Alfaro-Huitron et al v. WKI Outsourcing Solutions, LLC et al
Filing
92
MEMORANDUM OPINION AND ORDER. Signed by Judge Frank Montalvo. (jg1)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
ESTEBAN ALFARO-HUITRON;
ELEAZAR GARCIA-MATA;
JOSE ANTONIO GARCIA-MATA;
JUAN GUZMAN; JOSE GERARDO
JASSO; RAUL JASSO-CERDA;
ENRIQUE ROJAS-TORRES; LAZARO
ROJAS-TORRES; TRINIDAD
SANTOYO-GARCIA; PEDRO TAMEZ;
SANTOS TREJO; ANGELA TREJO;
EFRAIN TREJO; YANETH TREJO; and
ISMAEL MARTINEZ-GONZALEZ,
Plaintiffs,
v.
WKI OUTSOURCING SOLUTIONS,
LLC; JAIME CAMPOS; RJF FARMS,
INC.; CERVANTES ENTERPRISES,
INC.; TIERRA DE DIOS FARMS, LLC;
SKYLINE PRODUCE, LLC; and LACK
FARMS, INC.,
Defendants.
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EP-14-CV-00159-FM
MEMORANDUM OPINION AND ORDER
On this day, the court considered Defendant Cervantes Enterprises, Inc.’s (“Cervantes”) “Motion
to Dismiss Defendant Cervantes Enterprises, Inc. for Lack of Personal Jurisdiction” (“Cervantes’s
Motion”) [ECF No. 16], filed June 6, 2014; “Defendant RJF Farms, Inc.’s 12(b)(2) and 12(b)(3) Motion
to Dismiss” (“RJF’s Motion”) [ECF No. 18], filed June 9, 2014 by Defendant RJF Farms, Inc. (“RJF”);
“Plaintiffs’ Response in Opposition to Defendants’ Motions to Dismiss for Lack of Personal Jurisdiction
and Improper Venue” (“Plaintiffs’ Response to Cervantes & RJF”) [ECF No. 34], filed June 30, 2014;
“Defendant RJF Farm, [sic] Inc.’s Reply in Support of Its Motion to Dismiss” (“RJF’s Reply”) [ECF No.
36], filed July 10, 2014; “Defendant Lack Farm, [sic] Inc.’s Motion to Dismiss for Lack of Personal
Jurisdiction” (“Lack’s Motion”) [ECF No. 56], filed June 16, 2014 by Defendant Lack Farms, Inc.
(“Lack”); “Memorandum in Support of Defendant Lack Farms, Inc.’s Motion to Dismiss for Lack of
Personal Jurisdiction” (“Lack’s Memorandum”) [ECF No. 57], filed June 16, 2014; “Plaintiffs’ Response
in Opposition to Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue”
(“Plaintiffs’ Response to Lack”) [ECF No. 60], filed June 30, 2014; “Defendant Lack Farms, Inc.’s Reply
in Support of Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue”
(“Lack’s Reply”) [ECF No. 61], filed July 18, 2014; “Defendant Skyline Produce, LLC’s 12(b)(2)
Motion to Dismiss” (“Skyline’s Motion”) [ECF No. 62], filed September 5, 2014 by Defendant Skyline
Produce, LLC (“Skyline”); “Response in Opposition to the Motion to Dismiss for Want of Personal
Jurisdiction Filed by Skyline Produce, LLC” (“Plaintiffs’ Response to Skyline”) [ECF No. 63], filed
September 19, 2014; “Plaintiffs’ Supplemental Response in Opposition to Defendants’ Motions to
Dismiss for Lack of Personal Jurisdiction” (“Plaintiffs’ Supplemental Brief”) [ECF No. 88], filed
February 2, 2015; and “Defendant Lack Farms’ Supplement in Support of Its Motion to Dismiss for Lack
of Jurisidiction [sic] [Doc. 16]” (“Lack’s Supplemental Response”) [ECF No. 91], filed February 13,
2015.1
I.
BACKGROUND
A.
Procedural Background
Cervantes, RJF, Lack, and Skyline (collectively, “Defendants”) are farming companies which are
registered in New Mexico and operate exclusively in New Mexico.2 Co-Defendant Jaime Campos
(“Campos”) is the founder of co-Defendant WKI Outsourcing Solutions, LLC (“WKI”).3 Campos
formed WKI to recruit U.S. and Mexican laborers to farms in southern New Mexico by using the federal
1
Cervantes and RJF have been sued by Plaintiffs Esteban Alfaro-Huitron, Eleazar Garcia-Mata, Jose
Antonio Garcia-Mata, Juan Guzman, Jose Gerardo Jasso, Raul Jasso-Cerda, Enrique Rojas Torres, Trinidad
Santoyo-Garcia, and Pedro Tamez. “Plaintiffs’ Original Complaint” (“Cervantes–RJF Complaint”), ECF No. 1,
filed Apr. 30, 2014. Lack and Skyline have been sued by Plaintiffs Santos Trejo, Angela Trejo, Efrain Trejo, Yaneth
Trejo, Ismael Martinez Gonzalez, Juan Guzman, Eleazar Garcia-Mata, and Esteban Alfaro-Huitron. “Plaintiffs’
Original Complaint” (“Lack–Skyline Complaint”), ECF No. 54, filed Apr. 30, 2014. For simplicity, this order will
refer to “Plaintiffs,” collectively.
