Broussard-Wadkins v. Maples (895 F. Supp. 2d 1159, 2012)

United States District Court for the Northern District of Alabama 2012-09-28

Crimes and Criminal Procedure

Citations

Full opinion text

MEMORANDUM OF OPINION

C. LYNWOOD SMITH, JR., District Judge.

Table oe Contents

I. Overview of Civil Remedies Under Rico 1164

II. Motion to Strike.......................................................1165

A. Legal Standard ....................................................1165

B. Expert Report of Edward Mallon....................................1166

1. Mallon’s methods...............................................1167

2. Mallon’s opinions...............................................1168

3. The admissibility of Mallon’s opinions............................1169

a. Speculation.................................................1169

b. Specific opinions............................................1171

i. Opinion regarding unauthorized workers...............1171

ii. Opinion regarding attestation on 1-9 Forms............1173

iii. Opinion regarding knowingly hiring illegal immigrants........................................1173

c. Conclusions................................................1174

C. Expert Report of Dr. George Borjas..................................1174

1. Dr. Borjas’s qualifications.......................................1174

2. Methods used by Dr. Borjas......................................1174

a. Autonomy of Maples Industries in setting wages...............1175

b. Impact of labor supply on the wage scale of Maples Industries.................................................1177

c. Conclusions and calculation of damages......................1179

3. Reliability and admissibility.....................................1179

a. Incompleteness.............................................1180

b. Reliability..................................................1180

i.Market power analysis................................1180

ii.Hispanic school enrollment...........................1181

iii.Alternative causes and conflict with Dr. Borhas’s academic publications..............................1182

III. Motion for Summary Judgment..........................................1184

A. Relevant Facts.....................................................1185

1. Maples Industries and defendants................................1185

2. Plaintiffs and other hourly employees............................1186

3. Hiring hourly-wage employees...................................1187

4. Fraudulent documents and unauthorized workers.................1190

5. Wages.........................................................1191

6. Immigration enforcement at Maples Industries ...................1192

B. Discussion.........................................................1193

1. The INA “hiring provision”......................................1193

a. Plaintiffs’ attack on Mateo’s credibility.......................1195

b. Plaintiffs’ “common sense” arguments.......................1196

2. The “attestation provision”......................................1199

a. Compliance with the verification provision....................1200

i. Statutory interpretation..............................1200

ii. Application of the statute to the facts in the record____1201

b. Compliance with the attestation provision....................1204

c. Damages and proximate cause...............................1205

IV. Conclusion and Orders.................................................1206

Plaintiffs, Audrey Broussard-Wadkins and Darlene Harbin, were hourly-wage employees of Maples Industries, Inc. They commenced this putative class action against the owners and officers of that company: ie., Wade Maples, John Maples, Howard Moore, and Gina Mateo. Plaintiffs allege that defendants conspired to depress the wages of hourly employees of Maples Industries by knowingly hiring immigrants who had been brought into the United States illegally, and by falsely attesting to the validity of employment documents in violation of the Racketeer Influenced and Corrupt Organizations Act of 1970, 18 U.S.C. § 1961 et seq. (“RICO”). Plaintiffs brought the action on behalf of themselves and all similarly situated persons: i.e., current and former hourly-wage employees of Maples Industries who are legally authorized to work in the United States. This opinion addresses three motions: defendants’ motion for summary judgment; defendants’ motion to exclude the reports of plaintiffs’ expert witnesses, Edward Mallon and Dr. George J. Borjas; and plaintiffs’ motion for class certification.

I. OVERVIEW OF CIVIL REMEDIES UNDER RICO

In addition to the criminal sanctions provided by RICO, see 18 U.S.C. § 1968(a), Congress declared that “[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains....” 18 U.S.C. § 1964(c). Section 1962 makes it illegal to participate in a RICO “enterprise” that engages in a “pattern of racketeering activities,” or to “conspire” to do so. 18 U.S.C. § 1962(c)-(d); see also Beck v. Prupis, 529 U.S. 494, 506, 120 S.Ct. 1608, 146 L.Ed.2d 561 (2000) (stating that, to prove a violation of the conspiracy provision, 18 U.S.C. § 1962(d), a plaintiff must show that the defendants (1) knowingly and willfully joined a conspiracy (2) with the purpose of violating 18 U.S.C. § 1962(c)).

To establish the requisite “pattern of racketeering activity,” a plaintiff must demonstrate the “commi[ssion] of at least two distinct but related predicate acts.” Edwards v. Prime, Inc., 602 F.3d 1276, 1292 (11th Cir.2010) (alteration and emphasis supplied) (quoting Williams v. Mohawk Industries, Inc., 465 F.3d 1277, 1282 (11th Cir.2006)). Although the minimum number of predicate acts necessary to establish a “pattern” is two, the mere existence of two acts does not automatically satisfy the pattern requirement; instead, the acts must be, as stated in Edwards, supra, “related.” Id.

Further, a “pattern” of racketeering activity can be established by showing repeated violations of the same predicate offense. See Cox v. Administrator United States Steel & Carnegie, 17 F.3d 1386, 1397 (11th Cir.1994) (finding a pattern of racketeering activity on the basis of repeated violations of the same bribery provision). In this case, one predicate act that plaintiffs claim defendants (or their co-conspirators) committed is the repeated violation of § 274 of the Immigration and Nationality Act (“INA”), which is codified at 8 U.S.C. § 1324, and which is defined in RICO as a predicate act, but only if plaintiffs can prove that the violations were for financial gain. See 18 U.S.C. § 1961(1)(F).

Specifically, plaintiffs claim defendants conspired to violate 8 U.S.C. § 1324(a)(3)(A), which makes it a federal crime to “knowingly hire[] for employment at least 10 individuals with actual knowledge” that those individuals were illegal aliens who had been brought into the United States illegally. 8 U.S.C. § 1324(a)(3)(A) (alteration supplied); see also Edwards, 602 F.3d at 1292-94, 1297-1300 (interpreting that provision in the RICO context).

