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6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT TACOMA 8 9 UGOCHUKWU GOODLUCK CASE NO. C17-5769 RJB NWAUZOR, et al., 10 Plaintiffs, 11 v. 12 THE GEO GROUP, INC., 13 Defendant. STATE OF WASHINGTON, CASE NO. C17-5806RJB 14 Plaintiff, 15 v. ORDER ON STATE’S MOTION TO STRIKE GEO’S JURY DEMAND 16 THE GEO GROUP, INC., AND PROCEDURAL ORDER
17 Defendant.
19 THIS MATTER comes before the Court on State of Washington’s Motion to Strike 20 Defendant The GEO Group, Inc.’s (“GEO”) Jury Demand. Dkt. 342. The Court has considered 21 the motion, documents in support of and in opposition to the motion, oral argument heard on 10 22 January 2020, and the remaining file. 23 24 1 This case arises around GEO’s alleged failure to adequately pay immigration detainees 2 participating in the Voluntary Work Program (“VWP”) at its facility, the Northwest Detention 3 Center. Dkt. 1-1. 4 The State makes two claims against GEO for: (1) violation of Washington’s Minimum 5 Wage Act (“MWA”), RCW 49.46, et. seq. and (2) unjust enrichment. As relief for the MWA
6 violations, the State seeks declaratory relief that GEO violated the MWA and injunctive relief 7 that GEO be enjoined from compensating detainees below the minimum wage. Dkt. 1-1. For 8 the unjust enrichment claim, the State seeks relief in the form of disgorgement of profits. Dkt. 1- 9 1. In its defense, GEO asserts that it is protected by intergovernmental immunity, derivative 10 sovereign immunity, and asserts other defenses to the MWA claim. 11 Washington now moves to strike GEO’s jury demand, arguing that GEO has no right to a 12 jury trial on Washington’s equitable claims. Dkt. 342. GEO opposes the motion. Dkt. 344. 13 DISCUSSION 14 “The Seventh Amendment preserves the right to trial by jury of all legal claims, whereas
15 no right to a jury exists for equitable claims. Danjaq LLC v. Sony Corp., 263 F.3d 942, 962 (9th 16 Cir. 2001). “Maintenance of the jury as a fact-finding body is of such importance and occupies 17 so firm a place in our history and jurisprudence that any seeming curtailment of the right to a 18 jury trial should be scrutinized with the utmost care.” Chauffeurs, Teamsters & Helpers, Local 19 No. 391 v. Terry, 494 U.S. 558, 565 (1990). 20 To determine whether a case will resolve legal rights, courts (1) “compare the statutory 21 action to 18th-century actions brought in the courts of England prior to the merger of the courts of 22 law and equity;” and (2) “examine the remedy sought and determine whether it is legal or 23 equitable in nature.” Chauffeurs, at 565. The second inquiry is the most important. Id. 24 1 The Declaratory Judgment Act “preserves the right to jury trial for both parties.” Beacon 2 Theatres, Inc. v. Westover, 359 U.S. 500, 504 (1959). “Declaratory relief claims may be 3 equitable or legal.” Pacific Indem. Co. v. McDonald, 107 F.2d 446, 448 (9th Cir. 1939). “A 4 particular declaratory judgment draws its equitable or legal substance from the nature of the 5 underlying controversy.” Bayer v. Neiman Marcus Grp., Inc., 861 F.3d 853, 867 (9th Cir. 2017).
