Gilbert v. Lopez
Filing
266
ORDER, The March 6, 2019 Recommendation of United States Magistrate Judge Michael E. Hegarty (Doc. # 218 ) is AFFIRMED AND ADOPTED IN PART and REJECTED IN PART; The Lopez Defendants' Motion to Dismiss (Doc. # 106 ) is GRANTED IN PART and DENIED IN PART; Defendant USOC's Motion to Dismiss and Motion to Strike Class Action Allegations (Doc. # 108 ) is GRANTED IN PART and DENIED IN PART; Defendant USAT's Motion to Dismiss (Doc. # 109 ) is GRANTED IN PART and DENIED IN P ART; The following claims are DISMISSED: Claim 14: All Plaintiffs' claim of obstruction, attempted obstruction, and interference with enforcement, in violation of 18 U.S.C. §§ 1590(b), 1591(d), 1595(a), and 2255, against Defendant U SOC; Claim 15: All Plaintiffs claim of violation of RICO, 18 U.S.C. § 1962(d), against all Defendants; Claim 16: All Plaintiffs' claim of negligent supervision against the Institutional Defendants; Claim 17: All Plaintiffs' claim o f negligent retention against the Institutional Defendants; Claim 19: All Plaintiffs' claim of negligence against the Institutional Defendants and SafeSport; Claim 20: All Plaintiffs' claim of gross negligence against the Institutional Defendants and SafeSport; and Claim 21: All Plaintiffs' claim of outrageous conduct against Defendant USOC and SafeSport. Plaintiffs' proposed Damages Class is STRICKEN; Defendant Jean Edwards is DISMISSED WITH PREJUDICE from this actio n; The following claims survive Defendants' Motions to Dismiss, to the extent that the alleged conduct took place within the applicable statute of limitations, as described above: Claim 1: Plaintiff Meloon's claim of forced labor, in vi olation of 18 U.S.C. §§ 1589(a), 1595(a), and 2255, against Defendant Steven Lopez; Claim 4: Plaintiff Joslins claim of forced labor, in violation of 18 U.S.C. §§ 1589(b) and 1595(a), against Defendant USAT; Claim 5: Plaintiff Joslin's claim of trafficking with respect to forced labor, in violation of 18 U.S.C. §§ 1590(a) and 1595(a), against Defendant Steven Lopez and Defendant USAT; Claim 8: Plaintiff Means's claim of forced labor, in violation of 18 U.S.C. §§ 1589(a), 1595(a), and 2255, against Defendant Steven Lopez; Claim 9: Plaintiff Means's claim of forced labor, in violation of 18 U.S.C. §§ 1589(b) and 1595(a), against the Institutional Defendants; Claim 10: Plaintiff Means's claim of trafficking with respect to forced labor, in violation of 18 U.S.C. §§ 1590(a), 1595(a), and 2255, against Defendant Steven Lopez; Claim 13: Plaintiff Meanss claim of sexual exploitation, transportation, a nd illegal sexual activity, in violation of 18 U.S.C. §§ 2242, 2421, 2422, 2423(a)(c), and 2255, against Defendant Steven Lopez; Claim 14: All Plaintiffs claim of obstruction, attempted obstruction, and interference with enforcement, in violation of 18 U.S.C. §§ 1590(b), 1591(d), 1595(a), and 2255, against Defendant USAT, by Judge Christine M. Arguello on 9/27/2019.(evana, )
Case 1:18-cv-00981-CMA-MEH Document 266 Filed 09/27/19 USDC Colorado Page 1 of 73
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 18-cv-00981-CMA-MEH
HEIDI GILBERT,
AMBER MEANS,
MANDY MELOON,
GABRIELA JOSLIN,
KAY POE, and
JANE DOES 6 – 50,
Plaintiffs,
v.
UNITED STATES OLYMPIC COMMITTEE,
USA TAEKWONDO, INC.,
STEVEN LOPEZ,
JEAN LOPEZ, and
JOHN DOES 1 – 5,
Defendants.
ORDER AFFIRMING AND ADOPTING IN PART AND REJECTING IN PART
MAGISTRATE JUDGE’S MARCH 6, 2019 RECOMMENDATION AND GRANTING IN
PART AND DENYING IN PART DEFENDANTS’ MOTIONS TO DISMISS
______________________________________________________________________
This matter is before the Court on the March 6, 2019 Recommendation by United
States Magistrate Judge Michael E. Hegarty, in which the Magistrate Judge
recommends that this Court grant in part and deny in part three motions to dismiss:
(1) Defendants Steven Lopez and Jean Lopez’s (together, the “Lopez Defendants”)
Motion to Dismiss (Doc. # 106); (2) Defendant United States Olympic Committee’s
(“Defendant USOC”) Motion to Dismiss and Motion to Strike Class Action Allegations
Case 1:18-cv-00981-CMA-MEH Document 266 Filed 09/27/19 USDC Colorado Page 2 of 73
(Doc. # 108); and (3) Defendant USA Taekwondo, Inc.’s (“Defendant USAT”) Motion to
Dismiss (Doc. # 109). (Doc. # 218.) Plaintiffs and all Defendants object to portions of
the Recommendation. (Doc. ## 224–27.) For the reasons described below, the Court
affirms and adopts in part and rejects in part the Recommendation, and it grants in part
and denies in part Defendants’ Motions to Dismiss.
I.
BACKGROUND
The Recommendation thoroughly recites the factual and procedural background
of this dispute and is incorporated herein by reference. (Doc. # 218.) See 28 U.S.C.
§ 636(b)(1)(B); Fed. R. Civ. P. 72(b). Accordingly, this Order will reiterate only what is
necessary to address the parties’ Objections to the Recommendation.
A.
FACTUAL BACKGROUND
Briefly, Plaintiffs are elite female taekwondo athletes who competed on behalf of
the United States at international sporting events, including the Olympics. (Doc. # 68 at
2.)
Defendant USOC is the federally chartered corporation with “exclusive
jurisdiction” over “all matters pertaining to United States participation in the Olympic
Games, the Paralympic Games, and the Pan-American Games.” 36 U.S.C.
§ 220503(3)(A); 36 U.S.C. § 220502(a); see also (Doc. # 68 at 17.) Congress has
empowered Defendant USOC to “organize, finance, and control the representation of
the United States in . . . the Olympic Games” and other sanctioned competitions directly
or through a sport’s national governing body and to “facilitate, through orderly and
effective administrative procedures, the resolution of conflicts or disputes that involve
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any of its members and any amateur athlete, coach, . . . national governing body, or
amateur sports organization and that arise in connection with their eligibility for and
participation” in protected international competitions. 36 U.S.C. §§ 220505(c)(3), (5).
Defendant USAT is the national governing body (“NGB”) for the sport of
taekwondo, recognized and regulated by Defendant USOC pursuant to 36 U.S.C.
§ 220505(c)(4). (Doc. # 68 at 17, 21.) It is a not-for-profit federation that, like the NGBs
of scores of other sports, is charged with sponsoring and arranging amateur athletic
competitions in the sport. See 36 U.S.C. §§ 220501(b)(3), (8). It also selects American
taekwondo athletes, officials, and coaches to participate in the Olympics and similar
elite, international competitions. (Doc. # 68 at 22.)
Defendant Jean Lopez was the head coach of the American taekwondo teams at
the 2004, 2008, 2012, and 2016 Olympic Games, and Defendant Steven Lopez, his
brother, is a three-time Olympic taekwondo medalist for the United States. (Id. at 19.)
Plaintiffs describe Defendant Steven Lopez as “taekwondo’s biggest star” and state that
in the 2000s, he and Defendant Jean Lopez, along with their other siblings, were known
across the country “as the ‘First Family’ of taekwondo.” (Id. at 9.)
Plaintiffs allege that Defendants inflicted on them and other American female
taekwondo athletes “forced labor and services, sex trafficking, and other travesties.”
(Id. at 2.) They contend that the Lopez Defendants, “the primary perpetrators,” “raped
numerous female taekwondo athletes” and that Defendant USOC and Defendant USAT
(together, the “Institutional Defendants”) facilitated the Lopez Defendants’ sex crimes
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and “protected [the Lopez brothers] from law enforcement and suspension by Team
USA.” (Id. at 3.) Plaintiffs’ claims arise from two time periods:
[F]irst, the underlying forced labor and services and sex trafficking of
Plaintiffs . . . from 1997 to 2010, and second, the cover-up of this
misconduct, . . . which occurred from 2006 to 2008 and then from 2015 to
2018.
(Id. at 5.) They contend that during the second time period, Defendants USOC and
USAT “formed an enterprise (along with the Lopez [Defendants]) to obstruct and
interfere with efforts to prosecute or remove the Lopez brothers from taekwondo” and
that Defendants’ obstructionist conduct included making “false and corrupting
statements to Congress.” (Id.)
B.
PROCEDURAL HISTORY
Plaintiffs initiated this litigation against Defendants on April 25, 2018, see (Doc.
# 1), and have twice amended their Complaint, see (Doc. ## 6, 64, 68). Plaintiffs’
Second Amended Complaint (the “SAC”), filed August 24, 2018, is the operative
pleading. (Doc. # 68.) Plaintiffs assert 21 causes of action against Defendants and the
United States Center for SafeSport (“SafeSport”). 1 (Id.) The Court organizes the claims
into three categories:
Claims Arising Under the Trafficking Victims Protection Act (“TVPA”),
Pub. L. No. 106-386, 114 Stat. 1466 (2000) (codified as amended in
scattered sections 8, 18, and 22 U.S.C.) 2
Plaintiffs list “John Does 1–5” in the case caption but make no mention of any John Does in
their Complaint. See generally (Doc. # 68.) The Court is unaware of the purpose, if any, of
listing John Does 1–5 in the case caption.
2
The Court observes that Plaintiff’s TVPA claims mostly arise under sections enacted in the
Trafficking Victims Protection Reauthorization Act of 2003 (“TVPRA”), Pub. L. No. 108-193, 117
Stat. 2875 (2003) (codified in scattered sections of 8, 18, and 22 U.S.C.). The Court
nevertheless refers to these claims as the TVPA claims.
1
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1. Claim 1: Plaintiff Mandy Meloon’s claim of forced labor, in violation of 18
U.S.C. §§ 1589(a), 1595(a), and 2255, against Defendant Steven Lopez;
2. Claim 2: Plaintiff Mandy Meloon’s claim of sexual exploitation,
transportation, and illegal sexual activity, in violation of 18 U.S.C.
§§ 2241(c), 2243, 2421, 2422, 2423(a)–(c), and 2255, against Defendant
Jean Lopez;
3. Claim 3: Plaintiff Gaby Joslin’s claim of forced labor, in violation of 18 U.S.C.
§§ 1589(a) and 1595(a), against Defendant Steven Lopez;
4. Claim 4: Plaintiff Gaby Joslin’s claim of forced labor, in violation of 18 U.S.C.
§§ 1589(b) and 1595(a), against Defendant USAT;
5. Claim 5: Plaintiff Gaby Joslin’s claim of trafficking with respect to forced
labor, in violation of 18 U.S.C. §§ 1590(a) and 1595(a), against Defendant
Steven Lopez and Defendant USAT;
6. Claim 6: Plaintiff Gaby Joslin’s claim of sex trafficking of children, or by
force, fraud, or coercion, in violation of 18 U.S.C. §§ 1591(a)(1) and
1595(a), against Defendant Steven Lopez and Defendant USAT;
7. Claim 7: Plaintiff Gaby Joslin’s claim of benefitting from a venture that sex
traffics children, or by force, fraud, or coercion, in violation of 18 U.S.C.
§§ 1591(a)(2) and 1595(a), against Defendant USAT;
8. Claim 8: Plaintiff Amber Means’s claim of forced labor, in violation of 18
U.S.C. §§ 1589(a), 1595(a), and 2255, against Defendant Steven Lopez; 3
9. Claim 9: Plaintiff Amber Means’s claim of forced labor, in violation of 18
U.S.C. §§ 1589(b) and 1595(a), against the Institutional Defendants;
10. Claim 10: Plaintiff Amber Means’s claim of trafficking with respect to forced
labor, in violation of 18 U.S.C. §§ 1590(a), 1595(a), and 2255, against
Defendant Steven Lopez;
11. Claim 11: Plaintiff Amber Means’s claim of sex trafficking of children, or by
force, fraud, or coercion, in violation of 18 U.S.C. §§ 1591(a)(1), 1595(a),
and 2255, against the Lopez Defendants and the Institutional Defendants;
12. Claim 12: Plaintiff Amber Means’s claim of benefitting from a venture that
sex traffics children, or by force, fraud, or coercion, in violation of 18 U.S.C.
§§ 1591(a)(2), 1595(a) and 2255, against the Institutional Defendants;
13. Claim 13: Plaintiff Amber Means’s claim of sexual exploitation,
transportation, and illegal sexual activity, in violation of 18 U.S.C. §§ 2242,
2421, 2422, 2423(a)–(c), and 2255, against Defendant Steven Lopez;
Plaintiff Means originally asserted Claim 8 against Defendant Jean Lopez too. (Doc. # 68 at
148.) She subsequently clarified that Claim 8 “is asserted only against Steven Lopez” and that
Defendant Jean Lopez “was erroneously listed.” (Doc. # 139 at 3.)
3
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14. Claim 14: All Plaintiffs’ claim of obstruction, attempted obstruction, and
interference with enforcement, in violation of 18 U.S.C. §§ 1590(b), 1591(d),
1595(a), and 2255, against the Institutional Defendants and SafeSport; 4
Claim Arising Under the Racketeer Influenced and Corrupt Organizations
Act (“RICO”), 18 U.S.C. §§ 1961–68
15. Claim 15: All Plaintiffs’ claim of violation of RICO, 18 U.S.C. § 1962(d),
against all Defendants;
Claims Arising Under State Common Law
16. Claim 16: All Plaintiffs’ claim of negligent supervision against the
Institutional Defendants;
17. Claim 17: All Plaintiffs’ claim of negligent retention against the Institutional
Defendants;
18. Claim 18: All Plaintiffs’ claim of defamation against the Lopez Defendants
and Defendant USAT;
19. Claim 19: All Plaintiffs’ claim of negligence against the Institutional
Defendants and SafeSport;
20. Claim 20: All Plaintiffs’ claim of gross negligence against the Institutional
Defendants and SafeSport; and
21. Claim 21: All Plaintiffs’ claim of outrageous conduct against Defendant
USOC and SafeSport.
See (id. at 139–84.) Plaintiffs bring these claims on their own behalf and on behalf of
two proposed nationwide classes: the “Injunction Class,” defined as “[a]ll USOCgoverned female athletes (subject to the USOC’s ‘commercial terms’ page or any other
contract,” and the “Damages Class,” defined as “[a]ll USOC-governed female athlete[s]
(subject to the USOC’s ‘commercial terms’ page or any other contract[)] . . . who
(1) participated in taekwondo from 2003 to present and (2) traveled or trained with Jean
Lopez, Peter Lopez, or Steven Lopez.” (Id. at 134.) Plaintiffs later voluntarily withdrew
Claims 1, 2, 6, 7, 11, 12, and 18 (Doc. # 139 at 3) and dismissed as a defendant
SafeSport (Doc. # 223).
Plaintiffs originally asserted Claim 14 against the Lopez Defendants too. (Doc. # 168 at 156.)
Plaintiffs later clarified that Claim 14 “is asserted against only the [I]nstitutional [D]efendants . . .
not the Lopez [b]rothers.” (Doc. # 139 at 4.)
4
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On August 24, 2018, Defendants moved to dismiss Plaintiffs’ claims pursuant to
Federal Rule of Civil Procedure 12(b)(6). The Lopez Defendants jointly filed a Motion to
Dismiss (Doc. # 106); Defendant USOC filed a combined Motion to Dismiss and to
Strike Class Action Allegations (Doc. # 108); and Defendant USAT filed a Motion to
Dismiss (Doc. # 109). Plaintiffs responded to all three motions in an omnibus filing on
November 1, 2018. (Doc. # 139.) Two weeks later, Defendants replied in support of
their Motions to Dismiss. (Doc. ## 155, 157, 158.) At Defendant USOC’s request (Doc.
