Beltran v. Noonan et al
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE; This Court respectfully RECOMMENDS that the Joint Motion by Certain Defendants to Dismiss the FirstAmended Complaint and Certification of Compliance with Civil Practice Standard 7.1D. 135 be DENI ED; RECOMMENDS Defendant Cultural Care, Inc.s Motion to Dismiss All Claims in First Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(B)(6) 127 , Motion to Dismiss the First Amended Complaint by Defendant InterExchange, Inc. 130 , D efendant American Cultural Exchange, L.L.C., D/B/A Go Au Pairs Motion to Dismiss Counts I, III, IV, V, VI, VII, VIII, IX and X of the First Amended Complaint 131 , Defendant American Institute for Foreign Studys Motion to Dismiss Amended Complaint [ 136] should be GRANTED in part and DENIED in part. Additionally, it is ORDERED that Defendant Cultural Care, Inc.s Motion to Strike Material in PlaintiffsConsolidated Opposition to Defendants Motions to Dismiss 206 and PlaintiffsCross-Motion to Strike Certain Exhibits Submitted by the Defendants 221 are DENIED as moot, by Magistrate Judge Kathleen M. Tafoya on 2/22/16. (morti, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 14–cv–03074–CMA–KMT
JOHANA PAOLA BELTRAN,
DAYANNA PAOLA CARDENAS CAICEDO, and
ALEXANDRA IVETTE GONZALEZ,
GREAT AUPAIR, LLC,
EXPERT GROUP INTERNATIONAL INC., d/b/a Expert AuPair,
EURAUPAIR INTERCULTURAL CHILD CARE PROGRAMS,
CULTURAL HOMSTAY INTERNATIONAL,
CULTURAL CARE, INC. d/b/a Cultural Care Au Pair,
AU PAIR INTERNATIONAL, INC.,
APF GLOBAL EXCHANGE, NFP, d/b/a AuPair Foundation,
AMERICAN INSTITUTE FOR FOREIGN STUDY d/b/a Au Pair in America,
AMERICAN CULTURAL EXCHANGE, LLC, d/b/a/ GoAuPair,
AGENT AU PAIR,
A.P.EX. AMERICAN PROFESSIONAL EXCHANGE, LLC d/b/a/ ProAuPair, and
20/20 CARE EXCHANGE, INC. d/b/a The International Au Pair Exchange,
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Magistrate Judge Kathleen M. Tafoya
This case comes before the court on “Defendant Cultural Care, Inc.’s Motion to Dismiss
All Claims in First Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(B)(6)”
(Doc. No. 127, filed April 17, 2015), “Motion to Dismiss the First Amended Complaint by
Defendant Interexchange, Inc.” (Doc. No. 130, filed April 20, 2015), “Defendant American
Cultural Exchange, LLC, D/B/A Go Au Pair’s Motion to Dismiss Counts I, III, IV, V, VI, VII,
VIII, IX and X of the First Amended Complaint” (Doc. No. 131, filed April 20, 2015), “Joint
Motion by Certain Sponsor Defendants to Dismiss the First Amended Complaint and
Certification of Compliance with Civil Practice Standard 7.1D.” (Doc. No. 135, filed April 20,
2015), and “Defendant American Institute for Foreign Study’s [“AIFS”] Motion to Dismiss
Amended Complaint” (Doc. No. 136, filed April 20, 2015). Plaintiffs filed a “Consolidated
Opposition to Defendants’ Motions to Dismiss” (Doc. No. 199 [“Resp.”], filed July 10, 2015)
and each Defendant replied. (Doc. Nos. 207, 211, 214, 215, 216).
Also before the court is “Defendant Cultural Care, Inc.’s Motion to Strike Material in
Plaintiffs’ Consolidated Opposition to Defendants’ Motions to Dismiss” (Doc. No. 206, filed
August 6, 2015), to which Plaintiffs have responded (Doc. No. 220, August 31, 2015) and
Defendant replied. (Doc. No. 225, filed September 17, 2015). Finally, Plaintiffs filed a “CrossMotion to Strike Certain Exhibits Submitted by the Defendants” (Doc. No. 221, filed August 31,
2015), to which certain Defendants responded (Doc. No. 227, filed September 24, 2015) and
Plaintiffs replied. (Doc. No. 231, filed October 8, 2015).
STATEMENT OF THE CASE
This case arises out of the au pair program, made possible by the J-1 visa program, and
currently overseen by the United States Department of State (“DOS”). (Doc. No. 101 [“Am.
Comp.”] at 2). The J-1 visa program was created to facilitate cultural exchange between nations
and the applicable visas are carried out under the authority of the Mutual Educational and
Cultural Exchange Act of 1961 (“Cultural Exchange Act”). (Am. Comp. at 2, 10; 22 U.S.C. §
2451, et seq.) The J-1 au pair program was created in 1986 and was administered by the United
States Information Agency (“USIA”). (Am. Comp. at 12.) Initially, the au pair program was
considered solely a “cultural exchange” program and was not subject to any employment or labor
law protections. (Id.) However, the au pairs were required to work 45 hours per week providing
child care services to their host families. (Id.) Under this program, the au pairs were paid
$100.00 per week for their services, plus room and board. (Am. Comp. at 13.) The USIA
delegated oversight to entities that it designated to act as sponsors (“Sponsors”) for the J-1 visa
au pair program. (Am. Comp. at 11.)
In 1990, in response to a Congressional request, the General Accounting Office (“GAO”)
issued a report to Congress entitled, “Inappropriate Uses of Educational and Cultural Exchange
Visas” (the “GAO Report”), in which the GAO determined, inter alia, that the au pair program
was in reality a work program administered under the auspices of “cultural exchange” that
required 45 hours per week of work. 60 Fed. Reg. at 8547-48 (Feb. 15, 1995) (codified at 22
C.F.R. pt. 514).1 “Authorizing J visas for participants and activities that are not clearly for
educational and cultural purposes as specified in the act dilute[s] the integrity of the J visa and
obscures the distinction between the J visa and other visas granted for work purposes.” Id. at
8548. Similar objections to the au pair program were raised by the DOS, the Immigration and
Naturalization Service and the U.S. Department of Labor (“DOL”), all of whom agreed with the
GAO Report that the au pair program possessed all the characteristics of a full-time child care
work program. Id.
The remaining history of the au pair program and the background leading to the changes
codified in 1995 are set forth in the Amended Complaint at 11-15.
Following the GAO report and several subsequent tragic events involving au pairs,
Congress authorized and directed the USIA to promulgate regulations governing au pair
placements. Id. The USIA recognized that the au pair program lacked a bona fide educational
component sufficient to meet the requirements of the Cultural Exchange Act. Id. Critics of the
program had complained that it amounted to no more than the import of cheap foreign labor in
the guise of an educational and cultural exchange program. Id. at 8550. The USIA consulted
with the DOL regarding the employment aspect of the program and the DOL advised the USIA
that the au pair program created an employment relationship and fell under the purview of the
Fair Labor Standards Act (“FLSA”). Id.
In December 1994, the USIA, in direct consultation with the DOL, conducted a formal
rulemaking to issue a rule recognizing that au pair participants are full-time employees entitled
to the protections afforded all employees under domestic labor laws, including the FLSA. Id. at
8547-48, 8550-51. The final rule required compensation of au pairs “at a rate of not less than
$115.00 per week” plus a weekly credit reflecting the actual cost incurred for room and board,
not to exceed $76.00 per week. Id. at 8551. (emphasis in original).2
In June 1997, the USIA issued an interim rule in order to “ensure that there is no future
confusion regarding the payment of minimum wage.” 62 Fed. Reg. at 34633 (June 27, 1997)
(codified at 22 C.F.R. pt. 514). Rather than stating the specific minimum amount an au pair had
The new regulation also included a requirement that au pairs pursue six hours of college credit,
although they were allowed to audit their courses. Id. at 8548-49. The final regulation provided,
“Sponsors shall require that during the period of program participation, all au pair participants
are enrolled in an accredited post-secondary institution for not less than six hours of academic
credit or its equivalent. As a condition of program participation, host family participants must
agree to facilitate the enrollment and attendance of the au pair and to pay the cost of such
academic course work in an amount not to exceed $500.” Id. at 8553. This requirement remains
today at 29 U.S.C. § 62.31(k)(1).
to be compensated, the USIA amended the rule to provide, “Sponsors shall require that au pair
participants: (1) Are compensated at a weekly rate based upon 45 hours per week and paid in
conformance with the requirements of the [FLSA] as interpreted and implemented by the
[DOL].” Id. at 34634.3 This same rule is now codified at 22 C.F.R. § 62.31(j)(1).
Today, the DOS, rather than the USIA, oversees the au pair program. (Am. Comp. at
19.) Sponsor Defendants are the exclusive entities authorized to recruit and place au pairs with
host families in the United States. (Am. Comp. at 11.) DOS regulations mandate that Sponsors
ensure various conditions of employment for the au pairs, including but not limited to that host
families are capable of and do meet various requirements and that au pairs are compensated in
compliance with labor laws and do not work beyond specified limits. (Am. Comp. at 11-12.)
The Sponsors’ extensive role throughout the au pair program is discussed in more detail herein.
