Bryan RAY, on behalf of himself and all others similarly situated, Gretel Dorta, Michael Diorio, Ph.D., Deborah Gibson, Jennifer Sily, Donna Tilton, Josh Rubin, Donald M. Badaczewski, Plaintiffs-Appellants, v. SPIRIT AIRLINES, INC., a Delaware corporation, Defendant-Appellee.
No. 15-13792
United States Court of Appeals, Eleventh Circuit.
Date Filed: 09/02/2016
And there is another reason to do so. Absent certain exceptions not applicable here, a federal court may not hold an evidentiary hearing in a
AFFIRMED.
Paul D. Clement, Robert M. Bernstein, Jeffrey Matthew Harris, Bancroft, PLLC, Washington, DC, Scott Michael Dimond, Lorenz Michel Pruss, Dimond Kaplan & Rothstein, PA, Miami, FL, Daniel T. Graham, Clark Hill, PLC, Chicago, IL, Leslie A. Gutierrez, Husch Blackwell LLP, Milwaukee, WI, for Defendant-Appellee.
Before MARCUS and FAY, Circuit Judges, and FRIEDMAN,* District Judge.
MARCUS, Circuit Judge:
In this civil RICO case, plaintiffs seek to represent a class of customers claiming that Spirit Airlines, Inc. (“Spirit“) engaged in an elaborate criminal enterprise involving the use of mail and wire fraud. The complaint specifically alleged that Spirit portrayed its Passenger Usage Fee as a government-imposed or authorized fee
This is the second time this case has come before our court. The first time, we reversed the district court‘s conclusion that the Airline Deregulation Act, Pub. L. No. 95-504, 92 Stat. 1705, (“ADA“) displaced a civil RICO claim that an airline engaged in deceptive practices. Ray v. Spirit Airlines, Inc., 767 F.3d 1220 (11th Cir. 2014). We remanded the case in order to afford the district court the opportunity to determine in the first instance whether the plaintiffs had adequately pled a RICO claim. Id. at 1229. On remand, the district court dismissed the plaintiffs’ second amended complaint for failure to state a claim. As we see it, the district court reached the right answer for two independent reasons: the plaintiffs failed to adequately allege proximate cause; and they also failed to properly plead the existence of a RICO enterprise. Thus, we affirm.
I.
Plaintiffs commenced this civil suit against Spirit under the Racketeer Influenced and Corrupt Organizations Act (RICO),
Plaintiffs’ second amended complaint alleged these basic facts. Spirit holds itself out as an “Ultra Low Cost Carrier” offering airfares at rates lower than other providers. These cheap fares purportedly disguise the total cost of travel because Spirit forces consumers to pay unbundled charges traditionally included in the price of an airline ticket. Specifically, Spirit charges a Passenger Usage Fee to all consumers who buy tickets through its website or call center. When searching for flights on Spirit‘s website, a consumer sees only the base fares. Once he has selected a flight, a webpage directs him to “confirm” the flight on a page that displays both the base fare and an undifferentiated amount labeled “Taxes & Fees.” For a breakdown of these charges, the consumer then must click on an additional link for “more information,” which listed a “Passenger Usage Fee” alongside government taxes and fees. Plaintiffs alleged that this placement was a coordinated effort to conceal the true nature of the fee by leading customers to believe that it was an official government tax or sanctioned fee.
The complaint listed seven named plaintiffs with the approximate dates on which they had purchased tickets and (for most of them) the amount they were charged for the Passenger Usage Fee. According to plaintiffs, Spirit committed mail and wire fraud when it used the internet to advertise and engage in sales with the deceptive inclusion and placement of the Passenger Usage Fee. The complaint also generally asserted that the plaintiffs and other members of the proposed class “were harmed in that they relied to their detriment on Spirit‘s conduct and, as a result, needlessly incurred excessive and unconscionable [Passenger Usage Fees].”
