Lawyers for the Bush administration and a group of Georgia workers urged the Supreme Court Wednesday to allow a floor-covering manufacturer to be sued for racketeering for allegedly using recruiters to find and hire illegal workers.
In a case that raises the highly charged issue of illegal immigration, justices were asked to deal with only a small piece of the debate: whether corporations like Mohawk Industries Inc. can be sued under civil provisions of a federal law originally designed to fight organized crime.
The key question is whether a corporation that contracts out a service, such as recruiting, can be part of an illegal "enterprise" under the Racketeer Influenced and Corrupt Organizations Act of 1970.
In 1996, Congress expanded the anti-racketeering law's reach to include violations of immigration law, such as the hiring of illegal workers.
Several justices voiced concern over whether corporations fit a confusing definition of enterprise that Congress placed in the anti-racketeering law.
The law focuses more on associations of individuals, and justices seemed reluctant to allow the government or — anyone filing a lawsuit — to expand on what lawmakers may or may not have meant.
Justice Stephen Breyer questioned whether it is wise to "RICO-ize vast amounts of commercial activities" that have "nothing to do with organized crime," especially because winning parties in anti-racketeering lawsuits can collect triple damages, far more than usual.
Chief Justice John Roberts wondered if the lawsuit brought by Mohawk's current and former workers should have alleged a more general criminal conspiracy, not an illegal agreement under the anti-racketeering law.
And Justice Antonin Scalia said he did not want to issue a decision that would allow lower courts to delve into "the minds of corporations," trying to determine whether firms are conducting their own affairs or that of a separate, illegal enterprise.
The high court's decision could be significant because it likely would affect both criminal and civil uses of the anti-racketeering law, particularly by the Justice Department. Federal prosecutors have long used the law to seek prison terms for corrupt union officers and money damages from crooked unions and pension funds.
The Mohawk employees' lawsuit has not gone to trial and is on hold while the company appeals a trial court judge's refusal to dismiss the case. Mohawk denies knowing it had illegal workers on its payroll.
The Atlanta-based 11th Circuit U.S. Court of Appeals affirmed the lower court, finding that Mohawk and the recruiters constitute an enterprise under the law.
Carter G. Phillips, Mohawk's lawyer, told Justice David Souter that providing ID cards to workers is part of the company's normal business, not part of a racketeering enterprise. The lawsuit alleges the ID cards help illegal workers elude detection.
Bush administration lawyer Malcolm L. Stewart said such actions shouldn't be considered separately. "There's no rule that a corporation can't simultaneously be conducting its own business and that of a separate entity," he said.
Stewart also said Congress may not have had corporations in mind when it wrote the anti-racketeering law. But, he said, lawmakers couldn't have wanted to exclude illegal activities from the statute's reach just because they didn't think of it at the time.
The case is Mohawk Industries v. Williams, 05-465.