Krishnakutty et al v. Signal International LLC et al

Filing 26

ORDER granting Motion to Change Venue. Consolidated cases are transferred to the US District Court for the Eastern District of Louisiana; and granting Motion to Consolidate Cases. Civil Action Nos. 1:13cv318 and 1:13cv319 shall be consolidated, as member cases, with Civil Action No. 1:13cv222, which shall serve as the lead case. All subsequent pleadings relating to these causes of action should be filed in the LEAD case only. Signed by Chief District Judge Louis Guirola, Jr. on 10/18/13. (RLW)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
ACHARI, ET AL.
v.

PLAINTIFFS
CAUSE NO. 1:13CV222-LG-JMR
Consolidated with:
CAUSE NO. 1:13CV327-HSO-RHW

SIGNAL INT’L, LLC, ET AL.

CHAKKIYATTIL, ET AL.
v.

DEFENDANTS

PLAINTIFFS
CAUSE NO. 1:13CV318-LG-JMR

SIGNAL INT’L, LLC, ET AL.

KRISHNAKUTTY, ET AL
v.

DEFENDANTS

PLAINTIFFS
CAUSE NO. 1:13CV319-LG-JMR

SIGNAL INT’L, LLC, ET AL.

DEFENDANTS

ORDER CONSOLIDATING CASES
AND TRANSFERRING TO THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF LOUISIANA
BEFORE THE COURT are the Motion [33] to Consolidate filed by Signal
International, Inc. and Signal International, LLC (“Signal”) in cause no. 1:13cv222LG-JMR, and the Motions to Transfer filed by Signal in each of the above-captioned
cases (the “Mississippi cases”). The motions are opposed by the plaintiffs. After due

consideration, the Court concludes that consolidation for the purpose of considering
transfer is appropriate, and that the Mississippi cases should be transferred to the
United States District Court for the Eastern District of Louisiana, where a
substantially similar case was first filed and is pending. Accordingly, the motions
to consolidate and transfer will be granted. The Court declines to rule on any
remaining motions, leaving them for determination by the transferee court.
PROCEDURAL HISTORY
Signal seeks consolidation, stay and transfer of four cases to the Eastern
District of Louisiana. The four are this case (“Achari”), Chakkiyattl v. Signal, No.
13cv318-LG-JMR (“Chakkiyattl”), Krishnakutty v. Signal, No. 13cv319-LG-JMR
(“Krishnakutty”), and Devassy v. Signal, 1:13cv327-HSO-RHW (“Devassy”).1 Signal
argues that these cases are closely related to a similar lawsuit filed in the Eastern
District of Louisiana in March 2008, David, et al. v. Signal, et al., No. 2:08-CV1220-JCZ-DEK ("David"). Signal submits that under the "first filed" rule, the four
cases should be transferred so that their issues can be resolved with David.
The Eastern District of Louisiana district judge summarized the David
plaintiffs’ claims as alleging a scheme to lure foreign workers to work for Signal in
Mississippi and Texas with the promise of permanent residence in the United
States. Once in the United States, the David plaintiffs alleged they were subjected
to discrimination and adverse working and living conditions. The plaintiffs allege

1

Devassy was recently consolidated with Achari.
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that the recruitment defendants obtained millions of dollars in fees and Signal
obtained workers for a lesser cost than if it hired American workers. David, Order
& Reasons at 4, Jan. 4, 2012 (denying motion to certify class).
Signal is one of twelve defendants in David.2 The plaintiffs in David are a
number of Indian nationals who were Signal employees. Their Third Amended
Complaint asserts violations of the Racketeer Influenced and Corrupt
Organizations Act (RICO), the Victims of Trafficking and Violence Protection Act
(TVPA), 42 U.S.C. § 1981, 42 U.S.C. § 1985, the Fair Labor Standards Act (FLSA),
and claims of fraud/negligent misrepresentation, and breach of contract. Several
plaintiffs also bring individual claims of retaliation under § 1981 and § 1985, and
claims of false imprisonment, assault, battery, and infliction of emotional distress.
The plaintiffs in these Mississippi cases were previously among the plaintiffs
in the David case who sought to be certified as a class. After class certification was
denied by the Louisiana district court judge, they filed complaints in this Court.

2

The David Defendants are: Signal International L.L.C; Malvern C.

