Lesnik v.Eisenmann SE et al, No. 5:2016cv01120 - Document 617 (N.D. Cal. 2023)
Court Description: ORDER DENYING 613 DEFAULT JUDGMENT ON CLAIMS 2 AND 3; GRANTING 615 RECONSIDERATION OF DENIAL OF ATTORNEYS' FEES ON CLAIM 9; AND DENYING WITHOUT PREJUDICE 614 RULE 54 MOTION FOR ATTORNEYS' FEES. Signed by Judge Beth Labson Freeman on 5/30/2023. (blflc1, COURT STAFF) (Filed on 5/30/2023)
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Lesnik v.Eisenmann SE et al Doc. 617 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 1 of 13 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 9 GREGOR LESNIK and STJEPAN PAPES, Plaintiffs, 10 v. United States District Court Northern District of California 11 12 EISENMANN SE, et al., Defendants. 13 Case No. 16-cv-01120-BLF ORDER DENYING DEFAULT JUDGMENT ON CLAIMS 2 AND 3; GRANTING RECONSIDERATION OF DENIAL OF ATTORNEYS’ FEES ON CLAIM 9; AND DENYING WITHOUT PREJUDICE RULE 54 MOTION FOR ATTORNEYS’ FEES [Re: ECF 613, 614, 615] 14 15 16 17 Before the Court are three motions filed by Plaintiff Stjepan Papes (“Papes”): (1) a 18 renewed motion for default judgment on Claims 2 and 3, see Mot. for Def. Jud., ECF 613; 19 (2) an administrative motion for leave to file a motion for reconsideration of a prior order denying 20 attorneys’ fees in connection with Claim 9, see Admin. Mot., ECF 615; and (3) a motion for 21 attorneys’ fees and costs on Claims 2, 3, and 9 under Federal Rule of Civil Procedure 54, see Fees 22 Mot., ECF 614. Plaintiff Gregor Lesnik (“Lesnik”) is not a moving party with respect to the 23 current motions. The Court finds the motions suitable for decision without oral argument. See 24 Civ. L.R. 7-1(b). 25 For the reasons discussed below, Papes’ fourth motion for default judgment on Claims 2 26 and 3 is DENIED. Papes’ administrative motion for leave to file a motion for reconsideration, and 27 his motion for reconsideration, are GRANTED. Finally, Papes’ Rule 54 motion for attorneys’ fees 28 and costs is DENIED WITHOUT PREJUDICE. Dockets.Justia.com Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 2 of 13 1 United States District Court Northern District of California 2 I. BACKGROUND This case was filed in 2016 and was litigated before District Judge Lucy H. Koh for nearly 3 six years before it was reassigned the undersigned judge in 2022. The operative third amended 4 complaint (“TAC”) alleges that Robert Vuzem and Ivan Vuzem are residents of Slovenia who own 5 and hold executive positions at ISM Vuzem, d.o.o., a Slovenia-based company. See TAC ¶¶ 9-11, 6 ECF 269. ISM Vuzem USA, Inc., now dissolved, was a wholly owned subsidiary of ISM Vuzem, 7 d.o.o. See id. ¶ 12. Vuzem USA, Inc. is a wholly owned subsidiary of ISM Vuzem, d.o.o. See id. 8 ¶ 13. HRID-MONT d.o.o. is a Slovenia-based company owned by the wife of Robert Vuzem. See 9 id. ¶ 14. These defendants (“the Vuzem Defendants”) allegedly trafficked low-skilled European 10 laborers by transporting them to the United States to perform work for American manufacturers 11 for less than minimum wage and without overtime pay. See id. ¶¶ 55-57. Lesnik, a resident of 12 Slovenia, and Papes, a resident of Croatia, allegedly were transported to the United States by the 13 Vuzem Defendants to work at various car manufacturing plants. See id. ¶¶ 59-60. 14 The TAC asserts thirteen claims against thirty-seven defendants on behalf of Lesnik and 15 Papes and all others similarly situated. See generally TAC. While the case was pending before 16 Judge Koh, most of those claims and defendants were dismissed. See Status Report, ECF 605. 17 The only claims remaining in the case are three claims asserted by Plaintiff Papes, proceeding 18 individually, against the Vuzem Defendants: Claim 2 for minimum wages under the Fair Labor 19 Standards Act (“FLSA”), Claim 3 for overtime wages under the FLSA, and Claim 9 for trafficking 20 and coerced labor under the Trafficking Victims Protection Reauthorization Act (“TVPRA”). See 21 id. The Vuzem Defendants have defaulted. See Clerk’s Entries of Default, ECF 430-31, 444-47. 