Davila Calixto v. Acosta

• Court: District Court, District of Columbia
• Decided: March 24, 2021
• Docket: Civil Action No. 2019-1853
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

JOEL DAVILA CALIXTO, et al., Plaintiffs,

v. Civil Action No. 19-1853 (CKK) MARTIN J. WALSH, in his official capacity as United States Secretary of Labor, 1 et al.,

Defendants.

MEMORANDUM OPINION (March 24, 2021)

Plaintiffs Joel Davila Calixto, Hector Hernandez Gomez, Leonardo Aviles Romero, Hilario

Olvera Gutierrez, and Jorge Palafox Juarez worked as seasonal laborers in the H-2B nonimmigrant

visa program in 2013. Compl. ¶¶ 4–8, ECF No. 1. Plaintiffs contend that they are owed increased

wages for the services they performed pursuant to a rule issued by the Department of Labor

(“DOL”) in 2013 revising the methodology for calculating wages for H-2B workers.

Before the Court is Plaintiffs’ [26] Motion for Leave to File an Amended and Supplemental

Complaint pursuant to Federal Rules of Civil Procedure 15(a)(2) and 15(d). Defendants oppose

Plaintiffs’ Motion, contending that the claims asserted by Plaintiffs in their Amended Complaint

are futile. Upon review of the pleadings, 2 the relevant legal authority, the record as a whole, the

Court shall GRANT Plaintiffs’ Motion.

1 Under Federal Rule of Civil Procedure 25(d), Martin J. Walsh, U.S. Secretary of Labor is substituted as a defendant in this case. 2 The Court’s consideration has focused on the following: Plaintiffs’ Motion for Leave to File an Amended and Supplemental Complaint (“Pls.’ Mot.”), ECF No. 26; Defendants’ Opposition to Plaintiffs’ Motion for Leave to File an Amended and Supplemental Complaint (“Defs.’ Opp’n”), ECF No. 27; and Plaintiffs’ Reply Memorandum in Further Support of Motion for Leave to File an Amended and Supplemental Complaint (“Pls.’ Reply”), ECF No. 28. The Court has also 1 I. BACKGROUND

Plaintiffs are Mexican nationals who worked in seasonal employment in the United States

in 2013 as part of the H-2B nonimmigrant visa program. Compl. ¶¶ 4–8, ECF No. 1. Employers

seeking to participate in the H-2B are required to obtain labor certifications from the Secretary of

Labor, which, among other issues, determine the “prevailing wage” tha H-2B workers must be

paid. See Pls.’ Mot. at 4.

In 2013, DOL revised its methodology for prevailing wage calculations, vacating an earlier

2008 methodology. See Wage Methodology for the Temporary Non-Agricultural Employment

H-2B Program, Part 2, 78 Fed. Reg. 24,047 (Apr. 24, 2013) (“2013 IFR”). The 2013 IFR noted

that under the vacated 2008 methodology, H-2B workers were being underpaid. Id. at 24,056; see

also Defs.’ Opp’n at 6 (“The 2013 IFR’s methodology generally resulted in higher prevailing

wages than under the 2008 Methodology[.]”). The 2013 IFR became “effective immediately” and

applied to “all requests for prevailing wage determinations and applications for [certifications] in

the H-2B program issued on or after the effective date of this interim rule.” 78 Fed. Reg. at 24,055.

DOL then issued “supplemental prevailing wage determinations” (SPWDs) to H-2B employers—

including Plaintiffs’ employers—who had obtained certifications in 2013 based on the vacated

wage methodology.

Plaintiffs participated in the H-2B visa program in 2013. Compl. ¶¶ 4–8. In June and July

2013, Plaintiffs’ employers received SPWDs based on the revised methodology set forth in the

2013 IFR. Id. ¶¶ 20–22. Plaintiffs claim that the wages rates set forth in the SPWDs exceeded the

wages they were paid; in other words, they were owed more wages than they received for their

reviewed Plaintiffs’ Notices of Supplemental Authority, see ECF Nos. 29, 31, and 32, and the parties’ response to the Court’s March 18, 2021 Minute Order, see ECF No. 33.