2
Cervantes’s Mot. 2 ¶ 2; RJF’s Mot. 1; Lack’s Mem. 1; Skyline’s Mot. 2.
3
Cervantes–RJF Compl. 3 ¶ 4.3.
2
H-2A visa program (“H-2A Program,” or “Program”).4
The H-2A Program permits the U.S. Department of Labor to issue visas to foreign citizens for
temporary agricultural work. In order to be issued visas, an employer must first show “there are not
sufficient workers who are able, willing, and qualified, and who will be available at the time and place
needed, to perform the [requested] labor or services.”5 This requirement cannot be met if the Secretary
of Labor “determines that the employer has not made positive recruitment efforts within a multi-state
region of traditional or expected labor supply where the Secretary finds that there are a significant
number of qualified United States workers . . . available for work at the time and place needed.”6
Between September 2011 and March 2012, Campos met separately with representatives of
Defendants.7 As a result of these meetings, Defendants contracted for WKI to recruit workers for their
operations.8 Campos has testified each employer intended WKI to use the H-2A Program to recruit
workers.9
Defendant Skyline has objected to the purported existence of its agreement. Plaintiffs have
submitted a document dated March 14, 2012 entitled “Agreement of Outsourcing Support” (“Skyline
Agreement”), allegedly signed by Ronnie Franzoy (“Ronnie”) and binding Skyline and WKI in a
recruiting arrangement.10 However, Marty D. Franzoy (“Marty Franzoy,” or “Marty”) has testified he is
the owner and managing partner of Skyline, whereas Ronnie is a minority partner with no authority to
4
Pls.’ App. 18:11–19:1.
5
8 U.S.C. § 1188(a)(1)(A).
6
Id. § 1188(b)(4).
7
Pls.’ App. 50:21–51:12, 65:6–10, 180:4–17, 218:6–12.
8
Id. at 257, 259; Cervantes–RJF Compl., Exs. 2–3; ECF Nos. 1-2–1-3; filed Apr. 30, 2014. Although
Cervantes’s agreement refers to “Cervantes Agribusiness,” Cervantes does not dispute this agreement contains
Cervantes’s physical address and phone number, rather than those of Cervantes Agribusiness. Furthermore,
Cervantes does not dispute it was signed by a person with authority to bind Cervantes to a contract.
9
Pls.’ App. 157:19–25.
10
Id. at 744.
3
bind Skyline into any contracts.11 Marty stated that, although WKI’s representatives solicited Skyline’s
interest in recruitment services, he told them “Skyline did not need workers and was not interested in
contracting with WKI for labor.”12 Marty further testified he was unaware of the existence of any signed
agreement prior to May 2012 when WKI’s representatives visited him and presented him with the
Skyline Agreement.13 Although Marty’s signature is on the document above the word “Cancelled,”
Marty states he signed the Skyline Agreement at that time only because he “did not want any issues with
WKI” and the representatives told him they needed his signature to “cancel” the agreement.14
Campos’s testimony provides a different account of this document. According to Campos, the
Skyline Agreement was signed at a March 14, 2012 meeting between Campos and Ronnie, where Marty
spoke to Ronnie by phone.15 Campos has stated he understood Ronnie had authority from Marty to sign
the document.16 Although there was not an extensive discussion regarding the details of the arrangement
at the March 14th meeting, Campos testified Ronnie “knew about everything” regarding WKI’s work,
based on prior discussions.17
Pursuant to the agreements, WKI received conditional approval from the Department of Labor
for its H-2A applications, subject to U.S. recruitment.18 Campos then coordinated with the Texas
Workforce Commission regarding Texas recruitment and began to circulate information about job
11
Id. at 741–42.
12
Id. at 742.
13
Id.
14
Id.
15
Pls.’ App. 180:10–17.
16
Id. at 181:4–6.
17
Id. at 183:10–19.
18
Pls.’ Resp. Lack 25–26.
4
opportunities.19 Plaintiffs, fifteen farmworkers residing in El Paso and Hidalgo Counties, Texas,
subsequently received information about those jobs and engaged in further discussions with Campos and
WKI.20 As a result, Plaintiffs reached agreements with WKI to work for Defendants.21 However, neither
WKI nor Defendants provided the employment envisioned by Plaintiffs’ agreements.22
Plaintiffs filed two suits in the Western District of Texas on April 30, 2014, seeking relief for
violations of the Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”), breach of
contract, and promissory estoppel.23 Those were consolidated under the above-captioned number on
November 7, 2014.24 Defendants have filed motions seeking dismissal for want of personal jurisdiction
and, alternatively, dismissal for improper venue (requested by RJF)25 or transfer to the District of New
Mexico (requested by Lack).26 Lack has also requested an evidentiary hearing regarding personal
jurisdiction.27
In response to the jurisdictional objections, the court permitted jurisdictional discovery in two
orders. The first order, entered September 29, 2014 and before consolidation, encompassed Cervantes
and RJF.28 The second order, entered post-consolidation on November 10, 2014, broadened
19
Pls.’ App. 68:16–25.