22 Judge Koh denied three prior motions for default judgment against the Vuzem Defendants 23 on Claims 2 and 3, without prejudice. See Prior Order Re Claims 2 and 3, ECF 587. Papes now 24 brings a fourth motion for default judgment on Claims 2 and 3. Judge Koh granted in part Papes’ 25 prior motion for default judgment on Claim 9 and denied Papes’ request for attorneys’ fees in 26 connection with Claim 9. See Prior Order Re Claim 9, ECF 586. Papes seeks reconsideration of 27 Judge Koh’s denial of attorneys’ fees in connection with Claim 9. Finally, Papes seeks an award 28 of attorneys’ fees and costs in connection with Claims 2, 3, and 9. 2 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 3 of 13 1 II. On September 20, 2021, Judge Koh issued an order denying without prejudice Papes’ third 2 United States District Court Northern District of California MOTION FOR DEFAULT JUDGMENT ON CLAIMS 2 AND 3 (ECF 613) 3 motion for default judgment against the Vuzem Defendants on Claims 2 and 3, which seek 4 minimum wages and overtime wages under the FLSA. This Court discusses Judge Koh’s ruling 5 where relevant to Papes’ current fourth motion for default judgment on Claims 2 and 3. 6 A. 7 Default may be entered against a party who fails to plead or otherwise defend an action, Legal Standard on Default Judgment 8 who is neither a minor nor an incompetent person, and against whom a judgment for affirmative 9 relief is sought. Fed. R. Civ. P. 55(a). After an entry of default, a court may, in its discretion, 10 enter default judgment. Fed. R. Civ. P. 55(b)(2); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 11 1980). 12 In deciding whether to enter default judgment, a court may consider the following factors: 13 (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff’s substantive claims; 14 (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility 15 of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and 16 (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the 17 merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 18 In considering these factors, all factual allegations in the plaintiff’s complaint are taken as 19 true, except those related to damages. See TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917- 20 18 (9th Cir. 1987). When the damages claimed are not readily ascertainable from the pleadings 21 and the record, the court may either conduct an evidentiary hearing or proceed on documentary 22 evidence submitted by the plaintiff. See Johnson v. Garlic Farm Truck Ctr. LLC, 2021 WL 23 2457154, at *2 (N.D. Cal. Jun. 16, 2021). 24 B. 25 “When entry of judgment is sought against a party who has failed to plead or otherwise 26 defend, a district court has an affirmative duty to look into its jurisdiction over both the subject 27 matter and parties.” In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). The Court discusses in turn 28 jurisdiction, service of process, and the Eitel factors. Discussion 3 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 4 of 13 1 Jurisdiction 2 Judge Koh previously determined that federal question jurisdiction exists with respect to 3 Claims 2 and 3 because they are brought under a federal statute, the FLSA. See Prior Order Re 4 Claims 2 and 3 at 7-8. This Court agrees that federal question jurisdiction exists on that basis. 5 United States District Court Northern District of California 1. Judge Koh previously determined that personal jurisdiction exists with respect to five of 6 the six Vuzem Defendants. See Prior Order Re Claims 2 and 3 at 8-12. Judge Koh found that 7 Vuzem USA is subject to general personal jurisdiction based on factual allegations that it was a 8 California corporation prior to its dissolution. See id. This Court agrees. See Ranza v. Nike, Inc., 9 793 F.3d 1059, 1069 (9th Cir. 2015) (“The paradigmatic locations where general jurisdiction is 10 appropriate over a corporation are its place of incorporation and its principal place of business.”); 11 Cal. Corp. Code § 2010(a) (“A corporation which is dissolved nevertheless continues to exist for 12 the purpose of . . . defending actions . . . against it[.]”). 