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awarding punitive damages of $176,532.48, in a 2:1 ratio with compensatory damages, to 13 workers from Mexico who were recruited under false promises, worked for little to no pay, and were subjected to deplorable living conditions for ranges of 6 to 32 days, in manners very similar to the Plaintiffs in this case
Summary of this case from Wang v. Gold Mantis Constr. Decoration (CNMI), LLCOpinion
No. 2:18-cv-133
2019-07-31
Julio Medina ARREGUIN, et al. Plaintiffs, v. Manuel SANCHEZ, Defendant.
Lisa J. Krisher, Solimar Mercado-Spencer, Georgia Legal Services, Atlanta, GA, for Plaintiffs.
Lisa J. Krisher, Solimar Mercado-Spencer, Georgia Legal Services, Atlanta, GA, for Plaintiffs.
ORDER
HON. LISA GODBEY WOOD, JUDGE
Before the Court is an Amended Motion for Default Judgment, dkt. no. 11, filed by Plaintiffs Julio Medina Arreguin, Juan Arellano Malagon, Eduardo Flores Maydon, Jose Ernesto Gomez Lopez, Maximino Juarez Sanchez, Jose Rolando Lopez Gomez, Cruz Luna Villela, Agustin Oviedo Olvera, Luis Patino Mendiola, Esgar Perez Flores, Asael Rodriquez Juarez, Miguel Sanchez Cervantes, Mario Silguero Reyes. Because Defendant Manuel Sanchez has been duly served with notice of this case and Plaintiffs' Motion but has failed to respond or appear at all in this case, Plaintiffs' Motion is ripe for review. For the following reasons, in accordance with the Court's oral Order during the Default Judgment Hearing on July 25, 2019, Plaintiffs' Motion is GRANTED.
Mr. Sanchez was given notice of the July 25, 2019 Default Judgment Hearing. He failed to appear.
BACKGROUND
Plaintiffs in this case are immigrant workers from Mexico who were recruited by Defendant Manuel Sanchez through the Department of Labor's H-2A foreign agricultural worker program. Through their sworn affidavits, Plaintiffs have shown that Defendant recruited them in Mexico to bale pine straw in Georgia, promised them specific wages and benefits like free housing and food, required them to pay substantial pre-employment expenses such as visa costs and recruitment fees while knowing that Plaintiffs could not afford such expenses, and transported them to Georgia. However, upon arriving in Georgia in February 2018, Defendant did not pay Plaintiffs as agreed–or even the minimum wage–and paid some nothing at all. In addition, Plaintiffs were not reimbursed for any of their pre-employment expenses that they were able to pay; rather, Defendant told Plaintiffs that they could work to pay him back for the remainder of the expenses that he said they owed him. Defendant told Plaintiffs that they would not be paid until they bailed pine straw, but he left them at the work sites all day with no equipment to bail the pine straw, no bathrooms, and no transportation.
The facts as described in this section are taken from Plaintiffs' Complaint, dkt. no. 1, Plaintiffs' sworn affidavits, dkt. nos. 11-3 through 11-15, the H-2A worker contract, dkt. no. 11-2, and evidence submitted during the default judgment hearing held on July 25, 2019.
Defendant also subjected Plaintiffs to overcrowded and deplorable living conditions. He first placed Plaintiffs in a motel with multiple people forced to sleep in the same rooms. Then he moved Plaintiffs in the middle of winter to a small house with no heat, mattresses on the floor with no blankets, and one bathroom for nineteen people to share. The conditions of the house were dirty and unsanitary. Some Plaintiffs were forced to sleep behind the house in sheds. Later, Defendant moved some of the Plaintiffs to a trailer that was equally as deplorable and dirty as the house.
Defendant threatened Plaintiffs with deportation on multiple occasions. He told Plaintiffs that if they left his employment, he would report them to immigration services, and they would be deported. He also told them that if they were deported, they would never be allowed to enter the United States again through a work visa.
During Plaintiffs' time in Georgia, Defendant provided Plaintiffs with very little food, and when they ran out, Plaintiffs were forced to seek help from a local church. The church also provided Plaintiffs with blankets so that they did not have to cover themselves with plastic at night to try to keep warm.
