Miller v. Yokohama Tire Corp., 358 F.3d 616 (9th Cir. 2004)

Christopher Miller, who worked for Yokohama Tire Corporation for 11 years before his termination, alleged that he was denied overtime pay as a result of a “fraudulent scheme” on the part of his employer. Miller further alleged that Yokohama mailed him and other improperly paid employees their paychecks or pay stubs twice monthly and their W-2 Forms annually; employees who received direct deposit of their wages received their compensation via “wire transfers.” Based on these “predicate acts of mail and wire fraud,” Miller alleged that Yokohama and its managers violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO). Miller filed his 22-count complaint in state court, and Yokohama removed the action to federal court based upon the two RICO claims. The district court granted Yokohama’s motion to dismiss the RICO claims and remanded the remaining claims to the Los Angeles Superior Court; Miller appealed to the Ninth Circuit. In affirming dismissal of the RICO claims against Yokohama, the Court of Appeals held that an employer cannot be held vicariously liable for its employees’ alleged violations of the statute. Further, the Court held that the managers could not be liable under RICO because there were no facts alleged that indicated any actionable fraud on their part. Cf. Diaz v. Parks, 354 F.3d 1169 (9th Cir. 2004) (loss of employment as a result of illegal arrest and incarceration does not constitute an injury to “business or property” under RICO).