WHO S EXTORTING WHO?: DEBUNKING MYTHS ABOUT THE USE OF CIVIL RICO IN LABOR DISPUTES. by Michael J. Mueller *

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1 WHO S EXTORTING WHO?: DEBUNKING MYTHS ABOUT THE USE OF CIVIL RICO IN LABOR DISPUTES by Michael J. Mueller * I. INTRODUCTION There are many myths about the Racketeer Influenced and Corrupt Organizations Act ( RICO ). Organized Crime Control Act of 1970, 901(a), tit. IX Racketeer Influenced and Corrupt Organizations, Pub. L , 84 Stat. 922, 941, 18 U.S.C These myths are perpetuated by opponents of the statute or, at least, by persons who say they are opposed to the statute. In reality, it depends on whose ox is being gored. In the courtroom, labor unions and their officials who have been sued under the statute contend that it is being abused by management. In their briefs usually in support of motions to dismiss they have perpetuated two principal myths: Myth #1: The RICO weapon has no place in the labor arena. Myth #2: Management has a retaliatory motive when it files RICO suits. The statutory language, legislative history, and a wealth of cases interpreting RICO in the labor context demonstrate that the first proposition simply is not the law. Indeed, labor s own use of RICO as a plaintiff proves that the proposition is merely what unions say when they are defendants. As for the second proposition, while every case presents its own facts and must be * Mr. Mueller is a partner in the Washington, D.C. office of Akin, Gump, Strauss, Hauer & Feld, L.L.P., where he represents management in labor and employment litigation, including corporate campaign disputes. He is the immediate-past Management Co-Chair of the Antitrust, RICO and Labor Law Committee of the Section of Labor and Employment Law. In that capacity, he served as Chapter Editor of Chapter 30, RICO And Labor Law, which appears in the Fourth Edition of THE DEVELOPING LABOR LAW (ABA and BNA 2001). He recently represented two of the defendants on their successful motion to dismiss the civil RICO claim in International Brotherhood of Teamsters v. Carey, 163 F. Supp. 2d 271 (S.D.N.Y. 2001). 1

2 decided on its own merits, companies are just as apt to use RICO against competitors as they are against unions, and many of the cases against unions have survived judicial review. Although some of the management cases have failed, that alone is not sufficient to permit a conclusion of retaliatory motive, as stated in the Supreme Court s recent decision in BE&K Construction Co. v. NLRB, S. Ct., 2002 WL (June 24, 2002). This paper briefly addresses the foregoing issues and concludes by discussing the issues in another RICO case that the Supreme Court will hear next Term, NOW v. Scheidler ( NOW II ), No The Court s decision in NOW II will potentially be significant for RICO cases in the labor arena, which often include predicate acts based on the federal extortion statute, the Hobbs Act, 18 U.S.C The parties have asked the Court to revisit United States v. Enmons, 410 U.S. 396 (1973), which placed restrictions on the Hobbs Act s application to certain labor disputes. II. BACKGROUND ABOUT RICO AND ITS RELEVANCE TO LABOR DISPUTES Congress enacted RICO in 1970 as a new weapon to fight corruption within business and labor organizations. There are three ways in which RICO imposes substantive liability, see 18 U.S.C. 1962(a)-(c), and a fourth provision that imposes liability for conspiracy to violate any of the prior provisions. Id. at 1962(d). Reduced to its essentials, RICO makes it unlawful for any person not just mobsters to use money derived from a pattern of racketeering activity to invest in an enterprise, to acquire control of an enterprise through a pattern of racketeering activity, or to conduct an enterprise through a pattern of racketeering activity. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 495 (1985). Persons who are injured in their business or property have standing to bring a civil cause of action under RICO. See 18 U.S.C. 1964(c). 2

