Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-36049/USCOURTS-ca9-12-36049-0/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED BROTHERHOOD OF

CARPENTERS AND JOINERS OF

AMERICA; SOUTHWEST REGIONAL

COUNCIL OF CARPENTERS;

SOUTHWEST CARPENTERS JATC;

PACIFIC NORTHWEST REGIONAL

COUNCIL OF CARPENTERS;

WASHINGTON STATE UBC JATC;

NORTHEAST CARPENTERS REGIONAL

COUNCIL OF CARPENTERS;

CARPENTERS AND CARPENTERS

DISTRICT COUNCIL OF GREATER ST.

LOUIS AND VICINITY; LARRY

GOULD; WILLIAM CLAYTON;

JORDAN TRUMAN; BUTCH PARKER;

SCOTT FLANNERY; RICHARD

BURWELL; EMANUEL LEE; PAUL

LEDYARD; JOSEPH EDNEY; WILLIE

MARSHALL; JOHN LAKE; ROGER

JOHNSON; BRIAN THOMPSON;

CHARLES MCWILLIAMS; BILLY

COOLEY; SHERYL HOLLIS; BOOKER

STANDERFER; BOB SCOTT; JOE

BACA,

Plaintiffs-Appellants,

v.

No. 12-36049

D.C. No.

2:12-cv-00109-

TOR

OPINION

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2 CARPENTERS V. BUILDING TRADES

BUILDING AND CONSTRUCTION

TRADES DEP’T, AFL-CIO; JAMES

WILLIAMS; RON AULT; DAVID

MOLNAA,

Defendants-Appellees.

Appeal from the United States District Court

for the Eastern District of Washington

Thomas O. Rice, District Judge, Presiding

Argued and Submitted

May 12, 2014—Seattle, Washington

Filed October 28, 2014

Before: Diarmuid F. O’Scannlain, Andrew J. Kleinfeld,

and Marsha S. Berzon, Circuit Judges.

Opinion by Judge O’Scannlain

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CARPENTERS V. BUILDING TRADES 3

SUMMARY*

RICO / Labor Law

The panel affirmed the dismissal of an action brought

under RICO and the Labor Management Reporting and

Disclosure Act by the United Brotherhood of Carpenters and

Joiners of America, a labor union, against the Building and

Construction Trades Department, AFL-CIO, an umbrella

labor organization representing unions and individuals in the

construction industry.

The Carpenters, together with subordinate labor

organizations and individual members, alleged that the

Building Trades conducted a campaign of intense economic

pressure, as well as acts of vandalism and threats of force, to

persuade the Carpenters to reaffiliate with the Building

Trades and pay dues to it.

The panel held that the Carpenters failed to state a civil

RICO claim because it did not plausibly allege any predicate

acts, or racketeering activity, under either the Hobbs Act or

state extortion law. The panel held that the Hobbs Act is not

violated, and a “claim of right” defense is not defeated, based

on unwanted or subjectively valueless services in the context

of an economic pressure campaign. The panel also held that

the Carpenters did not adequately allege that the Building

Trades, its agents, or its coconspirators used violence or force

against the union or its members.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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4 CARPENTERS V. BUILDING TRADES

The panel held that the Carpenters failed to state a claim

that officers of the Building Trades violated the LMRDA by

orchestrating the termination of an affiliation agreement

between the Carpenters and the Metal Trades Department,

AFL-CIO, another labor organization, because Carpenters

members were not expelled from the Metal Trades as a

disciplinary action.

The panel held that the district court did not abuse its

discretion by denying leave to amend the complaint.

COUNSEL

Craig D. Singer, Williams & Connolly LLP, Washington,

DC, argued the cause and filed the briefs for the plaintiffsappellants. With him on the briefs were Charles Davant IV,

Williams & Connolly LLP, Washington, DC, Daniel M.

Shanley, DeCarlo & Shanley, Los Angeles, CA, and G.

Robert Blakey (Of Counsel), William J. and K. O’Neill

Professor of Law, Notre Dame Law School, Notre Dame, IN.

Leon Dayan, Bredhoff & Kaiser, PLLC, Washington, DC,

argued the cause and filed the brief for the defendantsappellees. With him on the brief were Abigail V. Carter,

Joshua B. Shiffrin, Matthew Stark Rubin, and Laurence Gold,

Bredhoff & Kaiser, PLLC, Washington, DC.

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CARPENTERS V. BUILDING TRADES 5

OPINION

O’SCANNLAIN, Circuit Judge:

We must decide whether a labor union’s use of economic

pressure is extortion under the Racketeer Influenced and

Corrupt Organizations Act.

