Southwest Florida Area Local, American Postal Workers Union v. United States Postal Service
Filing
27
OPINION and ORDER sustaining in part and overruling in part 23 Petitioner's Objections to the Report and Recommendation and 24 Respondent's Objections to the Report and Recommendation; rejecting 22 Report and Recommendation; and denying 8 Respondent's Motion to Dismiss. See Opinion and Order for details. Signed by Judge John E. Steele on 9/19/2014. (MAW)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SOUTHWEST
FLORIDA
LOCAL,
AMERICAN
WORKERS UNION,
AREA
POSTAL
Petitioner,
v.
Case No: 2:14-cv-75-FtM-29DNF
UNITED
SERVICE,
STATES
POSTAL
Respondent.
OPINION AND ORDER
This matter is before the Court on consideration of United
States
Magistrate
Judge
Douglas
N.
Frazier’s
Report
and
Recommendation (Doc. #22), filed August 20, 2014, recommending
that Petitioner's Petition to Confirm Arbitration Award (Doc. #1)
be dismissed for failure to state a claim upon which relief can be
granted.
Petitioner and Respondent each filed Objections (Docs.
##23-24) on September 3, 2014 and Responses (Docs. ##25-26) on
September 17 and September 18, 2014, respectively.
I.
This matter stems from Respondent the United States Postal
Service’s (the Postal Service) decision in the summer of 2000 to
assign the “prepping” of certain flat mail at the Fort Myers postal
facility to the National Postal Mail Handlers Union (the Mail
Handlers) instead of to Petitioner the Southwest Florida Area
Local, American Postal Workers Union (the Union).
The Union
opposed that decision and, pursuant to a contractual arbitration
process, sought a determination that the Union, not the Mail
Handlers,
were
entitled
to
the
prepping
work.
The
Union
prevailed, and arbitrator Edward E. Hales (the Arbitrator) issued
an award (the Award) holding that the work assignment should have
been to Union employees and granting the Union employees back pay.
(Doc. #1-3.)
The Award did not determine the amount of monetary
relief owed to the Union employees or specify the method for
calculating back pay.
(Id.)
Instead, the Arbitrator remanded
those matters to be resolved in Article 15 grievance proceedings
pursuant to the parties’ collective bargaining agreement.1
(Id.)
On February 11, 2014, prior to the completion of the Article
15 process on remand, the Union filed its Petition to Confirm the
Award (the Petition).
(Doc. #1.)
The Postal Service moved to
dismiss the Petition, arguing that a federal court does not have
subject matter jurisdiction since the case is not ripe for judicial
review because the Award is not final and binding.
(Doc. #8.)
In
response, the Union argued that arbitration awards which determine
liability and specify a remedy are final and confirmable, even if
1
The grievance procedure is commonly referred to as an Article 15
Proceeding because the particulars of the grievance process are
set forth in Article 15 of the parties’ collective bargaining
agreement. (Doc. #1.2, p. 87.)
- 2 -
the amount of damages is left for further determination.
(Doc.
#14.)
On August 20, 2014, the Magistrate Judge issued a Report and
Recommendation recommending that the Postal Service’s motion to
dismiss be granted, but on a different ground than asserted in the
motion.
(Doc. #22.)
The Magistrate Judge agreed with the Postal
Service that the Award was not final and binding, but found that
a
federal
district
court
nonetheless
had
subject
matter
jurisdiction under the Postal Reorganization Act, which does not
specify that an arbitration award must be final and binding to
confer jurisdiction.
39 U.S.C. § 1208(b).
Nevertheless, the
Magistrate Judge concluded that the Petition should be dismissed
on the merits because the Union had failed to state a claim upon
which relief can be granted because the Award was not final and
binding and therefore could not be confirmed.
(Doc. #22.)
Both parties objected to the Report and Recommendation.
