Page 1
Case 3:23-cv-04984-JSC Document 49 Filed 04/24/24 Page 1 of 33 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION _________________ Equal Employment Opportunity ) Commission, ) ) Plaintiff, ) ) vs.
) ) Tesla, Inc., ) ) Defendant.
) _____________________________ ) BEFORE:
No. 3:23-cv-04984-JSC San Francisco, California March 28, 2024 10:36 a.m.
THE HONORABLE JACQUELINE SCOTT CORLEY, JUDGE REPORTER'S TRANSCRIPT OF PROCEEDINGS TESLA, INC.'S MOTION TO STAY ALL PROCEEDINGS/ TESLA, INC.'S MOTION TO DISMISS EEOC'S COMPLAINT Official Court Reporter:
Christine M. Coaly, RMR, CRR Sandra Day O'Connor U.S. Courthouse, Suite 312 401 West Washington Street, Spc 37 Phoenix, Arizona 85003-2151
(602) 322-7248 Proceedings Reported by Stenographic Court Reporter Transcript Prepared by Computer-Aided Transcription UNITED STATES DISTRICT COURT
Page 2
Case 3:23-cv-04984-JSC
Filed 04/24/24
A-P-P-E-A-R-A-N-C-E-S
Document 49
For the Plaintiff:
U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION By: Mr. James Baker, Esq.
Ms. Kena Cador, Esq.
San Francisco District Office 450 Golden Gate Ave., 5th Floor West P.O. Box 36025 San Francisco, CA 94102
For the Defendant:
REED SMITH, LLP
By: Mr. Raymond A. Cardozo, Esq. 101 Second Street, Suite 1800 San Francisco, CA 94105-3659
HOLLAND & KNIGHT, LLP
By: Mr. Thomas E. Hill, Esq.
400 South Hope Street, 8th Floor Los Angeles, CA 90071
HOLLAND & KNIGHT, LLP
By: Mr. Paul W. Matthias-Bennetch, Esq. 601 SW Second Ave., Ste. 1800 Portland, OR 97204
UNITED STATES DISTRICT COURT
Page 2 of 33
Page 3
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 3 of 33
P R O C E E D I N G S
COURTROOM DEPUTY:
Calling civil action C 23-4984,
EEOC versus Tesla.
THE COURT:
Who's ever going to argue can come up.
All right.
Appearances, please.
MR. BAKER:
Yes.
Good morning, Your Honor.
My name
is James Baker on behalf of the Equal Employment Opportunity
Commission.
Seated at the table is my colleague Kena Cador.
And
if it would please the Court, my colleague will address any
questions or arguments concerning the second portion of Tesla's
motion to stay concerning the alleged failure to --
THE COURT:
MR. HILL:
Okay.
All right.
Thank you.
Good morning, Your Honor.
Hill.
defendant Tesla.
to stay was what you want -- Your Honor might want to hear
first.
I'm with Holland & Knight.
My name is Tom
I'm here on behalf of
I'm up here because I assumed that the motion
THE COURT:
You are exactly right, because that's what
we have to do first.
MR. HILL:
THE COURT:
And who do you have with you at counsel
MR. HILL:
My colleague here is Ray Cardozo with Reed
Okay.
table?
Smith, also here on behalf of defendant Tesla and prepared to UNITED STATES DISTRICT COURT
Page 4
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 4 of 33
argue the motion to dismiss.
THE COURT:
Okay.
All right.
So let's start with the
stay, and there is sort of two arguments, and the first is
Colorado River.
Bock, right, and the Ninth Circuit saying just last year that
whether -- that Colorado River's abstention, which, by the way,
is rare, extraordinary, presumption against, all doubts
resolved in favor of no stay, but it has to be that there is --
the state action and the federal action are sufficiently
And I think what we run smack into is Ernest
parallel, such that the state action -- state proceedings will
fully resolve the federal case.
that would be the case.
MR. HILL:
And I don't see that here, how
Well, Your Honor, first of all, you're
right that the case law indicates that the Colorado River stay
doctrine is applied sparingly, but it is -- I mean, there are
numerous cases, and we've cited them, including two decisions
that Your Honor authored, the Goodin versus Vendley case, and
the Scottsdale Insurance Company versus Parmerlee case, in
which Colorado stays were granted, and, particularly, the
Goodin case, which we think is analytically very much on all
fours with this case.
But to address your specific question with regard to
Bock, frankly, Your Honor, we think that the EEOC has asked
more of the Bock case than it can possibly deliver.
not dispositive of this case.
Bock is
Bock makes expressly clear that
UNITED STATES DISTRICT COURT
Page 5
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 5 of 33
its holding turns on the particular facts of that case, and
that each Colorado River case must be evaluated pragmatically
based on its own particular facts.
Bock, for example, does not hold that the plaintiffs in the parallel cases must be the same.
