)............................................. 3

Revesv. Ernst&Young5, 07U.S.170(1993)...................... 6

Ruizv. Alegria,896F.2d645(lst Cir. 1990)..................... 16

Sedimav. ImrexCo., Inc., 473U.S. 479(1985)..... 16, 18, 19

Seville Indus. MackCorp. v. SouthmostMath. Corp., 567 F. Supp. 1146 (D.N.J. 1983), rev’don othergrounds,742F.2d786(3dCir. 1984).............. 6, 7

TRWIncv. Andrews5,34U.S.19(2001)............................

7

iv

TABLE OF AUTHORITIES

(continued)

Page

UnitedStates v. Aimone,715F.2d 822(3d Cir. 1983)......... 4

UnitedStates v. Huber,603F.2d 387(2d Cir. 1979)........... 4

UnitedStatesv. Lanier,520U.S.259(1997)..................... 1l

UnitedStates v. London,66F.3d 1227(lst Cir. 1995)........ 4

United States v. McClendon7, 12 F. Supp. 723 (E.DA. rk1. 988..)........................................................... 7

UnitedStates v. Najjar,300F.3d466(4th Cir. 2002).......... 4

United States v. Navarro-Ordas,770 F.2d 959 (llthCir.1985..)......................................................... 4, 9

UnitedStates v. Perholtz, 842F.2d 343(D.C. Cir. 1988).... 4

UnitedStates v. Thevis,665F.2d616(5th Cir. 1980).......... 4

UnitedStates v. Turkette,452U.S.576(1981).................... 7

WormWrestlingEntm’t, Inc. v. Jakks Pac., lnc., 425F.

Supp2. d484(S.D.N.Y20. 06.).....................................

18

Z-tel Comm’cns, Inc. v. SBCComm’cns, Inc:, 331 F. Supp. 2d513(E.DT. ex.2004.).............................................

Federal Statutes & Rules 1U.S.C§1. ........................................................................... 8 18U.S.C§.225..................................................................... 8 18U.S.C§.371................................................................... 13 18U.S.C§.134.1............................................................ 6, 13 18U.S.C§.134.3............................................................ 6, 13 18U.S.C§.196.1......................................................... passim 18U.S.C§. 1962(c.)...................... . ......................................5 18U.S.C§.1964(a..).......................................................... 10 18U.S.C§.1964(c..).................................................. 2, 6, 16

V
TABLE OF AUTHORITIES (continued) Page
OrganizedCrimeControl Act of 1970, Pub. L. No. 91-4528,4Stat. 922,923(1970.)................................. 12
SuPC. TR. .37.6.................................................................... 1

Legislative Authority

S. 21878,9thCong(1. 965.)................................................

14

S. Rep9. 1-617a,t 1(1969.)................................................

13

116Cong.Rec. at 602(1970)(remarksof Sen. Hruska) 13

Miscellaneous

SamuelAlito, Jr., RacketeeringMadeSimple(r), in The

RICORacket(G. McDowedll., 1989)........................

12

AmericanHeritage Dictionary of the English

Langua6g7e0(1970.).....................................................

7

Brief for the Chamberof Commercoef the United States of America, The National Federation of Independent Business Legal Foundation, and the Society for Human Resource Managemenats Amici Curiae in Support of Petitioner, MohawIkndus., Inc. v. Shirley Williams, et al., 126S. Ct. 2016(2006)(No.05-465)............... 1

Brief for the United States as AmicusCuriaeSupporting Respondents,MohawIkndus., Inc. v. Shirley Williams, etal., 126S. Ct. 2016(2006) (No0. 5-46.5..)................................................... 3, 6,9,11

FederalJudicial CaseloadStatistics, Table C-2(U.S. District Courts--Civil Cases Commencedb,y Basis of Jurisdiction and Natureof Suit) for each respective year, available at http://www.uscourts.gov/ library,r/easeloadstatistics.h..t.m...l.)............................... 17

vi

TABLE OF AUTHORITIES

(continued)

Page

Arthur F. Mathews,et al., Report of the Ad HocCivil

RICOTask Force, AmericanBar Ass’n Section

of Corp.Bankin&gBus.L. (1985)..............................

16

U.S.SentencinGguideline§s5El.1 .....................................

8

U.S.SentencinGguideline§s8A1.2....................................

8

Transcript of Oral Argument,MohawIkndus., Inc. v. Williams,126S. Ct. 2016(Apr. 26, 2006)........... passim

Webster’s Third NewInternational Dictionary of English

Langua1g1e52(1969.)...................................................

7

BRIEF OF THE CHAMBER OF COMMERCEOF THE UNITED STATES OF AMERICA AS AMICUS
CURIAE IN SUPPORT OF PETITIONER
INTEREST OF THE A1 MICUS CURIAE
The Chamber of Commerce of the United States of America(the "Chamber")is the world’s largest federation businesses, representing an underlying membershipof more than three million businesses and organizations of every size in every industrial sector and geographic region of the country. A principal function of the Chamberis to advocate the interests of the business communityin courts across the Nation by filing amicus curiae briefs in cases involving issues of national concern to American businesses. The Chamberhas participated as amicus curiae in numerous cases before this Court and the federal courts of appeals that have raised issues of vital concern to the Nation’s businesses, including cases construing the Racketeer Influenced and Corrupt Organizations Act ("RICO"). The Chamberparticipated as amicus curiae whenthis case was previously before the Court. See Brief for the Chamberof Commerceof the United States of America, The National Federation of Independent Business Legal Foundation, and the Society for HumanResource Management as Amici Curiae in Support of Petitioner, MohawkIndus., Inc. v. Shirley Williams, et al., 126S. Ct. 2016(2006) (No. 05-465). The Chamber again comes before the Court given the compellingnature of these issues to Americanbusinesses.
l Pursuantto SupremCeourtRule37.6,amicustates that nocounseflor anypartyauthoredthis brief in wholeor in part, andthat nopersonor entity other thanthe Chambeirt,s memberos,r its counselhasmadea monetarcyontributionto the preparationor submissioonf this brief. All partieshaveconsentetdo thefiling ofthis amicubsrief, andtheirconsent lettersareonfile withtheClerk’Os ffice.

The Chamber ecognizes the importance of consistent and disciplined application of RICOto deter and remedy the wrongdoingprohibited by the statute. At the sametime, the Chamberis concerned that the statute is nowbeing misused throughout the federal courts against legitimate businesses, in large part becauseof the potential for plaintiffs to extract windfalls from Americanbusinesses through the statute’s treble damagesprovision. See 18 U.S.C. § 1964(c).
The court of appeals’ holding in this case that plaintiffs adequately pleaded a RICO"enterprise" consisting of the defendant corporation and its alleged agents is part of a dramatic expansion of RICO liability for American businesses. It converts a statute that wasdesigned primarily to deter organized crime into a tool used to induce settlements fromlegitimate businesses that cannotrisk either the possibility of being subjected to an award of treble damagesor the reputational injury of being sued in federal court under a statute associated with racketeers and mobsters. This case thus presents the Court with the appropriate vehicle to stop the expansionof the RICOstatute beyondthe carefully delineated areas mandatedby Congress. Becausethe Eleventh Circuit’s decision has far-reaching and disastrous implications for countless businesses and the questions presented in this ease have ramifications throughout the federal courts, the Chamberand its members have a strong interest in the Court granting plenary review and correcting the erroneousjudgmentof the court below.
SUMMARY OF ARGUMENT
As the petition explains, the traditional reasons for granting certiorari are clearly present here. Amongother reasons, the decision belowimplicates a well-developedand deep split amongthe federal courts of appeals concerningan important and recurring question of federal law on whichthe

...............

I-

3
Court granted certiorari last Termin this very case. 2 See Mohawklndus.I,nc. v. Williams, 126 S. Ct. 830 (No. 05-465, Oct. 7, 2005); see also Pet. 10-24. But, amicus wishes to highlight additional reasons whyit is importantfor this Court to againgrant certiorari.
In addition to two other critical issues worthy of this Court’s review, this case poses the important question "[w]hether a corporation and its agents can constitute an association-in-fact RICOenterprise." Pet. i. The petition persuasively explains howthe courts of appeals are deeply divided as to whethersuch an enterprise can be distinct from the corporation itself andthat the correct answeris that such a groupcannot constitute a RICOenterprise. Pet. 16-24.
More fundamentally, however, this case raises the "antecedent" question whether "a corporation can [ever] be a membeor f a RICOassociation-in-fact enterprise." Pet. 2021. RICOexpressly defines an association-in-fact enterprise as "any group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4) (emphasis added). As United States conceded whenthe Court addressed this very sameissue last Term, a corporation is not an "individual" under § 1961(4). Brief for the United States as Amicus Curiae Supporting Respondentsat 6, MohawIkndus., Inc. v. Shirley Williams, et al., 126S. Ct. 2016(2006) (No. 05-465) [hereinafter Brief for the United States as Amicus Curiae Supporting Respondents] ("[P]etitioner’s premise [that corporationis not an ’individual’] is correct."). Accordingly,
2 Thecase wasbriefed on the merits and arguedbefore the Court in April
2006. After deciding Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006), the Court issued an order in this case dismissing its partial grant of certiorari as improvidently granted, granting certiorari without limitation, vacating the lower court ruling, and remandingthe case to the Eleventh Circuit for reconsideration in light of the Anza decision. Pet. App.31 a. Asthe petition shows,the EleventhCircuit ignored the central holding of Anzaon remand.See Pet. 10-16. For this reason as well, the Court’s plenary review is warranted.

the plain statutory text mandates that a corporation cannot be
a constituent of an association-in-fact RICOenterprise.
The courts of appeals have uniformly reached the wrong conclusion on this fundamental, threshold question of statutory construction, a Indeed, as discussed below, several members of this Court acknowledged as much when this very issue was argued last Term. The Court should resolve this threshold issue now. Doing so would resolve the issue upon which the courts of appeals are deeply divided--viz., whether a corporation and its agents can be an associationin-fact enterprise distinct from the corporation itself. If, as
petitioner and amicus contend, a corporation can never be part of a RICOassociation-in-fact enterprise, then it necessarily follows that neither can a corporation and its
agents together comprise an association-in-fact enterprise distinct from the corporation.
Moreover, given the present uniformity in the courts of appeals, the Court should seize this opportunity to correct their uniformly wrong result. Indeed, absent immediate correction by this Court, RICOwill continue to be used by plaintiffs and their attorneys to engage in meritless litigation against legitimate corporations in order to extract unwarranted settlements from them based on a clearly erroneous interpretation of the statute. And because cases such as this invariably settle, this Court maynot soon have another opportunity to address this important question. This Court should not countenance the enormous costs that this would continue to impose on the Nation’s economy. 3 See, e.g., UnitedStates v. London6, 6F.3d1227,1243(lst Cir. 1995);
UnitedStates v. Huber,603F.2d 387, 394(2d Cir. 1979);UnitedStates v. Aimone7, 15F.2d822,828(3d Cir. 1983);UnitedStates v. Najjar,300 F.3d466,484-85(4th Cir. 2002);UnitedStates v. Thevis, 665F.2d616, 625(5th Cir. 1980); BunkerRamoCorp.v. UnitedBus. Forms,Inc., 713 F.2d 1272,1285(7th Cir. 1983); Atlas Pile DrivingCo. v. DiConFin. Co., 886F.2d 986, 995n.7 (8th Cir. 1989);UnitedStates v. NavarroOrdas7, 70F.2d959,969(1 l th Cir. 1985);UnitedStatesv. Perholtz,842 F.2d343,353(D.C.Cir. 1988).

5

ARGUMENT

THIS COURT’S REVIEW IS WARRANTED TO

DETERMINE

WHETHER A

CORPORATE

DEFENDANT CAN BE A CONSTITUENT OF A RICO

ASSOCIATION-IN-FACT ENTERPRISE

Reviewof the Eleventh Circuit’s erroneous and expansive reading of the RICOstatute is essential becauseit is contrary to the statutory text and purpose of RICO. Because the decision below frustrates the operations of numerous businesses by subjecting themto the threat of treble damages and reputational injury, this Court should grant review to prevent the inevitable harmthat businesses suffer under the EleventhCircuit’s misinterpretation of the RICOstatute.

1. In this case, respondents allege that Mohawk
Industries, Inc. ("Mohawk"i)s liable under RICObecause allegedly hired unauthorized workers and contracted with labor recruiters to assist it in hiring workers.Pet. App.85a109a. Respondents do not allege that Mohawkis the enterprise, nor do they allege that any recruiting companyis the enterprise. Instead, respondents allege merely that the "association of Mohawkand the recruiters constitutes an association-in-fact enterprise." Pet. App.102a.
The Eleventh Circuit held that respondents had stated a claim under RICObecause Mohawkand the recruiters were a "’loose or informal’ association of distinct entities." Pet. App. 8a. Under this reasoning, all transactions between a corporation and an individual or entity would subject the corporation to potential RICOliability. Indeed, whenevera corporation joins an individual or entity in a business venture, then, under the Eleventh Circuit’s analysis, the two would together constitute a RICOassociation-in-fact enterprise. Moreover, this concept of enterprise makesit easy for a plaintiff to pleadthat a corporationparticipated in the conduct of the enterprise’s affairs, see 18 U.S.C. § 1962(c), because it need only allege that the corporation exercised some degree of direction or control over the

venture. See Reves v. Ernst & Young, 507 U.S. 170, 179, 184 (1993) (describing the "conduct" element as requiring "somedegree of direction" and an element of "control" over the enterprise’s affairs). Accordingly,so long as a plaintiff can adequatelyplead a pattern of racketeering activity arising out of the venture, claims that ordinarily could only have been broughtagainst the corporation as, for example,mail or wire fraud actions, see 18 U.S.C. §§ 1341, 1343, would instantly be transformedinto private RICOclaims for treble damagesand their attendant stigma, see 18 U.S.C. § 1964(c). Suchan outcomewould"effectively eliminate the enterprise elementand drastically expandfederal jurisdiction over all business torts whichinvolve use of the mails or telephones." Seville Indus. Mach.Corp. v. SouthmostMach.Corp., 567 F. Supp. 1146, 1152 (D.N.J. 1983), rev’don other grounds, 742 F.2d 786 (3d Cir. 1984).
RICOwas never meant to countenance such a result. To the contrary, the statute’s plain text and clear purpose confirm that Congress never intended to "RICO-ize" such broad swaths of business conduct.
a. RICO’s plain text makes clear that a corporation cannot be part of an association-in-fact enterprise. The statute expressly defines the RICO"enterprise" to "include[] any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4) (emphasis added). As the United States conceded last Termwhenconfronted with this issue, a corporation is not an "individual" and therefore cannot be part of a union or group of individuals associated in fact. See Brief for the United States as Amicus Curiae Supporting Respondents at 6; Transcript of Oral Argumentat 46-48, MohawkIndus.,

7
Inc. v. Williams, 126S. Ct. 2016(Apr. 26, 2006)[hereinafter Transcript of Oral Argument].4
The conclusion necessarily follows from the text of § 1961(4) itself. The two clauses of § 1961(4) describe distinct categories of associations which mayqualify as RICOenterprises. See United States v. Turkette, 452 U.S. 576, 581-82 (1981). The first clause separately lists "any individual, partnership, [or] corporation"as entities that may constitute RICOenterprises. See 18 U.S.C. § 1961(4) (emphases added). The second clause then only includes "tmion or group of individuals" as a RICOassociation-infact. ld. If the term "individuals" in the second clause was meantto encompass"corporations," then the separate listing of "corporations" in the first clause wouldbe redundantand superfluous. It is, however,"a cardinal principle of statutory construction that a statute ought, upon the whole, to be so construedthat, if it can be prevented,no clause, sentence, or wordshall be superfluous, void, or insignificant." TRWlnc. v. Andrews, 534 U.S. 19, 31 (2001) (quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)) (internal quotation marks omitted).
This distinction between corporations and individuals, moreover, follows from the ordinary usage of the term "individual." That term refers to "a single humanbeing as contrasted with a social group or institution." Webster’s Third NewInternational Dictionary of English Language 1152 (1969); see also AmericanHeritage Dictionary of the English Language 670 (1970) ("A single human being considered separately from his group or from society."). The
4 Unlikethe courts of appeals, see supra note 3, somedistrict courts have
reached the correct result on this question. See, e.g., United States v. McClendon, 712 F. Supp. 723, 729 (E.D. Ark. 1988) (holding that corporation is not an "individual" who may be a member of an association-in-fact enterprise); Seville Indus. Mach.Corp., 567F. Supp. at 1151 (holding that two corporations and two natural persons cannot constitute an association-in-fact enterprise).

definitional provision employedby Congress, the Dictionary Act, 1 U.S.C. § 1, which sets forth Congress’s default statutory definitions, similarly distinguishes between an "individual" and a "corporation." It thus defines "person" to include "corporations, companies, associations, firms, partnerships, societies, and joint stock companies,as well as individuals." 1 U.S.C. § 1 (emphases added). In other words, the Dictionary Act, like commonusage, recognizes that the term "individual" in a federal statute does not ordinarily refer to a "corporation." See id.
Finally, RICO’s other provisions confirm that a "corporation" is not an "individual" and, therefore, cannot be part of a "union or group of individuals associated in fact." A companionprovision, § 1961(3), defines "person" as "any individual or entity capable of holding a legal or beneficial interest in property." 18 U.S.C. § 1961(3) (emphasisadded). The separate mentionof "entity" indicates that Congressdid not intend "individual" to embraceformal legal entities such a5s corporations.
In short, the plain languageof § 1961(4)illustrates that "whateveran individual is it’s different than a corporation." Transcript of Oral Argumentat 31 (statement of Roberts, C.J.). 6 Andindeed, although somecourts of appeals have
5 See also, e.g., 18 U.S.C. § 225 (setting the maximumfine for one who
"organizes, manages, or supervises a continuing financial crimes enterprise" at $10 million "if an individual," and twice that "if an organization"); U.S. Sentencing Guidelines §§ 5El.l, 8A1.2 (distinguishing between"individual" and "organization" for purposes of sentencing); Blankenship v. W. UnionTel. Co., 161 F.2d 168, 169 (4th Cir. 1947)(concluding that the Fair Labor Standards Act’s definition "person"as an individual, partnership, or other legal entity signaled that a partnership wasnot an individual within the meaningof the Act). 6 Duringoral argumenton this issue last Term,several of the membersof
this Court recognized the persuasiveness of this position. See Transcript of Oral Argumentat 29 (Chief Justice Roberts: "[I]t does seemkind of strange to encompass[corporations] under the term individuals whenthe samestatute uses individuals and corporations separately."); id. at 30-31 (Justice Scalia: "A union of individuals or a group of individuals.

..............

] .......

9
held that a corporation can be an "individual" under § 1961(4),7 here, the question is not really in dispute. Tothe contrary, last Term the United States as amicus curiae concededthat a "corporation" is not an "individual" within the meaningof § 1961(4). See Brief for the United States as Amieus Curiae Supporting Respondents at 6; Transcript of Oral Argumentat 46-48. Instead, the United States argued that the statutory enumeration in § 1961(4) was not exhaustive because it begins with the word"includes." Id. This too, however,is clearly wrong.
Congressfrequently uses the term "includes" to introduce an exhaustive, rather than illustrative, statutory definition. See Helvering v. Morgan’s, Inc., 293 U.S. 121, 125-26 (1934). Section 1961(4) clearly exemplifies such exhaustive usage. That section lists seven disparate forms of RICOenterprises, not a single example or an "obviously" incomplete listing. See ChevronU.S.A. Inc. v. Echazabal, 536 U.S. 73, 78-79 (2002) (holding that an illustrative reading of "includes" is appropriate whereit introduces a single exampleor an "obviously" incomplete listing). The inclusion of the phrase "or other legal entity" in the first clause, the omission of similar catch-all language or any
You’restill stuck with individuals... Either union meanslabor union or it meansa union or groupof individuals... So, youknow,you’re just as bad off."); id. at 31 (Chief Justice Roberts: "Well, it’s not defined in the statute, but the prior list in the same sentence says individual, partnership, corporation. So you assumewhateveran individual is it’s different than a corporation or they wouldn’t have to say corporation again."); id. at 32 (Justice Kennedy:"[W]eusually talk about person can meana corporation. This says individual. A person is defined in sub (3) just above it. Aperson includes any individual or entity. Thenthe next thing says individual. So... it doesn’t soundlike a corporation."). 7 See, e.g., UnitedStates v. Navarro-Ordas7,70F.2d 959, 969n.19 (1 lth
Cir. 1985) ("a group of corporations can be a ’group of individuals associatedin fact’") (citation omitted).

10
mentionof formallegal entities in the secondclause, and the narrower use of "individual" in companion provisions evinces that Congress carefully drafted 8 1961(4) as exhaustive,rather than illustrative, definition of "enterprise."
Comparison with companion provisions removes any possible doubt that Congress employed"includes" in its exhaustive aspect in 8 1961(4). Threeother subsections of 1961 use the term "includes" to introduce a statutory enumeration. See 18 U.S.C. 88 1961(3), (9), (10). In each these other three subsections, "it is unquestionable"that the term "includes" introduces an exhaustive list. Transcript of Oral Argumenatt 48 (statement of Scalia, J.) (noting that oral argumenthe UnitedStates "did not refute the point that in other sections whereit says includes, it is unquestionable that it is exclusive"). Section 1961(9), for example,provides that "’documentary material’ includes any book, paper, document,record, recording, or other material." 18 U.S.C. 8 1961 (9) (emphasis added). The last three words would superfluous if Congress regarded "includes" as a nonexclusive term. Similarly, 8 1961(3) provides comprehensivedefinition of "person," which "’includes any individual or entity capable of holding a legal or beneficial interest in property." Id. 8 1961(3) (emphasis added). Finally, 8 1961(10) provides a definition of "Attorney General" whichis clearly comprehensive.See id 8 1961(10) ("’Attorney General’ includes the Attorney General of the United States, the Deputy Attorney General of the United States, the Associate Attorney General of the United States, any Assistant Attorney General of the United States, or any employeeof the Department of Justice or any employee of any department or agency of the United States so designated by the Attorney General to carry out the powersconferred on the Attorney Generalby this chapter.") (emphasisadded).
In addition, whenCongresswantedto indicate that a list in RICOwas illustrative and not exhaustive, it used the phrase "including, but not limited to." See 18 U.S.C. § 1964(a)(using phrase "including, but not limited to" twice

......................

I

11
clarify that a list is incomplete).Theabsenceof that phrase from§ 1961(4) is telling.
Indeed, a contrary understanding of the term "includes" would strip Congress’s careful statutory definition of all meaning. If, as the United States argued last Term, this Court should look to the meaningof the term "enterprise" in isolation and ignore Congress’sdefinition of that term, see Brief for the United States as Amicus Curiae Supporting Respondents at 12-13, that definition becomes utterly meaningless. That is not howCongress writes statutes, or howcourts interpret them.
In all events, if there is any ambiguityin the scope of § 1961(4), the rule of lenity requires that it be resolvedin favor of the defendant. The rule of lenity "ensures fair warningby so resolving ambiguity in a criminal statute as to apply it only to conduct clearly covered." United States v. Lanier, 520 U.S. 259, 266 (1997). "RICO, since it has criminal applications as well, must, even in its civil applications, possess the degree of certainty required for criminal laws." H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 255 (1989) (Scalia, J., concurring in the judgment); see also Leocal v. Ashcroft, 543 U.S. 1, 8 (2004) (the rule of lenity applies statutes which have both civil and criminal applications) (citing cases). Thus,evenif another readingof the statute plausible, whichit is not, § 1961(4)’suse of"includes" is "at least ambiguous," Transcript of Oral Argument at 47 (statementof Scalia, J.), andthe rule of lenity requires that be construed according to its narrowest reading--that only natural persons, and not legal entities such as corporations, maybe constituents of an association-in-fact enterprise.
b. The plain meaningof § 1961(4) is in full accord with RICO’slegislative history and purpose. The legislative history makes clear that Congress’s avowedpurpose in enacting RICOwas "to seek the eradication of organized crime in the United States" and to counteract organized crime’s infiltration and corruption of "legitimate businesses

12
and labor unions." Organized Crime Control Act of 1970, Pub. L. No. 91-452, 84 Stat. 922, 923 (1970). Thus, Justice Alito has explained, RICOhad "two aims: . . . to makeit unlawful for individuals to function as membersof organized criminal groups [and] . . to stop organized crime’s infiltration of legitimate businesses." SamuelAlito, Jr., Racketeering MadeSimple(r), in The RICORacket 1, 3-4 (G. McDowelel d., 1989) (emphasis added).
Here, § 1961(4) fully meets these purposes under a plain languageconstruction. The first clause of § 1961(4) defines a RICO"enterprise" to include any "individual, partnership, corporation, association, or other legal entity." It thus prohibits organized crime frominfiltrating these legitimate businesses and using them for their nefarious purposes or from starting pretextually legitimate businesses in order to maskcriminal activity. But § 1961(4) also recognizes that organized crime does not always---or even usually--act through the corporate form. To the contrary, it often acts through a loose association of individuals--as, for example, the fictional Corleone or Soprano families. The second clause of § 1961(4) thus defines a RICOenterprise encompassa "union or group of individuals associated in fact althoughnot a legal entity."
Nothingin RICO’stext, legislative history, or overriding purpose, however, suggests that Congress was concerned about confederations of corporations bandingtogether into a RICO"enterprise." To the contrary, Congress "had no reason whatsoever [for criminalizing] associations . . . of corporations with each other. Andto do that, adding that in whenit doesn’t say that, wouldRiCO-ize, with its treble damagesand private plaintiffs and everything, vast amounts of ordinary commercialactivity .... But Congress wouldn’t have wanted to [do] that [as that had nothing] to do with organized crime.., or [with] the taking over of legitimate enterprises [by organized crime]." Transcript of Oral Argumentat 44-45 (statement of Souter, J.). Put another way, "Congress did not enact RICO because it was

13
concerned that criminal conspiracy law applied to corporations .... The whole point is that [Congress] had something significantly different in mind, and your allegations in the [Mohawk]complaint seem to be fully met by application of criminal conspiracy law." Id. at 36 (statement of Roberts, C.J.). In other words, RICOis not-and was never understood to be--necessary to prevent businesses from banding together to engage in illegal activities, because such concerns were already fully and adequately addressed in other laws, including, amongothers, statutes prohibiting criminal conspiracy, 18 U.S.C. § 371, and mail and wire fraud, see 18 U.S.C. §§ 1341, 1343.
Indeed, if anything, RICOwas intended to protect businesses, not to imposea newand onerous burden on them by unnecessarily "RICO-izing" ordinary business transactions and subjecting businesses to RICO’streble damages provision. RICO’slegislative history portrays corporations primarily as victims, rather than perpetrators, of organized crime, and showsthe purpose behind RICOto be the cleaning up of infiltrated corporations and organizations through the prosecution of individual RICOdefendants. See, e.g., 116 Cong. Rec. at 602 (1970) (remarks of Sen. Hruska) (Title IX "contains a rather novel, and in myopinion, a most promising and ingenious proposal for crippling organized crime’s relatively recent, but spectacularly successful, emergenceinto the field of legitimate business"); id. (Title IX was "designed to remove the influence of organized crime from legitimate business by attacking its property interests and by removing its members from control of legitimate busines[s]"); S. Rep. 91-617, at 1 (1969) (the "moneyand power" of organized crime "are increasingly used to infiltrate and corrupt legitimate business"). It would be the height of irony to transform RICOfrom a shield designed to protect legitimate businesses from misuse into an arbitrary and discriminatory weaponfor imposing steep and onerous costs on businesses.

14
It is thus not at all surprisingthat in the courseof adopting the RICOstatute, Congress considered--and rejected--a proposal that arguably would have encompassed a combination of corporations. See S. 2187, 89th Cong. (1965). That proposal, Senate Bill 2187, would have outlawed membership in the Mafia or "any other organization having for one of its purposes" the commission of racketeering acts, id. § 2(a), and defined "organization" "any group, society, confederation, or syndicate whoseaims, objectives, and purposes" included the commission of racketeering-type acts, id. § 3(2). After Senate Bill 2187 failed to garner support, RICOwas drafted with a specialized definition of "enterprise" that omitted the broad "any group" language.
In short, RICO’slegislative history confirms whatits text makes plain: A corporation is simply not an "individual" and, therefore, maynot be part of a "union or group of individuals associated in fact."
c. Congress had sound practical reasons to fashion this focused and limited definition of an association-in-fact enterprise, and these reasons are frustrated by the prevailing misinterpretation of the courts of appeals. An enterprise consisting of a single entity is easy to identify. See Bennett v. Berg, 685F.2d1053, 1060(8th Cir. 1982) ("An enterprise is particularly likely to be foundwhere. . . the enterprise alleged is a legal entity rather than an ’associational enterprise.’"). But identifying association-in-fact enterprises presents unique challenges for courts. See Changv. Chen, 80 F.3d 1293, 1297 (9th Cir. 1996) (noting that the issue howmuchstructure an association-in-fact enterprise must have"has dividedthe circuit courts that haveconsideredit"). Some of these difficulties may reflect the inherent imprecision in the phrase "union or group of individuals associatedin fact," but it is difficult to imaginethat Congress would have intended to compoundthese difficulties by broadeningthe definitional sweepof § 1961 (4) beyondwhat was necessary to achieve the goal of eradicating organized

15
crime. Expanding the list of potential association-in-fact constituents to include formal legal entities such as corporations threatens to do just that.
In sum, there is no statutory or historical reason to adopt the "strange" conclusion that RICO association-in-fact enterprises "encompass [corporations] under the term individuals when the same statute uses individuals and corporations separately." Transcript of Oral Argumentat 29 (statement of Roberts, C.J.). This Court’s full consideration is plainly warranted to correct the courts of appeals’ rulings to the contrary.
2. The court below’s misconstruction of RICO’s association-in-fact enterprise requirement, if left intact, will continue the long march of the various courts of appeals to transform routine corporate conduct into conduct actionable under RICO. If this trend continues, then RICO will continue to impose significant and unintended costs on American businesses. And if review is not again granted in this case, plaintiffs and their attorneys will be further emboldened to hound American businesses, even when those businesses are engaged in standard, necessary, and lawful business practices.
a. Under the view adopted by the Eleventh Circuit and other courts of appeals, any "’loose or informal’ association of distinct entities" is a RICOassociation-in-fact enterprise. See Pet. App. 8a. This renders virtually every relationship between a corporation and an individual or entity subject to potential RICOliability. Such a combination would, by definition, constitute an "enterprise," and it wouldbe easy to allege that the corporation, as a key memberof that so-called enterprise, was conducting its affairs. See supra Section 1, at 5-6. All a plaintiff need do, therefore, is allege a pattern of racketeering activity based, in manycases, on as few as two predicate acts from the myriad ones listed in 18 U.S.C. § 1961(1). If the plaintiff can meet this minimal pleading burden, it will survive a motion to dismiss and force the

16
corporation either to settle or endure the risk of treble damagesand the stigma attached to the RICOstatute.
b. This "RiCO-ization" of ordinary business conduct imposes enormouscosts on the national economy.
RICO’scivil action is an "unusually potent weapon--the litigation equivalent of a thermonucleardevice." Mirandav. Ponce Fed. Bank, 948 F.2d 41, 44 (lst Cir. 1991). Designed to deter and root out organized crime, its expanding scope through lower court interpretations provides an impropertool to induce settlements fromlegitimate businesses that cannot risk the possibility of being labeled as racketeers or subjected to an award of treble damages. See 18 U.S.C. § 1964(c). "Manya prudent defendant, facing ruinous exposure, will decide to settle even a case with no merit. It is thus not surprising that civil RICOhas been used for extortive purposes, giving rise to the very evils that it wasdesignedto combat." Sedima v. lmrex Co., lnc., 473 U.S. 479, 506 (1985) (Marshall, J. dissenting) (citing Arthur F. Mathewse, t al., Report of the Ad HocCivil RICOTask Force, American Bar Ass’n Section of Corp. Banking & Bus. L., at 69 (1985)).
In addition to financial penalties, businesses experience "an almost inevitable stigmatizing effect" when sued in federal court under a statute associated with racketeers and mobsters. Ruiz v. Alegria, 896 F.2d 645, 650 (lst Cir. 1990). Andwith these twin tools at the ingenuous plaintiff’s disposal, "RICOis evolving into somethingquite different from the original conception of its enactors." Sedima, 473 U.S. at 481,500.
Indeed, the impact of the rule adopted by the courts of appealson this questionis evident, as the potential for treble damageshas madeRICOone of the most popular litigation tools of the plaintiff’s bar. Accordingto the Administrative Office of the U.S. Courts, 678 civil RICOactions werefiled in federal court in the year ending March31, 2006(of which two were filed by the United States); 840 in the year ending

17
March31, 2005 (of which eight were filed by the United States); 695 in the year ending March31, 2004 (of which four werefiled by the United States); 845in the year ending March 31, 2003 (of which ten were filed by the United States); 707 in the year ending March31, 2002 (of which seven were filed by the United States); and 791 in the year ending March31, 2001 (of which four were filed by the United States). See Federal Judicial Caseload Statistics, Table C-2 (U.S. District Courts--Civil Cases Commenced, by Basis of Jurisdiction and Nature of Suit) for each respective year, available at http://www.uscourts.gov/ library/caseloadstatistics.html) (last visited Jan. 22, 2007).
Althoughthe Administrative Office does not account for which RICOcases involve corporate defendants, it is the experience of amicusand its membersthat the vast majority of these cases have been filed against corporations. Thus, while no precise numbercan be given, it is plain that with an average of roughly 760 civil RICOcases being filed each year coupled with the potential for treble damages, this "RICO-ization" of criminal and civil law threatens a significant portion of Americanbusinesses and thus the American economy.
RICOwas not designed to do this. For, RICOis not a general criminal conspiracy statute or a basis for invoking federal jurisdiction over business torts. Instead, it is an "enterprise" statute aimedat persons, especially organized criminals, whovictimize separate enterprises or use themas a vehicle for criminal activity. As several of this Court’s membersacknowledgedat the April 2006 oral argument in this very case, to include corporations in the definitional sweep of"individuals" would do nothing to promote RICO’s aim of eliminating organized crime.8
8 See, e.g., Transcript of Oral Argumenatt 44-45(Justice Souter: noting
that Congresshad "no reason" for extendingthe deffmition of enterprise to "associations... of corporations" because that that "wouldRICO-ize, with its treble damagesand private plaintiffs and everything, vast

18
Nor is this potential for abuse theoretical. As Justice Marshall noted in 1985, "the ABATask Force that studied civil RICOfound that 40%of the reported cases involved securities fraud and 37%involved common-lawfraud in a commercial business setting." Sedima, 473 U.S. at 506 (Marshall, J., dissenting). Asshownabove, this problemhas only expandedin the intervening years with nearly 760civil RICOcases being filed in the federal courts each year. Thus, RICOclaims alleging commercial fraud are regularly brought against legitimate businesses, exposingbusinesses to R9 ICO’streble damages provision and attendant stigma. This "extortive" activity is precisely what Justice Marshall feared when, in Sedima, he decried RICO’s"frequent[]" use "against legitimate businesses in ordinary commercial settings" and observed that "[m]any a prudent defendant, facing ruinous exposure, will decide to settle even a case with no merit." 473 U.S. at 506 (Marshall, J., dissenting). Andthis will only continue unless this Courtacts to halt the misinterpretation of RICOin the lower courts.
c. Finally, the Court should resolve this issue now. As discussed above, the membersof this Court recognized the importance of this issue last Termduring oral argument. Resolution of this question, moreover, .would resolve the deep circuit split over the question whethera corporation and its agents can constitute an enterprise distinct from the
amountsof ordinary commerciaal ctivity" and activity that "has not to do with organizedcrime" or "with taking over legitimate enterprises"); id. at 44 (Justice Breyer: noting that Congressprobably "put in the wordgroup of individuals" because "it’s possible that Congress was worried about organizedcrime taking over the pizza parlor or taking over a trades union or taking over a similar kind of enterprise"). 9 See, e.g., WorldWrestlingEntm’t, Inc. v. Jakks Pac., Inc., 425 F. Supp.
2d 484 (S.D.N.Y. 2006); Z-tel Commc’ns,Inc. v. SBCCommc’ns,Inc., 331 F. Supp. 2d 513 (E.D. Tex. 2004); All WorldProf’l Travel Servs., Inc. v. Am.Airlines, Inc., 282F. Supp.2d 1161(C.D.Cal. 2003).

19
corporation itself. Finally, as the courts of appeals have uniformly come out the wrong way on this question, immediate intervention by this Court is necessary. As Justice Marshall correctly recognized in Sedima, given the enormousrisks involved in defending RICOactions, most of these cases--including those involving meritless claims-will settle. This case thus presents the Court with a rare vehicle to resolve this vitally important issue. Andabsent such resolution, businesses across the Nation will continue to face the Hobson’schoice of litigating or settling meritless claims based on an erroneous interpretation of the RICO statute. This Court should not countenance such a result, particularly with respect to a statute like RICO,with its already expansive reach, trebling of damages,and attendant stigma of being sued under a statute intended to target organized crime.
At bottom, the decision below threatens to convert a statute that wasdesigned primarily to deter organized crime into a tool used to induce settlements from legitimate businesses that cannot risk either the possibility of being subjected to an awardof treble damagesor the reputational injury of being sued in federal court under a statute associated with racketeers and mobsters. Andthe impact of the decision below upon the business communitycannot be understated: The Eleventh Circuit’s judgment and the statutory misinterpretation underlying it will have farreaching and disastrous implications for countless businesses. Given that the Eleventh Circuit’s holding threatens to encumberbusinesses and to thwart a carefully crafted congressional statute, this Court’s review is immediately warranted. Indeed, because most of these cases settle because of the lower courts’ unitary, yet erroneous, view of the law, this case presents the Court with a rare vehicle for resolving this important issue. Amicusthus urges this Court to grant certiorari in order to curb the lower courts’ erroneous expansion of the RICO"enterprise"

2O
definition and to give effect to Congress’slimitation of that definition to "a group of individuals associated in fact although not a legal entity." See 18 U.S.C. § 1961(4) (emphasis added).
CONCLUSION Thepetition for a writ of certiorari shouldbe granted.
Respectfully submitted,

ROBIN S. CONRAD AMAR D. SARWAL NATIONAL CHAMBER
LITIGATION CENTER, INC.
1615 H Street, N.W. Washington, D.C. 20062 (202) 463-5337

NOELJ. FRANCISCO
(Counsel of Record)
DONALDEARL CHILDRESS III
JOHNM. GORE
JONES DAY
51 Louisiana Avenue, N.W. Washington, D.C. 20001 (202) 879-3939

January 22, 2007

Counsel for Amicus Curiae

 
 No. 06-873
Sn
SupremeCourt ef the

MOHAWKINDUSTRIES, v.

INC., Petitioner,

S HIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES, and LORASISSON, Individually and on behalf of a class,
Respondents.

On Petition For Writ Of Certiorari To The United States Court Of Appeals
For The Eleventh Circuit
SUPPLEMENTAL BRIEF IN OPPOSITION TO THE PETITION FOR CERTIORARI

HOWARD FOSTER JOHNSON 8~ BELL, LTD.
33 West Monroe Street Suite 2700 Chicago, Illinois 60603 (312) 372-0770
BOBBY LEE COOK COOK ~ CONNELLY
9899 Commerce Street P.O. Box 370 Summerville, Georgia 30747 (706) 857-3421

JOHN E. FLOYD*
JOSHUAF. THORPE RONANP. DOHERTY NICOLEG. IANNARONE
BONDURANT, MIXSON
8~ ELMORE, LLP
3900 One Atlantic Center 1201 W. Peachtree Street, N.W Atlanta, Georgia 30309 (404) 881-4100
Counsel for Respondents

MATTHEW THAMES
GODDARD, THAMES,
HAMMONTREE & BOLDING
2716 Cleveland Highway P.O. Box 399 Dalton, Georgia 30722-0399 (706) 278-0464

February 20, 2007

*Counsel of Record

COCKLELAWBRIEF PRINTING CO. [800) 225-6964 OR CALLCOLLECT(402) 342-2831

BLANKPAGE

TABLE OF CONTENTS Page

TABLOEFCONTEN...T...S......................................

i

TABLOEFAUTHORIT..I..E..S................................

ii

INTRODU.C..T...I.O...N...........................................

1

SUPPLEMENTAL REASONS FOR DENYING THE PETITI.O...N.........................................................

CONCLU..S...I.O...N................................................

ii

TABLE OF AUTHORITIES

Page

CASES

American National Bank & Trust Co. v. Haroco,

Inc:, 473U.S.606(1985).................................................

4

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

(2006..)......................................................................

6, 7, 8

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

158(2001.).......................................................................

3

City of Houstonv. Hill, 482U.S. 451(1987).......................

8

Illinois v. Gates,462U.S.213(1983)..................................

8

Lebron v. National R.R. Passenger Corp., 513 U.S.

374(1995.).......................................................................

5

MedImmune,Inc. v. Genentech, Inc., 127 S. Ct. 764

(2007.)..............................................................................

7

Oklahoma Tax Comm’n v. Chickasaw Nation, 515

U.S.450(1995.)...............................................................

5

PGATour, Inc. v. Martin, 532U.S. 661 (2001) ...................

5

Steagald v. UnitedStates, 451 U.S. 204(1981) ..................

6

United States v. Goldin Industries, Inc., 219 F.3d

1271(llth Cir. 2000.)......................................................

8

United States v. United Foods, 533 U.S. 405 (2001) .......... 9

Yee v. City of Escondido,503U.S. 519(1992) .................

5, 8

STATUTES

18U.S.C§. 1961(4.)...................................................

passim

18U.S.C§. 1962(c.)..................................................

3, 4, 5, 9

18U.S.C§. 1964(c.).......................................

i .......i ............. 4

INTRODUCTION
Pursuant to Supreme Court Rule 15.8, the respondents submit this Supplemental Brief to correct several representations about the proceedings below that appear in the February 6, 2006 Reply Brief of Petitioner. Those proceedings are significant here because the Court considered the merits of MohawkIndustries Inc.’s RICOenterprise arguments last Term, only to dismiss certiorari as improvidently granted after learning that Mohawk had failed to preserve the "antecedent question" of whether a corporation can ever be a memberof an association-in-fact enterprise pursuant to 18 U.S.C. § 1961(4). In its Reply, Mohawkparses the words of its lower court briefs, attempts to distinguish between "the issues" and "its arguments," and contends there is no waiver. It is for this Court to determine how Mohawk’s repeated prior concessions that a corporation can be a member of an association-in-fact enterprise will affect this Petition. But the Court should make that determination based on a clear sense of what actually transpired below. And because Supreme Court Rule 15.2 requires respondents to point out any objections to "considering a question presented based on what occurred in the proceedings below," the plaintiffs submit this Supplemental Brief to clarify those proceedings in this case.
0
SUPPLEMENTAL REASONS FOR DENYING THE PETITION
Mohawk’s second Question Presented asks the Court to grant certiorari to resolve an alleged circuit split over whether a corporation and its agents are sufficiently distinct to form a RICOenterprise. Mohawkfurther urges

2
the Court to address the "critical antecedent question" of whether a corporation may ever be a constituent part of an enterprise consisting of a "group of individuals associated in fact" pursuant to 18 U.S.C. § 1961(4). I But Mohawk waived that antecedent question when it informed both the district court and the Eleventh Circuit that Mohawk agreed corporations could form part of an association-inf2act enterprise.
Although the Petition made no mention of this substantial obstacle to certiorari, Mohawk’s Reply argues there is no waiver because Mohawk consistently has maintained that the plaintiffs failed to allege a proper RICO enterprise. 3 Even if Mohawk failed to make the argument for which it seeks certiorari, the Reply suggests that the arguments Mohawk did make nevertheless preserved any conceivable enterprise "issue.’~ Second, the Reply contends the entire inquiry is irrelevant because Mohawk did preserve the argument it now presses on appeal. Finally, the Reply argues that regardless of what Mohawkadvocated to the lower courts, this Court should grant certiorari because the Eleventh Circuit "passed on" the question of whether corporations can be members of association-in-fact enterprises. As explained below, each of these arguments misstates the record.
1. The issue raised in Mohawk’s motion to dismiss, on interlocutory appeal to the Eleventh Circuit and on
ReplyBr. of Pet. at 5 (filed Feb.6, 2007)(~Reply’)P; et. for a of Certiorari at 20-21(filed Dec. 19, 2006)(’~Pet."). See also U.S. Chambeorf CommerAcemicusBr. (filed Jan. 22, 2007).
2 See Br. in Opp.to the Pet. at 9-12(filed Jan. 22, 2007)("Opp.’); Resp.Br. at 12-14(05-465,filed Mar.16, 2006).
8 SeeReplyat 5-9. 4 Id. at 6.

certiorari to this Court last Term was whether the plaintiffs had alleged an enterprise distinct from Mohawkitself. In the lower courts, Mohawk offered two arguments to support that contention. First, Mohawkargued that the alleged enterprise of Mohawkplus third-party recruiters was no different than (or not separate from) Mohawk itself. 5 Mohawkalso offered the related argument that its alleged participation in the affairs of this enterprise was no different than (or not separate from) conducting the affairs of Mohawkitself. 6 Mohawk’sissue - and both its supporting arguments - therefore concerned the plaintiffs’ purported failure to identify an enterprise separate from Mohawk. As this Court held in Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 160-63 (2001), those "separateness" concerns are suggested by 18 U.S.C. § 1962(c), which requires the plaintiff to plead and prove the defendant’s participation in the affairs of a RICO enterprise. Mohawk’s briefs to the district court and the court of appeals echo that point by making repeated reference to § 1962(c).
The very different question that Mohawk seeks to inject into the case now is whether RICO’s separate definitional statute, 18 U.S.C. § 1961(4), permits the inclusion of corporations in any association-in-fact enterprise. Section 1961(4) provides that a RICO enterprise "includes... any union or any group of individuals associated in fact," and as the Petition concedes, all the circuit
5 See MohawDkist. Ct. Motionto Dismissat 10-12(Dist. Ct. Dkt. No.25, filed Feb.9, 2004).
6 Id. at 12-14. Tothe extent Mohawpkreserved any other argumentsthey related to the sufficiency of plaintiffs’ description of the enterprise and an alleged lack of commopnurpose.Id. at 13-15&n.7.

4
courts agree that this definition is broad enough to encompass associations comprised of corporations and other legal entities. 7 After affirmatively representing to the district court and the court of appeals that Mohawkagreed with that well-settled interpretation of § 1961(4), Mohawk seeks to reverse course, and its Petition urges this Court to be the first to take up the § 1961(4) question in this case.
Although Mohawkconcedes that its Petition presents two enterprise questions, the Reply conflates those questions without acknowledging that there are two entirely different statutory provisions at issue. That difference is important because American National Bank & Trust Co. v. Haroco, Inc., 473 U.S. 606 (1985), another RICO case, summarily rejected a similar attempt to pirouette from the RICO provision the petitioner had argued below to a different provision in the Supreme Court. In the court of appeals, the petitioner had argued that RICO’s civil damage provision, 18 U.S.C. § 1964(c), required the plaintiff plead an injury caused by the defendant’s participation in the affairs of an enterprise, not just an injury caused by the predicate crimes. After winning certiorari to review this § 1964(c) question, the petitioner argued that the complaint did not properly allege the defendant’s conduct of an enterprise’s affairs in violation of § 1962. The Court noted that this separate question of statutory interpretation was not properly before the Court because the
7 SeePet. at 20(notingthe "wideacceptanc~eof this interpretation of § 1961(4)).

5
petitioner had not made the argument below and the court
of appeals had not passed on it."
Mohawk’s attempt to overhaul its prior § 1962(c) distinctness arguments to sweep up an entirely discrete § 1961(4) question is no different. And the cases Mohawk cites at pp. 6-7 of the Reply offer no support to the petitioner who seeks to reverse a defeat by raising an entirely new question about an entirely different statutory provision for the first time in this Court.9 At bottom, Mohawk’s contention that it preserved every conceivable enterprise argument by framing the "overarching issue of whether p"1la°intiffs had plead a legally cognizable RICO enterprise
is not much different than the untenable theory that a not guilty plea preserves all issues for Supreme Court review, regardless of the arguments the defendant chose to make to the lower courts.
a Id. at 608. See also OklahomaTax Comm’nv. Chickasaw Nation, 515 U.S. 450, 456-57 (1995) (declining to address an argument premised on a statute the petitioner had failed to raise in the lowercourts).
Indeed, Yee v. City of Escondido, 503 U.S. 519, 533 (1992), confirmsthat the Court will not consider a claim the petitioner failed to advance below. The argument the Court permitted had been raised (albeit ambiguously) and passed on below, but the Court excluded substantive due process claim that was neither madenor ruled upon in the lower courts. Id. at 533-34. Moreover, in PGATour, Inc. v. Martin, 532 U.S. 661, 678 n.27 (2001), the "reframe[d]" issue concerned coverage under the same statute and the Court noted that the importance of the question demanded an exception to the ordinary rule. Lebron v. National R.R. Passenger Corp., 513 U.S. 374, 379 (1995) inapposite because, although the petitioner had waived the argument, the court of appeals had nevertheless ruled directly on the question. As noted below, the Eleventh Circuit did not similarly pass on the § 1961(4) question Mohawkadvances here.
lo Replyat 6.

6
2. In addition, the Reply Brief contends that Mohawk preserved the antecedent question "because Mohawk did explicitly raise the foreclosed § 1961(4) argument both before the panel and the entire Eleventh Circuit. "11 Although literally true, that description badly misrepresents the record. To the extent Mohawkraised this issue in Williams I, it was to affirmatively represent that corporations could be members of association-in-fact enterprises - a position that directly contradicts the argument for which it nowseeks certiorari. 12 After this Court dismissed certiorari as improvidently granted in Williams I and remanded the case to the court of appeals last Term, the Eleventh Circuit limited any supplemental briefing to the proximate causation issues raised by this Court’s decision inAnza v. Ideal Steel Supply Corp., 11236 S. Ct. 1991 (2006). Accordingly, Mohawkmade a single, passing reference to the § 1961(4) argument in the last footnote on the last page of its Supplemental Brief. That fleeting footnote represents Mohawk’s only substantive attempt to argue that § 1961(4) precludes (rather than permits) associationin-fact enterprises comprised of corporations before the
~ Id. SeeMohawDkist. Ct. ReplyBr. at 5 [Dist. Ct. Dkt. 43] (’2Vlohawk
agrees that a corporation can be both a RICOperson and part of an association-in-fact enterprise~); Opp.at 9-10 (collecting additional concessions). Thoserepresentations waivethe § 1964(1)argument purposesof this appeal, withoutregard to any separate argumentover judicial esteppel. See Steagaldv. UnitedStates, 451U.S. 204, 208-09 (1981)(governmenftorfeited its opportunityto contest the defendant’s reasonable expectation of privacy by failing to makethe argument belowand byacquiescingthe point in its brief in oppositionto certiorari).
13SeeOrder(llth Cir. July 27, 2006).

Eleventh Circuit rendered Williams H, the decision for which the Petition seeks this Court’s review.
Mohawkargues that nothing further could have been expected because binding precedent in the Eleventh Circuit - and every other circuit - foreclosed the argument that a corporation could not be a member of an association-in-fact enterprise. 14 The Reply cites MedImmune,Inc. v. Genentech, Inc., 127 S. Ct. 764, 770 (2007), for the proposition that Mohawk’s tactics constituted "counsel’s sound assessment that the [§ 1961(4)] argument would futile" in light of binding precedent. 15 But MedImmune declined to find waiver where the petitioner had devoted "a few pages of its appellate brief" to the foreclosed argument before seeking certiorari. 16 Moreover, in MedImmune there was no indication that the petitioner had represented its agreement with the proposition of law that it later asked this Court to reverse. Accordingly, Mohawk’s efforts to present its § 1961(4) argument to the Eleventh Circuit panel that decided both Williams I and Williams H does not meet the MedImmune standard. Only after the panel issued Williams H, rejecting Mohawk’s Anza arguments, did Mohawk devote any substantive attention to the enterprise argument it now presses this C1~ourt to review.
3. Finally, the Reply contends that regardless of what Mohawk presented to the lower courts, this Court should grant review because the Eleventh Circuit "passed
~4SeeReplyat 5-6.
Id. at 6 n.5. 16 MedImmun1e2, 7 S. Ct. at 770. 17See Pet. App.81a-84a.

upon" the § 1961(4) argument in Williams H.18 Once again,
that misstates the record because on remand from this Court, the Eleventh Circuit specifically limited its consideration and the Williams H decision to Anza’s impact on the plaintiffs’ proximate cause allegations. Indeed, the
Williams H panel declined to reconsider any enterprise issue and simply reissued its prior enterprise analysis verbatim from Williams I. ~9 Moreover, the citation to United States v. Goldin Industries, Inc., 219 F.3d 1271, 1275 (llth Cir. 2000) at Pet. 7a-8a, on which Mohawk bases its claim, makes no mention of the corporation question Mohawk urges on the Court. 2° The different
proposition for which the court of appeals cited Goldin constitutes nothing more than a "routine restatement and application of settled law by an appellate court," which does not satisfy this Court’s "pressed or passed upon below" rule. ~1 Nor did the full Eleventh Circuit "pass upon" Mohawk’s § 1961(4) argument when it denied Mohawk’s p~e2titions for re-hearing without commen~or dissent.
18Replyat 6 n.5 (citing Pet. App.7a-8a). 19 ComparPeet. 7a-12awith Yc~lliamsI, 411F.3d 1251, 1257-60
(llth Cir. 2005). See Pet. 7a-Sa(citing Goldinfor the propositionthat an enter-
prise musthave an "ongoingorganization," "function as a continuing unit," andexist as an "associationof individualentities, howevelroose or informal,that furnishes a vehicle for the commissioonf twoor more predicatecrimes").
~1Illinois v. Gates,462U.S.213,223(1983)(withou"t anyreal contest"
onthe point,the routineapplicationof priorprecedenits notsufficient). Cf. ~e, 503U.S.at 533(denial of certiorari expressesnoviewon
the merits andtherefore doesnot satisfy the Court’srequirementhat a prior court pass uponthe question); City of Houstonv. Hill, 482U.S. 451, 467n.16 (1987) (abstention argumentwassignificantly undercut becausethe petitioner had not raised it before the panel and the en banc court madeno mentionof the argument).

9
Mohawk’s serial attempts to overcome the legal hurdles to reviewing the § 1961(4) question it conceded below are effectively answered by this Court’s decision in United States v. United Foods, Inc., 533 U.S. 405, 417 (2001). There, the Court acknowledged that it has occasionaUy permitted a litigant to defend a lower court judgment on grounds different than those advocated below, but held that "it is quite a different matter to allow a petitioner to assert new substantive arguments attacking, rather than defending, the judgment when those arguments were not pressed in the court whose opinion we are reviewing, or at least passed upon by it. ""3 Because Mohawk’s belated attempt to secure a dismissal based on § 1961(4) falls firmly into this latter category, the Court should decline Mohawk’s invitation to review the question in this case.
CONCLUSION
The record below demonstrates that Mohawk’s motion to dismiss attacked the plaintiffs’ ability to satisfy 18 U.S.C. § 1962(c), not § 1961(4). In challenging the alleged enterprise, Mohawkdid not press the separate § 1961(4) question that Mohawknow urges in the Petition. To the contrary, Mohawkaffirmatively conceded that question by telling the lower courts that it agreed corporations could be part of an association-in-fact enterprise. As a result, neither the district court nor the court of appeals passed upon that question. Mohawk’s varied attempts to avoid the consequences of its prior concessions cannot be reconciled
533 U.S. at 417.

0

with record in this case. Because this Court does not sit as a court of first instance and does not grant certiorari to review issues that the parties failed to press below, the Petition should be denied.

Respectfully submitted,

HOWARDFOSTER JOHNSON& BELL, LTD. 33 West Monroe Street Suite 2700 Chicago, Illinois 60603 (312) 372-0770
BOBBYLEE COOK Coog ~ CONNELLY
9899 Commerce Street P.O. Box 370 Summerville, Georgia 30747 (706) 857-3421

JOHN E. FLOYD* JOSHUAF. THORPE RONANP. DOHERTY NICOLEG. IANNARONE BONDURANT,MIXSON
& ELMORE, LLP 3900One AtlantiCcenter 1201 W. Peachtree Street, N.W. Atlanta, Georgia 30309 (404) 881-4100
Counsel for Respondents

MATTHEWTHAMES GODDARD, THAMES,
HAMMONTREE & BOLDrNG 2716 ClevelandHighway P.O.Box 399 Dalton,Georgia30722-0399
(706)278-0464

February 20, 2007

*Counsel of Record

 
 No. 06-873

MOHAWIKNDUSTRIES, INC.,
Vo

Petitioner,

SHIRLEY WILLIAMS, GALE PELFREY,
BONNIE JONES, ANDLORASISSON, individually and on behalf of a class,
Respondents.

OnPetition for a Writof Certiorari to the United States Courtof Appeals
for the EleventhCircuit

REPLY BRIEF OF PETITIONER

CARTEGR. PHILLIPS*
JUAN P. MORILLO STEVEN T. COTTREAU MATTHEWJ. WARREN SIDLEY AUSTIN LLP
1501 K Street, NW Washington, DC20005 (202) 736-8000

Counselfor Petitioner

February 6, 2007

* Counsel of Record

WILSON-EPES PRINTING CO., INC. - (202) 789-0096 - WASHINGTON, D.C. 20001

BLANK PAGE

TABLE OF CONTENTS
TABLOEFAUTHORI.T...I.E...S................................... REPLBYRIEOF FPETITION..E...R............................. CONCL.U...S..I.O...N......................................................

