Opinion
CIVIL ACTION NO: 22-309
2023-05-24
Victor Cagara ORTIGUERRA, et al. v. GRAND ISLE SHIPYARD, LLC, et al.
Kenneth Charles Bordes, Kenneth C. Bordes, Attorney at Law, LLC, New Orleans, LA, Anna Fish, Avery Woodard, Gabrielle Rosen-Harvey, Jack Samuels, Kayla Williams, Kaylen Long, Samuel Thomas Brandao, Tulane Law Clinic, New Orleans, LA, M. Lucia Blacksher Ranier, Tulane Civil Litigation Clinic, New Orleans, LA, Daniel Werner, Southern Poverty Law Center, Immigrant Justice Project, Decatur, GA, for Victor Cagara Ortiguerra, et al. David M. Korn, Mark David Fijman, Stephanie Michelle Poucher, Phelps Dunbar, LLP, New Orleans, LA, for Grand Isle Shipyard, LLC et al.
Kenneth Charles Bordes, Kenneth C. Bordes, Attorney at Law, LLC, New Orleans, LA, Anna Fish, Avery Woodard, Gabrielle Rosen-Harvey, Jack Samuels, Kayla Williams, Kaylen Long, Samuel Thomas Brandao, Tulane Law Clinic, New Orleans, LA, M. Lucia Blacksher Ranier, Tulane Civil Litigation Clinic, New Orleans, LA, Daniel Werner, Southern Poverty Law Center, Immigrant Justice Project, Decatur, GA, for Victor Cagara Ortiguerra, et al. David M. Korn, Mark David Fijman, Stephanie Michelle Poucher, Phelps Dunbar, LLP, New Orleans, LA, for Grand Isle Shipyard, LLC et al.
SECTION: "J" (4)
ORDER AND REASONS KAREN WELLS ROBY, UNITED STATES MAGISTRATE JUDGE
Before the Court is a Motion for Leave to File a Second Amended Class Action Complaint (R. Doc. 54) filed by the Plaintiffs, Victor Cagara Ortiguerra et al. The motion is opposed. R. Doc. 58. The proposed Second Amended Class Action Complaint that Plaintiffs seek leave to file (1) clarifies certain factual allegations Plaintiffs made in their First Amended Class Action Complaint; (2) no longer asserts claims under the Fair Labor Standards Act ("FLSA") minimum wage and overtime provisions, which the Court has stayed pending arbitration; and (3) adds claims that the Defendants' counterclaims constitute retaliation in violation of the FLSA and obstruction in violation of the Trafficking Victims Protection Act ("TVPA").
I. Background
A. Introduction and Procedural History
Plaintiffs are welders and fitters from the Philippines who came to the United States to work on oil rigs. R. Doc. 1. Plaintiffs sued their employers, Grand Isle Shipyard, LLC and GIS, LLC, in this Court, alleging that they were not paid minimum wage nor overtime in violation of the Fair Labor Standards Act ("FLSA"). Id.
On June 8, 2022, Defendants moved to dismiss the matter, arguing that this Court is not the proper venue to hear these claims. R. Doc. 14. Defendants contended that Plaintiffs should be compelled to submit their claims to an arbitration tribunal in the Philippines pursuant to the employment contracts they signed. Id. Further, Defendants contended that Philippine labor laws require standardized employment contracts, and The Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("Convention") governs the arbitration provisions of Plaintiffs' employment contracts. Id.
On June 28, 2022, Plaintiffs amended their complaint to add four new plaintiffs, additional factual allegations, and two additional claims for violations of the Trafficking Victims Protection Act ("TVPA"); 18 U.S.C. § 1589; and of the Fair Housing Act ("FHA"); 42 U.S.C. § 3613. R. Doc. 19. Specifically, the Plaintiffs claim that Defendants subjected them to forced labor because Defendants threatened termination and deportation if the Plaintiffs left the employer-provided housing or communicated with family members. Id. Plaintiffs claim that Defendants segregated and isolated the Filipino workers when assigning housing and COVID-19 quarantine accommodations. Id.
