Service Employees International Union Local 32bj v. Preeminent Protective Services Inc., 415 F.Supp.3d 29

The Court ordered Preeminent to arbitrate disputes with two Union members in May 2018; Preeminent repeatedly refused to participate, delay payment of arbitrators, and forced two arbitrator recusals.
The Union sought enforcement; the Court held three show-cause hearings (Nov. 16, 2018; Jan. 3, 2019; June 6, 2019) and warned Preeminent to pay its share of arbitration costs.
After continued obstruction, the Court found clear and convincing evidence of deliberate delay, held Preeminent in civil contempt, and imposed a conditional $20,000 sanction to compel arbitration; arbitration was completed 418 days after the initial order.
The Court directed Preeminent to pay the Union’s attorneys’ fees and expenses caused by Preeminent’s contemptuous conduct, set the relevant cutoff for compensable work as November 16, 2018, and asked for fee submissions.
The Court (1) found nearly all post-cutoff fees and travel expenses were caused by Preeminent’s bad faith, (2) applied Laffey Matrix market rates (including for in-house counsel), and (3) rejected Preeminent’s inability-to-pay argument.
Final award: Preeminent ordered to pay $51,097.20 in attorneys’ fees and expenses.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Preeminent must pay Union's fees for obstruction (sanctions under court's inherent power)	Preeminent’s repeated refusals and arbitrator recusals caused fees; compensation is warranted	Preeminent denied bad faith and argued it complied	Court found deliberate, contemptuous delay and ordered fees as compensatory sanctions
Which hours/expenses are compensable (temporal scope)	Fees and travel after Nov. 16, 2018 resulted from Preeminent’s conduct and are compensable	Some fees relate to legitimate litigation (e.g., motion practice) and should not be charged	Court limited compensable work to post-Nov. 16, 2018 hours, except hours spent opposing Preeminent’s Motion for Reconsideration (not charged)
Proper hourly rate for lodestar (market vs discounted)	Use Laffey Matrix market rates (attorneys could command higher rates despite discounted billing)	Award should be limited to Union’s actual (discounted) rates	Court applied Laffey Matrix rates to outside and in-house counsel to compute lodestar
Whether award should be reduced for Preeminent's inability to pay	Request mitigation of award based on financial inability	Award should be fully compensatory; victim’s loss, not wrongdoer’s means, controls	Court found Preeminent’s inability-to-pay evidence unpersuasive and refused to reduce the $51,097.20 award

Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017) (courts’ inherent power permits compensatory fee awards calibrated to bad-faith conduct)
Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (inherent authority to sanction bad-faith litigants)
Fox v. Vice, 563 U.S. 826 (2011) (compensatory fee awards should cover fees that would not have been incurred but for sanctioned conduct)
Hensley v. Eckerhart, 461 U.S. 424 (1983) (lodestar method: reasonable hours × reasonable rate)
Bd. of Trustees of Hotel & Rest. Emps. Local 25 v. JPR, Inc., 136 F.3d 794 (D.C. Cir. 1998) (approving market-rate awards even where attorneys discount fees)
Covington v. District of Columbia, 57 F.3d 1101 (D.C. Cir. 1995) (distinguishing discounted rates from market-rate awards)
Shales v. Gen. Chauffeurs, Sales Drivers & Helpers Local Union No. 330, 557 F.3d 746 (7th Cir. 2009) (compensatory sanctions tied to victim’s loss, not wrongdoer’s resources)
Hamilton v. Boise Cascade Express, 519 F.3d 1197 (10th Cir. 2008) (similar victim-centered approach to compensatory awards)
United States v. Gewin, 759 F.3d 72 (D.C. Cir. 2014) (assessing inability-to-pay claims on the facts)
Lakeland Bus Lines, Inc. v. N.L.R.B., 347 F.3d 955 (D.C. Cir. 2003) (business losses do not equal inability to pay)
Robertson v. Cartinhour, 883 F. Supp. 2d 121 (D.D.C. 2012) (inability to pay held irrelevant to compensatory fee award under § 1927)