Maribel Delrio-Mocci v. Connolly Properties Inc

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 09-4541
_____________
MARIBEL DELRIO-MOCCI; LINDA ELLIOT; ROBERT
BOLMER; CHARLSEY SHEPPARD
v.
CONNOLLY PROPERTIES INC; DAVID M. CONNOLLY;
DANA AYALA; DANIA MOLINA
ROBERT BOLMER,
Appellant
_____________
On Appeal from the District Court
for the District of New Jersey
(No. 2:08-cv-02753)
District Judge: Honorable William J. Martini
___________
Argued on October 5, 2011
Before: McKEE, Chief Judge, and FUENTES and
GREENBERG, Circuit Judges
1
(Opinion Filed: February 24, 2012)
Michael M. Hethmon
Garrett R. Roe (ARGUED)
Immigration Reform Law Institute
25 Massachusetts Avenue, NW Ste. 335
Washington, DC 20001
Attorneys for Appellant
Robert M. Palumbos (ARGUED)
Duane Morris LLP
30 South 17th Street
Philadelphia, PA 19103
Marco A. Gonzalez, Jr.
Duane Morris LLP
744 Broad Street, Suite 1200
Newark, NJ 07102
Juan Cartagena
Jose Perez
Foster Maer
Ghita Schwarz
LationJustice PRLDEF
99 Hudson Street, 14th Floor
New York, NY 10013
Attorneys for Amicus Curiae the Latin American
Coalition, Inc. – Appellee
2
Edward Barocas
Jeanne LoCicero
Alexander Shalom
American Civil Liberties Union of New Jersey Foundation
P.O. Box 32159
Newark, NJ 07102
Lee Gelernt
Omar Jadwat
American Civil Liberties Union Foundation Immigrants‟
Rights Project
125 Broad Street, 18th Floor
New York, NY 10004
Lori Nessel
Seton Hall Law School Center for Social Justice
One Newark Center
Newark, NJ 07102
Janice MacAvoy
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
Eunice Lee, Esq.
1563 Massachusetts Avenue
Cambridge, MA 02138
Attorneys for Amici Curiae the New Jersey Institute for
Social Justice, et al. – Appellee
3
OPINION OF THE COURT
Fuentes, Circuit Judge:
Richard Bolmer filed suit against the property
managers of Connolly Properties, Inc., alleging that they
conspired to harbor illegal aliens and to encourage or induce
illegal aliens to reside in the United States in violation of
federal law. As a result of the Property Managers‟ conduct,
Bolmer claims his apartment complex fell into disrepair,
defects and violations were no longer fixed, common areas
were rarely cleaned, and criminal activity went unreported.
Thus, he says he suffered injury to his leasehold property.
The District Court granted the Property Managers‟ Motion to
Dismiss, holding that Bolmer failed to state a claim upon
which relief could be granted, and he now appeals. For the
reasons that follow, we will affirm.
I.
A.
Mr. Bolmer has resided in the Pingry Arms building in
Plainfield, New Jersey since February 2004. At some point
after he moved in, the apartment building came under the
management of Connolly Properties.1 Bolmer alleges that,
1
The date when this change in management occurred is not
revealed in the record.
4
after Connolly Properties began managing his building, the
apartment complex fell into disrepair. Specifically, he claims
that Connolly Properties provided inadequate heat; failed to
repair locks, his air conditioner, and the roof; failed to
regularly clean common areas; allowed the building to
become infested with bugs and rodents; permitted
overcrowding, flooding, and mold; and turned a blind eye to
criminal activity on the premises.
Bolmer asserts that, no later than January 2006, the
Property Managers developed a scheme wherein they actively
sought out aliens lacking lawful immigration status as
prospective tenants. They did so, he says, by hiring a
Spanish-speaking leasing agent and directing her to handwrite
flyers in Spanish to advertise vacancies. Bolmer claims that
the Property Managers told the leasing agent to ask all
Spanish-speaking prospective tenants whether they were in
this country lawfully and to exempt any aliens not lawfully
present from the normal requirements of presenting
identification and submitting to commercial background
screenings. According to Bolmer, the Property Managers
specifically sought out these individuals as tenants because
they believed that they were less likely to complain about
poor housing conditions or to report housing code violations
to the authorities. He maintains that, by renting a substantial
number of apartments to aliens not lawfully present, the
Property Managers were able to allow their buildings to
deteriorate into “slum-like conditions” without offering their
tenants any reduction in rent. Bolmer further asserts that the
Property Managers segregated those tenants whom they
believed to lack lawful immigration status into particular
buildings “to avoid their detection by law enforcement and
other officials.” Appellant‟s Br. 16. He maintains that the
5
Property Managers “acted on a belief that „mixing‟ a largely
Hispanic illegal alien tenant population among African-
American citizen tenants would provoke disturbances and
fights caused by animus between citizens and illegal aliens,
and result in entry by law enforcement officer [sic] onto the
premises to conduct investigations and arrests.” Id. at 17.
B.
Plaintiffs filed this suit in June 2008 and subsequently
amended their complaint twice, filing their Second Amended
Complaint in December 2008. In Count I, Bolmer alleged
that the Property Managers violated the conspiracy provision
of the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1962(d). Specifically, he claimed that
the Property Managers entered into a conspiracy to engage in
an “Illegal Alien Rental Scheme” by renting apartments to
aliens not lawfully present under the theory that they were
less likely to complain about their housing conditions (or to
demand a rent reduction in light of those conditions). The
alleged result of this conspiracy was to deny Bolmer and
other lawful tenants the full value of their leasehold by
enabling the Property Managers to keep the apartment
complex in poor condition without reducing rents.
The Property Managers filed a Motion to Dismiss
Count I under Federal Rule of Civil Procedure 12(b)(6). The
District Court granted their motion, dismissing Count I with
prejudice and denying Bolmer‟s Motion for Leave to File a
Third Amended Complaint. The District Court held that
Bolmer failed to allege the predicate act of harboring and that
he therefore failed to state a RICO conspiracy claim upon
which relief could be granted. Bolmer filed a Motion for
6
Reconsideration, which the District Court denied. Bolmer
then filed a motion for partial final judgment on the District
Court‟s April and September Orders, pursuant to Federal Rule
of Civil Procedure 54(b), which the Court granted.
Bolmer now appeals the District Court‟s decision.2
II.
We exercise plenary review over the District Court‟s
grant of defendants‟ motion to dismiss. Warren Gen. Hosp.
v. Amgen, Inc., 643 F.3d 77, 83 (3d Cir. 2011). “In reviewing
a dismissal under Federal Rule of Civil Procedure 12(b)(6),
„we accept all factual allegations as true [and] construe the
complaint in the light most favorable to the plaintiff.‟” Id. at
84 (quoting Pinker v. Roche Holdings, Ltd., 292 F.3d 361,
374 n.7 (3d Cir. 2002)). A motion to dismiss pursuant to
12(b)(6) may be granted “only if, accepting all well-pleaded
allegations in the complaint as true and viewing them in the
light most favorable to the plaintiff, a court finds that
plaintiff‟s claims lack facial plausibility.” Id. (citing Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)).