3 The focal point of the statute is the enterprise element, which takes on different meanings depending upon which substantive subsection of liability is at issue. See generally National Organization for Women v. Scheidler, 510 U.S. 249, 259 & n.5 (1994) ( NOW I ). The statute defines enterprise to include any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. 18 U.S.C. 1961(4). Congress s statement of findings and purposes, which are part of the Act though not codified, confirms that RICO was intended to reach both business and union activities. Pub. L , 1(3) (discussing concern about efforts to corrupt legitimate business and labor unions ), 84 Stat , reprinted in West s FEDERAL CRIMINAL CODE AND RULES 774 (2002 ed.). Plaintiffs in civil RICO cases find encouragement in congressional language, again made part of the Act though not codified, that RICO shall be liberally construed to effectuate its remedial purposes. Pub. L , 904(a), 84 Stat. at 947 (quoted approvingly in Sedima, 473 U.S. at 498). With a few exceptions, the Supreme Court generally has given a liberal reading to the statute, consistent with this statutory mandate. Pro-labor forces have lobbied Congress to restrict the use of civil RICO in labor disputes, to no effect. See, e.g., H.R. 3240, 100th Cong. 4(b), at 13 (1987) (proposing a new 1964(j)(2) to eliminate civil RICO actions for acts in connection with and during a labor dispute ); H.R. 4920, 100th Cong. 4, at 18 (1988) (proposing same language for new 1964(c)(13)(B)). Other efforts to amend RICO in a manner that might limit its vitality in labor disputes similarly have failed. For example, in NOW I, the Supreme Court unanimously held that there is no requirement that a RICO enterprise or predicate acts have been motivated by an economic purpose. 510 U.S. at 250, 252. The decision reinstated a suit by women s health care 3

4 providers against antiabortion protestors that alleged a pattern of racketeering activity including extortion in violation of the Hobbs Act. Concerned about the implications for labor disputes, a bill was introduced in the Senate. See S. 300, 99th Cong. (c) (1995) (proposing new 1951(d)(1), which would have provided affirmative defense under Hobbs Act for conduct that was incidental to peaceful picketing in the course of a legitimate labor dispute ). The subsequent trial in the NOW case resulted in a jury verdict for the plaintiffs, which prompted a bill to remove extortion as a RICO predicate act. See H.R. 4245, 105th Cong. 3 (1998); see generally RICO Without Extortion? Congress Considers Amending Statute in Wake of Scheidler Case, CIVIL RICO REPORT, Vol. 14, No. 7 (Aug. 19, 1998) at 1. As discussed below, the NOW case is coming back to the Supreme Court, and the parties have given special focus on the reach of the Hobbs Act in labor disputes and protests generally. Undisputedly, the RICO statute, which defines racketeering activity at 18 U.S.C. 1961(1), includes several predicate acts that are focused entirely on labor matters: 18 U.S.C. 664 (embezzlement from pension and welfare funds); 18 U.S.C (unlawful welfare fund payments); 29 U.S.C. 186 (restrictions on payments and loans to labor organizations); 29 U.S.C. 501(c) (embezzlement from union funds). The statute also lists as a predicate act the Hobbs Act, whose extortion provisions are broad enough to cover non-labor activity but were [d]esigned to combat labor racketeering. United States v. Debs, 949 F.2d 199, 200 (6th Cir. 1991); see generally United States v. Green, 350 U.S. 415, (1956). The Second Circuit has observed that many RICO disputes are also labor disputes and has stated, based on the predicate acts and congressional findings, the important interrelationship between RICO and labor activities. Longshoremen (ILA) Local 1814 v. New York Shipping Ass n, 965 F.2d 1224, (2d Cir. 1992). 4

