March 01, 2013 Labor and Employment Law

Employers Beware: RICO and Immigration Enforcement

Louise N. Smith

The Racketeer Influenced and Corrupt Organizations Act (RICO) was enacted as part of the Organized Crime Control Act of 1970 to eradicate organized crime in the United States. In 1996 Congress amended the list of “racketeering activity” to include any act that violates section 274 of the Immigration and Nationality Act (entitled “Bringing in and harboring certain aliens”), provided that the act is done for financial gain.

This article explores the feasibility of civil RICO claims as a tool for immigration enforcement in the workplace.

RICO requirements. A civil RICO claim is twofold: (1) plaintiffs must prove a substantive violation, and (2) plaintiffs must have standing to sue. To establish standing, plaintiffs must sufficiently allege injury to business or property “by reason of” a substantive violation under section 1962(c). In addition to requiring proximate cause, the Supreme Court in Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 269 (1992), read a direct-injury (but for causation) requirement into the “by reason of” language. Hence, an injury arising from the defendant’s harm to a third party fails “but for” causation. Conversely, proximate cause is established when the defendant’s misconduct is merely a “substantial” and “foreseeable” factor in the plaintiff’s injury and the causal link is “logical and not speculative.” Thus, plaintiffs who fail to sufficiently allege both proximate and direct causation fail to meet the standing requirements under section 1964(c).

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