Though a complaint “does not need detailed factual
allegations, . . . a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550 U.S. at 555.
On appeal, Bolmer argues that the District Court erred
in finding that he failed to allege a pattern of racketeering
activity. Bolmer argues that he adequately pled two RICO
2
The District Court had jurisdiction pursuant to 28 U.S.C. §
1331. We have appellate jurisdiction pursuant to 28 U.S.C. §
1291.
7
predicate acts. First, he asserts that the Property Managers
violated 8 U.S.C. § 1324(a)(1)(A)(iii), which prohibits a
person from “conceal[ing], harbor[ing], or shield[ing] from
detection, or attempt[ing] to conceal, harbor, or shield from
detection” an alien who has illegally entered or remained in
the United States, “in any place, including any building or
any means of transportation.” Second, Bolmer asserts that
the Property Managers violated 8 U.S.C. § 1324(a)(1)(A)(iv),
which prohibits a person from “encourag[ing] or induc[ing]
an alien to . . . reside in the United States, knowing or in
reckless disregard of the fact that such . . . residence is or will
be in violation of law.” We address each of these arguments
in turn.
A.
Under 8 U.S.C. § 1324(a)(1)(A)(iii) a person is
criminally liable if she,
knowing or in reckless disregard of the fact that
an alien has come to, entered, or remains in the
United States in violation of law, conceals,
harbors, or shields from detection, or attempts
to conceal, harbor, or shield from detection,
such alien in any place, including any building
or means of transportation.
We first addressed the question of what conduct constitutes
the crime of harboring in United States v. Ozcelik, 527 F.3d
88 (3d Cir. 2008). In that case, Hakan Ozcelik was charged
with harboring after he gave general advice to “stay low” to
an individual whom he knew to be in the United States
illegally. Ozcelik, 527 F.3d at 97. We reversed Ozcelik‟s
8
harboring conviction, holding that “the terms „shielding,‟
„harboring,‟ and „concealing‟ under § 1324 encompass
conduct „tending to substantially facilitate an alien‟s
remaining in the United States illegally‟ and to prevent
government authorities from detecting the alien‟s unlawful
presence.” Id. (quoting United States v. Rubino-Gonzalez,
674 F.2d 1067, 1073 (5th Cir. 1982)). We added that
“[h]olding Ozcelik criminally responsible for passing along
general information to an illegal alien would effectively write
the word „substantially‟ out of the test we have undertaken to
apply.” Id. at 101.
We have since reaffirmed our commitment to the test
laid out in Ozcelik. See United States v. Cuevas-Reyes, 572
F.3d 119 (3d Cir. 2009); United States v. Silveus, 542 F.3d
993, 1003 (3d Cir. 2008) (noting that “cohabitation with [an
alien lacking lawful immigration status], taken alone, does
not constitute „harboring‟ within the meaning of the statute”).
Moreover, in Lozano v. City of Hazleton, we specifically
noted that
“harboring” requires some act of obstruction
that reduces the likelihood the government will
discover the alien‟s presence. It is highly
unlikely that a landlord’s renting of an
apartment to an alien lacking lawful
immigration status could ever, without more,
satisfy this definition of harboring. Renting an
apartment in the normal course of business is
not in and of itself conduct that prevents the
government from detecting an alien‟s presence.
9
Lozano v. City of Hazleton, 620 F.3d 170, 223 (3d Cir. 2010),
vacated on other grounds, City of Hazleton v. Lozano, 180 L.
Ed. 2d 243 (2011) (emphasis added).3
Thus, to the extent that they simply rented apartments to
aliens not lawfully present, the Property Managers cannot be
said to have committed the crime of harboring.
Bolmer argues that the the Property Managers did
“much more than merely rent[]” apartments to undocumented
individuals in that they “set up a criminal scheme which (1)
specifically targeted illegal aliens as prospective tenants . . .
and (2) which steered illegal aliens into certain properties for
the express purpose of preventing authorities from detecting
the presence of illegal aliens on their properties.” Appellant‟s
Br. 8. In support of his claim that this conduct constitutes
harboring, Bolmer directs our attention to cases from our
sister circuits that have found harboring violations. Indeed,
other circuits (some of which have defined “harboring” more
broadly than we have in Ozcelik and other cases) have found
defendants to be guilty of harboring in a variety of situations.
3
While the Supreme Court recently vacated Lozano and
remanded it to this Court for further consideration in light of
its opinion in Chamber of Commerce v. Whiting, 131 S. Ct.
1968 (2011), Lozano‟s reasoning regarding harboring still
provides us with useful direction. Whiting dealt with the
question of whether federal law preempts an Arizona state
law that authorized the state to impose licensing sanctions on
employers that hire undocumented individuals. 2011 U.S.
LEXIS at *12. Whiting did not address the question of what
conduct constitutes harboring, nor did it disturb this Court‟s
reasoning on that point.
10
See, e.g., Edwards v. Prime Inc., 602 F.3d 1276 (11th Cir.
2010) (holding that defendants engaged in harboring where
they knowingly employed undocumented individuals,
provided them with false names and Social Security numbers,
and paid them in cash); United States v. Xiang Hui Ye, 588
F.3d 411 (7th Cir. 2009) (holding that defendant was guilty of
harboring where he employed individuals he knew were
undocumented, did not require them to fill out job
applications, tax forms, or other employment documents,
leased apartments for them, paid them in cash, advised them
that they could purchase fake immigration documents in
Chicago, and omitted them from state employment forms);
United States v. Singh, 261 F.3d 530 (5th Cir. 2001) (noting
that defendant may have been guilty of harboring where he
employed undocumented individuals in his convenience store
and those individuals lived in a back room of the store);
United States v. Sanchez, 927 F.2d 376, 379 (8th Cir. 1991)
(holding that defendant was guilty of harboring where she and
her husband “met with illegal aliens; the aliens told Mr.
Sanchez that they were illegal; Mr. Sanchez told the illegal
aliens that he could provide immigration papers for them; Mr.
Sanchez paid to rent an apartment for the illegal aliens; Mrs.
Sanchez took the illegal aliens to an apartment paid for by
Mr. Sanchez; and Mrs. Sanchez told an illegal alien that she
would give him a paper that would permit him to work”).
