United States District Court, D. Colorado
HEIDI GILBERT, AMBER MEANS, MANDY MELOON, GABRIELA JOSLIN, KAY POE, and JANE DOES 6 – 50, Plaintiffs,
v.
UNITED STATES OLYMPIC COMMITTEE, USA TAEKWONDO, INC., STEVEN LOPEZ, JEAN LOPEZ, and JOHN DOES 1 – 5, Defendants.
ORDER AFFIRMING AND ADOPTING IN PART AND REJECTING IN
PART MAGISTRATE JUDGE’S MARCH 6, 2019 RECOMMENDATION
AND GRANTING IN PART AND DENYING IN PART DEFENDANTS’
MOTIONS TO DISMISS
CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE.
This
matter is before the Court on the March 6, 2019
Recommendation by United States Magistrate Judge Michael E.
Hegarty, in which the Magistrate Judge recommends that this
Court grant in part and deny in part three motions to
dismiss: (1) Defendants Steven Lopez and Jean Lopez’s
(together, the “Lopez Defendants”) Motion to
Dismiss (Doc. # 106); (2) Defendant United States Olympic
Committee’s (“Defendant USOC”) Motion to
Dismiss and Motion to Strike Class Action Allegations (Doc. #
108); and (3) Defendant USA Taekwondo, Inc.’s
(“Defendant USAT”) Motion to Dismiss (Doc. #
109). (Doc. # 218.) Plaintiffs and all Defendants object to
portions of the Recommendation. (Doc. ## 224–27.) For
the reasons described below, the Court affirms and adopts in
part and rejects in part the Recommendation, and it grants in
part and denies in part Defendants’ Motions to Dismiss.
I.
BACKGROUND
The
Recommendation thoroughly recites the factual and procedural
background of this dispute and is incorporated herein by
reference. (Doc. # 218.) See 28 U.S.C. §
636(b)(1)(B); Fed.R.Civ.P. 72(b). Accordingly, this Order
will reiterate only what is necessary to address the
parties’ Objections to the Recommendation.
A.
FACTUAL BACKGROUND
Briefly,
Plaintiffs are elite female taekwondo athletes who competed
on behalf of the United States at international sporting
events, including the Olympics. (Doc. # 68 at 2.)
Defendant
USOC is the federally chartered corporation with
“exclusive jurisdiction” over “all matters
pertaining to United States participation in the Olympic
Games, the Paralympic Games, and the Pan-American
Games.” 36 U.S.C. § 220503(3)(A); 36 U.S.C. §
220502(a); see also (Doc. # 68 at 17.) Congress has
empowered Defendant USOC to “organize, finance, and
control the representation of the United States in . . . the
Olympic Games” and other sanctioned competitions
directly or through a sport’s national governing body
and to “facilitate, through orderly and effective
administrative procedures, the resolution of conflicts or
disputes that involve any of its members and any amateur
athlete, coach, . . . national governing body, or amateur
sports organization and that arise in connection with their
eligibility for and participation” in protected
international competitions. 36 U.S.C. §§
220505(c)(3), (5).
Defendant
USAT is the national governing body (“NGB”) for
the sport of taekwondo, recognized and regulated by Defendant
USOC pursuant to 36 U.S.C. § 220505(c)(4). (Doc. # 68 at
17, 21.) It is a not-for-profit federation that, like the
NGBs of scores of other sports, is charged with sponsoring
and arranging amateur athletic competitions in the sport.
See 36 U.S.C. §§ 220501(b)(3), (8). It
also selects American taekwondo athletes, officials, and
coaches to participate in the Olympics and similar elite,
international competitions. (Doc. # 68 at 22.)
Defendant
Jean Lopez was the head coach of the American taekwondo teams
at the 2004, 2008, 2012, and 2016 Olympic Games, and
Defendant Steven Lopez, his brother, is a three-time Olympic
taekwondo medalist for the United States. (Id. at
19.) Plaintiffs describe Defendant Steven Lopez as
“taekwondo’s biggest star” and state that
in the 2000s, he and Defendant Jean Lopez, along with their
other siblings, were known across the country “as the
‘First Family’ of taekwondo.” (Id.
at 9.)