Plaintiffs named each of the designated Sponsors as Defendants in this action
(collectively referred to herein as “Sponsors” or “Defendants”). Plaintiffs allege that in spite of
the fact that the applicable regulations require that au pairs receive not less than the applicable
minimum wage as compensation, Sponsors have conspired and agreed to set all of the au pairs’
weekly wages at the purported minimum amount, currently $195.75 per week plus room and
board. (Am. Comp. at 16-33.)4 Additionally, Plaintiffs contend the Sponsors falsely inform both
The rule also provided for the first time that au pairs were not to work more than ten hours per
day, amended from “a reasonable number of hours per day,” in addition to the forty-five hour per
week limitation. Id. The USIA noted the necessity for this change due to “the existing standard
[being] subject to abuse and a source of dispute.” Id. at 34633. (See also Am. Comp. at 16.)
The Amended Complaint notes that six of the Sponsors offer a “professional” or
“extraordinary” au pair position for higher wages if the au pair meets specified criteria, such as
two years of child care study plus two years of full-time child care experience. (Am. Comp. at
18.) Plaintiffs explain that relatively few au pairs obtain employment in these positions and that
they have little economic significance on the overall au pair market. (Am. Comp. at 18-19.)
au pairs and host families that this minimum wage is the maximum wage au pairs are permitted
to receive. (Am. Comp. at 30, 33-34, 40-60, 73-74.)5 Sponsors universally advertise that the au
pairs fees will be $195.75 per week plus room and board. (Am. Comp. at 22-29.) The required
fees that each host family must pay to each Sponsor range in amount from $ 7,000.00 to
By this action, Plaintiffs assert, on behalf of themselves and all those similarly situated,
federal claims under the Sherman Antitrust Act, 15 U.S.C. § 1, et seq., the Racketeer Influenced
and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1964, et seq., and the FLSA, as well as
state law claims based on Breach of Fiduciary Duty, Negligent Misrepresentation, Constructive
Fraud or Fraudulent Concealment, Consumer Protection laws, Breach of Contract or Quasi
Contract, Unpaid Wages, and claims pursuant to various state wage laws.
Failure to State a Claim Upon Which Relief Can Be Granted
Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss
a claim for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6).
“The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence that the
parties might present at trial, but to assess whether the plaintiff’s complaint alone is legally
sufficient to state a claim for which relief may be granted.” Dubbs v. Head Start, Inc., 336 F.3d
1194, 1201 (10th Cir. 2003) (citations and quotation marks omitted).
Regardless, Plaintiffs’ claims pertain solely to standard au pairs, which is also how the positions
are generally referenced on the Sponsors’ websites and materials. (Am. Comp. at 18-19, 22-29.)
Notably, this minimum wage does not change regardless of the number of children in the home.
“A court reviewing the sufficiency of a complaint presumes all of plaintiff’s factual
allegations are true and construes them in the light most favorable to the plaintiff.” Hall v.
Bellmon, 935 F.2d 1106, 1198 (10th Cir. 1991). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the
plaintiff pleaded facts which allow “the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Id. The Iqbal evaluation requires two prongs of analysis.
First, the court identifies “the allegations in the complaint that are not entitled to the assumption
of truth,” that is, those allegations which are legal conclusion, bare assertions, or merely
conclusory. Id. at 679-81. Second, the Court considers the factual allegations “to determine if
they plausibly suggest an entitlement to relief.” Id. at 681. If the allegations state a plausible
claim for relief, such claim survives the motion to dismiss. Id. at 679.
Notwithstanding, the court need not accept conclusory allegations without supporting
factual averments. Southern Disposal, Inc., v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir.
1998). “[T]he tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S at 678.
Moreover, “[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the
elements of a cause of action will not do.’ Nor does the complaint suffice if it tenders ‘naked
assertion[s]’ devoid of ‘further factual enhancement.’” Id. (citation omitted). “Where a
complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of
the line between possibility and plausibility of ‘entitlement to relief.’” Id. (citation omitted).
In evaluating a Rule 12(b)(6) motion to dismiss, courts may consider not only the
complaint itself, but also attached exhibits and documents incorporated into the complaint by
reference. Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (citations omitted).
“[T]he district court may consider documents referred to in the complaint if the documents are
central to the plaintiff’s claim and the parties do not dispute the documents’ authenticity.” Id.
(internal quotations omitted).
1. Antitrust claim
Plaintiffs contend that Defendants conspired and agreed to fix the standard au pair wages
at the purported minimum wage. They assert that Defendants’ actions in this regard constitute a
per se violation of the Sherman Antitrust Act (the “Sherman Act”).
As an initial matter, Defendant Cultural Care, Inc. requests that Plaintiffs’ claim under
the Sherman Act be dismissed because the federal government expressly mandated that Sponsors
ensure host families paid au pairs a weekly stipend in the amount of $195.75, and therefore, they
are immune from antitrust liability under the federal instrumentality and/or implied immunity
doctrine. (Doc. No. 127 at 9-10.) This argument misses the point. There is no evidence that the
federal government “directs,” or in any other way mandates, that an au pair’s wages are set at
$195.75. 6 Instead, since the au pair program became formally subject to wage and hour laws,
the applicable laws and regulations have required that Sponsors ensure an au pair’s wages
Notably, no other Defendant joined Cultural Care’s argument in this regard.
comply with FLSA requirements, including that employers pay employees the applicable
minimum wage. See 60 Fed. Reg. 8547 (February 15, 1995) (codified at 22 C.F.R. pt. 514); 62
Fed. Reg. 34632 (June 27, 1997) (amending 22 C.F.R. pt. 514); 22 C.F.R. § 62.31(j)(1).
Defendant Cultural Care’s claim that it is entitled to immunity under a theory of federal
instrumentality and/or implied immunity is wholly without merit.
The remaining Defendants, as well as Cultural Care, request the court dismiss this claim
because Plaintiffs’ allegations are insufficient to demonstrate a conspiracy of price-fixing
The Sherman Act is a federal statute prohibiting monopolies and combinations in
restraint of trade. Section One of the Sherman Act provides, in relevant part, “Every contract,
combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce
among the several States, or with foreign nations, is declared to be illegal.” 15 U.S.C. § 1.
“Because § 1 of the Sherman Act does not prohibit all unreasonable restraints of trade but only
restraints effected by a contract, combination, or conspiracy, the crucial question is whether the
challenged anticompetitive conduct stems from independent decision or from an agreement, tacit
or express.” Twombly, 550 U.S. at 553 (internal citations and brackets omitted). Accordingly, at
the pleading stage, stating a § 1 claim “requires a complaint with enough factual matter (taken as
true) to suggest that an agreement was made ... [and] to raise a reasonable expectation that
discovery will reveal evidence of illegal agreement.” Id. at 556. Such an agreement is
established by evidence that the conspiring parties “had a conscious commitment to a common
scheme designed to achieve an unlawful objective.” Monsanto Co. v. Spray–Rite Serv. Corp.,
465 U.S. 752, 764 (1984).
If the complaint does not directly allege an agreement but instead makes only
“allegations of parallel conduct . . . in order to make a § 1 claim, they must be placed in a context
that raises a suggestion of a preceding agreement, not merely parallel conduct that could just as
well be independent action.” Twombly, 550 U.S. at 557. That is, the complaint must contain
“allegations plausibly suggesting (not merely consistent with) agreement.” Id.
Defendants rely on Twombly and contend that Plaintiffs have alleged only parallel
conduct that does not raise a suggestion of an agreement, that Defendants’ alleged conduct is
consistent with unilateral conduct and Defendants’ alleged admissions are too vague. In
Twombly, the plaintiffs asserted a claim under the Sherman Act alleging that regional telephone
companies were engaged in “parallel behavior.” Id. at 564-65. In other words, they were not
competing but instead, maintaining their services within their respective regions in order to
refrain from competing against each other and to inhibit the growth of upstart companies. Id. at
550-51, 564-65. However, § 1 of the Sherman Act, under which the suit had been brought, does
not require sellers to compete; it just forbids their agreeing or conspiring not to compete. Id. at
553. Thus, as the court pointed out, a complaint that merely alleges parallel behavior alleges
facts that are equally consistent with both an inference that the defendants are conspiring and an
inference that the conditions of their market have enabled them to avoid competing without
having to agree not to compete. Id. at 554. The latter does not constitute a violation of the
The plaintiffs in Twombly offered no allegations that the defendants had agreed not to
compete. They simply relied on the fact that the defendants did not compete to argue that there
must be an agreement between them to that effect. Id. The court ruled that the plaintiffs’
allegations, which consisted of nothing more than parallel conduct without any allegations of
actual agreement between the defendants, suggested that the lack of competition was “the
natural, unilateral reaction of each [defendant] intent on keeping its regional dominance.” Id. at
566. See also In re Musical Instruments and Equip. Antitrust Litig., 798 F.3d 1186, (9th Cir.
2015) (“Recognizing that parallel conduct may arise on account of independent business
decisions rather than an illegal agreement, Twombly requires that when allegations of parallel
conduct are set out to make a § 1 claim, plaintiffs must plead enough nonconclusory facts to
place that parallel conduct in a context that raises a suggestion of a preceding agreement.”
(internal quotations omitted)).
