Melissa SIMPSON, Sabrina Roberts, on behalf of themselves and all those similarly situated, Plaintiffs-Appellants, v. SANDERSON FARMS, INC., Perry Hauser, et al., Defendants-Appellees.
No. 13-10624.
United States Court of Appeals, Eleventh Circuit.
March 7, 2014.
We add that categorizing the Committee Defendants’ continued failures to remove the STI Classic Funds as investment options as separate violations without changed circumstances would allow Fuller to recover under a continuing violation theory. However, as the Ninth Circuit observed in Tibble, this would thwart the purpose of ERISA‘s six-year limitations period, and Fuller has disclaimed any reliance on such a theory. See Tibble, 729 F.3d at 1120.
We, therefore, conclude that, as alleged in Fuller‘s complaint, “the date of the last action which constituted a part of the breach” alleged in Count 2 was when the Committee Defendants selected the STI Classic Funds. See
VI. CONCLUSION
For the reasons stated, we affirm the dismissal of Fuller‘s complaint.
AFFIRMED.
MOTZ, District Judge, concurring:
I concur in Judge Hull‘s opinion. However, because I am concerned that the opinion might be interpreted as insulating an ERISA fiduciary who violated its fiduciary duty in making an initial selection of an investment from ever being held liable for continuing that investment in a Plan‘s portfolio, I write separately to say that a non-removal claim might be stated by a beneficiary who was not invested in the Plan when the initial selection was made. In my judgment, financial institutions should not be permitted to invest in captive ERISA plans for their employees that are imprudently managed and charge excessive fees. That might not have been evident when ERISA was first enacted; it should be now.
MARCUS, Circuit Judge:
Walter J. Brand, Joseph Collins Wohner, Jr., Paul H. Stephenson, Watkins & Eager PLLC, William F. Ray, Attorney at Law, Jackson, MS, Eric Seth Fisher, Michael Eric Ross, Taylor English Duma, LLP, Benton J. Mathis, Jr., Kelly Eisenlohr-Moul, Freeman Mathis & Gary, LLP, Atlanta, GA, Hubert C. Lovein, Jr., W. Warren Plowden, Jr., Jones Cork & Miller, LLP, Macon, GA, Rick D. Collum, The Collum Law Firm, PC, Moultrie, GA, for Defendants-Appellees.
Before MARCUS and EDMONDSON, Circuit Judges, and VINSON,* District Judge.
Plaintiffs Melissa Simpson and Sabrina Roberts appeal the dismissal of a putative class action suit brought under the Racketeer Influenced and Corrupt Organizations (RICO) Act,
The essential problem with the amended complaint is that it offers virtually no real evidence to plausibly suggest either injury or proximate cause. The only wage data even mentioned in the amended complaint show that the plaintiffs actually received increasing wages at the plant. In attempting to plead injury nonetheless, the plaintiffs have presented only a conclusory market model that is stated at a very high order of abstraction. That model does not permit the plausible inference of injury, nor does it plausibly establish that the defendants’ alleged violations of
I.
It is by now clear that to state a prima facie civil RICO claim under
We review de novo the dismissal of a civil RICO complaint pursuant to
The facts as pled and the procedural history are straightforward. Plaintiffs Simpson and Roberts formerly worked at a poultry processing plant in Moultrie, Georgia. Defendant Sanderson Farms, Inc. owns the Moultrie plant, which employs over 1,500 workers and is one of the largest employers in Colquitt County. Simpson worked at the plant from 2008 to 2010, while Roberts worked there from 2009 to 2010. The plaintiffs were legally authorized to work in the relevant period, and both provided hourly-paid, unskilled labor. The amended complaint does not describe the plaintiffs’ actual duties at the Moultrie plant, nor does it begin to explain what constitutes “unskilled” labor.
