International Brotherhood of Teamsters, Local 959 v. Horizon Lines of Alaska, LLC

Filing 22

ORDER AND OPINION: RE 9 Motion for Summary Judgment is DENIED and RE 13 Motion for Summary Judgment is DENIED. This matter is DISMISSED and REMANDED to the arbitrator for completion of the arbitration award. Signed by Judge John W. Sedwick on 05/20/2014. (CME, COURT STAFF)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF ALASKA 10 11 12 International Brotherhood of Teamsters Local 959, 13 Petitioner, 14 vs. 15 Horizon Lines of Alaska, LLC, 16 17 Respondent. ) ) ) ) ) ) ) ) ) ) ) ) 4:13-CV-00039 JWS ORDER AND OPINION [Re: Motions at docket 9 and 13] 18 19 I. MOTIONS PRESENTED 20 At docket 9, petitioner International Brotherhood of Teamsters Local 959 (“Local 21 959”) filed a motion for summary judgment, which respondent Horizon Lines of Alaska, 22 LLC (“Horizon”) opposed at docket 17. Local 959 filed a reply at docket 20. 23 24 25 26 27 At docket 13, Horizon also filed a cross-motion for summary judgment. Local 959 filed an opposition at docket 19. Horizon filed a reply at docket 21. II. BACKGROUND Horizon is a maritime shipping company that employs approximately 17 truck drivers. These drivers own their own trucks and lease them to Horizon. In return, 28 -1- 1 Horizon pays them a wage for the time they spend driving as well as “truck payments,” 2 which are based on the number of miles their truck is used for Horizon’s purposes.1 3 Horizon’s drivers are members of Local 959, a labor organization. Horizon and 4 Local 959 have entered into a collective bargaining agreement that provides for the 5 arbitration of grievances. After Horizon suspended one of Local 959’s members, Mike 6 Dropik, Local 959 filed a grievance asserting that Horizon lacked just cause for the 7 suspension. The parties proceeded to arbitration, where they presented the following 8 two questions to the arbitrator: (1) did Horizon have just cause to suspend Dropik?; and 9 (2) if not, what is the appropriate remedy?2 10 At the arbitration hearing Dropik testified in pertinent part that he leases his truck 11 to Horizon and therefore has two separate relationships with Horizon, “one as the 12 owner of the truck and one as a direct employee.”3 Local 959’s closing brief asked the 13 arbitrator to remove the suspension from Dropik’s file and make Dropik whole for the 14 wages, benefits, and truck payments he lost in connection with the work he missed.4 15 The arbitrator issued an Opinion and Award finding that Horizon did not have just 16 cause to suspend Dropik and sustaining Local 959’s grievance. As to the remedy, the 17 arbitrator ordered Horizon to make Dropik whole “for lost wages, benefits, and truck 18 19 1 Doc. 3 at 3. 2 Doc. 9-1 at 8. 22 3 Doc. 9-2 at 23. 23 4 20 21 24 25 26 27 28 Doc. 17-3 at 12. Horizon’s repeated assertion that the arbitration record lacks any reference to truck payments is false, as Horizon itself eventually concedes. Compare Doc. 17 at 3 n.2 (“[T]here is absolutely no mention of truck payments anywhere in the arbitration record.”), and Doc. 17 at 3 (“The Union thus achieved, through stealth, an arbitration award that uses the words ‘truck payments’ but contains no record of any such thing existing anywhere in the entire record of the arbitration.”), with Doc. 17 at 6 (conceding that Local 959 requested truck payments in its closing brief). See also the arbitrator’s award. Doc. 9-1 at 23 (“The Union requests make-whole relief for wages, benefits, and lost truck payments for the period of the suspension. That is an appropriate remedy under the circumstances, and I will so order.”) (emphasis added). -2- 1 payments that resulted from the suspension.”5 The arbitrator did not determine any of 2 these amounts. Instead, he retained jurisdiction for 90 days following the decision “to 3 resolve any disputes about the remedy.”6 4 Such a dispute arose about a month later when Horizon unilaterality decided not 5 to pay Dropik any lost truck payments, claiming that the arbitrator lacked authority to 6 order such relief.7 Neither party submitted this dispute to the arbitrator. Instead, Local 7 959 brought this action to confirm the arbitration award pursuant to Section 301 of the 8 Labor Management Relations Act (“LMRA”).8 9 III. STANDARD OF REVIEW 10 Section 301 of the LMRA grants the District Court jurisdiction to review and 11 enforce labor arbitration awards.9 However, the arbitrator’s award must normally be 12 final and binding before such review is undertaken.10 “To allow judicial intervention prior 13 to the final award would contravene the fundamental federal labor policy of deference to 14 contractual dispute resolution procedures, and would interfere with the purpose of 15 arbitration: the speedy resolution of grievances without the time and expense of court 16 17 18 19 5 Doc. 9-1 at 24. 