The complaint further alleged that Spirit engaged in this fraudulent activity while associated with, operating, or controlling a RICO enterprise. The enterprise allegedly consisted of Spirit itself, along with two of its corporate officers and a variety of outside consultants (both individual and cor-
The district court granted Spirit‘s first motion to dismiss the second amended complaint, concluding that because the Airline Deregulation Act preempted all state and federal common law claims, it also prohibited a RICO action. The district court found that Congress intended the Department of Transportation to be the sole legal control on deceptive airfare, fees, and fare advertising. On appeal, we reversed, holding that, although the ADA preempted state law, it said nothing about preempting federal causes of action such as RICO. Ray, 767 F.3d at 1221. We concluded that the ADA did not repeal the application of the civil provisions of RICO, either expressly or by implication. Id. at 1229. We reasoned that RICO and the ADA are capable of coexistence because they feature different requirements and offer different protections. Id. at 1226. Thus, for example, we observed that it is far more difficult to establish a RICO predicate act like mail or wire fraud than to prove a violation of the Department of Transportation‘s regulations concerning unfair or deceptive practices. Id. at 1226-27. Mail and wire fraud are specific intent crimes, whereas the DOT need not find a specific intent to deceive or commit fraud or injury “before levying penalties or ordering a carrier to alter an unfair or deceptive practice.” Id. at 1226. Moreover, we noted that civil RICO also provides for treble damages. Id. at 1227. In short, we concluded that the Airline Deregulation Act is wholly different from RICO and that civil RICO claims are not barred by the ADA.
Our ruling, however, passed no judgment on the adequacy of the plaintiffs’ RICO pleading, remanding the matter to the district court to make that determination. Id. at 1222, 1229.
Back in district court for round two, the defendants successfully moved to dismiss the complaint for failure to state a claim pursuant to
The plaintiffs did not file a third amended complaint during that timeframe. Therefore, the district court entered final judgment on the matter on June 30, 2015. The same day, however, plaintiffs filed a motion for relief from the judgment pursuant to
The district court concluded that the plaintiffs’ delayed filing of the third amended complaint was the result of excusable neglect and so granted in part relief from the judgment. But, because the third amended complaint failed to overcome the various deficiencies that had led it to dismiss the second amended complaint, the district court found that it would be futile to reopen its judgment and allow the complaint to be pled on the latest amendation. Thus, it denied the plaintiff‘s
The plaintiffs timely filed this appeal, challenging the order dismissing the second amended complaint, the judgment, and the order denying them relief from the judgment.
II.
We review de novo the grant of a
There is some confusion between the parties as to whether the second or third amended complaint is the operative plead-ing for the purposes of this appeal. At bottom, as the parties agree, it matters little which complaint we consider because the differences between the two are mini-mal and immaterial. To the extent it mat-ters at all, the second amended complaint is the operative one because the district court denied leave (albeit retroactively) to the plaintiffs to file a third amended com-plaint. Thus, when considering whether the dismissal was appropriate, we look to the second amended complaint. But when we review whether to permit further leave to amend the complaint still again, we may look to the third amended complaint as a reliable indicator of whether allowing fu-ture amendments would be futile.
III.
Congress enacted RICO in 1970, prohibiting racketeering activity con-nected to interstate commerce. Ray, 767 F.3d at 1224. The statute makes it “unlawful for any person employed by or associat-ed with any enterprise engaged in, or the activities of which affect, interstate or for-eign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise‘s affairs through a pattern of racketeering activity or collection of un-lawful debt.”
Although initially enacted to fight organized crime, the Supreme Court has rejected a reading of RICO that ap-plies only where the pattern of conduct is “characteristic either of organized crime in the traditional sense, or of an organized-crime-type perpetrator, that is, of an asso-ciation dedicated to the repeated commis-sion of criminal offenses.” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 243, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989). So limited a reading of the statute, the Supreme Court
A.
The second amended complaint fails in the first instance because it does not adequately plead that the plaintiffs suffered injury as a result of Spirit‘s pur-ported mail and wire fraud. The RICO statute provides a cause of action for “[a]ny person injured in his business or property by reason of a violation of section 1962.”
