United States District Court, D. Maryland
ELLEN L. HOLLANDER, District Judge.
The Pension Benefit Guaranty Corporation ("PBGC"), a federal agency that administers and regulates the defined benefit pension plan insurance program established by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1301 et seq., filed a petition in this Court on October 14, 2014. ECF 1. In the petition, PBGC sought an order to enforce an administrative subpoena issued on July 25, 2013, by PBGC to Members First Federal Credit Union ("MFFCU"), seeking various documents. ECF 1. MFFCU failed to respond and, as a result, PBGC resent the subpoena to MFFCU on May 7, 2014. Again, MFFCU failed to respond.
By Order entered October 24, 2014 (ECF 12), this Court directed MFFCU to produce the records requested by PBGC within eleven (11) days of service of the Order. Id. Alternatively, the Court set a show cause hearing for November 12, 2014, directing respondent to appear at 2:30 p.m. "and show cause why it should not be held in contempt for failing to produce the information designated in [the Court's] Order." ECF 12 at 2. The Order was served on respondent on October 30, 2014. ECF 14; 15-2.
The Court held a show cause hearing at about 2:30 p.m. on November 12, 2014. Counsel for PBGC was present. However, respondent failed to appear. Although MFFCU failed to appear at the show cause hearing on November 12, 2014, MFFCU belatedly produced the documents requested by PBGC's administrative subpoena. In particular, the documents were delivered by MFFCU to FedEx on November 12, 2014, and delivered by FedEx to PBGC the following day, November 13, 2014. See ECF 15 at 1.
PBGC has obtained the relief that is sought in its petition. ECF 1. Nevertheless, it has filed a motion asking the Court to hold respondent in contempt for failing to appear at the show cause hearing on November 12, 2014. And, it has also requested compensatory sanctions, in the form of attorney's fees and costs associated with the show cause hearing. See "PBGC's Motion That Respondent Be Held In Contempt And Order To Pay Compensatory Sanctions, " ECF 15 ("Motion"). The Motion is supported by a Memorandum of Law (ECF 15-1) as well as multiple exhibits. See ECF 15-2 through ECF 15-8. The exhibits include a Declaration of Bruce H. James, Esquire, Senior Counsel in the Office of the General Counsel of PBGC and counsel of record in this case. The Motion is founded on 18 U.S.C. § 401.
MFFCU failed to respond to the Motion, and the time to do so has long expired. No hearing is necessary to resolve the Motion. See Local Rule 105.6.
PBGC is the federal agency created by Title IV of the Employee Retirement Income Act of 1974, 29 U.S.C. §§ 1301-1461 (2012), to administer the defined benefit pension plan termination insurance program created under the Title. See generally PBGC v. LPZ Corp., 496 U.S. 633, 637-38 (1990). Pursuant to ERISA, PBGC has broad investigatory authority concerning matters under its jurisdiction, including authority to issue administrative subpoenas. 29 U.S.C. § 1342(b).
In this case, PBGC sought to trace and recover the overpayment of benefits mistakenly deposited into and withdrawn from an account at Members First Federal Credit Union. In particular, PBGC paid a monthly life annuity benefit to Reginald Williams, a participant under the Pension Plan of Bethlehem Steel (the "Plan"). Payments to Williams under the Plan should have ceased upon Mr. Williams's death on November 4, 2010. ECF 1 ¶¶ 11-13. However, PBGC did not learn of the death of Mr. Williams until March 9, 2011, id. ¶ 6, resulting in a benefit overpayment of $3, 339.53, deposited to an MFFCU account. Id. ¶ 14. Because PBGC's efforts to reclaim the funds from the MFFCU account were unsuccessful, PBGC sought information from MFFCU as to the account in issue. Id. ¶¶ 16-21. PBGC sent MFFCU three letters inquiring about the account. ECF 1 ¶ 17. MFFCU did not respond.
Thereafter, PBGC issued an administrative subpoena to MFFCU on July 25, 2013, pursuant to 29 U.S.C. § 1303(a). See ECF 1 ¶ 18; ECF 1-2 (Administrative Subpoena). See also Declaration of David Smith (ECF 9) at ¶ 3-10. MFFCU failed to respond to PBGC's administrative subpoena. ECF 1 ¶ 19. Therefore, on May 7, 2014, PBGC resent the subpoena to MFFCU. ECF 1 ¶ 20. Delivery was successful. Id. ¶ 21. Again, MFFCU failed to respond. Id. ¶ 22.
As a result of MFFCU's disregard of the subpoena, PBGC initiated an enforcement action under 29 U.S.C. § 1303(c). See ECF 1. The summons and petition were served on MFFCU on October 27, 2014. See ECF 13; ECF 15-2.
In response, and as set forth earlier, I issued a show cause order on October 24, 2014, in which I scheduled a show cause hearing for November 12, 2014. See ECF 12. That Order was served on MFFCU on October 30, 2014. See ECF 14; ECF 15-2. Without notice to the Court or to PBGC, MFFCU failed to appear at the show cause hearing.
However, on the day of the hearing, MFFCU put the documents in transit to PBGC via FedEx; they were delivered to PBGC the next day, November 13, 2014. Notably, the cover letter with the documents is dated November 3, 2014 ( see ECF 15-4). But, the air bill attached to the FedEx envelope reflects that the package was not shipped until November 12, 2014, i.e., the day of the show cause hearing. See ECF 15-5. Moreover, the package was not shipped until 3:00 p.m. on that date, i.e., after the time set for commencement of the hearing. See ...