New York City District Council of Carpenters v. Allied Design and Construction, LLC

Filing 12

ORDER ADOPTING REPORT AND RECOMMENDATION: For the reasons stated in the attached Memorandum & Order, the Court has reviewed and adopts 9 Chief Magistrate Judge Roanne L. Mann's well-considered Report & Recommendation in its entirety. 28 U.S.C . § 636(b)(1); Fed. R. Civ. P. 72(b)(3). The Court thus grants the Petition to confirm the arbitration awards and awards Petitioner $8,868.24 ($7,947.24 as awarded to Petitioner by the Arbitrator and $921 in fees and costs associ ated with this Petition). The Court further awards Petitioner prejudgment interest from November 7, 2016, on $7,947.24, to be calculated by the Clerk of Court pursuant to 28 U.S.C. § 1961, as well as post-judgment interest on $8,868.24, also calculated pursuant to 28 U.S.C. § 1961. The Clerk of Court is respectfully requested to enter judgment and close this case accordingly. Ordered by Judge Pamela K. Chen on 9/13/2018. (Cuevas Ingram, Joanna)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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NEW YORK CITY DISTRICT COUNCIL
OF CARPENTERS,
Petitioner,

MEMORANDUM & ORDER

-against17-CV-6461 (PKC)(RLM)
ALLIED DESIGN AND CONSTRUCTION,
LLC,
Respondent.
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PAMELA K. CHEN, United States District Judge:
On November 6, 2017, Petitioner New York City District Council of Carpenters
(“Petitioner” or the “Union”) filed a petition, pursuant to Section 301(a) of the Labor Management
Relations Act (“LMRA”), 29 U.S.C. § 185(c), seeking to confirm two arbitration awards that had
been issued against Respondent Allied Design and Construction, LLC (“Respondent” or “Allied”).
(See Petition to Confirm Arbitration Awards (“Pet.”), Dkt. 1.) On April 10, 2018, after the
deadline had expired for Allied’s response, the Court referred the Petition to the Honorable Roanne
L. Mann, Chief United States Magistrate Judge, for a Report and Recommendation (“R&R”),
pursuant to 28 U.S.C. § 636(b).
On August 7, 2018, Judge Mann issued an R&R recommending that the Court: (1) confirm
the two arbitration awards and grant in substantial part the relief sought in the Petition, including:
(a) $7,947.24 total in arbitration awards and (b) $921 in fees and costs; (2) grant both prejudgment
and post-judgment interest awards to Petitioner at a lower federal rate under 28 U.S.C. § 1961; and
(4) deny, in part, Petitioner’s request for $2,000 in arbitrator’s fees. (Dkt. 9.)

Petitioner timely

filed limited objections to the R&R on August 24, 2018, objecting only to Judge Mann’s
recommendations regarding prejudgment interest and the arbitrator’s fees. (Dkt. 10.)

For the reasons set forth below, the Court adopts Judge Mann’s thorough and well-reasoned
R&R in its entirety.
STANDARD OF REVIEW
When reviewing a report and recommendation by a magistrate judge, a district court “may
accept, reject, or modify, in whole or in part, the findings or recommendations made by the
magistrate judge.” 28 U.S.C. § 636(b)(1). The Court makes a “de novo determination of those
portions of the report or specified proposed findings or recommendations to which objection is
made.” See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3) (“The district judge must determine de
novo any part of the magistrate judge’s disposition that has been properly objected to.”) (emphasis
added). Courts have held that when invoking de novo review, “[t]he district court need not . . .
specifically articulate its reasons for rejecting a party’s objections [.]” LaBarbera v. D. & R.
Materials Inc., 588 F. Supp. 2d 342, 344 (E.D.N.Y. 2008) (quotations and citations omitted).
However, objections that are merely perfunctory responses argued in an attempt to engage
the district court in a rehashing of the same arguments set forth in the original petition will not
suffice to invoke de novo review of the magistrate’s recommendations. Further, the objections
must be specific and clearly aimed at particular findings in the magistrate judge’s proposal.
McDonaugh v. Astrue, 672 F. Supp. 2d 542, 547 (S.D.N.Y. 2009) (quotations and citations
omitted).

