Trollinger v. Tyson Foods, Inc.

• Decision Date: 03 June 2004
• Docket Number: No. 02-6020.,02-6020.
• Citation: 370 F.3d 602
• Parties: Birda TROLLINGER; Robert Martinez; Tabetha Eddings and Doris Jewell, Plaintiffs-Appellants, v. TYSON FOODS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

370 F.3d 602

Birda TROLLINGER; Robert Martinez; Tabetha Eddings and Doris Jewell, Plaintiffs-Appellants, v. TYSON FOODS, INC., Defendant-Appellee.

No. 02-6020.

United States Court of Appeals, Sixth Circuit.

Argued December 11, 2003.

Decided and Filed June 3, 2004.

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Howard W. Foster (argued and briefed), Johnson & Bell, John D. McMahan, McMahan Law Firm, Chattanooga, TN, Steve W. Berman, Hagens & Berman, Seattle, WA, for Plaintiff-Appellant.

Virginia A. Seitz (argued and briefed), Mark D. Hopson, Griffith L. Green, Sidley, Austin, Brown & Wood, Washington, DC, Roger W. Dickson, Christopher H. Steger, Miller & Martin, Chattanooga, TN, for Appellee.

Before BATCHELDER and SUTTON, Circuit Judges; BELL, Chief District Judge.^*

OPINION

SUTTON, Circuit Judge.

At issue in this case is an application of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq., to a wage-related dispute between Tyson Foods, Inc. and four of its employees. On behalf of themselves and a putative class of similarly-situated workers, the four employees allege that Tyson violated RICO by engaging in a scheme with several employment agencies to depress the wages of Tyson's hourly employees by hiring illegal immigrants.

Soon after the action was filed, Tyson moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction, arguing that the National Labor Relations Act preempts the employees' RICO claims under the labor-preemption doctrine articulated in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). Tyson also moved to dismiss the complaint under Rule 12(b)(6) for failure to state a claim, arguing (1) that plaintiffs lack statutory standing under RICO to pursue this case because any injury they suffered was derivative of an injury to their union, which served as plaintiffs' exclusive representative in negotiating wages, and (2) that Tyson's alleged misconduct did not proximately cause an injury to plaintiffs. The district court granted the Rule 12(b)(6) motion, denied the Rule 12(b)(1) motion, and dismissed the case with prejudice. Because we reject the application of Garmon preemption in this context and because we cannot say at this early stage in the case that the allegations in the complaint are insufficient as a matter of law to establish statutory standing, we reverse the district court's judgment.

I.

One of the nation's largest poultry processors, Tyson Foods, Inc. employs more than 120,000 workers. Tyson's headquarters are in Springdale, Arkansas, and it has processing plants throughout the country. One of Tyson's plants is located in Shelbyville, Tennessee, a town of 15,000 people in middle Tennessee, approximately 50 miles southeast of Nashville.

In December 2001, a federal grand jury returned a 36-count indictment against Tyson and several individuals. In general, the indictment charged Tyson and the individuals with conspiring to smuggle illegal aliens into the United States across its southern border and employing them at 15 of Tyson's processing plants in nine different States. In addition to a conspiracy to violate the immigration laws in violation of 18 U.S.C. § 371, the indictment charged the defendants with causing illegal aliens to be brought into the country, in violation of 8 U.S.C. § 1324(a)(2)(B)(ii) and 18 U.S.C. § 2; causing illegal aliens to be transported, in violation of 8 U.S.C. § 1324(a)(1)(A)(ii) and (a)(1)(B)(i), and 18 U.S.C. § 2; causing the use of illegal documents, in violation of 18 U.S.C. §§ 1546(b) and 2; and causing the possession of fraudulent documents by illegal aliens, in violation of 18 U.S.C. §§ 1546(a) and 2.

In April 2002, soon after the indictment was filed, Birda Trollinger, Robert Martinez, Tabetha Eddings and Doris Jewell — former hourly workers at Tyson's Shelbyville facility who were legally employed by Tyson — filed this civil RICO action against Tyson based on some of the same allegedly illegal activities underlying the criminal indictment. The amended complaint alleges that Tyson engaged in a scheme to depress the wages paid to its hourly employees by knowingly hiring undocumented illegal immigrants who were willing to work for wages well below those paid in labor markets composed of only United States citizens. Assisting Tyson in this scheme was a network of recruiters and temporary employment agencies that would transport the illegal workers to the United States, obtain housing for them and provide them with false identification documents. As a result of the scheme, the complaint alleges, over half of the workers at 15 of Tyson's facilities are illegal immigrants, allowing Tyson to pay its legal employees wages substantially below the wage level paid by other employers of unskilled labor in the areas surrounding the 15 facilities. Plaintiffs seek injunctive relief along with treble damages.