I

The Building and Construction Trades Department, AFLCIO, (“Building Trades”) is an umbrella labor organization

representing unions and individuals in the construction

industry. Subordinate labor unions pay the Building Trades

per capita monthly fees and must comply with the Building

Trades’ rules. The United Brotherhood of Carpenters and

Joiners of America (“Carpenters”) is no longer affiliated with

the Building Trades because it believes that the Building

Trades’ services are “unrequested, unwanted and

unnecessary” and that its rules are “stale, outdated and

anticompetitive.”1

This case concerns the “Push-Back-Carpenters

Campaign,” a campaign of (at least) intense economic

pressure orchestrated by the Building Trades to force the

Carpenters into paying what it calls “monthly bloated per

capita payments in perpetuity,” that is, into reaffiliating with

the Building Trades and paying dues. Allegations of

“economic pressure” include: promoting a 2008 AFL-CIO

1 As we are reviewing a dismissal under Federal Rule of Civil Procedure

12(b)(6), we accept as true the complaint’s well-pleaded factual

allegations. E.g., OSU Student Alliance v. Ray, 699 F.3d 1053, 1061 (9th

Cir. 2012).

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6 CARPENTERS V. BUILDING TRADES

resolution authorizing the AFL-CIO to charter a union to

compete with the Carpenters; the organization of a “Unity

Rally” in St. Louis; repeated public criticism of the

Carpenters on websites and in other publications; filing

frivolous regulatory claims against the Carpenters; stealing

confidential information; forcingthe Carpenters’ Seattle legal

counsel to terminate its relationship with the Carpenters; and

orchestrating the June 2011 termination of an affiliation

agreement (the “Solidarity Agreement”) between the

Carpenters and the Metal Trades Department, AFL-CIO.

The Carpenters’ complaint also alleges acts of vandalism

and threats of force, such as: vandalism of Carpenters’ job

sites and property; death threats against Carpenters’ officials

and representatives; threats of violence at Pier 66 in Seattle;

and the public dissemination of video footage of a violent

attack on Carpenters’ members.

Although the Carpenters have not acceded to the Building

Trades’ demands, they allegedly have suffered significant

harm, including: “lost members and dues, lost or reduced

promotion, contractual and/or membership recruitment

opportunities, lost job opportunities, positions and work

assignments, loss of confidential information, increased costs

due to the termination of contractual relations with its

attorneys, and substantial and irreparable loss of goodwill.”

The Carpenters, together with six subordinate labor

organizations and nineteen individual members, sued the

Building Trades and three of its officers and agents: James

Williams, Ron Ault, and David Molnaa.2 The Carpenters

2 Two other individuals named as defendants, Mark Ayers and Ed Hill,

were voluntarily dismissed.

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CARPENTERS V. BUILDING TRADES 7

alleged nine claims, four under the Racketeer Influenced and

Corrupt Organizations Act’s private cause of action (“civil

RICO”), 18 U.S.C. § 1964(c), one under the Labor

Management Reporting and Disclosure Act (“LMRDA”),

29 U.S.C. § 411(a)(5), and four under state law.

Concluding that the Carpenters failed to allege proximate

causation or any predicate acts and also failed to join a

necessary defendant to obtain injunctive relief under the

LMRDA, the district court dismissed all of the Carpenters’

federal claims. See Fed. R. Civ. P. 12(b)(6). The court also

declined to exercise supplemental jurisdiction over the state

claims. Finally, although the Carpenters had not previously

amended their complaint, the court declined to grant leave to

amend on the ground of futility. The Carpenters timely

appealed.

II

RICO provides a private cause of action for “[a]ny person

injured in his business or property by reason of a violation of

[18 U.S.C. § 1962].” 18 U.S.C. § 1964(c). Subsections

1962(a) through (c) prohibit certain “pattern[s] of

racketeering activity” in relation to an “enterprise.” 

Subsection 1964(d) makes it illegal to conspire to violate

subsections (a), (b), and (c) of section 1962.

“The elements of a civil RICO claim are as follows:

(1) conduct (2) of an enterprise (3) through a pattern (4) of

racketeering activity (known as ‘predicate acts’) (5) causing

injury to plaintiff’s business or property.” Living Designs,

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

Cir. 2005) (internal quotation marks and citation omitted).

