Care One Management LLC v. United Healthcare Workers East ( 2022 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 19-3693
_______________
CARE ONE MANAGEMENT LLC, ET AL.
Appellants
v.
UNITED HEALTHCARE WORKERS EAST, ET AL.
________________________
On Appeal from the United States District Court
for the District of New Jersey
No. 2:12-cv-06371
District Judge: Honorable Susan D. Wigenton
______________________
Argued: September 24, 2020
_______________
Before: McKEE, JORDAN, and RENDELL, Circuit Judges.
(Opinion filed: July 28, 2022)
Rosemary Alito [Argued]
George P. Barbatsuly
K&L Gates
One Newark Center
10th Floor
Newark, NJ 07102
Michael D. Critchley
Chritchley Kinum & Luria
75 Livingston Avenue
3rd Floor
Roseland, NJ 07068
Counsel for Plaintiffs-Appellants
A. Matthew Boxer
Lowenstein Sandler
One Lowenstein Drive
Roseland, NJ 07068
Leon Dayan [Argued]
Jacob Karabell
Caitlin D. Kekacs
Joshua A. Segal
Bredhoff & Kaiser
805 15th Street, N.W.
Suite 1000
Washington, DC 20005
David M. Slutsky
Levy Ratner
80 Eighth Avenue
8th Floor
New York, NY 10011
Counsel for Defendants-Appellees
2
______________
OPINION
______________
McKee, Circuit Judge.
The Racketeer Influenced and Corrupt Organizations
Act (RICO) 1 authorizes private civil causes of action for acting
as an “enterprise” and conducting a “pattern of racketeering
activity” through certain criminal predicate acts. 2 These
predicate acts include federal crimes such as mail and wire
fraud, and certain state crimes, including extortion. 3 This case
concerns civil RICO liability predicated on federal mail and
wire fraud, as well as state law extortion through acts of
sabotage and fear of economic loss. For the reasons that
follow, we conclude that the District Court erred in deciding
that this record could not support a finding that the Unions
authorized or ratified conduct that could constitute extortion or
that they wrongfully exploited threats of economic harm. We
will affirm the District Court’s grant of summary judgment in
favor of the Unions on the remaining claims of RICO liability
and remand for further proceedings consistent with this
opinion.
I. Factual Background
Plaintiffs-Appellants Care One Management LLC,
HealthBridge Management LLC (“HealthBridge”), the Care
1
18 U.S.C. § 1961 et seq.
2
Id. §§ 1962(c), 1964(c).
3
Id. § 1961(1)(A), (B).
3
One Facilities, 4 and the HealthBridge Facilities 5 (collectively,
“Care One”) manage nursing homes and assisted-living
4
Care One manages 21 facilities located throughout the State
of New Jersey including the following: Care One at
Birchwood, LLC, d/b/a Care One at The Highlands; Care One
at East Brunswick, LLC, d/b/a Care One at East Brunswick;
Care One at Hamilton, LLC, d/b/a Care One at Hamilton;
Care One at Madison Avenue, LLC, d/b/a Care One at
Madison Avenue; Care One at Mercer, LLC, d/b/a Care One
at Ewing; Care One at Parsippany-Troy Hills, LLC, d/b/a
Care One at Morris; Care One at Teaneck, LLC, d/b/a Care
One at Teaneck; Care One at Wall, LLC, d/b/a Care One at
Wall; Care Two, LLC, d/b/a Care One at Livingston; Care
One at Moorestown, LLC, d/b/a Care One at Moorestown;
Elmwood Evesham Associates, LLC, d/b/a Care One at
Evesham; HCC, LLC, d/b/a Care One at Holmdel; King
James Care Center of Middletown, LLC, d/b/a Care One at
King James; Millennium Healthcare Centers II, LLC, d/b/a
Care One at Dunroven; Millennium Healthcare Centers II,
LLC, d/b/a Care One at Valley; Millennium Healthcare
Centers, LLC, d/b/a Care One at Pine Rest; Millennium
Healthcare Centers, LLC, d/b/a Care One at The Cupola; 11
History Lane Operating Company, LLC, d/b/a Care One at
Jackson; 101 Whippany Road Operating Company, LLC
d/b/a Care One at Hanover Township; 301 Union Street,
LLC, d/b/a Care One at Wellington; and 493 Black Oak
Ridge Road, LLC, d/b/a Care One at Wayne; the
Rehabilitation Center at Raritan Bay Medical Center, LLC
d/b/a Care One at Raritan Bay Medical Center; Care One at
Trinitas, LLC, d/b/a LTACH – CareOne at Trinitas Regional
Medical Center; and Care One at Harmony Village, LLC,
d/b/a CareOne Harmony Village at Moorestown (collectively
referred to herein as the “Care One Facilities”). Care One
Mgmt., LLC v. United Healthcare Workers E., SEIU 1199,
No. 12-6371, 2019 WL 5541410, at *1 n.1 (D.N.J. Oct. 28,
2019).
5
The HealthBridge Facilities include the following: 600
Kinderkamack Road Operating Company, LLC, d/b/a Oradell
Health Care Center; 800 River Road Operating Company,
LLC, d/b/a Woodcrest Health Care Center; 2 Cooper Plaza
Operating Company, LLC, d/b/a South Jersey Health Care
4
Center; 1621 Route 22 West Operating Company, LLC, d/b/a
Somerset Valley Rehabilitation and Nursing Center; 341
Jordan Lane Operating Company II, LLC, d/b/a Wethersfield
Health Care Center; 1 Burr Road Operating Company II,
LLC, d/b/a Westport Health Care Center; 107 Osborne Street
Operating Company II, LLC, d/b/a Danbury Health Care
Center; 240 Church Street Operating Company II, LLC, d/b/a
Newington Health Care Center; 245 Orange Avenue
Operating Company II, LLC, d/b/a West River Health Care
Center; 710 Long Ridge Road Operating Company II, LLC,
d/b/a Stamford Health Care Center; 162 South Britain Road
Operating Company II, LLC, d/b/a River Glen Health Care
Center; 2028 Bridgeport Avenue Operating Company II,
LLC, d/b/a Golden Hill Health Care Center; 745 Highland
Avenue Operating Company, LLC, d/b/a The Highlands
Health Care Center; 135 Benton Drive Operating Company,
LLC, d/b/a Redstone Health Care Center; 178 Lowell Street
Operating Company, LLC, d/b/a Lexington Health Care
Center; 19 Varnum Street Operating Company, LLC, d/b/a
Lowell Health Care Center; 199 Andover Street Operating
Company, LLC, d/b/a Peabody Glen Health Care Center;
2101 Washington Street Operating Company, LLC, d/b/a
Newton Healthcare Center; 221 Fitzgerald Drive Operating
Company, LLC, d/b/a New Bedford Health Care Center; 260
Easthampton Road Operating Company, LLC, d/b/a Holyoke
Rehabilitation Center; 312 Millbury Avenue Operating
Company, LLC, d/b/a Millbury Health Care Center; 49
Thomas Patten Drive Operating Company, LLC, d/b/a Cedar
Hill Health Care Center; 548 Elm Street Operating Company,
LLC, d/b/a Calvin Coolidge Nursing and Rehab. Center for
Northhampton; 57 Old Road to Nine Acre Corner Operating
Company, LLC, d/b/a Concord Health Care Center; 64
Performance Drive Operating Company, LLC, d/b/a
Weymouth Health Care Center; 750 Woburn Street Operating
Company, LLC, d/b/a Wilmington Health Care Center; Park,
Marion and Vernon Streets Operating Company, LLC, d/b/a
Brookline Health Care Center; 265 Essex Street Operating
Company, LLC, d/b/a Essex Park Rehabilitation Center; and
DES Senior Care Holdings LLC, d/b/a Sweet Brook Care
Centers (collectively referred to herein as the “HealthBridge
Facilities”). Id. at *1 n.2.