These cases, however, all involved defendants who
failed to make necessary state and federal employment-
related disclosures, were involved in smuggling
undocumented individuals into this country, attempted to
warn undocumented individuals of the presence of law
enforcement authorities, and/or provided specific assistance
in obtaining false documents. Here, the Property Managers
11
were not required to disclose their tenants‟ identities or
immigration status to federal or state authorities, nor did they
bring their tenants into this country, offer them assistance in
procuring false documents, impede a law enforcement
investigation, or pay to rent apartments on their behalf so as
to keep their names off of the leases. We do not know of any
court of appeals that has held that knowingly renting an
apartment to an alien lacking lawful immigration status
constitutes harboring. Indeed, we believe that such a holding
would be contrary to our prior opinion in Ozcelik, because
such conduct does not constitute the type of “substantial
facilitation” that we require to make out a harboring offense.
Moreover, even assuming we were to find that the
Property Managers substantially facilitated such aliens
remaining in the United States, the Ozcelik test also requires
Bolmer to show that their conduct tended to “prevent
government authorities from detecting the alien‟s unlawful
presence.” Ozcelik, 527 F.3d at 100. He has not alleged facts
that show such conduct. The two specific acts that Bolmer
suggests constituted “acts of obstruction” were 1) exempting
aliens not lawfully present from background checks and 2)
segregating them into specific rental buildings. However,
these actions did not actually hinder immigration authorities‟
detection of undocumented tenants. First, landlords have no
obligation to require background checks of their tenants, so
the Property Managers did not evade any federal or state
reporting requirements. Moreover, Bolmer did not allege that
third party background check screeners could or would have
determined rental applicants‟ immigration status or that they
would have passed such status information along to
immigration authorities. Second, by grouping large numbers
of undocumented individuals into specific apartment
12
buildings, the Property Managers arguably made the
undocumented population more conspicuous, both to Bolmer
and to the authorities. Bolmer noted that, “[b]efore CPI
began managing the Pingry Arms property, mostly African-
American and Caucasian tenants resided at the property.
During CPI‟s management of Pingry Arms, [he] . . . observed
the evolution of the tenants to majority Hispanic, and few
speak English [sic].” Pl.‟s SAC ¶¶ 70-71. He describes his
building today as an “illegal alien slum,” id. ¶ 73, and it is
clear that he found his allegedly undocumented alien
neighbors to be more visible as they increased in number.
While Bolmer has plausibly asserted that the Property
Managers sought to conceal their own violations of local
housing code and of federal prohibitions against
discrimination in housing, he has not shown that they did
anything to prevent their undocumented residents from being
apprehended by immigration authorities. Certainly, as in
Ozcelik, the Property Managers were likely aware that some
of their residents lacked lawful immigration status and did
nothing to alert federal authorities to this fact. The picture
Bolmer paints, however, is one of a company whose
leadership cared little of what happened to its tenants so long
as Connolly Properties received a steady stream of rental
income from any source. Bolmer has alleged that the
Property Managers engaged in a great deal of unsavory and
possibly discriminatory behavior. However, he has not
sufficiently alleged that their conduct “„tend[ed] to
substantially facilitate an alien‟s remaining in the United
States illegally‟ and to prevent government authorities from
detecting the alien‟s unlawful presence.” Ozcelik, 527 F.3d at
100. Thus, the District Court properly dismissed his
harboring claim.
13
B.
Bolmer also asserts that the Property Managers
violated 8 U.S.C. § 1324(a)(1)(A)(iv), which penalizes a
person who “encourages or induces an alien to come to, enter,
or reside in the United States, knowing or in reckless
disregard of the fact that such coming to, entry, or residence
is or will be in violation of law.” As described above, in
order to make out a claim for harboring in our circuit, it must
be shown that the alleged violator “substantially facilitated”
an alien not lawfully present remaining in the United States.
Similarly, we believe that encouragement or inducement must
also be “substantial” to support a conviction under the statute.
This means not just general advice (as the Ozcelik defendant
provided) but some affirmative assistance that makes an alien
lacking lawful immigration status more likely to enter or
remain in the United States than she otherwise might have
been. “Induce” is defined as “to move by persuasion or
influence; to call forth or bring about by influence or
stimulation; to cause the formation of; or to produce,”
MERRIAM-WEBSTER ONLINE DICTIONARY, available at
www.merriam-webster.com, and that word plainly refers to
conduct that causes someone to do something that they might
otherwise not do. Moreover, “[t]he ordinary and common
sense meaning of „encourage‟ implies an affirmative act that
serves as a catalyst or trigger that drives, motivates, or spurs
another individual to embark on a course of action that he
might not have otherwise.” United States v. Lopez, 590 F.3d
1238, 1259 (11th Cir. 2009) (Barkett, J., dissenting). Thus,
“encourage” is best defined as “„[t]o instigate; to incite to
action; to give courage to; to inspirit; to embolden; to raise
confidence; to make confident.‟” Id. (quoting BLACK‟S LAW
DICTIONARY 620 (4th ed. 1968)). These definitions
14
demonstrate that the word “encourage,” in the context of this
statute, also refers to conduct that causes someone to do
something that they otherwise might not do.
Indeed, reading the encouraging or inducing
subsection of the statute too broadly risks rendering the
remaining subsections of 8 U.S.C. § 1324(a)(1)(A) redundant
or superfluous. Subsection (i) prohibits bringing an alien
lacking lawful immigration status to the United States other
than at a designated port of entry. Subsection (ii) prohibits
transporting such an alien within the United States in
furtherance of their illegal presence in this country. Finally,
subsection (iii), which we have already discussed at length,
prohibits harboring an alien not lawfully present. If we define
“encourage” merely as “to help,” then the particular conduct
that is prohibited in subsections (i)-(iii) is subsumed by the
general prohibition against helping an undocumented person
to “come to, enter, or reside in” the United States in
subsection (iv). “It is a well known canon of statutory
construction that courts should construe statutory language to
avoid interpretations that would render any phrase
superfluous.” United States v. Cooper, 396 F.3d 308, 312 (3d
Cir. 2005); see also Lopez, 590 F.3d at 1259 (“„A basic
premise of statutory construction is that a statute is to be
interpreted so that no words shall be discarded as being
meaningless, redundant, or mere surplusage.‟” (quoting
United States v. Canals-Jimenez, 943 F.2d 1284, 1287 (11th
Cir. 1991))). Accordingly, we read subsection (iv) as
prohibiting a person from engaging in an affirmative act that
substantially encourages or induces an alien lacking lawful
immigration status to come to, enter, or reside in the United
States where the undocumented person otherwise might not
have done so. Thus, subsection (iv) has the distinct character
15
of foreclosing the type of substantial assistance that will spur
a person to commit a violation of immigration law where they
otherwise might not have.
