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Alvarez v. Joan of Arc Inc.


May 18, 1981


Appeal from the United States District Court for the Central District of Illinois. No. 78 C 1250 -- Robert D. Morgan, Judge.

Author: Bauer

Before CUMMINGS, Circuit Judge , GIBSON, Senior Circuit Judge ,*fn* and BAUER, Circuit Judge .

BAUER, Circuit Judge . Plaintiff-appellant Guadalupe Alvarez and all other members of the plaintiff class*fn1 are Spanish-speaking migrant farm workers. In April 1978 they traveled from Texas to Illinois to work for defendant Joan of Arc, Inc. ("Company") harvesting asparagus. Plaintiffs claim that Joan of Arc violated the Farm Labor Contractor Registration Act ("FLCRA"), 7 U.S.C. §§ 2041 et seq ., the Wagner-Peyser Act, 29 U.S.C. §§ 49 et seq ., and Illinois contract law. After a bench trial, the district court entered judgment in favor of plaintiffs on only one of plaintiffs' three counts. It is from this judgment which plaintiffs appeal and Joan of Arc cross-appeals. For the reasons discussed in this opinion, we affirm in part and reverse and remand in part.


Joan of Arc is a corporation doing business in Princeville, Illinois growing, harvesting, and canning vegetables. The Company employs migrant seasonal workers as needed. Joan of Arc obtains some of its workers through participation in the Interstate Requirement System established by the Wagner-Peyser Act. Pursuant to the requirements of that Act, defendant filed a clearance order with the Illinois State Employment Service in February 1978 specifying, inter alia , the number of workers needed, the period of employment, and the type of work to be done. 20 C.F.R. § 653.108(C)(2) & (d).

During January and February 1978, Sidney Stahl and David Stoner, employees of Joan of Arc, traveled to Texas to meet with labor recruiters Audaz Garza, Raul Lopez, and Benito Sanchez. Stahl and Stoner provided Garza, Lopez, and Sanchez with work agreements and copies of the clearance order to be given to recruited laborers. In addition, Garza, Lopez and Sanchez were authorized to enter into contracts on behalf of Joan of Arc and advance each hired migrant worker $30.00 for travel expenses. The recruiters were told not to send any laborers to Illinois until they received notice from the company that the asparagus was ready to harvest.

During April 1978, Stahl notified Garza, lopez, and Sanchez that work was ready for the migrants. The laborers were advanced the $30 and left Texas for Illinois. By April 27, 1978, approximately one-half of the migrants had arrived in Princeville. Harvesting began on May 1, 1978.

While the migrants were in Princeville, they were housed in four camps owned by Joan of Arc: Main Camp, Laura Camp, Wyoming Camp, and Monica Camp. Prior to the arrival of the migrants, the camps were inspected by representatives of the Illinois Department of Public Health. On May 3, 1978, the Department issued a license for the camps approving the housing for occupancy.

Plaintiff Guadalupe F. Alvarez brought this class action on behalf of all the migrant workers hired by Joan of Arc and housed in the four camps during the 1978 asparagus harvest. The complaint set forth three separate claims: (1) that the Company violated FLCRA by failing to register with the United States Secretary of Labor as a farm labor contractor, (2) that the company violated FLCRA, the Wagner-Peyser Act, and Illinois contract law by failing to inform plaintiffs that the announced harvest starting date depended upon crop and weather conditions, and (3) that Joan of Arc violated FLCRA and the Wagner-Peyser Act by providing housing that failed to comply with state and federal sanitation and safety regulations. The district court found for plaintiffs on the first claim and for defendant on the latter two. The court awarded each class member $100 liquidated damages.


FLCRA requires every farm labor contractor to register with the Secretary of Labor. 7 U.S.C. § 2043(a). A farm labor contractor is any person or corporation that, for a fee, either on its own behalf or the behalf of another, "recruits, solicits, hires, furnishes, or transports migrant workers... for agricultural employment." 7 U.S.C. § 2042(a), (b). Joan of Arc did not register as a farm labor contractor until June 1978, after the plaintiff migrant workers were hired. The district court found that defendant was a farm labor contractor in April and May 1978 when plaintiffs were hired and that Joan of Arc's failure to register before then violated FLCRA.