Additionally, plaintiffs claim that, to facilitate that hiring, defendants conspired to have defendant Gina Mateo violate 18 U.S.C. § 1546(b)(3), which makes it a federal crime to use “a false attestation ... for the purpose of satisfying a requirement of section 274A(b) of the Immigration and Nationality Act....” 18 U.S.C. § 1546(b)(3).

“RICO claimants ... must [also] show (1) the requisite injury to ‘business or property,’ and (2) that such injury was ‘by reason of the substantive RICO violation.” Williams, 465 F.3d at 1283 (alteration supplied). Plaintiffs’ theory of damages is that defendants’ alleged acts of knowingly hiring illegal aliens (perpetrated in part through false attestation as to the validity of their identification documents) depressed their wages below what they otherwise would have earned, resulting in lost income for plaintiffs and a realization of greater profits for defendants.

II. MOTION TO STRIKE

Plaintiffs proffered the reports of two expert witnesses in opposition to defendants’ motion for summary judgment. Edward Mallon was presented as an expert on immigration matters, and offered opinions on the legal status of hourly-wage employees of Maples Industries and defendants’ compliance with the attestation statutes. Dr. George Borjas was touted as an economic expert, and his report serves as the basis for plaintiffs’ causation argument. Plaintiffs have offered no other evidence regarding causation, and they relied on Mallon’s opinions in their arguments in opposition to summary judgment. Thus, the court must rule on defendants’ motion to strike those reports before it can consider the question of summary judgment.

A. Legal Standard

Federal Rule of Evidence 702, read together with the trilogy of Supreme Court opinions that led to the Rule’s revision in 2011, compels the district courts to perform a “gatekeeping” function when determining the admissibility of expert scientific and technical evidence. See, e.g., United States v. Abreu, 406 F.3d 1304, 1306 (11th Cir.2005) (quoting United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir.2004)). “This function inherently requires the trial court to conduct an exacting analysis of the foundations of expert opinions to ensure they meet the standards for admissibility under Rule 702.” Id. (internal quotation omitted).

[T]he objective of that requirement is to ensure the reliability and relevancy of expert testimony. It is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.

Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). At a minimum, the approved analytical matrix requires “the proponent of the testimony ... [to] show that: (1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which he reaches his conclusions is sufficiently reliable; and (3) the testimony assists the trier of fact.” Maiz v. Virani, 253 F.3d 641, 665 (11th Cir.2001) (alteration supplied). Those three requirements can be satisfied by demonstrating that “ ‘(1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.’ ” Hendrix ex rel. G.P. v. Evenflo Co., Inc., 609 F.3d 1183, 1193 (11th Cir.2010) (quoting Fed.R.Evid. 702). “The inquiry ... is a flexible one” because, in any given case, “[m]any factors will bear on the inquiry, and ... [there is no] definitive checklist or test.” Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 593-94, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)- (alterations supplied). Factors that may be relevant include:

(1) whether the theory or technique can be (and has been) tested, (2) whether the theory or technique has been subjected to peer review and publication, (3) in the case of a particular ... technique, the known or potential rate of error, and

(4) whether the theory or technique is generally accepted by the relevant ... community.

Hendrix ex rel. G.P., 609 F.3d at 1194 (internal quotation marks and alterations omitted).

B. Expert Report of Edward Mallon

Edward Mallon is a former special agent of the Immigration and Naturalization Service (“INS”), and he was presented as an expert on immigration issues. Mallon began his career with the INS in 1972. After completing a training course, he went to work in the INS office in Chicago, “investigating a wide range of immigration violations.” He conducted investigations of persons engaged in the business of smuggling of illegal aliens into the United States and, in furtherance of those investigations, he temporarily relocated “to the Southwestern United States border areas on many occasions.” In 1985, he was promoted to a supervisory position, and organized a “fraudulent document task force, which identified, investigated and prosecuted counterfeiters and vendors of fraudulent immigration documents.” In 2003, his duties changed again, and he “supervised the investigation and prosecution of individuals and organizations involved in smuggling and transporting aliens into the United States.” He retired in October of 2004. The body of Malloris report is divided into three sections. The first of those sections is titled “Illegal Immigration Overview.” In that section, Mallon describes the process by which people enter the United States illegally. Mallon states that the majority of those who enter the country illegally do so by crossing the boarder between the United States and Mexico, and that they require and receive assistance in doing so. Mallon does not cite any authority for that assertion; presumably it is based upon personal knowledge acquired during his experience working for the INS. Mallon also does not indicate whether that section of his report is simply an illustration of the information that serves as the basis underlying his ultimate opinions, or whether it is meant to serve as an expert opinion unto itself. The other two sections of Malloris report are titled “Methodology of Review” and “Opinion/Analysis” and, as their names suggest, they fit more neatly into the expert report paradigm.

1. Mallon’s methods

To prepare his report, Mallon reviewed a sampling of personnel files obtained from Maples Industries. Mallon was provided a hard drive containing the files of roughly 3,700 hourly-wage workers hired during the class period; but, due to time constraints, he reviewed only 840 of those files. He initially intended to examine all of the files; consequently, starting at the beginning of the alphabet, he began examining each file. After reviewing the first 150 files, however, Mallon changed his approach and reviewed only every fifth file of the remaining 3,550 files in order to save time. Each file contained a Department of Homeland Security Form 1-9, “copies of supporting documents,” and an application for employment. It is unclear whether the copies of the documents in each file were in color. His review of each file began with the Form 1-9 contained therein. Malloris Form 1-9 analysis consisted of determining what type of work authorization the employee claimed to have (e.g., citizenship or legal permanent residence), examining photocopies of the documents submitted to prove identification and authorization, and reviewing “the handwriting and ink color” on the Form 1-9 for consistency “with the form having been completed by the employee and reviewed and verified by the personnel official.”

