Court Opinion

ID: 4224479
Source: CourtListenerOpinion
Date Created: 2017-11-29 20:00:57.857373+00
Date Added: 2024-06-11T14:42:28.154369
License: Public Domain

UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

 C.J. MERCADANTE, et al.,
          Plaintiffs
        v.                                                Civil Action No. 11-1044 (CKK)
 XE SERVICES, LLC, et al.,
         Defendants

                                  MEMORANDUM OPINION
                                    (November 29, 2017)

       Nearly three years ago, the Court ordered Plaintiffs to pursue arbitration on the threshold

issue of whether their claims are arbitrable. Since that time, Plaintiffs have made only anemic

attempts to initiate arbitral proceedings, and in their most recent communications with the Court,

have admitted that “they will not pursue arbitration any further . . . .” Notice Concerning

Arbitration, ECF No. 83, at 1-2. Although Plaintiffs continue to represent that they “oppose

dismissal,” id., there is no question that Plaintiffs have made the strategic decision to not pursue

arbitration in order to compel dismissal of this lawsuit, so that they may pursue an appeal to the

United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”).

       Presently before the Court are Defendants’ [71] Motion to Dismiss and [77] Motion to

Reinstate the Motion to Dismiss. Defendants seek dismissal of this lawsuit pursuant to Federal

Rule of Civil Procedure 41(b) for Plaintiffs’ failure to prosecute this action in accordance with the

Orders of this Court. In a prior Memorandum Opinion, the Court held the Motion to Dismiss in

abeyance, providing Plaintiffs with “one final opportunity to move forward with the arbitration

proceedings,” despite concluding that Plaintiffs had failed to pursue their case with the requisite

diligence. Aug. 19, 2016 Mem. Op. and Order, ECF No. 75 (“Aug. 2016 Op.”), at 8 (emphasis in

original). Plaintiffs have intentionally squandered that opportunity. The Court has provided

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Plaintiffs with every reasonable accommodation to comply with the Orders of this Court. Plaintiffs

have not done so, and by their own admission, will not do so. Accordingly, the Court has no choice

but to GRANT Defendants’ Motion to Reinstate and Motion to Dismiss. This matter is

DISMISSED WITH PREJUDICE.

                                       I. BACKGROUND

       The Court has presented much of the factual and procedural background relevant to the

pending motions in its August 19, 2016 Memorandum Opinion and Order and its February 13,

2017 Order, ECF No. 82 (“Feb. 2017 Order”). Nevertheless, to facilitate a complete record of this

matter, the Court memorializes in full the sequence of events that has led to the dismissal of this

lawsuit for want of prosecution.

       The August 2016 Opinion relays the procedural history of this action following the Court’s

ruling on Defendants’ Motion to Compel Arbitration:

       On January 15, 2015, the Court ordered the parties to “proceed to arbitration in
       order for an arbitrator to determine, in the first instance, whether the claims in this
       action are arbitrable.” Order, ECF No. 63. Subsequently, after the parties’
       exchanged e-mails regarding future proceedings, Plaintiffs filed a Motion for
       Reconsideration or in the Alternative for Certification of Interlocutory Appeal,
       regarding this Court’s January 15, 2015, Order, which Defendants opposed. The
       Court denied that motion in its entirety. The Court explained that, if Plaintiffs
       continued to seek relief on the claims they brought in this case, they were required
       to proceed to arbitration as previously ordered by the Court. See Mem. Op. and
       Order, ECF No. 69, dated Aug. 13, 2015.

       In the aftermath of the Court’s decision on the motion for reconsideration, Plaintiffs
       asked Defendants whether they would consent to arbitration in Washington, D.C.
       Defendants responded that they insisted on arbitration in the locations within North
       Carolina specified in the underlying agreements with Plaintiffs. See Thorne Decl.,
       ECF No.71-2, ¶¶ 9-10. For six months, there was no further correspondence
       between the parties in the time between September 2015 and March 2016.

