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Posts Tagged ‘Labor Management Relations Act’

D.C. Circuit Says it has No Subject-Matter Jurisdiction over Competing Claims to Confirm or Vacate Award Made Pursuant to Collective Bargaining Agreement   

August 21st, 2024 Application to Confirm, Application to Vacate, Arbitration Law, Arbitration Practice and Procedure, Awards, Confirmation of Awards, Federal Courts, Federal Question, Federal Subject Matter Jurisdiction, Judicial Review of Arbitration Awards, Labor Arbitration, Labor Law, LMRA Section 301, LMRA Section 301(a), Post-Award Federal Arbitration Act Litigation, Practice and Procedure, Rights and Obligations of Nonsignatories, United States Court of Appeals for the D.C. Circuit Comments Off on D.C. Circuit Says it has No Subject-Matter Jurisdiction over Competing Claims to Confirm or Vacate Award Made Pursuant to Collective Bargaining Agreement   

Subject-Matter JurisdictionWe’ve made over the last several months months a point of discussing arbitration-enforcement litigation cases addressing the subject-matter jurisdiction because—particularly in the context of the Federal Arbitration Act (the “FAA”)—it is not only complex but frequently  counterintuitive. (See here, here, and here.) This case— International Union, United Mine Workers of Am. v. Consol Energy Inc., ___ F.4d ___, No. 22-7110, slip op. (D.C. Cir. August 9, 2024)—caught our eye because the Court held that that it lacked subject-matter jurisdiction over the plaintiff on one ground and over the defendants’ counterclaim on an independent ground, Article III standing.

Background

The United Mine Workers of America (the “Union”) and coal mining companies (the “Mining Companies”), all subsidiaries of  Consol Energy, Inc. (“Consol”), signed a collective bargaining agreement (the “CBA”)  but Consol did not. The CBA provided for arbitration of grievances. It also provided to Union members lifetime health care benefits. The Union claims that the Mining Companies could not reduce benefits unilaterally, even if a member no longer mined coal.

For its part Consol was the Mining Companies’ health care administrator. Prior to the CBA’s expiration date, Consol informed the Mining Companies’ mining employees that Consol would consider modifying miner benefits once the CBA expired.

That prompted a retired miner to file a grievance against Consol, an arbitration followed, and with the support of the Union, the miner obtained an award in his favor. The arbitrators determined they had jurisdiction over Consol, a nonsignatory to the CBA, which by the time the arbitration took place, had expired. They also determined that the proposed benefit modifications would violate the CBA and made an award that prohibited Consol from making them.

The Union brought against Consol and the Mining Companies an action in district court to confirm the award, invoking Labor Management Relations Act (“LMRA”) Section 301(a)’s grant of subject-matter jurisdiction over actions “for violation of contracts between an employer and a labor organization.” 29 U.S.C. § 185(a). Consul and the Mining Companies brought a separate action to vacate the award, and the district court consolidated the two cases.

Prior to the district court reaching its decision Consol was split into two successor entities and otherwise ceased to exist. One of the two was joined but the district court dismissed it because its business did not concern coal mining. The other successor entity (the parent of the Mining Companies) was never made a party. The Mining Companies remained parties to the consolidated action.

The district court dismissed on standing grounds the Union’s confirmation action. It found the Union suffered no injury because there was no CBA violation. While Consul proposed to modify benefits it never did so. But the district court nevertheless determined on the merits that there was no basis for vacating the award, either. An appeal by both parties followed.

Subject-Matter Jurisdiction: The D.C. Circuit’s Decision

The D.C. Court of Appeals determined that “[n]o party in this appeal has shown that federal courts have jurisdiction over its claim.” United Mine Workers, slip op. at 8. It therefore affirmed the district court’s dismissal of Union’s claim, vacated the district court’s determination on the merits of the vacatur counterclaim, and remanded the counterclaim with instructions to dismiss it on standing grounds. Id.

