Opinion
21-CV-01090-YY
11-08-2022
CASCADE STEEL ROLLING MILLS, INC., Plaintiff, v. UNITED STEELWORKERS INTERNATIONAL UNION LOCAL 8378, Defendant.
FINDINGS AND RECOMMENDATIONS
Youlee Yim You, United States Magistrate Judge.
FINDINGS
Plaintiff Cascade Steel Rolling Mills, Inc., an employer, brings this action against defendant United Steelworkers International Union Local 8378 seeking to vacate an arbitration award stemming from a collective bargaining agreement. Compl., ECF 1. This court has jurisdiction pursuant to 28 U.S.C. § 1331, as plaintiff seeks to vacate the arbitration award under either the Federal Arbitration Act (9 U.S.C. § 10) or the Labor Management Relations Act (29 U.S.C. § 185).
Plaintiff has filed a motion for summary judgment, ECF 20, and defendant has filed a motion for judgment on the pleadings. ECF 17. For the reasons stated below, plaintiff's motion for summary judgment should be DENIED, and defendant's motion for judgment on the pleadings should be GRANTED, except that defendant's request for attorneys' fees should be DENIED.
Defendant notes that, alternatively, its motion may be evaluated as a motion for summary judgment. Def. Mot. 2, ECF 17.
I. Summary Judgment Standard
Under Federal Rule of Civil Procedure 56(a), “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The party moving for summary judgment bears the initial responsibility of informing the court of the basis for the motion and identifying portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party does so, the nonmoving party must “go beyond the pleadings” and “designate ‘specific facts showing that there is a genuine issue for trial.'” Id. at 324 (citing FED. R. CIV. P. 56(e)).
In determining what facts are material, the court considers the underlying substantive law regarding the claims. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). Otherwise stated, only disputes over facts that might affect the outcome of the suit preclude the entry of summary judgment. Id. A dispute about a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Id. at 248-49. A “scintilla of evidence” or “evidence that is merely colorable or not significantly probative” is insufficient to create a genuine issue of material fact. Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). The court “does not weigh the evidence or determine the truth of the matter, but only determines whether there is a genuine issue for trial.” Balint v. Carson City, Nev., 180 F.3d 1047, 1054 (9th Cir. 1999). “Reasonable doubts as to the existence of material factual issue are resolved against the moving parties and inferences are drawn in the light most favorable to the non-moving party.” Addisu, 198 F.3d at 1134 (citation omitted).
II. Factual Background
Plaintiff is the operator of an Oregon steel mill; defendant is a union representing workers at plaintiff's facility. This suit arises from the arbitrator's adjudication of defendant's Grievance No. 19014-U (“grievance”) that defendant submitted to plaintiff on May 30, 2019. Cirner Decl., Ex. 1, ECF 21-1. Three key documents are at issue here and referred to repeatedly throughout these findings and recommendations:
(1) The Collective Bargaining Agreement (“C.B.A.”) (Compl., Ex. 1, ECF 1-1, at 1) that was effective between the parties from 2016 through 2019;
(2) The arbitrator's January 14, 2021 “Opinion and Award” (hereafter “Interim Award”) (Compl., Ex. 2, ECF 1-1, at 65); and
(3) The arbitrator's September 8, 2021 “Final Award” (hereafter “Final Award”) (Def. Answer, Ex. C., ECF 8, at 81).
The abbreviation “C.B.A.” (with periods) is a short citation for the parties' collective bargaining agreement found at Compl., Ex. 1, ECF 1-1.
For ease of reference, cited page numbers refer to ECF pagination, not the original pagination of the underlying document, when the exhibit is large.
Defendant's grievance cites four violations, “19007-Y, 19010-U, 19011-F, [and] 19012-MS,” Cirner Decl., Ex. 1, ECF 21-1, which correspond to matters involving Justin Rice (19007 Y), a group action involving multiple union members (19010-U), Brian Johnson (19011-F), and Mike Barnes (19012-MS). The reference to Rice (19007-Y) was in error; when defendant's representative listed 19007-Y, he meant to write 19009, which was a violation pertaining to Chris Gardner. During the grievance process, correspondence between the parties referred to violation 19007-Y as the “Chris Gardner termination.” See, e.g., Interim Award, Compl., Ex. 2, ECF 1-1 at 68 (citing email from defendant's union representative to Diana Zolotko, “invoking the language in 28.6.A” on the “Chris Gardner Termination” with the mislabeled grievance number 19007-Y); Cirner Decl., Ex. 7 at 7:15-7:24, ECF 21-7 (Zolotko confirming during the arbitration hearing that she listed the incorrect number 19007-Y “as connected to [the] Chris Gardner termination” in a document from May 2019). Moreover, Rice's termination was ultimately resolved in a separate action. See Cirner Decl., Ex. 3, ECF 21-3. This discrepancy was not clarified until the morning of the arbitration hearing, where Zolotko indicated that it was a union representative who provided the incorrect number. See Cirner Decl., Ex. 7 at 6:17-7:06 (Zolotko confirming that a union representative “put [the grievance] numbers” on the form).
In its grievance, defendant alleged that plaintiff violated Section 28.6.A of the parties' C.B.A. in that plaintiff “failed to respond to Step III grievances in a timely fashion.” Cirner Decl., Ex. 1, ECF 21-1. Generally, Section 28.2 provides for three successive “steps” for resolving a grievance-Steps I, II, and III-each with differing procedures for resolution. See C.B.A., Compl., Ex. 1, ECF 1-1 at 54-55. Importantly, Section 28.4 allows for “Expedited Grievance Procedures” when “processing group grievances which allege a breach of the contractual obligations of the Company,” such as the one at issue in this case. Id. at 56 (emphasis added). Such grievances go straight to Step III. Id. Step III requires that a meeting, including the facility's Human Resources Manager (or designee), the Union President, and Grievance Committee Chairperson (among other persons), “shall be held within seven (7) calendar days after the date of [the Step III] appeal.” Id. at 55. Step III also requires that the “Human Resources Manager . . . shall issue a written answer . . . within seven (7) calendar days after the Step III meeting.” Id. Under Section 28.6.A, which defendant cited in its grievance, “[a]ll grievances will automatically be resolved in favor of the party who has presented its position to the responding party in writing and the responding party has failed to comply with the applicable contractual time limits for appropriate response.” Id. at 56.