       On March 25, 2016, Plaintiffs submitted a Demand for Arbitration to the American
       Arbitration Association (“AAA”), under its rules for employment cases. Def.’s
       Mot., Ex. F, at 31. The demand encompassed class claims, as well as the individual
       claims of the four individual Plaintiffs in this case. See id. at 1 (“Individual and

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       class action on behalf of all similarly situated employees”); id. ¶¶ 34-43 (setting out
       basis for class claims). The AAA acknowledged receipt of Plaintiffs’ demand,
       including a payment of $200. Id., Ex. G, at 1. The letter explained that “[t]he
       preliminary filing fee under the Supplementary Rules for Class Arbitration is
       $3,350, of which claimants have paid $200.” Id. The letter further stated that “to
       proceed with administration, we request the $3,150 balance of the filing fee be
       submitted at this time.” Id. The AAA informed Plaintiffs that this payment was due
       on April 7, 2016. Id. On April 21, 2016, the AAA sent a follow-up letter to Plaintiffs
       indicating that the payment required by the March 29, 2016, letter had not been
       received. Id., Ex. H, at 1. Pursuant to the follow-up letter, payment was due on April
       30, 2016. Id. at 2. Subsequently, the AAA sent additional follow-up correspondence
       on June 10, 2016, by e-mail, indicating that no payment had yet been made. Id., Ex.
       I. The e-mail further stated that Plaintiffs were required to submit the balance of the
       fee by June 17, 2016, and that “[a]bsent receipt of the filing fee by June 17, we will
       administratively close our file.” Id. Plaintiffs’ counsel responded to that e-mail with
       a one-line e-mail stating only the following: “Please proceed on the individual
       claims. That’s what we were filing under.” Id., Ex. K. Representatives from the
       AAA’s Employment Filing Team responded as follows on June 13, 2016:

               Good Evening,

               Should claimants desire to proceed, we request that each claimant
               submit an individual demand for arbitration, along with a copy of
               the applicable arbitration agreement, and the appropriate filing fee.

               If we do not receive individual demands and the filing fee by June
               20, 2016, we will close our file.

               If you have any questions, please email employmentfiling@adr.org,
               and we will be happy to assist you. Kindly copy the opposing party’s
               representative on any response to this e-mail.

       Id. Plaintiffs did not respond to that communication. On June 22, 2016, the AAA’s
       Employment Filing Team sent the parties a letter stating the following:

               On March 29, 2016, April 21, 2016, and June 13, 2016, claimant
               was notified that the filing requirements for the above matter have
               not been met. The filing deficiency has not been cured. Accordingly,
               we have administratively closed our file without prejudice.

       Id., Ex. L. The letter further stated that “[i]n the future should you decide to
       resubmit this matter, please provide all the requisite information along with the
       appropriate filing fee.” Id.

Aug. 2016 Op. at 1–4. Shortly after the AAA administratively closed Plaintiffs’ abortive attempt

at arbitration, Defendants moved to dismiss for want of prosecution. In its initial ruling on that

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motion, the Court noted that it was “not until March 25, 2016, that Plaintiffs filed their demand for

arbitration with the AAA, [which was] seven months after the Court resolved Plaintiffs’ motion

for reconsideration and fourteen months after the Court initially ordered arbitration in this case.”

Aug. 2016 Op. at 5. Moreover, the Court noted that even after Plaintiffs filed for arbitration,

“[r]ather than complying with the instructions from the AAA, Plaintiffs simply failed to respond

to the communications from the AAA regarding their claims,” and even after they replied,

“Plainitffs failed to comply with the AAA’s requirement[s]—of which they were directly notified

. . . .” Id. As a result, as of August 2016, more than eighteen months after the Court had directed

Plaintiffs to pursue arbitration, the Court was faced with the reality that Plaintiffs had made no

diligent and concerted effort to arbitrate their dispute. Nevertheless, because Plaintiffs represented

that they were “seeking to have [their] individual claims reinstated in arbitration,” the Court

provided Plaintiffs “one final opportunity to comply with the requirements of the AAA and to

move forward with the arbitration proceedings.” Id. at 8. In that regard, the Court ordered Plaintiffs

to file a status report no later than October 19, 2016 “regarding the arbitration of the claims brought

in this action . . . .” The Court also emphasized, in no uncertain terms, that:

        [I]f Plaintiffs seek to continue to pursue the claims in this case, they must file and
        perfect arbitration demands before the AAA, including the payment of the required
        fees as set by the AAA, as well as demonstrate continued progress in pursuing those
        arbitration proceedings, by the date of that Status Report. Failure to do so risks
        the possibility that the Court will dismiss this case for want of prosecution at
        that time.

Id. at 9.

