Alfaro-Huitron v. Wki Outsourcing Solutions, LLC

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.

EP-14-CV-00159-FM

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION

March 10, 2015

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 ofPersonal 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 federalH-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 tobind 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 jobopportunities.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, broadenedjurisdictional 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 inEl 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.

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