Trollinger v. Tyson Foods Inc

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
ELECTRONIC CITATION: 2004 FED App. 0165P (6th Cir.)
File Name: 04a0165p.06 _________________
COUNSEL
UNITED STATES COURT OF APPEALS
ARGUED: Howard W. Foster, JOHNSON & BELL,
FOR THE SIXTH CIRCUIT Chicago, Illinois, for Appellants. Virginia A. Seitz, SIDLEY,
_________________ AUSTIN, BROWN & WOOD, Washington, D.C., for
Appellee. ON BRIEF: Howard W. Foster, JOHNSON &
BIRDA TROLLINGER ; ROBERT X BELL, Chicago, Illinois, for Appellants. Virginia A. Seitz,
MARTINEZ; TABETHA - Mark D. Hopson, Griffith L. Green, SIDLEY, AUSTIN,
- BROWN & WOOD, Washington, D.C., Christopher H.
EDDINGS and DORIS JEWELL , Steger, MILLER & MARTIN, Chattanooga, Tennessee, for
- No. 02-6020
Plaintiffs-Appellants, - Appellee.
>
, _________________
v. -
- OPINION
TYSON FOODS, INC., - _________________
Defendant-Appellee. -
- SUTTON, Circuit Judge. At issue in this case is an
N application of the Racketeer Influenced and Corrupt
Appeal from the United States District Court Organizations Act (RICO), 18 U.S.C. § 1961 et seq., to a
for the Eastern District of Tennessee at Winchester. wage-related dispute between Tyson Foods, Inc. and four of
No. 02-00023—R. Allan Edgar, Chief District Judge. its employees. On behalf of themselves and a putative class
of similarly-situated workers, the four employees allege that
Argued: December 11, 2003 Tyson violated RICO by engaging in a scheme with several
employment agencies to depress the wages of Tyson’s hourly
Decided and Filed: June 3, 2004 employees by hiring illegal immigrants.
Before: BATCHELDER and SUTTON, Circuit Judges; Soon after the action was filed, Tyson moved to dismiss the
BELL, Chief District Judge.* complaint under Federal Rule of Civil Procedure 12(b)(1) for
lack of subject-matter jurisdiction, arguing that the National
Labor Relations Act preempts the employees’ RICO claims
under the labor-preemption doctrine articulated in San Diego
Building Trades Council v. Garmon, 359 U.S. 236 (1959).
Tyson also moved to dismiss the complaint under Rule
12(b)(6) for failure to state a claim, arguing (1) that plaintiffs
lack statutory standing under RICO to pursue this case
*
The Honorable Robert Holmes Bell, Chief United States District because any injury they suffered was derivative of an injury
Judge for the Western District of Michigan, sitting by designation.
1
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 3 4 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
to their union, which served as plaintiffs’ exclusive In April 2002, soon after the indictment was filed, Birda
representative in negotiating wages, and (2) that Tyson’s Trollinger, Robert Martinez, Tabetha Eddings and Doris
alleged misconduct did not proximately cause an injury to Jewell—former hourly workers at Tyson’s Shelbyville facility
plaintiffs. The district court granted the Rule 12(b)(6) who were legally employed by Tyson—filed this civil RICO
motion, denied the Rule 12(b)(1) motion, and dismissed the action against Tyson based on some of the same allegedly
case with prejudice. Because we reject the application of illegal activities underlying the criminal indictment. The
Garmon preemption in this context and because we cannot amended complaint alleges that Tyson engaged in a scheme
say at this early stage in the case that the allegations in the to depress the wages paid to its hourly employees by
complaint are insufficient as a matter of law to establish knowingly hiring undocumented illegal immigrants who were
statutory standing, we reverse the district court’s judgment. willing to work for wages well below those paid in labor
markets composed of only United States citizens. Assisting
I. Tyson in this scheme was a network of recruiters and
temporary employment agencies that would transport the
One of the nation’s largest poultry processors, Tyson illegal workers to the United States, obtain housing for them
Foods, Inc. employs more than 120,000 workers. Tyson’s and provide them with false identification documents. As a
headquarters are in Springdale, Arkansas, and it has result of the scheme, the complaint alleges, over half of the
processing plants throughout the country. One of Tyson’s workers at 15 of Tyson’s facilities are illegal immigrants,
plants is located in Shelbyville, Tennessee, a town of 15,000 allowing Tyson to pay its legal employees wages substantially
people in middle Tennessee, approximately 50 miles below the wage level paid by other employers of unskilled
southeast of Nashville. labor in the areas surrounding the 15 facilities. Plaintiffs seek
injunctive relief along with treble damages.
In December 2001, a federal grand jury returned a 36-count
indictment against Tyson and several individuals. In general, On May 24, 2002, Tyson moved to dismiss the complaint
the indictment charged Tyson and the individuals with on two grounds, each hinging in part on the role of a union in
conspiring to smuggle illegal aliens into the United States negotiating employee wages. Tyson first moved to dismiss
across its southern border and employing them at 15 of under Rule 12(b)(6) for failure to state a claim, arguing that
Tyson’s processing plants in nine different States. In addition the employees could not satisfy RICO’s statutory-standing or
to a conspiracy to violate the immigration laws in violation of proximate-cause requirements, see Holmes v. Sec. Investor
18 U.S.C. § 371, the indictment charged the defendants with Prot. Corp., 503 U.S. 258 (1992), because the union
causing illegal aliens to be brought into the country, in negotiated and agreed to the wage scale contained in the
violation of 8 U.S.C. § 1324(a)(2)(B)(ii) and 18 U.S.C. § 2; collective bargaining agreement and because this intervening
causing illegal aliens to be transported, in violation of factor made any damages to the employees speculative. If
8 U.S.C. § 1324(a)(1)(A)(ii) and (a)(1)(B)(i), and 18 U.S.C. anyone has a RICO claim, Tyson argued, it would be the
§ 2; causing the use of illegal documents, in violation of union, not the employees. Tyson also moved to dismiss the
18 U.S.C. §§ 1546(b) and 2; and causing the possession of complaint under Rule 12(b)(1) for lack of subject-matter
fraudulent documents by illegal aliens, in violation of jurisdiction, arguing that the employees’ RICO claims fall
18 U.S.C. §§ 1546(a) and 2. within the primary (and exclusive) jurisdiction of the National
Labor Relations Board under San Diego Building Trades
Council v. Garmon, 359 U.S. 236 (1959). Attached to
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 5 6 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
Tyson’s Rule 12(b)(1) motion were two collective bargaining Tyson’s Rule 12(b)(1) motion and because “[t]heir existence
agreements between Tyson and the Retail, Wholesale and may be judicially noticed” in connection with Tyson’s Rule
Department Store Union, AFL-CIO establishing the terms and 12(b)(6) motion. D. Ct. Op. at 7.
conditions of employment for Tyson’s hourly workers at the
Shelbyville plant. Plaintiffs appeal the judgment, which we review de novo.
