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MCDONOUGH v. GENCORP

November 1, 1990

MICHAEL J. McDONOUGH and HERSCHEL TATE, Plaintiffs,
v.
GENCORP, INC., a corporation, d/b/a THE GENERAL TIRE & RUBBER COMPANY, J.R. PRESTON, GREG BROWN, and BILL HENDERSON, Defendants



The opinion of the court was delivered by: FOREMAN

JAMES L. FOREMAN, UNITED STATES DISTRICT JUDGE

 Before the Court is the defendants' Motion to Dismiss Plaintiffs' Amended Complaint (Document No. 19). The defendants argue for dismissal on the grounds that (1) the plaintiffs' claims are pre-empted by the National Labor Relations Act; (2) the plaintiffs have failed to satisfy the pleading requirements under the Racketeer Influenced and Corrupt Organizations Act (RICO); (3) none of the predicate acts necessary to establish a pattern of racketeering under RICO have been pled with the specificity required by Federal Rule of Civil Procedure 9(b); and (4) the RICO statute is unconstitutionally vague, both on its face and as applied to the defendant.

 I. Facts

 The plaintiffs, Michael J. McDonough and Herschel Tate, filed this RICO complaint on January 31, 1990. The complaint states that the plaintiffs attempted to organize the hourly employees of defendant Gencorp, Inc., during the period from August 1986 through the end of 1987. In response to the plaintiffs' activities, the defendant, by and through certain management personnel and hourly employees, allegedly formed an enterprise known as the "White Hat Committee" to establish a pattern of anti-union activity in the defendant's plant. The complaint states that this committee attempted to deceive or defraud the plaintiffs and hourly employees and deprive the plaintiffs of the right to democratic participation in the decision to unionize Gencorp.

 Specifically, the complaint states that (1) the committee used the United States mails and placed telephone calls in which committee members misrepresented facts concerning the Union, its organizers and the company's ability to maintain a newly implemented bonus program; (2) committee members placed telephone calls to plaintiff McDonough, threatening him with bodily harm if he continued his unionizing efforts; and (3) committee members attempted to coerce plaintiffs McDonough and Tate to give up their union activities by threatening to commit a crime of violence upon them; and (4) committee members threatened another employee, Gerald May, with bodily harm if he did not give up his union activities.

 The defendants filed a motion to dismiss the complaint on March 29, 1990, raising some of the same issues presented in the pending motion. The plaintiffs failed to respond to the March 29 motion, and the Court issued an order to show cause why the motion should not be granted. In response to the Court's order, the plaintiffs filed a motion for leave to file an amended complaint, which was granted. The defendants then filed the pending Motion to Dismiss.

 II. Analysis

 For purposes of defendant's Motion, all well-pleaded allegations of the complaint must be taken as true. Wolfolk v. Rivera, 729 F.2d 1114, 1116 (7th Cir. 1984). The test to be applied on a motion to dismiss is whether "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). A plaintiff need not set out in detail the facts upon which a claim is based, but must allege sufficient facts to outline the cause of action. Ellsworth v. City of Racine, 774 F.2d 182, 184 (7th Cir. 1985).

 A. Pre-Emption by the National Labor Relations Act

 The defendants argue that the plaintiff's RICO claim is pre-empted by the National Labor Relations Act (NLRA) because the predicate acts listed in the complaint fall within the exclusive jurisdiction of the National Labor Relations Board (NLRB).

 The courts have long recognized that Congress gave the NLRB exclusive jurisdiction over unfair labor practices. Thus, the Supreme Court has stated that the NLRA "pre-empts state and federal court jurisdiction to remedy conduct that is arguably protected or prohibited by the Act." Amalgamated Ass'n of Street, Elec. Ry. & Motor Coach Employees v. Lockridge, 403 U.S. 274, 276, 29 L. Ed. 2d 473, 91 S. Ct. 1909 (1971) (explaining the labor law pre-emption doctrine established in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 3 L. Ed. 2d 775, 79 S. Ct. 773 (1959). See also Veal v. Kerr-McGee Coal Corp., 682 F. Supp. 957, 959 (S.D. Ill. 1988), aff'd, 885 F.2d 873 (7th Cir. 1989) ("when an activity is either expressly or arguably protected by § 7 or prohibited by § 8 [of the NLRA], a claim arising out of that activity is preempted by the Act.")

 However, Congress can create statutory exceptions to the NLRB's exclusive jurisdiction. Butchers' Union, Local No. 498 v. SDC Inv., Inc., 631 F. Supp. 1001, 1006-07 (E.D. Cal. 1986). Therefore, the question becomes whether Congress has created an exception for RICO claims that are based upon unfair labor practices. Although some confusion exists in this area of the law, the Court is persuaded by several well-reasoned district court opinions which have held that RICO claims such as those presented in the case at bar are not exempt from the NLRA's pre-emption power. See, e.g., Butchers' Union, 631 F. Supp. at 1009-11; Brown v. Keystone Consol. Indus., Inc., 680 F. Supp. 1212, 1224-26 (N.D. Ill. 1988).

 As pointed out in Butchers' Union, some violations of federal labor law are expressly listed as predicate acts under the RICO statutes and, as such, RICO claims based on those labor laws are exempt from NLRA pre-emption. Id. at 1007. Specifically, the court found that violations of section 186 of the Act may be used to support a RICO claim because section 186 is expressly listed among the acts which constitute "racketeering activity" under section 1961 of RICO. Id.

 However, the court reached a different result with respect to RICO claims alleging mail or wire fraud based upon unfair labor practices. The court acknowledged that violations of the mail and wire fraud statutes are predicate acts under RICO. But the mail and wire fraud statutes merely prohibit the use of the mails or wire to perpetrate a fraud; to determine whether a fraud has occurred, the courts must look to other laws. Id. at 1010-11. In Butchers' Union, as in the case at bar, the fraud was based upon unfair labor practices. Thus, " but for the proscriptions of labor law, defendants' conduct simply would not be either mail or wire fraud." Id. at 1011. In other words, "the only reason the defendants had committed predicate acts [under the mail ...


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