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, 16 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 Jan. 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 was based in Pascagoula, Mississippi and was in the business of providing repairs to offshore oil rigs in the Gulf Coast region. One plaintiff worked in Pascagoula; the remaining plaintiffs worked at Signal's Orange, Texas site. The complaint alleged 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 ($1050 per month) to live in racially segregated labor camps, 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 amended complaint, filed on behalf of 21 individuals, asserted 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 Kux 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 were represented by the Equal Justice Center and the Transnational Worker Rights Clinic.
In July 2014, U.S. 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 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.
Trial was set for Dec. 2015. However, 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, with a liquidation trust for distribution of settlement proceeds, 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,
Kambala, the parties are updating the court every 120 days as to the status of the bankruptcy proceedings. The parties' most recently filed report (Mar. 6, 2018) noted that 20 of the 21 plaintiffs had reached a settlement with the Burnett (immigration attorney) defendants, and the remaining one plaintiff could not be located. Plaintiffs requested the stay remain in effect as to the Signal defendants and Dewan (recruiter) defendants.
The stay remains effective in light of Signal's ongoing bankruptcy case.
Anna Dimon - 05/14/2015
Ava Morgenstern - 03/14/2018
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