On May 24, 2002, Tyson moved to dismiss the complaint on two grounds, each hinging in part on the role of a union in negotiating employee wages. Tyson first moved to dismiss under Rule 12(b)(6) for failure to state a claim, arguing that the employees could not satisfy RICO's statutory-standing or proximate-cause requirements, see Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992), because the union negotiated and agreed to the wage scale contained in the collective bargaining agreement and because this intervening factor made any damages to the employees speculative. If anyone has a RICO claim, Tyson argued, it would be the union, not the employees. Tyson also moved to dismiss the complaint under Rule 12(b)(1) for lack of subject-matter jurisdiction, arguing that the employees' RICO claims fall within the primary (and exclusive) jurisdiction of the National Labor Relations Board under San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). Attached to Tyson's Rule 12(b)(1) motion were two collective bargaining agreements between Tyson and the Retail, Wholesale and Department Store Union, AFL-CIO establishing the terms and conditions of employment for Tyson's hourly workers at the Shelbyville plant.

On July 16, 2002, the district court granted Tyson's Rule 12(b)(6) motion, denied the Rule 12(b)(1) motion and dismissed the action with prejudice. Plaintiffs failed to state a claim, the district court held, because they could not establish "a `direct relation between the injury asserted and the injurious conduct alleged.'" D. Ct. Op. at 5 (quoting Holmes, 503 U.S. at 268, 112 S.Ct. 1311). "As the wage rates were the product of collective bargaining," the court explained, "plaintiffs cannot demonstrate that those rates were ultimately depressed by the presence of alleged illegal aliens in the work force." Id. at 6. The court further reasoned that "plaintiffs' wages could have been affected by [the wages] other employers paid, the availability of workers, the profitability of the defendant's businesses, and other factors that influence any labor market," and thus "the conclusion that Tyson's hiring of alleged illegal aliens depressed the plaintiffs' wages would require sheer speculation." Id.

Having granted the Rule 12(b)(6) motion, the court denied the Rule 12(b)(1) motion. In its view, the question whether the National Labor Relations Act preempted plaintiffs' RICO claims was "somewhat murky" and the court was "not prepared to say at [that] time that it lack[ed] subject matter jurisdiction." D. Ct. Op. at 7.

In dismissing plaintiffs' complaint for failure to state a claim, the district court acknowledged that it had relied on the existence of the union and the collective bargaining agreements negotiated by the union, even though plaintiffs had not specifically mentioned these facts in their complaint. Yet this omission posed no obstacle to dismissing the case, the court held, because the collective bargaining agreements were "properly raised" and "considered" in connection with Tyson's Rule 12(b)(1) motion and because "[t]heir existence may be judicially noticed" in connection with Tyson's Rule 12(b)(6) motion. D. Ct. Op. at 7.

Plaintiffs appeal the judgment, which we review de novo. See Rossborough Mfg. Co. v. Trimble, 301 F.3d 482, 489 (6th Cir.2002).

II.

We begin, as we must, by asking whether the district court had jurisdiction to hear this case. See Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 101, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Plaintiffs allege that Tyson violated a federal law (RICO), which customarily gives rise to federal-question jurisdiction under 28 U.S.C. § 1331. Invoking the doctrine of "Garmon preemption," however, Tyson argues that the National Labor Relations Act "preempts" plaintiffs' wage-related RICO claims and that as a result the district court lacked subject-matter jurisdiction to hear them. We disagree.

The use of the term "preemption" in this setting, as an initial observation, has a dissonant ring to it. To say that federal courts lack jurisdiction to hear a claim under one federal act (RICO) because it is "preempted" by another federal act (the National Labor Relations Act) is not a natural use of the term "preemption." As federal courts generally use the term, preemption does not describe the effect of one federal law upon another; it refers to the supremacy of federal law over state law when Congress, acting within its enumerated powers, intends one to displace the other. See U.S. Const. art. VI, cl. 2 ("[T]he Laws of the United States ... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws or any State to the Contrary notwithstanding."). Preemption, moreover, does not normally concern the subject-matter jurisdiction of a court to hear a claim, which is what is relevant to the resolution of a...