ADHIKARI v. DAOUD & PARTNERS

• Decision Date: 03 November 2009
• Docket Number: Civil Action No. 09-cv-1237.
• Citation: 697 F. Supp.2d 674
• Parties: Ramchandra ADHIKARI, et al., Plaintiffs, v. DAOUD & PARTNERS, et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

697 F. Supp.2d 674

Ramchandra ADHIKARI, et al., Plaintiffs, v. DAOUD & PARTNERS, et al., Defendants.

Civil Action No. 09-cv-1237.

United States District Court, S.D. Texas, Houston Division.

November 3, 2009.

Agnieszka M. Fryszman, Matthew K. Handley, Maureen E. McOwen, Cohen Milstein et al., Washington, DC, Paul L. Hoffman, Schonbrun Desimone et al., Venice, CA, Andrew S. Golub, Dow Golub Remels & Beverly LLP, Houston, TX, for Plaintiffs.

Aundrea Kristine Frieden, Gibbs & Bruns LLP, Michael W. Mengis, Baker & Hostetler LLP, Houston, TX, Christopher Tayback, Scott Watson, Quinn Emanuel Urquhart Oliver and Hedges LLP, Loura L. Alaverdi, Peter W. James, Loura L. Alaverdi, Baker and Hostetler, Los Angeles, CA, David B. Rivkin, Jr., Lee A. Casey, Carlos Ramos-Mrosovsky, Lee A. Casey, Baker and Hostetler LLP, Washington, DC, for Defendants.

MEMORANDUM AND ORDER

KEITH P. ELLISON, District Judge.

Pending before the Court is the Motion to Dismiss Plaintiffs' First Amended Complaint ("FAC", Doc. No. 58) filed by Defendants Kellogg Brown & Root, Inc.; Kellogg Brown & Root Services, Inc.; KBR, Inc.; KBR Holdings, LLC; Kellogg Brown & Root, LLC; KBR Technical Services, Inc.; Kellogg Brown & Root International, Inc.; Service Employees International, Inc.; and Overseas Administration Services, Ltd. ("KBR" collectively) (Doc. No. 138). For the following reasons, KBR's Motion must be granted in part and denied in part.

I. BACKGROUND

For purposes of this Motion to Dismiss, the Court accepts the factual allegations in Plaintiffs' FAC as true. Frame v. City of Arlington, 575 F.3d 432, 434 (5th Cir. 2009). This case is brought by Plaintiff Buddi Prasad Gurung ("Gurung") and the surviving family members of twelve other men: Prakash Adhikari, Ramesh Khadka, Lalan Koiri, Mangal Limbu, Jeet Magar, Gyanendra Shrestha, Budham Sudi, Manoj Thakur, Sanjay Thakur, Bishnu Thapa, and Jhok Bahadur Thapa ("Deceased" collectively). All Plaintiffs are Nepali citizens and currently reside in Nepal.

Defendant Daoud & Partners ("Daoud") is a Jordanian corporation. Daoud has entered into a number of contracts with the United States for the provision of services at military bases, including Al Asad Air Base in Iraq. (FAC ¶ 22.) Defendant KBR is a business conglomerate including a parent corporation with its principal place of business in Houston, Texas, and several divisions, subsidiaries, and associated partnerships with pecuniary interests in the outcome of this case. One such KBR subsidiary serves as a contractor with the United States government to perform specific duties at United States military facilities in Iraq. (FAC ¶¶ 23-29.)

The gravamen of the FAC is that, in an effort to fulfill their contractual obligations, Defendants "willfully and purposefully formed an enterprise with the goal of procuring cheap labor and increasing profits" and thereby engaged in human trafficking. (FAC ¶ 54.) Plaintiffs allege that the Deceased, whose ages ranged from 18 to 27, were recruited from their several places of residence in August of 2004 by Moonlight Consultant Pvt, Ltd. ("Moonlight"), a recruiting company based in Nepal. (Id. ¶ 62.) Most of the men were told that they would be employed by a luxury hotel in Amman, Jordan. (Id. ¶ 63.) Some were told that that they would be working in an American camp. (Id.) Although there is no indication that they were told where the camp would be, their family members assumed they were going to the United States. (Id.) All of the men were led to believe that they would not be placed in a dangerous location, and that if they found themselves in a dangerous area, they would be sent home at the employer's expense. (Id.) They were promised a salary of approximately $500 per month. (Id. ¶ 64.) The men and their families incurred substantial debt to pay the brokerage fees in seeking out this employment (Id. ¶ 65.)

