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Perez v. Pan-American Berry Growers, LLC

United States District Court, Ninth Circuit

January 15, 2014

THOMAS E. PEREZ, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff,
v.
PAN-AMERICAN BERRY GROWERS, LLC, an Oregon limited liability company, Defendant.

FINDINGS AND RECOMMENDATION

THOMAS M. COFFIN, Magistrate Judge.

Defendants, Pan-American Berry Growers, LLC. and B&G Ditchen, LLC., Robert Ditchen, and Gregg Ditchen (collectively "the Ditchens"), seek to vacate their respective consent judgment and orders entered into between the individual defendants and plaintiff, Thomas E. Perez and the United States Department of Labor ("DOL").

I. BACKGROUND

Pan-American, in 2012, grew about 2 million pounds of fresh blueberries at its 165 acre Salem, Oregon farm. At the time of the contested action, it claims to have had about $3-4 million worth of berries in storage or still growing in the fields (with half set to be frozen). All apparently picked by hand or to be hand-picked. Pan-American asserts it had 280 seasonal workers and paid about $1.4 million to labor contractor Ezequiel Labor.

The Ditchens' farm is about 150 acres and is located in North Howell, Oregon. The Ditchens claim about $2.5 million worth of berries in storage and in the fields were held up during the time of the contested action. The Ditchens assert they had 310 seasonal workers at the time.

The DOL initiated an investigation on July 28, 2012, at the Pan-American Salem farm when there were about 200 pickers in the field. The DOL interviewed about 10% of the workers. DOL also reviewed pay roll records on July 30 and 31, 2012. The DOL claims multiple workers were using the same picker card.[1] Pan-American asserts only two workers were actually observed picking on the same card. The DOL performed a similar investigation, beginning on July 30, 2012, at the Ditchens' farm whose labor contractor was Manual Urendas.

The DOL utilized, according to defendants, a formula based on the average berries picked by the workers over a one-month period and determined that any workers that picked more than the average over the season must have been supported by "ghost workers" who did not submit picker cards to Pan-American. Using this methodology, Pan-American states that DOL determined that 287 ghost workers had been working on Pan-American's farm over the period of July 6, 2012, through August 2, 2012, based on the volume of berries picked.

On August 2, 2012, DOL called Pan-American representatives about possible violations and faxed over a hot goods objection[2] which would require a consent decree to get lifted. On August 3, 2012, downline purchasers had been informed, and they agreed, on August 6, 2012, not to take shipment. On August 7, 2012, DOL drafted a consent decree and Pan-American provided minimal changes. A final consent decree was signed on August 9, 2012, finding $41, 778.15 in back wages due and assessing a penalty of $7, 040.00. The DOL lifted the hot goods objection on August 9, 2012, which had held up about 400, 000 pounds of berries and delayed picking for 7 days which amounts to an additional 30-50, 000 pounds of berries not picked per day.

On August 3, 2012, the DOL supplied a spreadsheet of alleged violations to the Ditchens representatives asserting multiple workers picking on the same cards based on the ghost worker methodology. On August 4, 2012, the DOL stated if the Ditchens sent a check for the back wages and penalty, the objection would be lifted. DOL claimed 810 workers were owed back wages and asserted other migrant worker violations. The Ditchens paid $156, 616.00 in back wages and a $13, 200.00 penalty on August 6, 2012. On August 7, 2012, the DOL lifted the hot goods objection. The consent decree was signed on August 17, 2012. The Ditchens claims they lost $89, 712.41 in revenue based on rotting berries and overripe berries during the imposition of the hot goods objection.

The DOL filed a complaint against Pan-American on August 14, 2012, and against the Ditchens on August 30, 2012, alleging that the individual defendants violated the FLSA by paying employees less than the minimum wage and failing to "maintain, keep, make available... and preserve records of employees." The court signed the Pan-American consent judgment following a Joint Motion to Approve Consent Judgment on August 18, 2012. The court signed the Ditchens consent judgment on August 30, 2012 following a Joint Motion to Approve Consent Judgment. Pan-American and the Ditchens moved to vacate the consent judgments on August 15, 2013, and filed a complaint against the DOL on August 16, 2013, seeking essentially the same relief.

II. DISCUSSION

Federal Rule of Civil Procedure (FRCP) 60(b) governs motions for relief from judgment. Under the rule, the court may relieve a party from judgment for any of the following six enumerated reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for ...

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