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Ninth Circuit:
Amendments to Trafficking Law Do Not Apply Retroactively
Ikuta Says ‘Clarifying’ Label, Timing of Changes, Do Not Indicate Contrary Legislative Intent; Graber Dissents
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals held yesterday that a 2022 amendment labeled a “clarifying update” to legislation providing for civil remedies to victims of human trafficking, which extends liability to attempted violations, may not be applied retroactively as it actually operates as more than a mere clarification.
Congress enacted the amendment shortly after the dismissal in the present case due to the attempted-only nature of the conduct. The appeal was from an order denying a motion to reopen a final judgment and to apply the statute as amended.
The dispute arose in a case in which the plaintiffs—who allege that they suffered abuse amounting to human trafficking in Thailand while working in seafood processing factories—filed a complaint in 2016 against their Thai employers, Phatthana Seafood Co., Ltd. and S.S. Frozen Food Co., Ltd.
The complaint by plaintiffs Keo Ratha, Sem Kosal, Sophea Bun, Yem Ban, Nol Nakry, Phan Sophea, and Sok Sang also asserts claims against Rubicon Resources, LLP, a U.S. company that domestically sells seafood processed at the Thai factories. They sued on the basis that Rubicon is a beneficiary of the trafficking under the Trafficking Victims Protection Reauthorization Act (the “TVPRA”), codified at 18 U.S.C. §1595(a).
Wording of Statute
At the time of the suit, the section provided:
“An individual who is a victim of a violation of this chapter may bring a civil action against the perpetrator (or whoever knowingly benefits, financially or by receiving anything of value from participation in a venture which that person knew or should have known has engaged in an act in violation of this chapter) in an appropriate district court of the United States and may recover damages and reasonable attorneys’ fees.”
Following successful motions for summary judgment by the defendants, District Court Judge John F. Walter of the Central District of California ordered entry of judgment in favor of Rubicon because it had not completed sales of the products—and thus to obtain any benefits—because of negative publicity surrounding the working conditions at the facilities.
The Ninth Circuit affirmed on appeal in February 2022 and the U.S. Supreme Court denied certiorari.
Legislation Signed
On Jan. 5, 2023, President Joseph Biden signed the Abolish Trafficking Reauthorization Act (the “ATRA”) into law which provides that “[s]ection 1595(a) of title 18, United States Code, is amended by inserting ‘or attempts or conspires to benefit,’ after ‘whoever knowingly benefits.’ ”
On Jan. 26, 2023, the plaintiffs filed a motion to set aside the judgment under Federal Rule of Civil Procedure 60(b)(6)—which provides that “the court may relieve a party…from a final judgment” for “any…reason that justifies relief”—on the grounds that the ATRA operated to retroactively clarify that §1595(a) authorizes suit against those who attempt to benefit from human trafficking.
Circuit Judge Sandra S. Ikuta wrote yesterday’s opinion affirming Walter’s denial of relief under Rule 60(b)(6). She wrote: “[W]e conclude that ATRA does not apply to pre-enactment conduct, including the conduct that is the basis of plaintiffs’ claims. Therefore, the district court did not abuse its discretion in denying plaintiffs’ motion to reopen the final judgment under Rule 60(b)(6).” Circuit Judge Danielle J. Forrest joined in the opinion and Senior Circuit Judge Susan P. Graber dissented.
Of the original defendants, only Rubicon is party to the appeal.
Inconsistent Judicial Decisions
In arguing that the ATRA applies to pre-enactment conduct, the plaintiffs acknowledge that there is a presumption against retroactivity but rely on an exception for amendments to statutes containing ambiguities that have led to inconsistent judicial decisions. In such cases, Ikuta noted that Congress acts to clarify the law by confirming what the law always meant and said that “[w]e apply this exception narrowly.”
The judge noted that a court must look to the time and circumstances surrounding the enactment to determine if Congress intended the amendment to be a clarification and “we do not give an enactment’s title dispositive weight, but consider it in a larger context.”
