United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR
PARTIAL SUMMARY JUDGMENT  AND GRANTING IN PART AND
DENYING IN PART DEFENDANTS' MOTION FOR PARTIAL SUMMARY
STEPHEN J. MURPHY, III UNITED STATES DISTRICT JUDGE.
Narciso Jose Alejandro Castellanos, on behalf of himself and
other similarly situated individuals, sued
Defendants alleging (I) a violation of 18 USC §
1962(c), (II) a violation of 18 USC § 1962(d), (III) a
violation of 29 USC § 201, (IV) a violation of 18 USC
§ 1595, (V) constructive and actual fraud, and (VI)
breach of contract. ECF 1. Plaintiff later dismissed Count
IV, ECF 62, and the Court certified a class for Counts I and
II, ECF 31. Now before the Court are Defendants' Motion
for Partial Summary Judgment on Counts I, II, and V, ECF 57,
and Plaintiff's Motion for Partial Summary Judgment on
Counts I, II, and VI, ECF 58. For the reasons set forth
below, the Court will deny Plaintiff's motion and grant
in part and deny in part Defendants' motion.
Worldwide Distribution Systems USA, LLC ("SUSA") is
an IT staffing firm, and its employees include Defendants
Rajat Mohan and Jessica Rodriguez. ECF 57, PgID 554.
Plaintiff, a Mexican citizen and trained computer analyst,
emailed Rodriguez seeking employment with SUSA. ECF 57-4,
PgID 614. SUSA ultimately extended an offer, and the parties
executed an employment offer letter promising Plaintiff a
$52, 000 annual salary. ECF 59-1, PgID 697. SUSA then sent
letters to the U.S. Embassy in Mexico requesting a TN Visa
for Plaintiff. Id. at 684-85. Plaintiff alleges
that, while in Mexico, he incurred expenses to secure the
visa and to relocate to the United States to begin his
employment. ECF 1, PgID 10-11. Once he arrived, however,
Plaintiff did not start earning his salary. ECF 59-4, PgID
863. Rather, he was told that he would not be paid until his
services were contracted to a third party-but he was still
expected to report to SUSA daily. Id. at 863-64. The
parties dispute whether Plaintiff was first informed of this
arrangement while the parties negotiated Plaintiff's
employment or after Plaintiff arrived in the United States.
Regardless, Plaintiff remained in the United States for
approximately five months waiting to be placed. Id.
at 865. He ultimately decided to return home, and then
Court must grant summary judgment "if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). The moving party must identify specific
portions of the record "which it believes demonstrate
the absence of a genuine issue of material fact."
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Once the moving party has met its burden, the non-moving
party may not simply rest on the pleadings, but must present
"specific facts showing that there is a genuine issue
for trial." Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986) (quoting
Fed.R.Civ.P. 56(e)) (emphasis omitted).
is material if proof of that fact would establish or refute
an essential element of the cause of action or defense.
Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.
1984). A dispute over material facts is genuine "if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In
considering a motion for summary judgment, the Court must
view the facts and draw all reasonable inferences" in
the light most favorable to the nonmoving party." 60
Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th
Private RICO Cause of Action
RICO statute creates a private cause of action for a
"person injured in his business or property by reason of
a violation of section 1962[.]" 18 USC § 1964(c).
Section 1962 prohibits four types of activities: (a)
investing income derived from a pattern of racketeering
activity in an enterprise, (b) acquiring or maintaining an
interest in an enterprise through a pattern of racketeering
activity, (c) conducting an enterprise's affairs through
a pattern of racketeering activity, and (d) conspiring to
violate any of the first three prohibitions. 18 USC §
1962. In Counts I and II (the "RICO Claims"),
Plaintiff has alleged violations of (c) and (d).
the Court can assess the merits of Plaintiff's claims,
however, it must confirm that there is a cause of action. In
the RICO Claims, Plaintiff alleges he suffered the following
injuries: (1) funds spent to arrange for travel to the United
States, (2) loss of job in Mexico to take to the position
with SUSA, (3) funds spent to continue to reside in the U.S.,
(4) loss of the promised $52, 000 salary, (5) separation from
his family, and (6) distress, fear, and other intangible
harms. ECF 1, PgID 10-12. The Court will address each injury
in turn, but only the third injury is actionable.
Harms Suffered Abroad
cannot bring a cause of action under § 1964(c) for harms
suffered outside the United States. As a general principle,
statutes do not apply extraterritorially absent clearly
expressed congressional intent. Morrison v. Nat'l
Australia Bank Ltd., 561 U.S. 247, 255 (2010). Courts
apply a two-step framework when analyzing extraterritoriality
issues: first courts ask whether the presumption against
extraterritoriality has been rebutted, and if it has not been
rebutted then courts determine whether the case at hand
presents a domestic issue. RJR Nabisco, Inc. v. European
Cmty., 136 S.Ct. 2090, 2101 (2016). The Supreme Court
recently applied this framework to § 1964(d) and
determined that the statute does not overcome the presumption
against extraterritoriality. Id. at 2106. To prevail
here, Plaintiff "therefore must allege and prove a
domestic injury to its business or property."
Id. (emphasis in original). Because Plaintiff
suffered injuries one and two before he arrived to the United
States, the harms are not domestic injuries. Consequently,
they are not actionable under § 1964(c).
contends that the injuries suffered in Mexico are actionable
because Defendants conducted the alleged racketeering in the
United States. ECF 67, PgID 1108. In support of his position,
Plaintiff argues that RJR Nabisco held that RICO
applies to some foreign racketeering activity. ECF 67, PgID
1111. But Plaintiff's argument is misplaced.
properly apply the holding in RJR Nabisco, one first
must understand how the RICO statute is structured: §
1962 provides a list of prohibitions that are all premised on
"racketeering activity." The statute defines
"racketeering activity" as acts in violation of a
laundry list of separate criminal statutes, which are known
as predicates. 18 U.S.C. § 1961(1). The statute provides
two enforcement measures to deter violations of § 1962:
criminal penalties under § 1963 and civil remedies under
§ 1964. Accordingly, for a private plaintiff to prevail,
he needs to show that (1) he can bring a cause of action
under § 1964(c), and (2) there was a violation of §
of the RICO Act's structure, RJR Nabisco
addressed two distinct questions: (1) whether the substantive
prohibitions listed in § 1962 apply extraterritorially,
and (2) whether the private cause of action provided by
§ 1964(c) applies to injuries that are suffered in
foreign countries. RJR Nabisco, 136 S.Ct. at
2099-100. In answering the first question, the Supreme Court
noted that some predicates apply to foreign conduct.
Id. at 2101. The Supreme Court therefore held that
some violations of § 1962 apply extraterritorially-not
directly through § 1962-but to the extent that the
statute that provides the predicate act applies
extraterritorially. Id. at 2102-03 ("A
violation of § 1962 may be ...