Greater St. Louis Construction Laborers Welfare Fund et al v. J L Brown Contracting Service, Inc.

Filing 24

AMENDED MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiffs motion for civil contempt [Doc. # 18 ] is granted as to defendant J L Brown Contracting Service, Inc. for failure to comply with the October 6, 2015, order directing it to produ ce its records for inspection by plaintiffs. The motion is denied as to non-party Jimmie Brown. IT IS FURTHER ORDERED that defendant J L Brown Contracting Service, Inc. is held in contempt of the authority of this Court for its failure to comply wi th the October 6, 2015, order. IT IS FURTHER ORDERED that defendant J L Brown Contracting Service, Inc. shall pay to the Clerk of Court a fine in the amount of Two Hundred Dollars (US $200.00) per day, beginning on October 3, 2016, and contin uing thereafter until defendant satisfies the Court in writing that it is no longer in contempt. IT IS FURTHER ORDERED that plaintiffs shall promptly inform the Court in writing of defendants compliance with the order of October 6, 2015. IT IS FUR THER ORDERED that plaintiffs shall have until October 3, 2016, in which to file a verified statement of attorneys fees and costs incurred bringing the motion for contempt. IT IS FURTHER ORDERED that the Clerk of the Court shall mail a copy of this order to defendant at the following address: J L Brown Contracting Service, Inc. 5141 North Hanley Road St. Louis, MO 63134 Signed by District Judge Carol E. Jackson on 9/20/16. (JAB)(Order mailed) (cc:Finance)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
GREATER ST. LOUIS CONSTRUCTION )
LABORERS WELFARE FUND, et al.,
)
)
Plaintiffs,
)
)
vs.
)
)
J L BROWN CONTRACTING SERVICE, )
INC.,
)
)
Defendant.
)

Case No. 4:15-CV-960-CEJ

AMENDED MEMORANDUM AND ORDER
This matter is before the Court on plaintiffs’ motion to hold defendant J L
Brown Contracting Service, Inc. and its alleged principal officer, Jimmie Brown, in
civil contempt for failure to comply with the order compelling defendant to submit
to an accounting by production of records.

Neither defendant nor Brown has

responded to the motion, and the time permitted for doing so has expired.
I.

Background

Plaintiffs bring this action to collect delinquent fringe benefit contributions
pursuant to Section 301 of the Labor Management Relations Act of 1974 (LMRA), as
amended, 29 U.S.C. § 185, and pursuant to Section 502 of the Employee
Retirement Income Security Act of 1974 (ERISA), as amended, 29 U.S.C. § 1132.
Plaintiffs are four employee benefit plans (the Pension, Welfare, Vacation, and
Training funds), their trustees (collectively, the plans), and Local Union Nos. 42 and
110 of the Laborers International Union of North America.

Defendant is an

employer in an industry affecting commerce within the meaning of the LMRA and

ERISA. Plaintiffs allege that defendant failed to make timely and full contributions
to the plans as required under the terms of two collective bargaining agreements.
II.

Procedural History

Plaintiffs filed the instant case on June 18, 2015. Service was achieved on
defendant on June 30, 2015. Because defendant failed to timely answer, the Clerk
of Court entered default against it on August 17, 2015.

Plaintiffs moved for an

order to compel an accounting, to determine the amount of their damages.

On

October 6, 2015, the Court granted the motion. See Fed. R. Civ. P. 55(b)(2)(A).
Defendant was ordered to produce for inspection by plaintiffs within thirty days all
books, ledgers, payroll records, cash disbursement ledgers, bank statements, and
other documents reflecting or pertaining to all hours worked by and wages paid to
its employees for the period beginning March 1, 2014, through October 6, 2015.
On January 11, 2016, having received no update on the status of the
accounting, the Court ordered plaintiffs to file a motion for default judgment.
However, on January 13, 2016, plaintiffs informed the Court that defendant had
filed a voluntary petition for bankruptcy on October 13, 2015, and that the petition
was still under consideration.

Consequently, on January 14, 2016, the Court

vacated the order to file a motion for default judgment and, pursuant to the
automatic stay provision of 11 U.S.C. § 362(a)(1), stayed this action pending
completion of the bankruptcy case.
On July 12, 2016, plaintiffs filed the instant motion.