“[R]acketeering activity” includes, inter alia, “any act which

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8 CARPENTERS V. BUILDING TRADES

is indictable” under the Hobbs Act, 18 U.S.C. § 1951, or “any

act or threat involving . . . extortion, . . . which is chargeable

under State law.” 18 U.S.C. § 1961(1)(A), (B).

The primary issue in this appeal is whether the Carpenters

plausibly alleged any predicate acts, under either the Hobbs

Act or state extortion law.

A

“Extortion” under the Hobbs Act, “means the obtaining of

property from another, with his consent, induced by wrongful

use of actual or threatened force, violence, or fear, or under

color of official right.” 18 U.S.C. § 1951(b)(2). The

Carpenters’ complaint alleges that the Building Trades

applied intense economic pressure in an effort to force them

to surrender their money and submit to Building Trades

control.

Fear, in the context of the Hobbs Act, can include fear of

economic loss. See, e.g., Levitt v. Yelp! Inc., No. 11-17676,

2014 WL 4290615, at *8 (9th Cir. Sept. 2, 2014); United

States v. Greger, 716 F.2d 1275, 1278–79 (9th Cir. 1983);

Rennell v. Rowe, 635 F.3d 1008, 1012 (7th Cir. 2011);

Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d

494, 522 (3d Cir. 1998) (“The term ‘fear’ includes the fear of

economic loss.”). But “there is nothing inherently wrongful

about the use of economic fear to obtain property.” United

States v. Sturm, 870 F.2d 769, 773 (1st Cir. 1989). “[T]he

fear of economic loss is a driving force of our economy that

plays an important role in many legitimate business

transactions.” Brokerage Concepts, Inc., 140 F.3d at 523. 

Courts must therefore differentiate between legitimate use of

economic fear—hard bargaining—and wrongful use of such

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CARPENTERS V. BUILDING TRADES 9

fear—extortion. See, e.g., George Lussier Enters., Inc. v.

Subaru of New England, Inc., 393 F.3d 36, 50 (1st Cir. 2004). 

“Distinguishing between hard bargaining and extortion can be

difficult.” Rennell, 635 F.3d at 1011.

For guidance, courts have turned to United States v.

Enmons, 410 U.S. 396 (1973). See, e.g., Rennell, 635 F.3d at

1011; Brokerage Concepts, Inc., 140 F.3d at 522. In Enmons,

the Court held that a defendant violates the Hobbs Act only

“where the obtaining of the property would itself be

‘wrongful’ because the alleged extortionist has no lawful

claim to that property. 410 U.S. at 400. Defending against an

accusation of extortion “based on a lawful claim to the

property obtained has been dubbed the ‘claim of right’

defense to extortion.” Brokerage Concepts, Inc., 140 F.3d at

522.

Where violence or violent threats are concerned, the claim

of right defense is strictly limited to employer-union labor

disputes. United States v. Daane, 475 F.3d 1114, 1119–20

(9th Cir. 2007); see also Brokerage Concepts, Inc., 140 F.3d

at 523 & n.21 (collecting cases). But courts have recognized

a claim of right defense where property is obtained through

the use of fear of economic loss, which is not “‘inherently’

wrongful.” Id. at 523; see also, e.g., United States v. Vigil,

523 F.3d 1258, 1262–63 (10th Cir. 2008). “Fear of economic

loss is not an inherently wrongful means; however, when

employed to achieve a wrongful purpose, its ‘use’ is

wrongful.” United States v. Clemente, 640 F.2d 1069, 1077

(2d Cir. 1981).

Thus, following Enmons, using fear of economic loss to

obtain personal payoffs or payments for “imposed, unwanted,

superfluous and fictitious services,” 410 U.S. at 400, may

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10 CARPENTERS V. BUILDING TRADES

well be extortionate. See, e.g., Vigil, 523 F.3d at 1265

(finding extortion where government official used economic

pressure to obtain personal payoff by imposing unwanted

employee who was unwilling to work). In either case, the

transaction used to obtain the property of another may be

illegitimate and the use of economic pressure may be

wrongful.

1

Even where the Push-Back-Carpenters Campaign

involved legitimate means, such as chartering competing

unions, it was still extortionate, according to the Carpenters,

because it was directed toward a wrongful end—coercing the

Carpenters into accepting “stale, outdated and

anticompetitive” services that “are unrequested, unwanted

and unnecessary.”

The Carpenters’ complaint does not plausibly allege that

the Building Trades demanded any sort of personal payoffs. 