See Rossborough Mfg. Co. v. Trimble, 301 F.3d 482, 489 (6th
On July 16, 2002, the district court granted Tyson’s Rule Cir. 2002).
12(b)(6) motion, denied the Rule 12(b)(1) motion and
dismissed the action with prejudice. Plaintiffs failed to state II.
a claim, the district court held, because they could not
establish “a ‘direct relation between the injury asserted and We begin, as we must, by asking whether the district court
the injurious conduct alleged.’” D. Ct. Op. at 5 (quoting had jurisdiction to hear this case. See Steel Co. v. Citizens for
Holmes, 503 U.S. at 268). “As the wage rates were the a Better Environment, 523 U.S. 83, 101 (1998). Plaintiffs
product of collective bargaining,” the court explained, allege that Tyson violated a federal law (RICO), which
“plaintiffs cannot demonstrate that those rates were ultimately customarily gives rise to federal-question jurisdiction under
depressed by the presence of alleged illegal aliens in the work 28 U.S.C. § 1331. Invoking the doctrine of “Garmon
force.” Id. at 6. The court further reasoned that “plaintiffs’ preemption,” however, Tyson argues that the National Labor
wages could have been affected by [the wages] other Relations Act “preempts” plaintiffs’ wage-related RICO
employers paid, the availability of workers, the profitability claims and that as a result the district court lacked subject-
of the defendant’s businesses, and other factors that influence matter jurisdiction to hear them. We disagree.
any labor market,” and thus “the conclusion that Tyson’s
hiring of alleged illegal aliens depressed the plaintiffs’ wages The use of the term “preemption” in this setting, as an
would require sheer speculation.” Id. initial observation, has a dissonant ring to it. To say that
federal courts lack jurisdiction to hear a claim under one
Having granted the Rule 12(b)(6) motion, the court denied federal act (RICO) because it is “preempted” by another
the Rule 12(b)(1) motion. In its view, the question whether federal act (the National Labor Relations Act) is not a natural
the National Labor Relations Act preempted plaintiffs’ RICO use of the term “preemption.” As federal courts generally use
claims was “somewhat murky” and the court was “not the term, preemption does not describe the effect of one
prepared to say at [that] time that it lack[ed] subject matter federal law upon another; it refers to the supremacy of federal
jurisdiction.” D. Ct. Op. at 7. law over state law when Congress, acting within its
enumerated powers, intends one to displace the other. See
In dismissing plaintiffs’ complaint for failure to state a U.S. Const. art. VI, cl. 2 (“[T]he Laws of the United States
claim, the district court acknowledged that it had relied on the . . . shall be the supreme Law of the Land; and the Judges in
existence of the union and the collective bargaining every State shall be bound thereby, any Thing in the
agreements negotiated by the union, even though plaintiffs Constitution or Laws or any State to the Contrary
had not specifically mentioned these facts in their complaint. notwithstanding.”). Preemption, moreover, does not normally
Yet this omission posed no obstacle to dismissing the case, concern the subject-matter jurisdiction of a court to hear a
the court held, because the collective bargaining agreements claim, which is what is relevant to the resolution of a Rule
were “properly raised” and “considered” in connection with 12(b)(1) motion. Rather, the doctrine generally concerns the
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 7 8 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
merits of the claim itself—namely, whether it is viable and Garmon’s use of the term (which has jurisdictional
which sovereign’s law will govern its resolution. That is why consequences)).
litigants typically invoke preemption as a defense to state-law
claims asserted in state or federal court, not as a jurisdictional “As a general rule,” Garmon establishes that “federal
defect. courts do not have jurisdiction over activity which is
‘arguably subject to § 7 or § 8 of the [NLRA],’ and they
As these observations suggest, Garmon is more than a ‘must defer to the exclusive competence of the National
preemption doctrine. “When an activity is arguably subject Labor Relations Board.’” Kaiser Steel Corp. v. Mullins, 455
to § 7 or § 8 of the [National Labor Relations] Act,” Garmon U.S. 72, 83 (1982) (quoting Garmon, 359 U.S. at 245)
holds that “the States as well as the federal courts must defer (emphasis added). Under the doctrine, as a result, a federal
to the exclusive competence of the National Labor Relations district court does not have jurisdiction to determine whether
Board if the danger of state interference with national policy an employer violates the NLRA by refusing to make
is to be averted.” Garmon, 359 U.S. at 245. Sections 7 and contributions to a pension plan during contract negotiations,
8 of the National Labor Relations Act protect certain labor which is arguably an unfair labor practice. Laborers Health
practices (such as organizing or joining a labor union, & Welfare Trust Fund v. Advanced Lightweight Concrete Co.,
bargaining collectively, and engaging in concerted activity, or 484 U.S. 539, 543 n.4, 549 (1988). Nor does a federal district
refraining from engaging in any of these activities) and court have jurisdiction to review a claim by employees that
prohibit certain others (such as interfering with a protected their union violated the NLRA by charging agency fees for
activity or coercing employees to join a union). In nonrepresentational purposes, which also is arguably an
establishing the Garmon doctrine, two concerns motivated the unfair labor practice. Communications Workers of Am. v.
Supreme Court: (1) “the expressed congressional desire for Beck, 487 U.S. 735, 742–43 (1988); see also Breininger v.
uniformity in the nation’s labor policy” and (2) the desire “to Sheet Metal Workers Int’l Ass’n Local Union No. 6, 493 U.S.
make use of the Board’s expertise in the area of labor 67, 74 (1989); Storey v. Local 327, Int’l Bhd. of Teamsters,
relations.” Northwestern Ohio Adm’r, Inc. v. Walcher & Fox, 759 F.2d 517, 520 (6th Cir. 1985) (when Garmon applies,
Inc., 270 F.3d 1018, 1027 (6th Cir. 2001). “neither state nor federal courts have subject matter
jurisdiction”); id. at 522 (“Though state interference . . . was
Garmon is more than a traditional preemption doctrine, involved in Garmon, the Supreme Court made it clear that
then, because when properly invoked it tells us not just what pre-emption applies to federal district courts as well.”).
law applies (federal law, not state law) but who applies it (the
National Labor Relations Board, not the state courts or federal Like many “general” rules, however, this one contains
district courts). See Sears, Roebuck & Co. v. San Diego exceptions, the most important of which is that “federal courts
County Dist. Council of Carpenters, 436 U.S. 180, 199–200 may decide labor law questions that emerge as collateral
& n.29 (1978) (distinguishing between the “constitutional” issues in suits brought under independent federal remedies.”
