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The 2d U.S. Circuit Court of Appeals has ruled that federal immigration law does not clearly pre-empt a New York law that allows undocumented workers to recover lost U.S. earnings if the award is not a “direct and positive obstacle” to the law’s objectives. Madeira v. Affordable Housing Foundation, No. 04-3606-cv. Jose Raimondo Madeira, an illegal immigrant from Brazil, was hired to work for C&L Construction. In June 2001, he was severely injured after falling from the top of a building under construction in Monroe, N.Y. Disabled by the accident, he filed suit in the Southern District of New York against the owner of the site, Affordable Housing, and its general contractor, Mountain Developers Associates, claiming violations of N.Y. Lab. Law � 240(1), the so-called Scaffold Law. The defendants filed an indemnification claim against C&L. The jury in U.S. District Judge Colleen McMahon’s courtroom awarded Madeira a total of $638,671 in compensatory damages. In the second phase of the trial, the jury found that C&L was 82% liable and had to indemnify Affordable and Mountain. On appeal, C&L, Affordable and Mountain claimed that Madeira was not entitled to recover lost wages because he was an illegal immigrant-at least not at the rate of pay he was receiving in the United States. They claimed that under Hoffman Plastic Compounds Inc. v. NLRB, 535 U.S. 137, McMahon was required to find that federal immigration law precluded a state tort or labor law award to an illegal immigrant. If there is to be any recovery, it should be at the pay rates of his native Brazil. Writing on behalf of the 2d Circuit panel, Judge Reena Raggi said that the New York Court of Appeals, New York’s highest court, had rejected a similar challenge to an illegal immigrant’s recovery just this year in Balbuena v. IDR Realty, 6 N.Y. 3d 338. The court had ruled that the Scaffold Law was meant to protect “all workers in qualifying employment situations-regardless of immigration status.” However, the 2d Circuit upheld McMahon’s rulings on grounds different from the Balbuena court, namely that the Immigration Reform and Control Act of 1986 (IRCA) does not clearly pre-empt New York law on compensatory damages for lost earnings at U.S. pay rates under these specific circumstances. Not only does New York law hold site owners and general contractors absolutely liable, Raggi wrote, it “specifically extends the protections of that law to undocumented workers.” Federal law penalizes employers who employ illegal immigrants and subjects them to criminal penalties if they engage in a pattern of employing illegal workers. Amendments to the act in 1990 imposed penalties on workers themselves, but only if they knowingly or recklessly used false documents in obtaining employment. In addition, Hoffman Plastic was “distinguishable from this case in important . . . respects.” Raggi said that “because the application of New York law for calculating compensatory damages against the various appellants liable for personal injury in this case does not require any ‘discounting’ of IRCA criminality by Madeira himself, the facts simply do not present the same concern for subversion of federal immigration law that was identified in Hoffman Plastic.” The legal distinction, Raggi said, is that Hoffman Plastic was trying to reconcile two federal statutes, while, here, “appellants urge us to hold that immigration law stands as an absolute bar to well-established state law relating to compensable damages for personal injury.” Also, in the context of compensatory damages for personal injury, she said, Congress neither explicitly nor implicitly pre-empted state law, she said, and an award of lost U.S. wages does not “stand as a direct and positive obstacle to IRCA’s objectives.”

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