See, e.g., Gregor, 716 F.2d at 1278–79; Clemente, 640 F.2d

at 1073. Instead, it contends that the Building Trades’

services are unwanted and would provide nothing of value to

the Carpenters. But none of the cases cited by the Carpenters

allows a Hobbs Act conviction based on unwanted or

subjectively valueless services in the context of an economic

pressure campaign.

A claim of right defense will not protect someone who

obtains the property of another in return for “imposed,

unwanted, superfluous and fictitious” services. Enmons,

410 U.S. at 400 (emphasis added) (citing United States v.

Kemble, 198 F.2d 889 (3d Cir. 1952)). Fear cannot be used

to force an “employer to pay wages for an additional worker

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CARPENTERS V. BUILDING TRADES 11

to do exactly what another worker [is] already being paid to

do.” Viacom Int’l, Inc. v. Icahn, 747 F. Supp. 205, 212

(S.D.N.Y. 1990) (citing Kemble, 198 F.2d 889).

So in Vigil, the case the Carpenters rely upon most

heavily, the Tenth Circuit affirmed a Hobbs Act extortion

conviction where the victim was required to “hire a specific

and unwanted individual at the price she sets.” 523 F.3d at

1265. Vigil, the New Mexico State Treasurer, insisted that

the victim hire an unnecessary employee because he, Vigil,

owed the potential employee’s husband money. Id. at 1261. 

Even though the prospective employee “did not want to work

for the compensation,” Vigil tried to coerce the victim into

paying her 40% of the gross income from a government

contract. See id. at 1262. Not only were her services

“unwanted” but “the compensation was intended as personal

payoff to [Vigil’s] former associate . . . rather than to achieve

a legitimate objective.” Id. at 1265. That was extortion,

according to the court.3 But, unlike Vigil, there is no

plausible allegation here that any Building Trades official

sought a “personal payoff,” or misappropriated a

governmental position.

More fundamentally, a claim of right defense cannot be

defeated by a contention that a particular transaction has no

“subjective” or “idiosyncratic” value. See, e.g., Viacom Int’l,

747 F. Supp. at 212 n.7 (noting that a forced transaction was

extortionate where “[n]othing of objective value transferred

to the plaintiff” (emphasis added)). Otherwise any plaintiff

could bring a civil RICO claim based on a bare allegation that

whatever service or good he received in return for his

property was of no subjective value. However little value the

 

3

 We need not and do not decide whether Vigil was correctly decided.

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12 CARPENTERS V. BUILDING TRADES

Carpenters thinks the Building Trades might provide, its

services are not the equivalent of Christopher Moltisanti’s

“no show” construction job. See The Sopranos: Episode 402,

No Show (HBO).

2

The Push-Back-Carpenters Campaign was also

extortionate, according to the Carpenters, because it used

wrongful means, such as filing frivolous regulatory claims, or

misusing confidential membership information. The

Carpenters’ argument relies on a frequently cited passage in

Viacom International, where the district court distinguished

hard bargaining from extortion by noting that, in the latter,

the victim “has a pre-existing entitlement to pursue his

business interests free of the fear he is quelling by receiving

value in return for transferring property to the defendant.” 

747 F. Supp. at 213. Because the Carpenters had a legal right

to be free from frivolous regulatory claims or misused

confidential information, it maintains, the Building Trades’

conduct was extortionate. Under that approach, any

economic pressure campaign that includes tortious conduct,

for example, would be a predicate offense to civil RICO,

regardless of whether the alleged tortfeasor demanded

payment to refrain from harming the victim.

As the Building Trades contends, use of economic

pressure is wrongful if the victim “had a pre-existing right to

the purported consideration being offered by the defendant as

an inducement to enter into the transaction.” If so, “there is

no legitimacy to the proposed transaction.” For example, in

Rennell, the defendant terminated a joint venture and gave his

former partner a take-it-or-nothing offer of 8% of what he

owed. 635 F.3d at 1009, 1013. Still, the defendant had a

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CARPENTERS V. BUILDING TRADES 13

claim of right to his former partner’s interest in the joint

venture: he had a right to terminate the venture agreement. 

Id. at 1012–13. And even if the defendant breached the

parties’ contracts or “acted in violation of the general duty of

good faith and fair dealing,” he did not forfeit his claim of

right defense. Id. at 1014. Such claims “should be pursued

through state-law theories of contract and, perhaps, tort—not

civil RICO.” Id.

