Congress Amends the TVPRA to Correct Ninth Circuit’s Erroneous Ruling in Ratha
August 1, 2023
Last year, in Ratha v. Phatthana Seafood, the Ninth Circuit held that civil liability under the Trafficking Victims Protection Reauthorization Act (TVPRA) does not extend to those who attempt to benefit from forced labor. After the court denied en banc review, the Human Trafficking Legal Center and other human and workers’ rights organizations asked Congress to amend the statute to clarify its intent, which Congress did just nine months after the decision. In this post, we discuss the Ratha decision and Congress’s immediate actions to overturn it.
The facts of the case are stark: Cambodian villagers filed a lawsuit under the Trafficking Victims Protection Reauthorization Act (TVPRA) alleging that they were trafficked into Thailand to work in forced labor at Phatthana Seafood’s shrimp processing plant. Phatthana Seafood allegedly used debt bondage, confiscation of identity documents, threats of arrest, horrific living conditions, as well as physical and verbal abuse to force the villagers to package shrimp for sale. The majority owner of the Phatthana Seafood factory, along with other Thai seafood producers, founded another company, Rubicon, to expand seafood sales into the United States.
The complaint alleged that Rubicon was an active—and crucial—participant in this commercial venture to sell seafood manufactured in Thailand in the United States. And, in 2011, Rubicon brought more than two tons of tainted shrimp into the United States for delivery to Walmart. But Walmart turned the shrimp away because it was made with forced labor.
Forced labor was so pervasive in the shrimping industry—and in Rubicon’s supply chain—that even Walmart declined to buy it. Notably, before the district court, Rubicon did not even dispute that there was a triable issue of fact as to four plaintiffs’ claims that they were subjected to forced labor. Nor did it dispute that it was in a venture with Phatthana Seafood. In other words, there was no real dispute that Rubicon knowingly participated in a venture to sell shrimp made with the plaintiffs’ forced labor in the United States.
And yet, the district court dismissed the case against Rubicon, and the Ninth Circuit affirmed.
The Ninth Circuit’s Narrowing of the TVPRA
The TVPRA is a comprehensive statutory scheme to combat the complex and transnational nature of human trafficking. The TVPRA, codified in Chapter 77 of Title 18 of the U.S. Code, covers both criminal and civil actions. Civil actions are essential to provide access to justice for survivors. As Congress intended, civil cases under the TVPRA increase the financial risks to those who seek to profit from forced labor.
The Ninth Circuit found Rubicon could not be liable for one reason—because Walmart had turned the shrimp away. The Court claimed that Rubicon had only attempted to benefit from the venture. Advocates in the anti-trafficking community were shocked to see the Ninth Circuit’s holding that the civil remedy under the TVPRA did not include liability for attempt or conspiracy to benefit.
Since the TVPRA was first passed in 2003, Congress has repeatedly acted to expand the law’s reach. These bipartisan amendments reflect a long-standing congressional commitment to combat forced labor and human trafficking. Recognizing the pervasive issue of forced labor in global supply chains, Congress acted in 2008 to expand civil liability under 18 U.S.C. § 1595 to include those who knowingly benefit from participation in a venture involved in forced labor and human trafficking. That same year, Congress also added Section 1596, which provides extraterritorial jurisdiction for violations of the TVPRA.
Congress created a predicate act structure within the TVPRA to ensure that the civil remedy is coextensive with the criminal violations in Chapter 77. There is no dispute that Section 1589(b) defines a perpetrator to include those who knowingly benefit, financially or by receiving anything of value, from participation in a venture that has engaged in providing or obtaining forced labor. Nor is there any dispute that Section 1594 prohibits any attempt or conspiracy to violate Section 1589(b). It follows that, in creating a civil remedy that is coextensive with the criminal liability under Section 1589, Congress intended that those who knowingly attempt to benefit from participation in a venture involved in forced labor be held to account.
Ratha is precisely the type of case that Congress sought to reach with its 2008 amendments. Rubicon and Phatthana Seafood exploited the U.S. markets by earning significant profit selling shrimp made at a discount with forced labor. Their conduct not only harmed the villagers forced to work in abusive and horrific conditions but also Louisiana-based shrimpers, who could not compete with the low prices of shrimp produced with forced labor. Rubicon is alleged to have taken every action within its control to profit from the abuse and exploitation of the plaintiffs in the Phatthana Seafood factory. But Rubicon was able to avoid any liability.