        The February 2017 Order begins where the August 2016 Opinion left off:

        On October 6, 2016, and less than two weeks before [the] Status Report regarding
        the progress of the arbitration was due with the Court, Plaintiffs filed a second
        demand for arbitration with the AAA. Mot. to Reinstate at 1–2. However, because
        the AAA determined that ‘this dispute arises from an independent contractor
        agreement,’ it informed the parties that ‘the AAA must proceed to administer this

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as a commercial matter under our Commercial Arbitration Rules.’ Mot. to
Reinstate, Attach. 1 at 1. The AAA added that the ‘parties are free to raise the issue
of classification to the arbitrator once selected.’ In light of this classification,
Plaintiffs were required to pay a filing fee that was potentially higher than the $800
they had already paid under the expectation that their arbitration would proceed as
an employment action. However, the correspondence from the AAA also states that

       the filing fee is based on the amount of the claim for compensatory
       damages. The claimant has not provided us with a claim amount for
       compensatory damages; therefore, we request that claimant provide
       us with correspondence indicating a claim amount. . . . If claimant
       cannot provide an exact claim amount, we will accept a statement of
       the estimated range in which the claim amount falls.

Absent receipt of this information from Plaintiffs, the AAA stated that it would
apply a “$7,000 fee for claims up to $10 million.” Id.

Defendants filed their [77] Motion to Reinstate on October 19, 2016. Plaintiffs
submitted their [78] Response on October 31, 2016, contending that they should
not be required “to pay an exorbitant fee of $7,000 for the privilege of finding out
what the answer is [to the arbitrability question], and perhaps to have the entire
matter referred back to this Court as non-arbitrable,” but otherwise conceding that
they had taken no further steps to pursue the arbitration. In light of this inaction, on
December 7, 2016, the Court issued a Minute Order instructing the parties to file
“a Joint Status Report on or before December 21, 2016, in which they provide the
Court with an update regarding the status of the arbitration proceedings, if any,
pertaining to the claims brought in this case. Specifically, the parties shall advise
the Court of any progress made, in the intervening period of 37 days since
Plaintiffs’ most recent submission to the Court . . . .’ The requested [80] Status
Report was filed on December 12, 2016, and informed the Court that no further
action had been taken by Plaintiffs to pursue arbitration other than to attempt to
confer with Defendants regarding “allocating fees to pursue arbitration,” a
conversation that Defendants declined to have. Accordingly, by Minute Order dated
December 20, 2016, the Court instructed the parties to have that discussion and to
advise the Court of its outcome. On December 21, 2016, Defendants filed a [81]
Status Report, which represented that they were unable to make contact with
Plaintiffs’ counsel, and informed the Court that they were unaware of any further
progress by Plaintiffs in pursuing the arbitration.

The Court subsequently noticed a hearing on February 13, 2017 on the [71] Motion
to Dismiss and [77] Motion to Reinstate the Motion to Dismiss. During the course
of that hearing, Plaintiffs’ counsel made clear that since he filed the renewed
demand for arbitration with the AAA on October 6, 2016, he had taken no further
steps to pursue the arbitration. In particular, despite his objections regarding the
onerous nature of the fees imposed by the AAA, Mr. Bloch has failed to take two
crucial actions that could potentially reduce the burden of those fees on his clients.

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       First, he has failed to provide the AAA with either a definite claim amount, or an
       estimate of the claim amount, which would allow the AAA to assess a filing fee
       lower than the $7,000 it charges for claims up to $10 million. Second, although Mr.
       Bloch is aware that the AAA provides fee waivers for claimants that fall below
       certain income thresholds, he informed the Court had he has yet to seek fee waivers
       on behalf of his four individual clients, who Mr. Bloch believes are disabled and
       currently unemployed. In this context, Mr. Bloch also raised the possibility that he
       would prefer to consent to dismissal rather than further pursue arbitration and
       related proceedings in this Court. Upon further inquiry by the Court, however, Mr.
       Bloch withdrew this position.

Feb. 2017 Order, at 1–3.

       In short, more than 24 months since the Court initially ordered Plaintiffs to proceed to

arbitration, Plaintiffs had still failed to even initiate arbitration proceedings, let alone proceed to

adjudicate the threshold issue of arbitrability as ordered by the Court in January 2015.