The Property Managers in this case did not engage in
an affirmative act that served as a catalyst for aliens to reside
in the United States in violation of immigration law when
they might not have otherwise. Bolmer suggests that the
Property Managers provided aliens not lawfully present with
rental housing, which other companies would not do, thereby
encouraging them to reside in the United States when they
otherwise might not have. However, Bolmer did not allege
that these aliens would not or could not have resided in the
United States without renting apartments in Connolly
Properties‟ buildings. Nor, given the facts of this case, would
such an assertion have been facially plausible, as the motion
to dismiss standard requires. See Warren Hosp. v. Amgen,
Inc., 643 F.3d 77, 83 (3d Cir. 2011). Among other things,
many aliens are eligible for federal public housing benefits
even if they live in households in which some members are
aliens not lawfully present. See ALISON SISKIN & MAGGIE
MCCARTY, CONGRESSIONAL RESEARCH SERVICE,
IMMIGRATION: NONCITIZEN ELIGIBILITY FOR NEEDS-BASED
HOUSING PROGRAMS (2008). This suggests that aliens
lacking lawful immigration status are able to reside in this
country with or without the assistance of the Property
Managers‟ alleged rental scheme. Moreover, there is no legal
requirement that apartment managers screen potential tenants
based on immigration status, and in some places it is actually
illegal to do so. See Note, “There Be No Shelter Here”: Anti-
Immigrant Housing Ordinances and Comprehensive Reform,
20 CORNELL J. L. & PUB. POL‟Y 399, (2010) (“California, for
example [has] enact[ed] legislation barring landlords from
16
asking tenants their legal status . . . . New York City also has
an ordinance prohibiting landlords from questioning tenants
about their legal status or discriminating against them based
on alienage or citizenship.”). Thus, Bolmer cannot show that
the Property Managers‟ conduct incited aliens to remain in
this country unlawfully when they otherwise might not have
done so, and he therefore has not alleged that they engaged in
conduct sufficient to constitute encouraging or inducing.
We recognize that some of our sister circuits have
chosen to define “encouraging or inducing” more broadly
than we do here. See Edwards, 602 F.3d at 1295 (affirming a
conviction for encouraging or inducing where the defendants
hired and actively sought out individuals known to be
undocumented and also provided them with names and social
security numbers to facilitate their illegal employment);
Lopez, 590 F.3d at 1249-52 (defining “encouraging or
inducing” to include the act of “helping” aliens come to,
enter, or remain in the United States and upholding Lopez‟s
conviction for encouraging or inducing where he captained a
boat to the Bahamas, refueled it, spent the night, picked up
aliens who lacked lawful immigration status from a hotel, and
then drove them toward the United States in the boat); United
States v. Fujii, 301 F.3d 535, 540 (7th Cir. 2002) (“To prove
that Fujii „encouraged or induced‟ the aliens, all that the
government needed to establish was that Fujii knowingly
helped or advised the aliens.”). Nevertheless, while setting a
seemingly low bar (i.e. “to help”) these cases have found that
encouraging or inducing occurred only where defendants
were personally involved in bringing aliens lacking lawful
immigration status into the United States. The defendant in
Fujii, for example, accompanied such aliens on their trip to
the United States, while the Lopez defendant conveyed aliens
17
toward the Untied States via boat. Thus, we are not
convinced that these circuits would agree that giving any type
of “help” to an alien not lawfully present, no matter how de
minimis the assistance, constitutes the crime of encouraging
or inducing.
Moreover, defining the conduct at issue in this case as
encouraging or inducing runs the risk of criminalizing actions
contemplated by federal law and undermining the federal
system of immigration enforcement. Persons who currently
lack lawful immigration status may nonetheless reside in the
United States, often with the explicit knowledge or even
permission of the federal government. See, e.g., 8 U.S.C. §
1158 (authorizing the grant of asylum to refugees who are
fleeing persecution abroad); 8 U.S.C. § 1255(i) (allowing
aliens to adjust their status to lawful permanent resident); 8
U.S.C. § 1229b(b) (providing relief from deportation to
certain persons otherwise subject to removal); 8 C.F.R. §
244.2 (granting certain aliens temporary protected status); 8
C.F.R. § 274a.12(c)(8)-(11), (14) (defining categories of
aliens lacking lawful immigration status who are eligible to
receive an employment authorization document). We cannot
imagine that Congress contemplated that our nation‟s
landlords (not to mention our hotel and motel operators,
innkeepers, and others who are in the business of providing
accommodations) would be tasked with making complex
legal determinations about who is permitted to live in this
country, much less that they would be criminalized for an
error in so doing. Thus, we believe that our interpretation of
the encouraging and inducing statute best comports with the
larger scheme of federal immigration law.
III.
18
Bolmer also argues that the District Court abused its
discretion by refusing to allow him to amend his complaint
for a third time in order to plead additional facts that would
demonstrate that the Property Managers prevented their
undocumented residents from being detected by law
enforcement. He relies on Alston v. Parker, 363 F.3d 229 (3d
Cir. 2004), for the proposition that, “even when a plaintiff
does not expressly seek leave to amend, „if a claim is
vulnerable to a 12(b)(6) dismissal, the court must give the
party an opportunity to amend its pleadings unless such
amendment would be futile or the party has expressed his
intent to stand on his pleadings.‟” Appellant‟s Br. 48
(quoting Alston, 363 F.3d at 236). Alston, however, was
given no opportunity whatsoever to amend his complaint,
while Bolmer amended his complaint twice. Alston, 363 F.3d
at 234 n.7. Moreover, Alston‟s was a civil rights complaint.
“In non-civil rights cases, the settled rule is that properly
requesting leave to amend a complaint requires submitting a
draft amended complaint.” Fletcher-Harlee Corp. v. Pote
Concrete Contrs., Inc., 482 F.3d 247, 252-53 (3d Cir. 2007).
Bolmer never presented a draft of a third amended complaint
to the District Court. This failure is fatal to his request.
Bolmer argues that he did inform the District Court of
additional facts that he wished to allege. Although a district
court is authorized to grant a plaintiff leave to amend a
complaint when justice so requires, it is not compelled to do
so when amendment would be futile. Shane v. Fauver, 213
F.3d 113, 115 (3d Cir. 2000). Here, the District Court found
that further amendment of the complaint would have been
futile. Our independent review of the record confirms that the
19
District Court did not abuse its discretion in denying Bolmer
leave to amend his complaint a third time.
IV.
For the foregoing reasons, we will affirm the District
Court=s dismissal of Bolmer‟s claim.4
4
Because it found that Bolmer did not allege facts sufficient
to constitute the predicate acts of harboring or encouraging or
inducing, the District Court did not reach the issue of whether
Bolmer had standing to bring a RICO claim. Bolmer v.
Connolly Properties, Inc., No. 08-2753, slip op. at 6 n.2
(D.N.J. April 8, 2009). For the same reason, we also decline
to address this issue.
20
McKee, Chief Judge, concurring.
