Casares v. Agri-Placements Int'l, Inc., Civil No. B–11–107.

• Decision Date: 31 March 2014
• Docket Number: Civil No. B–11–107.
• Citation: 12 F.Supp.3d 956
• Parties: Silverio CASARES, et al., Plaintiffs, v. AGRI–PLACEMENTS INTERNATIONAL, INC. and Elaine Flaming, Defendants.
• Court: U.S. District Court — Southern District of Texas

12 F.Supp.3d 956

Silverio CASARES, et al., Plaintiffs

v.AGRI–PLACEMENTS INTERNATIONAL, INC. and Elaine Flaming, Defendants.

Civil No. B–11–107.

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

Signed March 31, 2014.

Javier Riojas, Texas Riogrande Legal Aid, Eagle Pass, TX, Polly J. Bone, Texas Riogrande Legal Aid Inc., San Antonio, TX, Jerome W. Wesevich, Texas Riogrande Legal Aid, Inc., El Paso, TX, for Plaintiffs.

Jesus (Jesse) Quezada, Jr., Quezada Law Firm, Brownsville, TX, Monte B. Lake, Wendel V. Hall, CJ Lake, Washington, DC, for Defendants.

MEMORANDUM OPINION & ORDER

HILDA TAGLE, Senior District Judge.

BE IT REMEMBERED, that on March 31, 2014, the Court considered Defendants Agri–Placements International, Inc. and Elaine Flaming (referred to collectively as “Defendants” and individually as “API” and “Flaming” respectively) Motion to Dismiss, 75; the response and reply, Dkt. Nos. 83, 85; Plaintiffs' Second Amended Complaint and the attached exhibits, Dkt. No. 62, and the entire record in this case. Defendants move to dismiss Plaintiffs' claims against them in Plaintiffs' Second Amended complaint for lack of personal jurisdiction and for failure to state a claim for which relief can be granted. See Fed. R. Civ. P. 12(b)(2) and (6). Because one of the two defendants made a general appearance when it filed an earlier motion for summary judgment on third-party claims then pending against it, the Court concludes that it waived its personal-jurisdiction defense, see Fed. R. Civ. P. 12(h), and finds that Plaintiffs have made a prima facie showing of the other defendant's minimum contacts with Texas. The Court also denies in part Defendants' motion to dismiss for failure to state a claim for which relief may be granted, finding that Plaintiffs Second Amended Complaint pleads any fraud-based claims with the specificity required by Federal Rule of Civil Procedure 9(b) and Plaintiffs state a plausible claim that Defendants engaged in solicitation of agricultural workers within the meaning of the Migrant And Seasonal Agricultural Worker Protection Act, see 29 U.S.C. § 1802(6) –(7), as construed by the Fifth Circuit in Malacara v. Garber, 353 F.3d 393 (5th Cir.2003). However, the Court grants Defendants' motion insofar as it seeks dismissal of Plaintiffs' third-party breach-of-contract claim because Plaintiffs have not adequately alleged the element of causation.

I. Background

This litigation stems from Plaintiffs' employment during October of 2009 as migrant agricultural workers at a cotton gin owned and operated by former defendant Yoakum County Cooperative Gin (“YCCG”) in Plains, Texas. See Second Am. Compl. ¶ 10. The six plaintiffs aver that they are all United States citizens or lawful permanent residents residing in Cameron or Hidalgo County, Texas. Id. ¶¶ 3–4. According to their live complaint, they traveled approximately 700 miles from South Texas to Plains after accepting YCCG's offer to pay them $9.27 an hour over an expected 10–month term of employment, see id. ¶¶ 70–73 but, after they arrived YCCG refused to pay them more than the federal minimum wage of $7.35 an hour and provided substandard housing.See id. ¶¶ 70, 76. Plaintiffs state that they left YCCG on October 29, 2009, after YCCG's superintendent retaliated against them for inquiring about their pay rate. See id. ¶¶ 83–88. This lawsuit followed.

A. H–2A Program and YCCG's Form ETA–790

The H–2A non-immigrant visa program figures prominently in the factual background of Plaintiffs' live complaint. The H–2A program, which is administered in part by the Department of Labor (“DOL”), derives its informal name from its codification in the definitions section of the Immigration and Nationality Act. See 8 U.S.C. § 1101(a)(15)(H)(ii)(A) (2012) ; See also generally Sweet Life v. Dole, 876 F.2d 402, 406 (5th Cir.1989) (discussing Congress's decision in 1986 to provide different procedures for guest agricultural workers under H–2A program and other temporary workers under H–2B program). Congress requires the DOL to issue a labor certification to an employer before the Attorney General can grant temporary H–2A visas, but the Secretary of Labor can do so “only if the employer first demonstrates that he has made a good faith, active attempt to recruit American workers but could not find sufficient able, willing, and qualified workers for his needs.” Malacara, 353 F.3d at 396–97 (citing 8 U.S.C. § 1188(a)(1)(A) ); see also 8 U.S.C. § 1181(a)(1)(B) and 1181(b)(4) (2012) (requiring Secretary of Labor to certify that “the employment of the alien in such labor or services will not adversely affect the wages and working conditions of workers in the United States similarly employed” and an employer to demonstrate that he or she has “made positive recruitment efforts within a multi-state region of traditional or expected labor supply”). Federal regulations provide that “[t]he employer's job offer must offer to U.S. workers no less than the same benefits, wages, and working conditions that the employer is offering, intends to offer, or will provide to H–2A workers.” 20 C.F.R. § 655.122(a) (Further requiring, inter alia, “same level of minimum benefits [and] wages” to be offered to U.S. workers.).

