RICO-UNIONS

Care One Mgmt. LLC v. United Healthcare Workers East, 2022 U.S. App. LEXIS 20825 (3^rd Cir. July 28, 2022) (McKee, C.J.) The court vacates in part and affirms in part and remands to the district court for further proceedings.  This case concerned claims of civil RICO liability predicated on federal mail and wire fraud, as well as state law extortion through acts of sabotage and fear of economic loss.  The Third Circuit concluded that the District Court erred in deciding that the record could not support a finding that the unions authorized or ratified conduct that could constitute extortion or that they wrongfully exploited threats of economic harm.  This case is based upon the fact that the union launched a campaign attacking Care One’s labor and business practices.  The campaign materials included websites, printed audio ads, as well as fliers questioning Care One’s billing practices and standard of care.  The progressiveness of the union was rather dramatic.  At NYU Law School, the unions handed out materials questioning Care One’s owner and the CEO’s purported hypocrisy for endowing the Institute for Law and Justice at NYU while violating labor laws.  The unions also targeted unrelated business ventures of the CEO dealing with a condominium.  The District Court granted summary judgment for the unions.  The court said there was insufficient specific intent.  The District Court should have looked beyond the fact-checking procedures to determine whether the union statements contained half-truths or concealed material facts.  In looking at each argument, the court found that there was proof that the unions either authorized or ratified the sabotage that is part of this record.  Liability can be established if the unions ratified the sabotage, even if there is insufficient evidence that they authorized it.  The District Court erred in determining that the totality of the evidence is insufficient to support claims that the unions ratified the alleged acts of the sabotage.  There is a clear nexus between pressure tactics that drew attention to the owner of Care One’s business and labor practices and the union’s objective of receiving higher wages and better benefits from Care One.  The unions could logically assume that pressuring the CEO in this matter would increase the likelihood that he would cause Care One to capitulate to the union’s demands.  Accordingly, as is true with the advertising campaign, we cannot find that tactic wrongful as a matter of law under the generic definition of extortion.  Therefore, summary judgment in favor of the unions was appropriate on these claims.