Lesnik v.Eisenmann SE

Background

Gregor Lesnik and Stjepan Papes moved to enforce a confidential settlement agreement against Eisenmann Corporation, Eisenmann SE, Eisenmann Anlagenbau Verwaltung GmbH, and Eisenmann Anlagenbau GmbH & Co. KG. They also requested sanctions. The parties had reached the settlement during a January 17, 2020 settlement conference and later signed a final agreement. The court had dismissed the claims against the settling defendants while retaining jurisdiction to enforce the settlement.

The settlement required Eisenmann Corporation and Tesla to search for and produce information about Vuzem workers at Tesla’s Fremont facility. It also required Eisenmann Corporation to search for records from 2006 through January 17, 2020 that were sufficient to identify Eastern European workers from Vuzem and other remaining named defendants at certain worksites in the United States. The listed record categories included visa invitation letters, purchase orders, and records or logs, including existing copies of visas, passports, and I-9 forms.

Parties’ Positions

The plaintiffs argued that the defendants had failed to provide a complete list of workers and a complete production of visa invitation letters, purchase orders, visas, passports, and I-9 forms. Eisenmann Corporation argued that it had produced all responsive information in its possession, custody, or control. It also argued that the agreement imposed further discovery obligations on Eisenmann Corporation and Tesla, not on the Eisenmann German Entities.

Court’s Analysis

The court held that the settlement agreement was binding and enforceable and that it had authority to enforce it. It interpreted the agreement under California contract law.

The court concluded that Paragraphs 8.a–8.c required further discovery from Eisenmann Corporation and Tesla, but did not impose further discovery obligations on the Eisenmann German Entities. The court therefore treated the plaintiffs’ enforcement request as directed against Eisenmann Corporation rather than the German Entities.

The court found that Eisenmann Corporation had complied with Paragraph 8.a by producing information including Vuzem workers’ names and last known addresses at Tesla’s Fremont facility. The agreement did not require Eisenmann Corporation to identify the workers’ countries of origin.

The court also rejected the plaintiffs’ request for a more complete list of Eastern European workers. The agreement required production only to the extent the information was in Eisenmann Corporation’s possession, custody, or control, and the plaintiffs had not shown that Eisenmann Corporation possessed additional responsive information.

The court interpreted Paragraph 8.b as requiring production of records only when they were sufficient to identify Eastern European workers at the specified worksites. It did not require blanket production of every visa invitation letter, purchase order, passport, visa, or I-9 form in Eisenmann Corporation’s possession, custody, or control.

The court nevertheless found two specific requests appropriate in part. First, because Eisenmann Corporation had not clarified whether it searched for Vuzem timesheets identified through five Eisenmann employees, the court ordered it to search for those timesheets. It had to produce them only if they identified Eastern European Vuzem workers not already identified in its prior production. Second, the court ruled that Eisenmann Corporation had to produce the relevant purchase orders themselves, rather than a sample purchase order and a spreadsheet, but only when the purchase orders helped identify the workers covered by Paragraph 8.b.

Sanctions

The plaintiffs sought sanctions under Federal Rules of Civil Procedure 11, 26(g), and 37, and under 28 U.S.C. § 1927. The court denied the request because the plaintiffs had not complied with the local rule requiring sanctions motions to be filed separately, and because it found Eisenmann Corporation’s conduct neither unreasonable nor vexatious.

Disposition

The court GRANTED in part and DENIED in part the plaintiffs’ motion to compel enforcement of the settlement. It ordered Eisenmann Corporation to search for and, if required by Paragraph 8.b, produce the relevant Vuzem timesheets and qualifying purchase orders within 14 days of the order. The court DENIED the plaintiffs’ request for sanctions.