Monday, February 23, 2026

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Ninth Circuit:

California-Based Entity May Be Liable for Trafficking Abroad

En Banc Court Says Law That Broadens Civil Exposure to Include Those That Merely Attempt to Benefit From Forced Labor Practices Applies Retroactively, Drawing Sharp Dissent

By Kimber Cooley, associate editor

An en banc panel of the Ninth U.S. Circuit Court of Appeals held Friday that a 2023 law, extending civil liability under a human trafficking statute to include entities that have unsuccessfully attempted to benefit from forced labor practices, applies retroactively, reviving an action filed against a California-based entity for alleged violations abroad and drawing a dissenting opinion that accuses the majority of “divining…congressional intent where it does not exist.”

In so holding, the court reversed course from a divided three-judge panel opinion, issued in 2024, which found that the statute operates only prospectively. Senior Circuit Judge Susan P. Graber authored the dissenting view to that decision and wrote the opinion for the en banc court.

Friday’s decision further overrules a series of Ninth Circuit cases that held that laws that operate only to clarify previous civil statutes are not subject to a general presumption against retroactivity. Acknowledging that “we have at times held that ‘clarifying’ amendments are analyzed differently,” Graber wrote:

“[W]e overrule those case only insofar as they bypass a consideration of congressional intent or establish a contrary presumption regarding retroactivity.”

Chief Judge Mary H. Murguia and Circuit Judges Ronald M. Gould, Jennifer Sung, Salvador Mendoza Jr., as well as Ana de Alba joined in Graber’s opinion. Circuit Judge Consuelo M. Callahan dissented, saying:

“After purging our precedent of past inconsistent decisions, the majority makes the curious choice to fold the reasoning of these ‘overruled’ cases into its…analysis, reinfecting the law it claims to cleanse. Specifically,…the majority continues to focus on whether the [statute at issue] was a ‘clarification,’ instead of searching for any real indication of clear congressional intent of retroactivity.”

Circuit Judges Bridget Shelton Bade and Anthony D. Johnstone joined in Callahan’s dissent in full, and Circuit Judges Milan D. Smith Jr. and Daniel Aaron Bress agreed that the 2023 law does not apply retroactively.

Forced Labor

The decision comes by way of a case in which Cambodian plaintiffs, Keo Ratha and six others, filed a complaint in 2016 against their employers, Phatthana Seafood Co. Ltd. and S.S. Frozen Food Co. Ltd., asserting that the defendants engaged in forced labor practices at Thailand-based seafood processing factories.

In the pleading, they also asserted claims against Rubicon Resources LLC, a Delaware company with a principal place of business in Culver City which was founded by the owner of Phatthana to facilitate the sale of the seafood within the U.S. They alleged that Rubicon is a beneficiary of the allegedly illegal practices under a provision of the Trafficking Victims Protection Reauthorization Act (the “TVPRA”) found at 18 U.S.C. §1595.

At the time of the pleading, §1595(a) provided:

“[A] victim…may bring a civil action against the perpetrator (or whoever knowingly benefits…from participation in a venture which that person knew or should have known has engaged in an act in violation of this chapter)….”

According to the plaintiffs, Rubicon officers were aware of what went on in Thailand as they had internally circulated, in 2012, news stories from the area that reported Ratha’s allegations of human trafficking and had conducted audits of the factories in arranging for the importation of Phatthana’s product.

Summary Judgment

On Dec. 21, 2017, District Court Judge John F. Walter of the Central District of California granted Rubicon’s motion for summary judgment, ruling that the plaintiffs failed to demonstrate that the company knowingly participated in a human trafficking scheme or actually benefitted from the illegal practices, noting that attempts to sell Phatthana shrimp to Walmart Inc. failed due to the retail giant’s concern over factory conditions.

The Ninth Circuit affirmed on appeal in February 2022 (in a decision referred to in Friday’s opinion as “Ratha I”), saying that existing law did not extend civil liability to failed attempts to secure advantages from trafficking. Fifteen days after the U.S. Supreme Court denied certiorari on Dec. 5, 2022, Congress voted to add language to a pending bill, the Abolish Trafficking Reauthorization Act (“ATRA”), to specify that §1595(a) applies to “attempts…to benefit.”

