Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 1 of 38

REED SMITH LLP A Limited Liability Partnership formed in the State of Delaware One Riverfront Plaza, First Floor Newark, NJ 07102-5400 Tele: (973) 621-3200 Fax: (973) 621-3199 Attorneys for Defendant Wal-Mart Stores, Inc. RHB/1835
UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, H~OLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf of themselves and all others similarly situated,
Plaintiffs,

CIVIL ACTION NO.: 03-5309 (JAG)
WAL-MART STORES, INC.’S REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF ITS MOTION TO DISMISS WITH PREJUDICE COUNTS ONE AND TWO OF PLAINTIFFS’ SECOND AMENDED CLASS ACTION COMPLAINT AND JURY DEMAND

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WAL-MART STORES, INC.,

Defendant.

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TABLE OF CONTENTS
ARGUMENT ...................................................................................................................................1 I. PREDICATE ACTS .....i ......................................................................................................2
A. Plaintiffs’ Money Laundering Predicate Fails ...................................................3...... 1. Plaintiffs Do Not Plead Direct Money Laundering Predicates In The Second Amended Complaint ...............................................................3.. 2. Plaintiffs Cannot Satisfy The Requisite Elements Of A Direct Money Laundering Offense Against Wal-Mart ......................................4..... 3. Plaintiffs Fail To Allege A Viable Money Laundering Conspiracy ....6........
B. Plaintiffs’ Immigration Predicates Fail ..............................................................7...... 1, Plaintiffs’ Conspiracy And Aiding And Abetting Theories Fail .........8........ 2. Plaintiffs’ Harboring Predicate Fails ......................................................9.....
C. Plaintiffs’ Involuntary Servitude Predicate Fails ............................................1...1.... II. STANDING .......................................................................................................................12
A. Plaintiffs Cannot Plead Proximate Causation And, Therefore, They Lack Standing to Pursue RICO Claims Against Wal-Mart ........................................1...2..
B. Plaintiffs’ Own Conduct Broke The Causal Chain ..........................................1...5... C. Plaintiffs Ignore The Third Circuit’s Steamfitters Test ......................................... 20 III. ENTERPRISE AND CONTROL .....................................................................................2. 1 A. Plaintiffs Fail To Allege A Distinct RICO Enterprise .....................................2..1.... B. Plaintiffs Fail To Allege A Common Purpose .................................................2...2... C. Plaintiffs Fail To Allege That Wal-Mart Controlled The Enterprise .............2...4..... IV. RICO CONSPIRACY .......................................................................................................2. 4 CONCLUSION ...............................................................................................................................26
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CASES

TABLE OF AUTHORITIES

Anderson v. Ayling, 396 F.3d 265 (3d Cir. 2005) ..................................................................2..1,26

Anderson v. Smithfield Foods, Inc., 209 F. Supp. 2d 1270 (M.D. Fla. 2002), aff’d, 353 F.3d 912 (llth Cir. 2003) .........................................................................................6...

Averbach v. Rival Mfg. Co., 879 F.2d 1196 (3d Cir. 1989) ...................................................2..2,24

Averbach v. Rival Mfg. Co., 809 F.2d 1016 (3d Cir. 1987) ...................................................2..2,24

Baker v. IBP, Inc., 357 F.3d 685 (7th Cir. 2004) ................................................................2. 1,22,23

Banco Del Atlantico, S.A.v. Stauder, No. 03-1342, 2005 WL 1925830 (S.D. Ind. Aug. 11, 2005) ..........................................................................................................2. 3

Banco Industrial de Venezuela, C.A.v. Credit Suisse, 99 F.3d 1045 (1 lth Cir. 1996) ...........1..9...

Bateman Eichler, Hill Richards, Inc. v. Bemer, 472 U.S. 299 (1985) ..................................1.5..,.16

Beck v. Prupis, 529 U.S. 494 (2000) ............................................................................................2. 6

Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) ............................................2..1,22

Choimbol v. Fairfield Resorts, Inc., No. 05-463, 2006 WL 521763 (E.D. Va. Mar. 2, 2006) ........................................................................................................14,15

Commercial Cleaning Servs., L.L.C.v. Colin Serv. Sys., Inc., 271 F.3d 374 (2d Cir. 2001) ........................................................................................................................13,14

Danielsen v. Bumside-Ott Aviation Training Ctr., Inc., 941 F.2d 1220 (D.C. Cir. 1991) .....1...3....

Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d Cir. 2000) .........................1.8. ,19

Eli Lilly & Co. v. Roussel Corp., 23 F. Supp. 2d 460 (D.N.J. 1998) ........................................1...2.

Emcore Corp. v. PricewaterhouseCoopers LLP, 102 F. Supp. 2d 237 (D.N.J. 2000) ................2..3.

General Elec. Co. v. Deutz AG, 270 F.3d 144 (3d Cir. 2001) .......................................................7..

Genty v. Resolution Trust Corp., 937 F.2d 899 (3d Cir. 1991) ..................................................1..7. Green v. Aztar Corp., No. 02-3514, 2003 WL 22012205 (N.D. Ill. Aug. 22, 2003) ...................1..9

Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) ............................................1..8.

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Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992) ......................................1..2.. Kaveney v. Miller, No. 93-0128, 1993 WL 298718 (E.D. Pa. July 30, 1993) ...........................1..1. Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir. 1993) .............................................2..5.. Livingston v. Shore Slurry Seal, Inc., 98 F. Supp. 2d 594 (D.N.J. 2000) .................................1..3.. Lum v. Bank of Am., 361 F.3d 217 (3d Cir. 2004), cert. denied, 543 U.S. 918 (2004) ........1..0.,25 In re MasterCard Int’l Inc., 313 F.3d 257 (5th Cir. 2002) ..........................................................1...9 Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002) .................................................1..3,14 Nasrv. Geary, No. 94-8288, 2003 U.S. Dist. LEXIS 13887 (C.D. Cal. June 9, 2003) ..............1...9 Northeast Women’s Ctr., Inc. v. McMonagle, 868 F.2d 1342 (3d Cir. 1989) ............................1..9. Official Comm. of Unsecured Creditors of PSA, Inc. v. Edwards, 437 F.3d 1145
(1 lth Cir. 2006), petition for certiorari filed, No. 05-1335 (U.S. Apr. 14, 2006) ..............passim O’Keefe v. Aamco Transmissions, Inc., No. 91-2506, 1992 WL 38441
(E.D. Pa. Feb. 24, 1992) ...............................................................................................................4 P. Schoenfeld Asset Mgmt. LLC v. Cendant Corp., 142 F. Supp. 2d 589 (D.N.J. 2001) .........2..,.4 Pennsylvania ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173 (3d Cir. 1988) ...................2..,.3.. Perma Life Mufflers, Inc. v. Intemational Parts Corp., 392 U.S. 134 (1968) ......................1..5..,16 Pinter v. Dahl, 486 U.S. 622 (1988) ............................................................................................1..6 Plyler v. Doe, 457 U.S. 202 (1982) ...............................................................................................1. 6 Shulton, Inc. v. Optel Corp., No. 85-2925, 1986 WL 15617 (D.N.J. Sept. 29, 1986) .................1..9 Sikes v. Teleline, Inc., 281 F.3d 1350 (1 lth Cir. 2002) ..............................................................1...9 Starfish Inv. Corp. v. Hansen, 370 F. Supp. 2d 759 (N.D. Ill. 2005) .....................................2.2. ,23 Steamfitters Local Un~on No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912
(3d Cir. 1999) ............................................................................................................................2. 0 Tilli v. Aamco Transmissions, Inc., No. 91-1058, 1992 WL 38405
(E.D. Pa. Feb. 24, 1992) ...............................................................................................................4
ooo - 111 =

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Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) ..................................................1..3. United States v. Caruso, 948 F. Supp. 382 (D.N.J. 1996) .............................................................4.. United States v. Conle’¢, 37 F.3d 970 (3d Cir. 1994) ...................................................................5.,6 United States v. Kozminski, 487 U.S. 931 (1988) ......................................................................1...1 United States v. LaBrtmerie, 914 F. Supp. 340 (W.D. Mo. 1995) ..............................................5..,6 United States v. Morelli, 169 F.3d 798 (3d Cir. 1999) ..................................................................5.. United States. v. Omoruyi, 260 F.3d 291 (3d Cir. 2001) ...............................................................5.. United States v. Shackney, 333 F.2d 475 (2d Cir. 1964) .............................................................1..2 United States v. Singh, 261 F.3d 530 (5th Cir. 2001) .................................................................1...0 United States v. Turkette, 452 U.S. 576 (1981) ...........................................................................1..7 United States v. Zheng, 306 F.3d 1080 (1 lth Cir. 2002) ............................................................1...0 University of Md. at Baltimore v. Peat Marwick, Main & Co., 996 F.2d 1534
(3d Cir. 1993) ............................................................................................................................2. 4 Williams v. Mohawk Indus., 411 F.3d 1252 (1 lth Cir.), cert: g[anted in oart, 126 S. Ct.
830 (2005) ..................................................................................................................................13 Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295 (D.N.J. 2005) ..................................p.assim STATUTES 18 U.S.C. § 1956(a) .........................................................................................................................5 CONGRESSIONAL MATERIAL 116 Cong. Rec. I-I35346-47 (Oct. 7, 1970) ...................................................................................1. 7

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Wal-Mart Stores, Inc. ("Wal-Mart") submits this Reply Memorandum of Law in Further Support of its Motion to Dismiss with Prejudice Counts One and Two of Plaintiffs’ Second Amended Class Action Complaint and Jury Demand ("Second Amended Complaint" or "SAC").
ARGUMENT Wal-Mart’s Opening Brief ("W-M Opening Br.’) demonstrated that Plaintiffs have failed to plead viable predicate acts of racketeering, lack RICO standing, have not adequately alleged the enterprise and control lements of their RICO claims, and have failed to state a RICO conspiracy. Plaintiffs have not countered any of these arguments, each of which provides an independent basis for dismissal of Plaintiffs’ amended RICO claims with prejudice. More specifically, Plaintiffs do not dispute that their amended RICO claims arc based on the same (often verbatim) allegations that this Court has already considered and rejected. Scc Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295, 335 (D.N.J. 2005). Nor do Plaintiffs seriously attempt to defend the fatal deficiencies in their RICO standing or enterprise and control allegations -- which are again the same (often verbatim), but which the Court did not reach in its prior ruling. Plaintiffs instead try to recast their RICO theory as primarily involving money laundering violations, by alleging new predicate offenses in their Opposition Brief ("Opp’n") and attaching extraneous "evidence" to it. Plaintiffs’ attempt to amend their pleading through argument is improper and should be rejected. Equally fundamental, Plaintiffs’ shift away from the alleged immigration law offenses (which have nothing to do with their claimed injury (unpaid overtime and some minimum wage) and in which Plaintiffs themselves were complicit) to alleged money laundering offenses only further confirms that the amended RICO claims should be dismissed with prejudice. The Second Amended Complaint does not allege viable money laundering offenses by Wal-Mart; and even
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assuming arguendo that Plaintiffs ever could allege them, such predicates again would not have

caused Plaintiffs’ claimed injury. The Fair Labor Standards Act ("FLSA") affords the remedy

for alleged overtime and minimum wage violations. The FLSA is not a RICO predicate and this

is not a proper RICO case.

Finally, the Opposition Brief contains numerous other legal errors and misstatements. For example, Plaintiffs assert that the in pari delicto defense is not available in RICO cases. In

fact, as the Eleventh Circuit Court of Appeals recently confirmed, in pari delicto is a viable

defense to RICO claims because it prevents complicit parties from misusing and undermining the

RICO statute. Official Comm. of Unsecured Creditors of PSA, Inc. v. Edwards, 437 F.3d 1145,

1149-56 (1 lth Cir.) ("Edwards"), petition for certiorari filed, No. 05-1335 (U.S. Apr. 14, 2006).

The Eleventh Circuit’s reasoning is consistent with prior Third Circuit precedent. Because

Plaintiffs’ own pleadings show that they are complicit in the alleged immigration predicates, cf.

Zavala, 393 F. Supp. 2d at 320, the in pari delicto defense provides yet another basis for

dismissal of the Second Amended Complaint with prejudice.

I.

PREDICATE ACTS

In their Opposition Brief, Plaintiffs assert direct money laundering predicates not alleged

in the Second Amended Complaint and resort to an extraneous and unauthenticated document in

an effort to supplement their deficient pleading. These "amendments" by argument are

improper. _See Pennsylvania ex tel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir.

1988) ("legal theories" in opposition brief"are helpful only to the extent that they find support in the allegations set forth in the complaint"); P. Schoenfeld Asset Mgmt. LLC v. Cendant Corp.,

142 F. Supp. 2d 589, 613-14 (D.N.J. 2001) (plaintiff may not amend complaint by briefs or

affidavits filed in opposition to motion to dismiss). Moreover, Plaintiffs’ opposition arguments

only underscore the fatal deficiencies of their RICO theory.

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A. Plaintiffs’ Money Laundering Predicate Fails. Having originally staked their RICO case on the alleged immigration law predicates, Plaintiffs now argue that "[mJost notably, Wal-Mart knowingly engaged in money laundering through the shell companies it had its contractors create." Opp’n at 1-2 (emphasis added). Plaintiffs’ new focus on money laundering represents a fundamental shift in their case theory. During argument on Wal-Mart’s first Motion to Dismiss, the Court asked Plaintiffs’ counsel to identify his "best predicate acts that clearly would get past this motio"nT.r...of Mot. to Dismiss Hr’g at 115:1-4, Oct. 20, 2004 ("Tr.") (relevant excerpts attached as Exhibit 1). In response, counsel identified "aiding and abetting" the harboring, transporting, and encouraging of illegal aliens. Id__ at 115:5-116:11. Counsel did not mention money laundering, much less identify it as the key offense alleged against Wal-Mart. Id__ Nonetheless, Plaintiffs now contend -- in their Opposition Brief-- that money laundering is the crux of their amended RICO claims. Opp’n at 1-2. They specifically argue that Wal-Mart "directly" violated the money laundering statute, id__ at 24-26, and that Wal-Mart "conspired" with outside contractors to launder funds, id: at 27-28. The direct money laundering arguments in Plaintiffs’ opposition papers lack, in one court’s words, an"ySUpport "in the allegations set forth in the complaint." Pennsylvania ex tel. Zimmerman, 836 F.2d at 181. But even if such money laundering offenses had been alleged in the Second Amended Complaint, they would still fail as a matter of law.
1. Plaintiffs Do Not Plead Direct Money Laundering Predicates In The Second Amended Complaint.
A "direct" money laundering offense refers to conduct that violates 18 U.S.C. § 1956(a). Plaintiffs do not plead any direct money laundering predicates against Wal-Mart in the Second Amended Complaint; rather, they attempt to plead conspiracy to commit money laundering. See

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SAC 7¶ 68, 128 (listing only conspiracy to launder funds in violation of 18 U.S.C. § 1956(h) among the RICO predicates asserted against Wal-Mart). Although the Second Amended Complaint recounts some of the direct money laundering allegations that the government levied against outside contractors in the Forfeiture Action, id. ¶7 93, 96, it does not assert any of those direct money laundering offenses as RICO predicates against Wal-Mart, id. 77 68, 128.
Notably, in their First Amended Complaint ("AC") and Revised Amended Complaint ( RA ), Plaintiffs alleged several direct (and equally baseless)money laundering offenses against Wal,Mart under 18 U.S.C. §§ 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), 1956(a)(3)(A), 1956(a)(3)(B), and 1956(a)(3)(C). See AC 7¶ 37, 67; RAC 77 37, 67. This Court dismissed each of these predicates for failure to state a claim, Zava 393 F. Supp. 2d at 315-16, and Plaintiffs do not reallege them in the Second Amended Complaint. Plaintiffs’ attempt to add direct money laundering predicates through their Opposition Brief is improper and should be rejected. See P. Schoenfeld, 142 F. Supp. 2d at 613-14.
Because Plaintiffs do not allege direct money laundering predicates against Wal-Mart, their reliance on United States v. Caruso, 948 F. Supp. 382 (D.N.J. 1996), Tilli v. Aamco Transmissions, Inc., No. 91-1058, 1992 WL 38405 (E.D. Pa. Feb. 24, 1992), and O’Keefe v. Aamco Transmissions, Inc., No. 91-2506, 1992 WL 38441 (E.D. Pa. Feb. 24, 1992) is also misplaced. In those eases, the government and plaintiffs respectively alleged that the defendants laundered funds in direct violation of 18 U.S.C. § 1956. The Second Amended Complaint, in contrast, contains no such allegations against Wal,Mart.
2. Plaintiffs Cannot Satisfy The Requisite Elements Of A Direct Money Laundering Offense Against Wal-Mart.
Even if Plaintiffs’ direct money laundering claims were properly before the Court -- and they are not --such allegations would still fail to state a viable RICO predicate. Plaintiffs do not
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identify the specific money laundering offenses that Wal-Mart allegedly committed, much less plead the elements of any such offenses. Se__9.e 18 U.S.C. § 1956(a) (listing offenses and their elements),
Nor do Plaintiffs explain how any of Wal-Mart’s conduct involved the "proceeds" of unlawful activity. To state any money laundering offense under Section 1956(a), Plaintiffs must allege that the money Wal-Mart paid to the contractors "represents the proceeds of some form of unlawful activity." Id___~. To qualify as "proceeds" under Third Circuit law, the money at issue must be the product of a completed crime. As explained by the Third Circuit, "[a]lthough the money laundering statute does not define when money becomes ’proceeds,’ it is obvious to us that proceeds are derived from an already completed offense, or a completed phase of an ongoing offense, before they can be laundered." United States v. Conley, 37 F.3d 970, 980 (3d Cir. 1994); United States. v. Omoruyi, 260 F.3d 291, 295 (3d Cir. 2001) (same); United States v. Morelli, 169 F.3d 798, 804 (3d Cir. 1999) (same). "There is nothing in the legislative history or in the case law suggesting that Congress intended to criminalize monetary transactions occurring before that money was paid to the person committing the underlying unlawful act." United States v. L_aBrunerie, 914 F. Supp. 340, 347 (W.D. Mo. 1995) (emphasis added),
Plaintiffs assert that Wal-Mart paid the contractors for the floor-cleaning services they rendered, Opp’n at 25-26. But the Second Amended Complaint contains no allegation that the money Wal-Mart paid to the contractors derived from a crime, and there is no basis for drawing any such inference. The only reasonable inference is that Wal-Mart paid the contractors out of the sales revenues it earned from running its stores. Such payments do not constitute unlawful "proceeds" under the money laundering statute as a matter of law. Conlev, 37 F.3d at 980 (money must be derived from the commission of a crime).
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Moreover, even if Wal-Mart knew that the outside contractors hired undocumented workers, as Plaintiffs wrongly allege, Wal-Mart’s floor-cleaning payments to the contractors still would not constitute unlawful proceeds. See Opp’n at 24. The alleged act of paying for an illegal service is the very antithesis of money laundering because that act does not "launder" the funds, but instead makes them "dirty." See LaBrunerie, 914 F. Supp. at 347 ("Again, the common meaning of the word ’launder’ is ’to wash,’ which obviously means to make clean. The defendant correctly points out that the acts alleged by the indictment make the money dirty, not clean."). The allegation that Wal-Mart "saved" money by contracting with companies that hired undocumented workers is equally insufficient. Saving money by violating federal wage-andhour requirements is not money laundering. See Anderson v. Smithfield Foods, Inc., 209 F. Supp. 2d 1270, 1275 (M.D. Fla. 2002) ("Saving money as a result of [alleged violations of environmental taws] does not make the money illegally obtained for the purposes of the money laundering statute."), aft’d, 353 F.3d 912 (1 lth Cir. 2003).
3. Plaintiffs Fail To Allege A Viable Money Laundering Conspiracy. Plaintiffs’ attempt to assert a money laundering conspiracy involving Wal-Mart likewise fails. A money laundering conspiracy consists of (1) an agreement to launder funds, (2) knowledge of the agreement and a deliberate decision to join the conspiracy, and (3) overt conduct in furtherance of the unlawful goal. Conlez, 37 F.3d at 976-77. Even assuming arguendo that Wal-Mart knew that the contractors intended to "launder" the payments they received, Opp’n at 23-24, such knowledge does not suffice to establish conspiracy to launder funds, cf. Zavala, 393 F. Supp. 2d at 317 (holding that Wal-Mart’s knowledge of illegal conduct could not give rise to an inference that "Wal-Mart agreed with co-conspirators to the commission, by co-conspirators and others, of RICO predicate acts, in furtherance of an unlawful enterprise"). Plaintiffs have not alleged any money laundering agreement between Wal-Mart
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and its outside contractors. Nor do they describe any overt acts that Wal-Mart undertook in furtherance of the so-called conspiracy. The allegation that a single Wal-Mart employee, nearly ten years ago, suggested that a single contractor do business through multiple companies, even if true, does not give rise to a money laundering conspiracy predicate, much less provide the basis for a nationwide conspiracy claim against Wal-Mart. Opp’n at 27-28.
And Plaintiffs are still unable to describe any financial transactions that supposedly "laundered" the floor-cleaning payments, despite this Court’s holding that they must do so in order to state a viable money laundering predicate. Zavala, 393 F. Supp. 2d at 315-16 (dismissing money laundering predicate because Plaintiffs "do not identify the relevant financial transactions or conduct by Wal-Mart, or describe more particularly the contractors’ ’money laundering activities’ that allegedly involved banks, accountants, attorneys, and others"). They instead recycle the Forfeiture Action in a futile effort to give substance to their conspiracy claim. Opp’n at 26-27; see also SAC ¶¶ 93-97, 117. This Court has already held that the money laundering allegations against the contractors in the Forfeiture Action do not state a money laundering predicate offense against Wal-Mart. Zavala, 393 F. Supp. 2d at 315-16.
Accordingly, Plaintiffs’ new-found emphasis on money laundering fails on multiple grounds and should be dismissed with prejudice.
B. Plaintiffs’ Immigration Predicates Fail. Plaintiffs cannot remedy their defective immigration predicates, so they instead suggest that "guilty pleas" entered by outside contractors to immigration offenses somehow operate as resjudicata against Wal-Mart. Opp’n at 2, 10. Resjudicata does not operate against non-parties and this contention is baseless. See General Elec. Co. v. Deutz AG, 270 F.3d 144, 158 (3d Cir. 2001). It also ignores the outcome of the federal government’s investigation of Wal-Mart’s use of outside contractors. That investigation resulted in a court-ordered Consent Decree finding
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that there was no basis to pursue criminal charges -- including the same immigration charges that Plaintiffs allege here -- against Wal-Mart. See W-M Opening Br. at Exhibits 2-4.
Moreover, as Wal-Mart’s Opening Brief showed, Plaintiffs’ immigration predicates are fatally flawed in numerous respects. W-M Opening Br. at 9-18. Plaintiffs’ Opposition Brief only confirms these problems.
1. Plaintiffs’ Conspiracy And Aiding And Abetting Theories Fail. Plaintiffs effectively concede that they cannot plead direct immigration predicates against Wal-Mart. Opp’n at 28-34. They instead try to implicate Wal-Mart under conspiracy and aiding and abetting theories. Id__ at 28-31. Neither theory is viable. To plead conspiracy to harbor, transport, or encourage illegal aliens under 8 U.S.C. § 1324(a)(1)(A)(v)(I), Plaintiffs must allege an agreement to commit those offenses and an overt act in furtherance of the unlawful goal. Zavala, 393 F. Supp. 2d at 304 n.7. Similarly, to plead aiding and abetting under 8 U.S.C. § 1324(a)(1)(A)(v)(II), Plaintiffs must allege that Wal-Mart actively participated in the illegal harboring, transporting, or encouraging through "affirmative conduct designed to aid the venture." Id__ at 304 n.6. The Second Amended Complaint alleges that outside contractors committed or pleaded guilty to various immigration offenses, but again does not allege any participation by Wal-Mart in such conduct. SAC ¶7 49-50, 67, 87-89, 92, 113 (alleging that contractors pleaded guilty to harboring and arranged housing for undocumented workers); 77 67, 87-89 (alleging that contractors transported undocumented workers); 77 87-88 (alleging that contractors encouraged undocumented workers). This Court has already held that identical allegations against outside contractors, including the government’s allegations in the Forfeiture Action, do not state immigration conspiracy or aiding and abetting predicates against Wal-Mart. Zavala, 393 F. Supp. 2d at 305-08.
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The legal arguments that Plaintiffs raise in support of their conspiracy and aiding and abetting theories also lack merit. They cite no support for their contention that Wal-Mart’s payments for floor-cleaning services constitute affirmative "participation" in the contractors’ alleged harboring, transporting, or encouraging. SAC ¶ 112. Compare Zavala, 393 F. Supp. 2d at 306 (describing conduct that might rise to the level of affirmative participation in immigration offenses). Nor do they explain how Wal-Mart’s alleged requests for replacement floor-cleaning crews amount to an act in furtherance of any illegal immigration activity. SAC ¶¶ 114-116. Even assuming arguendo that Wal-Mart knew that, in response to requests for new crews, contractors "would, and did, cause undocumented migrants to be transported across state lines to the Wal-Mart stores," Opp’n at 30, such knowledge cannot support a conspiracy or aiding and abetting predicate. Moving illegal aliens from one location to a place of employment does not constitute illegal transporting, harboring or encouraging as a matter of law. Zavala, 393 F. Supp. 2d at 305.
Finally, Plaintiffs’ assertion that, nearly ten years ago, a Wal-Mart employee suggested that a single contractor use multiple companies to avoid being disqualified from doing business with Wal-Mart does not state a predicate for conspiracy to harbor, or aiding and abetting the harboring of, illegal aliens. Opp’n at 31. Even if this alleged conversation occurred, Plaintiffs still have not alleged that Wal-Mart actively helped conceal illegal workers from law enforcement. Zavala, 393 F. Supp. 2d at 307.
2. Plaintiffs’ Harboring Predicate Fails. Plaintiffs do not even discuss the direct "transporting" and "encouraging" predicates they reallege against Wal-Mart in the Second Amended Complaint. See Opp’n at 28-34. They instead focus exclusively on their direct "harboring" predicate under 18 U.S.C. § 1324(a)(1)(A)(iii), tacitly conceding that their other immigration predicates are untenable.
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Plaintiffs wrongly attempt to cure their deficient harboring allegations by introducing extrinsic "evidence"; namely, a purported invoice from an outside contractor to Wal-Mart supposedly showing that the contractor billed Wal-Mart for temporary "crew accommodations" due to a change in the crew’s "start date." Decl. of James L. Linsey at Ex. B; Opp’n at 33. This attempt to supplement the Second Amended Complaint should not only be rejected as improper, Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir.) (reversing where district court improperly took notice of extrinsic document), cert. denied, 543 U.S. 918 (2004), but also underscores Plaintiffs’ misunderstanding of the harboring offense they allege. There is no allegation that the crew at issue consisted of undocumented workers, or that Wal-Mart paid to house these workers in order to hide them from law enforcement authorities. To the contrary, Plaintiffs’ own document shows that Wal-Mart allegedly paid for temporary accommodations because the crew’s start day was postponed -- not to conceal them from detection. Opp’n at 33. Thus, even giving Plaintiffs the benefit of all reasonable inferences, this nearly seven-year old invoice provides no support for a harboring predicate. (Of course, Plaintiffs are not entitled to draw any inferences from this document because it is not properly before the Court. L_um, 361 F.3d at 221 n.3.)
Finally, Plaintiffs do not and cannot allege that Wal-Mart allowed a crew of"Bulgarian janitors" in Kansas City to "reside" in the store for the purpose of hiding them from federal authorities. Opp’n at 33. The most that can be inferred is that individual crew members stored items and occasionally slept in a backroom between shifts, in plain sight. SAC Ex. E at 86. These facts do not rise to the level of harboring, cf. Zavala, 393 F. Supp. 2d at 307, and distinguish this case from United States v. Zheng, 306 F.3d 1080 (1 lth Cir. 2002) and United States v. Singh, 261 F.3d 530 (Sth Cir. 2001). In both of those cases, the illegal aliens resided
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and worked full time on the defendant’s premises in hiding. See Zavala, 393 F. Supp. 2d at 307 (distinguishing Plaintiffs’ deficient harboring allegations from allegations in Zheng and Sinzh). Here, all of the Wal-Mart stores were open to the public and many Plaintiffs, by their own account, worked in plain sight of shoppers -, and even immigration enforcement officials -- in stores that were open 24 hours a day, seven days a week. See SAC ¶7 21-22; id. Ex E at 31-37.
C. Plaintiffs’ Involuntary Servitude Predicate Fails. The Second Amended Complaint reasserts, virtually verbatim, the defective involuntary servitude allegations that this Court previously dismissed. SAC 77 118-120. Plaintiffs again admit that this case is about alleged unpaid overtime -- not slavery. See Opp’n at 2-3. Plaintiffs have not identified a single new allegation in support of their claim, but instead simply reargue the exact same points this Court already rejected. Compare Opp’n at 34-36 (arguing that threats of deportation and alleged physical abuse constitute involuntary servitude), with Zavala, 393 F. Supp. 2d at 309-11 (dismissing involuntary servitude predicate based on alleged threats of deportation and vague abuse allegations). Plaintiffs’ recycled allegations that economic pressure -- such as alleged threats of eviction -- amount to involuntary servitude still fail as a matter of law. United States v. Kozminski, 487 U.S. 931,952 (1988) (requiting compulsory labor through physical restraint, law, or legal process); Kavene¥ v. Miller, No. 93-0128, 1993 WL 298718, at *2 (E.D. Pa. July 30, 1993) (economic pressure does not suffice). As do Plaintiffs’ recycled "lock-in" allegations: By Plaintiffs’ own admission, crew members joined and left crews of their own volition. SAC 77 21-22, 102; see also W-M Opening Br. at 21. And there is no allegation that Plaintiffs were ever forced to come to work against their will, or that they were physically restrained from leaving "locked" stores if they requested or otherwise attempted to do so. See SAC 77 118-120.
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Finally, as this Court held, alleged threats of deportation if they exited a "locked" store are "insufficient." Zavala, 393 F. Supp. 2d at 311.
Plaintiffs’ near-verbatim reiteration of these allegations is, as the Second Circuit warned, a blatant attempt to use the involuntary servitude statute as a "tool for blackmail and other serious abuse." United States v. Shackney, 333 F.2d 475, 487 (2d Cir. 1964). This predicate should be dismissed with prejudice, and Plaintiffs should be sanctioned for reasserting it. II. STANDING
A. Plaintiffs Cannot Plead Proximate Causation And, Therefore, They Lack Standing to Pursue RICO Claims Against Wal-Mart.
Plaintiffs must plead both "but for" and "proximate" causation to establish RICO standing. See Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 265-70 (1992). The proximate cause requirement is "interpreted narrowly" in RICO cases. Eli Lilly & Co. v. Roussel Corp., 23 F. Supp. 2d 460, 483 0).N.J. 1998).
Plaintiffs’ Opposition only confirms that they lack standing to pt~sue RICO claims against Wal-Mart. They have again admitted that the only harm alleged in this case is the denial of overtime compensation and, in some instances, minimum wage: "The predicate acts of racketeering were intended to and did result in Wal-Mart’s janitors being underpaid - denied overtime and (in come cases) minimum wage (or, at times, any wages at all), denied workmen’s compensation and denied other employment benefits," Opp’n at 2-3. These injuries flow, if at all, from non-compliance with the Fair Labor Standards Act, and not directly and proximately from any of the predicate acts alleged against Wal-Mart. Moreover, Plaintiffs’ suggestion that they were denied workmen’s compensation and other employee benefits is yet another improper attempt to expand their pleading by argument. Plaintiffs have not alleged, and could not allege, a claim to recover these benefits from Wal-Mart. See SAC ¶¶ 145-150.
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Tellingly, Plaintiffs do not cite a single case for the proposition that a party has standing to sue under RICO to recover for FLSA violations. Nor could they. Courts have repeatedly recognized that FLSA violations are not predicate acts of racketeering under RICO. Se___~e Livingston v. Shore Slm-rv Seall Inc., 98 F. Supp. 2d 594, 600 (D,N.J. 2000); Commercial Cleaning Servs., L.L.C. v, Colin Serv. Sys., Inc., 271 F.3d 374, 383 (2d Cir. 2001); Danielsen v. Burnside-Ott Aviation Training Ctr., Inc., 941 F.2d 1220, 1228-29 (D.C. Cir. 1991). Thus, the FLSA violations alleged in this case cannot bestow RICO standing as a matter of law.
The cases that Plaintiffs do cite are inapposite because they all involve legal workers and businesses that allegedly suffered direct harm from an employer’s hiring of undocumented workers. Se____qe, ~ Commercial Cleaning, 271 F.3d at 383 (legal business); Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1170 (9th Cir. 2002) (legal workers); Williams v. Mohawk Indus., 411 F.3d 1252 (1 lth Cir.) (legal workers), cert. granted in p__~_, 126 S. Ct. 830 (2005); Trollinger v, Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) (legal workers). Here, in contrast, Plaintiffs not only admit in their pleadings that they are undocumented, but also fail to allege an illegal hiring predicate offense against Wal-Mart.
In their Amended and Revised Amended Complaints, Plaintiffs unsuccessfully attempted to assert an illegal hiring predicate under 8 U.S.C. § 1324(a)(3)(A). Se.__.&e RAC ¶¶ 37, 67. The Court dismissed the hiring predicate for failure to state a claim, Zava 393 F. Supp. 2d at 30809, and Plaintiffs do not reassert that offense in the Second Amended Complaint, see SAC ¶¶ 68, 128. This omission is critical because illegal hiring under Section 1324(a)(3)(A) is the only RICO predicate that even remotely resembles the offenses that conferred standing on legal workers and businesses in the cases Plaintiffs cite. Moreover, nothing in those cases suggests that undocumented workers would have RICO standing to seek redress for alleged FLSA
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violations. To the contrary, in Commercial Cleaning, the Second Circuit expressly recognized that FLSA violations are not RICO predicates. 271 F.3d at 383. And the Ninth Circuit in Mendoza recognized the inherent contradiction of finding that undocumented workers have standing to enforce the very immigration laws they violated. 301 F.3d at 1170 (observing that illegal aliens could not be "’counted on to bring suit for the law’s vindication’") (citation omitted).
Plaintiffs also overstate the holding in Choimbol v. Fairfield Resorts, Inc., No. 05-463, 2006 WL 521763 (E.D. Va. Mar. 2, 2006). They claim that the Choimbol plaintiffs were "undocumented migrant labor[ers]" or "undocumented janitors." Opp’n at 25, 39. In fact, the court’s opinion only states that the plaintiffs were immigrant laborers provided by regional and national recruiters. Choimbol, 2006 WL 521763, at * 1. Nothing in the opinion suggests that the Choimbol plaintiffs entered this country illegally, overstayed their visas, or worked without proper authorization. Instead, the opinion refers to the provision of laborers under the "H2b Visa Program," which expressly permits domestic employers to hire temporary foreign workers. Id__ at ¯ 2. The court never even considered whether undocumented workers, who are complicit in the misconduct they allege, have standing to pursue RICO claims.
And unlike Wal-Mart, the defendant in Choimbol did not move to dismiss for lack of standing. Id__ at *4 (defendant moved to dismiss for failure to plead (1) viable predicate acts of racketeering, (2) fraud with particularity, and (3) a pattern of racketeering activity). While the Choimbol court briefly discussed RICO standing principles, its analysis was cursory and is dicta. Id__ at *6. In all events, the discussion is irrelevant: The Choimbol court did not consider whether (much less find that) the plaintiffs’ injuries were proximately caused by the alleged money laundering activity. Id__ The court merely determined that the plaintiffs were harmed by
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mail and wire fraud offenses, id___~. -- predicate offenses that Plaintiffs do not allege in the Second Amended Complaint, SAC ¶¶ 68, 128. Plaintiffs tried to allege mail and wire fraud in their Amended and Revised Amended Complaints, see AC ¶ 67; RAC ¶ 67, but this Court dismissed those predicates for lack of particularity, Zaval___.__~a, 393 F. Supp. 2d at 313-14. Plaintiffs did not even attempt to reassert such claims in the Second Amended Complaint. See SAC ¶¶ 68, 128. Finally, the bare bones money laundering allegations approved in Choimbol would never pass muster in the Third Circuit, as this Court’s prior opinion makes clear. Zavala, 393 F. Supp. 2d at 315-16 (rejecting vague and conclusory money laundering allegations that merely parroted the statutory language).
B. Plaintiffs’ Own Conduct Broke The Causal Chain. As Wal-Mart demonstrated in its Opening Brief, Plaintiffs voluntarily participated in and benefited from the predicate offenses that they allege against Wal-Mart. W-M Opening Br. at 29-30. Because Plaintiffs are complicit in the alleged RICO offenses, and could have avoided their purported harm by choosing not to break the law, their own conduct severed the "but for" causal chain alleged in the Second Amended Complaint. Id__~. Plaintiffs try to overcome this problem by asserting that the in pari delicto defense is not available in RICO cases. Opp’n at 3, 40-42. Plaintiffs are again wrong on the law. As the Eleventh Circuit recently confirmed, the in pari delicto defense is available because it advances the purposes underlying RICO. See Edwards, 437 F.3d at 1149-56. In Edwards, the Eleventh Circuit applied the Supreme Court’s two-factor test to determine whether in pari delicto should apply in RICO cases. Id_._~. at 1154-55. That test looks at (1) the plaintiffs’ active participation in the alleged violation, and (2) the policy goals underlying the federal statute at issue. Id__~. The Supreme Court articulated these factors in the antitrust and securities law contexts. See Perma Life Mufflers, Inc. v. Int’l Parts Corp., 392 U.S. 134 (1968); Bateman Eichler, Hill Richards, Inc.
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v. Bemer, 472 U.S. 299 (1985); see also Pinter v. Dahl, 486 U.S. 622, 632-33 (1988). On the facts ofBateman Eichler and Perma Life, the Supreme Court held that in pari delicto did not apply; however, the Court expressly acknowledged that the defense might be available under different factual circumstances and in other contexts. Perma Life, 392 U.S. at 140 (holding that defense did not apply because defendants were passive antitrust violators, but reserving judgment as to whether greater involvement in violation might bar claim); Bateman Eichler, 472 U.S. at 308-09 (holding that defense did not apply because defendants were not active participants in securities law violation, but recognizing that defenses based on plaintiff’s fault should be applied in appropriate cases). Thus, contrary to Plaintiffs’ suggestion, the Supreme Court did not "eliminate[] in pari delicto as a defense to antitrust actions a generation ago," Opp’n at 40-41 n.56, and the Court has never suggested that the defense should be unavailable in RICO cases. As the Eleventh Circuit explained in Edwards, the Supreme Court’s precedents actually favor application of the defense in RICO actions to prevent complicit parties from abusing the statute. Edwards, 437 F.3d at 1154-56.
In particular, applying the first factor, the Eleventh Circuit found that the plaintiff’s own allegations in Edwards showed that the plaintiff actively participated in the alleged misconduct. Id__ at 1155. The same is true here. This Court has already held that "Plaintiffs’ status as ’recent immigrants’ or as ’undocumented workers,’ and the concomitant political and social isolation that they encounter is, at least in part, the result of their own voluntary conduct. While they now may not be able to regularize their status, such that their undocumented status is immutable, this is traceable to their decision, at the outset, to enter and remain unlawfully in the United States." Zavala, 393 F. Supp. 2d at 320 (emphasis original); see also Pl¥1er v. Doe, 457 U.S. 202, 219-20 (1982) (holding that entry into class of undocumented aliens is itself a crime). The Second
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Amended Complaint and its attachments again show that Plaintiffs are complicit in the immigration and money laundering predicates they allege because they admittedly entered this country illegally or unlawfully overstayed their visas, worked without authorization, and knowingly accepted "laundered" payments from their contractors. SAC ¶¶ 7-28, 78-98, Ex. A at 18-19, Ex. E at 43-44, Tr. at 99:16-22. Accordingly, the first factor weighs in favor of applying the in pari delicto defense. See Edwards, 437 F.3d at 1155 (plaintiff’s participation in misconduct favored application of in pari delicto).
Applying the second factor in Edwards, the Eleventh Circuit held that the policies underlying RICO likewise weigh in favor of recognizing the in pari delicto defense. Id._ The court explained that "[i]t would be anomalous, to say the least, for the RICO statute to make racketeering unlawful in one provision, yet award the violator with treble damages in another provision of the same statute." Id__ "Congress intended RICO’s civil remedies to help eradicate ’organized crime from the social fabric’ by divesting ’the association of the fruits of ill-gotten gains.’" Id._ (quoting Genty v. Resolution Trust Corp., 937 F.2d 899, 910 (3d Cir. 1991) (quoting United States v. Turkette, 452 U.S. 576, 585 (1981)); see also 116 Cong. Rec. H35346-47 (Oct. 7, 1970) (statements of Rep. Steiger) (explaining that RICO’s purpose is ’:to see that innocent parties who are the victims of organized crime have a right to obtain proper redress") (emphasis added). Allowing a complicit party to recover under RICO "would not divest RICO violators of their ill-gotten gains; it would result in a wealth transfer among similarly situated conspirators." Edwards, 437 F.3d at 1155. Accordingly, the Eleventh Circuit held that policy considerations favored application of the in pari delicto defense in RICO cases. Id__ at 1156.
The Eleventh Circuit’s policy analysis applies with extra force in this case because allowing Plaintiffs to bring RICO claims would not only undermine the RICO statute, but would
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also subvert the Immigration Reform and Control Act ("IRCA"). IRCA reflects a federal , immigration policy that prohibits illegal aliens from obtaining legal employment in the United States. Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 148 (2002). Civil remedies that would undermine INCA are not available to undocumented workers. Id__ at 151-52 (holding that illegal aliens cannot recover back pay for unlawful termination because such a remedy "would unduly trench upon explicit statutory prohibitions critical to federal immigration policy, as express in IRCA"). Thus, under ttoffman, any remedy that would affirmatively encourage illegal aliens to seek unlawful employment in the United States is prohibited. Id__ at 150-51.
Allowing undocumented workers to seek treble damages under RICO, based on alleged unlawful conduct that they participated in, would undermine INCA and run afoul of Hoffrnan by creating a financial incentive for such individuals to seek unlawful employment in the United ¯States. The prospect of an enhanced recovery against their employer -- above and beyond whatever remedies may be available under the FLSA -- would only encourage undocumented workers to risk working in this country unlawfully, secure in the knowledge that, if apprehended, they will be able to sue for treble damages under RICO. Id__ at 151-52. In contrast, denying undocumented workers the ability to sue under RICO "does not mean that the employer gets off scot-free." I& at 152. To the contrary, as the Supreme Court recognized, the employer still faces the prospect of sanctions and "traditional remedies" under applicable federal laws. Id__ Therefore, in this case -- as in Edwards -- the policy factor weighs heavily in favor of applying the inpari delicto defense. 437 F.3d at 1155.
The Eleventh Circuit’s reasoning in Edwards is consonant with Third Circuit precedent. In Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d Cir. 2000), for example, the Third Circuit held that a plaintiff who voluntarily engages in misconduct that results in the
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claimed injury lacks standing to pursue RICO claims because the harm is "self-inflicted." Id__ at 188. Although the Third Circuit did not use the terms in pari delicto, the principle underlying the court’s decision is exactly the same: a culpable party cannot sue under RICO for alleged acts in which the party is complicit. See also_ Northeast Women’s Cir., Inc. v. McMonagle, 868 F.2d 1342, 1353-55 (3d Cir. 1989) (analyzing "unclean hands" doctrine in RICO case, but finding that the facts did not warrant its application); Shulton, Inc. v. Optel Corp., No. 85-2925, 1986 WL 15617, at "80-’81 (D.N.J. Sept. 29, 1986) (holding that inpari delicto may apply to RICO claims under two-factor test articulated in Bateman Eichler). This Court has already recognized that Plaintiffs could have avoided the harm they decry by choosing not to enter, remain and work in this country illegally. Zavala 393 F. Supp. 2d at 320. Having voluntarily chosen to break the law, they are complicit in the alleged offenses and thus lack RICO standing.
Courts outside the Third Circuit have likewise applied the in pari delicto defense in RICO cases. See Banco Industrial de Venezuela, C.A.v. Credit Suisse, 99 F.3d 1045, 1048-50 (1 lth Cir. 1996) (upholding determination that the in pari delicto defense applied to RICO claims); Nasr v. Gearg, No. 94-8288, 2003 U.S. Dist. LEXIS 13887, at *74 (C.D. Cal. June 9, 2003) (RICO claims barred by the in pari delicto doctrine); see also In re MasterCard Int’l Inc., 313 F.3d 257, 264 (5th Cir. 2002) (no RICO standing where plaintiffs knowingly and voluntarily engage in conduct that caused harm); Sikes v. Teleline, Inc., 281 F.3d 1350, 1366 n.41 (1 lth Cir. 2002) (unclean hands may be a defense in RICO cases); Green v. Aztar Corp., No. 02-3514, 2003 WL 22012205, at *3 ~.D. Ill. Aug. 22, 2003) (plaintiffs’ voluntary participation in RICO activities that caused harm severed the causal chain). Plaintiffs either do not cite or make no serious attempt to distinguish any of these precedents. In marked contrast, the Eleventh Circuit
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in Edwards distinguished the in pari delicto cases that Plaintiffs cite in their Opposition.
Compare Opp’n at 40-41 n.56, with Edwards, 437 F.3d at 1155-56.
Because the allegations in the Second Amended Complaint establish that the in pari
delicto doctrine applies here, Plaintiffs’ amended RICO claims should be dismissed with
prejudice on this additional ground.
C. Plaintiffs Ignore The Third Circuit’s Steamfitters Test. Plaintiffs have not even attempted to rebut Wal-Mart’s argument that they lack standing
under the test the Third Circuit articulated in Steamfitters Local Union No. 420 Welfare Fund v.
Philip Morris, Inc., 171 F.3d 912, 924 (3d Cir. 1999). W-M Opening Br. at 30-33. This
omission is telling because the .Steamfitters factors further confirm that Plaintiffs lack RICO
standing:
The alleged causal connection is, as shown, too remote. Plaintiffs’ injuries stem, if at all, from non-compliance with the FLSA, a non-predicate statute; moreover, Plaintiffs’ own conduct severed whatever causal link may have existed. ¯ Wal-Mart’s intention was, by Plaintiffs’ own admission, to lower cleaning costs, SAC ¶¶ 29, 52, and not to harm any specific crew member.
The only claimed injury in this case is alleged wage underpayment, Opp’n at 2-3, which is at most violation of the FLSA. The FLSA is not a RICO predicate statute and Plaintiffs’ alleged harm is not the kind that Congress intended to be covered under RICO. ¯ Mechanisms other than RICO exist principally to redress wage-and-hour injuries, including private FLSA litigation and state and federal DOL enforcement mechanisms.
The damages in this case are speculative for standing purposes because Plaintiffs’ claims would require the trier-of-fact to allocate damages between the non-party contractors that employed Plaintiffs, Wal-Mart, and Plaintiffs, who chose to enter and remain in this country illegally and to work without proper authorization.
The speculative nature of Plaintiffs’ damages increases the complexity of this case, which is already judicially unmanageable given the disparate and fact-specific nature of the FLSA issues in question. Moreover, because the parties most directly responsible for Plaintiffs’ alleged wage harm -- the contractors who employed them -- are not present in this case, there is a substantial risk of duplicative litigation and inconsistent outcomes.
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See Anderson v. Ayling, 396 F.3d 265,270-72 (3d Cir. 2005) (affirming dismissal of RICO claims with prejudice for failure to establish standing under Steamfitters factors). III. ENTERPRISE AND CONTROL
A. Plaintiffs Fail To Allege A Distinct RICO Enterprise. Plaintiffs continue to misapprehend the enterprise element of RICO. They allege an "enterprise" consisting of an association-in-fact between Wal’Mart and outside floor-cleaning contractors functioning as Wal-Ma~’s "agents." SAC ¶ 41. The Seventh Circuit rejected an identical enterprise theory in Baker v. IBP, Inc., 357 F.3d 685, 691-92 (7th Cir. 2004), holding that an employer-defendant and its alleged recruiter-agents could not form a distinct and cognizable enterprise. See also W-M Opening Br. at 34-35 (discussing distinctiveness requirement). Recognizing that their "agency" enterprise theory is fatally flawed, Plaintiffs again attempt to amend their pleading through argument. They assert in their Opposition Brief that each contractor is "undeniably a separate corporate entity, legally distinct from the enterprise." Opp’n at 15. While this is a true statement, it is also a non sequitur. Plaintiffs have consistently pleaded that the independent contractors acted as Wal-Mart’s agents, SAC ¶ 41, RAC ¶¶ 3 l(d), 36, AC ¶¶ 31 (d), 36, which, as the Seventh Circuit correctly observed, is a I~CO enterprise theory that "won’t fly," Bake.___rr, 357 F.3d at 691. Plaintiffs’ reliance on Ced~c Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) is also misplaced. Opp’n at 14-16. The defendant in King was the president and sole shareholder of a closely held corporation. 533 U.S. at 160. He allegedly conducted the corporation’s affairs through a pattern of racketeering. In other words, he infiltrated and dominated the corporation’s affairs in the way that RICO is designed to prevent. The Supreme Court held that the association of two distinct entities -- person and corporation -- constituted a viable enterprise. Id__~. at 166.
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Here, unlike in __~gg, Plaintiffs do not and cannot allege that anyone has infiltrated Wal-Mart or that Wal-Mart has infiltrated its contractors. To the contrary, Plaintiffs have admitted that WalMart did not take over its contractors. Opp’n at 15. Instead, they allege that the contractors acted as Wal-Mart’s agents, which is tantamount to saying that Wal-Mart operated itself illegally through the conduct of contractor-agents. This is precisely the fact pattern rejected in _Baker. 357 F.3d at 691. And in Kinz the Supreme Court expressly noted that its holding did not expand R/CO liability to corporate defendants for the acts of agents under ordinary respondeat superior principles. 533 U.S. at 166.
B. Plaintiffs Fail To Allege A Common Purpose. Plaintiffs’ enterprise theory is also flawed because, as their own pleadings show, WalMart and the contractors that make up the so-called enterprise lack a "common purpose." See W-M Opening Br. at 35,36. Plaintiffs first attempt to avoid dismissal on this ground by arguing that the Third Circuit has not recognized a common purpose requirement. Opp’n at 18. In fact, the Third Circuit has long required that RICO enterprise allegations establish a common purpose. See Averbach v. Rival Mfg. Co., 879 F.2d 1196, 1198 (3d Cir. 1989) ("On appeal, this court affirmed the dismissal of the RICO claim, holding that Averbach could not claim that the court system was an enterprise for purposes of RICO because the court personnel and litigants lacked a common purpose.") (citing Averbach v. Rival Mfg. Co., 809 F.2d 1016, 1018-20 (3d Cir. 1987)). Plaintiffs next argue that the Second Amended Complaint satisfies the common propose requirement because "both [Wal-Mart] and the contractors shared the mutual goal of profiting off the labor of the undocumented j anitors." Opp’n at 18-19 (citing SAC ¶¶ 41-42). This assertion not only fails as a matter of law, but is also negated by Plaintiffs’ own pleadings. A broad statement that members of an illegal enterprise share a general goal of making money does not satisfy the common purpose requirement. Se.___9.e Starfish Inv. Corp. v. Hansen, 370 F, Supp. 2d
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759, 771 (N.D. I11. 2005). Moreover, the Second Amended Complaint and its attachments show that Wal-Mart and its contractors had conflicting economic goals: Wal-Mart sought to reduce its floor-cleaning costs, while the contractors wanted to maximize their profits by charging WalMart the highest possible rate for such services. See, e._~., SAC ¶¶ 29, 52, 106, Ex. A at 42-43, Ex. E at 63. Even Plaintiffs’ so-called "star" informant openly complained about Wal-Mart’s constant demands for lower prices and other concessions. Id___~. Ex. A at 43. These conflicting interests preclude a fi"nding"of comnmo purspeo". See Baker, 357 F.3d at 691-92 (divergent economic goals between employer-defendant and recruiter-agents precluded finding of common purpose); Banco Del Atlantico, S.A.v. Stauder, No. 03-1342, 2005 WL 1925830, at *9 (S.D. Ind. Aug. 11, 2005) (no enterprise because constituents had diverging economic interests); Starfish, 370 F. Supp. 2d at 771 (no enterprise because each constituent was out to promote its own economic interests).
Plaintiffs next wrongly argue that the obvious "self-interest" of the members of the alleged enterprise is "immaterial to the common purpose of the enterprise: exploiting undocumented labor for profit." Opp’n at 20 n.42. They mistakenly cite Emcore Corp. v. PricewaterhouseCoopers LLP, 102 F. Supp. 2d 237, 263-64 (D.N.J. 2000) for this proposition. The court in Emcore rejected the argument that the defendants’ "inherently contradictory goals" negated the existence of a RICO enterprise. Id._~. at 264. But the court did not find that there is no common purpose requirement. Rather, the court rejected the defendants’ common purpose argument there because it was based on "superseded pleadings" and non’binding case law. Id_:. Here, in contrast, Plaintiffs’ own amended RICO pleadings again show that Wai-Mart and its contractors did not share the requisite common purpose. The controlling Third Circuit precedent
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thus mandates dismissal of Plaintiffs’ enterprise claim. Se___~e Averbach, 879 F.2d at 1198 (citing Averbach, 809 F.2d at 1018-20).
C. Plaintiffs Fail To Allege That Wal-Mart Controlled The Enterprise. Plaintiffs contend that Wal-Mart was the "kingpin" of the alleged enterprise because it selected the contractors with whom it did business, controlled the terms of floor,cleaning contracts, made payments for floor-cleaning services, and profited from the contractors’ use of undocumented workers. Opp’n at 21.22 (citing SAC ¶¶ 44, 47, 48, 52, 62, 63, 67, 94). Plaintiffs fi~her argue that because a single Wal’Mart employee suggested that a single contractor do business through multiple companies, nearly ten years ago, Wal-Mart somehow controlled the purported enterprise. Id. None of these allegations satisfies the "control", element of a RICO enterprise claim. To satisfy this element, Plaintiffs must allege that Wal-Mart conducted the enterprise’s affairs by directing the racketeering activity itself. See University of Md. at Baltimore v. Peat Marwick, Main & Co., 996 F.2d 1534, 1538-39 (3d Cir. 1993). The Second Amended Complaint does not allege that Wal,Mart directed any of the predicate acts of racketeering. At most, Plaintiffs suggest that Wal,Mart created the opportunity for the contractors’ actions by awarding floorcleaning contracts and then benefited from those actions by obtaining a service at below market price. The Third Circuit has held that condoning and benefiting from RICO violations does not constitute sufficient control of the enterprise’s affairs. Id__= Accordingly, the Second Amended Complaint fails on this additional independent ground, as well. IV. RICO CONSPIRACY In their Opposition Brief, Plaintiffs assert that "Wal-Mart does not contest that plaintiffs have sufficiently cured their RICO conspiracy pleading deficiencies." Opp’n at 44. That assertion is false. Wal-Mart has shown that Plaintiffs’ RICO conspiracy claim fails and should
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be dismissed with prejudice because Plaintiffs (1) fail to plead a viable enterprise claim, (2) fail to plead the conspiracy with specificity, and (3) lack standing to pursue a RICO conspiracy claim. W-M Opening Br. at 38-39.
"Any claim under section 1962(d) based on a conspiracy to violate the other subsections of section 1962 necessarily must fail if the substantive claims are themselves deficient." Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1191 (3d Cir. 1993). As Wal-Mart has demonstrated, Plaintiffs’ underlying RICO enterprise claim is deficient and must be dismissed. As such, Plaintiffs’ RICO conspiracy claim is untenable. It would constitute legal error to hold (as Plaintiffs urge this Court to do) that Wal-Mart violated RICO by conspiring to commit alleged acts which, as shown, do not constitute predicate acts of racketeering and do not violate RICO’s enterprise provision. See Lum, 361 F.3d at 227 n.5 (affirming dismissal of§ 1962(d) conspiracy claim where plaintiff failed to plead a viable § 1962(c) enterprise claim).
Moreover, Plaintiffs have not pleaded the alleged conspiracy with the requisite level of specificity. As this Court previously held, although Plaintiffs allege that Wal-Mart knew of and benefited from the contractors’ illegal conduct, they have still "not alleged other than in conclusory fashion, adequate facts for this Court to reasonably infer that Wal-Mart agreed with co-conspirators to the commission, by co-conspirators and others, of RICO predicates, in furtherance of an unlawful enterprise." Zavala, 393 F. Supp. 2d at 317 (emphasis added).
Finally, Plaintiffs lack standing to pursue their RICO conspiracy claim because the only alleged harm, by their own admission, is the purported denial of overtime compensation and, in some instances, minimum wage. Opp’n at 2-3. These injuries arose, if at all, from noncompliance with the FLSA, a non-predicate statute. The Supreme Court has definitively ruled that, in such cases, "a person may not bring suit under § 1964(c) predicated on a violation of
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§ 1962(d) for injuries caused by an overt act that is not an act of racketeering or otherwise unlawful under the statute." Beck v. Prupis, 529 U.S. 494, 507 (2000). Therefore, Plaintiffs’ allegation that Wal-Mart and its contractors conspired to engage in a scheme that was "intended to and did result in Wal-Mart’s janitors being underpaid," Opp’n at 2, does not and cannot confer standing to pursue a RICO conspiracy claim as a matter of law, Beck, 529 U.S. at 507.
CONCLUSION Plaintiffs cannot allege viable predicate acts of racketeering, establish standing to sue or plead the requisite elements of a RICO enterprise and conspiracy. Their Second Amended Complaint is largely redundant of their prior rejected RICO pleading and only confirms that this is not a proper RICO action. Granting Plaintiffs leave to re-plead their RICO claims would be a futile exercise and only further burden the Court and Wal-Mart with needless motion practice. The Third Circuit recently confirmed that dismissal with prejudice is appropriate under such circumstances. In Anderson, 396 F.3d at 270-72, the Third Circuit upheld dismissal of RICO claims with prejudice for lack of standing, holding that the claimed injury -- wrongful termination of employment -- was not directly caused by the alleged RICO predicate acts. Id__ Because the alleged RICO predicate acts were too remote from the claimed injury, the Third Circuit also held that it would be futile to grant plaintiffs leave to amend. Id__ at 271-72. As in Anderson, Plaintiffs’ only claimed injury here -- the purported denial of minimum wage or overtime compensation -- was not directly and proximately caused by any RICO predicate acts alleged against Wal-Mart. Such injury arose, if at all, as a result of contractor non-compliance with the FLSA -- a non-predicate statute. Moreover, even assuming Plaintiffs could ever allege viable immigration and money laundering offenses against Wal-Mart, such claims would be "too attenuated" to have caused Plaintiffs’ alleged wage injuries. And, in all events, Plaintiffs would
-26.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 32 of 38
have participated in and benefited from such predicate acts, severing any possible causal link.
Thus, the grounds for dismissing Plaintiffs’ amended RJCO claims with prejudice are even
stronger here than in Anderson.
For all of these reasons, Wal,Mart respectfully requests that the Court dismiss with
prejudice Counts One and Two of Plaintiffs’ Second Amended Complaint.
Dated: May 5, 2006
Respectfully submitted,
REED SMITH LLP A Limited Liability Partnership formed in the State of Delaware One Riverfront Plaza, First Floor Newark, NJ 07102-5400 Tele: (973) 621-3200 Fax: (973) 621-3199 Attomeys for Defendant Wal-Mart Stores, Inc.
By:. /s/Robert H. Bemstein ROBERT H. BERNSTEIN A Member of the Firm
Of Counsel:
David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street N,W. Washington, D.C. 20006-1238 Tele: (202) 303-1000 Fax: (202) 303-2000 Attorneys for Defendant Wal-Mart Stores, Inc.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 33 of 38 EXHIBIT 1

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 34 of 38

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CIVIL ACTION NO. 03-5309

VICTOR ZAVALA; ARTURO ZAVALA;

:

EUNICE GOMEZ; MAXIMILIANO

:

MENDEZ; CARLOS ALBERTO TELLO; :

ANTONIO FLORES; HIPOLITO

:

PALACIOS; OCTAVIO DENISIO;

:

MARTIN MACAK; PAVEL KUNC; HANA :

PFAUSEROVA; JIRI PFAUSER; TERESA:

JAROS; PETR ZEDNEK;.DANIEL

:

ANTONIO CRUZ; LUIS GUTIERREZ;

:

FILIPE CONDADO; ROLANDO ROMERO; :

ADIEL ROMERO RUIZ, on behalf of :

themselves and all other

simularly situated,

TRANSCRIPT OF PROCEEDINGS MOTION

Plaintiffs, v.

WAL-MART CORPORATION,

Defendant.

BEFORE:

Newark, New Jersey October 20, 2004
THE HONORABLE JOSEPH A. GREENAWAY, JR., U.S.D.J.

Pursuant to Section 753 Title 28 United States Code, the followiag transcript is certified ~o be an accurate record as taken st~ng~r~hically in the a~ ent~q~d procegdings.
THOMAS F. BRAZAITI~, C.S.R., O~ficf~’~durt P~orte~

THOMAS F. BRAZAITIS,

CSR, OFFICIAL COURT REPORTER,-NEWARK, N.J.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 35 of 38 2

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25

APPEARANCES:
LOUGHLIN & LATIMER BY: MICHAELENE LOUGHLIN, ESQ.
-AND-
GARCIA &KRICKO BY: MARY ANNE KRICKO, ESQ.
-AND-
COHEN, WEISS & SIMON BY: JAMES L. LINSEY, ESQ.
THOMAS CIANTRA, ESQ. ORIANA VIGLIOTTI, ESQ. Attorneys for the Plaintiffs
EPSTEIN, BECKER & GREEN BY: ROBERT H. BERNSTEIN, ESQ.
-AND-
WILLKIE, FARR & GALLAGHER BY: RANDY BRANITSKY, ESQ.
DAVID MURRAY, ESQ. Attorneys for the Defendant

THOMAS F. BRAZAITIS, CSR, OFFICIAL COURT REPORTER, NEWARK, N.J.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 36 of 38 99

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25

And all we have to show is that Wal-Mart, through its conduct, aided and abetted the contractors in doing these things that they’re accussed of in a verified, sworn complaint by federal and state government officials.
Now, we not only believe that we can obviously show that they aided and abetted all of these charges, but they, in fact, committed them themselves, and that’s what we charged them with in the complaint.
Now, counsel also said -- and focusing for a second on the hirin~ of i0 or more undocumented workers, counsel is correct, he’s correct in the -- in his reference to the Second Circuit case. Commercial Cleaning Services did say that, in order to prove that particular predicate act, you did need to show that the person came over the border with the intent to be hired and that the employer knew it.
Whether or not we can prove that in this case is premature at this stage. We believe that we can in good faith allege that they knew precisely that; that they knew that many of these undocumented workers walked over the border from Mexico or came in through irregular means, not through Dulles Airport, or whatever. But, again, that’s one particular offense, one particular predicate act in a whole litany.
Now, counsel also said that somehow it’s a requirement -- or somehow that all of the cases that we cite, including the Ninth Circuit case in Zircle Fruit, were where the

THOMAS F. BRAZAITIS, CSR, OFFICIAL COURT REPORTER, NEWARK, N.J.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 37 of 38
115

1

THE COURT: If you had to rank -- well, rank as far as

2

legal sufficiency, not what you like or what -- your two and

3

three best predicate acts that clearly would get past this

4

motion, what are they?

5

MR. LINSEY: Aiding and abetting as a general thing,

6

aiding and abetting harboring, because we know we allege --

7

certainly the contractors harbored. There’s a sworn government

8

complaint against the contractors for harboring. And we allege

9

that Wal-Mart aided or abetted in that harboring. Aiding and

i0

abetting transporting. And we allege that specifically. And

II

the transporting is, again, alleged against the contractors in

12

the sworn government complaint. And we have facts of that.

13

We have facts of Wal-Mart knowing where these people

14

-live. Wal-Mart -- for instance, Professor McGoffin in 1999, she

15

and the Wal-Mart manager went to the apartment where these

16

Russian citizens were living. They were sleeping on the floor,

17

whatever, in terrible conditions. And Mr. Taylor, the Wal-Mart

18

manager, went there, and then Greta McGraff wrote to the CEO of

19

Wal-Mart, David Glass, and told him exactly what was going on,

20

where they were being harbored.

21

Then what did Mr. Taylor do? He didn’t want these

22

people back in the store. He, in essence, discharged them. He

23

said, you’re not coming back in my store. Then he picked up the

24

telephone and called Stan Kostek, or his successor up in New

25

York, and ordered up another five Russians to come down.

THOMAS F. BRAZAITIS, CSR, OFFICIAL COURT REPORTER, NEWARK, N.J.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 38 of 38
116

1

We beli.eve it’s transporting undocumented workers. So

2

that’s a substantive offense, but at the very least it’s aiding

3

and abetting. So those would be amongst the strongest, your

4

Honor.

5

And also, obviously, encouraging to remain in the

6

United States unlawfully. And it’s basically the litany of

7

offenses at the last pages of the forfeiture complaint. We say

8

the very easiest thing we have to do is show that Wal-Mart aided

9

and abetted those criminal actions that the contractors are

I0

charged with. And we believe that we can also prove the

Ii

substantive offenses as well.

12

THE COURT: Okay.

13

MR. LINSEY: Thank you.

14

MR. MURRAY: Your Honor, I’ll try to keep this very

15

brief.

16

The injury that’s alleged here is overtime. You have

17

to have an employment relationship. They can’t make out the

18

elements of that.

19

And this reliance on the aiding and abetting, I would

20

simply point out, if you go back to page 132 of the forfeiture

21

action where they do list the offenses, they don’t have

22

romanette one, which is the smuggling. There’s something that’s

23

taken out. There’s ellipsis there. What is taken out if you

24

compare to statutory terms is has come to or entered.

25

So even there, your Honor, what the contractors are

THOMAS F. BRAZAITIS, CSR, OFFICIAL COURT REPORTER, NEWARK, N.J.

 
 Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 1 of 53

James L. Linsey Thomas N. Ciantra Oriana Vigliotti COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036 (212) 563-4100

Gilberto Garcia GARCIA AND KRICKO Attorneys at Law 68 Summit Avenue Hackensack, New Jersey 07601 (201) 343-1124

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

------------------------------------------------------------------ x

VICTOR ZAVALA, EUNICE GOMEZ,

:

ANTONIO FLORES, OCTAVIO DENISIO,

:

HIPOLITO PALACIOS, CARLOS ALBERTO

:

TELLO, MAXIMIMILIANO MENDEZ, ARTURO :

ZAVALA, FILIPE CONDADO, LUIS

:

GUTIERREZ, DANIEL ANTONIO CRUS, PETR :

ZEDNEK, TERESA JAROS, JURI PFAUSER,

:

HANA PFAUSEROVA, PAVEL KUNC and

:

MARTIN MACAK, on behalf of themselves and

:

all others similarly situated,

:

:

Plaintiffs,

:

:

- against -

:

:

WAL-MART STORES, INC.,

:

:

Defendant.

:

------------------------------------------------------------------ x

Civil Action No. 03-Civ.-5309 (JAG)

PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO WAL-MART’S MOTION TO DISMISS

00087658.DOC.1

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 2 of 53

Table of Contents Page
TABLE OF AUTHORITIES .........................................................................................................iii PRELIMINARY STATEMENT .................................................................................................... 1 STATEMENT OF THE CASE....................................................................................................... 4
A. Parties...................................................................................................................... 4 1. Plaintiff Janitors .............................................................................................. 4 2. Wal-Mart......................................................................................................... 4
B. Course of Proceedings ............................................................................................ 4 1. Wal-Mart’s Motion to Dismiss the First Amended Complaint ...................... 5 2. Decision on Motion to Dismiss....................................................................... 5
C. The Second Amended Complaint ........................................................................... 7 1. Creation of the Wal-Mart Enterprise .............................................................. 8 2. Money Laundering of the Proceeds of Immigration Crimes .......................... 9 3. Commission of Immigration Crimes by Contractors and Wal-Mart ............ 10 4. Activities of the Enterprise Proximately Harmed Plaintiffs ......................... 12
D. Wal-Mart’s Renewed Motion to Dismiss ............................................................. 13 ARGUMENT................................................................................................................................ 13 WAL-MART’S MOTION TO DISMISS COUNTS I AND II OF THE SECOND AMENDED COMPLAINT SHOULD BE DENIED.............................................. 14
A. Plaintiffs Allege a Viable Association-in-Fact RICO Enterprise Comprised of Wal-Mart and its Maintenance Contractors ................................... 14 1. The Enterprise is Sufficiently Distinct From Wal-Mart ............................... 14 2. Wal-Mart and Its Contractors Share a Common Purpose............................. 18

00087658.DOC.1

i

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 3 of 53 B. Wal-Mart Has Participated in the Affairs of the Enterprise Through a Pattern of Racketeering ..................................................................................... 20 1. Wal-Mart Directs the Affairs of the Enterprise ............................................ 20 C. Wal-Mart’s Commission of the Predicate Acts .................................................... 24 1. Money Laundering........................................................................................ 24 2. The Immigration Predicates.......................................................................... 28 3. Involuntary Servitude.................................................................................... 34 D. The Activities of the Enterprise Harmed Plaintiffs............................................... 36 1. The Racketeering Activity Proximately Caused Plaintiffs’ Harm................ 36 E. Wal-Mart’s Attempt To Rely on an In Pari Delicto Defense Fails...................... 40 F. Plaintiffs State a RICO Conspiracy Claim Under Section 1962(d)...................... 42
CONCLUSION............................................................................................................................. 44
ii

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 4 of 53

Table of Authorities

Page

Alexander v. Sandoval, 532 U.S. 275 (2001)...........................................................................................................13

Baker v. IBP, 357 F.3d 685 (7th Cir. 2004) .......................................................................................16, 19

Bateman Eichler, Hill Richards Inc., v. Berner, 472 U.S. 299 (1985)...........................................................................................................40

Biete, Co. v. Blomquist, 848 F. Supp. 1446 (D. Minn. 1994)...................................................................................41

Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494 (3d Cir. 1998)...............................................................................................36

Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001)...............................................................................................14, 15, 16

Choimbol v. Fairfield Resorts, Inc., No. Civ. A. 2:05 CV 463, 2006 WL. 521763 (E.D. Va. Mar. 2, 2006) .................................................................25, 39

Commercial Cleaning Services, L.L.C. v. Colin, 271 F.3d 374 (2d Cir. 2001)] .................................................................................17, 37, 38

Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984).........................................40

D.R. by L.R. v. Middle Bucks Area Vocational Technical Sch., 972 F.2d 1364 (3d Cir. 1992).............................................................................................13

Doug Grant Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d Cir. 2000)...............................................................................................41

Emcore Corp. v. PricewaterhouseCoopers LLP, 102 F. Supp. 2d 237 (D.N.J. 2000) ..............................................................................20, 21

Feinberg v. Katz, No. 99-civ-045, 2005 WL. 2990633 (S.D.N.Y. Nov. 7, 2005) .........................................17

Gilmore v. Berg, 820 F. Supp. 179 (D.N.J. 1993) .........................................................................................21

Hanrahan v. Britt, No. CIV. A. 94-4615, 1995 WL. 422840 (E.D. Pa. July 11, 1995).......................................................................16

iii

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 5 of 53
Holmes v. Securities Investor Protection Corp, 503 U.S. 258 (1992).........................................................................................36, 37, 38, 41
Jaguar Cars Inc. v. Royal Oak Motor Car Co., Inc., 46 F.3d 258 (3d Cir. 1995)......................................................................................... passim
Kimes v. United States, 939 F.2d 776 (9th Cir. 1991) .............................................................................................34
Lake v. Arnold, 112 F.3d 682 (3d Cir. 1997)...............................................................................................13
McCarthy v. Recordex Serv., Inc., 80 F.3d 842 (3d Cir. 1996).................................................................................................41
Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002) ................................................................................... passim
In re National Mortgage Equity Corp., 636 F. Supp. 1138 (C.D. Cal. 1986) ..................................................................................41
NOW v. Scheidler, 510 U.S. 249 (1994)...............................................................................................13, 36, 40
O'Keefe v. Aamco Transmissions, Inc., No. 91-2506, 1992 WL. 38441 (E.D. Pa. Feb. 24, 1992) ..................................................24
Perma Life Mufflers, Inc. v. Int’l Parts Corp., 392 U.S. 134 (1968)...........................................................................................................41
Pinkerton v. United States, 328 U.S. 640 (1946).....................................................................................................15, 16
Pinter v. Dahl, 486 U.S. 622 (1988)...........................................................................................................41
Powell v. Ridge, 189 F.3d 387 (3d Cir. 1999)...............................................................................................13
Reves v. Ernst & Young, 507 U.S. 170 (1993)................................................................................................... passim
Rodriguez v. McKinney, 878 F. Supp. 744 (E.D. Pa. 1995) ......................................................................................36
iv

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 6 of 53
Salinas v. United States, 522 U.S. 52 (1997).............................................................................................................42
Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985)...........................................................................................................40
Seville Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786 (3d Cir. 1984)...................................................................................13, 14, 28
Smith v. Berg, 247 F.3d 532 (3d Cir. 2001)...............................................................................................42
Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002)...........................................................................................................13
Tilli v. Aamco Transmissions, Inc., No. 91-1058, 1992 WL 38405 (E.D. Pa. Feb. 24, 1992) ..................................................24
Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) .............................................................................................39
United States v. Alzanki, 54 F.3d 994 (1st Cir. 1995)................................................................................................34
United States v. Avila-Dominguez, 610 F.2d 1266 (5th Cir. 1980) ...........................................................................................31
United States v. Barajas-Chavez, 162 F.3d 1285 (10th Cir. 1999) ........................................................................................30
United States v. Baftiri, No. CR 99-47, 2000 WL 34030830 (N.D. Iowa, April 11, 2000) .............................................................28
United States v. Caruso, 948 F.Supp. 382 (D.N.J. 1996) ..........................................................................................24
United States v. Church, 955 F.2d 688 (11th Cir. 1992) ...........................................................................................20
United States v. Conley, 37 F.3d 970 (3d Cir. 1994).................................................................................................27
United States v. Console, 13 F.3d 641 (3d Cir. 1993).................................................................................................14
v

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 7 of 53
United States v. Darden, 70 F.3d 1507 (8th Cir. 1995) .............................................................................................21
United States v. Grubb, 11 F.3d 426 (4th Cir. 1993) ...............................................................................................21
United States v. Guerra-Garcia, 336 F.3d 19 (1st Cir. 2003)................................................................................................28
United States v. Hernandez, 327 F.3d 1110 (10th Cir. 2003) .........................................................................................31
United States v. Johnson, 302 F.3d 139 (3d Cir. 2002)...............................................................................................30
United States v. Kozminski, 487 U.S. 931 (1988).....................................................................................................34, 35
United States v. Lopez, 521 F.2d 437 (2d Cir. 1975)...............................................................................................32
United States v. Masters, 924 F.2d 1362 (7th Cir. 1999) ...........................................................................................20
United States v. Oloyede, 982 F.2d 133 (4th Cir. 1992) .............................................................................................29
United States v. Oreto, 37 F.3d 739 (1st Cir. 1994)................................................................................................21
United States v. Parise, 159 F.3d 790 (3d Cir. 1998)...............................................................................................21
United States. v. Pungitore, 910 F.2d 1084 (3d Cir. 1990).............................................................................................16
United States v. Romero-Cruz, 201 F.3d 374 (5th Cir. 2000) .............................................................................................30
United States v. Singh, 261 F.3d 530 (5th Cir. 2001) .............................................................................................33
United States v. Truszkowski, 05-cr-00454 (N.D. Ill 2005.)..........................................................26
United States v. Turkette, 452 U.S. 576 (1981)...........................................................................................................14
vi

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United States v. Veerapol, 312 F.3d 1128 (9th Cir. 2002) ...........................................................................................34
United States v. Wong, 40 F.3d 1347 (2d Cir. 1994)...............................................................................................21
United States v. Yoshida, 303 F.3d 1145 (9th Cir. 2002) ...........................................................................................29
United States v. Zheng, 306 F.3d 1080 (11th Cir. 2002) ...................................................................................32, 33
Williams v. Mohawk Industries, Inc., 411 F.3d 1252 (2005)................................................................................................. passim
Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295 (D.N.J. 2005) ........................................................................... passim FEDERAL STATUTES
8 U.S.C. §1324(a) .................................................................................................................. passim 18 U.S.C. §1584.............................................................................................................................34 18 U.S.C. §1961...............................................................................................................................1 18 U.S.C. §1962(d) ................................................................................................................ passim 18 U.S.C. §1964(c) ..................................................................................................................36, 40 29 U.S.C. §216(b) ............................................................................................................................4 29 U.S.C. §201.................................................................................................................................5 42 U.S.C. §1985(3) ..........................................................................................................................5 Fed. R. Civ. P. 8(f).........................................................................................................................13 Fed. R. Civ. P. 12(b) .............................................................................................................. passim Pub L. 104-132 §433 (1996)..........................................................................................................37
vii

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PRELIMINARY STATEMENT This action was filed on November 10, 2003. Since then plaintiffs have been

precluded from taking any discovery on their claims under the Racketeer Influenced Corrupt

Organizations Act (“RICO”), 18 U.S.C. §1961 et seq. against Wal-Mart Stores, Inc. (“Wal-

Mart”). In moving again to dismiss these claims, Wal-Mart would have this Court weigh in a

vacuum the evidence that Wal-Mart created and sustained an association-in-fact criminal

enterprise including various maintenance contractors which was designed to exploit the labor of

undocumented janitors and which was operated through systemic violation of federal

immigration, money laundering, and other criminal laws. Indeed, Wal-Mart expends much effort

disputing the inferences that should be drawn from electronic surveillance evidence of top

management gathered by federal investigators. Wal-Mart’s motion is insupportable under the

notice pleading standard of Rule 8 and the requirement of Rule 12 that all facts alleged in a

complaint be taken as true and all inferences drawn in favor of plaintiffs in ruling – as a

threshold matter – on whether a pleading states a claim.

We show below that plaintiffs amply allege that Wal-Mart formed an association-

in-fact criminal enterprise with maintenance contractors to exploit undocumented migrants. Wal-

Mart used separate contractors and sub-contractors in an effort to shield its role in the scheme

and its liability as employer of its janitorial workforce. Wal-Mart established and directed this

on-going enterprise, instructing contractors to set up multiple shell corporations to which it then

funneled millions of dollars to disguise the recipients of the proceeds of the enterprise and avoid

detection. Wal-Mart, of course, determined the scope of the enterprise by determining which

contractors it would use as it set performance and other standards for the contractors to follow.

Plaintiffs allege that Wal-Mart participated in the affairs of the enterprise through

the commission of multiple predicate acts of racketeering. Most notably, Wal-Mart knowingly

00087658.DOC.1

1

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 10 of 53
engaged in money laundering through the shell companies it had its contractors create. Those multiple transactions (that are itemized in documents referenced and incorporated in the pleading) all involved the proceeds of the contractors’ criminal immigration violations and all furthered the scheme. Moreover, Wal-Mart conspired with the contractors to commit further acts of money laundering, since the elaborate corporate shell game Wal-Mart created would necessarily engender multiple further financial transactions among sub-contractors and principals involving the criminal proceeds. Nothing more is required to plead multiple predicate acts of racketeering sufficient to support plaintiffs’ RICO claims.
In addition to money laundering, plaintiffs allege that Wal-Mart aided and abetted (as well as directly committed) multiple criminal immigration violations. The Second Amended Complaint (“SAC”) is replete with allegations – based in part on res judicata criminal convictions and the affidavits of law enforcement agents – that Wal-Mart’s contractors engaged in immigration crimes. Wal-Mart systematically supported these actions and helped to bring them about by hiring the contractors through corporate shells (to shelter the scheme from detection) and then paying janitors’ wages and contractors’ overhead and profits through those shells. In addition, in specific instances Wal-Mart management aided and facilitated multiple specific instances of harboring and transporting undocumented janitors. Finally, the SAC contains detailed allegations that Wal-Mart harbored undocumented aliens by providing lodging in its stores, among other violations.
These predicate acts of racketeering were intended to and did harm plaintiffs. The purpose of the criminal enterprise was to exploit undocumented labor. The predicate acts of racketeering were intended to and did result in Wal-Mart’s janitors being underpaid - denied overtime and (in some cases) minimum wage (or, at times, any wages at all), denied workmen’s
2

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 11 of 53
compensation and denied other employment benefits. In arguing that plaintiffs lack standing, Wal-Mart would have this Court ignore appellate decisions in cases involving materially identical claims which have concluded that the economic cost of depressed wages paid through such schemes can support a RICO claim. Wal-Mart’s standing argument also would require this Court to, in effect, adopt an in pari delicto defense into RICO. Such a defense has not been accepted by the Third Circuit and is counter to well-established anti-trust law that is the basis of RICO standing jurisprudence. There is no reason to deny plaintiffs a recovery under RICO just because they worked for Wal-Mart under exploitative conditions.
Finally, plaintiffs have sufficiently alleged that Wal-Mart participated in a RICO conspiracy under 18 U.S.C. §1962(d). Wal-Mart pays scant attention to this claim, but plaintiffs plainly and amply allege that Wal-Mart conspired with the contractors who participated in the Wal-Mart enterprise with the knowledge and intent that the contractors would commit money laundering, multiple immigration violations and other crimes for which they have been convicted. Indeed, Wal-Mart contractors have admitted in a host of civil and criminal proceedings to having committed multiple crimes in connection with their procuring janitorial labor for Wal-Mart, and it is alleged that Wal-Mart directed its maintenance contractors to set up and function through multiple corporate shells to further the scheme. These allegations standing alone are sufficient – together with the substantive RICO allegations set out in the Second Amended Complaint – to make out a RICO conspiracy claim under 18 U.S.C. §1962(d).
Wal-Mart’s renewed motion to dismiss plaintiffs’ RICO claims should be denied.
3

Case 2:03-cv-05309-JAG-MCA Document 103 Filed 03/20/2006 Page 12 of 53
STATEMENT OF THE CASE A. Parties
1. Plaintiff Janitors The 17 named plaintiffs are citizens of Mexico, the Czech Republic, Slovakia and Poland who worked for Wal-Mart and one or more of its joint-employer maintenance contractors as janitors at stores located throughout the United States at various times. SAC ¶¶7-28. Each of the 17 was at times an undocumented immigrant not entitled to work in the United States. Id. The named plaintiffs seek relief on behalf of themselves and a class of thousands of undocumented and recently documented immigrants, currently, formerly, or in the future to be, employed as janitors to clean Wal-Mart stores. SAC ¶7. In addition, a total of 213 individuals have already filed consents to join in the FLSA claim under the collective action provisions of 29 U.S.C. §216(b). 2. Wal-Mart Wal-Mart is a Delaware corporation with principal corporate offices in Bentonville, Arkansas. SAC ¶29. Wal-Mart has aggressively followed a low-cost, labor-hostile, high-volume sales strategy that has led it to become the largest employer in the United States and the largest retailer in the world. Id. Wal-Mart operates thousands of stores in all fifty states, including locations where class representatives and other members of the plaintiff class were employed. Id. B. Course of Proceedings On November 10, 2003 plaintiffs commenced this action. Plaintiffs thereafter filed a First Amended Complaint on February 2, 2004.
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1. Wal-Mart’s Motion to Dismiss the First Amended Complaint Plaintiffs’ First Amended Complaint pleaded five causes of action against WalMart. Count I alleged that Wal-Mart and various maintenance contractors created an association-in-fact enterprise to exploit the labor of undocumented janitors which was run through a pattern of racketeering activity in violation of 18 U.S.C. §1962(c). Count II alleged that Wal-Mart engaged in a RICO conspiracy in violation of Section 1962(d) by knowingly agreeing to facilitate the operation of the association-in-fact enterprise alleged in Count I. Count III alleged a civil rights conspiracy in violation of 42 U.S.C. §1985(3) with its maintenance contractors. Count IV alleged overtime and minimum wage violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §201 et seq.. Count V alleged common law false imprisonment based on Wal-Mart’s systematic practice of locking janitors in its stores during their overnight shifts. By stipulation of the parties entered by this Court, Wal-Mart was given until March 19, 2004 to answer or otherwise respond to the First Amended Complaint. On March 19, 2004, Wal-Mart filed an omnibus motion to dismiss. The motion was fully briefed by June 1, 2004, and oral argument was heard on the motion on October 20, 2004. Under Rule 16.1 of this Court’s local rules, Wal-Mart’s filing acted as a stay of discovery as no preliminary discovery conference would be scheduled until the motion to dismiss was ruled upon. 2. Decision on Motion to Dismiss By Opinion and Order dated October 7, 2005,1 this Court denied Wal-Mart’s motion to dismiss the FLSA and false imprisonment claims. The Court dismissed, with
1 393 F.Supp.2d 295 (D.N.J. 2005).
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prejudice, plaintiffs’ Civil Rights Act claim. On the RICO claims, the Court granted the motion with leave to amend.
The Court concluded that the complaint did not specifically allege that Wal-Mart committed two predicate acts of racketeering. With respect to allegations concerning the transportation of undocumented aliens,2 the Court concluded that plaintiffs failed to allege sufficiently that Wal-Mart knowingly transported or moved aliens or that this was done to further their presence in the United States, or that it conspired with or aided and abetted others to do so.3 With respect to the harboring predicate, the Court found that while “providing housing and employment may constitute ‘harboring’ for ‘financial gain,’” this was not specifically set out.4 The Court found that, although the First Amended Complaint alleged that contractors encouraged undocumented aliens to enter the United States, there were no allegations that WalMart “took affirmative steps to assist Plaintiffs to enter or remain unlawfully in the United States[.]”5 With respect to the claim that Wal-Mart hired ten or more undocumented alien janitors, the Court concluded that plaintiffs were required but failed to allege that Wal-Mart knew that the “aliens were brought into the United States for the purpose of obtaining unlawful employment.”6 The Court concluded that plaintiffs’ money laundering claims were “vague and insufficient to support a RICO claim.”7 In particular, the Court found that the First Amended Complaint did not “identify the relevant financial transactions or conduct by Wal-Mart[.]”8
2 8 U.S.C.§1324(a)(1)(A)(ii). 3 393 F.Supp. 2d at 305-6. 4 Id. at 307. In this regard the Court noted that, although plaintiffs argued that the lock-ins of janitors helped to conceal them from detection, “they actually do not allege these facts in their complaint.” Id. at 307 n. 9. 5 Id. at 308. 6 Id. at 309. 7 Id. at 315. 8 Id.
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The Court similarly concluded that plaintiffs’ allegations of involuntary servitude and mail and wire fraud were insufficient.
With respect to the RICO conspiracy claim, the Court noted that 1962(d) imposes liability in cases where “conspirators agree to a plan in which some conspirators will commit crimes and others will provide support[.]”9 Finding that the First Amended Complaint did not include sufficient allegations to support an inference that “Wal-Mart agreed with co-conspirators to the commission, by co-conspirators and others, of RICO predicate acts, in furtherance of an unlawful enterprise,” the Court also dismissed the Section 1962(d) claim without prejudice to replead.10
The Court did not address Wal-Mart’s arguments that plaintiffs had failed to allege a RICO enterprise separate or distinct from Wal-Mart itself, Wal-Mart’s operation or management role in that enterprise or that plaintiffs were proximately harmed by the actions of the enterprise.
C. The Second Amended Complaint Pursuant to this Court’s order, plaintiffs filed the SAC on November 21, 2005.
The allegations of the SAC relevant to plaintiffs’ RICO claims are set out below. The SAC alleges that to avoid and evade responsibility under federal immigration
law and to profit from illegal activity, Wal-Mart created an association-in-fact criminal enterprise through which it conspired with various cleaning contractors whom it knew would provide janitors to clean its stores who were not legally authorized to work in the United States.11 These migrants worked well in excess of 40 hours a week nearly every night of the year without
9 Id. at 316. 10 Id. at 317. 11 SAC ¶3, 41.
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overtime (and at times any) compensation. In response to law enforcement actions and to shield its reliance on undocumented labor, Wal-Mart instructed and encouraged contractors to create a web of shell corporations that facilitated Wal-Mart in exploiting the workers and allowed the migrant hiring scheme to flourish despite repeated law enforcement actions.12 The contractors did so, associating with Wal-Mart in the enterprise.13 Wal-Mart well knew and intended that maintenance contractors it relied upon routinely and systematically encouraged, harbored and transported unlawful migrant labor in violation of The Immigration Reform and Control Act of 1986 (“IRCA”), and Wal-Mart itself both aided and abetted the encouraging, transporting and harboring of undocumented workers by its contractors and committed certain such offenses as a principal as well.14
1. Creation of the Wal-Mart Enterprise In particular, plaintiffs allege that no later than 1997, following law enforcement raids at various Wal-Mart stores, LeRoy Scheutz, the Divisional Vice President of Operations in the Wal-Mart Stores Division, created an association in fact enterprise with Christopher Walters, who owned and operated Wal-Mart’s largest janitorial contractor, IMC, Inc. whose janitors had been targeted in the raids. Wal-Mart had determined sometime before 1997 that it would no longer verify the immigration bona fides of janitors employed through contractors. In conversations immediately following the raids, Scheutz told Walters that Wal-Mart would continue to use IMC only if Walters created and provided undocumented janitorial labor through multiple shell corporations so that if one firm were caught using undocumented labor, Wal-Mart could fire that company but Walters could continue to supply the undocumented migrants to
12 SAC ¶47. 13 SAC ¶51, 55. 14 SAC ¶3.
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Wal-Mart through other front companies.15 Schuetz knew and intended that the use of the front companies would shield the scheme and its profits from detection by law enforcement authorities.16 Wal-Mart also knew and intended that IMC and other contractors would encourage aliens to reside in the United States (so that they could work at Wal-Mart), harbor and transport aliens within the United States to further their presence here.17 On information and belief, similar arrangements were made with other contractors.18
2. Money Laundering of the Proceeds of Immigration Crimes Walters set up multiple shell companies as Scheutz directed.19 Wal-Mart paid for janitorial labor through the shell companies,20 with the knowledge that the monies provided were the proceeds of the illegal hiring, encouraging and transporting of undocumented migrant labor.21 Specifically, between 1999 and 2001, Wal-Mart conducted multiple financial transactions through which a sub-set of Walters’-controlled firms were paid in excess of $77 million as the proceeds of the unlawful activities.22 Wal-Mart also knew and intended that the payments to the various shell companies would engender still further financial transactions involving the proceeds among the contractors, their principals and various subcontractors.23
15 SAC ¶47. 16 SAC ¶47. 17 SAC ¶47-54. 18 SAC ¶55, 56. 19 SAC ¶51. 20 SAC ¶52. 21 SAC ¶57, 58. 22 SAC ¶95, Exhibit E at 100. 23 SAC ¶53.
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3. Commission of Immigration Crimes By Contractors and Wal-Mart As outlined in the SAC, Wal-Mart’s agreement with Walters constituted a conspiracy in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I) to transport, harbor or encourage undocumented aliens to reside in the United States because Wal-Mart knew and intended that Walters and his associated sub-contractors would encourage undocumented aliens to enter the United States to work at Wal-Mart, would transport undocumented aliens within the United States and would harbor the undocumented aliens put to work at Wal-Mart.24 It is res judicata that numerous Wal-Mart contractors violated multiple federal immigration and other laws in connection with the migrant janitorial worker scheme. Specifically several Walters-controlled firms pleaded guilty on April 25, 2005 to a conspiracy to transport and encourage illegal aliens to reside in the United States between 1998 and 2002.25 Walters subcontractor CMS of Queensbury (“CMS”), which Walters used to supply undocumented janitorial labor to Wal-Mart, pleaded guilty in 2003 to a similar conspiracy.26 Wal-Mart subcontractor DJR Cleaning Enterprises (“DJR”) admitted in October of 2005 that it had conspired with various Walters-controlled companies and its own sub-contractor CMS, to transport and encourage and induce aliens to reside in the United States.27 On June 22, 2005, Walter J. Truszkowski entered a guilty plea to a two-count federal indictment charging a conspiracy to conceal aliens and to encourage aliens to reside in the United States as well as to a conspiracy to launder the proceeds of those immigration offenses. Truszkowski created, owned and operated Crystal Clear Nationwide Management,
24 SAC ¶75. 25 SAC ¶80 and Exhibits C and D. 26 SAC ¶81 and Exhibit F. 27 SAC ¶82 and Exhibit G.
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Inc., and DeLuxe Cleaning, Inc.28 Through Vincent Romano, DJR’s principal, Truszkowski obtained subcontracts to clean various Wal-Mart stores in Illinois and Indiana.29 Plaintiffs allege that these actions were in furtherance of the conspiracy between Wal-Mart and Walters, as Walters’ firm IMC used Romano and his affiliated contractors as corporate shells intended to shield Wal-Mart’s employment of the undocumented migrant cleaning crews.30
Wal-Mart contractors recruited janitors to enter the United States through promises of employment, transported them when they arrived to various Wal-Mart locations and provided them with communal lodging and other support to facilitate and extend their presence in the United States and work at Wal-Mart.31 For its own part, Wal-Mart systematically harbored undocumented alien janitors through its widespread practice of locking janitors in its stores at night. This practice further isolated the janitors, limiting the ability of law enforcement or others to detect their presence and thus facilitating their continued employment and presence in the United States.32 Wal-Mart also provided certain undocumented janitors lodging in its stores, shielding them from detection.33
Wal-Mart aided and abetted the immigration crimes of the contractors. Wal-Mart knew that the janitorial labor its various contractors supplied was encouraged to travel to or remain in the United States, and transported and harbored by the contractors.34 Wal-Mart assisted this activity by financing the operations of the contractors. Wal-Mart’s millions of dollars in payments underwrote not only the labor of the janitors but the profit and overhead
28 SAC ¶84. 29 SAC ¶¶84. 30 SAC ¶85. 31 SAC ¶¶87-92, 103-04. 32 SAC ¶109. 33 SAC ¶44, 110. 34 SAC ¶42, 52, 110.
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costs and thus the criminal activity of the contractors, knowingly and intentionally making their crimes possible and helping to bring them about.35 In addition to its general support of multiple immigration crimes, Wal-Mart aided and abetted the transportation and harboring of its contractors by engaging replacement crews from its contractors following enforcement actions, knowing that its actions would lead the contractors to transport crews to the affected Wal-Mart stores and house the janitors.36
4. Activities of the Enterprise Proximately Harmed Plaintiffs Wal-Mart has an on-going and, indeed, permanent need for janitorial services in its thousands of retail stores. Were Wal-Mart to hire its maintenance staff directly, it, at a minimum, would be required to comply with the verification procedures of federal immigration law, as well as federal and state tax and labor laws. The irreducible costs of lawful employment, however, can be and were avoided through sham contracting arrangements and undocumented migrant labor.37 The amounts that plaintiffs were paid for their labor were depressed below market levels and, indeed, below the levels mandated by the FLSA’s minimum wage and overtime requirements. All of this was a foreseeable, direct and intended result of the operation of the Wal-Mart enterprise. Indeed, Wal-Mart and the contractors stood to gain if the enterprise delivered janitorial labor at a cost less than the legal minima. The immigration crimes and money laundering activities of participants in the enterprise were thus the necessary conditions for the exploitative labor conditions the janitors suffered and, by the same token, Wal-Mart’s and its contractors’ profits.38
35 SAC ¶112. 36 SAC ¶¶113-116. 37 SAC ¶41-42. 38 SAC ¶42, 79.
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D. Wal-Mart’s Renewed Motion to Dismiss On January 20, 2006, Wal-Mart filed a renewed motion to dismiss the RICO
claims (i.e., Counts I and II) of the SAC raising the same arguments it made in connection with its initial motion to dismiss.
ARGUMENT The Supreme Court has reaffirmed that “a complaint must include only ‘a short and plain statement of the claim showing that the pleader is entitled to relief’ . . . ‘giv[ing] the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.’” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). The notice pleading contemplated by Rule 8 “relies on liberal discovery rules and summary judgment motions to define disputed facts and issues” rather than motion practice under Rule 12. Swierkiewicz, 534 U.S. at 512. Thus, a “liberal standard” necessarily applies to review of the pleadings on a motion under Rule 12(b)(6). Lake v. Arnold, 112 F.3d 682, 685 (3d Cir. 1997). The court is “required to ‘accept as true the facts alleged . . . and all inferences that can be drawn therefrom’” in plaintiff’s favor. Powell v. Ridge, 189 F.3d 387, 392 (3d Cir. 1999) (quoting D.R. by L.R. v. Middle Bucks Area Vocational Technical Sch., 972 F.2d 1364, 1367 (3d Cir. 1992) (en banc)) (overruled on other grounds by Alexander v. Sandoval, 532 U.S. 275 (2001)); see also Fed. R. Civ. P. 8(f) (pleadings must be construed to do “substantial justice”). Further, a court “‘presume[s] that general allegations embrace those specific facts that are necessary to support the claim.’” NOW v. Scheidler, 510 U.S. 249, 256 (1994)) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)) (upholding pleadings in RICO context). In this connection, a court must not “confuse [ ]what must be pleaded with what must be proved.” Seville Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786,
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790 (3d Cir. 1984) (reversing dismissal of RICO claim). “[It] is enough that a complaint put the defendant on notice of the claims against him. It is the function of discovery to fill in the details, and of trial to establish fully each element of the cause of action.” Id.
As its motion makes clear, Wal-Mart would have this Court make findings of fact on allegations in the SAC. This is insupportable as a matter of law. When the proper standard under Rule 12 is applied to the detailed allegations of the SAC, Wal-Mart’s motion must be denied. I. WAL-MART’S MOTION TO DISMISS COUNTS I AND II OF THE
SECOND AMENDED COMPLAINT SHOULD BE DENIED A. Plaintiffs Allege a Viable Association-in-Fact RICO Enterprise Comprised
of Wal-Mart and its Maintenance Contractors 1. The Enterprise is Sufficiently Distinct From Wal-Mart To make out a RICO enterprise, plaintiffs must allege “an ongoing organization, [whether] formal or informal,” which “function[s] as a continuing unit.” United States v. Turkette, 452 U.S. 576, 583 (1981); United States v. Console, 13 F.3d 641, 651 (3d Cir. 1993). Under Section 1962(c), a RICO defendant must be a distinct entity from the enterprise it operates through a pattern of racketeering activity. See Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 162 (2001); Jaguar Cars Inc. v. Royal Oak Motor Car Co., Inc., 46 F.3d 258, 268 (3d Cir. 1995) (cited with approval in King, 533 U.S. at 161). While a plaintiff (or the government) must ultimately show proof of the Turkette factors, such specific elements need not be pleaded to defeat a motion under Rule 12(b)(6). Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 790 (3d Cir. 1984). In King, the Supreme Court reversed the Second Circuit which had held that the sole shareholder of a boxing promotion company was not sufficiently distinct from the company itself to permit the shareholder to be sued under the theory that he operated the company as a
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RICO enterprise. King, 533 U.S. at 160-61. In reversing the Second Circuit’s restrictive construction of the distinctiveness requirement, the Court examined the broad statutory definitions of an enterprise under 18 U.S.C. §1962(c). Id. at 161-62. It held that a sole shareholder was distinct for purposes of RICO from the closely-held corporation he controls:
The corporate owner/employee, a natural person, is distinct from the corporation itself, a legally different entity with different rights and responsibilities due to its different legal status. And we can find nothing in the statute that requires more “separateness” than that. King, 533 U.S. at 163. Thus, RICO’s distinctiveness element requires only that the defendant be legally distinct from the enterprise, as a corporation is legally distinct from its officers or employees, although their acts may bind the corporation as a matter of law. Id. at 165; see also Jaguar Cars, 46 F.3d at 268. Here, plaintiffs allege the association-in-fact enterprise is comprised of Wal-Mart and its maintenance contractors, SAC ¶¶3, 41, 67, each of which is undeniably a separate corporate entity, legally distinct from the enterprise, SAC ¶¶45, 51, 55, 84, 85. Wal-Mart’s argument that plaintiffs allege that Wal-Mart conspired with itself, Mot. at 34-35, willfully ignores the substance of the scheme alleged in the pleadings. Rather, Wal-Mart chose to join with separate maintenance contractors to cover it from liability for immigration and employment law obligations connected with its janitorial labor force. SAC ¶47. Far from conspiring with itself, Wal-Mart created a separate enterprise with its contractors precisely so that it could point a finger at the contractors whenever criminal conduct was exposed. SAC ¶¶3, 44, 47. In an effort to get around this, Wal-Mart urges that because its various contractors are said to be acting as its co-conspirators or agents in the operation of the enterprise, “[t]his is equivalent to saying that Wal-Mart operated itself as an unlawful enterprise.” Mot. at 34-35. But it is axiomatic that co-conspirators act as mutual agents for one another, Pinkerton v. United
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States, 328 U.S. 640, 646-47 (1946); United States. v. Pungitore, 910 F.2d 1084, 1147 (3d Cir. 1990), which does not – and cannot – shield Wal-Mart from liability here as RICO envisions that participants in an enterprise may conspire with one another. Indeed, conspiring to commit money laundering or immigration crimes are themselves RICO predicate offenses.
Wal-Mart’s argument is nothing more than the claim rejected in King, that a corporate enterprise is not distinct from its agents for purposes of RICO. But as the Third Circuit has held, a corporation can be liable under Section 1962(c) “if it engages in racketeering activity as a ‘person’ in another distinct ‘enterprise[.]’” Jaguar Cars, 46 F.3d at 268 (emphasis in original). As a result, a corporation can join with its agents as part of an association-in-fact RICO enterprise. See e.g., Hanrahan v. Britt, No. CIV. A. 94-4615, 1995 WL 422840, at *5-7 (E.D. Pa. July 11, 1995). Here, Wal-Mart’s association with other separate entities – the contractors – was an essential element of the scheme.
Wal-Mart’s reliance on the Seventh Circuit’s decision in Baker v. IBP, 357 F.3d 685, 691 (7th Cir. 2004), to support its notion that the enterprise alleged in the SAC is not distinct from Wal-Mart itself is misplaced. In Baker, where an employer was alleged to have created a criminal enterprise with immigrant aid associations, the Seventh Circuit found that the “nub of the complaint is that IBP operates itself unlawfully,” in that IBP was the sole alleged employer of the undocumented immigrant workers. Baker, 357 F.3d at 691 (emphasis in original). In this connection, the court noted that the entire undocumented immigrant labor scheme involved in Baker was perpetrated by IBP. It was IBP “that supposedly hire[d], harbor[ed], and pa[id] the unlawful workers, for the purpose of reducing its payroll.” Id. at 691. Thus the court found there was no distinction between IBP and the alleged enterprise. Id. at 692.
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Here, the essence of the scheme is that Wal-Mart chose to do what IBP avoided: it relied on contractors to provide labor and act as the employer of the janitors. See SAC ¶¶42, 47, 51 56, 57, 59. The contractors hire, pay, and in multiple instances harbor, transport and encourage the undocumented labor provided to Wal-Mart. SAC ¶¶47, 48, 51, 55-58, 67. WalMart used separate contractors to employ undocumented workers as a shield to avoid the scheme’s detection by law enforcement. See, e.g., SAC¶¶3, 44, 47, 52, 59, 62. Far from operating itself unlawfully, Wal-Mart relied on the contractors to provide the undocumented labor.39
Courts of Appeal in the Second, Ninth and Eleventh Circuits have found that association-in-fact enterprises comprised of an employer and labor contractors properly state a distinct association in fact RICO enterprise. See Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1166 (9th Cir. 2002); Williams v. Mohawk Industries, Inc., 411 F.3d 1252 (11th Cir. 2005). WalMart simply ignores this authority which dooms its distinctiveness argument.
In Commercial Cleaning Services, L.L.C. v. Colin, 271 F.3d 374, 378-79 (2d Cir. 2001), the Second Circuit upheld the district court’s denial of defendant’s motion to dismiss RICO claims where plaintiffs alleged an illegal immigrant hiring scheme was operated by an association-in-fact-enterprise comprised of a commercial janitorial services provider, and employment placement services, labor contractors and newspapers in which defendant advertised for laborers. Id. at 379. Similarly, in Mendoza, 301 F.3d at 1167, the Ninth Circuit reversed the district court’s dismissal of plaintiffs’ RICO claims where plaintiff alleged an association-in-fact enterprise comprised of the employer and an employment agency which supplied defendant with
39 For these reasons, Wal-Mart’s reliance on Feinberg v. Katz, No. 99-civ-045, 2005 WL 2990633, at *7 (S.D.N.Y. Nov. 7, 2005), is also misplaced. The Feinberg court reasoned there that because all defendants acted “within the scope of a single corporate structure, guided by a single corporate consciousness,” there was not a sufficient distinction between the defendant and the corporate enterprise. Id. at *7. Here, Wal-Mart and its maintenance contractors are undeniably separate corporate entities.
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undocumented migrant labor. There, as here, plaintiffs alleged that the employer used the separate contractor as a “front company” to perpetrate the scheme with the hope that it would be shielded from law enforcement detection. Id. at 1167. Noting that defendant and its employment agency were “separate compan[ies],” the court found the employer distinct from the alleged enterprise. 301 F.3d at 1167.
And in Williams, plaintiffs alleged an association-in-fact enterprise comprised of defendant Mohawk, a large carpet and rug manufacturer, and the employment recruiters which supplied Mohawk with undocumented migrant labor. Williams, 411 F.3d at 1254. Mohawk also challenged the alleged enterprise on distinctiveness grounds on motion under Rule 12. Id. at 1258. The court rejected Mohawk’s argument, noting just that Mohawk and its employment recruiters were “distinct entities” engaged in a conspiracy to bring illegal workers into the United States for Mohawk’s benefit. Id.
Because a corporation can be liable under Section 1962(c) “if it engages in racketeering activity as a ‘person’ in another distinct ‘enterprise,’” Jaguar Cars, 46 F.3d at 268 (emphasis in original), there is no basis to dismiss Count I of the SAC on distinctiveness grounds.
2. Wal-Mart and Its Contractors Share a Common Purpose Switching tacks, Wal-Mart also argues that it and its contractors do not share a common purpose sufficient to make out an association-in-fact enterprise. Mot. at 35-36. WalMart cites to no Third Circuit precedent in support of its argument that entities making up an enterprise must have a single shared purpose but, even assuming, arguendo, that there were such a requirement, Wal-Mart just ignores those portions of the SAC which make it clear that both it
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and the contractors shared the mutual goal of profiting off the labor of the undocumented janitors.40
Here, again Wal-Mart mistakenly relies on the Seventh Circuit’s decision in Baker where the association-in-fact was made up of the employer of undocumented labor, recruiters of migrant workers, and immigrant-related social service agencies. The Seventh Circuit found that these entities could not form a sufficient association-in-fact enterprise because the employer had fundamentally different aims and goals from the other entities involved in the scheme. The immigrant-related social service agency sought to assist immigrants, while IBP sought to exploit them by employing them illegally, and compensating them less than mandated by law. Baker, 357 F.3d at 687, 691. Here, the contractors and Wal-Mart share the same purpose – profiting from undocumented labor.
The Eleventh Circuit’s decision in Williams involves analysis of an enterprise far closer to that involved here. There, plaintiffs alleged that the participants in the enterprise (a carpet manufacturer and its employment recruiters) shared “the common purpose of obtaining illegal workers for employment at Mohawk” and that “[t]he acts of racketeering activity committed by Mohawk have the same or similar objective: the reduction of wages paid to Mohawk’s hourly workforce.” Mohawk, 411 F.2d at 1258.41 The court found a common purpose because “[w]hat is clear from the complaint is that each member of the enterprise is
40 “Wal-Mart and various maintenance contractors identified in this Second Amended Complaint . . . have created, engaged in and profited from a nationwide criminal enterprise which exploits the plaintiffs and those similarly situated through wide-scale violation of protective federal and state labor and employment laws.” SAC ¶41; see also SAC ¶42 (Wal-Mart and contractors target and exploit migrants for mutual profit).
41Cf. SAC ¶¶3, 40, 41, 42, 61, 67, 77.
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allegedly reaping a large economic benefit from Mohawk’s employment of illegal workers.”
Mohawk, 411 F.2d at 1258. The same is true here.42
B. Wal-Mart Has Participated in the Affairs of the Enterprise Through a Pattern of Racketeering
1. Wal-Mart Directs the Affairs of the Enterprise
Section 1962(c) makes it unlawful for one to “conduct or participate, directly or
indirectly, in the conduct of [an] enterprise’s affairs through a pattern of racketeering activity....”
18 U.S.C. §1962(c). In Reves v. Ernst & Young, 507 U.S. 170, 179 (1993), the Supreme Court
held that:
In order to ‘participate, directly or indirectly, in the conduct of such enterprise’s affairs,’ one must have some part in directing those affairs. Of course, the word ‘participate’ makes clear that RICO liability is not limited to those with primary responsibility for the enterprise’s affairs, just as the phrase ‘directly or indirectly’ makes clear that RICO liability is not limited to those with a formal position in the enterprise, but some part in directing the enterprise’s affairs is required.
(footnote omitted). Reves involved the issue of whether an outsider to the alleged enterprise – an
accounting firm retained by the corporate enterprise – which prepared audit reports overstating
the worth of the company could be said to participate in the affairs of its client. Reves, 507 U.S.
at 174-75; see also PricewaterhouseCoopers, 102 F.Supp.2d at 262-63. The “operation or
42 That the self-interest of the enterprise’s participants may be divergent, see Mot. at 35, is immaterial to the common purpose of the enterprise: exploiting undocumented labor for profit. See Emcore Corp. v. PricewaterhouseCoopers LLP, 102 F. Supp. 2d 237, 263-64 (D.N.J. 2000) (rejecting argument that defendants’ “inherently contradictory goals” negated enterprise participants’ common purpose); United States v. Masters, 924 F.2d 1362, 1367 (7th Cir. 1999) (noting that a RICO enterprise can have diverse objects and goals). The enterprise’s participants all profited from the scheme. How these profits were divided (payments to contractors, savings to WalMart) is immaterial. Likewise, that Wal-Mart kept itself at a distance from the other participants to shield itself from law enforcement detection is immaterial to a finding that the participants shared a common purpose. Cf. Mohawk, 411 F.3d at 1258.
In any event, contrary to Wal-Mart’s assertion that an enterprise cannot share a common purpose of profiting from illegal activity, Mot. at 36, proof of an association’s “devotion to ‘making money from repeated criminal activity’” alone shows a common purpose. See U.S. v. Church, 955 F.2d 688, 698 (11th Cir. 1992) citing United States v. Cagnina, 697 F.2d 915, 921 (11th Cir. 1982); see also Williams, 411 F.3d at 1258.
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management” inquiry is thus designed to ensure that RICO does not reach “complete outsiders” who may assist the enterprise’s affairs but who take no part in the conduct of the enterprise. See PricewaterhouseCoopers LLP, 102 F.Supp.2d at 262-63; see also Jaguar Cars, 46 F.3d at 26566.
As the Third Circuit has held, RICO liability extends to “those ‘plainly integral to carrying out’ the enterprise’s activities.” United States v. Parise, 159 F.3d 790, 796 (3d Cir. 1998). The Reves “operation or management” standard requires that a defendant have a role in directing the enterprise’s affairs. The allegations of the SAC support the inference that far from being a peripheral player, Wal-Mart was the kingpin of the enterprise, as it directed its affairs. See e.g., United States v. Darden, 70 F.3d 1507, 1516, 1542-43 (8th Cir. 1995); United States v. Wong, 40 F.3d 1347, 1373-75 (2d Cir. 1994); United States v. Oreto, 37 F.3d 739, 743, 750-51 (1st Cir. 1994); United States v. Grubb, 11 F.3d 426, 438-39 (4th Cir. 1993).43
The SAC alleges the following specific instances of Wal-Mart’s participation in the affairs of the enterprise. Wal-Mart: (1) established the enterprise by directing maintenance contractors to set up shell corporations in order to more effectively provide Wal-Mart with undocumented labor and shield the scheme from detection; (2) selected participants in the scheme by determining which contractors to use; (3) made routine and knowing use of undocumented labor; (4) supported the existence of the scheme by making payments to the shell companies for the undocumented labor from Wal-Mart’s headquarters; (4) directed the standards of contractor performance; (5) switched shell contractors and replaced crews following federal
43 For these reasons, Wal-Mart’s reliance on Gilmore v. Berg, 820 F. Supp. 179, 183 (D.N.J. 1993) is inapposite. In Berg, the court dismissed plaintiff’s RICO claims against an outsider defendant (an attorney providing professional services) on “operation or management” grounds where the defendant did not engage in any conduct which ran afoul of the RICO statute. Id. at 183. The defendant simply rendered professional services in the ordinary course of business and was not involved in any of the alleged predicate activities of the enterprise. Id. Here, as shown below, Wal-Mart has engaged in, and indeed directed, the affairs of the enterprise through commission of the predicate acts of money laundering and violation of immigration predicates.
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raids of Wal-Mart stores; and (6) rejected contractors’ offers to supply Wal-Mart with documented workers. SAC ¶¶44, 47, 48, 52, 62, 63, 67, 94.
As explicitly alleged in the SAC, the enterprise was directed by Divisional Vice Presidents within the Wal-Mart Stores Division with responsibility for in-store cleaning and procurement of services. SAC ¶44. Senior-level Wal-Mart executive Leroy Schuetz directed maintenance contractors to structure their business operations using multiple shell corporations to shield the employment of undocumented migrants from law enforcement detection. SAC ¶¶45, 47. Far from failing “to describe how Wal-Mart directed the alleged enterprise’s unlawful conduct,” Mot. at 36, plaintiffs specifically allege that during a conversation with Christopher Walters, the principle of various Wal-Mart maintenance providers, Schuetz threatened to end Wal-Mart’s contract with Walters unless Walters formed and maintained different shell corporations to provide services to Wal-Mart. SAC ¶47; see also SAC ¶¶55, 56 (alleging same direction given to other contractors). Walters, of course, agreed, SAC ¶51, and Wal-Mart thereafter paid tens of millions of dollars to Walters’ various shell companies to further the scheme. SAC ¶¶94, 95.
Wal-Mart managed the scheme through, among others, Schuetz and Steven Berschy, a Wal-Mart Divisional Vice President in charge of procurement for the Wal-Mart Stores Division. These senior Wal-Mart officials functioned in a supervisory capacity acting directly or through subordinate Regional and District management to manage and control the scheme. SAC ¶¶47, 52. By at least 1999, Wal-Mart’s Chief Executive Officer David Glass was aware of the scheme and did nothing to curtail it. SAC ¶49.
These allegations, pleaded without the benefit of any formal discovery, go far beyond what is necessary under the lenient 12(b)(6) standard. See Williams, 411 F.3d at 1258-59
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(holding that allegation that “[defendant] participates in the operation and management of the affairs of the enterprise,” which included “some direction over” the defendant’s supplier of undocumented labor, was sufficient to allege that the defendant was engaged in the operation or management of the enterprise).44
Wal-Mart argues that the complaint does not allege that Wal-Mart directed the commission of the predicate acts and that this means the requirements of Reves are not met. See Mot. at 38. But Reves requires only that Wal-Mart “have some part in directing those affairs” because “RICO liability is not limited to those with primary responsibility for the enterprise’s affairs.” Reves, 507 U.S. at 179. Here, plaintiffs allege that Wal-Mart directed its contractors to operate through shell companies and that this was done with the knowledge and intent that the contractors would continue to unlawfully encourage aliens to reside in the United States, transport them within the United States to work at various Wal-Mart stores and harbor them. SAC ¶75. Thus, plaintiffs clearly alleged that Wal-Mart has “some part in,” Reves, 507 U.S. at 179, the commission of multiple predicate acts by the contractors.
Moreover, the SAC alleges that Wal-Mart itself engaged in systematic money laundering activities over multiple years through financial transactions amounting to tens of millions of dollars through the very shell corporations it directed the contractors to establish knowing full well that those transactions involved the proceeds of the contractors’ immigration crimes. SAC ¶¶52, 57, 77, 85, 95, 100.45
44 Indeed, the complaint in Williams, attached as Exhibit A to the Declaration of James L. Linsey dated March 20, 2006 filed herewith, contains the conclusory allegation that “Mohawk participates in the operation and management of the affairs of the enterprise, which exists for Mohawk’s benefit.” Linsey Decl. Exhibit A ¶78.
45As shown above at pp. 9-12, the SAC also sets out allegations that Wal-Mart committed additional acts of racketeering in connection with the operation of the enterprise. See SAC ¶¶74, 99 (Wal-Mart engaged in a conspiracy to violate immigration predicates); ¶¶109, 110 (Wal-Mart harbors aliens in violation of immigration predicate); ¶¶111-16 (aiding and abetting the immigration crimes of contractors).
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In sum, because RICO liability is not limited “to those with primary responsibility for the enterprise’s affairs,” so long as a defendant played “some part in directing the enterprise’s affairs,” Reves, 494 U.S. at 179, Wal-Mart’s status as the sole source of lucrative maintenance contracts, its evident control over the terms of those arrangements, its direction to contractors to set up shell corporations to shield the enterprise from detection, and its sustained profit from the systematic use of undocumented immigrant labor in its stores, suffice to allege that it participated in the conduct of the enterprise’s affairs.
C. Wal-Mart’s Commission of the Predicate Acts 1. Money Laundering To plead money laundering, a plaintiff must allege that (1) the defendant
conducted or attempted to conduct a financial transaction, (2) which the defendant then knew involved the proceeds of unlawful activity, (3) with the intent to promote or further unlawful activity. See United States v. Caruso, 948 F.Supp. 382, 390 (D.N.J. 1996). So long as plaintiffs allege that Wal-Mart transferred money “knowing that the funds involved had been earned through a pattern of racketeering activity” and “with the intent to promote the carrying on of their racketeering activity,” that is sufficient. Tilli v. Aamco Transmissions, Inc. No. 91-1058, 1992 WL 38405, at *3 n.3 (E.D. Pa. Feb. 24, 1992); see also O’Keefe v. Aamco Transmissions, Inc. No. 91-2506, 1992 WL 38441, at *l n.3 (E.D. Pa. Feb. 24, 1992). Here, plaintiffs plainly allege that Wal-Mart transferred funds that it knew represented the proceeds of its contractors’ immigration crimes with the intent to promote or further that activity. Moreover, because WalMart insisted – and its contractors agreed – to operate through corporate shells, it knew and intended that those contractors would further launder the proceeds of the scheme among themselves.
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The SAC outlines these inter-related financial transactions in detail.46 Plaintiffs allege that Wal-Mart paid the various front companies with checks drawn on Wal-Mart’s bank located in Bentonville, Arkansas, with the knowledge that the monies paid constituted the proceeds of the illegal hiring, encouraging, harboring and transporting of undocumented migrant labor. SAC ¶58. Specifically, Wal-Mart paid in excess of $77 million to corporate shells established by Walters between 1999 and 2001 alone. SAC ¶95. Specifically, Wal-Mart paid $26 million to IMC, $14.5 million to Comet Floor Care, $21 million to Ironman Maintenance, $10 million to Precision Cleaning Services, $1.8 million to Champion Floor Care Services, $3.5 million to National Cleaning Management and $12.5 million to Pinnacle for cleaning services. SAC ¶95. These transactions are itemized in Exhibit E to the SAC at p. 100.
These allegations clearly state a violation of Section 1956. See Choimbol v. Fairfield Resorts, Inc., No. Civ. A. 2:05 CV463, 2006 WL 521763 (E.D. Va. Mar. 2, 2006). In Choimbol, the court upheld plaintiffs’ money laundering allegations in a materially identical scheme. There, Fairfield Resorts, a hotel chain, conspired with employment recruiters and subcontractors who provided Fairfield with undocumented migrant labor who, as here, were denied FLSA mandated wages. Id. at *1-2. Based on allegations that Fairfield’s employment recruiter accepted payment from Fairfield for undocumented migrant labor and then paid its subcontractors from those proceeds with the intent to promote the scheme, the court found plaintiffs had properly stated RICO money laundering predicates against Fairfield. Id. at *2-6.
Wal-Mart’s multiple payments to the contractors through shell corporations all knowingly involved the proceeds of illegal activity. As pleaded in the SAC, Wal-Mart’s payments to the shell corporations for maintenance services provided by undocumented workers
46 Cf. Zavala, 393 F. Supp.2d at 315-16.
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constituted the proceeds of the illegal transporting, harboring or encouraging of migrants to allow them to labor at Wal-Mart stores. SAC ¶¶85, 94. Wal-Mart’s contention that plaintiffs failed to allege how payments made to contractors constitute the “proceeds of illegal activity,” see Mot. at 23, thus ignores the plain allegations in the SAC, which mirror those charged against Wal-Mart contractors by the federal government. See SAC ¶85; see also SAC Ex. I pp.6-7. 47
The SAC further alleges that each of those payments were made in furtherance of the scheme. The payments covered not only the janitors’ (sub-minima) wages but the overhead and profit to the contractors. SAC ¶¶77, 112. Wal-Mart’s notion, Mot. at 23, that plaintiffs failed to allege that Wal-Mart acted in furtherance of the alleged scheme, is fanciful. Wal-Mart’s payment through corporate shells it insisted its contractors create after massive immigration raids in 1997 minimized the risk of effective law enforcement action by allowing Wal-Mart to switch corporate shells after various raids. SAC ¶95. As outlined in the SAC, despite repeated law enforcement raids, Wal-Mart continued dealings with the contractors, switching companies and crews in response to law enforcement efforts. SAC ¶¶77, 100. Because plaintiffs clearly allege that Wal-Mart made multiple financial transactions involving the proceeds of the immigration crimes committed by its contractors, which it knew and intended would further the contractors’ illegal practices, plaintiffs have properly pleaded multiple counts of money laundering sufficient alone to support Count I of the SAC.
47 In United States v. Truszkowski, 05-cr-00454 (N.D. Ill 2005), the federal government indicted Truszkowski, a Wal-Mart maintenance contractor, for conspiracy to encourage illegal aliens to remain in the United States through subcontracting with shell corporations to shield the employment of undocumented migrants at Wal-Mart stores. SAC Ex. I, pp. 5-8. Truszkowski eventually pleaded guilty to money laundering and immigration offenses. In the plea agreement, the government specifically stated that “through and as a result of this conspiracy, Truszkowski was able to receive criminal proceeds in the form of Wal-Mart’s payments, through an intermediate subcontractor . . . for the cleaning services provided . . .,” and that Truszkowski thereafter laundered those criminal proceeds through the issuance of payroll checks and wire transfers to a Wal-Mart subcontractor who then paid the immigrant laborers. FAC ¶85 (emphasis added); see also SAC Ex. I, pp.6-7.
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Further, plaintiffs have sufficiently alleged that Wal-Mart conspired with the contractors to commit money laundering. To plead conspiracy to launder money, a plaintiff must allege (1) an agreement between two or more people to commit money laundering, (2) an overt act taken to further the purpose of the agreement, and (3) defendant joined the agreement knowing its purpose and with the intent to further the illegal purpose. See e.g., United States v. Conley, 37 F.3d 970, 976 (3d Cir. 1994). Wal-Mart knew and intended (because of the interrelationship of the shell companies) that payments to the various corporate shells would necessarily result in multiple financial transactions between the shell corporations and their subcontractors and principals. SAC ¶58. As outlined in Exhibit E to the SAC at pp. 100-105, WalMart’s payments to the contractors were in furtherance of the conspiracy to money launder as they engendered multiple transactions among the contractors and with sub-contractors.
Specifically, during the period 1999-2001, the shell corporations, many of which maintained accounts at Normandy Bank in St. Louis, conducted multiple transfers of funds between and among the companies which received payments from Wal-Mart (as well as with other Walters-controlled companies and subcontractors). SAC ¶95; SAC Ex. E, pp. 98-113. Specifically, Walters-controlled companies also transferred $3.5 million dollars by check, wire transfer and credit memo to DJR, Romano’s company that provided undocumented migrant cleaning crews to Wal-Mart through Truszkowski, who pleaded guilty to money laundering of the proceeds of this scheme. SAC ¶95; SAC Ex. E, pp. 101-02. The exact amounts of these fraudulent transfers are set out in detail on pages 101 and 102 of the Forfeiture Complaint, attached as Exhibit E to the SAC.
Wal-Mart would have this Court discount the money laundering allegations by drawing a different interpretation from Scheutz’s direction to Walters, arguing that the SAC
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“reflects a deliberate misreading” of the affidavit of the federal law enforcement agent that is Exhibit A to the SAC. Mot. at 22.48 But that, at best, confuses what the plaintiffs have to plead
at the outset with what they will be required to prove after discovery. See Seville Indus.
Machinery, 742 F.2d at 790. The allegations of the SAC are that senior Wal-Mart management
directed Wal-Mart’s leading maintenance contractor to set up shell corporations knowing that
those contractors would engage in multiple and systematic immigration crimes and that Wal-
Mart then paid those contractors tens of millions of dollars as the proceeds of those crimes and to
support and further the scheme. That is all that must be pleaded to establish money laundering
by Wal-Mart.
2. The Immigration Predicates a. Aiding and Abetting Immigration Crimes of the Contractors
Wal-Mart used separate contractors to supply the undocumented labor to avoid
having to verify the immigration status of the janitors itself. (Indeed, before it directed the
contractors to set up shell companies, Wal-Mart discontinued its former practice of verifying the
immigration status of contractor employees. SAC ¶47). The SAC is replete with allegations that Wal-Mart contractors harbored illegal aliens under 8 U.S.C. §1324(a)(1)(A)(iii),49 transported illegal aliens under 8 U.S.C. §1324(a)(1)(A)(ii);50 encouraged illegal aliens to reside in the
48 As Wal-Mart sees it, Scheutz was only advising Walters how to circumvent Wal-Mart’s own internal guidelines and avoid being fired. Mot. at 22. But far from “firing” Walters after law enforcement raids at Wal-Mart stores, Schuetz had Wal-Mart pay Walters tens of millions of dollars through shell companies to continue to supply the necessary labor. As Scheutz said, he “like[d] those Polocks” Walters supplied because they could be easily exploited. SAC Ex. A, pp. 41-42; SAC ¶47.
49 Harboring requires that defendant: (1) knew or recklessly disregarded the fact that an alien is illegally in the country and (2) concealed, harbored, or shielded the alien from detection. See e.g., United States v. Baftiri, No. CR 99-47, 2000 WL 34030830 at *1-2 (N.D. Iowa, April 11, 2000) (harboring shown by defendant’s employment of illegal aliens, provision of housing and transportation, and a pattern and practice of hiring family members of those unauthorized aliens already in his employ).
50 Transporting requires that (1) the alien was not lawfully in the United States; (2) defendant knew or recklessly disregarded that fact; (3) defendant knowingly transported the alien, and (4) the transporting was done in furtherance of the alien’s illegal presence in the United States. See e.g., United States v. Guerra-Garcia, 336 F.3d
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United States under 8 U.S.C. §1324(a)(1)(A)(iv)51 and engaged in conspiracies among themselves to do so. SAC ¶¶78-92.
Specifically, a number of Walters-controlled companies that supplied janitorial labor to Wal-Mart admitted to criminal conspiracies to transport and encourage illegal aliens to reside in the United States. SAC ¶80. Walters’ subcontractors CMS of Queensbury, DJR and Truszkowski themselves pleaded guilty to similar immigration conspiracies, and Walters subcontractor Miroslaw Dryjack pleaded guilty to bringing in or harboring undocumented immigrants. SAC ¶¶81, 82, 83.
The SAC also alleges that Wal-Mart contractors encouraged undocumented janitors to enter the United States (with the promise of employment at Wal-Mart), SAC ¶¶87-88, harbored and transported undocumented janitors once here by working them in crews with relatives, providing them with communal lodging and false documentation and then transporting them across the United States as part of various work crews for Wal-Mart. SAC ¶¶89-92, 103-4, 113-14, 115-16.52
Wal-Mart knew and intended that its contractors would systematically engage in immigration crimes to supply it with undocumented janitorial labor. SAC ¶3, 47, 58, 63, 75. Plaintiffs allege that Wal-Mart aided and abetted, within the meaning of 8 U.S.C.
19, 23 (1st Cir. 2003) (inferring defendants’ knowledge of alien’s undocumented status where alien carried only a small bag, did not speak English, and agreed to ride on a bus where no passenger was released without full payment).
51A violation of §1324(a)(1)(A)(iv) requires that defendant (1) encouraged or induced an alien to come to or remain in the United States while (2) knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law. United States v. Yoshida, 303 F.3d 1145, 1149 (9th Cir. 2002) (affirming conviction for encouraging based on inferences from circumstantial evidence); see also United States v. Oloyede, 982 F.2d 133, 137 (4th Cir. 1992) (“‘encouraging’ relates to actions taken to convince the illegal alien . . . to stay in this country”).
52 SAC Ex. E, pp. 16-18, 23, 45, 137-138.
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§1324(a)(1)(A)(v)(II), the commission of the immigration predicates alleged in the complaint.53 Specifically, the SAC alleges that Wal-Mart undertook the following affirmative steps to aid the criminal venture of the contractors and sub-contractors. First, by insisting that contractors operate through multiple corporate shells and then financing the unlawful activity through payment to the multiple contractors, Wal-Mart knowingly associated itself with the contractors’ scheme, gave it the necessary support to succeed, and dulled the effectiveness of law enforcement efforts. SAC ¶112. The millions of dollars Wal-Mart paid to contractors underwrote not only the labor of the janitors but the contractors’ overhead costs, making the contractors’ crimes possible and helping to bring them about. SAC ¶112.54 Aiding and abetting is “a term of breadth” that “comprehends all assistance rendered by words, acts, encouragement, support, or presence.” Reves, 507 U.S. at 178. Wal-Mart clearly aided and abetted the contractors’ commission of the immigration predicates by rendering assistance through its directions and its financial support of the scheme.
Indeed, as is outlined in the SAC, following raids at Wal-Mart stores, Wal-Mart managers requested maintenance contractors to immediately provide replacement crews. SAC ¶113-16. The managers knew that in response the contractors would, and did, cause undocumented migrants to be transported across state lines to the Wal-Mart stores. SAC ¶11314. This affirmative conduct helped bring about the transporting offenses and furthered the presence of the janitors in the United States. See United States v. Barajas-Chavez, 162 F.3d
53 In order to find a defendant liable for aiding and abetting, the plaintiff must prove: (1) that the defendant associated with the criminal venture, (2) participated in the venture, and (3) sought by action to make the venture succeed. United States v. Romero-Cruz, 201 F.3d 374, 378 (5th Cir. 2000) (affirming defendant’s conviction for aiding and abetting the transportation of illegal aliens). Knowledge and intent, of course, may be inferred from circumstantial evidence. See, e.g., United States v. Johnson, 302 F.3d 139, 149 (3d Cir. 2002).
54 Cf. SAC Ex. I, p. 7 (Wal-Mart contractor pled guilty to indictment charging that payments made to undocumented aliens for maintenance work at Wal-Mart stores encouraged undocumented aliens to remain and reside in the United States).
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1285, 1289-90 (10th Cir. 1999) (defendant found guilty of transporting where he attempted to transport undocumented migrants from Arizona to Colorado so the aliens could look for work, noting that “[i]f their efforts had been successful, the benefits from finding employment undoubtedly would have assisted [the aliens] in remaining in the United States”); see also United States v. Hernandez, 327 F.3d 1110, 1112 (10th Cir. 2003) (same).
Taking all the foregoing as true as required by Rule 12(b)(6), the SAC adequately pleads that Wal-Mart knew of the systematic violation of immigration law by its contractors and that Wal-Mart supported and colluded with its contractors in these violations. That alone is sufficient to state a civil RICO claim based on aiding and abetting multiple immigration violations by the contractors and sub-contractors.
b. Conspiracy to commit immigration predicates The allegations above also support an inference that Wal-Mart conspired with the contractors to harbor, transport, and encourage aliens in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I). To make out this predicate, plaintiff must show: (1) an agreement between two or more persons to commit the crime, (2) an overt act in furtherance of the agreement by one of the conspirators, and (3) that the conspirator knew of, intended to join and participated in the conspiracy. See e.g., United States v. Avila-Dominguez, 610 F.2d 1266, 1271 (5th Cir. 1980). The SAC specifically alleges that Wal-Mart, through Schuetz, agreed with its contractors that the contractors would commit immigration predicates in order to supply WalMart with cheap labor. SAC ¶47. Schuetz, in directing Walters to set up various shell corporations, SAC ¶47, knew and intended that the contractors and their sub-contractors would (and, indeed, did) harbor, transport and encourage undocumented immigrant janitors. SAC ¶¶100-07. Indeed, Scheutz directed Walters to set up the separate companies after federal authorities raided Wal-Mart stores in 1997 and only after Wal-Mart discontinued its practice of
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verifying the immigration status of contractors’ employees. SAC ¶47. Wal-Mart then furthered the conspiracy by mailing checks payable to multiple shell corporations as profit for the contractors and compensation for the work performed by the undocumented migrant cleaning crews and by using Walters’ firms interchangeably, switching contractors following law enforcement actions in order to continue the scheme. SAC ¶¶100, 107; cf. SAC Ex. I, ¶¶5-7.
The SAC contains ample allegations that Wal-Mart engaged in a conspiracy with its maintenance contractors to commit multiple immigration crimes.
c. Wal-Mart’s Liability for Substantive Immigration Offenses (i) Harboring
As noted above, the essence of harboring is that the defendant knowingly “concealed, harbored, or shielded” an undocumented alien from detection. In ruling on WalMart’s initial motion to dismiss, this Court noted that to “harbor” is to give shelter or refuge to or to be the home or habitat of; to “conceal” is to prevent disclosure or recognition of or to place out of sight; and to “shield” is to protect with or as if with a shield or provide with a protective cover or shelter or to cut off from observation or hide. Zavala, 393 F. Supp.2d at 307.
In United States v. Zheng, 306 F.3d 1080, 1086 (11th Cir. 2002) (cited with approval in Zavala, 393 F. Supp.2d at 306), the Eleventh Circuit affirmed a harboring conviction noting that there was evidence that the defendant provided the undocumented aliens with housing and employment, which facilitated the aliens’ ability to remain in the United States. Similarly, in U.S. v. Lopez, 521 F.2d 437, 441 (2d Cir. 1975), the Second Circuit affirmed a harboring conviction where defendant provided housing to aliens, assisted the aliens in obtaining employment and transported them to and from their places of employment. The court held that these activities were meant to “facilitate the continued unlawful presence of the aliens in the US, which amounts to harboring.” Id. at 441. Thus “providing housing and employment may
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constitute ‘harboring’” and that an employer’s “provis[ion] [of the] back room of the store as a residence” may also constitute harboring. Zavala, 393 F. Supp.2d at 307; see also United States v. Singh, 261 F.3d 530, 532-33 (5th Cir. 2001).
In the SAC plaintiffs allege, with respect to a crew of four Bulgarian janitors who worked at a Wal-Mart store in Kansas City, Missouri, in 2001, that Wal-Mart permitted “the undocumented aliens to sleep in a back room in the store and to keep their personal belongings there knowing (or acting in reckless disregard of the fact) that they were undocumented aliens.” SAC ¶110. That allegation alone sufficiently pleads multiple counts of harboring. See Zheng, 306 F.3d at 1086.
In response Wal-Mart argues that the SAC only supports an inference that these janitors did nothing more than “nap” in the store. Mot. at 14. But, again, that is an argument about what the evidence is, not about what has been pleaded. The SAC alleges that Wal-Mart knowingly harbored at least that crew of four janitors – that alone is sufficient to make Wal-Mart a proper RICO defendant under Count I.
Moreover, after the SAC was filed, plaintiffs learned that on at least one occasion Walters’ company IMC reached an arrangement where Wal-Mart directly paid one of IMC’s subcontractors to house a crew. See Linsey Decl. Ex. B. IMC billed Wal-Mart for crew accommodations when the particular store (store 2472 in Winston-Salem, NC) changed its service start date because, as recited on IMC’s records, the “Sub agreed to keep crew there + ready to go if store paid apt. lease payment.”55
Plaintiffs further allege that Wal-Mart made a regular and systematic practice of locking janitors whom it knew were undocumented in its stores overnight. SAC ¶109. By
55 Linsey Decl. Ex. B.
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locking the janitors into the store at night, Wal-Mart “limited the ability of federal law enforcement authorities (and others) to detect the janitors while they were at work,” which in turn helped to facilitate the janitors’ continued employment and presence in the United States. See SAC ¶109 (allegations made under section entitled “harboring”). Wal-Mart systematically committed additional multiple acts of harboring by locking undocumented janitors into its stores at night. SAC ¶109.
These allegations are sufficient to defeat a motion to dismiss. See Mendoza, 301 F.3d at 1168 (noting the “generous notice pleading standard,” the court held complaint sufficient to survive a motion to dismiss where the plaintiff alleged “that defendants had knowledge of illegal harboring . . .”).
3. Involuntary Servitude The complaint sets out predicate acts of involuntary servitude under 18 U.S.C. §1584 sufficient to withstand Wal-Mart’s motion to dismiss. To make out a claim of involuntary servitude a plaintiff must allege that “the victim [was] forced to work for the defendant by the use or threat of physical restraint or physical injury, or by the use of coercion through law or the legal process.” United States v. Kozminski, 487 U.S. 931, 952 (1988) (emphasis added). In this connection, “other means of coercion . . . or of the victim’s special vulnerabilities” should be considered. Id.; see also United States v. Veerapol, 312 F.3d 1128, 1132 (9th Cir. 2002); United States v. Alzanki, 54 F.3d 994, 1004-5 (1st Cir. 1995) (upholding conviction for involuntary servitude involving threatened deportation of migrant); Kimes v. United States, 939 F.2d 776, 778 (9th Cir. 1991). The Supreme Court specifically noted in Kozminski that “threatening . . . an immigrant with deportation could constitute the threat of legal coercion that induces involuntary servitude, even though such a threat made to a[] . . .citizen . . .would be too implausible to produce involuntary servitude.” Kozminski, 487 U.S. at 948.
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In ruling on Wal-Mart’s initial motion to dismiss, this Court dismissed plaintiffs’ allegations of involuntary servitude, finding that plaintiffs failed to specifically allege the abuse suffered by plaintiffs at the hands of Wal-Mart’s maintenance contractors. Zavala, 393 F.Supp.2d at 311. The SAC alleges that, as set out in the government’s Forfeiture Action, SAC Ex. E, Wal-Mart contractors physically threatened and beat migrant janitors who worked at WalMart. SAC ¶¶118, 121, Exhibit E (Forfeiture Action) pp. 43, 47.
In urging that there is no basis to the involuntary servitude predicate, Wal-Mart attempts to defend its practice of locking janitors into its stores during their shifts, and ignores that threats of deportation can amount to coercion under Kozminski. This failure is fatal to Wal-Mart’s argument. Plaintiffs are undocumented migrants, speak little or no English and have little or no “money or mobility to escape work at Wal-Mart.” SAC ¶42. In SAC ¶120, plaintiffs allege that class members were threatened with “deportation or other adverse legal action.” This is based on specific incidents set out elsewhere, e.g., threats of deportation by Wal-Mart’s New Jersey contractor. Id. The same threat was made by a Czech contractor known at a WalMart store in Bristol, Connecticut, to plaintiffs Zednek and Jaros. Id. at ¶120; see also SAC Exhibit E (Forfeiture Action) at p. 47.
The SAC also alleges that plaintiffs were also physically coerced or threatened with physical coercion causing them to reasonably believe that, given their vulnerable status, they had no choice to avoid continued service as janitors in Wal-Mart stores. SAC ¶118; Exhibit E (Forfeiture Action) pp. 43, 47 (Wal-Mart contractors physically threatened and beat migrant janitors who worked at Wal-Mart). In this connection janitors who complained that they were not being paid were threatened with eviction proceedings and ultimately evicted from their homes. SAC ¶91. All of this, taken with the widespread practice of intentionally locking these
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vulnerable workers into its stores during their shifts, SAC ¶¶109, 118; see also SAC ¶¶8-16, 2122, 30 (named plaintiffs confined to stores during nocturnal working hours), adequately pleads involuntary servitude by Wal-Mart and its contractors of plaintiff class members.
D. The Activities of the Enterprise Harmed Plaintiffs 1. The Racketeering Activity Proximately Caused Plaintiffs’ Harm Section 1964(c) provides a cause of action for a “person injured in his business or
property by reason of a violation of Section 1962.” 18 U.S.C. §1964(c). If the racketeering activity can be said to have proximately caused an economic harm, the injured party may maintain an action against a RICO defendant. See Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 520 (3d Cir. 1998); see generally Holmes v, Securities Investor Protection Corp, 503 U.S. 258 (1992). In the RICO context, the Supreme Court has held that “[a]t the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support the claim.” Scheidler, 510 U.S. at 256. Here plaintiffs easily exceed this lenient standard as the SAC alleges far more than simple “general factual” allegations of harm resulting from the conduct of the enterprise. See e.g., SAC ¶121.
As noted in Brokerage Concepts, proximate cause under RICO draws on the common law of torts and, under Holmes, is primarily focused on the directness of the relationship between the plaintiff’s injury and the defendant’s conduct. Brokerage Concepts, 140 F.3d at 520. Thus, racketeering activity is said to have proximately caused an injury if the conduct is a “substantial factor in the sequence of responsible causation, and if the injury is reasonably foreseeable or anticipated as a natural consequence.” Rodriguez v. McKinney, 878 F.Supp. 744, 747 (E.D. Pa. 1995).
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Here, the economic harm to the plaintiffs was a foreseeable and intended result of the various predicate acts of racketeering. In 1996, RICO was amended to include immigration crimes as predicate acts of racketeering. Pub L. 104-132 §433 (1996). Thus, “Congress contemplated the enforcement of the immigration laws through [civil RICO actions.]” Mendoza, 301 F.3d at 1170. The reason employers violate Section 1324(a) is “to take advantage of [undocumented immigrants’] diminished bargaining position, so as to employ a cheaper labor force and compete unfairly on the basis of lower labor costs.” Colin, 271 F.3d at 383; cf. SAC ¶¶41-42. Plaintiffs suffered direct economic harm – among other things, deprivation of the FLSA-mandated overtime premiums and in some cases minimum wage – as a result of the violation of the immigration predicates. Wal-Mart and the contractors it conspired with could – and did – take advantage of their immigration status to exploit them economically.
The four courts of appeal to have considered the question of proximate causation in the context of a RICO enterprise involved in immigration crimes have all concluded that plaintiffs who allege economic harm due to the depressed labor costs made possible by use of undocumented labor may maintain RICO claims. In Colin, the Second Circuit reversed the trial court’s dismissal of the case under the Holmes proximate cause standard. There plaintiffs were cleaning contractors who alleged that they lost contracts because defendant’s “illegal hiring practices enabled it to lower its variable costs and thereby underbid competing firms.” Colin, 271 F.3d at 378. The court of appeals held that while there may be factual disputes over whether plaintiffs lost business to defendants because of the immigration predicates or some other reason, they very well “may show that they lost contracts directly because of the cost savings defendant realized through its scheme to employ illegal workers.” Id. at 382. In this connection the
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Second Circuit rejected the defendant’s argument – advanced by Wal-Mart here (Mot. 25) – that plaintiffs’ injury was caused by low wages paid not their immigration status:
Of course paying workers less than the prevailing wage and failing to withhold payroll taxes are not RICO predicate acts. Nonetheless, the purpose of the alleged violation of 8 U.S.C. §1324(a), the hiring of illegal alien workers, was to take advantage of their diminished bargaining position . . . [and] compete unfairly on the basis of [lower] labor costs. Colin, 271 F.3d at 383. The Ninth Circuit followed Colin in Mendoza. There plaintiffs were documented workers employed by fruitpackers who alleged that their employers “leveraged the hiring of undocumented immigrants in order to depress the[ir] wages.” Mendoza, 301 F.3d at 1166. The court rejected the notion that employees whose wages are depressed as a result of the hiring of undocumented immigrants presented only a passed-on injury of the sort involved in Holmes. Mendoza, 301 F.3d at 1170. The Ninth Circuit held that that documented workers had RICO standing based on the immigration predicates in part because the undocumented immigrants could not be counted on to bring suit themselves. Id. The Eleventh Circuit followed both Colin and Mendoza in Williams, an action similarly brought by documented workers alleging that they wage rates were depressed through the hiring of undocumented labor. There, too, the court held that defendant’s “widespread scheme of hiring and harboring of illegal workers” resulted in depressed wages sufficient to make out proximate causation under Holmes. Williams, 411 F.3d at 1262. If anything, plaintiffs’ harm there was more remote from the immigration predicates than plaintiffs allege here – participants in Wal-Mart’s enterprise committed the predicate acts of racketeering so that they could directly exploit the janitors themselves.
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Finally, the Sixth Circuit reversed a trial court dismissal of a similar RICO claim in Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004). There, plaintiffs alleged that wages paid at a chicken processing plan were depressed by defendant’s systematic use of undocumented migrant labor. The court, noting the Ninth Circuit’s holding in Mendoza, held that plaintiffs had alleged sufficient facts to avoid dismissal, noting that although the facts could be disputed, that could not be grounds for dismissal as a threshold matter. See id. at 619. The Sixth Circuit reached that conclusion despite the fact that the employees there enjoyed union representation which could be expected to raise pay above market levels. Id.
The RICO theory advanced here has been recognized most recently in Choimbol. There, undocumented janitors alleged that they were proximately harmed by an association-infact RICO enterprise comprised of resort hotels (where they worked) and providers of undocumented immigrant labor. Choimbol, 2006 WL §21763, at *1-2. As here, the janitors in Choimbol alleged that the enterprise harmed them by paying them wages below the FLSA minima, through commission of wire and mail fraud and money laundering predicate acts. Id. at *4-8. The district court rejected arguments that the janitor’s economic harm was too remote from the predicates alleged there denying the employer’s motion to dismiss.
This authority is fatal to Wal-Mart’s proximate cause argument. Here, plaintiffs were directly harmed by the immigration predicates because Wal-Mart could obtain janitorial labor at rates far below legally mandated levels only because it exploited the irregular immigration status of the janitors. Wal-Mart’s contention that the immigration offenses were, “at most, remote links in a causal chain,” Mot. at 26, that denied plaintiffs minimum wage and overtime must be rejected: participants in the enterprise committed the racketeering acts just so they could economically exploit plaintiffs. Under Wal-Mart’s theory, it is difficult to imagine
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what party would have standing to bring a civil RICO action based on criminal immigration violations. Wal-Mart and its contractors violated the immigration laws to gain access to a vulnerable labor pool. No more direct injury could be imagined from these RICO predicates.
E. Wal-Mart’s Attempt to Rely on an in Pari Delicto Defense Fails Wal-Mart’s argument that plaintiffs and putative class members lack RICO
standing because they worked in the United States illegally and thus their conduct “broke any causal connection” between Wal-Mart’s exploitative practices and plaintiffs’ injuries, Mot. p. 30, is nothing more than an invitation for this Court to erect an innocent party requirement upon plaintiffs seeking RICO. That invitation should be rejected as it is contrary to the language of the statute and without support in the case law.
There is nothing in the language of RICO that suggests that only innocent plaintiffs have a cause of action. Under Section 1964(c) “[a]ny person injured in his business or property by reason of a violation of Section 1962 . . .” has a claim under RICO without qualification. 18 U.S.C. §1964(c). The Supreme Court has consistently adhered to the language of the statute in interpreting its meaning and has rejected surplus requirements imposed by the lower courts but not found in the statute itself. See Scheidler, 510 U.S. 249 (rejecting requirement that defendants’ racketeering have an economic motive); Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) (rejecting RICO injury requirement). “If the defendant engages in a pattern of racketeering activity . . . and the racketeering activities injure the plaintiff in his business or property, the plaintiff has a claim under §1964(c). There is no room in the statutory language for an additional . . . requirement.” Sedima, 473 U.S. at 495.56
56 Wal-Mart’s argument is akin to the affirmative common-law defense of in pari delicto, which, where available, defeats a claim if (1) the plaintiff bears “substantially equal responsibility” for the alleged misdeeds, and (2) precluding plaintiff’s suit would not significantly impair enforcement of the relevant laws. Bateman Eichler, Hill Richards Inc. v. Berner, 472 U.S. 299, 306, 310-11 (1985). Here, Wal-Mart’s contention that “[h]aving chosen
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Contrary to Wal-Mart’s contention, Mot. at 29, the Third Circuit did not impose
an innocent party requirement in Doug Grant Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d
Cir. 2000). There, blackjack players skilled at card counting and corporations that operated card-
counting schools sued various casinos that took counter-measures to eliminate the card-counters
advantage in blackjack. Id. at 177-78. The court sustained dismissal of plaintiffs’ claims
finding that plaintiffs had failed to plead the commission of any predicate act by any defendant
because the counter-measures complained of were entirely legal. Id. at 187. The court further
noted in dicta that plaintiffs brought the harm they complained of on themselves because their
asserted losses were not caused by any illegal act of any defendant but as the result of their
knowing decision to gamble. Id. at 188. As demonstrated above, the commission of the
immigration predicates was the basis of plaintiffs’ injuries here. At base, Wal-Mart’s contention
is nothing more than the Dickensian notion, not supported by any case law, that plaintiffs should not be able to recover economic damages because they chose to work as janitors at Wal-Mart, 57
to break these [immigration] laws . . . Plaintiff’s cannot now seek to use the same violations that they knowingly and voluntarily committed to pursue RICO claims against Wal-Mart” Mot. at 30, is essentially an assertion of such an (unavailable) in pari delicto defense. See also Mot. at 26 (asserting that plaintiffs were “complicit in and benefited from” the commission of the immigration predicates and thus could not establish RICO standing). Wal-Mart’s attempt to shift the blame for its own exploitative practices onto plaintiffs fails as the Third Circuit has not adopted in pari delicto as a bar to RICO standing. In pari delicto is generally not available in RICO actions. See e.g., Biete, Co. v. Blomquist, 848 F. Supp. 1446 (D. Minn. 1994); In re National Mortgage Equity Corp., 636 F.Supp. 1138, 1156 (C.D. Cal. 1986). Indeed, such a requirement would be inconsistent with the language of the statute and with the Supreme Court’s anti-trust standing jurisprudence which served as a model for RICO. See Holmes, 503 U.S. at 268; McCarthy v. Recordex Serv., Inc., 80 F.3d 842, 855 (3d Cir. 1996) (“antitrust standing principles apply equally to allegations of RICO violations”). The Supreme Court explicitly eliminated in pari delicto as a defense to antitrust actions a generation ago. See Perma Life Mufflers, Inc. v. Int’l Parts Corp., 392 U.S. 134, 138-40 (1968), overruled on other grounds; Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984); see also Pinter v. Dahl, 486 U.S. 622, 632 (1988) (in pari delicto “is not appropriate in litigation arising under federal regulatory statutes”).
57 Of course nothing in 8 U.S.C. §1324(a)(1)(A) makes undocumented employment an immigration crime of employees and thus a predicate act of racketeering. Wal-Mart does not and cannot contend that plaintiffs themselves committed predicate acts of racketeering.
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despite the exploitative conditions, a position this Court implicitly rejected in denying WalMart’s motion to dismiss plaintiffs’ FLSA claims.58
In sum, the SAC contains sufficient allegations of standing; Wal-Mart’s motion to dismiss Count I should be denied.
F. Plaintiffs State A Rico Conspiracy Claim Under Section 1962(d) Even if Wal-Mart could somehow avoid liability for itself committing multiple
predicate acts of racketeering it is still a proper RICO defendant under Section 1962(d). That section provides that “[i]t shall be unlawful for any person to conspire to violate [§1962(c)].” 18 U.S.C. §1962(d). A defendant may be held liable for conspiracy to violate section 1962(c) if he knowingly agrees to facilitate a scheme which includes the operation or management of a RICO enterprise. Smith v. Berg, 247 F.3d 532, 538 (3d Cir. 2001). Facilitation of the scheme includes participation in the affairs of the enterprise with the knowledge and intent that other members of the conspiracy would commit two or more predicate offenses as a part of a pattern of racketeering activity. Id. at 537. But a Section 1962(d) defendant need not agree to personally commit two predicate acts, “it suffices that [defendant] adopt the goal of furthering or facilitating the criminal endeavor.” Salinas v. United States, 522 U.S. 52, 65 (1997) (affirming conviction under 1962(d)). A violation of §1962(c) is therefore not a prerequisite for liability under §1962(d). Zavala, 393 F.Supp.2d at 316, (quoting Smith, 247 F.3d at 537). All that is necessary to establish liability for a RICO conspiracy is “that the conspirators share a common purpose.” Id.; see also Salinas, §22 U.S. at 65.
Here, the Court initially dismissed plaintiffs’ RICO conspiracy claim finding that (1) plaintiffs failed to allege the existence of an unlawful enterprise and (2) plaintiffs failed to
58 393 F.Supp.2d at 322-23.
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allege Wal-Mart agreed with its co-conspirators to the commission of RICO predicates. Zavala, 393 F.Supp.2d at 317. The Court granted plaintiffs leave to amend their complaint, and the SAC clearly cures whatever pleading deficiencies there may have been.
First, the SAC alleges that Wal-Mart and its maintenance contractors formed an association-in-fact enterprise which was involved in a pattern of racketeering. See SAC ¶¶3, 41. Second, as shown above, supra pp. 24-34, Wal-Mart agreed with and indeed directed its maintenance contractors to commit predicate acts of money laundering and immigration violations to facilitate the scheme. See SAC ¶¶3, 41-48, 51-52, 58, 67, 74-76.
The SAC clearly alleges Wal-Mart engaged in a RICO conspiracy with its maintenance contractors. SAC ¶¶3 (“To avoid and evade responsibility under IRCA and to profit from illegal activity, Wal-Mart created an association-in-fact criminal enterprise, through which it conspired with various cleaning contractors who it knew would provide janitors to clean its stores who were not legally authorized to work in the United States.”). Plaintiffs allege in detail that Wal-Mart established the scheme, SAC ¶43, directed the scheme, SAC ¶¶43, 44, conspired with contractors to establish shell corporations to further the scheme and shield it from detection through laundering the proceeds of the scheme. SAC ¶47, conspired with contractors to violate federal immigration laws to facilitate the scheme, SAC ¶¶74, 99, and profited from the operation of the scheme, SAC ¶¶41, 121. Multiple Wal-Mart contractors have been convicted of multiple predicate immigration and other crimes based on their providing undocumented migrant janitors to Wal-Mart. SAC ¶¶80-83. Based on these allegations, it is an understatement to say that Wal-Mart adopted the goal of the enterprise - Wal-Mart created the enterprise and operated it to achieve the goal, namely profiting from the exploitation of undocumented migrant labor.
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Wal-Mart does not contest that plaintiffs have sufficiently cured their RICO conspiracy pleading deficiencies. Instead, Wal-Mart’s only attack on plaintiffs’ RICO conspiracy claim is the (incorrect) notion that plaintiffs lack standing to assert a violation of 1962(d) because, as Wal-Mart would have it, plaintiffs’ injuries flow not from commission of the predicate acts, but from violations of the FLSA, Mot. at 39. As demonstrated supra pp. 35-39, plaintiffs’ have adequately pleaded that their injuries stem from the racketeering conduct. Four courts of appeal concur.
Wal-Mart’s motion to dismiss Count II of the SAC should be denied.
CONCLUSION For the foregoing reasons, this Court should deny Wal-Mart’s motion to dismiss. Dated: March 20, 2006. Respectfully submitted,

/s/ James L. Linsey____________ James L. Linsey Thomas N. Ciantra Oriana Vigliotti COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036 (212) 563-4100
Attorneys for Plaintiffs

/s/ Gilberto Garcia_____________ Gilberto Garcia GARCIA AND KRICKO ATTORNEYS AT LAW 560 Sylvan Avenue Englewood Cliffs, New Jersey 07632 (201) 894-1998

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CERTIFICATE OF SERVICE This is to certify that on this 20th day of March 2006, a true copy of the foregoing Declaration of James L. Linsey and Plaintiffs’ Memorandum of Law in Opposition to WalMart’s Motion to Dismiss were served on counsel of record for defendant Wal-Mart Stores, Inc., by dispatching same via Federal Express, overnight mail, addressed as follows:
Robert H. Bernstein Reed Smith LLP The Legal Center One Riverfront Plaza, First Floor Newark, NJ 07102-5400 David P. Murray Wilkie Farr & Gallagher LLP 1875 K Street, N.W. Washington, D.C. 20006-1238
/s/ Eyad Asad_______________ Eyad Asad
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 Case 2:03-cv-05309-JAG-MCA Document 75-1 Filed 11/21/2005 Page 1 of 67

James L. Linsey Thomas N. Ciantra Oriana Vigliotti COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036 (212) 563-4100

Gilberto Garcia Mary Ann Kricko GARCIA AND KRICKO ATTORNEYS AT LAW 560 Sylvan Avenue Englewood Cliffs, NJ 07632 (201) 894-1998

Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

------------------------------------------------------------------ x

:

VICTOR ZAVALA, EUNICE GOMEZ,

:

ANTONIO FLORES, OCTAVIO DENISIO,

:

HIPOLITO PALACIOS, CARLOS ALBERTO

:

TELLO, MAXIMINO MENDEZ, ARTURO

:

ZAVALA, FILIPE CONDADO, LUIS

:

GUTIERREZ, DANIEL ANTONIO CRUZ, PETR :

ZEDNEK, TERESA JAROS, JIRI PFAUSER,

:

HANA PFAUSEROVA, PAVEL KUNC and

:

MARTIN MACAK, on behalf of themselves and all :

others similarly situated,

:

:

Plaintiffs,

:

:

- against -

:

:

WAL-MART STORES, INC.,

:

:

Defendant.

:

:

------------------------------------------------------------------ x

Civil Action No. 03-Civ.-5309 (JAG)
SECOND AMENDED CLASS ACTION COMPLAINT AND JURY DEMAND

Case 2:03-cv-05309-JAG-MCA Document 75-1 Filed 11/21/2005 Page 2 of 67

SECOND AMENDED CLASS ACTION COMPLAINT AND JURY DEMAND
Plaintiffs Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala, Filipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jiri Pfauser, Hana Pfauserova, Pavel Kunc and Martin Macak, on behalf of themselves and all others similarly situated, by and through their attorneys Cohen, Weiss and Simon LLP, and Garcia and Kricko, for their Second Amended Class Action Complaint state as follows:

INTRODUCTION

1.

This is an action by plaintiffs on their own behalf and on behalf of all

others similarly situated under the Racketeer Influenced Corrupt Organizations Act (“RICO”), 18

U.S.C. §1961, et seq., the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §201, et seq., and the

common law of false imprisonment to seek redress for damages directly caused by the

exploitative criminal enterprise created by defendant Wal-Mart Stores, Inc. (“Wal-Mart”) who,

acting in combination with its various janitorial contractors, systematically violated immigration

and protective wage and hour laws and other laws for its own profit and benefit.

2.

Beginning in no later than March 1997, senior Wal-Mart management,

realizing that Wal-Mart could substantially reduce costs and substantially increase profits were it

to rely on the labor of undocumented migrants to clean its thousands of stores, created a criminal

enterprise that involved conspiracies to violate, as well as substantive violations, of federal

immigration law and other laws. Because of their undocumented status, migrants are unable to

organize themselves collectively to demand lawful compensation and humane working

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conditions. And because basic janitorial labor is largely unskilled, undocumented migrant janitors are easily replaceable. For these reasons, undocumented migrants are readily and easily exploited by unscrupulous employers.

3.

The federal Immigration Reform and Control Act, 8 U.S.C. §1324 et

seq., (“IRCA”) and accompanying regulations, require employers to verify, under penalty of

perjury, that they have examined documents produced by each employee which establish the

individual’s authorization for employment in the United States. To avoid and evade

responsibility under IRCA and to profit from illegal activity, Wal-Mart created an association-in-

fact criminal enterprise, through which it conspired with various cleaning contractors who it

knew would provide janitors to clean its stores who were not legally authorized to work in the

United States. These migrants worked well in excess of 40 hours a week and received no

overtime compensation. In some cases migrants were paid less than the minimum wage. To

shield its reliance on undocumented labor, Wal-Mart senior management instructed and

encouraged contractors to create a web of alter ego companies that permitted Wal-Mart to

continue to do business with the principals and allowed the migrant hiring scheme to flourish

despite repeated law enforcement actions. The contractors did so, associating with Wal-Mart in

the enterprise. Wal-Mart well knew and intended that maintenance contractors it relied upon

routinely and systematically encouraged, harbored and transported unlawful migrant labor in

violation of IRCA, and Wal-Mart itself both aided and abetted the encouraging, transporting and

harboring of its contractors and committed certain such offenses as a principal.

4.

This action is directed at compensating plaintiffs for the harm caused to

them by this criminal enterprise.

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JURISDICTION AND VENUE

5.

This Court’s jurisdiction is based upon 28 U.S.C. §§1331 and 1337;

29 U.S.C. §216(b); 18 U.S.C. §1964(c), and applicable principles of supplemental jurisdiction

under 28 U.S.C. §1367(a).

6.

Venue is proper in this judicial district pursuant to 28 U.S.C. §§1391(b)

and (d) and 18 U.S.C. §1965.

THE PARTIES

Plaintiffs And Class Representatives

7.

Plaintiffs Victor Zavala, Eunice Gomez, Antonio Flores, Octavio

Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala and Filipe

Condado are (or were at material times) residents of the State of New Jersey and are nationals of

Mexico. Plaintiffs Luis Gutierrez and Daniel Antonio Cruz are (or were at material times)

residents of the State of Texas and nationals of Mexico. Plaintiff Petr Zednek was at material

times a resident of the States of Connecticut, Michigan, Georgia and other states and is a national

of the Czech Republic. Plaintiff Teresa Jaros was at material times a resident of the States of

Connecticut, Michigan, Georgia and other states and is a Polish national. Plaintiffs Jiri Pfauser

and Hana Pfauserova were at material times residents of Florida and nationals of the Czech

Republic. Plaintiff Martin Macak was at material times a resident of Virginia and a national of

Slovakia. Plaintiff Pavel Kunc was at material times a resident of Virginia and is a Czech

national. These plaintiffs (the “Class Representatives”) seek to represent a class consisting of

thousands of undocumented and recently documented immigrants, currently, formerly, or in the

future to be, employed as janitors to clean Wal-Mart stores. Each of the Class Representatives 3

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worked for Wal-Mart through one or more of its various co-employer maintenance contractors without legal authorization to do so under federal immigration law. At material times, plaintiffs Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala and Filipe Condado were employed within the jurisdiction of this Court.

8.

Victor Zavala is a native of Mexico and at material times a resident of

New Jersey. He was born on May 9, 1975 and speaks little or no English. On October 23, 2003,

as part of its investigation dubbed “Operation Rollback”, Zavala was arrested in a raid by U.S.

Immigration Control and Enforcement (“USICE”), the successor agency to the Immigration and

Naturalization Service (“INS”), at the Wal-Mart store located in Piscataway, New Jersey. Zavala

has been granted deferred action status from deportation by USICE. He performed cleaning

services for Wal-Mart for approximately 36 months. During that time, he was paid weekly a

lump sum of approximately $500 and was obligated to work seven days a week. He worked at

least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in

the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared

with a key. Zavala was not provided with workers’ compensation, health insurance coverage,

sick leave pay, or disability benefits and did not have payroll taxes withheld from his pay.

9.