Page ii 1 10

(i)

ii

TABLE OF AUTHORITIES

CASES

Page

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

(2006..).............................................. i ................... 1, 2 Cedric Kushner Promotions, Ltd. v. King, 533

U.S1. 58(2001..)..................................................

4, 5

Evans v. City of Chi., 434 F.3d 916 (7th Cir.

2006..).................................. ................................ 9, 10 James Cape & Sons Co. v. PCCConstr. Co., 453

F.3d396(7thCir.2006.)......................................

3

Lebronv. NationalR.R., 513U.S. 374(1995)........ 6, 7

MedlmmuneI,nc. v. Genentech, Inc., 127 S. Ct.

764(2007..)..........................................................

6

NewHampshirev. Maine, 532U.S. 742 (2001) ..... 7, 8

PGATour, Inc. v. Martin, 532U.S. 661(2001) ..... 8, 9

United States Nat’l Bank of Ore. v. Independent

Ins. Agentsof Am.,508U.S.439(1993).............

7

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

(1lthCir.2000..)..................................................

6

United States v. Navarro-Ordas, 770 F.2d 959

(1lth Cir.1985.)....................................................

5

UnitedStates v. Williams,504U.S. 36(1992)........

7

Yeev. City ofEscondido,503U.S. 519(1992).......

7

STATUTES

18U.S.C§.§1961-19.6..8.......................................

1

§ 1961(.4..).............................................

5

§ 1964(c.)...... , ......................................... 9

LEGISLATIVE HISTORY
S. Rep. No. 95-962 (1978), available at 1978 U.S.C.C.A5.5N1.8..............................................

°°°
111

TABLE OF AUTHORITIES

SCHOLARLY AUTHORITY

Page

Stem & Gressman, Supreme Court Practice (8th

ed.2002..)............................................................

6

BLANK PAGE

REPLY BRIEF OF PETITIONER
As set forth in the petition, this case presents three significant questions about the proper scope of civil suits under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968("RICO").Plaintiffs attempt avoid this Court’s review by systematically misstating the record and the law. First, as to direct injury, plaintiffs claim the court of appeals compliedwith Anzain large part because that court "cited Anza." Opp. 3. Under any fair reading of the opinionbelow,it is clear that the panel wasnot faithful to Anza’steachings. Second,as to the enterprise issue, plaintiffs mistakenly claim that a 4-3 circuit split has already been resolved by this Court. Withthat argumentfailing, plaintiffs also mischaracterize the record belowand claim that Mohawk waived the antecedent argument regarding the statutory definition of enterprise. That view, however, is simply mistaken. Mohawkhas consistently claimed that the enterprise allegations are legally insufficient and sought rehearing en banc from the court of appeals on the precise argument that prior binding circuit precedent had wrongly rejected. Third, plaintiffs unavailingly claim that the circuit split over whether an injury to wages provides civil RICO standingis not implicatedby this case.
1. This Court’s decision last Termin Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006), held within it the promise to clarify substantially the proper scope of civil RICOlitigation. Allegations of an injury that flowed logically from the alleged RICOviolation were not enough. Instead, Anza requires that the action that directly caused plaintiff’s injury had to be the RICOviolation, and not some other action that resulted from the violation. See id at 1997 ("The cause of [plaintiffs] asserted harm[] ... is a set of actions (offering lower prices) entirely distinct from the alleged RICOviolation (defrauding the State)."). This Court explained that RICO’sdirect injury requirement "is meantto

2
prevent ... intricate, uncertain [damage] inquires from overrunningRICOlitigation." Id. at 1998.
The court of appeals failed to apply Anza despite this Court’s direction to reconsider this case. Indeed, plaintiffs’ defense of the decision below is telling: According to plaintiffs, the court of appeals complied with this Court’s order because it "cites Anza" and included "extensive and accurate quotation of Anza." Opp. 3, 4. But citing Anza while ignoring its holding is not complyingwith it. Even a cursoryreviewof plaintiffs’ claim reveals that it fails to state a claim for the same reasons the claim in Anza failed. Like the Anza plaintiff, plaintiffs allege an injury (depressed wages)resulting fromtheir employer’sdecision to pay them particular wagerate. That wagerate is not itself unlawful. Instead, plaintiffs allege that Mohawskelected it becauseits alleged RICOviolations enabled it to do so (in the sameway that the Anza defendant was alleged to have selected a price as a result of tax fraud).l Thatthis aloneis fatal to plaintiffs’ claim is confirmed by the fact that Mohawk’swagerate is influenced by a complexmultitude of factors. See Pet. 13-14. While Ph.D. labor economists regularly debate these myriad influences, this is precisely the type of debatethat this Court held that jurors should not decide in an already complicated RICOcase. SeeAnza, 126 S. Ct. at 1997.
l Plaintiffs contendthat their injury is direct because the purported motivationof federal immigrationlaw is to protect jobs for legal workers. See Opp.5. Evenif that werethe case, all intended beneficiaries of a law are not directly injured, as RICOrequires. Legislative history often identifies victimswho"nonethelessare not directly injured victims for civil RICOpurposes. For example, Congress has explained that criminal schemes to avoid sales tax on cigarettes harm "[t]he truly innocent victims": legitimate retailers driven out of business because of competition from untaxed cigarettes. S. RepoNo. 95-962, at 7-8 (1978), available at 1978 U.S.C.C.A.N.5518, 5522. But Anza rejected suits by such"victims"becausetheir injuries are indirect.

3
In failing to apply Anza’s holding, the court of appeals fashioned its ownincompatibletest: the injury is direct when there is a "correlation" with the RICOviolation. Pet. App. 17a. A correlation requirement, however,is exactly the type of tenuousconnectionAnzarejects as insufficient: indeed, the failure to charge customers sales tax in Anza certainly correlated with the ability to win those customers from a competitor. Asa result, the court of appeals has robbed Anza of its promiseto rein in attenuatedclaims.
By contrast, the Seventh Circuit properly understood Anza and rejected a "correlated" injury. Plaintiffs deny that the Eleventh Circuit’s decision creates a circuit split with the Seventh Circuit in James Cape & Sons Co. v. PCCConstr. Co., 453 F.3d 396 (7th Cir. 2006). See Opp.8. Plaintiffs are wrong. Each of the primary factors that the Eleventh Circuit relied upon to find a direct injury in this case was equally present in James Cape. Like respondents here, the Cape plaintiff pled an injury (losing competitive bids) that correlates with the alleged predicate act (a competitor’s bid rigging). Andlike respondents, the Capeplaintiff pled that the purpose of the racketeering acts was to steal contracts from it. 2 Under the Eleventh Circuit’s analysis, the correlation betweenlost contracts and bid-rigging, and the defendants’ alleged purpose to take contracts from the plaintiff wouldbe sufficient to plead a direct injury. SeePet. App.16a-17a. But the Seventh Circuit rejected that holding, focusing instead on the central Anza inquiry: whether the plaintiff’s claimedinjury wasthe direct result of the claimed predicate acts. James Cape, 453 F.3d at 403. The stark division between the Seventh Circuit’s straightforward
2 See Compl.¶ 1, JamesCape, No. 05-C-269(E.D. Wisc. filed Mar. 10, 2005) ("The defendants conspired to take work from James Capefor the defendants’ benefit and to JamesCape’sdetriment.").

4
application of Anza and the Eleventh Circuit’s "correlation" t3est provides another reason to grant review.
2. Last Term this Court recognized that the question of whether a RICOclaim can be predicated upon an associationin-fact enterprise consisting of a corporation and its agents warranted review. 4 In an attempt to avoid review, plaintiffs no longer maintain that the split is not implicated--that effort failed in their prior brief in opposition. See Br. in Opp. at 2,
No. 05-465 (U.S. filed Nov. 9, 2005). Instead, plaintiffs now take an equally unavailing tack, asserting that this Court "effectively answered" the question and resolved the split in Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001). Opp. 13-14.
Plaintiffs badly mischaracterize this Court’s decision in Cedric Kushner. There, the Courl only noted the enterprise question presented here--it did not purport to resolve it. Cedric Kushner involved a classic RICOsituation where an individual controls and misuses a corporation. The issue in that case was whether the shareholder and employee of a corporation could be sued as a RICO defendant for conducting the affairs of the corporation as a RICO enterprise. This Court held that it could, finding that the individual defendant was distinct from the corporation he
3 Plaintiffs also suggestJamesCapeis distinguishablebecausethe state
agencyawardingcontracts "had to makeinflated payments."Opp. 8. JamesCape,however,involvedundercuttingbylowerbids. Asa result, the state agencywasnot a moreimmediatevictim--it savedmoney.
4 Plaintiffs assert that this Court’sJune5, 2006ordervacatingWilliams
I andorderingthe EleventhCircuit to reconsiderthis casein light of Anza was an admission that the Court "had madea mistake by granting certiorari" onthe enterprise issue. Opp.1. This Court, of course, best understandthse basisfor that action,butit is at least equallyplausiblethat Anzaso obviouslyshouldhaveendedthis litigation that this Courtdecided that resolvingthe enterpriseissuewasunnecessarayt that time.In fact, it wasMohawwkhosuggested that "this Court vacate and remand... in light of [the] decisionin Anza."Pet’r ReplyBr. 13n. 10, No.05-465(U.S. filed Apr.11, 2006).

5
controlled. See Cedric Kushner, 533 U.S. at 163. Cedric Kushner, however, distinguished circuit court precedent rejecting an enterprise analogous to the one alleged in the instant case---one where a corporation is named as the defendant "and the corporation, together with all its employeesand agents, were the ’enterprise.’" Id. at 164. The Court noted that such "precedent involved quite different circumstances whichare not presented here." Id. Indeed, the Court expressed skepticism about such an enterprise, noting that it wasan "oddlyconstructedentity." Id.
The Court should grant certiorari to decide the issue reserved in Cedric Kushner, and it should do so by resolving the critical antecedent question of whethera corporation may ever be a constituent part of an enterprise consisting of a "group of individuals associated in fact." 18 U.S.C. § 1961(4). See Pet. 20-22. Plaintiffs’ claim that this issue has been "waived"(Opp. 9) is yet another mischaracterization in their attemptto avoidreview.
Contrary to plaintiffs’ suggestions, Mohawkhas consistently maintained that the enterprise in this case is invalid. In fact, Mohawk’fsirst argument in its motion to dismiss before the district court was that "THECOMPLAINT FAILS TO IDENTIFY A LEGALLY SUFFICIENT ENTERPRISE."Mot. to Dismiss 7, No. 4:04-CV-03 (N.D. Ga. filed Feb. 9, 2004). After a contrary ruling from the district court, that court granted Mohawpkermissionto file an interlocutory appeal as to whether "Plaintiffs had adequately pleaded the existence of a RICOenterprise." Pet. App. 71a72a. Then, before the Eleventh Circuit panel, Mohawk continued to argue that the "Complaintfails to allege a RICO enterprise." Br. of Appellant 11, No. 04-13740 (llth Cir. filed Sept. 7, 2004).
Mohawpkreserved the enterprise issue even in the face of Eleventh Circuit precedent that had long held that "a group of corporations can be a ’group of individuals associated in
fact.’" United States v. Navarro-Ordas, 770 F.2d 959, 969

6
n.19 (1 lth Cir. 1985); see also UnitedStates v. GoldinIndus., 219 F.3d 1271, 1277-78(llth Cir. 2000). Whilethat binding precedent precluded Mohawfkrom arguing that the district court or panel overrule Navarro-Ordasand Goldin, Mohawk preserved the overarchingissue of whetherplaintiffs had pled a legally cognizable R/COenterprise:
In any event, plaintiffs’ point misses the markentirely because Mohawdkid explicitly raise the foreclosed § 1961(4) argument both before the panel and the entire Eleventh Circuit. Mohawkspecifically asserted that "the supposed ’association-in-fact’ enterprise of Mohawaknd its recruiters does not satisfy 18 U.S.C. § 1961(4), which defines ’association-in-fact enterprise’ as ’a group of individuals associated in fact’--not a group of corporations.’’6 Following a ruling by the panel on remand, Mohawakgain specifically sought rehearing en bane on this issue and urged the Eleventh Circuit to grant rehearing in order to reconsider NavarroOrdasand Goldin en bane. See Pet. App. 81a-84a.
Even if Mohawkhad not raised the argument before the Eleventh Circuit (which it had), Mohawk’sconsistent pressing of the issue of whether plaintiffs pled a legally cognizable enterprise fully preserved all arguments supporting that issue. See Stern &Gressman,SupremeCourt Practice § 6.26, at 421 (8th ed. 2002) ("Although the Court
5 See MedlmmuneIn, c. v. Genentech, Inc., 127 S. Ct. 764, 770 (2007)
(recognizing that failure to raise "precluded"argumentsabout a claim did "not suggest a waiver," but rather "counsel’s sound assessment that the argument wouldbe futile"). Even if Mohawhkad not pressed this issue below(whichit did), the EleventhCircuit certainly passed uponthe issue, relying uponGoldin to hold that RICOrequired only "’an association of individual entities.’" Pet. App.7a-8a (quoting Goldin, 219F.3d at 1275). See Lebron v. National R.R., 513 U.S. 374, 379 (1995) ("Our practice permit[s] review of an issue not pressed so long as it has been passed upon." (internal quotation marksomitted)).
6MohawkSupp. Br. 20 n.15 (llth Cir. filed Aug. 18, 2006) (recognizing that though "this panel maybe boundby Navarro-Ordas... Mohawbkelieves that Navarro-Ordasshould be reconsidered en banc").

7
generally declines to review issues not pressed or passed upon by the lower courts, it has allowed petitioners to makenew argumentsi7n support of claims properly presented below."). Parties need not "demandoverruling of a squarely applicable, recent circuit precedent"to preserve issues for appeal to this Court. UnitedStates v. Williams, 5804 U.S. 36, 44 (1992).
Plaintiffs’ contrary assertion that "Mohawisk still boundby the affirmative concessions it made in the lower courts" misstates both the law and the facts. Opp. 11. As to the law, respondent’s argumentmisunderstandsthe doctrine of judicial estoppel. That doctrine only applies where the a party has "prevail[ed] in one phase of a case on an argumentand then rel[ied] on a contradictory argumentto prevail in another phase." NewHampshirev. Maine, 532 U.S. 742, 749 (2001) (emphasis added) (internal quotation marks omitted). Mohawckertainly did not "prevail" before either the district court or the court of appeals. Nor were Mohawk’statements "clearly inconsistent" with the position that binding precedent
7 See also Yee v. City of Eseondido,503 U.S. 519, 534 (1992) ("Once
federal claim is properly presented, a party can makeany argument in supportof that claim; parties are not limited to the precise argumentsthey madebelow."); Lebron, 513 U.S. at 378-79(explaining "traditional rule" is to permit parties whohave preserved claims before the lower courts to raise "new argument[s] to support ... [those] consistent claim[s]" and holding that argument that Amtrak was a government entity, which petitioner had "expressly disavowed"before district court and court of appeals, was nonetheless preserved because it was not "a newclaim" but "a new argument"in support of claim that Amtrakwas obliged to afford petitioner First Amendmernitghts).
8 In fact, the correct interpretation of a statute is a question that will
alwaysbe passed uponby a court applying that statute. See United States Nat’l Bankof Ore. v. IndependentIns. Agents of Am., 508 U.S. 439, 44647 (1993) ("[w]henan issue or claim is properly before the court, the court is not limited to the particular legal theories advancedby the parties, but rather retains the independent power to identify and apply the proper construction of governinglaw" (intemal quotation marksomitted)).

8
permittinga corporationto be a membeorf an association-infact enterpriseshouldbe overruled.Id. a9t 750.
This Courthas not even found estoppel in circumstances where a party failed to raise the argumentbelow (which Mohawdkid not fail to do here by specifically raising the issue of overruling binding precedentin the court below). Thus, in PGATour, Inc. v. Martin, 532 U.S. 661 (2001), the petitionerarguedbeforethe district courtandcourtof appeals that it was not providingpublic accommodationssubject to the AmericansWithDisabilities Act ("ADA").See id. at 678. Beforethis Court, however,petitioner "reframe[d]"its argumentto contendthat the plaintiffs werenot memberosf a
9 Instead, each of the three statements cited by plaintiffs (Opp. 9-10 n.29) merelyrespondedto plaintiffs’ argumentsthat accepting the Seventh Circuit’s reasoning in Baker wouldnecessarily conflict with the Eleventh Circuit’s holding in Goldin that a group of corporations could be an association-in-fact enterprise. Mohawk’sresponse was to press the invalidity of the alleged enterprise by makingargumentsdistinguishing Goldin (which was binding). As Mohawkacknowledged,"current law ... requires that to sufficiently allege a RICOenterprise, a plaintiff must allege that the enterprise is comprisedof a corporation and a separate, independentthird party." Br. of Appellant 12-13 (emphasis added) (cited in Opp.10n.29). Thus, whenplaintiffs arguedto the district court that the "allegations are sufficient because a corporation maybe both the RICO ’person,’ i.e., the defendant,and part of an association in fact enterprise," Opp. to Mot. to Dismiss 7 (N.D. Ga. filed Mar. 9, 2004) (citing Goldin, 219F.3d at 1275-76.), Mohawekxplained that it agreed with plaintiffs’ contention that under Eleventh Circuit law "a corporation can be both a RICOperson and part of an association-in-fact enterprise," but that this was beside the point because "it is the RICOenterprise, not the employer, that must be operated through a pattern of racketeering activities," Reply in Supp. of Mot.to Dismiss4-5 (N.D. Ga. filed Mar. 30, 2004~. Likewise, before the panel, Mohawrkesponded to the argument that "Baker is ... inconsistent with this Court’s precedents," by stating that "nothing in Mohawk’srule" that it urged uponthe panel wouldbe inconsistent with Goldin. MohawkReply 10-11 &n.8 (1 lth Cir. filed Nov. 5, 2004). Far from "advocat[ing]" the status quo, Opp. 11 n.32, these excerpts demonstrate nothing more than Mohawk’srecognition of the settled circuit law that boundthe district court andthe panel.

9
protected class under the ADA.Id. Despite petitioner’s "failure to make this exact argument below," this Court held that it had preserved the underlying issue of whether the ADA applied, and considered the argument. See id. at 678 n.27.10
In short, no obstacles prevent this Court’s review of the significant enterprise question presented. As the U.S. Chamberof Commerceas amicus curiae notes (Br. 3-4), this case presents a rare opportunity to correct a fundamental misinterpretation of RICO’s enterprise requirement because the issue is seldom raised in light of the uniformity of contrary authority. Without correction, plaintiffs will continue to file suits based upon legally flawed enterprises and extract unwarranted, unreviewable settlements. 11
3. Finally, plaintiffs do not (and could not) deny that the circuit courts are divided in two significant ways over the construction of RICO’s limitation of civil standing to plaintiffs "injured in [their] business or property." 18 U.S.C. § 1964(c). See Pet. 24-28. Plaintiffs concede that the Seventh Circuit’s decision in Evans v. City of Chicago, 434 F.3d 916 (7th Cir. 2006) creates a circuit split with other courts readily finding lost wages to be a RICOinjury. See Opp. 18 n.55. Plaintiffs, however, assert that the split is not
10 Plaintiffs rely (Opp.11nn. 33&34) uponentirely inappositecases
wherethis Court declined to consider an argumentbecauseit wasnot fairly comprisedin the questionpresented.Here,howevert,he § 1961(4) argumentis squarely within the question presented of "[w]hether a corporation and its agents can constitute an association-in-fact RICO enterprise." See Pet. i, 20-23. Plaintiffs also wronglyassert that Mohawkc’sounsel "concededMohawkf’asilure to preserve the issue" at oral argument.Opp.10. Tothe contrary, Mohawkc’sounsel stated that the § 1961(4)questionwasa "logically prior question"that was"fairly subsumedwithin the question presented" as it wasthen phrasedin the prinorInpdeteietido,np.laTinr.tiOffrsa’lArersgp.aotn7se,is10t,elNlion.g0.5-E4v6e5(nUth.Sou.Aghptrh.2ei6r, 2R0I0C6Oc)l.aim
is fundamentally and incurably flawed, plaintiffs assert their "entitle[ment] to seek leave to amendtheir allegations" (Opp. 21), undoubtedliyn the hopethat in discoverya settlementcouldbe extracted.

10
implicated here because Evans "agree[d] with the Eleventh Circuit’s analysis," (id. at 19) in that Evansrecognized an interest in business or property where a plaintiff could establish "a property right in promised or contracted for wages." Evans, 434 F.3d at 928. But plaintiffs here do not allege that they weredeprived of "promisedor contracted for wages." Plaintiffs received exactly the wagesfor whichthey bargained. Thus, the Seventh Circuit’s recognition of "promised or contracted for" wages is fundamentally at odds with the Eleventh Circuit’s unbridled holding that plaintiffs had "a legal entitlement to business relations unhamperedby schemes prohibited by the RICOpredicate statutes." Pet. App.13a (internal quotation marksomitted).
Resolvingthe specific split over lost wagesalso affords the opportunity to resolve the underlying split over the meaning of"property" in RICO’scivil standing provision. Pet. 25-27. Plaintiffs do not contest this split (Opp.19-20), but note that the court belowrested its decision on a "business" interest (Opp. 20). But the finding of a "business" interest quoted verbatim from the Ninth Circuit’s finding of a "property" interest on similar facts. Pet. App. 13a (citing Mendozav. Zirkle Fruit Co., 301 F.3d 1163, 1168 n.4 (9th Cir. 2002)). Moreimportantly, determining whether a claim for depressed wages supports civil RICOstanding gives this Court the opportunity to give meaningto both the term "property" and the term"business," as those termsare usedin § 1964(c).
CONCLUSION
For the foregoing reasons and those stated in the petition, the petition for a writ of certiorari shouldbe granted.
t2 Thereis no merit to plaintiffs’ argumentthat this Court shoulddeny review because this case involves an interlocutory order. Opp. 20-22. This Court regularly reviews § 1292(b) appeals because they reflect the judgmentof the district and circuit courts that a case presents important questions that mayspare the courts and the parties undueexpense. None of the "interlocutory" cases plaintiffs cite involves a § 1292(b)appeal.

Respectfully submitted,

February6,2007

CARTEGR. PHILLIPS*
JUAN P. MORILLO STEVEN T. COTTREAU MATTHEWJ. WARREN SlDLEY AUSTIN LLP
1501 K Street, NW Washington, DC20005 (202) 736-8000
Counselfor Petitioner
* Counsel of Record

BLANK PAGE

 
 No. 06-873
Sn
SuprrmCr ourtof thr

MOHAWKINDUSTRIES,
V.

INC., Petitioner,

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES, and LORASISSON, Individually and on behalf of a class,
Respondents.

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

HOWARDFOSTER JOHNSON& BELL, LTD. 33 West Monroe Street Suite 2700 Chicago, Illinois 60603 (312) 372-0770
BOBBYLEE COOK COOK & CONNELLY 9899 Commerce Street P.O. Box 370 Summerville, Georgia 30747 (706) 857-3421

JOHN E. FLOYD* JOSHUAF. THORPE RONANP. DOHERTY NICOLEG. IANNARONE BONDURANTM, IXSON
& ELMORE,LLP 3900 One Atlantic Station 1201 W. Peachtree Street, N.W. Atlanta, Georgia 30309 (404) 881-4100
Counsel for Respondents

MATTHEWTHAMES GODDARDT, HAMES,
HAMMONTRE8E~ BOLDING 2716 Cleveland Highway
P.O. Box 399 Dalton, Georgia 30722-0399 (706) 278-0464

January 22, 2007

*Counsel of Record

COCKLE LAWBRIEF PRINTING CO. (800) 225-6964 OR CALL COLLECT(402) 342-2831

BLANK PAGE

TABLE OF CONTENTS

Page

TABLOEFCONTEN...T..S...........................................

i

TABLOEFAUTHORIT..I.E...S.....................................

ii

INTRODUC...T..I..O...N................................................

1

REASONSFOR DENYINGTHE PETITION ...............

1

I. The Court Need Not Grant Certiorari To

Review Last Term’s Decision in Anza v. Ideal

Steel SupplyCorporatio.n..................................

2

A. The Eleventh Circuit Faithfully and Cor-

rectly AppliedAnza.....................................

3

B. There Is NoCircuit Split Over Anza ...........

7

II. The Court Has Already Concluded It Would Be a Mistake to Review the Enterprise Questions

Presentedin MohawkP’setition ........................

9

A. The Circuit Courts Have Unanimously

Confirmed That Corporations Can Be

Members of Association-in-Fact

Enter-

prises............................................................

12

B, Cedric Kushner Resolved Any Division of

Authority Over Whether a Corporation

and its Legally Distinct Agents Can Form

a RICOEnterprise.......................................

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

InterlocutoryOrder............................................

20

CONCLU..S..I..O..N.......................................................

22

ii

TABLE OF AUTHORITIES Page

CASES

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

(1995..).............................................................................

7

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

148U.S.372(1893.)......................................................

21

Am. Nat’l Bank & Trust Co. v. Haroco, Inc., 473 U.S.606(1985.)..............................................................
Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006.).....................................................................

11 passim

Associated General Contractors v. California State

Councilof Carpenters,459 U.S. 519 (1983)....................

6

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

986(8thCir. 1989.)....................................................

13, 14

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

Boardof Regents v. Roth, 408 U.S. 564 (1972)... .............. 19

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

923(7thCir. 2003.)........................................................

16

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

158(2001.)....................................................

13,14, 15,

Copperweld Corp. v. Independence Tube Corp., 467

U.S.752(1984.)........................................................

15, 16

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

DeCanavs. Bica, 424U.S. 351(1976)............................

5, 6

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

iii

TABLE OF AUTHORITIES - Continued

Page

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

507(1950.).....................................................................

21

Doev. Roe, 958F.2d 763(7th Cir. 1992)...........................

18

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

Cir.2005.)......................................................................

17

Estelle v. Gamble4,29U.S. 97(1976)...............................

21

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

2006.)..................................................................

17,18,19

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

1998.).............................................................................

15

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

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

9

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

2007..).............................................................................

11

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

U.S.251(1916.).............................................................

21

Hoffman Plastic Compounds, Inc. v. NLRB, 535

U.S.137(2002.)...............................................................

6

Holmevs. SIPC,503U.S. 258(1992).................................

6

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

F.3d396(7thCir. 2006)...................................................

8

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

Co., 431F.3d353(9th Cir. 2005)..............................

16, 17

McCrayv. NewYork Fruit Co., 461 U.S. 961 (1983) .......... 9

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

2002..)..............................................................................

7

iv

TABLE OF AUTHORITIES - Continued Page

MohawkIndustries, Inc. v. Williams, 126 S. Ct.

2016(2006.)..............................................................

1, 2, 9

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

(Jan.10,2007.)...............................................................

11

NOWv. Scheidler, 510U.S. 249(1994).............................

11

Reiter v. SonotoneCorp., 442 U.S. 330 (1979) ..................

18

Riverwoods Chappaqua Corp. v. Marine Midland Bank,N~A.,30 F.3d 339 (2d Cir. 1994)....................
Rossv. Moffitt, 417U.S.600(1974).................................... Sure-Tan,Inc. v. NLRB4, 67 U.S. 883(1984) .....................

15, 16 4 6

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

Cir.2005.)........................................................................

7

Trollinger v. Tyson Foods, Inc., No. 4:02-CV-23, 2006WL2868980(E.D. Tenn. Sept. 29, 2006) ........... 7, 8

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

1993..)............................................................................

13

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

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

1988..)............................................................................

15

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

Cir.2000..).....................................................................

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 (lst Cir. 1995..)...................... ................................................. 12, 15

United States v. Masters, 924 F.2d 1362 (7th Cir.

1991..)............................................................................

12

v

TABLE OF AUTHORITIES - Continued
United States v. Perholtz, 842 F.2d 343 (D.C. Cir. 1998.).............................................................................
United States v. Thevis, 665 F.2d 616 (5th Cir. 1982..)............................................................................

Page 13 13

STATUTES AND REGULATIONS

18U.S.C§. 1961(4.)...................................................... 18U.S.C§. 1962(c.)................................................ 18U.S.C§. 1964(c.)....................................................

9, 12 11, 13, 14
passim

20C.F.R§. 656.24(b)(3..).....................................................

5

RULES

Fed.R.Civ.Proc.15(a)......................................................

21

SupC. t.Rule10..................................................................

1

TREATISES

Robert L. Stern & Eugene Grossman, Supreme CourtPractice§ 4.17 at 256(8th ed. 2002).....................
David B. Smith & Terrance G. Reed, Civil RICO, 10.0411(2]006.)..........................................................

4 5, 18

SCHOLARLY AUTHORITIES

John Paul Stevens, Some Thoughts on Judicial

Restraint, 66 Judicature177(1982)...............................

9

INTRODUCTION
This is MohawkIndustries, 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.
REASONS FOR DENYING THE PETITION
The Petition argues that the Eleventh Circuit’s decision in Williams v. MohawkIndustries, Inc., 465 F.3d 1277 (llth Cir. 2006) ("Williams II") 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’sprior Petition, in Case No. 05-465, raised virtually all of the substantive issues that Mohawk now presses in this second Petition. Although Mohawkframes 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 Mohawkraised in its initial Petition. 1 Similarly, 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.2 And although Mohawkhas 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 Petition. ~ 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 Review 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
1 ComparPeetition for a Writof Certiorari at 18-23(No. 05-465) (hereinafter"2005Pet.") (plaintifffs failed to pleada direct andproximateinjury to businessor property)withPetition for a Writof Certiorari at 10-16 (No. 06-873)(hereinafter "Petition" or "Pet.") (same argumentunder Anza).
Compar2e005Pet. at 10-18(seekingcertiorari to reviewwhether corporationsand their agents mayforman association in fact enterprise) andBr. of Pet, at 12-26, MohawIkndus., Inc. v. Williams, 126 S. Ct. 2016,2006WL282167(2006)(No. 05-465)(arguingthat corporations cannotbe memberosf association-in-factenterprises) withPet. at 16-24(reciting the sametwoarguments).
s Compar2e005Petition at 19-21(arguing that wagedepression cannotqualify as an injury to businessor property)with Pet. at 24-28 (same argument).

correct the alleged misapplication of a properly stated rule of law, Mohawkcontends that Williams H 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, Mohawkis wrong on both counts.
A. The Eleventh Circuit Faithfully and Correctly Applied Anza.
The Petition contends the Eleventh Circuit thumbed its nose at this Court’s direction to further consider Williams v. MohawkIndustries, Inc., 411 F.3d 1252 (11th Cir. 2005) ("Williams I’) in light of AnzaJ Even though WilZiams II cites Anza more than ten times, 5 Mohawkcontends the court of appeals "ignored" Anza’s central holding "that RICOcivil plaintiffs must plead an injury directly caused by the RICOpredicate acts and not by another ’set of actions ... entirely distinct from the alleged RICO violation. ’’8 Mohawkfurther claims that the Eleventh Circuit ignored Anza’s holding that the "central question" in evaluating a RICOplaintiff’s allegations of injury is %vhether the alleged RICOviolation led directly to the plaintiff’s injuries. ’7 But Williams H 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
4 See, e.g., Pet. at 16(EleventhCircuit"fail [ed] to heedAnzain the wakeof this Court’sexplicit instructionto doso").
5 See WilliamsH, Pet. App.at 14a-21a.
Pet. at 3. 7 Id. at 12.

4
injurious conduct in order to show proximate cause. ’~ The court of appeals then went on to examine the list of additional "motivating principle[s]" precisely as Anza instructs.9
As the losing party below, Mohawkobviously takes great issue with the Eleventh Circuit’s conclusion in this case. But given the court of appeals’ extensive and accurate quotation of Anza, there can be no genuine controversy over whether Williams H properly states the rule of law announced in Anza. Accordingly, even if Mohawkwere 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. "1° 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. Andin 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
8 W~lliamHs , Pet. App.at 14a-15a. 9 Id. at 15a-16a.Mohawks’usggestionthat WilliamsHdefies Anza by referring to the Respondents’allegation that Mohawikntended to injure themrefers to the EleventhCircuiFsstandinganalysis, not its proximatecauseanalysis underAnza.See Pet. at 14. ~0 Robert L. Stern &EugeneGrossman,SupremeCourt Practice § 4.17at 256(8th ed. 2002).

authority did not cause a third party any injury cognizable under RICO1. 1 As the Court observed, the State - not the defendant’s competitor - was the direct victim of this misconduct. 12 As a result, the Anza Court held the plaintiff could not recover damages for lost sales due to the defendant’s decision to lower the prices it charged its customers. 13
As Williams H explains, the claims here are very different because the plaintiffs do not seek to recover damages for fraud (or any other misconduct) directed other parties." Rather, the plaintiffs allege they are the direct victims of Mohawk’sillegal hiring and other racketeering activity, which directly and unlawfully expands the pool of labor available to Mohawkand depresses the wages Mohawkpays all its employees. 15 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. 16 Andthis Court’s precedents repeatedly
1~ See Anza, 126 S. Ct. at 1997.
~Id.
13 Id.
Williams H, Pet. App. at 16a-21a. See, e.g., Compl. ~ 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) ("Illegal 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 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 w17orkers.
To better fit Anza’s mold, the Petition mischaracterizes the Complaint to allege an injury passed on from one category of employees to another, is This distortion - which must be rejected on a motion to dismiss - actually underscores 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 purposes. ~9 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 weakbargaining position cause [undocumented workers] to depress U.S. wages and working conditions"). Indeed, it is for this reason that the Departmentof Labor mustcertify 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)(3).
1~ See DeCanavs. Bica, 424 U.S. 351, 356-57(1976) (~acceptance illegal aliens of jobs on substandard terms as to wages and working conditions can seriously depress wagescales and workingconditions of citizens and legally admitted aliens"); Sure-Tan,Inc. v. NLRB,467U.S. 883, 893 (1984); Hoffrnan Plastic Compounds,Inc. v. NLRB,535 U.S. 137, 147 (2002).
~8 See Pet. at 12-13 (arguing that the plaintiffs’ injuries are
derivative of conduct that Mohawdkirects 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 RICOviolation can be expected to vindicate their laws by pursuing their ownclaims."); Holmes,503U.S. at 273. See also Associated GeneralContractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 541 (1983) (identifying alternative plaintiffs with more direct claims). ComparePet. at 15 n.10 (arguing that the lack of any direct victim is irrelevant under Anza).

7
context of similar illegal hiring allegations reached the v2e°ry same conclusion.
Although Mohawkargues that Williams H defies this Court’s June 5, 2006 GVRorder, the Court did not direct the Eleventh Circuit to dismiss the Complaint. The Court has explained that a GVRis appropriate when it is "not certain that the case [is] free from all obstacles to reversal on [the] intervening precedent. "21 Such an order merely indicates that the Court believes the intervening precedent is "sufficiently analogous and, perhaps, decisive to compel reexamination of the case. "22 As a result, the Court’s GVRis 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 II 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 both concluded that allegations of hiring large numbers of undocumented workers are not "entirely
so See Trollinger v. TysonFoods,Inc., No. 4:02-CV-23,2006WL 2868980(E.D. TennSept. 29, 2006)(declining to certify an interlocutory appeal after denyingthe defendants’ motionfor judgmenton the pleadingsbasedon Anza). AccordTrollinger v. TysonFoods,Inc., 370 F.3d 602, 619 (6th Cir. 2004) (pre-Anza case upholding the same allegations of proximatecause); Mendozva. Zirkle Fruit Co., 301F.3d 1163,1172(9th Cir. 2002)(same).
21 AdarandConstructors,Inc. v. Pena,515U.S. 200,222-23(1995). 22 UnitedStates v. Vanorden,414 F.3d 1321, 1327n.4 (llth Cir. 2005)(citing Henryv. City of RockHill, 376U.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 H 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 RICOdamages for lost profits on bids it allegedly failed to win as a result of a bid-rigging scheme that targeted a third party, the Wisconsin Department of Transportation. ~4 That scheme directly injured the Department, 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, Mohawkhas merely identified two different sets of facts for which Anza compels two different results. Even ff Mohawk(incorrectly) 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 i~s6sue that typically concerns this Court.
23 See W~lliams H, Pet. App. at 14a-21a; Trollinger v. Tyson Foods, Inc., No. 4:02-CV-23, 2006 WL2868980, 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. ~Id. ~ See, e.g., United States v. Johnston, 268 U.S. 220, 227 (1925) (’Wee 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 Mohawkfull briefing and oral argument on all the enterprise issues collected under the second Question Presented in Mohawk’s Petition. But rather than reach the merits of those questions, the Court dismissed the writ as improvidently granted/7 That ruling came after the Court discovered Mohawkhad 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.

Mohawkfirst 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, Mohawkagrees that a

corporation can be both a RICO person and part of

facts."); McCrayv. NewYork, 461 U.S. 961, 963 (1983) (denying certiorari because the question required further study in the lower courts); Gilliard v. Mississippi, 464U.S. 867, 869(1983)(indicating that certiorari wasdenied because a majority believed SupremeCourt reviewshouldbe deferred until "morestate supremecourts and federal
circuits have experimented"with the problem)(Marshall, J., dissenting). See also John Paul Stevens, SomeThoughtson Judicial Restraint, 66 Judicature 177, 183 (1982) ("The doctrine of judicial restraint teaches us that patience in the judicial resolution of conflicts may sometimepsroducethe mostdesirable result.").
27 Mohawk1,26 S Ct. at 2016.

10

an association-in-fact

enterprise[.] "28 And Mohawk

subsequently informed the Eleventh Circuit that its

arguments were perfectly consistent with RICOliability for corporations that participated in the affairs of an

association-in-fact enterprise:

Indeed, nothing in Mohawk’s rule would affect the RICOliability of a corporation that
truly participates in some larger association of corporations or (non-agent) individuals by engaging in racketeering activities on the ent2esrprise’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 argument. 3° In response, Mohawk’scounsel conceded Mohawk’s

failure to preserve the issue and urged the Court to overlook that defect in its appeal. 31 But after devoting

substantial time to hearing the case, the Court declined to

reach the merits of Mohawk’senterprise arguments in this

case.

28 See MohawDkist. Ct. ReplyBr. at 5 (emphasisadded)[Dist. Ct.
Dkt.No.43]. 2~ Mohawkl’lsth Cir. ReplyBrief at 11 n.8 (filed Nov.5, 2004)
(emphasisadded).See also Mohawkl’lsth Cir. Br. at 12-13(filed Sept. 7, 2004)("This [plaintiff’s theory] wouldbe a substantial departure from current law, whichrequires that to sufficiently allege a RICOenterprise, a plaintiff must allege that the enterprise is comprised of a corporation and a separate, independent third party.") (emphasisadded).
SeeTr. OralArg.at 5-10(No.05-465()Apr.26, 2006). 8~ Id. at 10 (suggesting that Mohawwkaivedthe argumentbecause
"currentlawin the EleventhCircuitlaw"renderedit "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, a~ And this Court still does not consider as3rguments 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 t3h4e 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
B2 Mohawk’sattempt to resurrect its enterprise arguments by seeking an en banc review of the Eleventh Circuit precedents that led Mohawtko concede a corporation can be a memberof an association-infact enterprise, see Pet. App. at 81a-83a, is too little too late. Neither Mohawk’sen 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 advocatedfor two years in the district court and the court of appeals.
See, e.g., NOWv. Scheidler, 510U.S. 249, 262(1994) (refusing consider a constitutional challenge to RICOthat the defendant failed to raise below); Am. Nat’l Bank& Trust Co. v. Haroco,Inc., 473 U.S. 606, 608 (1985) (refusing to consider unpreserved argument that complaintfailed to allege a violation of 18 U.S.C. § 1962(c)).
Gonzales v. Duenas-Alvarez, 127 S. Ct. ,2007 WL98723, at *8 (Jan. 17, 2007)(’~Regardless, the lower court did not consider the claims and we decline to reach themin the first instance") (collecting authorities); Norfolk Southern Ry. Co. v. Sorrells, 127 S. Ct. , 2007 WL 57176(Jan. 10, 2007) (rejecting a petitioner’s attempt to "smuggle" 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 ff it did.
A. The Circuit Courts Have Unanimously Confirmed That Corporations Can Be Members of Association-in-Fact Enterprises.
On the merits, Mohawk urges the Court to grant certiorari and hold that corporations cannot be membersof association-in-fact enterprises as a matter of law. 35 At oral argument last Term and again in the Petition, Mohawk concedes that the circuit courts have unanimously rejected this argument.38 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. "37 And although Mohawkclaims that all the
~5SeePet. at 20-24.
See Tr. Oral Arg. at 5-6 (No. 05-465)(Apr. 26, 2006)(Justice Scahaobservingthat 10 federal circuits have concludedcorporations can be memberosf association-in-fact enterprises and that the Court wouldhave been unlikely to grant certiorari to reviewthat question standing alone); Id. (Mohawk’csounselacknowledgintghe lack of any split of authority and the unlikelihoodof SupremCe ourtreview). Pet. at 20-22 (acknowledgingthat the federal courts have universally rejected Mohawka’sntecedententerprise argument).
UnitedStates v. Huber6, 03F.2d 387,394(2d Cir. 1979).See also UnitedStates v. Masters,924F.2d 1362, 1366(7th Cir. 1991); United States v. London6, 6F.3d1227,1243-44(lst Cir. 1995)(citing extensive authority); UnitedStates v. Console,13F.3d 641, 652(3d Cir. 1993);
(Continuedon followingpage)

13
circuit courts have made a grave error that perniciously e’~x8tends 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 government’s ability to enforce the statute’s substantive provisions and to obtain effective remedies. "39 The Court should not grant certiorari to reconsider a statutory construction that has been well-settled for decades only to make nonsense of the statute and render RICOuseless to government 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, Mohawkurges the Court to resolve a "deep[ening]" and "wid[ening]" circuit split over whether a corporation and its legally distinct, non-employee agents can form an association-in-fact enterprise. 4° 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
UnitedStates v. Blinder, 10F.3d 1468,1473(9th Cir. 1993);Atlas Pile DrivingCo. v. DiConFin. Co., 886F.2d 986, 995n.7 (Sth Cir. 1989); UnitedStates v. Perholtz, 842F.2d 343, 352-53(D.C.Cir. 1988);United States v. Thevis,665F.2d616,625(5th Cir. 1988).
s8 Pet. at 22. ~9Br. for the UnitedStates as AmicuCs uriaeat 16(05-465). 4oPet. at 16-18.

14
distinctness between the defendant and the RICOenterprise. In Cedric Kushner, the complaint named a corporation as the enterprise and the corporation’s president as the defendant. Because the defendant was also the corporation’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 responsibilities due to its different legal status. And we van find nothing in the statute that requires m4~ore "separateness" than that.
Even though the owner/employee was clearly a corporate agent, alleged to be acting in furtherance of the corporation’s interests, this Court held that the defendant and his corporation were separate enough to satisfy § 1962(c)’s i4m2plied distinctness requirement.
4~CedricKushner5, 33U.S. at 163(emphasisadded).
~ In Cedric Kushner,the corporation wasthe enterprise, not a membeorf a larger association in fact. But including the RICOperson in a broaderassociation in fact enterprise is entirely consistent with Kushnefsdistinctness analysis because"[a] collective entity is something morethan the membersof whichit is comprised."Atlas Pile Driving,886F.2d at 995(concludingthat a corporationcan be the RICO defendantas well as a membeorf a larger association in fact enterprise). See also UnitedStates v. GoldinIndus., 219F.3d 1271, 1276 (llth Cir. 2000) ("To find that a defendant cannot part of the enterprise would underminethe purposes of the RICOstatute");
(Continuedon followingpage)

........................

I

15
Mohawk argues that there is a split between the circuits that have (1) adopted a "distinct entities" test accordance with Cedric Kushner and (2) rejected 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. ’~3 With only two exceptions, the cases Mohawkcites to support the second half of this purported split pre-date Cedric Kushner. And without exception, those rulings rely on theories the Cedric Kushner C~ ourt 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. 45 The Court similarly held that Copperweld Corp, v. Independence Tube Corp., 467 U.S. 752 (1984), Sherman Act case holding that a corporation cannot conspire with a wholly-owned subsidiary, has no application to RICO4. 6 Accordingly, while the Court’s opinion noted and distinguished many of the cases that Mohawk now
London,66 F.3d at 1243;UnitedStates v. Feldman,853 F.2d 648, 658 (9th Cir. 1988);Cullenv. Margiotta,811F.2d698,729-30(2d Cir, 1987).
SeePet. at 18. 44SeeResp.Br. at 44-50(05-465). 45 CompareKushner,533 U.S. at 166-67with RiverwoodsChappaqua Corp. v. MarineMidlandBank, N.A., 30 F.3d 339, 344 (2d Cir. 1994)("Becausea corporation can only function throughits employees and agents, any act of the corporationcan be viewedas an act of such an enterprise."). "~ ComparCe edricKushner,533U.S. at 166(Copperweld"doctrine turns onspecific antitrust objectives")withFitzgeraldv. ChryslerCorp., 116F.3d225, 228(7th Cir. 1998)(citing Copperwefldor propositionthat Chrysler and its wholly-ownedistributors could not be held liable under RICO).

16
recites in its petition, Cedric Kushner’s analysis dismant4l7es 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 RICOcase. Because both Bucklew and Baker fail to acknowledge Cedric Kushner and instead apply Copperweld despite Cedric Kushner’s c4o8ntrary 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 Mohawkcontends 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. 49 But Mohawkcited
" Whilethe UnitedStates tookno positionon this particular point, the governmentdid oppose Mohawkon the merits and argued that Mohawk’rseference to the Riverwoodsline of cases wasa "nonsequitur" in this case. SeeU.S.AmicuBs r. at 27-30(No.05-465).
See Bucklew,329F.3d at 934(citing Copperwelfdor the proposition that "Aparent and its wholly ownedsubsidiaries no morehave sufficient distinctnessto trigger RICOhability thanto trigger liability for conspiringin violation of the ShermaAn ct");Baker,357F.3d at 691 (citingBucklew).
SeePet. at 18.

17
Living Designs, t5o° 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. 51 Accordingly, there has been no material change in the circuit courts with respect to the enterprise question the Court dismissed in June 2006. And Mohawkcan offer the Court no reason to reinstate certiorari to take up the very same question it declined to reach - in either this case or Living Designs - last Term.
III. The Petition’s "Business or Property" Questions Are Not Presented in this Case.
In its third Question Presented, Mohawkurges 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 RICOsuits to recover lost wages, but claims the Seventh Circuit created a circuit split on this question with its decision in Evans v. City of Chicago, 434 F.3d 916, 925 (7th Cir. 2006). 55 What the
~oSeeBr. of Pet. at 31, 35(Feb.2, 2005)(No.05-465). 51 See E.L Dupontde Nemours&Co. v. Living Designs, Inc., 126 S. Ct. 2861(June12, 2006). ~2SeePet. at 24-25.

18
Petition does not confess, is that Evans expressly distinguishes 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.53 The same limitation applies to private antitrust suits seeking damages for injuries to "business or property" under Section 4 of the Clayton Act, on which 18 U.S.C. § 1964(c) is modeled. 54 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 .55
~ Evans, 434 F.3d at 926 (collecting cases); Doev. Roe, 958 F.2d 763, 767(7th Cir. 1992)(’2~ot surprisingly, all other courts construing this language have likewise concluded that a civil RICOaction cannot be premised solely upon personal or emotional injuries") (collecting authorities) see also, DavidB. Smith and Torrance G. Reed, Civil RICO, 10.0411] (CompensableInjuries) (2006) ("One proposition about 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 section 4~) (internal quotations omitted).
See Reiter v. SonotoneCorp., 442U.S. 330, 339-40(1979). 55 To be sure, Evansnoted a disagreement with Diaz vo Gates, 470
F.3d 897(9th Cir. 2005)(en banc), cert. denied, 126S. Ct. 1069(2006), but that concerned (1) whether incomelost to false imprisonmentwas 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. "58 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. MohawkIndustries, Inc., 411 F.3d 1252, 1260 (llth Cir. 2005)Y
Given the Evans court’s apparent agreement with the Eleventh Circuit’s analysis in Williams I, which is repeated verbatim in Williams H, there is no circuit split for the Court to resolve here.
Mohawkalso 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. ~8 But whatever the merits or consequences of
here because the Respondentsdo not allege false imprisonmentor personalinjury.
66Evans,434F.3dat 928.
57 /d.
6aEven in the takings jurisprudence that Mohawkimproperly seeks to import here, this Court has held that "property" under the Fourteenth Amendmecnatn be defined by any source, including state law. See Boardof Regentsvo Roth,408U.S.564, 577(1972).

2O
this debate, it was neither considered nor resolved in Williams H. 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 a5lsleged RICOviolations.
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 Interlocutory 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. 6° Ultimately, the question of whether Mohawk’s
59 Pet. App.at 12a. ThePetition misrepresentsthe Complaintby suggestingthe Respondentaslleged only an injury to property. SeePet. at 24. In fact, the Complaintalleges the Respondentsand the class havesufferedan injury to bothbusinessand property.Pet. App.at 103a (Comp~l.I 86).
60 See WilliamsII, Pet. App.at 9a ("Whateverdifficulties the plaintiffs mayhavein provingsuchan allegation, theyhavesufficiently alleged that Mohawiks engagedin the operation or managemenotf the enterprise."); id. at 21a("Althougthhe plaintiffs’ evidencein this case may not ultimately prove the proximate-cause requirement, we
(Continuedon followingpage)

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, w"6h1enjustice so requires.

which "should be freely given

For these and other similar reasons, this Court traditionally has preferred to grant the writ to review final rather than interlocutory orders. °2 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. "Ss 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. "64 Allowing this case to proceed to

concludethat the plaintiffs’ complaintstates a sufficiently direct relation betweentheir alleged injury and Mohawk’aslleged unlawful predicate acts to withstandMohawkm’sotionto dismiss.").
61Fed.R. Civ.P. 15(a).
Estelle v. Gamble4, 29 U.S. 97, 115(1976)(the Court’s "normal practiceis to deny[] interlocutoryreview")(Stevens,J., dissenting).
68 Hamilton-BrowSnhoeCo. v. Wolf Bros. &Co., 240U.S. 251, 258
(1916). See also GiUespiev. UnitedStates Steel Corp., 379 U.S. 148, 152-53(1964).
e4 Am.Constr. Co. v. Jacksonville, T &K.W.Ry. Co., 148U.S. 372, 384(1893) (emphasisadded). See also Dickinsonv. PetroleumConversion Corp.,338U.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’ssecond Petition for certiorari in this interlocutory appeal.

Respectfully submitted,

HOWARDFOSTER JOHNSON& BELL, LTD. 33 West Monroe Street Suite 2700 Chicago, Illinois 60603 (312) 372-0770
BOBBYLEE COOK COOK~ CONNELLY 9899 Commerce Street P.O. Box 370 SummerviUe, Georgia 30747 (706) 857-3421

JOHNE. FLOYD* JOSHUAF. THORPE RONANP. DOHERTY NICOLEG. IANNARONE BONDURANTM, IXSON
& ELMORE,LLP 3900 One Atlantic Station 1201 W. Peachtree Street, N.W. Atlanta, Georgia 30309 (404) 881-4100
Counsel of Record for Respondents

MATTHEWTHAMES GODDARDT, HAMES,
HAMMONTRE&E BOLDING 2716 Cleveland Highway P.O. Box 399 Dalton, Georgia 30722-0399 (706) 278-0464

Additional Counsel for Respondents

January 22, 2007

 
 i 4-137.4o Ti
!

I

U._,_,",,..f]LnE_,O-,-,-'_*_C_Ou,, [

I

t_tvO"V _

i

IN THE

I

I

i

,_ '....'.Plian tif4g='Ap pellees,

y.:"/_......#' ../

I

'_ " . 'V,

' t...)

I

MOHAWK IND'os'rt_n_SA, NC.,
I

Defendant-Appel[aht.

;>

:..

;..

....._

I

ON APPEAL

FROM

• .... ..,

...." _1"" _.

THE UNITED:S'TATES".t).}_TRICT

COURT FOR THE NORTHERN i)_STRICT

I

OF GEORGIA, ROME DIVISION

REPLY BRIEF OF APPELLANT

MOHAWK INDUSTRIES,

INC.

I R. Carl Cannon

I

CONSTANGY,

BROOKS

& SMITH, LLC

230 Peachtree Street, N.W.

I

Suite 2400

Atlanta, Georgia 30303-1557

I

Telephone: 404-515-8622 Facsimile: 404-525-6955

I

I

Carter G. Phillips Juan P. Morillo Steven T. Cottreau Joseph R. Palmore Andrew D. Fausett SIDLEY AUSTIN BROWN
& WOOD LLP 1501 K Street, N.W. Telephone: 202-736-8000 Facsimile: 202-736-8711
Counsel for Appellant

I

I

TABLE OF CONTENTS
I

,°°

I

TABLE OF AUTHORITIES

...................................................................................

m

ARGUMENT AND CITATIONS OF AUTHORITY ..............................................

1

I

APPELLEES'

FEDERAL RICO CLAIM FAILS AS A

I

MATTER OF LAW ..............................................................................

2

A°

By Hiring Employees, Mohawk Only Participates in Its

I

Own Affairs--Not

Those of a RICO Enterprise ....................... 2

I

°

When A Corporation Is a RICO Defendant, the

Corporation and Its Agents Cannot Be a RICO

Enterprise .........................................................................

3

I

,

As the Seventh Circuit Has Held, a Corporation

I

Does Not Participate in a RICO Enterprise by Using Third-Party Recruiters to Hire Employees

........... 9

I

B,

Appellees' Complaint Fails to Allege the Existence of an

Enterprise with a Unified Structure and Common

I

Purpose .....................................................................................

13

II.

APPELLEES LACK STANDING BECAUSE THEY HAVE

I

SUFFERED NO PROXIMATELY

CAUSED INJURY TO

BUSINESS OR PROPERTY .............................................................

14

I

A6

Appellees Have Suffered No Injury to "Business or

I

Property" ..................................................................................

14

B°

Appellees Damages Theory Is Impermissibly

I

Speculative ...............................................................................

16

I

C°

Appellees Are at Most Victims of the Alleged RICO

Violations .................................................................................

18

I

I

I

III. APPELLEES'

GEORGIA RICO CLAIMS FAIL AS A

I

MATTER OF LAW ............................................................................

20

A°

Appellees Fail to Allege Facts Sufficient to Establish

I

that Mohawk Is Liable .............................................................

20

I

°

A Corporation Is Not Generally Liable Under

Georgia RICO ................................................................

20

I

°

Appellees Have Not Pied Corporate Liability for a

Georgia RICO Violation Pursuant to O.C.G.A.

I

§ 16-2-22 (a)(2) ..............................................................

24

B°

Appellees Cannot Establish Proximate Causation Under

I

Georgia RICO ..........................................................................

25

I

IV.

APPELLEES'

UNJUST ENRICHMENT

CLAIM FAILS AS A

MATTER OF LAW .............................................................................

26

I

CONCLUSION .....................................................................................................

29

I

I

i

I

I

I

I

I

I

I

I
TABLE OF AUTHORITIES
I

I

CASES

Ades v. Werther, 567 S.E.2d 340 (Ga. Ct. App. 2002) ................................

27

I

Associated Builders, Inc. v. Alabama Power Co., 505 F.2d 97

I

(1 lth Cir. 1974) .................................................................................

13, 19

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

I

2004 WL 2070652 (U.S. Nov. 1, 2004) ..............................

1, 9, 12, 15, 16

I

Begala v. PNC Bank, 214 F.3d 776 (6th Cir. 2000) ......................................

9

I

Bowman v. McDonough Real_ Co., Inc., 237 S.E.2d 647 (Ga. Ct.

App. 1977) ...............................................................................................

28

I

*Byrne v. Nezhat, 261 F.3d 1075 (1 lth Cir. 2001) ..........................

20, 21, 24

I

Carringer v. Rodgers, 331 F.3d 844 (1 lth Cir. 2003) .................................

21

Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) .............. 4, 5
I Chen v. Mayflower Transit, Inc., 315 F. Supp. 2d 886 (N.D. Ill. 2004) ....... 6

I

*Clark v. Seeuri_ Life hTs. Co., 509 S.E.2d 602 (Ga. 1998) ................. 21, 22

I

Cobb County v. Jones Group, 460 S.E.2d 516 (Ga. Ct. App. 1995) ..... 21, 22

I

Cotton, Inc. v. Phil-Dan Trucking, hw., 507 S.E.2d 730 (Ga. 1998) .......... 22

Danielsen v. Burnside-Ott Aviation Training Ctr., 941 F.2d 1220

I

(D.C. Cir. 1991) .......................................................................................

15

I

Federal Ins. Co. v. Westside Supply Co., 590 S.E.2d 224

(Ga. Ct. App. 2003) .................................................................................

22

I

I

iii

I

I *Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir. 1997). 3, 4, 7, 8, 9, 11

I

In re Five Star Properties. L.P., 169 B.R. 994 (Bankr. N.D. Ga. 1994) ..... 23

I

Fleming v. Citizens & Southern Nat. Bank, 253 S.E.2d 76 (Ga. 1979) ....... 27

I

Floyd v. Lamar Ferrell Chevrolet, Inc., 285 S.E.2d 218 (Ga. Ct. App.

1981) ........................................................................................................

26

I

Guillen v. Kuykendall, 470 F.2d 745 (5th Cir. 1972) ..................................