Plaintiffs
allege that Defendants inflicted on them and other American
female taekwondo athletes “forced labor and services,
sex trafficking, and other travesties.” (Id.
at 2.) They contend that the Lopez Defendants, “the
primary perpetrators, ” “raped numerous female
taekwondo athletes” and that Defendant USOC and
Defendant USAT (together, the “Institutional
Defendants”) facilitated the Lopez Defendants’
sex crimes and “protected [the Lopez brothers] from law
enforcement and suspension by Team USA.” (Id.
at 3.) Plaintiffs’ claims arise from two time periods:
[F]irst, the underlying forced labor and services and sex t
raf f icking of Plaintiffs . . . from 1997 to 2010, and
second, the cover-up of this misconduct, . . . which occurred
from 2006 to 2008 and then from 2015 to 2018.
(Id. at 5.) They contend that during the second time
period, Defendants USOC and USAT “formed an enterprise
(along with the Lopez [Defendants]) to obstruct and interfere
with efforts to prosecute or remove the Lopez brothers from
taekwondo” and that Defendants’ obstructionist
conduct included making “false and corrupting
statements to Congress.” (Id.)
B.
PROCEDURAL HISTORY
Plaintiffs
initiated this litigation against Defendants on April 25,
2018, see (Doc. # 1), and have twice amended their
Complaint, see (Doc. ## 6, 64, 68).
Plaintiffs’ Second Amended Complaint (the
“SAC”), filed August 24, 2018, is the operative
pleading. (Doc. # 68.) Plaintiffs assert 21 causes of action
against Defendants and the United States Center for SafeSport
(“SafeSport”).[1] (Id.) The Court organizes the
claims into three categories:
Claims Arising Under the Trafficking Victims
Protection Act (“TVPA”) , Pub. L. No.
106-386, 114 Stat. 1466 (2000) (codified as amended in
scattered sections 8, 18, and 22 U.S.C.)[2]
1. Claim 1: Plaintiff Mandy Meloon’s claim of forced
labor, in violation of 18 U.S.C. §§ 1589(a),
1595(a), and 2255, against Defendant Steven Lopez;
2. Claim 2: Plaintiff Mandy Meloon’s claim of sexual
exploitation, transportation, and illegal sexual activity, in
violation of 18 U.S.C. §§ 2241(c), 2243, 2421,
2422, 2423(a)–(c), and 2255, against Defendant Jean
Lopez;
3. Claim 3: Plaintiff Gaby Joslin’s claim of forced
labor, in violation of 18 U.S.C. §§ 1589(a) and
1595(a), against Defendant Steven Lopez;
4. Claim 4: Plaintiff Gaby Joslin’s claim of forced
labor, in violation of 18 U.S.C. §§ 1589(b) and
1595(a), against Defendant USAT;
5. Claim 5: Plaintiff Gaby Joslin’s claim of
trafficking with respect to forced labor, in violation of 18
U.S.C. §§ 1590(a) and 1595(a), against Defendant
Steven Lopez and Defendant USAT;
6. Claim 6: Plaintiff Gaby Joslin’s claim of sex
trafficking of children, or by force, fraud, or coercion, in
violation of 18 U.S.C. §§ 1591(a)(1) and 1595(a),
against Defendant Steven Lopez and Defendant USAT;
7. Claim 7: Plaintiff Gaby Joslin’s claim of
benefitting from a venture that sex traffics children, or by
force, fraud, or coercion, in violation of 18 U.S.C.
§§ 1591(a)(2) and 1595(a), against Defendant USAT;
8. Claim 8: Plaintiff Amber Means’s claim of forced
labor, in violation of 18 U.S.C. §§ 1589(a),
1595(a), and 2255, against Defendant Steven
Lopez;[3]
9. Claim 9: Plaintiff Amber Means’s claim of forced
labor, in violation of 18 U.S.C. §§ 1589(b) and
1595(a), against the Institutional Defendants;
10. Claim 10: Plaintiff Amber Means’s claim of
trafficking with respect to forced labor, in violation of 18
U.S.C. §§ 1590(a), 1595(a), and 2255, against
Defendant Steven Lopez;
11. Claim 11: Plaintiff Amber Means’s claim of sex
trafficking of children, or by force, fraud, or coercion, in
violation of 18 U.S.C. §§ 1591(a)(1), 1595(a), and
2255, against the Lopez Defendants and the Institutional
Defendants;
12. Claim 12: Plaintiff Amber Means’s claim of
benefitting from a venture that sex traffics children, or by
force, fraud, or coercion, in violation of 18 U.S.C.
