Novoselac v. Ism Vuzem D.O.O.
| Docket Number | 21-cv-08654-BLF |
| Decision Date | 07 June 2023 |
| Parties | STJEPAN NOVOSELAC, et al., Plaintiffs, v. ISM VUZEM D.O.O., et al, Defendants. |
| Court | U.S. District Court — Northern District of California |
ORDER GRANTING IN PART MOTION FOR DEFAULT JUDGMENT GRANTING MOTION FOR ATTORNEYS' FEES; AND DIRECTING MOVING PARTIES' COUNSEL TO SUBMIT SUPPLEMENTAL DECLARATION [RE ECF 59, 61]
Plaintiffs Stjepan Novoselac (“Novoselac”), Grega Povh (“Povh”), Davor Hudin (“Hudin”), and Marijan Lazar (“Lazar”) allege that they were transported to the United States from their home countries of Bosnia and Herzogovenia, the Republic of Slovenia, and Croatia to provide cheap labor to American companies. See generally Compl., ECF 1-1. They assert federal and state wage and hour claims against four Slovenian individuals and entities who employed them and contracted their labor to American companies: Defendants ISM Vuzem d.o.o., HRID-Mont d.o.o., Robert Vuzem, and Ivan Vuzem (“the Vuzem Defendants”). See id. They also asserts claims against Defendants Tesla, Inc. (“Tesla”) and its general contractor, Eisenmann Corporation (“Eisenmann”), based on labor Plaintiffs allegedly performed at Tesla's facility in Fremont California. See id.
Tesla and Eisenmann have been dismissed from the suit with prejudice. See Order, ECF 52. The Vuzem Defendants failed to respond to the complaint and the Clerk entered default against them. See Clerk's Entries of Default, ECF 37-40. The Court thereafter set a deadline for Plaintiffs to file motions for default judgment against the Vuzem Defendants. See Orders, ECF 52, 55. The Court advised that failure to file a motion for default judgment would result in dismissal without further notice for failure to prosecute. See id.
Three of the four plaintiffs - Novoselac, Povh, and Hudin - timely filed the present motions for default judgment and attorneys' fees against the Vuzem Defendants. See Mot. for Default Judgment, ECF 59; Mot. for Attorneys' Fees, ECF 61. The Court finds the motions suitable for decision without oral argument. See Civ. L.R. 7-1(b). For the reasons discussed below, the motion for default judgment is GRANTED IN PART and motion for attorneys' fees is GRANTED.
The fourth plaintiff, Lazar, did not file a motion for default judgment. In conjunction with this order, the Court will issue a separate Order to Show Cause why Lazar's claims should not be dismissed for failure to prosecute.
Plaintiffs filed this suit in the Alameda County Superior Court in August 2021. See Compl., ECF 1-1. Plaintiffs are residents of Bosnia and Herzogovenia, the Republic of Slovenia, and Croatia. See id. ¶ 1. They allege that the Vuzem Defendants, all Slovenia-based companies and individuals, hired Plaintiffs to provide labor to American companies in the United States. See id. ¶¶ 2-4, 7-9, 16-17. As described below, a substantial portion of that labor allegedly was performed in California.
According to Plaintiffs, the Vuzem Defendants contracted with Tesla and its general contractor, Eisenmann, for Plaintiffs' labor services on a construction project at Tesla's facility in Fremont, California. See Compl. ¶¶ 16, 48. Plaintiffs worked at the Tesla facility at various times between November 2014 and June 2016. See id. ¶ 17. Plaintiffs allege that while in California they lived in assigned housing units, were picked up by a van at 6:30 a.m. every Monday through Saturday for transport to the Tesla facility, and were returned to their housing units after 6:00 p.m. every Monday through Friday and after 4:00 p.m. every Saturday. See id. ¶ 53. Plaintiffs also worked many Sundays. See id. Plaintiffs claim that they were paid a flat rate per month, in violation of federal and state laws requiring payment of minimum wages and overtime wages. See id. ¶¶ 26, 38, 54-57, 61. Plaintiffs also claim that they were not given rest periods, wage statements, or waiting time penalties required under California state law. See id. ¶¶ 65, 70, 81-82.
