Equal Employment Opportunity Commission v. Signal International, LLC

Filing 251

ORDER AND REASONS granting 184 Motion to Dismiss for Failure to State a Claim. Signed by Judge Susie Morgan on 9/26/13. (cbn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
KURIAN DAVID, et al.,
Plaintiffs

CIVIL ACTION

VERSUS

No. 08-1220

SIGNAL INTERNATIONAL, LLC, et al.,
Defendants

SECTION “E”

Related Case:
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff

CIVIL ACTION

VERSUS

No. 12-557

SIGNAL INTERNATIONAL, LLC, et al.,
Defendants

SECTION “E”

Applies to: Equal Employment Opportunity Commission v. Signal
International (Civil Action No. 12-557) (“EEOC”)

ORDER AND REASONS
Before the Court is defendant Signal International, LLC's ("Signal") “Partial Motion
for Dismissal for Failure to State a Claim Upon Which Relief Can Be Granted.”1 PlaintiffsIntervenors ("the Intervenors") oppose Signal's motion.2 Signal also has filed a reply in
further support of its motion to dismiss.3 For the following reasons, the motion is
GRANTED.

1

R. Doc. 184.

2

R. Doc. 188.

3

R. Doc. 191.
1

BACKGROUND
The Equal Employment Opportunity Commission (the "EEOC") filed a complaint
against Signal for various violations of Title VII of the Civil Rights Act of 1964 ("Title VII").4
The Intervenors, a group of Signal's former employees, filed a complaint in intervention,
seeking prospective relief under 42 U.S.C. § 2000e-5(g) and compensatory damages for
pecuniary and non-pecuniary losses.5 The Intervenors also included a claim against Signal
for recruitment fees (the "Recruitment Claim") they paid to Michael Pol, d/b/a Global
Resources, Inc. ("Pol"), Malvern C. Burnett d/b/a Gulf Coast Immigration Law Center, LLC
("Burnett"), and Sachin Dewan d/b/a Dewan Consultants Pvt. Ltd ("Dewan") (Pol, Burnett,
and Dewan collectively referred to as the "Recruiters").6 The Intervenors' amended
complaint added nine (9) additional plaintiff-intervenors in their action against Signal but
included the same prayer for recruitment fees as the original complaint. 7
The Intervenors seek recovery of the recruitment fees they incurred because of
Signal's discriminatory practices in violation of Title VII which they say are recoverable
under 42 U.S.C. § 1981a(a)(1). Signal moves to dismiss the Intervenors' Recruitment Claim
arguing that (1) 42 U.S.C. § 1981a(a)(1) does not provide judicial relief for the Recruitment
Claim; (2) Intervenors failed to exhaust their administrative remedies with regards to the

4

R. Doc. 1.

5

R. Doc. 45. Although the Intervenors' complaint does not explicitly address the statute, the only
avenue available for the Intervenors to recover these damages for employment discrimination under Title
VII is through 42 U.S.C. § 1981a.
6

R. Doc. 45.

7

R. Doc. 179
2

Recruitment Claim; and (3) Title VII does not apply extraterritorially.8
ANALYSIS
I. Waiver and Timeliness of Signal's 12(b)(6) Motion to Dismiss
Initially, the Intervenors argue Signal's 12(b)(6) motion is untimely because Signal
failed to raise this defense in response to the Intervenor's original complaint. They argue
the grounds for Signal's 12(b)(6) motion existed in the original complaint and Signal's
ability to bring the motion was not "revived" merely because the Intervenors filed an
amended complaint. See In re Morrison, 421 B.R. 381, 386 (Bankr. S.D. Tex. 2009). The
Intervenors argue that the amended complaint did not create a new basis for their 12(b)(6)
motion, therefore Signal should have raised the defense in a motion to dismiss the original
complaint. Id.
It is true that under Federal Rule of Civil Procedure Rule 12(b) a defendant asserting
a 12(b) defense must do so before filing an answer. See Russell v. Choicepoint Servs. Inc.,
302 F.Supp. 2d 654 (E.D. La. 2003). But Signal responds that its 12(b)(6) motion to dismiss
targets the Intervenor's First Amended Complaint, a pleading that Signal has not yet
answered.9
The Court need not decide whether the filing of the amended complaint provided
another opportunity for Signal to file a 12(b)(6) motion because, even if PlaintiffsIntervenors amended complaint did not create a new basis for Signal to lodge its 12(b)(6)
motion, Signal's ability to raise failure to state a claim as a defense has not been lost.
Federal Rule of Civil Procedure 12(h)(2) allows a party to raise the defense of failure to state

