The nation’s oldest radiology society has filed suit against Marriott, claiming the hotel giant breached a contract for the professional association’s 2023 annual meeting.
Filed April 18 in Virginia district court, the American Roentgen Ray Society is seeking $665,523 in damages along with any related attorneys’ fees, costs and interest accrued on the amount. The dispute dates to 2017, when ARRS signed a deal with the hotelier to hold its 2,000-attendee conference at the Marriott Wardman Park in Washington, D.C.
However, when COVID-19 hit in March 2020, the hotel was forced to temporarily close, with its owner later filing for bankruptcy and eventually shuttering the business in early 2021. ARRS claims Marriott knew in mid-2020 that the hotel was going to be closing permanently. But it gave assurances that such reports were false, and that the Wardman Park location would eventually reopen.
Behind the scenes, Marriott had sued the hotel’s owner and eventually scored a judgment of $18 million. This money should have gone to impacted parties such as ARRS, attorneys contend, yet it is has not.
“Marriott denied that it had ever entered into any contract at all with ARRS, refused to pay liquidated damages of $665,523, and told ARRS it had to take the matter up with the hotel owner’s lawyer,” the complaint states, noting this served as a breach of the 2017 agreement. “On an accelerated basis, having been misinformed by Marriott for nearly a year, ARRS had to reschedule its 2023 annual meeting at another location.”
The society later moved the meeting to Honolulu, Hawaii, with the event concluding on Thursday, April 20. ARRS attorneys declined to comment, while Marriott and a society spokesman did not immediately respond to a Radiology Business request for comment on Friday. Internal emails show Marriott allegedly knew it would need to pay liquidated damages for contracts like the one signed with ARRS, the suit says, along with the “significant reputational harm” that would come with the Wardman Park closing
“By June 2020, Marriott learned that the owner might close the hotel permanently for business reasons unrelated to the pandemic,” the suit claims. “This was not public knowledge at the time and Marriott did not share any such information with ARRS, which at that point had a reasonable belief that Marriott would honor the Marriott contract for the 2023 meeting.”
Even in February 2021, a Marriott account executive allegedly continued to contend that the hotel would reopen and that ARRS was not allowed to look elsewhere for its 2023 meeting.
“In March 2021, increasingly anxious about needing to re-plan its 2023 meeting location, ARRS reached out to Marriott for clarification, and at that point, the account executive simply directed ARRS to contact a lawyer for the owner,” attorneys contend. “The fact that Marriott received $18 million speaks for itself and confirms that some of this money was meant for paying canceled group contracts exactly like the one with ARRS,” they added later.
ARRS requested the payout in February 2022 but Marriott declined the following month, directing the society to confer with the bankrupt operator of the location. Wardman Hotel Owner LLC, an affiliate of Pacific Life Insurance Co., meanwhile, continued to direct society attorneys back to the larger corporate entity.
Based in Leesburg, Virginia, ARRS was founded in 1900 and is the specialty’s “first and oldest” society in the U.S., serving as a “forum for progress” in radiology since the discovery of the X-ray. On the other side, Marriott is one of the largest hotel chains in the world with 8,000-plus properties and nearly $20.8 billion in revenue last year.
Law.com first reported news of the lawsuit on Friday, April 21.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.