Walters v. McMahen

• Decision Date: 05 July 2012
• Docket Number: No. 11–1796.,11–1796.
• Parties: Bizzie WALTERS; Annie Hodge; Annette Baldwin; Katrena Cooper; Barbara Allen, on behalf of themselves and all those similarly situated, Plaintiffs–Appellants, v. Todd McMAHEN; Tol Dozier; Nancy Hollis; Alberto Asyn; Richard Jamison; Jim Hungate; Amparo Herrera; Maria Salizar Gonzalez; Jeff Beckman; Jerry Layne; David Castro; Angie Wood; Julio Unzueta; Elana Fernandez; Jim Booth; Terry Ashby; Jeanette Cox; Leslie Cox; Randy Brown; Efrem Andrews; Gilberto Fernando Rivera; Bennie Gray; Charlie Carpenter; Bel Holden; Rob Heflin; Gary Miller; Emperatriz Paola Beatty; Sandra Herrera; Gustavo Gus Paez, Defendants–Appellees, and Elana Asyn, Defendant, Perdue Farms Incorporated, Movant.
• Court: U.S. Court of Appeals — Fourth Circuit

684 F.3d 435

Bizzie WALTERS; Annie Hodge; Annette Baldwin; Katrena Cooper; Barbara Allen, on behalf of themselves and all those similarly situated, Plaintiffs–Appellants,

v.Todd McMAHEN; Tol Dozier; Nancy Hollis; Alberto Asyn; Richard Jamison; Jim Hungate; Amparo Herrera; Maria Salizar Gonzalez; Jeff Beckman; Jerry Layne; David Castro; Angie Wood; Julio Unzueta; Elana Fernandez; Jim Booth; Terry Ashby; Jeanette Cox; Leslie Cox; Randy Brown; Efrem Andrews; Gilberto Fernando Rivera; Bennie Gray; Charlie Carpenter; Bel Holden; Rob Heflin; Gary Miller; Emperatriz Paola Beatty; Sandra Herrera; Gustavo Gus Paez, Defendants–Appellees,andElana Asyn, Defendant,Perdue Farms Incorporated, Movant.

No. 11–1796.

United States Court of Appeals,Fourth Circuit.

Argued: May 16, 2012.

Decided: July 5, 2012.

ARGUED:Howard W. Foster, Foster PC, Chicago, Illinois, for Appellants. Maurice Baskin, Venable, LLP, Washington, D.C., for Appellees. ON BRIEF:Matthew A. Galin, Foster PC, Chicago, Illinois, for Appellants. Brooks R. Amiot, Jackson Lewis LLP, Baltimore, Maryland, Allan S. Rubin, Jackson Lewis LLP, Southfield, Michigan, for Appellees Efrem Andrews, Terry Ashby, Alberto Asyn, Jeff Beckman, Jim Booth, Randy Brown, Charles Carpenter, Jeanette Cox, Leslie Cox, Tol Dozier, Helena Fernandez, Bennie Gray, Rob Heflin, Amparo Herrera, Bel Holden, Nancy Hollis, Jim Hungate, Richard Jamison, Jerry Layne, Todd McMahen, Naaman Garrett Miller, Gualberto Rivera, and Angie Wood; William J. Hughes, Jr., Cooper Levenson, Atlantic City, New Jersey, David Daneman, Bishop, Daneman & Reiff, LLC, Baltimore, Maryland, for Appellees David Castro, Maria Salizar Gonzalez, Sandra Herrera, and Julio Unzueta.

Before NIEMEYER and KEENAN, Circuit Judges, and MARGARET B. SEYMOUR, Chief United States District Judge for the District of South Carolina, sitting by designation.

Affirmed by published opinion. Judge KEENAN wrote the opinion, in which Judge NIEMEYER and Judge SEYMOUR joined.

OPINION

BARBARA MILANO KEENAN, Circuit Judge:

In this case, a group of hourly-wage employees of Perdue Farms, Inc. (Perdue), a major poultry processing company, filed a civil conspiracy action under 18 U.S.C. § 1962(d) of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. These hourly-wage employees (the plaintiffs) alleged that certain corporate managers of Perdue, human resources staff, and plant managers conspired to hire aliens not authorized to work in the United States in an effort to reduce labor costs. The plaintiffs asserted that this illegal hiring practice has caused the depression of wages paid to all hourly-wage employees at certain Perdue facilities. The district court granted the defendants' motion to dismiss filed under Federal Rule of Civil Procedure 12(b)(6), holding that the plaintiffs failed to allege a civil conspiracy claim on which relief could be granted. We affirm, and hold that the plaintiffs failed to state a cause of action for civil conspiracy because they did not allege sufficiently a violation of two RICO predicate acts.

I.

The plaintiffs are five hourly-wage employees of Perdue who are authorized to work in the United States.¹ They filed the action on behalf of themselves and similarly-situated employees, alleging that there is a conspiracy being conducted within Perdue's human resources department involving various levels of Perdue managers and human resources clerks responsible for hiring hourly-wage employees. The alleged object of this conspiracy is the receipt of increased compensation from Perdue flowing to the employee conspirators.