THE COURT:
MR. HILL:
THE COURT:
MR. HILL:
THE COURT:
No, but there must -- but tell me how -Okay.
This is my question.
Yes.
Sure.
Just get to the nub of it.
Tell me how
the state case, a resolution of the state case in any way, any
resolution, will resolve this federal case with this federal
plaintiff.
MR. HILL:
Okay.
CRD in the state case, which is now
set for trial in less than seven months, has proposed a two-
phase trial plan based on the Supreme Court's, the U.S. Supreme
Court's, model for litigating pattern and practice claims under
Title VII, under International Brotherhood of Teamsters versus
United States.
In phase one, CRD would pursue injunctive relief on
behalf of public interest by proving a pattern and practice of
race discrimination and harassment by Tesla.
In phase two, and assuming it prevails in phase one,
CRD would pursue individual relief, reinstatement, backpay,
compensatory and punitive damages, on behalf of victims of UNITED STATES DISTRICT COURT
Page 6
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 6 of 33
Tesla's misconduct.
Assuming the process plays out the way CRD, and,
presumably, EEOC hopes, and the public and private interest CRD
represents, which are precisely the same public and private
interests that EEOC represents and seeks to vindicate in this
case, but assuming that those are vindicated in the CRD case,
what would be left for this Court to resolve in this case?
adjudication of any individual's right to damages in the CRD
case would have a preclusive effect on EEOC's right to seek
The
damages on that individual's behalf.
THE COURT:
MR. HILL:
THE COURT:
Let's say CRD loses.
Well -Let's say CRD loses.
What does Ernest
Bock tell us about that situation?
will fully resolve -- and I'm not sure I agree with you anyway
about that even if they win -- but will fully resolve the
federal case only if the state rules in one of two ways,
Colorado River abstention is not appropriate.
that.
MR. HILL:
Okay.
If the state proceedings
I would like -- I'm happy to do
that, Your Honor.
to the resolution of anything in this court --
So deal with
I want to make sure that you're satisfied as
THE COURT:
I'm not.
They're not bound.
EEOC is not bound by res
judicata.
Maybe if an individual recovers
some damages, they can't double recover those damages, but UNITED STATES DISTRICT COURT
Page 7
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 7 of 33
certainly in terms of injunctive relief or any individuals who
aren't -- don't recover, they could in this action, right?
MR. HILL:
No, Your Honor, I don't believe that's
true.
damages or not in the state court proceeding in phase two would
be preclusive with regard to EEOC's right to pursue damages on
behalf of those same individuals in this case.
versus --
I think that the resolution of individual rights to
THE COURT:
Okay.
different individuals.
right?
MR. HILL:
Right.
That's the EEOC
I was saying if there are
There may be additional individuals,
Correct, Your Honor, but the CRD case is
certainly as comprehensive -- it's actually more comprehensive
in scope and in terms of the individuals on whose behalf
individual relief would be pursued, as is this case is
currently --
THE COURT:
MR. HILL:
What about injunctive relief?
Okay.
So with regard to injunctive
relief -- and I want to get to the flip side of this, what
happens if Tesla prevails -- but if EEOC prevails in terms --
I'm sorry, if CRD prevails in its claim for injunctive relief,
which CRD is pursuing based on the same prosecutorial powers
that EEOC has --
THE COURT:
MR. HILL:
Different.
-- and pursuing the same --
UNITED STATES DISTRICT COURT
Page 8
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 8 of 33
THE COURT:
No, it's not the same.
It's from the
state of California as opposed to the federal government.
MR. HILL:
Certainly those powers are -- you know, the
source of the powers may be different, but the practical use of
the powers is the same.
CRD seeks is the same injunctive relief that EEOC has requested
in connection with this case, if injunctive relief is granted
to CRD, and, again, in a case that is set to be tried in less
than seven months, where the state court judge has made clear
And if, in the injunctive relief that
that's a real date and to be respected by the parties, if an
injunction is entered, that may not have res judicata impact on
this court, but it certainly would likely negate the need and
thus the equitable justification for an injunction being issued
by this court.
an injunction with regard to practices and the like at Tesla's
Fremont plant when the state of California has already obtained
such an injunction.
Why in the world would this court need to issue
Certainly the scope of the injunction entered by -- by
the state court in the CRD matter would influence, I would
anticipate, what this court believes is equitably justified --
THE COURT:
MR. HILL:
THE COURT:
I don't know.
-- in terms of injunctive relief.
I don't know.
I don't know.
I have an
independent obligation.
MR. HILL:
Again, Your Honor, I think it's highly
UNITED STATES DISTRICT COURT
Page 9
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 9 of 33
likely that you would consider the scope and bases for that
injunctive relief and why EEOC might need anything else.
I want to turn now to the question you asked about
what if Tesla prevails.
I think preclusion is likely if Tesla
prevails in the CRD case, given the alignment of CRD's and
EEOC's --
THE COURT:
a pretty dramatic statement.
MR. HILL:
Give me a case.
