Antitrust Law Daily Wrap Up, RICO—11th Cir.: Dismissal of RICO claims upheld in employment termination dispute, (May 8, 2014)

By Linda O’Brien, J.D., LL.M.

A federal district court properly dismissed a Racketeer Influenced and Corrupt Organizations Act (RICO) claim filed by a former employee against a restaurant, its owners, and several government officials in relation to his termination of employment and denial of unemployment compensation, the U.S. Court of Appeals in Atlanta has held (Pugh v. Balish, May 7, 2014, Per Curiam).

Leon Pugh was employed at The Olde Pink House restaurant owned by William Balish, Bette Balish, and Chiara Balish Barnett. Following his termination from employment for alleged misconduct, Pugh unsuccessfully attempted to obtain unemployment benefits. Pugh filed suit against the three restaurant owners, their corporate entity, Garibaldi’s, Inc., and several government officials, alleging RICO and civil rights violations. Pugh alleged that the defendant restaurant owners fabricated claims against him and engaged in a conspiracy with government officials to deny him unemployment compensation. The district court granted the defendants’ motion to dismiss the complaint as frivolous.

The district court did not err in dismissing the complaint for failure to state a plausible claim for relief, according to the court. To establish a violation under RICO, a plaintiff must show conduct of an enterprise through a pattern of racketeering activity. Pugh failed to allege any activity that would qualify as racketeering activity and, therefore, failed to allege a pattern of racketeering activity. Pugh also failed to allege causation between a substantive RICO violation and any injury he suffered. Thus, the plaintiff failed to establish the elements of a RICO violation.

Pugh’s civil rights claims were also properly dismissed. The state officials sued for damages in their official capacity were immune from suit in their official capacity under the Eleventh Amendment of the U.S. Constitution. Pugh failed to show how the restaurant owners were state actors who acted with government officials to deny him a federal right. Finally, his claim, filed more than two years after his termination, was barred by the statute of limitations, the court concluded.

The case is No. 14-10178.

Companies: Garibaldi's, Inc.

Cases: RICO AlabamaNews FloridaNews GeorgiaNews