1

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

ELECTRONIC CITATION: 2003 FED App. 0295P (6th Cir.)

File Name: 03a0295p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

ELECTRICAL WORKERS

PENSION TRUST FUND OF

LOCAL UNION #58, IBEW, et

al.,

Plaintiffs-Appellants,

v.

GARY’S ELECTRIC SERVICE

COMPANY,

Defendant-Appellee.

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No. 01-1864

Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 98-74631—Anna Diggs Taylor, District Judge.

Argued: January 30, 2003

Decided and Filed: August 18, 2003 

Before: BATCHELDER, MOORE, and CLAY, Circuit

Judges.

_________________

COUNSEL

ARGUED: Mark Granzotto, Royal Oak, Michigan, for

Appellant. William L. Hooth, COX, HODGMAN &

2 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

GIARMARCO, Troy, Michigan, for Appellee. ON BRIEF:

Sheldon M. Meizlish, Detroit, Michigan, Rolland R. O’Hare,

SACHS, NUNN, KATES, KADUSHIN, O’HARE,

HELVESTON & WALDMAN, Detroit, Michigan, for

Appellant. William L. Hooth, Ryan Lee Perry, COX,

HODGMAN & GIARMARCO, Troy, Michigan, for

Appellee.

_________________

OPINION

_________________

KAREN NELSON MOORE, Circuit Judge. This dispute

originated when Defendant-Appellee Gary’s Electric Service

Company (“Gary’s Electric”) violated a collective bargaining

agreement’s (“CBA”) fringe benefit provisions and then

failed to honor a request for information from PlaintiffsAppellants Electrical Worker’s Pension Trust Fund of Local

Union #58, International Brotherhood of Electrical Workers,

et al. (“the Funds”) regarding the performance of Gary’s

Electric’s representational duties. The Funds first filed a

grievance with the Labor-Management Committee (“LMC”)

based on Gary’s Electric’s failure to pay fringe benefits,

requesting that the LMC enter an arbitration award ordering

Gary’s Electric to file past-due reports, pay past-due

contributions, and thereafter file and pay contributions as they

became due. After the LMC entered the award, the Funds

filed an action in district court to secure Gary’s Electric’s

compliance with the terms of the award. Upon the Funds’

motion, the district court granted summary judgment in favor

of the Funds. When Gary’s Electric appealed, the appeal was

consolidated with a National Labor Relations Board

(“NLRB”) petition seeking enforcement of an NLRB order

finding that Gary’s Electric engaged in unfair labor practices.

A panel of this court affirmed the district court’s decision and

enforced the NLRB order. See Elec. Workers Local 58
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

3

1

The second letter of assent, signed by Pipia as Gary’s Electric’s

president, took effect on July 29, 1988 and stated that it would remain

effective until terminated by Gary’s Electric supplying NECA and the

Union with written notice at least 150 days prior to the agreement’s

anniversary date. See Elec. Workers Local 58 Pension Trust Fund, 227

F.3d at 650.

Pension Trust Fund v. Gary’s Elec. Serv. Co., 227 F.3d 646

(6th Cir. 2000).

Thereafter, the Funds brought contempt proceedings in the

district court against Gary’s Electric and its owner, Russell

Gary Pipia (“Pipia”), alleging that they continually violated

the terms of the arbitration award. The district court held a

hearing and granted the contempt petition as to Gary’s

Electric but denied it as to Pipia. The district court explained

that, among other reasons, Pipia could not be held in

contempt because he was not an actual defendant in the

action. The Funds then brought this appeal from the portion

of the court’s order denying the contempt petition as to Pipia.

We VACATE the decision of the district court and

REMAND for additional proceedings consistent with this

opinion.

I. BACKGROUND

Gary’s Electric, a Michigan corporation wholly owned by

Pipia, was a small electrical service company with primarily

residential and small-business customers. In 1976, and again

in 1988, Gary’s Electric signed a letter of assent authorizing

the Southeastern Michigan Chapter of the National Electrical

ContractorsAssociation (“NECA”) to be its representative for

all business matters between NECA and the International

Brotherhood of Electrical Workers’ Local Union #58 (“the

Union”).1 Through its representative, NECA, Gary’s Electric

entered into a binding CBA with the Union. This CBA

required participating employers to pay their employees’

4 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

2

The arbitration award specifically ordered Gary’s Electric to remedy

its violation by:

A. Submitting the fringe benefit reports due to the date of this

decision as required by Article VIII of that Agreement, and

B. Immediately paying the amounts shown on those reports as

due, including the liquidated damages due thereon, and

. . .

D. Hereafter, filing all reports and paying all fringe benefit

contributions on a timely basis as required by Article VIII.

Joint Appendix (“J.A.”) at 16 (Compl., Ex. C, Award of the LMC).

3

During the pending appeal, Gary’s Electric neither filed a

supersedeas bond nor stayed the judgment pending appeal. Thus, the

district court “retain[ed] jurisdiction to enforce [its] judgment.” NLRB v.