Joan of Arc claims that the district court erred, as a matter of law, in concluding that it was a farm labor contractor. Defendant argues that it did not recruit, solicit, hire, furnish, or transport migrant workers. Defendant argues alternatively that if it did any of the acts set forth in the statute, it did not do them "for a fee" as required by § 2043(b). Finally, the Company asserts that even if it was a farm labor contractor, it was exempted from the registration requirement by 7 U.S.C. § 2042(b)(2).

The record more than sufficiently supports the district court conclusion that Joan of Arc engaged in the conduct of a farm labor contractor as set forth in 7 U.S.C. § 2042(b). Defendant argues that it was not a farm labor contractor because it did not solicit workers, rather Garza, Lopez, and Sanchez, as independent contractors, did. Garza, Lopez, and Sanchez were authorized to distribute Joan of Arc's clearance order and work agreements to recruited workers and to contract with the migrants on Joan of Arc's behalf. They acted as Joan of Arc's agents in recruiting migrant workers for the Company. Hence, Joan of Arc was a farm labor contractor soliciting migrant workers on its own behalf.

The clearance order also stated that Joan of Arc would assist the migrants in finding employment with local farmers, producers, and nurseries during the interim period between the end of the asparagus harvest and the beginning of the canning season. The district court did not err in concluding that his language signified that Joan of Arc was soliciting laborers on behalf of others.

Joan of Arc argues that even if it did engage in the conduct of a farm labor contractor, it did not do it "for a fee" as required by § 2042(b). The Act defines a "fee" as any money or other valuable consideration paid to the farm labor contractor by another for the contractor's services. 7 U.S.C. § 2042(c). Defendant stipulated that the growers for whom the migrants worked during the interim paid Joan of Arc an amount equal to the cost of housing the workers. This payment of money falls within the statutory definition of a "fee".

Finally, the Company argues that even if we find that it falls within the § 2042(b) definition of a farm labor contractor, it is exempted from the registration requirement by 7 U.S.C. § 2042(b)(2). Section 2042(b)(2) exempts only those farm labor contractors who solicit workers solely for their own operations. As discussed above, Joan of Arc solicited migrant workers on behalf of other growers. Thus, its conduct does not fall within the statutory exemption.

FLCRA provides that the district court may award damages to migrant workers solicited or recruited by farm labor contractors who have failed to register with the Secretary of Labor. The Act provides in pertinent part:

If the court finds that the respondent has intentionally violated any provision of this chapter or any regulation prescribed hereunder, it may award damages up to and including an amount equal to the amount of actual damages, or $500 for each violation, or other equitable relief.

7 U.S.C. § 2050a(b) (emphasis added). The district court found that plaintiff suffered no actual damages as a result of Joan of Arc's failure to register and awarded each plaintiff $100 in liquidated damages.

The district court entered judgment in this case on June 17, 1980. On February 26, 1981, while this appeal was pending, we held in Espinoza v. Stokely-Van Camp, Inc ., No. 80-1597 (7th Cir. Feb. 26, 1981), that § 2050a(b) permits a district court to award either actual damages or "liquidated damages of $500 for each violation of the act." Slip op. at 7. Since the district court chose to award liquidated damages, it was required to award each plaintiff $500.


Plaintiffs appeal the district court finding that Joan of Arc did not violate FLCRA, the Wagner-Peyser Act, or Illinois contract law by failing to inform he migrant workers that the dates of employment were contingent upon crop and weather conditions. We agree with the conclusion of the district court.

Section 2045(b) of FLCRA requires farm labor contractors to disclose the terms and conditions of employment, including the period of employment, "in writing in a language in which the worker is fluent, and written in a manner understandable by such workers." Plaintiffs stipulated that each recruited migrant worker received a copy of the work agreement written in Spanish. This agreement stated that the term of employment would commence "about May 1, 1978." Section 2045(b) only requires the contractor to disclose that the starting date is tentative; it does not require the contractor to list with specificity all of the possible contingencies that may affect the starting date. Harvesting is dependent on crop maturity and weather conditions; a fact that surely must be known by migrant harvesters. This disclosure contained in the work agreement informed plaintiffs that the starting date was tentative, as required by § 2045(b).