Plaintiffs set forth the following relevant evidence in support of their claim under the
Sherman Act: (1) At least one Sponsor, Cultural Care, has informed prospective au pairs, in
writing, that the weekly stipend arranged by Cultural Care would be “the same regardless of
which au pair agency you use.” (Am. Comp. at 20; Resp. at 14); (2) Sponsors informed au pairs
and host families that $195.75/week plus room and board is the only permitted compensation for
au pairs (Am. Comp. at 73-74, 76-77); (3) As the exclusive entities authorized to recruit, provide
training, place and supervise au pairs with host families in the United States, Defendants control
au pair opportunities within the United States (Am. Comp. at 10-11, Resp. at 14); (4) The
Sponsors’ industry structure facilitates collusion as they are a relatively small group, 15
agencies, with 100% market share (Am. Comp. at 32); (5) In addition to industry structure, many
Sponsors are members of the Alliance for International Education and Cultural Exchange and the
International Au Pair Association (“IAPA”), individuals from certain Sponsors sit on IAPA’s
Board, and the featured speaker at a recent IAPA conference published an article arguing for
strict maintenance of the fixed $195.75 weekly wage for standard au pairs, stating that “host
families do each other a disservice when they start to compete with each other (or try to stand out
as a ‘better family’) by offering more pocket money. We don’t want au pairs shopping for a
higher stipend.” (Am. Comp. at 30-31); (6) The Sponsors uniformly advertise au pair wages at
an identical amount even though the federal government does not require that au pairs only
receive minimum wage (Am. Comp. at 13-15, 20, 22-29; Resp. at 15, see also supra); (7) There
are no adjustments to advertised compensation with relation to geographic differences, varying
state laws and/or the number of children in the home (Am. Comp. at 29-30; Resp. at 15); (8) By
depressing wages for au pair services, the Sponsors reap artificially high profits because if the
host family’s direct cost for an au pair does not increase, then any increase, while still costing
the family less than a full-time nanny on the open market, goes to the Sponsor in the form of
fees, and keeping the cost down will theoretically increase the number of potential host families
(Am. Comp. at 32); (9) Representatives of certain Sponsors have specifically admitted that the
Sponsors agreed to fix au pair wages at the minimum wage rate (Am. Comp. at 20-22; Resp. at
15.); and, (10) Defendants advertise that their labor costs are set lower than the cost of a
comparable child-care worker in the free market. (Am. Comp. at 5, 54, 55; Resp. at 23-24.)
Plaintiffs also contend that in a competitive marketplace, at least some Defendants would either
offer higher salaries to potential au pairs, thereby attracting more and higher quality au pairs and
charging higher fees to families, or the Sponsors might have to compete with agencies that place
other domestic workers, such as nannies, or react to market forces, including location or higher
salaries based on unique childcare responsibilities, such as the number of children. (Resp. at 23.)
None of these natural consequences have occurred.
The court finds Plaintiffs have plead sufficient factual allegations that the Sponsors
entered into an agreement to set the au pairs stipend at the purported lowest minimum wage.
The court must take these factual allegations as true when considering Defendants’ Motions to
Dismiss, and they are sufficiently specific to “raise a reasonable expectation that discovery will
reveal evidence of illegal agreement.” Twombly, 550 U.S. at 556. Far from invoking mere
antitrust “buzz words,” Plaintiffs' allegations include facts that suggest “a conscious commitment
to a common scheme designed to achieve an unlawful objective.” Monsanto, 465 U.S. at 764.
Defendants’ contention that Plaintiffs have failed to state claim under the Sherman Act
seems to be based on an approach of considering each allegation individually and judging its
sufficiency. However, the court must consider Plaintiffs’ allegations as a whole. See Evergreen
Partnering Group, Inc. v. Pactiv Corp., 720 F.3d 33, 47 (1st Cir. 2013) (“While each of
Evergreen's allegations of circumstantial agreement standing alone may not be sufficient to
imply agreement, taken together, they provide a sufficient basis to plausibly contextualize the
agreement necessary for pleading a § 1 claim.”). For example, Defendants argue that their
uniform advertisement of $195.75 as an au pair’s weekly stipend is insufficient to state an
antitrust claim because it is “merely parallel conduct that could just as well be independent
action.” (Doc. No. 135 at 16, 18.) However, Plaintiffs do not rely on this conduct alone. The
Amended Complaint alleges a mixture of “parallel behaviors, details of industry structure, and
industry practices, that facilitate collusion.” In re Text Messaging Litig., 630 F.3d 622, 627 (7th
Defendants also argue that the alleged conduct is not actually parallel because Defendants
advertise differing weekly stipends based on the individual au pair. (Doc. No. 84 at 3-4; Doc.
No. 135 at 17.) However, this argument is disingenuous. The only instance in which Defendants
advertise a higher compensation rate is for non-standard positions. (Am. Comp. at 22-29.) Each
of the Defendants advertise standard au pair services at the same minimum rate. (Id.) Plaintiffs,
and those they seek to represent in a class action, are standard au pairs. (Am. Comp. at 79-86,
see also supra.) The only issues raised by Plaintiffs and therefore, the only issues relevant to the
current inquiry, pertain to Defendants’ practices with regard to standard au pairs.
Defendants further contend that because their host families are required to pay their au
pairs in conformance with the FLSA, then it “certainly is plausible that the [Defendants] would
conclude that they should inform host families that the cost of hosting an au pair includes a
weekly stipend of $195.75.” (Doc. No. 135 at 18.) Defendants are over-simplifying Plaintiff’s
allegations. Plaintiffs have alleged far more than merely that Defendants inform host families of
their minimum legal requirements. Plaintiffs clearly assert that Defendants have unlawfully ‘set’
au pair wages at the bare minimum and also acted deceptively toward au pairs and host families
in doing so.
Defendants also assert that Plaintiff’s allegations regarding admissions by certain
Sponsor representatives that an agreement exists between the Sponsors to keep standard au pair
wages at exactly $195.75 per week should be disregarded as impermissibly vague. (Doc. No.
135 at 20-21.) In support of this argument, Defendants rely primarily on In re Text Messaging
Antitrust Litig., 782 F.3d 867 (7th Cir. 2015) to insist that the alleged admissions are insufficient
because they do not include a specific time, place or person involved, nor do they include
whether the speakers ever communicated with representatives from the other Sponsors.
However, as Plaintiffs point out, the In re Text Messaging case upon which Defendants rely was
not decided at the dismissal stage but instead, on summary judgment. See In re Text Messaging,
782 F.3d at 869. Earlier in the proceedings, when the case reached the Seventh Circuit via an
interlocutory appeal by the defendants after the district court denied their motion to dismiss, the
court upheld the trial court ruling, explaining:
What is missing, as the defendants point out, is the smoking gun in a price-fixing
case: direct evidence, which would usually take the form of an admission by an
employee of one of the conspirators, that officials of the defendants had met and
agreed explicitly on the terms of a conspiracy to raise price. The second amended
complaint does allege that the defendants “agreed to uniformly charge an
unprecedented common per-unit price of ten cents for text messaging services,”
but does not allege direct evidence of such an agreement; the allegation is an
inference from circumstantial evidence. Direct evidence of conspiracy is not a
sine qua non, however. Circumstantial evidence can establish an antitrust
conspiracy. We need not decide whether the circumstantial evidence that we have
summarized is sufficient to compel an inference of conspiracy; the case is just at
the complaint stage and the test for whether to dismiss a case at that stage turns on
the complaint's “plausibility.”
In re Text Messaging Litig., 630 F.3d 622, 628-29 (7th Cir. 2010).
Here, Plaintiffs are not required to have direct evidence of admissions in order to support
their claims. Likewise, standing alone, Plaintiffs’ current admissions allegations might not be
sufficient to allege an antitrust violation. However, as noted, in looking at Plaintiffs’ Amended
Complaint as a whole, they have provided a sufficiently plausible claim to warrant allowing
them to proceed to discovery.
The court in In re Text Messaging also noted that “an industry structure that facilitates
collusion constitutes supporting evidence of collusion.” Id. at 627-28. “[T]he complaint in this
case alleges that the four defendants sold 90% of U.S. text messaging services, and it would not
be difficult for such a small group to agree on prices and to be able to detect ‘cheating’
(underselling the agreed price by a member of the group) without having to create elaborate
mechanisms, such as an exclusive sales agency, that could not escape discovery by the antitrust
authorities.” Id. at 628. In the present case, Defendants control 100% of the market share and
they could easily detect cheating on an agreement regarding wages considering they each
advertise au pair compensation on their websites. Although Plaintiffs have asserted theories
regarding the Sponsors’ opportunities to meet and make agreements, see Am. Comp. at 30-31,
the fact is that similar to in In re Text Messaging, the industry structure facilitates collusion.
Plaintiffs’ allegations, taken as true and considered as a whole, present a plausible claim
under the Sherman Act. Twombly does not require Plaintiffs prove their case in the Amended
Complaint, nor does it impose a summary judgment-like standard at the pleading stage.
Plaintiffs are held to a plausibility, rather than a probability, standard at this stage and they have
met it. See Twombly, 550 U .S. at 556.
Plaintiffs assert FLSA claims based upon their position that Defendants are required to
compensate them for the mandatory week long training, room and board is unlawfully credited
toward their compensation, including but not limited to during vacations when they are not
provided room and board, and they are entitled to overtime compensation.7 Defendants urge the
court to dismiss Plaintiffs’ FLSA claims because they are not Plaintiffs’ employers, room and
board is appropriately credited toward Plaintiffs’ compensation and Plaintiffs are exempt from
The court notes that Defendants do not request dismissal of Plaintiffs’ FLSA claims based upon
Defendants’ failure to pay them for the one-week mandatory training, nor Plaintiffs’ claims that
room and board is unlawfully deducted from their weekly stipends during vacations.
a. Defendants’ status as employers
Plaintiffs contend that Defendants are ‘joint employers’ of au pairs with the host
families. Defendants argue that the DOL has identified the host family as an au pair’s employer.
(Doc. No. 130 at 19-20.) Defendants also argue that they do not qualify as an employer under
the Tenth Circuit’s economic realities test and therefore, any employment based claim against
them should be dismissed. (Doc. No. 130 at 20; Doc. No. 131 at 11-14.)