25

I

Hanover Shoe v. United Shoe Machine Corp., 392 U.S. 481 (1968) .... 14, 15

I

Holmes v. Sec. InvestorProt.

Corp., 503 U.S. 258 (1992) ..........................

19

Hooten v. State, 442 S.E.2d 836 (Ga. Ct. App. 1994) .................................

22

I Lerma v. Univison Committees, Inc., 52 F.Supp.2d 1011 (E.D. Wis.

I

1999) ........................................................................................................

17

Maiz v. Virani, 253 F.3d 641 (I lth Cir. 2001) ............................................

16

I Mendoza v. ZirkleFruit Co., 301 F.3d 1163 (9th Cir. 2002) ................ 14, 18

I

Military Circle Pet Ctr., 353 S.E.2d 555 (Ga. Ct. App. 1987) .................... 24

I

NOWv. Scheidler, 510 U.S. 249 (1994) ......................................................

17

I

Price v. Pinnacle Brands, Inc., 138 F.3d 602 (5th Cir. 1998) ............... 14, 15

Reaugh v. Inner Harbour Hosp., 447 S.E.2d 617 (Ga. Ct. App. 1994) ...... 22

I

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

3

I

*Riverwoods Chappaqua Corp. v. Marine Midlands Bank, 30 F.3d

339 (2nd Cir. 1994) ...............................................................................

3, 7

I

Roe v. Aware Woman Center for Choice. Inc., 253 F.3d 678 (1 lth

I

Cir. 2001) .................................................................................................

25

I

iv

I

I

I

St. Paul Mercupy Ins. Co. v. Meeks, 508 S.E.2d 646 (Ga. 1998) ................ 26

Shoenbaum Ltd. v. Lenox Pines, L.L.C., 585 S.E.2d 243 (Ga. Ct. App.

I

2003) ........................................................................................................

22

I

Stowers v. Hall, 283 S.E.2d 714 (Ga. Ct. App. 1981) .................................

26

Solis-Ramirez v. United States Department of Justice, 758 F.2d 1426

I

(1 lth Cir. 1985) .....................................................................................

7, 8

I

Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) ................... 18

I

Turnquist v. Elliott, 706 F.2d 809 (7th Cir. 1983) .......................................

15

United Companies Lending Corp. v. Coates, 520 S.E.2d 236 (Ga. Ct.

I

App. 1999) ...............................................................................................

27

I

United States v. Castro, 89 F.3d 1443 (1 lth Cir. 1996) ..............................

11

United States v. Goldin Industrial, Inc., 219 F.3d 1271 (1 lth Cir.

I

2000) ................................................................................................

5, 6, 11

I

United States v. Hewes, 729 F.2d 1302 (1 lth Cir. 1984) ............................

11

United States v. Massey, 89 F.3d 1433 (1 lth Cir. 1996) .............................

11

I

United States v. Muyet, 994 F. Supp. 501 (S.D.N.Y. 1998) ........................

11

I

United States v. Norton, 867 F.2d 1354 (1 lth Cir. 1989) ............................

11

I

United States v. Pipkins, 378 F.3d 1281 (1 lth Cir. 2004) ..................... 10, 11

I

United States v. Starett, 55 F. 3d 1525 (1 lth Cir. 1995) ............................

11

Waldo v. North America Van Lines, Inc., 669 F. Supp. 722 (W.D.

I

Penn 1987) .................................................................................................

8

I

I

I

I STATUTES

I

18 U.S.C. § 1546 ...........................................................................................

25

I

"18 U.S.C. § 1961 etseq ............................................................................

1, 6

i

*]8 U.S.C. § 1962, (c) ....................................................................................

4

O.C.G.A. § 16-1-3(12) ..................................................................................

21

I

*O.C.G.A. § 16-2-22, (a), (a)(1), (b)(2) ...............................

20, 21, 22, 23, 24

I

O.C.G.A. § 16-13-32, (b) ..............................................................................

23

I

O.C.G.A. § 16-14-4 ......................................................................................

23

I

Restatement (Second) of Agencv § 1 ..............................................................

8

I

Restatement (Third) of Agency § 3.14 ............................................................

7

Restatement (First) of Restitution § 107(1) ..................................................

27

I

I

I

I

I

I

I

I

I

vi

I

I

ARGUMENT

AND CITATIONS OF AUTHORITY

I

Mohawk Industries, Inc. ("Mohawk")

demonstrated in its opening

I

brief that Appellees' complaint suffers from several fatal defects, any one of which

I

mandates dismissal. A common thread runs through these flaws: Appellees seek

I

to stretch the Racketeer Influenced and Corrupt Organizations

Act ("RICO"), 18

U.S.C. § 1961 et seq., into something it is not. They want to use that statute--
I

intended to provide a cause of action against criminals who infiltrate and corrupt

I

businesses--as

a vehicle through which some employees

may challenge a

I

legitimate manufacturer's

hiring and compensation

practices.

Appellees allege

I

that Mohawk violated RICO through its own employees and agents, and they seek

I

a purely speculative retroactive wage increase.

I

As the Seventh Circuit recognized earlier this year in a factually

indistinguishable

case, Appellees' effort is doomed as a matter of law. Baker v.

I

IBP, Inc., 357 F.3d 685,691-92

(7th Cir. 2004), cert. denied, 2004 WL 2070652

I

(U.S. Nov. 1, 2004) (04-149).

Under RICO's express provisions, Appellees'

I

RICO claim fails to allege participation

through predicate acts in any RICO

I

"enterprise" (other than the defendant itself); fails to allege any "enterprise" with a

unified structure and common purpose; and fails properly to allege any cognizable
I

I

I

I injury proximately caused by the defendant's conduct. Appellees' state statutory

I

and common law claims are likewise insufficient as a matter of law.

I In its response, Appellees' invoke decisions from the Supreme Court

I

and other circuits that only serve to shine more light on the defects in Appellees'

I

complaint. They also repeatedly seek shelter behind legal conclusions, when the

I

facts they allege in their complaint demonstrate

that Appellees cannot state a

claim. For these reasons, and those provided in Mohawk's opening brief, this
I Court should reverse the portions of the district court's order denying dismissal of

I

Appellees'

complaint and instruct the court to dismiss the complaint with

I

prejudice.

I

I.

APPELLEES'

FEDERAL

RICO CLAIM FAILS AS A MATTER

OF

LAW.

I

A. By Hiring Employees,

Mohawk Only Participates

in Its Own

Affairs--Not

Those of a RICO Enterprise.

I

As Mohawk explained in its opening brief, Appellees'

Complaint

I

fails properly to allege an indispensable

element of a RICO claim--Mohawk's

I

participation

in some "enterprise"

other than itself. See MBr. I at 9-14. The

I

Supreme Court has made clear that RICO "liability depends on showing that the

defendants conducted or participated in the conduct of the 'enterprise's

affairs,'

I

I

' Throughout this reply, "MBr." refers to Mohawk's opening brief.

I

I

I

not just their own affairs." Reves v. Ernst & Young, 507 U.S. 170, 185 (1993).

I

Appellees' complaint fails to plead the facts necessary to meet this basic test for

!

two independent reasons discussed below in turn.

I

1. When a Corporation

Is a RICO Defendant, the

Corporation

and Its Agents Cannot Be a RICO

I

"Enterprise."

I

Corporations are artificial entities that act only through agents. The

fundamental requirement that the RICO defendant be distinct from the RICO

I enterprise would therefore become a dead letter if plaintiffs could sue a

I

corporation as a RICO defendant, while alleging that the corporation and its

I

agents comprised a RICO "enterprise." E.g., Riverwoods Chappaqua Copp. v.

I

Marine Midlands Bank, 30 F.3d 339, 344 (2d Cir. 1994). For this reason, the

courts have consistently held that such allegations do not state a RICO claim. See
I MBr. at 10 (collecting cases). 2 Appellees attack this black-letter RICO law from

I

several angles, but none is availing.

I

I

I

2 It is beyond dispute that if Mohawk had used exclusively its own employees to

recruit other prospective employees, there would be no RICO enterprise. And as

another circuit court reasoned, "[w]hat possible difference, from the standpoint of

I

preventing the type of abuse for which RICO was designed, can it make that

[Mohawk used third-party recruiters rather than its own employees]?" Fitzgerald

I

v. Cho_sler Corp., 116 F.3d 225,227 (7th Cir. 1997).

I

I

I

Appellees argue that a RICO enterprise can be comprised of nothing

I

more than a corporation and its agents. See ABr. 3 at 12-14. Appellees attempt to

I

find support in the Supreme Court's decision in Cedric Kushner Promotions, Ltd.

I

v. King, 533 U.S. 158 (2001), which, they suggest, sub silencio overruled the line

I

of cases relied upon by Mohawk. In reality, Cedric Kushner disparages the same

kind of enterprise Appellees here allege, calling it an "oddly constructed entity."
I ld. at 164.

I Cedric Kushner held that the president of a closely held corporation

I

could be a RICO defendant,

with the corporation

serving as the RICO

I

"enterprise."

Id. at 160. This was a quintessential

fact pattern under RICO, which

I

was intended to target criminals who take over companies and turn them into

racketeering enterprises. See Fitzgerald v. Chrysler Corp., 116 F.3d 225,227 (7th
I

Cir. 1997) (discussing "prototypical"

RICO cases). In such a case, the RICO

I defendant and the enterprise are distinct, such that RICO's requirement that the

I

defendant be "employed by or associated with" the enterprise is naturally satisfied.

I

18 U.S.C. § 1962(c).

i

Cedric Kushner did not involve the converse situation--such

as that

I

alleged by Appellees here--in which the RICO defendant is the corporation, and

I

3 Throughout this reply, "ABr." refers to Appellees' brief.

I

4

I

I
the corporation plus its own agents purportedly constitute the RICO "enterprise."
I The Court in Cedric Kushner explained that such a fact pattern involved "quite

I

different circumstances which are not presented here." 533 U.S. at 164. Indeed,

I

the Court expressed great skepticism regarding the type of enterprise alleged by

I

Appellees in the instant case. In cases where "a corporation was the 'person' and

the corporation, together with all its employees and agents, were the 'enterprise,'"
I the Court continued, "[i]t is less natural to speak of a corporation as 'employed by'

I

or 'associated with' this latter oddly constructed entity." Id. It is just such an

I

"oddly constructed entity," rather than an "enterprise" of the kind at issue in

I

Cedric Kushner, that Appellees proffer in this case. In fact, Appellees cite no case

that has accepted such an enterprise as being distinct from a corporate defendant.
I

I

Appellees fare no better by invoking United States v. Goldin Indus.,

Inc., 219 F.3d 1271 (1 lth Cir. 2000), as support for their contention that recent

I RICO case law has silently worked a revolution in the scope of the RiCO

I

"enterprise." Goldin in fact had nothing to do with agency. In that case, three

I

corporations insisted that they could not be both RICO defendants and, taken

I

together, a RICO enterprise because they "were offshoots" of the same company

and "had overlapping ownership." Id. at 1276. It was in the course of rejecting
I that argument (not any claim to an agency relationship) that the Court noted that

I

I

I

I

the corporations were "separate and distinct" and "free to act independently." Id.

I

at 1277. 4

I Appellees also try and fail to show that even if a corporation and its

I

agents cannot be an enterprise when the corporation is the RICO defendant, their

I

complaint survives. First, Appellees erect a strawman and then knock it down by

I

arguing that a RICO enterprise may be an "association in fact," rather than a

formal, legal entity. ABr. at 8-9. Mohawk has never disputed that such an
I

"enterprise" is possible--the RICO statute explicitly contemplates it, see 18

I

U.S.C. § 1961(4)--but has instead demonstrated that Appellees have not properly

I

alleged it here because the only "association in fact" alleged consists of Mohawk

I

and its agents.

I

Appellees next point to their Complaint's allegation that "third party"

I

employment agencies "supply Mohawk with illegal workers" and contend that

their allegation of an "enterprise" is saved because these agencies are entities
I

"distinct" from Mohawk. ABr. at 10-11 (quoting Compl. ¶ 76). But as Appellees

I

elsewhere acknowledge, an agency relationship always involves entities or people

I 4 Also inapposite is Chen v. Ma)flower Transit, Inc., 315 F. Supp. 2d 886 (N.D.

I

Ill. 2004). In that case, an "enterprise" was present because an agreement between the RICO defendant and its putative agents explicitly stated that "[t]he parties

agree that they have not established a partnership, cooperative, joint venture,

I

franchise or any other business relationship." Id. at 903.

I

6

I

I

with "'separate legal personalities.'"

Id. at 12-13 (quoting Restatement (Third) of

I

the Law of Agency § 1.01 cmt c (Tentative Draft No. 2 2001)). Accordingly,

I

Appellees' contention that the mere separateness of Mohawk and the recruiters

I

allows them to combine in a RICO enterprise would completely eviscerate the

black-letter rule that a RICO enterprise cannot "consis[t] merely of a corporate
I defendant associated with its own employees or agents." Riverwoods Chappaqua
I Corp., 30 F.3d at 344. 5

I Appellees attempt to circumvent this rule by pointing out that they

I

have not specifically "alleged that the third-party recruiters are Mohawk's agents."

I

ABr. at 1 i. The absence of such a legal conclusion in the complaint is immaterial.

I

In considering a motion to dismiss, a court is not bound by a complaint's legal

conclusions; afortiori it is not bound by their absence. See Solis-Ramirez v.
I

I

5 Equally unavailing is Appellees' attempt to distinguish Fitzgerald v. Chrysler

Corp., 116 F.3d 225 (7th Cir. 1997), on the purported ground that the agents in

I

that case worked "exclusively" for the RICO defendant. In making this argument, Appellees tellingly provide no specific citation to Fitzgerald's reasoning, and in

fact that decision nowhere mentions, much less relies on, any "exclusive"

I

relationship between the defendant and its agents. Instead, agency alone--

exclusive or not--was enough to defeat the allegation of a RICO "enterprise" in

I

Fitzgerald. Id. at 227-228 ("What we cannot imagine, and what we do not find any support for in appellate case law, is applying RICO to a free-standing

corporation..,

merely because [it] does business through agents, as virtually

I

every manufacturer does."). Moreover, it is black-letter law that an agent can

serve more than one principal and still be an agent. See Restatement (Third) of

I

Agency § 3.14, cmt. b (Tent. Draft 3 2002).

I

I

I United States Dep 't of Justice, 758 F.2d 1426, 1429 (1 lth Cir. 1985) ("The district

I

court is not required to accept as true appellant's

conclusions

of law when

I

considering a Rule 12(b)(6) motion to dismiss .... On the contrary, the court may

I

make its own determination

of the legal issue" (internal citation omitted)); see also

I

Restatement

(Second) of Agency § 1, cmt. b (1958) (existence of an agency

relationship is a question of law).
I

What matters is that a straightforward

reading of the complaint's own

I

factual allegations establishes an agency relationship between Mohawk and the

I

recruiters. Compare Compl. ¶ 76 (recruiters locate workers on Mohawk's behalf

I

and at its direction) with Restatement (Second) of Agency § 1 (agency relationship

I

established when party agrees to "act on [principal's]

behalf and subject to his

control"); see generally Waldo v. North Am. Van Lines. hTc., 669 F. Supp. 722,
I

737-39 (W.D. Penn. 1987) (plaintiff"failed

to properly plead a RICO 'enterprise'"

I

comprised of corporate defendant and its "agent-recruiters").

Appellees' own

I

complaint alleges that Mohawk used agents who hired and recruited workers.

I

Such allegations establish that Appellees have not pled and cannot plead a valid

I

RICO enterprise distinct from Mohawk itself. See, e.g., Fitzgerald, 116 F.3d at

I

I

I

8

I

I 225 (affirming 12(b)(6) dismissal of RICO complaint because "enterprise" alleged

I

in complaint was comprised of defendant and its agents). 6

I 2. As the Seventh Circuit Has Held, a Corporation Does Not

I

Participate in a RICO Enterprise by Using Third-Part)' Recruiters to Hire Employees.

I

Even if the third-party recruiters alleged in Appellees' complaint were

I

not Mohawk's agents, Appellees would still fail to state a claim. Whatever the

recruiters' legal relationship with Mohawk, the company uses them only to hire its

I own employees. Accordingly, here, as in Baker v. IBP, Inc., "[t]he hub of the

I

complaint is that [Defendant] operates itself unlawfully," and there can be no

I

RICO claim. 357 F.3d at 691-92 (emphasis in original).

I

Appellees assert that Mohawk "participates" in the affairs of an

I

"enterprise" comprised of Mohawk and its recruiters, but the very portion of

I

Appellees' brief that advances this argument demonstrates that all of Appellees'

allegations involve Mohawk's participation in its own affairs. See ABr. at 15

I

(Mohawk "using and harboring illegal workers"; "knowingly employing and

I

accepting false documents from illegal workers"; "obtaining illegal workers").

I

That Mohawk may have used recruiters to locate these workers does not somehow

I

6 This case is therefore unlike Begala v. PNC Bank, 214 F.3d 776 (6th Cir. 2000),

where the pleadings did not include factual allegations supporting the existence of

I

an agency relationship. See id. at 781.

I

9

I

I transform the every-day corporate act of hiring an employee into "participation" in

I

some "enterprise" beyond the corporation itself.

I Appellees contend that the Seventh Circuit's common-sense analysis

I

in Baker is somehow inconsistent with this Court's precedents.

Far from

I

undermining Baker, the principal decision Appellees invoke as support merely

I

reinforces Baker by demonstrating in detail what participation in a real RICO

"enterprise" looks like. See United States v. Pipkins, 378 F.3d 1281 (1 lth Cir.
I 2004). Pipkins involved a criminal RICO prosecution of two pimps who were part

I

of a syndicate that collectively controlled the prostitution trade in part of

I

southwest Atlanta. The Court found the existence of a RICO enterprise in part on

I

these facts:

I

While all the pimps did not pool their profits from

prostitution, some did. And the pimps generally aided

I

each other. Pimps bailed each other's prostitutes out of jail; mentored younger pimps; swapped prostitutes with

each other to get a better "fit;" warned other pimps and

I

their prostitutes of the presence of police; provided

condoms, rides, and rooms for each other's prostitutes;

I

jointly organized private prostitution parties;

juvenile

prostitutes

together;

recruited

recruited juvenile

prostitutes

for each other; divided the track

I

geographically to reduce competition; and traveled out of

town together to prostitute females in other cities. Pimps

I

also operated as a price-fixing cartel to regulate the prices that their prostitutes charged for different sexual

services.

I

I

10

I
I ld. at 1286. 7 That is what a RICO enterprise looks like, s and the pimp-defendants
I

I

I

I 7 The passage from Pipkins that Appellees quote, see ABr. at 18-19, hardly stands

I

for the proposition that two pimps constituted an "enterprise" because one recruited prostitutes for the other. This passage comes at the end of an extended

discussion of the relationship between the two pimps, who, among other things,

I

jointly "kept a stable of juvenile prostitutes," lived together, had a "symbiotic

business relationship," and "supervised each other's prostitutes and collected the

I

money they earned." 378 F.3d at 1290-91.

8 The "prototypical" RICO case involves prosecution of an individual defendant

I

who uses a corporation or other entity for racketeering. See Fitzgerald, 116 F.3d at 227. Indeed, that was the fact pattern in United States v. Mu.vet, 994 F. Supp.

501 (S.D.N.Y. 1998), cited by Appellees at 14 n.13. See also United States v.

I

Massey, 89 F.3d 1433, 1440 (1 Ith Cir. 1996) (individual defendant participated in

corruption of an enterprise--the

circuit court system--through

bribery); United

I

States v. Castro, 89 F.3d 1443, 1459 (1 lth Cir. 1996) (same); United States v. Norton, 867 F.2d 1354, 1357 (llth Cir. 1989) (individual defendant-union

officials took kick backs in exchange for entering into employee benefit contracts

I

on behalf of the union); United States v. Hewes, 729 F.2d 1302, 1307-08 (1 lth

Cir. 1984) (individual defendants used sham corporations to bilk creditors). Only

I

slightly less outlandish is Appellees' citation to United States v. Starrett, which involved the prosecution of an individual RICO defendant for participating in a

motorcycle gang with elected officers and elaborate rules and regulations. See 55

I

F.3d 1525, 1533-34 (1 lth Cir. 1995). The facts here, in which the corporation

itself (not any individual) is the RICO defendant, are entirely different. Rejecting

I

Appellees' creative bid for a retroactive wage increase will have little, if any, impact on the criminal use of RICO. Indeed, nothing in Mohawk's rule would

affect the RICO liability of a corporation that truly participates in some larger

I

association of corporations or (non-agent) individuals by engaging in racketeering

activities on the enterprise's behalf. See, e.g., Goldin, 219 F.3d at 1273

I

(discussing defendant-corporations'

"various schemes").

I

11

I

I

clearly participated

in it. 9 What Appellees allege here--a corporation

hiring

I

employees

with the help of recruiters--is

orders of magnitude

different.

I

Appellees have simply not alleged Mohawk's participation in any enterprise other

I

than itself.

I

Nor do Appellees succeed in their half-hearted effort to distinguish

I

the Seventh Circuit's

decision

in Baker, which squarely forecloses

their

"enterprise" theory. The complaint in that case, just like the one here, alleged the
I

involvement

of third-party

recruiters

in the defendant's

alleged hiring of

I

undocumented

workers. See Baker, 357 F.3d at 687 (discussing role of third-party

I

"'recruiters'"

in smuggling deported employees back into country and role of

I

"immigrant-welfare

organizations"

in "refer[ring] known illegals to [defendant]

for employment").

The Complaint's

allegation that some workers "belong" to a

I

recruiter while working for Mohawk, ABr. at 21, does not change this analysis at

I

all. The point is that Appellees'

complaint challenges

Mohawk's

method of

I

recruiting, obtaining, and hiring a workforce to conduct Mohawk's manufacturing

I

business.

This fundamental

fact is not changed by Appellees'

allegations.

I

9 As demonstrated

by this discussion, a proper understanding

of what it means to

participate in a RICO "enterprise"

would not "bar important criminal RICO

I

prosecutions,"

such as Pipkins. See ABr. at 19. Indeed, this proper understanding

is shared by numerous jurisdictions and has not imposed any apparent difficulties

I

I

12

I

I
Accordingly, just as in Baker, "[t]he nub of the complaint is that [Defendant]
I operates itself unlawfully," 357 F.3d at 691-92, and thus the complaint does not

I

state a claim.

I

B.

Appellees'

Complaint

Fails to Allege the Existence

of an

Enterprise with a Unified Structure and Common Purpose.
I As Mohawk demonstrated in its opening brief, Appellees have failed

I

properly to allege that the purported "enterprise"

they identify has a common

I

purpose. MBr. at 14. Indeed, the Seventh Circuit has noted this very defect in a

I

complaint materially indistinguishable

from the one here. See Baker, 357 F.3d at

691. Appellees' only response is to point to the portion of their complaint alleging
I that "'[t]he recruiters and Mohawk share the common purpose of obtaining illegal

I

workers for employment

by Mohawk,'"

and to suggest that all hoped to make

I

money. ABr. at 22 (quoting Compl. ¶ 77). Such conclusory allegations do not

I

overcome the fundamental

irrationality

inherent in the allegation of "common

purpose" identified by the Court in Baker and equally applicable here and are
I

therefore insufficient to save the complaint.

See Associated Builders, Inc. v.

I

Alabama Power Co., 505 F.2d 97, I00 (1 lth Cir. 1974) ("Conclusory allegations

I

and unwarranted deductions of fact are not admitted as true.").

I

on the Government's

ability to prosecute RICO cases. See MBr. at 10 (collecting

cases).

13

I

I

II. APPELLEES

LACK

STANDING

BECAUSE

THEY

HAVE

I

SUFFERED NO PROXIMATELY

CAUSED INJURY TO BUSINESS

OR PROPERTY.

I

A.

Appellees Have Suffered No Injury to "Business or ProperD'."

I

As Mohawk explained in its opening brief, Appellees' desire for a

retroactive wage increase is too abstract, intangible and speculative to constitute
I an injury to their "business or property" as is required to confer standing under

I

RICO. Critically, Appellees nowhere claim that Mohawk did not pay their agreed-

I

_0

upon wage.

Accordingly,

because "plaintiffs do not allege that they received

I

something different than precisely what they bargained for," they suffered no

cognizable injury. Price v. Pinnacle Brands, Inc., 138 F.3d 602, 606-07 (5th Cir.
I 1998).

I
In response, Appellees rely principally on the Supreme Court's
I antitrust decision in Hanover Shoe v. United Shoe Machine Corp., 392 U.S. 481

I

(1968), and the Ninth Circuit's decision in Mendoza v. Zirkle Fruit Co., 301 F.3d

I

1163 (9th Cir. 2002). But both cases included a critical element not present here:

I

a defendant's market power. The seller of shoe-making machinery in Hanover--

I

z0 Appellees protest that they "have not alleged any contract for a specific wage,"

ABr. at 26, but no fair reading of the complaint would support the bizarre notion

I

that Appellees' went to work for Mohawk without an understanding

of what their

compensation

was to be. Mohawk's point is that Appellees have not alleged that

this understanding--whether

or not memorialized

in a written contract--is

I

incorrect.

I

14

I

I
whose inflated prices provided the basis for standing in the passage quoted by
I Appellees, see ABr. at 27--had been found liable in an action by the United States

I

of monopolizing the market. See 392 U.S. at 483-84; 486 n.3. The buyer-plaintiff

I

accordingly had nowhere else to go for the machinery; it clearly was injured by the

I

inflated prices it had no choice but to pay. Likewise, the complaint in Mendoza

included an allegation of market power, see infi'a Section II.B, so the employee-
! plaintiffs' ability to escape the low wages resulting from the defendant's conduct

I

was artificially constrained.

Here, where there is no allegation of market power

I

limiting Appellees' ability to work elsewhere, the fact that they received "precisely

I

what they bargained for," Price, 138 F.3d at 606-07, is dispositive. _l

I

I1 Appellees attempt to distinguish Turnquist v. Elliott, 706 F.2d 809 (7th Cir.

I

1983), and Danielsen v. Burnside-Ott Aviation Training Ctr., 941 F.2d 1220 (D.C.

Cir. 1991), on the ground that they "involve claims that the defendant failed to pay

I

the plaintiff a wage set by statute." ABr. at 25 n.24. That distinction actually makes Appellees' claim to a higher wage weaker than those in Turnquist and

Danielsen.

In those cases, the courts found that employees had no property

I

interest in a wage beyond that they agreed to with their employer even when they

alleged the higher wage was mandated by statute. See Turnquist, 706 F.2d at 812;

I

Danielsen, 941 F.2d at 1229. Here, by contrast, Appellees had no statutory right to a particular wage (beyond minimum wage), so their claimed property interest in

compensation beyond what they agreed to accept is even weaker.

I

Likewise, Appellees gain no traction through their purported analogy to

gender discrimination

cases. See ABr. at 26. Unlike RICO, neither Title VII nor

I

any other discrimination Similarly, the difference

law requires an injury to "business or property." between the wages of female employees affected by

discrimination

and the wages of comparable male employees is measurable, unlike

I

the value of diminished power in the labor market resulting from some incremental

I

15

I

i

B. Appellees' Damages Theory Is Impermissibly

Speculative.

I

As Mohawk explained in its opening brief, Appellees' damages

I

theory is not only speculative but also fundamentally illogical. In considering a

I

virtually indistinguishable

complaint, Judge Easterbrook cogently explained why

this is so. See Baker, 357 F.3d at 692. Appellees' entire cause of action depends
I on a court's ability to quantify the amount by which their wages were depressed

I

due to their employer's decision to hire other workers.

It is the inherently

I

speculative nature of this theory that renders it incapable of meeting RICO's

I

standing requirements.

Contrary to Appellees' arguments, see ABr. at 28, no

amount of discovery or expert testimony can salvage it. _2
I

I

Moreover, Appellees' damages theory simply makes no sense. See

Baker, 357 F.3d at 692. If Mohawk had attempted to pay below-market

wages

I

I

increase in the number of illegal workers.

_z Appellees' assertion that this Court effectively endorsed speculative damages in

I

RICO cases in Maiz v. Virani, 253 F.3d 641 (1 lth Cir. 2001), is flatly wrong. In fact, that case actually reiterated the rule that "damages may not be determined by

mere speculation or guess." Id. at 664 (internal quotation marks omitted). Maiz

I

involved RICO plaintiffs' effort to recover money provided defendant as part of a

fraudulent scheme and to recover the lost profits they would have earned had they

I

not been bilked. This last category of damages was not at all speculative because plaintiffs proved that they would have invested the money in real estate but for

defendants' scheme and offered expert testimony on the specific, easily quantified

I

results they would have achieved during the relevant historical time period. See

id.

I

I

16

I

I

because of its use of undocumented

employees, then all of its legal employees,

I including Appellees, would have left to work somewhere else. They accordingly

I

would have suffered no damages.

Only if Mohawk could single-handedly

I

establish wage rates could it actually have suppressed Appellees' wages. Yet, as

I

Appellees now concede, see ABr. at 29 n.29, such an allegation of market power

appears nowhere in their complaint.

Without an allegation of market power, the

I

Appellees'

conclusory

allegations

that their wages were depressed

are

I

fundamentally

irrational and may be disregarded.

See Lerma v. Univison Comms.,

I

Inc., 52 F. Supp. 2d 1011, 1025 (E.D. Wis. 1999) ("To survive a motion to

I

dismiss, a claim must make economic and factual sense.") (citing Car Carriers,

Inc. v. FordMotor Co., 745 F.2d 1101, 1110 (7th Cir. 1984)). 13
I

l

Appellees' reliance upon the Ninth Circuit's decision in Mendoza is

simply misplaced.

There, the district court had dismissed the employees'

I

I

13 Contrary speculative,

to Appellees'

suggestion,

see ABr. at 23-24, there was nothing

irrational, or conclusory about the allegations of injury in NOW v.

Scheidler, 510 U.S. 249 (1994). Plaintiffs there alleged that the defendants'

I

extortion injured them when they used "threatened or actual force, violence, or

fear to induce clinic employees, doctors, and patients to give up their jobs, give up

I

their economic right to practice medicine, and give up their right to obtain medical

services at the clinics." Id. at 253-54; see also id. at 256 ("[Plaintiffs] alleged in

I

their complaint that [defendants] conspired to use force to induce clinic staff and patients to stop working and obtain medical services elsewhere .... In addition,

[plaintiffs] claimed that [one defendant] threatened [a] clinic administrator

with

I

reprisals if she refused to quit her job at the clinic.").

I

17

I

i
complaint on the ground that their damages theory was too speculative and did not
I account for the wages paid by other employers in the relevant market. See 301

i

F.3d at 1170-71. "The difficulty with this reasoning," the Ninth Circuit explained,

I

"is that the employees allege that the growers singularly have the ability to define

I

wages in this labor market, akin to monopsony or oligopsony power." Id. at 1171.

The Ninth Circuit concluded that "[f]or now, it is sufficient that the employees
I have alleged market power--they must not be put to the test to prove this

I

allegation at the pleading stage." Id. Here, by contrast, the Appellees have not

I

"alleged market power." Lacking this indispensable element, their complaint

I

accordingly fails even under the Ninth Circuit's analysis. _4

I

C.

Appellees Are, at Most, Indirect Victims of the Alleged RICO

Violations.

I

As Mohawk explained in its opening brief, Appellees lack standing

I

for another reason: they are, at most, indirect victims of Mohawk's alleged

I

14Although Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004), did not

use the term of art "market power," it made clear that the employees there, as in

I

Mendoza, alleged they had "no choice" but to continue working at their employer notwithstanding their below-market wages. Id at 619. Appellees' attempt to

bolster their economic theory by citing federal immigration legislation fails for

I

similar reasons. See ABr. at 31-32. By definition, statutes are applicable to all

employers.

Penalties for employing illegal immigrants therefore deter all

I

employers from engaging in hiring activity that collectively would affect the labor market and generally depress wages. Such macroeconomic effects, however, say

nothing about the impact of undocumented hiring by a single employer without

I

market power.

I

18

I

I conduct. See MBr. at 22-24. As the Supreme Court has explained, RICO
I proximate cause requires "some direct relation between the injury asserted and the

I

injurious conduct alleged." Holmes v. See. Investor Prot. Corp., 503 U.S. 258,

I

268 (1992). Here, if there are any direct victims of the alleged conduct, it is the

I

undocumented workers who are not in a position to bargain over terms of

employment. Appellees' alleged injuries are no more direct than those of any
I other employee in the State whose wages, according to Appellees' theory, also

I

should have been depressed by Mohawk's expansion of the labor pool and

I

resulting decrease in demand for legal workers.

I

Appellees' only response is that they are direct victims because their

I

complaint says they are. See ABr. at 35. Again, however, this Court is not

I

constrained by conclusory allegations in the complaint that are not properly

supported by its factual allegations. See Associated Builders. Inc., 505 F.2d at

I 100. Appellees are simply not direct victims as participants in the labor market.

I

Dismissal of their federal claims is therefore warranted for this reason as well.

I

I

I

I

I

19

I

I

III. APPELLEES'

GEORGIA RICO CLAIMS FAIL AS A MATTER OF

I

LAW.

A.

Appellees

Fail to Allege Facts Sufficient

to Establish

that

i

Mohawk Is Liable.

Appellees concede that, "[u]nder Georgia law, a corporation qua
I
corporation, cannot be held to answer for a crime," Byrne v. Nezhat, 261 F.3d
I 1075, 1105 (1 lth Cir. 2001), unless the corporation is held vicariously liable for

I

the actions of its agents or employees.

ABr. at 37. Appellees also concede that

I

vicarious liability attaches to a corporation in only two circumstances:

(1) where

I

the statute defining the crime "clearly indicates a legislative purpose to impose

liability" on corporations,

O.C.G.A. § 16-2-22(a)(1);

or (2) where "the crime is

I authorized, requested, commanded, performed, or recklessly tolerated by the board

I

of directors or by a managerial official who is acting within the scope of his

I

employment

on behalf of the corporation,"

id. § 16-2-22(a)(2).

Appellees,

l

however, cannot meet either of these tests.

I

1.

A Corporation

Is Not Generally Liable Under Georgia

RICO.

I

Appellees renew their argument--rejected

by the District Court

I

below--that

Mohawk may be held liable on Georgia RICO claims under O.C.G.A.

§ 16-2-22(a)(1) because Georgia RICO "clearly indicates a legislative purpose to
I

impose liability" on corporations.

The Georgia Supreme Court, however, has

I

I

2O

I

I directly and explicitly rejected this basis for liability. That court has explained

I

that "[a] corporation may also face prosecution under O.C.G.A. § 16-2-22(a)(1)

I

for a crime if the statute defining the crime clearly indicates a legislative purpose

I

to impose liability on a corporation. [Georgia] RICO, however, is not such a

statute." Clark v. Sec. Life lns. Co., 509 S.E.2d 602, 603 n. 1 (Ga. 1998); see also
I
Cobb County v. Jones Group, 460 S.E.2d 516, 521 (Ga. Ct. App. 1995) (Georgia
I RICO claims do not meet § 16-2-22(a)(1). As this Court has recognized, that is

I

both the beginning and end of the inquiry. See Byrne, 261 F.3d at 1105 ("Under

I

Georgia law, a corporation..,

could not violate the Georgia RICO statute." (citing

I

Cobb Count),, 460 S.E.2d at 521)); see generally Carringer v. Rodgers, 331 F.3d

844, 847 (1 lth Cir. 2003) (Court of Appeals is "bound by the Georgia Supreme
I Court's interpretation of state law").

I
Appellees argue that Clark's conclusion is dicta, ABr. at 39-40, but
I that is wrong. The Clark court considered the applicability of § 16-2-22(a)(1) to

I

Georgia's RICO statute for the exact same reason that Appellees have asked to

I

apply it here--to determine whether a corporation should be held liable for alleged

RICO violations. 15 Clark, 509 S.E.2d. at 602-603.
I

I

15For the same reason, Appellees wrongly disregard the holding in Cobb Count),,

which they dismiss as "a passing parenthetical comment." ABr. at 39. It was only

I

after the court determined that § 16-2-22(a)(1) did not apply to the RICO statute

I

21

I

I Despite the Georgia Supreme Court's clear holding to the contrary on

I

an issue of state law, Appellees attempt to reargue the issue by selectively quoting

I

from various provisions of the Georgia code. All of these arguments are without

I

merit. For example, Appellees claim that RICO charges should fall within § 16-2-

I

22(a)(1) because "the RICO statute imposes liability on any 'person' that engages

in the proscribed conduct," ABr. at 38, and Georgia's criminal code generally

I defines that term in a broad manner. See O.C.G.A. § 16-1-3(12) (1982). Using

I

the code's general definition of a person would, of course, eviscerate the vicarious

I

liability provisions of O.C.G.A. § 16-2-22 altogether, as every single crime within

I

that the court proceeded to inquire into the applicability of § 16-2-22(a)(2). See

Cobb County, 460 S.E.2d at 521. Appellees also attempt to avoid controlling

I

precedent in Clark and Byrne by citing non-controlling, intermediate state court

cases. ABr. 36 n.38. Not a single one of the courts in Appellees' cited cases even

I

considered, let alone decided, whether Georgia's RICO statute satisfied the test set forth in § 16-2-22(a)(1). See Cotton, Inc. v. Phil-Dan Trucking, lnc., 507 S.E.2d

730 (Ga. 1998) (no mention); Fed. lns. Co. v. Westside Supply Co., 590 S.E.2d

I

224 (Ga. Ct. App. 2003) (same); Shoenbaum Ltd. v. Lenox Pines, L.L.C., 585

S.E.2d 643 (Ga. Ct. App. 2003) (same). These courts could just as easily have

I

held their respective corporate defendants subject to liability under § 16-2-22(a)(2) as under § 16-2-22(a)(1). Such decisions have no precedential value. See Hooten

v. State, 442 S.E.2d 836, 840 (Ga. Ct. App. 1994) ("Questions which merely lurk

I

in the record, neither brought to the attention of the court nor ruled upon, are not

to be considered as having been so decided as to constitute precedents."). The

I

court in Reaugh v. lnner Harbour Hosp., 447 S.E.2d 617 (Ga. Ct. App. 1994), simply assumed (without any discussion whatsoever) that a corporation was a

person for RICO purposes. Id. at 621-622. To the extent that this passing

I

comment was persuasive intermediate appellate court precedent, that precedent

was overruled four years later by the Georgia Supreme Court in Clark.

I

I

22

I

I Title 16 of the Georgia Code would be applicable to corporations. It would also

I

render numerous provisions within the Georgia code that explicitly differentiate

I

"person[s]" from "corporation[s]" redundant and meaningless. 16

I

Appellees also cite § 16-14-6 and § 16-14-15 of Georgia RICO,

I

which provide for relief against and the registration of corporations in certain

I

circumstances, as evidence of legislative intent to hold corporations criminally

liable for RICO violations. ABr. at 38-39. But these provisions do not imply that
I RICO claims against corporations as persons fall within the ambit of § 16-2-

I

22(a)(1); rather, they provide certain forms of relief and impose certain

I

requirements to ensure that corporations are not turned into enterprises by

I

individual RICO defendants. See O.C.G.A. § 16-14-4 (imposing RICO liability

only on "person[s]" who maintain control of "any enterprise," but not imposing
I

liability on the enterprise itself); see also Five Star Partners, L.P. v. Vincent

I

Netherlands Properties, B.V. (In re Five Star Properties, L.P.), 169 B.R. 994,

I

1003 (Bankr. N.D. Ga. 1994) (purpose of § 16-14-15 is to prevent "the remote

I

possibility that an alien criminal enterprise might thereby be encouraged to file a

I

16See, e.g., O.C.G.A. § 16-13-32(b) (2004) ("It shall be unlawful for any person or

corporation, "knowing the drug related nature of the object, to sell, lend, rent, lease,

I

give, exchange, or otherwise distribute to any person any drug related object."); id.

§§ 16-13-32.1-32.2; see also, e.g., id. § 16-13-72 ("it shall be unlawful for any

I

person, firm, corporation, or association to sell, give away, barter, exchange,

I

23

I

I

report or register that it would not otherwise file."), t7 Accordingly,

the statutes

I cited by Appellees do not provide a "clear[] indicat[ion]" that Georgia wanted to

I

hold corporations vicariously liable for state-law RICO violations.

i

o

Appellees

Have Not Pied Corporate

Liability

for a

Georgia RICO Violation

Pursuant

to O.C.G.A. § 16-2-

I

22(a)(2).

i

To plead a Georgia RICO claim against Mohawk under § 16-2-

22(a)(2),

Appellees

must allege that the illegal conduct was "authorized,

i

requested,

commanded,

performed,

or recklessly

tolerated by the board of

i

directors or by a managerial official." Appellees' complaint does not mention the

i

conduct of Mohawk's

officers or directors at all, much less describe "which

i

[Mohawk] agent was responsible for [Mohawk's] violation of the Georgia RICO

statute." Byrne, 261 F.3d at 1105. _8
I

I

distribute, or possess in this state any dangerous drug").

i

17 Indeed, Appellees cite § 16-14-6(a)(3),

betray their failure to recognize this distinction when they

which permits courts to "[o]rder[] the dissolution

or

reorganization

of any enterprise."

I

t8 Instead, Appellees refer only to the conduct of unnamed "supervisors,"

R1, 1,

¶¶ 20-21, 28, 31, who do not qualify as "managerial official[s]" under Georgia

I

law. See O.C.G.A. § 16-2-22(b)(2)

(1968) ("managerial

official[s]" include

"officer[s] of the corporation or any other agent who has a position of comparable

authority for the formulation

of corporation

policy or the supervision

of

I

subordinate employees").

"[O]nly 'top' management is intended to be covered" by

the statute. Milita_ Circle Pet Ctr. No. 94, Inc. v. State, 353 S.E.2d 555, 559 (

I

Ga. Ct. App. 1987), rev'don other grounds, 360 S.E.2d 248 (Ga. 1987).

I

24

I

l
Appellees merely cite to one state criminal case dealing with state-
I law indictment requirements to defend the sufficiency of their pleadings regarding

I

Mohawk's potential liability under § 16-2-22(a)(2).

See ABr. at 41. This case,

I

however, is silent on federal civil pleading requirements.

See Guillen v.

I

Kuykendall, 470 F.2d 745, 747 (5th Cir. 1972) ("sufficiency

of pleadings are

determined by federal law, not local law"). Under the federal rules of pleading, a
I complaint must "contain either direct or inferential allegations respecting all the

I

material elements necessary to sustain a recovery under some viable legal theory."

I

Roe v. Aware Woman Center for Choice, hTc., 253 F.3d 678, 683 (1 lth Cir. 2001)

I

(quotation omitted).

Appellees simply have not alleged that an officer or the

Board of Directors authorized the conduct at issue. Accordingly,

their Georgia

I

RICO claim must be dismissed.

I

B.

Appellees Cannot Establish Proximate Causation Under Georgia

I

RICO.

Appellees' Georgia RICO claims rest on the sole predicate act of the
I

knowing acceptance of false identification documents in violation of 18 U.S.C.

I

§ 1546. See ABr. at 34 n.36. Thus, Appellees' theory of proximate cause for their

I

Georgia RICO claim is even more attenuated than the one they offer for their

I

federal RICO claim. At bottom, Appellees'

damages theory rests upon illegal

I

hiring, not the acceptance of false documents. As such, their already-attenuated

I

25

I

I

damages theory under Federal RICO lacks any credible causal nexus under

I

Georgia RICO.

Accordingly,

Appellees'

Georgia RICO claim should be

I

dismissed. See MBr. at 14-24, 27-28; supra Section II.

I

IV. APPELLEES'

UNJUST

ENRICHMENT

CLAIM

FALLS AS A

MATTER OF LAW.
I Finally, Appellees continue to press their unjust enrichment claim

I

despite the black letter rule that unjust enrichment lies only where the parties are

I

not governed by an express contract. St. Paul Mercury Ins. Co. v. Meeks, 508

I

S.E.2d 646, 647-648 (Ga. 1998); accord Stowers v. Hall, 283 S.E.2d 714, 714

(Ga. Ct. App. 1981) ("There can be no recovery on quantum meruit when the

I

action is based on an express contract.").

Appellees' only response to this

I

irrefutable proposition is to argue that they "have not alleged any express contract

I

in which Appellees accepted a particular wage."

ABr. at 42. Appellees'

I

complaint belies this assertion. Appellees allege that they are "current and former

hourly employees of Mohawk whose wages have been depressed."

R I 1, ¶ 1.

I

"[H]ourly employees" who receive "wages" for their work necessarily work

I

pursuant to an express contract, regardless of whether that contract is written or

I

oral. See Floyd v. Lamar Ferrell Chevrolet, Inc., 285 S.E.2d 218, 219 (Ga. Ct.

I

App. 1981) ("appellant's

allegations that she was employed by appellee for an

indefinite period at a fixed monthly wage sets forth a legally binding contract for
I

I

26

I

I one month's employment at the agreed wage" (internal quotation omitted)); see
I also Ades v. Werther, 567 S.E.2d 340, 342-343 (Ga. Ct. App. 2002) (rejecting trial

I

court's finding of unjust enrichment on the grounds that oral promise to repay loan

I

was a contract).

I

Indeed, the only way Appellees could bring a claim for unjust

I

enrichment against Mohawk would be to allege that Mohawk never agreed to pay

them any wages for the work that they performed. See Fleming v. Citizens &
I Southern Nat'l Bank, 253 S.E.2d 76, 78 (Ga. 1979) (action for unjust enrichment

I

lies only where "no consideration or benefit inures" to the party providing service

I

to the other party); United Companies Lending Corp. v. Coates, 520 S.E.2d 236,

I

238 (Ga. Ct. App. 1999) (same); Restatement (FirsO of Restitution § 107(1) (1937)

I

(person "who, pursuant to a contract with another, has.., conferred a benefit upon

him, is not entitled to compensation therefor other than in accordance with the

I terms of such bargain"). But if that were the case, then Appellees' RICO claims--

I

that Mohawk "depressed" the wages available to Appellees--would

be rendered

I

meaningless because there would be no wage to depress._9

I _9 Appellees either misapprehend or misrepresent Georgia state law when they

I

argue that their unjust enrichment claims should survive Mohawk's motion to dismiss because "an unjust enrichment claim may co[-]exist with an implied

contract." ABr. at 43. It is certainly true that a plaintiff can bring a claim for

I

breach of contract (whether express or implied in fact) coupled with a claim in the

I

27

I

I
Appellees seek to ignore Georgia law and circumvent the
I requirements for an unjust enrichment claim by analogizing their claim to that of

I

plaintiffs in civil antitrust cases. They offer no support for the notion that Georgia

I

courts would look to such a different body of law when considering an equitable

I

claim for unjust enrichment. In any event, Appellees are not like antitrust victims,

because antitrust victims suffer direct harm as consumers when they pay inflated

I prices as a result of a company's monopolistic conduct, whereas Appellees have

I

not paid anything to Mohawk at all. Instead, Appellees' asserted harm derives

I

solely from the effect of Mohawk's alleged conduct on bargained-for contract

I

rates. Under their theory, an), employee receiving wages below a market would

have an "equitable" claim to the difference. Such an approach is simply wrong as
I a matter of law. Bowman v. McDonough Realty Co., Inc., 237 S.E.2d 647, 648

I

(Ga. Ct. App. 1977) (courts do not "make a bargain for the parties" where

I

consideration was exchanged).

I

I

I

I

alternative for unjust enrichment should the court find that no contract between the parties existed. Here, however, the existence of a contract under Georgia law

between an employer and employee is not in doubt. And, as set forth above, such

I

a contract precludes recovery for unjust enrichment.

I

28

I

I

CONCLUSION

I

For these reasons, and those provided in Mohawk's opening brief., the

I

portions of the District Court's order denying dismissal of Appellees' Complaint

I

should be reversed with instructions to dismiss Appellees' Complaint with

I

prejudice.

I

Respectfully submitted,

I

ATTORNEYS FOR APPELLANT

I

I

Dated: November 5, 2004.

I

I

I

I

I

I

I

I

I

29

I

I

I

CERTIFICATE OF COMPLIANCE

I

I certify that this brief complies with the type-volume limitation set

I

forth in FRAP 32(a)(7)(B). This brief contains 6935 words.

I

I

I

I

I

I

I I

l

I

I

I

I

I

!

!

!

CERTIFICATE

OF FILING AND SERVICE

This is to certify that I have this day filed the foregoing by sending it

I

by third-party commercial carrier for deliver 5, to the clerk within three calendar

!

days to:

Thomas K. Kahn, Clerk

U.S. Court of Appeals for the 1 lth Circuit

!

56 Forsyth St. N.W.

Atlanta, Georgia 30303

! This is also to certify that I have this day served the Appellees with

!

the foregoing by having a copy of same deposited in the United States Mail in an

envelope, with sufficient First Class postage affixed thereon, properly addressed to

!

their counsel of record as follows:

!

Bobby Lee Cook, Esq.

COOK & CONNELLY

!

9899 Commerce Street Summerville, GA 30747

John E. Floyd, Esq. Joshua F. Thorpe, Esq. Ronan P. Doherty, Esq. Nicole G. Iannarone, Esq.

!

Matthew Thames, Esq.

BONDURANT, MIXSON & ELMORE LLP

GODDARD, THAMES,

1201 W. Peachtree Street, N.W.

!

HAMMONTREE & BOLDING 2716 Cleveland Hwy.

3900 One Atlanta Center Atlanta, GA 30309

P.O. Box 399

!

Dalton, GA 30722-0399

Howard Foster, Esq.

JOHNSON & BELL, LTD.

!

55 E. Monroe Street Suite 4100

Chicago, IL 60603

!

This 5th day of November 2004.f___.2v_._,

/

--: , ,f

/"

!

Ste%_Y.C3ttreau

!

Counsel for Defendant Mohawk Industries, Inc.

 
 I

I

0 -1

I

No.04-13740-AA

FILED _.S,C_URTOFAPPEALS _[!_T_ CIRCUF

!_EP 0 7 2004_

L

j

TFIOMAKS.KAHN

I

IN THE

.......

CLERR

UNITED STATES COURT OF APPEALS-----

I

FOR THE ELEVENTH CIRCUIT

SHIRLEY WILLIAMS, GALE PELFREY, BONNIE JONES,

I

and LORA SISSION, individually and on behalf of a class,

I

Plaintiffs-Appellees,

V.

I

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE NORTHERN DISTRICT

I

OF GEORGIA, ROME DIVISION

I

BRIEF OF APPELLANT MOHAWK INDUSTRIES, INC.

I

R. Carl Cannon

Carter G. Phillips

Rosemary C. Lumpkins

Juan P. Morillo

I

CONSTANGY, BROOKS & SMITH, LLC

Steven T. Cottreau

230 Peachtree Street, N.W., Suite 2400

Brandi Feingold

I

Atlanta, Georgia 30303-1557 Telephone: 404-515-8622

SIDLEY AUSTIN BROWN & WOOD LLP

Facsimile: 404-525-6955
I

1501 K Street, N.W.
Telephone: 202-736-8000 Facsimile: 202-736-8711

I

Counsel for Appellant

I

I

I

I

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE

I

DISCLOSURE STATEMENT

I

Pursuant to Federal Rule of Appellate Procedure 26.1(a), Appellant

i

Mohawk Industries, Inc., tkrough undersigned counsel, states that there is no

parent corporation or publicly held corporation that owns 10% or more of Mohawk
I Industries, Inc.'s stock. In compliance with Eleventh Circuit Rule 26.1-1, Mohawk

I

Industries, Inc. hereby provides "a complete list of the trial judge(s), all attorneys,

I

persons, associations of persons, firms, pam_erships, or corporations that have an

i

interest in the outcome of the particular case or appeal, including subsidiaries,

conglomerates, affiliates and parent corporations, including any publicly held
I corporation that owns 10% or more of the party's stock, and other identifiable legal

I

entities related to the party":

I

(l) Bondurant, Mixon & Elmore, LLP, Attorneys for Appellees

I

(2) R. Carl Cannon, Attorney for Appellant

(3) Constangy, Brooks & Smith, LLC, Attorneys for Appellant

I (4) Bobby Lee Cook, Attorney for Appellees

I

(5) Cook & Colmelly, Attorneys for Appellees

I

(6) Steven T. Cottreau, Attorney for Appellant

(7) Ronan P. Doherty, Attorney for Appellees
I
(8) Brandi Feingold, Attorney for Appellant
I

I

I

I

(9) John E. Floyd, Attorney for Appellees

I

(10) Howard Foster, Attorney for Appellees

I

(11) Goddard, Thames, Harrunontree & Bolding, Attorneys for Appellees

I

(12) Mark D. Hopson, Attorney for Appellant

(13) Mark T. Hurst, Attorney for Appellant
I

(14) Nicole G. Iamaarone, Attorney for Appellees

I

(15) Jolmson & Bell, Ltd., Attorneys for Appellees

I

(16) Bomfie Jones, Appellee

I

(17) Rosemary C. Lumpkins, Attorney for Appellant

(18) Mohawk Industries, Inc., Appellant
I (19) Juan P. Morillo, Attorney for Appellant

I

(20) Honorable Harold L. Murphy, United States District Judge

I

(21) Gale Pelfrey, Appellee

I

(22) Carter G. Phillips, Attorney for Appellant

(23) Virginia A. Seitz, Attorney for Appellant
I (24) Sidley Austin Brown & Wood LLP, Attorneys for Appellant

I

(25) Lora Sisson, Appellee

I

(26) Matthew Thames, Attorney for Appellees

I

(28) Joshua F. Thorpe, Attorney for Appellees

(29) Shirley Williams, Appellee
I

I

ii

I

I

STATEMENT REGARDING ORAL ARGUMENT

I

Appellant Mohawk Industries, Inc. ("Mohawk") respectfully requests

I

that this Court schedule oral argument in this matter. Oral argument is warranted

I

because the question of whether Appellees have stated a cognizable claim under

the Racketeer Influenced and Corrupt Organizations Act ("R/CO"), 18 U.S.C.
I § 1961, et seq., involves issues of first impression in this Circuit with significant

I

consequences. For instance, this Court has not addressed whether a company's

I

hiring of its own employees may constitute participation in an enterprise through a

I

pattern of racketeering activity. Nor has the Court addressed whether an alleged

association of a company and its third party employment and recruiting agents can
I constitute a RICO enterprise. Indeed, the Seventh Circuit--the only other Circuit

I

to have addressed these identical issues--held that RICO claims identical to those

I

of Appellees failed as a matter of law. Accordingly, Mohawk believes that oral

I

argument will be helpful to this Court's consideration and disposition of the

important legal issues raised by this appeal.
I

I

I

I

I

I

iii

I

I

TABLE OF CONTENTS

I

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE

DISCLOSURE STATEMENT ..................................................................................

i

I

STATEMENT REGARDING ORAL ARGUMENT .............................................

iii

I

TABLE OF AUTHORITIES ...................................................................................

vi

I

STATEMENT OF JURISDICTION ..........................................................................

x

STATEMENT OF THE ISSUES ...............................................................................

1

I

STATEMENT OF THE CASE ..................................................................................

1

I

A. Nature Of Case And Course Of Proceedings ............................. 1

B. Disposition Below .......................................................................

2

I

STATEMENT OF FACTS ........................................................................................

4

I

SUMMARY OF THE ARGUMENT ........................................................................

5

STATEMENT OF THE STANDARD OF REVIEW ...............................................

7

I

ARGUMENT .............................................................................................................

8

I

I.

APPELLEES' FEDERAL RICO CLAIM FAILS AS A

MATTER OF LAW ..............................................................................

8

I

A. By Hiring Employees, Mohawk Only Participates In Its

Own Affairs--Not Those Of A RICO Enterprise ...................... 9

I

B. Appellees' Complaint Fails To Allege The Existence Of

An Enterprise With A Unified Structure And Conmlon

I

Purpose .....................................................................................

14

I]. APPELLEES LACK STANDING BECAUSE THEY HAVE

I

SUFFERED NO PROXIMATELY CAUSED INJURY TO

BUSINESS OR PROPERTY .............................................................

14

I

A. Appellees Have Suffered No Injury To "Business Or

Property." .................................................................................

16

I

I

iv

I

I

B°

Appellees' Damages Theory Is Impermissibly

I

Speculative ...............................................................................

18

C°

Appellees Are At Most Indirect Victims Of The Alleged

I

RICO Violations ......................................................................

22

I

III. APPELLEES' GEORGIA RICO CLAIMS FAIL AS A

MATTER OF LAW ...........................................................................

24

I

A°

Appellees Failed To Allege Facts Sufficient To Establish

That Mohawk Is Liable ............................................................

24

I

B°

Appellees Cannot Establish Proximate Causation Under

Georgia RICO ..........................................................................

27

I

IV. APPELLEES' UNJUST ENRICHMENT CLAIM FAILS AS A

MATTER OF LAW ...........................................................................

28

I

V,

CONCLUSION ..................................................................................

30

I

I

I I

I

I

I

I

I

I

V

I

I

I

TABLE OF AUTHORITIES

I

CASES

I

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

passim

I

Bd. of Regents of State Colls. v. Roth, 408 U.S. 564 (1972) ..................................

18

I

*Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., 140 F.3d 898 (llth Cir. 1998) ..........................................................

16, 22, 23

I

Brooks v. Blue Cross & Blue Shield of Fla., Inc.,

116 F.3d 1364 (llth Cir. 1997) ....................................................................

21

I

*Byrne v. Nezhat, 261 F.3d 1075 (1 lth Cir. 2001) ...........................................