People from the church who had helped Plaintiffs eventually connected Plaintiffs with attorneys from Georgia Legal Services who were able to assist Plaintiffs in their plight. Plaintiffs eventually left Defendant's employment throughout February and March of 2018. Afterwards, with the help of Georgia Legal Services, Plaintiffs sued Defendant on November 11, 2018, for failure to pay minimum wage and provide reimbursement for expenses under the Fair Labor Standards Act (FLSA) (Count I), failure to pay overtime pay as required by the FLSA (Count II), breach of contract for failing to pay the wages offered in the H-2A job order (Count III), breach of contract for failing to provide housing as detailed in the H-2A job order (Count IV), violations of the Trafficking Victims Protection Reauthorization Act of 2003 (TVPRA) (Count V), and negligence (Count VI). After Defendant failed to respond to Plaintiff's Complaint or appear in the case, Plaintiff moved for a clerk's entry of default on December 11, 2018. Dkt. No. 5. The clerk entered default that same day. Dkt. No. 6. On April 29, Plaintiffs filed their initial Motion for Default Judgment. Dkt. No. 9. On July 22, 2019, Plaintiffs. filed their Amended Motion for Default Judgment. Dkt. No. 11. On July 25, the Court held a Default Judgment hearing. Dkt. No. 12. During the hearing, Plaintiffs presented video evidence showing the living conditions of the house in which Defendant forced them to stay, and Plaintiff Julio Medina Arreguin testified to the events that took place and the harm he experienced. Id. At the end of the hearing, the Court granted Plaintiffs' Motion with notice that this written Order would follow. Id.
At some point either before the litigation commenced or afterwards, Plaintiffs entered into a settlement agreement with Premium Pine Needles, LLC, for $850 each for the harm they endured from Defendant's actions. Dkt. No. 11-23. Premium Pine Needles, LLC, was the company for which Defendant filed his H-2A application, but evidence in the record demonstrates that Defendant forged the signature of Eric Plyer, the owner of Premium Pine Needles, LLC, on that application. See Dkt. No. 11-17.
LEGAL STANDARD
Federal Rule of Civil Procedure 55 allows a party to seek an entry of default and, subsequently, a default judgment against another party who has failed to plead or otherwise defend a lawsuit. See Fed. R. Civ. P. 55(a). Securing a default judgment is thus a two-step process. "First, the party seeking a default judgment must file [an application] for entry of default with the clerk of a district court by demonstrating that the opposing party has failed to answer or otherwise respond to the complaint, and, second, once the clerk has entered a default, the moving party may then seek entry of a default judgment against the defaulting party." Gladden v. Homewood Florist, Inc., No. 2:09-CV-01547-HGD, 2011 WL 13286008, at *1 (N.D. Ala. July 6, 2011) (alteration in original) (citations omitted) ; see also Bank of Am., N.A. v. Harris, No. 1:17-CV-1201-CAP-JSA, 2017 WL 8186606, at *3 (N.D. Ga. Nov. 30, 2017), report and recommendation adopted, No. 1:17-CV-1201-CAP, 2017 WL 8186601 (N.D. Ga. Dec. 20, 2017) ) (describing the "two-step procedure for obtaining a default judgment").
In deciding a motion for default judgment, a district court may, in its discretion pursuant to Rule 55 (b)(2), hold a hearing to "(A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter." Fed. R. Civ. P. 55 (b)(2). "When considering a motion for default judgment, a court must investigate the legal sufficiency of the allegations and ensure that the complaint states a plausible claim for relief." Mevi Avocados, Inc. v. Maya Foods, LLC, No. 1:16-CV-3984-WSD, 2017 WL 908471, at *2 (N.D. Ga. Mar. 8, 2017) (citing Cotton v. Mass. Mut. Life Ins. Co., 402 F. 3d 1267, 1278 (11th Cir. 2005) ; Bruce v. Wal-Mart Stores, Inc., 699 F. Supp. 905, 906 (N.D. Ga. 1988) ). "If ‘the plaintiff has alleged sufficient facts to state a plausible claim for relief,’ a motion for default judgment is warranted." Id. (quoting Surtain v. Hamlin Terrace Found., 789 F. 3d 1239, 1246 (11th Cir. 2015) ). "Conceptually, then, a motion for default judgment is like a reverse motion to dismiss for failure to state a claim." Id. (quoting Surtain, 789 F.3d at 1246 ). "[W]hile a defaulted defendant is deemed to admit the plaintiffs well-pleaded allegations of fact, he is not held to admit facts that are not well-pleaded or to admit conclusions of law." Id. (quoting Cotton, 402 F.3d at 1278 ).
