Boards of Trustees of the Sheet Metal Workers Pension Trust of Northern…

Background

The plaintiffs were the boards of trustees of several employee-benefit plans and trust funds. The opinion states that these plans were multi-employer plans under the Employee Retirement Income Security Act (ERISA), and that the boards were named fiduciaries authorized to collect contributions.

According to the opinion, CER was bound by a union bargaining agreement that incorporated the trust agreements. Those agreements required CER to make contributions based on hours worked by its employees. Contributions were due on the twenty-second day of the following month. The agreements also required liquidated damages, interest, and reimbursement of reasonable attorneys’ fees and costs when contributions were delinquent.

The plaintiffs alleged that CER did not pay contributions for October and November 2018 and paid its December 2018 contributions late. The complaint was served on CER by substitute service on August 13, 2020, and the clerk entered CER’s default on October 15, 2020. CER did not appear or oppose the motion for default judgment.

Jurisdiction and Service

The court found subject-matter jurisdiction under federal labor and ERISA statutes. It also found personal jurisdiction over CER and concluded that substitute service was proper. The process server left the documents with the manager of a private post-office-box rental store and then mailed them to the same address. The court also noted that CER had actual notice of the lawsuit and that the plaintiffs had no indication that a better service method was available.

Default-Judgment Analysis

Under Federal Rule of Civil Procedure 55(b)(2), a court may enter a final judgment after a defendant defaults. The court evaluated the factors commonly used to decide whether default judgment is appropriate, including possible prejudice to the plaintiffs, the strength of their claims, the amount at stake, the possibility of factual disputes, whether the default resulted from excusable neglect, and the preference for decisions on the merits.

The court concluded that the factors supported default judgment. It determined that the complaint stated valid claims for unpaid contributions and related amounts under ERISA and the agreements. Because CER had defaulted, the complaint’s well-pleaded factual allegations—other than allegations about damages—were treated as admitted. The court also found that the requested amounts were supported by evidence and were reasonable.

Relief

For the unpaid October and November 2018 contributions, the plaintiffs showed $23,941.79 in unpaid contributions, $4,782.68 in interest through November 24, 2020, and $4,788.35 in liquidated damages, for a total of $33,512.82.

For the December 2018 contribution that was paid one day late, the court approved $100.15 in liquidated damages and interest. The total damages were therefore $33,612.97.

The court approved $9,940.50 in attorneys’ fees and $1,999.19 in costs, totaling $11,939.69. The court found the hours, hourly rates, and listed costs reasonable.

The court did not decide the amount of interest that may have accrued after November 24, 2020, through entry of judgment, or whether post-judgment interest was available. It stated that the plaintiffs were not precluded from seeking that additional interest later.

Disposition

Judge William H. Orrick granted the plaintiffs’ motion for default judgment. The plaintiffs were entitled to $33,612.97 in damages and $11,939.69 in reasonable attorneys’ fees and costs.