469 F.3d 219 (2nd Cir. 2006), 04-3606, Madeira v. Affordable Housing Foundation, Inc.

Docket Nº:04-3606-cv(L), 04-3700-cv(XAP).
Citation:469 F.3d 219
Party Name:Jose Raimundo MADEIRA, Plaintiff-Appellee, v. AFFORDABLE HOUSING FOUNDATION, INC., and Mountain Developers Associates, LLC, Defendants-Third-Party-Plaintiffs-Appellees-Cross-Appellants, Preferred National Insurance Co., Third-Party-Defendant-Appellee, v. Cleidson C. Silva, Doing Business As C & L Construction, Third-Party-Defendant-Appellant-Cross-
Case Date:November 14, 2006
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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469 F.3d 219 (2nd Cir. 2006)

Jose Raimundo MADEIRA, Plaintiff-Appellee,


AFFORDABLE HOUSING FOUNDATION, INC., and Mountain Developers Associates, LLC, Defendants-Third-Party-Plaintiffs-Appellees-Cross-Appellants,

Preferred National Insurance Co., Third-Party-Defendant-Appellee,


Cleidson C. Silva, Doing Business As C & L Construction, Third-Party-Defendant-Appellant-Cross-Appellant.

Nos. 04-3606-cv(L), 04-3700-cv(XAP).

United States Court of Appeals, Second Circuit

November 14, 2006

Argued: May 10, 2005

Appeal from a judgment of the United States District Court for the Southern District of New York (Colleen McMahon, Judge), entered after a jury trial, which (1) awarded Jose Raimundo Madeira, an undocumented alien, lost earnings calculated partially by reference to United States pay rates as compensation for disabling personal injuries attributable to defendants' violation of New York Labor Law § 240(1), and (2) apportioned that award among defendants and Madeira's direct employer based on relative negligence.

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Garth S. Wolfson, Cornelius A. Mahoney, Mahoney & Keane, LLP, and Ginarte, O'Dwyer & Winograd, New York, NY, for Plaintiff-Appellee Jose Raimundo Madeira.

Donald J. Feerick, Jr., New City, NY, for Defendant-Third-Party-Plaintiff-Appellee-Cross-Appellant Mountain Developers Associates, LLC.

Dennis Lynch, Dorfman, Lynch & Knoebel, Nyack, NY, for Defendant-Third-Party-Plaintiff-Appellee-Cross-Appellant Affordable Housing Foundation, Inc.

Joseph M. Glatstein, Williamson & Williamson, P.C., New York, NY, for Third-Party Defendant-Appellee Preferred National Insurance Co.

David Samel, Jeffrey Samel & Partners, New York, NY, for Third-Party-Defendant-Appellant-Cross-Appellant Cleidson C. Silva, d/b/a C & L Construction.

Before FEINBERG, WALKER, and RAGGI, Circuit Judges.

RAGGI, Circuit Judge.

Cleidson C. Silva, doing business as C & L Construction ("C & L"), Affordable Housing Foundation, Inc. ("Affordable"), and Mountain Developers Associates, LLC ("Mountain"), appeal from a final judgment entered on May 7, 2004, after a jury trial, at which plaintiff Jose Raimundo Madeira, an undocumented alien worker, was awarded compensatory damages for lost earnings, as well as out-of-pocket expenses and pain and suffering, as the result of physical injuries attributable to defendants' violation of New York Labor Law § 24 0(1). Defendants Affordable and Mountain had unsuccessfully moved in the district court for judgment notwithstanding

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the verdict on the award of lost earnings. See Madeira v. Affordable Hous. Found., Inc., 315 F.Supp.2d 504, 506-10 (S.D.N.Y. 2004). They argued below that federal immigration law, as articulated in the Immigration Reform and Control Act of 1986 ("IRCA"), Pub. L. No. 99-603, 100 Stat. 3359, codified as amended in scattered sections of 8 U.S.C., and as interpreted by the Supreme Court in Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 122 S.Ct. 1275, 152 L.Ed.2d 271 (2002), necessarily precluded any damages award under New York law that compensated an undocumented worker for lost earnings, at least to the extent such earnings were based on pay rates in the United States rather than in the worker's native country. In pursuing this same argument on appeal, Affordable and Mountain are now joined by third-party defendant Silva.

In addition, Affordable and Mountain appeal district court rulings allowing the jury to apportion liability among C & L, Affordable, and Mountain; precluding evidence regarding C & L's lack of insurance; and dismissing their third-party action against Preferred National Insurance Company ("Preferred"). Silva further appeals the district court's rejection of his Rule 50(b) challenge to the jury verdict obligating him to indemnify Affordable and Mountain, arguing that the document relied on by these third-party plaintiffs to support their indemnification claim is not an enforceable contract.