5 III. IF EVERYONE DISLIKES RICO SO MUCH, WHY DOES EVERYONE USE IT? A. RICO Suits Brought By Labor Unions Labor s supposed distaste for the statute is undermined by its own resort to the statute in a variety of contexts, including complaints against management, union officials, and even competing unions. See, e.g., Service Employees Local 79 v. Mercy-Memorial Hosp. Corp., 862 F.2d 606 (6th Cir. 1988) (union alleged that hospital bribed employee for efforts to decertify union), vacated on other grounds, 492 U.S. 914 (1989); Marshall v. Government Employees (AFGE), 996 F. Supp (W.D. Okla. 1998) (RICO counterclaim by union against former union president for alleged fraudulent conduct of affairs of union s charitable foundation); Young v. West Coast Indus. Relations Ass n, Inc., 763 F. Supp. 64 (D. Del. 1991) (unions alleged that employers conspired in violation of RICO when they repudiated the grievance and arbitration provisions of collective bargaining agreements and unilaterally implemented their final offer), aff d, 961 F.2d 1570 (3d Cir. 1992); UFCW Local 400 v. Marval Poultry Co., 708 F. Supp. 761 (W.D. Va. 1989) (union sued employer, its attorneys and others based on alleged pattern of racketeering in connection with decertification campaign); MHC, Inc. v. Mine Workers (UMW), 685 F. Supp (E.D. Ky. 1988) (counterclaim by union defendants alleging that companies conspired to deprive union members of their contract rights); Butchers Union Local 498 v. SDC Investment, Inc., 631 F. Supp (E.D. Cal. 1986) (claim by UFCW International and two locals, along with Butchers Union local, against various animal slaughterhouses that allegedly made payments to organizers of National Maritime Union to prevent plaintiff unions from representing industry employees). These cases are not isolated examples. Unions have been pleading such claims from the early days of civil RICO litigation. See Hotel Employees Local 355 v. Pier 66 Co., 599 F. Supp. 5

6 761 (S.D. Fla. 1984) (claim that employer offered monetary inducements and promotions to influence employees to file decertification petition with NLRB). A recent notable example has been the Teamsters use of the statute to challenge Ron Carey s fund raising for his 1996 reelection bid. See International Brotherhood of Teamsters v. Carey, 163 F. Supp. 2d 271 (S.D.N.Y. 2001). Some of the more recent cases are quite interesting. In Sinaltrainal v. The Coca Cola Co., No. 01-CV-3208 (S.D. Fla. filed July 20, 2001), the Steelworkers in-house legal department is acting as counsel of record for a Columbian trade union and union members who filed a RICO claim based on alleged violent acts of intimidation by the Columbian police and paramilitary groups supposedly working on behalf of and paid by Coca-Cola bottling plant managers. In Bonavitacola Electric Contractor, Inc. v. Boro Developers, Inc., No. 01-CV-5508 (E.D. Pa. filed Oct. 3, 2001), two locals of the IBEW have joined with an employer to bring a RICO action against a competitor, alleging that the latter obtained public works contracts through fraudulent means that caused loss of income to the unionized employees. In short, when unions have acted as plaintiffs, they have embraced the statute with ardor, demonstrating that Myth #1 is simply a defendant s viewpoint. B. RICO Suits Brought By Management As for Myth #2, one s view of whether it is myth or reality undoubtedly will be shaped by which side of the table he or she sits on. From management s perspective, it is actually unions that have been using litigation as a tactic in corporate campaigns to put pressure on companies to let themselves be organized or maintain a low market share in organized regions. From labor s perspective, management uses litigation against unions, including civil RICO s threat of treble damages and attorneys fees, to chill protected conduct. 6

7 On this issue, it should be kept in mind that everyone, it seems, complains about RICO. Like the labor community, the business community has criticized the statute but nonetheless frequently invoked it. The ABA itself has advocated reforms, having supported enactment of legislation to amend RICO to limit availability of private civil actions in a variety of ways. See ABA Coordinating Committee on RICO Report to the House of Delegates (Edward F. Mannino, Chair, August 1993) (approved by ABA House of Delegates) (available from author and Legislative Counsel, ABA Governmental Affairs Office). Despite the view supposedly held by the business community, the statute has been invoked by corporate plaintiffs in many cases, more often against other businesses than against unions. This has been the case since the United States Supreme Court gave vitality to civil RICO in Sedima, supra, where two joint business venture partners sparred over alleged overbilling. Competitors frequently resort to the statute. See, e.g., Dow Chem. Co. v. Exxon Corp., 30 F. Supp. 2d 673 (D. Del. 1998); General Motors Corp. v. Lopez, 948 F. Supp. 656 (E.D. Mich. 1996). In the Supreme Court s most recent decision interpreting RICO, it reversed a lower-court opinion and reinstated a complaint by a boxing promoter alleging that competitor Don King had conducted his company s affairs through fraud and other predicate crimes. Cedric Kushner Promotions, Ltd. v. King, 121 S. Ct (2001). This author cannot speak for the motivation of every company that has pleaded a civil RICO claim in a labor dispute, but the proof is in the pudding. Many of these complaints have survived motions to dismiss in whole or in part. See Titan Int l, Inc. v. Becker, 189 F. Supp. 2d 817 (C.D. Ill. 2001) (claim against Steelworkers and affiliates who allegedly used violence and threats to force employer to give higher benefits, unfreeze pension plan, increase wages, and agree to neutrality); Overnite Transp. Co. v. International Bhd. of Teamsters, 168 F. Supp. 2d 826 7

