Frankl v. Hth Corp..

• Decision Date: 13 July 2011
• Docket Number: No. 10–15984.,10–15984.
• Parties: Joseph F. FRANKL,* Regional Director of Region 20 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner–Appellee,v.HTH CORPORATION; Koa Management, LLC, dba Pacific Beach Hotel; Pacific Beach Corporation, Respondents–Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

650 F.3d 1334

191 L.R.R.M. (BNA) 2001

161 Lab.Cas. P 10,397

Joseph F. FRANKL,* Regional Director of Region 20 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner–Appellee,

v.HTH CORPORATION; Koa Management, LLC, dba Pacific Beach Hotel; Pacific Beach Corporation, Respondents–Appellants.

No. 10–15984.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 15, 2011.Filed July 13, 2011.

Judith Ilene Katz, Margaret E. Luke (argued), and Steven Lewis Sokolow, National Labor Relations Board, Washington, D.C.; Jill H. Coffman and Olivia Garcia, National Labor Relations Board Region 20, San Francisco, CA, Thomas W. Cestare, Trent Kiyoshi Kakuda, and Dale Kanayo Yashiki, National Labor Relations Board Sub–Region 37, Honolulu, HI, for petitioner-appellee Joseph F. Frankl, Regional Director of Region 20 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board.Wesley Fujimoto (argued) and Ryan Sanada, Imanaka Kudo & Fujimoto LLC, Honolulu, HI, for respondents-appellants HTH Corporation, Pacific Beach Corporation, and Koa Management, LLC.Appeal from the United States District Court for the District of Hawai‘i, J. Michael Seabright, District Judge, Presiding. D.C. No. 1:10–cv–00014–JMS–LEK.Before: A. WALLACE TASHIMA, WILLIAM A. FLETCHER, and MARSHA S. BERZON, Circuit Judges.

OPINION

BERZON, Circuit Judge:

This appeal of an injunction issued pursuant to § 10(j), 29 U.S.C. § 160(j), of the National Labor Relations Act, 29 U.S.C. § 151 et seq., (the “NLRA” or the “Act”), raises two questions, one difficult, the other relatively straightforward.

The straightforward question is whether the injunction should be affirmed on its merits. We have little difficulty concurring in the District Court's assessment that the National Labor Relations Board (the “Board” or the “NLRB”) was likely to determine, and be affirmed by this Court in so determining, that appellants (the “Hotel”) engaged in violations of § 8(a)(1), (3) and (5) of the Act by refusing to bargain in good faith and excluding five union activists from the workforce. The District Court likewise did not abuse its discretion in concluding that the other requisites for § 10(j) relief were met.

The somewhat more difficult question is the logically prior one of whether the District Court had the power to issue the injunction. In 2007, the Board assigned the authority to approve § 10(j) petitions to the General Counsel of the Board. See Minutes of Board Action, Dec. 20, 2007. Pursuant to this delegation, the General Counsel approved the filing of the instant § 10(j) petition. The Hotel argues that the Act requires that petitions for § 10(j) relief be individually approved by the Board before they are filed with a district court. Because the Regional Director did not obtain such approval, the Hotel argues, he did not have authority to petition for the injunction, and the District Court was without the power to grant it. Like all the federal courts of appeals to have addressed the question, we disagree. See Osthus v. Whitesell Corp., 639 F.3d 841, 844–45 (8th Cir.2011); Overstreet v. El Paso Disposal, L.P., 625 F.3d 844, 851–52 (5th Cir.2010); Muffley v. Spartan Mining Co., 570 F.3d 534, 539–40 (4th Cir.2009).

I. BACKGROUND

When the General Counsel of the National Labor Relations Board issues a complaint alleging an unfair labor practice and commences proceedings before the Board, it takes considerable time—sometimes years—for the administrative process to conclude. But “[t]ime is usually of the essence [in labor disputes].” Miller v. Cal. Pac. Med. Ctr., 19 F.3d 449, 455 n. 3 (9th Cir.1994) (en banc) (quoting S.Rep. No. 80–105, at 8 (1947) (second alteration in original)). As a result of “the relatively slow procedure of Board hearing and order, followed many months later by an enforcing decree of the circuit court of appeals ... [i]t [may be] possible for persons violating the act to accomplish their unlawful objective before being placed under any legal restraint and thereby to make it impossible or not feasible [for the Board] to restore ... the status quo.” Id. (quoting S.Rep. No. 80–105, at 27 (1947)).