After reviewing the Form 1-9, Mallon examined the corresponding application for employment He determined where the employee’s Social Security card had been issued. He also looked at employment and residential history to determine where the employee had lived. He viewed the employee’s educational background as being “[o]f particular importance.” Finally, he examined handwritten notes on some of the applications, which were “obviously completed by a personnel officer of the company.” For each personnel file examined, Mallon “looked” for inconsistencies that would be pertinent in determining whether ... employees of [Maples Industries] knowingly hired aliens not authorized to work in the United States.” He compared the information the employee provided on his or her application to the documents submitted when the Form 1-9 was completed; and when the information was inconsistent, he concluded that the employee presented false documents, and was not authorized to work in the United States.

In making those determinations, Mallon relied on experience and knowledge gained while working for INS. He noted that many employees had Social Security numbers assigned to Puerto Rico, but their educational background was not consistent with Puerto Rican compulsory education laws. Mallon stated that, in his experience working for INS, it was common for illegal aliens to claim Puerto Rican birth. Another common scenario that he considered inconsistent with legal status was the large number of employees who were supposedly born in the United States, but educated in Mexico, Guatemala, or elsewhere in Central America. Mallon noted that none of the purportedly American-born, foreign-educated employees presented a birth certificate, in contrast to many of the American-born, American-educated employees, who did present birth certificates. In addition to the criteria outlined in more detail in his report, Mallon based his conclusions “upon easily obtainable public information, [and] a common sense approach used in reviewing the documents.”

2. Mallon’s opinions

Mallon concluded that, of the 840 employees whose personnel files he reviewed, 139 (16.547%) “were unauthorized to work in the United States.” He concluded that the human resources personnel of Maples Industries had “knowingly hired aliens who. were unauthorized to work in the United States.” He concluded that those human resources personnel had “falsely certified 1-9 Forms,” because “[i]t was apparent that the Certification Section was signed at a different time than the Review Section was completed. Therefore, the certifying official was not personally reviewing the documents as required, by law.”

Mallon’s report also contains statements that could be characterized as opinions or conclusions, although he did not label them as such. In his “Illegal Immigration Overview,” for example, Mallon stated that the persons “analyzed in this report fall into the category of those who illegally entered the United States.” He provided no explanation of how he reached that conclusion, and it is unclear whether it is his expert opinion based on a review of the evidence, or a starting point, based on his experience, from which he analyzed the personnel files. Immediately after stating that the employees being reviewed in this ease entered the country illegally, Mallon explained the general process by which aliens receive assistance in crossing the border and finding employment. He did not explicitly opine that the Maples Industries employees whose files he reviewed received assistance in crossing the border, although that conclusion is strongly implied. Notably, despite his conclusion that defendants were knowingly hiring illegal aliens, he never stated that they did so with knowledge that those illegal aliens received assistance in crossing the border. Finally, in reference to the handwritten notes listing place of birth on some of the employment applications, Mallon wrote “[i]t could be concluded that the personnel officer added these notations to justify hiring an applicant whose work authorization was in doubt.”

3. The admissibility of Mallon’s opinions

a. Speculation

Defendants first make a general argument that Mallon’s report “is fraught with unsupported, speculative statements.” “Daubert requires that trial courts act as ‘gatekeepers’ to ensure that speculative, unreliable expert testimony does not reach the jury. The trial court must ‘make certain that an expert ... employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.’ ” Kilpatrick v. Breg, Inc., 613 F.3d 1329, 1335 (11th Cir.2010) (quoting Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999)). Defendants point to two examples of what they characterize as “rank speculation.” The first is Mallon’s statement that the illegal immigrants analyzed in the report entered the country illegally, rather than, for example, entering legally and overstaying a visa. Indeed, Mallon has offered no evidentiary support for that conclusion, which appears in the “Illegal Immigration Overview” section of the report, a section that seems to draw upon his general knowledge and experience, and not the facts of this particular case.

Defendants argue that Mallon’s knowledge about illegal immigration is not applicable to this case because it is “limited to aliens ‘apprehended for being in the United States illegally.’ ” Thus, they argue, he has no basis for rendering opinions regarding the immigration status of those who have not been apprehended, such as the Maples Industries employees at issue in this case. Such an argument is absurd on its face. Mallon’s experience as an INS officer renders him capable of offering opinions on the general patterns of illegal immigration. See Fed.R.Evid. 702, advisory committee’s notes to 2000 amends. (“Nothing in this amendment is intended to suggest that experience alone ... may not provide a sufficient foundation for expert testimony.... In certain fields, experience is the predominant, if not sole, basis for a great deal of reliable expert testimony.”). Cf. United States v. Frazier, 387 F.3d 1244, 1260-61 (11th Cir.2004) (“Of course, the unremarkable observation that an expert may be qualified by experience does not mean that experience, standing alone, is a sufficient foundation rendering reliable any conceivable opinion the expert may express.”) (emphasis in original). The fact that Mallon’s experience is necessarily limited to those who have been apprehended does not render his opinions on general illegal immigration patterns unreliable. Rather, those opinions are within the scope of the experience gained during his lengthy career in immigration enforcement.

To the extent that general experience with illegal immigration is relevant to the facts in this case, Mallon is qualified to offer expert opinions on that subject. Even so, and even though an expert’s conclusion may superficially appear relevant to and helpful in the determination of facts at issue, it may ultimately prove unhelpful if it is too far divorced from the underlying data.

[T]he Supreme Court has noted that, in the context of this analysis, “conclusions and methodology are not entirely distinct from one another.” General Elec. Co. v. Joiner, 522 U.S. 136, 146, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997). Although experts “commonly extrapolate from existing data ... nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert.” Id. [] Rather, the trial court is free to “conclude that there is simply too great an analytical gap between the data and the opinion proffered.” Id.