Cincinnati Bronze, Inc., 829 F.2d 585, 588 (6th Cir. 1987).

fringe benefits — pension, vacation, unemployment, annuity,

and medical — into the Funds.

On August 4, 1998, in accordance with the terms of the

CBA, the Funds made a demand to the LMC for arbitration of

their grievance, charging that Gary’s Electric failed to make

its contractual payments into the Funds and failed to submit

the required fringe benefit reports. A hearing before the LMC

was set for August 20, 1998, and Gary’s Electric was given

notice. On August 25, 1998, the LMC found Gary’s Electric

guilty of the charges in the grievance and ordered Gary’s

Electric to pay the past-due fringe benefit payments, produce

the reports, and make future payments when due.2 An

additional award from the LMC, also dated August 25, 1998,

found Gary’s Electric guilty of failing to secure a surety bond

as required by the CBA.

Almost two months later, after Gary’s Electric failed to

comply with the LMC awards, the Funds filed a complaint in

district court requesting that the court enter a judgment

enforcing the LMC’s awards. On May 18, 1999, the district

court granted the Funds’ motion for summary judgment, and

Gary’s Electric immediately filed an appeal.3 A three-judge
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

5

4

The NLRB’s general counsel brought charges against Gary’s

Electric for failure to provide information relevant to the performance of

its representational duties pursuant to Sections 8(a)(5) and (1) of the

National Labor Relations Act (“NLRA”). The administrative law judge

(“ALJ”) found Gary’s Electric guilty as charged, and then the NLRB

affirmed the ALJ’s decision. The NLRB eventually sought enforcement

of its order, and that action was consolidated with Gary’s Electric’s appeal

from summary judgment in the Funds’ case.

5

Gary’s Electric ceased functioning as an electrical services company

by November 1999, although Pipia and his secretary continued to work

up until January 2000 in order to wind up the business’s affairs.

According to the Funds, Gary’s Electric went out of business on

November 13, 1999.

6

The Funds admit that once these contempt proceedings began,

Gary’s Electric submitted the fringe benefit reports that earlier they were

ordered to produce. These reports showed that between May 8, 1998 and

October 30, 1999, Gary’s Electric owed $247,803.82 to the Funds.

panel of this court heard the consolidated appeal4 on

August 4, 2000, and issued an opinion on September 25,

2000, enforcing the NLRB order and affirming the district

court’s grant of summary judgment for the Funds. See Elec.

Workers Local 58 Pension Trust Fund, 227 F.3d at 649.

While Gary’s Electric’s appeal was pending,

5

the Funds

initiated contempt proceedings in district court against Gary’s

Electric and Pipia for failing to adhere to the district court’s

orders to pay past-due contributions, disclose fringe benefit

reports, adhere to the rules in the CBA for future

contributions and reports, secure a surety bond, and pay the

Funds their costs and attorney fees.6 A November 23, 1999

order of the district court temporarily disposed of the Funds’

petition for contempt by ordering: (1) Gary’s Electric to

produce, within one month, the fringe benefit reports from

June 1998 through the present date; and (2) Pipia to submit to

a deposition within two months. The district court postponed

6 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

7

In previous briefs to this court, Gary’s Electric relied on a

September 29, 2000 district court order deciding that the motion for

contempt is moot because the court issued an order dismissing the case on

November 23, 1999. On October 19, 2000, the district court issued

another order vacating the September 29, 2000 order which denied the

motion for contempt as moot, and stated that the September order was

“erroneously issued.” J.A. at 5 (Docket #42).

8

Gary’s Electric eventually produced the reports for May 8, 1998

through October 30, 1999. Nevertheless, they failed to produce any

reports for November and December 1999, even though, as the Funds

allege, Gary’s Electric still employed electrical workers during those

months.

9

The Funds assert that if the time period runs from the date of

judgment up until November 13, 1999 when Gary’s Electric went out of

business, then the amount owed by Gary’s Electric in fringe benefits is

“some a hundred seven thousand dollars.” J.A. at 136 (Tr. of Mot. Hr’g).

its rulings on the other issues contained in the Funds’ petition

for contempt.

The instant appeal began when the Funds reinitiated the

deferred portions of their contempt petition against both

Gary’s Electric and Pipia.7 In their motion for rehearing filed

on December 7, 2000, the Funds alleged that Gary’s Electric,

with total disregard for this court’s decision, chose not to

comply with the district court’s judgment — it did not make

delinquent payments, produce all the necessary fringe benefit

reports,

8

 make prospective payments as they became due, or

comply with the bond award. According to the affidavit of a

Funds employee responsible for monitoring participating

employers’ payments to the Funds, from the district court’s

judgment enforcing the LMC awards in May 1999 until

October 30, 1999, fringe benefit contributions owed by

Gary’s Electric amounted to $75, 345.04.9 In the motion, the

Funds also allege that Pipia began to waste the corporate

asserts in an effort to avoid making the court-required

payments. According to the Funds, Pipia starting “stripping
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

7

the corporation of its assets” after the NLRB and the Funds

initiated proceedings against it in late 1998 and early 1999.