Okay.
THE COURT:
That's a pretty -- that's
Give me a case.
Well, I --
I -- I -- give me a case that says the
federal government, a separate sovereign, is precluded by what
the state -- by the state of California's loss in state court.
Just give me a case.
MR. HILL:
Well, I'll cite you to EEOC versus Frank's
Nursery & Crafts, Inc., that's at 177 F.3d 448, the jump cite
is 463.
case the court states, quote, prior proceedings may bind a
nonparty as a privity where the nonparty's interests were
adequately represented by a party with the same interests in
the state court proceeding.
That's a Sixth Circuit case decided in 1999.
In that
In fact, in the Sonoma Springs case, to cite you another case, this case is cited in the parties' briefs -THE COURT:
Is the one that you just mentioned not
cited in your briefs, the Sixth Circuit case, because I don't
see it in your reply.
UNITED STATES DISTRICT COURT
Page 10
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 10 of 33
MR. HILL:
Your Honor.
That may be a case not cited in the briefs.
THE COURT:
MR. HILL:
THE COURT:
MR. HILL:
THE COURT:
That may not be -- that may be a new case,
So not supposed to -You asked for one and I -Well --- I tried to --- you know what the local rules of this
court say is that they're all supposed to be in your briefs.
But are you telling me, are you telling me that in the
Sixth Circuit the Sixth Circuit held that the EEOC was in
privity with the state agency and therefore bound by --
MR. HILL:
Your Honor, this has never happened before.
This is unprecedented.
THE COURT:
When has --
Well, I'll tell you, Rodney King.
King.
those officers and they lost.
came in and did that, right?
jeopardy.
serious, so not exactly unprecedented.
The state brought charges, criminal charges against And then the federal government There is no privity, no double
This is not criminal, I understand, civil, even less
MR. HILL:
Your Honor, I'll confess, I'm not a legal
expert on the Rodney King case.
television.
Rodney
THE COURT:
I just saw what I saw on
No, no, but you know -- maybe you don't
know -- that there was a state prosecution that was
unsuccessful, and that then the -- and then the United States UNITED STATES DISTRICT COURT
Page 11
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 11 of 33
government came in and prosecuted the officers, the same
conduct, different statute.
MR. HILL:
Your Honor, I would, you know, suggest
that, more to the point, is the question when has EEOC ever
before filed a lawsuit that is entirely duplicative of a
concurrent and well advanced state court matter brought by a
state agency with prosecutorial powers in a public mission that
mirrors those of EEOC, and, again, the answer appears to be
never.
THE COURT:
I understand that your -- that Tesla
doesn't like that, but I'm a federal court and I have an
obligation to exercise my jurisdiction.
Colorado River abstention, which you agree the Ninth Circuit
has made clear, any doubts are resolved in favor of going
forward.
You're saying, well, there is no precedent, hasn't happened, so
maybe there is a doubt, but that would -- that doesn't help me
in the sense -- in terms of giving me any authority to do so
here.
You've asked for
So you're sort of arguing the opposite, right.
MR. HILL:
I don't see -- you know, in Your Honor's
decision in Goodin versus Vendley, Your Honor -- Your Honor
notes that stays are routinely granted -- routinely is Your
Honor's word -- in FLSA cases pending the outcome of state
cases based on the same alleged facts brought under state law.
Your Honor also -UNITED STATES DISTRICT COURT
Page 12
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 12 of 33
THE COURT:
It was same -- same parties.
All the
cases you cite in your reply, all of them, are where res
judicata would apply.
cases the plaintiffs are actually like splitting their claims
between federal court and state court for some strategic
reason, but should they prevail or even lose, there would be
res judicata.
And so that's not this case.
MR. HILL:
All of them.
Of course, right, in those
The federal action, as Bock said, would go away.
Bock isn't this case.
Bock involved a
situation where the federal claims were -- where a binary
decision with regard to the enforceability of a guarantee
agreement had to be decided by the state court.
court decided it one way, it would moot the federal claims, but
if it decided it another way, the federal claims would
necessarily have to go forward because they hadn't been pled in
the state court action.
This case is different.
If the state
This case is, in fact, like
Goodin, where there is complete overlap between the federal
claims and the state claims and the factual allegations made in
support thereof, and where there is complete alignment between
the interest of the plaintiffs in the federal court -- of the
plaintiff in the federal court case and the plaintiff in the --
in the state court case.
They represent and seek to vindicate the same public interests
and the same private interests.
They have the same public interests.
UNITED STATES DISTRICT COURT
Page 13
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 13 of 33
Those private interests, however resolved in the state
court matter, will have preclusive effect as to the individuals
involved in connection with this -- with the federal court
proceeding, and a resolution of the -- of the request for
injunctive relief of the public interest pursued in the CRD
case will very much impact this Court's consideration of
whether an injunctive is appropriate in this case.
THE COURT:
Okay.