The regulations promulgated pursuant to the Wagner-Peyser Act provide that the clearance order accurately state all the material terms and conditions of employment. 20 C.F.R. § 653.108(c)(2), (3) & (d). In Espinoza v. Stokely-Van Camp, Inc ., No. 80-1579 (7th Cir. Feb. 26, 1981), we held that these regulations impose an implied duty to refrain from contradicting the terms listed on the clearance order.

The clearance order filed by Joan of Arc and disseminated to the plaintiffs indicated that "DATES ARE APPROXIMATE." There is no evidence in the record indicating that defendant ever contradicted that warning. We find that the defendant's disclosures about the tentative nature of the starting date satisfied the requirements of the Wagner-Peyser Act.

Finally, we do not find that defendant violated Illinois contract law. Both the work agreement and the clearance order stated that starting dates were approximate. That is the term of employment to which the migrants agreed. The harvest did, in fact, begin on May 1, 1978. Within a few days after that date, all of the migrant workers were put to work harvesting. Defendant's conduct in no way breached its agreement with the plaintiffs.


Plaintiffs claim that Joan of Arc violated FLCRA, 7 U.S.C. § 2044(a)(4), and the Wagner-Peyser Act and its regulations, 20 C.F.R. § 620 et seq ., because the housing it provided did not comply with state and federal regulations. Specifically, plaintiffs allege inadequacy in the hot water supply, roof leakage in some units, standing water on the camp grounds, broken or inoperative plumbing fixtures and water on the floors of some of the communal bath and restroom facilities, occupancy of some housing units in excess of the maximum licensed occupancy limits, inadequate garbage removal, and insufficient recreational facilities. We agree with the district court that plaintiffs failed to prove a violation, and we adopt that portion of the district court opinion.

Defendant's clearance order represented that its housing had been approved by that responsible agency in 1977, and that the same would be subject to inspection and approval for the 1978 harvest season. Pre-licensing inspections were conducted by the Department of Health employees on March 20, 1978. A follow-up inspection of defendant's camps was made by the same agency on April 17, at which time defendant was advised by the agency that its housing was approved for occupancy licensing for the 1978 harvest season. The requisite licenses were issued later by the agency. Further inspections by the Department of Public Health were made in June and July. In late May 1978, a housing inspection was conducted by an agent of the United States Department of Labor.

No evidence even suggests that the housing was not in compliance with established standards when occupancy commenced in April 1978. There is evidence that on particular dates in late May, in June and in July, housing deficiencies were observed to exist. That evidence is wholly insufficient to prove that defendant was remiss in maintaining its housing to comply with required standards during the period of occupancy.

Defendant employed both migrant labor and a plumbing contractor to maintain its housing facilities. A company supervisor made periodic inspections to determine that the facilities were being properly maintained by defendant's employees. Also, the facilities were subject to inspection, and the same were inspected, from time to time by employees of the Illinois Department of Public Health and of the federal Department of Labor. Although inspection reports from time to time found defects which required correction, there was no action by either agency to terminate licensing of the housing or to disqualify defendant from participation in the interstate recruitment system. The evidence includes the testimony of a witness for plaintiffs that it is commonplace to find occasional deficiencies during the period of occupation of migrant housing facilities. Reports of the responsible employees of the state and federal agencies reflect that defendant did undertake remedial measures to correct deficiencies which were found to exist from time to time. The evidence here only reflects the natural wear and tear upon facilities being used by people.

Further comment on the evidence can be limited to a few particular areas.

An examination in late May of the facilities by Carmen Alvarez, then a staff employee of the Illinois Migrant Assistance Project, disclosed that the hot water supply in the communal bath houses in the main camp was deficient. She reported that observation to both the State agency and to defendant's official, Sidney Stahl. She was advised by Mr. Stahl that the situation would be remedied. Within a few days thereafter, defendant installed additional water heating units. Although it might be presumed that the deficiency existed at the time of initial occupancy of the camp, there is no evidence that defendant was aware of the deficiency prior to Ms. Alvarez's complaint.