Appellants’ Br. at 8. The evidence supporting the Funds’

position that Pipia flagrantly and deliberately disregarded the

court’s judgment includes: Pipia more than tripling his

Gary’s Electric salary within two years, Pipia’s receipt of

large bonuses and loans from Gary’s Electric, Pipia’s use of

funds from a corporate account to purchase a fur coat for his

wife which he later claimed as a bonus, and Pipia’s directives

to pay in full every creditor except for the debt owed the

Funds.

At the motion hearing, the Funds requested that Pipia “be

ordered to purge himself of contempt by requiring him to pay

[to the Funds] the sum of . . . a hundred thousand twelve

dollars [and] thirty-eight cents, that being the amount of

indebtedness that accrued after [Pipia] was ordered to comply

with the fringe benefitprovisions of the Collective Bargaining

Agreement.” J.A. at 141 (Tr. of Mot. Hr’g). Ultimately, the

district court granted the contempt petition with respect to

Gary’s Electric, but denied it without prejudice with respect

to Pipia. The district court stated:

I will at this time enter an order finding the corporation

in contempt of the order, the injunctive order of this court

because it failed to do what it was ordered to do. I am

unable to do that with Mr. Pipia because although you

have told me many very reprehensible things that he has

done, there are no proofs of that on this record and he

was not a defendant in this case and he was not ordered

specifically to do anything other than give a deposition

which he did do.

J.A. at 153 (Tr. of Mot. Hr’g). The Funds now appeal from

the portion of the district court’s order denying the petition to

hold Pipia in contempt.

8 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

II. ANALYSIS

A. Jurisdiction

The district court had jurisdiction pursuant to §301 of the

Labor Management Relations Act, as amended, 29 U.S.C.

§ 185, and §§ 502(g)(2) and 515 of the Employee Retirement

Income Security Act of 1974 (“ERISA”). We have

jurisdiction over this timely appeal pursuant to 28 U.S.C.

§ 1291.

B. Standard of Review

A decision on a contempt petition is within the sound

discretion of the trial court and thus is reviewed only for an

abuse of discretion. Peppers v. Barry, 873 F.2d 967, 968 (6th

Cir. 1989). “Abuse of discretion is defined as a definite and

firm conviction that the trial court committed a clear error of

judgment.” Bowling v. Pfizer, Inc., 102 F.3d 777, 780 (6th

Cir. 1996) (quotation omitted), cert. denied, 522 U.S. 906

(1997). Under this standard, a district court’s decision is to

be afforded “great deference;” it “will be disturbed only if the

district court relied upon clearly erroneous findings of fact,

improperly applied the governing law, or used an erroneous

legal standard.” Blue Cross & Blue Shield Mut. of Ohio v.

Blue Cross & Blue Shield Ass’n, 110 F.3d 318, 322 (6th Cir.

1997).

C. Contempt

1. Corporate Officers Can Be Held in Contempt

When a court seeks to enforce its order or supervise its

judgment, one weapon in its arsenal is contempt of court. See

NLRB v. Cincinnati Bronze, Inc., 829 F.2d 585, 588 (6th Cir.

1987). Recognizing that the power “to punish for contempts”

should not be used lightly, the Supreme Court has stated that

this power “is a necessary and integral part of the
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

9

independence of the judiciary, and is absolutely essential to

the performance of the duties imposed on them by law.

Without it they are mere boards of arbitration, whose

judgments and decrees would be only advisory.” Gompers v.

Buck’s Stove & Range Co., 221 U.S. 418, 450 (1911).

Contempt proceedings enforce the message that court orders

and judgments are to be complied with in a prompt manner.

Cincinnati Bronze, 829 F.2d at 590. With respect to civil

contempt proceedings, “[j]udicial sanctions . . . may, in a

proper case, be employed for either or both of two purposes;

to coerce the defendant into compliance with the court’s

order, and to compensate the complainant for losses

sustained.” United States v. United Mine Workers of Am.,

330 U.S. 258, 303-04 (1947).

In order to hold a litigant in contempt, the movant must

produce clear and convincing evidence that shows that “he

violated a definite and specific order of the court requiring

him to perform or refrain from performing a particular act or

acts with knowledge of the court’s order.” Cincinnati Bronze,

829 F.2d at 591 (quotation and brackets omitted). Clear and

convincing evidence is a not a light burden and should not be

confused with the less stringent, proof by a preponderance of

the evidence. See Consol. Coal Co. v. Local Union No. 1784,

United Mine Workers of Am., 514 F.2d 763, 766 (6th Cir.

