Labor & Employment Law Daily Wrap Up, PROCEDURE—N.D. Ill.: Refrigerated trucking RICO claims dismissed for failure to plead defendants’ roles, (May 5, 2026)

By Martin A. Steinberg, J.D.

The court held that the plaintiffs adequately alleged a RICO enterprise and pattern, but failed to plead each defendant’s role in the alleged fraud with Rule 9(b) particularity.

The federal district court in Chicago dismissed, without prejudice, civil RICO and state law claims brought by Rodolight LLC and truck driver Paul Rodoslavov against USA Truck Lines, related trucking companies, and individual defendants. Rodolight alleged that the trucking companies operated a refrigerated-trucking scheme involving broken trailer seals, falsified bills of lading, commingled loads, unsafe trucks, manipulated driver logs, and other misconduct to cut costs and increase profits. The court held that the complaint sufficiently alleged an association-in-fact enterprise and a pattern of racketeering activity, but failed to satisfy Rule 9(b)’s particularity requirement because, except as to Ryan Davidovich, it largely lumped the defendants together without specifying each defendant’s role in the alleged fraud. With the RICO claim dismissed, the court declined to exercise supplemental jurisdiction over the Illinois statutory and civil conspiracy claims and found that diversity jurisdiction was inadequately pleaded. Rodolight was granted leave to amend (Rodolight LLC v. USA Truck Lines, Inc., No. 1:25-cv-06093 (N.D. Ill. Apr. 30, 2026)).

Background. Rodolight LLC and Paul Rodoslavov sued USA Truck Lines, Inc., Stery Trucking, Ltd., Quality Refrigerated Transport, Inc., Quality Truck and Reefer Repair Inc., Big Mike Towing and Recovery, Inc., Mike Davidovich, Yelena Gimelshteyn, Steven Davidovich, Ryan Davidovich, and Oksana Kolyadenko, asserting claims under the Racketeer Influenced and Corrupt Organizations Act, the Illinois Whistleblower Act, the Illinois Consumer Fraud and Deceptive Business Practices Act, and a civil conspiracy theory. The defendants consisted of members of the Davidovich family, their trucking-related companies, and one company employee. The defendants moved to dismiss the civil RICO claims for failure to state a claim and the Illinois state-law claims for lack of jurisdiction.

USA Truck Lines and Quality Refrigerated Trucking transported temperature-controlled goods, while Stery Trucking allegedly leased or loaned trucks and trailers to the other companies. Plaintiffs alleged that the companies operated as alter egos or acted in concert.

Rodoslavov, a commercial truck driver operating through Rodolight LLC, entered into an independent contractor agreement with USA Truck Lines and Stery Trucking, but alleged that the companies exercised substantial control over his work. He claimed that the companies directed him to switch trailers frequently, open sealed refrigerated trailers, unload and store goods at improper temperatures, transfer goods into other trailers, and combine loads for multiple deliveries. He also alleged that Ryan Davidovich instructed him to open boxes to check product temperatures, then conceal the tampering, and to falsify seal numbers and bills of lading, including covering a broken seal with a new one and altering paperwork with white-out. The complaint further alleged that the companies used different company names when making deliveries to conceal the load-mixing practice.

Rodoslavov alleged that the companies manipulated logbooks and electronic logging devices to evade hours-of-service rules, required drivers to drive longer than legally permitted and without required breaks, and used fictitious “co-drivers” to conceal violations. He also alleged that he was required to drive unsafe or illegally modified trucks, including trucks with disconnected diesel exhaust fluid systems and automatic braking system defects, and that his complaints to Ryan, Quality Repair mechanics, or others working for the companies were ignored.

To state a claim under § 1962(c), the plaintiffs had to allege that the defendants engaged in the conduct of an enterprise through a pattern of racketeering activity. The defendants challenged each element. The court held that the plaintiffs sufficiently alleged an association-in-fact enterprise and a pattern of racketeering activity. Still, the claim failed because the complaint did not plead with particularity the actionable conduct attributable to each defendant.

Enterprise. The court held that the plaintiffs sufficiently alleged a RICO enterprise. A RICO enterprise may be a legal entity or an association-in-fact, and the plaintiff must identify a RICO “person” distinct from the enterprise. The plaintiffs relied on an association-in-fact enterprise, which required allegations of a common purpose, relationships among the participants, and enough longevity to permit the enterprise to pursue its purpose.

The defendants argued that the plaintiffs failed to allege an enterprise distinct from the defendants. The court rejected that argument at the pleading stage. The plaintiffs alleged that ten separate defendants worked together to deceive customers, reduce costs, and maximize profits by breaking seals, combining loads, and falsifying records. The complaint also described the relationships among the individuals and companies. Even if the companies were alter egos, the court concluded that the complaint still alleged that the combined alter-ego companies worked with individual defendants to engage in the alleged RICO conduct.