Ikuta said:
“To determine whether this amendment clarified what the TVPRA had meant all along, we first consider whether, prior to the amendment, § 1595(a) was ambiguous and generated inconsistent judicial decisions. We have not discerned any such ambiguity or inconsistency.”
The jurist reasoned that the cases cited for the alleged judicial inconsistency did not address the same issue as the earlier Ninth Circuit decision in the present case (“Ratha I”)—whether the statute applies to attempts to benefit from another’s violation of the law.
She wrote that “Ratha I…was the first case to address whether a defendant’s attempt to benefit from TVPRA violations satisfied § 1595(a)’s ‘knowingly benefits’ requirement” and “[n]o circuit court decision following Ratha I has disagreed with our interpretation.”
Other Circumstances
Looking to other circumstances to determine whether Congress intended the statute to be a clarification, she wrote:
“First, we consider textual indications that could illuminate Congress’s intent. Here, the only textual indicator of this sort is the label Congress used for the pertinent section of ATRA: a ‘Technical and Clarifying Update to Civil Remedy.’….We conclude that this label does little to establish that Congress intended to clarify the intent of the prior Congress that enacted the TVPRA. Congress did not describe the enactment as a ‘clarification’ of § 1595, but rather as a ‘clarifying update’ to the TVPRA.”
She continued:
“When software is updated,…it is modified to make the new version run more smoothly going forward. Similarly, updating a policy involves adapting it to new circumstances or fixing deficiencies going forward. The primary connotation of ‘update,’ therefore, is one of forward-looking improvement.”
Ikuta noted that there is “no contemporaneous legislative history regarding the enactment of ATRA” and declined to consider the individual views of certain legislators or statements by advocacy groups made to Congress as part of a lobbying effort for the enactment of the ATRA.
Ikuta turned to whether the timing of the ATRA indicates that it was enacted in response to the decision in Ratha I. She reasoned:
“Congress enacted ATRA five years after the district court’s final judgment and almost a year after our opinion in Ratha I. Indeed, Congress did not enact ATRA until after the Supreme Court denied plaintiffs’ petition for certiorari. Congress’s amendment in ATRA, which extended liability to those who attempted to benefit from a TVPRA violation, is thus better understood as effecting a substantive change.”
Rule 60(b)(6)
The jurist remarked:
“Plaintiffs argue that the district court should have reopened the final judgment under Rule 60(b)(6) due to the enactment of ATRA, and ask us to address what appears to be a question of first impression: whether a court may reopen a final judgment under Rule 60(b)(6) based on a legislative change in law, rather than a judicial change in law.”
In declining to address the matter, she wrote:
“We need not resolve the novel question whether Rule 60(b)(6) may be applied on the basis of changes in legislation, however. For the reasons explained below, we conclude that ATRA did not clarify what § 1595(a) in the TVPRA meant all along, and therefore does not apply to events that occurred before the enactment of ATRA. Because ATRA would not apply to the conduct that is the basis of plaintiffs’ claims, the district court did not err in declining to reopen the final judgment here.”
Graber’s View
Graber disagreed with the majority’s view that the other circuit cases were not in conflict with Ratha I, saying:
“The majority opinion engages in an extensive analysis aimed at distinguishing an ‘attempt to benefit’ from an ‘attempt to violate,’ by characterizing a party who engages in the former as a mere beneficiary and one who engages in the latter as a ‘perpetrator.’ ”
Noting that the TVPRA allowed for criminal penalties for attempts but omitted the “attempt” language from §1595(a)’s civil remedies, he said:
“When Congress enacted the [TVPRA]…it clearly intended to make the criminal and civil provisions coextensive. But the statute was ambiguous because, in one place, the civil provision omitted a phrase regarding ‘attempt.’…. As soon as the Supreme Court declined to grant certiorari in Ratha I, Congress acted immediately—within two weeks— to resolve the ambiguity and to correct our error. It did so with the label ‘technical and clarifying,’ a label that is entitled to great weight. In addition, Congress made the amendment effective immediately, so there is no uncertainty about Congress’s intent concerning retroactivity.”
The case is Ratha v. Rubicon Resources, LLC, 23-55299.
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