United States District Court, District of Columbia
Deborah D. Peterson, et al. Plaintiffs,
Islamic Republic of Iran, et al. Defendants.
MEMORANDUM AND ORDER
HONORABLE ROYCE LAMBERTH UNITED STATES DISTRICT JUDGE.
movants-Mr. David Cook and his firm, Cook Collection
Attorneys, PLC (collectively "Cook")-now seek a
common law equitable lien over the plaintiffs'
attorneys' ("respondents") share of the
recovery in this case and sequestration of the portion
disputed in the ongoing arbitration between Cook and the
respondents. ECF No. 575. Cook formerly worked as collection
counsel in this case.
the fifth time and the third forum in which Cook has sought
relief similar to that for which he asks here. Previously, in
this Court, Cook sought an "attorney's charging
lien" against the funds "to be received by the
Plaintiffs" in this case. ECF No. 528 at 1-2. This Court
granted the plaintiffs' motion [ECF No. 539] to quash
that lien because Cook had no contractual or attorney-client
relationship with the plaintiffs; rather, Cook has a
contractual relationship with the plaintiffs' attorneys.
(ECF No. 564). The D.C. Circuit affirmed that decision.
Peterson v. Islamic Republic of Iran, 724 Fed.Appx.
1 (D.C. Cir. 2018).
sought similar relief in the Southern District of New York.
There, he tried to assert a statutory charging lien under New
York law on the proceeds being used to satisfy the
Peterson judgment and other judgments against Iran.
The District Court denied Cook's motion to intervene to
assert this lien as untimely, Peterson v. Islamic
Republic of Iran, No. 10-cv-4518, 2016 WL 9447953
(S.D.N.Y. June 6, 2016), and the Second Circuit affirmed,
Peterson v. Islamic Republic of Iran, 690
Fed.Appx. 744 (2d Cir. 2017).
also sought similar relief in arbitration. Cook has, for the
past several years, arbitrated the merits of his contract
claim against the respondents and other attorneys who have
been involved in this litigation with JAMS in New York. Twice
in the course of that arbitration, once in 2016 and once in
2018, Cook has sought from the arbitrator an interim award
creating some form of security interest in any funds that the
respondents receive from the trust that now holds the funds
pending payments to the plaintiffs. Specifically, Cook sought
to enjoin or otherwise prevent the respondents from acquiring
and spending as they will any payments they receive from
those funds as attorney's fees. Both times, the
arbitrator denied Cook's petitions. See
generally Arbitration Order No. 2, ECF No. 577-2;
Arbitration Order No. 15, ECF No. 577-3. Both times, the
arbitrator chastised Cook for his flagrant forum shopping.
Id. Both times, the arbitrator characterized
Cook's efforts as attempts to effect pre-judgment
attachment. Id. And both times, the arbitrator made
clear that Cook's requests should be denied on their
merits. Id. In both cases, the arbitrator said that
The merits of the case are still very much in dispute. The
Claimants (Cook) have offered no evidence of the irreparable
harm they may suffer if the injunction is not granted, other
than a conclusory assertion for the need for
"security" from an "empty award." The
Respondents, on the other hand, would suffer harm as a result
of the restrictions placed on their ability to spend these
funds as they see fit. Finally, a grant of the relief
requested by the Claimants would promote forum-shopping which
disserves the public interest.
Order No. 15, ECF No. 577-3 at 5-6.
been denied four times already (six, if you count the
appeals) in three separate forums, Cook now tries again to
obtain a security interest in the judgment proceeds of this
case, this time in the form of a common law equitable lien
over and sequestration of the respondents' share of the
recovery. In response to Cook's motion, the respondents
move to compel arbitration of Cook's motion and to stay
proceedings in this case. Having reviewed the record and the
applicable law, the Court grants the respondents' motion,
compels Cook to arbitrate his motion, and stays proceedings
in this case until arbitration is completed.
3 of the Federal Arbitration Act [FAA] entitles litigants in
federal court to a stay of any action that is 'referable
to arbitration under an agreement in writing.'"
Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 625
(2009) (quoting 9 U.S.C. § 3). Cook and the respondents
have a written agreement that contains an arbitration clause
requiring arbitration of "any disputes by and among any
of the attorneys." ECF No. 575-3, p.4, ¶5.
attempt to secure an equitable lien over and sequestration of
any funds that the respondents may receive for their services
in this case qualifies as a dispute among the attorneys. Even
if the arbitration agreement were narrowly construed to cover
only disputes arising out of the contract, this dispute would
meet that criterion as it arises out of Cook's attempt to
secure and collect payment for services allegedly performed
under the contract. That this dispute is arbitrable is amply
demonstrated by Cook's two previous attempts to obtain
nearly identical relief from the arbitrator. Because this
dispute is arbitrable, the Court must stay proceedings
between these litigants until arbitration has been had in
compliance with the parties' agreement.
argues that his motion need not be referred to arbitration
for three reasons. First, he argues that the arbitrator has
decided to defer to this Court on this issue. Second, he
argues that the respondents are in default in proceeding with
arbitration under § 3 of the FAA. Third, he argues that
the arbitrator has no authority to issue the lien/injunction
he seeks because it would bind nonparties to the arbitration
agreement. All of these arguments are meritless.
The Arbitrator Has Not Decided to Defer to the ...