Let me -- let me now hear from
Mr. Baker.
MR. BAKER:
I think Bock is pretty straightforward
that you have to be done here, should the Court issue a stay,
and not need to return.
scenarios where that would be the case.
uncertainty in the state cases, most importantly, the fact that
the EEOC is not a party to either, that there is no resolution
in the CRD or Bock case that would necessarily resolve the
EEOC's case, at least none that is apparent at this stage in
the lawsuit.
In Bock there were only one or two There is so much
And there are a lot more ways that those two state
cases could resolve themselves than was present in Bock.
mean, ruling for one entity not the other; a ruling on the
class action; a motion to certify the class; individual
adjudication of claims and separate phase, et cetera, et
cetera, none of which necessarily resolves the EEOC's case.
I
Now, to be clear, there could be some impact in terms UNITED STATES DISTRICT COURT
Page 14
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 14 of 33
of damages of an individual level after the EEOC has
established liability, but there is no res judicata.
would not be named in any judgment, and that alone is not
enough to eventually abstain from hearing the federal
government's case in the only forum that the federal government
has sought to enforce its rights against Tesla in.
THE COURT:
MR. HILL:
The EEOC
Okay.
Your Honor, I just want to, you know,
again, and as Your Honor states yourself in the Goodin
decision, you know, Colorado River cases are to be decided in a
pragmatic and flexible way.
is no black and white issue that resolves a Colorado River stay
motion.
There is no off/on switch.
There
There are no Ninth Circuit cases, or cases within the
Ninth Circuit that say a state court -- the resolution of the
state court matter must result in res judicata preclusion in
the federal case --
THE COURT:
What Bock says is parallelism is necessary
but not sufficient to counsel in favor of abstention.
Parallelism doesn't exist here and parallelism in Bock is
necessary.
MR. HILL:
I think that what Bock says expressly is
that exact parallelism is not required, that the parties and
that the claims need not be exactly the same.
clearly does not say is that the resolution of the state court UNITED STATES DISTRICT COURT
And what Bock
Page 15
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 15 of 33
proceeding must have res judicata impact on the federal court
proceeding or a Colorado River stay is inappropriate.
does not say anything --
THE COURT:
Bock
Doesn't say res judicata but it says it
must fully resolve it.
And you conceded if Tesla wins --
even -- even if I accept your arguments about if CRD wins, all
of them, even if I accept all of that, if Tesla wins, it
doesn't resolve this case at all, and the EEOC can proceed on
behalf of the same individuals on everything.
And that's
exactly where Bock was, where there was one outcome that would
fully resolve it, and one outcome that would not.
Ninth Circuit said, therefore, Colorado River abstention was
not appropriate.
MR. HILL:
And the
I think that, Your Honor, I have not said
that the EEOC case can proceed if Tesla is -- is successful in
the state court matter.
resolution of the state court matter.
THE COURT:
stop.
the argument.
square into Bock.
That's something that depends on the
Okay.
Okay.
I think I have heard enough.
Certainly there --
Stop.
Stop.
We'll just
I think -- I understand
I think it runs square into -- square into Bock,
So let's move to the second argument, and I don't know
if you're going to do that one as well or one of your
colleagues.
MR. HILL:
Mr. Cardozo is --
UNITED STATES DISTRICT COURT
Page 16
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 16 of 33
THE COURT:
Not the dismiss, the second argument you
had for the stay.
MR. HILL:
Oh, that's right, Your Honor.
THE COURT:
Good morning.
Thank you.
There I think you're
running into another case, which is that the Supreme Court in
Mach -- is it Mach Mining -- Mach Mining, said there is no good
faith requirement with respect -- now I'm not saying that EEOC
is met in bad faith, but that is almost essentially what you're
arguing -- that there is no good faith requirement for that
pre-litigation process, right?
MR. HILL:
I don't think that we've argued that there
needs to be -- I don't think we've made a good faith argument.
I think what Mach Mining makes clear is that the EEOC's
pre-conciliation obligation is more than a perfunctory, go
through the motions, check the box administrative piffle.
minimum, EEOC must provide an employer it accuses of
discrimination information sufficient to give the employer an
opportunity to remedy the discriminatory practice.
right from Mach Mining.
That's
This means that EEOC must tell the employer what's --
what it has done wrong and who it has harmed.
Tesla this information.
repeated request.
conclusory and fact-free findings of --
At
EEOC never gave
It refused to do so despite Tesla's
Instead EEOC simply provided Tesla
THE COURT:
Let me stop you for one second.
UNITED STATES DISTRICT COURT
You just
Page 17
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 17 of 33
argued to me that there is nearly complete overlap between the
state and federal cases and the state case is going to trial in
seven months.
case, because you told me there is nearly complete overlap, so
much so that resolving that state case will resolve this case,
so Tesla actually knows.
So as Tesla sits here today, it knows the EEOC's
MR. HILL:
The Mach Mining decision and the
conciliation obligation is a pre-suit obligation.
