United States District Court, S.D. Indiana, Indianapolis Division
MARK MCCLESKEY, Trustee, and INDIANA STATE COUNCIL OF PLASTERERS AND CEMENT MASONS HEALTH AND WELFARE AND PENSION FUNDS, Plaintiffs,
HOOKS AV, LLC, an Illinois foreign limited liability company, Defendant.
ORDER ON MOTION FOR TEMPORARY RESTRAINING ORDER (ECF
R. SWEENEY II JUDGE
Motion for Temporary Restraining Order (ECF No. 13)
is pending before the Court. Plaintiffs
(“Plaintiffs” or the “Funds”) are
various funds, and the Trustee of the funds, established
under collective bargaining agreements entered into between
the Cement Masons Union and its affiliated locals (the
“Union”) and certain employer associations whose
employees are covered by the collective bargaining agreements
with the Union. (Compl. ¶ 2, ECF No. 1.)
Plaintiffs allege that Defendant Hooks AV, LLC
(“Hooks”) has violated its contractual
obligations by failing to make contributions required to be
paid by it to the Funds. They seek a judgment for any amounts
due the Funds. (Compl. ¶¶ 4-8, ECF No. 1.)
Clerk's entry of default has been entered against Hooks.
Based on the default, “the well-pleaded allegations of
a complaint relating to liability are taken as true.”
VLM Food Trading Int'l, Inc. v. Ill. Trading
Co., 811 F.3d 247, 255 (7th Cir. 2016) (quotation and
citation omitted). Hooks cannot contest the fact of its
liability unless the default were to be vacated. See
id. Hooks has been served with Plaintiffs'
Motion for Temporary Restraining Order and its supporting
memorandum. The time for responding to the motion has not yet
run, but the Court can rule on the motion without awaiting a
same standards apply to temporary restraining orders
(“TRO”) that apply to preliminary injunction
orders. See Carlson Group, Inc. v.
Davenport, No. 16-cv-10520, 2016 WL 7212522, at *2 (N.D.
Ill.Dec. 13, 2016). To obtain a TRO, the moving party has the
burden of showing that: “(1) they have a reasonable
likelihood of success on the merits; (2) they have no
adequate remedy at law; and (3) they will suffer irreparable
harm without injunctive relief.” Stifel, Nicolaus
& Co. v. Lac du Flambeau Band of Lake Superior Chippewa
Indians, 807 F.3d 184, 193 (7th Cir. 2015). If the
moving party meets this threshold burden, then the court
balances the harm to the movant absent a TRO against the harm
to the opposing party if a TRO were granted, and considers
the public interest in granting or denying a TRO.
See id. A TRO “‘is an
extraordinary and drastic remedy, one that should not be
granted unless the mo-vant, by a clear showing,
carries the burden of persuasion.'” See
Goodman v. Ill. Dep't of Fin. &
Prof'l Regulation, 430 F.3d 432, 437 (7th Cir. 2005)
(quoting Mazurek v. Armstrong, 520 U.S. 968, 972
the relevant factors, the Court concludes that Plaintiffs
have not met their threshold burden for obtaining a TRO. To
be sure, Plaintiffs have demonstrated a reasonable likelihood
of success on the merits-because of Hooks's default, the
Complaint's allegations are taken as true: Hooks is bound
by the collective bargaining agreements and Trust Agreements;
Hooks is required to make contributions to the Funds on
behalf of its employees under the terms of those agreements;
and Hooks has failed to make timely contributions.
Plaintiffs stumble on the remainder of their threshold
burden. Plaintiffs argue they will suffer irreparable harm
and have no adequate remedy at law because Hooks
“already faces considerable liability and yet [Hooks]
continues to operate without meeting its contribution
obligations to Plaintiffs.” (Pls.' Mem. 6, ECF
No. 14.) They further assert “[it] is almost
certain that, without the injunctive relief requested here,
the currently ongoing failure to comply with the CBA's
fringe benefit contribution obligations will persist and
reach a point where [Hooks] will never be able to remedy its
delinquency as [Hooks] is already indebted to another set of
cement masons benefit funds . . . in excess of [$100,
000.]” (Id. (emphasis omitted).) The failure
to collect fringe benefit contributions, according to
Plaintiffs, would have adverse effects on the Funds because
participants “will either never obtain health insurance
coverage or their health insurance will terminate” and
the Funds “will suffer lost investment opportunities on
unpaid contributions.” (Pls.' Mem. 7, ECF No.
14.) Plaintiffs further argue that they “and plan
participants will be irreparably harmed if [Hooks] continues
to operate, because the amount owed to the Plaintiffs may
become uncollectable.” (Pls.' Mem. 2, ECF No.
request a TRO that, among other things, (1) requires Hooks to
pay immediately all past due contributions and to pay all
contributions that accrue; (2) prohibits Hooks from
dissipating or transferring any corporate assets, except in
the normal course of business; (3) enjoins Hooks from
violating the terms of its collective bargaining and Trust
agreements by failing to make payments to the Funds; (4)
directs Hooks to cease operations until it begins making
contributions to the Funds; and (5) requires Hooks to produce
records for an audit to determine its liability to the Funds.