5
facilities throughout the Northeast. Defendants-Appellees are
United Healthcare Workers East SEIU 1199 (“UHWE”), New
England Health Care Employees Union District 1199
(“NEHCEU”), and the Service Employees International Union
(“SEIU”) (collectively, “Unions”). The Unions represented
several employees at various Care One facilities. This suit is
the culmination of a history of conflict and animosity that has
unfortunately characterized the relationship between Care One
and the Unions.
In 2010 and 2011, the Unions filed charges against Care
One with the National Labor Relations Board. 6 They alleged
that Care One had improperly terminated or threatened
employees, improperly ended benefits, and wrongfully
suppressed union communications at the Connecticut
facilities. 7 They also alleged that Care One had engaged in
unfair labor practices during and after a union election in the
Somerset, New Jersey facility. 8 The NLRB responded with
complaints and hearing notices charging Care One with
interfering with rights guaranteed by the National Labor
Relations Act, including the refusal to bargain collectively and
in good faith. 9
Beginning in January 2011, while the NLRB complaints
were pending, NEHCEU and Care One attempted to negotiate
a renewal of the Connecticut facilities’ collective bargaining
agreements. 10 Those negotiations were not fruitful, and
NEHCEU called a strike at those facilities. The night before
the strike was to begin, the Connecticut facilities were
vandalized and sabotaged. 11 Patient identifying information
(including patient wrist bands, door name plates, and dietary
requirement documents) were mixed up. 12 Medical records
were altered, medical equipment was damaged or hidden, and
laundry equipment was vandalized. 13 At Care One’s request,
the Connecticut State’s Attorney investigated, but the
investigation yielded neither suspects nor charges.
6
Id. at *2.
7
Id.8
Id.9
Id.10
Id. at *3.
11
Id.12
Id.13
Id.6
Union documents later obtained in discovery revealed
the Unions’ plans to inspire workers to “become angry about
their working conditions” 14 and to resort to “more militant”
levels of activity. 15 The president of NEHCEU had also made
a speech to workers in which he told them that “the law takes
too long” and that NEHCEU “could be destroyed by the time
the law was able to stop [Care One’s] behavior.” 16 After the
incidents, NEHCEU’s Communications Director, Deborah
Chernoff, wrote to fellow employees, referring to the
allegations of vandalism and destruction. The communication
included the statement: “Of course anyone with a peasized
brain would realize this isn’t a tactic we would undertake.”17
When a reporter asked the NEHCEU about the vandalism and
destruction at the Care One facilities, Chernoff wrote:
The allegations made by HealthBridge, if true,
are very serious indeed. Should evidence be
found that anyone took any action that would
compromise care or put residents at risk, that
person or persons should be held fully
accountable, no matter who they might be. 18
The record also contains several emails sent after the
incident. They include an email from Chernoff, which
describes a response to a FOIA request the Unions made to the
Connecticut Department of Public Health as “mudd[ying] the
waters and support[ing] the contention of the workers that”
patients may have removed their identifying bracelets
themselves rather than saboteurs. 19 There is also an email from
Chernoff to Chas Walker, Elected Organizer of UHWE, and
others in SEIU. It was sent after the vandalism and sabotage.
That email appears to respond to Walker’s suggestion that the
Unions launch their own investigation or actively seek to
participate in the police investigation. In the email, Chernoff
14
JA 5852, a facilitator teaching document with the goal of
“answer[ing] tough questions and redirect[ing] conversations
to an organizing agenda.”
15
JA 5849, a supervisor’s evaluation form for an individual
organizer.
16
Defs.’ Summ. J. Reply at 5.
17
JA 6825.
18
JA 1068.
19
JA 5842.
7
suggested it would be “a very bad idea” to seek to participate
in the police investigation because the Unions should not
“suggest [they] have information [they] don’t have.” 20 The
email also stressed the Unions’ obligation to their members,
“even when they are totally in the wrong.” 21
In addition, in 2011, with help from NEHCEU and
UHWE, SEIU launched a campaign attacking Care One’s labor
and business practices. The campaign materials included
developing websites, print and radio advertisements, as well as
flyers questioning Care One’s billing practices and standards
of care. The campaign also publicized the NLRB complaints. 22
The union advertisements Care One focuses on before us
included several rhetorical questions. The first asks: “Are
HealthBridge Nursing Homes Employing Enough Caregivers
For Our Loved Ones?” It asserts Care One provided below-
average coverage by certified nursing assistants. 23 The second
asks: “Is HealthBridge Giving Your Loved One Anti-Psychotic
Drugs?” and asserts that Care One excessively administered
medications. 24 The third asks: “Overbilled at a HealthBridge
Nursing Home?” and references overbilling. 25 The fourth
asks: “Who’s in Charge at HealthBridge Nursing Homes?” and
states that the facilities have an unhealthy level of turnover. 26
The Unions submitted evidence to the District Court to
show that this publicity campaign was subject to fact-checking
and vetting procedures. But Care One alleges no such
safeguards were actually in place. Despite Care One’s
allegations to the contrary, Amy Gladstein, UHWE’s Assistant
for Strategic Organizing, testified that the Unions had adopted
certain protocols requiring researchers to be trained in
conducting careful research. She also claimed that the
advertisements were based on initial fact-gathering.
According to her colleague, David Bates, the ads had to be
“vetted by the research department for accuracy,” 27 and many
20
JA 5831.
21
Id.22
Care One, 2019 WL 5541410, at *3.
23
JA 2491.
24
JA 2501.
25
JA 2477.
26
JA 2494.
27
JA 2761.
8
testified that the advertisements were fact-checked by trusted
researchers and outside counsel. 28
From July through November 2011, the UHWE also
filed petitions for public hearings on applications for
“determinations of need,” which Care One had filed with the
Massachusetts Department of Public Health. Care One had
filed the applications to obtain approval for capital
improvement projects at their facilities. 29 The Unions’
objections delayed approval of Care One’s applications. At
one hearing, occurring almost a year after Care One filed its
application, two Union members opposed the renovations,
“alleg[ing] that they had been wrongfully dismissed from their
longstanding jobs because of their support for the formation of
a union at the nursing home.” 30 The opposition was obviously
unrelated to the nature of the hearing, and the regulator
concluded as much. 31 During a deposition, a Union official
acknowledged that their opposition “was for an objective other
than blocking the repairs.” 32
In February 2012, the Unions also asked Senator
Richard Blumenthal, a U.S. senator from Connecticut, to
investigate Care One’s allegedly questionable billing practices.
Senator Blumenthal responded by asking the Secretary of the
U.S. Department of Health and Human Services to audit Care
One’s billing practices and to investigate and pursue any
enforcement actions deemed necessary. The Unions then made
sure that a copy of the Senator’s letter was delivered to Care
One.
The Unions’ campaign also involved demonstrations,
including one held in August 2012 at Care One’s offices where
petitions for fair collective bargaining were delivered. The
28
See JA 5327 (fact checking was “Megan [Thorsfeldt’s] job
and I trust her”); JA 2642 (vetting was conducted on the
research side and legal side); JA 5134 (accuracy was the
responsibility of “our research team” and “counsel”); JA 3718
(Gladstein explaining that “my researchers” were responsible
for accuracy).