Here, the plaintiffs alleged only that they “and the other members of the proposed class were harmed in that they relied to their detriment on Spirit‘s
To be sure, RICO does not contain a requirement that the plaintiff personally relied on the defendant‘s fraud-ulent misrepresentation. Bridge, 553 U.S. at 648-49. In Bridge, the Supreme Court recognized a civil RICO claim where the defendants had submitted fraudulent documents to Cook County, Illi-nois, which was conducting property auc-tions, thereby giving the defendants an unfair advantage over the plaintiffs in se-curing property at those auctions. Id. at 642-44. The Court ruled that the plaintiffs could proceed with the lawsuit even though it was Cook County, and not the plaintiffs, that had relied on the misrepresentations. But the Court was clear that its holding dismissing the need for first-party reliance on the fraud did not mean that a party can prevail without showing that someone had relied on the fraud. Id. at 658. Without reliance on the fraud by someone—in Bridge, Cook County—the plaintiffs would not be able to show that they were injured by reason of the alleged racketeering ac-tivity. And a showing of direct injury is required to sustain a RICO claim. Unable to establish even but-for causation, such a plaintiff necessarily would be unable to meet the higher burden of showing that the racketeering activity proximately caused the plaintiff‘s injuries. See Holmes v. Sec. Inv‘r Prot. Corp., 503 U.S. 258, 268, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992); Williams, 465 F.3d at 1287.
Whatever else the second amended com-plaint asserts, it does not allege a direct link—or, indeed, any link at all—between Spirit‘s presentation of its Passenger Us-age Fee and the plaintiffs’ decision to pur-chase tickets on Spirit‘s website. It pleads causation only at the highest order of ab-straction and supports the claim only with conclusory assertions; notably absent is an allegation of any specific fact that would make those conclusions plausible. Thus, the complaint does not so much as tell us the prices that the various plaintiffs paid for their tickets or the prices that other airlines charged for comparable flights, to say nothing of the many factors aside from cost that might induce someone to pur-chase an airline ticket. The complaint does not even allege that the plaintiffs would not have purchased their tickets from the Spirit website had they known that the Passenger Usage Fee was not authorized or collected by the government. Moreover, it strains credulity to insist—as the plain-tiffs must—that a customer willing to pur-chase a ticket for $129 in base fare plus an $8.99 Passenger Usage Fee (among other taxes and fees) announced before the tick-ets were purchased would balk at purchas-ing a ticket if he knew that the $8.99 fee came from the airline and not the govern-ment. In short, it seems utterly implausi-ble to us that Spirit‘s customers would have declined to purchase a ticket if, in the
Plaintiffs, however, cite to our de-cision in Kemp v. AT&T, 393 F.3d 1354, 1361 (11th Cir. 2004), in arguing that where the allegations of mail or wire fraud involve omissions rather than affirmative misrepresentations, no reliance is neces-sary. But this does not excuse plaintiffs from adequately pleading proximate cause in their RICO claim. The discussion in Kemp revolved around a challenge to whether AT & T had committed the predi-cate racketeering acts of mail and wire fraud. Id. at 1359-61. We found that a plaintiff does not have to prove reliance on a fraudulent omission of material informa-tion to sustain a claim for mail or wire fraud. Id. at 1361. But finding that a defen-dant committed a predicate racketeering offense, such as mail or wire fraud, is not the same as finding that it committed a RICO violation. Civil RICO plaintiffs must sufficiently plead both racketeering activi-ty and that the activity caused them some injury. “This is true even when a criminal conviction for the underlying racketeering activity would not require a showing of actual injury, as is the case with mail and wire fraud.” Beck v. Prupis, 162 F.3d 1090, 1095 (11th Cir. 1998); see also Pelletier, 921 F.2d at 1499. Thus, Kemp provides no relief from the requirement that civil RICO plaintiffs properly plead proximate cause for their injuries. Because the plain-tiffs have not pled that they or anyone else relied on Spirit‘s alleged misrepresenta-tions in purchasing their tickets—and, thus, have not shown that they were in-jured “by reason of” a RICO violation—they have failed to state a claim upon which relief may be granted.