After they were recruited, Plaintiffs were then transferred to the custody of a Jordanian job brokerage company that operates in Amman called Morning Star for Recruitment and Manpower Supply ("Morning Star"). (Id. ¶ 66.) The men were held in Jordan by Daoud and agents of Daoud; all of the men were required to turn over their passports to Daoud. (Id. ¶¶ 67-68.) It was there that they first discovered that they were actually being sent to Iraq to work on Al Asad Air Base, north of Ramadi, Iraq. (Id. ¶ 70.) Several of the men phoned relatives in Nepal, expressing concern and fear about their futures. (Id. ¶¶ 70-71.) At least one of the Deceased informed his family that he and the other men were being kept in a dark room and were unable to see. (Id. ¶ 72.) In Jordan, the men were also informed that they would be paid only three quarters of what they were initially promised. (Id. ¶ 73.) Daoud transported the Deceased into Iraq on or about August 19, 2004, via an unprotected automobile caravan of seventeen vehicles. (Id. ¶ 75.) They traveled along the Amman-to-Baghdad highway, which was known to be a highly dangerous. (Id. ¶¶ 76-81.) Daoud was aware of the significant and well-known risks involved in traveling on this highway at the time Plaintiffs were thus transported. (Id.) No security was provided for the caravan. (Id. ¶ 81.)

As they were nearing Al Asad base, the two lead cars in which the Deceased were being transported were stopped by a group of men who later revealed themselves to be members of the Ansar al-Sunna Army, an insurgent group in Iraq. (Id. ¶¶ 81-83.) The men told the drivers to leave the Deceased at the checkpoint, and that the Americans would come from the base to pick them up. (Id. ¶ 81.)

Between August 20 and August 24, the Ansar al-Sunna Army posted an internet statement that it had captured the Deceased, posted pictures of the Deceased, and sent a video of ten of the Deceased to the Foreign Ministry of Nepal. (Id. ¶¶ 83-86.) Many of the family members of the Deceased saw the images broadcast on Nepali television. In the video, the Deceased described their trip to Iraq, stating that they "were kept as captives in Jordan at first" and were not allowed to return home. (Id.) They all stated that they were forced to go to Iraq, and were visibly very frightened. (Id.)

On or about August 31, 2004, international media outlets broadcasted video of the Ansar al-Sunna Army executing the Deceased. (Id. ¶ 86.) The group beheaded one of the men, and shot the other eleven men in the back of their heads. (Id.)

Like the Deceased, Plaintiff Gurung was recruited from his residence in Nepal. (Id. ¶ 91.) He was sent to Delhi, India for twenty days and then went on to Amman, Jordan for another twenty days. (Id.) Gurung was transported to Iraq in one of the cars of the caravan in which the Deceased were also traveling. (Id. ¶ 92.) Gurung's car was not captured by the insurgents, and he arrived at Al Asad base as scheduled. (Id. ¶ 93.) There, he was supervised by KBR in his duties as a warehouse loader/unloader. (Id.) Upon learning about the death of the Deceased, Gurung became frightened and expressed his desire to return to Nepal. He was told by both Daoud and KBR that he could not leave until his work in Iraq was complete. (Id.) After fifteen months, during which he experienced frequent mortar fire without protection, Gurung was permitted to return to Nepal. (Id. ¶¶ 95-96.)

Plaintiffs allege that KBR knew or should have known prior to August 2004 of the circumstances under which the men were being brought to Iraq to work for them. KBR was repeatedly told by the workers brought to Iraq from India, Sri Lanka, and Nepal that they did not want to come to Iraq and that they were not informed in advance that they were being brought there. (Id. ¶ 98.) Furthermore, Daoud was previously involved in an incident in which eighteen Indian laborers were forcibly kept in a camp in Fallujah where they worked, although they had quit their jobs months before. (Id. ¶ 102.)

In addition, KBR knew of complaints made by the workers during their time in Iraq regarding their safety and security, and the provision of food, water, and health care. (Id. ¶ 100.) Finally, Plaintiffs allege that KBR had the authority to terminate all subcontractors who mistreated employees, unlawfully compelled employees to perform work, or unlawfully compelled employees to remain somewhere against their will. (Id. ¶ 101.)

Pursuant to these allegations, Plaintiffs bring causes of action against Defendants under the Trafficking Victims Protection Reauthorization Act ("TVPRA"), 18 U.S.C. § 1595; the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c), as well as conspiracy to violate the same; the Alien Tort Statute ("ATS"), 28 U.S.C. § 1350; and various common law claims including, in particular, negligence claims against KBR. KBR now moves to dismiss these actions pursuant to Federal Rule of Civil Procedure 12(b)(1), claiming that this Court lacks subject matter jurisdiction to hear these claims, and Rule 12(b)(6), alleging that Plaintiffs have failed to state a claim upon which relief can be granted. This case was initially filed in the United States District Court for the Central District of California, but was transferred to this Court pursuant to KBR's motion.

II. STANDARD OF REVIEW

A. FED.R.CIV.P. 12(b)(1)

The court must dismiss a case when the plaintiff fails to establish subject matter jurisdiction. FED.R.CIV.P. 12(b)(1). "It is incumbent on all federal courts to dismiss an action whenever it appears that subject matter jurisdiction is lacking." Stockman v. Federal Election Comm'n, 138 F.3d 144, 151 (5th Cir.1998). A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case. Home Builders Ass'n of Mississippi, Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir.1998) (internal quotation marks and citation omitted). The burden of establishing federal jurisdiction rests on the party seeking the...