Galindo v. Del Monte Corporation

• Decision Date: 30 September 1974
• Docket Number: No. 73 C 51.,73 C 51.
• Parties: Francisco GALINDO, Jr., et al., Plaintiffs, v. DEL MONTE CORPORATION, a foreign corporation, Defendant.
• Court: U.S. District Court — Northern District of Illinois

382 F. Supp. 464

Francisco GALINDO, Jr., et al., Plaintiffs, v. DEL MONTE CORPORATION, a foreign corporation, Defendant.

No. 73 C 51.

United States District Court, N. D. Illinois.

September 30, 1974.

Bruce L. Goldsmith, Chicago, Ill., for plaintiffs.

Melvin Mensor, San Francisco, Cal., Henry E. Seyfarth, Gerald D. Skoning and Raymond J. Kelly, Jr. of Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

BAUER, District Judge.

This cause comes before the Court on defendant's motion to dismiss plaintiffs' amended complaint and for summary judgment.

This case involves a series of alleged contractual, statutory and constitutional breaches committed by Del Monte Corporation ("Del Monte"). Plaintiffs are migrant agricultural workers recruited by Del Monte for employment in their home states of Texas, Arkansas and Kentucky by the defendant through the Federal Interstate Recruitment System. This system was established pursuant to the authority of the Wagner-Peyser Act of 1933.¹

The system is composed of participating state employment services acting in conjunction with the U.S. Department of Labor (DOL). In order to utilize the free services of the system an employer like defendant prepares a "clearance order" for a number of workers, stipulating the rate of pay, hours of work, and other terms and conditions of employment.

This clearance order is reviewed by the state employment service and the regional offices of the DOL. In the case of agricultural workers, the order must meet the requirements of 20 C.F.R. § 602.9. These requirements include the following: (1) that wage rates are not less than the rate "prevailing" in the area of employment, (2) that housing provided by the employer meets the sanitation standards of 20 C.F.R. § 620, (3) that transportation arrangements from the workers' homes to the employer are no less favorable than those in the area of employment, and (4) that all other terms and conditions of employment meet the "prevailing" test.

Del Monte submitted four clearance orders to the Illinois State Employment Service (ISES) prior to the 1973 harvest season. ISES and the regional DOL office approved these orders and transmitted them to labor supply state employment service offices for the recruitment of workers.

Plaintiffs contend that the relevant terms and conditions of employment contained in these orders were: (1) job positions as packing plant workers or tractor drivers; (2) workers "will be expected to work up to 15 hours per day or 70 hours or more per week. Average hours worked on a seasonal basis is 50 to 55 hours per week. Crop, weather conditions and/or labor supply available may alter this average and result in fewer or more hours per week." (3) "Deductions for all advances will not be in excess of those permitted under the Fair Labor Standards Act and other statutes."

Plaintiffs were recruited pursuant to these clearance orders in employment service offices in Kentucky, Arkansas and Texas. Plaintiffs Hemphill, Hooks, Jones and Thorbes claim by way of affidavit they were specifically offered tractor driver jobs under clearance order V-Ill-12. The other plaintiffs allegedly were offered in-plant work. Supposedly all plaintiffs were told at the time of recruitment by either employment service personnel or other agents of defendant that work would begin immediately upon plaintiffs' arrival at defendant's plants in Illinois.

Defendant advanced to plaintiffs the cost of transportation to Illinois. Plaintiffs left their homes and traveled to defendant's plants.

Upon arriving at defendant's plants, plaintiffs found little or no work. Plaintiffs Martinez, Ramirez and Fernandez received no work. Plaintiffs Hemphill, Hooks, Jones and Thorbes were never given the probation period as tractor drivers. Instead, they claim they received infrequent employment as in-plant workers, a lower-paying position, or no work at all. The other plaintiffs found themselves in the same position. Those plaintiffs who did receive work had large deductions taken from their paychecks to satisfy their debts. The deductions left many of the plaintiffs with small or negative paychecks. Part of the plaintiffs' claim is that these deductions were made without plaintiffs' executing valid wage assignments or being subject to wage deduction orders. They argue that this system, by forcing plaintiffs into debt, and then requiring plaintiffs to work off the debt before plaintiffs could leave defendant's employ, constitutes peonage (Count III). And that defendant used this system to maintain a reserve labor pool for peak work periods.

As to the wages paid, plaintiffs contend that they were often below the federal minimum wage. Thus, defendant allegedly violated the Fair Labor Standards Act (Count V).