13 Judge Koh found that ISM Vuzem d.o.o., ISM Vuzem USA, Robert Vuzem, and Ivan 14 Vuzem are subject to specific personal jurisdiction based on factual allegations establishing that 15 those defendants purposefully directed their activities to California and availed themselves of the 16 privilege of conducting business in California; that Claims 2 and 3 arise out of those forum-related 17 activities; and that exercise of jurisdiction over ISM Vuzem d.o.o., ISM Vuzem USA, Robert 18 Vuzem, and Ivan Vuzem is reasonable. See Prior Order Re Claims 2 and 3 at 10-12. This Court 19 agrees fully with Judge Koh’s analysis. The TAC alleges among other things that ISM Vuzem 20 d.o.o. and ISM Vuzem USA entered into contracts for construction of facilities at the Tesla 21 manufacturing plant in Fremont, California, and that Robert and Ivan Vuzem own and control the 22 operations of ISM Vuzem d.o.o. and ISM Vuzem USA. See TAC ¶¶ 16, 213. Those and similar 23 factual allegations in the TAC, which are taken as true for purposes of the motion for default 24 judgment, are sufficient to satisfy the requirements for specific personal jurisdiction under the 25 three-part test used in the Ninth Circuit. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 26 797, 802 (9th Cir. 2004). 27 Judge Koh found that the sixth of the Vuzem Defendants, HRID-MONT d.o.o., is not 28 subject to specific personal jurisdiction because the TAC contains no allegations that HRID4 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 5 of 13 1 MONT d.o.o. directed any relevant activities toward California. See Prior Order Re Claims 2 and 2 3 at 11. Papes argues in his current motion that this Court may exercise specific personal 3 jurisdiction over HRID-MONT d.o.o. under an alter ego theory. The alter ego theory of personal 4 jurisdiction was not addressed in Judge Koh’s prior order. See id. Personal jurisdiction over a 5 corporation may be established by showing that the corporation is the alter ego of other entities or 6 individuals as to whom personal jurisdiction exists. See Am. Tel. & Tel. Co. v. Compagnie 7 Bruxelles Lambert, 94 F.3d 586, 591 (9th Cir. 1996) (applying California law). The test is 8 whether (1) there is such unity of interest and ownership that the separate personalities of the 9 corporations no longer exist and (2) failure to disregard the corporations’ separate identities would 10 United States District Court Northern District of California 11 result in fraud or injustice. See id. Here, the TAC alleges that “between Ivan Vuzem and Robert Vuzem and each of ISM 12 Vuzem d.o.o., ISM Vuzem USA, Inc., Vuzem USA, Inc., and HRID-MONT d.o.o. there is such a 13 unity of interest and ownership between the entities and their equitable owners that the separate 14 personalities of the entities and the owners do not in reality exist.” TAC ¶ 17. Papes also asserts 15 that Robert and Ivan Vuzem transferred assets between ISM Vuzem, d.o.o. and HRID-Mont 16 d.o.o., and that individuals were treated as employees of ISM Vuzem, d.o.o. and HRID-Mont 17 d.o.o. at different times. See Mot. for Def. Jud. at 9-10. The Court finds that it may exercise 18 personal jurisdiction over HRID-Mont d.o.o. based on allegations and evidence establishing that it 19 is an alter ego of the other Vuzem Defendants. 