20
Cervantes–RJF Compl. 10–14 ¶¶ 5.31–5.54; Lack–Skyline Compl. 9–13 ¶¶ 5.28–5.50.
21
Cervantes–RJF Compl. 10–14 ¶¶ 5.31–5.54; Lack–Skyline Compl. 9–13 ¶¶ 5.28–5.50.
22
Cervantes–RJF Compl. 15–17 ¶¶ 5.63–5.73; Lack–Skyline Compl. 13–16 ¶¶ 5.53–5.66.
23
Cervantes–RJF Compl. 17–22 ¶¶ 6.1–6.29; Lack–Skyline Compl. 19–23 ¶¶ 6.1–6.29.
24
“Order Consolidating Causes of Action,” ECF No. 53.
25
RJF’s Mot. 6–7.
26
Lack’s Mem. 9–10.
27
Lack’s Reply 13–14.
28
“Order Granting Limited Jurisdictional Discovery,” ECF No. 45.
5
jurisdictional discovery to include Skyline and Lack.29
B.
Defendants’ Arguments30
Defendants argue there is insufficient evidence to support the exercise of personal jurisdiction, as
they did not play a direct role in recruiting Plaintiffs and did not intend for WKI to engage in Texas
recruitment, and also have no property or operations in Texas.31 Furthermore, Defendants claim there is
no basis for imputing personal jurisdiction from WKI (indisputably subject to personal jurisdiction in
Texas) to them, as WKI was not in an agency relationship with any of them.32 As mentioned above,
Skyline asserts there is not even an arguable basis for exercising personal jurisdiction over it because the
purported agreement between WKI and Skyline is inauthentic.33
C.
Plaintiffs’ Arguments
Plaintiffs claim jurisdictional discovery has provided sufficient evidence to support exercising
personal jurisdiction over Defendants. They assert Campos’s testimony provides evidence not only that
Defendants intended WKI to recruit workers with the H-2A Program, but also that they were informed
the H-2A Program mandated Texas recruitment.34 To the extent Defendants were not aware of the
Program’s Texas recruiting requirement, Plaintiffs claim other circumstances, such as WKI’s locations in
29
“Order Granting Additional Limited Jurisdictional Discovery and Extending Discovery Deadlines,” ECF
No. 64.
30
As the arguments regarding personal jurisdiction are sufficient to fully resolve Defendants’ Motions, there
is no need to discuss venue.
31
See, e.g., Cervantes’s Mot. 2 ¶ 3 (“[Cervantes] has no business or offices, and conducts no business,
anywhere in the State of Texas.”); RJF’s Mot. 4–5 (“RJF Farms simply executed a contract and agreed to pay
workers who would be made available to provide processing and packing services in New Mexico during a specific
time period. RJF Farms had no other role.”).
32
See, e.g., RJF’s Reply 7 (“The lack of evidence that RJF directed the activities of WKI also establishes
that WKI was not RJF’s agent but rather an independent contractor.”).
33
Skyline’s Mot. 5–6.
34
Pls.’ Supp. Br. 20–27.
6
El Paso, Texas and Santa Teresa, New Mexico, made Texas recruitment foreseeable to Defendants.35
Furthermore, Plaintiffs argue evidence indicates WKI was in an agency relationship with Defendants,
thereby imputing personal jurisdiction from WKI to Defendants.36
II.
APPLICABLE LAW
Plaintiffs make federal and state law claims against Defendants, and assert this court has federal
question jurisdiction over the MSPA claim and supplemental jurisdiction over the state breach of
contract and promissory estoppel claims.37 In a federal question case where the implicated federal statute
does not provide for service of process,38 the court must determine whether the long-arm statute of the
state in which it sits would subject the defendant to personal jurisdiction.39 This standard also applies
when a state law claim is brought before a court under supplemental jurisdiction.40 The Texas long-arm
statute has been interpreted by Texas courts to reach “as far as the federal constitutional requirements of
due process will allow.”41 This court, therefore, has personal jurisdiction over Defendants with regard to
all of Plaintiffs’ claims if the requirements of due process are satisfied.
Due process is satisfied if the nonresident defendant: (1) has purposefully availed himself of the
benefits and protections of the forum state by establishing “minimum contacts” with the forum state and
35
Id. at 27–32.
36
Id. at 32–37.
37
Cervantes–RJF Compl. 2 ¶ 2.1; Lack–Skyline Compl. 2 ¶ 2.1.
38
The MSPA does not provide for service of process.
39
Burstein v. State Bar of Ca., 693 F.2d 511, 514 (5th Cir. 1982).
