Strangers in a Strange Land: Developments in NY Personal Injury Law

Even under the current regime, a vast portion of the workforce in New York consists of undocumented aliens. Some observers have even suggested that close to the majority of workers in components of the building trades actually lack the immigration credentials that confer the right to live and/or work in the United States. The political and ethical dimensions of this phenomena are further complicated by the reality that but for the availability of these illegal aliens, New York industry might face a crippling shortage of workers in many sectors.

Much to the consternation of liability carriers everywhere, New York law protects the right of undocumented aliens to recover for their pain and suffering. E.g., Public Admin. of Bronx Cty. v. Equitable Life Ins., 192 A.D.2d 325, 595 N.Y.S.2d 478 (1st Dep’t 1993). In fact, until recently, New York courts often refused to permit discovery of plaintiff’s immigration status based on the argument that the potentially prejudicial effect of such information was so much greater than any its possible probative value that the status was not only inadmissible at trial but outside the proper scope of discovery. E.g., Asgar-Ali v. Hilton Hotels Corp., 4 Misc.3d 1026A, __ N.Y.S.2d __ (NY Sup. Ct. NY Cty. Aug. 6, 2004) (slip op.) This doctrine, of course, facilitated recovery by plaintiffs who lacked a legal right to be employed or even present in the United States but who were nonetheless living and working in the State of past and future lost wages.

However, a 2001 decision by the United States Supreme Court, Hoffman Plastic Compounds, Inc. v. N.L.R.B., 535 U.S. 137 (2001), furnished seemingly-controlling authority that was, in turn, relied upon by a handful of trial-level courts to actually bar such claims. See, e.g., Majlinger v. Cassino Constr. Corp., 1 Misc.3d 659, 766 N.Y.S.2d 332 (N.Y. Sup. Ct. Richmond Cty 2003) (barring claims by injured undocumented alien for lost past and future wages based on federal immigration law). Contra Llerena v. 302 West 12th Street Condominium, 5 Misc.3d 1022A, __ N.Y.S.2d __ (NY Cty Sup. Ct. Oct. 7, 2004) (declining to extend Hoffman Plastic Compounds holding to apply to tort-claims for economic loss).

In Hoffman Plastic Compounds, Inc. v. N.L.R.B., 535 U.S. 137 (2001), the United States Supreme Court construed the Immigration Reform and Control Act of 1986, 8 U.S.C. § 1324a et seq., to bar wage claims by an undocumented alien who had been discharged as retaliation for union activities. The worker in Hoffman Plastic was awarded backpay by the NLRB based on a determination that his erstwhile employer had illegally discharged him in retaliation for union activity. This determination was not apparently challenged on appeal. However, in reversing the award and remanding the action for further proceedings, the Court concluded that allowing such a recovery “runs counter to the policies underlying IRCA.” Hoffman Plastic Compounds, 535 U.S. 154. The Court describing IRCA as a “comprehensive scheme prohibiting the employment of illegal aliens in the United States," and found that it "forcefully made combating the employment of illegal aliens central to the 'policy of immigration law.'" Id. at 147. On this basis, the Court concluded that:

There is no reason to believe that Congress intended to award an undocumented alien lost wages where, but for the event giving rise to the lost wage claim, an alien-employee would have remained in the United States illegally, and continued to work illegally, all the while successfully evading apprehension by immigration authorities. Id. at 155. Nonetheless, New York trial-level courts continued to resist impairing injured but undocumented aliens’ claims. Many of these decisions relied on excruciatingly close readings of the Hoffman Plastic decision. To be sure, Hoffman has not been expanded beyond its specific focus. See Zeng Liu v. Donna Karan Int'l, Inc., 207 F. Supp. 2d 191, 192-93 (S.D.N.Y. 2002) (refusing to apply Hoffman to preclude an illegal alien's claims under the federal Fair Labor Standards Act (FLSA) for work already performed); Singh v. Jutla & C.D. & R's Oil, Inc., 214 F. Supp. 2d 1056, 1061-62 (N.D. Cal. 2002) (allowing an illegal alien who was arrested and detained for fourteen months immediately following settlement of a FLSA suit against his employer could proceed with an FLSA retaliation claim against the employer); Escobar v. Spartan Security Serv., 281 F. Supp. 2d 895, 896-98 (S.D. Tex. 2003) (plaintiff who sued his former employer alleging workplace sexual harassment and retaliation under Title VII of the Civil Rights Act of 1964 was not entitled to back pay because he was an illegal alien at the time of the events but was not barred from his other remedies, including reinstatement and front pay, because he had subsequently attained his legal work status prior to trial). Cf. Murillo v. Rite Stuff Foods, Inc., 65 Cal. App. 4th 833, 77 Cal. Rptr. 2d 12, 23 (Ct. App. 1998) (workplace sexual harassment plaintiff not precluded from emotional distress claims arising from harassment during employment but was barred, in light of IRCA, from wrongful discharge damage claims).