A like response by defendant is reflected with relation to its receipt of notice that garbage was accumulating in its Laura camp.Defendant had assigned to a migrant employee the task of garbage removal and disposal at the camp. When investigation revealed that that individual had not regularly performed the task, the employee was replaced by defendant.

The evidence related to the complaint of permitted occupancy in excess of maximum unit capacity is wholly unconvincing. The maximum occupancy limitation of each housing unit was fixed in conformity with housing standards. In certain instances in 1978, actual occupancy did exceed the fixed and posted occupancy limits. Those instances of overoccupancy were created by the violation of particular migrant families. As family size required it, additional housing units were assigned to a particular family. In the instances of which complaint is made, the adult migrants had elected to house the whole family under one roof, or to note have both male and female siblings occupying a unit without adult supervision.

A basic premise which must underlie any discussion as to alleged housing deficiencies is the premise that defendant was justified in relying upon the approval by the Department of Health of its housing as being in compliance with occupancy standards.It is not surprising that problems did develop during the period of occupancy, and the evidence preponderates in support of a finding that defendant did take reasonble steps to alleviate those deficiencies as the same became known to it. Plaintiffs rely upon a report by Department of Public Health inspector that the design of certain plumbing in the main camp did not comply with standards fixed by the Illinois Plumbing Code. However, that report was delivered to defendant at the end of the 1978 harvest season. It has no tendency to indicate that defendant was previously aware of any such claimed deficiency, or that it was not theretofore entitled to rely upon the approval and licensing of its housing by the same agency, as indicative of the fact that its facilities did comply with all requirements.

Defendant's clearance order accurately represented that its housing facilities had been approved in 1977 and that approval for the 1978 season would be obtained. It did not represent that no problems would arise during the period of occupancy, nor that on any particular day during the period of occupancy an investigator would find every facet of its facilities in perfect order. Its good faith effort to correct deficiencies as the same came to its attention should not be penalized.*fn2

Alvarez v. Joan of Arc Company , No. 78-1250, slip op. at 13-16 (C.D. Ill. June 17, 1980).


The judgment from which plaintiffs appeal and defendant cross-appeals is affirmed in part and reversed and remanded in part. On remand, the district court is instructed to enter an order awarding each plaintiff class member $500 liquidated damages for defendant's failure to register as a farm labor contractor in violation of FLCRA, 7 U.S.C. § 2043; 29 C.R.F. § 40.51(a).


CUMMINGS, Circuit Judge , concurring. If we were writing on a clean slate, I would affirm Judge Morgan's judgment in toto . Since he found that Joan of Arc's violation of the Farm Labor Contractor Registration Act was merely "a harmless technical violation" (App. 17), he was entitled to award each member class $100 liquidated damages in lieu of the statutory maximum $500 apiece. This would be absolutely clear if the penultimate comma were absent from Section 2050a(b) supra , p. 5. We should not let that solecism interfere with the Congressional intent. As shown in the pertinent Senate Report, the court is to "award [liquidated] damages up to $500 for each violation * * *."*fn1

The fallacy inherent in the present construction of Section 2050a(b) becomes patent through a simple example. If each member of the class suffered only $10 in actual damages, yet the District Court could award all the class members $500 in liquidated damages! Moreover, even though the district judge characterized defendant's violation "intentionally" done (App. 17) as required by the opening clause of Section 2050(b), the record offers no such support and Judge Morgan found defendant not "culpable" (ibid .) In fact, as noted, the district judge properly characterized the violation as "a harmless technical" one*fn2 and yet in the absence of actual damages this Court compels an award of $500 to each of the estimated 300-*fn3203 in the class. An award of at least $150,000 to plaintiffs again illustrates that properly construed, the statutory language really means "up to $500 for each violation."

Because Espinoza v. Stokely-Van Camp , F.2d (7th Cir. 1981),*fn4 was decided so recently and supports the result being reached herein, I reluctantly concur in the present decision. But in passing it should be noted that there the violation was apparently intentional, for Stokely-Van Camp conceded liability under the statute (slip op. 5).