Clearer still is Brokerage Concepts, Inc., where an HMO

required a pharmacy to use its subsidiary as a third-party

provider if the pharmacy wanted access to the HMO’s

provider network. 140 F.3d at 525. If the HMO had been

legally compelled to grant access to its network, the

pharmacy “would have had a legal entitlement to be a

member of the provider network and thus to be free of the

fear that it would be excluded from that network.” Id. at 526. 

But as the HMO was not legally compelled to grant access, its

use of economic pressure was not wrongful.

In both of those cases, the decisive question was whether

the victim had a pre-existing statutory or contractual right to

the consideration offered by the defendant in return for the

victim’s property. If so, the resulting transaction would have

been an illegitimate sham, and potentially a “wrongful” goal

to pursue.

But none of the cases cited by the Carpenters involves an

economic pressure campaign declared “wrongful” because it

happened to include, incidentally, tortious conduct or simple

breach of contract. For those cases to be on point, the

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14 CARPENTERS V. BUILDING TRADES

Carpenters would need to have a statutory or contractual right

to the services the Building Trades offers, which it does not.4

We recently held that a lawyer’s threat to a engage

potential witness to “do ‘whatever it is we need her to do,’

including impeding the investigation, lying to [an]

investigating Assistant U.S. Attorney . . . , and repeating

those lies to the grand jury” was “unlawful, and therefore

clearly wrongful under the circumstances.” United States v.

Villalobos, 748 F.3d 953, 955, 957 (9th Cir. 2014). 

Villalobos did not, however, hold that conduct must be

characterized as wrongful if it involves a breach of duty

derived from contract or tort law in the course of pursuing a

legitimate transaction. The proper remedy for such a breach

is a claim under state law. And the Carpenters’ complaint

does not allege a violation of the Hobbs Act through the use

of economic fear merely because the Building Trades might

have committed some tort or breached some contract as part

of the Push-Back-Carpenters Campaign.

4

In addition to being unsupported by precedent, the Carpenters’

argument invites us to declare extortionate under the Hobbs Act any

economic pressure campaign involving, no matter how incidentally, any

violation of state law. Such a declaration would transform innumerable

state crimes and torts into federal crimes. But the Supreme Court has

reminded us just recently that we should refrain from interpreting federal

statutes to “‘alter sensitive federal-state relationships’” by “convert[ing]

an astonishing amount of ‘traditionally local criminal conduct’ into ‘a

matter for federal enforcement.’” Bond v. United States, 134 S. Ct. 2077,

2091 (2014) (quoting United States v. Bass, 404 U.S. 336, at 349–50

(1971)).

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CARPENTERS V. BUILDING TRADES 15

B

By contrast, use of “actual or threatened force or violence

to obtain property” is “inherently wrongful” and not subject

to a claim of right defense. Daane, 475 F.3d at 1119–20

(quoting United States v. Sturm, 870 F.2d 769, 772–73 (1st

Cir. 1989)). The question, therefore, is whether the

Carpenters adequately alleged that the Building Trades, its

agents, or its coconspirators used violence or force against the

Carpenters or its members.

1

The Carpenters’ brief points to three factual allegations

that the Building Trades or a named defendant personally

threatened violence.

First, it asserts that “the Building Trades and Williams

publicly disseminated video footage of a violent attack o[n]

Carpenters’ members, accompanied by a written warning that

similar violence would ensue.” But the Building Trades did

not “publicly disseminate” the video. Instead, the Building

Trades disseminated a news release that mentioned a video

had “surfaced” on YouTube, but did not embed the video or

include a link. And the news release did not describe a

violent attack on the Carpenters, but a brawl that started when

one of the Carpenters “grab[bed] an Iron Worker.” The

release does not contain a warning of similar violence, just

the phrases “[c]raft unions are not taking this struggle lying

down,” and “the building trades unions turned out in force.”

Second, the Carpenters’ brief mentions materials on a

website that “direct and encourage violence.” Again, this

overstates the complaint, which describes one potentially

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16 CARPENTERS V. BUILDING TRADES

troubling statement in an interview posted on the website:

“Defendant Ayers called the Carpenters ‘a cancer that is

spreading’ that needed to be confronted by ‘the kind of

powerful response you would expect when a burglar is caught

stealing something of value.’”

Finally, the brief describes “speeches containing antiCarpenters threats and incitements . . . to take violent

actions.” Hill said the Building Trades would do “whatever

it takes to protect our members”; Ayers called for a “united”

stand, warned that Building Trades members were “being

threatened all around the nation,” and declared that “[t]his

problem didn’t start in St. Louis, but by God it needs to end

in St. Louis”; and Williams noted a “line in the sand” and

explained “[a]fter today, there’s no going back.” Perhaps

recognizing that none of these statements sounds like a call

for violence, the complaint reiterates that each, “[i]n the

context of the past violence, . . . mean[t] to threaten and use

physical violence and force.”

