Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union 639

913 F.2d 948, 286 U.S. App. D.C. 182
Court of Appeals for the D.C. Circuit·Decided September 4, 1990·No. Nos. 86-5135, 86-5136·Published·Cited by 27 cases

Opinions

SENTELLE, Circuit Judge:

In 18 U.S.C. § 1962(c), the Racketeer Influenced and Corrupt Organizations Act (“RICO”) makes it “unlawful for any person employed by or associated with any enterprise engaged in ... interstate ... commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” In this case, the issue is: Does a union merely by conducting a recognition strike against an employer “conduct or participate, directly or indirectly, in the conduct of” the employer’s affairs within the meaning of section 1962(c)? Our answer is that it does not. In reaching that conclusion, we examine the breadth of the “participation” element of the statutory cause of action under civil RICO.

I. Background

A. The Statute

In 1970, Congress enacted RICO as Title IX of the Organized Crime Control Act of 1970, Pub.L. No. 91-452, 84 Stat. 941. RICO is codified at 18 U.S.C. §§ 1961-68. Although codified in Title 18, Crimes and Criminal Procedure, the RICO statute also establishes civil remedies in section 1964. That section provides in pertinent part that

[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.

18 U.S.C. § 1964(c).

Thus, although section 1964 creates the civil remedy, it is to section 1962 that we must look for the substantive law underlying the civil claim. In the present action, the claim arises under subsection (c) of section 1962:

[184] It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.

18 U.S.C. § 1962(c).1

To make out a claim for relief “a civil RICO claimant must prove (1) a violation of the substantive RICO statute, 18 U.S.C. § 1962, and (2) an injury to the plaintiff’s ‘business or property by reason of a violation of section 1962.’ ” Alcorn County, Miss. v. U.S. Interstate Supplies, Inc., 731 F.2d 1160, 1167 (5th Cir.1984). Thus, in addition to the element of injury, a civil RICO plaintiff making a claim under subsection (c) must prove:

(1) the existence of an enterprise which affects interstate or foreign commerce;
(2) that the defendant was “employed by” or “associated with” the enterprise;
(3) that the defendant participated in the conduct of the enterprise’s affairs; and
(4) that the participation was through a pattern of racketeering activity____

Id. at 1168 (internal brackets omitted) (citing United States v. Phillips, 664 F.2d 971, 1011 (5th Cir. Unit B 1981)).2

In the present en banc review, we address the scope of the third or “participation in the conduct of affairs” element.3

B. The Litigation

The factual background of this litigation is set forth in some detail in the two panel opinions previously issued in the case. Yellow Bus Lines, Inc. v. Local Union 639, 839 F.2d 782 (D.C.Cir.1988), vacated, — U.S. —, 109 S.Ct. 3235, 106 L.Ed.2d 583 (1989) (Panel Op. I); Yellow Bus Lines, Inc. v. Local Union 639, 883 F.2d 132 (D.C.Cir.1989), reh’g granted (Oct. 17, 1989) (Panel Op. II). We will not detail those facts unrelated to the issue before the en banc Court, but a brief review is necessary to provide a context for our decision.

This litigation arose out of events surrounding a four-day strike for recognition conducted by Local Union 639 (“the Union”) against Yellow Bus Lines, Inc. (“Yellow Bus” or “the bus line”) in 1981. Yellow Bus asserted a number of claims, most of them nonfederal tort matters. We do not address those nonfederal causes of action as an en banc Court, but leave intact the dispositions entered by the panel opinions cited above. In the claims we examine in the present review, Yellow Bus alleged violations of RICO, 18 U.S.C. §§ 1962(c) & (d), by the Union and its business agent and trustee James Woodward.

The bus line’s original RICO complaint alleged that defendants Union and Woodward constituted “an enterprise” within the meaning of section 1962. The District Court, in an order of June 1, 1984, supported by a memorandum of June 28, 1984, dismissed the RICO action against the Union. The District Court reasoned:

The language of § 1962 clearly contemplates the interaction of a person and an enterprise, both separately defined by the Act. RICO prohibits any person, [185] employed by or associated with an enterprise, from participating in the conduct of such enterprise through a pattern of racketeering activity. RICO does not hold the enterprise ... liable, but only those persons who seek to participate in the affairs of the enterprise through a pattern of racketeering activity____ The language of RICO has been found to be ambiguous on other issues, but we find this language is clear and that our interpretation is supported by the case law.

Yellow Bus Lines, Inc. v. Local Union 639, No. 83-1232, slip op. at 8, 1984 WL 2915 (D.D.C. June 28, 1984) (“Memorandum of June 28”) (quoting Bays v. Hunter Savings Assoc., 539 F.Supp. 1020, 1023-24 (S.D.Ohio 1982)).

Each of our panel opinions has affirmed that decision of the District Court, reasoning, inter alia:

Logic alone dictates that one entity may not serve as the enterprise and the person associated with it because, as Judge Posner of the Seventh Circuit has stated, “you cannot associate with yourself.”

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Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union 639, 913 F.2d 948, 286 U.S. App. D.C. 182 (D.C. Cir. 1990).

913 F.2d 948 (Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union 639) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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