Burnett; Gulf Coast Immigration Law Center, L.L.C.; Law Offices of Malvern C.
Burnett, A.P.C.; Indo-Ameri Soft L.L.C.; Kurella Rao; J & M Associates, Inc. of
Mississippi; Billy R. Wilks; J & M Marine & Industrial, L.L.C.; Global Resources,
Inc.; Michael Pol; Sachin Dewan; and Dewan Consultants Pvt. Ltd. (a/k/a MedTech
Consultants). Signal has also filed claims against a third-party defendant, Zito
Companies, LLC.
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The plaintiffs in Achari are a number of Indian nationals who allege that
Signal, through recruiters, lured them to the United States to work in deplorable,
discriminatory conditions with the promise of permanent U.S. residency. (Am.
Compl. 3-7, ECF No. 26). They assert claims of violation of the TVPA, 42 U.S.C. §
1981, fraudulent misrepresentation, negligent misrepresentation, and breach of
contract.
The plaintiffs in Chakkiyattil are a number of Indian nationals who allege
that Signal, through recruiters, lured them to the United States to work in
deplorable, discriminatory conditions with the promise of permanent U.S.
residency. Chakkiyattil, No. 1:13cv318-LG-JMR, Compl. passim, ECF No. 1. They
assert claims of violation of the TVPA, 42 U.S.C. § 1981, fraudulent
misrepresentation, negligent misrepresentation, and breach of contract. Id. 111121.
The plaintiffs in Krishnakutty are a number of Indian nationals who allege
that Signal, through recruiters, lured them to the United States to work in
deplorable, discriminatory conditions with the promise of permanent U.S.
residency. Krishnakutty, No. 1:13cv319-LG-JMR, Compl. 2, ECF No. 1. They bring
claims against all defendants for violation of the TVPA, RICO, 42 U.S.C. § 1981 &
1985, fraud, negligent misrepresentation, breach of contract, “money had and
received,” breach of special/confidential relationship, and against certain
defendants, breach of fiduciary duty.

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The plaintiffs in Devassy are a number of Indian nationals who allege that
Signal, through recruiters, lured them to the United States to work in deplorable,
discriminatory conditions with the promise of permanent U.S. residency. Devassy,
No. 1:13cv327-HSO-RHW, Compl. 1-2, ECF No. 1. They assert claims of violation of
the TVPA, 42 U.S.C. § 1981, fraudulent misrepresentation, negligent
misrepresentation, and breach of contract.
DISCUSSION
I. Motion to Consolidate
Signal contends that the above cases should be consolidated only for the
purpose of deciding whether the first-filed rule requires the Court to transfer the
cases to the United States District Court for the Eastern District of Louisiana.
Signal argues that the first-filed rule applies equally to all the cases it wishes to
consolidate for the purpose of transfer.
The plaintiffs argue that consolidation will not aid the Court as a matter of
convenience and judicial economy. Plaintiffs contend that even though all four
cases stem from David, they bring different claims against different defendants,
and so individual attention must be given to each case in making the transfer
decision.
The Court has broad discretion in determining whether and to what extent to
consolidate cases. Ctr. for Biological Diversity, Inc. v. BP Am. Prod. Co., 704 F.3d
413, 432 (5th Cir. 2013) (“The trial court’s managerial power is especially strong
and flexible in matters of consolidation.”); Mills v. Beech Aircraft Corp., Inc., 886
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F.2d 758, 762 (5th Cir. 1989). The question of whether these cases should be
transferred to the Eastern District of Louisiana pursuant to the first-filed rule will
require analysis of a single body of law in relation to each case. The summary
above of each case shows that there is substantial similarity in the underlying facts
and theories of recovery. The Court finds that considering the cases together will
result in judicial economy. Accordingly, the Motion to Consolidate will be granted.
II. Motion to Stay and Transfer Pursuant to the First-to-File Rule
The "first to file" rule permits a district court to decline jurisdiction over an
action when it involves the same parties and issues as a previously-filed action in
another court. When related cases are pending before two federal courts, the court
in which the case was last filed may dismiss or transfer the case if it involves
substantially similar issues which can be resolved in the earlier-filed action. See W.
Gulf Mar. Ass'n v. ILA Deep Sea Local 24, 751 F.2d 721, 728-29 (5th Cir. 1985) and
Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947, 950 (5th Cir. 1997). “The
concern manifestly is to avoid the waste of duplication, to avoid rulings which may
trench upon the authority of sister courts, and to avoid piecemeal resolution of
issues that call for a uniform result.” W. Gulf Mar. Ass'n, 751 F.2d at 728.
The Court's inquiry is focused on whether the cases "substantially overlap,"
but where the overlap is "less than complete, the judgment is made case by case,
based on such factors as the extent of overlap, the likelihood of conflict, the
comparative advantage and the interest of each forum in resolving the dispute.”
Save Power Ltd., 121 F.3d at 951. The first-to-file rule is a discretionary doctrine.
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Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 603 (5th Cir. 1999) (citing
Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183-84 (1952)). It is not
a rigid or inflexible rule to be mechanically applied. Mann Mfg., Inc. v. Hortex, Inc.,
439 F.2d 403, 407 (5th Cir. 1971). The decision of whether to apply the first-to-file
rule involves determinations concerning "[w]ise judicial administration, giving
regard to conservation of judicial resources and comprehensive disposition of
litigation." Kerotest, 342 U.S. at 183.
In support of its motion, Signal argues that the first to file rule applies
because the issues and parties in the David case completely encompass the issues
and parties in the Mississippi cases. Signal provides a press release by the
Southern Poverty Law Center as evidence that the lawyers for the plaintiffs
acknowledged the substantial overlap of David and the Mississippi cases. (Def.
Memo. Ex. 1, ECF No. 12-1). In response, the plaintiffs argue that 1) there is a
serious question of whether the Louisiana court can exercise personal jurisdiction
over all of the named defendants; 2) there is no overlap of parties because the
plaintiffs in the Mississippi cases are not parties to the David case; and 3) denial of
class certification in David shows that there is no substantial overlap of issues.
In regard to the question of substantial overlap of parties and issues, the
Court finds that both exist here. The fact that the plaintiffs are no longer parties to
the David case does not negate the presence of many defendants in common.3 The

3

Defendants common to David and Achari are Signal International L.L.C;
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Mississippi defendants are merely subsets of the David defendants.