40
See Satis Vacuum Indus. Vertriebs, AG. v. Optovision Techs., Inc., No. Civ.A. 3:99CV2147-M, 2001 WL
694580, at *2 n.4 (N.D. Tex. June 14, 2001) (noting the “distinction is immaterial” between what is required for
personal jurisdiction under diversity jurisdiction, which looks to the reach of the forum state’s long-arm statute, and
supplemental jurisdiction via a federal question).
41
Tex. Civ. Prac. & Rem. Code §§ 17.041–.045; Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 657
(Tex. 2010).
7
(2) the exercise of jurisdiction over the defendant does not offend traditional notions of “fair play and
substantial justice.”42 The defendant must “have sufficient contacts with the forum state such that [he]
should reasonably anticipate being haled into court there.”43 Thus, “the nonresident must have some
minimum contact with the forum which results from an affirmative act on his part . . . [and] it must be
fair and reasonable to require the nonresident to defend the suit in the forum state.”44
Personal jurisdiction may be either general or specific.45 Specific jurisdiction exists where “a
nonresident defendant has purposefully directed its activities at the forum state and the litigation results
from alleged injuries that arise out of or relate to those activities.”46 To determine if sufficient minimum
contacts exist, the court considers the quality and nature of any contacts with the state and examines the
relationship among the nonresident defendant, the forum, and the litigation.47 If the defendant lacks
sufficient contacts, exercise of specific jurisdiction would violate a defendant’s Fourteenth Amendment
right to due process.48
If the court determines the nonresident defendant has sufficient minimum contacts with the state,
it must then determine whether the exercise of specific jurisdiction comports with “traditional notions of
42
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Moncrief Oil Int’l Inc. v. OAO Gazprom, 481
F.3d 309, 311 (5th Cir. 2007).
43
World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980); ITL Int’l, Inc. v. Constenla, S.A.,
669 F.3d 493 (5th Cir. 2012) (internal quotation marks omitted).
44
Stuart v. Spademan, 772 F.2d 1185, 1189 (5th Cir. 1985).
45
Gundle Lining Constr. Corp. v. Adams Cnty. Asphalt, Inc., 85 F.3d 201, 204–07 (5th Cir. 1996).
Plaintiffs provide no evidence that Defendants’ contacts with Texas were continuous and systematic, but rather that
all of the relevant contacts were in association with their agreements with WKI. Accordingly, this order will not
address general jurisdiction.
46
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985); Cent. Freight Lines Inc. v. APA Transp.
Corp., 322 F.3d 376, 381 (5th Cir. 1999) (internal quotation marks omitted).
47
Int’l Shoe, 326 U.S. at 318–19.
48
Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 108–09 (1987).
8
fair play and substantial justice.”49 When evaluating this issue, a court will examine the following: 1) the
burden on the defendant; 2) the interests of the forum state; 3) the plaintiff’s interest in convenient and
effective relief; 4) the interest of the judicial system in efficient resolution of controversies; and 5) the
shared interest of the several states in furthering fundamental substantive social policies.50
Where a nonresident defendant files a motion to dismiss for lack of personal jurisdiction, the
plaintiff bears the burden of establishing the court’s personal jurisdiction over the defendant.51 When a
district court rules on this motion without conducting an evidentiary hearing, the plaintiff can meet its
burden by presenting a prima facie case for jurisdiction.52 In addition, the court must accept the
plaintiff’s uncontested allegations as true and resolve all conflicting facts in the plaintiff’s favor.53
III.
DISCUSSION
A.
Personal Jurisdiction
1.
The Disputed Skyline Agreement
Marty Franzoy’s account provides no basis on which a binding agreement could have been
formed between Skyline and WKI. On the other hand, Campos testified Ronnie spoke on the phone to
Marty before signing the Skyline Agreement. From this, a jury could plausibly conclude Ronnie had
actual authority to bind Skyline into an agreement.54
49
Int'l Shoe, 326 U.S. at 316.
50
Asahi Metal Indus., 480 at 113; World-Wide Volkswagen, 444 U.S. at 292.
51
Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999); Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.
52
Wilson, 20 F.3d at 648.
53
Id.
1994).
54
See Suarez v. Jordan, 35 S.W.3d 268, 273 (Tex. App.—Houston [14th Dist.] 2000, no pet.) (noting that
actual authority is “created through conduct of the principal communicated . . . to the agent”).
9
Disputed facts in a Rule 12(b)(2) motion to dismiss must be resolved in favor of the plaintiff.55
Furthermore, although a prima facie case for personal jurisdiction is sufficient to defeat a Rule 12(b)(2)
motion, Plaintiffs still have to prove jurisdictional facts at trial by a preponderance of the evidence.56
While Marty’s assertions might prevail on jurisdictional grounds at trial, they fail to defeat Plaintiffs’
prima facie case that Ronnie had authority to sign the Skyline Agreement. Accordingly, the court will
assume the Skyline Agreement was supported by Ronnie’s actual authority for purposes of evaluating
Skyline’s Motion.
