Paguirigan v. Prompt Nursing Emp't Agency LLC

• Decision Date: 20 December 2017
• Docket Number: No. 17–cv–1302 (NG) (JO),17–cv–1302 (NG) (JO)
• Citation: 286 F.Supp.3d 430
• Parties: Rose Ann PAGUIRIGAN, individually and on behalf of all others similarly situated, Plaintiff, v. PROMPT NURSING EMPLOYMENT AGENCY LLC d/b/a/ Sentosa Services, Sentosacare LLC, Sentosa Nursing Recruitment Agency, Benjamin Landa, Bent Philipson, Berish Rubenstein a/k/a Barry Rubenstein, Francis Luyun, Golden Gate Rehabilitation & Health Care Center LLC, and Spring Creek Rehabilitation and Nursing Center, Defendants.
• Court: U.S. District Court — Eastern District of New York

286 F.Supp.3d 430

Rose Ann PAGUIRIGAN, individually and on behalf of all others similarly situated, Plaintiff,

v.PROMPT NURSING EMPLOYMENT AGENCY LLC d/b/a/ Sentosa Services, Sentosacare LLC, Sentosa Nursing Recruitment Agency, Benjamin Landa, Bent Philipson, Berish Rubenstein a/k/a Barry Rubenstein, Francis Luyun, Golden Gate Rehabilitation & Health Care Center LLC, and Spring Creek Rehabilitation and Nursing Center, Defendants.

No. 17–cv–1302 (NG) (JO)

United States District Court, E.D. New York.

Signed December 20, 2017

Filed December 22, 2017

Leandro Bolesa Lachica, Howley Law Firm, John J.P. Howley, Law Offices of John Howley, New York, NY, for Plaintiff.

Elliot Hahn, Hahn Eisenberger PLLC, Seth Eisenberger, Law Office of Seth Eisenberger, Brooklyn, NY, Sheldon Eisenberger, Alan M. Pollack, Robinson, Borg, Leinwand, Greene, Genovese & Gluck, P.C., New York, NY, for Defendants.

OPINION and ORDER

GERSHON, United States District Judge:

Plaintiff Rose Ann Paguirigan brings claims, on behalf of herself and others similarly situated, for violations of the Trafficking Victims Protection Act ("TVPA"), 18 U.S.C. §§ 1589 et seq. ,¹ and declaratory judgment against defendants Prompt Nursing Employment Agency LLC ("Prompt Nursing"), Sentosacare LLC ("Sentosacare"), Sentosa Nursing Recruitment Agency ("Sentosa Agency"), Benjamin Landa, Bent Philipson, Berish Rubenstein, Francis Luyan, Golden Gate Rehabilitation and Health Care Center LLC ("Golden Gate"), and Spring Creek Rehabilitation and Nursing Center ("Spring Creek"). Plaintiff also alleges breach of contract against Prompt Nursing, Rubenstein, Landa, and Philipson. All defendants now move under Federal Rule of Civil Procedure 12(b)(6) to dismiss all TVPA claims and the declaratory judgment claim for failure to state a claim. Defendants Rubenstein, Landa, and Philpson also move to dismiss the breach of contract claim for failure to state a claim. For the reasons set forth below, defendants' motion is denied in full.

I. Facts

The following facts are taken from the plaintiff's Complaint and are assumed to be true for purposes of deciding defendants' motion to dismiss.²

Plaintiff is a citizen of the Republic of the Philippines who, beginning in 2006, was recruited by defendants Sentosa Agency, Luyun, and Philipson to work for a nursing home owned and operated by the defendants in New York. Compl. at ¶¶ 6, 19. In April 2015, plaintiff signed an employment contract to work for defendant Golden Gate, a nursing home owned and operated by the defendants in New York. Id. at ¶ 20. The contract was signed by Landa on behalf of Golden Gate, without identifying his role at Golden Gate. Id. It includes a provision that allows the contract to be assigned to another nursing home or staffing agency "owned by the defendants." Id. at ¶ 21. According to plaintiff, the contract was assigned to defendant Prompt Nursing. Id.

The defendants' standard employment contract provides that foreign nurses pay a $25,000 contract termination fee—a fee which Plaintiffs refer to as the "Indentured Servitude Penalty"—if they leave their jobs before the end of the contract term. Id. at ¶ 46. Additionally, nurses were required to execute a $25,000 confession of judgment in favor of their employer as a condition of employment before leaving the Philippines. Id. at ¶ 47. Both the contract termination fee and confession of judgment were designed to coerce the nurses into continuing their employment. Id. at ¶ 48. These provisions appear in Section VII(4) of the plaintiff's employment contract. In May 2010, the New York State Supreme Court, Nassau County, held that the contract termination fee was unenforceable on the grounds that the parties (Prompt Nursing and Golden Gate were among the plaintiffs and several nurses, not including the plaintiff in the instant case, were defendants) had unequal bargaining power, and contract damages could be easily proven at trial. Id. at ¶ 51; SentosaCare LLC v. Anilao , Index No. 6079/2006 at *6.

