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S.D.N.Y.: Undocumented Immigrant FLSA Plaintiffs Failed To Plead Civil RICO Claim Based On Defendants’ Wage Violations
Nichols v. Mahoney
In this case, the Plaintiffs pled Civil RICO in addition to typical FLSA violations, and other relatively unique claims under the Sherman Act and the Donnelly Act. Specifically, the Plaintiffs claimed that the Defendants regularly paid substandard wages, and the practice resulted from their employment of undocumented immigrants in violation of federal laws. In dismissing the portion of Plaintiffs’ claims pertaining to Civil RICO, the Court found that the Plaintiffs had not properly alleged proximate cause of Defendants’ pattern of criminal activity and their damages due to wage violations.
“In evaluating whether the plaintiffs have adequately alleged proximate cause in this case, the Court focuses on the proposed amended complaint, because it adequately alleges the commission of a pattern of racketeering activity, to wit: two or more violations of the harboring statute. The question to be answered is whether the plaintiffs’ injury-the depression of their wages-was proximately cause by defendants’ hiding their illegal alien employees from the Government. The answer to that question is no.
There is no direct relationship between the harboring of illegal aliens and the plaintiffs’ depressed wages. Indeed, plaintiffs do not so allege. Rather, they contend that they were paid below-market wages because the defendants knowingly hired undocumented workers, who would and did work for wages that were lower than the prevailing rate. That act-the knowing hiring of illegal aliens-is specifically alleged to be the proximate cause of plaintiffs’ lower wages. (Am.Compl.¶¶ 45, 94, 109, 119, 128, 132.) As explained above, that act is not a RICO predicate act.
If plaintiffs had managed to plead that defendants knowingly hired 10 or more illegal aliens who defendants knew had been “brought into” the country-that is, if plaintiffs had successfully pled a violation of section 274(a)(3), which is a RICO predicate act-their proposed amended complaint might well plead proximate cause, as the Second Circuit found in analogous circumstances in Commercial Cleaning, 271 F.3d at 381-385. Of course, Commercial Cleaning is a pre-Anza case, so if plaintiffs had managed to plead that defendants knew some of their illegal employees had been “brought into” the country by others, this Court would have to consider whether Commercial Cleaning remains good law on this point. But plaintiffs’ failure to allege the requisite specific facts moots any such inquiry.
Because hiring illegal aliens without knowing they were “brought in” is not racketeering activity, plaintiffs’ allegation that hiring illegal aliens depressed wages-a correlation long recognized by courts, including the Supreme Court, see, e.g., DeCanas v. Bica, 424 U.S. 351, 356-357 (1976)-does not satisfy the requirement that plaintiffs plead injury caused by a pattern of racketeering activity. To clear that hurdle, plaintiffs need to plead facts tending to show that defendants’ harboring of illegal aliens proximately caused the drop in their wages. This they have not done.
Reading the plaintiffs’ proposed amended complaint in the most favorable light, they do allege that the defendants were able to keep their “scheme” to employ illegal aliens going by hiding the aliens from the Government-by “harboring” them. (See Am. Compl. ¶¶ 25-45, 64, 67-73, 76.) But the fact that harboring may have allowed the alleged injury to persist for a longer period does not mean that harboring caused the injury.
Furthermore, that the only allegation in the amended complaint connecting harboring and wages concerns the duration of the harm rather than its cause underscores another critical point. “The key reasons for requiring direct causation include avoiding unworkable difficulties in ascertaining what amount of the plaintiff’s injury was caused by the defendant’s wrongful action as opposed to other external factors.” First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 770 (2d Cir.1994). Any effort to quantify how much of plaintiffs’ depressed wages was caused by the harboring of illegal aliens, as opposed to hiring them or some other factor at work in the marketplace, would be even more inherently speculative than the proceeding anticipated (and condemned) by the Supreme Court in Anza.