The Step III meeting for the four violations listed in defendant's grievance occurred on May 15, 2019. Interim Award, Compl., Ex. 2, ECF 1-1 at 67. Under the seven-day deadline set forth in Section 28.2, plaintiff's human resources manager, Zolotko, had until May 22, 2019, to provide her Step III decision. Zolotko did not provide a decision until May 31, 2019-16 days after the meeting. Id. Upon receiving the decision, defendant's labor representative, Ron Rodgers, informed Zolotko of the delayed response, and sought automatic resolution pursuant to Section 28.6.A. Id. at 67-69; C.B.A., Compl., Ex. 1, ECF 1-1 at 54-55. Zolotko replied, “You are correct; I was late. Please initiate a grievance and should the Union decide to move the matter forward, we will let an arbitrator decide the matter for each of these cases.” Interim Award, Compl., Ex. 2, ECF 1-1 at 68. Rodgers replied that arbitration was unnecessary because Section 28.6.A automatically resolved the parties' disputes in defendant's favor, but he filed a grievance anyway. Id. at 69.
The dispute was assigned to arbitrator Tamoush and set for a hearing. At the hearing, the only contested violations were those pertaining to Gardner and Barnes who had been terminated from employment. Interim Award, Compl., Ex. 2, ECF 1-1 at 67. Defendant argued for a straightforward application of Section 28.6.A, asserting that because Zolotko failed to provide her decision within seven days of the Step III meeting, it was entitled to prevail. Id. at 70. Plaintiff proffered four arguments: that (1) the arbitrator should evaluate the merits of each termination instead of automatically applying the C.B.A.'s forfeiture clause, (2) Zolotko's delay in responding was due to family issues (in other words, excusable and not malicious) and immaterial, (3) the parties had previously agreed to extensions or ignored time limits altogether, and (4) terminations were governed under a separate section of the C.B.A.-Section 29.3- which contained no temporal deadline for the employer's response. Id. at 70-71.
Both the Interim Award and Final Award erroneously refer to “Johnson and Barnes.” Interim Award, Compl., Ex. 2, ECF 1-1 at 67; Final Award, Answer, Ex. C, ECF 8 at 81. However, the Final Award clarifies that employees Gardner and Barnes were to be reinstated. Final Award, Answer, Ex. C, ECF 8 at 82; see also Cirner Decl., Ex. 7 at 2:13-2:15 (defendant representing at the arbitration hearing that “the two cases we're focusing on is the termination of Mr. Gardner and termination of Mr. Barnes.”).
On January 14, 2021, the arbitrator issued an opinion and award in defendant's favor. Id. at 65. The decision primarily focused on Zolotko's response to Rodgers' notification of the seven-day violation. The arbitrator wrote that in acknowledging error, but insisting that the union file a grievance, Zolotko (and plaintiff) “essentially refused to bargain collectively.” Id. at 72. The arbitrator added that Zolotko “agree[d] [she] was late in responding,” which meant the matter had to be resolved in favor of the union because “it had taken all the appropriate steps to implement [Section] 28.6.” Id. The arbitrator then ordered a resolution that included, in relevant part:
3. The parties are ordered to meet and agree on appropriate remedies, including the right to back pay and appropriate interest for the time off taken by the individual Grievants.
4. The Undersigned retains jurisdiction solely to deal with issues raised regarding the above remedy and/or to resolve questions about the amount of money due each Grievant, if any.Id. at 74.
On March 23, 2021, Rodgers asked the arbitrator to “retain [his] jurisdiction over the issue until May 1, 2021” to facilitate a potential settlement between the parties. Cirner Decl., Ex. 8 at 1, ECF 21-8. The arbitrator replied:
I cant[sic] really retain jurisdiction[n]. You both can agree on any changes to my Award, or ask me to decide new issues, but I am what is referred to as functus officio, that is, I have no more involvement in this matter[.]Id. Ultimately, settlement negotiations were unsuccessful, and plaintiff filed suit in this court on July 23, 2021. Compl., ECF 1.
On September 8, 2021, the arbitrator issued his “Final Award,” finding that the parties were unable to “agree upon appropriate remedies” as recommended in his January 14, 2021 opinion and award, and ordered the following:
1. Management of the Company is ordered to reinstate Employees Gardner and Barnes, to their former position or to any position agreed to by the Union.
2. Management of the Company is ordered to pay the Employee's for lost time since their time of cessation of their employment. Reinstatement shall include lost wages and other benefits as described in the discussion above, plus reasonable interest.
Final Award, Def. Answer, Ex. C, ECF 8 at 82. On April 19, 2022, pursuant to this court's order, plaintiff filed an Amended Complaint, which included a challenge to the arbitrator's September 8, 2021 Final Award. Am. Compl., ECF 29; Order, ECF 28.
III. Authority for Judicial Review
A. Lack of Jurisdiction Over the January 14, 2021 Interim Award
Defendant first asserts that this court lacks jurisdiction over the Complaint because the arbitrator's January 14, 2021 opinion and award was not a final decision. Def. Mot. 6-8, ECF 17; Def. Resp./Reply 3-10, ECF 23. The Federal Arbitration Act, 9 U.S.C. § 1 et. seq. (“FAA”), and the Labor Management Relations Act, 29 U.S.C. § 185 (“LMRA”), allow federal courts to adjudicate the validity of a final award; interim awards, in contrast, fall beyond the court's jurisdiction. Aerojet-Gen. Corp. v. Am. Arbitration Assoc., 478 F.2d 248, 251 (9th Cir. 1973) (“The basic purpose of arbitration is the speedy disposition of disputes without the expense and delay of extended court proceedings. To permit what is in effect an appeal of an interlocutory ruling of the arbitrator would frustrate this purpose.”) (citation omitted); Orion Pictures Corp. v.Writers Guild of Am., W., Inc., 946 F.2d 722, 724 (9th Cir. 1991) (“A district court may review an arbitrator's rulings pursuant to section 301 of the LMRA only after there is a final award.”). “To be considered ‘final,' an arbitration award must be intended by the arbitrator to be [a] complete determination of every issue submitted.” Millmen Local 550 v. Wells Exterior Trim, 828 F.2d 1373, 1376 (9th Cir. 1987) (quoting Anderson v. Norfolk & Western Ry. Co., 773 F.2d 880, 883 (7th Cir. 1985)). The fact that an arbitrator “retains jurisdiction in order to decide a substantive issue the parties have not yet resolved . . . ‘indicates that the arbitrator did not intend the award to be final.'” Id. at 1376-77.
Applying these standards, the arbitrator's January 14, 2021 opinion and award appears to be interim in nature. The award was comprised of four components:
1. The grievance of the Union charging the Company with violation of 28.6 when Management failed to respond in a timely mannager[sic], is sustained.
