The opinion of the court was delivered by: STANLEY S. BROTMAN
Before the court is defendants' motion to dismiss plaintiff's four-count complaint under Fed. R. Civ. P. 12. The motion is premised on two alternative theories: that this court lacks subject matter jurisdiction over the action, Fed. R. Civ. P. 12(b)(1), and that plaintiff fails to state a claim upon which relief can be granted, Fed. R. Civ. P. 12(b)(6). As detailed below, the motion is granted in part and denied in part.
I. Facts and Procedural Background
Plaintiff John O'Rourke, a member of Local 30, United Slate, Tile, & Composition Roofers, Damp & Waterproof Workers Association ("Local 30"), brings this action against Local 30 and two of its officers: Joseph M. Crosley, Local 30's business manager, and Thomas Lowry, a Local 30 business agent. The action arises over punitive measures allegedly imposed by Local 30 and its officers against plaintiff. According to plaintiff, because he accepted employment at a construction site where one employer was being picketed--and thus effectively refused to adhere to a sympathy strike imposed by Local 30--he was subjected to threats and intimidation which caused him to resign from his employment. Thereafter, plaintiff allegedly was denied referrals to which he was entitled under Local 30's own rules, which together with the threats and intimidation caused him to resign from the union.
Plaintiff notes in his complaint that Local 30 has a history of violence and intimidation; union officials have been found guilty of numerous racketeering offenses and the union itself was placed under a Decreeship in 1988. See National Labor Relations Board v. Local 30, United Slate, Tile and Composition Roofers, Damp and Waterproof Workers Association, AFL-CIO v. Schoenberger et al., 1992 U.S. App. LEXIS 30511, 141 BNA LRRM 2459 (3d Cir. 1992); U.S. v. Local 30, United Slate, Tile and Composition Roofers, Damp and Waterproof Workers Association, et al., 686 F. Supp. 1139 (E.D. Pa. 1988), aff'd, 871 F.2d 401 (3d Cir. 1989).
Based on the aforementioned allegations, plaintiff filed the instant action, alleging: (1) racketeering activity in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962(c), (d), and extortion in violation of the Hobbs Act, 18 U.S.C. § 1951 (Count One); (2) breach of fiduciary duty under the Labor Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 501 (Count Two);
(3) common law breach of duty (Count Three); and (4) violation of plaintiff's rights as codified in the Bill of Rights of Members of Labor Organizations, 29 U.S.C. § 411 (Count Four).
Plaintiff contends in Count One of his complaint that defendants Crosley and Lowry conducted "the affairs of Local 30 through a pattern of racketeering activities." Defendants argue that Count One of plaintiff's complaint, arising under RICO and the Hobbs Act, is preempted by the National Labor Relations Act ("NLRA") and, alternatively, should be dismissed for failure to state a claim.
Defendants contend that the wrongful acts alleged by plaintiff are at most unfair labor practices and as such are preempted by the NLRA. According to defendants, the acts plaintiff relies upon as predicates to his RICO and Hobbs Act claims--namely, the union's refusing to provide plaintiff with job referrals, subjecting him to verbal abuse, and ultimately coercing him to leave the union--constitute alleged violations of certain rights guaranteed under Section 7 of the NLRA. A union's violation of such rights is prohibited under Section 8 of the NLRA as an unfair labor practice, 29 U.S.C. §§ 158(a)(1), (b)(1)(A), and is generally subject to the exclusive jurisdiction of the National Labor Relations Board. 29 U.S.C. § 160; Sears Roebuck & Co. v. San Diego County District Council of Carpenters, 436 U.S. 180, 56 L. Ed. 2d 209, 98 S. Ct. 1745 (1978); San Diego Building Trades Council v. Garmon, 359 U.S. 236, 3 L. Ed. 2d 775, 79 S. Ct. 773 (1959).
The defendants concede that there are three types of RICO actions in which NLRB jurisdiction is not exclusive: actions alleging RICO loan violations under 29 U.S.C. § 186, state initiated RICO actions, and RICO actions in which the rule of law sought to be invoked is structured such that enforcement by the courts will not disservice the interest promoted by the labor statutes (i.e. actions in which the nature of the predicate act does not require the expertise of the NLRB and thus can be competently adjudicated by the courts).