THE COURT:
Okay.
That's fine.
I just want to make
it clear then.
This is not Tesla actually claiming we actually
don't know.
what, dismiss and then have them re-file?
talking about practical -- I want to figure out exactly what
Tesla is asking me to do, have them dismiss, have them meet and
something that -- no resolution will come, because you -- Tesla
actually knows what they're claiming now, and it's the same as
the state case, and there has been no resolution -- just so
they could file again and will be here again in three months?
Is that it?
We do know.
MR. HILL:
THE COURT:
MR. HILL:
We do know.
We just want you to, I mean, if we're
No, Your Honor.
Okay.
I think Tesla wants exactly what the
Supreme Court granted the employer in Mach Mining, which is a
stay of the proceedings to allow the EEOC to comply with the
legal obligation that it had before filing this lawsuit, which UNITED STATES DISTRICT COURT
Page 18
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 18 of 33
was to conciliate with Tesla and give Tesla the opportunity to
remediate the issues that EEOC believes to exist once EEOC has
identified those issues, the wrongdoing, and the victims.
THE COURT:
Let me hear from the EEOC then.
MS. CADOR:
Sure.
So Mach Mining does direct that the
EEOC need to inform the employer of the allegation, identify
which employees or class of employees have been harmed, and
engage in discussion with the employer.
case most certainly did all of those things.
And the EEOC in this
Regarding the information of the allegation, EEOC
complied by expressly notifying Tesla through its
predetermination interview and letter of determination that the
EEOC had uncovered evidence of Tesla's violation of Title VII,
specifically, that Tesla subjected a class of black employees
to a hostile work environment, and retaliated against a class
of black employees who engaged in protected activity at the
Fremont facility.
Regarding the class of employees who suffered, EEOC
complied with this factor when it explicitly identified black
employees who were employed at Tesla's Fremont facilities at
anytime from May 29th, 2015.
discussion with Tesla, EEOC complied with this factor first
when it unambiguously invited Tesla to participate in the
informal conciliation with the EEOC; and, second, when it did,
in fact, participate in those conciliation efforts, which
And regarding the engagement and
UNITED STATES DISTRICT COURT
Page 19
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 19 of 33
included a seven-hour in-person conciliation and a proposal for
resolution of the matter.
THE COURT:
The EEOC made a proposal for resolution?
MS. CADOR:
We did.
MR. HILL:
Your Honor, this is what the EEOC told
Tesla:
You've discriminated and harassed black employees at
your Fremont plant since at least 2015.
discrimination and harassment are the employees who have
experienced discrimination and harassment.
The victims of your
Fix the
unidentified problem and make the unidentified victims whole.
Go.
THE COURT:
Am I supposed to have a trial, right, as
to like -- what is the standard here on this -- this
requirement, right?
weeds.
requirement.
good faith.
I mean, we're sort of getting into the
Am I supposed to -- and there is no good faith You're arguing that they -- that it wasn't in I mean --
MR. HILL:
THE COURT:
MR. HILL:
Your Honor.
-- there is no good faith requirement.
The requirement is -- is, I think, clearly
articulated in Mach Mining, and that is that information
sufficient to give the employer an opportunity to remedy the
discriminatory practices must be provided pre-suit.
EEOC failed to identify any specific victims or perpetrators of discrimination or harassment, or specific dates UNITED STATES DISTRICT COURT
Page 20
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 20 of 33
of such misconduct within an eight-year period, or the specific
departments or other work locations where the misconduct
allegedly occurred.
possibly have had the pre-suit opportunity to remedy its
alleged discriminatory practice.
THE COURT:
Without that information, how could Tesla
And the case you're relying on is Mach
Mining?
MR. HILL:
Correct.
THE COURT:
Okay.
All right.
That's fine.
Did you want to say anything further?
MS. CADOR:
Just to add that it appears that Tesla
might be conflating the mandate to provide employers with
specific allegations with the proviso of specific details
underlying the allegation.
specific allegations, the violation of Title VII, by
maintaining a workplace that was -- created a hostile work
environment for black employees at the Fremont facility.
The EEOC did, in fact, lay out the
THE COURT:
MR. HILL:
playing games with anything.
Honor comes right out of the Mach Mining decision.
THE COURT:
Okay.
All right.
Thank you.
Your Honor, I'll just say that I'm not The language I quoted to Your
No, no, no, I understand, but because as I
was looking again at your reply, there are no cases, pretty
much just Mach Mining, so you're relying on Mach Mining?
MR. HILL:
We are relying on Mach Mining, which we
UNITED STATES DISTRICT COURT
Page 21
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 21 of 33
think is, in fact, as dispositive on this issue as Your Honor,
apparently, feels Bock is on the first issue.
THE COURT:
I'll go back and look again.
Thank you.
MS. CADOR:
Thank you, Your Honor.
THE COURT:
Okay.