The District Court had No Subject-Matter Jurisdiction to Confirm the Award

Continue Reading »

Presumption of Arbitrability: Second Circuit Clarifies the Law

May 30th, 2023 Applicability of Federal Arbitration Act, Arbitrability, Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Enforcing Arbitration Agreements, FAA Chapter 1, Federal Policy in Favor of Arbitration, First Principle - Consent not Coercion, Labor Arbitration, Motion to Compel Arbitration, Practice and Procedure, Pre-Award Federal Arbitration Act Litigation, Presumption of Arbitrability, Questions of Arbitrability, United States Court of Appeals for the Second Circuit, United States Supreme Court Comments Off on Presumption of Arbitrability: Second Circuit Clarifies the Law

Introduction: Presumption of Arbitrability

Presumption of Arbitrability

Thurgood Marshall U.S. Courthouse, 40 Centre Street, New York, NY 10007

The presumption of arbitrability—grounded in the federal policy in favor of arbitration—is an important but sometimes misunderstood rule of Labor-Management-Relations-Act (“LMRA”)- and Federal-Arbitration-Act (“FAA”) arbitration law.

According to the presumption, “where. . . parties concede that they have agreed to arbitrate some matters pursuant to an arbitration clause, the law’s permissive policies in respect to arbitration counsel that any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration.” Granite Rock Co. v. Teamsters, 561 U.S. 287, 298-99 (2010) (citations and quotations omitted).

There is an understandable tendency among decision makers and commentators to interpret the presumption broadly, sometimes more broadly than the United States Supreme Court (“SCOTUS”)’s pronouncements warrant. But the presumption is not an overarching command that courts decide arbitration-law disputes in a way that yields arbitration-friendly outcomes. The presumption is, as SCOTUS explained in Granite Rock—and more recently, in Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1713 (2022)—simply a limited-use tool to assist Courts in resolving ambiguities in arbitration agreements.

The presumption is, SCOTUS has said, “merely an acknowledgment of the FAA’s commitment to overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate and to place such agreements upon the same footing as other contracts.”  Morgan, 142 S. Ct. at 1713 (quoting Granite Rock, 561 U.S. at 302). “The [federal] policy [in favor of arbitration[,]” SCOTUS said, “is to make ‘arbitration agreements as enforceable as other contracts, but not more so.’” Morgan, 142 S. Ct. at 1713 (quoting Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404, n. 12 (1967)).

The policy—and the presumption implementing it— merely requires courts to “hold a party to its arbitration contract just as the court would to any other kind.” Morgan, 142 S. Ct. at 1713. Courts, Morgan said, cannot “devise novel rules to favor arbitration over litigation.” Morgan, 142 S. Ct. at 1713 (quotation omitted). For “[t]he federal policy is about treating arbitration contracts like all others, not about fostering arbitration.” Morgan, 142 S. Ct. at 1713-14 (citation omitted).

Granite Rock and Morgan express SCOTUS’s intention to narrowly limit the application of the presumption of arbitrability and to prohibit its use as an extracontractual basis for justifying enforcement of arbitration agreements more vigorously or expansively than ordinary contracts. (See here (Arbitration Law Forum, 2021 Term SCOTUS Arbitration Cases: Is the Pro-Arbitration Tide Beginning to Ebb? (July 18, 2022)).) Rather SCOTUS precedent treats it as a default rule of last resort for resolving scope ambiguities in arbitration agreements. See Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1418-19 (2019) (Not applying contra proferentem rule to resolve arbitration-agreement-scope ambiguities  “is consistent with a long line of cases holding that the FAA provides the default rule for resolving. . . [such] ambiguities. . . .”) (citations omitted).

A recent, per curiam decision of the U.S. Court of Appeals for Second Circuit decision evidences the Second Circuit’s clear intention to follow SCOTUS’s presumption-of-arbitrability guidance and shows how it applies to the question before the Second Circuit in that case: At what point in the interpretative framework for determining arbitrability questions does the presumption of arbitrability come into play? See Local Union 97, Int’l Bhd. Of Elec. Workers, AFL-CIO v. Niagara Mohawk Power Corp., ___ F.4d ___, No. 21-2443-cv, slip op. (2d Cir. May 3, 2023) (per curiam).

Niagara Mohawk explains, among other things, that the presumption of arbitrability is a rule of last resort. Courts have no business resolving in favor of arbitration any doubts about the scope of arbitrable issue unless and until the Court has determined that the parties’ arbitration agreement is ambiguous as to whether the dispute is arbitrable. And even if there is an ambiguity, and the presumption applies, the presumption may be rebutted. Continue Reading »

The Tenth Tells us Time (Usually) Waits for No One: United Food & Commercial Workers Int’l Union v. King Soopers, Inc.

