A recent Texas Court of Appeals case involving claims of human trafficking of workers recruited in the Philippines and brought to work in Texas provides insight into how principles of international comity may be applied in Texas state courts in the class action context. This ruling – Villareal v. International Plant Services, LLC, Case No. 01-13-00310 (Ct. App. 1st Dist. Tex. Oct. 28, 2014) – is instructive for agencies that recruit foreign workers and their counsel.
It also demonstrates to extent to which workplace class actions are on the increase for alleged abuses against workers across international borders.
The Plaintiffs were recruited under a highly regulated program governed by the Migrant Workers and Overseas Filipino Act of 1995, a law which provides that the Filipino National Labor Relations Commission (NLRC) “original and exclusive jurisdiction to hear and decide…claims arising out of an employer-employee relationship…involving Filipino workers for overseas deployment….” Republic Act 8042, s 10 (2004) (Phil.). Given the jurisdictional language of this statute, it is unremarkable that, after the Plaintiffs filed claims in Texas state court, defendants moved to dismiss on grounds that the court should decline to exercise jurisdiction based upon principles of international comity. The trial court granted the motion and the Plaintiffs appealed.
The Appellate Decision Reversing The Dismissal Of Plaintiffs’ Claims
The threshold issue on appeal was the standard of review that the Court of Appeals would apply to the trial court’s decision. Defendant argued that because the underlying issue was jurisdictional, a de novo standard of review should apply. Plaintiffs countered that because dismissal based on comity is “voluntary and not obligatory,” an abuse of discretion standard should apply. Foreshadowing the substantive outcome, the Court of Appeals cited Fifth Circuit and Texas Supreme Court authority to find that the abuse of discretion standard applied. Id. at 7.
Turning to the comity issue, the Court of Appeals noted that both state and federal courts apply Sections 402 and 403 of the Restatement (Third) of the Foreign Relations Law of the United States to “determine whether dismissal based on principles of international comity is appropriate.” Id. at 9. Under the Restatement, the factors used to determine whether an exercise of jurisdiction would be unreasonable include the following: (1) the extent to which the challenged activity takes place or has a direct effect in the territory; (2) connection between the regulating state and the person principally responsible for the activity regulated; (3) the nature of the regulated actions; (4) whether the regulation upsets justifiable expectations; (5) importance of the regulation to the international economic system; (6) the extent to which the regulation is consistent with traditions of the international system; (7) extent of another state’s interest in regulating the activity; and (8) the likelihood of conflict. Id. at 11-12. Noting that the Texas Supreme Court has not yet expressly adopted the Restatement, the Court of Appeals nevertheless decided that the Restatement provided a proper analytical framework. Id. at 12.
In applying the factors, the Court of Appeals repeatedly found that, for most of the factors, each side presented some evidence relevant to the factor that supported their respective positions. However, the existence of some evidence supporting Plaintiffs’ position on most factors “does not support a conclusion that the district court’s exercise of jurisdiction would be unreasonable.” Id. at 15. In other words, since Plaintiffs could provide some argument to support their position on many of the factors, the Court of Appeals concluded that “the exercise of jurisdiction over this case by Texas is not unreasonable, and, accordingly, that the trial court erred in dismissing the case.” Id. at 21.
Implications For Recruiters
Given the somewhat factual nature of the evaluation of the factors, one could argue that this case could be limited to its facts. However, the fact that the Court of Appeals set up a framework in which the existence of arguments for both sides in essence prevents a trial court from declining to exercise jurisdiction based on comity appears to put a thumb on the scale of state law rather than the law of a foreign sovereign.