20 2. Service of Process 21 When a plaintiff requests default judgment, the court must assess whether the defendant 22 was properly served with notice of the action. See Jackson v. Hayakawa, 682 F.2d 1344, 1347 23 (9th Cir. 1982); Solis v. Cardiografix, No. 12-cv-01485, 2012 WL 3638548, at *2 (N.D. Cal. Aug. 24 22, 2012). Judge Koh previously reviewed the proofs of service filed in this case and found 25 deficiencies only with respect to service on Defendants Magna d.o.o. and We-Kr d.o.o. See Prior 26 Order Re Claims 2 and 3 at 12-14. Judge Koh expressly found that service on ISM Vuzem d.o.o., 27 ISM Vuzem USA, Vuzem USA, Robert Vuzem, and Ivan Vuzem was compliant with Federal 28 Rule of Civil Procedure 4 and the Convention on the Service Abroad of Judicial and Extrajudicial 5 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 6 of 13 1 Documents in Civil and Commercial Matters (“Hague Service Convention”), 20 U.S.T. 361, 2 T.I.A.S. No. 6638. See id. The proof of service filed for HRID-Mont d.o.o. is substantially 3 identical to the proof of service filed for ISM Vuzem d.o.o. Compare POS re HRID-Mont d.o.o., 4 ECF 364, with POS re ISM Vuzem d.o.o., ECF 363. This Court agrees with Judge Koh’s analysis 5 and finds no basis to revisit it. Accordingly, this Court finds that the service requirement is 6 satisfied with respect to all Vuzem Defendants. 7 8 9 10 United States District Court Northern District of California 11 3. Eitel Factors Next, the Court considers whether default judgment against the Vuzem Defendants is warranted under the Eitel factors. a. Factor 1 – Possibility of Prejudice Under the first Eitel factor, the Court finds that Papes would be prejudiced without a 12 default judgment against the Vuzem Defendants on Claims 2 and 3. Unless default judgment is 13 entered, Papes will have no other means of recourse on those claims. See Ridola v. Chao, 2018 14 WL 2287668, at *5 (N.D. Cal. May 18, 2018) (plaintiff prejudiced without default judgment 15 because she “would have no other means of recourse against Defendants for the damages caused 16 by their conduct”). The first factor therefore weighs in favor of granting default judgment. 17 18 b. Factors 2 and 3 – Merits and Sufficiency of Claims The second and third Eitel factors address the merits and sufficiency of Papes’ claims as 19 pleaded in the TAC. Courts often analyze these two factors together. See Dr. JKL Ltd. v. HPC IT 20 Educ. Ctr., 749 F. Supp. 2d 1038, 1048 (N.D. Cal. 2010) (“Under an Eitel analysis, the merits of 21 plaintiff’s substantive claims and the sufficiency of the complaint are often analyzed together.”). 22 “[T]he general rule is that well-pled allegations in the complaint regarding liability are deemed 23 true.” Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). 24 Claim 2 alleges failure to pay minimum wages under the FLSA, 29 U.S.C. § 206(a). 25 Claim 3 alleges failure to pay overtime wages under the FLSA, 29 U.S.C. § 207(a). “To establish 26 a minimum-wage or overtime violation of the FLSA, Plaintiff must establish three elements: 27 (1) she was an employee of Defendants, (2) she was covered under the FLSA, and (3) Defendants 28 failed to pay her minimum wage or overtime wages.” Smith v. Nov. Bar N Grill LLC, 441 F. 6 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 7 of 13 1 United States District Court Northern District of California 2 Supp. 3d 830, 834 (D. Ariz. 2020). i. Employee of Defendants 3 With respect to the first element, the Ninth Circuit has held that “the definition of 4 ‘employer’ under the FLSA is not limited by the common law concept of ‘employer,’ but is to be 5 given an expansive interpretation in order to effectuate the FLSA’s broad remedial purposes.” 6 Lambert v. Ackerley, 180 F.3d 997, 1011-12 (9th Cir. 1999) (internal quotation marks and citation 7 omitted). For example, “[w]here an individual exercises control over the nature and structure of 8 the employment relationship, or economic control over the relationship, that individual is an 9 employer within the meaning of the Act, and is subject to liability.” Id. at 1012 (internal quotation 10 marks and citation omitted). Thus, in Lambert, the Ninth Circuit held that the chief executive 11 officer and the chief operating officer of the defendant corporations’ corporate parent were 12 “employers” who could be held liable under FLSA. See