Service Employees International Union Local 32bj v. Preeminent Protective Services Inc.

CourtDistrict Court, District of Columbia
DecidedNovember 8, 2019
DocketCivil Action No. 2017-1679
StatusPublished

This text of Service Employees International Union Local 32bj v. Preeminent Protective Services Inc. (Service Employees International Union Local 32bj v. Preeminent Protective Services Inc.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Service Employees International Union Local 32bj v. Preeminent Protective Services Inc., (D.D.C. 2019).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

SERVICE EMPLOYEES INTERNATIONAL UNION LOCAL 32BJ,

Plaintiff, Case No. 1:17-cv-01679 (TNM) v.

PREEMINENT PROTECTIVE SERVICES, INC.,

Defendant.

MEMORANDUM OPINION 1

Service Employees International Union Local 32BJ (the “Union”) brought this case to

compel Preeminent Protective Services, Inc. (“Preeminent”) to arbitrate a dispute about two

Union members. Despite a clear court Order directing the parties to arbitrate, Preeminent

dragged its feet for over a year. It took dozens of attorney hours, three show cause hearings, two

failed arbitrations, and a civil contempt Order for Preeminent to comply. The original dispute

itself is now overshadowed by Preeminent’s stonewalling. The issue here is what amount of the

Union’s attorneys’ fees Preeminent should bear because of its long and calculated obstruction.

The year-long effort to force Preeminent’s compliance cost the Union over $50,000 in

attorney hours and expenses. Preeminent requested that the Court mitigate the amount owed

because of its limited ability to pay. After considering the parties’ briefings, the Court rejects

Preeminent’s inability-to-pay arguments. Preeminent alone caused the delay. And Preeminent

alone must bear the costs of its contemptuous and dilatory tactics. For the reasons stated below,

the Court will order Preeminent to pay the Union’s attorneys’ fees and expenses.

1 NOTE: Portions of this opinion contain Sealed Material, which has been redacted. I. BACKGROUND

After reviewing the parties’ arguments on the merits of the case, in May 2018 the Court

agreed with the Union and ordered Preeminent to arbitrate. See Order (May 9, 2018), ECF No.

14. Four months later, Preeminent still had not entered arbitration. The Union filed for a show

cause order, suggesting Preeminent should be held in contempt for violating the Court’s Order.

See Pl.’s Mot. for Order to Show Cause, ECF No. 15.

In response, the Court held the first of three show cause hearings. See ECF Minute Entry

(Nov. 16, 2018). At this hearing, and with the hope of encouraging arbitration, the Court ordered

the parties to split the cost of arbitration but determined that a contempt order was premature.

See Hr’g Tr. 8:19–9:4 (Nov. 16, 2018), ECF No. 33. The Court continued the show cause

hearing until January 3, 2019, with the understanding that it would be discharged upon

completion of arbitration. Id. at 9:6–9. And the Court warned Preeminent against any further

refusal to pay its half of the arbitration costs. Id. at 9:10–11.

The Union immediately tried to resume the arbitration process, but within two weeks

Preeminent refused to pay and forced the recusal of a potential arbitrator. See Status Report, Ex.

A, ECF No. 20-1. The arbitrator required a written assurance of payment “[g]iven Preeminent’s

history of denying [its] responsibility” to pay its share of the arbitration. Id. at 3. But

Preeminent refused, forcing the arbitrator’s recusal. Id. at 2. In his recusal, the arbitrator noted

that Preeminent’s actions amounted to “an effective refusal . . . to participate in good faith in this

Arbitration proceeding” and showed that “Preeminent has no intention of ever paying its share.”

Id. The arbitrator also “strongly suggest[ed] that the Court be notified of Preeminent’s continued

refusal to participate fully, and in the required good faith.” Id.

Shortly afterward, the Union informed the Court, see Status Report, ECF No. 20,

prompting the second show cause hearing. See ECF Minute Entry (Jan. 3, 2019). There, the

2 Court recounted the history of the case to date, including its clear order at the first hearing “that

Preeminent needed to agree to pay its half of the arbitration.” Hr’g Tr. 16:16–17. Then the

Court found that Preeminent “repeatedly” and “explicitly ignor[ed] the continued request from

[the arbitrator and the Union] to agree to pay their half to allow the arbitration to commence.”

Id. at 17:11–13, 19:15. The Court noted that it “continued the show cause hearing . . . to ensure

[its] order was followed and that the arbitration took place. Neither happened.” Id. at 18:17–20.

And the Court warned Preeminent in no uncertain terms that it could not ignore court orders or

dictate their terms. Id. at 18:24–19:1.

After denying Preeminent’s “borderline frivolous” motion for attorneys’ fees, and to

compensate the Union for the time it had wasted to date, the Court granted the Union’s motion

for attorneys’ fees and invited a memorandum outlining its fees and expenses. Id. at 19:16–24,

23:12–15; see Def.’s Resp. to Show Cause Order and Mot. for Atty’s Fees, ECF No. 16. The

Union identified nearly $20,000 in fees. See Pl.’s Mem. in Support of App. For Atty’s Fees

(“Pl.’s Fee Mem.”), ECF No. 24.

Even so, Preeminent dragged its feet in paying the second arbitrator, delayed arbitration

yet again, and willfully forced the recusal of the arbitrator. See Hr’g Tr. 25–26 (June 6, 2019).

After being “shocked and disappointed” to learn the circumstances of the first arbitrator’s

recusal, the second arbitrator insisted upon “enforceable assurances from both parties that I will

be paid for my services.” See Def.’s Mot. to Cont. (4/23/2019), Ex. 7, ECF No. 34-7. Through

back-and-forth with both parties, the second arbitrator proposed a revised fee agreement that

incorporated the parties’ suggested language. See Errata Entry, Ex. A (“Sec. Arbitrator’s

Recusal”) 2, ECF No. 39-1; see Hr’g Tr. 25:10–12 (June 6, 2019). But Preeminent failed to sign

by the deadline. See Sec. Arbitrator’s Recusal at 2. After receiving an extension, Preeminent

3 signed the fee agreement but continued to delay its invoice payment. Id.; see Hr’g Tr. 25:17–19

(June 6, 2019). When Preeminent still had not remitted payment within hours of the new

deadline, the arbitrator reached out to the parties by email with a final notice. See Sec.

Arbitrator’s Recusal at 2.

In response, Preeminent claimed—without cause—that the arbitrator was biased against

it and in favor of the Union. See id. The arbitrator replied that “based solely on [the first

arbitrator’s] recusal email,” his only concern was ensuring he was paid for his services. Id. at 3.

He also noted “that during my 30 plus years as a neutral, my reputation regarding impartiality as

an Arbitrator or a Mediator has never been questioned.” Id. Maintaining his neutrally, the

arbitrator insisted once again that both parties abide by their fee agreement. Id. Preeminent

finally remitted payment later that day. See id. But before the scheduled arbitration, Preeminent

challenged the arbitrator once again, contending that his messages regarding payment indicated a

bias against Preeminent that “any objective observer” would interpret as partiality. See id.

This final challenge led directly to the arbitrator’s recusal. After describing Preeminent’s

challenges, he found that “its attack upon my impartiality put me in an untenable position as the

arbitrator of this case.” Id. He predicted that no matter which way he ruled on the Union’s

grievances, Preeminent’s challenges lay the foundation for a challenge; either from the Union

“because of Preeminent’s allegations of prejudice,” or from Preeminent, who “would believe that

my decision confirmed its allegations that I was prejudiced.” Id. He formally recused himself

and directed the parties to find another arbitrator.

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