David v. Signal Int'l, LLC

• Decision Date: 12 August 2014
• Docket Number: 12–557,13–6218,13–6220,13–6219,14–732.,Civil Action Nos. 08–1220,13–6221
• Citation: 37 F.Supp.3d 822
• Parties: Kurian DAVID, et al., Plaintiffs v. SIGNAL INTERNATIONAL, LLC, et al., Defendants. Related Cases: Equal Employment Opportunity Commission, Plaintiff v. Signal International, LLC, et al., Defendants. Lakshmanan Ponnayan Achari, et al., Plaintiffs v. Signal International, LLC, et al., Defendants. Applies To: David v. Signal (08–1220).
• Court: U.S. District Court — Eastern District of Louisiana

37 F.Supp.3d 822

Kurian DAVID, et al., Plaintiffs

v.SIGNAL INTERNATIONAL, LLC, et al., Defendants.

Related Cases:

Equal Employment Opportunity Commission, Plaintiff

v.Signal International, LLC, et al., Defendants.

Lakshmanan Ponnayan Achari, et al., Plaintiffs

v.Signal International, LLC, et al., Defendants.

Applies To: David v. Signal (08–1220).

Civil Action Nos. 08–1220

12–557

13–6218

13–6219

13–6220

13–6221

14–732.

United States District Court, E.D. Louisiana.

Signed Aug. 12, 2014.

Alan Bruce Howard, Chieni D. Suzuki, Hugh Daniel Sandler, Melia Amal Bouhabib, Crowell & Moring, LLP, Chandra S. Bhatnagar, American Civil Liberties Union Foundation, Ivy O. Suriyopas, Asian American Legal Defense and Educational Fund, New York, NY, Anjali J. Nair, Montgomery, AL, Daniel Werner, Kristi L. Graunke, Morris S. Dees, Naomi Tsu, Atlanta, GA, Meredith B. Stewart, Tracie L. Washington, New Orleans, LA, for Plaintiffs.

Erin Casey Hangartner, Alan Dean Weinberger, Brian C. Roux, Elham Rabbani, Hal D. Ungar, Lance R. Rydberg, Hangartner, Rydberg, Terrell & Hart, LLC, James L. Cornblatt, Patricia Anne F. Bollman, Patricia A. Bollman, APLC, New Orleans, LA, for Defendants.

ORDER AND REASONS

SUSIE MORGAN, District Judge.

Before the Court is a 12(c) Motion for Partial Judgment on the Pleadings¹ and a 12(b)(6) Motion to Dismiss,² both filed by Signal International, LLC (“Signal”), as well as a 12(c) Motion for Partial Judgment on the Pleadings filed by Burnett.³ Plaintiffs oppose all of the motions.⁴ Considering the briefs, the record, and the parties arguments at oral argument, the court rules as follows.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs are twelve citizens of India who secured H–2B visas to work in the United States for Signal in the aftermath of Hurricane Katrina. Plaintiffs allege the Defendants⁵ recruited them to work as temporary workers for Signal and forced them to pay inbound travel expenses, visa expenses, and other recruiting expenses. Plaintiffs allege they were induced by Defendants to pay such sums because Defendants knowingly made false promises and representations regarding “the nature and terms and conditions of the immigration and work opportunities offered.”⁶ Plaintiffs also claim they were discriminated against and subjected to forced labor as welders, pipefitters, and marine fabrication workers at Signal's facilities in Pascagoula, Mississippi and Orange, Texas. Once Plaintiffs arrived at Signal facilities in the United States, Plaintiffs claim Signal forced the workers to live in deplorable conditions and used various tactics to compel the Plaintiffs to continue working for Signal.

Plaintiffs allege Signal and Burnett violated the Trafficking Victims Protection Act of 2003 (“TVPRA”)(18 U.S.C. § 1589 ), the Racketeer Influenced and Corrupt Organizations Act (“RICO”) (18 U.S.C. § 1962 et seq. ), and the Klu Klux Klan Act (42 U.S.C. § 1985 ).⁷ Plaintiffs claim Signal violated the Civil Rights Act of 1866 (42 U.S.C. § 1981 ) (“Section 1981 ”) and the Fair Labor Standards Act (“FLSA”)(29 U.S.C. § 201 et seq. ).⁸ Additionally, Plaintiffs bring claims against Signal and Burnett for fraud, negligent misrepresentation, and breach of contract under state law.