The allegations relating to damages suffered ordinarily are not accepted as true. Wehrs v. Wells, 688 F.3d 886, 892 (7th Cir. 2012). Rather, "[d]amages must be proved unless they are liquidated or capable of calculation." Id. (quoting Merrill Lynch Mortg, Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir. 1990) ). It is the Court's duty to "determine both the amount and character of damages." PNCEF, LLC v. Hendricks Bldg. Supply LLC, 740 F. Supp. 2d 1287, 1292 (S.D. Ala. 2010) (quoting Virgin Records Am., Inc. v. Lacey, 510 F. Supp. 2d 588, 593 n. 5 (S.D. Ala. 2007) ). Even in the default judgment context, "[a] court has an obligation to assure that there is a legitimate basis for any damage award it enters." Anheuser Busch, Inc., v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003).
DISCUSSION
In considering a default judgment, the Court must examine (1) jurisdiction, (2) liability, and (3) damages. See Pitts ex rel. Pitts v. Seneca Sports, Inc., 321 F. Supp. 2d 1353, 1356 (S.D. Ga. 2004). The Court will take up each in turn.
I. Jurisdiction and Venue
The Court cannot enter default judgment against Defendant unless it has personal jurisdiction over him and subject matter jurisdiction over the case.
Here, the Court has personal jurisdiction over Defendant because the Complaint alleges that Defendant is a resident of Georgia, see dkt. no. 1 ¶ 6, 8, and Defendant was served in Hazlehurst, Georgia, on November 15, 2018. See Chubb Custom Ins. Co. v. Torian, No. CV 113-071, 2014 WL 4926390, at *2 (S.D. Ga. Sept. 30, 2014). This court also has subject-matter jurisdiction over this case because Plaintiffs' Complaint invokes federal-question jurisdiction under the FLSA and the TVPRA. The Court therefore has supplemental jurisdiction over Plaintiffs' related state law claims. See 28 U.S.C. § 1331. Finally, venue is proper in the Southern District of Georgia because the Complaint alleges that Defendant resides within this district and a substantial part of the events giving rise to Plaintiffs' claims occurred in Baxley and Blackshear, Georgia, which are cities within this district. See 28 U.S.C. § 1391 (b).
II. Liability
In order for the Court to grant Plaintiffs' Motion for Default Judgment, Plaintiffs must have properly alleged FLSA claims for pre-employment expenses, minimum wage, and overtime compensation against Defendant, a claim for breach of contract, and claims under the TVPRA. Plaintiffs have admitted that they have abandoned their claims under Count IV for breach of contract for housing and Count VI for negligence. See Dkt. No. 11 at 1 n.1.
A. FLSA
Plaintiffs assert claims against Defendant under the FLSA for failure to reimburse certain pre-employment expenses as well as violations of the FLSA's minimum wage and overtime provisions.
1. Pre-Employment Expenses
Under the FLSA, "workers must be reimbursed during the first workweek for pre-employment expenses which primarily benefit the employer, to the point that wages are at least equivalent to the minimum wage." Arriaga v. Fla. Pac. Farms, L.L.C., 305 F.3d 1228, 1237 (11th Cir. 2002) ; see also Moreno-Espinosa v. J & J Ag Prod., Inc., 247 F.R.D. 686, 689 (S.D. Fla. 2007) ("[U]nder Eleventh Circuit case law, workers must be reimbursed for pre-employment expenses in the first week of employment, regardless of whether the worker later walks off the job."). As the Eleventh Circuit has explained, in a case like this, where "an employer decides to utilize the H-2A program ... costs are certain to arise, and it is therefore incumbent upon the employer to pay them. Although immediate reimbursement is not necessary, payment may be required within the first week if the employees' wages, once the costs are subtracted, are below minimum wage. If so, the employer must provide reimbursement up to the point where the minimum wage is met." Id. at 1244.
Here, Plaintiffs have presented evidence that they paid money to Defendant to cover the cost of recruiting fees, travel to Georgia, visa costs, which included travel, lodging, and food costs in Monterrey, Mexico, where Plaintiffs had to travel to complete visa applications. Moreover, the evidence demonstrates that Plaintiffs were never reimbursed for these expenses. Thus, based on the record, the Court finds that these expenses were for the benefit of Defendant, and therefore, Defendant violated the FLSA by not reimbursing Plaintiffs for their pre-employment expenses. See id. (requiring reimbursement under the FLSA for pre-employment travel expenses to the United States and visa costs).