Eunice Gomez is a native of Mexico and at material times a resident of

New Jersey. She was born on August 30, 1977 and speaks little or no English. Gomez was

arrested in USICE’s October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and

has been granted deferred action status from deportation by USICE. Gomez performed cleaning

services for Wal-Mart for 29 months. She was paid weekly a lump sum of approximately $500

4

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and was obligated to work seven days a week. She worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked her in the store at night, and she was not able to leave unless and until a Wal-Mart manager appeared with a key. Gomez was not provided with workers’ compensation or health insurance coverage, sick leave pay, or disability benefits and did not have payroll taxes withheld from her pay.
10. Antonio Flores is a native of Mexico and at material times a resident of the State of New Jersey. He was born on June 13, 1978 and speaks little or no English. Flores was arrested in USICE’s October 23, 2003 raid in Piscataway, New Jersey and was granted deferred action status from deportation by USICE but has now returned to this native town of Atlixco, Puebla, Mexico. Flores performed cleaning services for Wal-Mart for the 24 months preceding his arrest at Wal-Mart stores in New Jersey. He was paid weekly a lump sum of approximately $400 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. On one occasion, Flores, a diabetic, cut his hand severely while working at a Wal-Mart store, but because he was locked in, he was forced to wait until the next morning to seek necessary medical attention at a hospital. Flores did not have workers’ compensation or health insurance benefits, was not entitled to receive sick leave disability benefits, and did not have payroll taxes withheld from his pay.
11. Octavio Denisio is a native of Mexico and at material times a resident of New Jersey. He was born on November 11, 1984 and speaks little or no English. Denisio was arrested in USICE’s October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and
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has been granted deferred action status from deportation by USICE. Denisio performed cleaning services for Wal-Mart during the time period relevant to this lawsuit. Denisio was paid weekly a lump sum of approximately $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Denisio was not provided with workers’ compensation or health insurance coverage, sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
12. Hipolito Palacios is a native of Mexico and at material times a resident of New Jersey. He was born on August 13, 1979 and speaks little or no English. Palacios was arrested in USICE’s October 23, 2003 raid of the Wal-Mart store located in Piscataway, New Jersey and is presently in deportation proceedings. Palacios performed cleaning services for Wal-Mart for 42 months during the time period relevant to this lawsuit. He was paid weekly a lump sum of approximately $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Palacios was not provided with workers’ compensation or health insurance coverage, sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
13. Carlos Alberto Tello is a native of Mexico and at material times a resident of New Jersey. He was born on September 9, 1979 and speaks little or no English. Tello was arrested in USICE’s October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and has been granted deferred action status from deportation by USICE. Tello has now returned to his native Mexico. Tello performed cleaning services for Wal-Mart for one year
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prior to his arrest. He was paid weekly in a lump sum of $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Tello was not provided with workers’ compensation or health insurance coverage, was not provided with sick leave or disability insurance coverage and did not have payroll taxes withheld from his pay.
14. Maximino Mendez is a native of Mexico and at material times a resident of New Jersey. He was born on May 11, 1984 and speaks little or no English. Mendez was arrested in USICE’s October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and has been granted deferred action status from deportation by USICE. Mendez performed cleaning services for Wal-Mart for one year prior to his arrest. He was paid weekly in a lump sum of approximately $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Mendez did not have workers’ compensation or health insurance coverage, was not provided with sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
15. Arturo Zavala is a native of Mexico and at material times a resident of New Jersey. He was born on February 10, 1974. Zavala was arrested in USICE’s October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and has returned to his native Mexico. He performed cleaning services for Wal-Mart for two months prior to his arrest. Zavala was paid weekly in lump sum of $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management
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locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Zavala did not have workers’ compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
16. Felipe Condado is a native of Mexico and at material times a resident of New Jersey. He was born on April 20, 1974 and speaks little or no English. Condado was arrested in USICE’s October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and has been granted deferred action status from deportation by USICE. Condado performed cleaning services for Wal-Mart for six months prior to his arrest. He was paid weekly a lump sum of $350 and was obligated to work seven days a week. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. He worked at least 60 hours per week but did not receive overtime pay. Condado did not have workers’ compensation or health insurance benefits, was not entitled to receive sick disability benefits and did not have payroll taxes withheld from his pay.
17. Plaintiffs Victor Zavala, Gomez, Flores, Denisio, Palacios, Tello, Mendez, Zavala and Condado worked for Wal-Mart through a variety of shell companies owned or controlled by Kenneth Clancey or members of his immediate family. These entities included Facility Solutions Incorporated; Facility Solutions International, Mitchell Industries, LLC; Ruth and Sons LLC; JWM Commercial Cleaning; and RT Cleaning.
18. Luis Gutierrez is a native of Mexico and at material times a resident of Texas. He speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Gutierrez
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was arrested in USICE’s October 23, 2003 raid of a Wal-Mart store in San Antonio, Texas, and is presently released under his own recognizance. He has performed cleaning services at various Wal-Mart stores in San Antonio, Round Rock, Cedar Park, Marble Falls and Kerrville, Texas, beginning in November 2001 and continuing through December 2003. He was paid weekly a lump sum of $500 and was obligated to work at least six days a week and often seven days a week. He worked at least 48 hours per week but did not receive overtime pay. Gutierrez did not have workers’ compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
19. Daniel Antonio Cruz is a native of Mexico and at material times a resident of Texas. He speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Cruz was arrested in USICE’s October 23, 2003 raid of a Wal-Mart store in San Antonio, Texas, and is presently released under his own recognizance. He performed cleaning services at Wal-Mart stores in San Antonio beginning in May 2003 and continuing through December 11, 2003. He was paid weekly a lump sum of $325 and was obligated to work seven days a week. He worked approximately 60 hours per week but did not receive overtime pay. Cruz was not provided with workers’ compensation or health insurance coverage, sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
20. Plaintiffs Gutierrez and Cruz worked for Wal-Mart through firms owned or controlled by Tom Parker. These included Alamo National Service and Alamo Cleaning Services, Inc.
21. Petr Zednek is a national of the Czech Republic and at material times a 9

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resident of Connecticut, Michigan, Georgia and other states. He speaks little English. Zednek performed cleaning services at Wal-Mart stores in Bristol, Connecticut; Alma, Michigan; and Monroe, Georgia at times between September 2002 and December 2003. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. He was promised compensation of approximately $1,500 per month and was obligated to work seven days a week. He worked approximately 70 hours per week but did not receive overtime pay. In Alma, Michigan, Zednek’s contractor refused to pay him in retaliation for his refusal to purchase a fraudulent social security number from the contractor. In addition, one of his paychecks (for $1,492) was returned for “insufficient funds,” and he was not paid at all for that month’s work. Wal-Mart management in Michigan and Georgia knew of this situation and of Zednek’s undocumented status yet continued to use him to clean their stores. While working as a janitor at Wal-Mart, he was repeatedly abused and told that he could be deported if he complained. Except for only five days when the store at Alma, Michigan was open 24 hours per day for the Christmas holiday season, Zednek was locked in at night at all of the Wal-Mart stores where he worked, and could not leave unless and until a Wal-Mart manager appeared with a key. Zednek was not provided with workers’ compensation or health insurance coverage, sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
22. Teresa Jaros is a Polish national and at material times a resident of Connecticut, Michigan, Georgia and other states. She speaks little or no English. Her immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Jaros performed cleaning services at Wal-Mart stores in
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Bristol, Connecticut; Alma, Michigan; and Monroe, Georgia at times between September 2002 and December 2003. She was promised compensation of $1,500 per month and was obligated to work seven days a week. She worked approximately 70 hours per week but did not receive overtime pay. In Alma, Michigan, Jaros’ contractor refused to pay her in retaliation for her refusal to purchase a fraudulent social security number from the contractor. Also, one of her paychecks (for $1,306.40) was returned for “insufficient funds,” and she was not paid at all for that month’s work. Wal-Mart management in Michigan and Georgia knew of this situation and Jaros’ undocumented status yet continued to use her to clean in their stores. While working as a janitor at Wal-Mart, Jaros was repeatedly abused and told that she could be deported if she complained. Except for only five days when the Wal-Mart store at Alma, Michigan, was open for 24 hours per day for the holiday season, Jaros was locked in at night at all of the Wal-Mart stores where she worked, and could not leave unless and until a Wal-Mart manager appeared with a key. Jaros did not have workers’ compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from her pay.
23. Plaintiffs Zednek and Jaros worked for Wal-Mart through a variety of firms including: Daniel’s Cleaning Service; SCSI or Southern Cleaning Services Inc.; United Services Sources; Proline Management, Inc.; KK Unlimited, and Kina Cleaning.
24. Jiri Pfauser is a national of the Czech Republic and was at material times a resident of Florida. He speaks little or no English. His immigration status at material times was that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Pfauser performed cleaning services at Wal-Mart stores in Starkville,
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Mississippi and West Palm Beach, Florida at times between February 2001 and June 2002. He was promised compensation of $1,500 per month and was obligated to work seven days a week. He worked a minimum of 56 hours per week but did not receive overtime pay. He was required to pay a “security deposit” of $500 to ensure that he did not leave his work at Wal-Mart without permission. He was never paid this $500 nor was he paid at all for six weeks’ work at Wal-Mart in May and June, 2002. Pfauser did not have workers’ compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
25. Hana Pfauserova is a national of the Czech Republic and was at material times a resident of Florida. She speaks little or no English. Her immigration status was at material times that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Pfauserova performed cleaning services at Wal-Mart stores in Starkville, Mississippi and West Palm Beach, Florida at times between February 2001 and June 2002. She was promised compensation of $1,400 per month and was obligated to work seven days a week. She worked a minimum of 56 hours per week but did not receive overtime pay. She was required to pay a “security deposit” of $500 to ensure that she did not leave her work at Wal-Mart without permission. She was never paid this $500 nor was she paid at all for six weeks’ work at Wal-Mart in May and June, 2002. Pfauserova did not have workers’ compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from her pay.
26. Pfauser and Pfauserova worked at Wal-Mart through an individual named Walter Budniak.
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27. Martin Macak is a national of Slovakia and at material times a resident of Virginia. He speaks little or no English. Between 1996 and October 23, 2003 he was a resident of the United States and performed cleaning services at Wal-Mart stores in Winchester, Alexandria and Sterling, Virginia. At relevant times until he was arrested in USICE’s October 23, 2003 raid of the Wal-Mart store in Sterling, Virginia, Macak’s status was that of an undocumented alien subject to deportation from the United States at the initiative of USICE. On October 23, 2003 he was arrested and given a notice to appear by USICE and is presently released upon his own recognizance. He was promised compensation of between $1,300 and $2,000 per month for his work at Wal-Mart and was obligated to work seven days a week. He worked approximately 56 hours per week but did not receive overtime pay. In approximately 1999, one of Macak’s janitor co-workers, also from Slovakia and an undocumented migrant, was summarily fired on false charges of misconduct by Chuck Richards, the Wal-Mart store manager in Winchester, Virginia. Richards ordered Macak’s co-worker to stop work immediately and permanently leave the Wal-Mart store and parking lot within 60 seconds’ time. Macak did not have workers’ compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay. Macak worked at Wal-Mart through a variety of cleaning contractors: Crystal Clear; Handy Man Cleaning Service; Floor Magi; and Bright Management.
28. Pavel Kunc is a national of the Czech Republic and was at material times a resident of Virginia. He speaks little or no English. Between February 2003 and October 23, 2003 he was a resident of the United States and performed cleaning services at a Wal-Mart store in Madison Heights, Virginia. At relevant times until he was arrested in
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USICE’s October 23, 2003 raid of the Wal-Mart store in Madison Heights, Virginia, Kunc’s status was that of an undocumented alien subject to deportation from the United States at the initiative of USICE. His employment at Wal-Mart was arranged for him in the Czech Republic before his entry to the United States. He was promised compensation of approximately $1,500 per month and was obligated to work seven days a week. Sometimes he did not receive any pay at all for as much as one month’s work. He worked approximately 70 hours per week but did not receive overtime pay. One of Kunc’s co-workers, also undocumented, specifically advised the Wal-Mart store manager that the cleaners, including Kunc, did not have work authorization. Despite this knowledge, the Wal-Mart store manager continued using Kunc and the others to clean the Wal-Mart store. Kunc did not have workers’ compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay. Defendant
29. Wal-Mart is a corporation formed under the laws of the State of Delaware with its principal corporate offices in Bentonville, Arkansas. Wal-Mart has aggressively followed a low-cost, labor-hostile, high-volume sales strategy that has led it to become the largest employer in the United States and the largest retailer in the world. Wal-Mart operates thousands of stores in all fifty states, including locations where Class Representatives and other members of the plaintiff class were employed.
CLASS ACTION ALLEGATIONS 30. Class Representatives bring this action for back pay, damages, including treble and punitive damages, injunctive, declaratory and other relief on their own behalf and on
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behalf of a class comprised of immigrant janitors who have been, are, or will be employed as janitors at Wal-Mart stores in the United States and who were denied the wages, benefits or other protections to which they are entitled by law. In addition, Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala, Felipe Condado, Petr Zednek and Teresa Jaros (Subclass Representatives) bring this action on behalf of a subclass comprised of all class members who were falsely imprisoned or otherwise confined by Wal-Mart and its agents’ widespread practice of locking employees inside Wal-Mart stores while they worked.
31. The size of the class makes a class action both necessary and efficient. The class consists of thousands of immigrant janitors employed at Wal-Mart stores throughout the United States and an indefinite number of immigrant janitors who were employed or are to be employed in Wal-Mart stores. The size of the subclass is unknown but, on information and belief, consists of at least one hundred janitors. Members of the class and subclass are ascertainable but are so numerous as to make joinder inherently impossible.
32. This case involves common questions of law and fact affecting the rights of all class members, including but not limited to: (a) the status of plaintiffs as employees of Wal-Mart under applicable federal laws; (b) whether Wal-Mart employed plaintiffs or suffered or permitted plaintiffs to be employed in its retail stores; (c) whether Wal-Mart formed an association-in-fact criminal enterprise with its maintenance contractors to exploit plaintiffs; (d) whether Wal-Mart and its contractors participated in the affairs of that criminal enterprise by committing predicate acts of racketeering and; (f) the relief necessary to remedy Wal-Mart’s unlawful conduct as alleged in this Second Amended Complaint.
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33. The claims of the Class Representatives are typical of the claims of the class as a whole. Wal-Mart’s illegal wage and labor practices alleged in this Second Amended Complaint concerning the named plaintiffs are typical of the practices that Wal-Mart applies to class members nationwide. The claims of the Subclass Representatives are typical of the claims of the subclass as a whole. The policy and practice of locking these employees in at Wal-Mart Stores has had a detrimental effect on other members of the subclass nationwide.
34. The Class and Subclass Representatives can adequately and fairly represent the interests of the class and subclass as defined above, because their individual interests are consistent with, not antagonistic to, the interests of the class and subclass.
35. Counsel for plaintiffs possess the requisite resources and ability to prosecute this case as a class action and are experienced labor and employment attorneys who have successfully litigated other cases involving similar issues.
36. Wal-Mart and its contractors have implemented a scheme and associated to form an enterprise which is generally applicable to the plaintiff class, making it appropriate to issue final injunctive relief and corresponding declaratory relief with respect to the class as a whole. Class certification is also appropriate because the common questions of law and fact predominate over any questions affecting only individual members of the class. Further, the prosecution of separate actions against Wal-Mart by individual class members would create a risk of inconsistent or varying adjudications which would establish incompatible standards of conduct for Wal-Mart. For all these and other reasons, a class action is superior to other available methods for the fair and efficient adjudication of the controversy set forth in this Second Amended Complaint.
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FACTUAL BASIS FOR CLAIMS Wal-Mart’s Role as Employer
37. At all material times Wal-Mart acted as an employer or joint employer of its janitorial services personnel, including plaintiffs and the class they represent, within the meaning of FLSA §3(d), 29 U.S.C. §203(d), and 29 C.F.R. §791.2, and federal immigration law. Wal-Mart exercised meaningful control over the work performed by plaintiffs; the hiring and firing of plaintiffs; the amount paid to them as wages; their hours and working conditions; and the tasks they performed, including quality and quantity standards, speed, scheduling and sequence. Wal-Mart required plaintiffs to perform work that is an integral part of Wal-Mart’s business, such that all members of the class are or were dependent upon Wal-Mart as a matter of economic reality. Indeed, Wal-Mart controlled the hours and working conditions of members of the subclass to such a degree that it locked these janitors in the stores during their work hours until their shifts were over and frequently longer. Wal-Mart, together with the contractors, shared the power to set the plaintiffs’ wages and determine their working conditions and jointly reap the benefits from the underpayment of plaintiffs’ wages and non-compliance with other statutory provisions governing their employment. Wal-Mart dictates the price it will pay associated contractors for janitorial services; these prices are set below the amount Wal-Mart would expect to pay were it to employ the janitors directly and to meet all wage and hour, tax, workers’ compensation and other employment-related costs and even lower because subcontractors have to make a profit.
38. Thus, Wal-Mart retains control over the essential elements of the employment relationship, namely the power to hire and fire, the direction of personnel in the
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tasks they are to perform, the standards of their performance and the hours and terms of their work.
39. Moreover, the work of the janitors is integral to Wal-Mart’s retail operations and was traditionally performed by direct employees until Wal-Mart embarked upon the criminal scheme to exploit the labor of undocumented workers. Maintenance is coordinated with Wal-Mart’s sales operations and other necessary functions such as merchandising and related stock functions. Wal-Mart is aware of the number of man-hours necessary to clean its facilities to its standards, the staffing levels, the hours worked by the plaintiffs on their premises, and of the number of janitors employed at each location to do so. This knowledge comes in part from first-hand supervision and observation by on-site managers and in part based on per-square foot payroll costs of direct janitorial employees. These costs are recorded and reported on a regular and periodic basis to Wal-Mart headquarters.
40. The only commodity furnished to Wal-Mart by the contractors is plaintiffs’ labor. Since Wal-Mart and the contractors do not provide the plaintiffs with health, retirement, insurance, vacation, sick or bereavement benefits in connection with their employment, and do not withhold or remit social security or income taxes to federal and state governments, nearly all of the monies paid by Wal-Mart to the contractors goes to pay the plaintiffs, with the remainder profiting the contractors. The amounts paid to the contractors for plaintiffs’ labor were so low that Wal-Mart knew from this alone that the plaintiffs were routinely underpaid in violation of law.
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The Wal-Mart RICO Enterprise 41. Wal-Mart and various maintenance contractors identified in this Second
Amended Complaint and others presently unknown to plaintiffs have created, engaged in and profited from a nationwide criminal enterprise which exploits the plaintiffs and those similarlysituated through wide-scale violation of protective federal and state labor and employment laws. Essential to the scheme is the systematic violation of federal law criminalizing the employment, encouragement, harboring and transporting of undocumented workers. At material times various contractors were acting as co-conspirators or agents of Wal-Mart to pursue the scheme through an association-in-fact enterprise comprised of Wal-Mart and its various maintenance contractors (the “Wal-Mart Enterprise”). The Wal-Mart Enterprise secured and maintained, by illegal means, the labor of easily-exploitable immigrant janitors for the mutual profit and benefit of its constituents. The participants in the Wal-Mart Enterprise conducted its affairs by employing, encouraging, harboring, and trafficking in the labor of the plaintiff immigrants, failing to pay their wages and overtime and benefits as required by federal and state law, and concealing their profits and practices from detection. All of the acts of Wal-Mart and the contractors were in furtherance of this conspiracy and, in so acting, each contractor and Wal-Mart were acting within the scope of its agency and thus with the authorization of the others.
42. The essential elements of the Wal-Mart Enterprise’s activities are these. Wal-Mart has an on-going and, indeed, permanent need for maintenance services to clean the floors and other public spaces of its thousands of retail establishments. Were Wal-Mart to hire its maintenance staff directly, it, at a minimum, would be required to comply with IRCA verification procedures as well as federal and state tax and labor laws. The irreducible costs of lawful employment, however, can be avoided through sham contracting arrangements and
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undocumented migrant labor. Wal-Mart routinely made use of the labor of migrants unauthorized to work in the United States to perform necessary janitorial services at its stores nationwide. Wal-Mart and the contractors targeted these migrants who speak little or no English, and have little or no money or mobility to escape work at Wal-Mart. These workers come from across the globe and present a ready pool of easily exploited labor. Driven by poverty and the lack of economic opportunities at home, they enter the United States where they become part of a labor force Wal-Mart has fostered and from which it benefits. To facilitate and shelter the illegal employment of the undocumented janitors and to protect the financial gain from its practice of underpaying all janitors, Wal-Mart and its various contractors established the WalMart Enterprise.
43. The Wal-Mart Enterprise was established and directed as follows. WalMart is organized hierarchically in divisions, with Wal-Mart Stores comprising a division of the corporation responsible for Wal-Mart’s Supercenter retail stores. Each separate store has a manager and various assistant managers. Several stores are grouped geographically into various districts with individual store managers reporting to a District Manager. Districts are, in turn, organized into regions with District Managers reporting to Regional Vice Presidents. Executives at the regional level report to Divisional Vice Presidents who operate from Wal-Mart’s Bentonville, Arkansas headquarters.
44. The Wal-Mart Enterprise was directed by Divisional Vice Presidents within the Wal-Mart Stores Division with responsibility for in-store cleaning and procurement of services. As outlined infra, senior-level Wal-Mart executive Leroy Schuetz (Divisional Vice President of Operations in the Stores Division who worked from Wal-Mart’s Bentonville
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headquarters) directed maintenance contractors whom he and Wal-Mart knew were systematically relying upon the labor of undocumented migrants, to structure their business operations in multiple shell corporations so as to shield the continued employment of the migrants from detection. Senior Wal-Mart executives Mark Schultz and Steven Bertschy knew of the scheme, supported it and permitted it to flourish.
45. In 1997 federal agents conducted immigration raids at several Wal-Mart stores in the St. Louis, Missouri, area, arresting a number of undocumented migrant janitors employed through IMC, Inc. (“IMC”). IMC’s principal was Christopher Walters. At the time of the 1997 raids, IMC cleaned the majority of Wal-Mart’s stores with crews comprised of aliens unauthorized to work in the United States. In excess of one thousand undocumented migrants were then working in hundreds of Wal-Mart stores through IMC at the time of the 1997 raids. At the time, Wal-Mart also utilized (in different parts of the United States) maintenance contractors Enviro-Cleen, a company based in Texas whose principal George Bingham had secured the initial outside cleaning contract for a Wal-Mart hypermarket in Texas; Building One Services, which was the largest contractor besides IMC; and Southern Cleaning.
46. Immediately following the raids, in March 1997 Walters had a series of three telephone conversations with Schuetz. Walters’ discussions with Schuetz are outlined in the Affidavit of Patricia Mullin, Special Agent in Charge in the ASAC Philadelphia Office of USICE, which was executed in connection for an application for a warrant to search the Bentonville headquarters office of Steven Bertschy, a Wal-Mart Divisional Vice President with responsibility for services procurement (including maintenance contracts). A copy of that affidavit is attached hereto as Exhibit A. Walters was treated by the government as a
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cooperating witness at times driving its investigation of Wal-Mart. Walters and others have also provided that same, and additional, information directly to plaintiffs’ counsel here.
47. Schuetz was employed at Wal-Mart’s Bentonville, Arkansas, headquarters and exercised responsibility over Wal-Mart’s in-store cleaning operations. In a telephone conversation immediately following the 1997 St. Louis raids (which Walters placed from a mobile telephone while driving), Schuetz threatened that Wal-Mart would no longer deal with IMC. Because of his position in the Wal-Mart hierarchy, Schuetz exercised the effective authority to terminate Walters’ services as a Wal-Mart contractor. Walters pleaded for Schuetz to reconsider, arguing that he had invested considerable sums in his business which would be lost if Wal-Mart terminated his services. During this conversation Schuetz stated that he “like[d] those Polocks” Walters provided as janitors at Wal-Mart’s stores. (Of course, Wal-Mart knew, even independent of the 1997 law enforcement raids, that its stores were cleaned by undocumented labor, as its cleaning crews were comprised of foreigners who spoke little or no English, worked seven days a week and typically lived together in housing provided by the maintenance contractor). Schuetz told Walters that Wal-Mart would continue to use IMC if Walters created and provided undocumented janitorial labor through different shell corporations so that if one firm were caught using undocumented labor Wal-Mart could fire that company but Walters could continue to supply the undocumented migrants to Wal-Mart through other front companies. As Schuetz explained, Walters should not place all of his eggs in one basket as WalMart would not do so. Schuetz knew and intended that the use of the front companies would shield the scheme and its profits from detection by law enforcement authorities. Thus, Wal-Mart and the contractors also encouraged the continued presence of the undocumented migrants in the
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United States. This was due both to the manipulation of the corporate form and because WalMart previously determined not to independently verify whether personnel supplied through its contractors were authorized to work in the United States.
48. Immediately following the 1997 raids, IMC received calls from a number of Wal-Mart store managers demanding that their cleaning crews be restaffed because of the arrests of their janitors. IMC arranged for replacement crews, and it undertook to interview a number of the janitors who had been detained. Shortly thereafter, Walters traveled to Bentonville and discussed the matter with Schuetz’s immediate superior, Mark Schwartz. At that time Schwartz was the Divisional Vice President in charge of all of Wal-Mart’s Supercenter stores. Schwartz was then Schuetz’s superior at Wal-Mart. Schwartz had been informed of the raids and the need to obtain replacement crews and told Walters that he did not want that information to “go downstairs.” Walters understood this to mean that Schultz did not want WalMart’s very top executives, including (among others) then-President and Chief Executive Officer David Glass, whose offices were on lower floors of the building, to be advised.
49. But the information was not kept from “downstairs”. By at least 1999 Wal-Mart’s Chief Executive Officer was aware of the scheme. In November 1999, David Glass, then President and Chief Executive Officer of Wal-Mart and a member of its Board of Directors since 1977 (presently the Chairman of the Executive Committee of the Wal-Mart Board of Directors) was sent correspondence that advised him that one of Walters’ sub-contractors, Stanislaw Kostek, had transported and sheltered undocumented migrants who were cleaning the Lexington, Virginia Wal-Mart store. As discussed, infra, Kostek’s company, CMS of Queensbury, was prosecuted and has plead guilty to various crimes committed with its work as a
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Wal-Mart maintenance contractor. That correspondence was written by Greta McCaughrin, a professor of Russian at Washington and Lee University in Lexington, Virginia, who had been called upon to translate for police who arrested two of the janitors for theft of merchandise from Wal-Mart. A copy of that correspondence is attached hereto as Exhibit B.
50. McCaughrin wrote to Glass telling him that the Lexington Wal-Mart store manager requested a replacement crew, that “five additional Russians and Georgians were put on a bus from NYC” to Lexington, that “all TEN Russians are now housed at the same apartment E-33 at Willow Springs” and that the apartment was “being rented out in the name of their New York ‘boss’ Mr. Kostek[.]” Wal-Mart acknowledged receipt of McCaughrin’s correspondence. Wal-Mart did nothing to remedy the situation. Instead, Wal-Mart hired a former employee of the Federal Bureau of Investigation to conduct an investigation of McCaughrin.
51. Walters followed Wal-Mart’s instructions and created a plethora of front companies through which he continued to supply Wal-Mart with the cleaning services of undocumented migrant janitors. At times from 1997 those janitors have numbered in many thousands of unauthorized migrants at any given time. Walters incorporated Comet Floor Care, Ironman Maintenance, Inc., Pinnacle Floor Care Associates, Inc., Pinnacle Floor Care System, Inc., Mercury Floor Maintenance, Inc., and Champion Floor Services, Inc. all on July 16, 1997. He incorporated American Floor Care Associates, Inc. on September 16, 1997. Walters incorporated Precision Cleaning, Inc. on October 14, 1998. He incorporated Champion Floor Care Associates, Inc., Comet Floor Care Associates, Ironman Maintenance Associates, Inc., National Cleaning Management, Inc., Pinnacle Floor Care Associates, Inc., Mercury Floor Care
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Associates, Cleanmax Associates, and World Clean Associates all on December 14, 1998. With the knowledge and cooperation of Wal-Mart, Walters used separate postal service addresses for these firms in an effort to shield their interrelationships. Also with the knowledge and cooperation of Wal-Mart, Walters made a practice of having multiple shell companies bid for the same cleaning work and, on occasions, would use one of his shell companies to bid for work lost by others. These various firms were thus used as a vehicle to provide janitorial services to WalMart using the labor of undocumented migrants, including plaintiffs, in this action.
52. Thereafter, once the Wal-Mart Enterprise was established, Wal-Mart managed the affairs of the enterprise as follows. Headquarters management, specifically Schuetz and Steven Bertschy, a Wal-Mart Divisional Vice President in charge of procurement for the Wal-Mart Stores division, functioned in a supervisory capacity, acting directly themselves or through subordinate Regional and District management to manage and control overall maintenance contracting costs. As outlined infra, Wal-Mart management periodically demanded price concessions from maintenance contractors in an effort to reap even greater profits from the operation of the Wal-Mart Enterprise. As outlined elsewhere in this Second Amended Complaint, management at the store level made arrangements with individual contracts (which in many cases were not reduced to writing) and functioned to insure the undocumented janitorial labor was supplied by the contractors and that it performed necessary maintenance to Wal-Mart’s specifications and demands. Payment was made by Wal-Mart to the separate shell companies to further shield the scheme from detection.
53. Beyond senior executives Schuetz, Schwartz and Bertschy, Wal-Mart was well-aware of the inter-related nature of these firms. For example, Walters’ companies used
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the same personnel interchangeably. Thus, the very same personnel in Walters’ sales staff interacted with Wal-Mart management on behalf of multiple contractors. Wal-Mart’s internal insurance department was aware (because the Walters’ companies supplied the information) that all of Walters’ various companies were covered by the very same insurance policies. And as noted infra, Wal-Mart also knew that the Walters’ controlled companies all used the same St. Louis bank, as Wal-Mart checks were consistently deposited or negotiated at this same bank.
54. Thereafter, despite enforcement raids at multiple Wal-Mart stores in 2000 and 2001 that led to the detention of many janitors employed through Walters-controlled companies, Wal-Mart chose to continue its association with Walters through the various shell companies.
55. Similarly, in New Jersey, Wal-Mart contractor Kenneth Clancey created and used multiple firms through which undocumented migrant labor was provided to clean WalMart stores. These entities include Facility Solutions Incorporated; Facility Solutions International, Mitchell Industries, LLC; Ruth and Sons LLC; JWM Commercial Cleaning; and RT Cleaning. On information and belief, while Clancey’s companies served as Wal-Mart maintenance contractors, Clancey supplied in excess of 100 aliens unauthorized to work in the United States to Wal-Mart, including plaintiffs in this action.
56. On information and belief, Wal-Mart similarly instructed or encouraged its other maintenance contractors to establish separate firms to provide undocumented janitorial labor, and they did so as well. At this time the precise structure, operation and identity of each and every one of the many additional shell corporations and fronts used by the contractors in the scheme with Wal-Mart are known only by defendant and the contractors (and possibly federal
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law enforcement officials in connection with their various investigations), and plaintiffs’ counsel was unable to obtain that information despite numerous interviews with named plaintiffs, members of plaintiff class and others both in the United States and abroad. Thus, complete information on each and every one of the many additional shell companies will require some discovery in this case.
57. With the scheme established, Wal-Mart further sought to screen itself from liability by permitting store managers to enter into contracts with maintenance contractors covering their particular location. In many cases these arrangements were not reduced to writing, in others form arrangements supplied by Wal-Mart were used. Copies of written arrangements that were made were not typically provided to Wal-Mart headquarters. But control over the Wal-Mart Enterprise was maintained at the headquarters level as the underlying economics of the relationship, the standards of contractor performance and the form agreements (when used) were determined by Wal-Mart at the headquarters level. Critically, on information and belief, Wal-Mart approved contractors’ invoices and paid all the various shell maintenance companies from Bentonville.
58. Wal-Mart paid the various front companies with the knowledge that the monies paid constituted the proceeds of the illegal hiring, encouraging, harboring and transporting of undocumented migrant labor. Wal-Mart knew and intended (because of the interrelationship of the shell companies) that payments to the various corporate shells would necessarily, in turn, engender multiple financial transactions between the shell corporations and their principals. Wal-Mart also knew that its payment of the proceeds of unlawful activity through the multiple shell contractors would function to shield the operations of the Wal-Mart
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Enterprise from detection by federal law enforcement authorities thus facilitating its continuation.
59. These decisions structuring the Wal-Mart Enterprise were made or instigated by Shuetz and continued by Bertschy. Bertschy moved into his position in charge of procurement in either 2000 or 2001. Wal-Mart placed minimal responsibility with individual store managers to hire and supervise janitorial contractors. Schuetz designed the Wal-Mart Enterprise to function in this way (and Bertschy so continued it) to further shield Wal-Mart from liability. With the selection of contractors ostensibly made at the store level, Wal-Mart management believed it would be able to claim (falsely), in the event of law enforcement action, that the hiring of undocumented aliens was an unusual event attributable to the activities of a few rogue managers. In addition, with the use of multiple front companies, Wal-Mart would be able to shield the aliens from detection because Wal-Mart could claim (falsely) that the undocumented janitors were employed by a particular contractor. Both factors were intended to and did perpetuate the use of undocumented migrant labor that was the intent and goal of the Wal-Mart Enterprise.
60. Wal-Mart management at both the headquarters and store level were aware that maintenance contractors who joined the Wal-Mart Enterprise systematically relied upon and would in the future continue to rely upon, undocumented migrant labor that had been encouraged to reside in the United States, and was transported and harbored by the contractors. Indeed, their intent was to facilitate the employment of undocumented migrants unauthorized to work in the United States. As Shuetz told Walters in 1997, Wal-Mart “like[s] those Polocks” who cleaned their stores at costs that could not possibly be matched by lawful labor. Wal-Mart’s
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relentless desire to reduce costs led Wal-Mart senior management to structure the Wal-Mart Enterprise through multiple contractors to evade IRCA verification requirements and to provide a basis for false claims that Wal-Mart was unaware that it suffered or permitted undocumented migrants to work as janitors in its stores.
61. On April 23, 2003, Walters met with Bertschy at Bertschy’s Wal-Mart office in Bentonville, Arkansas. At the time Bertschy had responsibility for floor maintenance at Wal-Mart headquarters. Their conversation was monitored and tape recorded by a federal law enforcement agent who was present in an undercover capacity. During that meeting Walters told Bertschy “I mean, I know of at least 400 stores that have illegal aliens in them.” Bertschy responded, “Don’t repeat that.” Walters offered to remove the illegal aliens from Wal-Mart stores where he knew them to be employed and quickly replace them with legal workers, but Bertschy did not accept the offer. Bertschy refused to do so because Wal-Mart financially benefits from the use of illegal alien janitorial labor because paying for documented labor would be far more expensive to Wal-Mart.
62. At the same April 23, 2003 meeting described in paragraph 61 supra Bertschy acknowledged that store managers were aware that their contract cleaning crews were composed of unlawful aliens based on their reports to him. Bertschy stated in that conversation with Walters which was recorded and transcribed by federal agents:
So, then the store managers say I’ve got eight people, they’re here, seven days a week every night and I say to them, okay, you’ve got eight people and they’re there seven nights a week and they’re all living in the same apartment. You know how much their weekly pay is, and you know how many hours they’re spending in your store. Does it add up? No, normally it doesn’t because sub-contractors have taken advantage of people and families once they
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come to the United States.
. . ..
And they load them up into one or two apartments and they take a family of five and pay them $1,000.00 a week, that’s probably a dollar an hour if they’re there seven days a week and they’re not paying taxes because they’re not getting paid a fair rate compared to U.S. standards, then they start stealing from the store to make up the difference.
This is reflected at pages 58 - 59 of Exhibit A. Bertschy also complained during this conversation that Wal-Mart wanted to eliminate the layer of sub-contractors that its maintenance contractors had come to rely upon to shield themselves from detection. If contractors could be forced to curtail subcontracting, Bertschy indicated that Wal-Mart could further reduce its costs for janitorial labor because then there would not be “so many companies making profit” off the undocumented workforce.
63. On May 21, 2003, Walters had a similar conversation with Schuetz in Sumpter, South Carolina, at the opening of a Wal-Mart Supercenter there. Wal-Mart assigned Schuetz to preside over the grand opening festivities. In their discussion, Walters told Schuetz, as he earlier told Bertschy, that he knew of hundreds of stores where there were illegal aliens working as janitors. Walters offered to remove the illegal aliens from Wal-Mart stores where he knew them to be employed and quickly replace them with legal workers, but Schuetz (like Bertschy) did not accept the offer. He refused Walters’ offer for the same reason as Bertschy refused: Wal-Mart financially benefits from the use of illegal alien janitorial labor.
64. In May 2002, following further law enforcement raids on April 10,
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2002, Walters decided to shut down operations at his cleaning companies and go out of business. Following the April raids, Walters’ employees placed telephone calls to various Wal-Mart store managers to advise them of the decision. Those telephone conversations were taped and transcribed and excerpts from them appear at pages 49-55 of the Mullin Affidavit, attached hereto as Exhibit A.
65. On April 26, 2002, Walters’ employee Curt Fowler spoke with Terry Williams the manager for the Wal-Mart store in Greensburg, Indiana. Fowler reminded Williams that his cleaning crews were sub-contractors and that they no longer worked for IMC or other Walters companies. Williams responded by stating: “You’re all in one big, it’s one big racket. I’m not an idiot.” Williams added: “I may be blond, but I’m not stupid[.]” and indicated that he understood “a little about how it works ’cause one of my assistant managers married one of the Russian floor crew, so she told me about how it works.” Williams indicated that he had I9 forms for everyone in his crew and that he was, thus, “covered.” Fowler told Williams:
And, you know, if you’re going to deal with them directly that’s your decision. I’m not going to talk you out of it, but it’s going to have to be at your own peril because we did this to protect ourselves from liability and to protect Wal-Mart from liability.
Williams responded “Okay” and “Well, we contacted the home office and got approval for the, for them to come back in there so,” and “I mean, they’re aware of it. They’re working on that problem.”
66. At the store level, Wal-Mart management was aware, at a minimum, that janitors who spoke no English were working seven days a week for as much as 70 or more hours per week. Those janitors who were paid by personal check (as some were) frequently cashed
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these checks at the Wal-Mart stores they cleaned. From this alone, Wal-Mart knew that no provision was made for deduction and payment of payroll taxes by the contractors. In each location where migrants were employed as janitors, local Wal-Mart management acted in reckless disregard of their status as undocumented labor.
67. The operation of the Wal-Mart Enterprise is uniform nation-wide: employment of immigrant janitors under similar (and illegal) terms and conditions of employment to cleaning specifications determined and overseen by Wal-Mart. Migrant janitors are: (1) paid in cash or personal checks without appropriate withholding of payroll taxes; (2) obligated to work hours in excess of the FLSA’s statutory maximum; (3) obligated to work up to seven days per week; (4) not paid for overtime work as required by law; (5) not given time off; and (6) not provided with workers’ compensation benefits, health insurance, sick leave, meal or break time, notwithstanding state law protections. The terms of employment and amounts paid (or promised) to plaintiffs were consistent. Plaintiffs worked in crews of from two to seven janitors, depending on the size of the store to be cleaned. Crew members were paid between $325 and $350 per week with crew leaders receiving slightly more, approximately $500 per week. Crew leaders typically received a single check from which all members of their crew were to be paid. Communal lodging was in many cases arranged for migrants by the contractors (as Bertschy acknowledged and Glass was advised) to both shelter them from detection, control their activities and encourage them to continue to reside in the United States. Contractors also in many cases transported undocumented migrant labor across the United States to different WalMart stores where they joined cleaning crews. Plaintiffs worked under these illegal circumstances described herein for all times relevant to this lawsuit.
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68. As specified infra, the parties who make up the Wal-Mart Enterprise participated in its affairs through the commission of widespread and systematic violations of the FLSA and multiple criminal acts, including, but not limited to, transporting undocumented aliens, in violation of 8 U.S.C. §1324(a)(1)(A)(ii); harboring undocumented aliens in violation of 8 U.S.C. §1324(a)(1)(A)(iii); encouraging undocumented aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(iv); conspiring to transport, harbor and encourage illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I); aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(II); committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1)(B)(i); involuntary servitude in violation of 18 U.S.C. §1584; and conspiracy to launder money in violation of 18 U.S.C. §§1956(h) of the proceeds of the aforesaid criminal acts.
69. The Wal-Mart Enterprise operates in and has an effect on interstate commerce. RICO Predicate Acts Commission of RICO Predicate Acts By Contractors
70. Contractors associated with the Wal-Mart Enterprise participated in its affairs through a pattern of racketeering activity within the meaning of 18 U.S.C. §1961(5).
71. Section 274 of IRCA, 8 U.S.C. § 1324, provides: (a) (1)(A) Any person who -
(i) knowing that a person is an alien, brings to or attempts to bring to the United States in any manner whatsoever such person at a place other than a designated port of entry or place other than as designated by the Commissioner, regardless of
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whether such alien has received prior official authorization to come to, enter, or reside in the United States and regardless of any future official action which may be taken with respect to such alien;
(ii) knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law, transports, or moves or attempts to transport or move such alien within the United States by means of transportation or otherwise, in furtherance of such violation of law;
(iii) knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law, conceals, harbors, or shields from detection, or attempts to conceal, harbor, or shield from detection, such alien in any place, including any building or any means of transportation;
(iv) encourages or induces an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law; or
(v)(I) engages in any conspiracy to commit any of the preceding acts, or
(II) aids or abets the commission of any of the preceding acts, shall be punished as provided in subparagraph (B).
72. Section 274(a)(1)(3)(A), 8 U.S.C. § 1324(a)(1)(3)(A) provides:
(3)(A) Any person who, during any 12-month period, knowingly hires for employment at least 10 individuals with actual knowledge that the individuals are aliens described in subparagraph (B) shall be fined under title 18 or imprisoned for not more than 5 years, or both.
(B) An alien described in this subparagraph is an alien who- (i) is an unauthorized alien (as defined in section 1324a(h)(3) of this title), and
(ii) has been brought into the United States in violation of this subsection.
73. A violation of any of the provisions cited supra constitutes a predicate
act of racketeering under 18 U.S.C. §1961(1)(F).
74. Beginning no later than March 1997 Wal-Mart, acting through Leroy
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Schuetz and others, conspired with Christopher Walters (and the various companies Walters controlled and sub-contracted with) to transport, harbor and encourage illegal aliens to reside in the United States. In particular, the understanding Wal-Mart reached with Walters at that time was that Wal-Mart would continue to employ illegal aliens as janitors, so long as Walters set up multiple front companies to formally employ the janitors and thus relieve Wal-Mart of the responsibility to verify the janitors’ authorization to work in the United States.
75. Wal-Mart also knew that the companies Walters then controlled (or Walters’ various sub-contractors) routinely encouraged aliens to reside in the United States unlawfully, transported undocumented migrants across the United States to facilitate their work at various Wal-Mart stores and harbored undocumented janitors who worked at Wal-Mart by, among other things, providing them with lodging. Wal-Mart knew from the 1997 raid at the very least, and intended in entering in the conspiracy, that Walters and the companies he controlled would continue to encourage aliens to reside in the United States unlawfully, transport undocumented migrants across the United States to work at Wal-Mart, and/or harbor undocumented janitors who worked at Wal-Mart. The use of front companies was intended, and did, shield, harbor and perpetuate Wal-Mart’s illegal employment of the janitors from detection by the authorities, and it thus facilitated and encouraged the continued presence of the migrants in the United States and their employment by Wal-Mart. The conspiracy was entered into by all participants for their own financial gain.
76. On information and belief, at or about the time it entered into its conspiracy with Walters, Wal-Mart entered into similar conspiracies with other maintenance contractors to transport, harbor and encourage illegal aliens to reside in the United States. These
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conspirators include, on information and belief, Kenneth Clancey. In particular, the understanding Wal-Mart reached with Clancey and other contractors was the same as that reached with Walters: Wal-Mart would continue to employ illegal aliens as janitors, so long as the contractors set up multiple front companies to formally employ the janitors and thus relieve Wal-Mart of the responsibility to verify the janitors’ authorization to work in the United States and evade detection by federal law enforcement authorities of multiple criminal violations of federal immigration law. Acts in Furtherance of the Conspiracy Wal-Mart
77. In furtherance of the conspiracy and to effect the objects of the conspiracy, the following overt acts, among others, were committed. Wal-Mart acted in furtherance of the conspiracy by its acts described in this Second Amended Complaint, including but not limited to using Walters’ firms interchangeably, switching ostensible contractors in response to law enforcement actions to continue the scheme. Wal-Mart also furthered the conspiracy by mailing checks payable to various Walters entities and other contractors as compensation for the work performed by the undocumented migrant cleaning crews and to cover contractors’ overhead costs.
Contractors
78. As outlined elsewhere in this Second Amended Complaint, Walters acted in furtherance of the conspiracy by establishing a plethora of front companies (on the dates indicated in paragraph 51, supra) all controlled by him and continuing to knowingly supply undocumented migrant janitorial labor to Wal-Mart thereafter. Walters, and on information and
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belief other contractors, purposefully decided not to require that sub-contractors they used verify that their personnel were authorized to work in the United States to shield the scheme from detection.
79. Those various maintenance contractors thereafter engaged in systematic violations of federal immigration law in furtherance of the conspiracy including separate conspiracies among themselves to violate immigration law and to launder the proceeds of the scheme they received from Wal-Mart. Inter-related Conspiracies to Violate Immigration Law and Commit Money Laundering
80. On April 25, 2005, Walters entered a plea of guilty on behalf of contractors IMC Associates, Inc., Cleanmax Associates, Inc., Comet Floor Care Associates Inc., Ironman Maintenance Associates, Inc., Precision Cleaning, Inc., Champion Floor Care Associates, Inc., National Cleaning Management, Inc., Mercury Floor Care Associates, Inc., Allied Floor Care Service, Inc., and World Clean Associates, Inc., to a single count felony information alleging a conspiracy to transport and encourage illegal aliens to reside in the United States for the purpose of commercial advantage and private financial gain in violation of 8 U.S.C. §§1324(a)(1)(A)(v), (a)(1)(A)(ii), (a)(1)(A)(iv), and (a)(1)(B)(i) between 1998 and 2002. All of these contractors supplied undocumented migrant janitorial labor to Wal-Mart. In connection with that guilty plea these defendants agreed to forfeit $4 million to the United States. A copy of the information charging IMC and the other Walters related companies and their plea agreement are attached hereto as Exhibits C and D respectively. The federal government had previously brought multiple forfeiture actions including the action known as United States v. Express Corporate Servs., Inc., et al., No. 3 CV 02-982 (M.D. Pa.), seeking forfeiture of the property of these defendants and outlining their actions as Wal-Mart janitorial contractors. A
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copy of the verified complaint in the Express Corporate Serv. case is attached hereto as Exhibit E.
81. The guilty plea of a number of the Walters’-controlled firms followed prosecutions of Walters’ associates and Wal-Mart contractors Stanislaw Kostek and Miroslaw Dryjak and associated firms. On March 12, 2003, Kostek’s company, CMS of Queensbury, plead guilty pursuant to a January 2003 Plea Agreement to a federal information charging it with a conspiracy to transport and encourage and induce aliens to reside in the United States for commercial advantage and financial gain connected with Kostek’s activities as a Wal-Mart contractor. A copy of the CMS of Queensbury Plea Agreement is attached hereto as Exhibit F. On that same date in a related criminal prosecution, Kostek’s associate (and Wal-Mart maintenance contractor) Miroslaw Dryjak plead guilty to bringing in and harboring of undocumented aliens. Charges against Kostek individually in that case were dismissed on June 4, 2005.
82. Most recently the government succeeded in criminal prosecutions relating to Vincent Romano, a Walters associate and Wal-Mart contractor. On October 17, 2005, DJR Cleaning Enterprises(“DJR”), a Wal-Mart cleaning contractor which subcontracted with various of the Walters-controlled companies, plead guilty pursuant to a Plea Agreement to a superseding felony information brought by the U.S. Attorney for the Middle District of Pennsylvania. A copy of the Plea Agreement is Exhibit G and a copy of the Information is Exhibit H. Vincent Romano was president and owned or controlled DJR. Specifically DJR plead guilty to engaging in a conspiracy between 1996 and 2002 with various Walters-controlled companies and its own sub-contractor CMS of Queensbury, Inc., to transport and encourage and
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induce aliens to reside in the United States knowing or in reckless disregard of the fact that the aliens came into or remained in the United States in violation of law.
83. On June 22, 2005, Walter J. Truszkowski entered a guilty plea in the U.S. District Court for the Northern District of Illinois to a two-count federal information charging a conspiracy to conceal aliens and to encourage aliens to reside in the United States for the purpose of financial gain in knowing or reckless disregard of the fact that such aliens have come to, entered, or remained in the United States in violation of law, under 8 U.S.C. §1324(a)(1)(A)(v), and a conspiracy to conduct financial transactions that involved proceeds of encouraging aliens to remain in the United States for the purpose of financial gain, with the intent to promote the carrying on of such specified unlawful activity under 18 U.S.C. §1956(h). A copy of the plea agreement between Truszkowski and the United States is attached hereto as Exhibit I.
84. Truszkowski created, owned and operated Crystal Clear Nationwide Management, Inc., and DeLuxe Cleaning, Inc. Through Vincent Romano, a sub-contractor of Walters and IMC, Truszkowski obtained subcontracts to clean various Wal-Mart stores in Illinois and Indiana. As recited at page 3 of the Plea Agreement, Exhibit I, Truszkowski recruited and hired persons from Russia and Eastern Europe to clean these stores. Most of these migrants came to the United States on visas that did not authorize work here. As with other victims of the Wal-Mart Enterprise, Truszkowski’s janitors were (in the words of the plea agreement) “a highly mobile work force, willing to work the night shift, cleaning the stores, many for below minimum wage, and without receiving overtime.”
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Algimantas Kondratavicius, one of the aliens Truszkowski recruited who worked in a Wal-Mart cleaning crew, incorporated A.K. Professional Cleaning Inc. (“A.K.”). In the words of the plea agreement, this shell company was created “[i]n order to insulate [Truszkowski] and to shield from detection the alien employees working on the crews[.]” On or about September 6, 1998, Truszkowski assigned Kondratavicius to clean the Wal-Mart store in Valpariso, Indiana. (The INS arrested Kondratavicius with other aliens cleaning this Wal-Mart store on June 7, 2000). Truszkowski received the criminal proceeds of the conspiracy “in the form of Wal-Mart’s payments[] through an intermediate subcontractor knows as Intensive Maintenance Care Inc.” These actions were also in furtherance of the conspiracy between Walters and Schuetz, as IMC used Romano and his affiliated contractors as corporate shells intended to shield Wal-Mart’s employment of the undocumented migrant cleaning crews.
86. Consistent with the conspiracy, Wal-Mart’s maintenance contractors operating as part of the Wal-Mart Enterprise systematically violated federal criminal provisions by encouraging unauthorized aliens to enter the United States and then harboring or transporting them once here. Encouraging Unauthorized Aliens to Reside in the U.S.
87. Wal-Mart contractors placed advertisements in publications in the Czech Republic (and on information and belief elsewhere) promising work in America in exchange for amounts typically equal to a month’s wages. Contractors placed these advertisements knowing that they would encourage and induce foreign nationals without work authorization in the United States to enter the United States unlawfully for the purpose of obtaining work at Wal-Mart stores in violation of 8 U.S.C.§ 1324(d)(i)(A)(iv). When persons not authorized to work in the United States responded to the advertisements and traveled to the United States (typically on tourist
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visas that did not authorize them to work here) contractors met them and transported them to their final destinations in the United States where the migrants would work at Wal-Mart stores. The contractors typically arranged lodging for the unauthorized migrants near their worksites once they arrived in the United States.
88. For example, in early 2003, plaintiff Kunc responded to an advertisement promising employment in the United States by calling a broker in Brno, Czech Republic. The broker told him he could arrange employment in the United States for $1,500 and directed Kunc to enter the United States on a tourist visa. The broker told Kunc that upon arrival in the United States he would be employed at a Wal-Mart store in Madison Heights, Virginia. Kunc then traveled to the United States on a tourist visa and arrived on February 7, 2003 in Washington, D.C. Thereafter, on February 8, 2003, Kunc was immediately transported by a Wal-Mart contractor to lodging in Virginia, his final destination in the United States, where he began his first cleaning job at the Wal-Mart store in Madison Heights. Harboring and Transporting
89. In the United States, Wal-Mart contractors sheltered the undocumented migrants by arranging or providing lodging for them and routinely transporting them across the United States to work at different Wal-Mart locations facilitating and encouraging their presence here. Kostek, for example, made a practice of rotating janitorial crews between Wal-Mart stores every few months, transporting undocumented migrants to different Wal-Mart stores across the country.
90. Wal-Mart contractors also sheltered or attempted to shelter and conceal the undocumented migrants’ presence in the United States by obtaining falsified work
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authorization papers or permanent resident cards. For example, Wal-Mart’s contractor in New Jersey, Kenneth Clancey, never required any of the New Jersey resident plaintiffs to verify their employment authorization although that is required of any employer by federal law. Shortly before the Operation Rollback raids in October 2003, Clancey asked plaintiff Victor Zavala to accompany him to New York City to obtain fraudulent work authorization documents. Plaintiff Zavala refused.
91. The Wal-Mart contractor who employed Plaintiffs Zednek and Jaros, Adam Daniel of Daniel’s Cleaning Service, provided lodging for them in his name in Alma, Michigan. Daniel told them told in late 2002 that they were required to purchase fraudulent Social Security numbers from him for $300 each to continue working. Zednek and Jaros refused Daniel’s demand, and the contractor refused to pay them for their work. Zednek and Jaros complained that they were not paid to a Wal-Mart manager in Alma who knew that they were undocumented. They still were not paid, and their continued complaints of non-payment led Daniel to contact the local police who evicted Zednek and Jaros from the apartment in which they lived that was rented in Daniel’s name, but whose rent was paid by these plaintiffs. (When Daniel finally delivered paychecks to these plaintiffs for work they had performed, the checks bounced.)
92. On June 4, 2001, Miriam Klackova Facemyer, a maintenance contractor who provided undocumented aliens (most from the Czech Republic, Slovakia and Poland) to work as janitors for Wal-Mart stores, plead guilty in the U.S. District Court for the Eastern District of Virginia to harboring illegal aliens under 8 U.S.C. §1324(a)(1)(A)(iii) and related offenses. Facemyer was sentenced to seven months’ imprisonment and/or two years of
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supervised release, and was required to pay a $100 special assessment and a $2,000 fine. Money Laundering
93. Contractors who joined with Wal-Mart in the Wal-Mart Enterprise maintain (or maintained) books, records, ledgers, receipts, or notes relating to the purchase of financial instruments or the transfer of funds and other papers relating to the proceeds of the unlawful employment of the janitors and the profit derived therefrom. On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise used electronic equipment such as computers, facsimile or telex machines, pagers and telephone answering machines to generate, record, or store information concerning their operations and associated finances. Contractors who joined with Wal-Mart in the Wal-Mart Enterprise attempted to legitimize their profits from the illegal scheme through money laundering activities involving banks and their attendant services, brokers, professionals such as attorneys or accountants, and in violation of 18 U.S.C. §§1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), 1956(a)(3)(A), 1956(a)(3)(B), and 1956(a)(3)(C). The documents and specific information as to all of these materials are within the exclusive possession and control of Wal-Mart and the contractors at this time (and possibly federal law enforcement officials in connection with their various investigations), and plaintiffs’ counsel was unsuccessful in efforts to these data and documents despite interviews with numerous named plaintiffs and members of the plaintiff class both in the United States and abroad. Thus, specific allegations as to that information by plaintiffs will have to await some discovery in this case.
94. Over the years of operation of the Wal-Mart Enterprise, Wal-Mart contractors received checks drawn on Wal-Mart bank accounts payable to the contractor as payment for janitorial labor. Each separate payment received by a contractor who participated in
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the Wal-Mart Enterprise was the proceeds of the illegal conspiracy and the transporting, harboring or and encouraging the migrants to remain in the United States in violation of 8 U.S.C. §1324(a) (1)(A)(ii), (iii), and (iv). Wal-Mart made these payments and the contractors received them knowing them to be the proceeds of unlawful activity. Contractors then conducted a host of further money laundering financial transactions intended to promote the unlawful activities of the Wal-Mart Enterprise or knowing that that the transaction was intended to conceal or disguise the ownership or control of the proceeds of the Wal-Mart Enterprise.
95. For example, as outlined in paragraph 85 supra and in Exhibit E at pages 5-7, criminal proceeds in the form of Wal-Mart payments for cleaning services were laundered through IMC, companies controlled by Truszkowski and, ultimately A.K. The scale and scope of the money laundering scheme is outlined in Exhibit E at pages 98-131. Specifically and as outlined there, records subpoenaed from Wal-Mart by the United States reveal that between 1999 and 2001 Wal-Mart paid in excess of $77 million to a subset of the Walters’ companies. Specifically, Wal-Mart paid $26 million to IMC, $14.5 million to Comet Floor Care, 21 million to Ironman Maintenance, $10 million to Precision Cleaning Services, $1.8 million to Champion Floor Care Services, $3.5 million to National Cleaning Management and $12.5 million to Pinnacle for cleaning services during that period. These payments were the proceeds of the unlawful criminal immigration violations of the above-noted contractors. The above-noted contractors received these payments knowing them to be the proceeds of their criminal immigration violations and caused these payments to be deposited in bank accounts they maintained, a financial transaction within the meaning of 18 U.S.C. §1956(a)(1). As set out at pages 4-12 of Exhibit E, a number of the Walters-controlled companies maintained accounts at
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Normandy Bank in St Louis. Between 1999 and 2001 there were multiple transfers of funds between and among the companies who received payments from Wal-Mart as identified above (and with other Walters-controlled companies). Those transactions involved in excess of $20 million. As outlined at pages 101-102 of Exhibit E, Walters-controlled companies also transferred millions of dollars by check, wire transfer and credit memo to DJR, Romano’s company that provided undocumented migrant cleaning crews to Wal-Mart including through Truszkowski.
96. The contractors thus conducted financial transactions intended to promote the unlawful activities of the Wal-Mart Enterprise or knowing that each such transaction was intended to conceal or disguise the ownership or control of the proceeds of the Wal-Mart Enterprise. Specifically, the above indicated contractors paid for undocumented janitorial labor from the above-noted proceeds thus encouraging the undocumented migrants to continue to provide their services and thereby promoting the continuation of the Wal-Mart Enterprise, in violation of 18 U.S.C. §1956(a)(1)(A)(i). Without the pool of illegal migrant labor which the contractors had to maintain (albeit at below legally mandated levels), the contractors would not have been able to secure or fulfill the contracts with Wal-Mart.
97. On information and belief, the same patterns of money laundering transactions occurred with respect to Kenneth Clancey and others and the various corporate shells through which he and others provided undocumented migrant labor to Wal-Mart and other contractors presently unknown to plaintiffs.
98. All of the foregoing acts in paragraphs 41-97 supra were in furtherance of the conspiracy to violate Section 1324(a)(1)(A)(v)(I) initiated by Walters and Schuetz and in
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so acting, each contractor was acting within the scope of its agency and thus with the authorization of the others including Wal-Mart. In addition, they constitute predicate acts of racketeering through which the identified contractors participated in the affairs of the Wal-Mart Enterprise. Commission of RICO Predicate Acts By Wal-Mart
I. Violations of Section 274 (A) Conspiracy to Violate Section 274 99. Wal-Mart participated in the affairs of the Wal-Mart Enterprise through
the commission of multiple predicate acts of racketeering. As set forth in the preceding paragraphs of this Second Amended Complaint, beginning in no later than March 1997, WalMart, acting through Leroy Schuetz and others, conspired with Christopher Walters and the various companies Walters controlled or sub-contracted with to transport, harbor and encourage illegal aliens to reside in the United States. In particular, the understanding Wal-Mart reached with Walters at that time was that Wal-Mart would continue to employ illegal aliens as janitors, so long as Walters set up multiple front companies to formally employ the janitors and thus relieve Wal-Mart of the responsibility to verify the janitors’ authorization to work in the United States. The use of front companies was intended, and did, shield and perpetuate the contractors’ and Wal-Mart’s illegal employment of the janitors from detection by federal law enforcement authorities, and it thus encouraged and facilitated the continued presence of the migrants in the United States and their employment by Wal-Mart. The conspiracy was entered into by all participants for their own financial gain.
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Acts in Furtherance of the Conspiracy 100. In furtherance of the conspiracy and to effect the objects of the
conspiracy, the following overt acts, among others set out in this Second Amended Complaint, were committed. As outlined in paragraph 47, supra, Walters acted in furtherance of the conspiracy by establishing a plethora of front companies (on the dates indicated in paragraph 51 supra) all controlled by him and by continuing to supply undocumented migrant janitorial labor to Wal-Mart thereafter through these shell companies. In addition, Walters acted in furtherance of the conspiracy by entering into sub-contracting arrangements with contractors such as Romano and Kostek who furnished undocumented migrant labor for Wal-Mart. Wal-Mart acted in furtherance of the conspiracy by using Walters’ firms interchangeably, switching ostensible contractors following law enforcement actions to continue the scheme. Wal-Mart furthered the conspiracy by mailing checks payable to various Walters contractors as compensation for the work performed by the undocumented migrant cleaning crews. Without the pool of illegal migrant labor which the contractors had to maintain (albeit at below legally mandated levels), the contractors would not have been able to secure or fulfill the contracts with Wal-Mart to their mutual benefit.
101. Wal-Mart management at the store level was well aware of how the Wal-Mart Enterprise functioned and knowingly participated in its operation. They did so for their own financial gain because their compensation depended on their ability to reduce or control their stores’ expenses facilitated by the use of undocumented labor. They also did so because unauthorized migrant labor was more easily controlled than janitors who were U.S. citizens or otherwise authorized to work in the United States.
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102. In some cases, undocumented janitors complained to Wal-Mart management that they were being cheated by contractors. Plaintiffs Zednek and Jaros complained that they had not been paid for their work as janitors at Wal-Mart to Wal-Mart officials in Michigan, and in Georgia where they were subsequently employed to clean another Wal-Mart store. Those officials were fully informed of the fact that these plaintiffs were undocumented. The Wal-Mart officials failed to help them and continued to employ them as janitors in Wal-Mart stores.
103. Walters’ associate Kostek, operating through Comet Floor Care, supplied undocumented migrants to work at the Wal-Mart store located in Honesdale, Pennsylvania in 2000. This was known to the Honesdale store manager Dave, l/n/u, who advised a Wayne County, Pennsylvania, probation agent that he believed the cleaning crew was made up of illegal aliens. Kostek arranged for the Honesdale crew to be lodged in a trailer at a trailer park in Honesdale and at the Wayne Hotel in Honesdale. Federal agents executing a search warrant on the trailer discovered that the front door of the trailer could not be locked, the trailer had no running water and the aliens slept on the floor in sleeping bags.
104. On March 20, 2001, INS agents arrested 27 illegal aliens at several WalMarts in Pennsylvania, including Honesdale. Federal agents informed management that the cleaning crews were comprised of undocumented aliens. Consistent with the workings of the Wal-Mart Enterprise, firms associated with Walters, but not Comet, arranged for a new cleaning crew composed of other undocumented migrants to clean the Honesdale store that Wal-Mart permitted to work. That replacement crew was similarly sheltered by the contractor.
105. On October 30, 2001, federal agents again raided the Honesdale Wal48

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Mart this time arresting five undocumented aliens working in the cleaning crew (three crew members were from Georgia (former Soviet Union) and one from Russia and Estonia). This crew was employed through another cleaning contractor connected to Walters and Kostek. All five were housed in the same apartment in Honesdale.
106. In the Honesdale apartment shared by the replacement crew federal agents came upon correspondence dated July 29, 2001, to Kostek from Vincent Romano. In that correspondence Romano advised Kostek that Wal-Mart District Managers were dictating budget cuts at four Wal-Mart stores (including Honesdale) for Walters’ company IMC effective September 24, 2001. Romano inquired whether Kostek could “handle these new prices” and that, if not Romano would “tell IMC to find someone, or you take stores direct and pay me on the side.”
107. The same use of multiple contractors occurred at the Wal-Mart store in Ticonderoga, New York. On November 1, 2001, INS agents arrested two Georgian and two Lithuanian nationals who comprised a cleaning crew at the Ticonderoga, New York, and WalMart store. The Wal-Mart store manager, Phil Prehoda, advised that the crew was hired through Floor Management Inc., a Walters company, which had replaced IMC. Federal agents advised Prehoda that the crew were all undocumented aliens. In January 2002, federal agents again contacted Prehoda who now advised that the Ticonderoga store was cleaned by a crew from National Floor Management, yet another Walters company. Prehoda advised that National Floor Management had provided I-9 forms for the crew at his request. Review of the forms indicated that (with the exception of the crew leader), all of the janitors were undocumented aliens.
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(B) Harboring 108. Knowing or acting in reckless disregard of the fact that janitors were aliens in the United States in violation of the law, Wal-Mart knowingly shielded janitors from detection by committing multiple acts of harboring.
109. Janitors work in Wal-Mart stores on an overnight shift when the stores are either closed or (if they remain open 24 hours a day) have less retail traffic. In stores which closed overnight, Wal-Mart made a regular and systematic practice of locking janitors whom it knew were in the United Stated illegally in its stores overnight. By locking janitors in the stores Wal-Mart thus limited the ability of federal law enforcement authorities (and others) to detect the janitors while they were at work facilitating their continued employment and presence in the United States. As outlined in paragraphs 8-16, 21-22, supra plaintiffs Victor and Arturo Zavala, Gomez, Flores, Denisio, Palacios, Tello Mendez, Condado, Zednek and Jaros all worked in stores where management locked them in during their shifts. Because Wal-Mart knew (or recklessly disregarded the fact) that each of these plaintiffs was an illegal alien, unauthorized to work in the United States, by locking these plaintiffs in the stores Wal-Mart committed multiple counts of harboring unlawful aliens in violation of 8 U.S.C. §1324(a)(1)(A)(iii). On information and belief, hundreds of other janitors were similarly harbored by Wal-Mart from 1997 through to the present.
110. On November 14, 2001, INS agents arrested four illegal aliens at the Wal-Mart at 9051 Hillcrest Road, Kansas City, Missouri. The four (Yordan Ivamov Saev, Hristo Pramatarov, Vesela Grankova and Ivona Alexandrova) are Bulgarians who spoke little or no English. INS agents advised the assistant store manager and invoice manager that the four were
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unlawful aliens. These janitors were provided through Pinnacle Management. Within an hour of when INS arrested the four Bulgarians, at the request of Wal-Mart management, Pinnacle sent over replacements who were then permitted to work by Wal-Mart. Two separate crews composed of undocumented aliens worked at this store, one for a 12 hour day shift and one for a 12-hour night shift and thus were in the store 24 hours a day, 7 days a week. Wal-Mart permitted the undocumented aliens to sleep in a back room in the store and to keep their personal belongings there knowing (or acting in reckless disregard of the fact) that they were undocumented aliens, thus shielding them from detection by federal law enforcement authorities. In so doing, Wal-Mart knowingly harbored unlawful aliens in thereby committing at least four violations of 8 U.S.C. §1324(a)(1)(A)(iii). The use of multiple sub-contractors and corporate shells to provide Wal-Mart with undocumented migrant janitorial labor was intended and did shield migrants known by Wal-Mart and its contractors to be unauthorized to work in the United States from detection and thus encouraged the aliens to reside in the United States by prolonging their presence here. The foregoing conduct by Wal-Mart’s maintenance contractors including, but not limited to companies controlled by Walters and Clancey, constitutes encouraging unauthorized aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(iv) and harboring of aliens in violation of 8 U.S.C. §1324(a)(1)(A)(iii)
(C) Aiding and Abetting 111. As outlined elsewhere in this Second Amended Complaint, Wal-Mart knew that the janitorial labor its various contractors supplied was encouraged to travel to or remain in the United States, and transported and harbored by the contractors.
112. Wal-Mart knowingly facilitated and helped to bring about (and thus aided and abetted) that encouraging and harboring by financing the unlawful activity through
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payments to the contractors. Wal-Mart’s millions of dollars in payments underwrote not only the labor of the janitors but the overhead costs and thus the criminal activity of the contractors, making their crimes possible and helping to bring them about.
113. In 1999 the Wal-Mart store in Lexington, Virginia used IMC to provide it with undocumented migrant janitorial cleaning crews. In November 1999, that crew was comprised of five Russian nationals who were employed through Stanislaw Kostek. Kostek knew that all five crew members were undocumented migrants unauthorized to work in the United States. All five lived in a single apartment in the Willow Spring apartment complex in Lexington rented by Kostek. Kostek’s renting of the apartment for the janitors and his placement of them in positions at the Lexington Wal-Mart amount to harboring of illegal aliens under 8 U.S.C. §1324(a)(1)(A)(iii) and encouraging them to continue to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(iv). On or about November 19, 1999, two of the five janitors were arrested for theft of merchandise from Wal-Mart. In connection with the arrests, Wal-Mart store manager Jason Taylor was present at the Willow Spring apartment maintained for the janitorial crew when stolen goods were recovered. Prior to the arrest Taylor knew or acted in reckless disregard of the fact that the janitorial crew were migrants unauthorized to work in the United States.
114. On November 20, 1999 Taylor contacted IMC and requested that IMC provide a replacement crew for the overnight shift that day. Taylor knew that IMC would, in response to his request, cause undocumented migrants to be transported from New York to Lexington, Virginia where they would be housed at the Willow Spring complex. In response to Taylor’s request, IMC transported a crew of five Russian migrants unauthorized to work in the
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United States from New York City to Lexington, Virginia, in time to clean the store the night of November 20. The transportation of the undocumented migrants was in violation of 8 U.S.C. §1324(a)(1)(A)(ii). The replacement crew was housed (together with the original crew) as arranged by IMC at the same Willow Spring apartment in Lexington, amounting to harboring of illegal aliens under 8 U.S.C. §1324(a)(1)(A)(iii). In calling on IMC to supply a replacement janitorial crew on November 20 that it agreed to employ at its Lexington, Virginia, store, WalMart and, on information and belief, in subsequently paying IMC for doing so, facilitated and brought about the transportation and harboring of the replacement crew by IMC and its agent Kostek, amounting to at least five counts of aiding and abetting in violation of 8 U.S.C. §1324(a)(1)(A)(v)(II).
115. On November 14, 2001, INS agents arrested six undocumented migrants working in the cleaning crew at the Wal-Mart in Lee’s Summit, Missouri. The crew was comprised of three Georgian and three Bulgarian nationals. The crew was supplied through Pinnacle Management, a Walters company. Federal agents advised the store manager, Joel Bierbaum, that his Pinnacle cleaning crew was comprised of undocumented aliens. Following the arrests, Bierbaum arranged for Pinnacle to supply a replacement crew which arrived that evening to clean the store. In January 2002, Bierbaum advised federal law enforcement agents that the replacement crew was comprised of all foreign nationals. On information and belief, those foreign nationals were (and Wal-Mart knew them to be) undocumented migrants. In requesting Pinnacle to supply a replacement crew that it intended to put to work cleaning its store, Wal-Mart caused and thus aided and abetted Pinnacle to transport undocumented aliens in multiple violations of 8 U.S.C. §1324(a)(1)(A)(ii).
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116. Similarly, as outlined above, on November 14, 2001, within an hour of an INS raid that led to the detention of its cleaning crew, Wal-Mart caused Pinnacle to transport undocumented migrants to its store on Hillcrest Road in Kansas City, Missouri when it requested a replacement crew. Pinnacle’s transportation of the replacement crew was in violation of 8 U.S.C. §1324(a)(1)(A)(ii) and Wal-Mart aided and abetted that violation by helping to bring it about by requesting the replacement crew.
II. Conspiracy By Wal-Mart to Commit Money Laundering 117. As specified in paragraph 47, supra, Wal-Mart, through Schuetz directed
Walters to establish several corporate fronts through which Walters could continue to provide undocumented migrant janitorial labor to Wal-Mart and through which he would be paid. As part of that agreement and conspiracy and as further described at paragraphs 47, 52, 58, 85, 9597 supra and in Exhibit E at paragraphs 99-100, Wal-Mart agreed to (and did) conduct financial transactions affecting interstate commerce with the shell companies, namely the payment by check or wire transfer of monies intended to compensate the contractors for janitorial labor, involving the proceeds of the illegal activity of harboring, transporting and encouraging illegal aliens to reside in the United States. In so doing, Wal-Mart knew that its payments to these shell companies would disguise the ownership or control of those proceeds and that those payments would further promote the carrying on of the underlying unlawful activity, as the illegal hiring scheme required that the janitors be financially supported (albeit under unlawful terms) and that the necessary overhead costs of the contractors be met. On information and belief, similar conspiracies to launder the proceeds of the hiring of undocumented migrant janitors were reached with other Wal-Mart contractors. Information concerning the activities of other WalMart contractors is not presently available to plaintiffs and may be in the possession federal law
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enforcement officials in connection with their various investigations) and plaintiffs’ counsel was unsuccessful in efforts to obtain these data and documents despite interviews with numerous named plaintiffs and members of the plaintiff class both in the United States and abroad. Thus, specific allegations as to that information by plaintiffs will have to await some discovery in this case.
III. Forced Labor and False Imprisonment By Wal-Mart 118. A component of the Wal-Mart Enterprise is the use of compulsory or
forced labor by legal or extra-legal coercion. Contractors used or threatened to use coercion (including physical coercion) which caused undocumented plaintiffs and other class members reasonably to believe that, given their vulnerable status, they had no alternative but to continue to work at Wal-Mart. Wal-Mart also compelled the labor of the janitors through its widespread and systematic practice of intentionally locking these vulnerable workers into its stores during their shifts. The Subclass Representatives and subclass members knew they were so confined to the stores by Wal-Mart. Such confinement was against their will and resulted in physical and emotional injury of plaintiffs and coerced plaintiffs to work for Wal-Mart whether they wanted to or not.
119. Wal-Mart and many of its contractors at times refused to pay class members anything at all for their work. Others forced janitors to pay a “security deposit,” withholding all compensation from them for weeks at a time to insure their continued work as janitors. Janitors complained to Wal-Mart store managers that they had not been paid for their services, but Wal-Mart failed or refused to act and instead tolerated and benefited from these practices. Plaintiffs were told that they could leave their assigned cleaning crews and recover the compensation that had been withheld from them only if they found replacement janitors for
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Wal-Mart.
120. Other class members were threatened with deportation or other adverse legal action. For example, one janitor complained about his crew’s wages and working to Clancey. In response, and in front of a number of other janitors, Clancey threatened this man with arrest and deportation if he continued to complain and in so doing coerced him and the other janitors who worked with him to continue to work for Clancey and his various cleaning firms. The same threat was made by a Czech contractor known as Michael, l/n/u, at a Wal-Mart store in Bristol, Connecticut to plaintiffs Zednek and Jaros or around October, 2002. On information and belief, many other Wal-Mart contractors used the threat of deportation to frighten undocumented janitors into acquiescence. The continued employment of the janitors in the face of these threats constitutes forced or involuntary servitude prohibited by 18 U.S.C. §1584. Proximate Causation
121. The commission of the predicate acts of racketeering alleged in this Second Amended Complaint were a necessary cause of the harm suffered by plaintiffs. Systematic violation of immigration law – the hiring, harboring, trafficking or transportation of undocumented alien labor – was the necessary means through which plaintiffs were denied proper compensation, and in some cases physically beat up, unlawfully imprisoned and coerced into continuing to work at Wal-Mart. Systematic violation of immigration law was also the necessary means for participants in the enterprise to profit as they did from exploiting plaintiffs. Use of the mails and wire were, on information and belief, essential to the operation of the scheme. Money laundering also directly harmed plaintiffs inasmuch as it shielded the enterprise from detection and thereby continued its existence.
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COUNT ONE RICO
122. Plaintiffs repeat and reallege each of the allegations contained in paragraphs 1 through 121 as if fully set forth herein.
123. At all relevant times, each of the plaintiffs was a “person” within the meaning of RICO, 18 U.S.C. §§1961(3) and 1964(c).
124. At all relevant times, Wal-Mart and its various contractors were “persons” within the meaning of RICO, 18 U.S.C. §§1961(3) and 1962(c).
125. At all relevant times, Wal-Mart and its contractors formed an association-in-fact for the purpose of profiting from a systematic violation of immigration and labor, wage and hour laws and other laws, referred to as the “Wal-Mart Enterprise.” The WalMart Enterprise was an “enterprise” within the meaning of RICO, 18 U.S.C. §1961(4).
126. At all relevant times, the Wal-Mart Enterprise was engaged in, and its activities affected, interstate and foreign commerce, within the meaning of RICO, 18 U.S.C. §1962(c).
127. At all relevant times, each of the conspirators associated with this enterprise conducted or participated, directly or indirectly, in the conduct of the enterprise’s affairs through a “pattern of racketeering activity” within the meaning of RICO, 18 U.S.C. §1961(5), in violation of §1962(c).
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contractors identified in this Second Amended Complaint (and others presently unknown to plaintiffs) engaged in “racketeering activity” within the meaning of 18 U.S.C. §1961(1) by engaging or aiding and abetting in the acts set forth above. The acts set forth above constitute a violation of one or more of the following statutes: transporting undocumented aliens, in violation of 8 U.S.C. §1324(a)(1)(A)(ii); harboring undocumented aliens in violation of 8 U.S.C. §1324(a)(1)(A)(iii); encouraging undocumented aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(iv); conspiring to transport, harbor and encourage illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I); aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(II); committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1)(B)(i); involuntary servitude in violation of 18 U.S.C. §1584; and conspiracy to money launder the proceeds of the aforesaid criminal acts in violation of 18 U.S.C. §§1956(h). Each of the foregoing acts are “predicate” acts within the meaning of 18 U.S.C. §1961(1). The conspirators, i.e., each of the contractors identified in this Second Amended Complaint (as well as others presently unknown to plaintiffs) and Wal-Mart, committed themselves, or aided and abetted in the commission of, at least two or more of these predicate acts of racketeering activity over the period of time the Wal-Mart Enterprise has existed.
129. The acts of racketeering activity referred to in the previous paragraph constitute a “pattern of racketeering activity” within the meaning of 18 U.S.C. §1961(5). The acts alleged were related to each other by virtue of common participants, common victims (the plaintiff class), a common method of commission, a common purpose, and a common result of
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denying to the plaintiff class the protections of wage and hour and other labor laws in order to enrich Wal-Mart at the plaintiffs’ expense. The Wal-Mart Enterprise was run through this pattern of predicate acts of racketeering since at least March 1997 and continuing at least through the time of the Operation Rollback immigration enforcement raids in October 2003.
130. As a result of Wal-Mart’s violation of 18 U.S.C. §1962(c), plaintiffs and those similarly situated have suffered damages, and Wal-Mart has profited, in an amount not yet determined, but believed to be hundreds of millions of dollars.
131. As a result of its misconduct, Wal-Mart is liable to plaintiffs for their losses in an amount to be determined at trial.
132. Pursuant to RICO, 18 U.S.C. §1964(c), plaintiffs are entitled to recover threefold their damages plus costs and attorneys’ fees from Wal-Mart.
COUNT TWO RICO CONSPIRACY 133. Plaintiffs repeat and reallege each of the allegations contained in paragraphs 1 through 132 as if fully set forth herein.
134. At all relevant times, the plaintiffs and those similarly situated were “persons” within the meaning of RICO, 18 U.S.C. §§1961(3) and 1964(c).
135. At all relevant times, Wal-Mart and its contractors were each a “person” within the meaning of RICO, 18 U.S.C. §§1961(3) and 1962(d).
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association-in-fact enterprise for the purpose of defrauding and injuring the plaintiffs and those similarly situated to them. This association-in-fact was an “enterprise” within the meaning of RICO, 18 U.S.C. §1961(4).
137. At all relevant times, this enterprise was engaged in, and its activities affected, interstate and foreign commerce, within the meaning of RICO, 18 U.S.C. §1962(c).
138. As set forth in Count One, at all relevant times, each of the persons associated with this enterprise conducted or participated, directly or indirectly, in the conduct of the enterprise’s affairs through a “pattern of racketeering activity” within the meaning of RICO, 18 U.S.C. §1961(5), in violation of 18 U.S.C. §1962(c).
139. At all relevant times, Wal-Mart and its contractors were each associated with the enterprise and agreed and conspired to violate 18 U.S.C. §1962(c), that is, agreed to conduct and participate, directly and indirectly, in the conduct of the affairs of the aforementioned enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. §1962(d). In particular, Wal-Mart and its contractors agreed to commit two or more of the acts of racketeering specified in the preceding paragraphs of this Second Amended Complaint.
140. The conspirators committed and caused to be committed a series of overt acts, in furtherance of the conspiracy and to affect the objects thereof, including but not limited to, the acts set forth above.
141. As a result of the conspirators’ violations of 18 U.S.C. §1962(d), the plaintiffs and those similarly situated were damaged in an amount equal to hundreds of millions of dollars.
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142. As a result of the conspiracy, Wal-Mart is liable to plaintiffs for their losses in an amount to be determined at trial.

143. Pursuant to RICO, 18 U.S.C. §1964(c), plaintiffs are entitled to recover threefold their damages plus costs and attorneys’ fees from Wal-Mart.

COUNT THREE CONSPIRACY TO VIOLATE CIVIL RIGHTS UNDER 42 U.S.C. §1985(3)
144. Plaintiffs’ claims for conspiracy to violate civil rights under 42 U.S.C. § 1985(3) were dismissed with prejudice on October 7, 2005.

COUNT FOUR

FAIR LABOR STANDARDS ACT

145. forth fully herein.

Plaintiffs repeat and reallege paragraphs 1 through 144 hereof as set

146. Sections 6 and 7 of the FLSA, 29 U.S.C. §§206 and 207, establish the right of all persons who are “suffered or permitted to work” to be paid a minimum wage for all hours worked and overtime pay at one and one-half times the person’s regular rate for all hours worked in excess of forty hours per week. Section 16(b) of the FLSA, 29 U.S.C. §216(b), entitles such persons to recover all unpaid wages plus interest, an equivalent amount as liquidated damages, and reasonable attorneys’ fees and costs. At all times relevant to this action, Wal-Mart failed and refused to pay plaintiffs minimum wage for all hours worked and failed and refused to pay plaintiffs the overtime premiums required by the FLSA to plaintiffs’ damage in

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amounts to be proven at trial. The Class Representatives consent to be parties to this action pursuant to 29 U.S.C. §256.
147. Wal-Mart’s failure to provide required compensation for all hours worked by plaintiffs with the knowledge, consent, and expectation of Wal-Mart’s supervisors and other managing agents constitutes a willful violation of the FLSA within the meaning of 29 U.S.C. §255(a).
148. The term “employee” is defined in the FLSA as “any individual employed by an employer.” 29 U.S.C. §203(e)(1). An “employer” is defined broadly as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. §203(d). The verb “employ” is defined expansively to mean “suffer or permit to work.” 29 U.S.C. §203(g). All members of the class are or were employees of Wal-Mart, for which they performed services within these definitions. At all material times, Wal-Mart has acted as plaintiffs’ “employer” and is or was “employing” them within the meaning of the FLSA and under principles of common law.
149. As plaintiffs’ employer, Wal-Mart is liable for the plaintiffs’ back pay, liquidated damages, and other relief under the FLSA.
150. By virtue of Wal-Mart’s unlawful failure and refusal to pay plaintiffs overtime wages and other wages and benefits to which they are entitled, plaintiffs have lost wages due to them in amounts to be proven at trial. Wal-Mart is liable to the members of the class for class members’ unpaid wages, liquidated damages under FLSA §216(b), attorneys’ fees and costs.
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COUNT FIVE

FALSE IMPRISONMENT

151. forth fully herein.

Plaintiffs repeat and allege paragraphs 1 through 150 hereof as if set

152. Defendant Wal-Mart intentionally engaged in a widespread and systematic practice of locking janitors in at Wal-Mart stores during their shifts against their will. Subclass representatives and members were aware of their confinement by this practice and suffered severe physical and emotional harm from it. Wal-Mart thus falsely imprisoned the members of the subclass.

153. As a proximate result of said conduct, plaintiffs have suffered and continue to suffer bodily injury, extreme mental distress, humiliation and anguish, and other emotional and physical injuries, all to their damage in amounts to be proven at trial. Defendant committed the acts alleged herein maliciously, fraudulently and oppressively, with the wrongful intention of injuring plaintiffs from an improper and evil motive, amounting to malice and in conscious disregard of plaintiffs’ rights. Subclass Plaintiffs thus are entitled to recover punitive damages from Defendant in amounts to be proven at trial.

DEMAND FOR JURY TRIAL Plaintiffs hereby request a jury trial on all issues so triable.

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PRAYER FOR RELIEF WHEREFORE, plaintiffs pray for relief in their favor: (1) Certifying this case as a class action; (2) Entering a judgment declaring the rights of the parties; (3) Entering appropriate preliminary and permanent injunctive relief
prohibiting Wal-Mart from further violations of law; (4) Awarding the plaintiffs back wages and other damages, including
compensatory, treble and punitive damages, in an amount to be determined at trial; (5) Awarding plaintiffs liquidated damages under FLSA §16(b); (6) Awarding plaintiffs their reasonable attorneys’ fees and costs; and (7) Awarding plaintiffs such further relief as the Court may deem appropriate.
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Case 2:03-cv-05309-JAG-MCA Document 75-1 Filed 11/21/2005 Page 67 of 67

 
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Case 2:03-cv-05309-JAG-GDH James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 206 Claremont Avenue Montclair, New Jersey 07042 (973) 509-0011 - and330 West 42"d Strcet New York, New York 10036
(212) 563·4100

Document 6

Filed 02/02/2004 Page 1 of 43
RECEIVED -CLEfii\ U.S. DISTf<ICT CCUI:! ZOD~ FEB - 2 A g: 23

Gilberto Garcia GARCIA AND KRICKO ATTORNEYS AT LAW 68 Summit Avenue Hackensack, New lersey 07601 (201) 343-1124

Della Bahan Puja Batra BAHAN & ASSOCIATES 140 South Lake Avenue Suite 230 Pasadena, California 91101 (626) 796-5100 Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT
_D_I_S__T_R__IC__T__O__F__N__E_W___J_E__R_S__E_Y__________________________-x

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO

FLORES, OCTAVIO DENISIO, HIPOLITO

PALACIOS, CARLOS ALBERTO TELLO,

MAXIMILIANO MENDEZ, ARTURO ZAVALA,

FILIPE CONDADO, LUIS GUTIERREZ, DANIEL

ANTONIO CRUZ, PETR ZEDNEK, TERESA lAROS,

JlRI PFAUSER, HANA PFAlJSEROVA, PAVEL

KUNC and MARTIN MACAK, on behalf of themselves :

and all others Similarly situated,

:

- against -

Plaintiff.~,

Civil Action No. 03-Civ.- 5309 (JAG)
FIRST AMENDED CLASS ACTION COMPLAINT AND JURY DEMAND

WAL-MART STORES, INC.,
_____________________________________D__e_f_e_n_d__a_n_t._________ x

Case 2:03-cv-05309-JAG-GDH Document 6 Filed 02/02/2004 Page 2 of 43
FIRST AMENDED CLASS ACTION COMPLAINT AND J1JRY DEMAND Plaintiffs Victor Zavala, Eunice Gome:!;, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Filipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jill Pfauser, Hana Ptll.Userova, Pavel Kunc and Martin Macak, on behalf ofthemse1ves and all others similarly situated, by and through their attorneys Cohen, Weiss and Simon LLP, Garcia and Kricko, and Bahan & Associates, for their First Amended Class Action Complaint state as follows:
INTRODUCTION I. This is an action by plaintiffs on their own behalf and on behalf of all others similarly situated under the Racketeer Influenced Corrupt Organizations Act ("RICO"), 18 U.S.C. §1961, el seq., 42 U.S.C. §1985(3), the Civil Rights Act of 1871, 42 U.S.C. §1985(3), the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §201, et seq., and common law to seek redress for damages directly caused by the exploitative criminal enterprise created by defendant Wal-Mart Stores, Inc. ("Wal-Mart") who, acting in combination with its various janitorial contractors, systematically violated immigration and protective wage and hour laws and other laws for its own profit and benefit. 2. On October 23, 2003, United States Immigration and Customs Enforcement ("USICE") officers raided multiple retail stores owned and operated by Wal-Mart in 21 states across the country, arresting hundreds ofjanitors for alleged immigration violations (hereinafter "Operation Rollback"). Those arrested were allegedly undocumented immigrants from countries including Mexico, the Czech Republic, Mongolia, Brazil, Uzbekistan, Poland, Russia, Georgia, and Lithuania. Among those arrested were the named plaintiffs Victor Zavala,

Case 2:03-cv-05309-JAG-GDH Document 6 Filed 02/02/2004 Page 3 of 43
Arturo Zavala, Eunice Gomez, Maximiliano Mendez, Carlos Alberto Tello, Antonio Flores, Hipolito Palacios, Octavio Denisio, Luis Gutierrez, Daniel Antonio Cruz, Pavel Kunc and Martin
,
Macak. Wal-Mart officials reportedly acknowledged that at least 10 of the immigrants arrested during Operation Rollback in Arizona and Kentucky were employed directly by Wal-Mart. The others were employed through various maintenance contractors as part of the criminal enterprise. At the same time it arrested hundreds ofjanitors, federal agents raided Wal-Mart's corporate headquarters in Bentonville, Arkansas, seizing documents and materials in support of an ongoing criminal investigation by the United States Attorney for the Middle District of Pennsylvania targeting Wal-Mart. Upon infornlation and beliet~ a federal grand jury has been convened in that district to consider possible criminal indictments.
3. Operation Rollback was but the latest in a series of federal and state law enforcement actions directed at Wal-Mart's systematic violation of labor and inlmigration laws. These raids have revealed that Wal-Mart, in association with a plethora of maintenance subcontractors, has tor over five years relied on the labor of vulnerable immigrants to perform necessary cleaning services in its thousands of stores nationwide. Despite repeated law enforcement actions, Wal-Mart ha~ continued to have undocumented immigrant janitors work well in excess of 40 hours pcr week in its stores without overtime pay and, in some cases, any pay at all. As outlined below, Wal-Mart was fully aware that undocumented workers were employed in its stores and continued the practice because it was profitable. Wal-Mart disguises its role as employer of undocumented workers through its association with maintenance cuntractors who systematically violate immigration laws by trafficking, harboring and hiring undocumented workers, who arc unaware of their rights, afraid to complain and, thus, easily
3

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exploited. This action is directed at compensating plaintiffs for the harm caused to them by this criminal enterprise.
.JURISDICTION AND VENUE 4. This Court's Jurisdiction is based upon 28 U.S.c. §§1331 and 1337; 29 U.S.C. §216(b); 18 U.S.C. §1964(c), and applicable principles of supplemental jurisdiction under 28 U.S.C. §1367(a). 5. Venue is proper in this judicial district pursuant to 28 U.S.C. §§1391(b) and (d) and lSU.S.C. §1965.
THE PARTIES Plaintiffs
The Class Representatives 6. Plaintiffs Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Dcnisio,
Hipolito Palacios, Carlos Alberto TeIlo, Maximiliano Mendez, Arturo Zavala and Filipe Condado are residents ofthe State of New Jersey and arc nationals of Mexico. Plaintiffs Luis Gutierrez and Daniel Antonio Cruz are residents of the State of Texas and nationals of Mexico. PlaintiffPetr Zednck is a resident of the State of Alabama and is a national of the Czech Republic. PlaintiffTcrcsa Jaros is a resident of the State of Alabama and a Polish national. Plaintiffs Jiri pfauser and Hana pfauserova are residents of Florida and nationals of the Czech Republic. Plaintiff Martin Macak is a resident of Virginia and a national of Slovakia. Plaintit! Pavel Kunc is a resident of the Czech Republic and a Czech national. These plaintiffs (the "Class Representatives") seek to represent a class consisting of thousands of undocumented and recently documented immigrants, currently, formerly, or in the future to be, employed as janitors
4

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to clean Wal-Mart stores. Each ofthe Class Representatives worked fix Wal-Mart and one or more of its co-employer maintenance contractOrs. At material times, plaintiffs Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala and Filipe Condado were employed within the jurisdiction of this Court.
7. Victor Zavala is a native of Mexico and a resident of New Jersey. He was born on May 9, 1975 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to dcportation from the United States at the initiative of USICE. Zavala was arrested in the USICE raid on October 23,2003 of the Wal-Mart store located in Piscataway, New Jersey and is presently released under his own recognizance. He performed cleaning serviccs for Wal-Mart for approximately 36 months. During that time, he was paid weekly in a lump sum of approximately $500 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a WalMart manager appeared with a key. Zavala was not provided with workers' compensation, hcalth insurance coverage, sick leave pay, or disability benefits and did not have payroll taxcs withhcld from his pay.
8. Eunice Gomez is a native of Mexico and a resident of New Jersey. She was born on August 30, 1977 and speaks little or no English. Her immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Gomez was arrested in USIC£'s October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under her own recognizance. Gomez
5

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perfonned cleaning services for Wal~Mart for 29 months. She was paid weekly in a lump sum of approximately $500 and was obligated to work seven days a week. She worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked her in the store at night, and she was not able to leave unless and until a Wal-Mart manager appeared with a key. Gomez was not provided with workers' compensation or health insurance coverage, sick leave pay, or disability benefits and did not have payroll taxes withheld from her pay.
9. Antonio Flores is a native of Mexico and a resident of the State of
New Jersey. He was born on June 13, 1978 and speaks little or no English. His immigration status is tllat of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Flores was arrested in USICE's October 23, 2003 raid in Piscataway, New Jersey and is presently released under his own recognizance. Flores perfomlcd cleaning services for Wal-Mart for the 24 months preceding his arrest at Wal-Mart stores in New Jersey. He was paid weekly in a lump sum of approximately $400 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wa\-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal· Mart manager appeared with a key. On one occasion, Flores, a diabetic, cut his hand severely while working at a Wal-Mart store, but because he was locked in, he was forced to wait until the next morning to go to a hospital. Flores did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave disability benefits and did not have payroll taxes withheld from his pay.
10. Octavio Denisio is a native of Mexico and a resident of New Jersey. He was born on November 11, 1984 and speaks little or no English. Denisio was arrested in
6

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USICE's October 23,2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under his own recognizance. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Denisio performed cleaning services for Wal-Mart during the time period relevant to this lawsuit. Denisio was paid weekly in a lump sum of approximately $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-},Iart management locked him in the storc at night, and he was not able to leave unless and until a WalMart manager appeared with a key. Dcnisio was not provided with workers' compensation or health insurance coverage, sick leave payor disability benefits and did not have payroll taxes withheld from his pay.
11. Hipolito Palacios is a native of Mexico and a resident of New Jersey. He was born on August 13, 1979 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Palacios was arrested in USICE's October 23,2003 raid of the Wal-Mart store located in Piscataway, New Jersey and is presently released under his own recognizance. Palacios pertormed cleaning services for Wal-Mart for 42 months during the time period relevant to this lawsuit. He was paid weekly in a lump sum of approximately $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Matt manager appeared with a key. Palacios was not provided with workers' compensation or health insurance coverage, sick leave payor disability benefits and did not have payroll taxes withheld from his pay.
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12. Carlos Alberto Tello is a native of Mexico and a resident of New Jersey. He was born on September 9, 1979 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Tello was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under his own recognizance. Tello performed cleaning services for Wal-Mart for one year prior to his arrest. He was paid weekly in a lump sum of $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared witll a key. Tello was not provided with workers' compensation or health insurance coverage, was not provided with sick leave or disability insurance coverage and did not have payroll taxes withheld from his pay.
13. Maximiliano Mendez is a native of Mexico and a resident of New Jersey. He was born on May II, 1984 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Mendez was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under his own recogni7..ance. Mendez performed cleaning services for Wal-Mart for one year prior to his arrest. He was paid weekly in a lump sum ofapproximate1y $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key.
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Mendez did not have workers' compensation or health insurance coverage, was not provided with sick leave payor disability benefits and did not havc payroll taxes withheld from his pay.
14. Arturo Zavala is a native of Mcxico and a resident of New Jersey. He was bam on February 10, 1974. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Zavala was arrested in USICE's October 23,2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under his own recognizance. He performed cleaning services for Wal-Mart for two months prior to his arrest. Zavala was paid weekly in a lump sum of$350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Zavala did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
15. Felipe Condado is a native of Mexico and a resident of New Jersey. He was bom on April 20, 1974 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Condado was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under his own recognizance. Condado performed cleaning services for Wal-Mart for six months prior to his arrest. He was paid weekly in a lump StUll of$350 and was obligated to work seven days a week. Wal-Martmanagement locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. He worked at least 60 hours per week but did not receive overtime
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Case 2:03-cv-05309-JAG-GDH Document 6 Filed 02/02/2004 Page 10 of 43
pay. Condado did not have workers' compensation or health insurance benefits, was not entitled to receive sick disability benefits and did not have payroll taxes withheld from his pay.
16. Plaintiffs Victor Zavala, Gomez, Flores, Denisio, Palacios, Tello, Mendez, Zavala and Condado worked for Wal-Mart through a variety of firms owned or controlled by Kenneth Clancy or members of his immediate family. These entities included Facility Solutions Incorporated; Facility Solutions International, Mitchell Industries, LLC; Ruth and Sons LLC; JWM Commercial Cleaning; and RT Cleaning.
17. Luis Gutierrez is a native of Mexico and a resident of Texas. He speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USTCE. Gutierrez was arrested in USICE's October 23, 2003 raid ofa Wal-Mart store in San Antonio, Texas, and is presently released under his own recognizance. He has performed cleaning services at various Wal-Mart stores in San Antonio, Round Rock, Cedar Park, Marble Falls and Kerrville, Texas beginning in November 2001 and continuing through December 2003. He was paid weekly in a lump swn of $500 and was obligated to work at least six days a week and often seven days a week. He worked at least 48 hours per week but did not receive overtime pay. Gutierrez did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
18. Daniel Antonio Cruz is a native of Mexico and a resident of Texas. He speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Cruz was arrested in USICE's October 23,2003 raid of a Wal-Mart store in San Antonio, Texas, and is prcscntly
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released under his ov,n recognizance. He performed cleaning services at Wal-Mart stores in San Antonio beginning in May 2003 and continuing through December 11, 2003. He was paid weekly in a lump sum of $325 and was obligated to work seven days a week. He worked approximately 60 hours per week but did not receive overtime pay. Cruz was not provided with workers' compensation or health insurance coverage, sick leave payor disability benefits and did not have payroll taxes withheld from his pay.
19. Plaintiffs Guttierez and Cruz worked for Wal-Mart through firms owned or controlled by Tom Parker. These included Alamo National Service and Alamo Cleaning Services, Inc.
20. Petr Zednek is a national of the C7.ech Republic and a resident of Alabama. lIe speaks little English. Zednek performed cleaning services at Wal-Mart stores in Bristol, Connecticut; Alma, Michigan; and Monroe, Georgia at times between September 2002 and December 2003. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. He was promised compensation of approximately $1,500 per month and was obligated to work seven days a week. Hc worked approximately 70 hours per week but did not receive overtime pay. In Alma, Michigan, Zcdnek's contractor refused to pay him in retaliation for his refusal to purchase a fraudulent social security number from the contractor. In addition, one of his paychecks (for $1,492) was returned for "insufficient funds," and he was not paid at all for that month's work. Wal-Mart officials in Michigan and Georgia knew of this situation and of Zednek' s undocumented status yet continued to use him to clean their stores. While working as a janitor at Wal-Mart, he was repeatedly abused and told that he could be deported if he complained. Except
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for only five days when the store at Alma, Michigan was open 24 hours per day for the holiday scason, Zcdnck was locked in at night at all of the Wal-Mart stores where he worked, and could not leave unless and until a Wal-Mart manager appeared with a key. Zednek was not provided with workers' compensation or health insurance coverage, sick leave payor disability benefits and did not have payroll taxes withheld from his pay.
21. Teresa Jaros is a Polish national and a resident of Alabama. She speaks little or no English. Her immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Jaros performed cleaning services at Wal-Mart stores in Bristol, Connecticut; Alma, Michigan; and Monroe, Georgia at times between September 2002 and December 2003. She was promised compensation of$I,500 per month and was obligated to work seven days a week. She worked approximately 70 hours per week but did not receive overtime pay. In Alma, Michigan, Jaros' contractor refused to pay her in retaliation for her refusal to purchase a fraudulent social security number from the contractor. Also, one of her paychecks (for $1,306.40) was returned for "insuflicient funds," and she was not paid at all for that month's work. Wal-Mart oflicials in Michigan and Georgia knew of this situation and Jaros' undocumented status yet continued to use her to clean in their stores. While working as ajanitor at Wal-Mart, Jaros was repeatedly abused and told that she could be deported if she complained. Except for only five days when the Wal-Mart store at Alma, Michigan was open for 24 hours per day for the holiday season, Jaros was locked in at night at all of the Wal-Mart stores where she worked, and could not leave unless and until a Wal-Mart manager appeared with a key. Jaros did not have workers' compensation or health insurance
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benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from her pay.
22. Plaintiffs Zednek and Jaros worked for Wal-Mart through a variety of firms including: Daniel's Cleaning Service; SCSI Southern Cleaning Services Inc.; United Services Sources; Proline Management, Inc.; KK Unlimited, and Kina Cleaning.
23. Jiri Pfauser is a national of the Czech Republic and a resident of Florida. He speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. pfauser performed cleaning services at Wal-Mart stores in Starkville, Mississippi and West Palm Beach, Florida at times between February 2001 and June 2002. lIe was promised compensation of$I,500 per month and was obligated to work seven days a week. He worked a minimum of 56 hours per week but did not receive overtime pay. He was required to pay a "security deposit" of$500 to ensure that he did not leave his work at Wal-Mart without permission. He was never paid this $500 nor was he paid at all for six weeks' work at Wal-Mart in May and June, 2002. Pfauser did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
24. Hana pfauserova is a national of the Czech Republic and a resident of Florida. She speaks little or no English. Her immigration status is that of an undocumented alicn who may be subject to deportation from the United States at the initiative of USICE. pfauserova performed cleaning services at Wal-Mart stores in Starkville, Mississippi and West Palm Beach, Florida at times between February 2001 and June 2002. She was promised compensation of$I,400 per month and was obligated to work seven days a week. She worked a
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minimwn of 56 hours per week but did not receive overtime pay. She was required to pay a "security deposit" of$500 to ensure that she did not leave her work at Wal-Mart without permission. She was never paid this $500 nor was she paid at all for six weeks' work al WalMart in May and June, 2002. Pfauserova did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from her pay.
25. pfauser and Pfauserova worked at Wal-Mart through an individual named Walter Budniak.
26. Martin Macak is a national of Slovakia and a resident of Virginia. He speaks little or no English. Between 1996 and October 23,2003 he was a resident of the United States and performed cleaning services at Wal-Mart stores in Winchester, Alexandria and Sterling, Virginia. At relevant times until he was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Sterling, Virginia, Maeak's status was that of an undocwnented alien subject to deportation from the United States at the initiative of USICE. On October 23, 2003 he was arrested and given a notice to appear by USICE and is presently released upon his own recognizance. He was promised compensation of between $1,300 and $2,000 per month for his work at Wal-Mart and was obligated to work seven days a week. He worked approximately 56 hours per week but did not receive overtime pay. In approximately 1999, one of Macak's janitor co-workers, also from Slovakia and undocumented, was swnmarily fired on false charges of misconduct by Chuck Richards, the Wal-Mart store manager in Winchester, Virginia. Richards ordered Macak's co-worker to stop work immediately and permanently Icave the Wal-Mart store and parking lot within 60 seconds' time. Macak did not have workers' compensation or health
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insurance benefHs, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay. Macak worked at Wal-Mart through a variety of cleaning contractors: Crystal Clear; Handy Man Cleaning Service; Floor Magi; and Bright Management.
27. Pavel Kunc is a resident and national of the Czech Republic. He speaks little or no English. Between February 2003 and October 23, 2003 he was a resident of the United States and performed cleaning services at a Wal-Mart store in Madison Heights, Virginia. At relevant times UIItil he was arrested in usrCE's October 23, 2003 raid of the Wal-Mart store in Madison Heights, Virginia, Kune's status was that of an undocumented alien subject to deportation from the United States at the initiative ofUsrCE. His employment at Wal-Mart was arranged for him in the Czech Republic hefore his entry to the United States. He was promised compensation of approximately $1,500 per month and was obligated to work seven days a week. Sometimes he did not receive any pay at all for as much as one month's work. He worked approximately 70 hours per week but did not receive overtime pay. One of Kunc's co-workers, also undocumented, specifically advised the Wal-Mart store manager that the cleaners, including Kunc, did not have work authorization. Despite this knowledge, the Wal-Mart store manager continued using Kunc and the others to clean the Wal-Mart store. Kune did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
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Defendant 28. Wal-Mart is a corporation formed under the laws of the State of Delaware
with principal corporate offices in Bentonville, Arkansas. Wal-Mart has aggressivcly followed a low-cost, labor-hostile, high-volume sales strategy that has led it to heeome the largest employer in the United States and the largest retailer in the world. Wal-Mart operates thousands of stores in all fifty states, including locations where Class Representatives and other members of the plaintiff cla% were employed.
CLASS ACTION ALLEGATIONS 29. Class Representatives bring this action for back pay, damages, including treble and punitive damages, injunctive, declaratory and other relief on their own behalf and on behalf of a class compri~ed of immigrant janitors who have been, are, or will be employed as janitors at Wal-Mart stores in the United States and who were denied the wages, benefits or other protections to which they are entitled by law. In addition, Victor Zavala, Eunice Gomez, Antonio Flores, Oetavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Felipe Condado, Petr Zednek and Teresa Jaros (Subclass Representatives) bring this action on behalf of a subclass comprised of all class members who were falsely imprisoned or otherwise confined by Wal-Mart and its agents' widespread practice ofloeking employees inside Wal-Mart stores while they worked. 30. 1be size of the elass makes a class action both necessary and efficient. The class consists of thousands of immigrant janitors employed at Wal-Mart stores throughout the United States and an indefinite number ofinll1ligrantjanitors who were employed or are to be employed in Wal-Mart stores. The size of the subclass is unknovm hut, on information and
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belief, consists of at least one hundred janitors. Members of the class and subclass are ascertainable but are so numerous as to make joinder inherently impossible.
31. This case involves common questions of law and fact affecting the rights of all class members, including: (a) the status of plaintiffs as employees ofWal-Mart; (b) whether Wal-Mart employed plaintifls or suffered or permitted plaintiffs to be employed in its retail stores; (c) whether Wal-Mart knew or should have known of the widespread violations offederal and state law suffered by janitors working in its stores; (d) the joint employer status of WaI·Mart and various contractors who acted as Wal-Mart's agents for the purpose of securing janitorial labor; (e) whether Wal-Mart and its contractors conspired in an etTort to bypass and subvert the legal protections to which plaintiffs are entitled; and (f) the relief necessary to remedy Wal-Mart's unlawful conduct as alleged in this Amended Complaint.
32. The claims of the Class Representatives are typical of the claims of the class as a wbole. Wal-Mart's illegal wage and labor practices alleged in this Amended Complaint concerning the named plaintitls are typical of the practices that Wal-Mart applies 10 class members nationwidc. The claims of the Subclass Representatives are typical of the claims of the subclass as a whole. The policy and practice oflocking these employees in at Wal-Mart Stores has had a detrimental effect on other members of the subclass nationwide.
33. The Class and Subclass Representatives can adequately and fairly represent the interests oftha class and subclass as defined above, because their individual interests are consistent with, not antagonistic to, the interests of the class and subclass.
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34. Counsel for plaintiffs possess the requisite resources and ability to prosecute this case as a class action and are experienced labor and employment attorneys who have successfully litigated other cases involving similar issues.
35. Wal-Mart and its contractors havc implemented a scheme and associated to form an enterpris~ which is generally applicable to the plaintiff class, making it appropriate to issue final injunctive relief and corresponding declaratory relief with respect to the class as a whole. Class certilication is also appropriate because the common questions of law and fact predominate over any questions affecting only individual members of the class. Further, the prosecution of separate actions against Wal-Mart by individual class members would create a risk ofinconsistent or varying adjudications which would establish incompatible standards of conduct for Wal-Mart. For all these and othcr reasons, a class action is superior to other available methods for the fair and efficient adjudication ofthc controversy set forth in this Amended Complaint.
ADDITIONAL FACTUAL BASIS FOR CLAIMS The Wal-Mart Enterprise
36. Wal-Mart and various maintenance contractors identifled in this First Amended Complaint and others presently unknown to plaintiffs have created, engaged in and profited from a nationwide criminal enterprise which exploits the plaintiffs and those similarlysituated through wide-scale violation of protective federal and state labor and employment laws. This scheme dates back at least to 1996. Plaintiffs allege, on information and belief, that at material times various contractors were acting as co-conspirators or agents ofWal-Mart to pursue the scheme through an association-in-fact enterprise comprised ofWal-Mart and its various
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maintenance contractors (the "Wal-Mart Enterprise"). The Wal-Mart Enterprise secured and maintained, by illegal means, the labor of easily-exploitable immigrant janitors for the mutual profit and benefit of its constituents. The participants in the Wal-Mart Enterprise conducted its affairs by employing, harboring, and trafficking in the labor of the plaintiff immigrants, failing to pay their wages and overtime and benefits as required by federal and state law, and concealing their profits and practices from detection. All of the aCts ofWal-Mart and the contractors were in furtherance of this conspiracy and in so acting, each contractor and Wal-Mart wcre acting within the scope of its agency and thus with the authorization of the others.
37. As outlined below, the parties who make up the Wal-Mart Enterprise participated in its affairs through the commission of widespread and systematic violations of the FLSA and multiple criminal acts, including, but not limited to, transporting undocumented aliens, in violation of 8 U.S.C. §1324(a)(1 )(A)(ii); harboring undocumented aliens in violation of 8 U.S.C. §1324(a)(I)(A)(iii); encouraging undocumented aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1 )(A)(iv); conspiring to transport, harbor and encourage illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(I)(A)(v)(I); aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1 )(A)(v)(II); committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1 )(8)(i); engaging in a pattern and practice of hiring and employing illegal aliens in violation of8 U.S.C. §1324(a)(1)(A); involuntary servitude in violation of 18 U.S.C. §1594; and (a)(2) and money laundering (within the meaning of 18 U.S.C. §§ 1956(a)(1 )(A)(i), I 956(a)( 1)(B)(i), 1956(a)(1)(8)(ii), I 956(a)(3)(A), 1956(a)(3)(B), and
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1956(a)(3)(C)) of the proceeds oflhc aforesaid criminal acts, as well as mail and wire fraud under 18 U.S.C. §§1341 and 1343.
38. The Wal-Mart Enterprise operates in and has an effect on interstate commerce.
Exploitation of Alien Labor for Profit
39. The essential elements of the Wal-Mart Enterprise's activities are these. Wal-Mart routinely makes use of the labor of immigrants, including undocumented immigrants, to perform necessary janitorial services at its stores nationwide. Wal-Mart and the contractors target these immigrants who speak little or no English, and have little or no money or mobility to escape work at Wal-Mart. These workers come from across the globe and present a ready pool of easily exploited labor. Driven by poverty and the lack of economic opportunities at home, they enter the United States where they become part of a labor force Wal-Mart has f()stered and from which it benefits. To facilitate and shelter the illegal employment of the undocumented janitors and to protect the financial gain from its practice of underpaying all janitors, Wal-Mart and its various contractors established the Wal-Mart Enterprise.
40. The Wal-Mart Enterprise is an ongoing organi7.<ttion with a common pattern of organization that has flourished from at least 1996 through 2003, and, upon information and belief, the present. Indeed, as outlined below, Operation Rollback on October 23,2003 was only the latest in a series of raids conducted by federal authorities which led to the attests of undocumented aliens who were cleaning Wal-Mart stores. Wal-Mart and its associated contractors continued the Wal-Mart Enterprise despite these earlier concerted law enforcement actions.
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41. As outlined below, the Wal-Mart Enterprise involves a web of contractual relationships between Wal-Mart and its maintenance contractors who do business through a welter ofshell corporations, But the operation ofthe Wal-Mart Enterprise is uniform: employmcnt of inunigrantjanitors under similar (and illegal) terms and conditions of employment to cleaning specifications determined and overseen by Wal-Mart. Immigrant Janitors are: (I) paid in cash or personal checks without appropriate withholding of payroll taxes; (2) obligated to work hours in excess of the FLSA's statutory maximum; (3) obligated to work up to seven days per week; (4) not paid for overtime work as required by law; (5) not given time ofr; and (6) not provided with workers' compensation benefits, health insurance, sick leave, meal or break time, notwithstanding state law protections, The terms of employment and amounts paid (or promised) to plaintiffs were consistent Plaintiffs worked in crews of from two to seven janitors, depending on the size of the store to be cleaned. Crew members were paid between $325 and $350 per week with crew leaders receiving slightly more, approximately $500 per week. Crew leaders typically received a single check from whieh all members of their crew were to be paid. Plaintiffil worked under these illegal circumstances described herein for all times relevant to this lawsuit. The commission of the predicate acts of racketeering alleged in this First Amended Complaint were a necessary cause of the harm suffered by plaintiffs. Systematic violation of immigration law - the hiring, harboring, trafficking or transportation of undoc.umented alien labor was the necessary means through which plaintifts were denied proper compensation, and in some cases physically beat up, unlawfully imprisoned and coerced into continuing to work at Wal-Mart. Systematic violation of immigration law was also the necessary means for participants in the enterprise to profit as they did from exploiting plaintiffs.
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Use of the mails and wire were, on infomlation and belief, essential to the operation of the scheme. Money laundering also directly harmed plaintiffs inasmuch as it shielded the enterprise from detection and thereby continued its existence. Traffickinl:. Transportinl: and Harborinli: of Undotumented Aliens
42. The Wal-Mart Enterprise has been under investigation by federal law enforcement authorities for more than five years. Upon information and belief, in 1997 and 1998 federal law enforcement authorities raided Wal-Mart stores in St. Louis, Missouri and arrested a number ofjanitors alleged to be undocumented. Those raids did not deter Wal-Mart or its contractors. Thus, as set forth in sworn statements of federal law enforcement agents in the
action known as United States v. Express Corporate Servs., Inc., et al., No.3 CV 02-982 (M.D. Pa. June 7, 2002) (the "Forfeiture Action"), federallaw enforcement agencies raided Wal-Mart
stores in multiple locations on numerous occasions throughout 2001, as follows: East Stroudsburg, Permsylvania, March 20 and October 30, 2001 ; Honesdale, Pennsylvania, March 20 and October 30, 2001; Mount Pocono, Pennsylvania, October 30, 2001; Chanlbersburg, PelUlsylvania, October 30, 2001; Ticonderoga, New York, November 1,2001; East Gate Square Drive, Cincinnati, Ohio, November 6, 2001; Fields Ertel Road, Cincinnati, Ohio, November 6, 2001; Greenville, Ohio, November 6,2001; Springfield, Ohio, November 6,2001; Desloge, Missouri, November 14, 2001; O'Fallen, Missouri, November 14, 2001; 8t. Ann, Missouri, November 14, 2001; Lee's Summit, Missouri, November 14,2001; Kansas City, Missouri, November 14,2001; Columbia, Missouri, November 14,2001. These raids led to the arrests of approximately 80 individual workers alleged to be undocumented, from the countries or
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Uzbekistan, Georgia, Armenia, Estonia, Russia, Bulgaria, Mongolia, Lithuania, Poland, and the Czech Republic.
43. On June 4, 2001, Miriam Klackova Facemyer, a maintenance contractor who provided undocumented aliens (most from the Czcch Republic, Slovakia and Poland) to work as janitors for Wal-Mart stores, plead guilty in the U.s. District Court for the Eastern District of Virginia to harboring illegal aliens and related offenses. Facemyer was sentenced to seven months' imprisonment and/or two years of supervised release, and was required to pay a $100 special assessment and a $2,000 fine. Wal·Mart's corporate spokesperson, when
questioned about the plea by The Virginia-Pilot of Norfolk, Virginia, denied any knowledge of
Wal-Mart's use ofWldocumented labor and pledged that "[i]fsomething slips though the cracks, we're going to hold these people accountable. We're not going to stand for illegal actions like that." Notwithstanding that false assurance, Wal-Mart continued its association with its maintenance contractors and continued to employ thousands of undocumented workers in its stores nationwide.
44. Members of the class who are undocumented entered the United States through a variety of means. Some contractors who supplied janitorial labor to Wal-Mart encouraged foreign nationals to enter the United States through promises of employment placed in various media outlcts. For example, plaintiffKunc was encouraged to enter the United States to work illcgally through media advertisements run in his native Czech Republic in February 2003 that promised employment in the United States for a fee of $1 ,500. When Kunc responded to the ad, a Wal-Mart contractor instructed him to fly to Washington, D.C. Upon his arrival he was met by a Wal-Mart contractor named Patrick (last name unknown) who transported Kune to
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suburban Virginia where he was lodged and put to work at Wal-Mart. Wal-Mart management knew that Kune was an alien without work authorization, yet, consistent with the aims of and tactics employed by the Enterprise, Wal-Mart continued to employ Kunc as a janitor in its stores. On information and beliel~ this contractor and many others operating in the Wal-Mart Enterprise, encouraged, assisted and facilitated the entry and tr.msport of many other undocwnented foreign
nationals to the United States and employment in Wal-Mart. This conduct which, upon
information and belief, Wal-Mart knew of: and condoned, aided an abetted amounts to multiple
instances of encouraging undocwnented aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(I)(A)(iv), a conspiracy to transport, harbor and encourage illegal aliens to reside in the United States in violation of8 U.S.C. §J324(a)(I)(A)(v)(l), aiding and abetting the
transportation, harboring and encouraging of illegal aliens to reside in the United States in violation 01'8 U.S.C. §1324(a)(t)(A)(v)(1I), and committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1 )(8). Forced Labor and False Imprisonment
45. A component of the Wal-Mart Enterprise is the use of compulsory or forced labor by legal or extra-legal coercion. Contractors used or threatened to use coercion which caused undocwnentcd plaintiffs aild other class members reasonably to believe that, given their vulnerable status, they had no alternative but to continue to work at Wal-Mart. Wal-Mart also eompeUed the labor of the janitors through its widespread and systematic practice of intentionally locking these vulnerable workers into its stores during their shifts. The Subclass Representatives and subclass members knew they were so confined to the stores by Wal-Mart.
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Such confinement was against their will and resulted in physical and emotional injury of plaintiffs and coerced plaintiffs to work for Wal-Mart whether they wanted to or nOt.
46. Wal-Mart and lIWly of its contractors at times refused to pay class members anything at all for their work. Others forced janitors to pay a "security deposit," withholding all compensation from them for weeks at a time to insure their continued work as janitors. Janitors complained to Wal-Mart store managers that they had not been paid for their services, but Wal-Mart failed or refused to act and instead tolemted and benefitted from these practices. Plaintiffs were told that they could leave their assigned cleaning crews and recover the compensation that had been withheld from them only if they found replacement janitors for WalMart.
47. Other class members were threatened with deportation or other adverse legal action. For example, one janitor complained about his crew's wages and working to Kenneth Clancy, the proprietor of Facility Solutions Incorporated, Facility Solutions Intemational and Mitchell Industries, LLC ("Clancy"). Clancy acted as agents for Wa!·Mart in the hiring of plaintiffs to clean the Wal-Mart stores in Bricktown, Old Bridge, Piscataway, Toms River and other locations in New Jersey. In response, and in front of a number of other janitors, Clancy threatened this man with arrest and deportation if he continued to complain and in so doing coerced him and the other janitors who worked with him to continue to work for Clancy and his various cleaning fInns. The same threat was made by a Czech contractor known as Michael (last name unknown) at a Wal-Mart store in Bristol, Connecticut to plaintiffs Zednek and Jaros or around October, 2002. On information and belief, many other Wal-Mart contractors used the threat of deportation to frighten undocumented janitors into acquiescence. The
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continued empl(lyment (If the janitors in the face of these threats constitutes forced or involuntary servitude prohibited by 18 U.S.C. §1594.
48. In the case of some undocumented janitors, to avoid their detection by law enforcement authorities, contractors insisted that janitors obtain false identification documents. Wal-Mart's contractor in New Jersey, Kenneth Clancy. never required any ofthe New Jersey resident plaintiffs to verifY their employment authorization. Shortly before the Operation Rollback raids in Octobcr 2003, Clancy asked plaintiff Victor Zavala to accompany him to New York City to obtain fraudulent documents. Plaintiff Zavala refused.
49. Plaintiffs Zednck and Jaros were told in late 2002 by Wal-Mart's contractor at the Alma, Michigan (and other) stores, Adam Daniel of Daniel's Cleaning Service, Inc., that they were required to purchase fraudulent Social Security numbers from him for $300 each to continue working. Zednek and Jaros refused Daniel's demand and the contractor refused to pay them tbr their work. Zednek and Jaros complained that they were not paid to a Wal-Mart manager in Alma who knew that they were undocumented. They still were not paid and their continued complaints of non-payment led Daniel to contact the local police who evicted Zednek and Jaros trom an apartment in which they lived that was rented in Danicl's name, but whose rent was paid by these plaintiffs. When Daniel finally delivered paychecks to these plaintiffs for work they had performed, the checks bounced.
50. Zednek and Jaros complained that they had not been paid for thcir work as janitors at Wal-Mart to Wal-Mart officials in Michigan, and in Georgia where they were subsequently employed to clean another Wal-Mart store. Those officials were funy informed of
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the fact that these plaintiffs were undocumented. The Wal-Mart otlicjal~ failed to help them and continued to employ them as janitors in Wal-Mart ~tores.
51. As part of their role in the Wal-Mart Enterprise, contractors with knowledge of the janitors' undocumented status, including Vincent Romano, of Roselle, Illinois, the proprietor of maintenance contractors CSSl, Inc., and DJR, Inc., transported janitors between various Wal-Mart locations where they provided maintenance services. For example, plaintiff Kunc was harbored and was transported by Wal-Mart contractors to his cleaning job in suburban Virginia. Such conduct amounts to a conspiracy to transport, harbor and encourage illegal aliens to reside in the United States in violation ofRU.S.C. §1324(a)(1)(A)(v)(I), aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of8 U.S.C. §1324(a)(I)(A)(v)(lI) and committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1 )(B). Wal-Mart's Role liS Employer
52. Wal-Mart acted as an employer or joint employer of its janitorial services personnel within the meaning ofFLSA §3(e) and 29 C.F.R. §791.2. Wal-Mart exercised meaningful control over the work performed by plaintiffs; the hiring and firing of plaintiffs; the amount paid to them as wages; their hours and working conditions; and the tasks they performed, including quality and quantity standards, speed, scheduling and sequence. Wal-Mart required plaintiffs perform work that is an integral part ofWal-Mart's business, such that all members of the class are or were dependent upon Wal-Mart as a matter of economic reality. Indeed, WalMart controlled the hours and working conditions of members of the subclass to such a degree that it locked these janitors in the stores during their work hours until their shifts were over and
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frequently longer. Wal-Mart, together with the contractors, shared the power to ~t;:t the plaintilTs' wages and detennine their working conditions and jointly reap the benefits from the underpayment of plaintiffs' wages and non-compliance with other statutory provisions governing their employment. On infonnation and belief, Wal-Mart dictates the price it will pay associated contractors for janitorial services; these prices are set below the amount Wal-Mart would expect to pay were it to employ the janitors directly and to meet al1 wage and hour, tax, workers' compensation and other employment-related costs.
53. Thus, Wal-Mart retains control over the essential elements of the employment relationship, namely the power to hire and tire, the direction of personncl in the tasks they are to perfonn, the standards ofthcir perfonnancc and the hours and terms of their work.
Wal-Mart's Retail Operations
54. Wal-Mart management personnel at the store and regional levels are and wt;:re aware that Wal-Mart stores were cleaned by immigrants including undocumented immigrants who were denied lawful compensation. Indeed, in 1997 and 1998 federal authorities raided Wal-Mart stores in St. Louis, Missouri and arrested a number of undocumented janitors. Again, in 2001 (bet(lre Operation Rollback), federal authorities conducted multiple raids on WalMart stores at 21 locations in at least four states, arresting approximately 80 janitors who were alleged to be undocumented. Additionally, Wal-Mart managers, assistant managers and even a regional vice president were specifically told that janitors lacked proper documentation to work in the United States, and had not been paid their lawful wages yet Wal-Mart continued to employ them to clean its stores. Wal-Mart was fully aware of and aided and abetted the rampant
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violation of immigration and labor laws with respect to its janitorial staff for its own financial gain.
55. Moreover, the work of the janitors is integral to Wal-Mart's retail operations and has traditionally been perfom1ed by direct employees. Maintenance is coordinated with Wal-Mart's sales operations and other necessary functions such as merchWldising and related stock operations. Wal-Mart is aware of the number of man-hours necessary to clean its facilities to its standards, the staffing levels, the hours worked by the plaintiffs on their premises and of the number ofjanitors employed at each location to do so. This knowledge comes in part from first-hand observation by on-site managers and in part based on per.square foot payroll costs of direct janitorial employees. Thesc costs are recorded and reported on a regular and periodic basis to Wal-Mart headquarters. The only cOllunodity furnished to Wal-Mart by the contractors is plaintiffs' labor. Since Wal-Mart and the contractors do not provide the plaintiff.~ with health, retirement, insurance, vacation, sick or bereavement benefits in connection with their employment, and do not withhold or remit social security taxes
to federal and state governments, nearly all of the monies paid by Wal-Mart to the contractors
goes to pay the plaintiffs, with the remainder profiting the contractors. The amounts paid to the contractors for plaintiffs' labor were so low that Wal-Mart should have known from this alone that the plaintiffs were routinely underpaid in violation of law.
56. Wal-Mart is aware or should reasonably have known of the systematic violation of immigration, wage and hour labor laws by its contractors and Wal-Mart colluded with its contractors in these violations.
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Use of Multiple Contractors As a Shield 57. From Wal-Mart's perspective, a principal benefit of the Wal-Mart
Enterprise is thc ability to disguise its role -- and legal obligations -- as an employer of its janitors through the contractors. Wal-Mart purposefully contracts for maintenance and janitorial services through ostensibly independent entities in a fraudulent effort to shield Wal-Mart from the obligation to pay the immigrant janitors speciiied wages for their work, including overtime, and benefits required by federal and state law, and rampant violations ofimmigration and other laws. The contractors themselves typically establish and ostensibly operate through multiple entities, which, as set out above and in the sworn statements of law enforcement agents filed in the F()~feilure Aelion, are in reality shell corporations and fronts. The use of such shell corporations and business fronts also acts to hide undocumented janitors and the profits of the scheme from detection. The precise stmcture, operation and identity of all of the many additional shell corporations and fronts used by the contractors in the scheme with Wal-Mart are known only by defendant and the contractors (and possibly federal law enforcement officials in connection with the ongoing grand jury proceedings) at this time, and plaintiffs' counsel was unable to obtain that information despite numerous interviews with nanled plaintiffs, members of plaintifl' class and others both in the United States and abroad. Thus, more specific information will require some discovery in this case.
58. In addition to the contractors identified above who employed the named plaintiffs, the United States, in the Forfeiture Action, identified a myriad of corporations and other entities which provided undocumented immigrant janitorial labor to Wal-Mart. These entities are: Express Corporate Services, Inc.; Cieanmax International, Inc.; Cleanmax
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International Associates, Tnc.; Cleanmax A~sociates, Inc.; IMC Assocja,e~, Inc.; IMC Maintenancc; Intensive Maintenance Associates; IMC Systems Associates, Inc.; Intensive Maintenance Care, Inc.; National Cleaning Management Inc.; National Floor Management, Inc.;American Floor Care Associates, Inc.; American Cleaning Services; Pinnacle Management, Inc.; Pinnacle Floor Cares Associates, Inc.; Pinnacle Floor Care System, Inc.; Atlas Building Services, Inc.; Precision Cleaning Inc.; Comet Floor Care Associates Inc.; Comet, Inc.; Ironman Maintenance Associates Inc.; irOIlll1an Maintenance; ironman Maintenance, Inc.; Champion Floor Care Associates Inc.; Allied Floor Carc Scrvices Inc.; World Clcan Associates Inc.; World Clean Inc.; Mercury Floor Care Associates; Mercury Floor Maintenance Inc.; Florida Floor Care, Inc.; DJR Cleaning Enterprises, Inc.; CMS of Queensbury, Inc., and DIjak Cleaning Services, Inc. A number of these corporations and entities were owned or controlled by Vincent Romano or Christopher WaIters and were operated as shells and fronts as part of the scheme. In the
Forfeiture Action, the United States alleges that WaI·Mart maintenance contractors engaged in
money laundering of the proceeds of a variety of criminal acts within the meaning of 18 U.S.C. §1956(c)(1)(A)(i), §1956 (8)(i) and §1956 (3)(A)(b); transporting undocumented aliens in violation of8 U.S.C. §1324(a)(I)(A)(ii); harboring undocumented aliens in violation of §I 324(a)(1 )(A)(iii); encouraging undocumented aliens to reside in the United States in violation of8 U.S.C. §1324(a)(1)(A)(iv); the conspiracy to transport, harbor and encourage illegal aliens to reside in the United States in violation of8 U.s.C. §1324(a)(I)(A)(v)(I); aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.s.C. §1324(a)(1)(A)(v)(II); conllllitting the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1)(B); and engaging in a pattern and practice of hiring and
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employing illegal aliens in violation of §I324(a)(1 )(A) and (a)(2). Thus, upon information and be1ie( by tbe earlier raids in 1997 and 1998, the raids in 2001 and thc detailed verified allegations of the federal government in the Forfeiture Action, Wal-Mart knew ofthc activities of the contractors yct continued to collude and associate with and use them in the Wal-Mart Enterprise in the commission of th offenses listed above.
59. On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise maintain (or maintained) books, records, ledgers, receipts, or notes relating to the purchase of' financial instruments or the transfer of funds and other papers relating to the proceeds of the unlawful employment ofthc janitors and the profit derived therefrom. On infonnation and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise used electronic equipment such as computers, facsimile or telex machines, pagers and telephone answering machines to gcnerate, record, or store information concerning their operations and associated finances. On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise attempted to legitimize their profits from the illegal scheme through money laundering activities involving banks and their attendant services, brokers, professionals such as
attorneys or accountants, and in violation of 18 U.S.C. §§1956(a)(I)(A)(i), J956(a)(l)(B)(i),
1956(a)(1 )(B)(ii), 1956(a)(3)(A), 1956(a)(3)(B), and 1956(a)(3)(C). The documents and specific information as to all of'these materials is within the exclusive possession and control of WalMart and the contractors at this time (and possibly federal Jaw enforcement officials in connection with the ongoing grand jury proceedings), and plaintiffs' counsel was unsuccessful in efforts to thesc data and documcnts despite interviews with numerous named plaintiffs and
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members of the plaintiff class both in the United States and abroad. Thus, specific allegations as to that information by plaintiffs will have to await some discovery in this case.
60. On information and belief: Wal-Mart and the contractors it associated with furthered the aims and goals of the Wal-Mart Enterprise through the routine use of the mails and means of wire communications. This conduct was in furtherance of a scheme to defraud both the janitors (through denial of lawful compensation and other mandatory employment protections) and federal and state taxing authorities who were not paid withholding and other employmentrelated taxes. On information and belief, contracts for janitorial services, movies, invoices, written and oral communications related to the provision ofjanitorial services Were routinely sent by either mail or wire transmissions in interstate commerce throughout the time the Wal-Mart Enterprise flourished. The use of the mails and wire transmissions are integral to the operation of the enterprise and the means participants in the Enterprise use to avoid detcction and safeguard the proceeds of their illegal activities. The documents and more specific information as to these mailings and wire transmissions are in the exclusive possession and control ofWal-Mart and its contractors (and possibly federal law enforcement officials in connection with the ongoing grand jury procecdings), and plaintiffs' counsel was unsuccessful in efforts to obtain these documents and data despite interviews with numerous named plaintiffs, members of the plaintiff class and others both in the United States and abroad. Thus, more specific allegations as to this information by plaintiffs will have to await some discovery in this case.
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COUNT ONE RICO
61. Plaintiffs repeat and reallege each of the allegations contained in paragraphs 1 through 60 as if fully set forth herein.
62. At all relevant times, each ofthe plaintiff.~ was a "person" within the meaning of RICO, 18 U.S.C. §§1961(3) and I964(c).
63. At all relevant times, Wal-Mart and its various contractors were "persons" within the meaning of RICO, 18 U.S.c. §§1961(3) and 1962(c).
64. At all relevant times, Wal-Mart and its contractors formed an associationin-fact for the purpose of profiting from a systematic violation of immigration and labor, wage and hour laws and other laws, referred to as the "Wal-Mart Enterprise." The Wal-Mart Enterprise was an "enterprise" within the meaning of RICO, 18 U.S.C. §1961(4).
65. At all relevant times, the Wal-Mart Enterprise was engaged in, and its activities affected, interstate and foreign commerce, within the meaning of RICO, 18 U.S.C. § 1962(c).
66. At all relevant times, each of the conspirators associated with this enterprise conducted or participated, directly or indirectly, in the conduct ofthe enterprise's affairs through a "pattern of racketeering activity" within the meaning of RICO, 18 U.S.c.
§1961(5), in violation of§1962(c).
67. Specifically, at all relevant times, Wal-Mart and its various maintenance contractors identified in this First Amended Complaint (and others presently unknov,TI to plaintiffs) engaged in "racketeering activity" within the meaning of 18 U.S.C. §1961 (I) by
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engaging or aiding and abetting in the acts set forth above, and, in particular, in paragraphs 4251,57-60. The acts set forth in these paragraphs constitute a violation of one or more of the following statutes: transporting undocumented aliens, in violation of 8 U.S.C. §1324(a)(I)(A)(ii); harboring undocumented aliens in violation of 8 U.S.c. §1324(a)(1 )(A)(iii); encouraging undocumented aliens to reside in the United States in violation 01'8 U.S.C. §1324(a)(J)(A)(iv); conspiring to transport, harbor and encourage illegal aliens to reside in the United States in violation of8 U.S.C. §1324(a)(1)(A)(v)(I); aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of8 U.S.C. §1324(a)(1)(A)(v)(II); committing the above offenses for financial gain in violation of8 U.S.C. §1324(a)(1)(8)(i); engaging in a pattern and practice of hiring and employing illegal aliens in violation of8 U.s.C. §1324(a)(1)(A); involuntary servitude in violation of 18 U.S.C. §1594; and (a)(2); money laundering (within the meaning of 18 U.S.C. §§1956(a)(i)(A)(i), 1956(a)(1)(8)(i), J956(a)(J)(8)(ii), 1956(a)(3)(A), 1956(a)(3)(8), and J956(a)(3)(C» of the proceeds of the aforesaid criminal acts, and mail and wire fraud under 18 U.S.C. §§134l and 1343. Each of the foregoing acts are "predicate" acts within the meaning of 18 U.S.C. §1961(1). The conspirators, i.e., each of the contractors identified in this First Amended Complaint (as well as others presently unknown to plaintiffs) and Wal-Mart, committed themselves, or aided and abetted in the commission of, at lcast two or more of these predicate acts of racketeering activity over the period of time the Wal-Mart Enterprise has existed.
68. The acts ofracketeering activity referred to in the previous paragraph constitute a "pattern of racketeering activity" within the meaning of18 U.S.C. §1961(5). The acts alleged wcrc related to each other by virtue of common participants, common victims (the
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plaintiff class), a common method of commission, a common purpose, and a common result of denying to the plaintiff class the protections of wage and hour and other lahor laws in order to enrich Wal-Mart at the plaintiffs' expense. The Wal-Mart Enterprise was run through this pattern of predicate acts of racketeering since at least 1996 and continuing through to the present.
69. As a result ofWal-Mart's violation of 18 U.S.C. §1962(c), plaintiffs and thosc similarly situated have sutfered damages, and Wal-Mart has profited, in an amount not yet dctermined but believed to be hundreds of millions of dollars.
70. As a result of its misconduct, Wal-Mart is liable to plaintiffs for their losses in an amount to be determined at trial.
71. Pursuant to RICO, 18 U.S.C. §1964(c), plaintiffs are entitled to recover threefold their damages plus costs and attorneys' fees from Wal-Mart.
COUNT TWO RICO CONSPIRACY 72. Plaintiffs repeat and reallege each of the allegations contained in
paragraphs 1 through 71 as if fully set forth herein. 73. At all relevant times, the plaintitls and those similarly situated were
"persons" within the meaning of RICO, 18 U.S.C. §§ 1961(3) and 1964(c). 74. At all relevant times, Wal-Mart and its contractors were each a "person"
within the meaning of RICO, 18 U.S.C. §§1961(3) and 1962(d).
75. At all relevant times, Wal-Mart and its contractors formed an association-
in-fact enterprise for the purpose of defrauding and injuring the plaintiffs and those similarly

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situated to them. This association-in-fact was an "enterprise" within the meaning of RICO, 18 U.S.c. §1961(4).
76. At all relevant times, this enterprise was engaged in, and its activities affected, interstate and foreign commerce, within the meaning ofRlCO, 18 U.S.C. §1962(c).
77 . As set forth in Count One, at all relevant times, each of the persons associated with this enterprise conducted or participated, directly or indirectly, in the conduct of the enterprise's affairs through a "pattern of racketeering activity" within the meaning of RlCO, 18 U.S.C. §1961 (5), in violation of 18 U.S.C. §1962(c).
78. At all relevant times, Wal-Mart and its contractors were each associated with the enterprise and agreed and conspired to violate 18 U.S.C. §1962(c), that is, agreed to conduct and participate, directly and indirectly, in the conduct of the affairs of the aforementioned enterprise through a pattern of racketeering activity. in violation of I g U.S.C. §1962(d). In particular, Wal-Mart and its contractors agreed to commit two or more of the acts of racketeering specified in paragraph 67.
79. The conspirators committed and caused to be committed a series of overt acts, in furtherance of the conspiracy aud to affect the objects thereof, including but not limited to, the acts set forth above and, in particular, in paragraphs 42-51, 57-60.
80. As a result of the conspirators' violations of 18 U.s.C. §1962(d), the plaintiffs and those similarly situated were damaged in an amount equal to hundreds of millions of dollars.
81. As a result ofthe conspiracy, Wal-Mart is liable to plaintiffs for their losses in an amount to be detemlined at trial.
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82. Pursuant to RICO. 18 U.S.C. §1964(e), plaintiffs are entitled to recover threefold their damages plus costs and attorneys' fees from Wal-Mart.
COUNT THREE
CONSPIRACY TO VIOLATE CIVIL RIGHTS UNDER 42 U.S.C. §1985(3)
83. Plaintiffs repeat and reallege paragraphs 1 through 82 hereof as set forth fully herein.
84. By their actions described above, defendant Wal-Mart and its contractors conspired and acted with class-based, invidiously discriminatory animus toward the plaintiffs, all recent immigrants, including undocumented persons as described above, with the purpose of hindering and preventing federal and state officials from performing their affirmative obligations to the plaintiffs, including but not limited to the obligations of these officials to insure that all employees in the United States are paid federal and applicable state statutory minimum wages and overtime, that they not be subjected to involuntary servitude, forced labor and false imprisonment, and that they enjoy minimwn benefits such as workers' compensation protection and other benefits required by law, including equal protection of the laws. Plaintiffs have been injured in their persons and property and have been deprived of rights and privileges guaranteed by the laws and Constitution of the United States. Accordingly, plaintiffs seek compensatory damages and punitive damages from Wal-Mart for its violation of the Civil Rights Act of 1871, 45 U.S.C. §1985(3).
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COUNT}'OUR
FAIR LABOR STANDARDS ACT
85. Plaintiffs repeat and reallege paragraphs 1 through 84 hereof as set forth fully herein.
86. Sections 6 and 7 ofthe FLSA, 29U.S.C. §§206 and 207, establish the right of all persons who are "suffered or permitted to work" to be paid a minimum wage for all hours worked and overtime pay at one and one-halftimes the person's regular rate for all hours worked in excess offorty hours per week. Section l6(b) of the FLSA, 29 U.S.C. §216(b), entitles such persons to recover all unpaid wages pI us interest, an equivalent amount as liquidated damages, and reasonable attorneys' fees and costs. At all times relevant to this action, Wal-Mart failed and refused to pay plaintiffs minimum wage for all hours worked and failed and refused to pay plaintiffs the overtime premiums required by the FLSA to plaintiffs' damage in amounts to be proven at trial. The Class Representatives consent to be parties to this action pursuant to 29 U.S.C. §256.
87. Wal-Mart's failure to provide required compensation for all hours worked by plaintiffs with the knowledge, consent, and expectation ofWal-Mart's supervisors and other managing agents constitutes a willful violation of the FLSA within the meaning of29U.S.C. §255(a).
88. The term "employee" is detined in the FLSA as "any individual employed by an employer." 29 U.S.C. §203(e)(I). An "employer" is defined broadly as "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. §203(d). The verb "employ" is defined expansively to mean "suffer or permit to work." 29
39

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U.S.C. §203(g). All members of the class are or were employees ofWal-Mart, for which they performed services within thesc definitions. At all material times, Wal-Mart has acted as plaintiffs' "employer" and is or was "employing" them within the meaning ofthc FLSA and under principles of common law.
89. As plaintiffs' employer, Wal-Mart is liable for the plaintiffs' back pay, liquidated damages, and other relief under the FLSA.
90. By virtue of Wal-Mart's unlawful failure and refusal to pay plaintiffs overtime wagcs and other wages and benefits to which they are entitled, plaintiffs have lost wages due to them in amounts to be proven at trial. Wal-Mart is liable to the members of the class for class members' unpaid wages, liquidated damages under FLSA §2l6(b). attorneys' fees and costs.
COUNT FIVE FALSE IMPRISONMENT
91. Plaintiffs repeat and allege paragraphs 1 through 90 hereof as if sct forth tully herein.
92. Defendant Wal-Mart intentionally engaged in a widespread and systematic practice of locking janitors in at Wal-Mart stores during their shills against their will. Subclass representatives and members were aware of their confinement by this practice and suffered severe physical and emotional harm from it. Wal-Mart thus falsely imprisoned the members of the subclass.
93. As a proximate result of said conduct, plaintiffs have suffered and continue to suffer bodily injury, extreme mental distress, humiliation and anguish, and other
40

Case 2:03-cv-05309-JAG-GDH Document 6 Filed 02/02/2004 Page 41 of 43
emotional and physical injuries, all to their damage in amounts to be proven at triaL Defendant committed the acts alleged herein maliciously, fraudulently and oppressively, with the wrongful intention of injuring plaintilTs from an improper and evil motive, amounting to malice and in conscious disregard of plaintiffs' rights. Subclass Plaintiffs thus arc entitled to recover punitive damages from Defendant in amounts to be proven at trial.
DEMAND FOR JURy TRIAL
Plaintiffs hereby request a jury trial on all issues so triable.
PRAYER FOR RELIEF
WHEREFORE, plaintiffs pray for relief in their favor: (1) Certifying this case as a class action; (2) Entering a judgment declaring the rights of the parties; (3) Entering appropriate preliminary and permanent injunctive relief
prohibiting Wal-Mart from further violations of law; (4) Awarding the plaintifTs back wages and other damages, including
compensatory, treble and punitive damages, in an amount to be determined at trial; (5) Awarding plaintiffs liquidated damages under FLSA §\6(b); (6) Awarding plaintiffs their reasonable attorneys' fees and costs; and (7) Awarding plaintifTs such further relief as the Court may deem appropriate.
41

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Case 2:03-cv-05309-JAG-GDH Document 6 Filed 02/02/2004 Page 42 of 43

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Gilberto Garcia GARCIA AND KRICKO ATTORNEYS AT LAW 68 Summit Avenue Hackensack, New Jcrsey 07601 (201) 343-1124

DcllaBahan Puja Batra BAHAN & ASSOCIATES 140 South Lake Avenue Suite 230 Pasadena, California 91101 (626)796-5100

Attorneys for Plaintiffs

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Case 2:03-cv-05309-JAG-GDH Document 6 Filed 02/02/2004 Page 43 of 43

CERTIFICATE OF SERVICE lhis is to certify that on this day of Febmary 2, 2004 true copics of the foregoing

First Amended Class Aetion Complaint were served on counsel ofreeord for defendant

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Date/Time of Request: Client Identifier: Database: Citation Text: Lines: Documents: Images:

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2004 WL 3659549 (D.N.J.) (Cite as: 2004 WL 3659549)

Page 1

For Opinion See 2007 WL 1134110, 447 F.Supp.2d 379, 393 F.Supp.2d 295
United States District Court, D. New Jersey, Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala, Filipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jiri Pfauser, Hana Pfauserova, Pavel Kunc and Martin Macak, on behalf of themselves and all others similarly situ-
ated, Plaintiffs, v.
WAL-MART STORES, INC., Defendant. Civil Action No. 03-Civ.-5309 (JAG).
February 2, 2004.
Revised First Amended Class Action Complaint and Jury Demand James L. Linsey, Thomas N. Ciantra, Cohen, Weiss and Simon LLP, 206 Claremont Avenue, Montclair, New Jersey 07042, (973) 509-0011 - and - 330 West 42nd Street, New York, New York 10036, (212) 563-4100.Gilberto Garcia, Garcia and Kricko, Attorneys at Law, 560 Sylvan Avenue, Englewood Cliffs, NJ 07632, (201) 343-1124.
FIRST AMENDED CLASS ACTION COMPLAINT AND JURY DEMAND
Plaintiffs Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala, Filipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jiri Pfauser, Hana Pfauserova. Pavel Kunc and Martin Macak, on behalf of themselves and all others similarly situated, by and through their attorneys Cohen, Weiss and Simon LLP, and Garcia and Kricko, for their First Amended Class Action Complaint state as follows:
INTRODUCTION
1. This is an action by plaintiffs on their own behalf and on behalf of all others similarly situated under the Racketeer Influenced Corrupt Organizations Act (“RICO”), 18 U.S.C. §1961, et seq., the Civil Rights Act of 1871, 42 U.S.C. §1985(3), the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §201, et seq., and common law to seek redress for damages directly caused by the exploitative criminal enterprise created by defendant Wal-Mart Stores, Inc. (“Wal-Mart”) who, acting in combination with its various janitorial contractors, systematically violated immigration and protective wage and hour laws and other laws for its own profit and benefit.
2. On October 23, 2003, United States Immigration and Customs Enforcement (“USICE”) officers raided multiple retail stores owned and operated by Wal-Mart in 21 states across the country, arresting hundreds of janitors for alleged immigration violations (hereinafter “Operation Rollback”). Those arrested were allegedly undocumented immigrants from countries including Mexico, the Czech Republic, Mongolia, Brazil, Uzbekistan, Poland, Russia, Georgia, and Lithuania. Among those arrested were the
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named plaintiffs Victor Zavala, Arturo Zavala, Eunice Gomez, Maximino Mendez, Carlos Alberto Tello, Antonio Flores, Hipolito Palacios, Octavio Denisio, Luis Gutierrez, Daniel Antonio Cruz, Pavel Kunc and Martin Macak. Wal-Mart officials reportedly acknowledged that at least 10 of the immigrants arrested during Operation Rollback in Arizona and Kentucky were employed directly by Wal-Mart. The others were employed through various maintenance contractors as part of the criminal enterprise. At the same time it arrested hundreds of janitors, federal agents raided Wal-Mart's corporate headquarters in Bentonville, Arkansas, seizing documents and materials in support of an ongoing criminal investigation by the United States Attorney for the Middle District of Pennsylvania targeting Wal-Mart. Upon information and belief, a federal grand jury has been convened in that district to consider possible criminal indictments.
3. Operation Rollback was but the latest in a series of federal and state law enforcement actions directed at Wal-Mart's systematic violation of labor and immigration laws. These raids have revealed that Wal-Mart, in association with a plethora of maintenance subcontractors, has for over five years relied on the labor of vulnerable immigrants to perform necessary cleaning services in its thousands of stores nationwide. Despite repeated law enforcement actions, Wal-Mart has continued to have undocumented immigrant janitors work well in excess of 40 hours per week in its stores without overtime pay and, in some cases, any pay at all. As outlined below, Wal-Mart was fully aware that undocumented workers were employed in its stores and continued the practice because it was profitable. Wal-Mart disguises its role as employer of undocumented workers through its association with maintenance contractors who systematically violate immigration laws by trafficking, harboring and hiring undocumented workers, who are unaware of their rights, afraid to complain and, thus, easily exploited. This action is directed at compensating plaintiffs for the harm caused to them by this criminal enterprise.
JURISDICTION AND VENUE
4. This Court's jurisdiction is based upon 28 U.S.C. §§1331 and 1337; 29 U.S.C. §216(b); 18 U.S.C. §1964(c), and applicable principles of supplemental jurisdiction under 28 U.S.C. §1367(a).
5. Venue is proper in this judicial district pursuant to 28 U.S.C. §§1391(b) and (d) and 18 U.S.C. §1965.
THE PARTIES
Plaintiffs
The Class Representatives
6. Plaintiffs Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala and Filipe Condado are residents of the State of New Jersey and are nationals of Mexico. Plaintiffs Luis Gutierrez and Daniel Antonio Cruz are residents of the State of Texas and nation-

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als of Mexico. Plaintiff Petr Zednek is a resident of the State of Alabama and is a national of the Czech Republic. Plaintiff Teresa Jaros is a resident of the State of Alabama and a Polish national. Plaintiffs Jiri Pfauser and Hana Pfauserova are residents of Florida and nationals of the Czech Republic. Plaintiff Martin Macak is a resident of Virginia and a national of Slovakia. Plaintiff Pavel Kunc is a resident of the Czech Republic and a Czech national. These plaintiffs (the “Class Representatives”) seek to represent a class consisting of thousands of undocumented and recently documented immigrants, currently, formerly, or in the future to be, employed as janitors to clean Wal-Mart stores. Each of the Class Representatives worked for Wal-Mart and one or more of its co-employer maintenance contractors. At material times, plaintiffs Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala and Filipe Condado were employed within the jurisdiction of this Court.
7. Victor Zavala is a native of Mexico and a resident of New Jersey. He was born on XX/XX/1975 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Zavala was arrested in the USICE raid on October 23, 2003 of the Wal-Mart store located in Piscataway, New Jersey and is presently released under his own recognizance. He performed cleaning services for Wal-Mart for approximately 36 months. During that time, he was paid weekly in a lump sum of approximately $500 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Zavala was not provided with workers' compensation, health insurance coverage, sick leave pay, or disability benefits and did not have payroll taxes withheld from his pay.
8. Eunice Gomez is a native of Mexico and a resident of New Jersey. She was born on XX/XX/1977 and speaks little or no English. Her immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Gomez was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under her own recognizance. Gomez performed cleaning services for Wal-Mart for 29 months. She was paid weekly in a lump sum of approximately $500 and was obligated to work seven days a week. She worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked her in the store at night, and she was not able to leave unless and until a Wal-Mart manager appeared with a key. Gomez was not provided with workers' compensation or health insurance coverage, sick leave pay, or disability benefits and did not have payroll taxes withheld from her pay.
9. Antonio Flores is a native of Mexico and a resident of the State of New Jersey. He was born on XX/XX/1978 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Flores was arrested in USICE's October 23, 2003 raid in Piscataway, New Jersey and is presently released under his own recognizance. Flores performed cleaning services for Wal-Mart for the 24 months preceding his arrest at Wal-Mart stores in New Jersey. He was paid weekly in a lump sum of approxim-
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ately $400 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. On one occasion, Flores, a diabetic, cut his hand severely while working at a Wal-Mart store, but because he was locked in, he was forced to wait until the next morning to go to a hospital. Flores did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave disability benefits and did not have payroll taxes withheld from his pay.
10. Octavio Denisio is a native of Mexico and a resident of New Jersey. He was born on XX/XX/1984 and speaks little or no English. Denisio was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge. New Jersey and is presently released under his own recognizance. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Denisio performed cleaning services for Wal-Mart during the time period relevant to this lawsuit. Denisio was paid weekly in a lump sum of approximately $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Denisio was not provided with workers' compensation or health insurance coverage, sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
11. Hipolito Palacios is a native of Mexico and a resident of New Jersey. He was born on XX/XX/1979 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Palacios was arrested in USICE's October 23. 2003 raid of the Wal-Mart store located in Piscataway, New Jersey and is presently released under his own recognizance. Palacios performed cleaning services for Wal-Mart for 42 months during the time period relevant to this lawsuit. He was paid weekly in a lump sum of approximately $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Palacios was not provided with workers' compensation or health insurance coverage, sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
12. Carlos Alberto Tello is a native of Mexico and a resident of New Jersey. He was born on XX/XX/1979 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Tello was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge. New Jersey and is presently released under his own recognizance. Tello performed cleaning services for Wal-Mart for one year prior to his arrest. He was paid weekly in a lump sum of $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Tello was not provided with workers' compensation or health insurance coverage, was not provided with sick leave
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or disability insurance coverage and did not have payroll taxes withheld from his pay.
13. Maximino Mendez is a native of Mexico and a resident of New Jersey. He was born on XX/XX/1984 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Mendez was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under his own recognizance. Mendez performed cleaning services for Wal-Mart for one year prior to his arrest. He was paid weekly in a lump sum of approximately $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Mendez did not have workers' compensation or health insurance coverage, was not provided with sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
14. Arturo Zavala is a native of Mexico and a resident of New Jersey. He was born on XX/XX/1974. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Zavala was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under his own recognizance. He performed cleaning services for Wal-Mart for two months prior to his arrest. Zavala was paid weekly in a lump sum of $350 and was obligated to work seven days a week. He worked at least 60 hours per week but did not receive overtime pay. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. Zavala did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
15. Felipe Condado is a native of Mexico and a resident of New Jersey. He was born on XX/XX/1974 and speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Condado was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Old Bridge, New Jersey and is presently released under his own recognizance. Condado performed cleaning services for Wal-Mart for six months prior to his arrest. He was paid weekly in a lump sum of $350 and was obligated to work seven days a week. Wal-Mart management locked him in the store at night, and he was not able to leave unless and until a Wal-Mart manager appeared with a key. He worked at least 60 hours per week but did not receive overtime pay. Condado did not have workers' compensation or health insurance benefits, was not entitled to receive sick disability benefits and did not have payroll taxes withheld from his pay.
16. Plaintiffs Victor Zavala, Gomez, Flores, Denisio, Palacios, Tello, Mendez, Zavala and Condado worked for Wal-Mart through a variety of firms owned or controlled by Kenneth Clancy or members of his immediate family. These entities included Facility Solutions Incorporated; Facility Solutions International, Mitchell Industries, LLC; Ruth and Sons LLC; JWM Commercial Cleaning; and RT Cleaning.

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17. Luis Gutierrez is a native of Mexico and a resident of Texas. He speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Gutierrez was arrested in USICE's October 23, 2003 raid of a Wal-Mart store in San Antonio, Texas, and is presently released under his own recognizance. He has performed cleaning services at various Wal-Mart stores in San Antonio, Round Rock, Cedar Park, Marble Falls and Kerrville. Texas beginning in November 2001 and continuing through December 2003. He was paid weekly in a lump sum of $500 and was obligated to work at least six days a week and often seven days a week. He worked at least 48 hours per week but did not receive overtime pay. Gutierrez did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
18. Daniel Antonio Cruz is a native of Mexico and a resident of Texas. He speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Cruz was arrested in USICE's October 23, 2003 raid of a Wal-Mart store in San Antonio, Texas, and is presently released under his own recognizance. He performed cleaning services at Wal-Mart stores in San Antonio beginning in May 2003 and continuing through December 11, 2003. He was paid weekly in a lump sum of $325 and was obligated to work seven days a week. He worked approximately 60 hours per week but did not receive overtime pay. Cruz was not provided with workers' compensation or health insurance coverage, sick leave pay or disability benefits and did not have payroll taxes withheld from his pay.
19. Plaintiffs Guttierez and Cruz worked for Wal-Mart through firms owned or controlled by Tom Parker. These included Alamo National Service and Alamo Cleaning Services, Inc.
20. Petr Zednek is a national of the Czech Republic and a resident of Alabama. He speaks little English. Zednek performed cleaning services at Wal-Mart stores in Bristol, Connecticut; Alma, Michigan; and Monroe, Georgia at times between September 2002 and December 2003. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. He was promised compensation of approximately $1,500 per month and was obligated to work seven days a week. He worked approximately 70 hours per week but did not receive overtime pay. In Alma, Michigan, Zednek's contractor refused to pay him in retaliation for his refusal to purchase a fraudulent social security number from the contractor. In addition, one of his paychecks (for $1,492) was returned for “insufficient funds,” and he was not paid at all for that month's work. Wal-Mart officials in Michigan and Georgia knew of this situation and of Zednek's undocumented status yet continued to use him to clean their stores. While working as a janitor at Wal-Mart, he was repeatedly abused and told that he could be deported if he complained. Except for only five days when the store at Alma, Michigan was open 24 hours per day for the holiday season, Zednek was locked in at night at all of the Wal-Mart stores where he worked, and could not leave unless and until a Wal-Mart manager appeared with a key. Zednek was not provided with workers' compensation or health insurance coverage, sick leave pay or disability benefits and did not have
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payroll taxes withheld from his pay.
21. Teresa Jaros is a Polish national and a resident of Alabama. She speaks little or no English. Her immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Jaros performed cleaning services at Wal-Mart stores in Bristol, Connecticut; Alma, Michigan; and Monroe, Georgia at times between September 2002 and December 2003. She was promised compensation of $1,500 per month and was obligated to work seven days a week. She worked approximately 70 hours per week but did not receive overtime pay. In Alma, Michigan, Jaros' contractor refused to pay her in retaliation for her refusal to purchase a fraudulent social security number from the contractor. Also, one of her paychecks (for $1,306.40) was returned for “insufficient funds,” and she was not paid at all for that month's work. Wal-Mart officials in Michigan and Georgia knew of this situation and Jaros' undocumented status yet continued to use her to clean in their stores. While working as a janitor at Wal-Mart, Jaros was repeatedly abused and told that she could be deported if she complained. Except for only five days when the Wal-Mart store at Alma, Michigan was open for 24 hours per day for the holiday season, Jaros was locked in at night at all of the Wal-Mart stores where she worked, and could not leave unless and until a Wal-Mart manager appeared with a key. Jaros did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from her pay.
22. Plaintiffs Zednek and Jaros worked for Wal-Mart through a variety of firms including: Daniel's Cleaning Service; SCSI Southern Cleaning Services Inc.; United Services Sources; Proline Management, Inc.; KK Unlimited, and Kina Cleaning.
23. Jiri Pfauser is a national of the Czech Republic and a resident of Florida. He speaks little or no English. His immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Pfauser performed cleaning services at Wal-Mart stores in Starkville, Mississippi and West Palm Beach, Florida at times between February 2001 and June 2002. He was promised compensation of $1,500 per month and was obligated to work seven days a week. He worked a minimum of 56 hours per week but did not receive overtime pay. He was required to pay a “security deposit” of $500 to ensure that he did not leave his work at Wal-Mart without permission. He was never paid this $500 nor was he paid at all for six weeks' work at Wal-Mart in May and June, 2002. Pfauser did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
24. Hana Pfauserova is a national of the Czech Republic and a resident of Florida. She speaks little or no English. Her immigration status is that of an undocumented alien who may be subject to deportation from the United States at the initiative of USICE. Pfauserova performed cleaning services at Wal-Mart stores in Starkville, Mississippi and West Palm Beach, Florida at times between February 2001 and June 2002. She was promised compensation of $1,400 per month and was obligated to work seven days a week. She worked a minimum of 56 hours per week but did not receive overtime pay. She was required to pay a “security deposit” of $500 to ensure that she did not

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leave her work at Wal-Mart without permission. She was never paid this $500 nor was she paid at all for six weeks' work at Wal-Mart in May and June, 2002. Pfauserova did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from her pay.
25. Pfauser and Pfauserova worked at Wal-Mart through an individual named Walter Budniak.
26. Martin Macak is a national of Slovakia and a resident of Virginia. He speaks little or no English. Between 1996 and October 23, 2003 he was a resident of the United States and performed cleaning services at Wal-Mart stores in Winchester, Alexandria and Sterling, Virginia. At relevant times until he was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Sterling, Virginia, Macak's status was that of an undocumented alien subject to deportation from the United States at the initiative of USICE. On October 23, 2003 he was arrested and given a notice to appear by USICE and is presently released upon his own recognizance. He was promised compensation of between $1,300 and $2,000 per month for his work at Wal-Mart and was obligated to work seven days a week. He worked approximately 56 hours per week but did not receive overtime pay. In approximately 1999, one of Macak's janitor coworkers, also from Slovakia and undocumented, was summarily fired on false charges of misconduct by Chuck Richards, the Wal-Mart store manager in Winchester, Virginia. Richards ordered Macak's co-worker to stop work immediately and permanently leave the Wal-Mart store and parking lot within 60 seconds' time. Macak did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay. Macak worked at Wal-Mart through a variety of cleaning contractors: Crystal Clear; Handy Man Cleaning Service; Floor Magi; and Bright Management.
27. Pavel Kunc is a resident and national of the Czech Republic. He speaks little or no English. Between February 2003 and October 23, 2003 he was a resident of the United States and performed cleaning services at a Wal-Mart store in Madison Heights, Virginia. At relevant times until he was arrested in USICE's October 23, 2003 raid of the Wal-Mart store in Madison Heights, Virginia, Kunc's status was that of an undocumented alien subject to deportation from the United States at the initiative of USICE. His employment at Wal-Mart was arranged for him in the Czech Republic before his entry to the United States. He was promised compensation of approximately $1,500 per month and was obligated to work seven days a week. Sometimes he did not receive any pay at all for as much as one month's work. He worked approximately 70 hours per week but did not receive overtime pay. One of Kunc's co-workers, also undocumented, specifically advised the Wal-Mart store manager that the cleaners, including Kunc, did not have work authorization. Despite this knowledge, the Wal-Mart store manager continued using Kunc and the others to clean the Wal-Mart store. Kunc did not have workers' compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have payroll taxes withheld from his pay.
Defendant

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28. Wal-Mart is a corporation formed under the laws of the State of Delaware with principal corporate offices in Bentonville, Arkansas. Wal-Mart has aggressively followed a low-cost, labor-hostile, high-volume sales strategy that has led it to become the largest employer in the United States and the largest retailer in the world. Wal-Mart operates thousands of stores in all fifty states, including locations where Class Representatives and other members of the plaintiff class were employed.
CLASS ACTION ALLEGATIONS
29. Class Representatives bring this action for back pay, damages, including treble and punitive damages, injunctive, declaratory and other relief on their own behalf and on behalf of a class comprised of immigrant janitors who have been, are, or will be employed as janitors at Wal-Mart stores in the United States and who were denied the wages, benefits or other protections to which they are entitled by law. In addition, Victor Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala, Felipe Condado, Petr Zednek and Teresa Jaros (Subclass Representatives) bring this action on behalf of a subclass comprised of all class members who were falsely imprisoned or otherwise confined by Wal-Mart and its agents' widespread practice of locking employees inside Wal-Mart stores while they worked.
30. The size of the class makes a class action both necessary and efficient, The class consists of thousands of immigrant janitors employed at Wal-Mart stores throughout the United States and an indefinite number of immigrant janitors who were employed or are to be employed in Wal-Mart stores. The size of the subclass is unknown but, on information and belief, consists of at least one hundred janitors. Members of the class and subclass are ascertainable but are so numerous as to make joinder inherently impossible.
31. This case involves common questions of law and fact affecting the rights of all class members, including: (a) the status of plaintiffs as employees of Wal-Mart; (b) whether Wal-Mart employed plaintiffs or suffered or permitted plaintiffs to be employed in its retail stores; (c) whether Wal-Mart knew or should have known of the widespread violations of federal and state law suffered by janitors working in its stores; (d) the joint employer status of Wal-Mart and various contractors who acted as Wal-Mart's agents for the purpose of securing janitorial labor; (e) whether WalMart and its contractors conspired in an effort to bypass and subvert the legal protections to which plaintiffs are entitled; and (f) the relief necessary to remedy Wal-Mart's unlawful conduct as alleged in this Amended Complaint.
32. The claims of the Class Representatives are typical of the claims of the class as a whole. Wal-Mart's illegal wage and labor practices alleged in this Amended Complaint concerning the named plaintiffs are typical of the practices that Wal-Mart applies to class members nationwide. The claims of the Subclass Representatives are typical of the claims of the subclass as a whole. The policy and practice of locking these employees in at Wal-Mart Stores has had a detrimental effect on other members of the subclass nationwide.

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33. The Class and Subclass Representatives can adequately and fairly represent the interests of the class and subclass as defined above, because their individual interests are consistent with, not antagonistic to, the interests of the class and subclass.
34. Counsel for plaintiffs possess the requisite resources and ability to prosecute this case as a class action and are experienced labor and employment attorneys who have successfully litigated other cases involving similar issues.
35. Wal-Mart and its contractors have implemented a scheme and associated to form an enterprise which is generally applicable to the plaintiff class, making it appropriate to issue final injunctive relief and corresponding declaratory relief with respect to the class as a whole. Class certification is also appropriate because the common questions of law and fact predominate over any questions affecting only individual members of the class. Further, the prosecution of separate actions against Wal-Mart by individual class members would create a risk of inconsistent or varying adjudications which would establish incompatible standards of conduct for Wal-Mart. For all these and other reasons, a class action is superior to other available methods for the fair and efficient adjudication of the controversy set forth in this Amended Complaint.
ADDITIONAL FACTUAL BASIS FOR CLAIMS
The Wal-Mart Enterprise
36. Wal-Mart and various maintenance contractors identified in this First Amended Complaint and others presently unknown to plaintiffs have created, engaged in and profited from a nationwide criminal enterprise which exploits the plaintiffs and those similarly-situated through wide-scale violation of protective federal and state labor and employment laws. This scheme dates back at least to 1996. Plaintiffs allege, on information and belief, that at material times various contractors were acting as co-conspirators or agents of Wal-Mart to pursue the scheme through an association-in-fact enterprise comprised of Wal-Mart and its various maintenance contractors (the “Wal-Mart Enterprise”). The Wal-Mart Enterprise secured and maintained, by illegal means, the labor of easily-exploitable immigrant janitors for the mutual profit and benefit of its constituents. The participants in the Wal-Mart Enterprise conducted its affairs by employing, harboring, and trafficking in the labor of the plaintiff immigrants, failing to pay their wages and overtime and benefits as required by federal and state law, and concealing their profits and practices from detection. All of the acts of Wal-Mart and the contractors were in furtherance of this conspiracy and in so acting, each contractor and Wal-Mart were acting within the scope of its agency and thus with the authorization of the others.
37. As outlined below, the parties who make up the Wal-Mart Enterprise participated in its affairs through the commission of widespread and systematic violations of the FLSA and multiple criminal acts, including, but not limited to, transporting undocumented aliens, in violation of 8 U.S.C. §1324(a)(1)(A)(ii); harboring undocumented aliens in violation of 8 U.S.C. §1324(a)(1)(A)(iii); encouraging undocumented aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(iv); conspir-
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ing to transport, harbor and encourage illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I); aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(II); committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1)(B)(i); engaging in a pattern and practice of hiring and employing illegal aliens in violation of 8 U.S.C. §1324(a)(3)(A); involuntary servitude in violation of 18 U.S.C. §1584; and money laundering (within the meaning of 18 U.S.C. §§1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), 1956(a)(3)(A). 1956(a)(3)(B), and 1956(a)(3)(C)) of the proceeds of the aforesaid criminal acts, as well as mail and wire fraud under 18 U.S.C. §§1341 and 1343.
38. The Wal-Mart Enterprise operates in and has an effect on interstate commerce.
Exploitation of Alien Labor for Profit
39. The essential elements of the Wal-Mart Enterprise's activities are these. WalMart routinely makes use of the labor of immigrants, including undocumented immigrants, to perform necessary janitorial services at its stores nationwide. Wal-Mart and the contractors target these immigrants who speak little or no English, and have little or no money or mobility to escape work at Wal-Mart. These workers come from across the globe and present a ready pool of easily exploited labor. Driven by poverty and the lack of economic opportunities at home, they enter the United States where they become part of a labor force Wal-Mart has fostered and from which it benefits. To facilitate and shelter the illegal employment of the undocumented janitors and to protect the financial gain from its practice of underpaying all janitors. Wal-Mart and its various contractors established the Wal-Mart Enterprise.
40. The Wal-Mart Enterprise is an ongoing organization with a common pattern of organization that has flourished from at least 1996 through 2003, and, upon information and belief, the present. Indeed, as outlined below, Operation Rollback on October 23, 2003 was only the latest in a series of raids conducted by federal authorities which led to the arrests of undocumented aliens who were cleaning Wal-Mart stores. Wal-Mart and its associated contractors continued the Wal-Mart Enterprise despite these earlier concerted law enforcement actions.
41. As outlined below, the Wal-Mart Enterprise involves a web of contractual relationships between Wal-Mart and its maintenance contractors who do business through a welter of shell corporations. But the operation of the Wal-Mart Enterprise is uniform: employment of immigrant janitors under similar (and illegal) terms and conditions of employment to cleaning specifications determined and overseen by Wal-Mart. Immigrant Janitors are: (1) paid in cash or personal checks without appropriate withholding of payroll taxes; (2) obligated to work hours in excess of the FLSA's statutory maximum; (3) obligated to work up to seven days per week; (4) not paid for overtime work as required by law; (5) not given time off; and (6) not provided with workers' compensation benefits, health insurance, sick leave, meal or break time, notwithstanding state law protections. The terms of employment and amounts paid (or promised) to plaintiffs were consistent. Plaintiffs worked in crews of from two to

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seven janitors, depending on the size of the store to be cleaned. Crew members were paid between $325 and $350 per week with crew leaders receiving slightly more, approximately $500 per week. Crew leaders typically received a single check from which all members of their crew were to be paid. Plaintiffs worked under these illegal circumstances described herein for all times relevant to this lawsuit. The commission of the predicate acts of racketeering alleged in this First Amended Complaint were a necessary cause of the harm suffered by plaintiffs. Systematic violation of immigration law -- the hiring, harboring, trafficking or transportation of undocumented alien labor -- was the necessary means through which plaintiffs were denied proper compensation, and in some cases physically beat up, unlawfully imprisoned and coerced into continuing to work at Wal-Mart. Systematic violation of immigration law was also the necessary means for participants in the enterprise to profit as they did from exploiting plaintiffs. Use of the mails and wire were, on information and belief, essential to the operation of the scheme. Money laundering also directly harmed plaintiffs inasmuch as it shielded the enterprise from detection and thereby continued its existence.
Trafficking, Transporting and Harboring of Undocumented Aliens
42. The Wal-Mart Enterprise has been under investigation by federal law enforcement authorities for more than five years. Upon information and belief, in 1997 and 1998 federal law enforcement authorities raided Wal-Mart stores in St. Louis, Missouri and arrested a number of janitors alleged to be undocumented. Those raids did not deter Wal-Mart or its contractors. Thus, as set forth in sworn statements of federal law enforcement agents in the action known as United States v. Express Corporate Servs., Inc., et al., No. 3 CV 02-982 (M.D. Pa. June 7, 2002) (the “Forfeiture Action”), federal law enforcement agencies raided Wal-Mart stores in multiple locations on numerous occasions throughout 2001, as follows: East Stroudsburg, Pennsylvania, March 20 and October 30, 2001; Honesdale, Pennsylvania, March 20 and October 30, 2001; Mount Pocono, Pennsylvania, October 30, 2001; Chambersburg, Pennsylvania, October 30, 2001; Ticonderoga, New York, November 1, 2001; East Gate Square Drive, Cincinnati, Ohio, November 6, 2001; Fields Ertel Road, Cincinnati, Ohio, November 6, 2001; Greenville, Ohio, November 6, 2001; Springfield, Ohio, November 6, 2001; Desloge, Missouri, November 14, 2001; O'Fallen, Missouri, November 14, 2001; St. Ann, Missouri, November 14, 2001; Lee's Summit, Missouri, November 14, 2001; Kansas City, Missouri, November 14, 2001; Columbia, Missouri, November 14, 2001. These raids led to the arrests of approximately 80 individual workers alleged to be undocumented, from the countries of Uzbekistan, Georgia, Armenia, Estonia, Russia, Bulgaria, Mongolia, Lithuania, Poland, and the Czech Republic.
43. On June 4, 2001, Miriam Klackova Facemyer, a maintenance contractor who provided undocumented aliens (most from the Czech Republic, Slovakia and Poland) to work as janitors for Wal-Mart stores, plead guilty in the U.S. District Court for the Eastern District of Virginia to harboring illegal aliens and related offenses. Facemyer was sentenced to seven months' imprisonment and/or two years of supervised release, and was required to pay a $100 special assessment and a $2,000 line. Wal-Mart's corporate spokesperson, when questioned about the plea by The Virginia-Pilot of Norfolk, Virginia, denied any knowledge of Wal-Mart's use of undocumented labor and
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pledged that “[i]f something slips though the cracks, we're going to hold these people accountable, We're not going to stand for illegal actions like that.” Notwithstanding that false assurance, Wal-Mart continued its association with its maintenance contractors and continued to employ thousands of undocumented workers in its stores nationwide.
44. Members of the class who are undocumented entered the United States through a variety of means. Some contractors who supplied janitorial labor to Wal-Mart encouraged foreign nationals to enter the United States through promises of employment placed in various media outlets. For example, plaintiff Kunc was encouraged to enter the United States to work illegally through media advertisements run in his native Czech Republic in February 2003 that promised employment in the United States for a fee of $1,500. When Kunc responded to the ad, a Wal-Mart contractor instructed him to fly to Washington, D.C. Upon his arrival he was met by a Wal-Mart contractor named Patrick (last name unknown) who transported Kunc to suburban Virginia where he was lodged and put to work at Wal-Mart. Wal-Mart management knew that Kunc was an alien without work authorization, yet, consistent with the aims of and tactics employed by the Enterprise, Wal-Mart continued to employ Kunc as a janitor in its stores. On information and belief, this contractor and many others operating in the Wal-Mart Enterprise, encouraged, assisted and facilitated the entry and transport of many other undocumented foreign nationals to the United States and employment in Wal-Mart. This conduct which, upon information and belief, Wal-Mart knew of, and condoned, aided an abetted amounts to multiple instances of encouraging undocumented aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(iv), a conspiracy to transport, harbor and encourage illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I), aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(II), and committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1)(B).
Forced Labor and False Imprisonment
45. A component of the Wal-Mart Enterprise is the use of compulsory or forced labor by legal or extra-legal coercion. Contractors used or threatened to use coercion which caused undocumented plaintiffs and other class members reasonably to believe that, given their vulnerable status, they had no alternative but to continue to work at Wal-Mart. Wal-Mart also compelled the labor of the janitors through its widespread and systematic practice of intentionally locking these vulnerable workers into its stores during their shifts. The Subclass Representatives and subclass members knew they were so confined to the stores by Wal-Mart. Such confinement was against their will and resulted in physical and emotional injury of plaintiffs and coerced plaintiffs to work for Wal-Mart whether they wanted to or not.
46. Wal-Mart and many of its contractors at times refused to pay class members anything at all for their work. Others forced janitors to pay a “security deposit.” withholding all compensation from them for weeks at a time to insure their continued work as janitors. Janitors complained to Wal-Mart store managers that they had not been paid for their services, but Wal-Mart failed or refused to act and instead tol-

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erated and benefitted from these practices. Plaintiffs were told that they could leave their assigned cleaning crews and recover the compensation that had been withheld from them only if they found replacement janitors for Wal-Mart.
47. Other class members were threatened with deportation or other adverse legal action. For example, one janitor complained about his crew's wages and working to Kenneth Clancy, the proprietor of Facility Solutions Incorporated. Facility Solutions International and Mitchell Industries, LLC (“Clancy”). Clancy acted as agents for Wal-Mart in the hiring of plaintiffs to clean the Wal-Mart stores in Bricktown, Old Bridge, Piscataway, Toms River and other locations in New Jersey. In response, and in front of a number of other janitors, Clancy threatened this man with arrest and deportation if he continued to complain and in so doing coerced him and the other janitors who worked with him to continue to work for Clancy and his various cleaning firms. The same threat was made by a Czech contractor known as Michael (last name unknown) at a Wal-Mart store in Bristol. Connecticut to plaintiffs Zednek and Jaros or around October, 2002. On information and belief, many other Wal-Mart contractors used the threat of deportation to frighten undocumented janitors into acquiescence. The continued employment of the janitors in the face of these threats constitutes forced or involuntary servitude prohibited by 18 U.S.C. §1584.
48. In the case of some undocumented janitors, to avoid their detection by law enforcement authorities, contractors insisted that janitors obtain false identification documents. Wal-Mart's contractor in New Jersey, Kenneth Clancy, never required any of the New Jersey resident plaintiffs to verify their employment authorization. Shortly before the Operation Rollback raids in October 2003, Clancy asked plaintiff Victor Zavala to accompany him to New York City to obtain fraudulent documents. Plaintiff Zavala refused.
49. Plaintiffs Zednek and Jaros were told in late 2002 by Wal-Mart's contractor at the Alma, Michigan (and other) stores. Adam Daniel of Daniel's Cleaning Service, Inc., that they were required to purchase fraudulent Social Security numbers from him for $300 each to continue working. Zednek and Jaros refused Daniel's demand and the contractor refused to pay them for their work. Zednek and Jaros complained that they were not paid to a Wal-Mart manager in Alma who knew that they were undocumented. They still were not paid and their continued complaints of non-payment led Daniel to contact the local police who evicted Zednek and Jaros from an apartment in which they lived that was rented in Daniel's name, but whose rent was paid by these plaintiffs. When Daniel finally delivered paychecks to these plaintiffs for work they had performed, the cheeks bounced.
50. Zednek and Jaros complained that they had not been paid for their work as janitors at Wal-Mart to Wal-Mart officials in Michigan, and in Georgia where they were subsequently employed to clean another Wal-Mart store. Those officials were fully informed of the fact that these plaintiffs were undocumented. The Wal-Mart officials failed to help them and continued to employ them as janitors in Wal-Mart stores.
51. As part of their role in the Wal-Mart Enterprise, contractors with knowledge of the janitors' undocumented status, including Vincent Romano. of Roselle, Illinois,

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the proprietor of maintenance contractors CSSI, Inc., and DJR, Inc., transported janitors between various Wal-Mart locations where they provided maintenance services. For example, plaintiff Kunc was harbored and was transported by Wal-Mart contractors to his cleaning job in suburban Virginia. Such conduct amounts to a conspiracy to transport, harbor and encourage illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I), aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(II) and committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1)(B).
Wal-Mart's Role as Employer
52. Wal-Mart acted as an employer or joint employer of its janitorial services personnel within the meaning of FLSA §3(d), 29 U.S.C. §203(d), and 29 C.F.R. §791.2 Wal-Mart exercised meaningful control over the work performed by plaintiffs; the hiring and firing of plaintiffs; the amount paid to them as wages; their hours and working conditions; and the tasks they performed, including quality and quantity standards, speed, scheduling and sequence. Wal-Mart required plaintiffs perform work that is an integral part of Wal-Mart's business, such that all members of the class are or were dependent upon Wal-Mart as a matter of economic reality. Indeed, WalMart controlled the hours and working conditions of members of the subclass to such a degree that it locked these janitors in the stores during their work hours until their shifts were over and frequently longer. Wal-Mart, together with the contractors, shared the power to set the plaintiffs' wages and determine their working conditions and jointly reap the benefits from the underpayment of plaintiffs' wages and non-compliance with other statutory provisions governing their employment. On information and belief, Wal-Mart dictates the price it will pay associated contractors for janitorial services; these prices are set below the amount Wal-Mart would expect to pay were it to employ the janitors directly and to meet all wage and hour, tax. workers' compensation and other employment-related costs.
53. Thus, Wal-Mart retains control over the essential clements of the employment relationship, namely the power to hire and fire, the direction of personnel in the tasks they are to perform, the standards of their performance and the hours and terms of their work.
Wal-Mart's Retail Operations
54. Wal-Mart management personnel at the store and regional levels are and were aware that Wal-Mart stores were cleaned by immigrants including undocumented immigrants who were denied lawful compensation. Indeed, in 1997 and 1998 federal authorities raided Wal-Mart stores in St. Louis, Missouri and arrested a number of undocumented janitors. Again, in 2001 (before Operation Rollback), federal authorities conducted multiple raids on Wal-Mart stores at 21 locations in at least four states, arresting approximately 80 janitors who were alleged to be undocumented. Additionally, Wal-Mart managers, assistant managers and even a regional vice president were specifically told that janitors lacked proper documentation to work in the United States, and had not been paid their lawful wages yet Wal-Mart continued to employ

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them to clean its stores. Wal-Mart was fully aware of and aided and abetted the rampant violation of immigration and labor laws with respect to its janitorial staff for its own financial gain.
55. Moreover, the work of the janitors is integral to Wal-Mart's retail operations and has traditionally been performed by direct employees. Maintenance is coordinated with Wal-Mart's sales operations and other necessary functions such as merchandising and related stock operations. Wal-Mart is aware of the number of man-hours necessary to clean its facilities to its standards, the staffing levels, the hours worked by the plaintiffs on their premises and of the number of janitors employed at each location to do so. This knowledge comes in part from first-hand observation by on-site managers and in part based on per-square foot payroll costs of direct janitorial employees. These costs are recorded and reported on a regular and periodic basis to Wal-Mart headquarters. The only commodity furnished to Wal-Mart by the contractors is plaintiffs' labor, Since Wal-Mart and the contractors do not provide the plaintiffs with health, retirement, insurance, vacation, sick or bereavement benefits in connection with their employment, and do not withhold or remit social security taxes to federal and state governments, nearly all of the monies paid by WalMart to the contractors goes to pay the plaintiffs, with the remainder profiting the contractors. The amounts paid to the contractors for plaintiffs' labor were so low that Wal-Mart should have known from this alone that the plaintiffs were routinely underpaid in violation of law.
56. Wal-Mart is aware or should reasonably have known of the systematic violation of immigration, wage and hour labor laws by its contractors and Wal-Mart colluded with its contractors in these violations.
Use of Multiple Contractors As a Shield
57. From Wal-Mart's perspective, a principal benefit of the Wal-Mart Enterprise is the ability to disguise its role -- and legal obligations -- as an employer of its janitors through the contractors. Wal-Mart purposefully contracts for maintenance and janitorial services through ostensibly independent entities in a fraudulent effort to shield Wal-Mart from the obligation to pay the immigrant janitors specified wages for their work, including overtime, and benefits required by federal and state law, and rampant violations of immigration and other laws. The contractors themselves typically establish and ostensibly operate through multiple entities, which, as set out above and in the sworn statements of law enforcement agents filed in the Forfeiture Action, are in reality shell corporations and fronts. The use of such shell corporations and business fronts also acts to hide undocumented janitors and the profits of the scheme from detection. The precise structure, operation and identity of all of the many additional shell corporations and fronts used by the contractors in the scheme with Wal-Mart are known only by defendant and the contractors (and possibly federal law enforcement officials in connection with the ongoing grand jury proceedings) at this time, and plaintiffs' counsel was unable to obtain that information despite numerous interviews with named plaintiffs, members of plaintiff class and others both in the United States and abroad. Thus, more specific information will require some discovery in this case.