There is no ambiguity in Supreme Court or Eleventh Circuit precedent about the requirement that a civil RICO claim must sufficiently plead proximate cause. The failure to adequately plead causation is compounded in this case because the dis-trict court, in dismissing the second amended complaint for the first time, ex-plained that a RICO claim required a showing of proximate cause and that the plaintiffs had failed “to include any allega-tions linking [their] loss to the fraud here.” The district court added that if plaintiffs planned to file a third amended complaint, they “should include specific allegations that they would have acted differently” had they known the true nature of the Passenger Usage Fee. The plaintiffs none-theless failed to make any averment in their third amended complaint that would tend to show any sort of causal link be-tween the alleged fraud and some injury to the plaintiffs’ business or property. This strongly suggests that allowing further leave to amend the complaint would be futile. Thus, we affirm the dismissal of this civil RICO complaint because it has failed to adequately plead proximate cause.2
Moreover, the plaintiffs’ second amended complaint has failed for a second and independent reason: it has failed to plead the existence of a RICO enterprise because it has not adequately alleged a common purpose shared by Spirit and the other members of the alleged enterprise. Again, the racketeering enterprise pled here was said to consist of Spirit, two Spirit officers, three software vendors/consultants, and a public relations consultant. According to the RICO statute, an ” ‘enterprise’ includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.”
The Supreme Court has instructed us that an association-in-fact enterprise must possess three qualities: “a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise‘s purpose.” Boyle, 556 U.S. at 946, 129 S.Ct. 2237. It is “simply a continuing unit that functions with a common purpose.” Id. at 948, 129 S.Ct. 2237. An enterprise need not have a hierarchical structure, specific governing procedures, or fixed roles for its members. Id. at 948, 129 S.Ct. 2237. What is required is “evidence of an ongoing organization, formal or informal, and ... evidence that the various associates function as a continuing unit.” United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981).
The second amended complaint fails because it has not plausibly alleged that the technology (Navitaire/Accenture, Colt Cooper, and Objectart) and public relations (MSP Communications) vendors named in the complaint shared a common purpose with Spirit. The complaint charged that the RICO enterprise members had a common purpose “to increase and maximize the revenue of Spirit Airlines by increasing the [Passenger Usage Fee] and other carrier-imposed fees through a scheme that, in part, omitted and misrepresented that the fees were not related to government taxes and permitted fees for services but were a bottom-line assessment for Spirit.”3 Because we can-not accept purely conclusory allegations, we look to whether the complaint alleged facts sufficient to give rise to a plausible inference that the various members of the alleged enterprise acted with this common purpose. Iqbal, 556 U.S. at 678.
Consider the following passage from the complaint, which is typical of the allegations against these service providers:
Objectart Solutions, LLC and its owner Kenneth Ramirez have consulted with Spirit since 2006 in the area of software architecture, development, quality assurance and technology management, in-cluding, but not limited to revenue man-agement system interfaces and support and interface systems for the Naitaire ticketing and reservations system. As such they have been involved with the development management and support of the revenue management system(s) that allow for Spirit‘s collection of the deceptive [Passenger Usage Fee] in its client-side reservation and ticketing process.
In short, the plaintiffs allege that Objectart and its owner helped Spirit set up the ticket reservation system for Spirit‘s website. But this is a wholly innocent activity undertaken as a course of regular business for Objectart. More importantly, this passage is notable for what it lacks. It does not say that Objectart had any control over (or, for that matter, was even aware of) the actual content on the web platform it helped develop. It does not allege that Objectart worked to conceal the true nature of the Passenger Usage Fees. It does not indicate that Objectart and its owner knew that Spirit was engaging in misleading behavior. It does not indicate that Objectart directly profited from the misrepresentation, as opposed to simply receiving a fee for the anodyne services it provided. That Objectart helped set up a platform that Spirit independently misused does not give rise to a plausible inference that Objectart and Spirit acted with the common purpose, let alone the common purpose arising out of a continuing relationship, to misrepresent the Passenger Usage Fee or defraud Spirit customers.