8 (W.D. Tenn. 2001) (trucking company s claim based on attempted murders allegedly as part of effort to coerce employer and its employees to accept IBT representation at additional locations); A. Terzi Productions v. Theatrical Protective Union Local 1, 2 F. Supp. 2d 485 (S.D.N.Y. 1998) (claim by employer against union and its officers for extortionate acts to coerce employer to enter into collective bargaining agreement); Teamsters Local 372 v. Detroit Newspapers, 956 F. Supp. 753 (E.D. Mich. 1997) (counterclaim by employer that unions committed robbery, arson and certain acts of extortion against others during strike, with aim of harming employer); Bayou Steel Corp. v. United Steelworkers of America, Civ. No RRM, 1996 WL 76344, 151 L.R.R.M. (BNA) 2252 (D. Del. Jan. 11, 1996) (claim by owner and operator of steel mill that union s extortionate and fraudulent actions during strike were intended to take control of company or destroy it); National Elec. Benefit Fund v. Heary Bros. Lightning Protection Co., 931 F. Supp. 169 (W.D.N.Y. 1995) (cross-claim by employer that local union and officers committed extortion by refusing access to union job sites unless employer entered into sham collective bargaining agreements and delivered bogus union election votes on behalf of employees); Tribune Co. v. Purcigliotti, 869 F. Supp (S.D.N.Y. 1994), aff d on interlocutory appeal on other grounds, 66 F.3d 12 (2d Cir. 1995) (claim that several unions, nearly 600 union members, and others conspired to file fraudulent workers compensation claims following bitter strike); Levin-Richmond Terminal Corp. v. Longshoremen (ILWU) Local 10, 751 F. Supp (N.D. Cal. 1990) (claim that union extorted agreement to pay ghost workers for services actually performed by rival union members); Domestic Linen Supply Co. v. Central States, Southeast & Southwest Areas Pension Fund, 722 F. Supp (E.D. Mich. 1989) (claim that union and its local affiliates committed extortion through violent strike and fraudulent scheme to induce employer to make pension fund contributions on behalf of supervisory, non- 8

9 bargaining unit employees); Texas Air Corp. v. Air Line Pilots Ass n, 113 Lab. Cas. (CCH) 11,776 (S.D. Fla. July 14, 1989) (airline and holding company alleged that unions used illegal tactics in conspiracy to coerce sale of airline to the unions); MHC, Inc. v. Mine Workers (UMW), 685 F. Supp (E.D. Ky. 1988) (coal companies claimed that union and affiliated persons engaged in illegal picketing and acts of violence, including murder and arson, in their attempts to become recognized bargaining agent). Admittedly, other RICO cases brought by employers against unions have failed on various grounds. See Monterey Plaza Hotel Ltd. Partnership v. Hotel Employees Local 483, 215 F.3d 923 (9th Cir. 2000) (hotel owner s claim against union for violent picketing, extortion and intimidation of employees and customers); AK Steel Corp. v. United Steelworkers of America, No. C , Order Granting Motions to Dismiss (S.D. Ohio Mar. 30, 2002) (claim by owner and operator of steel plant against union, AFL-CIO, and certain of their leaders for predicate acts of arson and extortion during lockout and continued production with replacement workers); Mariah Boat v. Laborers Int l Union of N.A., 19 F. Supp. 2d 893 (S.D. Ill. 1998) (company claimed that union, as part of organization efforts, intentionally tried to run company out of business by destroying its reputation through mass picketing, leafleting, letters to dealers to cease sales, and subornation of perjury); Building Industry Fund v. Electrical Workers (IBEW) Local 3, 992 F. Supp. 162 (E.D.N.Y. 1996), aff d, 141 F.3d 1151 (2d Cir. 1998) (claim by electrical contractors and their trade association that unions engaged in campaign of threats, violence, and extortion to secure business for contractors of one local over another local and thus drive plaintiffs out of business); Buck Creek Coal v. Mine Workers (UMW), 917 F. Supp. 601 (S.D. Ind. 1995) (coal mine operator claimed unions and their members conspired to violate RICO by communicating threats to employees and property of the mine, and by mass demonstrations); 9