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58. In addition to the contractors identified above who employed the named plaintiffs, the United States, in the Forfeiture Action, identified a myriad of corporations and other entities which provided undocumented immigrant janitorial labor to Wal-Mart Those entities are: Express Corporate Services, Inc.; Cleanmax International Associates, Inc.; Cleanmax Associates, Inc.; IMC Associates, Inc.; IMC Maintenance; Intensive Maintenance Associates; IMC Systems Associates, Inc.; Intensive Maintenance Care, Inc.; National Cleaning Management Inc.; National Floor Management, Inc.; American Floor Care Associates, Inc.; American Cleaning Services; Pinnacle Management, Inc.; Pinnacle Floor Cares Associates, Inc.; Pinnacle Floor Care System, Inc.; Atlas Building Services, Inc.; Precision Cleaning Inc.; Comet Floor Care Associates Inc.; Comet, Inc.; Ironman Maintenance Associates Inc.; Ironman Maintenance; Ironman Maintenance, Inc.; Champion Floor Care Associates Inc.; Allied Floor Care Services Inc.; World Clean Inc.; Mercury Floor Care Associates; Mercury Floor Maintenance Inc.; Florida Floor Care, Inc.; DJR Cleaning Enterprises, Inc.; CMS of Qucensbury, Inc., and Drjak Cleaning Services, Inc. A number of these corporations and entities were owned or controlled by Vincent Romano or Christopher Walters and were operated as shells and fronts as part of the scheme. In the Forfeiture Action, the United States alleges that Wal-Mart maintenance contractors engaged in money laundering of the proceeds of a variety of criminal acts within the meaning of 18 U.S.C. §§ 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), 1956(a)(3)(A), 1956(a)(3)(B), and 1956(a)(3)(C); transporting undocumented aliens in violation of 8 U.S.C. §1324(a)(1)(A)(ii); harboring undocumented aliens in violation of §1324(a)(1)(A)(iii); encouraging undocumented aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(iv); the conspiracy to transport, harbor and encourage illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I); aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(II); committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1)(B); and engaging in a pattern and practice of hiring and employing illegal aliens in violation of §1324(a)(3)(A). Thus, upon information and belief, by the earlier raids in 1997 and 1998, the raids in 2001 and the detailed verified allegations of the federal government in the Forfeiture Action, Wal-Mart knew of the activities of the contractors yet continued to collude and associate with and use them in the Wal-Mart Enterprise in the commission of th offenses listed above.
59. On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise maintain (or maintained) books, records, ledgers, receipts, or notes relating to the purchase of financial instruments or the transfer of funds and other papers relating to the proceeds of the unlawful employment of the janitors and the profit derived therefrom. On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise used electronic equipment such as computers, facsimile or telex machines, pagers and telephone answering machines to generate, record, or store information concerning their operations and associated finances, On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise attempted to legitimize their profits from the illegal scheme through money laundering activities involving banks and their attendant services, brokers, profes-

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sionals such as attorneys or accountants, and in violation of 18 U.S.C. §§1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), 1956(a)(3)(A), 1956(a)(3)(B), and 1956(a)(3)(C). The documents and specific information as to all of these materials is within the exclusive possession and control of Wal-Mart and the contractors at this time (and possibly federal law enforcement officials in connection with the ongoing grand jury proceedings), and plaintiffs' counsel was unsuccessful in efforts to these data and documents despite interviews with numerous named plaintiffs and members of the plaintiff class both in the United States and abroad. Thus, specific allegations as to that information by plaintiffs will have to await some discovery in this case.
60. On information and belief, Wal-Mart and the contractors it associated with furthered the aims and goals of the Wal-Mart Enterprise through the routine use of the mails and means of wire communications. This conduct was in furtherance of a scheme to defraud both the janitors (through denial of lawful compensation and other mandatory employment protections) and federal and state taxing authorities who were not paid withholding and other employment-related taxes. On information and belief, contracts for janitorial services, movies, invoices, written and oral communications related to the provision of janitorial services were routinely sent by either mail or wire transmissions in interstate commerce throughout the time the Wal-Mart Enterprise flourished. The use of the mails and wire transmissions are integral to the operation of the enterprise and the means participants in the Enterprise use to avoid detection and safeguard the proceeds of their illegal activities. The documents and more specific information as to these mailings and wire transmissions are in the exclusive possession and control of Wal-Mart and its contractors (and possibly federal law enforcement officials in connection with the ongoing grand jury proceedings), and plaintiffs' counsel was unsuccessful in efforts to obtain these documents and data despite interviews with numerous named plaintiffs, members of the plaintiff class and others both in the United States and abroad. Thus, more specific allegations as to this information by plaintiffs will have to await some discovery in this case.
COUNT ONE
RICO
61. Plaintiffs repeat and reallege each of the allegations contained in paragraphs 1 through 60 as if fully set forth herein.
62. At all relevant times, each of the plaintiffs was a “person” within the meaning of RICO, 18 U.S.C. §§1961(3) and 1964(c).
63. At all relevant times, Wal-Mart and its various contractors were “persons” within the meaning of RICO, 18 U.S.C. §§1961(3) and 1962(c).
64. At all relevant times, Wal-Mart and its contractors formed an associationin-fact for the purpose of profiting from a systematic violation of immigration and labor, wage and hour laws and other laws, referred to as the “Wal-Mart Enterprise.” The Wal-Mart Enterprise was an “enterprise” within the meaning of RICO, 18 U.S.C.
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§1961(4).
65. At all relevant times, the Wal-Mart Enterprise was engaged in, and its activities affected, interstate and foreign commerce, within the meaning of RICO, 18 U.S.C. §1962(c).
66. At all relevant times, each of the conspirators associated with this enterprise conducted or participated, directly or indirectly, in the conduct of the enterprise's affairs through a “pattern of racketeering activity” within the meaning of RICO, 18 U.S.C. §1961(5), in violation of §1962(c).
67. Specifically, at all relevant times, Wal-Mart and its various maintenance contractors identified in this First Amended Complaint (and others presently unknown to plaintiffs) engaged in “racketeering activity” within the meaning of 18 U.S.C. §1961(1) by engaging or aiding and abetting in the acts set forth above, and, in particular, in paragraphs 42-51, 57-60. The acts set forth in these paragraphs constitute a violation of one or more of the following statutes: transporting undocumented aliens, in violation of 8 U.S.C. §1324(a)(1)(A)(ii); harboring undocumented aliens in violation of 8 U.S.C. §1324(a)(1)(A)(iii); encouraging undocumented aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(iv); conspiring to transport, harbor and encourage illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I); aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States in violation of 8 U.S.C. §1324(a)(1)(A)(v)(II); committing the above offenses for financial gain in violation of 8 U.S.C. §1324(a)(1)(B)(i); engaging in a pattern and practice of hiring and employing illegal aliens in violation of 8 U.S.C. §1324(a)(3)(A); involuntary servitude in violation of 18 U.S.C. §1584; money laundering (within the meaning of 18 U.S.C. §§1956(a)(1)(A)(i), 1956(a)(I)(B)(i), 1956(a)(1)(B)(ii), 1956(a)(3)(A), 1956(a)(3)(B), and 1956(a)(3)(C) of the proceeds of the aforesaid criminal acts, and mail and wire fraud under 18 U.S.C. §§1341 and 1343. Each of the foregoing acts are “predicate” acts within the meaning of 18 U.S.C. §1961(1). The conspirators, i.e., each of the contractors identified in this First Amended Complaint (as well as others presently unknown to plaintiffs) and Wal-Mart, committed themselves, or aided and abetted in the commission of, at least two or more of these predicate acts of racketeering activity over the period of time the Wal-Mart Enterprise has existed.
68. The acts of racketeering activity referred to in the previous paragraph constitute a “pattern of racketeering activity” within the meaning of 18 U.S.C. §1961(5). The acts alleged were related to each other by virtue of common participants, common victims (the plaintiff class), a common method of commission, a common purpose, and a common result of denying to the plaintiff class the protections of wage and hour and other labor laws in order to enrich Wal-Mart at the plaintiffs' expense. The Wal-Mart Enterprise was run through this pattern of predicate acts of racketeering since at least 1996 and continuing through to the present.
69. As a result of Wal-Mart's violation of 18 U.S.C. §1962(c), plaintiffs and those similarly situated have suffered damages, and Wal-Mart has profited, in an amount

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not yet determined but believed to be hundreds of millions of dollars.
70. As a result of its misconduct, Wal-Mart is liable to plaintiffs for their losses in an amount to be determined at trial.
71. Pursuant to RICO, 18 U.S.C. §1964(c), plaintiffs are entitled to recover threefold their damages plus costs and attorneys' fees from Wal-Mart.
COUNT TWO
RICO CONSPIRACY
72. Plaintiffs repeat and reallege each of the allegations contained in paragraphs 1 through 71 as if fully set forth herein.
73. At all relevant times, the plaintiffs and those similarly situated were “persons” within the meaning of RICO, 18 U.S.C. §§1961(3) and 1964(c).
74. At all relevant times, Wal-Mart and its contractors were each a “person” within the meaning of RICO, 18 U.S.C. §§1961(3) and 1962(d).
75. At all relevant times, Wal-Mart and its contractors formed an associationin-fact enterprise for the purpose of defrauding and injuring the plaintiffs and those similarly situated to them. This association-in-fact was an “enterprise” within the meaning of RICO, 18 U.S.C. §1961(4).
76. At all relevant times, this enterprise was engaged in, and its activities affected, interstate and foreign commerce, within the meaning of RICO, 18 U.S.C. §1962(c).
77. As set forth in Count One, at all relevant times, each of the persons associated with this enterprise conducted or participated, directly or indirectly, in the conduct of the enterprise's affairs through a “pattern of racketeering activity” within the meaning of RICO, 18 U.S.C. §1961(5), in violation of 18 U.S.C. §1962(c).
78. At all relevant times, Wal-Mart and its contractors were each associated with the enterprise and agreed and conspired to violate 18 U.S.C. §1962(c), that is, agreed to conduct and participate, directly and indirectly, in the conduct of the affairs of the aforementioned enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. §1962(d). In particular, Wal-Mart and its contractors agreed to commit two or more of the acts of racketeering specified in paragraph 67.
79. The conspirators committed and caused to be committed a series of overt acts, in furtherance of the conspiracy and to affect the objects thereof, including but not limited to, the acts set forth above and, in particular, in paragraphs 42-51, 57-60.
80. As a result of the conspirators' violations of 18 U.S.C. §1962(d), the plaintiffs and those similarly situated were damaged in an amount equal to hundreds of millions of dollars.
81. As a result of the conspiracy, Wal-Mart is liable to plaintiffs for their losses
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in an amount to be determined at trial.
82. Pursuant to RICO. 18 U.S.C. §1964(c), plaintiffs are entitled to recover threefold their damages plus costs and attorneys' fees from Wal-Mart.
COUNT THREE
CONSPIRACY TO VIOLATE CIVIL RIGHTS UNDER 42 U.S.C. §1985(3)
83. Plaintiffs repeat and reallege paragraphs 1 through 82 hereof as set forth fully herein.
84. By their actions described above, defendant Wal-Mart and its contractors conspired and acted with class-based, invidiously discriminatory animus toward the plaintiffs, all recent immigrants, including undocumented persons as described above, with the purpose of hindering and preventing federal and state officials from performing their affirmative obligations to the plaintiffs, including but not limited to the obligations of these officials to insure that all employees in the United States are paid federal and applicable state statutory minimum wages and overtime, that they not be subjected to involuntary servitude, forced labor and false imprisonment, and that they enjoy minimum benefits such as workers' compensation protection and other benefits required by law, including equal protection of the laws. Plaintiffs have been injured in their persons and property and have been deprived of rights and privileges guaranteed by the laws and Constitution of the United States. Accordingly, plaintiffs seek compensatory damages and punitive damages from Wal-Mart for its violation of the Civil Rights Act of 1871, 42 U.S.C. §1985(3).
COUNT FOUR
FAIR LABOR STANDARDS ACT
85. Plaintiffs repeat and reallege paragraphs 1 through 84 hereof as set forth fully herein.
86. Sections 6 and 7 of the FLSA, 29 U.S.C. §§206 and 207, establish the right of all persons who are “suffered or permitted to work” to be paid a minimum wage for all hours worked and overtime pay at one and one-half times the person's regular rate for all hours worked in excess of forty hours per week. Section 16(b) of the FLSA. 29 U.S.C. §216(b), entitles such persons to recover all unpaid wages plus interest, an equivalent amount as liquidated damages, and reasonable attorneys' fees and costs. At all times relevant to this action, Wal-Mart failed and refused to pay plaintiffs minimum wage for all hours worked and failed and refused to pay plaintiffs the overtime premiums required by the FLSA to plaintiffs' damage in amounts to be proven at trial. The Class Representatives consent to be parties to this action pursuant to 29 U.S.C. §256.
87. Wal-Mart's failure to provide required compensation for all hours worked by plaintiffs with the knowledge, consent, and expectation of Wal-Mart's supervisors and other managing agents constitutes a willful violation of the FLSA within the
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meaning of 29 U.S.C. §255(a).
88. The term “employee” is defined in the FLSA as “any individual employed by an employer.” 29 U.S.C. §203(e)(1). An “employer” is defined broadly as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. §203(d). The verb “employ” is defined expansively to mean “suffer or permit to work.” 29 U.S.C. §203(g). All members of the class are or were employees of Wal-Mart, for which they performed services within these definitions. At all material times, Wal-Mart has acted as plaintiffs' “employer” and is or was “employing” them within the meaning of the FLSA and under principles of common law.
89. As plaintiffs' employer, Wal-Mart is liable for the plaintiffs' back pay, liquidated damages, and other relief under the FLSA.
90. By virtue of Wal-Mart's unlawful failure and refusal to pay plaintiffs overtime wages and other wages and benefits to which they are entitled, plaintiffs have lost wages due to them in amounts to be proven at trial. Wal-Mart is liable to the members of the class for class members' unpaid wages, liquidated damages under FLSA §216(b), attorneys' fees and costs.
COUNT FIVE
FALSE IMPRISONMENT
91. Plaintiffs repeat and allege paragraphs 1 through 90 hereof as if set forth fully herein.
92. Defendant Wal-Mart intentionally engaged in a widespread and systematic practice of locking janitors in at Wal-Mart stores during their shifts against their will. Subclass representatives and members were aware of their confinement by this practice and suffered severe physical and emotional harm from it. Wal-Mart thus falsely imprisoned the members of the subclass.
93. As a proximate result of said conduct, plaintiffs have suffered and continue to suffer bodily injury, extreme mental distress, humiliation and anguish, and other emotional and physical injuries, all to their damage in amounts to be proven at trial. Defendant committed the acts alleged herein maliciously, fraudulently and oppressively, with the wrongful intention of injuring plaintiffs from an improper and evil motive, amounting to malice and in conscious disregard of plaintiffs' rights. Subclass Plaintiffs thus are entitled to recover punitive damages from Defendant in amounts to be proven at trial.
DEMAND FOR JURY TRIAL
Plaintiffs hereby request a jury trial on all issues so triable.
PRAYER FOR RELIEF
WHEREFORE, plaintiffs pray for relief in their favor: (1) Certifying this case as a class action;

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(2) Entering a judgment declaring the rights of the parties; (3) Entering appropriate preliminary and permanent injunctive relief prohibiting Wal-Mart from further violations of law; (4) Awarding the plaintiffs back wages and other damages, including compensatory, treble and punitive damages, in an amount to be determined at trial; (5) Awarding plaintiffs liquidated damages under FLSA §16(b); (6) Awarding plaintiffs their reasonable attorneys' fees and costs; and (7) Awarding plaintiffs such further relief as the Court may deem appropriate. Respectfully submitted. __________ James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 206 Claremont Avenue Montclair, NJ 07042 (973) 509-0011 -and330 West 42nd Street New York, New York 10036 (212) 563-4100 Gilberto Garcia GARCIA AND KRICKO ATTORNEYS AT LAW 68 Summit Avenue Hackensack, New Jersey 07601 (201) 343-1124 Attorneys for Plaintiffs
Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximino Mendez, Arturo Zavala, Filipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jiri Pfauser, Hana Pfauserova, Pavel Kunc and Martin Macak, on behalf of themselves and all others similarly situated, Plaintiffs, v. WAL-MART STORES, INC., Defendant. 2004 WL 3659549 (D.N.J.)
END OF DOCUMENT

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 Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2005 WL 3171688...
2005 WL 3171688 (D.N.J.) (Trial Pleading) United States District Court, D. New Jersey. Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Felipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jiri Pfauser, Hana Pfauserova, Pavel Kunc and Martin MaCak, on behalf of themselves and all others
similarly situated, Plaintiffs, v.
WAL-MART STORES, INC., Defendant. Civil Action No.: 03-5309 (JAG). October 18, 2005.
Answer of Wal-Mart Stores, Inc. to Plaintiffs’ Revised First Amended Class Action Complaint and Jury Demand
Defendant Wal-Mart Stores, Inc. (“Wal-Mart”), a Delaware corporation that maintains its corporate headquarters in Bentonville, Arkansas, by its undersigned counsel, respectfully states and prays as follows in response to the Revised First Amended Class Action Complaint and Jury Demand (“Amended Complaint”) filed by Plaintiffs on or about October 28, 2004. Wal-Mart denies all allegations set fort in the Amended Complaint that are not expressly admitted herein. The headings of the Amended Complaint require no response, but, to the extent a response is necessary, the headings are denied and are used herein only for the convenience of the Court and the parties.
INTRODUCTION 1. Paragraph 1 attempts to categorize the Amended Complaint. Wal-Mart denies these allegations and refers to the Amended Complaint for its content. To the extent Paragraph 1 alleges any facts or claims, Wal-Mart denies these allegations. 2. Paragraph 2 attempts to characterize a government investigation and law enforcement action. Wal-Mart denies these allegations and refers to the government’s public filings for their content. To the extent Paragraph 2 alleges any facts or claims, Wal-Mart denies these allegations for lack of knowledge or information sufficient to form a belief as to their truth. 3. Paragraph 3 attempts to characterize purported state and federal law enforcement actions. Wal-Mart denies these allegations for lack of knowledge or information sufficient to form a belief as to their truth. To the extent Paragraph 3 alleges any facts or claims, Wal-Mart denies these allegations.
JURISDICTION AND VENUE 4. Paragraph 4 states legal conclusions. Wal-Mart neither admits nor denies such statements. 5. Paragraph 5 states legal conclusions. Wal-Mart neither admits nor denies such statements.
THE PARTIES
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Plaintiffs
The Class Representatives
6. Wal-Mart denies the allegations in Paragraph 6 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
7. Wal-Mart denies the allegations in Paragraph 7 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
8. Wal-Mart denies the allegations in Paragraph 8 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
9. Wal-Mart denies the allegations in Paragraph 9 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
10. Wal-Mart denies the allegations in Paragraph 10 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
11. Wal-Mart denies the allegations in Paragraph 11 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
12. Wal-Mart denies the allegations in Paragraph 12 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
13. Wal-Mart denies the allegations in Paragraph 13 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
14. Wal-Mart denies the allegations in Paragraph 14 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
15. Wal-Mart denies the allegations in Paragraph 15 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
16. Wal-Mart denies the allegations in Paragraph 16 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
17. Wal-Mart denies the allegations in Paragraph 17 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
18. Wal-Mart denies the allegations in Paragraph 18 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
19. Wal-Mart denies the allegations in Paragraph 19 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
20. Wal-Mart denies the allegations in Paragraph 20 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
21. Wal-Mart denies the allegations in Paragraph 21 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
22. Wal-Mart denies the allegations in Paragraph 22 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
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23. Wal-Mart denies the allegations in Paragraph 23 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. 24. Wal-Mart denies the allegations in Paragraph 24 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. 25. Wal-Mart denies the allegations in Paragraph 25 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. 26. Wal-Mart denies the allegations in Paragraph 26 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. 27. Wal-Mart denies the allegations in Paragraph 27 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
Defendant 28. Wal-Mart admits the allegations in Paragraph 28 that it is a Delaware corporation that maintains its corporate headquarters in Bentonville, Arkansas. Wal-Mart denies all remaining allegations.
CLASS ACTION ALLEGATIONS 29. Wal-Mart denies the allegations in Paragraph 29 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. 30. Paragraph 30 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 30 alleges facts or claims, Wal-Mart denies these allegations. 31. Paragraph 31 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 31 alleges facts or claims, Wal-Mart denies these allegations. 32. Paragraph 32 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 32 alleges facts or claims, Wal-Mart denies these allegations. 33. Paragraph 33 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 33 alleges facts or claims, Wal-Mart denies these allegations. 34. Paragraph 34 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 34 alleges facts or claims, Wal-Mart denies these allegations. 35. Paragraph 35 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 35 alleges facts or claims, Wal-Mart denies these allegations.
ADDITIONAL FACTUAL BASIS FOR CLAIMS
The Wal-Mart Enterprise 36. Paragraph 36 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 36
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alleges facts or claims, Wal-Mart denies these allegations.
37. Paragraph 37 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 37 alleges facts or claims, Wal-Mart denies these allegations.
38. Paragraph 38 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 38 alleges facts or claims, Wal-Mart denies these allegations.
39. Wal-Mart denies all allegations in Paragraph 39.
40. Paragraph 40 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 40 alleges any facts or claims, Wal-Mart denies these allegations.
41. Wal-Mart denies all allegations in Paragraph 41.
42. Paragraph 42 attempts to characterize a law enforcement investigation. Wal-Mart denies the allegations in Paragraph 42 and refers to the public filings in United States v. Express Corporate Svcs., Inc., et al., No. 3 CV 02-982 (M.D. Pa.) for their content. To the extent Paragraph 42 alleges any facts or claims, Wal-Mart denies these allegations.
43. Wal-Mart denies the allegations in Sentences 1-2 and 4 of Paragraph 43 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. With regard to Sentence 3, Wal-Mart refers to the statement in the Virginia-Pilot of Norfolk for its content. Wal-Mart denies the allegations in Sentence 5.
44. Wal-Mart denies the allegations in Sentences 1-5 of Paragraph 44 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. Wal-Mart denies the allegations in Sentence 6. Sentences 7-8 state legal conclusions. Wal-Mart neither admits nor denies such statements.. To the extent these sentences allege facts or claims, Wal-Mart denies these allegations.
Forced Labor and False Imprisonment
45. Sentence 1 of Paragraph 45 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent this sentence alleges any facts or claims, Wal-Mart denies these allegations. Wal-Mart denies the allegations in Sentence 2 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. Wal-Mart denies the allegations in Sentences 3-5.
46. Wal-Mart denies all allegations in Paragraph 46.
47. Wal-Mart denies the allegations in Sentences 1-2 and 4-6 of Paragraph 47 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. Sentences 3 and 7 state legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent these sentences allege facts or claims, Wal-Mart denies these allegations.
48. Wal-Mart denies the allegations in Paragraph 48 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
49. Wal-Mart denies the allegations in Sentence 3 of Paragraph 49. Wal-Mart denies all remaining allegations for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
50. Wal-Mart denies all allegations in Paragraph 50.
51. Paragraph 51 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 51 alleges any facts or claims, Wal-Mart denies these allegations.
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Wal-Mart’s Role as Employer 52. Wal-Mart denies all allegations in Paragraph 52.
53. Paragraph 53 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 53 alleges any facts or claims, Wal-Mart denies these allegations.
Wal-Mart’s Retail Operations 54. Wal-Mart denies the allegations in Sentence 1 of Paragraph 54. Sentences 2-3 attempt to characterize purported federal law enforcement actions. To the extent these sentences allege any facts or claims, Wal-Mart denies these allegations for lack of knowledge or information sufficient to form a belief as to their truth. Wal-Mart denies the allegations in Sentences 4-5.
55. Wal-Mart denies all allegations in Paragraph 55.
56. Wal-Mart denies the allegations in Paragraph 56.
Use of Multiple Contractors As a Shield 57. Wal-Mart denies the allegations in Sentences 1-2 of Paragraph 57. Wal-Mart denies the remaining allegations for lack of knowledge or information sufficient to form a belief as to their truth. To the extent paragraph 57 alleges facts or claims against Wal-Mart, Wal-Mart denies those allegations.
58. Paragraph 58 attempts to characterize a law enforcement investigation. Wal-Mart denies the allegations in Paragraph 58 and refers to the public filings in the Forfeiture Action for their content. To the extent Paragraph 58 alleges any facts or claims, Wal-Mart denies these allegations.
59. Wal-Mart denies the allegations in Sentences 1-2 of Paragraph 59 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein. Sentence 3 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent these sentences allege any facts or claims, Wal-Mart denies these allegations. Wal-Mart denies the allegations in Sentences 4-5 for lack of knowledge or information sufficient to form a belief as to the truth of the allegations contained therein.
60. To the extent Paragraph 60 alleges facts or claims against Wal-Mart, Wal-Mart denies these allegations. Paragraph 60 also makes allegations against third parties that are not parties to this case. Such allegations do not require a response. To the extent a response to these allegations is necessary, Wal-Mart denies these allegations for lack of knowledge or information sufficient to from a belief as to their truth.
COUNT ONE
RICO 61. Wal-Mart repeats and realleges each and every admission and denial contained in Paragraphs 1-60 of this Answer as if set forth fully herein.
62. The allegations in Paragraph 62 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
63. The allegations in Paragraph 63 were dismissed by the Court’s October 11, 2005 decision. No response is required. To 5

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the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
64. The allegations in Paragraph 64 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
65. The allegations in Paragraph 65 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
66. The allegations in Paragraph 66 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
67. The allegations in Paragraph 67 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
68. The allegations in Paragraph 68 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
69. The allegations in Paragraph 69 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
70. The allegations in Paragraph 70 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
71. The allegations in Paragraph 71 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
COUNT TWO
RICO CONSPIRACY 72. Wal-Mart repeats and realleges each and every admission and denial contained in Paragraphs 1-71 of this Answer as if set forth fully herein.
73. The allegations in Paragraph 73 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
74. The allegations in Paragraph 74 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
75. The allegations in Paragraph 75 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
76. The allegations in Paragraph 76 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
77. The allegations in Paragraph 77 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
78. The allegations in Paragraph 78 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
79. The allegations in Paragraph 79 were dismissed by the Court’s October 11, 2005 decision. No response is required. To
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the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph. 80. The allegations in Paragraph 80 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph. 81. The allegations in Paragraph 81 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph. 82. The allegations in Paragraph 82 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
COUNT THREE
CONSPIRACY TO VIOLATE CIVIL RIGHTS UNDER 42 U.S.C. § 1985(3) 83. Wal-Mart repeats and realleges each and every admission and denial contained in Paragraphs 1-82 of this Answer as if set forth fully herein. 84. The allegations in Paragraph 84 were dismissed by the Court’s October 11, 2005 decision. No response is required. To the extent a response is necessary, Wal-Mart denies all allegations in this Paragraph.
COUNT FOUR
FAIR LABOR STANDARDS ACT 85. Wal-Mart repeats and realleges each and every admission and denial contained in Paragraphs 1-84 of this Answer as if set forth fully herein. 86. Paragraph 86 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 86 alleges any facts or claims, Wal-Mart denies these allegations. 87. Paragraph 87 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 87 alleges any facts or claims, Wal-Mart denies these allegations. 88. Paragraph 88 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 88 alleges any facts or claims, Wal-Mart denies these allegations. 89. Paragraph 89 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 89 alleges any facts or claims, Wal-Mart denies these allegations. 90. Paragraph 90 states legal conclusions. Wal-Mart neither admits nor denies such statements. To the extent Paragraph 90 alleges any facts or claims, Wal-Mart denies these allegations.
COUNT FIVE
FALSE IMPRISONMENT
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91. Wal-Mart repeats and realleges each and every admission and denial contained in Paragraphs 1-90 of this Answer as if set forth fully herein. 92. Wal-Mart denies the allegations in Paragraph 92. 93. Wal-Mart denies the allegations in Paragraph 93.
DEMAND FOR JURY TRIAL Plaintiffs’ demand for a jury trial does not require a response.
PRAYER FOR RELIEF Plaintiffs’ prayer for relief does not require a response. To the extent a response is necessary, Wal-Mart denies that any relief is warranted.
GENERAL DENIAL Wal-Mart denies each and every allegation of the Complaint that has not been admitted or denied for lack of sufficient knowledge or information.
AFFIRMATIVE DEFENSES Wal-Mart sets forth the following affirmative defenses. By asserting these defenses, Wal-Mart does not assume the burden of establishing or refuting any fact, element, or proposition as to which Plaintiffs bear the burden or proof. Wal-Mart reserves the right to raise additional Affirmative Defenses (1) as the facts and discovery in this case warrant; (2) in response to any new or amended claims or allegations asserted by Plaintiffs; and (3) upon a determination of which state’s law, or states’ laws, apply to Plaintiffs’ claims.
FIRST AFFIRMATIVE DEFENSE The Amended Complaint fails to state claims upon which relief can be granted.
SECOND AFFIRMATIVE DEFENSE Plaintiffs have failed to join indispensable parties under Fed. R. Civ. P. 19.
THIRD AFFIRMATIVE DEFENSE Plaintiffs’ claims are barred, in whole or in part, by applicable statutes of limitation.
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FOURTH AFFIRMATIVE DEFENSE Plaintiffs lack standing to pursue their claims.

FIFTH AFFIRMATIVE DEFENSE Plaintiffs have not suffered injuries to their persons, business, or property caused by any action or omission of Wal-Mart.

SIXTH AFFIRMATIVE DEFENSE Plaintiffs have not suffered damages caused, in whole or in part, by any action or omission of Wal-Mart.

SEVENTH AFFIRMATIVE DEFENSE
Plaintiffs’ injuries and damages, if any, were caused, in whole or in part, by the conduct of independent floor-cleaning contractors and third parties not affiliated with Wal-Mart.

EIGHTH AFFIRMATIVE DEFENSE Plaintiffs’ injuries and damages, if any, were caused, in whole or in part, by Plaintiffs’ own conduct.

NINTH AFFIRMATIVE DEFENSE Plaintiffs’ alleged injuries and damages, if any, were not proximately caused by any action or omission of Wal-Mart.

Plaintiffs’ claims are barred by laches.

TENTH AFFIRMATIVE DEFENSE

ELEVENTH AFFIRMATIVE DEFENSE Plaintiffs’ claims are barred by the doctrine of estoppel.

TWELFTH AFFIRMATIVE DEFENSE Plaintiffs’ claims are barred by the doctrine of unclean hands.

THIRTEENTH AFFIRMATIVE DEFENSE Plaintiffs’ claims are barred because Plaintiffs are in pari delicto.
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FOURTEENTH AFFIRMATIVE DEFENSE Plaintiffs’ claims are barred by the doctrines of collateral estoppel and res judicata.
FIFTEENTH AFFIRMATIVE DEFENSE Plaintiffs’ claims are barred in part by the Court’s October 11, 2005, decision in this case, which granted in part and denied in part Wal-Mart’s Motion to Dismiss.
SIXTEENTH AFFIRMATIVE DEFENSE Plaintiffs’ claims are barred as against public policy under Hoffinan Plastic Compounds, Inc. v. N.L.R.B., 535 U.S. 137 (2002) and its progeny.
SEVENTEENTH AFFIRMATIVE DEFENSE Plaintiffs’ minimum wage and overtime claims are not appropriate collective action claims and may not be certified to proceed as a collective action pursuant to 29 U.S.C. § 216.
EIGHTEENTH AFFIRMATIVE DEFENSE Plaintiffs’ minimum wage and overtime claims are barred because, by their own admission, Plaintiffs received lawful compensation for all work allegedly performed.
NINETEENTH AFFIRMATIVE DEFENSE Plaintiffs’ minimum wage and overtime claims against Wal-Mart fail because Wal-Mart was not Plaintiffs’ employer or joint employer under the Fair Labor Standards Act.
TWENTIETH AFFIRMATIVE DEFENSE Plaintiffs cannot recover liquidated damages under the Fair Labor Standards Act because, in accordance with 29 U.S.C. § 260, Wal-Mart at all times acted in good faith and believed that its conduct was not in violation of the Fair Labor Standards Act.
TWENTY-FIRST AFFIRMATIVE DEFENSE To the extent Plaintiffs establish that Wal-Mart is liable for minimum wages or overtime under the Fair Labor Standards Act, Plaintiffs’ recovery must be limited because Wal-Mart did not act willfully.
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Plaintiffs’ false imprisonment claims are not appropriate class action claims and may not be certified to proceed as a class action pursuant to Fed. R. Civ. P. 23.
TWENTY-THIRD AFFIRMATIVE DEFENSE To the extent Wal-Mart is deemed an employer or joint employer of any Plaintiff, Plaintiffs’ false imprisonment claims and recovery are barred by applicable state workers compensation schemes.
TWENTY-FOURTH AFFIRMATIVE DEFENSE Plaintiffs cannot recover any damages for false imprisonment because Wal-Mart did not act intentionally, knowingly, willfully, recklessly, wantonly, or in bad faith.
TWENTY-FIFTH AFFIRMATIVE DEFENSE Plaintiffs’ false imprisonment claims are barred because Plaintiffs knowingly and voluntarily assumed all risks associated with their conduct.
TWENTY-SIXTH AFFIRMATIVE DEFENSE Plaintiffs’ false imprisonment claims are barred by the doctrines of contributory negligence and comparative fault. WHEREFORE, Wal-Mart respectfully requests that the Amended Complaint against Wal-Mart be dismissed with prejudice and that the Court grant such other relief that it deems just and proper.
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2004 WL 3374163 (D.N.J.) (Trial Motion, Memorandum and Affidavit) United States District Court, D. New Jersey.
Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Felipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa
Jaros, Jiri Pfauser, Hana Pfauserova, Pavel Kunc and Martin Macak, on behalf of themselves and all others similarly situated, Plaintiffs, v.
WAL-MART STORES, INC., Defendant.
Civil Action No. 03-5309 (JAG). May 14, 2004.

Memorandum of Law in Opposition to Plaintiffs’ Motion for Facilitated Notice Pursuant to 29 U.S.C. § 216(b)

TABLE OF CONTENTS

TABLE OF AUTHORITIES ..............................................................................................................................................................

ii

PRELIMINARY STATEMENT .......................................................................................................................................................

1

STATEMENT OF FACTS ..................................................................................................................................................................

2

RELEVANT LEGAL STANDARDS .............................................................................................................................................

8

ARGUMENT ...........................................................................................................................................................................................

10

I. PLAINTIFFS’ “JOINT EMPLOYER” THEORY CANNOT BE PROPERLY TRIED AS A

10

COLLECTIVE ACTION .....................................................................................................................................................................

II. PLAINTIFFS ARE NOT “SIMILARLY SITUATED” TO THE PROPOSED CLASS IN OTHER

18

MATERIAL RESPECTS .....................................................................................................................................................................

A. Plaintiffs Are Not “Similarly Situated” To Other “Janitors” ...........................................................................................

18

B. Plaintiffs Were Not “Victims” Of A Common Practice Or Policy ................................................................................

19

C. Plaintiffs’ Wage And Hour Claims Are Dissimilar .............................................................................................................

22

III. THE PROPOSED NATIONWIDE CLASS WOULD BE UNMANAGEABLE ...................................................

24

IV. THE PROPOSED COLLECTIVE ACTION WOULD NOT PROVIDE WAL-MART AN

27

ADEQUATE OPPORTUNITY TO DEFEND ITSELF ..........................................................................................................

V. PLAINTIFFS’ PROPOSED NOTICE IS UNNECESSARY AND DEFECTIVE ..................................................

29

CONCLUSION ........................................................................................................................................................................................

30

CASES

TABLE OF AUTHORITIES

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Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) .......................................... Ansoumana v. Gristede’s Operating Corp., 255 F. Supp. 2d 184 (S.D.N.Y. 2003) .................................................................................................................................................... Arch v. American Tobacco Co., 175 F.R.D. 469 (E.D. Pa. 1997) ................................ Armstrong v. Manzo, 380 U.S. 545 (1965) ........................................................................... Bayles v. American Med. Response of Colo., 950 F. Supp. 1053 (D. Colo. 1996) .................................................................................................................................................... Benlard v. Household Int’l, Inc., 231 F.Supp.2d 433 (E.D. Va. 2002) ...................... Briggs v. United States, 54 Fed. Cl. 205 (Ct. Cl. 2002) ................................................... Burrell v. Crown Cent. Petroleum, Inc., 197 F.R.D. 284 (E.D. Tex. 2000) ............. Dean v. Priceline.com, Inc., No. 00-1273, 2001 U.S. Dist. LEXIS 24982 (D. Conn. June 5, 2001) ....................................................................................................................... Donovan v. DialAmerica Mktg., 757 F.2d 1376 (3d Cir. 1985) .................................... Dweck v. Pacificorp Capital, Inc., No. 91-2095, 1998 WL 88742 (S.D.N.Y. Mar. 2, 1998) .................................................................................................................................... EEOC v. MCI Int’l, Inc., 829 F. Supp. 1438 (D.N.J. 1993) ............................................ First Bank of Marietta v. Hogge, 161 F.3d 506 (8th Cir. 1998) ................................... Freeman v. Wal-Mart Stores, Inc., 256 F. Supp. 2d 941 (W.D. Ark. 2003) ............ Harper v. Lovett’s Buffet, Inc., 185 F.R.D. 358 (M.D. Ala. 1999) .............................. Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165 (1989) ............................................ Kane v. Gage Merch. Servs., Inc., 138 F. Supp. 2d 212 (D. Mass. 2001) ................. Lockhart v. Westinghouse Credit Corp., 879 F.2d 43 (3d Cir. 1989) ......................... Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), vacated in part on other grounds, 122 F.R.D. 463 (D.N.J. 1988) ................................................................................. Lusardi v. Xerox Corp., 122 F.R.D. 463 (D.N.J. 1988) ................................................... Maldonado v. Lucca, 629 F. Supp. 483 (D.N.J. 1986) ..................................................... Marsh v. Butler County Sch. Sys., 242 F. Supp. 2d 1086 (M.D. Ala. 2003) ............ In re Masonite Cor. Hardboard Siding Prod. Liab. Litig., 170 F.R.D. 417 (E.D. La. 1997) ............................................................................................................................................ Mertz v. Treetop Enters., Inc., No. 96-1208, 1999 U.S. Dist. LEXIS 18386 (N.D. Ala. Mar. 2, 1999) ..............................................................................................................

11 17, 18
27 27, 28 passim
10, 21 21 29 16
12 4
26 4
passim passim
9, 30 14, 17
22 27
23 13 21 27
22
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Mielke v. Laidlaw Transit, Inc., No. 00-669, 2004 WL 443985 (N.D. Ill. Mar. 4, 2004) ............................................................................................................................................... Morisky v. Public Serv. Elec. & Gas Co., 111 F. Supp. 2d 493 (D.N.J. 2000) ....... Moss v. Crawford & Co., 201 F.R.D. 398 (W.D. Pa. 2000) ........................................... Pfahler v. Consultants for Architects, Inc., No. 99-6700, 2000 U.S. Dist. LEXIS 1772 (N.D. Ill. Feb. 8, 2000) ....................................................................................... Pfohl v. Farmers Ins. Group, No. 03-3080, 2004 U.S. Dist. LEXIS 6447 (C.D. Cal. Mar. 1, 2004) ........................................................................................................................... Pirrone v. North Hotel Assocs., 108 F.R.D. 78 (E.D. Pa. 1985) ................................... Ray v. Motel 6 Operating, L.P., No. 95-828, 1996 U.S. Dist. LEXIS 22565 (D. Minn. Feb. 15, 1996) ..................................................................................................................... Reap v. Continental Cas. Co., 199 F.R.D. 536 (D.N.J. 2001) ....................................... Reich v. Gateway Press, Inc., 13 F.3d 685 (3d Cir. 1994) .............................................. Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947) ............................................. Severtson v. Phillips Beverage Co., 137 F.R.D. 264 (D. Minn. 1991) ....................... Sheffield v. Orius Corp., 211 F.R.D. 411 (D. Or. 2002) .................................................. Smith v. Sovereign Bancorp, Inc., No. 03-2420, 2003 WL 22701017 (E.D. Pa. Nov. 13, 2003) .................................................................................................................................. White v. Osmose, Inc., 204 F. Supp. 2d 1309 (M.D. Ala. 2002) ................................... STATUTES 8 U.S.C. §§ 1225 et seq. ............................................................................................................... 29 U.S.C. § 203 ................................................................................................................................ 29 U.S.C. § 206 ................................................................................................................................ 29 U.S.C. § 207 ................................................................................................................................ 29 U.S.C. § 216(b) .......................................................................................................................... 29 U.S.C. § 255 ................................................................................................................................ RULES Fed. R. Civ. P. 23 ............................................................................................................................ Fed. R. Evid. 801(d)(2)(A) ..........................................................................................................

21
passim 14, 17 16, 17
passim
10 passim
19 28 13 24 21, 23, 26 9, 10, 19
9, 24
30 8 8 8
9, 26, 30 30
8 4
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Defendant Wal-Mart Stores, Inc. (“Wal-Mart”) respectfully submits this memorandum of law in opposition to Plaintiffs’ Motion for Facilitated Notice Pursuant to 29 U.S.C. § 216(b).
PRELIMINARY STATEMENT
Plaintiffs seek conditional certification of a putative nationwide class of undocumented and “recently documented” workers who were allegedly hired by “a changing web” of over 100 contractors and subcontractors to provide “janitorial” services at over 3,500 Wal-Mart and SAM’s CLUB stores around the country. Plaintiffs’ vaguely defined class does not satisfy the statutory prerequisites for collective action treatment under the Fair Labor Standards Act (“FLSA”). Nor could such an action, which would be unprecedented in its scope, size, and complexity, be properly managed by a single federal district court.
• First, Plaintiffs were not Wal-Mart employees and have admitted in prior pleadings that they were recruited, hired, supervised, and paid by independent contractors. Indeed, some of the Plaintiffs were themselves subcontractors who employed putative class members. These admissions refute any notion that Wal-Mart was their “joint employer.” Plaintiffs thus lack standing and cannot assert any FLSA claims against Wal-Mart.
• Second, even if these prior admissions did not foreclose Plaintiffs’ “joint employer” theory, this threshold standing question involves individualized questions of law and fact that would have to be decided on a worker-by-worker, store-by-store basis. As a consequence, Plaintiffs cannot make the congressionally-mandated preliminary showing that they are “similarly situated” to other Wal-Mart employees.
• Third, although the First Amended Complaint alleges a minimum wage violation, Plaintiffs now contend that they were denied unspecified amounts of overtime at different pay levels for varying hours of work at different stores in different geographic regions over widely divergent time periods. Such claims, on their face, do not arise from a central or common plan, but rather would result from decisions by hundreds of different contractors and supervisors on a store-by-store basis. And at trial, each Plaintiff would have to prove the amount of overtime work performed at each store. Such diverse wage claims are inappropriate for collective treatment and would further mire the Court in thousands of sub-trials.
• Fourth, Plaintiffs’ ill-defined class would involve thousands of workers from around the country. Even if a small percentage of this putative class “opted-in” to the proposed action, the number of claims, potential witnesses, and different languages involved would be overwhelming and unmanageable.
• Finally, Plaintiffs’ proposed collective action could not be conducted by a single court and jury consistent with due process. The individualized factual and legal issues presented both by Plaintiffs’ “joint employer” theory and their disparate hour and wage allegations significantly limit -- if not eliminate -- the potential use of representative testimony and proof. And there are over 100 independent contractors and subcontractors who are implicated by Plaintiffs’ “joint employer” theory. Yet none are named as a defendant and most are outside of this Court’s jurisdiction. Wal-Mart would not have an adequate opportunity to defend itself under such circumstances.
In seeking conditional notice, it is incumbent upon Plaintiffs to propose a class that comports with the statutory prerequisites for collective treatment and that is sufficiently defined and manageable. Plaintiffs’ Notice Motion does not satisfy these requirements and would unduly delay and complicate this litigation. The Notice Motion should be denied.
STATEMENT OF FACTS
Wal-Mart is the largest retailer and one of the largest private employers in the world. AC ¶ 28. In the United States, WalMart employs approximately 1.2 million employees, who are referred to as “Wal-Mart Associates.”1 Ex. A ¶ 2. Wal-Mart’s operations in the United States are comprised of two business segments: Wal-Mart Stores and SAM’s CLUBs. Id. ¶ 3. There are Wal-Mart retail and warehouse facilities in all fifty states. Id. ¶ 2. Plaintiffs’ proposed notice would encompass “present, past and future janitors” at all of these stores and facilities.
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Wal-Mart Stores
Wal-Mart operates approximately 3,000 retail stores in the United States. Id. ¶ 4. Store operations are managed through an organizational structure of divisions, regions, districts and stores, roughly divided along geographic lines. Id. ¶ 8. There are six divisions comprised of approximately 500-600 stores each; six regions per division, each comprised of approximately 80100 stores; and 466 local districts with an average of six to seven stores per district. Id. ¶ 9-11. Each Wal-Mart store is locally managed by a Store Manager, who reports to a District Manager Id. ¶ 12. The District Manager reports to a Regional Vice President, who reports to a Divisional Vice President. Id.
The Store Manager is generally responsible for the operation, management, profitability, staffing, maintenance and physical appearance of a Wal-Mart store. Id. The Store Manager is also generally responsible for the retention of any independent contractors who provide services to the store. Id. ¶ 14. It is Wal-Mart’s policy that Store Managers comply with applicable federal, state and local laws and regulations, including wage, hour or employee benefits laws, in performing these various responsibilities. Id. ¶ 13.
Floor Cleaning Services at Wal-Mart Stores
Floor maintenance at Wal-Mart stores includes the cleaning and waxing of tile surfaces. Id. ¶ 14. Some Store Managers have used Wal-Mart Associates to perform these services, others have contracted with independent contractors to provide these services, and still others have at various times used either Wal-Mart Associates or independent contractors. Id. The decision to use Wal-Mart Associates or independent contractors for these services was generally made by the Store Manager, in some cases in consultation with a District Manager or Regional Vice President. Id. Decisions to terminate contracts with independent contractors, to switch from one independent contractor to another, or to bring floor cleaning services in-house were also traditionally made at the individual store or district level. Id. ¶ 16.
During the three year period preceding this lawsuit, over 100 independent contractors and subcontractors provided outside cleaning contract services to more than 1,000 Wal-Mart stores. Id. ¶ 17. The Store Manager was generally responsible for negotiating the amount and manner of payment for these services. Id. ¶ 15. These amounts varied by store and payments were made to the independent contractors, not to individual crew members. E.g., Ex. E ¶ 11 (Spectrum paid $2,550 per week at Madison Heights); Ex. B ¶ 8 (Facilities Solutions paid $4,000 per week at Bricktown); RB Decl. Ex. 8 (Facilities Solutions paid $3,324.80 per week at Old Bridge).
The independent contractors and, in some cases, subcontractors were responsible for hiring, training, assigning, and paying their workers. Ex. B ¶¶ 8-12; Ex. C ¶¶ 7-10; Ex. D ¶¶ 8-10; Ex. E ¶¶ 8-11. The number of outside workers who provided floor cleaning services varied by store. Ex. B ¶ 9; Ex. C ¶ 8; Ex. D ¶ 8; Ex. E ¶ 11; Ex. F ¶ 5; Ex. G ¶ 5. Their hours and compensation were also determined by the independent contractors. Ex. B ¶¶ 8, 12; Ex. C ¶¶ 7, 10; Ex. D ¶¶ 7, 10; Ex. E ¶¶ 11, 13; RB Decl. Ex. 8 ¶ 8. Wal-Mart store managers did not control which crew members were assigned to a crew, did not exercise supervisory authority over crew members, and did not have the power to hire or fire crew members. Ex. B ¶¶ 9-11; Ex. C ¶¶ 11-12;Ex. D ¶ 8;Ex. E ¶¶ 12, 13; Ex. F ¶ 6; Ex. G ¶ 8; RB Decl. Ex. 8 ¶ 4.
Plaintiffs have admitted these material facts in prior pleadings.2 For example, Plaintiffs at the Old Bridge and Piscataway, New Jersey stores alleged that Felipe Soto, an independent subcontractor:
acted as direct supervisor of the plaintiff. His responsibilities included making the payments to the plaintffs for their services, deal [sic] directly with any problems that arose with Wal-Mart supervisors, repair of machinery and all of their administrative duties relating to the servicing contracts.
RB Decl. Ex. 2 ¶ 12 (emphasis added); id. Ex. 1 ¶ 49. See also id. Ex. 2 ¶ 10 (“ultimate responsibility for payment and contracting rested with a company created by Kenneth Clancy ... [f]rom this company, all payments to the plaintiffs were made until August of 2003”).
One of the Plaintiffs, Victor Zavala, Jr., was also given the opportunity to contract his own crews of workers at the Wal-Mart stores in Bricktown and Piscataway, New Jersey. Id. Ex. 1 ¶¶ 43-44; id. Ex. 2 ¶¶ 17-18. And his wife and co-Plaintiff, Eunice
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Gomez, similarly became the “boss” of her own crew. Id. Ex. 4. As such, Mr. Zavala and Ms. Gomez were responsible for finding, hiring, supervising, and compensating their crew workers. Id. Ex. 1 ¶¶ 43-44; id. Ex. 2 ¶¶ 17-18; id. Ex. 4; id. Ex. 5. Mr. Zavala and Ms. Gomez would receive weekly lump sum payments, which they divided among themselves and their workers. Id. Ex. 4; id. Ex. 5. As Mr. Zavala explained shortly before this action was filed, he was encouraged by one contractor to create his own subcontracting company so that he could employ his friends, and each of his five-man cleaning crews were paid a weekly sum to split “as they saw fit.” Id. Ex. 5 (emphasis added). Notably, his father, Victor Zavala, Sr., reportedly stated that “[n]o one from Wal-Mart knew we were illegal.” Id. Ex. 4.3
One of the opt-in declarants also claims that he was summarily “fired” by a Wal-Mart store manager, but later admits that he returned to the floor cleaning crew at the same store and subsequently worked on outside crews for other Wal-Mart stores. Skubal Decl. ¶¶ 2, 7. This confirms that the power to hire and lire Plaintiffs rested with the independent contractors, not WalMart. RB Decl. Ex. 8 ¶ 4.4
SAM’S CLUBs
SAM’s CLUB operations are managed separately from Wal-Mart Stores. Ex. A ¶ 20. There are more than 500 SAM’s CLUB locations in the United States. Id. ¶ 19. SAM’s CLUB locations are typically warehouse-type facilities. Id. ¶ 21. Each has cement flooring that does not require waxing or buffing. Id. SAM’s CLUB locations have no need for the type of floor cleaning services allegedly provided by the Plaintiffs, and have not had contracts with independent contractors for such services. Id. No Plaintiff alleges that he or she worked at any SAM’s CLUB. Indeed, none of the pleadings even mention SAM’s CLUB.
Plaintiffs’ Disparate Wage And Hour Claims
Plaintiffs allegedly worked for thirty-three different floor cleaning contractors or subcontractors at nineteen different WalMart stores in eight states. Their wages ranged from $500 per week to $325 per week; and they allegedly worked anywhere between 48 hours to more than 70 hours per week. AC ¶¶ 7-27. Some of the Plaintiffs were subcontractors; others were “crew bosses”; and others moved from crew to crew in multiple states. Id. ¶¶ 20-21, 23-24, 41. See also E. Macak Decl. ¶¶ 2, 6; Skubal Decl. ¶¶ 2, 6.
New Jersey Plaintiffs - Nine Plaintiffs allege that they worked in four Wal-Mart stores in New Jersey. AC ¶¶ 7-15. The New Jersey Plaintiffs were employed by at least six contractors and subcontractors owned or controlled by Kenneth Clancy, including Facilities Solutions, Inc. Id. ¶ 16. As noted, at least two New Jersey Plaintiffs, Victor Zavala and Eunice Gomez, were subcontractors who recruited, hired, and paid their own crews. Zavala and Gomez earned $500 per week. Id. ¶¶ 7-8. The other New Jersey Plaintiffs claim that they earned between $400 and $350 per week. Id. ¶¶ 9-15.
San Antonio Plaintiffs - Two Plaintiffs allege that they worked in a Wal-Mart store in San Antonio, Texas. Id. ¶¶ 17-18. Luis Gutierrez, who also claims to have worked in four other Wal-Mart stores in Texas, allegedly earned a weekly wage of $500 for a 48 hour week. Daniel Antonio Cruz allegedly earned a weekly wage of $325 for a 60 hour week. Id. The San Antonio Plaintiffs allegedly worked through Alamo National Service and Alamo Cleaning Services, Inc., two contractors owned or controlled by Tom Parker. Id. ¶ 19.
Transient Plaintiffs - Plaintiffs Petr Zednik and Teresa Jaros allege that they worked in Wal-Mart stores in Bristol, Connecticut, Alma, Michigan, and Monroe, Georgia. Id. ¶¶ 20-21. They identify at least six contractors and subcontractors, and four individuals, for whom they worked. Id. ¶ 22; Zednik Decl. ¶ 6; Jaros Decl. ¶ 6. Both allege that they were paid a monthly wage of $1,500, sometimes in cash and sometimes by check, for a 70 hour work week. AC ¶ 20-21; Zednik Decl. ¶ 5; Jaros Decl. ¶ 5. They allege that, on one occasion, a paycheck bounced -- but do not identify which contractor or subcontractor was involved. Zednik Decl. ¶¶ 5-6; Jaros Decl. ¶¶ 5-6.
Plaintiffs Jiri Pfauscr and Hana Pfauserova allege that they worked in Wal-Mart stores in Starkville, Mississippi and West Palm Beach, Florida. AC ¶¶ 23-24. They identify an individual named Walter Budniak as the person who employed them, id. ¶ 25, but do not allege that Mr. Budniak was affiliated with Wal-Mart. They also allege that they were required to pay a
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security deposit of $500 “to ensure that [they] did not leave [their] work at Wal-Mart without permission,” and were never repaid the deposit, id. ¶¶ 23-24.
Plaintiff Martin Macak claims to have worked in Wal-Mart stores in Winchester, Alexandria, and Sterling, Virginia at intermittent times since 1996. M. Macak Decl. ¶ 2. He identifies no fewer than five contractors and subcontractors for whom he allegedly worked. These contractors were located in Chicago, Tennessee, Virginia, and Maryland. Id. ¶ 6. He claims to have been paid between $1,300 to $2,000 per month for 56 hour work weeks, AC ¶¶ 26, but does not specify the wages paid to him per contractor or store.
Plaintiff Pavel Kunc claims to have worked in the Wal-Mart store in Madison Heights, Virginia since February 2003. Id. ¶ 27. He allegedly came to the United States in response to media advertisements in the Czech Republic promising employment in the United States for a fee of $1,500, id. 44, but does not allege that the advertisements were placed by or on behalf of Wal-Mart. He does not identify to whom he paid the fee. Mr. Kunc claims that upon his arrival in the United States, he was met at the airport, taken to Virginia, and housed by a person only identified as Patrick, who is not identified as a WalMart Associate. Id. Mr. Kunc alleges that he was promised $1,500 per month and worked 70 hours per week. Id. ¶¶ 27, 44. He also claims to have not received any pay for as much as one month’s work. Id. ¶ 27.
RELEVANT LEGAL STANDARDS
The FLSA provides an eligible “employee” with a private right of action against an “employer” that fails to pay minimum wage or required overtime premiums. 29 U.S.C. §§ 203, 206, 207. Unlike other claims that may be brought as a class action under Fed. R. Civ. P. 23, the FLSA only authorizes an aggrieved employee to bring a “collective action” on behalf of “similarly situated” employees who affirmatively opt into the lawsuit. Id. § 216(b). Congress imposed this restriction to ensure that representative FLSA actions are limited to plaintiffs who have been similarly affected by the same policy or practice of an employer, thus permitting efficient resolution of legal and factual questions common to each plaintiff in one proceeding. Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 170-73 (1989); Morisky v. Public Serv. Elec. & Gas Co., 111 F. Supp. 2d 493, 499 (D.N.J. 2000).
Courts have discretion under Section 216(b) of the FLSA to facilitate notice to potential opt-in plaintiff. But “the power to authorize notice must be exercised with discretion and only in appropriate cases.” Harper v. Lovett’s Buffet, Inc., 185 F.R.D. 358, 361 (M.D. Ala. 1999). “Automatic preliminary class certification is at odds ... with the congressional intent behind FLSA’s opt-in requirement, which was designed to limit the potentially enormous size of FLSA representative actions.” Smith v. Sovereign Bancorp, Inc., No. 03-2420, 2003 WL 22701017, at *2 (E.D. Pa. Nov. 13, 2003). “If district courts do not take basic steps to ensure that opt-in notices are sent only to potential plaintiffs who ‘have a personal interest’ in the employer’s challenged policy, the congressionally-mandated line between representative actions under FLSA and class actions under Rule 23 will be substantially blurred.” Id. Indeed, as one court observed, “[i]t would be a waste of the Court’s and the litigants’ time and resources to notify a large and diverse class only to later determine that the matter should not proceed as a collective action because the class members are not similarly situated.” Freeman v. Wal-Mart Stores, Inc. 256 F. Supp. 2d 941, 945 (W.D. Ark. 2003). Courts must likewise be satisfied that conditionally certifying a proposed class “will partake of the economy of scale envisioned by the FLSA collective action procedure.” White v. Osmose, Inc., 204 F. Supp. 2d 1309, 1318 (M.D. Ala. 2002).
In requesting facilitated notice, therefore, a plaintiff must make a preliminary showing that the statutory prerequisites for collective action treatment are satisfied. Smith, 2003 WL 22701017, at *1; Harper, 185 F.R.D. at 361-62. Unsubstantiated assertions that these conditions are met “will not suffice; some factual evidence is necessary.” Bernard v. Household Int’l, Inc., 231 F. Supp. 2d 433, 435 (E.D. Va. 2002). See also Freeman, 256 F. Supp. 2d at 945.5 A plaintiff is also required to propose a collective action that is sufficiently defined and manageable from the outset. Id. (denying proposed notice to potentially thousands of current and former employees around country); Smith, 2003 WL 22701017, at *3 (denying proposed notice to all of an employer’s estimated 7,500 hourly employees).
ARGUMENT
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Plaintiffs cannot satisfy the prerequisites for conditional certification under Section 216(b). The huge, poorly-defined class that Plaintiffs allege would also be unmanageable on its face. Authorizing the requested notice, therefore, would be improper and a monumental waste of time and resources for the Court and the parties.
I. PLAINTIFFS’ “JOINT EMPLOYER” THEORY CANNOT BE PROPERLY TRIED AS A COLLECTIVE ACTION.
Plaintiffs’ Notice Motion improperly blurs the congressionally-mandated line between class actions under Rule 23 and collective actions under Section 216(b) of the FLSA. To maintain a collective action under the FLSA, it is not enough for Plaintiffs to allege that their claims as undocumented workers are typical of the claims of other undocumented or “recently documented” workers who might have provided “janitorial” services at a Wal-Mart store somewhere in the country. Plaintiffs instead must make a preliminary showing that (1) they were Wal-Mart employees with standing to assert FLSA claims; and (2) other “similarly situated” Wal-Mart employees were subjected to the same challenged compensation practice, raising common questions of fact and law. See, e.g., Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 682 (1946) (“similarly situated” requirement met where representative plaintiffs and other “piece work” employees at a single pottery plant were all compensated based on same working time calculation of their direct employer). These requirements cannot be met here.
Plaintiffs admit that they were not Wal-Mart employees but were hired by a “changing web” of independent contractors and subcontractors. Plaintiffs’ FLSA claims against Wal-Mart are thus premised on the theory that Wal-Mart was their “joint employer.” AC ¶¶ 52-53; Notice Motion at 18-22. Plaintiffs further contend that they are “similarly situated” to other putative class members because Wal-Mart treated them all as “non-employees.” Notice Motion at 17. Rather than supporting a Section 216(b) action, these allegations only demonstrate that Plaintiffs’ FLSA claims are inappropriate for collective treatment.
As Plaintiffs are forced to acknowledge, determining whether Wal-Mart was a “joint employer” of any particular worker depends on “multiple factors” and “objective facts.” Id. at 19-20. Indeed, Plaintiffs have already admitted facts that disprove a joint employer relationship with Wal-Mart. Their pleadings make clear that they were recruited, hired, trained, supervised, and paid by independent contractors, including some of their co-Plaintiffs. They also admit that they moved freely from one outside crew to another at different locations and stores, were responsible for providing and/or maintaining their floor cleaning equipment, and that the independent contractors -- not Wal-Mart -- had the power to terminate them. The declarations submitted by Wal-Mart fully confirm these material facts.
Taken together, the undisputed evidence refutes Plaintiffs’ bald assertion that Wal-Mart was their “joint employer.” Plaintiffs were not Wal-Mart employees and thus lack standing to assert any FLSA claims against Wal-Mart, let alone to serve as representatives of a collective action. See Pfohl v. Farmers Ins. Group, No. 03-3080, 2004 U.S. Dist. LEXIS 6447, at *11 (C.D. Cal. Mar. 1, 2004) (“Independent contractors are not covered by the FLSA; that is, there must be an employeremployee relationship for liability to accrue for alleged unpaid overtime.”).
But even if the present record were not dispositive, the question whether Wal-Mart was a “joint employer” of any Plaintiff or putative class member would have to he determined on a store-by-store, worker-by-worker basis. These individual questions would require testimony, proof, and analysis of multiple factors based on the facts and circumstances of each store.
A threshold question would be whether some of the Plaintiffs and putative class members, such as Mr. Zavala and Ms. Gomez, were themselves employers of other putative class members and responsible for their wages and hours. This analysis would turn on a variety of factors, including: (1) whether and to what extent the contractor can control the manner in which the work is performed; (2) the contractor’s opportunity for profit or loss; (3) the contractor’s investment in equipment, or his or her employment of helpers; (4) whether the work requires special skill; (5) the degree of permanence of the working relationship; and (6) whether the service is an integral part of the contractor’s alleged business. Donovan v. DialAmerica Mktg., 757 F.2d 1376, 1382 (3d Cir. 1985).
The relationship between the putative class and Wal-Mart would require separate analysis of similarly diverse factors, including: (1) the degree of control exercised over the Case 2:03-cv-05309-JAG-GDH Document 24-1 Filed 05/17/2004 Page 18 of 36 worker; (2) the power to hire and fire the worker and modify the conditions of employment; (3) whether special
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training or skill is involved; (4) whether a worker could refuse to work for the alleged employer and choose to work for others; and (5) where the employment occurred. No one factor controls and other factors may be relevant in a particular case. See Maldonado v. Lucca, 629 F. Supp. 483, 487-88 (D.N.J. 1986). See also Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947) (A court must look at “the circumstances of the whole activity” to determine whether, as a matter of economic reality, an employment relationship exists.).
These threshold standing questions would necessarily involve individualized questions of Fact and law involving particular workers and stores. For example, a San Antonio Plaintiff, Luis Gutierrez, allegedly served as a “crew leader” for Alamo National Service and Alamo Cleaning Service at five different stores in Texas, earning the crew leader’s salary of $500 per week. AC ¶¶ 17, 19, 41. As a crew leader, he may have been a subcontractor who -- like Mr. Zavala and Ms. Gomez -recruited, hired, and paid his own crew. Resolving Mr. Gutierrez’s “joint employer” claim would require testimony from store managers, assistant managers, night managers, and perhaps other Wal-Mart Associates from at least five different stores. Attempts would also have to be made to locate potential witnesses from the two independent contractors involved, although it is far from clear whether their appearance at trial could be compelled. And this would be apart from any witnesses Plaintiffs might proffer on behalf of Mr. Gutierrez.
Another Plaintiff, Martin Macak, alleges that he worked at three Virginia stores for five different independent contractors located in four different states. M. Macak Decl. ¶ 6. And opt-in declarant Teresa Szczesiak allegedly worked for nine outside firms at Wal-Mart stores in Cobleskill, Amsterdam and Rotterdam, New York. Szczesiak Decl. ¶¶ 2, 3, 7.
As just these three examples demonstrate, resolution of each Plaintiff’s and potential plaintiff’s “joint employer” claim would involve dozens of different witnesses, independent contractors, stores, and locations. However, until such individual determinations are made, it cannot be shown that a particular Plaintiff was a Wal-Mart employee at any store, let alone that he or she is “similarly situated” to other Wal-Mart employees. Plaintiffs’ case theory is thus incompatible with the congressional objectives of a Section 216(b) collective action.
Plaintiffs cite two cases in support of their argument that Wal-Mart’s alleged treatment of them as “non-employees” satisfies Section 216(b)’s “similarly situated” requirement. Notice Motion at 17 (citing Kane v. Gage Merch. Servs., Inc., 138 F. Supp. 2d 212 (D. Mass. 2001) and Moss v. Crawford & Co., 201 F.R.D. 398 (W.D. Pa. 2000)). Neither decision supports any such proposition. Both cases involved direct employees challenging a common policy of the defendants to treat the relevant employment positions as exempt under the FLSA. The threshold standing question raised by Plaintiffs’ “joint employer” theory was not presented or considered in either case.
The more relevant case is Pfohl, where the district court was presented with a similar “joint employer” theory and refused to certify a collective action on the same grounds urged by Wal-Mart. 2004 U.S. Dist. LEXIS 6447, at *7-*20. The defendant, Farmers Insurance Group (“Farmers”), had contracted with four outside personnel and adjusting companies to provide additional insurance adjusters on a full-time temporary basis. Id. at *9-*10. The plaintiff was hired by one of the outside companies, but alleged that Farmers was his “joint employer.” Id. at * 12. He further alleged that Farmers had failed to pay overtime wages in violation of the FLSA, and sought to represent all other “similarly situated” workers who had been employed as temporary full-time adjusters. Id. at *3, *10. As here, the preliminary evidence raised significant questions whether a “joint employer” relationship could be proven. Among other things, the record showed that the plaintiff had been selected and assigned by the outside contractor, had supervised other outside adjusters on his team, and that the outside contractor determined the rate and method of his compensation. Id. at *11-*20. The court also noted that the plaintiff’s proffer of evidence did not -- and could not -- establish whether the factors for “joint employment” existed in other offices or for employees of other outside contractors. For these reasons, the court held that the plaintiff had:
failed to show that Farmers together with [the outside contractor] was his joint employer, and even if Plaintiff were able to establish this, he has failed to show that he is similarly situated to other members of the proposed collective group consisting of adjusters from [the three other outside contractors] with respect to the members’ employment relationship with Farmers. On this basis alone, then, denial of certification of this action as a collective action is warranted. [Id. at *20.]
The case for denial of conditional certification is even stronger here. The undisputed facts -- including Plaintiffs’ own admissions -- refute the proposition that Wal-Mart was their “joint employer.” And even assuming arguendo that they could
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surmount this hurdle, Plaintiffs have offered no evidence that the factors for “joint employment” existed in other Wal-Mart stores involving other independent contractors and their employees. Just as in Pfohl, therefore, Plaintiffs have not shown -and cannot show -- that they are “similarly situated” to all other undocumented or “recently documented” workers who provided “janitorial” services to Wal-Mart stores. Indeed, in Pfohl, the plaintiff only proposed to represent employees of three other outside contractors. Here, Plaintiffs seek to represent employees of “a changing web” of over 100 independent contractors and subcontractors. Conditional certification of the class that Plaintiffs propose would violate Section 216(b) and offend the congressional purpose behind the “similarly situated” requirement.
Courts have similarly refused to certify conditional collective actions in analogous cases involving the administrative exemption to the FLSA. Like the “joint employer” issue, the administrative exemption depends on whether an employee’s duties satisfy various regulatory factors. As one court explained, “[t]o determine which employees are entitled to overtime compensation under the FLSA depends on an individual, fact-specific analysis of each employee’s job responsibilities under the relevant statutory exemption criteria.” Morisky, 111 F. Supp. 2d at 498. This threshold legal question -- like the “joint employer” question here -- precludes conditional certification of a large putative class. Such threshold questions make it impossible to establish, even on a preliminary basis, that a plaintiff is “similarly situated” to other putative class members.
In Morisky, for example, seven named plaintiffs and over 100 potential “opt-in” plaintiffs asserted that they were “similarly situated” to all other employees at a single power plant in New Jersey who had been treated by the defendant as “exempt” from the FLSA’s overtime requirements Id. at 497. The district court denied certification, explaining as follows:
The scope of the class is dependent upon the answer to the question that is at the heart of this case -which employees are properly classified as exempt? .... Thus, plaintiffs are seeking to have this Court certify a class based upon their own belief as to which employees do not satisfy any of the exemption criteria -- the very issue to be litigated in this action. Furthermore, the Court finds that litigating this case as a collective action would be anything but efficient. The exempt or non-exempt status of potentially hundreds of employees would need to be determined on a job-by-job, or more likely, an employee-byemployee basis .... The individual nature of the inquiry required makes collective treatment improper in this case. [Id. at 499.]
See also Dean v. Priceline.com, Inc., No. 00-1273, 2001 U.S. Dist. LEXIS 24982, at *7-*8 (D. Conn. June 5, 2001) (denying conditional certification on similar grounds); Pfahler v. Consultants for Architects, Inc., No. 99-6700, 2000 U.S. Dist. LEXIS 1772, at *4 (N.D. Ill. Feb. 8, 2000) (same).6
Collective treatment of Plaintiffs’ FLSA claims would be improper for the same reasons. At bottom, Plaintiffs are asking this Court conditionally to certify a massive, nationwide class based upon their bare assertion that Wal-Mart was a “joint employer” of each putative member. Even if Plaintiffs had not admitted facts negating that claim, the scope of the class -- and the congressionally-mandated showing that class members are “similarly situated” to one another -- would be dependent upon the answer to the threshold question whether a “joint employment” relationship could be proven on a worker-by-worker basis. Just as in Morisky, the “extremely individual and fact-intensive” nature of this inquiry would make collective treatment of the question improper. Indeed, while Morisky only involved a putative class of approximately 150 workers at a single New Jersey plant, the required analysis here would involve potentially thousands of plaintiffs at over 1,000 stores in every state of the country. The reasoning of Morisky in denying collective action treatment is thus especially applicable here, in light of the scope and breadth of Plaintiffs’ putative nationwide class.
Notably, Plaintiffs cite to a single case where allegations of “joint employment” were certified for collective treatment, Ansoumana v. Gristede’s Operating Corp., 255 F. Supp. 2d 184 (S.D.N.Y. 2003). But this decision does not help their cause. In Ansoumana, the court conditionally certified a collective action only after finding that the putative claimants were, in fact, “jointly” employed by a single employment agency and a local pharmacy chain. Id. at 193-96. It took two years of significant discovery and litigation for the court to resolve the “joint employer” question only as to this one outside agency. Here, in contrast, this Court would have to determine the same question for over 100 independent contractors and subcontractors operating in thousands of stores around the country. The Ansoumana case illustrates why litigating the kind of case Plaintiffs propose as a collective action would, as the courts in Pfohl and Morisky found, be improper and “anything but efficient.” Morisky, 111 F. Supp. 2d at 499.7
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II. PLAINTIFFS ARE NOT “SIMILARLY SITUATED” TO THE PROPOSED CLASS IN OTHER MATERIAL RESPECTS.
Even apart from the obstacles created by Plaintiffs’ “joint employer” theory, there are additional reasons why collective treatment of their FLSA claims would be improper. Their proposed class includes all past, present, and future workers who perform “janitorial” services at over 3,500 facilities nationwide. Notice Motion, Proposed Notice to Plaintiff Class ¶ 3. The only limiting criteria are that such “janitors” were undocumented or recently documented immigrants. Id. This putative class does not qualify for conditional certification.
A. Plaintiffs Are Not “Similarly Situated” To Other “Janitors.”
Plaintiffs have failed to identify the employment positions that are “janitorial” under their putative class definition, let alone to show that these positions involve the same job functions and pay provisions they allege for themselves. Maintenance or “janitorial” functions are provided by a wide range of Wal-Mart Associates at varying positions and pay levels. Ex. B 5; Ex. C ¶ 5; Ex. D ¶ 5; Ex. E ¶ 6. For example, many Wal-Mart store managers -- who are salaried and have general responsibilities for the day-to-day operations of an entire store -- are responsible for cleaning, vacuuming, and removing trash from their offices. See Ex. B ¶ 5; Ex. C ¶ 5; Ex. E. ¶ 6. SAM’s CLUBs facilities, moreover, have concrete floors. Ex. A ¶ 21. These facilities have no need for the type of floor cleaning services allegedly provided by Plaintiffs. Id. Yet, Plaintiffs seek conditional certification of a putative class that would encompass an unknown number of undefined “janitors” at all of these stores and facilities across the country.
Courts have routinely declined to certify -- even conditionally -- such ill-defined classes. See Freeman, 256 F. Supp. 2d at 945 (refusing conditionally to certify class of “all salaried Wal-Mart employees below officer level”); Smith, 2003 WL 22701017, at *3 (refusing conditionally to certify class of all hourly employees); Harper, 185 F.R.D. at 363 (refusing conditionally to certify class of all hourly restaurant employees). Cf. Morisky, 111 F. Supp. 2d at 498. Plaintiffs’ proposed class is overly broad on its face.8
B. Plaintiffs Were Not “Victims” Of A Common Practice Or Policy.
Plaintiffs also cannot show that they and other putative claimants were victims of a common policy or practice to deny them minimum wages and overtime. Plaintiffs’ FLSA count in the First Amended Complaint alleges that, “[a]t all times relevant to this action, Wal-Mart failed and refused to pay plaintiffs minimum wage for all hours worked and failed and refused to pay plaintiffs the overtime premiums required by the FLSA ....” AC ¶ 86. However, Plaintiffs’ own allegations show that most were paid at or above minimum wage plus overtime. See Wal-Mart’s Memorandum of Law in Support of Motion to Dismiss at 32-33.
In their Notice Motion, Plaintiffs now contend that they were denied unidentified amounts of overtime at unspecified pay levels for varying hours worked at different stores. Notice Motion at 10-11. These contentions cannot amend or otherwise cure the deficiencies of their pleading. For present purposes, however, these contentions refute the notion that Plaintiffs were the victims of any corporate-wide policy or practice.
Indeed, the only “common” practice Plaintiffs allege is that Wal-Mart exploited their undocumented status to obtain cheap labor.9 But there is no evidence that the weekly or monthly amounts paid by Wal-Mart to the independent contractors were insufficient to support lawful compensation to Plaintiffs or other potential class members (even with some overhead, administrative expenses, or profit to the contractor). To the contrary, Plaintiffs now concede that they were paid at or above minimum wage. All that remains, therefore, are individual claims of unpaid overtime Such disparate claims would not arise from any common practice or policy of Wal-Mart.
As shown, decisions to enter into contracts with independent contractors generally were made at the store level, and resulted in hundreds of different arrangements between individual stores and the independent contractors who allegedly hired Plaintiffs and other potential class members. Ex. A ¶¶ 14-17; Ex. B ¶¶ 6-14; Ex. C ¶¶ 6- 3; Ex. D ¶¶ 6-11; Ex. E ¶¶ 8-17. Any overtime violations would have occurred at the store level, involving the relevant independent contractor or subcontractor
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and, at most, an individual Wal-Mart store manager.
In Ray v. Motel 6 Operating, L.P., No. 95-828, 1996 U.S. Dist. LEXIS 22565 (D. Minn. Feb. 15, 1996), the district court denied conditional certification and facilitated notice where the evidence showed that the opt-in plaintiffs “ ‘performed different jobs at different geographic locations and were subject to different job actions ... at various times so as a result of various decisions by different supervisors made on a decentralized employee-by-employee basis.’ ” Id. at *7-*8 (citation omitted). The court found that any labor violations would be the result of decentralized decisions by local managers, and not the result of any common or centralized corporate plan. Id. at *8-*9. In Sheffield v. Orius Corp., 211 F.R.D. 411, 413 (D. Or. 2002), the court similarly denied conditional certification of a collective action where the alleged wage and hour violations would have resulted from individual actions by numerous parties. The court found that the putative plaintiffs were not “related as victims of a uniform, national policy,” making collective treatment of their claims improper. Id. Likewise, in Bernard, the district court refused to authorize notice to defendant’s employees in twenty different offices in fifteen states because the evidence was “insufficient to support allegations that defendant has a company-wide policy resulting in potential FLSA violations.” 231 F. Supp. 2d at 435. At most, the incidents alleged in the complaint were based on “the acts of supervisors at the individual offices.” Id.10
There is no evidence that any unpaid overtime claims of Plaintiffs resulted from a single, uniform Wal-Mart policy in this action. Indeed, Plaintiffs’ own allegations demonstrate just the opposite, reflecting divergent compensation amounts, work schedules, and other conditions (e.g., “security deposits,” invalid checks, etc.) that were established on a contractor-by contractor basis. Even if any Plaintiffs could prove a “joint employer” relationship existed with Wal-Mart at any particular store, their wage claims would result from the practices of an independent contractor and, at most, a local store manager. Such disparate claims are inappropriate for collective treatment for the same reasons found by these many other district courts.
The primary case cited by Plaintiffs, Lockhart v. Westinghouse Credit Corp., 879 F.2d 43 (3d Cir. 1989), is inapposite. The putative claimants there worked for the same manager at a discrete number of locations. Here, the named Plaintiffs alone allege that they worked for scores of different independent contractors at nineteen Wal-Mart stores managed by dozens of different Wal-Mart Associates in eight states. Far from supporting the vast nationwide class they propose, the Lockhart decision shows that the lack of any common decision-making authority makes Plaintiffs’ disparate overtime claims inappropriate for conditional certification.
C. Plaintiffs’ Wage And Hour Claims Are Dissimilar.
Because Plaintiffs were not the “victims” of a common plan or practice, their wage and hour claims lack sufficient commonality to justify a collective action. Some Plaintiffs, such as Mr. Zavala and Ms. Gomez, acted as subcontractors or crew leaders and allegedly took $500 per week for themselves, AC ¶¶ 7-8, before compensating other crew workers. RB Decl. Ex. 4; id. Ex. 5.11 Plaintiff Gutierrez was allegedly paid $500 per week for a 48 hour week, AC ¶ 17, while Plaintiff Cruz allegedly received $325 for a 60 hour week, id. ¶ 18. Plaintiff Pfauser was allegedly paid $1,500 a month and worked 56 hours per week, id. ¶ 23, while Plaintiff Zednik received $1,500 a month for a 70 hour work week, id. ¶ 20. Plaintiff Macak, in contrast, claims that he received between $1,300 to $2,000 per month for a 56 hour work week. Id. ¶ 26. In addition, some Plaintiffs claim that they were required to pay security deposits to independent contractors that were not returned. d. ¶¶ 23-24. Other Plaintiffs allege that some independent contractors bounced paychecks and never made good on them, id. ¶¶ 20-21, or that they were made to repair broken equipment apparently without pay, Szczesiak Decl. ¶ 6.
The wide disparity in job requirements, pay provisions, and other employment conditions alleged by Plaintiffs further confirm that they are not “similarly situated” for FLSA purposes. Adjudicating these disparate claims would not involve common questions of fact and law, but rather would require “individualized proof” from each Plaintiff showing “that work was performed for which he or she was not properly compensated.” Ray, 1996 WL 938231, at *2. See also Sheffield, 211 F.R.D. at 413 (finding that factual differences in plaintiffs’ pay claims, payment structures, and work conditions at nine different job sites “would require extensive consideration of individualized issues of liability and damages”); Harper, 185 F.R.D. at 362 n.2 (finding that plaintiffs’ overtime claims would “require proof of the exact amount due to each individual plaintiff, [making] individual issues ... predominate over class issues”); Lusardi v. Xerox Corp., 122 F.R.D. 463, 466 (D.N.J. 1988) (finding that “individualized defenses” and employment situations “for each of more than [1,300] plaintiffs will ...
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destroy any ... commonality”). And where class members moved from store to store -- as many of the named Plaintiffs allege -- these individualized disputes would involve multiple stores and witnesses. See, e.g., AC ¶¶ 20-21, 23-24, 26. Such diverse claims are inappropriate for collective treatment.
III. THE PROPOSED NATIONWIDE CLASS WOULD BE UNMANAGEABLE.
As one court has observed, “[i]n seeking court-authorized notice, plaintiffs are in effect asking this court to assist in their efforts to locate potential plaintiffs and thereby expand the scope of this litigation. As a matter of sound case management, a court should, before offering such assistance, make a preliminary inquiry as to whether a manageable class exists.” Severtson v. Phillips Beverage Co., 137 F.R.D. 264, 266 (D. Minn. 1991). It is implausible that a single federal court could be expected to manage the type of nationwide collective action that Plaintiffs propose in this case. Nor could a single jury feasibly or properly decide all of the individualized claims, proffers, and defenses that would be involved.
As noted, Plaintiffs’ proposed nationwide class would include “janitorial” workers at over 3,500 possible locations. Even if the putative class were limited to employees of independent floor cleaning contractors who allegedly worked at Wal-Mart stores, it would involve -- by Plaintiffs’ own account -- “thousands” if not tens of thousands of potential members “who were or are to be employed in Wal-Mart stores” across the country. AC ¶ 30. The unprecedented scope of Plaintiffs’ proposed collective action makes it inappropriate for conditional certification on manageability grounds alone. See White, 204 F. Supp. 2d at 1314 (refusing to authorize nationwide notice because of concerns about manageability and judicial economy); Bayles v. American Med. Response of Colo., 950 F. Supp. 1053, 1065 (D. Colo. 1996) (collective action would be inefficient and prejudicial because individual questions of liability are too numerous and significant to allow the case to proceed efficiently); Ray, 1996 WL 938231, at *5 (the “significant manageability problems inherent in a trial of 1000 plus individuals demonstrate that it is inappropriate to pursue this case as a class action”).
The manageability problems inherent in Plaintiffs’ proposed nationwide class would be compounded by their “joint employer” and disparate wage and hour claims. As shown above, resolution of the “joint employer” dispute would require testimony and evidence on a worker-by-worker, contractor-by-contractor, and store-by-store basis. Most Plaintiffs allegedly worked at multiple stores for scores of different independent contractors, implicating potentially dozens of store managers, assistant managers, night managers and other Wal-Mart witnesses. Efforts would also have to be made to locate the independent contractors and subcontractors who employed each Plaintiff, although it is doubtful their presence at trial could be compelled in most cases. See Pfohl, 2004 U.S. Dist. LEXIS 6447, at *30 (court found collective action to be unmanageable where threshold joint employer question would need to be resolved for hundreds of putative class members and four outside contractors).
And even if a particular Plaintiff were able to prove a “joint employer” relationship with Wal-Mart at one or more stores, he or she would then have to prove the amount of overtime compensation allegedly due at each store. This inquiry would involve separate questions concerning the work performed by each Plaintiff, his or her normal hourly rate, the number of hours he or she worked per week per store, and any off-setting claims or defenses. Each of these liability “sub-trials” would again implicate potentially dozens of witnesses. See Morisky, 111 F. Supp. 2d at 499 (collective action unmanageable where potential liability “would need to be determined on a job-by-job, or more likely, an employee-by-employee basis” for over one hundred putative plaintiffs).
On top of these significant case management problems, Plaintiffs’ submissions and allegations indicate an array of different languages and English-speaking skills. The provision of translation services for Plaintiffs’ putative nationwide class would itself be an enormous undertaking, further complicating and delaying resolution of individual claims while greatly increasing the costs of the litigation. Cf. id. (judicial system does not benefit from protracted, costly collective actions); Bayles, 950 F. Supp. at 1065 (same).
In Sheffield, the district court denied conditional certification in a case involving a much smaller putative class and far less complicated legal and factual issues. 211 F.R.D. at 413. Even so, the court found that a collective action would not “lead to efficiency gains and uniform fact determinations that § 216(b) was designed to create. Rather, a collective action certified on the facts presented thus far would be mired in particularized determinations of liability and damages, rather than collective consideration of common questions of law and fact.” Id.
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The enormous, nationwide class that Plaintiffs propose here would quickly mire this Court in thousands of individualized sub-trials, involving scores of different witnesses and multiple languages. Rather than facilitating prompt and efficient resolution of any viable FLSA claims, Plaintiffs’ proposed collective action would -- in the words of one court -- only become “ ‘a monster that no one can deal with.’ ” EEOC v. MCI Int’l, Inc., 829 F. Supp. 1438, 1446 (D.N.J. 1993) (citation omitted).12
IV. THE PROPOSED COLLECTIVE ACTION WOULD NOT PROVIDE WAL-MART AN ADEQUATE OPPORTUNITY TO DEFEND ITSELF.
Collective treatment of the individual claims alleged by Plaintiffs would also create significant due process problems. WalMart’s ability to defend itself against Plaintiffs’ FLSA claims is, as the Supreme Court has instructed, a “fundamental requirement of due process ... which must be granted at a meaningful time and in a meaningful manner.” Armstrong v. Manzo, 380 U.S. 545, 552 (1965). See also Lusardi v. Xerox Corp., 118 F.R.D. 351, 372 (D.N.J. 1987) (The FLSA provides for collective actions “only where employees are similarly situated in order that a defendant be afforded an opportunity to effectively defend. Requiring less would ... amount to a deprivation of a property right in violation of the Due Process Clause.”), vacated in part on other grounds, 122 F.R.D. 463 (D.N.J. 1988). The nationwide collective action that Plaintiffs propose would deprive Wal-Mart of these basic rights.
Besides disproving a “joint employer” relationship with Wal-Mart, Plaintiffs’ own admissions reveal the extent to which Wal-Mart’s ability to defend itself against such claims will depend on individual facts and circumstances. Wal-Mart would be entitled to try these questions on a plaintiff-by-plaintiff basis. See Arch v. American Tobacco Co., 175 F.R.D. 469, 488 (E.D. Pa. 1997) (concluding that the use of questionnaires -- rather than individualized inquiries of each plaintiff -- to establish the elements of causation and injury, without cross examination or rebuttal evidence for each plaintiff, would violate defendants’ due process rights); In re Masonite Corp. Hardboard Siding Prod. Liab. Litig., 170 F.R.D. 417, 425 (E.D. La. 1997) (defendants “cannot receive a fair trial without a process which permits a thorough and discrete presentation of [their] defenses”).
Even if the Court could establish adequate safeguards to resolve the “joint employer” question on a contractor-by-contractor basis, these threshold disputes would potentially involve over 100 different independent contractors and subcontractors. See Pfohl, 2004 U.S. Dist. LEXIS 6447, at *14, *17, *18, *19-*20 (holding that representative plaintiffs’ evidence concerning his outside contractor could not be used to establish a joint employer relationship between other putative plaintiffs and their outside contractors). Litigating these preliminary standing questions would take months -- if not years -- of costly, burdensome litigation. And that would still leave the putative Plaintiffs’ individual claims for overtime. As shown, each Plaintiff would bear the burden of proving the amount of overtime compensation allegedly owed. Ray, 1996 WL 938231, at *2. But even assuming arguendo that the Court could fashion a constitutionally-sound manner of trying these claims on a store-by-store -- rather than plaintiff-by-plaintiff -- basis, the putative class would implicate more than 1,000 stores. See, e.g., Reich v. Gateway Press, Inc., 13 F.3d 685, 701 (3d Cir. 1994) (in case involving direct employees of a single community newspaper publisher in Pittsburgh suburbs, court required testimony from representative reporters, editors, and other supervisors from five geographical groups on relevant patterns of conduct, hours worked, and hours paid). This would further delay and complicate the litigation, denying Wal-Mart of its fundamental right to defend against Plaintiffs’ claims in “a meaningful time and in a meaningful manner.” Armstrong, 380 U.S. at 552.
In addition, the independent contractors -- who Plaintiffs admit were their direct employers -- are critical, if not indispensable, to this action. Yet, none are named as defendants and most are outside of this Court’s jurisdiction. Zednik Decl. ¶ 6; Jaros Decl. ¶ 6; M. Macak Decl. ¶ 6; Cruz Decl. ¶ 6; AC ¶¶ 49, 51. This would make it extremely difficult, if not impossible, for Wal-Mart to prepare for and defend itself at trial. Even if the appearance of these contractors could be compelled, moreover, it would be patently improper (and infeasible) to try all of these separate “joint employer” claims and defenses before a single jury. See Bayles, 950 F. Supp. at 1067 (diverse claims with individual defenses should not be decided by a single jury, because the jurors would hear evidence irrelevant and inadmissible to certain plaintiffs); Burrell v. Crown Cent. Petroleum, Inc., 197 F.R.D. 284, 292 (E.D. Tex. 2000) (it is inappropriate to conduct multiple mini-trials on individual claims and defenses before the same jury).
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Plaintiffs’ proposed collective action, therefore, would deprive Wal-Mart of an adequate opportunity to defend itself. These due process problems constitute an additional ground for denying conditional certification of the proposed nationwide class.
V. PLAINTIFFS’ PROPOSED NOTICE IS UNNECESSARY AND DEFECTIVE.
Plaintiffs have been actively engaged in efforts to publicize this action and to solicit potential plaintiffs. There have been multiple United States and international news articles about the case. Indeed, as Plaintiffs’ counsel has described, when the action was originally filed against Wal-Mart “[i]t hit the roof ... and the whole world knew about it and all of a sudden [Plaintiffs] are on CNN and Fox News.” See, e.g., RB Decl. Ex. 7 at 13. Plaintiffs have also created two websites, <www.walmartjanitors.com> and <www.walmartamerika.com>, for potential claimants. Individuals are told that they “may have claims in a class action racketeering and labor law suit against Wal-Mart and Wal-Mart’s cleaning contractors” (who, in fact, are not named in this action) and “may be eligible to receive back pay through this lawsuit.” Individuals are invited to sign on as plaintiffs by filling out a questionnaire. The websites are available in seven different languages. And Plaintiffs’ counsel has traveled to Prague in the Czech Republic to solicit potential plaintiffs. Id. Ex. 6. To date, consents have been filed by 111 individuals, primarily from individuals residing in Eastern Europe.13
Wal-Mart believes that Plaintiffs’ Notice Motion should be denied for all of the reasons shown above. Even so, the international reporting on this case, coupled with Plaintiffs’ solicitation efforts, make any Court-facilitated notice unnecessary.
Finally, should this Court decide to grant any part of the Notice Motion, Wal-Mart respectfully requests separate briefing and argument on the content and provision of any notice to putative class members. Such additional proceedings would be justified to address, among other things, the following defects in Plaintiffs’ draft notice: • The content of any such notice “to absent class members” must be accurate and must “avoid communicating any encouragement to join the suit on its merits.” Hoffmann-La Roche, 493 U.S. at 169.
• The proposed notice is overbroad and would encompasses Wal-Mart Associates and workers in SAM’s CLUBs, even though Plaintiffs were employed by independent floor cleaning contractors, were not Wal-Mart Associates, and did not perform any services in SAM’s CLUBs.
• The proposed notice is not limited to claimants employed in the three years immediately preceding the filing of the lawsuit, which is the longest possible limitations period under the FLSA. 29 U.S.C. § 255.
• Placing notice of this lawsuit in 3,500 Wal-Mart facilities nationwide, as Plaintiffs suggest, would be unduly expensive, ineffective, and inappropriate.
• Allowing Plaintiffs to “leaflet” Wal-Mart stores with their notices, and to sponsor radio announcements in the United States and other countries, would be improper and only “ ‘stir[] up ... litigation through unwarranted solicitation.’ ” Freeman, 256 F. Supp. 2d at 944 (citation omitted).
• The proposed notice fails to inform putative plaintiffs of the potential adverse consequences participation in the suit could entail, given their admitted undocumented status. See 8 U.S.C. §§ 1225 et seq.
• The proposed notice does not establish a reasonable deadline for opt-ins. Hoffmann-La Roche, 493 U.S. at 169.
CONCLUSION
For the foregoing reasons, Wal-Mart respectfully requests that Plaintiffs’ Motion for Facilitated Notice Pursuant to 29 U.S.C. § 216(b) be denied in its entirety.
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Footnotes

1

Wal-Mart submits declarations from the following Wal-Mart Associates: Jared Bowen (“Ex. A”); Michael Hardy (“Ex. B”);

Clinton Miller (“Ex. C”); Chuck Richards (“Ex. D”); Tim Wamsley (“Ex. E”); Douglas Campbell (“Ex. F”); and Chris Rutter (“Ex.

G”). All other exhibits are attached to the Declaration of Randy Branitsky and will be referenced as (“RB Decl. Ex. _”).

2

Allegations from prior pleadings are deemed admissions by the party-declarant. Fed. R. Evid. 801(d)(2)(A). First Bank of Marietta

v. Hogge, 161 F.3d 506, 510 (8th Cir. 1998) (statements from superseded pleadings are admissible evidence); Dweck v. Pacificorp

Capital, Inc., No. 91-2095, 1998 WL 88742, at *7 (S.D.N.Y. Mar. 2, 1998) (same).

3

These and other statements by Plaintiffs tell a far different story from the slavery-like conditions alleged in the First Amended

Complaint. For instance, a week before this action was filed, Mr. Zavala told the Philadelphia Inquirer, “I know I’m illegal, but I

was so proud when 1 came out of the store each morning. The floors, they were so shiny, we did such a good job. Who’s going to

pay me now?” RB Decl. Ex. 5. His father echoed these sentiments, telling NJ Biz magazine that Plaintiffs wanted these jobs

“because we were making a living. We were looking for the American way of living, the American dream.” Id. Ex. 6 at 13.

4

Independent contractors provided the same types of services to retailers other than Wal-Mart. For example, Horizon National

Commercial Service, which provided floor cleaning services to fifteen Wal-Mart stores, reportedly provided the same services to

Target, Office Max, Home Depot, Rite-Aid and other national retailers. RB Decl. Ex. 5; <http://biz.yahoo.com/-

ic/125/125603.html> (Horizon National Contract Services, LLC Company Profile). Spartak Cleaning, Inc. provided crews to K-

Mart, Target and Farm Fresh stores. Linscy Decl. Ex. G (Woman Admits She Hired Illegal Immigrants, The Virginian-Pilot, June

7, 2001).

5

Plaintiffs’ reliance on Pirrone v. North Hotel Associates, 108 F.R.D. 78 (E.D. Pa. 1985), a pre-Hoffman-La Roche case, is

misplaced. See Notice Motion at 13. Although the court authorized notice, it did so without analysis of the “similarly situated”

requirement and limited notice to particular employees at one geographic location. Pirrone, 108 F.R.D. at 82. The Pirrone court

also expressed reservations about sanctioning the solicitation of litigation. Id.

6

The Kane and Moss cases cited by Plaintiffs are again distinguishable. In Kane, the proposed class included only fifty putative

members who held the same employment position for a single employer. Their claims arose from the employer’s decision to treat

the position as exempt under the FLSA, thus satisfying the “similarly situated” requirement. Kane, 138 F. Supp. 2d at 215.

Similarly, in Moss, the plaintiff class was limited to seventy members who worked in discrete positions for the same employer on

two projects. The plaintiffs’ overtime claims were subject to the same exemption and statute of limitations defenses, and the court

determined, “after careful deliberation,” that resolution of the common defenses would not “make the opt-in class unmanageable.”

Moss, 201 F.R.D. at 410. These cases provide no authority for conditional certification of a nationwide collective action involving

the type of threshold standing questions and manageability problems posed by Plaintiffs’ case theory.

7

For the same reasons, Plaintiffs are not “similarly situated” to any Wal-Mart Associates who might be encompassed by their ill-

defined class. Most notably, Wal-Mart Associates would not face the threshold “joint employer” question in asserting any FLSA

claims against Wal-Mart.

8

Any attempt by Plaintiffs to redefine their proposed class in their reply papers would be improper. See Reap v. Continental Cas.

Co., 199 F.R.D. 536, 550 n.10 (D.N.J. 2001) (court refused to consider a request for alternative certification of a subclass because “

‘it is improper for a party to present new arguments in his or her reply brief’ ”) (citation omitted).

9

Even here, Plaintiffs do not allege that Wal-Mart actually knew they were illegal, but only state their “belief” that Wal-Mart knew

based on isolated claims that unnamed Wal-Mart Associates were told or became aware of their status. Flores Decl. ¶ 8; Mendez

Decl. ¶ 8; Zednik Decl. ¶ 8; Jaros Decl. ¶ 8; M. Macak Decl. ¶ 8; Cruz Decl. ¶ 8. No specific facts, names of Wal-Mart Associates,

or other details are given to support these “belief” allegations. See Bernard, 231 F. Supp. 2d at 436 (rejecting similar unsupported

“information and belief” allegations).

10

See also Briggs v. United States, 54 Fed. Cl. 205, 206-07 (Ct. Cl. 2002) (denying a “national notice of action” for overtime claims);

Mielke v. Laidlaw Transit, Inc., No. 00-669, 2004 WL 443985, at *4 (N.D. Ill. Mar. 4, 2004) (denying certification where alleged

overtime violations varied from store to store and were not based upon a uniform policy); Marsh v. Butler County School Sys., 242

F. Supp. 2d 1086, 1094 (M.D. Ala. 2003) (denying certification of proposed collective action that would have included

“custodians,” “janitors,” “maintenance workers,” and other putative class members with disparate pay levels and working

conditions at multiple locations); Harper, 185 F.R.D. at 363 (district court declined to certify or authorize notice to putative class

of hourly employees at defendant’s restaurants in six states, where seven named plaintiffs had not presented sufficient evidence

beyond their single restaurant of a uniform overtime policy); Mertz v. Treetop Enters., No. 96-1208, 1999 U.S. Dist. LEXIS 18386,

at *5-*6, *9 (N.D. Ala. Mar. 2, 1999) (collective treatment inappropriate where the approximately 800 plaintiffs worked in

16

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different positions and different locations and “were supervised by numerous different unit managers during their employment”).

11

Besides demonstrating a lack of similarity among Plaintiffs, the supervisory roles of Mr. Zavala, Ms. Gomez, and others who acted

as subcontractors create potential conflicts that would preclude them from representing other putative members. See Pfohl, 2004

U.S. Dist. LEXIS 6447, at *25-*26 (noting such potential conflicts but denying certification on other grounds).

12

Ironically, Plaintiffs assert that each putative claimant should be given “a reasonable and timely opportunity to present [his or her

FLSA] claim in the existing litigation.” Notice Motion at 16. The collective action Plaintiffs propose, however, is so large and

unwieldy that it would only delay and complicate the resolution of such claims.

13

These form consents provide no information whatsoever about the nature or basis of any individual’s FLSA claim or other claims

(if any) against Wal-Mart.

17

 
 Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...

2006 WL 1042459 (D.N.J.) (Trial Motion, Memorandum and Affidavit) United States District Court, D. New Jersey.
Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximimiliano Mendez, Arturo Zavala, Filipe Condado, Luis Gutierrez, Daniel Antonio Crus, Petr Zednek, Teresa Jaros, Juri Pfauser, Hana Pfauserova, Pavel Kunc and Martin Macak, on behalf of themselves and all
others similarly situated, Plaintiffs, v.
WAL-MART STORES, INC., Defendant.
Civil Action No. 03-Civ.-5309 (JAG). March 20, 2006.

Plaintiffs’ Memorandum of Law in Opposition to Wal-Mart’s Motion to Dismiss

Table of Contents

TABLE OF AUTHORITIES .....................................................................................................................................................

iii

PRELIMINARY STATEMENT ..............................................................................................................................................

1

STATEMENT OF THE CASE ................................................................................................................................................

4

A. Parties ...........................................................................................................................................................................................

4

1. Plaintiff Janitors .........................................................................................................................................................................

4

2. Wal-Mart ......................................................................................................................................................................................

4

B. Course of Proceedings ............................................................................................................................................................

4

1. Wal-Mart’s Motion to Dismiss the First Amended Complaint ...............................................................................

5

2. Decision on Motion to Dismiss ...........................................................................................................................................

5

C. The Second Am ended Com plaint ....................................................................................................................................

7

1. Creation of the Wal-Mart Enterprise .................................................................................................................................

8

2. Money Laundering of the Proceeds of Immigration Crimes ....................................................................................

9

3. Commission of Immigration Crimes by Contractors and Wal-Mart .....................................................................

10

4. Activities of the Enterprise Proximately Harmed Plaintiffs .....................................................................................

12

D. Wal-Mart’s Renewed Motion to Dismiss .......................................................................................................................

13

ARGUMENT ..................................................................................................................................................................................

13

WAL-MART’S MOTION TO DISMISS COUNTS I AND II OF THE SECOND AMENDED

14

COMPLAINT SHOULD BE DENIED .................................................................................................................................

1

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...
A. Plaintiffs Allege a Viable Association-in-Fact RICO Enterprise Comprised of Wal-Mart and its Maintenance Contractors ............................................................................................................................................................ 1. The Enterprise is Sufficiently Distinct From Wal-Mart ............................................................................................. 2. Wal-Mart and Its Contractors Share a Common Purpose ......................................................................................... B. Wal-Mart Has Participated in the Affairs of the Enterprise Through a Pattern of Racketeering .............. 1. Wal-Mart Directs the Affairs of the Enterprise ............................................................................................................. C. Wal-Mart’s Commission of the Predicate Acts ............................................................................................................ 1. Money Laundering ................................................................................................................................................................... 2. The Immigration Predicates .................................................................................................................................................. 3. Involuntary Servitude .............................................................................................................................................................. D. The Activities of the Enterprise Harmed Plaintiffs ..................................................................................................... 1. The Racketeering Activity Proximately Caused Plaintiffs’ Harm ......................................................................... E. Wal-Mart’s Attempt To Rely on an In Pari Delicto Defense Fails ...................................................................... F. Plaintiffs State a RICO Conspiracy Claim Under Section 1962(d) ....................................................................... CONCLUSION ...............................................................................................................................................................................
Table of Authorities Alexander v. Sandoval, 532 U.S. 275 (2001) .................................................... Baker v. IBP, 357 F.3d 685 (7th Cir. 2004) ....................................................... Bateman Eichler, Hill Richards Inc., v. Berner, 472 U.S. 299 (1985) .... Biete, Co. v. Blomquist, 848 F. Supp. 1446 (D. Minn. 1994) ..................... Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494 (3d Cir. 1998) ........................................................................................................................ Cehdric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) ............ Choimbol v. Fairfield Resorts, Inc., No. Civ. A. 2:05 CV 463, 2006 WL. 521763 (E.D. Va. Mar. 2, 2006) .................................................................. Commercial Cleaning Services, L.L.C. v. Colin, 271 F.3d 374 (2d Cir. 2001)] ............................................................................................................................... Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984) .. D.R. by L.R. v. Middle Bucks Area Vocational Technical Sch., 972 F.2d 1364 (3d Cir. 1992) ...........................................................................................

14
14 18 20 20 24 24 28 34 36 36 40 42 44
13 16, 19
40 41 36
14, 15, 16 25, 39
17, 37, 38
40 13 2

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...
Doug Grant Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d Cir. 2000) ................................................................................................................................. Emcore Corp. v. PricewaterhouseCoopers LLP, 102 F. Supp. 2d 237 (D.N.J. 2000) ................................................................................................................. Feinberg v. Katz, No. 99-civ-045, 2005 WL. 2990633 (S.D.N.Y. Nov. 7, 2005) ............................................................................................................................ Gilmore v. Berg, 820 F. Supp. 179 (D.N.J. 1993) ........................................... Hanrahan v. Britt, No. CIV. A. 94-4615, 1995 WL. 422840 (E.D. Pa. July 11, 1995) ................................................................................................................ Holmes v. Securities Investor Protection Corp, 503 U.S. 258 (1992) ..... Jaguar Cars Inc. v. Royal Oak Motor Car Co., Inc., 46 F.3d 258 (3d Cir. 1995) ........................................................................................................................ Kimes v. United States, 939 F.2d 776 (9th Cir. 1991) ................................... Lake v. Arnold, 112 F.3d 682 (3d Cir. 1997) .................................................... McCarthy v. Recordex Serv., Inc., 80 F.3d 842 (3d Cir. 1996) .................. Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002) ...................... In re National Mortgage Equity Corp., 636 F. Supp. 1138 (C.D. Cal. 1986) ................................................................................................................................. NOW v. Scheidler, 510 U.S. 249 (1994) ............................................................. O’Keefe v. Aamco Transmissions, Inc., No. 91-2506, 1992 WL. 38441 (E.D. Pa. Feb. 24, 1992) .............................................................................. Perma Life Mufflers, Inc. v. Int’l Parts Corp., 392 U.S. 134 (1968) ....... Pinkerton v. United States, 328 U.S. 640 (1946) ............................................. Pinter v. Dahl, 486 U.S. 622 (1988) ..................................................................... Powell v. Ridge, 189 F.3d 387 (3d Cir. 1999) ................................................... Reves v. Ernst & Young, 507 U.S. 170 (1993) .................................................. Rodriguez v. McKinney, 878 F. Supp. 744 (E.D. Pa. 1995) ........................ Salinas v. United States, 522 U.S. 52 (1997) .................................................... Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) ...................................... Seville Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786 (3d Cir. 1984) .............................................................................................

41
20, 21
17
21 16
36, 37, 38, 41 passim
34 13 41 passim 41
13, 36, 40 24
41 16 41 13 passim 36 42 40 13, 14, 28
3

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...
Smith v. Berg, 247 F.3d 532 (3d Cir. 2001) ....................................................... Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002) ........................................ Tilli v. Aamco Transmissions, Inc., No. 91-1058, 1992 WL 38405 (E.D. Pa. Feb. 24, 1992) ............................................................................................ Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) .................. United States v. Alzanki, 54 F.3d 994 (1st Cir. 1995) .................................... United States v. Avila-Dominguez, 610 F.2d 1266 (5th Cir. 1980) .......... United States v. Barajas-Chavez, 162 F.3d 1285 (10th Cir. 1999) ........... United States v. Baftiri, No. CR 99-47, 2000 WL 34030830 (N.D. Iowa, April 11, 2000) ................................................................................................. United States v. Caruso, 948 F.Supp. 382 (D.N.J. 1996) ............................. United States v. Church, 955 F.2d 688 (11th Cir. 1992) .............................. United States v. Conley, 37 F.3d 970 (3d Cir. 1994) ...................................... United States v. Console, 13 F.3d 641 (3d Cir. 1993) ................................... United States v. Darden, 70 F.3d 1507 (8th Cir. 1995) ................................. United States v. Grubb, 11 F.3d 426 (4th Cir. 1993) ..................................... United States v. Guerra-Garcia, 336 F.3d 19 (1st Cir. 2003) .................... United States v. Hernandez, 327 F.3d 1110 (10th Cir. 2003) ..................... United States v. Johnson, 302 F.3d 139 (3d Cir. 2002) ................................. United States v. Kozminski, 487 U.S. 931 (1988) ............................................ United States v. Lopez, 521 F.2d 437 (2d Cir. 1975) ..................................... United States v. Masters, 924 F.2d 1362 (7th Cir. 1999) ............................. United States v. Oloyede, 982 F.2d 133 (4th Cir. 1992) ............................... United States v. Oreto, 37 F.3d 739 (1st Cir. 1994) ....................................... United States v. Parise, 159 F.3d 790 (3d Cir. 1998) .................................... United States. v. Pungitore, 910 F.2d 1084 (3d Cir. 1990) .......................... United States v. Romero-Cruz, 201 F.3d 374 (5th Cir. 2000) ..................... United States v. Singh, 261 F.3d 530 (5th Cir. 2001) .................................... United States v. Truszkowski, 05-cr-00454 (N.D. Ill 2005.) ........................

42 13 24
39 34 31 30 28
24 20 27 14 21 21 28 31 30 34, 35 32 20 29 21 21 16 30 33 26 4

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...

United States v. Turkette, 452 U.S. 576 (1981) ................................................ United States v. Veerapol, 312 F.3d 1128 (9th Cir. 2002) ........................... United States v. Wong, 40 F.3d 1347 (2d Cir. 1994) ...................................... United States v. Yoshida, 303 F.3d 1145 (9th Cir. 2002) ............................. United States v. Zheng, 306 F.3d 1080 (11th Cir. 2002) .............................. Williams v. Mohawk Industries, Inc., 411 F.3d 1252 (2005) ...................... Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295 (D.N.J. 2005) ......
FEDERAL STATUTES 8 U.S.C. § 1324(a) ....................................................................................................... 18 U.S.C. § 1584 .......................................................................................................... 18 U.S.C. §1961 ........................................................................................................... 18 U.S.C. §1962(d) ..................................................................................................... 18 U.S.C. § 1964(c) ..................................................................................................... 29 U.S.C. §216 (b) ....................................................................................................... 29 U.S.C. §201 .............................................................................................................. 42 U.S.C. §1985(3) ..................................................................................................... Fed. R. Civ.P. 8(f) ........................................................................................................ Fed. R. Civ. P. 12(b) ................................................................................................... Pub L. 104-132 §433 (1996) ....................................................................................

14 34 21 29 32, 33 passim passim
passim 34 1
passim 36, 40
4 5 5 13 passim 37

PRELIMINARY STATEMENT
This action was filed on November 10, 2003. Since then plaintiffs have been precluded from taking any discovery on their claims under the Racketeer Influenced Corrupt Organizations Act (“RICO”), 18 U.S.C. §1961 et seq. against Wal-Mart Stores, Inc. (“Wal-Mart”). In moving again to dismiss these claims, Wal-Mart would have this Court weigh in a vacuum the evidence that Wal-Mart created and sustained an association-in-fact criminal enterprise including various maintenance contractors which was designed to exploit the labor of undocumented janitors and which was operated through systemic violation of federal immigration, money laundering, and other criminal laws. Indeed, Wal-Mart expends much effort disputing the inferences that should be drawn from electronic surveillance evidence of top management gathered by federal investigators. Wal-Mart’s motion is insupportable under the notice pleading standard of Rule 8 and the requirement of Rule 12 that all facts alleged in a complaint be taken as true and all inferences drawn in favor of plaintiffs in ruling - as a threshold matter - on whether a pleading states a claim.
We show below that plaintiffs amply allege that Wal-Mart formed an association-in-fact criminal enterprise with
5

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...
maintenance contractors to exploit undocumented migrants. Wal-Mart used separate contractors and sub-contractors in an effort to shield its role in the scheme and its liability as employer of its janitorial workforce. Wal-Mart established and directed this on-going enterprise, instructing contractors to set up multiple shell corporations to which it then funneled millions of dollars to disguise the recipients of the proceeds of the enterprise and avoid detection. Wal-Mart, of course, determined the scope of the enterprise by determining which contractors it would use as it set performance and other standards for the contractors to follow.
Plaintiffs allege that Wal-Mart participated in the affairs of the enterprise through the commission of multiple predicate acts of racketeering. Most notably, Wal-Mart knowingly engaged in money laundering through the shell companies it had its contractors create. Those multiple transactions (that are itemized in documents referenced and incorporated in the pleading) all involved the proceeds of the contractors’ criminal immigration violations and all furthered the scheme. Moreover, WalMart conspired with the contractors to commit further acts of money laundering, since the elaborate corporate shell game Wal-Mart created would necessarily engender multiple further financial transactions among sub-contractors and principals involving the criminal proceeds. Nothing more is required to plead multiple predicate acts of racketeering sufficient to support plaintiffs’ RICO claims.
In addition to money laundering, plaintiffs allege that Wal-Mart aided and abetted (as well as directly committed) multiple criminal immigration violations. The Second Amended Complaint (“SAC”) is replete with allegations - based in part on res judicata criminal convictions and the affidavits of law enforcement agents - that Wal-Mart’s contractors engaged in immigration crimes. Wal-Mart systematically supported these actions and helped to bring them about by hiring the contractors through corporate shells (to shelter the scheme from detection) and then paying janitors’ wages and contractors’ overhead and profits through those shells. In addition, in specific instances Wal-Mart management aided and facilitated multiple specific instances of harboring and transporting undocumented janitors. Finally, the SAC contains detailed allegations that Wal-Mart harbored undocumented aliens by providing lodging in its stores, among other violations.
These predicate acts of racketeering were intended to and did harm plaintiffs. The purpose of the criminal enterprise was to exploit undocumented labor. The predicate acts of racketeering were intended to and did result in Wal-Mart’s janitors being underpaid - denied overtime and (in some cases) minimum wage (or, at times, any wages at all), denied workmen’s compensation and denied other employment benefits. In arguing that plaintiffs lack standing, Wal-Mart would have this Court ignore appellate decisions in cases involving materially identical claims which have concluded that the economic cost of depressed wages paid through such schemes can support a RICO claim. Wal-Mart’s standing argument also would require this Court to, in effect, adopt an in pari delicto defense into RICO. Such a defense has not been accepted by the Third Circuit and is counter to well-established anti-trust law that is the basis of RICO standing jurisprudence. There is no reason to deny plaintiffs a recovery under RICO just because they worked for Wal-Mart under exploitative conditions.
Finally, plaintiffs have sufficiently alleged that Wal-Mart participated in a RICO conspiracy under 18 U.S.C. § 1962(d). WalMart pays scant attention to this claim, but plaintiffs plainly and amply allege that Wal-Mart conspired with the contractors who participated in the Wal-Mart enterprise with the knowledge and intent that the contractors would commit money laundering, multiple immigration violations and other crimes for which they have been convicted. Indeed, Wal-Mart contractors have admitted in a host of civil and criminal proceedings to having committed multiple crimes in connection with their procuring janitorial labor for Wal-Mart, and it is alleged that Wal-Mart directed its maintenance contractors to set up and function through multiple corporate shells to further the scheme. These allegations standing alone are sufficient - together with the substantive RICO allegations set out in the Second Amended Complaint - to make out a RICO conspiracy claim under 18 U.S.C. § 1962(d).
Wal-Mart’s renewed motion to dismiss plaintiffs’ RICO claims should be denied.
STATEMENT OF THE CASE
A. Parties
1. Plaintiff Janitors
The 17 named plaintiffs are citizens of Mexico, the Czech Republic, Slovakia and Poland who worked for Wal-Mart and one or more of its joint-employer maintenance contractors as janitors at stores located throughout the United States at various
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times. SAC ¶¶7-28. Each of the 17 was at times an undocumented immigrant not entitled to work in the United States. Id.
The named plaintiffs seek relief on behalf of themselves and a class of thousands of undocumented and recently documented immigrants, currently, formerly, or in the future to be, employed as janitors to clean Wal-Mart stores. SAC ¶7. In addition, a total of 213 individuals have already filed consents to join in the FLSA claim under the collective action provisions of 29 U.S.C. §216(b).
2. Wal-Mart
Wal-Mart is a Delaware corporation with principal corporate offices in Bentonville, Arkansas. SAC ¶29. Wal-Mart has aggressively followed a low-cost, labor-hostile, high-volume sales strategy that has led it to become the largest employer in the United States and the largest retailer in the world. Id. Wal-Mart operates thousands of stores in all fifty states, including locations where class representatives and other members of the plaintiff class were employed. Id.
B. Course of Proceedings
On November 10, 2003 plaintiffs commenced this action. Plaintiffs thereafter filed a First Amended Complaint on February 2, 2004.
1. Wal-Mart’s Motion to Dismiss the First Amended Complaint
Plaintiffs’ First Amended Complaint pleaded five causes of action against Wal-Mart. Count I alleged that Wal-Mart and various maintenance contractors created an association-in-fact enterprise to exploit the labor of undocumented janitors which was run through a pattern of racketeering activity in violation of 18 U.S.C. § 1962(c). Count II alleged that Wal-Mart engaged in a RICO conspiracy in violation of Section 1962(d) by knowingly agreeing to facilitate the operation of the association-in-fact enterprise alleged in Count I. Count III alleged a civil rights conspiracy in violation of 42 U.S.C. § 1985(3) with its maintenance contractors. Count IV alleged overtime and minimum wage violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §201 et seq.. Count V alleged common law false imprisonment based on Wal-Mart’s systematic practice of locking janitors in its stores during their overnight shifts.
By stipulation of the parties entered by this Court, Wal-Mart was given until March 19, 2004 to answer or otherwise respond to the First Amended Complaint. On March 19, 2004, Wal-Mart filed an omnibus motion to dismiss. The motion was fully briefed by June 1, 2004, and oral argument was heard on the motion on October 20, 2004. Under Rule 16.1 of this Court’s local rules, Wal-Mart’s filing acted as a stay of discovery as no preliminary discovery conference would be scheduled until the motion to dismiss was ruled upon.
2. Decision on Motion to Dismiss
By Opinion and Order dated October 7, 2005,1 this Court denied Wal-Mart’s motion to dismiss the FLSA and false imprisonment claims. The Court dismissed, with prejudice, plaintiffs’ Civil Rights Act claim. On the RICO claims, the Court granted the motion with leave to amend.
The Court concluded that the complaint did not specifically allege that Wal-Mart committed two predicate acts of racketeering. With respect to allegations concerning the transportation of undocumented aliens,2 the Court concluded that plaintiffs failed to allege sufficiently that Wal-Mart knowingly transported or moved aliens or that this was done to further their presence in the United States, or that it conspired with or aided and abetted others to do so.3 With respect to the harboring predicate, the Court found that while “providing housing and employment may constitute ‘harboring’ for ‘financial gain,’ ” this was not specifically set out.4 The Court found that, although the First Amended Complaint alleged that contractors encouraged undocumented aliens to enter the United States, there were no allegations that Wal-Mart “took affirmative steps to assist Plaintiffs to enter or remain unlawfully in the United States[.]”5 With respect to the claim that WalMart hired ten or more undocumented alien janitors, the Court concluded that plaintiffs were required but failed to allege that Wal-Mart knew that the “aliens were brought into the United States for the purpose of obtaining unlawful employment.”6 The Court concluded that plaintiffs’ money laundering claims were “vague and insufficient to support a RICO claim.”7 In
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particular, the Court found that the First Amended Complaint did not “identify the relevant financial transactions or conduct by Wal-Mart[.]”8 The Court similarly concluded that plaintiffs’ allegations of involuntary servitude and mail and wire fraud were insufficient.
With respect to the RICO conspiracy claim, the Court noted that 1962(d) imposes liability in cases where “conspirators agree to a plan in which some conspirators will commit crimes and others will provide support[.]”9 Finding that the First Amended Complaint did not include sufficient allegations to support an inference that “Wal-Mart agreed with co-conspirators to the commission, by co-conspirators and others, of RICO predicate acts, in furtherance of an unlawful enterprise,” the Court also dismissed the Section 1962(d) claim without prejudice to replead.10
The Court did not address Wal-Mart’s arguments that plaintiffs had failed to allege a RICO enterprise separate or distinct from Wal-Mart itself, Wal-Mart’s operation or management role in that enterprise or that plaintiffs were proximately harmed by the actions of the enterprise.
C. The Second Amended Complaint
Pursuant to this Court’s order, plaintiffs filed the SAC on November 21, 2005. The allegations of the SAC relevant to plaintiffs’ RICO claims are set out below.
The SAC alleges that to avoid and evade responsibility under federal immigration law and to profit from illegal activity, WalMart created an association-in-fact criminal enterprise through which it conspired with various cleaning contractors whom it knew would provide janitors to clean its stores who were not legally authorized to work in the United States.11 These migrants worked well in excess of 40 hours a week nearly every night of the year without overtime (and at times any) compensation. In response to law enforcement actions and to shield its reliance on undocumented labor, Wal-Mart instructed and encouraged contractors to create a web of shell corporations that facilitated Wal-Mart in exploiting the workers and allowed the migrant hiring scheme to flourish despite repeated law enforcement actions.12 The contractors did so, associating with Wal-Mart in the enterprise.13 Wal-Mart well knew and intended that maintenance contractors it relied upon routinely and systematically encouraged, harbored and transported unlawful migrant labor in violation of The Immigration Reform and Control Act of 1986 (“IRCA”), and Wal-Mart itself both aided and abetted the encouraging, transporting and harboring of undocumented workers by its contractors and committed certain such offenses as a principal as well.14
1. Creation of the Wal-Mart Enterprise
In particular, plaintiffs allege that no later than 1997, following law enforcement raids at various Wal-Mart stores, LeRoy Scheutz, the Divisional Vice President of Operations in the Wal-Mart Stores Division, created an association in fact enterprise with Christopher Walters, who owned and operated Wal-Mart’s largest janitorial contractor, IMC, Inc. whose janitors had been targeted in the raids. Wal-Mart had determined sometime before 1997 that it would no longer verify the immigration bona fides of janitors employed through contractors. In conversations immediately following the raids, Scheutz told Walters that Wal-Mart would continue to use IMC only if Walters created and provided undocumented janitorial labor through multiple shell corporations so that if one firm were caught using undocumented labor, Wal-Mart could fire that company but Walters could continue to supply the undocumented migrants to Wal-Mart through other front companies.15 Schuetz knew and intended that the use of the front companies would shield the scheme and its profits from detection by law enforcement authorities.16 Wal-Mart also knew and intended that IMC and other contractors would encourage aliens to reside in the United States (so that they could work at Wal-Mart), harbor and transport aliens within the United States to further their presence here.17 On information and belief, similar arrangements were made with other contractors.18
2. Money Laundering of the Proceeds of Immigration Crimes
Walters set up multiple shell companies as Scheutz directed.19 Wal-Mart paid for janitorial labor through the shell companies,20 with the knowledge that the monies provided were the proceeds of the illegal hiring, encouraging and
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transporting of undocumented migrant labor.21 Specifically, between 1999 and 2001, Wal-Mart conducted multiple financial transactions through which a sub-set of Walters’-controlled firms were paid in excess of $77 million as the proceeds of the unlawful activities.22 Wal-Mart also knew and intended that the payments to the various shell companies would engender still further financial transactions involving the proceeds among the contractors, their principals and various subcontractors.23
3. Commission of Immigration Crimes By Contractors and Wal-Mart
As outlined in the SAC, Wal-Mart’s agreement with Walters constituted a conspiracy in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I) to transport, harbor or encourage undocumented aliens to reside in the United States because Wal-Mart knew and intended that Walters and his associated sub-contractors would encourage undocumented aliens to enter the United States to work at Wal-Mart, would transport undocumented aliens within the United States and would harbor the undocumented aliens put to work at Wal-Mart.24
It is res judicata that numerous Wal-Mart contractors violated multiple federal immigration and other laws in connection with the migrant janitorial worker scheme. Specifically several Walters-controlled firms pleaded guilty on April 25, 2005 to a conspiracy to transport and encourage illegal aliens to reside in the United States between 1998 and 2002.25 Walters subcontractor CMS of Queensbury (“CMS”), which Walters used to supply undocumented janitorial labor to Wal-Mart, pleaded guilty in 2003 to a similar conspiracy.26 Wal-Mart subcontractor DJR Cleaning Enterprises (“DJR”) admitted in October of 2005 that it had conspired with various Walters-controlled companies and its own sub-contractor CMS, to transport and encourage and induce aliens to reside in the United States.27
On June 22, 2005, Walter J. Truszkowski entered a guilty plea to a two-count federal indictment charging a conspiracy to conceal aliens and to encourage aliens to reside in the United States as well as to a conspiracy to launder the proceeds of those immigration offenses. Truszkowski created, owned and operated Crystal Clear Nationwide Management, Inc., and DeLuxe Cleaning, Inc.28 Through Vincent Romano, DJR’s principal, Truszkowski obtained subcontracts to clean various Wal-Mart stores in Illinois and Indiana.29 Plaintiffs allege that these actions were in furtherance of the conspiracy between Wal-Mart and Walters, as Walters’ firm IMC used Romano and his affiliated contractors as corporate shells intended to shield Wal-Mart’s employment of the undocumented migrant cleaning crews.30
Wal-Mart contractors recruited janitors to enter the United States through promises of employment, transported them when they arrived to various Wal-Mart locations and provided them with communal lodging and other support to facilitate and extend their presence in the United States and work at Wal-Mart.31 For its own part, Wal-Mart systematically harbored undocumented alien janitors through its widespread practice of locking janitors in its stores at night. This practice further isolated the janitors, limiting the ability of law enforcement or others to detect their presence and thus facilitating their continued employment and presence in the United States.32 Wal-Mart also provided certain undocumented janitors lodging in its stores, shielding them from detection.33
Wal-Mart aided and abetted the immigration crimes of the contractors. Wal-Mart knew that the janitorial labor its various contractors supplied was encouraged to travel to or remain in the United States, and transported and harbored by the contractors.34 Wal-Mart assisted this activity by financing the operations of the contractors. Wal-Mart’s millions of dollars in payments underwrote not only the labor of the janitors but the profit and overhead costs and thus the criminal activity of the contractors, knowingly and intentionally making their crimes possible and helping to bring them about.35 In addition to its general support of multiple immigration crimes, Wal-Mart aided and abetted the transportation and harboring of its contractors by engaging replacement crews from its contractors following enforcement actions, knowing that its actions would lead the contractors to transport crews to the affected Wal-Mart stores and house the janitors.36
4. Activities of the Enterprise Proximately Harmed Plaintiffs
Wal-Mart has an on-going and, indeed, permanent need for janitorial services in its thousands of retail stores. Were Wal-Mart to hire its maintenance staff directly, it, at a minimum, would be required to comply with the verification procedures of federal immigration law, as well as federal and state tax and labor laws. The irreducible costs of lawful employment, however, can be and were avoided through sham contracting arrangements and undocumented migrant labor.37 The amounts
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that plaintiffs were paid for their labor were depressed below market levels and, indeed, below the levels mandated by the FLSA’s minimum wage and overtime requirements. All of this was a foreseeable, direct and intended result of the operation of the Wal-Mart enterprise. Indeed, Wal-Mart and the contractors stood to gain if the enterprise delivered janitorial labor at a cost less than the legal minima. The immigration crimes and money laundering activities of participants in the enterprise were thus the necessary conditions for the exploitative labor conditions the janitors suffered and, by the same token, WalMart’s and its contractors’ profits.38
D. Wal-Mart’s Renewed Motion to Dismiss
On January 20, 2006, Wal-Mart filed a renewed motion to dismiss the RICO claims (i.e., Counts I and II) of the SAC raising the same arguments it made in connection with its initial motion to dismiss.
ARGUMENT
The Supreme Court has reaffirmed that “a complaint must include only ‘a short and plain statement of the claim showing that the pleader is entitled to relief’ ... ‘giv[ing] the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.’ ” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). The notice pleading contemplated by Rule 8 “relies on liberal discovery rules and summary judgment motions to define disputed facts and issues” rather than motion practice under Rule 12. Swierkiewicz, 534 U.S. at 512.
Thus, a “liberal standard” necessarily applies to review of the pleadings on a motion under Rule 12(b)(6). Lake v. Arnold, 112 F.3d 682, 685 (3d Cir. 1997). The court is “required to ‘accept as true the facts alleged ... and all inferences that can be drawn therefrom’ ” in plaintiffs favor. Powell v. Ridge, 189 F.3d 387, 392 (3d Cir. 1999) (quoting D.R. by L.R. v. Middle Bucks Area Vocational Technical Sch., 972 F.2d 1364, 1367 (3d Cir. 1992) (en banc)) (overruled on other grounds by Alexander v. Sandoval, 532 U.S. 275 (2001)); see also Fed. R. Civ. P. 8(f) (pleadings must be construed to do “substantial justice”). Further, a court “ ‘presume[s] that general allegations embrace those specific facts that are necessary to support the claim.’ ” NOW v. Scheidler, 510 U.S. 249, 256 (1994)) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)) (upholding pleadings in RICO context).
In this connection, a court must not “confuse [ ]what must be pleaded with what must be proved.” Seville Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786, 790 (3d Cir. 1984) (reversing dismissal of RICO claim). “[It] is enough that a complaint put the defendant on notice of the claims against him. It is the function of discovery to fill in the details, and of trial to establish fully each element of the cause of action.” Id.
As its motion makes clear, Wal-Mart would have this Court make findings of fact on allegations in the SAC. This is insupportable as a matter of law. When the proper standard under Rule 12 is applied to the detailed allegations of the SAC, Wal-Mart’s motion must be denied.
I. WAL-MART’S MOTION TO DISMISS COUNTS I AND II OF THE SECOND AMENDED COMPLAINT SHOULD BE DENIED
A. Plaintiffs Allege a Viable Association-in-Fact RICO Enterprise Comprised of Wal-Mart and its Maintenance Contractors
1. The Enterprise is Sufficiently Distinct From Wal-Mart
To make out a RICO enterprise, plaintiffs must allege “an ongoing organization, [whether] formal or informal,” which “function[s] as a continuing unit.” United States v. Turkette, 452 U.S. 576, 583 (1981); United States v. Console, 13 F.3d 641,
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651 (3d Cir. 1993). Under Section 1962(c), a RICO defendant must be a distinct entity from the enterprise it operates through a pattern of racketeering activity. See Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 162 (2001); Jaguar Cars Inc. v. Royal Oak Motor Car Co., Inc., 46 F.3d 258, 268 (3d Cir. 1995) (cited with approval in King, 533 U.S. at 161). While a plaintiff (or the government) must ultimately show proof of the Turkette factors, such specific elements need not be pleaded to defeat a motion under Rule 12(b)(6). Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 790 (3d Cir. 1984).
In King, the Supreme Court reversed the Second Circuit which had held that the sole shareholder of a boxing promotion company was not sufficiently distinct from the company itself to permit the shareholder to be sued under the theory that he operated the company as a RICO enterprise. King, 533 U.S. at 160-61. In reversing the Second Circuit’s restrictive construction of the distinctiveness requirement, the Court examined the broad statutory definitions of an enterprise under 18 U.S.C. § 1962(c). Id. at 161-62. It held that a sole shareholder was distinct for purposes of RICO from the closely-held corporation he controls:
The corporate owner/employee, a natural person, is distinct from the corporation itself, a legally different entity with different rights and responsibilities due to its different legal status. And we can find nothing in the statute that requires more “separateness” than that.
King, 533 U.S. at 163. Thus, RICO’s distinctiveness element requires only that the defendant be legally distinct from the enterprise, as a corporation is legally distinct from its officers or employees, although their acts may bind the corporation as a matter of law. Id. at 165; see also Jaguar Cars, 46 F.3d at 268.
Here, plaintiffs allege the association-in-fact enterprise is comprised of Wal-Mart and its maintenance contractors, SAC ¶¶3, 41, 67, each of which is undeniably a separate corporate entity, legally distinct from the enterprise, SAC ¶¶45, 51, 55, 84, 85. Wal-Mart’s argument that plaintiffs allege that Wal-Mart conspired with itself, Mot. at 34-35, willfully ignores the substance of the scheme alleged in the pleadings. Rather, Wal-Mart chose to join with separate maintenance contractors to cover it from liability for immigration and employment law obligations connected with its janitorial labor force. SAC ¶47. Far from conspiring with itself, Wal-Mart created a separate enterprise with its contractors precisely so that it could point a finger at the contractors whenever criminal conduct was exposed. SAC ¶¶3, 44, 47.
In an effort to get around this, Wal-Mart urges that because its various contractors are said to be acting as its co-conspirators or agents in the operation of the enterprise, “[t]his is equivalent to saying that Wal-Mart operated itself as an unlawful enterprise.” Mot. at 34-35. But it is axiomatic that co-conspirators act as mutual agents for one another, Pinkerton v. United States, 328 U.S. 640, 646-47 (1946); United States. v. Pungitore, 910 F.2d 1084, 1147 (3d Cir. 1990), which does not - and cannot - shield Wal-Mart from liability here as RICO envisions that participants in an enterprise may conspire with one another. Indeed, conspiring to commit money laundering or immigration crimes are themselves RICO predicate offenses.
Wal-Mart’s argument is nothing more than the claim rejected in King, that a corporate enterprise is not distinct from its agents for purposes of RICO. But as the Third Circuit has held, a corporation can be liable under Section 1962(c) “if it engages in racketeering activity as a ‘person’ in another distinct ‘enterprise[.]’ ” Jaguar Cars, 46 F.3d at 268 (emphasis in original). As a result, a corporation can join with its agents as part of an association-in-fact RICO enterprise. See e.g., Hanrahan v. Britt, No. CIV. A. 94-4615, 1995 WL 422840, at *5-7 (E.D. Pa. July 11, 1995). Here, Wal-Mart’s association with other separate entities - the contractors - was an essential element of the scheme.
Wal-Mart’s reliance on the Seventh Circuit’s decision in Baker v. IBP, 357 F.3d 685, 691 (7th Cir. 2004), to support its notion that the enterprise alleged in the SAC is not distinct from Wal-Mart itself is misplaced. In Baker, where an employer was alleged to have created a criminal enterprise with immigrant aid associations, the Seventh Circuit found that the “nub of the complaint is that IBP operates itself unlawfully,” in that IBP was the sole alleged employer of the undocumented immigrant workers. Baker, 357 F.3d at 691 (emphasis in original). In this connection, the court noted that the entire undocumented immigrant labor scheme involved in Baker was perpetrated by IBP. It was IBP “that supposedly hire[d], harbor[ed], and pa[id] the unlawful workers, for the purpose of reducing its payroll.” Id. at 691. Thus the court found there was no distinction between IBP and the alleged enterprise. Id. at 692.
Here, the essence of the scheme is that Wal-Mart chose to do what IBP avoided: it relied on contractors to provide labor and
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act as the employer of the janitors. See SAC ¶¶42, 47, 51 56, 57, 59. The contractors hire, pay, and in multiple instances harbor, transport and encourage the undocumented labor provided to Wal-Mart. SAC ¶¶47, 48, 51, 55-58, 67. Wal-Mart used separate contractors to employ undocumented workers as a shield to avoid the scheme’s detection by law enforcement. See, e.g., SAC¶¶3, 44, 47, 52, 59, 62. Far from operating itself unlawfully, Wal-Mart relied on the contractors to provide the undocumented labor.39
Courts of Appeal in the Second, Ninth and Eleventh Circuits have found that association-in-fact enterprises comprised of an employer and labor contractors properly state a distinct association in fact RICO enterprise. See Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1166 (9th Cir. 2002); Williams v. Mohawk Industries, Inc., 411 F.3d 1252 (11th Cir. 2005). Wal-Mart simply ignores this authority which dooms its distinctiveness argument.
In Commercial Cleaning Services, L.L.C. v. Colin, 271 F.3d 374, 378-79 (2d Cir. 2001), the Second Circuit upheld the district court’s denial of defendant’s motion to dismiss RICO claims where plaintiffs alleged an illegal immigrant hiring scheme was operated by an association-in-fact-enterprise comprised of a commercial janitorial services provider, and employment placement services, labor contractors and newspapers in which defendant advertised for laborers. Id. at 379. Similarly, in Mendoza, 301 F.3d at 1167, the Ninth Circuit reversed the district court’s dismissal of plaintiffs’ RICO claims where plaintiff alleged an association-in-fact enterprise comprised of the employer and an employment agency which supplied defendant with undocumented migrant labor. There, as here, plaintiffs alleged that the employer used the separate contractor as a “front company” to perpetrate the scheme with the hope that it would be shielded from law enforcement detection. Id. at 1167. Noting that defendant and its employment agency were “separate compan[ies],” the court found the employer distinct from the alleged enterprise. 301 F.3d at 1167.
And in Williams, plaintiffs alleged an association-in-fact enterprise comprised of defendant Mohawk, a large carpet and rug manufacturer, and the employment recruiters which supplied Mohawk with undocumented migrant labor. Williams, 411 F.3d at 1254. Mohawk also challenged the alleged enterprise on distinctiveness grounds on motion under Rule 12. Id. at 1258. The court rejected Mohawk’s argument, noting just that Mohawk and its employment recruiters were “distinct entities” engaged in a conspiracy to bring illegal workers into the United States for Mohawk’s benefit. Id.
Because a corporation can be liable under Section 1962(c) “if it engages in racketeering activity as a ‘person’ in another distinct ‘enterprise,’ ” Jaguar Cars, 46 F.3d at 268 (emphasis in original), there is no basis to dismiss Count I of the SAC on distinctiveness grounds.
2. Wal-Mart and Its Contractors Share a Common Purpose
Switching tacks, Wal-Mart also argues that it and its contractors do not share a common purpose sufficient to make out an association-in-fact enterprise. Mot. at 35-36. Wal-Mart cites to no Third Circuit precedent in support of its argument that entities making up an enterprise must have a single shared purpose but, even assuming, arguendo, that there were such a requirement, Wal-Mart just ignores those portions of the SAC which make it clear that both it and the contractors shared the mutual goal of profiting off the labor of the undocumented janitors.40
Here, again Wal-Mart mistakenly relies on the Seventh Circuit’s decision in Baker where the association-in-fact was made up of the employer of undocumented labor, recruiters of migrant workers, and immigrant-related social service agencies. The Seventh Circuit found that these entities could not form a sufficient association-in-fact enterprise because the employer had fundamentally different aims and goals from the other entities involved in the scheme. The immigrant-related social service agency sought to assist immigrants, while IBP sought to exploit them by employing them illegally, and compensating them less than mandated by law. Baker, 357 F.3d at 687, 691. Here, the contractors and Wal-Mart share the same purpose profiting from undocumented labor.
The Eleventh Circuit’s decision in Williams involves analysis of an enterprise far closer to that involved here. There, plaintiffs alleged that the participants in the enterprise (a carpet manufacturer and its employment recruiters) shared “the common purpose of obtaining illegal workers for employment at Mohawk” and that “[t]he acts of racketeering activity committed by Mohawk have the same or similar objective: the reduction of wages paid to Mohawk’s hourly workforce.” Mohawk, 411 F.2d at 1258.41 The court found a common purpose because “[w]hat is clear from the complaint is that each
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member of the enterprise is allegedly reaping a large economic benefit from Mohawk’s employment of illegal workers.” Mohawk, 411 F.2d at 1258. The same is true here.42
B. Wal-Mart Has Participated in the Affairs of the Enterprise Through a Pattern of Racketeering
1. Wal-Mart Directs the Affairs of the Enterprise
Section 1962(c) makes it unlawful for one to “conduct or participate, directly or indirectly, in the conduct of [an] enterprise’s affairs through a pattern of racketeering activity....” 18 U.S.C. §1962(c). In Reves v. Ernst & Young, 507 U.S. 170, 179 (1993), the Supreme Court held that: In order to ‘participate, directly or indirectly, in the conduct of such enterprise’s affairs,’ one must have some part in directing those affairs. Of course, the word ‘participate’ makes clear that RICO liability is not limited to those with primary responsibility for the enterprise’s affairs, just as the phrase ‘directly or indirectly’ makes clear that RICO liability is not limited to those with a formal position in the enterprise, but some part in directing the enterprise’s affairs is required.
(footnote omitted). Reves involved the issue of whether an outsider to the alleged enterprise - an accounting firm retained by the corporate enterprise - which prepared audit reports overstating the worth of the company could be said to participate in the affairs of its client. Reves, 507 U.S. at 174-75; see also PricewaterhotseCoopers, 102 F.Supp.2d at 262-63. The “operation or management” inquiry is thus designed to ensure that RICO does not reach “complete outsiders” who may assist the enterprise’s affairs but who take no part in the conduct of the enterprise. See PricewaterhouseCoopers LLP, 102 F.Supp.2d at 262-63; see also Jaguar Cars, 46 F.3d at 265-66.
As the Third Circuit has held, RICO liability extends to “those ‘plainly integral to carrying out’ the enterprise’s activities.” United States v. Parise, 159 F.3d 790, 796 (3d Cir. 1998). The Reves “operation or management” standard requires that a defendant have a role in directing the enterprise’s affairs. The allegations of the SAC support the inference that far from being a peripheral player, Wal-Mart was the kingpin of the enterprise, as it directed its affairs. See e.g., United States v. Darden, 70 F.3d 1507, 1516, 1542-43 (8th Cir. 1995); United States v. Wong, 40 F.3d 1347, 1373-75 (2d Cir. 1994); United States v. Oreto, 37 F.3d 739, 743, 750-51 (1st Cir. 1994); United States v. Grubb, 11 F.3d 426, 438-39 (4th Cir. 1993).43
The SAC alleges the following specific instances of Wal-Mart’s participation in the affairs of the enterprise. Wal-Mart: (1) established the enterprise by directing maintenance contractors to set up shell corporations in order to more effectively provide Wal-Mart with undocumented labor and shield the scheme from detection; (2) selected participants in the scheme by determining which contractors to use; (3) made routine and knowing use of undocumented labor; (4) supported the existence of the scheme by making payments to the shell companies for the undocumented labor from Wal-Mart’s headquarters; (4) directed the standards of contractor performance; (5) switched shell contractors and replaced crews following federal raids of Wal-Mart stores; and (6) rejected contractors’ offers to supply Wal-Mart with documented workers. SAC ¶¶44, 47, 48, 52, 62, 63, 67, 94.
As explicitly alleged in the SAC, the enterprise was directed by Divisional Vice Presidents within the Wal-Mart Stores Division with responsibility for in-store cleaning and procurement of services. SAC ¶44. Senior-level Wal-Mart executive Leroy Schuetz directed maintenance contractors to structure their business operations using multiple shell corporations to shield the employment of undocumented migrants from law enforcement detection. SAC ¶¶45, 47. Far from failing “to describe how Wal-Mart directed the alleged enterprise’s unlawful conduct,” Mot. at 36, plaintiffs specifically allege that during a conversation with Christopher Walters, the principle of various Wal-Mart maintenance providers, Schuetz threatened to end Wal-Mart’s contract with Walters unless Walters formed and maintained different shell corporations to provide services to Wal-Mart. SAC ¶47; see also SAC ¶¶55, 56 (alleging same direction given to other contractors). Walters, of course, agreed, SAC ¶51, and Wal-Mart thereafter paid tens of millions of dollars to Walters’ various shell companies to further the scheme. SAC ¶¶94, 95.
Wal-Mart managed the scheme through, among others, Schuetz and Steven Berschy, a Wal-Mart Divisional Vice President in charge of procurement for the Wal-Mart Stores Division. These senior Wal-Mart officials functioned in a supervisory capacity acting directly or through subordinate Regional and District management to manage and control the scheme. SAC
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¶¶47, 52. By at least 1999, Wal-Mart’s Chief Executive Officer David Glass was aware of the scheme and did nothing to curtail it. SAC ¶49.
These allegations, pleaded without the benefit of any formal discovery, go far beyond what is necessary under the lenient 12(b)(6) standard. See Williams, 411 F.3d at 1258-59 (holding that allegation that “[defendant] participates in the operation and management of the affairs of the enterprise,” which included “some direction over” the defendant’s supplier of undocumented labor, was sufficient to allege that the defendant was engaged in the operation or management of the enterprise).44
Wal-Mart argues that the complaint does not allege that Wal-Mart directed the commission of the predicate acts and that this means the requirements of Reves are not met. See Mot. at 38. But Reves requires only that Wal-Mart “have some part in directing those affairs” because “RICO liability is not limited to those with primary responsibility for the enterprise’s affairs.” Reves, 507 U.S. at 179. Here, plaintiffs allege that Wal-Mart directed its contractors to operate through shell companies and that this was done with the knowledge and intent that the contractors would continue to unlawfully encourage aliens to reside in the United States, transport them within the United States to work at various Wal-Mart stores and harbor them. SAC ¶75. Thus, plaintiffs clearly alleged that Wal-Mart has “some part in,” Reves, 507 U.S. at 179, the commission of multiple predicate acts by the contractors.
Moreover, the SAC alleges that Wal-Mart itself engaged in systematic money laundering activities over multiple years through financial transactions amounting to tens of millions of dollars through the very shell corporations it directed the contractors to establish knowing full well that those transactions involved the proceeds of the contractors’ immigration crimes. SAC ¶¶52, 57, 77, 85, 95, 100.45
In sum, because RICO liability is not limited “to those with primary responsibility for the enterprise’s affairs,” so long as a defendant played “some part in directing the enterprise’s affairs,” Reves, 494 U.S. at 179, Wal-Mart’s status as the sole source of lucrative maintenance contracts, its evident control over the terms of those arrangements, its direction to contractors to set up shell corporations to shield the enterprise from detection, and its sustained profit from the systematic use of undocumented immigrant labor in its stores, suffice to allege that it participated in the conduct of the enterprise’s affairs.
C. Wal-Mart’s Commission of the Predicate Acts
1. Money Laundering
To plead money laundering, a plaintiff must allege that (1) the defendant conducted or attempted to conduct a financial transaction, (2) which the defendant then knew involved the proceeds of unlawful activity, (3) with the intent to promote or further unlawful activity. See United States v. Caruso, 948 F.Supp. 382, 390 (D.N.J. 1996). So long as plaintiffs allege that Wal-Mart transferred money “knowing that the funds involved had been earned through a pattern of racketeering activity” and “with the intent to promote the carrying on of their racketeering activity,” that is sufficient. Tilli v. Aamco Transmissions, Inc. No. 91-1058, 1992 WL 38405, at *3 n.3 (E.D. Pa. Feb. 24, 1992); see also O’Keefe v. Aamco Transmissions, Inc. No. 91-2506, 1992 WL 38441, at *1 n.3 (E.D. Pa. Feb. 24, 1992). Here, plaintiffs plainly allege that Wal-Mart transferred funds that it knew represented the proceeds of its contractors’ immigration crimes with the intent to promote or further that activity. Moreover, because Wal-Mart insisted - and its contractors agreed - to operate through corporate shells, it knew and intended that those contractors would further launder the proceeds of the scheme among themselves.
The SAC outlines these inter-related financial transactions in detail.46 Plaintiffs allege that Wal-Mart paid the various front companies with checks drawn on Wal-Mart’s bank located in Bentonville, Arkansas, with the knowledge that the monies paid constituted the proceeds of the illegal hiring, encouraging, harboring and transporting of undocumented migrant labor. SAC ¶58. Specifically, Wal-Mart paid in excess of $77 million to corporate shells established by Walters between 1999 and 2001 alone. SAC ¶95. Specifically, Wal-Mart paid $26 million to IMC, $14.5 million to Comet Floor Care, $21 million to Ironman Maintenance, $10 million to Precision Cleaning Services, $1.8 million to Champion Floor Care Services, $3.5 million to National Cleaning Management and $12.5 million to Pinnacle for cleaning services. SAC ¶95. These transactions are itemized in Exhibit E to the SAC at p. 100.
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These allegations clearly state a violation of Section 1956. See Choimbol v. Fairfield Resorts, Inc., No. Civ. A. 2:05 CV463, 2006 WL 521763 (E.D. Va. Mar. 2, 2006). In Choimbol, the court upheld plaintiffs’ money laundering allegations in a materially identical scheme. There, Fairfield Resorts, a hotel chain, conspired with employment recruiters and subcontractors who provided Fairfield with undocumented migrant labor who, as here, were denied FLSA mandated wages. Id. at * 1-2. Based on allegations that Fairfield’s employment recruiter accepted payment from Fairfield for undocumented migrant labor and then paid its subcontractors from those proceeds with the intent to promote the scheme, the court found plaintiffs had properly stated RICO money laundering predicates against Fairfield. Id. at *2-6.
Wal-Mart’s multiple payments to the contractors through shell corporations all knowingly involved the proceeds of illegal activity. As pleaded in the SAC, Wal-Mart’s payments to the shell corporations for maintenance services provided by undocumented workers constituted the proceeds of the illegal transporting, harboring or encouraging of migrants to allow them to labor at Wal-Mart stores. SAC ¶¶85, 94. Wal-Mart’s contention that plaintiffs failed to allege how payments made to contractors constitute the “proceeds of illegal activity,” see Mot. at 23, thus ignores the plain allegations in the SAC, which mirror those charged against Wal-Mart contractors by the federal government. See SAC ¶85; see also SAC Ex. I pp.6-7.47
The SAC further alleges that each of those payments were made in furtherance of the scheme. The payments covered not only the janitors’ (sub-minima) wages but the overhead and profit to the contractors. SAC ¶¶77, 112. Wal-Mart’s notion, Mot. at 23, that plaintiffs failed to allege that Wal-Mart acted in furtherance of the alleged scheme, is fanciful. Wal-Mart’s payment through corporate shells it insisted its contractors create after massive immigration raids in 1997 minimized the risk of effective law enforcement action by allowing Wal-Mart to switch corporate shells after various raids. SAC ¶95. As outlined in the SAC, despite repeated law enforcement raids, Wal-Mart continued dealings with the contractors, switching companies and crews in response to law enforcement efforts. SAC ¶¶77, 100. Because plaintiffs clearly allege that Wal-Mart made multiple financial transactions involving the proceeds of the immigration crimes committed by its contractors, which it knew and intended would further the contractors’ illegal practices, plaintiffs have properly pleaded multiple counts of money laundering sufficient alone to support Count I of the SAC.
Further, plaintiffs have sufficiently alleged that Wal-Mart conspired with the contractors to commit money laundering. To plead conspiracy to launder money, a plaintiff must allege (1) an agreement between two or more people to commit money laundering, (2) an overt act taken to further the purpose of the agreement, and (3) defendant joined the agreement knowing its purpose and with the intent to further the illegal purpose. See e.g., United States v. Conley, 37 F.3d 970, 976 (3d Cir. 1994). Wal-Mart knew and intended (because of the inter-relationship of the shell companies) that payments to the various corporate shells would necessarily result in multiple financial transactions between the shell corporations and their sub-contractors and principals. SAC ¶58. As outlined in Exhibit E to the SAC at pp. 100-105, Wal-Mart’s payments to the contractors were in furtherance of the conspiracy to money launder as they engendered multiple transactions among the contractors and with subcontractors.
Specifically, during the period 1999-2001, the shell corporations, many of which maintained accounts at Normandy Bank in St. Louis, conducted multiple transfers of funds between and among the companies which received payments from Wal-Mart (as well as with other Walters-controlled companies and subcontractors). SAC ¶95; SAC Ex. E, pp. 98-113. Specifically, Walters-controlled companies also transferred $3.5 million dollars by check, wire transfer and credit memo to DJR, Romano’s company that provided undocumented migrant cleaning crews to Wal-Mart through Truszkowski, who pleaded guilty to money laundering of the proceeds of this scheme. SAC ¶95; SAC Ex. E, pp. 101-02. The exact amounts of these fraudulent transfers are set out in detail on pages 101 and 102 of the Forfeiture Complaint, attached as Exhibit E to the SAC.
Wal-Mart would have this Court discount the money laundering allegations by drawing a different interpretation from Scheutz’s direction to Walters, arguing that the SAC “reflects a deliberate misreading” of the affidavit of the federal law enforcement agent that is Exhibit A to the SAC. Mot. at 22.48 But that, at best, confuses what the plaintiffs have to plead at the outset with what they will be required to prove after discovery. See Seville Indus. Machinery, 742 F.2d at 790. The allegations of the SAC are that senior Wal-Mart management directed Wal-Mart’s leading maintenance contractor to set up shell corporations knowing that those contractors would engage in multiple and systematic immigration crimes and that WalMart then paid those contractors tens of millions of dollars as the proceeds of those crimes and to support and further the scheme. That is all that must be pleaded to establish money laundering by Wal-Mart.
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2. The Immigration Predicates
a. Aiding and Abetting Immigration Crimes of the Contractors
Wal-Mart used separate contractors to supply the undocumented labor to avoid having to verify the immigration status of the janitors itself. (Indeed, before it directed the contractors to set up shell companies, Wal-Mart discontinued its former practice of verifying the immigration status of contractor employees. SAC ¶47). The SAC is replete with allegations that Wal-Mart contractors harbored illegal aliens under 8 U.S.C. §1324(a)(1)(A)(iii),49 transported illegal aliens under 8 U.S.C. §1324(a)(1)(A)(ii);50 encouraged illegal aliens to reside in the United States under 8 U.S.C. §1324(a)(1)(A)(iv)51 and engaged in conspiracies among themselves to do so. SAC ¶¶78-92.
Specifically, a number of Walters-controlled companies that supplied janitorial labor to Wal-Mart admitted to criminal conspiracies to transport and encourage illegal aliens to reside in the United States. SAC ¶80. Walters’ subcontractors CMS of Queensbury, DJR and Truszkowski themselves pleaded guilty to similar immigration conspiracies, and Walters subcontractor Miroslaw Dryjack pleaded guilty to bringing in or harboring undocumented immigrants. SAC ¶¶81, 82, 83.
The SAC also alleges that Wal-Mart contractors encouraged undocumented janitors to enter the United States (with the promise of employment at Wal-Mart), SAC ¶¶87-88, harbored and transported undocumented janitors once here by working them in crews with relatives, providing them with communal lodging and false documentation and then transporting them across the United States as part of various work crews for Wal-Mart. SAC ¶¶89-92, 103-4, 113-14, 115-16.52
Wal-Mart knew and intended that its contractors would systematically engage in immigration crimes to supply it with undocumented janitorial labor. SAC ¶3, 47, 58, 63, 75. Plaintiffs allege that Wal-Mart aided and abetted, within the meaning of 8 U.S.C. § 1324(a)(1)(A)(v)(II), the commission of the immigration predicates alleged in the complaint.53 Specifically, the SAC alleges that Wal-Mart undertook the following affirmative steps to aid the criminal venture of the contractors and subcontractors. First, by insisting that contractors operate through multiple corporate shells and then financing the unlawful activity through payment to the multiple contractors, Wal-Mart knowingly associated itself with the contractors’ scheme, gave it the necessary support to succeed, and dulled the effectiveness of law enforcement efforts. SAC ¶112. The millions of dollars Wal-Mart paid to contractors underwrote not only the labor of the janitors but the contractors’ overhead costs, making the contractors’ crimes possible and helping to bring them about. SAC ¶112.54 Aiding and abetting is “a term of breadth” that “comprehends all assistance rendered by words, acts, encouragement, support, or presence.” Reves, 507 U.S. at 178. WalMart clearly aided and abetted the contractors’ commission of the immigration predicates by rendering assistance through its directions and its financial support of the scheme.
Indeed, as is outlined in the SAC, following raids at Wal-Mart stores, Wal-Mart managers requested maintenance contractors to immediately provide replacement crews. SAC ¶113-16. The managers knew that in response the contractors would, and did, cause undocumented migrants to be transported across state lines to the Wal-Mart stores. SAC ¶113-14. This affirmative conduct helped bring about the transporting offenses and furthered the presence of the janitors in the United States. See United States v. Barajas-Chavez, 162 F.3d 1285, 1289-90 (10th Cir. 1999) (defendant found guilty of transporting where he attempted to transport undocumented migrants from Arizona to Colorado so the aliens could look for work, noting that “[i]f their efforts had been successful, the benefits from finding employment undoubtedly would have assisted [the aliens] in remaining in the United States”); see also United States v. Hernandez, 327 F.3d 1110, 1112 (10th Cir. 2003) (same).
Taking all the foregoing as true as required by Rule 12(b)(6), the SAC adequately pleads that Wal-Mart knew of the systematic violation of immigration law by its contractors and that Wal-Mart supported and colluded with its contractors in these violations. That alone is sufficient to state a civil RICO claim based on aiding and abetting multiple immigration violations by the contractors and sub-contractors.
b. Conspiracy to commit immigration predicates
The allegations above also support an inference that Wal-Mart conspired with the contractors to harbor, transport, and encourage aliens in violation of 8 U.S.C. § 1324(a)(1)(A)(v)(I). To make out this predicate, plaintiff must show: (1) an agreement between two or more persons to commit the crime, (2) an overt act in furtherance of the agreement by one of the
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conspirators, and (3) that the conspirator knew of, intended to join and participated in the conspiracy. See e.g., United States v. Avila-Dominguez, 610 F.2d 1266, 1271 (5th Cir. 1980).
The SAC specifically alleges that Wal-Mart, through Schuetz, agreed with its contractors that the contractors would commit immigration predicates in order to supply Wal-Mart with cheap labor. SAC ¶47. Schuetz, in directing Walters to set up various shell corporations, SAC ¶47, knew and intended that the contractors and their sub-contractors would (and, indeed, did) harbor, transport and encourage undocumented immigrant janitors. SAC ¶¶100-07. Indeed, Scheutz directed Walters to set up the separate companies after federal authorities raided Wal-Mart stores in 1997 and only after Wal-Mart discontinued its practice of verifying the immigration status of contractors’ employees. SAC ¶47. Wal-Mart then furthered the conspiracy by mailing checks payable to multiple shell corporations as profit for the contractors and compensation for the work performed by the undocumented migrant cleaning crews and by using Walters’ firms interchangeably, switching contractors following law enforcement actions in order to continue the scheme. SAC ¶¶100, 107; cf. SAC Ex. I, ¶¶5-7.
The SAC contains ample allegations that Wal-Mart engaged in a conspiracy with its maintenance contractors to commit multiple immigration crimes.
c. Wal-Mart’s Liability for Substantive Immigration Offenses
(i) Harboring
As noted above, the essence of harboring is that the defendant knowingly “concealed, harbored, or shielded” an undocumented alien from detection. In ruling on Wal-Mart’s initial motion to dismiss, this Court noted that to “harbor” is to give shelter or refuge to or to be the home or habitat of; to “conceal” is to prevent disclosure or recognition of or to place out of sight; and to “shield” is to protect with or as if with a shield or provide with a protective cover or shelter or to cut off from observation or hide. Zavala, 393 F. Supp.2d at 307.
In United States v. Zheng, 306 F.3d 1080, 1086 (11th Cir. 2002) (cited with approval in Zavala, 393 F. Supp.2d at 306), the Eleventh Circuit affirmed a harboring conviction noting that there was evidence that the defendant provided the undocumented aliens with housing and employment, which facilitated the aliens’ ability to remain in the United States. Similarly, in U.S. v. Lopez, 521 F.2d 437, 441 (2d Cir. 1975), the Second Circuit affirmed a harboring conviction where defendant provided housing to aliens, assisted the aliens in obtaining employment and transported them to and from their places of employment. The court held that these activities were meant to “facilitate the continued unlawful presence of the aliens in the US, which amounts to harboring.” Id. at 441. Thus “providing housing and employment may constitute ‘harboring’ ” and that an employer’s “provis[ion] [of the] back room of the store as a residence” may also constitute harboring. Zavala, 393 F. Supp.2d at 307; see also United States v. Singh, 261 F.3d 530, 532-33 (5th Cir. 2001).
In the SAC plaintiffs allege, with respect to a crew of four Bulgarian janitors who worked at a Wal-Mart store in Kansas City, Missouri, in 2001, that Wal-Mart permitted “the undocumented aliens to sleep in a back room in the store and to keep their personal belongings there knowing (or acting in reckless disregard of the fact) that they were undocumented aliens.” SAC ¶110. That allegation alone sufficiently pleads multiple counts of harboring. See Zheng, 306 F.3d at 1086.
In response Wal-Mart argues that the SAC only supports an inference that these janitors did nothing more than “nap” in the store. Mot. at 14. But, again, that is an argument about what the evidence is, not about what has been pleaded. The SAC alleges that Wal-Mart knowingly harbored at least that crew of four janitors - that alone is sufficient to make Wal-Mart a proper RICO defendant under Count I.
Moreover, after the SAC was filed, plaintiffs learned that on at least one occasion Walters’ company IMC reached an arrangement where Wal-Mart directly paid one of IMC’s subcontractors to house a crew. See Linsey Decl. Ex. B. IMC billed Wal-Mart for crew accommodations when the particular store (store 2472 in Winston-Salem, NC) changed its service start date because, as recited on IMC’s records, the “Sub agreed to keep crew there * ready to go if store paid apt. lease payment.”55
Plaintiffs further allege that Wal-Mart made a regular and systematic practice of locking janitors whom it knew were 17

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undocumented in its stores overnight. SAC ¶109. By locking the janitors into the store at night, Wal-Mart “limited the ability of federal law enforcement authorities (and others) to detect the janitors while they were at work,” which in turn helped to facilitate the janitors’ continued employment and presence in the United States. See SAC ¶109 (allegations made under section entitled “harboring”). Wal-Mart systematically committed additional multiple acts of harboring by locking undocumented janitors into its stores at night. SAC ¶109.
These allegations are sufficient to defeat a motion to dismiss. See Mendoza, 301 F.3d at 1168 (noting the “generous notice pleading standard,” the court held complaint sufficient to survive a motion to dismiss where the plaintiff alleged “that defendants had knowledge of illegal harboring ...”).
3. Involuntary Servitude
The complaint sets out predicate acts of involuntary servitude under 18 U.S.C. § 1584 sufficient to withstand Wal-Mart’s motion to dismiss. To make out a claim of involuntary servitude a plaintiff must allege that “the victim [was] forced to work for the defendant by the use or threat of physical restraint or physical injury, or by the use of coercion through law or the legal process.” United States v. Kozminski, 487 U.S. 931, 952 (1988) (emphasis added). In this connection, “other means of coercion ... or of the victim’s special vulnerabilities” should be considered. Id.; see also United States v. Veerapol, 312 F.3d 1128, 1132 (9th Cir. 2002); United States v. Alzanki, 54 F.3d 994, 1004-5 (1st Cir. 1995) (upholding conviction for involuntary servitude involving threatened deportation of migrant); Kimes v. United States, 939 F.2d 776, 778 (9th Cir. 1991). The Supreme Court specifically noted in Kozminski that “threatening ... an immigrant with deportation could constitute the threat of legal coercion that induces involuntary servitude, even though such a threat made to a[] ... citizen ... would be too implausible to produce involuntary servitude.” Kozminski, 487 U.S. at 948.
In ruling on Wal-Mart’s initial motion to dismiss, this Court dismissed plaintiffs’ allegations of involuntary servitude, finding that plaintiffs failed to specifically allege the abuse suffered by plaintiffs at the hands of Wal-Mart’s maintenance contractors. Zavala, 393 F.Supp.2d at 311. The SAC alleges that, as set out in the government’s Forfeiture Action, SAC Ex. E, Wal-Mart contractors physically threatened and beat migrant janitors who worked at Wal-Mart. SAC ¶¶118, 121, Exhibit E (Forfeiture Action) pp. 43, 47.
In urging that there is no basis to the involuntary servitude predicate, Wal-Mart attempts to defend its practice of locking janitors into its stores during their shifts, and ignores that threats of deportation can amount to coercion under Kozminski. This failure is fatal to Wal-Mart’s argument. Plaintiffs are undocumented migrants, speak little or no English and have little or no “money or mobility to escape work at Wal-Mart.” SAC ¶42. In SAC ¶120, plaintiffs allege that class members were threatened with “deportation or other adverse legal action.” This is based on specific incidents set out elsewhere, e.g., threats of deportation by Wal-Mart’s New Jersey contractor. Id. The same threat was made by a Czech contractor known at a Wal-Mart store in Bristol, Connecticut, to plaintiffs Zednek and Jaros. Id. at ¶120; see also SAC Exhibit E (Forfeiture Action) at p. 47.
The SAC also alleges that plaintiffs were also physically coerced or threatened with physical coercion causing them to reasonably believe that, given their vulnerable status, they had no choice to avoid continued service as janitors in Wal-Mart stores. SAC ¶118; Exhibit E (Forfeiture Action) pp. 43, 47 (Wal-Mart contractors physically threatened and beat migrant janitors who worked at Wal-Mart). In this connection janitors who complained that they were not being paid were threatened with eviction proceedings and ultimately evicted from their homes. SAC ¶91. All of this, taken with the widespread practice of intentionally locking these vulnerable workers into its stores during their shifts, SAC ¶¶109, 118; see also SAC ¶¶8-16, 21-22, 30 (named plaintiffs confined to stores during nocturnal working hours), adequately pleads involuntary servitude by Wal-Mart and its contractors of plaintiff class members.
D. The Activities of the Enterprise Harmed Plaintiffs
1. The Racketeering Activity Proximately Caused Plaintiffs’ Harm
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Section 1964(c) provides a cause of action for a “person injured in his business or property by reason of a violation of Section 1962.” 18 U.S.C. § 1964(c). If the racketeering activity can be said to have proximately caused an economic harm, the injured party may maintain an action against a RICO defendant. See Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 520 (3d Cir. 1998); see generally Holmes v. Securities Investor Protection Corp, 503 U.S. 258 (1992). In the RICO context, the Supreme Court has held that “[a]t the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support the claim.” Scheidler, 510 U.S. at 256. Here plaintiffs easily exceed this lenient standard as the SAC alleges far more than simple “general factual” allegations of harm resulting from the conduct of the enterprise. See e.g., SAC ¶121.
As noted in Brokerage Concepts, proximate cause under RICO draws on the common law of torts and, under Holmes, is primarily focused on the directness of the relationship between the plaintiff’s injury and the defendant’s conduct. Brokerage Concepts, 140 F.3d at 520. Thus, racketeering activity is said to have proximately caused an injury if the conduct is a “substantial factor in the sequence of responsible causation, and if the injury is reasonably foreseeable or anticipated as a natural consequence.” Rodriguez v. McKinney, 878 F.Supp. 744, 747 (E.D. Pa. 1995).
Here, the economic harm to the plaintiffs was a foreseeable and intended result of the various predicate acts of racketeering. In 1996, RICO was amended to include immigration crimes as predicate acts of racketeering. Pub L. 104-132 §433 (1996). Thus, “Congress contemplated the enforcement of the immigration laws through [civil RICO actions.]” Mendoza, 301 F.3d at 1170. The reason employers violate Section 1324(a) is “to take advantage of [undocumented immigrants’] diminished bargaining position, so as to employ a cheaper labor force and compete unfairly on the basis of lower labor costs.” Colin, 271 F.3d at 383; cf. SAC ¶¶41-42. Plaintiffs suffered direct economic harm - among other things, deprivation of the FLSAmandated overtime premiums and in some cases minimum wage - as a result of the violation of the immigration predicates. Wal-Mart and the contractors it conspired with could - and did - take advantage of their immigration status to exploit them economically.
The four courts of appeal to have considered the question of proximate causation in the context of a RICO enterprise involved in immigration crimes have all concluded that plaintiffs who allege economic harm due to the depressed labor costs made possible by use of undocumented labor may maintain RICO claims. In Colin, the Second Circuit reversed the trial court’s dismissal of the case under the Holmes proximate cause standard. There plaintiffs were cleaning contractors who alleged that they lost contracts because defendant’s “illegal hiring practices enabled it to lower its variable costs and thereby underbid competing firms.” Colin, 271 F.3d at 378. The court of appeals held that while there may be factual disputes over whether plaintiffs lost business to defendants because of the immigration predicates or some other reason, they very well “may show that they lost contracts directly because of the cost savings defendant realized through its scheme to employ illegal workers.” Id. at 382. In this connection the Second Circuit rejected the defendant’s argument - advanced by Wal-Mart here (Mot. 25) - that plaintiffs’ injury was caused by low wages paid not their immigration status:
Of course paying workers less than the prevailing wage and failing to withhold payroll taxes are not RICO predicate acts. Nonetheless, the purpose of the alleged violation of 8 U.S.C. § 1324(a), the hiring of illegal alien workers, was to take advantage of their diminished bargaining position ... [and] compete unfairly on the basis of [lower] labor costs.
Colin, 271 F.3d at 383.
The Ninth Circuit followed Colin in Mendoza. There plaintiffs were documented workers employed by fruitpackers who alleged that their employers “leveraged the hiring of undocumented immigrants in order to depress the[ir] wages.” Mendoza, 301 F.3d at 1166. The court rejected the notion that employees whose wages are depressed as a result of the hiring of undocumented immigrants presented only a passed-on injury of the sort involved in Holmes. Mendoza, 301 F.3d at 1170. The Ninth Circuit held that that documented workers had RICO standing based on the immigration predicates in part because the undocumented immigrants could not be counted on to bring suit themselves. Id.
The Eleventh Circuit followed both Colin and Mendoza in Williams, an action similarly brought by documented workers alleging that they wage rates were depressed through the hiring of undocumented labor. There, too, the court held that defendant’s “widespread scheme of hiring and harboring of illegal workers” resulted in depressed wages sufficient to make
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out proximate causation under Holmes. Williams, 411 F.3d at 1262. If anything, plaintiffs’ harm there was more remote from the immigration predicates than plaintiffs allege here - participants in Wal-Mart’s enterprise committed the predicate acts of racketeering so that they could directly exploit the janitors themselves.
Finally, the Sixth Circuit reversed a trial court dismissal of a similar RICO claim in Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004). There, plaintiffs alleged that wages paid at a chicken processing plan were depressed by defendant’s systematic use of undocumented migrant labor. The court, noting the Ninth Circuit’s holding in Mendoza, held that plaintiffs had alleged sufficient facts to avoid dismissal, noting that although the facts could be disputed, that could not be grounds for dismissal as a threshold matter. See id. at 619. The Sixth Circuit reached that conclusion despite the fact that the employees there enjoyed union representation which could be expected to raise pay above market levels. Id.
The RICO theory advanced here has been recognized most recently in Choimbol. There, undocumented janitors alleged that they were proximately harmed by an association-in-fact RICO enterprise comprised of resort hotels (where they worked) and providers of undocumented immigrant labor. Choimbol, 2006 WL §21763, at * 1-2. As here, the janitors in Choimbol alleged that the enterprise harmed them by paying them wages below the FLSA minima, through commission of wire and mail fraud and money laundering predicate acts. Id. at *4-8. The district court rejected arguments that the janitor’s economic harm was too remote from the predicates alleged there denying the employer’s motion to dismiss.
This authority is fatal to Wal-Mart’s proximate cause argument. Here, plaintiffs were directly harmed by the immigration predicates because Wal-Mart could obtain janitorial labor at rates far below legally mandated levels only because it exploited the irregular immigration status of the janitors. Wal-Mart’s contention that the immigration offenses were, “at most, remote links in a causal chain,” Mot. at 26, that denied plaintiffs minimum wage and overtime must be rejected: participants in the enterprise committed the racketeering acts just so they could economically exploit plaintiffs. Under Wal-Mart’s theory, it is difficult to imagine what party would have standing to bring a civil RICO action based on criminal immigration violations. Wal-Mart and its contractors violated the immigration laws to gain access to a vulnerable labor pool. No more direct injury could be imagined from these RICO predicates.
E. Wal-Mart’s Attempt to Rely on an in Pari Delicto Defense Fails
Wal-Mart’s argument that plaintiffs and putative class members lack RICO standing because they worked in the United States illegally and thus their conduct “broke any causal connection” between Wal-Mart’s exploitative practices and plaintiffs’ injuries, Mot. p. 30, is nothing more than an invitation for this Court to erect an innocent party requirement upon plaintiffs seeking RICO. That invitation should be rejected as it is contrary to the language of the statute and without support in the case law.
There is nothing in the language of RICO that suggests that only innocent plaintiffs have a cause of action. Under Section 1964(c) “[a]ny person injured in his business or property by reason of a violation of Section 1962 ...” has a claim under RICO without qualification. 18 U.S.C. § 1964(c). The Supreme Court has consistently adhered to the language of the statute in interpreting its meaning and has rejected surplus requirements imposed by the lower courts but not found in the statute itself. See Scheidler, 510 U.S. 249 (rejecting requirement that defendants’ racketeering have an economic motive); Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) (rejecting RICO injury requirement). “If the defendant engages in a pattern of racketeering activity ... and the racketeering activities injure the plaintiff in his business or property, the plaintiff has a claim under § 1964(c). There is no room in the statutory language for an additional ... requirement.” Sedima, 473 U.S. at 495.56
Contrary to Wal-Mart’s contention, Mot. at 29, the Third Circuit did not impose an innocent party requirement in Doug Grant Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d Cir. 2000). There, blackjack players skilled at card counting and corporations that operated card-counting schools sued various casinos that took counter-measures to eliminate the cardcounters advantage in blackjack. Id. at 177-78. The court sustained dismissal of plaintiffs’ claims finding that plaintiffs had failed to plead the commission of any predicate act by any defendant because the counter-measures complained of were entirely legal. Id. at 187. The court further noted in dicta that plaintiffs brought the harm they complained of on themselves because their asserted losses were not caused by any illegal act of any defendant but as the result of their knowing decision to gamble. Id. at 188. As demonstrated above, the commission of the immigration predicates was the basis of plaintiffs’ injuries here. At base, Wal-Mart’s contention is nothing more than the Dickensian notion, not supported by any case law, that
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plaintiffs should not be able to recover economic damages because they chose to work as janitors at Wal-Mart,57 despite the exploitative conditions, a position this Court implicitly rejected in denying Wal-Mart’s motion to dismiss plaintiffs’ FLSA claims.58
In sum, the SAC contains sufficient allegations of standing; Wal-Mart’s motion to dismiss Count I should be denied.
F. Plaintiffs State A Rico Conspiracy Claim Under Section 1962(d)
Even if Wal-Mart could somehow avoid liability for itself committing multiple predicate acts of racketeering it is still a proper RICO defendant under Section 1962(d). That section provides that “[i]t shall be unlawful for any person to conspire to violate [§ 1962(c)].” 18 U.S.C. § 1962(d). A defendant may be held liable for conspiracy to violate section 1962(c) if he knowingly agrees to facilitate a scheme which includes the operation or management of a RICO enterprise. Smith v. Berg, 247 F.3d 532, 538 (3d Cir. 2001). Facilitation of the scheme includes participation in the affairs of the enterprise with the knowledge and intent that other members of the conspiracy would commit two or more predicate offenses as a part of a pattern of racketeering activity. Id. at 537. But a Section 1962(d) defendant need not agree to personally commit two predicate acts, “it suffices that [defendant] adopt the goal of furthering or facilitating the criminal endeavor.” Salinas v. United States, 522 U.S. 52, 65 (1997) (affirming conviction under 1962(d)). A violation of § 1962(c) is therefore not a prerequisite for liability under § 1962(d). Zavala, 393 F.Supp.2d at 316, (quoting Smith, 247 F.3d at 537). All that is necessary to establish liability for a RICO conspiracy is “that the conspirators share a common purpose.” Id.; see also Salinas, §22 U.S. at 65.
Here, the Court initially dismissed plaintiffs’ RICO conspiracy claim finding that (1) plaintiffs failed to allege the existence of an unlawful enterprise and (2) plaintiffs failed to allege Wal-Mart agreed with its co-conspirators to the commission of RICO predicates. Zavala, 393 F.Supp.2d at 317. The Court granted plaintiffs leave to amend their complaint, and the SAC clearly cures whatever pleading deficiencies there may have been.
First, the SAC alleges that Wal-Mart and its maintenance contractors formed an association-in-fact enterprise which was involved in a pattern of racketeering. See SAC ¶¶3, 41. Second, as shown above, supra pp. 24-34, Wal-Mart agreed with and indeed directed its maintenance contractors to commit predicate acts of money laundering and immigration violations to facilitate the scheme. See SAC ¶¶3, 41-48, 51-52, 58, 67, 74-76.
The SAC clearly alleges Wal-Mart engaged in a RICO conspiracy with its maintenance contractors. SAC ¶¶3 (“To avoid and evade responsibility under IRCA and to profit from illegal activity, Wal-Mart created an association-in-fact criminal enterprise, through which it conspired with various cleaning contractors who it knew would provide janitors to clean its stores who were not legally authorized to work in the United States.”). Plaintiffs allege in detail that Wal-Mart established the scheme, SAC ¶43, directed the scheme, SAC ¶¶43, 44, conspired with contractors to establish shell corporations to further the scheme and shield it from detection through laundering the proceeds of the scheme. SAC ¶47, conspired with contractors to violate federal immigration laws to facilitate the scheme, SAC ¶¶74, 99, and profited from the operation of the scheme, SAC ¶¶41, 121. Multiple Wal-Mart contractors have been convicted of multiple predicate immigration and other crimes based on their providing undocumented migrant janitors to Wal-Mart. SAC ¶¶80-83. Based on these allegations, it is an understatement to say that Wal-Mart adopted the goal of the enterprise - Wal-Mart created the enterprise and operated it to achieve the goal, namely profiting from the exploitation of undocumented migrant labor.
Wal-Mart does not contest that plaintiffs have sufficiently cured their RICO conspiracy pleading deficiencies. Instead, WalMart’s only attack on plaintiffs’ RICO conspiracy claim is the (incorrect) notion that plaintiffs lack standing to assert a violation of 1962(d) because, as Wal-Mart would have it, plaintiffs’ injuries flow not from commission of the predicate acts, but from violations of the FLSA, Mot. at 39. As demonstrated supra pp. 35-39, plaintiffs’ have adequately pleaded that their injuries stem from the racketeering conduct. Four courts of appeal concur.
Wal-Mart’s motion to dismiss Count II of the SAC should be denied.
CONCLUSION
21

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...

