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Chen v. Geo Group, Inc.

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

February 28, 2018

CHAO CHEN, individually and on behalf of those similarly situated, Plaintiff,
THE GEO GROUP, INC., a Florida corporation, Defendant.


          ROBERT J. BRYAN United States District Judge

         THIS MATTER comes before the Court upon Plaintiff Chao Chen's Motion to Dismiss or Strike Defendant's Counterclaims and Affirmative Defenses. Dkt. 37. The Court has considered the motion, Defendant The Geo Group, Inc.'s Response, Plaintiff's Reply, Defendant's Answer, and the remainder of the file herein. Dkts. 33, 37, 38, 39.

         This case arises out of the allegation that Defendant failed to compensate Plaintiff and a proposed class of immigration detainees commensurate with the Washington Minimum Wage Act. See Dkt. 1. Defendant's Answer alleges two counterclaims, both of which Plaintiff seeks to strike under Fed.R.Civ.P. 12(f) or dismiss under Fed.R.Civ.P. 12(b)(6). See Dkt. 33 at ¶¶8.1-8.14, 11.1-12.12. Defendant's Answer raises fourteen affirmative defenses, all but four of which Plaintiff seeks to strike. See Id. at 33 at ¶¶8.1-8.14.

         Facts alleged in the Answer and procedural history are introduced below only where relevant to discussion of each counterclaim and affirmative defense.

         I. COUNTERCLAIMS (Dkt. 33 at ¶¶11.1-12.12)

         A. Standard for relief.

         Plaintiff seeks dismissal under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. 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 claim 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 (or counterclaim) must allege “enough facts to state a claim to relief that is plausible on its face.” Id. at 547.

         Plaintiff also moves to strike under Fed.R.Civ.P. 12(f). Rule 12(f) is designed to help “avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial.” Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (citation omitted). Under Rule 12(f), courts may “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). Motions to strike are disfavored, because they “may be used as delaying tactics and because of the strong policy favoring resolution on the merits.” Barnes v. AT&T Pension Ben. Plan-Nonbargained Program, 718 F.Supp.2d 1167 (N.D.Cal.2010), citing to Stanbury Law Firm v. I.R.S., 221 F.3d 1059, 1063 (8th Cir.2000).

         B. Unjust enrichment (Dkt. 33 at ¶¶11.1-11.14)

         Defendant's counterclaim for Unjust Enrichment alleges that, as required by ICE, GEO operates the Voluntary Work Program, which is not intended to, and does not, create an employer/employee relationship between GEO and detainees, whose participation is voluntary. Dkt. 33 at ¶11.1. The program is intended to promote institutional maintenance and reduce detainee idleness, it is alleged, with no traditional, standard, performance metrics used to measure job performance. Id. at ¶11.3. The counterclaim further alleges that if Plaintiff prevails in a Washington Minimum Age Act claim for lost wages, Defendant is entitled to recover “its costs and expenses associated with operating the Voluntary Work Program and caring for plaintiff and any putative class member.” Id. at ¶11.14.

         The Answer separately alleges an affirmative defense for offset of any costs incurred in caring for Plaintiff and costs associated with operating the Voluntary Work Program. Dkt. 33 at ¶8.14. Plaintiff does not seek to strike or dismiss the offset affirmative defense. Dkt. 39 at 5.

         Plaintiff argues that Defendant is not entitled to any restitution from Plaintiff for housing and other expenses, because Defendant has already been fully paid by ICE for those services. Dkt. 39 at 3. Although Defendant may have conferred a benefit on Plaintiff, e.g., by providing food and lodging, Plaintiff was involuntarily detained and had no input over his conditions. Dkt. 37 at 6. Under circumstances where ICE paid Defendant for Plaintiff's and other detainees' living expenses, Plaintiff opines, it is not inequitable for Plaintiff to retain the value of his basic necessities. Id. Finally, Plaintiff contends, Defendant cannot recover losses incurred because of its illegal failure to observe State wage laws. Id. at 7, 8.

         Defendant responds by again addressing the merits of whether Plaintiff is an “employee” under the Washington Minimum Wage Act. Dkt. 38 at 26, 27. Defendant argues further that “[c]ourts” have allowed “contingent unjust enrichment counterclaims in minimum wage actions.” Id. Defendant cites to two nonbinding opinions, Reyes v. LaFarga, 2013 WL 12097452 (D.Ariz. 2013) and Mann v. Fredricktown Assoc. Limited Partnership, 2015 WL 4878661 (D.Md. 2015).

         “Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another.” Bailie Commc'ns, Ltd. v. Trend Bus. Sys., Inc., 61 Wn.App. 151, 159 (1991). A claim for unjust enrichment has three elements: (1) the defendant [or counter-defendant] receives a benefit, (2) the received benefit is at the plaintiff's [or counter-plaintiff's] expense, and (3) the circumstances make it unjust for the defendant [or counter-defendant] to retain the benefit without payment. Young v. Young, 164 Wn. 2d 477, 484-85 (2008).

         The first element is satisfied by the allegation that Defendant conferred on Plaintiff the benefit of food, lodging, and other necessities and amenities. The second element is satisfied under the theory that if Plaintiff receives an award for lost wages from Defendant, Plaintiff has received both the benefit conferred and the award for lost wages, both at Defendant's expense. The third element is satisfied under the theory that such compensation would unfairly increase Defendant's burden to comply with ICE contract obligations.

         Plaintiffs argument, that Defendant cannot recover restitution from Plaintiff because it has already been fully paid by ICE, is relevant to the second and third elements, but not on a motion to dismiss for failure to state a claim. The Court does not here reach the merits of whether Defendant should be precluded from recovery because of its own illegal conduct. That is an equitable argument better reached at trial.

         As a practical matter, the counterclaim overlaps substantially with Affirmative Defense 8.14 (offset). The counterclaim for Unjust Enrichment may be flawed, but the issue raised by Plaintiff is whether Defendant has stated a claim upon which relief can be granted. Defendant has done so.

         Plaintiffs motion to dismiss the counterclaim for Unjust Enrichment for failure to state a claim should be denied.

         C. Declaratory Relief under 28 U.S.C. §2201 (Dkt. 33 at ¶¶12.1-12.12)

         The final paragraph of the counterclaim for Declaratory Relief states:

The Court should declare that there is no employment relationship between GEO and detainees who participate in the Voluntary Work Program. Further, plaintiff is not an “employee, ” and GEO is not an “employer” with respect to Voluntary Work Program participation, and therefore the FLSA's and MWA's minimum wage protections do not apply to plaintiff or any putative class member.

Dkt. 33 at ¶12.12. Immediately following that paragraph, with no separate heading, the Answer reads:

         GEO prays for the following affirmative relief:

1. For an order enjoining plaintiffs from claiming the MWA applies to them;
2. For an order declaring the MWA inapplicable to ICE detainees at the NWDC;
3. For an order declaring the FLSA inapplicable to ICE detainees at the NWDC;
4. For a declaration that GEO has no employment relationship with any detainees who participate in the Voluntary Work Program, including no relationship that requires ...

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