In some contexts, such statements could constitute threats

of violence actionable under civil RICO5—the Carpenters’

brief cites no remotely comparable case, see Daane, 475 F.3d

at 1116–19—but not plausibly in this context. Prior to the

statements, the complaint alleges precisely one act of

vandalism by unnamed “Defendants’ agents,” and two

emailed “veiled death threats” against a Carpenters’ officer,

5 The Building Trades notes that holding such comments actionable

under civil RICO would raise significant First Amendment concerns. See

NAACP v. Claiborne Hardware Co., 458 U.S. 886, 900 n.28, 928 (1982)

(holding that Charles Evers’s statement at a rally, “that any ‘uncle toms’

who broke the boycott would ‘have their necks broken’ by their own

people,” was protected speech).

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CARPENTERS V. BUILDING TRADES 17

without specifying how the individuals named as Defendants’

“agents” were connected to the Building Trades. The

complaint’s interpretation of the emails relies, in turn, on

“prior and contemporaneous violent vandalism,” but includes

only the one example—anonymous vandalism not connected

to the Building Trades.

The Carpenters’ complaint does not plausibly allege that

any defendant used threats of violence to obtain the

Carpenters’ property.

2

The Carpenters’ complaint also ties the Building Trades

to threats and violence by non-parties, whom it labels

coconspirators with and agents of the Building Trades.

Even in a complaint, formulaic recitations and

“conclusory statement[s]” will not suffice to allege

conspiracy plausibly. Kendall v. Visa U.S.A., Inc., 518 F.3d

1042, 1048 (9th Cir. 2008). A complaint must “answer the

basic questions: who, did what, to whom (or with whom),

where, and when?” Id. Bare assertions of “agreement,” id.

at 1047 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.

544, 557 (2007)), or identifications of particular persons as

“coconspirators,” id. at 1050, will not suffice.

The Carpenters’ complaint recites several “actions”

“undertaken . . . as part of, and in furtherance of, the unlawful

conspiracy,” but identifies the actors, if at all, merely as

“Defendants’ agents.” As to the actors who are actually

named, the complaint simply refers to them as “coconspirators,” who had “agreed to act, and w[ere] acting, on

behalf of the Defendants.” No detailed facts are alleged. 

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18 CARPENTERS V. BUILDING TRADES

Such rote recitations do not render plausible that the nonparties conspired with the Building Trades or agreed with the

Building Trades to commit or threaten violence.6

Despite the Carpenters’ thorough briefing, its allegations

of agency boil down to three facts: First, the perpetrators of

various violent actions, most of whom are unnamed, are

labeled “Defendants’ agents.” But a mere label cannot

demonstrate an agency relationship. Second, subordinate

union members followed Defendants’ directions by engaging

in threats and violence. But those “directions,” described

above, simply did not amount to instructions to commit

violence. And in any case, the violent acts either predate the

Defendants’ statements, or postdate them by over a year. 

Third, the Building Trades blessed and encouraged the

violence by disseminating a YouTube video. But, as

described above, the Building Trades’ news release hardly

amounts to blessing and encouraging violence.7

The Carpenters’ formulaic and conclusory allegations of

conspiracy and agency do not suggest plausibly that the

6 Terrence O’Sullivan, who made some of the most troubling statements

in the record—asking the Unity Rally audience “if anyone had any

rope?”—is identified in the complaint as a member of the Building

Trades’ Governing Board of Presidents. Even if he were a coconspirator,

holding his statements actionable would raise First Amendment concerns. 

See supra, note 5.

7 The Carpenters’ RICO case statement alleges that Mark Keffler, during

a phone call with a Carpenters representative, threatened that “a lot of

pissed off people out there . . . will start killing [Carpenters] soon.” But

Keffler is merely labeled “Defendants’ agent,” with no supporting factual

assertions concerning his connection, if any, to the defendants.

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CARPENTERS V. BUILDING TRADES 19

Building Trades or any named defendant attempted to acquire

the Carpenters’ property through violence or threats.

C

Even if the Carpenters failed to allege extortion under the

Hobbs Act, it argues that it has alleged “RICO predicate

offenses under twelve States’ extortion statutes.” For

example, some states do not provide a claim of right defense

to the use of fear to obtain a victim’s property, and others

prohibit threats of reputational harm. Boiled down, the

Carpenters’ brief suggests that any conduct criminalized

under any state’s “extortion” statute is a proper RICO

predicate offense.