Signal filed a 12(c) Motion for Partial Judgment on the Pleadings seeking to dismiss Plaintiffs' state law claims, claim for recruitment fees under Section 1981, and claim for recruitment fees, inbound travel expenses, and visa expenses under FLSA contained in Plaintiffs' third amended complaint.⁹ The Court thereafter ordered Plaintiffs to file fourth and fifth amended complaints to clarify their causes of action and to state which law their state law claims arise under.¹⁰ After Plaintiffs filed their fifth amended complaint, Signal filed a 12(b)(6) Motion to Partially Dismiss Plaintiffs' state law claims, putting forth the same arguments as its Rule 12(c) motion, and additionally asking the Court to decline to exercise jurisdiction over Plaintiffs' state law claims.¹¹ Burnett filed a Rule 12(c) Motion for Partial Judgment on the Pleadings seeking to dismiss the TVPRA, RICO, and the Klu Klux Klan Act claims in Plaintiffs' fourth amended complaint, as well as Plaintiffs' state law claims for fraud and negligent misrepresentation.¹²

Plaintiffs then sought and obtained leave to file a sixth amended complaint to add various Signal entities as defendants.¹³ In Plaintiffs' sixth amended complaint, they do not seek recruitment fees under Section 1981. Plaintiffs seek “compensatory damages for the deprivation of Plaintiffs' civil rights during their time in Signal's Pascagoula, Mississippi and/or Orange, Texas employment up to the point at which each Plaintiffs' employment at Signal was terminated.

”¹⁴ Plaintiffs do not pray for compensatory damages related to the recruitment fees they incurred prior to or after working at Signal under Section 1981. Accordingly, Signal's 12(c) Motion for Judgment on the Pleadings seeking dismissal of Plaintiffs' claim for recruitment fees under Section 1981 is DENIED AS MOOT. However, with respect to the remaining issues raised in both Signal's and Burnett's motions, the amended complaints have not rendered any of those issues moot. Accordingly, the Court will rule on each motion in turn.

STANDARD OF LAW

Signal and Burnett's motions under Rule 12(b)(6) and Rule 12(c) are governed by the same legal standard. The standard for dismissal under Rule 12(c) is the same as that for dismissal for failure to state a claim under Rule 12(b)(6). Johnson v. Johnson, 385 F.3d 503, 528 (5th Cir.2004). Pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court may dismiss a complaint, or any part of it, for failure to state a claim upon which relief may be granted if the plaintiff has not set forth factual allegations in support of his claim that would entitle him to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.2007). As the Fifth Circuit explained in Gonzalez v. Kay:

“Factual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The Supreme Court recently expounded upon the Twombly standard, explaining that “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). “A Claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. It follows that “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—that the pleader is entitled to relief.” Id. at 1950 (quoting Fed.R.Civ.P. 8(a)(2) ).

577 F.3d 600, 603 (5th Cir.2009).

The Court cannot look beyond the factual allegations in the pleadings to determine whether relief should be granted. See Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.1999) ; Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.1996). In assessing the Plaintiffs' complaint, the Court must accept all well-pleaded facts as true and liberally construe all factual allegations in the light most favorable to the Plaintiffs. Spivey, 197 F.3d at 774 ; Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir.1997). “Dismissal is appropriate when the complaint ‘on its face show[s] a bar to relief.’ ” Cutrer v. McMillan, 308 Fed.Appx. 819, 820 (5th Cir.2009) (per curiam) (unpublished) (quoting Clark v. Amoco Prod. Co., 794 F.2d 967, 970 (5th Cir.1986) ). A court may grant a motion for judgment on the pleadings when no genuine issues of material fact remain and the case can be decided as a matter of law. Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007).

ANALYSIS

A. Signal's Motion for Partial Judgment on the Pleadings Under Rule 12(c)¹⁵

Signal seeks dismissal of Plaintiffs' claims for recruitment fees, visa expenses, and travel expenses, asserting these fees and expenses are not recoverable under FLSA.¹⁶

In their complaint, Plaintiffs claim Signal violated FLSA by failing to pay Plaintiffs the applicable minimum wage as a result of Signal's unlawful deductions from Plaintiffs' wages for travel expenses, visa expenses, and recruitment expenses, all of which were allegedly paid entirely by Plaintiffs for the benefit or convenience of Signal.¹⁷ Under FLSA, “wage” is defined as both cash wages and “the reasonable cost ... to the employer of furnishing such employee with board, lodging, or other facilities, if such board, lodging, or other facilities are customarily furnished by such employer to his employees.” 29 U.S.C. § 203(m). The court in Rivera v. Brickman Group, Ltd. explained how the FLSA minimum wage is calculated in light of an employer's deductions:

In other words, when the employer pays for “board, lodging, or other facilities,” it may add the costs of those facilities to the cash wage for purposes of complying with the FLSA minimum. The Department of Labor has stipulated that an employer may not count as “other facilities” goods or services that are “primarily for the benefit or convenience of the employer,” 29 C.F.R. § 531.3(d)(1), and, as a corollary, has provided that employers may not pass along to employees expenses for such goods or services, 29 C.F.R. § 531.35. If an employer does pass along such an expense, then the expense is deducted from the cash wage to determine compliance with the FLSA minimum.

2008 WL 81570 at *7 (E.D.Pa. Jan. 7, 2008).

Plaintiffs pray for reimbursement of travel expenses, visa expenses, and recruitment expenses, arguing these sums were “primarily for the benefit” of Signal and therefore those expenses must be deducted...