Hendrix ex rel. G.P. v. Evenflo Co., Inc., 609 F.3d 1183, 1194 (11th Cir.2010) (alteration supplied); see also, e.g., McDowell v. Brown, 392 F.3d 1283, 1301-02 (11th Cir.2004) (“[A]n expert opinion is inadmissible when the only connection between the conclusion and the existing data is the expert’s own assertions ----”) (alteration supplied). If an expert’s facially relevant conclusion relates to the data it purports to rely upon only by his own assertion, it ultimately is simply an argument, “offering] nothing more than what lawyers ... can argue in closing arguments” and, consequently, fails to meet Rule 702’s “helpfulness” requirement. Frazier, 387 F.3d at 1262 (alteration supplied).

Indeed, Mallon has provided no connection between his conclusion that the immigrants covered in his expert report entered the country illegally and the data underlying his analysis. Plaintiffs point to the table outlining Mallon’s conclusion about each individual employee as evidence for such a connection, but nothing in that table addresses the issue of entering the United States. Mallon seems to have arrived at his “expert opinion” that the employees examined in the report entered the country illegally by combining his background knowledge that most illegal immigrants enter the country that way with his opinion that some of the employees are illegal. That connection relies entirely on Mahon’s own assertion. Even though Mahon explained how his experience with the INS informed his opinions about which employees were illegal, he did not do so regarding their illegal entry. See Fed.R.Evid. 702, advisory committee’s notes to 2000 amends. (“If the witness is relying solely or primarily on experience, then the witness must explain how that experience is a sufficient basis for the opinion, and how that experience is applied to the facts.”) (emphasis supplied).

Defendants’ second example of speculation is more troubling. Mahon’s comment that it “could be concluded” that human resources personnel were noting employees’ places of birth to justify questionable hires is speculation, and it is presented in a misleading fashion. Plaintiffs argue that Mahon did not actually render an opinion — the “could be concluded” language implies that he did not reach that conclusion — but that argument is unconvincing. Accepting Mahon’s couched language would essentially allow him to inject an opinion in his report without providing a basis for it, because he did not affirmatively endorse that conclusion. In plaintiffs’ view, it is not a conclusion based on speculation; instead, it is essentially speculation offered without a firm conclusion. Even if that is so, it is no better. An expert report is no place for speculation, and by implying an opinion without actually labeling it an “opinion,” Mahon appears to be trying to circumvent the requirement that ah opinions must be based on the application of reliable methodology to the evidence reviewed by the expert.

b. Specific opinions

i. Opinion regarding unauthorized workers

The central opinion in Mahon’s report, upon which ah others are built, is that 139 of the 840 employees whose personnel files Mahon reviewed were not authorized to work in the United States. Defendants argue that Mahon improperly chose the data on which he based his opinion, and that his methodology in examining that data was unreliable.

Defendants also attack Mahon’s methodology by asserting that “the ‘data’ that supports [sic ] Mahon’s Report is [sic ] an incomplete set of employment records chosen in a non-random way.” Defendants argue that, by reviewing every fifth file in the record, after initially reviewing the first 150 files, Mahon selectively chose his data. See In re Rezulin Products Liability Litigation, 369 F.Supp.2d 398, 425 (S.D.N.Y.2005) (excluding as unreliable the testimony of an expert who “selectively chose his support from the scientific landscape”) (internal quotation marks and citation omitted). Indeed, Mahon’s method of selecting the files for review does not exactly square with the description plaintiffs provided via citation to a statistics treatise.

Perhaps it would have been preferable for Mallon to have selected all the files he reviewed in the same manner, or to have hewn more closely to a generally-accepted statistical sampling technique. Even so, the sampling method he used cannot reasonably be characterized as “selectively choosing” evidence that would be more favorable to plaintiffs, and is distinguishable from that which the Southern District of New York found objectionable in the Rezulin case. See id. (“In this case, the plaintiffs’ experts have ignored a large amount of information that calls many aspects of the silent injury theory into question.”). Rather than deliberately ignoring information detrimental to plaintiffs’ case, it appears that Mallon selected his sample from among the many files presented to him in an objective manner. That is, there is no indication that the manner in which he selected the files to review created any bias in favor of plaintiffs. Although the starting point from which he began reviewing every fifth file was not truly random, there is no evidence suggesting that it was intentionally chosen to skew the results in favor of plaintiffs. Moreover, it is unclear how it could have been chosen for the purposes of skewing the results; Mallon simply selected every fifth file from a list arranged alphabetically (albeit, after reviewing the first 150 sequentially). Further, defendants have offered no explanation or argument as to how the starting point for that process could or did result in an inaccurate or unrepresentative set of data that favored the plaintiffs’ arguments.

Defendants also argue that Mallon’s use of the personnel files to determine immigration status was improper in and of itself. They note that he did not interview anyone in conducting his investigation, relying entirely on paper evidence, including photocopies of identification and employment verification documents, to reach his conclusions. Additionally, defendants argue that Mallon’s methodology is unreliable because it was developed for this litigation. Those arguments are unavailing. Mallon’s methodology involved a comparison of the information in employment applications, documents provided by employees, and unquestionably reliable outside sources, such as a list of immigration status codes and the geographical distribution of Social Security numbers. Although developed specifically for this litigation, Mallon’s method of searching that information for inconsistencies is not otherwise unreliable. By all indications, the method was derived directly from his extensive experience in the immigration enforcement field.

Further, Mallon’s reliance solely on documentary evidence (including photocopies), rather than interviews, does not undermine the reliability of his method. He has decades of experience as an INS investigator, including almost two decades running a document fraud task force. His determinations of falsity were usually based on inconsistent information between applications and identification documents within the same personnel file. For that type of determination, examining the original identification documents would offer no advantage over examining photocopies, except in those instances where a conclusion could be based on the color of inks and the depth of indentations made by the putative author. Although interviewing employees may have allowed them to explain discrepancies in their documentation, many of the problems were of the type that could not possibly be explained away: e.g., a person claiming to be born in 1983 claiming to have entered the country using an immigration code indicating that he was allowed entry to perform seasonal agricultural work in 1986. Mallon’s opinion that 139 of the personnel files he examined indicated that the employee in question was not authorized to work in the United States is sufficiently reliable to satisfy Rule 702.

ii. Opinion regarding attestation on 1-9 Forms

Defendants attack Mallon’s consultation of the personnel files, as a whole, to determine whether the certification section of the Department of Homeland Security’s Form 1-9 was properly completed. Defendants argue that Mallon’s approach brings in more information than human resources employees are required to consult in completing that Form. To the extent that Mallon uses information contained in the applications to conclude that the 1-9 Forms were falsely attested, the method is not reliable. As will be discussed in Part HI(C)(2)(a)(i) of this opinion, infra, the employer’s representative responsible for completing an 1-9 Form is not required to engage in the same type of searching inquiry that Mallon performed. Thus, to rely on information that would be outside the scope of the 1-9 process when attempting to determine whether that process was lawfully conducted is not proper.