§§ 1591(a)(2), 1595(a) and 2255, against the
Institutional Defendants;
13. Claim 13: Plaintiff Amber Means’s claim of sexual
exploitation, transportation, and illegal sexual activity, in
violation of 18 U.S.C. §§ 2242, 2421, 2422,
2423(a)–(c), and 2255, against Defendant Steven Lopez;
14. Claim 14: All Plaintiffs’ claim of obstruction,
attempted obstruction, and interference with enforcement, in
violation of 18 U.S.C. §§ 1590(b), 1591(d),
1595(a), and 2255, against the Institutional Defendants and
SafeSport;[4]
Claim Arising Under the Racketeer Influenced and
Corrupt Organizations Act (“RICO”), 18
U.S.C. §§ 1961–68
15. Claim 15: All Plaintiffs’ claim of violation of
RICO, 18 U.S.C. § 1962(d), against all Defendants;
Claims Arising Under State Common Law
16. Claim 16: All Plaintiffs’ claim of negligent
supervision against the Institutional Defendants;
17. Claim 17: All Plaintiffs’ claim of negligent
retention against the Institutional Defendants;
18. Claim 18: All Plaintiffs’ claim of defamation
against the Lopez Defendants and Defendant USAT;
19. Claim 19: All Plaintiffs’ claim of negligence
against the Institutional Defendants and SafeSport;
20. Claim 20: All Plaintiffs’ claim of gross negligence
against the Institutional Defendants and SafeSport; and
21. Claim 21: All Plaintiffs’ claim of outrageous
conduct against Defendant USOC and SafeSport.
See (id. at 139–84.) Plaintiffs bring
these claims on their own behalf and on behalf of two
proposed nationwide classes: the “Injunction Class,
” defined as “[a]ll USOC-governed female athletes
(subject to the USOC’s ‘commercial terms’
page or any other contract, ” and the “Damages
Class, ” defined as “[a]ll USOC-governed female
athlete[s] (subject to the USOC’s ‘commercial
terms’ page or any other contract[)] . . . who (1)
participated in taekwondo from 2003 to present and (2)
traveled or trained with Jean Lopez, Peter Lopez, or Steven
Lopez.” (Id. at 134.) Plaintiffs later
voluntarily withdrew Claims 1, 2, 6, 7, 11, 12, and 18 (Doc.
# 139 at 3) and dismissed as a defendant SafeSport (Doc. #
223).
On
August 24, 2018, Defendants moved to dismiss
Plaintiffs’ claims pursuant to Federal Rule of Civil
Procedure 12(b)(6). The Lopez Defendants jointly filed a
Motion to Dismiss (Doc. # 106); Defendant USOC filed a
combined Motion to Dismiss and to Strike Class Action
Allegations (Doc. # 108); and Defendant USAT filed a Motion
to Dismiss (Doc. # 109). Plaintiffs responded to all three
motions in an omnibus filing on November 1, 2018. (Doc. #
139.) Two weeks later, Defendants replied in support of their
Motions to Dismiss. (Doc. ## 155, 157, 158.) At Defendant
USOC’s request (Doc. # 175), Magistrate Judge Hegarty
heard oral arguments on Defendant USOC’s Motion to
Dismiss and to Strike on January 23, 2019 (Doc. #
203).[5]
Magistrate
Judge Hegarty issued an exhaustive Recommendation on
Defendants’ Motions to Dismiss on March 6, 2019,
suggesting that the Court grant in part and deny in part the
Motions to Dismiss. (Doc. # 218.) As to Plaintiffs’
TVPA claims, Magistrate Judge Hegarty first examined
“preliminary matters, ” including the applicable
statute of limitations, the definition of “labor”
and “services” in Sections 1589(a) and 1590(a),
and the definition of “venture” in Section
1589(b). (Id. at 12–24.) He then turned to
Defendants’ arguments regarding the sufficiency of
Plaintiffs’ TVPA claims and recommended that the Court
dismiss Claim 5 as alleged against Defendant USAT and Claim
14 as alleged against Defendant USOC. (Id. at
24–46.) Magistrate Judge Hegarty recommended that Claim
15, the claim alleging that Defendants violated RICO, be
dismissed in its entirety. (Id. at 46–54.) He
next assessed Plaintiffs’ state common law claims and
advised the Court to dismiss Claim 16 in its entirety; Claim
17 in its entirety; Claim 19 as alleged against Defendant
USAT; and Claim 20 as alleged against Defendant USAT.
(Id. at 54–66.) Because “Plaintiffs
withdrew the majority of their claims against [Defendant]
Jean Lopez” and he recommended that the RICO claim be
dismissed, Magistrate Judge Hegarty concluded that Defendant
Jean Lopez should be dismissed from the case. (Id.
at 72.) Turning to Defendant USOC’s request to strike
Plaintiffs’ class action allegations pursuant to Rule
12(f) (Doc. # 108 at 25), Magistrate Judge Hegarty
recommended that the Court strike Plaintiffs’ proposed
Damages Class as overbroad. (Doc. # 218 at 69.)