24-26

I

Car Carriers, Inc. v. FordMotor Co., 745 F.2d 1011 (7th Cir. 1984) .................. 21

Chaset v. Fleer/Skyboxlnt'l,

300 F.3d 1083 (9th Cir. 2002) ............................

17-18

I

Ci O, of Jacksonville v. Dept. of Navy, 348 F.3d 1307 (1 lth Cir. 2003) ................... 2

I

*Clark v. Security Life Ins. Co. of Am., 270 Ga. 165 (1998) ..................................

25

I

Cochran v. Ogletree, 244 Ga. App. 537 (2000) .....................................................

29

I

Cox v. Adm 'r U. S. Steel & Carnegie, 17 F.3d 1386 (1 lth Cir. 1994) ................... 28

Crossland h_vesonent Co., Inc. v. Rhodes, 274 F. Supp. 2d 1302

I

(N.D. Fla. 2003) ............................................................................................

29

I

Danielsen v. Burnside-Ott Aviation Training CO'., Inc., 941 F.2d 1220 (D.C. Cir.

1991) .............................................................................................................

17

I

Dirt Hogs Inc. v. Natural Gas Pipeline Co., Inc.,

210 F.3d 389 (10th Cir. 2000) ......................................................................

10

I

I

vi

I

I

Doug Grant, Inc. v. Great Bay Casino Corp.,

I

3 F. Supp. 2d 518 (5th Cir. 1995) .................................................................

18

I

Dumas v. Major League Baseball Props., Inc., 104 F. Supp. 2d 1220 (S.D. Cal. 2000) ............................................................................................

17

I

Duracelllnc. v. SWConsultants, h tc., 126 F.R.D. 571 (N.D. Ga. 1989) .............. 21

I

*Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir. 1997) ....................................................................................

9, 10, 13

I

*Green Leaf Nursery v. E.I. DuPont De Nemours & Co.,

341 F.3d 1292 (1 lth Cir. 2003) ........................................................

15, 16, 28

I

Itollifield v. Monte Vista Biblical Gardens, Inc.,

251 Ga. App. 124 (2001) ..................................................................

28-29, 30

I ttolmes v. See. hTvestor Prot. Corp., 503 U.S. 258 (1992) ......................... 18, 22, 23

I

Honduras Aircraft Registry, Ltd. v. The Gov "t of Honduras,

129 F.3d 543 (1 lth Cir. 1997) ........................................................................

7

I

Jackson v. BellSouth Telecomms., 372 F.3d 1250 (1 lth Cir. 2004) ......................... 7

I

Kwickie/Flash Foods, hlc. v. Lakeside PetT'oleum, Inc.,

246 Ga. App. 729 (2000) ..............................................................................

29

I

Lerma v. Univision Communications, h zc., 52 F. Supp. 2d 1011

(E.D. Wis. 1999) ...........................................................................................

21

I

Maddox v. Southern Eng'g Co., 231 Ga. App. 802 (1998) ............................... 27, 28

I

Marshall County Bd. Of Educ. v. Marshall County Gas Dist.,

992 F.2d 1171 (1 lth Cir. 1993) ......................................................................

8

I

Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002) ............................ 22, 24

I

Mifitaty Circle Pet Ctr. v. State, 181 Ga. App. 657 (1987) ................................... 26

I

Moore v. PaineWebberlnc.,

189 F.3d 165 (2d Cir. 1999) ..................................... 15

I

vii

I

I

I

Morast v. Lance, 631 F. Supp. 474 (N.D. Ga. 1986) .............................................

27

I

N.G.L. Travel Assocs. v. Celebrity Cruises, Inc., 764 So. 2d 672 (Fla. Dist. Ct. App. 2000) .......................................................................

29, 30

I

Napier v. Bruce, No. 02 C 8319, 2004 WL 1194747

(N.D. Ill. May 27, 2004) .........................................................................

21-22

I

Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182 (1 l th Cir. 2002) ..................... 8

I

Price v. Pinnacle Brands, Inc., 138 F.3d 602 (5th Cir. 1998) ................................ 17

I

Ptyor v. CCEC, Inc., 257 Ga. App. 450 (2002) ......................................................

29

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

6, 9

I *Riverwoods Chappaqua Colp. v. Marine Midland Bank, N.A.,

30 F.3d 339 (2d Cir. 1994) ...........................................................................

10

I

*Sedima, S.P.R.L.v. Imrex Co., Inc., 473 U.S. 479 (1985) ........................ 6, 8, 9, 15

I

State v. Military Circle Pet Ctr., 257 Ga. 388 (1987) ...................................... 26, 27

I

In re TaxableMun. BondSec. Litig., 51 F.3d 518 (5th Cir. 1995) ......................... 18

I

Ta_,lor v. Bear Stearns & Co., 572 F. Supp. 667 (N.D. Ga. 1983) ........................ 21

Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) .............................. 20
I

Turnquist v. Elliott, 706 F.2d 809 (7th Cir. 1983) ..................................................

17

I

United States v. Goldin Industries, Inc., 219 F.3d 1271 (1 lth Cir. 2000) ............... 9

I

United States v. Neapolitan, 791 F.2d 489 (7th Cir. 1986) .................................... 10

I

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

6, 13, 14

WTSP-TI_, Inc. v. Number One Realty Center, Inc.,

I

490 So. 2d 1273 (Fla. Dist. Ct. App. 1986) ..................................................

29

I

viii

Zampatti v. TradebankInt'l Franchising Corp., 235 Ga. App. 333 (1998) .......... 29 STATUTES

8 U.S.C. § 1324 .........................................................................................

3, 4, 20, 21

18 U.S.C. § 1546 .................................................................................

3, 4, 21, 22, 28

'18 U.S.C. § 1961, etseq ............................................................................

iii, x, 1,4

*18U.S.C. § 1962(c) ................................................................................................

8

"18 U.S.C. § 1964(c) ................................................................................

6, 8, 15, 17

28 U.S.C. § 1292 ...........................................................................

x, 2

28 U.S.C. § 1331 .......................................................................................................

x

28 U.S.C. § 1367(c) ................................................................................................. Fed. R. Civ. P. 8 .................................................................................................

24 26, 27

Fed. R. Civ. P. 9(b) .................................................................................................

21

Fed. R. Civ. P. 12(b)(1) and 12(b)(6) ............................................................. *O.C.G.A. § 16-2-22 (a)(1), (a)(2), (b)(2) .....................................................

x, 7, 15 7, 25, 26

*O.C.G.A. § 16-14-1, et seq .................................................................................

1, 4

*O.C.G.A. § 16-14-2(b) ..........................................................................................

25

O.C.G.A. § 16-14-6(c) .............................................................................................

27

ix

I

I

STATEMENT OF JURISDICTION
I Appellant Mohawk Industries, Inc. ("Mohawk") appeals from the

I

judgment of the United States District Court for the Northern District of Georgia

I

(Murphy, J.) denying Mohawk's motion to dismiss Appellees' Complaint pursuant

I

to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). The District Court had jurisdiction over

Appellees' Complaint under 28 U.S.C. § 1331 and the Racketeer Influenced and

I Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq.

I

This Court has jurisdiction to review the District Court's judgment of

I

April 12, 2004, denying the dismissal of Appellees' Complaint pursuant to

I

28 U.S.C. § 1292. On May 27, 2004, the District Court amended its April 12, 2004

Order to permit Defendant to seek interlocutory review. Pursuant to 28 U.S.C.

I

§ 1292(b), on June 10, 2004, Mohawk timely filed a Petition for Permission to

I

Appeal. On July 28, 2004, this Court granted that petition. Accordingly, this

I

Court has jurisdiction to review the District Court's April 12, 2004 Order.

I

I

I

I

I

I

I

I

STATEMENT OF THE ISSUES
I A. Whether Appellees' Complaint alleges the existence of and participation in

I

an enterprise, as required by RICO, 18 U.S.C. § 1961, et seq.

I

B. Whether Appellees have standing to bring their RICO claims.

I

C. Whether Appellees state a claim under Georgia's RICO statute, O.C.G.A.

§ 16-14-1, etseq.

I D. Whether Appellees state a claim for unjust enrichment under Georgia law.

I

STATEMENT OF THE CASE

I

A. Nature Of Case And Course Of Proceedings

On January 6, 2004, Appellees filed a putative class action on behalf
I of former and current hourly employees of Mohawk Industries in Georgia.

I

Appellees alleged that Mohawk violated the Racketeer Influenced and Corrupt

I

Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., by hiring and harboring

I

persons unauthorized to work in the United States and by knowingly accepting

false identifications. Appellees claimed that this conduct resulted in the artificial

I suppression of wages that Mohawk paid to its legal employees.

I

On February 9, 2004, Mohawk moved to dismiss the Complaint,

I

arguing, in part, that Appellees' claims did not allege participation in a RICO

I

enterprise and advanced an impermissibly speculative wage suppression theory.

The Court granted in part and denied in part Mohawk's motion by Order dated

I

I

I

I

April 12, 2004. On April 23, 2004, Mohawk filed a motion with the District Court
I requesting pemtission to appeal. On May 27, 2004, the Court granted Mohawk's

I

motion. On June 10, 2004, Mohawk filed a petition for pemtission to appeal,

I

which this Court granted by order dated July 28, 2004.1

I

B. Disposition Below

The District Court granted in part and denied in part Mohawk's

I

motion to dismiss Appellees' Complaint. Specifically, the District Court held that

!

"[Appellees] have sufficiently alleged that [Mohawk] participated in the affairs of

I

a RICO enterprise as opposed to its own affairs, that a RICO enterprise exists

distinct from [Mohawk], and that a conmaon purpose and unified structure exists
I among the participants in the purported enterprise." R2,44, p.35-36 (April 12,

I

2004 Order). The District Court also held that Appellees adequately allege a

I

proximately caused injury to their business or property. R2,44, p.36-37. In

!

particular, the Court found that Appellees' allegation that "the presence of illegal

workers in the labor pool adversely has affected [Appellees'] ability to command
I higher wage rates," stated an injury to business or property, even though Appellees

!

agreed to work for the wages Mohawk paid them. R2,44, p.37. The District Court

I

I

Once the District Court certifies an order for appeal under § 1292(b), and this Court grants leave to appeal, the entire order becomes subject to interlocutory

appellate review. See Ci_ of Jacksonville v. Dept. of Navy, 348 F.3d 1307, 1310

I

(1 lth Cir. 2003).

I

I

I

also rejected Mohawk's argument that Appellees' damages theory was
I impermissibly speculative. R2,44, p.45.

I

In addition, the District Court permitted some of Appellees' Georgia

I

law claims to proceed. Specifically, the Court held that Appellees stated a claim

I

under Georgia RICO. R2,44, p.47-48. The Court concluded that Georgia law

requires Appellees to prove that the Mohawk board of directors or an officer
I approved of the alleged wrongdoing. R2,44, p.48. Although Appellees failed to

I

make such an allegation, the District Court excused the omission, concluding that

I

"[Appellees] simply must set forth the necessary proof at trial." R2,44, p.48.

I

The District Court, however, dismissed Appellees' Georgia RICO

claims based on violations of 8 U.S.C. § 1324, concluding that Georgia law does
I not include that provision in the defmition of racketeering activity. See R2,44,

I

p.49. Accordingly, Appellees' Georgia RICO claims rest solely on alleged

I

document fraud violations of 18 U.S.C. § 1546. 2 Additionally, the Court denied

I

Mohawk's Motion to Dismiss as to Appellees' claim of unjust enrichment based

on their wage suppression theory. 3

I

2 Section 1324 prohibits the bringing in, harboring, and hiring of unauthorized

I

workers. Section 1546 prohibits the knowing acceptance of false identification documents.

I

3 The District Court granted Mohawk's Motion to Dismiss as to Appellees' claim of unjust enrichment regarding workers' compensation savings concluding that

Appellees lacked standing because there was no relation between Appellees wages

I

and lower workers' compensation costs. R2, 44, p.52.

I

I

I

STATEMENT OF FACTS
I On January 6, 2004, Appellees filed a putative class action on behalf

I

of former and current hourly employees of Mohawk, under the Racketeer

I

Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. and under

I

Georgia's RICO Act, O.C.G.A. § 16-14-1, et seq. and Georgia's common law

unjust enrichment.

They allege that their "wages have been depressed by

I

Mohawk's employment and harboring of large numbers of illegal workers." RI,1,

I

p. I(7 1) (Complaint).

I

Appellees allege that Mohawk, "the second largest carpet and rug

I

manufacturer in the United States," violated federal immigration law by hiring and

harboring employees who are not authorized to work ha the United States and by

I

knowingly accepting false identifications.

See Rl,1, pp.2,5(77 2, 14-16).

!

Appellees allege five different RICO predicate acts. 4 Appellees assert that these

I

alleged predicate acts constitute RICO violations because Mohawk and its hiring

I

4 See RI,1, 7 59 ("Mohawk has violated [8 U.S.C. § 1324(a)(3)(A)] by employing

more than 10 aliens per year each year for the last four years"); id. at 7 60

I

("Mohawk has violated [the harbo_lg provision, § 1324(a)(1)(A)(iii)]

by

(a) knowingly employing illegal aliens within its factories, warehouses and other

facilities in Georgia and/or (b)taking steps to shield those illegal aliens from

I

detection"); id. at 7 61 ("Mohawk has knowingly or recklessly encouraged [m]any

undocumented aliens that are discovered to return to the United States and to their

I

employment at Mohawk in violation of [8 U.S.C. § 1324(a)(1)(A)(iv)]"); id. 77 16-

17, 63-64 [same](alleging that Mohawk accepted and used improper work

i

authorization documents in connection with hiring employees [in violation of 18 U.S.C. § 1546(a)].

I

4

I

I

recruiters constitute a RICO enterprise. See RI,1, p.24-25(¶¶ 76, 77, 79) (alleging
i an "association-in-fact enterprise with third party employment agencies and other

I

recruiters").

The only recruiter identified in the Complaint is Temporary

I

Placement Services ("TPS"). RI,1, p.24(¶ 76).

I

Appellees seek a retroactive pay increase (in the form of treble

damages) on the ground that their wages are and were "lower than they would
I [have] be[en] if Mohawk did not engage in this illegal conduct." RI,1, p.10(¶ 33).

I

Finally, Appellees claim that Mohawk has been unjustly enriched, alleging that

I

"cost savings permit Mohawk to earn larger profits than it would be able to earn if

I

it did not employ and harbor illegal workers." See RI,1, p.32(¶ 109).

SUMMARY OF THE ARGUMENT
I Appellees' RICO claims are insufficient as a matter of law. Indeed,

I

the Seventh Circuit recently affirmed the dismissal of a materially identical

I

complaint. In Baker v. 1BP, lnc., as here, a class of current and former employees

I

alleged that defendant knowingly hired unauthorized workers and that such hiring

resulted in depressed wages to authorized workers. 357 F.3d 685,686-87 (7th Cir.

I

2004). The Baker court concluded that plaintiffs' contentions did not adequately

I

allege the existence of and participation in a RICO enterprise because hiring only

I

constitutes participation in the employer's own affairs and not those of a RICO

I

enterprise. See Baker, 357 F.3d at 691.

I

I

I

I

As in Baker, Appellees' Complaint in this case fails to state a claim.

First_, Appellees fail to allege participation in a RICO enterprise. Under RICO, the

I

defendant must be distinct from the alleged enterprise and the defendant must

I

conduct the affairs of the enterprise--not just its own affairs--through a pattern of

I

racketeering activity. See Reves v. Ernst & Young, 507 U.S. 170, 185 (1993);

Sedima, S.P.R.L.v. hnrex Co., 473 U.S. 479, 496 (1985). Here, Appellees' alleged
I

injury stems solely from Mohawk's hiring of its own employees. Such conduct is

I

Mohawk's operation of itself, not an enterprise. In short, a corporation cannot be

I

held liable under RICO for conducting routine business activity, like hiring.

I

Appellees RICO claims also fail because a company combined with its recruiting

agents performing an ordinary business function does not constitute a RICO
I enterprise. Lastly, the alleged enterprise is insufficient because it consists of

I

members with divergent, not conmaon, goals. See United States v. Turkette, 452

I

U.S. 576, 583 (1981).

I

Second, Appellees lack standing under RICO because they were not

"injured in [their] business or property by reason of [the alleged conduct]." See 18
I U.S.C. 1964(c). Simply put, the receipt of a bargained-for wage is not an injury to

I

business or property. Moreover, Appellees lack standing because they are merely

I

indirect victims of the alleged conduct. Additionally, Appellees' damages theory

I

is too speculative to satisfy RICO's proximate cause requirements. This is so

I

I

I

I

because myriad factors influence wage rates and it is therefore impossible to

ascertain what, if any, impact the alleged presence of unauthorized workers had on

I

the wages of Mohawk's employees.

I

Third., Appellees' claims under Georgia RICO also fail because under

I

Georgia law, a corporation cannot be vicariously liable where there is no showing

I

that the board of directors or officers of the corporation authorized or recklessly

tolerated the alleged predicate criminal acts. See O.C.G.A. § 16-2-22(a)(2) (2004).

I

Appellees' Complaint fails to allege that any director or officer of Mohawk

I

authorized the alleged conduct and accordingly Appellees Georgia RICO claina is

I

deficient as a matter of law.

Fourth, all of Appellees' unjust enrichment claims should have been
I

dismissed.

Unjust enrichment is inapplicable where, as here, a company

I

contracted to pay a particular wage and paid that wage pursuant to its contract.

I

STATEMENT OF THE STANDARD OF REVIEW

I

This Court reviews de novo a district court's denial of a motion to

dismiss a claim for failure to state a claim under Fed. R. Civ. P. 12(b)(6). See
I Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1262 (1 lth Cir. 2004); Honduras

I

Aircraft Registly, Ltd. v. Gov't of Honduras, 129 F.3d 543, 546 (1 lth Cir. 1997).

I

"To survive a motion to dismiss, plaintiffs must do more than merely state legal

I

conclusions; they are required to allege some specific factual bases for those

I

I

I

conclusions or face dismissal of their claims." Jackson, 372 F.3d at 1263.
I

Although the complaint must be read liberally, the court may not make liberal

I

inferences beyond what has actually been alleged. "[C]onclusory allegations,

I

unwarranted deductions of facts or legal conclusions masquerading as facts will

I

not prevent dismissal." Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188

(llth Cir. 2002). "[W]hen, on the basis of a dispositive issue of law, no
I

construction of the factual allegations [of a complaint] will support the cause of

I

action," dismissal is appropriate. Marshall County Bd. Of Educ. v. Marshall

I

Count. Gas Dist., 992 F.2d 1171, 1174 (1 lth Cir. 1993).

I

ARGUMENT

I. APPELLEES' FEDERAL RICO CLAIM FALLS AS A MATTER OF

I

LAW.

To state a RICO claim under § 1962(c), Appellees must allege
I

"(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity."

I

Sedima, 473 U.S. at 496; see also 18 U.S.C § 1962(c). This Court has

I

unequivocally held that without proof of the existence of and participation in an

I

enterprise, there can be no violation of RICO. See Jackson, 372 F.3d at 1264

("Essential to any successful RICO claim are the basic requirements of establishing
I a RICO enterprise and a 'pattern of racketeering activity.'"). In addition, the RICO

I

Act imposes a statutory limitation on who is entitled to file suit under the statute.

I

See 18 U.S.C. § 1964(c). Specifically, § 1964(c) provides that only persons

I

I

I

"injured in [their] business or property by reason of [the alleged misconduct]" have
I

standing to sue. Here, Appellees' claim fails because they cannot show as a matter

I

of law that the alleged hiring constitutes participation in an enterprise's affairs or

I

that they have suffered an injury to business or property as a result.

I

A. By Hiring Employees, Mohawk Only Participates In Its Own Affairs--Not Those Of A RICO Enterprise.

I

RICO "liability depends o11 showing that the defendants conducted or

I

participated in the conduct of the 'enterprise's affairs,' not just their own affairs."

Reves, 507 U.S. at 185. Accordingly, unless there is an enterprise that is distinct

I from the defendant itself, there can be no RICO violation. See Sedima, 473 U.S. at

I

496-497; Baker, 357 F.3d at 692; Fitzgerald v. Chrysler Corp., 116 F.3d 225,227-

I

228 (7th Cir. 1997). 5 The necessity of pleading the existence of and participation

in the affairs of a RICO enterprise is not merely a technical requirement, but is
I

fundamental to the purpose of RICO. "The central role of the concept of enterprise

I

under RICO cannot be overstated. It is precisely the criminal infiltration and

I

manipulation of organizational structures that created the problems which led to

I

5 This is so even though the association may be informal. Appellees relied heavily

on United States v. Goldin Industries, Inc., 219 F.3d 1271 (1 lth Cir. 2000) below

I

to argue that they have satisfied the RICO enterprise requirements because an enterprise need not possess an "ascertainable structure." See R2,37,6-7. That an

association may be informal or indirect to satisfy the enterprise requirement does

I

not eviscerate the requirement.

Indeed, this Court, in Goldin, expressly

acknowledges that "RICO forbids the imposition of liability where the enterprise is

I

nothing more than a subdivision or a part of the person." See Goldin, 219 F.3d at 1276.

I

I

I

I

the passage of RICO." United States v. Neapolitan, 791 F.2d 489, 500 (7th Cir.

1986). Accordingly, the Circuit Courts that have addressed this question have

I

found that a defendant (consisting of nothing more than itself and its employees

I

and agents) involved in the operation of its routine business is not RICO enterprise.

I

See e.g., Dirt Hogs Inc. v. Natural Gas Pipeline Co., 210 F.3d 389, 2000 WL

368411 at *3 (10th Cir. April 10, 2000) (unpublished decision) ("Because the
I

enterprise identified by plaintiff appears to be nothing more than another name for

I

[defendant] and its agents, conducting the corporation's business, the complaint

I

fails to describe an enterprise distinct from the defendant corporation.");

I

Fitzgerald, 116 F.3d at 228 (7th Cir. 1997) ("[W]here a large, reputable

manufacturer deals with its ... agents in the ordinary way, so that their role in the
I manufacturer's illegal acts is entirely incidental, differing not at all from what it

I

would be if these agents were the employees of a totally integrated enterprise, the

I

manufacturer plus its ... agents ... do not constitute an enterprise within the

I

meaning of [RICO]."); Rivelq.voods Chappaqua Corp. v. Marine Midland Bank, 30

F.3d 339, 344 (2d Cir. 1994) ("[B]y alleging a RICO enterprise that consists
I merely of a corporate defendant associated with its own employees or agents

I

carrying on the regular affairs of the defendant, the distinctness requirement many

I

not be circumvented.").

I

I

10

I

I

I

Under this line of authority, Appellees' Complaint fails to allege a

RICO enterprise. Specifically, Appellees' enterprise allegations merely state that

I

Mohawk and its recruiting agents hired Mohawk employees. See RI,1, p.24(¶ 76)

I

("Mohawk has engaged ... in an association-in-fact

enterprise with third party

I

employment agencies and other recruiters, including Temporary Placement

I

Services ("TPS"), that supply Mohawk with illegal workers."). The hiring of

Mohawk employees, by Mohawk and its agents, is simply Mohawk carrying on its

I

regular business affairs.

I

Indeed, the Seventh Circuit recently affirmed the dismissal of a

I

complaint in a case materially identical to this one. Specifically, in Baker, as here,

current and former employees filed a class action on behalf of hourly employees
I under RICO alleging that defendant knowingly hired unauthorized workers and

I

that such hiring resulted in depressed wages to legal employees. See Baker, 357

I

F.3d at 687. In Baker, the district court dismissed plaintiffs' complaint because

I

plaintiffs did not meet the enterprise requirements of RICO. See Baker, 357 F.3d

at 692. The Baker court recognized that plaintiffs had merely alleged that
I defendant and its employment recruiters hired defendant's employees. The Court

I

held that this was insufficient to state a claim under RICO:

I

But how is [Defendant] conducting the affairs of an

enterprise through a pattern of racketeering activity? The

I

complaint alleges that the 'enterprise' is [Defendant] plus the persons and organizations who help it find aliens to

I

11

I

I

hire .... [T]he complaint comes perilously close to

I

alleging that [Defendant] plus its agents and employees is

the 'enterprise,' a theory that won't fly .... The nub of the

I

complaint

is that [Defendant]

operates

itself

unlawfully .... Without a difference between the defendant

and the 'enterprise' there can be no violation of RICO.
I

Baker, 357 F3d at 691-92. As in Baker, Appellees' allegations here begin and end

I

with Mohawk's alleged unlawful hiring of unauthorized workers. This, however,

I

is not a legally sufficient basis for a RICO claim.

I

The danger of sanctioning Appellees' broad RICO liability theory is

apparent. Under Appellees' theory, any company engaged in conducting its own
I affairs through its employees and agents will be subject to RICO claims for treble

I

damage liability. That is simply not the intent and purpose of RICO. Indeed, if

I

successful, Appellees' theory would allow future plaintiffs to bring RICO claims

I

simply by alleging that a company fraudulently manages itself or that its

relationships with its business partners are fraudulent (and, for example, use mail
I or wire fraud as the RICO predicate acts). Small and large companies would

I

become vulnerable to RICO claims attacking the manner in which they engage in

I

routine business practices such as hiring. This would be a substantial departure

I

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
I

I

I

12

I

I

separate, independent third party. 6
I

Previous attempts to expand RICO in tiffs fashion have been rejected.

I

For example, in Fitzgerald, the Seventh Circuit concluded that a defendant

I

manufacturer's agents, who participated in retail sales of automobiles with the

I

defendant, did not meet the RICO enterprise requirement. Fitzgerald, 116 F.3d at

228. As Judge Posner explained:
I

Read literally, RICO would encompass every fraud case

I

against a corporation, provided only that a pattern of fraud and some use of the mails or telecommunications to

further the fraud were shown; the corporation would be

I

the RICO person and the corporation plus its employees

the 'enterprise.'

The courts have excluded this far-

I

fetched possibility by holding that an employer and its employees cannot constitute a RICO enterprise.

I

What we cannot imagine, and what we do not fmd any

support for in appellate case law, is applying RICO to a

I

free-standing corporation such as [Defendant] merely because [Defendant] does business through agents, as

virtually every manufacturer does.
I Fitzgerald, l l6 F.3d at 226-27. Similarly, here, Appellees merely allege an

I

enterprise consisting of a company and its recruiting agents. As such, their

I 6 Indeed, Appellees' Complaint seeks to expand RICO liability beyond previously

I

recognized boundaries. In fact, "[t]he prototypical RICO case is one in which a person bent on criminal activity seizes control of a previously legitimate finn and

uses the finn's resources, contacts, facilities, and appearance of legitimacy to

I

perpetrate more, and less easily discovered, criminal acts that he could do in his

own person, that is, without channeling his criminal activities through the

I

enterprise that he has taken over." FitzgeraM, 116 F.3d at 227; See also Turkette, 452 U.S. 576, 591 (1981).

I

13

I

I

Complaint fails as a matter of law.
I

B. Appellees' Complaint Fails To Allege The Existence Of An

I

Enterprise With A Unified Structure And Common Purpose,

To withstand dismissal, Appellees' Complaint must allege the
I existence of an enterprise with a common purpose and unified structure. See, e.g.,

I

Turlcette, 452 U.S. at 583 (An association-in-fact enterprise is "a group of persons

I

associated together for a conmaon purpose of engaging in a course of conduct").

I

Participants in an alleged RICO enterprise consisting of an employer and its

recruiters lack such a common purpose or unified structure.
I Here, Appellees allege that "[t]he recruiters and Mohawk share the

I

conunon purpose of obtaining illegal workers for employment by Mohawk." R1,1,

I

p.25(¶ 77). The court in Baker rejected a sinfilar allegation of common purpose.

I

As the Baker court explained, the employer "wants to pay lower wages; the

recruiters want to be paid more for sen, ices rendered (though [the employer] would

I like to pay them less) .... These are divergent goals." Baker, 357 F.3d at 691.

I

Because Mohawk and its recruiters have different goals and purposes, they cam_ot

I

comprise a RICO enterprise as a matter of law. Accordingly, for this independent

I

reason, Appellees' RICO claims are insufficient as a matter of law.

II, APPELLEES

LACK STANDING

BECAUSE

THEY HAVE

I

SUFFERED NO PROXIMATELY OR PROPERTY.

CAUSED INJURY TO BUSINESS

I

Appellees' claim for a retroactive wage increase fails because

I

14

I

I

I

Mohawk's alleged hiring and harboring of unauthorized workers did not

proximately cause an injury to their business or property. In order to sue for a

I

violation of RICO, a plaintiff must allege that he has been "injured in his business

I

or property by reason of a [RICO] violation." 18 U.S.C. § 1964(c); see also

I

Sedima, 473 U.S. at 496 ("[P]laintiff only has standing if ... he has been injured in

I

his business or property by the conduct constituting the violation.").

Thus,

causation of an injury is not oIfly an element of Appellees' claim, but also a

I

statutory prerequisite to standing under RICO. 7 To show injury "by reason of" a

I

RICO violation, a RICO plaintiff must set forth allegations showing that the

I

violation is the proximate cause of the injury to plaintiff's business or property.

See Green LeafNursel y v. E.L DuPont De Nemours & Co., 341 F.3d 1292, 1307
I (1 lth Cir. 2003) ("In order for a pattern of racketeering activity to be a cognizable

I

cause of civil RICO injury to a private plaintiff, one or more of the predicate acts

I

nmst not Olfly be the 'but for' cause ... but the proximate cause as well.").

I

Additionally, a plaintiff must show a "'direct relation between the

injury asserted and the injurious conduct alleged,'" that is, "the alleged conduct
I

I

7 There is some confusion as to how to characterize challenges to RICO standing. See, e.g., Moore v. PaineWebbel, Inc., 189 F.3d 165, 169 n.3 (2d Cir. 1999)

(noting that a similar challenge should be treated as a motion under Fed. R. Civ. P.

I

12(b)(1) for lack of subject matter jurisdiction). This Court has not yet spoken to

the issue, and Mohawk accordhlgly moved below under both Fed. R. Civ. P.

I

12(b)(l) and 12(b)(6). The district court chose to evaluate this issue under 12(b)(6). See R2,44,12 n.2.

I

15

I

I

was 'aimed primarily' at a third party." See Green Leaf Nursery, 341 F.3d at 1307
I (quoting Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., h_c., 140 F.3d

I

898, 906 (1 lth Cir. 1998)) (emphasis added) (holding that a party whose alleged

I

injuries result from "the misfortunes visited upon a third person by the defendant's

I

acts lack standing to pursue a claim under RICO). Put simply, "'the test for RICO

standing is whether the alleged injury was directly caused by the RICO violation,
I

not whether such harm was reasonably foreseeable.'"

See Green Leaf Nursely,

I

341 F.3d at 1308 (quoting Bivens, 140 F.3d at 908. In this case, Appellees'

I

damages theory fails as a matter of law because (1) payment of a bargained-for

I

wage does not constitute an injury to "business or property;" (2)Appellees'

damages theory is impermissibly speculative; and (3)Appellees are, at most,
I indirect victims of Mohawk's alleged ilmnigration law violations.

I

A. Appellees Have Suffered No Injury To "Business Or Property."

I

Appellees accepted employment at an agreed-upon wage rate. They

do not allege that Mohawk failed to pay them that rate. Instead, they seek a
I retroactive wage increase comprised of the difference between the wages they
I actually received and the wages that they assert they would have received in a

I

labor market that did not include the unauthorized workers that Mohawk allegedly

I

added to the labor market. RI,1, p.10 (¶33). They seek this additional

compensation even though Appellees received the precise wages they bargained
I

I

16

I

I

for with Mohawk.
l

Appellees' claim for a retroactive wage increase fails under RICO

I

because they have not suffered an injury to their business or property. Instead,

I

they received the full "benefit of their bargain." Dumas v. Major League Baseball

I

Props., Inc., 104 F. Supp. 2d 1220, 1222 (S.D. Calif. 2000). And, the case law is

clear that an employee is entitled to bargained-for wages, but not to more. See,
I e.g., Price v. Pinnacle Brands, Inc., 138 F.3d 602, 606-07 (5th Cir. 1998) (holding

I

that the plaintiffs had failed to allege any injury to "business or property" because

I

"plaintiffs do not allege that they received something different than precisely what

I

they bargained for."), s Accordingly, because Plaintiffs received the full benefit of

their bargain, they lack standing to bring a RICO claim.
I Appellees also lack standing because their interest in the higher wages

I

they could have hypothetically obtained is too abstract, intangible, and speculative

I

to constitute an interest in "business or property." See 18 U.S.C. § 1964(c). RICO

!

requires a plaintiff to provide "proof of concrete financial loss." See Chaset v.

I

8 See also Turnquist v. Elliott, 706 F.2d 809, 812 (7th Cir. 1983) (finding that

plaintiff lacked a property interest in wages that defendant had not agreed to pay

I

because "[n]o one every promised to pay [plaintiff] the prevailing rate or suggested that he should be paid at that rate."). Danielsen v. Burnside-Ott Aviation Training

Ctr., 941 F.2d 1220, 1229 (D.C. Cir. 1991) (expressing doubt about whether

I

plaintiffs' claim--that the misclassification of their work and wage rate entitled

them to higher wages--was an interest in "business or property" because "each

I

employee in fact received precisely the compensation the agreed work.").

bargained for in return for

I

17

I

I

Fleer/Skybox Int'l, 300 F.3d 1083, 1087 (9th Cir. 2002); see also Bd. of Regents of
I State Colls. v. Roth, 408 U.S. 564, 577 (1972) (stating that "[t]o have a property

I

interest in a benefit, a person clearly must have more than an abstract need or

I

desire for it ... more than a unilateral expectation of it. He must, instead, have a

I

legitimate claim of entitlement to it."); Doug Grant, Inc. v. Greate Bay Casino

Corp., 3 F. Supp. 2d 518, 534 (D.N.J. 1998) (stating that "[a] lost opportunity to
I obtain a financial benefit is too speculative to constitute an injury to business or

I

property under RICO."). Here, Appellees' mere desire for a wage higher than the

I

one they agreed to accept and in fact received is not a tangible interest in "business

I

or property" within the meaning of RICO. Thus, because Appellees have not

adequately alleged an injury to their "business or property," they lack standing to
I b_lg a RICO claim.

I

B. Appellees' Damages Theory Is Impermissibly Speculative.

!

Appellees' causation theory also fails because it is too speculative to

meet the demands of proximate causation. See In re Taxable Mun. Bond See.
I Litig., 51 F.3d 518, 523 (5th Cir. 1995). In short, speculative damages are not
I compensable under RICO. Id. "The less direct an injury is, the more difficult it

I

becomes to ascertain [what] amount of a plaintiff's damages [are] attributable to

I

the [RICO] violation, as distinct from other, independent factors." Holmes v. Sec.

InvestorProt. Corp., 503 U.S. 258,269 (1992).
I

I

18

I

I

Appellees allege that "Mohawk's employment and harboring of large
I numbers of illegal workers has enabled Mohawk to depress wages and thereby to

I

pay all of its hourly employees, including legally employed workers ..., wages that

I

are lower than they would be if Mohawk did not engage in this illegal conduct."

I

R I,I, p.10 (¶ 33). These allegations are insufficient as a matter of law because the

alleged hiring of unauthorized workers and their effect on wages is inherently
I uncertain and impossible to measure. A wage rate indisputably depends upon

I

many factors, including the demand for labor in the relevant market, the supply of

I

qualified laborers, the profitability of the employers and the industry as a whole,

I

and the state of the local, regional, national and international economies, to name a

few relevant variables.

At bottom, here, it will simply be impossible to

I

approximate the extent to which Appellees' wages were depressed (if at all) by

I

Mohawk's alleged immigration law violations as opposed to the numerous other

I

factors affecting the relevant labor market(s) or Appellees' individual employment

I

decisions and skills. 9

Indeed, Judge Posner in the Baker decision discussed the flawed
I nature of plaintiffs' causation theory, which is identical to Appellees' theory:

I

9 Moreover, Appellees' contention that they would command a higher wage absent

I

the presence of unauthorized workers is not a foregone conclusion. Mohawk

would not necessarily pay a higher wage. One practical consequence of a rising

I

tide of wages, is that Mohawk may simply abandon the market and take its business elsewhere (e.g., offshore).

I

19

I

I

An increased supply of labor logically affects, not just

I

the wages at [the employer's] plant, but wages

throughout the region (if not the country). Workers can

I

change employers (leaving [the employer] for higher pay elsewhere), and this process should cause equilibration

throughout the labor market. Yet plaintiffs' theory is not

I

that too many aliens depress wages around [employer

plant]; it is that [the employer] pays lower wages than

I

some competitors, and that effect would be very hard to

attribute

to particular

violations

of 8 U.S.C.

§ 1324(a)(3)(A).

Suppose that plaintiffs believed that

I

[their employer] has violated the Fair Labor Standards

Act by failing to calculate other workers overtime

I

premium; could plaintiffs obtain damages from [the employer] even though it had paid them all that the FLSA

requires?
I Baker, 357 F.3d at 692. _°

I

Moreover, Appellees' theory of causation misunderstands the nature

I

of labor markets. For example, Mohawk is not the only employer in Georgia. If

I

Mohawk were, in fact, paying "depressed wages" to its employees, Plaintiffs--

who are legal workers--could

(and presumably would) seek jobs with other

I

employers who are not suppressing wages. Yet Plaintiffs allege that Mohawk still

I

attracts a workforce of "approximately 31,780 persons," while only "hundreds"

I

_0Recently, the Sixth Circuit permitted a wage suppression theory of damages to

survive a motion to dismiss. See Trollinger v. Tyson Foods, Inc., 370 F.3d 602

I

(6th Cir. 2004). The Court, however, expressed doubt about plaintiffs ability

ultimately to prevail on the proximate cause issue. Trollinger, 370 F.3d at 619

I

("Tyson may be right--but we cannot say so at this preliminary stage in the

proceeding.").

The Sixth Circuit, however, did not address the RICO enterprise

issues raised by this appeal. Indeed, the Court specifically noted that the issues

I

remained open on remand.

I

20

I

I

may be illegal. RI,1, pp.2,19-20(¶¶ 2, 61). Such a causation theory is nonsensical.
I It is contrary to logic and fundamental economics to suggest that a single employer

I

can suppress wages in a competitive market. See Baker, 357 F.3d at 692

I

(plahltiffs' theory is "that [the employer] pays lower wages than some competitors,

I

and that effect would be very hard to attribute to particular violations of 8 U.S.C.

§ 1324(a)(3)(A)"). "To survive a motion to dismiss, a claim must make economic
I and factual sense." Lerma v. Univision Communications, Inc., 52 F. Supp. 2d

I

1011, 1025 (E.D. Wisc. 1999) (citing Car Carriers, Inc. v. Ford Motor Co., 745

I

F.2d 1101, 1110 (7th Cir. 1984)). Plaintiffs' RICO claims simply do not.

I

Finally, Plaintiffs have failed to allege how four of the five predicate

offenses--the harboring of illegal aliens, the inducing of illegal aliens to enter the
I United States, and the use and acceptance of false identification documents (RI,1,

I

p.19-21(¶¶ 61-64))---could have separately caused, let alone proximately caused,

I

wage suppression. 11 These predicate acts may (or may not) facilitate the

I

11 Moreover, the heightened pleading requirement of Rule 9(b) of the Federal

Rules of Civil Procedure should apply to these predicate acts (an issue that this

I

Court has not yet addressed). See Taylor v. Bear Stearns & Co., 572 F. Supp. 667,

682 (N.D. Ga. 1983) ("It seems, however, to this court ... that there are many

I

sound reasons for requiring that, like fraud, [RICO] must be pled with

particularity.").

In any event, it is well settled that Rule 9(b) applies to RICO

predicate acts sounding in fraud. See, e.g., Brooks v. Blue Cross & Blue Shield of

I

Fla., Inc., 116 F.3d 1364, 1380 (1 lth Cir. 1997); Duraeell bze. v. SW Consultants.

Inc., 126 F.R.D. 571,574 (N.D. Ga. 1989). Thus, at a minimum, Rule 9(b) should

I

apply to the alleged violations of Section 1546, which prohibits the acceptance of fi'audulent documents. This is clearly a fraud-based predicate act. See Napier v.

I

21

I

I

employment of illegal workers, but they do not independently increase the labor
I supply, and thus ca_mot proximately cause any wage suppression. Accordingly,

I

Plaintiffs lack standing to bring a RICO claim based on these predicate acts. In

I

sum, Appellees' causation theory is starkly implausible and purely speculative and

I

cannot withstand a motion to dismiss._Z

C. Appellees Are At Most Indirect Victims Of The Alleged RICO

I

Violations.

I

Appellees are also not the direct victims of Mohawk's alleged

conduct, as required to establish RICO standing. See Hohnes, 503 U.S. at 268;

I Bivens Gardens, 140 F.3d at 906. In Hobnes, the Supreme Court made clear that

I

one aspect of proximate cause is "a demand for some direct relation between the

I

Bruce, No. 02 C 8319, 2004 WL 1194747, at *4 n. 6 (N.D. Ill. May 27, 2004)

(identifying 18 U.S.C § 1546 as a criminal fraud statute).

I

J2 The District Court's reliance on Mendoza v. Zirkle Fruit Co. is misplaced. 301

F.3d 1163, 1171 (9th Cir. 2002). In that case, the Ninth Circuit reversed the

I

district court's dismissal of the complaint, but the Ninth's Circuit's conclusion

turned on plaintiffs' allegation "that the growers singularly have the ability to

I

define wages in this labor market, akin to monopsony or oligopsony power." Mendoza, 301 F.3d at 1171 (emphasis added). Further, plaintiffs alleged that

defendants "comprise a large percentage of the fruit orchards and packing houses

I

in the area, and therefore affect wages throughout the labor market." Thus, the

decision in Mendoza turned on the allegation of market power and the defendants'

I

ability to influence the relevant labor market. Here, by contrast, no allegation of market power could be made, because Appellees have not alleged and could not

credibly assert that Mohawk possesses such market power in the Georgia

I

employment markets.

Accordingly, the district court incorrectly relied on

Mendoza and should have concluded that Appellees' damages theory is

I

impermissibly speculative.

I

22

I

I

injury asserted and the injurious conduct alleged." Holmes, 503 U.S. at 268.
I "Thus, a plaintiff who complain[s] of harm flowing merely from the misfortunes

I

visited upon a third person by the defendant's acts [is] generally said to stand at too

I

remote a distance to recover." ld. at 268-69 (citing 1 J. Sutherland, Law of

I

Damages 55-56 (1882)); see also, e.g., Bivens Gardens, 140 F.3d 898 (harm to

corporation does not give shareholders RICO standing).
I Here, Plaintiffs are not the first victims of Mohawk's alleged illegal

I

hiring, hlstead, the direct victims, if any, are, as Appellee's own Complaint

I

acknowledges, the unauthorized workers themselves because they are less likely to

I

have the bargaining power to command equal wages and equal treatment with

respect to such matters as workers' compensation. See RI,1, pp.10-11 (¶¶ 31, 36).
I hadeed, the Appellees are no more direct victims of the alleged

I

conduct than any other worker in the labor pool employed by any other employer.

I

Plaintiffs allege that Mohawk added to the supply of workers in the market. RI,I,

I

p.11(¶ 35). /xal increase in the labor pool would (if it were to have any effect at all)

affect wages throughout the relevant labor market. Thus, all authorized workers in
I the labor market would be affected (if at all) equally by such conduct. In short, on

I

Appellees' allegations, they have suffered no greater injury than any other hourly

I

worker in Georgia. This is not a direct injury.

I

In sum, allowing Appellees' damages theory to proceed would place

I

23

I

I

this Circuit in conflict with (1) the Seventh Circuit's view in Baker that violations
I of the immigration laws cannot cause illegal wage depression and (2)the Ninth

I

Circuit's decision in Mendoza that market power is essential to establish a direct

I

relation between illegal hiring and wages paid to legal workers.

I

Ill. APPELLEES' LAW.

GEORGIA RICO CLAIMS FAIL AS A MATTER OF

I

A. Appellees Failed To Allege Facts Sufficient To Establish That Mohawk Is Liable. 13

I

Appellees' Georgia RICO claims against Mohawk fail because

I

Mohawk cannot be liable for the alleged actions. In Georgia, a corporation itself is

not capable of committing a crime. Specifically, in Byrne v. Nezhat, 261 F.3d
I 1075 (llth Cir. 2001), a medical patient brought a Georgia RICO civil claim

I

against Northside Hospital and other defendants. The district court dismissed the

I

action "on the ground that [the corporation] was not capable of committing a

I

crime." Id. at 1105. This Court upheld the dismissal holding that:

Under Georgia law, a corporation qua corporation, cannot be

I

held to answer for a crime, and therefore could not violate the

Georgia RICO statute. This is not to say that a corporation may

I

disregard the law with impunity.

If a crime has been

committed, the agents of the corporation who are responsible

are subject to prosecution.
I _3 If this Court decides that Appellee's federal RICO claims should have been

I

dismissed, this Court may wish to remand the remaining state law claims (Georgia

R/CO and unjust enrichment, see Sections III and IV) to the District Court for a

I

determination as to whether it should exercise supplemental jurisdiction over those claims. See 28 U.S.C. § 1367(c).

I

24

I

I

Byrne, 261 F.3d at 1105 (citations omitted).
I As such, a corporation can only be held civilly liable under Georgia

I

RICO under the laws of criminal vicarious liability. See O.C.G.A. § 16-14-2(b). _4

I

Vicarious liability, however, only attaches in certain narrowly defined situations.

I

See O.C.G.A. § 16-2-22. First, a corporation can be vicariously liable if the statute

defining the crime "clearly indicates a legislative purpose to impose liability" on
I corporations. O.C.G.A. § 16-2-22(a)(1). The Georgia Court of Appeals, however,

I

has foreclosed that path to recovery under Georgia RICO. See Clark v. SecuriO,

I

Life Ins. Co., 270 Ga. 165, 168 n.ll (1998) ("A corporation may also face

I

prosecution under O.C.G.A. § 16-2-22(a)(1) for a crime if the statute defining the

crime clearly indicates a legislative purpose to impose liability on a corporation.
I RICO, however, is not such a statute.").

I

Second, a corporation can be vicariously liable for the crimes of its

I

employees if "the crime is authorized, requested, COlmnanded, performed, or

I

recklessly tolerated by the board of directors or by a managerial official who is

acting within the scope of his employment on behalf of the corporation."

I

I

I

14 See also Clark v. Security Life hTs. Co., 270 Ga. 165, 168 (1998) ("Because [Georgia] RICO is directed to organized criminal elements, we conclude that it is

more appropriate to assess vicarious liability under it in accordance with liability

I

for criminal acts.").

I

25

I

I

O.C.G.A. § 16-2-22(a)(2) (2004)) 5 Thus, Appellees must show that Mohawk's
I board of directors or officers approved the alleged predicate acts. Appellees,

I

however, have not alleged and cannot show such approval. 16 Accordingly, the

I

Complaint cannot withstand a motion to dismiss. See Byrne, 261 F.3d at 1105

I

(upholding dismissal of RICO claim where "complaint neither alleges nor

mentions which [Mohawk] agent was responsible for [Mohawk's] violation of the
I Georgia RICO statute"). 17

I

The District Court, however, held that Appellees need not make

I

allegations required to show their entitlement to relief. R2,44, p.48. Instead, the

I

District Court relied on State v. Military Circle Pet Co'., 257 Ga. 388 (1987), to

conclude that the vicarious liability requirements of O.C.G.A. § 16-2-22 are issues
I of proof to be established at trial. R2,44, p.48-49. Military Circle, however, deals

I

with state law criminal indictment notice issues--not federal civil pleading

I

requirements:

I

t5 Managerial officials are defined by statute to include "an officer of the

corporation or any other agent who has a position of comparable authority for the

I

fommlation of corporate policy or the supervision of subordinate employees"

O.C.G.A. § 16-2-22(b)(2) (2004). "Not every corporate agent is a 'managerial

I

official,' only 'top' management is intended to be covered." Military Circle Pet Ctr. v. State, 181 Ga. App. 657, 660 (1987), rev'd on other grounds, 257 Ga. 388

(Ga. 1987).

I

16 Instead, Appellees make vague allegations about the conduct and statements of

umlamed and unidentified "supervisors." R1,1, ¶¶ 20, 21, 28, 31.

I

17This failure is fatal to the Complaint under Fed. R. Civ. P. 8.

I

26

I

I

We agree with the state that it was not required to allege

I

the provisions of O.C.G.A. § 16-2-22 in the accusations

in question ... Although the state must prove the

I

applicable provisions of the foregoing code sections at trial against a criminal defendant, it is not necessary that

the state allege these provisions in the accusation.

I

O.C.G.A. § 17-7-71 (c), and the standards of due process,

govern the requirements of the indictment, and these

!

requirements were satisfied in the accusations in question.

I

Militaty Circle, 257 Ga. at 389-90 (citations omitted). But, Fed. R. Civ. P. 8(a)

I

requires a pleader to set forth "a short and plain statement of the claim showing

that the pleader is entitled to relief." See Fed. R. Civ. P. 8(a). Here, because
I Appellees can neither prove nor even allege that a single board member or officer

I

approved the alleged conduct, the Georgia RICO claim fails as a matter of law.

I

B. Appellees Cannot Establish Proximate Causation Under Georgia RICO.

I

Similar to federal RICO, Georgia RICO requires Appellees to show

I

that they were "injured by reason of any violation of [Georgia] Code Section 16-

14-4... " O.C.G.A. § 16-14-6(c). The "by reason of" language in the Georgia
I statute imposes the same proximate cause requirement of its federal counterpart.

I

Morast v. Lance, 631 F. Supp. 474, 481 (N.D. Ga. 1986) (opinion of Murphy, J.)

!

("A party, indirectly injured by a RICO offense, does not have standing to bring a

I

RICO claim."), aft'd, 807 F.2d 926 (1 lth Cir. 1987); Maddox v. Southern Eng'g

Co., 231 Ga. App. 802, 806 (1998) (proximate cause is an "essential element" of a
I

I

27

I

I

Georgia RICO claim); Green Leaf Nursery, 341 F.3d at 1307 (quoting Cox v.
I Adm'r U.S. Steel & Carnegie, 17 F.3d 1386, 1399) (1 lth Cir. 1994) (concluding

I

that a predicate act is only "a proximate cause [of the RICO injury] if it is a

I

substantial factor in the sequence of responsible causation.").

Accordingly,

I

Appellees must allege that they have suffered an injury that was proximately

caused by a violation of the Georgia RICO statute. Appellees have failed to do so.
I Moreover, as the District Court ruled, the only statutory violation that

I

can constitute a predicate act under Georgia law is knowing acceptance of false

I

identification documents in violation of 18 U.S.C. § 1546. To have standing,

I

therefore, Appellees must claim that Mohawk's alleged acceptance and use of false

identification documents proximately caused a reduction in their wages. Such a
I theory is even more speculative than Appellees' causation theory with respect to

I

illegal hiring. Nowhere in the complaint is their injury directly tied to violations of

I

18 U.S.C. § 1546. Because they neglected to plead an "essential element" of their

I

claim, it fails as a matter of law. See Maddox, 231 Ga. App. at 806.

IV. APPELLEES'

UNJUST ENRICHMENT

CLAIM FAILS AS A

I

MATTER OF LAW.

Appellees have not stated a cognizable claim for unjust enrichment.
I An unjust emichment claim is premised on the principle that a party cannot induce,

I

accept, or encourage another to furnish or render an item or service of value to the

I

party and avoid payment for that item or service. See Hollifield v. Monte Vista

I

28

I

I

Biblical Gardens, Inc., 251 Ga. App. 124, 130-31 (2001). It is well established
I that unjust enrichment only applies when there is no legal contract between the

I

parties. "Unjust enrichment theory does not lie where there is an express contract."

I

P1yor v. CCEC, hzc., 257 Ga. App. 450, 452 (2002). 18

I

Moreover, unjust enrichment is inapplicable where payment has been

made for the benefit conferred. See Crossland Inv. Co. v. Rhodes, 274 F. Supp. 2d
I 1302, 1312 (N.D. Fla. 2003) ("More fundamentally, deciding how much [plaintiff]

I

should be paid for the work it did is not a job for the court after the fact. It was a

I

job for the parties in advance. They made the contracts they made and now must

I

live with them."). 19 Here, Mohawk agreed to pay a bargained-for wage to

I

18 See also Kwickqe/Flash Foods, Inc. v. Lakeside Petroleum, Inc., 246 Ga. App.

729, 730 (2000) (same); Cochran v. Ogletree, 244 Ga. App. 537 (2000) (same);

Zampatti v. Tradebank Int'l. Franchising Corp., 235 Ga. App. 333, 340 (1998)

I

(same).

19 See also N.G.L Travel Assocs. v. Celebrity Cruises, Inc., 764 So. 2d 672, 675

I

(Fla. Dist. Ct. App. 2000) ("[Plaintiff] failed to demonstrate that the [defendant]

retained a benefit [and] failed to demonstrate how the port charges [were] inflated

I

[by defendant] ... there is no dispute that [plaintiff] knew precisely what conmlission rate it would earn per cruise booking [and that it] agreed to accept that

amount as payment for the service provided. [Plaintiff] received exactly what it

I

bargained for. Unjust enrichment 'cannot exist where payment has been made for

the benefit conferred.'"); WTSP-TV, Inc. v. Number One Real_ Centep, Inc., 490

I

So. 2d 1273,1274 (Fla. Dist. Ct. App. 1986) (citation omitted) ("[U]njust enrichment ... is not applicable to a dispute of this kind. Plaintiff received the full

measure of its bargain with [defendant], i.e., its property was sold and the

I

conmaission was earned."). Although these cases arise in Florida, the elements of

unjust em'ichment are the same as those in Georgia: (1) plaintiff conferred a

I

benefit on the defendant, who has knowledge of the benefit; (2)the defendant accepts and retains the conferred benefit; and (3) under the circumstances it would

I

29

I

I

Appellees, which Appellees accepted and Mohawk paid. Appellees have received
I the wages they bargained for. Thus, they have no claim for unjust enrichment.

I

V. CONCLUSION.

I

For the foregoing reasons, the portions of the district court's order

denying dismissal of Appellees' Complaint should be reversed with instructions to
I dismiss Appellees' Complaint with prejudice.

I

Respectfully submitted,

I

ATTORNEYS FOR APPELLANT

I

Dated: September 7, 2004.

By:

_ Ca_O _'_

R. Carl Cannon

I

I

I

I

I

I

I be inequitable for the defendant to retain the benefit without paying for it. See

I

N.G.L. TravelAssocs., 764 So. 2d at 675 n.5; Hollifield. 251 Ga. App. at 130.

I

I

30

I

I

CERTIFICATE OF SERVICE
I This is to certify that I have this day served the Appellees with the

I

foregoing by having a copy of same deposited in the United States Mail in an

I

envelope, with sufficient First Class postage affixed thereon, properly addressed to

I

their counsel of record as follows:

Bobby Lee Cook, Esq.

I

COOK & CONNELLY

9899 Colrunerce Street

I

Summerville, GA 30747

Matthew Thames, Esq.

I

GODDARD, THAMES, HAMMONTREE & BOLDING

I

27 I6 Cleveland Hwy. P.O. Box 399

Dalton, GA 30722-0399

I

I

John E. Floyd, Esq. Joshua F. Thorpe, Esq. Ronan P. Doherty, Esq. Nicole G. Iannarone, Esq. BONDURANT, MIXSON &
ELMORE LLP
1201 W. Peachtree Street, N.W. 3900 One Atlanta Center
Atlanta, GA 30309

Howard Foster, Esq. JOHNSON & BELL, 55 E. Monroe Street Suite 4100

LTD.

Chicago, IL 60603

I

This 7th day of September 2004.