MR. CARDOZO:
All right.
Motion to dismiss.
Thank you, Your Honor.
Ray Cardozo from
Reed Smith.
The fundamental problem with the lack of specificity
in this complaint is very similar and related to the problem
you were just hearing argument about.
what a fundamental perversion it is of what the statute seeks
to accomplish.
And I want to start with
If the goal is to solve the problem without litigation
first in the administrative process by giving Tesla particulars
so it can figure out is there someone -- because Tesla's
terminating people for misconduct throughout all of this.
we still have a problem?
factories?
heard our argument about why that didn't happen, didn't even
come close to happening.
Do
Are there particular hotspots at the
What is the nature of the problem here?
You've
But now we get a pleading and we still don't get it.
This pleading literally says it's everywhere in the factory
going back to 2015 and it involves everyone.
Now, as Your Honor pointed out, we have a case going UNITED STATES DISTRICT COURT
Page 22
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 22 of 33
in state court to trial in seven months.
We know unequivocally
that that's not true because we have hundreds of declarations
in that case from people who have said they have experienced
nothing of the sort and they're thriving at Tesla.
the world can Tesla take this complaint and understand what
it's being charged with, whether there are particular problems
that need rectifying or so on?
on the pleading standard for an EEOC pattern and practice case,
obviously, a lot.
So how in
There is a lot of flexibility
And the cases we cite sort out the
difference of what makes the grade and what doesn't.
does, it goes beyond anything that's ever passed muster, and
clearly flunks the test of those that have dismissed pattern
and practice cases.
THE COURT:
What this
Do you have an appellate case to support
your argument?
MR. CARDOZO:
We don't.
And this case is one of a
kind.
I have never seen a complaint like this that says
everything, everywhere, all at once, the whole thing.
no case that's analyzed --
THE COURT:
MR. CARDOZO:
THE COURT:
There is
So why is that implausible?
Why is that implausible?
Why is that implausible?
Well --
I mean, it says
it's essentially pervasive.
You're not going to argue it's not
severe.
it's not severe, and it says it's pervasive throughout the
You're not going to argue based on these allegations
UNITED STATES DISTRICT COURT
Page 23
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 23 of 33
facility and has been since 2015.
That's the allegation that I
accept as true.
standard I'm applying, 12(b)(6), Iqbal/Twombly.
Why is that not plausible, because that's the
MR. CARDOZO:
THE COURT:
MR. CARDOZO:
And notice and sufficiency.
Why is that not plausible?
Well, I think it is plausible that every
single person the whole time everywhere that it happened, how
would the company survive since 2015 if that were true?
THE COURT:
You want me to draw inferences in Tesla's
favor then?
MR. CARDOZO:
No.
Iqbal and Croft, they both say
plausibility does have its part of it in assessment of the
plausibility of what's being alleged.
an allegation that's just as over the top as that, that's where
Iqbal and Twombly changed the prior law and said, yeah, you can
apply a plausibility lens.
And you -- when you have
THE COURT:
extreme hostile environment.
matter of law, why can't I accept those allegations as true?
It is over the top.
MR. CARDOZO:
It does allege pretty
Why is that implausible?
As a
I think because you just apply the plain
definition of plausibility.
every single person, none of the race, in 20 -- from 2015 to
2024, discriminated against every single person --
THE COURT:
MR. CARDOZO:
And when someone is saying that
That's not what it's saying.
It comes pretty close to saying that.
UNITED STATES DISTRICT COURT
Page 24
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 24 of 33
THE COURT:
That's not what it's saying.
It's saying
that this racism, the use of the N word, was ubiquitous
throughout the facility, not every minute, every time, but it
was ubiquitous, such that it created a hostile environment for
the black workers in the facility.
allegations of the complaint.
be untrue, this is just the allegations, but what I don't know
is why that doesn't state a claim.
MR. CARDOZO:
That's how I interpret the
Now, may be untrue, right, may
Because the plausibility element has to
also meet the sufficiency and the -- some factual particulars.
Because how can we even say if that's plausible or not if we
don't have a single -- there is not a single person, place, or
time identified.
There is not a single individual --
THE COURT:
There is time.
MR. CARDOZO:
THE COURT:
There is a time, it's 2015 --
There are lots of cases that say the EEOC,
when they're bringing in the complaint in their own name and
not on behalf of an individual, do not have to name an
individual, right.
There are lots of cases that do that.
A lot of the cases that you cite involve issues like,
hey, they're not -- they're being brought on behalf of an
individual, or they involve issues like statute of limitations
problems or other things like that that there were specific
ones.
What's your best case?
Tell me the case you want
UNITED STATES DISTRICT COURT
Page 25
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 25 of 33
me -- we're only talking about district court cases, so best,
it's persuasive.
