United Here Health et al v. Tinoco's Kitchen et al, No. 2:2011cv02025 - Document 34 (D. Nev. 2012)
Court Description: ORDER Denying 8 Defendants Tinoco's Kitchen, LLC and Enrique Tinoco's Motion to Dismiss; Granting 27 Plaintiffs' Motion for Leave to File First Amended Complaint; Granting 28 Plaintiffs' Motion for Preliminary Injunction. Signed by Judge Miranda M. Du on 11/13/2012. (Copies have been distributed pursuant to the NEF - SLD)
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United Here Health et al v. Tinoco&#039;s Kitchen et al Doc. 34 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 *** 9 UNITED HERE HEALTH, et. al., Plaintiffs, 10 ORDER v. 11 12 Case No. 2:11-cv-02025-MMD-GWF TINOCO’S KITCHEN, LLC, et. al., Defendants. 13 (Defs.’ Motion to Dismiss – dkt. no. 8; Plfs.’ Motion for Leave to Amend – dkt. no. 27; Plfs.’ Motion for Preliminary Injunction – dkt. no. 28). 14 15 I. SUMMARY 16 Before the Court are Defendant Tinoco’s Kitchen, LLC and Enrique Tinoco’s 17 Motion to Dismiss (dkt. no. 8) as well as Plaintiffs United Here Health and Southern 18 Nevada Culinary and Bartenders Pension Trust Fund’s Motions for Leave to Amend (dkt. 19 no. 27) and Preliminary Injunction (dkt. no. 28). After considering the briefings in these 20 motions, the Court denies Defendants’ Motion, and grants Plaintiffs’ request for a 21 preliminary injunction. 22 II. BACKGROUND 23 Plaintiffs United Here Health (formerly the HEREIU Welfare Fund) and the 24 Southern Nevada Culinary and Bartenders Pension Trust Fund (collectively “Trustees”) 25 are express trusts created pursuant to Section 302 of the Labor Management Relations 26 Act of 1947 (“LMRA”) by written declarations of trust (“Trust Agreements”) between the 27 Culinary Workers Union, Local 226 and Bartenders Union, Local 165 (collectively “the 28 Unions”) and various employers and employer associations in the hotel-casino and Dockets.Justia.com 1 entertainment industries. The Unions are labor organizations representing employees in 2 these industries in Southern Nevada. 3 Defendant PlayLV Gaming Operations, LLC (“PlayLV”) is the parent company of 4 Las Vegas Club Hotel & Casino, LLC (“LVC”) and operates and manages three gaming 5 and hotel properties in Clark County, Nevada: the Las Vegas Club Hotel and Casino, the 6 Plaza Hotel and Casino (“Plaza”), and the Western Hotel and Casino. According to 7 Trustees, PlayLV is the managing member of each of the hotel and casinos, and controls 8 and directs each. Trustees further allege that PlayLV controls all financial aspects of 9 LVC and Plaza. 10 Defendant Tinoco’s Kitchen, LLC (“Tinoco’s”) is a Nevada limited liability company 11 formerly doing business inside the Las Vegas Club Hotel & Casino, and is operated by 12 Defendant Enrique Tinoco (“Enrique”). 13 executed a sublease for restaurant space inside LVC. (Dkt. no. 10 at ¶ 7.) On or about January 22, 2009, Tinoco’s 14 In their Complaint, Trustees allege that LVC breached its Collective Bargaining 15 Agreement (“CBA”) between LVC and the Unions, as well as the Trust Agreement that 16 created the trusts. 17 Agreement (“MOA”) between LVC and the Unions wherein the parties agreed, among 18 other conditions, that the employees employed in culinary and bartender positions at 19 Tinoco’s are included within the Unions’ bargaining unit, retain the same fringe benefit 20 contributions as collectively bargained with other unit employees, and that wage payroll 21 functions are transferred to Tinoco’s, including paying benefit fund contributions for 22 hours worked by Tinoco’s employees. (Dkt. no. 1 at ¶ 13.) Trustees further allege that 23 LVC has performed all wage and payroll functions on behalf of Tinoco’s. Further, Trustees allege that LVC executed a Memorandum of 24 A payroll compliance audit conducted of Tinoco’s payroll for the period between 25 January 23, 2009, through December 31, 2010, discovered