Shibeshi v. Alice Lloyd College
Filing
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MEMORANDUM OPINION & ORDER: the Colleges motion to dismiss, R. 9 , isGRANTED. The claims asserted against the College are DISMISSED WITH PREJUDICE. This case is STRICKEN from the Courts active docket and all otherpending motions are DENIED as moot. Signed by Judge Amul R. Thapar on 10/19/11.(MJY)cc: COR, Shewaferaw S. Shibeshi via US Mail
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION
PIKEVILLE
SHEWAFERAW S. SHIBESHI,
Plaintiff,
v.
ALICE LLOYD COLLEGE,
Defendant.
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Civil Action No. 11-101-ART
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MEMORANDUM OPINION &
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ORDER
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If you try to open a door with the wrong key, cleaning and polishing that key will not
somehow make it work. Yet that is what plaintiff Shewaferaw S. Shibeshi is trying to do. In
his initial complaint, Shibeshi attempted to open the courthouse door by alleging that
defendant Alice Lloyd College (“College”) violated federal law. Recognizing that federal
law claims might not be available to him because of his failure to exhaust his administrative
remedies, Shibeshi attempted to polish or restate these claims as state law claims.
Unfortunately for Shibeshi, the outcome does not change no matter how the claims are
dressed up. Shibeshi simply does not have a cause of action against the College; his
complaint must be dismissed.
BACKGROUND
Beginning August 1, 2006, the College employed Shibeshi, an Ethiopian national, as
an assistant professor of physics on an H-1B employment visa. R. 7 at 1. This visa allows
employers to temporarily hire non-citizens for “specialty occupations,” including college
professorships. 8 U.S.C. § 1101(a)(15)(H)(i)(b). To obtain the visa, the College first filed a
Labor Condition Application (“LCA”) with the Department of Labor (“Department”). R. 3-1
at 4. In the LCA, the College attested that it would pay Shibeshi the higher of (1) the actual
wage paid by the College to similar employees or (2) the prevailing wage. Id. Wage
attestation is a key element of the LCA in order to prevent employers from simply hiring
foreign workers at a lower wage to the detriment of the local workforce. See 20 C.F.R.
655.732. The College listed Shibeshi’s annual wage rate as $31,599 and the prevailing wage
as $23,460. R. 8-2 at 3. The Department certified the LCA, R. 3-3 at 1, and United States
Citizenship and Immigration Services approved the H-1B visa. R. 3-4 at 1.
On July 31, 2009, the visa and Shibeshi’s employment ended. R. 3-4 at 1. During his
nearly three years of employment, Shibeshi’s average annual salary was $32,448, R. 1 at 1, a
slightly higher rate than what the College submitted in the LCA.
But on March 16, 2011, Shibeshi sent the College a demand letter seeking additional
compensation. Shibeshi claimed the College submitted a lower prevailing wage than it
should have in the LCA and therefore underpaid him. R. 7 at 2. The College declined the
demand. Id.
In June 2011, Shibeshi filed this claim against the College alleging underpayment of
wages, among other causes of action, in violation of the Immigration and Nationality Act
(“INA”). R. 1. The College filed a 12(b)(6) motion to dismiss the complaint for failure to
state a claim. R. 3. Shibeshi responded to the motion but also filed an amended complaint,
attempting to cure the alleged defects by converting all of his federal law claims into state
law claims. R. 7. The College then filed a second 12(b)(6) motion to dismiss the amended
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complaint, R. 9, to which Shibeshi responded, R. 11, and the College replied, R. 12. Those
motions are now before the Court.
DISCUSSION
The Court can dismiss a complaint for “failure to state a claim upon which relief can
be granted.” Fed. R. Civ. P. 12(b)(6). The Court must consider the allegations in Shibeshi’s
complaint as true and construe the complaint liberally in favor of Shibeshi. Bowman v.
United States, 564 F.3d 765, 769 (6th Cir. 2008) (citing Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007)). But in order to survive the motion to dismiss, Shibeshi’s complaint
must “contain sufficient factual matter . . . to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).
Shibeshi presents five causes of action in his amended complaint. R. 7 at 4–7. He
asserts that all five of these claims are based on alleged violations of state law, but in reality
the first two are based on alleged violations of the INA. The remaining three allege state law
violations. Accordingly, the following analysis is divided between Shibeshi’s federal and
state claims. No matter which way you slice his claims, however, they fail to state a cause of
action.
I. Shibeshi’s INA Claims Are Not Exhausted
Shibeshi’s federal claims fail because he has not exhausted available administrative
procedures. As stated above and explained below, there is no real difference between
Shibeshi’s first complaint and amended complaint regarding alleged violations of the INA.