The Ninth Circuit’s holding that civil liability under 18 U.S.C. § 1595 did not extend to an “attempt” to knowingly benefit was the first of its kind. It was also contrary to Congress’s comprehensive accountability strategy to combat human trafficking. This congressionally created strategy contains interlocking parts: Customs and Border Patrol (“CBP”) detention orders on goods made with forced labor, civil cases to hold perpetrators accountable, and federal criminal enforcement.
For example, Section 307 of the United States Tariff Act of 1930 (“Tariff Act”) permits CBP to prohibit goods made from forced labor abroad from entering the U.S. market. The Ninth Circuit’s narrow reading of the TVPRA puts the Tariff Act and the TVPRA directly at odds. Under the Court’s holding, forced labor survivors who produced goods blocked from entry to the U.S. market would be precluded from civil recovery simply because the U.S. Government correctly refused to admit the tainted goods.
By reading attempt out of venture liability in civil actions, the Ninth Circuit created an untenable conflict between CBP’s enforcement actions and survivors’ access to remedy. In other words, the Ninth Circuit’s ruling protects some of the worst actors: those who have come to CBP’s attention for forced labor violations.
Congress’s Quick Action to Remedy the Error
After the Ninth Circuit declined to take the case en banc, a group of advocacy organizations discussed the misinterpretation with members of Congress, their staffs, and executive branch officials—alerting them to the potential impact of the decision.
We provided examples of successful claims that could no longer be brought. Ricchio v. McLean is one such case. In Ricchio, a sex trafficker held the plaintiff in a motel room, repeatedly raping her, drugging her, and grooming her for forced prostitution, allegedly with the knowledge and “enthusiastic” support of the motel owner. The plaintiff escaped before the trafficker managed to arrange any commercial sex acts with a customer. The plaintiff filed suit against the trafficker and the motel owner, and she prevailed in the First Circuit. But those claims would likely be dismissed under the Ninth Circuit’s holding.
Similarly, if an individual is running a child sex trafficking operation at the direction of a leader, but law enforcement confiscates the proceeds before the illicit profits are transmitted to that leader, the most culpable individual—the leader of the organization—will be able to avoid any civil liability under the TVPRA.
Congress has followed Ratha closely, understanding that it is an important test case. For example, Shawna Bader-Blau, the Executive Director of the Solidarity Center, testified at a hearing on the Global Fight to End Slavery at the United States Senate Foreign Relations Committee. She told the Committee:
Some of the best tools currently available are provisions in the 2008 reauthorization of the Trafficking Victims Protection Act and the amended Tariff Act. The TVPRA provides civil action to victims of trafficking for forced labor in supply chains. However, we note with concern that a federal district court in California, in Ratha v. Phatthana Seafood, interpreted the TVPRA to essentially read out of the statute liability for those who knowingly benefit from forced labor in their global supply chain—in this case Thai shrimp produced by trafficked Cambodian workers and imported into California.
We proposed clarifying amendments to Congress based on the text of the Ninth Circuit decision. In each proposal, we were careful to ensure that we included in the text that the amendment was “clarifying” because we did not want to impact pending cases in other jurisdictions. We wanted to preserve a possible path to recovery for these specific plaintiffs. And it was clear that this was, in fact, a clarifying amendment in response to the Ninth Circuit’s misinterpretation of the text.
Congress shared our concerns and agreed with the proposed clarifying amendment to make clear that, since 2008, the TVPRA has included attempt and conspiracy civil liability and that the panel decision was wrongly decided. Specifically, Congress amended Section 1595 by inserting “or attempts or conspires to benefit,” after “whoever knowingly benefits”—a direct response to the Ninth Circuit’s misinterpretation of the language in this parenthetical. The relevant language now reads (emphasis added):
An individual who is a victim of a violation of this chapter may bring a civil action against the perpetrator (or whoever knowingly benefits, or attempts or conspires to benefit, 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) ….
The Clarifying and Technical Amendment passed without a single vote in opposition—less than nine months after the Ninth Circuit’s decision.
The message from Congress is clear: Ratha was wrongly decided. Rubicon must be held accountable.
The case is back before the Ninth Circuit, after the district court denied the plaintiffs’ motion to reopen the case. It is now up to the Ninth Circuit to abide by Congress’s clear intent and allow the plaintiffs’ case against Rubicon to proceed to a jury.