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State v. Geo Group, Inc.

United States District Court, W.D. Washington, Tacoma

December 6, 2017

STATE OF WASHINGTON, Plaintiff,
v.
THE GEO GROUP, INC., Defendant.

          ORDER ON GEO'S MOTION TO DISMISS COMPLAINT

          ROBERT J. BRYAN UNITED STATES DISTRICT JUDGE

         THIS MATTER comes before the Court on Defendant The GEO Group, Inc.'s Motion to Dismiss Complaint. Dkt. 10. The Court has considered Defendant's motion, Plaintiff State of Washington's Response, Defendant's Reply, the Complaint, and the remainder of the file herein. Dkts. 1-1, 17, 18. The Court also considered oral argument held in open court on November 20, 2017.

         This case centers on the compensation of detainees at the Northwest Detention Center, a facility Defendant operates in Tacoma, Washington, under a contract with United States Immigration and Customs Enforcement (ICE), a division of the Department of Homeland Security. Defendant uses detainees to assist in operating the facility under a Voluntary Work Program, and in exchange for their work, Defendant compensates detainees $1 per day.

         Plaintiff filed this[1] action “to enforce Washington's minimum wage laws and to remedy the unjust enrichment” from Defendant's “long standing failure to adequately pay immigration detainees[.]” Dkt. 1-1 at ¶1.1. Defendant's Fed.R.Civ.P. 12(b)(6) motion seeks dismissal on four primary grounds: (1) the State's claims are preempted by federal law, (2) the State lacks authority to bring this lawsuit, (3) the State fails to state a claim for unjust enrichment and violations of the Washington Minimum Wage Act, and (4) the State's unclean hands and laches bar relief. Dkt. 10.

         I. BACKGROUND

         A. The Complaint.

         The following facts alleged in the Complaint are taken as true for purposes of Defendant's motion.

         Defendant is a private corporation that has owned and operated the Northwest Detention Center, a 1, 575 bed facility, since 2005. Dkt. 1-1 at ¶¶3.8, 3.9. ICE contracts with Defendant for the detention of adult detainees awaiting resolution of immigration matters. Id. at ¶3.10 Defendant relies upon detainees for a wide range of services, including laundry service, cleaning general living spaces, buffing floors, and painting. Id. at ¶4.2. Defendant compensates detainees at $1 per day, but Defendant has in some cases alternatively compensated detainees with more or better food. Id. at ¶¶4.4, 4.5. Since 2005 Defendant has received the benefit of this $1 per day labor without the financial burden of paying the State minimum wage, currently set at $11 per hour. Id. at ¶¶3.6, 4.9.

         The Complaint alleges that Plaintiff has a “quasi-sovereign interest in protecting the health, safety, and well-being of [Washington] residents [ ] includ[ing] . . . harms to their own and Washington's economic health.” Dkt. 1-1 at ¶¶3.3, 3.4. Further, it is alleged, “[t]he enforcement of minimum wage laws is of preeminent concern to the people of Washington, ” and “[t]he Legislature enacted minimum wage laws to protect Washington workers” as well as to “safeguard ‘the immediate and future health, safety and welfare of the people of the state.' Id. at ¶3.5, citing RCW 49.46.005(1).

         The Complaint alleges two causes of action, unjust enrichment and violations of Washington's Minimum Wage Act. Dkt. 1-1 at ¶¶5.1-6.6. Plaintiff seeks an order requiring Defendant to disgorge its unjust enrichment from the failure to adequately pay detainees. Id. at ¶¶7.5, 7.6. Plaintiff also seeks declaratory relief that Defendant is an “employer” that must comply with the State's minimum wage laws when managing detainee-workers, who are “employees, ” and injunctive relief that Defendant be enjoined from paying detainee-workers less than the State minimum wage. Id. at ¶¶7.1-7.4.

         B. Extra-pleadings.

         Defendant operates the Northwest Detention Center by “a complex statutory, regulatory, and contractual relationship” with ICE. Dkt. 10 at 9. The contract central to the Defendant-ICE relationship (“the Contract”[2]) sets out terms for a ten-year operation of the facility. Dkt. 19 at 47. The Contract requires of Defendant, inter alia, that “[d]etainee labor shall be used in accordance with the detainee work plan developed by the Contractor, and will adhere to the ICE PBNDS [Performance-Based National Detention Standards] on Voluntary Work Program.” Id. at 86. See also, id. at 49. Further, “the detainee work program shall not conflict with any other requirements of the contract and must comply with all applicable laws and regulations.” Id.

         The Voluntary Work Program articulates standards, inter alia, prohibiting discrimination, accommodating disabilities, limiting work to “8 hours daily, 40 hours weekly, ” and compensating detainees. 2011 Performance-Based National Detention Standards, Section 5.8, Voluntary Work Program, available online at http://www.ice.gov/detention-standards/2011/ (last accessed Dec. 3, 2017). The detainee compensation provision of the Voluntary Work Program states:

Detainees shall receive monetary compensation for work completed in accordance with the facility's standard policy. The compensation is at least $1.00 (USD) per day. The facility shall have an established system that ensures detainees receive the pay owed them before being transferred or released.

Id.

         II. STANDARD UNDER FED. R. CIV. P. 12(B)(6)

         Fed. R. Civ. P. 12(b) motions to dismiss may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990). Material allegations are taken as admitted and the complaint is construed in the plaintiff's favor. Keniston v. Roberts, 717 F.2d 1295 (9th Cir. 1983). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-55 (2007) (internal citations omitted). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555. The complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Id. at 547.

         Where a state law claim is preempted by federal law, dismissal may be granted under Fed.R.Civ.P. 12(b)(6). E.g., Cleghorn v. Blue Shield of Cal., 408 F.3d 1222, 1225 (9th Cir. 2005) (affirming dismissal of state law claims preempted by ERISA).

         III. PREEMPTION

         A. Preemption generally.

         The Supremacy Clause provides that the laws of the United States “shall be the supreme Law of the Land[, ] . . . anything in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. Federal law can preempt state law in three ways: (1) express preemption, (2) field preemption, or (3) obstacle/conflict preemption. Nat'l Fed'n of the Blind v. United Airlines Inc., 813 F.3d 718, 724 (9th Cir. 2016). “Regardless of the type of preemption involved-express, field or conflict-the purpose of Congress is the ultimate touchstone of pre-emption analysis.” Id.

         Analysis “starts with the basic assumption that Congress did not intend to displace state law.” Maryland v. Louisiana, 451 U.S. 725, 746 (1981). This presumption applies in “all preemption cases, and particularly in those in which Congress has legislated . . . in a field which the States have traditionally occupied.” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996) (internal quotations and citations omitted). “[L]abor standards fall[] within the traditional police power of the State.” Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 21 (1987). See also, RCW 49.46.005(a). The party seeking to set aside state law bears the burden to show preemption. PLIVA, Inc. v. Mensing, 564 U.S. 604, 634 (2011).

         B. Express preemption.

         Express preemption applies where Congress explicitly states its intent to preempt state law in the language of a statute. Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992). Where Congress has expressed an intent to preempt state law, the scope of the preemption is determined by examining congressional intent, beginning with the legislative text, “which necessarily contains the best evidence of Congress' preemptive intent.” CSX Transp., Inc. v. Easterwood,507 U.S. 658, 664 (1993). Courts also consider the “statutory framework, ” as well as the “structure and purpose of the statute as a whole.” Lohr, 518 U.S. at 486 (1996). “[W]hen the text of a pre-emption clause is susceptible ...


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