In his initial complaint, Shibeshi provided two causes of action based on alleged
violations of the INA: (1) the College violated 8 U.S.C. § 1182(n)(1)(A)(i) by not paying
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Shibeshi the prevailing wage, and (2) the College violated 8 U.S.C. § 1182(n)(2)(C)(vii) by
not paying Shibeshi during the summer months when the College chose not to offer summer
courses. R. 1 at 4. But § 1182(n)(2) and related federal regulations provide administrative
procedures to challenge alleged § 1182(n) violations. Shibeshi should have filed a complaint
with the Wage and Hour Division of the Department of Labor, which reviews and
investigates these complaints and then issues a determination. See 8 U.S.C. § 1182(n)(2); 20
C.F.R. §§ 655.805, 655.815. If Shibeshi was dissatisfied with this determination, he could
have requested a hearing and decision by an administrative law judge.
20 C.F.R. §§
655.815(c), 655.820, 655.840. Thereafter, Shibeshi could have petitioned for review by the
Secretary of Labor. 20 C.F.R. §§ 655.840(a), 655.845. Only after the Secretary’s decision
could Shibeshi have requested judicial review from a United States District Court. 20 C.F.R
§ 655.850.
But Shibeshi did not take these administrative steps. He simply sent a letter to the
College alleging underpayment and demanding compensation, and then filed this complaint
after the College refused his demands. Without Shibeshi’s exhaustion of the available
administrative procedures, the Court cannot hear these causes of action. See Venkatraman v.
REI Sys., Inc., 417 F.3d 418, 422-23 (4th Cir. 2005); Shah v. Wilco Sys., 126 F. Supp. 2d
641, 647-48 (S.D.N.Y. 2000).
Further, even if Shibeshi did engage the administrative process, complaints must be
filed “not later than 12 months” after an alleged violation. § 1182(n)(2)(A). And Shibeshi
did not file this complaint until nearly two years after his employment ended.
Thus,
Shibeshi’s claims are also time-barred. See Ndiaye v. CVS Pharmacy 6081, 547 F. Supp. 2d
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807, 812 (S.D. Ohio 2008) (finding that a plaintiff stated a valid claim of a § 1182(n)(2)
violation, but dismissing the complaint because the plaintiff filed her claim almost two years
after the end of her employment).
In his amended complaint, Shibeshi attempted to revise his causes of action to avoid
the exhaustion requirement. Instead of alleging INA violations, Shibeshi alleged that the
College breached an employment contract. R. 7 at 4. So why is there no real difference
between Shibeshi’s initial federal claims and the state law claims in his amended complaint?
Because Shibeshi has not stated an independent state law cause of action, but merely restyled
his federal claims. Shibeshi might have been able to maintain an independent cause of action
that partially relied on violations of § 1182(n). For example, in Goel v. Patni Computer
Systems, Inc., 2008 WL 4185691, at *7 (C.D. Ill. Sept. 8, 2008), the court determined that the
plaintiff could not pursue claims of § 1182(n) violations, but could pursue common law
claims based on “false promises” an employer allegedly made in an LCA.
The court
reasoned that federal administrative procedures were simply alternative remedies and did not
bar independent state claims. Id. Thus, the plaintiff could use the LCA as evidence of his
employer’s representations in support of his common law claims. Id.
The problem here is that Shibeshi is not really raising a “breach of contract” claim.
First, the contract with the College clearly states Shibeshi’s annual wage as $31,599, R. 3-5
at 1, and Shibeshi admits he received these wages. R. 7 at 2. So far, no breach. Shibeshi
attempts to get around this by claiming that the College breached its duty to pay him a
prevailing wage. R. 7 at 4. But this is not based on the contract. Rather, this creative
argument is premised on alleged violations of the INA. In essence, Shibeshi is suing to
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enforce the College’s obligations under the INA. Rather than use the LCA as evidence in
support of a common law claim, Shibeshi is attacking the LCA as if it is an employment
contract and relying on the duties imposed by federal statute to state a cause of action. These
restyled claims are no different than what Shibeshi alleged in his first complaint, and they are
plainly governed by federal statute and regulations. See 20 C.F.R. § 655.800 (prescribing
rules for the enforcement of H-1B labor condition applications and H-1B1 and E-3 Labor
Attestations). If the Court allowed plaintiffs to simply restyle their complaints to avoid
exhaustion, it would nullify the INA.
Thus, under either complaint, Shibeshi cannot
maintain these claims because he has not exhausted available administrative procedures.
II. State Law Claims Fail to State a Cause of Action
The three remaining claims in Shibeshi’s amended complaint allege state law
violations, but these also fail to state a cause of action.
A. No Cause of Action for Breach of a Fiduciary Duty
First, Shibeshi claims that the College owed him a fiduciary duty because it petitioned
for an H-1B visa on his behalf and breached that duty. R. 7 at 5. A fiduciary relationship is
one which “necessarily involves an undertaking in which a duty is created in one person to
act primarily for another’s benefit in matters connected with such undertaking.” Steelvest
Inc. v. Scansteel Serv. Ctr, Inc., 807 S.W.2d 476, 485 (Ky.1991). An ordinary business
relationship or an agreement reached through arm’s length transactions “cannot be turned
into a fiduciary one absent factors of mutual knowledge of confidentiality or the undue
exercise of power or influence.” Anchor v. O'Toole, 94 F.3d 1014, 1024 (6th Cir. 1996).