8

9

R. Doc. 184.

R. Doc. 184-1, p. 1.
3

a claim by a motion for judgment on the pleadings under Rule 12(c). FED. R. CIV. P.
12(h)(2). A Rule 12(c) motion for judgment on the pleadings may be made after an answer
has been filed. FED. R. CIV. P. 12(c). If Signal's 12(b)(6) motion was waived because it was
not filed in response to Intervenors' original complaint, the Court may nevertheless treat
the motion as a 12(c) motion for judgment on the pleadings for failure to state a claim for
which relief may be granted. See Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999).
II. Standard of Law
Whether Signal's motion is treated as a Rule 12(b)(6) motion to dismiss or as a Rule
12(c) motion for judgment on the pleadings does not change the legal standard the Court
must apply. The standard for dismissal under Rule 12(c) is the same as that for dismissal
for failure to state a claim under Rule 12(b)(6). Johnson v. Johnson, 385 F.3d 503, 528 (5th
Cir. 2004). Pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court may
dismiss a complaint, or any part of it, for failure to state a claim upon which relief may be
granted if the plaintiff has not set forth factual allegations in support of his claim that would
entitle him to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Cuvillier v.
Taylor, 503 F.3d 397, 401 (5th Cir. 2007). As the Fifth Circuit explained in Gonzales v.
Kay:
"Factual allegations must be enough to raise a right to relief above the
speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127
S.Ct. 1955, 167 L. Ed. 2d 929 (2007). The Supreme Court recently
expounded upon the Twombly standard, explaining that "[t]o 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, 128 S.Ct. 1937, 1949, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct.
1955, 167 L.Ed.2d 929). "A Claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct
4

alleged." Id. It follows that "where the well-pleaded facts do not permit
the court to infer more than the mere possibility of misconduct, the
complaint has alleged - but it has not 'show[n]' - that the pleader is
entitled to relief." Id. at 1950 (quoting Fed. R. Civ. P. 8(a)(2)).
577 F.3d 600, 603 (5th Cir. 2009).
The Court cannot look beyond the factual allegations in the pleadings to determine
whether relief should be granted. See Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.
1999); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). In assessing the Intervenors'
complaint, the Court must accept all well-pleaded facts as true and liberally construe all
factual allegations in the light most favorable to the Intervenors. Spivey, 197 F.3d at 774;
Lowrey v. Tex A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997). "Dismissal is appropriate
when the complaint 'on its face show[s] a bar to relief." Cutrer v. McMillan, 308 F. App'x
819, 820 (5th Cir. 2009) (per curiam) (unpublished) (quoting Clark v. Amoco Prod. Co.,
794 F.2d 967, 970 (5th Cir. 1986)). A court may grant a motion for judgment on the
pleadings when no genuine issues of material fact remain and the case can be decided as
a matter of law. Erickson v. Pardus, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007).
III. Extraterritorial Application of Title VII
Signal moves to dismiss the Intervenors' Recuitment Claim because Title VII does
not apply extraterritorially.10 Intervenors in response argue that the extraterriorial
application of Title VII is not required because the Intervenors worked at Signal's facilities
in the United States.11 Signal concedes, and this Court agrees, that the Intervenors' other
Title VII claims based on conditions within the United States present no extraterritoriality

10

R. Doc. 184, p. 8.

11

R. Doc.
5

issues.12 On the other hand, the alleged discriminatory conduct in connection with the
Recruitment Claim relates to events outside of the United States before the Intervenors
began work at Signal's facilities.
The Court must acknowledge the "longstanding principle of American law 'that
legislation of Congress, unless contrary intent appears, is meant to apply only within the
territorial jurisdiction of the United States." EEOC v. Arabian American Oil Co., 499 U.S.
244, 248 (1991) (quoting Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285 (1949)). This
important principle "serves to protect against unintended clashes between our laws and
those of other nations which could result in international discord." Id. Thus, the
presumption against extraterritorial application of a federal statute can be overcome only
if there is an "affirmative intention of the Congress clearly expressed." Id. (quoting Benz v.
Compania Naviera Hidalgo, S.A., 353 U.S. 138, 147 (1957)). Because this determination
is "a matter of statutory construction," Arabian, 499 U.S. at 248, the Court begins with the
text of Title VII.
Section 2000e(f) of Title VII provides that "with respect to employment in a foreign
country, such term [employee] includes an individual who is a citizen of the United States."
42 U.S.C. § 2000e(f). Further, section 2000e-1(a) states that Title VII "shall not apply to
an employer with respect to the employment of aliens outside any State." 42 U.S.C. §
2000e-1(a); See Iwata v. Stryker Corp., 59 F.Supp. 2d 600, 603 (N.D. Tex. 1999). Read
together, the two statutes show Congress' intention to exclude non-citizens located outside
of the United States from the protection of Title VII. See id. at 604. However, non-citizens
are covered by the statute if they are working in the United States. See Espinoza v. Farah
12

