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Brewer v. Salyer

May 15, 2009

ROBIN BREWER, PLAINTIFF,
v.
SCOTT SALYER DEFENDANT.



The opinion of the court was delivered by: Anthony W. Ishii Chief United States District Judge

ORDER GRANTING MOTION FOR CLASS CERTIFICATION AND PROVISIONALLY MODIFYING CLASS DESCRIPTION

This is an action by plaintiff Robin Brewer ("Plaintiff" or "Brewer") to recover damages in the form of lost wages that were allegedly caused by defendant Scott Salyer ("Defendant") who is alleged to have engaged in a scheme to drive down wages by purposefully hiring illegal immigrant laborers in violation of the Immigration and Nationality Act, 8 U.S.C. § 1324 et seq. ("INA")*fn1 , and the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961(1)(F). Plaintiff alleges Defendant is president of SK Foods, LP ("SK Foods"), a large food processing corporation located in the Eastern District of California. On January 8, 2008, Plaintiff filed a motion for certification of a plaintiff class to consist of all persons employed by SK Foods as either hourly wage or piece workers from September 22, 2002, who are United States citizens or who are legally entitled to work in the United States. On April 3, 2009, the Magistrate Judge issued Findings of Fact and Recommendations of Law (hereinafter, the "April 3 F&R's") that recommended denial of Plaintiff's motion for class certification. For the reasons that follow, the court will adopt in part and modify in part the Magistrate Judge's April 3 F&R's.

LEGAL STANDARD

This court reviews de novo those portions of the proposed findings of fact to which objection has been made. 28 U.S.C. § 636(b)(1); McDonnell Douglas Corp. v. Commodore Business Machines, 656 F.2d 1309, 1313 (9th Cir.1981), cert. denied, 455 U.S. 920, 102 S.Ct. 1277, 71 L.Ed.2d 461 (1982). As to any portion of the proposed findings of fact to which no objection has been made, the court assumes its correctness and decides the motions on the applicable law. See Orand v. United States, 602 F.2d 207, 208 (9th Cir.1979). The magistrate judge's conclusions of law are reviewed de novo. See Britt v. Simi Valley Unified School Dist., 708 F.2d 452, 454 (9th Cir.1983).

Certification of a class action is governed by Rule 23 of the Federal Rules of Civil Procedure.*fn2 "In order to obtain class certification, [a] plaintiff must first satisfy Rule 23(a)'s requirements of numerosity, commonality, typicality, and adequacy of representation." Coleman v. Gen. Motors Acceptance Corp., 296 F.3d 443, 446 (6th Cir. 2002). Additionally, in order to maintain a class action, a plaintiff "must demonstrate that the class fits under one of the three subdivisions of Rule 23(b)." Id. In the instant case, Plaintiff contends this action may be maintained as a class action because it satisfies Rule 23(b)(3)'s requirement that the court find "that the questions of law or fact common to class members predominate[s] over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy."

PROCEDURAL HISTORY AND FACTUAL ALLEGATIONS

The original class action complaint was filed in this action on September 26, 2006.

The original complaint alleges as RICO predicate acts violation of 8 U.S.C. § 1324(a)(1)(A)(iii), harboring illegal aliens, and 8 U.S.C. § 1324(a)(3), importing illegal aliens for employment. Both are aggravated offenses under the INA and qualify as RICO predicate offenses. Defendant moved to dismiss the complaint on December 28, 2006, challenging the adequacy of the allegation of the predicate RICO acts, whether a RICO enterprise and conspiracy had been adequately alleged and challenging Plaintiff's damage claims as being too speculative. In an order filed May 17, 2007, (the May 17 Order") the court found that the complaint did not adequately allege the RICO predicate offense of "harboring" illegal aliens in violation of 8 U.S.C. § 1324(a)(1)(A)(iii). The court found that the complaint did sufficiently allege importation of illegal aliens in violation of 8 U.S.C. § 1324(a)(3), and that RICO enterprise and conspiracy were adequately alleged. The May 17 Order also found that Plaintiffs allegation of damages was not so speculative as to warrant dismissal.

The currently-operative First Amended Complaint ("FAC") was filed on June 1, 2007. It is substantially the same as the original complaint except that the allegation of violation of 8 U.S.C. § 1324(a)(1)(A)(iii) as a RICO predicate act is omitted. The FAC alleges Defendant is liable under RICO because Defendant personally participated in a scheme to "knowingly hire for employment at least 10 individuals with actual knowledge that the individuals are [unauthorized] aliens" who were brought into the United States as described in 8 U.S.C. § 1324(a)(3)(B)(i) and (ii) in violation of the INA. It is not disputed that violation of the INA is a RICO predicate offense.

The FAC alleges Defendant committed the RICO predicate offense by approving hiring criteria that deliberately ignored factors that would have put any reasonable employer on notice of the illegal immigrant status of the job applicant. Those factors include "(1) hiring workers who cannot speak English while claiming to be U.S. Citizens or Lawful Permanent Residents; (2) hiring workers who are recent arrivals to the U.S. and claim to be U.S. Citizens or Lawful Permanent Residents; (3) hiring workers who present authorization documents which are invalid on their face because the pictures are of a different person, are upside down, are on poor quality paper, etc.; (4) hiring workers who are personally known to SK Foods' hiring staff to be in the U.S. illegally and are using false documents; (5) hiring workers who have previously been employed by SK Foods under different identities. A majority of the Company's hourly workforce falls into one or more of these categories." Doc. # 38 at 4: 25-5:8.