All
parties object to various portions of the Recommendation.
Defendant USOC, the Lopez Defendants, and Defendant USAT
filed separate Objections on March 20, 2019 (Doc. ##
224–26), and Plaintiffs filed an omnibus Response on
April 3, 2019 (Doc. # 233). Plaintiffs also filed an
Objection to the Recommendation on March 20, 2019 (Doc. #
227), to which Defendant USOC and Defendant USAT both
responded on April 3, 2019 (Doc. ## 232–33).
Defendants’ Motions to Dismiss, Magistrate Judge
Hegarty’s Recommendation, and the parties’
Objections are ripe for the Court’s review.
II.
APPLICABLE LEGAL PRINCIPLES
A.
REVIEW OF A RECOMMENDATION
When a
magistrate judge issues a recommendation on a dispositive
matter, Federal Rule of Civil Procedure 72(b)(3) requires
that the district judge “determine de novo any part of
the magistrate judge’s [recommended] disposition that
has been properly objected to.” In conducting its
review of proper objections, “[t]he district judge may
accept, reject, or modify the recommended disposition;
receive further evidence; or return the matter to the
magistrate judge with instructions.” Fed.R.Civ.P.
72(b)(3).
An
objection is properly made if it is both timely and specific.
United States v. One Parcel of Real Property Known As
2121 East 30th Street, 73 F.3d 1057, 1059 (10th Cir.
1996). Parties may not raise in their objections any novel
arguments that they did not raise before the magistrate
judge. Such arguments are deemed waived. Marshall v.
Chater, 75 F.3d 1421, 1426 (10th Cir. 1996); see,
e.g., Stout v. Seitz, No. 17-cv-01904-CMA-STV,
2018 WL 2948222, *4 (D. Colo. June 13, 2013) (declining to
consider arguments regarding dismissal under Rule 12(b)(6)
where the plaintiff raised them for the first time in her
objections to a recommendation).
Where
no party objects to the recommendation of a magistrate judge,
“the district court is accorded considerable discretion
with respect to the treatment of unchallenged magistrate
reports. In the absence of timely objection, the district
court may review a magistrate [judge’s] report under
any standard it deems appropriate.” Summers v.
Utah, 927 F.2d 1165, 1167 (10th Cir. 1991).
B.
DISMISSAL PURSUANT TO RULE 12(B)(6)
Federal
Rule of Civil Procedure 12(b)(6) provides that a defendant
may move to dismiss a claim for “failure to state a
claim upon which relief can be granted.” Fed.R.Civ.P.
12(b)(6). “The court’s function on a Rule
12(b)(6) motion is not to weigh potential evidence that the
parties might present at trial, but to assess whether the
plaintiff’s complaint alone is legally sufficient to
state a claim for which relief may be granted.”
Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th
Cir. 2003) (citations and quotation marks omitted).
“A
court reviewing the sufficiency of a complaint presumes all
of plaintiff’s factual allegations are true and
construes them in the light most favorable to the
plaintiff.” Hall v. Bellmon, 935 F.2d 1106,
1109 (10th Cir. 1991). “To survive a motion to dismiss,
a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the
context of a motion to dismiss, means that the plaintiff
pleaded facts which allow “the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. The Iqbal
evaluation requires two prongs of analysis. First, the court
identifies “the allegations in the complaint that are
not entitled to the assumption of truth, ” that is,
those allegations which are legal conclusions, bare
assertions, or merely conclusory. Id. at
679–81. Second, the Court considers the factual
allegations “to determine if they plausibly suggest an
entitlement to relief.” Id. at 681. If the
allegations state a plausible claim for relief, such claim
survives the motion to dismiss. Id. at 679.
However,
the court need not accept conclusory allegations without
supporting factual averments. S. Disposal, Inc., v. Tex.
Waste, 161 F.3d 1259, 1262 (10th Cir. 1998).
“[T]he tenet that a court must accept as true all of
the allegations contained in a complaint is inapplicable to
legal conclusions. Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice.” Iqbal, 556 U.S. at 678.
“Nor does the complaint suffice if it tenders naked
assertion[s] devoid of further factual enhancement.”