The
Union argues that the Report and Recommendation should be rejected
and the Postal Service’s motion to dismiss should be denied because
(1) the Postal Service’s motion was premised on a lack of subject
matter jurisdiction, an argument the Magistrate Judge ultimately
rejected; (2) the Magistrate Judge improperly converted the Postal
Service’s Rule 12(b)(1) motion to dismiss for lack of subject
matter jurisdiction into a Rule 12(b)(6) motion to dismiss for
failure to state a claim; (3) the Magistrate Judge improperly
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considered evidence outside the pleadings in determining that the
Union had failed to state a claim upon which relief can be granted;
and (4) the Award is final and binding.
(Docs. ##23, 25.)
The
Postal Service agrees with the Magistrate Judge’s recommendation
that the Award is not final and binding and, therefore, the
Petition should be dismissed.
(Docs. ##24, 26.)
However, the
Postal Service disagrees with the Magistrate Judge’s conclusion
that a final and binding award is not a pre-requisite for subject
matter jurisdiction.
(Id.)
The Postal Service argues that
because the Award is not final and binding the Petition should be
dismissed for lack of subject matter jurisdiction pursuant to Rule
12(b)(1).
(Id.)
Thus, neither party supports resolution of the
case under Rule 12(b)(6).
II.
After conducting a careful and complete review of the findings
and recommendations, a district judge may accept, reject or modify
the magistrate judge’s report and recommendation.
28 U.S.C. §
636(b)(1); United States v. Powell, 628 F.3d 1254, 1256 (11th Cir.
2010).
A district judge “shall make a de novo determination of
those portions of the report or specified proposed findings or
recommendations
636(b)(1)(C).
to
which
objection
is
made.”
28
U.S.C.
§
See also United States v. Farias-Gonzalez, 556 F.3d
1181, 1184 n.1 (11th Cir. 2009).
This requires that the district
judge “give fresh consideration to those issues to which specific
- 4 -
objection has been made by a party.”
Jeffrey S. v. State Bd. of
Educ. of Ga., 896 F.2d 507, 512 (11th Cir. 1990) (quoting H.R.
1609, 94th Cong., § 2 (1976)).
The district judge reviews legal
conclusions de novo, even in the absence of an objection.
See
Cooper-Houston v. Southern Ry. Co., 37 F.3d 603, 604 (11th Cir.
1994).
III.
“Federal
possessing
courts
only
that
are
courts
power
of
limited
authorized
by
jurisdiction,
Constitution
and
statute.” Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013) (quoting
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377
(1994)).
The Constitution mandates that “[t]he judicial Power of
the United States, shall be vested in one supreme Court, and in
such inferior Courts as the Congress may from time to time ordain
and
establish.”
U.S.
Const.
art.
III,
§
1.
Additionally,
“Article III, § 2, of the Constitution limits the jurisdiction of
federal courts to ‘Cases’ and ‘Controversies,’ which restricts the
authority of federal courts to resolving the legal rights of
litigants in actual controversies.”
Genesis Healthcare Corp. v.
Symczyk, 133 S. Ct. 1523, 1529 (2013) (citation and internal
quotation marks omitted).
See also Susan B. Anthony List v.
Driehaus, 134 S. Ct. 2334, 2341-42 (2014).
federal
court’s
jurisdiction
subject matter jurisdiction.
has
the
The party invoking a
burden
of
establishing
Driehaus, 134 S. Ct. at 2342;
- 5 -
Kokkonen, 511 U.S. at 377.
The Court begins with a description of the claim set forth in
the Petition.
an
As its caption states, the Petition seeks to confirm
arbitration
bargaining
award.
agreement
and
The
a
Petition
memorandum
alleges
of
a
collective
understanding
which
required arbitration of disputed issues; a dispute between the
Postal Service and the Union regarding the assignment of certain
prep work for flat mail; arbitration of that dispute pursuant to
the agreements; an arbitrator’s award in favor of the Union; and
the Union’s claim to judicially enforce the award.
There is no dispute that the Constitution permits Congress to
extend federal court jurisdiction to a claim such as this one.
