On May 21, 2013, 33 Indian guest workers filed a lawsuit in the United States District Court for the Eastern District of Texas for harm suffered as a result of an allegedly fraudulent and coercive employment recruitment scheme. Plaintiffs filed this suit after District Judge Jay Zainey denied class certification on January 3, 2012 in a related case, IM-LA-0010.

Plaintiffs were allegedly brought into the United States to provide labor and services to Defendant Signal International at its Orange, Texas site. Signal is based in Pascagoula, Mississippi and is in the business of providing repairs to offshore oil rigs in the Gulf Coast region. The complaint alleges that Plaintiffs paid Defendant Signal's 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, Plaintiffs were forced to pay additional fees to live in racially segregated labor camps ($1050 per month), and were subject to squalid living conditions and threats of both legal and physical harm if they complained about the conditions or decided not to provide labor. The plaintiffs also alleged that the fear and coercion plaintiffs they experienced were exacerbated upon learning of abuses occurring at Signal's Pascagoula, Mississippi site.

The amended complaint, filed on behalf of 47 individuals, asserts 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), the Ku Klux Klan Act of 1871 (42 U.S.C. §1985), the Thirteenth Amendment, as well as claims of fraud, negligent misrepresentation, and breach of contract. Plaintiffs are represented a private law firm.

In February 2014, United States Magistrate Judge Zack Hawthorn denied Signal's motion to transfer this case to the Eastern District of Louisiana. The court reasoned that the plaintiffs in this case only overlap with the David case, IM-LA-0010, insofar as their FLSA claims in the David case are concerned. Additionally, the plaintiffs in this case are suing based on events at Signal's Orange, Texas site, whereas plaintiffs in cases pending in the Eastern District of Louisiana are suing based on events at Signal's Pascagoula, Mississippi site.

In October 2014, Magistrate Judge Hawthorn granted Signal's motion to compel production of Plaintiffs' T and U visas and applications for such visas. Although a similar motion had already been denied for the cases pending in the Eastern District of Louisiana, the court found that the materials' relevance outweighed any potential in terrorem effect. Plaintiffs did not comply with this order until March 4, 2015, but the court denied Signal's motion for sanctions, saying its lack of diligence in pursuing the documents renders it ineligible for relief.

In December 2014, Magistrate Judge Hawthorn severed and transferred Signal's cross-claims against Malvern Burnett, the Law Office of Malvern Burnett, and Gulf Coast Immigration Law Center to the Eastern District of Louisiana. In January 2015, Magistrate Judge Hawthorn also granted a motion to dismiss claims against an individual without prejudice, following his filing for bankruptcy protection. All other defendants are still involved in the litigation.

In February 2015, Magistrate Judge Hawthorn issued an order regarding the proper use of expert testimony. He excluded an expert retained by Signal to opine on Signal's safety practices, finding the expert was unqualified to give such opinion because he had not adequately compared Signal's practices to others in the industry. Magistrate Judge Hawthorn also excluded opinions that attempted to interfere with the jury's role, such as the one that said Signal did not force or coerce the workers into staying in the man camp. He narrowed the opinions of experts on both sides regarding human trafficking, noting they could only speak generally on the matter and not on whether there was or was not human trafficking in this case.

In March 2015, the court held that Texas laws should apply in the breach of contract and fraud claims, because it did not find that true conflict existed between Texas and other jurisdiction.

Also in March 2015, the magistrate judge recommended denying defendant Wilks's motion to dismiss filed in August. The reason was that the motion was untimely and lacked merit because the plaintiff's complaint offered sufficient facts that Wilks was in control of J&M, which was involved in the recruitment of plaintiffs. And in April 2016, the district judge adopted this recommendation to deny Wilks's motion to dismiss.

In July 2015, the court stayed the case after Signal filed for bankruptcy. In re Signal Int’l, Inc, et al., No. 15-11498 (Bankr. D. Del. July 12, 2015). As a part of the bankruptcy filings, the plaintiffs entered into a plan support agreement (PSA) which contemplated a settlement of the claims of this lawsuit against Signal entities through a consensual chapter 11 plan proposed by Signal. The PSA became effective on December 14, 2015. As of November 2016, the stay remains effective in light of Signal's ongoing bankruptcy case.

Anna Dimon - 05/14/2015
Soojin Cha - 11/20/2016


compress summary