WASHINGTON — In a case that could provide a new way to crack down on firms that hire undocumented immigrants, the Supreme Court on Wednesday considered whether companies could be charged with racketeering if they used contractors to hire undocumented employees.
The case was brought by employees of Mohawk Industries Inc., a Georgia carpet maker, who say the company depressed their wages by hiring undocumented immigrants.
The justices focused on narrow questions: Whether a firm and an outside contractor fit the definition of an "enterprise" under the Racketeer Influenced and Corrupt Organizations statute, or RICO, and whether corporations could be sued at all under a law originally meant to chase down the mob.
But with a handful of similar cases already in the courts, a decision for the Mohawk employees could generate numerous civil suits against businesses reliant on immigrants. The decision could also affect the use of RICO in criminal cases. The Justice Department, which had a lawyer in court to support the employees' argument, uses the law to send corrupt union leaders to prison and win financial damages from pension funds.
Some business groups say they are worried by the prospect of new RICO cases. "We don't think it's a proper use of the RICO statutes, frankly," said Laura Foote Reiff of the Essential Worker Immigration Coalition, a business alliance.
"Unless we get an immigration reform bill, we're going to see more and more RICO cases, and that's a huge problem for business and a misuse of the RICO statutes," Reiff said.
Congress is considering an overhaul of immigration laws that could include measures to allow more foreign workers to take jobs legally in the U.S.
Michael Hethmon, an attorney with the Federation for American Immigration Reform, which favors restrictions on all forms of immigration, said the case showed the federal government was unable to enforce immigration law.
"What we're seeing is a devolution of enforcement onto state and local officials and the citizens themselves through private actions," said Hethmon, who favors the use of the RICO law in immigration cases. "Congress intended this [RICO statute] to be a powerful tool. The needs for these kinds of tools are critical and the problems that are triggering this will only get worse."
The RICO statute was written in 1970 to prosecute the Mafia. In 1996, Congress expanded it to include immigration law violations and specifically included the hiring of undocumented workers. As a legal tool, it has the attraction of allowing plaintiffs to claim triple damages.
RICO laws can only be applied if an enterprise separate from the defendant exists. Currently, these enterprises are described mostly as groupings of individuals. On Wednesday, the justices considered whether a corporation and an outside contractor recruiting illegal immigrants qualified as an enterprise under the law.
A few of the justices indicated an unwillingness to interpret the RICO statutes in ways that could expand their use.
Justice Stephen G. Breyer asked if Congress meant for the 1996 expansion to "RICO-ize with criminal penalties ... vast amounts of ordinary commercial activity." Justice Antonin Scalia said he did not want a decision that would let lower courts probe the way corporations conduct their daily business.
But Justice David H. Souter questioned Mohawk's lawyer about whether "a scheme to provide phony IDs" for workers brought by a contractor fit the RICO definition of an enterprise.
The defense counsel, Carter G. Phillips, argued that an alleged practice of issuing false IDs was "simply Mohawk conducting its own affairs." He argued that it could not be guilty of a RICO violation because it was conducting its regular business.
Justice Department attorney Malcolm L. Stewart countered that businesses being used as a front for drug dealing could argue that they should not be sued under RICO, as they too were simply conducting their normal business. Stewart also told the justices that appeals courts had ruled unanimously in favor of a plaintiff's use of RICO in immigration-related cases.
The Mohawk case is currently on hold while the company appeals a trial court judge's refusal to dismiss the case.
Other RICO cases in the works include a lawsuit against Tyson Foods Inc., brought by the same Chicago-based lawyer, Howard Foster, representing the Mohawk employees. That case will be heard in 2007.
Foster also represents Canyon County, Idaho, in a RICO suit against local employers that is now under appeal.
The case before the Supreme Court is Mohawk Industries Inc. vs. Shirley Williams, et al. A decision is expected by the end of June.