Based on these allegations, Plaintiffs filed the complaint in this action asserting the following claims against the Vuzem Defendants, Eisenmann, and Tesla: (1) failure to pay minimum wages in violation of the Fair Labor Standards Act (“FLSA”); (2) failure to pay overtime wages in violation of the FLSA; (3) failure to pay minimum wages in violation of California law; (4) failure to pay overtime wages in violation of California law; (5) failure to provide rest periods in violation of California law; (6) failure to provide accurate wage statements in violation of California law; and (7) failure to pay waiting time penalties in violation of California law.
Defendants Eisenmann and Tesla removed the action to federal district court on November 5, 2021 on the basis of federal question jurisdiction, as the complaint asserts claims under the federal FLSA. See Not. of Removal, ECF 1. Eisenmann and Tesla filed a motion to dismiss the complaint that was granted with leave to amend. See Order, ECF 51. Plaintiffs did not amend the complaint within the deadline set by the Court, which resulted in the dismissal of Eisenmann and Tesla from the suit with prejudice. See Order, ECF 52. The Vuzem Defendants failed to respond to the complaint, and the Clerk entered default against them. See Clerk's Entries of Default, ECF 37-40. Plaintiffs Novoselac, Povh, and Hudin now seek default judgment and attorneys' fees against the Vuzem Defendants.
Plaintiffs Novoselac, Povh, and Hudin (“Moving Parties”) seek default judgment against the Vuzem Defendants on all seven claims in the complaint.
Default may be entered against a party who fails to plead or otherwise defend an action, who is neither a minor nor an incompetent person, and against whom a judgment for affirmative relief is sought. Fed.R.Civ.P. 55(a). After entry of default, a court may, in its discretion, enter default judgment. Fed.R.Civ.P. 55(b)(2); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980).
In deciding whether to enter default judgment, a court may consider the following factors: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claims; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
In considering these factors, all factual allegations in the plaintiff's complaint are taken as true, except those related to damages. See TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 91718 (9th Cir. 1987). When the damages claimed are not readily ascertainable from the pleadings and the record, the court may either conduct an evidentiary hearing or proceed on documentary evidence submitted by the plaintiff. See Johnson v. Garlic Farm Truck Ctr. LLC, 2021 WL 2457154, at *2 (N.D. Cal. Jun. 16, 2021).
“When entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and parties.” In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). The Court discusses in turn jurisdiction, service of process, the Eitel factors, and the requested relief.
The Court has federal question jurisdiction over Claims 1 and 2 for violations of the FLSA, because those claims are brought under a federal statute. See 28 U.S.C. § 1331 (“The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.”). The Court has supplemental jurisdiction over Claims 3-7, asserted under state law, as those claims arise out of the same wage and hour violations that form the basis of the FLSA claims. See 28 U.S.C. § 1367(a) ().
The Court has specific personal jurisdiction over the Vuzem Defendants based on factual allegations which, when accepted as true, establish that: the Vuzem Defendants purposefully directed their activities to California and availed themselves of the privilege of conducting business in California; the claims of the complaint arise out of those forum-related activities; and exercise of jurisdiction over the Vuzem Defendants is reasonable. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (setting forth requirements for specific personal jurisdiction). The complaint alleges among other things that ISM Vuzem d.o.o. entered into contracts with Eisenmann and Tesla in California for Plaintiffs' labor services at Tesla's facility in Fremont, California. See Compl. ¶ 16. The complaint also alleges that Robert and Ivan Vuzem own and control the operations of ISM Vuzem d.o.o. See id. ¶¶ 8-9. Robert and Ivan Vuzem allegedly traveled to the worksite at the Tesla facility in Fremont, California and corresponded with Plaintiffs regarding their wages. See id. ¶¶ 15, 23.
In addition, the complaint alleges that “between Ivan Vuzem and Robert Vuzem and each of ISM Vuzem d.o.o and HRID-MONT d.o.o. there is such a unity of interest and ownership between the entities and their equitable owners that the separate...
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