Ratha v. Rubicon Resources, LLC

Facts and statutory framework

The Trafficking Victims Protection Reauthorization Act’s civil-remedy provision, 18 U.S.C. § 1595(a), lets a victim of forced labor sue not only the direct perpetrator but anyone who “knowingly benefits” from participation in “a venture” the person knew or should have known was engaged in trafficking. (168 F.4th at p. 547.) The plaintiffs — Keo Ratha and six other villagers from rural Cambodia — allege they “were forced to work at seafood factories in Thailand,” and that Rubicon Resources “marketed in the United States seafood products from those factories, thereby participating in a venture that benefited from human trafficking.” (Ibid.)

The district court entered summary judgment for Rubicon, reasoning that Rubicon “only attempted to benefit from Plaintiffs’ forced labor,” and that — as the statute then read — § 1595(a)’s civil remedy “did not encompass ‘attempt’ liability.” (168 F.4th at p. 547.) A three-judge panel agreed in Ratha v. Phatthana Seafood Co. (Ratha I) (9th Cir. 2022) 35 F.4th 1159, “creating a rift with two other circuits’ interpretation of the statute” (Judge Graber dissenting). (Id. at p. 547.) “Just a few months after” Ratha I, and “mere days after the Supreme Court denied certiorari, Congress passed a bill” — the Abolish Trafficking Reauthorization Act of 2022 (ATRA) — “clarifying that defendants are civilly liable when they attempt to benefit, but do not succeed in benefitting, from human trafficking.” (Ibid.)

Procedural history

After ATRA passed, the plaintiffs moved under Federal Rule of Civil Procedure 60(b)(6) for relief from the summary judgment entered in Rubicon’s favor. (168 F.4th at p. 547.) The district court denied the motion, holding “Congress did not intend for attempt liability to apply retroactively.” (Ibid.) The plaintiffs appealed, and the Ninth Circuit took the case en banc, ultimately reversing and remanding. (Id. at pp. 547–548; Disposition: “REVERSED and REMANDED.”) Judge Callahan, joined by Judge M. Smith, dissented. (Id. at p. 548.)

Issue

Does Landgraf’s retroactivity framework govern a “clarifying” amendment to a civil statute, and, applying it, does ATRA’s clarification that 18 U.S.C. § 1595(a) reaches defendants who attempt to benefit from human trafficking apply retroactively — so that the plaintiffs were entitled to Rule 60(b)(6) relief from a summary judgment premised on the pre-amendment reading? (168 F.4th at pp. 547–548.)

Holding

Reasoning

1. One framework for civil retroactivity: Landgraf. The court reaffirmed that Landgraf supplies “a three-step framework” for whether a civil statutory amendment applies retroactively: read the text for a clear retroactive effective date; if none, ask whether applying the statute would have a “retroactive effect” (impairing rights, increasing liability for past conduct); and, if so, apply the presumption against retroactivity unless Congress’s contrary intent is clear. (168 F.4th at pp. 548–549, citing Landgraf, supra, 511 U.S. at pp. 280, 286.)

2. Overruling the “clarifying amendment” exception. The decision’s most consequential move was housekeeping of circuit law. The court acknowledged its precedents had variously held that “no Landgraf analysis is required if an amendment merely serves to clarify” the law, or that “there is no presumption against retroactivity for ‘clarifying’ amendments.” (168 F.4th at pp. 548–549.) “To the [extent those cases held that] clarifying amendments to civil statutes fall outside” Landgraf, the en banc court overruled them: clarifying amendments “are not exempted” from Landgraf’s requirements. (Id. at p. 549.) A clarifying purpose is not a doctrinal bypass; it is instead evidence bearing on whether Congress intended the enactment to apply retroactively. (Ibid.)

3. ATRA reflects a clear intent to apply retroactively. Applying that framework, the court found the indicia of retroactive intent satisfied. ATRA was enacted as a “clarifying” update, passed almost immediately after Ratha I adopted a reading Congress disagreed with, and addressed a statute the court found ambiguous as to attempt liability — circumstances showing Congress meant to restore, not change, the law’s intended meaning and to reach pending conduct. (168 F.4th at pp. 547–549.) The court therefore held ATRA “has retroactive effect.” (Id. at p. 548.)

4. Rule 60(b)(6) relief was warranted. Because the summary judgment rested entirely on the now-superseded reading of § 1595(a), the legal premise for the judgment had collapsed, and the district court “legally erred in its alternative grounds for denying Rule 60(b) relief.” (168 F.4th at pp. 547–548.) The en banc court reversed and remanded so the plaintiffs’ trafficking claims could proceed under the clarified statute. (Id. at p. 548.)

5. The dissent. Judge Callahan, joined by Judge M. Smith, agreed that Landgraf governs and that any clarifying-amendment exception “must be overruled,” but parted ways on the result: in her view, “under a faithful application of Landgraf,” the court should have declined to give ATRA retroactive effect. (168 F.4th at p. 548.) The disagreement thus narrowed to the application of the shared framework, not the framework itself.

Significance

Although Ratha arises under the human-trafficking statute rather than ordinary labor law, it is significant for any practitioner who must assess whether a mid-litigation statutory amendment applies to a pending case — a recurring question in California employment law, where the Legislature frequently amends the Labor Code and FEHA and labels changes “declaratory” or “clarifying.” The en banc court’s holding that there is no categorical “clarifying amendment” exemption from Landgraf brings discipline to that inquiry: a clarifying label does not automatically make an amendment retroactive (or non-retroactive); it is one piece of evidence within the Landgraf framework. The decision also underscores the substantive reach of the TVPRA’s civil-remedy provision against domestic companies that knowingly benefit — or attempt to benefit — from forced labor in their supply chains, a forced-labor analog to the employment relationship that the statute treats as actionable.

Key quotes

“We hold that Congress intended its clarifying amendment to have retroactive effect and that the district court legally erred in its alternative grounds for denying Rule 60(b) relief.” (Ratha, supra, 168 F.4th at pp. 547–548.)

“Although clarifying amendments are not exempted from [Landgraf’s requirements,] [an] enactment’s [clarifying purpose is evidence that Congress] intended the enactment to apply retroactively.” (Ratha, supra, 168 F.4th at p. 549.)

Read the full opinion (U.S. Court of Appeals, Ninth Circuit) →

Practice pointer

Open questions

The en banc court resolved retroactivity and Rule 60(b) but remanded the merits, leaving for the district court whether Rubicon in fact “knowingly benefit[ed]” (or attempted to benefit) from participation in a venture engaged in forced labor under § 1595(a). (168 F.4th at pp. 547–548.) By overruling the clarifying-amendment shortcut without prescribing how much weight a clarifying purpose carries within Landgraf, the court leaves that evidentiary question for future cases — the very point on which the dissent would have come out differently. (Id. at pp. 548–549.) And while the decision speaks to federal civil retroactivity, its persuasive force for California’s parallel retroactivity doctrine — and the Legislature’s frequent use of “declaratory of existing law” language — will be worked out in state-law disputes. (Id. at p. 549.)