that Tinoco’s and LVC had 26 failed to report all hours of covered labor performed by Tinco’s culinary and bartender 27 employees as required by their collective bargaining agreement, MOA, and Trust 28 /// 2 1 Agreements. (See dkt. no. 1 at ¶ 16.) This resulted in a failure to pay owed fringe 2 benefit contributions to the trusts. (Id.) 3 On December 16, 2011, Trustees filed the Complaint in this action alleging that 4 LVC failed to provide timely monthly reports of Tinoco’s culinary and bartender 5 employees as required by their CBA, MOA, and Trust Agreements, as well as failed to 6 pay fringe benefit contributions to the trust plans on a monthly basis. (See dkt. no. 1 at ¶ 7 15.) Trustees’ Complaint seeks compensatory and injunctive relief for alleged breach of 8 contract and breach of fiduciary duty claims under the Employee Retirement Income 9 Security Act of 1974 (“ERISA”). 10 III. DISCUSSION 11 A. Defendants’ Motion to Dismiss (dkt. no. 8) 12 Defendants Tinoco’s and Enrique (collectively “Tinoco’s Defendants”) bring this 13 Motion to Dismiss arguing that this action should be dismissed for lack of subject matter 14 jurisdiction and failure to state a claim upon which relief can be granted. See Fed. R. 15 Civ. P. 12(b)(1) & (6). Tinoco’s Defendants argue that since no binding contract existed 16 between Trustees and themselves, no ERISA claims can be lodged against them and no 17 federal jurisdiction is present to try this action. 1. 18 Legal Standard 19 A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which 20 relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide 21 “a short and plain statement of the claim showing that the pleader is entitled to relief.” 22 Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While 23 Rule 8 does not require detailed factual allegations, it demands more than “labels and 24 conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. 25 Iqbal, 556 US 662, 678 (2009) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). 26 “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 27 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient 28 /// 3 1 factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 2 678 (internal citation omitted). 3 In Iqbal, the Supreme Court clarified the two-step approach district courts are to 4 apply when considering motions to dismiss. First, a district court must accept as true all 5 well-pled factual allegations in the complaint; however, legal conclusions are not entitled 6 to the assumption of truth. Id. at 679. Mere recitals of the elements of a cause of action, 7 supported only by conclusory statements, do not suffice. Id. at 678. Second, a district 8 court must consider whether the factual allegations in the complaint allege a plausible 9 claim for relief. Id. at 679. A claim is facially plausible when the plaintiff’s complaint 10 alleges facts that allow a court to draw a reasonable inference that the defendant is 11 liable for the alleged misconduct. Id. at 678. Where the complaint does not permit the 12 court to infer more than the mere possibility of misconduct, the complaint has “alleged– 13 but not shown–that the pleader is entitled to relief.” Id. at 679 (internal quotation marks 14 omitted). When the claims in a complaint have not crossed the line from conceivable to 15 plausible, the complaint must be dismissed. Twombly, 550 U.S. at 570. 16 A complaint must contain either direct or inferential allegations concerning “all the 17 material elements necessary to sustain recovery under some viable legal theory.” 18 Twombly, 550 U.S. at 562 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 19 1106 (7th Cir. 1989) (emphasis in original)). 20 21 2. Analysis a. Subject matter jurisdiction 22 Tinoco’s Defendants claim that the Court lacks jurisdiction to hear this suit 23 because no binding contract between themselves and Trustees exists. This argument 24 fails, but not because Tinoco’s Defendants are incorrect on the merits of their Motion. 