Id. (citation omitted). “Where a complaint
pleads facts that are ‘merely consistent with’ a
defendant’s liability, it ‘stops short of the
line between possibility and plausibility of
‘entitlement to relief.’” Id.
(citation omitted).
III.
DISCUSSION
The
Court addresses the parties’ various objections to
Magistrate Judge Hegarty’s analysis by claim, in
chronological order.
A.
PLAINTIFFS’ TVPA CLAIMS
Of
their TVPA claims, Plaintiffs have withdrawn Claims 1, 2, 6,
7, 11, and 12. (Doc. # 139 at 3.)
1.
Claim 3: Plaintiff Joslin’s claim of forced labor, in
violation of 18 U.S.C. §§ 1589(a) and 1595(a),
against Defendant Steven Lopez
In
Claim 3, pursuant to 18 U.S.C. § 1595(a), Plaintiff
Joslin alleges that Defendant Steven Lopez violated 18 U.S.C.
§§ 1589(a)(2) and (4) by obtaining her “labor
and services”-namely, her “forced sexual
services”-“by means of serious harm” or
threats thereof and “through a scheme, plan, or pattern
intended to cause [her] to believe that, if . . . she did not
perform such labor or services, she would suffer serious harm
or physical restraint.” (Doc. # 68 at 142.) Plaintiff
Joslin asserts that when Defendant Steven Lopez coached her
at a tournament in Bonn, Germany in April 2006, he entered
her hotel room on the night before her first match, turned on
a “graphic pornographic movie, ” “pinned
[her] to the bed, face down, pulled down her pants and
mounted her, ” “penetrated [her], ejaculated
inside her, and left the room.” (Id. at 124.)
Plaintiff Joslin contends that during that incident,
“[i]t was clear . . . that Steven required sex before
he would address his responsibilities as her coach.”
(Id.) She alleges that she “continued to allow
Steven to have sexual intercourse with her” until 2010
“out of fear of the Lopez brothers.”
(Id. at 125.)
Section
1595 provides a civil cause of action for victims of any
crime under Chapter 77, Title 18 of the United States Code.
18 U.S.C. § 1595. Section 1589 prohibits forced labor or
services:
(a) Whoever knowingly provides or obtains the labor or
services of a person by any one of, or by any combination of,
the following means--
(1) by means of force, threats of force, physical restraint,
or threats of physical restraint to that person or another
person;
(2) by means of serious harm or threats of serious harm to
that person or another person;
(3) by means of the abuse or threatened abuse of law or legal
process; or
(4) by means of any scheme, plan, or pattern intended to
cause the person to believe that, if that person did not
perform such labor or services, that person or another person
would suffer serious harm or physical restraint, shall be
punished as provided under subsection (d).
18 U.S.C. § 1589(a). “One can violate the statute
either as a primary offender” under Section 1589(a)
“or simply by benefitting financially from
participation in a ‘venture’ with the primary
offender” under Section 1589(b). Bistline v.
Parker, 918 F.3d 849, 871 (10th Cir. 2019). In Claim 3,
Plaintiffs allege that Defendant Steven Lopez was the primary
offender and is liable pursuant to Section 1589(a).
The
Lopez Defendants moved to dismiss Claim 3 on the grounds that
it is “barred by the statute of limitations, as well as
the plain meaning of the statute, ” and that Plaintiffs
“fail to adequately allege that they were forced to
provide any labor or services.” (Doc. # 106 at
6–10.)
a.
Magistrate Judge Hegarty’s Recommendation
Magistrate
Judge Hegarty recommended that “the Lopez
Defendants’ Motion to Dismiss Claim 3 be denied.”
(Doc. # 218 at 29.) As to the statute of limitations,
Magistrate Judge Hegarty discussed the applicable statute of
limitations for all TVPA claims in his analysis of
“preliminary matters.” (Id. at
12–16.) The parties’ dispute over the applicable
limitations period is rooted in the legislative history of
the TVPA, which Magistrate Judge Hegarty summarized:
Congress originally passed the Victims of Trafficking and
Violence Protection Act in 2000. This Act created only
criminal penalties for conduct currently prohibited in 18
U.S.C. §§ 1589 and 1590. In 2003,
Congress amended the Act to add a private right of
action for victims of violations of §§
1589, 1590, or 1591 at § 1595. At the
time, the statute carried a four-year limitations
period for filing civil actions. Congress
amended the TVPA’s limitations period to ten
years on December 23, 2008.
