Varela v. Gonzales

Plaintiffs filed suit against their former employers, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq. Plaintiffs claimed that defendants' hiring of undocumented workers resulted in the depression of their wages. The district court dismissed plaintiffs' second amended complaint for failure to establish RICO standing, as well as denied their motion for leave to file a third amended complaint. The court concluded that, without an allegation as to the proportion of undocumented workers within defendants' workforce, it is impossible to determine whether the hiring of undocumented workers could have had any plausible effect on overall wages. Further, if plaintiffs are alleging that defendants' hiring of illegal workers depressed wages throughout the industry, this theory is implausible too. Therefore, plaintiffs failed to sufficiently allege proximate cause. Further, plaintiffs' allegations are insufficient to establish that they suffered any injury, must less an injury under RICO. The court also concluded that the district court did not err by dismissing the second amended complaint with prejudice and denying plaintiffs leave to file the third amended complaint. Accordingly, the court affirmed the judgment. View "Varela v. Gonzales" on Justia Law