May 7th, 2014 Appellate Practice, Arbitrability, Arbitration Practice and Procedure, Authority of Arbitrators, Awards, Grounds for Vacatur, Judicial Review of Arbitration Awards, Labor Arbitration, Practice and Procedure, State Arbitration Law, State Arbitration Statutes, State Courts, Statute of Limitations, United States Court of Appeals for the Tenth Circuit, United States Supreme Court Comments Off on The Tenth Tells us Time (Usually) Waits for No One: United Food & Commercial Workers Int’l Union v. King Soopers, Inc.

Introduction

Arbitration is supposed to be a speedy alternative to litigation, and that is supposed to be true as respects commercial or employment arbitration governed by the Federal Arbitration Act (the “FAA”) and labor arbitration arising under the Railway Labor Act, 45 U.S.C. §§ 151, et. seq., or Section 301 of the Taft-Hartley Act (a/k/a the Labor Management Relations Act (“LMRA”)), 29 U.S.C. § 185. Arbitration awards are generally presumed to be valid, which puts the burden on challengers to establish their invalidity, at least provided the challenging party entered into a valid and enforceable arbitration agreement with the defending party.

Adjudicating a non-frivolous award challenge usually takes time, and if the challenge turns out to be valid, an order vacating the award does not usually resolve the underlying dispute, which, absent a settlement, must be resolved through further ADR or judicial proceedings. Delay is inevitable and delay undermines arbitration’s ability to compete with litigation.

The FAA and most or all state arbitration statutes try to minimize delay by not only by restricting t he scope of judicial review of awards, but also by imposing short limitation periods for vacating awards—for example, three months under the FAA and 90 days under many state arbitration statutes. See 9 U.S.C. § 12; see, e.g., N.Y. Civ. Prac. L.& R. § 7511(a); Fla. Stat. § 682.13(2); Wash. Rev. Code § 7.04A.230(2). Some state statutes impose shorter periods. See, e.g., Conn. Gen. Stat. § 52-420(b) (30 days); Mass. Gen. Laws ch. 251, § 12(b) (30 days); but see Cal. Code Civ. P. § 1288 (100 days).

By contrast, a motion or petition to confirm an award is usually subject to a longer statute of limitations. Cases governed by Chapter 1 of the FAA (e.g., domestic arbitrations between domestic parties), for example, are subject to a one-year limitation period. See 9 U.S.C. § 9.

Under the FAA, and presumably under many or most state arbitration statutes, if a party does not bring a timely petition to vacate, and the other moves to confirm after the time period for vacating an award has elapsed, then the challenging party cannot raise grounds for vacatur as defenses to confirmation, even if it does not seek an order vacating the award. See, e.g., Florasynth, Inc. v. Pickholz, 750 F.2d 171, 175-76 (2d Cir. 1984) (FAA); Kutch v. State Farm Mutual Auto. Ins. Co., 960 P.2d 93, 97-98 (Colo. 1998) (Colorado law); but see Lyden v. Bell, 232 A.D.2d 562, 563 (2d Dep’t 1996) (Where a confirmation proceeding “is commenced after the 90-day period, but within the one-year period. . . .[,] a party may, by cross motion to vacate, oppose the petition for confirmation on any of the grounds in CPLR 7511 even though his time to commence a separate proceeding to vacate or modify under CPLR 7511(a) has expired.”) (citations omitted) (New York law); 1000 Second Avenue Corp. v. Pauline Rose Trust, 171 A.D.2d 429, 430 (1st Dep’t 1991) (“an aggrieved party may wait to challenge an award until the opposing party has moved for its confirmation”) (New York law).

In United Food & Commercial Workers Int’l Union v. King Soopers, Inc., No. 12-1409, slip op. (10th Cir. Feb. 28, 2014), the United States Court of Appeals for the Tenth Circuit reminds us that the same rules apply to LMRA Section 301 labor-arbitration-award enforcement actions. Section 301 does not specify limitation periods for vacating arbitration awards, and as a general rule, courts “borrow” the most analogous state statute of limitations. See, e.g., Local 802, Assoc. Mus. of N.Y. v. Parker Meridien Hotel, 145 F.3d at 88-89 (2d Cir. 1998). In King Soopers the Tenth Circuit borrowed Colorado’s 90-day statute of limitations for vacating an award.[1]

King Soopers might be looked at as a refresher course in how important it is to act quickly and decisively when one finds oneself at the wrong end of an arbitration award that might not meet the modest criteria for summary confirmation or enforcement. While roughly nine years elapsed between the date the employee filed the grievance and the date the arbitrator issued the award, the Court, reversing the district court’s decision to the contrary, held (quite correctly) that King Sooper’s just-over-90-day delay in asserting grounds to vacate the award foreclosed it from opposing the union’s suit to enforce the award. Continue Reading »

How Will Stolt-Nielsen, S.A. v. Animalfeeds Int’l Corp. Change Reinsurance Arbitration Practice?