(Id. at 12–13) (emphasis added) (internal
citations omitted). Persuaded by the logic of the Court of
Appeals for the Fourth Circuit in Cruz v. Maypa, 773
F.3d 138, 145 (4th Cir. 2014), Magistrate Judge Hegarty
concluded:
Any of Plaintiffs’ TVPA claims that were unexpired when
Congress amended the Act [on December 23, 2008] to include a
ten-year limitations period are timely to the extent they
fall within ten years of the filing the First Amended
Complaint [(May 4, 2018)].
(Doc. # 218 at 13–15.) As applied to Claim 3,
Magistrate Judge Hegarty reasoned that Plaintiff
Joslin’s claim is timely “because some of the
alleged sexual conduct occurred after May 4, 2008.”
(Id. at 27.)
Magistrate
Judge Hegarty then found that the SAC “plausibly
alleges [Defendant] Steven Lopez] obtained [Plaintiff
Joslin’s] services via means prohibited in [Section]
1589(a)(1)–(4).” (Id. at 27–29.)
He had previously explained in his discussion of preliminary
matters that “labor and services, ” as used in
Sections 1589(a) and 1590(a), covers coerced sexual acts such
as the “pay-to-play sexual acts alleged in the
SAC.” (Id. at 16–18) (citing United
States v. Kaufman, 546 F.3d 1242, 1259–63 (10th
Cir. 2008)). As to Claim 3, he determined that only Section
1589(a)(2), which concerns “serious harm or threats of
serious harm” to the person providing the labor or
services or to another person, “could potentially
support [Plaintiff Joslin’s] claim.”
(Id. at 27.) After reviewing the statutory
definition of “serious harm, ” relevant case law,
and Plaintiffs’ allegations, Magistrate Judge Hegarty
concluded that because “no Defendant in this case
argues that the alleged ‘serious harm’ is
insufficient as a matter of law to support a claim under the
TVPA” and because no party had presented him with (nor
had he found) “binding law identifying the
‘minimum for conduct that is actionable under the TVPA,
’” Plaintiff Joslin’s allegations in Claim
3 are sufficiently plausible to survive the Lopez
Defendants’ Motion to Dismiss. (Id. at
28–29.)
b.
Objections to the Recommendation and the Court’s
Review
The
Lopez Defendants reprise two arguments in their Objection
that they previously made in their Motion to Dismiss: that
Claim 3 is barred by the statute of limitations “that
existed at the time that [the claim] arose” and that
Plaintiffs fail to state a claim upon which relief can be
granted. (Doc. # 225 at 4–11.)
i.
Statute of Limitations for TVPA Claims
The
Court concludes that for Claim 3 and Plaintiffs’ other
TVPA claims, the TVPA’s existing ten-year statute of
limitations applies-even to claims based on conduct that
allegedly occurred when the TVPA had a four-year limitations
period (before December 23, 2008), so long as the claim had
not yet been barred by the four-year limitation when the
ten-year limitation was passed into law. It thus affirms
Magistrate Judge Hegarty’s assessment of the statute of
limitations applicable to Plaintiffs’ TVPA claims and
rejects the Lopez Defendants’ argument that Claim 3 is
time barred.
Like
Magistrate Judge Hegarty, the Court is persuaded by the
Fourth Circuit’s reasoning in Cruz. The
plaintiff in Cruz alleged that she was forced to
work for the defendants at well-below minimum wages from 2002
until she escaped in January 2008. 773 F.3d at 141. At the
time the alleged conduct took place (2002 until January
2008), the TVPA was governed by a four-year statute of
limitations. Id. at 143–44. On December 23,
2008, Congress amended the TVPA to include a ten-year statute
of limitations. Id. The plaintiff filed the lawsuit
on July 16, 2013, alleging violations of Sections 1589 and
1590, among other claims. Id. at 142–43. The
district court dismissed all the claims as time-barred.
Id. at 143. The plaintiff argued on appeal to the
Fourth Circuit that her TVPA claims should be subject to the
ten-year statute of limitations enacted in 2008. Id.
The defendants asserted that application of the TVPA’s
ten-year limitation period, enacted after the alleged
conduct, would be impermissibly retroactive. Id.
The
Fourth Circuit held that “applying the [TVPA’s]
extended limitations period to claims that were unexpired at
the time of its enactment”-December 23,
2008-“does not give rise to an impermissible
retroactive effect.” Id. at 145. To reach that
conclusion, the Fourth Circuit applied the “framework
for determining whether a statute applies retrospectively to
pre-enactment conduct” that is set forth in
Landgraf v. USI Film Products, 511 U.S. 244 (1994).