29
JA 1480–84.
30
JA 2557.
31
See id. (“Staff did not find these comments to be pertinent
to . . . [the government’s] regulatory authority in its review of
this application.”).
32
JA 3382.
9
Unions also staged a peaceful protest at NYU Law School
where demonstrators handed out materials questioning Care
One’s owner and CEO Daniel Straus’s purported hypocrisy for
endowing the Institute for the Advanced Study of Law &
Justice at NYU while allegedly violating labor law. The
Unions also targeted unrelated business ventures of Straus,
“block[ing] the development of a condominium project in
which . . . Straus had invested” and “purchasing radio
advertisements in Puerto Rico to disparage two unrelated
businesses . . . Straus owned there.” 33
II. Procedural Background
Care One sued the Unions for damages arising from
these actions. Care One alleged they constituted a pattern of
racketeering in violation of RICO. Among other
characterizations, Care One alleged the Unions’ actions were
extortionate. The District Court granted the Unions’ motion
for summary judgment and dismissed the complaint. The
Court held that no reasonable juror could conclude that the
vandalism underlying Care One’s claims could be attributed to
union members, much less the Unions themselves. 34 It also
concluded that other actions the Unions undertook to exert
pressure on Care One—including the advertisements,
picketing, and attempts to invoke regulatory and legal
processes—were not extortionate. The Court also found that
Defendants lacked the specific intent to deceive and were
therefore entitled to summary judgment on the mail and wire
fraud claims. 35 This appeal followed.
III. Discussion 36
33
Appellant Br. at 34.
34
Care One, 2019 WL 5541410, at *6.
35
Id. at *7–10.
36
The District Court had jurisdiction pursuant to 28 U.S.C. §§
1331, 1337, 1367. We have jurisdiction pursuant to id. §
1291. We review a grant of summary judgment de novo.
Tundo v. Cnty. of Passaic, 923 F.3d 283, 286 (3d Cir. 2019).
A district court properly grants summary judgment if the
moving party shows there is “no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Id. at 286–87 (citing Fed. R. Civ. P. 56(a)).
We view the facts “in the light most favorable to the non-
moving party and [draw] all reasonable inferences in that
10
RICO imposes criminal and civil liability upon those
who engage in certain “prohibited activities.” 37 It provides
civil remedies for “[a]ny person injured in his business or
property by reason of a violation of [18 U.S.C. § 1962].” 38 To
establish liability under § 1962(c), a plaintiff must show that
defendant(s) acted as an “enterprise” and conducted a “pattern
of racketeering activity” through certain criminal predicate
acts. 39 As noted earlier, these acts may include federal crimes
such as extortion, mail fraud, and wire fraud, or certain state
crimes, including extortion. 40 Care One argues that the District
Court erred in granting the Unions’ motion for summary
judgment because the undisputed facts are sufficient to allow a
jury to conclude that the Unions committed the following
predicate acts for RICO liability: (1) mail and wire fraud, and
(2) extortion under state law through both sabotage and fear of
economic loss. We begin our analysis by discussing Care
One’s reliance on mail and wire fraud.
1. Mail and Wire Fraud
Care One’s claims of mail and wire fraud are based on
the allegedly false and misleading advertisements mentioned
above. The District Court granted summary judgment to the
Unions on those claims because it found proof of the requisite
element of specific intent to defraud lacking. 41 It concluded
that the record did not support a finding of specific intent to
deceive because the Unions had fact-checking and vetting
procedures in place, and the people who researched, drafted,
and approved the publications believed the advertisements to
be truthful. 42 Care One argues that there were material disputes
of fact as to whether such procedures existed or whether the
party’s favor.” Id. at 287 (alteration in original) (citations
omitted).
37
H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 232 (1989)
(citing 18 U.S.C. §§ 1961–68).
38
Wilkie v. Robbins, 551 U.S. 537, 563 (2007) (alterations in
original) (citing 18 U.S.C. § 1964(c)).
39
18 U.S.C. § 1962(c).
40
Id. § 1961(1)(A), (B). Here, it is not disputed that a labor
union can constitute a RICO enterprise if its affairs are
conducted through a pattern of racketeering activity. See
United States v. Parise, 159 F.3d 790, 795 (3d Cir. 1998).
41
Care One, 2019 WL 5541410, at *10.
42
Id.11
procedures were followed if they did exist. Care One also
claims the District Court should have looked beyond the fact-
checking procedures to determine whether the Unions’
statements contained half-truths or concealed material facts.
We review each argument in turn.
a. Unions’ Fact-Checking Process
First, we turn to Care One’s argument that there were
material disputes of fact as to whether fact-checking
procedures existed and whether the procedures were followed
if they did exist. After reviewing the affidavits that both sides
submitted for the summary judgment motions, we hold that the
trial court did not err. Care One argues that UHWE Assistant
for Strategic Organizing Amy Gladstein’s deposition
establishes that the Unions lacked effective vetting procedures.
That is a misreading of the record. Gladstein merely denied
that union protocols were as strict as in “a laboratory.” 43 But
she emphasized that union researchers were trained to conduct
careful research and that the advertisements were based on
initial fact gathering. 44
Care One also contends that a union employee admitted
that communications were published without prior approval.
But that employee merely specified that the procedure did not
require him to sign-off on the ads. He nevertheless reaffirmed
that the work had to be “vetted by the research department for
accuracy.” 45 Care One points to a communications employee
who admitted that, when she was promoted to a senior position,
she could send out certain things without her supervisor’s
“review,” though there were categories of things that still
required such approval. 46 None of this contradicts the process
the Unions outlined. That process included fact-checking and
vetting communications and not releasing anything without the
approval of an officer or senior staff employee with authority
to approve them. 47 Care One can point to specific officers or
senior staff who did not do any fact-checking, but that does not
negate the evidence that certain researchers and outside
43
JA 3718–19.
44
JA 7994.
45
JA 2761.
46
JA 5308.
47
JA 7994.
12
counsel did fact-check. 48 There is information in the record,
for example, that fact-checking was “Megan [Thorsfeldt’s]
job.” 49
We have previously affirmed summary judgment
dismissal of a defamation claim where defendants filed
uncontradicted affidavits that “averred that they were
convinced of the truthfulness” of their statements. 50 Here, the
Unions’ affidavits provide sufficient evidence that the affiants
believed that all the material in the advertisements was truthful
and accurate. None of the portions of the record Care One
relies on raises a genuine issue of disputed fact sufficient to
defeat the Unions’ motion for summary judgment.
b. Reckless Disregard
Care One claims the District Court should have looked
beyond the fact-checking procedures because fraud “may be
effected by deceitful statements of half-truths or the
concealment of material facts” even if the text is true. 51 Care
One then argues that we can find specific intent because the
advertisements were “(at best) deceitful half-truths” that
advanced the Unions’ scheme and whose purpose was to “harm
Appellants’ business.” 52
Specific intent “may be found from a material
misstatement of fact made with reckless disregard for the
truth.” 53 But reckless disregard for the truth cannot be inferred
merely from an intent to injure. 54 Rather, it requires “sufficient
evidence to permit the conclusion that the defendant in fact
48
See JA 2642 (vetting was conducted on the research side
and legal side); JA 5134 (accuracy was the responsibility of
“our research team” and “counsel”); JA 3718 (Gladstein
explaining that “my researchers” were responsible for
accuracy).