25 As the Ninth Circuit has recognized in another ERISA case, the sometimes confusing 26 distinction between dismissal for want of jurisdiction and dismissal for failure to state a 27 claim “has bedeviled the courts of appeals” among the courts. See Trs. of Screen Actors 28 Guild-Producers Pension and Health Plans v. NYCA, Inc., 572 F.3d 771, 775 (9th Cir. 4 1 2009). Thus, the question in NYCA, Inc. 2 agreement is liable for unpaid contributions 3 claim, not a jurisdictional one. Id. There, the court noted that “[i]t is a cardinal principle 4 of federal ‘arising under’ jurisdiction that any non-frivolous assertion of a federal claim 5 suffices to establish federal question jurisdiction, even if that claim is later dismissed on 6 the merits.” Id. (quoting Cement Masons Health & Welfare Trust Fund for N. Cal. v. 7 Stone, 197 F.3d 1003, 1008 (9th Cir. 1999)). Since Trustees’ claims are not frivolous, 8 jurisdiction under 29 U.S.C. § 185(a) and 29 U.S.C. § 1145(e) exists to hear this action. 9 See 29 U.S.C. § 1145(e) (“[T]he district courts of the United States shall have exclusive 10 jurisdiction of civil actions under this subchapter brought by the Secretary or by a 11 participant, beneficiary, fiduciary, or any person referred to in section 1021(f)(1) of this 12 title.”); 29 U.S.C. § 185(a) (“Suits for violation of contracts between an employer and a 13 labor organization representing employees in an industry affecting commerce as defined 14 in this chapter, or between any such labor organizations, may be brought in any district 15 court of the United States having jurisdiction of the parties, . . . .”); see also Local 159, 16 342, 343 & 444 v. Nor-Cal Plumbing, Inc., 185 F.3d 978, 984 (9th Cir. 1999) (noting that 17 although ERISA does not provide a source of jurisdiction for ERISA trust plans to sue as 18 plaintiffs, 29 U.S.C. § 185 confers subject matter jurisdiction over the trust plan’s action 19 and that this grant of jurisdiction covers disputes over the recovery of fringe benefits 20 under collective bargaining agreements). 21 22 b. whether a non-party to a collective bargaining is a question on the merits of an ERISA Failure to state a claim Tinoco’s Defendants’ Rule 12(b)(6) arguments also fail. The mere fact that 23 Tinoco’s is not in privity of contract with Trustees does not defeat an ERISA claim. The 24 LMRA requires that payments to a trust fund be made pursuant to a “written agreement 25 with the employer.” 29 U.S.C. § 186(c)(5)(B). Courts have held that such an agreement 26 need not be signed, but need only be written and need only “set forth a detailed basis on 27 which payments are to be made to a trust fund.” See, e.g., Brown v. C. Volante Corp., 28 194 F.3d 351, 355 (2d Cir. 1999) (quoting id.); Moriarty v. Larry G. Lewis Funeral Dirs. 5 1 Ltd., 150 F.3d 773, 777 (7th Cir. 1998) (“Both § 302(c)(5)(B) and general principles of 2 contract law permit an employer to adopt a collective bargaining agreement by a course 3 of conduct plus a writing . . . .”). 4 Accordingly, whether a formal contract exists between Tinoco’s Defendants and 5 Trustees is of little importance, so long as a writing exists that details how payments are 6 to be made, and some conduct manifesting adoption of a collective bargaining 7 agreement. See S. Cal. Painters & Allied Trade Dist. Council. No. 36 v. Best Interiors, 8 Inc., 359 F.3d 1127, 1133 (9th Cir. 2004) (“To determine whether a party has adopted a 9 contract by its conduct, the relevant inquiry is whether the party has displayed conduct 10 manifesting an intention to abide by the terms of the agreement.”). 