Source: http://openjurist.org/985/f2d/383
Timestamp: 2015-08-05 03:04:40
Document Index: 475085707

Matched Legal Cases: ['§ 1964', '§ 1962', '§ 1964', '§ 1962', '§ 1962', '§ 1964', '§ 1962', '§ 1962', '§ 1964', '§ 1962', '§ 1962']

985 F2d 383 Bowman v. Western Auto Supply Company | OpenJurist
985 F. 2d 383 - Bowman v. Western Auto Supply Company Home
985 F2d 383 Bowman v. Western Auto Supply Company 985 F.2d 383
61 USLW 2495, 125 Lab.Cas. P 10,643, RICOBus.Disp.Guide 8210,8 IER Cases 566
Richard N. BOWMAN, Appellee,v.WESTERN AUTO SUPPLY COMPANY and John Leach, Appellants.
Submitted Sept. 18, 1992.Decided Jan. 29, 1993.Rehearing and Rehearing En BancDenied March 30, 1993.
Dennis D. Palmer, Kansas City, MO, argued (Dennis D. Palmer, William E. Quirk and Bradley D. Holmstrom, on the brief), for appellants.
David Robert Morris, Overland Park, KS (David R. Morris and Lisa Noel Gentleman on the brief), for appellees.
Richard Bowman ("Bowman") filed a suit against Western Auto Supply Company and John Leach (collectively "Western Auto") pursuant to the civil action provision of the Racketeer Influenced and Corrupt Organizations Act (RICO), alleging that he was discharged from his employment for speaking out against Western Auto's alleged RICO violations. Western Auto moved to dismiss on the grounds that Bowman lacked standing to bring a civil RICO suit. The district court denied Western Auto's motion and certified the issue for appeal. We now reverse.
Richard Bowman was an employee of Western Auto Supply Company when he allegedly discovered that the company was "double billing" its merchandise suppliers by charging them for advertising and promotional services they never received. On August 22, 1986, Bowman was discharged from his job. On August 20, 1990, he filed this suit, seeking recovery pursuant to RICO's civil action provision contained in 18 U.S.C. § 1964(c). He contended that his discharge came because he protested, spoke out against, and criticized his employer's allegedly fraudulent scheme. Specifically, he alleged that he was injured as a result of Western Auto's violations of 18 U.S.C. § 1962(a), (b), (c), and (d).
Western Auto filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), taking the position that Bowman lacked standing to bring a § 1964(c) civil RICO suit because any injuries he sustained as a result of being discharged from his employment were not a result of RICO activity. The district court denied the motion but granted Western Auto's motion to certify the issue for interlocutory appeal. 773 F.Supp. 174. On appeal, Bowman contends that he has standing to sue based on injuries arising from both alleged substantive violations of RICO as delineated in 18 U.S.C. § 1962(a), (b), and (c), and an alleged conspiracy to violate RICO as prohibited in 18 U.S.C. § 1962(d).
We review de novo the district court's denial of Western Auto's motion to dismiss. See Klett v. Pim, 965 F.2d 587, 589 (8th Cir.1992) ("The complaint must reveal an insuperable bar to relief to warrant a Rule 12(b)(6) dismissal," and such a dismissal is subject to de novo review.).
RICO contains a civil enforcement scheme that permits private individuals harmed by criminal RICO activity to recover civil damages. The Act provides as follows:
18 U.S.C. § 1964(c). This provision confers standing on any individual who has experienced injury to his or her business or property that occurred "by reason of" a RICO violation.1 At issue in this appeal is whether Bowman's alleged injuries resulted from a RICO violation such that he has standing to bring a suit for civil damages against his employer.
Although this court has not before been presented with this issue, the circuit courts that have are in agreement that an employee discharged for criticizing or refusing to participate in the employer's racketeering activity lacks standing to bring a civil suit when the underlying violation is based on section 1962(a)-(c) of RICO. See Kramer v. Bachan Aerospace Corp., 912 F.2d 151 (6th Cir.1990) (Because his injuries were a result of being fired, not of RICO violation, plaintiff discharged after reporting employer's RICO scheme lacked standing to bring suit.); Reddy v. Litton Industries, Inc., 912 F.2d 291 (9th Cir.1990), cert. denied, --- U.S. ----, 112 S.Ct. 332, 116 L.Ed.2d 272 (1991) (Employee discharged for refusing to participate in cover-up of illegal scheme lacked standing to recover under § 1962(a) and (c).); O'Malley v. O'Neill, 887 F.2d 1557 (11th Cir.1989), cert. denied, 496 U.S. 926, 110 S.Ct. 2620, 110 L.Ed.2d 641 (1990) (Plaintiffs lacked standing to bring civil RICO action because their injuries were caused by the decision to fire them, not by RICO activity.); Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162 (3d Cir.1989) (Plaintiff discharged to prevent her from reporting fraudulent scheme lacked standing to pursue civil RICO suit for alleged violations of § 1962(a) and (c) because her injury was not a result of a predicate act.); Burdick v. American Express Co., 865 F.2d 527 (2d Cir.1989) (per curiam) (Plaintiff who complained of and refused to participate in corrupt activity was injured as a result of employer's decision to fire him, not as a result of predicate RICO act, and thus lacked standing.); Cullom v. Hibernia National Bank, 859 F.2d 1211 (5th Cir.1988) (Plaintiff discharged for refusing to participate in fraudulent activity lacked standing to recover under civil RICO, as injury resulting from discharge did not flow from RICO predicate acts.); Nodine v. Textron, Inc., 819 F.2d 347 (1st Cir.1987) (Plaintiff fired for reporting employer's illegal scheme lacked standing to bring civil RICO suit).
We agree with the weight of the authority. The Supreme Court has held that in order for a litigant to establish standing to bring a suit under § 1964(c) of RICO, the injury alleged must be a result of a violation of § 1962. Sedima S.P.R.L. v. ImRex Co., 473 U.S. 479, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985). In that opinion, the Court stated as follows:
A violation of § 1962(c) ... requires (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.... [T]he plaintiff only has standing if, and can only recover to the extent that, he