(Pls.' Mem. 12-13, ECF No. 14.) The matter of an
audit was addressed by the Magistrate Judge's September
26, 2018 Order (ECF No. 12), giving Hooks 30 days
within which to permit an audit of their books and records
for March 1, 2018 through the present. That thirty-day time
period has not yet run. Any failure to comply with that order
may result in an order to show cause why Hooks should not be
held in contempt.
if [the moving party] will suffer irreparable harm . . . can
he get a preliminary injunction [or TRO].” Roland
Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 386
(7th Cir. 1984). But “[w]here the only remedy sought at
trial is damages, the two requirements-irreparable harm, and
no adequate remedy at law-merge.” Id. In that
case, the question becomes “whether the [moving party]
will be made whole if he prevails on the merits and is
awarded damages.” Id. The moving party is not
required to show that a damages award at the end of trial
will be “wholly ineffectual, ” but rather, that
it would be “seriously deficient as a remedy for the
harm suffered.” Id. Moreover, demonstrating
that irreparable injury is “possible” is not
sufficient; the party seeking relief must show that
“irreparable injury is likely in the absence
of [a TRO].” Winter v. Nat. Res. Def. Council,
Inc., 555 U.S. 7, 22 (2008) (emphasis in original).
argue that other courts have found irreparable harm and an
inadequate remedy at law where employers “operat[e]
with significant ERISA debts, and no reasonable prospect of
financial ability to address those debts . . . .”
(Pls.' Mem. 7, ECF No. 14.) The only in-circuit
authority upon which Plaintiffs rely in making this argument
is Gould v. Lambert Excavating, Inc., where the
district court entered a preliminary injunction against an
employer that violated ERISA by failing to make contributions
to employee benefit funds. 870 F.2d 1214, 1217 (7th Cir.
1989). The district court had found that the employer's
failure to make its required contributions jeopardized the
actuarial soundness of the funds, and the employer did not
challenge that finding on appeal. Id. at 1217-18,
1222. Although the district court had erred in concluding
that injunctive relief was available under ERISA absent a
showing of irreparable harm, the Seventh Circuit held that
the error was harmless because the district court had found
that the funds' actuarial soundness was being
jeopardized, which was sufficient to show irreparable harm.
Id. at 1221-22.
contrast with Gould, Plaintiffs have not offered
evidence that the actuarial soundness of the Funds is
jeopardized by Hooks's failure to make contributions.
That is a “material distinction” from the record
in Gould and closely aligns this case with Avila
v. Bronger Masonry, Inc., 123 F.Supp.3d 1088, 1097-99
(S.D. Ind. 2015), where the district court denied a motion
for preliminary injunction because the plaintiff funds failed
to show irreparable harm for which there is an inadequate
remedy at law. And like the plaintiff funds in
Avila, Plaintiffs here have offered no evidence that
Hooks has stopped performing work-to the contrary, they
request the Court to order Hooks to “cease
operations” until they begin making contribution
payments. Nor have Plaintiffs presented any evidence that
Hooks is dissipating or transferring assets to evade the
money judgment that Plaintiffs are likely to obtain.
based “on information and belief, ” Plaintiffs
assert that Hooks “is in difficult financial straits,
” because it owes the Cement Masons 502 Funds over
$100, 000 (Pls.' Mot. 4, ECF No. 13; Pls.'
Mem. 3, ECF No. 14; Feola Suppl. Decl. 2-3, ECF
No. 13-8; Feola Decl. 3, ECF No. 14-9), and
“may be indebted to” a third employee benefit
fund for just under $30, 000 (Pls.' Mot. 4, ECF No.
13; Pls.' Mem. 3-4, ECF No. 14; Constr.
Workers Pension Tr. Fund Lake Cty. & Vicinity v. Hooks,
AV, LLC, No. 1:18-cv-00068, Compl. (N.D. Ill. Jan. 4,
2018), ECF No. 13-19.) Plaintiffs have presented
evidence of significant amounts owed by Hooks. While Hooks
has not established the ability to pay all amounts due,
Plaintiffs have presented no evidence of Hooks's
inability to pay those amounts, even assuming that
Hooks's debt will increase as it continues to operate.
Plaintiffs cannot demonstrate irreparable injury based on
mere speculation or the possibility that Hooks will not be
able to pay the amounts owed to the Funds. Winter,
555 U.S. at 22 (the party seeking injunctive relief must show
that “irreparable injury is likely in the
absence of [a TRO]”) (emphasis in original).
Plaintiffs are likely to succeed on the merits, the Court
finds that they have not shown that they will suffer
irreparable harm and they have no adequate remedy at law
without a TRO. As a result, they have not met their threshold
burden for obtaining a ...