The court notes that Defendants have not presented any federal regulation or guideline
affirmatively indicating that they are not employers within the au pair program. Merely because
the DOL has identified the host family as an employer and/or recognizes that the au pair
program creates an employment relationship is not dispositive of whether Defendants may be
considered a joint employer.
Further, resolution of whether Defendants are joint employers is usually premature at this
stage of the proceedings. In light of its obligation to accept as true all well-pleaded factual
allegations and view those allegations in the light most favorable to Plaintiffs, see Hall, 935 F.2d
at 1198, this court is not persuaded dismissal is appropriate at this stage. See also Camara v.
Matheson Trucking, Inc., et al., No. 12-cv-03040-CMA-CBS, 2013 WL 9721026, at *3 (D.
Colo. 2013) (noting, “as ‘a general rule, determining whether an entity qualifies as an employer
is a fact issue for the jury.’” (quoting Bristol v. Bd. of Cnty. Comm’rs of Clear Creek, 312 F.3d
1213, 1221 (10th Cir. 2012)).
The FLSA defines “employer” as “any person acting directly or indirectly in the interest
of an employer in relation to an employee.” 29 U.S.C. § 203(b). The FLSA defines “employee”
as, with enumerated exceptions not pertinent to this matter, “any individual employed by an
employer.” Id. at § 203(e)(1). The definition is necessarily a broad one in accordance with the
remedial purpose of the FLSA. See United States v. Rosenwasser, 323 U.S. 360, 363 (1945).
The FLSA defines “to employ” as “to suffer or permit to work” but fails to define or elaborate on
“suffer or permit to work.” 29 U.S.C. § 203(g); Norton v. Worthern Van Serv., Inc., 839 F.2d
653, 654 (10th Cir. 1988).
To determine whether an individual is an employee under the FLSA, the Tenth Circuit
applies the “economic realities test.” Baker v. Flint Eng'g & Constr. Co., 137 F.3d 1436, 1439
(10th Cir. 1998). In Baker, the court held that “[t]he economic reality test includes inquiries into
whether the alleged employer has the power to hire and fire employees, supervises and controls
employee work schedules or conditions of employment, determines the rate and method of
payment, and maintains employment records.” Id. (citing Watson v. Graves, 909 F.2d 1549,
1553 (5th Cir.1990)). In applying the economic realities test, courts consider the following
factors: “(1) the degree of control exerted by the alleged employer over the worker; (2) the
worker’s opportunity for profit or loss; (3) the worker’s investment in the business; (4) the
permanence of the working relationship; (5) the degree of skill required to perform the work; and
(6) the extent to which the work is an integral part of the alleged employer’s business.” Baker,
137 F.3d at 1440. However, the Tenth Circuit has made it clear that these factors are not
exclusive as “no single set of factors” controls the analysis of whether an entity is an employer.
Harbert v. Healthcare Servs. Group, Inc., 173 F. Supp. 2d 1101, 1106 (D. Colo. 2001).
Here, Plaintiffs have alleged facts upon which a reasonable person could conclude that
they were jointly employed by Defendants and their respective host families. According to
Plaintiffs’ allegations, Defendants dictate the wages of the au pairs. (See generally Am. Comp.)
Further, Defendants have statutory obligations to recruit au pairs and place them with host
families, as well as supervise and monitor au pairs throughout the time they are employed as the
same. (Am. Comp. at 11, 16-17; Resp. at 35.) Defendants are required to place each au pair
with a host family that lives within one hour’s driving time from one of Defendant’s local
organizational representatives who is authorized to act on the respective Defendant’s behalf in
both routine and emergency matters arising from the au pair’s employment with the host family.
22 C.F.R. §62.31(c)(5). Each au pair’s local organizational representative is required to have
personal monthly contact, as well as twice monthly for the first two months following initial
placement, with the au pair and host family and maintain records of the same, including noting
any issues or problems. 22 C.F.R. §62.31(c)(6), (7); 22 C.F.R. § 62.3 (l)(1). Defendants are also
required to ensure that each local organizational representative is receiving “adequate support
services by a regional organizational representative.” 22 C.F.R. § 62.31(c)(9). Additionally,
Defendants’ regional organizational representatives or counselors are required to make quarterly
contact with each au pair and host family and maintain records of this contact. 22 C.F.R. §
22 C.F.R. § 62.31(j)(1)-(4) makes it the responsibility of Defendants to “require that au
pair participants” receive certain conditions of employment, including: “(1) are compensated at a
weekly rate based upon 45 hours of child care services per week and paid in conformance with
the requirements of the [FLSA] as interpreted and implemented by the [DOL] . . . . ; (2) Do not
provide more than 10 hours of child care per day, or more than 45 hours of child care in any
week. . . . . ; (3) Receive a minimum of one and one-half days off per week in addition to one
complete weekend off each month; and (4) Receive two weeks of paid vacation.” (See Am.
Comp. at 11; Resp. at 29.) Defendants are required to provide au pairs with training that au
pairs are likewise required to receive. (Am. Comp. at 5-6, 47, 61, 62, 63, 68, 70, 73, 75, 77, 78.)
See also 22 C.F.R. § 62.31(g). Defendants are required to provide the au pairs with a “copy of
all operating procedures, rules and regulations, including a grievance process, which govern the
au pair’s participation in the exchange program.” 22 C.F.R. § 62.31(f).
Defendants act as the arbitrators of any disputes the au pairs have with their host families
regarding wages and hours. (Am. Comp. at 47, 61.) Defendants have the ability to remove au
pairs from the program and cause their removal from this country. (Id.) Defendants draft the
contracts between the au pairs and their host families. (Am. Comp. at 61.) Defendants provide
health insurance to the au pairs. (Id.) Some au pairs work at the Defendants’ training sessions
and local coordinator sessions. (Id.) Defendants have the ability to remove an au pair from a
particular host family. (Id.) Most significant, Defendants have the ability to terminate an au
pair’s employment, even if the host family does not want to do so. (Id.) Moreover, the host
families cannot terminate an au pair without approval from the applicable Defendant. (Id.)
Defendants rely on Ivanov v. Sunset Pools Mgmt., Inc., 567 F. Supp. 2d 189 (D.D.C.
2008) to argue that they are not employers because they are merely complying with DOS
regulations in administering and monitoring the au pair program. This argument is unavailing.
Significantly, DOS regulations do not require Defendants to dictate the au pair’s wages. While
Defendants dispute this assertion, Plaintiffs have sufficiently alleged the same for this stage of
the proceedings. See supra. Further, while Ivanov holds some similarities to the present case, it
In Ivanov, two plaintiffs traveled to the United States to work as lifeguards. Id. at 190.
They were recruited by Defendant Intrax, an international firm that recruits foreign citizens for
“work-travel” opportunities within the United States. Id. Intrax worked with host companies,
similar to Defendant Sunset, to match participants with appropriate employment. Id. Intrax also
contracted with organizations in other countries to assist with the administration of its services.
Id. The plaintiffs went to Zip Travel in Bulgaria begin Intrax’s recruitment process. Id. A
Sunset representative interviewed the plaintiffs for the lifeguard positions. Id. Intrax assisted the
plaintiffs in obtaining their J-1 visas and entered into a Conditions Agreement with them. Id.
The plaintiffs paid Intrax for these services. Id. Ultimately, the plaintiffs worked for Sunset for
six months but worked in excess of forty hours per week and did not receive overtime
compensation. Id. They brought suit against Sunset and Intrax under the FLSA. Id. All parties
moved for summary judgment. Id.
With regard to Intrax’s status as an employer, the plaintiffs relied on the fact that Intrax
required them to attend an orientation session upon their arrival in the United States, report any
address changes, notify Intrax of a change in employment and obtain authorization to leave their
positions. Id. at 195. The court found that none of these actions were related to the plaintiffs’
employment as a lifeguard and were also required by DOS regulations. Id. The plaintiffs also
pointed out that Intrax helped the plaintiffs obtain health insurance, secure and maintain their
visas and other immigration forms and requested updates on their employment status. Id. The
court found that each of these actions were also required by DOS regulations and were therefore
insufficient to establish that Intrax was a joint employer of the plaintiffs. Id.
In the present case, Defendants rely on these facts to argue that they are also not joint
employers. However, the remainder of the court’s reasoning in Ivanov is particularly relevant to
this case. The court explained, “[T]he undisputed evidence shows that Intrax did not assign or
direct plaintiffs’ schedule or pay. In fact, the wages of its participants are set by the host
company, such as Sunset; leaving Intrax’s role to communicating information received from
Sunset to plaintiffs via the Premium Placement Confirmation Form. Indeed, nothing in the
Premium Placement Confirmation Form indicates that Intrax directed Sunset what to pay
plaintiffs. To the contrary, the document merely indicates that Sunset will abide by the wages it
provided to Intrax for inclusion in the form.” Id. Additionally, there is no indication Intrax had
any authority to terminate the plaintiffs’ employment. Id. at 195-96.
