Young mother pushing stroller.

A class action by Boies Schiller Flexner and Towards Justice claiming au pairs are underpaid has cleared another major hurdle. On Friday, U.S. District Judge Christine Arguello in Colorado certified two classes and multiple subclasses of more than 91,000 J-1 Visa au pairs.

Claiming antitrust, RICO and wage law violations, the suit alleges au pair wages were set by the sponsoring organizations at $195.75 per week “as part of an illegal agreement to suppress wages and accordingly inflate their own fees.” For families with au pairs, that works out to 45 hours a week of childcare for $4.35 an hour.

The defendants have countered that the families also provide room and board, and that ups the actual au pair compensation to minimum-wage levels. (See my prior coverage of the suit: Au Pairs in the Crosshairs: Boies Schiller Suit May Upend the Program). They also argued that they aren't the au pairs employers—the host families are. The suit, however, does not seek money from the families. It only names the 15 organizations formally designated by the State Department to recruit and place au pairs.

“This court already held that the employer(s)-employee relationship between defendants, host families, and au pairs is a merits question common to all parties,” Arguello wrote.

“Concentrating litigation of plaintiffs' claims in a class action will avoid identical efforts across multiple suits in a number of state and federal courts,” the judge continued. “Class action is also the superior method for adjudicating this 'because it involves the relatively small claims of low-wage workers,' some with limited English proficiency or currently living abroad, 'and most of whom' were allegedly paid below the minimum wage.”

 

This Check Is (Not) in the Mail

Winning isn't always enough—you also have to collect, as this global fight between two Russian titans shows.

Baker McKenzie client Vitaly Smagin has been trying since 2014 to get paid after an arbitration panel in London awarded him $84 million. The judgment stemmed from a dispute with his former partner, ex-Russian lawmaker and businessman Ashot Yegiazaryan, involving an investment in Moscow's Europark shopping mall and a Moscow hotel.

Yegiazaryan, who fled Russia after he said his children received death threats, lives in Beverly Hills now. So Smagin filed a petition in the U.S. District Court for the Central District of California to confirm the arbitration award.

U.S. District Judge Manuel Real said yes, and ordered Yegiazaryan to pay up. Yegiazaryan has the money—he personally received $188 million in proceeds from another, unrelated arbitration (one where the loser actually honored the judgment)—but he put it in a trust in Lichtenstein.

Not that he volunteered that information.

Smagin's lawyers only found out by monitoring Yegiazaryan's California divorce proceedings, intervening in the case, and successfully moving to unseal documents.

But when Smagin made his claim as a creditor, Yegiazaryan and his wife called off their divorce, according to Smagin's lawyers.

“Yegiazaryan and his wife ultimately dismissed their divorce case to avoid having to satisfy Mr. Smagin's award and judgment as part of an ultimate divorce judgment. Despite dismissing the divorce, Mr. and Mrs. Yegiazaryan still live apart … Unfortunately for them, unsealing of the documents had already let the Lichtenstein cat out of the bag,” wrote Baker McKenzie senior counsel Bruce Jackson for Smagin. The team also includes Michael A. Pollard and Nicholas O. Kennedy.

In the latest twist, Smagin filed a new suit for recovery of fraudulent conveyance against Yegiazaryan and the Lichtenstein trust, CTX Treuhand AG, seeking to void the allegedly fraudulent transfer of assets. The trust is represented by Robert D. Weber and Bridget Russell of Sheppard Mullin Richter & Hampton.

But last week, the judge cut CTX loose for lack of jurisdiction. “The trust was set up in Lichtenstein, not California,” Real wrote on Jan. 31. “Plaintiff has never resided in California. Plaintiff does not show that CTX caused any harm in California. Rather, plaintiff's harm was felt in Russia, where he resides.”

However, the judge kept Yegiazaryan, who is represented by Michael S. Adler of Tantalo & Adler, on the hook in the case. The judgment has now grown to $93 million with interest, but something tells me the check is not in the mail.

 

In Memoriam: Mel Weiss, Hero and Villain

I don't normally write obituaries, but some lawyers have such an impact on the profession that I feel compelled. Melvyn Weiss, who died in his sleep on Feb. 2 at the age of 82, was one of them.

The co-founder of now-defunct Milberg Weiss Bershad Hynes & Lerach, he was a giant of the plaintiffs bar, from his spectacular success as a class action pioneer to his 30-month federal prison sentence for illegally paying named plaintiffs.

Weiss had been diagnosed with ALS in June, and “lived his last days in the warm company of friends and family, who loved and respected him deeply,” his son's law firm, Seeger Weiss announced on Friday.

Read my full story here.

 

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