Additionally, in reaching his conclusion that the human resources employees completing the 1-9 Forms were doing so in violation of the law, Mallon relied on the fact that the verification and certification sections were completed in different handwriting or different color ink. From that he concluded that the sections were filled out at different times and, therefore, that “the certifying official was not personally reviewing the documents as required by law.” That conclusion does not necessarily follow from the premises, and demonstrates the flawed methodology underlying Mallon’s opinion regarding the completion of the 1-9 Forms. Assuming, arguendo, that Mallon was correct in determining that the sections were filled out at different times, that timing would in no way prove that the certifying official did not personally inspect the documents.

Thus, the methodology underlying Mallon’s opinion that the 1-9 Forms were falsely completed is flawed in two ways. First, he relied on information outside the scope of the Form 1-9 verification procedure; and, he concluded that defendant Gina Mateo must have falsely attested, because that extra information indicated that many employees were unauthorized. Second, he. made the logically unsound leap from the conclusion that a Form 1-9 was not fully completed at one time to the conclusion that the person completing the form could not have personally reviewed the documents. For those reasons, his opinion regarding false attestation is unreliable and due to be stricken.

iii. Opinion regarding knowingly hiring illegal immigrants

Mallon also opined that human resources personnel employed by Maples Industries “knowingly hired aliens who were unauthorized to work in the United States.” The parties’ arguments regarding that opinion are entirely devoted to its helpfulness to the jury. However, before the court can inquire as to whether such an expert opinion would be helpful to a jury, it must first determine whether the opinion is reliable.

Mahon’s opinion that illegal immigrants were knowingly hired is not reliable. He provides no factual basis or explanation for that opinion when he offers it at the end of the report. It appears to be a conglomeration of his two other opinions: that 139 of the 840 employees whose personnel files Mahon reviewed were not authorized to work in the United States; and, that Maples Industries personnel falsely attested on Forms 1-9. As stated above, his methodology for reaching the latter opinion is not reliable. Thus, Mahon’s conclusion that Maples Industries personnel knowingly hired illegal aliens must also be stricken.

c. Conclusions

In sum, Mahon’s offered three significant opinions in his expert report, but only one of them satisfies the admissibility requirements for expert testimony. Thus, the report will be admitted only to the extent that it relates to Mahon’s opinion that 139 of the 840 employees whose personnel files were reviewed by him were not authorized to work in the United States. Mahon’s conclusions that defendant Gina Mateo was not properly completing the 1-9 Forms, and that she was knowingly hiring illegal immigrants, are not based on sufficiently reliable methodology.

C. Expert Report of Dr. George Borjas

Defendants also have moved to strike the expert report of Dr. George J. Borjas, plaintiffs’ economic expert. Rather than attacking Dr. Borjas’s methodology or conclusions point by point, defendants focus on the fact that Dr. Borjas based his economic analysis on statistics derived from Mahon’s report.

1. Dr. Borjas’s qualifications

Dr. Borjas is a professor of economics and social policy at Harvard’s Kennedy School of Government, and a research associate at the National Bureau of Economic Research. He earned his doctoral degree in economics in 1975, focusing his studies on labor economics and econometrics. He describes himself as a “labor economist” specializing in the “application of microeconomic theory, econometrics, and data analysis to labor market issues.” He is a member of the Econometric Society and of the Society of Labor Economists. He has published scores of scholarly articles, and has “published or edited several books specifically dealing with the economics of immigration.”

2. Methods used by Dr. Borjas

Dr. Borjas used a series of statistical measures to evaluate the impact on plaintiffs’ wages of defendants’ alleged hiring of illegal aliens. To conduct such an analysis, he necessarily had to begin with data on the number of illegal aliens Maples Industries actually employed. For that number, he turned to Mahon’s report, and it is his reliance on the Mallon report that forms the gravamen of defendants’ motion to strike his report.

Defendants devote little attention to Dr. Borjas’s report in their brief in support of their motion to strike. They argue that Dr. Borjas’s report must be stricken because it “is based solely on purported numbers of ‘unauthorized’ workers (as defined by Mallon) without any distinction between those who allegedly were hired with the requisite actual knowledge or whose employment was in any way caused by false attestations.” Defendants add little to this argument in their reply brief, simply stating that the “report does not meet the reliability requirements of Daubert.” As discussed in the preceding Part of this opinion, Mallon’s report is only partially admissible: that is, to the extent that it establishes that certain Maples Industries employees were illegal aliens. It is those conclusions that Dr. Borjas took from the Mallon report and used as the basis of his analysis.