Relevant to Defendant's contentions regarding Plaintiff's ability to prove damages on a class-wide basis, the declaration of Plaintiff' s expert, George Borjas, Ph.D. ("Borjas") provides an overview of proposed methodology to be used for the computation of damages. See Doc. # 73-7, Exhibit "L" to Plaintiff's Memorandum in Support of the Motion for Class Certification. Borjas' declaration states, in pertinent part:

This body of research [on the impact of immigrants on native earnings and employment] uses fundamental theoretical models of labor supply and demand to determine the impact of increased immigration on the wage and employment opportunities of U.S. Workers. These models typically use regression analysis where compensation or some other labor market outcome is the dependent variable and firm and worker characteristics serve as control variables. The theoretical models and empirical methodologies found in the literature provide appropriate techniques that may be used to estimate the impact of [Defendant's] practice of employing illegal workers on the earnings of their employees who where legally authorized to work in the United States. [¶] These models can be adapted to determine the damages to the Plaintiffs, collectively and individually, on a class-wide basis. Using information that can be obtained from SK Foods to identify the legal status of their workers as well as other individual characteristics, the model may be applied to each member of the class.

Doc. # 73-7 at ¶¶ 5-6.

The motion to certify the class was filed on January 8, 2008. Defendant filed an opposition on March 4, 2008, and Plaintiff filed a reply on March 13, 2008. Plaintiff's objection to the Magistrate Judge's F&R's was filed on April 16, 2008. Defendant's response was filed May 2, 2008.

DISCUSSION

The April 3 F&R's recommend denial of Plaintiff's motion for class certification based on Plaintiff's failure to demonstrate compliance with the provisions of Rule 23, subdivision (a)(2), which requires that there be "questions of law common to the class;" and subdivision (a)(3) which requires that the "claims and defenses of the representative parties are typical of the claims or defenses of the class." The April 3 F&R's notes that, although Defendant opposes the method Plaintiff proposes to determine class membership, Defendant does not contend that the numerosity requirement of subdivision (a)(1) is not met. The court therefore adopts the Magistrate Judge's determination that the requirement for numerosity as set forth in Rule 23(a) is deemed met as unopposed. The court similarly adopts the Magistrate Judge's finding that the requirement for adequacy of representation as set forth in Rule 23(a)(4) is met. Having adopted the Magistrate Judge's findings and conclusions with respect to Rules 23(a)(1) and (a)(4), this discussion will focus on the question of whether the commonality requirement of Rule 23(a)(2) and the typicality requirement of Rule 23(a)(3) are met. If the requirements of Rules 23(a)(2) and (3) are met, the court will proceed to analyze whether Plaintiff's proposed class meets the requirement of Rule 23(b)(3) that common legal issues predominate.

I. Marin v. Evans, Mendoza v. Zirkle Fruit, and Trollinger v. Tyson Foods, Inc.

Central to the court's consideration of Plaintiff's motion for class certification is a trio of district court cases that each address motions for certification of class actions in cases such as the one at bar where the plaintiffs allege their rate of pay has been depressed by an unlawful scheme to employ immigrant laborers. Marin v. Evans, 2008 WL 2937424 (E.D. Wash. 2008); Trollinger v. Tyson Foods, Inc., 2006 WL 2924938 (E.D. Tenn. 2006); and Mendoza v. Zirkle Fruit Co., 222 F.R.D. 439 (E.D. Wash. 2004) each represent a district court's approach to motions for class certification in the factual context of a complaint alleging members of the putative class were damaged by a scheme or conspiracy wherein the defendants knowingly hired illegal aliens who were not entitled to work in the United States in order to drive down wages in violation of RICO.*fn3 In all three cases, as in the instant case, the RICO claims were predicated on the allegation of violation of the penalty provisions of the INA, 8 U.S.C. § 1324 (referred to in Trollinger as the "Immigration Reform and Control Act"). None of these cases is, of course, controlling on this court's determination of Plaintiff's motion for class certification. However, the fact that district courts overseeing these and other similar cases appear to have regularly granted class certification on facts not significantly different from the facts of this case cautions against any impulse to give less than careful consideration to Plaintiff's objections to the F&R's.

As noted previously, the court's decision on Plaintiff's motion for class certification turns primarily on the issues of whether Plaintiff's proposed class meets the Rule 23(a )(2) and (3) requirements of commonality and typicality. The court will consider each in turn. Should the court find the requirements of Rule 23(a) are met, it will take up the issue of whether Plaintiff's proposed class also meets the requirement of Rule 23(b)(3) that common legal issues predominate over individual legal issues; an issue not addressed by the April 3 F&R's.

II. Commonality

"Rule 23(a)(2) requires that for certification there must be 'questions of law or fact common to the class.'" Trollinger, 2006 WL 2924938 at *5. The commonality requirement of Rule 23(a)(2) is less stringent that the predominance requirement of Rule 23(b)(3). Id. at *6. For purposes of the commonality requirement, "[t]he existence of shared legal issues with divergent factual predicates is sufficient, as is the common core of salient facts coupled with disparate legal remedies within the class." Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). "The commonality test is qualitative rather than ...


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