IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-40208
LOCAL 1351 INTERNATIONAL LONGSHOREMENS ASSOCIATION;
SOUTH ATLANTIC AND GULF DISTRICT INTERNATIONAL LONGSHOREMEN'S ASSOCIATION,
AFL-CIO,
versus
SEA-LAND SERVICE INC; CARRIERS' CONTAINER
COUNCIL,
Defendants-Appellees,
versus
OFFICE & PROFESSIONAL EMPLOYEES INTERNATIONAL
UNION, AFL-CIO (OPEIU),
Movant-Appellant.
Appeal from the United States District
Court
for the Southern District of Texas
June 9, 2000
Before GARWOOD, BARKSDALE, and STEWART, Circuit
Judges.
CARL E. STEWART, Circuit Judge:
Before the court is a jurisdictional dispute
involving two unions. The disputes began roughly in 1994 and involve the
apportionment of employees assigned to work the gate at Sea-Land's Houston
port facility. Defendant-Appellee Sea-Land Service, Inc. ("Sea-Land") is
a party to separate collective bargaining agreements with both Plaintiff-Appellee
Local 1351 International Longshoremen's Association ("ILA") and Movant-Appellant
the Office & Professional Employees International Union ("OPEIU").
Both agreements contain similar grievance procedures providing for the
resolution of disputes through arbitration. The district court ordered
Sea-Land and the unions to participate in a tripartite arbitration. For
the following reasons, we reverse.
FACTUAL AND PROCEDURAL BACKGROUND
Both unions in this case contest the assignment
of work by Sea-Land at its Port of Houston ("Port") facility, specifically
the number of OPEIU and ILA employees that should be employed to do record
keeping and clerical work at the container terminal in accordance with
their respective collective bargaining agreements. Prior to 1992, ILA clerks
obtained documentation at the terminal and gave handwritten forms to OPEIU
clerks who would either then type the data or enter it into a computer
system. In 1992, Sea-Land purchased a new computer system which made it
unnecessary to have the information written first, and then inputted. Sea-Land
assigned the remaining work of collecting the data and entering it into
the computer system to ILA.
OPEIU filed a grievance against Sea-Land protesting
the loss of this work. On May 5, 1995, OPEIU and Sea-Land entered into
a bilateral arbitration. The arbitrator found that OPEIU and ILA were entitled
to share the work at the container terminal 50-50. On June 28, 1996, OPEIU
obtained a judgment in the Southern District of New York enforcing the
arbitrator's award.(1) Thereafter, on July
24, 1997, OPEIU filed another grievance regarding the allocation of work
at the Port facility, alleging that Sea-Land was not in compliance with
the arbitration award and accompanying court judgment. After Sea-Land denied
the grievance, OPEIU contacted the arbitrator on July 30, 1997, and a hearing
was scheduled on the grievance for September 17, 1997 ("Marx arbitration").
ILA did not participate in the arbitration
proceedings held between OPEIU and Sea-Land. On March 4, 1997, ILA asserted
two grievances also protesting the assignment of work at the Port to employees
represented by OPEIU. The Local Industry Grievance Committee found that
all clerical work at the gate of the Port facility must be performed exclusively
by ILA. Following completion of this arbitration, which did not include
OPEIU,(2) on August 22, 1997 ILA brought
suit in the Southern District of Texas before Judge Samuel Kent seeking
to confirm the arbitration award which enforced the two grievance awards.
As an affirmative defense, Sea-Land argued that the arbitration award which
had been confirmed in the Southern District of New York's judgment ordered
it to divide the work in question equally between ILA and OPEIU. OPEIU
was neither named or served in this present action. However, ILA and Sea-Land
asked for a stay of the Marx arbitration scheduled to take place between
OPEIU and Sea-Land, and Judge Kent granted this stay.
On September 12, 1997, pursuant to Federal
Rule of Civil Procedure 19 ("Rule 19"), the district court joined OPEIU
as an indispensable party. At the same time, the district court stayed
further bilateral arbitration proceedings between OPEIU and Sea-Land.(3)
The court then denied OPEIU's motion to dismiss(4)
on October 3, 1997. On October 9, the district court ordered all parties
to re-arbitrate their dispute in one tripartite arbitration proceeding.