MR. CARDOZO:
The best case, pattern and practice
case, is a case called Cazorla versus Koch Foods.
actually recommend the EEOC versus JBS USA case, which we cited
in our papers, because it does an analysis and it explains the
difference between Cazorla, which says it's not sufficient, and
an EEOC versus UPS case which is sufficient in a pattern and
practice not sufficiently particularized.
And I would
It contrasts the
two.
And if you look at what they say is the difference,
what -- why one was sufficient and one wasn't, Cazorla is
talking about this case, absent any particularized facts, the
complaint failed to state a claim for a hostile work
environment or retaliation, as the 111 newly added class
members was too generic -- a case that passed muster -- the
EEOC's complaint alleged specific facts with respect to two
identified charging parties, and then it said it's similar for
the rest of the class.
two individuals in there.
So you had a model, a template about
The case goes on to talk about things that make it
qualify that are missing from Cazorla:
The names of the
aggrieved parties.
which the aggrieved parties were alleged to have discriminate,
the types of conduct; the identity of the alleged perpetrators.
There are no names in this; the basis upon
UNITED STATES DISTRICT COURT
Page 26
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 26 of 33
The things that the case law talks about, what makes it
sufficient from not sufficient, pattern and practice EEOC
claim, we don't have here.
THE COURT:
Okay.
So tell me, Mr. Baker, about this
case from Mississippi, Cazorla, and the case from Colorado,
JBS, those are the two you're referring to, is that right,
those are the two best cases you said I should follow?
MR. CARDOZO:
Yeah.
I'll throw in the Hannah case
from the District of Hawaii, 2021 -- 2012, I'm sorry.
THE COURT:
Well, the Hawaii one was the one where
they needed allegations because there was a different
defendant, and the timing was important as to whether there was
a plausible claim against that defendant, right?
MR. CARDOZO:
Yeah.
I'm referring to the part of the
decision that says the complaint offers little information
regarding the identity of the alleged hassles.
refers collectively to defendant employers.
THE COURT:
MR. CARDOZO:
Okay.
I can read it.
The complaint
I can read it.
So it's the collective references and
the lack of names.
THE COURT:
Mr. Baker.
MR. BAKER:
All right.
It is the one I thought.
Interesting about Cazorla is that the
Court decided the motion to dismiss several years into the case
after the parties had engaged in discovery.
In fact, in one of
UNITED STATES DISTRICT COURT
Page 27
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 27 of 33
the scheduling orders the Court had ordered the EEOC to
identify victims, which the EEOC did and amended its complaint,
and then the defendant moved to dismiss there.
Cazorla does not stand for the idea that the
commission needs to do all these things before discovery to
survive a 12(b)(6) motion.
point Tesla is going to have the right to test the sufficiency
of the allegations to identify the victims.
discovery is for.
If anything, it says, yeah, at some
That's what
Nothing in Cazorla says that happens at the
onset of the lawsuit.
years in since the -- since the case was filed.
And I think in Cazorla it was three
And JBS USA, I think -- the other case my counterpart
named -- the Court entertained a motion to dismiss and a motion
for judgment on the pleadings after discovery and trial was
held in phase one of the EEOC's case, which makes sense.
discovered victims and claimants and narrowed the theory of
liability for the trial.
They
And this was before phase two.
None of this suggests that the commission needs to do
that at the onset of the case to put Tesla, which is something
of a legal fiction here, on notice of the allegations against
it.
enough facts to raise, as Twombly says, an expectation that
discovery will reveal the evidence of the necessary claims or
elements.
And the complaint as pled right now alleges more than
That's all in the complaint.
Naming one more, two more individuals, notwithstanding UNITED STATES DISTRICT COURT
Page 28
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 28 of 33
the fact that we are bringing the case on our own initiative,
does not make the case more or less meaningfully plausible with
respect to the nature of the allegations here.
exercise that has no practical utility.
It would be an
Tesla is on notice of the allegations from the
complaint.
where, you know, we meet and confer about victims, their first
rog is identify victims, et cetera, et cetera.
process is not to stop a complaint like this, that is, as
It's sufficient.
We need to get to discovery
The 12(b)(6)
sufficient as this one is.
THE COURT:
All right.
He's right about Cazorla.
The
decision came three years after the case was filed.
MR. CARDOZO:
Yes, but the case says it's applying
Rule 12(b)(6) -THE COURT:
And it's only as persuasive as it is
persuasive, because, as you conceded, there is no appellate
authority, right, that you're relying on.
solely on district court cases, and so they're only as
persuasive and they're persuasive.
You're relying
And, in this case, as you pointed out, and as your
colleague said, there is complete overlap with the state case.
So it is a little bit of the fiction.
that they actually don't know what they're talking about.
just showed me the complaint and have them amend to allege.
And you may -- you know, the question is it is plausible or not
Tesla isn't complaining
UNITED STATES DISTRICT COURT
You
Page 29
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 29 of 33
but -MR. CARDOZO:
Well, I'll come back to -- the EEOC is,
unlike other private plaintiffs, the EEOC is required by
statute before they even come to this court to give notice,
investigate, and conciliate.
they're supposed to have done a lot before they got here, and
they can't tell us one fact.