id. 13 The TAC alleges that each of the Vuzem Defendants was Papes’ employer within the 14 meaning of the FLSA. See TAC ¶ 241. The TAC alleges that Papes was employed by ISM 15 Vuzem, d.o.o., see TAC ¶ 60; each of the corporate Vuzem Defendants was the alter ego of the 16 others, see TAC ¶ 17; the corporate Vuzem Defendants shared laborers, see TAC ¶ 15; and Robert 17 and Ivan Vuzem controlled all aspects of the Corporate Vuzem Defendants, see TAC ¶¶ 10-11, 18 16-17. Those allegations, taken as true, establish that Papes was an employee of each of the 19 Vuzem Defendants for purposes of the FLSA. 20 21 ii. Covered under the FLSA With respect to the second element, an individual is covered under the FLSA if the 22 individual “works for an enterprise engaged in commerce.” Smith, 441 F. Supp. 3d at 841. The 23 TAC alleges that the Vuzem Defendants are engaged in interstate commerce and/or the production 24 of goods for commerce, within the meaning of the FLSA. See TAC ¶ 241. 25 26 iii. Failure to Pay Minimum or Overtime Wages With respect to the third element, the TAC alleges that the Vuzem Defendants “suffered 27 and permitted” Papes and others “to routinely work more than forty (40) hours a workweek while 28 paying them less than minimum wages and without overtime compensation.” TAC ¶¶ 239, 254. 7 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 8 of 13 1 These general and conclusory allegations are insufficient to establish that Papes was paid less than 2 minimum wages and was not paid earned overtime compensation. In order to establish a failure to 3 pay minimum wages in violation of the FLSA, the employee must show that in a given work 4 week, the total amount paid divided by the hours worked falls below the minimum wage set by the 5 statute. See Durland v. Straub, No. 3:20-CV-00031-IM, 2022 WL 2704169, at *5 (D. Or. July 12, 6 2022). In order to establish a failure to pay overtime wages, the employee must show that in a 7 given work week, the employee worked more than forty hours and was not paid time and a half for 8 all hours in excess of forty. See id. at *6. The TAC does not allege those specifics. United States District Court Northern District of California 9 Judge Koh denied Papes’ prior motion for default judgment on the basis that he failed to 10 provide adequate support for his minimum wages and overtime claims. See Prior Order Re 11 Claims 2 and 3 at 15-19. Judge Koh noted that Papes had attempted to provide the necessary 12 information in his motion, but had misstated the federal minimum wage as $7.50 when in fact it 13 was $7.25, had made inconsistent statements regarding when and how much he was paid, and had 14 improperly included transit time in his work hours. See id. 15 This Court finds that Papes once again has failed to provide adequate support for his 16 minimum wages and overtime claims under the FLSA. Papes submits a Further Supplemental 17 Declaration in support of his motion, to which are appended numerous spreadsheets and exchange 18 rate charts that he presumably believes support his claims. The spreadsheets and charts are not 19 summarized or totaled in the declaration. Other Courts have denied motions for default judgment 20 when confronted with similar unwieldy evidence offered in support of a minimum wage claim 21 under the FLSA. See Durland, 2022 WL 2704169, at *6 (“Further, this Court cannot sift through 22 pages of spreadsheets and pay stubs – some illegible – in an effort to infer whether a minimum 23 wage violation occurred.”). 