component of the Garmon doctrine (rooted in Connell Constr. Co. v. Plumbers & Steamfitters Local Union
“[c]onsiderations of federal supremacy”) and the “primary No. 100, 421 U.S. 616, 626 (1975). Connell, for example,
jurisdiction” component of the Garmon doctrine (rooted in held that federal courts may decide labor-law questions that
the exclusive competence of an expert federal agency)); id. emerge as collateral issues in federal antitrust lawsuits even
(distinguishing between the administrative law doctrine of though such questions would normally fall within the
“primary jurisdiction” (which is a matter of abstention) and exclusive jurisdiction of the NLRB under Garmon and even
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 9 10 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
though state antitrust laws are nonetheless preempted under do not “circumvent the primary jurisdiction of the NLRB
the same circumstances. Id. at 626, 635–36; see Beck, 487 simply by casting statutory claims [under §§ 7 or 8 of the
U.S. at 743–44 (holding that a federal district court may NLRA] as violations of [an independent federal law].” Beck,
decide whether an activity is an unfair labor practice under the 487 U.S. at 743–44. The Supreme Court’s decision in
NLRA when the matter is raised as a defense to a claim under Advanced Lightweight Concrete illustrates the distinction.
an independent federal remedy over which the federal district Trustees of a pension plan filed a lawsuit under ERISA,
courts do have jurisdiction); Kaiser Steel, 455 U.S. at 86 alleging that the NLRA obligated an employer to make
(same); Hardeman, 401 U.S. at 237–39 (holding that certain pension-plan contributions. The Court concluded that
Congress “referred claims under the [Labor-Management the employer’s failure to make post-contract contributions
Reporting and Disclosures Act], not to the NLRB, but to the would be illegal, if at all, only by virtue of the NLRA because
federal courts,” even when the conduct at issue is also an ERISA did not require the contributions at issue and because
arguably unfair labor practice); Serrano v. Jones & Laughlin the NLRA arguably did. The exception to Garmon for
Steel Co., 790 F.2d 1279, 1288 (6th Cir. 1986) (“Federal independent federal remedies, the Supreme Court held, did
courts have jurisdiction under section 301 of the [Labor- not apply and accordingly the district court lacked jurisdiction
Management Relations Act] over suits to enforce collective over the case. 484 U.S. at 543 n.4, 549.
bargaining agreements . . . even when the employer’s conduct
is arguably covered by section 7 or 8 [of the NLRA].”). As applied to RICO and to the NLRA, these principles
indicate that Garmon does not preclude federal courts from
This exception to the Garmon doctrine for independent adjudicating a RICO action based upon conduct that is
federal remedies takes its instruction from a cardinal principle arguably protected or prohibited by the NLRA if under the
of statutory construction: “When there are two [federal] acts circumstances (1) RICO operates as an independent federal
upon the same subject, the rule is to give effect to both.” remedy and (2) the labor questions in the case amount to no
United States v. Borden Co., 308 U.S. 188, 198 (1939). more than collateral issues. This test, it seems to us, will
“[A]bsent an intolerable conflict between the two statutes,” infrequently preclude a federal court from hearing RICO
the Supreme Court has long been “unwilling to read the [later claims involving labor-related issues, and only two
Act] as repealing any part of the [former Act].” Atchison, circumstances immediately come to mind in which a federal
Topeka & Santa Fe Ry. Co. v. Buell, 480 U.S. 557, 566–67 RICO claim would fail this test and in which Garmon would
(1987); see, e.g., id. at 564 (“The fact that an injury otherwise apply.
compensable under the [Federal Employers’ Liability Act]
was caused by conduct that may have been subject to First, when a RICO action depends upon a predicate state
arbitration under the [Railway Labor Act] does not deprive an law violation and the state law itself is preempted under
employee of his opportunity to bring an FELA action for Garmon, a federal RICO action will not lie because a state-
damages.”); Morton v. Mancari, 417 U.S. 535, 549–50 law-dependent remedy is not an independent federal remedy.
(1974). See Baker v. IBP, Inc., 357 F.3d 685, 689 (7th Cir. 2004) (“If
the predicates are state offenses that themselves would be
Consistent with this principle of construction, federal preempted by Garmon, then invoking those laws indirectly
district courts may enforce congressional remedies created by through RICO” is still barred by Garmon.); see also
a different federal statute so long as the statute does not 18 U.S.C. § 1961(1) (defining “racketeering activity” to
conflict with §§ 7 or 8 of the NLRA and so long as litigants include “any act or threat involving murder, kidnapping,
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 11 12 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
gambling, arson, robbery, bribery, extortion, dealing in another, plaintiffs do not need to prove a violation of the
obscene matter, or dealing in a controlled substance . . . , NLRA in order to establish violations of the federal-law
which is chargeable under State law and punishable by predicate upon which they rely—§ 274 of the Immigration
imprisonment for more than one year”). A RICO claim that and Nationality Act (codified at 8 U.S.C. § 1324). See 18
depends on a Garmon-preempted state law would implicate U.S.C. § 1961(1)(F) (making “any act indictable under . . .
Garmon’s concern for uniformity in the nation’s labor policy section 274 (relating to bringing in and harboring certain
every bit as much as a pure-Garmon-preempted-state-law aliens)” a RICO predicate act if “committed for the purpose
claim. of financial gain”).
Second, when a RICO action depends upon a federal-law Congress added § 274 to RICO’s list of predicate offenses
predicate offense and a violation of that predicate law may be in 1996, see Antiterrorism and Effective Death Penalty Act of
found only if the defendant’s conduct violates the NLRA, the 1996, Pub. L. No. 104-132, § 433, 110 Stat. 214, and the
federal district courts lack jurisdiction under Garmon because provision makes it a crime to hire more than ten illegal aliens
the NLRA issues in the case would be anything but collateral. in any one-year period “with actual knowledge that the
A litigant may not “cast[] statutory claims” under the NLRA individuals are [illegal] aliens.” 8 U.S.C. § 1324(a)(3)(A). It
as violations of RICO, and a claim that depends entirely upon is difficult to see the relevance to this claim, let alone the
the ability to prosecute and prove a violation of the NLRA necessity, of plaintiffs’ proving that hiring illegal aliens is
would represent nothing more than an NLRA claim protected or prohibited conduct under the NLRA. If this
masquerading as a RICO one. See Tamburello v. Comm-Tract activity amounted to protected conduct, the NLRA might
Corp., 67 F.3d 973, 979 (1st Cir. 1995) (“Because plaintiff’s provide a defense on the merits of the RICO claim for Tyson,
claim hinges upon a determination of whether an unfair labor but that would be a collateral issue well within the federal
practice has occurred, we conclude that his RICO claims are courts’ competence to decide. If the activity amounted to
subject to the primary jurisdiction of the NLRB.”); Talbot v. prohibited conduct, plaintiffs’ union could bring a complaint
Robert Matthews Distrib. Co., 961 F.2d 654, 662 (7th Cir. before the National Labor Relations Board under the NLRA,
1992) (holding that the NLRA preempts a RICO claim when but that does not alter the fact that plaintiffs may
“the underlying conduct of the plaintiffs’ RICO claim is independently prove a violation of the INA as incorporated by
wrongful only by virtue of the labor laws”). RICO without raising a single NLRA issue and without
requiring the district court to interpret the NLRA. In the
Measured by these requirements, Tyson’s argument that the absence of a federal cause of action that requires the district
district court lacked jurisdiction over this claim falls short. court in the first instance to interpret the NLRA, it is difficult
Even assuming for the sake of argument that hiring illegal to see how Garmon is implicated in general or how the
aliens for the purpose of depressing employee wages is primary-jurisdiction concern that amplifies this aspect of the
arguably protected or prohibited by the NLRA, Garmon poses Garmon doctrine is implicated in particular. Garmon, in
no obstacle to the RICO claims in this case or to the district short, does not reach the RICO claims in this case.
court’s jurisdiction in this case.
