PHILADELPHIA – The U.S. District Court for the Eastern District of Pennsylvania dismissed a racketeering lawsuit filed against U.S. Xpress Enterprises Inc., Pratt (Corrugated Logistics) LLC and certain employees of both companies, according to a memorandum opinion entered on Feb. 5 by Judge Cynthia M. Rufe.
Plaintiffs Anthony DiGiglio and Dorson Hess are former truck drivers for U.S. Xpress Enterprises, and transported products from an outsourced job site located at Pratt’s facility in Macungie.
DiGiglio and Hess alleged that during their employment with U.S. Xpress, they were "repeatedly encouraged and effectively forced" to violate Department of Transportation regulations to increase revenues for the company.
“For example, plaintiffs allege that they were encouraged to underreport driving hours to the DOT so that they could work longer hours on the road,” the opinion said.
“Plaintiffs also witnessed U.S. Xpress cut corners by failing to weigh trucks, conduct inspections and repair faulty equipment, in an effort to make deliveries faster. This conduct continued when U.S. Xpress made false reports to the federal, state and local governments and wrongfully avoided payment of appropriate taxes and highway tolls.”
When they raised their concerns with the company, DiGiglio and Hess alleged that the defendants threatened to give them fewer driving assignments, put them on medical leave without pay and to not provide them accommodations while on the road.
In addition, the plaintiffs claimed to be “physically and emotionally harmed” by the company’s response to their complaints, and they “were eventually given fewer work assignments,” prompting both to quit their jobs with U.S. Xpress, the opinion said.
In the motion to dismiss, the defendants argued that DiGiglio and Hess failed to establish standing to bring the Racketeer Influenced and Corrupt Organizations Act claim, and failed to state a claim for relief under RICO.
In dismissing the RICO claims, Rufe wrote “a plaintiff fired for complaining about or reporting allegedly illegal acts cannot bring a RICO claim; the plaintiff must be a direct victim of an act of racketeering. ... The victims of the purported mail and wire fraud were federal, state, and local governments, not plaintiffs.”
In addition, Rufe wrote in the opinion “even if plaintiffs had standing to bring a RICO claim, the claim would fail because the facts alleged are insufficient to state a plausible claim” because they “have not clearly identified the details of the alleged fraudulent transactions, such as the specific time, place and contents of the alleged fraud, or how the transactions were false and misleading.”
According to the ruling, the specific grounds for a RICO claim include the "existence of an enterprise affecting interstate commerce; (2) that the defendant was employed by or associated with the enterprise; (3) that the defendant participated, either directly or indirectly, in the conduct or the affairs of the enterprise; and (4) that the defendant participated through a pattern of racketeering activity that included at least two racketeering acts.”