After President Joe Biden signed the legislation in January 2023, the plaintiffs filed a motion under Federal Rule of Civil Procedure 60(b)(6), asking the District Court to vacate the defense judgment based on the new statute. Walter denied the request, holding that ATRA was not retroactive and, even if it was, the court’s granting of summary judgment was supported by alternative grounds.

Landgraf Case

Graber noted that the 1994 U.S. Supreme Court case of Landgraf v. USI Film Products established that a new law will be applied retroactively if Congress has expressly indicated that it should be given retroactive effect or showed a clear intent for such an operation, saying:

“[If] Congress explicitly included a retroactive effective date….we honor that effective date….But ‘[i]f the statute would [otherwise] operate retroactively,’ courts apply a presumption against statutory retroactivity.”

After dispensing with decisions that suggest that the analysis is different for “clarifying” amendments, she noted that §1595(a) “contains no explicit retroactive effective date” and opined:

“The TVPRA, as interpreted by Ratha I, did not provide civil liability for an attempt to benefit from forced labor, and the ATRA unambiguously does so….Accordingly, the presumption against retroactivity applies.”

Saying that “[w]e therefore ask…whether Congress…clearly meant for the ATRA to apply retroactively,” she remarked:

“Congress intended for the ATRA to have retroactive effect. Congress made its intent clear by clarifying the meaning of an ambiguous statute, by labeling the amendment ‘technical and clarifying,’ and by passing its clarification soon after we misinterpreted the statute’s meaning. These indicia are similar to those that we have found sufficient in the past to warrant retroactive application of a law.”

One Interpretation

Pointing out that “Ratha I memorializes” only one reasonable interpretation of the law, she said that other circuit courts have come to a contrary conclusion as to whether attempted actions are covered by §1595(a) and concluded:

“[A] fast-acting legislative body that amends a statute in the face of an ambiguity or a dispute among courts as to the meaning of the statute suggests that the change is a mere clarification, rather than a substantive change in the law.”

Turning to Water’s denial of the plaintiff’s Rule 60(b) motion, she commented that “[w]e may review the district court’s reasons for granting summary judgment because the court incorporated them into the decision under review by relying on them to deny Plaintiffs’ Rule 60(b) motion.” She declared:

“Because a reasonable jury could have found that Rubicon knew or should have known about Phatthana’s alleged human trafficking, the district court erred in relying on that ground when it denied Plaintiffs’ Rule 60(b)(6) motion.”

The jurist added:

“Having found legal error in [the] grounds on which the district court relied when denying Plaintiffs’ Rule 60(b)(6) motion, we now consider whether the district court’s denial of Plaintiffs’ motion was, itself, error. We hold that it was.”

She reasoned that the fact that the retroactive change in law resolved an unsettled legal question at issue in the case “weighed strongly in favor of granting Plaintiffs’ motion,” and said that “Plaintiffs are entitled to relief…from the district court’s final order.”

Callahan’s View

Callahan wrote:

“The majority opinion is rooted in a misunderstanding of the statutory framework…and a pervasive confusion that I have been unable to remedy despite my best efforts. Compounding errors is the majority’s focus on the alleged clarifying nature of the ATRA, causing it to rely on erroneous reasoning from cases it has itself overruled.”

She continued:

“Far from correcting our precedent to align with Landgraf, the majority flees from it, abandoning Landgraf as quickly as it claimed to embrace it. The majority’s focus on whether the ATRA was ‘clarifying’ an ambiguity blinded it from the real question: whether Congress clearly intended the statute to be retroactive….[U]nder a faithful application of Landgraf we should decline to give the ATRA retroactive effect because there is no clear indication that Congress intended it to be retroactive.”

She also took issue, in a portion of the opinion with which Bress did not join, with the majority’s analysis of the Rule 60(b) denial, saying:

“Finding insufficient error in the district court’s Rule 60(b) order, the majority makes the extraordinary decision to review the underlying judgment, breaking a rule established by the Supreme Court over four decades ago, and departing from all twelve of our sister circuits. It is hard to make an error more striking than this. Ultimately, the district court did not abuse its discretion in denying Plaintiffs’ Rule 60(b) motion and the majority’s holding otherwise is error.

“Because I cannot stand idly by while our court makes such errors, I respectfully dissent.”

Smith joined in the dissent except as to a section dedicated to picking apart the majority’s decision as to the retroactivity question.

The case is Ratha v. Rubicon Resources LLC, 23-55299.