Frankl v. HTH Corp.

• Decision Date: 29 November 2011
• Docket Number: No. CIV. 10–00014JMS/RLP.,CIV. 10–00014JMS/RLP.
• Citation: 832 F.Supp.2d 1179
• Parties: Joseph F. FRANKL, Regional Director of Region 20 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner, v. HTH CORPORATION, Pacific Beach Corporation and Koa Management, LLC, A Single Employer, d/b/a Pacific Beach Hotel, Respondents.
• Court: U.S. District Court — District of Hawaii

832 F.Supp.2d 1179

Joseph F. FRANKL, Regional Director of Region 20 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner,

v.HTH CORPORATION, Pacific Beach Corporation and Koa Management, LLC, A Single Employer, d/b/a Pacific Beach Hotel, Respondents.

No. CIV. 10–00014JMS/RLP.

United States District Court,

D. Hawai‘i.

Nov. 29, 2011.

Dale K. Yashiki, Thomas W. Cestare, Trent K. Kakuda, National Labor Relations Board, Honolulu, HI, Jill H. Coffman, Olivia Garcia, National Labor Relations Board, San Francisco, CA, for Petitioner.

Ryan E. Sanada, Wesley M. Fujimoto, Imanaka Kudo & Fujimoto LLC, Honolulu, HI, for Respondents.

ORDER GRANTING IN PART AND DENYING IN PART PETITIONER'S AMENDED MOTION FOR ADJUDICATION AND ORDER IN CIVIL CONTEMPT AND FOR COMPENSATORY RELIEF

J. MICHAEL SEABRIGHT, District Judge.

I. INTRODUCTION

For nearly a decade, Waikiki's Pacific Beach Hotel (the “Hotel”) has repeatedly ignored its responsibilities to comply with the National Labor Relations Act (“NLRA” or the “Act”). Petitioner Joseph F. Frankl ¹ (“Petitioner”), Director of Region 20 of the National Labor Relations Board (the “Board”), has filed numerous complaints asserting that HTH Corp. (“HTH”), Pacific Beach Corp. (“PBC”), and Koa Management, LLC (“Koa”) d/b/a/ the Hotel (collectively, “Respondents”) have engaged in a litany of violations of the Act—for meddling with, failing to recognize, and refusing to negotiate with the International Longshore and Warehouse Union, Local 142, AFL–CIO (the “Union”). Despite numerous orders finding that the Hotel has violated the Act, the National Labor Relations Board (the “Board”) asserts that Respondents continue to flout their duties, including by ignoring this court's March 29, 2010 Injunction requiring them to comply with the Act. The Board argues, and the court agrees, that sanctions are appropriate.

The March 29, 2010 Injunction stemmed from Petitioner's allegations that Respondents had committed various NLRA violations, which was pending before the Board when Petitioner sought interim injunctive relief from this court pursuant to § 10(j) of the NLRA, 29 U.S.C. § 160(j) (referred to herein as “§ 10(j)”). On March 29, 2010, the court found that the Board would likely determine, and be affirmed by the Ninth Circuit, that Respondents engaged in a number of violations of the NLRA and that injunctive relief was necessary to prevent irreparable harm to Respondents' employees and the Union (the “March 29, 2010 Injunction”). The March 29, 2010 Injunction therefore required Respondents to, among other things, recognize the Union, bargain in good faith with the Union, reinstate several employees, and rescind unilateral changes made to the terms and conditions of employment. See Norelli v. HTH Corp., 699 F.Supp.2d 1176 (D.Haw.2010). On June 14, 2011, the Board largely affirmed the ALJ Decision, see HTH Corp., 356 NLRB No. 182, 2011 WL 2414720 (June 14, 2011), and on July 13, 2011, Ninth Circuit affirmed this court's § 10(j) injunction. Frankl v. HTH Corp., 650 F.3d 1334 (9th Cir.2011).

According to Petitioner, Respondents, along with Robert Minicola (“Minicola”), HTH's Regional Vice President and the Hotel's acting general manager and human resources manager, have violated numerous provisions of the court's March 29, 2010 Injunction. Although coercive contempt is not available in light of the Board's June 14, 2011 Decision, Petitioner argues that compensatory contempt sanctions are appropriate. Based on the following, the court GRANTS in part and DENIES in part Petitioner's Motion.

II. BACKGROUND²

Since the beginning of its drive to organize the Hotel's employees in 2002, the Union has faced opposition from Respondents. A July 31, 2002 election was overturned by the Board due to Respondents' coercive interrogation of employees and maintenance of an overly broad no-solicitation policy. HTH Corp., 342 NLRB 372 (2004). In a second election on August 24, 2004, Respondents challenged several ballots, resulting in the Board ordering those ballots to be counted and the Union winning the election by one vote. Pacific Beach Corp., 344 NLRB 1160 (2005). On August 15, 2005, the Regional Director issued a certificate of representation in favor of the Union.

