Fourth Circuit Finds Insufficient Allegations To Support Class Claims In Workplace Class Action RICO Claim

In a recent unanimous decision – Walters, et al. v. McMahen, et al., 2012 U.S. App. LEXIS 13682 (4th Cir. July 5, 2012) - the Fourth Circuit held that Spartan-like pleading allegations were insufficient to support a workplace class action where hourly employees who claimed that their employer engaged in a conspiracy to depress their wages. On July 5, 2012, Judge Keenan of the 4th Circuit affirmed the U.S. District Court for the District of Maryland’s dismissal of plaintiffs’ class claim. The 4th Circuit ruled that the entire theory on which Plaintiff’s complaint was based lacked sufficient facts to support the alleged violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). Although Congress passed RICO in 1970 to use mainly as a weapon in criminal cases, today it is most commonly used in civil actions. To establish a RICO violation, the plaintiff must prove that the defendant engaged in at least two “distinct but related” violations of federal law within a 10-year period. Id. at *10. Alleged violations of RICO are - of course - subject to the pleading structure that the Supreme Court set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 662 (2009), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). In other words, RICO plaintiffs must plead sufficient facts to advance the elements of the predicate acts “across the line from conceivable to plausible.” Id. at *9.  

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