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U.S. Equal Employment Opportunity Commission v. Global Horizons

November 2, 2011

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, PLAINTIFF,
v.
GLOBAL HORIZONS, INC. D/B/A ) GLOBAL HORIZONS ) MANPOWER, INC.; CAPTAIN ) COOK COFFEE COMPANY LTD.; ) DEL MONTE FRESH PRODUCE (HAWAII), INC.; KAUAI COFFEE ) COMPANY, INC.,; KELENA ) FARMS, INC.; MAC FARMS OF ) HAWAII, LLC N/K/A MF NUT ) CO., LLC; MAUI PINEAPPLE COMPANY, LTD. A/K/A MAUI ) PINEAPPLE FARMS; ) ALEXANDER & BALDWIN, INC.; ) MASSIMO ZANETTI BEVERAGE ) USA, INC.; AND DOES 1--15, INCLUSIVE DEFENDANTS.



The opinion of the court was delivered by: David Alan Ezra United States District Judge

ORDER: (1) GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO STAY; (2) GRANTING DEFENDANTS' MOTIONS TO DISMISS AND (3) DISMISSING THE FIRST AMENDED COMPLAINT WITHOUT PREJUDICE AS TO THE MOVING DEFENDANTS

On October 26, 2011, the Court heard Plaintiff's Motion to Stay and Moving Defendants' Motions to Dismiss. Sue J. Noh, Esq., Michael J. Farrell, Esq., and Lorena Garcia Bautista, Esq., appeared on behalf of Plaintiff Equal Employment Opportunity Commission ("Plaintiff" or EEOC"); Amanda Marie Jones, Esq., and Kristin S. Shigemura, Esq., appeared on behalf of Defendant Captain Cook Coffee Company Ltd. ("Captain Cook"); David W.H. Chee, Esq., appeared on behalf of Defendant Del Monte Fresh Produce (Hawaii) ("Del Monte"); Gerald L. Maatman, Jr., Esq., and Mark J. Bennet, Esq., appeared on behalf of Defendant Kauai Coffee Company, Inc. ("Kauai Coffee"); Sarah O. Wang, Esq., appeared on behalf of Defendant Kelena Farms, Inc. ("Kelena Farms"); Barbara A. Petrus, Esq., appeared on Behalf of Defendant Mac Farms of Hawaii, LLC ("Mac Farms"); Christopher S. Yeh, Esq., appeared on behalf of Maui Pineapple Company, Ltd., ("Maui Pineapple"); and Gerald L. Maatman, Jr., Esq., appeared on behalf of Defendants Alexander & Baldwin, Inc. ("A&B") and Massimo Zanetti Beverage USA, Inc. ("MZB"). After reviewing the Motions and the supporting and opposing memoranda, the Court GRANTS IN PART and DENIES IN PART Plaintiff's Motion to Stay (Doc. # 109) and GRANTS Captain Cook, Del Monte, Kauai Coffee, Kelena Farms, Mac Farms, Maui Pineapple, A&B, and MZB's (collectively "Moving Defendants") Motions to Dismiss (Docs. ## 20, 22, 29, 39, 46, 48, 58, 59).

BACKGROUND

I. Criminal Case

On September 1, 2010, a Grand Jury indicted various employees of Global Horizons, Inc. ("Global") on charges of human trafficking. United States v. Orian et al., No. 10-576 (D. Haw. filed Sept. 1, 2010). A First Superseding Indictment was issued on January 12, 2011. Id. at Doc. # 112. The individuals indicted include Global's CEO Mordechai Orian and former Global employees Pranee Tubchumpol, Shane Germann, Sam Wongsesanit, Ratawan Chunharutai, Podjanee Sinchai, Bruce Schwartz, and Joseph Knoller ("Criminal Defendants"). Id. The criminal matter is set for trial on February 7, 2012.