2. Minimum Wage and Overtime
The FLSA "requires payment of minimum wages and gives employees deprived of these payments the right to receive them." Freeman v. Willie A. Watkins Funeral Home of Riverdale, Inc., No. 1:16-CV-00377-WSD, 2017 WL 66824, at *2 (N.D. Ga. Jan. 5, 2017) (citing 29 U.S.C. §§ 206, 216(b) ). "[T]he requirements to state a claim of a FLSA violation are quite straightforward." Id. (quoting Sec'y of Labor v. Labbe, 319 Fed. App'x. 761, 763 (11th Cir. 2008) ). "To state a claim for failure to pay minimum (or overtime) wages under the FLSA, a plaintiff must demonstrate that (1) he is employed by the defendant, (2) the defendant engaged in interstate commerce, and (3) the defendant failed to pay him minimum or overtime wages." Id. (quoting Freeman v. Key Largo Volunteer Fire & Rescue Dep't, Inc., 494 Fed. App'x. 940, 942 (11th Cir. 2012) ).
Currently under the FLSA, the federal minimum wage is $7.25 an hour. 29 U.S.C. § 206 (a). Moreover, the statute requires that when an employee works more than forty hours in a week, the employer must pay the employee one and one-half times the "regular rate at which he is employed." Id. § 207. "An employee's regular rate is ‘the hourly rate actually paid the employee for the normal, non-overtime workweek for which he is employed.’ " Boyle v. City of Pell City, 866 F.3d 1280, 1286 (11th Cir. 2017) (citation omitted). "The regular rate by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments." Id. (citation omitted). In a case like this, the regular rate is the contract rate, which is set by the adverse effect wage rate (AEWR). See Arriaga, 305 F.3d at 1233 (citing 20 C.F.R. § 655.102 (b)(9) ) ("[A]n employer seeking the services of H-2A workers must compensate them at a rate not less than the federal minimum wage, the prevailing wage rate in the area, or the ‘adverse effect wage rate,’ whichever is highest.").
Here, Plaintiffs have established an FLSA wage and overtime claim against Defendant. They plausibly allege that they were entitled as workers under the H-2A program to FLSA wage and overtime protections, that they traveled as foreign workers from Mexico (establishing interstate commerce) and worked for Defendant, and that Defendant failed to pay them minimum wage and overtime as required by the FLSA. Therefore, Defendant violated the FLSA by not paying Plaintiffs the proper wages and overtime.
B. Breach of Contract
Turning to Plaintiffs' breach of contract claim, Defendant breached a contract with Plaintiffs by failing to pay them at the $10.95 per hour rate established by the AEWR. Under the DOL's H-2A foreign agricultural worker program, "[a]gricultural employers are permitted to hire nonimmigrant aliens as workers under the H-2A program if they first obtain from DOL certification that (1) there are insufficient domestic workers who are willing, able, and qualified to perform the work at the time and place needed; and (2) the employment of aliens will not adversely affect the wages and working conditions of domestic workers." Arriaga, 305 F. 3d at 1232. Pursuant to H-2A regulations, the employer wishing to utilize the program must file a "clearance order" (or "job order") detailing the requirements and conditions of the job for which the employer is seeking foreign workers. See 20 C.F.R. §§ 653,501, 655.121 - 655.122. These clearance orders become the employment contract between the employer and the foreign workers. See Ulloa v. Fancy Farms, Inc., 762 Fed. App'x 859, 863 (11th Cir. 2019) ("Along with the labor certification application, these clearance orders served as the employment contracts between the foreign workers and [the employer]."); Arriaga, 305 F. 3d at 1233 ("The clearance orders ultimately become the work contract between the employers and farmworkers.").
Here, the record shows that Plaintiffs had a contract with Defendant through the H-2A program and the clearance order submitted by Defendant to the DOL. The clearance order stated that the job would pay $10.62/hour and would be about 36 hours a week of work, but the H-2A regulations require that hourly employees be paid at least the AEWR or Federal or State minimum wage, whichever is highest. See 20 C.F.R. § 655.122 (1). At the time of the Plaintiffs' employment in this case, the AEWR in Georgia was $10.95/hour. See 82 Fed. Reg. 60628. Therefore, Defendant had a contractual duty to pay Plaintiffs at that AEWR rate, and the record shows that he failed to do so, thereby breaching the contract with Plaintiffs.
C. TVPRA
Under the TVPRA, Plaintiffs pursue several alternative theories of liability including forced labor, human trafficking, financially benefiting from trafficking in persons, and attempted forced labor. However, the Court need not expound on each of these alternate theories because the Court finds that Plaintiffs have presented evidence establishing that, at minimum, Defendant is liable for forced labor and human trafficking under the TVPRA.
The forced labor provision of the TVPRA provides that:
Whoever knowingly provides or obtains the labor or services of a person by any one of, or by any combination of, the following means—
(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.
shall be punished as provided under subsection (d).