# 175), Magistrate Judge Hegarty heard oral arguments on Defendant USOC’s Motion
to Dismiss and to Strike on January 23, 2019 (Doc. # 203). 5
Magistrate Judge Hegarty issued an exhaustive Recommendation on
Defendants’ Motions to Dismiss on March 6, 2019, suggesting that the Court grant in
part and deny in part the Motions to Dismiss. (Doc. # 218.) As to Plaintiffs’ TVPA
claims, Magistrate Judge Hegarty first examined “preliminary matters,” including the
applicable statute of limitations, the definition of “labor” and “services” in Sections
1589(a) and 1590(a), and the definition of “venture” in Section 1589(b). (Id. at 12–24.)
He then turned to Defendants’ arguments regarding the sufficiency of Plaintiffs’ TVPA
claims and recommended that the Court dismiss Claim 5 as alleged against Defendant
USAT and Claim 14 as alleged against Defendant USOC. (Id. at 24–46.) Magistrate
Judge Hegarty recommended that Claim 15, the claim alleging that Defendants violated
RICO, be dismissed in its entirety. (Id. at 46–54.) He next assessed Plaintiffs’ state
Magistrate Judge Hegarty denied without prejudice Plaintiffs’ Conditional Motion for Time to
Seek Leave to Amend Complaint (Doc. # 196) at the hearing on January 23, 2019. (Doc. # 203
at 2.)
5
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common law claims and advised the Court to dismiss Claim 16 in its entirety; Claim 17
in its entirety; Claim 19 as alleged against Defendant USAT; and Claim 20 as alleged
against Defendant USAT. (Id. at 54–66.) Because “Plaintiffs withdrew the majority of
their claims against [Defendant] Jean Lopez” and he recommended that the RICO claim
be dismissed, Magistrate Judge Hegarty concluded that Defendant Jean Lopez should
be dismissed from the case. (Id. at 72.) Turning to Defendant USOC’s request to strike
Plaintiffs’ class action allegations pursuant to Rule 12(f) (Doc. # 108 at 25), Magistrate
Judge Hegarty recommended that the Court strike Plaintiffs’ proposed Damages Class
as overbroad. (Doc. # 218 at 69.)
All parties object to various portions of the Recommendation. Defendant USOC,
the Lopez Defendants, and Defendant USAT filed separate Objections on March 20,
2019 (Doc. ## 224–26), and Plaintiffs filed an omnibus Response on April 3, 2019 (Doc.
# 233). Plaintiffs also filed an Objection to the Recommendation on March 20, 2019
(Doc. # 227), to which Defendant USOC and Defendant USAT both responded on April
3, 2019 (Doc. ## 232–33). Defendants’ Motions to Dismiss, Magistrate Judge Hegarty’s
Recommendation, and the parties’ Objections are ripe for the Court’s review.
II.
A.
APPLICABLE LEGAL PRINCIPLES
REVIEW OF A RECOMMENDATION
When a magistrate judge issues a recommendation on a dispositive matter,
Federal Rule of Civil Procedure 72(b)(3) requires that the district judge “determine de
novo any part of the magistrate judge’s [recommended] disposition that has been
properly objected to.” In conducting its review of proper objections, “[t]he district judge
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may accept, reject, or modify the recommended disposition; receive further evidence; or
return the matter to the magistrate judge with instructions.” Fed. R. Civ. P. 72(b)(3).
An objection is properly made if it is both timely and specific. United States v.
One Parcel of Real Property Known As 2121 East 30th Street, 73 F.3d 1057, 1059
(10th Cir. 1996). Parties may not raise in their objections any novel arguments that they
did not raise before the magistrate judge. Such arguments are deemed waived.
Marshall v. Chater, 75 F.3d 1421, 1426 (10th Cir. 1996); see, e.g., Stout v. Seitz, No.
17-cv-01904-CMA-STV, 2018 WL 2948222, *4 (D. Colo. June 13, 2013) (declining to
consider arguments regarding dismissal under Rule 12(b)(6) where the plaintiff raised
them for the first time in her objections to a recommendation).
Where no party objects to the recommendation of a magistrate judge, “the district
court is accorded considerable discretion with respect to the treatment of unchallenged
magistrate reports. In the absence of timely objection, the district court may review a
magistrate [judge’s] report under any standard it deems appropriate.” Summers v.
Utah, 927 F.2d 1165, 1167 (10th Cir. 1991).
B.
DISMISSAL PURSUANT TO RULE 12(B)(6)
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
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granted.” Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (citations and
quotation marks omitted).
“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, 1109 (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 conclusions, 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.
However, the court need not accept conclusory allegations without supporting
factual averments. S. Disposal, Inc., v. Tex. 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. “Nor does the complaint suffice if it tenders naked assertion[s] devoid of
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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).
III.
DISCUSSION
The Court addresses the parties’ various objections to Magistrate Judge
Hegarty’s analysis by claim, in chronological order.
A.
PLAINTIFFS’ TVPA CLAIMS
Of their TVPA claims, Plaintiffs have withdrawn Claims 1, 2, 6, 7, 11, and 12.
(Doc. # 139 at 3.)
1.
Claim 3: Plaintiff Joslin’s claim of forced labor, in violation of 18
U.S.C. §§ 1589(a) and 1595(a), against Defendant Steven Lopez
In Claim 3, pursuant to 18 U.S.C. § 1595(a), Plaintiff Joslin alleges that
Defendant Steven Lopez violated 18 U.S.C. §§ 1589(a)(2) and (4) by obtaining her
“labor and services”—namely, her “forced sexual services”—“by means of serious
harm” or threats thereof and “through a scheme, plan, or pattern intended to cause [her]
to believe that, if . . . she did not perform such labor or services, she would suffer
serious harm or physical restraint.” (Doc. # 68 at 142.) Plaintiff Joslin asserts that when
Defendant Steven Lopez coached her at a tournament in Bonn, Germany in April 2006,
he entered her hotel room on the night before her first match, turned on a “graphic
pornographic movie,” “pinned [her] to the bed, face down, pulled down her pants and
mounted her,” “penetrated [her], ejaculated inside her, and left the room.” (Id. at 124.)
Plaintiff Joslin contends that during that incident, “[i]t was clear . . . that Steven required
sex before he would address his responsibilities as her coach.” (Id.) She alleges that
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she “continued to allow Steven to have sexual intercourse with her” until 2010 “out of
fear of the Lopez brothers.” (Id. at 125.)
Section 1595 provides a civil cause of action for victims of any crime under
Chapter 77, Title 18 of the United States Code. 18 U.S.C. § 1595. Section 1589
prohibits forced labor or services:
(a) Whoever knowingly provides or obtains the labor or services of a person
by any one of, or by any combination of, the following means-(1) by means of force, threats of force, physical restraint, or threats of
physical restraint to that person or another person;
(2) by means of serious harm or threats of serious harm to that person or
another person;
(3) by means of the abuse or threatened abuse of law or legal process;
or
(4) by means of any scheme, plan, or pattern intended to cause the
person to believe that, if that person did not perform such labor or
services, that person or another person would suffer serious harm or
physical restraint,
shall be punished as provided under subsection (d).
18 U.S.C. § 1589(a). “One can violate the statute either as a primary offender” under
Section 1589(a) “or simply by benefitting financially from participation in a ‘venture’ with
the primary offender” under Section 1589(b). Bistline v. Parker, 918 F.3d 849, 871
(10th Cir. 2019). In Claim 3, Plaintiffs allege that Defendant Steven Lopez was the
primary offender and is liable pursuant to Section 1589(a).
The Lopez Defendants moved to dismiss Claim 3 on the grounds that it is “barred
by the statute of limitations, as well as the plain meaning of the statute,” and that
Plaintiffs “fail to adequately allege that they were forced to provide any labor or
services.” (Doc. # 106 at 6–10.)
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a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty recommended that “the Lopez Defendants’ Motion to
Dismiss Claim 3 be denied.” (Doc. # 218 at 29.) As to the statute of limitations,
Magistrate Judge Hegarty discussed the applicable statute of limitations for all TVPA
claims in his analysis of “preliminary matters.” (Id. at 12–16.) The parties’ dispute over
the applicable limitations period is rooted in the legislative history of the TVPA, which
Magistrate Judge Hegarty summarized:
Congress originally passed the Victims of Trafficking and Violence
Protection Act in 2000. This Act created only criminal penalties for conduct
currently prohibited in 18 U.S.C. §§ 1589 and 1590. In 2003, Congress
amended the Act to add a private right of action for victims of violations
of §§ 1589, 1590, or 1591 at § 1595. At the time, the statute carried a fouryear limitations period for filing civil actions. Congress amended the
TVPA’s limitations period to ten years on December 23, 2008.
(Id. at 12–13) (emphasis added) (internal citations omitted). Persuaded by the logic of
the Court of Appeals for the Fourth Circuit in Cruz v. Maypa, 773 F.3d 138, 145 (4th Cir.
2014), Magistrate Judge Hegarty concluded:
Any of Plaintiffs’ TVPA claims that were unexpired when Congress
amended the Act [on December 23, 2008] to include a ten-year limitations
period are timely to the extent they fall within ten years of the filing the First
Amended Complaint [(May 4, 2018)].
(Doc. # 218 at 13–15.) As applied to Claim 3, Magistrate Judge Hegarty reasoned that
Plaintiff Joslin’s claim is timely “because some of the alleged sexual conduct occurred
after May 4, 2008.” (Id. at 27.)
Magistrate Judge Hegarty then found that the SAC “plausibly alleges [Defendant]
Steven Lopez] obtained [Plaintiff Joslin’s] services via means prohibited in
[Section] 1589(a)(1)–(4).” (Id. at 27–29.) He had previously explained in his discussion
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of preliminary matters that “labor and services,” as used in Sections 1589(a) and
1590(a), covers coerced sexual acts such as the “pay-to-play sexual acts alleged in the
SAC.” (Id. at 16–18) (citing United States v. Kaufman, 546 F.3d 1242, 1259–63 (10th
Cir. 2008)). As to Claim 3, he determined that only Section 1589(a)(2), which concerns
“serious harm or threats of serious harm” to the person providing the labor or services
or to another person, “could potentially support [Plaintiff Joslin’s] claim.” (Id. at 27.)
After reviewing the statutory definition of “serious harm,” relevant case law, and
Plaintiffs’ allegations, Magistrate Judge Hegarty concluded that because “no Defendant
in this case argues that the alleged ‘serious harm’ is insufficient as a matter of law to
support a claim under the TVPA” and because no party had presented him with (nor
had he found) “binding law identifying the ‘minimum for conduct that is actionable under
the TVPA,’” Plaintiff Joslin’s allegations in Claim 3 are sufficiently plausible to survive
the Lopez Defendants’ Motion to Dismiss. (Id. at 28–29.)
b.
Objections to the Recommendation and the Court’s Review
The Lopez Defendants reprise two arguments in their Objection that they
previously made in their Motion to Dismiss: that Claim 3 is barred by the statute of
limitations “that existed at the time that [the claim] arose” and that Plaintiffs fail to state a
claim upon which relief can be granted. (Doc. # 225 at 4–11.)
i.
Statute of Limitations for TVPA Claims
The Court concludes that for Claim 3 and Plaintiffs’ other TVPA claims, the
TVPA’s existing ten-year statute of limitations applies—even to claims based on
conduct that allegedly occurred when the TVPA had a four-year limitations period
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(before December 23, 2008), so long as the claim had not yet been barred by the fouryear limitation when the ten-year limitation was passed into law. It thus affirms
Magistrate Judge Hegarty’s assessment of the statute of limitations applicable to
Plaintiffs’ TVPA claims and rejects the Lopez Defendants’ argument that Claim 3 is time
barred.
Like Magistrate Judge Hegarty, the Court is persuaded by the Fourth Circuit’s
reasoning in Cruz. The plaintiff in Cruz alleged that she was forced to work for the
defendants at well-below minimum wages from 2002 until she escaped in January
2008. 773 F.3d at 141. At the time the alleged conduct took place (2002 until January
2008), the TVPA was governed by a four-year statute of limitations. Id. at 143–44. On
December 23, 2008, Congress amended the TVPA to include a ten-year statute of
limitations. Id. The plaintiff filed the lawsuit on July 16, 2013, alleging violations of
Sections 1589 and 1590, among other claims. Id. at 142–43. The district court
dismissed all the claims as time-barred. Id. at 143. The plaintiff argued on appeal to
the Fourth Circuit that her TVPA claims should be subject to the ten-year statute of
limitations enacted in 2008. Id. The defendants asserted that application of the TVPA’s
ten-year limitation period, enacted after the alleged conduct, would be impermissibly
retroactive. Id.
The Fourth Circuit held that “applying the [TVPA’s] extended limitations period to
claims that were unexpired at the time of its enactment”—December 23, 2008—“does
not give rise to an impermissible retroactive effect.” Id. at 145. To reach that
conclusion, the Fourth Circuit applied the “framework for determining whether a statute
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applies retrospectively to pre-enactment conduct” that is set forth in Landgraf v. USI
Film Products, 511 U.S. 244 (1994). 773 F.3d at 144–45. At the second step of the
Landgraf framework, determining whether the statute would operate retroactively, the
Fourth Circuit looked to a previous case in which it had applied the Landgraf framework
to a limitations period extension in the Veterans’ Benefit and Improvement Act, enacted
after the plaintiff’s claims had expired under the old statute of limitations, and found that
the new, extended statute of limitations would have an impermissible retroactive effect if
applied to the plaintiff’s expired claims. Id. (citing Baldwin v. City of Greensboro, 714
F.3d 828, 837 (4th Cir. 2013)). Its holding in that case “suggest[ed] a distinction
between expired claims and claims that were alive when the new limitations period was
enacted.” Id. at 145. The Fourth Circuit explained this distinction “makes sense for two
reasons:” first, because “applying a new limitations period to unexpired claims does not
‘attach new legal consequences to events completed before its enactment’” but “rather
merely prolongs the time during which legal consequences can occur,” and second,
because, “in the criminal context, there is a consensus that extending a limitations
period before prosecution is time-barred does not run afoul of the Ex Post Facto Clause
of the Constitution.” Id.
Accordingly, the Fourth Circuit rejected the defendants’ argument that applying
the TVPA’s extended limitations period to claims that were unexpired at the time of its
extension was impermissibly retroactive. Id. Whether the plaintiff’s TVPA claims could
proceed, it continued, would depend “on whether they were still alive under the old fouryear statute of limitations period when Congress enacted the new statute of limitations
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on December 23, 2008.” Id. Because that date was more than four years after the
plaintiff began working for the defendants, the Fourth Circuit remanded the case to the
district court to determine whether the plaintiff’s TVPA claims warranted equitable tolling
“until December 23, 2004, four years before” Congress extended the TVPA’s limitations
period. Id. at 146.
Numerous other courts, including one in this jurisdiction, have reached similar
conclusions that TVPA’s ten-year statute of limitations applies if the plaintiff’s claims
were alive when Congress amended the TVPA on December 23, 2008, to lengthen the
statute of limitations. See, e.g., Camayo v. John Peroulis & Sons Sheep, Inc., Nos. 10cv-00772, 11-cv-001132, 2013 WL 3927677, *2 (D. Colo. July 20, 2013); Lama v. Malik,
192 F. Supp. 3d 313, 322–23 (E.D.N.Y. 2006) (collecting cases). But see Abarca v.
Little, 54 F. Supp. 3d 1064 (D. Minn. 2014).