Nevertheless, although the Court was “mindful of its prior admonitions requiring Plaintiffs’

counsel to pursue arbitration expeditiously in a manner consistent with the Court’s Orders,” and

acknowledged “Defendants’ strenuous objections to any further proceedings in this matter,” the

Court declined to dismiss the case. Rather, the Court noted that while Plaintiffs’ counsel had

objected to the purportedly onerous filing fees charged by the AAA, he had failed to take two

actions that could result in the elimination or reduction of those fees; namely, seeking fee waivers

on behalf of the individual plaintiffs who would pursue arbitration, and providing the AAA with a

more definite claim amount for each plaintiff, which would result in a lower filing fee than the

default $7,000 charged by the AAA for claims up to $10 million. As a result, the Court ordered

Plaintiffs’ counsel to file a notice with the Court no later than February 24, 2017 “indicating

whether or not he has pursued the two actions described above, and if he has not, indicating

whether or not Plaintiffs at that juncture oppose dismissal of this matter for want of prosecution.”

Id.

       Plaintiffs timely filed that notice, and indicated that:

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       Counsel for Plaintiffs has investigated the issue of fees before AAA, as well as their
       program for applying for waiver of filing fees, and has concluded it would be futile
       to pursue the waiver of fees as Plaintiffs would not qualify. In addition, the amount
       of fees based on the amount in controversy per claim is more than Plaintiffs can
       afford and are exorbitant. Each of the Plaintiffs has been found to be permanently
       disabled based on PTSD and physical injuries.

ECF No. 83, at 1. Beyond this statement, Plaintiffs’ counsel provided no additional information on

why Plaintiffs would not qualify for an AAA fee waiver, or what specific steps he had taken to

confirm this view; how he had determined the amount of fees that the AAA would charge; or what

the individualized claim amount was for each Plaintiff, by which the AAA would determine the

filing fee. Counsel then represented, in no uncertain terms, that “Plaintiffs give notice that they

will not pursue AAA arbitration any further and will pursue their appeal rights of the prior orders

of the Court if the Court dismisses this action involuntarily for want of prosecution under [Federal

Rule of Civil Procedure 41(b)].” Id. at 1–2. In their response to Plaintiffs’ notice, Defendants

informed the Court that as of the date the notice was filed, Plaintiffs’ counsel had not been in

contact with the AAA since February 6, 2017—one week before the Court issued the February

2017 Order. ECF No. 84, at 2, Ex. A. Consequently, whatever “investigation” Plaintiffs’ counsel

may have undertaken with respect to a possible waiver or reduction in fees from the AAA, it

involved no consultation with the very persons that could facilitate such a waiver or reduction.

       Following Plaintiffs’ notice, the Court issued a Minute Order on March 15, 2017 that

excused the parties “from their obligation to file a Joint Status Report on March 17, 2017

‘informing the Court of the progress of the arbitration as of that time,’ as previously ordered by

the Court, see ECF No. 82,” given Plaintiffs’ representation that they would not pursue arbitration.

Ever hopeful, however, the Court added that if “there has in fact been progress in pursuing

arbitration, . . . Plaintiffs shall fill a notice on the docket indicating as much.” No such notice has

been filed.

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                                      II. LEGAL STANDARD

       Under Federal Rule of Civil Procedure 41(b), “[i]f the plaintiff fails to prosecute or to

comply with [the Federal Rules] or a court order, a defendant may move to dismiss the action or

any claim against it.” Fed. R. Civ. P. 41(b); see also LCvR 83.23 (“A dismissal for failure to

prosecute may be ordered by the Court upon motion by an adverse party, or upon the Court's own

motion.”). “A Rule 41(b) dismissal is proper if, in view of the entire procedural history of the case,

the litigant has not manifested reasonable diligence in pursuing the cause.” Bomate v. Ford Motor

Co., 761 F.2d 713, 714 (D.C. Cir. 1985). Consequently, “[a] lengthy period of inactivity may . . .

be enough to justify dismissal under Rule 41(b).” Smith-Bey v. Cripe, 852 F.2d 592, 594 (D.C. Cir.