“General or conclusory objections, or objections which merely recite the same

arguments presented to the magistrate judge, are reviewed for clear error.” O’Diah v. Mawhir,
08–CV–322, 2011 WL 933846 (TJM)(DRH), at *1 (S.D.N.Y. March 16, 2011) (citing Farid v.
Bouey, 554 F. Supp. 2d 301, 306 n.2 (N.D.N.Y. 2008); Frankel v. N.Y.C., 06-CV-5450 (LTS)
(DFE), 2009 WL 465645, at *2 (S.D.N.Y. Feb. 25, 2009)). Finally, “[i]n this district and circuit,
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it is well established law that a district judge will not consider new arguments raised in objections
to a magistrate judge’s report and recommendation that could have been raised before the
magistrate but were not.” Illis v. Artus, 06-CV-3077 (SLT) (KAM), 2009 WL 2730870, at *1
(E.D.N.Y. Aug. 28, 2009) (quotations and citations omitted) (collecting cases).
DISCUSSION
Petitioner raises only two objections to the R&R (Petitioner’s Objections, “Pet. Obj.”, Dkt.
10, at ECF 1-2)1, both of which could not have been meaningfully raised below. The Court,
therefore, reviews these objections de novo. McDonaugh, v. 672 F. Supp. 2d at 547; 28 U.S.C. §
636(b)(1); Fed. R. Civ. P. 72(b)(3).
I.

Arbitrator’s Fees
Petitioner objects to the R&R’s recommendation that the Court deny Petitioner’s request

for the Respondent’s share of the arbitrator’s fees. (Pet. Obj., at ECF 1-4; R&R at ECF 7-8.) In
this case, the Collective Bargaining Agreement (“CBA”) between Petitioner and Respondent
provides that “[t]he costs of the arbitration, including the arbitrator’s fee shall be borne equally by
[Allied] and [Petitioner] the Union.” (Affidavit of Lydia Sigelakis dated May 25, 2018 (“Sigelakis
Aff.”), Exhibit (“Ex.”) 2 (CBA), Dkt. 7-1, Article XIII, Section 4(b) at 36-37, ECF 54-55.) In
each of the awards, Arbitrator Roger Maher (the “Arbitrator”) found, pursuant to the CBA, that
“the parties have agreed to share the cost of the Arbitrator’s fee”, and specifically listed and
enumerated the amount owed the Arbitrator by each party in the award. (Pet., Ex. A, Dkt. 1-1 at
ECF 3 and Ex. B, Dkt. 1-2 at ECF 3.) Petitioner and Respondent each owed $2,000 for the two

“ECF” refers to the pagination generated by the court’s CM/ECF system, and not the
document’s internal pagination.
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hearings conducted by the Arbitrator. (See id.) The awards stated that the Arbitrator’s fee was
to be paid by the parties “directly to the arbitrator.” (Id.) Respondent subsequently failed to
satisfy any of its obligations pursuant to the awards, both to Petitioner and the Arbitrator. (Pet. ¶
14 and Sigelakis Aff. ¶ 18.) The Petition included, inter alia, a specific request that Respondent
pay $2,000 as its half of the Arbitrator fees for the two hearings. (Pet. at ECF 4.) The Petition,
however, does not state to whom the Arbitrator fees should be paid.
In most cases in this District, where, as here, (1) an arbitrator directs both parties to split
the arbitrator fee pursuant to the CBA, (2) the arbitrator specifies the amount to be paid by each
party in the award, (3) the employer fails to pay its share, and (4) the petition to confirm the award
requests payment of the employer’s unpaid share of the arbitrator’s fee, an arbitrator’s fee may be
properly awarded in the judgment to confirm the award.

See N.Y. City District Council of

Carpenters v. Best Made Floors, Inc., 706 Fed. Appx. 31 at *6 (2d Cir. 2017) (affirming December