49
JA 5327.
50
Steaks Unlimited, Inc. v. Deaner, 623 F.2d 264, 276 (3d
Cir. 1980).
51
Appellant Br. at 43 (citing United States v. Ferriero, 866
F.3d 107, 120 (3d Cir. 2017)).
52
Id. at 42.
53
United States v. Coyle, 63 F.3d 1239, 1243 (3d Cir. 1995)
(citation omitted).
54
Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S.
657, 666 n.7 (1989).
13
entertained serious doubts as to the truth of his publication.”55
Failure to investigate before publishing, without more, is not
enough to establish reckless disregard. 56
Care One points to specific ads in claiming that the
Unions cherrypicked facts and printed them without regard for
necessary context. In the four ads in question, Care One
accuses the Unions of wording the ads so that they posed
leading questions implying a negative answer and highlighting
negative information. According to Care One, the ads then
relied upon a non-representative and misleading fact or statistic
for support.
For example, as quoted above, Care One points to the
advertisements targeting its staffing. Those advertisements
ask: “Are HealthBridge Nursing Homes Employing Enough
Caregivers For Our Loved Ones?” The ads then assert that
Care One provided below-average coverage by certified
nursing assistants. 57 The ads omit that Care One facilities
provide above-average hours of coverage by higher-skilled
registered nurses and licensed practical nurses. 58
The law of defamation generally recognizes that a
question, “however embarrassing or unpleasant to its subject,
is not accusation.” 59 To premise liability on a question would
“necessarily ensnare a substantial amount of speech that is
essential to the marketplace of ideas.” 60 Moreover, the
questions’ implied answer is merely an unfalsifiable “opinion
relating to matters of public concern.” 61 Even if the Unions
were using the questions to assert that Care One “understaff[s]”
its facilities, that assertion would merely compare Care One’s
staffing to a subjectively chosen standard.
The same analysis applies to the other questions in the
Unions’ advertisements: “Is HealthBridge Giving Your Loved
55
Id. at 688 (citing St. Amant v. Thompson, 390 U.S. 727, 731
(1968)).
56
Id. (citing St. Amant, 390 U.S. at 731, 733).
57
JA 2491.
58
JA 3348–49, 5642.
59
Abbas v. Foreign Pol’y Grp., LLC, 783 F.3d 1328, 1338
(D.C. Cir. 2015) (citation omitted).
60
Id. at 1339.
61
Weyrich v. New Republic, Inc., 235 F.3d 617, 624 (D.C.
Cir. 2001) (citation omitted).
14
One Anti-Psychotic Drugs?,” 62 “Overbilled at a HealthBridge
Nursing Home?,” 63 and “Who’s in Charge at HealthBridge
Nursing Homes?” 64 These are all questions rather than factual
misrepresentations. They point out a presumed disparity
between HealthBridge’s behavior and some subjective
standard.
Care One suggests that the statistic in the staffing ad is
fraudulent because it implies that Care One understaffs by
relying on information pertaining to the only category of staff
with below-average staffing. Moreover, Amanda Torres-Price,
communications specialist for UHWE, conceded that the
advertisements were “not pretending to be objective.” 65
Care One also points out that the antipsychotics
advertisement suggesting its facilities excessively
administered medications relies on a statistic referring to non-
representative groups of patients, for whom the antipsychotic
drugs were often medically appropriate. The overbilling
advertisements were based on one billing error at only one
facility. And the “Who’s in Charge” advertisements implied
there was an unhealthy amount of turnover but cited turnover
rates roughly in line with a state average. Care One does not
dispute the actual statistics, merely the implications and the
insinuations arising from them.
However, it is neither realistic nor legally required that
either side of a labor dispute will present a balanced view in
advertisements about the other side arising from the dispute.
Moreover, speakers in the public square “have no legal
obligation” to ensure that their statements are balanced. 66 For
better or worse, the law does not hold either party to a labor
dispute to a given level of objectivity. 67 Thus, the Unions did
62
JA 2501.
63
JA 2477.
64
JA 2494.
65
JA 5311.
66
Perk v. Reader’s Dig. Ass’n, Inc., 931 F.2d 408, 412 (6th
Cir. 1991).
67
This does not, of course, license either side to a labor
dispute to say whatever will inflict maximum damage on the
other side with absolutely no regard for the accuracy of such
statements. Here, as we have discussed, the Unions did have
processes in place to maintain a level of accuracy in its public
15
not need to present a balanced view in their advertisements.
For these reasons, we will affirm the District Court’s judgment
as to the claims of mail and wire fraud.
2. Extortion
Care One argues that the District Court erred in granting
the Unions’ motion for summary judgment because, under
RICO, the Unions committed state law extortion through both
sabotage and fear of economic loss. For a violation of state
extortion law to constitute a RICO predicate offense, the
conduct must be “generically classified as extortionate.” 68
Even if a predicate act is alleged, a union can be held liable
only if “clear proof of actual participation in, or actual
authorization of, such acts, or of ratification of such acts after
actual knowledge thereof.” 69 The generic definition of
extortion is “obtaining something of value from another with .
. . consent induced by the wrongful use of force, fear, or
threats.” 70 If an action can be generically classified as
extortionate, then it must violate the state extortion statute to
constitute a predicate act under RICO.
Care One relies on two purported types of extortionate
acts to establish the requisite RICO predicates. 71 It alleges that
the Unions committed extortion under New Jersey,
Massachusetts, and Connecticut law through (1) sabotage, and
(2) fear of economic loss. 72 We will address each claim in turn.
a. Extortion through Sabotage
Care One contends that, based on the timing of the
aforementioned acts of sabotage and the fact that NEHCEU
members had access to both the facilities and patients involved,
a reasonable jury could infer that union members committed
sabotage and that the Unions either authorized these actions or
ratified them. 73 We agree. In doing so, we are fully aware that
pronouncements, so we do not accept the conclusion that
those processes were little more than a Potemkin Village
intended only to provide cover so that the Unions could say
whatever they thought would damage Care One.
68
Scheidler v. Nat’l Org. for Women, Inc., 537 U.S. 393, 409
(2003).
69
29 U.S.C. § 106 (emphasis added).
70
Scheidler, 537 U.S. at 409.
71
18 U.S.C. § 1961(1).
72
See Appellant Br. at 12–14.
73
Id. at 18.
16
any such inference would need to meet the level of proof
required under § 6 of the Norris-LaGuardia Act:
No officer or member of any association or
organization, and no association or organization
participating or interested in a labor dispute,
shall be held responsible or liable in any court of
the United States for the unlawful acts of
individual officers, members, or agents, except
upon clear proof of actual participation in, or
actual authorization of, such acts, or of
ratification of such acts after actual knowledge
thereof. 74
The Supreme Court has explained that “‘authorization’ as used
in § 6 means something different from corporate criminal
responsibility for the acts of officers and agents in the course
or scope of employment.” 75 Rather, Congress intended to
restrict
liability in labor disputes . . . for unlawful acts of
the officers or members [of unions], although
[they] are acting within the scope of their general
authority as such officers or members [of those
unions] . . . except upon clear proof that the
particular act charged, or acts generally of that
type and quality, had been expressly authorized,
or necessarily followed from a granted authority
[by the union] or was subsequently ratified [by
the union] after actual knowledge of its
occurrence. 76
Thus, a labor union cannot be held liable for the actions of its
members (even if those members are officers of the union)
absent “clear proof of actual participation in, or actual
74
29 U.S.C. § 106.
75
United Bhd. of Carpenters v. United States, 330 U.S. 395,
406 (1947).