In so holding, we are in good company, as this result
For one, plaintiffs do not rely upon any state law predicates, accords with a recent decision by the Seventh Circuit
let alone any Garmon-preempted state law predicates, so involving a RICO claim based on the same alleged predicate
Tyson has no basis for invoking Garmon on that ground. For offense and based on comparable factual allegations. See
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 13 14 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
Baker, 357 F.3d at 688–90. “When the predicate offenses of Like the antitrust laws, RICO’s civil-suit provision imposes
a particular claim under RICO are federal crimes other than two distinct but overlapping limitations on claimants—
transgressions of the labor laws,” Baker holds, “no dispute standing and proximate cause. Standing poses a threshold
falls within the [NLRB’s] primary jurisdiction, even if labor question involving constitutional, prudential and (as in this
relations turn out to be implicated in some other fashion.” Id. case) statutory limitations on who may sue, regardless of the
at 689. merits of that person’s claim. See Allen v. Wright, 468 U.S.
737, 750–51 (1984) (“In essence the question of standing is
III. whether the litigant is entitled to have the court decide the
merits of the dispute or of particular issues.”) (quotation
While the district court had jurisdiction to hear this case, it omitted). Proximate cause poses a merits question involving
remains to be seen whether the complaint states a claim upon common-law and prudential limitations on the consequences
which relief may be granted. The district court answered that for which the law will hold a defendant accountable,
question in the negative and dismissed the case for lack of regardless of the plaintiff’s standing to sue. See Holmes, 503
statutory standing because, in its view, plaintiffs neither U.S. at 268.
alleged a sufficiently direct injury nor advanced a sufficiently
plausible theory of damages. At this early stage of the case, To illustrate the difference between the two limitations,
we disagree. consider a plaintiff who files a negligence claim. It would be
odd to say that the plaintiff lacks standing because of an
A. intervening cause or because the harm to the plaintiff was not
reasonably foreseeable; the plaintiff may lose on the merits as
RICO’s civil-suit provision grants “[a]ny person injured in a matter of law for lack of proximate cause, but the injured
his business or property by reason of a violation of” RICO’s plaintiff would have the right to file a lawsuit. If, by contrast,
substantive provisions the right to “sue [] in any appropriate the same plaintiff is a shareholder of a corporation and wants
United States district court” and to “recover threefold the to sue the corporation’s accountant for negligence because the
damages he sustains and the cost of the suit, including a accountant’s conduct destroyed the value of the plaintiff’s
reasonable attorney’s fee.” 18 U.S.C. § 1964(c). Because stock, it would not be odd at all to say that the plaintiff lacks
Congress modeled this provision on similar language in the standing, regardless of the merits of the dispute; the injury
antitrust laws (§ 4 of the Clayton Act and § 7 the Sherman would be derivative of the injury suffered by the corporation,
Act) and because the antitrust laws have been interpreted to and the plaintiff would have no right even to file a lawsuit.
require that a private plaintiff show proximate cause in order See Gaff v. FDIC, 814 F.2d 311, 317 (6th Cir. 1987) (“[A]
to have standing to sue, RICO civil claims also require shareholder does not have standing to bring a direct cause of
proximate cause. See Holmes v. Sec. Investor Prot. Corp., action under federal law when the only damage alleged is the
503 U.S. 258, 267–68 (1992); see Sedima, S.P.R.L. v. Imrex diminution in the value of the corporate shares.”).
Co., 473 U.S. 479, 496 (1985) (A RICO plaintiff “[1] only
has standing if, and [2] can only recover to the extent that, he But the two concepts overlap and that is particularly true in
has been injured in his business or property by the conduct the context of civil RICO claims. As a general matter, they
constituting the violation.”). overlap because a plaintiff who lacks standing to vindicate a
derivative injury also will be unable to show proximate cause.
And as a matter of RICO law, the two concepts overlap
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 15 16 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
because they both grow out of the “by reason of” limitation in flowing merely from the misfortunes visited upon a third
RICO—namely, the requirement that claimants establish that person by the defendant’s acts,” the Court reasoned,
their injury was “by reason of” a RICO predicate act “generally . . . stand[s] at too remote a distance to recover.”
violation. The “by reason of” limitation, in other words, Id. at 268–69. The Court then offered three administrative
bundles together a variety of “judicial tools,” some of which justifications for this “directness” requirement: (1) the
are traditionally employed to decide causation questions and “difficult[y]” in “ascertain[ing] the amount of a[n] [indirect]
some of which are employed to decide standing questions. plaintiff’s damages attributable to the violation, as distinct
Holmes, 503 U.S. at 268 (“Here we use ‘proximate cause’ to from other, independent factors”; (2) the “complicated rules”
label generically the judicial tools used to limit a person’s courts would be forced to adopt to “apportion[] damages
responsibility for the consequences of that person’s own acts. among plaintiffs removed at different levels of injury from the
At bottom, the notion of proximate cause reflects ideas of violative acts, to obviate the risk of multiple recoveries”; and
what justice demands, or of what is administratively possible (3) the existence of a “directly injured victim[]” who “can
and convenient.”) (quotation omitted); see Associated Gen. generally be counted on to vindicate the law” and serve the
Contractors, Inc. v. Cal. State Council of Carpenters, 459 law’s “general interest in deterring injurious conduct.” Id. at
U.S. 519, 532–33 (1983) (“Congress simply assumed that 269.
antitrust damages litigation would be subject to constraints
comparable to well-accepted common-law rules applied in Holmes follows a course marked by a long line of Supreme
comparable litigation” including “doctrines such as Court cases denying antitrust standing to plaintiffs who suffer
foreseeability and proximate cause, directness of injury, derivative or “passed-on” injuries. See, e.g., Ill. Brick Co. v.
certainty of damages, and privity of contract.”); Desiano v. Illinois, 431 U.S. 720, 729 (1977) (holding that an indirect
Warner-Lambert Co., 326 F.3d 339, 346, 348 (2d Cir. 2003) purchaser lacked standing under the antitrust laws to sue for
(Calabresi, J.) (noting that RICO’s “directness” requirement, overcharges passed on to them by intermediaries); Associated
which is more stringent than that imposed under most States’ Gen. Contractors, 459 U.S. at 540–42 (holding that a union
proximate-cause jurisprudence, is a matter of statutory lacked standing to sue for injuries passed on to it by
standing, but that RICO also incorporates traditional intermediaries).
proximate cause requirements like foreseeability).