2.
Minimum Contacts
To the extent Defendants intended WKI to engage in Texas recruitment, WKI’s Texas
recruitment can give rise to personal jurisdiction over Defendants.57 The question is whether Plaintiffs
have made a prima facie case of such intent. After due consideration, only Plaintiffs’ cases against Lack
and Skyline need to be addressed to fully resolve Defendants’ Motions.
Pursuant to the court’s discovery orders, Campos was deposed twice. The first deposition, on
October 9, 2014, occurred before consolidation, meaning the questioning did not focus on either Lack or
Skyline.58 Jurisdictional facts concerning Lack and Skyline, as well as RJF and Cervantes, were
developed at Campos’s second deposition, on January 6, 2015.59
In his second deposition, Campos responded to a question by stating he never informed one of
Lack’s representatives that WKI intended to recruit workers from Texas, and furthermore, he would
55
Wilson, 20 F.3d at 648.
56
Brown v. Slenker, 220 F.3d 411, 419 (5th Cir. 2000).
57
See Burger King, 471 U.S. at 476 n.18 (“So long as it creates a ‘substantial connection’ with the forum,
even a single act can support jurisdiction.”).
58
See Pls.’ App. 50:12–20 (confirming the deposition only focuses on RJF, Cervantes, and Rio Valley
Chili, Inc., a defendant later dismissed from this cause).
59
See id. at 156:3–8 (inquiring into what Campos discussed with RJF, Cervantes, Lack, and Skyline).
10
answer an analogous question about Skyline, as well as RJF and Cervantes, “basically the same.”60
However, to the extent Campos contradicted this testimony, there are disputed facts which must be
resolved in Plaintiffs’ favor.
During his second deposition, Campos stated that he told “all the farmers” WKI was going to
recruit workers through the H-2A Program.61 This is prima facie evidence Lack and Skyline intended
WKI to utilize the H-2A Program. However, it is not sufficient to indicate Lack or Skyline intended or
foresaw Texas recruitment.62
Plaintiffs aver that the following segment of Campos’s second deposition demonstrates he told
Lack and Skyline he would be recruiting in Texas:
Question:
Answer:
Question:
Answer:
So my question is is it accurate that you told all of the farmers, including
all of the defendants in both cases, that you would -- H-2A regulations
required you to recruit in the surrounding states, then that would include
Texas?
[Cervantes’s attorney objects to the form of the question.]
The labor department -- federal labor department requires that.
Is that a yes?
[Cervantes’s attorney objects to the form of the question.]
Yes.63
The initial question encompasses two inquiries: (1) what Campos told interested farmers, and (2) the
substance of the H-2A Program’s requirements.64 Campos’s first answer (“The . . . federal labor
department requires that.”) indicates his response focuses on the substance of the Program’s
requirements, not whether he told farmers about those requirements. Because Campos’s answer has an
60
Id. at 215:21–216:7.
61
Id. at 157:19–25.
62
See Chery v. Bowman, 901 F.2d 1053, 1056 (11th Cir. 1990) (“Although Bowman learned that the
Virginia local office had sent his clearance orders to Florida [pursuant to the H-2A Program], he never requested this
action.”).
63
Pls.’ App. 160:16–161:1.
64
The question could be construed broadly to include a third query: whether Texas is one of New Mexico’s
surrounding states.
11
ambiguous meaning and a proper objection was lodged,65 this is not prima facie evidence Campos told
Lack and Skyline about Texas recruiting.
Additional relevant testimony focused on Skyline. Campos’s testimony about the March 14,
2012 meeting with Ronnie and (by telephone) Marty Franzoy does not indicate Marty was informed
about the H-2A Program requiring Texas recruiting. On the contrary, Campos stated there was very
little, if any, discussion of the H-2A Program at that meeting due to Ronnie’s knowledge about his and
WKI’s business.66 Even if the court assumes, as implied by Campos, Ronnie knew about WKI’s intent to
use the H-2A Program and recruit in Texas,67 there is no indication Marty was aware of those details at
the meeting. As Plaintiffs concede Marty’s consent was required to bind Skyline into an agreement,68
Campos’s testimony about the March 14, 2012 meeting does not indicate Skyline (through Marty
Franzoy) intended or foresaw Texas recruitment even when the testimony is construed in a light most
favorable to Plaintiffs.
Even though Plaintiffs have not shown Lack and Skyline knew WKI would recruit in Texas, they
argue personal jurisdiction should be found because the two defendants should have known WKI would
recruit in Texas.69 Plaintiffs aver the court “should not allow the relatively established, sophisticated
[Lack and Skyline] to . . . avoid being charged with knowledge of the natural consequence of their
seeking [H-2A] workers: recruitment in Texas.”70
Plaintiffs have shown that Lack and Skyline intended to use the H-2A Program. Even though
65
See Fed. R. Civ. P. 30(c)(2) (“[Deposition] testimony is taken subject to any objection.”).
66
Pls.’ App. 183:10–19.