2. The grievances of Johnson and Barnes are not subject to arbitration on their merits in that the Company did not respond to their grievances in a timely manner. Rather the Grievances are resolved in the Grievants favor.
3. The parties are ordered to meet and agree on appropriate remedies, including the right to back pay and appropriate interest for the time off taken by the individual Grievants.
4. The Undersigned retains jurisdiction solely to deal with issues raised regarding the above remedy and/or to resolve questions about the amount of money due each Grievant, if any.
Interim Award, Compl., Ex. 2, ECF 1-1 at 74 (emphasis added). The third and fourth components of the award suggest that the arbitrator's decision was not final, as he not only left issues such as back pay and appropriate interest for time off unresolved (for the parties to find agreement on), but also expressly retained jurisdiction to resolve issues in case the parties failed to reach a solution. Id.
Moreover, the language in the arbitrator's January 14, 2021 opinion and award is remarkably similar to language that the Ninth Circuit found in Millmen established an interim award. Specifically, in Millmen:
The arbitrator held that Well's Exterior Trim had violated the relevant sections of the bargaining agreement. The arbitrator's decision provided that “[t]he question of remedy in its entirety is remanded to the Parties, the Arbitrator retaining jurisdiction in the event that the Parties cannot agree upon such remedy.”828 F.2d at 1374-75. In finding that the arbitrator's holding was an interim award, the court explained that “the issue of damages [must] be resolved in order for an award to be considered final.” Id. at 1376. Here, in a similar vein, the absence of specified remedies in the arbitrator's award and his retention of “jurisdiction solely to deal with issues raised regarding the above remedy” establishes that the January 14, 2021 award was an interim one, and thus it cannot be evaluated by this court. Interim Award, Compl., Ex. 2, ECF 1-1 at 74.
Plaintiff disagrees with this conclusion, arguing that an arbitration award can be considered final if “the Arbitrator retain[s] jurisdiction for implementation, not for any substantive purpose.” Pl. Opp. 9, ECF 19. Plaintiff points to the Ninth Circuit's Orion Pictures decision, which established that when “an arbitrator retains jurisdiction in order to decide a substantive issue the parties have not yet resolved, this retention of jurisdiction indicates that the arbitrator did not intend the award to be final.” 946 F.2d at 724 (emphasis added). Plaintiff seizes upon the term “substantive issue” and argues that the arbitrator's retention of jurisdiction was solely to implement whatever remedy the parties decided upon, thus serving no substantive purpose. Pl. Opp. 9-10, ECF 19.
There are two problems with plaintiff's interpretation. First, the arbitrator retained jurisdiction to not just implement any agreed-upon remedies, but also “to resolve questions about the amount of money due each Grievant, if any.” Interim Award, Compl., Ex. 2, ECF 1-1 at 74. Put differently, the role the arbitrator reserved was not merely one in which to passively approve of any remedies; he also reserved the authority to devise and enforce a solution in the event both sides failed to reach an agreement-a power he eventually executed. Id.; see Final Award, Def. Answer, Ex. C, ECF 8 at 81-82. Second, and relatedly, at least two substantive issues were left unresolved in the arbitrator's interim award: (1) whether the employees were entitled to back pay, and if so, what amount; and (2) whether the employees would be reinstated to their previously-held positions. Id. Indeed, when confronted with a substantively similar award in Millmen-one that had “the question of remedy in its entirety [] remanded to the Parties, the Arbitrator retaining jurisdiction in the event that the Parties cannot agree upon such remedy”- the Ninth Circuit found that “the arbitrator did not intend the award to be final.” 828 F.2d at 1376.
The three out-of-district cases that plaintiff cites only reinforce the principle stated above. See Pl. Mot. 10, ECF 20. In Aerojet Rocketdyne, Inc. v. Int'l Union, United Auto., Aerospace &Agric. Implement Workers of Am., No. CV 17-5122 PSG (SKX), 2017 WL 9500948 (C.D. Cal. Nov. 27, 2017), the court found that an arbitrator who “retained jurisdiction for the purpose of implementation, not to redress liability, amend the remedy, or propose a new remedy” had issued a final award, not an interim one. Id. at *4. But unlike the arbitrator here, who issued an award that left open the specific contours of a remedy for the parties to determine, the arbitrator in Aerojet Rocketdyne issued a comprehensive award that “described a remedy” and “fully addresse[d] all the issues presented.” Id. Similarly, in Int'l Union v. Martinrea HeavyStampings, Inc., No. 3:11-22-DCR, 2011 WL 3475301 (E.D. Ky. Aug. 9, 2011), an arbitrator issued an award that not only detailed specific remedies for the parties' dispute, but also expressly limited the retention of his jurisdiction to only “resolve any issues associated with the implementation of this Award.” Id. at *1. Using those facts, the Int'l Union court concluded that the arbitrator “clearly resolved both of the substantive issues presented to him”-“eligibility for early retirement and who would pay the benefits”-and found that the arbitrator's award was a final one. Id. at *3, *5. And in Int'l Bhd. of Elec. Workers, Loc. Union No. 124 v. Alpha Elec. Co., the court determined that an award ordering a company to “make any . . . employee who lost work . . . whole for all economic losses” and “make all fringe payments required by the inside labor agreement” was final because it “specified a make-whole remedy.” 759 F.Supp. 1416, 1420-21 (W.D. Mo. 1991).
These cases are distinguishable from this dispute in two ways. First, each award within these cases offered a specific and comprehensive remedy (i.e., back pay, retirement eligibility, fringe payments, making an employee whole) that provided clarity as to what an aggrieved employee would receive. In contrast, the arbitrator here offered little specificity in his award, and expressly left the issue of “appropriate remedies” for the parties to “meet and agree” upon. Interim Award, Compl., Ex. 2, ECF 1-1 at 74. Second, two of plaintiff's three cases involved courts that reserved jurisdiction solely for the implementation of any specified award. See Aerojet Rocketdyne, Inc., 2017 WL 9500948 at *1-*2; Int'l Union, 2011 WL 3475301 at *1. The arbitrator here not only reserved jurisdiction for implementation of an award, but also to “resolve questions about the money due each Grievant” if the parties failed to agree on “appropriate remedies.” Interim Award, Compl., Ex. 2, ECF 1-1 at 74. It is also these two distinguishing features-the lack of specific and comprehensive remedies, and the reservation of jurisdiction in the event the parties failed to agree upon them-that makes the arbitrator's January 14, 2021 award an interim one. And, as stated earlier, “[a] district court may review an arbitrator's rulings . . . only after there is a final award.” Orion Pictures, 946 F.2d at 724. Thus, this court cannot review the arbitrator's interim award unless and until plaintiff establishes that the September 8, 2021 final award is within the court's jurisdiction.