This Court has hewed to the same path before Holmes and
On one side of the ledger, the Supreme Court’s decision in since in denying RICO standing to parties who suffer
Holmes represents a classic statutory-standing case. The derivative or passed-on injuries. As we explained in County
Court held that the Securities Investor Protection Corporation of Oakland v. City of Detroit, 866 F.2d 839, 851 (6th Cir.
(SIPC) could not sue Robert Holmes, Jr. under RICO for 1989), a case involving antitrust and RICO claims, “[t]he
losses it suffered as a result of Holmes’ stock-manipulation doctrine of privity of contract . . . was in its heyday in 1890,”
scheme because the harm visited upon the SIPC was merely when Congress enacted the Sherman Act, and the Supreme
derivative of an injury to two broker-dealers, who not only Court “stated a truth with which lawyers practicing in 1890
could have sued Holmes but did sue him. Holmes, 503 U.S. would have been totally comfortable when it said that ‘[t]he
at 271–73; id. at 274 (“We hold not that RICO cannot serve general tendency of the law, in regard to damages at least, is
to right the conspirators’ wrongs, but merely that the not to go beyond the first step.” Id. at 851 (quoting S. Pac.
nonpurchasing customers, or SIPC in their stead, are not the Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 533
proper plaintiffs.”). “[A] plaintiff who complain[s] of harm (1918) (Holmes, J.)); see also Perry v. Am. Tobacco Co., Inc.,
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 17 18 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
324 F.3d 845, 849 (6th Cir. 2003) (holding that policy holders conduct may still be too weak to constitute proximate
lacked standing under RICO to sue tobacco companies for cause—because it is insubstantial, unforeseeable, speculative,
increased costs of insurance passed on to them as a result of or illogical, or because of intervening causes. See Perry, 324
the increased costs of treating smoking-related illnesses); Pik- F.3d at 850; Fleischhauer v. Feltner, 879 F.2d 1290, 1299
Coal Co. v. Big Rivers Elec. Corp., 200 F.3d 884, 890–91 (6th Cir. 1989) (RICO plaintiffs must “set out a reasonable
(6th Cir. 2000) (holding that a plaintiff who did not have a and principled basis of recovery” that is “not based on mere
direct contractual relationship with the defendant and who speculation and surmise”).
suffered injuries derivative of those realized by intermediate
parties lacked standing to sue under RICO); Firestone v. The point of all this is not just that the distinction between
Galbreath, 976 F.2d 279, 285 (6th Cir. 1992) (holding that statutory standing and proximate cause exists, but that
beneficiaries of an estate lacked standing under RICO to sue unbundling these distinct concepts has practical significance
for an injury derivative of the estate’s injury); Sanders for RICO cases in general and for this case in particular.
Confectionery Prods., Inc. v. Heller Fin., Inc., 973 F.2d 474, From a substantive standpoint, a RICO plaintiff who can
487 (6th Cir. 1992) (holding that a RICO plaintiff alleging show a direct injury may still lose the case if the injury does
destruction of the value of his stock lacks standing because not satisfy other traditional requirements of proximate
his injury is derivative of the corporation’s injury); County of cause—that the wrongful conduct be a substantial and
Oakland, 866 F.2d at 850–51 (holding that under the antitrust foreseeable cause and that the connection be logical and not
laws and RICO counties who purchased water directly from speculative.
the defendant, not the municipalities and consumers who
purchased water from the counties, were the proper parties to From a procedural standpoint, a RICO case with a
bring suit); Warren v. Mfrs. Nat’l Bank, 759 F.2d 542, 544 derivative-injury problem is better suited to dismissal on the
(6th Cir. 1985) (“In his capacity as a shareholder . . . , any pleadings than a RICO case with a traditional proximate-
injury [plaintiff] incurred was actually one sustained by the cause problem (e.g., a weak or insubstantial causal link, a lack
corporation. . . . [D]iminution in value of the corporate assets of foreseeability, or a speculative or illogical theory of
is an insufficient direct harm to give the shareholder standing damages). Under the familiar rules of notice pleading in
to sue [under RICO] in his own right.”) (quotation omitted). federal courts, a complaint should include merely “a short and
plain statement of the claim,” Fed. R. Civ. P. 8(a)(2), and a
On the other side of the ledger, RICO not only imposes a district court may dismiss a complaint for failure to state a
statutory standing limitation on claimants who seek recovery claim “‘only if it is clear that no relief could be granted under
for derivative or indirect injuries, but it also incorporates any set of facts that could be proved consistent with the
other traditional proximate-cause limitations on claimants. allegations,’” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514
See Perry, 324 F.3d at 850 (“Though foreseeability is an (2002) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73
element of the proximate cause analysis, it is distinct from the (1984)). Under these standards for pleading and dismissing
requirement of direct injury.”); Desiano, 326 F.3d at 348 cases, a court often finds no need to look beyond the face of
(noting that RICO incorporates a directness requirement that the complaint in order to determine that the plaintiff lacks
is more stringent than most States require and that RICO also standing because the injury was passed on by another party
incorporates foreseeability). Accordingly, while a RICO that had a more direct relationship with the defendant. But
plaintiff and defendant may have a direct and not a derivative since “we presume that general allegations embrace those
relationship, the causal link between the injury and the specific facts . . . necessary to support the claim,” other causal
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 19 20 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
weaknesses will more often be fodder for a summary- In its analysis, the district court accounted for the presence
judgment motion under Rule 56 than a motion to dismiss of a union, and properly so in our opinion. While the
under Rule 12(b)(6). NOW v. Scheidler, 510 U.S. 249, 256 amended complaint does not directly mention the presence of
(1994) (quotation omitted). a union by name, it specifically incorporates the criminal
indictment against Tyson (and indeed attached the indictment
B. to the complaint). That indictment specifically mentions the
union (a unit of the Retail, Wholesale, and Department Store
With these principles in mind, we turn first to Tyson’s Union, AFL-CIO) and says that the union represents the
argument that this is a statutory-standing (or derivative injury) workers at the Shelbyville plant, an allegation that necessarily
case. If anyone suffered a direct injury in connection with encompasses the further fact that under the NLRA the union
this alleged illegal-hiring scheme, the argument goes, it was serves as the employees’ exclusive bargaining representative
the union, not the employees. See Tyson Br. at 22 (“[A]n concerning wages, see 29 U.S.C. § 159(a). In view of these
injury to the bargaining power of a union is no more a direct allegations in the complaint and in view of the fact that the
injury to its members’ wages than an injury to a corporation collective bargaining agreement was properly before the
is an injury to a shareholder, or an injury to an estate is an district court with respect to the Rule 12(b)(1) motion, see,
injury to its beneficiary, or an injury to an insured’s customer e.g., Nichols v. Muskingum Coll., 318 F.3d 674, 677 (2003),
is an injury to an insurer.”) (citations omitted). Limiting the district court properly considered the existence of the
ourselves to the allegations contained in the complaint, union (and the collective bargaining agreement) in ruling on
however, we cannot agree that plaintiffs’ alleged injury is Tyson’s Rule 12(b)(6) motion.
exclusively derivative.