24 The Court observes that the Further Supplemental Declaration refers the Court to several 25 prior declarations and exhibits filed in this case, citing the ECF numbers for those documents and 26 apparently expecting the Court to track them down and print them for reference in connection with 27 the current motion. The Court’s Standing Order Re Civil Cases expressly provides that “ All 28 factual and legal bases for a party’s position with respect to a motion must be presented in the 8 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 9 of 13 1 briefing on that motion. Arguments presented in earlier-filed briefs or documents may not be 2 incorporated by reference.” Standing Order § IV.D. 3 4 allegations of the TAC or through the Further Supplemental Declaration submitted in support of 5 his motion. The second and third factors therefore weigh against granting default judgment. “Of 6 all the Eitel factors, courts often consider the second and third factors to be the most important.” 7 Vietnam Reform Party v. Viet Tan - Vietnam Reform Party, 416 F. Supp. 3d 948, 962 (N.D. Cal. 8 2019) (internal quotation marks and citation omitted). Thus, Papes’ failure on these factors is fatal 9 to his motion for default judgment. 10 11 United States District Court Northern District of California In short, Papes has failed to establish that his FLSA claims are meritorious through the 12 13 The Court nonetheless briefly addresses the remaining Eitel factors for the sake of completeness. c. Factor 4 – Sum of Money at Stake Under the fourth Eitel factor, the Court must consider the amount of money at stake in 14 relation to the seriousness of the Vuzem Defendants’ conduct. “Default judgment is disfavored 15 where the sum of money at stake is too large or unreasonable in light of defendant’s actions.” 16 Love v. Griffin, No. 18-CV-00976-JSC, 2018 WL 4471073, at *5 (N.D. Cal. Aug. 20, 2018), 17 report and recommendation adopted, No. 18-CV-00976-JD, 2018 WL 4471149 (N.D. Cal. Sept. 18 17, 2018). As noted above, Papes’ declaration and attached spreadsheets and charts do not 19 provide a summary or total of unpaid wages claimed. In his motion, he asserts that he seeks 20 unpaid wages in the amount of $39,693.46, plus liquidated damages in an amount equal to the 21 unpaid wages of $39,693.46, plus pre-judgment interest. Had those damages been substantiated, 22 they would not have been too large or unreasonable in light of the Vuzem Defendants’ alleged 23 blatant violations of the FLSA and trafficking. The fourth Eitel factor favors default judgment. 24 25 d. Factor 5 – Possibility of Dispute Under the fifth Eitel factor, the Court considers whether there is a possibility of a dispute 26 over any material fact. See Love, 2018 WL 4471073, at *5; Ridola, 2018 WL 2287668, at *13. 27 Because Papes has failed to establish an entitlement to unpaid minimum or overtime wages, there 28 is a possibility of dispute on his FLSA claims. This factor weighs against default judgment. 9 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 10 of 13 1 e. Under the sixth Eitel Factor, the Court considers whether the default was due to excusable 2 3 neglect. There is no indication on this record that the Vuzem Defendants’ failure to respond to 4 this action was due to excusable neglect. This factor favors default judgment. 5 f. Factor 7 – Policy Favoring Decision on the Merits The seventh Eitel factor, which is the strong policy favoring decisions on the merits, 6 United States District Court Northern District of California Factor 6 – Reason for Default 7 weighs against default judgment. In cases where the other Eitel factors weigh in favor of default 8 judgment, the seventh factor will not be an impediment to granting default judgment. See Ridola, 9 2018 WL 2287668, at *13 (“Although federal policy favors decision on the merits, Rule 55(b)(2) 10 permits entry of default judgment in situations, such as this, where a defendant refuses to 11 litigate.”). That is not the case here, however, where several of the Eitel factors weigh against 12 default judgment. 13 g. Conclusion Only the first, fourth, and sixth of the Eitel factors weigh in favor of default judgment. 14 15 The second, third, fifth, and seventh factors weigh against default judgment. As noted above, the 16 second and third factors are the most important. Accordingly, Papes’ fourth motion for default 17 judgment on Claims 2 and 3 is DENIED. No further motions for default judgment on Claims 2 18 and 3 will be entertained. 