6 Each inquiry will be considered by claim. 7 1. STATE’S CLAIM FOR VIOLATION OF THE MWA 8 As to the first Chauffeurs’ inquiry, the parties do not meaningfully discuss how the 9 MWA claim compares to 18th-century actions brought in the courts of England. 10 Considering the second inquiry, at least some of the State’s MWA claim’s requested 11 remedies are legal in nature (see below). As relief for violation of the MWA, the State seeks 12 both declaratory relief in the nature of findings of fact, and injunctive relief. 13 2. STATE’S CLAIM FOR UNJUST ENRICHMENT 14 The parties do not dispute that a claim for unjust enrichment would have been brought in
15 a court of equity in the courts of England. The first inquiry under Chauffeurs’ is met. 16 As to the second Chauffeurs’ inquiry, the nature of the relief requested, here – 17 disgorgement – is also equitable in nature. 18 The U.S. Supreme Court has “characterized damages as equitable where they are 19 restitutionary, such as in actions for disgorgement of improper profits.” Chauffeurs, at 570–71. 20 Damages are equitable when they are for “money [alleged to be] wrongfully withheld,” See Id. 21 The State here is claiming as damages the improper profits which it asserts that GEO 22 “wrongfully withheld.” The unjust enrichment claim is an equitable claim. The State’s motion 23 to strike GEO’s jury demand on the unjust enrichment claim should be granted. 24 1 3. TRIAL OF LEGAL AND EQUITABLE CLAIMS 2 The Supreme Court has held that “where equitable and legal claims are joined in the 3 same action, there is a right to jury trial on the legal claims which must not be infringed either by 4 trying the legal issues as incidental to the equitable ones or by a court trial of a common issue 5 existing between the claims.” Dollar Sys., Inc. v. Avcar Leasing Sys., Inc., 890 F.2d 165, 170
6 (9th Cir. 1989)(quoting Ross v. Bernhard, 396 U.S. 531, 537–38 (1970)). “[W]here there are 7 issues common to both the equitable and legal claims, the legal claims involved in the action 8 must be determined prior to any final court determination of the equitable claims.” Id. (citing 9 Dairy Queen, Inc. v. Wood, 369 U.S. 469, 479 (1962). The timing is important because 10 “[o]therwise, prior non-jury trial of the equitable claims may infringe the right to jury trial on the 11 legal claims because of the collateral estoppel or res judicata effect of a prior judicial 12 determination of issues common to the two sets of claims.” Id. 13 This motion to strike GEO’s jury demand must also be considered in light of what has 14 gone on in this case, State v The GEO Group, Inc., Western District of Washington Case number
15 17-5806RJB, and its companion case, Nwauzor, v. The GEO Group, Inc., Western District of 16 Washington Case number 17-5769RJB (“Class Action”). These cases were consolidated for 17 “liability issues” by oral order (Dkt. 217) and by Supplement to Oral Ruling (Dkt. 218). That 18 order did not anticipate this motion, and is, accordingly, partly unworkable. This order will fix 19 that error and, hopefully, clarify procedure. 20 The common “liability issues” that should be tried together before a jury are limited to 21 MWA issues: 22 • In the Class Action, the Plaintiffs requested: (1) “Plaintiff and the proposed class 23 members are ‘employees’ under [the MWA],” (2) “[GEO] is an ‘employer’ within 24 1 the meaning of [the MWA],” and (3) “[GEO’s] practice of paying subminimum 2 wages to Plaintiff and the proposed class violates [the MWA].” Nwauzor, Dkt. 1, 3 at 4-5. 4 • In the State case, the State requests the Court (1) “Declare that detainees who 5 work at the NWDC are ‘employees’ as defined by [the MWA],” (2) “Declare that
6 [GEO] is an ‘employer’ of detainee workers at NWDC as defined by [the 7 MWA],” and (3) “Declare that [GEO] and [sic] must comply with [the MWA] for 8 work performed by detainees at NWDC.” Dkt. 1.
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6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT TACOMA 8 9 UGOCHUKWU GOODLUCK CASE NO. C17-5769 RJB NWAUZOR, et al., 10 Plaintiffs, 11 v. 12 THE GEO GROUP, INC., 13 Defendant. STATE OF WASHINGTON, CASE NO. C17-5806RJB 14 Plaintiff, 15 v. ORDER ON STATE’S MOTION TO STRIKE GEO’S JURY DEMAND 16 THE GEO GROUP, INC., AND PROCEDURAL ORDER
