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Mohawk Industries v. Williams - Wow, what happened?
June 05, 2006 by Ross Runkel at LawMemo
In US Supreme Court arguments in April, the big issue was whether a corporation (Mohawk, the employer) could be part of a RICO "enterprise" known as an association-in-fact enterprise.
Today the Court announced that it would not decide that question. Mohawk Industries v. Williams (US Supreme Court 06/05/2006).
Instead, the Court sent the case back to the 11th Circuit for reconsideration in light of Anza v. Ideal Steel Supply Corp (US Supreme Court 06/05/2006).
In the Mohawk case, Williams and other hourly employees alleged that their employer's violation of the immigration laws allowed the employer to depress wages for its legal hourly employees, in violation of the federal RICO statute.
In the Anza case, the Supreme Court held that a RICO plaintiff alleging mail fraud must prove that the alleged violation was the proximate cause of the plaintiff's injury, which requires "some direct relation between the injury asserted and the injurious conduct alleged."
Ideal Steel Supply Corp and National Steel Supply were competitors. Ideal claimed that National failed to charge sales tax to cash-paying customers and filed false tax returns by mail, creating a chain of events that caused a decrease in Ideal's business and market share. The Supreme Court held that a RICO plaintiff alleging mail fraud must prove that the alleged violation was the proximate cause of the plaintiff's injury, which requires "some direct relation between the injury asserted and the injurious conduct alleged."
If the Anza case is applied to the facts of the Mohawk case, it would seem that plaintiffs have to prove that Mohawk's alleged violation of the immigration laws was the proximate cause of a reduction in wages for Mohawk's employees.
OK, that's fine, because the RICO statute clearly requires that.
What I fail to understand is why the Supreme Court remanded on that specific issue, when the arguments (both oral arguments and in briefs) did not deal with it.
I think I see why the Court did not want to decide the issue of whether a corporation can be part of an "association-in-fact" enterprise. After all, it wasn't argued in the 11th Circuit, and was virtually conceded in the trial court. The Supreme Court doesn't like to spend its time resolving such issues.
OK, lawyers, dust off your "proximate cause" notes from law school.
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