OPEIU then filed a motion to reconsider and asked that the court vacate
its other orders regarding OPEIU. OPEIU attended the arbitration because
of the threat of a show cause order levied by Judge Kent. At the arbitration,
held November 17-18, 1997, OPEIU objected on the record but did not participate
further in the arbitration. OPEIU offered no evidence or witnesses at the
tripartite arbitration hearing.
On January 7, 1998, the arbitrator rendered
his award, awarding all the work in dispute to ILA. On January 13, 1998,
the district court confirmed the award sua sponte, simultaneously
dismissing ILA's claims against Sea-Land with prejudice and denying OPEIU's
motion to reconsider and request that the district court vacate its order
staying arbitration and ordering tripartite arbitration.
OPEIU moved for an order in the Southern District
of New York for enforcement of its original judgment against Sea-Land.
On May 4, 1998, Judge Patterson of the Southern District of New York denied
OPEIU's motion. The district court stated "we agree with the Texas court
that tripartite arbitration provided a pragmatic solution." In April 2000,
the Second Circuit affirmed the New York district court's denial of OPEIU's
motion seeking enforcement of the prior judgment which had been awarded
in its favor. See OPEIU v. Sea-Land, 210 F.3d 117 (2nd
Cir. 2000)
Discussion
I. Standard of Review
We exercise plenary, de novo review of a district
court's assumption of subject matter jurisdiction. See Ceres
Gulf v. Cooper, 957 F.2d 1199, 1204 (5th Cir. 1992). We
also review a district court's grant of a motion to compel arbitration
de novo. See Pennzoil Exploration & Prod. Co. v. Ramco Energy
Ltd., 139 F.3d 1061, 1064 (5th Cir. 1998).
II. Subject Matter Jurisdiction
Appellant argues that the district court did
not have subject matter jurisdiction over OPEIU's dispute with Sea-Land
and therefore, was without authority to order OPEIU to participate in the
tripartite arbitration. We must satisfy ourselves, independent of the district
court's analysis, that we have jurisdiction over the case. See Silver
Star Enters., Inc. v. M/V Saramacca, 19 F.3d 1008, 1013 n.6 (5th
Cir. 1994). The district court's basis for ordering OPEIU to participate
in the present case is that under Fed. R. Civ. P. 19 OPEIU is an indispensable
party to this litigation. Rule 19 provides for the joinder of persons necessary
for a just adjudication. In pertinent part, the Rule states that
(a) Persons to be Joined if Feasible. A person
who is subject to service of process and whose joinder will not deprive
the court of jurisdiction over the subject matter shall be joined as a
party in the action if (1) in the person's absence complete relief cannot
be accorded among those already parties, or (2) the person claims an interest
relating to the subject of the action and is so situated that the disposition
of the action in the person's absence may (i) as a practical matter impair
or impede the person's ability to protect that interest or (ii) leave any
one of the persons already parties subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent obligations by reason of the
claimed interest. If the person has not been joined, the court shall order
that the person be made a party.
Fed. R. Civ. P. 19(a).
