Opinion
1:21-cv-02297 (PGG) (SDA)
05-12-2022
Young Sook Cho, Plaintiff, v. Eun Sook Chu, et al., Defendants.
HONORABLE PAUL G. GARDEPHE, UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION
STEWART D. AARON, UNITED STATES MAGISTRATE JUDGE
Pending before the Court is a motion by Defendants DYC Corp., 50 West Eunsook C.K. Corp., 17 Harwood, LLC, Pee Dee Corp. and Pee Dee II Corp. (the “Entity Defendants”), pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the claims asserted against them in the Second Amended Complaint (“SAC”) by Plaintiff Young Sook Cho (“Plaintiff” or “Cho”). (Not. of Mot., ECF No. 39.) For the reasons set forth below, I respectfully recommend that the Entity Defendants' motion be GRANTED.
For purposes of this motion to dismiss, the Court assumes that the well-pleaded allegations of the SAC are true. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (when “well-pleaded factual allegations” are present, “a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.”).
Cho, who has a fifth-grade education, moved to the United States from South Korea in 1999 based on promises made by Eun Sook Chu and Don Yun Chu (together, the “Chus” or the “Individual Defendants”) that they would give her a place to live and pay her to work as their domestic worker. (See SAC ¶¶ 12-15.) From 1999 until February 15, 2021, the Chus required Cho to work 16 hours a day and over 100 hours per week. (See id. ¶ 17.) From 1999 until 2001, Cho was paid $1,400 per month regardless of how many hours she actually worked. (See id. ¶ 35.) Thereafter, for nearly 20 years, the Chus paid Cho nothing at all for her work. (See id.)
Don Yun Chu died in 2018 and his Estate is named as a Defendant in this action. (See SAC ¶ 5.)
During her employment period, Cho routinely was verbally and physically harassed and assaulted by Ms. Chu. (SAC ¶ 47.) Ms. Chu routinely kicked her, slapped her in the face, kicked her or pinched her arm. (Id.) Cho often was afraid of Ms. Chu and lived in constant fear. (Id.) Because she was working constantly, Cho did not have any free time for herself during her employment. (Id. ¶ 52.) Cho was not given a cell phone, was not allowed to use the home phone and did not have any money because the Chus refused to pay her. (Id.) When Cho was 80, and Ms. Chu deemed Cho too old to work grueling hours, Ms. Chu obtained a passport for Cho, bought her a one-way ticket back to South Korea, and sent Cho back to a country where she no longer had any friends or family. (See id. ¶¶ 55-57.)
According to the SAC, because Cho provided unpaid labor at their home, the Chus were able to spend their time growing their business, acquiring properties and operating restaurants. (SAC ¶ 59.) Each of the Entity Defendants was owned by the Chus. (Id. ¶¶ 6-10, 60.) The Chus “ran their restaurants” through the Entity Defendants. (Id. ¶ 60.)
The SAC asserts claims against the Individual Defendants, i.e., the Chus, under the Fair Labor Standards Act, the New York Labor Law and the Trafficking Victims Protection Act (“TVPA”). (SAC ¶¶ 63-111.) The SAC asserts a claim against the Entity Defendants only under the TVPRA. (Id. ¶¶ 99-111.) The Entity Defendants now move to dismiss the TVPRA claim, and thus the SAC, against them. (See Not. of Mot.)
Congress first enacted the TVPA in 2000. See Pub. L. No. 106-386, 114 Stat. 1464 (2000). In 2003, Congress amended and reauthorized the Act through the Trafficking Victims Protection Reauthorization Act (“TVPRA”), which established a civil remedy for victims of various forms of trafficking violations. See Pub. L. No. 108-193, 117 Stat. 2875 (2003). In that amendment, Congress also “expanded the TVPRA's civil remedy provision, 18 U.S.C. § 1595, to allow trafficking victims to recover damages and reasonable attorneys' fees from perpetrators and established a ‘financial beneficiary prong' which allows victims to recover similar relief from those who knowingly benefit, financially or otherwise, from a violation of the TVPRA.” H.G. v. Inter-Cont'l Hotels Corp., 489 F.Supp.3d 697, 703-04 (E.D. Mich. 2020). Thus, the Court refers to the current version of the Act as the TVPRA.
The Individual Defendants have not moved to dismiss the SAC, but also have yet to file an Answer.
LEGAL STANDARDS
I. Motion To Dismiss Standards
To survive a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), a complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 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.” Id. “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. The Court “must accept as true all of the factual allegations contained in the complaint[,]” but “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citation omitted). Further, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id.; see also Rothstein v. UBS AG, 708 F.3d 82, 94 (2d Cir. 2013) (“we are not required to credit conclusory allegations or legal conclusions couched as factual allegations.”) (citing Twombly, 550 U.S. at 555, 557). Thus, when deciding a motion to dismiss under Rule 12(b)(6), the Court need not credit speculative inferences, “bald assertions and conclusions of law.” Spool v. World Child Int'l Adoption Agency, 520 F.3d 178, 183 (2d Cir. 2008) (internal quotation marks omitted).
II. TVPRA Standards
The TVPRA's Forced Labor statute prohibits anyone from knowingly obtaining the labor or services of a person:
(1) by means of force, threats of force, physical restraint, or threats of physical restraint to that person or another person;
(2) by means of serious harm or threats of serious harm to that person or another person;
(3) by means of the abuse or threatened abuse of law or legal process; or
(4) by means of any scheme, plan, or pattern intended to cause the person to believe that, if that person did not perform such labor or services, that person or another person would suffer serious harm or physical restraint.18 U.S.C. § 1589(a). The statute further prohibits “knowingly benefit[ing], financially or by receiving anything of value, from participation in a venture which has engaged in the providing or obtaining of labor or services by any of the means described in subsection (a), knowing or in reckless disregard of the fact that the venture has engaged in the providing or obtaining of labor or services by any of such means.” 18 U.S.C. § 1589(b).
