ERG Aerospace Corporation v. United States of America

Filing 31

ORDER Re: 27 MOTION to Continue MOTION TO CONTINUE SETTLEMENT CONFERENCE TO AUGUST 26, 2014 filed by United States of America. Settlement Conference set for 8/26/2014 at 9:30 A.M. in Courtroom C, 15th Floor, San Francisco. Signed by Magistrate Judge Laurel Beeler on 3/31/2014. (ls, COURT STAFF) (Filed on 3/31/2014)

1 MELINDA HAAG (CABN 132612)
United States Attorney
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THOMAS MOORE (ALBN 4305-O78T)
3 Chief, Tax Division
4 THOMAS M. NEWMAN (NYSBN 4256178)
Assistant United States Attorney
5 11th Floor Federal Building
450 Golden Gate Avenue, Box 36055
6 San Francisco, CA 94102
Telephone: [phone]
[phone]
7 Fax:
Attorneys for the United States of America
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN FRANCISCO DIVISION
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ERG AEROSPACE CORPORATION,

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Plaintiff,
v.
UNITED STATES OF AMERICA,
Defendant.

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) CASE NO. 13-2973 JSW
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) MOTION TO CONTINUE SETTLEMENT
) CONFERENCE TO AUGUST 26, 2014
) ORDER
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Pursuant to this Court Civil Local Rules 6-3 and 7-11, defendant the United States moves to
continue the March 31, 2014 settlement conference to August 26, 2014. This motion is made for at least

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three reasons. The primary reason is that a settlement discussion involving the court is not practical at

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As an initial matter, Plaintiff ERG Aerospace filed this suit on June 27, 2013. (Dkt. No. 1). In

24 the complaint, ERG Aerospace alleges that the IRS is (wrongfully) attempting to levy payments made to
25 plaintiff in order to satisfy a $24 million tax debt owed by a company called ERG (Energy Research and
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Generation). (Dkt. No. 1). On October 16, 2013, defendant the United States filed an Answer to

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plaintiff’s complaint, and a counterclaim against ERG Aerospace and ERG. (Dkt. No. 8). In the
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1 counterclaim, the defendant sought a judgment for the past-due taxes owed by ERG, a declaration that
2 ERG Aerospace is the nominee or successor of ERG, and an injunction barring ERG or ERG Aerospace
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from failing to file tax returns, selling assets, and otherwise interfering with the Internal Revenue Laws.
(Dkt. No. 8). These issue directly relate to any settlement as, from the government’s perspective, ERG

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and ERG Aerospace are a single entity and both owe the tax debts at issue.
Consequently, any settlement requires an analysis and review of ERG’s and ERG Aerospace’s

8 assets and income. To date, the government has served ERG Aerospace with five document requests
9 that includes information that would be vital to assessing settlement. Those requests have not been
10 satisfied and as of March 21, 2014, the parties discussed through e-mail that plaintiff be ordered to
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provide documents it received as part of an unrelated case for counsel to review here. As noted in the

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stipulation filed in this case, government counsel will not receive those documents until March 25, 2014.
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(Dkt. No. 26). Stated simply, the government lacks information about ERG’s and ERG Aerospace’s

15 assets, income and the purported sale of this business in 2006. Requests for this information have been
16 made formally and informally starting in November 2013.
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As a second matter, the government has received no clear indication who owns ERG Aerospace.

18 The government’s counterclaim asserts ERG Aerospace and ERG are (or were) owned by substantially
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the same people. (Dkt. No. 8, at ¶ 65). While the documents claim that ERG Aerospace is run by Eric,

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Mark, and Bradley Benson; plaintiff also claimed that Burton Benson owns ERG Aerospace. (Dkt. No.
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8, at ¶ 67; Dkt. No. 22). At this point, no clear answer has been offered explaining who owns ERG

23 Aerospace and in terms of settlement who will make a decision at the company.
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In addition, the settlement conference was to be attended by trial counsel, and Thomas Moore,

25 the Tax Division Chief. Mr. Moore is no longer available on March 31, 2014, and the request to
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continue is also made to accommodate his schedule.

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For all of these reasons, the government believes that the settlement conference should be

2 rescheduled to August 26, 2014. By that time, the parties should have exchanged discovery and the
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issues can be more fully discussed and addressed. 1

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Respectfully submitted,

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MELINDA HAAG
United States Attorney

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/s/ Thomas M. Newman
THOMAS M. NEWMAN
Assistant United States Attorney
Tax Division

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As a separate matter, the government attempted to obtain a stipulation to continue the
settlement conference and more fully discuss this request. See Civil L.R. 6-11. Plaintiff’s counsel
27 agreed that they would call at 1:30 pm on March 24, 2014, to discuss an ongoing discovery dispute and
would report their position about continuing the settlement conference. This meeting was previously set
28 for March 21, 2014. Plaintiff’s counsel did not call as agreed on March 21 or 24.
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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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ERG AEROSPACE CORPORATION,

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Plaintiff,
v.
UNITED STATES OF AMERICA,

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Defendant.
UNITED STATES OF AMERICA,

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Counterclaim-Plaintiff,
v.
ERG AEROSPACE CORPORATION,
ENERGY RESEARCH & GENERATION,
INC., individually, and d/b/a ERG
MATERIALS & AEROSPACE CORP.,
Counterclaim-Defendants.

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) CASE NO. 13-2973 JSW
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) [proposed] ORDER
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IT IS ORDERED THAT the settlement conference is continued to August 26, 2014. at

The Settlement Conference Order issued on 1/22/2014, ECF No. 20 remains in affect.

IT IS SO ORDERED.
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March 31, 2014

Dated_______________

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9:30 a.m.

LAUREL BEELER
U.S. MAGISTRATE JUDGE

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