Supreme Court Hears Mohawk/RICO Case

Washington, DC, April 27, 2006--Listening yesterday to early arguments in a case that could profoundly affect illegal immigration as well as corporate legal accountability, the U.S. Supreme Court began weighing the Mohawk Industries case. This class action brought by Mohawk employees alleges that Mohawk conspired with an outside personnel firm to hire illegal immigrants, and that such an arrangement rightly falls under the Racketeer Influenced and Corrupt Organizations (RICO) Act. RICO was specifically amended by Congress in 1996 to include hiring illegal immigrants, according to the New York Times. The company argued before the Court that RICO statutes were inappropriate in this case. According to several news service, extending civil racketeering lawsuits to corporations could open the way for costly lawsuits because RICO penalties are more severe than customary civil law penalties. News sources have said that several justices, including Chief Justice John Roberts Jr., have already indicated that they are not inclined to apply RICO laws to corporations. Dow Jones news quoted Mohawk attorney Carter Phillips saying, "There are enormous penalties that are imposed. Certainly there is no reason to take those terms and 'Rico-ize' corporate activity." Chief Justice John Roberts Jr., is quoted telling plaintiff's attorney Howard Foster: "I'm trying to give you a chance to explain why this looks like RICO rather than just a criminal conspiracy case." Justice Antonin Scalia is reported to have said that the RICO laws are somewhat ambiguous, and that it may be too early in the process for the high court to be hearing this matter; the latter sentiment was reportedly shared by Justice Ruth Bader Ginsburg. The U.S. government argued for the broader reading of RICO laws, saying, in essence, that otherwise corporations can simply hire outside companies to take legally questionable actions on the corporation's behalf, without any legal consequences to the corporation. This time around, the Supreme Court will decide whether the employee lawsuit can continue in federal court, as the 11th U.S. Circuit Court of Appeals in Atlanta ruled. In court filings, Mohawk employees said the company hired workers "that it knew or had reason to know were not authorized to work in the U.S," by hiring individuals who had false worker documentation. The lawsuit also alleges Mohawk recruited undocumented aliens. The case is Mohawk Industries v. Williams, 05-465. The High Court is expected to hand down its decision by next July. For more see: http://www.supremecourtus.gov/