18 U.S.C. § 1589(a). In this section, "abuse or threatened abuse of law or legal process" means "the use or threatened use of a law or legal process, whether administrative, civil, or criminal, in any manner or for any purpose for which the law was not designed, in order to exert pressure on another person to cause that person to take some action or refrain from taking some action." Id. § 1589(c). "Serious harm" means "any harm, whether physical or nonphysical, including psychological, financial, or reputational harm, that is sufficiently serious, under all the surrounding circumstances, to compel a reasonable person of the same background and in the same circumstances to perform or to continue performing labor or services in order to avoid incurring that harm." Id.
The TVPRA provides both criminal and civil penalties for violations of its provisions. See 18 U.S.C. § 1595 (a) ("An individual who is a victim of a violation of this chapter may bring a civil action against the perpetrator (or whoever knowingly benefits, financially or by receiving anything of value from participation in a venture which that person knew or should have known has engaged in an act in violation of this chapter) in an appropriate district court of the United States and may recover damages and reasonable attorneys fees.").
In assessing a claim of forced labor under the TVPRA, "the vulnerabilities and characteristics of the specific victim become extremely important because one individual could be impervious to some types of coercion that cause another to acquiesce in providing forced labor." Ross v. Jenkins, 325 F. Supp. 3d 1141, 1164 (D. Kan. 2018) (citation omitted). Thus, "the relevant inquiry is whether the defendant ‘intentionally cause[d] the oppressed person reasonably to believe, given her special vulnerabilities, that she ha[d] no alternative but to remain in involuntary service for a time.’ " Id. (citation omitted). Conducing this inquiry, another court in this Circuit found that an employer's threats to foreign workers that they would lose their immigration status if they left his employment were "abuse or threatened abuse of law or the legal process." Ramos v. Hoyle, No. 08-21809-CIV, 2008 WL 5381821, at *4 (S.D. Fla. Dec. 19, 2008).
Here, Plaintiffs have presented evidence establishing a claim of forced labor. Plaintiffs allege that Defendant charged them substantial recruitment fees knowing that they would have to keep working for him to try to pay off the loans, took them to the United States, threatened them with deportation and the inability to return to the United States through the H-2A visa program if they left his employment, failed to pay Plaintiffs the contracted AEWR price–let alone minimum wage–and subjected Plaintiffs to deplorable housing, little food, and cold temperatures. In these circumstances, where Plaintiffs as foreign immigrants were in an unknown location with significant debts incurred as a result of Defendant's preemployment fees, Defendant's threats of deportation or losing H-2A privileges were used to coerce Plaintiffs into continuing to work for him, despite their terrible working and living conditions. In other words, Plaintiffs were at Defendants' mercy and had no choice but to continue to work for him without pay or risk being deported as Defendant threatened. Thus, Plaintiffs have established their forced labor claim against Defendant pursuant to 18 U.S.C. § 1589(a)(3) or (a)(4).
For these same reasons, Plaintiffs have also established their claim of human trafficking against Defendant. Under its human trafficking provision, the TVPRA states that
Whoever knowingly recruits, harbors, transports, provides, or obtains by any
means, any person for labor or services in violation of this chapter shall be fined under this title or imprisoned not more than 20 years, or both.
18 U.S.C. § 1590. In other words, the human trafficking provision prohibits the recruiting, transporting, or obtaining a person for the purposes of forced labor as described above. Here, Plaintiffs have shown that Defendant recruited them, charged them significantly expensive recruitment fees, transported them to the United States, and used them for labor (collecting pine straw) in violation of 18 U.S.C. § 1589(a)(3) or (a)(4) for forced labor. These facts are sufficient to also find Defendant liable for human trafficking under the TVPRA.
III. Damages
Having found Defendant liable under multiple causes of action, the Court now turns to the issue of damages. In calculating the appropriate damages, the Court must be mindful of not permitting Plaintiffs to have double recovery for the same harm. See Ross, 325 F. Supp. 3d at 1141 (" [P]emitting plaintiff to recover the same bundle of damages more than once under various overlapping legal theories would permit multiple recoveries. This, of course, is impermissible.").