The plaintiffs asserted that the increased compensation received by the employee conspirators results from a hiring scheme designed to employ aliens brought into this country illegally using fraudulent means (the hiring scheme). According to the plaintiffs, the hiring scheme operates in the following fashion. At the lowest level of the conspiracy, the human resources clerks responsible for hiring hourly-wage employees (the hiring clerks) knowingly process the employment applications of unauthorized aliens who have been brought into this country illegally.² The hiring clerks knowingly accept false identification documents and attest to their veracity on Employment Eligibility Verification forms (I–9 forms) required by the United States Department of Homeland Security.

The plaintiffs further alleged that the managers of fourteen Perdue facilities across the United States (the facility managers) have instructed the hiring clerks to commit these acts.³ The facility managers, in turn, allegedly received their instructions from certain Perdue corporate managers (corporate managers).⁴

Additionally, the plaintiffs asserted that the conspirators' acts have resulted in the depression of wages of every hourly-wage employee working for Perdue. According to the plaintiffs, this wage depression is both an effect of the hiring scheme and the cause of the plaintiffs' damages. As alleged in the amended complaint, the conspirators benefit from the hiring scheme by reducing labor costs,⁵ which in turn increases Perdue's profitability and results in higher compensation for the conspirators.

The plaintiffs filed this action in federal district court in Alabama in March 2010, alleging that the hiring clerks, the facility managers, and the corporate managers (collectively, the defendants) conspired to violate 18 U.S.C. § 1962(c). According to the amended complaint, this conspiracy includes the violation of two different statutes that qualify under RICO as “predicate acts” identified in 18 U.S.C. § 1961(1).

First, the plaintiffs alleged that the hiring clerks individually violated 8 U.S.C. § 1324, which provides criminal penalties for certain acts “relating to bringing in and harboring certain aliens.” 18 U.S.C. § 1961(1)(F). The particular subsection at issue, 8 U.S.C. § 1324(a)(3), establishes as a criminal offense the act of knowingly hiring, during a 12–month period, ten or more unauthorized aliens who have been brought into the United States (the illegal hiring predicate). The plaintiffs asserted that each of the hiring clerks “have personally hired hundreds of [such] workers (and more than ten per year, each) with actual knowledge that the workers were unauthorized for employment” and “had been brought into the country” illegally.

Second, the amended complaint alleged that the hiring clerks individually violated 18 U.S.C. § 1546, which establishes as a criminal offense certain acts “relating to fraud and misuse of visas, permits, and other documents.” 18 U.S.C. § 1961(1)(B). In particular, the plaintiffs asserted that the hiring clerks violated 18 U.S.C. § 1546(b)(1)-(3), which prohibits the use of false identification documents, and fraudulent attestations regarding the validity of such documents, in the completion of government forms (the false attestation predicate). According to the plaintiffs, the hiring clerks routinely accept false identification documents provided by unauthorized aliens and, knowing those documents to be false, attest to their validity on the I–9 forms.

After the plaintiffs filed their complaint, the defendants moved to transfer the case to Maryland, where Perdue's corporate headquarters are located. The defendants also filed a motion to dismiss the complaint under Rule 12(b)(6). The district court in Alabama granted the defendants' motion to transfer.

Once the case was transferred to Maryland, the defendants renewed their motion to dismiss. The district court granted the motion, and dismissed the action with prejudice. The plaintiffs filed a timely appeal from the district court's judgment.

II.

A.

We review de novo a district court's dismissal of an action under Rule 12(b)(6). Robinson v. Am. Honda Motor Co., 551 F.3d 218, 222 (4th Cir.2009). In examining the sufficiency of a complaint, we are guided by the Supreme Court's instructions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). As this Court has noted, those decisions require that complaints in civil actions be alleged with greater specificity than previously was required. Robertson v. Sea Pines Real Estate Cos., 679 F.3d 278, 288 (4th Cir.2012).

The Supreme Court's decision in Twombly incorporated “[t]wo working principles.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. First, although a court must accept as true all factual allegations contained in a complaint, such deference is not accorded to legal conclusions stated therein. Id. The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6). Id.

Second, to survive such a motion, a complaint must state a “plausible claim for relief.” Id. The determination whether a complaint adequately states a plausible claim is a “context-specific task,” id. at 679, 129 S.Ct. 1937, in which the factual allegations of the complaint must be examined to assess whether they are sufficient “to raise a right to relief above the speculative level,” Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

To satisfy this standard, a plaintiff need not “forecast” evidence sufficient to prove the elements of the claim. Robertson, 679 F.3d at 291. However, the complaint must allege sufficient facts to establish those elements. Id. Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is “probable,” the complaint must advance the plaintiff's claim “across the line from conceivable to plausible.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

B.

The district court concluded that the plaintiffs' amended complaint contained several deficiencies that were fatal to the continued prosecution of their action. The court first determined that the amended complaint failed to plead with sufficient particularity the existence of a conspiracy among the...