This argument repeats the error of an argument rejected

long ago in United States v. Nardello, 393 U.S. 286 (1969),

which concerned the meaning of “extortion” in the Travel

Act, 18 U.S.C. § 1952. Nardello argued that the Act

encompassed only conduct labeled “extortion” by a state

statute, but not identical conduct labeled “blackmail,” for

example. Nardello, 393 U.S. at 293–94. Rejecting the

argument that the meaning of extortion was tethered to the

state statute, the Court held that the Act referred to conduct

“generically classified as extortionate,” that is to say,

“obtaining something of value from another with his consent

induced by the wrongful use of force, fear, or threats.” Id. at

290.

The same generic definition of extortion applies under

§ 1961(1)(A). Scheidler v. Nat’l Org. for Women, Inc.,

537 U.S. 393, 409 (2003). The Carpenters would expand that

definition to include any conduct labeled “extortion” under

any state statute. The district court correctly rejected that

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20 CARPENTERS V. BUILDING TRADES

argument. Even if a state labels particular conduct extortion,

“it cannot qualify as a predicate offense for a RICO suit

unless it is capable of being generically classified as

extortionate.” Wilkie v. Robbins, 551 U.S. 537, 567 (2007)

(internal quotation marks and citation omitted). Whether

under the Hobbs Act or under the generic definition, use of

fear must be “wrongful” to be extortionate.8

In addition, the Carpenters’ brief contends that the

“generic definition of extortion, in contrast to the Hobbs Act,

does not require a showing that the defendant lacked a claim

of right to the property in question.” It labels the existence of

a claim of right an “affirmative defense” and cites United

States v. Velasquez-Bosque for the proposition that “[t]he

availability of an affirmative defense is not relevant to the

categorical analysis.” 601 F.3d 955, 963 (9th Cir. 2010)

(declaring irrelevant that California’s carjacking statute does

not permit a claim of right defense, whereas generic robbery

does). But whether the defendant had a legitimate claim to

the property obtained by use of economic fear, although

called a “claim of right” defense, is not actually an

“affirmative defense” in this context. Instead, it is an

interpretation of what “wrongful use of fear”—an element of

both Hobbs Act and generic extortion—means. See, e.g.,

Brokerage Concepts, Inc., 140 F.3d at 523. Thus, even if a

state criminalized the use of economic fear to achieve a

8 Regardless of whether such reasoning defies the canon against

superfluity, as the Carpenters’ brief asserts, it is compelled by Supreme

Court precedent. And, moreover, the rule against redundancy does not

require the Carpenters’ conclusion. If every state were to adopt the Hobbs

Act wholesale as its law criminalizing extortion, Congress’s choice of the

disjunctive would become “superfluous” by necessity.

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CARPENTERS V. BUILDING TRADES 21

legitimate end,9the state offense would not equal generic

extortion.

That leaves, as possible allegations of generic extortion in

violation of state law, the Building Trades’ alleged threats of

personal reputational harm to the Carpenters. See Nardello,

393 U.S. at 295–96 (attempt to obtain money by threatening

to “expose alleged homosexual conduct” fit within generic

extortion). The Carpenters’ brief does not cite any particular

portion of the record where the Building Trades threatened

and inflicted reputational harm, and our review of the

Carpenters’ complaint does not reveal any such plausible

allegations. See Levitt, 2014 WL 4290615, at *9 (noting that

a “claim of reputational harm” must be connected with “a

specific allegation of wrongful conduct”).

III

Nineteen Carpenters’ members allege that officers Ault,

Williams, and Molnaa violated the LMRDA “by directing the

unlawful suspension or expulsion of the Carpenters and the

Individual Plaintiffs through the revocation of the Solidarity

Agreements” without written charges or a hearing. On

9 None of the cases cited by the Carpenters concern extortion by fear of

economic loss. All concern fear of threatened violence, for which there

is no claim of right defense, except in a specific labor context, under the

Hobbs Act. See Gomez v. Garcia, 81 F.3d 95, 96 (9th Cir. 1996) (holding

no claim of right defense for threat with a gun); Rael v. Sullivan, 918 F.2d

874, 875 (10th Cir. 1990) (holding no claim of right defense for threat to

“kick [victim’s] ass”); State v. Logan, 29 So. 336 (La. 1901) (holding no

claim of right defense for threat to kill); Pierce v. Commonwealth, 138

S.E. 2d 28, 31–32 (Va. 1964) (holding no claim of right defense for threat

from loaded pistol).

