Washington, DC (April 24, 2006) — The Supreme Court of the United States will hear oral arguments Wednesday in a case that could significantly alter the future of many civil lawsuits throughout the country by potentially extending the reach of federal racketeering laws to cover otherwise routine business disputes.

The case, Mohawk Industries v. Williams, will determine basic legal standards that allow or disallow a plaintiff to pursue civil charges under the federal Racketeer Influenced and Corrupt Organizations Act, also known as RICO, according to Karen Hirschman, a partner at Vinson & Elkins LLP who specializes in complex civil litigation.

"At issue in the Mohawk case is the reach of civil liability under RICO, which was passed by Congress in 1970 as a tool for prosecutors to fight organized crime," says Hirschman, who has handled federal civil RICO cases. "However, the civil litigation provisions in RICO have not been a widely used remedy. This case could change that. If the Supreme Court sides with the plaintiffs in this case, there is no doubt that we will see many more civil RICO cases filed on a broad range of subject matters, not just immigration."

The Mohawk case has received a considerable amount of media attention because of the facts alleged in the lawsuit. The plaintiffs are a group of current and former employees of Mohawk Industries, a major carpet manufacturer in Dalton, Georgia, who claim in their complaint that their employer conspired with employment recruiters to attract illegal immigrants as workers in an effort to drive down wages. In its answer, Mohawk denies the allegations. The case has not been to trial.

"While the subject matter alleged is highly political and sensational, the actual legal issues being considered by the Supreme Court are very narrow and technical," says Ms. Hirschman. "Yet the impact of the Court's decision in this case could be extremely significant. A ruling in favor of the plaintiffs would elevate an otherwise ordinary local commercial dispute into a more complex federal lawsuit where damages are trebled and legal costs to defend are much higher."

Ms. Hirschman says that under the RICO statute, it is unlawful to participate in the conduct of the affairs of "an enterprise" through a pattern of racketeering activity. However, the law states that the defendant and the "enterprise" cannot be one and the same. The plaintiffs argue that a legally distinct "person" - whether that is an employee who works for the corporation or an employment agency under contract with the corporation - is all that is needed under the law. Mohawk counters that more than that is required - especially where the activity under attack is a routine business function like hiring employees. Otherwise, Mohawk says, the requirement of a distinct enterprise is meaningless, because the "affairs" being conducted are those of the corporation, not a separate "enterprise."

"Employers are caught between a rock and a hard place," says Ms. Hirschman. "On the one hand, they are blamed for hiring immigrants who are not legitimately eligible to work in the country. However, if employers ask too many questions during the hiring process, or demand too much documentation, they can be charged with document abuse under federal immigration laws. Using federal RICO laws to go after private employers is not the answer to immigration concerns."

Ms. Hirschman says that diluting the enterprise requirement will allow more plaintiffs to get past the pleading stages with a RICO case and thus increase the settlement value of their lawsuit. "Broadening the reach of RICO may benefit individual attorneys in pursuing their cases, but it will not stop foreigners from seeking to improve their economic status by coming to the United States," says Ms. Hirschman.

Karen Hirschman is available to be interviewed regarding Mohawk Industries v. Williams and its impact on the federal civil court system. She can be reached at 214.693.4027 or via e-mail at khirschman@velaw.com. Or you may contact V&E; communications coordinator Ashley Battelle at 713.758.2052 or via e-mail at abattelle@velaw.com to set up an interview with Ms. Hirschman.

Vinson & Elkins was established in 1917 and is one of the world's largest international law firms.  The firm has about 700 lawyers practicing in Austin, Beijing, Dallas, Dubai, Houston, London, Moscow, New York, Shanghai, Tokyo, and Washington D.C.