The Court adopts the reasoning of the Fourth Circuit and rejects the Lopez
Defendants’ argument that applying the ten-year limitations period to Claim 3 and
Plaintiffs’ other TVPA claims is an “improper retroactive application under Landgraf
because it involves the creation of additional liability for Steven Lopez.” (Doc. # 225 at
8.) Claim 3 was not expired on December 23, 2008, when Congress extended the
TVPA limitations period to ten years. By applying the ten-year statute of limitations, the
Court does not expose Defendant Steven Lopez to any new legal consequences; it
“merely prolongs the time during which legal consequences can occur.” 773 F.3d at
145; see also Camayo, 2013 WL 3927677 at *2 (holding that the amendment of TPVA’s
statute of limitations “did not . . . change the Defendants’ rights or impose any
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substantive burden on them;” it “merely extended the time in which a plaintiff may assert
claims for violations of already-existing rights.”). This does not amount to an
impermissible retroactive effect. Under TVPA’s ten-year limitations period, Claim 3 is
timely. The Court affirms Magistrate Judge Hegarty’s conclusion on this point.
The Lopez Defendants’ Objection does not persuade the Court otherwise. 6 The
Lopez Defendants attempt to distinguish Cruz from their case by describing the Fourth
Circuit as “carv[ing] out a narrow distinction to the rule against retroactivity for claims to
which an ‘equitable tolling’ basis existed, to distinguish the claims as ‘unexpired.’” (Doc.
# 225 at 7.) In this case, they contend, “Plaintiffs are not entitled to the remedy of
equitable tolling” because “the facts that existed in Cruz to justify equitable tolling do not
exist in the present case.” (Id.) That completely mischaracterizes the Fourth Circuit’s
opinion in Cruz and Plaintiffs’ theory of this case. Notably, the Fourth Circuit did not
consider the doctrine of equitable tolling until after it had concluded that “applying the
[TVPA’s] extended limitations period to claims that were unexpired at the time of its
enactment does not give rise to an impermissible retroactive effect.” Only after so
concluding did it address equitable tolling to determine whether the plaintiff’s TVPA
claims were unexpired under the previous four-year limitations period when Congress
The Court also rejects the Lopez Defendants’ second contention, that Magistrate
Judge Hegarty’s “refusal to ‘follow’” the case upon which they relied in their Motion to
Dismiss, Abarca v. Little, 54 F. Supp. 3d 1064 (D. Minn. 2014), “was based on an
incorrect distinction” he drew between Abarca and Cruz. (Doc. # 225 at 8–9.) As
Magistrate Judge Hegarty explained, Abarca has little persuasive value because, unlike
in the case presently before this Court, the plaintiff in Abarca asserted his civil claims
“under [TVPA] provisions that previously only imposed criminal liability.” 54 F. Supp. 3d
at 1069.
6
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extended the limitations period to ten years on December 23, 2008. Cruz, 773 F.3d at
145. In this case, there is no question that Claim 3 was unexpired when Congress
amended TVPA’s statute of limitations in late 2008. The Court agrees with Plaintiffs
that they “do not assert—nor do they need to—that the limitations period for their claims
should be equitably tolled.” (Doc. # 231 at 17.)
For the foregoing reasons, the Court affirms Magistrate Judge Hegarty’s
conclusion that Claim 3 is not time-barred.
ii.
Sufficiency of Factual Allegations
Seeing no clear error in his analysis, the Court affirms Magistrate Judge
Hegarty’s determination that Plaintiffs’ Claim 3 plausibly alleges a claim against
Defendant Steven Lopez. See (Doc. # 218 at 29); Summers, 927 F.2d at 1167.
In their Objection, the Lopez Defendants state that “Plaintiffs’ TVPA claims,”
Claims 3, 5, 8, 10, and 13, "are not sufficiently pled” because the SAC is “long on
conclusory allegations and utterly devoid of the requisite factual specificity.” (Doc.
# 225 at 10.) The Lopez Defendants did not raise this argument in their Motion to
Dismiss. Rather, they argued therein that Claim 3 must be dismissed for failure to state
a claim because Plaintiffs did not adequately allege “that they were forced to provide
any labor or services” to the Lopez Defendants. (Doc. # 106 at 8.) According to the
Lopez Defendants’ Motion to Dismiss, Plaintiffs “voluntarily remained” on the national
taekwondo team and their alleged sexual conduct was “their contributions to
[D]efendants USOC and/or USAT.” (Doc. # 106 at 8.) Because the Lopez Defendants
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did not previously argue that Claim 3 makes only conclusory statements and is devoid
of factual allegations, this argument is deemed waived. See Marshall, 75 F.3d at 1426.
Moreover, the Lopez Defendants’ objection that Plaintiffs’ TVPA claims are not
sufficiently pled is improper due to lack of specificity; it fails to even mention Magistrate
Judge Hegarty’s analysis of the sufficiency of Claim 3. See (Doc. # 225 at 10–11.)
Because their objection is not properly made, the Court reviews the part of the
Recommendation to which they object under a clear error standard. See Summers, 927
F.2d at 1167. Finding no clear error, the Court affirms this portion of the
Recommendation.
In sum, the Court is satisfied upon its de novo review that Magistrate Judge
Hegarty correctly concluded that Claim 3 is timely and is adequately pled. The Court
thus denies the Lopez Defendants’ Motion to Dismiss Claim 3.
2.
Claim 4: Plaintiff Joslin’s claim of forced labor, in violation of 18
U.S.C. §§ 1589(b) and 1595(a), against Defendant USAT
Claim 4 alleges that Defendant USAT is liable under Section 1589(b) because it
“knowingly benefitted from participation in a venture with [Defendant] Steven Lopez,
knowing or in reckless disregard of the fact that the venture was engaging in the . . .
obtaining of [Plaintiff Joslin’s] labor or services by means of . . . serious harm or threats
of serious harm.” (Doc. # 68 at 143.) Plaintiff Joslin asserts that she “reported
Defendant Steven Lopez’s abuse” to Defendant USAT. (Id.) Defendant USAT
benefitted from Defendant Steven Lopez’s conduct, Plaintiffs continue, “by collecting
money through sponsorships, grants, and for medals achieved at competitions, and for
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his recruitment and training of other elite taekwondo athletes, despite indications that
[Plaintiff] Joslin was being abused and raped.” (Id. at 144.)
As the Court stated above, pursuant to Section 1589(b), one can be liable for
violation of Section 1589’s prohibition on forced labor or services “simply by benefitting
financially from participation in a ‘venture’ with the primary offender.” Bistline, 901 F.3d
at 871. Section 1589(b) provides:
(b) Whoever knowingly benefits, financially or by receiving anything of
value, from participation in a venture which has engaged in the providing or
obtaining of labor or services by any of the means described in subsection
(a), knowing or in reckless disregard of the fact that the venture has
engaged in the providing or obtaining of labor or services by any of such
means, shall be punished as provided in subsection (d).
18 U.S.C. § 1589(b). The term “venture” “has not be defined in the context of [Section]
1589(b).” Bistline, 901 F.3d at 873.
Because the venture liability provisions in Sections 1595(a), 1589(b), and
1591(d) were not added to the TVPA until December 23, 2008, Defendant USAT moves
to dismiss Claim 4, as well as Claims 5, 6, 7, 9, 11, 12, and 14, on the ground that
Section 1595(a) “cannot be applied retroactively to support a civil cause of action for
misconduct that allegedly occurred prior to December 23, 2008.” (Doc. # 109 at 9–10.)
It argues that Claim 4 must be dismissed because “all of the Lopez [b]rothers’ relevant
alleged misconduct directed towards Plaintiffs” and its own alleged conduct took place
before 2006, “prior to authorization of civil claims against . . . those who benefit from
participation in a venture in violation of the chapter.” (Id. at 10–11.) However,
Defendant USAT did not explain its characterization that Plaintiffs’ TVPA claims,
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including Claim 4, “involve conduct prior to December 23, 2008,” but no conduct
thereafter. See (id. at 13–9.)
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty decided that Plaintiff Joslin “has plausibly stated a
claim against [Defendant] USAT under [Section] 1589(b)” and recommended that
Defendant “USAT’s Motion to Dismiss Claim 4 be denied.” (Doc. # 218 at 31.) By
noting that Claim 4 is only “valid” for alleged conduct that took place between December
23, 2008, and May 4, 2018, he implicitly agreed with Defendant USAT that Sections
1589(b) and 1591(d) cannot support a claim based on conduct that took place before
those subsections were enacted on December 23, 2008. See (id. at 29.)
The bulk of Magistrate Judge Hegarty’s discussion of Claim 4 was an application
of the four elements of a Section 1589(b) claim to Plaintiffs’ allegations. See (id. at 29–
31.) He concluded that Plaintiffs’ SAC satisfies all four elements. (Id.) First, the
allegations “plausibly establish that the relationship between [Defendant] Steven Lopez
and [Defendant] USAT is a venture.” (Id. at 30.) Second, Defendant USAT does not
dispute that it “knowingly benefitted from its relationship with [Defendant] Steven
Lopez.” (Id.) Magistrate Judge Hegarty cited Defendant Steven Lopez’s participation in
the 2016 Olympics and 2017 World Championships as instances “well within the period
that the claim is available” when Defendant USAT “benefitted from th[e] relationship.”
(Id.) Third, “the SAC plausibly alleges the venture engaged in obtaining [Plaintiff]
Joslin’s labor or services;” but for the venture, Magistrate Judge Hegarty explained,
Defendant Steven Lopez “would not have obtained—nor have been able to obtain—
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[Plaintiff] Joslin’s sexual services.” (Id. at 30–31.) And fourth, in light of Plaintiffs’
allegations that Defendant USAT “began an investigation of the Lopez brothers in 2014”
and hired an investigator, Donald Alperstein, in March 2015, see (Doc. # 68 at 60–61,
82), Plaintiffs “plausibly allege[] [Defendant] USAT knew or recklessly disregarded that
[Defendant] Steven [Lopez] had obtained the services of Plaintiffs.” (Doc. # 218 at 31.)
b.
Objections to the Recommendation and the Court’s Review
Defendant USAT’s objection to Magistrate Judge Hegarty’s recommendation that
its Motion to Dismiss be denied as to Claim 4 (and Claim 9) raises an entirely new
argument in favor of dismissal. See (Doc. # 226 at 4–6.) It contends that Plaintiff Joslin
does not have standing to assert Claim 4 because “[t]here is no nexus between [its]
alleged violation of 18 U.S.C. § 1589(b) and the damages alleged under Plaintiffs’
forced labor claims.” (Id. at 4.) To the best of the Court’s understanding, Defendant
USAT’s position is that Plaintiff Joslin is without standing to bring Claim 4 because
Section 1595(a) “authorizes the victim of a violation of [Section] 1589 to bring a civil
action for damages,” but Plaintiff Joslin was “no longer” a “victim[] in the alleged
venture” “by the time [Defendant] USAT allegedly learned of [Defendant] Steven
Lopez’s venture in 2014 or 2015 and by the time [it] allegedly knowingly benefitted from
the venture in 2016 and 2017” because she is a “former member[s] of USAT and . . .
had stopped competing in taekwondo, at the latest, in approximately 2011.” (Id. at 5–6.)
This argument is completely different than the one Defendant USAT raised in its Motion
to Dismiss and its Reply in support thereof. As such, for purposes of this Court’s review
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of the Recommendation, Defendant USAT waived this argument, see Marshall, 75 F.3d
at 1426, and the Court declines to consider it. See Stout, 2018 WL 2948222 at *4.
There is no clear error in Magistrate Judge Hegarty’s analysis of Claim 4. See
Summers, 927 F.2d at 1167. He appropriately applied the elements of a Section
1589(b) claim to the allegations in the SAC. The Court therefore overrules Defendant
USAT’s Objection with respect to Claim 4, and adopts Magistrate Judge Hegarty’s
recommendation that Defendant USAT’s Motion to Dismiss as to Claim 4 be denied.
3.
Claim 5: Plaintiff Joslin’s claim of trafficking with respect to forced
labor, in violation of 18 U.S.C. §§ 1590(a) and 1595(a), against
Defendant Steven Lopez and Defendant USAT
Bringing Claim 5 pursuant to the civil remedy provision of Section 1595(a),
Plaintiff Joslin asserts that Defendant Steven Lopez and Defendant USAT violated 18
U.S.C. § 1590, which imposes liability for human trafficking. (Doc. # 68 at 144–45.)
Specifically, the SAC alleges that Defendant Steven Lopez “knowingly recruited and
fraudulently enticed [Plaintiff Joslin] to come to Bonn, Germany, with the intention of
forcing her into sexual labor and services for him.” (Id. at 144.) It further alleges that
Defendant USAT, “through [its] agent, [Defendant] Steven Lopez, knowingly transported
[Plaintiff Joslin] to Bonn, Germany, and to various tournaments and training centers
between 2006 and 2010.” (Id. at 145.)
The TVPA imposes liability for trafficking, which is separate and distinct from
liability for forced labor or services. Baxla v. Chaudhri, 225 F. Supp. 3d 588, 593 (E.D.
Va. 2016). Section 1590(a) outlines the liability for human trafficking as follows:
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Whoever knowingly recruits, harbors, transports, provides, or obtains by
any means, any person for labor or services in violation of this chapter shall
be fined under this title or imprisoned not more than 20 years, or both.
18 U.S.C. § 1590(a).
Defendant USAT moved to dismiss Claim 5, as well as Plaintiffs’ other claims
under Section 1595(a) (Claims 3, 6, 7, 9, 11, 12, and 14), “because [Section 1595(a)]
cannot be applied retroactively to support a civil cause of action for misconduct that
allegedly occurred prior to December 23, 2008,” when Section 1595(a) was amended to
include liability for one who knowingly benefits from participation in a venture engaged
in a TVPA violation. (Doc. # 109 at 9–13.) It appears from this argument that
Defendant USAT is interpreting Plaintiffs’ claims as asserting Defendant USAT is liable
as a participant in a venture, rather than liable as a principal. See (id.) However, in
their omnibus Response to the Motions to Dismiss, Plaintiffs clarified their theory that
Defendant “USAT is guilty as a principal for the trafficking of [Plaintiff Joslin] from late
2008 until 2010, as it provided her to [Defendant] Steven [Lopez] and transported her
. . . knowing or in reckless disregard of the fact that he would continue to use her for her
sexual services.” (Doc. # 139 at 22.)
The Lopez Defendants moved to dismiss Claim 5 on the basis that the claim is
“barred by the statute of limitations, as well as the plain meaning of the statute.” (Doc.
# 106 at 6–10.) They also argued that Plaintiff Joslin “fail[s] to adequately plead
trafficking against [the Lopez Defendants] within the meaning” of Section 1590(a). (Id.
at 14.) Contrasting their case with one in which the defendant recruited a housekeeper
“to make the defendant’s husband happy,” the Lopez Defendants asserted that
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“Plaintiffs in this case were not recruited to join USAT to provide any labor or services in
the form of sexual favors for [Defendant Steven Lopez].” (Id.) (citing Roe v. Howard,
No. 1:16-cv-562, 2018 WL 284977 (E.D. Va. Jan. 3, 2018)).
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty began by resolving “[t]he critical dispute among the
parties”—"the word ‘for’ in [Section] 1590(a).” (Doc. # 218 at 31–31.) Drawing on the
definition of “for” in Black’s Law Dictionary, he determined that “Plaintiffs’ [Section]
1590(a) claim will proceed if they allege a Defendant recruited, harbored, transported,
provided, or obtained [Plaintiff] Joslin ‘for the benefit of’ her coerced sexual services.”
(Id. at 32.)
He recommended that the Court grant Defendant USAT’s Motion to Dismiss as
to Claim 5 because he saw no allegation in the “entirety of the SAC” that Defendant
“USAT (as the principal) transported [Plaintiff] Joslin for [Defendant] Steven [Lopez] to
obtain sexual services from her.” (Doc. # 218 at 34.) As Magistrate Judge Hegarty
explained, Plaintiffs’ assertion that Defendant USAT knew that Defendant Steven Lopez
would continue to use Plaintiff Joslin for her sexual services does not meet the TVPA’s
condition “that liability as a principal requires that [Defendant] USAT ‘knowingly’
transported [Plaintiff] Joslin ‘for’ forced labor or services.” (Id.)
