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

District of Columbia

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

District Court, District of Columbia·Decided May 8, 2020·No. Civil Action No. 2017-1679·Published

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 ORDER

Preeminent Protective Services, Inc. (“Preeminent”) delayed court-ordered arbitration for

over a year without cause. So the Court held Preeminent in contempt and ordered it to repay

Service Employees International Union Local 32BJ (the “Union”) for unnecessary attorney fees.

See Serv. Emps. Int’l Union Local 32BJ v. Preeminent Protective Servs., Inc., 415 F. Supp. 3d 29

(D.D.C. 2019); Order (11/8/2019), ECF No. 55. Preeminent appealed to the D.C. Circuit and has

now moved to stay the Court’s Order pending appeal. The Union has cross-moved for another

contempt order. For the following reasons, the Court will deny Preeminent’s motion for a stay,

direct Preeminent to pay the fee award, and grant in part and deny in part the Union’s motion.

I.

The Court’s previous opinion thoroughly reviewed the history of the case. See

Preeminent, 415 F. Supp. 3d at 31–33. As the Court said, “[d]espite 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.” Id. at 31. The Court found that Preeminent’s sanctioned conduct

directly cost the Union $51,097.20 in attorney fees and expenses. Id. at 34–37. And the Court rejected Preeminent’s argument that it could not pay, finding its evidence “scant and

unpersuasive” and “dubious.” Id. at 37–38. The Court ordered Preeminent to pay the full award

within 60 days. Order (11/8/2019).

Preeminent appealed to the D.C. Circuit, where the parties’ appellate briefs are still

pending. See Not. of Appeal, ECF No. 56; Docket, Case No. 19-7157 (D.C. Cir.). Then just

before its payment deadline, Preeminent moved here to stay the Order pending appeal. Def.’s

Mot. to Stay, ECF No. 60. The Union cross-moved for a new contempt order. See Pl.’s Cross-

Mot., ECF No. 62. Now both motions are fully briefed and ripe for decision.

II.

“A party must ordinarily move first in the district court for . . . a stay of the judgment or

order of a district court pending appeal[.]” Fed. R. App. P. 8(a)(1). A stay may be appropriate

when an Order touches “an admittedly difficult legal question and when the equities of the case

suggest that the status quo should be maintained.” Washington Metro. Area Transit Comm’n v.

Holiday Tours, Inc., 559 F.2d 841, 844–45 (D.C. Cir. 1977).

The Court considers four factors: “(1) whether the stay applicant has made a strong

showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably

injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties

interested in the proceeding; and (4) where the public interest lies.” Hilton v. Braunskill, 481

U.S. 770, 776 (1987); see also Va. Petroleum Jobbers Ass’n v. FPC, 259 F.2d 921, 925 (D.C.

Cir. 1958). The question depends on a “balance of the equities.” Washington Metro. Area

Transit Comm’n, 559 F.2d at 843. But the first two factors—likelihood of success on the merits

and irreparable harm—are the most critical. Nken v. Holder, 556 U.S. 418, 434 (2009).

2 III.

With this balance in mind, the Court weighs Preeminent’s request and finds it wanting.

First, Preeminent has not shown it is likely to succeed on the merits. Here Preeminent

repeats its familiar refrain that it “complied with the Court’s orders concerning arbitration.”

Def.’s Mot. to Stay at 2. But this betrays the facts, as the Court has reviewed before. See

Preeminent, 415 F. Supp. 3d at 31–33. Recall that Preeminent forced the recusals of two

arbitrators and appeared for three show cause hearings before it eventually “complied.” See id.;

cf. Def.’s Mot. to Stay at 2. By then, 418 days had passed since the Court’s first Order and

Preeminent was facing a $20,000 civil contempt penalty. Preeminent, 415 F. Supp. 3d at 31–33.

This was hardly willing compliance.

Nor is Preeminent likely to prevail with its argument that the Court’s Order was “criminal

rather than civil or compensatory.” Def.’s Mot. to Stay at 2. Indeed, the Court was exceedingly

careful to “closely calibrate[]” its award only “to Preeminent’s bad faith,” excluding from the

calculus “any punitive reason.” Preeminent, 415 F. Supp. 3d at 37 (citing Goodyear Tire, 137 S.

Ct. 1178, 1186 (2017)). “It is not enough that the chance of success on the merits be better than

negligible.” Nken, 556 U.S. at 434 (quotation omitted). Yet Preeminent’s rehashing of old

arguments with no legal authority raises hardly a specter of success.

Second, even if Preeminent’s appeal succeeds, it must also show that denying the stay

will deal irreparable injury. It will not. Preeminent says—once again, without legal or factual

support—that it cannot secure the money to satisfy the Court’s judgment. Def.’s Mot. to Stay at

1. Indeed, the Union points to evidence suggesting that much of Preeminent’s alleged financial

distress is illusory. See Pl.’s Reply at 2, ECF No. 64 (“Preeminent cites a criminal indictment

. . . claiming that it was victimized by fraud. . . . [T]his indictment and plea agreement do not

3 mention Preeminent – the fraud victims are identified as individual investors[.]” (citing United

States v. Dunn, No. 19-cr-00174-LO (E.D. Va.), ECF No. 1)).

But even if Preeminent’s financial distress is real, it is compensable dollar-for-dollar.

“The key word in this consideration is irreparable. Mere injuries, however substantial, in terms

of money, time and energy necessarily expended in the absence of a stay, are not enough.” Va.

Petroleum Jobbers, 259 F.2d at 925. A successful appeal would return the fee to Preeminent,

precisely the type of “compensatory or other corrective relief . . . [that] weighs heavily against a

claim of irreparable harm.” Id. So the Court is unconvinced by Preeminent’s bald assertion that

it “will be decimated or non-existent by the time the Court of Appeals reaches such a decision.”

Def.’s Mot. to Stay at 3.

Finally, the balance of harms and public interest do not support a stay. Although

granting the stay may not “substantially injure” the Union, Hilton, 481 U.S. at 776, it is still

entitled to compensation for the dozens of hours wasted in response to Preeminent’s conduct,

see Preeminent, 415 F. Supp. 3d at 38. And even if the public interest is not a strong factor here,

it tilts toward timely enforcement of the Court’s careful judgment. See Maness v. Meyers, 419

U.S. 449, 458 (1975) (“We begin with the basic proposition that all orders and judgments of

courts must be complied with promptly.”).

Weighing these factors shows that the two most important considerations—the likelihood

of success on the merits and irreparable harm—both counsel against a stay. See Nken, 556 U.S.

at 434.

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