1975). Once the movant establishes his prima facie case, the

burden shifts to the contemnor who may defend by coming

forward with evidence showing that he is presently unable to

comply with the court’s order. United States v. Rylander, 460

U.S. 752, 757 (1983) (“[w]here compliance is impossible,

neither the moving party nor the court has any reason to

proceed with the civil contempt action. It is settled, however,

that in raising this defense, the defendant has a burden of

production.”). To meet this production burden in this circuit

“a defendant must show categorically and in detail why he or

she is unable to comply with the court’s order.” Rolex Watch

U.S.A., Inc. v. Crowley, 74 F.3d 716, 720 (6th Cir. 1996)

(quotation omitted). When evaluating a defendant’s failure to

10 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

comply with a court order, we also consider whether the

defendant “took all reasonable steps within [his] power to

comply with the court’s order.” Peppers, 873 F.2d at 969.

In the present case, the Funds petitioned for a contempt

order against both Gary’s Electric and its principal officer and

owner, Pipia. The district court granted the motion for Gary’s

Electric but denied the motion for Pipia. The district court

identified three reasons for dismissing the contempt motion

with respect to Pipia. First, the district court noted that Pipia

could not be held in contempt because he was not a defendant

in the lawsuit. Second, the court focused on the terms of the

original order and stated that the only act Pipia was

specifically and individually ordered to do was to submit to

a deposition and that he complied in full. Third, the district

court reasoned that although the Funds identified Pipia’s

many “reprehensible” acts, “there [were] no proofs of that on

[the] record.” J.A. at 153 (Tr. of Mot. Hr’g). In order to

reverse the district court, we must find that the district court

abused its discretion in that it either made clearly erroneous

findings of fact, improperly applied the controlling law, or

used the incorrect legal standard in dismissing the petition as

to Pipia. Blue Cross & Blue Shield Mut. of Ohio, 110 F.3d at

322.

The Funds carry the initial burden to show contempt. That

is, the Funds must come forward with clear and convincing

evidence showing that Pipia “violate[d] a definite and specific

order of the court requiring him to perform or refrain from

performing a particular act or acts with knowledge of the

court’s order.” Cincinnati Bronze, 829 F.2d at 591 (quotation

omitted). Thus, an initial issue we must resolve is whether an

unnamed party can be subject to a court order, i.e., whether a

court’s order directed to a corporation ever could reach out to

bind a non-litigant, such as a corporate officer. The answer

is clearly established in both this circuit and the Supreme

Court.
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

11

Many decades ago, in a case where a corporate officer who

failed to comply with a subpoena duces tecum was held in

contempt, the Supreme Court stated:

A command to the corporation is in effect a command to

those who are officially responsible for the conduct of its

affairs. If they, apprised of the writ directed to the

corporation, prevent compliance or fail to take

appropriate action within their power for the performance

of the corporate duty, they, no less than the corporation

itself, are guilty of disobedience, and may be punished

for contempt.

Wilson v. United States, 221 U.S. 361, 376 (1911) (noting that

the corporation can be proceeded against in its corporate

capacity at the same time that “[officers] are punished in their

natural capacities for failure to do what the law requires of

them as the representatives of the corporation.” (quotation

omitted)). More recently, we have commented on the issue

of holding a corporate president in contempt when an

injunction is directed solely to the corporation or company.

See United States v. Hochschild, 977 F.2d 208 (6th Cir.

1992), cert. denied, 506 U.S. 1067 (1993). In Hochschild, the

defendant corporate officer argued that he was not bound by

the terms of the injunction directed to his corporation. In

support of his argument, the defendant relied on language in

the district court’s order that implied that the district court

may have lacked jurisdiction over him because he was not a

named party in the action. Id. at 212. On appeal, we

determined that the injunction applied to the nonparty officer

in his corporate capacity. We arrived at this conclusion after

we juxtaposed the two contrasting viewpoints— the minority

view suggesting that personal jurisdiction over a non-party for

contempt only can be achieved through service of process and

the majority view allowing personal jurisdiction for contempt

over officers or corporate employees if they have notice of the

injunction and its contents. Id. (noting that “more [cases]

have held that officers or employees of corporate and business

12 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

10We noted that according to Federal Rule of Civil Procedure 65(d),

injunctions are binding on defendant corporations’ officers in their

corporate capacities, so long as they have notice. Hochschild, 977 F.2d

at 211.

entities are subject to in personam jurisdiction for purposes of

contempt if they have notice of the injunction and its

contents”); see also Cent. States, Southeast and Southwest

Areas Pension Fund v. Wintz Props., Inc., 155 F.3d 868, 876

(7th Cir. 1998) (deciding that the company’s president and

owner, a non-party to the lawsuit, also was subject to the

injunction when the court’s order was directed at the company

and its officers); NLRB v. Sequoia Dist. Council of

Carpenters, AFL-CIO, 568 F.2d 628, 633 (9th Cir. 1977) (“It

can hardly be argued that the principal officers of a labor

union are not legally identified with it, and thus liable in

contempt for disobeying an order directed to the union.”).

Heralding the majority view as the law of this circuit, we

referenced a Second Circuit case quoting Judge Learned

Hand: “‘a person who knowingly assists a defendant in

violating an injunction subjects himself to civil as well as

criminal proceedings for contempt. This is well settled law.’”