Magistrate Judge Hegarty recommended that the Lopez Defendants’ Motion to
Dismiss be denied as to Claim 5 because Plaintiffs “plausibly allege” Defendant Steven
Lopez transported Plaintiff Joslin for her sexual services between 2006 and 2010. (Id.
at 32–33.) Magistrate Judge Hegarty had already rejected the Lopez Defendants’
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statute of limitations argument in his discussion of “preliminary matters,” which this
Court summarized in Section III(A)(1)(a) above. See (id. at 12–16.)
b.
Objections to the Recommendation and the Court’s Review
Plaintiffs object to Magistrate Judge Hegarty’s recommendation that the Court
dismiss Claim 5 as alleged against Defendant USAT, asserting that they allege in the
SAC that Defendant USAT is liable on Claim 5 “under a venture theory of liability, . . .
not solely as a principal.” (Doc. # 227 at 10.) They fault Magistrate Judge Hegarty for
grasping onto the statement in their Response that Defendant “USAT is guilty as a
principal for the trafficking” of Plaintiff Joslin, see (Doc. # 139 at 22), without considering
another section of their Response, in which they argued that Defendant USAT is also
liable on Claim 5 under the venture theory, see (id. at 23–31). (Doc. # 227 at 10.) The
two theories of liability available under Section 1595(a), they assert, “are not mutually
exclusive.” (Id.) With respect their venture theory of Defendant USAT’s liability,
Plaintiffs note that Magistrate Judge Hegarty’s recommended dismissal was “even more
improper,” given that Defendant “USAT didn’t even challenge the substance of Count 5
in its [M]otion to [D]ismiss.” (Id.)
Upon de novo review, the Court rejects Magistrate Judge Hegarty’s conclusion
that Defendant USAT’s Motion to Dismiss should be granted as to Claim 5. As Plaintiffs
made clear in their Response to the motion and reassert in their Objection, Plaintiffs
assert Claim 5 against Defendant USAT pursuant to both Section 1595(a)’s principal
liability and its venture liability provisions. See (Doc. # 139 at 23–31; Doc. # 227 at 10).
Magistrate Judge Hegarty failed to address the latter. See (Doc. # 218 at 33–34.)
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To succeed in avoiding dismissal of Claim 5 against Defendant USAT under
Section 1595(a)’s venture liability, Plaintiffs must plausibly allege that Defendant USAT
“knowingly benefit[ted], financially or by receiving anything of value, from participation in
a venture which [Defendant USAT] knew or should have known has engaged in an act
in violation” of Section 1590. 18 U.S.C. § 1595(a). The Court concludes that Plaintiffs’
allegations satisfy this standard. Their SAC alleges that Defendant USAT “knowingly
benefitted from participating in a venture with [Defendant] Steven Lopez,” who it knew
or should have known was transporting Plaintiff Joslin for her sexual labor or services.
(Doc. # 68 at 145.) The Court also observes that Defendant USAT did not challenge
the sufficiency of the allegations underlying Claim 5 in their Motion to Dismiss; it only
argued that Claim 5 is timed-barred. See (Doc. # 109 at 9–13). Accordingly, the Court
denies Defendant USAT’s Motion to Dismiss as to Claim 5.
In response to Magistrate Judge Hegarty’s recommendation that their Motion to
Dismiss be denied as to Claim 5, the Lopez Defendants assert the same objections that
they raised on Claim 3: that the claim is barred by the statute of limitations “that existed
at the time that [the claim] arose” and that Plaintiffs fail to state a claim upon which relief
can be granted. (Doc. # 225 at 4–11.) For the same reasons the Court rejected these
arguments in Section III(A)(1)(b), it also rejects them as to Claim 5. Accordingly, the
Court affirms the Recommendation as to Claim 5 alleged against the Lopez Defendants
and denies the Lopez Defendants’ Motion to Dismiss Claim 5.
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4.
Claim 8: Plaintiff Means’s claim of forced labor, in violation of 18
U.S.C. §§ 1589(a), 1595(a), and 2255, against Defendant Steven Lopez
In Claim 8, Plaintiff Means alleges that Defendant Steven Lopez “knowingly
obtained forced sexual services from [her] by means of serious harm or threats in
violation of 19 U.S.C. § 1589(a)(2)” and by means of “a scheme . . . intended to cause
[her] to believe that, if she did not perform such labor or services, she would suffer
serious harm of physical restraint in violation of 18 U.S.C. § 1589(a)(4).” (Doc. # 68 at
148–49.) Plaintiff Means asserts Claim 8 pursuant to TVPA’s civil remedy provision,
Section 1595(a), and pursuant to 18 U.S.C. § 2255, which provides a civil remedy to
minor victims who suffer a “personal injury” from various sex crimes, see Doe v.
Boeland, 698 F.3d 877, 880 (6th Cir. 2012). (Doc. # 68 at 148–49.)
The SAC asserts that, in 2007, when Plaintiff Means was 17 years old,
Defendant Steven Lopez “engaged in grooming behaviors” and took her on dates. (Id.
at 129–30.) On at least two of those dates, Plaintiff Means “performed oral sex” on
Defendant Steven Lopez, and he “had vaginal sex with [her]” in February 2008. (Id. at
130.) They began having an “open sexual relationship in March 2008, when [Plaintiff
Means] was 17 years old,” the SAC continues, and “had sex . . . in several states and
countries” while “attending USOC and USAT sponsored events.” (Id. at 130–31.)
Plaintiff Means turned 18 years old on May 7, 2008. See (Doc. # 122 at 2); F.R.E.
201(b)(2). She alleges that in June 2008, Defendant Steven Lopez invited her to a
party, “put a drug in [her] drink that caused her to pass out so that he could rape her,”
and then proceeded “to rape [] her while she was passed out.” (Id. at 131.) Defendant
Means last competed in taekwondo in April 2011. (Id. at 132.) She claims that in
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February 2013, Defendant Steven Lopez “again drugged [her]” and “pinned her to a wall
and tried to kiss her.” (Id.) She states that she “felt that if she angered the Lopez
[b]rothers, she would face retaliation” and that “she had to service the Lopez [b]rothers
with her body in order to compete in USA Taekwondo and reach the Olympics.” (Id. at
133.) She alleges that she has “suffered a variety of mental and physical symptoms as
a result of the personal injuries caused by the Lopez [b]rothers, the USOC, and USAT.”
(Id.)
In their Motion to Dismiss, the Lopez Defendants argued that Claim 8 must be
dismissed for three reasons. See (Doc. # 106.) First, they contended that, to the extent
Claim 8 is brought pursuant to Section 2255, it is time barred because when Defendant
Steven Lopez allegedly misbehaved in 2007 and 2008, Section 2255 had a statute of
limitations of six years, so Plaintiff Means’s claim “expired in June 2014.” (Id. at 3–6.)
Second, the Lopez Defendants argued that to the extent Claim 8 is asserted pursuant to
Section 1595 (a) of the TVPA, it (and Plaintiffs’ other TVPA claims) is time barred
because Plaintiff Means does not allege “specific times, dates, or places” after August
24, 2008 (ten years prior to the SAC being filed), regarding Defendant Steven Lopez’s
conduct. (Id. at 6–8.) Third, the Lopez Defendants argued that Claim 8 (as well as
Claim 1 and Claim 3) must be dismissed because “Plaintiff fails to adequately allege
that they were forced to provide any labor or services for [Defendant Steven Lopez]”
under Section 1989(a). (Id. at 8–10.)
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a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty recommended that the Lopez Defendants’ Motion to
Dismiss be denied with respect to Claim 8. (Doc. # 218 at 34–37.) Regarding the
portion of the claim asserted pursuant to Section 2255, Magistrate Judge Hegarty
traced the history of that provision’s statute of limitations and determined that “any
conduct that occurred after February 14, 2008, would now still be timely, because the
conduct occurred while [Plaintiff Means] was a minor and she had brought her claim
within ten years after her eighteenth birthday.” (Id. at 37.) Though he acknowledged
“factual disputes . . . as to when the conduct specifically occurred in February 2008, and
portions of the claim are time-barred,” he concluded that “it is not proper to dismiss the
entire claim when it is not plain from the face of the complaint that the claim is expired.”
(Id.)
As to the portion of Claim 8 brought under Section 1595(a), Magistrate Judge
Hegarty stated that “any portion of the claim asserting violative conduct before May 4,
2008,” ten years prior to the filing of Plaintiffs’ First Amended Complaint, is time-barred,
“but the time claim based on conduct after May 4, 2008, will survive.” (Id. at 35.) He
then applied the elements of a Section 1589(a)(2) claim to Defendant Steven Lopez’s
alleged conduct towards Plaintiff Means in June 2008 and concluded that the SAC “at
least plausibly alleges that [Defendant] Steven [Lopez] obtained sexual services by
threat of ‘serious harm’ necessary to support a claim under [Section] 1589(a)(2).” (Id.)
b.
Objections to the Recommendation and the Court’s Review
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The Lopez Defendants object to Magistrate Judge Hegarty’s assessment of
Claim 8 with the same arguments they used in objecting to his conclusions on Claim 3
and Claim 5: first, that Claim 8, like Claims 3 and 5, is barred by the statute of limitations
that existed at the time of Defendant Steven Lopez’s alleged conduct, and second, that
Claim 8 and Plaintiffs’ other TVPA claims are not sufficiently pled. (Doc. # 225 at 5–11.)
The Court rejected these objections in its de novo review of Claim 3 in Section
III(A)(1)(b) above. The Court rejects them here for the same reasons and need not
restate that analysis. It affirms and adopts Magistrate Judge Hegarty’s recommendation
that the Lopez Defendants’ Motion to Dismiss be denied with respect to Claim 8.
5.
Claim 9: Plaintiff Means’s claim of forced labor, in violation of 18
U.S.C. §§ 1589(b) and 1595(a), against the Institutional Defendants
In Claim 9, Plaintiff Means asserts pursuant to Section 1595(a) that the
Institutional Defendants are liable under Section 1589(b) because they “knowingly
benefitted from participation in a venture with the Lopez brothers, knowing or in reckless
disregard of the fact that the venture was engaged in the . . . obtaining of [her] labor or
services by means of . . . serious harm or threats of serious harm.” (Doc. # 68 at 149–
50.) She contends that the Institutional Defendants knew or should have known about
Defendant Steven Lopez’s conduct towards her because they “housed [her] at their
facilities, paid her a stipend, [and] observed her performance in competitions” and
because she “reported—verbally and in formal written complaints—the Lopez brothers’
abuse.” (Id. at 150.) The Institutional Defendants benefitted from Defendant Steven
Lopez’s venture, Plaintiffs assert, “by collecting money through sponsorships, licensing,
grants, publicity, medals achieved at competitions, and for his recruitment and training
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of other elite taekwondo athletes.” (Id.) Claim 9 is similar to the Plaintiff Joslin’s Claim
4 against Defendant USAT.
Defendant USOC moved to dismiss Claim 9, as well as Claims 11 and 12,
because “the SAC fails to plausibly allege that [Defendant USOC] violated sex
trafficking laws.” (Doc. # 108 at 6–10.) It argued that the SAC “provides no facts to
support” its contention that Defendant USOC knew or recklessly disregarded that the
venture was engaged in obtaining Plaintiff Means’s labor or services by means of force,
“fails to allege any specific conduct by [Defendant] USOC furthering the supposed
venture,” and “does not plausibly tie th[e] purported benefit [to Defendant USOC] to the
USOC’s alleged knowing participation in forced labor or sex trafficking.” (Id. at 9–10.)
Defendant USOC also asserted that while it “strongly prefer[red] to address the sex
trafficking claims on their merits,” Claim 9 and Claim 12 are time barred. (Id. at 10.)
Defendant USAT moved to dismiss Claim 9 and Plaintiffs’ other claims brought
pursuant to Section 1595(a) (Claims 4, 5, 6, 7, 11, 12, and 14) by arguing that Section
1595(a) “cannot be applied retroactively to support a civil cause of action for misconduct
that allegedly occurred prior to December 23, 2008.” (Doc. # 109 at 9.)
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty recommended that the Court deny both Institutional
Defendants’ Motions to Dismiss as to Claim 9 because the SAC plausibly alleges all
four elements of a Section 1589(b) claim. (Doc. # 218 at 38–40.) He rejected
Defendant USOC’s Motion to Dismiss as “misunderstand[ing] the prohibited conduct
under the TVPA,” clarifying that “[n]othing in Section 1595(a) requires the party to
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benefit from the [forced] labor or services for liability to attach” and that the party “need
not be ‘involved’ in obtaining forced labor or services to be civilly liable” under the
venture theory of liability. (Id. at 39.) His analysis of these points built on his prior
examination of “preliminary matters,” including the definition of “venture” as used in
Section 1589(b). See (id. at 18–24.)
b.
Objections to the Recommendation and the Court’s Review
Defendant USOC raises three objections to the Recommendation’s treatment of
Claim 9. (Doc. # 224 at 2–8.) First, as it argued in its Motion to Dismiss, see (Doc.
# 108 at 9–10), Defendant USOC argues that Section 1589(b) of the TVPA “requires
that the venture engaged in the prohibited activity—i.e., forced labor or sex trafficking”
and that the SAC “does not alleged a forced labor venture between [Defendant] USOC
and [Defendant] Steven Lopez.” (Doc. # 224 at 2.) Second, Defendant USOC posits
that Section 1589(b) also requires an overt act to trigger venture liability. (Id. at 5–7.) It
faults Magistrate Judge Hegarty for “misapply[ying] the relevant legal standard” and
asserts that his reasoning “improperly ‘ensnares conduct that the statute never
contemplated.’” (Id. at 7) (quoting United States v. Afyare, 631 F. App’x 272, 281 (6th
Cir. 2016)). Third, Defendant USOC asserts that Magistrate Judge Hegarty “erred in
finding the SAC alleged [Defendant USOC] knowingly benefitted from the alleged forced
labor” because there was a three-year period of time between Defendant Steven
Lopez’s alleged abuse of Plaintiff Means in 2013 and Defendant USOC’s benefitting
from Defendant Steven Lopez’s participation in the 2016 Olympics. (Id. at 7–8.)
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The Court rejects all three of Defendant USOC’s objections regarding Claim 9.
First, Defendant USOC is incorrect in stating that Section 1589(b) requires that the
venture itself engaged in obtaining the labor or services by force. See (id. at 2.) In a
recent case also arising under Section 1589(b), the Court of Appeals for the Tenth
Circuit applied a broad definition of venture. Bistline, 901 F.3d at 873–76. It wrote:
While the term “venture” has not been defined in the context of § 1589(b),
the First Circuit recently persuasively applied the definition from another
TVPRA subsection to the forced labor context. In § 1591(e)(6), “venture” is
defined as “any group of two or more individuals associated in fact, whether
or not a legal entity.”
Bistline, 918 F.3d at 873 (internal citation omitted) (citing Ricchio v. McLean, 853 F.3d
553 (1st Cir. 2017)). Notably, the Tenth Circuit did not adopt a narrower definition of
venture, like the one Defendant USOC proposes; it did not state that Section 1589(b)
required that the entire venture at issue be actively engaged in TVPA violations. 7 Id. at
874–76.
In this case, considering the SAC in its entirety, see id. at 874 (stating that the
complaint is to be read as whole), the Court is satisfied that Plaintiffs have sufficiently
alleged that Defendant Steven Lopez and the Institutional Defendants are “associated in
fact” and therefore qualify as venture under Section 1589(b). Moreover, the unreported
Sixth Circuit case upon which Defendant USOC relies, United States v. Afyare, is
unpersuasive. See (Doc. # 224 at 2–5.) The Tenth Circuit did not mention it at all when
Though Defendant USOC cited the Tenth Circuit recent decision in Bistline in its Objection,
Defendant USOC does not acknowledge the Tenth Circuit’s statement that the First Circuit
“persuasively applied” the definition of venture from Section 1591(e)(6) to a Section 1589(b)
claim. See (Doc. # 24 at 3, 5–6); Bistline, 918 F.3d at 873.
7
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it recently considered the definition of venture within the context of Section 1589(b).