19 20 III. MOTION FOR RECONSIDERATION (ECF 615) Judge Koh entered an order granting in part and denying in part Papes’ motion for default 21 judgment on Claim 9 for trafficking and coerced labor under the TVPRA. See Prior Order Re 22 Claim 9, ECF 586. Specifically, Judge Koh granted the motion as to ISM Vuzem d.o.o., ISM 23 Vuzem USA, Inc., Robert Vuzem, and Ivan Vuzem, and denied the motion as to Vuzem USA, Inc. 24 and HRID-Mont, d.o.o. See id. at 31. Judge Koh awarded Papes $305,500 in compensatory 25 damages and $305,500 in punitive damages, for a total award of $611,000 in damages. See id. 26 However, Judge Koh denied Papes’ request for attorneys’ fees for failure to provide any 27 supporting declarations or evidence that would support an award of attorneys’ fees. See id. 28 Papes has filed an administrative motion for leave to seek reconsideration, and a proposed 10 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 11 of 13 1 motion for reconsideration, of Judge Koh’s ruling to the extent it may be construed as a bar to 2 filing a motion for attorneys’ fees under Federal Rule of Civil Procedure 54. See Admin. Mot., 3 ECF 615. Rule 54(d) provides that a claim for attorneys’ fees must be made by motion; that an United States District Court Northern District of California 4 5 attorneys’ fees motion must be filed within fourteen days after entry of judgment; and that such 6 motion must specify the statute, rule, or other grounds giving rise to an entitlement to attorneys’ 7 fees. See Fed. R. Civ. P. 54(d)(2). Papes asserts that final judgment has not been entered in this 8 case, and thus the fourteen-day period to file a Rule 54 motion for attorneys’ fees has not yet been 9 triggered. Papes also asserts that although his prior motion for default judgment on Claim 9 stated 10 that attorneys’ fees should be awarded, that statement was not intended to be a Rule 54 motion for 11 attorneys’ fees. It appears that Judge Koh construed Papes’ statement that attorneys’ fees should be 12 13 awarded as a Rule 54 motion for attorneys’ fees. In denying that motion, Judge Koh stated that 14 “Papes does not provides declarations or affidavits containing a statement of the services rendered 15 by each person for whom fees are requested and a brief description of their relevant qualifications 16 as is required by Civil Local Rule 54-5(b)(2)-(3).” Prior Order Re Claim 9 at 31. Having reviewed the prior motion for default judgment on Claim 9, and Judge Koh’s 17 18 ruling thereon, the Court finds that there was a misunderstanding as to whether the motion 19 included a Rule 54 motion for attorneys’ fees. Under these circumstances, the Court finds that 20 reconsideration is appropriate under Civil Local Rule 7-9(b), permitting reconsideration based on 21 the court’s manifest failure to consider material facts or legal arguments. See Civ. L.R. 7-9(b)(3). 22 Accordingly, Papes’ administrative motion for leave to seek reconsideration, and motion for 23 reconsideration, are GRANTED. Papes is not precluded from filing a Rule 54(d) motion for 24 attorneys’ fees in connection with Claim 9. 25 IV. MOTION FOR ATTORNEYS’ FEES AND COSTS UNDER RULE 54 (ECF 614) 26 Papes has filed a motion under Rule 54(d), seeking an award of attorneys’ fees and costs in 27 connection with Claims 2, 3, and 9. Papes is not entitled to attorneys’ fees and costs in connection 28 with Claims 2 and 3, as the Court has denied his motion for default judgment on those claims. 11 United States District Court Northern District of California Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 12 of 13 1 The Court therefore considers Papes’ Rule 54(d) motion only in connection with Claim 9 under 2 the TVPRA, on which Judge Koh granted default judgment against ISM Vuzem d.o.o., ISM 3 Vuzem USA, Inc., Robert Vuzem, and Ivan Vuzem in the total amount of $611,000. The Court 4 evaluates Papes’ request for attorneys’ fees in connection with Claim 9 herein. Papes’ Bill of 5 Costs will be addressed by the Clerk pursuant to Civil Local Rule 54-1. 