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Shibeshi has simply presented nothing—either in his complaint or otherwise—to establish
that a fiduciary duty was created. See Steelvest Inc., 807 S.W.2d at 485.
First, Shibeshi cites no authority for the proposition that sponsorship for an H-1B visa
creates a fiduciary relationship. Indeed, the authority says otherwise. See Patel v. Boghra,
2008 WL 2477695, at *6 (N.D. Ill. June 18, 2008) (holding that there is no fiduciary duty for
H-1B visa sponsors under Illinois law); Rao v. Covansys Corp., 2007 WL 3232429, at *3
(N.D. Ill. Nov. 1, 2007) (same). Usually, the duty goes from employee to employer, and
Kentucky decisions reflect this reality. See e.g., Steelvest Inc., 807 S.W.2d at 485 (holding
that an employee owes a duty of loyalty to his employer); Davis v. Davis, 343 S.W.3d 610,
618 (Ky. App. 2011) (same). The lone Kentucky decision discussing an employer’s duty to
an employee found that there was no fiduciary duty because the employee failed to provide
enough evidence of a special relationship. See Dauley v. Hops of Bowling Green, LTD.,
2003 WL 1340013, at *1 (Ky. App. Feb. 21, 2003).
Second, Shibeshi’s allegations establish this was an arm’s-length transaction. When
the College obtained a work visa for Shibeshi, the College was furthering its own interests.
Otherwise, every time a college obtains a work visa it would owe a fiduciary duty to its
employee. Shibeshi provides no authority for this novel theory. Shibeshi simply makes a
conclusory statement that the College owed him a fiduciary duty. Though the Court is
required to construe the complaint in the light most favorable to Shibeshi, “‘conclusory
allegations or legal conclusions masquerading as factual allegations will not suffice.’”
Watson Carpet & Floor Covering, Inc. v. Mohawk Indus., Inc., 648 F.3d 452, 457 (6th Cir.
2011) (quoting In re Travel Agent Comm’n Antitrust Litig., 583 F.3d 896, 903 (6th Cir.
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2009)). There simply is no evidence from which the Court can conclude that a fiduciary
relationship existed.
B. No Cause of Action for Negligent Infliction of Emotional Distress
Second, Shibeshi claims that the College depressed his wages and thereby negligently
inflicted emotional distress on him because of the prolonged economic hardship. R. 7 at 6.
But this cause of action is not cognizable. Kentucky imposes an “impact rule” that requires
physical contact in order to claim emotional distress. Deutsch v. Shein, 597 S.W.2d 141,
145-46 (Ky. 1980). The Kentucky Supreme Court reasoned that emotional distress damages
based on anything other than physical contact are “too remote and speculative” as well as
“difficult to disprove.” Id.
Shibeshi attempts to save his claim by asserting that economic hardship can cause
“direct and debilitating” effects on the human body such as malnutrition and other health
care effects. R. 11 at 6-7. But as the Kentucky Supreme Court already pointed out, it is not
enough that physical contact accompany emotional distress; it must be caused by physical
contact. Steel Tech., Inc. v. Congleton, 234 S.W.3d 920, 929 (Ky. 2007). That is, contact
must precede the emotional distress before recovery is permissible. Id. Here Shibeshi does
not allege that the College has made any kind of physical contact with him. The most
generous reading of Shibeshi’s complaint still leaves any alleged physical injury as incidental
to depressed wages and not as the source of emotional distress. Shibeshi cannot maintain
this claim.
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C. No Cause of Action for Punitive Damages
Finally, Shibeshi claims that he is entitled to punitive damages under Kentucky
Revised Statute 411.186. R. 7 at 6-7. But a punitive damages claim is not an independent
cause of action. Rather, certain torts entitle a plaintiff to punitive damages. See Horton v.
Union Light, Heat & Power Co., 690 S.W.2d 382, 389 (Ky. 1985). Here, Shibeshi has no
tort claims left, and as a result, he cannot maintain an action just for punitive damages alone.
See Russell v. Rhodes, 2005 WL 736612, *5 (Ky. App. 2005) (holding that it is proper to
dismiss claims for punitive damages when all underlying tort claims are dismissed). Thus,
Shibeshi has no claims left with which to open the courthouse door.
CONCLUSION
Accordingly, it is ORDERED that the College’s motion to dismiss, R. 9, is
GRANTED.
The claims asserted against the College are DISMISSED WITH
PREJUDICE. This case is STRICKEN from the Court’s active docket and all other
pending motions are DENIED as moot.
This the 19th day of October, 2011.
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