This case is part of the series of
Signal International cases. It is stayed during defendant's bankruptcy and settlement proceedings.
On Aug. 7, 2013, four Indian guestworkers filed this lawsuit in the U.S. 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,
David v. Signal International.
Plaintiffs were allegedly brought into the United States to provide labor and services to defendant Signal International. Signal is based in Pascagoula, Mississippi and is in the business of providing repairs to offshore oil rigs in the Gulf Coast region. Three plaintiffs worked at Signal's site in Orange, Texas and one plaintiff worked in Pascagoula. The complaint alleged that plaintiffs paid Signal's recruiters as much as $20,000 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.
Plaintiffs asserted claims under the Trafficking Victims Protection Reauthorization Act (18 U.S.C. §1584 et seq, the Racketeer Influenced Corrupt Organizations Act (18 U.S.C. §1962, the Declaratory Judgment Act (28 U.S.C. §2201), as well as claims of fraud, negligent misrepresentation, and breach of contract. Plaintiffs were represented by a private law firm.
In July 2014, Magistrate Judge Zack Hawthorn denied Signal's motion to transfer this case to the Eastern District of Louisiana. The plaintiffs in this case only overlapped with the
David case insofar as their FLSA claims in the
David case were concerned. Magistrate Judge Hawthorn found the similarity in issues in the cases was not substantial enough to warrant transfer because the current venue was otherwise proper.
In June 2015, Magistrate Judge Hawthorn severed and transferred Signal's cross-claims against co-defendants (immigration attorneys, recruiters, and labor brokers) to the Eastern District of Louisiana, finding that there was significant overlap between Signal's crossclaims in this case and in
David.
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 Dec. 14, 2015.
In Dec. 2015, in the
related EEOC case, the EEOC announced that the parties had reached a
settlement for all cases, approved by the bankruptcy court. Signal would pay $5 million to 476 guestworkers through a claims process. All aggrieved individuals included in the litigation could receive relief in spite of the bankruptcy proceedings. Signal's CEO also issued an apology for its conduct.
In this case,
Meganathan, the Court asked the parties for updates every 120 days as to the status of the bankruptcy proceedings. However, the latest is from Nov. 8, 2016 (simply stating that the proceedings remain ongoing); no updates have been filed since then.
The stay remains effective in light of Signal's ongoing bankruptcy case.
Anna Dimon - 05/14/2015
Soojin Cha - 11/20/2016
Ava Morgenstern - 12/02/2017
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