Heat and Frost Insulators of Northern California Local Union No. 16 Health and…
Heat and Frost Insulators of Northern California Local Union No. 16 Health and Welfare Trust Fund v. Rhodium Integrated Services
- Richard Seeborg
- 3:21-cv-04084
- U.S. District Court · Northern District of California
- 9
In Heat and Frost Insulators v. Rhodium Integrated Services, Judge Seeborg granted default judgment after Rhodium failed to respond, awarding damages, fees, costs, and an audit injunction.
The judgment affects the plaintiffs—the employee-benefit trust fund plaintiffs—and Rhodium Integrated Services. Rhodium was ordered to pay the awarded contributions, interest, liquidated damages, attorneys’ fees, and costs, and to provide documents for a payroll audit.
What happened
Heat and Frost Insulators of Northern California Local Union No. 16 Health and Welfare Trust Fund and other plaintiffs sued Rhodium Integrated Services under the Employee Retirement Income Security Act, claiming Rhodium failed to pay required employee-benefit contributions and cooperate with a payroll audit. Rhodium was served but did not respond, so the clerk entered default.
The court found that the plaintiffs’ allegations stated valid claims and that the factors governing default judgment favored entering judgment. It awarded $33,064.85 for unpaid contributions, interest, and liquidated damages, plus $4,720.46 in attorneys’ fees and costs.
In Heat and Frost Insulators of Northern California Local Union No. 16 Health and Welfare Trust Fund v. Rhodium Integrated Services, Judge Richard Seeborg also granted an injunction requiring Rhodium to provide documents needed for the payroll audit. The court granted the plaintiffs’ motion for default judgment and their request for attorneys’ fees and costs.
The detailed version
- Heat and Frost Insulators of Northern California Local Union No. 16 Health and… · No. 3:21-cv-04084
- Richard Seeborg
- Jan. 26, 2022
Background
The plaintiffs brought an action under the Employee Retirement Income Security Act (ERISA), alleging that Rhodium violated bargaining and trust agreements by failing to cooperate with a payroll audit and failing to make or timely report required employee-benefit contributions. The alleged unpaid or late contributions covered various periods from November 2019 through April 2021, and the requested audit covered payroll records from August 1, 2019, onward.
Rhodium was personally served through its registered agent on June 15, 2021. After Rhodium did not answer or otherwise respond within 21 days, the clerk entered default under Federal Rule of Civil Procedure 55(a) on July 29, 2021. Rhodium also received the notice of default and the plaintiffs’ motion for default judgment but did not appear.
Court’s analysis
The court applied the factors used to decide whether to enter default judgment. It found that the plaintiffs would be prejudiced without a judgment, that the complaint was sufficient and appeared meritorious, that the requested monetary relief was documented and proportionate, and that there was no indication of excusable neglect. The possibility of a dispute about material facts was essentially neutral but weighed slightly in favor of judgment. The policy favoring decisions on the merits did not prevent judgment because Rhodium had not responded.
The court stated that, after default, the complaint’s factual allegations concerning liability were treated as admitted, but the amount of damages still had to be established. The court concluded that the allegations that Rhodium had agreed to make contributions and failed to do so stated a valid ERISA claim. The court also noted that the merits would not be decided through an adversarial proceeding because Rhodium had failed to participate.
Relief awarded
The court awarded the plaintiffs $33,064.85 for principal contributions, interest, and liquidated damages. It found that the declarations and supporting exhibits adequately documented those amounts and that ERISA and the parties’ agreement supported the requested interest and liquidated damages.
The court also awarded $4,720.46 in attorneys’ fees and costs, consisting of $4,170 in fees and $550.46 in costs. It found the hourly rates and 22.5 hours of work reasonable and approved the filing and service expenses as reasonable litigation costs.
The court further granted injunctive relief requiring Rhodium to submit documents needed to complete the payroll audit. It found that the plaintiffs faced continuing harm without the audit, that requiring Rhodium to comply with its contractual and statutory obligations imposed no improper hardship, and that the injunction served the public interest.
Disposition
Judge Richard Seeborg granted the plaintiffs’ motion for default judgment and their motion for attorneys’ fees and costs. The order also granted the requested audit-related injunction.
Read the full 9-page opinion on CourtListener, the free public archive maintained by the Free Law Project.