A. Compensatory Damages: Restitution
Plaintiffs move for a total of $48,901.76 in compensatory damages under their TVPRA claims, which includes $15,429.81 in pre-employment expenses, $9,021.07 in unpaid minimum wages and overtime wages, and $24,450.88 in liquidated damages. "Restitution for a trafficking victim requires, at a minimum, compensation for the value of her services as guaranteed under the FLSA." Lagasan v. Al-Ghasel, 92 F. Supp. 3d 445, 457 (E.D. Va. 2015) (citing 18 U.S.C. § 1593(b)(3) ). The FLSA provides that "[a]ny employer who violates [the Act] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overpaid compensation, as the case may be, and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). Defendant is therefore liable to Plaintiffs for unpaid pre-employment expenses to the extent that they lower the Plaintiffs' first week wages below the minimum wage, unpaid minimum wages at the rate of $7.25 per hour, unpaid overtime wages at time and a half the "regular rate," which in this case is the AEWR rate of $10.95 per hour, and, finally, an equal amount of liquidated damages for all of the unpaid expenses and wages.
Plaintiffs have shown that they incurred a total of $15,429.81 in pre-employment expenses, which included recruitment fees, transportation, and lodging. Dkt. No. 11-18. Specifically, Plaintiffs have shown that they incurred the following pre-employment expenses: Arreguin $1,100.00; Malagon $1,507.95; Maydon $1,186.08; Lopez $1,513.95; Sanchez $750.00; Gomez $1,263.95; Villela $1,125.44; Olvera $1,400.00; Mendiola $1,157.95; Flores $1,263.25; Juarez $1,175.44; Cervantes $1,000.00; Reyes $985.80. Because none of the Plaintiffs were paid anything during their first week of work, Plaintiffs are entitled to recover the full amount of their pre-employment expenses. Plaintiffs have demonstrated that they were owed a total of $8,475.25 in unpaid minimum wage hours. Specifically, Plaintiffs have shown that they worked the following regular hours for which they are owed minimum wage at a rate of $7.25 per hour: Arreguin 62 hours for $449.50; Malagon 62 hours for $449.50; Maydon 182 hours for $1,319.50; Lopez 138 hours for $1,000.50; Sanchez 62 hours for $449.50; Gomez 138 hours for $1,000.50; Villela 62 hours for $449.50; Olvera 62 hours for $449.50; Mendiola 62 hours for $449.50; Flores 182 hours for $1,319.50; Juarez 62 hours for $449.50; Cervantes 33 hours for $239.25; Reyes 62 hours for $449.50.
Because the formula for calculating pre-employment expenses requires Plaintiffs to be reimbursed for preemployment expenses to the extent that they lower Plaintiffs' first week wages below the minimum wage, where Plaintiffs were not paid anything during their first week, they are owed the full amount of pre-employment expenses in addition to the minimum wage owed for the hours worked in their first week. See Arriaga, 305 F.3d at 1237 ("Although immediate reimbursement is not necessary, payment may be required within the first week if the employees' wages, once the costs are subtracted, are below minimum wage. If so, the employer must provide reimbursement up to the point where the minimum wage is met.").
Plaintiffs have also shown that they are owed a total of $3,433.88 in unpaid overtime wages. Specifically, Plaintiffs have shown that they worked the following overtime hours at a rate of $16.43 per hour (time-and-a-half the AEWR rate of $10.95) : Arreguin 4 hours for $65.72; Malagon 4 hours for $65.72; Maydon 97 hours for $1593.71; Lopez 4.5 hours for $73.94; Sanchez 4 hours for $65.72; Gomez 4.50 hours for $73.94; Villela 4 hours for $65.72; Olvera 4 hours for $65.72; Mendiola 4 hours for $65.72; Flores 71 hours for $1,166.53; Juarez 4 hours for $65.72; Cervantes 0 hours for $0.00; Reyes 4 hours for $65.72.
Some of the Plaintiffs were paid some wages by Defendant, and therefore, that amount must be deducted from the amount of compensatory damages owed to those Plaintiffs. Those Plaintiffs who were paid some wages by Defendant are: Maydon $730.00; Lopez $468; Gomez $500; Flores $500.
Therefore, adding all of these damages together, Plaintiffs are owed restitution for unpaid FLSA pre-employment expenses, minimum wage, and overtime (less the amount of wages paid to the few Plaintiffs who were paid) in the amount of $25, 140.94. Specifically, Plaintiffs are owed the following amount in FLSA damages: Arreguin $1,615.22; Malagon $2,023.17; Maydon $3,369.29; Lopez $2,120.39; Sanchez $1,265.22; Gomez $1,838.39; Villela $1,640.66; Olvera $1,915.22; Mendiola $1,673.17; Flores $3,249.28; Juarez $1,690.66; Cervantes $1,239.25; Reyes $1,501.02. In addition to these damages, Plaintiffs are also entitled to liquidated damages, which are double the amounts described above for an additional total of $25,140.94. Therefore, the Court finds that Plaintiffs are entitled to restitution under the TVPRA (for the value of their services as guaranteed under the FLSA) in the total amount of $50,281.88. Specifically, the Plaintiffs are entitled to restitution damages in the amounts of: Arreguin $3,230.44; Malagon $4,046.34; Maydon $6,738.58; Lopez $4,240.78; Sanchez $2,530.44; Gomez $3,676.78; Villela $3,281.32; Olvera $3,830.44; Mendiola $3,346.34; Flores $6,498.56; Juarez $3,381.32; Cervantes $2,478.5; Reyes $3,002.04.
