D.C. Circuit Affirms Award of Fees

Carlton Fields
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Carlton Fields

This case arose out of an employment dispute between Preeminent Protective Services Inc., which provides security services in and around the District of Columbia, and the Service Employees International Union Local 32BJ. When Preeminent took over a contract, it refused to hire two guards who had previously worked there. The union claimed the refusal violated a collective bargaining agreement.

The union filed a petition to compel arbitration of that claim in federal court in the District of Columbia. In May 2018, the district court granted summary judgment to the union and ordered the parties to arbitrate. After Preeminent stalled the arbitration for more than a year, the district court held Preeminent in contempt for failing to comply, and awarded $51,000 in costs and attorneys’ fees to the union based on a “lodestar” figure, reflecting the number of hours worked by each union lawyer multiplied by a reasonable hourly rate for each lawyer.

Preeminent appealed all three orders of the district court: the motion to compel arbitration, the contempt order, and attorneys’ fees. However, the D.C. Circuit lacked jurisdiction to review the arbitration and contempt orders, which were final decisions not timely appealed. On appeal, Preeminent raised three challenges to the fee award.

First, Preeminent argued it was impermissibly punitive to use prevailing market rates as opposed to actual rates. The D.C. Circuit rejected that argument, noting that the court has repeatedly upheld the use of prevailing market rates in determining appropriate awards under statutory fee-shifting provisions.

Second, Preeminent claimed that the district court miscalculated the prevailing market rates. The D.C. Circuit again rejected that argument, finding that although the union’s attorneys charged discounted rates, they were nevertheless worthy of market rates given their experience and credentials.

Finally, Preeminent argued the district court should have lowered the award to account for Preeminent’s inability to pay. The D.C. Circuit rejected that argument based on contradicting evidence that showed Preeminent had active contracts worth more than $2.5 million.

The D.C. Circuit therefore affirmed the district court’s fee award on the merits.

Service Employees International Union Local 32BJ v. Preeminent Protective Services Inc., No. 19-9157 (D.C. Cir. May 18, 2021).

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