For the foregoing reasons, this Court should deny Wal-Mart’s motion to dismiss.

Footnotes

1

393 F.Supp.2d 295 (D.N.J. 2005).

2

8 U.S.C.§1324(a)(1)(A)(II).

3

393 F.Supp. 2d at 305-6.

4

Id. at 307. In this regard the Court noted that, although plaintiffs argued that the lock-ins of janitors helped to conceal them from

detection, “they actually do not allege these facts in their complaint.” Id. at 307 n. 9.

5

Id. at 308.

6

Id. at 309.

7

Id. at 315.

8

Id.

9

Id. at 316.

10

Id. at 317.

11

SAC ¶3, 41.

12

SAC ¶47.

13

SAC ¶51, 55.

14

SAC ¶3.

15

SAC ¶47.

16

SAC ¶47.

17

SAC ¶47-54.

18

SAC ¶55, 56.

19

SAC ¶51.

20

SAC ¶52.

21

SAC ¶57, 58.

22

SAC ¶95, Exhibit E at 100.

23

SAC ¶53.

24

SAC ¶75.

25

SAC ¶80 and Exhibits C and D.

22

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...

26

SAC ¶81 and Exhibit F.

27

SAC ¶82 and Exhibit G.

28

SAC ¶84.

29

SAC ¶¶84.

30

SAC ¶85.

31

SAC ¶¶87-92, 103-04.

32

SAC ¶109.

33

SAC ¶44, 110.

34

SAC ¶42, 52, 110.

35

SAC ¶112.

36

SAC ¶¶113-116.

37

SAC ¶41-42.

38

SAC ¶42, 79.

39

For these reasons, Wal-Mart’s reliance on Feinberg v. Katz, No. 99-civ-045, 2005 WL 2990633, at *7 (S.D.N.Y. Nov. 7, 2005), is

also misplaced. The Feinberg court reasoned there that because all defendants acted “within the scope of a single corporate

structure, guided by a single corporate consciousness,” there was not a sufficient distinction between the defendant and the

corporate enterprise. Id. at *7. Here, Wal-Mart and its maintenance contractors are undeniably separate corporate entities.

40

“Wal-Mart and various maintenance contractors identified in this Second Amended Complaint ... have created, engaged in and

profited from a nationwide criminal enterprise which exploits the plaintiffs and those similarly situated through wide-scale

violation of protective federal and state labor and employment laws.” SAC ¶41; see also SAC ¶42 (Wal-Mart and contractors

target and exploit migrants for mutual profit).

41

Cf. SAC ¶¶3, 40, 41, 42, 61, 67, 77.

42

That the self-interest of the enterprise’s participants may be divergent, see Mot. at 35, is immaterial to the common purpose of the

enterprise: exploiting undocumented labor for profit. See Emcore Corp. v. PricewaterhouseCoopers LLP, 102 F. Supp. 2d 237,

263-64 (D.N.J. 2000) (rejecting argument that defendants’ “inherently contradictory goals” negated enterprise participants’

common purpose); United States v. Masters, 924 F.2d 1362, 1367 (7th Cir. 1999) (noting that a RICO enterprise can have diverse

objects and goals). The enterprise’s participants all profited from the scheme. How these profits were divided (payments to

contractors, savings to Wal-Mart) is immaterial. Likewise, that Wal-Mart kept itself at a distance from the other participants to

shield itself from law enforcement detection is immaterial to a finding that the participants shared a common purpose. Cf. Mohawk,

411 F.3d at 1258.

In any event, contrary to Wal-Mart’s assertion that an enterprise cannot share a common purpose of profiting from illegal activity,

Mot. at 36, proof of an association’s “devotion to ‘making money from repeated criminal activity’ ” alone shows a common

purpose. See U.S. v. Church, 955 F.2d 688, 698 (11th Cir. 1992) citing United States v. Cagnina, 697 F.2d 915, 921 (11th Cir.

1982); see also Williams, 411 F.3d at 1258.

43

For these reasons, Wal-Mart’s reliance on Gilmore v. Berg, 820 F. Supp. 179, 183 (D.N.J. 1993) is inapposite. In Berg, the court

dismissed plaintiff’s RICO claims against an outsider defendant (an attorney providing professional services) on “operation or

management” grounds where the defendant did not engage in any conduct which ran afoul of the RICO statute. Id. at 183. The

defendant simply rendered professional services in the ordinary course of business and was not involved in any of the alleged

predicate activities of the enterprise. Id. Here, as shown below, Wal-Mart has engaged in, and indeed directed, the affairs of the

enterprise through commission of the predicate acts of money laundering and violation of immigration predicates.

23

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...

44

Indeed, the complaint in Williams, attached as Exhibit A to the Declaration of James L. Linsey dated March 20, 2006 filed

herewith, contains the conclusory allegation that “Mohawk participates in the operation and management of the affairs of the

enterprise, which exists for Mohawk’s benefit.” Linsey Decl. Exhibit A ¶78.

45

As shown above at pp. 9-12, the SAC also sets out allegations that Wal-Mart committed additional acts of racketeering in

connection with the operation of the enterprise. See SAC ¶¶74, 99 (Wal-Mart engaged in a conspiracy to violate immigration

predicates); ¶¶109, 110 (Wal-Mart harbors aliens in violation of immigration predicate); ¶¶ 111-16 (aiding and abetting the

immigration crimes of contractors).

46

Cf. Zavala, 393 F. Supp.2d at 315-16.

47

In United States v. Truszkowski, 05-cr-00454 (N.D. Ill 2005), the federal government indicted Truszkowski, a Wal-Mart

maintenance contractor, for conspiracy to encourage illegal aliens to remain in the United States through subcontracting with shell

corporations to shield the employment of undocumented migrants at Wal-Mart stores. SAC Ex. I, pp. 5-8. Truszkowski eventually

pleaded guilty to money laundering and immigration offenses. In the plea agreement, the government specifically stated that

“through and as a result of this conspiracy, Truszkowski was able to receive criminal proceeds in the form of Wal-Mart’s

payments, through an intermediate subcontractor... for the cleaning services provided ...,” and that Truszkowski thereafter

laundered those criminal proceeds through the issuance of payroll checks and wire transfers to a Wal-Mart subcontractor who then

paid the immigrant laborers. FAC ¶85 (emphasis added); see also SAC Ex. I, pp.6-7.

48

As Wal-Mart sees it, Scheutz was only advising Walters how to circumvent Wal-Mart’s own internal guidelines and avoid being

fired. Mot. at 22. But far from “firing” Walters after law enforcement raids at Wal-Mart stores, Schuetz had Wal-Mart pay Walters

tens of millions of dollars through shell companies to continue to supply the necessary labor. As Scheutz said, he “like[d] those

Polocks” Walters supplied because they could be easily exploited. SAC Ex. A, pp. 41-42; SAC ¶47.

49

Harboring requires that defendant: (1) knew or recklessly disregarded the fact that an alien is illegally in the country and (2)

concealed, harbored, or shielded the alien from detection. See e.g., United States v. Baftiri, No. CR 99-47, 2000 WL 34030830 at *

1-2 (N.D. Iowa, April 11, 2000) (harboring shown by defendant’s employment of illegal aliens, provision of housing and

transportation, and a pattern and practice of hiring family members of those unauthorized aliens already in his employ).

50

Transporting requires that (1) the alien was not lawfully in the United States; (2) defendant knew or recklessly disregarded that

fact; (3) defendant knowingly transported the alien, and (4) the transporting was done in furtherance of the alien’s illegal presence

in the United States. See e.g., United States v. Guerra-Garcia, 336 F.3d 19, 23 (1st Cir. 2003) (inferring defendants’ knowledge of

alien’s undocumented status where alien carried only a small bag, did not speak English, and agreed to ride on a bus where no

passenger was released without full payment).

51

A violation of § 1324(a)( 1 )(A)(iv) requires that defendant ( 1) encouraged or induced an alien to come to or remain in the United

States while (2) knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of

law. United States v. Yoshida, 303 F.3d 1145, 1149 (9th Cir. 2002) (affirming conviction for encouraging based on inferences from

circumstantial evidence); see also United States v. Oloyede, 982 F.2d 133, 137 (4th Cir. 1992) (“ ‘encouraging’ relates to actions

taken to convince the illegal alien ... to stay in this country”).

52

SAC Ex. E, pp. 16-18, 23, 45, 137-138.

53

In order to find a defendant liable for aiding and abetting, the plaintiff must prove: ( 1 ) that the defendant associated with the

criminal venture, (2) participated in the venture, and (3) sought by action to make the venture succeed. United States v. Romero-

Cruz, 201 F.3d 374, 378 (5th Cir. 2000) (affirming defendant’s conviction for aiding and abetting the transportation of illegal

aliens). Knowledge and intent, of course, may be inferred from circumstantial evidence. See, e.g., United States v. Johnson, 302

F.3d 139, 149 (3d Cir. 2002).

54

Cf. SAC Ex. I, p. 7 (Wal-Mart contractor pled guilty to indictment charging that payments made to undocumented aliens for

maintenance work at Wal-Mart stores encouraged undocumented aliens to remain and reside in the United States).

55

Linsey Decl. Ex. B.

56

Wal-Mart’s argument is akin to the affirmative common-law defense of in pari delicto, which, where available, defeats a claim if

(1) the plaintiff bears “substantially equal responsibility” for the alleged misdeeds, and (2) precluding plaintiff’s suit would not

significantly impair enforcement of the relevant laws. Bateman Eichler, Hill Richards Inc. v. Berner, 472 U.S. 299, 306, 310-11

(1985). Here, Wal-Mart’s contention that “[h]aving chosen to break these [immigration] laws ... Plaintiff’s cannot now seek to use

24

Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio..., 2006 WL 1042459...

the same violations that they knowingly and voluntarily committed to pursue RICO claims against Wal-Mart” Mot. at 30, is essentially an assertion of such an (unavailable) in pari delicto defense. See also Mot. at 26 (asserting that plaintiffs were “complicit in and benefited from” the commission of the immigration predicates and thus could not establish RICO standing). WalMart’s attempt to shift the blame for its own exploitative practices onto plaintiffs fails as the Third Circuit has not adopted in pari delicto as a bar to RICO standing. In pari delicto is generally not available in RICO actions. See e.g., Biete, Co. v. Blomquist, 848 F. Supp. 1446 (D. Minn. 1994); In re National Mortgage Equity Corp., 636 F.Supp. 1138, 1156 (C.D. Cal. 1986). Indeed, such a requirement would be inconsistent with the language of the statute and with the Supreme Court’s anti-trust standing jurisprudence which served as a model for RICO. See Holmes, 503 U.S. at 268; McCarthy v. Recordex Serv., Inc., 80 F.3d 842, 855 (3d Cir. 1996) (“antitrust standing principles apply equally to allegations of RICO violations”). The Supreme Court explicitly eliminated in pari delicto as a defense to anti-trust actions a generation ago. See Perma Life Mufflers, Inc. v. Int’l Parts Corp., 392 U.S. 134, 138-40 (1968), overruled on other grounds: Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984); see also Pinter v. Dahl, 486 U.S. 622, 632 (1988) (in pari delicto “is not appropriate in litigation arising under federal regulatory statutes”).

57

Of course nothing in 8 U.S.C. §1324(a)( 1 )(A) makes undocumented employment an immigration crime of employees and thus a

predicate act of racketeering. Wal-Mart does not and cannot contend that plaintiffs themselves committed predicate acts of

racketeering.

58

393 F.Supp.2d at 322-23.

25

 
 Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 1 of 38

REED SMITH LLP A Limited Liability Partnership formed in the State of Delaware One Riverfront Plaza, First Floor Newark, NJ 07102-5400 Tele: (973) 621-3200 Fax: (973) 621-3199 Attorneys for Defendant Wal-Mart Stores, Inc. RHB/1835
UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, H~OLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf of themselves and all others similarly situated,
Plaintiffs,

CIVIL ACTION NO.: 03-5309 (JAG)
WAL-MART STORES, INC.’S REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF ITS MOTION TO DISMISS WITH PREJUDICE COUNTS ONE AND TWO OF PLAINTIFFS’ SECOND AMENDED CLASS ACTION COMPLAINT AND JURY DEMAND

-against-

WAL-MART STORES, INC.,

Defendant.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 2 of 38
TABLE OF CONTENTS
ARGUMENT ...................................................................................................................................1 I. PREDICATE ACTS .....i ......................................................................................................2
A. Plaintiffs’ Money Laundering Predicate Fails ...................................................3...... 1. Plaintiffs Do Not Plead Direct Money Laundering Predicates In The Second Amended Complaint ...............................................................3.. 2. Plaintiffs Cannot Satisfy The Requisite Elements Of A Direct Money Laundering Offense Against Wal-Mart ......................................4..... 3. Plaintiffs Fail To Allege A Viable Money Laundering Conspiracy ....6........
B. Plaintiffs’ Immigration Predicates Fail ..............................................................7...... 1, Plaintiffs’ Conspiracy And Aiding And Abetting Theories Fail .........8........ 2. Plaintiffs’ Harboring Predicate Fails ......................................................9.....
C. Plaintiffs’ Involuntary Servitude Predicate Fails ............................................1...1.... II. STANDING .......................................................................................................................12
A. Plaintiffs Cannot Plead Proximate Causation And, Therefore, They Lack Standing to Pursue RICO Claims Against Wal-Mart ........................................1...2..
B. Plaintiffs’ Own Conduct Broke The Causal Chain ..........................................1...5... C. Plaintiffs Ignore The Third Circuit’s Steamfitters Test ......................................... 20 III. ENTERPRISE AND CONTROL .....................................................................................2. 1 A. Plaintiffs Fail To Allege A Distinct RICO Enterprise .....................................2..1.... B. Plaintiffs Fail To Allege A Common Purpose .................................................2...2... C. Plaintiffs Fail To Allege That Wal-Mart Controlled The Enterprise .............2...4..... IV. RICO CONSPIRACY .......................................................................................................2. 4 CONCLUSION ...............................................................................................................................26
-i-

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 3 of 38

CASES

TABLE OF AUTHORITIES

Anderson v. Ayling, 396 F.3d 265 (3d Cir. 2005) ..................................................................2..1,26

Anderson v. Smithfield Foods, Inc., 209 F. Supp. 2d 1270 (M.D. Fla. 2002), aff’d, 353 F.3d 912 (llth Cir. 2003) .........................................................................................6...

Averbach v. Rival Mfg. Co., 879 F.2d 1196 (3d Cir. 1989) ...................................................2..2,24

Averbach v. Rival Mfg. Co., 809 F.2d 1016 (3d Cir. 1987) ...................................................2..2,24

Baker v. IBP, Inc., 357 F.3d 685 (7th Cir. 2004) ................................................................2. 1,22,23

Banco Del Atlantico, S.A.v. Stauder, No. 03-1342, 2005 WL 1925830 (S.D. Ind. Aug. 11, 2005) ..........................................................................................................2. 3

Banco Industrial de Venezuela, C.A.v. Credit Suisse, 99 F.3d 1045 (1 lth Cir. 1996) ...........1..9...

Bateman Eichler, Hill Richards, Inc. v. Bemer, 472 U.S. 299 (1985) ..................................1.5..,.16

Beck v. Prupis, 529 U.S. 494 (2000) ............................................................................................2. 6

Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) ............................................2..1,22

Choimbol v. Fairfield Resorts, Inc., No. 05-463, 2006 WL 521763 (E.D. Va. Mar. 2, 2006) ........................................................................................................14,15

Commercial Cleaning Servs., L.L.C.v. Colin Serv. Sys., Inc., 271 F.3d 374 (2d Cir. 2001) ........................................................................................................................13,14

Danielsen v. Bumside-Ott Aviation Training Ctr., Inc., 941 F.2d 1220 (D.C. Cir. 1991) .....1...3....

Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d Cir. 2000) .........................1.8. ,19

Eli Lilly & Co. v. Roussel Corp., 23 F. Supp. 2d 460 (D.N.J. 1998) ........................................1...2.

Emcore Corp. v. PricewaterhouseCoopers LLP, 102 F. Supp. 2d 237 (D.N.J. 2000) ................2..3.

General Elec. Co. v. Deutz AG, 270 F.3d 144 (3d Cir. 2001) .......................................................7..

Genty v. Resolution Trust Corp., 937 F.2d 899 (3d Cir. 1991) ..................................................1..7. Green v. Aztar Corp., No. 02-3514, 2003 WL 22012205 (N.D. Ill. Aug. 22, 2003) ...................1..9

Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) ............................................1..8.

- ii -

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 4 of 38
Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992) ......................................1..2.. Kaveney v. Miller, No. 93-0128, 1993 WL 298718 (E.D. Pa. July 30, 1993) ...........................1..1. Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir. 1993) .............................................2..5.. Livingston v. Shore Slurry Seal, Inc., 98 F. Supp. 2d 594 (D.N.J. 2000) .................................1..3.. Lum v. Bank of Am., 361 F.3d 217 (3d Cir. 2004), cert. denied, 543 U.S. 918 (2004) ........1..0.,25 In re MasterCard Int’l Inc., 313 F.3d 257 (5th Cir. 2002) ..........................................................1...9 Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002) .................................................1..3,14 Nasrv. Geary, No. 94-8288, 2003 U.S. Dist. LEXIS 13887 (C.D. Cal. June 9, 2003) ..............1...9 Northeast Women’s Ctr., Inc. v. McMonagle, 868 F.2d 1342 (3d Cir. 1989) ............................1..9. Official Comm. of Unsecured Creditors of PSA, Inc. v. Edwards, 437 F.3d 1145
(1 lth Cir. 2006), petition for certiorari filed, No. 05-1335 (U.S. Apr. 14, 2006) ..............passim O’Keefe v. Aamco Transmissions, Inc., No. 91-2506, 1992 WL 38441
(E.D. Pa. Feb. 24, 1992) ...............................................................................................................4 P. Schoenfeld Asset Mgmt. LLC v. Cendant Corp., 142 F. Supp. 2d 589 (D.N.J. 2001) .........2..,.4 Pennsylvania ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173 (3d Cir. 1988) ...................2..,.3.. Perma Life Mufflers, Inc. v. Intemational Parts Corp., 392 U.S. 134 (1968) ......................1..5..,16 Pinter v. Dahl, 486 U.S. 622 (1988) ............................................................................................1..6 Plyler v. Doe, 457 U.S. 202 (1982) ...............................................................................................1. 6 Shulton, Inc. v. Optel Corp., No. 85-2925, 1986 WL 15617 (D.N.J. Sept. 29, 1986) .................1..9 Sikes v. Teleline, Inc., 281 F.3d 1350 (1 lth Cir. 2002) ..............................................................1...9 Starfish Inv. Corp. v. Hansen, 370 F. Supp. 2d 759 (N.D. Ill. 2005) .....................................2.2. ,23 Steamfitters Local Un~on No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912
(3d Cir. 1999) ............................................................................................................................2. 0 Tilli v. Aamco Transmissions, Inc., No. 91-1058, 1992 WL 38405
(E.D. Pa. Feb. 24, 1992) ...............................................................................................................4
ooo - 111 =

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 5 of 38
Trollinger v. Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) ..................................................1..3. United States v. Caruso, 948 F. Supp. 382 (D.N.J. 1996) .............................................................4.. United States v. Conle’¢, 37 F.3d 970 (3d Cir. 1994) ...................................................................5.,6 United States v. Kozminski, 487 U.S. 931 (1988) ......................................................................1...1 United States v. LaBrtmerie, 914 F. Supp. 340 (W.D. Mo. 1995) ..............................................5..,6 United States v. Morelli, 169 F.3d 798 (3d Cir. 1999) ..................................................................5.. United States. v. Omoruyi, 260 F.3d 291 (3d Cir. 2001) ...............................................................5.. United States v. Shackney, 333 F.2d 475 (2d Cir. 1964) .............................................................1..2 United States v. Singh, 261 F.3d 530 (5th Cir. 2001) .................................................................1...0 United States v. Turkette, 452 U.S. 576 (1981) ...........................................................................1..7 United States v. Zheng, 306 F.3d 1080 (1 lth Cir. 2002) ............................................................1...0 University of Md. at Baltimore v. Peat Marwick, Main & Co., 996 F.2d 1534
(3d Cir. 1993) ............................................................................................................................2. 4 Williams v. Mohawk Indus., 411 F.3d 1252 (1 lth Cir.), cert: g[anted in oart, 126 S. Ct.
830 (2005) ..................................................................................................................................13 Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295 (D.N.J. 2005) ..................................p.assim STATUTES 18 U.S.C. § 1956(a) .........................................................................................................................5 CONGRESSIONAL MATERIAL 116 Cong. Rec. I-I35346-47 (Oct. 7, 1970) ...................................................................................1. 7

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 6 of 38
Wal-Mart Stores, Inc. ("Wal-Mart") submits this Reply Memorandum of Law in Further Support of its Motion to Dismiss with Prejudice Counts One and Two of Plaintiffs’ Second Amended Class Action Complaint and Jury Demand ("Second Amended Complaint" or "SAC").
ARGUMENT Wal-Mart’s Opening Brief ("W-M Opening Br.’) demonstrated that Plaintiffs have failed to plead viable predicate acts of racketeering, lack RICO standing, have not adequately alleged the enterprise and control lements of their RICO claims, and have failed to state a RICO conspiracy. Plaintiffs have not countered any of these arguments, each of which provides an independent basis for dismissal of Plaintiffs’ amended RICO claims with prejudice. More specifically, Plaintiffs do not dispute that their amended RICO claims arc based on the same (often verbatim) allegations that this Court has already considered and rejected. Scc Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295, 335 (D.N.J. 2005). Nor do Plaintiffs seriously attempt to defend the fatal deficiencies in their RICO standing or enterprise and control allegations -- which are again the same (often verbatim), but which the Court did not reach in its prior ruling. Plaintiffs instead try to recast their RICO theory as primarily involving money laundering violations, by alleging new predicate offenses in their Opposition Brief ("Opp’n") and attaching extraneous "evidence" to it. Plaintiffs’ attempt to amend their pleading through argument is improper and should be rejected. Equally fundamental, Plaintiffs’ shift away from the alleged immigration law offenses (which have nothing to do with their claimed injury (unpaid overtime and some minimum wage) and in which Plaintiffs themselves were complicit) to alleged money laundering offenses only further confirms that the amended RICO claims should be dismissed with prejudice. The Second Amended Complaint does not allege viable money laundering offenses by Wal-Mart; and even
-1-

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 7 of 38

assuming arguendo that Plaintiffs ever could allege them, such predicates again would not have

caused Plaintiffs’ claimed injury. The Fair Labor Standards Act ("FLSA") affords the remedy

for alleged overtime and minimum wage violations. The FLSA is not a RICO predicate and this

is not a proper RICO case.

Finally, the Opposition Brief contains numerous other legal errors and misstatements. For example, Plaintiffs assert that the in pari delicto defense is not available in RICO cases. In

fact, as the Eleventh Circuit Court of Appeals recently confirmed, in pari delicto is a viable

defense to RICO claims because it prevents complicit parties from misusing and undermining the

RICO statute. Official Comm. of Unsecured Creditors of PSA, Inc. v. Edwards, 437 F.3d 1145,

1149-56 (1 lth Cir.) ("Edwards"), petition for certiorari filed, No. 05-1335 (U.S. Apr. 14, 2006).

The Eleventh Circuit’s reasoning is consistent with prior Third Circuit precedent. Because

Plaintiffs’ own pleadings show that they are complicit in the alleged immigration predicates, cf.

Zavala, 393 F. Supp. 2d at 320, the in pari delicto defense provides yet another basis for

dismissal of the Second Amended Complaint with prejudice.

I.

PREDICATE ACTS

In their Opposition Brief, Plaintiffs assert direct money laundering predicates not alleged

in the Second Amended Complaint and resort to an extraneous and unauthenticated document in

an effort to supplement their deficient pleading. These "amendments" by argument are

improper. _See Pennsylvania ex tel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir.

1988) ("legal theories" in opposition brief"are helpful only to the extent that they find support in the allegations set forth in the complaint"); P. Schoenfeld Asset Mgmt. LLC v. Cendant Corp.,

142 F. Supp. 2d 589, 613-14 (D.N.J. 2001) (plaintiff may not amend complaint by briefs or

affidavits filed in opposition to motion to dismiss). Moreover, Plaintiffs’ opposition arguments

only underscore the fatal deficiencies of their RICO theory.

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A. Plaintiffs’ Money Laundering Predicate Fails. Having originally staked their RICO case on the alleged immigration law predicates, Plaintiffs now argue that "[mJost notably, Wal-Mart knowingly engaged in money laundering through the shell companies it had its contractors create." Opp’n at 1-2 (emphasis added). Plaintiffs’ new focus on money laundering represents a fundamental shift in their case theory. During argument on Wal-Mart’s first Motion to Dismiss, the Court asked Plaintiffs’ counsel to identify his "best predicate acts that clearly would get past this motio"nT.r...of Mot. to Dismiss Hr’g at 115:1-4, Oct. 20, 2004 ("Tr.") (relevant excerpts attached as Exhibit 1). In response, counsel identified "aiding and abetting" the harboring, transporting, and encouraging of illegal aliens. Id__ at 115:5-116:11. Counsel did not mention money laundering, much less identify it as the key offense alleged against Wal-Mart. Id__ Nonetheless, Plaintiffs now contend -- in their Opposition Brief-- that money laundering is the crux of their amended RICO claims. Opp’n at 1-2. They specifically argue that Wal-Mart "directly" violated the money laundering statute, id__ at 24-26, and that Wal-Mart "conspired" with outside contractors to launder funds, id: at 27-28. The direct money laundering arguments in Plaintiffs’ opposition papers lack, in one court’s words, an"ySUpport "in the allegations set forth in the complaint." Pennsylvania ex tel. Zimmerman, 836 F.2d at 181. But even if such money laundering offenses had been alleged in the Second Amended Complaint, they would still fail as a matter of law.
1. Plaintiffs Do Not Plead Direct Money Laundering Predicates In The Second Amended Complaint.
A "direct" money laundering offense refers to conduct that violates 18 U.S.C. § 1956(a). Plaintiffs do not plead any direct money laundering predicates against Wal-Mart in the Second Amended Complaint; rather, they attempt to plead conspiracy to commit money laundering. See

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SAC 7¶ 68, 128 (listing only conspiracy to launder funds in violation of 18 U.S.C. § 1956(h) among the RICO predicates asserted against Wal-Mart). Although the Second Amended Complaint recounts some of the direct money laundering allegations that the government levied against outside contractors in the Forfeiture Action, id. ¶7 93, 96, it does not assert any of those direct money laundering offenses as RICO predicates against Wal-Mart, id. 77 68, 128.
Notably, in their First Amended Complaint ("AC") and Revised Amended Complaint ( RA ), Plaintiffs alleged several direct (and equally baseless)money laundering offenses against Wal,Mart under 18 U.S.C. §§ 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), 1956(a)(3)(A), 1956(a)(3)(B), and 1956(a)(3)(C). See AC 7¶ 37, 67; RAC 77 37, 67. This Court dismissed each of these predicates for failure to state a claim, Zava 393 F. Supp. 2d at 315-16, and Plaintiffs do not reallege them in the Second Amended Complaint. Plaintiffs’ attempt to add direct money laundering predicates through their Opposition Brief is improper and should be rejected. See P. Schoenfeld, 142 F. Supp. 2d at 613-14.
Because Plaintiffs do not allege direct money laundering predicates against Wal-Mart, their reliance on United States v. Caruso, 948 F. Supp. 382 (D.N.J. 1996), Tilli v. Aamco Transmissions, Inc., No. 91-1058, 1992 WL 38405 (E.D. Pa. Feb. 24, 1992), and O’Keefe v. Aamco Transmissions, Inc., No. 91-2506, 1992 WL 38441 (E.D. Pa. Feb. 24, 1992) is also misplaced. In those eases, the government and plaintiffs respectively alleged that the defendants laundered funds in direct violation of 18 U.S.C. § 1956. The Second Amended Complaint, in contrast, contains no such allegations against Wal,Mart.
2. Plaintiffs Cannot Satisfy The Requisite Elements Of A Direct Money Laundering Offense Against Wal-Mart.
Even if Plaintiffs’ direct money laundering claims were properly before the Court -- and they are not --such allegations would still fail to state a viable RICO predicate. Plaintiffs do not
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identify the specific money laundering offenses that Wal-Mart allegedly committed, much less plead the elements of any such offenses. Se__9.e 18 U.S.C. § 1956(a) (listing offenses and their elements),
Nor do Plaintiffs explain how any of Wal-Mart’s conduct involved the "proceeds" of unlawful activity. To state any money laundering offense under Section 1956(a), Plaintiffs must allege that the money Wal-Mart paid to the contractors "represents the proceeds of some form of unlawful activity." Id___~. To qualify as "proceeds" under Third Circuit law, the money at issue must be the product of a completed crime. As explained by the Third Circuit, "[a]lthough the money laundering statute does not define when money becomes ’proceeds,’ it is obvious to us that proceeds are derived from an already completed offense, or a completed phase of an ongoing offense, before they can be laundered." United States v. Conley, 37 F.3d 970, 980 (3d Cir. 1994); United States. v. Omoruyi, 260 F.3d 291, 295 (3d Cir. 2001) (same); United States v. Morelli, 169 F.3d 798, 804 (3d Cir. 1999) (same). "There is nothing in the legislative history or in the case law suggesting that Congress intended to criminalize monetary transactions occurring before that money was paid to the person committing the underlying unlawful act." United States v. L_aBrunerie, 914 F. Supp. 340, 347 (W.D. Mo. 1995) (emphasis added),
Plaintiffs assert that Wal-Mart paid the contractors for the floor-cleaning services they rendered, Opp’n at 25-26. But the Second Amended Complaint contains no allegation that the money Wal-Mart paid to the contractors derived from a crime, and there is no basis for drawing any such inference. The only reasonable inference is that Wal-Mart paid the contractors out of the sales revenues it earned from running its stores. Such payments do not constitute unlawful "proceeds" under the money laundering statute as a matter of law. Conlev, 37 F.3d at 980 (money must be derived from the commission of a crime).
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Moreover, even if Wal-Mart knew that the outside contractors hired undocumented workers, as Plaintiffs wrongly allege, Wal-Mart’s floor-cleaning payments to the contractors still would not constitute unlawful proceeds. See Opp’n at 24. The alleged act of paying for an illegal service is the very antithesis of money laundering because that act does not "launder" the funds, but instead makes them "dirty." See LaBrunerie, 914 F. Supp. at 347 ("Again, the common meaning of the word ’launder’ is ’to wash,’ which obviously means to make clean. The defendant correctly points out that the acts alleged by the indictment make the money dirty, not clean."). The allegation that Wal-Mart "saved" money by contracting with companies that hired undocumented workers is equally insufficient. Saving money by violating federal wage-andhour requirements is not money laundering. See Anderson v. Smithfield Foods, Inc., 209 F. Supp. 2d 1270, 1275 (M.D. Fla. 2002) ("Saving money as a result of [alleged violations of environmental taws] does not make the money illegally obtained for the purposes of the money laundering statute."), aft’d, 353 F.3d 912 (1 lth Cir. 2003).
3. Plaintiffs Fail To Allege A Viable Money Laundering Conspiracy. Plaintiffs’ attempt to assert a money laundering conspiracy involving Wal-Mart likewise fails. A money laundering conspiracy consists of (1) an agreement to launder funds, (2) knowledge of the agreement and a deliberate decision to join the conspiracy, and (3) overt conduct in furtherance of the unlawful goal. Conlez, 37 F.3d at 976-77. Even assuming arguendo that Wal-Mart knew that the contractors intended to "launder" the payments they received, Opp’n at 23-24, such knowledge does not suffice to establish conspiracy to launder funds, cf. Zavala, 393 F. Supp. 2d at 317 (holding that Wal-Mart’s knowledge of illegal conduct could not give rise to an inference that "Wal-Mart agreed with co-conspirators to the commission, by co-conspirators and others, of RICO predicate acts, in furtherance of an unlawful enterprise"). Plaintiffs have not alleged any money laundering agreement between Wal-Mart
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and its outside contractors. Nor do they describe any overt acts that Wal-Mart undertook in furtherance of the so-called conspiracy. The allegation that a single Wal-Mart employee, nearly ten years ago, suggested that a single contractor do business through multiple companies, even if true, does not give rise to a money laundering conspiracy predicate, much less provide the basis for a nationwide conspiracy claim against Wal-Mart. Opp’n at 27-28.
And Plaintiffs are still unable to describe any financial transactions that supposedly "laundered" the floor-cleaning payments, despite this Court’s holding that they must do so in order to state a viable money laundering predicate. Zavala, 393 F. Supp. 2d at 315-16 (dismissing money laundering predicate because Plaintiffs "do not identify the relevant financial transactions or conduct by Wal-Mart, or describe more particularly the contractors’ ’money laundering activities’ that allegedly involved banks, accountants, attorneys, and others"). They instead recycle the Forfeiture Action in a futile effort to give substance to their conspiracy claim. Opp’n at 26-27; see also SAC ¶¶ 93-97, 117. This Court has already held that the money laundering allegations against the contractors in the Forfeiture Action do not state a money laundering predicate offense against Wal-Mart. Zavala, 393 F. Supp. 2d at 315-16.
Accordingly, Plaintiffs’ new-found emphasis on money laundering fails on multiple grounds and should be dismissed with prejudice.
B. Plaintiffs’ Immigration Predicates Fail. Plaintiffs cannot remedy their defective immigration predicates, so they instead suggest that "guilty pleas" entered by outside contractors to immigration offenses somehow operate as resjudicata against Wal-Mart. Opp’n at 2, 10. Resjudicata does not operate against non-parties and this contention is baseless. See General Elec. Co. v. Deutz AG, 270 F.3d 144, 158 (3d Cir. 2001). It also ignores the outcome of the federal government’s investigation of Wal-Mart’s use of outside contractors. That investigation resulted in a court-ordered Consent Decree finding
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that there was no basis to pursue criminal charges -- including the same immigration charges that Plaintiffs allege here -- against Wal-Mart. See W-M Opening Br. at Exhibits 2-4.
Moreover, as Wal-Mart’s Opening Brief showed, Plaintiffs’ immigration predicates are fatally flawed in numerous respects. W-M Opening Br. at 9-18. Plaintiffs’ Opposition Brief only confirms these problems.
1. Plaintiffs’ Conspiracy And Aiding And Abetting Theories Fail. Plaintiffs effectively concede that they cannot plead direct immigration predicates against Wal-Mart. Opp’n at 28-34. They instead try to implicate Wal-Mart under conspiracy and aiding and abetting theories. Id__ at 28-31. Neither theory is viable. To plead conspiracy to harbor, transport, or encourage illegal aliens under 8 U.S.C. § 1324(a)(1)(A)(v)(I), Plaintiffs must allege an agreement to commit those offenses and an overt act in furtherance of the unlawful goal. Zavala, 393 F. Supp. 2d at 304 n.7. Similarly, to plead aiding and abetting under 8 U.S.C. § 1324(a)(1)(A)(v)(II), Plaintiffs must allege that Wal-Mart actively participated in the illegal harboring, transporting, or encouraging through "affirmative conduct designed to aid the venture." Id__ at 304 n.6. The Second Amended Complaint alleges that outside contractors committed or pleaded guilty to various immigration offenses, but again does not allege any participation by Wal-Mart in such conduct. SAC ¶7 49-50, 67, 87-89, 92, 113 (alleging that contractors pleaded guilty to harboring and arranged housing for undocumented workers); 77 67, 87-89 (alleging that contractors transported undocumented workers); 77 87-88 (alleging that contractors encouraged undocumented workers). This Court has already held that identical allegations against outside contractors, including the government’s allegations in the Forfeiture Action, do not state immigration conspiracy or aiding and abetting predicates against Wal-Mart. Zavala, 393 F. Supp. 2d at 305-08.
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The legal arguments that Plaintiffs raise in support of their conspiracy and aiding and abetting theories also lack merit. They cite no support for their contention that Wal-Mart’s payments for floor-cleaning services constitute affirmative "participation" in the contractors’ alleged harboring, transporting, or encouraging. SAC ¶ 112. Compare Zavala, 393 F. Supp. 2d at 306 (describing conduct that might rise to the level of affirmative participation in immigration offenses). Nor do they explain how Wal-Mart’s alleged requests for replacement floor-cleaning crews amount to an act in furtherance of any illegal immigration activity. SAC ¶¶ 114-116. Even assuming arguendo that Wal-Mart knew that, in response to requests for new crews, contractors "would, and did, cause undocumented migrants to be transported across state lines to the Wal-Mart stores," Opp’n at 30, such knowledge cannot support a conspiracy or aiding and abetting predicate. Moving illegal aliens from one location to a place of employment does not constitute illegal transporting, harboring or encouraging as a matter of law. Zavala, 393 F. Supp. 2d at 305.
Finally, Plaintiffs’ assertion that, nearly ten years ago, a Wal-Mart employee suggested that a single contractor use multiple companies to avoid being disqualified from doing business with Wal-Mart does not state a predicate for conspiracy to harbor, or aiding and abetting the harboring of, illegal aliens. Opp’n at 31. Even if this alleged conversation occurred, Plaintiffs still have not alleged that Wal-Mart actively helped conceal illegal workers from law enforcement. Zavala, 393 F. Supp. 2d at 307.
2. Plaintiffs’ Harboring Predicate Fails. Plaintiffs do not even discuss the direct "transporting" and "encouraging" predicates they reallege against Wal-Mart in the Second Amended Complaint. See Opp’n at 28-34. They instead focus exclusively on their direct "harboring" predicate under 18 U.S.C. § 1324(a)(1)(A)(iii), tacitly conceding that their other immigration predicates are untenable.
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Plaintiffs wrongly attempt to cure their deficient harboring allegations by introducing extrinsic "evidence"; namely, a purported invoice from an outside contractor to Wal-Mart supposedly showing that the contractor billed Wal-Mart for temporary "crew accommodations" due to a change in the crew’s "start date." Decl. of James L. Linsey at Ex. B; Opp’n at 33. This attempt to supplement the Second Amended Complaint should not only be rejected as improper, Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir.) (reversing where district court improperly took notice of extrinsic document), cert. denied, 543 U.S. 918 (2004), but also underscores Plaintiffs’ misunderstanding of the harboring offense they allege. There is no allegation that the crew at issue consisted of undocumented workers, or that Wal-Mart paid to house these workers in order to hide them from law enforcement authorities. To the contrary, Plaintiffs’ own document shows that Wal-Mart allegedly paid for temporary accommodations because the crew’s start day was postponed -- not to conceal them from detection. Opp’n at 33. Thus, even giving Plaintiffs the benefit of all reasonable inferences, this nearly seven-year old invoice provides no support for a harboring predicate. (Of course, Plaintiffs are not entitled to draw any inferences from this document because it is not properly before the Court. L_um, 361 F.3d at 221 n.3.)
Finally, Plaintiffs do not and cannot allege that Wal-Mart allowed a crew of"Bulgarian janitors" in Kansas City to "reside" in the store for the purpose of hiding them from federal authorities. Opp’n at 33. The most that can be inferred is that individual crew members stored items and occasionally slept in a backroom between shifts, in plain sight. SAC Ex. E at 86. These facts do not rise to the level of harboring, cf. Zavala, 393 F. Supp. 2d at 307, and distinguish this case from United States v. Zheng, 306 F.3d 1080 (1 lth Cir. 2002) and United States v. Singh, 261 F.3d 530 (Sth Cir. 2001). In both of those cases, the illegal aliens resided
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and worked full time on the defendant’s premises in hiding. See Zavala, 393 F. Supp. 2d at 307 (distinguishing Plaintiffs’ deficient harboring allegations from allegations in Zheng and Sinzh). Here, all of the Wal-Mart stores were open to the public and many Plaintiffs, by their own account, worked in plain sight of shoppers -, and even immigration enforcement officials -- in stores that were open 24 hours a day, seven days a week. See SAC ¶7 21-22; id. Ex E at 31-37.
C. Plaintiffs’ Involuntary Servitude Predicate Fails. The Second Amended Complaint reasserts, virtually verbatim, the defective involuntary servitude allegations that this Court previously dismissed. SAC 77 118-120. Plaintiffs again admit that this case is about alleged unpaid overtime -- not slavery. See Opp’n at 2-3. Plaintiffs have not identified a single new allegation in support of their claim, but instead simply reargue the exact same points this Court already rejected. Compare Opp’n at 34-36 (arguing that threats of deportation and alleged physical abuse constitute involuntary servitude), with Zavala, 393 F. Supp. 2d at 309-11 (dismissing involuntary servitude predicate based on alleged threats of deportation and vague abuse allegations). Plaintiffs’ recycled allegations that economic pressure -- such as alleged threats of eviction -- amount to involuntary servitude still fail as a matter of law. United States v. Kozminski, 487 U.S. 931,952 (1988) (requiting compulsory labor through physical restraint, law, or legal process); Kavene¥ v. Miller, No. 93-0128, 1993 WL 298718, at *2 (E.D. Pa. July 30, 1993) (economic pressure does not suffice). As do Plaintiffs’ recycled "lock-in" allegations: By Plaintiffs’ own admission, crew members joined and left crews of their own volition. SAC 77 21-22, 102; see also W-M Opening Br. at 21. And there is no allegation that Plaintiffs were ever forced to come to work against their will, or that they were physically restrained from leaving "locked" stores if they requested or otherwise attempted to do so. See SAC 77 118-120.
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Finally, as this Court held, alleged threats of deportation if they exited a "locked" store are "insufficient." Zavala, 393 F. Supp. 2d at 311.
Plaintiffs’ near-verbatim reiteration of these allegations is, as the Second Circuit warned, a blatant attempt to use the involuntary servitude statute as a "tool for blackmail and other serious abuse." United States v. Shackney, 333 F.2d 475, 487 (2d Cir. 1964). This predicate should be dismissed with prejudice, and Plaintiffs should be sanctioned for reasserting it. II. STANDING
A. Plaintiffs Cannot Plead Proximate Causation And, Therefore, They Lack Standing to Pursue RICO Claims Against Wal-Mart.
Plaintiffs must plead both "but for" and "proximate" causation to establish RICO standing. See Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 265-70 (1992). The proximate cause requirement is "interpreted narrowly" in RICO cases. Eli Lilly & Co. v. Roussel Corp., 23 F. Supp. 2d 460, 483 0).N.J. 1998).
Plaintiffs’ Opposition only confirms that they lack standing to pt~sue RICO claims against Wal-Mart. They have again admitted that the only harm alleged in this case is the denial of overtime compensation and, in some instances, minimum wage: "The predicate acts of racketeering were intended to and did result in Wal-Mart’s janitors being underpaid - denied overtime and (in come cases) minimum wage (or, at times, any wages at all), denied workmen’s compensation and denied other employment benefits," Opp’n at 2-3. These injuries flow, if at all, from non-compliance with the Fair Labor Standards Act, and not directly and proximately from any of the predicate acts alleged against Wal-Mart. Moreover, Plaintiffs’ suggestion that they were denied workmen’s compensation and other employee benefits is yet another improper attempt to expand their pleading by argument. Plaintiffs have not alleged, and could not allege, a claim to recover these benefits from Wal-Mart. See SAC ¶¶ 145-150.
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Tellingly, Plaintiffs do not cite a single case for the proposition that a party has standing to sue under RICO to recover for FLSA violations. Nor could they. Courts have repeatedly recognized that FLSA violations are not predicate acts of racketeering under RICO. Se___~e Livingston v. Shore Slm-rv Seall Inc., 98 F. Supp. 2d 594, 600 (D,N.J. 2000); Commercial Cleaning Servs., L.L.C. v, Colin Serv. Sys., Inc., 271 F.3d 374, 383 (2d Cir. 2001); Danielsen v. Burnside-Ott Aviation Training Ctr., Inc., 941 F.2d 1220, 1228-29 (D.C. Cir. 1991). Thus, the FLSA violations alleged in this case cannot bestow RICO standing as a matter of law.
The cases that Plaintiffs do cite are inapposite because they all involve legal workers and businesses that allegedly suffered direct harm from an employer’s hiring of undocumented workers. Se____qe, ~ Commercial Cleaning, 271 F.3d at 383 (legal business); Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1170 (9th Cir. 2002) (legal workers); Williams v. Mohawk Indus., 411 F.3d 1252 (1 lth Cir.) (legal workers), cert. granted in p__~_, 126 S. Ct. 830 (2005); Trollinger v, Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004) (legal workers). Here, in contrast, Plaintiffs not only admit in their pleadings that they are undocumented, but also fail to allege an illegal hiring predicate offense against Wal-Mart.
In their Amended and Revised Amended Complaints, Plaintiffs unsuccessfully attempted to assert an illegal hiring predicate under 8 U.S.C. § 1324(a)(3)(A). Se.__.&e RAC ¶¶ 37, 67. The Court dismissed the hiring predicate for failure to state a claim, Zava 393 F. Supp. 2d at 30809, and Plaintiffs do not reassert that offense in the Second Amended Complaint, see SAC ¶¶ 68, 128. This omission is critical because illegal hiring under Section 1324(a)(3)(A) is the only RICO predicate that even remotely resembles the offenses that conferred standing on legal workers and businesses in the cases Plaintiffs cite. Moreover, nothing in those cases suggests that undocumented workers would have RICO standing to seek redress for alleged FLSA
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violations. To the contrary, in Commercial Cleaning, the Second Circuit expressly recognized that FLSA violations are not RICO predicates. 271 F.3d at 383. And the Ninth Circuit in Mendoza recognized the inherent contradiction of finding that undocumented workers have standing to enforce the very immigration laws they violated. 301 F.3d at 1170 (observing that illegal aliens could not be "’counted on to bring suit for the law’s vindication’") (citation omitted).
Plaintiffs also overstate the holding in Choimbol v. Fairfield Resorts, Inc., No. 05-463, 2006 WL 521763 (E.D. Va. Mar. 2, 2006). They claim that the Choimbol plaintiffs were "undocumented migrant labor[ers]" or "undocumented janitors." Opp’n at 25, 39. In fact, the court’s opinion only states that the plaintiffs were immigrant laborers provided by regional and national recruiters. Choimbol, 2006 WL 521763, at * 1. Nothing in the opinion suggests that the Choimbol plaintiffs entered this country illegally, overstayed their visas, or worked without proper authorization. Instead, the opinion refers to the provision of laborers under the "H2b Visa Program," which expressly permits domestic employers to hire temporary foreign workers. Id__ at ¯ 2. The court never even considered whether undocumented workers, who are complicit in the misconduct they allege, have standing to pursue RICO claims.
And unlike Wal-Mart, the defendant in Choimbol did not move to dismiss for lack of standing. Id__ at *4 (defendant moved to dismiss for failure to plead (1) viable predicate acts of racketeering, (2) fraud with particularity, and (3) a pattern of racketeering activity). While the Choimbol court briefly discussed RICO standing principles, its analysis was cursory and is dicta. Id__ at *6. In all events, the discussion is irrelevant: The Choimbol court did not consider whether (much less find that) the plaintiffs’ injuries were proximately caused by the alleged money laundering activity. Id__ The court merely determined that the plaintiffs were harmed by
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mail and wire fraud offenses, id___~. -- predicate offenses that Plaintiffs do not allege in the Second Amended Complaint, SAC ¶¶ 68, 128. Plaintiffs tried to allege mail and wire fraud in their Amended and Revised Amended Complaints, see AC ¶ 67; RAC ¶ 67, but this Court dismissed those predicates for lack of particularity, Zaval___.__~a, 393 F. Supp. 2d at 313-14. Plaintiffs did not even attempt to reassert such claims in the Second Amended Complaint. See SAC ¶¶ 68, 128. Finally, the bare bones money laundering allegations approved in Choimbol would never pass muster in the Third Circuit, as this Court’s prior opinion makes clear. Zavala, 393 F. Supp. 2d at 315-16 (rejecting vague and conclusory money laundering allegations that merely parroted the statutory language).
B. Plaintiffs’ Own Conduct Broke The Causal Chain. As Wal-Mart demonstrated in its Opening Brief, Plaintiffs voluntarily participated in and benefited from the predicate offenses that they allege against Wal-Mart. W-M Opening Br. at 29-30. Because Plaintiffs are complicit in the alleged RICO offenses, and could have avoided their purported harm by choosing not to break the law, their own conduct severed the "but for" causal chain alleged in the Second Amended Complaint. Id__~. Plaintiffs try to overcome this problem by asserting that the in pari delicto defense is not available in RICO cases. Opp’n at 3, 40-42. Plaintiffs are again wrong on the law. As the Eleventh Circuit recently confirmed, the in pari delicto defense is available because it advances the purposes underlying RICO. See Edwards, 437 F.3d at 1149-56. In Edwards, the Eleventh Circuit applied the Supreme Court’s two-factor test to determine whether in pari delicto should apply in RICO cases. Id_._~. at 1154-55. That test looks at (1) the plaintiffs’ active participation in the alleged violation, and (2) the policy goals underlying the federal statute at issue. Id__~. The Supreme Court articulated these factors in the antitrust and securities law contexts. See Perma Life Mufflers, Inc. v. Int’l Parts Corp., 392 U.S. 134 (1968); Bateman Eichler, Hill Richards, Inc.
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v. Bemer, 472 U.S. 299 (1985); see also Pinter v. Dahl, 486 U.S. 622, 632-33 (1988). On the facts ofBateman Eichler and Perma Life, the Supreme Court held that in pari delicto did not apply; however, the Court expressly acknowledged that the defense might be available under different factual circumstances and in other contexts. Perma Life, 392 U.S. at 140 (holding that defense did not apply because defendants were passive antitrust violators, but reserving judgment as to whether greater involvement in violation might bar claim); Bateman Eichler, 472 U.S. at 308-09 (holding that defense did not apply because defendants were not active participants in securities law violation, but recognizing that defenses based on plaintiff’s fault should be applied in appropriate cases). Thus, contrary to Plaintiffs’ suggestion, the Supreme Court did not "eliminate[] in pari delicto as a defense to antitrust actions a generation ago," Opp’n at 40-41 n.56, and the Court has never suggested that the defense should be unavailable in RICO cases. As the Eleventh Circuit explained in Edwards, the Supreme Court’s precedents actually favor application of the defense in RICO actions to prevent complicit parties from abusing the statute. Edwards, 437 F.3d at 1154-56.
In particular, applying the first factor, the Eleventh Circuit found that the plaintiff’s own allegations in Edwards showed that the plaintiff actively participated in the alleged misconduct. Id__ at 1155. The same is true here. This Court has already held that "Plaintiffs’ status as ’recent immigrants’ or as ’undocumented workers,’ and the concomitant political and social isolation that they encounter is, at least in part, the result of their own voluntary conduct. While they now may not be able to regularize their status, such that their undocumented status is immutable, this is traceable to their decision, at the outset, to enter and remain unlawfully in the United States." Zavala, 393 F. Supp. 2d at 320 (emphasis original); see also Pl¥1er v. Doe, 457 U.S. 202, 219-20 (1982) (holding that entry into class of undocumented aliens is itself a crime). The Second
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Amended Complaint and its attachments again show that Plaintiffs are complicit in the immigration and money laundering predicates they allege because they admittedly entered this country illegally or unlawfully overstayed their visas, worked without authorization, and knowingly accepted "laundered" payments from their contractors. SAC ¶¶ 7-28, 78-98, Ex. A at 18-19, Ex. E at 43-44, Tr. at 99:16-22. Accordingly, the first factor weighs in favor of applying the in pari delicto defense. See Edwards, 437 F.3d at 1155 (plaintiff’s participation in misconduct favored application of in pari delicto).
Applying the second factor in Edwards, the Eleventh Circuit held that the policies underlying RICO likewise weigh in favor of recognizing the in pari delicto defense. Id._ The court explained that "[i]t would be anomalous, to say the least, for the RICO statute to make racketeering unlawful in one provision, yet award the violator with treble damages in another provision of the same statute." Id__ "Congress intended RICO’s civil remedies to help eradicate ’organized crime from the social fabric’ by divesting ’the association of the fruits of ill-gotten gains.’" Id._ (quoting Genty v. Resolution Trust Corp., 937 F.2d 899, 910 (3d Cir. 1991) (quoting United States v. Turkette, 452 U.S. 576, 585 (1981)); see also 116 Cong. Rec. H35346-47 (Oct. 7, 1970) (statements of Rep. Steiger) (explaining that RICO’s purpose is ’:to see that innocent parties who are the victims of organized crime have a right to obtain proper redress") (emphasis added). Allowing a complicit party to recover under RICO "would not divest RICO violators of their ill-gotten gains; it would result in a wealth transfer among similarly situated conspirators." Edwards, 437 F.3d at 1155. Accordingly, the Eleventh Circuit held that policy considerations favored application of the in pari delicto defense in RICO cases. Id__ at 1156.
The Eleventh Circuit’s policy analysis applies with extra force in this case because allowing Plaintiffs to bring RICO claims would not only undermine the RICO statute, but would
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also subvert the Immigration Reform and Control Act ("IRCA"). IRCA reflects a federal , immigration policy that prohibits illegal aliens from obtaining legal employment in the United States. Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 148 (2002). Civil remedies that would undermine INCA are not available to undocumented workers. Id__ at 151-52 (holding that illegal aliens cannot recover back pay for unlawful termination because such a remedy "would unduly trench upon explicit statutory prohibitions critical to federal immigration policy, as express in IRCA"). Thus, under ttoffman, any remedy that would affirmatively encourage illegal aliens to seek unlawful employment in the United States is prohibited. Id__ at 150-51.
Allowing undocumented workers to seek treble damages under RICO, based on alleged unlawful conduct that they participated in, would undermine INCA and run afoul of Hoffrnan by creating a financial incentive for such individuals to seek unlawful employment in the United ¯States. The prospect of an enhanced recovery against their employer -- above and beyond whatever remedies may be available under the FLSA -- would only encourage undocumented workers to risk working in this country unlawfully, secure in the knowledge that, if apprehended, they will be able to sue for treble damages under RICO. Id__ at 151-52. In contrast, denying undocumented workers the ability to sue under RICO "does not mean that the employer gets off scot-free." I& at 152. To the contrary, as the Supreme Court recognized, the employer still faces the prospect of sanctions and "traditional remedies" under applicable federal laws. Id__ Therefore, in this case -- as in Edwards -- the policy factor weighs heavily in favor of applying the inpari delicto defense. 437 F.3d at 1155.
The Eleventh Circuit’s reasoning in Edwards is consonant with Third Circuit precedent. In Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d Cir. 2000), for example, the Third Circuit held that a plaintiff who voluntarily engages in misconduct that results in the
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Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 24 of 38
claimed injury lacks standing to pursue RICO claims because the harm is "self-inflicted." Id__ at 188. Although the Third Circuit did not use the terms in pari delicto, the principle underlying the court’s decision is exactly the same: a culpable party cannot sue under RICO for alleged acts in which the party is complicit. See also_ Northeast Women’s Cir., Inc. v. McMonagle, 868 F.2d 1342, 1353-55 (3d Cir. 1989) (analyzing "unclean hands" doctrine in RICO case, but finding that the facts did not warrant its application); Shulton, Inc. v. Optel Corp., No. 85-2925, 1986 WL 15617, at "80-’81 (D.N.J. Sept. 29, 1986) (holding that inpari delicto may apply to RICO claims under two-factor test articulated in Bateman Eichler). This Court has already recognized that Plaintiffs could have avoided the harm they decry by choosing not to enter, remain and work in this country illegally. Zavala 393 F. Supp. 2d at 320. Having voluntarily chosen to break the law, they are complicit in the alleged offenses and thus lack RICO standing.
Courts outside the Third Circuit have likewise applied the in pari delicto defense in RICO cases. See Banco Industrial de Venezuela, C.A.v. Credit Suisse, 99 F.3d 1045, 1048-50 (1 lth Cir. 1996) (upholding determination that the in pari delicto defense applied to RICO claims); Nasr v. Gearg, No. 94-8288, 2003 U.S. Dist. LEXIS 13887, at *74 (C.D. Cal. June 9, 2003) (RICO claims barred by the in pari delicto doctrine); see also In re MasterCard Int’l Inc., 313 F.3d 257, 264 (5th Cir. 2002) (no RICO standing where plaintiffs knowingly and voluntarily engage in conduct that caused harm); Sikes v. Teleline, Inc., 281 F.3d 1350, 1366 n.41 (1 lth Cir. 2002) (unclean hands may be a defense in RICO cases); Green v. Aztar Corp., No. 02-3514, 2003 WL 22012205, at *3 ~.D. Ill. Aug. 22, 2003) (plaintiffs’ voluntary participation in RICO activities that caused harm severed the causal chain). Plaintiffs either do not cite or make no serious attempt to distinguish any of these precedents. In marked contrast, the Eleventh Circuit
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Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 25 of 38
in Edwards distinguished the in pari delicto cases that Plaintiffs cite in their Opposition.
Compare Opp’n at 40-41 n.56, with Edwards, 437 F.3d at 1155-56.
Because the allegations in the Second Amended Complaint establish that the in pari
delicto doctrine applies here, Plaintiffs’ amended RICO claims should be dismissed with
prejudice on this additional ground.
C. Plaintiffs Ignore The Third Circuit’s Steamfitters Test. Plaintiffs have not even attempted to rebut Wal-Mart’s argument that they lack standing
under the test the Third Circuit articulated in Steamfitters Local Union No. 420 Welfare Fund v.
Philip Morris, Inc., 171 F.3d 912, 924 (3d Cir. 1999). W-M Opening Br. at 30-33. This
omission is telling because the .Steamfitters factors further confirm that Plaintiffs lack RICO
standing:
The alleged causal connection is, as shown, too remote. Plaintiffs’ injuries stem, if at all, from non-compliance with the FLSA, a non-predicate statute; moreover, Plaintiffs’ own conduct severed whatever causal link may have existed. ¯ Wal-Mart’s intention was, by Plaintiffs’ own admission, to lower cleaning costs, SAC ¶¶ 29, 52, and not to harm any specific crew member.
The only claimed injury in this case is alleged wage underpayment, Opp’n at 2-3, which is at most violation of the FLSA. The FLSA is not a RICO predicate statute and Plaintiffs’ alleged harm is not the kind that Congress intended to be covered under RICO. ¯ Mechanisms other than RICO exist principally to redress wage-and-hour injuries, including private FLSA litigation and state and federal DOL enforcement mechanisms.
The damages in this case are speculative for standing purposes because Plaintiffs’ claims would require the trier-of-fact to allocate damages between the non-party contractors that employed Plaintiffs, Wal-Mart, and Plaintiffs, who chose to enter and remain in this country illegally and to work without proper authorization.
The speculative nature of Plaintiffs’ damages increases the complexity of this case, which is already judicially unmanageable given the disparate and fact-specific nature of the FLSA issues in question. Moreover, because the parties most directly responsible for Plaintiffs’ alleged wage harm -- the contractors who employed them -- are not present in this case, there is a substantial risk of duplicative litigation and inconsistent outcomes.
- 20 -

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 26 of 38
See Anderson v. Ayling, 396 F.3d 265,270-72 (3d Cir. 2005) (affirming dismissal of RICO claims with prejudice for failure to establish standing under Steamfitters factors). III. ENTERPRISE AND CONTROL
A. Plaintiffs Fail To Allege A Distinct RICO Enterprise. Plaintiffs continue to misapprehend the enterprise element of RICO. They allege an "enterprise" consisting of an association-in-fact between Wal’Mart and outside floor-cleaning contractors functioning as Wal-Ma~’s "agents." SAC ¶ 41. The Seventh Circuit rejected an identical enterprise theory in Baker v. IBP, Inc., 357 F.3d 685, 691-92 (7th Cir. 2004), holding that an employer-defendant and its alleged recruiter-agents could not form a distinct and cognizable enterprise. See also W-M Opening Br. at 34-35 (discussing distinctiveness requirement). Recognizing that their "agency" enterprise theory is fatally flawed, Plaintiffs again attempt to amend their pleading through argument. They assert in their Opposition Brief that each contractor is "undeniably a separate corporate entity, legally distinct from the enterprise." Opp’n at 15. While this is a true statement, it is also a non sequitur. Plaintiffs have consistently pleaded that the independent contractors acted as Wal-Mart’s agents, SAC ¶ 41, RAC ¶¶ 3 l(d), 36, AC ¶¶ 31 (d), 36, which, as the Seventh Circuit correctly observed, is a I~CO enterprise theory that "won’t fly," Bake.___rr, 357 F.3d at 691. Plaintiffs’ reliance on Ced~c Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) is also misplaced. Opp’n at 14-16. The defendant in King was the president and sole shareholder of a closely held corporation. 533 U.S. at 160. He allegedly conducted the corporation’s affairs through a pattern of racketeering. In other words, he infiltrated and dominated the corporation’s affairs in the way that RICO is designed to prevent. The Supreme Court held that the association of two distinct entities -- person and corporation -- constituted a viable enterprise. Id__~. at 166.
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Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 27 of 38
Here, unlike in __~gg, Plaintiffs do not and cannot allege that anyone has infiltrated Wal-Mart or that Wal-Mart has infiltrated its contractors. To the contrary, Plaintiffs have admitted that WalMart did not take over its contractors. Opp’n at 15. Instead, they allege that the contractors acted as Wal-Mart’s agents, which is tantamount to saying that Wal-Mart operated itself illegally through the conduct of contractor-agents. This is precisely the fact pattern rejected in _Baker. 357 F.3d at 691. And in Kinz the Supreme Court expressly noted that its holding did not expand R/CO liability to corporate defendants for the acts of agents under ordinary respondeat superior principles. 533 U.S. at 166.
B. Plaintiffs Fail To Allege A Common Purpose. Plaintiffs’ enterprise theory is also flawed because, as their own pleadings show, WalMart and the contractors that make up the so-called enterprise lack a "common purpose." See W-M Opening Br. at 35,36. Plaintiffs first attempt to avoid dismissal on this ground by arguing that the Third Circuit has not recognized a common purpose requirement. Opp’n at 18. In fact, the Third Circuit has long required that RICO enterprise allegations establish a common purpose. See Averbach v. Rival Mfg. Co., 879 F.2d 1196, 1198 (3d Cir. 1989) ("On appeal, this court affirmed the dismissal of the RICO claim, holding that Averbach could not claim that the court system was an enterprise for purposes of RICO because the court personnel and litigants lacked a common purpose.") (citing Averbach v. Rival Mfg. Co., 809 F.2d 1016, 1018-20 (3d Cir. 1987)). Plaintiffs next argue that the Second Amended Complaint satisfies the common propose requirement because "both [Wal-Mart] and the contractors shared the mutual goal of profiting off the labor of the undocumented j anitors." Opp’n at 18-19 (citing SAC ¶¶ 41-42). This assertion not only fails as a matter of law, but is also negated by Plaintiffs’ own pleadings. A broad statement that members of an illegal enterprise share a general goal of making money does not satisfy the common purpose requirement. Se.___9.e Starfish Inv. Corp. v. Hansen, 370 F, Supp. 2d
- 22 -

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 28 of 38
759, 771 (N.D. I11. 2005). Moreover, the Second Amended Complaint and its attachments show that Wal-Mart and its contractors had conflicting economic goals: Wal-Mart sought to reduce its floor-cleaning costs, while the contractors wanted to maximize their profits by charging WalMart the highest possible rate for such services. See, e._~., SAC ¶¶ 29, 52, 106, Ex. A at 42-43, Ex. E at 63. Even Plaintiffs’ so-called "star" informant openly complained about Wal-Mart’s constant demands for lower prices and other concessions. Id___~. Ex. A at 43. These conflicting interests preclude a fi"nding"of comnmo purspeo". See Baker, 357 F.3d at 691-92 (divergent economic goals between employer-defendant and recruiter-agents precluded finding of common purpose); Banco Del Atlantico, S.A.v. Stauder, No. 03-1342, 2005 WL 1925830, at *9 (S.D. Ind. Aug. 11, 2005) (no enterprise because constituents had diverging economic interests); Starfish, 370 F. Supp. 2d at 771 (no enterprise because each constituent was out to promote its own economic interests).
Plaintiffs next wrongly argue that the obvious "self-interest" of the members of the alleged enterprise is "immaterial to the common purpose of the enterprise: exploiting undocumented labor for profit." Opp’n at 20 n.42. They mistakenly cite Emcore Corp. v. PricewaterhouseCoopers LLP, 102 F. Supp. 2d 237, 263-64 (D.N.J. 2000) for this proposition. The court in Emcore rejected the argument that the defendants’ "inherently contradictory goals" negated the existence of a RICO enterprise. Id._~. at 264. But the court did not find that there is no common purpose requirement. Rather, the court rejected the defendants’ common purpose argument there because it was based on "superseded pleadings" and non’binding case law. Id_:. Here, in contrast, Plaintiffs’ own amended RICO pleadings again show that Wai-Mart and its contractors did not share the requisite common purpose. The controlling Third Circuit precedent
- 23 -

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 29 of 38
thus mandates dismissal of Plaintiffs’ enterprise claim. Se___~e Averbach, 879 F.2d at 1198 (citing Averbach, 809 F.2d at 1018-20).
C. Plaintiffs Fail To Allege That Wal-Mart Controlled The Enterprise. Plaintiffs contend that Wal-Mart was the "kingpin" of the alleged enterprise because it selected the contractors with whom it did business, controlled the terms of floor,cleaning contracts, made payments for floor-cleaning services, and profited from the contractors’ use of undocumented workers. Opp’n at 21.22 (citing SAC ¶¶ 44, 47, 48, 52, 62, 63, 67, 94). Plaintiffs fi~her argue that because a single Wal’Mart employee suggested that a single contractor do business through multiple companies, nearly ten years ago, Wal-Mart somehow controlled the purported enterprise. Id. None of these allegations satisfies the "control", element of a RICO enterprise claim. To satisfy this element, Plaintiffs must allege that Wal-Mart conducted the enterprise’s affairs by directing the racketeering activity itself. See University of Md. at Baltimore v. Peat Marwick, Main & Co., 996 F.2d 1534, 1538-39 (3d Cir. 1993). The Second Amended Complaint does not allege that Wal,Mart directed any of the predicate acts of racketeering. At most, Plaintiffs suggest that Wal,Mart created the opportunity for the contractors’ actions by awarding floorcleaning contracts and then benefited from those actions by obtaining a service at below market price. The Third Circuit has held that condoning and benefiting from RICO violations does not constitute sufficient control of the enterprise’s affairs. Id__= Accordingly, the Second Amended Complaint fails on this additional independent ground, as well. IV. RICO CONSPIRACY In their Opposition Brief, Plaintiffs assert that "Wal-Mart does not contest that plaintiffs have sufficiently cured their RICO conspiracy pleading deficiencies." Opp’n at 44. That assertion is false. Wal-Mart has shown that Plaintiffs’ RICO conspiracy claim fails and should
- 24.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 30 of 38
be dismissed with prejudice because Plaintiffs (1) fail to plead a viable enterprise claim, (2) fail to plead the conspiracy with specificity, and (3) lack standing to pursue a RICO conspiracy claim. W-M Opening Br. at 38-39.
"Any claim under section 1962(d) based on a conspiracy to violate the other subsections of section 1962 necessarily must fail if the substantive claims are themselves deficient." Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1191 (3d Cir. 1993). As Wal-Mart has demonstrated, Plaintiffs’ underlying RICO enterprise claim is deficient and must be dismissed. As such, Plaintiffs’ RICO conspiracy claim is untenable. It would constitute legal error to hold (as Plaintiffs urge this Court to do) that Wal-Mart violated RICO by conspiring to commit alleged acts which, as shown, do not constitute predicate acts of racketeering and do not violate RICO’s enterprise provision. See Lum, 361 F.3d at 227 n.5 (affirming dismissal of§ 1962(d) conspiracy claim where plaintiff failed to plead a viable § 1962(c) enterprise claim).
Moreover, Plaintiffs have not pleaded the alleged conspiracy with the requisite level of specificity. As this Court previously held, although Plaintiffs allege that Wal-Mart knew of and benefited from the contractors’ illegal conduct, they have still "not alleged other than in conclusory fashion, adequate facts for this Court to reasonably infer that Wal-Mart agreed with co-conspirators to the commission, by co-conspirators and others, of RICO predicates, in furtherance of an unlawful enterprise." Zavala, 393 F. Supp. 2d at 317 (emphasis added).
Finally, Plaintiffs lack standing to pursue their RICO conspiracy claim because the only alleged harm, by their own admission, is the purported denial of overtime compensation and, in some instances, minimum wage. Opp’n at 2-3. These injuries arose, if at all, from noncompliance with the FLSA, a non-predicate statute. The Supreme Court has definitively ruled that, in such cases, "a person may not bring suit under § 1964(c) predicated on a violation of
- 25 -

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 31 of 38
§ 1962(d) for injuries caused by an overt act that is not an act of racketeering or otherwise unlawful under the statute." Beck v. Prupis, 529 U.S. 494, 507 (2000). Therefore, Plaintiffs’ allegation that Wal-Mart and its contractors conspired to engage in a scheme that was "intended to and did result in Wal-Mart’s janitors being underpaid," Opp’n at 2, does not and cannot confer standing to pursue a RICO conspiracy claim as a matter of law, Beck, 529 U.S. at 507.
CONCLUSION Plaintiffs cannot allege viable predicate acts of racketeering, establish standing to sue or plead the requisite elements of a RICO enterprise and conspiracy. Their Second Amended Complaint is largely redundant of their prior rejected RICO pleading and only confirms that this is not a proper RICO action. Granting Plaintiffs leave to re-plead their RICO claims would be a futile exercise and only further burden the Court and Wal-Mart with needless motion practice. The Third Circuit recently confirmed that dismissal with prejudice is appropriate under such circumstances. In Anderson, 396 F.3d at 270-72, the Third Circuit upheld dismissal of RICO claims with prejudice for lack of standing, holding that the claimed injury -- wrongful termination of employment -- was not directly caused by the alleged RICO predicate acts. Id__ Because the alleged RICO predicate acts were too remote from the claimed injury, the Third Circuit also held that it would be futile to grant plaintiffs leave to amend. Id__ at 271-72. As in Anderson, Plaintiffs’ only claimed injury here -- the purported denial of minimum wage or overtime compensation -- was not directly and proximately caused by any RICO predicate acts alleged against Wal-Mart. Such injury arose, if at all, as a result of contractor non-compliance with the FLSA -- a non-predicate statute. Moreover, even assuming Plaintiffs could ever allege viable immigration and money laundering offenses against Wal-Mart, such claims would be "too attenuated" to have caused Plaintiffs’ alleged wage injuries. And, in all events, Plaintiffs would
-26.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 32 of 38
have participated in and benefited from such predicate acts, severing any possible causal link.
Thus, the grounds for dismissing Plaintiffs’ amended RJCO claims with prejudice are even
stronger here than in Anderson.
For all of these reasons, Wal,Mart respectfully requests that the Court dismiss with
prejudice Counts One and Two of Plaintiffs’ Second Amended Complaint.
Dated: May 5, 2006
Respectfully submitted,
REED SMITH LLP A Limited Liability Partnership formed in the State of Delaware One Riverfront Plaza, First Floor Newark, NJ 07102-5400 Tele: (973) 621-3200 Fax: (973) 621-3199 Attomeys for Defendant Wal-Mart Stores, Inc.
By:. /s/Robert H. Bemstein ROBERT H. BERNSTEIN A Member of the Firm
Of Counsel:
David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street N,W. Washington, D.C. 20006-1238 Tele: (202) 303-1000 Fax: (202) 303-2000 Attorneys for Defendant Wal-Mart Stores, Inc.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 33 of 38 EXHIBIT 1

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 34 of 38

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CIVIL ACTION NO. 03-5309

VICTOR ZAVALA; ARTURO ZAVALA;

:

EUNICE GOMEZ; MAXIMILIANO

:

MENDEZ; CARLOS ALBERTO TELLO; :

ANTONIO FLORES; HIPOLITO

:

PALACIOS; OCTAVIO DENISIO;

:

MARTIN MACAK; PAVEL KUNC; HANA :

PFAUSEROVA; JIRI PFAUSER; TERESA:

JAROS; PETR ZEDNEK;.DANIEL

:

ANTONIO CRUZ; LUIS GUTIERREZ;

:

FILIPE CONDADO; ROLANDO ROMERO; :

ADIEL ROMERO RUIZ, on behalf of :

themselves and all other

simularly situated,

TRANSCRIPT OF PROCEEDINGS MOTION

Plaintiffs, v.

WAL-MART CORPORATION,

Defendant.

BEFORE:

Newark, New Jersey October 20, 2004
THE HONORABLE JOSEPH A. GREENAWAY, JR., U.S.D.J.

Pursuant to Section 753 Title 28 United States Code, the followiag transcript is certified ~o be an accurate record as taken st~ng~r~hically in the a~ ent~q~d procegdings.
THOMAS F. BRAZAITI~, C.S.R., O~ficf~’~durt P~orte~

THOMAS F. BRAZAITIS,

CSR, OFFICIAL COURT REPORTER,-NEWARK, N.J.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 35 of 38 2

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25

APPEARANCES:
LOUGHLIN & LATIMER BY: MICHAELENE LOUGHLIN, ESQ.
-AND-
GARCIA &KRICKO BY: MARY ANNE KRICKO, ESQ.
-AND-
COHEN, WEISS & SIMON BY: JAMES L. LINSEY, ESQ.
THOMAS CIANTRA, ESQ. ORIANA VIGLIOTTI, ESQ. Attorneys for the Plaintiffs
EPSTEIN, BECKER & GREEN BY: ROBERT H. BERNSTEIN, ESQ.
-AND-
WILLKIE, FARR & GALLAGHER BY: RANDY BRANITSKY, ESQ.
DAVID MURRAY, ESQ. Attorneys for the Defendant

THOMAS F. BRAZAITIS, CSR, OFFICIAL COURT REPORTER, NEWARK, N.J.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 36 of 38 99

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25

And all we have to show is that Wal-Mart, through its conduct, aided and abetted the contractors in doing these things that they’re accussed of in a verified, sworn complaint by federal and state government officials.
Now, we not only believe that we can obviously show that they aided and abetted all of these charges, but they, in fact, committed them themselves, and that’s what we charged them with in the complaint.
Now, counsel also said -- and focusing for a second on the hirin~ of i0 or more undocumented workers, counsel is correct, he’s correct in the -- in his reference to the Second Circuit case. Commercial Cleaning Services did say that, in order to prove that particular predicate act, you did need to show that the person came over the border with the intent to be hired and that the employer knew it.
Whether or not we can prove that in this case is premature at this stage. We believe that we can in good faith allege that they knew precisely that; that they knew that many of these undocumented workers walked over the border from Mexico or came in through irregular means, not through Dulles Airport, or whatever. But, again, that’s one particular offense, one particular predicate act in a whole litany.
Now, counsel also said that somehow it’s a requirement -- or somehow that all of the cases that we cite, including the Ninth Circuit case in Zircle Fruit, were where the

THOMAS F. BRAZAITIS, CSR, OFFICIAL COURT REPORTER, NEWARK, N.J.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 37 of 38
115

1

THE COURT: If you had to rank -- well, rank as far as

2

legal sufficiency, not what you like or what -- your two and

3

three best predicate acts that clearly would get past this

4

motion, what are they?

5

MR. LINSEY: Aiding and abetting as a general thing,

6

aiding and abetting harboring, because we know we allege --

7

certainly the contractors harbored. There’s a sworn government

8

complaint against the contractors for harboring. And we allege

9

that Wal-Mart aided or abetted in that harboring. Aiding and

i0

abetting transporting. And we allege that specifically. And

II

the transporting is, again, alleged against the contractors in

12

the sworn government complaint. And we have facts of that.

13

We have facts of Wal-Mart knowing where these people

14

-live. Wal-Mart -- for instance, Professor McGoffin in 1999, she

15

and the Wal-Mart manager went to the apartment where these

16

Russian citizens were living. They were sleeping on the floor,

17

whatever, in terrible conditions. And Mr. Taylor, the Wal-Mart

18

manager, went there, and then Greta McGraff wrote to the CEO of

19

Wal-Mart, David Glass, and told him exactly what was going on,

20

where they were being harbored.

21

Then what did Mr. Taylor do? He didn’t want these

22

people back in the store. He, in essence, discharged them. He

23

said, you’re not coming back in my store. Then he picked up the

24

telephone and called Stan Kostek, or his successor up in New

25

York, and ordered up another five Russians to come down.

THOMAS F. BRAZAITIS, CSR, OFFICIAL COURT REPORTER, NEWARK, N.J.

Case 2:03-cv-05309-JAG-MCA Document 108 Filed 05/05/2006 Page 38 of 38
116

1

We beli.eve it’s transporting undocumented workers. So

2

that’s a substantive offense, but at the very least it’s aiding

3

and abetting. So those would be amongst the strongest, your

4

Honor.

5

And also, obviously, encouraging to remain in the

6

United States unlawfully. And it’s basically the litany of

7

offenses at the last pages of the forfeiture complaint. We say

8

the very easiest thing we have to do is show that Wal-Mart aided

9

and abetted those criminal actions that the contractors are

I0

charged with. And we believe that we can also prove the

Ii

substantive offenses as well.

12

THE COURT: Okay.

13

MR. LINSEY: Thank you.

14

MR. MURRAY: Your Honor, I’ll try to keep this very

15

brief.

16

The injury that’s alleged here is overtime. You have

17

to have an employment relationship. They can’t make out the

18

elements of that.

19

And this reliance on the aiding and abetting, I would

20

simply point out, if you go back to page 132 of the forfeiture

21

action where they do list the offenses, they don’t have

22

romanette one, which is the smuggling. There’s something that’s

23

taken out. There’s ellipsis there. What is taken out if you

24

compare to statutory terms is has come to or entered.

25

So even there, your Honor, what the contractors are

THOMAS F. BRAZAITIS, CSR, OFFICIAL COURT REPORTER, NEWARK, N.J.

 
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Document 1

Filed 11/10/2003 Page 1 of 29

James L Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 206 Clairmont Avenue Montclair, NJ 07042 (973) 509-8900 - and330 West 42"d Street New York, New York 10036 (212) 563-0214
Gilberto Garcia GARCIA AND KRJCKO ATTORNEYS AT LAW 68 Summit Avenue Hackensack, New Jersey 07601 (201) 343-1124

FILED
11-10-03
AT 8:30 ~." ••• "••••••• "'. M WILLIAM T. WALSH CLERK

Della Bahan BAHAN AND ASSOCIATES 140 South Lake Avenue Suite 230 Pasadena, California 91 101 (626) 796-5100

Attorneys for Plaintiffs

UNJTED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

VICTOR ZAVALA, ARTURO ZAVALA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS and DCTAVIO DENISIO, all behalf of themselves and all others similarly situated,
Plaintiffs,
-against-

Civil Action :'10.
03-Civ.- ~ (::SA6)
CLASS ACTION COMPLAINT AND JURY DEMAND

WAL.MART CORPORATION, FACILITY SOLUTIONS INCORPORAnID, FACILITY SOLUTIONS INTERNATIONAL, MITCHELL

·' 4t " •, - -~

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C,..lase

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2:03-cv-05309-JAG-MCA

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Document 1

-Filed 11/10/2003

INDUSTRIES, LLC, RUTH AND SONS, LLC, JWM COMMERCIAL CLEANING, RT CLEANING, KENNETH CLANCY, GIOVANNI ALABENA, FELIPE SO'1'O, RAUL TIJERINO, and DOES 1-500,

Page 2 of 29

______________________________________D_e_f_e_n_d__a_n_t_s_. ______-x

CLASS ACTION COMPLAINT Plaintiffs Victor Zavala, Arturo Zavala, Eunice Gomez, Maximillano Mendez, Carlos Alberto Tello, Antonio Flores, Hipolito Palacios, and Octavio Dcnisio, on behalf of themselves and all others similarly situated, by and through tbeir attorneys Cohen, Weiss and Simon LLP, Garcia and Kricko, and Bahan and Associates, for their complaint state as follows:
INTRODUCTION 1. On October 23,2003, United States Immigration and Customs Enforcement officers raidcd multiple Wal-Mart Corporation ("Wal-Mart") retail locations in 21 states across the country arresting hundreds ofjanilors on alleged immigration violations, including the named plaintiffs Vidor Zavala, Arturo Zavala, Eunice Gomez, Maximiliano Mendez, Carlos Alberto Tello, Antonio Flores, Hipolito Palacios, and Oetavio Denisio. Simultaneollsly, on information and beliet~ ('ederal agents raidcd Wal-Mart's corporate headquarters in Bentonville, Arkansas seizing documents and materials as part of an on-going criminal investigation. On information and belief, Wal-Mart otIicials subsequently confirmed that the company has been advised by the U.S. Attorney for the Middle District of Pennsylvania that Wal-Mart is the object ora federal criminal investigation. This is an action by plaintiffs on their behalf and on behalf of all others similarly situated in the United States, under the
·2·

-,
. ,, Case 2:0" 3, -cv-05309-JAG-MCA l-

Document 1

•Filed 11/10/2003

Page 3 of 29

Racketeer influcnced COITUpt Organizations Act, 18 U.S.C. §1961 et seq., 42 U.s.C. §1985(3),

the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §201 et seq., the Civil Rights Act of 1871,42

U.S.C. § 1985(3), the t-lcw Jersey Wage and Hour Law ("NJWHA), NJ.S.A. 34:11-4.1 etseq.,

the New JeTscy Law Against Discrimination, N.J .S.A. 10:5-1 et seq., and common Jaw to seek

redress for damages directly caused by the exploitative criminal enterprise created by Wa1-Mart

and various of its janitorial contractors to systematically violate immigration and protective wage

and hour laws and other laws for their own profit and benefit.

JURISDICTION AND VENUE

2. This Court's jurisdiction is based upon 28 U.S.C. §§1331 and 1337; 18

U.S.c. §1964(c), and applicable principles of supplemental jurisdiction under 28 U .s.C.

§ \367(a).

3. Venue is proper in this judicial district pursuant to 28 U.S.C. §§ t191(b)

and (d); and 18 U.S.C. §J965.

THE PARTlE,S.

Plaintiff~

The Class Representatives

4. Plaintiffs Victor Zavala, Arturo Zavala, Eunice Gomez, Maximiliano

Mendez, Carlos Alberto Tello, Antonio Flores, Hipolito Palacios, and Octavio Denisio, are

residents of the State of New Jersey and are nationals of Mexico. These plaintiffs (the "Class

Representatives") seek to represent a class consisting of thousands ofjanitors, currently,

tonnerly, or in the future to be, employed to clean Wal-Mart stores. Each of the Class

Representatives worked tor Wal-Mart and one of its co-employer Contractor Defendants. At

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material times, the Class Representatives were employed within the jurisdiction ofthis Court.

S. Octavia Denisio is a native of Mexico. He was bom on November II,

1984. IIis immigration status is that of an undocumented alien who may be subject to

deportation from the United States at the initiative of the U.S. Citizenship and Immigration

Bureau of the Department of Homeland Security ("USCIS"). Denisio is presently released under

his own recognizance and was arrested pursuant to the October 23, 2003 raid by USCIS of the

Wal-Mart store located at Old Bridge, New Jersey. Denisio has performed cleaning services for

Wal-Mart tbr one year. Denisio was paid a lump sum weekly compensation of $350.00 and was

obligated by defendants to work 7 days a week. He worked at least 60 hours per week bllt did

not receive overtime pay. Denisio did not hav(l worker compensation or health insurance

benefits, was not entitled to receive sick leave or disability benefits and did not have taxes or

F.J.CA withheld from his pay.

6. Hipolito Palac;ios is a native of Mexico. He was born on August 13,

1979, His immigration status is that of an undoc\mlented alien who may be subject to deportation

(rom the United States at the initiative of USCIS. He is presently released under his own

recognizance and was arrested pursuant to the October 23, 2003 raid made by USCTS in the Wal·

Mart SlOre located at Piscataway, New Jersey. Palacios performed cleaning services for Wal-

Mart liJr 42 months. He was paid a lump sum weekly compensation or $350.00 and wa~

obligated by defendants to work 7 days a week. He worked at least 60 hours per week but did

not recei ve overtime pay. Palacios did not have worker compensation or health insurance

benefits, was not entitled to receive sick leave or disability benefits and did not have taxes or

F.I.C.A. withheld from his pay.

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7. Antonio Flores is a native of Mexico. He was born on June 13, 1978.

His immigration status is that of an undocumented alien who may be subject to deportation from

the United States at the initiative oftJSC1S. Florios is presently released ul1der his own

recogni:t.ance and was arrested pursuant to the October 23,2003 raid by USCIS of the Wal-Mart

store located at Piscataway, New Jersey. Flores has performed cleaning services j'Jr Wal-Mart jor

the preceding 24 months at Wal-Mart stores in New Jersey. Hc was paid a lump sum weekly

compensation of $400.00 amI was obligated by defendants to work 7 days a week. He worked at

least 60 hours per week but did not recdve overtime pay. Flores did not have worker

compemation or health insurance benefits. was not efltitled to receive sick leave disability

benefits and did not have taxes or F.l.e.A. withheld from his pay.

8. Carlos Alberto Tclio is a native ofM.:xico. He was born on September

9. 1979. His immigration status is that of an undocumented alien ,,·ho may b~ subject to

deportation Irom the United St;.Itcs at the initiative of USCIS. Tello is pres~ntly ~deaseci \mder
his own recognizance and was arrested pursuant to the October 23, 2003 raid made by uscrs in

the Wal-Mart stores located at Old Bridge, New Jerqey. Tello has performed cleaning services

for Wal-Mart for one year. He was paid a lump sum weekly compensation of$350.00 and was

obligated by deiendants to work 7 days a week. He worked at least 60 hours per week but did

not receive overtime pay. Tello did not have worker compensation or health insurancc benetits,

was not entitled to receive sick leave or disability benefits and did Ill,t have taxes or F.l.C.A.

withheld from his pay.

9. Maximilillno Mendez is a native of Mexico. He was born on May 11,

1984. His immigration status is that of an undocumented alien who may be subject to deportation

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from the United States at the initiative of USCIS. Mendez is presently released under his own

recognizance and was arrested pursuant to the October 23, 2003 raid by USCIS in the Wal-Mart

store loc·ated at Old Bridge, New Jersey. Mendez has performed cleaning services for Wal-Mart

for one year. He was paid a lump snm weekly compensation of$350.00 and was obligated by

defendants to work 7 days a week. He worked at least 60 hours per week but did not receive

overtime pay. Mendez did not have worker compensation or health insurance benefits, was not

entitled to receive sick leave or disability benefit~ and did not have taxes or F.I.C.A. withheld

from his pay.

10. Eunice Gomez is a native of Mexico. She was born on August 30, 1977.

Her immigration status is that of an undocumented alien who may be subject to deportation from

the United States at the initiative of USCIS. Gomez is pre8ently relea8ed under her own

recognizance and was arrested pur~uant to the October 23, 2003 raid made by USClS in the Wal-

Mart store located at Old bridge, New Jer~ey. Gomez. performed cleaning ,~ervices fi-lr Wal-!v[arl

for 29 months. She was paid a lump sum weekly compensation 01'$500.00 and was obJigated by

defendants to work 7 days a week. She worked at least 60 hours per week but did not receive

overtime pay. Gomez did not have worker compensation or health insurance bcnefit~, was not

entitled to receive sick leave Of disability benefits and did not have taxes Of F.l.C.A. withheld

from her pay.

11. Victor Zavala is a native of Mexico. He was born on May 9,1975. His

immigration status is thaI of an undocumented alien who may be subject to deportation from the

United States at the initialivc of USC IS. Victor Zavala is presently released under his own

recognizance and was arrested pursuant to the October 23, 2003 raid by USCIS in the Wal-Mart

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store located at Piscataway, New Jersey. He has performed cleaning services for Wal-Mart for

36 months. He was paid a lump sum W(lekly compensation of $500.00 and was obligated by

defendants to work 7 days a week. He worked at least 60 hours per week but did not receive

overtime pay. Victor Zavala did not have worker compensation or health insurance benefits, was

not entitled to receive sick leave or disability benefits and did not have taxes or F.I.C.A. withheld

from his pay.

12. Arturo Zavala is a native of Mexico, He was bom on February 10,

1974. His immigration status is that of an undocumented alien who may be and subject to

deportation from the United States at the initiative ofUSCIS. Arturo Zavala is presently released

under his own recognizance and was arrested pursuant to the October 23,2003 raid by USClS in

the Wal-Mart stores located at Old Bridge, New Jersey. lIe has pertormed cleaning services f()r

Wal-Mart tor IWO months. Arturo Zavala was paid a l\lmp SUIlI weekly t'nmpe.nsationof

$350.00 and was obligated by defendants to work 7 days a week. He worked at least 60 hours

per week but did not receive overtime pay. Arturo Zavala did not have worker compensation or

health insurance benefits, was not entitled to receive sick leave or disability benefit~ and did not

have taxes or F.l.e.A. withheld from his pay.

13. Felipe Condado is a native of Mexico. He was born on April 20, 1974.

1Ii~ immigration status is that of an undocumented alien who may be subject to deportation from

the United States at tl1e initiative of USCIS. Condado is presently released under his own
recognizance and was arrested pursuant to the October 23,2003 raid made by uscrs in the Wal-

Mart stores located at Old Bridge, New Jersey. Condado has pedbrmed cleaning services thr

Wal-Mart jt)r six months. He was paid a lump sum weekly compensation of $350.00 and was

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obligated by defendants to work 7 days a week. He worked at least 60 hours per week but did

not receive overtime pay, Condado did not have worker compensation or health insurance
benefits, was not entitled to receive sick disability benefits and did not have taxes or r .LC,A,

withheld from his pay.

Defcpdapts

14, On information and belief, Wal-Mart is a Corporation formed under the

laws of the State of Delaware with principal corporate offices in Bentonville, Arkansas, WaI-

Mart has aggressively followed a low cost, union-hostile, high volume sales strategy that has led

it to become the largest employer in the United States and the largest retailer in the world. Wal-

Mart operates hundreds of stores in all 50 states, including in Old Bridge, Bricktown and

Piscataway, New Jersey, where the named p!aintitTs were employed,

15, Deltmdants Facility Solutions Tncorporated, Facility Solutions

International and Mitchell Industries, LLC, are companies formed under the hlw, of the State of

New.Tersey with principal offices located at 44 Blackbone Hills, Glasbourough, New Jersey,

16, On information and belief, defendant Kenneth Clancy is the owner or

proprietor (together in some caSC$ with Brandon Clancy. Tyler Clancy or other family members)

of Facility Solutions Incorporated, Facility Solutions international and Mitchell Industries, LLc'

17. On information and bclict~ defendant Ruth and Sons, LLC, is, on

infon-nation and belief a company formed under the Jaw of the State of New Jersey. Defendant

Giovanni Alabena is a principal of Ruth and Sons LLC.

18. On infomlation and belief, defendant .JWM Commercial Cleaning is a

company formed under the laws orthe State of New .Jersey and its principal place of business is

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19. On information and belief, detendant Felipe Soto is the owner of

defendant JWM Commercial Cleaning and re~ides at 35 llnion Street, Dover, New Jersey.

20. On information and belief, defendant RT Cleaning is a company fonned

under the laws of the State of New Jersey and its principal place of business is located at 22

Charles Street. Apt. A-I, New Brunswick, New Jersey.

21. On information and beliet~ defendant Raul Tijerino is the owner or RT

Cleaning and resides at 35 Charles Street, Apt A-I, New Brunswick, New Jersey.

22. Defendants Kenneth Clancy, Facility Solutions Incorporated, Facility

Solutions International, Mitchell Industries, LLC, Ruth and Sons, LLC, JWM Commercial

Cleaning, RT Cleaning, Giovanni Alabena, Felipe Soto and Raul Tijerino art.' refern:d to

cl>llective1y a~ the ''Clancy Companies." The Clancy Companies acted ,,5 agc'tl\s fOT defendant

Wal-Mart in the hiring ofplaintiffs to p~rform cleaning servic<ls at the Wal-Mart storc:; in

Bricktown, Old Bridge and Piscataway, New Jersey.

23. Plaintiffs did not know Ih~ true names and capacities of the defendants

sued in this complaint as Doe~ 1-500, and therefore stle these defendants by such fictitiou~ I,ame~

and capacities. Plaintiffs will amend this Complaint with their true names and capacities when

they are learned. On infonnation and belief, each of Does \-500 have acted as agents for

defendant WaJ-Mart Corporation in the hiring and working of class members to perform cleaning

services at Wal-Mart stores across the United States.

24. Defendants Facility Solutions Incorporated, Fadlity Solutions

International, Mitchell Industries, LLC, ,1WM Commercial Cleaning, RT Cleaning ,Felipe Soto,

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Kenndh Clancy, Raul Tijerino, and Does 1-500 are referred to collectively as the "Contractor

Defendants").

CLASS ACTION ALLEGATIONS

25. The named plaintiffs, as class representatives, bring this action for

damages, injunctive and declaratory relief on their own behalf and on behalf of a class comprised

of all persons who have worked as janitors in the United States for om: or more of the defendants

and who were denied overtime pay and otherwise not provided the wages, benefits or protections

to which they are entitled by law.

26. The size of the class makes a class action both necessary and efficient.

The class consists of thousands of janitors employed at Wal-Mart stores throughout the United

States and an indefinite number ofjanitors who WtlfC employed or are to he employed i.n WalMart stores. IVlclll ber~ of the clas~ are ascertainable but are S(J numerous as to make joimkr

inherently impossible.

27. This case involves common questions oflaw and fact aftecting the rights of all class members, including: (a) the status ofplaimiffs as cmploy."es; (b) W,\!-Mart's ~tatus as

ajoint employer of plaintiffs; (c) whether Wal-I\·1art knew or should have known of the

Widespread violations offederal and state law suffered by janitors working in its stores; (d) the

status of the Contractor Defendants who acted as Wal-Mart's agents tor the purpose of securing

janitorial!abor; (e) whether Wal-Mart and the Contractor Defendants conspired in an effort to

bypass and subvert the legal protections to which plaintiffs are entitled, and (f) the relief

necessary to remedy the defendants' unlawful conduct as alleged in tl1is Complaint.

28. The claims of the named plaintiffs are typical of the claims of the class as

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a whole. The illegal wag~ practices that defendants have followed, as alleged in this Complaint

concerning the named plaintiffs in New Jersey, are typical oHhe illegal wage practices that have

and will continue to operate to the detriment of other class members nationwide.

29. The individual plaintiffs can adequately and fairly represent the interests

of the class as defined above, because their individual interests are c,onsistent with, not

antagonistic to, th~ interests of the class.

30. Counsel for plaintiffs possess the requisite resources and ability to

pros~cute this case as a class action and are experienced labor and employment attorneys who

have su~cessfully litigated other cases involving similar issues.

31. Defendants have implemented a scheme which is generally applicable to

the plaintiff c1a~s, making it appropriate to issue final injunctive relief and,corresponding

d"c/aratory r<;licf with respect to the class as a whole. Class corti t!cation is also appmpriate

because the common questions oflaw and fact predominate over any queslions affe~ting only

individual members oflhe class. Further, the prosecution of separate actions against defendants

by individual class members would create a risk of inconsistent or varying adjudications which

would e~tablish incompatible standards of conduct fbI' defendants. For all the,'e and other

r~asons, a class action is superior to other available methods for the fair and efficient

adjudication of the controversy set tbrth in this Complaint.

FACTUAL BASIS .FOR CLAIMS

The k'raudulent Scheme

32. Wal-Mart and the Contractor Defendants have engaged in and profited

from a nationwide fraudulent scheme designed to defraud the United States government through

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the non-payment of taxes and injure and exploit the plaintitls and those similarly situated

through wideseale violation of protective tederal and state labor and employment law. This

scheme dates back to at least 2000. Plaintiffs allege, on information and belieC that at material

times each Contractor Defendant was acting as a co-conspirator or agent of at all limes Wal-Mart

and, at various times, with other Contractor Defendants to pursue the scheme. On information

and belief, beginning in or before 2000, Wal-Mart entered into a conspiracy or conspiracies with

Contractor Defendants, similar in material respects to the conspiracy Wal-Mart entered into with

the Clancy Companies for the provision of janitorial services in several locations in New Jersey,

33. The essential elements ofthe fraudulent scheme are these, Wal-Mart

routinely makes use orthe labor of undocumented immigrants and recent documented

immigrants leglt! immigrants to perform necessary janitorial services nationwide. These workers

comefrolJ1 across the globe and present a ready pool of easily exploited labor. Driven by po~crty

and the lack of econl'mic opportunities at hon1e, they enter the United Status where they become

part of a labor terce Wal-Mart has testered and benefits frOlTI. On information and belief. Wal-

Mart has, as the joint employer of its janitorial services personnel, knowingly hired ill excess of

10 illegal aliens each year for the duration of the fraudulent scheme. The fraudulent scheme

relies on the cmployment of plaintiffimmigrants, failing to pay their wages and overtime and

benefits as required by federal and state law, and concealing their practices trom detection. All

of defendants' acts were in furtherance ofthis conspiracy and in so acting, each defendant was

acting within the scope of its agency and thus with the authori:7.ation ofthe remaining defendants.

34. An essential component oftht: scheme is an ef1i)rt to disguise Wal-Mart's

role as a joint employer of its janitors. Wal-Mart purposefully contracts maintenance and

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janitorial services through the Contractor Defendants, who are ostensibly independent entities, in

an effort to shield itself from the systematic labor law and immigration violations that are the

routine clements of how il obtains necessary janitorial services. On information and be1iel~ Wal-

Mart is and was fully aware of and acted to aid and abet the rampant violation of federal and state

law by the Contractor Defendants.

35. At all times material to this Complaint, Wal-Mart and the Clancy

Companics have actcd as joint employcrs with respect to the named plaintiffs, and Wal-Mart has

on information and belief acted as joint employer with Contractor Defendants with respect to the

class ofjanitors as a whole. Wal-Mart and particular Contractor Defendants have jointly

exercised meaningful control over the work performed by plaintiffs; jointly exercised meaningftll

control over plaintiffs' wages, hours and working conditions, including quality and quantity

standards, spt;ed. scbe,\uling and of the tasks plaintif£~ performed; jointly required that plaintiffs

perform work that is an integral part of deltmdants' business and jointly exerci~ed conlrol over

the plaintiffs such that all members of the class are dependent npon Wal-Mart as a matter of

economic reality and that Wal-Mart, together with the relevant Contractor Defendant(s), share

the power to set the plaintitTs' wages and determine their working conditions and jointly reap the

benefit~ from the underpayment of plaintiffs wages and non-compliance with other statutory

provisions governing their employment. Thus, while Wal-Mart employs a myriad of janitorial

contractors, it retains de facto control over the essential eJement~ ofthe employment relationship,

namely, the decision to hire and fire, the direction of pcrsotlllel in the tasks they are to pcrfi:mned,

the staJ1dards ofthcir pertormance and the hours of their work.

36. Wal-Mart was fully aware of and aided and abetted the rampant violation

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of immigration and labor law and other laws by its various janitorial contractors. As a practical

matter, the only commodity sold to Wal-Mart by the Contractor Defendants is plaintiffs' labor.

Since the plaintiffs receive no health, retirement, insurance, vacation, sick or bereavement or

Social Security benefits in connection with their employment, nearly all of the cost of

defendants' contracts with WaJ-Mart go 10 pay the plaintiffs, with the remainder proilting the

Contractor Defendants. On inlbmlation and belief. Wal-Mart is aware of the number of man-

hours necessary to dean its facilities to its standards. the staffing levels, the hours worked by the

plaintiffs on their premises and of the number ofjanitors employed at each location to do so. On

information and belief, Wal-Mart employs personnel whose duties include review, inspection

and oversight ofjanitorial services provided by plaintiffs. Thus, on information and belief, Wal-

Mart knows or should k.now that plaintiffs have been routinely underpaid for their labor.

37. On infomlation and helic±: Wal-Mart is aware or should reJ~llnably hav~

known of the systematic violation of immigration law by the Contractor D<lfendant~. Wal-Mart
management personnel are in continual contact with plainti nil in connection with tbeir review

and supervision of plaintiffs' work and are aware ofthe level ofser\'ice~ provided lind the hours

regularly worked by these cmployees and the costs of the underlying janitorial contracts. As is

alleged in paragraphs 38-56, infra, Wal·Mart was aware that janitorial contractors in New Jersey

were systematically hiring and employing illegal aliens at mulliple locations in that state.

Wal-Mart Enlists The Clancy Companies in New Jersey

3M. Pursuant to this fraudulcnt scheme, Wal-Mart contracted as an agent in

New Jersey the Clancy Companies to perform cleaning services at a number of different

locations over the past three years. On information and belief, the Clancy Defendants were able

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to underbid other cleaning service companies since their practice is to hire undocumented

immigrant workers who are paid less compensation than documented workers who are employed

in the industry. On information and belief, the Claney Companies were formed with the intent

and knowledge to hire foreign undocumented workers willing to perform cleaning services for

far less compensation than required under the FLSA or NJWHA. Furthermore, the Clancy

Companies, as part ofthe scheme, failed and refused to withhold or pay any payroll or income

taxes as required by New Jersey and fecicl'allaw. Under circumstances such as the ones

descrihed herein, the Clancy's Companies were able to obtainjanitorial contracts for several of

the stores Wal-Mart Corporation operated in the State of New Jersey.

39. On information and belief, Wal-Martjoined with the Clancy Companies

knowing that the Clancy Defendants would defraud the United States government and tl:c

persons employed to clean Wal-M~rt's New Jer~ey stores. Wal-Mart employed and con~r>'.cted

the companies owned by Kenneth Clancy with fu!1 knowledge that these cl)mpames would enter

into cleaning service ~grcements with Wal-Mart for far less monetary cOll8ideration that Wal-

Mart would pay a company that hired only documented workers. On information and holief,

Wal-Mart officers in charge of cleaning service contracts had knowledge that the Clancy

Defendants employed undocumented aliens since Kenneth Clancy wa~ not able to produce any

documentation tor his employees.

40. Wal-Mart decided to hide hehind the curtain that the Clancy Companies

would create by having the Clancy Companies, as Wal-Mart's agent, he facially responsible t~)r

hiring plaintiffs with the intention that liability would rest with the Clancy Companies for any

labor or inunigration law violations. As outlined below, in an attempt to further distance Wal-

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Mart from liability, Kenneth Clancy used different subcontractors to oversee the operation and

the employment performance of the plaintitTs.

Development of the Scheme in New .Jersey

41. Three years ago, in or about October of20aa, an individual, known as "EI

Caballito," who was working at the Wal-Mart store at Manahawkin, New Jersey, offered plaintiff

Victor Zavala employment as a cleaner at that store. An agent of Kenneth Clancy and of the

Clancy Companies, known as Roberto (last name unknown), himself a Colombian national, then

offered Victor Zavala another contract at a Wal-Mart store in Bricktown, New Jersey.

42. A number of undocumented immigrants worked at the Bricktown Wal-

Mart facility throughout the time Victor Zavala worked there. Victor Zavala initially worked for

less thim the minimum wage required by the FLSA and NJWHL. The payment II)r his services.

was in ca~h. All of the other i11~gal alien~ working at the Bricktown location were also paid in

cash. The ma.nager of the Wal-Mart store located in Manahawkin, New Jersey. St('phall G, knew

that there were undocumented immigrants wurking without employment authorization at his

store,

43. In or ahout July of2001, Kenncth Clancy hired a ncw supervisor Giovanni

Alahcna, of Ruth and Sons, LLC. Alahena oftered Victor Zavala the opportunity to us~ a crew to

perform the cleaning services at the Wal-Mart store in Old Bridge, New Jersey. Albena and

Kenneth Clancy knew and intended that Victor Zavala would rely upon undocumented Mexican

nationals to staff the Old Bridge operation. Indeed, Alhena and Kenneth Clancy knew and

intended that the operation be so statTed, to permit the Clancy Companies to obtain Wal-Mart's

business to their mutual profit and benefit.

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44. In or about February of2003, Alabena, offered Victor Zavala the

opportunity to contract another crew of workers at the Wal~Mart store in Piscataway. Albena

and Kenneth Clancy knew and intended that Victor Zavala would rely upon undocumented

Mexican nationals to staff the Piscataway operation. Indeed, Albena and Kenneth Clancy knew

and intended that the operation be so staffed, to permit the Clancy Companies to obtain Wal-

Mart's business to their mutual profit and benefit.

45. On information and belief, during all these relevant times, Kenneth Clancy

and the Clancy Companies, with the knowledge ofWal-Mart employees and managers,

continued to hire and employ undocumented workers in exces~ of 10 per year.

46 On information and belief, defendants furthered the aims and goals ofthe

conspiracy to defraud throllgh the routine use of the mails and means of wire cornmUllications.

On information and belie±: defendants use ofth" mails and means of wire communkation would

be reflected ill'.he bu~im:ss records of the Contractor Defendants and Wal-Mali which w\iuld he

in the possession of defendant~, if not in the custody or federal authorities. In particular, on

information and belief, contracts for janitorial services, invoices and correspondence related to

the provision of janitorial services were routinely sent by either mail or wire throughout the time

the conspiracy flourished.

47. Kenneth Clancy made the agreements for performance of 3ervices with

Wal~Mart and then through the Clancy Companies hired sulrcontractors which in turn paid the

undocumented aliens to perform the cleaning services in the Wal-Mart stores.

48. The named plaintifls as de~eribed above, worked from three years to three

months and during this time I) were paid in cash or with checks that did not have income, Social

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SeclIrity or Medicare taxes withheld, 2) were obligated to work a minimum of 60 hours per

week, 3) were obligated to work seven day, per week, 4) were not paid for overtime work as

required by law; 5) were not given vacation time; 6) were not provided with workmen's

compensation benellts, health insurance or sick leave, notwithstanding the fact that workplace

accidents occurred and some of the plaintiffs suffered from chronic illnesses. PlaintilTs worked

under these illegal and discriminatory circumstances described herein for a period of time,

commencing in or about October of 2000 and ending only with federal law enforcement raids on

October 23,2003. During all this time, defendant Kenneth Clancy carried on his operation

without providing any of the benefits plaintiffs were entitled to under federal and New Jersey

law. Officers, manager~ and agents ofWal-Mart knew that the above illegal and discriminatory

practices were OCCUlTing in the storcs where plaintiffs worked and, to further the conspiracy

hetween the Clancy Defendallt~ and in furtherancF. "rthe fraudulent scheme tkscrihcd hCl'ein,

ehose to continue doing busines~ with Kenneth Clancy and the Clancy COlnpanies.

The Scheme Bel:ins to Unravel in New ,Jersey

49. During August 2003, on infhrrnation and belief; Wal-Mart corporate
officials notified Kcnneth Clancy that imminent action was pending by uscrs, In an elTurt to

harbor the i11egal alien~ and protect the scheme, Clancy then arranged that the source of payment

to the plaintiffs would be changed to another entity. In particular, Kenneth Clancy contracted

with JWM Commercial Cleaning to supervise the work of the plaintiffs employed at the Wal-

Mart stores located at Old Bridge and Piscataway, New Jersey. Felipe Soto acted as direct

supervisor ofthe plaintifls. His responsibilities included making the payments to the plaintiffs

for their ~erviccs, dealing directly with any problems that arose with Wal-Mart supervisors,

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repair of machinery and all their admini~trative duties related 10 the servicing contracts.

50. In a further effort to preserve the scheme and harbor Ihe illegal aliens,

Kenneth Clancy also contracted with RT Cleaning, a company owned by Raul Tijerino to

supervise the performance of Felipe Soto.

51. Soto or Tijerino would pick up the named plainti ffs and drive them to their

places of work, al Wal-Mart stores in either Old Bridge or Piscataway, New Jersey.

52. Also begilllling in August 01'2003, and for the very tirst lime, defendant

Kenneth Clancy began to exhibit some concerns regarding the immigralion status of plaintiffs.

Heretofore, neilher Kenneth Clancy nor any other management orticials of the Clancy

Companies ever asked any oflhe named plaintiffs tbr any information regarding compliance

with laws and requirenlents regarding employment of aliens.

53. At one poinl, in or about August of 2003, Felipe Soto and Raul Tejerino

frantically hegan to ask plaintiff\; tor identification documents and sl)cial security numbt)r~ that

could be used to establish a legal right to work in the United Slate;. Thi5 was in furth.:;rance of

the conspiracy among Wal·Marl and the Clancy Companies and was intended to harbor the

plaintiffs ~ and the conspirators - from detection by law enforcement officials. When plajntiff~

confirmed that they did not have and could nol obtain sueh documentation, Soto and Tejerino

instructed them to buy fraudulent identification documents in Ncw York City to protect their

employment. Soto and Tejerino gave plaintiffs an October 24, 2003 deadline to comc up with

Identification documents.

54. Kcnneth Clancy offered to take plaintiffs tram New Jersey to New York

City to buy the fraudulenl identification documents. Kenneth Clancy advised plaintiff Victor

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Zavala that he should use his van and they would all go to New York to buy the false

identification and social security cards for the plaintiffs.

55. Plaintifis reJused to do so.

56. On October 23, 2003, federal law enforcement agent~ raided Wal"Mart

stores in J7 states, arresting close to 300 maintenance and janitorial personnel on immigration

violations, including plaintiffs.

COUNT ONE - RICO

57. Plaintiffs repeat and reallege each ofthc allegations contained in

paragraphs I through 56 as iffully set forth herein.

58. At all relevant times, eaeh of the plaintiffs were a "persons" within the

meaning of RICO. 18 U.S.C. §§1961(3) and 1964(c).

59. At all relevant time~. Wal-Mart and the Contractor Defendants were

"persons" within the meaning of RICO, 18 U.S.C. ~§1961(3) and J962(c).

60. At all relevant times, Wal-Mart and the Contractor Detcndants fonned an

association-in-fact for the purpose of profiting from a systematic violation of immigration and

labor, wage and hour laws and other laws. This a~sociation-in-fact was an "enterprise" within

the meaning of RlCO, 18 U.S.C. §1961(4).

61. At all relevant times., this enterprise was engaged in, and its activities

atTected, interstate and foreign commerce. within the meaning of RICO, 18 U.S.C. §1962(c).

62. At all relevant time~, each of the conspirators aS~llciatcd with thi~

enterprise conducted or participated, directly or indirectly, in the conduct of the enterpri~e's

afiairs through a "pattern ofracketeering activity" within the meaning of RICO, 18 U.s.c.

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§1961(5), in violation of RICO, 18 U.S.C. §1962(c).

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63. Specifically, at all relevant times, Wal-Mart, the Clancy Defendants and

Does 1-500 engaged in "racketeering activity" within the meaning of 18 U.S.C. §1961(1) by

engaging in the acts set forth above, and, in particular, in paragraphs 33,36,37,39,45,46,47,

48, 52, 53 and 54. The acts set forth in these paragraphs constitute a violation of one or more of

the following statutes: Mail Fraud, 18 U.S.C. §1341, Wire Fraud, 18 U.S.C. §1343 and Bringing

In or Harboring Certain Aliens undcr 8 {J .S.C. §§ 1324(a)(1 )(A)(iii) and 1324(a)( J)(A)(v)(I) and

(II). Each of the Conspirators committed andlor aided and abctted the commission oftwo or

more of these acts ofracketeering activity.

64. The acts of racketeering activity referred to in the previous paragraph

constituted a "patkrn ofrackcteering activity" within the meaning of 18 O.S.C. §196 J(5). The

acts alleged were related to each other by virtue of commOl1 participants, acornmon victim (the plaintiffs and those similarly gituated to them), a common method of commission and th,~

common purpose and c!)mmon re~ult or denying to plaintiffs the protections of wage and hour

and other prophylactic labor law~ and enriching Wal-Mart and the Contractor Defendants at thl.:

plaintiffs' expense. The fraudulent scheme continued for over three ye,trs until October 2003 and

threatened to continue longer but for a criminal investigation by the United States goverlUI1ent.

65. As a result of the Defendants violation of 18 U.s.C. § 1962(c), pJaintiff~

and those similarly ~ituated to them have heen harmed in tht, amolffil of many millions of dollars.

66. A~ a result of their miscondul;t, are liable to pJainti!Ts for their losses in an

amount to be detennined at trial.

67. Pursuantto RICO, 18 U.S.C. §J964(c), plaintiffs are entitled to recover

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threefold it~ damages plus costs and attorneys' fees from defendants. COl1NTTWO
RICO CONSPIRACY 68. Plaintiffs repeat and reallege each of the allegations contained in paragraphs I through 67 as if fully set forth herein. 69. At all relevant times, the plaintiffs and those similarly situated to them was each a "person" within the meaning of RICO, ISO.S.C. §§ 196\(3) and 1964(c). 70. At all relevant times, Wal-Mart and the Contractor Defen.dants were each a "person" within the meaning ofruCO, 18lJ.S.C. §§1961(3) and 1962(d). 71. At all relevant times, Wal-Mart and the Contractor Defendants fbrmed an association-in-fact for the pl.llpose of defrauding and injuring the plaintiffs and those Similarly situated to them. This ass(Jcialion·in-fact was an "enterprise" within the meaning of RICO, 18 U.S.C. §1961(4). 72. AI all relevant times, this enterprise was ellgaged in, and its activities affected, interstate and foreign commerce, within the meaning of RICO, 18lJ.S.C. §1962(c). 73. As set forth in Count One, at all rdcvant times, each of the persons associated with this enterprise conducted or participated, directly or indirectly, in the conduct of the enterprise's atTain; through a "pattern of racketeering activity" within the meaning of ruco, 18 U.S.c. §1961(S), in violation of RICO, 18 U.s.C. §1962(\~). 74. At all relevant times, Wal-Mart and the Contractor Defendants werc each associated with the enterprise and agreed and conspired to violate 18 U.s.c. §1962(c), that is, agreed to conduct and participate, directly and indirectly, in the l;onduct of the affairs of the

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aforementioned enterprise through a pattern of racketeering activity, in violation of 18 U.S.C.

§1962(d). Tn particular, each of these defendants agreed to commit two or more of the acts of

racketeering specified in paragraph 63.

75. The conspirators committed and caused to be committed a series of overt

acts, in furtherance of the conspiracy and to affect the objects thereot~ including hut not limited

to, the acts set forth above and, in particular, in paragraphs 33, 36,37, 39,45,46,47,48,52, 53

and 54.

76. As a result of the Conspirators' violations of 18 U.S.C. §1962(d), the

piaintiffs and those similarly situated were damaged in an amollnt equal to many millions of

dollars.

77. As a result of the conspiracy, Wal-Mart and the Contractor Defendants are

Hable to plaintil1'i I(lf their losses in an amount to be determined at triaL

78. j'ursuant to RICO, 18 U.S.c. §1964(c), plaintiffs are entitled to recover

threefold its dmnages plus costs and attorneys' ree~ from these defendants.

COUNT THREE

CONSPIRACY TO VIOLATE CIVIL RIGHTS UNDER 42 U.S.C. 81985(3)

79. Plaintiffs repeat and reallege paragraphs I - 78 hereof as sct forth fully

herein.

80. By their actions described above, deiendant Wal-Mart and the Contractor

Defendants conspired and acted with animus toward the plaintiffs as undocumented and

documented immigrants with the purpose of hindering and preventing federal and state officials

from performing their affirmative obligations to the plaintitIs, including but not limited to the

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obligations of these officials to insure that all employees in the United States are paid federal and

applicablc state statutory minimum wages and overtime, and that they enjoy minimum benefits

such as workers' compensation protection and Social Security coverage. Plaintiff" have been

injured in their persons and property and have been deprived of rights and privileges guaranteed

by the laws and Constitution ofthe United States. Accordingly, plaintiffs seek compensatory

damages and punitive damages from Wal-Mart and the Contractor Defendants for their violation

o!'the Civil Rights Act of 1871, 45 U.S.C. § 1985(3).

COUNT FOUR: f'AIR LABOR STANDARDS ACT 81. Plaintiffs repeat and reallege paragraphs J - 80 hereof as set forth Fully Iwrein. 82. Sections 6 and 7 oithe FLSA, 29 U.S.C. §§ 206 and 207, establish the right of all persons who are "suffered or permitted to work" to be paid a minimum wage for all hours worked and overtime pay at one and one-halftImes the person's regular rale Ibr all hOUTS worked in excess of forty hoUTs per week. Section 16(h) of the FLSA, 29 U.S.C. § 2l6(bj, entitles such persons to recover all unpaid wages plus interest, an equivalent amount as liquidated damages, and reasonable attorneys' fees and costs. At all times relevant t~l lhi~ aehon, defendants, and each of them, failed and retltsed to pay plaintiffs minimum wage for all hours works and the overtime premiums required by the FLSA, to plaintiffs' damage in amounts to be
proven at Irial. Plainli ffs Victor Zavala, Arturo Zavala, Eunice Gomez, Maximiliano Mendez,
Carlos Alberto Tello, Antonio Flores, Hipolito Palacios, and Octavio Denisio consent to be -24-

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parties to this action pursuant to FLSA 29 U .S.C §256.

83. Detendants' failure to provide compensation fiJr all hours worked by
plaintiffs with the knowledge, consent, and expectation of defendants' supervisors and other

managing agents constitutes a deliberate and willful violation of the FLSA.
84. The term "employee" is defined in the FLSA as "any individual employed

by an employer." 29 U.S.C. § 203(e)(I). An "employer" is defined broadly as "any person

acting directly or indirectly in the interest of an employer in relation to an employee." ld. §
203(d). The verb "employ" is defined expansively to mean "suffer or permit to work." rd. §

103(g). All members of the class are or were employees of one of the Contractor Defendants as

well as of Wal-Mart, for which he or she performed services within these definitions. At all material times, defendants have acted as plaintiffs' "employers" and are or were "(~mploying"

them wit!lin the l11"aning (,rlhe FLSA and under princij:,lc;. of C011111'0n la\\I. 85. As plaintiffs' joint employer, under common law and ~ta(utory dctlnitions,

Wal-Mart is jointly and severally liable for the plaintiff janitors' back pay, liquid,lted damages,

and other relief under the FLSA.

86. By virtue of defendants' unlawful failure and rdusal to pay plaintiffs

overtime wages and other wages and benefits to which they are entitled, plaintiffs have lost wages due to them in amounts to be proven at trial. Detendant~ are liable to the mcmb(;[s of the
class for class members' unpaid wages and liquidated dan1ages under FLSA § 2l6(b), attorneys'

fees and costs.

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COUNT FIVE:

NEW JERSEY WAGE AND HOUR LAW

(By those Plaintiffs Employed in New Jersey Aeainst the Clancy Companies and Wal-Mart)

87. Plaintiffs repeat and reallege paragraphs I - 86 hereof as set forth fully herein.
88. Section 5 of the NJWHL, N.J.SA §34: 11-56a4 establishes the right of all "employees" to be paid a minimum wage for all hours worked and overtime pay at one and onehalf times (he person's regular rate for all hour~ worked in exc.:ss of forty hours per week. Section 26 of the N1WHL, N.J.S.A. §34: 11-56a25, entitles such persons to recover in a civil action all unpaid wages plus interest and reasonable attorneys' fees and costs. At all times relevant to this action, defendants, and each of them, failed and rcthsed to pay piaintirrs minimum wage for all hours works and the overtime premiums required by the NJWHL, to plaintiffs' damage in amounts to be proven at trial.
89. TIle term "employee" is defined in the NJWHL to include as "any individual employed by an employer." NJ.8.A. § 34:11-56a1(h). An "employer" is deJined broadly as "any individual, partnership, association, corporation or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee." ]d. §34:11-56ai(g). Th", verb "employ" is defined expansively to mean "sutler or pennit to work." fd. § 34: 11·56a1(I). All named plaintiffs arc or were employees of one or the Clancy Companie~ as well as ofWal-Mart, for which he or she periixmed services within these definitions. At all material times, defendants have acted as plaintiff.~' "employers" and are or
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were "employing" them within the meaning ofthe NJWHA and under principles of common

law,

90. As plaintiffs' joint employer, under common law and statutory del1nitions,

Wal-Mart is jointly and severally liable for the plaintiffs' back pay, interest thereon and

attorneys' fees under the NJWHA.

91. By virtue of defendants' unlawful failure and refusal to pay plaintiffs

overtime wages and other wages and benefits to which the} are entitled, plainti tI.~ have lost

wages due to them in amounts to be proven at trial. Defendants Me liable to the members of the

class for class members' unpaid wages, interest and attorneys' lees under Sec.tion 26 of the

NJ.SA §34:11-56a25,

CQIJNT SIX:

Nt~JERSEY LAW AGAINST DISCRIMINATION

(By tho§e Plaintiffs Employed in New ,)Ilrs!;y Against the Clancy Companies and WIIi-Martl

herein.

92. Plaintiils repeat and rea1\ege paragraph$ I - 91 hereof as set forth fully

93. The New Jersey Law Against Discrimination (the "LAD"), N..l.S.A. 10:5I e/ seq" provides that is il unlawful discrimination for an employer, because 01; inter alia, national origin or nationality to discriminate against individuals in compensation or in terms, conditions or privileges of employment. N..I.S.A. 10:5-12 In the evcnt ofulllawfi.ll discrimination, thc LAD provides for compensatory and punitive damages. N.J.S,A, 10:5-3.

94. At all material times, defendants have acted as plaintiffs' "employer" and are or werc employing plaintiffs with the meaning of the LAD and under principles ofcommon

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95. At all times relevant to this action, defendants, and each of Ihem, failed and refused to pay piaintil1's minimum wage I'or all hours worked and failed and refused 10 pay plaintiffs overtime premiums as required by law. Through these and other actions specified above, defendants willfully violated the LAD by discriminating against plaintiffs in compensation, terms, conditions and privileges of employment by virtue ofplainliffs' status as Mexican nationals.

96. As plaintiffs' joint employer, under common law and statutory definitions Wal-Mart is jointly and severally liable for the plaintiffs' compensatory and punitive damages.

97. By virtue of defendants' unlawful discriminatory acts, plaintiffs have suffered economic losses due to lost wages owed to them in amounts 10 be proven at trial, as well as danJages du~ to physical and emotional stress.

DEMAND FOR JURY TRIAL

Plaintiffs hcreby re(juest ajury trial on all issu<:s so triable.

WHEREFORE, Plaintiffs pray Ibr relief in their favor:

(I) Certifying this case as a class action;

(2) Entering a judgmenl declaring the rights of Ihe parties;

(3) Entering preliminary and permanent injunctive relief prnhibiting defendants from further violations of law;

(4) Awarding the plaintiffs and all those similarly situated damages, including compensatory, treble and punitive danmges, in an amount to be determined at trial;

(5) Awarding plaintitls and all those similarly situated liquidated damages under Section 216(b) ofthe FLSA;

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(6) Awarding plaintiffs and all those similarly situated their reasonable attorneys' fees; and

(7) Awarding plaintiffs and all those similarly situated such further relief as the Court may deem appropriate.

Dated: Montclair, New Jersey November 10, 2003

0005269'::1)

Jame. L ;., Y
Tho as N. qantra COHEN, WEISS AND SIMON LLP 206 Clairmont Avenue Montclair, NJ 07042 (973) 509·8900 " and 330 West 42"" Street New York, New York toOJ6 (212) 563·021,1
Gilbt:rto Garcia GARCIA AND KRICKO ATTORNEYS AT LA W 68 Summit Avenue Hackensack, New Jersey 07601 (201)343-1124
Della Bahan BAHAN AND ASSOClA TES 140 South Lake Avenue Suite 230 Pasadena, California 91101 (626) 796-5100
Attorneys jur Plainti rfs
-29-

 
 393 F.Supp.2d 295 (2005)
Victor ZAVALA; Eunice Gomez; Antonio Flores; Octavio Denisio; Hipolito Palacios; Carlos Alberto Tello; Maximiliano Mendez; Arturo Zavala; Filipe Condado; Luis Gutierrez; Daniel Antonio Cruz; Petr Zednek; Teresa Jaros; Jiri Pfauser; Hana Pfauserova; Pavel Kunc; and
Martin Macak, on behalf of themselves and all others similarly situated, Plaintiffs, v.
WAL-MART STORES, INC., Defendant.
No. CIV.A.03-5309 JAG.
United States District Court, D. New Jersey.
October 7, 2005.
296789 *296 *297 *298 *299 Gilberto M. Garcia, Mary Ann Kricko, Garcia and Kricko, Attorneys at Law, Englewood Cliffs, NJ, James L. Linsey, Thomas N. Ciantra, Oriana Vigliotti, Cohen, Weiss and Simon LLP, New York, NY, for Plaintiffs.
Robert H. Bernstein, Reed Smith LLP, Newark, NJ, David P. Murray, Randy Branitsky, Willkie Farr & Gallagher LLP, Washington, D.C., for Defendant.
Michaelene Loughlin, Loughlin & Latimer, Hackensack, NJ, for Amicus Curiae Czech Republic.
OPINION
GREENAWAY, District Judge.
Plaintiffs are undocumented immigrants who have provided janitorial services at Defendant's retail stores nationwide. By this action, they assert claims against Defendant Wal-Mart Stores, Inc. ("Defendant" or "WalMart"), pursuant to the Racketeer Influenced Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962(c) and (d) (1996); the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 206 and 207 (1996); the Civil Rights Act of 1871 300 ("section 1985"), 42 U.S.C. § 1985(3) (1996); *300 and common law. Wal-Mart has moved to dismiss the entire complaint, pursuant to Fed.R.Civ.P. 12(b)(6). The motion is granted as to Plaintiffs' RICO and Section 1985 claims, and denied as to Plaintiffs' FLSA and common law claims.
BACKGROUND
Defendant Wal-Mart, by its own account, is the nation's largest private employer. (Defendant's Brief dated March 19, 2004 ("Def. Br."), at 2.) The named plaintiffs are undocumented immigrants who worked as janitors in various Wal-Mart retail store locations across the country. The allegations in the revised first amended complaint are accepted (and set forth below) as true for purposes of deciding this motion.[1]See FED. R. CIV. P. 12(b)(6); Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 (3d Cir.1994).
I. Law Enforcement Actions Against Wal-Mart
On October 23, 2003, four months before Plaintiffs filed their amended complaint in this Court, the United States Immigration and Customs Enforcement ("USICE") officers raided Wal-Mart retail stores in 21 states. (Revised Amended Complaint dated October 28, 2004 ("RAC"), at ¶ 2.) Federal agents who conducted these raids as part of "Operation Rollback" arrested hundreds of janitors, including 12 of the named plaintiffs, for alleged immigration violations. (RAC ¶ 2.) Federal agents also raided Defendant's headquarters in Arkansas and seized documents and materials in support of a criminal investigation by the United States Attorney of the Middle District of Pennsylvania.[2] (RAC ¶ 2.)

The janitors arrested as part of Operation Rollback were undocumented immigrants from Mexico, the Czech Republic, Mongolia, Brazil, Uzbekistan, Poland, Russia, Georgia, and Lithuania. (RAC ¶ 2.) The named plaintiffs resided in New Jersey, Texas, Alabama, Florida, Virginia, Michigan, and Connecticut. At least 10 of the immigrants arrested in Arizona and Kentucky were employed directly by Wal-Mart. (RAC ¶ 2.) Others were employed through maintenance contractors. (RAC ¶ 2.)
Operation Rollback was not the first raid on Wal-Mart stores or on its headquarters. Federal agents raided WalMart stores in St. Louis, Missouri in 1997 and 1998 and arrested janitors who had been working illegally in those stores. (RAC ¶ 42.)
In addition, on June 7, 2002, the United States raided numerous Wal-Mart stores and filed a Verified Complaint of Forfeiture ("Forfeiture Action"), in the Middle District of Pennsylvania against various contractors. (RAC ¶ 42.) The United States asserted that the contractors committed various criminal offenses 0907 indeed, the very same violations that Wal-Mart allegedly committed in this action. See infra. As a result of these raids, federal agents 301 arrested roughly 80 janitors believed to be undocumented immigrants *301 from Uzbekistan, Georgia, Armenia, Estonia, Russia, Bulgaria, Mongolia, Lithuania, Poland, and the Czech Republic. (RAC ¶ 42.)
This action is also not the first time that a Wal-Mart contractor is alleged to have participated in immigrationrelated offenses. (RAC ¶ 43.) On June 4, 2001, one of Wal-Mart's maintenance contractors pled guilty in federal court to charges that she had harbored illegal aliens and committed related offenses. The contractor received a 7 month sentence and was fined $2,000. (RAC ¶ 43.) At that time, a spokesperson for Wal-Mart denied having any knowledge of the company's use of undocumented labor. (RAC ¶ 43.)
Plaintiffs allege that, based on this history, Wal-Mart was aware that it was, and has been, employing unlawfully, hundreds of undocumented immigrants for janitorial positions, notwithstanding its frequent and nationwide use of maintenance contractors. (RAC ¶ 41.) Because of this alleged pattern of conduct, Wal-Mart has been under investigation by federal law enforcement authorities for over five years. (RAC ¶ 42.)
II. The Alleged Criminal Enterprise
Plaintiffs allege that they were harmed by an ongoing "exploitative criminal enterprise" (herein the "Wal-Mart Enterprise") comprised of Wal-Mart and its various maintenance contractors, acting as Wal-Mart's coconspirators or agents. (RAC ¶¶ 1, 36, 40.) Plaintiffs claim that the Wal-Mart Enterprise systematically employed, harbored, and trafficked in the labor of immigrants, aided and abetted violation of the immigration laws, failed to pay their wages and overtime and benefits as required, and concealed their profits and practices from detection. (RAC ¶¶ 1, 36, 57.)
More specifically, the Wal-Mart Enterprise operated as follows: participants in the Wal-Mart Enterprise violated the immigration laws to secure workers who could be exploited easily based on their undocumented status. It targeted, encouraged, harbored, trafficked, and employed undocumented aliens, specifically because they were a vulnerable population. (RAC ¶¶ 36, 39, 46, 47.) The Wal-Mart Enterprise exploited them in any number of ways 0907 by obligating them to work in excess of the statutory maximum number of hours, every day of the week, denying them of lawful pay and benefits under the FLSA, as well as time for sick leave, meals or breaks, and paying them in cash without withholding payroll taxes. (RAC ¶ 41). The Wal-Mart Enterprise also easily could, and did, hide them from law enforcement authorities, by threatening them with deportation or locking them into the stores for the duration of their shifts. (RAC ¶ 41.)
Plaintiffs allege that, regardless of whether the janitors were hired directly by Wal-Mart or by a contractor, the terms of employment were illegal, and the same. (RAC ¶ 41.) Plaintiffs further allege that the Wal-Mart Enterprise used the mails and wire in order to operate the scheme, and concealed and prolonged the existence of the enterprise by money laundering. (RAC ¶ 41.)

STANDARD OF REVIEW
On a motion to dismiss, pursuant to Rule 12(b)(6), the court is required to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and to view them in the light most favorable to the non-moving party. See Oshiver, 38 F.3d at 1384. The question is whether the claimant can prove 302 any set of facts consistent with his or her allegations that will entitle him or her to *302 relief, not whether that person will ultimately prevail. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).
While a court will accept well-pled allegations as true for the purposes of the motion, it will not accept unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of actual allegations. See Miree v. DeKalb, 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977). Moreover, the claimant must set forth sufficient information to outline the elements of his claims or to permit inferences to be drawn that these elements exist. See FED. R. CIV. P. 8(a)(2); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).
In deciding a Rule 12(b)(6) motion, the court may consider the allegations of the complaint, as well as documents attached to or specifically referenced in the complaint, and matters of public record. See Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 259 (3d Cir.1998); see also 5A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 1357 (3d ed.2004). "Plaintiffs cannot prevent a court from looking at the texts of the document on which its claim is based by failing to attach or explicitly cite them." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997).
DISCUSSION
Defendant Wal-Mart has moved to dismiss the complaint in its entirety. There are five counts to the complaint, which seek relief pursuant to: (1) RICO, 18 U.S.C. § 1962(c) (Count 1); (2) RICO conspiracy, 18 U.S.C. § 1962(d) (Count 2); (3) 42 U.S.C. § 1985(3) (Count 3); (4) FLSA, 29 U.S.C. §§ 206 and 207 (Count 4); and (5) common law false imprisonment (Count 5). For the reasons set forth below, this Court grants Defendant's motion with respect to Counts 1, 2, and 3, and denies the motion with respect to Counts 4 and 5.
I. Count 1 0907 RICO Enterprise Claim
Plaintiffs allege that Wal-Mart and its contractors formed an unlawful "Wal-Mart Enterprise," in the form of an association-in-fact, for "the purpose of profiting from a systematic violation of immigration and labor, wage and hour laws and other laws." (RAC ¶ 64.) Plaintiffs assert that the members of the Wal-Mart Enterprise conducted the affairs of the enterprise "by employing, harboring, and trafficking in the labor of the plaintiff immigrants, failing to pay their wages and overtime and benefits as required by federal and state law, and concealing their profits and practices from detection." (RAC ¶ 36.) More specifically, they allege that Wal-Mart and its maintenance contractors engaged in, or aided and abetted, various racketeering activities, including: harboring, transporting, and encouraging undocumented aliens; conspiring to commit these immigration law violations; committing these immigration law violations for financial gain; involuntary servitude; money laundering; and mail and wire fraud. (RAC ¶ 67.) These activities are alleged to constitute a "pattern of racketeering" within the meaning of RICO, and since 1996 and continuing to the present, "were related to each other by virtue of" common participants, victims, method of commission, and purpose. (RAC ¶ 68.) The alleged result of these activities has been to deny Plaintiffs the protection of wage and hour laws and other laws in order to "enrich Wal-Mart" at Plaintiffs' expense. (RAC ¶ 68.)
Wal-Mart argues that Plaintiffs lack standing to assert a RICO enterprise claim in Count 1 of the complaint, since 303 the injuries were not caused proximately by the alleged RICO activities and because *303 the plaintiffs were not
harmed by, but in fact benefitted from, the alleged racketeering activity.[3] Wal-Mart further contends that Plaintiffs' RICO claim also fails because they failed to plead a "separate and distinct" enterprise, Wal-Mart's

"operation or management" of the enterprise, and "viable predicate offenses," each of which are necessary for a RICO claim to survive. (Def. Br. at 4.)
For the reasons set forth below, this Court concludes that Plaintiffs have not alleged two underlying predicate acts sufficient to state a RICO claim. Accordingly, this Court need not address each of Wal-Mart's bases in support of dismissal of this claim at this time. Wal-Mart's motion to dismiss Count 1 shall be granted, and Count 1 shall be dismissed without prejudice. Because this Court cannot conclude that amendment would be futile, Plaintiffs shall have the opportunity to amend Count 1, if they so choose, within 45 days of the entry of this Opinion.
A. Relevant Law
It is unlawful "for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce." 18 U.S.C. § 1962(b); see also Lum v. Bank of Am., 361 F.3d 217, 223 (3d Cir.2004) (stating that, to plead a RICO claim, a plaintiff must allege: (1) conduct; (2) of an enterprise; (3) through a pattern; (4) of racketeering activity).
A "person" is "any individual or entity capable of holding a legal or beneficial interest in property." See 18 U.S.C. § 1961(3). An "enterprise" includes "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4).
A "pattern of racketeering activity" requires "at least two acts of racketeering activity," as defined at 18 U.S.C. § 1961(1).[4]See 18 U.S.C. § 1961(5). "Racketeering activity" includes any act which is indictable under 18 U.S.C. § 1341 (mail fraud); 18 U.S.C. § 1343 (wire fraud); 18 U.S.C. § 1956 (money laundering); and 18 U.S.C. §§ 1581-1588 (peonage and slavery). See 18 U.S.C. § 1961(1)(B). It also encompasses "any act which is indictable under the Immigration and Nationality Act, section 274 (relating to bringing in and harboring certain aliens), section 277 (relating to aiding or assisting certain aliens to enter the United States), or section 278 (relating to importation of alien for immoral purpose) if the act indictable under such section of such Act was committed for the purpose of financial gain." See 18 U.S.C. § 1961(1)(F).
B. Sufficiency of Allegations of Predicate Acts
In order to state a claim for relief under RICO, Plaintiffs must allege that Wal-Mart engaged in at least two underlying predicate acts of racketeering, as enumerated in the statute. See 18 U.S.C. § 1961. Plaintiffs allege that Defendant engaged in the following predicate acts:
304 *304 (1) transporting undocumented aliens, 8 U.S.C. § 1324(a)(1)(A)(ii);
(2) harboring undocumented aliens, 8 U.S.C. § 1324(a)(1)(A)(iii);
(3) encouraging undocumented aliens to reside in the United States, 8 U.S.C. § 1324(a)(1)(A)(iv);
(4) conspiring to transport, harbor, and encourage illegal aliens to reside in the United States, 8 U.S.C. § 1324(a) (1)(A)(v)(I);
(5) aiding and abetting the transportation, harboring and encouraging of illegal aliens to reside in the United States, 8 U.S.C. § 1324(a)(1)(A)(v)(II);
(6) committing the above offenses for financial gain, 8 U.S.C. § 1324(a)(1)(B)(i)[5];
(7) engaging in a pattern and practice of hiring and employing illegal aliens, 8 U.S.C. § 1324(a)(3)(A);
(8) involuntary servitude, 18 U.S.C. § 1584;
(9) money laundering of the proceeds of the criminal acts, 18 U.S.C. §§ 1956(a)(1)(A)(i); 1956(a)(1)(B)(i), 1956(a) (1)(B)(ii), 1956(a)(3)(A), 1956(a)(3)(B), and 1956(a)(3)(C); and
(10) mail and wire fraud, 18 U.S.C. §§ 1341 and 1343.

(RAC ¶ 37.) Because Plaintiffs' allegations do not support the existence of at least two predicate acts to support a substantive RICO claim under § 1962(c), Wal-Mart's motion to dismiss the RICO claim is granted, and Plaintiffs' RICO enterprise claim is dismissed without prejudice.
1. Immigration Predicate Acts
Plaintiffs assert that the "parties who make up the Wal-Mart Enterprise participated in its affairs" by committing various immigration-related predicate acts, including transporting, harboring, and encouraging Plaintiffs, aliens who are unlawfully present in the United States, as well as by conspiring to commit, and aiding and abetting, these predicate acts. (RAC ¶ 37.) More specifically, Plaintiffs allege that maintenance contractors transported, harbored, and encouraged Plaintiffs, and that Wal-Mart, with knowledge of Plaintiffs' unlawful status, "condoned" and "aided and abetted" these activities. (RAC ¶ 44.) The allegations that Wal-Mart, as part of the Wal-Mart 305 Enterprise, engaged in, aided and abetted,[6] or conspired[7] to commit, *305 these immigration predicate acts are insufficient to state a claim against Wal-Mart. The allegations that Wal-Mart also committed the predicate act of hiring ten or more employees who were brought illegally into the United States are also deficient. This Court addresses the deficiencies of each of these predicate acts below.
a. Transporting
Violation of the prohibition against transporting requires proof that: (1) the alien was unlawfully present in the United States; (2) the defendant knew or recklessly disregarded the fact that the alien was in violation of the law; (3) the defendant knowingly transported or moved, or attempted to transport or move, the illegal alien "by means of transportation or otherwise"; and (4) the transporting or moving was done in furtherance of the alien's illegal presence in the United States. See 8 U.S.C. § 1324(a)(1)(A)(ii); United States v. Romero-Cruz, 201 F.3d 374, 378 (5th Cir.2000); United States v. Diaz, 936 F.2d 786, 788 (5th Cir.1991).
Based on a review of the complaint, it appears that Plaintiffs have not alleged sufficient facts from which this Court could infer that Wal-Mart violated the prohibition against transporting. Although Plaintiffs appear to have alleged sufficient facts concerning the first two elements of the offense of transporting (RAC ¶¶ 2, 3, 4, 40, 42, 44), their allegations with respect to the third and fourth elements fall short. More specifically, the allegations of transporting or attempted transporting of aliens unlawfully present in the United States, in furtherance of their illegal presence, are insufficient, if not altogether absent. The allegation that most closely approximates an assertion of transporting states:
Upon [Plaintiff Kunc's] arrival he was met by a Wal-Mart contractor named Patrick (last name unknown) who transported Kunc to suburban Virginia where he was lodged and put to work at Wal-Mart. Wal-Mart management knew that Kunc was an alien without work authorization, yet, consistent with the aims of and tactics employed by the Enterprise, Wal-Mart continued to employ Kunc as a janitor in its stores. On information and belief, this contractor and many others operating in the Wal-Mart Enterprise, encouraged, assisted and facilitated the entry and transport of many other undocumented foreign nationals to the United States and employment in Wal-Mart.
(RAC ¶ 44.) Based on these allegations, this Court cannot conclude that Plaintiffs have stated a claim of unlawful transporting against Wal-Mart.
Furthering an illegal presence, for purposes of stating the predicate act of transporting, involves more than transporting the undocumented worker to his or her place of employment. See, e.g., System Mgmt., Inc. v. Loiselle, 91 F.Supp.2d 401, 411 (D.Mass.2000); United States v. Moreno-Duque, 718 F.Supp. 254, 258-59 (D.Vt.1989) (both stating that allegations of merely transporting aliens to work is insufficient for purposes of stating a claim of transporting); see also United States v. Chavez-Palacios, 30 F.3d 1290, 1294 (10th Cir.1994) (stating that "mere transportation of an illegal alien is, without more, insufficient as a matter of law to support a conviction under this statute"). Here, even if this Court assumes the truth of Plaintiffs' allegations, namely, that Wal-Mart hired Plaintiffs, with knowledge or reckless disregard for their unlawful immigration status, they are 306 insufficient to support the claim that Wal-Mart transported *306 aliens in violation of 8 U.S.C. § 1324(a)(1)(A)(ii).