Joinder was appropriate in the present case
because the underlying issue in this action is a dispute between OPEIU
and ILA over how many workers each is entitled to have at the Port facility
gate. Although ILA filed this action, both unions have an interest in how
the work will be allocated. It is also clear that the separate grievances
filed regarding the allocation of this work left Sea-Land with inconsistent
obligations. Consequently, joinder was proper in accordance with Rule 19
because a final resolution of this dispute would be severely hindered without
OPEIU's presence. SeeProvident Tradesmens Bank & Trust Co. v. Patterson,
390 U.S. 102, 107-09, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968).
As another basis for jurisdiction over this
matter, appellees cite 29 U.S.C. § 185 (the Labor and Management Relations
Act § 301 ("LMRA")), and 9 U.S.C. § 9 (Federal Arbitration Act,
"FAA"). Both the LMRA and the FAA grant jurisdiction over parties who are
signatories to the collective-bargaining agreement in dispute. See,
e.g. Ramsey v. Signal Delivery Serv., Inc., 631 F.2d 1210, 1212
(5th Cir. 1984) (observing that suits under the LMRA "are confined
to defendants who are signatories of the collective-bargaining agreement
under which they are brought");
Commercial Metals Co. v. Balfour, Guthrie
& Co. Ltd., 577 F.2d 264, 268-69 (5th Cir. 1978) (holding
that a federal question must exist before jurisdiction is conferred by
the FAA). The federal courts also have broad discretion in implementing
the policies embodied in our national labor laws. See Textile
Workers Union v. Lincoln Mills of Alabama, 353 U.S. 448, 456-57, 77
S.Ct. 912, 1 L.Ed. 2d 972 (1957).
ILA filed the present action seeking confirmation
of the arbitrator's award which enforced ILA's two grievance awards. These
grievance awards were based on the collective bargaining agreement between
ILA and Sea-Land. Therefore, the district court clearly had jurisdiction
to confirm ILA's two grievance awards. Although OPEIU is not a signatory
to the collective bargaining agreement between ILA and Sea-Land, OPEIU
does have a separate collective bargaining agreement with Sea-Land that
mandates arbitration. Because assignment of work at the Port facility is
the central issue of ILA's dispute and any decision would effect OPEIU
and its collective bargaining agreement, the district court had broad discretion
to exercise jurisdiction under LMRA.
III. Authority to Compel Tripartite Arbitration
Appellant argues that the district court did
not have authority to order OPEIU, ILA and Sea-Land into a joint tripartite
arbitration absent an agreement between the three parties to participate
in this type of arbitration. This court has previously addressed whether
three parties who are signatories to two separate agreements can be ordered
to submit to tripartite arbitration. See Del E. Webb Constr.
v. Richardson Hosp. Auth., 823 F.2d 145, 148 (5th Cir. 1987).
In Del E. Webb, we reversed a district court's consolidation of
separate claims among a contractor, a construction company, and an architect.
See id. at 147-48. We there observed that "the sole question for
the district court is whether there is a written agreement among the parties
providing for consolidated arbitration." Id. at 149. We also held
that, under § 4 of the FAA, a district court may not order tripartite
arbitration unless all three parties consent in writing to arbitration
in the agreement itself, even if the result is piecemeal litigation. See
id. at 147, 150.(5)
While Del E. Webb is instructive the
facts of the present case differ significantly because this is a labor
dispute. The Supreme Court has noted that labor arbitration should not
be treated in the same manner as arbitration of general commercial disputes.
In Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574
(1960) the Court stated that:
[T]he run of arbitration cases . . . becomes
irrelevant to our problem. There the choice is between the adjudication
of cases or controversies in courts with established procedures or even
special statutory safeguards on the one hand and the settlement of them
in the more informal arbitration tribunal on the other. In the commercial
case, arbitration is the substitutefor litigation. Here arbitration is
the substitute for industrial strife. Since arbitration of labor disputes
has quite different functions from arbitration under an ordinary commercial
agreement, the hostility evinced by courts toward arbitration of commercial
agreements has no place here. For arbitration of labor disputes under collective
bargaining agreements is part and parcel of the collective bargaining process
itself.
363 U.S. at 578 (internal citations omitted).
Specifically, the Supreme Court has recognized the place of tripartite
arbitration in labor disputes. The Court has observed that,
In order to interpret [a collective-bargaining]
agreement it is necessary to consider the scope of other related collective
bargaining agreements, as well as the practice, usage and custom pertaining
to such agreements. This is particularly true when the agreement is resorted
to for the purpose of settling a jurisdictional dispute over work assignments.
