Lesnik v. Eisenmann SE

374 F.Supp.3d 923

Gregor LESNIK, et al., Plaintiffs,

v.EISENMANN SE, et al., Defendants.

Case No. 16-CV-01120-LHK

United States District Court, N.D. California, San Jose Division.

Signed March 20, 2019

William C. Dresser, Law Offices of William Dresser, San Jose, CA, for Plaintiffs Gregor Lesnik, Stjepan Papes.

Kimberly Friday, U.S. Attorney's Office, San Francisco, CA, for Plaintiff United States of America.

Quyen Le Ta, Kaitlyn M. Murphy, Boies Schiller Flexner LLP, Oakland, CA, for Defendants Eisenmann SE, Eisenmann Alagenbau GmbH & Co. KG, Eisenmann Alagenbau Verwaltung GmbH.

Quyen Le Ta, Alexander Justin Holtzman, Kaitlyn M. Murphy, Boies Schiller Flexner LLP, Oakland, CA, Aaron Micah Bernay, Pro Hac Vice, Kevin M. Tierney, Frost Brown Todd LLC, Cincinnati, OH, Catherine F. Burgett, Frost Brown Todd LLC, Columbus, OH, for Defendant Eisenmann Corporation.

John C. Hueston, Padraic William Foran, Hueston Hennigan LLP, Los Angeles, CA, for Defendant Telsa Motors, Inc.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

Re: Dkt. No. 300

LUCY H. KOH, United States District JudgePlaintiffs Gregor Lesnik and Stjepan Papes (collectively, "Plaintiffs") have brought suit stemming from their time working at a facility owned by Tesla, Inc. ("Tesla") in Fremont, California, against 36 different Defendants. Before the Court is an omnibus motion to dismiss filed 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"), Volvo Car Corp. and Volvo Car US Operations Inc. ("Volvo"), and BMW Manufacturing Co., LLC ("BMW"). ECF No. 300 ("Mot."). However, after the omnibus motion to dismiss was filed, Plaintiffs voluntarily dismissed with prejudice all claims against Mercedes-Benz, Deere, REHAU, LaX, VW, Discatal, Volvo, and BMW. ECF Nos. 315-22. Thus, the only remaining Defendants who filed the omnibus motion to dismiss are Eisenmann and Tesla ("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.

I. BACKGROUND

A. Factual Background

Defendant Eisenmann is a manufacturer of specialized paint shop equipment. See ECF No. 269 (third amended complaint, or "TAC") at ¶ 213(g); ECF No. 219 at 4. Eisenmann had relationships with a number of manufacturing entities, such as Tesla, to perform construction work related to Eisenmann's equipment. TAC at ¶ 70. The TAC 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. TAC at ¶ 84, 107. Although the TAC names a number of these subcontractors as Defendants, the one that matters for present purposes is Defendant "Vuzem.¹ "

Although all of the work described in the TAC occurred in the United States, Vuzem did not use American workers. Instead, the TAC 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, a resident of Slovenia, and Plaintiff Stjepan Papes, a resident of Croatia. Id. at ¶¶ 1-2, 60, 111, 213. Lesnik and Papes (like other workers) were brought to the United States on B-1 visas that are generally reserved for skilled work, even though Vuzem, Eisenmann, and Tesla allegedly knew the workers would actually be performing unskilled construction work. Id. at ¶¶ 87-95, 115, 145, 211. Eisenmann even allegedly submitted letters to the United States Consulate containing allegedly false statements to obtain B-1 visas on Lesnik and Papes' behalf. Id. at ¶¶ 140, 211, 213, 217. The TAC also alleges that Eisenmann supervised Lesnik and Papes' work at the Tesla facility. Id. at ¶ 140, 213.

The TAC alleges that the foreign workers, once in the United States, were paid far below minimum wage and were forced to work extreme hours. Lesnik allegedly worked at least 10 and on average 12 hours a day, over 80 hours a week, and received only 1 day in 14 off. Id. at ¶ 237. Papes is alleged to have generally "work[ed] the same number of hours for his work at all of the major manufacturing construction sites throughout his time working in the United States." Id. Vuzem also allegedly threatened to withhold pay if workers became too sick to work or reported a job injury; threatened to withhold medical benefits if workers reported a job injury; threatened to withhold visas and immigration status; threatened to file a civil suit against Lesnik while he was hospitalized; and even told Lesnik that "this will not go well for you." Id. at ¶ 315, 338-39. The TAC also alleges that the foreign workers were subject to poor living conditions in the United States, such as being housed in facilities without kitchens, having multiple workers sleep in the same bedroom, or typically having 6 to 10 workers share a single bathroom. Id. at ¶ 318.