On February 16, 2012, the plaintiffs filed a putative class action suit under the federal and Georgia RICO statutes.1 The plaintiffs named one corporate and seven individual defendants (collectively, “defendants” or “Sanderson“): Sanderson Farms, Inc., a Mississippi corporation; Jennifer Harrison Buster, Sanderson Farms’ corporate human resources manager; Perry Hauser, the complex manager of Sanderson Farms’ poultry processing plant in Moultrie, Georgia; Jeff Black, the plant‘s assistant manager; Demishia Croft, the plant‘s human resources manager; Aristides Carral-Gomez, a human resources employee; Janie Perales, a human re
In their first complaint, the plaintiffs alleged that Sanderson committed patterns of three substantive RICO predicate acts: violations of
According to the complaint, this pattern of racketeering activity allowed Sanderson, since 2008, to pay depressed wages to all genuinely work-authorized employees at its chicken processing plant. Finally, the plaintiffs claimed in the first complaint that each pattern of predicate acts was a “substantial and direct factor in causing the depressed wages.” Compl. ¶ 80.
On September 13, 2012, the district court dismissed the first complaint without prejudice. See Simpson v. Sanderson Farms, Inc., No. 7:12-CV-28, 2012 WL 4049435, at *16 (M.D. Ga. Sept. 13, 2012). The court determined that the plaintiffs had sufficiently pled the
On October 5, 2012, the plaintiffs filed a new five-count amended complaint, again alleging racketeering charges grounded in both the federal and Georgia RICO laws. Notably, they did not re-allege predicate violations of
Section 1546(a) provides in relevant part:
Whoever knowingly makes under oath, or as permitted under penalty of perjury under section 1746 of title 28, United States Code, knowingly subscribes as true, any false statement with respect to a material fact in any application, affidavit, or other document required by the immigration laws or regulations prescribed thereunder, ... [s]hall be fined under this title or imprisoned....
Whoever uses—
(1) an identification document, knowing (or having reason to know) that the document was not issued lawfully for the use of the possessor,
(2) an identification document knowing (or having reason to know) that the document is false, or (3) a false attestation,
for the purpose of satisfying a requirement of section 274A(b) of the Immigration and Nationality Act, shall be fined under this title, imprisoned not more than 5 years, or both.
Id.
At this stage, the plaintiffs’ theory of the case is very simple: since 2008, Sanderson has allegedly used the vehicle of
Although the amended complaint states—more than ten times—that Sanderson pays depressed wages, the plaintiffs have not pled any data or facts that actually evince a decrease in wages over time. In fact, the only wage data detailed in the amended complaint are statements of the plaintiffs’ own Sanderson wages, which increased considerably during the relevant period. Thus, Simpson is said to have earned a starting wage of approximately $8.50 per hour in 2008 and an ending wage of approximately $11.40 per hour in 2010 (a thirty-four-percent increase over two years), while Roberts’ wage reportedly climbed from approximately $8.50 per hour in 2009 to approximately $11.55 per hour in 2010 (a thirty-six-percent increase over one year).
Rising wages notwithstanding, the amended complaint attempts to show injury by positing a gap between the hourly wages that the plaintiffs actually received at Sanderson and the wages they “would have received had the Defendants not violated § 1546.” Am. Compl. ¶ 69. In support, the amended complaint postulates a market model. To operate the Moultrie plant, Sanderson must employ “over 1,500” hourly-paid workers at any one time. Id. ¶ 62. Rather than hiring from a limited number of legal candidates, however, the defendants allegedly select from a bloated, “mixed status” pool that includes both legal and illegal workers. Id. ¶ 63. The plaintiffs further allege that, compared to legal workers, illegal aliens tend to work for lower wages. Id. ¶¶ 16, 64. All told, the plaintiffs mean to invoke the basic logic of supply and demand: when many candidates jockey for few positions, competition among workers drives wages down. Nevertheless, the amended complaint does not specify or even estimate the number of legal or illegal workers in the relevant market—however that market may be defined. Nor have the plaintiffs explained why, for the purposes of this market analysis, legal and illegal workers may be treated interchangeably. Because the plaintiffs have nonetheless assumed that Sanderson pays the same “market hourly wage for unskilled labor” to both legal and illegal workers, Sanderson‘s decision to hire illegal workers has allegedly depressed the wages paid to all unskilled workers at the Moultrie plant—legal and illegal alike. Id. ¶ 62.