10 Volmar Distribs. v. New York Post Co., 825 F. Supp (S.D.N.Y. 1993) (non-unionized newspaper distributors alleged that union and its president made campaign promise to faithfully represent members, while instead planning to grant labor concessions to unionized newspapers to induce them to transfer distributorships to non-unionized competitors in which union president had an interest); Esposito Hauling & Contracting Co. v. Building & Constr. Trades Council of Delaware, 144 L.R.R.M. (BNA) 2991 (D. Del. Sept. 2, 1993) (claim against trades council and its members based on two one-day picketing incidents, four years apart, at separate job sites); Overnite Transp. Co. v. Truck Drivers Local 705, 704 F. Supp. 859 (N.D. Ill. 1989), aff d, 904 F.2d 391 (7th Cir. 1990) (trucking company claimed that persons acting on behalf of union representing its employees committed arson and intimidation through acts against the company s trucks); C & W Constr. Co. v. Carpenters Local 745, 687 F. Supp (D. Haw. 1988) (contractor alleged that union organized illegal secondary boycott of suppliers during attempt to coerce collective bargaining agreement). IV. THE FUTURE OF SUCH LAWSUITS A. When Is Such A Lawsuit Unlawful Under The NLRA? As shown above, although some RICO cases brought by employers have failed, others have succeeded. That some of the management suits have failed does not, by itself, permit a conclusion that management had a retaliatory motive for filing them. This is demonstrated by the Supreme Court s recent decision in BE&K Construction Co. v. NLRB, which rejected the Board s test for determining whether unsuccessful management lawsuits are unlawful under NLRA 8(a)(1). Although the BE&K case involved antitrust claims brought by a company against unions, the ruling has substantial implications for management RICO suits against 10

11 unions, because unions typically contend that such suits constitute unfair labor practices under Bill Johnson s Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983). In BE&K, the Supreme Court granted certiorari on the question of whether, under Bill Johnson s Restaurants, the NLRB may impose liability on an employer for filing a losing retaliatory suit, even if the employer could show the suit was not objectively baseless under Professional Real Estate Investors, Inc. v. Columbia Pictures, Inc., 508 U.S. 49 (1993). The case involved an unsuccessful claim by BE&K, a non-union contractor, alleging that various unions had violated the Sherman Act by engaging in a multi-faceted campaign against a project to modernize a steel facility. After the contract had been awarded to BE&K, the unions allegedly began a campaign to eliminate non-union construction in Northern California by making an example of the project. They lobbied for adoption of an emissions standard, even though they had no real concern about the environmental impact of the project. They handbilled and picketed at BE&K s site, and encouraged strikes among employees of BE&K s subcontractors. They filed litigation alleging health and safety violations. And they filed grievances against BE&K s jointventure partner based on inapplicable collective bargaining agreements. According to BE&K, the unions purpose was not to organize BE&K s employees, but rather to cause such delay and expense that future project owners would hire only unionized help. The district court generally ruled for the unions, and the Ninth Circuit affirmed the dismissal of the antitrust claims. 31 F.3d 800 (9th Cir. 1994). Subsequently, the NLRB ruled on the unions unfair labor practice charge against BE&K, finding that the company had attempted to retaliate against the unions by filing the meritless lawsuit, and directing them to pay the legal fees and expenses incurred by the union defendants. 329 N.R.L.B. No. 68 (Sept. 30, 1999). The Sixth Circuit affirmed the NLRB s order, reasoning in part that BE&K s request for treble 11