Among other things,

they averred that defendant’s bankruptcy action was dismissed on May 24, 2016.
After confirming the dismissal, the Court lifted the stay on July 13, 2016. Following
dissolution of the stay, defendant was required to respond to the motion for

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contempt.

As mentioned, it did not respond. On August 16, 2016, the Court

ordered the defendant to show cause why it should not be held in contempt for
failing to comply with the Court’s October 6, 2015, order to compel an accounting.
The defendants did not respond to the Court’s show cause order by the August 31,
2016, deadline.
III.

Discussion

First, termination of the stay renews defendant’s obligation to respond to the
entry of default and to produce its records. Its continued noncompliance means it
is again appropriate to order plaintiffs to file a motion for default judgment. See
Fed. R. Civ. P. 55; Weitz Co., LLC v. MacKenzie House, LLC, 665 F.3d 970, 977 (8th
Cir. 2012); Murray v. Lene, 595 F.3d 868, 871 (8th Cir. 2010).
Second, several considerations bear on whether to hold defendant in
contempt for noncompliance with the order to produce its records. “Federal courts
possess certain inherent powers, including the power to punish for contempts,
which reaches both conduct before the court and that beyond the court’s confines.”
Isaacson v. Manty, 721 F.3d 533, 538–39 (8th Cir. 2013) (quotation marks and
citation omitted).

A court thus has the inherent power to sanction litigants for

noncompliance with its orders.

Id.; see E.D. Mo. L.R. 12.02.

A district court is

“give[n] substantial deference” to decide “whether sanctions are warranted because
of its familiarity with the case and counsel involved.” Willhite v. Collins, 459 F.3d
866, 869 (8th Cir. 2006) (citation omitted).
“A party seeking civil contempt bears the initial burden of proving, by clear
and convincing evidence, that the alleged contemnors violated a court order.” Chi.
Truck Drivers v. Bhd. Labor Leasing, 207 F.3d 500, 505 (8th Cir. 2000) (citation

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omitted).

Defendant had thirty days following issuance of the October 6, 2015,

order to produce the required records. After six days passed with no response, on
the seventh day, October 13, defendant filed for bankruptcy, staying operation of
that order.
order.

Twenty-four days thus remained for defendant to comply with the

Pursuant to the order, the stay expired automatically on May 24, 2016,

when defendant’s bankruptcy action was dismissed, which the Court reiterated on
July 13, 2016. Defendant was therefore required to comply no later than August 4,
2016. That deadline passed, and defendant still has not complied and produced its
records to plaintiffs.
Clear and convincing evidence thus shows that defendant has failed to
comply. Where a party has not complied with a court order, “the burden” shifts to
the recalcitrant individual “to show an inability to comply.”

Id.

Defendant was

afforded ample opportunity to explain why it cannot comply with the order, but it
has not done so. Therefore, the Court finds it is appropriate to hold defendant in
civil contempt of court for its failure to comply with the order to produce its records.
Several additional factors bear on what sanction to impose for that contempt.
“Civil contempt may be employed either to coerce the defendant into compliance
with a court order or to compensate the complainant for losses sustained, or both.”
Id. (citation omitted). “[C]ivil contempt sanctions, or those penalties designed to
compel future compliance with a court order, are considered to be coercive and
avoidable through obedience, and thus may be imposed in an ordinary civil
proceeding upon notice and an opportunity to be heard.” Int’l Union, United Mine
Workers of Am. v. Bagwell, 512 U.S. 821, 827 (1994).

“Where a fine is not

compensatory, it is civil . . . if the contemnor is afforded an opportunity to purge,”

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such as a “per diem fine imposed for each day a contemnor fails to comply with an
affirmative court order.” Id. at 829 (citation omitted); see Hicks ex rel. Feiock v.
Feiock, 485 U.S. 624, 632 (1988) (holding that a fine “payable to the court is . . .
remedial when the defendant can avoid paying the fine simply by performing the
affirmative act required by the court’s order”).

A court also may require a

contemnor to bear a movant’s attorneys’ fees and costs incurred to bring a motion
for contempt. See Jake’s, Ltd., Inc. v. City of Coates, 356 F.3d 896, 900 (8th Cir.
2004); see also Chambers v. NASCO, Inc., 501 U.S. 32, 44–45 (1991) (holding
courts have the “inherent power to assess attorney’s fees” where appropriate); E.D.
Mo. L.R. 12.02. Finally, a “court in dealing with contempt must exercise the least
possible power adequate to the end proposed.”