To link this theory with Sanderson‘s
Not surprisingly, Sanderson moved once again to dismiss the plaintiffs’ amended complaint for failure to state a claim. Sanderson argued again that the plaintiffs had not shown injury, but-for cause, or proximate cause, and, again, Sanderson claimed that the plaintiffs had failed to introduce enough data (indeed, any data) to yield the conclusion that wages were actually depressed. Finally, Sanderson argued that the amended complaint‘s theory of proximate cause was merely a string of conclusory premises.
The district court dismissed the amended complaint, this time with prejudice, largely agreeing with Sanderson. The court held that the amended complaint could not survive a motion to dismiss “because it fail[ed] to allege sufficient facts to show that the § 1546 violations proximately caused depressed wages.” Simpson v. Sanderson Farms, Inc., No. 7:12-CV-28 HL, 2013 WL 443620, at *5 (M.D. Ga. Feb. 5, 2013). The trial court reasoned that the plaintiffs could not rely on pre-Twombly precedent to prove the sufficiency of their pleadings, that actual data was required to support the wage depression claim, that the plaintiffs’ but-for causation argument was wholly conclusory and not supported by any actual data or facts, and, finally, that the plaintiffs had not shown a direct causal link between injury and injurious conduct.
The plaintiffs timely appealed from the order dismissing their amended complaint.
II.
Under
When measured against these pleading standards, the amended complaint does not come close to stating a plausible claim for relief under the federal or Georgia racketeering statutes. It is indisputable that
We have had little occasion to answer this question since the rulings in Twombly and Iqbal. In fact, by our count, we have only once applied the new plausibility standard to evaluate the question of RICO injury at the pleading stage. See AstraZeneca, 634 F.3d at 1364-69 (affirming dismissal order in RICO case because “insurers have not alleged plausible economic injury“). Nevertheless, because this is not a close case, we need not engage in any creative legal analysis to conclude that the plaintiffs have not plausibly shown injury.
The plaintiffs accuse Sanderson of depressing wages, but the only actual wage data in the amended complaint say that the plaintiffs’ wages rose—and not inconsiderably, at that. Thus, we are told, Simpson earned a thirty-four-percent wage increase over her two years at Sanderson, while Roberts earned a thirty-six-percent increase in her one year working there. Of course, the mere fact that their wages increased does not preclude the plaintiffs from showing depressed wages. If, absent Sanderson‘s misconduct, the plaintiffs’ wages would have increased substantially more than thirty-four and thirty-six percent, respectively, and if that wage depression would have directly resulted from a pattern of racketeering activity, then the
The problem here, however, is that the plaintiffs have pled injury at only the highest order of abstraction and with only conclusory assertions. They have offered no market data that might permit us plausibly to infer a gap between the wages they actually received at Sanderson and the wages they would have received but for the alleged
Unable to marshal any empirical data in their favor, the plaintiffs rely instead on a vague market theory. They insist that there are enough illegal workers in the mixed-status labor pool to logically infer
To begin with, the plaintiffs have entirely failed to describe the relevant labor market in quantifiable terms. They have not so much as estimated the number of unskilled workers in the market, nor have they stated—or offered literally any suggestion as to how we might even guess—what percentage of that workforce is work-authorized. This missing population data is essential to the plaintiffs’ theory of harm. Wages are depressed, the plaintiffs say, because Sanderson opened the market to undocumented labor and thereby increased the number of workers in the market who are willing to work for less. This increased supply of low-wage workers has allegedly forced wages down.