Although I join my colleagues‘ analysis in its entirety,
I write separately to highlight problems inherent in the text of
the Racketeering Influenced Corrupt Organizations Act
(―RICO‖) that are exemplified by this complaint. My
concern arises from the fact that the treble damage provision
of RICO spawns claims that are not at all related to the
congressional purpose underlying that statute. Although
many have recognized this problem, Congress has yet to
address it. I nevertheless remain hopeful that continued calls
for a legislative response to problems endemic in RICO‘s
civil damage provision will one day alert Congress to the
need to restrict the statute to the ills Congress thought it was
addressing when it enacted this far reaching legislation.
I.
―RICO was an aggressive initiative to supplement old
remedies and develop new methods for fighting crime.‖
Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 498 (1985)
(citation omitted).
Judges Fuentes and Greenberg join Chief Judge McKee in
this concurring opinion.
1
As is clear from my colleagues‘ explanation of this
Amended Complaint, this case is at once a landlord-tenant
dispute, a nuisance claim, and an alleged conspiracy to
unlawfully rent apartments to undocumented persons. Those
allegations are a far cry from what Congress intended when it
added certain immigration violations to the already expansive
list of predicate acts that would support a civil RICO claim.
Bolmer rests his RICO claim solely upon alleged
violations of the Immigration and Nationality Act (―INA‖).
RICO was amended to define ―racketeering activity‖ to
include: ―any act which is indictable under the Immigration
and Nationality Act, section 274 (relating to bringing in and
harboring certain aliens) . . . .‖ 18 U.S.C. § 1961(1)(F)
(2006). Section 274, which is now a RICO predicate
offense, prohibits the bringing in, transportation, harboring, or
employment of undocumented aliens. 8 U.S.C. § 1324(2006). ―[A] violation of § 274 of the INA is one of the
infrequently used ‗racketeering acts‘ identified in RICO §
1961(1).‖ Paul Batista, Civil RICO Practice Manual, § 3.15
(3d ed. Supp. 2010). As my colleagues explain, harboring
2
and encouraging or inducing—the alleged predicate acts
here—are ill-defined under the INA itself.
It is, nevertheless, clear that Congress did extend
RICO‘s predicate offenses to include specified immigration
violations when it enacted the Antiterrorism and Effective
Death Penalty Act of 1996 (―AEDPA‖). Pub. L. No. 104-
132, 110 Stat. 1214 (1996). In fact, § 433 of AEDPA is
entitled: ―Establishing Certain Alien Smuggling-Related
Crimes as RICO-Predicate Offenses.‖ Those ―RICO
Amendments‖ primarily focus on unlawful assistance to
undocumented persons entering the country and those who
help them evade law enforcement while here.1
1
See AEDPA § 433.
Establishing Certain Alien Smuggling-Related Crimes
as RICO-Predicate Offenses: Section 1961(1) of title
18, United States Code, is amended—
(1) by inserting ―section 1028 (relating to fraud and
related activity in connection with identification
documents) if the act indictable under section 1028
was committed for the purpose of financial gain,‖
before ―section 1029‖;
(2) by inserting ―section 1542 (relating to false
statement in application and use of passport) if the act
indictable under section 1542 was committed for the
purpose of financial gain, section 1543 (relating to
forgery or false use of passport) if the act indictable
under section 1543 was committed for the purpose of
3
Congressional concern with smuggling organizations
is evident in the text, history, and purpose of the AEDPA
amendments to RICO. The House Committee Report on
AEDPA explains:
The bill adds a number of immigration-related
offenses as predicate offenses under the Racketeer
Influenced Corrupt Organizations Act (―RICO‖). The
RICO statute is among the principal tools that Federal
law enforcement officials use to combat organized
crime. The amendment made by this section will
extend the definition of ―predicate acts‖ to enable them
to use the statute to combat alien smuggling
organizations.
H.R. Rep. No. 104-22 (1995), 1995 WL 56411 at *6
(emphasis added). Predicate acts established by AEDPA thus
financial gain, section 1544 (relating to misuse of
passport) if the act indictable under section 1544 was
committed for the purpose of financial gain, section
1546 (relating to fraud and misuse of visas, permits,
and other documents) if the act indictable under
section 1546 was committed for the purpose of
financial gain, sections 1581–1588 (relating to
peonage and slavery),‖ after ―section 1513 (relating to
retaliating against a witness, victim, or an
informant),‖;
(3) by striking ―or‖ before ―(E)‖; and
(4) by inserting before the period at the end the
following: ―, or (F) any act which is indictable under
the Immigration and Nationality Act, section 274
(relating to bringing in and harboring certain aliens),
section 277 (relating to aiding or assisting certain
aliens to enter the United States), or section 278
(relating to importation of alien for immoral purpose)
if the act indictable under such section of such Act was
committed for the purpose of financial gain[.]‖.
4
reflect Congress‘ desire to include smuggling ―organizations‖
within RICO‘s grasp. The amendments focus on the kind of
activity such organizations engage in to smuggle aliens into
the country. ―The offenses added as RICO predicate act[s]
are offenses involving fraud, false use, or forgery of
passports, identification documents, or visas; offenses relating
to peonage and slavery; offenses relating to retaliation against
a witness, victim, or an information; and offenses relating to
assisting illegal aliens to enter the country.‖ Id. at *16.
Thus, including certain immigration violations as
predicate acts under RICO ―enable[d] federal law
enforcement officials to use the RICO law to combat alien
smuggling operations.‖ Id. at *9. The action was necessary
because ―[o]rganized crime rings in this country, with ties to
others abroad, have developed to prey upon illegal
immigrants who want to come to the United States.‖ 141
Cong. Rec. H1588 (daily ed. Feb. 10, 1995) (statement of
Rep. McCollum); see also Bobb v. Att’y. Gen., 458 F.3d 213,
221 (3d Cir. 2006) (noting that AEDPA targeted ―[m]any of
the crimes . . . committed by persons involved in organized
immigration crime[,] . . . includ[ing] . . . alien smuggling . . .
5
[and] trafficking in immigration and other documents . . . .‖)
(citing H.R. Rep. 104-22, at *7); Sys. Mgmt., Inc., v. Loiselle,
91 F. Supp. 2d 401, 408-09 (D. Mass. 2000) (―(Section 274 of
the Immigration and Nationality Act) bears the title ‗Bringing
in and harboring certain aliens.‘ It thus seems targeted
against individuals who smuggle, conceal, or transport illegal
aliens into the United States.‖)).
II.
In dressing this landlord-tenant dispute as a federal
RICO claim and seeking treble damages, this plaintiff has
joined countless others who have fashioned such claims out
of disputes that have nothing whatever to do with subverting
crime rings or criminal syndicates. Rather, we are here
confronted with an everyday landlord-tenant dispute adorned
as a racketeering claim complete with the obligatory treble
damage request that is both the sine qua non and irresistible
impulse of so many civil actions under RICO.
In Sedima, the Supreme Court warned: ―in its private
civil version, RICO is evolving into something quite different
from the original conception of its enactors.‖ 473 U.S. at 500
6
(citation omitted). This has occurred even though the
congressional intent underlying RICO could not be clearer.
