Electrical Workers Pension Trust Fund of Local Union 58, Ibew v. Gary’s Electric Service Company

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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 Plaintiffs-
Appellants 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

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No. 01-1864 Elec. Workers Local 58 Pension Trust
Fund et al. v. Gary’s Elec. Serv. Co.
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1The second letter of assent, signed by P ipia as G ary’s Electric’s
presid ent, took effect on July 29 , 198 8 and stated that it would remain
effective until terminated by Gary’s Electric supplying NEC A 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
Contractors Association (“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
2The 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 d ue thereon, and
. . .
D. Hereafter, filing all reports and paying all fringe bene fit
contributions on a timely basis as required by Article VIII.
Joint Appendix (“J.A.”) at 16 (Compl., Ex. C, Award of the LMC ).
3During 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 58 5, 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

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No. 01-1864 Elec. Workers Local 58 Pension Trust
Fund et al. v. Gary’s Elec. Serv. Co.
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4The NLRB ’s general counsel brought charges against Gary’s
Electric for failure to provide information relevant to the performance of
its repre sentational duties pursuant to Sections 8(a)(5) and (1) of the
National Labor Relations Act (“NLRA”). The ad ministrative law judge
(“ALJ”) found Gary’s Electric guilty as charged, and then the NLRB
affirmed the ALJ’s decision. The NLR B eventually sought enforcement
of its order, and that action was conso lidated with Gary’s Electric’s appeal
from summary judgment in the Funds’ case.
5Gary’s Electric ceased functioning as an electrical services company
by November 1 999 , although Pipia and his secretary continued to work
up until January 20 00 in order to wind up the business’s affairs.
According to the Funds, Gary’s Electric went out of business on
November 13, 1999.
6The 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, 19 98 and
October 30 , 1999 , Gary’s Electric owed $2 47,80 3.82 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
7In 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 ord er which denied the
motion for contemp t as moot, and stated that the September order was
“erroneously issued.” J.A. at 5 (Docket #42).
8Gary’s Electric eventually produced the reports for May 8, 1998
through October 30 , 1999. Nevertheless, they failed to produce any
repo rts for Novemb er and December 1999, even though, as the Funds
allege, Gary’s Electric still employed electrical workers during those
months.
9The 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 (T r. 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

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No. 01-1864 Elec. Workers Local 58 Pension Trust
Fund et al. v. Gary’s Elec. Serv. Co.
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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 benefit provisions 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

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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.

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No. 01-1864 Elec. Workers Local 58 Pension Trust
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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
10W e noted that according to Federal Rule of Civil Procedure 65(d),
injunctions are binding on defendant corporations’ officers in their
corp orate capacities, so long as they have no tice. Ho chschild, 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

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Fund et al. v. Gary’s Elec. Serv. Co.
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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 court-
ordered 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 bind s:
“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,

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No. 01-1864 Elec. Workers Local 58 Pension Trust
Fund et al. v. Gary’s Elec. Serv. Co.
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12In his testimony, Pipia uses ignorance as an excu se for his failure
to pay the contributions. He states: “I just wasn’t aware that I had to pay
it. I thought we we re 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 mo ney,
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 Chica go Tru ck Drivers suggests that the
defendant officer could not be held liable for an amount equivalent to the
underlying delinq uent payments because he was never sued in his
individual capa city, we disagree. B ecause one of the p urpo ses of civil
contempt is to compensate a complainant for its losses, we note that Pipia
can be fined in an am ount equivalent to the original judgment. The
district court should consider to what extent P ipia 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

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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
acco unts 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 m onth to $3,000 a mo nth.
16At the mo tion hearing, Gary’s Electric’s counsel suggested that
Pipia’s pay raise occurred because business sales went up from
$1,200,00 0 to $1,900,00 0 that year.
17According to a letter from Pipia’s accountant, the October 1999
payroll did indicate a $54,000 bonus for Pipia; howe ver, $18,0 00 o f 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 accounts-
receivable account which he later documented as a bonus.

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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 testimony provided 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

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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 decisio n in NLRB v. Deena A rtware, Inc., 361 U.S. 398
(1960). Although this Supreme Co urt case did not specifically address the
question raised by Gary’s Electric, whe ther 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 pa y. See Deena Artware, Inc., 361 U.S. at 412-14
(Frankfurter, J., concurring) (“It is equally appropriate for the Court of
App eals, by decree enforcing the Board’s order, to place [an employer]
at the hazard tha t 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
contuma cious. . . . Accordingly, the petition for contempt should have
been sustained.”); see also NLRB v. Deena A rtware, 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 purpo se of enforcing a monetary
awa rd running in favor of a private individual, even though the award has
received its vitality from a previous decree of this Co urt.” (em phasis
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 award s differently under the law. Thus, we conclude that
Deena Artware provides additional support for a determination that
contempt is an appro priate 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 fringe-
benefit 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.

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