Demopoulos v. Rollin Dairy Corp.
- Denise Cote
- 1:21-cv-07923
- U.S. District Court · Southern District of New York
- 4
In Demopoulos v. Rollin Dairy, Judge Broderick referred plaintiffs’ ERISA default-judgment motion for review of notice and damages.
The plaintiffs and Rollin Dairy Corp. were affected. The plaintiffs did not receive an immediate default judgment; the issues of liability and damages were referred for further review, including a possible damages inquest.
What happened
In Demopoulos v. Rollin Dairy Corp., the plaintiffs sought a default judgment requiring Rollin Dairy Corp. to pay withdrawal liability under the Employee Retirement Income Security Act. The court had held a hearing and asked the plaintiffs to explain why a damages hearing was unnecessary and to provide documents supporting their calculations.
The plaintiffs acknowledged that the notice of withdrawal liability incorrectly identified the plan year in which Rollin Dairy Corp. withdrew. They also submitted an actuary’s report, but the report did not show the requested damages amount of $2,631,595.00. The court said it could not determine from the current record whether the notice was legally adequate or whether the damages were properly calculated.
Judge Vernon S. Broderick referred the motion to Magistrate Judge Jennifer Willis for a report and recommendation on whether the plaintiffs were entitled to judgment and, if so, for a hearing to determine the damages. He also ordered the plaintiffs to serve the order on Rollin Dairy Corp. and file proof of service by March 31, 2022.
The detailed version
- Demopoulos v. Rollin Dairy Corp. · No. 1:21-cv-07923
- Denise Cote
- Mar. 25, 2022
Background
The plaintiffs brought an action to recover withdrawal liability under the Employee Retirement Income Security Act of 1974, as amended by the Multiemployer Pension Plan Amendments Act of 1980. They asked for a default judgment, which is a judgment based on a defendant’s failure to defend the case. The court held a hearing on the plaintiffs’ request and then directed them to explain why an inquest—a court process for determining damages—was unnecessary. The court also required documents supporting each part of the damages calculation, particularly the present value of the withdrawal liability.
Issues identified by the court
The plaintiffs argued that Rollin Dairy Corp. could not challenge the amount of withdrawal liability because it did not timely begin arbitration after receiving notice. The court stated that this did not eliminate the plaintiffs’ responsibility to establish adequate notice and prove the damages.
The plaintiffs acknowledged that the notice and original pleadings contained an error: the notice stated that Rollin Dairy Corp. withdrew during the plan year ending March 31, 2020, but the plaintiffs said the withdrawal actually occurred during the plan year ending March 31, 2021. The court referred to Magistrate Judge Jennifer Willis the question whether this defect invalidated the liability, required correction of the notice, or called for another remedy.
The plaintiffs also submitted the Fund Actuary’s Report, but the requested damages amount—$2,631,595.00—did not appear in that report. The court concluded that, on the existing record, it could not fulfill its obligation to ensure that the requested damages were appropriate.
Ruling and effect
Judge Vernon S. Broderick did not enter the requested default judgment. Instead, he referred the plaintiffs’ motion for default judgment to Magistrate Judge Willis for a report and recommendation on whether the plaintiffs were entitled to judgment and, if so, for an inquest into the amount of damages owed. He ordered the plaintiffs to serve the order on Rollin Dairy Corp. by first-class mail or another previously approved method and to file an affidavit confirming service by March 31, 2022.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.