This amount is larger than the amount requested by Plaintiffs because in calculating the damages, the Court found that Plaintiffs had erroneously calculated the FLSA overtime damages for Eduardo Flores Maydon, which in turn, caused the Plaintiffs' total liquidated damages request to also be miscalculated. See Dkt. No. 19 at 4 (leaving out 42 hours of overtime). For this same reason, the Court's oral order from the Default Judgment Hearing is modified to reflect the proper calculation.
B. Compensatory Damages: Emotional Distress
Plaintiffs also seek $200 per day for the severe emotional distress caused by Defendant's forced labor and human trafficking. "The TVPA permits a plaintiff to recover emotional distress awards for different [TVPRA] violations." Lagasan, 92 F. Supp. 3d at 457 (E.D. Va. 2015) (citations omitted). In determining such damages, courts look to "all relevant circumstances ..., including sex, age, condition in life and any other fact indicating susceptibility of the injured person to [the] type of harm." Id. (quoting Mazengo v. Mzengi, No. 07-756, 2007 WL 8026882, at *7 (D.D.C. Dec. 20, 2007) ). Courts have awarded plaintiffs damages for emotional distress from trafficking subject to forced labor ranging from $410 to $780 per day. See id. at 458 (collecting cases).
Here, all the relevant circumstances of what Plaintiffs' endured as a result of Defendant's actions justify Plaintiffs' request for $200 per day of emotional distress damages. To begin, counsel for Plaintiffs noted at the default judgment hearing that $200 per day is less than the average range for emotional distress damages granted in TVPRA cases, which recognizes the distinguishing facts of this case compared to other cases, but nonetheless asserted that $200 per day is warranted in this case. The Court concurs. Here, the evidence shows that Plaintiffs were forced to take out loans to pay Defendant's excessive pre-employment expenses, were brought by Defendant to the United States, were forced to work with little or no pay, were forced to collect pine straw with no access to proper bailing equipment, no access to restrooms, or any other transportation, were forced to endure filthy and overcrowded living conditions and cold winter weather without any heating, and were forced to go hungry until a local church helped Plaintiffs by providing them food. Throughout this time, Plaintiffs swore that they experienced emotional distress, depression, worry about their families, concern about being deported under Defendant's threats, and other emotional harm. See generally dkt. nos. 11-3 through 11-15. Based on these facts, the Court finds that Plaintiffs should be awarded $200 per day for their emotional distress for a total of $58,800. Specifically, Plaintiffs are awarded emotional distress damages based on the days they were forced to endure TVPRA violations as follows: Arreguin 20 days for $4,000.00; Malagon 20 days for $4,000.00; Maydon 32 days for $6,400.00; Lopez 32 days for $6,400.00; Sanchez 20 days for $4,000.00; Gomez 32 days for $6,400.00; Villela 20 days for $4,000.00; Olvera 20 days for $4,000.00; Mendiola 20 days for $4,000.00; Flores 32 days for $6,400.00; Juarez 20 days for $4,000.00; Cervantes 6 days for $1,200.00; Reyes 20 days for $4,000.00.
IV. Unpaid Contractual Wages
In addition to the compensatory damages under the TVPRA, Plaintiff seek damages under their breach of contract claim for the unpaid hours worked under the contractual AEWR rate of $10.95 per hour. "Parties may not recover twice for one injury." Lagasan, 92 F. Supp. 3d at 458-59 (citing Gen. Tel. Co. of the Nw., Inc. v. Equal Employment Opportunity Comm'n, 446 U.S. 318, 333, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980) ). "Therefore, where a party is entitled to recovery under the FLSA, she may only recover additional damages for breach of contract to the extent that she is contractually entitled to more than the amount awarded under the FLSA." Id. (citation omitted).