Dr. Borjas began his report with a summary of existing economic theory and scholarship regarding the impact of immigration on wages. He stated that, absent other factors, “an immigration-induced increase in the size of the workforce lowers the wage of competing workers.” He cited one of his previously published academic articles, in which he concluded that there is a correlation between the type of skills possessed by immigrants and the wages paid in fields requiring those skills, and concluded that: “wages during a particular decade grew slowest for those [types of workers] that experienced the largest increase in immigration.” He stated that the methods used to measure wage impact on certain skill groups could be analogously applied to employees of a specific company. He also noted that, in some labor markets, certain companies have “market power” that allows them to set wages independently of those offered by their competitors. His analysis of the impact of immigration on wages focused on “wage elasticity,” a term that he defined as “the responsiveness of wages to an immigration-induced increase in the supply of labor.” Dr. Borjas stated that he is “not aware of any conceptual difficulties that would prevent the application of these standard methodological approaches to the present case.”

a. Autonomy of Maples Industries in setting wages

Dr. Borjas considered information regarding employment in Jackson County and determined that Maples Industries is the largest manufacturer in the area, and the largest employer of unskilled labor. He stated that the approximately 2,000 workers employed at Maples Industries represent roughly 10% of the county’s workforce. In evaluating the impact of immigration on wages at Maples Industries, Dr. Borjas had access to wage and employment information regarding several of the other employers in the area. Dr. Borjas stated that the first step in the analysis was to determine whether Maples Industries sets its wages according to the labor market, or whether it has some degree of autonomy in setting wages. To do so, he compared the wages paid to employees of Maples Industries to those offered workers at four other companies in the area, and to wage data compiled by the Census Bureau. Dr. Borjas had access to payroll data for Maples Industries for a ten-year period, from 2000 to 2009. He used that data to calculate three “wage trends” for Maples Industries employees: the first based on hourly wages only (“straight-time wages”); the second based on hourly wages and overtime; and the third based on hourly wages, overtime, and bonuses combined.

Dr. Borjas compared the three wage trends he created for Maples Industries with similar trends he had calculated for the four other companies that provided wage information. In each case, the comparison demonstrated wage growth at Maples Industries was slower than at the comparator firms. Dr. Borjas acknowledged “that the skill composition of the workforce may well differ across firms” and, thus, the differing wage trends may reflect differences in skill, rather than a Maples Industries policy of stagnant wage growth, For that reason, Dr. Borjas also compared the wage trends at Maples Industries to those of low-skill workers in Alabama as a whole, in the combined Jackson-DeKalb County area in particular, and across non-metropolitan areas of Alabama. The results for the local area comparison were inconclusive, but when compared to the wages for low-skill workers in Alabama as a whole, and to those in the non-metropolitan areas of the state, the wages offered by Maples Industries were again found to be low. Dr. Borjas performed similar comparisons, with similar results, using the wage trends for low-skill Alabama workers in the manufacturing and textile mills industries, and low-skill textile mills workers in Alabama, Georgia, and Tennessee combined.

Once Dr. Borjas had compared the raw data from Maples Industries and the comparator firms and geographic areas, he used that data to create a regression model for the purpose of determining the relationship between wages at Maples Industries and the comparators. In building this regression, Dr. Borjas used time as the independent (x-axis) variable, setting 0 at the year 2000,1 at the year 2001, and so on through 2009. The dependent (y-axis) variable was “the difference between the log [i.e., logarithmic] average hourly wage at Maples (the measure that includes overtime) and the log hourly wage in the comparator.” In other words, for each comparator, he began with a series of points representing the difference in hourly wages in each year. Then, using those established data points, he ran a linear regression to estimate a coefficient and y-axis intercept point for each comparator, essentially creating a trend line for each set of wage trends. In each case, the coefficient represented the slope of the trend line: that is, the rate of change of the relationship between the Maples Industries wage and the comparator wage. Dr. Borjas’s linear regressions all have negative coefficients, ranging between approximately -0.01 and -0.02. That is, the regressions show “that wages at Maples grew by 1 to 2 percentage points less per year than the wage [scale] in the comparator firm or market.”

Dr. Borjas concluded that “the wage trends at Maples do not seem to resemble the wage trends observed in firms that may hire from the same pool of low-skill workers, nor does it seem to resemble the wage trends observed in the overall market for low-wage labor in the state of Alabama.” That evidence, he wrote, “seems consistent with the hypothesis that Maples has some degree of wage discretion.” Dr. Borjas also considered documentary evidence and deposition testimony in determining that “it seems as if the Maples wage structure is set completely independently of what is the ‘going wage’ for the types of workers Maples wishes to attract, hire, and retain.”

b. Impact of labor supply on the wage scale of Maples Industries

Dr. Borjas next focused on wage elasticity at Maples Industries: that is, the amount by which the wages paid by that company changed due to a shift in the supply of labor available to the company. Estimating the wage elasticity requires data on wages, the size of the workforce, and variations in size of the labor supply. In addition to the different measures of the average wage discussed above, Dr. Borjas used payroll data supplied by Maples Industries to calculate the total man-hours worked in each year. The final variable in the wage elasticity calculus is the immigration-induced increase in the size of the local workforce. Dr. Borjas relied on a Pew Research Center report for the proposition that the majority of unauthorized immigrants in Alabama are of Hispanic origin. He used the enrollment data for Hispanic children in the Jackson County and Scottsboro city schools as a proxy for the immigrant population in the area. Dr. Borjas noted that a working paper issued by the Federal Reserve Bank of Atlanta relied on that same methodology when estimating the illegal immigrant population of Georgia. Over the course of the ten-year period Dr. Borjas examined, enrollment of Hispanic students in the Scottsboro and Jackson County school systems tripled, while overall student enrollment remained steady.

Using those three sets of values — wages, man-hours, and immigrant population— Dr. Borjas created another regression model. The regression produced a coefficient based on the wages paid and hours worked in each year. To calculate wage elasticity, that coefficient was analyzed in conjunction with the change in the size of the labor supply (again, measured using Hispanic school enrollment figures as a proxy). According to this methodology, changes in wages and man-hours are correlated with the labor supply only if that labor supply is truly available to the company: that is, if the company is willing to hire those workers. Thus, there would only be a correlation between Hispanic school enrollment numbers, on the one hand, and wages and hours, on the other, if Maples Industries was 'willing to hire the unauthorized immigrants represented by the increased school enrollment.