June 1st, 2010 Arbitration Practice and Procedure, Authority of Arbitrators, Awards, Grounds for Vacatur, Labor Arbitration, United States Supreme Court Comments Off on How Will Stolt-Nielsen, S.A. v. Animalfeeds Int’l Corp. Change Reinsurance Arbitration Practice?

Part II

A.   Introduction

In Part I (here) we explained why the standard for challenging an award based on its outcome is important in reinsurance arbitration practice.  And, after briefly reviewing pre-Stolt-Nielsen law on outcome-based standards of review, we explained how Stolt-Nielsen has established a fairly searching, standard of review.  This Part II explores the legal and practical implications of that standard of review.    

B.   Legal Implications of the Stolt-Nielsen Decision’s Manifest Disregard of the Agreement Standard of Review

1.  Courts May Interpret Stolt-Nielsen’s Outcome-Based Standard of Review Liberally

Reinsurance-  and other commercial-arbitration awards are now subject to the same standard of review as labor-law awards – and in Stolt-Nielsen, the Court applied that standard of review pretty liberally.  The Court has put to rest the notion that Federal Arbitration Act Section 10(a)(4) vacatur is limited to questions concerning whether the arbitrators decided a matter falling within the scope of the parties’ arbitration agreement or submission.   The outcome of the arbitration is now subject to at least some, limited scrutiny. 

The focus will now be on whether the arbitrators interpreted, applied and enforced the contract, and applied applicable law or norms.  Express or implied reliance on extra-contractual considerations, such as public policy, may spoil an award, unless those extra-contractual considerations are grounded in applicable law.  Not heeding clear and unambiguous contract language, effectively deleting or disregarding contractual provisions or otherwise rewriting the contract may also subject the award to vacatur.  Continue Reading »

United States Supreme Court Update: Union Pacific and Granite Rock Labor Arbitration Cases

October 11th, 2009 Authority of Arbitrators, Labor Arbitration, United States Court of Appeals for the Ninth Circuit, United States Court of Appeals for the Seventh Circuit, United States Supreme Court 1 Comment »

Introduction

So far the United States Supreme Court has agreed to hear only one arbitration case governed by the Federal Arbitration Act:  Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198), which has been set for oral argument at 10:00 a.m. Eastern Standard Time, December 9, 2009.   (See Russ Kunkel’s LawMemo Arbitration Blog  here.)  We have written extensively on Stolt-Nielsen, which concerns whether class arbitration may be imposed on parties whose contracts are silent on that point.  (Posts available here,  here, here, here, here, here, here, here and here.)

The Supreme Court has also agreed to hear two labor arbitration cases.  The first is Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers & Trainmen (08-604), which is governed by the the Railway Labor Act (“RLA”), 45 U.S.C. §§151 et seq.  The RLA, among other things, requires arbitration before the National Railroad Adjustment Board (“the Board”) of labor disputes involving railway workers.  Union Pacific, for all practical purposes, is therefore not a contractual arbitration case, but an administrative law one, and the outcome will likely have  little or no effect on Federal Arbitration Act jurisprudence.  The Court held oral argument on October 7, 2009.  (Oral argument Tr. here) 

The second is Granite Rock Co. v. International Brotherhood of Teamsters (08-1214), which arises under Section 301 of the Labor Management Relations Act.  The Court is expected to set argument for later this Fall.  (See Russ Kunkel’s LawMemo Employment Law Blog here.)   Though not governed by the Federal Arbitration Act, Granite Rock, unlike Union Pacific, is a contractual arbitration case.  And the outcome may be relevant to cases falling under the Federal Arbitration Act. 

We briefly summarize below the issues the Court will presumably address in these labor arbitration cases and discuss why Granite Rock may be more controversial than it appears at first blush.    Continue Reading »