Antitrust Law Daily Wrap Up, RICO—D.N.J.: UNITE HERE, AFL-CIO dodge “drug trafficking, piracy and terror” claims, (Jul 18, 2014)

By Greg Hammond, J.D.

Claims that the UNITE HERE and AFL-CIO labor organizations conspired to violate the RICO Act by acting as a front for an “international organized crime ring engaged in the toxic brew of crime, drug trafficking, piracy and terror,” were tossed by the federal district court in Camden. In granting the labor organizations’ motions to dismiss, the court determined that a former Vancouver, Washington Hilton Hotel employee failed to plead sufficient facts in support of over thirty alleged predicate racketeering acts (McCray v. UNITE HERE, July 15, 2014, Kugler, R.).

Background. UNITE HERE is a labor organization that represents food service, gaming, hotel, and other industry workers in the U.S. and Canada. Emanuel McCray was terminated from his position at the Vancouver, Washington Hilton Hotel, for failing to pay his union dues to UNITE HERE. McCray subsequently brought suit against various defendants, including AFL-CIO and UNITE HERE, alleging—in part—a racketeering conspiracy under the RICO Act. The defendants moved to dismiss.

RICO conspiracy. To state a proper civil RICO claim, McCray was required to allege: (1) a violation of the RICO statute; (2) an injury to business or property; and (3) the injury was caused by the violation. McCray was additionally responsible for alleging a pattern of racketeering activity, which requires a showing that the defendants committed two or more predicate acts outlined in 18 USC sec. 1961(1).

In support of his racketeering claims, McCray alleged over thirty predicate acts against the labor organizations and other defendants, including: threatening to commit murder, extortion, mail or wire fraud, tax fraud, bribery, dealing in controlled substances, restrictions on payments and loans to labor organizations, embezzlement, identity fraud, obstruction of justice, witness tampering, compulsory labor, racketeering travel, money laundering, damaging government property, and terrorism. However, the court determined that McCray failed to plead a sufficient factual basis to support his claims that the defendants agreed to commit any of the predicate acts.

Specifically, the court found that: (1) there was no indication of when, where, and against whom threats of murder were made, or who made the threats; (2) there are no details regarding the nature of his extortion claim; (3) McCray’s mail or wire fraud claim lacked information regarding the date, place, or time of the fraud; and (4) the tax fraud claim lacked specificity and any allegation of harm to McCray. The court also determined that the complaint, with regard to the remaining predicate acts, is “so woefully lacking of any facts that would support RICO liability for these predicate acts that a discussion of the elements of the respective offenses is not warranted.” McCray’s complaint was consequently dismissed.

The case number is 13-6540 (RBK/JS).

Attorneys: Emanuel McCray, pro se. Cassie Ehrenberg (Cleary, Josem & Trigiani LLP) for UNITE HERE.

Companies: UNITE HERE; American Federation of Labor and Congress of Industrial Organizations

Cases: RICO NewJerseyNews