773 F.3d at 144–45. At the second step of the
Landgraf framework, determining whether the statute
would operate retroactively, the Fourth Circuit looked to a
previous case in which it had applied the Landgraf
framework to a limitations period extension in the
Veterans’ Benefit and Improvement Act, enacted after
the plaintiff’s claims had expired under the old
statute of limitations, and found that the new, extended
statute of limitations would have an impermissible
retroactive effect if applied to the plaintiff’s
expired claims. Id. (citing Baldwin v. City of
Greensboro, 714 F.3d 828, 837 (4th Cir. 2013)). Its
holding in that case “suggest[ed] a distinction between
expired claims and claims that were alive when the new
limitations period was enacted.” Id. at 145.
The Fourth Circuit explained this distinction “makes
sense for two reasons:” first, because “applying
a new limitations period to unexpired claims does not
‘attach new legal consequences to events completed
before its enactment’” but “rather merely
prolongs the time during which legal consequences can occur,
” and second, because, “in the criminal context,
there is a consensus that extending a limitations period
before prosecution is time-barred does not run afoul of the
Ex Post Facto Clause of the Constitution.” Id.
Accordingly,
the Fourth Circuit rejected the defendants’ argument
that applying the TVPA’s extended limitations period to
claims that were unexpired at the time of its extension was
impermissibly retroactive. Id. Whether the
plaintiff’s TVPA claims could proceed, it continued,
would depend “on whether they were still alive under
the old four-year statute of limitations period when Congress
enacted the new statute of limitations on December 23,
2008.” Id. Because that date was more than
four years after the plaintiff began working for the
defendants, the Fourth Circuit remanded the case to the
district court to determine whether the plaintiff’s
TVPA claims warranted equitable tolling “until December
23, 2004, four years before” Congress extended the
TVPA’s limitations period. Id. at 146.
Numerous
other courts, including one in this jurisdiction, have
reached similar conclusions that TVPA’s ten-year
statute of limitations applies if the plaintiff’s
claims were alive when Congress amended the TVPA on December
23, 2008, to lengthen the statute of limitations. See,
e.g., Camayo v. John Peroulis & Sons Sheep,
Inc., Nos. 10-cv-00772, 11-cv-001132, 2013 WL 3927677,
*2 (D. Colo. July 20, 2013); Lama v. Malik, 192
F.Supp.3d 313, 322–23 (E.D.N.Y. 2006) (collecting
cases). But see Abarca v. Little, 54 F.Supp.3d 1064
(D. Minn. 2014).
The
Court adopts the reasoning of the Fourth Circuit and rejects
the Lopez Defendants’ argument that applying the
ten-year limitations period to Claim 3 and Plaintiffs’
other TVPA claims is an “improper retroactive
application under Landgraf because it involves the
creation of additional liability for Steven Lopez.”
(Doc. # 225 at 8.) Claim 3 was not expired on December 23,
2008, when Congress extended the TVPA limitations period to
ten years. By applying the ten-year statute of limitations,
the Court does not expose Defendant Steven Lopez to any new
legal consequences; it “merely prolongs the time during
which legal consequences can occur.” 773 F.3d at 145;
see also Camayo, 2013 WL 3927677 at *2 (holding that
the amendment of TPVA’s statute of limitations
“did not . . . change the Defendants’ rights or
impose any substantive burden on them;” it
“merely extended the time in which a plaintiff may
assert claims for violations of already-existing
rights.”). This does not amount to an impermissible
retroactive effect. Under TVPA’s ten-year limitations
period, Claim 3 is timely. The Court affirms Magistrate Judge
Hegarty’s conclusion on this point.
The
Lopez Defendants’ Objection does not persuade the Court
otherwise.[6] The Lopez Defendants attempt to
distinguish Cruz from their case by describing the
Fourth Circuit as “carv[ing] out a narrow distinction
to the rule against retroactivity for claims to which an
‘equitable tolling’ basis existed, to distinguish
the claims as ‘unexpired.’” (Doc. # 225 at
7.) In this case, they contend, “Plaintiffs are not
entitled to the remedy of equitable tolling” because
“the facts that existed in Cruz to justify
equitable tolling do not exist in the present case.”