B. Procedural History

The Court first discusses the instant case, then a previously-filed case by Lesnik against Eisenmann, Tesla, and Vuzem in Alameda County Superior Court, and lastly, a previously-filed workers' compensation action against Vuzem.

1. The Instant Case

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 April 25, 2017, the United States filed a notice that it would not intervene in the instant case. ECF No. 25. On April 25, 2017, the Court unsealed the complaint. ECF No. 26.

On August 8, 2017, the Court granted Plaintiffs' motion to file a second amended complaint, and directed the United States to make a "prompt decision" regarding intervention. ECF No. 31. On October 5, 2017, the United States filed another notice that it would not intervene in the instant case. ECF No. 34. On November 11, 2017, Plaintiffs filed the second amended complaint. ECF No. 37 (second amended complaint, or "SAC").

On July 12, 2018, various moving Defendants—Eisenmann, Tesla, Mercedes-Benz, Deere, REHAU, LaX, VW, Discatal, and BMW—filed a motion to dismiss the SAC. ECF No. 219. On October 1, 2018, the Court granted in part and denied in part the motion to dismiss the SAC. ECF No. 255 ("October 1, 2018 Order"). The Court dismissed Plaintiffs' False Claims Act ("FCA") claim without prejudice for, inter alia , failing to satisfy the heightened pleading standards of Federal Rule of Civil Procedure 9(b) as to all moving Defendants except Eisenmann, and failing to identify who was responsible for paying the visa fees for allegedly fraudulently-obtained B-1 visas that formed the basis of the alleged false claim. Id. at 14-15. In addition, the Court dismissed Plaintiffs' Fair Labor Standards Act ("FLSA") claim without prejudice because Plaintiffs failed to show that Eisenmann was Plaintiffs' joint employer liable under the FLSA for labor violations while Plaintiffs were employed. Id. at 19-20. Furthermore, the Court dismissed Plaintiffs' California Labor Code claims because Plaintiffs failed to identify the statutes and theories under which Plaintiffs were proceeding. Id. at 20. Additionally, the Court denied the motion to dismiss Plaintiffs' Trafficking Victims Protection Reauthorization Act ("TVPRA") claim and the California Trafficking Victims Protection Act ("CTVPA") claim as to Tesla and Eisenmann because Plaintiffs alleged enough facts to demonstrate that Tesla and Eisenmann knew or should have known of Vuzem's alleged mistreatment of its workers. Id. at 24-25. Lastly, the Court dismissed Plaintiffs' Racketeer Influenced and Corrupt Organizations Act ("RICO") claim without prejudice because Plaintiffs failed to adequately allege the existence of a RICO enterprise and failed to adequately allege a common purpose. Id. at 28, 30.

On October 31, 2018, Plaintiffs filed a 108-page third amended complaint. See generally TAC. The TAC alleges 13 causes of action (some of which are duplicative), which can be grouped into the following general categories: (1) violations of the FCA (count 1); (2) violations of the FLSA for failure to pay minimum wage and adequate overtime pay (counts 2 and 3); (3) violations of the California Labor Code (counts 4 to 8); (4) violation of the TVPRA (counts 9 and 11); (5) violation of the CTVPA (counts 10 and 12); and (6) violations of RICO (count 13). Id. at ¶¶ 125-401.

On November 28, 2018, Defendants Eisenmann, Tesla, Mercedes-Benz, Deere, REHAU, LaX, VW, Dicastal, Volvo, and BMW moved to dismiss the TAC in an omnibus motion to dismiss. See generally Mot. On December 17, 2018, Plaintiffs filed 18 dismissal notices, abandoning multiple class action claims and also dismissing with prejudice all of the Defendants that filed the omnibus motion to dismiss the TAC with the exception of Eisenmann and Tesla. ECF Nos. 304-13, 315-22. On December 20, 2018, Plaintiffs filed their opposition. ECF No. 325 ("Opp."). On January 7, 2019, Moving Defendants filed their reply. ECF No. 342 ("Reply"). On February 14, 2019, the United States filed a notice that the United States takes no position on Moving Defendants' motion to dismiss the TAC. ECF No. 349.

2. The Alameda County Superior Court Case

On June 5, 2015, Lesnik filed suit in Alameda County Superior Court against, inter alia , Eisenmann, Tesla, and Vuzem. ECF No. 130, Dresser Decl. at ¶ 4. Lesnik's Superior Court complaint was amended twice. Id. Lesnik's suit stated, inter alia , a negligence claim, various wage and hour claims, and an unfair business practices claim against Eisenmann, Tesla, and Vuzem. Id. at Ex. C. The factual predicate of Lesnik's Superior Court case all stemmed from generally the same factual predicate as the instant case, including the issuance of visas based...