Hochschild, 977 F.2d at 212 (quoting Backo v. Local 281,

United Bhd. of Carpenters & Joiners, 438 F.2d 176, 180 (2d

Cir. 1970), cert. denied, 404 U.S. 858 (1971) (quoting

Alemite Mfg. Corp. v. Staff, 42 F.2d 832 (2d Cir. 1930))).

Ultimately, we determined that the defendant officer was

“bound by the injunction . . . because of his relationship to the

corporation.” Id.10

Other circuits have reasoned similarly. The Eighth Circuit

in Chicago Truck Drivers v. Bhd. Labor Leasing, 207 F.3d

500 (8th Cir. 2000), was faced with a case strikingly similar

to the one presented on this appeal. In Chicago Truck

Drivers, a union pension fund and its trustees sued

corporations for interim payments of withdrawal liability

under ERISA. Id. at 503. The district court granted summary
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

13

judgment in the union pension fund’s favor and ordered the

commencement of payments. See id. Amended judgments

followed, ordering further payments but “[b]oth the initial and

amended judgments contained no reference to either [the

corporations’ sole officer and shareholder] specifically or the

[corporations’] officers or other agents generically.” Id.

When the union pension fund never received any of the courtordered payments, the fund filed a motion for contempt

against both the corporations and their sole owner and

shareholder in his personal capacity. Id. The union pension

fund rested its case after it presented evidence that no

payments had been made although the payments were due and

that at the time the payments became due, the corporate

entities had the resources to pay. See id. at 504. The district

court denied the motion for contempt stating that the union

pension fund failed “to produce evidence sufficient for a

finding that the defendants have assets for making the

judgment debt payments but did not do so.” Id.

On appeal, the Eighth Circuit remanded the case to the

district court, stating that the district court abused its

discretion by shifting the burden to the union pension fund to

show that the corporation had the present ability to pay and

by failing to make any specific findings as to whether the

defendant officer committed acts that might support a

contempt finding against him personally. Id. at 508. In

addition, the court of appeals instructed the district court on

remand to make specific findings with respect to whether the

parties satisfied their burdens. Id. at 505. The court further

noted that although “a contempt finding against the

[corporations likely] would [not] serve any useful purpose,

since it appears they no longer have any assets,” the union

pension fund “is entitled to further development of the record

concerning the dissipation of the [corporations’] assets, and

an express finding from the court that the [corporations] have

satisfied their burden on an inability-to-comply defense.” Id.

at 505-06.

14 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

11Rule 65(d) provides that an injunction or a restraining order binds:

“the parties to the action, their officers, agents, servants, employees, and

attorneys, and . . . those persons in active concert or participation with

them who receive actual notice of the order by personal service or

otherwise.” Fed. R. Civ. P. 65(d).

The Eighth Circuit noted that although the Supreme Court

in Rylander stated that a “present inability to comply” is a

defense to civil contempt, some circuits have refined that

statement requiring that an alleged contemnor, asserting

inability to pay, establish “(1) that they were unable to

comply, explaining why categorically and in detail; (2) that

their inability to comply was not self-induced; and (3) that

they made in good faith all reasonable efforts to comply.”

Chicago Truck Drivers, 207 F.3d at 506 (quotations omitted).

Regarding the assertion that the defendant officer could be

held in contempt individually, the Eighth Circuit compared

the case before it to injunctions under Federal Rule of Civil

Procedure 65(d).11 Because the Supreme Court liberally

applied Rule 65(d) to any “‘equitable decree compelling

obedience under the threat of contempt’” including “not only

injunctions . . . but also ‘enforcement orders and affirmative

decrees,’” the Eighth Circuit determined that a corporate

officer can be bound by a court’s payment orders even when

the “orders [make] no specific reference to him.” Chicago

Truck Drivers, 207 F.3d at 507 (quoting Int’l Longshoremen’s

Ass’n v. Philadelphia Marine Trade Ass’n, 389 U.S. 64, 75-

76 (1967)). Thus, while a district court’s order setting a pay

schedule may or may not be classified as an injunction, it

nevertheless can be treated as one when “it compel[s] . . .

affirmative, prospective obedience with it.” Id.

