Novoselac v. ISM Vuzem d.o.o.

Background

The plaintiffs sued for wages and penalties allegedly owed for construction work at Tesla’s facility in Fremont, California, performed between November 2014 and June 2016. The complaint asserted California claims for minimum wages, overtime wages, rest breaks, and waiting-time penalties. The motion addressed claims 3, 4, 5, and 7 against Tesla, Inc. and Eisenmann Corporation, the defendants who filed the motion.

The plaintiffs alleged that Tesla hired Eisenmann as the general contractor, Eisenmann hired ISM Vuzem d.o.o. as a subcontractor, and the plaintiffs were direct employees of ISM Vuzem d.o.o. They further alleged that Tesla and Eisenmann were legally treated as their employers under California Labor Code section 2750.5 because Eisenmann and ISM Vuzem d.o.o. did not hold contractor’s licenses.

Employer Status

The moving parties asked the court to consider a contractor’s license held by a nonparty, Vuzem USA Company. They appeared to ask the court to determine that Vuzem USA Company, rather than ISM Vuzem d.o.o., was the plaintiffs’ employer. The court held that it could not make that factual determination on a motion under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint adequately states a claim based on its allegations.

Statutes of Limitations

The court determined that claims 3, 4, and 5 were subject to three-year limitations periods and claim 7 was subject to a one-year limitations period. Treating the alleged completion date of “June of 2016” in the light most favorable to the plaintiffs, the court used June 30, 2016, as the starting date. Without tolling, the one-year period expired June 30, 2017, and the three-year periods expired June 30, 2019. The plaintiffs filed this case on August 3, 2021.

The plaintiffs alleged that earlier state and federal proceedings tolled the limitations periods. The court considered two possible forms of tolling: a federal rule that can pause the limitations period for members of a proposed class action, and California’s equitable tolling rule, which may apply when a person reasonably and in good faith pursues one of several legal remedies.

The court concluded that the earlier state proceeding did not support either form of tolling because its class claim was dismissed on June 22, 2016, before the limitations periods in this case began. As to the earlier federal proceeding, the court found that tolling could begin no earlier than January 8, 2018, when the relevant amended complaint was unsealed and the moving parties could receive notice of the proposed class claims. By then, the one-year period for claim 7 had already expired, so claim 7 appeared time-barred.

For claims 3, 4, and 5, approximately 18 months of the three-year periods had elapsed before any possible tolling began. The court found that tolling as to Tesla and Eisenmann appeared to end on March 20, 2019, when the wage and hour class claims against them were dismissed with prejudice in the earlier federal proceeding. The plaintiffs therefore had to file by approximately September 20, 2020, but filed on August 3, 2021. The court concluded that claims 3, 4, 5, and 7 appeared time-barred even assuming that the claimed tolling rules applied.

Disposition

Judge Beth Labson Freeman granted the motion to dismiss the complaint with leave to amend because all claims against Tesla and Eisenmann appeared time-barred and the plaintiffs had not alleged facts showing that tolling saved those claims. The court did not reach the moving parties’ additional argument that tolling could not apply when the underlying class claims were dismissed with prejudice, because the moving parties had not provided adequate supporting briefing.

Any amended complaint had to be filed by June 24, 2022, and the amendment was limited to facts concerning statutes of limitations and tolling. The plaintiffs could not add parties or claims without express permission from the court. The order terminated ECF 12.