Mendoza v. Zirkle Fruit Co.

301 F.3d 1163, 2002 WL 2004380
CourtCourt of Appeals for the Ninth Circuit
DecidedSeptember 3, 2002
DocketNo. 01-35276
StatusPublished
Cited by79 cases

This text of 301 F.3d 1163 (Mendoza v. Zirkle Fruit Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 2002 WL 2004380 (9th Cir. 2002).

Opinion

McKEOWN, Circuit Judge.

This case arises from claims that two agricultural companies leveraged the hiring of undocumented immigrants in order to depress the wages of their legally documented employees. We are called upon to decide two significant issues. First, we must determine whether, under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968, legally documented agricultural workers have standing to sue their employers, whom they allege depressed their salaries by conspiring to hire undocumented workers at below market wages. Second, we must consider the constitutionality of supplemental subject matter jurisdiction involving a party over whom there is no independent basis for federal court jurisdiction. The district court resolved both questions in favor of the defendants and dismissed this lawsuit on the pleadings. We reverse.

Background

Olivia Mendoza, Juana Mendiola, and the purported class (“employees”) are agricultural laborers for Zirkle Fruit Company and Matson Fruit Company (“growers”), which operate fruit orchards and packing houses in Eastern Washington, the heart of Washington’s fruit industry. According to the complaint,1 the employees are “persons legally authorized to be employed in the United States.” They worked for the growers “at wages that are substantially depressed because of the Illegal Immigrant Hiring Scheme.” Pursuant to the scheme, Zirkle and Matson “knowingly hire workers of illegal status because the illegal workers are willing to accept wages that are significantly lower than wages would be in a labor market eom-prised solely of legally authorized workers.” They do so “for the purpose of depressing employee wages below the levels they would otherwise be required to pay if they were unable to hire substantial numbers of illegal immigrants who, due to their economic situation and fear of asserting their rights due to their illegal status, can be easily exploited and who are therefore willing to work for depressed wages.” The complaint provides substantial background and detail about the scope of the challenged scheme:

Eastern Washington is the heart of Washington’s famed apple and fruit industry. This area ... is uniquely suited for growing fruit....
In Washington state there are more than 15,000 fruit packers and 30,000 orchard pickers of fruit. Many operations require unskilled, low-wage laborers for harvesting and packing and other related tasks requiring manual labor. While the industry now generates over $1 billion, many of these workers live in poverty.
Defendants Matson and Zirkle operate fruit orchards and packing houses. Matson and Zirkle are motivated to keep labor costs as low as possible and, due to a variety of complex social and economic factors, the industry’s demand for low-skilled workers has attracted many workers of Mexican citizenship. Many of these Mexican nationals are illegal immigrants who have been smuggled into the U.S. and/or harbored in the U.S. by relatives, friends, and the employers. Matson and Zirkle ... knowingly hire workers of illegal status because illegal workers are willing to accept wages that are significantly lower [1167]*1167than wages would be in a labor market comprised solely of legally authorized workers.

The Immigration and Naturalization Service has conducted investigations finding that as much as half the growers’ workforce is employed illegally, and the growers have been targeted for “raids and other law enforcement procedures.”

According to the complaint, the scheme is facilitated by Selective Employment Agency, Inc., a separate company that employs the workers and then “loans” them to the growers. “Defendants Matson and Zirkle use Selective Employment as a ‘front company’ for the purpose of perpetrating this scheme with the hope that each will be thus shielded from charges that they violated federal law.” Although Selective Employment was named only as an association-in-fact enterprise, not as a defendant, in the federal RICO claim, the complaint alleged a state conspiracy claim that did name Selective Employment as a defendant.

The district court dismissed the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).2 Although the district court held that the employees pled a direct injury because there was no intervening third party from whom their injury was derived, the court dismissed the complaint on grounds that the damages were too speculative and difficult to ascertain.3

The employees moved for reconsideration, proffering a proposed amended complaint that alleged a conspiracy broader than the named growers and included more specific causation allegations. The amended complaint states that the growers and unnamed conspirators “comprise a large percentage of the fruit orchards and packing houses in the area, and therefore affect wages throughout the labor market for apple pickers and fruit packers, [such that] competition with respect to wages is stifled and suppressed.” The proffered complaint also adds six paragraphs explaining how the scheme injures the workers. Nonetheless, the district court denied the motion, clarifying that it was not dismissing merely for difficulty of proof, but for lack of concrete injury and proximate causation.

In addition, the district court, quite reluctantly, granted Selective Employment’s motion to dismiss pursuant to Rule 12(b)(1). The district court determined that it was bound by Ayala v. United States, 550 F.2d 1196 (9th Cir.1977), cert. granted, 434 U.S. 814, 98 S.Ct. 50, 54 L.Ed.2d 70 (1977), cert. dismissed, 435 U.S. 982, 98 S.Ct. 1635, 56 L.Ed.2d 76 (1978), which it characterized as holding pendent-party jurisdiction unconstitutional.

Discussion

We note at the outset that the district court dismissed this case on the pleadings. Consequently, our review is de novo, and we may affirm the dismissal “only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 122 S.Ct. 992, 998, 152 L.Ed.2d 1 (2002) (quoting Hishon v. King & Spald[1168]*1168ing, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984)). In the RICO context, “[a]t the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support the claim.” NOW v. Scheidler, 510 U.S. 249, 256, 114 S.Ct. 798, 127 L.Ed.2d 99 (1994) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).

The district court offered two bases for dismissal on the pleadings: RICO standing and supplemental jurisdiction.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
301 F.3d 1163, 2002 WL 2004380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mendoza-v-zirkle-fruit-co-ca9-2002.