B. Filing of Amended Complaint to Include September 8, 2021 Final Award
As noted, plaintiff has filed an Amended Complaint that includes allegations regarding the September 8, 2021 final award. While plaintiff has maintained it is under no obligation to amend the complaint, see Pl. Reply 2, ECF 24, in response to defendant's argument regarding lack of jurisdiction, plaintiff argued, in the alternative, that “[t]he Court should freely give leave when justice requires”-a direct quotation from Rule 15(a)(2), which governs amendments to pleadings. Id. at 3. Thus, on April 6, 2022, the court ordered plaintiff to file an Amended Complaint “that includes a petition seeking to vacate the final arbitration award” issued on September 8, 2021. Order, ECF 28. Otherwise stated, when the court directed plaintiff to file an Amended Complaint, it did so in response to plaintiff's alternative argument that it could successfully amend the Complaint to include the arbitrator's final award. Moreover, the court's order was not a one-sided demand: the court expressly provided defendant the opportunity to “formally respond to such amendment”-an opportunity that defendant accepted and used. Order, ECF 28; Def.'s Resp. Am. Compl., ECF 32.
The minute order contained a clerical error and stated September 8, 2020, rather than September 8, 2021.
Defendant contends that the court's order directing plaintiff to file an Amended Complaint “violates the party presentation principal[sic] that requires the Court to respond to the party's positions, not initiate litigation positions.” Def. Resp. Am. Compl. 3, ECF 32. However, as discussed above, the court merely acted in response to plaintiff's suggestion that the court grant leave to amend-and provided defendant with an equal opportunity to respond. Moreover, the order was issued with the goal of expediting the case. By requesting that plaintiff file an Amended Complaint and giving defendant the opportunity to respond to it, the court ensured that it possessed all the filings and information it needed to issue a ruling; it also assembled a comprehensive record so that a district judge could review the matter without any additional amendment-related delay.
C. Arbitrator's “Functus Officio” Comment
Plaintiff separately argues that the January 14, 2021 award was intended to be final because two months later, the arbitrator “relinquished jurisdiction” by declaring that his role was “functus officio.” Pl. Mot. 10 & 10 n.4, ECF 20. After the arbitrator issued his January award, the parties began to “work[] on a potential settlement.” Cirner Decl., Ex. 8 at 1, ECF 21-8. In March 2021, the parties requested that the arbitrator “retain [his] jurisdiction over the issue until May 1st, 2021” to facilitate such efforts. Id. The arbitrator replied:
Now that I have issued my Opinion and Award, and submitted my Invoice, accurately this time I hope, I cant[sic] really retain jurisdictio[sic]. You both can agree on any changes to my Award, or ask me to decide new issues, but I am what is referred to as functus officio, that is, I have no more involvement in this matter. Best wishes in your good work, Phil Tamoush, Arbitrator.Id. Plaintiff seizes upon the arbitrator's comment that he had “no more involvement” in the dispute to argue that he was forfeiting jurisdiction and had no authority to issue a later award on September 8, 2021. Pl. Mot. 10 & 10 n.4, ECF 20.
The court does not profess to have mind-reading abilities, and will not attempt to decipher what the arbitrator meant in writing those words. However, an arbitrator declaring that he is “functus officio” is not inconsistent with an ability to issue a final award. As plaintiff notes, “it is (a) fundamental common law principle that once an arbitrator has made and published a final award[,] his authority is exhausted and he is functus officio and can do nothing more in regard to the subject matter of the arbitration.” McClatchy Newspapers v. Cent. ValleyTypographical Union No. 46, Int'l Typographical Union, 686 F.2d 731, 734 (9th Cir. 1982), amended sub nom. McClatchy Newspaper v. Local 46 (9th Cir. Sept. 22, 1982) (quoting La Vale Plaza, Inc. v. R. S. Noonan, Inc., 378 F.2d 569, 572 (3d Cir. 1967)). But defendant is also correct in highlighting that there are several exceptions to the doctrine, including one where “an arbitrator can correct a mistake which is apparent on the face of his award, complete an arbitration if the award is not complete, and clarify an ambiguity in the award.” Id. at 734 n.1. And that is precisely what happened here: the arbitrator issued an interim award that left open the question of remedies for the parties to agree upon, and after the parties failed to agree upon various remedies, the arbitrator completed the award by providing them. Thus, the arbitrator did not relinquish his jurisdiction nor forfeit his ability to issue the September 8, 2021 award.
D. Jurisdiction Over the September 8, 2021 Award
Again, in order to proceed to the merits, plaintiff must demonstrate that this court has jurisdiction over the September 8, 2021 final award. On this issue, defendant makes arguments that present two questions. First, has plaintiff challenged the arbitrator's final award in compliance with the respective statututes of limitations and pleading requirements of either the LMRA and FAA? Second, and in the alternative, could plaintiff now amend its complaint to meet the LMRA or FAA's pleading requirements and vacate the September 8, 2021 award?
Because plaintiff's submissions satisfy the statute of limitations and pleading requirements of the LMRA (but not the FAA), it is unnecessary to reach the second, alternative question.
As a starting point, the FAA is applicable toward all collective bargaining agreements except those involving employees engaged directly in channels of commerce. 9 U.S.C. §§ 1-2; Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109 (2001) (holding that only contracts of employment for transportation workers are exempt from the Federal Arbitration Act). Meanwhile, Section 301 of the LMRA, 29 U.S.C. § 185, empowers a federal court to review an arbitration conducted under the terms of a pre-existing collective bargaining agreement. UnitedSteelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). Generally, “the application of the standard of review under the [FAA] and the [LMRA] will result in similar outcomes.” Reg'l Loc. Union No. 846 v. Gulf Coast Rebar, Inc., 83 F.Supp.3d 997, 1014 (D. Or. 2015).
