United States District Court, E.D. Virginia, Alexandria Division
C. CACHERIS JUDGE
matter is before the Court on Defendant Bing Ran's
("Defendant Ran" or "Ran"), Defendant
Alice Guan's ("Defendant Guan" or
"Guan"), Defendant Advanced Systems Technology and
Management, Inc.'s ("AdSTM"), and Defendant Qi
Tech, LLC's ("Qi Tech") (collectively, the
"Defendants") motions to dismiss for failure to
state a claim under which relief can be granted. [Dkts. 38,
40, 44, 46, 47.] For the following reasons, the Court will
grant Defendants' motion to dismiss Counts I-III. The
Court will also grant Defendants' motion to dismiss Count
V due to its failure to satisfy Article Ill's case or
controversy requirement. Finally, the Court will decline to
exercise supplemental jurisdiction over Count IV.
Guan ("Plaintiff") brings this lawsuit against
Defendants for claims arising under the Victims of
Trafficking and Violence Protection Act of 2003
("TVPA" or the "Act"), 18 U.S.C. §
1581 et seq., and Virginia common law. All of
Plaintiff's claims result from payments he sent to
Defendant Ran from 2008 until 2014. The following facts are
taken from Plaintiff's Amended Complaint and, for the
purposes of this motion, are presumed true.
AdSTM is an engineering and consulting firm that is
headquartered in Northern Virginia. Am. Compl., ¶ 5.
Defendant Guan, Plaintiff's sister, founded AdSTM in
1996. Id., ¶ 3. In 2000, Defendant
Ran-Defendant Guan's then-husband-began assisting her in
running the company. Id., ¶¶ 3-4. Though
the two are now divorced, Defendant Guan and Defendant Ran
still jointly manage AdSTM today. Id., ¶ 5.
early 2008, while Plaintiff was living in Japan,
Defendant Guan offered Plaintiff a job with
AdSTM as an analyst. Am. Compl., ¶ 20. Plaintiff alleges
that Defendant Guan verbally represented that his annual
salary would be between $70, 000 and $80, 000, id.,
¶ 22, although the actual salary field on his February
2008 offer letter was left blank, id., ¶ 21.
AdSTM also offered to sponsor Plaintiff's H-1B temporary
work visa, so he accepted the job. Id., ¶¶
24, 28-29. After obtaining the advice of an immigration
attorney, Defendant Guan submitted Plaintiff's visa
paperwork in April 2008. Id., ¶ 29.
Plaintiff's visa application was subsequently approved.
He moved to the United States with his family in late
September 2008,  id., ¶ 31, and began working
at AdSTM in early October, id., ¶ 94.
allegations center on two different agreements. First,
Plaintiff focuses on a Parenting, Support, and Property
Settlement Agreement (the "PSA") negotiated between
Defendants Guan and Ran during their divorce. Am. Compl.,
¶¶ 45- 69. The PSA set forth various terms
regarding the management and ownership of AdSTM.
Id., ¶ 46. On or about June 10, 2008,
Defendants Guan and Ran agreed upon an amendment to the PSA
(the "June 2008 Amendment"), which provided in part
for the continued employment of Plaintiff at AdSTM, based
upon the following terms:
As long as AdSTM has revenue of not less than $3M/year, Bing
Ran and AdSTM shall employ . . . Fei Guan continuously for 5
years . . . and proactively sponsor [his] H-l and Green Card
processes. [His] salary will be $75K/year. [He] will give
Bing Ran half of [his] net income from AdSTM.
Id., ¶ 51. The June 2008 Amendment also
provided that if Plaintiff refused or failed to make any
payments after being reminded to do so, AdSTM would
"have no obligation to pay and hire" him.
Id. Plaintiff alleges that he had no knowledge of
the terms of this agreement prior to his arrival to the
United States. Id., ¶¶ 52-53.
months later, after Plaintiff had already moved to the United
States and started working at AdSTM, Defendants Guan and Ran
amended the PSA a second time (the "October 2008
Amendment"). Am. Compl., ¶ 56. The October 2 008
Amendment adjusted his term of employment at AdSTM from five
years to approximately three years. Id., ¶ 58.