Furthermore, Plaintiffs also have not alleged sufficient facts that reasonably suggest that Wal-Mart conspired to further an alien's illegal presence or aided and abetted that illegal presence. See 8 U.S.C. § 1324(a)(1)(A)(v)(I). According to the allegations related to Plaintiff Kunc, a Wal-Mart contractor "and many others ... assisted and facilitated" the transport of undocumented workers and their employment at Wal-Mart stores. (RAC ¶ 44.) However, based on a review of the pleadings, it is unclear how Wal-Mart conspired to transport and further the illegal presence of aliens.
In addition, for purposes of alleging a claim of aiding and abetting, Plaintiffs must allege facts regarding WalMart's participation in the offense, i.e., what "affirmative conduct" it undertook to "aid the venture." Romero-Cruz, 201 F.3d at 378; 8 U.S.C. § 1324(a)(1)(v)(II).[8] In Romero-Cruz, the court affirmed the defendant's convictions for transporting illegal aliens, because there was evidence that the defendant had engaged in "affirmative conduct designed to aid in the venture of transporting the aliens further north." 201 F.3d at 379. In Romero-Cruz, the trial evidence indicated that the defendant had driven a pickup truck to a motel, "conversed with a group of aliens after they signaled to him, and directed them to lie down in the truck ... [and] retained control of the truck until [another person] arrived ... [and] talked with someone in [a] blue car before climbing into the passenger cab of the truck." Id.
By contrast, in this case, Plaintiffs have not alleged sufficient facts to state a claim that Wal-Mart conspired to commit, or aided and abetted, this particular predicate act. In their opposition brief, Plaintiffs argue, in conclusory fashion, that "Wal-Mart ... aided and abetted [immigration predicates]" (Pl. Br. at 28), but they do not allege facts in the complaint to show that Wal-Mart conspired to commit unlawful acts of transporting, or what affirmative steps or aid Wal-Mart provided to the unlawful transporting of aliens.
Accordingly, Plaintiffs cannot rely upon transporting, conspiring to transport, or aiding and abetting the transport of, undocumented workers as one of the predicate acts constituting a pattern of racketeering necessary to state a RICO claim.
b. Harboring
Plaintiffs also have not alleged sufficient facts to support the predicate acts of harboring, conspiracy to harbor, or aiding and abetting the harboring of, undocumented aliens. The predicate act of harboring requires a showing that the defendant: (1) knows or recklessly disregards the fact that an alien is illegally in this country; and (2) conceals, harbors, or shields, or attempts to conceal, harbor or shield, the alien from detection. See 8 U.S.C. § 1324(a)(1)(A)(iii).
Where, as here, the statute does not define certain of its terms, courts rely on the ordinary definitions of those terms. See, e.g., United States v. Zheng, 306 F.3d 1080, 1085 (11th Cir.2002) (stating that terms of a criminal statute that are not defined statutorily are ascribed their ordinary or natural meaning, and relying on dictionaries 307 and "common sense" to interpret undefined terms); United States v. Yoshida, 303 F.3d 1145, 1151 (9th Cir. *307 2002) ("In the absence [of a statutory definition], we construe a statutory term in accordance with its ordinary or natural meaning.") (quoting FDIC v. Meyer, 510 U.S. 471, 476, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994)). Thus, to "harbor" is to "give shelter or refuge to" or "to be the home or habitat of"; to "conceal" is "to prevent disclosure or recognition of" or "to place out of sight"; and to "shield" is to "protect with or as if with a shield" or "provide with a protective cover or shelter" or "to cut off from observation" or "hide." See Merriam-Webster On-Line Dictionary, http://www.merriamwebster.com. None of the allegations sufficiently allege these acts.
It is difficult to determine which allegations address concealment or shielding.[9] The relevant allegations concerning harboring, however, relate to the facts surrounding the conviction of a former Wal-Mart contractor (RAC ¶ 43), and to Plaintiff Kunc, who was "lodged" and then "put to work" by another Wal-Mart contractor. (RAC ¶ 44.)
These allegations are insufficient. For example, providing housing and employment may constitute "harboring" for "financial gain," but this is not what has been alleged against Wal-Mart. Zheng, 306 F.3d at 1083 (involving undocumented aliens who lived in the defendant's house, without paying rent, and worked at the defendant's

restaurant six days a week, twelve hours a day). Harboring also might be alleged where, in addition to employing undocumented aliens, a store owner, for example, also provides a back room of the store as a residence. See United States v. Singh, 261 F.3d 530, 533 (5th Cir.2001). Here, however, Plaintiffs allege that Wal-Mart hired, and continued to employ, Kunc, despite its knowledge that Kunc was not authorized to work in the United States, not that Wal-Mart harbored illegal aliens. A contractor's "lodging" of an undocumented worker and "putting him to work" falls short of alleging that Wal-Mart sheltered undocumented aliens for the purposes of concealing them and avoiding their detection by immigration authorities. While this Court might infer from the allegations in the complaint that Wal-Mart recklessly disregarded the illegal status of Plaintiffs when it employed them as janitorial or maintenance workers at their various retail locations, it is unclear what alleged conduct by Wal-Mart might constitute the concealing, harboring or shielding of illegal aliens from detection.
Setting aside the insufficiency of the allegations concerning whether Wal-Mart was involved directly in harboring Kunc, or other plaintiffs in this action, it also is unclear how Wal-Mart aided and abetted acts of harboring. At most, Plaintiffs have alleged that Wal-Mart "continued" its association with its maintenance contractors and its employment of undocumented workers as janitors in its stores. (RAC ¶ 43.) In sum, these allegations are insufficient to state a claim of harboring, conspiracy to harbor, or aiding and abetting harboring.
c. Encouraging
To state an encouraging claim, a plaintiff must allege that: (1) the defendant encouraged or induced an alien to 308 come to, or remain in, the United States; *308 and (2) while knowing or recklessly disregarding the fact that
coming to, or remaining in, the United States would be, or is, unlawful. See 8 U.S.C. § 1324(a)(1)(A)(iv). Various acts may amount to encouraging. For example, providing aliens with information at an airport about their departure for the United States, concealing the baggage check claims of the aliens, and leading them to the boarding gate for departure to the United States, taken together, has been sufficient to prove unlawful encouraging under § 1324(a)(1)(A)(iv). Yoshida, 303 F.3d at 1150-51. Encouraging may also consist of taking actions to "convince the illegal alien to come to this country or to stay in this country." United States v. Oloyede, 982 F.2d 133, 137 (4th Cir.1992).[10]
In this case, Plaintiffs allege that "contractors who supplied janitorial labor to Wal-Mart encouraged foreign nationals to enter the United States through promises of employment placed in various media outlets." (RAC ¶ 44.) Plaintiffs further allege:
[P]laintiff Kunc was encouraged to enter the United States to work illegally through media advertisements run in his native Czech Republic in February 2003 that promised employment in the United States for a fee of $1,500. When Kunc responded to the ad, a Wal-Mart contractor instructed him to fly to Washington, D.C. ... On information and belief, this contractor and many others operating in the Wal-Mart Enterprise, encouraged, assisted and facilitated the entry and transport of many other undocumented foreign nationals to the United States and employment in Wal-Mart....
(RAC ¶ 44.) These allegations implicate a particular Wal-Mart contractor, but do not state a claim against WalMart for encouraging, conspiracy to encourage, or aiding and abetting the encouraging of illegal aliens. See 8 U.S.C. § 1324(a)(1)(A)(v)(I)-(II). As alleged, Wal-Mart hired undocumented workers to fill its janitorial and maintenance positions, but the complaint fails to allege, as it must, that Wal-Mart took affirmative steps to assist Plaintiffs to enter or remain unlawfully in the United States, or that Wal-Mart agreed to undertake conduct with the purpose of unlawfully encouraging undocumented aliens.
d. Hiring Aliens Brought into the United States
Plaintiffs also seek to allege that Wal-Mart hired aliens brought into the United States, in violation of 8 U.S.C. § 1324(a)(3)(A). Under this provision, any person "who, during any 12-month period, knowingly hires for employment at least 10 individuals with actual knowledge that the individuals are aliens described in subparagraph (B) shall be fined under Title 18, or imprisoned for not more than 5 years, or both." Subparagraph

(B) defines an "alien" as an alien who "is unauthorized... and has been brought into the United States in violation of this subsection." 8 U.S.C. § 1324(a)(3)(B) (emphasis added).[11]
309 *309 The allegations in support of this predicate act are insufficient because § 1324(a)(3)(A) reaches the employment of those aliens as defined in subparagraph (B), and Plaintiffs' allegations fall short of meeting the statutory definition of "alien" at subparagraph (B).
Subparagraph (B) requires Plaintiffs to allege that Wal-Mart had actual knowledge that the aliens not only were "unlawfully present in the United States," but also were "brought into the United States in violation of this subsection." Here, Plaintiffs have not alleged sufficient facts to meet the latter element. In Loiselle, 91 F.Supp.2d at 408, the plaintiffs had asserted § 1324(a)(3) as a predicate act in support of their RICO claim against the defendant, but the claim was dismissed for the same deficiency. Loiselle concluded that, although the plaintiffs had alleged that the defendant knew of the aliens' illegal status, they had omitted "any factual allegation as to how the aliens had been brought into the United States and that they were brought into the United States in violation of this employment provision." Id. Loiselle further decided that the claim had to be dismissed, because "for liability to attach ... the aliens [must] have been brought into the country by an employer for the purpose of illegal employment" and the plaintiffs were required to allege that the defendant "had knowledge of how the aliens had been brought into the United States and that they were brought into the United States in violation of this employment provision." Id. The latter requirement was justified because, as Loiselle observed, § 1324(a)(3) was part of Section 274 of the Immigration and Nationality Act ("INA"), which is entitled (and intended to reach) "Bringing and harboring certain aliens." Section 274 should be distinguished from Section 274a of the INA, which is entitled (and governs) "Unlawful employment of aliens," and which is not a RICO predicate act. Id. at 408-09.
This Court agrees that this particular predicate act requires a showing of actual knowledge that the aliens were brought into the United States for the purpose of obtaining unlawful employment. The text of § 1324(a)(3) itself requires that the defendant have actual knowledge that the employee is an alien 0907 as that term has been defined in subparagraph (B) 0907 which means that the defendant must have knowledge of not only the alien's unauthorized presence but also that the alien "has been brought into the United States in violation of this subsection." There are no such allegations in the complaint to support this latter element.
In addition, the fact that the provision falls within the section of the statute that covers the "bringing" of aliens to the United States reflects the importance of the requirement that the defendant have actual knowledge of the circumstances surrounding the alien's entry into the United States. As Loiselle noted, a separate provision already makes it unlawful for employers to knowingly hire aliens whose presence is unauthorized, see 8 U.S.C. § 1324a(a)(1)(A), but this statute is not a predicate act for purposes of stating a RICO enterprise claim. Plaintiffs are required to allege something more than the fact that Wal-Mart hired aliens whom they knew to lack work authorization, in order to state a § 1324(a)(3)(A) predicate act.
2. Involuntary Servitude
310 Plaintiffs also allege that Wal-Mart violated the prohibition against involuntary *310 servitude, which also constitutes a predicate act of racketeering. The federal law prohibiting involuntary servitude, 18 U.S.C. § 1584, provides:
Whoever knowingly and willfully holds to involuntary servitude or sells into any condition of involuntary servitude, any other person for any term, or brings within the United States any person so held, shall be fined under this title or imprisoned not more than 20 years, or both. If death results from the violation of this section, or if the violation includes kidnaping or an attempt to kidnap, aggravated sexual abuse or the attempt to commit aggravated sexual abuse, or an attempt to kill, the defendant shall be fined under this title or imprisoned for any term of years or life, or both.
In United States v. Kozminski, 487 U.S. 931, 953, 108 S.Ct. 2751, 101 L.Ed.2d 788 (1988), the Supreme Court, construing 18 U.S.C. § 1584, held that "involuntary servitude" meant " a condition of servitude in which the victim is forced to work for the defendant by the use of threat of physical restraint or physical injury, or by the use or threat of coercion through law or the legal process" and "encompasses those cases in which the defendant holds

the victim in servitude by placing the victim in fear of such physical restraint or injury or legal coercion." The Court observed that it was "possible" that threatening an immigrant with deportation might amount to a "threat of legal coercion" that results in involuntary servitude, and that a person's special vulnerabilities may be a relevant consideration in determining whether a particular type of physical or legal coercion may be sufficient to hold a person in involuntary servitude. Id. at 948, 108 S.Ct. 2751; see also United States v. Veerapol, 312 F.3d 1128, 1132 (9th Cir.2002). At the same time, the Court also expressly endorsed Judge Friendly's observation in United States v. Shackney, 333 F.2d 475, 487 (2d Cir.1964) (reversing convictions under § 1584):
The most ardent believer in civil rights legislation might not think that cause would be advanced by permitting the awful machinery of the criminal law to be brought into play whenever an employee asserts that his will to quit has been subdued by a threat which seriously affects his future welfare but as to which he still has a choice, however painful.
Kozminski, 487 U.S. at 950, 108 S.Ct. 2751 (quoting Shackney).
In Shackney, the Court of Appeals concluded:
[W]e see no basis for concluding that because the statute can be satisfied by a credible threat of imprisonment, it should also be considered satisfied by a threat to have the employee sent back to the country of his origin, at least absent circumstances which would make such deportation equivalent to imprisonment or worse ... a holding in involuntary servitude means to us action by the master causing the servant to have, or to believe he has, no way to avoid continued service or confinement ... not a situation where the servant knows he has a choice between continued service and freedom, even if the master has led him to believe that the choice may entail consequences that are exceedingly bad ... While a credible threat of deportation may come close to the line, it still leaves the employee with a choice, and we do not see how we could fairly bring it within § 1584 without encompassing other types of threat ... Friction over employment punctuated by hotheaded threats is well known and inevitable. But the subjugation of another's will is more easily accused than accomplished. There must be 311 "law or force" that "compels *311 performance or a continuance of the service" for the statute to be violated.
333 F.2d at 486-87 (internal citation omitted).
In the instant case, Plaintiffs allege that Wal-Mart's contractors threatened some of the undocumented janitorial workers with deportation. (RAC ¶¶ 20, 21, 47.) These allegations also include the claim that at least two plaintiffs were "abused" but do not identify who was directing or perpetrating the abuse, or the nature of the abuse that some of these plaintiffs may have endured. In addition, Plaintiffs allege that they were "forced to work" under threats of coercion.
These allegations of involuntary servitude are insufficient. As Shackney already observed, "[w]hile a credible threat of deportation may come close to the line, it still leaves the employee with a choice, and we do not see how we could fairly bring it within § 1584." 333 F.2d at 486 (also stating that "the servant [still] knows he has a choice between continued service and freedom, even if the master has led him to believe that the choice may entail consequences that are exceedingly bad"). Plaintiffs have not alleged that they did not have any way to avoid "continued service or confinement." Thus, the complaint fails to allege the predicate act of involuntary servitude.
3. Mail and Wire Fraud
Plaintiffs allege that the "parties who make up the Wal-Mart Enterprise" committed mail and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343.[12] (RAC ¶ 37.) They further allege that "[u]se of the mails and wire were, on information and belief, essential to the operation of the scheme." (RAC ¶ 41.) Wal-Mart is alleged to have "furthered the aims and goals of the Wal-Mart Enterprise through the routine use of the mails and means of wire communications." (RAC ¶ 60.) The complaint alleges the following:
On information and belief, contracts for janitorial services, movies, invoices, written and oral communications related to the provision of janitorial services were routinely sent by either mail or wire transmissions in interstate

312 commerce throughout the time the Wal-Mart Enterprise flourished. The use of the *312 mails and wire transmissions are integral to the operation of the enterprise and the means participants in the Enterprise use to avoid detection and safeguard the proceeds of their illegal activities. The documents and more specific information as to these mailings and wire transmissions are in the exclusive possession and control of Wal-Mart and its contractors (and possibly federal law enforcement officials in connection with the ongoing grand jury proceedings), and plaintiffs' counsel was unsuccessful in efforts to obtain these documents ... more specific allegations as to this information by plaintiffs will have to await some discovery in this case.
(RAC ¶ 60.) Based on these allegations, Plaintiffs assert that they can state a RICO claim against Wal-Mart because they engaged in at least two predicate acts of racketeering 0907 mail and wire fraud. This Court disagrees.
Plaintiffs have failed to allege sufficient facts from which this Court could infer that Wal-Mart may have engaged in mail or wire fraud as part of its involvement in the Wal-Mart Enterprise. As a general matter, the pleadings do not place Wal-Mart on notice of what it may or may not have done, by way of mail or wire fraud, as part of an alleged pattern of racketeering. See Driscoll v. Landmark Bank Sav., 758 F.Supp. 48, 52 (D.Mass.1991) (stating that the particularity required in pleading fraud protects defendants from unfair surprise, the use of fraud claims as pretext to discover a wrong, and frivolous, but damaging, charges).
Moreover, the fraud-related predicate acts, as alleged in Count 1, fail to meet the standard of particularity set forth under the Rules. See FED. R. CIV. P. 9(b).[13] The pleading standard set forth in Rule 9(b) is "particularly important in civil RICO pleadings in which the predicate racketeering acts are critical to the sufficiency of the RICO claim." See Balthazar v. Atlantic City Med. Ctr., 279 F.Supp.2d 574, 591 (D.N.J.2003).
In order to satisfy Rule 9 pleading standards, "plaintiffs must allege what happened to them." See Rolo v. City Investing Co. Liquidating Trust, 155 F.3d 644, 659 (3d Cir.1998) (also noting that, prior to the certification of a class, the sufficiency of the allegations must be measured as against the particular plaintiffs in the action). Allegations of fraud require "some measure of substantiation." Seville Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786, 791 (3d Cir.1984); see also Rose v. Bartle, 871 F.2d 331, 356 n. 33 (3d Cir.1989) (stating that, when the predicate acts of a RICO complaint sound in fraud, Rule 9(b) applies). Accordingly, the plaintiffs should plead the "date, place or time" of the fraud or, through some other means, "inject[ ] precision and some measure of substantiation" into their allegations of fraud. Lum, 361 F.3d at 224 (involving a RICO claim based on mail and wire fraud). The parties asserting fraud should allege "who made a misrepresentation to whom 313 and the general content of *313 the misrepresentation." See id. Allegations generally asserting that defendants may have made misrepresentations and committed mail and wire fraud are not enough. See A-Valey Eng'rs, Inc. v. Bd. of Chosen Freeholders of Camden, 106 F.Supp.2d 711, 716 (D.N.J.2000).
Although courts should not "focus `too narrowly' on the particularity language of Rule 9(b)" but rather, should take into account the "`general simplicity and flexibility contemplated by the rules,'" see Boyle v. D'Onofrio, 99 F.Supp.2d 541, 546-47 (D.N.J.2000), "it is well settled that Rule 9(b) applies even when the fraud relates to matters within the knowledge of the defendant and that allegations based on information and belief do not satisfy Rule 9(b) unless the complaint sets forth the facts upon which the belief is founded." Driscoll, 758 F.Supp. at 52.
Plaintiffs' allegations of mail and wire fraud are insufficient to suggest that Wal-Mart engaged in these predicate acts. It is unclear to this Court what facts could or would be proven at a later date in order to establish that WalMart engaged in fraud through use of the mails or wires. As Wal-Mart points out, it is unclear what false representations were made to the plaintiffs, or what representations, in furtherance of any fraud, were made by means of mail or wire. (Def. Br. at 21.)
Although Rule 9(b) applies to RICO predicate acts based on fraud, courts have differed "concerning the harshness of the outcome when Rule 9(b) is not satisfied." See Cayman Exploration Corp. v. United Gas Pipe Line Co., 873 F.2d 1357, 1362 (10th Cir.1989). In Alan Neuman Prods. Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir.1988), the court dismissed the RICO count. In Saporito v. Combustion Eng'g Inc., 843 F.2d 666, 675 (3d Cir.1988), vacated on other grounds, 489 U.S. 1049, 109 S.Ct. 1306, 103 L.Ed.2d 576 (1989), the Third Circuit Court of Appeals granted leave to amend. In New England Data Servs. v. Becher, 829 F.2d 286, 289-90 (1st Cir.1987), the First Circuit Court of Appeals held that, where information is in the defendant's exclusive control, the court should determine whether the claim as presented warrants further discovery and amendment. See also

Shapo v. O'Shaughnessy, 246 F.Supp.2d 935, 955-56 (N.D.Ill.2002) (stating that the Seventh Circuit Court of Appeals may "loosen" the Rule 9 requirements in cases where discovery is needed to acquire the requisite specificity to state a claim sounding in fraud).[14]
"Rule 9(b) requires specific allegations of fraud in civil RICO cases, but the court should make a second determination as to whether the claim as presented warrants the allowance of discovery and if so, thereafter provide an opportunity to amend the defective complaint." See Saporito, 843 F.2d at 675-76 (internal quotations omitted). Permitting a plaintiff to conduct some discovery prior to filing an amended complaint may be appropriate where the complaint merely lacks "sufficient detail" but otherwise states a cause of action. See State Farm Mut. Auto. Ins. Co. v. Makris, No. 01-5351, 2002 WL 826431, at *3 (E.D.Pa. Apr.29, 2002); Parish v. Beneficial Illinois, Inc., No. 94-4156, 1996 WL 172127 (N.D.Ill. Apr.10, 1996) (following Saporito, 843 F.2d at 675-76, among other circuit court decisions, for the view that limited discovery may be allowed when a complaint fails for want of the requisite particularity).
314 *314 The mail and wire fraud predicates are pleaded on information and belief. As a general matter, such allegations are insufficient for purposes of Rule 9(b). See Kimmel v. Peterson, 565 F.Supp. 476, 482 (E.D.Pa.1983). Although the particularity requirement should be "relaxed" when facts may be "peculiarly within the defendant's knowledge or control," a conclusory declaration to this effect still does not satisfy Rule 9(b). In re Am. Travellers Corp. Secs. Litig., 806 F.Supp. 547, 554 (E.D.Pa.1992).
Even under a more lenient application of Rule 9, a plaintiff "must accompany such an allegation with a statement of the facts upon which their allegation is based" and, although information and belief pleading is permissible, the complaint should set forth "the nature and scope of plaintiffs' efforts to obtain, before filing the complaint, the information needed to plead with particularity." Id. (quoting Shapiro v. UJB Fin. Corp., 964 F.2d 272, 285 (3d Cir.1992)) (internal quotations omitted). Plaintiffs continue to bear "the obligation to provide allegations indicating why the charges are not baseless." In re Am. Travellers Corp. Secs. Litig., 806 F.Supp. at 554.
As stated above, this Court concludes that Count 1 should be dismissed without prejudice, and that Plaintiffs should be afforded leave to amend. This conclusion is consistent with this Circuit's view that plaintiffs typically should be granted leave to amend claims that otherwise are dismissed for lack of particularity. Plaintiffs, however, shall not take preliminary discovery prior to re-pleading this claim. Based on this Court's review of the complaint, this Court cannot discern the factual basis underlying Plaintiffs' information-and-belief pleading. This Court is not persuaded that discovery, prior to amendment, is appropriate here because the deficiencies in the complaint do not amount to a mere lack of detail, but rather appear to fail to state a cause of action. State Farm Mut. Auto. Ins. Co., 2002 WL 826431, at *3 (permitting discovery because a cause of action was apparent and the complaint lacked "sufficient detail").
4. Money Laundering
Plaintiffs' allegations concerning the money laundering predicates are based on the following provisions: 18 U.S.C. § 1956(a)(1)(A)(i); § 1956(a)(1)(B)(i); § 1956(a)(1)(B)(ii); § 1956(a)(3)(A); § 1956(a)(3)(B); and § 1956(a) (3)(C).[15]
315 *315 In the complaint, Plaintiffs allege that money laundering "directly harmed plaintiffs inasmuch as it shielded the enterprise from detection and thereby continued its existence." (RAC ¶ 41.) Plaintiffs further claim that, in the Forfeiture Action, involving maintenance or janitorial contractors ostensibly not implicated in this action at this time, the United States has alleged "Wal-Mart maintenance contractors engaged in money laundering of the proceeds of a variety of criminal acts [including, among other things, transporting, harboring and encouraging undocumented aliens]." (RAC ¶ 58.) The gist of the money laundering scheme is as follows:
On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise maintain (or maintained) books, records, ledgers, receipts, or notes relating to the purchase of financial instruments or the transfer of funds and other papers relating to the proceeds of the unlawful employment of the janitors and the profit derived therefrom. On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise used electronic equipment such as computers, facsimile or telex machines, pagers and telephone

answering machines to generate, record, or store information concerning their operations and associated finances. On information and belief, contractors who joined with Wal-Mart in the Wal-Mart Enterprise attempted to legitimize their profits from the illegal scheme through money laundering activities involving banks and their attendant services, brokers, professionals such as attorneys or accountants ... The documents and specific information as to all of these materials is within the exclusive possession and control of Wal-Mart and the contractors at this time (and possibly federal law enforcement officials in connection with the ongoing grand jury proceedings), and plaintiffs' counsel was unsuccessful in efforts to [obtain] these data and documents despite interviews with numerous named plaintiffs and members of the plaintiff class both in the United States and abroad. Thus, specific allegations as to that information by plaintiffs will have to await some discovery in this case.
(RAC ¶ 59.)
Plaintiffs' allegations of money laundering are similarly vague and insufficient to support a RICO claim.[16] This Court cannot conclude that Plaintiffs have stated predicate acts of money laundering sufficient to sustain a RICO claim. The allegations largely recite the elements of different money laundering provisions, but do not identify the relevant financial transactions or conduct by Wal-Mart, or describe more particularly the contractors' "money laundering activities" that allegedly involved banks, accountants, attorneys, and others. Thus, Plaintiffs have 316 failed to allege *316 sufficient facts to state predicate acts of money laundering.
5. Summary
Plaintiffs have not alleged sufficient facts to state claims that Wal-Mart committed the predicate acts necessary to support a RICO claim under 18 U.S.C. § 1962(c), but this Court cannot determine, without doubt, that it would be futile to grant Plaintiffs the opportunity to amend their pleadings. Accordingly, Count 1 is dismissed without prejudice, and Plaintiffs, if they so choose, may amend Count 1 within 45 days of the entry of this Opinion.
II. Count 2 0907 RICO Conspiracy Claim
Plaintiffs also have alleged that, in violation of 18 U.S.C. § 1962(d), Wal-Mart and its contractors conspired to violate 18 U.S.C. § 1962(c), "that is, [they] agreed to conduct and participate, directly and indirectly, in the conduct of the affairs of the aforementioned enterprise through a pattern of racketeering activity...." (RAC ¶ 78.) For the following reasons, Defendant's motion is granted, and Count 2 shall be dismissed without prejudice. Because this Court cannot conclude that amendment of this claim would be futile, Plaintiffs are hereby granted 45 days from the entry of this Opinion, if they so choose, to amend their RICO conspiracy claim.
Under 18 U.S.C. § 1962(d), it is "unlawful for any person to conspire" to violate § 1962(c). Thus, section 1962(d) liability attaches where a defendant conspires to operate or manage an enterprise prohibited under § 1962(c). See Smith v. Berg, 247 F.3d 532, 536 (3d Cir.2001) (discussing United States v. Antar, 53 F.3d 568 (3d Cir.1995) ). A violation of § 1962(c), however, is not a prerequisite for liability under § 1962(d), i.e., "a RICO conspiracy defendant need not himself commit or agree to commit predicate acts." Smith, 247 F.3d at 537 (following Salinas v. United States, 522 U.S. 52, 65, 118 S.Ct. 469, 139 L.Ed.2d 352 (1997)). Rather, to establish liability for a RICO conspiracy, "all that is necessary for such a conspiracy is that the conspirators share a common purpose." Smith, 247 F.3d at 537 (reading Salinas). Therefore, if some conspirators agree to a plan in which some conspirators will commit crimes and others will provide support, "the supporters are as guilty as the perpetrators." Salinas, 522 U.S. at 64, 118 S.Ct. 469. As the Third Circuit Court of Appeals explained:
[O]ne who opts into or participates in a conspiracy is liable for the acts of his co-conspirators which violate section 1962(c) even if the defendant did not personally agree to do, or to conspire with respect to, any particular element ... [A] defendant may be held liable for conspiracy to violate section 1962(c) if he knowingly agrees to facilitate a scheme which includes the operation or management of a RICO enterprise.
Smith, 247 F.3d at 538 (emphasis added). For purposes of establishing a RICO conspiracy claim, therefore, it is sufficient that the defendant "adopt the goal of furthering or facilitating the criminal endeavor." Id. at 537 (quoting Salinas, 522 U.S. at 65, 118 S.Ct. 469). "[A] defendant must agree only to the commission of the predicate acts,

and need not agree to commit personally those acts." See United States v. Adams, 759 F.2d 1099, 1116 (3d Cir.1985); see also United States v. Traitz, 871 F.2d 368, 396 (3d Cir.1989) (same); United States v. Phillips, 874 F.2d 123, 128 n. 4 (3d Cir.1989) (reading Adams to mean that the "defendant need only agree to commission of two or more racketeering acts, not to personally commit them").
317 Assuming the truth of Plaintiffs' allegations, this Court concludes that they *317 fall short of stating a RICO conspiracy claim against Wal-Mart. To state a claim under § 1962(d) for violations of § 1962(c), a defendant must "knowingly agree[ ] to facilitate a scheme which includes the operation or management of a RICO enterprise." Smith, 247 F.3d at 538. First, this Court already has reviewed the insufficiencies of Plaintiffs' allegations in Count 1, and determined that Plaintiffs have failed to allege the existence of an unlawful enterprise involved in a pattern of racketeering, i.e., the commission of at least two predicate acts. See 18 U.S.C. § 1961(1).
Second, this Court is not persuaded that Plaintiffs have alleged adequate facts to claim that Wal-Mart agreed to the commission of at least two predicate acts. Adams, 759 F.2d at 1116. Even if this Court were to assume, for example, that Wal-Mart's contractors committed predicate acts of encouraging or transporting undocumented aliens, Plaintiffs argue that, because Wal-Mart knew of their undocumented status, it also agreed to the commission of these predicate acts. Plaintiffs, however, have not alleged, other than in conclusory fashion, adequate facts for this Court to reasonably infer that Wal-Mart agreed with co-conspirators to the commission, by co-conspirators and others, of RICO predicate acts, in furtherance of an unlawful enterprise. Thus, even though Plaintiffs have alleged that Wal-Mart hired undocumented workers, and in many instances, knew that these workers were not authorized to work, these allegations are insufficient not only to state a predicate act of racketeering, but also for purposes of claiming that Wal-Mart agreed to the commission of predicate acts of racketeering.
Therefore, Count 2 is dismissed without prejudice.
III. Count 3 0907 Section 1985 Claim[17]
Plaintiffs allege that Wal-Mart, in violation of 42 U.S.C. § 1985(3) ("section 1985"), conspired with its contractors to "hinder[ ] and prevent [ ] federal and state officials from performing their affirmative obligations" to protect Plaintiffs' right not to be "subjected to involuntary servitude" and their right to enjoy equal protection of the laws. (RAC ¶ 84.)
In order to establish a Section 1985 claim, a plaintiff must allege: (1) a conspiracy; (2) motivated by racial or class based discriminatory animus, designed to deprive, directly or indirectly, any person or class of persons to the equal protection of the laws; (3) an act in furtherance of the conspiracy; and (4) an injury to person or property or the deprivation of any right or privilege of a citizen of the United States. See Griffin v. Breckenridge, 403 U.S. 88, 102-03, 91 S.Ct. 1790, 29 L.Ed.2d 338 (1971); Lake v. Arnold, 112 F.3d 682, 685 (3d Cir.1997).
318 *318 Wal-Mart asserts that, in light of these elements, Plaintiffs fail to state a claim under section 1985 for three reasons: (1) Plaintiffs, as they have been defined in the complaint, are not members of a class protected under section 1985; (2) Plaintiffs cannot allege that Wal-Mart acted with the requisite intent; and (3) Plaintiffs have not alleged the deprivation of a constitutional right that can be vindicated under section 1985.
Plaintiffs argue that they constitute the type of class of persons protected under section 1985. Plaintiffs contend that the Third Circuit Court of Appeals has construed the protections of section 1985 broadly, so as to permit claims based on "irregular" status. (Pl. Br. at 39.)[18] In addition, to the extent that the history of discrimination against a particular class has been relevant to this Circuit's analysis of whether a particular class merits protection under section 1985, Plaintiffs assert that undocumented workers have faced a history of discrimination, largely in the form of social and political isolation, due to their undocumented status. (Pl. Br. at 40) (citing Ken Gormley, Private Conspiracies and the Constitution: A Modern Vision of 42 U.S.C. § 1985(3), 64 TEX. L. REV. 527, 575 (1985) (advocating that "[r]ather than limiting section 1985(3) to instances of racial discrimination ... it is important that the conspiracy statute should be read with the same latitude as the fourteenth amendment, from whose mold it was cast")).

Having considered the parties' submissions and oral argument, as well as relevant law, this Court concludes that Plaintiffs have not alleged the type of "class based discriminatory animus" protected under section 1985, and for the reasons set forth below, grants Wal-Mart's motion to dismiss count 3 for failure to state a claim.
While "there is some legislative history to support the view that § 1985(3) has a broader reach," according to the Supreme Court, "it is a close question" whether section 1985 "was intended to reach any class-based animus" other than race-based animus. See United Bhd. of Carpenters & Joiners of Am. v. Scott, 463 U.S. 825, 837, 103 S.Ct. 3352, 77 L.Ed.2d 1049 (1983) (rejecting the proposition that section 1985 reaches private conspiracies motivated by bias towards others on account of their economic views, status, or activities).
While circuit courts of appeal have permitted other classes to seek relief under section 1985, not surprisingly, the issue of whether a particular "class based discriminatory animus" falls within the reach of section 1985 remains unclear, and the "best that can be said of the § 1985(3) jurisprudence thus far is that it has been marred by fits and starts, plagued by inconsistencies, and left in flux by the Supreme Court." Lake, 112 F.3d at 685 (quoting Trautz v. Weisman, 819 F.Supp. 282, 291 (S.D.N.Y.1993)). For example, in this Circuit, private conspiracies motivated by discriminatory animus towards others based on mental disability are cognizable under section 1985, see Lake, 112 F.3d at 686, but, as already mentioned, class based discriminatory animus towards others on account of their economic status or activities is not. See Scott, 463 U.S. at 837, 103 S.Ct. 3352. In addition, some 319 courts have decided that politically motivated private conspiracies are cognizable under section *319 1985, while others have expressed doubt on the subject.[19]
At least three general principles appear to guide this Circuit's determinations of what might constitute "other class based discriminatory animus" for purposes of stating a claim under section 1985:(1) the immutability of, or the person's "responsibility" for, the particular trait; (2) whether there is a history of pervasive discrimination against the person or class based on the trait; and (3) whether there has been "an emerging rejection" of such discrimination. See Lake, 112 F.3d at 688 (relying on these three grounds for its conclusion that section 1985 reaches civil conspiracies against individuals with mental disabilities); see also Sunkett v. Misci, 183 F.Supp.2d 691, 706 (D.N.J.2002) (stating that Supreme Court and Third Circuit case law suggest that section 1985 protects against discriminatory animus based on "relatively immutable, highly identifiable, and discrete group identification"). As a general consideration, "the scope of section 1985(3) is not fixed as of any given point in time, but must be subject to reinterpretation as times and circumstances required." Lake, 112 F.3d at 687.
Based on these guideposts, it is difficult for this Court to conclude that a class defined as "recent immigrants, including undocumented persons" (RAC ¶ 84) can seek relief under section 1985. In particular, the fact that Plaintiffs bear "responsibility" for their status 0907 whether defined as "recent immigrants" or as "undocumented persons" 0907 strongly suggests that this sort of class based discriminatory animus is not covered under section 1985. In Lake, the Third Circuit Court of Appeals examined, in the first instance, the party's "responsibility" for the asserted class trait 0907 "mental retardation" 0907 and determined that this was an "immutable" trait for which the plaintiff bore no responsibility. 112 F.3d at 686. Here, Plaintiffs assert that they are all "recent immigrants, including undocumented persons." (RAC ¶ 84.) Plaintiffs are decidedly different from the parties who sought relief pursuant to section 1985 in Lake.
Plyler v. Doe, 457 U.S. 202, 102 S.Ct. 2382, 72 L.Ed.2d 786 (1982), is especially instructive and persuasive. In Plyler, the Supreme Court expressed its view that an undocumented immigration status is the result of the alien's 320 own actions. Id. at 219 n. 19, 102 S.Ct. 2382. The Court stated *320 that, unlike "most of the classifications that we have recognized as suspect, entry into this class, by virtue of entry into this country, is the product of voluntary action ... entry into the class is itself a crime." Id. at 219 & n. 19, 102 S.Ct. 2382. The Court further observed that "[a]t the least, those who elect to enter our territory by stealth and in violation of our law should be prepared to bear the consequences, including, but not limited to, deportation." Id. at 220, 102 S.Ct. 2382.
Although Plyler recognized that children of undocumented aliens were entitled to some degree of protection under the fourteenth amendment, this largely rested on the significance of public education, which was at issue in that case, and the fact that undocumented children in the United States are "not comparably situated" to illegal entrants like their parents. Id. at 220, 102 S.Ct. 2382. In addition to the Court's concern that the Texas law implicated education, which plays a "pivotal role ... in sustaining our political and cultural heritage," id. at 221, 102

S.Ct. 2382, the state law deprived the minor children of undocumented aliens, not their adult parents, of a basic education "for so long as they are present in this country through no fault of their own." Id. (emphasis added).
The Supreme Court, as Plaintiffs correctly suggest, was not unsympathetic in Plyler to the arguments that Plaintiffs advance here. For example, in Plyler, the Court recognized the existence of a "shadow population" of illegal immigrants in the United States, and noted that its growth:
[R]aises the specter of a permanent caste of undocumented resident aliens, encouraged by some to remain here as a source of cheap labor, but nevertheless denied the benefits that our society makes available to citizens and lawful residents. The existence of such an underclass presents most difficult problems for a Nation that prides itself on adherence to principles of equality under law.
Id. at 219, 102 S.Ct. 2382.
Even assuming the truth of Plaintiffs' assertions 0907 namely, that they comprise a socially, culturally, linguistically and politically isolated group 0907 this Court cannot conclude that Plaintiffs, as defined in the complaint, are victims of the sort of invidious discrimination proscribed by section 1985(3). Plaintiffs' status as "recent immigrants" or as "undocumented workers," and the concomitant political and social isolation that they encounter is, at least in part, the result of their own voluntary conduct. While they now may not be able to regularize their status, such that their undocumented status is immutable, this is traceable to their decision, at the outset, to enter and remain unlawfully in the United States.
Accordingly, Plaintiffs have failed to allege sufficient facts to state a claim for relief under section 1985. Because they cannot state an essential element of a section 1985 claim, Wal-Mart's motion to dismiss Count 3 of the complaint is granted.
IV. Count 4 0907 Fair Labor Standards Act Claim
Plaintiffs allege that Wal-Mart denied them minimum wage and overtime pay, as required by the Fair Labor Standards Act ("FLSA" or "the Act"). (RAC ¶¶ 85-90.) The Act establishes minimum wage, overtime pay, record keeping, and child labor standards affecting full-time and part-time workers in the private and public sector. The "prime purpose of the [FLSA] was to aid the unprotected, unorganized and lowest paid of the nation's working population; that is, those employees who lacked sufficient bargaining power to secure for themselves a minimum 321 substance wage." *321 Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 707 n. 18, 65 S.Ct. 895, 89 L.Ed. 1296 (1945).
In this action, Plaintiffs seek relief under the minimum wage (section 206) and overtime pay (section 207) provisions of the Act. The minimum wage provision requires every employer to pay "to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at ... not less than $5.15 an hour beginning September 1, 1997." 29 U.S.C. § 206(a)(1). The overtime provision states that, unless otherwise provided:
[N]o employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.
29 U.S.C. § 207(a)(1).
In support of its motion to dismiss Plaintiffs' FLSA claim, Wal-Mart suggests that, as a preliminary matter, undocumented workers cannot seek relief under the Act. In addition, Wal-Mart argues that this claim should be dismissed because: (1) Plaintiffs have sued the wrong party, since the "employer," for purposes of seeking relief under the FLSA, is the contractor, not Wal-Mart; and (2) Plaintiffs were paid above the minimum wage in all cases and in excess of the required overtime pay in most cases.

In response, Plaintiffs assert that: (1) undocumented aliens are entitled to relief under the FLSA; (2) Wal-Mart easily falls within the broad definition of "employer" under the Act; and (3) the complaint sufficiently alleges claims for both minimum wage and overtime pay violations. This Court agrees, and addresses each of these issues below.
A. Undocumented Status
Wal-Mart suggests that undocumented workers may not be able to seek relief for unpaid minimum wages under the FLSA. It contends that the Supreme Court's decision in Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 122 S.Ct. 1275, 152 L.Ed.2d 271 (2002), casts substantial doubt on the notion that undocumented workers are entitled to seek back pay for minimum wage and overtime under the FLSA. (Def. Br. at 31.)
In Hoffman, the Supreme Court set aside an NLRB order requiring the employer to compensate the plaintiffs for back pay from the date they were terminated, in violation of the National Labor Relations Act, until the date that the employer discovered that the plaintiffs were undocumented aliens who were not authorized to work in the United States. 535 U.S. at 142, 122 S.Ct. 1275. The Court concluded that "awarding back pay to illegal aliens runs counter to policies underlying [the Immigration Reform and Control Act of 1986]." Id. at 149, 122 S.Ct. 1275. Because the Board did not have authority to "enforce or administer" the nation's immigration policies, its order could not stand. Id. Despite the Board's broad discretion to fashion appropriate, remedial relief, the Supreme Court concluded that the order conflicted with the policies underlying IRCA, and accordingly, had to be set aside. Id. Based on Hoffman, Wal-Mart claims that Plaintiffs, who are alleged to be undocumented workers, may not be able to obtain relief under the Act.
322 *322 Plaintiffs rebut this suggestion with several persuasive arguments. First, Plaintiffs correctly point out that, in contrast to the undocumented plaintiffs in Hoffman who sought back pay, in this case, they are seeking unpaid wages for work that already has been performed. In addition, the definition of "employee" under the FLSA is extremely broad, i.e., does not limit relief to citizens.[20] Furthermore, the Department of Labor, which enforces the FLSA, interprets the FLSA to cover undocumented workers, even post-Hoffman. (Pl. Br. at 13 & n. 4.) Finally, post-Hoffman decisions have construed the FLSA to cover undocumented workers. (Pl. Br. at 13 (citing several district court decisions)).
This Court agrees that Plaintiffs, by virtue of their undocumented status, are not barred from seeking relief under the Act. First, the statutory text does not define covered employees according to immigration or citizenship status. An "employee" under the FLSA is "any individual" employed by the employer. See 29 U.S.C. § 203(e)(1). Furthermore, as Plaintiffs point out, the term "employee" has been interpreted broadly. In Nationwide Mut. Ins. Co. v. Darden, the Supreme Court observed:
The definition of "employee" in the FLSA evidently derives from the child labor statutes and, on its face, goes beyond its ERISA counterpart. While the FLSA, like ERISA, defines an "employee" to include "any individual employed by the employer," it defines the verb "to employ" expansively to mean "suffer or permit to work." This latter definition, whose striking breadth we have previously noted, stretches the meaning of "employee" to cover some parties who might not qualify as such under a strict application of traditional agency law principles.
503 U.S. 318, 326, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992) (internal citations omitted).
Second, in light of the factual distinctions between Hoffman and the instant case, this Court cannot infer that Hoffman precludes Plaintiffs from relief. In Hoffman, the plaintiffs sought recovery for the hours that they would have, but had not, worked, had they not been terminated for engaging in protected, union-related activities. Here, Plaintiffs hope to recover under the FLSA for work that they already have performed.
The distinction is significant, because the Court's concern in Hoffman 0907 that recognizing a cause of action under the NLRA for undocumented persons for work not performed would undermine the purposes of the Immigration Reform and Control Act ("IRCA"), which "forcefully made combating the employment of illegal aliens central to the policy of immigration law," see Hoffman, 535 U.S. at 147, 122 S.Ct. 1275 0907 is not implicated here in the same respect.

Indeed, IRCA enjoys a decidedly different relationship to the FLSA. See Patel v. Quality Inn S., 846 F.2d 700 (11th Cir.1988) (concluding that the plaintiff, an undocumented maintenance and janitorial worker at a hotel, was an "employee" within the FLSA). For one thing, "nothing in the IRCA or its legislative history suggests that Congress intended to limit the rights of undocumented aliens under the FLSA." Id. at 704. "To the contrary, the 323 FLSA's coverage of undocumented aliens *323 is fully consistent with the IRCA and the policies behind it." Id. (citing H.R. REP. No. 99-682(II), 99th Cong., 2d Sess. 8-9, reprinted in 1986 U.S.C.C.A.N. 5649, 5757, 5758). In particular, Congress' specific authorization, at section 111(d) of IRCA, of additional funds for the enforcement of FLSA, on behalf of undocumented workers, was sufficient for the Patel court to dispel suggestions that Congress had intended to exclude undocumented aliens from coverage under the FLSA. Id. The court explained:
We recognize the seeming anomaly of discouraging illegal immigration by allowing undocumented aliens to recover in an action under the FLSA. We doubt, however, that many illegal aliens come to this country to gain the protection of our labor laws. Rather it is the hope of getting a job 0907 at any wage 0907 that prompts most illegal aliens to cross our borders. By reducing the incentive to hire such workers the FLSA's coverage of undocumented aliens helps discourage illegal immigration and is thus fully consistent with the objectives of the IRCA. We therefore conclude that undocumented aliens continue to be "employees" covered by the FLSA.
Id. at 705-06; see also Singh v. Jutla & C.D. & R's Oil, Inc., 214 F.Supp.2d 1056, 1058-59 (N.D.Cal.2002) (following Patel, concluding that undocumented aliens are covered by the FLSA, and concurring that recognizing a right of action for undocumented workers under FLSA is not inconsistent with IRCA); Flores v. Albertsons, Inc., No. 100515, 2002 WL 1163623, at *5 (C.D.Cal. Apr.9, 2002) (stating that "Hoffman does not establish that an award of unpaid wages to undocumented workers for work actually performed runs counter to IRCA").[21]
Additionally, this Court only joins the growing chorus acknowledging the right of undocumented workers to seek relief for work already performed under the FLSA. See Albertsons, Inc., 2002 WL 1163623, at *5 ("Federal courts are clear that the protections of the FLSA are available to citizens and undocumented workers alike."). All of the district court decisions cited by Plaintiffs in their brief apparently were not challenged on appeal, and therefore, remain intact as persuasive authority.[22]
Aside from Patel, which was decided by the Eleventh Circuit Court of Appeals, no other circuit court of appeals appears to have addressed, in a substantial respect, the issue of whether undocumented workers are entitled to back pay awards under the FLSA, although at least one other court of appeals has expressed skepticism as to the reach of Hoffman as a general matter. See Rivera v. NIBCO, Inc., 364 F.3d 1057, 1067 (9th Cir.2004). Rivera was a national origin discrimination case brought under Title VII by employees who sought back pay from their defendant employer. The employer had argued unsuccessfully before the district court that it was entitled to the 324 immigration records of the plaintiff employees, and filed an interlocutory *324 appeal. The court of appeals, in affirming and remanding the matter, responded to the defendant's assertion that Hoffman "precludes an award of back pay to an illegal immigrant, no matter what federal statute the employer may have violated," by stating that it "seriously doubt[ed] that Hoffman is as broadly applicable as [the defendant] contends." See id. at 1067. While this comment was not the holding of the case, which, in any event is not binding upon this Court, Rivera adds to the increasing number of courts who have expressed doubt as to the proposition that Hoffman suggests that undocumented workers are precluded entirely from seeking relief under the FLSA.
Finally, the position of the Labor Department on the instant issue of whether undocumented workers are barred from seeking relief under the FLSA is another persuasive basis for rejecting Wal-Mart's suggestion that Plaintiffs cannot state a claim under FLSA by virtue of their undocumented status. The Labor Department's interpretation of the FLSA, both before and after Hoffman, is that undocumented workers should be permitted to recover under the Act for work already performed.[23]See Patel, 846 F.2d at 700, 702-03 (acknowledging, and granting "considerable deference" to, the position of the Labor Department and also noting that the Supreme Court "consistently has refused to exempt from coverage employees not within a specific exemption"). The fact that the Department of Labor, which is charged with enforcing the FLSA, construes the statute to protect undocumented workers, even after Hoffman, further convinces this Court that Plaintiffs' undocumented status should not bar them from seeking relief under the Act. Moreover, Wal-Mart has not advanced a good reason to overlook the

Department's view that Hoffman does not tread upon the right of undocumented workers to obtain relief under the Act.
Indeed, Wal-Mart has not addressed the text, legislative history, or agency interpretations of the Act, in support of its motion. Its silence on these basic considerations of statutory construction, see Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 357 (3d Cir.1995), is revealing.
Furthermore, this Court does not find Wal-Mart's other arguments in support of its view 0907 that Hoffman might preclude Plaintiffs from obtaining relief under the Act 0907 particularly compelling. Wal-Mart relies on a New York state court decision, specifically from a Nassau County district court, to support the view that Hoffman precludes recovery of back pay to undocumented workers. See Ulloa v. Al's All Tree Svc., Inc., 2 Misc.3d 262, 768 N.Y.S.2d 556, 557 (Nassau Cty. Dist. Ct.2003). Setting aside the fact that the Nassau County District Court of the New York state court system is a lower court from another state, the decision does not reveal considerable insight into whether Plaintiffs can state a claim under FLSA.[24]
325 *325 Wal-Mart further argues that the post-Hoffman decisions cited by Plaintiffs addressed the issue of whether the plaintiffs' immigration status was the proper subject of discovery in determining liability under the FLSA, not whether, or the extent to which, an undocumented alien is entitled to relief under the FLSA.
Notwithstanding the fact that these post-Hoffman decisions arose in the context of discovery disputes, they remain probative.[25] In these cases, employer-defendants sought discovery of the immigration status of employee-plaintiffs, presumably in order to assert that plaintiffs of undocumented status were not entitled to relief under the FLSA. See supra note 23. Thus, courts implicitly or expressly resolved the issue of whether the FLSA even provided relief to undocumented workers before determining whether evidence pertaining to the plaintiffs' immigration status might be relevant. Only after concluding that undocumented workers were covered by the FLSA could courts then determine, as they have, that the immigration status of the plaintiffs was non-relevant information, and ultimately, that the employer defendants in FLSA actions were not entitled to discovery of the employees' immigration status.
In sum, the persuasive force of the broad language of the statute, the decisions of other federal courts, and the Labor Department's interpretation of the Act, leads this Court to conclude that Plaintiffs should not be precluded, as a matter of law, from obtaining relief under the FLSA for work already performed, merely by virtue of their undocumented status.
B. Wal-Mart's Status as an "Employer" or Plaintiffs' Status as Wal-Mart's "Employees"
Wal-Mart contends that Plaintiffs' FLSA claim should be dismissed because, to the extent Plaintiffs can state a claim under the Act, they should have asserted such claim against Wal-Mart's maintenance contractors, not WalMart. (Def. Br. at 33-34.) Wal-Mart argues that, as alleged, Wal-Mart is not the relevant "employer" within the meaning of the FLSA. Furthermore, to the extent that Plaintiffs have alleged that Wal-Mart is an "employer" within the meaning of the Act, such allegations should not be accepted as true for purposes of deciding this motion 326 because *326 they are conclusory, and contradicted by other factual allegations in the complaint. (Def. Br. at 33-34.)
Plaintiffs allege that Wal-Mart acted as an "employer or joint employer" within the meaning of the FLSA. (RAC ¶¶ 52, 88.) They contend that, in addition to satisfying the FLSA's definition of employer, Wal-Mart is also a joint employer with the various maintenance contractors, and therefore, a proper defendant. They argue that the Act in fact was intended to reach joint employment relationships like the one that allegedly existed between Wal-Mart, the contractors, and the plaintiffs, because joint employment is one of the mechanisms by which the Act holds employers who "sweat" labor through contractors liable. (Pl. Br. at 12 n. 3.)
This Court concludes that Plaintiffs have alleged sufficient facts to suggest an employment relationship between Plaintiffs and Wal-Mart, and therefore, that Wal-Mart is a proper defendant to this action. Based on the Act's expansive definitions of the terms "employee" and "to employ" as well as the relevant regulations and case law governing whether an entity is a "joint employer" for purposes of stating an FLSA claim, Plaintiffs have alleged facts from which to infer that Wal-Mart qualifies as an "employer" under the Act.

1. Applicable Law 0907 Whether a Party is an Employer
Under the Act, an "employer" includes "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d). A "person" includes associations, corporations, or "any organized group of persons." 29 U.S.C. § 203(a). An "employee" is "any individual employed by an employer." 29 U.S.C. § 203(e)(1).
To "employ" means "to suffer or permit to work." 29 U.S.C. § 203(g). This expansive definition of "employ" can be traced back to laws prohibiting child labor:
In order to put an end to prohibited child labor, state statutes were designed to avoid circumvention. The wellestablished meaning and application of the "suffer or permit to work" language in state child labor statutes provided that work performed by minors was prohibited, not just the employment of minors. Such statutes did not presuppose a common-law master-servant relationship. It sufficed, as [one court] noted, that the child was permitted "to work as if an employee" ... Any person in control of the business or business premises where the work was performed was held accountable for violations. The business owner was held liable if the work of minors was suffered or permitted, without regard to his knowledge of the violation, i.e., that the minor was underage.
Bruce Goldstein et al., Fair Labor Standards in the Modern American Sweatshop: Rediscovering the Statutory Definition of Employment, 46 U.C.L.A. L. REV. 983, 1039-40 (1999) (emphasis added).
Courts generally agree that "an entity `suffers or permits' an individual to work if, as a matter of `economic reality,' the entity functions as the individual's employer." Zheng v. Liberty Apparel Co. Inc., 355 F.3d 61, 66 (2d Cir.2003); see also Johnson v. The Unified Gov't of Wyandotte County, 371 F.3d 723, 729 (10th Cir.2004). The Supreme Court specifically has observed that this broad definition of employ "whose striking breadth we have previously noted, stretches the meaning of `employee' to cover some parties who might not qualify as such under such a strict application of traditional agency principles." Nationwide Mut. Ins. Co., 503 U.S. at 326, 112 S.Ct. 1344; see 327 also Falk v. Brennan, 414 U.S. 190, 195-96, 94 S.Ct. 427, 38 L.Ed.2d 406 (1973) (holding *327 that maintenance workers were employees of not only the apartment building owners but also the real estate management company); Greenberg v. Arsenal Bldg. Corp., 144 F.2d 292 (2d Cir.1944), rev'd on other grounds sub nom. Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296 (1945).
These broad definitions have been considered consistent with the remedial purposes of the FLSA. See United States v. Rosenwasser, 323 U.S. 360, 363 & n. 3, 65 S.Ct. 295, 89 L.Ed. 301 (1945). They were aimed, in part, at eliminating the practices of companies who sought to reduce their labor costs (and to avoid their obligations under federal labor laws) by using illegitimate contractors. See Richard J. Burch, A Practitioner's Guide to Joint Employer Liability under the FLSA, 2 HOUS. BUS. & TAX. L.J. 393, 406 (2002).
Accordingly, courts have construed the employment relationship under the FLSA broadly. For example, in Rutherford Food Corp. v. McComb, 331 U.S. 722, 730, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947), the Administrator of the Wage and Hour Division of the Labor Department at that time brought suit against two companies, one of which owned and operated a slaughterhouse, seeking to enjoin the companies from continuing to violate, inter alia, the Act's record keeping and overtime pay provisions. The district court had denied the Administrator's motion for a preliminary injunction on the basis that the meat boners working in the slaughterhouse were independent contractors, not employees, of the slaughterhouse, but the Tenth Circuit Court of Appeals disagreed, citing the "underlying economic realities" of the relationship between the meat boners and the operators of the slaughterhouse. 331 U.S. at 727, 67 S.Ct. 1473. The companies appealed, and the Supreme Court of the United States addressed the question of whether meat boners in a slaughterhouse were employees of the companies, if they had been recruited, and at times paid hourly, by separate individuals or companies.
The Supreme Court agreed with the Court of Appeals, and held that the meat boners were employees of the slaughterhouse, notwithstanding the fact that they had been recruited and organized by (initially) one of the employees of the slaughterhouse, or (later) by separate individuals or companies. 331 U.S. at 730, 67 S.Ct. 1473

. The Court concluded that the determination of the relationship depended "upon the circumstances of the whole activity." Id. Accordingly, the Court noted the fact that the meat boners worked in the slaughterhouse, that the manager of the slaughterhouse "kept close touch" on the operation, and that the work of the meat boners "was more like piecework" rather than "an enterprise that actually depended for success" upon their "initiative, judgment or foresight." Id. The fact that the meat boners owned some of the tools that they used in the slaughterhouse did not outweigh these considerations. The fact that the employee who initially brought in the first group of meat boners exercised "complete control" over them also did not dissuade the Court. In considering the entirety of the relationship, the Court concluded that the meat boners should be considered "employees" of the defendants for purposes of the FLSA. Id.
The Third Circuit Court of Appeals set forth the standard for determining "employee" status in Donovan v. DialAmerica Mktg., Inc., 757 F.2d 1376, 1382 (3d Cir.1985) (adopting the six-factor test for determining whether a worker is an "employee" as set forth by Donovan v. Sureway Cleaners, 656 F.2d 1368, 1371 (9th Cir.1981), and 328 stating that Sureway Cleaners "refined" the test originally laid out in *328 Rutherford). Sureway Cleaners considered the following issues in determining "employee" status:
1) the degree of the alleged employer's right to control the manner in which the work is to be performed; 2) the alleged employee's opportunity for profit or loss depending upon his managerial skill; 3) the alleged employee's investment in equipment or materials required for his task, or his employment of helpers; 4) whether the service rendered requires a special skill; 5) the degree of permanence of the working relationship; 6) whether the service rendered is an integral part of the alleged employer's business.
DialAmerica, 757 F.2d at 1382 (quoting Sureway Cleaners, 656 F.2d at 1370). The Third Circuit Court of Appeals also added that "Sureway Cleaners instructs that neither the presence nor absence of any particular factor is dispositive" and "courts should examine the `circumstances of the whole activity.'" DialAmerica, 757 F.2d at 1382 (internal citations omitted).
In DialAmerica, the Court confronted the issue of whether home researchers, who compiled telephone contact information about individuals, and distributors, who disseminated telephone-research work to other home researchers, were "employees" subject to the protections of the FLSA. The Secretary of Labor had filed suit against DialAmerica Marketing, a company that primarily sold renewal magazine subscriptions by telephone, for violating certain record keeping and minimum wage provisions, but the district court had concluded that both the home researchers and the distributors were not employees for purposes of the FLSA and granted summary judgment to DialAmerica.
The Court of Appeals concluded that the district court should have followed Sureway Cleaners and conducted a broader inquiry in determining whether the workers constituted "employees" for FLSA purposes. Applying Sureway Cleaners, the Court of Appeals affirmed the district court's determination that the distributors were not "employees" but remanded the issue of whether the home researchers were "employees" protected under the Act. With respect to its remand of the question of whether the home researchers were DialAmerica's employees, the Court of Appeals concluded that the district court had over emphasized the fact that home researchers worked at home, while neglecting to lend sufficient weight to certain other factors, including the "degree of permanence of the working relationship" and "whether the service rendered is an integral part of the alleged employer's business." Id. at 1384. Home researchers likely were "employees" of DialAmerica because, among other reasons, they generally worked only for DialAmerica. Id. at 1385. They did not transfer their services from place to place like independent contractors. Id. Home researchers worked continuously for DialAmerica, often for extended periods of time, and they were dependent upon this particular business for their continued employment. See id. at 1384-85. These factors, along with its consideration of the "economic realities" of the work relationship, led the court of appeals to conclude that the matter had to be remanded to the district court. Id. at 1383.
2. Applicable Law 0907 Whether a Party is a Joint Employer
An entity may be a "joint employer" according to federal regulations, which provide that:

A single individual may stand in the relation of an employee to two or more employers at the same time under the 329 [FLSA]... A determination of whether *329
the employment by the employers is to be considered joint employment or separate and distinct employment for purposes of the act depends upon all the facts in the particular case.
29 C.F.R. § 791.2(a). Furthermore, in cases where:
the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the work week, a joint employment relationship generally will be considered to exist in situations such as:... (2)[w]here one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee.
29 C.F.R. § 791.2(b).
Analysis of whether a party is a "joint employer" boils down to determining whether an employment relationship exists at all. See, e.g., Zheng, 355 F.3d at 69. "Whether a person or corporation is an employer or joint employer is essentially a question of fact." Wirtz v. Lone Star Steel Co., 405 F.2d 668, 669 (5th Cir.1968). At this stage, this Court need only examine whether allegations of relevant facts are sufficient to state an employment or joint employment relationship under the FLSA.
Various cases have recognized a joint employment relationship in the context of an FLSA claim. A manufacturing company and the contractors through which they secured the labor of garment workers in New York City's Chinatown were considered joint employers. See Zheng, 355 F.3d at 64, 69. In another case, contractors were found to be joint employers, along with supermarket and drugstore corporations, of delivery workers. See Ansoumana v. Gristede's Operating Corp., 255 F.Supp.2d 184 (S.D.N.Y.2003).
Consistent with the Supreme Court's analysis in Rutherford, 331 U.S. at 730, 67 S.Ct. 1473, courts have emphasized that the totality of the circumstances, rather than any particular factor, should govern the determination of whether joint employment exists. See Johnson, 371 F.3d at 729; Zheng, 355 F.3d at 71; DialAmerica, 757 F.2d at 1382; Ansoumana, 255 F.Supp.2d at 192.
Courts have not reached a uniform agreement on the relevant factors to be considered. Although the Third Circuit Court of Appeals has not specifically addressed the circumstances that courts should consider in determining whether a joint employment relationship exists, some of its sister circuits have identified what factors might be pertinent to such an analysis. For example, courts in the Second Circuit examine:
(1) whether the premises and equipment of the purported joint employer are used for the plaintiffs' work; (2) whether the contractors had a business that could or did shift as a unit from one putative joint employer to another; (3) the extent to which plaintiffs performed a discrete line-job that was integral to the process of production for the purported joint employer; (4) whether responsibility under the contracts could pass from one subcontract to another without material changes; (5) the degree to which the purported joint employer or their agents supervised the plaintiffs' work; and (6) whether plaintiffs worked exclusively or predominantly for the purported joint employer.
Zheng, 355 F.3d at 72 (also construing Rutherford to mean that "in certain circumstances, an entity can be a joint employer under the FLSA even when it does not hire and fire its joint employees, directly dictate their hours, or pay them"). The Fifth and Ninth Circuit Courts of Appeal also have delineated certain relevant criteria for courts 330 considering whether *330 a joint employment relationship might exist.[26]
3. Analysis 0907 Employer or Joint Employer Allegations are Sufficient
Both parties suggest that this Court look to the standard agreement between Wal-Mart and its maintenance contractors in order to determine the nature of the relationships between the parties. (Exhibit 1 to Declaration of Tim Wamsley in Support of Def.'s Opp. to Pl.'s Mot. for Facilitated Notice.) The Floor Service Cleaning Contract provides:

Neither Wal-Mart nor Contractor has the right, and shall not seek, to exercise any control over the other party, its employees, or its agents. Contractor shall control the methodology for performing the Services to meet WalMart's specifications and Contractor's service proposal ... Each party shall be solely responsible for hiring, firing, promoting, demoting, rates of pay, benefits, and other terms and conditions in regard to its own employees. Neither Contractor nor any of its employees or agents may be considered Wal-Mart's agents or employees for any purpose and have no authority to act or purport to act on Wal-Mart's behalf.
As a preliminary matter, this Court doubts whether there is any mechanism for reviewing the Contract in the context of a Rule 12(b)(6) motion to dismiss. Plaintiffs have not referred to the Contract or its terms in the complaint, even if they have alleged facts concerning the relationship between Wal-Mart and its various maintenance contractors. Although neither party has objected to this Court's consideration of this document, WalMart has not sought to convert this motion into one for summary judgment, and this Court declines to consider the Contract in its resolution of the instant motion, insofar as the Contract was not attached to the complaint, the complaint does not refer to the Contract, and the parties have not engaged in discovery.[27]
This Court is satisfied that Plaintiffs have alleged sufficient facts concerning the employment relationship for purposes of stating an FLSA claim. Based on the relevant law, the determination of whether Wal-Mart is an 331 employer or joint employer *331 depends upon a consideration of a range of factors. Here, all of the named plaintiffs have worked at various Wal-Mart stores. (RAC ¶¶ 7-27.) Plaintiffs allege that Wal-Mart exercised the power to hire and fire plaintiffs, controlled their wages, hours and working conditions, as well as the quality standards governing their work. (RAC ¶¶ 52-53.) Given the allegations that the plaintiffs worked seven days a week, and that they worked, in some cases, at least 70 hours each week, it is reasonable to infer that the plaintiffs did not work for any entities other than Wal-Mart in any significant capacity. (RAC ¶¶ 7-15, 18, 20-21, 23-24, 26-27). Plaintiffs also allege that on-site managers recorded the time and costs associated with maintenance functions, and forwarded along such information "on a regular and periodic basis to Wal-Mart headquarters." (RAC ¶ 55.)
Based upon these allegations, and assuming their truth, as this Court must, pursuant to Rule 12(b)(6), and in light of the FLSA's broadly defined terms concerning the employment relationship, this Court concludes that Plaintiffs have stated sufficient facts to state an employment relationship for purposes of stating an FLSA claim against Wal-Mart. Wal-Mart's motion to dismiss Count 4, on the grounds that Wal-Mart is not an employer or joint employer, is denied.
C. Minimum Wage and Overtime Claims
Wal-Mart presents one other basis in support of its motion to dismiss Plaintiffs' FLSA claim in Count 4 of the complaint. Wal-Mart argues that Plaintiffs' FLSA claim should be dismissed because Plaintiffs have failed to state minimum wage and overtime pay claims under the Act. This Court disagrees, and thus, Wal-Mart's final basis for dismissing Plaintiffs' FLSA claim is denied.
At Count 4 of the complaint, Plaintiffs seek relief under the FLSA for failure to pay Plaintiffs minimum wage and overtime. Wal-Mart seeks to have Plaintiffs' entire FLSA claim dismissed because some of the plaintiffs may have been paid above the minimum wage. First, the notion that some plaintiffs may have been paid minimum wage, while others have not, is not fatal to the minimum wage claim. Second, the argument that this claim should fail because some of the plaintiffs (but again, not all plaintiffs named thus far) were deprived of overtime under the FLSA, according to Wal-Mart's calculations, lacks merit. Therefore, Wal-Mart's motion to dismiss Count 4 is denied.
Wal-Mart's own math, which purports to adopt Plaintiffs' factual allegations as true, as they must for purposes of a motion to dismiss, reveals that at least some of the plaintiffs have stated legally sufficient minimum wage and overtime pay claims under the FLSA. While asserting that "thirteen of the seventeen Plaintiffs were paid above minimum wage plus overtime" (Def. Br. at 32), Wal-Mart also admits, on the next page of its brief, that the "remaining four Plaintiffs received near the lawful minimum wage based on their pleadings." (Def. Br. at 33.) "Near" is not enough. Simply put, payment of "near" the lawful minimum wage is not payment of the minimum wage. Plaintiffs either were paid at least the statutory minimum wage, or they were not. The potential failure of

some plaintiffs' claims for minimum wage pay does not preclude the survival of the entire claim, so long as some of the plaintiffs allege facts reasonably suggesting that they were not paid minimum wage.
332 Furthermore, Wal-Mart essentially concedes that Plaintiffs at least have stated a *332 claim for overtime pay for work already performed. It contends that "[d]espite all of the hyperbole of the Amended Complaint ... this case essentially involves an alleged denial of some overtime pay to these four Plaintiffs." (Def. Br. at 33.) Wal-Mart has no adequate rejoinder to Plaintiffs' argument that it alleges claims of unpaid overtime. Plaintiffs are not obligated to allege claims of egregious deprivations of overtime 0907 they only need to allege, as Wal-Mart has described the issue, deprivation of "some" overtime pay. In reply, Wal-Mart concedes that, while the amounts it paid "exceeded the minimum wage in all cases," it paid "the required overtime ... in most cases."[28] It does not assert that, in all cases, it paid the required overtime. Having paid overtime in most cases and near minimum wage in others still leaves a claim for some unpaid minimum wage and overtime.
For the foregoing reasons, Wal-Mart's motion to dismiss Count 4 is denied.
V. Count 5 0907 False Imprisonment Claim
Wal-Mart asserts that, despite the inflammatory allegations at Count 5, Plaintiffs have not alleged sufficient facts to state a claim for false imprisonment.
This Court disagrees. Assuming the truth of Plaintiffs' allegations and granting all favorable inferences to the nonmoving party, as this Court must in deciding a Rule 12(b)(6) motion, this Court concludes that Plaintiffs have stated a claim for false imprisonment. Accordingly, the motion to dismiss with respect to Count 5 is denied.
Plaintiffs allege that Wal-Mart intentionally engaged in a widespread, systematic practice of locking janitors into their stores during their shifts, against their will, causing them physical and emotional harm. (RAC ¶¶ 92-93.) The complaint further asserts that Wal-Mart:
[C]ompelled the labor of the janitors through its widespread and systematic practice of intentionally locking these vulnerable workers into its stores during its shifts. The [plaintiffs] knew they were so confined to the stores by Wal-Mart. Such confinement was against their will and resulted in physical and emotional injury of plaintiffs and coerced plaintiffs to work for Wal-Mart whether they wanted to or not.
(RAC ¶ 45.)[29]
As a preliminary matter, this Court should address the issue of which state's law should provide the standard 333 against which the sufficiency of Plaintiffs' allegations are measured. The named plaintiffs *333 reside in eight
different states: Alabama, Florida, Georgia, Michigan, Mississippi, New Jersey, Texas, and Virginia. In their briefs, Wal-Mart largely relied on New Jersey law, to which Plaintiffs did not object, and Plaintiffs referred to the Restatement definition of this claim. For purposes of deciding this motion, this Court shall apply New Jersey law.
When a district court sits in diversity jurisdiction over state law claims, it should apply the choice of law rules of the forum in which it sits. See Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). In this Circuit, this same principle applies when a district court has federal question jurisdiction over an action, and is exercising pendent jurisdiction over state or common law claims. See Sys. Operations, Inc. v. Scientific Games Dev. Corp., 555 F.2d 1131, 1136 (3d Cir.1977) (stating that Klaxon "holds true with respect to pendent jurisdiction claims" even though the subject matter jurisdiction in that action was based on diversity); Rohm & Haas Co. v. Adco Chem. Co., 689 F.2d 424, 429 (3d Cir.1982) (stating that "a federal court whose jurisdiction over a state claim is based on diversity or on pendency to a federal claim must apply the conflicts of law principles of the forum state") (internal citations omitted).
New Jersey applies the "governmental-interest" choice-of-law test for tort claims, applying the law of "the state with the greatest interest in governing the particular issue" in the underlying litigation. See Marks v. Struble, 347 F.Supp.2d 136, 141-42 (D.N.J.2004) (citing Veazey v. Doremus, 103 N.J. 244, 510 A.2d 1187, 1189 (1986)). Under this test, a court first must consider whether a conflict exists between the laws of the interested jurisdictions. See Marks, 347 F.Supp.2d at 141-42. If an actual conflict exists, the court then must "identify the

governmental policies underlying the law of each state and how those policies are affected by each state's contacts to the litigation and to the parties." See id.
Where an examination of the various state laws lead to the same outcome 0907 thereby creating a "false conflict" 0907 the conflict of law rules of this state permit this Court to resolve the case without choosing between the laws of various states. See Rohm & Haas Co., 689 F.2d at 429; see Marks, 347 F.Supp.2d at 141-42 (finding a false conflict where the laws of New Jersey and New York governing claims of tortious interference with contract are "in accord"); Williamson v. Lazeration, No. 88-1456, 1988 WL 142409, at *3 (D.N.J. Dec.20, 1988) (finding a false conflict and applying New Jersey law). Therefore, a determination as to whether an actual conflict of laws exists must be made by considering how claims for false imprisonment have been defined or understood by each of these states.
In reviewing the law from the states in which the named plaintiffs reside, as well as New Jersey law, this Court concludes that, at this time, there is no conflict of laws, false or otherwise, requiring resolution. Each state's 334 definition of false imprisonment is consonant with New Jersey law.[30] Accordingly, this Court is permitted *334 to apply the state law of the forum in which it sits, New Jersey, in determining the viability of Count 5.
In New Jersey, a person "is falsely imprisoned when that person's freedom of movement is constrained ... by force or by threats of force communicated through conduct or words. But for threats to be held to be a constraint, they must be such as would `induce a reasonable apprehension of force and the means of coercion [must be] at hand.'" See Maietta v. United Parcel Serv., Inc., 749 F.Supp. 1344, 1367 (D.N.J.1990) (quoting Earl v. Winne, 14 N.J. 119, 101 A.2d 535 (1953)). Earl explains:
The essential thing is the constraint of the person. This constraint may be caused by threats as well as by actionable force, and the threats may be by conduct or by words. If the words or conduct are such as to induce a reasonable apprehension of force and the means of coercion is at hand, a person may be as effectually restrained and deprived of liberty as by prison bars.
101 A.2d at 539.
Physical force does not amount to an actionable restraint if there is a safe avenue of escape through an exit, but in the absence of a "reasonable means of escape," there may be an actionable restraint. See Richardson v. Costco Wholesale Corp., 169 F.Supp.2d 56, 61-62 (D.Conn.2001) (citing RESTATEMENT (SECOND) OF TORTS § 36 (1965)). According to the Restatement, walking through an emergency exit door is a reasonable means of escape even if such exit sounds off an alarm, but requiring an individual to use an exit that would cause material damage to the person's clothing, would constitute an unreasonable method of escape.
In order for allegations of threats of force to support a claim for false imprisonment, the threat of force must be sufficient for a person to be placed in reasonable apprehension of force, in order to state a claim. For example, the fact that an alarm might sound if a plaintiff exits through an employee exit, or that there is moral pressure, or that one's job is being threatened, is not sufficiently adequate to constitute an actionable constraint by threat of force. Id.
Plaintiffs' claim of false imprisonment appears to be rooted in their allegation that some of them were locked into their stores during their shifts, as part of a widespread practice and policy 0907 against their will.[31] (RAC ¶ 92.) 335 While the matters *335 of public record, such as published news articles on this alleged policy are not undisputed, this Court, at this stage of the proceedings, must grant all reasonable inferences in favor of Plaintiffs, the non-moving party. See, e.g., Steven Greenhouse, Workers Assail Night Lock-ins by Wal-Mart, N.Y. TIMES, January 18, 2004, at A1 (stating that "[f]or more than 15 years, Wal-Mart Stores, Inc., the world's largest retailer, has locked in overnight employees at some of its Wal-Mart ... stores" but also stating that, according to Wal-Mart, the lock-ins "secure these stores just as any other business does that has any employees working overnight"); see also W. Penn Power Co., 147 F.3d at 259; see also 5A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 1357 (2d ed.1990) (stating that courts deciding Rule 12(b)(6) motions may consider matters of public record). Accordingly, based on the allegations and granting all reasonable inferences therefrom in favor of Plaintiffs, Defendant's motion to dismiss Count 5 is denied.

CONCLUSION
For the foregoing reasons, Defendant's motion to dismiss the complaint is granted as to Counts 1, 2 and 3, and denied as to Counts 4 and 5. Counts 1 and 2 shall be dismissed without prejudice, and Plaintiffs shall have the opportunity to amend these claims, if they so choose, within 45 days of the entry of this Opinion. Count 3 shall be dismissed with prejudice.
[1] During oral argument, this Court granted Plaintiffs permission to file a Revised First Amended Class Action Complaint and Jury Demand in order to correct certain typographical errors. Plaintiffs filed their revised pleading with this Court on October 28, 2004.
[2] By letters to this Court, the parties advised that, in March 2005, the United States reached an $11 million global civil settlement with Wal-Mart in connection with this investigation. Wal-Mart did not admit any wrongdoing as part of the settlement. Separately, some of the contractors that provided cleaning services to Wal-Mart retail store locations between 1998 and 2002 also agreed to a $4 million criminal forfeiture related to the hiring of unauthorized aliens.
[3] "Civil RICO standing is usually viewed as a ... question of stating an actionable claim, rather than as a ... question of subject matter jurisdiction." See Anderson v. Ayling, 396 F.3d 265, 269 (3d Cir.2005).
[4] The elements of each of the predicate acts relevant to this action are set forth below as part of this Court's analysis of whether or not Plaintiffs have alleged sufficient facts to state a claim that Wal-Mart committed at least two predicate acts required for RICO enterprise liability.
[5] Wal-Mart correctly points out that this actually is not a separate predicate act, but rather a penalty provision, derivative of the other immigration predicate acts enumerated at Section 1324. (Def. Br. at 16 n. 2.)
[6] The aiding and abetting provision, 8 U.S.C. § 1324(a)(1)(A)(v)(II), prohibits "any person who aids or abets the commission of any of the preceding acts" and is a predicate act for purposes of stating a RICO claim. The "preceding acts" are defined at 8 U.S.C. §§ 1324(a)(1)(A)(I), (ii), (iii), and (iv). These paragraphs prohibit transporting, harboring and encouraging, as well as the act of knowingly bringing any alien into the United States at a place other than a designated port of entry.
For purposes of this analysis, this Court applies the parties' proffered definition of aiding and abetting, which occurs when: (1) the defendant associates with a criminal venture; (2) participates in the venture; and (3) seeks by action to make the venture succeed. (Def. Br. at 15; Pl. Br. at 27) (both citing United States v. Romero-Cruz, 201 F.3d 374, 378 (5th Cir.2000), which sets forth the elements of aiding and abetting under 18 U.S.C. § 2). A defendant has "`associated' if he shared in the criminal intent of the principal, and ... `participated' if he engaged in affirmative conduct designed to aid the venture." Romero-Cruz, 201 F.3d at 378.
[7] Conspiracy is established by demonstrating: (1) an agreement between two or more persons to commit an unlawful act; (2) who possess the intent to achieve the unlawful purpose or the knowledge of the conspiracy's unlawful purpose; and (3) an overt act by one or more members of the conspiracy in furtherance of the unlawful purpose. See United States v. Klein, 515 F.2d 751, 753 (3d Cir.1975).
[8] Plaintiffs have not contended, wisely, that the mere hiring of undocumented workers is a sufficient basis from which to infer that Wal-Mart engaged in, or conspired to, or otherwise aided and abetted, the transport or attempted transport, of illegal aliens in furtherance of their illegal presence in the country.
[9] Although there are allegations that some of the plaintiffs were locked into Wal-Mart stores, Plaintiffs allege these facts to support their claim of false imprisonment (RAC ¶ 92), and their assertion that Wal-Mart exercised its control over Plaintiffs as an employer for FLSA purposes (RAC ¶ 52), not to bolster their claims of concealment or shielding. In their brief, Plaintiffs argue that the lock-ins helped to conceal or shield Plaintiffs from detection (Pl. Br. at 32) (citing RAC ¶¶ 7-15, 20-21, 52), but they actually do not allege these facts in their complaint.

[10] Oloyede concluded that the encouraging statute was not limited to activities directed to aliens living outside the United States, but also could apply to aliens already in the United States. Oloyede found that the sale of fraudulent immigration documents was sufficient proof of encouraging, because these documents assured illegal aliens that "they could continue to work in the United States, that they would not be subject to the threat of imminent detection and deportation, and that they could travel back to their homeland without risk of being prevented from returning." 982 F.2d at 137.
[11] It is worth noting that a separate provision, 8 U.S.C. § 1324a(f)(1), prohibits "any person or entity" from engaging "in a pattern or practice of violations of subsection (a)(1)(A) or (a)(2) of this section." Also, 8 U.S.C. § 1324a(a)(1)(A) generally prohibits the hiring of unauthorized aliens. These particular prohibitions against the hiring of unauthorized aliens, however, are not RICO predicate acts.
[12] The mail fraud statute provides, in part, that:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises... for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both.
18 U.S.C. § 1341.
The wire fraud statute provides:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
18 U.S.C. § 1343.
[13] See also Lum, 361 F.3d at 220 (stating that the district court properly dismissed a RICO claim predicated on mail and wire fraud where the fraud was not pled with specificity); Seville Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786, 791 (3d Cir.1984); W. 79th St. Corp. v. Congregation Kahl Minchas Chinuch, No. 03-8606, 2004 WL 2187069, at *6 (S.D.N.Y. Sept.29, 2004); Birch St. Recovery Corp. v. Thomas, No. 99-571, 2000 WL 1513799, at *8 (D.N.H.2000). By contrast, courts have applied the more liberal Rule 8 pleading standards to RICO actions not involving allegations of fraud. See, e.g., Williams v. Mohawk Indus., Inc., 314 F.Supp.2d 1333, 1344 (N.D.Ga.2004) (applying Rule 8 standards to RICO action based on immigration predicate acts).
[14] In addition, the "equity of permitting a re-pleading is heightened where they did not expect [the] full weight of [a] RICO claim to rest on allegations of fraud." Karris, 780 F.2d at 645.
[15] 18 U.S.C. § 1956(a)(1)(A)(i) provides that:
[w]hoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity with the intent to promote the carrying on of specified unlawful activity ... shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.

Sections 1956(a)(1)(B)(i) and (ii) provide the same penalties for:
[w]hoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity ... [and] knowing that the transaction is designed in whole or in part (i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity, or (ii) to avoid a transaction reporting requirement under State or Federal law.
Sections 1956(a)(3)(A), (B), and (C) provide that:
[w]hoever, with the intent (A) to promote the carrying on of specified unlawful activity; (B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or (C) to avoid a transaction reporting requirement under State or Federal law, conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both.
[16] Courts appear to be divided on the question of whether allegations of money laundering are subject to Rule 9 requirements of particularity. See Shapo, 246 F.Supp.2d at 957 n. 4 (comparing Mezzonen v. Wright, No. 97-9380, 1999 WL 1037866, at *8 (S.D.N.Y. Nov.16, 1999) (not applying a Rule 9(b) standard), with Wight v. BankAmerica Corp., 219 F.3d 79, 92 (2d Cir.2000) (applying the 9(b) standard); Paycom Billing Servs., Inc. v. Payment Res. Int'l, 212 F.Supp.2d 732, 736 (W.D.Mich.2002) (same)). Because Plaintiffs' allegations of money laundering fail under even the more lenient Rule 8 pleading standards, they have failed to state the predicate act of money laundering.
[17] In pertinent part, 42 U.S.C. § 1985(3) provides:
If two or more persons in any State or Territory conspire or go in disguise on the highway or on the premises of another, for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws; or for the purpose of preventing or hindering the constituted authorities of any State or Territory from giving or securing to all persons within such State or Territory the equal protection of the laws; ... in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages occasioned by such injury or deprivation, against any one or more of the conspirators.
[18] Plaintiffs allege in the complaint that they are "recent immigrants, including undocumented persons." (RAC ¶ 84.) Plaintiffs describe themselves as individuals of "irregular status" in their opposition brief, not in the complaint. For purposes of resolving the instant Rule 12(b)(6) motion, this Court shall adhere to the definition of the class, as it has been alleged in the complaint.
[19] Compare Perez v. Cucci, 725 F.Supp. 209, 249-50 (D.N.J.1989) (cataloging cases examining whether politically based classes were protected under section 1985 and concluding that a majority held that section 1985 covers politically motivated conspiracies), with Hauptmann v. Wilentz, 570 F.Supp. 351, 386 n. 37 (D.N.J.1983), aff'd mem. 770 F.2d 1070 (3d Cir.1985), cert. denied, 474 U.S. 1103, 106 S.Ct. 887, 88 L.Ed.2d 922 (1986), to which Perez cites as an example of a court "expressing doubt" as to whether section 1985 reached "nonracial, politically motivated conspiracies." Perez was affirmed in a table decision. See 898 F.2d 142 (3d Cir.1990).
Other asserted bases for protection also have been rejected as falling outside the ambit of protection of section 1985. For example, section 1985 could not provide relief to abortion clinics that had sued an association and individuals demonstrating outside their clinics. See Bray v. Alexandria Women's Health Clinic, 506 U.S. 263, 113 S.Ct. 753, 122 L.Ed.2d 34 (1993). In Bray, the abortion clinics had asserted that anti-abortion demonstrators' opposition to abortion, which had been directed not just to "women seeking abortions" but towards "women in general," qualified as an "otherwise class-based, invidiously discriminatory animus" under section 1985. See 506

U.S. at 269, 113 S.Ct. 753. The Supreme Court disagreed. It cast the clinics' argument as an approach that incorrectly equated opposition to an activity that can be engaged in by women only with opposition to women, and vacated the judgment that had been awarded to the abortion clinics under section 1985.
[20] Plaintiffs also assert that nothing in the text of FLSA appears to limit relief to individuals like Plaintiffs, who allege that they were hired largely through maintenance contractors. (Pl. Br. at 12 n. 3 (citing Donovan v. DialAmerica Mktg., Inc., 757 F.2d 1376, 1382 (3d Cir.1985))).
[21] But cf. Renteria v. Italia Foods, Inc., No. 02-495, 2003 WL 21995190, at *6 (N.D.Ill. Aug.21, 2003) (holding that, in light of Hoffman, undocumented workers are entitled to compensatory damages under FLSA, but not other remedies like back or front pay which would contravene the policies underlying IRCA and otherwise assume the continued and unlawful employment of undocumented workers).
[22] The district court decisions cited by Plaintiffs in their brief include: Renteria, 2003 WL 21995190 at *6; Albertsons, Inc., 2002 WL 1163623, at *5; Liu v. Donna Karan Int'l, Inc., 207 F.Supp.2d 191 (S.D.N.Y.2002); Singh, 214 F.Supp.2d 1056; Cortez v. Medina's Landscaping, No. 00-6320, 2002 WL 31175471, at *1 (N.D.Ill. Sept.30, 2002); and Flores v. Amigon, 233 F.Supp.2d 462 (E.D.N.Y.2002).
[23] See Department of Labor, Employment Standards Administration, Wage and Hour Division, "Fact Sheet # 48: Application of U.S. Labor Laws to Immigrant Workers: Effect of Hoffman Plastic decision on laws enforced by the Wage and Hour Division," available at http://www.dol.gov/esa/regs/compliance/whd/whdfs48.htm (stating that the "Supreme Court's concern [in Hoffman] with awarding back pay `for years of work not performed, for wages that could not lawfully have been earned,' does not apply to work actually performed").
[24] In Ulloa, the court barred an undocumented worker from recovering unpaid overtime from his employer, a landscaper, but permitted him to collect unpaid minimum wage pay for work already performed, under the FLSA. 768 N.Y.S.2d at 557. Although the court concluded that federal district courts had not "squarely confronted the precise question" before it, see id., it agreed with their reasoning "up to a point" and therefore, allowed the plaintiff to collect on unpaid minimum wages. Id. Ulloa precluded the plaintiff from recovering overtime pay, however, because the employment contract was "tainted with illegality." Id. at 558. Even though the court specifically noted that there was no evidence that the plaintiff had obtained his employment by fraud, it presumed that the agreement was "tainted" because, as observed by the Supreme Court in Hoffman, it "`is impossible for an undocumented alien to obtain employment in the United States without some party directly contravening explicit congressional policies.'" Id.
It is difficult to discern how the Ulloa court concluded that the Hoffman presumption of illegality precluded relief in the form of overtime pay but not unpaid minimum wages, or at what "point" the court parted ways from federal district courts who have addressed, in one way or another, the question of whether undocumented workers may recover under the FLSA.
[25] See, e.g., Liu, 207 F.Supp.2d at 192 (concluding that "courts addressing the issue of whether defendants should be allowed to discover plaintiff-workers' immigration status in cases seeking unpaid wages brought under the FLSA have found such information to be undiscoverable") (citing In re Reyes, 814 F.2d 168 (5th Cir.1987), which overturned a district court order permitting such inquiry for purposes of determining coverage under the FLSA); Albertsons, Inc., 2002 WL 1163623, at *5.
[26] The Fifth Circuit Court of Appeals has established its own five-prong test: (1) whether employment takes place on the premises of the company; (2) how much control the company exerts over the employees; (3) the company's power to hire/fire or modify the terms/conditions of employment; (4) whether the employees perform a "specialty" job within a production line; and (5) whether the employee may refuse to work for the company or work for others. See Wirtz, 405 F.2d at 669-70.
In Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir.1983), the Ninth Circuit considered whether the proposed employer: (1) had the power to hire/fire the employees; (2) supervised/controlled employee work schedules or conditions of employment; (3) determined the rate/method of payment; and (4) maintained employment records.

[27] In any event, the Contract would not resolve necessarily the question of whether Wal-Mart is an employer or joint employer of Plaintiffs. Contract disclaimers, which provide that a particular entity is/is not an employer or is/is not an independent contractor or employee, generally do not decide the issue. See 73 A.L.R. Fed. 609, 1985 WL 287362 at § 7 (2004). "An employer's characterization of an employee is not controlling ... for otherwise there could be no enforcement of any minimum wage or overtime law." Ansoumana, 255 F.Supp.2d at 190; Sec'y of Labor v. Lauritzen, 835 F.2d 1529, 1545 (7th Cir.1987) ("The FLSA is designed to defeat rather than implement contractual arrangements ... `economic reality' rather than contractual form is indeed dispositive.").
[28] Wal-Mart's contention that there are no claims for minimum wage stated in the complaint appears to depart from its previous theory, which was that most, but not all, plaintiffs had failed to state a claim for unpaid minimum wage.
[29] Plaintiffs further allege that Wal-Mart contractors "used the threat of deportation to frighten undocumented janitors into acquiescence," and that their "employment ... in the face of these threats constitutes forced or involuntary servitude prohibited by 18 U.S.C. § 1584." (RAC ¶ 47.) Although the threats of deportation plainly are proffered in support of allegations of involuntary servitude, one of the predicate acts underlying their RICO claim, Plaintiffs contend in their opposition brief that these threats of deportation also support their allegations of false imprisonment. Wal-Mart correctly points out that none of the 11 "lock in" plaintiffs have alleged that they were threatened with deportation. (Reply at 18.) Furthermore, because the sufficiency of this claim should be assessed according to how it has been alleged, and not how it has been presented through argument, this Court shall proceed on the notion that Plaintiffs' false imprisonment claim arises from their allegations of being "locked in" by Wal-Mart store managers "against their will." (RAC ¶¶ 92-93.)
[30] The following cases set forth the elements required to state a false imprisonment claim in the relevant jurisdictions. None of these elements is sufficiently distinct from New Jersey law to require a separate analysis. See Gonzales v. Motel 6 Operating, L.P., No. 04-384, 2004 WL 2757918, at *2 (W.D.Tex. Nov.23, 2004) (citing Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex.1995)); Lo Sacco v. Young, 20 Conn.App. 6, 564 A.2d 610, 617 (1989); Walsh v. Taylor, 263 Mich.App. 618, 689 N.W.2d 506, 513-14 (2004); Williams v. Smith, 179 Ga.App. 712, 348 S.E.2d 50, 52 (1986); Alpha Gulf Coast, Inc. v. Jackson, 801 So.2d 709, 720 (Miss.2001); Spears v. Albertson's Inc., 848 So.2d 1176, 1177 (Fla.Dist.Ct.App.2003); Crown Cent. Petroleum Corp. v. Williams, 679 So.2d 651, 653 (Ala.1996) (citing ALA. CODE § 6-5-170 (1975)); Frazier v. Strobel, No. 191117, 2002 WL 31431546, at *1 (Va.Cir.Ct. Apr. 19, 2002).
[31] As stated earlier, Plaintiffs allege that some of them were threatened with deportation. Setting aside the fact that these threats allegedly came from Wal-Mart contractors, these alleged threats are proffered in support of their claim that Wal-Mart was involved in a pattern of racketeering activity that involved involuntary servitude (not in support of their claim for false imprisonment). (RAC ¶ 47.) Nevertheless, the parties briefed the issue of whether or not the alleged threats of deportation are sufficient to state a claim for false imprisonment.
Although there are few cases construing the import of threats of deportation to a false imprisonment claim, courts have considered such threats in the context of claims of involuntary servitude, and both parties in the instant matter, to some degree, borrowed upon the concepts developed in this area of the case law in their briefs and argument with respect to whether Count 5 should be dismissed.
In this Court's view, the authority is not decisive, one way or the other, in this matter. The Supreme Court has stated that "it is possible that threatening ... an immigrant with deportation could constitute the threat of legal coercion that induces involuntary servitude, even though such a threat made to an adult citizen of normal intelligence would be too implausible to produce involuntary servitude." See Kozminski, 487 U.S. at 947, 949, 108 S.Ct. 2751 (citing with approval Shackney, 333 F.2d at 486, which held that "[w]hile a credible threat of deportation may come close to the line, it still leaves the employee with a choice, and we do not see how we could fairly bring it within § 1584 without encompassing other types of threat"). Of course, Kozminski ultimately concluded that psychological coercion was insufficient to establish a claim of involuntary servitude. Id. at 949, 108 S.Ct. 2751. Subsequently, the Victims of Trafficking and Violence Protection Act of 2000 added 18 U.S.C. § 1589 to the involuntary servitude provisions, making it a crime for anyone to obtain the labor of another "by means of any scheme ... intended to cause the person to believe that, if the person did not perform such labor or

services, that person or another person would suffer serious harm or physical restraint." See United States v. Bradley, 390 F.3d 145, 150 (1st Cir.2004) vacated, ___ U.S. ___, 125 S.Ct. 2543, 162 L.Ed.2d 271 (2005) (stating that "section 1589 was intended expressly to counter United States v. Kozminski"). By reaching the intent to cause a particular subjective belief in the victim, section 1589 may be based on conduct that amounts to psychological coercion, a proposition that the Court had rejected in Kozminski. The relevance of these authorities is limited, at best, in the instant case. Plaintiffs have argued, but not alleged, threats amounting to psychological coercion in support of their false imprisonment claim.
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 447 F.Supp.2d 379 (2006)
Victor ZAVALA; Eunice Gomez; Antonio Flores; Octavio Denisio; Hipolito Palacios; Carlos Alberto Tello; Maximiliano Mendez; Arturo Zavala; Filipe Condado; Luis Gutierrez; Daniel Antonio Cruz; Petr Zednek; Teresa Jaros; Jiri Pfauser; Hana Pfauserova; Pavel Kunc; and
Martin Macak, on behalf of themselves and all others similarly situated, Plaintiffs, v.
WAL-MART STORES, INC., Defendant.
Civil Action No. 03-5309(JAG).
United States District Court, D. New Jersey.
August 28, 2006.
3801 *380 *381 Gilberto M. Garcia, Mary Ann Kricko, Garcia and Kricko, Englewood Cliffs, NJ, James L. Linsey, Thomas N. Ciantra, Oriana Vigliotti, Cohen, Weiss and Simon LLP, New York, NY, for Plaintiffs.
Robert H. Bernstein, Reed Smith LLP, Newark, NJ, David P. Murray, Randy Branitsky, Willkie Farr & Gallagher LLP, Washington, D.C., for Defendant.
Michaelene Loughlin, Loughlin & Latimer, Hackensack, N.J., for Amicus Curiae Czech Republic.
OPINION
GREENAWAY, District Judge.
This matter comes before the Court on the motion to dismiss Count One and Count Two of Plaintiffs' Second Amended Complaint for failure to state a claim upon which relief can be granted, pursuant to FED. R. CW. P. 12 (b)(6), by Defendant Wal-Mart Stores, Inc. ("Wal-Mart"). For the reasons set forth below, this motion will be granted.
INTRODUCTION
The background to this case is set forth in this Court's Opinion of October 7, 2005 (the "Dismissal Opinion"). See Zavala v. Wal-Mart Stores, Inc., 393 F.Supp.2d 295 (D.N.J.2005). In this Court's Order of September 30, 2005, Wal-Mart's motion to dismiss was granted in part, and Counts One and Two of the Complaint were dismissed without prejudice. On November 21, 2005, Plaintiffs filed the Second Amended Complaint. Count One of the Second Amended Complaint alleges violation of RICO, 18 U.S.C. § 1962(c). Count Two alleges RICO conspiracy, in violation of 18 U.S.C. § 1962(d). On January 20, 2006, Wal-Mart filed the instant motion to dismiss these RICO claims.
ANALYSIS
I. Governing Legal Standards
A. Standard for a Rule 12(b)(6) Motion to Dismiss
On a motion to dismiss for failure to state a claim, pursuant to FED.R.Cw.P. 12(b)(6), the court must accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 382 1380, 1384-85 (3d Cir.1994). *382 A complaint should be dismissed only if the alleged facts, taken as true, fail to state a claim. See In re Warfarin Sodium, 214 F.3d 395, 397-98 (3d Cir.2000). The question is whether the

claimant can prove any set of facts consistent with his or her allegations that will entitle him or her to relief, not whether that person will ultimately prevail. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). "[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).
While a court will accept well-pled allegations as true for the purposes of the motion, it will not accept unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. See Morse v. Lower Merion School District, 132 F.3d 902, 906 n. 8 (3d Cir.1997). All reasonable inferences, however, must be drawn in the plaintiff's favor. See Sturm v. Clark, 835 F.2d 1009, 1011 (3d Cir.1987) . Moreover, the claimant must set forth sufficient information to outline the elements of his or her claims or to permit inferences to be drawn that the elements exist. See Fed. R.Civ.P. 8(a)(2); Conley, 355 U.S. at 45-46, 78 S.Ct. 99. "The defendant bears the burden of showing that no claim has been presented." Hedges v. United States, 404 F.3d 744, 750 (3d Cir.2005).
The Supreme Court has characterized dismissal with prejudice as a "harsh remedy." New York v. Hill, 528 U.S. 110, 118, 120 S.Ct. 659, 145 L.Ed.2d 560 (2000). Dismissal of a count in a complaint with prejudice is appropriate if amendment would be inequitable or futile. "When a plaintiff does not seek leave to amend a deficient complaint after a defendant moves to dismiss it, the court must inform the plaintiff that he has leave to amend within a set period of time, unless amendment would be inequitable or futile." Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir.2002).
II. Defendant's 12(b)(6) Motion to Dismiss
"In order to plead a violation of RICO, plaintiffs must allege (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Lum v. Bank of Am., 361 F.3d 217, 223 (3d Cir.2004); see also Sedima v. Imrex Co., 473 U.S. 479, 496, 105 S.Ct. 3292, 87 L.Ed.2d 346 (1985). The Supreme Court has construed § 1962(c) to also require that a plaintiff plead: 1) distinctness, as to the RICO "person" and "enterprise," Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161, 121 S.Ct. 2087, 150 L.Ed.2d 198 (2001); and 2) proximate causation of the claimed injury by the racketeering conduct, Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992). Count One fails to meet these requirements. Moreover, Plaintiffs have failed to state a valid claim of involuntary servitude.
A. The distinctness requirement
The Supreme Court has held that the language of § 1962(c) creates a pleading requirement of distinctness: "to establish liability under § 1962(c) one must allege and prove the existence of two distinct entities: (1) a `person': and (2) an `enterprise' that is not simply the same `person' referred to by a different name." Kushner, 533 U.S. at 161, 121 S.Ct. 2087.
Count One of the Second Amended Complaint contains a serious, fatal problem, in that it alleges that the RICO 383 person and the RICO enterprise are the same. Plaintiffs first define the RICO *383 person: "At all relevant times,
Wal0907Mart and its various contractors were `persons' within the meaning of RICO, 18 U.S.C. §§ 1961(3) and 1962 (c)." (Sec.Am. Compl.¶ 124.) Plaintiffs next define the RICO enterprise: "At all relevant times, Wal-Mart and its contractors formed an association-in-fact . . . referred to as the Wal-Mart Enterprise.'" (Sec.Am. Compl.¶ 125.) If the members of the enterprise are the same as the persons, the distinctness requirement has not been met, as the `person' and the `enterprise' must not be identical.
This problem is not limited to these two statements. Plaintiffs then allege that "Wal 0907Mart and its various maintenance contractors . . . engaged in `racketeering activity' within the meaning of 18 U.S.C. § 1961(1)" by engaging in certain predicate acts. (Sec.Am.Compl.¶ 128.) Here, and elsewhere in the Second Amended Complaint, Plaintiffs allege that both Wal0907 Mart and the contractors committed the predicate acts. The language of the statute specifies that the "person" commits the predicate acts: "It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity . ." 18 U.S.C. § 1962(c). The "person" conducts the enterprise through a pattern of

racketeering activity. When Plaintiffs allege that the contractors engaged in the predicate acts that constitute racketeering activity, as they do at numerous points in the Second Amended Complaint, this confirms that the contractors are within the meaning of "person." See Whelan v. Winchester Prod. Co., 319 F.3d 225, 229 (5th Cir.2003) ("For purposes of § 1962(c) . . . the plaintiff must demonstrate . . . that the RICO `person' who commits the predicate acts is distinct from the enterprise.") Because both Wal 0907 Mart and the contractors engaged in the racketeering activity, and also constitute the enterprise, the RICO person and the RICO enterprise are identical. The enterprise is the same as the person, merely referred to by a different name. Kushner states clearly that this is impermissible. Kushner, 533 U.S. at 161, 121 S.Ct. 2087.
In their opposition brief, however, Plaintiffs appear to take the position that Wal 0907 Mart alone is the person, and the association-in-fact of Wal0907Mart and the contractors is the enterprise. (Pls.' Opp. Br. 14-18.) Under that theory, the RICO person and the RICO enterprise are not identical. The Second Amended Complaint, however, does not embody this theory. Rather, throughout, the actors who are alleged to have performed the racketeering activities are both Wal0907Mart and the contractors. (See, e.g., Sec. Am. Compl. ¶ ¶187-116.) Thus, for example, in the section entitled, "The Wal0907Mart RICO Enterprise," Plaintiffs allege that Wal 0907Mart and the contractors created and constituted the enterprise, and then state: "Mlle participants in the Wal-Mart Enterprise conducted its affairs by employing, encouraging, harboring and trafficking in the labor of plaintiff immigrants . " (Sec.Am.Compl.¶ 41.)
As another example, in the section entitled, "Forced Labor and False Imprisonment by Wal-Mart," despite the fact that the heading states that Wal-Mart performed the predicate acts, the first paragraph alleges that both Wal-Mart and the contractors used coercion to compel labor. (Sec.Am.Compl.¶ 118.) Plaintiffs' contention that the "person" who conducted the enterprise through a pattern of racketeering is Wal-Mart alone is not supported by the Second Amended Complaint.
384 Plaintiffs' failure to allege a RICO "person" distinct from the RICO "enterprise" *384 requires that Count One be dismissed for failure to state a claim upon which relief can be granted. This pleading failure is not an omission that can be remedied by amendment; rather, it is woven into the fabric of the Second Amended Complaint, and could not be removed without restructuring the entire RICO theory. Because no amendment could make Count One of the Second Amended Complaint withstand a motion to dismiss, amendment is futile. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir.1997) ("`Futility' means that the complaint, as amended, would fail to state a claim upon which relief could be granted.") On this basis alone, Count One must be dismissed with prejudice.
B. The RICO claim for involuntary servitude
As just discussed, to state a RICO claim, Plaintiffs must allege "a pattern of racketeering activity," pursuant to 18 U.S.C. § 1962(c). Plaintiffs allege that, pursuant to 18 U.S.C. §§ 1961(1) and (5), one such pattern involved acts in violation of § 18 U.S.C. § 1584, titled "Sale into involuntary servitude." As also discussed, Plaintiffs' allegations of involuntary servitude fail to meet the requirement that the person be distinct from the enterprise.
Even if this Court were to accept Plaintiffs' argument that Wal-Mart alone is the RICO "person," and separate the allegations about Wal-Mart from the allegations about the contractors, Plaintiffs have failed to state a claim that Wal-Mart performed acts constituting involuntary servitude. As to Wal-Mart's conduct, Plaintiffs allege no more than that Wal-Mart locked the stores' doors at night and required workers to find a manager with a key in order to exit. This is insufficient to state a claim for involuntary servitude.
The Supreme Court has stated that "the term `involuntary servitude' necessarily means a condition of servitude in which the victim is forced to work for the defendant by the use or threat of physical restraint or physical injury, or by the use or threat of coercion through law or the legal process." United States v. Kozminski, 487 U.S. 931, 952, 108 S.Ct. 2751, 101 L.Ed.2d 788 (1988). As observed by the Third Circuit, "[m]odern day examples of involuntary servitude have been limited to labor camps, isolated religious sects, or forced confinement." Steirer v. Bethlehem Area Sch. Dist., 987 F.2d 989, 999 (3d Cir.1993). Plaintiffs do not allege that a Wal-Mart manager ever refused to allow exit, and thus no claim of forced confinement has been made. Moreover, the Third Circuit instructs that, where a person may choose to work or not to work, there cannot be involuntary servitude. Id. at 1000. If a request to a manager resulted in the opening of the door, Plaintiffs could choose not to work. As to Wal-Mart, under 18 U.S.C. § 1584, Plaintiffs have failed to failed to state a claim upon which relief can be granted.

Moreover, Plaintiffs have not alleged that the statute's mental state requirements are met: § 1584 requires that the conduct be committed "knowingly and willfully." Plaintiffs have not alleged that Wal-Mart locked its store doors at night knowing that workers would be placed into a condition of servitude.
Plaintiffs' RICO claim, based on predicate acts of involuntary servitude, will be dismissed with prejudice because repleading is futile. In the Dismissal Opinion, this Court held that Plaintiffs had failed to state a claim that WalMart committed acts of involuntary servitude, based on similar reasoning0907the allegations were insufficient 385 because they did not allege that the employees had no choice. Plaintiffs *385 have had the opportunity to amend the Complaint to correct this deficiency and have failed to do so. Because amendment appears futile, this claim will be dismissed with prejudice.
C. The RICO claims for immigration violations and money laundering: the proximate cause requirement
A plaintiff may sue for damages under § 1964(c) only if the alleged RICO violation was the proximate cause of the plaintiff's injury. Holmes, 503 U.S. at 268, 112 S.Ct. 1311. A claim may be dismissed for failure to plead proximate cause adequately: "we read section 1964(c) as requiring a RICO plaintiff to make two related but analytically distinct threshold showings . . . :(1) that the plaintiff suffered an injury to business or property; and (2) that the plaintiff's injury was proximately caused by the defendant's violation of 18 U.S.C. § 1962." Maio v. Aetna Inc., 221 F.3d 472, 483 (3d Cir.2000). To withstand a motion to dismiss for failure to state a claim, pursuant to FED.R.Civ.P. 12(b)(6), a complaint for damages under § 1964(c), for violation of § 1962(c), must allege "facts sufficient to support an inference of proximate causation." Pelullo v. Nat'l Union Fire Ins. Co., 131 Fed.Appx. 864, 867 (3d Cir.2005).
In Holmes, the Supreme Court set forth the analysis of proximate cause under RICO, explained by the Third Circuit as follows:
The formal factors of proximate cause in RICO are . . . :(1) the directness of the injury 0907"the more indirect the injury, the more difficult it becomes to ascertain the amount of a plaintiffs damages attributable to [defendant's wrongdoing], as distinct from other, independent, factors;'" (2) the difficulty of apportioning damages among potential plaintiffs 0907"allowing recovery by indirectly injured parties would require complicated rules for apportioning damages;" and, (3) the possibility of other plaintiffs vindicating the goals of RICO0907"direct victims could generally be counted on to vindicate the policies underlying" RICO in a better manner than indirect victims.
Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 443 (3d Cir.2000) (quoting from Holmes, 503 U.S. at 268-69, 112 S.Ct. 1311).
Although Holmes lists three factors, the Third Circuit has observed that the Supreme Court put primary emphasis on the direct injury factor in the proximate cause analysis. Brokerage Concepts v. U.S. Healthcare, Inc., 140 F.3d 494, 520-21 (3d Cir.1998). Similarly, in Steamfitters, the Third Circuit gave the greatest weight to the directness of the injury, observing "[t]he tortured path that one must follow from" the alleged wrongdoing to injury. Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 930 (3d Cir.1999). This Court follows suit and in this case puts primary emphasis on the directness factor in the proximate cause analysis.
Count One alleges three categories of predicate violations: 1) violations of immigration law, pursuant to 8 U.S.C. § 1324; 2) involuntary servitude, pursuant to 18 U.S.C. § 1584; and 3) "conspiracy to money launder the proceeds of the aforesaid criminal acts," pursuant to 18 U.S.C. § 1956(h). Plaintiffs' short "proximate causation" paragraph makes two causal assertions relevant to the RICO claims: 1) "systematic violation of immigration law . . . was the necessary means through which plaintiffs were denied proper compensation, and in some cases physically beat up, unlawfully imprisoned and coerced into continuing to work at Wal-Mart;" and 2) "money 386 laundering also directly harmed plaintiffs inasmuch as it *386 shielded the enterprise from detection and thereby continued its existence." (Sec. Am.Compl.¶ 121.) As to the RICO claims for immigration violations and money laundering, the path from wrongdoing to injury is too indirect to meet the proximate cause requirement.
Plaintiffs claim that they suffered "direct economic harm" from the immigration violations, but do not explain how this is so. (Pls.' Opp. Br. 37.) Plaintiffs do not clearly articulate a theory of causation linking the immigration

predicate acts to the claimed injuries. In their brief, Plaintiffs variously invoke three theories: 1) the plan of exploitation theory; 2) the necessary precondition theory; and 3) the hiring cost reduction theory.[1]
The first theory is advanced by Plaintiffs when they contend that "participants in the enterprise committed the racketeering acts just so they could economically exploit plaintiffs." (Pls.' Opp. Br. 39.) The implication is that WalMart conducted the immigration violations and the underpayment as steps in a plan of exploitation. The second theory is a corollary to this: "plaintiffs were directly harmed by the immigration predicates because Wal-Mart could obtain janitorial labor at rates far below legally mandated levels only because it exploited the irregular immigration status of the janitors." (Pls.' Opp. Br. 39.) The implication is that commission of the immigration predicates provided the necessary precondition to the economic exploitation through wage underpayment. These are similar theories of indirect injury.
Neither theory alleges that the immigration violations directly injured Plaintiffs. Rather, the path from wrongdoing to injury has two steps. First, the immigration predicate acts caused the Plaintiffs to have immigrant status, which is implied to be a position of vulnerability to economic exploitation. Second, the position of vulnerability caused an increased risk of economic exploitation through underpayment of wages. As this analysis shows, the injury at the end is an indirect result of the acts at the beginning.
Plaintiffs have not alleged a sufficiently direct injury to meet the proximate cause requirement. This defect alone precludes finding that they have alleged proximate cause, and their position is further weakened by the presence of independent and intervening causes in the causal chain, such as the decision of the employer to employ at a particular wage, and the decision of the worker to work at that wage. Such decisions may be related to the irregular immigration status, but are largely independent and intervening. As Wal-Mart points out, when independent causes intervene in the sequence, this weakens the possible causal connection between wrongdoing and injury. Anderson, 396 F.3d at 270; Brokerage Concepts, 140 F.3d at 521 (inquiring whether an injury is "more appropriately attributable to an intervening cause that was not a predicate act under RICO.")
This proximate cause analysis receives substantial support from the recent decision of the Supreme Court in Anza v. Ideal Steel Supply Corp., ___ U.S. ___, 126 S.Ct. 1991, 164 L.E d.2d 720 (2006). In Anza, the Court held 387 that the plaintiff *387 could not maintain its claim under 18 U.S.C. § 1962(c) because it had failed to allege adequately that the RICO predicate act proximately caused the injury claimed. Plaintiff Ideal sued defendant National Steel, alleging that National was engaged in an illegal racketeering scheme with RICO predicate acts of failing to charge customers state sales tax, allowing National to reduce prices and gain market share over Ideal. National moved to dismiss Ideal's complaint under FED.R.Civ.P. 12(b)(6). The district court granted the motion; the Second Circuit reversed the district court; and the Supreme Court reversed the Second Circuit.
In explaining the Court's determination that Ideal had failed to satisfy the proximate cause requirement under Holmes, Justice Kennedy began by emphasizing that Holmes requires a "direct relation between the injury asserted and the injurious conduct alleged." Id. at 1996 (quoting Holmes, 503 U.S. at 268, 112 S.Ct. 1311.) The Court held that National's predicate acts of failing to charge sales tax did not directly injure Ideal. Id. at 1997. The Court relied heavily on two observations. Id. First, Ideal was not the direct victim of the predicate acts 0907the state was. Id. Second, the predicate acts (defrauding the state) were "entirely distinct" from the immediate cause of Ideal's injuries (offering lower prices). Id.
In the instant case, as in Anza, the predicate acts of transporting, harboring and encouraging aliens are "entirely distinct" from the immediate cause of Plaintiffs' injuries (underpayment of wages). This supports the conclusion that Plaintiffs have failed to meet the proximate cause requirement.
In Anza, the Court discussed the issue further, explaining that "[t]his conclusion is confirmed by considering the directness requirement's underlying premises." Id. The Court considered how difficult it would be to ascertain the damages caused by the predicate acts and, in essence, found that the multitude of intervening factors made ascertaining damages extremely complicated: National might have lowered its prices for reasons other than the predicate acts, and Ideal might have lost sales for reasons other than National's lower prices. Id.
The same reasoning holds in the instant case: ascertaining damages would be unmanageably complex due to the two-step, indirect nature of the theory of causation. As to the first step, the Court would have to apportion the

responsibility of Wal-Mart relative to that of the contractors, and the workers themselves, for the immigration violations that caused the irregular immigration status. Following that, for the second step, establishing the damages caused by irregular immigration status requires an analysis with many unknowns. Wal-Mart may have underpaid wages for reasons other than the workers' immigration status, and the workers might have worked for low wages for reasons other than their immigration status. It would be extremely difficult to ascertain what part of the wage underpayment damage was caused by the immigration status factor.
Furthermore, the complexity is increased by the fact that there are over two hundred claimants in the plaintiff class. Some workers may have had an irregular immigration status for reasons unconnected to Wal-Mart. It would be complex to differentiate the damaging effect of Wal-Mart-induced irregular immigration status from the effect of non-Wal-Mart-induced irregular immigration status.
Moreover, the Court would have to consider broader economic questions. To what extent was the wage 388 underpayment caused by conditions in the general labor market? To what extent was the wage *388
underpayment driven by an oversupply of workers in the market, unconnected to immigration status? Was English language competence an intervening variable? The Anza Court held that, when the damage determination would be so complex and difficult, this illustrates the lack of direct causal connection. Id. at 1997. As Justice Kennedy observed: "The element of proximate causation recognized in Holmes is meant to prevent these types of intricate, uncertain inquiries from overrunning RICO litigation." Id. at 1998.
It is worth noting that the Supreme Court specifically criticized the Second Circuit's reliance on an intent theory similar to that proposed by Plaintiffs in this case. Id. The Court stated that a plaintiff cannot "circumvent" the directness requirement simply by claiming that the predicate acts were performed with intent to produce the injury. Id. Thus, in the instant matter, even if Wal-Mart committed the predicate immigration violations with the intent to later underpay wages, this does not circumvent the Holmes requirement of showing a direct causal connection between predicate act and injury.
The cases Plaintiffs cite to support their argument of direct injury 0907Commer. Cleaning Servs. v. Cohn Sera Sys., 271 F.3d 374, 383 (2d Cir.2001), Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1166 (9th Cir.2002), Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 606 (6th Cir.2004), and Williams v. Mohawk Indus., 411 F.3d 1252, 1262 (11th Cir.2005)0907are distinguishable from the instant matter. In all four cases, the plaintiffs had alleged that the hiring of illegal immigrants proximately caused injury by depressing wages. The distinction is significant. The Second Amended Complaint in this case does not allege that Wal-Mart violated the laws barring the hiring of illegal immigrants; as Wal-Mart observes, the Dismissal Opinion held that Plaintiffs had failed to state a valid claim regarding hiring under 8 U.S.C. § 1324a(a)(1)(A), and Plaintiffs did not reassert a hiring violation in the Second Amended Complaint. A causal inference that links hiring of illegal immigrants to wage levels might be reasonable and direct, but Plaintiffs cannot rely here on any such inference because they have not alleged hiring as a predicate violation.
Plaintiffs' argument that money laundering proximately caused their injuries is even less direct. Plaintiffs contend that "[m]oney laundering also directly harmed plaintiffs inasmuch as it shielded the enterprise from detection and thereby continued its existence." (Sec.Am. Compl.¶ 121.) This statement is paradoxical because it fails to actually allege any direct harm while claiming to do so. Rather, on its face, it alleges only that money laundering allowed an injurious process to continue; its effect is, at most, an indirect one. Plaintiffs thus fail to allege any direct injury to Plaintiffs from money laundering.
To have a direct causal connection to a harm, Plaintiffs must allege that the money laundering caused an injurious act. They have not done so. "When an injury is indirect, remote, and many steps away from the alleged cause, it is unadvisable to allow a case to proceed." Allegheny, 228 F.3d at 445. Such is the case here.
Plaintiffs' RICO claim, based on predicate acts of immigration violations and money laundering, will be dismissed with prejudice because repleading is futile. Plaintiffs' allegations are clear, and the absence of a viable theory of direct and proximate causation is clear as well. This Court sees no possibility for Plaintiffs to amend the Second Amended Complaint to satisfy the proximate cause requirement. Because amendment is futile, Count One will be dismissed with prejudice.
389

*389 D. RICO Conspiracy
Count Two of the Second Amended Complaint alleges that Wal-Mart and the contractors conspired to violate § 1962(c), in violation of § 1962(d). Because Plaintiffs have failed to state any valid claim under § 1962(c), their claim under § 1962(d) must fail. "Any claim under section 1962(d) based on a conspiracy to violate the other subsections of section 1962 necessarily must fail if the substantive claims are themselves deficient." Lightning Lube v. Witco Corp., 4 F.3d 1153, 1191 (3d Cir.1993). Because the substantive claims cannot be replead, amendment of Count Two is futile, and it will be dismissed with prejudice.
CONCLUSION
Plaintiffs have failed to state RICO claims upon which relief can be granted. Count One must be dismissed because it fails to meet the distinctness requirement of 18 U.S.C. § 1962(c). In addition, Count One must be dismissed because: 1) Plaintiffs have failed to plead adequately that the predicate acts of immigration violations and money laundering proximately caused their injuries; and 2) Plaintiffs have failed to state a claim of involuntary servitude. Count Two must be dismissed because it is dependent on the viability of Count One. Pursuant to FED. R. Civ. P. 12(b)(6), Defendant's motion to dismiss Counts One and Two of Plaintiffs' Second Amended Complaint is granted. Count One and Count Two of the Second Amended Complaint are dismissed with prejudice.
[1] The hiring cost reduction theory is easily rejected. Plaintiffs propose that, by hiring workers who are illegal immigrants, Wal-Mart avoided the hiring costs associated with legal compliance. (Pls.' Opp. Br. 12.) This theory has no explanatory power for wage levels, as Wal-Mart saves the same amount in hiring costs no matter what wage the workers receive. There is no causal connection whatever between lower hiring costs and wage underpayment.
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 Zavala v. Wal-Mart Stores, Inc., Not Reported in F.Supp.2d (2007)

2007 WL 1134110 Only the Westlaw citation is currently available.
NOT FOR PUBLICATION United States District Court,
D. New Jersey.
Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Filipe
Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jiri Pfauser, Hana Pfauserova, Pavel Kunc, and Martin Macak, on behalf of themselves and all others similarly
situated, Plaintiffs, v.
WAL-MART STORES, INC., Defendant.
Civil Action No. 03-5309 (JAG). | April 16, 2007.
Attorneys and Law Firms
James L. Linsey, Cohen, Weiss and Simon LLP, New York, NY, Michaelene Loughlin, Loughlin & Latimer, Hackensack, NJ, for Plaintiffs.
Robert H. Bernstein, Reed Smith LLP, Newark, NJ, for Defendant.
Opinion
OPINION
GREENAWAY, JR., U.S.D.J.
*1 This matter comes before the Court on Plaintiffs’ motion for an order, pursuant to FED.R.CIV.P. 54(b), certifying this Court’s August 28, 2006 Order (the “Order”) (dismissing RICO claims) as a final judgment for immediate appeal. For the reasons set forth below, this motion will be denied.
INTRODUCTION
On August 28, 2006, this Court dismissed two RICO-related counts of Plaintiffs’ Second Amended Complaint for failure to state a claim .1 The Order dismissed Plaintiffs’ RICO claims in Count One because Plaintiffs failed to allege a distinct person, separate from a distinct enterprise. Zavala v. Wal-Mart Stores, Inc., 447 F.Supp.2d 379, 383-84 (D.N.J.2006). Further, this Court found that Plaintiffs’ RICO claim for involuntary

servitude would fail because it does not allege acts constituting involuntary servitude. Zavala, 447 F.Supp.2d at 384-85. This Court also held that Plaintiffs’ claims for immigration violations and money laundering under RICO fail because of the absence of a viable theory of direct and proximate causation. Zavala, 447 F.Supp.2d at 388. This Court granted Defendant’s motion to dismiss on the Second Count of Plaintiffs’ Second Amended Complaint because it alleged conspiracy to commit acts alleged in the First Count, which were dismissed.

1

This Court dismissed similar RICO claims, without

prejudice, in an Order dated October 7, 2005. Plaintiffs

reasserted the RICO claims in its Second Amended

Complaint and Defendant filed a second motion to

dismiss, resulting in the August 28, 2006 Order.

Plaintiffs now request an entry of final judgment on their RICO claims, pursuant to FED.R.CIV.P. 54(b), so that the Order can be immediately appealed.

DISCUSSION
I. Governing Legal Standards Rule 54(b) provides that “[w]hen more than one claim for relief is presented in an action, ... the court may direct entry of final judgment as to one or more but fewer than all of the claims ... only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.”
In Curtiss-Wright Corp. v. General Electric Co., the Supreme Court set forth the framework for applying Rule 54(b). “A district court must first determine that it is dealing with a ‘final judgment [-] a ‘judgment’ in the sense that it is a decision upon a cognizable claim for relief, and it must be ‘final’ in the sense that it is ‘an ultimate disposition of an individual claim entered in the course of a multiple claims action.’ “ Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 7 (1980) (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436 (1956)). “The District Court cannot, in the exercise of its discretion, treat as ‘final’ that which is not ‘final’ within the meaning of [28 U.S.C.] § 1291.” Sussex Drug Products v. Kanasco, Ltd., 920 F.2d 1150, 1154 (3d Cir.1990) (quoting Mackey, 351 U.S. at 437). Once the district court has determined that the order is a “final judgment,” it must then discern whether there is any “just reason for delay.” Curtiss-Wright, 446 U.S. at 8.
1

Zavala v. Wal-Mart Stores, Inc., Not Reported in F.Supp.2d (2007)

II. Final Judgment In determining whether a judgment is “final” for purposes of Rule 54(b), the Third Circuit looks to the definition of finality found in 28 U.S.C. § 1291-a judgment is final where it ends “the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Sussex Drug, 920 F.2d at 1153-54 (quoting Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 275 (1988)). Rule 54(b) does not alter this definition of finality, but, instead, merely allows “a judgment to be entered if it has the requisite degree of finality as to an individual claim in a multi[-]claim action.” Sussex Drug, 920 F.2d at 1154. “The partial adjudication of a single claim in not appealable, despite a[R]ule 54(b) certification.” Sussex Drug, 920 F.2d at 1154 (quoting Aetna Casualty & Surety Co. v. Giesow, 412 F.2d 468, 470 (2d Cir.1969)).
*2 “There is no definitive test to determine whether more than one claim is before the court.” Gerardi v. Pelullo, 16 F.3d 1363, 1369 (3d Cir.1994); Sussex Drug, 920 F.2d at 1154; Allegheny County Sanitary Auth. v. EPA, 732 F.2d 1167, 1172 (3d Cir.1984). The Third Circuit has noted, however, that, in the context of determining whether a district court has adjudicated one of several claims, or has adjudicated but one portion of a single claim, “[i]t is sufficient to recognize that a complaint asserting only one legal right, even if seeking multiple remedies for the alleged violation of that right, states a single claim for relief.” Sussex Drug, 920 F.2d at 1154 (quoting Liberty Mutual Ins. Co. v. Wetzel, 424 U.S. 737, 743 n. 4 (1976)).

This Court need not delve into an in depth analysis of the separability of the claims presented.2 Even if Plaintiffs’ RICO and FLSA claims are separate and distinct-meaning that this Court’s order dismissing the RICO claims is a “final judgment” for purposes of Rule 54(b)-this Court still finds that there is “just reason for delay.”

2

Indeed, this Court will explore the separability of the

claims in a similar context in its analysis of whether

there are any just reasons for delay. See infra pp 5-6.

“[C]onsideration of judicial administrative interests ‘is necessary to assure that application of the Rule effectively ‘preserves the historic federal policy against piecemeal appeals.” “ Wood v. GCC Bend, LLC, 422 F.3d 873, 878 (9th Cir.2005) (quoting Curtiss-Wright, 446 U.S. at 8 (quoting Mackey, 351 U.S. at 437)).

The Third Circuit has set forth five factors to examine when reviewing Rule 54(b) motions for “just reason for delay”

(1) the relationship between the

adjudicated and unadjudicated

claims; (2) the possibility that the

need for review might or might not

be mooted by future developments

in the district court; (3) the

possibility that the reviewing court

might be obliged to consider the

same issue a second time; (4) the

presence or absence of a claim or

counterclaim which could result in

a set-off against the judgment

sought to be made final; (5)

miscellaneous factors such as delay,

economic

and

solvency

considerations, shortening the time

of trial, frivolity of competing

claims, expense, and the like.

Berckeley Inv. Group, Ltd. v. Colkitt, 455 F.3d 195, 203 (3d Cir.2006) (quoting Allis-Chalmers Corp. v. Phila. Elec. Co., 521 F.2d 360, 364 (3d Cir.1975)). “Depending on the facts of the particular case, all or some of the above factors may bear upon the propriety of the trial court’s discretion in certifying a judgment as final under Rule 54(b).” Allis-Chalmers, 521 F.2d at 364. In this case, this Court deems the most pertinent factors to be the relationship between the claims, the possibility that appellate review will become moot, and the likelihood of success of the dismissed claims compared to the cost of immediate appeal.

III. Just Reason For Delay Assuming, arguendo, that the Order is a “final judgment,” this Court must also find that there is no just reason for delay in order to grant Plaintiffs’ motion. See Curtiss-Wright, 446 U.S. at 8.
In making its determination regarding “just reason for delay,” the district court should act as a ‘dispatcher.’ Id. (“It is left to the sound judicial discretion of the district court to determine the ‘appropriate time’ when each final decision in a multiple claims action is ready for appeal.”)

A. Relationship Between the Adjudicated and Unadjudicated Claims *3 Plaintiffs argue that there is no just reason for delay of the appeal based on the relationship between the RICO claims and the FLSA claims because the claims are separate and distinct. Plaintiffs correctly argue that the claims have different elements, provide for different procedures, and provide for different recoveries. (Pls.’ Br. 9.)
However, this Court finds that there are significant similarities between the factual circumstances underlying the recoveries sought under the FLSA claims and under
2

Zavala v. Wal-Mart Stores, Inc., Not Reported in F.Supp.2d (2007)

the RICO claims. First, the parties are the same-Plaintiffs and Wal-Mart. The Third Circuit has considered the presence of different parties (in the dismissed claims as compared to the remaining claims) as a significant factor supporting the immediate appealability of dismissed claims. See e.g., Genty v. Resolution Trust Corp., 937 F.2d 899 (3d Cir.1991) (holding a Rule 54(b) certification proper where “[a]lthough the plaintiffs in both phases of the lawsuit are the same, the defendants are entirely different parties, except for the Township which is a defendant in both phases”); Carter v. City of Philadelphia, 181 F.3d 339, 343 and 346 (3d Cir.1999) (holding a Rule 54(b) certification proper where the claims against one defendant had been dismissed, and the remaining claims did not affect that defendant).
Second, much of the same evidence which is required to prove the RICO claims will be necessary to set forth the FLSA claims. See Gerardi, 16 F.3d 1363 (reversing a Rule 54(b) certification where “the facts underlying the [certified] claim ... may be intertwined with the remaining issues”). For instance, Plaintiffs will have to show employment at a Wal-Mart store, their hours worked, and their wages paid.
While Plaintiffs’ argument regarding the differences in elements, procedures and recoveries is significant, it is not determinative at this stage of the analysis. If this Court were fully addressing “finality,” Plaintiffs’ argument would bear more weight. However, at this stage of the Rule 54(b) analysis, this Court must determine whether any of the factors set forth in Berckeley establish a “just reason for delay.” See Berckeley, 455 F.3d at 203.
This Court finds that the similarities in the factual underpinnings of both claims are sufficient to weigh this factor in favor of there being a just reason for delay. See Gerardi, 16 F .3d at 1372 n. 16 (“Rule 54(b) certification is more appropriate when a party joins completely unrelated claims as permitted by Fed.R.Civ.P. 18(a), and recovers a judgment on fewer than all the claims.”).
B. Possibility That Appellate Review Will Be Mooted By Future Developments Plaintiffs argue that the need for appellate review will not be mooted by future developments because the RICO claims and the FLSA claims depend on different legal elements. (Pls.’ Reply Br. 9). This Court disagrees.
In order to be successful in their prosecution of the FLSA and RICO claims, Plaintiffs must establish “joint employer” liability on the part of Wal-Mart and its contractors. If Plaintiff fails to establish that Wal-Mart and its contractors were joint employers, then the Plaintiffs will have no basis to recover damages from Wal-Mart under the RICO claims or the FLSA claims.

Thus, there is a possibility that the need for appellate review will be mooted. This possibility also suggests that there is just reason for delay.
C. Miscellaneous Considerations *4 The foremost reason for delay is that the costs, in time and judicial economy, of appeal greatly outweigh the prospect of a successful appeal. Additionally, this Court is permitted to take into account the “frivolity of competing claims.” This Court’s dismissal of the RICO Counts was not a “close call.” This Court dismissed Count One because 1) it failed to meet the distinctness requirement of 18 U.S.C. § 1962(c); 2) Plaintiffs failed to demonstrate that the predicate acts of immigration violations and money laundering proximately caused their injuries; and 3) Plaintiffs failed to state a claim of involuntary servitude. Count Two failed because it alleged conspiracy to commit the acts alleged, and dismissed, in Count One.
This Court’s determination as to distinctness is supported by Supreme Court precedent. See Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 (2001). Further, the proximate causation holding is based also on Supreme Court precedent, Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268 (1992), and “receives substantial support from the recent decision of the Supreme Court in Anza v. Ideal Steel Supply Corp., 126 S.Ct. 1991 (2006). Zavala, 447 F.Supp.2d at 386.
Further, as noted in the Order, Plaintiffs were given two opportunities to present their RICO claims, and still failed to state a claim. Zavala, 447 F.Supp.2d at 388 (holding that the claims should be dismissed with prejudice because “repleading is futile”). In light of the precedent supporting this Court’s dismissal of the RICO Counts, and further in light of the Plaintiffs’ two opportunities to set forth a claim upon which relief could have been granted, this Court estimates that Plaintiffs’ chances of success on appeal are minimal.
The cost, in both monetary resources and judicial resources, is high. This Court granted conditional certification of the FLSA claims for collective action. Permitting an appeal of this Court’s dismissal of the two RICO Counts causes delay for the unnamed, conditional plaintiffs, while benefitting only the named plaintiffs in their quest to sustain their RICO claims. Further, immediate appeal causes delay, and creates additional costs (in the form of two separate appeals), for Defendant, who has already fully briefed and argued the reasons for dismissal of the RICO claims twice.
Further, delaying the appeal until the resolution of the FLSA claims will present the Third Circuit with a fuller, more thorough record on which to analyze the appeal. A single appeal also avoids judicial waste in that two
3

Zavala v. Wal-Mart Stores, Inc., Not Reported in F.Supp.2d (2007)

separate Third Circuit panels will not have to familiarize themselves with the extensive record in the case.
Plaintiff’s prospect of a successful appeal, when viewed in the light of these costs in time and money to the parties, is significant and sufficient, on its own, to constitute a “just reason for delay” under Rule 54(b). At the very least, a combination of the three factors discussed above are sufficient to create a “just reason for delay,” particularly in light of the Third Circuit’s longstanding policy disfavoring piecemeal appeals. Sussex, 920 F.2d at 1153 (“Disfavoring piecemeal appeals is a longstanding policy of the federal courts.”).

CONCLUSION
*5 For the reasons stated above, this Court finds that Plaintiffs have failed to demonstrate that there is no just reason for delay in order to grant Plaintiffs’ motion. See Curtiss-Wright, 446 U.S. at 8. Thus, Plaintiffs’ motion for an order, pursuant to FED.R.CIV.P. 54(b), certifying this Order as a final judgment for immediate appeal is denied. Further, because Plaintiffs’ motion is denied, Plaintiffs’ request to stay discovery pending the appeal is denied as moot.
	  

4

 
 Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 1 of 11 PageID: 4480

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

____________________________________

:

VICTOR ZAVALA, EUNICE GOMEZ, :

ANTONIO FLORES, OCTAVIO

:

DENISIO, HIPOLITO PALACIOS,

:

CARLOS ALBERTO TELLO,

:

MAXIMILIANO MENDEZ, ARTURO :

ZAVALA, FILIPE CONDADO, LUIS :

GUTIERREZ, DANIEL ANTONIO

:

CRUS, PETR ZEDNEK, TERESA

:

JAROS, JURI PFAUSER, HANA

:

PFAUSEROVA, PAVEL KUNC and

:

MARTIN MACAK, on behalf of

:

themselves and all others similarly

:

situated,

:

:

Plaintiffs,

:

:

v.

:

:

WAL-MART STORES, INC.,

:

:

Defendant.

:

____________________________________:

Civil Action No. 03-5309 (JAG) OPINION

GREENAWAY, JR., U.S.D.J. This action involves a wage and hour dispute filed by plaintiffs Victor Zavala, Eunice
Zavala, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Filipe Condado, Luis Gutierrez, Daniel Antonio Crus, Petr Zednek, Teresa Jaros, Juri Pfauser, Hana Pfauserova, Pavel Kunc, and Martin Macak (collectively, the “Plaintiffs”) against defendant Wal-Mart Stores, Inc. (“Defendant”) under the Fair Labor Standards Act (the “FLSA”). The parties submitted briefs, for the purposes of settlement only,

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 2 of 11 PageID: 4481
addressing two narrowly-circumscribed sub-issues related to (1) the scope of the collective action, and (2) the proper method for calculating overtime wages allegedly owed to claimants. The parties have requested a judicial declaration from this Court settling the aforementioned legal questions.
I. DISCUSSION1 A. Scope of the Collective Action
The first question the parties ask this Court to resolve is whether the individuals who failed to submit responses to the FLSA questionnaire negotiated by the parties and ordered by this Court (the “Second Questionnaire”) should be excluded from the collective action.
A plaintiff may initiate an action alleging violation of the FLSA “against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b). “Section 216(b)'s affirmative permission for employees to proceed on behalf of those similarly situated must grant the court the requisite procedural authority to manage the process of joining multiple parties in a manner that is orderly, sensible, and not otherwise contrary to statutory commands or the provisions of the Federal Rules of Civil Procedure.” Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989) (applying § 216(b) to plaintiff’s ADEA claim, as incorporated by 29 U.S.C. § 626(b)). Courts are permitted, at their discretion, to intervene in the notice process for case management purposes. Id. at 171, 174.
“In the absence of guidance from the Supreme Court and the Third Circuit, district courts
1 Since Plaintiffs and Defendant are familiar with the operative facts of this case, this Court shall confine its discussion to the legal issues necessary for disposition, as well as those facts relevant to their resolution.
2

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 3 of 11 PageID: 4482
have developed a two-tiered test to determine whether FLSA claimants are ‘similarly situated’ for the purposes of § 216(b).” Id. At the first step, coined the conditional certification stage, courts conditionally grant certification for the purpose of notice and discovery only. Id. “[C]ourts employ a lenient standard when determining if a potential class is similarly situated and should be noticed, and do not impose the stricter standard to certify a class prior to trial.” Herring v. Hewitt Assoc., Inc., No. 06-267, 2007 WL 2121693, at *6 (D.N.J. July 24, 2007). This step is performed at the initial stage of the litigation process, when there exists minimal evidence for the court to examine. Bosley v. Chubb Corp., No. 04-4598, 2005 WL 1334565, at *2 (E.D. Pa. June 3, 2005).
At the final certification stage, after the completion of class-related discovery, “the [c]ourt makes a decision on final certification based upon a ‘specific factual analysis of each employee's claim to ensure that each claimant is an appropriate party. Plaintiffs bear the burden of showing they are similarly situated to the proposed class.’” Stillman v. Staples, Inc., No. 07-849, 2008 WL 1843998, at *3 n.15 (D.N.J. Apr. 22, 2008) (citing Bosley, 2005 WL 1334565, at *2; Herring, 2007 WL 2121693, at *3). The court, applying a stricter standard, should examine the full factual record against various factors, including the “disparate factual and employment settings of the individuals [sic] plaintiffs, the various defenses available to defendants, and fairness and procedural considerations.” Id. (citing Lusardi v. Xerox Corp., 118 F.R.D. 351, 359 (D.N.J. 1987)). Specifically, courts examine the employees’ duties, responsibilities, salary, and time spent performing administrative tasks. Id. “To succeed in obtaining final certification, the plaintiff must make a showing that the nature of the work performed by other claimants is at least similar to [their] own.” Id.
3

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 4 of 11 PageID: 4483
In an Order dated December 29, 2004, this Court granted conditional certification of this case as a collective action, pursuant to 29 U.S.C. § 216(b), for the purposes of notice and discovery. (Docket Entry No. 41.) During the discovery stage, Magistrate Judge Arleo issued an Order dated January 30, 2006 directing “Wal-Mart and plaintiffs [to] discuss and agree upon information to be provided for each named Plaintiff and all individuals who have filed Notices and Filing of Consent [p]ursuant to 29 U.S.C. § 216(b).” (Docket Entry No. 97.) After the parties agreed on the format and content of the Second Questionnaire, Magistrate Judge Arleo ordered, on April 4, 2007, that “Plaintiffs shall produce completed FLSA questionnaires for each claimant who intends to pursue claims.” (Docket Entry No. 153.) Magistrate Judge Arleo also stated, in an Order dated May 14, 2007, that fact discovery shall close on October 1, 2007. (Docket Entry No. 159.)
Going forward, Plaintiffs will seek final certification of this action. In the brief submitted for settlement purposes, Plaintiffs state that, of the 215 people who opted into this action,2 207 are similarly situated to the Plaintiffs because they “have provided enough information to indicate that they were contract janitors who worked at one or more Wal-Mart locations at some time between January 2000 and the present.” (Pl. Br. 3-4.) Although only 118 people submitted the Second Questionnaire, Plaintiff submits that this Court can also look to information provided by those who completed a different questionnaire available on Cohen Weiss’ website, which was created for the purpose of screening potential claimants for the case (the “Original
2 According to Plaintiff, 214 individuals executed consents to opt into this action, and one person opted into this action by appearing for a deposition.
4

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 5 of 11 PageID: 4484
Questionnaire”).3 (Pl. Br. 4; Def. Opp. Br. 2.) Defendant, however, has expressed its intention to file a motion to de-certify this case as
a collective action. Defendant supports this position in part by arguing argues that only 114 of the individuals who provided responses to the Second Questionnaire should be taken into consideration when determining which claimants are “similarly situated” to Plaintiffs, and that the remaining individuals who opted into this action should be dismissed from the case.4 (Def. Br. 1-2.)
To support this argument, Defendant emphasizes the Order by Magistrate Judge Arleo requiring Plaintiffs to “produce completed FLSA questionnaires for each claimant who intends to pursue claims[.]” (Order dated April 4, 2007.) Defendant notes that the Original Questionnaire “cannot substitute for the Court-ordered discovery that [P]laintiffs themselves requested,” that is, the Second Questionnaire, for three reasons. First, the Original Questionnaire was “unilaterally controlled by Plaintiffs’ counsel, calling into question the accuracy and veracity of any wage claims generated or transmitted by this medium.” (Def. Br. 6.) Indeed, this Court required Plaintiffs to include disclaimers on the Original Questionnaire indicating that the Court had not authorized or approved of the website. Second, the Original Questionnaire is “unsigned,
3 Plaintiff notes that “[a] number of claimants completed both questionnaires.” (Pl. Br. 4.)
4 Defendant also presents two arguments supporting dismissal of four of the 118 individuals that completed the Second Questionnaire. First, in an Order dated May 4, 2007, Magistrate Judge Arleo expressly excluded from this case one individual, Valeriy Kozlov, who later submitted the Second Questionnaire. (Docket Entry No. 158.) Second, Defendant states that the partial responses to the Second Questionnaire that were submitted by three individuals were first provided to Defendant in June of 2008, more than eight months after the close of discovery. (Id.)
5

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 6 of 11 PageID: 4485
unsworn, and unverified.”5 (Id.) Third, many of the Original Questionnaires contain content that is vague and/or conflicts with information provided by the same individuals in the Second Questionnaire. (Id. at 7.)
If considering the parties’ arguments on a motion to de-certify the class, pursuant to 29 U.S.C. § 216(b), this Court should not consider those individuals who only completed the Original Questionnaires. This would limit the potential claimants to the 114 individuals that completed the Second Questionnaire, whose responses were produced to Defendant by Plaintiffs in a timely fashion. Plaintiffs argue that striking the potential claimants from participating in this action would be an overly extreme punishment for their failure not to adhere to this Court’s order to complete the Second Questionnaire. However, in an Order dated April 4, 2007, Magistrate Judge Arleo directed Plaintiffs to “produce completed FLSA questionnaires for each claimant who intends to pursue claims[.]” (Docket Entry No. 153.) To permit potential claimants to pursue claims without completing the Second Questionnaire would be contrary to Magistrate Judge Arleo’s directive. The April 4, 2007 Order constitutes an exercise of this Court’s discretionary authority to “manage the process of joining multiple parties in a manner that is orderly, sensible, and not otherwise contrary to statutory commands or the provisions of the Federal Rules of Civil Procedure.” The potential claimants that did not comply with this Court’s case management orders, therefore, should not be permitted to join in this action.6
5 In their reply brief, Plaintiffs counter that the Second Questionnaire is also unverified, as it is not signed by a notary public. (Pl. Reply Br. 7.)
6 As Defendant aptly points out, FED. R. CIV. P. 16(f)(1)(C) provides that, “[o]n motion or on its own the court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii) -(vii), if a party or its attorney . . . fails to obey a scheduling or other pretrial order.” FED. R. CIV. P. 37(b)(2)(A)(v) states that, if a party “fails to obey an order to provide or
6

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 7 of 11 PageID: 4486
The incomplete information provided in a number of the Original Questionnaires only
further discredits the use of the Original Questionnaires to determine whether potential claimants
are in fact “similarly situated” to Plaintiffs. Many of the responses to the Original Questionnaires fail to include dates of employment, hours worked, wages earned, or the identity of the store.7
(Def. Br. 6.) A number of the Original Questionnaires include responses that were not translated
into English, despite Magistrate Judge Arleo’s Order requiring “core information” to be
translated into English. (See id. at 6; Order dated April 4, 2007.) Although Plaintiffs point out
that some of the Second Questionnaires likewise are incomplete and are untranslated, this
argument should not encourage this Court to look to the Original Questionnaires at the final
certification stage; to the contrary, it dissuades this Court from relying on those Second
Questionnaire responses that are incomplete and untranslated as well.
This Court cannot determine at this juncture in the litigation which potential claimants are
similarly situated to Plaintiffs without reviewing the responses to the Second Questionnaires, and
such material has not been provided in toto to this Court at this time. However, this Court should
permit discovery, . . . “ the court may issue a just order, including “dismissing the action or proceeding in whole or in part[.]”
7 For example, the Original Questionnaires do not clearly set forth whether the potential claimant worked at a Wal-Mart store or a Sam’s Club store; this information is integral to determining whether a potential claimant is “similarly situated” to Plaintiffs, as this Court ordered the exclusion of Sam’s Club employees from this action. (See Letter from David Murray to James Linsey dated May 29, 2008, attached as Ex. 16 to Def. Br.; Order dated Dec. 29, 2004.) Plaintiffs counters that this Court can assume from the responses to the Original Questionnaires that some of the potential claimants worked at Wal-Mart stores, rather than Sam’s Club stores, because the cities in which they claim to have worked do not have Sam’s Club stores. However, Plaintiffs cannot meet the stricter standard applied at the final certification stage by asking this Court to make assumptions regarding key information related to whether potential claimants are similarly situated.
7

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 8 of 11 PageID: 4487
not permit Plaintiff to insert claimants into this action based on information provided in a questionnaire that was not authorized by this Court. When determining which individuals should be included in this action, this Court shall look to the responses to the Second Questionnaire which were provided by the 114 individuals and produced to Defendant in a timely fashion. B. Calculation of Overtime Wages
The second question to be considered by this Court is the proper method for calculating the claimants’ “regular rate of pay,” pursuant to the FLSA and its applicable regulations.
The FLSA requires employers to provide overtime pay to all eligible employees who work more than forty hours in a workweek, at the rate of time and a half the employee’s regular hourly rate of pay. 29 U.S.C. § 207 (West, Westlaw through P.L. 110-320). “If the employee is employed solely on a weekly salary basis, his regular hourly rate of pay, on which time and a half must be paid, is computed by dividing the salary by the number of hours which the salary is intended to compensate.” 29 C.F.R. § 778.113 (West, Westlaw through September 4, 2008).
Plaintiffs’ calculation of the regular rate of pay assumes that the parties intended Plaintiffs to work a forty hour workweek. See Giles v. City of New York, 41 F. Supp. 2d 308, 317 (S.D.N.Y. 1999) (“There is a rebuttable presumption that a weekly salary covers 40 hours; the employer can rebut the presumption by showing an employer-employee agreement that the salary cover[s] a different number of hours.”); Chan v. Sung Yue Tung Corp., No. 03-6048, 2007 WL 313483, at *23 (S.D.N.Y. Feb. 1, 2007). If a claimant received $350 per week, and worked seven days a week, for eight hours a day, Plaintiff would calculate that claimant’s regular rate of pay as $350 divided by forty, which equals $8.75 per hour. According to Plaintiffs, that claimant’s overtime calculation for a 56-hour workweek would be as follows:
8

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 9 of 11 PageID: 4488
($8.75 * 40) + ($13.13 * 16) = $560.08. In contrast, Defendant uses the responses to the Second Questionnaires to determine the number of hours that each claimant was intended to work. For example, if a claimant stated on the Second Questionnaire that he received $350 in pay each week, and was expected to work seven days a week, for eight hours a day, then, according to Defendant, the parties intended that claimant to work fifty-six hours per week. His regular rate of pay, then, would amount to 350 divided by fifty-six, or $6.25 per hour. If that employee in fact worked 56 hours during a workweek, Defendant states, his overtime calculation would be as follows:
($6.25 * 40) + ($9.38 * 16) = $400.08. Defendant expressly states that it is not asking this Court to apply the fluctuating workweek method.8 (Def. Br. 12 n.3.) Presumably, then, if the aforementioned employee worked 60 hours during one work week, his overtime calculation, according to Defendant, would be as follows:
($6.25 x 40) + ($9.38 x 20) = $437.60. The key issue to resolve, therefore, is how to compute a claimant’s regular rate of pay. The answer to this question rests entirely on how to determine the number of hours that a claimant’s salary is intended to compensate. “[W]here the employee is paid solely on a weekly salary basis, the number of hours the employee's pay is intended to compensate-not necessarily the number of hours he actually works-is the divisor.” Rodriguez v. Farm Stores Grocery, Inc., 518 F.3d 1259, 1268-69 (11th Cir. 2008) (“If an employee is hired at a salary of $182.70 and if it
8 The fluctuating workweek method, enunciated in 29 C.F.R. 778.114, “applies only if there is “a clear mutual understanding of the parties” that the fixed salary is compensation for however many hours the employee may work in a particular week, rather than for a fixed number of hours per week.” Clements v. Serco, Inc., 530 F.3d 1224, 1230 (10th Cir. 2008).
9

Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 10 of 11 PageID: 4489
is understood that this salary is compensation for a regular workweek of thirty-five hours, the employee's regular rate of pay is $182.70 divided by thirty-five hours, or $5.22 an hour, and when he works overtime he is entitled to receive $5.22 for each of the first forty hours and $7.83 (one and one-half times $5.22) for each hour thereafter.”). “Importantly, the ‘number of hours which the salary is intended to compensate’ does not have to be forty hours; instead, this is a number that is determined by the parties' actual practice.” Sharpe v. Cureton, 319 F.3d 259 (6th Cir. 2003).
To determine the number of hours for which each claimant’s salary was intended to compensate, Plaintiffs urge this Court to assume that the parties intended the weekly salary to compensate a 40-hour workweek. In contrast, Defendants ask this Court to rely on the assertions made by the claimants in their respective responses to Second Questionnaire. Defendants believe if these responses are used, two conclusions will arise -- 1) there is no consensus among the purported class members regarding a workweek; and 2) the evidence would reflect anything but an agreed forty-hour workweek.
This Court declines to state conclusively whether it adopts or rejects the “rebuttable presumption” doctrine articulated by the District Courts for the Southern District of New York. It finds, however, that the evidence cited by Defendants in the Second Questionnaire is sufficient to rebut the “rebuttable presumption” that claimants worked a forty-hour workweek. Without setting forth evidence supporting this assertion, this Court shall not adopt Plaintiffs’ interpretation at this time. Unless Plaintiff can present evidence showing that the parties understood the weekly salary to cover only 40 hours, this Court will only consider the responses to the Second Questionnaire to determine the number of hours which the salary was intended to
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Case 2:03-cv-05309-GEB-MCA Document 191 Filed 09/26/08 Page 11 of 11 PageID: 4490

compensate. II. CONCLUSION
For the reasons set forth above, this Court finds that only those claimants who completed the Second Questionnaire may be taken into account when determining final certification of this action. With respect to the calculation of the claimants’ regular rate of pay, this Court concludes that the information provided on the Second Questionnaire rebuts the “rebuttable presumption” that an employee’s salary was intended to compensate for a forty-hour workweek. Plaintiff therefore may not rely solely on the rebuttable presumption, but instead must present evidence, at the appropriate time, supporting its assertion that the parties intended claimants to work forty hours per week.

Date: September 25, 2008

S/Joseph A. Greenaway, Jr. JOSEPH A. GREENAWAY, JR., U.S.D.J.

11

 
 NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

____________________________________

:

VICTOR ZAVALA, EUNICE GOMEZ, :

ANTONIO FLORES, OCTAVIO

:

DENISIO, HIPOLITO PALACIOS,

:

CARLOS ALBERTO TELLO,

:

MAXIMILIANO MENDEZ, ARTURO :

ZAVALA, FILIPE CONDADO, LUIS :

GUTIERREZ, DANIEL ANTONIO CRUS, :

PETR ZEDNEK,

:

TERESA JAROS, JURI PFAUSER, HANA :

PFAUSEROVA, PAVEL KUNC and

:

MARTIN MACAK, on behalf of

:

themselves and all others similarly situated, :

:

Plaintiffs,

:

:

v.

:

:

WAL–MART STORES, INC.,

:

:

Defendant.

:

____________________________________:

Civil Action No. 03-5309 (JAG) OPINION AMENDED

GREENAWAY, JR., U.S.D.J. This matter comes before this Court on the motion for Reconsideration by plaintiffs Victor
Zavala, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Filipe Condado, Luis Gutierrez, Daniel Antonio Crus, Petr Zednek, Teresa Jaros, Juri Pfauser, Hana Pfauserova, Pavel Kunc, and Martin Macak (collectively, the “Plaintiffs”). Plaintiffs seek Reconsideration of this Court’s Opinion (Docket Entry No. 191), dated September 25, 2008, in which this Court ruled in favor of defendant Wal-
1

mart Stores, Inc. (“Defendant”). In the Opinion this Court determined that for the purposes of this collective action only those claimants who completed the court-ordered questionnaire (“Second Questionnaire”) may be taken into account when determining final certification. In addition, Plaintiffs ask this Court to reconsider its determination that the information provided on the Second Questionnaire rebuts the “rebuttable presumption” that an employee’s salary was intended to compensate for a forty-hour work week. For the reasons set forth below, the motion for Reconsideration shall be denied.
I. BACKGROUND This action involves a wage and hour dispute filed by Plaintiffs against Defendant. Previously, the parties jointly requested that this Court rule on two legal questions pertaining to this conditional collective action. The first question was whether the individuals who failed to submit responses to the Fair Labor Standards Act (“FLSA”) questionnaire negotiated by the parties and ordered by this Court (the Second Questionnaire) should be excluded from the collective action. (Zavala et al. v. Wal-Mart Stores, Inc. at 2, Docket Entry No. 191.) The second question was what is the proper method for calculating the claimants’ “regular rate of pay,” pursuant to the FLSA and its applicable regulations. (Id. at 8.) In an Opinion dated September 25, 2008, this Court ruled in Defendant’s favor on both questions. Specifically, this Court determined that only those claimants who completed the Second Questionnaire may be taken into account when determining final certification of this action, and that for the purposes of calculating claimants’ regular rate of pay, the information provided on the Second Questionnaire rebuts the “rebuttable presumption” that the salary of these employees was intended to compensate for a forty-hour work week.
2

Plaintiffs filed this motion for Reconsideration asserting that this Court’s ruling substantially ignores or misinterprets operative facts and law.
II. LEGAL STANDARD A motion to reconsider, pursuant to FED. R. CIV. P. 59(e) and L. CIV. R. 7.1(i), is “an extremely limited procedural vehicle,” and requests pursuant to these rules are to be granted “sparingly.” P. Schoenfeld Asset Mgmt. LLC v. Cendant Corp., 161 F. Supp. 2d 349, 353 (D.N.J. 1992) (citing Maldonado v. Lucca, 636 F. Supp. 621, 630 (D.N.J. 1986)). The Third Circuit has held that the purpose of a motion to reconsider is to “correct manifest errors of law or fact or to present newly discovered evidence.” Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985), cert. denied, 476 U.S. 1171 (1986). A court may grant a motion to reconsider only if the moving party shows either: (1) an intervening change in the controlling law; (2) the existence of new evidence that was not available when the court issued its order; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice. See N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995). To satisfy its burden, the moving party must show “dispositive factual matters or controlling decisions of law” that were brought to the court’s attention but not considered. P. Schoenfeld Asset Mgmt. LLC, 161 F. Supp. 2d at 353; see also Pelham v. United States, 661 F. Supp. 1063, 1065 (D.N.J. 1987). “The motion may not be used to re-litigate old matters or argue new matters that could have been raised before the original decision was reached.” P. Schoenfeld Asset Mgmt., L.L.C., 161 F. Supp. 2d at 352. “A party seeking reconsideration must show more than a disagreement with the Court’s decision, and ‘recapitulation of the cases and argument considered by the court before rendering its original decision fails to carry the moving party’s
3

burden.’” Id. (quoting G-69 v. Degnan, 748 F. Supp. 274, 275 (D.N.J. 1990) (internal citations omitted)).
The “proper ground for granting a motion to reconsider, therefore, is that the matters or decisions overlooked, if considered by the court, ‘might reasonably have altered the result reached.’” G-69, 748 F. Supp. at 275 (quoting New York Guardian Mortgagee Corp. v. Cleland, 473 F. Supp. 409, 420 (S.D.N.Y. 1979)).
III. ANALYSIS I. Exclusion of Certain Individuals From Recovery As the basis for this motion for Reconsideration, Plaintiffs argue that this Court ignored or misinterpreted operative facts and law in rendering its Opinion of September 25, 2008. See N. River Ins. Co., 52 F.3d at 1218, in which the Third Circuit held that the need to correct a clear error of law or fact is grounds for a motion for reconsideration under Rule 59(e).1 Plaintiffs argue that Defendant was bound to the recordkeeping requirements of the FLSA, but failed to preserve employment records pertaining to the time worked by janitors who now assert FLSA claims. Plaintiffs state the only reason the Second Questionnaire was needed was to provide core information concerning the janitors’ FLSA claims that the Defendant failed to maintain adequate employment records, as required by law. Plaintiffs cite to Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) for the proposition that a party is estopped from failing to preserve employment records, as required by law, and then rely on the absence of those records to defeat a FLSA claim. Plaintiffs’ statement of the law is summed up by the following passage from the
1 Plaintiffs do not argue, as the basis of this motion for reconsideration, that there has been a change in the controlling law or that there is new evidence that was not available when this Court issued its Opinion.
4

Supreme Court’s opinion in Anderson:
The solution, however, is not to penalize the employee by denying him any recovery on the ground that he is unable to prove the precise extent of uncompensated work. Such a result would place a premium on an employer’s failure to keep proper records in conformity with his statutory duty; it would allow the employer to keep the benefits of an employee’s labors without paying due compensation as contemplated by the Fair Labor Standards Act. In such a situation we hold that an employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee’s evidence. Id. at 687-88.
Plaintiffs also advance the argument that where an employer fails to maintain records, an
employee suing for uncompensated wages has a low burden in showing that overtime is due. See
Reich v. Gateway Press, Inc., 13 F.3d 685, 701 (3d Cir. 1994). Plaintiffs assert that the employees
have met their burden in showing that they are entitled to back wages. Plaintiffs ask this Court to
consider that once the claimants have met their burden of persuasion, the burden shifts to
Defendant to provide evidence of the amount of work performed or to rebut the evidence offered
by Plaintiffs. Plaintiffs argue that Defendant has failed to rebut the evidence offered by
employees in support of their contention that they are entitled to back wages.
Plaintiffs also contend that previous declarations, sworn by individuals who have been
excluded from this litigation for their failure to submit the Second Questionnaire, should be
treated as legal substitutes for the Second Questionnaire because the declarations include
substantially the same information as required by the Second Questionnaire. Plaintiffs point
specifically to seven declarants (Daniel Antonio Cruz, Antonio Flores, Martin Macak, Ervin
Macak, Maximino Mendez, Ernesto San Juan Alfonso, and Stanislav Skubal) who have been
5

barred from any recovery for their failure to submit the Second Questionnaire. Plaintiffs also ask this Court to reconsider its decision to exclude individuals who
provided a Second Questionnaire after October 1, 2007–the date agreed upon by the parties and stipulated as the deadline by Judge Arleo. Plaintiffs enumerate several individuals who they acknowledge failed to submit the Second Questionnaire by the agreed upon deadline and were thus barred from recovery in this action. This group of individuals includes: Steve Valentine, Juan Miguel Cantu, Harold Davis II, and Ryszard Stefanski–who submitted the Second Questionnaire on June 8, 2008. Plaintiff argues that although those individuals submitted late questionnaires, they should not be barred from this action because the Defendant is not in any way prejudiced by the late submissions.
In addition, Plaintiffs argue that 75 individuals who completed similar questionnaires, although not the Second Questionnaire, should not be barred from this action. The crux of Plaintiffs’ argument on this score is that the questionnaires these individuals submitted contain substantially similar information. Plaintiffs argue that contrary to the facts articulated in this Court’s September 25, 2008 Opinion, the original questionnaires submitted by these individuals were not (1) unilaterally controlled by the Plaintiffs’ counsel; (2) were not unsigned, unsworn, and unverified; and (3) did not contain vague and/or contradictory information.
Plaintiffs advance here many of the same arguments this Court considered before it issued its decision in the September 25, 2008 Opinion. “A party seeking reconsideration must show more than a disagreement with the Court’s decision, and ‘recapitulation of the cases and argument considered by the court before rendering its original decision fails to carry the moving party’s burden.’” P. Schoenfeld Asset Mgmt., L.L.C., 161 F. Supp. 2d at 352. Plaintiffs have not offered
6

new legal precedent that would change this Court’s view of the issues in this case. Defendant argues that this Court ordered the parties to confer and agree on a questionnaire
to obtain the core information necessary to determine whether claimants are similarly situated and thus entitled to collective treatment of their alleged wage claims. Defendant notes that this Court ordered–and Plaintiffs agreed to–the use of the Second Questionnaire in order to streamline the discovery process. Plaintiffs were also given more than two years to obtain and to produce the required responses to the questionnaire. Defendant argues that Plaintiffs cannot now assert that the Second Questionnaire is unfair or that Defendant would benefit from its alleged failure to maintain employment records when Plaintiffs understood when they agreed to the use of the Second Questionnaire that Defendant would not make records of employees’ hours worked available.
At the final certification stage, after the completion of class-related discovery, “the [c]ourt makes a decision on final certification based upon a ‘specific factual analysis of each employee’s claim to ensure that each claimant is an appropriate party. Plaintiffs bear the burden of showing they are similarly situated to the proposed class.’” Stillman v. Staples, Inc., No. 07-849, 2008 WL 1843998, at *3 n.15 (D.N.J. Apr. 22, 2008) (citing Bosley v. Chubb Group, No. 04-4598, 2005 WL 1334565, at *2; Herring v. Hewitt Assoc., Inc., No. 06-267, 2007 WL 2121693, at *3). The court, applying a stricter standard, should examine the full factual record against various factors, including the “disparate factual and employment settings of the individuals [sic] plaintiffs, the various defenses available to defendants, and fairness and procedural considerations.” Id. (citing Lusardi v. Xerox Corp., 118 F.R.D. 351, 359 (D.N.J. 1987)). Specifically, courts examine the employees’ duties, responsibilities, salary, and time spent performing administrative tasks. Id.
7

“To succeed in obtaining final certification, the plaintiff must make a showing that the nature of the work performed by other claimants is at least similar to [their] own.” Id.
The Second Questionnaire is the vehicle by which both parties have agreed that this Court is to determine which potential claimants are similarly situated for the purposes of this action. Plaintiff cannot, after agreeing to the use of the Second Questionnaire, now assert that the use of the Second Questionnaire is a violation of the FLSA.
This Court notes that in an Order dated April 4, 2007, Magistrate Judge Arleo directed Plaintiffs to “produce completed FLSA questionnaires for each claimant who intends to pursue claims[.]” (Docket Entry No. 153.) As stated in the Opinion of September 25, 2008, were this Court to permit potential claimants to pursue claims without completing the Second Questionnaire it would be contrary to Magistrate Judge Arleo’s directive. The April 4, 2007 Order constitutes an exercise of this Court’s discretionary authority to “manage the process of joining multiple parties in a manner that is orderly, sensible, and not otherwise contrary to statutory commands or the provisions of the Federal Rules of Civil Procedure.” FED. R. CIV. P. 16(f)(1)(C) provides that, “[o]n motion or on its own the court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii) -(vii), if a party or its attorney . . . fails to obey a scheduling or other pretrial order.” Fed. R. Civ. P. 37(b)(2)(A)(v) states that, if a party “fails to obey an order to provide or permit discovery, . . . “the court may issue a just order, including “dismissing the action or proceeding in whole or in part[.]” The decision to exclude those individuals who did not comply with Judge Arleo’s directive is an exercise of this Court’s discretion.
Since no new issues of law or fact have been presented to this Court to necessitate a
8

change, this Court declines to change its decision contained in the Opinion of September 25, 2008 regarding which individuals are to be excluded from pursuing class claims in this action.
II. Calculating Overtime Wages Plaintiffs misstate this Court’s ruling in the September 25, 2008 Opinion concerning the rebuttable presumption that employee salaries are intended to compensate for a 40 hour workweek. As noted in the Opinion this Court declines to state conclusively whether it adopts or rejects the “rebuttable presumption” doctrine articulated by the District Courts of the Southern District of New York (Zavala et al. v. Wal-Mart Stores, Inc. at 10, Docket Entry No. 191.) This Court is not bound by the precedents of the Southern District of New York and declines to adopt the rebuttable presumption doctrine at this time. The Opinion provides that Plaintiffs still have an opportunity to present evidence showing that the parties understood the weekly salary to cover only 40 hours. Until such additional evidence is produced, however, this Court will rely on the responses to the Second Questionnaire and will draw any reasonable inferences that can be drawn from the information contained therein in order to determine the number of hours the salary was intended to compensate. While the Second Questionnaire may not have addressed directly the number of hours the salary was intended to compensate, certain inferences can be drawn from the responses to the Second Questionnaire. As stated in the September 25, 2008 opinion, this Court finds that the evidence provided by the respondents to the Second Questionnaire is sufficient to rebut a presumption that there was an understanding between Defendant and the Plaintiffs that employee salaries were based on a forty hour work week.
9

IV. CONCLUSION For the reasons stated above, Plaintiffs’ motion for reconsideration of this Court’s September 25, 2008 Opinion is denied.

Date: June 9, 2009

S/Joseph A. Greenaway, Jr. JOSEPH A. GREENAWAY, JR., U.S.D.J.

10

 
 NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

:

VICTOR ZAVALA, EUNICE GOMEZ, :

ANTONIO FLORES, OCTAVIO

:

DENISIO, HIPOLITO PALACIOS,

:

CARLOS ALBERTO TELLO,

:

MAXIMILIANO MENDEZ, ARTURO :

ZAVALA, FILIPE CONDADO, LUIS :

GUTIERREZ, DANIEL ANTONIO CRUS, :

PETR ZEDNEK, TERESA JAROS, JURI :

PFAUSER, HANA PFAUSEROVA,

:

PAVEL KUNC, and MARTIN MACAK, :

on behalf of themselves and others

:

similarly situated,

:

:

Plaintiffs,

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:

v.

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WAL-MART STORES, INC.,

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:

Defendant.

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Civ. No. 03-5309 (GEB) MEMORANDUM OPINION

BROWN, Chief Judge

This matter comes before the Court upon the motion of plaintiffs Teresa Jaros and Petr

Zednik (“plaintiffs”) for an adjournment of the trial date and/or to allow trial testimony by video

transmission. (Doc. No. 223.) Defendant Wal-Mart Stores, Inc. (“Defendant”) opposes

plaintiffs’ motion. The Court has decided this matter without oral argument pursuant to Federal

Rule of Civil Procedure 78. For the reasons that follow, plaintiffs’ motion will be granted in part

and denied in part.

I. BACKGROUND

In light of the trial date of November 29, 2010, on October 7, 2010, Magistrate Judge

Madeline Cox Arleo entered an Order To Show Cause why the second amended complaint of plaintiffs should not be involuntarily dismissed, due to their immigration status and resulting inability to appear for trial, pursuant to Federal Rule of Civil Procedure 41(b), and based on the factors enunciated by the Third Circuit in Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863 (3d Cir. 1984). See Adegbuji v. Middlesex County, 347 F. App’x 877 (3d Cir. Oct. 9, 2009). On October 21, 2010, plaintiffs filed a responsive submission and the instant motion, seeking an adjournment of the trial and/or to allow testimony by video transmission. On November 1, 2010, defendant filed its opposition.
This action involves a wage and hour dispute filed by plaintiffs under the Fair Labor Standard Act (“FLSA”), 29 U.S.C. §216(b) . On December 29, 2004, then District and now Circuit Judge, Joseph A Greenaway, Jr., conditionally certified this action as a collective action under the FLSA. By Opinion and Order dated June 25, 2010, this Court denied plaintiffs’ motion for class certification and granted defendant’s cross-motion for decertification.
Thereafter, the parties engaged in a settlement conference before Magistrate Judge Madeline Cox Arleo. Except for plaintiffs Petr Zednik and Teresa Jaros, all remaining plaintiffs either settled or abandoned their claims. Mr. Zednik, a national of the Czeck Republic, currently resides in Amsterdam, the Netherlands. Ms. Jaros, a Polish national, currently resides in Poland (Linsey Dec., Ex. A at 4) Presently neither is permitted to re-enter this country and appear for trial. Id. II. DISCUSSION
In response to the Order To Show Cause, plaintiffs seek an adjournment of the trial date
2

to allow the plaintiffs to obtain a visa and/or humanitarian parole1 to reenter the United States for trial. Mr. Zednik was unlawfully in the United States for one year and was ordered removed from the United States “on or about October 30, 2007.”2 Id. Ms. Jaros also left the United States and is not eligible for re-entry. Id. Both plaintiffs have requested an expedited consideration of their applications. They do not indicate how long they anticipate the processing of their respective applications will take.
Defendant opposes any postponement of the trial date and seeks dismissal of plaintiffs’ claims pursuant to Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863 (3d Cir. 1984), primarily due to their inability to appear for trial and the prejudice defendant would suffer from any further delay.
In Adegbuji v. Middlesex County, 347 F App’x 877, 2009 WL 3236044 (3d Cir. 2009), the Third Circuit affirmed the dismissal of a civil rights case pursuant to Poulis under similar circumstances. Plaintiff there was deported to Nigeria and was unable to appear for trial. The district court granted the plaintiff’s request to adjourn the trial date for ninety (90) days in order to seek permission to re-enter the United States. Although the plaintiff’s application was still pending when the second trial date approached, the Court dismissed his claims, allowing him a six-month window during which he could move to reopen the proceedings should he receive permission to reenter.
1 Plaintiffs also seek an adjournment of the trial so that the Court can rule on the pending summary judgment motion. Notably, although their case has been pending for seven years, plaintiffs did not file their summary judgment motion until October 20, 2010, after the Order to Show Cause was entered and a trial date set.
2 Despite the fact that neither plaintiff believes he or she would be granted a visitor visa, they both “plan” to apply for such visa. (Linsey Dec., Ex. A at 4 n.3)
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On appeal, the Third Circuit noted that all six Poulis factors were not met. Nonetheless, given “the protracted proceedings which [had] transpired below, the numerous opportunities the district court provided Appellant to obtain permission to re-enter the United States, the length of time which has transpired since the Appellants’ Complaint was filed and the district court’s assessment of the prejudice to Appellees and the lack of alternative sanctions,” the Third Circuit affirmed the dismissal.
As in Adegbuji, it appears that many of the Poulis factors are present here. There is potential prejudice to defendant if the trial is delayed any further. The claims have been pending for more than seven years and involve working conditions at Wal-Mart stores in 2002 and 2003. As conceded by plaintiffs in their recently filed summary judgment motion, memories have faded with time: “[plaintiffs] believe that they [were given certain Wal-Mart items in 2002 and 2003], though they cannot be certain after all this time.” (Doc. No. 222). Moreover, it appears that plaintiffs are personally responsible for the delay. While their deportation occurred over three years ago, they made no efforts to gain re-entry into the United States until two weeks ago, after a trial date was set. In addition, since the issue is plaintiffs’ appearance at trial, no less restrictive sanctions would be appropriate. III. CONCLUSION
Out of an abundance of caution, and guided by Adegbuji, the Court will grant plaintiffs’ request to adjourn the trial for ninety (90) days to allow plaintiffs an opportunity to obtain permission to re-enter the United States to appear for trial. The Order to Show Cause is carried until February 8, 2011. Plaintiffs shall file any written submissions regarding the status of their applications to obtain re-entry into the United States by January 24, 2011; any responsive papers
4

shall be filed by February 1, 2011. Since the Court has provided plaintiffs with additional time to obtain re-entry, it does not reach, at this time, whether participation at trial by video conference is appropriate. Dated: November 8, 2010
/s/ Garrett E. Brown, Jr. GARRETT E. BROWN, JR., U.S.D.J.
5

 
 NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

VICTOR ZAVALA, ET AL., Plaintiffs,
v. WAL-MART STORES, INC.,
Defendant.

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:

:

:

:

Civ. No. 03-5309 (GEB)

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:

MEMORANDUM OPINION

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:

:

:

BROWN, Chief Judge

This matter comes before the Court upon the motion for summary judgment and for

partial summary judgment filed by Plaintiffs Teresa Janos (“Janos”) and Petr Zednik (“Zednik”)

(collectively “Plaintiffs”) on October 20, 2010. (Doc. No. 222) Defendant Wal-Mart Stores, Inc.

(“Wal-Mart”) opposes Plaintiffs’ present motion. (Doc. No. 228) The Court has considered the

parties’ submissions and decided this matter without oral argument pursuant to Federal Rule of

Civil Procedure 78. Having done so, Plaintiffs’ motion will be denied for the reasons that

follow.

I. BACKGROUND

Plaintiffs’ present motion was filed without leave after nearly seven years of complex

litigation, three years after the close of discovery, and approximately six weeks before this case’s

then-scheduled trial date of November 29, 2010. As the Court writes only for the parties, who

are familiar with this case’s lengthy procedural history and detailed factual background, the

Court will here summarize only that information relevant to the Court’s decision in the present

matter. Distilled to fundamentals, Plaintiffs allege that they were employed by a variety of third-
party corporations that contracted with Wal-Mart to provide overnight cleaning services at various Wal-Mart stores across the United States. Plaintiffs further allege that the third-party entities for which they worked were merely “shell” corporations whose actual purpose was to provide frequently undocumented and underpaid personnel to clean Wal-Mart’s stores afterhours. Plaintiffs further allege that at times, they were confined in the Wal-Mart stores they were assigned to clean. Based upon these allegations, Plaintiffs assert that Wal-Mart was their “employer” pursuant to the terms of 29 U.S.C. Sections 201-219, the Fair Labor Standards Act (“FLSA”), and that Wal-Mart’s actions violated certain FLSA provisions. Additionally, Plaintiffs allege that their confinement in various Wal-Mart stores amounts to the common law tort of false imprisonment.
In their present motion, Plaintiffs seek summary judgment on their FLSA claims and seek partial summary judgment regarding Wal-Mart’s liability to Plaintiffs for tortuous false imprisonment. Wal-Mart opposes Plaintiffs’ present motion on two grounds: (1) that Plaintiffs’ motion is procedurally improper; and (2) that various disputed material facts preclude summary judgment on any of Plaintiffs’ claims. Having considered the parties’ submissions, the Court agrees with both of Wal-Mart’s arguments and will deny Plaintiffs’ present motion. II. DISCUSSION
A. Legal Standard A party seeking summary judgment must “show that . . . [it] is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(c). The threshold inquiry is whether there are “any genuine
2

factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (noting that no issue for trial exists unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict in its favor). The moving party carries the burden of showing “the absence of evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In countering a motion for summary judgment, the nonmoving party has the burden of “showing that there is a genuine issue for trial.” FED. R. CIV. P. 56(e)(2). The nonmoving party “may not rely merely on allegations or denials” but must present “specific facts.” Id.; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (“[nonmoving party] must do more than simply show that there is some metaphysical doubt as to the material facts”). In deciding whether triable issues of fact exist, the court must view the underlying facts and draw all reasonable inferences in favor of the nonmoving party. Id. at 587; Pa. Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995).
B. Application 1. Plaintiffs’ FLSA Claims
In support of Plaintiffs’ present motion for summary judgment on their FLSA claims, Plaintiffs argue that there is no reasonable dispute as to: (1) Wal-Mart’s status as Plaintiffs “employer” for purposes of the FLSA; (2) that Wal-Mart’s alleged violations of the FLSA were “willful”; (3) that Wal-Mart did not pay Plaintiffs overtime; and (4) Plaintiffs’ damages arising from Wal-Mart’s alleged FLSA violations. Wal-Mart opposes each of Plaintiffs’ foregoing contentions, and in doing so, presents not only its own evidence, but also highlights various statements made by Plaintiffs in their depositions, as well as other contrary evidence submitted
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by Plaintiffs. When this evidence is considered in light of the applicable summary judgment standard, the Court must conclude that material issues of fact exist as to each of Plaintiffs’ foregoing contentions. Plainly, the billing records submitted by Wal-Mart raise genuine issues of fact as to: (1) Wal-Mart’s status as “employer” pursuant to the FLSA; (2) that Wal-Mart’s alleged violations of the FLSA were “willful”; and (3) that Wal-Mart did not pay Plaintiffs overtime. Axiomatically, then, the existence or quantum of any damages under the FLSA is also in dispute. Further, the Court notes the various inconsistent statements made by Plaintiffs in their depositions which, viewed in the light most favorable to Wal-Mart, cast doubt upon the viability of Plaintiffs’ FSLA claims. As a result, Plaintiffs’ motion for summary judgment on their FLSA claims will be denied.
2. Plaintiffs’ False Imprisonment Claims Plaintiffs seek partial summary judgment as to Wal-Mart’s liablity for the tort of false imprisonment. The Court concludes that robust discussion of this aspect of Plaintiffs’ motion is not warranted. Simply put, as Wal-Mart forcefully argues in its opposition brief, various disputed or undisputed facts viewed in the light most favorable to Wal-Mart militate the Court’s conclusion that reasonable finders of fact could decide the issue of Wal-Mart’s liability for false imprisonment differently. A sampling of the more relevant disputed or undisputed facts include: (1) Plaintiffs’ repeated return to the stores where they were allegedly confined; (2) Wal-Mart’s non-denial of access to emergency exits to Plaintiffs; and (3) no clear instance of actual or threatened physical force by Wal-Mart. As such, Plaintiffs’ motion for partial summary judgment as to their false imprisonment claim will be denied.
3. Defendant’s Procedural Argument
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In its opposition brief, Wal-Mart also argues that Plaintiffs’ motion should be denied because it is procedurally improper. The Court agrees. As noted, Plaintiffs’ present motion was filed approximately three years after the close of fact discovery in this case, and six weeks prior to this case’s then-scheduled trial date. As Wal-Mart identifies, FED. R. CIV. P. 56(c)(1)(A) states that “a party may move for summary judgment at any time until 30 days after the close of all discovery”. (Emphasis added). Therefore, based on the plain language of this rule, Plaintiffs’ present motion is untimely by a matter of years. In their reply brief, Plaintiffs utterly fail to mitigate this clear procedural breach by arguing that the 2009 amendments to FED. R. CIV. P. 56 were not in effect when discovery closed in this case. Undisputably, however, the 2009 amendments were in effect on October 20, 2010, when Plaintiffs’ filed their present motion. Therefore, at a minimum, Plaintiffs should have sought leave from the Court before filing the present motion. Plaintiffs’ failure to do so in this case, in light of the duration of time between the close of discovery, the filing of this motion, and the then-pending trial date, compels the Court’s decision to deny Plaintiffs’ motion as untimely pursuant to FED. R. CIV. P. 56(c)(1)(A). III. CONCLUSION
For the foregoing reasons, Plaintiffs’ present motion for summary judgment will be DENIED. An appropriate form of order accompanies this memorandum opinion. Dated: November 30, 2010
/s/ Garrett E. Brown, Jr. GARRETT E. BROWN, JR., U.S.D.J.
5

 
 NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

__________________________________________

)

VICTOR ZAVALA, ET AL.,

)

)

Plaintiffs,

)

)

v.

)

Civil Action No. 03-5309 (GEB)

)

WAL-MART STORES, INC.,

) MEMORANDUM OPINION

)

Defendant.

)

__________________________________________)

BROWN, Chief Judge

This matter comes before the Court upon the motion for judgment on the pleadings, or in

the alternative, for partial summary judgment filed by Defendant Wal-Mart (“Wal-Mart”). (Doc.

No. 246) Plaintiffs Petr Zednik and Teresa Janos (“Plaintiffs”) oppose Wal-Mart’s present

motion. (Doc. No. 247) The Court has considered the parties’ submissions and decided this

motion without oral argument pursuant to Federal Rule of Civil Procedure 78. For the following

reasons, the Court will grant Wal-Mart summary judgment on Plaintiffs’ false imprisonment

claims.

I. BACKGROUND

Wal-Mart’s present motion was filed after nearly eight years of complex litigation. As

the Court writes only for the parties, who are familiar with this case’s lengthy procedural history

and factual background, the Court will summarize only that information relevant to the Court’s

resolution of the present matter. Because the Court will address the merits of Wal-Mart’s request

1

for partial summary judgment, in discussing the following relevant facts, the Court will draw all reasonable inferences in favor of Plaintiffs, the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Plaintiffs allege that they worked as part of overnight cleaning crews at Wal-Mart stores in Monroe, Georgia, and Bristol, Connecticut, in 2002 and 2003. (Def’s L. Civ. R. 56 1 Statement “Def’s Statement”) ¶ 1; Pl.’s L. Civ. R. 56 1 Resp. (“Pls.’ Statement” ¶ 1.) Plaintiffs further allege that Wal-Mart managers locked the storefront doors during Plaintiffs’ overnight shifts. It appears undisputed that the stores in question were closed to the public overnight. Based upon these allegations, Plaintiffs assert that their confinement in the Monroe and Bristol stores constitutes the common law tort of false imprisonment. (Def’s Statement ¶¶ 9-10; Pls.’ Statement ¶¶ 9-10).
Wal-Mart asserts that managers lock the storefront doors overnight to “to provide security for personnel and the merchandise in the facility.” (Def.’s 56(1) Statement ¶ 5; Wright Supp. Decl. ¶ 2; McDaris Supp. Decl. ¶ 2.) It appears undisputed that both stores contain several emergency exits through which personnel can exit safely if the front doors are locked. (Def.’s Br. at 12). Further, it appears both undisputed and indisputable that these emergency exits are required by law to be “clearly marked, easily accessible, and unobstructed.” (Def.’s Br. at 13); see 29 C.F.R. § 1910.36. Indeed, Wal-Mart asserts that there are four emergency exits at the Monroe store, and fifteen emergency exits at the Bristol store. Plaintiffs have produced no evidence that effectively rebuts the existence of these exits, or that they were at any time in violation of the applicable regulations. As such, Plaintiffs have produced no evidence that indicates these exits were unmarked, inaccessible, or obstructed. (Def.’s 56(1) Statement ¶ 12-
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13.) In their present motion, Wal-Mart seeks judgment on the pleadings and alternatively,
requests leave under FED. R. CIV. P. 6(b) to seek partial summary regarding Wal-Mart’s liability to Plaintiffs for false imprisonment pursuant to FED. R. CIV. P. 56(a). Plaintiffs oppose WalMart’s motion on the ground that various disputed material facts preclude summary judgment on the false imprisonment claim. Having considered the parties’ submissions, the Court will grant Wal-Mart partial summary judgment on Plaintiffs’ false imprisonment claims.
II. DISCUSSION A. Summary Judgment is Procedurally Appropriate Wal-Mart has filed this motion pursuant to both Fed. R. Civ. P. 12 and 56. The Court
expresses no opinion regarding the sufficiency of Plaintiffs’ pleadings under the recently evolved Rule 12 pleading standards. Instead, the Court will assume arguendo that Plaintiffs’ claims are sufficiently plead, and consider Wal-Mart’s motion as one for partial summary judgment. To that end, the Court concludes that Wal-Mart has shown adequate grounds for “excusable neglect” pursuant to the analysis established in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993). Namely, there clearly is no prejudice to Plaintiffs, who have had nearly a decade to prepare their case, and the Court concludes that this motion would have been wasteful if filed sooner by Wal-Mart, because: (1) class-certification issues were pending; (2) settlement negotiations were ongoing (and were ultimately successful as to all but these Plaintiffs); and (3) until shortly before this motion was filed, Plaintiffs’ claims were potentially subject to dismissal pursuant to an order to show cause issued by the Court. As such, Wal-Mart’s motion for partial
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summary judgment will be considered. B. Legal Standard A party seeking summary judgment must “show that there is no genuine dispute as to any
material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The threshold inquiry is whether there are “any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (noting that no issue for trial exists unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict in its favor). The moving party carries the burden of showing “the absence of evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In countering a motion for summary judgment, the nonmoving party must support its opposition by “citing to particular parts of materials in the record” or “show that the materials cited to not establish the absence . . . of a genuine dispute . . . .” Fed. R. Civ. P. 56(c)(1); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (“[nonmoving party] must do more than simply show that there is some metaphysical doubt as to the material facts”). In deciding whether triable issues of fact exist, the court must view the underlying facts and draw all reasonable inferences in favor of the nonmoving party. Id. at 587; Pa. Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995).
C. Application The gravamen of Plaintiffs’ allegations is that Wal-Mart managers falsely imprisoned Plaintiffs during their overnight cleaning shifts by locking the storefront doors. To prevail upon a claim for false imprisonment, a plaintiff must show that the defendant’s alleged acts
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“constrained” plaintiff’s “freedom of movement . . . by force or by threats of force communicated through conduct or words.” See Maietta v. United Parcel Serv., Inc., 749 F. Supp. 1344, 136667 (D.N.J. 1990), aff’d, 932 F.2d 960 (3d Cir. 1991) (quoting Earl v. Winne, 14 N.J. 119, 101 A.2d 535 (1953)) (explaining that constraint of the person is the essential element of a false imprisonment claim). However, this Court determined that the use of force to constrain movement does not give rise to an actionable false imprisonment claim “if there is a safe avenue of escape through an exit.” Zavala v Wal-Mart Stores, Inc. (Zavala I), 393 F. Supp.2d 295, 334 (D.N.J. 2005) (Greenaway, J.) (quoting Earl, 101 A.2d at 539); see RESTATEMENT (SECOND) OF TORTS § 36 (1965) (stating that an exit provides a reasonable means of escape even if an alarm sounds upon exiting). To the extent that the allegations are based on “threats of force communicated through conduct or words,” this Court in Zavala I acknowledged that such threats may “as effectively restrain[] and deprive[] of liberty as by prison bars.” Zavala I, 393 F.Supp.2d at 539. However, neither “moral pressure” nor threat to a person’s job is “sufficiently adequate to constitute an actionable constraint by threat of force.” Id. at 334.
Wal-Mart asserts that there is no genuine issue of material fact as to Wal-Mart’s nonliability for the tort of false imprisonment, and therefore Wal-Mart is entitled to judgment as a matter of law. Wal-Mart concedes that for security reasons, the front doors of each store were locked during non-business hours. However, Wal-Mart asserts that Plaintiffs’ claim for false imprisonment based on these locked front doors must fail as a matter of law because: (1) the record establishes that Plaintiffs have not and cannot show any instance of actual or threatened force by Wal-Mart; (2) Plaintiffs have not and cannot deny the existence of or access to emergency exits, and (3) the record refutes Plaintiffs’ allegations that they were held against their
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will because they returned to work on a daily basis. (Def.’s Br. at 12). Plaintiffs’ arguments to the contrary are insufficient to defeat Wal-Mart’s motion for
partial summary judgment. Throughout their opposition, Plaintiffs primarily argue the following: (1) Wal-Mart’s policy of locking the front doors during non-business hours constitutes an act of force for the purposes of a false imprisonment claim; (2) Wal-Mart did not show Plaintiffs the location of the emergency exits, and further, Wal-Mart was motivated to conceal these exits from Plaintiffs; and (3) some exits may have been in the back of the store.
Critically, however, the record is silent with regard to a single instance in which a WalMart manager actually used force, or the threat of force, to restrict or constrain Plaintiffs from moving or exiting the store. Rather, Plaintiffs’ solitary proffered evidence regarding a Wal-Mart manager’s alleged use of force or threat of force relates to an occasion on which Plaintiff Zednik allegedly suffered from a toothache and requested to leave work early. (Zednik Third. Supp. Decl. P 6) (“[A]s is obvious in [the manager’s] denial of [Zednik’s] request to leave the store, Wal-Mart managers did not want us to leave the stores even in cases of emergencies because if we did, the stores would not be clean in the morning.”) Plaintiff Zednik’s manager allegedly denied his request, and supposedly explained that “a senior Wal-Mart manager was visiting to inspect the Monroe, Georgia store the next day and that [Zednik] had to stay in the store to finish the cleaning and make the store immaculate for the inspection.” (Zednik Third Supp. Decl. P 4.) Plaintiff Zednik then baldly alleges that because his manager “is a muscular man,” Zednik “knew that [his manager] would assault [him] if [Zednik] tried to escape through any door that would let me out . . .” Id. In the following paragraph, however, Plaintiff Zednik appears to expressly contradict himself by asserting that “we did not know of any way to get out even in the case of
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fire or other emergency” because “[n]obody at Wal-Mart ever showed us any emergency exit.” (Jaros Supp. Decl. P 3.) Plaintiffs cite one other instance in which Plaintiff Jaros was ill, but they do not allege that Plaintiff Jaros ever notified anyone that she was bleeding, or that she attempted to leave the store by way of any of the four emergency exits in the Monroe store. (Pls.’ Motion in Opp. at 16.)
These factual allegations, however, are insufficient as a matter of law. Even assuming Plaintiffs were unable to exit through the front doors during their overnight shifts, it appears both undisputed and indisputable that Plaintiffs – at all times – had alternative means of safe egress from the store. To that point, Plaintiffs do not provide rebuttal evidence that effectively disputes Wal-Mart’s contention that multiple exits in compliance with state and federal regulations existed in both stores at all relevant times. Further, Plaintiffs do not provide rebuttal evidence that effectively disputes Wal-Mart’s contention that these multiple exits were not obstructed, unmarked, or otherwise inaccessible to Plaintiffs. Instead, Plaintiffs merely accuse Wal-Mart of deliberately concealing emergency exits from their employees as a measure of preventing federal agents from performing search and seizure raids, and proffer a litany of other hypothetical questions and scenarios. This is not sufficient to survive a motion under Rule 56.
Moreover, Plaintiffs assert that they were unable to recognize marked emergency exit signs in English and that some exits “may have been located at the far end separate areas, such as loading docks.” Clearly, however, the issue of whether Wal-Mart taught overnight cleaning crews to recognize and operate emergency doors is immaterial to a false imprisonment cause of action. The record is devoid of evidence that might show a genuine instance of actual or
7

threatened force by Wal-Mart to prevent Plaintiffs from accessing the emergency exits, which indisputably existed at all times.
Therefore, in sum, the Court concludes that no reasonable finder of fact could decide that Plaintiffs’ false imprisonment claims have merit. As such, the Court will grant Wal-Mart summary judgment on those claims. III. CONCLUSION
For the foregoing reasons, the Court will grant Wal-Mart’s motion for partial summary judgment (Doc. No. 246) against Plaintiffs. An appropriate form of order accompanies this Memorandum Opinion. Dated: April 7, 2011
/s/ Garrett E. Brown, Jr. GARRETT E. BROWN, JR., U.S.D.J.
8

 
 Case 2:03-cv-05309-GEB-MCA Document 251 Filed 03/11/11 Page 1 of 3 PageID: 10041

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, et al.,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-05309 (GEB)
DOCUMENT ELECTRONICALLY FILED
NOTICE OF JOINT MOTION TO APPROVE SETTLEMENT AND DISMISS
CLAIMS OF FELIPE CONDADO, EUNICE GOMEZ, JIRI PFAUSER, HANA
PFAUSEROVA,CARLOSTELLO,AND VICTOR ZAVALA TORRES

PLEASE TAKE NOTICE that on April4, 2011 at 9:00a.m. or as soon thereafter as counsel may be heard, Willkie Farr & Gallagher LLP, attorneys for defendant Wal-Mart Stores, Inc., and Garcia and Kricko, attorneys for plaintiffs, will move before this Court, at the Clarkson S. Fisher Building and U.S. Courthouse in Trenton, New Jersey, for an Order approving settlement and dismissal of claims ofFelipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres.
IN SUPPORT of this motion, defendant and plaintiffs shall rely upon the supporting Memorandum of Law filed herewith. A proposed form of Order is also submitted.