In the case before us, the district court’s order only referred

to Gary’s Electric and did not mention its agents, officers, or

owners at all. But, as is evident from the Supreme Court in

Wilson and our opinion in Hochschild, whether or not Pipia

was a named defendant in the order, or even mentioned at all,
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

15

12In his testimony, Pipia uses ignorance as an excuse for his failure

to pay the contributions. He states: “I just wasn’t aware that I had to pay

it. I thought we were in court. We were fighting this out, and I didn’t —

I was not going to join the union, and rather than pay that kind of money,

I would just close the business down.” J.A. at 202 (Pipia Dep.).

is not controlling. See Wilson, 221 U.S. at 376; Hochschild,

977 F.2d at 212. Pipia, as an officer of the corporation and

the one responsible for the corporation’s affairs, was subject

to the court’s order just as the corporation itself was. See

Chicago Truck Drivers, 207 F.3d at 508. Because Pipia

either “prevent[ed] compliance or fail[ed] to take appropriate

action within [his] power for the performance of the corporate

duty,” the district court had the authority to hold Pipia in

contempt. Wilson, 221 U.S. at 376. The Funds only needed

to show that Gary’s Electric did not comply with the district

court’s judgment in order to meet their burden. That said, the

Funds met their initial burden for a contempt finding against

Pipia when they presented to the district court the previous

order of the court affirming the LMC awards and Pipia’s own

deposition testimony admitting that he knew of the court’s

order yet failed to observe it.12 See, e.g., Chicago Truck

Drivers, 207 F.3d at 505 (“Here, it is undisputed that [the

corporations] have not made any payments pursuant to the

court’s order. At that point, the burden should have shifted to

[the corporations] to show an inability to comply.”). The

Funds presented clear and convincing evidence —

undisputed, even — that Pipia, the sole owner and officer of

Gary’s Electric, “with knowledge of the court’s order,” chose

to violate the court’s order by not making the required

contributions to the Funds. Cincinnati Bronze, 829 F.2d at

591 (quotation omitted). Moreover, the district court’s order

was in effect because Gary’s Electric did not file a

supersedeas bond and because Gary’s Electric did not obtain

a stay of the district court’s judgment pending appeal. Thus,

because Pipia is bound by the district court’s order directed at

Gary’s Electric and because the Funds presented evidence that

16 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

13To the extent that Chicago Truck Drivers suggests that the

defendant officer could not be held liable for an amount equivalent to the

underlying delinquent payments because he was never sued in his

individual capacity, we disagree. Because one of the purposes of civil

contempt is to compensate a complainant for its losses, we note that Pipia

can be fined in an amount equivalent to the original judgment. The

district court should consider to what extent Pipia deliberately caused the

underlying judgment to remain unpaid and should sanction accordingly.

no payments had been made although the payments were due,

the district court improperly dismissed the petition to hold

Pipia in contempt.

Once the Funds establish their prima facie case, the burden

of production shifts to Pipia, who may defend against an

order of contempt by producing evidence to show that he is

presently unable to comply with the court’s order. See

Rylander, 460 U.S. at 757. However, as we stated previously,

some courts have narrowed Rylander by requiring either that

the contemnor prove in great detail his inability to pay, show

that he did not cause the inability, or prove that he

unsuccessfully attempted compliance in good faith. See

Chicago Truck Drivers, 207 F.3d at 506. We previously have

required a contemnor to show “categorically and in detail why

he or she is unable to comply with the court’s order.” Rolex

Watch U.S.A., Inc., 74 F.3d at 720. We also have evaluated

whether the defendant “took all reasonable steps within [his]

power to comply with the court’s order.” Peppers, 873 F.2d

at 969. Until now, however, we have never decided whether

we embrace the refinement on Rylander that requires the

contemnor to show that his present inability to comply is not

his own fault or the result of self-induced inability. Nor have

we decided previously whether we would sanction the

wrongdoer. Today we choose to follow the lead of the Eighth

Circuit and hold that the Rylander “present inability to

comply” defense to civil contempt requires that the

contemnor show that he is not responsible for the present

inability to pay.

13 If the contemnor cannot make this
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

17

showing, then the Rylander defense is unavailable. Thus,

taking our cues from the Supreme Court in Rylander and

Wilson, we determine that if a corporate officer avoids a

court’s order to the corporation by failing to take action or

attempt compliance, “they, no less than the corporation itself,

are guilty of disobedience, and may be punished for

contempt.” Wilson, 221 U.S. at 376. Moreover, we hold that

because a civil contempt ruling either attempts to coerce

compliance or compensate the complainant for losses, it is

fully appropriate to impose judicial sanctions on the nonparty

corporate officer. See United Mine Workers, 330 U.S. at 303-

04.

Turning then to the instant case, Pipia clearly did not meet

his burden of production. As the Funds point out, Pipia

testified in his deposition that he did not abide by the

judgment because he did not think Gary’s Electric was

contractually obligated to do so. Interestingly and without a

court order, however, Pipia paid off nearly all Gary’s

Electric’s other creditors approximately $541,100 between

May 17, 1999 and December 31, 1999. J.A. at 139-40 (Tr. of

Mot. Hr’g). Moreover, according to the Funds, Gary’s

Electric had gross receipts of $1,800,000 in 1999, the year the

company closed its doors. Even assuming that all of Pipia’s

actions were taken in good faith and not to avoid paying the

Funds, Pipia’s decision to pay all other creditors and refusal

to pay the Funds anything at all is ample evidence from which

the district court could conclude that Pipia did not take “all

reasonable steps” to ensure Gary’s Electric’s compliance with

the court order. See Peppers, 873 F.2d at 969. In addition,

Pipia’s testimony that the company’s affairs had wound up

shortly after the contempt hearing — presumably attempting

to imply a lack of expendable funds — is hardly sufficient to

show “categorically and in detail” why Pipia is unable to

18 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

14In his deposition testimony, Pipia indicates that business operations

ceased on January 2000 and he then liquidated Gary’s Electric’s assets.