Here, under the contract, which is the H-2A clearance order, the AEWR rate of $10.95 per hour controls, and that amount is $3.70 more per hour than the FLSA minimum wage rate of $7.25. As such, Plaintiffs are entitled to additional damages of the regular hours that they worked times the $3.70 difference, totaling $4,325.30. Specifically, Arreguin 62 hours for $229.40; Malagon 62 hours for $229.40; Maydon 182 hours for $673.40; Lopez 138 hours for $510.60; Sanchez 62 hours for $229.40; Gomez 138 hours for $510.60; Villela 62 hours for $229.40; Olvera 62 hours for $229.40; Mendiola 62 hours for $229.40; Flores 182 hours for $673.40; Juarez 62 hours for $229.40; Cervantes 33 hours for $122.10; Reyes 62 hours for $229.40.
V. Punitive Damages
Finally, Plaintiffs request punitive damages under the TVPRA in the total amount of $176,532.48, which is a 2:1 ratio of all of the compensatory damages and AEWR contract damages discussed above. "Punitive damages are generally appropriate under the [TVPRA] civil remedy provision because [the TVPRA] creates a cause of action for tortious conduct that is ordinarily intentional and outrageous." Ross, 325 F. Supp. 3d at 1175 (quoting Ditullio v. Boehm, 662 F.3d 1091, 1098 (9th Cir. 2011) ). "In other words, because ‘the wrong done by [a] violation of the [TVPRA]’ is one that involves ‘significant violations not only of labor standards but fundamental health and personal rights as well,’ an award of punitive damages in a TVPRA case is generally consistent with ‘the traditional use of punitive damages ... to punish and deter conduct involving an element of outrage.’ " Id. at 1175-76 (quoting Francisco v. Susano, 525 F. App'x 828, 834-35 (10th Cir. 2013) ) (awarding punitive damages in the amount of double the compensatory damages). In deciding the amount of punitive damages, courts consider "whether the harm was physical or economic, whether defendants acted with reckless disregard of the victim's health and safety, whether the conduct was repeated, and whether the conduct was a result of malice or deceit as opposed to mere accident." Lagasan, 92 F. Supp. 3d at 458.
Here, the Court has no trouble concluding that Plaintiffs' requested punitive damages award is warranted. Defendant acted with reckless disregard of Plaintiffs' health, safety, and wellbeing when he intentionally recruited them, took them to Georgia, forced them to work without pay under threats of deportation, and subjected them to deplorable and dangerous living conditions for weeks. To cite one example, Plaintiff Julio Medina Arreguin testified at the default judgment hearing to the living conditions of the house in which Defendant placed him and eighteen others. Arreguin recounted taking a shower–in the single disgusting shower shared by nineteen people–where he slipped, fell, and injured his arm, and having no first aid available, he used papers to stop the bleeding. In another example, the Plaintiffs were forced to seek help from a local church to get food, and that same church provided Plaintiffs with blankets so that Plaintiffs no longer had to cover themselves with plastic when sleeping on the mattresses in the overcrowded house in the middle of winter. Based on these facts and many others, the Court finds that Plaintiffs are entitled to a total of $17 6,532.48 in punitive damages. Specifically, Plaintiffs are entitled to punitive damages in the amounts of: Arreguin $11,689.24; Malagon $12,505.14; Maydon $20,885.38; Lopez $18,061.98; Sanchez $10,989.24; Gomez $17,497.98; Villela $11,740.12; Olvera $12,289.24; Mendiola $11,805.14; Flores $20,645.36; Juarez $11,840.12; Cervantes $5,122.70; Reyes $11,460.84.
VI. PNC Settlement Credit
In calculating Plaintiffs' damages, the Court must also take into account the $850 settlement that Premium Pine Needles agreed to pay Plaintiffs for the harm they endured as a result of Defendant's actions. Thus, the Court subtracts $850 from the total award of damages to each Plaintiff.
CONCLUSION
For these reasons, Plaintiff's Motion for Default Judgment is GRANTED. In total, Plaintiffs are awarded $278,889.66 in damages. Specifically, Plaintiffs are awarded their total amount of damages as follows: Arreguin $18,299.08; Malagon $19,930.88; Maydon $33,847.36; Lopez $28,363.36; Sanchez $16,899.08; Gomez $27,235.36; Villela $18,400.84; Olvera $19,499.08; Mendiola $18,530.88; Flores $33,367.32; Juarez $18,600.84; Cervantes $8,073.30; Reyes $17,842.28.
Again, this total amount is slightly larger than the amount requested by Plaintiffs and the amount Ordered by this Court during the Default Judgment hearing because it reflects the proper calculation of Plaintiff Eduardo Flores Maydon's overtime. See Dkt. No. 11-19 at 4.
SO ORDERED, this 31st day of July, 2019.