Novoselac v. ISM Vuzem d.o.o.

Background

Stjepan Novoselac, Grega Povh, Davor Hudin, and Marijan Lazar sued ISM Vuzem d.o.o., HRID-Mont, d.o.o., Robert Vuzem, and Ivan Vuzem (the Vuzem Defendants), alleging federal and California wage violations. They alleged that the Vuzem Defendants brought them to the United States to provide labor to American companies and that they worked at a Tesla facility in Fremont, California, between November 2014 and June 2016.

The complaint asserted seven claims: unpaid minimum wages and overtime under the Fair Labor Standards Act (FLSA), and unpaid minimum wages, unpaid overtime, denial of rest periods, failure to provide accurate wage statements, and waiting-time penalties under California law. Tesla and Eisenmann Corporation were previously dismissed with prejudice. The Vuzem Defendants did not respond to the complaint, and the clerk entered defaults against them.

Novoselac, Povh, and Hudin filed the motions addressed in this order. Lazar did not file a motion for default judgment. The court stated that it would issue a separate order requiring Lazar to show why Lazar’s claims should not be dismissed for failure to prosecute.

Default Judgment

The court found that it had federal-question jurisdiction over the FLSA claims and supplemental jurisdiction over the related California claims. It also found specific personal jurisdiction over the Vuzem Defendants based on alleged California business contacts and concluded that the defendants had been properly served under the Hague Convention.

Because the Vuzem Defendants had defaulted, the court treated the complaint’s factual allegations as true except for the amount of damages. Applying the factors used to decide whether default judgment is appropriate, the court found that all but one factor favored default judgment. The court concluded that the claims were adequately supported by the complaint, counsel’s declaration, wage spreadsheets, and other submitted evidence.

The court also concluded that travel in the company vans counted as compensable work time. The plaintiffs’ evidence stated that supervisors drove the vans, gave work instructions during the trips, transported tools in the vans, and required the plaintiffs to use the vans. The court found that this travel time was compensable under both federal and California law.

The court’s claim-by-claim rulings were:

- Claim 1, FLSA unpaid minimum wages: granted in part as to unpaid minimum wages and liquidated damages; denied in part as to prejudgment interest. - Claim 2, FLSA unpaid overtime wages: granted in part as to unpaid overtime wages and liquidated damages; denied in part as to prejudgment interest. - Claim 3, California unpaid minimum wages: granted as to unpaid minimum wages, liquidated damages, and prejudgment interest. - Claim 4, California unpaid overtime wages: granted in part as to unpaid minimum wages and prejudgment interest; denied in part as to liquidated damages. This is how the order states the ruling, although the claim is labeled as a state-law unpaid-overtime claim. - Claim 5, California rest breaks: granted as to break-time premium pay and prejudgment interest. - Claim 6, California wage statements: granted as to wage-statement penalties. - Claim 7, California waiting-time penalties: granted as to waiting-time penalties.

The court directed counsel to submit a supplemental declaration by June 21, 2023, recalculating damages and interest for Claims 1, 2, and 4 and providing revised totals for Novoselac, Povh, and Hudin. The court deferred entry of the final default judgment while awaiting that submission.

Attorneys’ Fees and Costs

The plaintiffs requested $66,492.50 in attorneys’ fees and $1,847.87 in costs. Using the lodestar method—reasonable hours multiplied by reasonable hourly rates—the court approved 138.2 hours for counsel at $400 per hour and 149.5 hours for paralegals at $75 per hour. The court found the hours and rates reasonable and granted the motion for attorneys’ fees in the amount of $66,492.50.

The court stated that the bill of costs should be submitted to the clerk after entry of judgment. It did not resolve the requested costs in this order.

Disposition

Judge Beth Labson Freeman ordered that the motion for default judgment was granted as to Claims 3, 5, 6, and 7, and granted in part and denied in part as to Claims 1, 2, and 4. The court granted the attorneys’ fees motion for $66,492.50, required a supplemental damages declaration, and deferred entry of the final default judgment.