After the Union was certified, Respondents continued their campaign to derail the Union, forcing Petitioner to file Complaints against Respondents from 2007 through 2008, which resulted in a September 30, 2009 decision by Administrative Law Judge (“ALJ”) James M. Kennedy finding that Respondents had committed numerous NLRA violations, followed by a June 14, 2011 affirmance by the Board. See HTH Corp., 2009 WL 3147894 (NLRB Sept. 30, 2009). While waiting for the Board decision, Petitioner filed a Petition for § 10(j) relief, which resulted in the March 29, 2010 Injunction. See Norelli, 699 F.Supp.2d at 1176.

The March 29, 2010 Injunction, attached as an Appendix to this Order, required Respondents to cease and desist from (1) withdrawing recognition of the Union; (2) refusing to bargain in good faith with the Union with respect to rates of pay, hours of employment and other terms and conditions for bargaining unit employees; (3) discharging employees in order to discourage Union activities and membership; (4) unilaterally changing the terms and conditions of employment of bargaining unit employees without first giving notice to, and bargaining with, the Union; and (5) in any other manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by the NLRA. The March 29, 2010 Injunction further required Respondents to, among other things, (1) recognize and bargain in good faith with the Union with respect to rates of pay, hours of work and other terms and conditions of employment covering bargaining unit employees; (2) resume contract negotiations and honor all tentative agreements entered into from the point that negotiations were left off on November 30, 2007; (3) reinstate several employees, including, in particular, Rhandy Villanueva; and (4) rescind, at the Union's request, any or all of the unilateral changes to bargaining unit employees' terms and conditions of employment as they existed prior to December 1, 2007.

After the March 29, 2010 Injunction, Petitioner filed a new Complaint against Respondents with the NLRB, and also sought in this court contempt sanctions (the subject of this order) and another § 10(j) injunction (the subject of a separate order, see Frankl v. HTH Corp., Civ. No. 11–00451 JMS/RLP). Given the substantial overlap in factual issues between the contempt and § 10(j) issues, the parties agreed to delay full briefing on the contempt motion until trial transcripts in the NLRB action were completed.

In the meantime, however, on June 14, 2011, the Board largely affirmed the ALJ Decision, see HTH Corp., 356 NLRB No. 182, which resulted in Petitioner withdrawing its original Motion for Contempt filed in this action—the request for coercive sanctions was mooted by the Board decision. On July 13, 2011, the Ninth Circuit affirmed the court's § 10(j) injunction. Frankl, 650 F.3d at 1334.

On July 8, 2011, Petitioner filed his Amended Motion for Adjudication and Order in Civil Contempt and for Compensatory Relief. On September 13, 2011, ALJ John J. McCarrick, after hearing sixteen days of testimony, issued a Decision finding that Respondents committed various violations of the NLRA (the same subject matter as the contempt issues in this action). Respondents filed their Opposition to the Amended Motion for Contempt on September 19, 2011, and Petitioner filed his Reply on October 3, 2011. A hearing was held on October 31, 2011.

III. STANDARD OF REVIEW

Civil contempt “consists of a party's disobedience to a specific and definite court order by failure to take all reasonable steps within the party's power to comply.” Reno Air Racing Ass'n v. McCord, 452 F.3d 1126, 1130 (9th Cir.2006) (quoting In re Dual–Deck Video Cassette Recorder Antitrust Litig., 10 F.3d 693, 695 (9th Cir.1993)). Although the contempt “need not be willful, [ ] a person should not be held in contempt if his action appears to be based on a good faith and reasonable interpretation of the court's order.” Id. (quoting In re Dual–Deck Video Cassette Recorder Antitrust Litig., 10 F.3d at 695);see also Boink Systems, Inc. v. Las Vegas Sands Corp., 2011 WL 3419438, at *3 (D.Nev. Aug. 3, 2011) (“A few technical violations do not vitiate substantial compliance if a party has made reasonable efforts to comply.” (citations omitted)). Further, substantial compliance with the court order is a defense to civil contempt. In re Dual–Deck Video Cassette Recorder Antitrust Litig., 10 F.3d at 695.

The party claiming civil contempt must demonstrate a violation of the court's order by clear and convincing evidence. Id. Accordingly, the moving party must establish that “(1) that [the alleged contemnor] violated the court order, (2) beyond substantial compliance, (3) not based on a good faith and reasonable interpretation of the order, (4) by clear and convincing evidence.” United States v. Bright, 596 F.3d 683, 694 (9th Cir.2010) (quoting Labor/Cmty. Strategy Ctr. v. L.A. County Metro. Trans. Auth., 564 F.3d 1115, 1123 (9th Cir.2009)); see also F.T.C. v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir.1999) (“The standard for finding a party in civil contempt is well settled: The moving party has the burden of showing by clear and convincing evidence that the contemnors violated a specific and definite order of the court.”).

If the moving party meets this initial four-part test, the burden then shifts to the alleged contemnor to demonstrate why it was unable to comply. Affordable Media, LLC, 179 F.3d at 1239;Stone v. City & Cnty. of San Francisco, 968 F.2d 850, 856 n. 9 (9th Cir.1992). In other words, the accused party must “show [that it] took every reasonable step to comply.” Stone, 968...