12 damages constituted evidence of a retaliatory motive. 246 F.3d 619, 630 (6th Cir. 2001). Just a few months earlier, the District of Columbia Circuit had ruled similarly based on a trebledamages claim in a RICO case brought by management against labor. See Petrochem Insulation, Inc. v. NLRB, 240 F.3d 26, 34 (D.C. Cir. 2001). The Supreme Court reversed the Sixth Circuit s decision in BE&K. A fractured Court managed to produce agreement only on the judgment. There are three opinions: the Court s opinion by Justice O Connor, a concurring opinion by Justice Scalia joined by Justice Thomas, and a partial concurrence by Justice Breyer joined by Justices Stevens, Souter and Ginsburg. However, all nine Justices agreed that the Board cannot punish an employer for having filed an objectively reasonable lawsuit that failed, where the sole evidence of retaliatory motive is based on the loss and the employer s dislike for the union. The clear message of the Court s opinion is that management has First Amendment rights to petition for redress of grievances, and the NLRA must be interpreted consistent with that constitutional right. Just as the Supreme Court historically has given breathing space to speech to protect it, part III of Justice O Connor s opinion notes that a certain amount of latitude must be afforded to lawsuits brought by management. Like speech, not all cases are meritorious. Nonetheless, to avoid a chilling effect, litigants who file such cases cannot be punished merely because they lost. Her opinion suggests in dicta that, to be punished under the NLRA, the suit must have been both objectively baseless and brought with a subjectively improper intent, i.e., a sham lawsuit. (Justice O Connor s opinion notes that this is dicta, because the Court limited its consideration to suits that were objectively reasonable, such as BE&K s. The opening paragraph of Justice Scalia s opinion also notes this is dicta, but predicts that in a future appropriate case the Court will hold this way.) Even unsuccessful suits, if objectively reasonable, can advance 12

13 important interests: Like successful suits, unsuccessful suits allow the public airing of disputed facts, and raise matters of public concern. They also promote the evolution of the law. (Internal citations omitted.) In part IV, Justice O Connor s opinion for the Court addresses the Board s test for whether employer-filed lawsuits are retaliatory against employees rights under NLRA 7. The Board s view had been that a retaliatory suit is one brought with a motive to interfere with the exercise of protected [NLRA ] 7 rights. (Emphasis and brackets in original.) The Court determined that this improperly swept up a substantial amount of genuine petitioning. In language suggesting that RICO and other federal laws can be the basis for lawsuits challenging activities covered by the NLRA (i.e., that there is no preemption defense), the opinion states: an employer may file suit to stop conduct by a union that he reasonably believes is illegal under federal law, even though the conduct would otherwise be protected under the NLRA. The opinion notes that the employer s ill will toward the union or employees is irrelevant: adverse parties often dislike each other, but sometimes a dispute generates so much ill will that society should encourage them to resolve their dispute in court. As long as a plaintiff s purpose is to stop conduct he reasonably believes is illegal, petitioning is genuine both objectively and subjectively. (Emphasis in original.) The Court s opinion stops short of revising what it said in Bill Johnson s Restaurants, as made clear both by the penultimate paragraph in Justice O Connor s opinion, as well by Justice Breyer s concurring opinion. The Court limited itself to interpreting NLRA 8(a)(1); because that section does not necessarily reach all reasonably based but unsuccessful suits filed with a retaliatory purpose, the Board erred in using that standard. Justice O Connor s opinion, as reiterated by Justice Breyer s opening paragraph, makes clear that the Court left open the 13

14 question of whether management could be punished for reasonably based, but losing, suits that are filed solely to impose the costs of the litigation irrespective of the hoped-for outcome. Justice O Connor s opinion, as emphasized by Justice Scalia s, also notes that the courts retain the power, such as under Federal Rule of Civil Procedure 11, to impose sanctions for improper suits. Now that the Court has discarded the Board s test for retaliatory suits, management can breathe somewhat of a sigh of relief. As Justice Breyer s opinion notes, the Board s and Sixth Circuit s explanations made it look like BE&K was being punished solely for losing. As Justice Scalia wrote, the Board s approach made resort to the courts a risky venture for management. That risk should be smaller now, although it remains to be seen how unions and the Board will react to the decision. B. RICO Claims Based On The Hobbs Act: Will The Court Revisit Enmons? As noted above, NOW v. Scheidler resulted in judgment for the plaintiffs, which was affirmed by the Seventh Circuit. 267 F.3d 687 (7th Cir. 2001). The Supreme Court has granted certiorari to consider new issues in the case ( NOW II ). No (petition filed Jan. 28, 2002). The Court will review the first two issues presented in the petition for certiorari: (1) whether injunctive relief is available in private civil RICO cases, and (2) whether the Hobbs Act criminalizes the activities of political protesters who engage in sit-ins and demonstrations that obstruct the public s access to a business s premises and interfere with the freedom of putative customers to obtain services offered there. The case has potential importance for both the business and labor communities, and various groups have filed briefs as amici curiae, including a number of organizations that engage in protests. The briefs for Petitioners and Respondents emphasize two issues regarding the Hobbs Act: (1) whether property under the Act includes 14