The court is not convinced Defendants’ statutory obligations should be inherently
excluded from consideration of whether they are joint employers, especially given how much
more in depth the obligations are than those discussed in Ivanov. Regardless however, Plaintiffs
have alleged that in addition to their statutory obligations, Defendants set their wages, draft their
employment contracts and have the authority to remove the au pairs from their host families and
terminate their employment, even if the host families do not agree to the same. (Am. Comp. at
Additionally, the Amended Complaint contains excerpts from certain Defendants’
employment contracts with the au pairs indicating those contracts, unlike in Ivanov, touch upon
daily employment duties for the au pairs. (Am. Comp. at 63, 65-67.) For example, Defendant
Cultural Care’s contract grants it the “exclusive right to determine [the au pair’s] continued
participation in the Program.” (Am. Comp. at 63.) The au pair must acknowledge that Cultural
Care (not the host family) will terminate the au pair if it determines that her emotional or
physical state makes her unsuitable for providing childcare, if she gets married or pregnant,
engages in behavior Cultural Care determines to be unsuitable, or Cultural Care deems her
performance unsatisfactory “for whatever reason.” (Id.) In another example, Defendant Go Au
Pair’s contract with its au pairs sets out an au pair’s daily employment responsibilities, including
“daily maintenance of the children, including meal preparation, doing the children’s laundry,
transporting the children to various activities, assisting with homework, playing, teaching and
caring for the children.  Minor housekeeping, including but not limited to, washing the
children’s dishes, tidying up the children’s rooms and making their beds, vacuuming and dusting
the children’s rooms and cleaning their bathrooms.  pick up after the children in any room in
which they have played.” (Am. Comp. at 66-67.)
The court finds that under the Tenth Circuit’s economic realities test, Plaintiffs have
asserted sufficient allegations at this stage of the proceedings to support their contention that
Defendants are joint employers.
b. Room and Board Credit
Plaintiffs contend that Defendants are not allowed to credit room and board against their
wages because the host families are required by law to provide the same. 29 C.F.R. § 531.27(a)
allows an employer to include the reasonable cost or fair value of furnishing an employee board,
lodging or other facilities in the employee’s wages. However, pursuant to 29 C.F.R. § 531.30, an
employer may not credit the cost of facilities toward an employee’s wages if the employer is
required by law to provide the same. Additionally, “under § 531.3(d)(1), the cost of furnishing
‘facilities’ which are primarily for the benefit or convenience of the employer will not be
recognized as reasonable and may not therefore be included in computing wages.” 29 C.F.R. §
531.32(c). Relying on this, Plaintiffs also contend that the cost of room and board cannot be
credited against their compensation as it benefits the host families.
In 1997, the DOL responded to a petition seeking credit against an au pair’s wages for
the cost of educational expenses, two weeks paid vacation, and credit for the “personal” use of
the family automobile. U.S. Dep’t of Labor, Wage and Hour Division, Opinion Letter, 1997 WL
998029, at *1 (Aug. 19, 1997). The DOL concluded that an “au pair employer may not take
credit in meeting its minimum wage obligations for any of the three items” because each falls
under the definition of “facility” for purposes of the FLSA and the employer is required by law
to provide each. Id. at *1-2 (emphasis in original). See also Ramos-Barrientos v. Bland, 661
F.3d 587, 597-98 (11th Cir. 2011) (holding that employer was not entitled to wage credit under
FLSA for cost of housing provided to workers because employer was statutorily required to
provide the same); Jiao v. Shi Ya Chen, No. 03 Civ. 0165(DF), 2007 WL 4944767, at *14
(S.D.N.Y. March 30, 2007) (holding that the defendant-employer was not permitted to factor
cost of lodging into employee’s compensation where employer required employee to reside on
the premises); Schneider v. Landvest Corp., No. 03 CV 02474 WYD PAC, 2006 WL 322590, at
*27-28 (D. Colo. Feb. 9, 2006) (relying on 29 C.F.R. §§ 531.30, 531.31 to hold that “because
Plaintiffs’ housing was furnished primarily for the benefit of Landvest and because Plaintiffs
were required to reside at the facility, I find that the value of their lodging should not be included
in the computation of their regular rate.”); Marshall v. DeBord, No. 77-106-C, 1978 WL 1705, at
*6 (E.D.Okla. 1978) (holding that “since the employees were required to live at the premises and
since at least one employee had to be available at all times” then “rooms were primarily
furnished for the benefit of the defendant employer” and it was not permitted to “have the cost of
furnishing lodging included in computing wages.”).
There is no question that pursuant to 22 C.F.R. § 62.31(e)(6) host families are required to
provide room and board to their au pairs. Defendants do not cite to any FLSA provision
providing an exception for the au pair program as to 29 C.F.R. § 531.30 that otherwise prohibits
an employer from crediting the cost of room and board from an employee’s wages if the
employer is required by law to provide the same. Instead, Defendants rely upon the 1995
amendments to the Code of Federal Regulations, as well as a Notice released by DOS. (Doc.
No. 214 at 8; Doc. No. 127 at 22; Doc. No. 127-1; Doc. No. 207 at 2-3.)
Addressing the 1995 Code of Federal Regulations amendment, Defendants are correct
that in 1995, when the USIA initially acknowledged that au pairs were in an employment
relationship, the Final Rule published in the Federal Register incorporated a credit for room and
board against au pair compensation, as discussed supra. 60 Fed. Reg. at 8551-8553 (Feb. 15,
1995) (codified at 22 C.F.R. pt. 514). However, in 1997, when the regulation was amended
again, the USIA issued an Interim Final Rule, which was subsequently adopted into the Federal
Regulations, and specifically noted that it was “amending this regulation to ensure that there is
no future confusion regarding the payment of minimum wage.” 62 Fed. Reg. at 34633 (June 27,
1997) (codified at 22 C.F.R. pt. 514); 62 Fed. Reg. 46876 (Sept. 5, 1997). Thus, the regulation
had previously incorporated a credit into the minimum wage but after the 1997 amendment, the
applicable regulation no longer included such a credit. Instead, the provision provides,
“Sponsors shall require that au pair participants: (1) Are compensated at a weekly rate based
upon 45 hours of work and paid in conformance with the requirements of the [FLSA] as
interpreted and implemented by the United States [DOL].” Id. at 34634; see also 22 C.F.R.
§62.31(j)(1). As established above, conformance with the requirements of the FLSA does not
include a room and board credit toward an employee’s wage if an employer is required by law to
provide that room and board. 29 C.F.R. § 531.30.
To that end, Defendants rely upon a Notice from the DOS related to the stipend amount
following any changes to the federal minimum wage. Specifically, they cite to a Notice issued in
2007 in which the DOS indicates that the federal minimum wage was increasing to $7.25 per
hour within two years. (Doc. No. 127-1 at 2.) The Notice provides that the weekly stipend for
the standard au pair is directly connected to the federal minimum wage and “is based on a U.S.
Department of Labor formula that includes credit for the room and board Host Families provide
for their Au Pairs.” (Id.) The Notice goes on to indicate that allowing for the credit, the weekly
stipend would equal $195.75 by the time the full minimum wage increase goes into effect in
The problem created by the Notice is that it does not cite to any law allowing the au pair
program to use the room and board credit in spite of the FLSA provision specifically prohibiting
such a credit for facilities when they are required by law. See 29 C.F.R. § 531.30. Defendants
have not cited to any legal provision that indicates an exception to the FLSA’s general provision
regarding room and board credit. Nor has this court been able to locate such authority. It may
well be ultimately resolved that an exception exists for the au pair program that allows credit of
room and board against an au pair’s compensation. However, Plaintiffs have asserted a legal
cause of action based upon specific provisions and regulations related to the FLSA. This court
cannot conclude that they have failed to state a viable claim based solely on a Notice
disseminated by the DOS that does not include the citation to or the support of any specific legal
Finally, Defendants seek dismissal of Plaintiffs’ claim for overtime under the FLSA
based on the overtime exemption for domestic workers. 29 U.S.C. § 213(b)(21) provides an
exemption to the FLSA’s overtime requirements for “any employee who is employed in
domestic service in a household and who resides in such household.” 29 C.F.R. § 522.3 defines
“domestic service employment” as including babysitters and nannies. Thus, Plaintiffs fall under
the overtime exemption applicable to employees in domestic service who reside in their
employer’s household. 29 U.S.C. § 213(b)(21).
Plaintiffs rely, however, on recent changes to the FLSA to argue that they are entitled to
overtime compensation due to their joint employment by Defendants. Effective January 1, 2015,
the DOL implemented the following Federal Rule, “[T]hird party employers of employees
engaged in live-in domestic service employment  may not avail themselves of the overtime
exemption provided by [29 U.S.C. § 213(b)(21)], even if the employee is jointly employed by
the individual or member of the family or household using the services.” 29 C.F.R. §
552.109(c). Plaintiffs acknowledge that this provision was held invalid in Home Care Ass’n of
Am. v. Weil, 76 F. Supp. 3d 138 (D.D.C. 2014). (Resp. at 45.) However, the District of
Columbia Circuit Court of Appeals subsequently reversed the lower court’s decision, finding that
the provision is valid. Home Care Ass’n of Am. v. Weil, 799 F.3d 1084 (D.C. Cir. 2015), petition
for writ of cert. filed, (U.S. Nov. 18, 2015) (No. 15-683). A petition for certiorari in the case is
currently pending before the United States Supreme Court. Id.
Thus, at this time, an exception applies for work performed after January 1, 2015,
prohibiting joint employers from claiming the overtime exemption as applied to domestic service
employees, such as Plaintiffs. This court has already found that Plaintiffs have set forth
sufficient allegations to support their claim that Defendants are joint employers with the host
families, at least for this stage of the proceedings. Therefore, Plaintiffs may proceed with their
claim for overtime against Defendants under the FLSA for work performed after January 1,
3. State law wage claims
Plaintiffs contend that their wages must conform with the state law wage claims in each
of the respective states in which they work or worked as an au pair. To the extent applicable
state laws direct greater compensation than the FLSA, Plaintiffs are asserting state law wage
violations. Defendants request dismissal based on various grounds.