11 sufficiently alleged in their Complaint that Tinoco’s Defendants were under an obligation 12 to report and pay contributions of fringe benefits to their unionized employees. Trustees 13 first allege that the MOA includes a provision that bartender and culinary employees 14 employed at Tinoco’s are included in the bargaining unit of the Unions and subject to the 15 collective bargaining agreement. This allegation suffices to demonstrate that a writing 16 exists binding Tinoco’s Defendants to the terms of the CBA. 17 Defendants payment 18 contributions demonstrates at least a plausible claim that Tinoco’s Defendants adopted 19 the labor agreements signed between Trustees and LVC, PlayLV, and Plaza. As such, 20 the Motion is denied. 21 Tinoco’s or the Guarantee executed by Enrique Tinoco, which itself settles any question 22 over whether Tinoco’s Defendants were under a contractual obligation to abide by the 23 terms of the CBA and MOA. 24 albeit allegedly late and insufficient payments Trustees have Further, Tinoco’s of fringe benefit The Court need not consider the sublease entered into by 25 Plaintiffs’ Motion for Leave to File First Amended Complaint (dkt. no. 27) 26 Trustees seek leave to file a First Amended Complaint (“FAC”) to (1) add a 27 defendant, Plaza Hotel & Casino, LLC, whose sole operator, PlayLV, is a defendant to 28 this suit, (2) update several factual allegations, (3) update their requests for relief, and B. 6 1 (4) add a reference to the bankruptcy filing of Tinoco’s Kitchen. Defendants did not file 2 an Opposition to the Motion. 3 1. Legal standard 4 Under Fed. R. Civ. P. 15, a party may amend its complaint only by leave of the 5 court once responsive pleadings have been filed and in the absence of the adverse 6 party’s written consent. Thornton v. McClatchy Newspapers, Inc., 261 F.3d 789, 799 7 (9th Cir. 2001). The court has discretion to grant leave and should freely do so “when 8 justice so requires.” Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) 9 (quoting Fed. R. Civ. P. 15(a)). Nonetheless, courts may deny leave to amend if (1) it 10 will cause undue delay; (2) cause undue prejudice to the opposing party; (3) the request 11 is made in bad faith; (4) the party has repeatedly failed to cure deficiencies; or (5) the 12 amendment would be futile. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 13 (9th Cir. 2008). 14 2. Analysis 15 No circumstances exist to deny Trustee’s leave to amend their Complaint. First, 16 filing the FAC would not create undue delay in the proceedings, since the added 17 defendant’s sole operator, PlayLV, is already a defendant to this suit. No serious delay 18 in service or preparation would result from Plaza’s addition to the suit, or from the 19 additional information in the Amended Complaint. Second, no opposing party would be 20 prejudiced by the new defendant or the information added, as they were or should have 21 been aware of these new allegations as well as the involvement of Plaza in the lawsuit. 22 Third, no indication of bad faith exists in Trustee’s request to amend. 23 amendments to the Complaint would not be futile, as Trustees have demonstrated that 24 Plaza may be enjoined alongside the other defendants for violations of the labor 25 agreements. Fifth, and perhaps most importantly, Defendants’ failure to oppose the 26 Motion constitutes consent to its granting. 27 Trustee’s Motion for Leave is granted. 28 /// 7 See Local Rule 7-2(d). Fourth, the Accordingly, Trustee’s Motion for Preliminary Injunction (dkt. no. 28) 1 C. 2 Trustees bring this Motion seeking a court order mandating Defendants comply 3 with the terms of collective bargaining agreements signed between Defendants and the 4 Unions by curing prior delinquencies and ordering Defendants to comply with these 5 terms into the future. Trustees allege that Defendants Plaza, LVC, and PlayLV have not 6 submitted one payment in a timely manner since December 16, 2011, and as a result 7 accrued large delinquencies that they have been unwilling to cure. 1. 