67
See id. at 183:15–17 (discussing Ronnie Franzoy’s knowledge and stating “[h]e knew about everything”).
68
See Pls.’ Supp. Br. 15–16 (stating Marty “manages all labor matters” for Skyline and “authorized” Ronnie
to sign the Skyline Agreement on Skyline’s behalf).
69
Id. at 23.
70
Id. at 25.
12
this could be viewed as creating personal jurisdiction in other states, at least one court of appeals has
rejected this argument. In Chery v. Bowman, a Virginia employer utilized the H-2A Program with the
help of a recruiting agent.71 In accordance with federal requirements, the Department of Labor
transferred copies of a clearance order listing details about the employer’s job opportunity to Florida as a
potential source of workers.72 After several workers from Florida — who originally learned about the
opportunity and had extensive communications with the employer and his recruiting agent while in
Virginia prior to being hired — were terminated by the employer, they filed suit against the employer in
a Florida federal district court.73 The Eleventh Circuit found the circulation of the clearance order to
Florida, which was not requested by the employer, did not constitute purposeful availment of the Florida
forum, which would subject the employer to specific jurisdiction in the state.74 In light of Chery,
Plaintiffs cannot make intent to use the H-2A Program the sole basis for personal jurisdiction in Texas,
even if the Program’s requirements make Texas recruitment a natural consequence of using the Program.
Plaintiffs also aver WKI’s El Paso address (listed on a Department of Labor certificate shown to
Lack and Skyline), as well as Campos’s plans to house workers in El Paso, provide sufficient contacts for
personal jurisdiction.75 However, for specific jurisdiction to exist, more is required than contacts with a
forum state; such contacts must give rise to a cause of action. Absent a principal–agent relationship, a
party does not subject itself to personal jurisdiction in a foreign state solely by contracting with a
71
901 F.2d at 1054.
72
Id. at 1054–55.
73
Id.
74
Id. at 1056–57.
75
Pls.’ Supp. Br. 27–28; Pls.’ App. 135.
13
recruiter in the foreign state who hires workers in the foreign state.76 Furthermore, Plaintiffs’ cause of
action arises out of Texas recruitment efforts, not plans to house workers in Texas regardless of their
places of origin.
Plaintiffs’ remaining foreseeability argument asserts a consistent supply of Texas farmworkers in
New Mexico’s labor market, as well as WKI listing its locations in Santa Teresa, New Mexico77 and El
Paso, made recruitment of Texas workers foreseeable to Lack and Skyline. While foreseeability is
relevant in determining whether a party has minimum contacts with a forum state,78 a party does not meet
the minimum contacts requirement simply because contact with a forum state is foreseeable. Instead,
what is critical is whether “the defendant’s conduct and connection with the forum [s]tate are such that
he should reasonably anticipate being haled into court there.”79
As already discussed, even if a party’s recruiter is located in a forum state, that is not sufficient
for the forum state to extend personal jurisdiction over the party in a dispute involving a recruited
person.80 In support of their argument concerning the New Mexico labor market, Plaintiffs cite
Moncevoir Hyppolite v. Gorday81 for the proposition that parties who regularly hire workers from another
state are subject to personal jurisdiction in that state.82 However, the Moncevoir Hyppolite court relied
76
See Sarmiento v. Producer’s Gin of Waterproof, Inc., 439 F. Supp. 2d 725, 730 (S.D. Tex. 2006) (“Even
in the cases relied upon by Plaintiffs for the proposition that nonresident employers are subject to personal
jurisdiction based on their agents’ recruitment of migrant farmworkers, such personal jurisdiction was based on
evidence of an established principal-agent relationship between the nonresident defendant and the recruiter.”).
77
According to Plaintiffs, the provided Santa Teresa address is less than a mile from the Texas border. Pls.’
Supp. Br. 31.
78
World–Wide Volkswagen, 444 U.S. at 297.
79
Id.
80
Sarmiento, 439 F. Supp. 2d at 730.
81
No. 89-1843-CIV-NESBITT, 1990 WL 80684 (S.D. Fla. Mar. 22, 1990).
82
Pls.’ Supp. Br. 31.
14
on allegations that a defendant had employed recruiters within a forum state with the purpose of hiring
workers within that state.83 By contrast, no evidence in the record indicates either Lack or Skyline was
aware WKI intended to recruit workers in Texas. As Plaintiffs have not presented any evidence
demonstrating Lack’s and Skyline’s intent to recruit Texas workers through WKI, Plaintiffs’ labormarket argument fails.
3.
Imputed Personal Jurisdiction
Plaintiffs argue that personal jurisdiction may be imputed to Lack and Skyline through their
business relationship with WKI.84 In order for the court’s personal jurisdiction over WKI to be imputed
to Defendants, a principal–agent relationship must be established between the parties.85 Such a
relationship cannot be presumed to exist, but must be established.86 Under Texas law, an agency
relationship requires that “[t]he alleged principal must have the right to control both the means and the
details of the process by which the alleged agent is to accomplish his task.”87 Consequently, the court
will examine Plaintiffs’ claims regarding WKI’s relationships with Lack and Skyline. For these
purposes, WKI’s relationships with other parties are not sufficient evidence of the purported agency
relationships with Lack and Skyline.88
Campos testified that a slogan on a WKI flier, “We provide solutions and collaboration to all our
83
Moncevoir Hyppolite, 1990 WL 80684, at *4.
