SAIPAN JUDGE CONFIRMS RICO CLAIM

Byline: Arthur Friedman / Leonard McCants

NEW YORK — Setting the stage for a landmark sweatshop trial, a U.S. district judge in the commonwealth of the Northern Mariana Islands has upheld the complaint in a class-action lawsuit alleging sweatshop conditions in Saipan.
The complaint charges that more than 13,000 garment workers in Saipan often work 12-hour days, seven days a week, in unsafe, unclean conditions that violate U.S. labor law and international treaties.
“The Saipan workers are going to have their day in court,” Al Meyerhoff of Milberg Weiss Bershad Hynes & Lerach, a lead attorney for the plaintiffs, said in a statement. “This case is going to trial.”
In a 55-page decision handed down Monday, U.S. District Judge Alex R. Munson held that these allegations, if proven at trial, were sufficient to establish liability of both the factories and retailers for engaging in a “conspiracy” to use indentured labor in violation of racketeering laws.
While claims under the Racketeering Influenced Corrupt Organizations Action, or RICO, were upheld, the court disallowed certain other allegations, such as violations of the Alien Tort Claims Act. However, those were dismissed “without prejudice” to plaintiffs amending the complaint to include more detail or allegations of “state action” involving the People’s Republic of China.
“Since China’s role in violating human rights on America soil is manifest, we should have little difficulty adding state action allegations,” said plaintiff attorney Michael Rubin of Altshuler Berson Nussbaum Rubin & Demain. “We can easily overcome the remaining pleading hurdles, and will do so well within the 20 days the judge has required.”
One of the primary claims in the lawsuit is that the Saipan garment industry employs foreign workers, primarily from China, who were allegedly forced to pay “recruitment fees” as high as $7,000 to come to the U.S., creating an illegal indentured status.
John Keker, an attorney for Gap Inc., said Meyerhoff and Rubin’s statements that the case will go forward is “incredibly irresponsible” because the plaintiffs will have to file a new complaint and replead their arguments regarding the Alien Tort Claims Act.
Since the case was filed in 1999, 19 retailers and vendors have settled the claims against them and agreed to a system of independent monitoring at the Saipan factories that produce their apparel. The settlement also stipulates that no company admits any wrongdoing.
In addition to Gap Inc., the remaining defendants are: J.C. Penney Co., Target Stores, Associated Merchandising Corp., The Limited, Lane Bryant, Levi Strauss, Talbots and Abercrombie & Fitch.
In addition, a hearing for class certification is set for Feb. 14. The court must rule whether the case can proceed as a class action before it rules on whether to approve the settlement of $8.75 million.

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