Case 2:03-cv-05309-GEB-MCA Document 251 Filed 03/11/11 Page 2 of 3 PageID: 10042

By:_ _ _ _ _ _ _ _ __
Gilberto Garcia GARCIA AND KRICKO 68 Summit Avenue Hackensack, NJ 07601
Attorneys for Plaintiffs

Respectfully submitted,
By: /s/ Thomas H. Golden Thomas H. Golden
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019
Of Counsel:
David P. Murray (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238
Attorneys for Defendant

Dated: March 11, 2011

-2-

Case 2:03-cv-05309-GEB-MCA Document 251 Filed 03/11/11 Page 3 of 3 PageID: 10043

By: -----------------------
James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street
y 10036
Gilberto Garcia GARCIA AND KRICKO 21 Main Street, Suite 350 Hackensack, NJ 07601
Attorneys for Plaintiffs

Respectfully submitted,
By:._ _ _ _ _ _ _ _ __
Thomas H. Golden WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019
Of Counsel:
David P. Murray (admitted pro hac vice)
WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238
Attorneys for Defendant

Dated: March_, 2011

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-1 Filed 03/11/11 Page 1 of 5 PageID: 10044

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, et al.,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-05309 (GEB)
DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF FELIPE CONDADO, EUNICE GOMEZ, JIRI PFAUSER, HANA PFAUSEROVA,CARLOSTELLO,AND
VICTOR ZAVALA TORRES

Plaintiffs Felipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres ("the Settling Plaintiffs") and Defendant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Felipe Condado, Eunice .Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from the Settling Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced and Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

Case 2:03-cv-05309-GEB-MCA Document 251-1 Filed 03/11/11 Page 2 of 5 PageID: 10045
Fair Labor Standards Act ("FLSA") and false imprisonment counts. 1 At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August 11,2010 and October 1, 2010. Pursuant to the Court's instructions at the August 11,2010 settlement conference, on August 27, 2010, WalMart provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs. On September 27, 2010, plaintiffs' counsel reported acc.eptances ofthe settlement offers by Felipe Condado, Octavia Denicia, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, and Victor Zavala Torres.2 Plaintiffs' counsel subsequently advised that plaintiff Carlos Tello accepted the settlement terms offered. Plaintiffs' counsel reported that named plaintiffs Petr Zednik and Teresa Jaros rejected the respective settlement offers addressed to them.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters provided under the Court's supervision and accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (1) a payment to plaintiff in the amount of the respective plaintiffs alleged overtime damages (as documented in the offer letters provided to each Settling Plaintiff), and (2) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko. (The $20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of $20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate
The civil rights count was dismissed with prejudice on October 7, 2005, and the RICO and RICO conspiracy counts were dismissed with prejudice on August 28, 2006. On June 25, 2010, the Court decertified the conditional collective action.
Plaintiffs' counsel reported that they were unable to reach Hipolito Palacios. Mr. Denicia has not executed a settlement agreement, but counsel indicated on March 8, 2011 that he is continuing to try to reach Mr. Denicia. Wal-Mart intends to seek involuntary dismissal of the claims of Mr. Palacios (and Mr. Denicia, if he is not reached), due to counsel's inability to find them despite diligent efforts.
-2-

Case 2:03-cv-05309-GEB-MCA Document 251-1 Filed 03/11/11 Page 3 of 5 PageID: 10046 and will issue any paperwork to the IRS as required under federal law. The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hasp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1354 (11th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount of compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable. For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs with prejudice.
-3-

Case 2:03-cv-05309-GEB-MCA Document 251-1 Filed 03/11/11 Page 4 of 5 PageID: 10047

By:_ _ _ _ _ _ _ _ __
Gilberto Garcia GARCIA AND KRICKO 68 Summit Avenue Hackensack, NJ 07601
Attorneys for Plaintiffs

Respectfully submitted,
By: Is/ Thomas H. Golden Thomas H. Golden
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019
Of Counsel:
David P. Murray (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238
Attorneys for Defendant

Dated: March 11, 2011

-4-

Case 2:03-cv-05309-GEB-MCA Document 251-1 Filed 03/11/11 Page 5 of 5 PageID: 10048

By:_____________________
James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street
::;&~036--
Gilberto Garcia GARCIA AND KRICKO 21 Main Street, Suite 350 Hackensack, NJ 07601
Attorneys for Plaintiffs

Respectfully submitted,

By:_ _ _ _ _ _ _ _ __

Thomas H. Golden WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019

Of Counsel:

1WD8aI7vL5iLdKKPS.IEtMrePueArtr,RaNyR.W(&ad. mGAittLeLd AprGoHhEacR

vice) LLP

Washington, D.C. 20006~1238

Attorneys for Defendant

Dated: March_, 2011

-4-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 1 of 74 PageID: 10049
EXHIBIT A to Memorandum in Support
of Motion to Approve Settlement and Dismiss
Claims

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 2 of 74 PageID: 10050

CONFIDENTIAL SEITLEMENT AGREEMENT AND GENERAL RELEASE

This entered into

Confidential Settlement by and between Felipe

Agreement and General Release ("AGREEMENT") is Condado ("Plaintiff') and WAL-MART STORES, INC.

('.WAL-MART'') (collectively "Parties").

RECITALS This AGREEMENT is made with reference to the following facts: A. WHEREAS, Plaintiff brought a Lawsuit against WAL-MART in the United
States District Court for the District of New Jersey, that is designated as Zavala, eta/. v. Wai-Mart Stores, Inc., Case No. 03-5309 (the "Lawsuit"); and B. WHEREAS, WAL-MART denies the validity of Plaintiff's claims, denies that it was Plaintiff's employer, denies any obligation to pay Plaintiff wages or any other compensation, and denies that it is subject to any liability; and C. WHEREAS, all wages allegedly due to Plaintiff are disputed; and D. WHEREAS, the Parties wish to resolve their differences without resort to further litigation; and

E. WHEREAS, WAL-MART is willing to provide Plaintiff with certain

considerations described below, which it is not ordinarily required to, provided

. that Plaintiff release WAL-MART from any claims Plaintiff have made or might

.;,

make arising out of the Lawsuit in accordance with the Release set forth in Paragraph 5, an_d. agrees to comply with the other promises and conditions set

forth in this AGREEMENT; and

F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance of the pwpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff,

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree to be legally bound by the following terms and conditions, which constitute full settlement ofany and all disputes between them: 1. Recitals: The Parties acknowledge that the "WHEREAS" clauses preceding paragraph I
are true and correct, and are incorporated herein as material parts to this AGREEMENT. 2. Definitions: Throughout this AGREEMENT, the term "WAL-MART" shall be defined
to include the following:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 3 of 74 PageID: 10051

(A) Wal-Mart Stores, Inc., as well as any subsidiary, parent company, affiliated entity, related entity, operating entity, franchise, or division of Wal-Mart Stores, Inc.; and

(B) Any officer, director, trustee, agent, employee, or insurer of an entity encompassed by subparagraph (a).

3. Settlement Sum: As consideration for signing this AGREEMENT and compliance with the promises made herein, WAL-MART agrees to pay the following sums, less deductions required by law:

{A) A single payment of twenty thousand dollars ($20,000.00) shall be made payable

as reasonable
Kricko ( .J?J.

attorney's fees
-3/til. 57/t,

and (tax

costs to Plainti:trs ID If)) (hereinafter

legal counsel: Garcia "Plainti:trs Com1sel").

and A

1099 sh~l be issued to the extent appropriate; and

(B) An aggregate amount of Three thousand seven hundred' DOLLARS ($3,700.00),

shall be made payable as damages based on claims of overtime pay allegedly due

to Plaintiff and liquidated damages pursuant to tl}e Fair Labor Standards Act.

This amount is subject to federal and state tax withholding requirements, which

will be deducted from this amount and paid to the government A 1099 shall be

issued to the extent appropriate.

·

WAL-MART shall provide the consideration identified in this paragraph 3 after receiving both (1) an original of this AGREEMENT appropriately signed and dated by Plaintiff, and (2) a Stipulation of Dismissal With Prejudice executed by Plaintiffs Counsel.

Tills AGREEMENT shall not become effective, therefore, and none of the benefits set forth in this paragraph ·will become due or payable, until after the Effective Date of this AGREEMENT (the "Effective Date" defined as the first day after WAL-MART has received from Plaintiff all of the items described in this paragraph).

4,

Consideration: Plaintiff understands and agrees that he would not receive the monies

and/or benefits specified in paragraph 3, above, but for his execution of this

AGREEMENT C>;ld the fulfillment of the promises contained herein.

5.

General Release of Claims: In exchange for, and in consideration of, the payments,

benefits, and other commitments described above, which is being executed

contemporaneously with this AGREEMENT, Plaintiff, for himself, and for each of his

heirs, executors, administrators and assigns, hereby irrevocably releases, acquits, and

forever discharges WAL-MART of and from any and all claims, rights, penalties,

demands, damages, debts, accounts, duties, costs and expenses (other than those costs

and expenses required to be paid pursuant to this AGREEMENT), liens, charges,

complaints, causes of action, obligations, or liability that were asserted in the Lawsuit or

that could have been asserted but were not asserted in the Lawsuit, whether known or

unknown, on the basis of, connected with, arising out of, or related in whole or in part to

any or all of the alleged acts, omissions, facts, matters, transactions, circumstances, and

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 4 of 74 PageID: 10052

ta(4s§crohFtet2octae1afomcte9iLUerurrm6n,rar.Le2Serwooedy(a.rndCsnbsul)tc'.ooJoiefartc(§eswRiaaSenl1nsItt.o9hCadta8ranhOTn~ttdeeh(dhqaew3Lecruc)doSaeioRtsnwre(ysecestAt,stpsilluveocdieiraiitrnmitla)sr,c.oceeeruywcndinTgrt)trhl;ahhCyeoentidl(stsyfa3ho)bti;A)erhsmyrt(eGaf2isPsantL)RuullidsaantcE1eiewichr8n,EelsuitrcaMUmuiudtlfill.lfeEptySee.o,rg,N.irCbaasrTblueot.ligynteoa§ugmnalPsle1rsaeoled9atnw,i6initonn;2eoanctr(st,iacelsfun)olefidodrsrm(edtrceCsei(icdtv4roeao,,i)duluorndel2Rtrdseol9eeIsl,aChacltUwsraOhiienv,.boS)eeocws,.deoCfbah,nan.eaenldertsl§ehines§cc2etitlrn9bia2fogafio0eUmsnr6udet.-swdhneS2rd.fi0aCooteohl7rn.r,r

\.,
\

6.

tMaaraatPomvtoptmeshrtnTsghiahliuragAmsePyosaaaaaloybeaiitbinliRkxeadnssmrnjanceeedbeehsgiTsptlLctemcnsocieatapeotfntihtivosrorfoeaimmnwtyhaeietufan,broootfn-caiettgthi'drlliilksyslorlieonlero.widaecreCtncpibpbefuyaiiptPlnsatstorriaeaub:trhellooyxuhosdeitcatdhmutbsonhiPsivifyoseangenesesltepobsnlgcenhauhtdosstrieylaritstmelefmi.ranaeywuunftptostcrstt,someguiahilu.iareoanbfea.ntxecylefntlfmdlPsthroismdtuhoegeeIltwefrnfefnaaruatreseneasodtrixitugnghrtttnrixeprhmahateoeWecetraanrhctnsnisotssdyrfpedpaotcAen.fiabiixestraelnnsphfndLyecedyebgIuagtgadiis-nmqn.enrftaMs,aoitiuitdgtnrhnteenhmfhtehdwsAeynhdgeaensieparatignuRciatycttaotenrgarhcearaTlemevrWghashaxbxpefp,ergioioeewswamewnanAirlrucredtafygitaedasronhLlspaimsnil,ugWnntat-nhtacerttMgseoPbyesuaaeAeneapn3,lpmdothqAaohtnLeharouinmoboycoawRt-nlebotu3lirbMdftaeaifnTihtenoigitdnnioctfaceyAWctvahsdfedesotfdete'hisR,assim,tosAaooaanhiiTlrneelginnoestilLAlnsmvoasrugrt-tidhG,petiaeAeMspopinluiraxcfsriRsopvlsGeyeraue·Ao(tneela.·EsbieoisyRnrvPgtRaiWdEtnt,ealaeErhbhllWiTmraaMlesnteieAEtpylpiidrehiAnwIpereMELhtunReatnysataLrN-irthsrErayiS3faMimpt-tiaanlfTmh,ltsNMtonneFglbiAiaWneneednTaottyAdsRossgngt/rmhson,ieAtmRtelTbheleroPfnaftiLiTarf,tortvllcytoiii1toria-enenycWetmhMhm0iabryreetlnia9rieee,swmAtsnAes9trviasehdaegfiLanRnannntfofasuonhid)o-ototdtraTdef.trt

7.

AtPChleoaoiufLnrtathtiwfiAsfs'supAipbGt.reoRhTvEaahlEfle:MfmoEProlNdtaiiTiosnmn.tiisfshfsaaalgllroebefesamnayanddaenadiuntahslolurbciszlateaismntPsialamlliynatdtiheffeb'ssyaComorueonfnsoerblmethoaasmlftohovafetPijlnoaiiEnntxtlihyfifboiinnt

8.

oatsNhnifgoadantnattAyhhtoaescrtsliPiateghaismnrethmi,Peederaseenrhttmtoi:aeavhsneahdTdtahhovoeererslhnePogaolaesatrtlarsiieorngislyghdh,tirnteaatptnsehrsdraeiegtsesenixtsnecitdntlhu,atesthnirvseaduenmbswajfaeueatctrtrhertreoraodsrnf,irttteychftoitehsnoravrAteeeGxdyneeRotcodEu,pitEneoeMrrttshhooEiitsnsNheAATorGGw.thRRiesEEre EEdthMMisapEEnoNNstehTTde,,

9.

aoccGcooftonnitvoffhloneiisrcrtmntoAioensdGfpgleRiancwELifaEsaiccwMpcarolEolryvaNdniaesTdnni,ocfonePJr.ulcwareIiiinntsahdtntihiyftcehftteeaieornvlmnadew:noWtsrPoAtlTeafLrhitmni-hsMtesifoAsAftfoRaGtrthTeRiWsEoaAAEfffMNLGir-meREMwENAtEThJRMeartTssEeheNbyairtTlhewl.aeicrbthhemeosuagytaonrvieynegrspantrrieotdudvttieosaionaitnnds

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 5 of 74 PageID: 10053

10. No Admission of Liabilitx: The Parties agree that neither this AGREEMENT nor the

·,·

furnishing of the consideration for this AGREEMENT shall be deemed or construed at

anytime for any purpose as an admission by WAL-MART of any·liability or unlawful

conduct of any kind.

11. Headings: The headings of the provisions herein are intended for convenient reference only, and the same shall not be, nor be deemed to be, interpretative of the contents of such provision.

12. Modification of AIUeement: This AGREEMENT may not be amended, revoked, changed, or modified in any way, except in writing executed by all Parties. Plaintiff agrees not to make any claim at any time or place that this AGREEMENT has been verbally modified in any respect whatsoever. No waiver of any provision of this AGREEMENT will be valid unless it is in writing and signed by the party against whom such waiver is charged. The Parties acknowledge that only the General Counsel of WAL-MART has the authority to modify this AGREEMENT ~n ·behalf of WAL-MART.

13. Interpretation: The language of all parts of this AGREEMENT shall in all cases be

construed as a whole, according to its fair meaning, and not strictly for or against any of

the Parties. This AGREEMENT has been negotiated by and between attorneys for the

Parties

and

shall

not

be

construed

against

th~ ::

"draftel'"ofthe

A.GREEMENT.

14. SeverabiUty: The parties explicitly acknowledge and agree that the provisions of this AGREEMENT are both reasonable and enforceable. However, if any portion or provision of this AGREEMENT (including, .without implication of limitation. any portion or provision of any section of this AGREEMENT) is detemrlned to be illegal, invalid, or unenforceable by any court of competent jurisdiction and cannot be modified to be legal, valid, or enforceable, the remainder of this AGREEMENT shall not be affected by such determination and shail be valid and enforceable to the fullest extent pennitted by law, and said illegal, invalid, or unenforceable portion or provision shall be deemed not to be a part of this AGREEMENT. To the extent any provision herein that relates to the dismissal of Plaintiff's Lawsuit or the general release of claims described in paragraph 5 above is deemed to b~ illegal, invalid, or unenforceable, WAL-MART is not obligated to honor any of the terms set forth herein and Plaintiff shall return any amounts paid by WAL-MART.

15. Binding Nature of Agreement: This AGREEMENT shall be binding upon each of the Parties and upon their respective heirs, administrators, representatives, executors, successors, and assigns, and shall inure to the benefit of each party and to their respective heirs, administrators, representatives, executors, successors, and assigns.
16. Entire Agreement: This AGREEMENT sets forth the entire AGREEMENT between the parties hereto, and fully supersedes any prior obligation of WAL-MART to Plaintiff. The SETTLEMENT SUM described in paragraph 3 Plaintiff acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in

4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 6 of 74 PageID: 10054

connection with his decision to accept this AGREEMENT, except for those set forth in this AGREEMill IT..

PLAINTIFF IS HEREBY ADVISED THAT HE HAS A REASONABLE PERIOD OF TIME TO REVIEW AND CONSIDER TIDS AGREEMENT.

PLAINTIFF AFFIRMS THAT HE IS AUTHORIZED TO SIGN THIS AGREEMENT AND HAS CONSULTED WITH AN ATTORNEY PRIOR TO
EXECUTION OF TIDS AGREEMENT.

HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE

PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 3

ABOVE, PLAINTIFF FREELY AND KNOWINGLY, AND AFfER DUE

CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO

WAIVE, SETTLE, AND RELEASE ALL CLAIMS HE HAS OR MIGHT. HAVE

...

AGAINST WAL-MART.

ACCEPTED AND AGREED:

ia Gr.n,.
tfncho
uoo ••. ,
rr.,,.,~

STATEOF~~-&-~~9______ )

COUNTY OF Me&'ra

)

J#\lll~/~ -201/
Date

BEFORE ME, the undersigned authority on this ..12_ day of ~)JiE.r2p 201J,
personally appeared F6LifE' Q.vM-o" , known to me to be the person whose name is
subscribed to the foregoing instrwnent and signed in my presence and swore upon oath this
AGREEMENT was executed for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO BEFORE ME on this ~ day of llAIGf'U 20 IJ.,
to certify which witness my hand and seal of office.

My Commission Expires:
5

I

\: ·.

-.: . iiarie BIN 6Niill

V;)r.U. Bdtachel

·v"" tRIO PUBLICfJ ••· f ~ ?!r,.T'Tffl. JIU.IlU

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 7 of 74 PageID: 10055
ON BEHALF OF WAL-MART:
-~~~P
David P. Murray WILLKIE FARR & GALLA

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 8 of 74 PageID: 10056

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf ofthemselves and all others similarly situated,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-5309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF SETTLING PLAINTIFFS

Plaintiffs Felipe Condado, Octavio Denisio, Eunice Gomez, Victor Zavala Torres, Jiri Pfauser, and Hana Pfauserova ("Settling Plaintiffs") and Def~ndant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Settling Plaintiffs.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced an<:i Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

,t Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 9 of 74 PageID: 10057

Fair Labor Standards Act ("FLSA") and false imprisonment counts.l At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August I1, 20IO and October I, 2010. Pursuant to the Court's instructions at the August 1I, 2010 settlement conference, on August 27,2010 Wal-Mart · provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs.
See Exhibit B (August 27, 20 I0 letter from Murray to Hon. Madeline Cox Arleo attaching
settlement correspondence). On September 27, 2010 plaintiffs' counsel reported acceptances of the settlement offers by Felipe Condado, Octavio Denisio, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, and Victor Zavala Torres. See Exhibit C (September 27, 20 I0 Letter from Linsey to
Hon. Madeline Cox Arleo).2 Plaintiffs' counsel reported that named plaintiffs Petr Zednik and
Teresa Jaros rejected the respective settlement offers addressed to them. See id.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (I) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko, and (2) a payment to plaintiff in the amount ofthe respective plaintiff's alleged overtime damages,
see Exhibit B (documenting calculation of alleged damages for each Settling Plaintiff). (The
$20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of$20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.

and

The civil rights count RICO conspiracy counts

was dismissed with prejudice on October were dismissed with prejudice on August

7, 2005, and the RICO 28, 2006. On June 25,

20 I0, the Court decertified the conditional collective action.

2

Plaintiffs'

Hipolito Palacios.

counsel
See id.

reported

that

they

were

unable

to

reach

or

locate

Carlos

Tello

or

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 10 of 74 PageID: 10058

The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-
*14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (II th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs.

Respectfully submitted,

James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036
Gilberto Garcia, Esq. GARCIA AND KRICKO 68 Summit Avenue Hackensack, New Jersey 0760 I

Attomeys for. Plaintiffs By:_ _ _ _ _ _ _ _ _ _ __
By:- - - - - - - - - - - - - - - - - -
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc. By:---,T:::::hc-o_m_as_,H=-.""G:-o.-ld.,--e_n_ _ ____

-3-

..Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 11 of 74 PageID: 10059
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 Dated: [MONTH/DAYl201 0
-4-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 12 of 74 PageID: 10060

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 13 of 74 PageID: 10061

CONFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE

· This Confidentk.l Settlement Agreement and General entered into by and between Eunice Gomez ("Plaintiff'') and ("WAL-MART") (collectively "Parties").

Release ("AGREEMENT") is WAL-MART STORES, INC.

RECITALS

This AGREEMENT is made with reference to the following facts:

A. WHEREAS, Plaintiff brought a Lawsuit against WAL-MART in the United States District Court for the District of New Jersey, that is designated as Zavala, eta/. v. Wal-Mart Stores, Inc., Case No. 03-5309 (the "Lawsuit"); and

B. WHEREAS, WAL-MART denies the validity of Plaintiff's claims, denies that it was Plaintiff's employer, denies any obligation to pay Plaintiff wages or any other compensation, and denies that it is subject to any liability; and

C. WHEREAS, all wages allegedly due to Plaintiff are disputed; and

D.

WHEREAS, the litigation; and

Parties

wish

to

resolve

their

differences

without

resort

to

further

E.

WHEREAS, considerations

WAL-MART is described below,

willing which it

to provide Plaintiff with certain is not ordinarily required to, provided

that Plaintiff release WAL-MART from any claims Plaintiff have made or might

make arising Paragraph 5,

out and

of the agrees

Lawsuit in accordance with the Release set forth to comply with the other promises and conditions

in set

forth in this AGREEMENT; and

F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance ofthe purpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff,

NOW THEREFORE, in consideration ofthe herein, and other good and valuable consideration, hereby acknowledged by the Parties, the Parties agree and conditions, which constitute full settlement of any

mutual covenants and promises contained the receipt and sufficiency of which are to be legally bound by the following tenns and all disputes between them:

I.

Recitals: The Parties acknowledge that the "WHEREAS" are true and correct, and are incorporated herein as material

clauses preceding paragraph parts to this AGREEMENT.

1

2.

Definitions: to include the

Throughout following:

this

AGREEMENT,

the

tenn

"WAL-MART'

shall

be

defined

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 14 of 74 PageID: 10062

(A) Wal-Mart Stores, Inc., as well as any subsidiary, parent company, affiliated entity, related entity, operating entity, franchise, or division of Wal-Mart Stores, Inc.; and

(B) Any officer, director, trustee, agent, employee, or insurer of an entity encompassed by subparagraph (a).

3. Settlement Sum: As consideration for signing this AGREEMENT and compliance with

the promises m~tde herein, WAL-MART agrees to pay the following sums, less

deductions required by law:

.

(A) A single payment of twenty thousand dollars ($20,000.00) shall be made payable

c » as reasonable
Kricko

attorney's fees
-J/..Z$716

and (tax

costs to Plaintiff's ID #)) (hereinafter

legal counsel: Garcia "Plaintiff's Counsel'').

and A

1099 shall be issued to the extent appropriate; and

JltJ Gr.... 'dnche•
~uoo N• ,
'U~BLA·~ ·~
4.
5.

(B) An aggregate amount of Nineteen thousand seven hundred fourteen dollars and twenty eight cents ($19,714.28), shall be made payable as damages based on claims of overtime pay allegedly due to Plaintiff and liquidated damages pursuant
to the Fair Labor Standards Act. This amount is subject to federal and state tax
withholding requirements, which will be deducted from this amount and paid to the government A 1099 shall be issued to the extent appropriate.
WAL-MART shall provide the consideration identified in this paragraph 3 after receiving both (I) an original of this AGREEMENT appropriately signed and dated by Plaintiff, and (2) a Stipulation of Dismissal With Prejudice executed by Plaintiff's Counsel. This AGREEMENT shall not become effective, therefore, and none of the benefits set forth in this paragraph will become due or payable, until after the Effective Date of this AGREEMENT (the "Effective Date" defined as the first day after WAL·:MART has received from Plaintiff all of the items described in this paragraph).
Consideration: Plaintiff understands and agrees that she would not receive the monies and/or benefits specified in paragraph 3, above, but for her execution of this AGREEMENT and the fulfillment ofthe promises contained herein. General Release of Claims: In exchange for, and in consideration of, the payments, benefits, and other commitments described above, which is being executed contemporaneously with this AGREEMENT, Plaintiff, for herself, and for each of her heirs, executors, administrators and assigns, hereby irrevocably releases, acquits, and forever discharges WAL-MART of and from any and all claims, rights, penalties, demands, damages, debts, accounts, duties, costs and expenses (other than those costs and expenses required to be paid pursuant to this AGREEMENT), liens, charges, complaints, causes of action, obligations, or liability that were asserted in the Lawsuit or that could have been asserted but were not asserted in the Lawsuit, whether known or unknown, on the basis of, connected with, arising out of, or related in whole or in part to any or all of the alleged acts, omissions, facts, matters, transactions, circumstances, and

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 15 of 74 PageID: 10063

occurrences that were directly or indirectly alleged, asserted, described, set forth or referred to in the Lawsuit, whether such allegations were or could have been based on common law or equity, or on any statute, rule, regulation, order, or law, whether federal, state, or local. The Released Claims include, but are not limited to, those arising under 42 U.S.C. § 1985(3) (civil rights); (2) 18 U.S.C. § 1962(c) (civil RICO), and 29 U.S.C. § 1962(d) (RICO conspiracy); (3) false imprisonment; and (4) 29 U.S.C. §§ 206-207 (Fair Labor Standards Act). This AGREEMENT also includes a release of all claims for attorneys' fee~ and costs incurred by Plaintiffor by Plaintiff's Counsel in connection with the Lawsuit and the Settlement ofthe Lawsuit.

6. Tax Liability: Plaintiff understands that WAL-MART shall issue an IRS Fonn 1099 for

those portions of the payment specified in paragraph 3 of this AGREEMENT that are not

subject to withholding. In paying the amount specified in paragraph 3, WAL-MART

makes no representation regarding the tax consequences or liability arising from said

payment, including whether WAL-MART was Plaintiff's employer during the relevant

time period. Plaintiff understands and agrees that any and all tax liability that may be due

or become due because of the payment referenced above is her sole responsibility, and

that she will pay any such taxes that may be due or become due. WAL-MART has no

monetary liability or obligation regarding payment whatsoever (other than delivering a

valid check in the sum referenced in paragraph 3 of this AGREEMENT to Plaintiff).

Plaintiff agrees to bear all tax consequences, if any, attendant upon the payment to her of

the above-recited sums. Plaintiff further agrees to hold WAL-MART hannless from and

against any tax or tax withholdings claims, amounts, interest, penalties, fines or

assessments brought or sought by any taxing authority or governmental agency with

regard to the above recited sums. In the event WAL-MART receives written notice that

any claim or assessments for taxes, withholding obligations, penalties and/or interest

arising out of this settlement are being or will be made against WAL-MART, WAL-

MART shall promptly, after receipt of such written notice, notify Plaintiff by letter sent

to Plaintiff's Counsel.

·

7. Court Approval: Plaintiff agrees and authorizes Plaintiffs Counsel to move jointly on . Plaintiff's behalf for dismissal of any and all claims made by or on behalf of Plaintiff in the Lawsuit. The motion shall be made in substantially the same form as that in Exhibit A of this AGREEMENT.

8. No Assignment: The Parties represent and warrant that no person other than the signatories hereto had or has any interest in the matters referred to in this AGREEMENT, that the Parties have the sole right and exclusive authority to execute this AGREEMENT, and that the Parties have not sold, assigned, transferred, conveyed, or otherwise disposed ofany claim, demand' or legal right that is the subject of this AGREEMENT.
9. Governing Law and Jurisdiction: This AGREEMENT shall be governed and conformed in accordance with the laws of the state of New Jersey without regard to its conflict of laws provision. In the event Plaintiff or WAL~MART breaches any provision of this AGREEMENT, Plaintiff and WAL~MART affirm that either may institute an action to specifically enforce any term or terms ofthis AGREEMENT.

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 16 of 74 PageID: 10064

10.

caNfuonornyndtAiiusmdhcetimnofgiofssraoinfoaynnthykeoinpfcduLo.rinpasobisdieJeirtaayst:ioannThfaoedrmPtihasristsiioeAsnGabgRyrEeWeEMtAhLEa-NtMnTeAistRhheaTlrlothbfiesandAyeGelmRiaeEbdiElioMtyrEcoNornTustnnrluoaerwdtfhuaelt

II.

Headings: The.l:leadings only, and the same shall such provision.

of not

the be,

pnroorvibseiondseehmereedintoarbee,initnetnedrepdreftaotrivceonovfetnhieenctornetfeenrtesnocef

12.

WAsvacMugehGAcrroahbeRnLdeagiE-swlfeMlEiydancMiA,oavmttoReEiorortTNodnmiiThsfmoaiowecsdafdhiiktflahAelirieegbngdaaeernuedaivynte.nhamycolailTerndairnhytieuymtes:nwptloPeaeacatsymTtrs,athoiinweiedtsyxsihifcsaAytaetiicpsmGntokhtReweniisvonEroeAwiEtrrwi.GlMneprgRdilEtagNEiacNnenEeogTdMtthewhsamxEiagatetNaincvoyteTuhendtrileonsybdnooyAttbfbhtGeybheahReenaaGyEpllalfeaEmonprPMterfeayornWrEavtadilNigAeesasdCiTLo.i,no-nhMsurPatenosAlvwsafeoRbihlknteoThetoemii.dfnsf,f·

13.

PtcIhnoaertntesiPretarpsurrtaeeindetdsaa.tssiThoaahnliw:lsnhATootlGhebe,RealEaccEoncngoMsurtdEaruigNn.eegTdotoahfgaiaastlsilnbfpseataeirtrnhtmseneo"eadgfnrotaithnfiiatgset,erA"adnGodbfRynthEoaeEnt AdMstGrbEicReNttEwlTyEefsMeohnraElaoNltrtTiona.rgnaaelilynssctafasoenrsythboeef

14.

hWpadadvuopASboniaaenrrseAonrdGoltmeptivevovdLnRsrreeiri,oofams-rsEoMisivafaoidisraEonibnrclAtsndyiMiaheielloeRotalioinieoseEtbnfoTffygmfolNnPt.A:oearhtellTchfaaGbi,desTnaeiyinaRdnntaAhbottavyEreeilGsnefaer~ Ehsfpylm',Re'iaMsbadctlscEirohl,LtlEotEiletoisaboeuhNeeMrwgenrrstTteuarsEvomelfnoe.u,oaxNfaefialripsnttintTcihodThlnfooviiondoc(rsmaarhiaielnctntAbeiprhtledcdrlyheeGaoele,etubieeafoRgndlnncarteeeiEhfktnnnxauopiEjndgentsnuroeoMr,dceraAnrwweientltsEaPinGflidorbeoNtlfaeiRnhaodlrcnlTeciorgeEtoyncei)uaetroEteaostiiappnbeMfasibfrtrlmnahoeoodlEsden,epvvefh.NdWtliiaacefisslTgculircilaAooamrlaHielstnnrnmeLiieheoonnss-tashtwneouMthlhedltdreaeornaAelxbvnetlftsoteeoiRlabecntritnhnrmbTme,iybetebtdoiehiitpeseidpafaaldeeamirltntrfeimfoaoomiifgonvrneeneteauydiicd,sltlpontat,itaeabetontposindredlnnooiaysbgpvstbgrbeatpaatryityootliaoooelidpfedsrndlbtuagh,ttebihhwcatooooy5heilan,s,rr

15.

hsPBueaicirnrctsdie,eissansdgomarNsni,dnaaitnsuutdrrpaeaotosnosrfisg,Atnhregse,pirrearenesrmdeenssephtnaeattc:lilvtiieTvnsehu, iresehxAeteoicGrusthR,toeErasbEd,eMmsnueiEncfNciitseTtosrsafsotehoraasrc,sllh,abnpredaerpbatrisyenssiadgeninnndtsga.ttouivptehosen,ireeraexcshepceoucfttoitrvhsee,

16.

TntEhohnetetpirSreaelrEiteTiAedTsgoLrhenEeerMmaentEoeyn,NtraT:enpdSrTeUfhsueMilslnytAdasteGiusopcRnersEirb,sEeepMddreoiEsmnNaipnsTaeyrssa,pegrtorisaor prfaohogrbrt3heliePgtmlhaateeiinonetntsniftoofirffaeWcakAnAnyGoLRwk-iMElneEddAMgRmeEsTaNdttheoTattPoblseahhtiewnertehifeaifnns.

4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 17 of 74 PageID: 10065

connection with her this AGREEMENT.

decision

to

accept

this

AGREEMENT,

except

for

those

set

forth

in

OPLFATIINMTEIFTFOISf.'.H.EEVRIEEWBYANADDVCIOSNEDSITDHEARTTISDHSEAHGARSEAEMREEANSTO. NABLE PERIOD EAPXLGAERCIENUETTMIIFEOFNNTOA FFAFNTIDHR IMSHSAAGSTRHCEOAENTMSEUSNLHTTE.EDISW IATUHT HAONRAI ZTEtDO R NT OE Y SPIGRNI O RTHTIOS AWCAPHGROBAAOAONVIVIMVSINNEIEIDS,GS,TESEREEWPSTALLAATAETNLLCIIDO-NETMNT,TEAA,IODFRNFERTDTNE.ORTFCREEEERELIXVEESEAELCIYSTUNEHTTAAEOENLSTDLUTIMDHCKSILSSNAAAOINAGMWDGRSIREBNSEEEHGMENELMEEYHFNE,AINTTS,ATSTNOINOIDRNPTFMAAEUIRNFGLATDFHEGIITLNRRLHGAADPTTVHUHOEEE3 ACCEPTED AND AGREED:

fo.er.;W.I
dncha Ll(J() Ne. 1·
'lT.BT.A

. By: EUNJC-i=".r";.rt.lI~:M.:EiZ~ • ~ ..

STATEOF ~u~

)

COUNTY OF 1'16-?'1~0

)

l:; c\ PrN, 1'2·20\ \
Date

AspueGbrssRocEnriaEbBJMelyEdEFtaNOopTRptheEwaearesMfoderExe~,egvc!otu'hiCnteeGg:duifn@nosdrftefrtlruh.vsmezig.p.enunertdpaonsa,deustkshaniognorndiwteycndonoitnsonidmmethryeaistpitoroJen.s.bte2hene.c_retehideananeydpxepsrorswefosonsr~ee'dwi.uh.po!osUne

201L, name is oath this

to certifSyUwBhSicChRwIBitnEeDssAmNyDhaSnWd aOnRdNseTalOoBf oEfFfiOceR. E ME on this .Jl._ day of &lr..tU 20l.L,

NOT~ . .

OF \V<'I'-1\

My Commission Expires:

L~c· AL Ft>~ Uio~ Ckvz. I ~.:(fll'h-fl-1~-~
(Printed Name of Notary)

I
s

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 18 of 74 PageID: 10066
ON BEHALF OF WAL-MART:
'bvtv,') P. !VL-vtA/la-t
David P. Murray WILLKIE FARR & GALLAGH

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 19 of 74 PageID: 10067

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf ofthemselves and all others similarly situated,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-5309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF SETTLING PLAINTIFFS

Plaintiffs Felipe Condado, Octavio Denisio, Eunice Gomez, Victor Zavala Torres, Jiri Pfauser, and Hana Pfauserova ("Settling Plaintiffs") and Def~ndant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Settling Plaintiffs.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced an<:i Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

,Ct ase 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 20 of 74 PageID: 10068

Fair Labor Standards Act ("FLSA") and false imprisonment counts.l At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August I1, 20IO and October I, 2010. Pursuant to the Court's instructions at the August 1I, 2010 settlement conference, on August 27,2010 Wal-Mart · provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs.
See Exhibit B (August 27, 20 I0 letter from Murray to Hon. Madeline Cox Arleo attaching
settlement correspondence). On September 27, 2010 plaintiffs' counsel reported acceptances of the settlement offers by Felipe Condado, Octavio Denisio, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, and Victor Zavala Torres. See Exhibit C (September 27, 20 I0 Letter from Linsey to
Hon. Madeline Cox Arleo).2 Plaintiffs' counsel reported that named plaintiffs Petr Zednik and
Teresa Jaros rejected the respective settlement offers addressed to them. See id.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (I) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko, and (2) a payment to plaintiff in the amount ofthe respective plaintiff's alleged overtime damages,
see Exhibit B (documenting calculation of alleged damages for each Settling Plaintiff). (The
$20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of$20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.

and

The civil rights count RICO conspiracy counts

was dismissed with prejudice on October were dismissed with prejudice on August

7, 2005, and the RICO 28, 2006. On June 25,

20 I0, the Court decertified the conditional collective action.

2

Plaintiffs'

Hipolito Palacios.

counsel
See id.

reported

that

they

were

unable

to

reach

or

locate

Carlos

Tello

or

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 21 of 74 PageID: 10069

The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-
*14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (II th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs.

Respectfully submitted,

James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036
Gilberto Garcia, Esq. GARCIA AND KRICKO 68 Summit Avenue Hackensack, New Jersey 0760 I

Attomeys for. Plaintiffs By:_ _ _ _ _ _ _ _ _ _ __
By:- - - - - - - - - - - - - - - - - -
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc. By:---,T:::::hc-o_m_as_,H=-.""G:-o.-ld.,--e_n_ _ ____

-3-

..Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 22 of 74 PageID: 10070
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 Dated: [MONTH/DAYl201 0
-4-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 23 of 74 PageID: 10071

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 24 of 74 PageID: 10072

~

~ ~~~' i~t-1~i-· t ~0('~

: "A~
~

.

ONFIDENTIAL

SETTLEMENT

AGREEMENT

ND GENERAL RELEASE

'A.'~"o-rA.,.,enttp$nto WAL~MART \ ,

,.. his Confidential Settlement Agreement and General Release ("AGREEMENT') is

by and between Jiri Pfauser ("Plaintiff') and

STORES, INC. ("WAL-

~'R:T") (collectively "Parties").

RECITALS

This AGREEMENT is made with reference to the following facts:

A. WHEREAS, Plaintiff brought a Lawsuit against WAL-MART in the United
States District Court for the District ofNew Jersey, that is designated as Zavala, eta/. v. Wal~Mart Stores, Inc., Case No. 03-5309 (the "Lawsuit''); and

B. WHEREAS, WAL-MART denies the validity of Plaintiff's claims, denies that it was Plaintiffs employer, denies any obligation to pay Plaintiff wages or any other compensation, and denies that it is subject to any liability; and
C. WHEREAS, all wages allegedly due to Plaintiff are disputed; and
D. WHEREAS, the Parties wish to resolve their differences without resort to further litigation; and

E. WHEREAS, WAL-MART is willing to provide Plaintiff with certain considerations described below, which it is not ordinarily required to, provided that Plaintiff release WAL-MART from any claims Plaintiff have made or might make arising out of the Lawsuit in accordance with the Release set forth in Paragraph 5, and agrees to comply with the other promises and conditions set forth in this AGREEMENT; and
F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance of the purpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff,

NOW THEREFORE, in consideration of the mdtual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which· are hereby acknowledged by the Parties, the Parties agree to be legally bound by the following terms and conditions, which constitute full settlement of any and all disputes between them:

1. Recitals: The Parties acknowledge that the "WHEREAS" clauses preceding paragraph 1 are true and correct, and are incorporated herein as material parts to this AGREEMENT.

2. Definitions: Throughout this AGREEMENT, the term "WAL-MART' shall be defined to include the following:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 25 of 74 PageID: 10073

(A)

Wal-Mart Stores, Inc., as related entity, operating and

well as any subsidiary, parent entity, franchise, or division

company, affiliated entity, of Wal-Mart Stores, Inc.;

(B)

Any officer, director, trustee, agent, encompassed by subparagraph (a).

employee,

or

insurer

of

an

entity

3.

Settlement Sum: As consideration for signing this the promises made herein, WAL~MART agrees deductions required by law:

AGREEMENT and compliance to pay the following sums,

with less

(A)

tKaAosrtisrhciekneaogseloxe(nt2epa2nab-ty3leam1p2aep5tnrt7oto1pro6nrfi)eatyw(teh'se;enrafetenyiednstahfaotneudrsa"cnPodlsatdisnottliolfafrP'ssla(C$ino2tu0inf,0fs'0esl0"l.)e0.g0a)Al sch1oa0ull9n9bseeslh:maalGldeabrepcaiiasysauabneldde

(B)

twFotAhwafientieohrgnvahotLegoyvrglaetdfrbioremionnugrmegratcpeSereeantnaqytantumsadiAlro(ale$eurmId4gn0s,eet94dn97oAlt5ysfsc,.h2tdF.wa4uol)helu,ibTrctsoehhhthaiiPswslollsuaiuablsilemneadntbomiedtfuofandadftteohneduedipursealcixhytsqetuuauedbnbniddljtfeearracoetapetdmsdptdrsodotaehapmvifmrseeianadagattegmeeyre.saosflbuipvanauestnerdsaddunooadslnnltaaptcrtatseloiadiattmanhtxodes

abWnodAth(L2(-)IM)aAaSnRtipTourislgahitanilolanlporooffvDtihdiisesmtAhiseGsacRloEnWsEiidMtheErPaNrtieTojundaipidcpeernoetpixfreiiecadutetielnydtsbhiyigsnPpeladarianagtnridfafp'dshaC3teoadufntbesyrelrP.elcaeiinvtiinffg,

rAfTeohGcrtiehsRivEAienEdGMtfRhrioEEsmNEpMTaPrlaE(agtNihrnaeTtpif"hsfEhawaflfllilelolcnftbiotvehteceboieDmtceaeomtmeds"uededeeesfocffreirnicpbetaiedyvdaeab,insltehtt,hheuiresenfptfoiialrrrseaat,fgtadreanarpdythhn)ae.oftEneefrfeoWcftiAtvhLee-DMbeaAnteeRfoTitfsthhsaiesst

4.

Consideration: and/or benefits

Plaintiff understands and agrees that he would not specified in paragraph 3, above, but for his

AGREEMENT and the fulfi1lq1ent of the promises contained herein.

receive the execution

monies of this

5.

autcadfhchbGnnonoeoeeaykmdrmeinnternntosepvaceoe,efrlenomwiaxrrdteuaaisppnsnxll,lledd,,otensiRrocods,sahauncfaeencnathmlstoaevdtehahuoreaaresresuggse,ebseeaoebqslesalstauyleho,doesinermfigwWdfsereeCaadiiAodnbtcslhfsittcaL,sisateoioot,tc-crmrmhnMttoaaesi,sbtnmsc,dAo:eocnorAiboRebtsmmlpIucGuTintanagiteeRsintanddsewsotEdit,xiosfewoEcpdnranhMieauusstsand,hsrt,Eninsid,eefgouogsNasanratcec,rfTsnrtrilas,isocift,bs,aoiomnshebPrtsme,gedoitlrlsraaitaaoetietnnytnbautdhaedyntytbiitrdsfhisoonfi,aianfv,re,nAttretxfrdeohcw,oGapvoerrneeRonarsrnwJhLceseaEJsiialachmdeaEabwtictseisMlcesolryssheada(neuEliotrsfimriitNtt,,enohe,islnscadTee,wwinra)roihd,hsrcntbfieoehug,eslfttlamiho,hheitennhtreesnsaogetr,stecarLh,qaknpaipocunncaewceshieoyxhentpsswmseaaoua,,ccrlnriefgtuaottainneteshnotoetsdtosisddrsrs,,,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 26 of 74 PageID: 10074
occurrences that were directly or indirectly alleged, asserted, described, set forth or referred to in the Lawsuit, whether such allegations were or could have been based on common law or equity, or on any statute, rule, regulation, order, or law, whether federal, state, or local. The Released Claims include, but are not limited to, those arising under 42 U.S.C. § 1985(3) (civil rights); (2) 18 U.S.C. § 1962{c) (civil RICO), and 29 U.S.C. § 1962(d) (RICO conspiracy); (3) false imprisonment; and (4) 29 U.S.C. §§ 206-207 (Fair Labor Standards Act). This AGREEMENT also includes a release of all claims for attorneys' fees and costs incurred by Plaintiff or by Plaintiff's Counsel in connection with the Lawsuit and !!le Settlement ofthe Lawsuit.
6. Tax Liability: Plaintiffunderstands that WAL-MART shall issue an IRS Form 1099 for those portions of the payment specified in paragraph 3 of this AGREEMENT that are not subject to withholding. In paying the amount specified in paragraph 3, WAL-MART makes no representation regarding the tax consequences or liability arising from said payment, including whether WAL·MART was Plaintiffs employer during the relevant time period. Plaintiff understands and agrees that any and all tax liability that may be due or become due because of the payment referenced above is his sole responsibility, and that he will pay any such taxes that may be due or become due. WAL-MART has no monetary liability or obligation regarding payment whatsoever (other than delivering a valid check in the sum referenced in paragraph 3 of this AGREEMENT to Plaintiff). Plaintiff agrees to bear all tax consequences, if any, attendant upon the payment to him of the above-recited sums. Plaintiff further agrees to hold WAL-MART harmless from and against any tax or tax withholdings claims, amounts, interest, penalties, fines or assessments brought or sought by any taxing authority or governmental agency with regard to the above recited sums. In the event WAL-MART receives written notice that any claim or assessments for taxes, withholding obligations, penalties and/or interest arising out of this settlement are being or will be made against WAL-MART, WALMART shall promptly, after receipt of such written notice, notify Plaintiff by Jetter sent to Plaintiffs Counsel.
7. Court Approval: Plaintiff agrees and authorizes Plaintiffs Counsel to move jointly on Plaintiffs behalf for dismissal of any and all claims made by or on behalf of Plaintiff in the Lawsuit. The motion shall be made in substantially the same form as that in Exhibit A ofthis AGREEMENT.
8. No Assignment: The Parties represent and warrant that no person other than the signatories hereto had or has any interest in the matters referred to in this AGREEMENT, that the Parties have the sole right and exclusive authority to execute this AGREEMENT, and that the Parties have not sold, assigned, transferred, conveyed, or otherwise disposed of any claim, demand or legal right that is the subject of this AGREEMENT.
9. Governing Law and Jurisdiction: This AGREEMENT shall be governed and conformed in accordance with the Jaws of the state of New Jersey without regard to its conflict of laws provision. In the event Plaintiff or WAL-MART breaches any provision of this AGREEMENT, Plaintiff and WAL-MART affirm that either may institute an action to specifically enforce any term or terms of this AGREEMENT.
3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 27 of 74 PageID: 10075
10. No Admission of Liability: The Parties agree that neither this AGREEMENT nor the furnishing of the consideration for this AGREEMENT shall be deemed or construed at anytime for any purpose as an admission by WAL-MART of any liability or unlawful conduct of any kind.
11. Headings: The headings of the provisions herein are intended for convenient reference only, and the same shall not be, nor be deemed to be, interpretative of the contents of such provision.
12. Modification of Agr,ement: This AGREEMENT may not be amended, revoked, changed, or modified in any way, except in writing executed by all Parties. Plaintiff agrees not to make any claim at any time or place that this AGREEMENT has been verbally modified in any respect whatsoever. No waiver of any provision of this AGREEMENT will be valid unless it is in writing and signed by the party against whom such waiver is charged. The Parties acknowledge that only the General Counsel of WAL-MART has the authority to modify this AGREEMENT on behalf of WAL-MART.
13. Interpretation: The language of all parts of this AGREEMENT shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the Parties. This AGREEMENT has been negotiated by and between attorneys for the Parties and shall not be construed against the "drafter" of the AGREEMENT.
14. Severability: The parties explicitly acknowledge and agree that the provisions of this APREEMENT are both reasonable and enforceable. However, if any portion or provision of this AGREEMENT (including, without implication of limitation, any portion or provision of any section of this AGREEMENT) is determined to be illegal, invalid, or unenforceable by any court of competent jurisdiction and cannot be modified to be legal, valid, or enforceable, the remainder of this AGREEMENT shall not be affected by such determination and shall be valid and enforceable to the fullest extent permitted by law, and said illegal, invalid, or unenforceable portion or provision shall be deemed not to be a part of this AGREEMENT. To the extent any provision herein that relates to the dismissal of Plaintiff's Lawsuit or the general release of claims described in paragraph 5 above is deemed to be illegal, invalid, or unenforceable, WAL-MART is not obligated to honor any of the terms set forth herein and Plaintiff shall return any amounts paid by WAL-MART.
15. Binding Nature of Agreement: This AGREEMENT shall be binding upon each of the Parties and upon their respective heirs, administrators, representatives, executors, successors, and assigns, and shall inure to the benefit of each party and to their respective heirs, administrators, representatives, executors, successors, and assigns.
16. Entire Agreement: This AGREEMENT sets forth the entire AGREEMENT between the parties hereto, and fully supersedes any prior obligation of WAL-MART to Plaintiff. The SETTLEMENT SUM described in paragraph 3 Plaintiff acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in
4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 28 of 74 PageID: 10076

connection with his decision to accept this AGREEMENT, except for those set forth in this AGREEMENT.
PLAINTIFF IS HEREBY ADVISED THAT HE HAS A RE.ASONABLE PERIOD OF TIME TO REVIEW AND CONSIDER THIS AGREEMENT.
PLAINTIFF AFFIRMS THAT HE IS AUTHORIZED TO SIGN THIS AGREEMENT AND HAS CONSULTED WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT.
HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULF1LL THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 3 ABOVE, PLAINTIFF FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE, AND RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST WAL-MART.
ACCEPTED AND AGREED:

By:

·fAt£

JIRI PFAUSE;t yJ .

STATE OF _____________ ) COUNTY OF ___________ )

11.1. 2011
Date

BEFORE ME, the undersigned authority on this _ _ day of

201_.

personally appeared

known to me to be the person whose name is

subscribed to the foregoing instrument and signed in my presence and swore upon oath this

AGREEMENT was executed for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO BEFORE ME on this _ _ day of to certify which witness my hand and seal of office.

201_,

My Commission Expires:

NOTARYPUBLIC-STATEOF _ _ _ __ (Printed Name ofNotary)

5

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 29 of 74 PageID: 10077
Be:Zne cislo overovaci knihy OC/ _,. F I - /2011 -------------------------------------------------------Ovefuji, ze pan ---------------------------------------------------------------------------------------------Jin Pfauser, oar. 23.02.1976, bytem Kamenny Ujezd, Delnicka 435, PSC 373 81,------------jehoz osobni totoznost byla prokazana platnym obcanskym prUkazem, uznal prede mnou podpis na teto listine za vlastni. -------------------------------------------------------------------------------V Ceskych Budejovicich 01.02.2011

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 30 of 74 PageID: 10078
). /llUM ON BEHALF OF WAL-MART:
\~\
David P. Murray WILLKIE FARR & GALLAGH

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 31 of 74 PageID: 10079

·~ "~'f,RT l'R.o'..

~ .-1- 0~

•"""~~•~ v~eobecne ~~:~~

ERNA DOHODA 0 VYROVNANi A VSEOBECNE VZDANi SE NAROKU

ato duvema dohoda o vyrovnam a

vzdani se naroku (,,DOHODA") je

ena mezi Jiffm Pfauserem (,,ialobce") a spoleenosti WAL-MART STORES, INC. (,WAL-

-.;.:.;;;-tv.A.RT") (dohromady ,nrany").

PREAMBULE

DOHODA je uzavrena s odkazem na misledujicf fakta:
A. ZATiMCO .lalobce podal soudni .zalobu proti spoleenosti WAL-MART u Okresniho soudu Spojenych statu pro fedenUnf okres New Jersey, ktera je
oznaeenajako Zavala a kol versus spo/ecnost Wa/-Mart Stores, Inc., cislo pripadu
03-5309 (,soudni fizenf"); a

B. ZATiMCO spoleenost WAL-MART popfra platnost mirokU .lalobce, popfn1, :Ze byla zamestnavatelem Zalobce, popira jakekoliv povinnosti zaplatit mzdy ialobci nebojakehokoliv jine nahrady a popirci, ze podlehajakekoliv odpovMnosti; a
C. ZATiMCO v~echny mzdy Udajne dluine blobci jsou spome; a
D. ZATiMCO si strany pteji vyfe~it sve rozpory bez vedenf dalsfho sporu; a
E. ZATiMCO spolecnost WAL-MART je ochotna poskytnout .zatobci urcitou nahradu )JOpsanou nfze, coz nenf befue pozadovano, za pfedpokladu, :Ze zalobce zbavi spoleenost WAL-MART jakychkoliv narokU, ktere byly vzneseny zalobcem nebo mohou vzniknout ze soudniho fizenf podle vyvazanf uvedeneho v odstavci 5, a souhlasi, :Ze dodrffjine sJiby a podmfnky uvedene v teto DOHODE; a
F. ZATiMCO DOHODA re~i spor bona fide pn podpore smyslu zakona o spravedlivjch pracovnfch podminkach, 29 U.S.C. §§ 201 et seq., a je cestna a pfimeremi k Zalobci,

NYNi TUDiZ pfi zvazeni vzajemnych funluv a slibU zde obsazenych a jineho dobreho a cenneho zvazenf, pfijeti a dostatecnosti, ktere jsou zde potvrzene stranami, strany souhlasf, ze jsou pnivne vazany misledujfcfmi podminkami, ktere vyt~afeji uplne vyrovnani jakychkoliv sporu mezi nimi:
1. Preambule: Strany stvrzujf, .ze v~ty ,ZATfMCO" pfedchazejfcf odstavci 1 jsou pravdive
a spravne ajsou zacleneny do tohoto dokumentujako zavazne casti teto DOHODY.
2. Definice: V nimci teto DOHODY termfn ,WAL-MART' je definovan tak, aby zahrnul nasledujfcf:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 32 of 74 PageID: 10080

(A)

Wal-Mart Stores, Inc., stejne jako dcefinou pfidruZenou jednotku, afiliaci, provozni spole~nosti Wal-Mart Stores, Inc.; a

spoleenost, rnatei'skou spoleenost, jednotku, franchisu nebo divizi

(B)

Jakehokoliv pi'edstavitele, feditele, ~lena spnivnf rady, nebo pojistitele jednotky zahmute do pododstavce (a).

zastupce,

zamestnance

3.

Castka vyrovnani: Pfi zvazeni za u~elern podpisu teto u~inenych, spolecnost WAL-MART souhlasi, ze zaplati odpo~et po~dovany zakonern:

DOHODY a dodrzeni slibii zde misledujfci castku ponizenou o

(A)

jF~Jaeookdrbomncopuerfla:airzin'oGe1vr0aae9rncp9eilaarpntboaaapblK:vYaetrtkivcvyykydoasai nn(da2vvk2al-pca3ied'1ftys2ilt5uins7sain1cep6rdr)naovl(radnoAnfzhlsleoa(h2jzu0ea;ns0at0u,0pp,cr0ae0v, naUfStozDap)srtraunvpuncsiefrnb~uyotzbascpsetl'ua'pt)nc.ai

(B)

ptpotcSeyidoe'tofkonSdsuatlklthujeiofc5rhcdnan(ainn4scefetrhaeknnd4ycfse7rmaoer5soza,tpd2sklmaone4ahczdimutdvlUee.eynSazavDzasyakr)saaoitrnunn~azdlatmaayopjfbnplsYaotopitcuisraeiascdnvppaaerclvaadtkcytlvnUiiftvaamyspdejciea'thne.ksaspoceFsardarsoomacrdozmddskvekluuunsolatidadcntrnaihoenpupnIeeof0tzzdi9eazr9dlanmooliobnzlra.ndcktraiyeau,ncahekba.YtesndTttravaaanavtnocobyeavudctredaioanencs~ytitakcryvndhar

(oS2bp)dourl.esttecannnioos(vtJe)nWofrA0igLsikn-MoalnuActeRentTioffDrzneOanHipOsouDskjrYyntonsuopuvi'tiyshluuohstnroayvdreunnepsoptadranpvoisnveferrnnnoazuadsavtuteptrconemzrnteo:sZtoraaldonsbytcaev~.cliob3cepoa

o(nT,bedadjtasrooZtuuDimoOddvlHuzsOmatolDouebpAcnee~ntubivdovsiezspcpnlhalenatryntnnoavese,vtc"sait.uozpvuodeppodisteadnvnoeepbjlvyaakttnpoooronpsttrdovaanotzufdadsdvtenasnvetocpvuio)yp.theeno, fdcyovuspvpleoadltenecnonesotvsttetotWomAtDoLOo-MHdsOAtaDRvYcTi

4.

Uvazenf: Zalobce cbape a souhlasi, :Ze 3 vj~e, ale po vstoupenf v platnost teto

neziska penize a/nebo DOHODY a vypln~ni

vyhody uvedene v odstavci sliM zde obsazenych.

5.

cnvpGpzapViarponoriaSnrakyppzvoyeru,ras,nsocotaktzc,hbbn'luaiareyvnjepndscecsmeoonee,ehduz,zeceobadvhvnvdtadnyen,~vzmaisycihdovesahroph,akntlsointoo,kfvvijftb,teeafzem,asneroekaUefnpddtifeydnsnsbed,a,nakauddivoverrdzcu:nodzbZaeoeenko,ldua5t~eUuy1nkzrvv:efietvytyei,Vaoyzakrdlsevlyoianotzdarnrjmeobnulnzaubvye,uiovh,oan,jhaktenotitlptsr,eyyueoasolrpneuvszbeoo,s:oviaYdlanjuiptessksanco~peoucoapnjurvpessiofarcletnisanvididettziclnnnv,vueseoWoaotcbsvtnzkaoetoAaeeiolu,nnkLzlztydfnuoam-p,iovMpeoDnaosalvettacAztOr'bietnknjneRHtosetiobnionT,O,o~aucDaskvDezstpztyOteiefOn,ihfrtHavfhoeUsrmnsodOen,eabdteDkcoavy~ahlslnlrjYayenieondnnr)ibebntu,y,aioociprckzdoelhnuvataakeeodstpzrutnlzaeraav,anojovvyntavpbandyesmarzyfelamankclbnjevy.ythi~ue,i,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 33 of 74 PageID: 10081

bud' pi'imo nebo neprimo ildajne, uplatiiovane, popsane, uvedene nebo oznacene v soudnfm fizenf, at' byla nebo mohla by-t takova tvrzeni zalozena na obecnem pravu nebo spravedlivem miroku nebo jakemkoliv narfzeni, smernici, zakonnem pfedpisu, fadu nebo .zakonu, at' uZ fedenilnim, statnfm nebo mfstnim. Anulovane nciroky zahrnuji, ale nejsou omezeny na ty, ktere vznikaji die 42 U.S.C. § 1985(3) (ob~ska prava); (2) 18 U.S.C. § 1962(c) (obcanske pravo RICO) a 29 U.S.C. § 1962(d) (zlocinne spolceni RICO); (3) neopnivneneho uvezneni; a (4) 29 U.S.C. §§ 206-207 (zakon o spravedlivych pracovnich podminkach). Tato DOHODA take zahrnuje vzdani se vsech pohledavek v souvislosti s poplatky a naklady na pravniho zastupce vzniklych m!obci nebo pravnfmu zastupci zalobce v souvislosti se soudnim pfipadem a vyrovnanim soudniho pfipadu.

6.

w Danova odpovednost: Zalobce chape, ze spolecnost AL-MART vyda formular IRS

1099 pro ucely teto platby uvedene v odstavci 3 teto DOHODY, ktere nepodlehaji

danove srazce. Pfi vyplacenf castky uvedene v odstavci 3 spolecnost WAL-MART

nevznasf namitky v souvislosti s danovjmi dusledky nebo odpovednosti vzeslou z i'eeene

platby, vcetne toho, zda spolecnost WAL-MART byla zamestnavatelem :lalobce behem

ptfslusne doby. Zalobce chape a souhlasi, ze jak.akoliv daiiova odpovednost, ktera je

povinna nebo se povinnou stane kvuli platbe uvedene v:Yse, je jeho v:Yhradni

odpovednosti a ze zaplati jakekoliv dane, ktere mohou b:Yt dlu:Zne nebo se dlufuymi

stanou. Spolecnost WAL-MART nema zadnou financni odpovednost nebo povinnost v

souvislosti s platbou Ginou nez dodanf Zaiobci platneho seku na castku uvedenou v

odstavci 3 teto DOHODY). Zalobce souhlasi, ze ponese vsechny danove misledky, pokud

se nejake vyskytnou, doprovazejici platbu v:Y8e uvedenych castek. Zalobce dale souhlasi,

ze uchnini spolecnost WAL-MART od jakychkoliv sti:Znosti souvisejfcfch s danemi nebo

miroky na danove srazky ze mzdy, Mstkami, uroky, pemilemi, pokutami nebo poplatky

vznesenymi nebo zadanymi ze strany danoveho uradu nebo vladnf agentury s ohledem na

v:Yse uvedene castky. V pnpade, ze spolecnost WAL-MART obdrzi pfsemnou zpravu, :Ze

jakykoliv narok nebo v:Ymera danf, zavazky vuci sra:Zkam dani ze mzdy, pokuty a/nebo

fuoky vze~le z tohoto vyrovnanf jsou nebo budou ucin~ny proti spolecnosti WAL-

MART, spole~nost WAL-MART okamzite po pi'ijeti takove pisemne zpravy oznarnf toto

:lalobci prostrednictvim dopisu zaslaneho pnivnfrnu zastupci zalobce.

7. Soudni schvaleni: Zalobce souhlasi a povefuje sveho pravnfho zastupce, aby spolecne postoupili jmenem zalobce staZeni vsech m'lroku ucinenych jmenem zalobce v rarnci soudniho fizenf. Navrh rna b:Yt ucinen v podstate stejnou fonnou, jako je v Priloze A teto DOHODY.

8. Nepfevoditelnost: Strany stvrzuji a zaru~ujf, ze zadna osoba, jimi, nez strany, ktere
podepsaly tuto dohodu, nemely nebo nemaji zadny zajem na zaJeZitostech uvedenych v teto DOHODE, ·.le strany maji v:Yhradnf pravo a exkluzivni opnivneni uvest v platnost tuto DOHODU a :Ze strany neprodaly, nepostoupily, neprevedly, nepredaly nebo jinak nenalozily s narokem, po:ladavkem nebo zakonnym pravem, ktere je pfedm~tem teto DOHODY.

9. Rozhodne wavo a iurisdikce: Tato DOHODA rna b:Yt nzena a by-t v souladu se zakony
statu New Jersey bez ohledu na ustanovenf kolize pnivnich norem. V pffpade, ze :lalobce nebo spolecnost WAL-MART poru~f jakekoliv ustanovenf teto DOHODY, :lalobce a

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 34 of 74 PageID: 10082
spole~nost WAL-MART stvrzujf, fe bud' mohou podat .zalobu na zvlastni vynuceni podmfnky nebo podmfnek teto DOHODY. 10. Neprijeti odpovednosti: Strany souhlasi, ze ani tato DOHODA, ani poskytnuti zfetele na tuto DOHODU nema bjt pova:l.ovano nebo vytvoteno kdykoliv pro jakykoliv u~el jako prijeti ze strany spol~nosti WAL-MART jakekoliv zfuuk:y nebo nezakonneho vedeni jakehokoliv druhu.
11. N@zvy paragraM: N.azvy paragrafU ustanoveni uvedenych v teto dohod~ jsou zamysleny
pouze jako vhodne odkazy a ty same nemaji byt nebo nejsou urceny, aby byly interpretacnf v souvislosti s obsahem takoveho ustanoveni. 12. Zmena dobody: Tato DOHODA nema bjt pozmenovana, odvolana, m~nena nebo upravovana, a to jak)'mkoliv zpusobem, s v)'jimkou pisemne zmeny stvrzene vsemi stranami. Zalobce souhlasi, ie nevznese zadnou stfmost, a to kdykoliv nebo kdekoliv, te tato DOHODA byla jakkoliv listne upravena. Zadne zfeknutf se ustanoveni teto DOHODY nebude platne, pokud nebude v pfsemne fonne a podepsano stranou, proti ktere je takove zfeknuti namifeno. Strany stvrzujf, te pouze hlavni pravni zastupce spolecnosti WAL-MART rna poveteni pozmenit tuto DOHODU jmenem spol~nosti WAL-MART. 13. Vyklad: Jazyk vsech casti teto DOHODY rna bjt ve vsech pnpadech vytvofen jako celek, podle sveho cestneho limyslu, a ne vylozene pro nebo proti jakekoliv ze stran. Tato DOHODA byla projednana s a mezi pravnfmi zastupci stran a nerna bjt vykladana proti ,styJizatorovi mivrhu" teto DOHODY. 14. Oddelitelnost: Strany v)'slovne stvrzuji a souhlasi, te ustanoveni teto DOHODY jsou primerena a vymahatelna. Presto, pokud jakakoliv cast nebo ustanovenf teto DOHODY (vcetn~. bez souvislosti na omezeni, jakekoliv casti nebo ustanoveni jakekoliv Msti teto DOHODY) je shledano jako nezakonne, neplatne nebo nevymahatelne u soudu pfislusne jurisdikce a nemute bjt upraveno, aby bylo zakonne, platne nebo vyrnahatelne, zbytek teto DOHODY nema byt ovlivnen takov)'m urcenfm a rna b)'t platny a vymahatelny v plnem rozsahu, ktery je povolen zlikonem, a uvedena nezakonna nebo nevymahatelmi cast nebo ustanovenf nema byt posuzovana jako Mst teto DOHODY. V rozsahu ustanoveni uvedeneho zde, ktere souvisi se skon~enfm soudniho ifzeni ze strany zalobce nebo v~eobecnym zfeknutim se mll'okU popsanych v odstavci 5 v)'se, je pova:lovano za nezakonne, neplatne nebo nevymahatelne, spolecnost WAL-MART neni povinna uznat jakekoliv podminky uvedene v teto dohod~ a zalobce rna vratit Mstku zaplacenou spolecnosti WAL-MART. 15. Zavazmi povaha dohody: Tato DOHODA je zavazna pro v~echny strany a pro jejich pnslu~ne dedice, spnivce, zastupce, vykonavatele, nasledovniky a porucniky a rna nabjt platnosti ve prospech vsech stran a jejich pffslusnych dedicli, spnlvcli, zastupcu, vykonavatelii, nasledovnikli a porucnikii.
4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 35 of 74 PageID: 10083

16.

rnZpCoalaeznlJhoetavbonrcddzain.oehunhcrtfaoAi,mzduSsajplT:eifbKTijjyaamAktonoyVeukDbtoYoOtluRivHtdOooOpVDhrDeoNOdAdAcHyhuNOajsfazDtakepUnjeioohc,pvioksukzrajoaonevmlaicaveezvletdoekorucduhzsDh,etuakOsvttHjecreriaOemn3jDyusZUosuapulcomouilnbeveetzce\niedneeosstnstrtvveairnvzWsauotmejAuetivo,LitsZ-eDMletooOsAnHtdeiRosOhpsTDoojdvlEeeyMh.Moai

ZALOBCI JE ZDE PREHODNOCENi A

UDELENA RADA, ZE MA ZVAZENi TETO DOHODY.

PRIMERENOU

DOBU

PRO

ZALOBCE STVRZUJE, ZE JE PROJEDNAL JI S PRAVNiM DOHODY V PLATNOST.

POVEREN PODEPSAT zASTUPCEM PRED

TUTO DOHODU A UVEDENiM TETO

PUNvBPRYROYAOSOTLLTEVOEEJ,ZNSVMIACTPOTOOEOZMLADNSESEZOCVTVNAzRSAoOVPOZASLCZETTNIHNJIOSi3TWEDUASZNZVLLAAEIS-LBvMEOiYUCRABVHARACETENSTZ.TAUfSSRTKTVOOUOAKTDBTUOOOc,HDAKDONSTODETEHUKROAYESDEPAUMRZAvAIVYMNZHPEENLOBRAADOELTYMONMSOUZUTSVRZITEiEC,ADIMEASNPBiEOTYE,

PRIJATO A SCHVALENO:

Podpis:

JiR

____':" " " '.
fPFAUSER

.

.:. f;i1~t-~4fiJ'" "/_ , f f1L

_

_

_

_

_

_ _

STAT _ SPRAVN~I~O-B_V_O_D _ _ _ _ _ _ _ _ __ _

)

)

Datum

v uddcooeksltuyamvaielzPanvRtauEzaDenEpiozdMdeepNvsOaynjUaod, fvennfmzeeem'p.pfmo:idteoempzsnnaoansmatiaoajpaorkadovpnfoiessnaoahbnaou,stojoe,bja.izzedjtnmaetoenDoOjeHOuvDeAdenb2oy0l1a

, se osobne ptedchozim stvrzena pro

PODEPSANO A ODPRfSAHNUTO oveteno mou rukou a razitkem kancelare.

PREDE

MNOU

dne

___

201_

stvrzeni

je

Me opravnenf vypr~f:

VEREJNY NOTAi'i - STAT- - - - -
(Jmeno notare v ti§tene podobe)

5

Case 2:03-/ .c. v-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 36 of 74 PageID: 10084
Beine cislo ovefovacf knihy OC/ - lt> ~, I 2011 ------------------------------------------------------()vefllji, ~ ~ -------------------------------------------------------------------------------------------Jifi Pfauser, oar. 23.02.1976, bytem Kamenny Ujezd, Delnicka 435, PSC 373 81,--------------jehoz osobnf toto:lnost byla prokazana platnym obcanskYill prUkazem, uznal pfede mnou podpis na teto listine za vlastni. ---------------------------------------------------------------------------------V CeskYch Budejovicfch 01.02.2011
~(fDtJl
Mgr. Robert Prochazka
no tar

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 37 of 74 PageID: 10085
David P. Murray WILLKIE FARR & GALLAGHER L P

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 38 of 74 PageID: 10086

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 39 of 74 PageID: 10087

~~.~.:-,~~~

.

·~

NFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE

0 ~AN.<lT1>.~.~ 0~0/¢:

This

Confidential

Settlement

Agreement

and

General

Release

.
("AGREEMENT'')

is

• K ntered into by and between Hana Pfauserova (''Plaintiff') and WAL-MART STORES, INC.

("WAL-MART") (collectively "Parties").

RECITALS

This AGREEMENT is made with reference to the following facts:

A. WHEREAS, Plaintiff brought .a Lawsuit against WAL-MART in the United States District Court for the District of New Jersey, that is designated as Zavala, et al. v. Wal-Mart Stores, Inc., Case No. 03-5309 (the "Lawsuit"); and
B. WHEREAS, WAL-MART denies the validity of Plaintiff's claims, denies that it was Plaintiff's employer, denies any obligation to pay Plaintiff wages or any other compensation, and denies that it is subject to any liability; and
C. WHEREAS, all wages allegedly due to Plaintiff are disputed; and
D. WHEREAS, the Parties wish to resolve their differences without resort to further litigation; and

E. WHEREAS, WAL-MART is willing to provide Plaintiff with certain considerations described below, which it is not ordinarily required to, provided that Plaintiff release WAL-MART from any claims Plaintiff have made or might make arising out of the Lawsuit in accordance with the Release set forth in Paragraph 5, and agrees to comply with the other promises and conditions set forth in this AGREEMENT; and
F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance of the pwpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff, .

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree to be legally bound by the following terms and conditions, which constitute full settlement of any and all disputes between them:
I. Recitals: The Parties acknowledge that the "WHEREAS'' clauses preceding paragraph I are true and correct, and are incorporated herein as material parts to this AGREEMENT.
2. Definitions: Throughout this AGREEMENT, the term "WAL-MART'' shall be defined to include the following:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 40 of 74 PageID: 10088

(A)

WaJ-Mart Stores, Inc., as related entity, operating and

we11 as any subsidiary, parent entity, franchise, or division

company, affiliated entity, of Wal-Mart Stores, Inc.;

(B)

Any officer, director, trustee, agent, encompassed by subparagraph (a).

employee,

or

insurer

of an

entity

3.

dtSheeedttulpcetrmioomennsistreeSsquummir:aeddAebsyhcleoarnwesi:ind,erWatiAonL-fMorAsRigTninaggrtheeiss

AGREEMENT and compliance to pay the fo11owing sums,

with Jess

(A)

tKaAosrtishrciekneaogesloxe(nt2epa2nab-ty3leam1p2aep5tnrt7oto1pro6nrfi)eatyt(weh'se;enarfetneyiednstahfaotneudrsa"cnPodlsatdisnotltoliafrfPssl(aC$ion2u0t in,f0sf0esl0"l.)e0.g0a)Al schIoa0Hu9n9bseeslh:maUaGdeabrepcaiiasysauabneldde

(B)

twFonAhvaieinntiehregrhttaoyiLogvmlagecdebrerieonnnpgrmgtaasyteSre(ent$aqat4alnulm,edAi1rga7oere6umIdd0.ns9el9ty0n9A)tods,scf,uhste.wahFlaohltlouilbTcrehbPheitilshswasmoiiunaulaeltmsiddabfoenfetuodapndnatteohdydneaiuslebeicqlxteshuetueudiadbnnsajtfdertdarecoepadtmdpmtrdoaotsahgpemievfrseisaeadagntbemeetray.sasoleupsdinuaxtrnosadndunoacdsnlllttaaapirtatmseoidsattahntooxedf

abWnodAth(L2(-)IM)a AaSnRtipToursilgahitaniloalnlporooffvDtihdisiesmtAhiseGsacRloEnWsEiidMtheErPaNrteiTojunadipidcpeernoetpxifreiiecadutetielnyd

this paragraph 3 after receiving
signed and dated by Plaintiff, by Plaintiff's Counsel.

ArfTeohGcrtieRhsivEAienEdGMtfRhrioEEsmNEpTMaPrlaE(agtiNhrneaTtpif"hsfEhawaflflliellolcnftbiqtvehteceboiDemtceaeomtmeds"uededeeseofcffreirnicpbetaeidyvdaeabi,nsltehtt,hheiuresenfptfoiialrrrseaat,fgtdareanarpdythh)nae.oftEneefrfeoWcftAitvhLee-DMbeaAnteeRfoTitfsthhsaiesst

4.

AaCnGodnR/osEirdEebMreaEnteiNofinTts:anPsdplaethicneitfiiffeufdlfuiniJidnmerespntatarnoadfgstrhaaepnhpdroa3mg,riesaeebssotcvhoean,ttasbihnueet dwfhooeurrledihnne.ort

receive the execution

monies of this

5.

autcadfhhcnbGnonoeeoaeykmdrmeitnnenrnotpesvacoee,erflneowmaxirrdtuaeipasnnpsllx,lledd,,toensiooRrcds,hsaanufcaeecannthmstlavotedheahueoraaerressuggse,beaseeeboqsellassatulyeo,hdoesinriegmfWfwdsereeaaCdAiiodnbsctlfLhsittca,asisteoo~ioct,tcrmrmnhttoMaase,ibnst,cmdsAo:oencoriAbRoebtsmlcmpuuIGTintiangtaeseRitnasdnwdseotdEi,tixoewfsoEcpndraniheMausustsn,hardst,niEsnd,iefeoguoagsNasrnatccer,fTsntirlrass,iciotf,,sabioomnshbemPrtsegei,odtllrrasaitaaoetteitynntaunbdhaeyndttyirbtidshsiofoni,faaifvn,re,Anttretxrfdohecw,GaopveronreeRoanrsrnLwelchsaEelsliacaehaEedabtwrticsiessMlecolssryedha(nauelEioftsrimrii,tNtt,neo,ehislacnTdseeww,nira)rdiohh,crsntibfoeeuhg,flestlmtaoihheh,ietnrntehesnsoagtree,satcrLh,aknqpiapocnncuaewcehseoixyhenptsswsemaoaau,,ccrlnrifeagtouttiannhestetonoedtstoessdrsrd,,r,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 41 of 74 PageID: 10089

occurrences that were directly or indirectly alleged, asserted, described, set forth or referred to in the Lawsuit, whether such allegations were or could have been based on common law or equity, or on any statute, rule, regulation, order, or law, whether federal, state, or local. The Released Claims include, but are not limited to, those arising under 42 U.S.C. § 1985(3) (civil rights); (2) 18 U.S.C. § 1962(c) (civil RICO), and 29 U.S.C. § 1962(d) (RICO conspiracy); (3) false imprisonment; and (4) 29 U.S.C. §§ 206-207 (Fair Labor Standards Act). This AGREEMENT also includes a release of all claims for attorneys' fees and costs incurred by Plaintiff or by Plaintiffs Counsel in connection with the Lawsuit and the Settlement of the Lawsuit.

6.

Tax Liability: Plaintiffunderstands that WAL-MART shall issue an IRS Fonn 1099 for

those portions of the payment specified in paragraph 3 ofthis AGREEMENT that are not

subject to withh')lding. In paying the amount specified in paragraph 3, WAL-MART

makes no representation regarding the tax consequences or liability arising from said

payment, including whether WAL-MART was Plaintiff's employer during the relevant

time period. Plaintiff understands and agrees that any and all tax liability that may be due

or become due because of the payment referenced above is her sole responsibility, and

that she wil1 pay any such taxes that may be due or become due. WAL-MART has no

monetary liability or obligation regarding payment whatsoever (other than delivering a

valid check in the sum referenced in paragraph 3 of this AGREEMENT to Plaintiff).

Plaintiff agrees to bear all tax consequences, if any, attendant upon the payment to her of

the above-recited sums. Plaintiff further agrees to hold WAL-MART hannless from and

against any tax or tax withholdings claims, amounts, interest, penalties, fines or

assessments brought or sought by any taxing authority or governmental agency with

regard to the above recited sums. In the event WAL-MART receives written notice that

any claim or assessments for taxes, withholding obligations, penalties and/or interest

arising out of this settlement are being or will be made against WAL-MART, WAL-

MART shall promptly, after receipt of such written notice, notify Plaintiff by letter sent

to Plaintiffs Counsel.

7.

Court Approval: Plaintiff agrees and authorizes Plaintiff's Counsel to move jointly on

Plaintiff's behalf for dismissal of any and all claims made by or on behalf of Plaintiff in

the Lawsuit. Tlie· motion shall be made in substantiaHy the same form as that in Exhibit

A of this AGREEMENT.

8.

No Assignment: The Parties represent and warrant that no person other than the

signatories hereto had or has any interest in the matters referred to in this AGREEMENT,

that the Parties have the sole right and exclusive authority to execute this AGREEMENT,

and that the Parties have not sold, assigned, transferred, conveyed, or otherwise disposed

of any claim, demand or legal right that is the subject of this AGREEMENT.

9.

Governing Law and Jurisdiction: This AGREEMENT shall be governed and

conformed in accordance with the laws of the state of New Jersey without regard to its

conflict of laws provision. In the event Plaintiff or WAL-MART breaches any provision

of this AGREEMENT, Plaintiff and WAL-MART affirm that either may institute an

action to specifically enforce any tenn or tenns of this AGREEMENT.

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 42 of 74 PageID: 10090

I 0.

afNunoryntAiismhdeimnfgiossroifoannthyeopfcuLornipasobisdieleirtaayst:ioannThfaoedrmPtiahsristsiioeAsnGabgRyrEeWeEMtAhLEat-NMnTeAistRhheaTrllothbfiesandAyeeGlmiRaeEbdiElioMtyr EcoNornTustnrnluoaerwdtfhuaelt

conduct ofany kind.

11.

Headings: The headings only, and the same shall such provision.

of not

the be,

provisions herein are intended for convenient reference nor be deemed to be, interpretative of the contents of

12.

sWAvacMugehGcArroabheRndLaegiEJs-wfeiMiEydacnM,iAaovmttoReEioorrtNTondmiTihsfmoaoiwedcsafdhikitflaAheilreienggbdaaereneudaiyvnet.nhamycolaileTrndairnyhtieuymtes:nwptloPeaeactaysTmtsr,ahtoiinweiedtsyxshiicfsaAtyeaitipcsmGntoktheRewniisvnoEroeAwiErtrwi.GlMnpergRdilEtagNiEacNneneEogTdMtthewhsamxEiaagtetNaincvoyteuThendtrielonsydbnooyAttfbbhtGeybheaheRenaaGyElplalfeEamonprPMterefayornWrEavtdaliNigeeAssdaiCTLo.i,non-husMrPatenoslvAwsafoeiRbhlknteoTehteoimdi.fnsf,f

13.

tPcIhnoaenrtetsiPrterapsurrteaeindetdsaa.tssiThoaahnliw:lsn1ATootlGheeb,RealEcacEoncognMrusdtEariguNneegTdotoahfgaaiastlsilnbfpseataeirtrnhtsmeneeo"agdfnortaithnifiatgset,erAa"dnGobdfRytnhEoaeEnt AdMstGrEbicReNttElwTyEefsMeohnraElaolNtrtTionar.gnaaelilynssctafasoenrsythboeef

14.

WhadpadvuopASboniaeanrrseAonGrdotlemtpveivovLdnRsrreerii,omfoa-srsEoMisviafoaidisrEaonibnrcAsltndMyiiaheielloeotRalioinieEosetnbfoTffygmfNolPnto.A:eahrtelTlcfahiaG,bdesTnaeiyiaRnnntdaAhbotatvyrEeeiGlensaefbrEhsyplmfR,eeiaMsbadctlEcsirohl,tLloEtEilteiosuobeaheNeMrgwernrsttTeuarEsovmelfone.u,oxaNfaefiatrlipstnincTthioTldhnfooviiondc(osrmaairahielnctntAbieprhltceddylrheeGloaee,etubeiefaogRdnnlncatereeiEhfktnnnxauoipEjndgentsnureoor,McderanArweweintltsEaPniGfldiorbeofNtlaeinRohadlrcnleTcroigeEtoynceiu)aetroeEtaostiiapnbpeasMfibrflnrmtaedhoolodEsen,eepvvfh.NdtliWiaaceifssTgcllucriilaAomaoralHieltsnnrnmLeiiheeoonnss-taswhtneouMhtlhedltrdaeeornaAlevxbnetlftsoeteoiRalecbnrtitnnhbr,memTiybetebtdoiheiitpeseidfpaaaldeaemirtltnrfiefomaomoiifognvnerenteueaydiicd,stopllntta,iaetbaetonptoisndrlednnooiaysgbvpstrgbbeatapatryiytootlaioooelidfpesdnrdbltuagh,tteibhhwctaoooyo5ehilan,sr,r

15.

shPBueaicirnrctsdie,eissansdgomarNsni,dnaaitnsuutdrrpaeaotsonosrifsg,Atnhrsgee.prirearenesdrmeenssephtnaeattcl:ilvtiieTvnsehu, iresehxAeteoicGrusthR,toeErasbEd,eMmsnueiEcnfciNitsetTosrsafsotehorasarc,sllh,abnpredaerpbatrsyienssiadgeninnndstga.totuivptheosen,ireeraexcshepceouctftoitrvhsee,

16.

nTtEhohnetetpirSreaelEriteTiAedTsgoLrhenEeerMamentEoey,nNrtaT:enpdSrTeUfhsueMilsnlytAdasteGuisopcRnersEirb,sEeepMddreoiEsmnNaipsnTaeyrssa,pegrotrisaroprfaohgorrbt3ehleiPgmtlhaaeteiinonetntsniftoofifrafeWcakAnAnyGoLwRk-iMElneEddAMgRmeEsTaNdttheoTattPobsleahhtiewnertehifeaifnns.

4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 43 of 74 PageID: 10091

connection with her decision to accept this AGREEMENT, except for those set forth in this AGREEMENT.
PLAINTIFF IS HEREBY ADVISED THAT SHE HAS A REASONABLE PERIOD OF TIME TO REVIEW AND CONSIDER TWS AGREEMENT. PLAINTIFF AFFIRMS THAT SHE IS AUTHORIZED TO SIGN THIS AGREEMENT AND HAS CONSULTED WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT. HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 3 ABOVE, PLAINTIFF FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE, AND RELEASE ALL CLAIMS SHE HAS OR MIGHT HAVE AGAINST WAL-MART. ACCEPTED AND AGREED:

By:

HANA PFAUSEROVA

Date

STATE OF ____________ ) COUNTY O F - - - - - - )

BEFORE ME, the undersigned authority on this _ _ day of

201 _,

personally appeared

, known to me to be the person whose name is

subscribed to the foregoing instrument and signed in my presence and swore upon oath this

AGREEMENT was executed for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO BEFORE ME on this _ _ day of to certify which witness my hand and seal of office.

201_,

My Commission Expires:

NOTARY PUBLIC- STATE OF - - - - -
(Printed Name of Notary)

s

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 44 of 74 PageID: 10092
J
Beine cislo ovei'ovaci knihy OC/ _,_ i'G" " /2011 --------------------------------------------------------
()vefuji, ze pauli -------------------------------------------------------------------------------------------------Hana Pfauserova, oar. 29.11.1976, bytem Kamenny Ujezd, Delnicka 435, PSC 373 81, ------jejiz osobnf totoZn.ost byla prokazana platnym obCau1sk.Ym pnlkazem, uznala prede mnou podpis na teto Iistine za vlastni. --------------------------------------------------------------------------------------V Ceskych Budejovicich 01.02.2011 -----------------------------------------------------------------------

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 45 of 74 PageID: 10093
ON BEHALF OF WAL-MART:
~~'/f.
David P. Murray WILLKIE FARR & GALLAGHER

(~00~ ~ Case~ 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 46 of 74 PageID: 10094

*~~ V~EOBECNE Pt\KC>"~c ~ ·.·lvcrr!-~ ~4l RNA DOHODA 0 VYROVNANi A

VZDANi SE NAROKU

'

Tato duverna dohoda o vyrovnimi a v5eobecne vzdanf uzavrena mezi Hanou Pfauserovou (,,Zalobkyne") a spole~nostf (,WAL-MART") (dohromady ,strany").

se naroku (.,DOHODA") je WAL-MART STORES, INC.

PREAMBULE

DOHODA je uzavrena s odkazem na misledujici fakta:

A.

0oOZ3zAkn-r5aTe3~sI0neM9nfhaC(oj,,OasoksoouZudZadnlaufovbraikSzlyaepnnoaeij"ek)pno;oyladcvhaelrassutsasotuuspdnopilreocianlfooesdbteunWUaplnr~of MtiaorkstpreoSlsteo~Nrneoessw,tiInJcWe.r,sAcefLys,-loMkpAtneRrpaTadjueu

B.

ZATfMCO spolecnost WAL-MART popfra ie byla zam~stnavatelem ialobkyne, popira ialobkyni nebo jakehokoliv jine nahrady odpovMnosti; a

platnost naroku ialobkyne, popira, jakekoliv poviiUlosti zaplatit mzdy a popini, ze podleha jakekoliv

C. ZATiMCO v~echny mzdy udajne dluZn.e Za.lobkyni jsou sporne; a

D. ZATIMCO si strany pfejf vyre§it sve rozpory bez vedeni dal§iho sporu; a

E.

tuvZnZevzAtaAonelhodeTrDbseafkednOMnyueHynhCeoOpiOaoDvzlpoEbssoba;apdkvonaslyioteanu~vfsncponnioseitl5ibee,oe,WanAomcssLoootuz~hhoMWlunaAesAfvnR,LfzTnz-MeibkjeneAdtoonRodueTcrt:hlfzopejtjoaniiknsaaoyeducposdholvnkisabfoknhylyooitva,nio'pizumzoated\nrmzoipakfrlpnioeiok,dbdypklokyeutknevvliraeyedduveuracn,bzieaytonzlvyuei

F.

ZATIMCO DOHODA fe§f spor bona spraved1ivych pracovnich podmfnkach, 29 pfimerena k ialobkyni,

fide pi'i U.S.C.

podpofe §§ 201 et

smyslu zakona seq., a je cestna

o a

NYNf TUDIZ pn zva:Zeni vzajemnych funluv a ceiUleho zvazeni, prijeti a dostate~nosti, ktere jsou zde jsou pravn~ vazany nasledujfcimi podmfnkami, ktere sporii mezi nimi:

slibii zde obsa:Zenych a jineho dobreho a potvrzene stranami, strany souhlasf, ze vytvareji uplne vyrovnani jakychkoliv

I.

Preambule: Strany stvrzujf, ze vety a spnivne ajsou za~len~ny do tohoto

,ZATfMCO" predchazejici odstavci 1 jsou pravdive dokumentujako zavazne Msti teto DOHODY.

2.

Definiee: V m1sledujfci:

ramci

teto

DOHODY

termin

,WAL-MART"

je

definovim

tak,

aby

zahrnul

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 47 of 74 PageID: 10095

(A)

spWproiadllen-McdneaonrstotiuSWtojareled-sMn, oaItnrktcuS.,,tosrateefsjin,lieIancjcia,.;kaoprdocveofzinnfou

spolecnost, materskou spoleenost, jednotku, franchisu nebo divizi

(B)

Jakehokoliv pfedstavitele, reditele, nebo pojistitele jednotky zahmute do

elena spravnf rady, pododstavce (a).

zastupce,

zamestnance

3.

ouCdcapinsoteckneaytcpvhoy,:rls.oapvdonolvaean~nni:oysPztAfiWkzoAvnaeLzm-eM:niAzRaTurseoluehmlapsio,dtpeiszuapteltaotf

DOHODY misledujfci

a doddenf slibu zde castku ponitenou o

(A)

FjZJaoeakd.lroonmbopkurfylaianmzreoeI:v0rGae9npa9erlcarpnitaboapaabl}vaK'tetkrvivycyykd~aoiann(da2vvk2alp-ca3fedi1tsyi2ltu5ins§7ainc1ep6mdr)aov(lrdanoanfzlhiseao(jh2ezu0na;s0a,t,0up0pn,ci0ve0,niaUztSaosDtpu)npmicveunsfZfm:abulojtbzaksspytnluaept"nc)a.i

(B)

frcpse(Soa4eodzosdesmut1larkhe7ahyzr6dlunnoz,y.9nafdm0a.zekacocUtanaeuSasndstDkaato4)jantarnovnsfuezpamarpvabpyprvyl~aaoeticcdisiaelcpidpntvlyiaaa)'etvt'cnsvkthcailisaaljfmsdpacedkr.salnoltc1aFooZoovsdsn.rrenosmadkuiczmouhkUdluda!nrelpeodso1nbaad0itknim9yze~9naienilzsorketanziaaemscdnthbzaoe.:dnYlyanotT,ravuvaekytmntaodeyiardrmanoceacvsivobactdudkhp~deafketsijoaskpltodauiondjsdcfenlcerneeeinihcmttomah\i

aoSbp(2do)rletueesnntaoi(nslto)voWerniAgi i0Ln-asMlkuoAnte~RteoTnfDmfOizaHenOpfoDssYkuyjsmtnpooiuu'ftsvluyUshhnorytamodvuepnosedtappnirosaevvmenniaomudzaavtsetmutopmzceetomstrozaandlysotabZvk:acylino~b3.kypnoe

o(nT,be.addjtsaroZotuuDimoOddlvHuisZaOtnoloD.uebpAkneynetubnidoevfvzsp§pnlealecatmnhtnonaesy,vt"vsaetZuocvuideppodiotepdnvsoeapbjnlyaaektpnvoootpsotrdmvaanttzouiadodvednsnsettoapvuvo}pct'ehei)no,.idcyovuspvpleoadltenecnonesotvsttetotWomAtDoLO-oMHdsOAtaDRvYcTi

4.

Uvazenf: Zalobkyne odstavci 3 vyse, ale obsaienych.

cbape a souhlasf, Ze nezfska po vstoupenf v platnost teto

penize a/nebo DOHODY a

vyhody uvedene v vyplneni slibu zde

5.

cnvp(pzspVijarpnoeiroanbasrykzpvoeyme,uas,oscktazcta,bbhl'naiuaieypn'jsdepncecreomeoneo,hdu,zetebodavvnvavtdndes,e}nzvfaec'Zfshdsovchmep:oahlkat,ao.ol,nuifovkjdiy,bfezatna,enesaskoraefpnvJetdidrysennse,a,bnakadddvuevozrmeubzdozwddeooedknaiestuycuezkuleven:itrv,tyeiieoVz,ayrdvaselvayynlotdiamjmmkezbulzbouoyi,uoeo,nhv,njhkaueatolpstrvn,yeouaosayrnupvbtoez:esvoiYasdraljilomtepsskeau,ueooccocjppnvseusiaiplmocet'aisidridsntiaztnlnnv,evuvoeoWocamcbsvsekzetoaAfeeoltna,konlLzynduuiaz-p,oitvMpmeonoasaletvtoaAztm'DbietckjneoRtsiOnuonboeT,caoH,unDaksvOzcpstzt}OieetefnD,'ifhrHahvteosOfmmoseOmdbeUdeiDvctyakao,hsnjllmYayiebenndmni)bl,ueu,yaooioprckzbdolunhtaaakevkdestryfozuztaelavaln,njoavn}vavebptn'yamdeayrimzpaalnclenkjyvryhui,eou,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 48 of 74 PageID: 10096

bud' pffmo nebo neprimo Udajne, uplatnovane, popsane, uvedene nebo oznaeene v soudnim rizeni, at' byla nebo mohla bYt takova tvrzeni zalo:Zena na obecnem pravu nebo spravedlivem miroku nebo jakemkoJiv narfzenf, smemici, zakonnem pfedpisu, fadu nebo zakonu, at' l1Z federa.Inim, statnfm nebo mistnim. Anulovane miroky zahrnuji, ale nejsou omezeny na ty, ktere vznikajf dle 42 U.S.C. § 1985(3) (oManska pniva); (2) 18 U.S.C. § I962(c) (obcanske pnivo RICO) a 29 U.S.C. § 1962(d) (zJocinne spolceni RICO); (3) neopnivneneho uvezneni; a (4) 29 U.S.C. §§ 206-207 (zakon o spravedlirych pracovnich podminkach). Tato DOHODA take zahmuje vzdanf se vsech pohledavek v souvislosti s poplatky a naklady na pravnfho zastupce vzniklych :Zalobkyni nebo pravnfmu zastupci zalobkyne v souvislosti se soudnim pffpadem a vyrovnanim soudniho pffpadu. 6. Danova odpovMno$t: Zalobce chape, :Ze spolecnost WAL-MART vyda fonnular IRS 1099 pro ucely teto platby uvedene v odstavci 3 teto DOHODY, ktere nepodlehaji danove sr~e. Pn vyphicenf castky uvedene v odstavci 3 spolecnost WAL-MART nevznasf namitky v souvislosti s danovymi dusledky nebo odpovMnosti vzeslou z fecene platby, vcetne toho, zda spolecnost WAL-MART byla zamestnavatelem zalobkyne behem pffs1u§ne doby. Zalobce chape a souhlasf, :Ze jakakoliv danova odpovednost, ktera je povinna nebo se povinnou stane kvilli platbe uvedene ryse, je jeji v)'hradni odpovednostf a Ze zaplatf jakekoliv dane, ktere mohou bYt dlu:Zne nebo se dlufnymi stanou. Spolecnost WAL-MART nema zadnou financni odpovednost nebo povinnost v souvislosti s platbou (jinou nez dodani :Zalobkyni platneho seku na castku uvedenou v odstavci 3 teto DOHODY). Zalobkyne souhlasi, ze ponese vsechny daiiove nasledky, pokud se nejake vyskytnou, doprovazejfcf platbu ryse uvedenych castek. Zalobkyne dale souhlasf, :Ze uchranf spolecnost WAL-MART od jak)'chkoliv stf:Znostf souvisejfcich s danemi nebo naroky na danove srazky ze mzdy, castkami, 'Uroky, pemilemi, pokutami nebo poplatky vznesenymi nebo zadan:Ymi ze strany danoveho Ufadu nebo vladni agentury s ohledem na ryse uvedene Mstky. V pripade, :Ze spolecnost WAL-MART obddf pfsemnou zpnivu, Ze jakykoliv narok nebo v)'mera danf, zavazky vuci srillam
dani ze mzdy, pokuty a/nebo "Uroky vze~le z tohoto vyrovnanf jsou nebo budou ucineny
proti spolecnosti WAL-MART, spolecnost WAL-MART okamzite po prijeti takove pfsemne zpnivy ozmimi toto zalobkyni prostfednictvim dopisu zaslaneho pravnimu zastupci :Zalobkyne.

7. Soudni schvaUenf: Zalobkyne souhlasi a pov~fuje sveho pravniho zastupce, aby spolecne postoupili jmenem Zalobkyne staten£ vsech naroku ucinenych jmenem ~lobkyne v ramci soudniho ffzeni. Navrh rna b)'t ucinen v podstate stejnou fonnou, jako je v Pfiloze A teto DOHODY.

8. Neprevoditelnost: Strany stvrzuji a zarucuji, :Ze zadna osoba, jina, nez strany, ktere podepsaly tuto dohodu, nemely nebo nemaji zadny zajem na zalezitostech uvedenych v teto DOHODE, :Ze strany maji v)'hradnf pravo a exkluzivnf opravneni uvest v platnost tuto DOHODU a :Ze strany neprodaly, nepostoupily, nepfevedly, nepi'edaly nebo jinak nenalozily s narokem, po:Zadavkem nebo zakonnym pravem, ktere je pfedmetem teto DOHODY.

9.

Rozhodne pravo a jurisdikce: Tato DOHODA rna bYt rizena a bYt v souladu se zakony

statu New Jersey bez ohledu na ustanovenf kolize pravnich norem. V pfipade, ze

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 49 of 74 PageID: 10097
:Zalobkyn~ nebo spolecnost WAL-MART poru~i jakeko1iv ustanoveni teto DOHODY, zalobkyne a spolecnost WAL-MART stvrzuji, Ze bud' mohou podat :Zalobu na zvhi§tni vynucenf podminky nebo podrninek teto DOHODY.
I0. Neprijeti odpovMnosti: Strany souhlasf, Ze ani tato DOHODA, ani poskytnutf zietele na tuto DOHODU nema byt povatovano nebo vytvoreno kdykoliv pro jakykoliv ucel jako pfijeti ze strany spolecnosti WAL-MART jakekoliv zaruky nebo nezakonneho vedeni jakehokoliv druhu.
11. N!zyy paragrafu: Nazvy paragrafii ustanoveni uvedenych v teto dohode jsou zamysleny
pouze jako vhodne odkazy a ty same nernaji byt nebo nejsou urceny, aby byly interpretacni v souvislosti s obsahem takoveho ustanoveni.
12. Zmena dohody: Tato DOHODA nema bYt pozmenovana, odvolana, menena nebo upravovana, a to jakymkoliv zpusobern, s vyjimkou pisemne zmeny stvrzene vsemi stranami. Zalobkyne souhlasi, Ze nevznese zadnou sti:blost, a to kdykoliv nebo kdekoJiv, Ze tato DOHODA byla jakkoliv ustne upravena. Zadne zfeknutf se ustanoveni teto DOHODY nebude platne, pokud nebude v pfsemne fonne a podepsano stranou, proti ktere je takove zfeknuti namifeno. Strany stvrzujf, ze pouze hlavnf pravni zastupce spolecnosti WAL-MART rna povefeni pozmenit tuto DOHODU jmenern spolecnosti WAL-MART.
13. Vyklad: Jazyk vsech casti teto DOHODY rna bYt ve vsech pffpadech vytvoren jako celek, podle sveho cestneho umyslu, a ne vyloZene pro nebo proti jakekoliv ze stran. Tato DOHODA byla projedmina s a rnezi pravnirni zastupci stran a nerna b}'t vykladana proti ,stylizatorovi mivrhu" teto DOHODY.
14. Oddelitelnost: Strany ryslovne stvrzujf a souhlasf, ze ustanoveni teto DOHODY jsou
pfimefemi a vymahatelmi. Presto, pokud jakakoliv cast nebo ustanovenf teto DOHODY
(vcetne, bez souvislosti na omezenf, jak:ekoliv Msti nebo ustanovenf jakekoliv casti teto DOHODY) je shledano jako nezakonne, neplatne nebo nevymahatelne u soudu pnslusne jurisdikce a nemuu bYt upraveno, aby bylo zakonne, platne nebo vymahatelne, zbytek teto DOHODY nema b}'t ovlivnen takorym urcenirn a rna byt platny a vymahatelny v plnem rozsahu, ktecy je povolen zakonem, a uvedena nezakonna nebo nevyrnahatelna cast nebo ustanoveni nerna byt posuzovana jako Mst teto DOHODY. V rozsahu ustanovenf uvedeneho zde, ktere souvisi se skoncenfm soudniho rizeni ze strany :Zalobce nebo vseobecnym zfeknutim se narokli popsanych v odstavci 5 vyse, je povafuvano za nezakonne, neplatne nebo nevymahatelne, spolecnost WAL-MART neni povinna uznat jakekoliv podminky uvedene v teto dohod~ a ialobce rna vratit Mstku zaplacenou spolecnosti WAL-MART.
15. Zavazna povaha dohody: Tato DOHODA je zavazna pro vsechny strany a pro jejich pfislusne dMice, spravce, zastupce, vykonavatele, nasledovniky a porucniky a rna nabYt platnosti ve prosp~ch vsech stran a jejich pffslusnych dedicu, spravcu, zastupcli, vykonavatelu, nasledovnikli a porucnfkU.
4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 50 of 74 PageID: 10098

Cela dohoda: Tato DOHODA ustanovuje celou DOHODU mezi stranami teto dohody a

pine nahrazuje jakykoliv predcMzejici zavazek ze strany spolecnosti WAL-MART vi'lci

Zalobkyni. cASTKA VYROVNANi popsana v odstavci 3 Zalobkyile stvrzuje, Ze

nespoleM na tvrzeni, sliby nebo jejfm rozhodnutim pnjmout tuto

dohody jakehokoliv DOHODU, krome

druhu jf ucinene v souvislosti s tech, ktere jsou uvedene v teto

DOH ODE.

ZALOBKYNE JE ZDE UDELENA RADA, ZE MA PREHODNOCENi A ZVAZENi TtTO DOHODY.

PRIMERENOU

DOBU

PRO

ZALOBKYNE STVRZUJE, ZE JE PROJEDNALA JI S PRAVNiM DOHODY V PLATNOST.

POvERENA PODEPSAT TUTO DOHODU ZASTUPCEM PRED UVEDENfM TtT

A O

PNUvBPRYORYAOTSOLL:ETOVEEI,NZVMSACIPTOTOOOtZMDLANSSEEZOTVCVANZRSAVDOPOZCALSZEITTNHNI3IOSTiWEDZUSAANZVLLALEIS-OBVMEYUBiCARKVHRAAYtTSNTNz.TiUAESRTKTSOOUAVKTDOTUOOBC, HOAKDODSTODNTEHUEKROYESADEUAMPzARAvVJYMNHZPEELNORBAADOETLYMNOMOUSZUTSVRZTI.EiE,CDAIAMESPNBiEOTYE,

PRJJATO A SCHVALENO:

Podpis:

~W'~~fi/¢/

HANA PFAUSEROV

STAT _ _ _ _ _ _ _ _ _ __ SPRAVN~f~O~B-V_O_D

)

)

Datum

uddcooeksltuyamvaielPzanvRtauE:l.aDenpEfozdMdeepNvsOaynjUaod, rvennfm:le.eem'p.pnomtdoeempzsnnaoamsmtiiaoajpaonkdiovpnroiessnaoahbnaou,stooje,bja:ilz.edjtnmaeteonDo OjeHOuvDeAdenb2oy0l1av_s,ptvrserezdeconhsaoozbpinrmoe

PODEPSANO A ODPR.iSAHNUTO ovefeno mou rukou a razitkem kancelafe.

PREDE

MNOU

dne

___

201~.

stvrzeni

je

VEREJNY NOTAR- STAT- - - - -

Me povefeni vypcli:

(Jmeno notate v ti§tene podobe)

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 51 of 74 PageID: 10099

Betne cislo overovaci knihy OC/ · - tfJ-- /2011 --------------------------------------------------------

HOvaentaujPi,fazeuspearnoiv-a-,--o-a--r-.-2--9-.-1-1--.1--9-7-6--,-b--y-t-e-m---K--a--m--e-n--n-y--U--j-e--z-d-,--D--e-l-n-i-c-k--a--4-3--5-,--P--S-C---3-7--3--8--1-,----------------

jejiz osobni na teto listine

toto:Znost za vlastni.

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V Ceskych Budejovicich 01.02.2011 -------------------------------------------------------------------

n

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 52 of 74 PageID: 10100
David P. Murray WILLKIE FARR & GALLAGHER

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 53 of 74 PageID: 10101

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 54 of 74 PageID: 10102

CONFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE

This Confidential Settlement Agreement and General entered into by and between Carlos Tello ("Plaintiff'') and ("WAL·MART") (collectively "Parties").

Release ("AGREEMENT") is WAL·MART STORES, INC.

RECITALS

This AGREEMENT is made with reference to the following facts:

A.

WHEREAS, Plaintiff brought a Lawsuit against WAL·MART in the

States District Court for et al. v. Wal-Mart Stores,

the District of New Jersey, that is designated Inc., Case No. 03-5309 (the "Lawsuit"); and

as

United Zavala,

B.

wcWoamHs pEPelRnaEisnaAttiifoSfn,'s,WaenmAdpLdl-oeMyneiAer,sRdtThenadtieeinstiiaesnssytuhobebjevlciagtlaitdotiioatynnytooflipPaablyailiiPntyltai;fifan'nstidfcflawimagse,sdoerniaensythotahteirt

C. WHEREAS, all wages allegedly due to Plaintiffare disputed; and

D.

WHEREAS, the litigation; and

Parties

wish

to

resolve

their

differences

without

resort

to

further

E.

WHEREAS, considerations

W~MART is willing described below, which it

to provide Plaintiff with certain is not ordinarily required to, provided

that Plaintiff release WAL·MART make arising out of the Lawsuit

from any claims Plaintiff have made in accordance with the Release set

or might forth in

Paragraph 5, and agrees to
forth in this AGREEMENT;

comply and

with

the

other

promises

and

conditions

set

F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance ofthe

purpose of the Fair Labor reasonable to Plaintiff,

Standards

Act,

29

U.S.C.

§§

201

et

seq.,

and

is

fair

and

NOW THEREFORE, in consideration of the herein, and other good and valuable consideration, hereby acknowledged by the Parties, the Parties agree and conditions, which constitute full settlement of any

mutual covenants and promises contained the receipt and sufficiency of which are to be legally bound by the following terms and all disputes between them:

1.

aRreectirtuaelsa: nTd hceorPreacrtti,easnadckarneoiwnlceodrgpeortahtaetdthheer"eWinHasEmREatAerSia"lcplaarutssetsoptrheicseAdiGnRg EpEarMagErNapTh. 1

2.

Definitions: to include the

Throughout following:

this

AGREEMENT,

the

term

"WAL-MART''

shall

be

defined

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 55 of 74 PageID: 10103

(A)

Wal-Mart Stores, Inc., as related entity, operating

well as any subsidiary, parent entity, franchise, or division

company, affiliated entity, of Wai-Mart Stores, Inc.;

and

(B) Any officer, director, trustee, agent, employee, or insurer of an entity encompassed by subparagraph (a).

3.

Settlement Sum: As consideration for signing this the promises made herein, WAL-MART agrees deductions required by law:

AGREEMENT and compliance to pay the following sums,

with less

(A)

aKAsrsircienkagosloe(n2pa2ab-y3lem12ae5tnt7to1ro6nf)etyw(h'seenrfeteyienstahfaotneudrsa"cnPodlsatdisnottliolfafrP'ssla(C$ino2tu0inf,0fs'0es0l"l.e)0.g0a)Alsch1oa0ull9n9bseeslh:maalGldebarepcaiisaysauabneldde

to the extent appropriate; and

(B)

An aggregate shall be made

amount payable

of Six thousand as damages based

eight hundred DOLLARS ($6,800.00), on claims of overtime pay allegedly due

to Plaintiff and liquidated damages pursuant to the Fair Labor Standards Act.
This amount is subject to federal and state tax withholding requirements, which

will be deducted from this amount and paid to the government A 1099 shall be

issued to the extent appropriate.

abWnodAth(L2(-)1M)aAaSnRtipToursilgahitaniloalnlpropoffvDtihdiisesmtAhiseGsacRloEnWsEiidMtheErPaNrteiTojunadipidcpeernoetpixfreiiecadutetielnydtbshiiygsnPpelaadrianagtnirdfafp'dshaC3teodaufntbesyrelrP.elcaeiinvtiinffg,

ArfTeohGcritehsRivEAienEdGMtfRhriEoEsmNEpMTaPralE(agtNihrnaeTtpifh"sfEhawaflfllilelolcnftboitvehtceeboeiDmtceaeomtmeds"uededeeseofcffreirnicpbetaiedyvdaeab,isnltehtt,hehuriesenfptfoiialrrrseaat,fgtadreanarpdythhn)ae.oftEneefrfeoWcftAitvhLee-DMbeaAnteeRfoiTtfsthhsaeisst

4.

Consideration: Plaintiff understands and agrees that he would not and/or benefits specified in paragraph 3, above, but for his AGREEMENT and the fulfillment of the promises contained herein.

receive the execution

monies of this

,•

5.

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2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 56 of 74 PageID: 10104

occurrences that were directly or indirectly alleged, asserted, described, set forth or

referred to in the Lawsuit, whether such allegations were or could have been based on

common law or '"quity, or on any statute, rule, regulation, order, or law, whether federal,

state, or local. The Released Claims include, but are not limited 42 U.S.C. § 1985(3) (civil rights); (2) 18 U.S.C. § 1962(c) (civil

to, those arising under RICO), and 29 U.S.C.

§ 1962(d) (RICO conspiracy); (3) false imprisonment; and (4) 29 U.S.C. §§ 206-207

(Fair Labor Standards Act). This AGREEMENT also includes a release of all claims for

attorneys' fees and costs incurred by Plaintiffor by Plaintiff's Counsel in connection with

the Lawsuit and the Settlement ofthe Lawsuit.

6.

Tax Liability: Plaintiffunderstands that WAL-MART shall issue an IRS Fonn 1099 for

those portions ofthe payment specified in paragraph 3 of this AGREEMENT that are not

subject to withholding. In paying the amount specified in paragraph 3, WAL-MART

makes no representation regarding the tax consequences or liability arising from said

payment, including whether WAL~MART was Plaintiff's employer during the relevant

time period. Plaintiff understands and agrees that any and all tax liability that may be due

or become due because of the payment referenced above is his sole responsibility, and

that he will pay any such taxes that may be due or become d1,1e. WAL~MART has no

monetary liability or obligation regarding payment whatsoever (other than delivering a

valid check in the sum referenced in paragraph 3 of this AGREEMENT to Plaintiff).

Plaintiffagrees to bear all tax consequences, if any, attendant upon the payment to him of

the above-recited sums. Plaintiff further agrees to·hold WAL-MART harmless from and

against any tax ·or tax withholdings claims, amounts, interest, penalties, fmes or

assessments brought or sought by any taxing authority or governmental agency with

regard to the aboye recited sums. In the event WAL-MART receives written notice that

any claim or assessments: for taxes, withholding obligations, penalties and/or interest

arising out of this settlement are being or will be made against WAL-MART, WAL-

MART shall promptly, after receipt of such written notice, notifY Plaintiff by letter sent

to Plaintiff's Counsel.

7.

Court Approval: Plaintiff agrees and authorizes Plaintiff's Counsel to move jointly on

Plaintiff's behalf for dismissal of any and all claims made by or on behalf of Plaintiff in

the Lawsuit. The motion A of this AGREEMENT.

shall

be

made

in

substantially

the

same

fonn

as

that

in

Exhibit

8.

No Assignment: The Parties represent and warrant that no person other than the

signatolies hereto had or has any interest in the matters referred to in this AGREEMENT,

that the Parties have the sole right and exclusive authority to execute this AGREEMENT,

and that the Parties have not sold, assigned, transferred, conveyed, or otherwise disposed

ofany claim, demand or legal right that is the subject ofthis AGREEMENT.

9.

Goveming Law and Jurisdiction: Tiris AGREEMENT shall be governed and

confonned in accordance with the laws ofthe state of New Jersey without regard to its

conflict of laws provision. In the event Plaintiff or WAL-MART breaches any provision

of this AGREEMENT, Plaintiff and action to specifically enforce any term

WAL-MART afflrm that either or tenns ofthis AGREEMENT.

may

institute

an

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 57 of 74 PageID: 10105

10.

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11.

Headings: The headings only, and the same shall such provision.

of not

the be,

provisions herein are intended for convenient reference nor be deemed to be, interpretative of the contents of

12.

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13.

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14.

hWdapadvuopASbionaeanrrseAGonotdrlemvpeitvovnLdRrsreieirfmo,oa-srEsoMiasvioafiidrEsoabinnrcAstlnMidiayehiellotoeRalioniiEetsoebfnfofTygomNlftnP:roe.AahctleTlfaihaebG,dsTnaaie1ynRbndaAht.J&otratyEe.ieeGSnf~abEr·sfph.yfmRee'MiabasdctEclsroihl,tLoEtlEiteliosubohaeeNMerwrengrsttTeuarEsoevmofnel.ux,oaNafefiaprlisnttioniTtholdTnhfooivinocd(osrmaaairhielncttnAbeiprlhtceddlyrheGeeloa,euetbeaiefoRgdnlncnatereeiEhknftnnxauopinjdEgentsunrooe,rMcdreanrAwweientlstEnPaiGlfidorebfotlNaeihonRadlrcnleo1ricgetEoynceui)eateortEatosiiapnpbasefMibrftmnrladehoolodEsen,pevevfh.NdtlWiiaaceisfsgcTllurciilaAoamroalHieltsnnrnmLeiieheoonnss-taswhtneouhtMlhedtldareeoranAlevxbnetlftsoeteoiRlaecbtnritnhmbnrm,eTiybetetbodiiheitpesidepfaaaldeaemirlttnrfeioafmomioifognvrneeneteauyidic,dslptlonta,tiatabeetonotpnisrdeldnnooaiysbgpvstrgbbetpaaatrytiyootlaioooleidfpesrndlbdtaughtt,iebhhwactoooyo5ilhean,,srr

15.

hPsBueaicirnrctsdie,eissansdogmarNsni,ndaaitsnuutdrrpaeaotosonsrifsg,Atnhrsgee,pirrearenesrmdeenssephtnaeattcl:ilvtiieTvnsehu, iresehxAeteoicGrusthR,toeErasbEd,eMmsnueiEcnfcNiitseTtosrsafsotehorasarc,sllh,anbpredaerpbatrsiyenssiadgeninnndstga.totuivptheosen,irereaexcshepceouctftoitrvhsee,

16.

nTtEhohnetetpirSreaelrEiteTiAedTsgoLrhneEeerMamentEoey,nNrtaeT:npdrSTefUshueMilnslytaAdtseiGuospnRcersEri,bsEepeMddroeEmisnNaispnTeaysrs,apegortisrroaarfpoghorrbteh3leimgPthaletaeniiotnesntniotofifrffeaaWcnAkAynGLokRw-inEMldeEAdMmgReaETsdNettoThtaoPtblehahtiiewnmtheifaeifnsn.

.... 4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 58 of 74 PageID: 10106

coMection with his this AGREEMENT.

decision

to

accept

this

AGREEMENT,

except

for

those

set

forth

in

PLAINTIFF IS HEREBY ADVISED THAT HE OF TIME TO REVIEW AND CONSIDER TIDS

HAS A REASONABLE AGREEMENT.

PERIOD

PLAINTIFF AFFIRMS THAT HE IS AGREEMENT AND HAS CONSULTED EXECUTION OF TIDS AGREEMENT.

AUTHORIZED TO SIGN THIS WITH AN A'ITORNEY PRIOR TO

'•l~9"I.

,Y.

·..

',

ACWAPHRGOBAAOANOVIVMISIVNNIEIEDSG,S,TEES· REESPWALLTAAEATTNLCILIDON-ETMNTT,EA,IAODFRNFERTTDNE•OTFCRREEEEREIXLVESEEELACYITSUNEHTTAEEOANSLTDUTLHMIIDCKSSLSNAAAONAGIMWDGRSIERBNEEEHGMENELMEEYHFNE,AINTTS,ATSTONINODIRNPTFMAAUEIRNFGLATDFHEGIITLNRRLGHAADTPTHVUHOEEE3 ACCEPTED AND AGREED:

iti·6Nillfl
'cfnclaa

By:

'LlClJ. fie.
•rr•si~

•

STA1EOF

~6~A

)

COUNTY OF fA~'-co

)

JetJ-·f~,;2.0q Date

AspueGbrssRocEnriEabBlMelyEdEFtaNOopTRptheEwaeraeMsfdoeErxe(,egAcoItuUihnte.egodsuifnnosdTrte6rt<urhsUmei-gQpenunertdpaonas,deustkhsaniognordniwteycndonoitnosnidmmtehryeaistpitoro_ensbtelhneLecretehidenaaneydpxepsrorswefosonsr8eeAdw.uJhBpoofsUneI

2011, name is oath this

to

SUBSCRIBED AND SWORN TO BEFORE certify which witness my hand and seal of office.

ME

on

this

1..!:_

day

of

"iJJ£tW

20 IL

My Commission Expires:
5

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'*~'ABIO PUBLIC().,; 1 4.1'LIZ:OQ, 'U·B~

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 59 of 74 PageID: 10107
ON BEHALF OF WAL-MART:
f/ rv'I'J_ P-
David P. Murray WILLKIE FARR & GALLAGHER

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 60 of 74 PageID: 10108

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf ofthemselves and all others similarly situated,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-5309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF SETTLING PLAINTIFFS

Plaintiffs Felipe Condado, Octavio Denisio, Eunice Gomez, Victor Zavala Torres, Jiri Pfauser, and Hana Pfauserova ("Settling Plaintiffs") and Def~ndant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Settling Plaintiffs.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced an<:i Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

,Ct ase 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 61 of 74 PageID: 10109

Fair Labor Standards Act ("FLSA") and false imprisonment counts.l At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August I1, 20IO and October I, 2010. Pursuant to the Court's instructions at the August 1I, 2010 settlement conference, on August 27,2010 Wal-Mart · provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs.
See Exhibit B (August 27, 20 I0 letter from Murray to Hon. Madeline Cox Arleo attaching
settlement correspondence). On September 27, 2010 plaintiffs' counsel reported acceptances of the settlement offers by Felipe Condado, Octavio Denisio, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, and Victor Zavala Torres. See Exhibit C (September 27, 20 I0 Letter from Linsey to
Hon. Madeline Cox Arleo).2 Plaintiffs' counsel reported that named plaintiffs Petr Zednik and
Teresa Jaros rejected the respective settlement offers addressed to them. See id.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (I) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko, and (2) a payment to plaintiff in the amount ofthe respective plaintiff's alleged overtime damages,
see Exhibit B (documenting calculation of alleged damages for each Settling Plaintiff). (The
$20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of$20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.

and

The civil rights count RICO conspiracy counts

was dismissed with prejudice on October were dismissed with prejudice on August

7, 2005, and the RICO 28, 2006. On June 25,

20 I0, the Court decertified the conditional collective action.

2

Plaintiffs'

Hipolito Palacios.

counsel
See id.

reported

that

they

were

unable

to

reach

or

locate

Carlos

Tello

or

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 62 of 74 PageID: 10110

The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-
*14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (II th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs.

Respectfully submitted,

James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036
Gilberto Garcia, Esq. GARCIA AND KRICKO 68 Summit Avenue Hackensack, New Jersey 0760 I

Attomeys for. Plaintiffs By:_ _ _ _ _ _ _ _ _ _ __
By:- - - - - - - - - - - - - - - - - -
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc. By:---,T:::::hc-o_m_as_,H=-.""G:-o.-ld.,--e_n_ _ ____

-3-

..Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 63 of 74 PageID: 10111
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 Dated: [MONTH/DAYl201 0
-4-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 64 of 74 PageID: 10112

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 65 of 74 PageID: 10113

CONFIDENTIAL SETILEMENT AGREEMENT AND GENERAL RELEASE This Confidential Settlement Agreement and General Release ("AGREEMENT") is
entered into by and between Victor Zavala Torres ("Plaintiff') and WAL·MART STORES, INC. ("WAL.MART") (collectively "Parties").

RECITALS

Titis AGREEMENT is made with reference to the following facts:

A. WHEREAS, Plaintiff brought a Lawsuit against WAL-MART in the United
States District Court for the District of New Jersey, that is designated as Zavala, eta/. v. Wai·Mart Stores, Inc., Case No. 03·5309 (the "Lawsuit"); and

B. WHEREAS, WAL·MART denies the validity of Plaintiff's claims, denies that it
was PlaintitPs employer, denies any obligation to pay Plaintiff wages or any other
compensation, and denies that it is subject to any liability; and
c. WHEREAS, all wages allegedly due to Plaintiffare disputed; and

~ D. E.

WHEREAS, the Parties wish to resolve their differences without resort to further litigation; and
WHEREAS, WAL.MART is willing to provide Plaintiff with certain

.

considerations described below, which il'is not ordinarily required to, provided

"-i.

that Plaintiff release WAL·MART from any claims Plaintiff have made or might

make ariving out' of the Lawsuit in accordance with the Release set forth in

Paragraph 5, and agrees to comply with the other promises and conditions set

forth in this AGREEMENT; and

.

f. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance of the
purpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff,

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree to be legally bound by the following terms and conditions, which constitute full settlement of any and all disputes between them: I. Recitals: The Parties acknowledge that the "WHEREAS" clauses preceding paragraph I
are true and correct, and are incorporated herein as material parts to this AGREEMENT. 2. Definitions: Throughout this AGREEMENT, the term "WAL-MART'' shall be defined
to include the following:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 66 of 74 PageID: 10114

(A) Wal-Mart Stores, Inc., as well as any subsidiary, parent company, affiliated entity,

related and

entity,

operating

entity,

franchise,

or

division

of

Wal-Mart

Stores,

Inc.;

(B) Any officer, director, trustee, agent, employee, or insurer of an entity encompassed by subparagraph (a).
3. Settlement Sum: As consideration for signing this AGREEMENT and compliance with the promises made herein, WAL-MART agrees to pay the following sums, less deductions required by Jaw:

(A) A single payment of twenty thousand dollars ($20,000.00) shall be made payable

as reasonable attorney's fees
Kricko ( ·.::Q<2 -31:2.>''716

and (tax

costs to Plaintifrs
ID #)) (hereinafter

legal counsel: Garcia "Plaintitrs Counsel").

and A

1099 shall be issued to the extent appropriate; and

(B) An aggregate amount of Twenty two thousand dollars ($22,000.00), shall be made

payable as damages based on claims of overtime pay allegedly due to Plaintiff

-....

and liquidated damages pursuant to the Fair Labor Standards Act. This amount is

subject to federal and state tax withholding requirements, which will be deducted

·~ <:

from this amount and paid to the government A 1099 shall be issued to the

extent appropriate.

Sdt'Ulhel 'SLLfJV lit. I
PfJMB£A
4. 5.

WAL-MART shall provide the consideration identified in this paragraph 3 after receiving both (I) an original of this AGREEMENT appropriately signed and dated by Plaintiff, and (2) a Stipulation of Dismissal With Prejudice executed by Plaintiff's Counsel.

This AGREEMENT shall riot become effective, therefore, and none of the benefits set

forth in this paragraph will become due or payable, until after the Effective Date of AGREEMENT (th~ "Effective Date" defined as the first day after WAL-MART received from Plaintiff all of the items described in this paragraph).

this has

Consideration: Plaintiff understands and agrees that he would not receive the monies and/or benefits specified in paragraph 3, above, but for his exec\ltion of this AGREEMENT and the fulfilbnent of the promises contained herein.

General Release of Claims: In exchange for, and in consideration of, the payments, benefits, and other commitments described above, which is being executed contemporaneously with this AGREEMENT, Plaintiff, for himself, and for each of his heirs, executors, administrators and assigns, hereby irrevocably releases, acquits, and forever discharges WAL-MART of and from any and all claims, rights, penalties, demands, damages, debts, accounts, duties, costs and expenses (other than those costs utcahonnamkdtnpcoelowaxuipnnled,tnso,shneacsvathuereseebqbseuaeosinrifseaadoscfst,tieoorcntoe,bndoenbbelpcuiatgteiaddwtiewoprnieutshr,ns,ouoaratrnilasitsaisnbtegoirlitotetyudhtitshionafA,ttohwGreeRrrLeEelaEaawtsMessdueEriiNttn,eTdww)ihh,neolttlihheeeenorsLr,kainnwcohpswauarnrigtteootsorr, any or all of the alleged acts, omissions, facts, matters, transactions, circumstances, and

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 67 of 74 PageID: 10115

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3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 68 of 74 PageID: 10116

10.

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11.

Headings: The headings only, and the same shall such provision.

of not

the be,

provisions herein are intended for convenient reference nor be deemed to be, interpretative of the contents of

12.

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15.

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16.

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4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 69 of 74 PageID: 10117

•1 ..
connection with his decision to accept this AGREEMENT, except for those set forth in this AGREEMENT.
PLAINTIFF IS HEREBY ADVISED THAT BE HAS A REASONABLE PERIOD
OF TIME TO REVIEW AND CONSIDER TffiS AGREEMENT. PLAINTIFF AFFIRMS THAT HE IS AUTHORIZED TO SIGN THIS AGREEMENT AND HAS CONSULTED WITH AN A'ITORNEY PRIOR TO
EXECUTION OF THIS AGREEMENT. HAVING ELECTED TO EXECUTE TffiS AGREEMENT, TO FULFILL THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 3 ABOVE, PLAINTIFF FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO
WAIVE, SETTLE, AND RELEASE ALL CLAIMS HE HAs OR MIGHT HAVE
AGAINST WAL-MART. ACCEPTED AND AGREED:

By:

STATE OF fuo!OL-11\

)

COUNTY OF M 6,JCko.

)

.1l\ ~ - di'L-- "LO<t>f
Date

BEFORE ME, IJ:le un!i:igned authority
personally appeared \Jlc"\:lr 4: 1ir!ls • known

on
to

this .Jl_ day of i,yl!!'?u me to be the person whose

2011, name is

subscribed to the foregoing instrument and signed in my presence and swore upon oath this

AGREEMENT was executed for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO BEFORE ME on this _1l,_ day of !JJ€141 2011, to certifY which witness my hand and seal of office.

My Commission Expires:
!. t.JX>E:\9 1U~ Oe,
•'
5

I

\

l

'.

··# ilsrla Blfta BNiWJ
If'rJ1'aht Bdnr:ha
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,..,..r.nrng. ,lT•BI.~

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 70 of 74 PageID: 10118
David P. Murray WILLKIE FARR & GALLAGHE LLP

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 71 of 74 PageID: 10119

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf ofthemselves and all others similarly situated,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-5309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF SETTLING PLAINTIFFS

Plaintiffs Felipe Condado, Octavio Denisio, Eunice Gomez, Victor Zavala Torres, Jiri Pfauser, and Hana Pfauserova ("Settling Plaintiffs") and Def~ndant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Settling Plaintiffs.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced an<:i Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

,Ct ase 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 72 of 74 PageID: 10120

Fair Labor Standards Act ("FLSA") and false imprisonment counts.l At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August I1, 20IO and October I, 2010. Pursuant to the Court's instructions at the August 1I, 2010 settlement conference, on August 27,2010 Wal-Mart · provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs.
See Exhibit B (August 27, 20 I0 letter from Murray to Hon. Madeline Cox Arleo attaching
settlement correspondence). On September 27, 2010 plaintiffs' counsel reported acceptances of the settlement offers by Felipe Condado, Octavio Denisio, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, and Victor Zavala Torres. See Exhibit C (September 27, 20 I0 Letter from Linsey to
Hon. Madeline Cox Arleo).2 Plaintiffs' counsel reported that named plaintiffs Petr Zednik and
Teresa Jaros rejected the respective settlement offers addressed to them. See id.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (I) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko, and (2) a payment to plaintiff in the amount ofthe respective plaintiff's alleged overtime damages,
see Exhibit B (documenting calculation of alleged damages for each Settling Plaintiff). (The
$20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of$20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.

and

The civil rights count RICO conspiracy counts

was dismissed with prejudice on October were dismissed with prejudice on August

7, 2005, and the RICO 28, 2006. On June 25,

20 I0, the Court decertified the conditional collective action.

2

Plaintiffs'

Hipolito Palacios.

counsel
See id.

reported

that

they

were

unable

to

reach

or

locate

Carlos

Tello

or

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 73 of 74 PageID: 10121

The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-
*14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (II th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs.

Respectfully submitted,

James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036
Gilberto Garcia, Esq. GARCIA AND KRICKO 68 Summit Avenue Hackensack, New Jersey 0760 I

Attomeys for. Plaintiffs By:_ _ _ _ _ _ _ _ _ _ __
By:- - - - - - - - - - - - - - - - - -
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc. By:---,T:::::hc-o_m_as_,H=-.""G:-o.-ld.,--e_n_ _ ____

-3-

..Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 74 of 74 PageID: 10122
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 Dated: [MONTH/DAYl201 0
-4-

Case 2:03-cv-05309-GEB-MCA Document 251-4 Filed 03/11/11 Page 1 of 2 PageID: 10125

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, et al.,
Plaintiffs, v. WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-05309 (GEB) DOCUMENT ELECTRONICALLY FILED
CERTIFICATE OF SERVICE

I hereby certify that on March 11, 2011, I caused the foregoing Notice of Motion to
Approve Settlement and Dismiss Claims of Felipe Condado, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, Carlos Tello, and Victor Zavala Torres, accompanying memorandum, exhibit, and
proposed order to be served on plaintiffs via electronic filing to their counsel of record, as
follows:
James L. Linsey COHEN, WEISS AND SIMON LLP
330 West 42nd Street New York, NY 10036
Gilberta M. Garcia GARCIA AND KRICKO Court Plaza South, West Wing, Suite 350
21 Main Street Hackensack, NJ 07601
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc.
By: /s/ Thomas H. Golden Thomas H. Golden
787 Seventh Avenue New York, NY 10019 tgolden@willkie.com

Case 2:03-cv-05309-GEB-MCA Document 251-4 Filed 03/11/11 Page 2 of 2 PageID: 10126 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 dmurray@willkie.com Dated: March 11, 2011
-2-

 
 Case 2:03-cv-05309-GEB-MCA Document 257 Filed 03/25/11 Page 1 of 3 PageID: 10908

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, et al.,
Plaintiffs,
v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-05309 (GEB) DOCUMENT ELECTRONICALLY FILED
NOTICE OF JOINT MOTION TO APPROVE SETTLEMENT AND DISMISS
CLAIMS OF OCTAVIO DENICIA

PLEASE TAKE NOTICE that on April18, 2011 at 9:00a.m. or as soon thereafter as counsel may be heard, Willkie Farr & Gallagher LLP, attorneys for defendant Wal-Mart Stores, Inc., and Garcia and Kricko, attorneys for plaintiffs, will move before this Court, at the Clarkson S. Fisher Building and U.S. Courthouse in Trenton, New Jersey, for an Order approving settlement and dismissal of claims of Octavio Denicia.
IN SUPPORT of this motion, defendant and plaintiffs shall rely upon the supporting Memorandum of Law filed herewith. A proposed form of Order is also submitted.

Case 2:03-cv-05309-GEB-MCA Document 257 Filed 03/25/11 Page 2 of 3 PageID: 10909

By:_ _ _ _ _ _ _ _ __
Gilberta Garcia GARCIA AND KRICKO Court Plaza South West Wing, Suite 350 21 Main Street Hackensack, NJ 07601
Attorneys for Plaintiffs

Respectfully submitted,
By: Is/ Thomas H. Golden Thomas H. Golden
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019
Of Counsel:
David P. Murray (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238
Attorneys for Defendant

Dated: March 25, 2011

-2-

Case 2:03-cv-05309-GEB-MCA Document 257 Filed 03/25/11 Page 3 of 3 PageID: 10910

Gilberto Garcia GARCIA AND KRICKO Court Plaza South West Wing, Suite 350 21 Main Street Hackensack, NJ 07601
Attorneys for Plaintiffs

Respectfully submitted,
By: /s/ Thomas H. Golden Thomas H. Golden
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019
Of Counsel:
David P. Murray (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238
Attorneys for Defendant

Dated: March_, 2011

-2-

Case 2:03-cv-05309-GEB-MCA Document 257-1 Filed 03/25/11 Page 1 of 4 PageID: 10911

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, et al., Plaintiffs,
V.
WAL-MART STORES, INC., Defendant.

CIVIL ACTION NO. 03-CIV-05309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF OCTAVIO DENICIA

Plaintiff Octavio Denicia and Defendant Wal-Mart Stores, Inc. ("Wal-Mart") (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of their Joint Motion to Approve Settlement and Dismiss Claims of Octavio Denicia ("Second Joint Motion"). This Second Joint Motion is submitted as a supplement to the Joint Motion to Approve Settlement and Dismiss Claims of Felipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres filed on March 11,2011 (hereinafter referred to as the "First Joint Motion"), which is pending before the Court. Mr. Denicia executed the Settlement Agreement attached as Exhibit A hereto on March 24, 2011 (the "Settlement Agreement").
For the same reasons set forth in the First Joint Motion, the Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of Mr. Denicia at any time in this proceeding, as embodied in the Settlement Agreement. The Settlement Agreement was reached through several months of settlement discussions under the Court's supervision. The Settlement Agreement is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Mr. Denicia's alleged work on third-party floor maintenance crews in Wal-Mart stores.
This Second Joint Motion incorporates by reference the facts set forth in the First Joint Motion. The Settlement Agreement provides for payment of a one-time Settlement Sum that

Case 2:03-cv-05309-GEB-MCA Document 257-1 Filed 03/25/11 Page 2 of 4 PageID: 10912
includes (1) a payment to Mr. Denicia in the amount ofhis alleged overtime damages (as documented in the offer letter provided to Mr. Denicia), and (2) a payment of $20,000 as reasonable attorneys' fees and costs payable to Mr. Denicia's legal counsel, Garcia and Kricko. (As explained in the First Joint Motion, a single payment of $20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs in this proceeding.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.
The Settlement Agreement represents a fair and reasonable resolution of Mr. Denicia's claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735, 2007 U.S. Dist. LEXIS 32169, at *13-14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1354 (11th Cir. 1982)). With respect to the Fair Labor Standards Act ("FLSA") claims, there is a bona fide dispute as to the amount of compensation due to Mr. Denicia and whether Wal-Mart was his joint employer. See id. Accordingly, the release of Mr. Denicia's claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreement and dismiss the claims of Mr. Denicia with prejudice.
-2-

Case 2:03-cv-05309-GEB-MCA Document 257-1 Filed 03/25/11 Page 3 of 4 PageID: 10913

Respectfully submitted,
By:_ _ _ _ _ _ _ _ __
Gilberto Garcia GARCIA AND KRICKO Court Plaza South West Wing, Suite 350 21 Main Street Hackensack, NJ 07601
Attorneys for Plaintiffs

By: /s/ Thomas H. Golden Thomas H. Golden
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019
Of Counsel:
David P. Murray (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238
Attorneys for Defendant

Dated: March 25, 2011

-3-

Case 2:03-cv-05309-GEB-MCA Document 257-1 Filed 03/25/11 Page 4 of 4 PageID: 10914

Gilberto Gar a GARCIA AND KRICKO Court Plaza South West Wing, Suite 350 21 Main Street Hackensack, NJ 07601
Attorneys for Plaintiffs

By: /s/ Thomas H. Golden Thomas H. Golden
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019
Of Counsel:
David P. Murray (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238
Attorneys for Defendant

Dated: March_, 2011

-3-

Case 2:03-cv-05309-GEB-MCA Document 257-2 Filed 03/25/11 Page 1 of 7 PageID: 10915
EXHIBIT A to Memorandum in Support
of Motion to Approve Settlement and Dismiss
Claims

Case 2:03-cv-05309-GEB-MCA Document 257-2 Filed 03/25/11 Page 2 of 7 PageID: 10916

CONFIDENTIAL SETTLEMENT AGREEMENT AND CENERAL RELEASE

(e"nWterAeLd -TMihnitAso RbCTyo'n)afn(icddoelnblteeictawtliveSeenelyttOl"ePcmataretvnieitas"AD).gerneiesmioen(t"PalnadintGifef'n)earanld

Release ("AGREEMENT") is WAL-MART STORES, INC.

RECITALS

This AGREEMENT is made with reference to the following facts:

A.

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the as

United Zavala,

B.

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that it other

C.

WHEREAS, all wages allegedly due to Plaintiff are disputed; and

D.

WHEREAS, litigation; and

the

Parties

wish

to

resolve

their

differences

without

resort

to

further

E.

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F.

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1.

aRreectirtuaelsa: ndThceorPreacrtti,easnadcakrneoiwnlceodrgpeortahtaetdthheer"eWinHasEmREatAerSia"l

clauses preceding paragraph parts to this AGREEMENT.

1

2.

Definitions: to include the

Throughout following:

this

AGREEMENT,

the

tenn

"WAL~MART"

shall

be

defined

Case 2:03-cv-05309-GEB-MCA Document 257-2 Filed 03/25/11 Page 3 of 7 PageID: 10917

(A)

Wai~Mart Stores, Inc., as related entity, operating
and

well as entity,

any subsidiary, parent franchise, or division

company, affiliated entity, of Wal-Mart Stores, Inc.;

(B)

Any officer, director, trustee, agent, encompassed by subparagraph (a).

employee,

or

insurer

of

an

entity

3.

Settlement Sum: As consideration for signing this

the promises made herein, deductions required by law:

WAL~MART

agrees

AGREEMENT and compliance to pay the following sums,

with less

(A)

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(B)

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receive the monies execution of this

5.

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2

Case 2:03-cv-05309-GEB-MCA Document 257-2 Filed 03/25/11 Page 4 of 7 PageID: 10918

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8.

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9.

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3

Case 2:03-cv-05309-GEB-MCA Document 257-2 Filed 03/25/11 Page 5 of 7 PageID: 10919

10.

No Admission C\{ Liabili~: T furnishing of the consideration anytime for any purpose as an conduct of any kind.

hfaoedrmPtihasristsiioeAsnGabRgyrEeWeEMAthLEat-NMnTeAistRhheaTrllothbfiesandAyeeGlmiRaebEdiElioMtryEcoNornTustnrnluoaewrdfthuaelt

11.

Headings: The headings only, and the same shall such provision.

of not

the be,

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12.

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13.

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14.

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15.

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16.

nTtEhohnetetpirrSeaelrEiteiTAdefsgLorhnEeeeMramentEeoynN, rtaeT:npdrSTeUfshueMilnslytaAdtsieGuospncResrEri,bsEpeedMrdoemEsinNaisnpTeyasrs,paeogrtisrroarafpoghorrbte3hleimgPtahleteaniiotnesntniootfiffrfeaaWcnAkyAnGLokRwi-nMEldeEAdMmgReaETsdNettohTtaoPtblheahtiiewnmtheifeaifnns.

4

Case 2:03-cv-05309-GEB-MCA Document 257-2 Filed 03/25/11 Page 6 of 7 PageID: 10920

connection with iiis this AGREEMENT.

decision

to

accept

this

AGREEMENT,

except

for

those

set

forth

in

OPLFATIINMTEIFTFOISREHVEIREEWBYANADDCVOISNESDIDTEHRATTHHlSE

HAS A REASONABLE AGREEMENT.