The disputed issues are whether Congress has done so, and if so,
whether this particular case is ripe for judicial review and is
thus an Article III case or controversy.
Defendant’s motion to
dismiss focused on the ripeness issue, although its Reply (Doc.
#19) touches on the asserted lack of a jurisdiction-granting
statute.
Federal courts are authorized to confirm arbitration awards
pursuant to the Federal Arbitration Act, which provides in part:
If the parties in their agreement have agreed that
a judgment of the court shall be entered upon the
award made pursuant to the arbitration, and shall
specify the court, then at any time within one year
after the award is made any party to the arbitration
may apply to the court so specified for an order
confirming the award, and thereupon the court must
- 6 -
grant such an order unless the award is vacated,
modified, or corrected as prescribed in sections 10
and 11 of this title. If no court is specified in
the agreement of the parties, then such application
may be made to the United States court in and for
the district within which such award was made.
Notice of the application shall be served upon the
adverse party, and thereupon the court shall have
jurisdiction of such party as though he had
appeared generally in the proceeding. If the
adverse party is a resident of the district within
which the award was made, such service shall be
made upon the adverse party or his attorney as
prescribed by law for service of notice of motion
in an action in the same court. If the adverse party
shall be a nonresident, then the notice of the
application shall be served by the marshal of any
district within which the adverse party may be
found in like manner as other process of the court.
9 U.S.C. § 9.
It is well established that this is not a grant of
jurisdiction to federal courts, but that a plaintiff has to
establish an independent basis for federal jurisdiction in order
to seek confirmation of an arbitration award in federal court.
Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576, 581-82
(2008).
Thus, the first issue in this case is whether there is
such a statutory basis for federal jurisdiction of this claim to
confirm the Award.
The Petition asserts four statutory jurisdictional bases,
although there is at least one other.
The Petition relied of the
general federal question jurisdiction statute (Doc. #1, ¶3), which
authorizes
the
federal
district
courts
to
exercise
original
jurisdiction in “all civil actions arising under the Constitution,
laws, or treaties of the United States.”
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28 U.S.C. § 1331.
A
case can “arise under” federal law in two ways:
A case arises
under federal law when (1) federal law creates the cause of action
asserted, or (2) the case falls within a “special and small
category” of other cases in which “arising under” jurisdiction
still lies.
Gunn v. Minton, 133 S. Ct. 1059, 1064-65 (2013);
Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 699
(2006).
A claim by a labor union against an employer for breach
of a collective bargaining agreement is a claim under federal
common law.
“This Court has recognized a federal common-law claim
for breach of a CBA under LMRA § 301(a).”
Granite Rock Co. v.
International Brotherhood of Teamsters, 130 S. Ct. 2847, 2855 n.2
(2010) (citing Textile Workers v. Lincoln Mills of Ala., 353 U.S.
448, 456 (1957)).
A suit to enforce a favorable arbitration award is a § 301
claim, Diaz v. Schwerman Trucking Co., 709 F.2d 1371 (11th Cir.
1983), to which only federal law applies, Samples v. Ryder Truck
Lines,
Inc.,
755
F.2d
881,
884-85
(11th
Cir.
1985).
“A
‘straightforward’ § 301 claim involves a union suing an employer
for
breach
of
a
collective
bargaining
agreement.”
United
Paperworks International Local #395 v. ITT Rayonier, Inc., 931
F.2d 832, 834 n.7 (11th Cir. 1991).
Such a straightforward § 301
claim can be brought under the Postal Reorganization Act of 1970.
American Postal Workers Union, AFL-CIO v. United States Postal
Service, 823 F.2d 466, 469-70 (11th Cir. 1987).
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Although not cited in the Petition, there is a more specific
statute which states:
“The district courts shall have original
jurisdiction of any civil action arising under any Act of Congress
relating to the postal service.”
reason
to
give
this
“arising
interpretation than § 1331.
