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, ten Indian guestworkers filed a 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 at its Orange, Texas site. Signal was based in Pascagoula, Mississippi and was in the business of providing repairs to offshore oil rigs in the Gulf Coast region. 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.
Plaintiffs asserted claims under the Trafficking Victims Protection Act (18 U.S.C. §1589 (forced labor) and 18 U.S.C. §1590 (trafficking)), 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 were represented by private law firms.
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. Additionally, the plaintiffs in this case sued based on events at Signal's Orange, Texas site, whereas plaintiffs in cases pending in the Eastern District of Louisiana sued based on events at Signal's Pascagoula, Mississippi site. Magistrate Judge Hawthorn also issued a report and recommendation on July 30, 2014, denying Signal's motion to dismiss, holding that plaintiffs had pleaded enough factual content to draw the reasonable inference that the alleged pendent state law claims occurred in Texas, so that the Court had personal jurisdiction over defendants for alleged tortious acts committed there. Judge Crone adopted Magistrate Judge Hawthorn's report and recommendation on Sept. 9, 2014.
On Sept. 16, 2014, plaintiffs filed an amended complaint to allege that the Burnett (immigration attorney) defendants had violated the Ku Klux Klan Act and state tort law. On Feb. 27, 2015, Magistrate Judge Hawthorn recommended denying the Burnett defendants' motion to dismiss, finding that plaintiffs had validly pleaded the new claims. Judge Crone adopted this report and recommendation on Mar. 23, 2015.
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.
While discovery was underway, the Court stayed the case in July 2015 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,
Marimuthu, the parties are updating the court every 120 days as to the status of the bankruptcy proceedings. As of the parties' most recent Mar. 6, 2018 update to the Court, this settlement process remains ongoing.
The case is stayed pending defendant Signal's bankruptcy proceedings.
Anna Dimon - 05/15/2015
Ava Morgenstern - 03/14/2018
compress summary