17 Defendant.
19 THIS MATTER comes before the Court on State of Washington’s Motion to Strike 20 Defendant The GEO Group, Inc.’s (“GEO”) Jury Demand. Dkt. 342. The Court has considered 21 the motion, documents in support of and in opposition to the motion, oral argument heard on 10 22 January 2020, and the remaining file. 23 24 1 This case arises around GEO’s alleged failure to adequately pay immigration detainees 2 participating in the Voluntary Work Program (“VWP”) at its facility, the Northwest Detention 3 Center. Dkt. 1-1. 4 The State makes two claims against GEO for: (1) violation of Washington’s Minimum 5 Wage Act (“MWA”), RCW 49.46, et. seq. and (2) unjust enrichment. As relief for the MWA
6 violations, the State seeks declaratory relief that GEO violated the MWA and injunctive relief 7 that GEO be enjoined from compensating detainees below the minimum wage. Dkt. 1-1. For 8 the unjust enrichment claim, the State seeks relief in the form of disgorgement of profits. Dkt. 1- 9 1. In its defense, GEO asserts that it is protected by intergovernmental immunity, derivative 10 sovereign immunity, and asserts other defenses to the MWA claim. 11 Washington now moves to strike GEO’s jury demand, arguing that GEO has no right to a 12 jury trial on Washington’s equitable claims. Dkt. 342. GEO opposes the motion. Dkt. 344. 13 DISCUSSION 14 “The Seventh Amendment preserves the right to trial by jury of all legal claims, whereas
15 no right to a jury exists for equitable claims. Danjaq LLC v. Sony Corp., 263 F.3d 942, 962 (9th 16 Cir. 2001). “Maintenance of the jury as a fact-finding body is of such importance and occupies 17 so firm a place in our history and jurisprudence that any seeming curtailment of the right to a 18 jury trial should be scrutinized with the utmost care.” Chauffeurs, Teamsters & Helpers, Local 19 No. 391 v. Terry, 494 U.S. 558, 565 (1990). 20 To determine whether a case will resolve legal rights, courts (1) “compare the statutory 21 action to 18th-century actions brought in the courts of England prior to the merger of the courts of 22 law and equity;” and (2) “examine the remedy sought and determine whether it is legal or 23 equitable in nature.” Chauffeurs, at 565. The second inquiry is the most important. Id. 24 1 The Declaratory Judgment Act “preserves the right to jury trial for both parties.” Beacon 2 Theatres, Inc. v. Westover, 359 U.S. 500, 504 (1959). “Declaratory relief claims may be 3 equitable or legal.” Pacific Indem. Co. v. McDonald, 107 F.2d 446, 448 (9th Cir. 1939). “A 4 particular declaratory judgment draws its equitable or legal substance from the nature of the 5 underlying controversy.” Bayer v. Neiman Marcus Grp., Inc., 861 F.3d 853, 867 (9th Cir. 2017).
6 Each inquiry will be considered by claim. 7 1. STATE’S CLAIM FOR VIOLATION OF THE MWA 8 As to the first Chauffeurs’ inquiry, the parties do not meaningfully discuss how the 9 MWA claim compares to 18th-century actions brought in the courts of England. 10 Considering the second inquiry, at least some of the State’s MWA claim’s requested 11 remedies are legal in nature (see below). As relief for violation of the MWA, the State seeks 12 both declaratory relief in the nature of findings of fact, and injunctive relief. 13 2. STATE’S CLAIM FOR UNJUST ENRICHMENT 14 The parties do not dispute that a claim for unjust enrichment would have been brought in
15 a court of equity in the courts of England. The first inquiry under Chauffeurs’ is met. 16 As to the second Chauffeurs’ inquiry, the nature of the relief requested, here – 17 disgorgement – is also equitable in nature. 18 The U.S. Supreme Court has “characterized damages as equitable where they are 19 restitutionary, such as in actions for disgorgement of improper profits.” Chauffeurs, at 570–71. 20 Damages are equitable when they are for “money [alleged to be] wrongfully withheld,” See Id. 21 The State here is claiming as damages the improper profits which it asserts that GEO 22 “wrongfully withheld.” The unjust enrichment claim is an equitable claim. The State’s motion 23 to strike GEO’s jury demand on the unjust enrichment claim should be granted. 24 1 3. TRIAL OF LEGAL AND EQUITABLE CLAIMS 2 The Supreme Court has held that “where equitable and legal claims are joined in the 3 same action, there is a right to jury trial on the legal claims which must not be infringed either by 4 trying the legal issues as incidental to the equitable ones or by a court trial of a common issue 5 existing between the claims.” Dollar Sys., Inc. v. Avcar Leasing Sys., Inc., 890 F.2d 165, 170