The issue is by no means resolved in three out of the four Departments in New York. However, it is likely that New York courts will implement two fairly-recent Appellate Division decisions which compromise between barring economic claims outright and rejecting the seemingly- clear interpretation of preemptive federal law by the Supreme Court. In Sanango v. 200 East 16th Street Housing Corp., 15 A.D.3d 36, 788 N.Y.S.2d 314 (1st Dep’t 2004), the First Department reversed the trial court’s judgment and concluded that it was no longer possible in light of Hoffman Plastic Compound to argue that state law wholly escaped preemption by IRCA

Since a state law that so frustrates the accomplishment of a federal objective is preempted by virtue of the Surpremacy Clause, it follows ineluctably from Hoffman that New York law, to the extent it would permit plaintiff to recover the wages he would have earned illegally in the Untied States, is preempted by IRCA.

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Hoffman compels the conclusion that plaintiff cannot recover lost United States wages he might have unlawfully earned, had he not been injured, whether it was [his employer] (by hiring plaintiff without requesting documentation of his right to work) or plaintiff himself (by tendering false documents to [his employer]) who committed the IRCA violation that resulted in the unlawful employment. In this regard, we believe that plaintiff’s acceptance of unlawful employment should be deemed to constitute misconduct contravening IRCA’s policies whether or not he submitted false documents so as to expose himself to potential criminal liability.

Sanango, 15 A.D.3d at 41-42, 788 N.Y.S.2d at 319-20.

The ultimate “punchline” of the Appellate Division’s decision, however, was its conclusion that:

We are unaware, however, of any federal policy that would be offended by awarding an undocumented alien damages for lost earnings based on the prevailing wage in the alien’s country of origin. Therefore, while we vacate plaintiff’s existing award for lost earnings, we remand for a new trial to afford plaintiff an opportunity to prove the wages that, but for his injuries, he would have been able to earn in his home country.

Id., 15 A.D.3d at 44, 788 N.Y.S.2d at 321.

Notably, plaintiff in Sanango was awarded $1,000,000 for past pain and suffering and $1,452,000 for future pain and suffering. The awards that were vacated by the Appellate Division consisted of additional recoveries of $48,000 for past lost earnings and $48,000 for future lost earnings. The opinion was unclear whether the future earnings award was a total of $48,000 or $48,000 per year for a total of 29.2 years of future work-life expectancy. Plaintiff was injured at construction site when he fell from an unidentified type of scaffold and fractured a vertebrae and tore his rotator cuff.

Similarly, in Babluena v. IDR Realty, LLC, 13 A.D.3d 285, 787 N.Y.S.2d 35 (1st Dep’t 2004), the Appellate Division (with one dissenting justice) vacated a trial-court’s grant of partial summary judgment dismissing claims for lost wages by an undocumented alien to the extent that plaintiff would be limited to recovery of wages he could have earned in his native country. Notably, the dissent in Babluena addressed both the Babluena and Sanango facts and holdings.

Numerous questions remain unanswered by the Appellate Division. From a practical standpoint, discovery remains a complete cipher, but it is presumed that a cottage industry may develop as expert economists are retained to provide cogent analyses of industry, opportunity and earnings potential in the countries from which illegal immigrants to the United States have fled. Moreover, it remains to be seen how the Court of Appeals will treat these issues. Of note, both the New York Trial Lawyers Institute and New York State Attorney General participated in both matters as amici curiae, and leave was granted by the Appellate Division to the Attorney General to appeal to the Court of Appeals. This area of law cannot be considered resolved by a long shot.