84
Pls.’ Supp. Br. 32.
85
See Flores v. A.C., Inc., No. EP-02-CA-0200-DB, 2003 WL 1566507, at *7 (W.D. Tex. Mar. 5, 2003)
(“For purposes of personal jurisdiction, the actions of an agent may be attributed to the principal.”).
86
Id.
87
Matter of Carolin Paxson Adver., Inc., 938 F.2d 595, 598 (5th Cir. 1991) (citing Xarin Real Estate, Inc.
v. Gamboa, 715 S.W.2d 80, 84 (Tex. App.—Corpus Christi 1986, writ ref’d n.r.e.); Johnson v. Owens, 629 S.W.2d
873, 875 (Tex. App.—Fort Worth 1982, writ ref’d n.r.e.)).
88
See Pls.’ Supp. Br. 34 (asserting WKI’s agency relationships with Lack and Skyline are demonstrated by
the belief of Ronnie Franzoy, an officer of RJF, that he “retain[ed] complete control over how WKI recruited
workers for RJF”).
15
customers,” was intended to tell farmers WKI wanted “to get things done the way that the farmers
wanted things to be done.”89 Plaintiffs assert this is evidence of agency relationships with Lack and
Skyline.90 There is no evidence Lack or Skyline understood the slogan to have the meaning advanced by
Campos. Accordingly, this does not evince agency relationships.
Plaintiffs also argue agency relationships are demonstrated by Lack and Skyline expecting
Campos to adhere to the requirements of the H-2A Program.91 However, requiring a subordinate to
comply with existing law; when such compliance does not provide a right to control the means, methods,
or details of the subordinate’s work; does not demonstrate an agency relationship under Texas law.92 For
this reason, Plaintiffs’ argument fails.
Plaintiffs claim agency relationships are shown by WKI’s lack of knowledge of how agricultural
labor is performed, meaning that “[t]o accept that [Lack and Skyline] did not control recruiting, the
finder of fact would have to accept that [Lack and Skyline would] pay any person who WKI alone chose
to recruit without input from [them].”93 However, Texas law does not presume an agency relationship
exists solely because a principal has authority to approve the final results of the purported agent’s work.
A principal’s right to approve final results is inherent in any working relationship, not just an agency
89
Pls.’ App. 206:2–207:5, 240.
90
Pls.’ Supp. Br. 34–35.
91
Id. at 35; see also Pls.’ App. 606:16–21 (stating Lack’s representative’s expectation that Campos would
follow federal law).
92
See Dow Chem. Co. v. Bright, 89 S.W.3d 602, 606–07 (Tex. 2002) (finding a contract that placed on a
purported contractor a duty to take necessary safety precautions for employees did not create a principal–agent
relationship).
93
Pls.’ Supp. Br. 35. Although the record does not establish WKI’s level of knowledge in agricultural
work, the court will assume WKI was substantially less informed than Lack and Skyline for purposes of Plaintiffs’
argument.
16
relationship.94 In order to demonstrate an agency relationship between WKI and the two defendants,
Plaintiffs must show Lack and Skyline had control over how WKI recruited, not simply who WKI
recruited.95 Accordingly, Lack and Skyline’s right to approve WKI’s recruited workers cannot be the
basis of an agency relationship.
Next, Plaintiffs claim WKI’s compliance with Lack’s and Skyline’s requests to stop hiring
workers is evidence of a right of control.96 However, under Texas law, a principal has a right to end a
subordinate’s work even if the subordinate is an independent contractor.97 Consequently, this detail is
not relevant to whether an agency relationship existed between WKI and the two defendants.
Plaintiffs point to Lack and Skyline’s purported authority to order WKI to remove any worker
they did not want.98 However, WKI’s agreements required it to transport workers to and from employer
farms on a regular basis.99 The right to have WKI remove unnecessary workers is a natural extension of
WKI’s transportation obligation, even if WKI was not the agent of Lack and Skyline. Accordingly, this
purported authority is not a basis for demonstrating agency relationships.
Finally, Plaintiffs argue WKI was so “thoroughly dependent” upon satisfying Lack, Skyline, and
94
See Household Credit Servs., Inc. v. Driscol, 989 S.W.2d 72, 86 (Tex. App.—El Paso 1998, pet. denied)
(emphasis added) (citing Pitchfork Land & Cattle Co. v. King, 346 S.W.2d 598, 602–03 (Tex. 1961)) (“Factors used
in determining whether a party is an independent contractor [include] his right to control the progress of the work
except as to final results . . . .”).