Transportation-Communication Employees
Union v. Union Pacific Railroad Co., 385 U.S. 157, 161, 87 S.Ct. 369,
17 L.Ed. 2d 264 (1967).
Other circuits have affirmed tripartite arbitration
orders in situations where two unions have received conflicting arbitration
awards or where a union is seeking to be awarded work that may lead to
a grievance from another union. See, e.g. United States Postal
Serv. v. National Rural Letter Carriers Ass'n, 959 F.2d 283, 286-87
(D.C. Cir. 1992); Retail, Wholesale & Dep't Store Union, Local 390
v. Kroger Co., 927 F.2d 275, 281 (6th Cir. 1991) (involving
conflicting bilateral arbitration awards); United States Postal Serv.
v. American Postal Workers Union, 893 F.2d 1117, 1119 (9th
Cir. 1990); Local 850, Int'l Ass'n of Machinists v. T.I.M.E.-D.C., Inc.,
705 F.2d 1275, 1277 (10th Cir. 1983) (involving conflicting
awards); Columbia Broadcasting Sys., Inc. v. American Recording &
Broadcasting Ass'n, 414 F.2d 1326, 1328-29 (2nd Cir. 1969).
While tripartite arbitration is generally
favored in these types of labor disputes, the major procedural obstacle
to ordering it in the present case is that the Southern District of New
York had already entered a final judgment affirming the arbitrator's decision
in the grievance filed by OPEIU against Sea-Land. None of the cases in
which courts ordered tripartite arbitration have involved an earlier arbitration
award which has already been confirmed by a district court's final judgment.
See e.g., Retail, Wholesale & Dep't Store Union, 959
F.2d at 276-77 (union who received arbitration award first ordered into
tripartite arbitration when it sought confirmation of that arbitration
award);
Columbia Broadcasting System, 414 F.2d at 1327 (employer
sought tripartite arbitration before entering bilateral arbitration with
either of the two unions).
The district court itself recognized that
a final judgment had been entered by another district court. The district
court sidestepped this issue, however, by questioning the validity of the
New York court's decision because ILA had not been joined as a party. The
Supreme Court has previously indicated that an arbitration award may be
unenforceable if an indispensable party is missing from the litigation.
See Transportation-Communication, 385 U.S. at 159. The Second
Circuit, in affirming the Southern District of New York decision, explained
that the essence of the New York court's decision was that ILA was a necessary
party to the initial arbitration in New York between Sea-Land and OPEIU,
and that ILA's absence "rendered continued enforcement of the judgment
entered on that award in New York inequitable." OPEIU, 210 F.3d
at 122. The Second Circuit held that "the New York court had the power
to decline to enforce the judgment confirming an arbitration award because
a change in circumstances had made clear that the dispute was a jurisdictional
labor dispute, that tripartite arbitration was the proper and necessary
vehicle to resolve the dispute." Id. at 123.
Despite the Second Circuit's holding that
the New York district court appropriately declined to enforce its previous
judgment the Second Circuit declined to rule on the issue that is squarely
before us in this case, namely whether the Texas district court erred in
ordering tripartite arbitration. Id. at 124 ("The issue of whether
the Texas action constituted an impermissible collateral attack on the
Southern District of New York judgment, or whether the Texas Court erred
in ordering tripartite arbitration, is not before us."). The actions of
the district court in regards to the dispute between Sea-Land and OPEIU
violate the rule of collateral estoppel and res judicata. See Hicks
v. Quaker Oats Co., 662 F.2d 1158, 1166 (5th Cir. 1981)
(stating that those doctrines apply where the issues are identical, the
issue has been previously litigated, and the determination of the issue
previously was a critical and necessary part of the judgment in that earlier
action); see also Universal American Barge Corp. v. J-Chem, Inc.,
946 F.2d 1131, 1135 (5th Cir. 1992) (holding that collateral
estoppel applies to arbitration proceedings); Miller Brewing Co. v.
Fort Worth Distributing Co., Inc., 781 F.2d 494, 498 (5th
Cir. 1986) (holding that res judicata precludes a party's seeking relief
through arbitration when such relief would be barred in the courts). Consequently,
the district court should not have disturbed the final judgment and ordered
OPEIU to participate in a tripartite arbitration. Although as the Second
Circuit noted, Judge Patterson may have properly refused to enforce his
initial judgment, and acknowledged that tripartite arbitration was the
appropriate solution, this only occurred after the Southern District of
Texas had ordered the tripartite arbitration in October 1997. OPEIU, relying
on the final judgment, essentially refused to participate in the tripartite
arbitration. OPEIU should not be penalized for relying on a final judgment.