A claim under the financial beneficiary prong of the TVPRA has three elements: (1) that the defendant “knowingly benefited or received anything of value” (2) “from participation in a venture,” (3) “which [the beneficiary] knew or should have known has engaged” in in an act in violation of §§ 1581 or 1589. 18 U.S.C. § 1595(a). See Chen v. Cai, No. 19-CV-05387 (PMH), 2022 WL 917575, at *4 (S.D.N.Y. Mar. 28, 2022); see also H.G. v. Inter-Cont'l Hotels Corp., 489 F.Supp.3d 697, 704 (E.D. Mich. 2020). “Therefore, there are two knowledge components - (1) knowledge of the benefit and (2) knowledge or reckless disregard of the means by which the venture obtained the labor.” Bucco v. W. Iowa Tech Cmty. Coll., 555 F.Supp.3d 628, 641 (N.D. Iowa 2021)
The statute provides a person victimized by a violation of 18 U.S.C. § 1589 a private right of action for damages. See 18 U.S.C. § 1595(a).
DISCUSSION
The Entity Defendants argue that Plaintiff's claims against them should be dismissed because the SAC fails to plausibly allege that the Entity Defendants participated in a venture or received anything of value. (Def.'s Mem., ECF No. 40, at 5-9.) Plaintiff contends that she has alleged that the Entity Defendants were in a “venture” with the Chus and that the Entity Defendants received something of value-i.e., “the Chus' additional time and money that was not spent as a result of their forced labor of Cho.” (Pl.'s Opp. Mem., ECF No. 42, at 5.) The Court considers each of these elements in turn.
I. Benefit Or Receipt Of Value
Plaintiff does not allege that she herself worked for, and therefore directly provided a benefit to, any of the Entity Defendants. Rather, Plaintiff's allegations are far more attenuated. Plaintiff alleges that the Entity Defendants benefited from Cho's unpaid labor to the Chu's because, as a result of Cho's labor, “the Chus were able to spend their time growing their business, acquiring properties, and operating restaurants.” (SAC ¶ 60.) Plaintiff argues that “anything of value” should be construed broadly and, thus, the allegation is sufficient. (Pl.'s Opp. Mem. at 10.) However, there are no facts pled to suggest that the Chus actually spent the additional time and money they had due to Cho's forced labor on any one of the five Entity Defendants, as opposed to spending the time and money on themselves personally, or on others.
Thus, even assuming that the Chu's investment of time and money could be considered a benefit or something of value, the SAC is deficient because Plaintiff does not plead sufficient factual material to move her allegations about any benefit or value received by any of the Entity Defendants beyond speculation. See Iqbal, 556 U.S. at 686 (“The Federal Rules do not require courts to credit a complaint's conclusory statements without reference to its factual context.”).
II. Participation In A Venture
The Entity Defendants argue that Plaintiff has not alleged that they participated in a forced labor venture because she has not alleged any overt acts taken by the Entity Defendants with respect to Plaintiff. (Defs.' Mem. at 6.) Because “venture” is not defined for purposes of § 1589, the Entity Defendants rely on cases applying the definition of venture from § 1591(e)(6), which applies to the criminal offense of sex trafficking in § 1591(a). However, the Court agrees with Plaintiff (see Pl.'s Opp. Mem. at 5-9) that actual participation in the forced labor is not required for civil liability under § 1595. See, e.g., A.B. v. Marriott Int'l, Inc., 455 F.Supp.3d 171, 188 (E.D. Pa. 2020); see also S.Y. v. Marriott Int'l, Inc., No. 20-CV-00627 (JES) (MRM), 2021 WL 2003103, at *5 (M.D. Fla. May 19, 2021) (plaintiffs' failure to allege actual participation “not fatal to its section 1595 claim under the TVPRA.”). Nonetheless, Plaintiff still must allege facts to show that the Entity Defendants “participated” in a venture. Here, Plaintiff does not allege any action taken by the Entity Defendants. All of her allegations pertain to actions taken by the Chus. The fact that the Chus owned and are associated with the Entity Defendants does not establish participation by the Entity Defendants. Accord Chen, 2022 WL 917575, at *5 n.4 (assuming plaintiff's theory of labor or services was housework, babysitting, grocery shopping, cooking and acting as a sex slave for individual defendant, “she does not explain how [corporate entities] ‘participated' in such a venture”). Moreover, Plaintiff's conclusory allegations that the Entity Defendants and the Chus “participat[ed] in a venture involving the forced labor of Cho” or “were a venture for purposes of the [TVPRA]” (SAC ¶¶ 61, 109) are insufficient to state a claim against them.
Section 1591(e)(6) defines venture as “any group of two or more individuals associated in fact, whether or not a legal entity.” 18 U.S.C. § 1591(e)(6).
For example, courts have found allegations that hotel companies rented rooms to individuals they knew or should have known to be involved in sex trafficking sufficient to meet the participation element. See S.Y., 2021 WL 2003103, at *4-5 (citing cases).
CONCLUSION
For the foregoing reasons, I respectfully recommend that the Entity Defendants' motion to dismiss be GRANTED and that the SAC be dismissed as to them.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days when service is made under Fed.R.Civ.P. 5(b)(2)(C), (D) or (F)). A party may respond to another party's objections within fourteen days after being served with a copy.
Fed. R. Civ. P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Gardephe.
THE FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).