Taylor v. Finch, 423 F.2d 1277,

1279 (8th Cir. 1970) (quotation marks and citation omitted).
Defendant was given notice that plaintiffs sought to hold it in civil contempt.
It was afforded the opportunity to respond why it should not be sanctioned for its
noncompliance.

It did not avail itself of that opportunity.

Sanctions are thus

necessary and appropriate in this case.
Further, the Court finds that the least possible power adequate to coerce
defendant finally to comply is a per diem fine imposed for each additional day it
fails to comply.

The Court also finds the minimum fine necessary to coerce

defendant to comply is $200.00 per day for each additional day of noncompliance.
See Iron Workers St. Louis Dist. Council Annuity Tr. v. Miller Bldg. Grp., LLC, No.
4:14-CV-1298-JAR, 2015 WL 1442801, at *2 (E.D. Mo. Mar. 27, 2015) (finding a
civil contempt fine of $200.00 per day for noncompliance with a court’s order was
necessary to secure the contemnor’s compliance); Painters Dist. Council No. 2 v.

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Paragon Painting of Mo., LLC, No. 4:08-CV-1501-ERW, 2011 WL 3891870, at *1
(E.D. Mo. Sept. 1, 2011) (same). However, the effective date of the civil contempt
sanction on defendant will be delayed for a short period of time following entry of
this order so as to allow defendant one last opportunity to comply before incurring
fines.

The Court additionally finds it is appropriate to require defendant to pay

plaintiffs’ attorneys’ fees and costs incurred bringing the motion for contempt. See
Jake’s, 356 F.3d at 900.
Third, as to Brown, “[i]t is well-settled that a court’s contempt power extends
to non-parties who have notice of the court’s order and the responsibility to comply
with it.” Chi. Truck Drivers, 207 F.3d at 507. A “nonparty may be held in contempt
where the nonparty aids or abets a named party in a concerted violation of a court
order.” Id. (quotation marks and citation omitted). Consequently, a court’s orders
with respect to a corporation are “binding upon . . . corporate officer[s] and
agent[s] of the” corporation, and such officers and agents “may be subject to a
contempt finding” for the corporation’s violation. Id.
Here, however, Brown is not a defendant in this lawsuit.

He also was not

identified in, and thus was not required personally to comply with, the order
compelling defendant to produce its records.

Nor have plaintiffs introduced any

evidence demonstrating that Brown is defendant’s principal. Plaintiffs additionally
have not shown that Brown has control over defendant’s activities, or that he is
personally responsible for defendant’s noncompliance with the order. Therefore, no
basis exists to sanction Brown for defendant’s failure to comply.
*****
Accordingly,

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IT IS HEREBY ORDERED that plaintiffs’ motion for civil contempt [Doc.
#18] is granted as to defendant J L Brown Contracting Service, Inc. for failure to
comply with the October 6, 2015, order directing it to produce its records for
inspection by plaintiffs. The motion is denied as to non-party Jimmie Brown.
IT IS FURTHER ORDERED that defendant J L Brown Contracting Service,
Inc. is held in contempt of the authority of this Court for its failure to comply with
the October 6, 2015, order.
IT IS FURTHER ORDERED that defendant J L Brown Contracting
Service, Inc. shall pay to the Clerk of Court a fine in the amount of Two
Hundred Dollars (US $200.00) per day, beginning on October 3, 2016, and
continuing thereafter until defendant satisfies the Court in writing that it is
no longer in contempt.
IT IS FURTHER ORDERED that plaintiffs shall promptly inform the Court in
writing of defendant’s compliance with the order of October 6, 2015.
IT IS FURTHER ORDERED that plaintiffs shall have until October 3, 2016,
in which to file a verified statement of attorneys’ fees and costs incurred bringing
the motion for contempt.
IT IS FURTHER ORDERED that the Clerk of the Court shall mail a copy of
this order to defendant at the following address:
J L Brown Contracting Service, Inc.
5141 North Hanley Road
St. Louis, MO 63134

____________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE

Dated this 20th day of September, 2016.

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