However, the LMRA and FAA have one important distinction: their respective pleading requirements and statutes of limitations. The FAA requires that “[n]otice of a motion to vacate, modify, or correct an award [] be served upon the adverse party or his attorney within three months after the award is filed or delivered.” 9 U.S.C. § 12 (emphasis added). Meanwhile, the LMRA simply states that “suits . . . may be brought in [an appropriate district court]” and contains no express statute of limitations; instead, the Supreme Court has held that “the timeliness of a § 301 suit . . . is to be determined, as a matter of federal law, by reference to the appropriate state statute of limitations.” 29 U.S.C. § 185; UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 704-05 (1966). Oregon law prescribes the statute of limitations of twenty days. O.R.S. § 36.705(2) (“A petition under this section must be filed within 20 days . . . unless the petitioner alleges that the award was procured by corruption, fraud, or other undue means.”); see also United Brotherhood of Carpenters & Joiners v. FMC Corp, 724 F.2d 815, 817 (9th Cir. 1984) (adopting O.R.S. § 36.705(2) as the LMRA's statute of limitations “to set aside an arbitration decision on the ground that the decision does not draw its essence from the collective bargaining agreement.”). Thus, as defendant correctly observes, under the LMRA, plaintiff “had 20 days from the time that [defendant] submitted its counterclaims to enforce and confirm the Arbitrator's awards-including the final award-to file its own counterclaims to vacate the Final Award.” Def. Reply/Resp. 8, ECF 23.
Plaintiff argues that it has met both the FAA's and LMRA's requirements:
On November 8, 2021, Cascade was served with the Union's counterclaim seeking to enforce the September 8, 2021, award. [ECF 8]. Within 20 days of service of the counterclaim, on November 29, 2021, Cascade timely served and filed its Answer to the Counterclaim specifically requesting “[t]hat Defendant's Counterclaim be dismissed with prejudice” and denying allegations that the September 8, 2021, award was enforceable. [ECF 9]. On December 20, 2021, [defendant] filed its Motion for Judgment on the Pleadings seeking enforcement of the awards. [ECF 17]. Within 20 days, [plaintiff] served and filed its Motion for Summary Judgment and Opposition to the Union's Motion seeking to vacate both awards. [ECF 19-20].Pl. Reply 2-3, ECF 24 (emphasis added). But plaintiff's explanation boxes itself out of the FAA's requirements, as the FAA requires a “motion” must be filed “within three months after the award is filed or delivered.” 9 U.S.C. § 12 (emphasis added). Plaintiff does not assert when it received the arbitrator's final award, but the arbitrator dated his award on September 8, 2021, triggering a 90-day statute of limitations that expired around December 8, 2021. Plaintiff's Motion for Summary Judgment, which sought vacatur of both arbitration awards, arrived more than a month later, on January 10, 2022. Pl. Mot. 2, ECF 20. And while plaintiff may point to its Answer, filed on November 29, 2021, as a document that falls within the FAA's 90-day deadline, the statute specifically demands a “motion,” not merely an answer or counterclaims. 9 U.S.C. § 12.
The only circuit court to address whether an answer or counterclaims qualify as “motions” to meet the FAA's explicit pleading requirements has conclusively ruled on this issue in the negative:
Whereas LMRA complaints proceed as typical civil actions, applications to courts under the FAA take the form of motions unless otherwise “expressly provided” in the FAA itself. 9 U.S.C. § 6. Neither FAA Section 9, which provides for confirmation of arbitration awards, nor FAA Section 10, which provides for vacatur of arbitration awards, prescribe other procedures. We have held that applications to confirm an arbitration award under FAA Section 9 are to be made as motions. Likewise, we hold here that applications to vacate an arbitration award under FAA Section 10 are also to be made as motions.PG Publ'g, Inc. v. Newspaper Guild of Pittsburgh, 19 F.4th 308, 312 (3d Cir. 2021) (citation omitted). And in evaluating whether the plaintiff's complaint itself provided adequate notice of a motion under the FAA, the Third Circuit continued:
By contrast, there was no such notice here that PG was proceeding by motion under the FAA-neither from the substance of PG's Complaint, nor from PG's manner of litigating this dispute. Substantively, PG's Complaint seeking to vacate the Arbitration Award was labeled and styled as a complaint. It raised five “Counts.” And it did not contain any variation of the word “motion.”
It is not enough that PG's Complaint made general reference to the FAA and that “Count IV,” claiming that the Award was in “manifest disregard of the law,” referred only to the FAA. This is because . . . PG's “Count IV” . . . relies on a basis for setting aside an arbitration award that is available under both LMRA Section 301 actions and FAA Section 10 motions.Id. at 319.
The Third Circuit's decision is persuasive here, especially because plaintiff's Complaint and Answer suffer from similar defects. While plaintiff's Complaint is stylized as a “petition,” it contains no variant of the word “motion,” and only makes passing reference to the FAA in a jurisdictional statement that also references the statute for the LMRA. See Compl. ¶ 1, ECF 1. Meanwhile, plaintiff's Answer to defendant's counterclaims contains no reference to the FAA whatever. See generally Pl. Answer, ECF 9. Simply put, the FAA's text requires “a motion . . . be served . . . within three months after the award is filed or delivered.” 9 U.S.C. § 10. The first motion that plaintiff served arrived in January 2022, a month after the statute of limitations had expired. See ECF 19. Thus, plaintiff's request for vacatur of both awards cannot proceed under the FAA.
The question of whether these affirmative defenses meet the LMRA's pleading requirements is more favorable for plaintiff. As a reminder, the LMRA adopts “the appropriate state statute of limitations,” which for Oregon is 20 days “after the petitioner is served with a petition for confirmation of an award.” UAW, 383 U.S. at 704-05; O.R.S. § 36.705(2). Plaintiff complied with this deadline: it was served with defendant's counterclaim seeking to enforce the award on November 8, 2021, and timely filed its Answer, with affirmative defenses, on November 29, 2021. Pl. Reply 2-3, ECF 24.
November 28, 2021 is twenty-one days after November 8, 2021. However, because the 20th day fell on a Sunday, plaintiff was permitted to file its Answer on the next business day. See FED. R. CIV. P. 6(a)(1) (indicating that if the last day of a time period is a Sunday, the period continues to run until the end of the next day that is not a Sunday).
The harder, and admittedly novel, question is whether affirmative defenses qualify as a “suit” under the LMRA. In Sheet Metal Workers International Association, Local 252 v.Standard Sheet Metal, Inc., 699 F.2d 481 (9th Cir. 1983), the Ninth Circuit found that “an unsuccessful party at arbitration who did not move to vacate the award within the prescribed time may not subsequently raise, as affirmative defenses in a suit to enforce the award, contentions that it could have raised in a timely petition to vacate the award.” Bhd. of Teamsters& Auto Truck Drivers Loc. No. 70 of Alameda Cnty. v. Celotex Corp., 708 F.2d 488, 490 (9th Cir. 1983) (emphasis added). But that rule does not fit squarely with the issue here, as plaintiff raised its affirmative defenses during, not subsequently after, the time period it was to seek vacatur of the award. See O.R.S. § 36.705(2) (noting that the period to file a petition for vacatur begins “after the petitioner is served with a petition for confirmation of an award”).