Plaintiffs originally filed suit in July of 1973 seeking emergency injunctive relief against Del Monte, the Illinois Department of Labor, and the United States Department of Labor, and their respective administrative heads. After extensive hearings on July 25, 27 and 30 of 1973 on plaintiffs' request for a temporary restraining order, Judge McMillen refused to enter such an order, but urged the parties to reach agreement on future recruitment activities under the approved clearance orders. On August 13, 1973, the plaintiffs and all defendants filed a detailed stipulation representing the satisfactory resolution of the matters with respect to which the plaintiffs had sought injunctive relief. There remained plaintiffs' request for declaratory and monetary relief.

On August 21, 1973 defendant Del Monte filed its motion to dismiss the complaint for equitable, declaratory, monetary and other relief, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure on the grounds that the Court lacked subject matter jurisdiction and that the complaint failed to set forth a claim upon which relief could be granted. This motion was fully briefed by the parties pursuant to Local Rule 13. On December 17, 1973, the Illinois Department of Labor and United States Department of Labor, and their respective administrative heads, were dismissed from the lawsuit by virtue of stipulations entered with the plaintiffs whereby those defendants agreed to process interstate clearance orders in a specified manner (see U.S. Department of Labor letter of November 30, 1973 and Illinois Department of Labor Stipulation of December 17, 1973).

On December 27, 1973, this Court granted defendant Del Monte's motion to dismiss. Thereafter plaintiffs filed an amended complaint on January 24, 1974.

I. PLAINTIFFS HAVE STATED A PROPER CAUSE OF ACTION UNDER THE WAGNER-PEYSER ACT.

Plaintiffs seek to enforce their rights under the Wagner-Peyser Act of 1933² and the regulations promulgated by the Secretary of Labor pursuant to the Act.³ Surprisingly, in the 41 years since enactment of the statute there has been but a handful of cases in which the Wagner-Peyser Act was the jurisdictional basis. Plaintiffs contend that the Act authorizes an implied federal cause of action by private parties. In support they cite Gomez v. Florida State Employment Service, 417 F.2d 569 (5th Cir. 1969) which also involved a claim by migrant workers who sought relief when they were deprived of adequate wages, facilities, and working conditions.

As Chief Judge Brown pointed out in Gomez (supra), the "implication of a private civil remedy was first recognized by the Supreme Court in 1916 in Texas & Pacific Ry. Co. v. Rigsby, 241 U.S. 33, 36 S.Ct. 482, 60 L.Ed. 874." In Rigsby, the Supreme Court stated:

"Disregard of the command of the statute is a wrongful act, and where it results in damage to one of the class for whose special benefit the statute was enacted, the right to recover the damages from the party in default is implied. . . ."

This interpretation has been applied to many regulatory statutes and has been invoked quite often in the federal courts. See, Note, Implying Civil Remedies from Federal Regulatory Statutes, 77 Harv.L. Rev. 285 (1963) and footnote #1 in Farmland Indus. Inc. v. Kansas-Nebraska Nat. Gas Co. Inc., 349 F.Supp. 670 (D.C.Neb.1972) at 678 (Natural Gas Act); Dovis v. Romney, 355 F.Supp. 29 (E.D.Pa.1973) (jurisdiction under National Housing Act as to rights but not money damages); Cook v. Ochsner Foundation Hospital, 319 F.Supp. 603 (E.D.La.1970) (construing the Hill-Burton Act); New York City Coalition for Community Health v. Lindsay, 362 F. Supp. 434 (1973) (Public Health Service Act); Yanez v. Jones, 361 F.Supp. 701 (D.C.Utah 1973) (Social Security Act). What is clear from these cases is that on more than one occasion federal courts have stated that a civil remedy may be implied from statutes on regulations which make no mention of a right to bring suit. And, that, when it can be fairly stated that Congress intended to benefit a particular class in its statutory scheme, a civil remedy will be implied for such beneficiaries.

Defendant Del Monte submits that plaintiff's second amended complaint fails to establish a jurisdictional basis for this action under 28 U.S.C. § 1337 because the Wagner-Peyser Act upon which jurisdiction depends, "does not and was not intended to create a private right of action in individual migrant worker", citing Chavez v. Freshpict Foods, Inc., 456 F.2d 890 (10th Cir. 1972) and 27 Puerto Rican Migrant Farm Workers v. Shade Tobacco Growers, 352 F.Supp. 986 (D.Conn.1973). However, those cases involved claims brought pursuant to the Civil Rights Statutes and the Immigration and Nationality Act, thus, they are not controlling in this action.

Defendant has also brought to the Court's attention the fact that the cause of action alleged in the Gomez case differs from the case at hand. In Gomez

". . ., they found that the wages were lower than those called for in the regulations and the housing was woefully inadequate and far below the requirements that should have been met before the

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