PERIOD

EAPXLGAERCIENUETTMIIFOEFNNTOAFAFFNTIDHRIMSHSAASGTRCHEOAENMTSEUNHLTET.EDIS WAITUHTHAONRIAZTETDORTNOEYSPIGRNI O RT ITDOS

AWCAPHGORBAAAONOVIVIMSVINNEIEIDS,GS,TESEREWESPATLLAATATENLLICIDO-NETMNT,TEA,IAODFRNFERTTDNE.OTFCRREEEEREILXVSEEELEACYITSUNEHTTAEEOANSLTDUTLHMiCIlKSlSLSNAAAONIAGMWDGRSIREBNEHEEGMENELMEEYHFNE,AINTTS,TASOTNINOIDRNPTMFAAEUIRNFGLATDFHEGIITLNRRLGHAADPTTHVUHOEEE3

ACCEPTED AND AGREED:

By: O~T~JVI"OjDENI@S(l0rLl/i~q

~~~T~FOr~ ~~t~ l

ME,_,;he_.6lnder~igned perso~ame AspueGbrssRocEnriEabBlMelyEdEFtaNOopTRptheEwaearesfdoerxelJeg_coucintZegtdyiifrno>srt/rt!hu(emApeiJun.rt/p4ao.n.sa.de.u/sKtshaniongordniwteycndonoitnsonidmmethryeaistpitoroJen.s.tbe.hSene_cretehidenaaneydxpsorwefsosre/ed/.u.p/on_o/a2th01th/iiSs,

of~1 to certifSyUwBhSicChIUwBitnEeDssAmNyDhaSnWd OanRdNseTalOofBoEfFfiOce.

ME on this).S_ day '

201[,

My Commission Expires:
5

Case 2:03-cv-05309-GEB-MCA Document 257-2 Filed 03/25/11 Page 7 of 7 PageID: 10921
ON BEHALF OF WAL-MART: David P. Murray WILLKIE FARR & GALLAGHE

Case 2:03-cv-05309-GEB-MCA Document 257-3 Filed 03/25/11 Page 1 of 1 PageID: 10922

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, et al.,
Plaintiffs, v. WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-05309 (GEB)
DOCUMENT ELECTRONICALLY FILED
[PROPOSED] ORDER TO APPROVE SETTLEMENT AND DISMISS CLAIMS
OF OCTAVIO DENICIA

THIS MATTER having been opened to the Court by Willkie Farr & Gallagher LLP (Thomas H. Golden and David P. Murray, Esq., admitted pro hac vice, appearing), attorneys for defendant Wal-Mart Stores, Inc. ("Wal-Mart") and Garcia and Kricko (Gilberta M. Garcia appearing), attorneys for plaintiffs, by way of a Joint Motion to Approve Settlement and Dismiss Claims of Octavia Denicia, and the Court having considered the submissions of the parties and for good cause shown;
IT IS THIS _ _ day of _ _ _ _ _ _ _, 2011, ORDERED that the Joint Motion to Approve Settlement and Dismiss Claims of Octavia Denicia, be and hereby is granted; and it is further
ORDERED, that all claims having been asserted by Octavia Denicia in this proceeding are hereby dismissed with prejudice; and it is further
ORDERED, that a true copy of this Order be served upon all counsel within __ days of the date hereof.
Hon. Garrett E. Brown Jr., U.S.D.J.

Case 2:03-cv-05309-GEB-MCA Document 257-4 Filed 03/25/11 Page 1 of 2 PageID: 10923

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, et al.,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-05309 (GEB) DOCUMENT ELECTRONICALLY FILED
CERTIFICATE OF SERVICE

I hereby certify that on March 25, 2011, I caused the foregoing Notice of Joint Motion to
Approve Settlement and Dismiss Claims of Octavio Denicia, accompanying memorandum, exhibit,
and proposed order to be served on plaintiffs via electronic filing to their counsel of record, as
follows:
James L. Linsey COHEN, WEISS AND SIMON LLP
330 West 42nd Street New York, NY 10036
Gilberto M. Garcia GARCIA AND KRICKO Court Plaza South, West Wing, Suite 350
21 Main Street Hackensack, NJ 07601
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc.
By: /s/ Thomas H. Golden Thomas H. Golden
787 Seventh Avenue New York, NY 10019 tgolden@willkie.com

Case 2:03-cv-05309-GEB-MCA Document 257-4 Filed 03/25/11 Page 2 of 2 PageID: 10924 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 dmurray@willkie.com Dated: March 25, 2011
-2-

 
 Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 1 of 49 PageID: 11155
PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________
No. 11-2381 _____________
VICTOR ZAVALA; EUNICE GOMEZ; MAXIMILIANO MENDEZ;
CARLOS ALBERTO TELLO; ANTONIO FLORES; OCTAVIO DENISIO;
MARTIN MACAK; PAVEL KUNC; HANA PFAUSEROVA;
JIRI PFAUSER; TERESA JAROS; PETR ZEDNEK; DANIEL ANTONIO CRUZ; LUIS GUTIERREZ; FILIPE CONDADO; ARTURO ZAVALA; HIPOLITO PALACINOS, Appellants
v.
WAL MART STORES INC. _____________
On Appeal from the United States District Court for the District of New Jersey
District Court No. 2-03-cv-05309 District Judge: Honorable Garrett E. Brown, Jr.

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 2 of 49 PageID: 11156

Argued March 26, 2012 Before: FUENTES, SMITH, and JORDAN,
Circuit Judges
(Filed: August 9, 2012)

Gilberto M. Garcia
Garcia & Kricko
Court Plaza South West Wing, 3rd Floor
Hackensack, NJ 07601

James L. Linsey Suite 615 11 Broadway New York, NY 10004

(Argued)

Michaelene Loughlin Loughlin & Latimer 179 Cedar Lane Suite B Teaneck, NJ 07666
Counsel for Appellants

Thomas H. Golden Willkie, Farr & Gallagher 787 Seventh Avenue New York, NY 10019
2

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 3 of 49 PageID: 11157

David P. Murray Willkie, Farr & Gallagher 1875 K Street, N.W. Washington, DC 20006
Counsel for Appellee

(Argued)

________________

OPINION ________________

SMITH, Circuit Judge.
I. Introduction
This suit was brought in the U.S. District Court for the District of New Jersey by Wal-Mart cleaning crew members who are seeking compensation for unpaid overtime and certification of a collective action under the Fair Labor Standards Act (FLSA), civil damages under RICO, and damages for false imprisonment. The workers – illegal immigrants who took jobs with contractors and subcontractors Wal-Mart engaged to clean its stores – allege: (1) Wal-Mart had hiring and firing authority over them and closely directed their actions such that Wal-Mart was their employer under the FLSA; (2) Wal-Mart took part in a RICO enterprise with predicate acts of transporting illegal immigrants,

3

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 4 of 49 PageID: 11158
harboring illegal immigrants, encouraging illegal immigration, conspiracy to commit money laundering, and involuntary servitude; (3) Wal-Mart‘s practice of locking some stores at night and on weekends – without always having a manager available with a key – constituted false imprisonment.
Over the course of eight years and a minimum of four opinions, the District Court rejected final certification of an FLSA class, rejected the RICO claim on several grounds, and rejected the false imprisonment claim on the merits. We will affirm.
II. Facts
This case has been pending for over eight years and ultimately comes to us from a grant of summary judgment. Not surprisingly, it carries with it a substantial record.1 To help organize the relevant facts in a useful
1 This case provides a useful example of why the Federal Rules of Appellate Procedure provide for a joint appendix and give each party the authority to designate any relevant documents for inclusion. See Fed. R. App. P. 30(b)(1). Rather than cooperate to produce a joint appendix, the parties here have provided one primary appendix and two sets of supplemental appendices (one from each side). This unnecessarily complicates the record on appeal, and we strongly discourage parties from pursuing such a course in the future.
4

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 5 of 49 PageID: 11159
manner, we have divided them into groups corresponding to Plaintiffs‘ claims. We focus only on the facts relevant to our bases for deciding the appeal.
A. RICO
Plaintiffs allege that Wal-Mart paid its contractors with full knowledge that the contractors were hiring illegal immigrants to work in Wal-Mart‘s stores. Plaintiffs support this contention with further allegations that two senior Wal-Mart executives made comments that could be understood as acknowledging that the contractors had hired and would continue to hire illegal immigrants. In addition, Plaintiffs allege that Wal-Mart managers and executives were regularly informed that their contractors were employing illegal immigrants.
In support of their RICO transporting predicate, Plaintiffs allege that contractors would sometimes pick workers up from the airport and transport them across state lines for work. They also allege that when a work crew was arrested by federal authorities, fired / ejected by the store manager, or otherwise unavailable to work, another work crew would be brought in within hours, often from out of state. In support of their RICO harboring predicate, Plaintiffs allege at least one instance in which work crews were permitted to sleep in the store and keep their personal belongings there with the knowledge of store management. In support of their RICO encouraging predicate, Plaintiffs allege that
5

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 6 of 49 PageID: 11160
contractors advertised for Wal-Mart cleaning jobs in the Czech Republic and elsewhere. In support of their RICO involuntary servitude predicate, Plaintiffs allege that they were coerced into working by threats to report their immigration status to authorities. Plaintiffs also use the facts supporting their false imprisonment claims to support their involuntary servitude claims. Those facts will be discussed below.
The record indicates that Plaintiffs did not work exclusively for Wal-Mart, nor did Wal-Mart hire its cleaners exclusively from the pool of illegal immigrants it allegedly transported, harbored, and encouraged. For example, documents and deposition testimony provided by Plaintiffs demonstrate that they held a variety of jobs, including work at a Marriott hotel, work at a movie theater, and work remodeling homes. And the record indicates that Wal-Mart often used store associates (regular, non-contract employees) to clean its stores.
B. Certification of the FLSA Collective Action
The District Court‘s decision to decertify the collective action followed substantial discovery into the potential class plaintiffs, their employment history, their work hours, their working conditions, and other relevant factors. Magistrate Judge Arleo, to whom some of the proceedings below were assigned, required each opt-in plaintiff to file a questionnaire in a specific format detailing his / her personal information, working
6

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 7 of 49 PageID: 11161
conditions, compensation, etc. Over one hundred individuals filed this questionnaire before the deadline. The questionnaires demonstrate that the opt-in plaintiffs worked at dozens of different stores, for numerous different contractors, with various pay amounts and methods. Though most worked every evening from roughly 11pm – 7am, their hours sometimes varied.
In an effort to demonstrate that the proposed class is similarly situated, Plaintiffs proffer a Wal-Mart Maintenance Manual (and a translation of that manual into Polish), which appears to establish uniform standards and procedures for cleaning Wal-Mart stores. The manual is comprehensive. Among other things, it specifies the products and methods to be used, as well as the procedure for obtaining new supplies or equipment. In a similar vein, Plaintiffs provide declarations and deposition testimony establishing that Wal-Mart provided the cleaning materials used by the crew, though at least one Wal-Mart store manager asserts that contractors provided their own equipment.
In an effort to demonstrate that Wal-Mart exercised control over the proposed class and that this control was common across Wal-Mart stores, Plaintiffs provide declarations and deposition testimony supporting their contention that Wal-Mart managers directed them where and how to clean and often scrutinized their work, requiring them to clean an area more thoroughly before
7

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 8 of 49 PageID: 11162
leaving. Wal-Mart provides declarations from store managers insisting that their interactions with crews were limited to general instructions. They insist that they did not supervise the cleaners and that issues were usually raised with the crew chief or the contracting company. Plaintiffs concede in their own deposition testimony that cleaners did not receive training from Wal-Mart staff. Generally, cleaners were trained by other members of the work crew or learned simply by observing.
Plaintiffs also claim that Wal-Mart asserted and exercised the right to hire and fire the cleaning crews. Plaintiffs point first to a form contract distributed to WalMart stores to be used in hiring cleaning crews. The letter accompanying the contract and the contract itself specify that the Wal-Mart store manager shall have final authority to approve or disapprove members of the cleaning crew. In addition, Plaintiffs provide declarations and deposition testimony establishing that Wal-Mart management would occasionally fire individual workers or whole work crews. Multiple WalMart managers provide declarations asserting that they did not have the authority to hire and fire crew members.
C. False Imprisonment
In support of their false imprisonment claims, Plaintiffs allege that they often worked at stores that were shut down at night and on weekends, during which time the exits were locked. At these stores, they needed to
8

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 9 of 49 PageID: 11163
seek out managers to open the doors. Managers were often unavailable and were sometimes not even in the store. However, Plaintiffs‘ deposition testimony shows that they could and sometimes did leave for breaks. Testimony also shows that they occasionally left for work-related tasks like retrieving propane (necessary for the buffing equipment).
Plaintiffs cite two specific instances in which they wanted to leave but were unable to do so: (1) Plaintiff Petr Zednik had a toothache and wanted to leave early, but his manager, Steve, refused to permit him to leave; (2) Plaintiff Teresa Jaros had abdominal pain and bleeding and wanted to leave, but no managers were in the store. In Zednik‘s case, he further asserts that ―Steve is a muscular man (with blond hair), and I knew that he would assault me if I tried to escape through any door that would let me out[.]‖
In response, Wal-Mart provides two declarations from store managers. The declarations attest that managers were available to unlock doors ―when necessary‖; that the stores had properly-marked emergency exits; and that – to the managers‘ knowledge – the emergency exits were neither concealed nor obstructed at any time and were always in proper working order.
In reply to these declarations, Plaintiffs assert that managers were often unavailable. They also assert that
9

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 10 of 49 PageID: 11164
they did not know how to leave. Plaintiffs claim that they were never informed of the location of emergency exits. Plaintiffs also speculate that Wal-Mart had motive to conceal these exits.
III. Procedural Timeline
The initial complaint in this case was filed on November 10, 2003, and the case was assigned to thenDistrict Judge Joseph A. Greenaway, Jr. The original complaint was followed by a First Amended Class Action Complaint on February 2, 2004. This complaint sought damages for: (1) RICO (with predicate acts of transporting, harboring, encouraging, and hiring illegal immigrants, conspiracy / aiding and abetting transporting, harboring, and encouraging illegal immigrants, committing immigration offenses for financial gain, involuntary servitude, money laundering, mail and wire fraud, and conspiracy to launder money); (2) RICO conspiracy; (3) conspiracy to violate civil rights under 42 U.S.C. § 1985; and (4) violations of the Fair Labor Standards Act. On December 29, 2004, the District Court conditionally certified the FLSA collective action.
On October 7, 2005, ruling on a motion to dismiss, the District Court concluded that: (1) Plaintiffs failed to state a claim for any of their alleged RICO predicates; (2) Plaintiffs were not members of a class protected by 42 U.S.C. § 1985; and (3) Plaintiffs‘ FLSA and false
10

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 11 of 49 PageID: 11165
imprisonment claims could proceed. In response, Plaintiffs filed a Second Amended Complaint on November 21, 2005. This complaint abandoned Plaintiffs‘ civil rights claim under 42 U.S.C. § 1985, the RICO predicate of hiring illegal immigrants, the RICO predicate of money laundering (but not conspiracy to launder money), and the RICO predicate of mail and wire fraud.
On August 28, 2006, deciding a partial motion to dismiss the Second Amended Complaint, the District Court dismissed Plaintiffs‘ RICO and RICO conspiracy claims. The District Court held: (1) Plaintiffs failed to satisfy the RICO requirement of showing ―distinctness‖ between the ―person‖ and the ―RICO enterprise‖; (2) Plaintiffs failed to state a claim for their RICO predicate of involuntary servitude; and (3) Plaintiffs failed to establish a causal nexus between their RICO predicates of immigration violations and money laundering and their alleged injury.
On March 10, 2010, this case was reassigned to then-Chief District Judge Garrett E. Brown, Jr. On June 25, 2010, the District Court granted Wal-Mart‘s motion to decertify Plaintiffs‘ provisionally-certified FLSA collective action. The District Court concluded that the breadth of factual circumstances underlying each individual‘s claim did not permit trial of the case as a collective action. On December 1, 2010, the District
11

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 12 of 49 PageID: 11166
Court denied Plaintiffs‘ motion for summary judgment on their FLSA and false imprisonment claims. The District Court concluded that the motion was procedurally improper because it was filed well beyond the deadline provided by the federal rules. The District Court also concluded that the motion failed on the merits because material facts remained in contention on both claims.
On April 7, 2011, the District Court granted WalMart‘s motion for partial summary judgment on the false imprisonment claim. It first concluded that Wal-Mart had shown adequate grounds for seeking summary judgment beyond the time limit provided by the federal rules. It then held that Plaintiffs‘ false imprisonment claims failed on the merits because Wal-Mart had adequately demonstrated the availability of emergency exits and Plaintiffs failed to rebut this evidence. Following that decision, Wal-Mart resolved the individual FLSA claims of named Plaintiffs through a series of settlements and an offer of judgment.
This appeal followed. Plaintiffs challenge the District Court‘s dismissal of their RICO claims, its decertification of the conditionally-certified FLSA action, and its grant of summary judgment for Wal-Mart on Plaintiffs‘ false imprisonment claims. The District Court had jurisdiction under 28 U.S.C. § 1331, 29 U.S.C.
12

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 13 of 49 PageID: 11167
§ 216(b), 18 U.S.C. § 1964(c), and 28 U.S.C. § 1367(a). We have appellate jurisdiction under 28 U.S.C. § 1291.
IV. Analysis
A. Certification of the FLSA Collective Action
The District Court conditionally certified this as a collective action under the FLSA. Following discovery, a ―motion for decertification‖ was brought, and the District Court ―decertified‖2 the class. As the District Court explained, two different standards apply for certification under the FLSA, one for conditional certification, and another for final certification. While we have made clear that the standard for final certification is more stringent than the standard for conditional certification, the exact test to be applied has been left specifically unresolved by our Court. We decide today that to certify an FLSA collective action for trial, the District Court – after considering the claims and defenses of the parties and all the relevant evidence – must make a finding of fact that the members of the collective action are ―similarly situated.‖ The burden of demonstrating that members of the collective action are similarly situated is to be borne by the plaintiffs, who must show by a preponderance of the evidence that they are similarly situated.
2 This terminology is misleading, as we will demonstrate.
13

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 14 of 49 PageID: 11168
1. Standard of Review
We must first address the appropriate standard of review. The standard of review for FLSA decertification has not been previously addressed by our Court. Other circuits have applied an abuse of discretion standard to the ultimate decision on whether to certify the collective action. See, e.g., Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1260 (11th Cir. 2008) (―[W]e review a district court‘s § 216(b) certification for abuse of discretion.‖); Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1105 (10th Cir. 2001) (same in ADEA context).3
We agree that an abuse of discretion standard is appropriate. But we note that this is not the type of abuse of discretion review afforded matters that are ―committed to the discretion of the trial court[.]‖ United States v. Criden, 648 F.2d 814, 817 (3d Cir. 1981). In those situations, we will reverse only if the district court‘s decision is ―arbitrary, fanciful or unreasonable, which is another way of saying that discretion is abused only where no reasonable man would take the view adopted by the local court.‖ Lindy Bros. Builders, Inc. v. Am.
3 Thiessen is an ADEA case. Throughout this section, we will use FLSA and ADEA cases interchangeably, as the ADEA imports by reference the collective action provision and ―similarly situated‖ standard of the FLSA. See 29 U.S.C. § 626(b).
14

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 15 of 49 PageID: 11169
Radiator, Etc., 540 F.2d 102, 115 (3d Cir. 1976) (en banc) (quoting Delno v. Market St. Ry. Co., 124 F.2d 965, 967 (9th Cir. 1942)). Here, however, we will find an abuse of discretion ―if the district court‘s decision ‗rests upon a clearly erroneous finding of fact, an errant conclusion of law or an improper application of law to fact.‘‖ In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 312 (3d Cir. 2008) (quoting Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 165 (3d Cir. 2001)).
This type of review is appropriate because the final certification of an FLSA collective action is composed of two underlying components: (1) determining the legal standard to be applied in concluding whether proposed plaintiffs are similarly situated; and (2) applying the legal standard to conclude whether the proposed plaintiffs actually are similarly situated. The former has been recognized as a legal question, subject to de novo review. See Thiessen, 267 F.3d at 1105 (―The initial question, which we address de novo, is whether it was proper for the district court to adopt the ad hoc approach in determining whether plaintiffs were ‗similarly situated‘ for purposes of § 216(b).‖). The latter has been recognized as a factual question, subject to review for clear error. See Morgan, 551 F.3d 1260 (―A court‘s determination that the evidence shows a particular group of opt-in plaintiffs are similarly situated is a finding of fact. . . . We will reverse the district court‘s fact-finding
15

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 16 of 49 PageID: 11170
that plaintiffs are similarly situated only if it is clearly erroneous.‖); Mooney v. Aramco Servs., 54 F.3d 1207, 1214 (5th Cir. 1995) (―At [the second] stage, the court . . . makes a factual determination on the similarly situated question.‖), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003).
Once it has been determined that the plaintiffs are similarly situated (a factual question reviewed for clear error), there is no further work to be done. We do not believe that the statute gives the district court discretion to deny certification after it has determined that plaintiffs are similarly situated. Accordingly, no exercise of discretion actually takes place. Nonetheless, such multipart reviews of District Court decisions have been routinely labeled with the ―abuse of discretion‖ standard under our precedent and the precedent of our sister circuits, though we have made clear that each part of the review should proceed under the appropriate standard for that component. See, e.g., Gates v. Rohm & Haas Co., 655 F.3d 255, 262 (3d Cir. 2011); Morgan v. Perry, 142 F.3d 670, 682-83 (3d Cir. 1998).
Because we are examining the underlying legal rule for certification, we exercise plenary review over the District Court‘s decision to not finally certify the collective action here. Going forward, however, because district courts will be applying the standard we announce today, we anticipate that certification decisions will
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typically be subject to review under the clear-error prong of this type of abuse of discretion review, as only factfinding should be at issue.
2. Standard for Certification of an FLSA Collective Action
In ―decertifying‖ this collective action, the District Court explained that two different standards for certification applied. It noted that a ―fairly lenient standard‖ applied for conditional certification, and noted that some courts ―require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan[.]‖ Zavala v. Wal-Mart Stores, Inc., No. 03-5309, 2010 WL 2652510, at *2 (D.N.J. June 25, 2010) (quoting Morisky v. Pub. Serv. Elec. & Gas Co., 111 F. Supp. 2d 493, 495 (D.N.J. 2000)). The District Court then held that a ―stricter standard‖ applied on final certification, in which the court actually determines whether the plaintiffs are similarly situated. And it held that plaintiffs bear the burden of demonstrating that they are similarly situated. Without precisely quantifying the burden borne by the plaintiffs, the District Court then concluded that, under the disparate factual circumstances applicable here, Plaintiffs were not similarly situated, and ―decertification‖ was appropriate.
In Symczyk v. Genesis Healthcare Corp., 656 F.3d 189 (3d Cir. 2011), we noted that this two-tier approach,
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while ―nowhere mandated, . . . appears to have garnered wide acceptance.‖ Id. at 193 n.5. We implicitly embraced this two-step approach, and we affirm its use here. But we also explained that the ―conditional certification‖ is not really a certification. It is actually ―‗the district court‘s exercise of [its] discretionary power, upheld in Hoffmann-La Roche, to facilitate the sending of notice to potential class members,‘ and ‗is neither necessary nor sufficient for the existence of a representative action under [the] FLSA.‘‖ Id. at 194 (quoting Myers v. Hertz Corp., 624 F.3d 537, 555 n.10 (2d Cir. 2010)). In articulating the standard to be applied at this initial stage,4 we left open the question of the
4 We adopted the ―modest factual showing‖ standard, under which ―a plaintiff must produce some evidence, ‗beyond pure speculation,‘ of a factual nexus between the manner in which the employer‘s alleged policy affected her and the manner in which it affected other employees.‖ Symczyk, 656 F.3d at 193 (citing Smith v. Sovereign Bancorp, Inc., No. 03-2420, 2003 WL 22701017, at *3 (E.D. Pa. Nov. 13, 2003)). The Second Circuit has described this initial step as ―determin[ing] whether ‗similarly situated‘ plaintiffs do in fact exist,‖ while at the second stage, the District Court determines ―whether the plaintiffs who have opted in are in fact ‗similarly situated‘ to the named plaintiffs.‖ Myers, 624 F.3d at 555.
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standard to be applied on final certification. Id. at 193 n.6 (―Because only the notice stage is implicated in this appeal, we need not directly address the level of proof required to satisfy the similarly situated requirement at the post-discovery stage.‖).
It is clear from the statutory text of the FLSA that the standard to be applied on final certification is whether the proposed collective plaintiffs are ―similarly situated.‖5 Courts have adopted three different approaches for determining whether this is the case. See Thiessen, 267 F.3d at 1102-03. The first is the ad-hoc approach, which considers all the relevant factors and makes a factual determination on a case-by-case basis. To our knowledge, this is the only approach approved by other Courts of Appeals. See, e.g., Morgan, 551 F.3d at 1259-62 (11th Cir. 2008); Thiessen, 267 F.3d at 1105 (10th Cir. 2001). The other two approaches are derived from Rule 23 and have only been adopted by district courts. See Thiessen, 267 F.3d at 1103. We have already repeatedly approved the ad-hoc approach, and we do so again today. See, e.g., Symczyk, 656 F.3d at 193 n.6; Ruehl v. Viacom, Inc., 500 F.3d 375, 388 n.17 (3d Cir. 2007); Lockhard v. Westinghouse Credit Corp., 879 F.2d
5 29 U.S.C. § 216(b) (―An action to recover the liability prescribed [by this statute] . . . may be maintained . . . by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.‖).
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43, 51 (3d Cir. 1989), overruled on other grounds by Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993).
Our Court and the other Courts of Appeals to address the issue have identified many factors to be considered as part of the ad-hoc analysis. Relevant factors include (but are not limited to): whether the plaintiffs are employed in the same corporate department, division, and location; whether they advance similar claims; whether they seek substantially the same form of relief; and whether they have similar salaries and circumstances of employment. Plaintiffs may also be found dissimilar based on the existence of individualized defenses. See Ruehl, 500 F.3d at 288 n.17. This list is not exhaustive, and many relevant factors have been identified. See 45C Am. Jur. 2d Job Discrimination § 2184 (listing 14 factors to be considered in determining whether proposed collective action plaintiffs are ―similarly situated‖ under the ADEA).
Finally, we conclude that the burden is on the plaintiffs to establish that they satisfy the similarly situated requirement. See Symczyk, 656 F.3d at 193 (―Should the plaintiff satisfy her burden at [the second] stage, the case may proceed to trial as a collective action.‖); see also O’Brien v. Ed Donnelly Enters., 575 F.3d 567, 584 (6th Cir. 2009) (―The lead plaintiffs bear the burden of showing that the opt-in plaintiffs are similarly situated to the lead plaintiffs.‖).
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What remains unresolved is the level of proof the plaintiffs must satisfy. In Symczyk, we specifically declined to answer this question. Symczyk, 656 F.3d at 193 n.6 (―Because only the notice stage is implicated in this appeal, we need not directly address the level of proof required at the post-discovery stage.‖). To our knowledge, no other Court of Appeals has directly answered this question.
We now hold that plaintiffs must satisfy their burden at this second stage by a preponderance of the evidence.6 As the Second Circuit observed, the task on final certification is determining ―whether the plaintiffs who have opted in are in fact ‗similarly situated‘ to the named plaintiffs.‖ Myers, 624 F.3d at 555. That seems impossible unless Plaintiffs can at least get over the line of ―more likely than not.‖ At the same time, a stricter standard would be inconsistent with Congress‘ intent that the FLSA should be liberally construed. See Morgan, 551 F.3d at 1265 (―We also bear in mind that the FLSA is a remedial statute that should be liberally construed.‖).
6 Because this issue is necessary to our decision and was not directly addressed in the original briefs, we requested supplemental briefing. Wal-Mart asserted that a preponderance standard applied. In their brief, the Plaintiffs did not articulate a precise burden. But at oral argument, both parties agreed that a preponderance of the evidence standard was appropriate.
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Our conclusion that preponderance of the evidence is the appropriate standard to apply is buttressed by the Supreme Court‘s presumption ―that this standard is applicable in civil actions between private litigants unless ‗particularly important individual interests or rights are at stake.‘‖ Grogan v. Garner, 498 U.S. 279, 286 (1991). And we have said that ―[w]e see no reason to deviate from the traditional preponderance of the evidence standard in the absence of express direction from Congress.‖ United States v. Himler, 797 F.2d 156, 161 (3d Cir. 1986).
We hold that plaintiffs must demonstrate by a preponderance of the evidence that members of a proposed collective action are similarly situated in order to obtain final certification and proceed with the case as a collective action.
3. Application of the FLSA Certification Standard Plaintiffs have failed to satisfy the ―similarly situated‖ standard. The similarities among the proposed plaintiffs are too few, and the differences among the proposed plaintiffs are too many.
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Plaintiffs‘ theory is that Wal-Mart wanted clean stores ―on the cheap.‖7 To that end, Wal-Mart distributed a maintenance manual that went into exacting detail about how to clean floors, shelves, bathrooms, and other parts of the store. This manual mandated procedures that all employees and contractors were to use. Store managers also received a form contract for use with outside cleaning contractors, and were instructed that they had final authority to approve or disapprove members of cleaning crews. There is evidence that store managers fired members of cleaning crews and that WalMart employees regularly directed cleaning crews in conducting their work in the store. There is also evidence that Wal-Mart store managers and corporate officers knew and approved of contractors‘ widespread hiring of illegal immigrants.
7 For purposes of this analysis, we will recite the facts as set forth by the Plaintiffs. This is not required by the certification analysis, but we do so to demonstrate that, even reciting the facts to Plaintiffs‘ benefit, Plaintiffs are unable to meet their burden for certification. We note that Wal-Mart disputes many of these facts, such as the provenance of the maintenance manual and how widespread was its use, the hiring and firing authority of store managers, etc. We do not purport to resolve these factual disputes either for or against the Plaintiffs or WalMart.
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Being similarly situated does not mean simply sharing a common status, like being an illegal immigrant. Rather, it means that one is subjected to some common employer practice that, if proved, would help demonstrate a violation of the FLSA. And, indeed, Plaintiffs‘ allegation of a common scheme to hire and underpay illegal immigrant workers provides some common link among the proposed class. Plaintiffs‘ evidence with regard to the maintenance manual, the authority of store managers, and the supervision by store employees is relevant to demonstrating whether WalMart employed the proposed plaintiffs. And such a scheme potentially demonstrates Wal-Mart‘s willfulness in violating the FLSA. But these common links are of minimal utility in streamlining resolution of these cases. Liability and damages still need to be individually proven.
While the District Court noted the commonalities among the proposed plaintiffs, it was ultimately convinced that the class should not be certified for trial. ―In all,‖ it found, ―the putative class members worked in 180 different stores in 33 states throughout the country and for 70 different contractors and subcontractors. The individuals worked varying hours and for different wages depending on the contractor.‖ Zavala, No. 03-5309, 2010 WL 2652510, at *3 (internal citations omitted). These factors convinced the District Court that there were ―significant differences in the factual and
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employment settings of the individual claimants.‖ Id. The District Court also noted that different defenses might be available to Wal-Mart with respect to each proposed plaintiff, including that individual cleaners were not Wal-Mart employees, as that term is defined by the FLSA, and that it paid some of its contractors an adequate amount to support an appropriate wage for the cleaners. See id. at *4-*5.
We agree with the District Court. Considering the numerous differences among members of the proposed class in light of the alleged common scheme‘s minimal utility in streamlining resolution of the claims, we conclude that the Plaintiffs have not met their burden of demonstrating that they are similarly situated. We will therefore affirm the District Court‘s decision to deny final certification.
B. Civil RICO Claims
Plaintiffs originally alleged RICO violations with underlying predicate acts of transporting, harboring, encouraging, and hiring illegal immigrants, mail and wire fraud, money laundering, and related conspiracy and aiding and abetting claims. The District Court then dismissed Plaintiffs‘ civil RICO claims for failure to state a claim on the underlying predicate acts. See Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295, 304 (D.N.J. 2005). When Plaintiffs later amended their complaint, they dropped the predicate acts of hiring illegal
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immigrants and mail and wire fraud. In its subsequent opinion, the District Court took a different approach. It first held that Plaintiffs had failed to state a claim for the predicate act of involuntary servitude. But for the other predicate acts – transporting illegal immigrants, concealing illegal immigrants, harboring illegal immigrants, conspiracy / aiding and abetting claims for each of these, and conspiracy to commit money laundering – the District Court held that Plaintiffs had failed to show a causal nexus between these acts and their alleged injury. It also held that Plaintiffs had failed to satisfy RICO‘s distinctness requirement. See Zavala v. Wal-Mart, 447 F. Supp. 2d 379 (D.N.J. 2006). For these independent reasons, the District Court again dismissed Plaintiffs‘ RICO allegations for failure to state a claim.
In its later opinion, the District Court did not disavow its prior holding that Zavala had failed to plead at least two predicate acts, and Wal-Mart renews this argument on appeal. See Appellee‘s Br. at 24. WalMart is correct. We conclude that Plaintiffs have failed to state a claim for RICO or RICO conspiracy by failing to allege a pattern of predicate acts.8
8 We also have serious doubt that the Plaintiffs have met the pleading requirements for RICO distinctness and proximate causation, but we do not need to reach those issues, in light of the pleading deficiency regarding predicate acts.
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On a motion to dismiss for failure to state a claim, our review is plenary. See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 230 (3d Cir. 2008). The complaint‘s ―[f]actual allegations must be enough to raise a right to relief above the speculative level.‖ Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007).
1. Pleading of the RICO Conspiracy Claim
In addition to their RICO claim, Plaintiffs also claim conspiracy to violate RICO under 18 U.S.C. § 1962(d) (―It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.‖). RICO conspiracy is not a mere conspiracy to commit the underlying predicate acts. It is a conspiracy to violate RICO – that is, to conduct or participate in the activities of a corrupt enterprise. See Salinas v. United States, 522 U.S. 52, 62 (1997) (―Before turning to RICO‘s conspiracy provision, we note the substantive RICO offense, which was the goal of the conspiracy[.]‖ (emphasis added)); Banks v. Wolk, 918 F.2d 418, 421 (3d Cir. 1990) (―[A] defendant can be liable under RICO‘s conspiracy provision for agreeing to the commission of a pattern of racketeering activity.‖ (emphasis added)); United States v. Elliott, 571 F.2d 880, 902 (5th Cir. 1978) (―[T]he object of a RICO conspiracy is to violate a substantive RICO provision here, to conduct or participate in the affairs of an
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enterprise through a pattern of racketeering activity and not merely to commit each of the predicate crimes necessary to demonstrate a pattern of racketeering activity.‖). Plaintiffs fail to plead facts supporting a conclusion that this was the object of the alleged conspiracy. Accordingly, the dismissal of Plaintiffs‘ claim under Section 1962(d) was not error. It is an entirely separate question whether Plaintiffs allege a conspiracy to commit money laundering or immigration violations, which would then constitute predicate acts for a traditional RICO claim under 18 U.S.C. § 1962(c). We will turn to that contention later in this opinion.
2. Pleading of the RICO Predicates
a) Pleading of the RICO Involuntary Servitude Predicate
Plaintiffs claim that the conditions of their employment amount to involuntary servitude, barred by 15 U.S.C. § 1584. Per 18 U.S.C. § 1961(1)(B), this is a RICO predicate act. The District Court concluded that Plaintiffs failed to allege a plausible claim of involuntary servitude. We agree.
―[T]he phrase ‗involuntary servitude‘ was intended . . . ‗to cover those forms of compulsory labor akin to African slavery[.]‘‖ United States v. Kozminski, 487 U.S. 931, 942 (1988) (quoting Butler v. Perry, 240 U.S. 328, 332 (1916)). ―Modern day examples of involuntary
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servitude have been limited to labor camps, isolated religious sects, or forced confinement.‖ Steirer v. Bethlehem Area Sch. Dist., 987 F.2d 989, 999 (3d Cir. 1993); see, e.g., United States v. King, 840 F.2d 1276, 1280 (6th Cir. 1988) (religious sect violated 18 U.S.C. § 1584 where they ―used and threatened to use physical force to make the children [at their camp] perform labor and the children believed they had no viable alternative but to perform such labor‖); United States v. Booker, 655 F.2d 562, 563, 566 (4th Cir. 1981) (migrant labor camp held farm workers in involuntary servitude, forbade them from leaving without paying their debts, and enforced the rule with threats of physical harm, actual physical injury, and by kidnapping and returning to the farm workers who attempted to leave); Jobson v. Henne, 355 F.2d 129, 13132 (2d Cir. 1966) (patients in mental institution performing required labor stated Thirteenth Amendment claim).
Plaintiffs have presented evidence of some difficult working conditions, but they have demonstrated nothing ―akin to African slavery‖ or any modern analogue. Any such comparison is plainly frivolous. Plaintiffs do not allege that they were held in a labor camp or forced into daily labor by a religious sect. Any allegation that their working conditions constituted forced confinement falls with their false imprisonment claims, discussed later in this opinion.
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To the extent Plaintiffs allege that they were threatened with deportation, those allegations are likewise insufficient to constitute involuntary servitude. In United States v. Kozminski, the Supreme Court observed that it was ―possible‖ that threatening an immigrant with deportation might amount to a ―threat of legal coercion‖ resulting in involuntary servitude. 487 U.S. at 948. At the same time, the Court endorsed Judge Friendly's observation in United States v. Shackney, 333 F.2d 475 (2d Cir. 1964): ―The most ardent believer in civil rights legislation might not think that cause would be advanced by permitting the awful machinery of the criminal law to be brought into play whenever an employee asserts that his will to quit has been subdued by a threat which seriously affects his future welfare but as to which he still has a choice, however painful.‖ Kozminski, 487 U.S. at 950 (quoting Shackney, 333 F.2d at 487). In Shackney, the Second Circuit further held:
[W]e see no basis for concluding that because the statute can be satisfied by a credible threat of imprisonment, it should also be considered satisfied by a threat to have the employee sent back to the country of his origin, at least absent circumstances which would make such deportation equivalent to imprisonment or worse. . . . [A] holding in involuntary servitude means to us action by the master causing the
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servant to have, or to believe he has, no way to avoid continued service or confinement, . . . not a situation where the servant knows he has a choice between continued service and freedom, even if the master has led him to believe that the choice may entail consequences that are exceedingly bad. . . . While a credible threat of deportation may come close to the line, it still leaves the employee with a choice, and we do not see how we could fairly bring it within § 1584 without encompassing other types of threat.
333 F.2d at 486-87 (internal citation omitted). We agree with Judge Friendly‘s analysis. Absent some special circumstances, threats of deportation are insufficient to constitute involuntary servitude.
Plaintiffs do not claim that they were compelled to come to work each day. While they allege that managers often kept them beyond the end of their shift to finish their work, they do not claim that they were forced to remain once that work was finished. The record demonstrates that Plaintiffs often switched jobs, freely moving to different employers in different cities. Plaintiffs do not allege that previous employers ever pursued them to compel their return to a previous position. And while a broad reading of Plaintiffs‘ allegations could lead to the conclusion that they were
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threatened with deportation for refusing to work, that is legally insufficient to constitute involuntary servitude. The District Court properly concluded that the Plaintiffs had failed to adequately plead the RICO predicate of involuntary servitude.
b) Pleading of the RICO Transporting Predicate
Transporting illegal immigrants is prohibited as follows:
Any person who—
(i) knowing that a person is an alien, brings to or attempts to bring to the United States in any manner whatsoever such person at a place other than a designated port of entry or place other than as designated by the Commissioner, regardless of whether such alien has received prior official authorization to come to, enter, or reside in the United States and regardless of any future official action which may be taken with respect to such alien;
(ii) knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law, transports, or moves or attempts to
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transport or move such alien within the United States by means of transportation or otherwise, in furtherance of such violation of law . . .
8 U.S.C. § 1324(a)(1)(A)(i)-(ii). When done for monetary gain, this is a RICO predicate act. See 18 U.S.C. § 1961(1)(F).
Plaintiffs allege two types of scenarios that they believe constitute transporting: (1) after work crews were fired or arrested, alternative work crews were quickly made available, often from other states; and (2) work crews were transported to work shifts. Even assuming that any of these actions – had they been taken by Wal-Mart employees – qualify as ―transporting,‖9 Plaintiffs do not demonstrate that Wal-Mart was responsible for the transporting. Plaintiffs do not allege that Wal-Mart employees were ever involved in this transport. Plaintiffs do not allege specific facts demonstrating that Wal-Mart aided and abetted transport. Plaintiffs do allege that Wal-Mart managers would sometimes request replacement crews, but they simply assert that the managers knew those crews would be illegal immigrants and that they would be transported
9 Plaintiffs admit, for example, that many workers entered the United States on visas and were therefore entitled to be here but not to work. Transporting such an individual would not be illegal.
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across state lines. Even on a motion to dismiss, we are not required to credit mere speculation. See Twombly, 550 U.S. at 545.
c) Pleading of the RICO Encouraging Predicate
Encouraging illegal immigration is prohibited as follows:
Any person who—
. . . .
(iv) encourages or induces an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law; . . .
8 U.S.C. § 1324(a)(1)(A)(iv). When done for monetary gain, this is a RICO predicate act. 18 U.S.C. § 1961(1)(F).
We have held that, to make out a claim of ―encouraging,‖ Plaintiffs must prove that Wal-Mart engaged in an ―affirmative act that served as a catalyst for aliens to reside in the United States in violation of immigration law when they might not have otherwise.‖ DelRio-Mocci v. Connolly Properties Inc., 672 F.3d 241,
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249 (3d Cir. 2012); see also United States v. Henderson, No. 09-10028, 2012 WL 1432552, at *17 (D. Mass. Apr. 25, 2012) (―[I]n light of the interpretation of the charging statute recently provided by the Third Circuit in DelRioMocci, I am satisfied there is no question that those [jury] instructions were erroneous because they were too open textured and did not require the jury to find substantiality to any encouragement or inducement.‖).
Plaintiffs do not allege that they would not or could not have resided in the United States without having been employed by Wal-Mart. Moreover, while the plaintiffs did make allegations against various cleaning contractors that might be sufficient to state a claim of encouraging, ―the complaint fails to allege, as it must, that Wal-Mart took affirmative steps to assist Plaintiffs to enter or remain unlawfully in the United States, or that Wal-Mart agreed to undertake conduct with the purpose of unlawfully encouraging undocumented aliens.‖ Zavala, 393 F. Supp. 2d at 308. Thus, Plaintiffs cannot show that Wal-Mart‘s conduct incited aliens to remain in this country unlawfully when they otherwise might not have done so, and they therefore have not alleged that the company engaged in conduct sufficient to constitute encouraging or inducing.
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d) Pleading of the RICO Harboring Predicate
Harboring illegal immigrants is prohibited as follows:
Any person who—
. . . .
(iii) knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law, conceals, harbors, or shields from detection, or attempts to conceal, harbor, or shield from detection, such alien in any place, including any building or any means of transportation; . . .
8 U.S.C. § 1324(a)(1)(A)(iii). When done for monetary gain, this is a RICO predicate act. See 18 U.S.C. § 1961(1)(F).
Plaintiffs‘ Second Amended Complaint alleges one set of facts that could plausibly support a claim of harboring. Plaintiffs allege that, at Wal-Mart‘s store in Kansas City, Missouri, Wal-Mart allowed ―undocumented aliens to sleep in a back room in the store and to keep their personal belongings there knowing (or acting in reckless disregard of the fact) that
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they were undocumented aliens[.]‖ Giving Plaintiffs the benefit due their complaint on a motion to dismiss, we will assume Plaintiffs are alleging that Wal-Mart thereby provided housing to these cleaners (rather than simply a place to rest).
Even if we assume that these facts support a harboring claim, Wal-Mart cannot be held responsible for the actions of a single store manager in Missouri in allowing illegal immigrants to live in the back of the store while working there as cleaners. Plaintiffs do not claim that this decision was ratified by Wal-Mart senior executives, that it was common practice at Wal-Mart stores, or that it was within the manager‘s actual or apparent scope of authority. See United States v. MacDonald & Watson Waste Oil Co., 933 F.2d 35, 42 (1st Cir. 1991) (―A corporation may be convicted for the criminal acts of its agents, under a theory of respondeat superior . . . where the agent is acting within the scope of employment.‖); United States v. Demauro, 581 F.2d 50, 54 n.3 (2d Cir. 1978) (―Under a respondeat superior theory of corporate criminal liability, the master‘s liability would depend on whether the servant‘s acts were within the ‗scope of the employment.‘ See Prosser, Torts 351 (1955). As Professor Prosser has described it, to be within the scope of the employment, the ‗servant‘s conduct‘ must be ‗the kind which he is authorized to perform, occurs substantially within the authorized limits of time and space, and is actuated at least in part, by a
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desire to serve the master.‘ Id.‖). Plaintiffs similarly fail to allege actions by Wal-Mart that would constitute aiding and abetting of harboring.
e) Pleading of the RICO Money Laundering Conspiracy Predicate
We agree with Plaintiffs that they have plausibly alleged a claim of conspiracy to commit money laundering. But a single predicate act is not a pattern of predicate acts and therefore cannot support a RICO claim. Thus, we agree with the District Court that Plaintiffs have failed to state a claim.
Plaintiffs allege that Wal-Mart paid its contractors with full knowledge that those contractors were hiring illegal immigrants to work in Wal-Mart‘s stores. Plaintiffs support this contention with further allegations that two senior Wal-Mart executives made comments that could be understood as acknowledging that the contractors had hired and would continue to hire illegal immigrants. In fact, one of these executives encouraged one of the cleaning contractors to form multiple companies so that contracts and payments could be distributed over a greater number of recipients. This suggestion was allegedly made shortly after a federal immigration sweep resulted in the detention of many of Wal-Mart‘s cleaners.
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Money paid to the ―shell‖ companies would facilitate the hiring of illegal workers. Because WalMart is alleged to have known that many of those workers were illegal and that the companies would continue to hire illegal workers in the future, its intent to promote such activity can be inferred. Therefore, Plaintiffs have stated a claim for money laundering because Wal-Mart had the ―intent . . . to promote the carrying on of specified unlawful activity‖ and ―conduct[ed] or attempt[ed] to conduct a financial transaction involving . . . property used to conduct or facilitate specified unlawful activity[.]‖ 18 U.S.C. § 1956(a)(3). Unlike paragraph (a)(1) of the money laundering statute, paragraph (a)(3) does not require that the money used be the proceeds of illegal activity. Instead, the funds can be ―property used to conduct or facilitate specified unlawful activity.‖ 18 U.S.C. § 1956(a)(3). And these funds were allegedly used to conduct or facilitate the hiring of illegal immigrants.
But one predicate act does not constitute a RICO pattern. See 18 U.S.C. § 1961(5) (―[A] ‗pattern of racketeering activity‘ requires at least two acts of racketeering activity[.]‖).10 Therefore, we agree with the
10 We note that Plaintiffs, for whatever reason, have only pled a conspiracy to commit money laundering, not money laundering itself. (A640) Even if we assume that acts of money laundering resulted from this conspiracy,
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District Court that the Plaintiffs have failed to state a claim.
f) Pleading of the RICO Immigration Conspiracy Predicates We have concluded that Plaintiffs‘ allegations are insufficient to directly implicate Wal-Mart in the predicate acts of transporting, encouraging, or harboring. But Plaintiffs do allege facts that might support a conclusion that Wal-Mart‘s cleaning contractors engaged in these acts. Plaintiffs also allege that Wal-Mart conspired with those contractors. They support that claim with specific allegations that Wal-Mart executives acknowledged that contractors were hiring and would continue to hire illegal immigrants and that those contractors would continue to be hired by Wal-Mart. At most, though, the facts alleged by the Plaintiffs constitute a conspiracy with the object of saving money through illegal hiring. Even drawing all reasonable inferences in their favor, Plaintiffs have not alleged facts sufficient to support a conspiracy with the purpose of transporting or
Plaintiffs have not claimed those acts themselves as RICO predicates.
40

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 41 of 49 PageID: 11195
harboring illegal immigrants or encouraging illegal immigration.11
C. False Imprisonment
Plaintiffs‘ false imprisonment claims survived Wal-Mart‘s initial motion to dismiss. Wal-Mart subsequently offered affidavits asserting that it locked its doors at night to provide security for its staff and merchandise, that managers were often available to open locked doors, and that Wal-Mart had accessible emergency exits, as required by state and federal law. Wal-Mart also argued that Plaintiffs‘ repeated return to stores where they were ―imprisoned‖ constituted consent.
11 Whether Plaintiffs‘ allegations in fact support claims of illegal hiring or conspiracy to commit illegal hiring is not before us, and is not an issue we purport to resolve. We note, though, that the intent element required for establishing an illegal hiring violation is difficult to meet, a difficulty recognized by our sister circuits. See, e.g., Walters v. McMahen, __ F.3d ____, 2012 WL 2589229, at *4 (4th Cir. 2012). Given Plaintiffs‘ failure to plead a conspiracy to commit illegal hiring (and the insufficiency of Plaintiffs‘ allegations with respect to the conspiracies they did plead), we also have no occasion to consider whether predicate acts committed by co-conspirators in foreseeable furtherance of an alleged conspiracy predicate would themselves be RICO predicate acts. Cf. Pinkerton v. United States, 328 U.S. 640 (1946).
41

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 42 of 49 PageID: 11196
In response, Plaintiffs: (1) cited specific instances where they wanted to leave and managers were unavailable or refused to let them leave; (2) noted that no one ever showed them the location of emergency exits and their minimal proficiency in English would make it difficult or impossible to find them on their own; and (3) argued that Wal-Mart had an interest in concealing emergency exits to prevent theft of merchandise and discovery of the illegal workers by federal agents. On summary judgment, the District Court found Wal-Mart‘s assertions regarding the presence of emergency exits dispositive, as false imprisonment cannot occur where there is a safe alternative exit. Zavala v. Wal-Mart Stores, Inc., No. 035309, 2011 WL 1337476 (D.N.J. Apr. 7, 2011). We agree with the District Court‘s conclusion, though we will expand on the District Court‘s analysis.
Federal Rule of Civil Procedure 56 requires the court to render summary judgment ―if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.‖ Fed. R. Civ. P. 56(a). ―[T]his standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.‖ Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). An issue of material fact is ―genuine‖ if the evidence is such that a reasonable jury could return a
42

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 43 of 49 PageID: 11197
verdict for the nonmoving party. See id. at 257. ―We exercise plenary review over a District Court‘s grant of summary judgment and review the facts in the light most favorable to the party against whom summary judgment was entered.‖ Beers-Capitol v. Whetzel, 256 F.3d 120, 130 n.6 (3d Cir. 2001).
As this is a state law claim, the first question to be resolved is: what state law should be applied? After performing a choice-of-law analysis, the District Court applied New Jersey law. Zavala, 393 F. Supp. 2d at 333. We believe the District Court was correct in its choice of New Jersey law, and Plaintiffs do not dispute its application.
The majority of Plaintiffs‘ false imprisonment claims fail because Plaintiffs impliedly consented to their ―imprisonment.‖ Apparently from the very beginning of their employment, Plaintiffs were aware that Wal-Mart‘s policy was to close and lock the main doors of its stores when they are not open for business. Plaintiffs nevertheless chose to continue coming to work. They do not allege that they objected to the locked-door policy, nor do they allege that they requested a manager be available during their shift to open the doors. Continuing to come to work under these conditions is ―conduct . . . reasonably understood by another to be intended as consent‖ and is therefore ―as effective as consent in fact.‖
43

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 44 of 49 PageID: 11198
Restatement (Second) of Torts § 892.12 As such, Plaintiffs ―cannot recover in an action of tort for the conduct or for harm resulting from it.‖ Id. at § 892A.
But consent can be withdrawn, and Plaintiffs allege two instances when they wanted to leave but were unable to do so. Teresa Jaros alleges that she was sick and wanted to leave, but no manager was available to open the door. Petr Zednik alleges that he had a toothache, asked to leave, and was told he could not. He also alleges that he believed his manager, a ―muscular‖ ―blond‖ man, would assault him if he attempted to leave.
Jaros‘ consent likely encompasses the incident she alleges. By the time of her illness, she knew that she must work in a locked store for the duration of the shift. She knew that a manager would often be absent and therefore unable to open the door should a problem arise. (PSA211) Her consent arguably includes that aspect of her work. Consent only terminates ―when the actor
12 The New Jersey courts make frequent use of the Restatement, including in resolving false imprisonment cases. See, e.g., Freeman v. State, 788 A.2d 867, 877 (N.J. Super. Ct. App. Div. 2002); Fair Oaks Hosp. v. Pocrass, 628 A.2d 829, 836 (N.J. Super. Ct. Law Div. 1993). We have not seen any indication that the portions of the Restatement upon which we rely are contrary to New Jersey law.
44

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 45 of 49 PageID: 11199
knows or has reason to know that the other is no longer willing for him to continue the particular conduct.‖ Restatement (Second) of Torts § 892A cmt. h. Since Wal-Mart was unaware that Jaros wanted to leave (because no manager was there), Jaros could not terminate her consent.
Regardless, Jaros‘ complaint and Zednik‘s complaint are resolved by the availability of emergency exits. ―To make the actor liable for false imprisonment, the other‘s confinement within the boundaries fixed by the actor must be complete. . . . The confinement is complete although there is a reasonable means of escape, unless the other knows of it.‖ Restatement (Second) of Torts § 36. While both Jaros and Zednik disclaim knowledge of the emergency exits, such knowledge is properly imputed to them, even over their proclaimed ignorance and even on summary judgment. Federal Rule of Evidence 201 permits judicial notice of facts ―generally known within the trial court‘s territorial jurisdiction‖ and we have noted that this includes ―matters of common knowledge.‖ See Gov’t of Virgin Islands v. Gereau, 523 F.2d 140, 147 (3d Cir. 1975). Courts have used judicial notice to establish facts in similar situations. See Williams v. Kerr Glass Mfg. Corp., 630 F. Supp. 266, 270 (E.D.N.Y. 1986) (taking judicial notice of the distance between federal courts in New York and Pennsylvania and the numerous means of transportation between them); Penthouse Int’l, Ltd. v.
45

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 46 of 49 PageID: 11200
Koch, 599 F. Supp. 1338, 1346 (S.D.N.Y. 1984) (taking judicial notice of the ―layout and physical characteristics‖ of the New York City subway system, which the judge rode daily to work).
Emergency exits are by regulation a common feature of commercial buildings in the United States. We agree with the District Court that ―it appears . . . indisputable that these emergency exits are required by law to be clearly marked, easily accessible, and unobstructed.‖ Zavala, No. 03-5309, 2011 WL 1337476, at *1 (internal quotation marks omitted). We conclude that Jaros and Zednik must have been aware of the existence of emergency exits as a general feature of buildings, and therefore they must have been aware that emergency exits were likely to exist in the stores in which they worked. A reasonable jury could not conclude otherwise.
The question remaining is whether emergency exits were in fact available and unobstructed at the WalMart stores in question. Wal-Mart has offered evidence of the availability and unobstructed nature of emergency exits in its stores. Plaintiffs have not directly rebutted this evidence. They have merely offered speculation that Wal-Mart had motive to conceal any emergency exits. But Plaintiffs do not actually demonstrate that the exits were absent or obstructed in any way. Judgment in favor of Wal-Mart is appropriate.
46

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 47 of 49 PageID: 11201
Plaintiffs cannot succeed by advancing a defense that leaving through the emergency exit would trigger an alarm or potentially result in the loss of their jobs. Regarding the alarm, ―it is unreasonable for one whom the actor intends to imprison to refuse to utilize a means of escape of which he is himself aware merely because it entails a slight inconvenience[.]‖ Restatement (Second) of Torts § 36 cmt. a; Richardson v. Costco Wholesale Corp., 169 F. Supp. 2d 56, 61 (D. Conn. 2001) (―The fact that opening the employee exit door would result in an alarm sounding and possible employee discipline does not give rise to an inference that actual confinement or threatening conduct took place.‖). Nor is potential loss of employment a sufficient threat to constitute false imprisonment. See Maietta v. United Parcel Serv., Inc., 749 F. Supp. 1344, 1367 (D.N.J. 1990) (concluding an employee‘s concern that he would lose his job if he exited an interview with company investigators was insufficient to support a claim for false imprisonment under New Jersey law), aff’d 932 F.2d 960 (3d Cir. 1991); Richardson, 169 F. Supp. 2d at 61-62 (―Moral pressure or threat of losing one‘s job does not constitute a threat of force sufficient to establish that plaintiffs were involuntarily restrained.‖).
The only remaining issue is Zednik‘s claim that when he approached his manager and was denied permission to leave, he ―knew that [the manager] would assault [him] if [Zednik] tried to escape through any door
47

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 48 of 49 PageID: 11202
that would let [him] out.‖ Zednik asserts that the manager wanted the store clean for the impending visit of a Wal-Mart executive. But Zednik‘s sole evidence of the manager‘s supposed violent tendencies is that the manager ―is a muscular man (with blond hair)[.]‖ We need not credit this statement in any way.
In an earlier declaration, Zednik relates the toothache story and the request made to and denied by his manager, but curiously omits any belief that his manager would assault him. It is only in his third supplemental declaration – filed only a few weeks after Wal-Mart moved for summary judgment – that Zednik mentions the prospect that his manager might randomly assault him. Even on summary judgment, we need not credit a declaration contradicting a witness‘ prior sworn statements. See Martin v. Merrell Dow Pharms., Inc., 851 F.2d 703, 705 (3d Cir. 1988); see also Jiminez v. All Am. Rathskeller, Inc., 503 F.3d 247, 251-54 (3d Cir. 2007) (discussing the sham affidavit doctrine). While not precisely contradictory, Zednik‘s omission of such a crucial fact is highly questionable.
But even absent these suspicious circumstances, we conclude that no reasonable jury could credit Zednik‘s speculative statement that his manager would assault him had he tried to leave. Zednik offers no evidence in support of the statement. He does not allege that the manager had a propensity for violence. And he
48

Case 2:03-cv-05309-GEB-MCA Document 276-1 Filed 08/31/12 Page 49 of 49 PageID: 11203
does not allege that the manager overtly or impliedly threatened him. Thus, summary judgment was appropriate. V. Conclusion
Over the course of eight years and a minimum of four opinions, the District Court rejected final certification of an FLSA class, rejected the RICO claim on several grounds, and rejected the false imprisonment claim on the merits. We will affirm.
49

 
 Case 2:03-cv-05309-GEB-MCA Document 216 Filed 06/25/10 Page 1 of 1 PageID: 8396

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

__________________________________________

)

VICTOR ZAVALA, EUNICE GOMEZ,

)

ANTONIO FLORES, OCTAVIO DENISIO,

)

HIPOLITO PALACIOS, CARLOS ALBERTO )

TELLO, MAXIMILIANO MENDEZ, ARTURO )

ZAVALA, FILIPE CONDADO, LUIS

)

Hon. Garrett E. Brown, Jr.

GUTIERREZ, DANIEL ANTONIO CRUS,

)

PETR ZEDNEK, TERESA JAROS, JURI

)

Civil Action No. 03-5309 (GEB)

PFAUSER, HANA PFAUSEROVA, PAVEL

)

KUNC, and MARTIN MACAK, on behalf of

)

ORDER

themselves and others similarly situated,

)

)

Plaintiffs,

)

)

v.

)

)

WAL-MART STORES, INC.,

)

)

Defendant.

)

__________________________________________)

This matter having come before the Court on Plaintiffs’ motion for class certification

(Doc. No. 200) and Defendant’s cross-motion for decertification (Doc. No. 209); and the Court

having reviewed the parties’ submissions and decided the motion without oral argument pursuant

to Federal Rule of Civil Procedure 78; and for the reasons set forth in the accompanying

Memorandum Opinion;

IT IS THIS 25th day of June, 2010,

ORDERED that Plaintiffs’ motion for final class certification (Doc. No. 200) is DENIED,

and Defendant’s cross-motion for decertification (Doc. No. 209) is GRANTED.

S/Garrett E. Brown, Jr. Garrett E. Brown, Jr., Chief Judge United States District Court

 
 Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 1 of 74 PageID: 10049
EXHIBIT A to Memorandum in Support
of Motion to Approve Settlement and Dismiss
Claims

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 2 of 74 PageID: 10050

CONFIDENTIAL SEITLEMENT AGREEMENT AND GENERAL RELEASE

This entered into

Confidential Settlement by and between Felipe

Agreement and General Release ("AGREEMENT") is Condado ("Plaintiff') and WAL-MART STORES, INC.

('.WAL-MART'') (collectively "Parties").

RECITALS This AGREEMENT is made with reference to the following facts: A. WHEREAS, Plaintiff brought a Lawsuit against WAL-MART in the United
States District Court for the District of New Jersey, that is designated as Zavala, eta/. v. Wai-Mart Stores, Inc., Case No. 03-5309 (the "Lawsuit"); and B. WHEREAS, WAL-MART denies the validity of Plaintiff's claims, denies that it was Plaintiff's employer, denies any obligation to pay Plaintiff wages or any other compensation, and denies that it is subject to any liability; and C. WHEREAS, all wages allegedly due to Plaintiff are disputed; and D. WHEREAS, the Parties wish to resolve their differences without resort to further litigation; and

E. WHEREAS, WAL-MART is willing to provide Plaintiff with certain

considerations described below, which it is not ordinarily required to, provided

. that Plaintiff release WAL-MART from any claims Plaintiff have made or might

.;,

make arising out of the Lawsuit in accordance with the Release set forth in Paragraph 5, an_d. agrees to comply with the other promises and conditions set

forth in this AGREEMENT; and

F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance of the pwpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff,

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree to be legally bound by the following terms and conditions, which constitute full settlement ofany and all disputes between them: 1. Recitals: The Parties acknowledge that the "WHEREAS" clauses preceding paragraph I
are true and correct, and are incorporated herein as material parts to this AGREEMENT. 2. Definitions: Throughout this AGREEMENT, the term "WAL-MART" shall be defined
to include the following:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 3 of 74 PageID: 10051

(A) Wal-Mart Stores, Inc., as well as any subsidiary, parent company, affiliated entity, related entity, operating entity, franchise, or division of Wal-Mart Stores, Inc.; and

(B) Any officer, director, trustee, agent, employee, or insurer of an entity encompassed by subparagraph (a).

3. Settlement Sum: As consideration for signing this AGREEMENT and compliance with the promises made herein, WAL-MART agrees to pay the following sums, less deductions required by law:

{A) A single payment of twenty thousand dollars ($20,000.00) shall be made payable

as reasonable
Kricko ( .J?J.

attorney's fees
-3/til. 57/t,

and (tax

costs to Plainti:trs ID If)) (hereinafter

legal counsel: Garcia "Plainti:trs Com1sel").

and A

1099 sh~l be issued to the extent appropriate; and

(B) An aggregate amount of Three thousand seven hundred' DOLLARS ($3,700.00),

shall be made payable as damages based on claims of overtime pay allegedly due

to Plaintiff and liquidated damages pursuant to tl}e Fair Labor Standards Act.

This amount is subject to federal and state tax withholding requirements, which

will be deducted from this amount and paid to the government A 1099 shall be

issued to the extent appropriate.

·

WAL-MART shall provide the consideration identified in this paragraph 3 after receiving both (1) an original of this AGREEMENT appropriately signed and dated by Plaintiff, and (2) a Stipulation of Dismissal With Prejudice executed by Plaintiffs Counsel.

Tills AGREEMENT shall not become effective, therefore, and none of the benefits set forth in this paragraph ·will become due or payable, until after the Effective Date of this AGREEMENT (the "Effective Date" defined as the first day after WAL-MART has received from Plaintiff all of the items described in this paragraph).

4,

Consideration: Plaintiff understands and agrees that he would not receive the monies

and/or benefits specified in paragraph 3, above, but for his execution of this

AGREEMENT C>;ld the fulfillment of the promises contained herein.

5.

General Release of Claims: In exchange for, and in consideration of, the payments,

benefits, and other commitments described above, which is being executed

contemporaneously with this AGREEMENT, Plaintiff, for himself, and for each of his

heirs, executors, administrators and assigns, hereby irrevocably releases, acquits, and

forever discharges WAL-MART of and from any and all claims, rights, penalties,

demands, damages, debts, accounts, duties, costs and expenses (other than those costs

and expenses required to be paid pursuant to this AGREEMENT), liens, charges,

complaints, causes of action, obligations, or liability that were asserted in the Lawsuit or

that could have been asserted but were not asserted in the Lawsuit, whether known or

unknown, on the basis of, connected with, arising out of, or related in whole or in part to

any or all of the alleged acts, omissions, facts, matters, transactions, circumstances, and

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 4 of 74 PageID: 10052

ta(4s§crohFtet2octae1afomcte9iLUerurrm6n,rar.Le2Serwooed(ya.rndCsnbsul)tc'.ooJoiefartc(§eswRiaaSenl1nsItt.o9hCadta8ranhOTn~ttdeeh(dhqaew3Lecruc)doSaeioRtsnwre(ysecestAt,stpsilluveocdieiraiitrnmitla)sr,c.oceeeruywcndinTgrt)trhl;ahhCyeoentidl(stsyfa3h)obti;A)erhsmyrt(eGaf2isPsantL)RuullidsaantcE1eiewichr8n,EelsuitrcaMUmuiudtlfill.lfeEptySee.o,rg,N.irCbaasrTbluoet.ligynteoa§ugmnalPsle1rsaeoled9atnw,i6initonn;2eoanctr(st,iacelsfun)olefidodrsrm(edtrceCsei(icdtv4roeao,,i)duluorndel2Rtrdseol9eeIsl,aChacltUwsraOhiienv.,boS)eeocws,.deoCfbah,nan.eaenldertsl§ehines§cc2etitlrn9bia2fogafio0eUmsnr6udet.-swdhneS2rd.fi0aCooteohl7rn.r,r

\.,
\

6.

tMaaraatPomvtoptmeshrtnTsghiahliuragAmsePyosaaaaaloybeaiitbinliRkxeadnssmrnjanceeedbeehsgiTsptlLctemcnsocieatapeotfntihtivosrorfoeaimmnwtyhaeietufan,broootfn-caiettgthi'drlliilksyslorlieonlero.widaecreCtncpibpbefuyaiiptPlnsatstorriaeaub:trhellooyxuhosdeitcatdhmutbsonhiPsivifyoseangenesesltepobsnlgcenhauhtdosstrieylaritstmelefmi.ranaeywuunftptostcrstt,someguiahilu.iareoanbfea.ntxecylefntlfmdlPsthroismdtuhoegeeIltwefrnfefnaaruatreseneasodtrixitugnghrtttnrixeprhmahateoeWecetraanrhctnsnisotssdyrfpedpaotcAen.fiabiixestraelnnsphfndLyecedyebIguagtgadiis-nmqn.enrftaM,saoitiuitdgtnrhnteenhmfhtehdwsAeynhdgeaensieparatignuRciatycttaotenrgarhcearaTlemevrWghashaxbxpefp,ergioioeewswamewnanAirlrucredtafygitaedasronhLlspaimsnil,ugWnntat-nhtacerttMgseoPbyesuaaeAeneapn3,lpmdothqAaohtnLeharouinmoboycoawRt-nlebotu3lirbMdftaeaifnTihtenoigitdnnioctfaceyAWctvahsdfedesotfdete'hisR,assim,tosAaooaanhiTilrneelginnoestilLAlnsmvoasrugrt-tidhG,petiaeAeMspopinluiraxcfsriRsopvlsGeyeraue·Ao(tneela.·EsbieoisyRnrvPgtRaiWdEtnt,ealaeErhbhllWiTmraaMlesnteieAEtpylpiidrehiAnwIpereMELhtunReatnysataLrN-irthsrErayiS3faMimpt-tiaanlfTmh,ltsNMtonneFglbiAiaWneneednTaottyAdsRossgngt/rmhson,ieAtmRtelTbheleroPfnaftiLiTarf,tortvllcytoiii1toria-enenycWetmhMhm0iabryreetlnia9rieee,swmAtsnAes9trviasehdaegfiLanRnannntfofasuonhid)o-ototdtraTdef.trt

7.

AtPChleoaoiufLnrtathtiwfiAsfs'supAipbGt.reoRhTvEaahlEfle:MfmoEProlNdtaiiTiosnmn.tiisfshfsaaalgllroebefesamnayanddaenadiuntahslolurbciszlateaismntPsialamlliynatdtiheffeb'ssyaComorueonfnsoerblmethoaasmlftohovafetPijlnoaiiEnntxtlihyfifboiinnt

8.

oatsNhnifgoadantnattAyhhtoaescrtsliPiateghaismnrethmi,Peederaseenrhttmtoi:aeavhsneahdTdtahhovoeererslhnePogaolaesatrtlarsiieorngislyghdh,tirnteaatptnsehrsdraeiegtsesenixtsnecitdntlhu,atesthnirvseaduenmbswajfaeueatctrtrhertreoraodsrnf,irttteychftoitehsnoravrAteeeGxdyneeRotcodEu,pitEneoeMrrttshhooEiitsnsNheAATorGGw.thRRiesEEre EEdthMMisapEEnoNNstehTTde,,

9.

aoccGcooftonnitvoffhloneiisrcrtmntoAioensdGfpgleRiancwELifaEsaiccwMpcarolEolryvaNdniaesTdnni,ocfonePJr.ulcwareIiiinntsahdtntihiyftcehftteeaieornvlmnadew:noWtsrPoAtlTeafLrhitmni-hsMtesifoAsAftfoRaGtrthTeRiWsEoaAAEfffMNLGir-meREMwENAtEThJRMeartTssEeheNbyairtTlhewl.aeicrbthhemeosuagytaonrvieynegrspantrrieotdudvttieosaionaitnnds

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 5 of 74 PageID: 10053

10. No Admission of Liabilitx: The Parties agree that neither this AGREEMENT nor the

·,·

furnishing of the consideration for this AGREEMENT shall be deemed or construed at

anytime for any purpose as an admission by WAL-MART of any·liability or unlawful

conduct of any kind.

11. Headings: The headings of the provisions herein are intended for convenient reference only, and the same shall not be, nor be deemed to be, interpretative of the contents of such provision.

12. Modification of AIUeement: This AGREEMENT may not be amended, revoked, changed, or modified in any way, except in writing executed by all Parties. Plaintiff agrees not to make any claim at any time or place that this AGREEMENT has been verbally modified in any respect whatsoever. No waiver of any provision of this AGREEMENT will be valid unless it is in writing and signed by the party against whom such waiver is charged. The Parties acknowledge that only the General Counsel of WAL-MART has the authority to modify this AGREEMENT ~n ·behalf of WAL-MART.

13. Interpretation: The language of all parts of this AGREEMENT shall in all cases be

construed as a whole, according to its fair meaning, and not strictly for or against any of

the Parties. This AGREEMENT has been negotiated by and between attorneys for the

Parties

and

shall

not

be

construed

against

th~ ::

"draftel'"ofthe

A.GREEMENT.

14. SeverabiUty: The parties explicitly acknowledge and agree that the provisions of this AGREEMENT are both reasonable and enforceable. However, if any portion or provision of this AGREEMENT (including, .without implication of limitation. any portion or provision of any section of this AGREEMENT) is detemrlned to be illegal, invalid, or unenforceable by any court of competent jurisdiction and cannot be modified to be legal, valid, or enforceable, the remainder of this AGREEMENT shall not be affected by such determination and shail be valid and enforceable to the fullest extent pennitted by law, and said illegal, invalid, or unenforceable portion or provision shall be deemed not to be a part of this AGREEMENT. To the extent any provision herein that relates to the dismissal of Plaintiff's Lawsuit or the general release of claims described in paragraph 5 above is deemed to b~ illegal, invalid, or unenforceable, WAL-MART is not obligated to honor any of the terms set forth herein and Plaintiff shall return any amounts paid by WAL-MART.

15. Binding Nature of Agreement: This AGREEMENT shall be binding upon each of the Parties and upon their respective heirs, administrators, representatives, executors, successors, and assigns, and shall inure to the benefit of each party and to their respective heirs, administrators, representatives, executors, successors, and assigns.
16. Entire Agreement: This AGREEMENT sets forth the entire AGREEMENT between the parties hereto, and fully supersedes any prior obligation of WAL-MART to Plaintiff. The SETTLEMENT SUM described in paragraph 3 Plaintiff acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in

4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 6 of 74 PageID: 10054

connection with his decision to accept this AGREEMENT, except for those set forth in this AGREEMill IT..

PLAINTIFF IS HEREBY ADVISED THAT HE HAS A REASONABLE PERIOD OF TIME TO REVIEW AND CONSIDER TIDS AGREEMENT.

PLAINTIFF AFFIRMS THAT HE IS AUTHORIZED TO SIGN THIS AGREEMENT AND HAS CONSULTED WITH AN ATTORNEY PRIOR TO
EXECUTION OF TIDS AGREEMENT.

HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE

PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 3

ABOVE, PLAINTIFF FREELY AND KNOWINGLY, AND AFfER DUE

CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO

WAIVE, SETTLE, AND RELEASE ALL CLAIMS HE HAS OR MIGHT. HAVE

...

AGAINST WAL-MART.

ACCEPTED AND AGREED:

ia Gr.n,.
tfncho
uoo ••. ,
rr.,,.,~

STATEOF~~-&-~~9______ )

COUNTY OF Me&'ra

)

J#\lll~/~ -201/
Date

BEFORE ME, the undersigned authority on this ..12_ day of ~)JiE.r2p 201J,
personally appeared F6LifE' Q.vM-o" , known to me to be the person whose name is
subscribed to the foregoing instrwnent and signed in my presence and swore upon oath this
AGREEMENT was executed for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO BEFORE ME on this ~ day of llAIGf'U 20 IJ.,
to certify which witness my hand and seal of office.

My Commission Expires:
5

I

\: ·.

-.: . iiarie BIN 6Niill

V;)r.U. Bdtachel

·v"" tRIO PUBLICfJ ••· f ~ ?!r,.T'Tffl. JIU.IlU

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 7 of 74 PageID: 10055
ON BEHALF OF WAL-MART:
-~~~P
David P. Murray WILLKIE FARR & GALLA

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 8 of 74 PageID: 10056

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf ofthemselves and all others similarly situated,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-5309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF SETTLING PLAINTIFFS

Plaintiffs Felipe Condado, Octavio Denisio, Eunice Gomez, Victor Zavala Torres, Jiri Pfauser, and Hana Pfauserova ("Settling Plaintiffs") and Def~ndant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Settling Plaintiffs.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced an<:i Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

,t Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 9 of 74 PageID: 10057

Fair Labor Standards Act ("FLSA") and false imprisonment counts.l At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August I1, 20IO and October I, 2010. Pursuant to the Court's instructions at the August 1I, 2010 settlement conference, on August 27,2010 Wal-Mart · provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs.
See Exhibit B (August 27, 20 I0 letter from Murray to Hon. Madeline Cox Arleo attaching
settlement correspondence). On September 27, 2010 plaintiffs' counsel reported acceptances of the settlement offers by Felipe Condado, Octavio Denisio, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, and Victor Zavala Torres. See Exhibit C (September 27, 20 I0 Letter from Linsey to
Hon. Madeline Cox Arleo).2 Plaintiffs' counsel reported that named plaintiffs Petr Zednik and
Teresa Jaros rejected the respective settlement offers addressed to them. See id.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (I) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko, and (2) a payment to plaintiff in the amount ofthe respective plaintiff's alleged overtime damages,
see Exhibit B (documenting calculation of alleged damages for each Settling Plaintiff). (The
$20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of$20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.

and

The civil rights count RICO conspiracy counts

was dismissed with prejudice on October were dismissed with prejudice on August

7, 2005, and the RICO 28, 2006. On June 25,

20 I0, the Court decertified the conditional collective action.

2

Plaintiffs'

Hipolito Palacios.

counsel
See id.

reported

that

they

were

unable

to

reach

or

locate

Carlos

Tello

or

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 10 of 74 PageID: 10058

The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-
*14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (II th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs.

Respectfully submitted,

James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036
Gilberto Garcia, Esq. GARCIA AND KRICKO 68 Summit Avenue Hackensack, New Jersey 0760 I

Attomeys for. Plaintiffs By:_ _ _ _ _ _ _ _ _ _ __
By:- - - - - - - - - - - - - - - - - -
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc. By:---,T:::::hc-o_m_as_,H=-.""G:-o.-ld.,--e_n_ _ ____

-3-

..Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 11 of 74 PageID: 10059
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 Dated: [MONTH/DAYl201 0
-4-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 12 of 74 PageID: 10060

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 13 of 74 PageID: 10061

CONFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE

· This Confidentk.l Settlement Agreement and General entered into by and between Eunice Gomez ("Plaintiff'') and ("WAL-MART") (collectively "Parties").

Release ("AGREEMENT") is WAL-MART STORES, INC.

RECITALS

This AGREEMENT is made with reference to the following facts:

A. WHEREAS, Plaintiff brought a Lawsuit against WAL-MART in the United States District Court for the District of New Jersey, that is designated as Zavala, eta/. v. Wal-Mart Stores, Inc., Case No. 03-5309 (the "Lawsuit"); and

B. WHEREAS, WAL-MART denies the validity of Plaintiff's claims, denies that it was Plaintiff's employer, denies any obligation to pay Plaintiff wages or any other compensation, and denies that it is subject to any liability; and

C. WHEREAS, all wages allegedly due to Plaintiff are disputed; and

D.

WHEREAS, the litigation; and

Parties

wish

to

resolve

their

differences

without

resort

to

further

E.

WHEREAS, considerations

WAL-MART is described below,

willing which it

to provide Plaintiff with certain is not ordinarily required to, provided

that Plaintiff release WAL-MART from any claims Plaintiff have made or might

make arising Paragraph 5,

out and

of the agrees

Lawsuit in accordance with the Release set forth to comply with the other promises and conditions

in set

forth in this AGREEMENT; and

F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance ofthe purpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff,

NOW THEREFORE, in consideration ofthe herein, and other good and valuable consideration, hereby acknowledged by the Parties, the Parties agree and conditions, which constitute full settlement of any

mutual covenants and promises contained the receipt and sufficiency of which are to be legally bound by the following tenns and all disputes between them:

I.

Recitals: The Parties acknowledge that the "WHEREAS" are true and correct, and are incorporated herein as material

clauses preceding paragraph parts to this AGREEMENT.

1

2.

Definitions: to include the

Throughout following:

this

AGREEMENT,

the

tenn

"WAL-MART'

shall

be

defined

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 14 of 74 PageID: 10062

(A) Wal-Mart Stores, Inc., as well as any subsidiary, parent company, affiliated entity, related entity, operating entity, franchise, or division of Wal-Mart Stores, Inc.; and

(B) Any officer, director, trustee, agent, employee, or insurer of an entity encompassed by subparagraph (a).

3. Settlement Sum: As consideration for signing this AGREEMENT and compliance with

the promises m~tde herein, WAL-MART agrees to pay the following sums, less

deductions required by law:

.

(A) A single payment of twenty thousand dollars ($20,000.00) shall be made payable

c » as reasonable
Kricko

attorney's fees
-J/..Z$716

and (tax

costs to Plaintiff's ID #)) (hereinafter

legal counsel: Garcia "Plaintiff's Counsel'').

and A

1099 shall be issued to the extent appropriate; and

JltJ Gr.... 'dnche•
~uoo N• ,
'U~BLA·~ ·~
4.
5.

(B) An aggregate amount of Nineteen thousand seven hundred fourteen dollars and twenty eight cents ($19,714.28), shall be made payable as damages based on claims of overtime pay allegedly due to Plaintiff and liquidated damages pursuant
to the Fair Labor Standards Act. This amount is subject to federal and state tax
withholding requirements, which will be deducted from this amount and paid to the government A 1099 shall be issued to the extent appropriate.
WAL-MART shall provide the consideration identified in this paragraph 3 after receiving both (I) an original of this AGREEMENT appropriately signed and dated by Plaintiff, and (2) a Stipulation of Dismissal With Prejudice executed by Plaintiff's Counsel. This AGREEMENT shall not become effective, therefore, and none of the benefits set forth in this paragraph will become due or payable, until after the Effective Date of this AGREEMENT (the "Effective Date" defined as the first day after WAL·:MART has received from Plaintiff all of the items described in this paragraph).
Consideration: Plaintiff understands and agrees that she would not receive the monies and/or benefits specified in paragraph 3, above, but for her execution of this AGREEMENT and the fulfillment ofthe promises contained herein. General Release of Claims: In exchange for, and in consideration of, the payments, benefits, and other commitments described above, which is being executed contemporaneously with this AGREEMENT, Plaintiff, for herself, and for each of her heirs, executors, administrators and assigns, hereby irrevocably releases, acquits, and forever discharges WAL-MART of and from any and all claims, rights, penalties, demands, damages, debts, accounts, duties, costs and expenses (other than those costs and expenses required to be paid pursuant to this AGREEMENT), liens, charges, complaints, causes of action, obligations, or liability that were asserted in the Lawsuit or that could have been asserted but were not asserted in the Lawsuit, whether known or unknown, on the basis of, connected with, arising out of, or related in whole or in part to any or all of the alleged acts, omissions, facts, matters, transactions, circumstances, and

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 15 of 74 PageID: 10063

occurrences that were directly or indirectly alleged, asserted, described, set forth or referred to in the Lawsuit, whether such allegations were or could have been based on common law or equity, or on any statute, rule, regulation, order, or law, whether federal, state, or local. The Released Claims include, but are not limited to, those arising under 42 U.S.C. § 1985(3) (civil rights); (2) 18 U.S.C. § 1962(c) (civil RICO), and 29 U.S.C. § 1962(d) (RICO conspiracy); (3) false imprisonment; and (4) 29 U.S.C. §§ 206-207 (Fair Labor Standards Act). This AGREEMENT also includes a release of all claims for attorneys' fee~ and costs incurred by Plaintiffor by Plaintiff's Counsel in connection with the Lawsuit and the Settlement ofthe Lawsuit.

6. Tax Liability: Plaintiff understands that WAL-MART shall issue an IRS Fonn 1099 for

those portions of the payment specified in paragraph 3 of this AGREEMENT that are not

subject to withholding. In paying the amount specified in paragraph 3, WAL-MART

makes no representation regarding the tax consequences or liability arising from said

payment, including whether WAL-MART was Plaintiff's employer during the relevant

time period. Plaintiff understands and agrees that any and all tax liability that may be due

or become due because of the payment referenced above is her sole responsibility, and

that she will pay any such taxes that may be due or become due. WAL-MART has no

monetary liability or obligation regarding payment whatsoever (other than delivering a

valid check in the sum referenced in paragraph 3 of this AGREEMENT to Plaintiff).

Plaintiff agrees to bear all tax consequences, if any, attendant upon the payment to her of

the above-recited sums. Plaintiff further agrees to hold WAL-MART hannless from and

against any tax or tax withholdings claims, amounts, interest, penalties, fines or

assessments brought or sought by any taxing authority or governmental agency with

regard to the above recited sums. In the event WAL-MART receives written notice that

any claim or assessments for taxes, withholding obligations, penalties and/or interest

arising out of this settlement are being or will be made against WAL-MART, WAL-

MART shall promptly, after receipt of such written notice, notify Plaintiff by letter sent

to Plaintiff's Counsel.

·

7. Court Approval: Plaintiff agrees and authorizes Plaintiffs Counsel to move jointly on . Plaintiff's behalf for dismissal of any and all claims made by or on behalf of Plaintiff in the Lawsuit. The motion shall be made in substantially the same form as that in Exhibit A of this AGREEMENT.

8. No Assignment: The Parties represent and warrant that no person other than the signatories hereto had or has any interest in the matters referred to in this AGREEMENT, that the Parties have the sole right and exclusive authority to execute this AGREEMENT, and that the Parties have not sold, assigned, transferred, conveyed, or otherwise disposed ofany claim, demand' or legal right that is the subject of this AGREEMENT.
9. Governing Law and Jurisdiction: This AGREEMENT shall be governed and conformed in accordance with the laws of the state of New Jersey without regard to its conflict of laws provision. In the event Plaintiff or WAL~MART breaches any provision of this AGREEMENT, Plaintiff and WAL~MART affirm that either may institute an action to specifically enforce any term or terms ofthis AGREEMENT.

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 16 of 74 PageID: 10064

10.

caNfuonornyndtAiiusmdhcetimnofgiofssraoinfoaynnthykeoinpfcduLo.rinpasobisdieJeirtaayst:ioannThfaoedrmPtihasristsiioeAsnGabgRyrEeWeEMtAhLEa-NtMnTeAistRhheaTlrlothbfiesandAyeGelmRiaeEbdiElioMtyrEcoNornTustnnrluoaerwdtfhuaelt

II.

Headings: The.l:leadings only, and the same shall such provision.

of not

the be,

pnroorvibseiondseehmereedintoarbee,initnetnedrepdreftaotrivceonovfetnhieenctornetfeenrtesnocef

12.

WAsvacMugehGAcrroahbeRnLdeagiE-swlfeMlEiydancMiA,oavmttoReEiorortTNodnmiiThsfmoaiowecsdafdhiiktflahAelirieegbngdaaeernuedaivynte.nhamycolailTerndairnhytieuymtes:nwptloPeaeacatsymTtrs,athoiinweiedtsyxsihifcsaAytaetiicpsmGntokhtReweniisvonEroeAwiEtrrwi.GlMneprgRdilEtagNEiacNnenEeogTdMtthewhsamxEiagatetNaincvoyteTuhendtrileonsybdnooyAttbfbhtGeybheahReenaaGyEpllalfeaEmonprPMterfeayornWrEavtadilNigAeesasdCiTLo.i,no-nhMsurPatenosAlvwsafeoRbihlknteoThetoemii.dfnsf,f·

13.

PtcIhnoaertntesiPretarpsurrtaeeindetdsaa.tssiThoaahnliw:lsnhATootlGhebe,RealEaccEoncngoMsurtdEaruigNn.eegTdotoahfgaiaastlsilnbfpseataeirtrnhtmseneo"eadgfnrotaithnfiiatgset,erA"adnGodbfRynthEoaeEnt AdMstGrbEicReNttEwlTyEefsMeohnraElaoNltrtTiona.rgnaaelilynssctafasoenrsythboeef

14.

hWpadadvuopASboniaaenrrseAonrdGoltmeptivevovdLnRsrreeiri,oofams-rsEoMisivafaoidisraEonibnrclAtsndyiMiaheielloeRotalioinieoseEtbnfoTffygmfolNnPt.A:oearhtellTchfaaGbi,desTnaeiyinaRdnntaAhbottavyEreeilGsnefaer~ Ehsfpylm',Re'iaMsbadctlscEirohl,LtlEotEiletoisaboeuhNeeMrwgenrrstTteuarsEvomelfnoe.u,oaxNfaefialripsnttintTcihodThlnfooviiondoc(rsmaarhiaielnctntAbeiprhtledcdrlyheeGaoele,etubieeafoRgndlnncarteeeiEhfktnnnxauopiEjndgentsnuroeoMr,dceraAnrwewientltsEaPinGflidorbeoNtlfaeiRnhaodlrcnlTeciorgeEtoyncei)uaetroEteaostiiappnbeMfasibfrtrlmnahoeoodlEsden,epvvefh.NdWtliiaacefisslTgculircilaAooamrlaHielstnnrnmeLiieheoonnss-tashtwneouMthlhedltdreaeornaAelxbvnetlftsoteeoiRlabecntritnhnrmbTme,iybetebtdoiehiitpeseidpafaaldeeamirltntrfeimfoaoomiifgonvrneeneteauydiicd,sltlpontat,itaeabetontposindredlnnooiaysbgpvstbgrbeatpaatryityootliaoooelidpfedsrndlbtuagh,ttebihhwcatooooy5heilan,s,rr

15.

hsPBueaicirnrctsdie,eissansdgomarNsni,dnaaitnsuutdrrpaeaotosnosrfisg,Atnhregse,pirrearenesrmdeenssephtnaeattc:lilvtiieTvnsehu, iresehxAeteoicGrusthR,toeErasbEd,eMmsnueiEncfNciitseTtosrsafsotehoraasrc,sllh,abnpredaerpbatrisyenssiadgeninnndtsga.ttouivptehosen,ireeraexcshepceoucfttoitrvhsee,

16.

TntEhohnetetpirSreaelrEiteTiAedTsgoLrhenEeerMmaentEoeyn,NtraT:enpdSrTeUfhsueMilslnytAdasteGiusopcRnersEirb,sEeepMddreoiEsmnNaipnsTaeyrssa,pegrtorisaor prfaohogrbrt3heliePgtmlhaateeiinonetntsniftoofirffaeWcakAnAnyGoLRwk-iMElneEddAMgRmeEsTaNdttheoTattPoblseahhtiewnertehifeaifnns.

4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 17 of 74 PageID: 10065

connection with her this AGREEMENT.

decision

to

accept

this

AGREEMENT,

except

for

those

set

forth

in

OPLFATIINMTEIFTFOISf.'.H.EEVRIEEWBYANADDVCIOSNEDSITDHEARTTISDHSEAHGARSEAEMREEANSTO. NABLE PERIOD EAPXLGAERCIENUETTMIIFEOFNNTOA FFAFNTIDHR IMSHSAAGSTRHCEOAENTMSEUSNLHTTE.EDISW IATUHT HAONRAI ZTEtDO R NT OE Y SPIGRNI O RTHTIOS AWCAPHGROBAAOAONVIVIMVSINNEIEIDS,GS,TESEREEWPSTALLAATAETNLLCIIDO-NETMNT,TEAA,IODFRNFERTDTNE.ORTFCREEEERELIXVEESEAELCIYSTUNEHTTAAEOENLSTDLUTIMDHCKSILSSNAAAOINAGMWDGRSIREBNSEEEHGMENELMEEYHFNE,AINTTS,ATSTNOINOIDRNPTFMAAEUIRNFGLATDFHEGIITLNRRLHGAADPTTVHUHOEEE3 ACCEPTED AND AGREED:

fo.er.;W.I
dncha Ll(J() Ne. 1·
'lT.BT.A

. By: EUNJC-i=".r";.rt.lI~:M.:EiZ~ • ~ ..

STATEOF ~u~

)

COUNTY OF 1'16-?'1~0

)

l:; c\ PrN, 1'2·20\ \
Date

AspueGbrssRocEnriaEbBJMelyEdEFtaNOopTRptheEwaearesMfoderExe~,egvc!otu'hiCnteeGg:duifn@nosdrftefrtlruh.vsmezig.p.enunertdpaonsa,deustkshaniognorndiwteycndonoitnsonidmmethryeaistpitoroJen.s.bte2hene.c_retehideananeydpxepsrorswefosonsr~ee'dwi.uh.po!osUne

201L, name is oath this

to certifSyUwBhSicChRwIBitnEeDssAmNyDhaSnWd aOnRdNseTalOoBf oEfFfiOceR. E ME on this .Jl._ day of &lr..tU 20l.L,

NOT~ . .

OF \V<'I'-1\

My Commission Expires:

L~c· AL Ft>~ Uio~ Ckvz. I ~.:(fll'h-fl-1~-~
(Printed Name of Notary)

I
s

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 18 of 74 PageID: 10066
ON BEHALF OF WAL-MART:
'bvtv,') P. !VL-vtA/la-t
David P. Murray WILLKIE FARR & GALLAGH

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 19 of 74 PageID: 10067

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf ofthemselves and all others similarly situated,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-5309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF SETTLING PLAINTIFFS

Plaintiffs Felipe Condado, Octavio Denisio, Eunice Gomez, Victor Zavala Torres, Jiri Pfauser, and Hana Pfauserova ("Settling Plaintiffs") and Def~ndant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Settling Plaintiffs.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced an<:i Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

,Ct ase 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 20 of 74 PageID: 10068

Fair Labor Standards Act ("FLSA") and false imprisonment counts.l At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August I1, 20IO and October I, 2010. Pursuant to the Court's instructions at the August 1I, 2010 settlement conference, on August 27,2010 Wal-Mart · provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs.
See Exhibit B (August 27, 20 I0 letter from Murray to Hon. Madeline Cox Arleo attaching
settlement correspondence). On September 27, 2010 plaintiffs' counsel reported acceptances of the settlement offers by Felipe Condado, Octavio Denisio, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, and Victor Zavala Torres. See Exhibit C (September 27, 20 I0 Letter from Linsey to
Hon. Madeline Cox Arleo).2 Plaintiffs' counsel reported that named plaintiffs Petr Zednik and
Teresa Jaros rejected the respective settlement offers addressed to them. See id.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (I) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko, and (2) a payment to plaintiff in the amount ofthe respective plaintiff's alleged overtime damages,
see Exhibit B (documenting calculation of alleged damages for each Settling Plaintiff). (The
$20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of$20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.

and

The civil rights count RICO conspiracy counts

was dismissed with prejudice on October were dismissed with prejudice on August

7, 2005, and the RICO 28, 2006. On June 25,

20 I0, the Court decertified the conditional collective action.

2

Plaintiffs'

Hipolito Palacios.

counsel
See id.

reported

that

they

were

unable

to

reach

or

locate

Carlos

Tello

or

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 21 of 74 PageID: 10069

The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-
*14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (II th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs.

Respectfully submitted,

James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036
Gilberto Garcia, Esq. GARCIA AND KRICKO 68 Summit Avenue Hackensack, New Jersey 0760 I

Attomeys for. Plaintiffs By:_ _ _ _ _ _ _ _ _ _ __
By:- - - - - - - - - - - - - - - - - -
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc. By:---,T:::::hc-o_m_as_,H=-.""G:-o.-ld.,--e_n_ _ ____

-3-

..Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 22 of 74 PageID: 10070
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 Dated: [MONTH/DAYl201 0
-4-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 23 of 74 PageID: 10071

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 24 of 74 PageID: 10072

~

~ ~~~' i~t-1~i-· t ~0('~

: "A~
~

.

ONFIDENTIAL

SETTLEMENT

AGREEMENT

ND GENERAL RELEASE

'A.'~"o-rA.,.,enttp$nto WAL~MART \ ,

,.. his Confidential Settlement Agreement and General Release ("AGREEMENT') is

by and between Jiri Pfauser ("Plaintiff') and

STORES, INC. ("WAL-

~'R:T") (collectively "Parties").

RECITALS

This AGREEMENT is made with reference to the following facts:

A. WHEREAS, Plaintiff brought a Lawsuit against WAL-MART in the United
States District Court for the District ofNew Jersey, that is designated as Zavala, eta/. v. Wal~Mart Stores, Inc., Case No. 03-5309 (the "Lawsuit''); and

B. WHEREAS, WAL-MART denies the validity of Plaintiff's claims, denies that it was Plaintiffs employer, denies any obligation to pay Plaintiff wages or any other compensation, and denies that it is subject to any liability; and
C. WHEREAS, all wages allegedly due to Plaintiff are disputed; and
D. WHEREAS, the Parties wish to resolve their differences without resort to further litigation; and

E. WHEREAS, WAL-MART is willing to provide Plaintiff with certain considerations described below, which it is not ordinarily required to, provided that Plaintiff release WAL-MART from any claims Plaintiff have made or might make arising out of the Lawsuit in accordance with the Release set forth in Paragraph 5, and agrees to comply with the other promises and conditions set forth in this AGREEMENT; and
F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance of the purpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff,

NOW THEREFORE, in consideration of the mdtual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which· are hereby acknowledged by the Parties, the Parties agree to be legally bound by the following terms and conditions, which constitute full settlement of any and all disputes between them:

1. Recitals: The Parties acknowledge that the "WHEREAS" clauses preceding paragraph 1 are true and correct, and are incorporated herein as material parts to this AGREEMENT.

2. Definitions: Throughout this AGREEMENT, the term "WAL-MART' shall be defined to include the following:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 25 of 74 PageID: 10073

(A)

Wal-Mart Stores, Inc., as related entity, operating and

well as any subsidiary, parent entity, franchise, or division

company, affiliated entity, of Wal-Mart Stores, Inc.;

(B)

Any officer, director, trustee, agent, encompassed by subparagraph (a).

employee,

or

insurer

of an

entity

3.

Settlement Sum: As consideration for signing this the promises made herein, WAL~MART agrees deductions required by law:

AGREEMENT and compliance to pay the following sums,

with less

(A)

tKaAosrtisrhciekneaogseloxe(nt2epa2nab-ty3leam1p2aep5tnrt7oto1pro6nrfi)eatyw(teh'se;enrafetenyiednstahfaotneudrsa"cnPodlsatdisnottliolfafrP'ssla(C$ino2tu0inf,0fs'0esl0"l.)e0.g0a)Al sch1oa0ull9n9bseeslh:maalGldeabrepcaiiasysauabneldde

(B)

twFotAhwafientieohrgnvahotLegoyvrglaetdfrbioremionnugrmegratcpeSereeantnaqytantumsadiAlro(ale$eurmId4gn0s,eet94dn97oAlt5ysfsc,.h2tdF.wa4uol)helu,ibTrctsoehhhthaiiPswslollsuaiuablsilemneadntbomiedtfuofandadftteohneduedipursealcixhytsqetuuauedbnbniddljtfeearracoetapetdmsdptdrsodotaehapmvifmrseeianadagattegmeeyre.saosflbuipvanauestnerdsaddunooadslnnltaaptcrtatseloiadiattmanhtxodes

abWnodAth(L2(-)IM)aAaSnRtipTourislgahitanilolanlporooffvDtihdiisesmtAhiseGsacRloEnWsEiidMtheErPaNrtieTojundaipidcpeernoetpixfreiiecadutetielnydtsbhiyigsnPpeladarianagtnridfafp'dshaC3teoadufntbesyrelrP.elcaeiinvtiinffg,

rAfTeohGcrtiehsRivEAienEdGMtfRhrioEEsmNEpMTaPrlaE(agtNihrnaeTtpif"hsfEhawaflfllilelolcnftbiotvehteceboieDmtceaeomtmeds"uededeeesfocffreirnicpbetaiedyvdaeab,insltehtt,hheuiresenfptfoiialrrrseaat,fgtadreanarpdythhn)ae.oftEneefrfeoWcftiAtvhLee-DMbeaAnteeRfoTitfsthhsaiesst

4.

Consideration: and/or benefits

Plaintiff understands and agrees that he would not specified in paragraph 3, above, but for his

AGREEMENT and the fulfi1lq1ent of the promises contained herein.

receive the execution

monies of this

5.

autcadfhchbGnnonoeoeeaykmdrmeinnternntosepvaceoe,efrlenomwiaxrrdteuaaisppnsnxll,lledd,,otensiRrocods,sahauncfaeencnathmlstoaevdtehahuoreaaresresuggse,ebseeaoebqslesalstauyleho,doesinermfigwWdfsereeCaadiiAodnbtcslhfsittcaL,sisateoioot,tc-crmrmhnMttoaaesi,sbtnmsc,dAo:eocnorAiboRebtsmmlpIucGuTintanagiteeRsintanddsewsotEdit,xiosfewoEcpdnranhMieauusstsand,hsrt,Eninsid,eefgouogsNasanratcec,rfTsnrtrilas,isocift,bs,aoiomnshebPrtsme,gedoitlrlsraaitaaoetietnnytnbautdhaedyntytbiitrdsfhisoonfi,aianfv,re,nAttretxfrdeohcw,oGapvoerrneeRonarsrnwJhLceseaEJsiialachmdeaEabwtictseisMlcesolryssheada(neuEliotrsfimriitNtt,,enohe,islnscadTee,wwinra)roihd,hsrcntbfieoehug,eslfttlamiho,hheitennhtreesnsaogetr,stecarLh,qaknpaipocunncaewceshieoyxhentpsswmseaaoua,,ccrlnriefgtuaottainneteshnotoetsdtosisddrsrs,,,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 26 of 74 PageID: 10074
occurrences that were directly or indirectly alleged, asserted, described, set forth or referred to in the Lawsuit, whether such allegations were or could have been based on common law or equity, or on any statute, rule, regulation, order, or law, whether federal, state, or local. The Released Claims include, but are not limited to, those arising under 42 U.S.C. § 1985(3) (civil rights); (2) 18 U.S.C. § 1962{c) (civil RICO), and 29 U.S.C. § 1962(d) (RICO conspiracy); (3) false imprisonment; and (4) 29 U.S.C. §§ 206-207 (Fair Labor Standards Act). This AGREEMENT also includes a release of all claims for attorneys' fees and costs incurred by Plaintiff or by Plaintiff's Counsel in connection with the Lawsuit and !!le Settlement ofthe Lawsuit.
6. Tax Liability: Plaintiffunderstands that WAL-MART shall issue an IRS Form 1099 for those portions of the payment specified in paragraph 3 of this AGREEMENT that are not subject to withholding. In paying the amount specified in paragraph 3, WAL-MART makes no representation regarding the tax consequences or liability arising from said payment, including whether WAL·MART was Plaintiffs employer during the relevant time period. Plaintiff understands and agrees that any and all tax liability that may be due or become due because of the payment referenced above is his sole responsibility, and that he will pay any such taxes that may be due or become due. WAL-MART has no monetary liability or obligation regarding payment whatsoever (other than delivering a valid check in the sum referenced in paragraph 3 of this AGREEMENT to Plaintiff). Plaintiff agrees to bear all tax consequences, if any, attendant upon the payment to him of the above-recited sums. Plaintiff further agrees to hold WAL-MART harmless from and against any tax or tax withholdings claims, amounts, interest, penalties, fines or assessments brought or sought by any taxing authority or governmental agency with regard to the above recited sums. In the event WAL-MART receives written notice that any claim or assessments for taxes, withholding obligations, penalties and/or interest arising out of this settlement are being or will be made against WAL-MART, WALMART shall promptly, after receipt of such written notice, notify Plaintiff by Jetter sent to Plaintiffs Counsel.
7. Court Approval: Plaintiff agrees and authorizes Plaintiffs Counsel to move jointly on Plaintiffs behalf for dismissal of any and all claims made by or on behalf of Plaintiff in the Lawsuit. The motion shall be made in substantially the same form as that in Exhibit A ofthis AGREEMENT.
8. No Assignment: The Parties represent and warrant that no person other than the signatories hereto had or has any interest in the matters referred to in this AGREEMENT, that the Parties have the sole right and exclusive authority to execute this AGREEMENT, and that the Parties have not sold, assigned, transferred, conveyed, or otherwise disposed of any claim, demand or legal right that is the subject of this AGREEMENT.
9. Governing Law and Jurisdiction: This AGREEMENT shall be governed and conformed in accordance with the Jaws of the state of New Jersey without regard to its conflict of laws provision. In the event Plaintiff or WAL-MART breaches any provision of this AGREEMENT, Plaintiff and WAL-MART affirm that either may institute an action to specifically enforce any term or terms of this AGREEMENT.
3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 27 of 74 PageID: 10075
10. No Admission of Liability: The Parties agree that neither this AGREEMENT nor the furnishing of the consideration for this AGREEMENT shall be deemed or construed at anytime for any purpose as an admission by WAL-MART of any liability or unlawful conduct of any kind.
11. Headings: The headings of the provisions herein are intended for convenient reference only, and the same shall not be, nor be deemed to be, interpretative of the contents of such provision.
12. Modification of Agr,ement: This AGREEMENT may not be amended, revoked, changed, or modified in any way, except in writing executed by all Parties. Plaintiff agrees not to make any claim at any time or place that this AGREEMENT has been verbally modified in any respect whatsoever. No waiver of any provision of this AGREEMENT will be valid unless it is in writing and signed by the party against whom such waiver is charged. The Parties acknowledge that only the General Counsel of WAL-MART has the authority to modify this AGREEMENT on behalf of WAL-MART.
13. Interpretation: The language of all parts of this AGREEMENT shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the Parties. This AGREEMENT has been negotiated by and between attorneys for the Parties and shall not be construed against the "drafter" of the AGREEMENT.
14. Severability: The parties explicitly acknowledge and agree that the provisions of this APREEMENT are both reasonable and enforceable. However, if any portion or provision of this AGREEMENT (including, without implication of limitation, any portion or provision of any section of this AGREEMENT) is determined to be illegal, invalid, or unenforceable by any court of competent jurisdiction and cannot be modified to be legal, valid, or enforceable, the remainder of this AGREEMENT shall not be affected by such determination and shall be valid and enforceable to the fullest extent permitted by law, and said illegal, invalid, or unenforceable portion or provision shall be deemed not to be a part of this AGREEMENT. To the extent any provision herein that relates to the dismissal of Plaintiff's Lawsuit or the general release of claims described in paragraph 5 above is deemed to be illegal, invalid, or unenforceable, WAL-MART is not obligated to honor any of the terms set forth herein and Plaintiff shall return any amounts paid by WAL-MART.
15. Binding Nature of Agreement: This AGREEMENT shall be binding upon each of the Parties and upon their respective heirs, administrators, representatives, executors, successors, and assigns, and shall inure to the benefit of each party and to their respective heirs, administrators, representatives, executors, successors, and assigns.
16. Entire Agreement: This AGREEMENT sets forth the entire AGREEMENT between the parties hereto, and fully supersedes any prior obligation of WAL-MART to Plaintiff. The SETTLEMENT SUM described in paragraph 3 Plaintiff acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in
4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 28 of 74 PageID: 10076

connection with his decision to accept this AGREEMENT, except for those set forth in this AGREEMENT.
PLAINTIFF IS HEREBY ADVISED THAT HE HAS A RE.ASONABLE PERIOD OF TIME TO REVIEW AND CONSIDER THIS AGREEMENT.
PLAINTIFF AFFIRMS THAT HE IS AUTHORIZED TO SIGN THIS AGREEMENT AND HAS CONSULTED WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT.
HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULF1LL THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 3 ABOVE, PLAINTIFF FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE, AND RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST WAL-MART.
ACCEPTED AND AGREED:

By:

·fAt£

JIRI PFAUSE;t yJ .

STATE OF _____________ ) COUNTY OF ___________ )

11.1. 2011
Date

BEFORE ME, the undersigned authority on this _ _ day of

201_.

personally appeared

known to me to be the person whose name is

subscribed to the foregoing instrument and signed in my presence and swore upon oath this

AGREEMENT was executed for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO BEFORE ME on this _ _ day of to certify which witness my hand and seal of office.

201_,

My Commission Expires:

NOTARYPUBLIC-STATEOF _ _ _ __ (Printed Name ofNotary)

5

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 29 of 74 PageID: 10077
Be:Zne cislo overovaci knihy OC/ _,. F I - /2011 -------------------------------------------------------Ovefuji, ze pan ---------------------------------------------------------------------------------------------Jin Pfauser, oar. 23.02.1976, bytem Kamenny Ujezd, Delnicka 435, PSC 373 81,------------jehoz osobni totoznost byla prokazana platnym obcanskym prUkazem, uznal prede mnou podpis na teto listine za vlastni. -------------------------------------------------------------------------------V Ceskych Budejovicich 01.02.2011

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 30 of 74 PageID: 10078
). /llUM ON BEHALF OF WAL-MART:
\~\
David P. Murray WILLKIE FARR & GALLAGH

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 31 of 74 PageID: 10079

·~ "~'f,RT l'R.o'..

~ .-1- 0~

•"""~~•~ v~eobecne ~~:~~

ERNA DOHODA 0 VYROVNANi A VSEOBECNE VZDANi SE NAROKU

ato duvema dohoda o vyrovnam a

vzdani se naroku (,,DOHODA") je

ena mezi Jiffm Pfauserem (,,ialobce") a spoleenosti WAL-MART STORES, INC. (,WAL-

-.;.:.;;;-tv.A.RT") (dohromady ,nrany").

PREAMBULE

DOHODA je uzavrena s odkazem na misledujicf fakta:
A. ZATiMCO .lalobce podal soudni .zalobu proti spoleenosti WAL-MART u Okresniho soudu Spojenych statu pro fedenUnf okres New Jersey, ktera je
oznaeenajako Zavala a kol versus spo/ecnost Wa/-Mart Stores, Inc., cislo pripadu
03-5309 (,soudni fizenf"); a

B. ZATiMCO spoleenost WAL-MART popfra platnost mirokU .lalobce, popfn1, :Ze byla zamestnavatelem Zalobce, popira jakekoliv povinnosti zaplatit mzdy ialobci nebojakehokoliv jine nahrady a popirci, ze podlehajakekoliv odpovMnosti; a
C. ZATiMCO v~echny mzdy Udajne dluine blobci jsou spome; a
D. ZATiMCO si strany pteji vyfe~it sve rozpory bez vedenf dalsfho sporu; a
E. ZATiMCO spolecnost WAL-MART je ochotna poskytnout .zatobci urcitou nahradu )JOpsanou nfze, coz nenf befue pozadovano, za pfedpokladu, :Ze zalobce zbavi spoleenost WAL-MART jakychkoliv narokU, ktere byly vzneseny zalobcem nebo mohou vzniknout ze soudniho fizenf podle vyvazanf uvedeneho v odstavci 5, a souhlasi, :Ze dodrffjine sJiby a podmfnky uvedene v teto DOHODE; a
F. ZATiMCO DOHODA re~i spor bona fide pn podpore smyslu zakona o spravedlivjch pracovnfch podminkach, 29 U.S.C. §§ 201 et seq., a je cestna a pfimeremi k Zalobci,

NYNi TUDiZ pfi zvazeni vzajemnych funluv a slibU zde obsazenych a jineho dobreho a cenneho zvazenf, pfijeti a dostatecnosti, ktere jsou zde potvrzene stranami, strany souhlasf, ze jsou pnivne vazany misledujfcfmi podminkami, ktere vyt~afeji uplne vyrovnani jakychkoliv sporu mezi nimi:
1. Preambule: Strany stvrzujf, .ze v~ty ,ZATfMCO" pfedchazejfcf odstavci 1 jsou pravdive
a spravne ajsou zacleneny do tohoto dokumentujako zavazne casti teto DOHODY.
2. Definice: V nimci teto DOHODY termfn ,WAL-MART' je definovan tak, aby zahrnul nasledujfcf:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 32 of 74 PageID: 10080

(A)

Wal-Mart Stores, Inc., stejne jako dcefinou pfidruZenou jednotku, afiliaci, provozni spole~nosti Wal-Mart Stores, Inc.; a

spoleenost, rnatei'skou spoleenost, jednotku, franchisu nebo divizi

(B)

Jakehokoliv pi'edstavitele, feditele, ~lena spnivnf rady, nebo pojistitele jednotky zahmute do pododstavce (a).

zastupce,

zamestnance

3.

Castka vyrovnani: Pfi zvazeni za u~elern podpisu teto u~inenych, spolecnost WAL-MART souhlasi, ze zaplati odpo~et po~dovany zakonern:

DOHODY a dodrzeni slibii zde misledujfci castku ponizenou o

(A)

jF~Jaeookdrbomncopuerfla:airzin'oGe1vr0aae9rncp9eilaarpntboaaapblK:vYaetrtkivcvyykydoasai nn(da2vvk2al-pca3ied'1ftys2ilt5uins7sain1cep6rdr)naovl(radnoAnfzhlsleoa(h2jzu0ea;ns0at0u,0pp,cr0ae0v, naUfStozDap)srtraunvpuncsiefrnb~uyotzbascpsetl'ua'pt)nc.ai

(B)

ptpotcSeyidoe'tofkonSdsuatlklthujeiofc5rhcdnan(ainn4scefetrhaeknnd4ycfse7rmaoer5soza,tpd2sklmaone4ahczdimutdvlUee.eynSazavDzasyakr)saaoitrnunn~azdlatmaayopjfbnplsYaotopitcuisraeiascdnvppaaerclvaadtkcytlvnUiiftvaamyspdejciea'thne.ksaspoceFsardarsoomacrdozmddskvekluuunsolatidadcntrnaihoenpupnIeeof0tzzdi9eazr9dlanmooliobnzlra.ndcktraiyeau,ncahekba.YtesndTttravaaanavtnocobyeavudctredaioanencs~ytitakcryvndhar

(oS2bp)dourl.esttecannnioos(vtJe)nWofrA0igLsikn-MoalnuActeRentTioffDrzneOanHipOsouDskjrYyntonsuopuvi'tiyshluuohstnroayvdreunnepsoptadranpvoisnveferrnnnoazuadsavtuteptrconemzrnteo:sZtoraaldonsbytcaev~.cliob3cepoa

o(nT,bedadjtasrooZtuuDimoOddvlHuzsOmatolDouebpAcnee~ntubivdovsiezspcpnlhalenatryntnnoavese,vtc"sait.uozpvuodeppodisteadnvnoeepbjlvyaakttnpoooronpsttrdovaanotzufdadsdvtenasnvetocpvuio)yp.theeno, fdcyovuspvpleoadltenecnonesotvsttetotWomAtDoLOo-MHdsOAtaDRvYcTi

4.

Uvazenf: Zalobce cbape a souhlasi, :Ze 3 vj~e, ale po vstoupenf v platnost teto

neziska penize a/nebo DOHODY a vypln~ni

vyhody uvedene v odstavci sliM zde obsazenych.

5.

cnvpGpzapViarponoriaSnrakyppzvoyeru,ras,nsocotaktzc,hbbn'luaiareyvnjepndscecsmeoonee,ehduz,zeceobadvhvnvdtadnyen,~vzmaisycihdovesahroph,akntlsointoo,kfvvijftb,teeafzem,asneroekaUefnpddtifeydnsnsbed,a,nakauddivoverrdzcu:nodzbZaeoeenko,ldua5t~eUuy1nkzrvv:efietvytyei,Vaoyzakrdlsevlyoianotzdarnrjmeobnulnzaubvye,uiovh,oan,jhaktenotitlptsr,eyyueoasolrpneuvszbeoo,s:oviaYdlanjuiptessksanco~peoucoapnjurvpessiofarcletnisanvididettziclnnnv,vueseoWoaotcbsvtnzkaoetoAaeeiolu,nnkLzlztydfnuoam-p,iovMpeoDnaosalvettacAztOr'bietnknjneRHtosetiobnionT,O,o~aucDaskvDezstpztyOteiefOn,ihfrtHavfhoeUsrmnsodOen,eabdteDkcoavy~ahlslnlrjYayenieondnnr)ibebntu,y,aioociprckzdoelhnuvataakeeodstpzrutnlzaeraav,anojovvyntavpbandyesmarzyfelamankclbnjevy.ythi~ue,i,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 33 of 74 PageID: 10081

bud' pi'imo nebo neprimo ildajne, uplatiiovane, popsane, uvedene nebo oznacene v soudnfm fizenf, at' byla nebo mohla by-t takova tvrzeni zalozena na obecnem pravu nebo spravedlivem miroku nebo jakemkoliv narfzeni, smernici, zakonnem pfedpisu, fadu nebo .zakonu, at' uZ fedenilnim, statnfm nebo mfstnim. Anulovane nciroky zahrnuji, ale nejsou omezeny na ty, ktere vznikaji die 42 U.S.C. § 1985(3) (ob~ska prava); (2) 18 U.S.C. § 1962(c) (obcanske pravo RICO) a 29 U.S.C. § 1962(d) (zlocinne spolceni RICO); (3) neopnivneneho uvezneni; a (4) 29 U.S.C. §§ 206-207 (zakon o spravedlivych pracovnich podminkach). Tato DOHODA take zahrnuje vzdani se vsech pohledavek v souvislosti s poplatky a naklady na pravniho zastupce vzniklych m!obci nebo pravnfmu zastupci zalobce v souvislosti se soudnim pfipadem a vyrovnanim soudniho pfipadu.

6.

w Danova odpovednost: Zalobce chape, ze spolecnost AL-MART vyda formular IRS

1099 pro ucely teto platby uvedene v odstavci 3 teto DOHODY, ktere nepodlehaji

danove srazce. Pfi vyplacenf castky uvedene v odstavci 3 spolecnost WAL-MART

nevznasf namitky v souvislosti s danovjmi dusledky nebo odpovednosti vzeslou z i'eeene

platby, vcetne toho, zda spolecnost WAL-MART byla zamestnavatelem :lalobce behem

ptfslusne doby. Zalobce chape a souhlasi, ze jak.akoliv daiiova odpovednost, ktera je

povinna nebo se povinnou stane kvuli platbe uvedene v:Yse, je jeho v:Yhradni

odpovednosti a ze zaplati jakekoliv dane, ktere mohou b:Yt dlu:Zne nebo se dlufuymi

stanou. Spolecnost WAL-MART nema zadnou financni odpovednost nebo povinnost v

souvislosti s platbou Ginou nez dodanf Zaiobci platneho seku na castku uvedenou v

odstavci 3 teto DOHODY). Zalobce souhlasi, ze ponese vsechny danove misledky, pokud

se nejake vyskytnou, doprovazejici platbu v:Y8e uvedenych castek. Zalobce dale souhlasi,

ze uchnini spolecnost WAL-MART od jakychkoliv sti:Znosti souvisejfcfch s danemi nebo

miroky na danove srazky ze mzdy, Mstkami, uroky, pemilemi, pokutami nebo poplatky

vznesenymi nebo zadanymi ze strany danoveho uradu nebo vladnf agentury s ohledem na

v:Yse uvedene castky. V pnpade, ze spolecnost WAL-MART obdrzi pfsemnou zpravu, :Ze

jakykoliv narok nebo v:Ymera danf, zavazky vuci sra:Zkam dani ze mzdy, pokuty a/nebo

fuoky vze~le z tohoto vyrovnanf jsou nebo budou ucin~ny proti spolecnosti WAL-

MART, spole~nost WAL-MART okamzite po pi'ijeti takove pisemne zpravy oznarnf toto

:lalobci prostrednictvim dopisu zaslaneho pnivnfrnu zastupci zalobce.

7. Soudni schvaleni: Zalobce souhlasi a povefuje sveho pravnfho zastupce, aby spolecne postoupili jmenem zalobce staZeni vsech m'lroku ucinenych jmenem zalobce v rarnci soudniho fizenf. Navrh rna b:Yt ucinen v podstate stejnou fonnou, jako je v Priloze A teto DOHODY.

8. Nepfevoditelnost: Strany stvrzuji a zaru~ujf, ze zadna osoba, jimi, nez strany, ktere
podepsaly tuto dohodu, nemely nebo nemaji zadny zajem na zaJeZitostech uvedenych v teto DOHODE, ·.le strany maji v:Yhradnf pravo a exkluzivni opnivneni uvest v platnost tuto DOHODU a :Ze strany neprodaly, nepostoupily, neprevedly, nepredaly nebo jinak nenalozily s narokem, po:ladavkem nebo zakonnym pravem, ktere je pfedm~tem teto DOHODY.

9. Rozhodne wavo a iurisdikce: Tato DOHODA rna b:Yt nzena a by-t v souladu se zakony
statu New Jersey bez ohledu na ustanovenf kolize pnivnich norem. V pffpade, ze :lalobce nebo spolecnost WAL-MART poru~f jakekoliv ustanovenf teto DOHODY, :lalobce a

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 34 of 74 PageID: 10082
spole~nost WAL-MART stvrzujf, fe bud' mohou podat .zalobu na zvlastni vynuceni podmfnky nebo podmfnek teto DOHODY. 10. Neprijeti odpovednosti: Strany souhlasi, ze ani tato DOHODA, ani poskytnuti zfetele na tuto DOHODU nema bjt pova:l.ovano nebo vytvoteno kdykoliv pro jakykoliv u~el jako prijeti ze strany spol~nosti WAL-MART jakekoliv zfuuk:y nebo nezakonneho vedeni jakehokoliv druhu.
11. N@zvy paragraM: N.azvy paragrafU ustanoveni uvedenych v teto dohod~ jsou zamysleny
pouze jako vhodne odkazy a ty same nemaji byt nebo nejsou urceny, aby byly interpretacnf v souvislosti s obsahem takoveho ustanoveni. 12. Zmena dobody: Tato DOHODA nema bjt pozmenovana, odvolana, m~nena nebo upravovana, a to jak)'mkoliv zpusobem, s v)'jimkou pisemne zmeny stvrzene vsemi stranami. Zalobce souhlasi, ie nevznese zadnou stfmost, a to kdykoliv nebo kdekoliv, te tato DOHODA byla jakkoliv listne upravena. Zadne zfeknutf se ustanoveni teto DOHODY nebude platne, pokud nebude v pfsemne fonne a podepsano stranou, proti ktere je takove zfeknuti namifeno. Strany stvrzujf, te pouze hlavni pravni zastupce spolecnosti WAL-MART rna poveteni pozmenit tuto DOHODU jmenem spol~nosti WAL-MART. 13. Vyklad: Jazyk vsech casti teto DOHODY rna bjt ve vsech pnpadech vytvofen jako celek, podle sveho cestneho limyslu, a ne vylozene pro nebo proti jakekoliv ze stran. Tato DOHODA byla projednana s a mezi pravnfmi zastupci stran a nerna bjt vykladana proti ,styJizatorovi mivrhu" teto DOHODY. 14. Oddelitelnost: Strany v)'slovne stvrzuji a souhlasi, te ustanoveni teto DOHODY jsou primerena a vymahatelna. Presto, pokud jakakoliv cast nebo ustanovenf teto DOHODY (vcetn~. bez souvislosti na omezeni, jakekoliv casti nebo ustanoveni jakekoliv Msti teto DOHODY) je shledano jako nezakonne, neplatne nebo nevymahatelne u soudu pfislusne jurisdikce a nemute bjt upraveno, aby bylo zakonne, platne nebo vyrnahatelne, zbytek teto DOHODY nema byt ovlivnen takov)'m urcenfm a rna b)'t platny a vymahatelny v plnem rozsahu, ktery je povolen zlikonem, a uvedena nezakonna nebo nevymahatelmi cast nebo ustanovenf nema byt posuzovana jako Mst teto DOHODY. V rozsahu ustanoveni uvedeneho zde, ktere souvisi se skon~enfm soudniho ifzeni ze strany zalobce nebo v~eobecnym zfeknutim se mll'okU popsanych v odstavci 5 v)'se, je pova:lovano za nezakonne, neplatne nebo nevymahatelne, spolecnost WAL-MART neni povinna uznat jakekoliv podminky uvedene v teto dohod~ a zalobce rna vratit Mstku zaplacenou spolecnosti WAL-MART. 15. Zavazmi povaha dohody: Tato DOHODA je zavazna pro v~echny strany a pro jejich pnslu~ne dedice, spnivce, zastupce, vykonavatele, nasledovniky a porucniky a rna nabjt platnosti ve prospech vsech stran a jejich pffslusnych dedicli, spnlvcli, zastupcu, vykonavatelii, nasledovnikli a porucnikii.
4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 35 of 74 PageID: 10083

16.

rnZpCoalaeznlJhoetavbonrcddzain.oehunhcrtfaoAi,mzduSsajplT:eifbKTijjyaamAktonoyVeukDbtoYoOtluRivHtdOooOpVDhrDeoNOdAdAcHyhuNOajsfazDtakepUnjeioohc,pvioksukzrajoaonevmlaicaveezvletdoekorucduhzsDh,etuakOsvttHjecreriaOemn3jDyusZUosuapulcomouilnbeveetzce\niedneeosstnstrtvveairnvzWsauotmejAuetivo,LitsZ-eDMletooOsAnHtdeiRosOhpsTDoojdvlEeeyMh.Moai

ZALOBCI JE ZDE PREHODNOCENi A

UDELENA RADA, ZE MA ZVAZENi TETO DOHODY.

PRIMERENOU

DOBU

PRO

ZALOBCE STVRZUJE, ZE JE PROJEDNAL JI S PRAVNiM DOHODY V PLATNOST.

POVEREN PODEPSAT zASTUPCEM PRED

TUTO DOHODU A UVEDENiM TETO

PUNvBPRYROYAOSOTLLTEVOEEJ,ZNSVMIACTPOTOOEOZMLADNSESEZOCVTVNAzRSAoOVPOZASLCZETTNIHNJIOSi3TWEDUASZNZVLLAAEIS-LBvMEOiYUCRABVHARACETENSTZ.TAUfSSRTKTVOOUOAKTDBTUOOOc,HDAKDONSTODETEHUKROAYESDEPAUMRZAvAIVYMNZHPEENLOBRAADOELTYMONMSOUZUTSVRZITEiEC,ADIMEASNPBiEOTYE,

PRIJATO A SCHVALENO:

Podpis:

JiR

____':" " " '.
fPFAUSER

.

.:. f;i1~t-~4fiJ'" "/_ , f f1L

_

_

_

_

_

_ _

STAT _ SPRAVN~I~O-B_V_O_D _ _ _ _ _ _ _ _ __ _

)

)

Datum

v uddcooeksltuyamvaielzPanvRtauEzaDenEpiozdMdeepNvsOaynjUaod, fvennfmzeeem'p.pfmo:idteoempzsnnaoansmatiaoajpaorkadovpnfoiessnaoahbnaou,stojoe,bja.izzedjtnmaetoenDoOjeHOuvDeAdenb2oy0l1a

, se osobne ptedchozim stvrzena pro

PODEPSANO A ODPRfSAHNUTO oveteno mou rukou a razitkem kancelare.

PREDE

MNOU

dne

___

201_

stvrzeni

je

Me opravnenf vypr~f:

VEREJNY NOTAi'i - STAT- - - - -
(Jmeno notare v ti§tene podobe)

5

Case 2:03-/ .c. v-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 36 of 74 PageID: 10084
Beine cislo ovefovacf knihy OC/ - lt> ~, I 2011 ------------------------------------------------------()vefllji, ~ ~ -------------------------------------------------------------------------------------------Jifi Pfauser, oar. 23.02.1976, bytem Kamenny Ujezd, Delnicka 435, PSC 373 81,--------------jehoz osobnf toto:lnost byla prokazana platnym obcanskYill prUkazem, uznal pfede mnou podpis na teto listine za vlastni. ---------------------------------------------------------------------------------V CeskYch Budejovicfch 01.02.2011
~(fDtJl
Mgr. Robert Prochazka
no tar

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 37 of 74 PageID: 10085
David P. Murray WILLKIE FARR & GALLAGHER L P

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 38 of 74 PageID: 10086

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 39 of 74 PageID: 10087

~~.~.:-,~~~

.

·~

NFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE

0 ~AN.<lT1>.~.~ 0~0/¢:

This

Confidential

Settlement

Agreement

and

General

Release

.
("AGREEMENT'')

is

• K ntered into by and between Hana Pfauserova (''Plaintiff') and WAL-MART STORES, INC.

("WAL-MART") (collectively "Parties").

RECITALS

This AGREEMENT is made with reference to the following facts:

A. WHEREAS, Plaintiff brought .a Lawsuit against WAL-MART in the United States District Court for the District of New Jersey, that is designated as Zavala, et al. v. Wal-Mart Stores, Inc., Case No. 03-5309 (the "Lawsuit"); and
B. WHEREAS, WAL-MART denies the validity of Plaintiff's claims, denies that it was Plaintiff's employer, denies any obligation to pay Plaintiff wages or any other compensation, and denies that it is subject to any liability; and
C. WHEREAS, all wages allegedly due to Plaintiff are disputed; and
D. WHEREAS, the Parties wish to resolve their differences without resort to further litigation; and

E. WHEREAS, WAL-MART is willing to provide Plaintiff with certain considerations described below, which it is not ordinarily required to, provided that Plaintiff release WAL-MART from any claims Plaintiff have made or might make arising out of the Lawsuit in accordance with the Release set forth in Paragraph 5, and agrees to comply with the other promises and conditions set forth in this AGREEMENT; and
F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance of the pwpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff, .

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree to be legally bound by the following terms and conditions, which constitute full settlement of any and all disputes between them:
I. Recitals: The Parties acknowledge that the "WHEREAS'' clauses preceding paragraph I are true and correct, and are incorporated herein as material parts to this AGREEMENT.
2. Definitions: Throughout this AGREEMENT, the term "WAL-MART'' shall be defined to include the following:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 40 of 74 PageID: 10088

(A)

WaJ-Mart Stores, Inc., as related entity, operating and

we11 as any subsidiary, parent entity, franchise, or division

company, affiliated entity, of Wal-Mart Stores, Inc.;

(B)

Any officer, director, trustee, agent, encompassed by subparagraph (a).

employee,

or

insurer

of

an

entity

3.

dtSheeedttulpcetrmioomennsistreeSsquummir:aeddAebsyhcleoarnwesi:ind,erWatiAonL-fMorAsRigTninaggrtheeiss

AGREEMENT and compliance to pay the fo11owing sums,

with Jess

(A)

tKaAosrtishrciekneaogesloxe(nt2epa2nab-ty3leam1p2aep5tnrt7oto1pro6nrfi)eatyt(weh'se;enarfetneyiednstahfaotneudrsa"cnPodlsatdisnotltoliafrfPssl(aC$ion2u0t in,f0sf0esl0"l.)e0.g0a)Al schIoa0Hu9n9bseeslh:maUaGdeabrepcaiiasysauabneldde

(B)

twFonAhvaieinntiehregrhttaoyiLogvmlagecdebrerieonnnpgrmgtaasyteSre(ent$aqat4alnulm,edAi1rga7oere6umIdd0.ns9el9ty0n9A)tods,scf,uhste.wahFlaohltlouilbTcrehbPheitilshswasmoiiunaulaeltmsiddabfoenfetuodapndnatteohdydneaiuslebeicqlxteshuetueudiadbnnsajtfdertdarecoepadtmdpmtrdoaotsahgpemievfrseisaeadagntbemeetray.sasoleupsdinuaxtrnosadndunoacdsnlllttaaapirtatmseoidsattahntooxedf

abWnodAth(L2(-)IM)a AaSnRtipToursilgahitaniloalnlporooffvDtihdisiesmtAhiseGsacRloEnWsEiidMtheErPaNrteiTojunadipidcpeernoetpxifreiiecadutetielnyd

this paragraph 3 after receiving
signed and dated by Plaintiff, by Plaintiff's Counsel.

ArfTeohGcrtieRhsivEAienEdGMtfRhrioEEsmNEpTMaPrlaE(agtiNhrneaTtpif"hsfEhawaflflliellolcnftbiqtvehteceboiDemtceaeomtmeds"uededeeseofcffreirnicpbetaeidyvdaeabi,nsltehtt,hheiuresenfptfoiialrrrseaat,fgtdareanarpdythh)nae.oftEneefrfeoWcftAitvhLee-DMbeaAnteeRfoTitfsthhsaiesst

4.

AaCnGodnR/osEirdEebMreaEnteiNofinTts:anPsdplaethicneitfiiffeufdlfuiniJidnmerespntatarnoadfgstrhaaepnhpdroa3mg,riesaeebssotcvhoean,ttasbihnueet dwfhooeurrledihnne.ort

receive the execution

monies of this

5.

autcadfhhcnbGnonoeeoaeykmdrmeitnnenrnotpesvacoee,erflneowmaxirrdtuaeipasnnpsllx,lledd,,toensiooRrcds,hsaanufcaeecannthmstlavotedheahueoraaerressuggse,beaseeeboqsellassatulye,ohdoesinriegmfWfwdsereeaaCdAiiodnbsctlfLhsittca,asisteoo~ioct,tcrmrmnhttoMaase,ibnst,cmdsAo:oencoriAbRoebtsmlcmpuuIGTintiangtaeseRitnasdnwdseotdEi,tixoewfsoEcpndraniheMausustsn,hardst,niEsnd,iefeoguoagsNasrnatccer,fTsntirlrass,iciotf,,sabioomnshbemPrtsegei,odtllrrasaitaaoetteitynntaunbdhaeyndttyirbtidshsiofoni,faaifvn,re,Anttretxrfdohecw,GaopveronreeRoanrsrnLwelchsaEelsliacaehaEedabtwrticsiessMlecolssryedha(nauelEioftsrimrii,tNtt,neo,ehislacnTdseeww,nira)rdiohh,crsntibfoeeuhg,flestlmtaoihheh,ietnrntehesnsoagtree,satcrLh,aknqpiapocnncuaewcehseoixyhenptsswsemaoaau,,ccrlnrifeagtouttiannhestetonoedtstoessdrsrd,,r,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 41 of 74 PageID: 10089

occurrences that were directly or indirectly alleged, asserted, described, set forth or referred to in the Lawsuit, whether such allegations were or could have been based on common law or equity, or on any statute, rule, regulation, order, or law, whether federal, state, or local. The Released Claims include, but are not limited to, those arising under 42 U.S.C. § 1985(3) (civil rights); (2) 18 U.S.C. § 1962(c) (civil RICO), and 29 U.S.C. § 1962(d) (RICO conspiracy); (3) false imprisonment; and (4) 29 U.S.C. §§ 206-207 (Fair Labor Standards Act). This AGREEMENT also includes a release of all claims for attorneys' fees and costs incurred by Plaintiff or by Plaintiffs Counsel in connection with the Lawsuit and the Settlement of the Lawsuit.

6.

Tax Liability: Plaintiffunderstands that WAL-MART shall issue an IRS Fonn 1099 for

those portions of the payment specified in paragraph 3 ofthis AGREEMENT that are not

subject to withh')lding. In paying the amount specified in paragraph 3, WAL-MART

makes no representation regarding the tax consequences or liability arising from said

payment, including whether WAL-MART was Plaintiff's employer during the relevant

time period. Plaintiff understands and agrees that any and all tax liability that may be due

or become due because of the payment referenced above is her sole responsibility, and

that she wil1 pay any such taxes that may be due or become due. WAL-MART has no

monetary liability or obligation regarding payment whatsoever (other than delivering a

valid check in the sum referenced in paragraph 3 of this AGREEMENT to Plaintiff).

Plaintiff agrees to bear all tax consequences, if any, attendant upon the payment to her of

the above-recited sums. Plaintiff further agrees to hold WAL-MART hannless from and

against any tax or tax withholdings claims, amounts, interest, penalties, fines or

assessments brought or sought by any taxing authority or governmental agency with

regard to the above recited sums. In the event WAL-MART receives written notice that

any claim or assessments for taxes, withholding obligations, penalties and/or interest

arising out of this settlement are being or will be made against WAL-MART, WAL-

MART shall promptly, after receipt of such written notice, notify Plaintiff by letter sent

to Plaintiffs Counsel.

7.

Court Approval: Plaintiff agrees and authorizes Plaintiff's Counsel to move jointly on

Plaintiff's behalf for dismissal of any and all claims made by or on behalf of Plaintiff in

the Lawsuit. Tlie· motion shall be made in substantiaHy the same form as that in Exhibit

A of this AGREEMENT.

8.

No Assignment: The Parties represent and warrant that no person other than the

signatories hereto had or has any interest in the matters referred to in this AGREEMENT,

that the Parties have the sole right and exclusive authority to execute this AGREEMENT,

and that the Parties have not sold, assigned, transferred, conveyed, or otherwise disposed

of any claim, demand or legal right that is the subject of this AGREEMENT.

9.

Governing Law and Jurisdiction: This AGREEMENT shall be governed and

conformed in accordance with the laws of the state of New Jersey without regard to its

conflict of laws provision. In the event Plaintiff or WAL-MART breaches any provision

of this AGREEMENT, Plaintiff and WAL-MART affirm that either may institute an

action to specifically enforce any tenn or tenns of this AGREEMENT.

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 42 of 74 PageID: 10090

I 0.

afNunoryntAiismhdeimnfgiossroifoannthyeopfcuLornipasobisdieleirtaayst:ioannThfaoedrmPtiahsristsiioeAsnGabgRyrEeWeEMtAhLEat-NMnTeAistRhheaTrllothbfiesandAyeeGlmiRaeEbdiElioMtyr EcoNornTustnrnluoaerwdtfhuaelt

conduct ofany kind.

11.

Headings: The headings only, and the same shall such provision.

of not

the be,

provisions herein are intended for convenient reference nor be deemed to be, interpretative of the contents of

12.

sWAvacMugehGcArroabheRndLaegiEJs-wfeiMiEydacnM,iAaovmttoReEioorrtNTondmiTihsfmoaoiwedcsafdhikitflaAheilreienggbdaaereneudaiyvnet.nhamycolaileTrndairnyhtieuymtes:nwptloPeaeactaysTmtsr,ahtoiinweiedtsyxshiicfsaAtyeaitipcsmGntoktheRewniisvnoEroeAwiErtrwi.GlMnpergRdilEtagNiEacNneneEogTdMtthewhsamxEiaagtetNaincvoyteuThendtrielonsydbnooyAttfbbhtGeybheaheRenaaGyElplalfeEamonprPMterefayornWrEavtdaliNigeeAssdaiCTLo.i,non-husMrPatenoslvAwsafoeiRbhlknteoTehteoimdi.fnsf,f

13.

tPcIhnoaenrtetsiPrterapsurrteaeindetdsaa.tssiThoaahnliw:lsn1ATootlGheeb,RealEcacEoncognMrusdtEariguNneegTdotoahfgaaiastlsilnbfpseataeirtrnhtsmeneeo"agdfnortaithnifiatgset,erAa"dnGobdfRytnhEoaeEnt AdMstGrEbicReNttElwTyEefsMeohnraElaolNtrtTionar.gnaaelilynssctafasoenrsythboeef

14.

WhadpadvuopASboniaeanrrseAonGrdotlemtpveivovLdnRsrreerii,omfoa-srsEoMisviafoaidisrEaonibnrcAsltndMyiiaheielloeotRalioinieEosetnbfoTffygmfNolPnto.A:eahrtelTlcfahiaG,bdesTnaeiyiaRnnntdaAhbotatvyrEeeiGlensaefbrEhsyplmfR,eeiaMsbadctlEcsirohl,tLloEtEilteiosuobeaheNeMrgwernrsttTeuarEsovmelfone.u,oxaNfaefiatrlipstnincTthioTldhnfooviiondc(osrmaairahielnctntAbieprhltceddylrheeGloaee,etubeiefaogRdnnlncatereeiEhfktnnnxauoipEjndgentsnureoor,McderanArweweintltsEaPniGfldiorbeofNtlaeinRohadlrcnleTcroigeEtoynceiu)aetroeEtaostiiapnbpeasMfibrflnrmtaedhoolodEsen,eepvvfh.NdtliWiaaceifssTgcllucriilaAomaoralHieltsnnrnmLeiiheeoonnss-taswhtneouMhtlhedltrdaeeornaAlevxbnetlftsoeteoiRalecbnrtitnnhbr,memTiybetebtdoiheiitpeseidfpaaaldeaemirtltnrfiefomaomoiifognvnerenteueaydiicd,stopllntta,iaetbaetonptoisndrlednnooiaysgbvpstrgbbeatapatryiytootlaioooelidfpesdnrdbltuagh,tteibhhwctaoooyo5ehilan,sr,r

15.

shPBueaicirnrctsdie,eissansdgomarNsni,dnaaitnsuutdrrpaeaotsonosrifsg,Atnhrsgee.prirearenesdrmeenssephtnaeattcl:ilvtiieTvnsehu, iresehxAeteoicGrusthR,toeErasbEd,eMmsnueiEcnfciNitsetTosrsafsotehorasarc,sllh,abnpredaerpbatrsyienssiadgeninnndstga.totuivptheosen,ireeraexcshepceouctftoitrvhsee,

16.

nTtEhohnetetpirSreaelEriteTiAedTsgoLrhenEeerMamentEoey,nNrtaT:enpdSrTeUfhsueMilsnlytAdasteGuisopcRnersEirb,sEeepMddreoiEsmnNaipsnTaeyrssa,pegrotrisaroprfaohgorrbt3ehleiPgmtlhaaeteiinonetntsniftoofifrafeWcakAnAnyGoLwRk-iMElneEddAMgRmeEsTaNdttheoTattPobsleahhtiewnertehifeaifnns.

4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 43 of 74 PageID: 10091

connection with her decision to accept this AGREEMENT, except for those set forth in this AGREEMENT.
PLAINTIFF IS HEREBY ADVISED THAT SHE HAS A REASONABLE PERIOD OF TIME TO REVIEW AND CONSIDER TWS AGREEMENT. PLAINTIFF AFFIRMS THAT SHE IS AUTHORIZED TO SIGN THIS AGREEMENT AND HAS CONSULTED WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT. HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 3 ABOVE, PLAINTIFF FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE, AND RELEASE ALL CLAIMS SHE HAS OR MIGHT HAVE AGAINST WAL-MART. ACCEPTED AND AGREED:

By:

HANA PFAUSEROVA

Date

STATE OF ____________ ) COUNTY O F - - - - - - )

BEFORE ME, the undersigned authority on this _ _ day of

201 _,

personally appeared

, known to me to be the person whose name is

subscribed to the foregoing instrument and signed in my presence and swore upon oath this

AGREEMENT was executed for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO BEFORE ME on this _ _ day of to certify which witness my hand and seal of office.

201_,

My Commission Expires:

NOTARY PUBLIC- STATE OF - - - - -
(Printed Name of Notary)

s

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 44 of 74 PageID: 10092
J
Beine cislo ovei'ovaci knihy OC/ _,_ i'G" " /2011 --------------------------------------------------------
()vefuji, ze pauli -------------------------------------------------------------------------------------------------Hana Pfauserova, oar. 29.11.1976, bytem Kamenny Ujezd, Delnicka 435, PSC 373 81, ------jejiz osobnf totoZn.ost byla prokazana platnym obCau1sk.Ym pnlkazem, uznala prede mnou podpis na teto Iistine za vlastni. --------------------------------------------------------------------------------------V Ceskych Budejovicich 01.02.2011 -----------------------------------------------------------------------

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 45 of 74 PageID: 10093
ON BEHALF OF WAL-MART:
~~'/f.
David P. Murray WILLKIE FARR & GALLAGHER

(~00~ ~ Case~ 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 46 of 74 PageID: 10094

*~~ V~EOBECNE Pt\KC>"~c ~ ·.·lvcrr!-~ ~4l RNA DOHODA 0 VYROVNANi A

VZDANi SE NAROKU

'

Tato duverna dohoda o vyrovnimi a v5eobecne vzdanf uzavrena mezi Hanou Pfauserovou (,,Zalobkyne") a spole~nostf (,WAL-MART") (dohromady ,strany").

se naroku (.,DOHODA") je WAL-MART STORES, INC.

PREAMBULE

DOHODA je uzavrena s odkazem na misledujici fakta:

A.

0oOZ3zAkn-r5aTe3~sI0neM9nfhaC(oj,,OasoksoouZudZadnlaufovbraikSzlyaepnnoaeij"ek)pno;oyladcvhaelrassutsasotuuspdnopilreocianlfooesdbteunWUaplnr~of MtiaorkstpreoSlsteo~Nrneoessw,tiInJcWe.r,sAcefLys,-loMkpAtneRrpaTadjueu

B.

ZATfMCO spolecnost WAL-MART popfra ie byla zam~stnavatelem ialobkyne, popira ialobkyni nebo jakehokoliv jine nahrady odpovMnosti; a

platnost naroku ialobkyne, popira, jakekoliv poviiUlosti zaplatit mzdy a popini, ze podleha jakekoliv

C. ZATiMCO v~echny mzdy udajne dluZn.e Za.lobkyni jsou sporne; a

D. ZATIMCO si strany pfejf vyre§it sve rozpory bez vedeni dal§iho sporu; a

E.

tuvZnZevzAtaAonelhodeTrDbseafkednOMnyueHynhCeoOpiOaoDvzlpoEbssoba;apdkvonaslyioteanu~vfsncponnioseitl5ibee,oe,WanAomcssLoootuz~hhoMWlunaAesAfvnR,LfzTnz-MeibkjeneAdtoonRodueTcrt:hlfzopejtjoaniiknsaaoyeducposdholvnkisabfoknhylyooitva,nio'pizumzoated\nrmzoipakfrlpnioeiok,dbdypklokyeutknevvliraeyedduveuracn,bzieaytonzlvyuei

F.

ZATIMCO DOHODA fe§f spor bona spraved1ivych pracovnich podmfnkach, 29 pfimerena k ialobkyni,

fide pi'i U.S.C.

podpofe §§ 201 et

smyslu zakona seq., a je cestna

o a

NYNf TUDIZ pn zva:Zeni vzajemnych funluv a ceiUleho zvazeni, prijeti a dostate~nosti, ktere jsou zde jsou pravn~ vazany nasledujfcimi podmfnkami, ktere sporii mezi nimi:

slibii zde obsa:Zenych a jineho dobreho a potvrzene stranami, strany souhlasf, ze vytvareji uplne vyrovnani jakychkoliv

I.

Preambule: Strany stvrzujf, ze vety a spnivne ajsou za~len~ny do tohoto

,ZATfMCO" predchazejici odstavci 1 jsou pravdive dokumentujako zavazne Msti teto DOHODY.

2.

Definiee: V m1sledujfci:

ramci

teto

DOHODY

termin

,WAL-MART"

je

definovim

tak,

aby

zahrnul

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 47 of 74 PageID: 10095

(A)

spWproiadllen-McdneaonrstotiuSWtojareled-sMn, oaItnrktcuS.,,tosrateefsjin,lieIancjcia,.;kaoprdocveofzinnfou

spolecnost, materskou spoleenost, jednotku, franchisu nebo divizi

(B)

Jakehokoliv pfedstavitele, reditele, nebo pojistitele jednotky zahmute do

elena spravnf rady, pododstavce (a).

zastupce,

zamestnance

3.

ouCdcapinsoteckneaytcpvhoy,:rls.oapvdonolvaean~nni:oysPztAfiWkzoAvnaeLzm-eM:niAzRaTurseoluehmlapsio,dtpeiszuapteltaotf

DOHODY misledujfci

a doddenf slibu zde castku ponitenou o

(A)

FjZJaoeakd.lroonmbopkurfylaianmzreoeI:v0rGae9npa9erlcarpnitaboapaabl}vaK'tetkrvivycyykd~aoiann(da2vvk2alp-ca3fedi1tsyi2ltu5ins§7ainc1ep6mdr)aov(lrdanoanfzlhiseao(jh2ezu0na;s0a,t,0up0pn,ci0ve0,niaUztSaosDtpu)npmicveunsfZfm:abulojtbzaksspytnluaept"nc)a.i

(B)

frcpse(Soa4eodzosdesmut1larkhe7ahyzr6dlunnoz,y.9nafdm0a.zekacocUtanaeuSasndstDkaato4)jantarnovnsfuezpamarpvabpyprvyl~aaoeticcdisiaelcpidpntvlyiaaa)'etvt'cnsvkthcailisaaljfmsdpacedkr.salnoltc1aFooZoovsdsn.rrenosmadkuiczmouhkUdluda!nrelpeodso1nbaad0itknim9yze~9naienilzsorketanziaaemscdnthbzaoe.:dnYlyanotT,ravuvaekytmntaodeyiardrmanoceacvsivobactdudkhp~deafketsijoaskpltodauiondjsdcfenlcerneeeinihcmttomah\i

aoSbp(2do)rletueesnntaoi(nslto)voWerniAgi i0Ln-asMlkuoAnte~RteoTnfDmfOizaHenOpfoDssYkuyjsmtnpooiuu'ftsvluyUshhnorytamodvuepnosedtappnirosaevvmenniaomudzaavtsetmutopmzceetomstrozaandlysotabZvk:acylino~b3.kypnoe

o(nT,be.addjtsaroZotuuDimoOddlvHuisZaOtnoloD.uebpAkneynetubnidoevfvzsp§pnlealecatmnhtnonaesy,vt"vsaetZuocvuideppodiotepdnvsoeapbjnlyaaektpnvoootpsotrdmvaanttzouiadodvednsnsettoapvuvo}pct'ehei)no,.idcyovuspvpleoadltenecnonesotvsttetotWomAtDoLO-oMHdsOAtaDRvYcTi

4.

Uvazenf: Zalobkyne odstavci 3 vyse, ale obsaienych.

cbape a souhlasf, Ze nezfska po vstoupenf v platnost teto

penize a/nebo DOHODY a

vyhody uvedene v vyplneni slibu zde

5.

cnvp(pzspVijarpnoeiroanbasrykzpvoeyme,uas,oscktazcta,bbhl'naiuaieypn'jsdepncecreomeoneo,hdu,zetebodavvnvavtdndes,e}nzvfaec'Zfshdsovchmep:oahlkat,ao.ol,nuifovkjdiy,bfezatna,enesaskoraefpnvJetdidrysennse,a,bnakadddvuevozrmeubzdozwddeooedknaiestuycuezkuleven:itrv,tyeiieoVz,ayrdvaselvayynlotdiamjmmkezbulzbouoyi,uoeo,nhv,njhkaueatolpstrvn,yeouaosayrnupvbtoez:esvoiYasdraljilomtepsskeau,ueooccocjppnvseusiaiplmocet'aisidridsntiaztnlnnv,evuvoeoWocamcbsvsekzetoaAfeeoltna,konlLzynduuiaz-p,oitvMpmeonoasaletvtoaAztm'DbietckjneoRtsiOnuonboeT,caoH,unDaksvOzcpstzt}OieetefnD,'ifhrHahvteosOfmmoseOmdbeUdeiDvctyakao,hsnjllmYayiebenndmni)bl,ueu,yaooioprckzbdolunhtaaakevkdestryfozuztaelavaln,njoavn}vavebptn'yamdeayrimzpaalnclenkjyvryhui,eou,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 48 of 74 PageID: 10096

bud' pffmo nebo neprimo Udajne, uplatnovane, popsane, uvedene nebo oznaeene v soudnim rizeni, at' byla nebo mohla bYt takova tvrzeni zalo:Zena na obecnem pravu nebo spravedlivem miroku nebo jakemkoJiv narfzenf, smemici, zakonnem pfedpisu, fadu nebo zakonu, at' l1Z federa.Inim, statnfm nebo mistnim. Anulovane miroky zahrnuji, ale nejsou omezeny na ty, ktere vznikajf dle 42 U.S.C. § 1985(3) (oManska pniva); (2) 18 U.S.C. § I962(c) (obcanske pnivo RICO) a 29 U.S.C. § 1962(d) (zJocinne spolceni RICO); (3) neopnivneneho uvezneni; a (4) 29 U.S.C. §§ 206-207 (zakon o spravedlirych pracovnich podminkach). Tato DOHODA take zahmuje vzdanf se vsech pohledavek v souvislosti s poplatky a naklady na pravnfho zastupce vzniklych :Zalobkyni nebo pravnfmu zastupci zalobkyne v souvislosti se soudnim pffpadem a vyrovnanim soudniho pffpadu. 6. Danova odpovMno$t: Zalobce chape, :Ze spolecnost WAL-MART vyda fonnular IRS 1099 pro ucely teto platby uvedene v odstavci 3 teto DOHODY, ktere nepodlehaji danove sr~e. Pn vyphicenf castky uvedene v odstavci 3 spolecnost WAL-MART nevznasf namitky v souvislosti s danovymi dusledky nebo odpovMnosti vzeslou z fecene platby, vcetne toho, zda spolecnost WAL-MART byla zamestnavatelem zalobkyne behem pffs1u§ne doby. Zalobce chape a souhlasf, :Ze jakakoliv danova odpovednost, ktera je povinna nebo se povinnou stane kvilli platbe uvedene ryse, je jeji v)'hradni odpovednostf a Ze zaplatf jakekoliv dane, ktere mohou bYt dlu:Zne nebo se dlufnymi stanou. Spolecnost WAL-MART nema zadnou financni odpovednost nebo povinnost v souvislosti s platbou (jinou nez dodani :Zalobkyni platneho seku na castku uvedenou v odstavci 3 teto DOHODY). Zalobkyne souhlasi, ze ponese vsechny daiiove nasledky, pokud se nejake vyskytnou, doprovazejfcf platbu ryse uvedenych castek. Zalobkyne dale souhlasf, :Ze uchranf spolecnost WAL-MART od jak)'chkoliv stf:Znostf souvisejfcich s danemi nebo naroky na danove srazky ze mzdy, castkami, 'Uroky, pemilemi, pokutami nebo poplatky vznesenymi nebo zadan:Ymi ze strany danoveho Ufadu nebo vladni agentury s ohledem na ryse uvedene Mstky. V pripade, :Ze spolecnost WAL-MART obddf pfsemnou zpnivu, Ze jakykoliv narok nebo v)'mera danf, zavazky vuci srillam
dani ze mzdy, pokuty a/nebo "Uroky vze~le z tohoto vyrovnanf jsou nebo budou ucineny
proti spolecnosti WAL-MART, spolecnost WAL-MART okamzite po prijeti takove pfsemne zpnivy ozmimi toto zalobkyni prostfednictvim dopisu zaslaneho pravnimu zastupci :Zalobkyne.

7. Soudni schvaUenf: Zalobkyne souhlasi a pov~fuje sveho pravniho zastupce, aby spolecne postoupili jmenem Zalobkyne staten£ vsech naroku ucinenych jmenem ~lobkyne v ramci soudniho ffzeni. Navrh rna b)'t ucinen v podstate stejnou fonnou, jako je v Pfiloze A teto DOHODY.

8. Neprevoditelnost: Strany stvrzuji a zarucuji, :Ze zadna osoba, jina, nez strany, ktere podepsaly tuto dohodu, nemely nebo nemaji zadny zajem na zalezitostech uvedenych v teto DOHODE, :Ze strany maji v)'hradnf pravo a exkluzivnf opravneni uvest v platnost tuto DOHODU a :Ze strany neprodaly, nepostoupily, nepfevedly, nepi'edaly nebo jinak nenalozily s narokem, po:Zadavkem nebo zakonnym pravem, ktere je pfedmetem teto DOHODY.

9.

Rozhodne pravo a jurisdikce: Tato DOHODA rna bYt rizena a bYt v souladu se zakony

statu New Jersey bez ohledu na ustanovenf kolize pravnich norem. V pfipade, ze

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 49 of 74 PageID: 10097
:Zalobkyn~ nebo spolecnost WAL-MART poru~i jakeko1iv ustanoveni teto DOHODY, zalobkyne a spolecnost WAL-MART stvrzuji, Ze bud' mohou podat :Zalobu na zvhi§tni vynucenf podminky nebo podrninek teto DOHODY.
I0. Neprijeti odpovMnosti: Strany souhlasf, Ze ani tato DOHODA, ani poskytnutf zietele na tuto DOHODU nema byt povatovano nebo vytvoreno kdykoliv pro jakykoliv ucel jako pfijeti ze strany spolecnosti WAL-MART jakekoliv zaruky nebo nezakonneho vedeni jakehokoliv druhu.
11. N!zyy paragrafu: Nazvy paragrafii ustanoveni uvedenych v teto dohode jsou zamysleny
pouze jako vhodne odkazy a ty same nernaji byt nebo nejsou urceny, aby byly interpretacni v souvislosti s obsahem takoveho ustanoveni.
12. Zmena dohody: Tato DOHODA nema bYt pozmenovana, odvolana, menena nebo upravovana, a to jakymkoliv zpusobern, s vyjimkou pisemne zmeny stvrzene vsemi stranami. Zalobkyne souhlasi, Ze nevznese zadnou sti:blost, a to kdykoliv nebo kdekoJiv, Ze tato DOHODA byla jakkoliv ustne upravena. Zadne zfeknutf se ustanoveni teto DOHODY nebude platne, pokud nebude v pfsemne fonne a podepsano stranou, proti ktere je takove zfeknuti namifeno. Strany stvrzujf, ze pouze hlavnf pravni zastupce spolecnosti WAL-MART rna povefeni pozmenit tuto DOHODU jmenern spolecnosti WAL-MART.
13. Vyklad: Jazyk vsech casti teto DOHODY rna bYt ve vsech pffpadech vytvoren jako celek, podle sveho cestneho umyslu, a ne vyloZene pro nebo proti jakekoliv ze stran. Tato DOHODA byla projedmina s a rnezi pravnirni zastupci stran a nerna b}'t vykladana proti ,stylizatorovi mivrhu" teto DOHODY.
14. Oddelitelnost: Strany ryslovne stvrzujf a souhlasf, ze ustanoveni teto DOHODY jsou
pfimefemi a vymahatelmi. Presto, pokud jakakoliv cast nebo ustanovenf teto DOHODY
(vcetne, bez souvislosti na omezenf, jak:ekoliv Msti nebo ustanovenf jakekoliv casti teto DOHODY) je shledano jako nezakonne, neplatne nebo nevymahatelne u soudu pnslusne jurisdikce a nemuu bYt upraveno, aby bylo zakonne, platne nebo vymahatelne, zbytek teto DOHODY nema b}'t ovlivnen takorym urcenirn a rna byt platny a vymahatelny v plnem rozsahu, ktecy je povolen zakonem, a uvedena nezakonna nebo nevyrnahatelna cast nebo ustanoveni nerna byt posuzovana jako Mst teto DOHODY. V rozsahu ustanovenf uvedeneho zde, ktere souvisi se skoncenfm soudniho rizeni ze strany :Zalobce nebo vseobecnym zfeknutim se narokli popsanych v odstavci 5 vyse, je povafuvano za nezakonne, neplatne nebo nevymahatelne, spolecnost WAL-MART neni povinna uznat jakekoliv podminky uvedene v teto dohod~ a ialobce rna vratit Mstku zaplacenou spolecnosti WAL-MART.
15. Zavazna povaha dohody: Tato DOHODA je zavazna pro vsechny strany a pro jejich pfislusne dMice, spravce, zastupce, vykonavatele, nasledovniky a porucniky a rna nabYt platnosti ve prosp~ch vsech stran a jejich pffslusnych dedicu, spravcu, zastupcli, vykonavatelu, nasledovnikli a porucnfkU.
4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 50 of 74 PageID: 10098

Cela dohoda: Tato DOHODA ustanovuje celou DOHODU mezi stranami teto dohody a

pine nahrazuje jakykoliv predcMzejici zavazek ze strany spolecnosti WAL-MART vi'lci

Zalobkyni. cASTKA VYROVNANi popsana v odstavci 3 Zalobkyile stvrzuje, Ze

nespoleM na tvrzeni, sliby nebo jejfm rozhodnutim pnjmout tuto

dohody jakehokoliv DOHODU, krome

druhu jf ucinene v souvislosti s tech, ktere jsou uvedene v teto

DOH ODE.

ZALOBKYNE JE ZDE UDELENA RADA, ZE MA PREHODNOCENi A ZVAZENi TtTO DOHODY.

PRIMERENOU

DOBU

PRO

ZALOBKYNE STVRZUJE, ZE JE PROJEDNALA JI S PRAVNiM DOHODY V PLATNOST.

POvERENA PODEPSAT TUTO DOHODU ZASTUPCEM PRED UVEDENfM TtT

A O

PNUvBPRYORYAOTSOLL:ETOVEEI,NZVMSACIPTOTOOOtZMDLANSSEEZOTVCVANZRSAVDOPOZCALSZEITTNHNI3IOSTiWEDZUSAANZVLLALEIS-OBVMEYUBiCARKVHRAAYtTSNTNz.TiUAESRTKTSOOUAVKTDOTUOOBC, HOAKDODSTODNTEHUEKROYESADEUAMPzARAvVJYMNHZPEELNORBAADOETLYMNOMOUSZUTSVRZTI.EiE,CDAIAMESPNBiEOTYE,

PRJJATO A SCHVALENO:

Podpis:

~W'~~fi/¢/

HANA PFAUSEROV

STAT _ _ _ _ _ _ _ _ _ __ SPRAVN~f~O~B-V_O_D

)

)

Datum

uddcooeksltuyamvaielPzanvRtauE:l.aDenpEfozdMdeepNvsOaynjUaod, rvennfm:le.eem'p.pnomtdoeempzsnnaoamsmtiiaoajpaonkdiovpnroiessnaoahbnaou,stooje,bja:ilz.edjtnmaeteonDo OjeHOuvDeAdenb2oy0l1av_s,ptvrserezdeconhsaoozbpinrmoe

PODEPSANO A ODPR.iSAHNUTO ovefeno mou rukou a razitkem kancelafe.

PREDE

MNOU

dne

___

201~.

stvrzeni

je

VEREJNY NOTAR- STAT- - - - -

Me povefeni vypcli:

(Jmeno notate v ti§tene podobe)

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 51 of 74 PageID: 10099

Betne cislo overovaci knihy OC/ · - tfJ-- /2011 --------------------------------------------------------

HOvaentaujPi,fazeuspearnoiv-a-,--o-a--r-.-2--9-.-1-1--.1--9-7-6--,-b--y-t-e-m---K--a--m--e-n--n-y--U--j-e--z-d-,--D--e-l-n-i-c-k--a--4-3--5-,--P--S-C---3-7--3--8--1-,----------------

jejiz osobni na teto listine

toto:Znost za vlastni.

b-y--la---p--r-o-k--a-z-a--n-a--p-l-a-t-n-.-Y-m----o--b-e--a-n-s-k--y-m----p--n-i-k-a--z-e-m---,--u--z-n-a--l-a---p-r-e-d--e---m--n-o--u---p-odpis

V Ceskych Budejovicich 01.02.2011 -------------------------------------------------------------------

n

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 52 of 74 PageID: 10100
David P. Murray WILLKIE FARR & GALLAGHER

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 53 of 74 PageID: 10101

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 54 of 74 PageID: 10102

CONFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE

This Confidential Settlement Agreement and General entered into by and between Carlos Tello ("Plaintiff'') and ("WAL·MART") (collectively "Parties").

Release ("AGREEMENT") is WAL·MART STORES, INC.

RECITALS

This AGREEMENT is made with reference to the following facts:

A.

WHEREAS, Plaintiff brought a Lawsuit against WAL·MART in the

States District Court for et al. v. Wal-Mart Stores,

the District of New Jersey, that is designated Inc., Case No. 03-5309 (the "Lawsuit"); and

as

United Zavala,

B.

wcWoamHs pEPelRnaEisnaAttiifoSfn,'s,WaenmAdpLdl-oeMyneiAer,sRdtThenadtieeinstiiaesnssytuhobebjevlciagtlaitdotiioatynnytooflipPaablyailiiPntyltai;fifan'nstidfcflawimagse,sdoerniaensythotahteirt

C. WHEREAS, all wages allegedly due to Plaintiffare disputed; and

D.

WHEREAS, the litigation; and

Parties

wish

to

resolve

their

differences

without

resort

to

further

E.

WHEREAS, considerations

W~MART is willing described below, which it

to provide Plaintiff with certain is not ordinarily required to, provided

that Plaintiff release WAL·MART make arising out of the Lawsuit

from any claims Plaintiff have made in accordance with the Release set

or might forth in

Paragraph 5, and agrees to
forth in this AGREEMENT;

comply and

with

the

other

promises

and

conditions

set

F. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance ofthe

purpose of the Fair Labor reasonable to Plaintiff,

Standards

Act,

29

U.S.C.

§§

201

et

seq.,

and

is

fair

and

NOW THEREFORE, in consideration of the herein, and other good and valuable consideration, hereby acknowledged by the Parties, the Parties agree and conditions, which constitute full settlement of any

mutual covenants and promises contained the receipt and sufficiency of which are to be legally bound by the following terms and all disputes between them:

1.

aRreectirtuaelsa: nTd hceorPreacrtti,easnadckarneoiwnlceodrgpeortahtaetdthheer"eWinHasEmREatAerSia"lcplaarutssetsoptrheicseAdiGnRg EpEarMagErNapTh. 1

2.

Definitions: to include the

Throughout following:

this

AGREEMENT,

the

term

"WAL-MART''

shall

be

defined

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 55 of 74 PageID: 10103

(A)

Wal-Mart Stores, Inc., as related entity, operating

well as any subsidiary, parent entity, franchise, or division

company, affiliated entity, of Wai-Mart Stores, Inc.;

and

(B) Any officer, director, trustee, agent, employee, or insurer of an entity encompassed by subparagraph (a).

3.

Settlement Sum: As consideration for signing this the promises made herein, WAL-MART agrees deductions required by law:

AGREEMENT and compliance to pay the following sums,

with less

(A)

aKAsrsircienkagosloe(n2pa2ab-y3lem12ae5tnt7to1ro6nf)etyw(h'seenrfeteyienstahfaotneudrsa"cnPodlsatdisnottliolfafrP'ssla(C$ino2tu0inf,0fs'0es0l"l.e)0.g0a)Alsch1oa0ull9n9bseeslh:maalGldebarepcaiisaysauabneldde

to the extent appropriate; and

(B)

An aggregate shall be made

amount payable

of Six thousand as damages based

eight hundred DOLLARS ($6,800.00), on claims of overtime pay allegedly due

to Plaintiff and liquidated damages pursuant to the Fair Labor Standards Act.
This amount is subject to federal and state tax withholding requirements, which

will be deducted from this amount and paid to the government A 1099 shall be

issued to the extent appropriate.

abWnodAth(L2(-)1M)aAaSnRtipToursilgahitaniloalnlpropoffvDtihdiisesmtAhiseGsacRloEnWsEiidMtheErPaNrteiTojunadipidcpeernoetpixfreiiecadutetielnydtbshiiygsnPpelaadrianagtnirdfafp'dshaC3teodaufntbesyrelrP.elcaeiinvtiinffg,

ArfTeohGcritehsRivEAienEdGMtfRhriEoEsmNEpMTaPralE(agtNihrnaeTtpifh"sfEhawaflfllilelolcnftboitvehtceeboeiDmtceaeomtmeds"uededeeseofcffreirnicpbetaiedyvdaeab,isnltehtt,hehuriesenfptfoiialrrrseaat,fgtadreanarpdythhn)ae.oftEneefrfeoWcftAitvhLee-DMbeaAnteeRfoiTtfsthhsaeisst

4.

Consideration: Plaintiff understands and agrees that he would not and/or benefits specified in paragraph 3, above, but for his AGREEMENT and the fulfillment of the promises contained herein.

receive the execution

monies of this

,•

5.

autacdfhcbGhnonnoeoeeayrdkemminnternntesvopaecoef,eenrlomiwrxartdeuaasippnsxnll,ldeld,o,etnisRrcoods,sahaucneafennacthmlstoeavdetahhoureaaresreusggse,ebseoeaebqsleasltsyualheo,doesinefrmWiwgdferseeCaadiiAodntbcslhfcisttaLs,siateoioott,c-cmrmrhnMttoaasei,sbmtsnc,doA:oecnoirAboRetbsmmplIucGuiTntanagiteResnitanesdwdsoEdtitx,iosfewoEcpdnranhMiaeuusstsandhs,rt,Enniisde,efgoguoNsaasnrecatc,rfTsrntirla,sicsfio,tba,osiomhnsebPrstme,edgoiltlrasraiaateoitetnnntybautadhedtynytbiitrdfshiosofinian,a,vfren,Atrettfxredcohw,oGapvoerrneeoRnarsrnwhcLsleeEalsiailahcdmeEabawticesticslMselorysshaead(nueEliotrfmrisiittNt,eon,h,eislnsacTdee,wwniar)roidshh,rcntbfeioheu,gesfltltamiho,ihhetennhtreesnsaogert,setcaLrh,aqkpnpaiocuneanccweshixyoehnetpssmewsaaoua,,ccrlnerfiutgoattaintenhesnooettstsdiosddrssr,,,

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 56 of 74 PageID: 10104

occurrences that were directly or indirectly alleged, asserted, described, set forth or

referred to in the Lawsuit, whether such allegations were or could have been based on

common law or '"quity, or on any statute, rule, regulation, order, or law, whether federal,

state, or local. The Released Claims include, but are not limited 42 U.S.C. § 1985(3) (civil rights); (2) 18 U.S.C. § 1962(c) (civil

to, those arising under RICO), and 29 U.S.C.

§ 1962(d) (RICO conspiracy); (3) false imprisonment; and (4) 29 U.S.C. §§ 206-207

(Fair Labor Standards Act). This AGREEMENT also includes a release of all claims for

attorneys' fees and costs incurred by Plaintiffor by Plaintiff's Counsel in connection with

the Lawsuit and the Settlement ofthe Lawsuit.

6.

Tax Liability: Plaintiffunderstands that WAL-MART shall issue an IRS Fonn 1099 for

those portions ofthe payment specified in paragraph 3 of this AGREEMENT that are not

subject to withholding. In paying the amount specified in paragraph 3, WAL-MART

makes no representation regarding the tax consequences or liability arising from said

payment, including whether WAL~MART was Plaintiff's employer during the relevant

time period. Plaintiff understands and agrees that any and all tax liability that may be due

or become due because of the payment referenced above is his sole responsibility, and

that he will pay any such taxes that may be due or become d1,1e. WAL~MART has no

monetary liability or obligation regarding payment whatsoever (other than delivering a

valid check in the sum referenced in paragraph 3 of this AGREEMENT to Plaintiff).

Plaintiffagrees to bear all tax consequences, if any, attendant upon the payment to him of

the above-recited sums. Plaintiff further agrees to·hold WAL-MART harmless from and

against any tax ·or tax withholdings claims, amounts, interest, penalties, fmes or

assessments brought or sought by any taxing authority or governmental agency with

regard to the aboye recited sums. In the event WAL-MART receives written notice that

any claim or assessments: for taxes, withholding obligations, penalties and/or interest

arising out of this settlement are being or will be made against WAL-MART, WAL-

MART shall promptly, after receipt of such written notice, notifY Plaintiff by letter sent

to Plaintiff's Counsel.

7.

Court Approval: Plaintiff agrees and authorizes Plaintiff's Counsel to move jointly on

Plaintiff's behalf for dismissal of any and all claims made by or on behalf of Plaintiff in

the Lawsuit. The motion A of this AGREEMENT.

shall

be

made

in

substantially

the

same

fonn

as

that

in

Exhibit

8.

No Assignment: The Parties represent and warrant that no person other than the

signatolies hereto had or has any interest in the matters referred to in this AGREEMENT,

that the Parties have the sole right and exclusive authority to execute this AGREEMENT,

and that the Parties have not sold, assigned, transferred, conveyed, or otherwise disposed

ofany claim, demand or legal right that is the subject ofthis AGREEMENT.

9.

Goveming Law and Jurisdiction: Tiris AGREEMENT shall be governed and

confonned in accordance with the laws ofthe state of New Jersey without regard to its

conflict of laws provision. In the event Plaintiff or WAL-MART breaches any provision

of this AGREEMENT, Plaintiff and WAL-MART afflrm that either action to specifically enforce any term or tenns ofthis AGREEMENT.

may

institute

an

3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 57 of 74 PageID: 10105

10.

caNfuonornyndtAiiusmdhceimtnofgiosfsraoinfoaynnthykeoinpfcduLo.rnpiasoibsdieeliratastt:ioannThfaoedrmPtihasrisstiioeAsnGabRgyrEeWeEMAthLEat-NMnTeAistRhheaTrllothbfiesandAeyGelmiRaeEbdiElioMtryEcoNornTustnnrluoaerwdtfhuaelt

11.

Headings: The headings only, and the same shall such provision.

of not

the be,

provisions herein are intended for convenient reference nor be deemed to be, interpretative of the contents of

12.

AWsvacMugheGAcorrabheRndLeagiE-swlfelMiEydacnM,iAaovmtotReEioorrtTNodnmiiThsfmoaoiwesdcafdhikitflaAheilrieeggnbdaareeneudiayvnet.nhamycolaileTrndarinyhtieuytmes:nwptloPeaaecatysTmtrs,ahtoiniweiedtsyxshiicfsaAtyeatiipcsmnGtohkteRewinsivnoEroeAiwEtrrwi.GnlMpergRildEtagNiEacNneneEogTdMtthewhsamxEiaagtetNaincvoytTeuhendtirlenosybdonoyAttbfbhGteybheaheRenaaGyEpllalfeaEmopnrPMtreefayornrWEavtadilNigeeAsasdCiTL.oi,non-hsuMrPatenoslvAwsafoeibRhklnteoTehtoeimdi.fnsf,f

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14.

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15.

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16.

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.... 4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 58 of 74 PageID: 10106

coMection with his this AGREEMENT.

decision

to

accept

this

AGREEMENT,

except

for

those

set

forth

in

PLAINTIFF IS HEREBY ADVISED THAT HE OF TIME TO REVIEW AND CONSIDER TIDS

HAS A REASONABLE AGREEMENT.

PERIOD

PLAINTIFF AFFIRMS THAT HE IS AGREEMENT AND HAS CONSULTED EXECUTION OF TIDS AGREEMENT.

AUTHORIZED TO SIGN THIS WITH AN A'ITORNEY PRIOR TO

'•l~9"I.

,Y.

·..

',

ACWAPHRGOBAAOANOVIVMISIVNNIEIEDSG,S,TEES· REESPWALLTAAEATTNLCILIDON-ETMNTT,EA,IAODFRNFERTTDNE•OTFCRREEEEREIXLVESEEELACYITSUNEHTTAEEOANSLTDUTLHMIIDCKSSLSNAAAONAGIMWDGRSIERBNEEEHGMENELMEEYHFNE,AINTTS,ATSTONINODIRNPTFMAAUEIRNFGLATDFHEGIITLNRRLGHAADTPTHVUHOEEE3 ACCEPTED AND AGREED:

iti·6Nillfl
'cfnclaa

By:

'LlClJ. fie.
•rr•si~

•

STA1EOF

~6~A

)

COUNTY OF fA~'-co

)

JetJ-·f~,;2.0q Date

AspueGbrssRocEnriEabBlMelyEdEFtaNOopTRptheEwaeraeMsfdoeErxe(,egAcoItuUihnte.egodsuifnnosdTrte6rt<urhsUmei-gQpenunertdpaonas,deustkhsaniognordniwteycndonoitnosnidmmtehryeaistpitoro_ensbtelhneLecretehidenaaneydpxepsrorswefosonsr8eeAdw.uJhBpoofsUneI

2011, name is oath this

to

SUBSCRIBED AND SWORN TO BEFORE certify which witness my hand and seal of office.

ME

on

this

1..!:_

day

of

"iJJ£tW

20 IL

My Commission Expires:
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'*~'ABIO PUBLIC().,; 1 4.1'LIZ:OQ, 'U·B~

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 59 of 74 PageID: 10107
ON BEHALF OF WAL-MART:
f/ rv'I'J_ P-
David P. Murray WILLKIE FARR & GALLAGHER

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 60 of 74 PageID: 10108

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf ofthemselves and all others similarly situated,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-5309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF SETTLING PLAINTIFFS

Plaintiffs Felipe Condado, Octavio Denisio, Eunice Gomez, Victor Zavala Torres, Jiri Pfauser, and Hana Pfauserova ("Settling Plaintiffs") and Def~ndant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Settling Plaintiffs.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced an<:i Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

,Ct ase 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 61 of 74 PageID: 10109

Fair Labor Standards Act ("FLSA") and false imprisonment counts.l At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August I1, 20IO and October I, 2010. Pursuant to the Court's instructions at the August 1I, 2010 settlement conference, on August 27,2010 Wal-Mart · provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs.
See Exhibit B (August 27, 20 I0 letter from Murray to Hon. Madeline Cox Arleo attaching
settlement correspondence). On September 27, 2010 plaintiffs' counsel reported acceptances of the settlement offers by Felipe Condado, Octavio Denisio, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, and Victor Zavala Torres. See Exhibit C (September 27, 20 I0 Letter from Linsey to
Hon. Madeline Cox Arleo).2 Plaintiffs' counsel reported that named plaintiffs Petr Zednik and
Teresa Jaros rejected the respective settlement offers addressed to them. See id.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (I) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko, and (2) a payment to plaintiff in the amount ofthe respective plaintiff's alleged overtime damages,
see Exhibit B (documenting calculation of alleged damages for each Settling Plaintiff). (The
$20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of$20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.

and

The civil rights count RICO conspiracy counts

was dismissed with prejudice on October were dismissed with prejudice on August

7, 2005, and the RICO 28, 2006. On June 25,

20 I0, the Court decertified the conditional collective action.

2

Plaintiffs'

Hipolito Palacios.

counsel
See id.

reported

that

they

were

unable

to

reach

or

locate

Carlos

Tello

or

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 62 of 74 PageID: 10110

The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-
*14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (II th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs.

Respectfully submitted,

James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036
Gilberto Garcia, Esq. GARCIA AND KRICKO 68 Summit Avenue Hackensack, New Jersey 0760 I

Attomeys for. Plaintiffs By:_ _ _ _ _ _ _ _ _ _ __
By:- - - - - - - - - - - - - - - - - -
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc. By:---,T:::::hc-o_m_as_,H=-.""G:-o.-ld.,--e_n_ _ ____

-3-

..Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 63 of 74 PageID: 10111
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 Dated: [MONTH/DAYl201 0
-4-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 64 of 74 PageID: 10112

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 65 of 74 PageID: 10113

CONFIDENTIAL SETILEMENT AGREEMENT AND GENERAL RELEASE This Confidential Settlement Agreement and General Release ("AGREEMENT") is
entered into by and between Victor Zavala Torres ("Plaintiff') and WAL·MART STORES, INC. ("WAL.MART") (collectively "Parties").

RECITALS

Titis AGREEMENT is made with reference to the following facts:

A. WHEREAS, Plaintiff brought a Lawsuit against WAL-MART in the United
States District Court for the District of New Jersey, that is designated as Zavala, eta/. v. Wai·Mart Stores, Inc., Case No. 03·5309 (the "Lawsuit"); and

B. WHEREAS, WAL·MART denies the validity of Plaintiff's claims, denies that it
was PlaintitPs employer, denies any obligation to pay Plaintiff wages or any other
compensation, and denies that it is subject to any liability; and
c. WHEREAS, all wages allegedly due to Plaintiffare disputed; and

~ D. E.

WHEREAS, the Parties wish to resolve their differences without resort to further litigation; and
WHEREAS, WAL.MART is willing to provide Plaintiff with certain

.

considerations described below, which il'is not ordinarily required to, provided

"-i.

that Plaintiff release WAL·MART from any claims Plaintiff have made or might

make ariving out' of the Lawsuit in accordance with the Release set forth in

Paragraph 5, and agrees to comply with the other promises and conditions set

forth in this AGREEMENT; and

.

f. WHEREAS, the AGREEMENT resolves a bona fide dispute in furtherance of the
purpose of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and is fair and reasonable to Plaintiff,

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree to be legally bound by the following terms and conditions, which constitute full settlement of any and all disputes between them: I. Recitals: The Parties acknowledge that the "WHEREAS" clauses preceding paragraph I
are true and correct, and are incorporated herein as material parts to this AGREEMENT. 2. Definitions: Throughout this AGREEMENT, the term "WAL-MART'' shall be defined
to include the following:

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 66 of 74 PageID: 10114

(A) Wal-Mart Stores, Inc., as well as any subsidiary, parent company, affiliated entity,

related and

entity,

operating

entity,

franchise,

or

division

of Wal-Mart

Stores,

Inc.;

(B) Any officer, director, trustee, agent, employee, or insurer of an entity encompassed by subparagraph (a).
3. Settlement Sum: As consideration for signing this AGREEMENT and compliance with the promises made herein, WAL-MART agrees to pay the following sums, less deductions required by Jaw:

(A) A single payment of twenty thousand dollars ($20,000.00) shall be made payable

as reasonable attorney's fees
Kricko ( ·.::Q<2 -31:2.>''716

and (tax

costs to Plaintifrs
ID #)) (hereinafter

legal counsel: Garcia "Plaintitrs Counsel").

and A

1099 shall be issued to the extent appropriate; and

(B) An aggregate amount of Twenty two thousand dollars ($22,000.00), shall be made

payable as damages based on claims of overtime pay allegedly due to Plaintiff

-....

and liquidated damages pursuant to the Fair Labor Standards Act. This amount is

subject to federal and state tax withholding requirements, which will be deducted

·~ <:

from this amount and paid to the government A 1099 shall be issued to the

extent appropriate.

Sdt'Ulhel 'SLLfJV lit. I
PfJMB£A
4. 5.

WAL-MART shall provide the consideration identified in this paragraph 3 after receiving both (I) an original of this AGREEMENT appropriately signed and dated by Plaintiff, and (2) a Stipulation of Dismissal With Prejudice executed by Plaintiff's Counsel.

This AGREEMENT shall riot become effective, therefore, and none of the benefits set

forth in this paragraph will become due or payable, until after the Effective Date of AGREEMENT (th~ "Effective Date" defined as the first day after WAL-MART received from Plaintiff all of the items described in this paragraph).

this has

Consideration: Plaintiff understands and agrees that he would not receive the monies and/or benefits specified in paragraph 3, above, but for his exec\ltion of this AGREEMENT and the fulfilbnent of the promises contained herein.

General Release of Claims: In exchange for, and in consideration of, the payments, benefits, and other commitments described above, which is being executed contemporaneously with this AGREEMENT, Plaintiff, for himself, and for each of his heirs, executors, administrators and assigns, hereby irrevocably releases, acquits, and forever discharges WAL-MART of and from any and all claims, rights, penalties, demands, damages, debts, accounts, duties, costs and expenses (other than those costs utcahonnamkdtnpcoelowaxuipnnled,tnso,shneacsvathuereseebqbseuaeosinrifseaadoscfst,tieoorcntoe,bndoenbbelpcuiatgteiaddwtiewoprnieutshr,ns,ouoaratrnilasitsaisnbtegoirlitotetyudhtitshionafA,ttohwGreeRrrLeEelaEaawtsMessdueEriiNttn,eTdww)ihh,neolttlihheeeenorsLr,kainnwcohpswauarnrigtteootsorr, any or all of the alleged acts, omissions, facts, matters, transactions, circumstances, and