Both the Act‘s title and the legislative history demonstrate
that Congress passed the statute to target organized crime. Id.
at 524 (Powell, J., dissenting); see also H.J. Inc. v.
Northwestern Bell Tel. Co., 492 U.S. 229, 248 (1989) (―The
occasion for Congress‘ action [in enacting RICO] was the
perceived need to combat organized crime.‖). Congress
therefore crafted the broad list of predicate offenses that
trigger a RICO violation in order to create a weapon with
sufficient flexibility to be effective in extricating society from
the insidious tentacles of organized crime and all of its
continually evolving mechanisms of infiltration and
corruption. As we explained in United States v. Bergrin, 650
F.3d 257, 270-71 (3d Cir. 2011):
Congress intended for RICO to apply to
individuals who, through involvement in an
enterprise, commit any combination of the
many and diverse predicate acts, whether the
usual organized crime-type offenses (e.g.,
bribery, extortion, gambling), more violent
crimes (e.g., murder, kidnapping), or more
niche crimes (e.g., counterfeiting music or
trafficking in illicit prescription drugs).
7
The broad array of crimes that Congress selected as RICO
predicate offenses are thus intended to function as ―hidden
treasures—or buried landmines—‖ that can be exploited by
creative counsel in an appropriate case.2
However, the very strength of RICO—its breadth—
now diffuses its focus. RICO‘s treble damage provision has
been seized upon to convert the statute into a hodgepodge of
prohibitions that now function as a tripwire that offers the
lure of treble recovery to all who can squeeze their claim into
some combination of RICO‘s ―predicate acts.‖ The civil
penalties in RICO have thus been transformed into a fulcrum
that is used to pry treble damages out of causes of action
originating in ―divorce, trespass, legal and accounting
malpractice, inheritance among family members, employment
benefits and sexual harassment by a union.‖ William H.
Rehnquist, Chief Justice of the United States, Remarks of the
Chief Justice, Address Before the Eleventh Seminar on the
Administration of Justice (Apr. 7, 1989), in 21 St. Mary‘s
L.J. 5, 11 (1989). In fact, ―[m]ost of the civil suits filed under
the statute have nothing to do with organized crime[;] [t]hey
2
Batista, supra, § 3.15.
8
are garden-variety civil fraud cases of the type traditionally
litigated in state courts.‖ Id. at 9.
In Sedima, the Court mentioned in a footnote that an
ABA Task Force on RICO had ―found that of the 270 known
civil RICO cases at the trial court level [at that time], 40%
involved securities fraud, 37% common-law fraud in a
commercial or business setting, and only 9% [involved]
‗allegations of criminal activity of a type generally associated
with professional criminals.‘ ‖ 473 U.S. at 500 n.16.
Similarly, ―[a]nother survey of 132 published decisions found
that 57 involved securities transactions and 38 [involved]
commercial and contract disputes . . . .‖ Id. We can now add
landlord-tenant disputes to the mix.
In the criminal arena, this proclivity for abuse is at
least limited by prosecutorial discretion, the risk of losing
credibility with jurors if the prosecution engages in ―overkill‖
or overreaching, and the related risk of jury nullification.
However, RICO‘s civil remedy is not restricted by any such
9
considerations.3 Thus, it is not surprising that we are today
faced with a claim that this landlord-tenant dispute is really a
racketeering conspiracy that should entitle this tenant to treble
damages under RICO.4
3
See Rehnquist, Remarks, supra, at 10 (―[T]here is no such
thing as prosecutorial discretion to limit the use of civil RICO
by plaintiffs‘ attorneys.‖).
Even though one could argue that jury nullification
plays a role in deterring abuse in the civil arena as well,
common sense would suggest that the very different
dynamics that are at work there make jury nullification or fear
of overreaching far less important to determining how to
structure a civil suit when jurors know ―it‘s only money.‖
Moreover, strategic considerations such as settlement posture
may play a far more important role in deciding how to draft a
civil complaint than concerns about overreaching or jury
nullification.
4
I do not suggest that landlord-tenant disputes and
organized crime are necessarily mutually exclusive. The
legislative history of RICO illustrates that organized crime is
more than capable of injecting its poisonous proboscis into
almost any ―enterprise,‖ including the business of renting
property. See e.g., Swistock v. Jones, 884 F.2d 755, 759 (3d
Cir. 1989) (reversing district court dismissal of RICO claim
of inducing plaintiffs to enter into a lease and make payments
under the lease); Charron v. Pinnacle Grp. N.Y. LLC, 269
F.R.D. 221, 234 (S.D.N.Y. 2010) (―Defendants are correct
that there is an aspect of this case that implicates
individualized landlord-tenant disputes. But each landlord-
tenant dispute is, according to Plaintiffs, more than just that;
it is one of the hundreds, if not thousands, of pixels forming
something larger, more uniform, and far more serious—a
pattern of racketeering actionable under RICO. This is, in
short, a RICO class action brought in federal district court,
not a collection of landlord-tenant disputes . . . .‖).
Furthermore, creative counsel can hardly be faulted for
resorting to this statute in representing clients as long as the
10
III.
Some courts have tried to address this problem by
relying on such traditional concepts as prudential standing.5
statute remains as broad as it is now. See Sedima, 472 U.S. at
504 (Marshall, J., dissenting) (―[L]itigants, lured by the
prospect of treble damages and attorney‘s fees, have a strong
incentive to invoke RICO‘s provisions whenever they can
allege in good faith‖ two predicate acts from the statute‘s
substantial list of predicate offenses.); Rehnquist, Remarks,
supra, at 12 (―RICO‘s treble damages provisions create a
powerful incentive for attorneys to attempt to bring facts
traditionally thought to establish other causes of action within
the ambit of the statute.‖). Thus, I do not suggest counsel for
this plaintiff has acted improperly in fashioning this claim as
a RICO violation.
5
Standing involves constitutional, prudential, and often
statutory limitations on who may bring a claim in federal
court. Allen v. Wright, 468 U.S. 737, 750-51 (1984); see also
The Pitt News v. Fisher, 215 F.3d 354, 359 (3d Cir. 2000).
The constitutional component [of standing],
derived from the Art. III case or controversy
requirement, requires a plaintiff to demonstrate
that he or she suffered injury in fact, that the
injury is fairly traceable to the actions of the
defendant, and that the injury will likely be
redressed by a favorable decision.
***
Under certain circumstances, prudential,
as opposed to constitutional, standing
considerations limit a plaintiff‘s ability to bring
suit. These prudential considerations are a set of
judge-made rules forming an integral part of
judicial self-government. The aim of this form
of judicial self-governance is to determine
11
One such effort involved requiring plaintiffs to establish
―RICO standing‖ just as antitrust standing is required of a
plaintiff suing for an antitrust violation under the Clayton
Act. See Sedima, 473 U.S. at 485. The Court of Appeals for
the Second Circuit used that approach in Sedima in upholding
the District Court‘s dismissal of the civil RICO action there.