Without a clear rule, the court turns to basic principles of common law, in which “setoffs, counterclaims[, and] crossclaims [are all] regarded as affirmative actions.” Chauffeurs, Teamsters, Warehousemen & Helpers, Loc. Union No. 135 v. Jefferson Trucking Co., 628 F.2d 1023, 1027 (7th Cir. 1980). Even when an answer “is not framed as a counterclaim, the ‘defenses' raised therein [can] constitute a request for affirmative relief, namely, vacation of the arbitration award.” Id. And plaintiff's first affirmative defense to defendant's counterclaim, which seeks enforcement of the final award, see Def. Answer 3-5, ECF 8, is that the counterclaim “is barred because [d]efendant fails to state a claim upon which relief can be granted.” Pl. Answer 2, ECF 9. Thus, plaintiff's affirmative defenses to defendant's counterclaim reasonably seek review of the enforcement of said award. And because these affirmative defenses were timely filed within the 20-day period to do so, plaintiff has properly raised the question, using the LMRA, of whether the arbitrator's September 8, 2021 award is enforceable. As such, the court has jurisdiction over the arbitrator's final award, and may consider all of the relief that the arbitrator awarded.
IV. Analysis
Having resolved the jurisdictional issues, the court next proceeds to evaluate the merits of the cross-motions seeking confirmation of the award (as defendant requests) or vacatur of the award (as plaintiff requests). Plaintiff argues that vacatur is appropriate for two independent reasons: (1) the award failed to “draw its essence” from the parties' collective bargaining agreement such that the arbitrator “dispensed his own brand of industrial justice,” and (2) the award exceeded the boundaries of the issues submitted to the arbitrator. See generally Pl. Mot., ECF 20.
A. Legal Standards
Section 301 of the LMRA, 29 U.S.C. § 185, empowers a federal court to review an award resulting from an arbitration conducted under the terms of a pre-existing collective bargaining agreement. United Steelworkers of Am., 363 U.S. at 593. The Ninth Circuit has identified four instances where a court may decline to recognize an arbitration award under the LMRA: “(1) when the award does not draw its essence from the collective bargaining agreement; (2) when the arbitrator exceeds the scope of the issues submitted; (3) when the award runs counter to public policy; and (4) when the award is procured by fraud.” Sprewell v. Golden State Warriors, 266 F.3d 979, 986 (9th Cir. 2001), opinion amended on denial of reh'g, 275 F.3d 1187 (9th Cir. 2001).
Case law under both the FAA and LMRA are applied here; while plaintiff's motion and related filings do not comply with the FAA's pleading standards and statute of limitations, the Ninth Circuit has acknowledged the interchangeable nature of the analysis required by the LMRA and FAA, and has used cases construing the FAA to analyze disputes submitted under the LMRA. See, e.g., Am. Postal Workers Union of Los Angeles, AFL-CIO v. United StatesPostal Service, 861 F.2d 211, 215 n.2 (9th Cir. 1988).
B. Award “Drawing Its Essence” from the C.B.A.
Plaintiff first alleges that the arbitrator's award fails to “draw its essence” from the parties' collective bargaining agreement; in other words, plaintiff argues the arbitrator “dispensed his own brand of industrial justice.” Pl. Mot. 14-15, ECF 20. This argument stems from the arbitrator's decision to resolve the dispute using Section 28 of the parties' C.B.A., titled “Adjustment of Grievances.” As a reminder, Section 28.2 provides that “upon occurrence of any alleged grievance, relief shall be available” through a multi-step process that includes discussions between union and company representatives and written exchanges. C.B.A., Compl., Ex. 1, ECF 1-1 at 57 (emphasis added). Critically, Section 28.3 allows for arbitration of a grievance that remains unresolved after multiple rounds of negotiations, but Section 28.6 requires that grievances be automatically resolved against a party that failed to timely respond. Id. at 55-56. This provision was central to the arbitrator's ruling, as plaintiff's failure to provide a decision within the C.B.A.-mandated seven-day period after the Step III meeting necessitated an automatic ruling in favor of the defendant. Interim Award, Compl., Ex. 2, ECF 1-1 at 71-73.
Plaintiff argues that the arbitrator “dispensed his own brand of industrial justice” when he failed to apply Section 29, a separate section within the parties' C.B.A. titled “Discipline, Suspension, and Discharge.” Pl. Mot. 14-15, ECF 20. Section 29.2 applies “[i]n all instances in which the Company may conclude that an employee's conduct may justify suspension or discharge,” and includes a multi-step process between the parties. C.B.A., Compl., Ex. 1, ECF 1-1 at 57 (emphasis added). Importantly, while Section 29.3 allows an employee to file a grievance, it does not compel the company's human resources manager to provide any response, let alone one within a certain time period. Id. Moreover, unlike Section 28, the entirety of Section 29 does not include any terms involving arbitration. Id. at 57-58.
This analysis also includes plaintiff's argument that the arbitrator's award went beyond the terms of the C.B.A. (i.e., by allegedly grafting an element from Section 28 into Section 29's procedures). See Pl. Mot. 14-15, ECF 20.
At the outset, it is important to recognize that judicial scrutiny of an arbitrator's award in a labor dispute “is extremely limited.” Sheet Metal Workers Int'l Ass'n, Local No. 359 v. ArizonaMechanical & Stainless, Inc., 863 F.2d 647, 653 (9th Cir. 1988). The court must defer to an arbitrator's decision when he was, at a minimum, “arguably construing or applying the contract.” United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38 (1987). Stated otherwise:
[T]he quality-that is, the degree of substantive validity-of an arbitrator's interpretation is, and always has been, beside the point. Instead, the appropriate question for a court to ask when determining whether to enforce a labor arbitration award interpreting a collective bargaining agreement is a simple binary one: Did the arbitrator look at and construe the contract, or did he not?Sw. Reg'l Council of Carpenters v. Drywall Dynamics, Inc., 823 F.3d 524, 532 (9th Cir. 2016).
There are three interconnected reasons that weigh against vacating the arbitrator's decision here. The first is that, when the arbitrator applied Section 28 and its provisions, he was “arguably construing or applying” the parties' C.B.A. Section 28 applies “upon occurrence of any alleged grievance.” Misco, 484 U.S. at 38; C.B.A., Compl., Ex. 1, ECF 1-1 at 54 (emphasis added). The word, “any,” when used as an adjective, means “one selected without restriction.” Any, MERRIAM-WEBSTER, https://www.merriam-webster.com/dictionary /any (last visited July 19, 2022). Thus, the C.B.A.'s text allows for any grievance, including those involving discharge and termination, to trigger Section 28's procedures. And while plaintiff argues that Section 29 offers the better (or only correct) resolution for these disputes, the Supreme Court has instructed that “as long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision.” Misco, 484 U.S. at 38 .