28 U.S.C. § 1339.
under”
statute
There is no
any
different
See, e.g., Gunn, 133 S. Ct. at 1064.
The Petition also asserts that a federal district court has
subject matter jurisdiction under 29 U.S.C. § 185, the Labor
Management Relations Act (LMRA), which provides that “[s]uits for
violation of contracts between an employer and a labor organization
representing
employees
in
an
industry
affecting
commerce
as
defined in this chapter, or between any such labor organizations,
may be brought in any district court of the United States having
jurisdiction of the parties, without respect to the amount in
controversy or without regard to the citizenship of the parties.”
Thus, when the Court “looks through” the petition, Vaden v.
Discover Bank, 556 U.S. 49, 62-65 (2009), the Court sees a claim
“arising under” federal law under 28 U.S.C. §§ 1331 and 1339.
Additionally, a portion of the Postal Reorganization Act
provides:
“Except as provided in section 3628 of this title, the
United States district courts shall have original but not exclusive
jurisdiction over all actions brought by or against the Postal
Service. Any action brought in a State court to which the Postal
Service is a party may be removed to the appropriate United States
- 9 -
district court under the provisions of chapter 89 of title 28.”
39 U.S.C. § 409(a). The reference to “section 3628 of this title”
concerns decisions of the Board of Governors of the United States
Postal Service with respect to rates proposed by the Postal Rate
Commission, which has nothing to do with the present case.
plain
language
of
this
provision
grants
district
“The
courts
jurisdiction over contract actions against the Postal Service.”
Tritz v. U.S. Postal Service, 721 F.3d 1133, 1138 (9th Cir. 2013).
Finally, “[s]uits for violation of contracts between the
Postal
Service
and
a
labor
organization
representing
Postal
Service employees, or between any such labor organizations, may be
brought
in
any
district
court
of
the
United
States
having
jurisdiction of the parties without respect to the amount in
controversy.”
“explicitly
39 U.S.C. § 1208(b).
authorize
judicial
While this provision does not
review
or
enforcement
of
arbitration awards,” Am. Postal Workers Union, AFL-CIO, 823 F.2d
at
469,
the
Act
is
functionally
identical
to
the
LMRA
and,
therefore, case law interpreting the LMRA is applicable to the
Act.
Sw. Florida Area Local Am. Postal Workers Union AFL-CIO,
Inc. v. U.S. Postal Serv., 143 F. App'x 154, 154 (11th Cir. 2005);
Am. Postal Workers Union, AFL-CIO, 823 F.2d at 469.
Accordingly,
the Act “gives federal courts jurisdiction to enforce arbitration
awards made pursuant to collective bargaining agreements” between
the Postal Service and postal worker labor organizations such as
- 10 -
the Union.
See Sheet Metal Workers' Int'l Ass'n Local 15, AFL-
CIO v. Law Fabrication, LLC, 237 F. App'x 543, 545 (11th Cir.
2007).
Despite the presence of multiple statutory bases for subject
matter jurisdiction in this case, the Supreme Court has held that
in some circumstances the failure to plead an element of a cause
of action may have jurisdictional consequences.
“Federal courts
lack subject-matter jurisdiction when an asserted federal claim is
‘so insubstantial, implausible, foreclosed by prior decisions of
this Court, or otherwise completely devoid of merit as not to
involve a federal controversy.’”
Arthur Andersen LLP v. Carlisle,
556 U.S. 624, 628 n.3 (2009) (quoting Steel Co. v. Citizens for
Better Environment, 523 U.S. 83, 89 (1998) (quoting Oneida Indian
Nation of N.Y. v. County of Oneida, 414 U.S. 661, 666 (1974))).
The Supreme Court has also stated that “the absence of a valid (as
opposed to arguable) cause of action does not implicate subjectmatter jurisdiction, i.e., the court's statutory or constitutional
power to adjudicate the case.” Lexmark Intern., Inc. v. Static
Control Components, Inc., 134 S. Ct. 1377, 1388 n.4 (2014) (quoting
Verizon Md. Inc. v. Public Serv. Comm'n of Md., 535 U.S. 635, 642–
643 (2002)).
