District Council 16 Northern California Health and Welfare Trust Fund v…

Background

This was an enforcement action under the Employee Retirement Income Security Act of 1974 (ERISA). The plaintiffs were employee-benefit funds, their trustees and fiduciaries, and District Council No. 16 of the International Union of Painters and Allied Trades. The defendant, Greater Bay Flooring, Inc., was identified as a California corporation and an employer under ERISA and the National Labor Relations Act.

The plaintiffs alleged that Greater Bay Flooring entered into a collective bargaining agreement requiring it to make contributions to the plaintiffs’ benefit funds, pay union dues, and make payments to other benefit plans. They alleged that the company failed to report and pay contributions for employee hours worked in February 2021 and failed to cooperate with an audit of payroll records covering October 1, 2017, through the present. The complaint asserted one cause of action seeking audit compliance, delinquent contributions, interest, liquidated damages, attorneys’ fees, costs, and injunctive relief.

Default and the court’s analysis

The defendant was served with the summons and complaint, notice that default had been entered, and the motion for default judgment. The court found that it had subject-matter jurisdiction because the plaintiffs brought federal ERISA claims and that it had personal jurisdiction under ERISA. It also found that service was adequate.

Applying the seven factors used in the Ninth Circuit for default judgment, the court found that all factors favored granting the motion. The court concluded that the complaint stated a legally sufficient claim because the plaintiffs alleged that the benefit plans were covered by ERISA, the collective bargaining agreement required contributions, and the defendant failed to make required payments and permit the audit. Because the defendant had not responded, the complaint’s well-pleaded liability allegations were treated as admitted for purposes of the motion.

Relief and disposition

The court held that the plaintiffs were entitled to an order requiring Greater Bay Flooring to report and pay contributions for employee hours worked in February 2021 and to comply with the audit covering October 1, 2017, through the present. The court deferred unpaid contributions, interest, and liquidated damages because the amounts, if any, could be determined only after the audit.

The court found the requested attorneys’ fees reasonable and awarded $5,368 in attorneys’ fees and $1,135.39 in costs. The court GRANTS plaintiffs’ motion for default judgment. By separate judgment, it ordered the defendant to comply with its audit obligations, with the audit to begin within 30 days of the order. The plaintiffs may seek to amend the order and judgment if the audit shows that unpaid contributions, interest, liquidated damages, or additional fees and costs are owed.