Defendants argue that any state law wage claims are pre-empted by DOS regulations and
therefore, do not apply to au pairs. In support of this proposition, Defendants assert a
fragmented argument that begins with the premise that the au pair program falls under
immigration law and because “[c]entralized authority for immigration is critical to international
relations and the security of Americans abroad,” these claims are preempted by federal law and
regulations. This argument fails for many reasons, not the least of which is that federal law and
regulations do not dictate that au pairs are not entitled to the protection of state wage laws.
Instead, they dictate just the opposite.
As an initial matter, the court notes that Defendants’ reliance on Arizona v. United States,
__ U.S. __, 132 S.Ct. 2492 (2012) is misplaced. In Arizona, the Supreme Court reviewed
Arizona state laws that essentially allowed a state to enforce federal immigration law, declared
engaging in work by an unauthorized alien a misdemeanor, allowed state law enforcement
officers to check immigration status of an individual they have lawfully stopped, detained or
arrested, and allowed law enforcement to arrest individuals they had probable cause to believe
had committed a crime that warranted deportation under federal immigration law. Id. at 249798. The Supreme Court struck down these laws, with the exception of one, as unconstitutional
based on the reasoning that the “subject of immigration and the status of aliens” is reserved to
the federal government and the state laws at issue not only usurped that authority but conflicted
with federal law. Id. at 2498, 2503, 2505, 2507, 2510.
In order to avoid the application of state wage laws, Defendants attempt to couch the au
pair program as falling squarely into the field of immigration and then claim federal preemption
under Arizona. The Arizona opinion holds little, if any, relevance to the present case. The state
laws at issue herein do not pertain to immigration. The au pair program permits young people to
enter this country and work lawfully as an au pair under the auspices of “cultural exchange.”8
More significantly, the federal laws and regulations explicitly contemplate the application of
state wage laws to au pairs. 9
Tellingly, though administration of this program has passed from the USIA to the DOS, it has
never fallen under the authority of Immigration and Naturalization Services.
Defendants also rely upon Bai Haiyan v. Hamden Public Schools, 875 F. Supp. 2d 109 (D.
Conn. 2012) to argue that au pairs do not operate within the employment context. (Doc. No. 130
at 10.) In Bai Haiyan, the plaintiff was part of the Chinese Guest Teacher Program (“CGTP”)
that, similar to the au pair program, was established under the Cultural Exchange Act. Id. at
114. The plaintiff brought employment related claims against the defendants, however, the court
Defendants contend that they are “not operating within the employment laws of the
various states, but rather within the program regulations established by DOS, the federal agency
in charge of the program.” (Doc. No. 130 at 11.) However, at no point do Defendants explain
where, within this allegedly all-encompassing federal scheme or regulatory plan, DOS indicates
an intent to remove the au pair program from state employment and labor laws.
As discussed in detail, supra, federal regulations are explicitly clear that the FLSA
applies to the au pair program. Further, the FLSA mandates that state minimum wage laws
control within each respective state. Specifically, 29 U.S.C. § 218(a), the FLSA’s savings
clause, provides, “No provision of this chapter or of any order thereunder shall excuse
noncompliance with any Federal or State law or municipal ordinance establishing a minimum
wage higher than the minimum wage established under this chapter.” Thus, if a state sets its
minimum wage higher than that mandated by the FLSA, as many have, then pursuant to the
FLSA, employees within that state are entitled to receive the higher state minimum wage. (Id.)
Defendants make broad claims that the DOS’s scheme and regulations governing the au pair
program pre-empt state laws regarding minimum wage, but they fail to cite to any federal law,
regulation or guideline that provides for what would essentially be an exemption to the FLSA’s
savings clause.10 29 C.F.R. § 62.31(j)(1) specifically requires that au pairs are compensated “in
found that the regulations implementing the CGTP and the Memorandum of Understanding
pertaining to her placement as a teacher under the CGTP did not create an employment
relationship. Id. at 126-27. The Bai Haiyan decision is distinguishable from the present case
because applicable federal law makes clear that au pairs are in an employment relationship.
Defendants cite to 60 Fed. Reg. 8547 (1995) as indicating that the federal government
“identified a programmatic need for a uniform wage.” (Doc. No. 214 at 3.) However,
Defendants’ characterization of this statement is misleading. In the Supplementary Information
section preceding the Final Rule, the USIA discussed the appropriate amount of credit a host
family could use with regard to the room and board provided to an au pair and considered the
conformance with the requirements of the FLSA” and it does not include language indicating
“except for the savings clause.”11
Additionally, under the Wilberforce Trafficking Victims Protection Reauthorization Act
of 2008, the Secretary of State, in consultation with the Secretary of Homeland Security, the
Attorney General and the Secretary of Labor, was required to develop an “information pamphlet
 on legal rights and resources for aliens applying for employment- or education-based
nonimmigrant visas.” 8 U.S.C. § 1375b(a)(1) (the “Wilberforce Pamphlet”). The Wilberforce
Pamphlet is required to include, inter alia, information concerning “the legal rights of
employment or education-based nonimmigrant visa holders under Federal immigration, labor
and employment law.” 8 U.S.C. § 1375b(b)(2). The Wilberforce Pamphlet specifically
addresses the rights of a person holding, inter alia, a J-1 visa. (Doc. No. 199-1 at 6-7.) Pursuant
to 22 C.F.R. § 62.10(c)(8), the Sponsors are required to provide the Wilberforce Pamphlet to au
pairs. The Wilberforce Pamphlet discusses rights guaranteed to any individual holding one of the
visas discussed within the Pamphlet and states explicitly, “You have the right to earn at least the
federal legal minimum wage, $7.25 per hour, in the same manner as U.S. workers. Also check –
[t]he minimum wage for the state in which you work. If that wage is higher, you have the right
to be paid the higher amount.” (Doc. No. 199-1 at 8) (emphasis in original).
options of crediting actual cost or a fixed cost. Id. at 8551. The USIA weighed the preference
for crediting actual cost against the need for the credit to be uniform so that host families would
not have to maintain individualized records. Id.
In a request to cite new relevant authority, see Doc. No. 233, Defendants submitted ASSE Int’l,
Inc. v. Kerry, 803 F.3d 1059 (9th Cir. 2015), in which the court discussed that DOS regulations
“provide a framework” for implementing various programs under the Cultural Exchange Act. Id.
at 1065. However, Defendants continue to ignore that the very regulations governing the au pair
program mandates the application of and conformance with the FLSA.
Based on the above, the court finds Defendants’ contention that an overall federal scheme
and/or federal regulations pre-empt the state minimum wage laws in this country as applied to au
pairs has no support under federal law.
b. Colorado wage laws
Plaintiff Beltran has asserted a claim under Colorado’s wage laws because her
compensation did not comply with Colorado’s minimum wage requirements while she served as
an au pair in Colorado. Defendant InterExchange contends that the Colorado wage laws do not
apply to Plaintiff Beltran because “domestic employees” are exempt from the Colorado
Minimum Wage Act. (Doc. No. 130 at 24.)
“Defendant bears the burden of demonstrating that a particular employee ‘plainly and
unmistakably’ qualifies for an  exemption” from wage and labor laws. Kennett v. Bayada
Home Health Care, Inc., __ F. Supp. 3d __, 2015 WL 5608132, at *5 (D. Colo. 2015) (quoting
Chase v. Farmers Ins. Exch., 129 P.3d 1011, 1014-15 (Colo. App. 2004)). In asserting this
argument, InterExchange relies upon 7 Colo. Code Regs. 1103-1:5, which provides that
“companions, casual babysitters, and domestic employees employed by households or family
members to perform duties in private residences” are exempt from all provisions of Colorado’s
Minimum Wage Order.
Plaintiff correctly responds that the Minimum Wage Order specifically provides,
if either of the following two situations applies to an employee, then the employee
is entitled to the $8.23 state minimum wage . . . .:
1. The employee is covered by the minimum wage provisions of Colorado
Minimum Wage Order Number 31.
2. The employee is covered by the minimum wage provisions of the Fair Labor
Colo. Minimum Wage Order No. 31. The plain reading of the Order indicates an intent to set a
uniform minimum wage so that all employees within the state who are entitled to receive
minimum wage under either federal or state law will receive the same wage. Id.
The court has already established, supra, that au pairs are covered by the minimum
wage requirements of the FLSA. See 29 U.S.C. § 206(f) (providing that an employee in
domestic service in a household is entitled to minimum wage; 29 C.F.R. § 522.3 (defining
“domestic service employment” as including babysitters and nannies). Thus, Plaintiff Beltran
was clearly covered under the minimum wage provisions of the FLSA and therefore, entitled to
minimum wage under Colorado’s Minimum Wage Order No. 31.
d. New York wage laws
Defendants argue that au pairs are exempt from New York’s wage laws. Again,
Defendants have the burden to show that an employee is exempt from any otherwise applicable
wage and labor laws. Kennett, 2015 WL 5608132, at *5. In support of their position,
Defendants cite only to a “Fact Sheet” disseminated by the New York Department of Labor
indicating that it has concluded au pairs are not subject to the protections of the state’s wage and
labor laws. (Doc. No. 127-4 at 4; Doc. No. 136 at 14-15.) Defendants also note that New
York’s Department of Labor enforces state labor law. (Doc. No. 214 at 14.)