Finally, because harboring is a direct affront to the Government, there is no need for private attorneys general like plaintiffs to bring damages actions in order to redress it. Just as the State of New York could be expected to pursue a corporation that was failing to pay state income tax, the Government can be expected to vindicate the laws against hiding aliens from the Government. This is not to say that proximate cause will be lacking every time a governmental entity has an interest in vindicating its laws. Indeed, any such result would effectively wipe the civil RICO statute off the books, since every RICO violation is predicated on a violation of some federal criminal statute-a violation that the United States, a “victim” whenever its laws are violated, has an incentive to remedy. However, in this case, where there is no direct or obvious connection between the racketeering activity alleged (harboring) and the harm to the plaintiffs (depressed wages), the fact that the direct victim of the harboring has the incentive to redress the harm (by capturing and deporting the aliens and by prosecuting the harboring employer) fatally undermines any contention that these plaintiffs have suffered injury by virtue of the alleged racketeering activity.
The amended complaint thus fails to state a claim under 18 U.S.C. § 1962(c). Because plaintiffs fails to plead any RICO violation, they also fail to plead any violation of 18 U.S.C. § 1962(d), the RICO conspiracy statute. All three RICO counts-Counts I, II and III-are dismissed.”
David v. Signal Intern., LLC
Among their claims in this case, the undocumented immigrant Plaintiffs alleged various FLSA violations. The Defendants moved to compel information pertaining to Plaintiffs’ immigration status and the Court granted Plaintiffs request for a protective order, citing the in terrorem effect such a disclosures would likely have. The Court cited the other Courts who had held the same way and discussed the issue at great length.
The Defendants addressed the relevance of the information sought and contended that plaintiffs must demonstrate that the issues are not relevant to any claim or issue in the case, including plaintiffs’ civil rights or tort claims. Plaintiffs contended that the damage and prejudice which would result if discovery into their current immigration status were permitted far outweighs its probative value with respect to their discrimination and tort claims.
In discussing the issue the Court stated, “[t]his Court finds plaintiffs’ argument persuasive. Even if current immigration status were relevant to plaintiffs race/national origin discrimination, contract and tort claims, discovery of such information would have an intimidating effect on an employee’s willingness to assert his workplace rights. Plaintiffs’ claims and allegations of fact supporting same in the case at bar find no parallel in reported federal decisions reviewed by the undersigned. See, e.g., Rivera v. NIBCO, Inc., 364 F.3d 1057, 1065 (9th Cir.2004) (“[W]ere we to direct district courts to grant discovery requests for information related to immigration status in every case involving national origin discrimination under Title VII, countless acts of illegal and reprehensible conduct would go unreported.”).
As stated above, this is also an action for unpaid wages and overtime for work actually performed for Signal. Courts have recognized the in terrorem effect of inquiring into a party’s immigration status and authorization to work in this country when irrelevant to any material claim because it presents a “danger of intimidation [that] would inhibit plaintiffs in pursuing their rights.” Here, plaintiffs’ current immigration status is a collateral issue. The protective order becomes necessary as “[i]t is entirely likely that any undocumented [litigant] forced to produce documents related to his or her immigration status will withdraw from the suit rather than produce such documents and face … potential deportation.”
Liu v. Donna Karan International, Inc., 207 F.Supp.2d 191, 193 (S.D.N.Y.2002) (citations omitted).
Topo v. Dhir, 210 F.R.D. 76, 78 (S.D.N.Y.2002) (quoting Flores v. Albertsons Inc., 2002 WL 1163623, *6 (C. D.Cal. Apr. 9, 2002)); see also EEOC v. First Wireless Group, Inc., 225 F.R.D. 404 (E.D.N.Y.2004) (good cause shown for protective order where disclosure of immigration status would cause embarrassment, potential criminal charges, or deportation if status was discovered to be illegal).”
Trejos v. Edita’s Bar and Restaurant, Inc.
In this case, the Defendant’s moved to compel Plaintiffs to answer questions at deposition regarding their immigration status. The primary issue substantively before the Court was whether Plaintiffs were employees entitled to FLSA coverage or independent contactors, and therefore, outside of the FLSA’s coverage. Initially, the Court granted Defendant’s Motion to Compel this testimony. On Plaintiffs’ Motion for Reconsideration however, the Court reversed itself, vacating its prior Order and, following well-settled law found this information is undiscoverable and irrelevant stating:
“Plaintiffs argue that the questions are not relevant to the issue of whether plaintiffs were employees of defendants for purposes of the Fair Labor Standards Act (the “FLSA”), and that the questions should be precluded in any event because of their in terrorem effect. Defendants respond that the information is necessary for a determination of whether certain plaintiffs were defendants’ employees or, as defendants allege, independent contractors under the FLSA.