The Supreme Court's guidance in Misco also provides an excellent segue to the second reason against vacatur: that the arbitrator considered and rejected the use of Section 29 himself. In his award, the arbitrator included the text of Section 29.3 within the “Relevant Contract Language” portion of his award, and even acknowledged that plaintiff's “most forceful argument is that Article 29.3 does not provide for the same time limits in responding to a Step III grievance since it is in a totally separate Agreement section.” Interim Award, Compl., Ex. 2, ECF 1-1 at 66-67, 71 (emphasis added). Yet despite recognizing the existence of Section 29, the arbitrator still chose to apply Section 28-implicitly rejecting the application of Section 29. Id. at 71-73. And while the arbitrator did not offer an explanation for preferring Section 28 over Section 29, “arbitrators are not required to set forth their reasoning supporting an award.” Bosack v. Soward, 586 F.3d 1096, 1104 (9th Cir. 2009) (quoting Wilko v. Swan, 346 U.S. 427, 436 (1953), overruled in part on other grounds by Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477 (1989)); see also Cap. Wholesale Elec., Inc. v. McCarthy Const., 50 F.3d 13 (9th Cir. 1995) (Mem.) (cited pursuant to Ninth Circuit Rule 36-3) (“[T]he arbitrator has no obligation to explain the basis of his decision.”).
Coincidentally, the reason the arbitrator did provide in his award constitutes an explanation as to why he applied Section 28: that plaintiff implicitly waived Section 29's application by agreeing to a Step III meeting and offering arbitration as the resolution for the dispute. The arbitrator began the “Discussion, Findings, and Conclusion” section of his award by identifying this quote, from Human Resources Manager Zolotko, as the “immediate resolution of the matter”:
You are correct; I was late. Please initiate a grievance and should the Union decide to move the matter forward, we will let an arbitrator decide the matter for each of these cases.
Interim Award, Compl., Ex. 2, ECF 1-1 at 71-72. The arbitrator then explained that plaintiff “essentially refused to bargain collectively with [defendant] by applying the clear language of 28.6.A . . . here, the Human Relations Manager agree[d] it was late in responding.” Id. at 72 (emphasis added). Importantly, and as noted earlier, Section 29 does not reference either Step III procedures or any arbitration proceedings within its text. C.B.A., Compl., Ex. 1, ECF 1-1 at 5758.
Thus, the arbitrator's award can be interpreted to find that in agreeing to a Step III meeting and later conceding that an arbitrator would offer final resolution, plaintiff implicitly adopted Section 28's procedures. See, e.g., Gulf Coast Rebar, 83 F.Supp.3d at 1014 (“An equally, if not more, plausible construction of [the arbitrator's] ruling is that he considered [defendant's] request for arbitration to be a concession that arbitration is appropriate under the Agreement, and accordingly, a waiver of any defense to arbitrability.”); see also Torrington Co.v. Local Union 590, Int'l Union, United Auto., Aerospace and Agric. Implement Workers of Am., 803 F.2d 927, 931 (7th Cir. 1986) (binding the parties to a position that the dispute was arbitrable under their C.B.A.). And “arbitrators are solely responsible for determining whether conditions precedent to arbitration, such as ‘allegations of waiver, delay, or a like defense to arbitrability' have been fulfilled”; in other words, the court cannot intervene in such a determination. Id.(quoting Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84-85 (2002)).
It is the combination of these three reasons-that (1) the arbitrator construed the parties' C.B.A. by applying Section 28, (2) the arbitrator considered and rejected plaintiff's arguments regarding the applicability of Section 29, and (3) the arbitrator's decision implicitly suggests plaintiff waived the application of Section 29 by agreeing to Step III proceedings and offering arbitration as a resolution-that prevents this court from vacating the arbitrator's award. As noted earlier, the court must defer to an arbitrator's decision when he was, at a minimum, “arguably construing or applying the contract,” and that is what the arbitrator did here. Misco, 484 U.S. at 38.
To be sure, the court shares plaintiff's frustration with the way the arbitrator's award is written. The arbitrator's decision is not an exemplar of clarity: it offers no explicit explanation as to why the application of Section 28 was preferable to that of Section 29 given the facts of the case. Moreover, the record shows that defendant initiated both individual grievances as violations of Section 29 before grouping them with two other grievances pursuant to Section 28.4. See Cirner Decl., Ex. 5 at 3, ECF 21-5; Cirner Decl., Ex. 6 at 3, ECF 21-6 (both grievance forms indicating that “[t]he Union charges the Company with a specific violation of” Article 29). If this court was tasked with reviewing the arbitrator's award de novo, it might employ a multi-layered textual analysis of Sections 28 and 29 to determine which provision is most suitable for the parties' dispute. But the Ninth Circuit has made clear that “so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him, because their interpretation of the contract is different than his.” San Francisco-OaklandNewspaper Guild v. Tribune Pub. Co., 407 F.2d 1327, 1327 (9th Cir. 1969) (per curiam). Thus, even if the court, after reviewing the record, disagreed with the analysis, the standard of review here is far more deferential; it is simply whether “the arbitrator look[ed] at and construe[d] the contract,” and here, he did. Drywall Dynamics, Inc., 823 F.3d at 532. Vacatur of the award because the court's “interpretation of the contract is different than” the arbitrator's is not allowed, and thus, summary judgment is appropriate for defendant. San Francisco-OaklandNewspaper Guild, 407 F.2d at 1327.
While defendant initially charged plaintiff with violations of Section 29 for the Barnes and Johnson grievances, defendant, on the same day of initiating those grievances, also attached letters to those forms stating an intent to “fil[e] the [grievance] at Step III of the grievance procedure”-a process exclusive to Section 28. See Cirner Decl., Ex. 5 at 2, ECF 21-5; Cirner Decl., Ex. 6 at 2, ECF 21-6.
C. Arbitrator “Exceeding the Scope of the Issues Submitted”
Plaintiff also argues that vacatur of the award is proper because the arbitrator “exceeded the scope of the issues submitted.” Pl. Mot. 13, ECF 20. Plaintiff makes three separate arguments. The first two theories-that the arbitrator exceeded his jurisdiction by (1) making a ruling that failed to apply Section 29 of the parties' C.B.A., and (2) issuing a final award after commenting that his role was “functus officio,” were addressed earlier. Accordingly, the reasons stated above, which confirm the arbitrator's authority to issue a final award and the legitimacy of his entire award, can be applied in response to plaintiff's argument that these actions exceeded the scope of the issues submitted to him.