The requirement that Plaintiff pay half of his net income
each month to Defendant Ran remained the same. Id.
Plaintiff again alleges that he had no knowledge of the terms
of this agreement at the time that it was executed.
Id., ¶¶ 62-65.
to Plaintiff's first day of work in early October 2008,
Plaintiff alleges that Defendant Guan informed him that he
would be required to pay half of his monthly net income to
Defendant Ran. Am. Compl., ¶ 70. Plaintiff also alleges
that Defendant Guan told him that if he failed to make these
payments, his employment would be terminated and he would
have no choice but to leave the United States. Id.,
¶ 71. Plaintiff accepted this arrangement based upon an
alleged fear of his and his family's immigration
statuses. Id., ¶¶ 76-77.
in October 2008 until August 2014, Plaintiff sent a check for
one-half of his net income to Defendant Ran each month,
totaling approximately $160, 000. Am. Compl., ¶¶
97-98, 118-19. In early September 2014, Plaintiff alleges
that Defendant Ran told Plaintiff he could stop sending these
monthly payments. Id., ¶ 122. Two months later,
Defendant Ran asked Plaintiff to execute a legal agreement
indicating that the payments Plaintiff had made to Defendant
Ran were related to personal loans. Id., ¶ 123.
Plaintiff alleges that Defendant Ran had never previously
described these payments as loans. Id., ¶ 124.
Furthermore, the agreement Defendant Ran wanted Plaintiff to
sign did not describe them as loans. Id., ¶
127. Eventually, Defendant Ran dropped the issue.
Id., ¶ 128.
allegations also involve a second agreement: an
"Employee Proprietary Information and Non-Compete
Agreement" (the "Non-Compete Agreement").
Plaintiff alleges that this agreement prevented him from
discussing his compensation with anyone but his direct
supervisor (Defendant Guan) or higher officers at AdSTM (at
the time, Defendant Ran, who was CEO), submitting his resume
to any potential employers who directly competed against
AdSTM's products and services, and working for any person
or entity who had previously paid AdSTM for services and with
whom Plaintiff had any dealing while employed at AdSTM.
Id., ¶¶ 39, 41-42, 88-89. It also provided
for a permanent injunction in the event of any breach or
threatened breach. Id., ¶ 40. Plaintiff argues
that, as a direct result of this Non-Compete Agreement, he
was prevented from seeking another H-1B visa sponsor.
Id., ¶ 80.
employed at AdSTM, Plaintiff alleges that he also performed
work for another company, Qi Tech. Am. Compl., ¶ 147. Qi
Tech had entered into numerous Mentor/Protege Agreements with
AdSTM for the provision of management and support services.
Id., ¶ 148. Plaintiff alleges that, under
Defendant Ran's direction, he was required to perform
work for Qi Tech from October 2010 until August 2014.
Id., ¶ 151. Plaintiff acknowledges that he was
paid a bonus from Qi Tech in 2011, as well as numerous other
bonuses from AdSTM. Id., ¶¶ 131-32. In or
around October 2013, Plaintiff asked Defendant Ran to stop
providing him these bonuses and, in exchange, Plaintiff would
no longer have to send Defendant Ran half of his monthly
income. Id., ¶ 138. Defendant Ran allegedly
declined Plaintiff's offer. Id., ¶ 139. In
total, Plaintiff received approximately $79, 000 in bonuses
from October 2010 until September 2014. Id., ¶
144. Plaintiff also admits that he was reimbursed for certain
expenses he incurred on behalf of Qi Tech. Id.,
filed the instant case on March 24, 2017. [Dkt. 1.] The
Amended Complaint alleges five different counts, including:
(1) peonage, in violation of the TVPA, against Defendants
Guan, Ran, and AdSTM; (2) benefitting financially from
peonage, slavery, and trafficking in persons, in violation of
the TVPA, against all Defendants; (3) trafficking, in
violation of the TVPA, against Defendants Guan, Ran, and
AdSTM; (4) unjust enrichment against Defendants Guan and Ran;
and (5) a request for a declaratory judgment to void
Plaintiff's Non-Compete Agreement against AdSTM. [Dkt.
argument was held on June 29, 2017. Having been fully briefed
and argued, these motions are now ripe for disposition.