On March 7, 2008, Indian guestworkers recruited for work in the United States in exchange for green cards filed this class-action lawsuit in the United States District Court for the Eastern District of Louisiana. The plaintiffs were recruited to provide labor and services to defendant Signal International, a company, based in Mississippi with operations in the Gulf Coast region, which is in the business of providing repairs to offshore oil rigs. The plaintiffs alleged that the defendant ran a fraudulent and coercive employment recruitment scheme. Plaintiffs also named Malvern C. Burnett and Sachin Dewan, a New Orleans lawyer and India-based recruiter, respectively, as co-defendants for their involvement in the scheme.
The plaintiffs asserted class action claims under the Trafficking Victims Protection Act (18 U.S.C. §1589 (forced labor) and 18 U.S.C. §1590 (trafficking)), the Racketeer Influenced Corrupt Organizations Act (18 U.S.C. §1962), the Civil Rights Act of 1866 (42 U.S.C. §1981), and the Ku Klux Klan Act of 1871 (42 U.S.C. §1985). The plaintiffs also asserted collective action claims under the Fair Labor Standards Act, and claims for damages under a theory of fraud, negligent misrepresentation, and breach of contract. Several plaintiffs also brought individual claims of false imprisonment, assault, battery, intentional infliction of emotional distress and/or negligent infliction of emotional distress. The plaintiffs were represented by the ACLU, the Southern Poverty Law Center, the Asian American Legal Defense and Education Fund, the Louisiana Justice Institute, and attorneys from several large private law firms.
The plaintiffs alleged that they paid recruiters as much as $25,000 for travel, visa, and recruitment fees, but upon arrival in the United States found out they would not receive the green cards promised to them. Instead, the plaintiffs were allegedly forced to pay additional fees of $1,050 per month to live in racially segregated labor camps with security guards and oppressive rules, and were subject to squalid living conditions, more dangerous and less desirable work assignments than those given to American workers, and threats of both legal and physical harm if they complained about the conditions or decided not to provide labor. Defendant Signal filed a third party complaint alleging that it did not misrepresent the immigration incentives to any of the plaintiffs, and that it was relying on the recruiters and their lawyers to lawfully provide foreign workers.
During discovery, Magistrate Judge Daniel Knowles granted a protective order
in April 2009 prohibiting inquiries into current immigration status, current address of any plaintiff, or employers of any plaintiff after they left Signal. Judge Knowles held that the damage and prejudice that would result from discovery into current immigration status outweighs its probative value, and noted the order was necessary since undocumented litigants would likely drop out of the suit if forced to produce immigration documents. In August 2010, Magistrate Judge Knowles denied a motion
by Signal to compel production of T- and U-visa applications, since it would necessarily result in an inquiry into the plaintiffs' current immigration status.
On November 10, 2010, the district court (Judge Jay Zainey) granted Signal's motion to dismiss plaintiffs' claim for class certification for injunctive relief, and the plaintiffs filed a supplemental motion to certify the class for claims under the TVPA, Civil Rights Act, RICO Act, and KKK Act. Discovery continued for two more years.
On January 3, 2012, Judge Zainey again denied class certification
because not all of the questions of law or fact common to the class members predominated over any questions affecting only individual members. Because claims under the TVPA necessarily involve the victim's perspective, the court concluded these claims were not proper for certification. A determination on forced labor requires the jury to consider an individual's consent or lack thereof and whether the victim was coerced subjectively to provide labor based on the defendant's threats. Even if there were characteristics common to the class, such as immigration status or payment of exorbitant fees, the court found that these characteristics did not substitute for the subjective aspects of why each plaintiff would stay at Signal. Additionally, part of the harms claimed were financial and reputational harms--factors that were uniquely individual in nature.