2 work in 2013. Id. ¶¶ 20–22. Each of Plaintiffs’ employers sought “redetermination” by DOL of

the SPWDs issued to them. Id. ¶ 26.

As the result of a separate administrative challenge by an employer who had received an

SPWD with the revised wage methodology, DOL’s Board of Alien Labor Certification Appeals

(BALCA) issued a decision concluding that DOL lacked the authority to issue the SPWDs to

employers whose H-2B certifications for 2013 had already been approved based on the vacated

prevailing wage methodology. See Island Holdings LLC, 2013-PWD-00002 (BALCA Dec. 3,

2013) (“Island Holdings”); Defs.’ Opp’n at 7–8.

On December 17, 2014, the Secretary of Labor issued a “Notice of Intent to Issue

Declaratory Order, 79 Fed. Reg. at 75,179 (Dec. 17, 2014) (“Notice of Intent”), proposing to

“issu[e] a declaratory order to overrule the BALCA’s decision and legal conclusions in Island

Holdings” and to “eliminate the confusion and uncertainty” that decision had created about the

application of the 2013 IFR to employers who had obtained H-2B certifications for 2013 prior to

the promulgation of the revised methodology. See id. at 75,183. After the comment period for the

Notice of Intent ended, the Secretary of Labor took no further action with respect to the proposed

declaratory order. Compl. ¶ 34; Defs.’ Opp’n at 9. Approximately 1,000 SPWD administrative

appeals—including those of Plaintiffs’ employers—remained pending. Defs.’ Opp’n at 9.

At the time Plaintiffs filed their Complaint in June 2019, no decision had been issued on

their employers’ requests for redetermination of the SPWDs they received in 2013 and Plaintiffs

had still not received “back wages to account for the difference between the SPWD wage rate and

the wage they actually paid in 2013.” Compl. ¶ 27. Plaintiffs alleged in their Complaint that

DOL’s “delay” in “giv[ing] effect” to the wage rates set forth in the 2013 SPWDs requests was

“unreasonable” agency action under section 706(1) the APA. Id. ¶¶ 42–44. Plaintiffs also alleged

3 that DOL’s “ongoing stay of action” with respect to their review of the employers’ requests for

redetermination of the 2013 SPWDs was “arbitrary and capricious.” Id. ¶¶ 46–48.

Defendants moved to dismiss Plaintiff’s complaint on September 26, 2019, arguing, among

other reasons, that the Court lacked jurisdiction because “DOL agrees with Plaintiffs’ position on

SPWD” (referring to DOL’s December 2014 “Notice of Intent”) and therefore there was no case

or controversy between the parties. See Defs.’ Mot. to Dismiss at 13–14, ECF No. 13. Plaintiffs

then filed a cross-motion for summary judgment on November 4, 2019. See Pl.’s Mot. for Summ.

J., ECF No. 16. Defendants requested three extensions of time to respond to Plaintiffs’ summary

judgment motion, indicating that DOL was “considering potential administrative action that would

result in the resolution of the issues raised in Plaintiff’s complaint,” and later that DOL would

“resume processing of the employer challenges to the [SPWD] determinations that were issued to

Plaintiffs’ employers . . . in 2013[,]” and would “issue a decision concerning the employers’

challenges to the wage rates contained in the 2013 SPWDs to complete [DOL’s] administrative

review.” See ECF Nos. 18, 19, 20. 3

On March 9, 2020, Defendants filed a [22] Notice, indicating that the agency had “issued

final determinations on the employer appeals” at issue in Plaintiffs’ Complaint. See Notice ¶ 3,

ECF No. 22. These determinations indicated that “the increased wage obligation that the [2013]

SPWD purported to impose [are] now vacated.” See Notice Ex. 4, ECF No. 24-5.