Although his testimony indicates that Gary’s Electric still owes some

money to the bank, owes taxes to the state, and no longer has any

accounts receivables, it is not at all clear in a categorical and detailed way

that Gary’s Electric was unable to comply with the court’s order when the

order was issued.

15The rent went from $1,500 a month to $3,000 a month.

16At the motion hearing, Gary’s Electric’s counsel suggested that

Pipia’s pay raise occurred because business sales went up from

$1,200,000 to $1,900,000 that year.

17

According to a letter from Pipia’s accountant, the October 1999

payroll did indicate a $54,000 bonus for Pipia; however, $18,000 of this

money was withheld taxes, and the remaining $36,000 was a charge to his

loan account. Thus, Pipia received no net cash from this transaction.

comply with the court’s order.14 Rolex Watch U.S.A., Inc., 74

F.3d at 720.

Because we have decided that a showing of clean hands is

essential to the Rylander defense, we are impressed even

more by Pipia’s attempts to drain the corporate resources to

avoid satisfying the court’s order. The first example cited by

the Funds is the doubling of Gary’s Electric’s rent15 that

occurred after the Funds moved for summary judgment. The

office space that Gary’s Electric leased was owned by one of

Pipia’s other companies, KRP, and thus the increased rent

directly benefitted KRP at the expense of Gary’s Electric and

its creditors. Another example of Pipia’s diversion of Gary’s

Electric’s assets was Pipia’s salary increase from $70,000, as

indicated in his 1997 income tax return, to $220,500 in

1999.16 Additionally, Pipia received a $54,000 bonus in

October 1999;17 Gary’s Electric had an outstanding $5,100

loan to Pipia in June 2000; and Pipia purchased a fur coat

using funds from Gary’s Electric’s trade-exchange accountsreceivable account which he later documented as a bonus.
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

19

Considering these events in their entirety, we believe that the

Funds are “entitled to further development of the record

regarding a possible contempt finding against [Pipia]

personally.” Chicago Truck Drivers, 207 F.3d at 506.

In sum, the district court abused its discretion on numerous

fronts when it denied the contempt petition for Pipia. First,

the court’s determination that Pipia could not be held in

contempt because he was not a defendant was an improper

application of controlling law. See generally Hochschild, 977

F.2d at 212 (holding that a corporate officer was bound by an

injunction directed at the corporation). Second, because

Pipia, the company’s sole owner and officer, was responsible

for the corporation’s compliance, he implicitly was ordered to

do more than merely submit to a deposition as the district

court opinion suggests. See Wilson, 221 U.S. at 376. Third,

the district court clearly did not consider properly the burdens

in this case. See Chicago Truck Drivers, 207 F.3d at 505. In

order to proceed on its motion for contempt, all the Funds

needed to show was that Gary’s Electric did not pay the

ordered amounts. Thus, once Gary’s Electric admitted that it

did not obey the court’s order to make payments to the Funds,

the district court abused its discretion when it failed to shift

the burden to Pipia to show “categorically and in detail” why

Gary’s Electric could not pay. Rolex Watch U.S.A., Inc., 74

F.3d at 720. Moreover, based on today’s holding, Pipia also

will need to show that he was not the cause of Gary’s

Electric’s inability to pay. Finally, the district court made

erroneous findings of fact when it dismissed the contempt

petition with respect to Pipia stating that there were no proofs

on the record of Pipia’s “reprehensible” acts. Pipia’s

deposition testimonyprovided sufficient evidence from which

the district court could have concluded that additional

development of the record was necessary.

Therefore, we instruct the district court to use the proper

legal tests and make specific findings with respect to whether

the parties satisfied their respective burdens. If Pipia is found

20 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

to be in contempt, it is up to the district court to “fashion an

appropriate sanction.” Chicago Truck Drivers, 207 F.3d at

508. Appropriate sanctions would aim to compensate the

Funds for losses resulting from Pipia’s purposeful decisions

to avoid paying the judgment and to eliminate Gary’s

Electric’s resources.