Plaintiffs also allege that, during and after Hurricane Ida in 2021, Defendants refused to allow them and other Filipino workers to evacuate, so they had to remain in a bunkhouse with a damaged roof without clean water and electricity for weeks. Id. Plaintiffs allege that Non-Filipino workers were not required to remain in the bunkhouse and evacuated. Id. The Plaintiffs assert these claims on behalf of others similarly situated as a putative collective action under the FLSA and a putative class action pursuant to Fed. R. Civ. P. 23(b). Id.
Judge Barbier denied the Defendants' first Motion to Dismiss (R. Doc. 14) as moot in light of the First Amended Complaint (R. Doc. 19). See R. Doc. 27. However, on August 2, 2022, Defendants filed a Renewed Motion to Dismiss and Compel Arbitration (R. Doc. 26). On September 26, 2022, Judge Barbier granted that motion as to the FLSA and stayed those claims pending arbitration. However, Judge Barbier denied the motion as to violations of the TVPA and FHA.
B. Instant Motion
Plaintiffs have filed the instant motion seeking leave to file a Second Amended Class Action Complaint. R. Doc. 54. Plaintiffs argue that (1) Plaintiffs' amendments to the Complaint are not the result of undue delay, bad faith, or a dilatory motive; (2) there has not been a repeated failure of Plaintiffs' counsel to cure deficiencies previously; (3) Defendants do not face undue prejudice as a result of the proposed amendments; and (4) amendment of the Complaint would not be futile. Id.
Defendants filed an opposition in response to Plaintiffs instant motion. R. Doc. 58. Defendants argue that Plaintiffs' proposed amendment to include an FLSA is futile. Id. at 3. Specifically, Defendants argue that the Court has already ruled that Plaintiffs' FLSA claims are properly subject to arbitration and are not before this Court. Id. However, Defendants have no objection to Plaintiffs amending their Complaint to clarify certain factual allegations Plaintiffs made in their First Amended Complaint. Id. at 4.
Defendants contend that this clarification would include Plaintiffs' correction of an express claim that two of the Plaintiffs rode out Hurricane Ida in Defendants' employee housing, when in fact, the two individuals were in the Philippines at the time of the Hurricane. Id. Defendants allege that this was information was shown and verified by Homeland Security documents. Id.; See R. Doc. 46, p. 45. Thus, it is Defendants position that to the extent Plaintiffs' Second Amended Complaint contains a claim asserted under the FLSA which would be subject to mandatory arbitration, Plaintiffs' Motion should be denied. Id.
Plaintiffs filed a reply to Defendants' opposition. R. Doc. 64. Plaintiffs argue that in Defendants' opposition, Defendants contend, incorrectly, that the law of this case requires that arbitration be compelled for the FLSA retaliation claim. Id. However, Plaintiffs allege that the provision this Court held was binding, compels arbitration for a "claim and dispute arising from this employment." Id. Plaintiffs argue that their cause of action for the FLSA retaliation claim arose long after Plaintiffs were no longer employed at Defendants' operations. Id. Therefore, because the Court has already determined Plaintiffs' FHA and TVPA claims do not arise out of their employment, and therefore are not subject to the arbitration agreement, Plaintiffs contend that the law of the case requires also that the Court hear Plaintiffs' FLSA retaliation claim. Id.
II. Standard of Review
Generally, Federal Rule of Civil Procedure 15(a) governs the amendment of pleadings before trial. Rule 15(a) allows a party to amend its pleadings "only with the other party's written consent or the court's leave." Fed. R. Civ. P. 15(a)(2). Moreover, the Rule urges that the Court "should freely give leave when justice so requires." Id. In taking this liberal approach, the Rule "reject[s] the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits." Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).
"Rule 15(a) requires a trial court 'to grant leave to amend freely,' and the language of this rule 'evinces a bias in favor of granting leave to amend.' " Jones v. Robinson Prop. Grp., 427 F.3d 987, 994 (5th Cir. 2005) (internal quotations marks omitted) (quoting Lyn-Lea Travel Corp. v. Am. Airlines, 283 F.3d 282, 286 (5th Cir. 2002)). When denying a motion to amend, the court must have a "substantial reason" considering such factors as " 'undue delay, bad faith or dilatory motive on the part of the movant, repeated failures to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party . . . and futility of the amendment.' " Marucci Sports, LLC v. Nat'l Collegiate Athletic Ass'n, 751 F.3d 368, 378 (5th Cir. 2014) (quoting Jones, 427 F.3d at 994).