76
Id. at 406–07. The Court noted that the Senate Committee
viewed this as “‘a rule of evidence,’ not a ‘new law of
agency.’” Id. at 402. However, the distinction is purely
academic for our purposes and does not affect our analysis.
For a thorough discussion of the complete legislative history
of § 6 of the Norris-LaGuardia Act, see id. at 401–03.
17
authorization of, such acts, or of ratification of such acts after
actual knowledge thereof.” 77 This standard requires “clear,
unequivocal, and convincing proof” rather than “a bare
preponderance.” 78 District courts must apply the same
standard at summary judgment that would apply at trial, asking
“whether the evidence presented is such that a jury applying
that evidentiary standard could reasonably find for either the
plaintiff or the defendant.” 79 Accordingly, because § 6 of
Norris-LaGuardia Act requires “clear, unequivocal, and
convincing proof” at trial, the same standard of proof would be
required at the summary judgment level. 80
The Court explained in United Brotherhood of
Carpenters and Joiners of America v. United States that the
limitation set forth in § 6 was intended to
relieve [labor unions] . . . from liability for
damages or imputation of guilt for lawless acts
done in labor disputes by some individual
officers or members of the organization without
clear proof that the organization or member,
charged with responsibility for the offense,
actually participated, gave prior authorization, or
ratified such acts. 81
When Congress enacted the Norris-LaGuardia Act in 1932, it
hoped to “bring some order out of the industrial chaos that had
developed and to correct the abuses that had resulted from the
interjection of the federal judiciary into union-management
disputes on the behalf of management.” 82 Federal courts were
then “regarded as allies of management in [their] attempt to
prevent the organization and strengthening of labor unions; and
in this industrial struggle the injunction became a potent
77
29 U.S.C. § 106.
78
United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 737
(1966).
79
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).
80
See Gibbs, 383 U.S. at 737.
81
United Bhd. of Carpenters, 330 U.S. at 403.
82
Boys Mkts., Inc. v. Retail Clerks Union, Loc. 770, 398 U.S.
235, 251 (1970).
18
weapon that was wielded against the activities of labor
groups.” 83
Moreover, in United Mine Workers of America v. Gibbs,
the Supreme Court noted that while the Labor Management
Relations Act passed shortly after the decision in United
Brotherhood of Carpenters and allowed a less stringent
standard of proof, Congress did not repeal § 6. 84 Rather, it “left
it applicable to cases not arising under the new Act.” 85 The
Supreme Court took that opportunity to reiterate that the “fear
that unions might be destroyed if they could be held liable for
damage done by acts beyond their practical control” was the
“driving force” behind § 6. 86 It is therefore now beyond
contention that common-law principles of agency and
respondeat superior have no place in assessing liability of
labor unions for the acts of their members or officers for claims
(such as the ones before us) not falling under the LMRA.
As this case arises under RICO, the applicable standard
of proof is governed by § 6 of Norris-LaGuardia. 87 The
District Court did indeed err in employing the less stringent
LMRA standard. 88 In doing so, it cited Carbon Fuel Co. v.
United Mine Workers of America, which explained that, under
the LMRA, liability is limited to those who had “authorized,
participated in, or ratified” the conduct. 89 However, that error
benefitted Care One because it afforded Care One a less
stringent standard of proof for surviving summary judgment.
Since the investigation resulted in no union members being
identified as suspects, we will review whether a jury could
83
Id. at 250.
84
Gibbs, 383 U.S. at 736.
85
Id.86
Id. at 736–37.
87
Id. at 736. See United Bhd. of Carpenters, 330 U.S. at 403(applying § 6 to Sherman antitrust prosecution); United States
v. Kemble, 198 F.2d 889, 892 (3d Cir. 1952) (applying § 6 to
Hobbs Act extortion prosecution).
88
Care One, 2019 WL 5541410, at *6 (“[D]efendants can
only be held responsible for the actions of their members if
the unions ratified or authorized the acts at issue.”) (citing
United States v. White, 322 U.S. 694, 702 (1944); Carbon
Fuel Co. v. United Mine Workers of Am., 444 U.S. 212, 216–
17 (1979)).
89
Carbon Fuel, 444 U.S. at 216.
19
reasonably find clear proof that the Unions either authorized or
ratified the sabotage on this record.
1. Authorization
As a threshold matter, Care One here argues that,
because the acts committed on the eve of the strike at the three
facilities targeted were similar to the sabotage allegedly
connected with a strike at another employer’s NEHCEU-
unionized facility in 2001, we can connect those instances of
sabotage and conclude that the Unions authorized the conduct.
For support, Care One relies in part upon the “mass action”
theory, and cites Eazor Express, Inc. v. International
Brotherhood of Teamsters. 90 Under the mass action theory, an
otherwise inexplicable or improbable pattern of coordinated
conduct by union members can be explained by assuming that
the pattern resulted from authorization from the union.91 The
premise is that “large groups of [people] do not act collectively
without leadership and that a functioning union must be held
responsible for the mass action of its members.” 92
The mass action theory emerged to address situations in
which thousands of members in different locations
simultaneously act in concert. 93 In contrast, here, there is no
evidence that anything like that number of people engaged in
the acts of sabotage and vandalism, and Care One does not
contend otherwise. 94 Rather, Care One insists that it is
applying the logic underlying the mass action theory and
relying on common sense based on the timing and apparent
coordination of the actions rather than the mass action theory
per se. 95 However, Care One cites no cases that would justify
expanding the logic of the mass action theory to the
circumstances here, and we have found none. The number of
actors here falls woefully short of the numbers needed to infer
that the Unions had to have orchestrated these acts. The
90
Eazor Express, Inc v. Int’l Bhd. of Teamsters, 520 F.2d
951, 963 (3d Cir. 1975), overruled on other grounds by
Carbon Fuel, 444 U.S. 212.
91
Id.92
Id.93
See Consolidation Coal Co. v. Local 2216, 779 F.2d 1274,
1275 (7th Cir. 1985) (applying mass action to when 350,000
to 450,000 coal miners went on strike).
94
See Care One, 2019 WL 5541410, at *6.
95
Reply Br. at 6–7.
20
number is just too small for the presumption of centralized
union coordination to apply under that theory. Moreover, even
if we were to agree that the timing of the acts suggests unseen
coordination, there is nothing to tie it to the Unions rather than
a handful of individual union members acting on their own.
The contrary assumption on which Care One relies is far too
tenuous to rise to the level of substantial proof that § 6 requires.
However, notwithstanding our rejection of Care One’s
attempt to rely on the logic underlying the mass action theory,
we nevertheless conclude that the totality of the circumstances
here is enough to allow a reasonable jury to find sufficient
proof that the Unions authorized such actions—even applying
the heightened burden arising from § 6. As noted above, we
must review the evidence in the light most favorable to Care
One in reviewing the grant of summary judgment to the
Unions. In doing so, we are cognizant of the fact that the
Connecticut State’s Attorney’s investigation identified no
suspects, let alone any union-member suspects. 96 And, we are
of course aware that union membership alone cannot tie the
actions of any members to the Unions, nor give rise to a
presumption that the Unions authorized the acts of any of its
members. However, the evidence is mutually reinforcing, each
piece strengthening the inferences to be drawn from the other.
