Supplier denied, on waiver grounds or outside the scope of Law 75, attorney’s fees it incurred to confirm arbitration award

In Conmed Corporation v. First Choice Prosthetic, 2023 WL 3647908 (N.D.N.Y. 2023), the Northern District granted the supplier First Choice’s motion to confirm an arbitration award and denied the distributor Conmed’s motion to vacate. Subsequently, First Choice moved to reconsider, arguing it was entitled to fee recovery under Law 75 in the proceedings to confirm the award. The federal court held: 1) that the movant did not meet the high standard for reconsideration under Rule 59(e) and had waived the argument; 2) an award of fees to a prevailing party supplier is discretionary under B. Fernandez v. Kellogg’s First Circuit’s reasoning where the supplier incurred in fees after prevailing in a preliminary injunction proceeding on appeal but had not prevailed by judgment on the ultimate merits; 3) the supplier’s motion to confirm is not a Law 75 action so that fee recovery is not contemplated under Law 75, and 4) in Casco, Inc. v. John Deere Construction, 596 F. 3d 359 (D.P.R. 2022), the District of Puerto Rico held that a distributor prevailing in a Law 75 action was entitled to fee recovery under parameters similar to Title VII or Section 1988 of the Civil Rights Act, and First Choice was no such distributor. Had First Choice preserved the argument, the court would have had to reach the issue whether the principal may recover attorney's fees in a Law 75 arbitration initiated by the distributor, provided it shows bad faith as a prevailing defendant must to recover its fees in a civil rights case.On another note, there is a fee recovery case pending on appeal to keep an eye on. That is, Holsum v. ITW Foods, where a defendant prevailed at trial in a breach of contract case and appealed from the district court’s denial of fee recovery. Essentially, Peerless argues that it is entitled to fee recovery by contract and for temerity under Rule 44.1. See 2023 WL 3479459 (CTA 1). A final observation. Fee recovery litigation has been the norm in civil rights cases. Until Casco v. John Deere and because Kellogg v. B. Fernandez involved the supplier's appeal from a preliminary injunction and not a fee claim by the distributor, there had been no reported cases in fee recovery for merits litigation under Law 75. I predict that with more litigants becoming aware of the standards for fee recovery in Law 75 cases there should be an uptick in collateral fee litigation as is the norm in civil rights cases.