See Bistline, 901 F.3d at 873–76. As Magistrate Judge Hegarty observed (Doc. # 218
at 19), Afyare involved a claim arising under a different provision, Section 1591(a)(2),
and the Sixth Circuit concluded that the definition of “venture” provided in Section
1591(e)(5) was merely a “bare meaning” “modif[ied]” by the “placement and purpose” of
the word Section 1591(a)(2). Afyare, 632 F. App’x at 284–85. The Court agrees with
Magistrate Judge Hegarty’s assessment that “the Sixth Circuit’s rationale for its
definition of a ‘venture’ in [Section] 1591 cannot be reasonably applied to the definition
in [Section] 1589(b).” (Doc. # 218 at 21.)
Second, Section 1589(b) does not require a member of a venture to have
committed overt acts in furtherance of obtaining forced labor or services in order for that
member to be civilly liable to a plaintiff. Defendant USOC relies heavily on Ratha v.
Phatthana Seafood Co., Ltd., No. CV 16-4271-JFW, 2017 WL 8293174, *3–5 (C.D. Cal.
Dec. 21, 2017), to argue that Section 1589(b) “requires plausible allegations of an ‘overt
act’ by [Defendant] USOC in furtherance of the alleged forced labor venture.” See (Doc.
# 224 at 5–7.) However, the district court’s holding in Ratha that “the relevant case law
requires more than receipt of a passive benefit to satisfy to [TVPA’s] participation in a
venture element” was based on a district court ruling that the Tenth Circuit recently
reversed and remanded in relevant part in Bistline, 901 F.3d at 873. Ratha, 2017 WL
8293174 at *4 (quoting Bistline v. Jeffs, No. 2:16-cv-788 TS, 2017 WL 108039 (D. Utah,
Jan. 11, 2017), reversed and remanded in part, Bistline, 901 F.3d at 873). The Court
thus finds Defendant USOC’s reliance on Ratha to be unavailing. Although Section
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1589(b) certainly requires the defendant to participate in a venture with another member
who violated Section 1589(a), nothing in it requires that the defendant’s participation be
an overt act in furtherance of the other member’s TVPA violation.
Third, Defendant USOC’s objection that the SAC “lacks any plausible allegation
that [Defendant] USOC benefitted from its participation” in a venture with Defendant
Steven Lopez is simply inaccurate. (Doc. # 224 at 7–8.) The SAC plainly alleges that
Defendant USOC “benefitted (financially and otherwise) from [Defendant] Steven . . .
Lopez’s actions, including by collecting money through sponsorships, licensing, grants,
publicity, [and] for medals achieved at competitions.” (Doc. # 68 at 150.) Defendant
USOC’s objection is narrowly focused on Magistrate Judge Hegarty’s statement that
“each institution knowingly benefitted from the venture; [Defendant] Steven [Lopez]
participated in the 2016 Olympics in taekwondo.” (Doc. # 224 at 7) (citing Doc. # 218 at
38). However, the SAC includes many additional allegations as to other ways in which
Defendant USOC benefitted from its venture with Defendant Steven Lopez. For
example, Plaintiffs allege that, from 2006 until the Lopez Defendants were suspended
from the sport in 2018, the Institutional Defendants benefitted from “the ‘money and
medals’ delivered by the Lopez brothers.” (Doc. # 68 at 34–35.) When reading the
SAC as a whole, as the Tenth Circuit required in Bistline, 901 F.3d at 874, the Court is
satisfied that Plaintiffs plausibly allege Defendant USOC benefitted from its participation
in the venture with Defendant Steven Lopez.
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For these reasons, Defendant USOC’s three objections concerning Claim 9 are
overruled. The Court affirms and adopts Magistrate Judge Hegarty’s recommendation
to deny Defendant’s USOC Motion to Dismiss Claim 9.
Defendant USAT’s objection to the Recommendation as to Claim 9 is the same
objection it made to the Claim 4 recommendation, as detailed in Section III(A)(2)(b)
above. (Doc. # 226 at 4–6.) As the Court previously noted, Defendant USAT has
waived any argument regarding Plaintiffs’ standing by failing to raise it before Magistrate
Judge Hegarty, and the Court will not consider it. See Marshall, 75 F.3d at 1426. The
Court sees no clear error in Magistrate Judge Hegarty’s analysis of Claim 9. It
overrules Defendant USAT’s Objection and denies its Motion to Dismiss Claim 9.
6.
Claim 10: Plaintiff Means’s claim of trafficking with respect to forced
labor, in violation of 18 U.S.C. §§ 1590(a), 1595(a), and 2255, against
Defendant Steven Lopez
Plaintiff Means’s Claim 10 against Defendant Steven Lopez, which is brought
pursuant to Section 1595(a) and Section 2255, is similar to Plaintiff Joslin’s Claim 5.
Plaintiff Means alleges that Defendant Steven Lopez violated Section 1590(a) by
knowingly recruiting and fraudulently enticing her to “come from Washington State to
Houston, Texas, to Cleveland, Ohio, to Colorado Springs Colorado, to Sugar Land,
Texas, to Des Moines, Iowa, to Beijing, China, and to various other cities and countries
with the intention of forcing her into sexual labor and services for him.” (Doc. # 68 at
151.)
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The Lopez Defendants moved to dismiss Claim 10 for the same reason they
argued for dismissal of Plaintiffs’ other claims alleged pursuant Section 1595 and
Section 2255 (Claims 3, 5, and 8): that the claim is time barred. (Doc. # 106 at 3–8.)
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty recommended that the Court deny the Lopez
Defendants’ Motion to Dismiss Claim 10. (Doc. # 218 at 40–41.) With respect to
limitations periods, he determined that the portion of the claim arising under Section
1595(a) “would be valid” for conduct that allegedly took place between May 4, 2008,
and May 4, 2018, and that the portion of the claim asserted pursuant to Section 2255 is
valid for alleged conduct between February 14, 2008, and May 4, 2018. (Id. at 40.) In
light of those limitations periods, Magistrate Judge Hegarty stated that allegations
concerning Defendant Steven Lopez’s conduct towards Plaintiff Means in 2003, when
he allegedly took a special interest in her and convinced her family to move to Texas so
that she could train with him, are “outside the window for timely claims under either
[Section] 1590 or [Section] 2255.” (Id.); see (Doc. # 68 at 128–29). However, he
determined that Plaintiff Means’s allegation that Defendant Steven Lopez raped her in
June 2008 is timely. (Doc. # 218 at 41.)
b.
Objections to the Recommendation and the Court’s Review
The Lopez Defendants object to Magistrate Judge Hegarty’s assessment of
Claim 10 on the same grounds they objected to his assessments of Claims 3, 5, and 8:
first, that Claim 10 is barred by the statute of limitations that existed at the time of
Defendant Steven Lopez’s alleged conduct, and second, that Claim 10 and Plaintiffs’
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other TVPA claims are not sufficiently pled. (Doc. # 225 at 5–12.) For the same
reasons the Court overruled these objections in its de novo review of Claim 3 in Section
III(A)(1)(b) above, it overrules them as to Claim 10. The Court affirms and adopts
Magistrate Judge Hegarty’s recommendation that the Lopez Defendants’ Motion to
Dismiss be denied with respect to Claim 10.
7.
Claim 13: Plaintiff Means’s claim of sexual exploitation,
transportation, and illegal sexual activity, in violation of 18 U.S.C.
§§ 2242, 2421, 2422, 2423(a)–(c), and 2255, against Defendant Steven
Lopez
Claim 13 asserts that Defendant Steven Lopez knowingly transported Plaintiff
Means when she was a minor “with the intent that she engage in sexual activity for
which any person could be charged with a criminal offense” and thus violated 18 U.S.C.
§§ 2421, 2422, and 2423. 8 (Doc. # 68 at 155.) She brings Claim 13 pursuant to
18 U.S.C. § 2421(a) provides:
(a) In general.--Whoever knowingly transports any individual in interstate or foreign
commerce, or in any Territory or Possession of the United States, with intent that
such individual engage in prostitution, or in any sexual activity for which any person
can be charged with a criminal offense, or attempts to do so, shall be fined under
this title or imprisoned not more than 10 years, or both.
18 U.S.C. § 2421(a). Section 2422(a) provides:
(a) Whoever knowingly persuades, induces, entices, or coerces any individual to
travel in interstate or foreign commerce, or in any Territory or Possession of the
United States, to engage in prostitution, or in any sexual activity for which any
person can be charged with a criminal offense, or attempts to do so, shall be fined
under this title or imprisoned not more than 20 years, or both.
18 U.S.C. § 2422(a). And Section 2423 provides, in relevant part:
(a) Transportation with intent to engage in criminal sexual activity.--A person who
knowingly transports an individual who has not attained the age of 18 years in
interstate or foreign commerce, or in any commonwealth, territory or possession
of the United States, with intent that the individual engage in prostitution, or in any
sexual activity for which any person can be charged with a criminal offense, shall
be fined under this title and imprisoned not less than 10 years or for life.
(b) Travel with intent to engage in illicit sexual conduct.--A person who travels in
interstate commerce or travels into the United States, or a United States citizen or
an alien admitted for permanent residence in the United States who travels in
8
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Section 2255, which provides her with a civil remedy to the extent that she was minor
when she was a victim of a violation of several criminal provisions, including 18 U.S.C.
§§ 2421, 2422, and 2423. (Id. at 155–56.)
The Lopez Defendants argued that the Court must dismiss Claim 13 and
Plaintiffs’ other claims asserted pursuant to Section 2255 because the claims are time
barred. (Doc. # 106 at 3–6.)
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty referred to his previous analysis of the Lopez
Defendants’ timeliness argument, see (Doc. # 218 at 35–37), and repeated his
determination that Plaintiff Means “may assert claims based on conduct that occurred
from February 14, 2008 until May 7, 2008” under Section 2255. (Id. at 41–42.)
Because Plaintiff Means alleges that Defendant Steven Lopez’s conduct “occurred from
‘late 2007’ until at least June 2008,” he recommended that the Court deny the Lopez
Defendants’ Motion to Dismiss with respect to Claim 13. (Id. at 42.)
b.
Objections to the Recommendation and the Court’s Review
The Lopez Defendants raise the same two arguments regarding Magistrate
Judge Hegarty’s treatment of Claim 13 as they did for Claims 3, 5, 8, and, 10: that it is
foreign commerce, with a motivating purpose of engaging in any illicit sexual
conduct with another person shall be fined under this title or imprisoned not more
than 30 years, or both.
(c) Engaging in illicit sexual conduct in foreign places.--Any United States citizen
or alien admitted for permanent residence who travels in foreign commerce or
resides, either temporarily or permanently, in a foreign country, and engages in
any illicit sexual conduct with another person shall be fined under this title or
imprisoned not more than 30 years, or both.
18 U.S.C. § 2423.
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barred by the statute of limitations and that Plaintiff Means fails to state a claim for relief.
(Doc. # 225 at 5–12.) For the same reasons the Court overruled these objections in its
de novo review of Claim 3 in Section III(A)(1)(b) above, it overrules the objections with
respect to Claim 13. The Court affirms and adopts Magistrate Judge Hegarty’s
recommendation that the Lopez Defendants’ Motion to Dismiss be denied with respect
to Claim 13.
8.
Claim 14: All Plaintiffs’ claim of obstruction, attempted obstruction,
and interference with enforcement, in violation of 18 U.S.C.
§§ 1590(b), 1591(d), 1595(a), and 2255, against the Institutional
Defendants
Plaintiffs assert in Claim 14 that the Institutional Defendants “obstructed, attempted
to obstruct, interfered, or prevented the enforcement” of Section 1590(a) and thereby
violated 18 U.S.C. § 1590(b). 910 (Doc. # 68 at 156–58.) Plaintiffs allege that the
Institutional Defendants impeded the enforcement of the TVPA in numerous ways, such
as by ignoring and dismissing verbal and written complaints of sexual abuse and by
delaying investigations of reports of sexual abuse. (Id. at 157–58.) They assert Claim
Section 1590(b) provides:
(b) Whoever obstructs, attempts to obstruct, or in any way interferes with or
prevents the enforcement of this section, shall be subject to the penalties under
subsection (a).
18 U.S.C. § 1590(b). Section 1590 generally concerns trafficking with respect to forced labor.
10
Though the SAC states in the heading of Claim 14 that it asserts violation of 18 U.S.C.
§ 1591(d), there is no mention of Section 1591(d) in the text of the claim. (Doc. # 68 at 156–
58.) Section 1591(d) provides:
(d) Whoever obstructs, attempts to obstruct, or in any way interferes with or
prevents the enforcement of this section, shall be fined under this title, imprisoned
for a term not to exceed 25 years, or both.
18 U.S.C. § 1591(d). Section 1591 generally concerns sex trafficking of children by force, fraud,
or coercion.
9
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14 pursuant to Section 1595(a), and Plaintiff Means also asserts it pursuant to Section
2255. (Id. at 156.)
Defendant USOC moved to dismiss Claim 14 on the ground that the claim is
“facially deficient.” (Doc. # 108 at 5.) It argued that the “SAC does not identify any
actual law enforcement effort that [Defendant] USOC ostensibly obstructed or how it
supposedly did so.” (Id.)
Defendant USAT similarly argued that Claim 14 must be dismissed because
Plaintiffs “fail to plead obstruction with particularity.” (Doc. # 109 at 16.) According to
Defendant USAT (and implicit in Defendant USOC’s Motion to Dismiss, see (Doc. # 108
at 5)), the language of Sections 1590(b) and 1591(d) “makes it clear that the prohibited
obstruction is confined to a government actor or government investigation.” (Doc. # 109
at 16.) Defendant USAT also challenged what it characterized as Plaintiffs’ “attempt to
shoehorn interactions between private actors . . . into their obstruction claims by citing
to allegedly false testimony given to Congress in May 2018” because “simply calling the
testimony false . . . does not suffice to meet Plaintiffs’ burden to plead with particularity.”
(Id. at 17.)
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty began by addressing the “parties’ first dispute,”
whether the enforcement at issues in Sections 1590(b) and 1591(d) “must be performed
by a government actor.” (Doc. # 218 at 42.) Persuaded by another district court’s
finding that obstruction of a private investigation did not violate Section 1591(d) and
citing the lack of case law “finding a violation of the TVPA for obstruction of anything
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other than a government investigation,” Magistrate Judge Hegarty concluded that
“[o]bstruction of a private investigation is insufficient to state a claim of either [Sections]
1590(b) or 1951(d).” (Id. at 43) (citing Jean-Charles v. Perlitz, 937 F. Supp. 2d 276,
287–88 (D. Conn. 2013)). Magistrate Judge Hegarty then rejected for want of
supporting authority Defendant USAT’s assertion that Claim 14 is “subject to the
heightened requirement in Rule 9(b) that a claim be plead with particularity.” (Id. at 43–
44.)
Turning to the merits of Claim 14, Magistrate Judge Hegarty determined that the
SAC does not allege that Defendant USOC obstructed a government investigation of a
TVPA violation. (Id. at 44–45.) “Indeed,” he wrote, “no governmental actor is present in
Plaintiffs’ allegations” about Defendant USOC, and allegations that Defendant USOC
interfered with Defendant USAT’s investigation of the Lopez Defendants “is simply
insufficient to state a claim under the obstruction statutes.” (Id.) He therefore
recommended that the Court dismiss Claim 14 as alleged against Defendant USOC.
However, he concluded that the SAC sufficiently alleges that Defendant USAT
obstructed a government investigation of a TVPA violation. (Id. at 45–46.) Magistrate
Judge Hegarty reviewed Plaintiffs’ allegations that the Executive Director of Defendant
USAT falsely testified to the House of Representatives’ Oversight and Investigations
Subcommittee that Defendant USAT did not control or limit the budget of Alperstein, the
investigator it hired to pursue allegations of the Lopez Defendants’ sexual abuse. (Id.)
(citing Doc. # 68 at 61–62). Magistrate Judge Hegarty found “that Congress is a
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government actor.” (Id. at 46.) He recommended that the Court deny Defendant
USAT’s Motion to Dismiss as to Claim 14. (Id.)
b.