II. Civil Case

On April 19, 2011, EEOC filed the instant action for recovery pursuant to Title VII of the Civil Rights Act of 1964 and Title 1 of the Civil Rights Act of 1991 to correct allegedly unlawful employment practices on the basis of national origin, race, and retaliation. Plaintiff claims that Defendants engaged in discrimination and a pattern or practice of discrimination when they subjected Marut Kongpia, Nookrai Matwiset, Jakarin Phookhien, Mongkol Bootpasa, Janporn Suradanai, Suthat Promnonsri, Itthi Oa-Sot, and a class of similarly situated Thai and Asian individuals (collectively "Claimants") to harassment, disparate treatment, retaliation, and constructive discharge on the basis of the Claimants' national origin and race. (See "FAC," Doc. # 12.)

The majority of the alleged misconduct stems from the conduct of Defendant Global Horizons, Inc.*fn1 ("Global"). The First Amended Complaint ("FAC") alleges that Global "with the help of the agricultural companies and farms with which it contracted" engaged in a pattern or practice of misconduct against Claimants based on their national origin and race. (Id. ¶ 40a.) Specifically, Plaintiff alleges that "Global targeted economically-vulnerable Asian men from Thailand" and "promised [them] working conditions that complied with U.S. law in exchange for exorbitant recruiting fees." (Id.) Global allegedly "harassed and intimidated the Claimants on a regular basis" and "threatened the Claimants with deportation, arrest, suspension, and/or physical violence." (Id.) According to Plaintiff, Global "unlawfully confiscated the Claimants' identification documents"and "subjected the Claimants to uninhabitable housing, insufficient food and kitchen facilities, inadequate pay, significant gaps in work, visa and certification violations, suspension, deportation and/or physical violence." (Id.) These "intolerable working conditions . . . resulted in constructive discharge." (Id.) Plaintiff claims that these conditions created a hostile work environment and that the Claimants were subject to these conditions because of their national origin and race. (Id. ¶ 40(a),(b).)

Plaintiff also alleges that when the Claimants complained of the unlawful employment practices alleged, "Global threatened the Claimants with deportation, arrest, suspension, and/or physical violence" and "subjected the Claimants to harassment, significant gaps in work, visa and certification violations, suspension, deportation, and/or physical violence." (Id. ¶ 41(a).)

As a result of this alleged misconduct, Plaintiff claims that Global violated Sections 703(a) and 704(a) of Title VII, 42 U.S.C. §§ 2000e-2(a), 200e-3(a). (Id. ¶¶ 40, 41.)

Plaintiff's theory of liability with respect to the Moving Defendants is more attenuated. Plaintiff claims that each Moving Defendant, with the exception of MZB, "has continuously been under contract with Defendant Global for services rendered in Hawaii, and has continuously been a joint employer with Defendant Global where both generally controlled the terms and conditions of the employment" of the Claimants.*fn2 (Id. ¶¶ 8, 11, 14, 17, 20, 23, 26.) Plaintiff then claims that each Moving Defendant "either engaged in, knew of, or should have known of the unlawful employment practices and pattern or practice of such unlawful acts" which Plaintiff alleges Global committed. (Id. ¶¶ 42--57.)