21 6 Doc. 9-1 at 8. 22 7 Doc. 9-3 at 8; Doc. 3 at 4–5. 23 8 29 U.S.C. § 185. 24 9 20 25 26 27 28 Gen. Drivers, Warehousemen & Helpers, Local Union No. 89 v. Riss & Co., 372 U.S. 517, 519 (1963); Kemner v. Dist. Council of Painting & Allied Trades No. 36, 768 F.2d 1115, 1118 (9th Cir. 1985). 10 Gen. Drivers, 372 U.S. at 520 (“Of course, if it should be decided after trial that the grievance award involved here is not final and binding under the collective bargaining agreement, no action under § 301 to enforce it will lie.”); Kemner, 768 F.2d at 1118 (“[A] court should refrain from reviewing an arbitrator’s work until a final and binding award is issued.”). -3- 1 proceedings.”11 “Moreover, interlocutory review of non-final arbitration awards would 2 defeat the purpose of 28 U.S.C. § 1291 to avoid piecemeal litigation of a claim.”12 3 IV. DISCUSSION 4 Both Horizon and Local 959 are asking this court to confirm the arbitration 5 award.13 Their dispute centers on what should happen next. On one hand, Local 959 6 requests a remand to the arbitrator for determination of Dropik’s truck payment 7 damages.14 On the other hand, Horizon opposes this request and seeks confirmation of 8 the arbitrator’s incomplete award, rendering it meaningless due to its incompleteness.15 9 This court lacks jurisdiction to consider these requests, however, because the 10 11 arbitrator’s decision is not yet final. An arbitrator’s decision is final and binding only where it is “intended by the 12 arbitrator to be a complete determination of the claims, including the issue of 13 damages.”16 Where an arbitrator specifically retains jurisdiction to resolve disputes 14 regarding damages, that indicates that the arbitrator did not intend the award to be 15 16 17 18 19 20 21 11 Millmen Local 550, United Bhd. of Carpenters & Joiners of Am., v. Wells Exterior Trim, 828 F.2d 1373, 1375 (9th Cir. 1987) (citing United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564, 566-68 (1960); Kemner, 768 F.2d at 1118; Aerojet-Gen. Corp. v. Am. Arbitration Ass’n, 478 F.2d 248, 251 (9th Cir. 1973)). 22 12 23 Id. (citing Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546 (1949); Liberian Vertex Transports, Inc. v. Associated Bulk Carriers, Ltd., 738 F.2d 85, 87 (2d Cir.1984)). 24 13 Doc. 1 at 3; Doc. 3 at 5. 25 14 Doc. 10 at 13; Doc. 13 at 13. 15 Doc. 17 at 17. 26 27 16 28 Millmen, 828 F.2d at 1376 (construing Michaels v. Mariforum Shipping, 624 F.2d 411, 413–14 (2d Cir.1980)). -4- 1 final.17 Put simply, “an arbitration award that postpones the determination of a remedy 2 should not constitute a ‘final and binding award’ reviewable under section 301.”18 3 In MiIImen, the Ninth Circuit addressed whether the district court has jurisdiction 4 to review an arbitrator’s award that determines liability but reserves jurisdiction to 5 resolve disputes regarding the remedy.19 The arbitrator in Millmen issued an award that 6 remanded the question of remedy to the parties, with the arbitrator “retaining jurisdiction 7 in the event that the [p]arties cannot agree upon such remedy.”20 The union filed a 8 petition with the district court to confirm the arbitrator’s decision, which the court 9 granted. The Ninth Circuit reversed, holding that the arbitrator’s award was not final 10 and therefore not reviewable.21 11 The Ninth Circuit drew parallels between the finality of an arbitration award and 12 the finality rule in 28 U.S.C. § 1291, which gives the courts of appeals jurisdiction over 13 appeals from final district court judgments. The panel noted that a final judgment under 14 Section 1291 is “one which ends the litigation . . . and leaves nothing for the court to do 15 but execute the judgment.”22 A judgment is not final “if it decides only liability and 16 leaves open the question of relief.”23 Applying these principles to the context of 17 arbitration, the Ninth Circuit concluded that “an arbitration award that postpones the 18 determination of a remedy should not constitute a final and binding award reviewable 19 20 21 17 Id. at 1376–77. 22 18 Id. at 1376. 23 19 Id. at 1374. 24 20 Id. at 1374–75. 25 21 Id. at 1374. 26 27 28 22 Id. at 1376 (citing Warehouse Rest., Inc. v. Customs House Rest., Inc., 726 F.2d 480, 481 (9th Cir.1984)). 