Malvern C. Burnett; Gulf Coast Immigration Law Center, L.L.C.; Law Offices of
Malvern C. Burnett, A.P.C..; Global Resources, Inc.; Michael Pol; Sachin Dewan;
and Dewan Consultants Pvt. Ltd. (a/k/a MedTech Consultants). All of the Achari
defendants are named in David.
Defendants common to David and Chakkiyattil are Signal International
L.L.C; Malvern C. Burnett; Gulf Coast Immigration Law Center, L.L.C.; Law
Offices of Malvern C. Burnett, A.P.C.; J & M Associates, Inc. of Mississippi; Billy R.
Wilks; J & M Marine & Industrial, L.L.C.; Global Resources, Inc.; Sachin Dewan;
and Dewan Consultants Pvt. Ltd. (a/k/a MedTech Consultants). All of the
Chakkiyattil defendants are named in David.
Defendants common to David and Krishnakutty are Signal International
L.L.C; Malvern C. Burnett; Gulf Coast Immigration Law Center, L.L.C.; Law
Offices of Malvern C. Burnett, A.P.C.; Indo-Ameri Soft L.L.C.; Kurella Rao; Global
Resources, Inc.; Sachin Dewan; and Dewan Consultants Pvt. Ltd. (a/k/a MedTech
Consultants). All of the Krishnakutty defendants are named in David.
Defendants common to David and Devassy are Signal International L.L.C;
Malvern C. Burnett; Gulf Coast Immigration Law Center, L.L.C.; Law Offices of
Malvern C. Burnett, A.P.C.; Indo-Ameri Soft L.L.C.; Kurella Rao; Global Resources,
Inc.; Michael Pol; Sachin Dewan; and Dewan Consultants Pvt. Ltd. (a/k/a MedTech
Consultants). All of the Devassy defendants are named in David.
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Further, the issues are almost identical. In all cases, the plaintiffs allege a
human trafficking scheme that induced them to emigrate from India with the
unfulfilled promise of permanent United States residency, and the imposition of
adverse working and living conditions. The theories of recovery in all of the
Mississippi cases are also presented in the David case. Finally, it should be noted
that failing to meet the commonality requirements for class certification is not
equivalent to a lack of substantial overlap of issues. There is such substantial
overlap that the Mississippi cases should be transferred to the Eastern District of
Louisiana for consideration of the issues.
The plaintiffs question the ability of the Louisiana court to assert personal
jurisdiction over all of the defendants. If there is such a question in these cases, it
must also be addressed in David, as all of the defendants named in the Mississippi
cases are also named in David. It would be improper for this Court to analyze the
Louisiana court’s jurisdiction in any event. The Fifth Circuit has rejected the
proposition that the first-to-file rule requires the second-filed court to consider the
jurisdiction of the first. Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 60405 (5th Cir. 1999). “Once the likelihood of a substantial overlap between the two
suits has been demonstrated, it is no longer up to the second filed court to resolve
the question of whether both should be allowed to proceed.” Id. at 606 (citation and
internal quotation marks omitted). “[T]he first-to-file rule ‘not only determines
which court may decide the merits of substantially similar issues, but also
establishes which court may decide whether the second suit filed must be dismissed,
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stayed or transferred and consolidated.’” Street v. Smith, 456 F. Supp. 2d 761, 768
(S.D. Miss. 2006) (citation and marks omitted).
For these reasons, the Court finds that transfer to the United States District
Court for the Eastern District of Louisiana is appropriate.
IT IS THEREFORE ORDERED AND ADJUDGED that the Motion [33] to
Consolidate filed by Signal International, Inc. and Signal International, LLC
(“Signal”) in cause no. 1:13cv222-LG-JMR, is GRANTED. Civil Action Nos.
1:13cv318 and 1:13cv319 shall be consolidated with Civil Action No. 1:13cv222, and
that Achari v. Signal International, LLC, Civil Action No. 1:13cv222-LG-JMR shall
serve as the lead case with Chakkiyattl v. Signal International, LLC, No. 13cv318LG-JMR and Krishnakutty v. Signal International, LLC, No. 13cv319-LG-JMR
designated as member cases. All subsequent pleadings relating to these causes of
action should be filed in the lead case only.
IT IS FURTHER ORDERED AND ADJUDGED that the Motion [11] to
Transfer Pursuant to First-Filed Rule filed by Signal International, LLC, is
GRANTED. The above-captioned consolidated cases are TRANSFERRED to the
United States District Court for the Eastern District of Louisiana.
SO ORDERED AND ADJUDGED this the 18th day of October, 2013.

s/

Louis Guirola, Jr.

LOUIS GUIROLA, JR.
CHIEF U.S. DISTRICT JUDGE

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