Hernandez v. Balakian

• Decision Date: 27 March 2007
• Docket Number: No. CV-F-06-1383 OWW/DLB.,CV-F-06-1383 OWW/DLB.
• Citation: 480 F.Supp.2d 1198
• Parties: Jose HERNANDEZ, individually on, behalf of others similarly situated, Plaintiff, v. Leo BALAKIAN, Anthony Balakian, and Vince Balakian, Defendant.
• Court: U.S. District Court — Eastern District of California

480 F.Supp.2d 1198

Jose HERNANDEZ, individually on, behalf of others similarly situated, Plaintiff, v. Leo BALAKIAN, Anthony Balakian, and Vince Balakian, Defendant.

No. CV-F-06-1383 OWW/DLB.

United States District Court, E.D. California.

March 27, 2007.

COPYRIGHT MATERIAL OMITTED

Nicholas J.P. Wagner, Law Offices of Wagner & Jones, Michael Goldberg, The Goldberg Law Firm, Fresno, CA, Howard W. Foster, Pro Hac Vice, Johnson & Bell Ltd., Chicago, IL, for Plaintiff.

Christine M. Cooper, Pro Hac Vice, Monte B. Lake, Pro Hac Vice, McGuiness Norris & William, LLP, Washington, DC, Jan Leslie Kahn, Kahn, Soares & Conway, LLP, Hanford, CA, for Defendant.

ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS' MOTION TO DISMISS (Doc. 17) AND DENYING PLAINTIFF'S MOTION FOR SANCTIONS (Doc. 25)

WANGER, District Judge.

Plaintiff Jose Hernandez has filed a class action Complaint against defendants Leo Balakian, Anthony Balakian, and Vince Balakian, owners of Fruit Patch, Inc. The Complaint alleges that "Leo Balakian and his sons, Anthony and Vince Balakian ... have conspired to operate Fruit Patch Inc. and other agricultural growing businesses they own or operate (hereinafter the other entities') through a pattern of racketeering activity, the Illegal Immigrant Hiring Scheme." ¶ 4 The Complaint is brought on behalf of all legal hourly-paid workers who have been employed by an entity owned or operated by the Defendants. Plaintiff alleges that Defendants "have depressed his wages as an agricultural worker at Fruit Patch, Inc. by knowingly employing vast numbers of illegal immigrants there for the express purpose of depressing the market price for unskilled labor." Plaintiff refers to this as "the Illegal Immigrant Hiring Scheme" or "the Scheme". The Complaint alleges:

2. The Illegal Immigrant Hiring Scheme violates the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. It is perpetrated every day, as an integral part of the Balakian's regular manner of staffing their orchards, and will continue unabated, victimizing every legal worker, until halted by judicial intervention.

The Complaint further alleges:

14. The Illegal Immigrant Hiring Scheme saves Fruit Patch Inc. and the other entities millions of dollars per year in labor costs. This is so because illegal immigrants will work for starvation wages and in deplorable working conditions, a form of modern-day indentured servitude. Such hiring practices are in direct violation of the Immigration and Nationality Act and RICO, which makes the employment of illegal immigrants a predicate offense. Thus, if the Balakians were not hiring large numbers of illegal immigrants, their businesses would have to pay the Plaintiff Class significantly higher wages, and their profits would be sharply reduced.

15. All three of the Balakians have approved the following hiring criteria for Fruit Patch Inc. and the other entities. These criteria subvert the law against hiring illegal immigrants and effectively turn a blind eye to factors which any reasonable employer would know indicate job applicants are unauthorized for employment in the U.S.: 1) hiring workers who cannot speak English while claiming to be U.S. Citizens or Lawful Permanent Residents; 2) hiring workers who do not have housing and are recent arrivals to the U.S. and claim to be U.S. Citizens or Lawful Permanent Residents; 3) hiring workers who present authorization documents which are invalid on their face because the pictures are of a different person, are upside down, are on poor quality paper, etc.; 4) hiring workers who are personally known to them and their co-conspirators to be in the U.S. illegally and are using false documents; and 5) hiring workers who have previously been employed under different identities. A majority of the hourly workforce of Fruit Patch Inc. and the other entities fall into one of more of these categories.

16. Additionally, Fruit Patch Inc. and the other entities are often informed that large numbers of their workers are using false social security numbers by the Social Security Administration. Most of these workers then simply assume new identities and continue to be employed, pursuant to policies set by the Balakians.