III. Procedural History

On April 19, 2011, Plaintiff filed its initial Complaint. (Doc. # 1.) On July 15, 2011, Plaintiff filed its First Amended Complaint. (Doc. # 12.) On July 19, 2011, Kauai Coffee filed its Motion to Dismiss. ("Kauai MTD," Doc. # 20.) On July 22, 2011, Captain Cook filed its Motion to Dismiss. ("Cook MTD," Doc. # 22.) On August 5, 2011, Maui Pineapple filed its Motion to Dismiss. ("Maui MTD," Doc. # 29.) On August 8, 2011, Kelena Farms filed its Motion to Dismiss. ("Kelena MTD," Doc. # 39.) On August 12, 2011, Mac Farms filed its Motion to Dismiss. ("Mac MTD," Doc. # 46.) On August 15, 2011, Del Monte filed its Motion to Dismiss. ("Del MTD," Doc. # 48.) On September 6, 2011, Plaintiff filed an Opposition to Kauai Coffee's Motion to Dismiss ("Kauai Opp'n," Doc. # 55) and an Opposition to Captain Cook's Motion to Dismiss ("Cook Opp'n," Doc. # 56). On September 7, 2011, the Court issued an Order unifying the briefing schedule for Moving Defendants' Motions to Dismiss. (Doc. # 57.) On September 19, 2011, A&B filed its Motion to Dismiss ("A&B MTD," Doc. # 58.) The same day, MZB filed its Motion to Dismiss. ("MZB MTD," Doc. # 59.) On September 26, 2011, Plaintiff filed an Opposition to: (1) Maui Pineapple's Motion to Dismiss ("Maui Opp'n, Doc. # 64); (2) Mac Farm's Motion to Dismiss ("Mac Opp'n," Doc. # 65); (3) Del Monte's Motion to Dismiss ("Del Opp'n," Doc. # 66); and (4) Kelena Farm's Motion to Dismiss ("Kelena Opp'n," Doc. # 67). The same day, each of the Moving Defendants filed Statements of No Opposition to each other's Motions.*fn3 (Docs. ## 68--73.) On October 3, 2011, Mac Farms filed a Reply in support of its Motion to Dismiss. ("Mac Reply," Doc. # 87.) The same day, Maui Pineapple filed a Response in support of its Motion to Dismiss. ("Maui Reply," Doc. # 90.) Kauai Coffee, Captain Cook, Del Monte, and Kelena Farms also filed their Reply briefs. ("Kauai Reply," Doc. # 89; "Cook Reply," Doc. # 91; "Del Reply," Doc. # 92; "Kelena Reply," Doc. # 94.) On October 5, 2011, Plaintiff filed its Opposition to MZB's Motion to Dismiss and A&B's Motion to Dismiss. ("MZB Opp'n," Doc. # 96; "A&B Opp'n," Doc. # 99.) On October 12, 2011, A&B and MZB filed their Replies.*fn4 ("A&B Opp'n," Doc. # 104; "MZB Opp'n," Doc. # 106.)

On October 20, 2011, EEOC Attorneys Anna Park, Sue Noh, and Lorena Garcia-Bautista met with U.S. Attorney Florence Nakakuni and Robert J. Moossy and Daniel H Weiss from the Criminal Section of the U.S. Department of Justice, Civil Rights Division. (Doc. # 109-2.) The prosecution team asked the EEOC to file the instant motion to stay this case and to stay discovery pending resolution of the criminal matter to ensure that the criminal prosecution would not be frustrated by any abuse of civil discovery in the criminal matter and ultimately to ensure the public's interest in the proper prosecution of the criminal matter. (Id.)

Pursuant to that request, EEOC filed the instant Motion to Stay on October 21, 2011. (Doc. # 109.) On October 24, 2011, the Moving Defendants submitted briefs in Opposition to the Motion to Stay. (Docs. ## 111--112, 113--116.) On October 25, 2011, EEOC filed a Reply in support of its Motion to stay. (Doc. # 118.)

As of the date of this Order, Defendant Global has not made an appearance in this action.

STANDARD OF REVIEW

I. Motion to Stay "The Constitution does not ordinarily require a stay of civil proceedings pending the outcome of criminal proceedings." Keating v. Office of Thrift Supervision, 45 F.3d 322, 324 (9th Cir. 1995) (citing Fed. Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989). "In the absence of substantial prejudice to the rights of the parties involved, simultaneous parallel civil and criminal proceedings are unobjectionable under our jurisprudence." Id. (internal quotation marks and citation omitted). Nonetheless, a Court has the inherent discretion to stay civil proceedings "when the interests of justice seem to require such action." Id. (internal quotation marks and citation omitted).

"The decision whether to stay civil proceedings in the face of a parallel criminal proceeding should be made 'in light of the particular circumstances and competing interests involved in the case.'" Id. (quoting Molinaro, 889 F.2d at 902). In making this determination, the court "should consider the extent to which the defendant's fifth amendment rights are implicated." Id. (internal quotation marks and citation omitted). Additionally, the court should generally consider the following factors: (1) the interest of the plaintiffs in proceeding expeditiously with this litigation or any particular aspect of it, and the potential prejudice to plaintiffs of a delay; (2) the burden which any particular aspect of the proceedings may impose on defendants; (3) the convenience of the court in the management of its cases, and the efficient use of judicial resources; (4) the interests of persons not parties to the civil litigation; and (5) the interest of the public in the pending civil and criminal litigation. Id. at 325.