According to the defendants, none of these three exceptions apply in the instant case.
Plaintiff, on the other hand, contends that the third exception above is applicable. He argues that his RICO claim is predicated upon the alleged extortion of rights guaranteed to him under the LMRDA and thus exists independently of NLRA Section 7 violations. To rule on the alleged illegality of the predicate acts, plaintiff argues, the court need only consider the LMRDA and need not interpret the NLRA or make any finding as to the commission of an unfair labor practice.
A recent district court opinion in this circuit supports plaintiff's position. In Sullivan v. Crosley, No. 91-3335, 1992 U.S. Dist. LEXIS 16168 (E.D. Pa. Oct. 20, 1992), the court addressed a virtually identical preemption dispute in a case that happened to involve most of the defendants in the matter currently before this court. In Sullivan, like in this case, the union defendants argued that plaintiff's RICO claim was "predicated upon conduct that is wrongful only by virtue of the labor laws and is thus preempted by the exclusive jurisdiction of the NLRA." Id. at *20. Plaintiff in Sullivan proffered the identical counterargument to that of O'Rourke in the instant case: "that his RICO claim is predicated upon the extortion of protectable property rights, that is, his LMRDA rights in violation of the Hobbs Act . . . and therefore cannot be preempted." Id. The Sullivan court offered the following analysis:
The Third Circuit has determined that the rights guaranteed under the LMRDA are protectable property interests . . . that are extortable in violation of the Hobbs Act. United States v. Local 560, 780 F.2d 267, 280-82 (3d Cir. 1985), cert. denied, 476 U.S. 1140 (1986) . . . . The courts have further held that the extortion of one's LMRDA rights satisfies the predicate act requirement of a RICO claim . . . . Local 560, 780 F.2d at 280-82 . . . .
The defendants have failed to appreciate that the conduct alleged by Sullivan . . . could constitute both unfair labor practices prohibited by section 8 of the NLRA, . . . and a violation of Sullivan's LMRDA rights. Where the conduct alleged by Sullivan . . . falls within the framework of both statutes, Sullivan's claims are not preempted.
The Sullivan court's conclusion echoed the Supreme Court's earlier handling of the same issue in International Brotherhood of Boilermakers, etc. v. Hardeman, 401 U.S. 233, 28 L. Ed. 2d 10, 91 S. Ct. 609 (1971). There the court observed: "The critical question in this action is whether Hardeman was afforded the rights guaranteed him by § 101(a)(5) of the LMRDA. . . . Since [this] question [is] irrelevant to the legality of the conduct under the National Labor Relations Act, there is no danger of conflicting interpretations of its provisions." Id. at 241. As the Sullivan court noted, "courts have construed the Hardeman holding as standing for the proposition that 'NLRB jurisdiction over an unfair labor practice does not divest the federal courts of jurisdiction to hear an LMRDA claim arising out of the same pattern of misconduct.'" Sullivan, 1992 U.S. Dist. LEXIS 16168, at *22 (quoting Quinn v. Di Giulian, 238 U.S. App. D.C. 247, 739 F.2d 637, 643 (D.C. Cir. 1984)). On this basis, the Sullivan court rejected the contention that the plaintiff's RICO claim was preempted by the NLRA.
2. Failure to State a Claim under RICO
Defendants next argue that plaintiff's RICO claim should be dismissed under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. The RICO statute makes it
unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
18 U.S.C. § 1962(c). Additionally, under § 1962(d), it is unlawful for any person to conspire to violate § 1962(c).
Defendants specifically contend that plaintiff's RICO claim fails to adequately plead (1) the existence of "racketeering activity," and, assuming that such activity is shown, (2) the existence of a "pattern."
These contentions will be addressed in turn.
a. "racketeering activity"
The RICO statute defines a variety of acts as "racketeering activity." Included in that definition are acts of extortion in violation of the Hobbs Act, 18 U.S.C. § 1951, which is what plaintiff alleges occurred in this case. Hobbs Act extortion is defined as
the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, ...