Though no one piece of evidence is sufficient by itself, we must
view the evidence in the aggregate. When we review this
record in that context, it is clear that a reasonable jury could
find there is enough to establish clear proof that members of
the Unions committed the acts of vandalism and sabotage and
that the Unions authorized that conduct.
This evidence includes the Unions’ prior statements, the
coordinated timing of the acts of sabotage, and subsequent
actions that could be interpreted as obfuscation by the Unions.
It is undisputed that, the night before multiple union-organized
strikes were scheduled to begin, acts of sabotage
simultaneously occurred at three Care One facilities. A jury
could conclude that was not just a serendipitous coincidence.
We realize, of course, that this may have been the result of
coordination among various union members acting
independently of the Unions. However, there is also evidence
that, in advance of that sabotage, the Unions engaged in
inflammatory rhetoric and encouraged labor organizers to
96
JA 5779; JA 6840; JA 6843.
21
“become angry about their working conditions.” 97 They also
encouraged members to take on “greater and more militant
levels of activity.” 98 The president of one of the Unions told
workers that “the law takes too long” and that the Unions
“could be destroyed by the time the law was able to stop [Care
One’s] behavior.” 99 That could certainly be interpreted as a
call to engage in illegal acts rather than rely only upon the
collective bargaining process. Thus, when viewed in the light
most favorable to Care One, a jury could reasonably see those
communications and the multiple, nearly simultaneous acts of
sabotage right before a strike as clear proof of the Unions’
authorization of the sabotage. Indeed, a jury could conclude
with the requisite quantum of proof under § 6 that the Unions
had issued “a call to arms,” and the District Court’s ruling to
the contrary must be vacated.
2. Ratification
As explained above, liability can also be established if
the Unions ratified the sabotage even if there is insufficient
evidence that they authorized it. Although it is a very close
call, we conclude that the undisputed facts viewed in the light
most favorable to Care One could be viewed as clear proof that
the Unions ratified the sabotage. To establish ratification, Care
One must prove “either that the union approved the violence
which occurred, or that it participated actively or by knowing
tolerance in further acts which were in themselves actionable
under state law or intentionally drew upon the previous
violence for their force.” 100
Care One argues that a reasonable jury could find the
Unions ratified the sabotage because they did not attempt to
assist and failed to cooperate with the police investigation of
the sabotage. It points to an email from Deborah Chernoff,
Communications Director of one of the Unions, in which
Chernoff wrote that the Unions “sought to ‘mudd[y] the
waters’ and ‘rebut, or at least confuse, the sabotage claims’”
97
JA 5852, a facilitator teaching document with the goal of
“answer[ing] tough questions and redirect[ing] conversations
to an organizing agenda.”
98
JA 5849, a supervisor’s evaluation form for an individual
organizer.
99
Appellant Br. at 22.
100
Gibbs, 383 U.S. at 739.
22
during the investigation. 101 This is a mischaracterization of
that email. Chernoff is actually discussing a FOIA request that
the Unions made to the Connecticut Department of Public
Health. She described the information from the Department of
Public Health in response to the Unions’ FOIAs—not the
Unions’ efforts—as “mudd[ying] the waters.” 102 She
explained that this information “muddie[d] the waters and
support[ed] the contention of the workers that” patients may
have removed their identifying bracelets themselves rather
than saboteurs. 103
Care One also points to the email from Chernoff to Chas
Walker, Elected Organizer of UHWE, and union leaders. That
email appears to respond to Walker’s suggestion that the
Unions launch their own investigation or actively seek to
participate in the police investigation. Chernoff wrote that
“[the Unions] ha[ve] an obligation to [their] members even
when they are totally in the wrong, if that proves to be the
case.” 104 Although that message by itself argues against
ratification, the email also stated that it would be “a very bad
idea” to participate in the police investigation. 105 Although it
is a very close call, we think it best that a jury assess the import
and intent of the declaration that it would be a very bad idea to
participate in the police investigation in context with any other
evidence on this record, in assessing whether there is clear
proof that the Unions ratified the acts of sabotage.
Similarly, a jury should assess the significance of Care
One’s argument that union officials made “no concrete effort
to disassociate themselves from the misconduct.” 106 This
argument relies on Yellow Bus Lines v. Drivers, Chauffeurs &
Helpers Loc. Union 639 as support. 107 In Yellow Bus Lines,
there was evidence that the union’s business director, James
Woodward, had engaged in several acts of vandalism including
101
Appellant Br. at 25 (alteration in original) (citing JA
5842).
102
JA 5842.
103
JA 5842.
104
JA 5831 (emphasis added).
105
JA 5831.
106
Appellant Br. at 26.
107
883 F.2d 132, 136 (D.C. Cir. 1989), on reh’g en banc, 913
F.2d 948 (1990).
23
threatening to burn company buses. 108 The president of the
union received a letter describing “with particularity
‘numerous incidents of threats, violence, property damage, and
verbal abuse’ by Woodward and other strike participants.” 109
There was no evidence that the unions acted to investigate or
discipline Woodward (or any other strikers). To the contrary,
“Woodward remained on-site as the [union’s] man in
charge.” 110 The court held that evidence was sufficient to show
that the union was liable for Woodward’s threatening and
violent actions because the union’s inaction, after learning
about his conduct, ratified it. 111
The key difference here is that the later investigation
yielded no suspects and implicated no union members. 112 Still,
it is theoretically possible that a jury could conclude that the
lack of union-member suspects is the result of the Unions’
failure to investigate. We are thus persuaded that, as in Yellow
Bus Lines, the jury could understand the Unions’ perceived
“blind eye” as ratification of the conduct.
We are aware that there is also evidence that the Unions
outright condemned this behavior, rather than ratified it. For
example, Chernoff wrote to fellow employees, “Of course
anyone with a peasized brain would realize this isn’t a tactic
we would undertake.” 113 She also wrote that the allegations of
vandalism were “very serious indeed” and that those
responsible “should be held fully accountable.” 114 Although
this is an expression of disapproval, a jury could nevertheless
conclude that these statements were made only to provide
“cover” and that any union members participating in the
sabotage would have understood them to be no more than that.
This is especially true given the union leader’s statements that
it was a very bad idea to participate in the police investigation.
Care One also relies upon evidence that the Unions went
as far as “authoring a baseless article suggesting that [Care
108
Id. at 135.
109
Id. at 136.
110
Id.
111
Id.
112
See, e.g., JA 5779.
113
JA 6825.
114
JA 1068.
24
One] ‘staged the sabotage to make [NEHCEU] look bad.’” 115
The article, written by Chernoff, attributes the “staged the
sabotage” quotation to union members who actually
disbelieved the allegations of sabotage. 116 Nevertheless, we
cannot conclude that a jury should disregard the fact that the
Unions published such an article when considering if Care One
established that the Unions ratified the acts of sabotage.
Accordingly, we hold that the District Court erred in
determining that the totality of the evidence here is insufficient
to support a claim that the Unions ratified the alleged acts of
sabotage.
b. Extortion Through Fear of Economic Loss
Care One also argues that the Unions are liable for
extortion through fear of economic loss under RICO because
they (1) “engaged in wrongful conduct by using threats of
regulatory interference and criminal prosecution to seek
leverage over” Care One, and (2) sought to “drive patients
away from [Care One’s] facilities and to . . . harm . . . one of
[Care One’s] owners” through “campaigns of negative
publicity and harassment.” 117 It is uncontested that the Unions
authorized both its use of the regulatory and criminal processes
and the public speech and publicity campaign.118 Thus, the
clear proof standard under § 6 of the Norris-LaGuardia Act is
satisfied if such actions constitute extortion under state law and
are generically classifiable as extortionate. 119
The generic definition of extortion is “obtaining
something of value from another with his consent induced by
the wrongful use of force, fear, or threats.” 120 The District
Court relied on United States v. Enmons 121 to determine
whether the Unions’ conduct was wrongful. 122 Enmons
created the “claim-of-right” defense—a carve-out from Hobbs
115
Appellant Br. at 25–26 (second alteration in original)
(citing JA 5825).