2

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 67 of 74 PageID: 10115

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3

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 68 of 74 PageID: 10116

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11.

Headings: The headings only, and the same shall such provision.

of not

the be,

provisions herein are intended for convenient reference nor be deemed to be, interpretative of the contents of

12.

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WhapdadvuopASboinaeanrrsAeoGndtorlempveitvovLndRrrseieriofm,o-asrsEoMsivaiaofiidrsEaonbinrcAstlndiMyiaeheilloeRtoaloiinieoEestbnfofTfygmfolNPnto.Ae:arhtellTcfahaGib,desTnaieiynaRnndtaAhbottlvryEelieGlserfaebrEihsfplymR,ee'iaMsbadctclEsirohl,LtloEtEilteoisbuoaehNeeMrwgenrrstTteuarsEvomefonle.u,oaxNafefialripsntticntiTholTdhnfoovioin(cdormsaairhaielnctntAbeiprhtlceddyrhleeGloaee,etubeieafogRdnnlncatereeiEhfkntnnxauoipjnEdgentsnuroeor,McderanArwweeintltsEaPniGflidorbeoftlNaeinhRoadlrcnleco1irgeEtoynceiu)aetroEetaostiipapnbaeMsfibrrlftnmaheodoolEdsen,eevpvfh.NdtWliiacaeisfsgTcllurciilaAomaorlaHieltsnrnnmLeiiheeoonns·s-taswhtneouhMtlhdeldtraeeonraAelxbvnetfltsoteeoiRalbec.ntritnhnrmbemT,ibyteetbdoiehiipteseiadpfaaledaemirtlntrfiefmoamoiiofognvreneneteuadiyicd,toslplntta,iatbaetenoptoisndrlednonoiaysgbvptsrgbbaetpaatrytiyootliaoooeldipfesrdnldbtuaght,~ebihwtacoooyo5sealhn,,rr

15.

hsBPueaicirnrctsdie,eisasnsdogmarNsni,ndaaitsnutudrrpaeaotsoonsrifsg,Atnhrsgee,pirraerenesrdmeenssephtnaeattcl:ilvtiieTvnsehu, iresehxAet~oiuGrtsthoR, reEsabE,deMmsnueiEcnfciNitseTtosrsafsotehorasarc,sllh,abnpredaerpabtsryienssiadgeninnndstga.totuivptheosen,irereaexcsehpceouctftoitrvhsee,

16.

nTtEhohnetetpirSreaelrEiteiATdeIsgLorhneEeerMamentEoey,nNrtaeT:npdrSTeUfshueMilnslytaAdsteiGuospRncersEri,bsEepeMdrdoeEmisnNaisnpTeaysrs,apegortisrroaafrpoghorrbte3hleimgPthaleteaniiotnesnntiotofifrffeaWacnAkAynGLokRw-inMEldeEAdMmgReaETsdNettohTtaoPtblehahtiiewnmtheifeaifnns.

4

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 69 of 74 PageID: 10117

•1 ..
connection with his decision to accept this AGREEMENT, except for those set forth in this AGREEMENT.
PLAINTIFF IS HEREBY ADVISED THAT BE HAS A REASONABLE PERIOD
OF TIME TO REVIEW AND CONSIDER TffiS AGREEMENT. PLAINTIFF AFFIRMS THAT HE IS AUTHORIZED TO SIGN THIS AGREEMENT AND HAS CONSULTED WITH AN A'ITORNEY PRIOR TO
EXECUTION OF THIS AGREEMENT. HAVING ELECTED TO EXECUTE TffiS AGREEMENT, TO FULFILL THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 3 ABOVE, PLAINTIFF FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO
WAIVE, SETTLE, AND RELEASE ALL CLAIMS HE HAs OR MIGHT HAVE
AGAINST WAL-MART. ACCEPTED AND AGREED:

By:

STATE OF fuo!OL-11\

)

COUNTY OF M 6,JCko.

)

.1l\ ~ - di'L-- "LO<t>f
Date

BEFORE ME, IJ:le un!i:igned authority
personally appeared \Jlc"\:lr 4: 1ir!ls • known

on
to

this .Jl_ day of i,yl!!'?u me to be the person whose

2011, name is

subscribed to the foregoing instrument and signed in my presence and swore upon oath this

AGREEMENT was executed for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO BEFORE ME on this _1l,_ day of !JJ€141 2011, to certifY which witness my hand and seal of office.

My Commission Expires:
!. t.JX>E:\9 1U~ Oe,
•'
5

I

\

l

'.

··# ilsrla Blfta BNiWJ
If'rJ1'aht Bdnr:ha
: ,.... ~ Tll() PUBL/09 Iff. 1
,..,..r.nrng. ,lT•BI.~

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 70 of 74 PageID: 10118
David P. Murray WILLKIE FARR & GALLAGHE LLP

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 71 of 74 PageID: 10119

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

VICTOR ZAVALA, EUNICE GOMEZ, ANTONIO FLORES, OCTAVIO DENISIO, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, MAXIMILIANO MENDEZ, ARTURO ZAVALA, FELIPE CONDADO, LUIS GUTIERREZ, DANIEL ANTONIO CRUZ, PETR ZEDNEK, TERESA JAROS, JIRI PFAUSER, HANA PFAUSEROVA, PAVEL KUNC and MARTIN MACAK, on behalf ofthemselves and all others similarly situated,
Plaintiffs, v.
WAL-MART STORES, INC.,
Defendant.

CIVIL ACTION NO. 03-CIV-5309 (GEB) DOCUMENT ELECTRONICALLY FILED
MEMORANDUM IN SUPPORT OF JOINT MOTION TO APPROVE SETTLEMENT AND
DISMISS CLAIMS OF SETTLING PLAINTIFFS

Plaintiffs Felipe Condado, Octavio Denisio, Eunice Gomez, Victor Zavala Torres, Jiri Pfauser, and Hana Pfauserova ("Settling Plaintiffs") and Def~ndant Wal-Mart Stores, Inc. (together, "the Parties"), through counsel of record, respectfully submit this Memorandum in Support of Joint Motion to Approve Settlement and Dismiss Claims of Settling Plaintiffs.
The Parties hereby jointly move for the Court to approve the settlement of any and all claims asserted by or on behalf of the Settling Plaintiffs at any time in this proceeding, as embodied in the Settlement Agreements attached as Exhibit A hereto. The Settlement Agreements were reached through several months of settlement discussions under the Court's supervision. Each of the Settlement Agreements is a fair, reasonable, and adequate resolution of a bona fide dispute of claims arising from Plaintiffs' alleged work on third-party floor maintenance crews in Wal-Mart stores.
Plaintiffs initially filed this case in November 2003 as a putative class action alleging Racketeer Influenced an<:i Corrupt Organizations Act ("RICO"), RICO conspiracy, civil rights,

,Ct ase 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 72 of 74 PageID: 10120

Fair Labor Standards Act ("FLSA") and false imprisonment counts.l At all times Wal-Mart has denied that it has any liability as to any plaintiff or putative opt-in participant. The Court has supervised settlement discussions between the Parties at various times since this case was filed, including in settlement conferences on August I1, 20IO and October I, 2010. Pursuant to the Court's instructions at the August 1I, 2010 settlement conference, on August 27,2010 Wal-Mart · provided to plaintiffs' counsel settlement offer letters for each of the ten remaining plaintiffs.
See Exhibit B (August 27, 20 I0 letter from Murray to Hon. Madeline Cox Arleo attaching
settlement correspondence). On September 27, 2010 plaintiffs' counsel reported acceptances of the settlement offers by Felipe Condado, Octavio Denisio, Eunice Gomez, Jiri Pfauser, Hana
Pfauserova, and Victor Zavala Torres. See Exhibit C (September 27, 20 I0 Letter from Linsey to
Hon. Madeline Cox Arleo).2 Plaintiffs' counsel reported that named plaintiffs Petr Zednik and
Teresa Jaros rejected the respective settlement offers addressed to them. See id.
The Settlement Agreements embody the same payment amounts and other material terms as the settlement offer letters accepted by the Settling Plaintiffs. Each Settlement Agreement provides for payment of a one-time Settlement Sum that includes (I) a payment of $20,000 as reasonable attorneys' fees and costs payable to plaintiffs' legal counsel, Garcia and Kricko, and (2) a payment to plaintiff in the amount ofthe respective plaintiff's alleged overtime damages,
see Exhibit B (documenting calculation of alleged damages for each Settling Plaintiff). (The
$20,000 payment to Garcia and Kricko provided in each Settlement Agreement is non-exclusive; that is, a single payment of$20,000 is to be made to Garcia and Kricko for reasonable attorneys' fees and costs.) Wal-Mart will withhold taxes as appropriate and will issue any paperwork to the IRS as required under federal law.

and

The civil rights count RICO conspiracy counts

was dismissed with prejudice on October were dismissed with prejudice on August

7, 2005, and the RICO 28, 2006. On June 25,

20 I0, the Court decertified the conditional collective action.

2

Plaintiffs'

Hipolito Palacios.

counsel
See id.

reported

that

they

were

unable

to

reach

or

locate

Carlos

Tello

or

-2-

Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 73 of 74 PageID: 10121

The Settlement Agreements were reached under the Court's supervision and represent a fair and reasonable resolution of the Settling Plaintiffs' respective claims in this proceeding. See Lignore v. Hosp. ofthe Univ. ofPa., Civ. No. 04-5735,2007 U.S. Dist. LEXIS 32169, at *13-
*14 (E.D. Pa. May 2, 2007) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (II th Cir. 1982)). With respect to the FLSA claims, there is a bona fide dispute as to the amount compensation due to the Settling Plaintiffs and whether Wal-Mart was the Settling Plaintiffs' joint employer. See id. Accordingly, the release of the Settling Plaintiffs' claims under the FLSA is valid and enforceable.
For the reasons stated herein, the Parties respectfully request that the Court approve the Settlement Agreements and dismiss the claims of the Settling Plaintiffs.

Respectfully submitted,

James L. Linsey Thomas N. Ciantra COHEN, WEISS AND SIMON LLP 330 West 42nd Street New York, New York 10036
Gilberto Garcia, Esq. GARCIA AND KRICKO 68 Summit Avenue Hackensack, New Jersey 0760 I

Attomeys for. Plaintiffs By:_ _ _ _ _ _ _ _ _ _ __
By:- - - - - - - - - - - - - - - - - -
WILLKIE FARR & GALLAGHER LLP Attorneys for Defendant Wal-Mart Stores, Inc. By:---,T:::::hc-o_m_as_,H=-.""G:-o.-ld.,--e_n_ _ ____

-3-

..Case 2:03-cv-05309-GEB-MCA Document 251-2 Filed 03/11/11 Page 74 of 74 PageID: 10122
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019 Of Counsel: David P. Murray, Esq. (admitted pro hac vice) WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238 Dated: [MONTH/DAYl201 0
-4-

 
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Date/Time of Request: Client Identifier: Database: Citation Text: Lines: Documents: Images:

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2006 WL 381605 (D.N.J.) (Cite as: 2006 WL 381605)

Page 1

For Opinion See 2007 WL 1134110, 447 F.Supp.2d 379, 393 F.Supp.2d 295
United States District Court, D. New Jersey. Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Felipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jiri Pfauser, Hana Pfauserova, Pavel Kunc and Martin Macak, on behalf of themselves and all others similarly
situated, Plaintiffs, v.
WAL-MART STORES, INC., Defendant. Civil Action No.: 03-5309 (JAG).
January 20, 2006.
Wal-Mart Stores, Inc.'s Memorandum of Law in Support of Its Motion to Dismiss With Prejudice Counts One and Two of Plaintiffs' Second Amended Class Action Complaint
and Jury Demand
TABLE OF CONTENTS
TABLE OF AUTHORITIES ... iii
PRELIMINARY STATEMENT ... 1
STATEMENT OF THE CASE ... 2
ARGUMENT ... 7
I. STANDARD OF REVIEW ... 7
II. PLAINTIFFS' RICO ENTERPRISE CLAIM SHOULD BE DISMISSED WITH PREJUDICE ... 8
A. Plaintiff's Have Not Alleged A Single Viable Predicate Act Of Racketeering Against Wal-Mart ... 9
1. Plaintiffs' Immigration Predicates Fail ... 9
2. Plaintiffs' Involuntary Servitude Predicate Fails ... 18
3. Plaintiffs' Money Laundering Predicate Fails ... 21
B. Plaintiff's Lack Standing To Pursue A RICO Enterprise Claim Against Wal-M art ... 24
1. Plaintiff's Cannot Show Proximate Causation ... 25
2. Plaintiffs' Own Conduct Breaks The Causal Chain ... 29
3. Plaintiff's Lack Standing Even Under The Broader Steamfitters Proxim ate Cause
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Analysis ... 30 C. Plaintiff's Have Not Alleged A Viable RICO Enterprise ... 33 1. Plaintiff's Have Not Alleged A Distinct Enterprise ... 34 2. Plaintiff's Have Not Alleged A Common Purpose ... 35 D. Plaintiff's Have Not Adequately Alleged That Wal-Mart Controlled The RICO Enter-
prise's Affairs ... 36 III. PLAINTIFFS' RICO CONSPIRACY CLAIM SHOULD BE DISMISSED WITH PREJUDICE ... 38
A. Plaintiff's Have Not Alleged A Viable RICO Conspiracy ... 38 B. Plaintiff's Lack Standing To Pursue A RICO Conspiracy Claim Against Wal-Mart ... 39 CONCLUSION ... 39
TABLE OF AUTHORITIES CASES A-Valey Eng'rs, Inc. v. Board of Chosen Freeholders of County of Camden, 106 F. Supp. 2d 711 (D.N.J. 2000) ... 38 Anderson v. Ayling, 396 F.3d 265 (3d Cir. 2005) ... passim Anderson v. Smithfield Foods, Inc., 209 F. Supp. 2d 1270 (M.D. Fla. 2002), aff'd, 353 F.3d 912 (11th Cir. 2003) ... 23 Baker v. IBP, Inc., 357 F.3d 685 (7th Cir. 2004), cert. denied, 125 S. Ct. 412 (2004) ... 34, 35 Balthazar v. Atlantic City Med. Ctr., 279 F. Supp. 2d 574 (D.N.J. 2003), aff'd, 137 Fed. Appx. 482 (3d Cir. 2005) ... 24 Banco Del Atlantico, S.A. v. Stauder, No. 03-1342, 2005 WL 1925830 (S.D. Ind. Aug. 11, 2005) ... 35 Beck v. Prupis, 529 U.S. 494 (2000) ... 39 Bona v. Barasch, No. 01-2289, 2003 WL 1395932 (S.D.N.Y. Mar. 20, 2003) ... 32 In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) ... 7, 8, 40 Callahan v. A.E.V., Inc., 182 F.3d 237 (3d Cir. 1999) ... passim Commercial Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374 (2d Cir. 2001) ... 25, 27, 31

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Danielsen v. Burnside-Ott Aviation Training Ctr., Inc., 941 F.2d 1220 (D.C. Cir. 1991) ... 25 Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173 (3d Cir. 2000) ... 29, 30 Eli Lilly & Co. v. Roussel Corp., 23 F. Supp. 2d 460 (D.N.J. 1998) ... passim Feinberg v. Katz, No. 99-0045 et al., 2005 WL 2990633 (S.D.N.Y. Nov. 7, 2005) ... 34, 35 Gilmore v. Berg, 820 F. Supp. 179 (D.N.J. 1993) ... 38 Green v. Aztar Corp., No. 02-3514, 2003 WL 22012205 (N.D. Ill. Aug. 22, 2003) ... 29, 30 Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) ... 32 Holmes v. Securities Investor Prot. Corp., 503 U.S. 258 (1992) ... 8, 24, 25 Jaguar Cars, Inc. v. Royal Oaks Motor Car Co., 46 F.3d 258 (3d Cir. 1995) ... 34 Kaveney v. Miller, No. 93-0218, 1993 WL 298718 (E.D. Pa. July 30, 1993) ... 19 Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir. 1993) ... 38 Livingston v. Shore Slurry Seal, Inc., 98 F. Supp. 2d 594 (D.N.J. 2000) ... 25, 31 Lum v. Bank of Am., 361 F.3d 217 (3d Cir.), cert. denied, 125 S. Ct. 271 (2004) ... 8, 38 Martinez v. Bohls Bearing Equip. Co., 361 F. Supp. 2d 608 (W.D. Tex. 2005) ... 28 In re Mastercard Int'l Inc., 313 F.3d 257 (5th Cir. 2002) ... 29, 30 Mehling v. New York Life Ins. Co., No. 99-5417, 2005 WL 1655882 (E.D. Pa. July 13, 2005) ... 31, 32, 33 Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Cir. 2002) ... 27 Pennsylvania Ass'n of Edwards Heirs v. Rightenour, 235 F.3d 839 (3d Cir. 2000) ... 20 Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192 (3d Cir. 1993) ... 8 Plyler v. Doe, 457 U.S. 202 (1982) ... 29 Rehkop v. Berwick Healthcare Corp., 95 F.3d 285 (3d Cir. 1996) ... 26 Reves v. Ernst & Young, 507 U.S. 170 (1993) ... 36 Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) ... 24

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Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162 (3d Cir. 1989), overruled on other grounds, Beck v. Prupis, 529 U.S. 494 (2000) ... 24, 25, 38 Smith v. Berg, 247 F.3d 532 (3d Cir. 2001) ... 39 Starfish Inv. Corp v. Hansen, 370 F. Supp. 2d 759 (N.D. Ill. 2005) ... 36 Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912 (3d Cir. 1999) ... 30 System Mgmt., Inc. v. Loiselle, 91 F. Supp. 2d 401 (D. Mass. 2000) ... 10, 11, 27 United States v. Bafitri, No. 99-47, 2000 WL 34030830 (N.D. Iowa Apr. 11, 2000) ... 16 United States v. Bibbs, 564 F.2d 1165 (5th Cir. 1977) ... 20 United States v. Chavez-Palacios, 30 F.3d 1290 (10th Cir. 1994) ... 11 United States v. Diaz, 936 F.2d 786 (5th Cir. 1991) ... 11 United States v. Green, 25 F.3d 206 (3d Cir. 1994) ... 12 United States v. Harris, 701 F.2d 1095 (4th Cir. 1983) ... 20 United States v. Klein, 515 F.2d 751 (3d Cir. 1975) ... 12 United States v. Kozminski, 487 U.S. 931 (1988) ... 18, 19 United States v. Lewis, 644 F. Supp. 1391 (W.D. Mich. 1986), aff'd sub nom. United States. v. King, 840 F.2d 1276 (6th Cir. 1988) ... 20 United States v. Moreno-Duque, 718 F. Supp. 254 (D. Vt. 1989) ... 10, 11 United States v. Oloyede, 982 F.2d 133 (4th Cir. 1992) ... 16 United States v. Parmelee, 42 F.3d 387 (7th Cir. 1994) ... 11 United States v. Romero-Cruz, 201 F.3d 374 (5th Cir. 2000) ... 11 United States v. Shackney, 333 F.2d 475 (2d Cir. 1964) ... 18 United States v. Singh, 261 F.3d 530 (5th Cir. 2001) ... 14 United States v. Turkette, 452 U.S. 576 (1981) ... 35 United States v. Zheng, 306 F.3d 1080 (11th Cir. 2002) ... 14 University of Md. at Baltimore v. Peat, Marwick, Main & Co., 996 F.2d 1534 (3d Cir. 1993) ... 36 Williams v. Waldron, 14 F. Supp. 2d 1334 (N.D. Ga. 1998), aff'd sub nom. United States v. Richardson, 248 F.3d 1180 (11th Cir. 2001) ... 28, 29
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Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295 (D.N.J. 2005) ... passim
STATUTES
8 U.S.C. § 1324(a)(1)(A)(v)(I)-(II) ... 19
18 U.S.C. § 15 84 ... 19
18 U.S.C. § 1961(1) ... 20, 25
18 U.S.C. § 1962(c) ... 8, 33
18 U.S.C. § 1964(c) ... 24
Pursuant to Federal Rule of Civil Procedure 12(b)(6) and Local Civil Rules 7.1 and 7.2, Defendant Wal-Mart Stores, Inc. (“Wal-Mart”) submits this memorandum of law in support of its Motion to Dismiss With Prejudice Counts One and Two of Plaintiffs' Second Amended Class Action Complaint and Jury Demand (“Second Amended Complaint” or “SAC”).
PRELIMINARY STATEMENT
Plaintiff's purport to represent a nationwide class of undocumented workers who were allegedly hired by outside contractors to provide floor-cleaning services in certain Wal-Mart stores. SAC „„ 7-28, 30-36. Plaintiff's claim that they did not receive overtime pay and, in some cases, minimum wage for their work on the floor-cleaning crews. Id. „„ 1-3, 7-16, 18-19, 21-22, 24-25, 27-28, 30,40-42, 119, 121, 125, 146-150. Although Plaintiff's were allegedly recruited and employed by outside contractors, id. „ 21-23, 70-76, 78-98, Plaintiff's have not joined a single contractor as a defendant in this case. Their Second Amended Complaint attempts to replead claims exclusively against Wal-Mart under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968.
Plaintiffs' latest pleading is little more than a recitation (often verbatim) of the same allegations that this Court has already considered and rejected. See Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295, 335 (D.N.J. 2005) (dismissing RICO claims). None of the Plaintiff's -- or the 187 potential opt-in plaintiff's -- has alleged a single additional fact to support the amended RICO claims. Instead, the only new “facts” asserted are based on selective and misleading references to a search warrant affidavit from the federal government's investigation of Wal-Mart. The affidavit, which was itself based on multiple hearsay, contains no allegations that support any RICO offense by Wal-Mart. To the contrary, following a thorough investigation, the federal government determined that there was no basis to pursue any criminal charges against Wal-Mart or any of its employees (“Associates”). The investigation was settled, as a civil action, without any admission of wrongdoing by Wal-Mart. As part of the settlement, Wal-Mart agreed to a five year injunction against the knowing hiring of contractors who employ undocumented workers. The injunction is based on 8 U.S.C. § 1324a, which -- as this Court has already observed -- is not a RICO predicate offense. Id. at 308 n.11, 309.

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The Second Amended Complaint suffers from the same pleading deficiencies previously identified by the Court, as well as other fatal problems that the Court did not reach in its prior decision. These deficient allegations confirm that Plaintiff's cannot plead viable RICO claims against Wal-Mart and that any further attempt to do so would be futile. Accordingly, Plaintiffs' amended RICO claims should be dismissed with prejudice.
STATEMENT OF THE CASE
Plaintiff's allege that Wal-Mart contracted with outside companies to provide floor-cleaning services to stores located in New Jersey and several other states. SAC „„ 7-28. Plaintiff's claim that they worked on floor-cleaning crews for several contractors, but admit that they were in the United States unlawfully and not authorized to hold employment here. Id. On October 23, 2003, federal authorities conducted enforcement operations in several Wal-Mart stores and arrested the Plaintiff's. Id. „„ 8-16, 18-19, 27-28. Shortly after their arrests, and only after their undocumented status was uncovered, Plaintiff's filed this putative class action. Many have since returned to their home countries or are subject to deportation. Id. „„ 8-16, 18-19, 21-22, 24-25, 27-28.
Plaintiff's initially brought suit in state court against Wal-Mart and several contractors for alleged wage violations and employment discrimination. Plaintiff's refiled their suit in this Court on November 10, 2003, naming Wal-Mart and ten outside contractors as defendants. On February 2, 2004, Plaintiff's amended their pleading (“First Amended Complaint” or “AC”) and dropped the contractor-defendants from the case.
The First Amended Complaint asserted five counts against Wal-Mart. Counts One and Two alleged RICO enterprise and conspiracy claims based primarily on the federal government's civil forfeiture action against several floor-cleaning contractors (“Forfeiture Action”). In the Forfeiture Action, the government accused the contractors, not Wal-Mart, of committing immigration and money laundering crimes. Narcotics Agent Abel Rios investigated the contractors and provided the government's allegations (“Rios Affidavit”). See, e.g., SAC Ex. E at 3-8. Although the Forfeiture Action did not implicate Wal-Mart, Plaintiff's used the Forfeiture Action complaint and Rios Affidavit as the template for their original RICO claims. AC „„ 42, 57-58; see also Tr. of Mot. to Dismiss Hr'g at 8:18-9:18, 54:2-55:4, 88:3-90:11, 113:1-114:25, Oct. 20, 2004 (“Tr.”) (annexed as Exhibit 1). In addition to alleging RICO violations, the Amended Complaint accused Wal-Mart of conspiring to violate Plaintiffs' civil rights under 42 U.S.C. § 1985(3) (Count Three); violating the minimum wage and overtime provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 206-207 (Count Four); and false imprisonment (Count Five).
On March 19, 2004, Wal-Mart moved to dismiss the First Amended Complaint in its entirety.[FN1] The Court granted in part and denied in part Wal-Mart's motion to dismiss. Zavala, 393 F. Supp. 2d at 335. Because Plaintiff's failed to plead a single viable predicate act of racketeering against Wal-Mart, the Court dismissed Counts One and Two and granted Plaintiffs forty-five days' leave to amend their RICO

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claims. Id. at 316. The Court also dismissed with prejudice Plaintiffs' civil rights claim under 42 U.S.C. § 1985(3), holding that Plaintiff's could not show they suffered discrimination on the basis of an immutable trait. Id. at 320. Recognizing that Plaintiffs' undocumented status was the result of “their own voluntary conduct,” the Court observed that “[w]hile they now may not be able to regularize their status, such that their undocumented status is immutable, this is traceable to their decision, at the outset, to enter and remain unlawfully in the United States.” Id. (emphasis in original). Finally, the Court denied Wal-Mart's motion to dismiss Plaintiffs' FLSA and false imprisonment claims. Id. at 335.
FN1. During argument on the motion, the Court directed Plaintiff's to correct errors in their pleading. See Tr. at 110:2-24; Zavala, 393 F. Supp. 2d at 300 n. 1. Plaintiff's filed a Revised Amended Complaint (“RAC”) on October 28, 2004. On November 22, 2005, Plaintiff's filed their Second Amended Complaint reasserting two RICO claims against Wal-Mart. Plaintiffs' chief complaint remains that the contractors failed to pay overtime and, in some cases, minimum wage, SAC „„ 3, 30, and neglected to withhold taxes or provide employment benefits, id. „„ 8-16, 18-19, 21-22, 24-25, 27-28. Yet, Plaintiff's have not joined a single contractor, not even the contractors that pleaded guilty to immigration offenses and forfeited assets to the government. Id. „„ 80-85, 92. Plaintiff's instead allege that the contractors acted as Wal-Mart's agents and co-conspirators in a scheme to deny Plaintiff's fair wages. Id. „ 41.
Plaintiffs' amended RICO case theory is also unchanged; namely, that “Wal-Mart's maintenance contractors operating as part of the Wal-Mart Enterprise systematically violated federal criminal provisions by encouraging unauthorized aliens to enter the United States and then harboring or transporting them once here.” Id. „ 86. In alleging this theory, Plaintiff's again rely on the Forfeiture Action, the fact that several contractors pled guilty to immigration and money laundering crimes, and the government's investigation of Wal-Mart. See, e.g., id. „„ 7-8, 80-85, 92. The same (in many cases identical) allegations were contained in the dismissed RICO counts of the First Amended Complaint. See Zavala, 393 F. Supp. 2d at 300-01 (dismissing RICO claims despite allegations that (1) a Wal-Mart contractor pleaded guilty to harboring illegal aliens, and that other Wal-Mart contractors forfeited $4 million because they hired unauthorized workers; (2) the government initiated the Forfeiture Action against Wal-Mart contractors based on immigration and money laundering offenses; (3) the government raided Wal-Mart stores on multiple occasions between 1997 and 2003; and (4) Wal-Mart had been under investigation by federal authorities for over five years). Plaintiff's also repeat their allegation that a letter from Professor Greta McCaughrin, concerning the 1999 arrest of undocumented workers in Lexington, Virginia, put Wal-Mart on notice that its contractors were employing illegal labor. SAC „„ 49-50, Ex. B.
The only “new” allegations in the Second Amended Complaint relate to the Affidavit of Special Agent Patricia Mullin (“Mullin Affidavit”). The government submitted the Mullin Affidavit to a Magistrate Judge in Arkansas to secure a warrant to search Wal-Mart's corporate headquarters. See, e.g., SAC „ 46, Ex. A. The Mullin Affidavit
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is not based on personal knowledge, but on multiple levels of hearsay. Id. Ex. A at 2-3. Moreover, there is little “new” in the Mullin Affidavit. The vast majority of the information contained in the affidavit was derived directly from the Forfeiture Action. As explained by the government, the Mullin Affidavit “is based on information and evidence relayed to [Agent Mullin] by Special Agent Julio C. Santana of the United States Immigration and Customs Enforcement (‘ICE’) (Legacy INS).” Id. Agent Santana, in turn, obtained the majority of his information from Narcotics Agent Abel Rios in the Forfeiture Action. Id. Ex. E at 3-8.
While the Mullin Affidavit largely recounts allegations levied against contractors in the Forfeiture Action, it also contains excerpts of alleged conversations involving contractors, undercover law enforcement personnel, and two Wal-Mart corporate employees, Leroy Scheutts and Steven Bertschy. Plaintiff's quote selectively from these excerpts, see SAC „„ 47-48, 61-65, and emphasize an alleged conversation -- in March of 1997 -- during which Scheutts supposedly made an off-color remark about Polish workers and then told a contractor to create different floor-cleaning companies so that he could continue doing business with Wal-Mart if his crews were found to be employing undocumented workers, id. „ 47. Plaintiff's also quote selected statements allegedly made by Bertschy that, according to Plaintiff's, show an awareness that some outside contractors were using undocumented workers on certain crews and under-compensating them. Id. „„ 61-62. Bertschy also stated that Wal-Mart was trying to get the individual stores to end their relationships with outside contractors and to bring floor-cleaning services “in house.” Id. Ex. A at 58.
Although the Mullin Affidavit helped launch the federal government's investigation, the government ultimately concluded that “Wal-Mart did not have knowledge, at the time the independent contractors were initially hired, that the independent contractors knowingly hired, recruited, or employed unauthorized aliens ....” Stipulation in Compromise at 3, United States v. Wal-Mart Stores, Inc., 1:CV-05-0525 (M.D. Pa. filed Mar. 14, 2005) (annexed as Exhibit 2). The government further stated that “following a thorough investigation, the United States concluded that federal criminal proceedings involving Wal-Mart, its directors, officers, or employees would not be appropriate.” Id. at 4. Instead of bringing a criminal case, the government filed a civil action under 8 U.S.C. § 1324a to “enjoin, prevent and deter the employment of unauthorized aliens by contractors employed by the defendant, Wal-Mart Stores, Inc.” See Complaint at 1, United States v. Wal-Mart, 1:CV-05-0525 (M.D. Pa. filed Mar. 14, 2005) (emphasis added) (annexed as Exhibit 3). The parties simultaneously entered into a Consent Decree resolving the civil action without any finding or admission of wrongdoing. See Consent Decree, United States v. Wal-Mart Stores, Inc., 1:CV-05-0525 (M.D. Pa. filed Mar. 15, 2005) (annexed as Exhibit 4). In the Consent Decree, the government again acknowledged that it found no basis for pursuing criminal charges against Wal-Mart. Id. at 3 „ 9.
ARGUMENT
Count One of the Second Amended Complaint alleges that “Wal-Mart and its contractors formed an association-in-fact enterprise for the purpose of profiting from a systematic violation of immigration and labor, wage and hour laws and other laws,” in vi-

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olation of 18 U.S.C. § 1962(c) (“RICO enterprise claim”). SAC „ 125. Count Two alleges that Wal-Mart conspired with outside contractors to violate § 1962(c) in derogation of 18 U.S.C. § 1962(d) ( “RICO conspiracy claim”). Id. „ 139. Both Counts should be dismissed for the same reasons articulated in this Court's prior opinion and in Wal-Mart's initial motion to dismiss.
I. STANDARD OF REVIEW
In ruling on a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), a court must accept as true all well-pled allegations and must draw all reasonable inferences in the plaintiff's favor. Zavala, 393 F. Supp. 2d at 301-02. The burden is on the plaintiff, in the first instance, to “set forth sufficient information to outline the elements of his claims or to permit inferences to be drawn that these elements exist.” Id. at 302. The court “will not accept unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of actual allegations.” Id. A motion to dismiss should be granted where the plaintiff cannot prove any set of facts that would justify relief. Id. at 301-02. Dismissal with prejudice is warranted where, as here, the complaint fails to state a claim and repleading would be futile. See Anderson v. Ayling, 396 F.3d 265, 271-72 (3d Cir. 2005) (affirming dismissal of RICO claims with prejudice where proposed amendment was futile); In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1435 (3d Cir. 1997) (affirming dismissal with prejudice based on futility of further amendments).
When adjudicating a motion to dismiss, the court may consider documents attached to or referenced in the complaint, as well as matters of public record. Zavala, 393 F. Supp. 2d at 302. The plaintiff “cannot prevent a court from looking at the texts of the documents on which its claim is based by failing to attach or explicitly cite them.” Id. (quoting In re Burlington, 114 F.3d at 1426). When the plaintiff has relied extensively on documents attached to the complaint, the court may also consider related documents and public records attached to the defendant's motion that refute the plaintiff's claims. See Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). “Otherwise, a plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing to attach a dispositive document on which it relied.” Id.
II. PLAINTIFFS' RICO ENTERPRISE CLAIM SHOULD BE DISMISSED WITH PREJUDICE.
To state a RICO enterprise claim, Plaintiff's must plead that Wal-Mart (1) conducted, (2) an enterprise, (3) through a pattern, (4) of racketeering activity. See 18 U.S.C. § 1962(c); Zavala, 393 F. Supp. 2d at 303 (citing Lum v. Bank of Am., 361 F.3d 217, 223 (3d Cir.), cert. denied, 125 S. Ct. 271 (2004)). Plaintiff's must also establish that they have standing to sue, which requires a direct and proximate nexus between their injury and the alleged predicate acts of racketeering. Holmes v. Securities Investor Prot. Corp., 503 U.S. 258, 265-70 (1992); Anderson, 396 F.3d at 267.
Plaintiff cannot satisfy these elements. They have again failed to plead any viable predicate acts of racketeering against Wal-Mart. Nor can Plaintiff's show that their alleged injury -- denial of overtime and, in some cases, minimum wage -- was proxim-
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ately caused by any of the predicate acts asserted against Wal-Mart. Plaintiff's thus lack standing to sue under RICO. Plaintiff's have also failed to plead an adequate RICO enterprise, and have not sufficiently alleged that Wal-Mart controlled the “operation or management” of the so-called enterprise.
A. Plaintiff's Have Not Alleged A Single Viable Predicate Act of Racketeering Against Wal-Mart.
The predicate acts alleged in the Second Amended Complaint fall into three categories: (1) immigration offenses under 8 U.S.C. § 1324; (2) involuntary servitude under 18 U.S.C. § 1584; and (3) money laundering under 18 U.S.C. § 1956. SAC „„ 68, 128. Plaintiff's have not attempted to reallege that Wal-Mart hired undocumented workers in violation of 8 U.S.C. § 1324(a)(3)(A), or mail and wire fraud. Compare RAC „ 67 (alleging violation of 8 U.S.C. § 1324(a)(3)(A) and mail and wire fraud under 18 U.S.C. §§ 1341 and 1343), with SAC „„ 68, 128 (omitting such allegations).
1. Plaintiffs' Immigration Predicates Fail.
Plaintiff's continue to allege that Wal-Mart “exploits the plaintiff's and those similarly-situated through wide-scale violation of protective federal and state labor and employment laws.” SAC „ 41. The purpose of this scheme is to “ ‘enrich Wal-Mart’ at Plaintiffs' expense.” Zavala, 393 F. Supp. 2d at 302 (citation omitted). Even assuming this theory were true, Wal-Mart's conduct did not violate any of the alleged immigration offenses.
8 U.S.C. § 1324a - Hiring Undocumented Workers: As this Court previously held, the hiring and underpayment of undocumented workers does not violate 8 U.S.C. § 1324. See Zavala, 393 F. Supp. 2d at 317 (“[E]ven though Plaintiff's have alleged that Wal-Mart hired undocumented workers, and in many instances, knew that these workers were not authorized to work, these allegations are insufficient not only to state a predicate act of racketeering, but also for purposes of claiming that Wal-Mart agreed to the commission of predicate acts of racketeering.”). Section 1324 targets conduct like human trafficking and concealment. See United States v. Moreno-Duque, 718 F. Supp. 254, 259 (D. Vt. 1989); System Mgmt., Inc. v. Loiselle, 91 F. Supp. 2d 401, 409 (D. Mass. 2000). A different statute, 8 U.S.C. § 1324a, prohibits the employment of illegal aliens (and, as noted, was the basis of the civil injunction agreed to by Wal-Mart in the government investigation).
Plaintiffs' refiled RICO claims confirm that this case is -- at most -- about alleged employment practices in violation of Section 1324a. SAC „ 121 (alleged harm flows from illegal “hiring” and denial of “proper compensation”). This is fatal because Section 1324a is not a RICO predicate offense. Zavala, 393 F. Supp. 2d at 308 n. 1, 309; see also System Mgmt., 91 F. Supp. 2d at 409. Plaintiffs' repeated references to the hearsay statements attributed to two Wal-Mart corporate employees in the Mullin Affidavit only prove the point. The First Amended Complaint already alleged, more generally, that Wal-Mart “knew” that outside contractors were using undocumented workers on the floor-cleaning crews. AC „„ 3, 36-39, 43-44, 50, 54, 56-57. The “new” alleged statements in the Second Amended Complaint, even assuming arguendo they were true, only show that two Wal-Mart corporate employees were aware
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that some outside contractors might be using undocumented workers on some of their crews. Although such knowledge might be relevant to a potential Section 1324a offense, it does not give rise to a RICO claim. See Zavala, 393 F. Supp. 2d at 317 (holding that knowledge of contractors' use of undocumented workers did not state RICO enterprise or conspiracy claims). As in System Management, this Court should reject Plaintiffs' continuing attempt “to fit the alleged employment activity into a statute related to bringing in and harboring aliens.” 91 F. Supp. 2d at 409.
Even apart from this overarching defect, Plaintiff's have not pled the requisite elements of the immigration predicates that are reasserted in the Second Amended Complaint.
8 U.S.C. § 1324(a)(1)(A)(ii) - Transporting: Plaintiff's have again failed to plead at least two of the elements necessary to state a transporting claim: (1) that WalMart knowingly transported or attempted to transport an illegal alien; and (2) that the transportation was done in furtherance of the alien's illegal presence in the United States. Zavala, 393 F. Supp. 2d at 305; United States v. Romero-Cruz, 201 F.3d 374, 378 (5th Cir. 2000); United States v. Diaz, 936 F.2d 786, 788 (5th Cir. 1991); United States v. Parmelee, 42 F.3d 387, 390 (7th Cir. 1994). With respect to the first element, Plaintiff's do not allege that Wal-Mart transported anyone. Rather, they allege that contractors transported workers to and from different cleaning jobs. SAC „„ 67, 87-89. And with respect to the second element, Plaintiff's have not pled that the alleged transporting was done “in furtherance” of an illegal presence. “Furthering an illegal presence, for purposes of stating the predicate act of transporting, involves more than transporting the undocumented worker to his or her place of employment.” Zavala, 393 F. Supp. 2d at 305; see also System Mgmt., 91 F. Supp. 2d at 411; Moreno-Duque, 718 F. Supp. at 258-59; United States v. ChavezPalacios, 30 F.3d 1290, 1294 (10th Cir. 1994).
Plaintiff's inexplicably recite the single specific account of alleged “transporting” that the Court already considered and rejected in dismissing the First Amended Complaint; namely, that an outside contractor met Plaintiff Kunc at the airport and drove him to a location in Virginia, where he began work at a WalMart store. Compare AC „ 44, with SAC „ 88. These allegations fail to state a transporting claim for the reasons the Court articulated in its prior opinion. Zavala, 393 F. Supp. 2d at 305-06. By Plaintiffs' own admission, Plaintiff Kunc entered this country legally on a tourist visa. SAC „ 88. Thus, at the time he was allegedly transported, Kunc was not an illegal alien and driving him from the airport to a Wal-Mart store was not a crime, let alone an act of transporting under 8 U.S.C. § 1324(a)(1)(A)(ii).
Conspiracy to Transport: Plaintiff's have also failed to plead conspiracy to transport illegal aliens in violation of 8 U.S.C. § 1324(a)(1)(A)(v)(I). A conspiracy consists of an agreement to commit a crime, an intent to achieve or knowledge of the unlawful purpose of the agreement, and overt conduct in furtherance of the unlawful purpose. Zavala, 393 F. Supp. 2d at 305 n.7 (citing United States v. Klein, 515 F.2d 751, 753 (3d Cir. 1975)). Plaintiffs' conspiracy theory fails because they have not pled an agreement between Wal-Mart and its contractors to violate the transporting

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statute; they have not alleged that Wal-Mart intended or knew that the contractors would transport aliens in furtherance of their illegal presence; and they do not allege any overt conduct or involvement by Wal-Mart, such as directing the contractors to move undocumented workers from a point of unlawful entry to another place in the United States for the purpose of avoiding detection. The only “facts” that Plaintiff's plead in support of their conspiracy claim -- viz., that Wal-Mart used contractors interchangeably to avoid detection and made payments to contractors for floor-cleaning services, SAC „„ 99-100, 112, -- have nothing to do with an alleged act of transporting within the meaning of 8 U.S.C. § 1324(a)(1)(A)(ii).
Aiding and Abetting Transporting: Plaintiffs' aiding and abetting claim under 8 U.S.C. § 1324(a)(1)(A)(v)(II) is likewise flawed. To plead aiding and abetting, Plaintiff's must (1) allege facts that, if proven, would state a transporting offense, United States v. Green, 25 F.3d 206, 209 (3d Cir. 1994); and (2) allege that Wal-Mart participated in the offense through “affirmative conduct” intended to aid the criminal venture, Zavala, 393 F. Supp. 2d at 306. Plaintiff's contend that WalMart aided and abetted the transportation of illegal aliens by requesting replacement cleaning crews. SAC „„ 114-116. But there is no claim that Wal-Mart requested “replacement” crews of illegal aliens. And even if Wal-Mart knew that undocumented workers would be moved from one store to another, such knowledge does not give rise to an aiding and abetting claim because transporting undocumented workers from one place of employment to another does not constitute transporting. Zavala, 393 F. Supp. 2d at 305. By Plaintiffs' own account, the “replacement” crews were allegedly being transported by the contractors to work in other Wal-Mart stores, not to “further” any worker's illegal presence in the United States within the meaning of 8 U.S.C. § 1324(a)(1)(A)(ii). Moreover, requesting replacement” workers does not constitute “affirmative conduct” intended to facilitate the commission of a transporting offense. Compare Zavala, 393 F. Supp. 2d at 306 (describing acts that might rise to the level of “affirmative conduct” in the context of a transporting claim).
8 U.S.C. § 1324(A)(1)(A)(iii) - Harboring: To plead harboring, Plaintiff's must allege that Wal-Mart (1) knew of or recklessly disregarded Plaintiffs' illegal presence in the United States; and (2) concealed, harbored, or shielded Plaintiff's from detection or attempted to do so. Zavala, 393 F. Supp. 2d at 306. Plaintiff's repeat, again virtually verbatim, the defective harboring allegations from the First Amended Complaint. They assert that a Wal-Mart contractor pled guilty to a harboring crime and that other contractors arranged housing near Wal-Mart stores for undocumented workers, such as Plaintiff Kunc. SAC „„ 49-50, 67, 87-89, 92, 113. The Court dismissed these identical claims in the First Amended Complaint, holding that “[a] contractor's ‘lodging’ of an undocumented worker and ‘putting him to work’ falls short of alleging that Wal-Mart sheltered undocumented aliens for the purpose of concealing them and avoiding their detection by immigration authorities.” Zavala, 393 F. Supp. 2d at 308.
Plaintiff's also reiterate their allegation that some contractors urged individuals to obtain false identification documents. SAC „ 21-22, 91. But they do not allege that Wal-Mart was involved in any such conduct, thus barring their harboring claim. Zavala, 393 F. Supp. 2d at 308 (failure to allege that Wal-Mart was “involved dir-
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ectly” in the alleged harboring was fatal to Plaintiffs' harboring predicate).
Plaintiff's also allege that a single Wal-Mart store sometimes allowed undocumented workers to sleep in a back room between shifts and to keep their personal belongings there while working. SAC „ 110. This claim (which again is not new but drawn directly from the Rios Affidavit) fails to state a viable harboring predicate. There is no allegation that Wal-Mart knew the immigration status of these “replacement” workers -- indeed, even the federal government did not know. Id. Ex. E at 86 (acknowledging that worker's immigration status was “not known”). Nor can Plaintiff's show that Wal-Mart allowed these workers to “live” in the store for purposes of shielding them from detection by immigration authorities. See Zavala, 393 F. Supp. 2d at 307 (harboring may occur when the defendant allows undocumented workers to reside in the store); United States v. Zheng, 306 F.3d 1080, 1085 (11th Cir. 2002); United States v. Singh, 261 F.3d 530, 533 (5th Cir. 2001). In both Zheng and Singh, for example, the illegal aliens did more than nap and store their things on the defendant's premises -- they lived and worked there full time. Here, in contrast, the alleged “replacement crew” worked in plain sight of the public when cleaning the floors and, by Plaintiffs' own account, were freely observed by WalMart Associates and others when in the “back room.” See SAC Ex. E at 86 (crew members “sometimes seen sleeping in the back room where they keep their personal belongings”) (emphasis added).
Finally, Plaintiff's allege that Wal-Mart's “regular and systematic” practice of locking stores during non-business hours shielded illegal aliens from detection. SAC „ 109. But this allegation cannot be reconciled with the fact that hundreds of WalMart stores, including many of the stores where Plaintiff's allegedly worked, were -- by Plaintiffs' own admission -- open to the public twenty-four hours per day. Id. „„ 21-22. Indeed, Wal-Mart kept most of its stores open around the clock during the busiest shopping seasons, when all Plaintiff's would have worked in plain view of the public. Id. Tellingly, the attachments to the Second Amended Complaint confirm that, by merely locking some store doors at night, Wal-Mart did not engage in harboring within the meaning of 8 U.S.C. § 1324(A)(1)(A)(iii). Federal agents conducted surveillance of cleaning crews as they regularly entered and exited Wal-Mart stores in plain sight; and some agents freely entered stores during overnight shifts to observe and report on the crews working there. See, e.g., id. Ex. E at 31-37. Moreover, Wal-Mart cooperated with the government investigation and even advised law enforcement authorities when it suspected that undocumented workers were cleaning its stores. Id. „ 115. Thus, Plaintiffs' own allegations and pleading attachments negate any plausible inference that Wal-Mart locked its doors to shield undocumented workers from detection by immigration authorities or anyone else.
Conspiracy to Harbor: Plaintiff's similarly fail to state a harboring conspiracy. They reallege that Wal-Mart knew of its contractors' illegal hiring practices but nonetheless continued associating with them. See, e.g., SAC „„ 48-49. These allegations are insufficient for the same reasons previously found by the Court. Zavala, 393 F. Supp. 2d at 307 (knowledge and continued association are insufficient to state a conspiracy to harbor predicate). Plaintiffs' suggestion that Wal-Mart conspired to harbor undocumented workers by directing its contractors to use multiple
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shell corporations also falls short. SAC „ 47. Plaintiff's must allege conduct intended to conceal undocumented workers from detection by immigration authorities, Zavala, 393 F. Supp. 2d at 307, and not conduct that, at most, was intended to conceal the identity of some of the contractors from Wal-Mart store managers.
Aiding and Abetting Harboring: Plaintiffs' aiding and abetting theory is equally flawed. They allege that Wal-Mart aided and abetted illegal harboring by paying the contractors for their services. SAC „ 112. This claim fails because Plaintiff's cannot allege that Wal-Mart paid the contractors for housing undocumented workers with a shared intent to conceal them from immigration authorities. See Zavala, 393 F. Supp. 2d at 304-05 n.6 (noting that the defendant must share the criminal intent of the principal to be held liable under an aiding and abetting theory). Simply paying the contractors for their floor-cleaning services does not constitute an aiding and abetting offense under 8 U.S.C. § 1324(A)(l)(A)(iii).
8 U.S.C. § 1324(a)(1)(A)(iv) - Encouraging: Plaintiff's wrongly accuse Wal-Mart of criminally encouraging illegal aliens, which consists of (1) inducing an alien to come to, or remain in, the United States, and (2) knowing or recklessly disregarding the fact that the alien's arrival or continued presence in the United States would be illegal. Zavala, 393 F. Supp. 2d at 307-08. Merely offering an undocumented worker employment does not suffice. Id. at 308; United States v. Oloyede, 982 F.2d 133, 136-37 (4th Cir. 1992); United States v. Bafitri, No. 99-47, 2000 WL 34030830, at *1 (N.D. Iowa Apr. 11, 2000).
Plaintiffs' own allegations negate their encouragement claim. The Second Amended Complaint alleges that Plaintiff's were “[d]riven by poverty and the lack of economic opportunities at home,” to enter the United States illegally for the purpose of seeking unlawful employment. SAC „ 42. This admission refutes any assertion that Plaintiff's were lured to this country by independent contractors -- let alone WalMart.
Instead of alleging any direct acts of “encouragement” by Wal-Mart, Plaintiff's repackage the same deficient encouraging allegations they levied against the contractors in the First Amended Complaint. Id. „„ 87-88. Again, the only specific example of “encouraging” that Plaintiff's provide -- and which this Court already rejected -- involves Plaintiff Kunc. Plaintiffs reallege that a contractor placed an advertisement in the Czech Republic promising employment in the United States. Id. „ 88. Plaintiff Kunc allegedly responded to the listing and subsequently traveled to the United States legally on a tourist visa. Id. These allegations do not state an encouraging claim against anyone, much less Wal-Mart, because Plaintiff's cannot allege that the advertisement sought illegal workers or that it was placed with the intent of attracting illegal aliens. Plaintiff's do not even allege that the advertisement promised employment in Wal-Mart stores. And finally, Plaintiff Kunc arrived in this country legally, but overstayed his visa -- like other individuals comprising the putative plaintiff class. Id.; see, e.g., id. Ex. A at 18-19, Ex. E at 44. Plaintiff's cannot, as a matter of law, state an encouraging claim based on the arrival of such individuals in the United States. The most Plaintiff's allege is that Wal-Mart provided, through its relationship with outside contractors, a prospect of

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employment once Plaintiff's chose to stay in the country illegally. Such claims do not constitute an encouraging offense, for the same reasons stated in Zavala, 393 F. Supp. 2d at 308.
Conspiracy/Aiding and Abetting Encouragement: The Second Amended Complaint contains no new allegations to support a claim that Wal-Mart conspired to encourage illegal aliens or aided and abetted an encouraging offense. Plaintiff's have not alleged -and cannot allege -- any specific agreement by Wal-Mart to encourage aliens to enter or remain in the United States illegally or any other affirmative conduct by WalMart designed to achieve that specific goal. Indeed, as Plaintiff's well know, they entered this country of their own volition, and not through any specific attempt by Wal-Mart to bring them here illegally. Again, all that Plaintiff's can allege is that Wal-Mart compensated the contractors for their floor-cleaning services. SAC „ 100. As the Court already held, this claim “fails to allege, as it must, that WalMart took affirmative steps to assist Plaintiff's to enter into or remain unlawfully in the United States.” Zavala, 393 F. Supp. 2d at 308. Accordingly, Plaintiff's have failed to allege viable encouraging conspiracy or aiding and abetting predicates against Wal-Mart.
8 U.S.C. § 1324(a)(1)(B)(i) - Financial Gain: Plaintiff's inexplicably reallege 8 U.S.C. § 1324(a)(1)(B)(i) as a predicate offense, SAC „„ 68, 128, despite this Court's prior holding that it is not. As the Court observed, the “financial gain” provision in Section 1324(a)(1)(B)(i) is “not a separate predicate act, but rather a penalty provision, derivative of the other immigration predicates enumerated at Section 1324.” Zavala, 393 F. Supp. 2d at 304 n.5. Plaintiffs' refiled claim is frivolous.
2. Plaintiffs' Involuntary Servitude Predicate Fails.
Plaintiff's reallege that they were subjected to “forced labor” in violation of 18 U.S.C. § 1584. SAC „„ 68, 118-120, 128. This claim is frivolous. To plead a Section 1584 violation, Plaintiff's must show that Wal-Mart “knowingly and willfully” held them in a condition of “involuntary servitude.” 18 U.S.C. § 1584. Involuntary servitude is “a condition of servitude in which the victim is forced to work for the defendant by the use or threat of physical restraint or physical injury, or by the use or threat of coercion through law or the legal process.” United States v. Kozminski, 487 U.S. 931, 952 (1988). The defendant must exert “superior and overpowering force,” which convinces the plaintiff that there is no way to avoid continued labor or confinement. United States v. Shackney, 333 F.2d 475, 486 (2d Cir. 1964).
Plaintiff's do not -- and cannot -- allege that Wal-Mart “knowingly and willfully” compelled them to work against their will. They instead claim that “[c]ontractor used or threatened to use coercion (including physical coercion) which caused undocumented plaintiffs and other class members reasonably to believe that, given their vulnerable status, they had no alternative but to continue to work at Wal-Mart.” SAC „ 118 (emphasis added). Plaintiffs further allege that unspecified contractors “at times refused to pay class members anything at all for their work;” required plaintiff's to pay “security deposits” as a condition of their employment; and “used

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the threat of deportation to frighten undocumented janitors into acquiescence.” Id. „„ 119-120.
This Court has heard these claims before and rightly rejected them. Plaintiffs' vague allegations of “physical” coercion and abuse do not implicate Wal-Mart; indeed, Plaintiff's again fail to “identify who was directing or perpetrating the abuse, or the nature of the abuse that some of these plaintiff's may have endured.” Zavala, 393 F. Supp. 2d at 311 (dismissing involuntary servitude predicate based on the same vague abuse allegations). And Plaintiffs' “economic coercion” allegations, which also do not involve Wal-Mart, fail as a matter of law because an involuntary servitude predicate cannot be based on financial pressure. See Kozminski, 487 U.S. at 952 (involuntary servitude requires compulsion through physical restraint, law or legal process); Kaveney v. Miller, No. 93-0218, 1993 WL 298718, at *2 (E.D. Pa. July 30, 1993) (economic pressure did not constitute involuntary servitude). Finally, this Court has already held that threats of deportation are “insufficient” to state an involuntary servitude predicate. Zavala, 393 F. Supp. 2d at 311. Plaintiffs' wholesale reiteration of this claim in the face of this Court's decision is, as the Shackney court warned, an attempt to use Section 1584 as a “tool for blackmail and other serious abuse.” 333 F.2d at 487.
Besides failing to rise to the level of involuntary servitude, Plaintiffs' vague claims against the contractors cannot be attributed to Wal-Mart under “conspiracy” or “aiding and abetting” theories. Unlike some other predicate statutes, Section 1584 does not contain a conspiracy or aiding and abetting provision. Compare 18 U.S.C. § 1584, with 8 U.S.C. § 1324(a)(1)(A)(v)(I)-(II). Moreover, the RICO statute itself does not have a general conspiracy or aiding and abetting predicate that would enable Plaintiff's to state a Section 1584 offense against Wal-Mart based on the conduct of outside contractors. See 18 U.S.C. § 1961(1); Pennsylvania Ass'n of Edwards Heirs v. Rightenour, 235 F.3d 839, 840 (3d Cir. 2000); see also Tr. at 89:17-90:3.
Plaintiffs' only direct allegation against Wal-Mart itself is baseless. Plaintiff's assert that Wal-Mart “compelled the labor of its janitors through its widespread and systematic practice of intentionally locking these vulnerable workers into its stores during their shifts.” SAC „ 118. This accusation does not come close to pleading involuntary servitude -- an offense that requires egregious conduct tantamount to slavery. See, e.g., United States v. Harris, 701 F.2d 1095, 1098 (4th Cir. 1983) (victims were deceived, kidnapped, beaten, threatened, guarded and jailed if they tried to escape and one victim died of abuse); United States v. Bibbs, 564 F.2d 1165, 1167-68 (5th Cir. 1977) (victims were lured from home under false pretenses, compelled to work, physically prevented from escaping at gunpoint, threatened with death, and beaten if they tried to escape); United States v. Lewis, 644 F. Supp. 1391, 1402 (W.D. Mich. 1986) (children were severely beaten and were forced to watch beatings of their parents, school teacher and other adults), aff'd sub nom. United States v. King, 840 F.2d 1276 (6th Cir. 1988). In stark contrast to these involuntary servitude cases, Plaintiffs' only complaint here is that some Wal-Mart stores locked their doors during overnight shifts -- when those stores were closed to the public -- and that some Plaintiff's could not leave the stores “unless
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and until a Wal-Mart manager appeared with a key.” SAC „„ 8-16, 21-22. These claims do not allege any unlawful or abusive conduct by Wal-Mart, let alone conduct “tantamount to slavery.” Nor can Plaintiff's plausibly allege that Wal-Mart used “overpowering force” to enslave them when, by their own admission, they returned to work night after night, month after month to the same stores, only to be “locked in” each time against their will. Plaintiff's do not assert that Wal-Mart personnel restrained them from leaving the stores when their shifts were over, or that emergency exits were unavailable if they wanted to depart at any time. Indeed, they do not even allege that a single Plaintiff ever asked to leave a store but was unlawfully restrained by Wal-Mart through the use of force.
The few facts that Plaintiff's do allege refute any notion that Wal-Mart used “overwhelming force” to prevent them from quitting. For example, Plaintiff's Zednek and Jaros affirmatively assert that they changed store locations of their own volition because they felt cheated by a contractor. SAC „„ 21-22, 102. Another opt-in Plaintiff, Teresa Szczesiak, affirmatively asserts that she “quit” working on a crew at a Wal-Mart store when she grew dissatisfied with the “working conditions.” Decl. of Teresa Szczesiak (annexed as Exhibit 5). As these and other similar admissions show, and as this Court previously found, “Plaintiff's have not alleged that they did not have any way to avoid ‘continued service or confinement.’ ” Zavala, 393 F. Supp. 2d at 311.
The “involuntary servitude” claims in the Second Amended Complaint again lack any basis in fact and are contradicted by Plaintiffs' own allegations. Plaintiff's should be sanctioned for repleading such frivolous claims against Wal-Mart.
3. Plaintiffs' Money Laundering Predicate Fails.
Plaintiff's next allege that Wal-Mart conspired to commit money laundering in violation of 18 U.S.C. § 1956(h) by instructing a single contractor to create “corporate fronts” and “shell companies” in order to hide his profits from detection. SAC „„ 47, 117, 128. Plaintiff's further allege, on information and belief, that Wal-Mart entered into similar conspiracies with other contractors. Id. „ 117. This Court held that virtually identical allegations concerning the use of corporate shells were too “vague and insufficient” to state RICO predicates against Wal-Mart because Plaintiff's did not “identify the relevant financial transactions or conduct by Wal-Mart, or describe more particularly the contractors' ‘money laundering activities' that allegedly involved banks, accountants, attorneys, and others.” Zavala, 393 F. Supp. 2d at 315. The same conclusion is warranted here.
The only “new” money laundering allegation in the Second Amended Complaint is that Leroy Scheutts, a former Wal-Mart corporate employee, directed a contractor, nearly ten years ago, to establish multiple floor-cleaning companies so that the contractor could continue providing floor-cleaning services if one of his companies was found to be employing undocumented workers. SAC „„ 47, 117. This claim is based on the Mullin Affidavit, which recounts an alleged conversation between Christopher Walters, a former Wal-Mart contractor, and Scheutts. Id. „ 47, Ex. A at 42-43. The suggestion that Scheutts directed Walters to establish corporate fronts for the purpose

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of laundering funds reflects a deliberate misreading of the Mullin Affidavit. The Mullin Affidavit makes clear that Wal-Mart fired Walters for employing undocumented workers on one of his crews; at the same time, Walters claims that Scheutts recognized that it might be difficult for Walters to ensure that none of his crews were employing unauthorized laborers. Id. Ex. A at 42-43. Even assuming this third-hand hearsay were true, which Wal-Mart denies, the alleged statement by Scheutts only suggests that the contractor use different companies so that he would not be disqualified from doing future business with Wal-Mart if, for some reason, undocumented workers were found on another one of his crews. While this may establish an attempt to evade Wal-Mart's policies, the alleged statement does not support any claim that Scheutts instructed the contractor to construct corporate shells for the purpose of laundering funds. Indeed, the Mullin Affidavit itself did not even attempt to allege probable cause to investigate Wal-Mart for any alleged money laundering activity. Id. at 1.
Besides misrepresenting the alleged Scheutts statement, Plaintiff's have failed to pled a viable money laundering predicate against Wal-Mart for myriad other reasons. For example, Plaintiff's do not explain how payments made to the contractors for their services constitute the “proceeds of the illegal activity.” Id. „ 117. The most that can be discerned from Plaintiffs' vague allegations is that Wal-Mart saved money by contracting with companies that underpaid illegal workers. Saving money by violating a wage-and-hour law does not constitute money laundering. Cf. Anderson v. Smithfield Foods, Inc., 209 F. Supp. 2d 1270, 1275 (M.D. Fla. 2002) (“Saving money as a result of [alleged violations of environmental law] does not make the money illegally obtained for the purposes of the money laundering statute.”), aff'd, 353 F.3d 912 (11th Cir. 2003).
Nor have Plaintiff's described Wal-Mart's conduct in furtherance of the alleged conspiracy. There are no allegations that Wal-Mart paid an unrelated third-party who, in turn, surreptitiously transferred funds to the contractors. And there are no allegations that Wal-Mart “structured” its financial transactions with the contractors to avoid statutory reporting requirements. Compare SAC Ex. E at 97-99.
In lieu of such allegations against Wal-Mart, Plaintiff's reincorporate the Forfeiture Action and Rios Affidavit to show that the government accused some contractors of laundering the proceeds of criminal acts. SAC „„ 93-97, 117. But neither the Forfeiture Action nor the Rios Affidavit implicated Wal-Mart, and this Court already rejected Plaintiffs' reliance on the Forfeiture Action when it dismissed the original money laundering predicates. Zavala, 393 F. Supp. 2d at 315 (noting that the Forfeiture Action involved “maintenance or janitorial contractors ostensibly not implicated in this action at this time”). Plaintiffs' conclusory money laundering claims against Wal-Mart in the Second Amended Complaint should be rejected for the same reasons.
B. Plaintiff's Lack Standing To Pursue A RICO Enterprise Claim Against Wal-Mart.
Even assuming arguendo that Plaintiff's had asserted a viable RICO predicate act against Wal-Mart, the amended RICO claims would still fail. To pursue a RICO enter-

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prise claim, Plaintiff's must establish standing to sue. Anderson, 396 F.3d at 269; Balthazar v. Atlantic City Med. Ctr., 279 F. Supp. 2d 574, 588 (D.N.J. 2003), aff'd, 137 Fed. Appx. 482 (3d Cir. 2005). Standing exists only if Plaintiff's have suffered an injury to their business or property “by reason of” the RICO violation. 18 U.S.C. § 1964(c); Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496-97 (1985). Plaintiff's must thus demonstrate that Wal-Mart's alleged RICO violation was both a “but for” cause of their injury and the proximate cause of their injury. See Holmes, 503 U.S. at 265-70; Anderson, 396 F.3d at 269.
“Proximate cause is interpreted narrowly in RICO claims.” Eli Lilly & Co. v. Roussel Corp., 23 F. Supp. 2d 460, 483 (D.N.J. 1998). The alleged injury must be directly and substantially caused by a RICO predicate act, id., “and not merely by a nonracketeering act in furtherance of a broader RICO conspiracy,” Anderson, 396 F.3d at 269. If the causal connection is indirect or remote, Callahan v. A.E.V., Inc., 182 F.3d 237, 260-61 (3d Cir. 1999), or if an intervening act has severed the causal chain, Anderson, 396 F.3d at 270, then proximate causation does not exist and a RICO enterprise claim must be dismissed for lack of standing, see, e.g., Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162, 1167-68 (3d Cir. 1989) (dismissing RICO enterprise claim for lack of standing because the alleged harm was not caused by a predicate act), overruled on other grounds, Beck v. Prupis, 529 U.S. 494 (2000); Eli Lilly, 23 F. Supp. 2d at 485 (finding that “intervening acts” negated plaintiff's RICO standing).
1. Plaintiff's Cannot Show Proximate Causation.
Plaintiffs' case theory -- both in their original pleadings and in the Second Amended Complaint -- is based on the allegation that they were exploited as cheap labor due to their illegal status. SAC „„ 1-3, 7-16, 18-19, 21-22, 24-25, 27-28, 30, 40-42, 119, 121, 125, 146-150; Tr. at 102:17-20, 106:3-7; see also RAC „„ 7-18, 20-21, 23-24, 26-27, 32, 36, 39, 41, 54, 57, 64, 84-90. Plaintiffs' claimed injury -- wage underpayment -- was not proximately caused by any of the predicate acts of racketeering alleged against Wal-Mart, but rather would have resulted from violations of the FLSA. Because the FLSA is not a RICO predicate statute, injuries arising from wage and overtime violations cannot support a claim for RICO liability. See 18 U.S.C. § 1961(1); Livingston v. Shore Slurry Seal, Inc., 98 F. Supp. 2d 594, 600 (D.N.J. 2000) (“[A] violation of a state or federal prevailing wage statute is not a predicate act for purposes of RICO liability.”); Commercial Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374, 383 (2d Cir. 2001) (“[P]aying workers less than the prevailing wage and failing to withhold payroll taxes are not RICO predicate acts.”); Danielsen v. Burnside-Ott Aviation Training Ctr., Inc., 941 F.2d 1220, 1228-29 (D.C. Cir. 1991) (remedy for wage dispute was under federal wage statute, not RICO).
Plaintiff's attempt to bootstrap RICO standing by arguing that the alleged predicate acts were the “necessary cause” of their harm. SAC „ 121. This is nothing more than “but for” causation, which does not suffice as a matter of law. See Holmes, 503 U.S. at 268 (RICO standing requires “but for” and proximate causation); Callahan, 182 F.3d at 260 (“A causal connection simpliciter between the defendants' actions and

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the plaintiffs' injuries is insufficient to give rise to a RICO claim; the plaintiff must show that that connection is proximate, i.e., not too remote.”). Plaintiff's cannot establish the direct and substantial nexus required to create RICO standing for their alleged wage injuries.
Immigration Predicates: Even if Plaintiff's could somehow connect Wal-Mart to the alleged acts of transporting, harboring, and encouraging illegal aliens, none of these offenses directly or substantially caused Plaintiff's any RICO harm. To the contrary, Plaintiff's were complicit in and benefited from the alleged offenses. By Plaintiffs' own admission, these acts enabled them to obtain jobs and compensation to which they were not entitled by law. SAC „„ 7-28.
Furthermore, all that Plaintiff's assert is that, “but for” the alleged immigration predicates, they would not have obtained jobs cleaning Wal-Mart stores and Wal-Mart and its contractors would not have underpaid them. Id. „ 121 (immigration predicates were the “necessary means through which plaintiff's were denied proper compensation,” as well as the “necessary means for participants in the enterprise to profit as they did from exploiting plaintiffs”). The alleged immigration offenses were, at most, remote links in a causal chain that ultimately resulted in the claimed denial of overtime and, in some instances, minimum wage. Such attenuated offenses do confer RICO standing on Plaintiff's. See Anderson, 396 F.3d 269-70; Callahan, 182 F.3d at 260; Rehkop v. Berwick Healthcare Corp., 95 F.3d 285, 287 (3d Cir. 1996); Eli Lilly, 23 F. Supp. 2d at 484-85.
Notably, Plaintiff's have not attempted to replead the only RICO predicate offense that even relates to the employment of undocumented workers. This Court dismissed Plaintiffs' original employment allegations under 8 U.S.C. § 1324(a)(3)(A) for failure to state a claim. The Court deemed Plaintiffs' allegations insufficient because Plaintiff's did not allege that Wal-Mart knew that putative class members were illegal aliens who were brought into the United States illegally for the purpose of obtaining unlawful employment. Zavala, 393 F. Supp. 2d at 309. To the contrary, Plaintiff's and other putative class members entered the country legally and overstayed their visas, SAC „ 88, Ex. A at 18-19, Ex. E at 44, or simply “walked over the border” of their own volition, Tr. at 99:16-22. These admissions preclude Plaintiff's from asserting a violation of Section 1324(a)(3)(A), which requires both illegal entry and proof that the aliens were “brought” into the country to work for the defendant-employer. Zavala, 393 F. Supp. 2d at 309; System Mgmt., 91 F. Supp. 2d at 408.
Plaintiffs' inability to plead a Section 1324(a)(3)(A) offense distinguishes this case from Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1166 (9th Cir. 2002) and Commercial Cleaning, 271 F.3d at 378-79, on which Plaintiff's mistakenly rely. In Mendoza and Commercial Cleaning, the courts held that lawful workers and a legal domestic business, respectively, had standing to pursue RICO claims against defendants who had allegedly violated Section 1324(a)(3)(A) by employing illegal aliens at their facilities. The harm alleged in those cases (depressed wages and lost business) flowed directly from the defendants' alleged violations of Section 1324(a)(3)(A), which is a RICO predicate. Here, in contrast, Plaintiff's and other potential class

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members admittedly entered the United States lawfully but overstayed to take advantage of better (but unlawful) employment opportunities here, or entered on their own, via “irregular means,” without Wal-Mart's knowledge. SAC „ 88, Ex. A at 18-19, Ex. E at 44; Tr. at 99:16-22; see also „„ 7-16, 18-19, 21-22, 24-25, 27-28 (recounting Plaintiffs' undocumented status). Thus, unlike the plaintiff's in Mendoza and Commercial Cleaning, who were the alleged victims of a viable RICO predicate offense (Section 1324(a)(3)(A)), Plaintiff's cannot claim any injury flowing from their alleged immigration law violations here (transporting, harboring, encouraging). Rather, Plaintiff's would only have benefited from such alleged violations, which enabled them to remain illegally in the United States and, by their own account, to escape “the lack of economic opportunities at home,” SAC „ 42.
Involuntary Servitude Predicate: As noted, the Second Amended Complaint realleges that Plaintiff's were not paid overtime or, in a few instances, minimum wage. See, e.g., SAC „„ 21-22. This alleged injury arises directly from non-compliance with the FLSA, not from any conduct that even remotely resembles slavery. See Martinez v. Bohls Bearing Equip. Co., 361 F. Supp. 2d 608, 614 (W.D. Tex. 2005) (involuntary servitude encompasses forced labor akin to slavery, not claims that plaintiff was not paid enough).
Money Laundering Predicate: Plaintiff's claim that they were harmed by the alleged money laundering offenses because these acts “shielded the enterprise from detection and thereby continued its existence.” SAC „ 121. This -- again -- is at most “but for” causation (i.e., but for the money laundering, the contractors might have been discovered and thus unable to employ the undocumented workers at lower wages). To the extent that the contractors laundered funds, their conduct was directed at the government and was intended to conceal the flow of cash payments. Id. „„ 93-97, 117. Plaintiff's do not -- and cannot -- allege that such money laundering activity had any direct connection to their alleged wage injuries, which would have resulted from violations of the FLSA. See Callahan, 182 F.3d at 261 (no proximate cause where illegal conduct was directed at the government); see also Eli Lilly, 23 F. Supp. 2d at 483-85 (dismissing RICO claim for lack of standing where misrepresentations to government were not proximate cause of plaintiff's losses). Thus, even if it could be shown that the contractors' money laundering activities perpetuated their unlawful employment scheme (as opposed to concealing cash payments), it still would be insufficient to establish RICO standing because such conduct did not proximately cause Plaintiffs' alleged wage claims. See Williams v. Waldron, 14 F. Supp. 2d 1334, 1339 (N.D. Ga. 1998) (money laundering and fraud may have enabled the illegal scheme to persist, but those offenses did not proximately cause the plaintiff's injuries), aff'd sub nom. United States v. Richardson, 248 F.3d 1180 (11th Cir. 2001).
2. Plaintiffs' Own Conduct Breaks The Causal Chain.
Intervening acts may attenuate the causal chain and negate RICO standing. Anderson, 396 F.3d at 270; Eli Lilly, 23 F. Supp. 2d at 485. For example, a plaintiff's own conduct may sever causation and preclude RICO claims. “At least two circuits have found that a plaintiff cannot establish proximate cause where the plaintiff voluntarily and knowingly engages in the very RICO activities from which it later claims

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injury.” Green v. Aztar Corp., No. 02-3514, 2003 WL 22012205, at *3 (N.D. Ill. Aug. 22, 2003); Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173, 188 (3d Cir. 2000) (voluntary participation precludes RICO standing because injury is “self-inflicted”); In re Mastercard Int'l Inc., 313 F.3d 257, 264 (5th Cir. 2002) (no RICO standing where plaintiff's knowingly and voluntarily chose to engage in conduct that resulted in alleged harm). These same principles apply here.
By their own account, Plaintiff's and the putative class members knowingly and voluntarily entered this country by “irregular means,” or unlawfully overstayed their visa authorizations, for the express purpose of obtaining illegal employment. SAC „ 88, Ex. A at 18-19, Ex. E at 44; Tr. at 99:16-22; see also „„ 7-16, 18-19, 21-22, 24-25, 27-28. Plaintiffs' “vulnerable” immigration status is, as the Supreme Court recognized, “the result of the alien's own actions.” Zavala, 393 F. Supp. 2d at 319 (citing Plyler v. Doe, 457 U.S. 202, 219 n.19 (1982)). Indeed, their membership in the putative class alleged in the Second Amended Complaint “is itself a crime.” Plyler, 457 U.S. at 219 n.19; see also Zavala, 393 F. Supp. 2d at 320 (even assuming Plaintiff's “comprise a socially, culturally, linguistically and politically isolated group,” this status “is traceable to their decision, at the outset, to enter and remain unlawfully in the United States”).
Plaintiff's could have avoided their alleged wage harms by choosing not to remain in the United States unlawfully to work without proper authorization. Having chosen to break these laws, however, Plaintiff's cannot now seek to use the same violations that they knowingly and voluntarily committed to pursue RICO claims against Wal-Mart. Their own conduct broke any causal connection between Wal-Mart's alleged acts and Plaintiffs' claimed wage injuries. See Doug Grant, 232 F.3d at 188 (plaintiff's who could have avoided injury but chose not to lack RICO standing because their injury is self-inflicted); In re Mastercard, 313 F.3d at 264 (plaintiffs who knowingly and voluntarily engaged in a course of conduct lack standing to pursue RICO claims based on injuries arising out of that conduct); Green, 2003 WL 22012205, at *3 (plaintiff's knowing and voluntary conduct “interrupted” the causal chain between defendants' acts and the alleged harm and therefore negated standing).
3. Plaintiff's Lack Standing Even Under The Broader Steamfitters Proximate Cause Analysis.
The Third Circuit recently suggested that the proximate cause analysis employed in antitrust cases may be useful in evaluating a RICO plaintiff's standing. Anderson, 396 F.3d at 270. The court noted that the six-factor antitrust test articulated in Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 924 (3d Cir. 1999), may help “more fully explore the RICO proximate causation requirement” in some cases. Anderson, 396 F.3d at 270. The six Steamfitters factors are: (1) the causal connection between the defendant's acts and the plaintiff's harm; (2) whether the defendant specifically intended to harm the plaintiff; (3) the nature of the plaintiff's injury; (4) the directness or indirectness of the plaintiff's injury; (5) whether damages are speculative; and (6) judicial manageability. Because Plaintiffs' alleged injuries here would have flowed directly from violations of the FLSA, there is no need for the Court to conduct such an extended

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analysis. But even if the Court undertook this broader inquiry, each of the Steamfitters factors further negates RICO standing.
Causal Connection: As shown, there is no direct connection between the alleged RICO predicates and Plaintiff's claimed wage injuries. Plaintiff's essentially concede that they can only plead “but for” causation, SAC „ 121, which does not suffice as a matter of law. The RICO predicates must be the direct and proximate cause of Plaintiffs' harm. Here, the proximate cause of the claimed injury is the alleged failure to pay FLSA-mandated wages and overtime. Such injury, which arises directly from violations of the FLSA, cannot support RICO claims. Livingston, 98 F. Supp. 2d at 600.
Specific Intent: Wal-Mart's alleged intent was to lower its costs for floor-cleaning services to maximize profits. See, e.g., SAC „„ 29, 52, 106; Zavala, 393 F. Supp. 2d at 302. Because no specific criminal intent to harm these individual Plaintiff's is (or can be) alleged, this factor again cuts against standing. See Anderson, 396 F.3d at 270 (no RICO standing where there was no showing that defendants specifically intended to harm plaintiffs).
Nature of the Injury: The alleged injury in this case -- denial of overtime and, in some instances, minimum wage -- is the subject of the FLSA, a comprehensive statutory scheme. RICO is not intended to redress such injuries, as demonstrated by the fact that Congress chose not to make a violation of the FLSA a RICO predicate offense. Livingston, 98 F. Supp. 2d at 600; Commercial Cleaning, 271 F.3d at 383. Rather, RICO is concerned with ensuring that legitimate businesses are not infiltrated and controlled by organized crime. See Mehling v. New York Life Ins. Co., No. 99-5417, 2005 WL 1655882, at *5-*6 (E.D. Pa. July 13, 2005). Plaintiff's do not -and cannot -- allege that Wal-Mart has been overtaken by organized criminal elements, or that Wal-Mart infiltrated and took over the outside contractors, for the purpose of engaging in racketeering. This factor also weighs against standing. Id.
Directness of the Injury: “[A]nother important consideration in the directness inquiry is the extent to which there are other means available to vindicate RICO's interest in deterring unlawful conduct.” Id. at *7. The FLSA provides comprehensive mechanisms for redressing wage-and-hour claims, including the Department of Labor's enforcement mechanisms and private litigation. Moreover, allowing undocumented workers who benefited from and were complicit in the alleged RICO violations to sue under RICO for overtime and minimum wage claims would defeat the public policies underlying RICO and the Immigration Reform and Control Act. Cf. Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 151-52 (2002) (remedy was not available to undocumented workers because it would have trivialized IRCA). This factor again cuts heavily against standing. See Mehling, 2005 WL 1655882, at *7 (holding that standing was absent where another statutory scheme, ERISA, provided a superior method for redressing the alleged RICO harm); Callahan, 182 F.3d at 267 (availability of other forms of deterrence cuts against proximate cause); Bona v. Barasch, No. 01-2289, 2003 WL 1395932, at *29 (S.D.N.Y. Mar. 20, 2003) (alleged RICO injuries were indirect because ERISA claims were available).

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Speculative Damages: While Plaintiffs' overtime claims may not be difficult to quantify, monetarily, they are nonetheless speculative for proximate cause purposes. It would be extremely difficult -- if not impossible -- for a trier-of-fact to determine what portion of Plaintiffs' alleged wage claims, if any, is attributable to Wal-Mart's conduct (in contracting with outside companies for the floor-cleaning services) as opposed to Plaintiffs' own conduct (since they voluntarily chose to stay in the United States to work on the crews illegally) and the conduct of the third-party contractors who actually employed and paid Plaintiff's (since the contractors were in a position to provide lawful wages notwithstanding Plaintiffs' illegal status). See Anderson, 396 F.3d at 271 (“the damages claim is not speculative insofar as plaintiff's claim lost wages, but it would be difficult to determine to what extent plaintiffs' job loss was due to the alleged RICO acts and to what extent it was due to intervening factors”); Mehling, 2005 WL 1655882, at *7 (holding that proximate cause was lacking because at least some of the plaintiffs losses were attributable to factors other than the defendant's conduct).
Judicial Manageability: This final factor addresses issues like the difficulty of apportioning damages and the risk of duplicative or inconsistent litigation. Anderson, 396 F.3d at 271. As shown, allocating RICO damages would be extremely difficult because, among other reasons, Plaintiff's are complicit in the alleged predicate acts. There is also the risk of duplicative or inconsistent litigation, given that the parties most directly responsible for any alleged wage violations (i.e., the outside contractors who employed and paid Plaintiffs) are not present in this case.
Because all of these factors weigh against proximate causation, the extended Steamfitters analysis further confirms that Plaintiff's lack RICO standing.
C. Plaintiff's Have Not Alleged A Viable RICO Enterprise.
Plaintiff's have not attempted to fix their defective enterprise allegations in refiling the RICO claims. RICO makes it unlawful “for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering or collection of unlawful debt.” 18 U.S.C. § 1962(c).
1. Plaintiff's Have Not Alleged A Distinct Enterprise.
As the only defendant in this case, Wal-Mart is necessarily the “person” that ran the alleged enterprise. See Baker v. IBP, Inc., 357 F.3d 685, 691 (7th Cir. 2004) (“The ‘person’ must be IBP, the only defendant.”), cert. denied, 125 S. Ct. 412 (2004). However, Plaintiff's also allege that the “enterprise” is Wal-Mart and the contractors who acted as “agents of Wal-Mart.” SAC „ 41. Each contractor allegedly conspired with Wal-Mart to secure and exploit illegal immigrant labor and, in doing so, “act[ed] within the scope of its agency.” Id.
These allegations are virtually identical to those in the Amended Complaint. Compare SAC „ 41, with RAC „„ 31 (d), 36. They again fail to state a viable RICO enterprise because Wal-Mart cannot operate itself as an unlawful enterprise. Section 1962(c)
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requires that the “person” and the “enterprise” be distinct. See Jaguar Cars, Inc. v. Royal Oaks Motor Car Co., 46 F.3d 258, 263 (3d Cir. 1995); Baker, 357 F.3d at 691-92; Feinberg v. Katz, No. 99-0045 et al., 2005 WL 2990633, at *7 (S.D.N.Y. Nov. 7, 2005). RICO's distinctiveness requirement “may not be circumvented ‘by alleging a RICO enterprise that consists merely of a corporate defendant associated with its own employees or agents carrying on the regular affairs of the defendant ....’ ” Feinberg, 2005 WL 2990633, at *7 (citation omitted).
In Baker, the Seventh Circuit dismissed substantively similar RICO claims for failure to plead a viable enterprise. The plaintiff's alleged that the defendant used agents to recruit illegal aliens for employment. Baker, 357 F.3d at 691-92. The court observed that an enterprise consisting of the defendant/person and its agents/employees could not sustain a Section 1962(c) claim. Id. “Without a difference between the defendant and the ‘enterprise’ there can be no violation of RICO.” Id. at 692. The Second Amended Complaint suffers from this same defect. In alleging the RICO enterprise here, Plaintiff's claim that Wal-Mart assembled a network of agents to find and employ undocumented workers. This is equivalent to saying that Wal-Mart operated itself as an unlawful enterprise, which is “a theory that won't fly.” Id. at 691; see also Feinberg, 2005 WL 2990633, at *7 (observing that corporation and corporate agents acting within the scope of their authority do not form a viable RICO enterprise).
2. Plaintiff's Have Not Alleged A Common Purpose.
To plead an “association-in-fact” enterprise under Section 1962(c), Plaintiff's must show that the various constituents had a “common purpose.” United States v. Turkette, 452 U.S. 576, 583 (1981); Baker, 357 F.3d at 691. Should Plaintiff's attempt to argue that the contractors acted as independent members of the enterprise, and not as Wal-Mart's agents, Plaintiff's cannot show the “essential ingredient” of a common purpose. Baker, 357 F.3d at 691.
As Plaintiff's themselves allege, Wal-Mart and its independent contractors had conflicting goals: Wal-Mart wanted to incur the lowest possible cost for floor-cleaning services, while the contractors wanted to maximize their profits by charging WalMart the highest possible rate for such services. The Second Amended Complaint, and its attachments, are rife with allegations that Wal-Mart and its contractors had competing economic and other interests. See, e.g., SAC „„ 29, 52, 106, Ex. A at 42-43, Ex. E at 63 (describing price and other pressures Wal-Mart placed on contractors). Indeed, Plaintiffs' “star” informant, contractor Christopher Walters, openly complained about Wal-Mart's alleged demands for lower cost services and other concessions. See id. Ex. A at 43. Faced with similar facts, the Seventh Circuit in Baker held that the such “divergent goals” barred plaintiff's from pleading a viable enterprise. 357 F.3d at 691-92 (no enterprise because defendant wanted to pay illegal workers less and recruiters wanted to charge defendant more); see also Banco Del Atlantico, S.A. v. Stauder, No. 03-1342, 2005 WL 1925830, at *9 (S.D. Ind. Aug. 11, 2005) (enterprise deficient because defendants' economic interests were not aligned). This Court should do the same.

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2006 WL 381605 (D.N.J.) (Cite as: 2006 WL 381605)

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Finally, any attempt by Plaintiff's to assert that the alleged enterprise had a “common purpose” of making money should be likewise rejected. See Tr. at 102:12-20 (responding to Court's enterprise inquiry by arguing that the “common purpose” is to save money). Broad, generalized claims of a “common purpose” are insufficient to support a viable RICO enterprise claim. See Starfish Inv. Corp v. Hansen, 370 F. Supp. 2d 759, 771 (N.D. Ill. 2005) (rejecting general allegation that the enterprise existed to make money and acquire property for all participants and holding that no enterprise existed where each alleged member was out to promote its own economic agenda).
D. Plaintiff's Have Not Adequately Alleged That Wal-Mart Controlled The RICO Enterprise's Affairs.
Even assuming arguendo that Plaintiff's could state a viable enterprise, they cannot show that Wal-Mart controlled the enterprise's activities. RICO liability does not extend to every entity that associates with an enterprise, but is limited to defendants who participate in the “operation or management” of the enterprise. Reves v. Ernst & Young, 507 U.S. 170, 185 (1993). The “operation or management” standard requires that each defendant must have a role in directing the enterprise's affairs. Id. at 179. “Under this test, not even action involving some degree of decisionmaking constitutes participation in the affairs of an enterprise.” University of Md. at Baltimore v. Peat, Marwick, Main & Co., 996 F.2d 1534, 1538-39 (3d Cir. 1993). To be held liable under § 1962(c), a defendant must actually direct the racketeering activity. Id. at 1539.
Plaintiff's fail to describe how Wal-Mart directed the alleged enterprise's unlawful conduct. Instead, they merely parrot the statutory language in § 1962(c): “[a]t all relevant times, each of the conspirators associated with this enterprise conducted or participated, directly or indirectly, in the conduct of the enterprise's affairs through a ‘pattern of racketeering activity’ within the meaning of RICO, 18 U.S.C. § 1961(5), in violation of § 1962(c).” SAC „ 127. This Court has already cautioned Plaintiff's that it will not accept such “unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of actual allegations.” Zavala, 393 F. Supp. 2d at 302.
Apart from parroting § 1962(c), the Second Amended Complaint only refers to a few alleged communications between Wal-Mart and its contractors. SAC „„ 29, 43, 47-48, 52, 61-63, 106. These alleged communications, even if true, do not run afoul of RICO. Demanding price concessions from contractors or requesting replacement floorcleaning crews are not RICO violations; nor do such communications reflect sufficient control over the “operation or management” of the enterprise to justify RICO liability. And the single alleged suggestion by one former Wal-Mart corporate employee, nearly ten years ago, that a contractor should form different corporations does not establish “management or control” of that contractor, let alone an enterprise comprised of “hundreds” of outside contractors. Read in proper context, the alleged statement at most indicates an attempt to evade Wal-Mart's policies by enabling the contractor -- who was fired by one Wal-Mart store manager for using undocumented workers -- to regain employment at other Wal-Mart stores through the use

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of different corporate names.
At bottom, all that Plaintiff's can allege is that, by outsourcing some of its floor-cleaning requirements, Wal-Mart created an opportunity for some contractors to hire illegal workers and then benefited from that activity by obtaining lower cost floor-cleaning services. Condoning and benefiting from the employment of undocumented workers does not constitute “operation and management” of the alleged enterprise's affairs. Cf. Zavala, 393 F. Supp. 2d at 316-17 (holding that mere association with contractors, and knowledge of Plaintiffs' undocumented status, was not enough to state RICO enterprise or conspiracy claims). Because the Second Amended Complaint contains no allegations linking Wal-Mart to the alleged acts of racketeering, much less showing that Wal-Mart directed those acts, Plaintiff's have again failed to state a RICO enterprise claim. See Gilmore v. Berg, 820 F. Supp. 179, 183 (D.N.J. 1993) (dismissing RICO enterprise claim on “operation or management” grounds where plaintiff alleged no facts showing that defendant directed the claimed racketeering activity).
III. PLAINTIFFS' RICO CONSPIRACY CLAIM SHOULD BE DISMISSED WITH PREJUDICE.
A. Plaintiff's Have Not Alleged A Viable RICO Conspiracy.
Plaintiff's allege that Wal-Mart conspired with unnamed contractors to violate RICO in derogation of 18 U.S.C. § 1962(d). Because Plaintiff's have failed to plead a viable RICO enterprise claim under Section 1962(c), their RICO conspiracy claim should be dismissed. See Lum, 361 F.3d at 227 n.5 (affirming dismissal of Section 1962(d) conspiracy claim where plaintiff failed to plead a Section 1962(c) enterprise claim). “Any claim under section 1962(d) based on a conspiracy to violate the other subsections of section 1962 necessarily must fail if the substantive claims are themselves deficient.” Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1191 (3d Cir. 1993). It would be incongruous to hold that Wal-Mart violated RICO by conspiring to commit acts that, as shown, do not constitute predicate acts of racketeering.
In addition, the Second Amended Complaint does not describe the alleged conspiracy with sufficient clarity. Specificity and detail are required to plead conspiracy in the Third Circuit. Shearin, 885 F.2d at 1166-67; A-Valey Eng'rs, Inc. v. Board of Chosen Freeholders of County of Camden, 106 F. Supp. 2d 711, 718 (D.N.J. 2000). Most fundamentally, Plaintiffs neglect to plead facts showing that Wal-Mart and its contractors reached an agreement to commit the alleged predicate acts of racketeering. Zavala, 393 F. Supp. 2d at 317. Viewed in the light most favorable to Plaintiff's, the Second Amended Complaint merely alleges that the contractors committed wrongful acts and that Wal-Mart knew of and benefited from those acts. Id. This is insufficient to state a RICO conspiracy claim. Id. (dismissing RICO conspiracy claim for failure to plead an agreement to commit the alleged predicate acts). Nor does Plaintiffs' conclusory repetition of the word “conspiracy,” coupled with their regurgitation of the statutory language in Section 1962(d), satisfy this Circuit's specific conspiracy pleading requirements.
B. Plaintiff's Lack Standing To Pursue A RICO Conspiracy Claim Against Wal-Mart.

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To establish standing to bring a RICO conspiracy claim under Section 1962(d), Plaintiffs must demonstrate that their injuries flowed directly and substantially from the predicate acts giving rise to their RICO enterprise claim. See Smith v. Berg, 247 F.3d 532, 539 (3d Cir. 2001) (to pursue a RICO conspiracy claim, plaintiff must allege injury “aris[ing] out of wrongful conduct proscribed by the substantive provisions of section 1962 (i.e., in the context of a section 1962(c) violation, the injury must arise out of the predicate acts).”). Because Plaintiffs' injuries -- the alleged deprivation of overtime and, in a few instances, minimum wage -- flow from violations of the FLSA, and not from any of the predicate acts of racketeering recited in the Second Amended Complaint, Plaintiff's lack standing to maintain a RICO conspiracy claim against Wal-Mart. As the Supreme Court held in Beck, “[a] person may not bring suit under § 1964(c) predicated on a violation of § 1962(d) for injuries caused by an overt act that is not an act of racketeering or otherwise unlawful under the statute.” 529 U.S. at 507.
CONCLUSION
Plaintiff's have again failed to plead a single viable predicate act of racketeering against Wal-Mart. Their predicate act allegations suffer from the same flaws this Court identified in its prior opinion. In most instances, the refiled allegations are verbatim or substantively the same claims that this Court already dismissed. It is inexcusable that Plaintiff's would put the Court and Wal-Mart through the effort and expense of addressing the same deficient allegations twice. It is also clear that these flaws cannot be cured through further repleading. And even if Plaintiffs could state a viable predicate offense, their amended RICO claims are still fatally flawed because Plaintiff's lack standing to pursue them, cannot plead a cognizable RICO enterprise, and have not alleged that Wal-Mart exerted sufficient control over the so-called enterprise's affairs. These too are deficiencies that cannot be cured through repleading. Under these circumstances, allowing Plaintiff's to amend their RICO allegations again would be a futile exercise. Accordingly, Wal-Mart respectfully requests that the Court dismiss with prejudice Counts One and Two of Plaintiffs' Second Amended Complaint. See Anderson, 396 F.3d at 271-72 (Third Circuit affirmed dismissal of RICO claims with prejudice where further amendment would be futile); In re Burlington, 114 F.3d at 1435 (affirming dismissal with prejudice on futility grounds).
Victor ZAVALA, Eunice Gomez, Antonio Flores, Octavio Denisio, Hipolito Palacios, Carlos Alberto Tello, Maximiliano Mendez, Arturo Zavala, Felipe Condado, Luis Gutierrez, Daniel Antonio Cruz, Petr Zednek, Teresa Jaros, Jiri Pfauser, Hana Pfauserova, Pavel Kunc and Martin Macak, on behalf of themselves and all others similarly situated, Plaintiffs, v. WAL-MART STORES, INC., Defendant. 2006 WL 381605 (D.N.J.)
END OF DOCUMENT

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 Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 1 of 30
CLOSED,RULE16,SCHEDO
U.S. District Court District of New Jersey [LIVE] (Newark) CIVIL DOCKET FOR CASE #: 2:03−cv−05309−GEB−MCA

ZAVALA, et al v. WAL−MART CORPORATION, et al Assigned to: Judge Garrett E. Brown, Jr Referred to: Magistrate Judge Madeline C. Arleo Demand: $0 Cause: 18:1964 Racketeering (RICO) Act
Movant

Date Filed: 11/10/2003 Date Terminated: 04/21/2011 Jury Demand: Plaintiff Nature of Suit: 470 Racketeer/Corrupt Organization Jurisdiction: Federal Question

JOSE LUIS BONILLA

represented by JAMES L. LINSEY LINSEY LAW FIRM, PLLC 11 Broadway, Suite 615 NEW YORK, NY 10004 212 480−8807 Fax: 212 480−8560 Email: james@llfny.com ATTORNEY TO BE NOTICED

Plaintiff VICTOR ZAVALA

represented by GILBERTO M GARCIA GARCIA AND KRICKO WEST WING, SUITE 350 21 MAIN STREET HACKENSACK, NJ 07601 201−525−0053 Email: krickogarcia@aol.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

MICHAELENE LOUGHLIN LOUGHLIN &LATIMER 131 MAIN STREET SUITE 235 HACKENSACK, NJ 07601 (201) 487−9797 ATTORNEY TO BE NOTICED

Plaintiff ARTURO ZAVALA

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff EUNICE GOMEZ

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 2 of 30

ATTORNEY TO BE NOTICED

JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff MAXIMILIANO MENDEZ

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff CARLOS ALBERTO TELLO

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff ANTONIO FLORES

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
HIPOLITO PALACIOS TERMINATED: 04/13/2011

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
OCTAVIO DENISIO on behalf of themselves and all others similarly situated

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 3 of 30

Plaintiff MARTIN MACAK
Plaintiff PAVEL KUNC
Plaintiff HANA PFAUSEROVA
Plaintiff JIRI PFAUSER
Plaintiff TERESA JAROS
Plaintiff PETR ZEDNEK

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) TERMINATED: 11/05/2010 LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) TERMINATED: 11/05/2010 LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 4 of 30

Plaintiff DANIEL ANTONIO CRUZ
Plaintiff LUIS GUTIERREZ
Plaintiff FILIPE CONDADO
Plaintiff ROLANDO ROMERO TERMINATED: 10/28/2004
Plaintiff ADIEL ROMERO RUIZ TERMINATED: 10/28/2004

represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by GILBERTO M GARCIA (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
JAMES L. LINSEY (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

V. Defendant WAL−MART CORPORATION

represented by ROBERT H. BERNSTEIN GREENBERG TRAURIG LLP 200 PARK AVENUE P.O. BOX 677 FLORHAM PARK, NJ 07932

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 5 of 30
973 360−7946 Fax: 973 301−8410 Email: bernsteinrob@gtlaw.com TERMINATED: 09/04/2007 LEAD ATTORNEY ATTORNEY TO BE NOTICED
THOMAS H. GOLDEN WILLKIE FARR &GALLAGHER LLP 787 SEVENTH AVENUE NEW YORK, NY 10019−6099 (212) 728−8000 Fax: (212) 728−8111 Email: mao@willkie.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Defendant
FACILITY SOLUTIONS INCORPORATED TERMINATED: 02/02/2004
Defendant
FACILITY SOLUTIONS INTERNATIONAL TERMINATED: 02/02/2004
Defendant
MITCHELL INDUSTRIES, LLC TERMINATED: 02/02/2004
Defendant
RUTH AND SONS, LLC TERMINATED: 02/02/2004
Defendant
JWM COMMERCIAL CLEANING TERMINATED: 02/02/2004
Defendant
RT CLEANING TERMINATED: 02/02/2004
Defendant
KENNETH CLANCY TERMINATED: 02/02/2004
Defendant
GIOVANNI ALABENA TERMINATED: 02/02/2004
Defendant
FELIPE SOTO TERMINATED: 02/02/2004
Defendant
RAUL TIJERINO TERMINATED: 02/02/2004

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 6 of 30

Defendant DOES 1−500 TERMINATED: 02/02/2004
Defendant WAL−MART STORES, INC.

represented by THOMAS H. GOLDEN (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 11/10/2003 11/12/2003 11/24/2003 01/20/2004 01/23/2004 02/02/2004
02/09/2004 02/19/2004 02/23/2004 02/23/2004 02/26/2004
03/04/2004

# Docket Text
1 COMPLAINT filed; jury demand FILING FEE $ 150.00 RECEIPT # 319640 (MD) Additional attachment(s) added on 6/19/2006 (tll, ). (Entered: 11/12/2003)
2 NOTICE of Allocation and Assignment filed. ( Newark − Judge Greenaway − Magistrate Judge Haneke) (NM) (MD) Additional attachment(s) added on 6/19/2006 (tll, ). (Entered: 11/12/2003)
3 WAIVER OF SERVICE RETURNED EXECUTED as to WAL−MART CORPORATION 11/17/03 Answer deadline projected for 1/16/04 for WAL−MART CORPORATION (ak) Additional attachment(s) added on 6/19/2006 (tll, ). (Entered: 12/01/2003)
4 CONSENT ORDER extending time for dft WAL−MART STORES, INC. to answer to 2/13/04. Signed by Judge Joseph A. Greenaway, Jr. on 1/16/04. (ak, ) (Entered: 01/23/2004)
Update Answer Due Deadline as to WAL−MART CORPORATION to answer by 2/13/04. (ak, ) (Entered: 01/23/2004)
6 FIRST AMENDED CLASS ACTION COMPLAINT w/Jury Demand against dft WAL−MART CORPORATION , filed by plts MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA w/certsvc.(ak, ) Modified on 2/23/2004 (ak, ). (Entered: 02/23/2004)
5 ORDER for Scheduling Conference set for 3/22/2004 at 02:00 PM before Magistrate Judge G. Donald Haneke. Signed by Judge G. Donald Haneke on 2/9/04. (nc, ) (Entered: 02/09/2004)
7 NOTICE and filing of Consents purusant to 29 USC 216(b) (ak, ) (Entered: 02/24/2004)
8 CONSENT ORDER extending time to answer the first amended complaint to 3/19/04. Signed by Judge Joseph A. Greenaway, Jr. on 2/19/04. (ak, ) (Entered: 02/27/2004)
Update Answer Due Deadline as to WAL−MART CORPORATION to answer first amended complaint due 3/19/04. (ak, ) (Entered: 02/27/2004)
9 NOTICE and Filing of Consents Pursuant to 29 USC 216(b) by plt FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK w/certsvc. (ak, ) (Entered: 03/03/2004)
10 NOTICE and Filing of Consents Pursuant to 29 USC 216 by plts FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 7 of 30

03/10/2004 03/10/2004 03/11/2004
03/11/2004 03/17/2004 03/19/2004 03/25/2004
04/02/2004
04/08/2004 04/14/2004 04/14/2004 04/14/2004 04/15/2004 04/30/2004 05/17/2004

KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK (ak, ) (Entered: 03/10/2004)
11 ORDER permitting Randy J. Branitsky to appear pro hac vice. Signed by Judge G. Donald Haneke on 3/9/04. (ak, ) (Entered: 03/12/2004)
12 CONSENT ORDER permitting David P. Murray to appear pro hac vice . Signed by Judge G. Donald Haneke on 3/9/04. (ak, ) (Entered: 03/12/2004)
13 Notice of MOTION for entry of an Order for facilitated notice pursuant to 29 USC and immediate limited discovery by plts FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (Attachments: # 1 Decl of Antonio Flores, etc.# 2 Decls of Antonio Flores, etc.# 3 Part 2 Decl of Antonio Flores, etc# 4 Decl of James L. Linsey, Exhibits A−O in Clerk's Office# 5 Memorandum of Law# 6 p/o)(ak, ) (Entered: 03/19/2004)
Set Deadlines as to 13 MOTION. Motion Hearing set for 4/12/2004 10:00 AM before Judge Joseph A. Greenaway, Jr.. (ak, ) (Entered: 03/19/2004)
14 NOTICE and Filing of Consents Pursuant to 29 USC 216(b) (ak, ) (Entered: 03/22/2004)
15 Notice of Intent to submit a motion to dismiss first amended class action complaint by dft WAL−MART CORPORATION (ak, ) (Entered: 03/25/2004)
16 Letter/response from James L. Linsey, and Gillberto Garcia in response to 3/19/04 correspondence of co−counsel for Wal−Mart stores requesting an indefinite deferral of this Court's consideration of pltf's motion, etc.. w/cert of service (jd, ) (Entered: 03/26/2004)
17 NOTICE of filing of consents pursuant to 29USCS216(b) by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK (bl, ) (Entered: 04/05/2004)
18 CONSENT ORDER extending pltfs. time to respond to motion to dismiss the first amended complt. to May 3, 2004 . Signed by Judge Joseph A. Greenaway, Jr. on 04/07/04. (nr, ) (Entered: 04/08/2004)
19 CONSENT ORDER granting Thomas N. Ciantra admission pro hac vice. Signed by Judge G. Donald Haneke on 4/14/04. (sr, ) (Entered: 04/15/2004)
20 CONSENT ORDER granting Oriana Vigliotti admission pro hac vice. Signed by Judge G. Donald Haneke on 4/14/04. (sr, ) (Entered: 04/15/2004)
21 Minute Entry for proceedings held before Judge Joseph A. Greenaway, Jr. : Telephone Conference held on 4/14/2004. (ps, ) (Entered: 04/15/2004)
22 NOTICE that Della Bahan, Puja Batra and the law firm of Bahan &Associates withdraw as co−counsel on behalf of pltfs; etc. (jd, ) (Entered: 04/19/2004)
23 NOTICE and Filing of consent purs. to 29 U.S.C. 216(b) on behalf of pltfs (jd, ) (Entered: 05/03/2004)
24 BRIEF in Opposition re 13 MOTION filed by WAL−MART CORPORATION. (Attachments: # 1 decl. of Douglas Campbell# 2 decl. of Chuck Richards# 3 decl. of Clinton Miller# 4 decl. of Tim Wamsley# 5 decl. of Jared Bowen# 6 decl. of Michael Hardy# 7 decl. of Chris Rutter# 8 decl. of Randy Branitsky# 9 decl. of Randy Branitsky Part 2# 10 decl. of Randy Branitsky Part 3# 11 decl. of Randy Branitsky Part 4)(DD, ) Additional attachment(s) added on 5/19/2004 (dc, ). (Entered: 05/17/2004)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 8 of 30

05/17/2004 06/01/2004
06/01/2004 06/14/2004
07/20/2004 07/30/2004 08/03/2004 08/09/2004
09/07/2004 10/01/2004 10/01/2004
10/08/2004 10/13/2004 10/20/2004 10/26/2004

25 Letter re filing of Declarations by Chris Rutter and Michael Hardy from Robert H. Bernstein. (dc, ) (Entered: 05/19/2004)
26 MOTION to Dismiss the amended complt. by WAL−MART CORPORATION. Responses due by 6/14/2004 (Attachments: # 1 Brief in support of motion# 2 continuation of brief# 3 continuation of brief# 4 Pltf's memorandum of law# 5 continuation of brief# 6 Reply memorandum of law# 7 P/O)(nr, ) (Entered: 06/03/2004)
Set Deadlines as to 26 MOTION to Dismiss. Motion Hearing set for 6/28/2004 10:00 AM before Judge Joseph A. Greenaway, Jr.. (nr, ) (PLEASE BE ADVISED THAT THIS MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISE NOTIFIED BY THE COURT) (Entered: 06/03/2004)
27 NOTICE AND CONSENT of filing by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK (Attachments: # 1 MEMORANDUM OF LAW)(nr, ) (Entered: 06/16/2004)
39 Letter from Arturo Saruknan. (jd, ) (Entered: 11/29/2004)
28 NOTICE and Filing of Consents to become party plaintiffs by ROLANDO ROMERO, ADIEL ROMERO RUIZ (MD, ) (Entered: 08/02/2004)
29 DECLARATION in further support of Motion for Facilitated Notice by James L. Linsey (MD, ) (Entered: 08/04/2004)
30 Second Supplemental DECLARATION of James L. Linsey on behalf of FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (Attachments: # 1 letter from James L. Linsey)(MD, ) (Entered: 08/11/2004)
31 NOTICE and filing of consents pursuant to 29U.S.C. 216 b to become party pltfs. (nr, ) (Entered: 09/10/2004)
32 RESPONSE to Motion re 26 MOTION to Dismiss filed by VICTOR ZAVALA. (Attachments: # 1 Brief Amicus Curiae Brief of the Czech Republic# 2 Text of Proposed Order proposed Order)(LOUGHLIN, MICHAELENE) (Entered: 10/01/2004)
CLERKS OFFICE QUALITY CONTROL MESSAGE − The Response to Motion document number32 filed by M. Loughlin on 10/1/04 was submitted incorrectly as a Response to Motion. PLEASE RESUBMIT THE The Reponse to Motion BY 1/12/04 USING Misc/Amicus Curiae Appearance as the correct event*. This submission will remain on the docket unless otherwise ordered by the court. (Entered: 10/08/2004)
33 Amicus Curiae APPEARANCE entered by MICHAELENE LOUGHLIN on behalf of VICTOR ZAVALA. (Attachments: # 1 Brief # 2 Text of Proposed Order)(LOUGHLIN, MICHAELENE) (Entered: 10/08/2004)
34 ORDER granting Embassey's motion for leave to file an amicus Brief in connection with pltf;s motion to dismiss. Signed by Judge Joseph A. Greenaway, Jr. on 10/13/04. (nr, ) (Entered: 10/14/2004)
35 Minute Entry for proceedings held before Judge Joseph A. Greenaway, Jr. : Motion Hearing held on 10/20/2004 re 26 MOTION to Dismiss filed by WAL−MART CORPORATION. (Court Reporter Tom Brazaitis.) (ps, ) (Entered: 10/25/2004)
36 NOTICE and Filing of Consents purs to 29 U.S.C 216(b) on behalf of pltfs (jd, ) (Entered: 10/27/2004)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 9 of 30

10/28/2004
11/24/2004 12/07/2004 12/30/2004
01/19/2005 01/19/2005 01/28/2005
02/16/2005 02/18/2005 03/31/2005 04/08/2005 05/02/2005 05/16/2005 05/26/2005 06/10/2005 06/13/2005 06/22/2005 06/27/2005 07/06/2005 08/05/2005

37 REVISED AMENDED COMPLAINT against WAL−MART CORPORATION , filed by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK.(DD, ) Modified on 11/1/2004 (DD, ). (Entered: 11/01/2004)
38 Letter from Government of Mexico/Amicus Curiae. (Attachments: # 1 Inter−American Court Decision Part 1# 2 Part 2# 3 Part 3# 4 Part 4# 5 Part 5)(LINSEY, JAMES) (Entered: 11/24/2004)
40 NOTICE/REQUEST submitted by Ladislav Zahradnik and Vladimir Bartik to become party pltf in action (sr, ) (Entered: 12/08/2004)
41 ORDER granting 13 Motion for facilitated notice &limited discovery, etc., denying pltfs' request to enjoin defts from interviewing potential pltfs in absence of pltf's counsel, directing parties to appear for conference on 2/26/05 at 4:00 p.m.. Signed by Judge Joseph A. Greenaway, Jr. on 12/29/04. (sr, ) (Entered: 12/30/2004)
42 Substitution of Attorney − Attorney ROBERT H. BERNSTEIN and STEPHEN D. BIRD for WAL−MART CORPORATION added. Attorney ROBERT H. BERNSTEIN terminated.. (BIRD, STEPHEN) (Entered: 01/19/2005)
43 NOTICE/CONSENT by JOSE LUIS PAZ, BONILLA, to become a party plaintiff, in this action under 16(b) of FAIR LABOR STANDARDS ACT. [29 U.S.C. sec. 216]. (JB, ) (Entered: 01/21/2005)
44 SCHEDULING ORDER: defendant shall make an initial production of the authorized limited discovery by 2/14/2005, including all relevant contractor, and individual contract janitor information that is has been able to locate and process by that date. etc.. Signed by Judge Joseph A. Greenaway, Jr. on 1/28/05. (JB, ) (Entered: 01/31/2005)
45 Minute Entry for proceedings held before Judge Joseph A. Greenaway, Jr. : Status Conference held on 2/16/2005. (Court Reporter Tom Brazaitis.) (ps, ) (Entered: 02/17/2005)
46 NOTICE AND FILING OF CONSENT TO BECOME PARTY PLAINTIFF IN ACTION filed by James L. Linsey (dc, ) (Entered: 03/02/2005)
47 Letter in response to the consent decree of stipulation in compromise on behalf of Wal−Mart. (nr, ) (Entered: 04/01/2005)
48 NOTICE AND FILING OF CONSENTS. By Plaintiffs. (Attachments: # 1 Cover Letter)(dc, ) (Entered: 04/15/2005)
49 LETTER BRIEF by James L. Linsey for Plaintiffs.. (dc, ) (Entered: 05/05/2005)
50 Minute Entry for proceedings held before Judge Joseph A. Greenaway, Jr. : Telephone Conference held on 5/16/2005. (ps, ) (Entered: 05/16/2005)
51 CONSENT NOTICE of individual employees to become party pltf. in action (nr, ) (Entered: 05/31/2005)
52 NOTICE of filiing of consent to join in as pltfs. by Tomecka Marcel, Alena Pokorna and Gustav Pokorny (nr, ) (Entered: 06/15/2005)
53 Letter on behalf of pltf. in support of this matter (nr, ) (Entered: 06/15/2005)
54 NOTICE and filing of consents of individual employee to become party pltf. Bronislav Zita (nr, ) (Entered: 06/24/2005)
55 NOTICE and filing of consent by pltf class (nr, ) (Entered: 06/29/2005)
56 NOTICE and filing of consents by pltf. class (dc, ) (Entered: 07/15/2005)
57 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 10 of 30

08/25/2005
08/29/2005 09/07/2005
09/08/2005
09/19/2005
09/22/2005
09/30/2005 10/11/2005 10/18/2005
10/18/2005

CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO NOTICE and Filing of Consent purs. to 29 U.S.C. 216(b) on behalf of pltfs (LINSEY, JAMES) (Entered: 08/05/2005)
58 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 08/25/2005)
Judge Madeline C. Arleo added. (nc, ) (Entered: 09/20/2005)
59 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 09/07/2005)
60 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 09/08/2005)
61 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 09/19/2005)
62 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Marketa Cejkova, Ryzard Koprowski, Wladyslav Pivel, Ewa Turek and Zbigmiew Turek Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 09/22/2005)
63 ORDER granting deft's motion to dismiss as to counts 1,2, and 3; denying deft's motion to counts 4 &5; etc. . Signed by Judge Joseph A. Greenaway, Jr. on 09/30/05. (nr, ) (Entered: 09/30/2005)
64 OPINION (COPY TO NJLJ). Signed by Judge Joseph A. Greenaway, Jr. on 10/07/05. (nr, ) (Entered: 10/11/2005)
65 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice of Filing of Consents of Marisol Martinez, Miroslav Niebiesiczanski, Hernando Rua and Gyorgy Suba Pursuant To 29 U.S.C. ? 216 (b) (LINSEY, JAMES) (Entered: 10/18/2005)
66 ANSWER to Amended Complaint by WAL−MART CORPORATION.(BERNSTEIN, ROBERT) (Entered: 10/18/2005)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 11 of 30

10/19/2005 10/21/2005 11/03/2005 11/07/2005 11/10/2005 11/15/2005 11/17/2005 11/18/2005

67 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consent of Jan Bubla Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 10/19/2005)
68 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consent of Miroslav Blazek Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 10/21/2005)
69 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Jesus Casique and Angel Tolentino Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 11/03/2005)
70 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Gabriel Delgado and Francisco Urbina, Sr. Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 11/07/2005)
71 LETTER ORDER scheduling Status Conference for 1/9/2006 at 3:00 PM in Newark − Courtroom 2A before Magistrate Judge Madeline C. Arleo. STATUS LETTER MUST BE SUBMITTED PRIOR TO THE CONFERENCE.. Signed by Judge Madeline C. Arleo on 11/10/05. (jl, ) (Entered: 11/10/2005)
72 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Lorena Chaves and Carlos Chaves Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 11/15/2005)
73 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Piotr Marchukewich and Stan Trzeciak Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 11/17/2005)
74 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice of Filing of Consents of Richard E. Adams, III, Harold Davis, II, Ladislav Flekal, Vera Malichova, Josef Podloucky, Jose Torres, Marek Welser and Jaromir Zak Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 11/18/2005)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 12 of 30

11/21/2005
11/22/2005
11/30/2005
11/30/2005 11/30/2005 11/30/2005 11/30/2005 12/07/2005
12/12/2005 12/12/2005 12/13/2005

75 AMENDED COMPLAINT (Second Amended Complaint) against all defendants all defendants., filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (Attachments: # 1 Exhibit A Part 1 of 2# 2 Exhibit A Part 2 of 2# 3 Exhibit B# 4 Exhibit C# 5 Exhibit D# 6 Exhibit E Part 1 of 3# 7 Exhibit E Part 2 of 3# 8 Exhibit E Part 3 of 3# 9 Exhibit F# 10 Exhibit G# 11 Errata H# 12 Exhibit I)(LINSEY, JAMES) (Entered: 11/21/2005)
76 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Josh Flores and Jaroslaw Hodi Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 11/22/2005)
77 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Consuelo Camacho, Rene Camacho, Adrian Diaz, Jaime Garista, Leonel Garista, Diane Haynes, Vera Malichova, Matilde Lara Sanchez and Santiago A. Zavala Pursuant to 29 U.S.C. Section 216 (b) (LINSEY, JAMES) (Entered: 11/30/2005)
78 MOTION for Extension of Time to Amend to Extend Notice Period by VICTOR ZAVALA. (LINSEY, JAMES) (Entered: 11/30/2005)
79 DECLARATION of James L. Linsey re 78 MOTION for Extension of Time to Amend to Extend Notice Period by VICTOR ZAVALA. (LINSEY, JAMES) (Entered: 11/30/2005)
80 Proposed Pretrial Order by VICTOR ZAVALA. (LINSEY, JAMES) (Entered: 11/30/2005)
Set/Reset Deadlines as to 78 MOTION for Extension of Time to Amend to Extend Notice Period. Motion Hearing set for 12/27/2005 before Judge Joseph A. Greenaway, Jr.. (PLEASE BE ADVISED THAT THIS MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISE NOTIFIED BY THE COURT). (dh, ) (Entered: 12/05/2005)
81 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Diana Carrillo and Patrick O'Hora Pursuant to 29 U.S.C. Section 216 (b) (LINSEY, JAMES) (Entered: 12/07/2005)
82 Letter from James L. Linsey to Honorable Judge Joseph A. Greenaway, Jr. re January 9 Scheduling Conference. (LINSEY, JAMES) (Entered: 12/12/2005)
85 Letter from James L. Linsey in opposition to adjourment of scheduling order (nr, ) (Entered: 12/16/2005)
83 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consents of Helena

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 13 of 30

12/14/2005
12/23/2005
12/30/2005
01/03/2006 01/03/2006 01/04/2006 01/09/2006 01/11/2006 01/13/2006 01/17/2006 01/18/2006
01/18/2006

Golaszewska and Kazimierz Golaszewski Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 12/13/2005)
84 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consent of Steve Valentine Pursuant to Section 216(b) (LINSEY, JAMES) (Entered: 12/14/2005)
86 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consent of Lubos Vanek Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 12/23/2005)
87 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consent of David Garcia Pursuant to 29 U.S.C. Section 216 (b) (LINSEY, JAMES) (Entered: 12/30/2005)
88 Letter from James L. Linsey. (LINSEY, JAMES) (Entered: 01/03/2006)
89 Letter Brief from James L. Linsey on behalf of pltf. (nr, ) (Entered: 01/04/2006)
90 BRIEF in Opposition re 78 MOTION for Extension of Time to Amend to Extend Notice Period filed by WAL−MART CORPORATION. (Attachments: # 1 Declaration of Robert H. Bernstein)(BERNSTEIN, ROBERT) (Entered: 01/04/2006)
Minute Entry for proceedings held before Judge Madeline C. Arleo : Status Conference held on 1/9/2006. (jl, ) (Entered: 01/11/2006)
91 Letter from James L. Linsey. (Attachments: # 1 Text of Proposed Order)(LINSEY, JAMES) (Entered: 01/11/2006)
92 LETTER ORDER advising that oral argument is scheduled Hearing set for 3/22/2006 02:00 PM before Magistrate Judge Madeline C. Arleo.. Signed by Judge Madeline C. Arleo on 01/13/06. (nr, ) (Entered: 01/17/2006)
93 TRANSCRIPT of Proceedings held on January 9, 2006 before Judge Arleo. PLEASE NOTE: The complete transcript of these proceedings is maintained in paper format on file in the Clerks Office. To request copies of this transcript, contact the Official Court Reporter or Transcription Service who prepared the transcript. (ji, ) (Entered: 01/17/2006)
94 RESPONSE in Support re 78 MOTION for Extension of Time to Amend to Extend Notice Period filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 01/18/2006)
95 AFFIDAVIT in Support re 78 MOTION for Extension of Time to Amend to Extend Notice Period Declaration of James L. Linsey filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 01/18/2006)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 14 of 30

01/20/2006
01/20/2006
01/31/2006 02/07/2006 02/07/2006 02/21/2006 03/03/2006
03/17/2006
03/20/2006 03/20/2006 03/20/2006 03/29/2006 04/25/2006

96 MOTION to Dismiss Counts One and Two of the Second Amended Complaint by WAL−MART CORPORATION. (Attachments: # 1 Brief # 2 Brief # 3 unpublished opinion 1# 4 unpublished opinion 2# 5 unpublished opinion 3# 6 unpublished opinion 4# 7 unpublished opinion 5# 8 unpublished opinion 6# 9 unpublished opinion 7# 10 Exhibit 1a# 11 Exhibit 1b# 12 Exhibit 1c# 13 Exhibit 1d# 14 Exhibit 1e# 15 Exhibit 2a# 16 Exhibit 2b# 17 Exhibit 3a# 18 Exhibit 3b# 19 Exhibit 4# 20 Exhibit 5# 21 Text of Proposed Order)(BERNSTEIN, ROBERT) (Entered: 01/20/2006)
Set Deadlines as to 96 MOTION to Dismiss Counts One and Two of the Second Amended Complaint. Motion Hearing set for 2/27/2006 10:00 AM before Judge Joseph A. Greenaway, Jr.. (nr, ) (PLEASE BE ADVISED THAT THIS MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISE NOTIFIED BY THE COURT) (Entered: 01/26/2006)
97 ORDER on status conference regarding discovery . Signed by Judge Madeline C. Arleo on 01/30/06. (nr, ) (Entered: 02/01/2006)
98 Letter from James L. Linsey. (LINSEY, JAMES) (Entered: 02/07/2006)
Resetting Deadlines as to 96 MOTION to Dismiss Counts One and Two of the Second Amended Complaint. Motion Hearing set for 2/14/2006 10:00 AM before Judge Joseph A. Greenaway, Jr.. (mn, ) (Entered: 02/07/2006)
99 Letter from James L. Linsey on behalf of plaintiffs in response to defendant's letter of January 18, 2006. (LINSEY, JAMES) (Entered: 02/21/2006)
100 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consent of Roman Cizek Pursuant to 29 U.S.C. Section b (LINSEY, JAMES) (Entered: 03/03/2006)
101 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consent of Pavel Kobjakov Pursuant to 29 U.S.C. Section 216(b) (LINSEY, JAMES) (Entered: 03/17/2006)
102 Letter from James L. Linsey requesting to exceed page limit for brief.. (LINSEY, JAMES) (Entered: 03/20/2006)
103 BRIEF in Opposition re 96 MOTION to Dismiss Counts One and Two of the Second Amended Complaint filed by VICTOR ZAVALA. (LINSEY, JAMES) (Entered: 03/20/2006)
104 AFFIDAVIT in Opposition re 96 MOTION to Dismiss Counts One and Two of the Second Amended Complaint filed by VICTOR ZAVALA. (LINSEY, JAMES) (Entered: 03/20/2006)
105 ORDER consolidating civil nos. 03−2922, 03−3187, 05−5305, 05−5737 for purposes of adjudicating the motion for remand . Signed by Judge Mark Falk on 03/23/06. (nr, ) (Entered: 03/30/2006)
106 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, JOSE LUIS BONILLA, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO Notice and Filing of Consent of Juan M. Cantu Pursuant to 29 U.S.C. Section 216 (b) (LINSEY, JAMES) (Entered: 04/25/2006)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 15 of 30

05/02/2006 05/05/2006 06/02/2006 06/06/2006 06/06/2006 06/13/2006 07/19/2006 07/20/2006
08/17/2006 08/28/2006 08/28/2006 09/19/2006
09/19/2006
09/22/2006 09/26/2006 10/06/2006

107 Letter from Robert H. Bernstein requesting permission to file over−length reply brief. (BERNSTEIN, ROBERT) (Entered: 05/02/2006)
108 REPLY to Response to Motion re 96 MOTION to Dismiss Counts One and Two of the Second Amended Complaint filed by WAL−MART CORPORATION. (BERNSTEIN, ROBERT) (Entered: 05/05/2006)
109 Letter from James L. Linsey Requesting Oral Argument on Pending Motions and Leave to Commence Discovery on RICO Claims. (LINSEY, JAMES) (Entered: 06/02/2006)
110 AFFIDAVIT/Certification in support of discovery confidentiality order of Wal−Mart Stores, Inc. by WAL−MART CORPORATION. (Attachments: # 1 Declaration of James Linsey# 2 Text of Proposed Order)(BERNSTEIN, ROBERT) (Entered: 06/06/2006)
CHAMBERS NOTE − ORAL ARGUMENT is scheduled for JULY 19, 2006 at 10:30 a.m. before Judge Madeline Cox Arleo. (jl, ) (Entered: 06/06/2006)
111 DISCOVERY PROTECTIVE ORDER. Signed by Judge Madeline C. Arleo on 06/09/06. (nr, ) (Entered: 06/14/2006)
112 ORDER granting 78 Motion for Extension of Time to Amend . Signed by Judge Joseph A. Greenaway, Jr. on 7/18/06. (sr, ) (Entered: 07/19/2006)
113 BRIEF in Opposition re 96 MOTION to Dismiss Counts One and Two of the Second Amended Complaint filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (Attachments: # 1 Attachment a to supplemental brief# 2 attachment b to supplemental brief# 3 attachment c to supplemental brief)(LINSEY, JAMES) (Entered: 07/20/2006)
114 Letter from James L. Linsey to the Hon. Joseph A. Greenaway, Jr. (LINSEY, JAMES) (Entered: 08/17/2006)
115 OPINION fld.. Signed by Judge Joseph A. Greenaway, Jr. on 8/28/06. (sr, ) (Entered: 08/28/2006)
116 ORDER granting 96 Motion to Dismiss as to counts 1 &2 of the second amended complt.. Signed by Judge Joseph A. Greenaway, Jr. on 8/28/06. (sr, ) (Entered: 08/28/2006)
117 MOTION for Certificate of Appealability by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (Attachments: # 1 Motion for 54(b) certificate# 2 Order)(LINSEY, JAMES) (Entered: 09/19/2006)
Set Deadlines as to 117 MOTION for Certificate of Appealability. Motion Hearing set for 10/23/2006 10:00 AM before Judge Joseph A. Greenaway, Jr.. (nr, ) (PLEASE BE ADVISED THAT THIS MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISE NOTIFIED BY THE COURT) (Entered: 09/21/2006)
120 Letter regarding decertification of this matter on behalf of deft. (nr, ) (Entered: 10/11/2006)
Minute Entry for proceedings held before Judge Madeline C. Arleo : Status Conference held on 9/26/2006. (drc, ) (Entered: 09/29/2006)
118 Letter from James L. Linsey responding to Wal−Mart's letter of September 21, 2006. (LINSEY, JAMES) (Entered: 10/06/2006)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 16 of 30

10/10/2006 10/16/2006 10/17/2006
10/17/2006 10/27/2006
10/30/2006 10/31/2006 10/31/2006 11/02/2006 11/09/2006 11/15/2006 11/27/2006 11/30/2006 12/06/2006
12/06/2006

119 BRIEF in Opposition re 117 MOTION for Certificate of Appealability filed by WAL−MART CORPORATION. (Attachments: # 1 Exhibit # 2 Certificate of Service)(BERNSTEIN, ROBERT) (Entered: 10/10/2006)
121 Letter from James L. Linsey to Magistrate Judge Arleo Requesting 10 Day Extension of 10/17/06 Deadline. (LINSEY, JAMES) (Entered: 10/16/2006)
122 Letter from Robert H. Bernstein to Judge Arleo. (Attachments: # 1 Exhibit 1−3 of Letter Brief# 2 Exhibit 7, 11, 12, 13 to Letter Brief# 3 Exhibit 14 to Letter Brief# 4 Declaration of Ann M. Staron; NOTE: Exhs. 4−6 and 8−10 of the Letter Brief have been submitted to the Court under separate cover with a request for Temporary Order for Seal pursuant to L.Civ.R. 5.3)(BERNSTEIN, ROBERT) (Entered: 10/17/2006)
123 REPLY to Response to Motion re 117 MOTION for Certificate of Appealability filed by VICTOR ZAVALA. (LINSEY, JAMES) (Entered: 10/17/2006)
124 First MOTION to Compel Wal−Mart to comply with it's discovery obligations by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 10/27/2006)
125 TEMPORARY ORDER for seal . Signed by Judge Madeline C. Arleo on 10/25/2006. (nr, ) (Entered: 10/30/2006)
128 Letter from James L. Linsey to Magistrate Judge Arleo responding to Wal−Mart's Letter of October 17, 2006 re 122 Letter,. (Attachments: # 1 Exhibit A# 2 Proposed Temporary Order for Seal)(LINSEY, JAMES) (Entered: 10/31/2006)
129 Exhibit to VICTOR ZAVALA Re 124 Motion to Compel,. (Attachments: # 1 Exhibit D# 2 Exhibit E Part 1# 3 Exhibit E Part 2# 4 Exhibit E Part 3# 5 Proposed Temporary Order to Seal)(LINSEY, JAMES) (Entered: 10/31/2006)
130 TEMPORARY ORDER for seal . Signed by Judge Madeline C. Arleo on 11/01/2006. (nr, ) (Entered: 11/02/2006)
CHAMBERS NOTE − The in person status conference scheduled for NOVEMBER 9, 2006 is RESCHEDULED to DECEMBER 8, 2006 at 11:00 a.m. before Judge Madeline Cox Arleo. (jl, ) (Entered: 11/09/2006)
131 TEMPORARY ORDER to SEAL Exhibits 1 through 5 of deft. Wal−Mart Store's Letter Brief dated 11/8/2006. Signed by Judge Madeline C. Arleo on 11/08/2006. (nr, ) (Entered: 11/15/2006)
132 MOTION to Seal by WAL−MART CORPORATION. (Attachments: # 1 Declaration of Counsel in support of motion to seal# 2 Text of Proposed Order # 3 Certificate of Service)(BERNSTEIN, ROBERT) (Entered: 11/27/2006)
CHAMBERS NOTE − In response to Mr. Linsey's request of November 17th, the In person conference scheduled for DECEMBER 8, 2006 is RESCHEDULED to DECEMBER 15, 2006 at 2:00 p.m. before Judge Madeline Cox Arleo. (jl, ) (Entered: 11/30/2006)
133 MOTION to Seal from the public record confidential documents attached as Exhibit 2, Exhibit 3, Exhibit 4, and Exhibit 5 to Defendant?s November 8, 2006 Consolidated Reply to Plaintiffs? October 27, 2006 letter brief and October 31, 2006 discovery response by WAL−MART CORPORATION. (Attachments: # 1 Declaration of Counsel in support of motion to seal# 2 Text of Proposed Order # 3 Certificate of Service)(BERNSTEIN, ROBERT) (Entered: 12/06/2006)
Set Deadlines as to 133 MOTION to Seal from the public record confidential documents attached as Exhibit 2, Exhibit 3, Exhibit 4, and Exhibit 5 to Defendant?s November 8, 2006 Consolidated Reply to Plaintiffs? October 27, 2006 letter brief and October 31, 2006 discovery r. Motion Hearing set for 1/8/2007 10:00 AM before Judge Joseph A. Greenaway, Jr.. (nr, ) (PLEASE BE ADVISED THAT THIS

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 17 of 30

12/14/2006 12/18/2006 12/19/2006
12/28/2006 01/09/2007 01/11/2007 01/11/2007
01/11/2007
01/12/2007 01/12/2007 01/12/2007 01/22/2007

MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISE NOTIFIED BY THE COURT) (Entered: 12/07/2006)
CHAMBERS NOTE − The in person status conference scheduled for DECEMBER 15, 2006 is RESCHEDULED to JANUARY 12, 2006 at 2:00 p.m. before Judge Madeline Cox Arleo. (jl, ) (Entered: 12/14/2006)
134 Letter from James L. Linsey. (LINSEY, JAMES) (Entered: 12/18/2006)
135 BRIEF in Opposition re 133 MOTION to Seal from the public record confidential documents attached as Exhibit 2, Exhibit 3, Exhibit 4, and Exhibit 5 to Defendant?s November 8, 2006 Consolidated Reply to Plaintiffs? October 27, 2006 letter brief and October 31, 2006 discovery r, 132 MOTION to Seal Documents Pursuant to Local Civil Rule 5.3 filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 12/19/2006)
136 TEMPORARY ORDER sealing certain documents . Signed by Judge Madeline C. Arleo on 12/21/2006. (nr, ) (Entered: 12/28/2006)
137 REPLY to Response to Motion re 133 MOTION to Seal from the public record confidential documents attached as Exhibit 2, Exhibit 3, Exhibit 4, and Exhibit 5 to Defendant?s November 8, 2006 Consolidated Reply to Plaintiffs? October 27, 2006 letter brief and October 31, 2006 discovery r filed by WAL−MART CORPORATION. (BERNSTEIN, ROBERT) (Entered: 01/09/2007)
138 Letter from James L. Linsey, Esq. (LINSEY, JAMES) (Entered: 01/11/2007)
CLERKS OFFICE QUALITY CONTROL MESSAGE − The Reply brief submitted by R. BERNSTEIN on 1/9/2007 did not contain a proper electronic signature (s/). PLEASE RESUBMIT THE DOCUMENT WITH THE PROPER ELECTRONIC SIGNATURE BY 01/15/2007. This submission will remain on the docket unless otherwise ordered by the court. This message is for informational purposes only. (nr, ) (Entered: 01/11/2007)
139 MOTION for Leave to File Consent Out of Time by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (Attachments: # 1 Declaration of James L. Linsey)(LINSEY, JAMES) (Entered: 01/11/2007)
140 REPLY to Response to Motion re 133 MOTION to Seal from the public record confidential documents attached as Exhibit 2, Exhibit 3, Exhibit 4, and Exhibit 5 to Defendant?s November 8, 2006 Consolidated Reply to Plaintiffs? October 27, 2006 letter brief and October 31, 2006 discovery r filed by WAL−MART CORPORATION. (BERNSTEIN, ROBERT) (Entered: 01/12/2007)
Set Deadlines as to 139 MOTION for Leave to File Consent Out of Time. Motion Hearing set for 2/12/2007 10:00 AM before Judge Joseph A. Greenaway, Jr.. (nr, ) (PLEASE BE ADVISED THAT THIS MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISE NOTIFIED BY THE COURT) (Entered: 01/17/2007)
Minute Entry for proceedings held before Judge Madeline C. Arleo : Status Conference held on 1/12/2007. (drc, ) (Entered: 02/01/2007)
141 TRANSCRIPT of Proceedings held on January 12, 2007 before Judge Arleo. PLEASE NOTE: The complete transcript of these proceedings is maintained in paper format on file in the Clerks Office. To request copies of this transcript, contact the Official Court Reporter or Transcription Service who prepared the transcript. (ji, ) (Entered: 01/24/2007)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 18 of 30

01/26/2007 01/29/2007 02/02/2007 02/07/2007 02/07/2007 02/20/2007
02/21/2007 02/21/2007
02/27/2007 03/06/2007 03/16/2007 04/04/2007 04/05/2007 04/13/2007 04/16/2007 04/16/2007

142 ORDER extending temporary seals in this matter and allowing the deft. to file one consolidated motion addressing all requests for permanent seals, etc. . Signed by Judge Madeline C. Arleo on 01/19/2007. (nr, ) (Entered: 01/29/2007)
143 BRIEF in Opposition re 139 MOTION for Leave to File Consent Out of Time filed by WAL−MART CORPORATION. (Attachments: # 1 Exhibit A to Opposition# 2 Certificate of Service)(BERNSTEIN, ROBERT) (Entered: 01/29/2007)
144 Letter from James L. Linsey Requesting Extension of Time. (LINSEY, JAMES) (Entered: 02/02/2007)
145 MOTION to Seal Document by WAL−MART CORPORATION. (Attachments: # 1 # 2 # 3 # 4)(BERNSTEIN, ROBERT) (Entered: 02/07/2007)
Set Deadlines as to 145 MOTION to Seal Document. Motion Hearing set for 3/12/2007 10:00 AM before Judge Joseph A. Greenaway, Jr.. (nr, )(PLEASE BE ADVISED THAT THIS MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISEN NOTIFIED BY THE COURT) (Entered: 02/08/2007)
146 BRIEF in Opposition re 145 MOTION to Seal Document filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 02/20/2007)
147 Letter from Oriana Vigliotti re 146 Brief in Opposition to Motion,. (LINSEY, JAMES) (Entered: 02/21/2007)
148 REPLY to Response to Motion re 139 MOTION for Leave to File Consent Out of Time filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 02/21/2007)
149 REPLY to Response to Motion re 145 MOTION to Seal Document filed by WAL−MART CORPORATION. (Attachments: # 1)(BERNSTEIN, ROBERT) (Entered: 02/27/2007)
150 ORDER granting request to include additional documents with Walt's motion to seal materials filed Feb. 7, 2007. Signed by Judge Madeline C. Arleo on 02/27/2007. (nr, ) (Entered: 03/08/2007)
151 Letter from James L. Linsey, Esq. (LINSEY, JAMES) Modified on 3/16/2007 (nr, ). Modified on 3/19/2007 (nr, ). (Entered: 03/16/2007)
152 Letter from James L. Linsey re 116 Order on Motion to Dismiss. (LINSEY, JAMES) (Entered: 04/04/2007)
153 ORDER on informal application directing the pltfs. to produce certain pltfs. and claimants for deposition, etc.. Signed by Judge Madeline C. Arleo on 04/04/2007. (nr, ) (Entered: 04/05/2007)
156 ORDER denying 117 Motion for Certificate of Appealability and denying pltfs' request to stay discovery pending appeal. Signed by Judge Joseph A. Greenaway, Jr. on 04/13/2007. (nr, ) (Entered: 04/16/2007)
154 OPINION. Signed by Judge Joseph A. Greenaway, Jr. on 04/14/2007. (nr, ) (Entered: 04/16/2007)
155 ORDER dismissing pltfs' motion to compel deft. Wal Mart to produce discover; motion already decided. Signed by Judge Madeline C. Arleo on 04/13/2007. (nr, ) (Entered: 04/16/2007)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 19 of 30

04/16/2007 05/03/2007 05/04/2007 05/15/2007 06/04/2007
06/06/2007 06/12/2007 06/15/2007
08/03/2007
08/27/2007 08/28/2007 08/30/2007 08/31/2007 09/04/2007 09/04/2007
09/05/2007 09/11/2007 09/12/2007 09/18/2007

157 Process of Maritime issued. (nr, ) (Entered: 04/16/2007)
Minute Entry for proceedings held before Judge Madeline C. Arleo : Status Conference held on 5/3/2007. (drc, ) (Entered: 05/18/2007)
158 ORDER denying pltf's motion to file a consent out of time. Signed by Judge Madeline C. Arleo on 05/04/2007. (nr, ) (Entered: 05/04/2007)
159 ORDER on informal application; Telephone Conference set for 9/6/2007 04:00 PM before Magistrate Judge Madeline C. Arleo.,Discovery due by 10/1/2007.. Signed by Judge Madeline C. Arleo on 5/14/2007. (mn, ) (Entered: 05/16/2007)
160 TRANSCRIPT of Proceedings held on May 3, 2007 before Judge Arleo. PLEASE NOTE: The complete transcript of these proceedings is maintained in paper format on file in the Clerks Office. To request copies of this transcript, contact the Official Court Reporter or Transcription Service who prepared the transcript. (ji, ) (Entered: 06/04/2007)
161 Letter from James L. Linsey and Gilberto Garcia. (LINSEY, JAMES) (Entered: 06/06/2007)
162 Letter from Defendant Wal−Mart Corporation. (BERNSTEIN, ROBERT) (Entered: 06/12/2007)
163 Letter−ORDER denying request that the Court reconsider its decision requiring the sharing of costs for translation of "core" information relating to the pltfs in this action, etc. Signed by Judge Madeline C. Arleo on 6/14/07. (jd, ) (Entered: 06/15/2007)
164 Letter from James L. Linsey (Redacted). (Attachments: # 1 Text of Proposed Order To Seal# 2 Attachment A# 3 Attachment B# 4 Attachment C# 5 Attachment D# 6 Attachment E# 7 Attachment F Part 1# 8 Attachment F Part 2# 9 Attachment G# 10 Attachment H# 11 Attachment I# 12 Attachment J# 13 Attachment K# 14 Attachment L# 15 Attachment M# 16 Attachment N)(LINSEY, JAMES) (Entered: 08/03/2007)
165 NOTICE of Appearance by THOMAS H. GOLDEN on behalf of WAL−MART CORPORATION (Attachments: # 1 Certificate of Service)(GOLDEN, THOMAS) (Entered: 08/27/2007)
166 Letter from Honorable Madeline Cox Arleo re 164 Letter,. (Attachments: # 1 Exhibit 1)(GOLDEN, THOMAS) (Entered: 08/28/2007)
167 NOTICE by WAL−MART CORPORATION of Withdrawal as Counsel for Defendant (BERNSTEIN, ROBERT) (Entered: 08/30/2007)
168 Letter from James L. Linsey. (LINSEY, JAMES) (Entered: 08/31/2007)
169 MOTION to Seal by WAL−MART CORPORATION. (Attachments: # 1 Declaration of Thomas H. Golden# 2 Declaration of Harry Eng# 3 Proposed Order# 4 Certificate of Service)(GOLDEN, THOMAS) (Entered: 09/04/2007)
Set Deadlines as to 169 MOTION to Seal. Motion Hearing set for 10/8/2007 10:00 AM before Judge Joseph A. Greenaway, Jr.. (nr, ) (PLEASE BE ADVISED THAT THIS MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISE NOTIFIED BY THE COURT) (Entered: 09/05/2007)
TEXT ORDER rescheduling the telephone conference from SEPTEMBER 6, 2007 to IN PERSON on OCTOBER 5, 2007 at 3:00 p.m. before Judge Madeline Cox Arleo.. Ordered by Judge Madeline C. Arleo on 9/5/07. (jl, ) (Entered: 09/05/2007)
170 Letter from James L. Linsey. (Attachments: # 1 Appendix I − IV Part 1# 2 Appendix I − IV Part 2# 3 Appendix I − IV Part 3# 4 Text of Proposed Order)(LINSEY, JAMES) (Entered: 09/11/2007)
171 ORDER granting in part and denying in part 145 Motion to Seal Document. Signed by Judge Madeline C. Arleo on 09/12/2007. (nr, ) (Entered: 09/12/2007)
172 Letter from Thomas H. Golden to Honorable Madeline Cox Arleo re 169 MOTION to Seal. (Attachments: # 1 Revised Proposed Order)(GOLDEN, THOMAS)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 20 of 30

10/05/2007 10/05/2007 10/17/2007 10/22/2007
10/26/2007 10/29/2007 04/23/2008 05/20/2008 06/02/2008 06/11/2008 07/15/2008
07/15/2008 07/15/2008 07/15/2008
07/17/2008

(Entered: 09/18/2007)
173 Letter from Thomas H. Golden to Honorable Madeline Cox Arleo re 172 Letter, 169 MOTION to Seal. (Attachments: # 1 Proposed Order)(GOLDEN, THOMAS) (Entered: 10/05/2007)
Minute Entry for proceedings held before Judge Madeline C. Arleo : Status Conference held on 10/5/2007. (drc, ) (Entered: 11/01/2007)
174 ORDER granting deft's 169 Motion to Seal materials. Signed by Judge Madeline C. Arleo on 10/10/2007. (nr, ) (Entered: 10/17/2007)
175 TRANSCRIPT of Proceedings held on October 5, 2007 before Judge Arleo. PLEASE NOTE: The complete transcript of these proceedings is maintained in paper format on file in the Clerks Office. To request copies of this transcript, contact the Official Court Reporter or Transcription Service who prepared the transcript. (ji, ) (Entered: 10/23/2007)
176 Letter from Thomas H. Golden to Honorable Madeline Cox Arleo. (Attachments: # 1 Attachment 1# 2 Attachment 2# 3 Attachment 3)(GOLDEN, THOMAS) (Entered: 10/26/2007)
177 Letter from James L. Linsey to The Honorable Madeline Cox Arleo. (LINSEY, JAMES) (Entered: 10/29/2007)
Settlement Conference set for 5/20/2008 at 9:30 AM in Newark − Courtroom 3 before Judge Joseph A. Greenaway, Jr. (ps, ) (Entered: 04/23/2008)
178 Minute Entry for proceedings held before Judge Joseph A. Greenaway, Jr.: Settlement Conference held on 5/20/2008. Conference to be continued on 6/9/08 at 3:00 p.m. (ps, ) (Entered: 05/22/2008)
Settlement Conference continued on 6/11/2008 at 10:30 AM in Newark − Courtroom 3 before Judge Joseph A. Greenaway, Jr. (ps, ) (Entered: 06/02/2008)
179 Minute Entry for proceedings held before Judge Joseph A. Greenaway, Jr.: Settlement Conference continued on 6/11/2008. Conference call set for 6/17/08 at 11:30 a.m. (ps, ) (Entered: 06/12/2008)
180 BRIEF Addressing Proper (1) Scope Of Conditional Collective Action And (2) Method For Calculating Plaintiffs' Alleged FLSA Wages filed by WAL−MART CORPORATION. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 16, # 9 Exhibit 19, # 10 Exhibit 20, # 11 Exhibit 21, # 12 Exhibit 22, # 13 Exhibit 23, # 14 Exhibit 25, # 15 Exhibit 26, # 16 Exhibit 27, # 17 Exhibit 29, # 18 Exhibit 31, # 19 Certificate of Service)(GOLDEN, THOMAS) (Entered: 07/15/2008)
181 DECLARATION of Ann M. Staron re 180 Brief,, by WAL−MART CORPORATION. (Attachments: # 1 Exhibit 1, # 2 Certificate of Service)(GOLDEN, THOMAS) (Entered: 07/15/2008)
182 Letter from Thomas H. Golden to Judge Greenaway requesting Temporary Order for Seal of certain Exhibits to Wal−Mart's Brief re 180 Brief,,. (Attachments: # 1 Proposed Order, # 2 Certificate of Service)(GOLDEN, THOMAS) (Entered: 07/15/2008)
183 MOTION for Judgment on Partial Findings by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (Attachments: # 1 Appendix B to Brief, # 2 Appendix C to Brief)(LINSEY, JAMES) (Entered: 07/15/2008)
CLERKS QUALITY CONTROL MESSAGE − The BRIEF DOC. 183 filed by T. GOLDEN on 07/15/2008 was submitted incorrectly as a MOTION. PLEASE RESUBMIT THE BRIEF USING RESPONSES AND REPLIES. This submission will remain on the docket unless otherwise ordered by the court. (nr, ) (Entered: 07/17/2008)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 21 of 30

07/18/2008 08/06/2008 08/06/2008 08/06/2008
08/06/2008
08/11/2008 08/12/2008
09/08/2008 09/17/2008 09/26/2008

CORRECTED CLERKS QUALITY CONTROL MESSAGE − The BRIEF DOC. 183 filed by J. LINSEY on 7/15/2008 was submitted incorrectly as a MOTION. PLEASE RESUBMIT THE BRIEF USING RESPONSES AND REPLIES. This submission will remain on the docket unless otherwise ordered by the court. (nr, ) (Entered: 07/18/2008)
184 BRIEF /Response Brief Addressing Propoer (1) Scope Of Conditional Collective Action and (2) Method For Calculating Plaintiffs' Alleged FLSA Wages filed by WAL−MART STORES, INC.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Certificate of Service)(GOLDEN, THOMAS) (Entered: 08/06/2008)
185 MOTION for Leave to File Excess Pages by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 08/06/2008)
186 REPLY to Response to Motion re 183 MOTION for Judgment on Partial Findings Concerning Scope of the Collective Action and Damages Computations filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 08/06/2008)
187 REPLY to Response to Motion re 183 MOTION for Judgment on Partial Findings EXHIBITS 1−9 to Plaintiffs Reply Memorandum of Law Concerning Scope of the Collective Action and Damages Computations filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (Attachments: # 1 Exhibit Exhibits 10−14)(LINSEY, JAMES) (Entered: 08/06/2008)
Set/Reset Hearings: Motion Hearing has been moved to 9/17/2008 at 10:30 AM in Newark − Courtroom 3 before Judge Joseph A. Greenaway, Jr. (ps, ) (Entered: 08/11/2008)
188 REPLY to Response to Motion re 183 MOTION for Judgment on Partial Findings *CORRECTED* filed by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (LINSEY, JAMES) (Entered: 08/12/2008)
189 Letter from Thomas H. Golden to Judge Greenaway re: Supplemental Authority re 184 Brief,. (Attachments: # 1 Appendix A, # 2 Certificate of Service)(GOLDEN, THOMAS) (Entered: 09/08/2008)
190 Minute Entry for proceedings held before Judge Joseph A. Greenaway, Jr.: Status Conference held on 9/17/2008. The Court will rule on the pending motions. The Court will schedule a settlement conference, after the motions are decided. (ps, ) (Entered: 09/17/2008)
191 OPINION. Signed by Judge Joseph A. Greenaway, Jr. on 09/25/2008. (nr, ) (Entered: 09/29/2008)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 22 of 30

10/01/2008 10/14/2008
10/14/2008 11/03/2008 06/08/2009 06/08/2009 06/09/2009 06/09/2009 11/08/2009 11/13/2009
11/13/2009
11/13/2009

192 Letter from James Linsey. (LINSEY, JAMES) (Entered: 10/01/2008)
193 MOTION for Reconsideration by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (Attachments: # 1 Exhibit 1 through 5, # 2 Exhibit 6 through 11, # 3 Exhibit 12 Part 1, # 4 Exhibit 12 Part 2, # 5 Exhibit 12 Part 3, # 6 Exhibit 12 Part 4, # 7 Exhibit 12 Part 5, # 8 Exhibit 12 Part 6, # 9 Exhibit 12 Part 7, # 10 Exhibit 12 Part 8, # 11 Exhibit 12 Part 9, # 12 Exhibit 13)(LINSEY, JAMES) (Entered: 10/14/2008)
Set Deadlines as to 193 MOTION for Reconsideration. Motion Hearing set for 11/17/2008 10:00 AM before Judge Joseph A. Greenaway, Jr.. (nr, )(PLEASE BE ADVISED THAT THIS MOTION WILL BE DECIDED ON THE PAPERS UNLESS OTHERWISE NOTIFIED BY THE COURT) (Entered: 10/16/2008)
194 BRIEF in Opposition re 193 MOTION for Reconsideration filed by WAL−MART STORES, INC.. (Attachments: # 1 Certificate of Service)(GOLDEN, THOMAS) (Entered: 11/03/2008)
195 OPINION. Signed by Judge Joseph A. Greenaway, Jr. on 06/08/2009. (nr, ) (Entered: 06/09/2009)
196 ORDER denying 193 Motion for Reconsideration. Signed by Judge Joseph A. Greenaway, Jr. on 06/08/2009. (nr, ) (Entered: 06/09/2009)
197 AMENDED OPINION. Signed by Judge Joseph A. Greenaway, Jr. on 6/9/2009. (nr, ) Modified on 6/10/2009 (nr, ). (Entered: 06/10/2009)
198 AMENDED ORDER denying motion for reconsideration. Signed by Judge Joseph A. Greenaway, Jr. on 06/09/2009. (nr, ) (Entered: 06/10/2009)
199 NOTICE of Appearance by GILBERTO M GARCIA on behalf of all plaintiffs (GARCIA, GILBERTO) (Entered: 11/08/2009)
200 MOTION to Certify Class by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, ROLANDO ROMERO, ADIEL ROMERO RUIZ, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO. (Attachments: # 1 Brief Memorandum of Law in Support of Motion, # 2 Declaration Declaration of Christopher Walters with Exhibits, # 3 Appendix Deposition of Octavio Denisio, # 4 Appendix Deposition of Eunice Gomez, # 5 Appendix Deposition of Victor Zavala Torres, # 6 Appendix Deposition of Carlos Rueda, # 7 Appendix Deposition of Carlos Rueda, # 8 Appendix Deposition of Victor M. Zavala, # 9 Appendix Deposition of Julio Cesar Zavala, # 10 Exhibit Deposition Exhibits, # 11 Declaration Declaration of Plaintiffs, # 12 Declaration Declaration of James L. Linsey, # 13 Exhibit A, # 14 Exhibit B − 1A, # 15 Exhibit B − 1B, # 16 Exhibit B −2A, # 17 Exhibit B − 2B, # 18 Exhibit B − 2C, # 19 Exhibit B − 3A, # 20 Exhibit B − 3B, # 21 Exhibit B − 4A, # 22 Exhibit B − 4B, # 23 Exhibit B − 5A, # 24 Exhibit B − 5B, # 25 Exhibit B − 6A, # 26 Exhibit B − 6B, # 27 Exhibit B − 7, # 28 Exhibit B − 8, # 29 Exhibit C, # 30 Temporary Order for Seal)(LINSEY, JAMES) (Entered: 11/13/2009)
201 NOTICE by VICTOR ZAVALA, ARTURO ZAVALA, MARTIN MACAK, PAVEL KUNC, HANA PFAUSEROVA, JIRI PFAUSER, TERESA JAROS, PETR ZEDNEK, DANIEL ANTONIO CRUZ, LUIS GUTIERREZ, FILIPE CONDADO, EUNICE GOMEZ, MAXIMILIANO MENDEZ, CARLOS ALBERTO TELLO, ANTONIO FLORES, HIPOLITO PALACIOS, OCTAVIO DENISIO re 200 MOTION to Certify Class Notice of Filing of Documents Under Seal (LINSEY, JAMES) (Entered: 11/13/2009)
Set Deadlines as to 200 MOTION to Certify Class. Motion set for 12/7/2009 10:00 AM before Judge Joseph A. Greenaway, Jr.. The motion will be decided on the

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 23 of 30

11/23/2009 11/23/2009 12/07/2009
12/07/2009 12/07/2009
12/07/2009 12/08/2009 12/08/2009 12/14/2009 12/14/2009

papers. No appearances required unless notified by the court. (nr, ) (Entered: 11/20/2009)
202 BRIEF in Opposition re 200 MOTION to Certify Class and Notice of Cross−Motion to Decertify Conditional Collective Action filed by WAL−MART STORES, INC.. (Attachments: # 1 Brief, # 2 Exhibit A, # 3 Declaration of Amy White, # 4 Exhibit 1, # 5 Exhibit 2, # 6 Exhibit 3, # 7 Exhibit 4, # 8 Exhibit 5, # 9 Exhibit 6, # 10 Exhibit 7, # 11 Exhibit 8, # 12 Exhibit 9, # 13 Text of Proposed Order, # 14 Certificate of Service)(GOLDEN, THOMAS) (Entered: 11/23/2009)
203 Letter from Thomas H. Golden to Judge Greenaway requesting Temporary Order for Seal of certain Exhibit's to Wal−Mart's Notice of Cross−Motion to Decertify Conditional Collective Action re 202 Brief in Opposition to Motion,. (Attachments: # 1 Text of Proposed Order, # 2 Certificate of Service)(GOLDEN, THOMAS) (Entered: 11/23/2009)
204 MEMORANDUM in Support re 200 MOTION to Certify Class of Motion for Final Certification and in Opposition to Wal−Mart's Motion to Decertify Collective Action filed by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (LINSEY, JAMES) (Entered: 12/07/2009)
205 MOTION to Seal Document 204 Memorandum in Support of Motion,, by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (LINSEY, JAMES) (Entered: 12/07/2009)
206 NOTICE by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK re 205 MOTION to Seal Document 204 Memorandum in Support of Motion,, MOTION to Seal Document 204 Memorandum in Support of Motion,,, 204 Memorandum in Support of Motion,, Notice of Filing Under Seal (LINSEY, JAMES) (Entered: 12/07/2009)
Set Deadlines as to 205 MOTION to Seal Document 204 Memorandum in Support of Motion,, MOTION to Seal Document 204 Memorandum in Support of Motion,,. Motion set for 1/4/2010 10:00 AM before Judge Joseph A. Greenaway, Jr.. The motion will be decided on the papers. No appearances required unless notified by the court. (nr, ) (Entered: 12/09/2009)
207 Letter from James L. Linsey. (LINSEY, JAMES) (Entered: 12/08/2009)
208 ORDER dismissing pltf's motion seeking a temporary sealing order as moot; directing the Clerk of the Court to unseal pltf's notice of filing of documents under seal (docket entry nos. 201 and 206). Signed by Magistrate Judge Madeline C. Arleo on 12/08/2009. (nr, ) (Entered: 12/10/2009)
CLERKS QUALITY CONTROL MESSAGE − The Cross Motion Doc. #202 filed by THOMAS GOLDEN on 11/23/2009 was submitted incorrectly as a BRIEF. PLEASE RESUBMIT THE CROSS MOTION USING MOTION. This submission will remain on the docket unless otherwise ordered by the court. (nr, ) (Entered: 12/14/2009)
209 Cross MOTION to Decertify Conditional Collective Action [Resubmitted] previously filed with Attachments re 202 Brief in Opposition to Motion, by WAL−MART CORPORATION. (GOLDEN, THOMAS) (Entered: 12/14/2009)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 24 of 30

12/14/2009
12/14/2009
12/14/2009
03/10/2010 03/15/2010
05/19/2010 05/20/2010 05/21/2010 06/14/2010 06/25/2010 06/25/2010 07/01/2010 07/06/2010 07/13/2010 08/05/2010 08/11/2010

210 MOTION for Leave to File /Notice of Motion and Motion for Consent to File a Reply Memorandum of Law by WAL−MART STORES, INC.. (Attachments: # 1 Exhibit A − Proposed Reply Memorandum of Law in Support of Defendant's Cross−Motion to Decertify Conditional Collective Action, # 2 Declaration of Amy White, # 3 Exhibit 1 of Declaration, # 4 Text of Proposed Order, # 5 Certificate of Service)(GOLDEN, THOMAS) (Entered: 12/14/2009)
Set Deadlines as to 209 Cross MOTION to Decertify Conditional Collective Action [Resubmitted] previously filed with Attachments re 202 Brief in Opposition to Motion,. Motion set for 12/21/2009 10:00 AM before Judge Joseph A. Greenaway, Jr.. The motion will be decided on the papers. No appearances required unless notified by the court. (nr, ) (Entered: 12/17/2009)
Set Deadlines as to 210 MOTION for Leave to File /Notice of Motion and Motion for Consent to File a Reply Memorandum of Law. Motion set for 1/19/2010 10:00 AM before Judge Joseph A. Greenaway, Jr.. The motion will be decided on the papers. No appearances required unless notified by the court. (nr, ) (Entered: 12/17/2009)
211 ORDER REASSIGNING CASE. Case reassigned to Chief Judge Garrett E. Brown, Jr. for all further proceedings. Judge Joseph A. Greenaway, Jr. no longer assigned to case. Signed by Chief Judge Garrett E. Brown, Jr. on 3/10/2010. (mn, ) (jl, ). (Entered: 03/10/2010)
212 ORDER granting 210 Motion for Leave to File a reply memorandum in support of deft's cross motion to decertify; deft. Wal Mart's reply memorandum of law attached hereto is deemed filed as of this date. Signed by Magistrate Judge Madeline C. Arleo on 03/11/2010. (nr, ) Modified on 3/17/2010 (mn, ). (Entered: 03/15/2010)
213 Letter from James L. Linsey to The Honorable Garrett E. Brown, Jr. (LINSEY, JAMES) (Entered: 05/19/2010)
Minute Entry for proceedings held before Chief Judge Garrett E. Brown, Jr.: Telephone Conference held on 5/20/2010. Status conference held. (Court Reporter/Recorder K. Korchick.) (dm ) (Entered: 05/20/2010)
214 TEXT ORDER − Scheduling a Status Conference Call for 6/14/2010 at 03:00 PM before Magistrate Judge Madeline C. Arleo. Mr. Linsey is to initiate.Ordered by Magistrate Judge Madeline C. Arleo on 5/21/2010. (kd) (Entered: 05/21/2010)
Minute Entry for proceedings held before Magistrate Judge Madeline C. Arleo: Status Conference Call held on 6/14/2010. (kd) (Entered: 06/16/2010)
215 MEMORANDUM OPINION. Signed by Chief Judge Garrett E. Brown, Jr. on 06/25/2010. (nr, ) Modified on 6/25/2010 (nr, ). (Entered: 06/25/2010)
216 ORDER denying 200 Motion for final Class certification ; granting 209 Cross Motion for final decertification. Signed by Chief Judge Garrett E. Brown, Jr. on 06/25/2010. (nr, ) (Entered: 06/25/2010)
217 TEXT ORDER. An in person status conference is scheduled for August 11, 2010 at 3:00 p.m. Your attendance is required. ORDERED by Magistrate Judge Madeline C. Arleo on July 1, 2010. (Arleo, Madeline) (Entered: 07/01/2010)
218 TEXT ORDER − Scheduling a Status Conference Call for 7/13/2010 at 12:30 PM before Magistrate Judge Madeline C. Arleo. Mr. Garcia is to initiate.Ordered by Magistrate Judge Madeline C. Arleo on 7/6/2010. (kd) (Entered: 07/06/2010)
Minute Entry for proceedings held before Magistrate Judge Madeline C. Arleo: Status Conference Call held on 7/13/2010, (In−Person Status Conference set for 8/11/2010 at 03:00 PM in Newark − Courtroom 2A before Magistrate Judge Madeline C. Arleo.). (kd) (Entered: 07/28/2010)
219 Letter from James L. Linsey, Esq.. (LINSEY, JAMES) (Entered: 08/05/2010)
220 TEXT ORDER. Today's settlement conference is hereby adjourned until Oct. 1, 2010 at 11:00 a.m. By August 27, 2010, Walmart shall provide translated settlement letters for each of the ten plaintiffs. By September 28, 2010, plaintiffs'

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 25 of 30

08/11/2010 10/01/2010 10/07/2010 10/20/2010
10/20/2010 10/21/2010 10/21/2010 10/22/2010 10/22/2010 10/26/2010 10/29/2010 11/01/2010

counsel shall advise the court and counsel by letter of the position of each client on settlement. ORDERED by Magistrate Judge Madeline C. Arleo on August 11, 2010. (Arleo, Madeline) (Entered: 08/11/2010)
Minute Entry for proceedings held before Magistrate Judge Madeline C. Arleo: Status/Settlement Conference held on 8/11/2010, (Settlement Conference set for 10/1/2010 at 11:00 AM in Newark − Courtroom 2A before Magistrate Judge Madeline C. Arleo.). (kd) (Entered: 08/12/2010)
Minute Entry for proceedings held before Magistrate Judge Madeline C. Arleo: Settlement Conference held on 10/1/2010. (kd) (Entered: 10/19/2010)
221 ORDER TO SHOW CAUSE why the second amended complt. of Teresa Jaros and Petr Zednek should not be involuntarily dismissed due to their immigration status Show Cause Hearing set for 11/8/2010 11:30 AM before Magistrate Judge Madeline C. Arleo.. Signed by Magistrate Judge Madeline C. Arleo on 10/07/2010. (nr, ) (Entered: 10/07/2010)
222 MOTION for Summary Judgment Motion and Motion for Partial Summary Judgment by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (Attachments: # 1 Proposed Order, # 2 Memorandum of Law in Support of Motion for Partial Summary Judgment, # 3 Statement of Undisputed Facts, # 4 Supplemental Declaration of Petr Zednik with Exhibits A−F, # 5 Supplemental Declaration of Teresa Jaros with Exhibits A−D, # 6 Declaration of James L. Linsey with Exhibits A−F, # 7 Declaration of Christopher Walters, # 8 Exhibit A to C. Walters Declaration, # 9 Exhibit B to C. Walters Declaration, # 10 Exhibit C to C. Walters Declaration, # 11 Exhibit D to C. Walters Declaration, # 12 Exhibit E to Walters Declaration)(LINSEY, JAMES) (Entered: 10/20/2010)
Set Deadlines as to 222 MOTION for Summary Judgment Motion and Motion for Partial Summary Judgment, 223 MOTION to Continue /Adjourn Trial Date and to Permit Video Testimony. Motion set for 11/15/2010 10:00 AM before Chief Judge Garrett E. Brown, Jr.. The motion will be decided on the papers. No appearances required unless notified by the court. (nr, ) (Entered: 10/24/2010)
223 MOTION to Continue /Adjourn Trial Date and to Permit Video Testimony by TERESA JAROS, PETR ZEDNEK. (Attachments: # 1 Text of Proposed Order on Motion to Adjourn Trial Date, # 2 Text of Proposed Order Motion to Permit Video Testimony)(LINSEY, JAMES) (Entered: 10/21/2010)
224 BRIEF in Response to Order to Show Cause and in Support of Motion to Adjourn Trial Date and to Permit Video Testimony filed by TERESA JAROS, PETR ZEDNEK. (Attachments: # 1 Declaration of James L. Linsey, # 2 Exhibit A to J. Linsey Declaration (Part 1), # 3 Exhibit A to Linsey Declaration (Part 2))(LINSEY, JAMES) (Entered: 10/21/2010)
225 MOTION to Withdraw as Attorney by PETR ZEDNEK. (Attachments: # 1 Certification, # 2 Brief)(GARCIA, GILBERTO) (Entered: 10/22/2010)
Set Deadlines as to 225 MOTION to Withdraw as Attorney. Motion set for 11/15/2010 10:00 AM before Chief Judge Garrett E. Brown, Jr.. The motion will be decided on the papers. No appearances required unless notified by the court. (nr, ) (Entered: 10/27/2010)
226 RESPONSE to Motion re 225 MOTION to Withdraw as Attorney filed by TERESA JAROS, PETR ZEDNEK. (LINSEY, JAMES) (Entered: 10/26/2010)
227 CERTIFICATE OF SERVICE by TERESA JAROS, PETR ZEDNEK re 225 MOTION to Withdraw as Attorney, 226 Response to Motion (LINSEY, JAMES) (Entered: 10/29/2010)
228 BRIEF in Opposition re 222 MOTION for Summary Judgment Motion and Motion for Partial Summary Judgment filed by WAL−MART STORES, INC..

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 26 of 30

11/01/2010 11/05/2010
11/05/2010 11/08/2010 11/08/2010 11/08/2010
11/09/2010 11/09/2010 11/10/2010 11/10/2010
11/10/2010 12/01/2010 12/01/2010

(Attachments: # 1 Statement Wal−Mart's Responsive Statement of Material Facts, # 2 Declaration of Ann M. Staron and Exhibit, # 3 Certificate of Service)(GOLDEN, THOMAS) (Entered: 11/01/2010)
229 BRIEF in Opposition re 223 MOTION to Continue /Adjourn Trial Date and to Permit Video Testimony filed by WAL−MART STORES, INC.. (Attachments: # 1 Certificate of Service)(GOLDEN, THOMAS) (Entered: 11/01/2010)
230 TEXT ORDER − The ORDER TO SHOW CAUSE why the second amended complaint of Teresa Jaros and Peter Zednek should not be involuntarily dismissed due to their immigration status Show Cause Hearing set for 11/8/2010 is ADJOURNED. The Order to Show Cause will be decided on the papers. No appearances are required.Ordered by Magistrate Judge Madeline C. Arleo on 11/5/2010. (kd) (Entered: 11/05/2010)
231 ORDER granting 225 Motion to Withdraw as Attorney. Attorney GILBERTO M GARCIA terminated. Signed by Magistrate Judge Madeline C. Arleo on 11/04/2010. (nr, ) (Entered: 11/05/2010)
232 REPLY BRIEF to Opposition to Motion re 222 MOTION for Summary Judgment Motion and Motion for Partial Summary Judgment filed by TERESA JAROS, PETR ZEDNEK. (LINSEY, JAMES) (Entered: 11/08/2010)
233 REPLY BRIEF to Opposition to Motion re 223 MOTION to Continue /Adjourn Trial Date and to Permit Video Testimony and in Response to Order to Show Cause filed by TERESA JAROS, PETR ZEDNEK. (Attachments: # 1 Second Supplemental Declaration of Petr Zednik, # 2 Second Supplemental Declaration of Teresa Jaros)(LINSEY, JAMES) (Entered: 11/08/2010)
234 DECLARATION of James L. Linsey re 223 MOTION to Continue /Adjourn Trial Date and to Permit Video Testimony, 222 MOTION for Summary Judgment Motion and Motion for Partial Summary Judgment (Reply Declaration) by TERESA JAROS, PETR ZEDNEK. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P, # 17 Exhibit Q, # 18 Exhibit R, # 19 Exhibit S, # 20 Exhibit T, # 21 Exhibit U, # 22 Exhibit V, # 23 Exhibit W, # 24 Exhibit X, # 25 Exhibit Y, # 26 Exhibit Z, # 27 Exhibit AA, # 28 Exhibit BB)(LINSEY, JAMES) (Entered: 11/08/2010)
235 MEMORANDUM OPINION Signed by Chief Judge Garrett E. Brown, Jr on 11/8/2010. (ss, ) (Entered: 11/09/2010)
236 ORDER granting in part and denying in part 223 Motion to Continue Signed by Chief Judge Garrett E. Brown, Jr on 11/8/2010. (ss, ) (Entered: 11/09/2010)
237 DECLARATION re 234 Declaration,,, ERRATA to Reply Declaration of James L. Linsey, filed on November 8, 2010 by TERESA JAROS, PETR ZEDNEK. (LINSEY, JAMES) (Entered: 11/10/2010)
238 DECLARATION re 234 Declaration,,, 237 Declaration Reply Declaration of James L. Linsey (Corrected Copy) by TERESA JAROS, PETR ZEDNEK. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P, # 17 Exhibit Q, # 18 Exhibit R, # 19 Exhibit S, # 20 Exhibit T, # 21 Exhibit U, # 22 Exhibit V, # 23 Exhibit W, # 24 Exhibit X, # 25 Exhibit Y, # 26 Exhibit Z, # 27 Exhibit AA, # 28 Exhibit BB)(LINSEY, JAMES) (Entered: 11/10/2010)
239 CERTIFICATE OF SERVICE by TERESA JAROS, PETR ZEDNEK re 238 Declaration,, 237 Declaration (LINSEY, JAMES) (Entered: 11/10/2010)
240 MEMORANDUM OPINION Signed by Chief Judge Garrett E. Brown, Jr on 11/30/2010. (ss, ) (Entered: 12/01/2010)
241 ORDER denying 222 Motion for Summary Judgment Signed by Chief Judge Garrett E. Brown, Jr on 11/30/2010. (ss, ) (Entered: 12/01/2010)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 27 of 30

01/21/2011
01/28/2011 01/31/2011 02/01/2011
02/16/2011 02/16/2011 03/04/2011 03/04/2011 03/04/2011 03/11/2011 03/11/2011 03/11/2011

242 STATUS REPORT by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (LINSEY, JAMES) (Entered: 01/21/2011)
243 BRIEF in Opposition to Defendant's January 26, 2011 Letter and Declaration of James L. Linsey w/ Attachments A−C filed by TERESA JAROS, PETR ZEDNEK. (Attachments: # 1 Declaration of James L. Linsey with Attachements A−C)(LINSEY, JAMES) (Entered: 01/28/2011)
244 Letter from David P. Murray, Esq. re: schedule for Motion to Dismiss. (mmh) (Entered: 02/01/2011)
245 ORDER administratively terminating the 10/7/2010 OTSC; granting Deft's 1/26/2011 request to file a motion for judgment on the pleadings and/or for partial summary judgment; Deft's motion due by 2/16/2011; Pltfs' opposition due by 3/4/2011; Deft's reply due by 3/11/2011; setting Trial for 5/2/2011 at 09:00 AM in Trenton − Courtroom 4E before Chief Judge Garrett E. Brown Jr.; that the parties shall contact Judge Arleo and schedule all remaining pre−trial proceedings necessary in this case. Signed by Chief Judge Garrett E. Brown, Jr on 2/1/2011. (gxh) (Entered: 02/01/2011)
246 MOTION for Judgment on the Pleadings , or in the Alternative, for Partial Summary Judgment by WAL−MART STORES, INC.. (Attachments: # 1 Brief, # 2 Statement of Uncontested Facts, # 3 Declaration of Terry Wright, # 4 Declaration of Ellen McDaris, # 5 Text of Proposed Order, # 6 Certificate of Service)(GOLDEN, THOMAS) (Entered: 02/16/2011)
Set Deadlines as to 246 MOTION for Judgment on the Pleadings , or in the Alternative, for Partial Summary Judgment. Motion set for 3/21/2011 10:00 AM before Chief Judge Garrett E. Brown Jr.. The motion will be decided on the papers. No appearances required unless notified by the court. (nr, ) (Entered: 02/21/2011)
247 BRIEF in Opposition re 246 MOTION for Judgment on the Pleadings , or in the Alternative, for Partial Summary Judgment filed by TERESA JAROS, PETR ZEDNEK. (Attachments: # 1 Third Supp. Declaration of Petr Zednik, # 2 Plaintiffs' Responsive Statement of Material Facts and Supplemental Statement of Disputed Material Facts)(LINSEY, JAMES) (Entered: 03/04/2011)
248 Letter from James L. Linsey re 247 Brief in Opposition to Motion,. (LINSEY, JAMES) (Entered: 03/04/2011)
249 SCHEDULING ORDER: Final Pretrial Conference set for 4/21/2011 11:00 AM before Magistrate Judge Madeline C. Arleo.. Signed by Magistrate Judge Madeline C. Arleo on 03/04/2011. (nr, ) (Entered: 03/08/2011)
250 REPLY to Response to Motion re 246 MOTION for Judgment on the Pleadings , or in the Alternative, for Partial Summary Judgment filed by WAL−MART STORES, INC.. (Attachments: # 1 Response to Plaintiffs' Supplemental Statement of Disputed Material Facts, # 2 Certificate of Service)(GOLDEN, THOMAS) (Entered: 03/11/2011)
251 Joint MOTION for Settlement and Dismissal of Claims of Felipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres by WAL−MART STORES, INC.. (Attachments: # 1 Memorandum in Support, # 2 Exhibit A, # 3 Text of Proposed Order, # 4 Certificate of Service)(GOLDEN, THOMAS) (Entered: 03/11/2011)
Set Deadlines as to 251 Joint MOTION for Settlement and Dismissal of Claims of Felipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres. Motion set for 4/4/2011 10:00 AM before Chief Judge Garrett E. Brown Jr.. The motion will be decided on the papers. No appearances required unless notified by the court. (nr, ) (Entered: 03/14/2011)

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 28 of 30

03/14/2011 03/15/2011 03/21/2011
03/21/2011
03/22/2011
03/23/2011
03/25/2011 03/25/2011 03/28/2011

252 Letter from James L. Linsey. (LINSEY, JAMES) (Entered: 03/14/2011)
253 TEXT ORDER − Rescheduling a Final Pretrial Conference from April 21, 2011 at 11:00 am to APRIL 21, 2011 at 12:00 pm in Newark − Courtroom 2A before Magistrate Judge Madeline Cox Arleo.Ordered by Magistrate Judge Madeline C. Arleo on 3/15/2011. (kd) (Entered: 03/15/2011)
254 RESPONSE to Motion re 251 Joint MOTION for Settlement and Dismissal of Claims of Felipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres filed by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (LINSEY, JAMES) (Entered: 03/21/2011)
255 DECLARATION re 254 Response to Motion,, by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (Attachments: # 1 Exhibit A−E Exhibits to Linsey decl. 3/21/2011, # 2 Exhibit F−K Exhibits to Linsey Decl. 3/21/2011, # 3 Exhibit L−M Exhibits to Linsey Decl. 3/21/2011, # 4 Exhibit N Exhibit to Linsey decl. 3/21/2011, # 5 Exhibit O Exhibit to Linsey Decl. 3/21/2011, # 6 Exhibit P Exh. to Linsey decl. 3/21/2011, # 7 Exhibit Q Exh. to Linsey Declaration 3/21/2011, # 8 Exhibit R Part 1 Exh. to Linsey Decl. 3/21/2011, # 9 Exhibit R Part 2 Exh. Linsey Decl. 3/21/2011, # 10 Exhibit S Part 1 Ex. Linsey Decl. 3/21/2011, # 11 Exhibit S Part 2 Ex. Linsey Decl. 3/21/2011, # 12 Exhibit T Part 1 Ex. Linsey Decl. 3/21/2011, # 13 Exhibit T Part 2 Ex. Linsey Decl. 3/21/2011)(LINSEY, JAMES) (Entered: 03/21/2011)
256 RESPONSE to Motion re 251 Joint MOTION for Settlement and Dismissal of Claims of Felipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres filed by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK. (LINSEY, JAMES) (Entered: 03/22/2011)
CLERK'S QUALITY CONTROL MESSAGE: MICHAELENE LOUGHLIN, does not have a correct e−mail address listed with the court and is not receiving his/her notices of electronic filing in this case. Pursuant to local rule 10.1 and court procedures, counsel and unrepresented parties are required to notify the court of any mailing or e−mail address changes. The court has deleted the invalid e−mail address. Attorneys should review the ECF link on our web site for information on maintaining your account and unrepresented parties, or those attorneys without access to maintaining their account, should notice the Clerk. (sea, ) (Entered: 03/23/2011)
257 Joint MOTION to approve settlement and dismiss claims of Octavio Denicia by WAL−MART STORES, INC.. (Attachments: # 1 Memorandum in Support, # 2 Exhibit A, # 3 Text of Proposed Order, # 4 Certificate of Service)(GOLDEN, THOMAS) (Entered: 03/25/2011)
Set Deadlines as to 257 Joint MOTION to approve settlement and dismiss claims of Octavio Denicia. Motion set for 4/18/2011 10:00 AM before Chief Judge Garrett E. Brown Jr.. The motion will be decided on the papers. No appearances required unless notified by the court. (nr, ) (Entered: 03/28/2011)
258 REPLY to Response to Motion re 251 Joint MOTION for Settlement and Dismissal of Claims of Felipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres filed by WAL−MART

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 29 of 30

04/05/2011 04/05/2011 04/07/2011 04/07/2011 04/08/2011 04/08/2011 04/13/2011 04/18/2011 04/20/2011 04/21/2011 04/25/2011 05/19/2011
05/19/2011
05/20/2011 05/20/2011 05/26/2011

STORES, INC.. (Attachments: # 1 Certificate of Service)(GOLDEN, THOMAS) (Entered: 03/28/2011)
259 ORDER granting 251 Joint Motion for Settlement ; ordering that all claims having been asserted by Filipe Condado, Eunice Gomez, Jiri Pfauser, Hana Pfauserova, Carlos Tello, and Victor Zavala Torres are dismissed with prejudice. Signed by Chief Judge Garrett E. Brown, Jr on 4/5/2011. (eaj) (Entered: 04/05/2011)
260 ORDER granting 257 Joint Motion to Approve Settlement; Ordering that all claims having been asserted by Octavio Denicia are dismissed with prejudice. Signed by Chief Judge Garrett E. Brown, Jr on 4/5/2011. (eaj) (Entered: 04/05/2011)
261 MEMORANDUM OPINION filed. Signed by Chief Judge Garrett E. Brown, Jr on 4/7/2011. (eaj) (Entered: 04/07/2011)
262 ORDER granting 246 Motion for Summary Judgment on Plaintiff's false imprisonment claims. Signed by Chief Judge Garrett E. Brown, Jr on 4/7/2011. (eaj) (Entered: 04/07/2011)
263 MOTION Involuntary Dismissal of Claims of Hipolito Palacios Pursuant to Fed. R. Civ. P. 41(b) by WAL−MART STORES, INC.. (Attachments: # 1 Memorandum in Support, # 2 Exhibit 1, # 3 Text of Proposed Order, # 4 Certificate of Service)(GOLDEN, THOMAS) (Entered: 04/08/2011)
264 Mail Returned as Undeliverable. Mail sent to Michaelene Loughlin (eaj) (Entered: 04/08/2011)
265 ORDER granting 263 Defendant's Motion for Involuntary Dismissal of Claims of Hipolito Palacios Pursuant to Fed. R. Civ. P. 41(b), Dismissing all claims asserted by Plaintiff Palacio in this proceeding. Signed by Chief Judge Garrett E. Brown, Jr on 4/13/2011. (eaj) (Entered: 04/13/2011)
266 Mail Returned as Undeliverable. Mail re 265 ORDER sent to MICHAELENE LOUGHLIN. *Clerk has resent documents to forwarding address indicated on returned envelope. (gxh) (Entered: 04/18/2011)
267 NOTICE of Acceptance with Offer of Judgment by TERESA JAROS, PETR ZEDNEK (LINSEY, JAMES) (Entered: 04/20/2011)
268 ORDER DISMISSING CASE. Signed by Chief Judge Garrett E. Brown, Jr on 4/21/2011. (eaj) (Entered: 04/21/2011)
269 Mail Returned as Undeliverable. Mail sent to Michaelene Loughlin (eaj) (Entered: 04/25/2011)
270 NOTICE OF APPEAL as to 156 Order on Motion for Certificate of Appealability, 216 Order on Motion to Certify Class, Order on Motion for Miscellaneous Relief, 116 Order on Motion to Dismiss by TERESA JAROS, PETR ZEDNEK. Filing fee $ 455, receipt number 0312−3733486. The Clerk's Office hereby certifies the record and the docket sheet available through ECF to be the certified list in lieu of the record and/or the certified copy of the docket entries. Appeal Record due by 6/2/2011. (LINSEY, JAMES) (Entered: 05/19/2011)
271 Transcript of Proceedings held on 3/21/11, before Judge Sheridan. Court Reporter/Transcriber Francis J. Gable, Telephone number 856 889 4761. NOTICE REGARDING REDACTION OF TRANSCRIPTS: The parties have seven (7) calendar days to file with the Court a Notice of Intent to Request Redaction of this Transcript. Redaction Request due 6/9/2011. Redacted Transcript Deadline set for 6/20/2011. Release of Transcript Restriction set for 8/17/2011. (tjg, ) (Entered: 05/20/2011)
PLEASE DISREGARD DOCUMENT 271 . IT WAS FILED IN THIS CASE BY CLERKS ERROR. (tjg, ) (Entered: 05/20/2011)
272 Letter from James L. Linsey re 270 Notice of Appeal (USCA), Notice of Appeal (USCA), Notice of Appeal (USCA). (LINSEY, JAMES) (Entered: 05/20/2011)
273 TRANSCRIPT REQUEST for Third Circuit Court of Appeals by FILIPE CONDADO, DANIEL ANTONIO CRUZ, OCTAVIO DENISIO, ANTONIO

Case: 2:03-cv-5309 As of: 02/20/2013 03:26 PM EST 30 of 30

06/01/2011 06/01/2011 08/31/2012 10/19/2012

FLORES, EUNICE GOMEZ, LUIS GUTIERREZ, TERESA JAROS, PAVEL KUNC, MARTIN MACAK, MAXIMILIANO MENDEZ, HIPOLITO PALACIOS, JIRI PFAUSER, HANA PFAUSEROVA, ROLANDO ROMERO, ADIEL ROMERO RUIZ, CARLOS ALBERTO TELLO, ARTURO ZAVALA, VICTOR ZAVALA, PETR ZEDNEK for proceedings held on October 20, 2004; February 16, 2005 before Judge Greenaway.. (LINSEY, JAMES) (Entered: 05/26/2011)
274 Transcript of Proceedings held on 10/20/04, before Judge Greenway. Court Reporter/Transcriber Thomas F. Brazaitis, Telephone number 973 645 4621. Tape Number: Motion. NOTICE REGARDING REDACTION OF TRANSCRIPTS: The parties have seven (7) calendar days to file with the Court a Notice of Intent to Request Redaction of this Transcript. Redaction Request due 6/22/2011. Redacted Transcript Deadline set for 7/5/2011. Release of Transcript Restriction set for 8/30/2011. (tjg, ) (Entered: 06/01/2011)
275 Transcript of Proceedings held on 2/16/05, before Judge Greenway. Court Reporter/Transcriber Thomas Brazaitis, Telephone number 973 645 4621. Tape Number: Motion. NOTICE REGARDING REDACTION OF TRANSCRIPTS: The parties have seven (7) calendar days to file with the Court a Notice of Intent to Request Redaction of this Transcript. Redaction Request due 6/22/2011. Redacted Transcript Deadline set for 7/5/2011. Release of Transcript Restriction set for 8/30/2011. (tjg, ) (Entered: 06/01/2011)
276 MANDATE of USCA as to 270 Notice of Appeal (USCA), filed by PETR ZEDNEK, TERESA JAROS (Attachments: # 1 Opinion)(ca3cjg) (Entered: 08/31/2012)
277 LETTER ORDER in response to letter dated 10/3/2012. Signed by Magistrate Judge Madeline C. Arleo on 10/17/2012. (nr, ) (Entered: 10/23/2012)