Maslic v. ISM Vuzem d.o.o.

Background

The plaintiffs alleged that individuals were transported to the United States from Bosnia and Herzegovina, Slovenia, and Croatia to provide cheap labor for American companies in violation of wage-and-hour and human-trafficking laws. This case focused on work performed at Tesla’s facility in Fremont, California. The plaintiffs sued ISM Vuzem d.o.o. and related entities and individuals, Tesla, Inc., and Tesla’s general contractor, Eisenmann Corporation. Vuzem and Eisenmann had defaulted. All claims against Tesla had been dismissed except Claim 9, brought only by Sasa Maslic.

Maslic alleged that Vuzem obtained his labor through human trafficking and that Tesla knowingly benefited from Vuzem’s alleged trafficking scheme. Claim 9 asserted liability under the federal Trafficking Victims Protection Reauthorization Act and the California Trafficking Victims Protection Act.

Summary-judgment standard

The court applied the summary-judgment standard under Federal Rule of Civil Procedure 56. Summary judgment is appropriate when there is no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment as a matter of law. The court must view the evidence and reasonable inferences in favor of the party opposing the motion.

Procedural rulings

Maslic requested relief under Rule 56(d), which can allow additional discovery when a party shows by declaration that it cannot yet present facts needed to oppose summary judgment. The court denied that request, finding that Maslic had not shown the required diligence or explained how additional discovery would prevent summary judgment. The court also found that Tesla’s timely filing of its motion and the discovery disputes identified by Maslic did not justify Rule 56(d) relief.

Tesla moved to strike portions of Maslic’s opposition declaration under the “sham affidavit” rule. That rule generally prevents a party from creating a factual dispute by submitting a declaration that clearly and unambiguously contradicts earlier deposition testimony. The court granted Tesla’s motion in part as to declaration paragraphs concerning whether Maslic signed a contract with Vuzem, where he worked in the United States, Vuzem’s pay compared with average pay in Bosnia, and whether Tesla had a safety officer who spoke certain languages. The court found those portions clearly and unambiguously contradicted his deposition testimony.

The court denied Tesla’s motion in part as to declaration statements about Maslic’s reasons for continuing to accept Vuzem assignments. The court found that those statements explained or clarified his deposition testimony rather than creating a sham factual dispute.

The court granted Tesla’s administrative motion to strike. It struck Maslic’s sur-reply declaration and his counsel’s sur-reply declaration because they exceeded the permitted scope of the sur-reply, and it struck untranslated foreign-language documents because they were not accompanied by certified English translations. The court denied Maslic’s administrative motion to submit translations because the proposed translations were not prepared by a certified interpreter and appeared to have been assembled using a translation application and other interested persons.

California trafficking-law claim

The court granted Tesla’s motion for summary judgment in part to the extent Claim 9 was based on the California Trafficking Victims Protection Act. The court held that the California statutory provisions cited by the parties did not impose liability on a beneficiary of a trafficking scheme, as opposed to the perpetrator. Because Maslic alleged that Tesla was a beneficiary rather than the trafficker itself, the court granted summary judgment on that theory.

Federal trafficking-law claim

The federal statute allows a trafficking victim to sue a person who knowingly benefits financially, or receives something of value, from participating in a venture that the person knew or should have known engaged in human trafficking. To proceed against Tesla under that beneficiary theory, Maslic had to provide evidence from which a jury could find that Tesla knowingly benefited and that Tesla knew or should have known Vuzem was engaged in trafficking.

Tesla argued that Maslic could not show that Vuzem trafficked him. Tesla pointed to testimony that Maslic accepted repeated assignments for financial reasons, could not find work in Bosnia, controlled his passport and phone, and could leave his housing during free time. The court found that evidence sufficient to shift the burden to Maslic at the summary-judgment stage.

Maslic offered evidence that he continued working because he feared having to repay travel expenses and having his professional reputation damaged so that he could not obtain other work. He also described verbal abuse, unsafe working conditions, and work injuries for which he did not receive medical treatment. The court concluded that, viewed in Maslic’s favor, this evidence could support a reasonable inference that financial pressure and threats of financial harm caused him to continue working. The court stated that financial pressure, including threatened financial harm, may constitute serious harm under the federal trafficking statute.

Tesla also argued that Maslic could not show Tesla knew or should have known about the alleged trafficking. Tesla acknowledged receiving the benefit of labor at its Fremont facility but argued that the record lacked evidence of its knowledge. The court found that Tesla met its initial summary-judgment burden on this issue.

Maslic pointed to testimony that Tesla safety employees witnessed him working without equipment such as a gas mask, gloves, and protective clothing. He also testified that Tesla supervisors observed Vuzem employees working regularly and that a serious injury occurred at the facility. The court found that this evidence, although not strong, could support a reasonable inference that Tesla knew or should have known human trafficking was occurring at the facility. The court therefore held that Tesla’s actual or constructive knowledge was a question for the jury.

Disposition

Judge Beth Labson Freeman granted in part and denied in part Tesla’s motion for summary judgment on Claim 9: it was granted in part to the extent the claim was based on the California Trafficking Victims Protection Act and denied in part to the extent it was based on the federal Trafficking Victims Protection Reauthorization Act. The order did not decide whether Tesla was ultimately liable under the federal claim. The court also denied Maslic’s Rule 56(d) motion, granted in part and denied in part Tesla’s motion to strike Maslic’s opposition declaration, granted Tesla’s administrative motion to strike, and denied Maslic’s administrative motion to submit translated copies.