An amendment is deemed to be futile if it would be dismissed under a Rule 12(b)(6) motion. Id. (citing Briggs v. Miss., 331 F.3d 499, 508 (5th Cir. 2003)). "It is well-established, of course, that the Rule 12(b)(6) analysis necessarily incorporates the federal pleading standard articulated in Bell Atlantic Corp. v. Twombly [550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)]: 'To pass muster under Rule 12(b)(6), [a] complaint must have contained 'enough facts to state a claim to relief that is plausible on its face.' " Int'l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., 818 F.3d 193, 200 (5th Cir. 2016). As such, the Court must accept all well-plead facts as true and view them in the light most favorable to the non-moving party. Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (internal quotation omitted). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Where viability of a claim is at least facially possible, futility does not provide grounds for denying an amendment. Jaso v. The Coca Cola Co., 435 F. App'x 346, 353-54 & n. 6 (5th Cir. 2011).
In conjunction with Rule 15(c), Rule 16(b) provides that "a schedule shall not be modified except on a showing of good cause." Fed. R. Civ. P.16(b). To demonstrate good cause, the movant must show that "the deadlines cannot be reasonably met despite the diligence of the party needing the extensions." S&W Enters., L.L.C. v. SouthTrust Bank of Ala., NA, 315 F.3d 533, 535 (5th Cir. 2003). When determining if the movant provides good cause, the Court considers four factors: "(1) the explanation for the failure to timely move for leave to amend; (2) importance of the amendment; (3) potential prejudice in allowing the amendment; and (4) the availability of a continuance to cure such prejudice." Id. at 536. It is only after demonstrating "good cause to modify the scheduling order will the more liberal standard of Rule 15(a) apply to the . . . [C]ourt's decision to grant or deny leave." Id.
III. Analysis
Here, Plaintiffs have filed the instant motion seeking leave to file a Second Amended Class Action Complaint to (1) clarify certain factual allegations Plaintiffs made in their First Amended Class Action Complaint; (2) no longer assert claims under the FLSA minimum wage and overtime provisions, which the Court has stayed pending arbitration; and (3) add claims that the Defendants' counterclaims constitute retaliation in violation of the FLSA and obstruction in violation of the TVPA.
Defendants argue that they have no objection to Plaintiffs amending their Complaint to clarify certain factual allegations Plaintiffs made in their First Amended Complaint. However, Defendants contend that to the extent Plaintiffs' Second Amended Complaint contains a claim asserted under the FLSA which would be subject to mandatory arbitration, Plaintiffs' Motion should be denied.
Since a scheduling order has not been issued in this case, the Court will proceed with a review under Rule 15(a)'s liberal pleading standards, specifically futility. As an initial matter, the Court notes, and Defendants do not dispute, that that there is no evidence of " 'undue delay, bad faith or dilatory motive on the part of the movant, repeated failures to cure deficiencies by amendments previously allowed, [or] undue prejudice to the opposing party.' " Marucci Sports, 751 F.3d at 378. (quotations omitted). Moreover, "Rule 15(a) requires a trial court 'to grant leave to amend freely,' and the language of this rule 'evinces a bias in favor of granting leave to amend.' " Jones, 427 F.3d at 994 (internal quotations marks omitted) (quoting Lyn-Lea Travel Corp., 283 F.3d at 286).
A. Arbitration Clause
Judge Barbier has recognized in this case that the arbitration clause in Section 28 of the Standard Terms, which requires arbitration of "claims and disputes arising from this employment" is narrow in scope. See Ortiguerra v. Grand Isle Shipyard, LLC, No. 22-309, 630 F.Supp.3d 793, 799-800, 2022 U.S. Dist. LEXIS 173772 at *19-20 (E.D. La. Sep. 23, 2022). Thus, Judge Barbier found that "the parties limited arbitration only to those disputes arising out of Plaintiffs' employment." Id. As such, Judge Barbier found that, because Plaintiffs' FLSA minimum wage and overtime claims were "employment disputes," arbitration would be compelled under this clause. Id. at 800-01, 2022 U.S. Dist. LEXIS 173772 at *5. However, the FHA and TVPA claims, which focused on conditions at the Defendants' bunkhouse between work stints on oil rigs and spars, were not found by Judge Barbier to fall within the narrow scope of the Standard Terms provision, and therefore were not subject to arbitration.