II. Motions to Dismiss

A. Federal Rule of Civil Procedure 12(b)(6)

Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure

("Rule"), a motion to dismiss will be granted where the plaintiff fails to state a claim upon which relief can be granted. Review is limited to the contents of the complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994). A complaint may be dismissed as a matter of law for one of two reasons: "(1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable legal claim." Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984) (citation omitted). Allegations of fact in the complaint must be taken as true and construed in the light most favorable to the plaintiff. See Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005).

A complaint need not include detailed facts to survive a Rule 12(b)(6) motion to dismiss. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555--56 (2007). In providing grounds for relief, however, a plaintiff must do more than recite the formulaic elements of a cause of action. See id. at 556--57; see also McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir. 1988) ("[C]onclusory allegations without more are insufficient to defeat a motion to dismiss for failure to state a claim.") (citation omitted). "The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions," and courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotations and citations omitted). Thus, "bare assertions amounting to nothing more than a formulaic recitation of the elements" of a claim "are not entitled to an assumption of truth." Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) ("[T]he non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.") (internal quotations and citations omitted).

A court looks at whether the facts in the complaint sufficiently state a "plausible" ground for relief. See Twombly, 550 U.S. at 570. A plaintiff must include enough facts to raise a reasonable expectation that discovery will reveal evidence and may not just provide a speculation of a right to relief. Id. at 586. When a complaint fails to adequately state a claim, such deficiency should be "exposed at the point of minimum expenditure of time and money by the parties and the court." Id. at 558 (citation omitted). If a court dismisses the complaint or portions thereof, it must consider whether to grant leave to amend. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (finding that leave to amend should be granted "if it appears at all possible that the plaintiff can correct the defect" (internal quotations and citations omitted)).

B. Federal Rule of Civil Procedure 8

Federal Rule of Civil Procedure 8 mandates that a complaint include a "short and plain statement of the claim," Fed. R. Civ. P. 8(a)(2), and that each allegation "be simple, concise, and direct." Fed. R. Civ. P. 8(d)(1). A complaint that is so confusing that its "'true substance, if any, is well disguised'" may be dismissed for failure to satisfy Rule 8. Hearns v. San Bernardino Police Dep't, 530 F.3d 1124, 1131 (9th Cir. 2008) (quoting Gillibeau v. City of Richmond, 417 F.2d 426, 431 (9th Cir. 1969); see also McHenry v. Renne, 84 F.3d 1172, 1180 (9th Cir. 1996) ("Something labeled a complaint but written . . . , prolix in evidentiary detail, yet without simplicity, conciseness and clarity as to whom plaintiffs are suing for what wrongs, fails to perform the essential functions of a complaint."); Nevijel v. N. Coast Life Ins. Co., 651 F.2d 671, 673 (9th Cir. 1981) ("A complaint which fails to comply with [Rule 8] may be dismissed with prejudice[.]").

Put slightly differently, a complaint may be dismissed for failure to comply with Rule 8 where it fails to provide the defendants fair notice of the wrongs they have allegedly committed.SeeMcHenry, 84 F.3d at 1178--80 (affirming dismissal of complaint where "one cannot determine from the complaint who is being sued, for what relief, and on what theory, with enough detail to guide discovery"); cf.Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1105 n.4 (9th Cir. 2008) (finding dismissal under Rule 8 was in error where "the complaint provide[d] fair notice of the wrongs allegedly committed by defendants and [did] not qualify as overly verbose, confusing, or rambling"). Rule 8 requires more than "the-defendant-unlawfully-harmed-me accusation[s]" and "[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do." Iqbal, 129 S. Ct. at 1949 (citations and quotations omitted). "The propriety of dismissal for failure to comply with Rule 8 does not depend on whether the complaint is wholly without merit." McHenry, 84 F.3d at 1179.

The court may "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal, 129 S. Ct. at 1950. Legal conclusions must be supported by factual allegations. Id. "When there are well-pleaded factual allegations, a court should assume their veracity and ...


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