Since the SentosaCare LLC decision, defendants have continued to require foreign nurses to execute the $25,000 confession of judgment and have continued to include the unenforceable $25,000 termination fee in their employment contracts. Id. at ¶ 55–56. Moreover, defendants have continued to threaten plaintiff and other foreign nurses with enforcement of the contract termination fee and have in fact commenced lawsuits against foreign nurses to enforce both the termination fee and the confession of judgment. Id. at ¶¶ 57–58, 68. On March 27, 2016, defendant Prompt Nursing commenced a lawsuit against plaintiff to enforce the $25,000 termination fee and confession of judgment. Id. at ¶ 59. This lawsuit also seeks $250,000 in damages for tortious interference with contract and prospective business relations. Id. Defendant Prompt Nursing threatened to commence and actually did commence similar lawsuits against other foreign nurses despite having no good faith basis to believe that the $25,000 fee was enforceable and despite having no evidence to support its allegations of tortious interference. Id. at ¶ 60–64. The lawsuits were designed not to recover actual losses, but rather to send a message to all foreign nurses that they would face civil litigation and incur substantial attorneys' fees if they stopped working for the defendants. Id. at ¶ 67. To that end, defendants informed foreign nurses who still worked in their nursing homes of the lawsuits against plaintiff and others. Id. Specifically, defendants Philipson and Luyun, acting on behalf of all defendants, told plaintiff and other foreign nurses that they would be liable for the $25,000 contract termination fee if they stopped working for defendants or looked for other work. Id. at ¶ 68.

All told, since 2006, defendants or their agents have commenced lawsuits against at least thirty foreign nurses to collect the $25,000 termination fee in their contracts and for tortious interference with contract and prospective business relationships. Id. at ¶ 72. Since 2006, the defendants or their agents also filed professional misconduct complaints with the New York State Education Department against at least twenty-seven foreign nurses because they stopped working for the defendants. Id. at ¶ 73. In every case, the New York State Department of Education determined that the foreign nurses had not committed professional misconduct. Id. Plaintiff alleges that these "baseless and abusive" lawsuits against plaintiff and other foreign nurses are part of a longstanding pattern and practice designed to induce fear and prevent foreign nurses from seeking other employment. Id. at ¶ 71. As a result, plaintiff and other foreign nurses allege that they reasonably feared serious financial and reputational harm if they did not continue working for defendants. Id. at ¶ 69.

Defendants also commenced a lawsuit against a lawyer for tortious interference with contract and prospective business relations because he advised foreign nurses who stopped working for the defendants in a lawsuit in which defendants did not prevail. Id. at ¶ 74. Additionally, defendants "convinced" the Nassau County District Attorney to retaliate against at least ten foreign nurses and their lawyer by seeking a criminal indictment against them after the nurses stopped working for the defendants. Id. at ¶ 75. After the District Attorney obtained the indictments, the New York State Appellate Division, Second Department, granted a writ of prohibition against prosecutions of the nurses and their lawyer on the grounds that it would violate the nurses' Thirteenth Amendment right to be free from involuntary servitude and their lawyer's First Amendment rights. Id. ; Matter of Vinluan v. Doyle , 60 A.D.3d 237, 249–50, 873 N.Y.S.2d 72 (2d Dept 2009).

Plaintiff alleges that defendants' actual and threatened legal actions were pursued to coerce plaintiff and other foreign nurses to continue working for the defendants and with the intent to cause plaintiff and other foreign nurses to believe that they would suffer serious psychological, financial, or reputational harm if they did not continue working for defendants. Id. at 76–79. As a result of defendants' conduct, plaintiff continued working for the defendants and "paid money to the defendants."³ Id. at ¶ 78–79.

II. Discussion

A. Standard of Review

Defendants move to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). When considering such a motion, the court must accept as true all well-pleaded factual allegations and must draw all inferences in plaintiff's favor. Swiatkowski v. Citibank , 446 Fed.Appx. 360, 360–61 (2d Cir. 2011). To survive a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Facial plausibility exists when a plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

B. Plaintiff's Claims

It appears from the Complaint and plaintiff's brief that plaintiff is making six claims: (1) violation of the TVPA, 18 U.S.C. § 1589 (forced labor)⁴ ; (2) violation of the TVPA § 1590 (trafficking with respect to peonage, slavery, involuntary servitude, or forced labor); (3) conspiracy to violate the TVPA, 18 U.S.C. § 1594(b) ; (4) attempt to violate the TVPA, 18 U.S.C. § 1594(a) ; (5) breach of contract; and (6) declaratory judgment relating to the enforceability of the contract termination fee and confession of judgment. Plaintiff brings the four TVPA claims and the claim for declaratory judgment against all defendants and brings the breach of contract claim against defendants Prompt Nursing, Rubenstein, Landa, and Philipson.

1. TVPA Claims

Defendants move to dismiss plaintiff's TVPA claims,...