THE COURT:
So the idea that we're early,
And --
They told you a lot of facts.
They gave
specific examples of the conduct that they allege -- that they
allege is occurring throughout the facility and has been.
They're not just saying discrimination.
they're actually saying specifically what it is -- what is the
conduct that created the hostile environment.
primarily on the use of language and words, or a particular
word throughout the facility.
the notice is.
the hostile work environment.
It's not even like they're --
it's not saying what that is.
It is saying what it is.
They're saying -- and
It's based
That's what it is.
That's what
So you even know exactly what is the type of
MR. CARDOZO:
Well, I'll say a couple of things.
The
appellate cases made very clear that there is certain standards
that Rule 12(b)(6) has to have.
So that's established.
These district court cases are the only ones that
address this very odd circumstance where complaints are
unusually generic.
have applied to sift what makes it sufficient from what
And the standards -- the few cases that
UNITED STATES DISTRICT COURT
Page 30
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 30 of 33
doesn't, they all talk about things that just aren't present in
this complaint:
victims are, and other specifics.
Who the perpetrators are, names, who the
Because if you think about what the statute is
supposed to accomplish, particularly if you didn't get that in
the administrative process either, this is so far from what
Title VII is contemplating --
THE COURT:
But look at paragraph 22.
That is a very
specific allegation, which in and of itself supports a claim of
a hostile work environment for that employee, that you don't
know his name doesn't mean it's not plausible.
interrogatory and get it.
MR. CARDOZO:
Just do your
We don't know, not only the name, but
whether this has happened in 2015 or 2024, which I --
THE COURT:
Why does it matter?
MR. CARDOZO:
Why does --
Because one might be a problem that
requires correction, one might be a one-off, one might be one
where the person got fired.
know.
THE COURT:
All of these things we need to
That's what discovery is for.
question is does it state a claim?
state a claim?
paragraph 22.
The
The question is does is
You said it was generic.
I'm looking at
There is nothing generic about that allegation.
MR. CARDOZO:
not about one worker.
But the allegation in this complaint is They're saying it's happening
UNITED STATES DISTRICT COURT
Page 31
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 31 of 33
everywhere.
And then they throw in one worker --
THE COURT:
I understand.
I understand.
I'm not
persuaded at all, I have to say -- I don't think that's a
secret -- and, you know, there isn't really a lot of support
for it.
Look, if they don't give you discovery, then come
complain, but they'll give it to you.
know, and the evidence will --
MR. CARDOZO:
You'll
But they didn't give it before we came
to court and they're required by law to do that.
You'll get it.
THE COURT:
This is not helpful.
It's not helpful and
it's not persuasive.
All right.
We're dealing with the motion to dismiss,
and I'll address the one that your colleague made.
And I apply the law and I'll do it faithfully here so -- and
I'll issue a written order.
All right.
You can go back and look at that.
So I will do -- we don't have a CMC date, so I want to
set the date for May 9th, and then you'll need to meet and
confer.
One thing, I do want to try to reduce the burden of
discovery as much as possible in light of the state court
proceedings.
Tesla just produce what it's already produced, that you review
that, and then only if there is additional things that you need
or have been withheld, that you do that to reduce the burden.
One way to start, which you should discuss, is
UNITED STATES DISTRICT COURT
Page 32
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 32 of 33
That would be my suggestion as a good way of starting.
I don't think it's probably too late to coordinate
depositions or things like that, and it may be that the parties
won't.
also something to explore as well.
I don't know.
To the extent you can do that, that's
Again, we have to be mindful of Rule 1, which is to
try to be as efficient and inexpensive as possible.
are things you should discuss when you have your Rule 26
colloquy.
All right.
I do the CMCs.
due May 2nd.
So that would be May 9th, by video is how
They'll be 1:30.
And your joint statement is
All right.
MR. CARDOZO:
(Proceedings concluded at 11:22 a.m.)
So those
Thank you.
*
All right.
*
Thank you, Your Honor.
*
UNITED STATES DISTRICT COURT
Page 33
Case 3:23-cv-04984-JSC
Document 49
Filed 04/24/24
Page 33 of 33 33
C E R T I F I C A T E
I, CHRISTINE M. COALY, do hereby certify that I am
duly appointed and qualified to act as Official Court Reporter
for the United States District Court for the District of
Arizona.
I FURTHER CERTIFY that the foregoing pages constitute
a full, true, and accurate transcript of all of that portion of
the proceedings contained herein, had in the above-entitled
cause on the date specified therein, and that said transcript
was prepared under my direction and control.
DATED at Phoenix, Arizona, this 22nd day of April, 2024.
/s/ Christine M. Coaly_______ Christine M. Coaly, RMR, CRR
UNITED STATES DISTRICT COURT
Back to 