(Id.) That completely mischaracterizes the Fourth
Circuit’s opinion in Cruz and
Plaintiffs’ theory of this case. Notably, the Fourth
Circuit did not consider the doctrine of equitable tolling
until after it had concluded that
“applying the [TVPA’s] extended limitations
period to claims that were unexpired at the time of its
enactment does not give rise to an impermissible retroactive
effect.” Only after so concluding did it address
equitable tolling to determine whether the plaintiff’s
TVPA claims were unexpired under the previous four-year
limitations period when Congress extended the limitations
period to ten years on December 23, 2008. Cruz, 773
F.3d at 145. In this case, there is no question that Claim 3
was unexpired when Congress amended TVPA’s statute of
limitations in late 2008. The Court agrees with Plaintiffs
that they “do not assert-nor do they need to-that the
limitations period for their claims should be equitably
tolled.” (Doc. # 231 at 17.)
For the
foregoing reasons, the Court affirms Magistrate Judge
Hegarty’s conclusion that Claim 3 is not time-barred.
ii.
Sufficiency of Factual Allegations
Seeing
no clear error in his analysis, the Court affirms Magistrate
Judge Hegarty’s determination that Plaintiffs’
Claim 3 plausibly alleges a claim against Defendant Steven
Lopez. See (Doc. # 218 at 29); Summers, 927
F.2d at 1167.
In
their Objection, the Lopez Defendants state that
“Plaintiffs’ TVPA claims, ” Claims 3, 5, 8,
10, and 13, "are not sufficiently pled” because
the SAC is “long on conclusory allegations and utterly
devoid of the requisite factual specificity.” (Doc. #
225 at 10.) The Lopez Defendants did not raise this argument
in their Motion to Dismiss. Rather, they argued therein that
Claim 3 must be dismissed for failure to state a claim
because Plaintiffs did not adequately allege “that they
were forced to provide any labor or services” to the
Lopez Defendants. (Doc. # 106 at 8.) According to the Lopez
Defendants’ Motion to Dismiss, Plaintiffs
“voluntarily remained” on the national taekwondo
team and their alleged sexual conduct was “their
contributions to [D]efendants USOC and/or USAT.” (Doc.
# 106 at 8.) Because the Lopez Defendants did not previously
argue that Claim 3 makes only conclusory statements and is
devoid of factual allegations, this argument is deemed
waived. See Marshall, 75 F.3d at 1426.
Moreover,
the Lopez Defendants’ objection that Plaintiffs’
TVPA claims are not sufficiently pled is improper due to lack
of specificity; it fails to even mention Magistrate Judge
Hegarty’s analysis of the sufficiency of Claim 3.
See (Doc. # 225 at 10–11.) Because their
objection is not properly made, the Court reviews the part of
the Recommendation to which they object under a clear error
standard. See Summers, 927 F.2d at 1167. Finding no
clear error, the Court affirms this portion of the
Recommendation.
In sum,
the Court is satisfied upon its de novo review that
Magistrate Judge Hegarty correctly concluded that Claim 3 is
timely and is adequately pled. The Court thus denies the
Lopez Defendants’ Motion to Dismiss Claim 3.
2.
Claim 4: Plaintiff Joslin’s claim of forced labor, in
violation of 18 U.S.C. §§ 1589(b) and 1595(a),
against Defendant USAT
Claim 4
alleges that Defendant USAT is liable under Section 1589(b)
because it “knowingly benefitted from participation in
a venture with [Defendant] Steven Lopez, knowing or in
reckless disregard of the fact that the venture was engaging
in the . . . obtaining of [Plaintiff Joslin’s] labor or
services by means of . . . serious harm or threats of serious
harm.” (Doc. # 68 at 143.) Plaintiff Joslin asserts
that she “reported Defendant Steven Lopez’s
abuse” to Defendant USAT. (Id.) Defendant USAT
benefitted from Defendant Steven Lopez’s conduct,
Plaintiffs continue, “by collecting money through
sponsorships, grants, and for medals achieved at
competitions, and for his recruitment and training of other
elite taekwondo athletes, despite indications that
[Plaintiff] Joslin was being abused and raped.”
(Id. at 144.)
As the
Court stated above, pursuant to Section 1589(b), one can be
liable for violation of Section 1589’s prohibition on
forced labor or services “simply by benefitting
financially from participation in a ‘venture’
with the primary offender.” Bistline, 901 F.3d
at 871. Section 1589(b) provides:
(b) Whoever knowingly benefits, financially or by receiving
anything of value, from participation in a venture which has
engaged in the providing or obtaining of labor or services by
any of the means described in subsection (a), knowing or in
reckless disregard of the fact that the venture has engaged
in the providing or obtaining of labor or services by any of
such means, shall be punished as provided in subsection (d).
18 U.S.C. § 1589(b). The term “venture”
“has not be defined in the context of [Section]
...