The Court of Appeals reasoned that a RICO plaintiff must
allege a separate ―RICO injury‖ ―just as an antitrust plaintiff
must allege an ‗antitrust injury.‘‖ Id. The Court of Appeals
had imposed that requirement based on the legislative history
and the strong congressional concern with providing
additional tools against organized crime that lead to RICO‘s
enactment. Id. at 494.6
whether the plaintiff is a proper party to invoke
judicial resolution of the dispute and the
exercise of the court‘s remedial powers.
Conte Bros. Auto., Inc. v. Quaker State –Slick 50, Inc., 165
F.3d 221, 225 (3d Cir. 1998) (internal quotation marks and
citations omitted).
6
The Supreme Court noted that: ―[i]n summarizing the bill
[that became RICO] on the House floor, its sponsor described
the treble damages provision as ‗another example of the
antitrust remedy being adapted for use against organized
criminality.‘ ‖ Sedima, 487 U.S. at 487 (citing 116 Cong.
Rec. 35295 (1970)) (statement of Rep. Poff). The Senate did
not object to the inclusion of treble damages because, as the
Senate sponsor noted, it ―would be ‗a major new tool in
12
The Supreme Court rejected that reasoning. In
reviewing the legislative history of RICO, the Court noted
that the treble damages provision was added to ―enhance the
effectiveness of [the Act‘s prohibitions].‖ Id. at 487 (internal
quotation marks and citations omitted). The Court observed
that several courts had struggled to define ―racketeering
injury,‖ but the Court concluded: ―the difficulty of that task
itself cautions against imposing such a requirement.‖ Id. at
494 (footnote omitted). The Court explained:
[g]iven that ―racketeering activity‖ [under
the Act] consists of no more and no less than
commission of a predicate act, § 1961(1),
we are initially doubtful about a requirement
of a ―racketeering injury‖ separate from the
harm from the predicate acts. A reading of
the statute belies any such requirement . . ..
If the defendant engages in a pattern of
racketeering activity in a manner forbidden
by these provisions, and the racketeering
activities injure the plaintiff in his[/her]
business or property, the plaintiff has a
claim under § 1964(c). There is no room in
the statutory language for an additional,
amorphous ―racketeering injury‖
requirement.
extirpating the baneful influence of organized crime in our
economic life.‘ ‖ Sedima, 487 U.S. at 488 (citing 116 Cong.
Rec. at 25190) (statement of Senator McClellan).
13
Sedima, 487 U.S. at 495 (footnote omitted).7 Thus, the Court
instructed, ―RICO is to be read broadly.‖ Id. at 497.
Yet, despite rejecting a requirement of ―RICO
standing,‖ in Sedima, the Court nevertheless requires an
injury sufficiently related to the alleged racketeering activity
to justify allowing a treble damage claim to proceed under
RICO. See Anza v. Ideal Steel Supply Corp., 547 U.S. 451(2006); Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258(1992). The plaintiff in Anza, brought a RICO action against
a business competitor alleging that the latter had filed
fraudulent tax returns with the state in order to reduce the
amount of sales tax accruing from sales. Anza, 547 U.S. at
454. With a reduced tax burden, the defendant could obtain a
competitive advantage by selling its products at a lower price
than the plaintiff who had to factor sales tax into the price it
charged its customers. Id. The plaintiff alleged that the
requisite predicate acts for RICO consisted of mail or wire
7
The Court considered, but rejected any contention that
Congress did not understand the implications of the treble
damages provision. The Court reasoned that the provision
was not enacted unnoticed and concluded that the statute‘s
silence on the import of the provision was irrelevant because
―congressional silence, no matter how ‗clanging,‘ cannot
override the words of the statute.‖ Sedima, 473 U.S. at 495
n.13.
14
fraud depending on whether the fraudulent returns were
mailed or filed electronically. Id.The Supreme Court rejected the claim because the
alleged injury was too remote from the alleged racketeering
activity. Id. at 457-58. The direct victim of the predicate acts
was the taxing authority, not the plaintiff. Id. Although
plaintiff would not have suffered its injury ―but for‖ the
alleged racketeering activity, the defendant‘s lower prices
proximately caused any business injury to plaintiff, not the
alleged fraud. Id. at 458-59.
Although the Court‘s approach was consistent with a
prudential standing analysis, the Court did not even mention
standing in its discussion except to refer to the district court‘s
reasoning. Rather, the Court relied on Sedima to explain that
the ―harm caused by predicate acts‖ must have a direct
relationship to the alleged injury. Id. at 457 (citing Sedima,
473 U.S. at 497). The Court reiterated: ―the essence of the
[RICO] violation is the commission of those acts in
connection with the conduct of an enterprise.‖ Id. (internal
quotation marks omitted). Although the injury in Sedima was
established by alleging an injury ―by reason of‖ the alleged
racketeering activity, the injury in Anza was too attenuated
15
from that activity to justify a RICO claim even though the
plaintiff would not have suffered injury ―but for‖ the
racketeering activity. Anza, 547 U.S. at 457-59.
The Court was also concerned that the plaintiff‘s lost
sales could have resulted from any number of factors ―other
than [defendant‘s] alleged acts of fraud.‖ Id. The Court
reasoned that it would be extraordinarily difficult to properly
apportion damages among the various factors that may have
contributed to plaintiff‘s lost sales that were in addition to the
defendant‘s lower prices. Id.The analysis in Anza was foreshadowed by the Court‘s
prior decision in Holmes. There, the Court had explained the
practical and jurisprudential necessity of ensuring that alleged
injuries were not too remote from the alleged racketeering
acts to establish proximate cause for the plaintiff‘s injuries.
503 U.S. at 268-69. The analysis in Anza flowed directly
from the need to establish causation. The majority decision in
Holmes did not mention prudential standing either, and the
Court only referred to ―standing‖ tangentially. See 503 U.S.
at 263, 264, 270.
Whether the analysis focuses on the nexus between the
alleged injury and the alleged racketeering activity through
16
the lens of proximate cause or through the lens of prudential
standing, the only limitation on treble damage claims appears
to be ensuring that the claimed injury is not too remote from
the alleged predicate acts.8 Thus, in Allegheny General
Hospital v. Philip Morris, Inc., 228 F.3d 429 (3d Cir. 2000),
we focused our inquiry on the nexus between predicate acts
and injury. We there upheld the dismissal of various RICO
claims brought by hospitals to recover unreimbursed medical
expenses allegedly resulting from the defendant cigarette
companies‘ fraudulent claims about tobacco use and their
alleged manipulation of nicotine content of cigarettes. Id. at
443-45. We relied upon our earlier decision in the ―closely
analogous‖ case of Steamfitters Local Union No. 420 Welfare
Fund v. Philip Morris, Inc., 171 F.3d 912 (3d Cir. 1999). In
the latter case, union welfare funds had asserted similar
claims under RICO. 228 F.3d at 435. We explained in
Allegheny that the plaintiffs‘ standing depended on
―[w]hether . . . the alleged conspiracy proximately caused [the
plaintiffs‘] injuries.‖ Id.8
―The Supreme Court has explained that the injury and
causation requirements of § 1964(c) are aspects of RICO
standing.‖ In re Sunrise Sec. Lit., 916 F.2d 874, 878-89 (3d
Cir. 1990) (citations omitted).