The allegations regarding Cooper and Accenture/Navitaire suffer from similar failings. For instance, the allegations against Cooper assert:
Colt Cooper[] [is] an airline reservation software consultant and specialist in Accenture‘s Navitaire platform, who has worked extensively with Spirit to implement its website and reservation system. Beginning in July 2007, Cooper convert-ed Spirit‘s legacy airline reservation sys-tem for additional capabilities. Cooper was involved in several development phases of the reservation software to the specifications of the enterprise, a plat-form that allows for concealment of the [Passenger Usage Fee] in the booking process[.]
Like the allegations against Objectart, the allegations against Cooper stop short of saying that he was responsible for any of the content on the platform he helped develop. The complaint also does not so much as suggest that Cooper was personally involved in the purported concealment of the Passenger Usage Fee, saying only that he worked on a platform that “allows” for the concealment. Indeed, the complaint does not plead any facts suggesting that Cooper knew Spirit was engaging in misleading behavior or that he shared a common purpose of engaging in (or even consciously enabling) that behavior.
Nor do the plaintiff‘s allegations concerning communications consultant MSP Communications and its president, Misty Pinson, fare any better. The complaint alleged that MSP and Pinson were largely responsible for the public relations regard-ing Spirit‘s business model in general and the Passenger Usage Fee in particular. But, as with the software consultants that we have already discussed, there is not the slightest factual averment or indication that MSP or Pinson played any role in determining how the fee would be presented on Spirit‘s website, where the complaint alleged the fraud occurred. Indeed, there are no claims that MSP or Pinson had any involvement with Spirit‘s website or method of charging fees at all. Moreover, be-cause the plaintiffs disclaimed any reliance on misrepresentations in Spirit‘s advertisements in the district court, it is unclear how the public relations efforts by MSP and Pinson relate in any way to the wrongs alleged in the complaint. That a public relations firm engaged in public relations work when Spirit hired it to do so hardly gives rise to a plausible inference that MSP and Pinson shared a common purpose with Spirit of scheming to misre-present the Passenger Usage Fee.
Moreover, the complaint‘s general allegations about the operations of the enter-prise do no better in plausibly alleging a common purpose among Spirit and its various vendors to misrepresent the Passenger Usage Fee. Thus, for example, the com-plaint alleged that “Spirit designed and employed an airline ticket booking system to conceal and assess fees and charges, including the [Passenger Usage Fee], via a website process designed specifically to obfuscate, omit and/or misrepresent the assessment and foundation for the [Passen-ger Usage Fee].” While this may allege Spirit‘s purpose, it says nothing about the actions of the other members of the puta-tive enterprise. The next paragraph of the complaint alleged that “the concerted scheme involved at least two freestanding entities ... to devise a registration practice of generating fees by intentionally om-itting and/or misrepresenting their actual purpose.” But this was pled in a wholly conclusory manner unsupported by any factual averments concerning the specific roles played by the vendors to support this purpose. This allegation just claimed that other members of the alleged enterprise were involved in intentionally misrepresenting the source of the Passenger Usage Fee, but without offering any factual averments to make the assertion plausible. Similarly, the allegation that Spirit and its associates-in-fact engaged in strategic planning, targeted marketing studies, and customizing website technology described only common business practices and did not offer facts suggesting that the consultants and vendors working with Spirit were aware of or participated in Spirit‘s alleged misrepresentations. Absent facts plausibly suggesting that Spirit and the other alleged members of this association-in-fact enterprise shared the common purpose alleged in the complaint, this RICO pleading fails. On this bare record, Spirit, the outside consultants, software develop-
Finally, the allegations concerning Spirit CEO Ben Baldanza and its Chief Market-ing Officer/Senior Vice President Barry Biffle regarding the enterprise‘s common purpose also seem to us to be insufficient. The complaint alleged that Baldanza and Biffle orchestrated Spirit‘s “ancillary revenue model” whereby customers pay “unbundled charges that have traditionally been included in the total price of an air-line ticket.” The complaint then alleged that the ancillary revenue model was “de-signed and/or adopted by the Enterprise to be intentionally confusing and deceptive in order to fraudulently collect additional[] moneys from Spirit customers.” But the complaint did not say who within the en-terprise made that model intentionally con-fusing. It did not allege that Baldanza or Biffle instructed anyone within the alleged enterprise to misrepresent the Passenger Usage Fee or that they were even aware the misrepresentation existed. While Bal-danza, Biffle, and Spirit most assuredly shared a common purpose of promoting Spirit‘s corporate profits and welfare, the complaint did not allege facts sufficient to give rise to a reasonable inference that the common purpose they shared included a scheme to misrepresent fees or otherwise defraud Spirit customers.