Objections to the Recommendation and the Court’s Review
Plaintiffs object to Magistrate Judge Hegarty’s recommendation to dismiss
Defendant USOC from Claim 14. (Doc. # 227 at 11–17.) They first dispute Magistrate
Judge Hegarty’s determination that Sections 1590(b) and 1591(d) are concerned only
with obstruction of governmental enforcement of the TPVA. (Id. at 11–12.) Plaintiffs
argue that “the plain language of Section 1590(b) does not contain the ‘government’
limitation that the Recommendation imposes” and that the Magistrate Judge erred by
“skipping this step and instead weighing the persuasiveness of out-of-circuit cases.”
(Id.) To the extent the language of Section 1590(b) is ambiguous, Plaintiffs urge that
“the proposed ‘government’ limitation is belied by the incredibly broad and expensive
language and remedial purpose of the Act itself.” (Id. at 11–12.) Second, Plaintiffs
argue that, even if the TVPA’s obstruction provisions are concerned only with
government enforcement actions, they “allege ample government involvement” in their
allegations regarding Defendant USOC. (Id. at 12.) They cite their allegations that
Defendant USOC was directly involved “in the suspension of . . . Alperstein’s
investigation and his reports to law enforcement;” and that, but for this obstructive
conduct, “the Lopezes would have been turned over to the FBI and local law
enforcement much sooner.” (Id. at 13) (citing Doc. # 68 at 62–74). Plaintiffs also cite
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their allegations that officials of Defendant USOC falsely testified to Congress. (Id. at
16–17) (citing Doc. # 68 at 50–55.)
At the outset, the Court affirms Magistrate Judge Hegarty’s determination that the
TVPA’s obstruction provisions are concerned only with governmental enforcement of
the TVPA. Obstruction of a private investigation does not give rise to liability under
Section 1590(b) or 1591(d). The cases Magistrate Judge Hegarty cited all support that
conclusion. See, e.g., Jean-Charles, 937 F. Supp. 2d at 287–88. Additional cases this
Court reviewed similarly speak only of government enforcement actions. See, e.g.,
United States v. Farah, 766 F.3d 599, 612 (6th Cir. 2014) (when evaluating a criminal
defendant’s argument concerning Section 1591(d), discussing the government’s “right
to enforce the laws and punish those who obstruct its endeavors.”) Plaintiffs do not
offer, nor has this Court found, any cases that suggest obstruction of a private
investigation is actionable under Section 1590(b) or Section 1591(d).
The Court also agrees with Magistrate Judge Hegarty that Plaintiffs’ allegations
of Defendant USOC’s obstruction of the government’s enforcement of the TVPA are
insufficient. Plaintiffs’ claim that Defendant USOC interfered with Alperstein’s
investigation and delayed the Lopez brothers being turned over to law enforcement
authorities is devoid of specificity. See (Doc. # 68 at 62–74.) They assert, for example,
that Defendant USOC worked in concert with Defendant USAT “to obstruct the
investigation of the Lopez brothers,” but fail to assert any supporting factual averments
regarding how Defendant USOC did so. The Court need not accept these conclusory
allegations. See S. Disposal, Inc., 161 F.3d at 1262. As to Plaintiffs’ allegations that
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Defendant USOC’s official lied to Congress, the Court notes that Plaintiffs themselves
acknowledge the official was testifying before a Senate subcommittee “in the hope of
avoiding restructuring of the USOC.” (Doc. # 68 at 50.) Plaintiffs offer no evidence that
the Congressional hearing was directly related to the enforcement of the TVPA.
Because the SAC is not legally sufficient to state a claim for relief against Defendant
USOC under Section 1590(b) or Section 1591(d), the Court overrules Plaintiffs’
Objection and grants Defendant USOC’s Motion to Dismiss Claim 14.
Defendant USAT objects to Magistrate Judge Hegarty’s conclusion that Claim 14
sufficiently states a claim for relief against Defendant USAT on the grounds that the
Congressional hearing at which its executive allegedly lied “had nothing to do with
enforcement of 18 U.S.C. §§ 1590 or 1591,” was not governmental enforcement of the
TVPA, and cannot give rise to an obstruction claim under Section 1590(b) or Section
1591(d). (Doc. # 226 at 7–9.) Defendant USAT also asserts that dismissal of Claim 14
is necessary because Plaintiffs have not shown the required “nexus between the
allegedly obstructive act and the government proceeding” and have not alleged that
Defendant USAT and its officials had the “‘knowingly’ mens rea requirement.” (Id. at
10–13.) Defendant USAT did not raise any of these arguments before the Magistrate
Judge. See (Doc. # 109 at 16–17.) The Court thus deems these objections waived and
declines to review them. See Stout, 2018 WL 2948222 at *4. Seeing no clear error in
Magistrate Judge Hegarty’s analysis of Claim 14 as alleged against Defendant USAT,
the Court affirms and adopts his recommendation that Defendant USAT’s Motion to
Dismiss be denied as to Claim 14.
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B.
PLAINTIFFS’ RICO CLAIM
1.
Claim 15: All Plaintiffs’ claim of violation of RICO, 18 U.S.C.
§ 1962(d), against all Defendants
Plaintiffs allege in Claim 15 that Defendants violated the Racketeer Influenced
and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962. 11 (Doc. # 68 at 158–65.)
They bring their claim on behalf of themselves and “the Class” pursuant to 18 U.S.C.
§ 1964(c), which provides for civil remedies for “[a]ny person injured in his business or
property by reason of a violation of [S]ection 1962” of RICO. (Id.) As Magistrate Judge
Hegarty described, see (Doc. # 218 at 46–47), the underpinning of Plaintiffs’ RICO
claim is their allegation that “[a]t all relevant times, . . . Defendants operated as an
association-in-fact enterprise, which was formed for the purpose of stopping, hindering,
and delaying all investigations of and enforcement actions against the Lopez brothers”
and for the purpose of “making false and corrupting statements that concealed the true
nature of the sex abuse and exploitation committed by the Lopez brothers and
facilitated by [the Institutional Defendants].” (Doc. # 68 at 160.) Plaintiffs allege that
Defendants engaged in a pattern of racketeering activity through predicate acts that
included “violations of 18 U.S.C. § 1590(b), obstructing and interfering with enforcement
Claim 15 specifically alleges violations of Section 18 U.S.C. §§ 1962(c) and (d). Section
1962(c) provides:
(c) It shall be unlawful for any person employed by or associated with any
enterprise engaged in, or the activities of which affect, interstate or foreign
commerce, to conduct or participate, directly or indirectly, in the conduct of such
enterprise's affairs through a pattern of racketeering activity or collection of
unlawful debt.
18 U.S.C. § 1962(c). Section 1962(d), in turn, declares it “unlawful for any person to conspire to
violate any of the provisions of subsection (a), (b), or (c) of [Section 1962].” 18 U.S.C.
§ 1962(d).
11
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of the TVPA, and 18 U.S.C. § 1592(c), the corruption of an official proceeding, as well
as the underlying violations committed by [Defendants] in violation of [Section] 1589
(forced labor and services) and [Section] 1591 (sex trafficking).” (Doc. # 68 at 162.)
Defendants all moved to dismiss Claim 15. (Doc. # 106 at 17; Doc. # 108 at 10; Doc.
# 109 at 18.)
Magistrate Judge Hegarty recommended that the Court dismiss Claim 15 in its
entirety because Plaintiffs “do not have standing to bring their civil RICO claim,” as they
“have not alleged [a specific injury to business or property] here.” (Id. at 53–54.) No
party objected to the Magistrate Judge’s recommendation to dismiss Claim 15. See
(Doc. ## 224–27.)
After reviewing the Recommendation’s treatment of Claim 15, in addition to
Defendants’ Motions to Dismiss and Plaintiffs’ Response and the relevant legal
authority, the Court is satisfied that the recommended dismissal of Claim 15 is sound
and not clearly erroneous or contrary to law. See Summers, 927 F.2d at 1167. The
Court dismisses Claim 15 in its entirety.
C.
PLAINTIFFS’ STATE COMMON LAW CLAIMS
Of the claims they originally asserted under state common law, Plaintiffs have
withdrawn Claim 18. (Doc. # 139 at 3.)
1.
Claim 16: All Plaintiffs’ claim of negligent supervision against the
Institutional Defendants
Plaintiffs allege in Claim 16 that the Institutional Defendants negligently
supervised the Lopez Defendants, who, Plaintiffs assert, were employees of the
Institutional Defendants. (Doc. # 68 at 165–66.)
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Colorado law recognizes a direct tort of negligent supervision. Settle v. Basinger,
2013 COA 18, ¶ 28. To prove negligent supervision, a plaintiff must establish: “(1) the
defendant owed the plaintiff a legal duty to supervise others; (2) the defendant breached
that duty; and (3) the breach of the duty caused the harm that resulted in damages to
the plaintiff.” Id. at ¶ 23 (citing Keller v. Koca, 111 P.3d 445, 447 (Colo. 2005)).
Negligent supervision, like all claims based on negligence, has a two-year statute of
limitations. See Colo. Rev. Stat. § 13-80-102(1)(a). The claim accrues on the date both
the underlying injury and its cause are known or should have been known by the plaintiff
by the exercise of reasonable diligence. See Colo. Rev. Stat. § 13-80-108(1); John Doe
1 v. Archdiocese of Milwaukee, 734 N.W.2d 827, 846 (Wis. 2007) (claims for negligent
supervision are “accrued as a matter of law by the time of the last incident of sexual
assault.”).
Both Institutional Defendants moved to dismiss Claim 16 on numerous grounds,
including that the claim is time barred. (Doc. # 108 at 16–21; Doc. # 109 at 20–21.)
Magistrate Judge Hegarty concluded that Plaintiffs’ negligent supervision claim is
time barred because “the last incident of alleged underlying abuse occurred in
approximately 2011” and any negligent supervision claims “expired, at the latest, in
2013.” (Doc. # 218 at 56.) Seeing no rationale for equitably tolling the limitations
periods, the Magistrate Judge recommended that Claim 16 be denied as untimely and
the Institutional Defendants’ Motions to Dismiss be granted as to that count. (Id. at 57.)
No party objected to the Magistrate Judge’s recommendation to dismiss Claim
16. See (Doc. ## 224–27.)
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The Court has reviewed the relevant filings and governing law, and it is satisfied
that Magistrate Judge Hegarty’s recommendation to dismiss Claim 16 is sound and not
clearly erroneous or contrary to law. See Summers, 927 F.2d at 1167. The Court
dismisses Claim 16 in its entirety.
2.
Claim 17: All Plaintiffs’ claim of negligent retention against the
Institutional Defendants
Claim 17 alleges that the Institutional Defendants negligently retained the Lopez
Defendants, “despite [the Institutional Defendants’] knowledge of the risks that they
posed to Plaintiffs and third parties.” (Doc. # 68 at 168.)
It is not altogether clear that Colorado recognizes a distinct tort of negligent
retention. In the few cases this Court located, Colorado courts have treated claims of
negligent supervision and negligent retention as one and the same. See, e.g., Ferrer v.
Okbamicael, 2017 CO 14M, ¶ 29 (“An employer’s negligent act in hiring, supervision
and retention, or entrustment is not a wholly independent cause of the plaintiff’s
injuries, unconnected to the employee’s negligence.” (emphasis added)); Van Osdol v.
Vogt, 891 P.2d 402, 408 (Colo. App. 1994), affirmed and remanded, 908 P.2d 1122
(Colo. 1996) (“An employer may be subject to liability for negligent supervision and
retention if the employer knows or should have known that an employee’s conduct
would subject third parties to an unreasonable risk of harm.” (emphasis added)).
The Institutional Defendants moved to dismiss this claim at the same time and
with the same arguments they used for dismissal of Plaintiffs’ negligent supervision
claim. (Doc. # 108 at 16–21; Doc. # 109 at 20–21.)
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Magistrate Judge Hegarty observed that “Colorado appears to treat the claims” of
negligent supervision and negligent retention “as the same.” (Doc. # 218 at 57.) He
reasoned that “[a]accordingly, this claim fails for the same reason as the negligent
supervision claim;” “both [are] barred by the statute of limitations.” (Id. at 58.) He
recommended that the Court dismiss Claim 17.
No party has objected to the dismissal of Claim 17. See (Doc. ## 224–27.)
Magistrate Judge Hegarty’s recommendation to dismiss Claim 17, like his
recommendation regarding Claim 16, is sound and not clearly erroneous or contrary to
law. See Summers, 927 F.2d at 1167. The Court dismisses Claim 17.
3.
Claim 19: All Plaintiffs’ claim of negligence against the Institutional
Defendants
In Claim 19, Plaintiffs allege that the Institutional Defendants breached their
duties to “exercise reasonable care in relation to the safety and welfare of their member
athletes, including Plaintiffs,” to “exercise reasonable care to avoid creating or
maintaining unreasonable risks to the safety and welfare of their member athletes,” and
to “exercise reasonable care in investigating and pursuing complaints of criminal
conduct [and] sexual misconduct . . . against their member athletes.” (Doc. # 68 at
175.) Plaintiffs assert that the Institutional Defendants breached those duties in
numerous ways between 2014 and 2018, such as by “[c]ausing the investigation [by]
Alperstein to drag on” and then suspending the investigation “in the middle of it so the
Lopez brothers could compete and coach at the 2016 Olympics,” by “[u]nreasonably
delaying notifying the FBI or other law enforcement of sexual abuse,” and by “[f]ailing to
properly fund or staff SafeSport.” (Id. at 176–77.) Plaintiffs claim they suffered
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“institutional abandonment,” “reputational damages,” and “severe emotional injuries” as
a result of the Institutional Defendants’ negligence. (Id. at 178.)
To establish a negligence claim, the plaintiff must show: (1) the existence of a
legal duty to the plaintiff; (2) the defendant breached that duty; and (3) that the breach
of the duty caused the harm resulting in damages to the plaintiff.” Keller, 111 P.3d at
447 (citing Ryder v. Mitchell, 54 P.3d 885, 889 (Colo. 2002)).
Both Institutional Defendants moved to dismiss Plaintiffs’ negligence claim.
Defendant USAT contended that Plaintiffs’ negligence and gross negligence claims are
time barred “to the extent such claims are based on sexual misconduct by the Lopez
brothers” and that Defendant USAT owed no duty to Plaintiffs because they are all
“former athletes who stopped competing long ago.” (Doc. # 109 at 20–23.) Defendant
USOC argued that Plaintiffs fail to identify an applicable legal duty because it “has no
‘member athletes,’” that Plaintiffs rely on “speculative, conclusory, and fantastical
claims” of “recent conduct, plainly intended to avoid the statutes of limitations,” and that
Plaintiffs fail to “plausibly allege that [Defendant USOC’s] purportedly negligent actions
. . . caused any legally cognizable damages.” (Doc. # 108 at 22–24.)
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty recommended that Court grant Defendant USAT’s
Motion to Dismiss Plaintiff’s negligence claim but deny Defendant USOC’s Motion to
Dismiss the claim. (Doc. # 218 at 64.)
The Magistrate Judge determined that Defendant USAT did not owe Plaintiffs a
legal duty and that Plaintiffs’ negligence claim against Defendant USAT therefore failed.
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(Id. at 58–61.) He was persuaded by Defendant USAT’s argument that it owed no duty
to Plaintiffs because they were all former members of the organization during the
statutory period. (Id. at 59–61.) He then considered “whether [the Institutional
Defendants] owed a duty to former members of USAT to reasonably investigate their
complaints of sexual abuse” and applied the factors identified in Taco Bell, Inc. v.
Lannon, 744 P.2d 43, 46 (Colo. 1987): “(1) the risk involved, (2) the foreseeability and
likelihood of injury as weighed against the social utility of the [defendant's] conduct,
(3) the magnitude of the burden of guarding against injury or harm, and (4) the
consequences of placing the burden upon the [defendant].” (Doc. # 218 at 59–61.)
Magistrate Judge Hegarty concluded that “the Taco Bell factors weigh decidedly against
finding a duty to investigate allegations of misconduct by former members/athletes for
purposes of attaching liability for negligence.” (Id. at 61.) Because Plaintiffs failed to
establish that Defendant USAT owed them a legal duty, the Magistrate Judge
recommended that the Court dismiss the negligence claim as alleged against Defendant
USAT. (Id. at 61, 64.)