6 A. 7 The TVPRA provides that a victim “may bring a civil action against the perpetrator . . . Legal Standard 8 and may recover damages and reasonable attorneys fees.” 18 U.S.C. § 1595(a). When calculating 9 a reasonable attorneys’ fee under federal law, courts in the Ninth Circuit follow “the ‘lodestar’ 10 method, and the amount of that fee must be determined on the facts of each case.” Camacho v. 11 Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008) (quoting Ferland v. Conrad Credit Corp., 12 244 F.3d 1145, 1149 n.4 (9th Cir. 2001)). Under the lodestar method, the most useful starting 13 point “is the number of hours reasonably expended on the litigation multiplied by a reasonable 14 hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The party seeking an award of fees 15 should submit evidence supporting the hours worked and rates claimed. Id. 16 “In determining a reasonable hourly rate, the district court should be guided by the rate 17 prevailing in the community for similar work performed by attorneys of comparable skill, 18 experience, and reputation.” Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210–11 (9th Cir. 19 1986). “Generally, the relevant community is the forum in which the district court sits.” Barjon v. 20 Dalton, 132 F.3d 496, 500 (9th. Cir. 1997). The fee applicant bears the burden of producing 21 evidence, other than declarations of interested counsel, that the requested rates are in line with 22 those prevailing in the community for similar services by lawyers of reasonably comparable skill, 23 experience, and reputation. See Blum, 465 U.S. at 896 n.11. Further, the district court should 24 exclude hours that were not reasonably expended. See Hensley, 461 U.S. at 434. 25 B. 26 Papes’ counsel, William C. Dresser, has provided a declaration in support of the motion for Discussion 27 attorneys’ fees. See Dresser Decl., ECF 614-2. The declaration includes billing records and 28 summary charts of fees by major tasks. See id. Unfortunately, the Court cannot discern from the 12 Case 5:16-cv-01120-BLF Document 617 Filed 05/30/23 Page 13 of 13 1 declaration and appended charts which hours were expended on Claim 9, as to which fees are 2 recoverable, as opposed to Claims 2 and 3, as to which fees are not recoverable. For that reason, 3 the Court has no option but to deny Papes’ motion for attorneys’ fees without prejudice. Papes 4 may file a renewed motion for attorneys’ fees, limited to those fees incurred in connection with 5 Claim 9, by June 20, 2023. Such renewed motion need not include the underlying billing records 6 previously submitted to the Court, but shall include a declaration of counsel and a summary chart 7 showing the hours expended on Claim 9 by biller and task. Papes need not reserve a hearing date 8 for a renewed fees motions; any renewed motion will be decided on the papers. Papes’ Rule 54 motion for attorneys’ fees is DENIED WITHOUT PREJUDICE. 9 10 United States District Court Northern District of California 11 V. ORDER (1) Papes’ fourth motion for default judgment on Claims 2 and 3 (ECF 613) is 12 DENIED. No further motions for default judgment on Claims 2 and 3 will be 13 entertained. 14 (2) motion for reconsideration (ECF 615), are GRANTED. 15 16 Papes’ administrative motion for leave to file a motion for reconsideration, and his (3) Papes’ Rule 54 motion for attorneys’ fees and costs (ECF 614) is DENIED 17 WITHOUT PREJUDICE. Papes may file a renewed motion for attorneys’ fees, 18 limited to those fees incurred in connection with Claim 9, by June 20, 2023. 19 (4) This order terminates ECF 613, 614, and 615. 20 21 22 23 Dated: May 30, 2023 ______________________________________ BETH LABSON FREEMAN United States District Judge 24 25 26 27 28 13
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