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Mohawk Industries, Inc. v. Williams -- Fighting Back Against Plaintiffs' Shakedown Civil RICO Claims

Author: Megan R Stell Date: July 06, 2006

U.S. Supreme Court

The NFIB Legal Foundation filed an amicus brief in this precedent-setting case that seeks to limit the reach of the civil Racketeer Influenced and Corrupt Organizations statute. NFIB recognizes the importance of consistent and disciplined application of RICO to deter and remedy wrongdoing prohibited by the statute. At the same time, it is concerned about those who have strong incentives to misuse the statute against legitimate businesses, in large part because of civil RICO's treble damages provisions.

The court of appeals' holding in this case that plaintiffs adequately pleaded a RICO enterprise consisting of the defendant corporation and its alleged agents threatens to expand dramatically RICO liability for corporations that, to remain competitive, must rely more than ever on nonemployees to provide certain goods and services. The threat of treble damages under RICO should not be allowed to undermine such corporate decisions to contract out a business function rather than to hire employees to perform it in-house.

Status: DECIDED. The Legal Foundation filed an amicus brief Feb. 2, 2006. An oral argument was held April 26, 2006, and the Court dismissed the case and remanded for further consideration.

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