Plaintiff's third formulation of this argument is that “the Union never presented [Gardner's grievance] as one of the [u]nderlying [g]rievances presented for arbitration under” the submitted grievance form. Pl. Mot. 16, ECF 20. This contention arises from defendant's error, described in detail earlier, see Ante at 5 n.4, in submitting a grievance number different from that of Gardner's for arbitration. Yet documents in the record make clear that while defendant accepted responsibility for the incorrect labeling, all participants were aware, at latest, by the conclusion of the arbitration hearing that defendant meant to submit Johnson's grievance for disposition. See, e.g., Interim Award, Compl., Ex. 2, ECF 1-1 at 68 (email from defendant's union representative to Zolotko, “invoking the language in 28.6.A” on the “Gardner Termination” with a mislabeled grievance number); Cirner Decl., Ex. 7 at 6:13-6:20, ECF 21-7 (Zolotko testifying at the arbitration hearing that she only just learned (during the hearing) that union meant to reference the Gardner termination in its grievance, and the arbitrator taking note of that information); Id. at 7:15-7:24 (Zolotko confirming that she listed the incorrect number “as connected to [the] Chris Gardner termination” in a document from May 2019). Thus, at the conclusion of the arbitration hearing, when the grievances were taken under advisement, all the parties were apprised of defendant's error, and in his final award, the arbitrator issued his decision in favor of Gardner and Barnes, the correct parties at issue in this case. See Final Award, Def. Answer, Ex. C, ECF 8 at 82. Simply put, it is difficult to find that a typographical error on the grievance from that was submitted to the arbitrator justifies complete vacatur of the arbitrator's award, especially considering that all involved identified the error and clarified the grievances involved before the record was closed. Ultimately, the arbitrator “can bind the parties only on those issues that they have agreed to submit to him,” and, here, all involved were timely apprised of the actual grievances at issue. Frederick Meiswinkel, Inc. v. Laborers' UnionLoc. 261, 744 F.2d 1374, 1377 (9th Cir. 1984) (quoting Piggly Wiggly Operators' Warehouse,Inc. v. Piggly Wiggly Operators' Warehouse Independent Truck Drivers Union, Local No. 1, 611 F.2d 580, 583 (5th Cir. 1980)).
While the arbitrator's interim award referred to the disputes as the “Johnson and Barnes” grievances, see Interim Award, Compl., Ex. 2, ECF 1-1 at 74, it is clear that this was merely a typographical error, as the arbitrator referred to the “two employees involved [as those who] were terminated for various and separate issues”; the only two terminations listed in the interim award are those of Gardner and Barnes. Id. at 67-68. And as mentioned earlier, a recognized exception to the functus officio doctrine is that “an arbitrator can correct a mistake which is apparent on the face of his award.” McClatchy Newspapers, 686 F.2d at 734 n.1. That is precisely what the arbitrator did here.
The arbitrator's interim award noted that the record in the arbitration dispute was closed on November 28, 2020-two months and ten days after the September 18, 2020 hearing where defendant clarified that it meant to list the Gardner grievance instead of the Johnson grievance. Interim Award, Compl., Ex. 2, ECF 1-1 at 65.
V. Attorney's Fees
Defendant also seeks an award of “attorneys' fees and costs in defending this lawsuit” because plaintiff “breached its contracts . . . by challenging the Arbitrator's Award in federal court.” Proposed Award 1, ECF 17-1. This request does not stem from any provision within the parties' C.B.A.; defendant instead invokes the federal court's general “authority to award attorneys' fees ‘when the losing party has acted in bad faith, vexatiously, wantonly, or oppressive reasons.'” Def. Mot. 20, ECF 17 (quoting Alyeska Pipeline Serv. Co. v. WildernessSoc'y, 421 U.S. 240, 258-59 (1975)). In support of its request, defendant invokes three aspects of this case: (1) plaintiff's decision to file a Complaint instead of waiting for a final award from the arbitrator, (2) plaintiff's “unjustified refusal” to comply with the award because of “simple dissatisfaction” with its outcome, and (3) a presumption within the labor arbitration field that strongly discourages undue litigious delay because it “not only harms individual rights but also stymies federal labor policy.” Id. at 19-21.
As defendant correctly notes, there are two principles that bookend a party's right to invoke federal litigation over an arbitration proceeding. On the one hand, “a challenge to an arbitral order on the ground that an arbitrator did not apply or misinterpreted the underlying contract does not necessarily constitute bad faith.” Pac. Gas & Elec. Co. v. SEIU Loc. 24/7, 585 Fed.Appx. 565, 565 (9th Cir. 2014) (Mem.) (cited pursuant to Ninth Circuit Rule 36-3). But on the other hand:
The federal labor policy favoring voluntary arbitration dictates that when a refusal to abide by an arbitration decision is without justification, and judicial enforcement is necessary, the court should award the party seeking enforcement reasonable costs and attorneys' fees incurred in that effort. This sanction is necessary lest federal labor policy be frustrated by judicial condonation of dilatory tactics that lead to wasteful and unnecessary litigation.Int'l Union of Petroleum & Indus. Workers, 707 F.2d at 428-29.
While defendant's position is certainly understandable, plaintiff's actions in this case do not unequivocally constitute bad faith litigation or dilatory tactics. First, while plaintiff indeed filed its Complaint before the arbitrator issued his final award, such a move is justifiable from the plaintiff's perspective: it reasonably believed that the arbitrator voluntarily ceded jurisdiction over the issuance of any more awards because of his curious declaration that he was “functus officio” and had “no more involvement in this matter.” Cirner Decl., Ex. 8 at 1, ECF 21-8. By the time the arbitrator did issue his final award, litigation in this case had already begun, and the parties' C.B.A. contains no provision outlining what to do with employees whose employment statuses await judicial review. Moreover, defendant's characterization of plaintiff's position as “simple dissatisfaction” is a tad overstated: the arbitrator's opinions were not exemplars of clarity, and plaintiff's decision to litigate them, while unsuccessful, does not rise to the high bar that a determination of bad faith necessitates, even in the context of labor arbitration litigation. Taking the unique facts of this case into consideration, it cannot be said that plaintiff's actions constitute bad faith as to justify an award of attorney's fees.
RECOMMENDATIONS
Plaintiff's motion for summary judgment (ECF 20) should be DENIED, and defendant's motion for judgment on the pleadings (ECF 17) should be GRANTED, except that defendant's request for attorneys' fees should be DENIED.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Friday, August 26, 2022. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.