These determinations cited a “Notice of Withdrawal” issued by the Secretary of Labor

effective March 9, 2020, which withdrew the earlier Notice of Intent. See Withdrawal of Notice

3 On December 30, 2019, Defendants’ counsel informed Plaintiffs’ counsel by email that “within the next few weeks, DOL will lift the stay of action in the pending 2013 SPWD employer appeals in this case (as well as the 1,000+ other appeals). Shortly thereafter, the Administrator will issue a decision affirming the wage rates contained in the 2013 SPWDs.” See Pls.’ Opp’n to Mot. for Extension ¶ 4, ECF No. 21; id. Ex 1 (Decl. of Adam Pulver).

4 of Intent to Issue a Declaratory Order (March 13, 2020), 85 Fed. Reg. 14,706 (“Notice of

Withdrawal”). In the Notice of Withdrawal, DOL found that BALCA’s Island Holdings decision

“sets forth the better view of the law” and that the 2013 SPWDs were “inconsistent” with DOL’s

regulations and the purpose of the H-2B program. Id. at 14,709.

In light of these “drastically changed circumstances,” the Court denied without prejudice

Defendants’ [13] Motion to Dismiss and Plaintiffs’ [16] Motion for Summary Judgment. See Mar.

12, 2020 Minute Order. The Court set a briefing schedule for Plaintiffs’ proposed motion for leave

to amend their complaint, and directed the parties to address in their briefing “whether or not

Plaintiffs’ current Complaint has been made moot by Defendants’ decision” and “if so, what effect

the mootness has on Plaintiffs’ request to file an Amended Complaint.” Id.

II. LEGAL STANDARD

Plaintiffs seek leave to amend and supplement their complaint. Pursuant to Federal Rule

of Civil Procedure 15(a), a party may “amend its pleading after a responsive pleading has been

served only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ. P.

15(a)(2). Pursuant to Federal Rule of Civil Procedure 15(d), on “motion and reasonable notice, a

court may, on just terms, permit a party to supplement its pleadings to set out any transaction,

occurrence or event that happened after the date of the pleading to be supplemented.” Fed .R. Civ.

P. 15(d). Motions to amend under Rule 15(a) and motions to supplement under Rule 15(d) are

subject to the same standard. See Wildearth Guardians v. Kempthorne, 592 F. Supp. 2d 18, 23

(D.D.C 2008).

The decision to grant leave to amend or supplement a complaint lies within the discretion

of the district court, but leave “should be freely given unless there is a good reason, such as futility,

to the contrary.” Willoughby v. Potomac Elec. Power Co., 100 F.3d 999, 1003 (D.C. Cir.1996)

5 (internal citations omitted); see also Foman v. Davis, 371 U.S. 178, 182 (1962) (“If the underlying

facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be

afforded an opportunity to test his claim on the merits.”). “In the absence of any apparent or

declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant,

repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the

opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave

sought should, as the rules require, be ‘freely given.’” Foman, 371 U.S. at 182.

III. DISCUSSION

A. Mootness of the Original Complaint

The Court shall first discuss the parties’ arguments in response to the Court’s order

directing the parties to address whether “Plaintiffs’ current Complaint has been made moot by

Defendants’ decision” and “if so, what effect the mootness has on Plaintiffs’ request to file an

Amended Complaint.” Mar. 12, 2020 Minute Order.

Defendants argue that Plaintiffs’ original complaint is moot and should be dismissed

because DOL has resolved Plaintiffs’ employers’ SPWD appeals, so there is no further relief that

the Court can grant Plaintiffs based on their original claims. Defs.’ Opp’n at 13, 15. Plaintiffs

concede that their claims challenging DOL’s delayed response to their employers’ SPWD appeals

and its stay of reviewing those appeals were mooted by DOL’s March 2020 determinations. See

Pls.’ Opp’n. at 20. Plaintiffs, however, contend, that there is still a live controversy between the

parties because DOL was required to “impose on employers an obligation to pay workers the

revised prevailing wage” and has continued to “withhold[ ] this lawfully required action.” Id. The

Court agrees with Plaintiffs that there appears to be a “live controversy” between the parties

regarding DOL’s obligations under the 2013 IFR.