The plaintiffs' §1981 claim for discriminatory employment practices on the basis of race, national origin, and immigration status was also found to be inappropriate for certification. The plaintiffs acknowledged they would need to forgo emotional distress claims in order to be granted certification. The court noted that the recruitment refunds the plaintiffs sought were not attributable to the workplace discrimination allegedly carried out by Signal. The court was also concerned that plaintiffs' willingness to forgo emotional distress recovery threatened the rights of the class members, since the complaint alleged a significant amount of emotional harm. Given that each individual plaintiff in this case had the potential for a large recovery, the court did not find that class certification would be superior to individual trials.
The court found that the plaintiffs' RICO claims were inappropriate for certification because the predicate acts that need to be proven require individualized proof. The plaintiffs would also be unable to show causation for their RICO injuries without resorting to individual proof of reliance. Finally, the court found the plaintiffs' KKK Act claims to be inappropriate for certification because the kind of coercion needed to show a violation of the 13th Amendment--physical or legal coercion that require the victim to work by law--are not at issue in this case.
Once class certification was denied, it was decided that this case would proceed with the twelve named plaintiffs. Judge Zainey determined the initial trial would consist of five of the named plaintiffs; the plaintiffs would select three and Signal would select two.
On August 12, 2014, District Judge Susie Morgan denied Signal's motion to dismiss
plaintiffs' claims under the FLSA for recruitment fees. The court granted Signal's motion to dismiss claims for inbound travel and visa expenses under the FLSA, presumably because the plaintiffs did not plead that these expenses were for the benefit of Signal.
On January 27, 2015, Judge Morgan issued an order
pertaining to briefing she had required the parties to submit on issues of law under the TVPA. She found that punitive damages were allowed under the TVPA, while the affirmative defense of in pari delicto (arguing that two parties are equally at fault) is not, as it is squarely at odds with the policy behind the TVPA. She also found that psychological and reputational harm were included in the definition of "serious harm" under the TVPA.
A 24-day jury trial concluded on February 18, 2015; the jury awarded the plaintiffs $14,100,000 in damages
. The jury decided in favor of the plaintiffs regarding their claims of discriminatory terms and conditions of employment, retaliation, intentional infliction of emotional distress, and false imprisonment, and in favor of the defendants regarding RICO and fraud (these being subsumed under the other claims).
The jury decided the breach of contract claim in favor of Burnett and Dewan but awarded damages to the plaintiffs against Signal, Burnett Law Offices, and Dewan Consultants. The TVPA claim was divided similarly, with the jury finding in favor of Burnett and Dewan but against Signal, Burnett Law Offices, and Dewan Consultants. The TVPA findings for Burnett and Dewan were reversed by the Court on September 9, 2015.
Post-trial, the parties contested whether the Court should enter a final judgment for the five trial plaintiffs despite the pending claims from the other seven plaintiffs or whether the second trial should take place first. On March 20, 2015, the Court entered final judgment, reasoning that the plaintiffs had “been waiting since the George W. Bush Administration for their day in court,” and that there was no “just reason” to delay a final determination.
Litigation remains ongoing for the remaining seven plaintiffs, and a trial date has yet to be determined. In addition, on August 14, 2015, the plaintiffs filed a motion to receive attorneys’ fees, and on September 23, 2015, Dewan and Burnett filed for appeal. Their motions were referred to the USCA Fifth Circuit. As of January 11, 2016, all of these motions are still pending.
Related cases, also ongoing, include Kambala v. Signal International, LLC
; Equal Employment Opportunity Commission v. Signal International, LLC
; Krishnakutty v. Signal International, LLC
; Devassy v. Signal International, LLC
; Singh v. Signal International, LLC
; Samuel v. Signal International, LLC
; Joseph v. Signal International, LLC
; Meganathan v. Signal International, LLC
; Marimuthu v. Signal International, LLC
; Chakkiyattil v. Signal International, LLC
; and Achari v. Signal International, LLC
.Anna Dimon - 04/09/2015
Allison Hight - 01/11/2016