Antitrust Law Daily Wrap Up, RICO—1stCir: Puerto Rico Water Authority Employees’ RICO Claims Over Toxic Metal Exposure Dismissed, (Dec 12, 2012)

By Tobias J. Gillett, J.D., LLM.

The U.S. Court of Appeals in Boston has dismissed the appeal of current and former employees of the Puerto Rico Aqueduct and Sewer Authority (PRASA) seeking reversal of the federal district court in Hato Rey, Puerto Rico’s disposition of their Racketeer Influenced and Corrupt Organizations (RICO) claims against the agency, its management, and other government agencies and affiliated individuals and entities (Alejandro-Martinez v. Ortiz-Vazquez, December 10, 2012, per curiam).

The Puerto Rico Aqueduct and Sewer Authority provides water and sewer services to residents of Puerto Rico. The agency’s current and former employees had alleged in their complaint that their work for the agency had exposed them to a variety of toxic metals, principally aluminum, that had allegedly caused a range of medical conditions. The complaint further alleged that the agency, through its Director for the Hygiene and Occupational Safety Office, had pressured the co-defendant agency Corporacion del Fondo del Seguro del Estado (CFSE) into either terminating the treatment of the employees for those conditions or refusing to accept for treatment additional employees complaining of the conditions.

The employees brought suit under the RICO Act, 42 U.S.C. §1983, the Family and Medical Leave Act (FMLA), and laws of the Commonwealth of Puerto Rico. The district court had dismissed all of these claims. In relation to the RICO claims in particular, the district court had found that the employees had “failed not only in properly pleading concrete facts that would give notice to defendants of the nature of their RICO claims, whether an 18 U.S.C. § 1962(a), (b), or (c) violation, but also in pleading with any specificity the alleged mail and wire fraud schemes.”

On appeal, the employees challenged only the dismissal of the RICO claims, arguing that they had provided the court with “a detailed description of the conspiracy to promote a pattern of racketeering,” as well as testimony from an individual allegedly present at meetings where the “conspiracy was concocted.” The employees contended that they did not have “to prove without any reasonable doubt” that the conspiracy existed, but rather just allege “a plausible case.”

The court found these arguments “perfunctory, undeveloped, and unsupported.” The court noted that the employees had not provided any “specific and articulated argument as to how or where the district court went wrong.” Moreover, in the court’s view, the employees’ brief “fail[ed] to (1) address any of the grounds upon which the district court dismissed the case; and (2) advance any case law that supports [their] RICO claims.” Therefore, the court dismissed the appeal with prejudice.

In addition, the court ordered the employees’ counsel to provide a written response within fourteen days that would explain why the court should not assess the counsel attorney’s fees and double costs “for needlessly consuming the time of the court and opposing counsel.”

The case is No. 11-2334.

Nicolas Nogueras-Cartagena (Nogueras Law & Associates) for Angel L. Alejandro-Martinez. Marta L. Rivera-Ruiz (Cancio, Nadal, Rivera & Diaz, P.S.C.) for Jose F. Ortiz-Vazquez.

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