95
See Coleman v. Klöckner & Co. AG, 180 S.W.3d 577, 588 (Tex. App.—Houston [14th Dist.] 2005, no
pet.) (“Absent proof of the right to control the means and details of the work performed, only an independent
contractor relationship is established.”).
96
Pls.’ Supp. Br. 36; Pls.’ App. 744, 809.
97
See Cont’l Ins. Co. v. Wolford, 526 S.W.2d 539, 541 (Tex. 1975) (“[T]he right to stop the work exists
regardless of whether Wolford was an employee or independent contractor . . . .”).
98
Pls.’ Supp. Br. 36.
99
See Pls.’ App. 43:21–22 (stating WKI was “going to transport [workers] timely to get to the field”).
17
its other clients that agency relationships are thereby demonstrated.100 This argument, though relevant, is
not controlling, as more is required to turn an independent contractor into an agent of whomever hired
the contractor.101
Thus, even assuming WKI was economically dependent on Lack and Skyline, this is not enough
to demonstrate agency relationships; Plaintiffs must demonstrate Lack and Skyline maintained and
exerted control over WKI’s activities.102 The right of control is so crucial to agency relationships that
even when multiple factors point towards an independent contractor relationship, the right of control may
result in an agency relationship.103 By contrast, Plaintiffs have presented no evidence showing that either
Lack or Skyline exercised the level of control over WKI necessary to make WKI its agent.
As Plaintiffs have failed to make a prima facie case WKI was the agent of Lack or Skyline,
personal jurisdiction cannot be imputed from WKI to Lack and Skyline.104
B.
Transfer to the District of New Mexico
Plaintiffs have failed to show Lack and Skyline are subject to personal jurisdiction in the
Western District of Texas. Even assuming Cervantes and RJF are subject to this court’s jurisdiction,105
100
Pls.’ Supp. Br. 36–37.
101
See Household Credit Servs., 989 S.W.2d at 86 (citing Pitchfork Land & Cattle Co. v. King, 346 S.W.2d
598, 602–03 (Tex. 1961)) (“Factors used in determining whether a party is an independent contractor are: (1) the
independent nature of the contractor’s business; (2) his obligation to supply necessary tools, supplies, and materials;
(3) his right to control the progress of the work except as to final results; (4) the time for which he is employed; and
(5) the method by which he is paid, whether by the time or by the job.”).
102
Id.
103
See id. (holding that even though a collection agency “handled accounts for other creditors[,] operated its
own facilities and used its own equipment[,] and was paid on a contingency basis,” there was sufficient evidence to
conclude a creditor “maintained sufficient right of control over [the collection agency] and[,] moreover, exerted
enough control over the details of [the collection agency]’s work to make [it] the agent of [the creditor]”).
104
As Lack and Skyline do not have sufficient contacts with Texas, it is unnecessary to consider whether
exercising personal jurisdiction over them would offend traditional concepts of fair play and substantial justice.
105
No opinion is expressed regarding the merits of Cervantes’s and RJF’s objections to personal jurisdiction
in the Western District of Texas.
18
Plaintiffs will not be able to pursue all of their claims in this district. It will be inefficient, costly, and
create a risk of inconsistent verdicts for Plaintiffs to proceed with a parallel cause in the District of New
Mexico.106
Transferring this cause to the Las Cruces Division of the District of New Mexico will serve the
needs of justice and judicial economy. As Las Cruces is less than fifty miles from El Paso, Plaintiffs and
potential witnesses will not be overly burdened by the transfer. Retaining all claims in a single cause of
action will allow Plaintiffs to efficiently pursue relief for all their claims. As transfer is clearly in the
interests of justice and convenient for parties and witnesses,107 this cause will be transferred to the Las
Cruces Division of the District of New Mexico. Consequently, Lack and Skyline will be retained in the
transferred cause of action, instead of being dismissed due to a lack of personal jurisdiction in the
Western District of Texas.
IV.
CONCLUSION
For the aforementioned reasons, the court enters the following orders:
1.
Cervantes’s “Motion to Dismiss Defendant Cervantes Enterprises, Inc. for Lack of
Personal Jurisdiction” [ECF No. 16] is DENIED AS MOOT.
2.
“Defendant RJF Farms, Inc.’s 12(b)(2) and 12(b)(3) Motion to Dismiss” [ECF No. 18] is
DENIED AS MOOT.
3.
“Defendant Lack Farm, [sic] Inc.’s Motion to Dismiss for Lack of Personal Jurisdiction”
[ECF No. 56] is DENIED AS MOOT.
4.
“Defendant Skyline Produce, LLC’s 12(b)(2) Motion to Dismiss” [ECF No. 62] is
DENIED AS MOOT.
106
No defendant disputes it is subject to personal jurisdiction in the District of New Mexico.
107
28 U.S.C. § 1404(a).
19
5.
The Clerk of the Court is hereby INSTRUCTED to transfer this cause to the Las Cruces
Division of the District of New Mexico.
SO ORDERED.
SIGNED this 10th day of March, 2015.
______________________________________
FRANK MONTALVO
UNITED STATES DISTRICT JUDGE
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