C.
Even, however, were we to assume that Baldanza and Biffle shared a common purpose to misrepresent the source of the Passenger Usage Fee—mak-ing it look like it was a tax imposed by the government rather than a fee imposed by the airline—the plaintiffs’ association-in-fact pleading would still fail because in an association-in-fact enterprise, a defendant corporation cannot be distinct for RICO purposes from its own officers, agents, and employees when those individuals are operating in their official capacities for the corporation. Significantly, to state a civil RICO claim, a plaintiff must establish a distinction between the defendant “person” and the “enterprise” itself. The Supreme Court has made it crystal clear that the racketeering enterprise and the defendant must be two separate entities. Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161-62, 121 S.Ct. 2087, 150 L.Ed.2d 198 (2001); see also United States v. Goldin Indus., Inc., 219 F.3d 1268, 1271 (11th Cir. 2000) (en banc) (“We now agree with our sister circuits that, for the pur-poses of
The Supreme Court has held that, where the defendant is a natural person, he is distinct for RICO purposes from a closely held corporation of which he is the president and sole shareholder. Cedric Kushner Promotions, 533 U.S. at 160. That case involved al-legations that the boxing promoter Don King conducted the affairs of Don King Productions (a corporation of which he was the president and sole shareholder) through a pattern of racketeering activi-ties consisting of fraud and other RICO predicate crimes. Id. at 160-61. The Court started its analysis with the premise that a corporation and its owner/employee are legally separate and distinct entities. Id. at 163.
The plaintiffs argue that the distinction highlighted by the Supreme Court is not one that compels a different result because the relationships alleged in this case are just as much an enterprise as those found in Cedric Kushner. But recognizing that distinction—far from being an exercise in sophistry—is very important. In this case, the corporation is the defendant person, and the corporation, together with its offi-cers, agents, and employees, are said to constitute the enterprise. Every circuit that has squarely decided this matter has recognized this distinction. See Cruz v. FXDirectDealer, LLC, 720 F.3d 115, 121 (2d Cir. 2013); Fitzgerald v. Chrysler Corp., 116 F.3d 225, 226-28 (7th Cir. 1997); Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339, 343-44 (2d Cir. 1994); Bd. of Cty. Comm‘rs of San Juan Cty. v. Liberty Grp., 965 F.2d 879, 886 (10th Cir. 1992).
We agree with the views expressed by our sister circuits on this matter. Thus, for example, the Second Circuit has ruled on this issue at least twice. First, in Riverwoods, the court rejected allegations of a RICO enterprise consisting of a defendant corporation and three of the corporation‘s vice presidents. Riverwoods, 30 F.3d at 343-45. The Second Circuit held that be-cause a corporation can only act through its employees and agents, the fact that it does so is insufficient to establish the exis-tence of an enterprise. Id. at 344. Like-wise, in Cruz, the Second Circuit rejected claims of a RICO enterprise consisting of a defendant corporation, its parent company, a former equity stakeholder, the CEO, the managing director and corporate counsel, and various software companies that as-sisted the corporation in developing its technological platform. Cruz, 720 F.3d at 120-21. The court rejected the RICO claims as to the corporate officers because a defendant corporation cannot form a RICO enterprise with its own employees or agents who are carrying on the normal work of the corporation. Id. at 121. The former stakeholder and software compa-nies were deemed incapable of being part of the enterprise because there was no pleading that they were aware of the alleg-edly fraudulent activities of the corpora-tion and, therefore, could not have been working toward the common purpose of committing fraud. Id. Finally, the corpora-tion was held not to be able to form an enterprise with its parent company where they shared a single, unified corporate structure. Id.