I

I

R. Carl Cannon Counsel for Defendant Mohawk Industries, Inc.

I

I

I

I

 
 4months,CLOSED,PROTO
U.S. District Court Northern District of Georgia (Rome) CIVIL DOCKET FOR CASE #: 4:04−cv−00003−HLM

Williams, et al v. Mohawk Industries Assigned to: Judge Harold L. Murphy Demand: $0 Case: 4:07−cv−00049−HLM
Case in other court: 11th Circuit, 04−13740−AA
11th Circuit, 08−13446−GG Cause: 18:1964 Racketeering (RICO) Act
Plaintiff

Date Filed: 01/06/2004 Date Terminated: 08/19/2010 Jury Demand: Plaintiff Nature of Suit: 470 Racketeer/Corrupt Organization Jurisdiction: Federal Question

Shirley Williams

represented by Bobby Lee Cook Cook &Connelly P.O. Box 370 9899 Commerce Street Summerville, GA 30747−0370 706−857−3421 Email: cookandconnelly@windstream.net LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher Sutton Connelly Cook &Connelly P.O. Box 370 9899 Commerce Street Summerville, GA 30747−0370 706−857−3421 Email: cookandconnelly@windstream.net LEAD ATTORNEY ATTORNEY TO BE NOTICED

Howard Foster Foster, PC Suite 2150 150 North Wacker Drive Chicago, IL 60606 312−726−1600 Email: hfoster@fosterpc.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

John Earl Floyd Bondurant Mixson &Elmore, LLP 1201 West Peachtree Street, N.W. 3900 One Atlantic Center Atlanta, GA 30309−3417 404−881−4100 Email: floyd@bmelaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Joshua F. Thorpe Bondurant Mixson &Elmore, LLP 1201 West Peachtree Street, N.W. 3900 One Atlantic Center Atlanta, GA 30309−3417 404−881−4100 Email: thorpe@bmelaw.com

Plaintiff Gale Pelfrey

LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Daniel Thames Matthew Daniel Thames, Attorney at Law Suite 201 101 N. Thornton Avenue P.O. Box 2203 Dalton, GA 30722−2203 706−278−0466 Fax: 706−278−0467 Email: matthewdthames@windstream.net LEAD ATTORNEY ATTORNEY TO BE NOTICED
Nicole G. Iannarone Georgia State University College of Law P.O. Box 4037 140 Decatur Street Suite 454 Atlanta, GA 30302−4037 404−413−9261 Email: niannarone@gsu.edu LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ronan P. Doherty Bondurant Mixson &Elmore 1201 West Peachtree Street, N.W. 3900 One Atlantic Center Atlanta, GA 30309−3417 404−881−4100 Email: doherty@bmelaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Bobby Lee Cook (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Christopher Sutton Connelly (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Howard Foster (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
John Earl Floyd (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Joshua F. Thorpe (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Bonnie Jones
Plaintiff Lora Sisson individually and on behalf of a class

Matthew Daniel Thames (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Nicole G. Iannarone (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ronan P. Doherty (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Bobby Lee Cook (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Christopher Sutton Connelly (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Howard Foster (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
John Earl Floyd (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Joshua F. Thorpe (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Daniel Thames (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Nicole G. Iannarone (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ronan P. Doherty (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Bobby Lee Cook (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Christopher Sutton Connelly

V. Defendant Mohawk Industries, Inc.

(See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Howard Foster (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
John Earl Floyd (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Joshua F. Thorpe (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Daniel Thames (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Nicole G. Iannarone (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ronan P. Doherty (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Cynthia Noles Johnson Johnson Law P.O. Box 48 313 Wolfe Street Cohutta, GA 30710 706−694−4298 Email: cindy@johnsonlawpc.com ATTORNEY TO BE NOTICED
represented by Juan P. Morillo Clifford Chance LLP DC 2001 K Street, N.W. Washington, DC 20006−1001 202−912−5107 Email: juan.morillo@cliffordchance.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
R. Carl Cannon Constangy Brooks &Smith 230 Peachtree Street, N.W. 2400 Peachtree Center Tower Atlanta, GA 30303−1557 404−525−8622 Email: ccannon@constangy.com LEAD ATTORNEY

Movant Norman Carpenter

ATTORNEY TO BE NOTICED
Rosemary C. Lumpkins Constangy Brooks &Smith 230 Peachtree Street, N.W. 2400 Peachtree Center Tower Atlanta, GA 30303−1557 404−525−8622 TERMINATED: 04/22/2008 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Stephen H. Nickelsburg Sidley Austin, LLP−DC 1501 K Street, NW Washington, DC 20005 202−736−8465 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Steven Thomas Cottreau Clifford Chance LLP DC 2001 K Street, N.W. Washington, DC 20006−1001 202−912−5000 Fax: 202−912−6000 Email: steve.cottreau@cliffordchance.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Virginia A. Seitz Sidley Austin Brown &Wood 1501 K Street, NW Washington, DC 20005 202−736−8000 TERMINATED: 04/22/2008 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Daniel Francis Diffley Alston &Bird 1201 West Peachtree Street One Atlantic Center Atlanta, GA 30309−3424 404−881−7000 Email: ddiffley@alston.com ATTORNEY TO BE NOTICED
represented by Benjamin Alexander Stone Munger &Stone 999 Peachtree Street, NE Suite 2850 Atlanta, GA 30309 404−815−1884 Email: ben.stone@mungerandstone.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Thomas J. Munger Munger &Stone 999 Peachtree Street, NE Suite 2850 Atlanta, GA 30309

Date Filed 01/06/2004 01/06/2004 01/06/2004 01/06/2004
01/06/2004
01/09/2004 01/12/2004 01/12/2004 01/14/2004 01/14/2004 01/14/2004 01/14/2004 01/14/2004
01/16/2004 01/30/2004 01/30/2004

404−815−0829 Fax: 404−8154687 Email: tom.munger@mungerandstone.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
# Docket Text
1 COMPLAINT filed and summons(es) issued. Consent form to proceed before U.S. magistrate and pretrial instructions given to attorney; jury demand; FILING FEE $ 150.00; RECEIPT # 364113 (jta) (Entered: 01/06/2004)
2 Application for admission of Howard Foster pro hac vice for plaintiffs; $100.00 fee paid; Receipt #364114 (jta) (Entered: 01/06/2004)
3 ENDORSED ORDER by Judge Harold L. Murphy GRANTING [2−1] pro hac vice application for Howard Foster to appear o/b/o plas (cc, Mr. Foster) (jta) (Entered: 01/06/2004)
4 EMERGENCY MOTION by plaintiffs for order (1) clarifying that plas' counsel may communicate w/ putative class members who initiate contact w/ plas' counsel; (2) shortening time to resolve class comms issues; and (3)shortening time for parties to conduct Rule 26 planning conf. with brief in support and proposed order. (to HLM) (jta) (Entered: 01/06/2004)
5 ORDER by Judge Harold L. Murphy GRANTING [4−1] motion for order (1) clarifying that plas' counsel may communicate w/ putative class members who initiate contact w/ plas' counsel; (2) shortening time to resolve class comms issues; and (3)shortening time for parties to conduct Rule 26 planning conf., [5−1] order to be submitted on 1/26/04 (cc) (jta) (Entered: 01/06/2004)
6 EMERGENCY MOTION by defendant to modify the court's 1/6/04 order with memorandum in support; exhibits A−D (D is proposed order) (jta) Modified on 01/13/2004 (Entered: 01/12/2004)
7 Brief by plaintiff in opposition to dft's [6−1] Emergency motion to modify the court's 1/6/04 order; exhibit A attached (prop order). (jta) (Entered: 01/13/2004)
8 Return of service executed 1/6/04 as to Mohawk Industries on original complaint (jta) (Entered: 01/13/2004)
Steno notes of proceedings held 1/14/04 before Judge Harold L. Murphy; Court Reporter: Dennis J. Reidy. (bjj) (Entered: 01/15/2004)
9 MOTION by plaintiffs for entry of document preservation order with brief, exhibits A,1,B in support. (bjj) (Entered: 01/16/2004)
10 Reply by defendant in support of its [6−1] emergency motion to modify the court's 1/6/04 order; att'd exhibit A. (bjj) (Entered: 01/16/2004)
11 TELE−CONFERENCE HELD before Judge Harold L. Murphy re [6−1] motion to modify the court's 1/6/04 order; written order to follow. (bjj) (Entered: 01/16/2004)
12 ORDER by Judge Harold L. Murphy: VACATING the Jan. 6th, 2004 Order [5−1,5−2] &the Court MODIFIES said order to add certain language; Answer due 2/9/04 for Mohawk Ind. ; joint prel rpt &plan is due 20 days after the answer ddl; [12−1] order re prel rpt &plan ddl to be submitted on 2/29/04 ; GRANTING [6−1] motion to modify the court's 1/6/04 order. (cc) (bjj) (Entered: 01/16/2004)
Added attys for deft Mohawk Industries: Robert Carl Cannon and Rosemary C. Lumpkins. (bjj) (Entered: 01/16/2004)
13 Application for admission of Steven Thomas Cottreau pro hac vice for deft Mohawk Industries; $100 fee paid; Receipt #364172. (bjj) (Entered: 02/03/2004)
14 Application for admission of Juan P. Morillo pro hac vice for deft Mohawk Industries; $100 fee paid; Receipt # 364172. (bjj) (Entered: 02/03/2004)

01/30/2004 01/30/2004 01/30/2004 01/30/2004 02/02/2004 02/02/2004
02/06/2004 02/09/2004 02/09/2004 02/09/2004 02/09/2004 02/09/2004 02/09/2004 02/17/2004 02/18/2004 02/20/2004 02/20/2004 02/20/2004 02/23/2004 02/25/2004

15 Application for admission of Virginia A. Seitz pro hac vice for deft Mohawk Industries; $100 fee paid; Receipt # 364172. (bjj) (Entered: 02/03/2004)
16 ENDORSED ORDER by Judge Harold L. Murphy: GRANTING [13−1] pro hac vice application for Steven Thomas Cottreau to appear o/b/o deft. (cc) (bjj) (Entered: 02/03/2004)
17 ENDORSED ORDER by Judge Harold L. Murphy: GRANTING [14−1] pro hac vice application for Juan P. Morillo to appear o/b/o deft. (cc) (bjj) (Entered: 02/03/2004)
18 ENDORSED ORDER by Judge Harold L. Murphy: GRANTING [15−1] pro hac vice application for Virginia A. Seitz to appear o/b/o deft. (cc) (bjj) (Entered: 02/03/2004)
19 Joint MOTION to extend time for deft to respond to pla's [9−1] motion for entry of document preservation order (bjj) (Entered: 02/04/2004)
20 ORDER by Judge Harold L. Murphy: GRANTING [19−1] joint motion to extend time until 2/9/04 for deft to respond to pla's [9−1] motion entry of document preservation order; [9−1] motion for entry of document preservation order to be submitted on 2/9/04 (cc) (bjj) (Entered: 02/04/2004)
Added attys for deft Mohawk Industries: Steven Thomas Cottreau, Juan P. Morillo, and Virginia A. Seitz. (bjj) (Entered: 02/06/2004)
21 RULE 23.1 (C)(2) STATEMENT Of Views On Class Communications Issues by plaintiffs. (bjj) (Entered: 02/12/2004)
22 Notice of Withdrawal of [9−1] motion for entry of document preservation order by plas. (bjj) (Entered: 02/12/2004)
23 STATEMENT &MOTION by defendant to vacate [12−1] prior order restricting deft's communications with putative class members with brief in support. (bjj) (Entered: 02/18/2004)
24 MOTION by defendant to stay certain preliminary proceedings pending this Court's ruling on deft's motion to dismiss with brief in support. (bjj) (Entered: 02/18/2004)
25 MOTION by defendant to dismiss action with Brief in support. (Brief not scanned) (bjj) Modified on 10/1/2004 to add text of "Brief in support" (bjj). (Entered: 02/18/2004)
26 MOTION by defendant to file excess pages re brief in support of motion to dismiss with prop brief in support. (bjj) (Entered: 02/18/2004)
27 Joint MOTION to extend page limit for plas' response to deft's motion to dismiss ; prop order. (bjj) (Entered: 02/19/2004)
29 Brief in Opposition by plaintiffs to deft's [24−1] motion to stay certain preliminary proceedings. (bjj) (Entered: 02/20/2004)
28 ORDER by Judge Harold L. Murphy DENYING dft's [24−1] motion to stay certain preliminary proceedings pending this Court's ruling on deft's motion to dismiss by Mohawk Industries (cc) (jta) (Entered: 02/20/2004)
30 ORDER by Judge Harold L. Murphy: GRANTING deft's [26−1] motion to file excess pages re brief in support of motion to dismiss; the brief is accepted as filed. (cc) (bjj) (Entered: 02/23/2004)
31 ORDER by Judge Harold L. Murphy: GRANTING [27−1] joint motion to extend page limit for plas' response to deft's motion to dismiss; plas may file a 41 page response. (cc) (bjj) (Entered: 02/23/2004)
32 Response by defendant to plas' [21−1] Rule 23.1 Statement of Views on Class Communication Issues (jta) (Entered: 03/01/2004)
33 Joint MOTION to extend time through and including 3/9/04 for plas' response to dft's [25−1] motion to dismiss action (to HLM) (jta) Modified on 03/01/2004

02/26/2004
02/26/2004 02/27/2004 03/01/2004 03/09/2004 03/10/2004 03/10/2004 03/11/2004
03/16/2004
03/26/2004 03/30/2004 03/30/2004 04/12/2004
04/15/2004
04/23/2004 04/23/2004 04/28/2004 04/28/2004

(Entered: 03/01/2004)
34 ORDER by Judge Harold L. Murphy GRANTING [33−1] joint motion to extend time through and including 3/9/04 for plas' response to dft's [25−1] motion to dismiss action, [34−1] order to be submitted on 3/10/04 (cc) (jta) (Entered: 03/01/2004)
35 Response by plas to deft's [32−1] response to plas' [21−1] L.R. 23.1 (C)(2) Statement AND Pla's reply in support of their L.R. 23.1(C)(2) Statement. (bjj) (Entered: 03/02/2004)
Added attorney for plaintiffs: Howard Foster. (bjj) (Entered: 02/27/2004)
36 Joint Preliminary Report and Discovery Schedule. (to judge) (jta) (Entered: 03/02/2004)
37 Brief by plaintiffs in opposition to dft's [25−1] motion to dismiss action (jta) (Entered: 03/10/2004)
38 ANSWERS TO INITIAL DISCLOSURES by plaintiffs. (bjj) (Entered: 03/11/2004)
39 Certificate of interested persons. (bjj) (Entered: 03/11/2004)
SUBMITTED to Judge Harold L. Murphy on deft's [23−1] motion to vacate [12−1] prior order restricting deft's communications with putative class members; deft's [25−1] motion to dismiss action, with pla's [37−1] brief in opposition to said motion. (bjj) (Entered: 03/11/2004)
40 ORDER by Judge Harold L. Murphy ADOPTING [36−1] jt preliminary report &discovery plan w/ modifications of the discovery plan setting an 8 month discovery track; first 4 months whether Ct will certify a class in this action &2nd phase regarding the merits of plas' claims; Parties are directed to confer in re terms of proto governing the production of confidential information. (see order for details) (cc) (bj) (Entered: 03/17/2004)
41 CONSENT MOTION to file excess pages for deft's reply ; prop order. (bjj) (Entered: 03/29/2004)
42 ORDER by Judge Harold L. Murphy: GRANTING [41−1] joint motion to file excess pages for deft's reply. (cc) (bjj) (Entered: 03/31/2004)
43 Reply by deft Mohawk Industries to pla's [37−1] Brief in opposition to deft's [25−1] motion to dismiss action. (bjj) (Entered: 03/31/2004)
44 ORDER by Judge Harold L. Murphy: GRANTING IN PART AND DENYING IN PART [25−1] motion to dismiss action by Mohawk; specifically, the Court DENIES deft's motion to dismiss as to all Federal and Georgia RICO allegations in plas' complaint, DENIES deft's motion to dismiss as to plas' unjust enrichment claim as it relates to deft's wage savings in employing plas at a diminished wage rate, and GRANTS deft's motion to dismiss as to plas' unjust respect to worker's compensation claims. (cc) (bjj) (Entered: 04/12/2004)
45 ORDER by Judge Harold L. Murphy: the Court orders the parties to notify the Court w/in 10 days from the date of this Order concerning whether the parties desire a hearing w/respect to the class communications issue; [45−1] order re 10 day ddl to be submitted on 4/29/04 (cc) (bjj) (Entered: 04/15/2004)
46 MOTION by deft Mohawk Industries to amend [44−1] order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery with Memo of Law in support. (bjj) (Entered: 04/23/2004)
47 Response by plaintiffs to [45−1] order. (bjj) (Entered: 04/23/2004)
48 ANSWER to complaint [1−1] by Mohawk Industries Discovery ends 9/25/04 (jph) (Entered: 04/30/2004)
49 Response by defendant to [45−1] order (jph) (Entered: 04/30/2004)

04/30/2004 05/03/2004 05/07/2004 05/07/2004 05/11/2004 05/14/2004 05/17/2004 05/20/2004 05/24/2004 05/27/2004
05/27/2004
08/04/2004 08/04/2004 08/04/2004 08/24/2004 12/03/2004

SUBMITTED to Judge Harold L. Murphy on [45−1] order directing parties to notify the Court concerning any desire for a hearing re class communications issues, with plas' [47−1] response to order, and deft's [49−1] response to order. (bjj) (Entered: 04/30/2004)
50 Reply by plaintiffs to deft's [49−1] response to [45−1] order. (bjj) (Entered: 05/03/2004)
51 Response by plaintiffs to deft's [46−1] motion to amend [44−1] order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery. (bjj) (Entered: 05/07/2004)
SUBMITTED to Judge Harold L. Murphy on deft's [46−1] motion to amend [44−1] order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery, with plas' [51−1] response. (bjj) (Entered: 05/07/2004)
52 Reply by deft to plas' [50−1] reply to deft's [49−1] response to the Court's [45−1] order. (bjj) (Entered: 05/12/2004)
53 Joint MOTION to extend time to file prop protective order ; prop order. (bjj) (Entered: 05/17/2004)
54 ORDER by Judge Harold L. Murphy: GRANTING [53−1] joint motion to extend time until 5/19/04 to file prop protective order; [54−1] order re prop proto ddl to be submitted on 5/19/04 (cc) (bjj) (Entered: 05/18/2004)
55 AGREED PROTECTIVE ORDER ENTERED by Judge Harold L. Murphy. (bjj) (Entered: 05/21/2004)
56 Reply by deft Mohawk Industries in support of its [46−1] motion to amend [44−1] order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery. (bjj) (Entered: 05/24/2004)
57 ORDER by Judge Harold L. Murphy: DENYING [23−2] motion to vacate [12−1] prior order restricting deft's communications with putative class members by Mohawk Industries; REJECTING [21−1] Statement of Views re class communications by Shirley Williams, Gale Pelfrey, Bonnie Jones, and Lora Sisson; REJECTING [23−1] Statement of Views re class communications by deft; the 1/14/04 Order governing class communications remain in effect w/out modification. (cc) (bjj) (Entered: 05/27/2004)
58 ORDER by Judge Harold L. Murphy: GRANTING deft's [46−1] motion to amend [44−1] Order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery w/out prejudice as to issues re class certification until the Eleventh Circuit disposes of the interlocutory appeal; the Court AMENDS the April 12th, 2004 Order to provide that deft may seek interlocutory review of said Order pursuant to 28 U.S.C.A. Section 1292(b). (cc) (bjj) (Entered: 05/27/2004)
59 COPY OF ORDER from USCA GRANTING permission to Appeal pursuant to 28 U.S.C. 1292(b). USCA #04−90017−B (bj) (Entered: 08/06/2004)
NOTICE OF INTERLOCUTORY APPEAL by dft as to 59 order by USCA granting permission to appeal pursuant to 28 U.S.C. 1292(b). Filing fee $ 255, receipt number 364523. Transcript Order Form due on 8/18/2004 (bj) (Entered: 08/06/2004)
60 TRANSCRIPT ORDER FORM by Mohawk Industries, Inc. re Notice of Appeal, Case Appealed to 11th Circuit Case Number 04−13740−A. Certificate of Readiness due on 8/18/2004 (bj) (Entered: 08/23/2004)
CERTIFICATE OF READINESS of Appeal Record re Notice of Appeal filed by Mohawk Industries, Inc. USCA Case Number 04−90017−B (bj) (Entered: 08/24/2004)
NOTICE of Docketing Record on Appeal from USCA re Notice of Appeal filed by Mohawk Industries, Inc.. Case Appealed to 11th Circuit Case Number 04−13740−AA. (bj) (Entered: 12/13/2004)

12/13/2004 07/29/2005 08/11/2005 08/15/2005 08/17/2005
08/17/2005
08/17/2005 08/18/2005 08/18/2005
08/18/2005
01/09/2006 01/27/2006 03/15/2006 03/27/2006 07/20/2006 12/05/2006

Certified and Transmitted Record on Appeal to US Court of Appeals re Notice of Appeal Case Appealed to 11th Circuit Case Number 04−13740−AA. (3 vols pldgs) (bj) (Entered: 12/13/2004)
61 MOTION to Lift the Stay of Discovery 58 Order, with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Thorpe, Joshua) (Entered: 07/29/2005)
62 MOTION for Order −− Defendant's Motion to Continue the Stay of Discovery Pending Its Petition for Certiorari with Brief In Support by Mohawk Industries, Inc.. (Attachments: # 1)(Cannon, R.) (Entered: 08/11/2005)
63 RESPONSE in Opposition re 62 MOTION for Order −− Defendant's Motion to Continue the Stay of Discovery Pending Its Petition for Certiorari filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Thorpe, Joshua) (Entered: 08/15/2005)
64 CERTIFICATE OF SERVICE for Plaintiffs' First Interrogatories to Defendant, Plaintiffs' First Request for Production of Documents to Defendant, Plaintiffs' Second Request for Production of Documents to Defendant, and Plaintiffs' Notice To Take Rule 30(b)(6) Deposition by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Thorpe, Joshua) (Entered: 08/17/2005)
65 Certified copy of JUDGMENT of USCA AFFIRMING IN PART, REVERSING IN PART the decision of the District Court and REMANDING to the District Court for further proceedings re: Notice of Appeal filed by Mohawk Industries, Inc., Case Appealed to 11th Circuit. Case Number 04−13740−AA. (jta) (Entered: 08/18/2005)
Appeal Record Returned: Notice of Appeal Case Appealed to 11th Circuit Case Number 04−13740−AA. (3 vols of pldgs) (jta) (Entered: 08/18/2005)
66 ORDER making the USCA mandate the judgment of this Court re Notice of Appeal USCA Appeal Number 04−13740−AA. Signed by Judge Harold L. Murphy on 08/18/05. (jta) (Entered: 08/18/2005)
67 REPLY to Response to Motion re 62 MOTION for Order −− Defendant's Motion to Continue the Stay of Discovery Pending Its Petition for Certiorari − Defendant's Reply in Support of Its Motion to Continue the Stay of Discovery Pending Its Petition for Certiorari filed by Mohawk Industries, Inc.. (Cannon, R.) (Entered: 08/18/2005)
68 ORDER denying as moot Plaintiffs' 61 Motion to Lift the Stay of Discovery and granting Deft Mohawk Industries, Inc.'s 62 Motion to Continue the Stay of Discovery pending its Petition for Certiorari. The Court STAYS discovery in this case until the Supreme Court either (a) denies Deft's petition for a writ of certiorari or (b) decides the case on the merits after granting Deft's petition. Signed by Judge Harold L. Murphy on 8/18/05. (bjj) (Entered: 08/19/2005)
69 NOTICE of Change of Address for Howard Foster, counsel for Shirley Williams (Foster, Howard) (Entered: 01/09/2006)
70 NOTICE by Mohawk Industries, Inc. of Firm Name Change (Cannon, R.) (Entered: 01/27/2006)
71 Certified and Transmitted Record on Appeal to US Supreme Court re Notice of Interlocutory Appeal. Case Appealed to US Supreme Court. Case number 05−465. Court of Appeal Case Number 04−13740−AA. (Attachments: # 1 Request from USSC)(jta) (Entered: 03/15/2006)
72 USSC acknowledgment of record (rcvd 3/21/06). Case Appealed to the Supreme Court of the U.S. Case Number 05−465. (jta) (Entered: 03/27/2006)
73 Record returned from the United States Supreme Court. (1 box/3 vols) (jta) (Entered: 07/20/2006)
74 Appeal Remark: Received certified copy of CORRECTED judgment and a copy of USCA's opinion re: [65}. Case Appealed to 11th Circuit Case Number 04−13740−AA. (dob) (Entered: 12/05/2006)

12/12/2006 12/12/2006 12/13/2006 12/13/2006 01/02/2007 01/03/2007 01/11/2007 01/16/2007 03/05/2007 03/12/2007 03/12/2007 03/21/2007 03/23/2007 03/23/2007
03/23/2007

75 MOTION for Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) Modified on 12/13/2006 (dob). Modified on 12/13/2006 (dob). (Entered: 12/12/2006)
76 MOTION for Discovery [Brief with Exhibits] with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C)(Doherty, Ronan) Modified on 12/13/2006 (dob). (Entered: 12/12/2006)
77 MOTION for Discovery with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief # 2 Exhibit A# 3 Exhibit B# 4 Exhibit C)(Doherty, Ronan) (Entered: 12/13/2006)
78 NOTICE by Mohawk Industries, Inc. re 77 MOTION for Discovery − Intent to File Opposition (Cannon, R.) (Entered: 12/13/2006)
79 RESPONSE in Opposition re 77 MOTION for Discovery filed by Mohawk Industries, Inc.. (Attachments: # 1 Appendix A − Petition for Certiorari)(Cannon, R.) (Entered: 01/02/2007)
Submission of 77 MOTION for Discovery, with 78 Notice (Other) and 79 Response in Opposition to Motionsubmitted to District Judge Harold L. Murphy. (dob) (Entered: 01/03/2007)
80 REPLY BRIEF re 77 MOTION for Discovery Reply Brief In Support Of Plaintiffs' Motion To Commence Discovery filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Doherty, Ronan) (Entered: 01/11/2007)
81 ORDER denying 77 Motion for Discovery. The Court Stays discovery in this case until the Supreme Court either denies Def's petition for a writ of certiorari or decied the case on the merits after grandting Def's petition. . Signed by Judge Harold L. Murphy on 01/16/2007. (dob) (Entered: 01/16/2007)
82 Copy of letter dated 3/1/2007. The Supreme Court has denied certiorari, The court's mandate having previously issued, no further action will be taken by this court. (dob) (Entered: 03/05/2007)
83 CERTIFICATE OF SERVICE Notice of service of Subpoenas addressed to Randstad Staffing Services, Inc. and Chase Staffing Services, Inc. by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) Modified on 3/30/2007 to correctly reflect text (dob). (Entered: 03/12/2007)
84 Notice of filing Deposition by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) Modified on 3/30/2007 to reflect correct event. (dob). (Entered: 03/12/2007)
85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief In Support# 2 Exhibit A# 3 Exhibit B# 4 Exhibit C# 5 Exhibit D)(Doherty, Ronan) (Entered: 03/21/2007)
86 NOTICE by Mohawk Industries, Inc. re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses − Intent to File Opposition (Cannon, R.) (Entered: 03/23/2007)
87 ORDER directing counsel for Def to file Def's response to 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses filed by Gale Pelfrey, Bonnie Jones, Lora Sisson, Shirley Williams by 5:00pm 3/30/2007. The Court directs counsel for the Pla in Carpenter to file any response that counsel may wish to file re 85 Motion by 5:00 on 3/30/2007. The Court further directs the Clerk to add Norman Carpenter as a movant in the instant action The Court Directs counsel for Pla to file their reply in support of their 85 Motion by 5:00 pm on 4/6/2007 Signed by Judge Harold L. Murphy on 03/23/2007. (dob) (Entered: 03/23/2007)
88 NOTICE by Mohawk Industries, Inc. re 87 Order,, − Intent to File Opposition to Plaintiffs' Emergency Motion in Accordance with Schedule Set In Court's Order (Cannon, R.) (Entered: 03/23/2007)

03/29/2007 03/30/2007 03/30/2007 03/30/2007 03/30/2007 03/30/2007 03/30/2007
03/30/2007 03/30/2007 04/03/2007
04/03/2007 04/03/2007 04/04/2007 04/04/2007

89 CERTIFICATE OF SERVICE of Discovery Responses by Mohawk Industries, Inc..(Cannon, R.) (Entered: 03/29/2007)
90 NOTICE of Appearance by Daniel Francis Diffley on behalf of Patricia Silvers, Jeffrey Briggs, Scott Higgins, Mohawk Industries, Inc. (Diffley, Daniel) (Entered: 03/30/2007)
91 RESPONSE in Opposition re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses filed by Patricia Silvers, Jeffrey Briggs, Scott Higgins, Mohawk Industries, Inc.. (Diffley, Daniel) (Entered: 03/30/2007)
92 RESPONSE re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses filed by Norman Carpenter. (Munger, Thomas) (Entered: 03/30/2007)
93 NOTICE Of Manual Filing UNDER SEAL Rough Transcript of Mark Dailey; Motion for Entry and Brief in Support; Motion for Sanctions and Brief in Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Iannarone, Nicole) Modified on 3/30/2007 to correct text(dob). (Entered: 03/30/2007)
94 RESPONSE in Opposition re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses filed by Mohawk Industries, Inc.. (Attachments: # 1 Exhibit A − E−mails# 2 Exhibit B − New Employee Information)(Cannon, R.) (Entered: 03/30/2007)
95 MOTION for Sanctions and to Compel as a result of Mohawk's Presentation of an unprepared Corporate Designee with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (dob) Additional attachment(s) added on 4/2/2007 (dob). DVD Depostion Excerpts un−filedable/filed in vault. DOCUMENT UNDER SEAL (Entered: 03/30/2007)
96 MOTION for the Entry of a Document Preservation Order with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (dob) DOCUMENT UNDER SEAL Additional attachment(s) added on 4/2/2007 (dob). (Entered: 04/02/2007)
97 Rough Transcription of DEPOSITION of Mary Dailey, Corporate Designee of defendant Mohawk Industries, Inc. taken on 3/22/2007 by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. DOCUMENT UNDER SEAL(dob) Additional attachment(s) added on 4/2/2007 (dob). (Entered: 04/02/2007)
98 ORDER observing that Carpenter Def's did not request permission from the Court before filing a response. The Court will not strike the response, however, the Court expects any third parties who wish to file responses to pending motion to request and obtain the courts permission prior to electronically or manually filing any material in this case. The Court further observes that Pla's reply in support of their Motion for Evidentiary Hearing remains due by 5:00 pm of 4/6/2007. Signed by Judge Harold L. Murphy on 4/3/2007. (dob) (Entered: 04/03/2007)
99 MOTION for Order Permitting Movant Carpenter To File Supplemental Brief In Support of Plaintiff's Motion for Emergency Hearing Based on Newly Discovered Evidence with Brief In Support by Norman Carpenter. (Stone, Benjamin) (Entered: 04/03/2007)
100 RESPONSE re 99 MOTION for Order Permitting Movant Carpenter To File Supplemental Brief In Support of Plaintiff's Motion for Emergency Hearing Based on Newly Discovered Evidence filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 04/03/2007)
101 ORDER denying without prejudice 99 Motion to File a Supplemental Brief and Directs Movant Carpenter to re−file that Motion attaching the proposed supplemental brief as an Exhibit to the Motion.. Signed by Judge Harold L. Murphy on 4/4/2007. (dob) (Entered: 04/04/2007)
102 Amended MOTION for Order Permitting Movant Norman Carpenter to File a Supplemental Brief Based on Newly Discovered Evidence with Brief In Support by Norman Carpenter. (Attachments: # 1 Proposed Supplemental Brief# 2 Declaration of Christina Martinez)(Stone, Benjamin) (Entered: 04/04/2007)

04/05/2007 04/05/2007
04/06/2007 04/06/2007 04/09/2007 04/12/2007 04/12/2007 04/13/2007 04/24/2007 04/26/2007 04/26/2007 04/26/2007 04/27/2007
04/27/2007 04/27/2007 04/27/2007

103 DOCUMENT FILED IN ERRORNOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson Plaintiffs' Notice of Serving Discovery (Doherty, Ronan) Modified on 4/6/2007 (dob). (Entered: 04/05/2007)
104 MOTION for Leave to File Certificate of Good Faith Conferral in Support of Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate Designeeby Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Iannarone, Nicole) (Entered: 04/05/2007)
Notification of Docket Correction re 103 Notice (Other). Wrong event used; should be Notice to take Depositions. (dob) (Entered: 04/06/2007)
105 REPLY BRIEF re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses In Support of Plaintiffs' Emergency Motion filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A)(Doherty, Ronan) (Entered: 04/06/2007)
106 ORDER denying 85 "Emergency" Motion for Hearing; granting 102 Motion for Order Permitting Movant Norman Carpenter to File a Supplemental Brief Based on Newly Discovered Evidence.. Signed by Judge Harold L. Murphy on 04/09/2007. (dob) (Entered: 04/09/2007)
107 ORDER clarifying how the Clerk's Office interprets Local Rule 7.1D. Signed by Judge Harold L. Murphy on 4/12/07. (bjh) (Entered: 04/12/2007)
108 MOTION for Extension of Time File Response to Motions re: 96 MOTION for Order, 95 MOTION for Sanctions by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order Extending Time)(Cannon, R.) (Entered: 04/12/2007)
109 ORDER granting 108 Motion for Extension of Time for Def's Responses to Pla Motion for Document Preservation Order and Pla's Motion for Sanctions and to Compel through and including 4/30/2007. Signed by Judge Harold L. Murphy on 4/13/2007. (dob) (Entered: 04/13/2007)
Submission of 104 MOTION for Leave to File Certificate of Good Faith Conferral in Support of Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate Designee, submitted to District Judge Harold L. Murphy. (dob) (Entered: 04/24/2007)
110 Consent MOTION for Extension of Time to File Response to Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate Designee re: 95 MOTION for Sanctions by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order)(Cannon, R.) (Entered: 04/26/2007)
111 Consent MOTION for Order Governing Defendant Mohawk Industries, Inc.'s Preservation of Documents by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order)(Cannon, R.) (Entered: 04/26/2007)
112 CERTIFICATE OF SERVICE of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) (Entered: 04/26/2007)
113 ORDER granting 104 Motion for Leave to File Certificate of Good Faith Conferral in Support of Plas' Motion for Sanctions and to Compel and Directing cousel for Pla to file the Certificate of good faith conferral attached as Exhibit A to their Motion for Leave to File within 10 days.. Signed by Judge Harold L. Murphy on 4/27/2007. (dob) (Entered: 04/27/2007)
114 ORDER denying as moot 96 Motion for Entry of a Document Preservation Order. Plaintiffs withdrew their Motion without prejudice in docket No. 96 .. Signed by Judge Harold L. Murphy on 4/27/2007. (dob) (Entered: 04/27/2007)
115 ORDER granting 111 Motion for Order Governing Defendant Mohawk Ind., Inc.'s Preservation of Documents. Signed by Judge Harold L. Murphy on 4/27/2007. (Attachments: # 1 attachment/memorandum) (dob) (Entered: 04/27/2007)
116 ORDER granting 110 Motion for Extension of Time re 110 Consent MOTION for Extension of Time to File Response to Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate

04/30/2007 04/30/2007 05/01/2007 05/07/2007 05/07/2007 05/07/2007 05/07/2007 05/11/2007 05/14/2007 05/18/2007 05/22/2007 05/22/2007 05/22/2007 05/22/2007 05/23/2007 05/29/2007 05/30/2007

Designee re: 95 MOTION for Sanctions Consent MOTION for Extension of Time to File Response to Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate Designee re: 95 MOTION for Sanctions Defendant shall have through and including 5/11/2007 to file is response. Signed by Judge Harold L. Murphy on 4/27/2007. (dob) (Entered: 04/27/2007)
117 NOTICE Of Filing Certificate of Good Faith Conferral by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Iannarone, Nicole) Modified on 5/1/2007, link to 113 (dob). (Entered: 04/30/2007)
118 NOTICE to Take Deposition of Mohawk Industries, Inc. filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 04/30/2007)
119 CERTIFICATE OF SERVICE of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) (Entered: 05/01/2007)
120 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Corporate Structure filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/07/2007)
121 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Temporary Workers filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/07/2007)
122 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Hourly Wages filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/07/2007)
123 CERTIFICATE OF SERVICE of Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) (Entered: 05/07/2007)
124 Withdrawal of Motion 95 MOTION for Sanctions filed by Gale Pelfrey, Bonnie Jones, Lora Sisson, Shirley Williams filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 05/11/2007)
125 ORDER denying as moot and without prejudice re 95 MOTION for Sanctions filed by Gale Pelfrey, Bonnie Jones, Lora Sisson, Shirley Williams Signed by Judge Harold L. Murphy on 5/11/2007. (dob) (Entered: 05/14/2007)
126 NOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson Notice of Death of Plaintiff (Iannarone, Nicole) (Entered: 05/18/2007)
127 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Corporate Structure filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/22/2007)
128 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Temporary Workers filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/22/2007)
129 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Hourly Wages filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/22/2007)
130 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Policies For Complying With The Immigration Laws filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/22/2007)
131 CERTIFICATE OF SERVICE of Serving Discovery by Mohawk Industries, Inc..(Cannon, R.) (Entered: 05/23/2007)
132 CERTIFICATE OF SERVICE Plaintiffs' Notice of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) (Entered: 05/29/2007)
133 NOTICE to Take Deposition of Frank Boykin filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/30/2007)

06/02/2007 06/06/2007 06/06/2007 06/08/2007 06/18/2007
06/19/2007 06/22/2007 06/25/2007 06/25/2007 06/27/2007 06/28/2007 06/29/2007 07/09/2007 07/09/2007 07/11/2007 07/25/2007 07/25/2007 08/06/2007 08/06/2007

134 CERTIFICATE OF SERVICE of Serving Objections and Responses to Discovery by Mohawk Industries, Inc..(Cannon, R.) (Entered: 06/02/2007)
135 APPLICATION for Admission of R. Carl Cannon Pro Hac Vice as to Stephen M. Nickelsburgby Mohawk Industries, Inc..Filing Fee received $150.00, Receipt #366278. (dob) (Entered: 06/06/2007)
136 STIPULATION Joint Stipulation Of The Parties by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 06/06/2007)
137 ORDER granting 135 Application for Admission Pro Hac Vice as to Stephen M. Nickelsburg. Signed by Judge Robert L. Vining Jr. on 6/8/2007. (dob) (Entered: 06/08/2007)
138 DOCUMENT FILED IN ERRORRequest to File Original Discovery Response to Request for Production of Documents by Strategic Outsourcing Solutions, Inc..(Cowan, Robert) Modified on 6/19/2007 to restrict access(jta). (Entered: 06/18/2007)
Notification of Docket Correction re 138 Request to File Original Discovery. Attorney sould have filed a Certificate of Service. See Local Rule 5.4. (jta) (Entered: 06/19/2007)
139 DOCUMENT FILED IN ERROR NOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson of Serving Discovery (Iannarone, Nicole) Modified on 6/25/2007, wrong event used(dob). (Entered: 06/22/2007)
Notification of Docket Correction re 139 Notice (Other). Attorney should have file a Certificate of Service. (dob) (Entered: 06/25/2007)
140 CERTIFICATE OF SERVICE Plaintiffs' Notice of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Iannarone, Nicole) (Entered: 06/25/2007)
141 Consent MOTION for Extension of Time to Complete Discovery re Class Certification by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order Extending Time)(Cannon, R.) (Entered: 06/27/2007)
142 ORDER granting 141 Motion for Extension of Time to Complete Discovery Discovery ends on 8/31/2007.. Signed by Judge Harold L. Murphy on 6/28/2007. (dob) (Entered: 06/28/2007)
143 CERTIFICATE OF SERVICE of Serving Objections and Responses to Discovery by Mohawk Industries, Inc..(Cannon, R.) (Entered: 06/29/2007)
144 CERTIFICATE OF SERVICE of Serving Discovery by Mohawk Industries, Inc..(Cannon, R.) (Entered: 07/09/2007)
145 NOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones Certification of Substantial Compliance with Discovery (Iannarone, Nicole) (Entered: 07/09/2007)
146 CERTIFICATE OF SERVICE Plaintiffs' Notice of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Iannarone, Nicole) (Entered: 07/11/2007)
147 DOCUMENT FILED IN ERROR NOTICE by Mohawk Industries, Inc. of Change of Counsel's Firm Affiliation and Contact Information (Cannon, R.) Modified on 7/25/2007 (dob). (Entered: 07/25/2007)
Notification of Docket Correction re 147 Notice (Other). Notice filed under wrong event type. Attorney to refile. (dob) (Entered: 07/25/2007)
148 Third NOTICE to Take Deposition of Mohawk Industries, Inc. re IRCA filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/06/2007)
149 Third NOTICE to Take Deposition of Mohawk Industries, Inc. re temporary workers filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/06/2007)

08/06/2007 08/07/2007 08/07/2007 08/07/2007 08/07/2007 08/07/2007 08/09/2007
08/10/2007
08/10/2007 08/10/2007 08/10/2007 08/10/2007 08/20/2007 08/31/2007 09/05/2007 09/07/2007
09/10/2007 11/21/2007

150 Third NOTICE to Take Deposition of Mohawk Industries, Inc. re hourly wages filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/06/2007)
151 CERTIFICATE OF SERVICE Notice of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Iannarone, Nicole) (Entered: 08/07/2007)
152 Cross NOTICE to Take Deposition of Norman Carpenter filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/07/2007)
153 Cross NOTICE to Take Deposition of Christina Martinez filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/07/2007)
154 Cross NOTICE to Take Deposition of Patricia Silver filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/07/2007)
155 Cross NOTICE to Take Deposition of Rebecca Hale filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/07/2007)
156 MOTION for Sanctions or for an Order to Show Cause Why Defendant Mohawk Industries, Inc. Should Not Be Held in Contempt with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief Brief in Support of Motion for Sanctions# 2 Exhibit Exhibit A for Brief in Support of Motion for Sanctions# 3 Exhibit Exhibit B to Brief in Support for Motion for Sanctions# 4 Exhibit Exhibit C for Brief in Support for Motion for Sanctions)(Doherty, Ronan) (Entered: 08/09/2007)
157 ORDER denying without prejudice 156 Motion for Sanctions. The Court directs Plas to re−file the Motion along with an accompanying certificate of good faith conferral.. Signed by Judge Harold L. Murphy on 8/10/2007. (dob) (Entered: 08/10/2007)
158 NOTICE to Take Deposition of Plaintiff Bonnie Jones filed by Mohawk Industries, Inc. (Cannon, R.) (Entered: 08/10/2007)
159 NOTICE to Take Deposition of Plaintiff Gale Pelfrey filed by Mohawk Industries, Inc. (Cannon, R.) (Entered: 08/10/2007)
160 NOTICE to Take Deposition of Plaintiff Shirley Williams filed by Mohawk Industries, Inc. (Cannon, R.) (Entered: 08/10/2007)
161 NOTICE of Change of Address for Steven Thomas Cottreau, counsel for Mohawk Industries, Inc. (Cottreau, Steven) (Entered: 08/10/2007)
162 NOTICE of Change of Address for Juan P. Morillo, counsel for Mohawk Industries, Inc. (Morillo, Juan) (Entered: 08/20/2007)
163 Consent MOTION for Extension of Time to Complete Discovery re Class by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order Granting Extension of Discovery)(Cannon, R.) (Entered: 08/31/2007)
164 ORDER granting dft Mohawk's 163 Motion for Extension of Time to Complete Discovery. Discovery ends on 11/30/2007. See Order for details. Signed by Judge Harold L. Murphy on 9/5/07. (jta) (Entered: 09/05/2007)
165 MOTION for Leave to File Opposition to Mohawk Industries, Inc.'s Motion for Protective Orderby Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D)(Doherty, Ronan) (Entered: 09/07/2007)
166 ORDER denying as moot and without prejudice 165 Motion for Leave to File. The Court will address the Motion for Leave to file Opposition in the Carpenter case.. Signed by Judge Harold L. Murphy on 9/10/2007. (dob) (Entered: 09/10/2007)
167 Consent MOTION for Order Regarding Class Certification Briefing by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Thorpe, Joshua) (Entered: 11/21/2007)

11/26/2007 12/10/2007 12/18/2007 12/18/2007 12/18/2007 12/18/2007 12/18/2007 12/19/2007 12/19/2007
12/20/2007 12/26/2007 12/26/2007
12/26/2007
01/07/2008

168 ORDER granting 167 Motion for Order Regarding Class Certification Briefing. Schedule contained within order.. Signed by Judge Harold L. Murphy on 11/26/2007. (dob) (Entered: 11/26/2007)
169 NOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones Notice of Death of Plaintiff (Iannarone, Nicole) (Entered: 12/10/2007)
170 NOTICE Of Filing by Gale Pelfrey, Bonnie Jones Plaintiffs' Notice of Manual Filing Under Seal (Doherty, Ronan) (Entered: 12/18/2007)
171 NOTICE Of Filing by Gale Pelfrey, Bonnie Jones Plaintiffs' Notice of Manual Filing Original Depositions Under Seal (Doherty, Ronan) (Entered: 12/18/2007)
172 NOTICE Of Filing by Gale Pelfrey, Bonnie Jones Plaintiffs' Notice of Manual Filing of Original Deposition (Doherty, Ronan) (Entered: 12/18/2007)
173 Request to File Original Discovery Deposition by Gale Pelfrey, Bonnie Jones.(Doherty, Ronan) (Entered: 12/18/2007)
174 MOTION to Certify Class by Gale Pelfrey, Bonnie Jones. (Attachments: # 1 Exhibit 1)(Doherty, Ronan) (Entered: 12/18/2007)
175 DEPOSITION of Mark Dailey taken on March 22, 2007 by Gale Pelfrey, Bonnie Jones. (Attachments: # 1 Exhibit Dailey 1, # 2 Exhibit Dailey 2, # 3 Exhibit Dailey 3, # 4 Exhibit Dailey 4)(Doherty, Ronan) (Entered: 12/19/2007)
176 Redacted Brief in Support of Plaintiffs' 174 Motion for Class Certification with un−sealed exhibits by Gale Pelfrey, Bonnie Jones. (Attachments: # 1 Exhibit Index to Exhibits, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6, # 8 Exhibit 7, # 9 Exhibit 8, # 10 Exhibit 9, # 11 Exhibit 10, # 12 Exhibit 11, # 13 Exhibit 12, # 14 Exhibit 13, # 15 Exhibit 14, # 16 Exhibit 15, # 17 Exhibit 16, # 18 Exhibit 17, # 19 Exhibit 18, # 20 Exhibit 19, # 21 Exhibit 20, # 22 Exhibit 21, # 23 Exhibit 22, # 24 Exhibit 23, # 25 Exhibit 24, # 26 Exhibit 25, # 27 Exhibit 26, # 28 Exhibit 27, # 29 Exhibit 28, # 30 Exhibit 29, # 31 Exhibit 30, # 32 Exhibit 31, # 33 Exhibit 32, # 34 Exhibit 33, # 35 Exhibit 34, # 36 Exhibit 35)(Thorpe, Joshua) Modified on 12/20/2007 to accurately reflect e−filed document and to properly link document to motion(jta). Modified on 12/26/2007 (dob). (Entered: 12/19/2007)
Notification of Docket Correction re 176 MOTION to Certify Class Redacted Brief in Support of Plaintiffs' Motion for Class Certification. Wrong event used. This document is a Brief in support not a motion. Attorney notified by phone. (jta) (Entered: 12/20/2007)
Notification of Docket Correction re 172 Notice of Manual Filing Deposition. Should have been filed as a Notice of filing. Attorney e−filed Deposition 175 . (dob) (Entered: 12/26/2007)
177 DOCUMENTS FILED UNDER SEALDEPOSITION of Matthew Brown, Kenneth Glenn Michales, Ginger Talley, Deborah Tapley, Barbara Waters, Catherine Stuff, Cheryl Joannsen, Robert Calabro. by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(dob) (Additional attachment(s) added on 12/26/2007: # 1 8/30/2007 Brown, # 2 8/30/2007 Amendment to Brown, # 3 Talley, # 4 Tapley, # 5 Waters, # 6 Stuff, # 7 Johannsen, # 8 Calabro, # 9 Michaels) (dob). Modified text on 12/26/2007 (dob). (Additional attachment(s) added on 7/10/2008: # 10 Brown 8/23/2007) (dob). (Entered: 12/26/2007)
178 DOCUMENT FILED UNDER SEALEXHIBITS to 176 Brief in Support of 174 Plaintiff's Motion for Class Certification. (dob) (Additional attachment(s) added on 12/26/2007: # 1 Exhibit 5, # 2 Exhibit 6, # 3 Exhibit 8, # 4 Exhibit 9, # 5 Exhibit 13, # 6 Exhibit 14, # 7 Exhibit 17, # 8 Exhibit 22, # 9 Exhibit 23, # 10 Exhibit 24, # 11 Exhibit 25, # 12 Exhibit 26, # 13 Exhibit 27, # 14 Exhibit 28, # 15 Exhibit 29, # 16 Exhibit 30, # 17 Exhibit 33) (dob). Modified on 12/26/2007 (dob). (Entered: 12/26/2007)
Submission of 174 MOTION to Certify Class with 176 Redacted Brief and 178 under seal exhibits, submitted to District Judge Harold L. Murphy. (dob) (Entered: 01/07/2008)

01/30/2008 01/30/2008
01/30/2008
01/31/2008 02/01/2008 02/01/2008 02/01/2008 02/06/2008 02/22/2008 02/22/2008
02/22/2008 03/03/2008 03/24/2008

179 NOTICE Of Filing Defendant's Notice of Manual Filing Under Seal by Mohawk Industries, Inc. (Cannon, R.) (Entered: 01/30/2008)
180 DOCUMENT FILED UNDER SEAL RESPONSE in Opposition re 174 MOTION to Certify Class filed by Mohawk Industries, Inc.. (dob) (Additional attachment(s) added on 1/30/2008: # 1 Index of Exhibits, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Errata 5, # 7 Exhibit 6, # 8 Exhibit 7, # 9 Exhibit 8, # 10 Exhibit 9) (dob). (Additional attachment(s) added on 1/30/2008: # 11 Exhibit 10, # 12 Exhibit 11, # 13 Exhibit 12, # 14 Exhibit 13, # 15 Exhibit 14, # 16 Exhibit 15) (dob). (Additional attachment(s) added on 1/30/2008: # 17 Exhibit 16, # 18 Exhibit 17, # 19 Exhibit 18, # 20 Exhibit 19, # 21 Exhibit 20, # 22 Exhibit 21, # 23 Exhibit 22, # 24 Exhibit 23, # 25 Exhibit 24, # 26 Exhibit 25, # 27 Exhibit 26, # 28 Exhibit 27, # 29 Exhibit 28, # 30 Exhibit 29, # 31 Exhibit 30) (dob). Modified on 1/30/2008 (dob). Modified on 1/30/2008 (dob). (Entered: 01/30/2008)
181 RESPONSE in Opposition re 174 MOTION to Certify Class − Redacted Version filed by Mohawk Industries, Inc.. (Attachments: # 1 Exhibit Index, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6, # 8 Exhibit 7, # 9 Exhibit 8, # 10 Exhibit 9, # 11 Exhibit 10, # 12 Exhibit 11, # 13 Exhibit 12, # 14 Exhibit 13, # 15 Exhibit 14, # 16 Exhibit 15, # 17 Exhibit 16, # 18 Exhibit 17, # 19 Exhibit 18, # 20 Exhibit 19, # 21 Exhibit 20, # 22 Exhibit 21, # 23 Exhibit 22, # 24 Exhibit 23, # 25 Exhibit 24, # 26 Exhibit 25, # 27 Exhibit 26, # 28 Exhibit 27, # 29 Exhibit 28, # 30 Exhibit 29, # 31 Exhibit 30)(Cannon, R.) (Entered: 01/30/2008)
182 NOTICE Of Filing Depositions of Bonnie Jones, Shirley Jane Williams, Gale Pelfrey by Mohawk Industries, Inc. (Cannon, R.) (Entered: 01/31/2008)
183 DEPOSITION of Shirley Jane Williams taken on Aug. 16, 2007 by Mohawk Industries, Inc.. (Attachments: # 1 Appendix Word Index, # 2 Exhibit Deposition Exhibits)(Cannon, R.) (Entered: 02/01/2008)
184 DEPOSITION of Gale Pelfrey taken on Aug. 15, 2007 by Mohawk Industries, Inc.. (Attachments: # 1 Appendix Word Index, # 2 Exhibit Deposition Exhibits, # 3 Errata)(Cannon, R.) (Entered: 02/01/2008)
185 DEPOSITION of Bonnie Jones taken on Aug. 14, 2007 by Mohawk Industries, Inc.. (Attachments: # 1 Word Index, # 2 Deposition Exhibits, # 3 Errata)(Cannon, R.) (Entered: 02/01/2008)
186 ORDER directing the parties to file a separate request or motion for all future requests for hearings or oral arguments. Parties should not continue to request oral arguments in this case. by Judge Harold L. Murphy on 2/6/2008. (dob) Modified on 9/16/2008 to add additional instruction in order. (dob). (Entered: 02/06/2008)
187 NOTICE Of Filing Under Seal − Reply Brief in Support of Plaintiffs' Motion for Class Certification by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Thorpe, Joshua) (Entered: 02/22/2008)
188 REPLY BRIEF re 176 MOTION to Certify Class Redacted Brief in Support of Plaintiffs' Motion for Class Certification, 174 MOTION to Certify Class filed by Gale Pelfrey, Bonnie Jones. (Attachments: # 1 Exhibit 36, # 2 Exhibit 37, # 3 Exhibit 38, # 4 Exhibit 39, # 5 Exhibit 40, # 6 Exhibit 41, # 7 Exhibit 42, # 8 Exhibit 43, # 9 Exhibit 44, # 10 Exhibit 45, # 11 Exhibit 46, # 12 Exhibit 47, # 13 Exhibit 48, # 14 Exhibit 49, # 15 Exhibit 50, # 16 Exhibit 51, # 17 Exhibit 52, # 18 Exhibit 53)(Thorpe, Joshua) (Entered: 02/22/2008)
189 DOCUMENT FILED UNDER SEAL REPLY BRIEF in Support of Plaintiffs' 174 MOTION to Certify Class filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (dob) Modified on 2/22/2008 (dob). (Additional attachment(s) added on 2/22/2008: # 1 Main Document) (dob). Modified on 2/22/2008 (dob). Modified on 2/22/2008 (dob). (Entered: 02/22/2008)
190 ORDER DENYING plaintiffs' 174 Motion for Class Certification. THIS ORDER IS NOT INTENDED FOR PUBLICATION. Signed by Judge Harold L. Murphy on 3/3/08. (Attachments: # 1 Order pages 65−136) (jta) (Entered: 03/03/2008)
191 Consent MOTION to Stay Pending Resolution of Plaintiffs' Rule 23(F) Petition by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan)

03/26/2008 04/22/2008 04/22/2008 06/26/2008
06/26/2008 06/26/2008 06/27/2008 07/07/2008 07/11/2008 07/11/2008 07/14/2008 07/17/2008 11/12/2008 11/13/2008 11/19/2008 04/07/2009 06/29/2009
06/29/2009

(Entered: 03/24/2008)
192 ORDER granting 191 Motion to Stay. Signed by Judge Harold L. Murphy on 3/26/2008. (dob) (Entered: 03/26/2008)
193 Certification of Consent to Substitution of Counsel. R. Carl Cannon replacing attorney Rosemary C. Lumpkins. (Cannon, R.) (Entered: 04/22/2008)
194 Certification of Consent to Substitution of Counsel. R. Carl Cannon replacing attorney Virginia A. Seitz. (Cannon, R.) (Entered: 04/22/2008)
195 NOTICE OF APPEAL (USCA Order granting the petition for permission to appeal pursuant to FRCP Rule 23(f)) by Shirley Williams. Filing fee $ 455, receipt number 366912. Transcript Order Form due on 7/11/2008 (Attachments: # 1 Letter from USCA)(jta) (Entered: 06/26/2008)
Spoke with attorney re Transcript Order Form. They have completed form and are mailing re 195 Notice of Appeal. (jta) (Entered: 06/26/2008)
196 USCA Appeal Fees received $ 455 receipt number 366912 re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit. Case Number 08−13446−G. (jta) (Entered: 06/26/2008)
197 TRANSCRIPT ORDER FORM (No Hearing) re 195 Notice of Appeal,. Case Appealed to 11th Circuit. Case Number 08−13446−G. Certificate of Readiness due on 7/14/2008. (jta) (Entered: 06/27/2008)
198 Transmission of Certified Copy of Receipt of Payment US Court of Appeals re 195 Notice of Appeal. (dob) (Entered: 07/07/2008)
CERTIFICATE OF READINESS of Appeal Record re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−G. (dob) (Entered: 07/11/2008)
199 Certified copy of CERTIFICATE OF READINESS transmitted to USCA Case Appealed to 11th Circuit Case Number 08−13446−G (Attachments: # 1 Docket Sheet)(dob) (Entered: 07/11/2008)
200 USCA Acknowledgment of payment receipt re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−G. (dob) (Entered: 07/14/2008)
201 USCA Acknowledgment of receipt of COR re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−G. (dob) (Entered: 07/17/2008)
202 FORTHWITH LETTER from USCA re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−GG. Appeal Record due by 11/24/2008. (dob) (Entered: 11/12/2008)
203 Certified and Transmitted Record on Appeal to US Court of Appeals re 195 Notice of Appeal, Case Appealed to 11th Circuit Case Number 08−13446−GG. (dob) (Entered: 11/13/2008)
204 USCA Acknowledgment of receipt of ROA re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−GG. (dob) (Entered: 11/19/2008)
205 NOTICE of Change of Address for Howard Foster, counsel for Shirley Williams (Foster, Howard) (Entered: 04/07/2009)
206 Certified copy of JUDGMENT of USCA VACATING the decision of the District Court denying class certification and REMANDING for further proceedings consistent with this opinion re: 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit. Case Number 08−13446−GG. (jta) (Entered: 06/29/2009)
207 Appeal Record Returned: 195 Notice of Appeal, Case Appealed to 11th Circuit. Case Number 08−13446−GG. (1 box exhibits, 5 envelopes of sealed; 5 vols