6 Moreover, dismissal of Plaintiffs’ original complaint is not required even if some of the

claims are now moot. In Dynalantic Corp. v. Dep’t of Defense, for example, the D.C. Circuit

granted the plaintiff’s request to amend its complaint after the government canceled the specific

procurement challenged by the plaintiff. 115 F.3d 1012, 1015 (D.C. Cir. 1997). The court

reasoned that allowing the plaintiff to amend its pleadings to raise a challenge to the procurement

program as a whole was “only fair, given the government’s switch of position after appellant had

filed its opening brief.” Id. The Court finds that the circumstances here are similar to those

discussed in the D.C. Circuit’s Dynalantic decision, including that the government’s own actions

after Plaintiffs commenced this lawsuit made Plaintiffs’ claims “arguably moot.” Id. at 1015.

Accordingly, the mootness of Plaintiffs’ original claims does not automatically foreclose the Court

from allowing Plaintiffs’ leave to amend their complaint. See id.

B. Plaintiffs’ Proposed Amended Complaint

Defendants’ arguments opposing Plaintiff’s motion for leave to amend and supplement

their complaint are based solely on the “futility” of Plaintiffs’ request. See Defs.’ Opp’n at 15.

Defendant does not raise “undue delay, bad faith or dilatory motive on the part of the movant,

repeated failure to cure deficiencies by amendments previously allowed, [or] undue prejudice to

the opposing party by virtue of allowance of the amendment,” Foman, 371 U.S. at 182, as a basis

for denying Plaintiff’s motion. “Review for futility is practically ‘identical to review of a Rule

12(b)(6) dismissal based on the allegations in the amended complaint.’” Banner Health v. Burwell,

55 F. Supp. 3d 1, 8 (D.D.C. 2014) (quoting In re Interbank Funding Corp. Secs. Litig., 629 F.3d

213, 215–16 (D.C. Cir. 2016)). Plaintiffs propose to amend or supplement their complaint by

modifying their existing two counts and bringing a third count under the APA.

7 In Count One of their original complaint, Plaintiffs alleged that the 2013 IFR required DOL

to “to impose on an employer an obligation to pay workers the revised prevailing wage.” Compl.

¶ 40. Plaintiffs, therefore, challenged under APA § 706(1) Defendants’ “delay in giving effect to

the wage rates set forth in the 2013 SPWDs” as “unreasonable” and in violation of “both the INA’s

statutory mandate and the [2013 IFR].” Id. ¶¶ 41, 42. Specifically, Plaintiffs contended that

Defendants’ “delay in resolving the administrative reviews” pending since 2014 was

“unreasonable.” Id. ¶ 41, 43. In their Amended Complaint, Plaintiffs would remove their

allegation that Defendants’ “delay” in resolving the administrative appeals was “unreasonable”

under the APA. See id. ¶ 43. Plaintiffs concede that this claim is moot because DOL resolved

Plaintiffs’ employers’ appeals in March 2020. See Pls.’ Mot. at 20–21. Instead, Plaintiffs—in

light of the March 2020 determinations vacating the 2013 SPWDs issued to their employers—

would challenge as “unlawful” Defendants’ failure to “issue final [SPWDs] reflecting the

prevailing methodology in the [2013 IFR].” Am. Compl. ¶ 59, ECF No. 26-1. This allegation

rests on the same rationale in the original complaint that DOL was required to impose on H-2B

employers the revised prevailing wage rates and failed to do so. See Am. Compl. ¶ 58; see also

Pls.’ Reply at 5–6. For purposes of this Motion, the Court finds that Plaintiffs’ proposed amended

Count I is not futile and challenges to its merits may be raised through later dispositive motions

In Count Two of their original complaint, Plaintiffs alleged that Defendants’ “ongoing stay

of action with respect to the 2013 SPWDs” was “arbitrary and capricious” under APA § 706(2).

