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Guan v. Ran

United States District Court, E.D. Virginia, Alexandria Division

July 6, 2017

FEI GUAN, Plaintiff,
v.
BING RAN, et al., Defendants.

          MEMORANDUM OPINION

          JAMES C. CACHERIS JUDGE

         This 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.

         I. Background

         Fei 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.

         Defendant 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.

         In early 2008, while Plaintiff was living in Japan, [1]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, [2] id., ¶ 31, and began working at AdSTM in early October, id., ¶ 94.

         Plaintiff's 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.

         Several 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.

         Prior 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.

         Beginning 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.

         Plaintiff's 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.

         While 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., ¶ 152.

         Plaintiff 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. 33.]

         Oral argument was held on June 29, 2017. Having been fully briefed and argued, these motions are now ripe for disposition.

         II. ...


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