Even accounting for the collective bargaining agreement
The complaint alleges that Tyson directly employed the and the union’s role in negotiating it, however, this complaint
four plaintiffs, that Tyson directly paid them and that Tyson does not describe an injury that can be characterized as
directly injured plaintiffs by paying them less than they exclusively derivative. The fact that the union negotiated
otherwise would have paid them but for Tyson’s illegal- plaintiffs’ wages does not alter the more critical fact that
immigrant-hiring-scheme. Am. Compl. ¶¶ 36, 38. At the Tyson directly employed and directly paid plaintiffs. The
motion-to-dismiss stage, we presume that these general union served as plaintiffs’ agent for bargaining purposes, not
factual allegations embrace the specific facts needed to prove as their employer. The direct employment relationship
the claim. See Desiano, 326 F.3d at 350–51. between Tyson and plaintiffs distinguishes this dispute from
the Holmes line of cases, where the plaintiffs had no
In a Rule 12(b)(6) setting, this analysis ordinarily would relationship with the defendants except through
end the matter with respect to Tyson’s indirect/derivative intermediaries. See Holmes, 503 U.S. at 270–74
injury defense if not for the company’s additional arguments (SIPC–customers–brokers–tortfeasor); Perry, 324 F.3d at 849
(1) that a third party—a union—was involved in determining (policy holders–insurance company–smokers–tortfeasors);
the wages plaintiffs received and (2) that the union’s injury is Pik-Coal Co., 200 F.3d at 890–91 (coal broker–coal
more direct than the plaintiffs’ injury. Plaintiffs, in response, company–tortfeasor); Firestone, 976 F.2d at 285
argue that we should pay no attention to this additional party (beneficiaries–estate–tortfeasors); Sanders Confectionery
behind the curtain because the amended complaint does not Prods., Inc., 973 F.2d at 487
directly mention the existence of a union. (stockholder–corporation–tortfeasor).
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 21 22 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
This view of the employment relationship—even one the employees whom it represents in the courts of the United
involving a union—also remains faithful to the privity-of- States.”).
contract roots of the direct-injury requirement. See County of
Oakland, 866 F.2d at 851 (“The generation of which Senator Yet the Supreme Court and this Court have held that an
Sherman[, sponsor of the Sherman Act,] . . . [was a] employee may sue for breach of a collective bargaining
member[] would have been unsympathetic to the view that [a agreement without the union. See Groves v. Ring Screw
supplier] could be sued for damages . . . by any entity with Works, 498 U.S. 168, 173 (1990) (“Section 301 contemplates
which [the supplier] did not have a direct contractual suits by and against individual employees as well as between
relationship.”). While indirect purchasers lack standing under unions and employers; and contrary to earlier indications
RICO and the antitrust laws to sue for overcharges passed on § 301 suits encompass those seeking to vindicate uniquely
to them by middlemen, see Holmes, 503 U.S. at 268–69; Ill. personal rights of employees such as wages.”) (quotation
Brick, 431 U.S. at 729, direct purchasers do have standing. omitted); Smith v. Evening News Ass’n, 371 U.S. 195, 200
And if “direct purchasers” who pay too much “obviously (1962) (holding that an employee may sue for breach of a
assert a direct injury,” County of Oakland, 866 F.2d at 851, so collective bargaining agreement without the union); Anderson
do direct employees who receive too little. v. AT&T Corp., 147 F.3d 467, 474 (6th Cir. 1998) (same); see
also Int’l Union, United Auto., Aerospace & Agric. Implement
Traditional labor law principles point in the same direction. Workers of Am. v. Hoosier Cardinal Corp., 383 U.S. 696, 699
Tyson’s argument—that the real injury is to the (1966). Cf. Vaca v. Sipes, 386 U.S. 171, 186 (1967) (an
union—would suggest that only a union may sue an employer employee may be contractually bound to involve the union).
for breach of a collective bargaining agreement. If a union
and not the employee is the directly injured party when it If an employee has statutory standing to vindicate a wrong
comes to a lawsuit concerning wage-related violations of within the heartland of the union’s domain (a violation of a
RICO, then presumably the union and not the employee is the collective bargaining agreement), it follows that an employee
directly injured party when it comes to a lawsuit concerning has statutory standing to vindicate a wrong outside of the
wage-related violations of a collective bargaining union’s domain (a violation of RICO). Indeed, until Congress
agreement—a type of lawsuit that not only implicates the enacted § 301 of the LMRA in 1947 (twelve years after it
union’s exclusive role in negotiating collective bargaining enacted the NLRA), unions had no standing to bring many
agreements, but one that Congress expressly gave the union types of lawsuits. That task fell upon individual employees
the right to bring when it enacted § 301 of the Labor- because unincorporated associations like unions generally
Management Relation Act. 29 U.S.C. § 185(a) (“Suits for were not recognized as permissible litigants at common law.
violations of contracts between an employer and a labor See Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 510
organization representing employees in an industry affecting (1962) (“A principal motive behind the creation of federal
commerce as defined in this [Act], or between any such labor jurisdiction in this field [under § 301] was the belief that the
organizations, may be brought in any district court of the courts of many States could provide only imperfect relief
United States having jurisdiction of the parties, without because of rules of local law which made suits against labor
respect to the amount in controversy or without regard to the organizations difficult or impossible, by reason of their status
citizenship of the parties.”); id. § 185(b) (“Any such labor as unincorporated associations.”); Textile Workers Union of
organization may sue or be sued as an entity and in behalf of Am. v. Lincoln Mills, 353 U.S. 448, 454 (1957) (one purpose
of § 301 was to “‘provide for suits by unions as legal entities
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 23 24 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
and against unions as legal entities in the Federal courts’”) Lundy v. Ass’n of Prof’l Flight Attendants, 844 F.2d 245, 250
(quoting S. Rep. No. 80-105, at 16 (1947)). (5th Cir. 1988) (holding that a RICO action by union
members was properly dismissed where “[a]ny financial
The Supreme Court’s decision in Associated General improprieties occurred with union funds and directly injured
Contractors bolsters this analysis. Several unions sued a solely the union”).
multiemployer trade association alleging that the association
coerced general contractors and landowners into giving All of this strongly suggests that the administrative and
construction business to non-union firms, which caused double-recovery concerns highlighted in Holmes pose no
unionized contractors to lose business, which in turn harmed obstacle here—and indeed would pose a greater obstacle if we
the unions. An eight-justice majority concluded that the required the union to sue for some injury to it instead of
union lacked standing under the antitrust laws in large part allowing the employees to sue for an injury to them.