Compl. ¶¶ 45–47. Recognizing that DOL’s resolution of the employers’ appeals rendered moot

their challenge to DOL’s “stay” of the appeals, see Pls.’ Mot. at 20–21, Plaintiffs remove this

allegation from their proposed Amended Complaint. Instead, they seek to challenge as “arbitrary

and capricious” the March 9, 2020 Notice of Withdrawal. Am. Compl. ¶¶ 63–65. Plaintiffs

8 contend that DOL’s reversal of its earlier Notice of Intent and decision to “accept” BALCA’s

decision in Island Holdings constitutes “final agency action” and is “contrary” to the 2013 IFR.

Id. ¶ 65.

Defendants argue that this proposed change to Count Two is futile because the Secretary’s

March 9, 2020 Notice of Withdrawal was an exercise of discretionary authority and is not a “final

agency action” because it merely “reiterate[d]” BALCA’s earlier decision in Island Holdings, but

did not determine rights or obligations or have legal consequences. Defs.’ Opp’n at 19–20.

Plaintiffs reply that the Notice of Withdrawal “adopt[ed] the Island Holdings decision as DOL’s

position for the very first time,” noting, for example, that DOL previously represented in other

litigation that the Island Holdings decision did not represent DOL’s “legal or policy position.”

Pls.’ Reply at 9–10 (citing DOL briefs in Comité de Apoyo a Los Trabajadores Agricolas v. Perez,

46 F. Supp. 3d 550, 555 (E.D. Pa. 2014); Gonzalez-Aviles v. Perez, No. JFM-15-3463, 2016 WL

3440581 (D. Md. June 17, 2016) (“The BALCA decision does not represent a ‘final decision’ of

the Department of Labor.”)). Rather, according to Plaintiffs, the decision in Island Holdings was

merely a resolution of that particular case until DOL adopted it as the agency’s policy through the

Notice of Withdrawal. Id. at 10. The Court finds that Defendants have not demonstrated at this

time that Plaintiffs’ proposed changes to Count II are necessarily futile.

Plaintiffs also seek to supplement their Complaint by adding a third cause of action under

APA § 706(2). In their supplemental Count Three, Plaintiffs allege that DOL’s March 9, 2020

determinations vacating their employers’ 2013 SPWDs were “unlawful” because “the operative

regulations did not provide plaintiffs’ employees with the right to seek administrative review on

the ground that they disagreed with the agency’s authority to issue SPWDs” and because “the

letters . . . expressly relied on the arbitrary, capricious, and unlawful Secretary’s March 9 Order.”

9 Am. Compl. ¶¶ 67–69. Defendants argue that this supplemental claim cannot survive a motion to

dismiss because Plaintiffs lack standing to challenge the determinations issued by DOL to

Plaintiffs’ employers resolving their administrative appeals. Defs.’ Opp’n at 21. Specifically,

Defendants contend that a “declaration from the Court” that the agency’s March 9, 2020

determinations were “arbitrary and capricious” would not redress Plaintiffs’ injuries because

Plaintiffs’ “ability to actually collect any wages” from their employers “would be speculative at

best.” Id. at 21–22. Plaintiffs counter that “vacatur” of DOL’s determinations to their employers

would redress their injuries, essentially by reinstating the 2013 SPWDs, which, according to

Plaintiffs, were required by the 2013 IFR and would result in Plaintiffs being paid the higher wage

rate. Pls.’ Reply at 12. They also contend that their employers’ determinations were based on the

“arbitrary and capricious” reversal of DOL’s policy found in the Notice of Withdrawal. Id. The

Court shall allow Plaintiffs to supplement their Complaint by adding this new third cause of action.

Upon the current record, Defendants have not demonstrated that this new claim is necessarily

futile, as the relief requested by Plaintiffs would reinstate the 2013 SPWDs, which they contend

entitle them to higher wages. The merits of this argument shall be left for later dispositive motions.

IV. CONCLUSION

For the foregoing reasons, the Court shall GRANT Plaintiffs’ Motion for Leave to File an

Amended and Supplemental Complaint. An appropriate Order accompanies this Memorandum

Opinion.

/s/ COLLEEN KOLLAR-KOTELLY United States District Judge