Whatever its abstract appeal, this conclusion is unsupported by any concrete facts or data in the amended complaint. Holding all else equal, any set number of illegal workers will affect wages less perceptibly in larger markets. Indeed, in a large enough market, the wage impact of any given number of illegal workers may even be de minimis. Here, the plaintiffs have suggested neither the number of illegal, unskilled workers in the market (the relevant “numerator“) nor the total number of unskilled workers in the market (the relevant “denominator“). What‘s more, they have failed to plead the relevant population data even in the smaller universe of the Moultrie plant. The plaintiffs have said that Sanderson has hired at least three hundred undocumented workers since 2008. That‘s the numerator. But the plaintiffs have not pled the corresponding denominator. While they have claimed that the Moultrie plant employs 1,500 workers at any one time, they have not so much as estimated the number of workers hired at the plant—in total—since 2008. By their own admission, the rate of turnover in the poultry processing industry is “extremely high.” Am. Compl. ¶ 17. Without at least some demographic information, we cannot plausibly infer whether the presence of illegal workers has actually depressed wages in a wholly nebulous labor market or in the more limited confines of the Moultrie plant.
Moreover, the plaintiffs have failed even to identify the relevant geographic market, leaving us with no frame of reference. Although the plaintiffs have alleged that Sanderson‘s Moultrie plant is “one of the largest employers in Colquitt County, Georgia,” that assertion does not tell us whether their claims implicate the market across the entire county, some subset of the county, or some larger geographic region—say, a series of contiguous counties. Cf. Mohawk II, 465 F.3d at 1289 (“[W]holesale illegal hiring depresses wages for the legal workers in north Georgia where Mohawk is located.” (emphasis added)).
The Supreme Court has “repeatedly observed that Congress modeled § 1964(c) on the civil-action provision of the federal antitrust laws.” Holmes, 503 U.S. at 267 (citations omitted). Under our post-Twombly precedent, rule-of-rea
In fact, our antitrust precedent requires plaintiffs to plead factual support for all manner of market claims.4 In Jacobs, for instance, we said that while the “parameters of a given market are questions of fact,” a rule-of-reason complaint must contain sufficient information to plausibly define the relevant product market. Id. at 1336. Ultimately, we held that the Jacobs plaintiffs failed to plead actual harm because, “beyond the bald statement that consumers lost hundreds of millions of dollars, there [was] nothing establishing the competitive level above which [the defendant‘s] allegedly anti-competitive conduct artificially raised prices.” Id. at 1339. In
We do not mean to suggest that the plaintiffs were required to plead all of this market data in order to make a plausible showing of injury. We have no occasion to say how much data would have been enough, and we do not mean to announce a comprehensive list of strategies for showing plausible injury in similar cases. Our conclusion here is instead much simpler: because the plaintiffs’ theory of injury turns peculiarly on assertions about the relevant labor market, the amended complaint cannot plausibly show injury without pleading any of these market facts or data.
The plaintiffs cannot state a claim unless they “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Since the plaintiffs have conceded that their own Sanderson wages actually increased, and since they have offered no facts to establish that they were injured nonetheless, their allegations of depressed wages invite us to speculate. Although the plaintiffs have not shown or offered any data about the prevailing market wage, we might guess that employers who hire only legal workers pay a higher rate. While the plaintiffs have not identified the geographic market, we might also guess that it includes Colquitt County and parts of the surrounding area. And although the plaintiffs have not even estimated the number of legal and illegal workers in that geographic market, we might surmise that there are enough illegal workers to force wages down at least somewhat. But after Twombly and Iqbal, this speculation does not state a claim. The plaintiffs have therefore failed to allege
Section 1964(c) also requires a civil RICO plaintiff to show—plausibly—that his injury occurred “by reason of” a defendant‘s pattern of racketeering activity. In this case, because the plaintiffs have failed to plead even the fact of wage depression, they have failed a fortiori to show that Sanderson‘s alleged