Turning to Defendant USOC, Magistrate Judge Hegarty recommended that the
Court deny its Motion to Dismiss Claim 19. (Id. at 64.) With respect to the first element
of a negligence claim, the existence of a legal duty to Plaintiffs, he accepted Plaintiffs’
contention that Defendant USOC had “assumed a duty by intervening in the affairs of
the NGBs and of Plaintiffs, setting up SafeSport, asking Alperstein to turn his
investigation over to SafeSport . . . and inducing Plaintiffs’ reliance on [Defendant]
USOC’s help.” (Id. at 61–63) (quoting Doc. # 139 at 50–51) (citing Jefferson Cty. Sch.
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Dist. R-1 v. Justus By and Through Justus, 725 P.2d 767 (Colo. 1986)). As to the third
element, resulting damages to Plaintiffs, Magistrate Judge Hegarty rejected Defendant
USOC’s contention that Plaintiffs’ negligence claim must fail because they do not allege
physical damages. (Id. at 63–64.) Plaintiffs, he explained, “allege physical injuries in
addition to emotional distress.” (Id. at 64.) In sum, he found that Plaintiffs allege the
elements required “for stating a negligence claim in Colorado.” (Id.)
b.
Objections to the Recommendation and the Court’s Review
Plaintiffs object to the recommendation to dismiss Defendant USAT from the
negligence claim on the grounds that, “like [Defendant] USOC, [Defendant] USAT
assumed a duty by launching an investigating and engaging in efforts to address past
harms and is liable for the state law claims for the same reasons as [Defendant]
USOC.” (Doc. # 227 at 18.) They also fault Magistrate Judge Hegarty for determining
that Plaintiffs have not sufficiently alleged Defendant USAT owed them a legal duty,
characterizing his “plainly improper” analysis on that point as “pursu[ing] this defense on
[Defendant] USAT’s behalf” and “veer[ing] into fact-finding and factor-weighing (which is
categorically improper at the motion to dismiss stage.” (Id.)
Plaintiffs waived their objection that Defendant USAT assumed a legal duty
“starting in 2014 when it engaged Mr. Alperstein to investigate the complaints of these
former athletes against the Lopez brothers, . . . to implement recommended SafeSport
policies, and to gather evidence, make reports, and initiate disciplinary or ethics
proceedings against the Lopez brothers.” (Id. at 21.) They did not assert it (nor any
position remotely similar to it) in their Response to Defendant USAT’s Motion to Dismiss
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(in which Defendant USAT had asserted it did not owe Plaintiffs any legal duty) (Doc.
# 109 at 21–23). (Doc. # 139 at 48–49.) Rather, Plaintiffs made a policy argument that
Defendant “USAT’s duty rule would incentivize bad actors . . . to ‘expel’ victims . . . and
then claim no duty is owed to any victim because the victim is now a ‘former’ athlete.”
(Id.) Because Plaintiffs waived their contention that Defendant USAT assumed a legal
duty to them, see Marshall, 75 F.3d at 1426, the Court declines to consider it, see Stout,
2018 WL 2948222 at *4.
The Court rejects Plaintiffs’ contention that it was improper for Magistrate Judge
Hegarty to determine that “the Taco Bell factors weigh decidedly against finding a duty
to investigate allegations of misconduct by former members/athletes for purposes of
attaching liability for negligence” (Doc. # 218 at 61). (Doc. # 227 at 18–19.) Plaintiffs
offer no support for their bald assertion that “the duty factors cannot be weighed at the
Rule 12(b)(6) stage.” (Id.) And this Court has located case law in which Colorado
courts have decided at the motion to dismiss stage whether a plaintiff established that
the defendant owed the plaintiff a legal duty. E.g., N.M. by and through Lopez v.
Trujillo, 2017 CO 79, ¶ 36 (holding as a matter of law that the defendant did not owe the
plaintiff a duty of care, on appeal of the district court’s finding the same at the motion to
dismiss stage). The Court does not see anything improper in the Magistrate Judge’s
evaluation that Plaintiffs have not sufficiently alleged that Defendant USAT owed them a
duty. It affirms and adopts Magistrate Judge Hegarty’s recommendation to grant
Defendant USAT’s Motion to Dismiss as to Plaintiffs’ negligence claim.
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Defendant USOC objects to Magistrate Judge Hegarty’s recommendation to
deny its Motion to Dismiss the negligence claim for three reasons, corresponding to the
three elements of a negligence claim. (Doc. # 224 at 8–13.) First, Defendant USOC
argues that the Magistrate Judge’s finding that it had assumed a duty to Plaintiff was
erroneous because the Magistrate Judge did not accurately or completely apply the test
developed by Colorado courts for when “this narrow doctrine applies.” (Id. at 8–11.)
Second, it asserts that the Magistrate Judge “did not consider [its] argument that the
SAC fails to allege that [Defendant] USOC breached any purported duty.” (Id. at 11.)
And third, Defendant USOC contends that Magistrate Judge Hegarty’s conclusion that
Plaintiffs plausibly allege damages was unfounded. (Id. at 12–13.)
Upon de novo review, the Court agrees with Defendant USOC that Plaintiffs fail
to state a claim of negligence against Defendant USOC. Specifically, Plaintiffs fail to
adequately allege the third element of their negligence claim—that Defendant USOC’s
purportedly negligent conduct caused them legally cognizable damages. As Magistrate
Judge recognized (Doc. # 218 at 63), Colorado courts “have never recognized a cause
of action for emotional distress grounded in negligence without proof that the plaintiff
sustained physical injury.” Culpepper v. Pearl Street Bldg., 877 P.2d 877, 880 n.3
(Colo. 1994); see Williams v. Continental Airlines, Inc., 943 P.2d 10, 16 (Colo. App.
1996) (“[S]imple negligence cannot provide the basis for the recovery of damages for
mental or emotional suffering, unless such negligence has resulted in either physical
injury or in the creation of a reasonable risk of bodily harm.”).
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Here, Plaintiffs have not alleged physical injury during the relevant time period as
a result of Defendant USOC’s purportedly negligent handling of the investigation of the
Lopez Defendants. The Court does not accept Plaintiffs’ conclusory allegation in Claim
19 that they “have suffered . . . physical injuries” because that allegation lacks any
supporting factual enhancement. See (Doc. # 68 at 178); Iqbal, 556 U.S. at 678.
Though the Court does not question Plaintiffs’ claims of physical injuries from the Lopez
Defendants’ alleged abuse, Plaintiffs’ last reported contact with the Lopez Defendants
was in 2013. Such physical injuries were not caused by Defendant USOC’s
investigation (or any lack thereof), and they are well outside of the statute of limitations
for this claim. There is simply no allegation that Defendant USOC’s handling of the
investigation within the statute of limitations—2016 through 2018—caused Plaintiffs’
physical injuries. The Court disagrees with Magistrate Judge Hegarty’s finding
otherwise. See (Doc. # 218 at 64.) The sole example of an alleged physical injury
Magistrate Judge Hegarty cited was Plaintiff Mandy Meloon’s assertion in the SAC that
she was treated in 2015 for PTSD “caused by the sexual trauma she endured at the
hands of the Lopez brothers” and the Institutional Defendants. (Id.) (citing Doc. # 68 at
112). However, Plaintiffs have withdrawn Plaintiff Meloon’s individual claims (Claims 1
and 2), and she was treated for PTSD in 2015, outside of the statute of limitations for
this claim. Because the SAC tenders only naked assertions of physical injuries caused
by Defendant USOC’s allegedly negligent investigation and thus fails to establish the
third element of a negligence claim, the Court dismisses Plaintiffs’ negligence claim
against Defendant USOC.
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4.
Claim 20: All Plaintiffs’ claim of gross negligence against the
Institutional Defendants
In Claim 20, Plaintiffs allege that the Institutional Defendants were grossly
negligent in breaching their duties to Plaintiffs by “[e]ngaging in conduct that was
wanton and willful, [and] reckless[] and in conscious disregard of the safety of female
taekwondo athletes, including Plaintiffs.” (Doc. # 68 at 179.) As an example of such
gross negligence, they contend that the Institutional Defendants “suspended an ongoing
investigation and related restriction in order for [Defendant] Steven Lopez to compete
and [Defendant] Jean Lopez to coach at the 2016 Olympics and 2017 World
Championships.” (Id. at 179–81.)
Colorado courts have recognized a tort of gross negligence or willful and wanton
conduct. See, e.g., Hamill v. Cheley Colo. Camps, Inc., 262 P.3d 945, 954 (Colo. App.
2011); Forman v. Brown, 944 P.2d 559, 564 (Colo. App. 1996). Gross negligence is
“action committed recklessly, with conscious disregard for the safety of others.” Hamill,
262 P.3d at 954 (citing Forman, 944 P.2d at 564). “Such conduct extends beyond mere
unreasonableness.” Forman, 944 P.2d at 564 (citing Terror Mining Co. v. Roter, 866
P.2d 929 (Colo. 1994)). Whether a defendant's conduct is purposeful or reckless is
ordinarily a question of fact; however, ‘if the record is devoid of sufficient evidence to
raise a factual issue, then the question may be resolved by the court as a matter of
law.’” Hamill, 262 P.3d at 954 (citing Forman, 944 P.2d at 564).
Both Institutional Defendants argued for the dismissal of Plaintiffs’ gross
negligence claim in their arguments for the dismissal of Plaintiffs’ negligence claim.
Neither Institutional Defendant treated the gross negligence claim differently than the
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negligence claim, though Defendant USOC briefly highlighted the “higher standard” of
gross negligence. See (Doc. # 109 at 20–23; Doc. # 108 at 22–24.) The Court
summarized the Institutional Defendants’ arguments regarding the dismissal of
Plaintiffs’ negligence claims in Section III(C)(3) above.
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty “reach[ed] the same conclusions for this claim as
Claim 19,” Plaintiffs’ negligence claim. (Doc. # 218 at 64.) He therefore recommended
that Defendant USAT’s Motion to Dismiss be granted and that Defendant USOC’s
Motion to Dismiss be denied as to Plaintiffs’ gross negligence claim. (Id.)
b.
Objections to the Recommendation and the Court’s Review
Plaintiffs object to Magistrate Judge Hegarty’s recommendation regarding this
dismissal of Defendant USAT from their negligence and gross negligence claims; they
treat their negligence and gross negligence claims as essentially the same. See (Doc.
# 227 at 18–23.) First, Plaintiffs object to Magistrate Judge Hegarty’s recommendation
that Defendant USAT be dismissed from their gross negligence claim because they
believe that Defendant USAT “assumed a duty by launching an investigation and
engaging in efforts to address past harms.” (Doc. # 227 at 18.) Plaintiffs waived this
objection, as the Court described in the context of the previous claim. Next, Plaintiffs
assert that Magistrate Judge Hegarty erred by applying the Taco Bell factors and finding
that Defendant USAT did not owe Plaintiffs a legal duty. (Doc. # 227 at 18–19.) The
Court rejects this argument for the reasons it explained in Section III(C)(3)(b) above.
The Court affirms and adopts Magistrate Judge Hegarty’s recommendation to dismiss
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Defendant USAT from Claim 20, the gross negligence claim, because Plaintiffs fail to
plausibly allege that Defendant USAT owed them a duty.
Defendant USOC objects to Magistrate Judge Hegarty’s recommendation that
the Court deny its Motion to Dismiss with respect to Plaintiffs’ gross negligence claim;
they fault him for “failing to analyze whether the SAC alleges that [Defendant] USOC
acted with the culpability to establish gross negligence, even though [it] highlighted the
stringent standard for that claim.” (Doc. # 224 at 13–14.) The Court agrees that the
Recommendation did not assess whether Plaintiffs’ allegations satisfy the standard of
gross negligence—“action committed recklessly, with conscious disregard for the safety
of others,” Hamill, 262 P.3d at 954 (citing Forman, 944 P.2d at 564).
The Court agrees with Defendant USOC upon de novo review that Plaintiffs do
not state a legally sufficient claim of gross negligence against Defendant USOC. The
Court does not even need to reach whether Plaintiffs adequately allege that Defendant
USOC acted recklessly, with conscious disregard for their safety, because Plaintiffs fail
to establish that they were physically injured by Defendant USOC’s conduct between
2016 and 2018. The Court explained Plaintiffs’ failure to allege this element in Section
III(C)(3)(b) above. For the same reason that Plaintiffs’ negligence claim against
Defendant USOC fails, so too does their gross negligence claim against Defendant
USOC. The Court therefore grants Defendant USOC’s Motion to Dismiss as to the
gross negligence claim.
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5.
Claim 21: All Plaintiffs’ claim of outrageous conduct against
Defendant USOC
Finally, Plaintiffs allege in Claim 21 that Defendant USOC “engaged in extreme
and outrageous conduct” by, “among other things,” “[c]ontinuing to support and clothe
[Defendants] Steven and Jean Lopez with the legitimacy and authority of Team USA,
despite having actual and constructive knowledge of their decades-long pattern of serial
sexual predation.”12 (Doc. # 68 at 182–83.) The SAC states that “[a]s a direct and
proximate result of the outrageous conduct,” especially “the August 2018 reinstatement
of [Plaintiffs’] abuser,” “Plaintiffs have suffered severe emotional distress.” (Id. at 184.)
The tort of outrageous conduct exists in Colorado. Churchey v. Adolph Coors
Co., 759 P.2d 1336, 1349 (Colo. 1988).
The elements of liability for the tort of extreme and outrageous conduct are
that: 1. the defendant engaged in extreme and outrageous conduct; 2. the
defendant engaged in the conduct recklessly or with the intent of causing
the plaintiff severe emotional distress; and 3. The plaintiff incurred severe
emotional distress which was caused by the defendant’s conduct.
Culpepper, 877 P.2d at 882 (citing CJI-Civ.3d 23:1). Proof of accompanying physical
injury is not required. Id. (citing Rugg v. McCarty, 476 P.2d 753, 756 (Colo. 1970)).
With respect to the first element, the Colorado Supreme Court has explained that the
conduct must be:
[S]o outrageous in character, and so extreme in degree, as to go beyond all
possible bounds of decency, and to be regarded as atrocious, and utterly
Plaintiffs initially asserted this claim of outrageous conduct against Defendant USOC and
SafeSport. (Doc. # 68 at 182–84.) Several of the SAC’s allegations of outrageous conduct are,
to the best of this Court’s understanding, focused on SafeSport’s conduct. See (id. at 183)
(concerning SafeSport’s April 3, 2018 report about Defendant Jean Lopez and its subsequent
appellate proceedings). As the Court noted above, Plaintiffs voluntarily dismissed SafeSport
from this action on March 20, 2018. (Doc. # 223.)
12
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intolerable in a civilized community. Generally, the case is one in which the
recitation of the facts to an average member of the community would arouse
his resentment against the actor, and lead him to exclaim, “Outrageous!”
Churchey, 759 P.2d at 1350 (quoting Rugg, 476 P.2d at 756). As to the second
element:
A person acts with intent to cause severe emotional distress when he
engages in conduct with the purpose of causing severe emotional distress
to another person, or he knows that his conduct is certain or substantially
certain to have that result. A person acts recklessly in causing severe
emotional distress in another if, at the time of the conduct, he knew or
reasonably should have known that there was a substantial probability that
his conduct would cause severe emotional distress to the other person.
Culpepper, 877 P.2d at 882–83 (citing CJI-Civ.3d 23:3). “Although the jury ultimately
determines whether conduct is outrageous,” Han Ye Lee v. Colo. Times, Inc., 222 P.3d
957, 963 (Colo. App. 2009), “the court should determine in the first instance whether
reasonable people may differ as to whether the conduct of the defendant has been
‘sufficiently extreme and outrageous to result in liability,’” Churchey, 759 P.2d at 1350.
