Perez v. Paragon Contractors Corp.

• Citation: 222 F.Supp.3d 1078
• Decision Date: 01 June 2016
• Docket Number: Case No. 2:06–cv–00700–TC
• Parties: Thomas E. PEREZ, Secretary of Labor, United States Department of Labor, Plaintiff, v. PARAGON CONTRACTORS CORPORATION, Brian Jessop, and James Jessop, Defendants.
• Court: U.S. District Court — District of Utah

222 F.Supp.3d 1078

Thomas E. PEREZ, Secretary of Labor, United States Department of Labor, Plaintiff,

v.PARAGON CONTRACTORS CORPORATION, Brian Jessop, and James Jessop, Defendants.

Case No. 2:06–cv–00700–TC

United States District Court, D. Utah, Central Division.

Signed June 1, 2016

Amanda A. Berndt, Jeffrey E. Nelson, John K. Mangum, US Attorney's Office, Salt Lake City, UT, Karen E. Bobela, pro hac vice, Alicia A.W. Truman, pro hac vice, Lydia Tzagoloff, pro hac vice, Katherine Vigil, US Department of Labor Office of the Solicitor, Denver, CO, for Plaintiff.

Kenneth A. Okazaki, Deborah Rae Chandler, Jones Waldo Holbrook & McDonough, Rick J. Sutherland, M. Christopher Moon, Jackson Lewis PLLC, Salt Lake City, UT, for Defendants.

FINDINGS OF FACT CONCLUSIONS OF LAW

Tena Campbell, United States District Judge

INTRODUCTION

Following an investigation into complaints that Paragon Contractors Corporation (Paragon), a company in Hildale, Utah, was using child labor in violation of the Fair Labor Standards Act (FLSA), the Secretary of Labor (the Secretary) filed this lawsuit. The parties reached an agreement resolving the Secretary's claim. The agreement culminated in a stipulated permanent injunction and order which, on November 29, 2007, the court signed. (Permanent Inj., ECF No. 26.) The order directed that:

Defendants [Paragon, Brian Jessop and James Jessop] shall not, contrary to Sections 12(c) and 15(a)(4) of the FLSA, employ, suffer or permit minors to work in commerce or in the production of goods for commerce, or in an enterprise engaged in commerce or in the production of goods for commerce, within the meaning of the FLSA under conditions constituting oppressive child labor as defined in § 3(l ) of the FLSA[,] 29 U.S.C. § 203(l ), and in occupations therein declared to be hazardous as defined in the regulations found at 29 C.F.R. Part 570 (Subparts C and E).

(Id. )

On December 4, 2012, CNN filmed hundreds of children working at the Southern Utah Pecan Ranch (SUPR) in Hurricane, Utah. Upon seeing the video, the Secretary's investigators began an investigation into whether Paragon was involved with the children working at SUPR.

Finally, after a lengthy investigation which required the Secretary to file subpoena-enforcement actions against the Defendants and others, on September 8, 2015, the Secretary filed a motion for an order to show cause why the Defendant s¹ should not be held in contempt for having violated the injunction. The court granted the motion and an evidentiary hearing was held on January 25, 26, and 27, 2016.²

From all the evidence considered by the court and the law that applies to that evidence, the court concludes that Defendants Paragon and Brian Jessop are in contempt of court for violation of the court's order of November 29, 2007.

FINDINGS OF FACT

Brian Jessop is the owner and president of Paragon. His brother, James Jessop, is vice-president. Paragon's usual business is construction. SUPR is a Nevada limited liability company that owned a pecan grove in Hurricane, Utah.

The pecan grove is approximately 125 acres with close to 4500 producing pecan trees. These trees yield anywhere from 160,000 pecans in a good year to 80,000 pecans in a bad year.³ Yamagata Enterprises controls SUPR and Norman Freeman was the contact person between Yamagata and Paragon.

Beginning in approximately 2008, Paragon and SUPR agreed that Paragon would be responsible for harvesting all the pecans.⁴ Brian Jessop negotiated the contract on behalf of Paragon.

In the years before the Paragon and SUPR agreement, SUPR hired workers to harvest the pecans. Following the harvest, the then-manager of the pecan ranch allowed members of the Fundamentalist Church of Jesus Christ of Latter Day Saints (FLDS) community to gather the pecans that had fallen to the ground. SUPR permitted the FLDS community members to keep 50% of the pecans gathered; the other 50% went to SUPR. That arrangement with the FLDS church and SUPR ended when Paragon took over the harvesting of the pecans in 2008.

At the hearing, Mr. Freeman was emphatic that the arrangement with the FLDS community had ended. He testified:

Q: I'm not asking or suggesting any of that. I'm simply trying to establish that this whole arrangement of the FLDS community members gleaning nuts from the field continued from before—

A: It did not. In my mind, did not. With a contract, I expected the contractor to pick it up—pick them up, however, tractor, whatever.

Q: Let me see if I understand the distinction you're making. Before you signed this contract, those FLDS community members were gathering nuts, right?

A: Yes.

Q: After you signed the contract, they continued to gather nuts but you felt they were doing it for Paragon rather than for SUPR, is that what you're trying to say?

A: Yes.

(Contempt Hr'g Tr. 146–47, Jan. 25, 2016, ECF No. 89.)