But even if we were to assume that the amended complaint established injury and but-for cause, the plaintiffs still have failed to adequately plead that their injury occurred “by reason of” Sanderson‘s alleged
The Supreme Court recognized a directness requirement in the civil RICO cause of action in part to avoid the difficulty involved in “ascertain[ing] the damages caused by some remote action.” Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 458, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006). That concern is proper here. In the plaintiffs’ proposed theory of causation,
With enough factual support, this attenuated, multi-step causal theory could still be “direct.” Indeed, we have previously held that, with the proper facts alleged, a plaintiff can show a proximate-causal link between
In short, the amended complaint was properly dismissed for failing to establish two of the essential elements of the
The plaintiffs lean heavily on Mohawk II, 465 F.3d 1277, where this Court affirmed the denial of a motion to dismiss a civil RICO complaint that alleged, among other things, a direct relation between an employer‘s
For starters, the plaintiffs in Mohawk II alleged numerous illegal acts by the employer, not just the making of false statements. Notably, Mohawk allegedly conspired with recruiting agencies to “hire and harbor” unauthorized workers for its carpet manufacturing business. Mohawk II, 465 F.3d at 1281. The Mohawk II legal-worker plaintiffs alleged that Mohawk‘s employees traveled to the Mexican border, recruited “literally thousands” of undocumented workers, physically transported those workers into the relevant market, accepted fraudulent documentation from those illegal workers, took steps to shield the illegal workers from detection, and offered incentive payments to recruiters in order to hire still more illegal labor. Id. at 1281-82, 1289. Moreover, unlike the plaintiffs here, the Mohawk II plaintiffs identified the relevant geographic market as “North Georgia.” Id. at 1281-82, 1289-90. And, importantly, unlike the amended complaint in this case, the Mohawk II complaint alleged that “illegal workers now constitute a majority of the work force in many of Mohawk‘s facilities in North Georgia.” Compl. ¶ 75, Williams v. Mohawk Indus., Inc., No. 04-00003 (N.D. Ga. Jan. 6, 2004).
The RICO allegations in Mohawk II relied on all of those facts. Like this case, Mohawk II involved allegations arising under the federal and Georgia RICO statutes. But unlike this case, which involves at this stage only allegations of
Moreover, the Supreme Court has since abrogated the pleading standard applied by our Court in Mohawk II. In Mohawk II, we explained that we would not affirm the dismissal of a complaint “unless it appear[ed] beyond doubt that the plaintiff [could] prove no set of facts in support of his claim.” Id. at 1282 n. 2 (quoting Beck v. Deloitte & Touche, 144 F.3d 732, 735 (11th Cir.1998)). This “no set of facts” language in Mohawk II was pulled verbatim from Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), which the Supreme Court categorically retired in Twombly. See Twombly, 550 U.S. at 562-63, 127 S.Ct. 1955 (announcing that Conley‘s “no set of facts” language had “earned its retirement“).
In fact, Mohawk II drew support from cases in other circuits that also relied on the now-abrogated Conley v. Gibson standard. Thus, in Mohawk II, we referenced
The plaintiffs argue nevertheless that Twombly and Iqbal are irrelevant to the Mohawk II analysis, because they claim that Mohawk II found proximate cause as a matter of law—independent of the factual peculiarities of that case. We are unpersuaded. The plaintiffs point us to the following passage from Mohawk II: “Although under Georgia law the plaintiffs are limited to predicate acts arising out of 18 U.S.C. § 1546, we conclude that the plaintiffs’ allegations are neither indirect nor too remote to satisfy Georgia‘s proximate-cause requirement under state-law RICO.” Mohawk II, 465 F.3d at 1294. Contrary to the plaintiffs’ claim, however, this passage does not mean that the Court announced a conclusion of law unaffected by the nature or quality of detail the plaintiffs may have alleged. Mohawk II did not hold (nor could it have held) that, in a civil RICO case, an employer‘s
In short, the plaintiffs have failed plausibly to establish two of the elements of a civil RICO cause of action—that they suffered an injury in the form of wage depression, or that, even if we were to assume they had plausibly shown injury and but-for cause, their injury was directly and proximately caused by Sanderson‘s pattern of
FRANS NOOREN AFDICHTINGSSYSTEMEN B.V., and Stopaq B.V., Plaintiffs-Appellants, v. STOPAQ AMCORR INC., doing business as Amcorr Products and Services, and Dolphin Sealants, LLC, Defendants-Appellees.
No. 2013-1200.
United States Court of Appeals, Federal Circuit.
Feb. 21, 2014.