IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

ELAINE L. CHAO, SECRETARY : CIVIL ACTION

OF LABOR, UNITED STATES :

DEPARTMENT OF LABOR :

:

v. :

:

JOHN J. KORESKO, V, et al. : NO. 04-mc-74

 

ELAINE L. CHAO, SECRETARY : CIVIL ACTION

OF LABOR, UNITED STATES :

DEPARTMENT OF LABOR :

:

v. :

:

JOHN J. KORESKO, V, et al. : NO. 06-mc-192

MEMORANDUM

McLaughlin, J. April 16, 2009

John Koresko, PennMont Benefit Services, Inc., Koresko

Law Firm, P.C., Koresko and Associates, Regional Employers

Assurance League, Delaware Valley League, and the named trusts

(Koresko parties) seek a finding of contempt against the

Secretary of Labor and counsel for the asserted violation of this

Court’s order of January 22, 2009. The January 22, 2009, order

granted a stay of the Department of Labor’s administrative

subpoena enforcement proceedings during the consideration of the

respondents’ appeal of this Court’s decision to enforce those

subpoenas. The basis for the Koresko parties’ motion for

contempt is the Secretary’s filing of a separate civil action

before Judge C. Darnell Jones of the Eastern District of

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Pennsylvania, Case No. 09-988. The Court finds that the

Secretary’s actions have not violated the Court’s stay of these

enforcement proceedings and will deny the respondent’s motion. 

The two present matters are two related subpoena

enforcement proceedings. The Department of Labor initiated these

cases in April of 2004 by filing its first petition to enforce an

administrative subpoena served on the respondents. A second

subpoena was served on the respondents in 2006, and the

petitioners sued to enforce that subpoena in October of that

year. The subpoenas seek the production of documents relating to

certain death benefit accounts and employer insurance plans. The

respondents have challenged the petitioner's jurisdiction over

such accounts and plans, and have persistently refused to provide

certain documents requested by the petitioner. The respondents

claim that the petitioner has no authority to conduct an

investigation relating to the benefit accounts and funds referred

to in the documents referred to in the subpoenas. 

 On December 9, 2008, the Court issued an order

granting in part and denying in part the petitioner's renewed

motion to enforce the 2004 and 2006 subpoenas. (Case No. 04-74,

Docket No. 181; Case No. 06-192, Docket No. 39). The respondents

have filed an appeal of this order with the United States Court

of Appeals for the Third Circuit. (Case No. 04-74, Docket No.

190; Case No. 06-192, Docket No. 44). The petitioner also filed

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an amended motion to incarcerate respondent John J. Koresko, V,

(Case No. 04-74, Docket No. 187), as well as a motion for the

adjudication of civil contempt, (Case No. 06-192, Docket No. 43). 

Following the petitioners' motions to incarcerate and for the

adjudication of civil contempt, the respondents filed a motion to

stay all proceedings, which the Court granted in an order dated

January 22, 2009. 

On March 6, 2009, the Secretary filed a civil complaint

in the Eastern District of Pennsylvania, Case No. 09-988, which

is currently before Judge C. Darnell Jones. In response to this

filing, the respondents filed their motion for contempt. The

respondents claim that the DOL and its counsel are in contempt of

the January 22, 2009, stay order as a result of the filing of

their civil complaint and for sending correspondence to the

Koresko parties seeking to compel a consent judgment. 

The Court’s order granting the respondents’ motion for

a stay of these proceedings did not preclude, or even discuss,

the possibility of the Secretary filing a civil suit against the

Koresko parties on the basis of information and documentation

that the respondents or others had provided previously, nor did

the order preclude or discuss the Secretary’s attempt to obtain a

consent judgment from the Koresko parties. 

The majority of the respondents’ briefs in support of

the motion for contempt discuss the jurisdiction of the DOL over

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the respondents’ trusts and insurance plans. This is the issue

currently on appeal and this Court will not consider the issue

while the Court of Appeals’ review is ongoing. The balance of

the respondents’ complaints relate to the propriety of the

recently filed civil action. Such questions are properly

referred to the Judge presiding over that matter. For these

reasons, the Court will deny the respondents’ motion for

contempt. 

The Court will also deny the respondents’ request for

discovery on the issue of contempt and subpoena abuse contained

in their reply brief. Rep. at 13. The basis for the

respondents’ request relates to their arguments on the

Secretary’s bad faith in pursuing the enforcement of her

administrative subpoenas. The respondents arguments pertain to

the Secretary’s jurisdiction to conduct her investigation, which

is the issue currently on appeal. As stated above, this Court

will not interfere with the consideration of that issue by the

Court of Appeals. 

Finally, the Court will not hold that the filing of the

Secretary’s civil action has rendered these subpoena enforcement

proceedings moot. “As a general rule, the timely filing of a

notice of appeal is an event of jurisdictional significance,

immediately conferring jurisdiction on a Court of Appeals and

divesting a district court of its control over those aspects of

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the case involved in the appeal.” Venez. v. Sweet, 758 F.2d 117,

120 (3d Cir. 1985). This Court will not declare these actions

moot during the Court of Appeals’ consideration of the

respondents’ appeal. 

An appropriate order will be filed separately.

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