The Fact Sheet upon which Defendants rely does not cite to any state law that exempts au
pairs from minimum wage and/or overtime exemptions, nor do Defendants.12 The Fact Sheet is
most analogous to a an opinion letter and therefore, may be entitled to a certain amount of
Further, though not dispositive of the issue presented here, the portion of the Fact Sheet upon
which Defendants rely is primarily focused on immigration status, though it does refer generally
to the application of all state labor laws.
deference with regard to the interpretation of New York’s wage and hour laws, but it does not
displace or supersede a court’s own interpretation and judgment. See Salazar v. Butterball, LLC,
No. 08-cv-02071-MSK-CBS, 2009 WL 6048979, at *8 (D. Colo. Dec. 3, 2009) (finding that
[DOL’s] opinion letters are entitled to deference, but the level of deference accorded depends
upon the “thoroughness evident in its consideration, the validity of its reasoning, its consistency
with earlier and later pronouncements, and all those factors which give it power to persuade, if
lacking power to control.”) (citing McGraw v. Barnhart, 450 F.3d 493, 501 (10th Cir. 2006)
(“Under Skidmore, the degree of deference given informal agency interpretations will vary with
circumstances, and courts have looked to the degree of the agency’s care, its consistency,
formality, and relative expertness, and to the persuasiveness of the agency’s position.”)). While
the New York DOL’s opinion with regard to whether its state labor laws applies to au pairs may
be persuasive depending upon the above mentioned factors, it is not determinative of whether
Plaintiffs have stated a viable claim. As that is the only authority upon which Defendants have
relied, the court finds their request for dismissal should be denied.
Defendant AIFS argues that Plaintiffs were not employees of AIFS under California law
because AIFS did not control their wages, hours or working conditions. (Doc. No. 136 at 15.)
Plaintiffs argue that Defendants, including Defendant AIFS, are joint employers of Plaintiffs
with the respective host families. The court has already found that Plaintiffs have provided
sufficient allegations to support this argument, at least at this stage of the proceedings. The same
reasoning applies with regard to Defendant AIFS’s request to dismiss Plaintiffs’ claims under the
California wage laws.
f. Pennsylvania and Utah
Defendant Cultural Care, Inc. (“Cultural Care”) contends that “domestic workers are
exempted” under the wage laws of Pennsylvania and Utah. (Doc. No. 127 at 18.)
Pennsylvania’s Minimum Wage Act does include an exemption for employment in “[d]omestic
services in or about the private home of the employer.” 43 Pa. Cons. Stat. § 331.105(a)(2).
Plaintiffs correctly note, however, that the Pennsylvania courts have specifically refused to apply
the domestic workers exemption to third-party employers. Bayada Nurses, Inc. v.
Commonwealth, 8 A.3d 866, 881-82 (Pa. 2010). Defendants do not dispute the holding in
Bayada but instead, assert that they are not Plaintiffs’ employers. (Doc. No. 207 at 15.) The
court has already concluded Plaintiffs have provided sufficient allegations to support their
argument that Defendants are joint employers, at least at this stage of the proceedings.
Similarly, Utah’s Minimum Wage Act contains an exemption for “casual and domestic
employees.” Utah Code Ann. § 34-40-104(e). The court notes that Utah’s Minimum Wage Act
sets the minimum wage at $3.80 per hour, specifically prohibits the minimum wage from
exceeding the minimum wage set by the FLSA, and exempts from its provisions any employee
already entitled to a minimum wage under the FLSA. Utah Code Ann. §§ 34-40-103, 34-40104(1)(a). This court has already concluded that Plaintiffs are entitled to minimum wage under
the FLSA. Therefore, Plaintiffs are exempt from Utah’s Minimum Wage Act.
4. Claims Based on Fraud
Defendants seek dismissal of Plaintiffs’ claims II-VI, arguing generally that Plaintiffs did
not plead the fraud aspect of these claims with sufficient particularity.13 Fed. R. Civ. P. 9(b)
requires that “[i]n alleging fraud , a party must state with the particularity the circumstances
constituting fraud . . . .” Typically, to satisfy Rule 9(b), Plaintiffs must “set forth the time, place
and contents of the false representation, the identity of the party making the false statements, and
the consequences thereof.” HealthONE of Denver, Inc. v. UnitedHealth Group, Inc., 805 F.
Supp. 2d 1115, 1121 (D. Colo. 2011) (quoting Koch v. Koch Industries, Inc., 203 F.3d 1202,
1236 (10th Cir. 2000)).
Plaintiffs have alleged Defendants falsely informed them, other au pairs and host
families that $195.75 was a “set” or “fixed” salary and that they could not receive more. As
specific examples, Plaintiffs asserted that Defendant InterExchange’s website informed au pairs
that they can earn “almost $10,000.00” per year, which would represent the total salary if
making $195.75 per week. (Am. Comp. at 40-41; Resp. at 72-73.) (emphasis provided).14
Plaintiffs further allege that through a blog entry on its website, Defendant InterExchange
informed au pairs that if they received offers for higher salaries, they should consider such offers
bogus and/or the product of a scam. (Am. Comp. at 40-41.) Finally, Defendant InterExchange
To the extent Defendants contend these claims are pre-empted, the court has already addressed
that argument, supra, in the context of Plaintiffs’ state law wage claims and concluded Plaintiffs’
state law claims are not pre-empted.
Defendant InterExchange contends that its website states that au pairs will earn “almost
$10,000.00 or more.” (Doc. No. 130 at 14.) However, Plaintiffs allege that the “or more” was
not added until after the current lawsuit was filed and have indicated they can produce the
screenshot of Defendant InterExchange’s website as of December 5, 2014. (Resp. at 73.)
informed au pairs through another blog post that the salary of $195.75 per week was the product
of a “strict equation.” (Am. Comp. at 40-41.)
Plaintiffs allege that Defendant AIFS has informed au pairs that if they received more
than $195.75/week, they could be subject to deportation and that its website listed the weekly
stipend as simply $195.75 and instructed host families that they “needed to ‘pay th[at] published
fee.’” (Am. Comp. at 43) Similarly, Plaintiffs allege that Defendant American Cultural
Exchange LLC d/b/a GoAuPair created a handbook entitled, “GoAuPair Au Pair Household
Handbook,” that instructs GoAuPair host families that au pair wages are set by the federal
government at $195.75. (Am. Comp. at 33.)
Defendants argue that this claim should be dismissed because Plaintiffs admitted their
websites advertised higher rates for au pair salaries. (Doc. No. 131 at 7-8; Doc. No. 136 at 8.)
However, Defendants’ references to a higher salary was not for standard au pairs and are
therefore not relevant to Plaintiffs’ claims herein, as discussed supra. (Am. Comp. at 23, 57,
Finally, Defendant Cultural Care again argues (alone) that the $195.75 is the maximum
amount au pairs are permitted to receive. (Doc. No. 127 at 23.) As an alternative argument, it
argues that if its position in that regard is inaccurate, “Plaintiffs have failed to plead facts
sufficient to show that Cultural Care was aware of this . . . . and therefore acted to mislead au
pairs.” (Id.). The fact that $195.75/week does not represent a fixed wage is well established.
See supra. With regard to its alternative argument, Defendant Cultural Care has essentially
conceded they informed au pairs that $195.75 was a fixed rate, which aligns with Plaintiffs’
allegations. (Doc. No. 127 at 23; Am. Comp. at 42.) It is not Plaintiffs’ burden to prove in their
pleading that Defendant Cultural Care knew these statements were false and misleading. Such
an inquiry implicates a question of fact and is appropriate for a later stage of these proceedings.
Plaintiffs have set forth specific statements allegedly made by Defendants in order to
deceive and/or mislead au pairs that $195.75/week was a fixed or set rate. These statements are
sufficient to satisfy Rule 9(b) regarding the fraud related elements of Counts II-VI.
5. Breach of Fiduciary Duty
Colorado law recognizes that “some special relationships by their nature automatically
trigger an independent duty of care that supports a tort action even when the parties have entered
into a contractual relationship.” Town of Alma v. Azco Constr. Co., 10 P.3d 1256, 1263 (Colo.
2000). As explained in DerKevorkian v. Lionbridge Techs., Inc., 316 F. App’x 727 (10th Cir.
2008), “A confidential relationship exists when one party justifiably reposes confidence in
another such that the parties drop their guard and assume that each side is acting fairly. Colorado
does not recognize a separate tort founded upon breach of a confidential relationship. However,
a confidential relationship may serve as an indication of fiduciary status.” Id. at 737 (internal
quotations and citations omitted). Under Colorado law, in order to establish a breach of
fiduciary duty in this context
‘there must be proof, among other things, that (1) either the reposing of trust and
confidence in the other party was justified, or the party in whom such confidence
was reposed either invited, ostensibly accepted, or acquiesced in such trust; (2)
the alleged trustee assumed a primary duty to represent the other party’s interest
in the subject of the transaction; (3) the nature and scope of the duty that arose by
reason of the confidential relationship extended to the subject mater [sic] of the
suit; and (4) that duty was violated, resulting in damage to the party reposing such
Id. at 737-38 (quoting Equitex, Inc. v. Ungar, 60 P.3d 746, 752 (Colo. Ct. App. 2002)).
In DerKevorkian, the plaintiff relied upon a specific written agreement between the
defendant-employer and the plaintiff-employee whereby the employer agreed to sponsor the
plaintiff’s permanent residence application under the terms of the company’s Permanent
Resident Program (“PRP”) in exchange for, inter alia, the employee's remaining with the
company for two years following receipt of her green card. Id. at 729-30. Ultimately, the
plaintiff did not receive a green card and alleged that was due to the employer’s handling of the
application process. Id. at 731-32. The plaintiff brought several causes of action, including
breach of contract and breach of fiduciary duty. Id. at 733. The jury returned a verdict in the
plaintiff’s favor on each of those claims. Id.
