Court Opinion

ID: 9483881
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:33:58.309204+00
Date Added: 2024-06-11T17:49:53.258315
License: Public Domain

HEANEY, Senior Circuit Judge,
dissenting:
Today the majority undermines the very policy behind the enactment of the RICO statutes. It is now the law of this circuit that an employee in a state such as Missouri has no protection should he or she choose to expose criminal activity on the part of his or her employer. As I cannot join in this evisceration of Congress’s purpose in enacting this legislation, I respectfully dissent.
I agree with the majority that the circuits have split on the question of standing to allege conspiracy under RICO, that Congress has expressly prohibited conspiracy to engage in racketeering, and that the Supreme Court and Congress have mandated that RICO be read broadly to achieve its remedial purposes. Supra at 387. Having acknowledged the proper context in which to construe RICO’s provisions, the majority then determines that, as the Supreme Court has found a need to limit the scope of RICO in an entirely different context, we should likewise do so here.
Though I agree that RICO has been used more widely than Congress contemplated and than is desirable, that sentiment does not support the holding that, as a matter of law, an employee fired in furtherance of a conspiracy to commit one of the prohibited predicate acts has no standing to sue under RICO. Rather, the approach taken by the Seventh Circuit in Schiffels best accommodates both the need to limit RICO standing and the purposes that underlie the RICO statute.
In Schiffels, the plaintiff was fired for blowing the whistle on her superior’s scheme to defraud the two mutual funds that were under his management. The district court dismissed her RICO claim “because she was not injured by any predicate act of racketeering.” Schiffels, 978 F.2d at 347. The court of appeals reversed, holding that when an employee is injured by an act in furtherance of a conspiracy prohibited by RICO, that employee has standing to sue under section 1962(d). The court described that case as one
in which an employee is fired to prevent the employee from causing the conspiracy to unravel by disclosing the scheme ... [and in which] the employee has been directly injured by the defendant’s RICO violation. Just as important, the act causing the injury has been committed to further the conspiracy and is directly related to the conspiracy’s goals. This brings the injured employee well within the zone of interests RICO is meant to protect. After all, RICO, which grants standing to anyone injured in his business or property “by reason of” a RICO violation, prohibits conspiracies, which do not require the commission of any predicate offenses.
Id. at 351.
The.Schiffels court then found that the pleadings in that case failed properly to allege harm, to the plaintiff from actions that furthered the conspiracy, but remanded to allow amendment of the pleadings. It is unnecessary for this court to reach that question prior to remand. Bowman may not be able to prove that his firing took place in furtherance of a conspiracy to commit fraud, but he should be given that opportunity. A contrary holding assures employers that when troublesome employees threaten to disclose the commission of RICO violations, those employees can be threatened with termination to keep such violations hidden from public view. Such a reading of the RICO statute hardly complies with the Supreme Court’s and Congress’s mandate that RICO “ ‘be liberally construed to effectuate its remedial purposes.’ ” Sedima, 473 U.S. at 498, 105 S.Ct. at 3286 (quoting Pub.L. 91-452, § 904(a), 84 Stat. 947). Rather, the majority’s holding ensures that fewer instances of fraud will be uncovered and that Congress’s intent in enacting the RICO statutes will be frustrated.