For the reasons discussed herein, we conclude that federal immigration law does not clearly preempt New York State law allowing undocumented workers to recover lost United States earnings where, as in this case, (1) the wrong being compensated, personal injury, is not authorized by IRCA under any circumstance; (2) it was the employer rather than the worker who knowingly violated IRCA in arranging for the employment; and (3) the jury was instructed to consider the worker's removeability in deciding what, if any, lost earnings to compensate. Because we conclude that appellants' and cross-appellants' other arguments are also without merit, we affirm the district court judgment in all respects.

I. Factual Background

In recounting the facts relevant to this appeal, we necessarily review the record in the light most favorable to the parties in whose favor the jury returned each part of its verdict. See Gronowski v. Spencer, 424 F.3d 285, 291-92 (2d Cir. 2005).

A. Madeira's Employment and Injury

Plaintiff Jose Raimundo Madeira1 is a citizen of Brazil who illegally entered the United States in 1998. In Brazil, Madeira had worked in a factory earning approximately $175 per month; he had also labored briefly on his parents' farm without formal remuneration. In the United States, Madeira fared better, working consistently as a construction laborer, largely through the efforts of his brother, Paulo Miranda. As a supervisor for C & L, Miranda had authority to hire workers to perform that party's subcontracts. In the years prior to the accident here at issue, Madeira was earning approximately $15 per hour in the United States and working as many as 50 hours per week.

Nothing in the trial record indicates that Madeira himself used any false identification to obtain work in the United States;

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such action was apparently unnecessary given his brother's willingness to hire him despite knowing Madeira's undocumented status. Moreover, because Miranda acted as C & L's agent in hiring workers, his knowledge of Madeira's undocumented status can be imputed to his principal, C & L. Although Madeira was generally paid in cash for his work, he testified that he paid income taxes on his earnings by using a taxpayer identification number. No evidence was adduced to the contrary. Madeira further stated that, sometime in 2000, he attempted to legitimize his work status by applying for a Social Security card and work permit but, at the time of trial in 2004, those applications had not yet been acted on.

On June 20, 2001, while working as a roofer for C & L, Madeira fell from the top of a building at a development site in Monroe, New York, sustaining serious injuries that required four surgeries and more than three months' hospitalization. At the time of trial, Madeira was still substantially disabled, particularly in walking.

B. The Southern District Lawsuit

Following his accident, Madeira invoked federal diversity jurisdiction to file suit in the Southern District of New York against Affordable, the owner of the construction site, and Mountain, the development's general contractor, for their alleged failure to provide adequate safety equipment at the work site in violation of New York's "Scaffold Law," N.Y. Labor Law § 240(1).2 In turn, Affordable and Mountain filed a third-party action for indemnification against Madeira's employer, C & L, as well as against C & L's insurer, Preferred. The suit proceeded to a bifurcated trial, with the jury first deciding Madeira's § 240(1) claim and then considering Affordable and Mountain's demand for indemnification.

1. The Jury's Determination of § 240(1) Liability and Damages

In the first phase of trial, the jury heard testimony from Madeira; his brother Miranda who, in addition to hiring Madeira for the job, had witnessed the accident; and Jacob Sofer, the president of both Affordable and Mountain. A "vocational rehabilitation counselor" also testified on plaintiff's behalf, offering his opinion as to Madeira's dim prospects for future employment in either the United States or Brazil in light of his disability. The counselor expressed no opinion as to how Madeira's

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immigration status might have affected his employability in this country if he had not been injured. Nor did the defense offer any evidence indicating if or when Madeira might be required to leave the United States. The parties did, however, present conflicting medical opinion testimony about the extent of Madeira's injuries.

Following the close of the evidence, the district court instructed the jury that it was not to consider Madeira's immigration status in assessing Affordable's and Mountain's liability under Labor Law § 240(1). Nevertheless, the jury was allow ed to consider plaintiff's undocumented work status in awarding any compensatory damages for lost earnings. Specifically, the court charged:

Plaintiff's status as an undocumented alien should not be considered by you when you deliberate on the issue of defendant[s'] liability under Labor Law Section 240(1). However, you may conclude that plaintiff's status is relevant to the issue of damages, specifically to the issue of lost wages which the plaintiff is claiming. You might consider, for example, whether the plaintiff would have been able to obtain other employment since as a matter of law, it is illegal for an employer in the United States to employ an undocumented alien, although of course it does happen that certain employers violate that law. If the plaintiff did not lose any income because you conclude that he would not have been able to work, and I mean not been able to work due to his alien status, you could not award him any damages for lost...

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