Mr. Freeman outlined in his affidavit the agreement between SUPR and Paragon:

Under the terms of the Contract, Paragon was responsible for harvesting all of the pecans at SUPR, including the tree nuts that are shaken from the trees using tractors with pans and a conveyor system, as well as the tree nuts that miss the pan and fall onto the ground. I have had specific discussions with Brian Jessop regarding the expectation that Paragon harvest both the pecans shaken from the tree as well as the pecans that fall onto the ground. Brian Jessop was aware of and agreed that this was Paragon's obligation under the contract.

(Freeman Aff. ¶ 9, ECF No. 70.)

Under the agreement, SUPR would receive 70% of the proceeds from the sale of the pecans and Paragon 30%.

Paragon hired Dale Barlow to manage and operate the grove in 2011. His duties remained the same in 2012. Before Mr. Barlow took over at SUPR, Keith Dutson was the manager. Brian Jessop testified that "[a]s it relates to Paragon, what Dale [Barlow] was to do at the pecan ranch should have been the same as what Keith did in 2010." (Contempt Hr'g Tr. 222, Jan. 25, 2016, ECF No. 89.)

Dale Barlow's testimony at his depositions and at the hearing was evasive and was often contradicted by other witnesses' testimony. For example, Mr. Barlow insisted that the parents brought their children to work at SUPR and they supervised them at work. (Dale Barlow Aff. ¶ 21, ECF No. 61; Dale Barlow Dep. 39, 40, Jan. 31, 2013.) But children who worked there testified that their parents did not take them to SUPR and were not with them as they worked. Alyssa Bistline, who was a very credible witness, testified that when she was home-schooling thirty-three children in 2012, she was directed to take the children in vans to work at SUPR. She drove the children to the pecan grove and often the children's parents were not there. (Bistline Aff. ¶ 11, ECF No. 62; Contempt Hr'g Tr. 61–63, Jan. 25, 2016, ECF No. 89.)

Ms. Bistline's testimony was confirmed by the testimony of Phoebe Barlow, who worked at SUPR from 2010 to 2012. Phoebe Barlow began at age eleven and stopped when she was thirteen years old.

She testified that in 2011 and 2012, she was driven to SUPR in vans. (Phoebe Barlow Aff. ¶ 11, ECF No. 71.) Moreover, Sheryl Barlow, the mother of several of the minor children testified, "I was usually not present when my children were working at the pecan harvest at SUPR in 2012." (Sheryl Barlow Aff. ¶ 12, ECF No. 72; Contempt Hr'g Tr. 262, Jan. 26, 2016, ECF No. 95.)

Throughout his testimony, Dale Barlow attempted to show that the parents supervised and directed their children as they gathered pecans. His unsupported testimony was simply not credible. The credible testimony established that Dale Barlow directed the children's work, sometimes assisted by his wife, Marsha Barlow. Phoebe Barlow testified:

A: Um, so we would meet every morning at the Foot Hill School before leaving to go down to SUPR. And Dale would give instructions for the day and then he would tell us who would be leading some of the groups. And so we would go down there and Marsha usually had the largest group of the girls. I don't know who led the boys, and there were Faye Barlow or Dorothy Steed, I don't know what her last name is any more, they took small groups a few times but Marsha usually was in charge of the largest group of girls.

Q: So you personally observed Marsha being in charge of a group?

A: Yes, and I personally checked in with her many times.

Q: Okay. And you personally observed Dale Barlow providing instructions?

A: Yes.

Q: Thank you. Paragraph 10 [of the affidavit], you talked about knowing that your brother did work trimming and cleaning up at other times of the year. Did you see him leaving to do that work?

A: Yes, I did, and he came home and talked about it later after, afterwards. So—

THE COURT: Would he be sort of dirty, et cetera, as one would be working?

THE WITNESS: Yes, he would come home all sweaty and dirty.

(Contempt Hr'g Tr. 311–12, ECF No. 95.)

The court also found Brian Jessop not credible. For example, Mr. Jessop initially denied that he knew his own children worked at SUPR. (Brian Jessop Dep. 109, Jan. 31, 2013.) He later asserted his Fifth Amendment right and refused to answer the question. (Brian Jessop Dep. 9–11, Nov. 13, 2014.) But the credible testimony showed that his children had been seen working at SUPR. (Contempt Hr'g Tr. 74–75, Jan. 25, 2013, ECF No. 89; Phoebe Barlow Aff. ¶ 18, ECF No. 71; Martha Barlow Aff. ¶ 17, ECF No. 68.)

This court is not the first judge in this case to find Brian Jessop not to be a credible witness. During proceedings brought by the Secretary to enforce subpoenas issued to Paragon and Brian Jessop, Magistrate Judge Evelyn Furse wrote: "Mr. Jessop's claimed lack of knowledge [was] disingenuous." Harris v. Paragon Contractors Corp. , No. 2:13–cv–00281, slip op. at 2 (D. Utah June 20, 2013) (decision and recommendation to enforce subpoenas). Judge Furse found "Brian Jessop's claim not to know a single person who harvested ground nuts at SUPR lack[ed] believability." Id. at 3. She also found that Mr. Jessop's denial of knowing who the...