Defendant USOC moved to dismiss Plaintiffs’ outrageous conduct claim on the
grounds that Plaintiffs’ claim, which it described as being grounded “in allegations that
[SafeSport] reinstated [Defendant] Jean Lopez in August 2018,” fails “to meet the bar for
outrageous conduct.” (Doc. # 108 at 24–25.) Critically, it argued, “the SAC fails to
allege that [Defendant] USOC played any role in the reinstatement of Jean Lopez.” (Id.
at 24.)
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty recommended that the Court deny Defendant USOC’s
Motion to Dismiss as to Plaintiffs’ outrageous conduct claim, finding that “there are
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sufficient allegations that could lead a jury to conclude that ‘[Defendant USOC] acted
recklessly with the knowledge that there was a substantial probability that [its] conduct
would cause severe emotional distress.’” (Doc. # 218 at 66.) He cited the SAC’s
allegations that Defendant USOC “secretly” worked with Defendant USAT “behind
closed doors to make sure that the investigation against the Lopez brothers was
delayed and obstructed because of their key roles in the 2016 Olympics,” that it and
Defendant USAT “wanted” and allowed the Lopez Defendants to participate in the 2016
Olympics, and that it and Defendant USAT paid the Lopez Defendants to participate in
other international competitions, such as the 2017 World Championships, “[a]midst the
Alperstein investigation from 2015 [to] 2018.” (Id.) (citing Doc. # 68 at 63–64, 67, 71–
72).
b.
Objections to the Recommendation and the Court’s Review
Defendant USOC takes issue with the Recommendation’s treatment of Claim 21
on three grounds. (Doc. # 224 at 14–15.) It first argues that “Claim 21, as pled,
involves only SafeSport’s conduct,” and that the Magistrate Judge “did not, nor could
he, conclude that [Defendant] USOC participated in or controlled those proceedings.”
(Id. at 14.) Second, it asserts that Magistrate Judge Hegarty “failed to undertake the
necessary analysis of outrageousness.” (Id.) And third, Defendant USOC argues that
“the SAC fails to allege the required culpability: that [it] ‘intentionally or recklessly
caused severe emotional distress.’” (Id. at 15) (quoting Coors Brewing Co. v. Floyd,
978 P.2d 663, 666 (Colo. 1999)).
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Defendant USOC is correct that the Magistrate Judge erred by not examining “in
the first instance whether reasonable people may differ as to whether the conduct of the
defendant has been ‘sufficiently extreme and outrageous to result in liability.’” See (id.
at 14); Churchey, 759 P.2d at 1350. De novo review of Defendant USOC’s Motion to
Dismiss with respect to Claim 21 is therefore warranted.
The Court begins its de novo review by determining if reasonable persons could
differ on whether Defendant USOC’s alleged conduct was outrageous. See Han Ye
Lee, 222 P.2d at 963. “In determining whether a plaintiff has alleged behavior that is
outrageous as a matter of law, the trial court must analyze the totality of the defendant’s
conduct.” Id. (citing Green v. Qwest Servs. Corp., 155 P.3d 383, 385 (Colo. App.
2006)). The Court concludes that Plaintiffs’ sole allegation in Claim 21 regarding
Defendant USOC, that it “support[ed] and clothe[d]” the Lopez defendants “with the
legitimacy and authority of Team USA” despite knowing of “their decades-long patter of
serial sexual predation,” is not sufficiently outrageous as a matter of law. It is too simple
and vague to plausibly allege conduct by Defendant USOC that went “beyond all
possible bounds of decency” and that could be regarded as “utterly intolerable in a
civilized community.” See Coors Brewing Co., 978 P.2d at 666. Plaintiffs implicitly
concede that their allegations of outrageous conduct by Defendant USOC are scant,
stating in their Response to Defendant USOC’s Objection that “[d]iscovery will reveal
the merits of the claim.” (Doc. # 231 at 30.) In light of the Court’s conclusion that
Plaintiffs fail to allege Defendant USOC’s outrageousness as a matter of law, the Court
dismisses Claim 21 in its entirety. See Coors Brewing Co., 978 P.2d at 666 (concluding
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that the conduct the plaintiff alleged was insufficient to state a claim for intentional
infliction of emotional distress by outrageous conduct); Culpepper, 877 P.2d at 883
(affirming the trial court’s conclusion that no reasonable person could have found that
the conduct of the defendants was outrageous).
D.
PLAINTIFFS’ PROPOSED CLASSES
Plaintiffs bring this action individually and on behalf of two proposed nationwide
classes, the “Injunction Class” and the “Damages Class,” as the Court described in
Section I(B) above. (Doc. # 68 at 134–37.) Plaintiffs define their Injunction Class,
asserted under Rule 23(b)(2), as:
All USOC-governed female athletes (subject to the USOC’s “commercial
terms” page or any other contract).
(Id. at 134.) They define the Damages Class, asserted under Rule 23(b)(3) “and/or”
Rule 23(c)(4), as:
All USOC-governed female athlete (subject to the USOC’s “commercial
terms” page or any other contract and who (1) participated in taekwondo
from 2003 to present and (2) traveled or trained with Jean Lopez, Peter
Lopez, or Steven Lopez.
(Id.)
Defendant USOC, after arguing for the dismissal of all claims pursuant to Rule
12(b)(6), alternatively moved under Rule 12(f) to “strike both putative nationwide
classes as facially overbroad.”13 (Doc. # 108 at 25.) The Injunction Class, it contended,
13
Federal Rule of Civil Procedure 12(f) provides:
The court may strike from a pleading an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter. The court may act:
(1) on its own; or
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improperly encompasses all USOC-governed female athletes, “irrespective of their
sport.” (Id.) The Damages Class “would sweep in untimely claims against [Defendant]
USOC,” it continued, because it includes all females taekwondo athletes governed by
Defendant USOC since 2003. (Id.) And finally, Defendant USOC asserted that neither
the Injunction Class nor the Damages Class “is limited to athletes who suffered an
alleged injury—i.e., athletes who were allegedly abused by the Lopez brothers.” (Id.) It
encouraged this Court to follow other “Courts in this District” that “have stricken alleged
putative classes that, as here, include class members ‘regardless of whether they were
ever injured’ by the alleged conduct.” (Id.) (quoting Edwards v. Zenimax Media Inc.,
2012 WL 4378219, No. 12-cv-00411-WYD-KLM, *5 (D. Colo. Sept. 25, 2012)).
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate Judge Hegarty recommended that Defendant USOC’s Motion to
Strike be denied as to the Injunction Class. (Doc. # 218 at 71.) He rejected Defendant
USOC’s argument that the Injunction Class is overbroad because it includes all USOCgoverned female athletes, not just those who compete in taekwondo; “this purported
defect,” he wrote, “does not warrant striking the allegations.” (Id. at 70.) Magistrate
Judge Hegarty explained that he relied on the Tenth Circuit’s opinion in DG ex rel.
Stricklin v. Devaughn, 594 F.3d 1188, 1194–98 (10th Cir. 2010), “as guidance.”14 (Doc.
(2) on motion made by a party either before responding to the pleading or, if a
response is not allowed, within 21 days after being served with the pleading.
Fed. R. Civ. P. 12(f).
14
In Devaughn, the plaintiffs:
[S]ought certification of a class of all children who are or will be in the legal custody
of [the Oklahoma Department of Human Services (“OKDHS”)] due to a report or
suspicion of abuse or neglect or who are or will be adjudicated deprived due to
abuse or neglect—approximately 10,000 children. Named Plaintiffs allege[d]
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# 218 at 69–70.) He observed that class members of the Injunction Class “are athletes
who sought to compete for Team USA, and they allege [Defendant] USOC subjected
them to an unreasonable risk of harm by coaches or athletes within the system.” (Id. at
70.) “In accord with Devaughn,” the Magistrate Judge found that the allegations
concerning the Injunction Class “are appropriate.” (Id. at 70–71.)
However, Magistrate Judge Hegarty recommended that the Court strike Plaintiffs’
proposed Damages Class as overly broad because the Damages Class is not limited to
athletes who allegedly suffered an injury. (Id. at 67–69.) He was persuaded by
Edwards, 2012 WL 4378212 at *1–6, in which the Court granted the defendant’s motion
to strike the plaintiff’s proposed class, defined as “all persons or entities residing in the
State of Colorado who had purchased any version of the . . . video game,” which
contained an animation defect. (Doc. # 218 at 67–68.) The Edwards Court agreed with
OKDHS's agency-wide foster care policies and practices expose all class
members to an impermissible risk of harm, violating their Fourteenth Amendment
right to substantive due process, their Fifth and Fourteenth Amendment rights to
procedural due process, and their liberty and privacy interests guaranteed by the
First, Ninth and Fourteenth Amendments.
DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1192–93 (10th Cir. 2010). The defendants
argued that the proposed class definition was “overly broad” because “it include[d] children who
are not under an actual or imminent threat of harm, thereby defeating commonality.” Id. at
1195. On appeal, the Tenth Circuit affirmed the district court’s finding of commonality pursuant
to Rule 23(a) because the plaintiffs “presented more than conclusory statements that OKDHS’s
agency-wide monitoring policies and practices, or lack thereof, create a risk of harm shared by
the entire class.” Id. at 1196. It explained:
All class members, by virtue of being in OKDHS's foster care, are subject to the
purportedly faulty monitoring policies of OKDHS, regardless of their individual
differences; therefore, all members of the class are allegedly exposed to the same
unreasonable risk of harm as a result of Defendants' unlawful practices. Though
each class member may not have actually suffered abuse, neglect, or the risk of
such harm, Defendants' conduct allegedly poses a risk of impermissible harm to
all children in OKDHS custody.
Id.
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the defendant that the proposed class was overbroad because it included members that
never experienced the defect and members that sustained no injury, explaining:
I find that this definition is inadequate because it is overbroad and includes
Colorado residents who presumably purchased [the video game] from
anyone, anywhere, at any time regardless of whether he or she was ever
injured by or even experienced the alleged Defect.
2012 WL 4378212 at *5 (emphasis added). Magistrate Judge Hegarty observed that
“[t]his is the precise basis on which [Defendant] USOC relies for its arguments that
Plaintiffs’ allegations [about the Damages Class] should be stricken here, and other
courts have arrived at the same conclusion.” (Doc. # 218 at 68) (citing, e.g., Tietsworth
v. Sears, 720 F. Supp. 2d 1123 (N.D. Cal. 2010)).
With respect to Plaintiffs’ argument that it was “premature to conclude that
members of the alleged [Damages Class] have not experienced any injury” because
such an determination “requires factual assessments that can’t be made at the 12(b)(6)
stage” (Doc. # 139 at 63–64), Magistrate Judge Hegarty noted that Defendant USOC’s
request to strike the class action allegations was brought pursuant to Rule 12(f), not
Rule 12(b)(6) (Doc. # 218 at 69). Edwards, he stated, “demonstrates that it is proper for
a court to strike class allegations when the proposed class definition is overbroad.” (Id.)
For these reasons, he recommended that Defendant USOC’s Motion to Strike be
granted as to the Damages Class. (Id.)
b.
Objections to the Recommendation and the Court’s Review
No party objects to Magistrate Judge Hegarty’s conclusion that the Injunction
Class is not overbroad and should not be stricken at this stage. Seeing no clear error in
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this portion of the Recommendation, the Court denies Defendant USOC’s request to
strike Plaintiffs’ proposed Injunction Class.
As to the Damages Class however, Plaintiffs object to the Recommendation.
(Doc. # 227 at 23.) They take issue with it to the extent that Magistrate Judge Hegarty
“did not allow [them] the opportunity to replead to cure the statute of limitations defect
he identified, despite pointing out in footnote 6 that the authorities he relied upon
allowed an amendment.” (Id.); see (Doc. # 218 at 60 n.6). Plaintiffs request that they
“be permitted to reform the class definition because they can easily cure the technical
defect on the limitations period by shortening the class period.” (Doc. # 227 at 23.)
The Court denies Plaintiffs’ request and affirms Magistrate Judge Hegarty’s
analysis of the overbreadth of the proposed Damages Class. Plaintiffs do not challenge
the merits of Magistrate Judge Hegarty’s assessment. See (id.) And their request to
“reform the class definition,” as Defendant USOC states, “disregard[s] the broader
problem identified by [Defendant] USOC and acknowledged in the Recommendation:
the alleged [D]amages [C]lass includes putative class members who were not
damaged, whether within or without the limitations period.” (Doc. # 232 at 8.)
Shortening the class period would not fix that fundamental deficiency in their class
allegation. The Court therefore strikes Plaintiffs’ proposed Damages Class pursuant to
Rule 12(f).
IV.
CONCLUSION
For the foregoing reasons, the Court ORDERS:
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1. The March 6, 2019 Recommendation of United States Magistrate Judge Michael
E. Hegarty (Doc. # 218) is AFFIRMED AND ADOPTED IN PART and
REJECTED IN PART;
2. The Lopez Defendants’ Motion to Dismiss (Doc. # 106) is GRANTED IN PART
and DENIED IN PART;
3. Defendant USOC’s Motion to Dismiss and Motion to Strike Class Action
Allegations (Doc. # 108) is GRANTED IN PART and DENIED IN PART;
4. Defendant USAT’s Motion to Dismiss (Doc. # 109) is GRANTED IN PART and
DENIED IN PART;
5. The following claims are DISMISSED:
a. Claim 14: All Plaintiffs’ claim of obstruction, attempted obstruction, and
interference with enforcement, in violation of 18 U.S.C. §§ 1590(b),
1591(d), 1595(a), and 2255, against Defendant USOC;
b. Claim 15: All Plaintiffs’ claim of violation of RICO, 18 U.S.C. § 1962(d),
against all Defendants;
c. Claim 16: All Plaintiffs’ claim of negligent supervision against the
Institutional Defendants;
d. Claim 17: All Plaintiffs’ claim of negligent retention against the Institutional
Defendants;
e. Claim 19: All Plaintiffs’ claim of negligence against the Institutional
Defendants and SafeSport;
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f. Claim 20: All Plaintiffs’ claim of gross negligence against the Institutional
Defendants and SafeSport; and
g. Claim 21: All Plaintiffs’ claim of outrageous conduct against Defendant
USOC and SafeSport.
6. Plaintiffs’ proposed Damages Class is STRICKEN;
7. Defendant Jean Edwards is DISMISSED WITH PREJUDICE from this action;
8. The following claims survive Defendants’ Motions to Dismiss, to the extent that
the alleged conduct took place within the applicable statute of limitations, as
described above:
a. Claim 1: Plaintiff Meloon’s claim of forced labor, in violation of 18 U.S.C.
§§ 1589(a), 1595(a), and 2255, against Defendant Steven Lopez;
b. Claim 4: Plaintiff Joslin’s claim of forced labor, in violation of 18 U.S.C.
§§ 1589(b) and 1595(a), against Defendant USAT;
c. Claim 5: Plaintiff Joslin’s claim of trafficking with respect to forced labor, in
violation of 18 U.S.C. §§ 1590(a) and 1595(a), against Defendant Steven
Lopez and Defendant USAT;
d. Claim 8: Plaintiff Means’s claim of forced labor, in violation of 18 U.S.C.
§§ 1589(a), 1595(a), and 2255, against Defendant Steven Lopez;
e. Claim 9: Plaintiff Means’s claim of forced labor, in violation of 18 U.S.C.
§§ 1589(b) and 1595(a), against the Institutional Defendants;
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f. Claim 10: Plaintiff Means’s claim of trafficking with respect to forced labor,
in violation of 18 U.S.C. §§ 1590(a), 1595(a), and 2255, against Defendant
Steven Lopez;
g. Claim 13: Plaintiff Means’s claim of sexual exploitation, transportation, and
illegal sexual activity, in violation of 18 U.S.C. §§ 2242, 2421, 2422,
2423(a)–(c), and 2255, against Defendant Steven Lopez;
h. Claim 14: All Plaintiffs’ claim of obstruction, attempted obstruction, and
interference with enforcement, in violation of 18 U.S.C. §§ 1590(b),
1591(d), 1595(a), and 2255, against Defendant USAT.
DATED: September 27, 2019
BY THE COURT:
_______________________________
CHRISTINE M. ARGUELLO
United States District Judge
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