because it did not suffer a direct injury. One justice dissented, Damages to the employees (the difference between what they
arguing that the union’s injury was sufficiently direct. Most earned and what they would have earned) would be more
important for present purposes, however, was that all nine easily ascertained than damages to the union (the value of lost
justices seemed to agree that the injury to the bargaining power? lost influence? lost dues?). See Holmes,
employees/union members (lost wages) was both distinct 503 U.S. at 269. And a lawsuit by the employees presents no
from and more direct than the injury to the union (lost union problem of apportioning damages among plaintiffs removed
dues and diminished power). See 459 U.S. at 541 n.46 (“[I]f at different levels, as the union has not sued and it is unclear
the Union contends that revenues from dues payments what the union could recover if it did sue. See id. In view of
declined because its members lost jobs or wages because their these realities, the law cannot count on a more “directly
unionized employers lost business . . . [t]hat harm [] is even injured victim[]” to “vindicate the law as [a] private attorney[]
more indirect than the already indirect injury to its general” because, unlike Holmes where the directly injured
members.”); id. at 551 (Marshall, J., dissenting) (recognizing broker-dealers could sue and did sue, the union has not sued
that the injury to the unionized contracting firms (“lost and it is not clear that the union could sue. Id. at 269–70.
profits”) and the injury to the union-member-employees of
those firms (“lost wages”) were distinct from the injury to the C.
union (“lost union dues”)).
Tyson next argues that plaintiffs have failed to show
As Associated General Contractors suggests, injuries to proximate cause because the “chain of reasoning” in support
employees differ in kind and degree from injuries to their of their claim “is largely speculative.” Tyson Br. at 23. In
union—a difference that causes one to wonder exactly what Tyson’s view, plaintiffs’ case hinges on four speculative
a union could recover in this setting. The union could not sue premises: (1) that “there were sufficient illegal aliens in the
for depressed wages because it does not receive wages; it workforce to affect the Union’s leverage and lower the wage
negotiates them. Nor does it make a difference that the union scale that the Union negotiated”; (2) that “the Union would
perhaps could sue in an associational capacity on behalf of the have used any increased bargaining power to obtain increased
employees—an issue we address below—because that would wages, rather than to address other issues . . . unrelated to
still be a lawsuit to recover for a direct injury to the wages”; (3) that “Tyson is able to compete for unskilled labor
employees, not the union. Nor is this a case in which the with other businesses . . . that are not affected by the presence
union’s property or funds were mishandled. See Adams- of illegal immigrants in the workforce”; and (4) that
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 25 26 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
“plaintiffs chose not to obtain unskilled laborer positions at One other circuit has reached the same result on somewhat
the other businesses in the region offering higher wages.” Id. similar facts. In Mendoza v. Zirkle Fruit Co., 301 F.3d 1163
In the face of these attenuated links in the chain of causation, (9th Cir. 2002), legally-authorized apple workers sued several
Tyson asserts, plaintiffs cannot show proximate cause. growers under RICO alleging violations of the immigration
laws. The district court dismissed the complaint in Mendoza
Tyson may be right—but we cannot say so at this for lack of proximate cause—a decision relied upon by the
preliminary stage in the proceeding. Given the unadorned lower court in this case. In reversing, the Ninth Circuit held
allegations in the complaint, given the requirement that we that the suit was not one for a derivative or passed-on harm
must assume plaintiffs will be able to prove them and given and that other alleged weaknesses in the chain of causation
the absence of any discovery (or expert reports) thus far, were matters for summary judgment, not dismissal on the
Tyson’s argument requires us to do as much speculating as pleadings. See id. at 1171. As the Ninth Circuit put it: “[I]t
plaintiffs’ multi-link chain of causation allegedly requires us is inappropriate at this stage to substitute speculation for the
to do. There are many fact-driven questions here—e.g., complaint’s allegations of causation . . . . [T]he workers must
Tyson’s ability to influence the labor market in Shelbyville be allowed to make their case through presentation of
and the other cities where Tyson has a plant, the effect that evidence, including experts who will testify about the labor
the hiring practices of other businesses in Shelbyville and the market, the geographic market, and the effect of the illegal
other areas have on Tyson’s ability to depress wages, and the scheme.” Id. True, Mendoza did not involve a union; and
effect of Tyson’s alleged smuggling and employment of although we have already held that the existence of a union
illegal aliens on the local union—and the speculativeness of does not transform this dispute into a derivative-injury case,
our answers to all of them counsels against resolving the the union’s role in negotiating wages may well prove to
dispute as a matter of law at this early stage in the case. attenuate the chain of causation to the breaking point. But
since we know nothing about those negotiations and indeed
It remains possible that plaintiffs may prove the following barely know that a collective bargaining agreement exists, the
allegations in their complaint: (1) that Tyson hired sufficient Mendoza analysis cannot be relegated to the sideline on this
numbers of illegal aliens to impact the legal employees’ ground alone.
wages; (2) that each additional illegal worker hired into the
bargaining unit by Tyson has a measurable impact on the One other point deserves mention. The district court stated
bargained-for wage-scale; (3) that the illegal immigrants that a RICO case “cannot survive . . . if it is evident from the
allegedly brought into this country through Tyson’s efforts pleadings that independent factors exist which had an impact
allowed Tyson not to compete with other businesses for on plaintiffs’ economic loss.” D. Ct. Op. at 5. And one of the
unskilled labor; and (4) that Tyson’s legal workers did not reasons the district court gave for dismissing this case was
“choose” to remain at Tyson for less money than other that “plaintiffs’ wages could have been affected by [the
businesses offered, but had no choice in the matter given the wages] other employers paid, the availability of workers, the
hiring needs of the other businesses in the area and the influx profitability of the defendant’s businesses, and other factors
of illegal immigrants at Tyson’s facilities. While Tyson’s that influence any labor market,” and thus “the conclusion
proximate-cause argument may well carry the day at the that Tyson’s hiring of alleged illegal aliens depressed the
summary-judgment stage, it requires more assistance than the plaintiffs’ wages would require sheer speculation.” Id. at 6.
complaint alone provides. On appeal, Tyson concedes that plaintiffs need not show that
Tyson’s conduct was the sole cause of their injury in order to
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 27 28 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
establish proximate cause; they need show only that the the NLRA effectively does. Because a suit like this one “is at
conduct was a substantial cause. See Schwartz v. Sun Co., its core about the adequacy of [] wages,” and because the
276 F.3d 900, 904 (6th Cir. 2002) (“Where there is evidence, union’s representation under § 9 of the NLRA “is supposed
as in this case, which tends to show that [plaintiff’s] losses to be ‘exclusive’ with respect to wages,” the Seventh Circuit
were a result of [defendant’s] conduct, as well as evidence intimated, the suit may not proceed without the union. 357
which tends to show that his losses were attributable to other F.3d at 690. “Individual workers,” the court explained, “may
factors, it is normally up to the trier of fact to decide which is step into the union’s shoes only if it has violated its duty of
the case.”); Cox v. Admin. United States Steel & Carnegie, 17 fair representation.” Id. at 690–91 (citing Vaca v. Sipes, 386
F.3d 1386, 1399 (11th Cir. 1994) (“A proximate cause is not U.S. 171, 186 (1967)). And since the complaint in that case
[] the same thing as a sole cause. Instead, a factor is a did not “name the union as a party” and did not “contend that
proximate cause if it is a substantial factor in the sequence of the union neglected its duty to represent the employees’
responsible causation.”) (quotation omitted); id. (holding that interests with respect to wages,” it should be dismissed. Id.