1988); see also Cavezza v. U.S. Dep’t of Justice, No. CV 15-182 (JEB), 2015 WL 4938679, at *1

(D.D.C. Aug. 19, 2015) (same). The well-known Wright and Miller Federal Practice and

Procedure treatise elaborates on dismissals on this basis as follows:

       A lengthy period of inactivity by the plaintiff may be enough to justify a dismissal
       for failure to prosecute under Rule 4[1](b) in the circumstances of a particular case,
       and a significant number of federal courts have so concluded. This is particularly
       true if the plaintiff seems culpable in some significant respect. This might be
       suggested by the fact that he or she previously had been warned by the court that
       he or she must act with greater diligence, has failed to obey the mandates of the
       Federal Rules or the local rules of the court in which the action is pending or the
       terms of the district judge’s orders in the case, has presented no legitimate excuse
       for the delay, or if there are other factors aggravating the offending party’s inaction,
       particularly when it has resulted in prejudice to the defendant.

9 Wright & A. Miller, Federal Practice and Procedure, § 2370 (3d ed.) (footnotes omitted).

       “Because disposition of claims on the merits is favored, however, the harsh sanction of

dismissal for failure to prosecute is ordinarily limited to cases involving egregious conduct by

particularly dilatory plaintiffs, after ‘less dire alternatives’ have been tried without success.” Noble

v. U.S. Postal Serv., 71 F. App’x 69, 69 (D.C. Cir. 2003) (remanding case for further proceedings

because there was “no indication the court pursued other alternatives before resorting to the

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sanction of dismissal, and the court provided no notice to the pro se plaintiff that it was considering

this course”). Dismissal may be supported by “evidence in the record of ‘bad faith, deliberate

misconduct, or tactical delay,’” Gardner v. United States, 211 F.3d 1305, 1309 (D.C. Cir. 2000)

(quoting Trakas v. Quality Brands, Inc., 759 F.2d 185, 188 (D.C. Cir. 1985)), and by evidence of

prejudice to defendants caused by plaintiff’s failure to diligently pursue his or her lawsuit, Cherry

v. Brown-Frazier-Whitney, 548 F.2d 965, 969–70 (D.C. Cir. 1976) (affirming dismissal for want

of prosecution where the “the case had lain dormant for nearly seventeen months after it became

ripe for trial,” and “there was positive indication that the delay had operated prejudicially” upon

defendants). Unless otherwise specified by the Court, a dismissal for want of prosecution under

Rule 41(b) is an adjudication on the merits, and therefore with prejudice. Fed. R. Civ. P. 41(b)

(“Unless the dismissal order states otherwise, a dismissal under this subdivision (b) and any

dismissal not under this rule—except one for lack of jurisdiction, improper venue, or failure to join

a party under Rule 19—operates as an adjudication on the merits.”); see also 9 Wright et al., supra,

§ 2373 (“because an involuntary dismissal is an adjudication on the merits, it is, in the phrase

commonly used by the federal courts, ‘with prejudice.’”).

       Where the aforementioned criteria are satisfied in connection with a plaintiff’s failure to

pursue arbitration, numerous federal courts have held that dismissal for want of prosecution is

appropriate. See Ames v. Standard Oil Co. (Indiana), 108 F.R.D. 299, 303 (D.D.C. 1985) (“If in

light of this record, plaintiffs still hoped they could somehow delay and thereby avoid arbitration,

one cannot help but read in this record an assurance that hope springs eternal. Litigation, however,

should enjoy a significantly shorter lifespan.”); Salt Lick Bancorp v. F.D.I.C., 187 F. App’x 428,

447 (6th Cir. 2006) (affirming dismissal for failure to arbitrate); Krinsk v. SunTrust Bank, No. 8:09-

CV-00909-T-27MA, 2014 WL 202032, at *4 (M.D. Fla. Jan. 17, 2014) (noting that “[o]ther courts

                                                  9
have likewise dismissed cases with prejudice for lack of prosecution where the plaintiffs failed to

timely initiate arbitration as ordered”).