GIBSON, Senior Circuit Judge , concurring in part and dissenting in part. I concur in the majority opinion with the exception of that portion of the opinion that interprets 7 U.S.C. § 2050a (1976) to require an award of $500 per plaintiff whenever a district court chooses to award liquidated damages. Ante at 6. In my view, the language of section 2050a, and its legislative history, suggest that a mandatory award of $500 in liquidated damages is not required by the statute.


The starting point of the inquiry is the plain language of the statute itself. Rosewell v. LaSalle National Bank , U.S. , , 49 U.S.L.W. 4285, 4288 (March 24, 1981). Title 7 U.S.C. § 2050a(a)-(b) provides:

(a) Any person claiming to be aggrieved by the violation of any provision of this chapter or any regulation prescribed hereunder may file suit in any district court of the United States having jurisdiction of the parties without respect to the amount in controversy or without regard to the citizenship of the parties and without regard to exhaustion of any alternative administrative remedies provided herein.

(b) Upon application by the complainant and in such circumstances as the court may deem just, the court may appoint an attorney for such complainant and may authorize the commencement of the action. If the court finds that the respondent has intentionally violated any provision of this chapter or any regulation prescribed hereunder, it may award damages up to and including an amount equal to the amount of actual damages, or $500 for each violation, or other equitable relief. Any civil action brought under this section shall be subject to appeal as provided in chapter 83 of Title 28. [Emphasis added.]

The statute provides that "persons claiming to be aggrieved" may file suit and "may" be awarded "damages up to and including an amount equal to the amount of actual damages, or $500 for each violation, or other equitable relief." The term "aggrieved" implies injury. Webster's Third New International Dictionary 41 (1966). In order to satisfy the "cases" and "controversies" requirement of Article III of the United States Constitution, a litigant must have standing. The Supreme Court has stated that the complaining party must first allege "that the challenged action has caused him injury in fact, economic or otherwise." Association of Data Processing Service Organizations, Inc. v. Camp , 397 U.S. 150, 152 (1970). An allegation of some type of actual injury is therefore a prerequisite under both Article III and section 2050a before a private individual can maintain a suit in federal court concerning the rights of farm workers under the FLCRA.

From these principles, I conclude that an individual farm worker has no right to sue under the FLCRA if he alleges only a purely technical violation of the Act. The FLCRA has adequately provided for enforcement by the Secretary of the Department of Labor, through the use of criminal as well as civil sanctions. See 7 U.S.C. §§ 2046, 2048, 2050a(c) (1976). There is no need for private "attorney generals" to see that the technical provisions of the Act are carried out.


The farm laborers in this case, however, did allege damages for violations of various provisions of the FLCRA. The district court found merit in only one claim, namely, in Joan of Arc's failure to register as a farm labor contractor. The court then found no actual damages. The trial court, however, awarded $100 to each worker as "liquidated damages." This court has construed the statutory language not only to permit such damages but to mandate an award of $500 whenever "the district court chose to award liquidated damages." Ante at 6; see Espinoza v. Stokely-Van Camp, Inc ., No. 80-1597, slip op. at 7 (7th Cir. Feb. 26, 1981); Aranda v. Pena , 413 F. Supp. 849 (S.D. Fla. 1976).*fn1

I note that the court has not required the district courts to award "liquidated damages" any time that a technical violation of the FLCRA has occurred. The statutory language reads "may." More important, however, I believe that only when some actual damages are shown should liduiated damages be allowed.


In Espinoza v. Stokely-Van Camp, Inc ., No. 80-1597 (7th Cir. Feb. 26, 1981), this court reviewed the relevant statutory history of the 1974 amendments to the FLCRA and concluded that an individual need prove no damages before being entitled to the $500-per-person award. Id . at 5-7 & n.3. While I disagree with the court's allowance of any liquidated damages when no actual damages are shown, see post at 17-18, I am bound to adhere to the precedent established by that panel. I do not agree, however, with the majority's interpretation of Espinoza as applied to this case.

