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International Painters & Allied Trades Industry Pension Fund v. Zak Architectural Metal & Glass LLC

September 7, 2010

INTERNATIONAL PAINTERS & ALLIED TRADES INDUSTRY PENSION FUND ET AL., PLAINTIFFS,
v.
ZAK ARCHITECTURAL METAL & GLASS LLC, DEFENDANT.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document No. 8

MEMORANDUM OPINION

DIRECTING THE DEFENDANT TO SHOW CAUSE WHY IT SHOULD NOT BE HELD IN CIVIL CONTEMPT

I. INTRODUCTION

The plaintiffs, the International Painters and Allied Trades Industry Pension Fund ("the Pension Fund") and Gary J. Meyers, the fiduciary of the fund, request that the court hold the defendant in civil contempt for failure to comply with the court's July 22, 2009 order ("the order"). In the order, the court granted the plaintiffs' motion for default judgment and directed the defendant to pay damages and submit to an audit. The plaintiffs now contend that the defendant has failed to submit to an audit in direct violation of the order. Upon consideration of the plaintiffs' unopposed submissions, the court orders the defendant to show cause why the court should not hold it in civil contempt or impose sanctions for its noncompliance.

II. FACTUAL & PROCEDURAL BACKGROUND

The plaintiffs initiated this action in June 2008 to recover delinquent contributions to the Pension Fund, an employee benefit fund. See generally Compl. The plaintiffs also sought interest, liquidated damages, attorney's fees and an audit of the defendant's records. Id. The plaintiffs asserted that, in violation of collective bargaining agreements and the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1145, the defendant had failed to make monthly contributions to the plaintiffs, file remittance reports and submit to audits at the plaintiffs' request. Id.

The Clerk of the Court entered default on August 6, 2008, see Entry of Default, and the plaintiffs moved for a default judgment on September 4, 2008, see generally Pls.' Mot. for Default J. Because the defendant had not responded to the entry of default or otherwise defended itself in this action, the court granted the plaintiffs' motion for entry of default on July 22, 2009. See generally Mem. Op. (July 22, 2009). The court ordered the defendant to pay the plaintiffs $50,661.73 in monetary relief for unpaid contributions, interest, late charges, liquidated damages and attorney's fees. Id. at 6-7. The court also ordered the defendant to submit all relevant records to the plaintiffs for the purposes of an audit and to remit any additional outstanding contributions, penalties and costs pursuant to the audit. Id. at 8.

On February 12, 2010, the plaintiffs filed the instant motion. See generally Pls.' Mot. for Civil Contempt ("Pls.' Mot."). The plaintiffs contend that despite several requests, the defendant has neither produced records necessary for an audit nor submitted to an audit. Id. at 2 & Exs. 5-9. Accordingly, the plaintiffs request that the court order the defendant to show cause why the court should not hold it in civil contempt, or, in the alternative, that the court hold the defendant in civil contempt, fine the defendant for its continued noncompliance with the order and award the plaintiffs their attorney's fees and costs. Pls.' Mot. at 7.

III. ANALYSIS

A. Legal Standard for Civil Contempt

A party moving for a finding of civil contempt must show, by clear and convincing evidence, that: (1) there was a court order in place; (2) the order required certain conduct by the defendant; and (3) the defendant failed to comply with that order. Armstrong v. Executive Office of the President, 1 F.3d 1274, 1289 (D.C. Cir. 1993); Secs. & Exch. Comm'n v. Bilzerian, 112 F. Supp. 2d 12, 16 (D.D.C. 2000). The plaintiff must show that the order was clear and unambiguous. Armstrong, 1 F.3d at 1289(quoting Project B.A.S.I.C. v. Kemp, 947 F.2d 11, 16 (1st Cir. 1991)). In addition, the defendant's noncompliance with the order must be proven by clear and convincing evidence. Wash.-Balt. Newspaper Guild, Local 35 v. Wash. Post Co., 626 F.2d 1029, 1031 (D.C. Cir. 1980); see also Nat'l Labor Relations Bd. v. Blevins Popcorn Co., 659 F.2d 1173, 1186 (D.C. Cir. 1981) (rejecting the reasonable doubt standard and willfulness requirement when ascertaining noncompliance and only requiring proof of noncompliance by clear and convincing evidence). The defendant's intent regarding compliance with the order is irrelevant. Bilzerian, 112 F. Supp. 2d at 16. Once the court determines that the movant has made the above three-part showing, the burden shifts to the defendant to justify the noncompliance by, for example, demonstrating its financial inability to pay the judgment or its good faith attempts to comply. Id. at 16-17. In both cases, however, the justifications must be accompanied by adequate detailed proof. Id.

Civil contempt is a remedial device that a court can utilize to achieve full compliance with its orders. Secs. & Exch. Comm'n v. Bankers Alliance Corp., 881 F. Supp. 673, 678 (D.D.C. 1995). When selecting what sanction to impose, a court must "exert only so much authority of the court as is required to assure compliance." Id. (citations omitted). Moreover, "sanctions imposed in civil contempt proceedings therefore ordinarily are conditional, and a person or entity held in civil contempt may avoid the sanctions by promptly complying with the court's order." Petties v. Dist. of Columbia, 897 F. Supp. 626, 629-30 (D.D.C. 1995).

B. The Court Grants the Plaintiffs' Request for an Order Requiring the Defendant to Show Cause Why It Should ...


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