The information-whether plaintiffs had green cards or working papers-is not relevant to the question of whether plaintiffs are employees under the FLSA. First, as even defendants acknowledge in their opposition to plaintiffs’ motion, federal courts have consistently recognized that even undocumented workers are entitled to the FLSA’s protections. See, e.g., Flores v. Amignon, 233 F.Supp.2d 462, 463 (E.D.N.Y.2002) (collecting cases). Second, in a case where, as here, defendants contend that plaintiffs were independent contractors and not employees subject to the FLSA, the Second Circuit applied an “economic reality” test, which considers the following factors:
(1) the degree of control exercised by the employer over the workers, (2) the workers’ opportunity for profit or loss and their investment in the business, (3) the degree of skill and independent initiative required to perform the work, (4) the permanence or duration of the working relationship, and (5) the extent to which the work is an integral part of the employer’s business.
Brock v. Superior Care, Inc., 840 F.2d 1054, 1058-59 (2d Cir.1988); see also Schwind v. EW & Assocs., Inc., 357 F.Supp.2d 691, 700-02 (S.D.N.Y.2005) (applying Brock and concluding that plaintiff was an employee, not an independent contractor); Lee v. ABC Carpet & Home, 186 F.Supp.2d 447, 453-57 (S.D.N.Y.2002) (applying the five factors outlined in Brock to determine whether a worker was an employee or an independent contractor under the FLSA); McGuiggan v. CPC Int’l, Inc., 84 F.Supp.2d 470, 479 (S.D.N.Y.2000). Although these factors are not exclusive, and a court must consider the totality of the circumstances, Brock, 840 F.2d at 1059, whether or not plaintiffs had green cards or working papers is simply not relevant when applying the Brock test to determine whether plaintiffs are employees under the FLSA. Indeed, defendants are unable to cite a single case in which a court held that a plaintiff’s immigration status, or whether the plaintiff possessed a green card or working papers, was relevant to the viability of the plaintiff’s FLSA claim.
Although defendants argue in their opposition that the discovery they seek will establish that plaintiffs sought to avoid employee status, the subjective intent of the parties in forming the employment relationship has little to no significance in determining whether a plaintiff is an independent contractor or employee. Schwind, 357 F.Supp.2d at 702 (finding that plaintiff was an employee for purposes of the FLSA, even though both parties treated plaintiff as an independent contractor). See also Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 302, 105 S.Ct. 1953, 1962 (1985) (concluding that workers may be deemed employees under the FLSA, even though the workers considered themselves volunteers); Brock, 840 F.2d at 1059 (noting that an “employer’s self-serving label of workers as independent contractors is not controlling”). One district court explicitly rejected an argument similar to the one defendants make here, noting that “neither the subjective intent of the worker in forming the employment relationship nor the label affixed by the putative employer controls the question whether a worker is an employee under the FLSA.” Montoya v. S. C.C.P. Painting Contractors, Inc., 589 F.Supp.2d 569, 577-78 (D.Md.2008) (citing Tony & Susan Alamo Found., 471 U.S. 290, 105 S.Ct.1953). While defendants correctly point out that Montoya involved a motion for summary judgment and not a discovery motion, both Flores and Liu v. Donna Karan Int’l, Inc., 207 F.Supp.2d 191, 192 (S.D.N.Y.2002), held that discovery of plaintiff’s immigration status should be precluded. I find these authorities persuasive and conclude that defendants’ contention of their need for the information is without merit.”
Recognizing the intimating effect such disclosures could and do have on FLSA Plaintiffs, the Court further noted: “even if the information sought were somehow relevant, the in terrorem effect of the questions defendants seek to press outweighs the need for disclosure. See Flores, 233 F.Supp.2d at 464-65; Liu, 207 F.Supp.2d at 192-93. Indeed, despite my efforts to permit only narrow discovery of whether plaintiffs had green cards or working papers, defendants have attempted to obtain information concerning plaintiffs’ immigration status through other questions. See Pl. Letter dated Feb. 17, 2009 p. 4 (citing the deposition of plaintiff Diana Trejos at 56).
For these reasons, plaintiffs’ motion for reconsideration is granted. Defendants are precluded from asking plaintiffs whether they had green cards or working papers at all future depositions.”