8 Legal Standard 9 Federal Rule of Civil Procedure 65 governs the issuance of preliminary 10 injunctions. A preliminary injunction may be issued if a plaintiff establishes: (1) likelihood 11 of success on the merits; (2) likelihood of irreparable harm in the absence of preliminary 12 relief; (3) that the balance of equities tips in his favor; and (4) that an injunction is in the 13 public interest. 14 “Injunctive relief [is] an extraordinary remedy that may only be awarded upon a clear 15 showing that the plaintiff is entitled to such relief.” Id. at 22. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). 16 The Ninth Circuit has held that “‘serious questions going to the merits’ and a 17 hardship balance that tips sharply toward the plaintiff can support issuance of an 18 injunction, assuming the other two elements of the Winter test are also met.” Alliance for 19 the Wild Rockies v. Cottrell, 632 F.3d 1127, 1132 (9th Cir. 2011). “In deciding a motion 20 for a preliminary injunction, the district court ‘is not bound to decide doubtful and difficult 21 questions of law or disputed questions of fact.’” Int’l. Molders’ & Allied Workers’ Local 22 Union No. 164, 799 F.2d 547, 551 (9th Cir. 1986) (quoting Dymo Indus., Inc. v. 23 Tapeprinter, Inc., 326 F.2d 141, 143 (9th Cir. 1964)). 24 “The urgency of obtaining a preliminary injunction necessitates a prompt 25 determination and makes it difficult to obtain affidavits from persons who would be 26 competent to testify at trial. The trial court may give even inadmissible evidence some 27 weight, when to do so serves the purpose of preventing irreparable harm before trial.” 28 /// 8 1 Flynt Distrib. Co., Inc. v. Harvey, 734 F.2d 1389, 1394 (9th Cir. 1984) (citing 11 C. Wright 2 and A. Miller, Federal Practice and Procedure, Civil, § 2949 at 471 (1973)). 2. 3 Analysis 4 ERISA is a comprehensive and remedial statute designed to promote and protect 5 the interests of participants and their beneficiaries in employee benefit plans. Shaw v. 6 Delta Air Lines, Inc., 463 U.S. 85, 90 (1983); Nachman Corp. v. Pension Benefit Guar. 7 Corp., 446 U.S. 359, 361-62 (1980). 8 Defendants,1 are employers within the meaning of ERISA. See 29 U.S.C. § 1002(5). 9 Under ERISA, Defendants, with the exception of Tinoco’s 12 [e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement. 13 29 U.S.C. § 1145. Here, as detailed above, the record demonstrates that the Unions 14 entered into a collective bargaining agreement with Defendant LVC, who agreed to the 15 terms and conditions of the Trust Agreements, and executed the MOA. Defendants 16 Plaza, LVC, and PlayLV are obligated through these agreements to report the identities 17 and hours worked of Tinoco’s employees on a monthly basis, and to use that information 18 to provide monthly contributions to the Trusts for fringe benefits. 10 11 19 When an employer fails to make such contributions, ERISA provides that the 20 fiduciary for a plan 21 award for the plan consisting of: 22 23 24 25 26 27 28 in this case Trustees may bring an action and obtain a mandatory (A) the unpaid contributions, (B) interest on the unpaid contributions, (C) an amount equal to the greater of (i) interest on the unpaid contributions, or (ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A), (D) reasonable attorney’s fees and costs of the action, to be paid by the defendant, and Trustees do not seek a preliminary injunction against Tinoco’s Defendants. 1 9 (E) such other legal or equitable relief as the court deems appropriate. 1 2 29 U.S.C. § 1132(g)(2). In addition to the remedies available under ERISA, a benefit 3 trust fund may, as a third-party beneficiary, recover for breach of a collective bargaining 4 agreement under 29 U.S.C. § 185(a). See Hudson Cnty. Carpenters Union Local Union 5 No. 6. v. V.S.R. Constr. Corp., 127 F.Supp.2d 565, 568 (D.N.J. 2000) (“It is 6 well-established that the failure to make contributions to a union trust fund as required by 7 a collective bargaining agreement constitutes a violation of ERISA § 515 and a violation 8 of [29 U.S.C. § 185].”); Bugher v. Feightner, 722 F.2d 1356, 1357-60 (7th Cir. 1983) 9 (explaining that ERISA remedies are intended to supplement rather than supersede 10 rights existing under 29 U.S.C. § 185(a)). 