Dr. Borjas ran the regression model using several different calculations of wages: “the straight-time hourly wage rate, the average hourly wage rate that includes overtime, the average hourly wage rate that includes both overtime and bonuses, and gross weekly pay (which includes overtime, but not bonuses).” The resulting wage elasticity ranged from -0.26 to -0.38, depending on the wage formula used. Those numbers indicate that a 10% increase in the size of the workforce is correlated with a 2.6% to 3.3% decrease in hourly wages. In contrast, there was a positive correlation between increased Hispanic enrollment and total man-hours worked, represented by an elasticity coefficient of + 0.37. That is, if the number of Hispanic students enrolled in area schools increased by 10%, the total hours worked at Maples Industries would increase by 3.7%.

Dr. Borjas also ran similar regressions with data from other local employers. The employment elasticity for each of two neighboring employers was within the standard error for each model, representing no significant correlation between Hispanic school enrollment and employment at those firms. In other words, the model that shows a relationship between immigrant population and employment at Maples Industries “is not informative when applied to the study of wage evolution at two neighboring firms” — a fact that Dr. Borjas believes to be further evidence that “wage-employment trends at Maples differ significantly from those at some neighboring firms, suggesting the presence of some discretion in pay-setting decisions.”

c. Conclusions and calculation of damages

Having concluded that the hiring of illegal immigrants did cause wage depression, Dr. Borjas set out to calculate the extent of that negative impact. He used Mallon’s report to determine how many illegal immigrants were hired in each year during the class period, and how many man-hours were worked by both legal and illegal workers in each year. To calculate damages, Dr. Borjas first determined what percentage of the increase in man-hours in each year of the class period was due to the influx of unauthorized employees. That percentage was derived by dividing the total hours worked by illegal aliens in a given year by the total hours worked by legal workers already employed at the beginning of that year. The results of this calculation rose over the course of the class period, from 2.8% in 2005 to 16.2% in 2009. In other words, as Maples Industries added man-hours in each year, the extent to which that increase was attributable to the hiring of illegal immigrants also increased. Using the -0.33 wage elasticity calculated above, Dr. Borjas determined the impact that the employment of illegal immigrants had on wages: the increase in man hours attributable to illegal workers was multiplied by the wage elasticity to determine its impact on wages, and that product was multiplied by the total amount paid to authorized workers in order to calculate the impact that wage depression had on the putative class. The result was a total of roughly $4 million for the entire putative class of authorized workers, representing a wage reduction of 2.3%. Dr. Borjas also concluded that damages for the named plaintiffs, Audrey Broussard-Wadkins and Darlene Harbin, are $1,528 and $1,240, respectively.

3. Reliability and admissibility

Defendants devote very little of their briefs to Dr. Borjas’s report, and the only argument they actually make is that Dr. Borjas relied on Mallon’s report, which they argue is inadmissible. As noted above, to the extent that Dr. Borjas relied on Mallon’s report, he used that portion of the report which- this court finds reliable. Defendants did not depose Dr. Borjas, nor did they offer any expert testimony in rebuttal. Although defendants do not substantively challenge the content of Dr. Borjas’s report, other than his reliance on Mallon’s report, the court still must determine whether the Borjas report satisfies the requirements of Rule 702 and Daubert.

This is not the first time this court has been presented with an expert report penned by Dr. George Borjas. The attorneys who represent the plaintiffs in the present case brought another action based on the same theories underlying this case. See Hall v. Thomas, 753 F.Supp.2d 1113 (N.D.Ala.2010). The plaintiffs in Hall presented a report written by Dr. Borjas that purportedly provided expert opinions on the impact of the employment of undocumented immigrants at the Pilgrim’s Pride poultry plant in Russellville, Alabama. Id. at 1118. This court ruled that Dr. Borjas’s report was inadmissible, and due to be stricken from the record, because it was incomplete, was based in unreliable methods, and would not be helpful to a jury. Dr. Borjas’s report in this case differs from that in Hall, in that some of the problems found in that case are not present here. Even so, some of the same problems remain.

a. Incompleteness

The first ground on which this court found Dr. Borjas’s expert report inadmissible in Hall was that the report was “fatally incomplete.” Id. at 1139. In that report, Dr. Borjas described the type of regression model that he performed in preparing his report for this case. However, he did not actually perform the regression in Hall. Id. at 1142. In preparing that report, Dr. Borjas ignored the data before him, which indicated that man-hours worked at the defendants’ plant had actually decreased during the relevant time period. Id. at 1141. He asserted that that data must have been erroneous and used the plant’s output, which had increased, as a proxy for man-hours worked. Id. During his deposition in Hall, he admitted that he had assumed that there had been no increase in automation at the plant during the relevant period, which could have increased production while reducing man-hours. Id. In fact, there had been an increase in automation. Id. Thus, in Hall, Dr. Borjas did not use the correct data to perform the regression analysis central to his methodology. Instead, he used a false assumption to circumvent the facts in the case, which did not fit neatly into his theory. Finally, he concluded only that the increase in the labor supply in Russellville, caused by the influx of illegal immigrants, led to lower wages at the plant. Id. at 1143. He did not actually opine that the hiring of illegal immigrants at the plant itself caused lower wages. Id. For those reasons, this court determined that his testimony was merely ipse dixit, and would not be helpful to a jury. Id. at 1142.