                                            III. DISCUSSION

        The record in this matter speaks for itself. It has now been nearly three years since the

Court initially ordered Plaintiffs to proceed to arbitration on the threshold issue of arbitrability. In

that period, Plaintiffs have failed to initiate an arbitration proceeding in accordance with the rules

of the AAA, let alone pursue arbitration with diligence. The Court may have earlier entertained the

notion that Plaintiffs’ delays stemmed from issues with perfecting their filings before the AAA, or

from the type of general delays that impact any modern adversarial action, but it has become plain

that Plaintiffs have no intention of diligently pursuing arbitration. Plaintiffs’ counsel has

consistently shown an unwillingness to communicate with the AAA on the most simple of issues

that would permit his clients’ arbitration demands to be adjudicated. Plaintiffs’ counsel has now

definitively represented that Plaintiffs simply will not pursue arbitration, and that they wait for the

Court to dismiss this case for want of prosecution so that they may pursue an appeal. From all this,

the Court is compelled to conclude that Plaintiffs have deliberately avoided arbitration as a

strategic decision to either have this Court reverse its prior ruling compelling arbitration, or to so

stymie the proceedings in this case that the Court has no choice but to order dismissal. In this latter

regard, they have succeeded. Plaintiffs’ have engaged in dilatory conduct; have repeatedly failed

to comply with the Orders of this Court; and have now made no secret of their strategic choice to

delay arbitration so that they may pursue an appeal. This is not a case of a single instance of

misconduct, but rather an example of a concerted effort to challenge an Order of the Court through

intransigence. Although the Court recognizes that dismissal for want of prosecution is an

extraordinary remedy, the specific factual circumstances of this case warrant that remedy. At this

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juncture, there are simply no other “less dire alternatives” that have not already been attempted by

the Court. Noble, 71 F. App’x at 69.

       In their earlier opposition, Plaintiffs challenged dismissal on essentially two bases. The

first was that they disagreed with the Court’s Orders requiring them to pursue arbitration on the

threshold issue of arbitrability. This argument appears to underlie much of the content of Plaintiffs’

most recent brief as well. The Court spoke with finality on this point in its August 2016 Opinion:

       The Court determined that, insofar as Plaintiffs would continue to pursue the claims
       in this case, it would be necessary for an arbitrator to determine the arbitrability of
       those claims. . . . Put simply, Plaintiffs’ suggestion that they ought not be forced to
       arbitrate has no place in opposing Defendant’s motion to dismiss for failure to
       prosecute.

Aug. 2016 Op. at 7. In short, the Court has ruled on this issue, and will not revisit it again.

       Plaintiffs have also opposed dismissal on the grounds that the arbitral fees they would face

are, allegedly, exceedingly high. The Court first addressed the issue of arbitral fees in its January

2015 Memorandum Opinion. See Jan. 15, 2015 Mem. Op., ECF No. 64 (“Jan. 2015 Op.”), at 19.

There, the Court assessed the validity of the delegation clause in the parties’ arbitration agreement

under the state law of North Carolina, as the parties agreed that the law of North Carolina applied.

Id. at 9 n.6 (“The parties do not contest the applicability of North Carolina law.”). Indeed, the issue

of arbitral fees only arose in the context of Plaintiffs’ contentions regarding substantive

unconscionability under North Carolina law. See id. at 19 (“Plaintiffs only point to one feature of

the delegation agreement that is substantively unconscionable: the shifting of attorneys’ fees and

expenses from Defendants to Plaintiffs.”); Pls.’ Supp. Mem., ECF No. 42-1 (relying on North

Carolina state law to assert that “the arbitration agreement is both procedurally and substantively

unconscionable”); Pls.’ Opp’n Mem. to Second Renewed Mot., ECF No. 26 (same). As the North

Carolina Court of Appeals had recently determined that “high arbitration costs . . . could no longer

                                                  11
be a basis for substantive unconscionability,” the Court concluded that Plaintiffs’ fee-based

challenge did not render the delegation clause unconscionable under North Caroline law. Jan. 2015

Op. at 20 (citing Torrence v. Nationwide Budget Finance, 753 S.E.2d 802, 811 (N.C. App. 2014)).

The Court reaffirmed that decision in an August 2015 Memorandum Opinion denying Plaintiffs’

Motion for Reconsideration or in the Alternative for Certification of Interlocutory Appeal.

       Although Plaintiffs challenged the delegation clause under North Carolina State law, before

deciding to dismiss this case the Court has considered—and requested briefing on—federal case

law on arbitral fees. In particular, the Court is mindful that the Supreme Court of the United States

in Green Tree Fin. Corp.-Alabama v. Randolph held that it “may well be that the existence of large

arbitration costs could preclude a litigant . . . from effectively vindicating her federal statutory

rights in the arbitral forum.” Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 90 (2000).

