Heat and Frost Insulators of Northern California Local Union No. 16 Health and…

Background

The plaintiffs moved for default judgment against Tri-County Insulation Company, Inc. They sought attorneys’ fees and costs under 29 U.S.C. § 1132(g)(2)(D), a provision of the federal employee-benefits law known as the Employee Retirement Income Security Act, or ERISA.

The opinion states that the Ninth Circuit has described an award under § 1132(g)(2) as mandatory when three conditions are met: the employer was delinquent when the action was filed, the court enters judgment against the employer, and the plan provides for the award.

Court’s Analysis

The court found that plaintiffs had not established the first and third conditions. First, the court relied on a declaration and the eventual completion of a mandatory payroll audit to conclude that Tri-County was not delinquent in its contributions when the action was filed. Plaintiffs had not cited authority showing that delayed compliance with the payroll audit made Tri-County delinquent under § 1132(g)(2).

Second, although plaintiffs argued that the agreement allowed an award of fees and costs, they did not cite supporting evidence or complaint allegations. The declaration they relied on cited exhibits, but the court found no reference to attorneys’ fees or costs in one exhibit, and plaintiffs had not supplied another cited exhibit.

The court also noted that fees under § 1132(g)(2) might still be available even though the audit had been completed and no judgment ordering the audit was needed. The court therefore did not rule that fees were categorically unavailable.

Disposition

The court ordered plaintiffs to show cause why they were entitled to a default-judgment award of fees and costs under § 1132(g)(2) or another legal basis. Plaintiffs were ordered to respond by March 19, 2021. The opinion is an order to show cause, not a final ruling granting or denying the motion for default judgment.