Andrew Harris
Staff reporter, The National Law Journal
04-19-2004

What began in the summer of 1999 as a fight between a Chicago lawyer and Mayflower Transit over the cost of a household move and how to pay for it has exploded into a full-blown civil racketeering action that will be heardby a federal jury in October.

When it is, it will be the first time a national moving company has faced a civil Racketeer Influenced and Corrupt Organizations Act (RICO) trial in federal court, attorneys for both sides, and the man who drafted the original statute, all say.

Attorney Angie A. Chen has accused Mayflower of racketeering, extortion, mail fraud and wire fraud. A Chicago federal magistrate judge on March 11 denied the company's motion for summary judgment, ruling that Chen sufficiently pleaded all of the predicate elements to make a RICO charge stand up in court. Chen v. Mayflower Transit Inc., No 99-C-6261 (N.D. Ill.).

Marcos Reilly of Chicago's Hinshaw & Culbertson, who represents Mayflower, called the ruling by Magistrate Judge Geraldine Soat Brown, "a radical departure from previous RICO law. Following this court's ruling," he said, "any consumer claim against any company can be turned into a RICO claim."

RICO was created under Title IX of the Organized Crime Control Act of 1970. University of Notre Dame Law School Professor G. Robert Blakey helped write the original legislation.

"It's awesome!" Blakey said of Chen's case. "Mayflower is going to give her money because Mayflower cannot afford to be held responsible in this case."

Mayflower is a subsidiary of the Fenton, Mo.-based UniGroup Inc. Acquired in 1995, Mayflower immediately began divesting itself of trucks, vans and drivers. Today, it exists solely as a facilitator of interstate moving and storage, putting shippers in touch with its local agents and providing back-office support such as bill collection and customer service. When Chen, then 30, hired Mayflower to move her from Atlanta to Chicago, she actually hired Atlanta's Admiral Moving and Storage, one of 430 agents licensed to use Mayflower's logo and its U.S. Department of Transportation license to carry household goods interstate. Both sides agree that Admiral gave Chen a written estimate of her moving costs, "guaranteed not to exceed $1,749.89."

Some, but not all, of the documents given to Chen by Admiral specified that she must pay for the move with cash, guaranteed funds or with a preapproved credit card. Chen said that she had always intended to pay by credit card and that she had not been told before moving that the card must be preapproved.

Admiral picked up her goods in Atlanta, but they were trucked to Chicago by another Mayflower agent, Century Moving and Storage of Lombard, Ill. When Century's truck arrived at Chen's new digs, the driver, citing the width of the street and other factors, told Chen that a shuttle truck was needed and that the move would cost $800 more. The total, $2,549.89, was due immediately in cash or certified funds. Her offer to pay by credit card was rejected.

Chen, who is of counsel to Chicago's Sperling & Slater, called Mayflower customer service and recorded the discussion. Customer service agent Ann Vinyard refused Chen's offer to pay by credit card because the card was not preapproved. Vinyard also declined to clear the charge by calling the card's issuer.

Chen was then told that if she did not pay the amount due, her goods would be put in storage, incurring another charge, and would be sold at auction after 30 days if she still had not paid up.

Her lawyer, Jose A. Isasi II of Chicago's Sachnoff & Weaver, called Mayflower's practices "extortion." "Its clear that they had the ability to process the credit card," he said. "They didn't because the difference between cash in your hand and the credit card is that the customer can always challenge the propriety of the charge." A shipper that pays cash, he added, "literally has to file a federal lawsuit to get it back."

When Chen did that, she learned that at least 18 other Mayflower clients had had similar experiences. Some of those 18 are expected to testify at trial.

Reilly said that his client handles about 100,000 moves per year. Eighteen complaints, he said, over a three-year period, "is not a pattern of racketeering."

Blakey disagreed. "This case is a paradigm for what a lot of movers do," he said. "What she's done here is identify what is probably a nationwide pattern. Mayflower sits above it all, but really knows what's going on. "It's bait and switch," he added. "It's consumer fraud and extortion and its probably extremely widespread."

Joseph M. Harrison, the president of the American Moving and Storage Association, defended Mayflower. Saying that the RICO charge is the first that he's ever heard of, he conceded that there are rogue moving companies that give the industry a bad name, but that Mayflower is "a professional mover, not in the business of ripping off customers."