06/29/2009 06/29/2009 06/29/2009 06/30/2009
06/30/2009 07/10/2009 07/10/2009 07/13/2009 07/13/2009
11/06/2009 11/16/2009
11/16/2009 11/17/2009 11/17/2009

pleadings). (jta) (Entered: 06/29/2009)
Submission of 206 USCA Judgment, with Proposed Mandate Order, submitted to District Judge Harold L. Murphy. (jta) (Entered: 06/29/2009)
208 ORDER making the USCA mandate the judgment of this Court re 195 Notice of Appeal. Case Appealed to 11th Circuit. Case Number 08−13446−GG. Signed by Judge Harold L. Murphy on 6/29/09. (jta) (Entered: 06/29/2009)
Clerks Certificate of Mailing as to Stephen H. Nickelsburg for Mohawk Industries, Inc. re 208 USCA Mandate. (jta) (Entered: 06/29/2009)
209 ORDER DIRECTING the parties to provide the Court with an update concerning the status of this case within 10 days. In the update, the parties should advise the Court as to whether Defendant plans to seek further appellate review of the Eleventh Circuit's opinion concerning class certification. The parties also should advise the Court as to whether the parties wish to file additional briefs concerning the issues that the Court must resolve on remand. If the parties conclude that additional briefing is warranted, the parties also should attempt to present the Court with an agreed−upon briefing schedule. The Court DIRECTS the Clerk to RE−SUBMIT this case to the Court after the conclusion of the ten−day period. Signed by Judge Harold L. Murphy on 6/30/09. (jta) (Entered: 06/30/2009)
Clerks Certificate of Mailing as to Stephen H. Nickelsburg for Mohawk Industries, Inc. re 209 Order. (jta) (Entered: 06/30/2009)
210 STATUS REPORT Joint Report of the Parties Concerning the Status of the Case and Joint Motion to Stay by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit 1)(Doherty, Ronan) (Entered: 07/10/2009)
211 MOTION to Stay by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Proposed Order)(dob) (Entered: 07/13/2009)
Notification of Docket Correction re 210 Status Report. Pleading is a dual pleading, contains motion. Clerk docked motion 211 . (dob) (Entered: 07/13/2009)
212 ORDER granting 211 Motion to Stay until the US Supreme Court rules on Mohawk's petition for certiorari. The Court orders the parties to submit a update on the status of this case within 10 days after the US Supreme Court rules. Noting in this Order shall preclude any part from filing a request to lift the stay in the event that party believes that circumstances no longer warrant a continued stay in this Court.. Signed by Judge Harold L. Murphy on 7/13/2009. (dob) (Entered: 07/13/2009)
213 Notice by USCA of the US Supreme Court's decision DENYING certiorari. (dob) (Entered: 11/06/2009)
214 ORDER directing parties and their counsel to appear before the Court for a status conference, ( Status Conference set for 12/2/2009 at 10:30 AM in ROME Courtroom 300 before Judge Harold L. Murphy.) The Court further ORDERS that Defendant Mohawk's insurance carrier attend the conference in the person of its attorney, Julie Dean Larsen, Esq. of Kutak Rock &Huie, 18201 Van Karman Avenue, Irvine, California, 92612−0177. The Court also ORDERS that the mediator, Attorney Hunter Hughes, Esq., of Rogers &Hardin, 229 Peachtree Street, N.E., 2700 International Tower, Peachtree Center, Atlanta, Georgia, 30303−1601, attend the conference. The Court DIRECTS the Clerk to MAIL a copy of this Order to Attorney Larson and to Attorney Hughes at their respective addresses. Signed by Judge Harold L. Murphy on 11/16/2009. (dob) (Entered: 11/16/2009)
Clerks Certificate of Mailing to Julie Dean Larsen and Hunter Hughes re 214 Order. (dob) (Entered: 11/16/2009)
215 STATUS REPORT and Request for Briefing Schedule by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Text of Proposed Order)(Doherty, Ronan) (Entered: 11/17/2009)
216 STATUS REPORT and Request for Limited Class Discovery by Mohawk Industries, Inc.. (Attachments: # 1 Proposed Order)(Cottreau, Steven) (Entered:

11/17/2009 11/17/2009 11/18/2009 12/01/2009
12/02/2009 12/03/2009 12/07/2009 12/08/2009 04/09/2010
04/12/2010 04/12/2010
04/28/2010
04/29/2010 04/29/2010 07/08/2010 07/08/2010

11/17/2009)
217 MOTION for Briefing Schedule as found in 215 Status Report by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Proposed Order)(dob) (Entered: 11/18/2009)
218 MOTION for Limited Class Discovery as found in 216 Status Report by Mohawk Industries, Inc.. (Attachments: # 1 Proposed Order)(dob) (Entered: 11/18/2009)
Notification of Docket Correction re 215 Status Report, 216 Status Report. Docket entries contained motions. Clerk filed motions as 217 , 218 . (dob) (Entered: 11/18/2009)
219 RESPONSE in Opposition re 218 MOTION for Discovery Plaintiffs' Opposition to Defendant's Motion for Limited Class Discovery filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Doherty, Ronan) (Entered: 12/01/2009)
220 NOTICE of Appearance as to Christopher Sutton Connelly by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (dob) (Entered: 12/02/2009)
221 ORDER denying as moot and without prejudice 217 Motion for Briefing Schedule; denying 218 Motion for Limited Class Discovery. Signed by Judge Harold L. Murphy on 12/3/2009. (dob) (Entered: 12/03/2009)
222 Letter from Clerk re: LR 83.1 Attorney Admission requirements sent to Christopher Sutton Connelly. Clerk to follow−up by 12/17/2009. (jkm) (Entered: 12/07/2009)
223 NOTICE of Change of Address for Howard Foster, counsel for Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Foster, Howard) (Entered: 12/08/2009)
224 Unopposed MOTION for Settlement (Preliminary Approval of Settlement) with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit 1 to Motion (Proposed Order), # 2 Brief, # 3 Exhibit 1 to Brief (Settlement Agreement), # 4 Exhibit A to Settlement Agreement (Notice), # 5 Exhibit B to Settlement Agreement (Claim Form), # 6 Exhibit C to Settlement Agreement (Press Release), # 7 Exhibit 2 to Brief (Proposed Order))(Doherty, Ronan) (Entered: 04/09/2010)
225 ORDER granting 224 Unopposed Motion for Settlement. Signed by Judge Harold L. Murphy on 4/12/10. (jta) (Entered: 04/12/2010)
226 ORDER: The Court ORDERS counsel for the parties to appear before the Court at 10:30 a.m. E.S.T. on Thursday, July 22, 2010, for a final hearing to approve the settlement agreement in this case. Signed by Judge Harold L. Murphy on 4/12/10. (jta) (Entered: 04/12/2010)
227 Unopposed MOTION to Amend 224 titled Preliminary Approval of Amended Settlement Agreement and Corrected Notice to the Class by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Doherty, Ronan) Modified on 4/29/2010 to clarify text of pleading and add link (dob). (Entered: 04/28/2010)
Notification of Docket Correction re 227 MOTION to Amend. Clerk made necessary changes to edit text to reflect title of pleading and add appropriate link. (dob) (Entered: 04/29/2010)
228 ORDER granting 227 Motion to Amend and grants preliminary approval of the Settlement Agreement as amended. Signed by Judge Harold L. Murphy on 4/29/2010. (dob) (Entered: 04/29/2010)
229 NOTICE of Change of Address for Howard Foster, counsel for Shirley Williams (Foster, Howard) (Entered: 07/08/2010)
230 MOTION for Settlement Final Approval with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Exhibit B)(Doherty, Ronan) (Entered: 07/08/2010)

07/08/2010 07/08/2010 07/08/2010
07/09/2010 07/09/2010 07/09/2010 07/09/2010 07/13/2010
07/15/2010 07/15/2010 07/15/2010 07/19/2010 07/22/2010
07/22/2010

231 MOTION for Order Approving Class Service Awards for Gale Pelfrey and Bonnie Jones with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C)(Doherty, Ronan) (Entered: 07/08/2010)
232 MOTION for Order Approving an Administration, Withholding, Expense and Attorneys' Fee Award by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 07/08/2010)
233 Unopposed MOTION for Leave to File Excess Pages In Support of Plaintiffs' Motion for an Administration, Withholding, Expense and Attorneys' Fee Award with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J, # 12 Exhibit K)(Doherty, Ronan) (Entered: 07/08/2010)
234 ORDER granting 233 Motion for Leave to File Excess Pages. Signed by Judge Harold L. Murphy on 7/9/2010. (dob) (Additional attachment(s) added on 7/9/2010: # 1 Main Document/Corrected PDF) (dob). (Entered: 07/09/2010)
235 NOTICE of Appearance by Cynthia Noles Johnson on behalf of Lora Sisson (Johnson, Cynthia) (Entered: 07/09/2010)
236 MOTION File Out of Time Motion with Brief In Support by Lora Sisson. (Attachments: # 1 Brief, # 2 Affidavit)(Johnson, Cynthia) (Entered: 07/09/2010)
237 MOTION for Order for Class Service Award with Brief In Support by Lora Sisson. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Exhibit B, # 4 Affidavit)(Johnson, Cynthia) (Entered: 07/09/2010)
238 NOTICE Of Filing the Declaration of Hunter R. Hughes, III in Support of Plaintiffs' 230 MOTION for Settlement Final Approval by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson(Attachments: # 1 Exhibit A)(Doherty, Ronan) Modified on 7/13/2010 to remove double wording from text (dob). (Entered: 07/13/2010)
239 PROPOSED ORDER Granting Final Approval of the Settlement Agreement re: 230 MOTION for Settlement Final Approval. (Doherty, Ronan) (Entered: 07/15/2010)
240 PROPOSED ORDER Granting Class Service Awards re: 231 MOTION for Order Approving Class Service Awards for Gale Pelfrey and Bonnie Jones. (Doherty, Ronan) (Entered: 07/15/2010)
241 PROPOSED ORDER Granting Plaintiffs' Motion for an Administration, Withholding, Expense and Attorneys' Fee Award re: 232 MOTION for Order Approving an Administration, Withholding, Expense and Attorneys' Fee Award. (Doherty, Ronan) (Entered: 07/15/2010)
242 NOTICE of Filing Exclusion Forms by Claims Administrator. (dob) (Entered: 07/19/2010)
243 Minute Entry for proceedings held before Judge Harold L. Murphy: Motion Hearing held on 7/22/2010. Fairness Hearing −the Court adopts the findings of facts and the conclusions contained in the proposed orders numbered in the docket as 239, 240 241, the plaintiff moves for final approval as to all matters; the Court orally grants the approval of the settlement and will issue a written order. The Court further directs that the case be administratively closed and directs the Clerk to not issue a final judgment at this time. After appropriate notice from the parties, the Court will direct that the final judgment be entered.(Court Reporter Alicia Bagley)(dob) (Entered: 07/22/2010)
244 ORDER granting 230 Motion for Settlement and grants Final Approval to the proposed settlement agreement in this case ; granting 231 Motion for Order Approving Class Service Awards for Gale Pelfrey and Bonnie Jones; granting 232 Motion for Order Approving an Administration, Withholding, Expense, and Attorney;s Fee Award and APPROVES an Administration, Withholding, Expense, and Attorneys' Fee Award of $6 million, which includes: (1) payment of the costs

07/22/2010 08/19/2010 08/19/2010
08/19/2010 08/19/2010

of settlement administration, currently estimated at $285,000; (2) payment of withholding taxes on the Class Members' wage awards; (3) payment of $363,615.00 in expenses paid by Class Counsel through May 31, 2010; and (4) payment of the balance as an attorneys' fee award to Class Counsel ;granting 236 Motion to File Out of Time Motion by Ronald Cronan; granting 237 Motion for Order of Class Service Award filed by Ronald David Cronan, Temporary Administrator of the Estate of Lora Cronan−Sisson 237 , and ORDERS that Gale Pelfrey, Bonnie Jones, and the estate of Lora Cronan−Sisson receive $25,000 each, for services as class representatives, to be paid from the settlement fund in this case. This $25,000 award shall be in addition to the amount that Ms. Jones, Ms. Pelfrey, and the estate of Ms. Cronan−Sisson otherwise will obtain based on membership in the settlement class. The Court DIRECTS the Clerk to ADMINISTRATIVELY CLOSE this case. The Court will defer directing the Clerk to enter a judgment in this case until after the conclusion of the claims process and until either Defendant's insurance carrier's option to terminate the settlement expires or the parties inform the Court that the conditions required to trigger the action have not occurred. The Court DIRECTS counsel to notify the Court promptly once either of those events has occurred. Signed by Judge Harold L. Murphy on 7/22/2010. (dob) (Entered: 07/22/2010)
Civil Case Terminated. (dob) (Entered: 07/22/2010)
245 MOTION for Judgment by Bonnie Jones, Gale Pelfrey, Lora Sisson, Shirley Williams. (Attachments: # 1 Exhibit A)(Doherty, Ronan) (Entered: 08/19/2010)
246 ORDER granting 245 Motion for Judgment; directs the clerk to enter final judgment in this case and directs that the terms of the amended Settlement Agreement, which is attached as Exhibit 1, be incorporated into the final judgment in this case. The Court directs the Clerk to dismiss this case with prejudice, subject to the Court's continuing jurisdiction to enforce the Settlement Agreement. Signed by Judge Harold L. Murphy on 8/19/2010. (Attachments: # 1 Exhibit 1) (dob) (Entered: 08/19/2010)
247 CLERK'S JUDGMENT entered incorporating the terms of the amended Settlement Agreement. (dob)−−Please refer to http://www.ca11.uscourts.gov to obtain an appeals jurisdiction checklist−− (Entered: 08/19/2010)
Civil Case Terminated. (dob) (Entered: 08/19/2010)

 
 Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 1 of 23
4months,CLOSED,PROTO
U.S. District Court Northern District of Georgia (Rome) CIVIL DOCKET FOR CASE #: 4:04−cv−00003−HLM

Williams, et al v. Mohawk Industries Assigned to: Judge Harold L. Murphy Demand: $0 Case: 4:07−cv−00049−HLM
Case in other court: 11th Circuit, 04−13740−AA
11th Circuit, 08−13446−GG Cause: 18:1964 Racketeering (RICO) Act
Plaintiff

Date Filed: 01/06/2004 Date Terminated: 08/19/2010 Jury Demand: Plaintiff Nature of Suit: 470 Racketeer/Corrupt Organization Jurisdiction: Federal Question

Shirley Williams

represented by Bobby Lee Cook Cook &Connelly P.O. Box 370 Summerville, GA 30747−0370 706−857−3421 Email: cookandconnelly@windstream.net LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher Sutton Connelly Cook &Connelly P.O. Box 370 9899 Commerce Street Summerville, GA 30747−0370 706−857−3421 Email: cookandconnelly@windstream.net LEAD ATTORNEY ATTORNEY TO BE NOTICED

Howard Foster Foster, PC Suite 2150 150 North Wacker Drive Chicago, IL 60606 312−726−1600 Email: hfoster@fosterpc.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

John Earl Floyd Bondurant Mixson &Elmore, LLP 1201 West Peachtree Street, N.W. 3900 One Atlantic Center Atlanta, GA 30309−3417 404−881−4100 Email: floyd@bmelaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Joshua F. Thorpe Bondurant Mixson &Elmore, LLP 1201 West Peachtree Street, N.W. 3900 One Atlantic Center Atlanta, GA 30309−3417 404−881−4100 Email: thorpe@bmelaw.com LEAD ATTORNEY

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 2 of 23

ATTORNEY TO BE NOTICED

Matthew Daniel Thames Matthew Daniel Thames, Attorney at Law Suite 201 101 N. Thornton Avenue P.O. Box 2203 Dalton, GA 30722−2203 706−278−0466 Fax: 706−278−0467 Email: matthewdthames@windstream.net LEAD ATTORNEY ATTORNEY TO BE NOTICED

Nicole G. Iannarone Bondurant Mixson &Elmore 1201 West Peachtree Street, N.W. 3900 One Atlantic Center Atlanta, GA 30309−3417 404−881−4100 Email: iannarone@bmelaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ronan P. Doherty Bondurant Mixson &Elmore 1201 West Peachtree Street, N.W. 3900 One Atlantic Center Atlanta, GA 30309−3417 404−881−4100 Email: doherty@bmelaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Gale Pelfrey

represented by Bobby Lee Cook (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher Sutton Connelly (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Howard Foster (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

John Earl Floyd (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Joshua F. Thorpe (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Matthew Daniel Thames (See above for address) LEAD ATTORNEY

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 3 of 23

ATTORNEY TO BE NOTICED

Nicole G. Iannarone (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ronan P. Doherty (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Bonnie Jones

represented by Bobby Lee Cook (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher Sutton Connelly (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Howard Foster (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

John Earl Floyd (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Joshua F. Thorpe (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Matthew Daniel Thames (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Nicole G. Iannarone (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ronan P. Doherty (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
Lora Sisson individually and on behalf of a class

represented by Bobby Lee Cook (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher Sutton Connelly (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 4 of 23

Howard Foster (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
John Earl Floyd (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Joshua F. Thorpe (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Daniel Thames (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Nicole G. Iannarone (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ronan P. Doherty (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Cynthia Noles Johnson Johnson Law P.O. Box 48 313 Wolfe Street Cohutta, GA 30710 706−694−4298 Email: cindy@johnsonlawpc.com ATTORNEY TO BE NOTICED

V. Defendant Mohawk Industries, Inc.

represented by Juan P. Morillo Clifford Chance LLP DC 2001 K Street, N.W. Washington, DC 20006−1001 202−912−5107 Email: juan.morillo@cliffordchance.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
R. Carl Cannon Constangy Brooks &Smith 230 Peachtree Street, N.W. 2400 Peachtree Center Tower Atlanta, GA 30303−1557 404−525−8622 Email: ccannon@constangy.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Rosemary C. Lumpkins

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 5 of 23

Constangy Brooks &Smith 230 Peachtree Street, N.W. 2400 Peachtree Center Tower Atlanta, GA 30303−1557 404−525−8622 TERMINATED: 04/22/2008 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Stephen H. Nickelsburg Sidley Austin, LLP−DC 1501 K Street, NW Washington, DC 20005 202−736−8465 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Steven Thomas Cottreau Clifford Chance LLP DC 2001 K Street, N.W. Washington, DC 20006−1001 202−912−5000 Fax: 202−912−6000 Email: steve.cottreau@cliffordchance.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Virginia A. Seitz Sidley Austin Brown &Wood 1501 K Street, NW Washington, DC 20005 202−736−8000 TERMINATED: 04/22/2008 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Daniel Francis Diffley Alston &Bird 1201 West Peachtree Street One Atlantic Center Atlanta, GA 30309−3424 404−881−7000 Email: ddiffley@alston.com ATTORNEY TO BE NOTICED

Movant Norman Carpenter

represented by Benjamin Alexander Stone Munger &Stone 999 Peachtree Street, NE Suite 2850 Atlanta, GA 30309 404−815−1884 Email: ben.stone@mungerandstone.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Thomas J. Munger Munger &Stone 999 Peachtree Street, NE Suite 2850 Atlanta, GA 30309 404−815−0829 Fax: 404−8154687 Email: tom.munger@mungerandstone.com

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 6 of 23
LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 01/06/2004 01/06/2004 01/06/2004 01/06/2004
01/06/2004
01/09/2004 01/12/2004 01/12/2004 01/14/2004 01/14/2004 01/14/2004 01/14/2004 01/14/2004
01/16/2004 01/30/2004 01/30/2004 01/30/2004

# Docket Text
1 COMPLAINT filed and summons(es) issued. Consent form to proceed before U.S. magistrate and pretrial instructions given to attorney; jury demand; FILING FEE $ 150.00; RECEIPT # 364113 (jta) (Entered: 01/06/2004)
2 Application for admission of Howard Foster pro hac vice for plaintiffs; $100.00 fee paid; Receipt #364114 (jta) (Entered: 01/06/2004)
3 ENDORSED ORDER by Judge Harold L. Murphy GRANTING [2−1] pro hac vice application for Howard Foster to appear o/b/o plas (cc, Mr. Foster) (jta) (Entered: 01/06/2004)
4 EMERGENCY MOTION by plaintiffs for order (1) clarifying that plas' counsel may communicate w/ putative class members who initiate contact w/ plas' counsel; (2) shortening time to resolve class comms issues; and (3)shortening time for parties to conduct Rule 26 planning conf. with brief in support and proposed order. (to HLM) (jta) (Entered: 01/06/2004)
5 ORDER by Judge Harold L. Murphy GRANTING [4−1] motion for order (1) clarifying that plas' counsel may communicate w/ putative class members who initiate contact w/ plas' counsel; (2) shortening time to resolve class comms issues; and (3)shortening time for parties to conduct Rule 26 planning conf., [5−1] order to be submitted on 1/26/04 (cc) (jta) (Entered: 01/06/2004)
6 EMERGENCY MOTION by defendant to modify the court's 1/6/04 order with memorandum in support; exhibits A−D (D is proposed order) (jta) Modified on 01/13/2004 (Entered: 01/12/2004)
7 Brief by plaintiff in opposition to dft's [6−1] Emergency motion to modify the court's 1/6/04 order; exhibit A attached (prop order). (jta) (Entered: 01/13/2004)
8 Return of service executed 1/6/04 as to Mohawk Industries on original complaint (jta) (Entered: 01/13/2004)
Steno notes of proceedings held 1/14/04 before Judge Harold L. Murphy; Court Reporter: Dennis J. Reidy. (bjj) (Entered: 01/15/2004)
9 MOTION by plaintiffs for entry of document preservation order with brief, exhibits A,1,B in support. (bjj) (Entered: 01/16/2004)
10 Reply by defendant in support of its [6−1] emergency motion to modify the court's 1/6/04 order; att'd exhibit A. (bjj) (Entered: 01/16/2004)
11 TELE−CONFERENCE HELD before Judge Harold L. Murphy re [6−1] motion to modify the court's 1/6/04 order; written order to follow. (bjj) (Entered: 01/16/2004)
12 ORDER by Judge Harold L. Murphy: VACATING the Jan. 6th, 2004 Order [5−1,5−2] &the Court MODIFIES said order to add certain language; Answer due 2/9/04 for Mohawk Ind. ; joint prel rpt &plan is due 20 days after the answer ddl; [12−1] order re prel rpt &plan ddl to be submitted on 2/29/04 ; GRANTING [6−1] motion to modify the court's 1/6/04 order. (cc) (bjj) (Entered: 01/16/2004)
Added attys for deft Mohawk Industries: Robert Carl Cannon and Rosemary C. Lumpkins. (bjj) (Entered: 01/16/2004)
13 Application for admission of Steven Thomas Cottreau pro hac vice for deft Mohawk Industries; $100 fee paid; Receipt #364172. (bjj) (Entered: 02/03/2004)
14 Application for admission of Juan P. Morillo pro hac vice for deft Mohawk Industries; $100 fee paid; Receipt # 364172. (bjj) (Entered: 02/03/2004)
15 Application for admission of Virginia A. Seitz pro hac vice for deft Mohawk Industries; $100 fee paid; Receipt # 364172. (bjj) (Entered: 02/03/2004)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 7 of 23

01/30/2004 01/30/2004 01/30/2004 02/02/2004 02/02/2004
02/06/2004 02/09/2004 02/09/2004 02/09/2004 02/09/2004 02/09/2004 02/09/2004 02/17/2004 02/18/2004 02/20/2004 02/20/2004 02/20/2004 02/23/2004 02/25/2004

16 ENDORSED ORDER by Judge Harold L. Murphy: GRANTING [13−1] pro hac vice application for Steven Thomas Cottreau to appear o/b/o deft. (cc) (bjj) (Entered: 02/03/2004)
17 ENDORSED ORDER by Judge Harold L. Murphy: GRANTING [14−1] pro hac vice application for Juan P. Morillo to appear o/b/o deft. (cc) (bjj) (Entered: 02/03/2004)
18 ENDORSED ORDER by Judge Harold L. Murphy: GRANTING [15−1] pro hac vice application for Virginia A. Seitz to appear o/b/o deft. (cc) (bjj) (Entered: 02/03/2004)
19 Joint MOTION to extend time for deft to respond to pla's [9−1] motion for entry of document preservation order (bjj) (Entered: 02/04/2004)
20 ORDER by Judge Harold L. Murphy: GRANTING [19−1] joint motion to extend time until 2/9/04 for deft to respond to pla's [9−1] motion entry of document preservation order; [9−1] motion for entry of document preservation order to be submitted on 2/9/04 (cc) (bjj) (Entered: 02/04/2004)
Added attys for deft Mohawk Industries: Steven Thomas Cottreau, Juan P. Morillo, and Virginia A. Seitz. (bjj) (Entered: 02/06/2004)
21 RULE 23.1 (C)(2) STATEMENT Of Views On Class Communications Issues by plaintiffs. (bjj) (Entered: 02/12/2004)
22 Notice of Withdrawal of [9−1] motion for entry of document preservation order by plas. (bjj) (Entered: 02/12/2004)
23 STATEMENT &MOTION by defendant to vacate [12−1] prior order restricting deft's communications with putative class members with brief in support. (bjj) (Entered: 02/18/2004)
24 MOTION by defendant to stay certain preliminary proceedings pending this Court's ruling on deft's motion to dismiss with brief in support. (bjj) (Entered: 02/18/2004)
25 MOTION by defendant to dismiss action with Brief in support. (Brief not scanned) (bjj) Modified on 10/1/2004 to add text of "Brief in support" (bjj). (Entered: 02/18/2004)
26 MOTION by defendant to file excess pages re brief in support of motion to dismiss with prop brief in support. (bjj) (Entered: 02/18/2004)
27 Joint MOTION to extend page limit for plas' response to deft's motion to dismiss ; prop order. (bjj) (Entered: 02/19/2004)
29 Brief in Opposition by plaintiffs to deft's [24−1] motion to stay certain preliminary proceedings. (bjj) (Entered: 02/20/2004)
28 ORDER by Judge Harold L. Murphy DENYING dft's [24−1] motion to stay certain preliminary proceedings pending this Court's ruling on deft's motion to dismiss by Mohawk Industries (cc) (jta) (Entered: 02/20/2004)
30 ORDER by Judge Harold L. Murphy: GRANTING deft's [26−1] motion to file excess pages re brief in support of motion to dismiss; the brief is accepted as filed. (cc) (bjj) (Entered: 02/23/2004)
31 ORDER by Judge Harold L. Murphy: GRANTING [27−1] joint motion to extend page limit for plas' response to deft's motion to dismiss; plas may file a 41 page response. (cc) (bjj) (Entered: 02/23/2004)
32 Response by defendant to plas' [21−1] Rule 23.1 Statement of Views on Class Communication Issues (jta) (Entered: 03/01/2004)
33 Joint MOTION to extend time through and including 3/9/04 for plas' response to dft's [25−1] motion to dismiss action (to HLM) (jta) Modified on 03/01/2004 (Entered: 03/01/2004)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 8 of 23

02/26/2004
02/26/2004 02/27/2004 03/01/2004 03/09/2004 03/10/2004 03/10/2004 03/11/2004
03/16/2004
03/26/2004 03/30/2004 03/30/2004 04/12/2004
04/15/2004
04/23/2004 04/23/2004 04/28/2004 04/28/2004 04/30/2004

34 ORDER by Judge Harold L. Murphy GRANTING [33−1] joint motion to extend time through and including 3/9/04 for plas' response to dft's [25−1] motion to dismiss action, [34−1] order to be submitted on 3/10/04 (cc) (jta) (Entered: 03/01/2004)
35 Response by plas to deft's [32−1] response to plas' [21−1] L.R. 23.1 (C)(2) Statement AND Pla's reply in support of their L.R. 23.1(C)(2) Statement. (bjj) (Entered: 03/02/2004)
Added attorney for plaintiffs: Howard Foster. (bjj) (Entered: 02/27/2004)
36 Joint Preliminary Report and Discovery Schedule. (to judge) (jta) (Entered: 03/02/2004)
37 Brief by plaintiffs in opposition to dft's [25−1] motion to dismiss action (jta) (Entered: 03/10/2004)
38 ANSWERS TO INITIAL DISCLOSURES by plaintiffs. (bjj) (Entered: 03/11/2004)
39 Certificate of interested persons. (bjj) (Entered: 03/11/2004)
SUBMITTED to Judge Harold L. Murphy on deft's [23−1] motion to vacate [12−1] prior order restricting deft's communications with putative class members; deft's [25−1] motion to dismiss action, with pla's [37−1] brief in opposition to said motion. (bjj) (Entered: 03/11/2004)
40 ORDER by Judge Harold L. Murphy ADOPTING [36−1] jt preliminary report &discovery plan w/ modifications of the discovery plan setting an 8 month discovery track; first 4 months whether Ct will certify a class in this action &2nd phase regarding the merits of plas' claims; Parties are directed to confer in re terms of proto governing the production of confidential information. (see order for details) (cc) (bj) (Entered: 03/17/2004)
41 CONSENT MOTION to file excess pages for deft's reply ; prop order. (bjj) (Entered: 03/29/2004)
42 ORDER by Judge Harold L. Murphy: GRANTING [41−1] joint motion to file excess pages for deft's reply. (cc) (bjj) (Entered: 03/31/2004)
43 Reply by deft Mohawk Industries to pla's [37−1] Brief in opposition to deft's [25−1] motion to dismiss action. (bjj) (Entered: 03/31/2004)
44 ORDER by Judge Harold L. Murphy: GRANTING IN PART AND DENYING IN PART [25−1] motion to dismiss action by Mohawk; specifically, the Court DENIES deft's motion to dismiss as to all Federal and Georgia RICO allegations in plas' complaint, DENIES deft's motion to dismiss as to plas' unjust enrichment claim as it relates to deft's wage savings in employing plas at a diminished wage rate, and GRANTS deft's motion to dismiss as to plas' unjust respect to worker's compensation claims. (cc) (bjj) (Entered: 04/12/2004)
45 ORDER by Judge Harold L. Murphy: the Court orders the parties to notify the Court w/in 10 days from the date of this Order concerning whether the parties desire a hearing w/respect to the class communications issue; [45−1] order re 10 day ddl to be submitted on 4/29/04 (cc) (bjj) (Entered: 04/15/2004)
46 MOTION by deft Mohawk Industries to amend [44−1] order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery with Memo of Law in support. (bjj) (Entered: 04/23/2004)
47 Response by plaintiffs to [45−1] order. (bjj) (Entered: 04/23/2004)
48 ANSWER to complaint [1−1] by Mohawk Industries Discovery ends 9/25/04 (jph) (Entered: 04/30/2004)
49 Response by defendant to [45−1] order (jph) (Entered: 04/30/2004)
SUBMITTED to Judge Harold L. Murphy on [45−1] order directing parties to notify the Court concerning any desire for a hearing re class communications issues, with plas' [47−1] response to order, and deft's [49−1] response to order. (bjj)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 9 of 23

05/03/2004 05/07/2004 05/07/2004 05/11/2004 05/14/2004 05/17/2004 05/20/2004 05/24/2004 05/27/2004
05/27/2004
08/04/2004 08/04/2004
08/04/2004 08/24/2004 12/03/2004 12/13/2004

(Entered: 04/30/2004)
50 Reply by plaintiffs to deft's [49−1] response to [45−1] order. (bjj) (Entered: 05/03/2004)
51 Response by plaintiffs to deft's [46−1] motion to amend [44−1] order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery. (bjj) (Entered: 05/07/2004)
SUBMITTED to Judge Harold L. Murphy on deft's [46−1] motion to amend [44−1] order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery, with plas' [51−1] response. (bjj) (Entered: 05/07/2004)
52 Reply by deft to plas' [50−1] reply to deft's [49−1] response to the Court's [45−1] order. (bjj) (Entered: 05/12/2004)
53 Joint MOTION to extend time to file prop protective order ; prop order. (bjj) (Entered: 05/17/2004)
54 ORDER by Judge Harold L. Murphy: GRANTING [53−1] joint motion to extend time until 5/19/04 to file prop protective order; [54−1] order re prop proto ddl to be submitted on 5/19/04 (cc) (bjj) (Entered: 05/18/2004)
55 AGREED PROTECTIVE ORDER ENTERED by Judge Harold L. Murphy. (bjj) (Entered: 05/21/2004)
56 Reply by deft Mohawk Industries in support of its [46−1] motion to amend [44−1] order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery. (bjj) (Entered: 05/24/2004)
57 ORDER by Judge Harold L. Murphy: DENYING [23−2] motion to vacate [12−1] prior order restricting deft's communications with putative class members by Mohawk Industries; REJECTING [21−1] Statement of Views re class communications by Shirley Williams, Gale Pelfrey, Bonnie Jones, and Lora Sisson; REJECTING [23−1] Statement of Views re class communications by deft; the 1/14/04 Order governing class communications remain in effect w/out modification. (cc) (bjj) (Entered: 05/27/2004)
58 ORDER by Judge Harold L. Murphy: GRANTING deft's [46−1] motion to amend [44−1] Order of the Court re deft's motion to dismiss to permit interlocutory appeal and for stay of discovery w/out prejudice as to issues re class certification until the Eleventh Circuit disposes of the interlocutory appeal; the Court AMENDS the April 12th, 2004 Order to provide that deft may seek interlocutory review of said Order pursuant to 28 U.S.C.A. Section 1292(b). (cc) (bjj) (Entered: 05/27/2004)
59 COPY OF ORDER from USCA GRANTING permission to Appeal pursuant to 28 U.S.C. 1292(b). USCA #04−90017−B (bj) (Entered: 08/06/2004)
NOTICE OF INTERLOCUTORY APPEAL by dft as to 59 order by USCA granting permission to appeal pursuant to 28 U.S.C. 1292(b). Filing fee $ 255, receipt number 364523. Transcript Order Form due on 8/18/2004 (bj) (Entered: 08/06/2004)
60 TRANSCRIPT ORDER FORM by Mohawk Industries, Inc. re Notice of Appeal, Case Appealed to 11th Circuit Case Number 04−13740−A. Certificate of Readiness due on 8/18/2004 (bj) (Entered: 08/23/2004)
CERTIFICATE OF READINESS of Appeal Record re Notice of Appeal filed by Mohawk Industries, Inc. USCA Case Number 04−90017−B (bj) (Entered: 08/24/2004)
NOTICE of Docketing Record on Appeal from USCA re Notice of Appeal filed by Mohawk Industries, Inc.. Case Appealed to 11th Circuit Case Number 04−13740−AA. (bj) (Entered: 12/13/2004)
Certified and Transmitted Record on Appeal to US Court of Appeals re Notice of Appeal Case Appealed to 11th Circuit Case Number 04−13740−AA. (3 vols pldgs) (bj) (Entered: 12/13/2004)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 10 of 23

07/29/2005 08/11/2005 08/15/2005 08/17/2005
08/17/2005
08/17/2005 08/18/2005 08/18/2005
08/18/2005
01/09/2006 01/27/2006 03/15/2006 03/27/2006 07/20/2006 12/05/2006 12/12/2006

61 MOTION to Lift the Stay of Discovery 58 Order, with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Thorpe, Joshua) (Entered: 07/29/2005)
62 MOTION for Order −− Defendant's Motion to Continue the Stay of Discovery Pending Its Petition for Certiorari with Brief In Support by Mohawk Industries, Inc.. (Attachments: # 1)(Cannon, R.) (Entered: 08/11/2005)
63 RESPONSE in Opposition re 62 MOTION for Order −− Defendant's Motion to Continue the Stay of Discovery Pending Its Petition for Certiorari filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Thorpe, Joshua) (Entered: 08/15/2005)
64 CERTIFICATE OF SERVICE for Plaintiffs' First Interrogatories to Defendant, Plaintiffs' First Request for Production of Documents to Defendant, Plaintiffs' Second Request for Production of Documents to Defendant, and Plaintiffs' Notice To Take Rule 30(b)(6) Deposition by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Thorpe, Joshua) (Entered: 08/17/2005)
65 Certified copy of JUDGMENT of USCA AFFIRMING IN PART, REVERSING IN PART the decision of the District Court and REMANDING to the District Court for further proceedings re: Notice of Appeal filed by Mohawk Industries, Inc., Case Appealed to 11th Circuit. Case Number 04−13740−AA. (jta) (Entered: 08/18/2005)
Appeal Record Returned: Notice of Appeal Case Appealed to 11th Circuit Case Number 04−13740−AA. (3 vols of pldgs) (jta) (Entered: 08/18/2005)
66 ORDER making the USCA mandate the judgment of this Court re Notice of Appeal USCA Appeal Number 04−13740−AA. Signed by Judge Harold L. Murphy on 08/18/05. (jta) (Entered: 08/18/2005)
67 REPLY to Response to Motion re 62 MOTION for Order −− Defendant's Motion to Continue the Stay of Discovery Pending Its Petition for Certiorari − Defendant's Reply in Support of Its Motion to Continue the Stay of Discovery Pending Its Petition for Certiorari filed by Mohawk Industries, Inc.. (Cannon, R.) (Entered: 08/18/2005)
68 ORDER denying as moot Plaintiffs' 61 Motion to Lift the Stay of Discovery and granting Deft Mohawk Industries, Inc.'s 62 Motion to Continue the Stay of Discovery pending its Petition for Certiorari. The Court STAYS discovery in this case until the Supreme Court either (a) denies Deft's petition for a writ of certiorari or (b) decides the case on the merits after granting Deft's petition. Signed by Judge Harold L. Murphy on 8/18/05. (bjj) (Entered: 08/19/2005)
69 NOTICE of Change of Address for Howard Foster, counsel for Shirley Williams (Foster, Howard) (Entered: 01/09/2006)
70 NOTICE by Mohawk Industries, Inc. of Firm Name Change (Cannon, R.) (Entered: 01/27/2006)
71 Certified and Transmitted Record on Appeal to US Supreme Court re Notice of Interlocutory Appeal. Case Appealed to US Supreme Court. Case number 05−465. Court of Appeal Case Number 04−13740−AA. (Attachments: # 1 Request from USSC)(jta) (Entered: 03/15/2006)
72 USSC acknowledgment of record (rcvd 3/21/06). Case Appealed to the Supreme Court of the U.S. Case Number 05−465. (jta) (Entered: 03/27/2006)
73 Record returned from the United States Supreme Court. (1 box/3 vols) (jta) (Entered: 07/20/2006)
74 Appeal Remark: Received certified copy of CORRECTED judgment and a copy of USCA's opinion re: [65}. Case Appealed to 11th Circuit Case Number 04−13740−AA. (dob) (Entered: 12/05/2006)
75 MOTION for Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) Modified on 12/13/2006 (dob). Modified on 12/13/2006 (dob). (Entered: 12/12/2006)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 11 of 23

12/12/2006 12/13/2006 12/13/2006 01/02/2007 01/03/2007 01/11/2007 01/16/2007 03/05/2007 03/12/2007 03/12/2007 03/21/2007 03/23/2007 03/23/2007
03/23/2007 03/29/2007

76 MOTION for Discovery [Brief with Exhibits] with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C)(Doherty, Ronan) Modified on 12/13/2006 (dob). (Entered: 12/12/2006)
77 MOTION for Discovery with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief # 2 Exhibit A# 3 Exhibit B# 4 Exhibit C)(Doherty, Ronan) (Entered: 12/13/2006)
78 NOTICE by Mohawk Industries, Inc. re 77 MOTION for Discovery − Intent to File Opposition (Cannon, R.) (Entered: 12/13/2006)
79 RESPONSE in Opposition re 77 MOTION for Discovery filed by Mohawk Industries, Inc.. (Attachments: # 1 Appendix A − Petition for Certiorari)(Cannon, R.) (Entered: 01/02/2007)
Submission of 77 MOTION for Discovery, with 78 Notice (Other) and 79 Response in Opposition to Motionsubmitted to District Judge Harold L. Murphy. (dob) (Entered: 01/03/2007)
80 REPLY BRIEF re 77 MOTION for Discovery Reply Brief In Support Of Plaintiffs' Motion To Commence Discovery filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Doherty, Ronan) (Entered: 01/11/2007)
81 ORDER denying 77 Motion for Discovery. The Court Stays discovery in this case until the Supreme Court either denies Def's petition for a writ of certiorari or decied the case on the merits after grandting Def's petition. . Signed by Judge Harold L. Murphy on 01/16/2007. (dob) (Entered: 01/16/2007)
82 Copy of letter dated 3/1/2007. The Supreme Court has denied certiorari, The court's mandate having previously issued, no further action will be taken by this court. (dob) (Entered: 03/05/2007)
83 CERTIFICATE OF SERVICE Notice of service of Subpoenas addressed to Randstad Staffing Services, Inc. and Chase Staffing Services, Inc. by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) Modified on 3/30/2007 to correctly reflect text (dob). (Entered: 03/12/2007)
84 Notice of filing Deposition by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) Modified on 3/30/2007 to reflect correct event. (dob). (Entered: 03/12/2007)
85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief In Support# 2 Exhibit A# 3 Exhibit B# 4 Exhibit C# 5 Exhibit D)(Doherty, Ronan) (Entered: 03/21/2007)
86 NOTICE by Mohawk Industries, Inc. re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses − Intent to File Opposition (Cannon, R.) (Entered: 03/23/2007)
87 ORDER directing counsel for Def to file Def's response to 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses filed by Gale Pelfrey, Bonnie Jones, Lora Sisson, Shirley Williams by 5:00pm 3/30/2007. The Court directs counsel for the Pla in Carpenter to file any response that counsel may wish to file re 85 Motion by 5:00 on 3/30/2007. The Court further directs the Clerk to add Norman Carpenter as a movant in the instant action The Court Directs counsel for Pla to file their reply in support of their 85 Motion by 5:00 pm on 4/6/2007 Signed by Judge Harold L. Murphy on 03/23/2007. (dob) (Entered: 03/23/2007)
88 NOTICE by Mohawk Industries, Inc. re 87 Order,, − Intent to File Opposition to Plaintiffs' Emergency Motion in Accordance with Schedule Set In Court's Order (Cannon, R.) (Entered: 03/23/2007)
89 CERTIFICATE OF SERVICE of Discovery Responses by Mohawk Industries, Inc..(Cannon, R.) (Entered: 03/29/2007)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 12 of 23

03/30/2007 03/30/2007 03/30/2007 03/30/2007 03/30/2007 03/30/2007 03/30/2007 03/30/2007 04/03/2007
04/03/2007 04/03/2007 04/04/2007 04/04/2007 04/05/2007

90 NOTICE of Appearance by Daniel Francis Diffley on behalf of Patricia Silvers, Jeffrey Briggs, Scott Higgins, Mohawk Industries, Inc. (Diffley, Daniel) (Entered: 03/30/2007)
91 RESPONSE in Opposition re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses filed by Patricia Silvers, Jeffrey Briggs, Scott Higgins, Mohawk Industries, Inc.. (Diffley, Daniel) (Entered: 03/30/2007)
92 RESPONSE re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses filed by Norman Carpenter. (Munger, Thomas) (Entered: 03/30/2007)
93 NOTICE Of Manual Filing UNDER SEAL Rough Transcript of Mark Dailey; Motion for Entry and Brief in Support; Motion for Sanctions and Brief in Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Iannarone, Nicole) Modified on 3/30/2007 to correct text(dob). (Entered: 03/30/2007)
94 RESPONSE in Opposition re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses filed by Mohawk Industries, Inc.. (Attachments: # 1 Exhibit A − E−mails# 2 Exhibit B − New Employee Information)(Cannon, R.) (Entered: 03/30/2007)
95 MOTION for Sanctions and to Compel as a result of Mohawk's Presentation of an unprepared Corporate Designee with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (dob) Additional attachment(s) added on 4/2/2007 (dob). DVD Depostion Excerpts un−filedable/filed in vault. DOCUMENT UNDER SEAL (Entered: 03/30/2007)
96 MOTION for the Entry of a Document Preservation Order with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (dob) DOCUMENT UNDER SEAL Additional attachment(s) added on 4/2/2007 (dob). (Entered: 04/02/2007)
97 Rough Transcription of DEPOSITION of Mary Dailey, Corporate Designee of defendant Mohawk Industries, Inc. taken on 3/22/2007 by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. DOCUMENT UNDER SEAL(dob) Additional attachment(s) added on 4/2/2007 (dob). (Entered: 04/02/2007)
98 ORDER observing that Carpenter Def's did not request permission from the Court before filing a response. The Court will not strike the response, however, the Court expects any third parties who wish to file responses to pending motion to request and obtain the courts permission prior to electronically or manually filing any material in this case. The Court further observes that Pla's reply in support of their Motion for Evidentiary Hearing remains due by 5:00 pm of 4/6/2007. Signed by Judge Harold L. Murphy on 4/3/2007. (dob) (Entered: 04/03/2007)
99 MOTION for Order Permitting Movant Carpenter To File Supplemental Brief In Support of Plaintiff's Motion for Emergency Hearing Based on Newly Discovered Evidence with Brief In Support by Norman Carpenter. (Stone, Benjamin) (Entered: 04/03/2007)
100 RESPONSE re 99 MOTION for Order Permitting Movant Carpenter To File Supplemental Brief In Support of Plaintiff's Motion for Emergency Hearing Based on Newly Discovered Evidence filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 04/03/2007)
101 ORDER denying without prejudice 99 Motion to File a Supplemental Brief and Directs Movant Carpenter to re−file that Motion attaching the proposed supplemental brief as an Exhibit to the Motion.. Signed by Judge Harold L. Murphy on 4/4/2007. (dob) (Entered: 04/04/2007)
102 Amended MOTION for Order Permitting Movant Norman Carpenter to File a Supplemental Brief Based on Newly Discovered Evidence with Brief In Support by Norman Carpenter. (Attachments: # 1 Proposed Supplemental Brief# 2 Declaration of Christina Martinez)(Stone, Benjamin) (Entered: 04/04/2007)
103 DOCUMENT FILED IN ERRORNOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson Plaintiffs' Notice of Serving Discovery (Doherty,

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 13 of 23

04/05/2007
04/06/2007 04/06/2007 04/09/2007 04/12/2007 04/12/2007 04/13/2007 04/24/2007 04/26/2007 04/26/2007 04/26/2007 04/27/2007
04/27/2007 04/27/2007 04/27/2007

Ronan) Modified on 4/6/2007 (dob). (Entered: 04/05/2007)
104 MOTION for Leave to File Certificate of Good Faith Conferral in Support of Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate Designeeby Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Iannarone, Nicole) (Entered: 04/05/2007)
Notification of Docket Correction re 103 Notice (Other). Wrong event used; should be Notice to take Depositions. (dob) (Entered: 04/06/2007)
105 REPLY BRIEF re 85 Emergency MOTION for Hearing Regarding Mohawk's Contact With Witnesses In Support of Plaintiffs' Emergency Motion filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A)(Doherty, Ronan) (Entered: 04/06/2007)
106 ORDER denying 85 "Emergency" Motion for Hearing; granting 102 Motion for Order Permitting Movant Norman Carpenter to File a Supplemental Brief Based on Newly Discovered Evidence.. Signed by Judge Harold L. Murphy on 04/09/2007. (dob) (Entered: 04/09/2007)
107 ORDER clarifying how the Clerk's Office interprets Local Rule 7.1D. Signed by Judge Harold L. Murphy on 4/12/07. (bjh) (Entered: 04/12/2007)
108 MOTION for Extension of Time File Response to Motions re: 96 MOTION for Order, 95 MOTION for Sanctions by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order Extending Time)(Cannon, R.) (Entered: 04/12/2007)
109 ORDER granting 108 Motion for Extension of Time for Def's Responses to Pla Motion for Document Preservation Order and Pla's Motion for Sanctions and to Compel through and including 4/30/2007. Signed by Judge Harold L. Murphy on 4/13/2007. (dob) (Entered: 04/13/2007)
Submission of 104 MOTION for Leave to File Certificate of Good Faith Conferral in Support of Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate Designee, submitted to District Judge Harold L. Murphy. (dob) (Entered: 04/24/2007)
110 Consent MOTION for Extension of Time to File Response to Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate Designee re: 95 MOTION for Sanctions by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order)(Cannon, R.) (Entered: 04/26/2007)
111 Consent MOTION for Order Governing Defendant Mohawk Industries, Inc.'s Preservation of Documents by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order)(Cannon, R.) (Entered: 04/26/2007)
112 CERTIFICATE OF SERVICE of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) (Entered: 04/26/2007)
113 ORDER granting 104 Motion for Leave to File Certificate of Good Faith Conferral in Support of Plas' Motion for Sanctions and to Compel and Directing cousel for Pla to file the Certificate of good faith conferral attached as Exhibit A to their Motion for Leave to File within 10 days.. Signed by Judge Harold L. Murphy on 4/27/2007. (dob) (Entered: 04/27/2007)
114 ORDER denying as moot 96 Motion for Entry of a Document Preservation Order. Plaintiffs withdrew their Motion without prejudice in docket No. 96 .. Signed by Judge Harold L. Murphy on 4/27/2007. (dob) (Entered: 04/27/2007)
115 ORDER granting 111 Motion for Order Governing Defendant Mohawk Ind., Inc.'s Preservation of Documents. Signed by Judge Harold L. Murphy on 4/27/2007. (Attachments: # 1 attachment/memorandum) (dob) (Entered: 04/27/2007)
116 ORDER granting 110 Motion for Extension of Time re 110 Consent MOTION for Extension of Time to File Response to Plaintiffs' Motion for Sanctions and to Compel as a Result of Mohawk's Presentation of an Unprepared Corporate Designee re: 95 MOTION for Sanctions Consent MOTION for Extension of Time to File Response to Plaintiffs' Motion for Sanctions and to Compel as a Result of

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 14 of 23

04/30/2007 04/30/2007 05/01/2007 05/07/2007 05/07/2007 05/07/2007 05/07/2007 05/11/2007 05/14/2007 05/18/2007 05/22/2007 05/22/2007 05/22/2007 05/22/2007 05/23/2007 05/29/2007 05/30/2007 06/02/2007

Mohawk's Presentation of an Unprepared Corporate Designee re: 95 MOTION for Sanctions Defendant shall have through and including 5/11/2007 to file is response. Signed by Judge Harold L. Murphy on 4/27/2007. (dob) (Entered: 04/27/2007)
117 NOTICE Of Filing Certificate of Good Faith Conferral by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Iannarone, Nicole) Modified on 5/1/2007, link to 113 (dob). (Entered: 04/30/2007)
118 NOTICE to Take Deposition of Mohawk Industries, Inc. filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 04/30/2007)
119 CERTIFICATE OF SERVICE of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) (Entered: 05/01/2007)
120 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Corporate Structure filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/07/2007)
121 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Temporary Workers filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/07/2007)
122 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Hourly Wages filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/07/2007)
123 CERTIFICATE OF SERVICE of Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) (Entered: 05/07/2007)
124 Withdrawal of Motion 95 MOTION for Sanctions filed by Gale Pelfrey, Bonnie Jones, Lora Sisson, Shirley Williams filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 05/11/2007)
125 ORDER denying as moot and without prejudice re 95 MOTION for Sanctions filed by Gale Pelfrey, Bonnie Jones, Lora Sisson, Shirley Williams Signed by Judge Harold L. Murphy on 5/11/2007. (dob) (Entered: 05/14/2007)
126 NOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson Notice of Death of Plaintiff (Iannarone, Nicole) (Entered: 05/18/2007)
127 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Corporate Structure filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/22/2007)
128 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Temporary Workers filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/22/2007)
129 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Hourly Wages filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/22/2007)
130 NOTICE to Take Deposition of Mohawk Industries, Inc. Regarding Policies For Complying With The Immigration Laws filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/22/2007)
131 CERTIFICATE OF SERVICE of Serving Discovery by Mohawk Industries, Inc..(Cannon, R.) (Entered: 05/23/2007)
132 CERTIFICATE OF SERVICE Plaintiffs' Notice of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Doherty, Ronan) (Entered: 05/29/2007)
133 NOTICE to Take Deposition of Frank Boykin filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 05/30/2007)
134 CERTIFICATE OF SERVICE of Serving Objections and Responses to Discovery by Mohawk Industries, Inc..(Cannon, R.) (Entered: 06/02/2007)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 15 of 23

06/06/2007 06/06/2007 06/08/2007 06/18/2007
06/19/2007 06/22/2007 06/25/2007 06/25/2007 06/27/2007 06/28/2007 06/29/2007 07/09/2007 07/09/2007 07/11/2007 07/25/2007 07/25/2007 08/06/2007 08/06/2007 08/06/2007

135 APPLICATION for Admission of R. Carl Cannon Pro Hac Vice as to Stephen M. Nickelsburgby Mohawk Industries, Inc..Filing Fee received $150.00, Receipt #366278. (dob) (Entered: 06/06/2007)
136 STIPULATION Joint Stipulation Of The Parties by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 06/06/2007)
137 ORDER granting 135 Application for Admission Pro Hac Vice as to Stephen M. Nickelsburg. Signed by Judge Robert L. Vining Jr. on 6/8/2007. (dob) (Entered: 06/08/2007)
138 DOCUMENT FILED IN ERRORRequest to File Original Discovery Response to Request for Production of Documents by Strategic Outsourcing Solutions, Inc..(Cowan, Robert) Modified on 6/19/2007 to restrict access(jta). (Entered: 06/18/2007)
Notification of Docket Correction re 138 Request to File Original Discovery. Attorney sould have filed a Certificate of Service. See Local Rule 5.4. (jta) (Entered: 06/19/2007)
139 DOCUMENT FILED IN ERROR NOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson of Serving Discovery (Iannarone, Nicole) Modified on 6/25/2007, wrong event used(dob). (Entered: 06/22/2007)
Notification of Docket Correction re 139 Notice (Other). Attorney should have file a Certificate of Service. (dob) (Entered: 06/25/2007)
140 CERTIFICATE OF SERVICE Plaintiffs' Notice of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Iannarone, Nicole) (Entered: 06/25/2007)
141 Consent MOTION for Extension of Time to Complete Discovery re Class Certification by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order Extending Time)(Cannon, R.) (Entered: 06/27/2007)
142 ORDER granting 141 Motion for Extension of Time to Complete Discovery Discovery ends on 8/31/2007.. Signed by Judge Harold L. Murphy on 6/28/2007. (dob) (Entered: 06/28/2007)
143 CERTIFICATE OF SERVICE of Serving Objections and Responses to Discovery by Mohawk Industries, Inc..(Cannon, R.) (Entered: 06/29/2007)
144 CERTIFICATE OF SERVICE of Serving Discovery by Mohawk Industries, Inc..(Cannon, R.) (Entered: 07/09/2007)
145 NOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones Certification of Substantial Compliance with Discovery (Iannarone, Nicole) (Entered: 07/09/2007)
146 CERTIFICATE OF SERVICE Plaintiffs' Notice of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Iannarone, Nicole) (Entered: 07/11/2007)
147 DOCUMENT FILED IN ERROR NOTICE by Mohawk Industries, Inc. of Change of Counsel's Firm Affiliation and Contact Information (Cannon, R.) Modified on 7/25/2007 (dob). (Entered: 07/25/2007)
Notification of Docket Correction re 147 Notice (Other). Notice filed under wrong event type. Attorney to refile. (dob) (Entered: 07/25/2007)
148 Third NOTICE to Take Deposition of Mohawk Industries, Inc. re IRCA filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/06/2007)
149 Third NOTICE to Take Deposition of Mohawk Industries, Inc. re temporary workers filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/06/2007)
150 Third NOTICE to Take Deposition of Mohawk Industries, Inc. re hourly wages filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/06/2007)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 16 of 23

08/07/2007 08/07/2007 08/07/2007 08/07/2007 08/07/2007 08/09/2007
08/10/2007
08/10/2007 08/10/2007 08/10/2007 08/10/2007 08/20/2007 08/31/2007 09/05/2007 09/07/2007
09/10/2007 11/21/2007 11/26/2007

151 CERTIFICATE OF SERVICE Notice of Serving Discovery by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(Iannarone, Nicole) (Entered: 08/07/2007)
152 Cross NOTICE to Take Deposition of Norman Carpenter filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/07/2007)
153 Cross NOTICE to Take Deposition of Christina Martinez filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/07/2007)
154 Cross NOTICE to Take Deposition of Patricia Silver filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/07/2007)
155 Cross NOTICE to Take Deposition of Rebecca Hale filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Doherty, Ronan) (Entered: 08/07/2007)
156 MOTION for Sanctions or for an Order to Show Cause Why Defendant Mohawk Industries, Inc. Should Not Be Held in Contempt with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief Brief in Support of Motion for Sanctions# 2 Exhibit Exhibit A for Brief in Support of Motion for Sanctions# 3 Exhibit Exhibit B to Brief in Support for Motion for Sanctions# 4 Exhibit Exhibit C for Brief in Support for Motion for Sanctions)(Doherty, Ronan) (Entered: 08/09/2007)
157 ORDER denying without prejudice 156 Motion for Sanctions. The Court directs Plas to re−file the Motion along with an accompanying certificate of good faith conferral.. Signed by Judge Harold L. Murphy on 8/10/2007. (dob) (Entered: 08/10/2007)
158 NOTICE to Take Deposition of Plaintiff Bonnie Jones filed by Mohawk Industries, Inc. (Cannon, R.) (Entered: 08/10/2007)
159 NOTICE to Take Deposition of Plaintiff Gale Pelfrey filed by Mohawk Industries, Inc. (Cannon, R.) (Entered: 08/10/2007)
160 NOTICE to Take Deposition of Plaintiff Shirley Williams filed by Mohawk Industries, Inc. (Cannon, R.) (Entered: 08/10/2007)
161 NOTICE of Change of Address for Steven Thomas Cottreau, counsel for Mohawk Industries, Inc. (Cottreau, Steven) (Entered: 08/10/2007)
162 NOTICE of Change of Address for Juan P. Morillo, counsel for Mohawk Industries, Inc. (Morillo, Juan) (Entered: 08/20/2007)
163 Consent MOTION for Extension of Time to Complete Discovery re Class by Mohawk Industries, Inc.. (Attachments: # 1 Text of Proposed Order Granting Extension of Discovery)(Cannon, R.) (Entered: 08/31/2007)
164 ORDER granting dft Mohawk's 163 Motion for Extension of Time to Complete Discovery. Discovery ends on 11/30/2007. See Order for details. Signed by Judge Harold L. Murphy on 9/5/07. (jta) (Entered: 09/05/2007)
165 MOTION for Leave to File Opposition to Mohawk Industries, Inc.'s Motion for Protective Orderby Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D)(Doherty, Ronan) (Entered: 09/07/2007)
166 ORDER denying as moot and without prejudice 165 Motion for Leave to File. The Court will address the Motion for Leave to file Opposition in the Carpenter case.. Signed by Judge Harold L. Murphy on 9/10/2007. (dob) (Entered: 09/10/2007)
167 Consent MOTION for Order Regarding Class Certification Briefing by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Thorpe, Joshua) (Entered: 11/21/2007)
168 ORDER granting 167 Motion for Order Regarding Class Certification Briefing. Schedule contained within order.. Signed by Judge Harold L. Murphy on 11/26/2007. (dob) (Entered: 11/26/2007)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 17 of 23

