Lesnik v. Se
| Decision Date | 01 October 2018 |
| Docket Number | Case No. 16-CV-01120-LHK |
| Parties | GREGOR LESNIK, et al., Plaintiffs, v. EISENMANN SE, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Plaintiffs Gregor Lesnik and Stjepan Papes (collectively, "Plaintiffs") have brought a suit stemming from their time working at a facility owned by Tesla, Inc. ("Tesla") in Fremont, California, against approximately 36 different defendants. Before the Court is a motion to dismiss submitted by Defendants Eisenmann Corporation ("Eisenmann"), Tesla, Mercedes-Benz U.S. International, Inc. ("Mercedes-Benz"), Deere & Company ("Deere"), REHAU Inc. ("REHAU"), LaX Fabricating Ltd. ("LaX"), Volkswagen Group of America Chattanooga Operations, LLC ("VW"), Dicastal North America, Inc. ("Dicastal"), and BMW Manufacturing Co., LLC ("BMW") (collectively, "Moving Defendants"). Having considered the parties' submissions, the relevant law, and the record in this case, the Court GRANTS in part and DENIES in part Moving Defendants' motion to dismiss.
Defendant Eisenmann is a manufacturer of specialized paint shop equipment. See ECF No. 37 (Second Amended Complaint, or "SAC") ¶ 70, 106(g); ECF No. 219 at 4. Eisenmann contracted with a number of manufacturing entities, such as Defendants Tesla, Mercedes-Benz, Deere LaX, REAHU, Lax, VW, and BMW, to install Eisenmann's equipment at their facilities. The SAC then alleges that Eisenmann, to fulfill these agreements, would hire an array of subcontractors who would then provide the laborers necessary to complete the equipment installation. SAC ¶ 9, 13. Although the SAC names a number of these subcontractors as Defendants, the ones that matter for present purposes are Defendants "Vuzem"1 and Gregurec USA, Inc.
Although all of the paint equipment installations described in the SAC occurred in the United States, Vuzem did not use American workers. Instead, the SAC alleges that Vuzem and the other subcontractor Defendants hired workers internationally. For example, to help install a paint shop at a Tesla facility in Fremont, California, Vuzem hired Plaintiff Gregor Lesnik, who resides in Slovenia, and Plaintiff Stjepan Papes, who resides in Croatia. Id. ¶¶ 37-38. Lesnik and Papes (like other workers) were brought to the United States on B-1 visas that are reserved for skilled work, even though Vuzem and Eisenmann knew the workers would actually be performing unskilled construction work. Id. ¶ 103. Eisenmann eventually submitted letters to the United States Consulate that contained false statements in order to obtain B-1 visas on Lesnik and Papes' behalf. The SAC further alleges that Eisenmann supervisors oversaw their work at the Tesla facility. Id. ¶¶ 40, 204.
The SAC alleges that the foreign workers, once in the United States, were paid far below minimum wage and were forced to work extreme hours. The SAC relies on Lesnik's experienceworking at the Tesla facility in Fremont2 to illustrate this. Lesnik typically worked 12 hours a day (and never less than 10), over 80 hours a week, over 250 hours a month, and received only 1 day in 14 off. Id. ¶ 184. Vuzem also threatened to withhold pay if Lesnik became too sick to work or reported a job injury, threatened to withhold medical benefits if Lesnik reported a job injury, threatened to withhold visas and immigration benefits, threatened to file a civil suit against Lesnik while he was hospitalized, and even told Lesnik that "this will not go well for you." SAC ¶ 201-03.
Plaintiffs filed the complaint initiating this suit on March 7, 2016. ECF No. 1. On July 15, 2016, Plaintiffs filed the First Amended Complaint. ECF No. 20. On November 11, 2017, Plaintiffs filed the Second Amended Complaint ("SAC"). ECF No. 37. On January 8, 2018, the Court unsealed the SAC. ECF No. 40.
On May 30, 2018, the Court set a hearing on September 13, 2018, for a consolidated motion to dismiss the SAC. ECF No. 192. The Court therefore denied as moot 8 then-outstanding motions to dismiss the SAC filed by individual Defendants.
On July 12, 2018, Moving Defendants file the instant consolidated motion to dismiss. ECF No. 219 ("Mot."). On August 9, 2018, Plaintiffs filed their opposition. ECF No. 238 ("Opp."). On August 23, 2018, Moving Defendants filed their reply. ECF No. 243 ("Reply").3
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." A complaintthat fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The U.S. Supreme Court has held that Rule 8(a) requires a plaintiff to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
The Court, however, need not accept as true allegations contradicted by judicially noticeable facts, see Schwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it "may look beyond the plaintiff's complaint to matters of public record" without converting the Rule 12(b)(6) motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor must the Court "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (internal quotation marks omitted). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).
Claims sounding in fraud are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001). Under the federal rules, a plaintiff alleging fraud "must state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b). To satisfy this standard, the allegations must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have doneanything wrong." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). Thus, claims sounding in fraud must allege "an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007). In other words, "[a]verments of fraud must be accompanied by 'the who, what, when, where, and how' of the misconduct charged." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (citation omitted). The plaintiff must also plead facts explaining why the statement was false when it was made. See In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1549 (9th Cir. 1994) (en banc), superseded by statute on other grounds as stated in Marksman Partners, L.P. v. Chantal Pharm. Corp., 927 F. Supp. 1297 (C.D. Cal. 1996).
"When an entire complaint ... is grounded in fraud and its allegations fail to satisfy the heightened pleading requirements of Rule 9(b), a district court may dismiss the complaint ... ." Vess, 317 F.3d at 1107 (9th Cir. 2003). The Ninth Circuit has recognized that "it is established law in this and other circuits that such dismissals are appropriate," even though "there is no explicit basis in the text of the federal rules for the dismissal of a complaint for failure to satisfy 9(b)." Id. A motion to dismiss a complaint "under Rule 9(b) for failure to plead with particularity is the functional equivalent of a motion to dismiss under Rule 12(b)(6) for failure to state a claim." Id.
If the Court determines that a complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend "shall be freely given when justice so requires," bearing in mind "the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks omitted). When dismissing a complaint for failure to state a claim, "a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Id. at 1130 (internalquotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).
Plaintiffs' 62-page Second Amended Complaint ("SAC") alleges five main causes of action. First, Plaintiffs allege that all Defendants violated the False Claims Act ("FCA"), 31 U.S.C. §§ 3729, et seq. Second, Plaintiffs allege that Vuzem, Gregurec, and...
To continue reading
Request your trial