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International Union of Operating Engineers Local 825 Employee Benefit Funds v. Getty Contracting LLC

United States District Court, D. New Jersey

July 20, 2015

INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 825 EMPLOYEE BENEFIT FUNDS AND THE TRUSTEES THEREOF, Petitioner,
v.
GETTY CONTRACTING LLC, Respondent.

MEMORANDUM ACCOMPANYING ORDER TO SHOW CAUSE

KEVIN McNULTY, District Judge.

The petition asks the Court to confirm six arbitration awards. There is some question, however, as to whether the Respondent has been properly served. I will therefore order the Petitioner to show cause why the petition should not be denied for improper service (or, in the alternative, to remedy any defect). In addition, I note a few issues with the awards that should be addressed in Petitioner's submission.

Background

The Petitioner in this case, International Union of Operating Engineers Local 825 Employee Benefit Funds and the Trustees Thereof (the "Fund"), is a trust benefiting a union of construction workers. The Fund pays employee benefits to union members. It alleges that respondent, Getty Contracting LLC, entered into a collective bargaining agreement whereby Getty agreed to make payments to the Fund. Getty, the Fund seems to allege, was delinquent in making these contributions during various periods from August of 2013 through April of 2014. The Fund has initiated six arbitration proceedings against Getty. It appears, though, that the Funds sought not the delinquent contributions themselves but rather interest, liquidated damages, and attorneys' fees. This is unexplained.

Getty did not appear in the arbitration. The arbitrator therefore entered six default awards. Each award ordered Getty to pay some combination of interest, liquidated damages, attorneys' fees, and an arbitrator's fee.

• Five of the six orders awarded interest. The award indicates that the arbitrator used an interest rate of "5.25% (Prime plus 2%)." None of the awards indicates the principal amount upon which this interest payment calculation is based, nor the period during which the balance was outstanding.
• Five of the six awards awarded "Liquidated Damages." These appear to have been calculated as 20% of the amount of interest due. See, e.g., Referral No. 7362IL, awarding $74.82 of liquidated damages, which is 20% of the interest amount of $374.10.
• All six orders award "Attorney's fees and costs." For five of the six awards, this is calculated as 15% of the interest due. For the sixth award (No. 7370FS), the calculation is not apparent from the award.
• Each of the six awards orders Getty to pay an $800 arbitration fee.

In total, the six awards ordered Getty to pay some $7, 227.91, comprising $2, 427.91 in interest, attorneys' fees, and liquidated damages, plus $4, 800.00 in arbitration fees.

Discussion

Getty has petitioned this Court to confirm the arbitrator's awards pursuant to 9 U.S.C. § 9. Getty has not entered an appearance or otherwise defended this case. The record, though, leaves some question as to whether Getty has been properly served with the petition or with the motion to confirm the arbitration award under 9 U.S.C. § 9. I will therefore order the Fund to show cause as to why the Petition should not be dismissed for failing to properly serve the Respondent. For the benefit of the parties, I will also take this opportunity to note two apparent discrepancies in the award that should be addressed in any subsequent submission.

Service

The Federal Arbitration Act allows any party to an arbitration to apply to a federal district court to confirm the award. 9 U.S.C § 9. The Act, however, also requires that the Petitioner properly serve the Respondent with the application. How that service must be accomplished depends on whether ...


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