Northern California Electrical Workers Pension Trust v. Three Brothers…

Background

On April 15, 2022, the court granted the plaintiffs’ motion for summary judgment. The court had rejected the defendants’ argument that they did not owe contributions because their current employees were not members of Workers, Local 6 or the San Francisco Electrical Contractors Association, Inc. The court ordered the defendants to comply with the plaintiffs’ audit demands, produce the requested records and documents, and pay any unpaid contributions identified through the audit.

The plaintiffs’ auditor requested records covering January 1, 2016, through December 31, 2020. The auditor reported that the defendants did not produce payroll records, although the auditor obtained some certified payroll reports from third parties. The plaintiffs later sent requests identifying eight categories of documents. The defendants did not meet the requested deadlines, and their communications did not identify which documents they had or lacked. At the hearing, the defendants represented that they had produced everything they had but acknowledged that they had not specifically identified the documents in their possession.

The auditor prepared a report based on the available records and concluded that the defendants owed $205,652.52 in unpaid contributions for January 1, 2019, through August 22, 2020.

Motion and Analysis

The plaintiffs moved to hold the defendants in civil contempt, enter judgment, or both. In the alternative, they asked the court to impose judgment as a sanction under Federal Rule of Civil Procedure 37 for failing to comply with the summary-judgment order. The court ordered the defendants to explain why judgment should not be entered as a sanction. The defendants did not file a written response but appeared at the telephonic hearing.

The court considered the factors governing the severe sanction of judgment, including the public interest in resolving cases promptly, the court’s need to manage its docket, prejudice to the plaintiffs, the policy favoring decisions on the merits, and whether a lesser sanction could work. The court found that the defendants had not shown that anything beyond their control prevented them from providing the information needed for the audit. It also found that the plaintiffs were prejudiced because they could not obtain all the information they claimed was needed to determine the contributions owed, and because the case had been pending for three years.

The court concluded that further attempts to obtain compliance would be futile. It also noted that the defendants had two opportunities to respond to the amount sought and had received the auditor’s report but did not respond in writing to either the plaintiffs’ motion or the order to show cause. Because the court had already found the defendants liable for unpaid contributions, it concluded that entering judgment would not improperly bypass a decision on the merits.

Ruling

The court granted in part the plaintiffs’ motion and entered judgment against the defendants, jointly and severally, in the amount of $205,652.52. The court denied the plaintiffs’ request for attorneys’ fees without prejudice. It permitted the plaintiffs to file a motion for liquidated damages, interest, and attorneys’ fees by November 4, 2022; allowed the defendants to respond by November 18, 2022; and allowed the plaintiffs to reply by December 2, 2022. The court stated that it would defer entering final judgment until that motion was resolved.