See United Food and Commercial Workers Union AFL-CIO v. Pilgrim's
Pride Corporation, 193 F.3d 328, 331 (5th Cir. 1999) (stating
that although a district court might later modify its enforcement order
of an arbitration award, this does not diminish the order's finality or
present effect). Therefore, the district court's decision to order a tripartite
arbitration, although well intentioned, was inappropriate in the wake of
the final judgment which OPEIU had obtained.(6)
Conclusion
Although achieving fair and complete resolution
of this multi-faceted dispute through tripartite proceedings was the laudable
objective of the district court, the procedural posture of the parties
at the time the judgment was entered militated against pursuing tripartite
arbitration. Arguably, piecemeal litigation will result from this holding,
but the alternative course of action--making a party who has relied on
a final judgment subsequently submit to another arbitration--is not congruent
with the controlling case law. Accordingly, the district court's judgment
is REVERSED and REMANDED for proceedings consistent with this opinion.
1. The judgment confirming
the award was issued in OPEIU v. Sea-Land Servs., Inc., No. 96-CV-3043
(S.D.N.Y. 1996) by Judge Robert P. Patterson, Jr.
2. OPEIU was not a party
to the collective-bargaining agreement between ILA and Sea-Land; it did
not receive notice of or participate in the ILA/Sea-Land grievance proceedings.
3. In response to ILA's
and Sea-Land's request to stay the proceedings in OPEIU's case, Judge Kent
said:
I'm troubled right now with the notion of
whether I have jurisdiction to go around telling arbitrators and people
who are not immediately before the Court what to do, but I'm willing to
try, and until the Circuit says I can't, I guess I can . . . . Give me
a proposed order that stops everything in its track right now.
After the arbitration, Judge Kent denied OPIEU's
motion to reconsider, writing that:
[B]ecause this Court had no knowledge of [the
Southern District of New York's] decision, this Court acted promptly in
accordance with substantial authority . . . . If this Court overstepped
its bounds, the Court respectfully notes that the Fifth Circuit can sort
it out.
Apparently, Judge Kent did have knowledge
of Judge Patterson's decision. At the hearing involving a stay several
months earlier, Judge Kent told counsel for Sea-Land (who had informed
him of the OPEIU arbitration award) that "I'm not interested in getting
into some catfight with another district Judge."
4. OPEIU had moved to dismiss
for lack of jurisdiction because it had been neither named nor served in
the suit and because it is not a party to the ILA/Sea-Land collective-bargaining
agreement.
5. See also,
Champ v. Siegel Trading Co., Inc., 55 F.3d 269, 277 (7th
Cir. 1995) (noting that the Supreme Court "has repeatedly emphasized that
we must rigorously enforce the parties' agreement as they wrote it, even
if the result is piece-meal litigation"); Government of United Kingdom
v. Boeing Co., 998 F.2d 68, 74 (2nd Cir. 1993) (holding
that a district court cannot consolidate arbitration proceedings arising
from separate agreements to arbitrate, absent the parties' agreement to
allow such consolidation); American Centennial Ins. Co. v. National
Cas. Co., 951 F.2d 107, 108 (6th Cir. 1991) (holding that
a court is not permitted to interfere with private arbitration agreements
in order to impose its own view of speed and economy, even where the result
would be the inefficient maintenance of separate proceedings); Baesler
v. Continental Grain Co., 900 F.2d 1193, 1195 (8th Cir.
1990) (holding that the Supreme Court "has explicitly rejected the assertion
that the overriding goal of the [FAA] is to promote the expeditious resolution
of claims"); Protective Life Ins. Corp. v. Lincoln Nat'l Life Ins. Corp.,
873 F.2d 281, 282 (11th Cir. 1989) (per curiam) (stating that
"[p]arties may negotiate for and include provisions for consolidation of
arbitration proceedings in their arbitration agreements, but if such provisions
are absent, federal courts may not read them in").
6. Because we have concluded
that the district court erred in ordering the tripartite arbitration we
will not address the appropriateness of the district court's confirmation
of the tripartite arbitration award. |