15 the intangible right of a business to operate free from interference, and (2) whether the Act requires that the defendant actually have obtained the victim s property, or whether it is sufficient that the victim was intimidated into not doing something. On the latter issue, both sides have asked the Court to consider its prior interpretation of the Hobbs Act in United States v. Enmons, in which the Supreme Court placed restrictions on the Hobbs Act s application to certain labor disputes. In Enmons the government indicted union members and officials who, during a lawful strike, allegedly committed violent acts against an employer s property to extort a new collective bargaining agreement. In a bitter 5-4 decision, the Court affirmed dismissal of the indictment for failure to state an offense under the Hobbs Act. The majority determined that there has been no wrongful taking of the employer s property; he has paid for the services he bargained for, and the workers receive the wages to which they are entitled in compensation for their services. 410 U.S. at 400. According to the majority, the term wrongful in the Hobbs Act is limited to instances where the alleged extortionist has no lawful claim to that property. Id. Petitioners in NOW II argue that the Seventh Circuit s ruling for the plaintiffs-medical providers is in considerable tension with Enmons, because in that case the property that the union sought to obtain from the employer was higher wages, which was not wrongful ; there was no hint that the union s interference with business operations during the strike amounted to obtaining of property. Pet. brief at Respondents argue that the Seventh Circuit s ruling is not in tension with Enmons for several reasons. Resp. brief at First, the courts have been careful not to extend its application outside the collective bargaining context, because to do so could effectively repeal the Hobbs Act. Second, because the protesters in NOW v. Scheidler had no lawful claim to obtaining Respondents property, namely their right to do 15

16 business, their conduct was wrongful and thus would not fit the Enmons exception. Respondents argue that, if Enmons meant what Petitioners say, every defendant charged with extortion would claim a rightful purpose. The good motive argument has no more viability under the Hobbs Act than it does under RICO. Id. at 22. The NOW II case will be argued during the next Term. Because the Hobbs Act has particular significance for potential civil RICO claims in labor-management disputes, lawyers practicing in this area will anxiously wait to see whether the Court will give another broad reading to RICO and, at the same time, whether the Court will revisit the Enmons issue. Perhaps importantly, one of the four dissenters in Enmons is now the Chief Justice. V. POSTSCRIPT It has not been the purpose of this short paper to provide a comprehensive discussion of the use of civil RICO in the labor arena. That work already has been done. Recently, the Antitrust, RICO and Labor Law Committee of the ABA s Section of Labor and Employment Law published the first comprehensive review of RICO as it relates to the larger body of labor law. See RICO and Labor Law, Chapter 30, THE DEVELOPING LABOR LAW (ABA and BNA 4th ed. 2001). The authors, including chapter editors and contributors from both labor and management, found hundreds of cases as of early 1999 where RICO had been used in labor disputes, both civilly and criminally. The 2001 Cumulative Supplement and forthcoming 2002 Cumulative Supplement address additional uses of RICO in labor disputes since the main volume. The chapter and its supplements address the issues discussed above in detail, covering virtually every RICO case in the labor context. Practicing lawyers on both sides of labor-management disputes should be aware of this new work. It is respectfully submitted that they should consult the chapter when considering 16

17 pleading civil RICO claims where warranted by the facts, and when defending against complaints that include claims under the statute. Attorneys in such disputes are also invited to share with the Committee any complaints, pleadings and court decisions in such cases, so that THE DEVELOPING LABOR LAW remains true to its name and informs the bar of developments in this complex subject matter. 17