22, 2016 judgment in favor of Petitioner, awarding, inter alia, “$1,500 in fees in favor of the
Arbitrator.”); N.Y. City & Vicinity Dist. Council of Carpenters v. Vardaris Tech. Inc. No. 16-CV6428 (DLI) (ST), 2018 WL 2050590, at *5 (E.D.N.Y. Jan. 3, 2018, report and recommendation
adopted, E.D.N.Y. Mar. 13, 2018) (awarding petitioner $500 as respondent employer’s half of the
arbitrator’s fee); New York City & Vicinity Dist. Council of Carpenters v. Sukhmany Constr. Inc.,
No. 16-CV-6360 (RRM), 2018 WL 1462235, at *1 (E.D.N.Y. Feb. 6, 2018), report and
recommendation adopted, 2018 WL 1459457 (E.D.N.Y. Mar. 23, 2018) (same); New York City &
Vicinity Dist. Council of Carpenters v. Golden Dev. & Constr. Corp., No. 15-CV-4462
(KAM)(JO), 2016 WL 4523927, at *1-2 (E.D.N.Y. Aug. 22, 2016) (confirming $950 award to
petitioner for respondent’s half of the arbitrator’s fee).
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However, here, Petitioner has failed to clarify whether it is seeking reimbursement of
Respondent’s share of the arbitrator’s fee as a direct cost, or instead, whether it is seeking a
judgment award of $2,000 to be paid directly to the Arbitrator as a neutral third party. The awards
in this case unequivocally state that each party must pay their half of the fee to “directly to the
Arbitrator”. (Ex. A, Dkt. 1-1 at ECF 3 and Ex. B, Dkt. 1-2 at ECF 3.) There is nothing in the
CBA provisions or the arbitration awards provided to the Court to indicate that Petitioner “may
stand in the shoes of the arbitrator to recover unpaid fees.” New York City Dist. Council of
Carpenters v. Trinity Phoenix Constr. Corp., No. 17-CV-609 (DLI) (SJB), 2018 WL 1521862, at
*6 (E.D.N.Y. Jan. 10, 2018) (“To the extent an arbitrator seeks to recover fees from [respondent
employer] then an arbitrator could initiate any collection action or other proceeding, relying on
whatever agreement an arbitrator has with [respondent employer] to recover unpaid fees.”)2
In Korean Trade Ins. Corp. v. Eat It Corp., No. 14-CV-3456 (MKB) (RLM), 2015 WL
1247053, at *5, adopting report and recommendation (E.D.N.Y. Mar. 16, 2015), the district court
denied a petitioner’s request for an additional award of $4,656.47 as one-third of the total
arbitration expenses, because the petition (1) did “not articulate[] why [petitioner] should be able
to recoup that portion of the costs”, (2) failed to provide “any evidence of the actual amount of the
arbitration costs” and (3) made no reference to these costs. Id. While Petitioner in this case did
provide evidence of the actual arbitration costs (Ex. A, Dkt. 1-1 at ECF 3 and Ex. B, Dkt. 1-2 at

Article XIII, Section 4(e) of the CBA allows for the recovery of “court costs” by the
prevailing party. (CBA, Ex. 2, Dkt. 7-1 at 37, ECF 55.) “[H]owever, court costs are not arbitration
costs.” Trinity Phoenix Constr. Corp., 2018 WL 1521862, at *6, n. 5. Moreover, Petitioner has
failed to specify to the Court whether it has paid arbitration fees as costs incident to its court filings
or whether it is seeking reimbursement of such costs.
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ECF 3), and Petitioner specifically requested the amount owed the Arbitrator in the original
Petition (Pet. at ECF 4), it did not explain why Petitioner itself is entitled to Respondent’s unpaid
half of the arbitrator’s fee.
This case is also distinguishable from cases in which the arbitration awards specifically
directed reimbursement of the respondent’s unpaid half of the arbitration fee to the petitioner. Cf.
New York City Dist. Council of Carpenters v. Dash Floor Covering, Inc., 17-CV-0798 (ARR)
(JO), 2018 WL 1370267, at *4 (E.D.N.Y. Mar. 1, 2018), report and recommendation adopted,
2018 WL 1368026, at *4 (E.D.N.Y. Mar. 16, 2018) (confirming $1,000 award based on arbitrator’s
“determin[ation] . . . that [the respondent] should reimburse the Union for half of the $2,000
arbitration fee.”). Indeed, payment of the respondent’s share of the arbitrator’s fees to the
petitioner in that circumstance makes sense, because it can be assumed that the petitioner has paid,
or committed to paying, the entire arbitrator’s fee and has agreed to bear the responsibility and risk
of collecting the respondent’s share. Here, the arbitration awards did not direct that Respondent’s
share of the arbitrator’s fee be paid to Petitioner, but instead directed that the arbitrator’s fee be
paid to “directly to the Arbitrator”. (Ex. A, Dkt. 1-1 at ECF 3 and Ex. B, Dkt. 1-2 at ECF 3.)
Accordingly, based on its de novo review, the Court adopts the R&R’s recommendation
that Petitioner’s request for Respondent’s share of arbitration fees be denied.

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II.

