Tennessee Judge Lets Filipino Nurses' Trafficking and RICO Claims Against National Health Proceed

The ruling in Precioso v. National Health Corporation, No. 3:24-cv-00561, permits claims against National Health Corporation, Jeffrey R. Smith, Maria Wong, Andrew Huckabay, and Rachel Kamau to proceed past the pleading stage.

Applying the standard that factual allegations must be accepted as true and construed in the light most favorable to the plaintiffs, the court held that the plaintiffs had sufficiently stated claims upon which relief may be granted.

The plaintiffs, registered nurses from the Philippines, allege that the defendants recruited hundreds of nurses to work at National Health Corporation facilities in the United States. According to the complaint, the defendants built multi-million-dollar businesses on what the plaintiffs characterize as the indentured servitude of these foreign nurses, who were allegedly lied to, underpaid, and forced to work in unsafe conditions.

The filing alleges the defendants maintained control over the nurses by threatening baseless legal action, altering immigration status, and imposing serious financial harm if they attempted to leave. The complaint cites contracts the plaintiffs describe as illegal that allegedly offered no way for nurses to terminate employment and demanded repayment of upwards of $40,000 — often exceeding the nurses' net annual pay — if they stopped working for any reason.

The suit brings counts under the Trafficking Victims Protection Act (18 U.S.C. §§ 1589 et seq.), the federal RICO Act (18 U.S.C. §§ 1961 et seq.), the Civil Rights Act of 1866 (42 U.S.C. § 1981), the Tennessee Human Trafficking Act, the Georgia RICO Act, and fraud.

Wage-and-hour claims against National Health Corporation proceed under the Virginia Overtime Wage Act and the Fair Labor Standards Act. The plaintiffs also assert breach of contract claims against National Health Corporation, Smith, and Infinity Care Partners, LLC.

The defendants had moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. The court denied the motions at Doc. Nos. 79, 98, and 100.