The court also found the longevity requirement satisfied. The alleged enterprise existed at least during Rodoslavov’s work for USA Truck Lines and Stery Trucking from February to May 2024, and the alleged misconduct was described as a “policy and practice.” Because the complaint alleged multiple trips and load-combining on “nearly every other load,” the court concluded that the plaintiffs had adequately pleaded the structural features of an association-in-fact enterprise.

Pattern of racketeering activity. The court next held that the plaintiffs sufficiently alleged a pattern of racketeering activity. A RICO pattern requires at least two predicate acts within 10 years, plus both a relationship among the acts and a threat of continuing activity. The court explained that continuity may be closed-ended, based on conduct extending over a sufficiently long period, or open-ended, based on short-lived conduct that threatens to continue.

The court found the open-ended continuity theory adequately pleaded. The plaintiffs alleged that, beginning just days into their employment and continuing for months, the defendants regularly opened and unloaded goods from sealed trailers, stored goods without proper refrigeration, transferred goods into other trailers, and combined loads for delivery by one driver to multiple locations. They also alleged that the defendants altered seal numbers and bills of lading to conceal the tampering and directed plaintiffs to check in with customers under different company names.

The court further relied on allegations that the defendants disconnected diesel exhaust fluid systems, required plaintiffs to drive unsafe trucks, tampered with electronic logging devices, and falsified log data. According to the complaint, these practices were part of the Davidovich companies’ policy and practice to reduce costs, increase profit margins, and steal driver compensation. The court concluded that the alleged predicate acts of fraud were part of the defendants’ ongoing, regular course of business, creating a concrete threat of continued misconduct. That was enough to allege a pattern of racketeering activity.

Conduct by each defendant. Although the enterprise and pattern allegations were sufficient, the court held that the RICO claim failed because the complaint did not give adequate notice of each defendant’s actionable conduct. To plead a § 1962(c) claim, the plaintiffs had to allege that each defendant conducted or participated in the enterprise’s affairs, meaning that the defendant played some part in directing the enterprise. Because the alleged predicate acts included mail and wire fraud, Rule 9(b)’s heightened pleading standard applied, requiring the plaintiffs to plead the “who, what, when, where, and how” of the alleged fraud.

The court found that the complaint did not meet that standard. Except for Ryan Davidovich, the plaintiffs failed to allege with particularity what the other individual defendants or companies did in connection with the alleged fraud. Instead, the complaint repeatedly referred generally to the “Davidovich companies” or “defendants.” The court held that this type of group pleading impermissibly lumped defendants together and failed to provide fair notice of each defendant’s role. The court also faulted the complaint for alleging some fraudulent conduct on “information and belief,” which did not satisfy Rule 9(b)’s particularity requirement.

The complaint included more specific allegations about Oksana Kolyadenko, but the court found them insufficient because they concerned her role as the human resources manager. Providing professional services to an alleged racketeering enterprise, or merely knowing of unlawful activity, is not enough to satisfy RICO’s operation-or-management requirement. The plaintiffs did not allege that Kolyadenko knew about the fraud, much less that she conducted or participated in the operation or management of the alleged enterprise.

State law claims. After dismissing the federal RICO claim, the court turned to the defendants’ argument that there was no remaining basis for federal jurisdiction over the Illinois state-law claims. The court agreed. The plaintiffs had not adequately alleged diversity jurisdiction because the complaint stated only that Rodoslavov resided in Georgia, and residence alone is insufficient to establish citizenship for diversity purposes. The court also found the diversity allegations deficient because the individual defendants’ citizenship was alleged only on information and belief, a basis the Seventh Circuit has questioned as sufficient to establish jurisdiction.

Because the RICO claim was dismissed and diversity jurisdiction was inadequately pleaded, the court declined to exercise supplemental jurisdiction over the Illinois Whistleblower Act, the Illinois Consumer Fraud and Deceptive Business Practices Act, and civil conspiracy claims under 28 U.S.C. § 1367(c)(3). The state-law claims were dismissed without prejudice. Plaintiffs were granted leave to file an amended complaint by May 22, 2026. If no amended complaint is filed, the dismissal of the federal claim will automatically convert to a dismissal with prejudice.

The Case is No. 1:25-cv-06093.

Judge: Shah, M.

Attorneys: Shorge Kenneth Sato (Shoken Legal PC) for Rodolight LLC. Vernon E. Morgan (Vernon E. Morgan, P.C.) for USA Truck Lines, Inc.

Companies: Rodolight LLC; USA Truck Lines, Inc.

Cases: Procedure StateLawClaims IllinoisNews