Prejudgment Interest
Petitioner further objects to the R&R’s recommendation that the federal prejudgment

interest rate under 28 U.S.C. 1961 be applied,3 rather than the rate sought in the Petition, based
upon the N.Y. C.P.L.R. § 5004 rate of nine percent (9%) per annum. (Pet. Obj., at ECF 4-6; R&R
at ECF 8-10.) District courts have discretion to set prejudgment interest rates. Sukhmany
Constr., Inc., 2018 WL 1462235, at *2; see also Jones v. UNUM Life Ins. Co. Of Am., 223 F.3d
130, 139 (2d Cir. 2000) (whether to award prejudgment interest is entrusted to court’s discretion).
While it is the “common practice” in this Circuit “to grant interest at a rate of 9% per annum under
New York State law” in labor cases involving the confirmation of arbitration awards, Bldg.
Material Teamsters Local 282, I.B.T. v. A Star Bus. Servs. of New York Corp., No. 11-CV-4646,
(KAM) (CLP) 2012 WL 3568262, at *6 (E.D.N.Y. May 30, 2012), report and recommendation
adopted, 2012 WL 3230481 (E.D.N.Y. Aug. 6, 2012) (internal quotation marks omitted), the Court
should ensure that “the interest rate [does] not overcompensate the Petitioner.” Sarhank Grp. v.
Oracle Corp., No. 01-CV-1285 (DAB), 2004 WL 324881, at *4 (S.D.N.Y. Feb. 19, 2004), vacated
and remanded on other grounds, 404 F.3d 657 (2d Cir. 2005).
Here, Judge Mann denied Petitioner the New York statutory interest rate of 9% because it
“did not act expeditiously in filing its Petition but instead waited until the statute of limitations

28 U.S.C. § 1961 links the federal post-judgment interest rate to “the rate of interest the
government pays on money it borrows” in U.S. Treasury bills. Jones v. UNUM Life Ins. Co. of
Am., 223 F.3d 130, 139 (2d Cir. 2000) (citing 28 U.S.C. § 1961(a)). See, e.g., Retail, Wholesale
& Chain Store Food Employees Union, Local 338 v. Red Apple Supermarkets, No. A98-CV-0215
(DGT), 1999 WL 551253, at *5 (E.D.N.Y. June 24, 1999) (applying 28 U.S.C. § 1961 rate to
prejudgment interest, and granting petition to confirm arbitration award under the LMRA).
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was about to expire.” (R&R at ECF 10.) Judge Mann held that awarding Petitioner the “more
generous” prejudgment interest rate, under these circumstances, would “result in a windfall”.
(Id.) The Court agrees.
Recognizing that courts in this Circuit have granted prejudgment interest at the 9% rate
where a petition to confirm an arbitration award was filed right before the expiration of the statute
of limitations period, see, e.g., Golden Dev. & Constr. Corp., 2016 WL 4523927, at *3 (awarding
9% prejudgment interest rate where petition was filed nearly a year after arbitration award);
Sukhmany Constr., Inc., 2018 WL 1462235, at *2, report and recommendation adopted, 2018 WL
1459457 (awarding 9% prejudgment interest rate where petition was filed nearly 11 months after
arbitration award), the Court nonetheless finds that Petitioner’s decision not to file the Petition
until the limitations period had almost run should not be rewarded by a higher interest rate. To
do so would incentivize and encourage parties in straightforward cases such as this one to be
dilatory and delay filing so as to maximize the amount of prejudgment interest awarded. Sarhank
Grp., 2004 WL 324881, at *4 (holding that “interest rate must not overcompensate the Petitioner”).
Accordingly, based on its de novo review, the Court adopts the R&R’s recommendation
that the federal prejudgment interest rate be applied.
CONCLUSION
Accordingly, for the reasons stated above, the Court adopts the well-considered R&R in its
entirety. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3) . The Court thus grants the Petition to
confirm the arbitration awards and awards Petitioner $8,868.24 ($7,947.24 as awarded to
Petitioner by the Arbitrator and $921 in fees and costs associated with this Petition). The Court
further awards Petitioner prejudgment interest from November 7, 2016, on $7,947.24, to be
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calculated by the Clerk of Court pursuant to 28 U.S.C. § 1961, as well as post-judgment interest
on $8,868.24, also calculated pursuant to 28 U.S.C. § 1961. The Clerk of Court is respectfully
requested to enter judgment and close this case accordingly.

SO ORDERED.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: September 13, 2018
Brooklyn, New York

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