To obtain a labor certification, an employer must submit, inter alia, a job order on a Form ETA–790. Id. § 655.121(a)(1). A specimen of such a form allegedly submitted by YCCG appears in the record. See Dkt. No. 62 Ex. 3; see also 20 C.F.R. § 655.122(d) –(q) (listing required contents of job offer). This form, which Plaintiffs allege was submitted to the DOL on or around August 17, 2009, offers work expected to last 10 months at YCCG's cotton ginning facility in Plains, Texas beginning on October 1, 2009. See id. at 1. YCCG will provide housing for workers, see id. at 3, and the amount of $9.27 per hour appears in the blank for the pay rate. Id. at 1. Federal regulations require the employer to offer and pay the greatest of several enumerated wage rates including, as facially relevant here, the adverse effect wage rate for agricultural workers determined annually by the United States Department of Agriculture. See20 C.F.R. § 655.120(a). Plaintiffs aver that this rate was $9.27 per hour at all times relevant to this litigation. See Second Am. Compl. ¶ 34. Once the DOL has cleared the Form ETA–790 job order, it is placed into an interstate clearance system used for recruiting domestic workers where it is apparently available to state employment agencies such as the Texas Workforce Commission (TWC). See 20 C.F.R. § 655.122(c) ; Malacara, 353 F.3d at 396–97 (discussing use of program by farmer and receipt of job order by TWC in McAllen, Texas).

B. Procedural History

Plaintiffs named YCCG as the sole defendant in their original complaint; see Dkt. No. 1 ¶ 7, brought claims under Texas law for fraud, breach of contract, and negligent misrepresentation and also alleged YCCG violated provisions of the Migrant and Seasonal Agricultural Worker Protection Act (“AWPA”), 29 U.S.C. § 1801 et seq. and the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.See id. ¶¶ 39–56. YCCG filed a partial motion to dismiss for failure to state a claim for which relief can be granted under Federal Rule of Civil Procedure 12(b)(6) which this Court denied.¹ Dkt. No. 11.

Discovery commenced, and YCCG, without opposition, subsequently obtained leave to file a third-party complaint against API, an Oklahoma corporation which keeps its principal place of business in Fairview, Oklahoma. See Dkt. No. 17. In its third-party complaint, YCCG alleged that it contracted with API “to search for and obtain seasonal workers for YCCG's cotton ginning season through the H–2A visa program.” Dkt. No. 18 ¶ 5. Specifically, YCCG pled that API did not follow its instructions to amend the form ETA–790 to reflect that YCCG offered employment from October 15, 2009, through January 1, 2010, offered in the original form. See id. ¶ 6; see also Dkt. No. 62 Ex. 3 at 1 (giving “October 1, 2009, to August 1, 2010,” as the “anticipated period of employment”). YCCG therefore asserted negligence, breach of contract, and negligent misrepresentation claims against API. See Am. Third–Party Compl. ¶¶ 11–22. API responded to the third-party complaint by filing a self-styled motion for summary judgment arguing that YCCG's third-party complaint was insufficient and that the applicable statute of limitations barred YCCG's claims. Dkt. No. 30. In response, Plaintiffs sought leave to amend their complaint to assert directly against API claims under the AWPA and fraud, negligent misrepresentation, and for each of the API–YCCG services contract as third-party beneficiaries. See Proposed First Am. Compl. ¶¶ 47–68, Dkt. No. 34 Ex. 1.

This Court granted in part and denied in part API's self-styled motion for summary judgment and denied Plaintiffs' motion to amend. Dkt. No. 59. Because of the nature of the relief requested, the Court treated API's motion for summary judgment as a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), dismissed YCCG's breach-of-contract claim under the Texas economic-loss rule, and dismissed YCCG's other claims with leave to refile. See id. at 16. Conducting a Rule 12(b)(6) analysis, this Court also held that permitting Plaintiffs to file their proposed amended complaint would be futile because Plaintiffs failed to plead the proposed fraud-based claims with the particularity required by Federal Rule of Civil Procedure 9(b) and did not adequately allege the elements of a breach-of-contract claim. See id. at 5–11. As to the breach-of-contract claim, this Court determined that Plaintiffs did not allege that API failed to perform any obligation of the API–YCCG contract or raise a claim that Plaintiffs suffered damages as a result of any alleged breach above the speculative level. See id. at 5–7. Rather than dismissing the third-party complaint, the Court granted YCCG and Plaintiffs leave to...