R. Doc. 184, p. 10.
6

Mfg. Co., 414 U.S. 86, 95 (1973).
In the case before the Court, it is undisputed that the Intervenors paid all
recruitment fees prior to their arrival in the United States. Signal's alleged discriminatory
acts, requiring the Intervenors to pay higher recruitment fees than other non-Indian
workers, occurred before the Intervenors came to the United States.13 Under a plain reading
of section 2000e(f) and section 2000e-1(a), the Intervenors were not covered by Title VII
when they paid the recruitment fees because they were non-citizens and they were not
working within the United States at the time. "It is clear from the plain language of 42
U.S.C. § 2000e(f) and 42 U.S.C. § 2000e-1(a) that Congress intentionally excluded
individuals such as Plaintiffs from the protections of Title VII." Iwata v. Stryker Corp., 59
F. Supp. 2d 600, 604 (N.D. Tex. 1999). Further, based on the language of Title VII, there
is no "affirmative intention of Congress clearly expressed" to cover the recruitment fees that
defeats the presumption against extraterritorial application of the statute. EEOC v. Arabian
American Oil Co., 499 U.S. 244, 248 (quoting Benz v. Compania Naviera Hidalgo, S.A.,
353 U.S. 138, 147 (1957)).
The Intervenors argue that an analysis of Title VII's extraterritorial application is not
required because the Intervenors eventually worked in the United States.14 The Intervenors
urge that they were employed within the United States under both of the tests courts apply
to determine the location of an individual's employment. Gomez v. Honeywell Int'l, Inc.,
510 F. Supp. 2d 417, 421-24 (W. D. Tex. 2007) (explaining the "center of gravity" test and

13

R.Doc. 179. The Court notes that four of the twelve Intervenors paid recruitment fees prior to
Signal's involvement in seeking foreign employees to work at its facilities to work in the United States.
14

R. Doc. 188
7

the "primary work station test" used to determine whether the plaintiff-employee was
employed in the United States); Shekoyan v. Sibley Int'l Corp., 217 F. Supp. 2d 59, 68
(D.D.C. 2002). Regardless of which test Intervenors urge the Court to apply, their argument
misses the mark. The Intervenors cannot recover under Title VII for their Recruitment
Claim because of when the claims arose, not where the Intervenors eventually worked. The
Court notes that the Intervenors may have valid claims against Signal for acts occurring in
the United States after the Intervenors arrived. However, the Recruitment Claim is based
on events before the Intervenors arrived in the United States, for acts occurring beyond this
country's borders and the reach of Title VII.
The most illustrative case involving a discrimination claim based on events prior to
the plaintiff-employee's arrival to the United States is Reyes-Gaona v. N.C. Growers Ass'n,
250 F.3d 861 (4th Cir. 2001). In Reyes, the plaintiff sued an American corporation for
violations under the Age Discrimination in Employment Act (ADEA). Id. Although Reyes
does not involve a suit under Title VII, the ADEA has almost identical provisions regarding
the application of the statute to non-citizens abroad.15 The plaintiff, a Mexican resident,
applied for a job in North Carolina. Id. at 865. However, the entire application process
occurred in Mexico and the plaintiff's claim was based on events in Mexico. Id. at 863. The
Fourth Circuit held that the plaintiff was not entitled to bring a suit under the ADEA simply
because the future place of employment was located within the United States. Id. at 866.
The court found that the plaintiff was a non-citizen who was not employed within the
United States, which prevented her from having a claim under the ADEA. Id.

15

Title VII and the ADEA's "provisions defining 'employee' and outlining foreign employment are
virtually identical." Iwata, 59 F.Supp. 2d at 604.
8

Similarly, the Intervenors were not citizens and they were not employed in the
United States when their Recruitment Claim arose. A plain reading of the text of the statute
compels the conclusion that the Intervenors' Recruitment Claim is not viable under Title
VII, and therefore compensatory damages cannot be recovered on this claim under § 1981a.
IV. Exhaustion of Remedies
The Court need not reach the issue raised in Signal's motion regarding exhaustion
of remedies. Regardless of whether the Intervenors properly exhausted their administrative
remedies regarding the Recruitment Claim, the claim for recruitment fees must be
dismissed for the reasons stated above.
The Court also notes that when deciding motions to dismiss under Federal Rule of
Civil Procedure 12(c), it must limit its analysis to the facts alleged in the pleadings. See
Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). In its motion,
Signal attached several exhibits to support its arguments surrounding the exhaustion of
administrative remedies.16 When a court considers information outside the pleadings, a
motion to dismiss is converted into a motion for summary judgment under Federal Rule
of Civil Procedure 56. See Clark v. Tarrant Cnty., Tex., 798 F.2d 736, 745 (5th Cir. 1986).
In deciding the present motion, the Court did not consider any matters outside of the
pleadings. All of the attached exhibits related to Signal's arguments concerning the
Intervenors' failure to exhaust administrative remedies, an issue the Court does not
address. Therefore, Signal's motion is not treated as a motion for summary judgment.
CONCLUSION
Signal's motion to dismiss is timely and Signal's defense of failure to state a claim
16

R. Doc. 184. Signal attached Exhibit "A", "B", "C" and "D" to its motion to dismiss.
9

for which relief can be granted is not waived. The Intervenor's Recruitment Claim for
compensatory damages under §1981a(a)(1) is not recoverable under Title VII. At the time
the basis for the Intervenor's claim arose, the Intervenors were not "employees" as defined
by Title VII because they were aliens outside the United States. Accordingly, Signal's motion
to dismiss the Recruitment Claim is GRANTED.
New Orleans, Louisiana, this 26th day of September, 2013.
___
_____________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

Court to Notify:
Magistrate Judge Daniel E. Knowles

10