In my view, Espinoza did not hold that an award of $500 in liquidated damages was required each time a district court chooses to award any liquidated damages. The only language in Espinoza which might support such a holding is the following: "[C]onstruing section 2050a(b) to permit liquidated damages of $500 for each violation of the act furthers the congressional intent of strengthening its enforcement." (Footnote omitted.) (Emphasis added.) The sentence uses the word "permit" and not "require." This sentence has recently been construed by Judge Baker of the United States District Court for the Central District of Illinois.He concluded that "Espinoza does not require an award of $500 per violation per claimant." De La Fuente v. Stokely-Van Camp, Inc ., F. Supp. , No. 78-0090, slip op. at 21 (C.D. Ill. March 27, 1981).

Judge Baker's memorandum decision illustrates the problem inherent in mandating an award of $500 for each violation. Our interpretation of Espinoza herein will require reversal in that case. If the majority's interpretation of Espinoza holds, Judge Baker will be required to award $12,160,000 in damages against Stokely-Van Camp.*fn2 Judge Baker found that such an award "would in effect destroy contractors economically for violations which, while they were intentional, were not committed maliciously or with intent to defraud." I cannot read the literal language of section 2050a(b) to require such a punitive result.As noted in Priebe & Sons, Inc. v. United States , 332 U.S. 407, juo: "[A]n exaction of punishment for a breach which could produce no possible damage has long been deemed oppressive and unjust."

In addition, the legislative history of the FLCRA, as mentioned by Judge Cummings, supports the view that liquidated damages of less than $500 may be awarded. The Senate Report discussion of section 2050a provides that "[t]he court may * * * award damages up to $500 for each violation * * *." S. REP. No. 1295, 93rd Cong., 2d Sess. , reprinted in [1974] U.S. CODE CONG. & AD. NEWS 6441, 6450. (Emphasis added.)

The illogic of requiring a mandatory award of $500 in liquidated damages is amply illustrated in the simple example given by Judge Commings in his concurring opinion. If the district court determines that $10 in actual damages have resulted, then he clearly may make such an award. If, however, no actual damages are shown, and the court feels some award of liquidated damages may be proper, the court must award $500. Given this scenario, the district court may well choose not to award any liquidated damages whatsoever, rather than saddling the company with a huge damage award against it for a purely technical violation.


Finally, I must express my disagreement with Espinoza 's interpretation of section 2050a(b) as allowing the award of liquidated damages where no actual damages have been shown. Liquidated damages should not be allowed unless actual damages are present and are difficult to quantify. Under such circumstances, section 2050a(b) grants discretion to the district court to award an amount up to $500 as a proxy for that loss.

This conclusion is supported by the common-law application of liquidated damages in contractual actions. In order to be enforceable, liquidated damage clauses must "be a reasoable forecast of just compensation for the damage caused by a breach of contract." Priebe & Sons, Inc. v. United States, supra , 332 U.S. at 413. Mere deterrence of a breach is insufficient. Id .

The Supreme Court in Western Union Telegraph Co. v. Nester , 309 U.S. 582 (1940), in construing a money order contract filed with the Federal Communications Commission, refused to award liquidated damages, regardless of whether or not the sender had sustained any actual damage. The contract, which is similar to the language of section 2050a(b), provided in relevant part that "the company shall not be liable for damages * * * beyond the sum of five hundred dollars, at which amount the right to have this money order promptly and correctly transmitted and promptly and fully paid is hereby valued, * * *." Id . at 585. The Court held:

We think the provision in question was not intended to prescribe a definite liability (liquidated damages), but is a limitation upon the maximum permissible recovery for actual loss or damage properly alleged and shown by evidence. The courts below erred in ruling otherwise.

The interpretation of the condition approved below would permit a recovery of five hundred dollars irrespective of the sum deposited for transmission and without requiring the sender to show any loss whatsoever. A mere failure to transmit a small sum deposited with the company might impose a heavy and utterly unreasonable burden upon the common carrier although the patron had suffered no loss. * * *

Id . at 587-89.

Applying these same principles to section 2050a(b), I can only conclude that liquidated damages in the total amount of over $150,000 were not authorized by the statute when no actual damages were demonstrated. Furthermore, other statutory provisions in the FLCRA obviate the need for additional deterrence. See ante at 14. Read as a whole, I believe, the FLCRA does not authorize liquidated damages to private parties who have suffered to actual damages.

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