. . . . .

17. The Balakians have personally approved the hiring procedures detailed above. They have also directed their hiring personnel, including Robero Olivarez, who has hired hundreds of illegal immigrants for Fruit Patch Inc. to follow these procedures, i.e., in ways that ensure the employment of a largely illegal workforce.

18. In addition, the Balakians facilitate the hiring of many of these illegal immigrants by directing their hiring-personnel [sic] to obtain housing for them, which Roberto Olivarez, among others, has done for illegal workers at Fruit Patch Inc.

19. Therefore, Mr. Hernandez alleges that the Balakians and their co-conspirators have facilitated the Illegal Immigrant Hiring Scheme, thereby causing Fruit Patch Inc. and the other entities they operate to hire more than 100 illegal workers per year during the last four years.

The Complaint alleges that the Balakian's Illegal Immigrant Hiring Scheme violates the Immigration and Nationality Act, 8 U.S.C. § 1324(a)(1)(B)(3)(A),¹ as they have conspired "to employ more than 10 undocumented, illegal aliens in each of the last four years, knowing each was smuggled into the country and/or harbored once they arrived here." ¶ 21. [Emphasis added] The Complaint alleges that "by knowingly employing illegal immigrants and ... conspiring to provide them with housing, the Balakians have conspired to violate 8 U.S.C. § 1324(a)(1)(A) (iii), which makes it a federal crime for anyone who `knowing, or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law, conceals, harbors, or shields from detection, or attempts to conceal, harbor, or shield from detection, such alien in any place, including any building or any means of transportation.'" ¶ 22. [Emphasis added].

The Complaint alleges that "[t]hese are provisions of § 274 of the Immigration and Nationality Act, which is a RICO predicate offense" pursuant to 18 U.S.C. § 1961(1)(F); that Fruit Patch Inc. is a corporation affecting interstate commerce and is therefore a RICO enterprise pursuant to 18 U.S.C. § 1961(4); that the other entities are each RICO enterprises affecting interstate commerce; and that all three of the Balakians operate and manage each of these enterprises and have implemented the Illegal. Immigrant Hiring Scheme at each by virtue of their roles as managers, officers and owners. The Complaint alleges:

25. The conspiracy to perpetrate the Scheme is a violation of 18 U.S.C. § 1962(d), an agreement among the Balakians and co-conspirators to violate § 1962(c), by participating in the affairs of Fruit Patch Inc. and the other entities through a pattern of racketeering activity. The Scheme is on-going, open-ended, and has been perpetrated continuously for the last four years. It will not stop without judicial intervention.

. . . . .

26. The Balakians' Illegal Immigrant Hiring Scheme, by itself, was a substantial factor in causing the depressed wages about which Hernandez and the Class complain. No other party has been damaged by the Scheme.

27. Each defendant is subject to joint and several liability for all of the damage caused by all the racketeering acts committed by any of the conspirators.

Defendants move to dismiss the Complaint for failure to state a claim upon which relief can be granted pursuant to Rules 8 and 12(b) (6), Federal Rules of Civil Procedure.

In addition to opposing the Motion to Dismiss, Plaintiff has filed a Motion for Sanctions pursuant to Rule 11, Federal Rules of Civil Procedure, against Defendants and their counsel, Monte B. Lake, because of the failure to cite Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002), in the Motion to Dismiss. The Motion for Sanctions seeks an order striking Defendants' Motion to Dismiss and an award of attorneys' fees incurred by Plaintiff in opposing the Motion to Dismiss and for preparing the Motion for Sanctions.

A. Defendants' Motion to Dismiss.

In moving to dismiss, Defendants contend that the Complaint fails to adequately plead the necessary elements of a RICO predicate Act under 18 U.S.C. § 1962(c) and underlying crimes defined by the Immigration and Nationality Act; that Plaintiffs failure to state a Section 1962(c) claim results in the failure to state a claim under Section 1962(d); and that Plaintiff fails to adequately plead the necessary elements of a RICO conspiracy under Section 1962(d).

1. Governing Standards.

A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). Dismissal of a claim under Rule 12(b)(6) is appropriate only where "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory or where the complaint presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir.1984). In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe all inferences from them in the light most favorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir.2002). However, legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003). When ruling on a motion to dismiss, the court may consider the facts alleged in the complaint, documents attached to the complaint, documents relied upon but...