Accordingly, the key distinction between the FLSA wage claims and the FHA and TVPA claims was the location and timing of when the disputes arose. Plaintiffs contend that the FLSA wage claim was based on hours worked while Plaintiffs were laboring on spars and rigs, while the FHA and TVPA claims were based on the Plaintiffs' non-work time at the bunkhouse. R. Doc. 64, p. 2. It is Plaintiffs' position that the FLSA retaliation claim that Plaintiffs seek to assert in the Second Amended Complaint is based entirely on Defendants' October 10, 2022 counterclaims. See R. Doc. 46.
Plaintiffs contend that Defendants' counterclaims for defamation were filed months after the last Plaintiffs had fled and were no longer employed at Defendants' operations. R. Doc. 64, p. 4. Therefore, in the Second Amended Complaint, Plaintiffs seek to allege that the Defendants' counterclaims were an adverse employment action taken against Plaintiffs for post-employment FLSA-protected activities. Id.
The Court notes that it is unclear what Plaintiffs fled and at what time they were no longer employed at Defendants' operations.
Under the law of the case, the Court finds that Plaintiffs' FLSA retaliation claim that they seek to assert in the Second Amended Complaint is not futile under Rule 15(a). First, Plaintiffs contend that the FLSA retaliation claim is based on Defendants' counterclaims filed on October 10, 2022, after the last Plaintiffs fled and were no longer employed by Defendants' operations. Therefore, it appears to the Court that the FLSA retaliation claim does not fall within "claims and disputes arising from this employment" under Section 28 of the Standard Terms requiring arbitration, as determined by Judge Barbier.
B. Merits of a Post-Employment FLSA Retaliation Claim
Second, the Court must address whether certain circumstances are met to assert a FLSA retaliation claim post-employment. At the outset, the Court notes that the issue of a post-employment FLSA retaliation claim is one of first instance in this District. However, while not in this District, courts have found that "retaliation claims made by former employees for post-employment conduct are . . . allowed under relatively narrow circumstances." Porter v. MooreGroup Corp., No. 17-cv-7405 (KAM)(VMS), 2020 U.S. Dist. LEXIS 398, 2020 WL 32434, at *11 (E.D.N.Y. Jan. 2, 2020) (quotation omitted).
The Sixth Circuit Court of Appeals has found that while "an employer is not barred from filing a well-grounded, objectively based action against an employee who has engaged in a protected activity," in some situations, the filing of counterclaims may constitute adverse employment action. Aday v. Westfield Ins. Co., No. 21-3115, 2022 WL 203327 at *13, 2022 U.S. App. LEXIS 2319 at *37-38 (6th Cir. Jan. 24, 2022) (citing Greer-Burger v. Temesi, 116 Ohio St. 3d 324, 2007-Ohio- 6442, 879 N.E.2d 174, 180 (Ohio 2007)); accord Rosania v. Taco Bell of Am., Inc., 303 F. Supp. 2d 878, 888 (N.D. Ohio 2004).
In Aday, the plaintiff filed suit against his employer defendant alleging failure-to-hire age discrimination under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621, et seq., and Ohio law, O.R.C. Chapter 4112, and retaliation under O.R.C. § 4112.02. Aday v. Westfield Ins. Co., No. 21-3115, 2022 WL 203327 at *1, 2022 U.S. App. LEXIS 2319 at *1-2. He also alleged defendants' counterclaims were filed in bad faith, which would entitle him to attorney's fees under 18 U.S.C. § 1836(b)(3)(D). Id. The district court granted defendants' motion for summary judgment disposing of all his claims. Id. Plaintiff then filed a motion to alter or amend the judgment, which the district court denied. Id. The Sixth Circuit ultimately reversed the district court's grant of summary judgment on Plaintiff's age discrimination claims and affirmed the district court's grant of summary judgment on Plaintiff's retaliation claim, finding of no bad faith, and denial of Plaintiff's motion to alter the judgment. Id.