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22 CARPENTERS V. BUILDING TRADES

appeal, they argue that such automatic expulsions are

unlawful.

Under the heading “Safeguards against improper

disciplinary action,” LMRDA § 101(a)(5) provides that:

No member of any labor organization may be

fined, suspended, expelled, or otherwise

disciplined except for nonpayment of dues by

such organization or by any officer thereof

unless such member has been (A) served with

written specific charges; (B) given a

reasonable time to prepare his defense;

(C) afforded a full and fair hearing.

29 U.S.C. § 411(a)(5) (emphasis added).

The Carpenters’ members were not expelled from the

Metal Trades as a disciplinary action. See MerriamWebster’s Collegiate Dictionary 356 (11th ed. 2005)

(defining “to discipline” as “to punish or penalize for the sake

of discipline”); Black’s Law Dictionary 531 (9th ed. 2009)

(defining “discipline” as “[p]unishment intended to correct or

instruct; esp., a sanction or penalty imposed after an official

finding of misconduct”). Both the text and immediate context

of section 101(a)(5) suggest that automatic expulsion without

written charges and a full hearing is only a violation where

the expulsion is disciplinary. First, the phrase “otherwise

disciplined” limits the reach of the first three verbs—“fined,

suspended, expelled”—to disciplinary actions, a limitation

that is also implied by the heading. See, e.g., Ram v. INS,

243 F.3d 510, 514 & n.3 (9th Cir. 2001) (noting that a

section’s heading may be useful in interpreting its meaning). 

Second, such procedural protections make little sense where

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CARPENTERS V. BUILDING TRADES 23

an expulsion is not a disciplinary action, but the result of a

dissolved affiliation agreement between competing labor

unions.

Furthermore, the cases cited by the Carpenters concern

disciplinary expulsions and are, therefore, not on point. See,

e.g., Myers v. Affiliated Prop. Craftsmen Local No. 44,

667 F.2d 817, 821 (9th Cir. 1982). If the Carpenters’

members were correct under the statute, then either

termination of such affiliation agreements would become

practically impossible or the “full and fair hearing[s]”

guaranteed by the statute would become a farce. Neither

result is required by the statute or the case law.

IV

Although the Carpenters did not request leave to amend

its complaint, it contends on appeal that the district court

abused its discretion by denying such leave.

Whether to grant leave to amend is committed to the

sound discretion of the district court. Foman v. Davis,

371 U.S. 178, 182 (1962). “[W]e first look,” therefore, “to

whether the trial court identified and applied the correct legal

rule . . . . Second, we look to whether the trial court’s

resolution . . . resulted from a factual finding that was

illogical, implausible, or without support in inferences that

may be drawn from the facts in the record.” United States v.

Hinkson, 585 F.3d 1247, 1263 (9th Cir. 2009) (en banc).

The district court identified and applied the correct legal

rule. It recognized our repeated admonition that “a district

court should grant leave to amend even if no request to

amend the pleading was made, unless it determines that the

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24 CARPENTERS V. BUILDING TRADES

pleading could not possibly be cured by the allegation of

other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir.

2000) (en banc) (quoting Doe v. United States, 58 F.3d 494,

497 (9th Cir. 1995)). And it properly cited the five factors to

be considered “in assessing the propriety of leave to

amend—bad faith, undue delay, prejudice to the opposing

party, futility of amendment, and whether the plaintiff has

previously amended the complaint.” United States v.

Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011). 

Nonetheless, the court declined to grant leave to amend as

futile. Specifically, it noted the exhaustive length of the

Carpenters’ complaint and explained that it could not

“conceive of any new facts that could possibly cure the

pleading.”

We are unable to say that the district court’s finding is

illogical, implausible, or without support in the record. In

fact, it is quite reasonable to suppose that the Carpenters’

“sprawling 246-page” complaint contained all of the key facts

supporting its claims against the Building Trades. The

Carpenters’ brief suggests it could have cured the pleading’s

failure to allege an agency relationship between the Building

Trades and those individuals who committed violent and

threatening acts. But neither the brief nor counsel’s oral

argument has suggested specific facts that might have cured

such deficiency.

V

We conclude that the Carpenters’ complaint fails to state

a claim under civil RICO or the LMRDA against the Building

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CARPENTERS V. BUILDING TRADES 25

Trades, and that the district court did not abuse its discretion

in denying leave to amend.

AFFIRMED.

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