The employer appealed, arguing that the evidence did not support a finding of fiduciary
duty. Id. The Tenth Circuit affirmed the jury’s verdict and noted the lower court’s reasoning in
denying the employer’s motion for a new trial, that the plaintiff “trusted [the employer] to
represent her interests in the handling of various filings in order for her to continue to work in the
United States. From the beginning of their employment relationship, at least prior to the time
they entered into a contract related to [the plaintiff’s] green card application, [the employer] had
a high degree of control and [the plaintiff] placed a significant amount of trust and confidence
that [the employer] would look after her best interests related to her ability to work in the United
States as an employee.” Id. at 738. The Tenth Circuit stated, “[W]e find sufficient evidence
supporting the district court’s conclusion that, throughout their employment relationship, [the
plaintiff] invariably relied upon [the employer] and its expertise and experience to assist her in
obtaining whatever documentation was necessary to remain a legal worker in the United States.
This culminated in the PRP, pursuant to which we agree with [the plaintiff] and the district court
that [the employer] assumed a fiduciary duty to assist her and support her in her green card
The contentions in the present case provide a stronger basis to find a confidential
relationship than that described in DerKevorkian. Plaintiffs’ allegations related to the first three
elements of a fiduciary relationship include the following: (1) The au pairs are required to be
young (between the ages of 18-26) and they understandably lack sophistication with regard to
United States wage and labor laws (Am. Comp. at 10, 5); (2) The au pairs have a markedly
inferior ability to know the applicable law beyond what Defendants inform them (Am. Comp. at
47-48); (3) They inherently place their trust in Defendants to protect their legal interests as
Defendants are legally responsible for training the au pairs for their employment and protecting
their rights (Id.); (4) Defendants specifically promote this aspect of the relationship to the au
pairs through recruiting materials, agreements and training (Am. Comp. at 47); (5) Defendants
purport to be in a position to protect the au pairs and to have superior knowledge and specialized
information of the applicable law (Id.); (6) This image is strengthened by the fact that
Defendants act as arbitrators of any disputes about wages and hours with the au pairs and their
host families (Id.); and, (6) Defendants had a duty to know the applicable law regarding
employee rights and wages and Plaintiffs allege that in fact they did know but intentionally
mislead them. (Am. Comp. at 48-51.) Addressing the final fiduciary duty element, Plaintiffs
contend that they never asked for higher wages or for wages that were mandated by the FLSA
and/or state wage laws because they were led to believe they were receiving the maximum
amount to which they were eligible. (Am. Comp. at 50.) The assertions within Plaintiffs’
Amended Complaint suggest that the manner in which Defendants almost uniformly choose to
administer their statutory obligations creates a fiduciary relationship between Defendants and
Plaintiffs. (Am. Comp. at 10, 16-17, 30, 43, 46-51.)
Defendants assert that there is “no legal basis under DOS regulations to allege” a
fiduciary relationship, see Doc. No. 127 at 24, and argue that Defendants did not guarantee that
Plaintiffs “would receive or maintain a J-1 visa, would be permitted to participate in the program
or would be suitable for or satisfied with the program.” (Doc. No. 130 at 17.) However, these
arguments wholly fail to address the substance of Plaintiffs’ claims. Plaintiffs have not asserted
this claim alleging that Defendants somehow failed to assist them in acquiring a visa or
guaranteed that Plaintiffs would like the program. Rather, Plaintiffs have plainly asserted this
and other claims in this action based on the fact that Defendants mislead them, to Plaintiffs’
detriment, with regard to the compensation to which they were entitled.
Taking Plaintiffs’ allegations as true and accurate, as is required, the court finds Plaintiffs
have set forth allegations sufficient to support a claim that a fiduciary relationship existed
between the parties and that Defendants breached the same.
6. Breach of Contract
“[A] party attempting to recover on a claim for breach of contract must prove the
following elements: (1) the existence of a contract; (2) performance by the plaintiff or some
justification for nonperformance; (3) failure to perform the contract by the defendant; and (4)
resulting damages to the plaintiff.” W. Distribution Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo.
1992) (citations omitted). Plaintiffs do not allege that Defendants violated a provision within
their respective contracts with the au pairs. (Am. Comp. at 93; Resp. at 76-78.) Instead,
Plaintiffs contend that each contract incorporated the legal requirements of applicable wage and
labor laws and that Defendants breached those requirements. (Id.) However, Defendants’
violations of wage and labor laws are their own independent causes of action and Plaintiffs have
asserted those causes of action herein.
Therefore, the breach of contract claim cannot stand. However, as an alternative,
Plaintiffs also assert claims for unjust enrichment and promissory estoppel. (Am. Comp. at 93.)
Defendants have not requested dismissal of either of those claims.
7. Motions to Strike
On August 6, 2015, Defendant Cultural Care, Inc. filed a Motion to Strike related to
material Plaintiffs had submitted with their consolidated Response to Defendants’ Motions to
Dismiss. (Doc. No. 206.) Defendant’s Motion requested the court strike from consideration and
review an article from the Washington Post, an amicus brief filed by the Secretary of Labor in a
separate action, and a PowerPoint presentation created by the DOS regarding the Wilberforce
Trafficking Victims Protection Reauthorization Act of 2008. (Doc. No. 206 at 1-2.)
Plaintiffs subsequently filed a Motion to Strike requesting the court strike from
consideration and review certain materials that Defendants had submitted in relation to their
Motions to Dismiss. (Doc. No. 221.) However, with the exception of two documents submitted
with Defendant GoAuPair’s Reply, Plaintiffs’ request to strike was premised solely on the court
granting Defendant’s Motion to Strike. (Doc. No. 221 at 2.) In other words, Plaintiffs were only
requesting the court strike the objectionable materials submitted by Defendants, other than
Defendant GoAuPair, if the court granted Defendant’s Motion to Strike.
As the court was able to resolve the pending Motions to Dismiss without considering the
materials the parties found objectionable, the court finds that both Motions to Strike should be
denied as moot.
WHEREFORE, for the foregoing reasons, this court respectfully
RECOMMENDS that the “Joint Motion by Certain Defendants to Dismiss the First
Amended Complaint and Certification of Compliance with Civil Practice Standard 7.1D.” (Doc.
No. 135) should be DENIED;
RECOMMENDS that “Defendant Cultural Care, Inc.’s Motion to Dismiss All Claims in
First Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(B)(6)” (Doc. No. 127),
“Motion to Dismiss the First Amended Complaint by Defendant InterExchange, Inc.” (Doc. No.
130), “Defendant American Cultural Exchange, L.L.C., D/B/A Go Au Pair’s Motion to Dismiss
Counts I, III, IV, V, VI, VII, VIII, IX and X of the First Amended Complaint” (Doc. No. 131),
and “Defendant American Institute for Foreign Study’s Motion to Dismiss Amended Complaint”
(Doc. No. 136) should be GRANTED in part and DENIED in part. Plaintiffs’ claim under the
Utah Minimum Wage Act and Plaintiffs’ claim for breach of contract should be dismissed.
Plaintiffs’ remaining claims should proceed.
Additionally, it is
ORDERED that “Defendant Cultural Care, Inc.’s Motion to Strike Material in Plaintiffs’
Consolidated Opposition to Defendants’ Motions to Dismiss” (Doc. No. 206) and “Plaintiffs’
Cross-Motion to Strike Certain Exhibits Submitted by the Defendants” (Doc. No. 221) are
DENIED as moot.
ADVISEMENT TO THE PARTIES
Within fourteen days after service of a copy of the Recommendation, any party may
serve and file written objections to the Magistrate Judge’s proposed findings and
recommendations with the Clerk of the United States District Court for the District of Colorado.
28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); In re Griego, 64 F.3d 580, 583 (10th Cir. 1995). A
general objection that does not put the district court on notice of the basis for the objection will
not preserve the objection for de novo review. “[A] party’s objections to the magistrate judge’s
report and recommendation must be both timely and specific to preserve an issue for de novo
review by the district court or for appellate review.” United States v. One Parcel of Real Prop.
Known As 2121 East 30th Street, Tulsa, Okla., 73 F.3d 1057, 1060 (10th Cir. 1996). Failure to
make timely objections may bar de novo review by the district judge of the magistrate judge’s
proposed findings and recommendations and will result in a waiver of the right to appeal from a
judgment of the district court based on the proposed findings and recommendations of the
magistrate judge. See Vega v. Suthers, 195 F.3d 573, 579–80 (10th Cir. 1999) (stating that a
district court’s decision to review a magistrate judge’s recommendation de novo despite the lack
of an objection does not preclude application of the “firm waiver rule”); One Parcel of Real
Prop., 73 F.3d at 1059–60 (stating that a party’s objections to the magistrate judge’s report and
recommendation must be both timely and specific to preserve an issue for de novo review by the
district court or for appellate review); Int’l Surplus Lines Ins. Co. v. Wyo. Coal Ref. Sys., Inc., 52
F.3d 901, 904 (10th Cir. 1995) (holding that cross-claimant had waived its right to appeal those
portions of the ruling by failing to object to certain portions of the magistrate judge’s order);
Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir. 1992) (holding that plaintiffs waived their
right to appeal the magistrate judge’s ruling by their failure to file objections). But see MoralesFernandez v. INS, 418 F.3d 1116, 1122 (10th Cir. 2005) (stating that firm waiver rule does not
apply when the interests of justice require review).
Dated this 22nd day of February, 2016.
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