Chen v. Cai

Background

Jingyu Chen sued Yong Zhao Cai and others under the Trafficking Victims Protection Reauthorization Act (TVPRA), the Racketeer Influenced and Corrupt Organizations Act (RICO), and New York common law. The motion addressed claims against these eight corporate entities: New York Falun Dafa Association Corp., The Eastern US Buddha’s Study (Falun Dafa) Association, Inc., Falun Dafa Information Center, Inc., Friends of Falun Gong Inc., NY Metropolitan Falun Dafa Association Inc., International Falun Dafa Association, Inc., Falun Gong Club of Orange County, Inc., and Upstate Falun Dafa Association, Inc.

Chen alleged that Yong Zhao Cai, with help from Qian Y. Cai, Jiang Li, and Kim K. Cheung, used violence, threats, and coercion to enslave and abuse her between May 2016 and January 2018. She alleged that Cheung forced her to attend political protests and religious festivals associated with Falun Dafa, and that the corporate defendants were responsible for or benefited from this conduct. The corporate defendants moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim.

Analysis and Rulings

Eighth claim: responsibility for Cheung’s conduct. Chen alleged that the corporate defendants were legally responsible for Cheung’s conduct under respondeat superior, a doctrine that can make an employer responsible for an employee’s conduct within the scope of employment. The court held that forcing Chen through slavery and threats of physical and sexual violence was not within the duties of a recruiter or organizer and was not conduct furthering an employer’s interests as a matter of law. The court dismissed the eighth claim. It also noted concerns about whether Cheung was employed by all eight entities, but did not need to resolve that issue.

Ninth claim: TVPRA peonage and forced labor. The court dismissed the peonage portion because peonage requires compulsory service connected to a real or artificially created debt, and Chen did not allege that her compulsory services were connected to indebtedness. The court also stated that Chen abandoned that portion of the claim by failing to respond to the defendants’ dismissal arguments.

The court dismissed the forced-labor portion because Chen did not plausibly allege that the corporate defendants knowingly benefited from participating in a venture involving forced labor or knew, or recklessly disregarded, that such conduct occurred. The court found that Chen’s allegations that her attendance at Falun Dafa activities benefited or bolstered the organizations were conclusory. It also found that the allegations did not plausibly show that the organizations knew she was enslaved or that Cheung used violence or threats to force her participation. The court additionally noted that Chen did not explain how attending protests and events constituted labor or services under the statute, or how the defendants participated in or benefited from the alleged household and sexual services imposed by Cai. The court dismissed the ninth claim.

Tenth claim: negligent hiring, supervision, oversight, and retention. Chen alleged that the defendants employed or supervised Cheung and knew about his use or threatened use of physical and sexual violence. The court assumed, without deciding, that an employment relationship existed. It nevertheless granted the defendants’ motion to dismiss the tenth claim because Chen did not allege specific facts showing that the defendants knew, or should have known through reasonable care, that Cheung had a propensity for the conduct that injured her. The court stated that general allegations that the defendants knew about Cheung’s organizing activities were insufficient.

Eleventh claim: negligent security. Chen alleged that the defendants owed her a duty to provide security at their protests, parades, and religious festivals. The court assumed, without deciding, that the allegations could suggest a duty of care. It dismissed the claim because Chen did not allege non-conclusory facts showing that the defendants knew or had reason to know from past experience that third parties such as Cheung were likely to endanger her. The court found that her theory that the defendants should have known about forced participation was speculative.

Thirteenth claim: RICO. Chen alleged that the defendants participated in a Falun Dafa enterprise and engaged in a pattern of racketeering activity, with TVPRA violations serving as the alleged predicate acts. The court dismissed the RICO claim because Chen did not plausibly allege that the defendants themselves committed a predicate act. Her alternative theory of responsibility for others’ conduct also failed: the allegations portrayed the entities as passive conduits, not central figures in the alleged racketeering scheme, and did not show that a corporate officer knew of or was recklessly indifferent to unlawful activity. Without a sufficiently alleged pattern of racketeering activity by the defendants, Chen could not establish the required RICO violation.

Disposition

Judge Philip M. Halpern granted the corporate defendants’ motion to dismiss. The order dismissed the eighth, ninth, eleventh, and thirteenth claims as asserted against those defendants and granted the motion to dismiss the tenth claim. The Clerk was directed to terminate the motion and terminate all eight corporate entities as parties to the action. The opinion does not state that the dismissals were with or without prejudice.