The Court finds that the Petition in this case is not so
insubstantial, implausible, foreclosed by prior binding precedent,
or otherwise completely devoid of merit, as not to involve a
- 11 -
federal controversy.
If it is determined that the allegations in
the Petition are incorrect, no cause of action will exist, but the
Court will continue to have jurisdiction.
E.g., General Drivers,
Warehousemen and Helpers, Local Union No. 89 v. Riss and Company,
Inc., 372 U.S. 517, 519-20 (1963).
IV.
While the district court has subject matter jurisdiction of
this case under multiple statutes, the question still remains
whether this particular dispute is a “case” or “controversy” within
the meaning of Article III.
The Postal Service maintains that it
is not ripe for judicial review because the arbitration award is
not final and binding.
“Ripeness
reflects
constitutional
considerations
that
implicate Article III limitations on judicial power, as well as
prudential reasons for refusing to exercise jurisdiction.”
Stolt-
Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662, 670
n.2
(2010)
(citation
and
internal
quotation
marks
omitted);
National Park Hospitality Assn. v. Department of Interior, 538
U.S. 803, 808 (2003).
To determine whether a claim is ripe for
judicial review, the court considers both “the fitness of the
issues for judicial decision” and “the hardship of withholding
court consideration.”
Stolt-Nielsen S.A., 559 U.S. at 670 n.2;
National Park Hospitality Assn., 538 U.S. at 808.
The court
considers: “(1) whether delayed review would cause hardship to the
- 12 -
plaintiffs;
(2)
whether
judicial
intervention
would
inappropriately interfere with further administrative action; and
(3)
whether
the
courts
would
benefit
development of the issues presented.”
from
further
factual
Ohio Forestry Ass’n, Inc.
v. Sierra Club, 523 U.S. 726, 733 (1998).
Generally, “[a] claim
is not ripe for adjudication if it rests upon contingent future
events that may not occur as anticipated, or indeed may not occur
at all.”
Texas v. United States, 523 U.S. 296, 300 (1998)
(internal citation and quotation marks omitted).
a claim is a legal question.
The ripeness of
Temple B’Nai Zion, Inc. v. City of
Sunny Isles Beach, Fla., 727 F.3d 1349, 1356 (11th Cir. 2013).
The Court concludes that the claim is ripe for judicial
review.
Delayed review will cause hardship to Petitioner, which
has been involved in the dispute for over a decade.
intervention
will
not
inappropriately
interfere
Judicial
with
administrative action by the Postal Service if needed.
further
The Court
will not benefit from further factual development of the issues
presented.
This is not to say that the Court concludes that the Petition
states a cause of action under Rule 12(b)(6).
That issue is judged
by a different standard, and the Postal Service has waived its
ability to seek dismissal under Ruler 12(b)(6) for failure to state
a claim by failing to include that basis in its jurisdictional
motion to dismiss.
See Fed. R. Civ. P. 12(g)(2).
- 13 -
Neither party
addressed the issue of failure to state a claim, and the Court
declines to pre-judge that issue absent the ability of the parties
to address it in the proper context, such as a motion for judgment
on the pleadings.
Accordingly, it is now
ORDERED:
1.
Respondent’s
Objection
(Doc.
#24)
and
Petitioner’s
Objections (Doc. #23) are SUSTAINED IN PART AND OVERRULED IN PART.
2.
The
Report
and
Recommendation
(Doc.
#22)
is
hereby
REJECTED.
3.
Respondent's Motion to Dismiss (Doc. #8) is DENIED.
DONE and ORDERED at Fort Myers, Florida, this
of September, 2014.
Copies:
Hon. Douglas N. Frazier
United States Magistrate Judge
Counsel of Record
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19th
day
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