12/10/2007 12/18/2007 12/18/2007 12/18/2007 12/18/2007 12/18/2007 12/19/2007 12/19/2007
12/20/2007 12/26/2007 12/26/2007
12/26/2007
01/07/2008 01/30/2008

169 NOTICE by Shirley Williams, Gale Pelfrey, Bonnie Jones Notice of Death of Plaintiff (Iannarone, Nicole) (Entered: 12/10/2007)
170 NOTICE Of Filing by Gale Pelfrey, Bonnie Jones Plaintiffs' Notice of Manual Filing Under Seal (Doherty, Ronan) (Entered: 12/18/2007)
171 NOTICE Of Filing by Gale Pelfrey, Bonnie Jones Plaintiffs' Notice of Manual Filing Original Depositions Under Seal (Doherty, Ronan) (Entered: 12/18/2007)
172 NOTICE Of Filing by Gale Pelfrey, Bonnie Jones Plaintiffs' Notice of Manual Filing of Original Deposition (Doherty, Ronan) (Entered: 12/18/2007)
173 Request to File Original Discovery Deposition by Gale Pelfrey, Bonnie Jones.(Doherty, Ronan) (Entered: 12/18/2007)
174 MOTION to Certify Class by Gale Pelfrey, Bonnie Jones. (Attachments: # 1 Exhibit 1)(Doherty, Ronan) (Entered: 12/18/2007)
175 DEPOSITION of Mark Dailey taken on March 22, 2007 by Gale Pelfrey, Bonnie Jones. (Attachments: # 1 Exhibit Dailey 1, # 2 Exhibit Dailey 2, # 3 Exhibit Dailey 3, # 4 Exhibit Dailey 4)(Doherty, Ronan) (Entered: 12/19/2007)
176 Redacted Brief in Support of Plaintiffs' 174 Motion for Class Certification with un−sealed exhibits by Gale Pelfrey, Bonnie Jones. (Attachments: # 1 Exhibit Index to Exhibits, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6, # 8 Exhibit 7, # 9 Exhibit 8, # 10 Exhibit 9, # 11 Exhibit 10, # 12 Exhibit 11, # 13 Exhibit 12, # 14 Exhibit 13, # 15 Exhibit 14, # 16 Exhibit 15, # 17 Exhibit 16, # 18 Exhibit 17, # 19 Exhibit 18, # 20 Exhibit 19, # 21 Exhibit 20, # 22 Exhibit 21, # 23 Exhibit 22, # 24 Exhibit 23, # 25 Exhibit 24, # 26 Exhibit 25, # 27 Exhibit 26, # 28 Exhibit 27, # 29 Exhibit 28, # 30 Exhibit 29, # 31 Exhibit 30, # 32 Exhibit 31, # 33 Exhibit 32, # 34 Exhibit 33, # 35 Exhibit 34, # 36 Exhibit 35)(Thorpe, Joshua) Modified on 12/20/2007 to accurately reflect e−filed document and to properly link document to motion(jta). Modified on 12/26/2007 (dob). (Entered: 12/19/2007)
Notification of Docket Correction re 176 MOTION to Certify Class Redacted Brief in Support of Plaintiffs' Motion for Class Certification. Wrong event used. This document is a Brief in support not a motion. Attorney notified by phone. (jta) (Entered: 12/20/2007)
Notification of Docket Correction re 172 Notice of Manual Filing Deposition. Should have been filed as a Notice of filing. Attorney e−filed Deposition 175 . (dob) (Entered: 12/26/2007)
177 DOCUMENTS FILED UNDER SEALDEPOSITION of Matthew Brown, Kenneth Glenn Michales, Ginger Talley, Deborah Tapley, Barbara Waters, Catherine Stuff, Cheryl Joannsen, Robert Calabro. by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson.(dob) (Additional attachment(s) added on 12/26/2007: # 1 8/30/2007 Brown, # 2 8/30/2007 Amendment to Brown, # 3 Talley, # 4 Tapley, # 5 Waters, # 6 Stuff, # 7 Johannsen, # 8 Calabro, # 9 Michaels) (dob). Modified text on 12/26/2007 (dob). (Additional attachment(s) added on 7/10/2008: # 10 Brown 8/23/2007) (dob). (Entered: 12/26/2007)
178 DOCUMENT FILED UNDER SEALEXHIBITS to 176 Brief in Support of 174 Plaintiff's Motion for Class Certification. (dob) (Additional attachment(s) added on 12/26/2007: # 1 Exhibit 5, # 2 Exhibit 6, # 3 Exhibit 8, # 4 Exhibit 9, # 5 Exhibit 13, # 6 Exhibit 14, # 7 Exhibit 17, # 8 Exhibit 22, # 9 Exhibit 23, # 10 Exhibit 24, # 11 Exhibit 25, # 12 Exhibit 26, # 13 Exhibit 27, # 14 Exhibit 28, # 15 Exhibit 29, # 16 Exhibit 30, # 17 Exhibit 33) (dob). Modified on 12/26/2007 (dob). (Entered: 12/26/2007)
Submission of 174 MOTION to Certify Class with 176 Redacted Brief and 178 under seal exhibits, submitted to District Judge Harold L. Murphy. (dob) (Entered: 01/07/2008)
179 NOTICE Of Filing Defendant's Notice of Manual Filing Under Seal by Mohawk Industries, Inc. (Cannon, R.) (Entered: 01/30/2008)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 18 of 23

01/30/2008
01/30/2008
01/31/2008 02/01/2008 02/01/2008 02/01/2008 02/06/2008 02/22/2008 02/22/2008
02/22/2008 03/03/2008 03/24/2008

180 DOCUMENT FILED UNDER SEAL RESPONSE in Opposition re 174 MOTION to Certify Class filed by Mohawk Industries, Inc.. (dob) (Additional attachment(s) added on 1/30/2008: # 1 Index of Exhibits, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Errata 5, # 7 Exhibit 6, # 8 Exhibit 7, # 9 Exhibit 8, # 10 Exhibit 9) (dob). (Additional attachment(s) added on 1/30/2008: # 11 Exhibit 10, # 12 Exhibit 11, # 13 Exhibit 12, # 14 Exhibit 13, # 15 Exhibit 14, # 16 Exhibit 15) (dob). (Additional attachment(s) added on 1/30/2008: # 17 Exhibit 16, # 18 Exhibit 17, # 19 Exhibit 18, # 20 Exhibit 19, # 21 Exhibit 20, # 22 Exhibit 21, # 23 Exhibit 22, # 24 Exhibit 23, # 25 Exhibit 24, # 26 Exhibit 25, # 27 Exhibit 26, # 28 Exhibit 27, # 29 Exhibit 28, # 30 Exhibit 29, # 31 Exhibit 30) (dob). Modified on 1/30/2008 (dob). Modified on 1/30/2008 (dob). (Entered: 01/30/2008)
181 RESPONSE in Opposition re 174 MOTION to Certify Class − Redacted Version filed by Mohawk Industries, Inc.. (Attachments: # 1 Exhibit Index, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6, # 8 Exhibit 7, # 9 Exhibit 8, # 10 Exhibit 9, # 11 Exhibit 10, # 12 Exhibit 11, # 13 Exhibit 12, # 14 Exhibit 13, # 15 Exhibit 14, # 16 Exhibit 15, # 17 Exhibit 16, # 18 Exhibit 17, # 19 Exhibit 18, # 20 Exhibit 19, # 21 Exhibit 20, # 22 Exhibit 21, # 23 Exhibit 22, # 24 Exhibit 23, # 25 Exhibit 24, # 26 Exhibit 25, # 27 Exhibit 26, # 28 Exhibit 27, # 29 Exhibit 28, # 30 Exhibit 29, # 31 Exhibit 30)(Cannon, R.) (Entered: 01/30/2008)
182 NOTICE Of Filing Depositions of Bonnie Jones, Shirley Jane Williams, Gale Pelfrey by Mohawk Industries, Inc. (Cannon, R.) (Entered: 01/31/2008)
183 DEPOSITION of Shirley Jane Williams taken on Aug. 16, 2007 by Mohawk Industries, Inc.. (Attachments: # 1 Appendix Word Index, # 2 Exhibit Deposition Exhibits)(Cannon, R.) (Entered: 02/01/2008)
184 DEPOSITION of Gale Pelfrey taken on Aug. 15, 2007 by Mohawk Industries, Inc.. (Attachments: # 1 Appendix Word Index, # 2 Exhibit Deposition Exhibits, # 3 Errata)(Cannon, R.) (Entered: 02/01/2008)
185 DEPOSITION of Bonnie Jones taken on Aug. 14, 2007 by Mohawk Industries, Inc.. (Attachments: # 1 Word Index, # 2 Deposition Exhibits, # 3 Errata)(Cannon, R.) (Entered: 02/01/2008)
186 ORDER directing the parties to file a separate request or motion for all future requests for hearings or oral arguments. Parties should not continue to request oral arguments in this case. by Judge Harold L. Murphy on 2/6/2008. (dob) Modified on 9/16/2008 to add additional instruction in order. (dob). (Entered: 02/06/2008)
187 NOTICE Of Filing Under Seal − Reply Brief in Support of Plaintiffs' Motion for Class Certification by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Thorpe, Joshua) (Entered: 02/22/2008)
188 REPLY BRIEF re 176 MOTION to Certify Class Redacted Brief in Support of Plaintiffs' Motion for Class Certification, 174 MOTION to Certify Class filed by Gale Pelfrey, Bonnie Jones. (Attachments: # 1 Exhibit 36, # 2 Exhibit 37, # 3 Exhibit 38, # 4 Exhibit 39, # 5 Exhibit 40, # 6 Exhibit 41, # 7 Exhibit 42, # 8 Exhibit 43, # 9 Exhibit 44, # 10 Exhibit 45, # 11 Exhibit 46, # 12 Exhibit 47, # 13 Exhibit 48, # 14 Exhibit 49, # 15 Exhibit 50, # 16 Exhibit 51, # 17 Exhibit 52, # 18 Exhibit 53)(Thorpe, Joshua) (Entered: 02/22/2008)
189 DOCUMENT FILED UNDER SEAL REPLY BRIEF in Support of Plaintiffs' 174 MOTION to Certify Class filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (dob) Modified on 2/22/2008 (dob). (Additional attachment(s) added on 2/22/2008: # 1 Main Document) (dob). Modified on 2/22/2008 (dob). Modified on 2/22/2008 (dob). (Entered: 02/22/2008)
190 ORDER DENYING plaintiffs' 174 Motion for Class Certification. THIS ORDER IS NOT INTENDED FOR PUBLICATION. Signed by Judge Harold L. Murphy on 3/3/08. (Attachments: # 1 Order pages 65−136) (jta) (Entered: 03/03/2008)
191 Consent MOTION to Stay Pending Resolution of Plaintiffs' Rule 23(F) Petition by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 03/24/2008)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 19 of 23

03/26/2008 04/22/2008 04/22/2008 06/26/2008
06/26/2008 06/26/2008 06/27/2008 07/07/2008 07/11/2008 07/11/2008 07/14/2008 07/17/2008 11/12/2008 11/13/2008 11/19/2008 04/07/2009 06/29/2009
06/29/2009

192 ORDER granting 191 Motion to Stay. Signed by Judge Harold L. Murphy on 3/26/2008. (dob) (Entered: 03/26/2008)
193 Certification of Consent to Substitution of Counsel. R. Carl Cannon replacing attorney Rosemary C. Lumpkins. (Cannon, R.) (Entered: 04/22/2008)
194 Certification of Consent to Substitution of Counsel. R. Carl Cannon replacing attorney Virginia A. Seitz. (Cannon, R.) (Entered: 04/22/2008)
195 NOTICE OF APPEAL (USCA Order granting the petition for permission to appeal pursuant to FRCP Rule 23(f)) by Shirley Williams. Filing fee $ 455, receipt number 366912. Transcript Order Form due on 7/11/2008 (Attachments: # 1 Letter from USCA)(jta) (Entered: 06/26/2008)
Spoke with attorney re Transcript Order Form. They have completed form and are mailing re 195 Notice of Appeal. (jta) (Entered: 06/26/2008)
196 USCA Appeal Fees received $ 455 receipt number 366912 re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit. Case Number 08−13446−G. (jta) (Entered: 06/26/2008)
197 TRANSCRIPT ORDER FORM (No Hearing) re 195 Notice of Appeal,. Case Appealed to 11th Circuit. Case Number 08−13446−G. Certificate of Readiness due on 7/14/2008. (jta) (Entered: 06/27/2008)
198 Transmission of Certified Copy of Receipt of Payment US Court of Appeals re 195 Notice of Appeal. (dob) (Entered: 07/07/2008)
CERTIFICATE OF READINESS of Appeal Record re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−G. (dob) (Entered: 07/11/2008)
199 Certified copy of CERTIFICATE OF READINESS transmitted to USCA Case Appealed to 11th Circuit Case Number 08−13446−G (Attachments: # 1 Docket Sheet)(dob) (Entered: 07/11/2008)
200 USCA Acknowledgment of payment receipt re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−G. (dob) (Entered: 07/14/2008)
201 USCA Acknowledgment of receipt of COR re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−G. (dob) (Entered: 07/17/2008)
202 FORTHWITH LETTER from USCA re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−GG. Appeal Record due by 11/24/2008. (dob) (Entered: 11/12/2008)
203 Certified and Transmitted Record on Appeal to US Court of Appeals re 195 Notice of Appeal, Case Appealed to 11th Circuit Case Number 08−13446−GG. (dob) (Entered: 11/13/2008)
204 USCA Acknowledgment of receipt of ROA re 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit Case Number 08−13446−GG. (dob) (Entered: 11/19/2008)
205 NOTICE of Change of Address for Howard Foster, counsel for Shirley Williams (Foster, Howard) (Entered: 04/07/2009)
206 Certified copy of JUDGMENT of USCA VACATING the decision of the District Court denying class certification and REMANDING for further proceedings consistent with this opinion re: 195 Notice of Appeal, filed by Shirley Williams. Case Appealed to 11th Circuit. Case Number 08−13446−GG. (jta) (Entered: 06/29/2009)
207 Appeal Record Returned: 195 Notice of Appeal, Case Appealed to 11th Circuit. Case Number 08−13446−GG. (1 box exhibits, 5 envelopes of sealed; 5 vols pleadings). (jta) (Entered: 06/29/2009)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 20 of 23

06/29/2009 06/29/2009 06/29/2009 06/30/2009
06/30/2009 07/10/2009 07/10/2009 07/13/2009 07/13/2009
11/06/2009 11/16/2009
11/16/2009 11/17/2009 11/17/2009

Submission of 206 USCA Judgment, with Proposed Mandate Order, submitted to District Judge Harold L. Murphy. (jta) (Entered: 06/29/2009)
208 ORDER making the USCA mandate the judgment of this Court re 195 Notice of Appeal. Case Appealed to 11th Circuit. Case Number 08−13446−GG. Signed by Judge Harold L. Murphy on 6/29/09. (jta) (Entered: 06/29/2009)
Clerks Certificate of Mailing as to Stephen H. Nickelsburg for Mohawk Industries, Inc. re 208 USCA Mandate. (jta) (Entered: 06/29/2009)
209 ORDER DIRECTING the parties to provide the Court with an update concerning the status of this case within 10 days. In the update, the parties should advise the Court as to whether Defendant plans to seek further appellate review of the Eleventh Circuit's opinion concerning class certification. The parties also should advise the Court as to whether the parties wish to file additional briefs concerning the issues that the Court must resolve on remand. If the parties conclude that additional briefing is warranted, the parties also should attempt to present the Court with an agreed−upon briefing schedule. The Court DIRECTS the Clerk to RE−SUBMIT this case to the Court after the conclusion of the ten−day period. Signed by Judge Harold L. Murphy on 6/30/09. (jta) (Entered: 06/30/2009)
Clerks Certificate of Mailing as to Stephen H. Nickelsburg for Mohawk Industries, Inc. re 209 Order. (jta) (Entered: 06/30/2009)
210 STATUS REPORT Joint Report of the Parties Concerning the Status of the Case and Joint Motion to Stay by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit 1)(Doherty, Ronan) (Entered: 07/10/2009)
211 MOTION to Stay by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Proposed Order)(dob) (Entered: 07/13/2009)
Notification of Docket Correction re 210 Status Report. Pleading is a dual pleading, contains motion. Clerk docked motion 211 . (dob) (Entered: 07/13/2009)
212 ORDER granting 211 Motion to Stay until the US Supreme Court rules on Mohawk's petition for certiorari. The Court orders the parties to submit a update on the status of this case within 10 days after the US Supreme Court rules. Noting in this Order shall preclude any part from filing a request to lift the stay in the event that party believes that circumstances no longer warrant a continued stay in this Court.. Signed by Judge Harold L. Murphy on 7/13/2009. (dob) (Entered: 07/13/2009)
213 Notice by USCA of the US Supreme Court's decision DENYING certiorari. (dob) (Entered: 11/06/2009)
214 ORDER directing parties and their counsel to appear before the Court for a status conference, ( Status Conference set for 12/2/2009 at 10:30 AM in ROME Courtroom 300 before Judge Harold L. Murphy.) The Court further ORDERS that Defendant Mohawk's insurance carrier attend the conference in the person of its attorney, Julie Dean Larsen, Esq. of Kutak Rock &Huie, 18201 Van Karman Avenue, Irvine, California, 92612−0177. The Court also ORDERS that the mediator, Attorney Hunter Hughes, Esq., of Rogers &Hardin, 229 Peachtree Street, N.E., 2700 International Tower, Peachtree Center, Atlanta, Georgia, 30303−1601, attend the conference. The Court DIRECTS the Clerk to MAIL a copy of this Order to Attorney Larson and to Attorney Hughes at their respective addresses. Signed by Judge Harold L. Murphy on 11/16/2009. (dob) (Entered: 11/16/2009)
Clerks Certificate of Mailing to Julie Dean Larsen and Hunter Hughes re 214 Order. (dob) (Entered: 11/16/2009)
215 STATUS REPORT and Request for Briefing Schedule by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Text of Proposed Order)(Doherty, Ronan) (Entered: 11/17/2009)
216 STATUS REPORT and Request for Limited Class Discovery by Mohawk Industries, Inc.. (Attachments: # 1 Proposed Order)(Cottreau, Steven) (Entered: 11/17/2009)

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 21 of 23

11/17/2009 11/17/2009 11/18/2009 12/01/2009
12/02/2009 12/03/2009 12/07/2009 12/08/2009 04/09/2010
04/12/2010 04/12/2010
04/28/2010
04/29/2010 04/29/2010 07/08/2010 07/08/2010 07/08/2010

217 MOTION for Briefing Schedule as found in 215 Status Report by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Proposed Order)(dob) (Entered: 11/18/2009)
218 MOTION for Limited Class Discovery as found in 216 Status Report by Mohawk Industries, Inc.. (Attachments: # 1 Proposed Order)(dob) (Entered: 11/18/2009)
Notification of Docket Correction re 215 Status Report, 216 Status Report. Docket entries contained motions. Clerk filed motions as 217 , 218 . (dob) (Entered: 11/18/2009)
219 RESPONSE in Opposition re 218 MOTION for Discovery Plaintiffs' Opposition to Defendant's Motion for Limited Class Discovery filed by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Doherty, Ronan) (Entered: 12/01/2009)
220 NOTICE of Appearance as to Christopher Sutton Connelly by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (dob) (Entered: 12/02/2009)
221 ORDER denying as moot and without prejudice 217 Motion for Briefing Schedule; denying 218 Motion for Limited Class Discovery. Signed by Judge Harold L. Murphy on 12/3/2009. (dob) (Entered: 12/03/2009)
222 Letter from Clerk re: LR 83.1 Attorney Admission requirements sent to Christopher Sutton Connelly. Clerk to follow−up by 12/17/2009. (jkm) (Entered: 12/07/2009)
223 NOTICE of Change of Address for Howard Foster, counsel for Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson (Foster, Howard) (Entered: 12/08/2009)
224 Unopposed MOTION for Settlement (Preliminary Approval of Settlement) with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit 1 to Motion (Proposed Order), # 2 Brief, # 3 Exhibit 1 to Brief (Settlement Agreement), # 4 Exhibit A to Settlement Agreement (Notice), # 5 Exhibit B to Settlement Agreement (Claim Form), # 6 Exhibit C to Settlement Agreement (Press Release), # 7 Exhibit 2 to Brief (Proposed Order))(Doherty, Ronan) (Entered: 04/09/2010)
225 ORDER granting 224 Unopposed Motion for Settlement. Signed by Judge Harold L. Murphy on 4/12/10. (jta) (Entered: 04/12/2010)
226 ORDER: The Court ORDERS counsel for the parties to appear before the Court at 10:30 a.m. E.S.T. on Thursday, July 22, 2010, for a final hearing to approve the settlement agreement in this case. Signed by Judge Harold L. Murphy on 4/12/10. (jta) (Entered: 04/12/2010)
227 Unopposed MOTION to Amend 224 titled Preliminary Approval of Amended Settlement Agreement and Corrected Notice to the Class by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Doherty, Ronan) Modified on 4/29/2010 to clarify text of pleading and add link (dob). (Entered: 04/28/2010)
Notification of Docket Correction re 227 MOTION to Amend. Clerk made necessary changes to edit text to reflect title of pleading and add appropriate link. (dob) (Entered: 04/29/2010)
228 ORDER granting 227 Motion to Amend and grants preliminary approval of the Settlement Agreement as amended. Signed by Judge Harold L. Murphy on 4/29/2010. (dob) (Entered: 04/29/2010)
229 NOTICE of Change of Address for Howard Foster, counsel for Shirley Williams (Foster, Howard) (Entered: 07/08/2010)
230 MOTION for Settlement Final Approval with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Exhibit B)(Doherty, Ronan) (Entered: 07/08/2010)
231 MOTION for Order Approving Class Service Awards for Gale Pelfrey and Bonnie Jones with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 22 of 23

07/08/2010 07/08/2010
07/09/2010 07/09/2010 07/09/2010 07/09/2010 07/13/2010
07/15/2010 07/15/2010 07/15/2010 07/19/2010 07/22/2010
07/22/2010

Sisson. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C)(Doherty, Ronan) (Entered: 07/08/2010)
232 MOTION for Order Approving an Administration, Withholding, Expense and Attorneys' Fee Award by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Doherty, Ronan) (Entered: 07/08/2010)
233 Unopposed MOTION for Leave to File Excess Pages In Support of Plaintiffs' Motion for an Administration, Withholding, Expense and Attorneys' Fee Award with Brief In Support by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J, # 12 Exhibit K)(Doherty, Ronan) (Entered: 07/08/2010)
234 ORDER granting 233 Motion for Leave to File Excess Pages. Signed by Judge Harold L. Murphy on 7/9/2010. (dob) (Additional attachment(s) added on 7/9/2010: # 1 Main Document/Corrected PDF) (dob). (Entered: 07/09/2010)
235 NOTICE of Appearance by Cynthia Noles Johnson on behalf of Lora Sisson (Johnson, Cynthia) (Entered: 07/09/2010)
236 MOTION File Out of Time Motion with Brief In Support by Lora Sisson. (Attachments: # 1 Brief, # 2 Affidavit)(Johnson, Cynthia) (Entered: 07/09/2010)
237 MOTION for Order for Class Service Award with Brief In Support by Lora Sisson. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Exhibit B, # 4 Affidavit)(Johnson, Cynthia) (Entered: 07/09/2010)
238 NOTICE Of Filing the Declaration of Hunter R. Hughes, III in Support of Plaintiffs' 230 MOTION for Settlement Final Approval by Shirley Williams, Gale Pelfrey, Bonnie Jones, Lora Sisson(Attachments: # 1 Exhibit A)(Doherty, Ronan) Modified on 7/13/2010 to remove double wording from text (dob). (Entered: 07/13/2010)
239 PROPOSED ORDER Granting Final Approval of the Settlement Agreement re: 230 MOTION for Settlement Final Approval. (Doherty, Ronan) (Entered: 07/15/2010)
240 PROPOSED ORDER Granting Class Service Awards re: 231 MOTION for Order Approving Class Service Awards for Gale Pelfrey and Bonnie Jones. (Doherty, Ronan) (Entered: 07/15/2010)
241 PROPOSED ORDER Granting Plaintiffs' Motion for an Administration, Withholding, Expense and Attorneys' Fee Award re: 232 MOTION for Order Approving an Administration, Withholding, Expense and Attorneys' Fee Award. (Doherty, Ronan) (Entered: 07/15/2010)
242 NOTICE of Filing Exclusion Forms by Claims Administrator. (dob) (Entered: 07/19/2010)
243 Minute Entry for proceedings held before Judge Harold L. Murphy: Motion Hearing held on 7/22/2010. Fairness Hearing −the Court adopts the findings of facts and the conclusions contained in the proposed orders numbered in the docket as 239, 240 241, the plaintiff moves for final approval as to all matters; the Court orally grants the approval of the settlement and will issue a written order. The Court further directs that the case be administratively closed and directs the Clerk to not issue a final judgment at this time. After appropriate notice from the parties, the Court will direct that the final judgment be entered.(Court Reporter Alicia Bagley)(dob) (Entered: 07/22/2010)
244 ORDER granting 230 Motion for Settlement and grants Final Approval to the proposed settlement agreement in this case ; granting 231 Motion for Order Approving Class Service Awards for Gale Pelfrey and Bonnie Jones; granting 232 Motion for Order Approving an Administration, Withholding, Expense, and Attorney;s Fee Award and APPROVES an Administration, Withholding, Expense, and Attorneys' Fee Award of $6 million, which includes: (1) payment of the costs of settlement administration, currently estimated at $285,000; (2) payment of withholding taxes on the Class Members' wage awards; (3) payment of

Case: 4:04-cv-3 As of: 02/20/2013 02:51 PM EST 23 of 23

07/22/2010 08/19/2010 08/19/2010
08/19/2010 08/19/2010

$363,615.00 in expenses paid by Class Counsel through May 31, 2010; and (4) payment of the balance as an attorneys' fee award to Class Counsel ;granting 236 Motion to File Out of Time Motion by Ronald Cronan; granting 237 Motion for Order of Class Service Award filed by Ronald David Cronan, Temporary Administrator of the Estate of Lora Cronan−Sisson 237 , and ORDERS that Gale Pelfrey, Bonnie Jones, and the estate of Lora Cronan−Sisson receive $25,000 each, for services as class representatives, to be paid from the settlement fund in this case. This $25,000 award shall be in addition to the amount that Ms. Jones, Ms. Pelfrey, and the estate of Ms. Cronan−Sisson otherwise will obtain based on membership in the settlement class. The Court DIRECTS the Clerk to ADMINISTRATIVELY CLOSE this case. The Court will defer directing the Clerk to enter a judgment in this case until after the conclusion of the claims process and until either Defendant's insurance carrier's option to terminate the settlement expires or the parties inform the Court that the conditions required to trigger the action have not occurred. The Court DIRECTS counsel to notify the Court promptly once either of those events has occurred. Signed by Judge Harold L. Murphy on 7/22/2010. (dob) (Entered: 07/22/2010)
Civil Case Terminated. (dob) (Entered: 07/22/2010)
245 MOTION for Judgment by Bonnie Jones, Gale Pelfrey, Lora Sisson, Shirley Williams. (Attachments: # 1 Exhibit A)(Doherty, Ronan) (Entered: 08/19/2010)
246 ORDER granting 245 Motion for Judgment; directs the clerk to enter final judgment in this case and directs that the terms of the amended Settlement Agreement, which is attached as Exhibit 1, be incorporated into the final judgment in this case. The Court directs the Clerk to dismiss this case with prejudice, subject to the Court's continuing jurisdiction to enforce the Settlement Agreement. Signed by Judge Harold L. Murphy on 8/19/2010. (Attachments: # 1 Exhibit 1) (dob) (Entered: 08/19/2010)
247 CLERK'S JUDGMENT entered incorporating the terms of the amended Settlement Agreement. (dob)−−Please refer to http://www.ca11.uscourts.gov to obtain an appeals jurisdiction checklist−− (Entered: 08/19/2010)
Civil Case Terminated. (dob) (Entered: 08/19/2010)

 
 465 F.3d 1277 (2006)
Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones, Lora Sisson, individually and on behalf of a class, Plaintiffs-Appellees, v.
MOHAWK INDUSTRIES, INC., Defendant-Appellant.
No. 04-13740.
United States Court of Appeals, Eleventh Circuit.
September 27, 2006.
1280 *1280 Steven T. Cottreau, Juan P. Morillo, Virginia A. Seitz, Carter G. Phillips, Brandi Feingold, Sidley, Austin, Brown & Wood LLP, Washington, DC, R. Carl Cannon, Rosemary C. Lumpkins, Constangy, Brooks & Smith, Atlanta, GA, for Defendant-Appellant.
Howard W. Foster, Johnson & Bell, Ltd., Chicago, IL, Bobby Lee Cook, Cook & Connelly, Summerville, GA, John E. Floyd, Joshua F. Thorpe, Nicole G. Iannarone, Ronan P. Doherty, Bondurant, Mixson & Elmore, Atlanta, GA, Matthew D. Thames, Goddard, Thames, Hammontree & Bolding, Dalton, GA, for Plaintiffs-Appellees.
Before ANDERSON, HULL and GIBSON,[*] Circuit Judges.
PER CURIAM:
In this case, plaintiffs-appellees Shirley Williams, Gale Pelfrey, Bonnie Jones, and Lora Sisson are current or former hourly employees of defendant-appellant Mohawk Industries, Inc. ("Mohawk"). The plaintiffs filed this class-action complaint alleging that Mohawk's widespread and knowing employment and harboring of illegal workers allowed Mohawk to reduce labor costs by depressing wages for its legal hourly employees and discouraging worker's-compensation claims, in violation of federal and state RICO statutes. The plaintiffs also alleged that Mohawk was unjustly enriched by the lower wages it paid, as well as the reduced number of 1281 worker's-compensation claims it paid. The district court denied in part and granted in *1281 part Mohawk's 12(b) (6) motion, and this interlocutory appeal followed.
After review and oral argument, this Court affirmed in part and reversed in part. Williams v. Mohawk Indus., Inc., 411 F.3d 1252 (11th Cir.2005). Appellant Mohawk then filed an application for writ of certiorari on two questions:
1. Whether a defendant corporation and its agents can constitute an "enterprise" under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 ("RICO"), in light of the settled rule that a RICO defendant must "conduct" or "participate in" the affairs of some larger enterprise and not just its own affairs.
2. Whether plaintiffs state proximately caused injuries to business or property by alleging that the hourly wages they voluntarily accepted were too low.
The United States Supreme Court granted the appellant's petition for writ of certiorari "limited to Question 1 presented by the petition." Mohawk Indus., Inc. v. Williams, ___ U.S. ___, 126 S.Ct. 830, 163 L.Ed.2d 705 (2005).
After oral argument, however, the Supreme Court entered a summary, three-sentence order that (1) dismissed the writ as improvidently granted as to Question 1, and (2) vacated the judgment of our prior opinion and remanded the case to this Court "for further consideration in light of Anza v. Ideal Steel Supply Corp., ___ U.S. ___, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006)." Mohawk Indus., Inc. v. Williams, ___ U.S. ___, 126 S.Ct. 2016, 164 L.Ed.2d 776 (2006).
This case is now before the Court on remand from the Supreme Court. After the remand, this Court ordered supplemental briefing as to not only Anza, but also the intervening decision by the Georgia Supreme Court in

Williams General Corp. v. Stone, 280 Ga. 631, 632 S.E.2d 376 (2006). After further consideration, this Court now reinstates its prior opinion in part and modifies it in part as follows.
I. BACKGROUND
Mohawk is the second largest carpet and rug manufacturer in the United States and has over 30,000 employees. According to the plaintiffs, Mohawk has conspired with recruiting agencies to hire and harbor illegal workers in an effort to keep labor costs as low as possible.[1] For example, according to the plaintiffs' complaint,
Mohawk employees have traveled to the United States Border, including areas near Brownsville, Texas, to recruit undocumented aliens that recently have entered the United States in violation of federal law. These employees and other persons have transported undocumented aliens from these border towns to North Georgia so that those aliens may procure employment at Mohawk. Mohawk has made various incentive payments to employees and other recruiters for locating workers that Mohawk eventually employs and harbors.
1282 Furthermore, "[v]arious recruiters, including Mohawk employees, have provided *1282 housing to these illegal workers upon their arrival in North Georgia and have helped them find illegal employment with Mohawk." Additionally, Mohawk knowingly or recklessly accepts fraudulent documentation from the illegal aliens.
The plaintiffs further allege that Mohawk has concealed its efforts to hire and harbor illegal aliens by destroying documents and assisting illegal workers in evading detection by law enforcement. According to plaintiffs' complaint, Mohawk takes steps to shield those illegal aliens from detection by, among other things, helping them evade detection during law enforcement searches and inspections at Mohawk's facilities.
According to the complaint, Mohawk's widespread and knowing employment and harboring of illegal workers has permitted Mohawk to reduce labor costs. Mohawk has done so by reducing the number of legal workers it must hire and, thereby, increasing the labor pool of legal workers from which Mohawk hires. This practice permits Mohawk to depress the wages it pays its legal hourly workers.
Finally, the plaintiffs allege that Mohawk is "able to save substantial sums of money" by paying its workers reduced wages. Furthermore, Mohawk knows that illegal workers are less likely to file worker's-compensation claims, and, therefore, Mohawk is able to save additional monies. According to the plaintiffs, these benefits constitute unjust enrichment under state law.
Mohawk filed a Rule 12(b)(6) motion to dismiss the plaintiffs' complaint for failure to state a claim. The district court determined that the plaintiffs had stated a claim under both federal and state RICO statutes, as well as a claim for unjust enrichment under state law for paying legal workers lower wages because of the illegal workers Mohawk employed. However, the district court dismissed the plaintiffs' unjust-enrichment claim insofar as it was based on the reduced number of worker's-compensation claims Mohawk was forced to pay.[2]
II. FEDERAL RICO CLAIMS
Pursuant to 18 U.S.C. § 1962(c), it is illegal "for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity...." 18 U.S.C. § 1962 (c). Thus, in order to establish a federal civil RICO violation under § 1962(c), the plaintiffs "must satisfy four elements of proof: `(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.'" Jones v. Childers, 18 F.3d 899, 910 (11th Cir.1994) (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S.Ct. 3275, 3285, 87 L.Ed.2d 346 (1985)). These requirements apply whether the RICO claim is civil or criminal in nature.
In civil cases, however, RICO plaintiffs must also satisfy the requirements of 18 U.S.C. § 1964(c). Section 1964 (c) states that "[a]ny person injured in his business or property by reason of" RICO's substantive provisions has

1283 the right to "recover threefold the damages he sustains...." 18 U.S.C. § 1964(c). Thus, under *1283 § 1964(c), civil RICO claimants, such as the plaintiffs here, must show (1) the requisite injury to "business or property," and (2) that such injury was "by reason of" the substantive RICO violation. We discuss each of these requirements in turn.
A. Pattern of Racketeering Activity
As mentioned above, there are four requirements under § 1962(c). Because elements (3) and (4) a 0907 pattern of racketeering activity0907are easily met in this case (at least at the motion-to-dismiss stage), we address them first.
"A `pattern of racketeering activity,' for purposes of the RICO Act, `requires at least two acts of racketeering activity.'" Cox v. Adm'r U.S. Steel & Carnegie, 17 F.3d 1386, 1397 (11th Cir. 1994), modified on other grounds by 30 F.3d 1347 (11th Cir.1994). "An act of racketeering is commonly referred to as a `predicate act.' A `pattern' of racketeering activity is shown when a racketeer commits at least two distinct but related predicate acts." Maiz v. Virani, 253 F.3d 641, 671 (11th Cir.2001) (quotation marks, citations, and brackets omitted). "If distinct statutory violations are found, the predicate acts will be considered to be distinct irrespective of the circumstances under which they arose." Cox, 17 F.3d at 1397 (quotation marks, citations, and emphasis omitted).
According to 18 U.S.C. § 1961(1)(F), "`racketeering activity' means any act which is indictable under the Immigration and Nationality Act, section 274 (relating to bringing in and harboring certain aliens), ... if the act indictable under such section of such Act was committed for the purpose of financial gain." In this case, the plaintiffs have alleged that the defendant has engaged in an open and ongoing pattern of violations of section 274 of the Immigration and Nationality Act. In particular, plaintiffs allege that Mohawk has violated and continues to violate: (1) 8 U.S.C. § 1324(a)(3)(A), which makes it a federal crime to "knowingly hire[] for employment at least 10 individuals with actual knowledge that the individuals are aliens" during a twelve-month period; (2) 8 U.S.C. § 1324(a)(1)(A)(iii), which makes it a federal crime to "conceal[], harbor[], or shield from detection, or attempt[] to conceal, harbor or shield from detection" aliens that have illegally entered the United States; and (3) 8 U.S.C. § 1324(a)(1)(A)(iv), which makes it a federal crime to "encourage[] or induce[] an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law." According to the plaintiffs' complaint, Mohawk has committed hundreds, even thousands, of violations of federal immigration laws. Consequently, we conclude that the plaintiffs have properly alleged a "pattern of racketeering activity."[3]
B. Conduct of an Enterprise
With regard to elements (1) and (2) of the four-part test under § 1962(c), the plaintiffs must establish "conduct of an enterprise" and that the enterprise had a common goal. See United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 2528-29, 69 L.Ed.2d 246 (1981) ("The enterprise is an entity, for present purposes a group of 1284 persons associated together for a common purpose of engaging in a course *1284 of conduct."). Furthermore, Mohawk "must participate in the operation or management of the enterprise itself." Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S.Ct. 1163, 1173, 122 L.Ed.2d 525 (1993).
An 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." 18 U.S.C. § 1961(4). As stated in United States v. Goldin Industries, Inc., 219 F.3d 1271, 1275 (11th Cir.2000), "the existence of an enterprise is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit." (internal quotation marks and citation omitted). Furthermore, "the definitive factor in determining the existence of a RICO enterprise is the existence of an association of individual entities, however loose or informal, that furnishes a vehicle for the commission of two or more predicate crimes, that is, the pattern of racketeering activity requisite to the RICO violation." Id.
In this case, the plaintiffs have alleged that Mohawk and third-party temp agencies/recruiters have conspired to violate federal immigration laws, destroy documentation, and harbor illegal workers. Specifically, the plaintiffs allege that

[e]ach recruiter is paid a fee for each worker it supplies to Mohawk, and some of those recruiters work closely with Mohawk to meet its employment need by offering a pool of illegal workers who can be dispatched to a particular Mohawk facility on short notice as the need arises. Some recruiters find workers in the Brownsville, Texas area and transport them to Georgia. Others, like TPS, have relatively formal relationships with the company in which they employ illegal workers and then loan or otherwise provide them to Mohawk for a fee. These recruiters are sometimes assisted by Mohawk employees who carry a supply of social security cards for use when a prospective or existing employee needs to assume a new identity.
Given the Rule 12(b)(6) stage of the litigation, the plaintiffs' complaint must be taken as true, and it has sufficiently alleged an "enterprise" under RICO; that is an association-in-fact between Mohawk and third-party recruiters. This Court has never required anything other than a "loose or informal" association of distinct entities. Mohawk and the third-party recruiters are distinct entities that, at least according to the complaint, are engaged in a conspiracy to bring illegal workers into this country for Mohawk's benefit. As such, the complaint sufficiently alleges an "enterprise" under RICO.
As for the common purpose, the plaintiffs' complaint alleges that "[t]he recruiters and Mohawk share the common purpose of obtaining illegal workers for employment by Mohawk." The complaint further alleges that "[e]ach recruiter is paid a fee for each worker it supplies to Mohawk" and that "Mohawk has made various incentive payments to employees and other recruiters for locating workers that Mohawk eventually employs and harbors." Furthermore, "[t]he acts of racketeering activity committed by Mohawk have the same or similar objective: the reduction of wages paid to Mohawk's hourly workforce." What is clear from the complaint is that each member of the enterprise is allegedly reaping a large economic benefit from Mohawk's employment of illegal workers.
In United States v. Church, 955 F.2d 688, 698 (11th Cir.1992), this Court concluded that the common purpose of making money was sufficient under RICO. Because the complaint clearly alleges that the members of the 1285 enterprise stand to gain sufficient financial benefits from Mohawk's *1285 widespread employment and harboring of illegal workers, the plaintiffs have properly alleged a "common purpose" for the purposes of RICO.
Furthermore, Mohawk "must participate in the operation or management of the enterprise itself." Reves, 507 U.S. at 185, 113 S.Ct. at 1173. That is, Mohawk "must have some part in directing" the affairs of the enterprise. Id. at 179, 113 S.Ct. at 1170. However, the Supreme Court has cautioned that "RICO liability is not limited to those with primary responsibility for the enterprise's affairs...." Id. In their complaint, the plaintiffs allege that "Mohawk participates in the operation and management of the affairs of the enterprise ...," which includes some direction over the recruiters. 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 enterprise. Again, at this stage in the litigation, we simply cannot say whether the plaintiffs will be able to establish that Mohawk had "some part in directing" the affairs of the enterprise. However, they have alleged sufficient acts to survive a Rule 12(b)(6) motion.
Accordingly, we conclude that the plaintiffs' complaint states a claim that is cognizable under § 1962(c). In so doing, we note that the allegations in this case are similar to those in cases recently decided by the Second, Sixth, and Ninth Circuits. See Trollinger v. Tyson Foods, 370 F.3d 602 (6th Cir.2004) (former employees alleging employer used illegal immigrants in order to depress wages); Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir.2002) (legally documented workers alleging that employers leveraged hiring of undocumented workers in order to depress wages); Commercial Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374 (2d Cir.2001) (company alleging competitor hired undocumented workers in order to underbid competing firms). In each of these decisions, the circuit court determined that, at the Rule 12(b)(6) stage, the plaintiffs had alleged sufficient damages to be permitted to pursue their RICO claims. Although none of the opinions specifically addressed § 1962(c)'s requirements, each of these cases has essentially the same factual basis for RICO liability as the complaint before this Court.
We recognize that the above conclusion puts our circuit in conflict with the Seventh Circuit's decision in Baker v. IBP, Inc., 357 F.3d 685 (7th Cir.2004), cert. denied, 543 U.S. 956, 125 S.Ct. 412, 160 L.Ed.2d 318 (2004). In Baker, an employees' class-action lawsuit alleged that a meat-processing facility conspired with recruiters (and a

Chinese aid group), and violated RICO by employing undocumented, illegal workers in an effort to drive down employee wages. The Seventh Circuit concluded that the employees' union was a necessary party to the lawsuit. Id. at 690-91.
However, the Seventh Circuit in Baker also concluded that there was "another fatal problem" with the complaint. Id. at 691. Although stating that an "enterprise" arguably existed, the Seventh Circuit determined that there was not a common purpose among the entities in the enterprise. Id. at 691. Specifically, the Seventh Circuit stated that the employer "wants to pay lower wages; the recruiters want to be paid more for services rendered (though [the employer] would like to pay them less); the Chinese Mutual Aid Association wants to assist members of its ethnic group. These are divergent goals." Id. at 691.
In our circuit, however, there has never been any requirement that the "common purpose" of the enterprise be the 1286 sole purpose of each and every member of the *1286 enterprise. In fact, it may often be the case that different
members of a RICO enterprise will enjoy different benefits from the commission of predicate acts. This fact, however, is insufficient to defeat a civil RICO claim. Rather, all that is required is that the enterprise have a common purpose. In this case, the complaint alleges that Mohawk and the recruiters, under Mohawk's direction, worked together to recruit illegal workers to come to Georgia and that they had the common purpose of providing illegal workers to Mohawk so that Mohawk could reduce its labor costs and the recruiters could get paid. This commonality is all that this circuit's case law requires. See Church, 955 F.2d at 698. Again, while the plaintiffs may be unable to prove such allegations at trial, we cannot say at this 12(b)(6) stage of the litigation that they have failed to properly allege a common purpose.
We recognize that the Baker Court also concluded that there was no way to establish that the employer "operate [d] or manage[d] th[e] enterprise through a pattern of racketeering activity." Baker, 357 F.3d at 691 (emphasis omitted). However, as this Court has noted, "the Supreme Court has yet to delineate the exact boundaries of the operation or management test." United States v. Starrett, 55 F.3d 1525, 1546 (11th Cir.1995). Although the exact boundaries have not been established, it is possible that the plaintiffs will be able to establish that Mohawk played some part in directing the affairs of the enterprise. Whether the plaintiffs ultimately establish sufficient evidence to meet the boundaries of the operation-or-management test is a question best answered at the summary-judgment stage or at trial. Accordingly, we conclude that the plaintiffs have sufficiently alleged conduct that may potentially satisfy the operation-or-management test. As such, the plaintiffs are entitled to continue with their claims at this juncture.
Having reviewed the four elements of § 1962(c), we turn to § 1964(c).
C. Injury to "Business or Property" Interest Under RICO
As indicated above, RICO's civil-suit provision states that "[a]ny person injured in his business or property by reason of" RICO's substantive provisions has the right to "recover threefold the damages he sustains...." 18 U.S.C. § 1964(c). "The terms `business or property' are, of course, words of limitation which preclude [certain forms of] recovery." Doe v. Roe, 958 F.2d 763, 767 (7th Cir.1992). However, RICO is to be "liberally construed," Sedima, 473 U.S. at 497-98, 105 S.Ct. at 3285-86. Accordingly, we must determine whether the plaintiffs have a "business or property" interest that could be injured under RICO. 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.
Indeed, this case is similar to the Ninth Circuit's Mendoza decision, where legally documented agricultural workers sued fruit growers under RICO alleging that the growers depressed wages by hiring illegal workers. In Mendoza, the defendant claimed that the employees would have to show a "`property right' in the lost wages[] by showing that they were promised or contracted for higher wages." Mendoza, 301 F.3d at 1168 n. 4. The Ninth Circuit concluded that this argument was misplaced, pointing out that the plaintiffs' claim did not implicate procedural due process. Id. Rather, the Ninth Circuit concluded that "what is required is precisely what the employees allege here: a legal entitlement to business relations unhampered by schemes prohibited by the RICO 1287 predicate statutes." Id. (citations omitted). Given that a relationship clearly *1287 exists between plaintiff workers and their employer, Mohawk, we conclude that a similar business interest exists in this case, and that the

employees' alleged injury to their business interests satisfies the business-interest requirement. Consequently, the plaintiffs have alleged a sufficient injury to a business interest to pursue their RICO claims.
D. "By Reason Of" the Substantive RICO Violations
We now turn to the "by reason of" requirement contained in § 1964(c). The "by reason of" requirement implicates two concepts: (1) a sufficiently direct injury so that a plaintiff has standing to sue; and (2) proximate cause. See Trollinger, 370 F.3d at 612 ("RICO's civil-suit provision imposes two distinct but overlapping limitations on claimants0907standing and proximate cause."); Green Leaf Nursery v. E.I. DuPont De Nemours & Co., 341 F.3d 1292, 1307 (11th Cir.2003), cert. denied, 541 U.S. 1037, 124 S.Ct. 2094, 158 L.Ed.2d 723 (2004) ("[O]ne or more of the predicate acts [in a RICO claim] must not only be the `but for' cause of the injury, but the proximate cause as well." (citations omitted)); Mendoza, 301 F.3d at 1168-72 (concluding that the plaintiffs had satisfied both "statutory" and "constitutional" standing requirements of RICO). Despite some significant overlap, we address the proximate cause and standing concepts separately.[4]
(i) Proximate Cause
It is well-established that RICO plaintiffs must prove proximate causation in order to recover. Anza v. Ideal Steel Supply Corp., ___ U.S. ___, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006); Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992); Cox, 17 F.3d at 1399 (citations omitted). Anza makes clear that courts should scrutinize proximate causation at the pleading stage and carefully evaluate whether the injury pled was proximately caused by the claimed RICO violations. See Anza, 126 S.Ct. at 1997.
More importantly, in Anza, the United States Supreme Court instructed that "[w]hen a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff's injuries." Anza, 126 S.Ct. at 1998. This central question stems from the Supreme Court's earlier decision in Holmes, which examined "the common-law foundations of the proximate-cause requirement" and specifically the "demand for some direct relation between the injury asserted and the injurious conduct alleged." 1288 Anza, 126 S.Ct. at 1996 (quoting Holmes, 503 U.S. at 269, 112 S.Ct. at 1318). Although Anza *1288 does not require plaintiffs to show that the injurious conduct is the sole cause of the injury asserted, Anza does emphasize that in RICO cases there must be "some direct relation" between the injury alleged and the injurious conduct in order to show proximate cause. Id.[5]
In evaluating whether the requisite causal connection exists, Anza also instructs that courts should consider the "motivating principle[s]" behind the directness component of the proximate-cause standard in RICO cases. "One motivating principle is the difficulty that can arise when a court attempts to ascertain the damages caused by some remote action." Anza, 126 S.Ct. at 1997. Stated another way, "the less direct an injury is, the more difficult it becomes to ascertain the amount of plaintiff's damages attributable to the violation, as distinct from other, independent factors." Holmes, 503 U.S. at 269, 112 S.Ct. at 1318. This remoteness concern is heightened when RICO suits are brought by economic competitors seeking damages for lost sales because those types of claims, "if left unchecked, could blur the line between RICO and the antitrust laws." Anza, 126 S.Ct. at 1998.
Another consideration is the risk of duplicative recoveries. "The requirement of a direct causal connection is especially warranted where the immediate victims of an alleged RICO violation can be expected to vindicate the laws by pursuing their own claims." Anza, 126 S.Ct. at 1998. As also aptly expressed in Holmes, "directly injured victims can generally be counted on to vindicate the law as private attorneys general, without any of the problems attendant upon suits by plaintiffs injured more remotely." Holmes, 503 U.S. at 269-70, 112 S.Ct. at 1318.
Turning back to this case, we conclude that the plaintiffs have alleged sufficient proximate cause to withstand defendant Mohawk's motion to dismiss. According to their complaint, Mohawk has hired illegal workers "[i]n an effort to keep labor costs as low as possible." Furthermore, "Mohawk's employment and harboring of large numbers of illegal workers has enabled Mohawk to depress wages and thereby pay all of its hourly employees, including legally employed workers who are members of the class, wages that are lower than they would be if

Mohawk did not engage in this illegal conduct." Again, the complaint alleges that "Mohawk's widespread employment and harboring of illegal workers has substantially and unlawfully increased the supply of workers from which Mohawk makes up its hourly workforce. This unlawful expansion of the labor pool has permitted Mohawk to depress the wages that it pays all its hourly employees...." The plaintiffs also allege that "[o]ne purpose and intended effect of Mohawk's widespread employment and harboring of illegal workers is to deprive Mohawk's hourly workforce of any individual or collective bargaining power" and that they "were injured by direct and proximate reason of Mohawk's illegal conduct."
Given these allegations, which we must assume are true at this Rule 12(b)(6) stage of the litigation, it is clear that 1289 the plaintiffs have alleged a sufficiently direct relation *1289 between their claimed injury and the alleged RICO
violations. In short, according to the complaint, Mohawk's widespread scheme of knowingly hiring and harboring illegal workers has the purpose and direct result of depressing the wages paid to the plaintiffs. Simply put, wholesale illegal hiring depresses wages for the legal workers in north Georgia where Mohawk is located. According to plaintiffs, Mohawk's illegal conduct had a substantial and direct effect on wages that Mohawk pays to legal workers. See DeCanas v. Bica, 424 U.S. 351, 356-57, 96 S.Ct. 933, 937, 47 L.Ed.2d 43 (1976) (explaining that "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").[6] While DeCanas is not a RICO case, plaintiffs point out that the Supreme Court has already recognized a direct correlation between illegal hiring and lower wages.
In response, Mohawk asserts that other economic factors contribute to the plaintiffs' wages, that illegal hiring is just one of myriad factors affecting wages, and that therefore plaintiffs have not satisfied Anza's proximate-cause requirements. However, plaintiffs persuasively reply that Mohawk's argument ignores that Mohawk's conduct has grossly distorted those normal market forces by employing literally thousands of illegal, undocumented aliens at its manufacturing facilities in north Georgia, thus depriving plaintiffs of "business relations unhampered by schemes prohibited by the RICO predicate statutes." Plaintiffs submit that their complaint focuses on only what is happening in the particular narrow labor market that Mohawk dominates in north Georgia. We agree with plaintiffs that their complaint alleges a sufficiently direct injury to satisfy Anza and Holmes, especially given the recognition of a direct correlation between illegal hiring and lower wages.
More importantly, as plaintiffs point out, in both Holmes and Anza, the Supreme Court emphasized that dismissal was appropriate because a more direct victim could bring suit. For example, the Anza plaintiff alleged that National Steel Supply, a competitor, had stopped paying sales taxes to the New York tax authority, submitted fraudulent documents to the tax authority, and used its tax savings to lower prices. The plaintiff sued for treble damages for sales lost to National. The Supreme Court concluded that New York, which lost the tax revenue due to National's fraudulent conduct, was the direct victim who could bring suit and not the plaintiff. Anza, 126 S.Ct. at 1997. Indeed, the state of New York could "be expected to pursue appropriate remedies." Id. at 1998. National's decision to lower prices to its customers and win sales from the plaintiff was "entirely distinct from the alleged RICO violation" of mail and wire fraud as to taxes owed to the New York tax authority. Id. at 1997.
Likewise, in Holmes, the plaintiff's injury was merely derivative of a prior injury to third parties (broker dealers) who had filed their own suit. Holmes, 503 U.S. at 271, 273, 112 S.Ct. at 1319-20; see also Associated Gen. Contractors v. Cal. State Council of Carpenters, 459 U.S. 519, 541, 103 S.Ct. 897, 910, 74 L.Ed.2d 723 (1983) (identifying alternative plaintiffs with more direct claims).
1290 *1290 The concerns expressed in Anza and Holmes are not present in this case. There is no more direct injured party who could bring suit. Mohawk posits the United States as the only other victim because of its interest in enforcing immigration laws. But as plaintiffs aptly point out, the United States is responsible for all federal criminal laws which includes RICO's other predicate acts. Under Mohawk's theory, the United States would arguably be the most direct victim of all RICO predicate, criminal acts. Congress, however, criminalized the employment of illegal workers in part to protect legal workers. It is consistent with civil RICO's purposes to 0907 expand enforcement beyond federal prosecutors with limited public resources to 0907 turn victims (here, Mohawk's legal workers) into prosecutors as private attorneys general seeking to eliminate illegal hiring activity by their own employer. See Rotella v. Wood, 528 U.S. 549, 557, 120 S.Ct. 1075, 1082, 145 L.Ed.2d 1047 (2000) (acknowledging that the very "object of civil RICO is ... to turn [victims] into prosecutors, private attorneys general dedicated to eliminating

racketeering activity" (quotation marks and citation omitted)); see also Reiter v. Sonotone Corp., 442 U.S. 330, 344, 99 S.Ct. 2326, 2333, 60 L.Ed.2d 931 (1979) (noting that private antitrust suits "provide a significant supplement to the limited resources available at the Department of Justice").
Anza's concern about speculative damages, "intricate, uncertain injuries," and unwieldy apportionment are not implicated in this case because plaintiffs allege an injury fundamentally different from that in Anza. The plaintiff in Anza was a competitor suing for damages for lost opportunity or lost sales. In contrast, plaintiffs are Mohawk's own employees who seek to recover the diminution in wages they receive directly from Mohawk. Further, Anza's concern about blurring the line between RICO and antitrust laws is wholly missing here.
We also recognize that Mohawk asserts that the cause of plaintiffs' alleged harms is a set of actions (paying lower wages) "entirely distinct" from the alleged RICO violation (hiring illegal workers). We disagree. As noted earlier, it has long been recognized that hiring illegal workers on substandard wage terms depresses the wage scales of legal workers. Moreover, plaintiffs are not suing about the hiring of illegal workers on the west coast depressing the wages of legal workers on the east coast. Rather, plaintiffs' complaint is a narrow one about a single employer's0907 Mohawk's0907hiring of thousands of illegal workers at its manufacturing facilities in north Georgia depressing the wages of legal workers of the same employer, Mohawk, at the same manufacturing facilities in the same limited geographical area. Accordingly, under the particular factual circumstances of this case, we conclude that plaintiffs' complaint satisfies the direct relationship requirement imposed by Holmes and Anza's interpretation of the "by reason of" language in the federal RICO statute.
Our conclusion is consistent with the two other circuits to have addressed this proximate cause issue in RICO decisions involving schemes to depress wages of legal workers by widespread hiring of illegal workers. See Trollinger, 370 F.3d at 619; Mendoza, 301 F.3d at 1171-72.
In Trollinger, the Sixth Circuit considered a situation in which former Tyson employees at a poultry processing plant sued their former employer under RICO, alleging that the use of illegal workers permitted the employer to lower wages via the collective-bargaining agreement with the union representing the employees. The Sixth 1291 Circuit, reviewing the district court's dismissal of the employees' complaint under Rule 12(b)(6), determined that *1291 "at this preliminary stage in the proceeding" it could not conclude that there was no likelihood of success on the merits. Id. at 619. The Sixth Circuit explained that it remained possible that the legal-worker plaintiffs might prove the following allegations in their complaint:
(1) that Tyson hired sufficient numbers of illegal aliens to impact the legal employees' wages; (2) that each additional illegal worker hired into the bargaining unit by Tyson has a measurable impact on the bargained-for wage-scale; (3) that the illegal immigrants allegedly brought into this country through Tyson's efforts allowed Tyson not to compete with other businesses for unskilled labor; and (4) that Tyson's legal workers did not "choose" to remain at Tyson for less money than other businesses offered, but had no choice in the matter given the hiring needs of the other businesses in the area and the influx of illegal immigrants at Tyson's facilities. While Tyson's proximate-cause argument may well carry the day at the summary-judgment stage, it requires more assistance than the complaint alone provides.
One other circuit has reached the same result on somewhat similar facts... Mendoza....
Trollinger, 370 F.3d at 619.[7]
Although the plaintiffs' evidence in this case may not ultimately prove the proximate-cause requirement, we conclude that the plaintiffs' complaint states a sufficiently direct relation between their alleged injury and Mohawk's alleged unlawful predicate acts to withstand Mohawk's motion to dismiss. Consequently, we join the Sixth and Ninth Circuits in concluding that employees such as the ones in this case have alleged sufficient proximate cause to proceed with their RICO claims.