2. Contempt Is an Acceptable Form of Relief

Gary’s Electric argues that contempt is not the proper relief

for failure to pay a monetary judgment, and that only

garnishment, attachment, and execution are available as

collection remedies. We disagree with Gary’s Electric’s

classification of this action as a collection action. In our

opinion, the sanction of civil contempt is more properly

considered a compensatory remedy and an encouragement to

comply with court orders. As we stated above, the objective

of any contempt determination is to enforce the message that

court orders and judgments are to be taken seriously. See

Cincinnati Bronze, 829 F.2d at 590. Moreover, judicial

sanctions can be used not only to coerce compliance, but also

to compensate the complainant. See United Mine Workers,

330 U.S. at 303-04; see also 11A Charles Alan Wright,

Arthur R. Miller, & Mary Kay Kane, Federal Practice and

Procedure § 2960, at 372-73 (2d ed. 1995) (“A federal court’s

discretion includes the power to frame a sanction to fit the

violation.”). Thus, the sanction of civil contempt may include

a fine designed to compensate the Funds not only for the

money that Pipia squandered but also for the money Pipia

diverted from the Funds and paid to other creditors. See

generally United Mine Workers, 330 U.S. at 303-04 (noting

that judicial sanctions may be used to compensate a

complainant for losses and that they “must of course be based

upon evidence of [the] complainant’s actual loss”); Wright,

Miller, & Kane, supra § 2960, at 369-70 (“[Relief in a civil

contempt proceeding] often takes the form of a fine in the

amount of the damage sustained by plaintiff.”). Thus,

because this contempt proceeding is brought to compensate
No. 01-1864 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

21

18Gary’s Electric’s position also is refuted by an analysis of the

Supreme Court’s decision in NLRB v. Deena Artware, Inc., 361 U.S. 398

(1960). Although this Supreme Court case did not specifically address the

question raised by Gary’s Electric, whether contempt proceedings are

proper to enforce a money judgment, the concurrence in the Supreme

Court opinion reveals that contempt proceedings are used to enforce

orders for back pay. See Deena Artware, Inc., 361 U.S. at 412-14

(Frankfurter, J., concurring) (“It is equally appropriate for the Court of

Appeals, by decree enforcing the Board’s order, to place [an employer]

at the hazard that if an amount is found to be owing, [conduct designed to

defeat the back-pay order] subsequent to the decree may be found to be

contumacious. . . . Accordingly, the petition for contempt should have

been sustained.”); see also NLRB v. Deena Artware, Inc., 251 F.2d 183,

186 (6th Cir. 1958) (“In the absence of contempt proceedings, we do not

find that jurisdiction is conferred upon us to order and supervise discovery

proceedings in the appellate court for the purpose of enforcing a monetary

award running in favor of a private individual, even though the award has

received its vitality from a previous decree of this Court.” (emphasis

added)). Because there is no material distinction between finding

contempt for failure to comply with an order to provide employees back

pay and for failure to comply with an order to make past-due fringe

benefit contributions, we see no justification for treating these two

monetary awards differently under the law. Thus, we conclude that

Deena Artware provides additional support for a determination that

contempt is an appropriate form of relief in these circumstances.

the Funds for losses based on Pipia’s failure to comply with

the court’s order and not as a medium for collecting the

underlying judgment, it is not a collection action but a

compensatory tool which expressly permits the use of

monetary sanctions in this manner.18

3. A Corporate Officer Can Be Held in Contempt

Without Piercing the Corporate Veil

According to Gary’s Electric, because the Funds did not

attempt to pierce the corporate veil and did not sue Pipia in

his individual capacity, Pipia could never personally be held

responsible for Gary’s Electric’s failure to make the fringebenefit contributions as ordered by the court. Gary’s Electric

also argues that because the Funds failed to submit specific

22 Elec. Workers Local 58 Pension Trust

Fund et al. v. Gary’s Elec. Serv. Co.

No. 01-1864

pleadings and proof of an alter-ego relationship, Michigan

law does not permit the court to pierce the corporate veil and

hold a corporate officer liable for a corporation’s debt. In

support of Gary’s Electric’s contention, Chicago Truck

Drivers also suggests that the defendant corporate officer

could not be liable for the underlying delinquent payments

because he was never sued in his individual capacity. 207

F.3d at 507-08.

Once again, Gary’s Electric fails to recognize that the

Funds are not requesting that Pipia be liable for Gary’s

Electric’s delinquent fringe-benefit contributions, but rather

the Funds request that Pipia be held in contempt. Chicago

Truck Drivers expressly provides that the district court could

“fashion an appropriate sanction” if the defendant officer was

ultimately found in contempt of court. 207 F.3d at 507-08.

Thus, on remand, the district court could determine that a

proper sanction would be to fine Pipia in an amount

equivalent to those funds that Pipia reasonably diverted. See

Chicago Truck Drivers, 207 F.3d at 505 (noting that “[w]here

compensation is intended, a fine is imposed, payable to

complainant”) (quoting United Mine Workers, 330 U.S. at

304). Fittingly, the Funds never asked that Pipia be held

personally responsible for the amount Gary’s Electric was

ordered to pay, but rather the Funds requested that Pipia be

held accountable for his own deliberate disobedience of the

court’s order. Piercing the corporate veil is unnecessary

because the Funds are not attempting to hold Pipia liable for

Gary’s Electric’s corporate debts.

III. CONCLUSION

Because the district court abused its discretion when it

denied the Funds’ petition to hold Pipia in contempt, we

VACATE the district court’s decision and REMAND for

additional proceedings consistent with this opinion.