union members had standing to bring RICO claims for at 691. Indeed, “[w]ithout the union as a party,” the court
reduced compensation under collective bargaining explained, “the litigants could not settle [the] suit for higher
agreement). That determination will require some evidence hourly pay (or back pay)” because “that would be a real
in this case. In the meantime, plaintiffs have met the refusal on [the company’s] part to bargain with its union [in
requirements for defeating a motion to dismiss on proximate- violation of the NLRA].” Id.
cause grounds.
As an initial matter, Tyson did not argue in the district
D. court, in its appellate briefs or at oral argument that the union
is an indispensable party to this lawsuit. See Fed. R. Civ. P.
Quite apart from the questions raised in this case regarding 19. Relying on Baker, Tyson instead raised the issue in a
Garmon preemption, statutory standing and proximate cause, supplemental filing after oral argument. “Whether the Union
Tyson separately argues that the case was properly dismissed should be joined,” however, “is . . . a matter for the District
because the NLRA gives the union the exclusive right to Court in the first instance,” EEOC v. MacMillan Bloedel
prosecute it or at a minimum requires the union’s Containers, Inc., 503 F.2d 1086, 1096 (6th Cir. 1974), and we
participation. The union, Tyson correctly observes, is the leave it to the district court to address the issue on remand
employees’ exclusive bargaining representative, and § 9(a) of should the parties or the district court wish to pursue it. To
the NLRA makes the union the “exclusive representative[] of the extent Tyson is relying on Baker to suggest that the union
all the employees in such unit for the purposes of collective is not only a necessary party, but also the only party that may
bargaining in respect to rates of pay, wages, hours of pursue these RICO claims, that issue also has not yet been
employment, or other conditions of employment.” 29 U.S.C. properly joined by the parties.
§ 159(a). Without the entity exclusively responsible for
negotiating wages at the wheel, Tyson asserts, this case may Nor is it clear to us that Baker’s suggestion is correct. The
not proceed. principle that an employee must involve the union in a
lawsuit, by suing it or otherwise alleging that it violated its
A recent Seventh Circuit decision provides some support duty of fair representation, comes from (1) § 301 of the
for this view. While holding that Garmon does not “preempt” LMRA (which addresses lawsuits to enforce collective
lost-wage claims like these, Baker v. IBP suggests that § 9 of bargaining agreements) and (2) the particular terms of
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 29 30 Trollinger, et al. v. Tyson Foods, Inc. No. 02-6020
collective bargaining agreements (which in many cases bargaining agreements. See Pub. L. No. 80-101, 61 Stat. 136,
contain an exclusive grievance procedure). As we have 156–57 (1947). In view of this statutory history, we fail to
already noted, § 301 does not necessarily require the union’s see how Congress could have intended unions to be
involvement in lawsuits involving wage provisions of a employees’ “exclusive representatives” in all wage-related
collective bargaining agreement. See Office & Prof’l litigation. Indeed, if only one of the two—the union or the
Employees Int’l Union, Local 2 v. FDIC, 962 F.2d 63, 66 employees—were allowed to bring this suit, it likely would
(D.C. Cir. 1992) (R. Ginsburg, J.) (“[W]hen a claim derives have to be the employees, not the union. See Int’l Union,
from a collective bargaining agreement—an arrangement United Auto., Aerospace & Agric. Implement Workers of Am.
negotiated by a union and to which it is a signatory—the v. Brock, 477 U.S. 274, 282 (1986) (associational standing is
labor organization is an appropriate party (although not the inappropriate when “‘the relief sought . . . make[s] the
only appropriate party) to vindicate employees’ rights.”). individual participation of each injured party indispensable to
Only when a collective bargaining agreement includes an proper resolution of the cause’”) (quoting Warth v. Seldin,
exclusive contractual remedy must an employee involve the 422 U.S. 490, 511 (1975)); id. at 287 (union had associational
union in a lawsuit, and even then only if the employee fails to standing because it was not seeking damages on behalf of its
exhaust the contractual grievance process. That was the members, just the resolution of “a pure question of law”).
holding of Vaca v. Sipes, 386 U.S. 171 (1967), the one case
cited by the Seventh Circuit in support of its § 9 holding. IV.
In contrast, this case involves a damages lawsuit for Plaintiffs still face a number of obstacles in this lawsuit.
violations of RICO, not a lawsuit for breach of a collective The case may not survive a summary-judgment motion if the
bargaining agreement that contains an exclusive contractual economic and other factual premises of plaintiffs’ claim
remedy. To the extent the pertinent collective bargaining reveal a causal relationship that is too weak or too attenuated.
agreements would require the participation of the union in a Nor do we express an opinion as to whether the case may
dispute of this sort, no one has argued it. So far, the dispute proceed as a class action. The district court did not have an
in this case has been about whether the district court should opportunity to address that issue because it first ruled on the
have noted the mere existence of the agreements and what the merits of the motion to dismiss. And, finally, we do not
existence of those agreements means under Garmon and express an opinion as to whether plaintiffs can show that
RICO, not what the agreements actually require. Tyson and its co-conspirators constituted an “enterprise”
within the meaning of RICO. See 18 U.S.C. § 1962(c). In
The historical context in which these statutes were enacted Baker, the Seventh Circuit concluded that a similar
also suggests that when Congress made unions the exclusive conspiracy did not satisfy the enterprise requirement, 357
representative of employees for purposes of collective F.3d at 691–92, but since the district court did not reach that
bargaining, it did not mean to establish unions as the issue below, the resolution of this question also should await
exclusive representative of employees for purposes of all a summary-judgment motion. In this appeal, we hold only
wage-related litigation. Section 9(a) was enacted in 1935, see that the district court had subject-matter jurisdiction over the
Pub. L. No. 74-198, 49 Stat. 453, 449 (1935), at a time when dispute and that the case should not have been dismissed on
unions (as unincorporated associations) could not sue in many the pleadings.
courts. Not until 1947, when Congress enacted § 301 of the
LMRA, did unions have standing to enforce collective
No. 02-6020 Trollinger, et al. v. Tyson Foods, Inc. 31
For the foregoing reasons, we reverse the district court’s
judgment and remand the case for further proceedings
consistent with this opinion.