116
JA 5825.
117
Appellant Br. at 13–14.
118
The Unions have never denied their role in these efforts.
See generally Appellee Br.
119
29 U.S.C. § 106.
120
Id. at 409–10 (emphasis added).
121
410 U.S. 396 (1973).
122
Care One, 2019 WL 5541410, at *7.
25
Act liability for a union pursuing legitimate labor objectives. 123
Enmons does not control here, however, since there, the
Supreme Court interpreted Hobbs Act extortion, not the
generic definition of extortion, and it relied heavily on the
Hobbs Act’s legislative history indicating a congressional
intent to steer the statute’s sanctions away from legitimate
labor activity. 124 Nevertheless, Enmons provides helpful
guidance because extortion under the Hobbs Act and the
generic definition both include a “wrongful use of fear”
element. 125 Our subsequent application of Enmons outside the
labor context also suggests that it provides appropriate
guidance here. 126
As mentioned above, in determining whether the
“wrongful” element had been satisfied under the Hobbs Act,
the Enmons Court formulated the “claim of right defense.” 127
The claim of right defense hinges on a defendant’s lawful claim
to the objective sought through the alleged extortionate acts. 128
Though known as a “defense,” this “is not actually an
‘affirmative defense’ in this context[, but] an interpretation of
what ‘wrongful use of fear’ . . . means.” 129 In other words, the
wrongful use of fear element is not satisfied if a defendant had
a lawful claim to the objective sought. As explained below,
outside the Hobbs Act labor context, we have found that this
lawful claim requires that the defendant have a right to both the
123
Enmons, 410 U.S. at 400.
124
Id. at 401–08.
125
Compare 18 U.S.C. § 1951(b)(2) (“obtaining of property
from another, with his consent, induced by wrongful use of
actual or threatened force, violence, or fear, or under color of
official right”), with Scheidler, 537 U.S. at 410 (“obtaining
something of value from another with his consent induced by
the wrongful use of force, fear, or threats”).
126
See, e.g., Brokerage Concepts, Inc. v. U.S. Healthcare,
Inc., 140 F.3d 494, 523 (3d Cir. 1998); United States v.
Tobin, 155 F.3d 636, 640 (3d Cir. 1998).
127
Enmons, 410 U.S. at 400.
128
Id. See also United States v. Cerilli, 603 F.2d 415, 419
(3d Cir. 1979).
129
United Broth. of Carpenters and Joiners of Am. v. Bldg.
and Const. Trades Dep’t, 770 F.3d 834, 844 (9th Cir. 2014)
(citing Brokerage Concepts, Inc., 140 F.3d at 523).
26
objective sought and the means used in pursuing such
objective.
We have applied this claim of right defense outside the
labor context for situations “involv[ing] solely the allegation
of the use of economic fear in a transaction between two
private parties.” 130 First, in United States v. Cerilli, we found
that “although the solicitation of political contributions is not
inherently ‘wrongful,’” it was wrongful for defendants to
condition the leasing of government equipment on
contributions because they did not have a “‘lawful claim’ to
those contributions.” 131 Similarly, in Brokerage Concepts, Inc.
v. U.S. Healthcare, Inc., we found that an extortion claim could
survive only if the plaintiff had a right to pursue its business
interest free of the fear that it would be excluded from a
healthcare provider network. 132 We concluded that no such
right existed because Pennsylvania did not require all
interested providers be included in the network. 133 The
defendant had thus acted under a “claim of right” because it
“had the right to exchange the valuable consideration of
inclusion in its network in return for consideration from” the
plaintiff. 134 In United States v. Tobin, we later interpreted
Brokerage Concepts as holding that “the claim-of-right
defense applies to non-labor cases, so long as the threats
involved are purely economic.” 135
Our inquiry here is aided by contrasting Brokerage
Concepts with Tobin. 136 In Tobin, we concluded that the claim
of right defense “plainly” did not apply where a defendant
“threatened unrelated lawsuits alleging sexual harassment”
instead of “legal action to enforce the oral contract that she
130
Brokerage Concepts, 140 F.3d at 503. See also Cerilli,
603 F.2d at 419 (finding that the claim of right defense did
not apply where a government’s leasing of equipment was
conditioned on political payments).
131
Cerilli, 603 F.2d at 419.
132
Brokerage Concepts, 140 F.3d at 503.
133
Id.
134
Id. at 526. Cf. Cerilli, 603 F.2d at 419 (finding that the
defendant had not acted under a claim of right because it did
not “ha[ve] a ‘lawful claim’ to th[e] contributions” sought).
135
155 F.3d at 640.
136
Id.27
claimed existed.” 137 In doing so, we explained that the
plaintiffs “had a preexisting right to be free from the threats
invoked[, which] . . . went far beyond the hard bargaining
tactics utilized in Brokerage Concepts.” 138 We also
distinguished the acts in Tobin from those in Viacom
International, Inc. v. Icahn in which “a corporate raider . . .
amassed Viacom stock and threatened a corporate takeover
unless the company purchased his stock at a premium over the
market price.” 139 The Viacom court held that the claim of right
defense applied because the plaintiff “did not have a
preexisting right to be free from the threat of a takeover.” 140
Applying those cases here, we ask whether Care One
had the right to pursue its business interests free of the fear that
the Unions would (1) use the regulatory and criminal
processes, and/or (2) campaign using negative advertising.
More specifically, drawing from United States v. Jackson, 141
we ask whether there is a reasonably close relationship—a
nexus—between the alleged extortionate acts and the objective
sought. In Jackson, the Court of Appeals for the Second
Circuit concluded that “where a threat of harm to a person’s
reputation seeks money or property to which the threatener
does not have, and cannot reasonably believe she has, a claim
of right, or where the threat has no nexus to a plausible claim
of right, the threat is inherently wrongful.” 142 This test tracks
137
Id.138
Id.139
Id. (citing 747 F. Supp. 205 (S.D.N.Y. 1990), aff’d on
other grounds, 946 F.2d 998 (2d Cir. 1991)).
140
Id. (citing Viacom, 747 F. Supp. at 213).
141
180 F.3d 55 (2d Cir. 1999).
142
Id. at 71.
28
Enmons, 143 Cerilli, 144 Brokerage Concepts, 145 Tobin, 146 and
Viacom. 147
However, we must also consider any potential chilling
effect or further risk of “erosion of the associative rights or at
least the full exercise of such rights.” 148 This, of course, is not
a new concern in terms of civil RICO generally. 149 But we
143
In Enmons, violence during a lawful strike had a
reasonably close relationship to the union’s demand for
higher wages and was not considered wrongful. See 410 U.S.
at 411.
144
In Cerilli, leasing of government equipment did not have a
reasonably close relationship to conditional political
payments and was considered wrongful. See 603 F.2d at 419.