       The parties dispute whether the “effective vindication doctrine” set forth in Green Tree is

still viable and applicable in this case, but the Court need not resolve that dispute. Even assuming

that the doctrine applies, Plaintiffs have not carried their burden of showing that it excuses their

refusal to arbitrate under the particular facts of this case. The Supreme Court in Green Tree

expressly held that “where, as here, a party seeks to invalidate an arbitration agreement on the

ground that arbitration would be prohibitively expensive, that party bears the burden of showing

the likelihood of incurring such costs.” Green Tree, 531 U.S. at 92 (emphasis added); see also

Dowley v. Dewey Ballantine, LLP, No. CIV.A. 05-622(EGS), 2006 WL 1102768, at *7 (D.D.C.

Apr. 26, 2006) (“the plaintiff bears the burden of showing the likelihood of incurring burdensome

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expenses that would prohibit him from vindicating his statutory claims in an arbitral forum” (citing

Green Tree, 531 U.S. at 92)).

        Plaintiffs have definitively not satisfied this burden, despite being given a number of

opportunities to do so. Plaintiffs have never demonstrated that, were they to pursue arbitration on

the threshold issue of arbitrability, they would face prohibitive arbitration fees and costs. Plaintiffs

have recently submitted a declaration from their counsel which attempts to establish that the

arbitration fees in this case would be prohibitively high, and that Plaintiffs would not be eligible

for any relief from those fees. But, upon careful review, that declaration actually establishes that

Plaintiffs’ counsel has not taken the necessary—and simple—steps to determine the actual fees

AAA would require, and has not actually inquired with the AAA about obtaining any sort of

financial relief for his clients. The Court cannot excuse Plaintiffs of the obligation to arbitrate on

the basis of excessive costs when Plaintiffs refuse to take these actions. Plaintiffs’ counsel makes

bald statements such as “there is simply no scenario I could discern that would make the arbitration

process anything but impossible for Plaintiffs to afford,” that “it was [his] determination” that his

clients would not qualify for financial relief from AAA, and that he “believed it would be futile to

apply” for such relief. See Decl. of Scott J. Bloch, ECF No. 90-5, at ¶¶ 9-11. It is difficult to

understand why counsel would make such assumptions if Plaintiffs’ financial conditions are as

dire as he has suggested in other filings, including Plaintiffs’ declarations. Regardless, Plaintiffs’

counsel’s speculative statements and assumptions are plainly insufficient to satisfy Plaintiffs’

burden, and Plaintiffs have not submitted any competent, credible evidence supporting them.

        Plaintiffs themselves have also submitted their own declarations, but these are similarly

insufficient. In summary form, the declarations of the Plaintiffs each contain a statement of their

monthly income, a statement from each that they have been informed by their counsel that the fees

                                                  13
for arbitration would be between $3,000 and $7,000, and assertions from each that they “cannot

afford” those fees. Not only are these declarations premised on assumptions about the costs of

arbitration that Plaintiffs were provided by their counsel—which, as discussed above, are

unsubstantiated and not credible—their vague attestations about their monthly income and costs

are insufficient to demonstrate the sort of prohibitive financial situation that could justify their

refusal to prosecute this case.

       In short, at no time during the lengthy delay since the Court ordered Plaintiffs to arbitrate

have Plaintiffs submitted sufficient evidence to establish that they should be relieved of the

obligation to do so on the grounds of excessive cost. Even if the record hints that arbitration could

be costly, the costs to Plaintiffs are highly speculative. They are speculative not only because the

arbitration agreements calls for the arbitrator to allocate fees between the parties—a fact Plaintiffs

largely attempt to ignore in their papers—but also because Plaintiffs have refused to take the

necessary—and completely feasible—steps to discover the actual total fee for arbitration. Under

such circumstances, the Court simply cannot allow Plaintiffs to use the specter of potential costs

to avoid Court-ordered arbitration.

                                        IV. CONCLUSION

       For the reasons set forth above, the Court finds that Plaintiffs have presented no adequate

excuse for failing to comply with this Court’s order that they proceed to arbitration. They have

failed to prosecute their case and failed to comply with Court Orders. Accordingly, the Court will

GRANT Defendants’ Motion to Reinstate and Motion to Dismiss. This matter is DISMISSED

WITH PREJUDICE. An appropriate Order accompanies this Memorandum Opinion.

                                                          /s/
                                                      COLLEEN KOLLAR-KOTELLY
                                                      United States District Judge

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