The central question for this Court is whether the counterclaims are filed "not in good faith and instead motivated by retaliation." Kendel v. Loc. 17-A United Food & Com. Workers, 835 F. Supp. 2d 421, 430 (N.D. Ohio 2011). Stated differently, the court must find (1) "the employer acted with retaliatory motive" and (2) that the employer's counterclaims "lack a reasonable basis in fact or law." Lynch v. Studebaker, 2007-Ohio-4014, ¶ 20, 2007 WL 2269470, cause dismissed, 2007-Ohio-5937, ¶ 20, 115 Ohio St. 3d 1480, 875 N.E.2d 964.
Here, Defendants filed counterclaims against Plaintiffs for defamation. See R. Doc. 46. Specifically, Defendants' counterclaim for "defamation/defamation per se" alleges that Plaintiffs made unprivileged false and defamatory statements about Defendants, imputing the commission of crimes including human trafficking and housing discrimination. R. Doc. 46, at 46 ¶54. They argue that, because the allegations were published by filing the class action complaint into the public records, Plaintiffs caused "subsequent re-publication to occur in non-judicial sources." Id. at ¶55.
Defendants also accuse Plaintiffs of acting with malice and in bad faith, with the knowledge that the allegations were false and/or acting with reckless disregard as to the truth of the allegations. Id. at ¶56. Defendants allege that the defamatory statements caused damage by "exposing them to contempt and ridicule and lowering their reputations in the estimation of the business and general community," in addition to resulting pecuniary losses. Id. at ¶57.
First, in utilizing the standard referenced by the Sixth Circuit, the Court finds it plausible that Defendants acted with retaliatory motive when filing the counterclaims for defamation. According to Plaintiffs, the FLSA retaliation claim is based on Defendants' counterclaims filed on October 10, 2022, after the last Plaintiffs fled and were no longer employed by Defendants' operations. Furthermore, the basis of Defendants' counterclaims includes claims that the human trafficking and housing discrimination claims asserted by Plaintiffs in their complaint were defamatory and in bad faith.
Since Defendants filed their counterclaims for defamation in response to Plaintiffs filing their class action complaint into public records, it can be deduced that the filing of the defamation claim is the purported adverse action Defendants took against Plaintiffs. Thus, Defendants' counterclaims can be found to be retaliatory, and the first requirement under the standard referenced by the Sixth Circuit is met. See Lynch v. Studebaker, 2007-Ohio-4014, ¶ 20, 2007 WL 2269470, cause dismissed, 2007-Ohio-5937, ¶ 20, 115 Ohio St. 3d 1480, 875 N.E.2d 964 (finding that the court must find retaliatory motive).
The second requirement is that the Court must find that the employer's counterclaims "lack a reasonable basis in fact or law." Id. Here, Judge Barbier issued an order dismissing Defendants' counterclaims for defamation. See R. Doc. 72. First, Judge Barbier found that Defendants do not provide any information regarding publication of Plaintiffs' statements outside of a judicial proceeding, nor do they provide any facts pointing toward Plaintiffs' malice or intent, as required to state a claim for defamation. Id. at 7.
Second, Judge Barbier found that Defendants must wait until the conclusion of the instant litigation, which will most likely determine the truth or falsity of the statements, before bringing a claim for defamation or defamation per se based on statements Plaintiffs made in their pleadings. Id. at 7-8. Therefore, since Judge Barbier has dismissed Defendants' allegations because they were both conclusory and not yet ripe for consideration, it can be ascertained that the counterclaims for defamation lack a reasonable basis in law or fact. Id. at 7.
As such, since the Plaintiffs' FLSA retaliation claim is a post-employment claim that has merit and does not arise from Plaintiffs' employment with Defendants, it is not a claim that requires arbitration. The claim arises from a pleading in this case and has no connection to their prior employment with Defendants. Thus, the FLSA retaliation claim is not deemed futile and can proceed forward.
IV. Conclusion
IT IS ORDERED that the Plaintiffs' Motion for Leave to File a Second Amended Class Action Complaint (R. Doc. 54) is GRANTED.