145
In Brokerage Concepts, excluding from the provider
network had a reasonably close relationship to Brokerage
Concepts’s demands to have the pharmacy use its subsidiary
as its third-party administrator and was not considered
wrongful. See 140 F.3d at 523.
146
In Tobin, threatening the plaintiff with unrelated lawsuits
regarding sexual harassment was explicitly described as
unrelated (i.e., no reasonably close relationship) to Tobin’s
demand to enforce the oral contract and was considered
wrongful. 155 F.3d at 640–41 (“[S]he threatened unrelated
lawsuits . . . .”).
147
In Viacom, threatening a corporate takeover was directly
related to a corporate raider’s demand that the company
purchase his stock at a premium and was not considered
wrongful. See 747 F. Supp. at 213–14.
148
David B. Sentelle, Civil RICO: The Judges’ Perspective,
and Some Notes on Practice for North Carolina Lawyers, 12
CAMPBELL L. REV. 145, 165 (1990).
149
See Marvin L. Astrada, Examining the Present Security-
Liberty Nexus: Civil RICO—Remedy to Procure Security or
Threat to Civil Liberty?, 36 QUINNIPIAC L. REV. 357, 377–81
(2018) (critiquing civil RICO’s potential encroachment on
First Amendment freedoms of speech and assembly);
Sentelle, supra note 162, at 161 (“RICO devours traditional
and basic concepts of American jurisprudence, including . . .
First Amendment rights of free speech and association [and]
labor law . . . .”). See also Yellow Bus Lines, Inc., 883 F.2d at
145 (Edwards, J., concurring) (“I have nagging doubts about
29
must be particularly mindful given that this case involves labor
unions—entities that have historically been granted special
protections because they sometimes employ tactics that often
inflict economic loss on employers in order to advance the
legitimate interests of the union’s members. In fact, a strike is
the quintessential example of an action that is taken to instill
fear of economic loss and possibly even inflict economic harm
on an employer who might otherwise not agree to a union’s
demands. Thus, we must be careful not to impose liability for
either protected commercial speech, peaceful off-site
picketing, or threats of economic harm related to a labor
dispute such as a strike or the threat of a strike.
Viewing the facts in the light most favorable to Care
One, drawing all reasonable inferences in Care One’s favor,
and being mindful of the need for unions to sometimes resort
to threat of economic harm, there remains a question of fact as
to whether the Unions committed extortion through fear of
economic loss. As stated above, our inquiry first asks whether
the Unions’ use of the regulatory and criminal processes and
campaigns of negative advertising was wrongful. Again, to do
so we must assess whether Care One had the right to pursue its
business interests free of the fear that the Unions would (1) use
the regulatory and criminal processes, and (2) campaign using
negative advertising. Clearly, Care One has no categorical
right to pursue its business interests free of the fear that the
Unions could use the regulatory and criminal processes as
these processes can hold individuals and entities accountable
for violating laws and regulations. 150 Additionally, Care One
did not have a limitless right to pursue its business interests
free of the fear that the Unions could use negative advertising
campaigns. Not only do such campaigns implicate protected
speech, but they are also a frequent component of labor strife
including strikes. 151 Indeed, pickets circling with signs
disparaging an employer’s working environment or allegedly
our holding that ‘the strike and organizational effort were
“affairs” of Yellow Bus,’ and that, consequently, plaintiff
might be able to state a cause of action under section 1962(c)
of RICO. This result seems strangely at odds with certain
fundamental precepts of labor law and collective
bargaining.”).
150
See 29 U.S.C. § 158(a)(4).
151
See id. §§ 157, 158(a)(1).
30
poor wages is a common sight outside of businesses that have
been hit with a strike. Because, generally speaking, Care One
did not have a right to pursue its business interests free of these
fears, the Unions had a right to pursue favorable terms in a
collective bargaining agreement by employing such tactics, but
only if there is a nexus between this objective and the means
used.
Turning first to the Unions’ use of regulatory and
criminal processes, it is unclear whether the Unions were using
these means to pursue the aforementioned legitimate
objectives. There is, of course, nothing wrong with the Unions
exercising their right to report violations of the law through
either regulatory or criminal processes. But if the Unions
implicitly intended to use these channels as a means to pursue
their objective, then liability would turn on whether there is a
nexus between using these processes and pursuing favorable
terms in a CBA. The record, however, is not conclusive on that
issue. Therefore, this is a question of fact that a jury should
decide, and summary judgment in favor of the Unions was
inappropriate. 152
Turning next to the Unions’ campaigns, Care One
points to the Unions’ advertising campaign and the campaign
directed at Care One’s owner and CEO, Daniel Straus as
campaigns “of negative publicity and harassment” constituting
extortion. Considering first the advertising campaign, the
152
For example, the Unions called Senator Blumenthal
without notice to Care One, which points towards a finding
that this was not a means to pursue favorable terms in a CBA.
See Care One, 2019 WL 5541410, at *8 (citing D.E. 402-4 ¶¶
61–64). But they had urged him to carbon copy the CEO of
Care One on a relevant email, which was arguably for the
purpose of alerting Care One that they intended to pursue
regulatory processes if Care One did not comply with union
demands. JA 5613. There is also no evidence that the
Unions’ pursuit of criminal charges against Care One implied
“that the Unions would continue their coercive pressure
unless Appellants acceded to the Unions’ demands.”
Appellant Br. at 31–32. Without an explicit objective or
something akin to a “wink and a nod,” whether this was “part
of [a] broader campaign to exert pressure on [Care One]” is
unclear and would thus need to be decided by a jury. Id. at 33
n.7.
31
relationship of that campaign to a legitimate labor objective is
clear. The Unions argue that they never made a threat to force
Plaintiffs to comply with any demand, and the record as to the
advertising campaign is not to the contrary.153 They claim that
the objective of this campaign was to pursue higher wages and
better benefits for its members, 154 and again, Care One has not
presented evidence to the contrary.
Care One also points to the campaign directed at Straus.
This included “targeting [his] unrelated business ventures and
philanthropic activities,” “block[ing] the development of a
condominium project in which Mr. Straus had invested,”
“purchasing radio advertisements in Puerto Rico to disparage
two unrelated businesses Mr. Straus owned there,” and
“organizing disruptive protests around NYU School of Law,
where Mr. Straus was a trustee and benefactor.” 155 As the
District Court explained, these activities likely drew “public
attention to Straus’ role in Plaintiffs’ business and labor
practices.” 156 Care One’s only evidence to the contrary is that
“the Unions could not [have] hope[d] to derive any legitimate
benefit from these pressure tactics” as “the Unions did not
represent employees in connection with any of the unrelated
ventures and philanthropic activities that they targeted.” 157
This ignores the clear nexus between pressure tactics that drew
attention to the owner of Care One’s business and labor
practices and the Unions’ objective of receiving higher wages
and better benefits from Care One. The Unions could logically
assume that pressuring Straus in this manner would increase
the likelihood that he would cause Care One to capitulate to the
Unions’ demands. Accordingly, as is true with the advertising
campaign, we cannot find that tactic wrongful as a matter of
law under the generic definition of extortion. Therefore,
summary judgment in favor of the Unions was appropriate on
these claims.
IV. Conclusion
For the reasons set forth above, we will vacate in part
and affirm in part and remand to the District Court for further
proceedings consistent with this opinion.
153
Appellee Br. at 29.
154
Id. at 8.
155
Appellant Br. at 34.
156
Care One, 2019 WL 5541410, at *8.
157
Appellant Br. at 35.
32
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