17
More recently, in Hemi Group, LLC v. City of New York,
130 S. Ct. 983 (2010), the Supreme Court specifically
rejected a ―but for‖ test of causation and reiterated that the
RICO injury must be ―by reason of‖ the alleged RICO
violation. Id. at 989; a concept that leads to a proximate
cause analysis. That decision also focused on proximate
cause under RICO rather than on prudential standing. The
Court explained that ―proximate cause for RICO purposes . . .
should be evaluated in light of its common-law foundations;
proximate cause thus requires some direct relation between
the injury asserted and the injurious conduct alleged. A link
that is too remote, purely contingent, or indirec[t] is
insufficient. Id. at 989 (internal quotation marks and citations
omitted).9
9
In Hemi Group, the City of New York brought a RICO
claim against an out of state retailer who sold cigarettes over
the internet to New York City residents without disclosing the
names of the buyers to the taxing authorities in New York
City as required by federal law. The taxing authorities would
have used that information to collect the sales tax on the
cigarettes that would otherwise go uncollected. The Court
held that any economic injury the City may have suffered by
the allegedly fraudulent conduct was not ―by reason of‖ the
alleged predicate acts because any failure to disclose was
simply too remote to be the proximate cause of the City‘s
injury. 130 S. Ct. at 988-89.
18
It nevertheless remains true under Sedima that all a
plaintiff must allege to survive a motion to dismiss a claim for
treble damages under RICO is that his/her injury occurred ―by
reason of‖ the alleged predicate acts. See Sedima, 473 U.S. at
497 (―Any recoverable damages occurring by reason of a
violation of § 1962(c) will flow from the commission of the
predicate acts.‖) (footnote omitted). As I have explained, that
hurdle is easily cleared in a multitude of actions that have
nothing to do with organized crime in any of its many
nefarious manifestations. For example, if the plaintiff here
had been able to allege acts that amounted to actual
―harboring‖ of aliens, his RICO claim would have survived a
motion to dismiss even though there is absolutely nothing
here to suggest a criminal organization is involved in the
landlord‘s alleged neglect.
IV.
Yet, as the Supreme Court has explained, the misuse of
the statute cannot be traced to any ambiguity in the statutory
text that would allow for a judicial remedy by reading the
statute in a manner that more closely reflects congressional
intent. ―The preeminent canon of statutory interpretation
requires us to presume that the legislature says in a statute
19
what it means and means in a statute what it says there.‖
BedRoc Ltd., v. United States, 541 U.S. 176, 184 (2004)
(internal quotation marks and bracket omitted). ―[T]he fact
that RICO has been applied in situations not expressly
anticipated by Congress does not demonstrate ambiguity. It
demonstrates breadth.‖ Sedima, 473 U.S. at 499 (citation
omitted). Thus, it remains true that:
private civil actions under the statute are being
brought almost solely against [businesses not
implicated in organized crime], rather than
against the archetypal, intimidating mobster.
Yet this defect—if defect it is—is inherent in
the statute as written, and its correction must lie
with Congress. It is not for the judiciary to
eliminate the private action in situations where
Congress has provided it simply because
plaintiffs are not taking advantage of it in its
more difficult applications.
Id. at 499-500 (footnote omitted).
Given the very legitimate and widespread concerns
about how the treble damage provision of RICO is pushing
RICO far beyond the parameters Congress intended, I join the
chorus expressing the need for Congress to revisit this very
important statute.10 With reform, it can yet be honed into a
10
See, e.g., Ideal Steel Supply Corp. v. Anza, 652 F.3d 310,
328 (2d Cir. 2011) (Cabranes, J., dissenting) (―We encounter
here another chapter in the long saga of civil RICO and its
discontents. Since its enactment in 1970, the civil RICO
20
tool that will continue to be effective in remedying the havoc
wreaked by organized crime while being less susceptible to
being the remedy of choice whenever it appears that a
defendant‘s transgressions can be recast as racketeering
predicates.
Congress has, in fact, recognized that a problem exists
with RICO in its current form. See RICO Amendments Act
of 1991, H.R. Rep. No. 102-312 (1991), 1991 WL 243408 at
*6-8; Rehnquist, Remarks, supra, at 12. Three possible
reforms have been suggested: ―[t]o amend the basic criminal
law; to make civil RICO unavailable or more difficult to use
statute, Racketeer Influenced and Corrupt Organizations Act,
18 U.S.C. §§ 1961–1968, has exasperated generations of
federal judges and practitioners and generated a vast, and
often skeptical, literature‖); Rehnquist, Remarks, supra, at 13
(―I think that the time has arrived for Congress to enact
amendments to civil RICO to limit its scope to the sort of
wrongs that are connected to organized crime, or have some
other reason for being in federal court‖); William H.
Rehnquist, Get Rico Cases Out of My Courtroom, Wall St. J.,
May 19, 1989, at A14; David B. Sentelle, Civil RICO: The
Judges’ Perspective, and Some Notes on Practice for North
Carolina Lawyers, 12 Campbell L. Rev. 145, 148 (1990)
(―[E]very single district judge with whom I have discussed
the subject (and I‘m talking in the dozens of district judges
from across the country) echoes the entreaty expressed in the
Chief Justice‘s title in The Wall Street Journal.‖)); see also
Rehnquist, Remarks, supra, at 13 (―Each of the three
branches—through court opinions, legislative proposals, or
submissions to Congress—has recently expressed recognition
of the need for reforming civil RICO.‖).
21
for numerous categories of offenses covered by criminal
RICO; or to make changes to civil RICO which attempt to
emulate the results attained by prosecutorial discretion in the
criminal RICO area.‖ Id. at *7.11
Although none of those approaches has yet been
adopted into law, I continue to hope that Congress will
address the problems that have become apparent in the statute
as it is now written. It is for that reason alone that I write;
nothing else needs to be added to the majority opinion.
11
―Some individuals have even suggested that in view of
RICO‘s treble damages provisions, the statute should be
amended to allow for equally generous sanctions for frivolous
claims.‖ Id. at 12. I take no position on specific proposals,
but encourage Congress to be as creative in its solutions as
litigants have been in their use of the statute.
22