The Tenth Circuit has also declined to find a RICO enterprise where a corporate defendant was accused of acting through its employees and agents. Liberty Grp., 965 F.2d at 886. There, the alleged enter-prise consisted of a corporation, the corpo-ration‘s general partners (both legal enti-ties in their own right), the corporation‘s successor in interest, a corporate officer,
Finally, the Seventh Circuit in Fitzger-ald affirmed the dismissal of a RICO claim against the Chrysler Corporation where the alleged enterprise consisted of the cor-poration, subsidiaries of the corporation, franchised Chrysler dealers, and trusts controlled by the corporation. Fitzgerald, 116 F.3d at 226. The Seventh Circuit con-cluded that the various parties to the al-leged enterprise were either part of the same corporation or else they served a role that could have been filled directly by the corporate employees so that it made no sense to treat them as distinct entities for RICO purposes. Id. at 228.
We, too, hold that plaintiffs may not plead the existence of a RICO enterprise between a corporate defendant and its agents or employees acting within the scope of their roles for the corporation because a corporation necessarily acts through its agents and employees. For our purposes, there is no distinction between the corporate person and the alleged en-terprise. See Riverwoods, 30 F.3d at 344; Liberty Grp., 965 F.2d at 886. When an individual defendant acts through a corpo-ration, he may have formed an association-in-fact with an entity distinct from himself. In that situation, the rule announced in Cedric Kushner makes sense. In contrast to an individual, a corporation cannot act except through its officers, agents, and employees. Thus, a corporate defendant acting through its officers, agents, and em-ployees is simply a corporation. Labeling it as an enterprise as well would only amount to referring to the corporate “person” by a different name. Cf. Cedric Kushner Pro-motions, 533 U.S. at 161.
Moreover, RICO was designed at least in part—to prevent an individual engaged in racketeering activities from increasing his power to do wrong by taking over an apparently legitimate firm. Fitzgerald, 116 F.3d at 227. Doing so allows that individual to “use[] the firm‘s resources, contacts, facilities, and appearance of legitimacy to perpetrate more, and less easily discover-ed, criminal acts than he could do in his own person.” Id. But here, it is hard to see how Spirit increased its authority or legiti-macy, to say nothing of making its alleged-ly criminal acts more difficult to discover, by operating in the manner that every corporation by necessity acts—through its officers, agents, and employees.
Finally, while RICO was intended to be interpreted broadly, permitting plaintiffs to plead an enterprise consisting of a de-fendant corporation and its officers, agents, and employees acting within the scope of their employment would broaden RICO beyond any reasonable constraints. See Cruz, 720 F.3d at 121; Riverwoods, 30 F.3d at 344. Because every corporation acts through its own employees as a mat-ter of course, allowing such pleadings to go forward would turn every claim of corpo-rate fraud into a RICO violation. Fitzger-ald, 116 F.3d at 226. No matter how broad-ly RICO is interpreted, there is no reason to think that Congress intended the law to provide treble damages in every conceiva-ble case of corporate fraud.
In this case, there is no distinction be-tween the corporate defendant and an en-terprise composed of the corporation and some of its corporate officers. While the outside vendors may be distinct, the sec-ond amended complaint did not plausibly allege that they shared a common purpose with Spirit to misrepresent the Passenger Usage Fee, as we have already discussed. And the corporate officers and agents plainly are not distinct from the corporate defendant itself for purposes of a RICO association-in-fact enterprise. In short, the
AFFIRMED.
MARCUS
CIRCUIT JUDGE