11 Further, ERISA provides that an action may be brought “by a participant, 12 beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of 13 this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief 14 (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the 15 terms of the plan.” 16 injunctive relief “to enjoin a recalcitrant employer from failing to comply with the benefit 17 payment provisions of a labor agreement.” Laborers Fringe Ben. Funds v. Nw. Concrete 18 & Constr., Inc., 640 F.2d 1350, 1351-52 (6th Cir.1981) (per curiam). 19 28 U.S.C. § 1132(a)(3). a. ERISA permits a court to grant such Likelihood of success on the merits 20 Plaintiffs have met their burden of demonstrating a likelihood of success on the 21 merits. Defendants effectively concede that they have not made the required 22 contributions in accordance with the terms and conditions of the various labor 23 agreements effective here. Defendants only oppose the Motion on the grounds that (1) 24 the Plaza is not a party to the litigation; (2) the Motion violates the automatic stay in the 25 Tinoco’s Kitchen bankruptcy; (3) Defendants have complied with the CBA because they 26 have been submitting reports in a timely manner; and (4) no threat of irreparable harm 27 exists for failure to provide payments in a timely manner. These arguments fail. 28 /// 10 1 First, by virtue of the Court’s ruling on Trustee’s Motion for Leave to Amend, 2 Plaza is a proper party to the suit, and subject to any injunction issued by the Court. 3 Second, Trustees do not seek an injunction against Tinoco’s Defendants, and thus are 4 not violating the automatic stay involved in the bankruptcy petition. Third, the fact that 5 the reports were timely delivered does not cure the deficiencies in benefit payments. 6 Fourth, irreparable harm does exist notwithstanding what appears only to be a monetary 7 loss that Trustees seek to remedy, as explained below. 8 b. Likelihood of irreparable harm 9 While Trustees argue that the traditional requirements of a preliminary injunction 10 do not apply where a statute, such as ERISA, specifically empowers a court to grant 11 injunctive relief, courts nevertheless have applied the traditional elements of a 12 preliminary injunction in cases like this one involving alleged delinquencies in payments 13 of trust obligations under an ERISA plan. See, e.g., Sheet Metal Workers’ Intern. Ass’n, 14 Local 206, of Sheet Metal Workers’ Intern. Ass’n, AFL-CIO v. W. Coast Sheet Metal Co., 15 660 F. Supp. 1500, 1505-06 (9th Cir. 1987); Int’l Res., Inc. v. New York Life Ins. Co., 950 16 F.2d 294, 302 (6th Cir. 1991); Laborers Fringe Ben. Funds, 640 F.2d at 1353; Solis v. 17 Hutcheson, No. 12-236, 2012 WL 2151525, at *5-7 (D. Idaho June 13, 2012). 18 Although purely monetary damages typically cannot sustain a finding of 19 irreparable harm, failure to pay benefits to employees under an obligation in an ERISA 20 plan has been held to constitute irreparable injury due to its non-monetary 21 consequences. See United Steelworkers of Am., AFL-CIO v. Fort Pitt Steel Casting, 598 22 F.2d 1273, 1280 (3d. Cir. 1979) (“[T]he fact that the payment of monies is involved does 23 not automatically preclude a finding of irreparable injury.”); Gould v. Lambert Excavating, 24 Inc., 870 F.2d 1214, 1217-18 (7th Cir. 1989) (affirming preliminary injunction award 25 against employer for failure to make pension fund contributions, noting that “if a pension 26 is making payments without receiving contributions its stability may be jeopardized”); 27 Meehan v. Gristede’s Supermarkets, Inc., No. 95-2104, 1997 WL 1097751, *3 (E.D.N.Y. 28 Sep. 25, 1997) (loss of health insurance benefits may irreparably harm employees and 11 1 their families); Bd. Of Trs. For the Ohio Laborers’ Fringe Benefit Programs v. Savcon, 2 Inc., No. 10-657, 2011 WL 2633184, at *5 (S.D. Ohio July 5, 2011). 