23 Id. (quoting Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 740 (1976)). -5- 1 under section 301.”24 In so holding, the Ninth Circuit found that the arbitrator’s specific 2 retention of jurisdiction to decide the remedy indicated that the arbitrator did not intend 3 the award to be final.25 4 The Third Circuit’s decision in Union Switch26 is also on point. In Union Switch 5 the arbitrator found liability and ordered the company to make the adversely-affected 6 employees whole. The arbitrator did not determine the specific amount of damages that 7 would make the employees whole; instead, he retained jurisdiction “to make final rulings 8 and on any remedial disputes that the parties are unable to resolve after full 9 discussion.”27 As in the present case, the parties brought the award before the district 10 court without first obtaining a ruling from the arbitrator specifying damages. After the 11 district court confirmed the award, the Third Circuit reversed, holding that there was “no 12 doubt that the district court committed serious error when it entertained the original 13 cross-applications to vacate and enforce” the arbitrator’s incomplete award.28 14 The Third Circuit noted that it was a common and reasonable practice for 15 arbitrators “to ‘call time out’ during an arbitration in the hope that a partial resolution will 16 inspire the parties to work out their remaining differences on their own, thereby avoiding 17 the time and expense of additional arbitration.”29 Parties may not use these “time outs” 18 as “an opportunity to rush to court, either to preserve what they have just won, or (more 19 often) to forestall a process that is not turning out as they might have wished” because 20 21 22 24 Id. (citing Pub. Serv. Elec. & Gas Co. v. Sys. Council U-2, Int’I Bhd. of EIec. Workers, 703 F.2d 68, 69–70 (3d Cir.1983)). 23 25 24 26 25 Id. at 1376–77. Union Switch & Signal Div. Am. Standard Inc. v. United Elec., Radio & Mach. Workers of Am., Local 610, 900 F.2d 608 (3rd Cir. 1990). 26 27 Id. at 609. 27 28 Id. at 610. 28 29 Id. at 611. -6- 1 that would lead to “vastly prolonged and unnecessary litigation, which is of course 2 precisely what arbitration exists to avoid.”30 3 Applying these principles, the court concludes that the arbitrator’s award is not 4 final because it does not completely determine the issues presented to arbitration. The 5 award orders Horizon to make Dropik whole, but does not specify the amount of lost 6 truck payments that are necessary to accomplish that objective. The task of 7 determining this amount is more than a mere ministerial act, such as a mathematical 8 calculation.31 As Horizon observes, the unresolved factual issues include how truck 9 payments are calculated, how many truck payments Dropik lost due to his suspension, 10 and whether Dropik mitigated his damages, if necessary. It would contravene federal 11 labor policy and the purpose of arbitration for the court to intervene at this point. This 12 conclusion is bolstered by the fact that the arbitrator specifically retained jurisdiction to 13 resolve disputes about the remedy, which indicates that he did not intend for his award 14 to be final.32 15 Horizon cites Teamsters Local Union, No. 760 v. United Parcel Service, Inc.,33 16 and argues that Local 959 waived the ability to present evidence regarding these 17 unresolved factual issues because it did not raise these issues before the arbitrator 18 during his 90-day window of retained jurisdiction.34 This argument is unconvincing. 19 United Parcel Service is distinguishable from the present case because there the issue 20 21 30 22 31 23 24 25 Id. In contrast, where all that remains is a mathematical computation of the amount of damages, that is a mere “ministerial act” that does not render the award non-final. See Bensalem Park Maint., Ltd. v. Metro. Reg. Council of Carpenters, No. 11-2233, 2011 WL 2633154, at *5 (E.D. Pa. July 5, 2011); Millmen, 828 F.2d at 1377 (construing United Steelworkers, 363 U.S. at 599) (“[T]he arbitrator need not complete the mathematical computations of the award for the award to be final and reviewable.”)). 26 32 See Millmen, 828 F.2d at 1376–77. 27 33 921 F.2d 218 (9th Cir.1990). 28 34 Doc. 21 at 5–7. -7- 1 of waiver had already been decided by the arbitrator, which led to the Ninth Circuit’s 2 holding that the “union had no right to relitigate the arbitrator’s decision in federal 3 court.”35 Here, in contrast, the parties have not submitted the issue of waiver to the 4 arbitrator; the court therefore declines to reach the issue because it is premature.36 5 6 V. CONCLUSION For the reasons set forth above, the parties’ cross-motions for summary 7 judgment, at docket 9 and 13, are hereby DENIED. This matter is DISMISSED and 8 REMANDED to the arbitrator for completion of the arbitration award. 9 DATED this 20th day of May 2014. 10 /s/ JOHN W. SEDWICK UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 35 27 36 28 United Parcel Service, 921 F.2d at 220. See United Steel, Paper & Forestry v. Sekisui Specialty Chemicals Am., LLC, No. 5:11-CV-43, 2012 WL 692810, at *8 (W.D. Ky. Mar. 1, 2012) (construing United Parcel Service, 921 F.2d at 220). -8-

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