(ii) Statutory Standing
Lastly, we address RICO's statutory standing limitation that also grows out of the "by reason of" limitation in § 1964(c). "[T]he test for RICO standing is whether the alleged injury was directly caused by the RICO violation, not whether such harm was reasonably foreseeable." Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., Inc., 140 F.3d 898, 908 (11th Cir.1998); see also Sedima, 473 U.S. at 496-97, 105 S.Ct. at 3285 ("[T]he plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation" and the plaintiff's damages must "flow from the commission of the predicate acts."); Green Leaf Nursery, 341 F.3d at 1307 (stating that plaintiffs must show a "direct relation between the injury asserted and the injurious conduct" and that we ask "whether the alleged conduct was `aimed primarily' at a third party" (quotation marks and citations omitted)); Bivens, 140 F.3d at 906 (concluding that a party whose alleged injuries result from "the misfortunes visited upon a third person by the defendant's acts lacks standing to pursue a claim under RICO" (quotation marks and citation omitted)); Pelletier v. Zweifel, 921 F.2d 1465, 1497 (11th Cir.1991) (stating that the plaintiff has RICO standing if he shows "a causal connection between his injury 1292 and a predicate act").[8] Thus, we must evaluate *1292 whether the plaintiffs' injury is sufficiently direct to give plaintiffs standing to sue for Mohawk's alleged RICO violations.
Both the Sixth and Ninth Circuits have expressly concluded that legal workers have sufficiently direct injuries for RICO standing in similar cases. Trollinger, 370 F.3d at 615-18; Mendoza, 301 F.3d at 1170. The Ninth Circuit's Mendoza decision is particularly well-reasoned and instructive on the statutory standing issue.
As mentioned earlier, the Mendoza plaintiffs were legal workers who claimed that the purpose and result of the defendants' scheme of hiring undocumented immigrants was to depress the wages of legally documented employees. The Ninth Circuit concluded that the plaintiffs had statutory standing because "we are unable to discern a more direct victim of the illegal conduct." Mendoza, 301 F.3d at 1170. The Ninth Circuit explained:
The documented employees here do not complain of a passed-on harm. They allege that the scheme had the purpose and direct result of depressing the wages paid to them by the growers. Thus, as the district court correctly determined, "plaintiffs have stated a claim that they are the direct victims of the illegal hiring scheme."
. . .
We also note that the undocumented workers cannot "be counted on to bring suit for the law's vindication." As the district court noted, the fact that RICO specifically provides that illegal hiring is a predicate offense indicates that Congress contemplated the enforcement of the immigration laws through lawsuits like this one.
Id. (internal citations omitted). The Ninth Circuit further stated that
the workers must be allowed to make their case through presentation of evidence, including experts who will testify about the labor market, the geographic market, and the effects of the illegal scheme. Questions regarding the relevant labor market and the growers' power within that market are exceedingly complex and best addressed by economic experts and other evidence at a later stage in the proceedings.
Id. at 1171.
Plaintiffs' complaint clearly alleges that Mohawk has engaged in widespread and knowing hiring and harboring of illegal aliens with the express purpose and direct result of lowering the wages of legal workers. For example, the complaint alleges that "[o]ne purpose and intended effect of Mohawk's widespread employment and harboring of illegal workers is to deprive Mohawk's hourly workforce of any individual or collective bargaining power." The plaintiffs also allege that "[t]he acts of racketeering activity committed by Mohawk have the same or similar objective: the reduction of wages paid to Mohawk's hourly workforce." Furthermore, the plaintiffs "were injured by direct and proximate reason of Mohawk's illegal conduct." Given this stage of the litigation, we conclude that the

plaintiffs have sufficiently alleged that Mohawk's illegal conduct was aimed primarily at them. Consequently, the district court correctly denied Mohawk's 12(b)(6) motion as it relates to the plaintiffs' federal civil RICO claim.
III. STATE LAW RICO
1293 Under the Georgia RICO statute, "[i]t is unlawful for any person, through a *1293 pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money." O.C.G.A. 16-14-4(a). Unlike federal civil RICO, the Georgia RICO statute does not require proof of an "enterprise." Cobb County v. Jones Group, P.L.C., 218 Ga.App. 149, 460 S.E.2d 516, 520-21 (1995). Rather, under Georgia RICO, the plaintiffs need only establish racketeering activity; that is, "a plaintiff must show that the defendant committed predicate offenses (set forth in O.C.G.A. § 16-14-3(9)) at least twice." Id. at 521 (quotation marks and citation omitted).
With regard to their state-law RICO claim, the plaintiffs rely on 18 U.S.C. § 1546 (relating to the fraud and misuse of visas, permits, and other documents) for their predicate offenses.[9] Despite being limited to § 1546, the plaintiffs have alleged sufficiently numerous violations to satisfy the racketeering activity requirement under Georgia state law. In fact, according to the complaint, "Mohawk has committed hundreds, probably thousands, of violations of ... 18 U.S.C. § 1546 as part of its pattern of racketeering activity."
There are, however, two issues under the Georgia RICO statute that warrant further discussion: (1) whether a corporation is a "person" who may be sued for purposes of the Georgia RICO statute; and (2) whether the plaintiffs have sufficiently alleged proximate cause to have standing to bring a Georgia RICO suit.
A. Whether Corporations May be Sued Under Georgia RICO
The Georgia Supreme Court recently answered the precise question of whether a corporation may be sued under the Georgia RICO statute. See Williams Gen. Corp. v. Stone, 280 Ga. 631, 632 S.E.2d 376 (2006). The Georgia Supreme Court noted that the prohibitions in the Georgia RICO Act apply to "any person" under O.C.G.A. § 16-14-4. Williams, 280 Ga. at 631, 632 S.E.2d at 377. The term "person," however, is not defined in the definition section of the Georgia RICO Act. See O.C.G.A. § 16-14-3 (definition section). The Georgia Supreme Court pointed out that, nonetheless, the Georgia legislature had "set forth the desired application of the term [person] in the definition section promulgated for use in the title [Title 16] which includes the Georgia RICO Act." Williams, 280 Ga. at 631, 632 S.E.2d at 377. The Georgia Supreme Court explained that the definition section for use in Title 16 of the Georgia Code is O.C.G.A. § 16-1-3(12). Id. The Georgia Supreme Court then quoted § 16-1-3(12), which provides that "person" includes an individual, a public or private corporation, an incorporated association, government, government agency, partnership, or unincorporated association. Id. at 632, 632 S.E.2d at 377. Additionally, the Georgia Supreme Court observed that "the definition section of the entire Georgia Code notes that `person' includes a corporation," citing O.C.G.A. § 1-3-3(14). Id. at 632, 632 S.E.2d at 378 (quotation marks 1294 omitted). Accordingly, the Georgia Supreme Court concluded that a corporation is subject *1294 to and may be sued under Georgia's RICO Act. Id. at 631, 632 S.E.2d at 377.
The Georgia Supreme Court in Williams also expressly rejected the argument, which Mohawk makes here, that O.C.G.A. § 16-2-22, which places limits on corporate criminal liability, should apply to civil suits which stem from criminal law violations. Id. at 632-33, 632 S.E.2d at 378. Instead, the Georgia Supreme Court expressly held that "O.C.G.A. § 16-2-22 does not pertain to civil suits brought under the Georgia civil RICO Act." Id. In light of Williams, we conclude that Mohawk, a corporation, may be sued under the Georgia RICO statute.[10] We now turn to the next question of standing.
B. Standing to Pursue State-Law RICO Claims
As with Federal RICO claims, under Georgia's RICO statute, "[a]ny person who is injured by reason of any violation of" Georgia's RICO statute "shall have a cause of action for three times the actual damages sustained...." O.C.G.A. § 16-14-6(c) (emphasis added). "[B]ecause the state RICO act is modeled upon and

closely analogous to the federal RICO statute," Georgia courts "look to federal authority" in determining RICO standing. Maddox v. So. Eng'g Co., 231 Ga.App. 802, 500 S.E.2d 591, 594 (1998) (quotation marks and citation omitted). We already have concluded that the plaintiffs have alleged sufficient injury to pursue their federal RICO claims, and accordingly, we conclude that they have alleged a sufficient injury to pursue their state RICO claims as well. Although under Georgia law the plaintiffs are limited to predicate acts arising out of 18 U.S.C. § 1546, we conclude that the plaintiffs' allegations are neither indirect nor too remote to satisfy Georgia's proximate-cause requirement under state-law RICO. See Maddox, 500 S.E.2d at 594 ("In short, the language `by reason of' imposes a proximate causation requirement on the plaintiff." (citation omitted)); id. (A plaintiff "must show a causal connection between his injury and a predicate act." (citation omitted)).[11]
IV. UNJUST ENRICHMENT
The plaintiffs' complaint claims that Mohawk's illegal conduct permits it "to reap substantial wage savings" because Mohawk pays plaintiffs lower wages than it would otherwise be forced to pay. Therefore, according to the plaintiffs' complaint, Mohawk has been unjustly enriched under state law. Plaintiffs also claim that Mohawk has been unjustly enriched because the hiring of illegal aliens has led to a reduced number of worker'scompensation claims. Both of plaintiffs' state-law unjust-enrichment claims fail.
Here, the plaintiffs were all paid an agreed-upon wage. In essence, the plaintiffs have a contract to work for the defendant and were paid the agreed-upon wage. In Georgia, "[u]njust enrichment is an equitable concept and applies when as a matter of fact there is no legal contract...." St. Paul Mercury Ins. Co. v. Meeks, 270 Ga. 136, 508 S.E.2d 646, 648 (1998) (quotation marks and citation omitted); see Bonem v. Golf Club of Ga., Inc., 264 1295 Ga.App. 573, 591 S.E.2d 462, 467-68 *1295 (2003). In this case, there was a legal contract as a matter of fact (i.e., if the plaintiffs were not paid, they could sue for breach of the employment contract). See, e.g., SurgiJet, Inc. v. Hicks, 236 Ga.App. 80, 511 S.E.2d 194, 195 (1999); Brazzeal v. Commercial Cas. Ins. Co., 51 Ga.App. 471, 180 S.E. 853, 853 (1935). Therefore, there can be no unjust enrichment. Consequently, the plaintiffs' unjustenrichment claim as it related to Mohawk's purported savings from lower wages should have been dismissed.
As for plaintiffs' claims that hiring illegal workers resulted in fewer worker's-compensation claims, there is no reasonable allegation that this fact, even if true, is connected to the plaintiffs receiving lower wages. To put it another way, the fact that Mohawk may have increased profits by lowering the number of worker's-compensation claims it paid is not related to what wages Mohawk paid the plaintiffs. Consequently, the district court correctly determined that the plaintiffs did not have standing to assert this claim.
V. CONCLUSION
For all the above reasons, we conclude that the district court properly denied Mohawk's Rule 12(b)(6) motion as it related to both the plaintiffs' federal and state RICO claims. Furthermore, the district court properly dismissed the plaintiffs' unjust-enrichment claim as it related to worker's compensation. However, the district court should have also dismissed the plaintiffs' unjust-enrichment claim as it related to the agreed-upon wages that plaintiffs received.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED FOR FURTHER PROCEEDINGS.
[*] Honorable John R. Gibson, United States Circuit Judge for the Eighth Circuit, sitting by designation.
[1] At this point in the litigation, we must assume the facts set forth in the plaintiffs' complaint are true. See Anza, 126 S.Ct. at 1994 (stating that on a motion to dismiss, the court must "accept as true the factual allegations in the amended complaint"); Marsh v. Butler County, 268 F.3d 1014, 1023 (11th Cir.2001) (en banc) (setting forth the facts in the case by "[a]ccepting all well-pleaded factual allegations (with reasonable inferences drawn favorably to Plaintiffs) in the complaint as true"). Because we must accept the allegations of plaintiffs' complaint as true, what we set out in this opinion as "the facts" for Rule 12(b)(6) purposes may not be the actual facts.

[2] This Court reviews the denial of a Rule 12(b)(6) motion "de novo, applying the same standard as the district court did." Hoffman-Pugh v. Ramsey, 312 F.3d 1222, 1225 (11th Cir.2002). A complaint should not be dismissed pursuant to Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim." Beck v. Deloitte & Touche, 144 F.3d 732, 735 (11th Cir. 1998) (internal quotation marks and citation omitted).
[3] There is no dispute that these predicate acts, if they occurred, are related. See Pelletier v. Zweifel, 921 F.2d 1465, 1496-97 (11th Cir. 1991) ("Predicate acts are related if they have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." (internal quotation marks and citation omitted)).
[4] As the Sixth Circuit aptly explained,
the two concepts overlap and that is particularly true in the context of civil RICO claims. As a general matter, they overlap because a plaintiff who lacks standing to vindicate a derivative injury also will be unable to show proximate cause. And as a matter of RICO law, the two concepts overlap because they both grow out of the "by reason of" limitation in RICO0907namely, the requirement that claimants establish that their injury was "by reason of" a RICO predicate act violation. The "by reason of" limitation, in other words, bundles together a variety of "judicial tools," some of which are traditionally employed to decide causation questions and some of which are employed to decide standing questions. Holmes, 503 U.S. at 268, 112 S.Ct. [at 1318] ("Here we use `proximate cause' to label generically the judicial tools used to limit a person's responsibility for the consequences of that person's own acts. At bottom, the notion of proximate cause reflects ideas of what justice demands, or of what is administratively possible and convenient.") (quotation omitted)....
Trollinger, 370 F.3d at 613.
[5] Anza also explains that "Congress modeled § 1964(c) [in the RICO statute] on the civil-action provision of the federal antitrust laws, § 4 of the Clayton Act." 126 S.Ct. at 1996 (quotation marks and citation omitted). In both federal RICO and federal antitrust cases, "proximate cause is not ... the same thing as a sole cause," and it is enough for the plaintiff to plead and prove that the defendant's tortious or injurious conduct was a "substantial factor in the sequence of responsible causation." Cox v. Adm'r U.S. Steel & Carnegie, 17 F.3d 1386, 1399 (11th Cir.1994) (RICO), modified on other grounds by 30 F.3d 1347 (11th Cir.1994).
[6] The Supreme Court quoted this same point in Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 892-93, 104 S.Ct. 2803, 2809, 81 L.Ed.2d 732 (1984) (quoting same, and adding that a "primary purpose in restricting immigration is to preserve jobs for American workers; immigrant aliens are therefore admitted to work in this country only if they `will not adversely affect the wages and working conditions of the workers in the United States similarly employed.'" (citation omitted)).
[7] As noted earlier, in Mendoza, the Ninth Circuit was faced with a similar suit in which legally documented agricultural workers sued fruit growers under RICO alleging that the growers depressed wages by hiring illegalimmigrant workers. 301 F.3d at 1166. Under almost the exact same legal theory as advanced in this case, the Mendoza Court concluded that the plaintiffs' "causation allegations are sufficient at this stage." Id. at 1172.
[8] This Court has more often evaluated the "by reason of" requirement primarily as part of its proximate-cause analysis, as opposed to the distinct concept of standing. However, despite significant overlap, we must also examine whether the plaintiffs' injury is sufficiently direct to permit standing.
[9] According to O.C.G.A. § 16-14-3(9)(A)(xxix), "racketeering activity" is defined as "conduct defined as `racketeering activity' under 18 U.S.C. Section 1961(1)(A), (B), (C), and (D)." The only "racketeering activity" contained in 18 U.S.C. § 1961(1)(A), (B), (C), or (D) on which the plaintiffs rely is § 1546. To the extent the plaintiffs attempt to rely on § 1324, as they do with their federal civil RICO claims, such a claim is barred under the Georgia RICO statute because § 1324 is listed as a "racketeering offense" in 18 U.S.C. § 1961(1)(F), and not in subsections (A), (B), (C), or (D).

[10] In interpreting a state law, federal courts apply the decisions of that state's highest court. See CSX Transp., Inc. v. Trism Specialized Carriers, Inc., 182 F.3d 788, 789 (11th Cir. 1999).
[11] Plaintiffs also seek injunctive relief under the Georgia RICO Act which allows any "aggrieved person" to sue for injunctive relief, without requiring an injury "by reason of" the illegal conduct. Compare O.C.G.A. § 16-14-6(b) with O.C.G.A. § 16-14-6(c). Thus, we need not discuss Anza and Mohawk's proximate-cause arguments as to plaintiffs' claims for injunctive relief under the Georgia RICO Act.
Save trees - read court opinions online on Google Scholar.

 
 411 F.3d 1252 (2005)
Shirley WILLIAMS, Gale Pelfrey, Bonnie Jones, Lora Sisson, individually and on behalf of a class, Plaintiffs-Appellees, v.
MOHAWK INDUSTRIES, INC., Defendant-Appellant.
No. 04-13740.
United States Court of Appeals, Eleventh Circuit.
June 9, 2005.
12534 *1253 *1254 Steven T. Cottreau, Juan P. Morillo, Virginia A. Seitz, Carter G. Phillips, Brandi Feingold, Sidley, Austin, Brown & Wood, LLP, Washington, DC, R. Carl Cannon, Rosemary C. Lumpkins, Constangy, Brooks & Smith, Atlanta, GA, for Defendant-Appellant.
Howard W. Foster, Johnson & Bell, Ltd., Chicago, IL, Bobby Lee Cook, Cook & Connelly, Summerville, GA, John 1255 E. Floyd, Joshua F. Thorpe, Nicole G. Iannarone, Ronan P. Doherty, Bondurant, *1255 Mixson & Elmore, Atlanta,
GA, Matthew D. Thames, Goddard, Thames, Hammontree & Bolding, Dalton, GA, for Plaintiffs-Appellees.
Before ANDERSON, HULL and GIBSON[*], Circuit Judges.
PER CURIAM:
In this case, Plaintiffs Shirley Williams, Gale Pelfrey, Bonnie Jones, and Lora Sisson are current or former hourly employees of Defendant Mohawk Industries, Inc. The plaintiffs filed this class-action complaint alleging that Mohawk's widespread and knowing employment and harboring of illegal workers allowed Mohawk to reduce labor costs by depressing wages for its legal hourly employees and discourage worker's-compensation claims, in violation of federal and state RICO statutes. The plaintiffs also alleged that Mohawk was unjustly enriched by the lower wages it paid, as well as the reduced number of worker's-compensation claims it paid. The district court denied in part and granted in part Mohawk's 12(b)(6) motion, and this interlocutory appeal followed. After review and oral argument, we affirm in part and reverse in part.
I. BACKGROUND
Mohawk is the second largest carpet and rug manufacturer in the United States and has over 30,000 employees. According to the plaintiffs, Mohawk has conspired with recruiting agencies to hire and harbor illegal workers in an effort to keep labor costs as low as possible.[1] For example, according to the plaintiffs' complaint
Mohawk employees have traveled to the United States Border, including areas near Brownsville, Texas, to recruit undocumented aliens that recently have entered the United States in violation of federal law. These employees and other persons have transported undocumented aliens from these border towns to North Georgia so that those aliens may procure employment at Mohawk. Mohawk has made various incentive payments to employees and other recruiters for locating workers that Mohawk eventually employs and harbors.
Furthermore, "[v]arious recruiters, including Mohawk employees, have provided housing to these illegal workers upon their arrival in North Georgia and have helped them find illegal employment with Mohawk." Additionally, Mohawk knowingly or recklessly accepts fraudulent documentation from the illegal aliens.
The plaintiffs further allege that Mohawk has concealed its efforts to hire and harbor illegal aliens by destroying documents and assisting illegal workers in evading detection by law enforcement. According to plaintiffs' complaint, Mohawk takes steps to shield those illegal aliens from detection by, among other things, helping them evade detection during law enforcement searches and inspections at Mohawk's facilities.

According to the complaint, Mohawk's widespread and knowing employment and harboring of illegal workers has 1256 permitted *1256 Mohawk to reduce labor costs. Mohawk has done so by reducing the number of legal workers it
must hire and, thereby, increasing the labor pool of legal workers from which Mohawk hires. This practice permits Mohawk to depress the wages it pays its legal hourly workers.
Finally, the plaintiffs allege that Mohawk is "able to save substantial sums of money" by paying its workers reduced wages. Furthermore, Mohawk knows that illegal workers are less likely to file worker's-compensation claims, and, therefore, Mohawk is able to save additional monies. According to the plaintiffs, these benefits constitute unjust enrichment under state law.
Mohawk filed a Rule 12(b)(6) motion to dismiss the plaintiffs' complaint for failure to state a claim. The district court determined that the plaintiffs had stated a claim under both federal and state RICO statutes, as well as a claim for unjust enrichment under state law for paying legal workers lower wages because of the illegal workers Mohawk employed. However, the district court dismissed the plaintiffs' unjust-enrichment claim insofar as it was based on the reduced number of worker's-compensation claims Mohawk was forced to pay.[2]
II. FEDERAL RICO CLAIMS
Pursuant to 18 U.S.C. § 1962(c), it is illegal "for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity...." 18 U.S.C. § 1962 (c). Thus, in order to establish a federal civil RICO violation under § 1962(c), the plaintiffs "must satisfy four elements of proof: `(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.'" Jones v. Childers, 18 F.3d 899, 910 (11th Cir.1994) (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S.Ct. 3275, 3285, 87 L.Ed.2d 346 (1985)). These requirements apply whether the RICO claim is civil or criminal in nature.
In civil cases, however, RICO plaintiffs must also satisfy the requirements of 18 U.S.C. § 1964(c). Section 1964 (c) states that "[a]ny person injured in his business or property by reason of" RICO's substantive provisions has the right to "recover threefold the damages he sustains...." 18 U.S.C. § 1964(c). Thus, under § 1964(c), civil RICO claimants, such as the plaintiffs here, must show (1) the requisite injury to "business or property," and (2) that such injury was "by reason of" the substantive RICO violation. We discuss each of these requirements in turn.
A. Pattern of Racketeering Activity
As mentioned above, there are four requirements under § 1962(c). Because elements (3) and (4) 0907 a pattern of racketeering activity 0907 are easily met in this case (at least at the motion-to-dismiss stage), we address them first.
"A `pattern of racketeering activity,' for purposes of the RICO Act, `requires at least two acts of racketeering 1257 activity.'" Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386, 1397 (11th *1257 Cir.1994), modified on
other grounds by 30 F.3d 1347 (11th Cir.1994). "An act of racketeering is commonly referred to as a `predicate act.' A `pattern' of racketeering activity is shown when a racketeer commits at least two distinct but related predicate acts." Maiz v. Virani, 253 F.3d 641, 671 (11th Cir.2001) (quotation marks, citations, and brackets omitted). "If distinct statutory violations are found, the predicate acts will be considered to be distinct irrespective of the circumstances under which they arose." Cox, 17 F.3d at 1397 (quotation marks, citations, and emphasis omitted).
According to 18 U.S.C. § 1961(1)(F), "`racketeering activity' means any act which is indictable under the Immigration and Nationality Act, section 274 (relating to bringing in and harboring certain aliens), ... if the act indictable under such section of such Act was committed for the purpose of financial gain." In this case, the plaintiffs have alleged that the defendant has engaged in an open and ongoing pattern of violations of section 274 of the Immigration and Nationality Act. In particular, plaintiffs allege that Mohawk has violated and continues

to violate: (1) 8 U.S.C. § 1324(a)(3)(A), which makes it a federal crime to "knowingly hire[] for employment at least 10 individuals with actual knowledge that the individuals are aliens" during a twelve-month period; (2) 8 U.S.C. § 1324(a)(1)(A)(iii), which makes it a federal crime to "conceal[], harbor[ ], or shield from detection, or attempt[] to conceal, harbor or shield from detection" aliens that have illegally entered the United States; and (3) 8 U.S.C. § 1324(a)(1)(A)(iv), which makes it a federal crime to "encourage[] or induce[ ] an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law." According to the plaintiffs' complaint, Mohawk has committed hundreds, even thousands, of violations of federal immigration laws. Consequently, we conclude that the plaintiffs have properly alleged a "pattern of racketeering activity."[3]
B. Conduct of an Enterprise
With regard to elements (1) and (2) of the four-part test under § 1962(c), the plaintiffs must establish "conduct of an enterprise" and that the enterprise had a common goal. See United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 2528-29, 69 L.Ed.2d 246 (1981) ("The enterprise is an entity, for present purposes a group of persons associated together for a common purpose of engaging in a course of conduct."). Furthermore, Mohawk "must participate in the operation or management of the enterprise itself." Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S.Ct. 1163, 1173, 122 L.Ed.2d 525 (1993).
An 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." 18 U.S.C. § 1961(4). As stated in United States v. Goldin Indus., Inc., 219 F.3d 1271, 1275 (11th Cir. 2000), "the existence of an enterprise is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as 1258 a continuing unit." (internal quotation marks and citation omitted). Furthermore, "the *1258 definitive factor in determining the existence of a RICO enterprise is the existence of an association of individual entities, however loose or informal, that furnishes a vehicle for the commission of two or more predicate crimes, that is, the pattern of racketeering activity requisite to the RICO violation." Id.
In this case, the plaintiffs have alleged that Mohawk and third-party temp agencies/recruiters have conspired to violate federal immigration laws, destroy documentation, and harbor illegal workers. Specifically, the plaintiffs allege that
[e]ach recruiter is paid a fee for each worker it supplies to Mohawk, and some of those recruiters work closely with Mohawk to meet its employment need by offering a pool of illegal workers who can be dispatched to a particular Mohawk facility on short notice as the need arises. Some recruiters find workers in the Brownsville, Texas area and transport them to Georgia. Others, like TPS, have relatively formal relationships with the company in which they employ illegal workers and then loan or otherwise provide them to Mohawk for a fee. These recruiters are sometimes assisted by Mohawk employees who carry a supply of social security cards for use when a prospective or existing employee needs to assume a new identity.
Given the Rule 12(b)(6) stage of the litigation, the plaintiffs' complaint must be taken as true, and it has sufficiently alleged an "enterprise" under RICO; that is an association-in-fact between Mohawk and third-party recruiters. This Court has never required anything other than a "loose or informal" association of distinct entities. Mohawk and the third-party recruiters are distinct entities that, at least according to the complaint, are engaged in a conspiracy to bring illegal workers into this country for Mohawk's benefit. As such, the complaint sufficiently alleges an "enterprise" under RICO.
As for the common purpose, the plaintiffs' complaint alleges that "[t]he recruiters and Mohawk share the common purpose of obtaining illegal workers for employment by Mohawk." The complaint further alleges that "[e]ach recruiter is paid a fee for each worker it supplies to Mohawk" and that "Mohawk has made various incentive payments to employees and other recruiters for locating workers that Mohawk eventually employs and harbors." Furthermore, "[t]he acts of racketeering activity committed by Mohawk have the same or similar objective: the

reduction of wages paid to Mohawk's hourly workforce." What is clear from the complaint is that each member of the enterprise is allegedly reaping a large economic benefit from Mohawk's employment of illegal workers.
In United States v. Church, 955 F.2d 688, 698 (11th Cir.1992), this Court concluded that the common purpose of making money was sufficient under RICO. Because the complaint clearly alleges that the members of the enterprise stand to gain sufficient financial benefits from Mohawk's widespread employment and harboring of illegal workers, the plaintiffs have properly alleged a "common purpose" for the purposes of RICO.
Furthermore, Mohawk "must participate in the operation or management of the enterprise itself." Reves, 507 U.S. at 185, 113 S.Ct. at 1173. That is, Mohawk "must have some part in directing" the affairs of the enterprise. Id. at 179, 113 S.Ct. at 1170. However, the Supreme Court has cautioned that "RICO liability is not limited to those with primary responsibility for the enterprise's affairs...." Id. In their complaint, the plaintiffs allege that "Mohawk 1259 participates in the operation and management of the affairs of the enterprise *1259 ...," which includes some direction over the recruiters. 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 enterprise. Again, at this stage in the litigation, we simply cannot say whether the plaintiffs will be able to establish that Mohawk had "some part in directing" the affairs of the enterprise. However, they have alleged sufficient acts to survive a Rule 12(b)(6) motion.
Accordingly, we conclude that the plaintiffs' complaint states a claim that is cognizable under § 1962(c). In so doing, we note that the allegations in this case are similar to those in cases recently decided by the Second, Sixth, and Ninth Circuits. See Trollinger v. Tyson Foods, 370 F.3d 602 (6th Cir.2004) (former employees alleging employer used illegal immigrants in order to depress wages); Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir.2002) (legally documented workers alleging that employers leveraged hiring of undocumented workers in order to depress wages); Commercial Cleaning Servs., L.L.C. v. Colin Service Sys., Inc., 271 F.3d 374 (2d Cir.2001) (company alleging competitor hired undocumented workers in order to underbid competing firms). In each of these decisions, the circuit court determined that, at the Rule 12(b)(6) stage, the plaintiffs had alleged sufficient damages to be permitted to pursue their RICO claims. Although none of the opinions specifically addressed § 1962(c)'s requirements, each of these cases has essentially the same factual basis for RICO liability as the complaint before this Court.
We recognize that the above conclusion puts our circuit in conflict with the Seventh Circuit's decision in Baker v. IBP, Inc., 357 F.3d 685 (7th Cir.2004), cert. denied, ___ U.S. ___, 125 S.Ct. 412, 160 L.Ed.2d 318 (2004). In Baker, an employees' class-action lawsuit alleged that a meat-processing facility conspired with recruiters (and a Chinese aid group), and violated RICO by employing undocumented, illegal workers in an effort to drive down employee wages. The Seventh Circuit concluded that the employees' union was a necessary party to the lawsuit. Id. at 690-91.
However, the Seventh Circuit in Baker also concluded that there was "another fatal problem" with the complaint. Id. at 691. Although stating that an "enterprise" arguably existed, the Seventh Circuit determined that there was not a common purpose among the entities in the enterprise. Id. Specifically, the Seventh Circuit stated that the employer "wants to pay lower wages; the recruiters want to be paid more for services rendered (though [the employer] would like to pay them less); the Chinese Mutual Aid Association wants to assist members of its ethnic group. These are divergent goals." Id.
In our circuit, however, there has never been any requirement that the "common purpose" of the enterprise be the sole purpose of each and every member of the enterprise. In fact, it may often be the case that different members of a RICO enterprise will enjoy different benefits from the commission of predicate acts. This fact, however, is insufficient to defeat a civil RICO claim. Rather, all that is required is that the enterprise have a common purpose. In this case, the complaint alleges that Mohawk and the recruiters, under Mohawk's direction, worked together to recruit illegal workers to come to Georgia and that they had the common purpose of providing illegal workers to Mohawk so that Mohawk could reduce its labor costs and the recruiters could get paid. This commonality is all 1260 that this circuit's case law requires. See Church, *1260 955 F.2d at 698. Again, while the plaintiffs may be unable to prove such allegations at trial, we cannot say at this 12(b)(6) stage of the litigation that they have failed to properly allege a common purpose.

We recognize that the Baker Court also concluded that there was no way to establish that the employer "operate [d] or manage[d] th[e] enterprise through a pattern of racketeering activity." Baker, 357 F.3d at 691 (emphasis omitted). However, as this Court has noted, "the Supreme Court has yet to delineate the exact boundaries of the operation or management test." United States v. Starrett, 55 F.3d 1525, 1546 (11th Cir.1995). Although the exact boundaries have not been established, it is possible that the plaintiffs will be able to establish that Mohawk played some part in directing the affairs of the enterprise. Whether the plaintiffs ultimately establish sufficient evidence to meet the boundaries of the operation-or-management test is a question best answered at the summary-judgment stage or at trial. Accordingly, we conclude that the plaintiffs have sufficiently alleged conduct that may potentially satisfy the operation-or-management test. As such, the plaintiffs are entitled to continue with their claims at this juncture.
Having reviewed the four elements of § 1962(c), we turn to § 1964(c).
C. Injury to "Business or Property" Interest Under RICO
As indicated above, RICO's civil-suit provision states that "[a]ny person injured in his business or property by reason of" RICO's substantive provisions has the right to "recover threefold the damages he sustains...." 18 U.S.C. § 1964(c). "The terms `business or property' are, of course, words of limitation which preclude [certain forms of] recovery." Doe v. Roe, 958 F.2d 763, 767 (7th Cir.1992). However, RICO is to be "liberally construed." Sedima, 473 U.S. at 497-98, 105 S.Ct. at 3285-86 . Accordingly, we must determine whether the plaintiffs have a "business or property" interest that could be injured under RICO. 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.
Indeed, this case is similar to the Ninth Circuit's Mendoza decision, where legally documented agricultural workers sued fruit growers under RICO alleging that the growers depressed wages by hiring illegal workers. In Mendoza, the defendant claimed that the employees would have to show a "`property right' in the lost wages[] by showing that they were promised or contracted for higher wages." Mendoza, 301 F.3d at 1168 n. 4. The Ninth Circuit concluded that this argument was misplaced, pointing out that the plaintiffs' claim did not implicate procedural due process. Id. Rather, the Ninth Circuit concluded that "what is required is precisely what the employees allege here: a legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes." Id. (citations omitted). Given that a relationship clearly exists between plaintiff workers and their employer, Mohawk, we conclude that a similar business interest exists in this case, and that the employees' alleged injury to their business interests satisfies the business-interest requirement. Consequently, the plaintiffs have alleged a sufficient injury to a business interest to pursue their RICO claims.
D. "By Reason Of" the Substantive RICO Violations
We now turn to the "by reason of" requirement contained in § 1964(c). The "by reason of" requirement implicates 1261 two concepts: (1) a sufficiently direct injury so that a plaintiff has standing to sue; and (2) *1261 proximate cause,
whereby the wrongful conduct is shown to be a substantial cause of the alleged injury and the causal connection is foreseeable and not speculative. See Trollinger, 370 F.3d at 612 ("RICO's civil-suit provision imposes two distinct but overlapping limitations on claimants 0907 standing and proximate cause."); Green Leaf Nursery v. E.I. DuPont De Nemours and Co., 341 F.3d 1292, 1307 (11th Cir. 2003), cert. denied, 541 U.S. 1037, 124 S.Ct. 2094, 158 L.Ed.2d 723 (2004) ("[O]ne or more of the predicate acts [in a RICO claim] must not only be the `but for' cause of the injury, but the proximate cause as well." (citations omitted)); Mendoza, 301 F.3d at 1168-72 (concluding that the plaintiffs had satisfied both "statutory" and "constitutional" standing requirements of RICO); see also Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 268-69, 112 S.Ct. 1311, 1318, 117 L.Ed.2d 532 (1992) (stating in a RICO case that "a plaintiff who complain[s] of harm flowing merely from the misfortunes visited upon a third person by the defendant's acts was generally said to stand at too remote a distance to recover" (citations omitted)). Despite some significant overlap, we address the proximate cause and standing concepts separately.[4]

(i) Proximate Cause
"It is well-established that RICO plaintiffs must prove proximate causation in order to recover." Cox, 17 F.3d at 1399 (citations omitted). "A proximate cause is not, however, the same thing as a sole cause. Instead, a factor is a proximate cause if it is a substantial factor in the sequence of responsible causation." Id. (internal quotation marks and citation omitted).
In this case, the plaintiffs have alleged sufficient proximate cause to withstand defendant Mohawk's motion to dismiss. According to their complaint, Mohawk has hired illegal workers "[i]n an effort to keep labor costs as low as possible." Furthermore, "Mohawk's employment and harboring of large numbers of illegal workers has enabled Mohawk to depress wages and thereby pay all of its hourly employees, including legally employed workers who are members of the class, wages that are lower than they would be if Mohawk did not engage in this illegal conduct." Again, the complaint alleges that "Mohawk's widespread employment and harboring of illegal workers has substantially and unlawfully increased the supply of workers from which Mohawk makes up its hourly workforce. This unlawful expansion of the labor pool has permitted Mohawk to depress the wages that it pays all its hourly employees...." The plaintiffs also allege that "[o]ne purpose and intended effect of Mohawk's 1262 widespread employment and harboring of illegal *1262 workers is to deprive Mohawk's hourly workforce of any individual or collective bargaining power" and that they "were injured by direct and proximate reason of Mohawk's illegal conduct."
Given these allegations, which we must assume are true at this Rule 12(b)(6) stage of the litigation, it is clear that the plaintiffs have properly alleged proximate cause. According to the complaint, Mohawk's widespread scheme of hiring and harboring of illegal workers has the purpose and direct result of depressing the wages paid to the plaintiffs. This is all that is needed to establish proximate cause.
Our conclusion is consistent with the two other circuits to have addressed this proximate cause issue in RICO decisions involving schemes to depress wages of legal workers by widespread hiring of illegal workers. See Trollinger, 370 F.3d at 619; Mendoza, 301 F.3d at 1171-72.
In Trollinger, the Sixth Circuit considered a situation in which former Tyson employees at a poultry processing plant sued their former employer under RICO, alleging that the use of illegal workers permitted the employer to lower wages via the collective-bargaining agreement with the union representing the employees. The Sixth Circuit, reviewing the district court's dismissal of the employees' complaint under Rule 12(b)(6), determined that "at this preliminary stage in the proceedings" it could not conclude that there was no likelihood of success on the merits. Trollinger, 370 F.3d at 619. The Sixth Circuit explained that it remained possible that the legal-worker plaintiffs might prove the following allegations in their complaint:
(1) that Tyson hired sufficient numbers of illegal aliens to impact the legal employees' wages; (2) that each additional illegal worker hired into the bargaining unit by Tyson has a measurable impact on the bargained-for wage-scale; (3) that the illegal immigrants allegedly brought into this country through Tyson's efforts allowed Tyson not to compete with other businesses for unskilled labor; and (4) that Tyson's legal workers did not "choose" to remain at Tyson for less money than other businesses offered, but had no choice in the matter given the hiring needs of the other businesses in the area and the influx of illegal immigrants at Tyson's facilities. While Tyson's proximate-cause argument may well carry the day at the summary-judgment stage, it requires more assistance than the complaint alone provides.
One other circuit has reached the same result on somewhat similar facts ... Mendoza....
Id..[5]
Although the plaintiffs in this case may not ultimately satisfy the proximate-cause requirement, we conclude it remains possible that plaintiffs may prove their allegations, and we cannot say at this Rule 12(b)(6) stage that there is no possibility of such proof. Consequently, we join the Sixth and Ninth Circuits in concluding that

employees such as the ones in this case have alleged sufficient proximate cause to proceed with their RICO claims.

1263 *1263 (ii) Statutory Standing

Lastly, we address RICO's statutory standing limitation that also grows out of the "by reason of" limitation in § 1964(c). "[T]he test for RICO standing is whether the alleged injury was directly caused by the RICO violation, not whether such harm was reasonably foreseeable." Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., Inc., 140 F.3d 898, 908 (11th Cir.1998); see Sedima, 473 U.S. at 496-97, 105 S.Ct. at 3285 ("[T]he plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation" and the plaintiff's damages must "flow from the commission of the predicate acts."); Green Leaf Nursery, 341 F.3d at 1307 (stating that plaintiffs must show a "direct relation between the injury asserted and the injurious conduct" and that we ask "whether the alleged conduct was `aimed primarily' at a third party" (quotation marks and citations omitted)); Bivens, 140 F.3d at 906 (concluding that a party whose alleged injuries result from "the misfortunes visited upon a third person by the defendant's acts lacks standing to pursue a claim under RICO" (quotation marks and citation omitted)); Pelletier v. Zweifel, 921 F.2d 1465, 1497 (11th Cir.1991) (stating that the plaintiff has RICO standing if he shows "a causal connection between his injury and a predicate act").[6] Thus, we must evaluate whether the plaintiffs' injury is sufficiently direct to give plaintiffs standing to sue for Mohawk's alleged RICO violations.

Both the Sixth and Ninth Circuits have expressly concluded that legal workers have sufficiently direct injuries for RICO standing in similar cases. Trollinger, 370 F.3d at 615-618; Mendoza, 301 F.3d at 1170. The Ninth Circuit's Mendoza decision is particularly well-reasoned and instructive on the statutory standing issue.

As mentioned earlier, the Mendoza plaintiffs were legal workers who claimed that the purpose and result of the defendants' scheme of hiring undocumented immigrants was to depress the wages of legally documented employees. The Ninth Circuit concluded that the plaintiffs had statutory standing because "we are unable to discern a more direct victim of the illegal conduct." Mendoza, 301 F.3d at 1170. The Ninth Circuit explained:

The documented employees here do not complain of a passed-on harm. They allege that the scheme had the purpose and direct result of depressing the wages paid to them by the growers. Thus, as the district court correctly determined, "plaintiffs have stated a claim that they are the direct victims of the illegal hiring scheme."

. . .

We also note that the undocumented workers cannot "be counted on to bring suit for the law's vindication." As the district court noted, the fact that RICO specifically provides that illegal hiring is a predicate offense indicates that Congress contemplated the enforcement of the immigration laws through lawsuits like this one.

Id. (internal citations omitted). The Ninth Circuit further stated that

1264

the workers must be allowed to make their case through presentation of evidence, including experts who will testify about the labor market, the geographic market, and the effects of the illegal scheme. Questions regarding the relevant labor market and the growers' power *1264 within that market are exceedingly complex and best addressed by economic experts and other evidence at a later stage in the proceedings.

Id. at 1171.

Plaintiffs' complaint clearly alleges that Mohawk has engaged in widespread and knowing hiring and harboring of illegal aliens with the express purpose and direct result of lowering the wages of legal workers. For example, the complaint alleges that "[o]ne purpose and intended effect of Mohawk's widespread employment and harboring of illegal workers is to deprive Mohawk's hourly workforce of any individual or collective bargaining power." The plaintiffs also allege that "[t]he acts of racketeering activity committed by Mohawk have the same or similar

objective: the reduction of wages paid to Mohawk's hourly workforce." Furthermore, the plaintiffs "were injured by direct and proximate reason of Mohawk's illegal conduct." Given this stage of the litigation, we conclude that the plaintiffs have sufficiently alleged that Mohawk's illegal conduct was aimed primarily at them. Consequently, the district court correctly denied Mohawk's 12(b)(6) motion as it relates to the plaintiffs' federal civil RICO claim.
III. STATE LAW RICO
Under the Georgia RICO statute, "[i]t is unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money." O.C.G.A. 16-14-4(a). Unlike federal civil RICO, the Georgia RICO statute does not require proof of an "enterprise." Cobb County v. Jones Group, P.L.C., 218 Ga.App. 149, 460 S.E.2d 516, 520-21 (1995). Rather, under Georgia RICO, the plaintiffs need only establish racketeering activity; that is, "a plaintiff must show that the defendant committed predicate offenses (set forth in O.C.G.A. § 16-14-3(9)) at least twice." Id. at 521 (quotation marks and citation omitted).
With regard to their state-law RICO claim, the plaintiffs rely on 18 U.S.C. § 1546 (relating to the fraud and misuse of visas, permits, and other documents) for their predicate offenses.[7] Despite being limited to § 1546, the plaintiffs have alleged sufficiently numerous violations to satisfy the racketeering activity requirement under Georgia state law. In fact, according to the complaint, "Mohawk has committed hundreds, probably thousands, of violations of ... 18 U.S.C. § 1546 as part of its pattern of racketeering activity."
There are, however, two issues under the Georgia RICO statute that warrant further discussion: (1) whether, under the Georgia RICO statute, a corporation may be sued; and (2) whether the plaintiffs have sufficiently alleged proximate cause to have standing to bring a Georgia RICO suit.
A. Whether Corporations May be Sued Under Georgia RICO
1265 "Although this is a civil suit, RICO predicate acts are criminal offenses." Cobb *1265 County, 460 S.E.2d at 521 (quotation marks omitted). Therefore, in order to determine whether a corporation may be held liable under RICO, Georgia courts look to O.C.G.A. § 16-2-22. See Cobb County, 460 S.E.2d at 521.
There are two means by which a corporation may be held liable: (1) directly (under O.C.G.A. § 16-2-22(a)(1)); and (2) through its agents and employees under certain situations (under O.C.G.A. § 16-2-22(a)(2)). The Georgia Supreme Court already has concluded that corporations may not be sued directly under RICO. Clark v. Security Life Ins. Co. of America, 270 Ga. 165, 509 S.E.2d 602, 604 n. 11 (1998) ("A corporation may also face prosecution under O.C.G.A. § 16-2-22(a)(1) for a crime if the statute defining the crime clearly indicates a legislative purpose to impose liability on a corporation. RICO, however, is not such a statute....").
Although a corporation cannot be prosecuted directly under RICO, a corporation will be liable under Georgia RICO "if the `crime is authorized, requested, commanded, performed, or recklessly tolerated by the board of directors or by a managerial official who is acting within the scope of his employment.'" Clark, 509 S.E.2d at 604 (quoting § 16-2-22(a)(2)). Whether the acts were performed at the request, command, or authorization of the board of directors or other managers is a question of proof at trial, not a sufficiency-of-the-pleading issue. See State v. Military Circle Pet Center No. 94, Inc., 257 Ga. 388, 360 S.E.2d 248, 249 (1987) ("Although the state must prove the applicable provisions of [§ 16-2-22(a)(2)] at trial against a criminal defendant, it is not necessary that the state allege these provisions in the accusation.").
In this case, the plaintiffs' complaint alleges that "Mohawk supervisors have encouraged these [illegal-immigrant] employees to return to the United States and reapply for work at Mohawk in violation of United States law." Furthermore, "Mohawk also has knowingly and recklessly accepted proof of eligibility for employment documents that reflect successive different names for a single person." The plaintiffs' complaint is rife with allegations that supervisors and managers at Mohawk were either aware of, or in reckless disregard of, the misuse of various work-related documents. Consequently, the plaintiffs have alleged sufficient conduct that, if proven, would allow them to hold Mohawk liable under state law.

B. Standing to Pursue State-Law RICO Claims
As with Federal RICO claims, under Georgia's RICO statute, "[a]ny person who is injured by reason of any violation of" Georgia's RICO statute "shall have a cause of action for three times the actual damages sustained...." O.C.G.A. § 16-14-6(c). "[B]ecause the state RICO act is modeled upon and closely analogous to the federal RICO statute," Georgia courts "look to federal authority" in determining RICO standing. Maddox v. So. Engineering Co., 231 Ga.App. 802, 500 S.E.2d 591, 594 (1998) (quotation marks and citation omitted). We already have concluded that the plaintiffs have alleged sufficient injury to pursue their federal RICO claims, and accordingly, we conclude that they have alleged a sufficient injury to pursue their state RICO claims as well. Although under Georgia law the plaintiffs are limited to predicate acts arising out of 18 U.S.C. § 1546, we conclude that the plaintiffs' allegations are neither too remote nor too indirect to satisfy Georgia's proximatecause requirement under state-law RICO. See Maddox, 500 S.E.2d at 594 ("In short, the language `by reason of' imposes a proximate causation requirement on the plaintiff." (citation omitted)); id. (A plaintiff "must show a 1266 causal connection between *1266 his injury and a predicate act." (citation omitted)).
IV. UNJUST ENRICHMENT
The plaintiffs' complaint claims that Mohawk's illegal conduct permits it "to reap substantial wage savings" because Mohawk pays plaintiffs lower wages than it would otherwise be forced to pay. Therefore, according to the plaintiffs' complaint, Mohawk has been unjustly enriched under state law. Plaintiffs also claim that Mohawk has been unjustly enriched because the hiring of illegal aliens has led to a reduced number of worker'scompensation claims. Both of plaintiffs' state-law unjust-enrichment claims fail.
Here, the plaintiffs were all paid an agreed-upon wage. In essence, the plaintiffs have a contract to work for the defendant and were paid the agreed-upon wage. In Georgia, "[u]njust enrichment is an equitable concept and applies when as a matter of fact there is no legal contract...." St. Paul Mercury Ins. Co. v. Meeks, 270 Ga. 136, 508 S.E.2d 646, 648 (1998) (quotation marks and citation omitted); see Bonem v. Golf Club of Georgia, Inc., 264 Ga.App. 573, 591 S.E.2d 462, 467-68 (2003). In this case, there was a legal contract as a matter of fact (i.e., if the plaintiffs were not paid, they could sue for breach of the employment contract). See, e.g., SurgiJet, Inc. v. Hicks, 236 Ga.App. 80, 511 S.E.2d 194, 195 (1999); Brazzeal v. Commercial Cas. Ins. Co., 51 Ga.App. 471, 180 S.E. 853, 853 (1935). Therefore, there can be no unjust enrichment. Consequently, the plaintiffs' unjustenrichment claim as it related to Mohawk's purported savings from lower wages should have been dismissed.
As for plaintiffs' claims that hiring illegal workers resulted in fewer worker's-compensation claims, there is no reasonable allegation that this fact, even if true, is connected to the plaintiffs receiving lower wages. To put it another way, the fact that Mohawk may have increased profits by lowering the number of worker's-compensation claims it paid is not related to what wages Mohawk paid the plaintiffs. Consequently, the district court correctly determined that the plaintiffs did not have standing to assert this claim.
V. CONCLUSION
For all the above reasons, we conclude that the district court properly denied Mohawk's Rule 12(b)(6) motion as it related to both the plaintiffs' federal and state RICO claims. Furthermore, the district court properly dismissed the plaintiffs' unjust-enrichment claim as it related to worker's compensation. However, the district court should have also dismissed the plaintiffs' unjust-enrichment claim as it related to the agreed-upon wages that plaintiffs received.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED FOR FURTHER PROCEEDINGS.
[*] Honorable John R. Gibson, United States Circuit Judge for the Eighth Circuit, sitting by designation.

[1] At this point in the litigation, we must assume the facts set forth in the plaintiffs' complaint are true. See Marsh v. Butler County, 268 F.3d 1014, 1023 (11th Cir.2001) (en banc) (setting forth the facts in the case by "[a]ccepting all well-pleaded factual allegations (with reasonable inferences drawn favorably to Plaintiffs) in the complaint as true"). Because we must accept the allegations of plaintiffs' complaint as true, what we set out in this opinion as "the facts" for Rule 12(b)(6) purposes may not be the actual facts.
[2] This Court reviews the denial of a Rule 12(b)(6) motion "de novo, applying the same standard as the district court did." Hoffman-Pugh v. Ramsey, 312 F.3d 1222, 1225 (11th Cir.2002). A complaint should not be dismissed pursuant to Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim." Beck v. Deloitte & Touche, 144 F.3d 732, 735 (11th Cir.1998) (internal quotation marks and citation omitted).
[3] There is no dispute that these predicate acts, if they occurred, are related. See Pelletier v. Zweifel, 921 F.2d 1465, 1496-97 (11th Cir.1991) ("Predicate acts are related if they have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." (internal quotation marks and citation omitted)).
[4] As the Sixth Circuit aptly explained,
the two concepts overlap and that is particularly true in the context of civil RICO claims. As a general matter, they overlap because a plaintiff who lacks standing to vindicate a derivative injury also will be unable to show proximate cause. And as a matter of RICO law, the two concepts overlap because they both grow out of the "by reason of" limitation in RICO 0907 namely, the requirement that claimants establish that their injury was "by reason of" a RICO predicate act violation. The "by reason of" limitation, in other words, bundles together a variety of "judicial tools," some of which are traditionally employed to decide causation questions and some of which are employed to decide standing questions. Holmes, 503 U.S. at 268, 112 S.Ct. [at 1318] ("Here we use `proximate cause' to label generically the judicial tools used to limit a person's responsibility for the consequences of that person's own acts. At bottom, the notion of proximate cause reflects ideas of what justice demands, or of what is administratively possible and convenient.") (quotation omitted)....
Trollinger, 370 F.3d at 613.
[5] As noted earlier, in Mendoza, the Ninth Circuit was faced with a similar suit in which legally documented agricultural workers sued fruit growers under RICO alleging that the growers depressed wages by hiring illegalimmigrant workers. 301 F.3d at 1166. Under almost the exact same legal theory as advanced in this case, the Mendoza Court concluded that the plaintiffs'"causation allegations are sufficient at this stage." Id. at 1172.
[6] This Court has more often evaluated the "by reason of" requirement primarily as part of its proximate-cause analysis, as opposed to the distinct concept of standing. However, despite significant overlap, we must also examine whether the plaintiffs' injury is sufficiently direct to permit standing.
[7] According to O.C.G.A. § 16-14-3(9)(A)(xxix), "racketeering activity" is defined as "conduct defined as `racketeering activity' under 18 U.S.C. Section 1961(1)(A), (B), (C), and (D)." The only "racketeering activity" contained in 18 U.S.C. § 1961(1)(A), (B), (C), or (D) on which the plaintiffs rely is 18 U.S.C. § 1546. To the extent the plaintiffs attempt to rely on 8 U.S.C. § 1324, as they do with their federal civil RICO claims, such a claim is barred under the Georgia RICO statute because 8 U.S.C. § 1324 is listed as a "racketeering offense" in 18 U.S.C. § 1961(1)(F), and not in subsections (A), (B), (C), or (D).
Save trees - read court opinions online on Google Scholar.

 
 Mohawk Industries, Inc. v. Williams, 546 U.S. 1075 (2005)

126 S.Ct. 830 Supreme Court of the United States
MOHAWK INDUSTRIES, INC., petitioner, v.
Shirley WILLIAMS, et al.
No. 05-465. | Dec. 12, 2005.
Case below, 411 F.3d 1252.

Opinion
*831 Petition for writ of certiorari to the United States Court of Appeals for the Eleventh Circuit granted limited to Question 1 presented by the petition.
Parallel Citations 126 S.Ct. 830 (Mem), 163 L.Ed.2d 705, 74 USLW 3347, 74 USLW 3351, 74 USLW 3248
	  

1

 
 Mohawk Industries, Inc. v. Williams, 547 U.S. 516 (2006)

126 S.Ct. 2016 Supreme Court of the United States
MOHAWK INDUSTRIES, INC., Petitioner, v.
Shirley WILLIAMS et al.
No. 05-465. | June 5, 2006.
Opinion
PER CURIAM.
*516 The writ of certiorari limited to Question 1 presented by the petition, granted at 546 U.S. 1075, 126 S.Ct. 830, 163 L.Ed.2d 705 (2005), is dismissed as

improvidently granted. The petition for a writ of certiorari is granted. The judgment is vacated, and the case is remanded to the United States Court of Appeals for the Eleventh *517 Circuit for further consideration in light of Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006).
It is so ordered.
Parallel Citations
126 S.Ct. 2016 (Mem), 179 L.R.R.M. (BNA) 2896, 164 L.Ed.2d 776, 74 USLW 4290, 19 Fla. L. Weekly Fed. S 227
	  

1

 
 Mohawk Industries, Inc. v. Williams, 549 U.S. 1260 (2007)

127 S.Ct. 1381 Supreme Court of the United States MOHAWK INDUSTRIES, INC., petitioner,
v. Shirley WILLIAMS, et al. No. 06-873. | Feb. 26, 2007.
Case below, 465 F.3d 1277.
Opinion

Motion of petitioner to strike respondents’ supplemental brief denied as moot. Petition for writ of certiorari to the United States Court of Appeals for the Eleventh Circuit denied.
Parallel Citations
127 S.Ct. 1381 (Mem), 181 L.R.R.M. (BNA) 2544, 167 L.Ed.2d 174, 75 USLW 3355, 75 USLW 3455, 75 USLW 3457
	  

1

 
 Mohawk Industries, Inc. v. Williams, 547 U.S. 1053 (2006)

126 S.Ct. 1671 Supreme Court of the United States
MOHAWK INDUSTRIES, INC., petitioner, v.
Shirley WILLIAMS, et al.
No. 05-465. | April 3, 2006.
Opinion

Motion of the Solicitor General for leave to participate in oral argument as amicus curiae and for divided argument granted.
Parallel Citations 126 S.Ct. 1671 (Mem), 164 L.Ed.2d 395, 74 USLW 3559
	  

1