6 (9th Cir. 1989)(quoting Ross v. Bernhard, 396 U.S. 531, 537–38 (1970)). “[W]here there are 7 issues common to both the equitable and legal claims, the legal claims involved in the action 8 must be determined prior to any final court determination of the equitable claims.” Id. (citing 9 Dairy Queen, Inc. v. Wood, 369 U.S. 469, 479 (1962). The timing is important because 10 “[o]therwise, prior non-jury trial of the equitable claims may infringe the right to jury trial on the 11 legal claims because of the collateral estoppel or res judicata effect of a prior judicial 12 determination of issues common to the two sets of claims.” Id. 13 This motion to strike GEO’s jury demand must also be considered in light of what has 14 gone on in this case, State v The GEO Group, Inc., Western District of Washington Case number
15 17-5806RJB, and its companion case, Nwauzor, v. The GEO Group, Inc., Western District of 16 Washington Case number 17-5769RJB (“Class Action”). These cases were consolidated for 17 “liability issues” by oral order (Dkt. 217) and by Supplement to Oral Ruling (Dkt. 218). That 18 order did not anticipate this motion, and is, accordingly, partly unworkable. This order will fix 19 that error and, hopefully, clarify procedure. 20 The common “liability issues” that should be tried together before a jury are limited to 21 MWA issues: 22 • In the Class Action, the Plaintiffs requested: (1) “Plaintiff and the proposed class 23 members are ‘employees’ under [the MWA],” (2) “[GEO] is an ‘employer’ within 24 1 the meaning of [the MWA],” and (3) “[GEO’s] practice of paying subminimum 2 wages to Plaintiff and the proposed class violates [the MWA].” Nwauzor, Dkt. 1, 3 at 4-5. 4 • In the State case, the State requests the Court (1) “Declare that detainees who 5 work at the NWDC are ‘employees’ as defined by [the MWA],” (2) “Declare that
6 [GEO] is an ‘employer’ of detainee workers at NWDC as defined by [the 7 MWA],” and (3) “Declare that [GEO] and [sic] must comply with [the MWA] for 8 work performed by detainees at NWDC.” Dkt. 1. 9 Although couched in different terms, those claims are essentially the same and are legal, 10 fact determinative claims that should be tried together, to a jury, along with any defenses and 11 affirmative defenses that the Defendant may have to these claims. 12 The Plaintiffs’ claims diverge in the event of a MWA verdict for Plaintiffs. The Class 13 Action Plaintiffs seek to recover damages of wages denied under the MWA. See Nwauzor, Dkt. 14 1. The State has no such claim, but seeks injunctive relief, findings of unjust enrichment, and
15 ordering disgorgement. Dkt. 1-1, at 7. In other words, the Class Action Plaintiffs seek 16 recompense for lost wages, while the State’s requested relief is focused on the Defendant, not the 17 class members. 18 Just what interest the State may have in the Class Action’s request for damages is not 19 clear – but it may be evidence relevant to the State’s request for disgorgement. Whether the 20 State would want to participate in a Class Action damage trial, if any, remains to be determined. 21 The Class has no interest in the State’s claim for unjust enrichment. That is essentially an 22 equitable claim, and no jury trial right attaches to it, and although it is, in part, a “liability claim,” 23 it should not be consolidated for trial with the MWA claim, and to that extent, the rulings 24 1 consolidating liability issues should now be modified to limit the consolidation to the MWA 2 liability claims. 3 In light of, and considering, the foregoing, the Court anticipates trial procedure as 4 follows: 5 First, a consolidated jury trial on MWA liability issues only;
6 Second, if the Plaintiffs prevail on the MWA claim, a trial, with the same jury, on the 7 Class Plaintiffs’ damages claim; 8 Third, a non-jury trial on the State’s equitable claim for unjust enrichment and 9 disgorgement. 10 If the Defendant prevails on the MWA liability issues, the jury will be excused, and the 11 Court will conduct non-jury proceedings on the remaining equitable issues. 12 IT IS SO ORDERED and the State of Washington’s Motion to Strike GEO’s Jury 13 Demand (Dkt. 342 in case 17-5806, State v The GEO Group, Inc.) is GRANTED IN PART AND 14 DENIED IN PART as stated herein.
15 The Clerk is directed to send uncertified copies of this Order to all counsel of record and 16 to any party appearing pro se at said party’s last known address. 17 Dated this 21st day of January, 2020. A 18
19 ROBERT J. BRYAN United States District Judge 20
21 22 23 24