Here, Dr. Borjas did run the regression. Nothing in the record suggests that the data on which he relied were incomplete or inaccurate. Defendants did not depose him and, thus, any potential gaps in the data or false assumptions underlying the data have not been exposed. .For those reasons, the court will not strike Dr. Borjas’s report on the basis of incompleteness, and will turn instead to an evaluation of the reliability of the report.

b. Reliability

In addition to finding Dr. Borjas’s report incomplete, this court’s opinion in Hall found that it was not sufficiently reliable for three reasons: his “market power” analysis was unreliable; his use of Hispanic school enrollment as a proxy for the presence of illegal immigrants in the labor force was unreliable; and he failed to account for possible alternative causes, in a departure from his own scholarship. The latter two flaws also are present in Dr. Borjas’s report in this case.

i. Market power analysis

In Hall, this court found Dr. Borjas’s “market power analysis” unreliable for several reasons. Dr. Borjas simply compared the starting wages paid at the Pilgrim’s Pride plant in Russellville with those paid by other employers in the same area, and determined that the plant paid a lower wage. Id. at 1148. In doing so, he ignored several other factors that could have contributed to the lower wage. He did not consider the fact that one of the comparator firms had a “deliberate policy” to set higher wages to attract the type of workers it desired. Id. He did not control for the fact that the poultry processing industry pays lower wages than other manufacturing industries on the national level, a factor that has been the subject of his own research. See id. at 1149 (“Dr. Borjas’s own academic writing has emphasized the existence of inter-industry wage differentials within the manufacturing sectors, and posits multiple reasons why these differentials exist.”). He admitted that he did not look into the factors that he himself stated were relevant to determining whether a firm has wage discretion. Id. Finally, the wage trends at the Russellville Pilgrim’s Pride plant mirrored those at the comparator firms, even if the wages themselves were lower. Id. at 1150.

Dr. Borjas’s analysis of Maples Industries as a company with market power does not suffer from all of the same flaws. There is no evidence that any of the comparator firms deliberately paid higher-than-market wages. Dr. Borjas accounted for regional and industry factors in analyzing the wage trends at Maples Industries. That is, he not only used other local firms as comparators, but also compared wages at Maples Industries to those at other, similar, manufacturers. Specifically, he used wage data for: low-skill workers in Jackson and DeKalb Counties, combined; low-skill workers in Alabama as a whole; low-skill workers in non-metropolitan areas of Alabama; manufacturing employees in Alabama; and, textile workers in Alabama, Georgia, and Tennessee, combined. Unlike the wage trends in the Hall case, which were virtually the same for the comparator firms and the defendants’ firm, the wage trend for Maples Industries contrasted with those of the comparator firms Dr. Borjas examined in this case. Thus, Dr. Borjas’s “market power” analysis in this case does not suffer from the same problems as the similar analysis he performed in Hall.

ii. Hispanic school enrollment

In the report he submitted in the Hall case, Dr. Borjas used the number of Hispanic students enrolled in Russellville schools as a proxy for the immigrant population in the area. Id. at 1145. In his deposition in that case, he admitted “that the use of ethnic-breakdown school enrollment data in a study of this variety would be entirely novel.” Id. He also admitted that he had not performed any test to determine the validity of using enrollment data as a proxy for immigrant population, and that his “whole method would fail” if that use were invalid. Id. at 1146. Dr. Borjas admitted that, in comparing increases in Hispanic school enrollment with depression of wages, he did not control for any other factors that may have influenced wages: e.g., “changes in economic climate, demand for labor, changes in local hiring environment, or strategic corporate decisions.” Id. at 1147. Finally, Dr. Borjas’s theory in Hall was undermined by the fact that the total enrollment of Russellville schools remained static during the relevant time period: i.e., regardless of the percentage of immigrant workers in the population, the total supply of workers remained the same. There was no “supply shock” created by an influx of immigrants that allowed the defendants to lower wages due to an abundance of workers. Id. at 1147.

Here, Dr. Borjas once again used Hispanic school enrollment as a proxy for the immigrant population. In the report filed in the present case, Dr. Borjas stated that a “recent working paper issued by the Federal Reserve Bank of Atlanta” concluded that there is a correlation between Hispanic school enrollment and the employment of illegal immigrants. He noted that the population of Hispanic students in the Scottsboro and Jackson County school systems increased dramatically over the class period, while the overall enrollment remained constant. Thus, the enrollment numbers on which he relied are comparable to those in Hall: ie., an increase in Hispanic enrollment, combined with stagnant overall enrollment. As in Hall, that change in enrollment does not definitively demonstrate any increase in the total number of workers available to hire.

Moreover, this court is not entirely convinced that the single working paper cited by Dr. Borjas is sufficient evidence of the reliability of the use of enrollment figures as a proxy for illegal immigrant employment. In Hall, this court stated that “in light of the political and racial implications of a case of this variety, this court is not prepared to admit as reliable this novel use of Hispanic enrollment as a proxy for an influx of immigration.” Hall, 753 F.Supp.2d at 1147. Dr. Borjas’s citation to a single paper does not eliminate the novelty of his method, and this court has the same qualms about its reliability as expressed in Hall.

iii. Alternative causes and conflict with Dr. Borjas’s academic publications

Finally, this court in the Hall case determined that Dr. Borjas failed to adequately account for possible alternative causes for the decrease in wages at the defendants’ Russellville plant. First, the court noted that Dr. Borjas had previously applied his methodology on the national level only, and that its use was “entirely without precedent at the level of a single firm in a small rural town.” Id. at 1151. In. fact, Dr. Borjas “has been among the most stalwart critics of studies of the impacts of immigration on native wages done at geographic levels smaller than whole nations.” Id. In his academic literature, Dr. Borjas identified numerous economic factors that undermine the accuracy of studies of the impact of immigration on the local or regional level. Id. Yet he offered no explanation as to why he “chose[] to jettison [his] skepticism” for those studies in preparing his expert report for the Hall case. Id. (alterations supplied). He also did not account for factors specific to that case: the wage decisions at the plant were the result of the policies of a nationwide corporation, and that corporation was in the midst of financial turmoil (and ultimately bankruptcy) during the class period. Id. at 1152-53.

This court noted that, under Dr. Borjas’s general theory on the impact of immigration on wages, which assumed that all unauthorized workers increase the labor supply,

wages at Pilgrim’s Pride should fall if immigrants had moved into the area, even if Pilgrim’s Pride had never hired a single one. Thus, the same decline in plaintiffs’ real wages would occur even if the defendants had not committed the required predicate act — a fact that entirely eviscerates the assumption that the hiring (much less hiring with requisite knowledge) was the “but for” cause of plaintiffs’ depressed wages.

Any or all of these fact