3 Here, Alicia Hernandez, accounting manager for the administrator of Southern 4 Nevada Culinary and Bartenders Pension Trust, described in her affidavit how annual 5 audits of the trust fund include actuarial analyses that assume employers will pay 6 monthly contributions in a timely manner. 7 contributions on time places the fund in “a position where is it [sic] required to pay out 8 benefits despite never receiving the contributions to cover those benefits,” which 9 “undermines the actuarial assumptions used to project the financial stability of the Fund 10 and its ability to provide coverage to its participants.” (Id. at ¶ 6.) Given the instability 11 that results from delinquent contributions to fringe benefit plans, Trustees have 12 established a threat of irreparable harm beyond mere monetary losses, since the fiscal 13 and actuarial soundness of their benefits plans are jeopardized by Defendants’ actions. 14 A threatened loss of these crucial insurance benefits suffices to establish a threat of 15 irreparable injury. See Whelan v. Colgan, 602 F.2d 1060, 1062 (2d Cir. 1979) (“[T]he 16 threatened termination of benefits such as medical coverage for workers and their 17 families obviously raised the spectre of irreparable injury.”). (Dkt. no. 31 at ¶ 5.) Failure to pay 18 The threat of irreparable harm is further compounded by the history of judgments 19 by confession entered into by employees associations and Defendant LVC, Plaza, and 20 PlayLV for unpaid contributions. 21 Union Welfare Fund v. Las Vegas Club Hotel & Casino, LLC, No. 11-1176 (D. Nev. July 22 21, 2011) (order granting judgment by confession); The Hotel Emps. And Restaurant 23 Emps. Int’l Union Welfare Fund v. Plaza Hotel & Casino, LLC, No. 11-1176 (D. Nev. 24 Aug. 9, 2012) (same); see also Bd. Of Trs. For the Laborers’ Fringe Benefit Programs, 25 2011 WL 2633184, at *5 (prior history of delinquencies weighed in favor of issuing 26 preliminary injunction). 27 /// 28 /// See The Hotel Emps. And Restaurant Emps. Int’l 12 c. 1 Balance of hardships and public interest 2 The balance of hardships and public interest also favors issuing a preliminary 3 injunction. It is little hardship upon Defendants to be subject to an injunction ordering 4 them to comply with obligations they are already subject to, while Trustees have 5 demonstrated hardship that would result from continued delinquencies by Defendants. 6 The public’s interest in maintaining the integrity of employees’ fringe benefit plans also 7 counsels for a preliminary injunction. Trustees have thus established the requirements 8 for issuance of preliminary relief. 9 IV. 10 11 CONCLUSION Accordingly, IT IS ORDERED THAT Defendants Tinoco’s Kitchen, LLC and Enrique Tinoco’s Motion to Dismiss (dkt. no. 8) is DENIED. 12 IT IS FURTHER ORDERED THAT Plaintiffs United Here Health and Southern 13 Nevada Culinary and Bartenders Pension Trust Fund’s Motion for Leave to Amend (dkt. 14 no. 27) is GRANTED. 15 16 IT IS FURTHER ORDERED THAT Plaintiffs’ Motion for Preliminary Injunction (dkt. no. 28) is GRANTED. 17 Defendants PlayLV, LVC, and Plaza are ordered to cure all outstanding 18 deficiencies in fringe benefits contributions, and to comply with their obligations as set 19 out under the applicable labor and trust agreements between the parties. This includes 20 Defendants’ obligation to report employment data to Trustees on a timely basis, as well 21 as Defendants’ obligations to timely make contributions to their employees’ fringe 22 benefits plans. 23 DATED THIS 13th day of November 2012. 24 25 26 MIRANDA M. DU UNITED STATES DISTRICT JUDGE 27 28 13
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