To remedy this problem, Congress added § 10(j) to the NLRA, as part of a comprehensive labor law reform in 1947. See Labor–Management Relations Act, 1947 (the “Taft–Hartley Act”), Pub.L. No. 80–101, § 101, 61 Stat. 136, 149, codified at 29 U.S.C. § 160(j). Section 10(j) provides:

(j) Injunctions

The Board shall have power, upon issuance of a complaint as provided in subsection (b) of this section charging that any person has engaged in or is engaging in an unfair labor practice, to petition any United States district court, within any district wherein the unfair labor practice in question is alleged to have occurred or wherein such person resides or transacts business, for appropriate temporary relief or restraining order. Upon the filing of any such petition the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction to grant to the Board such temporary relief or restraining order as it deems just and proper.

29 U.S.C. § 160(j). The purpose of a § 10(j) injunction is “to protect the integrity of the collective bargaining process and to preserve the Board's remedial power while it processes” an unfair labor practice complaint. Miller, 19 F.3d at 459–60.

The circumstances leading to the application for a § 10(j) injunction in this case are as follows: In 2002, the International Longshore and Warehouse Union, Local 142 (the “Union”) began to organize employees at the Pacific Beach Hotel in Waikiki, Honolulu.¹ A representation election was held in July, 2002, but the Board set it aside, finding that the Hotel had “engaged in objectionable conduct by coercively interrogating employees and maintaining an overly broad no-solicitation policy.” HTH Corp., 342 N.L.R.B. 372, 374 (2004). After a second election, preceding which, the Board found, the Hotel again engaged in objectionable conduct, see generally Pac. Beach Corp., 344 N.L.R.B. 1160 (2005), the Union was certified, prevailing by a one-vote margin.

Bargaining between the Union and the Hotel did not go well. Between January 22, 2007 and August 29, 2008, the Union filed numerous unfair labor practice charges with the Regional Director of Region 20 of the Board (the “Regional Director” or the “Director”). The Director investigated the charges and issued an unfair labor practice complaint.

On September, 30, 2009, after thirteen days of hearings, a Board Administrative Law Judge (“ALJ”) determined that the Hotel had violated § 8(a)(1), (3) and (5) of the Act and recommended that the Board order the Hotel to cease and desist from various unfair labor practices and to take other remedial actions. The Hotel filed extensive exceptions to the ALJ's ruling with the Board, and the Director filed limited ones. The case remains pending before the Board.

On January 7, 2010, the Director filed a petition in the District Court for injunctive relief under § 10(j) of the Act. In accordance with the Board's 2007 delegation of litigation authority, the filing of the petition was approved by the Board's General Counsel but not by the members of the Board itself. The Hotel opposed the petition on its merits but also moved to dismiss the complaint for lack of subject-matter jurisdiction, contending that the Director's failure to obtain the Board's approval to file the § 10(j) petition deprived the District Court of jurisdiction. Siding with the Director, the District Court issued an injunction requiring the Hotel to bargain with the Union, to reinstate certain discharged employees, to rescind unilateral changes to the bargaining unit members' terms and conditions of employment, and to take various other remedial measures.

The Hotel appealed. On June 14, 2011, while this appeal was pending, the Board issued its decision in the underlying action. See HTH Corp., 356 N.L.R.B. No. 182 (2011). It affirmed the ALJ's rulings, findings, and conclusions, and it modified the ALJ's recommended remedies in respects not relevant here.²

II. MOOTNESS

Before turning to the substantive issues at stake in this case, we must first address the issue of mootness. A Section 10(j) proceeding, in which the Board seeks injunctive relief to protect the lawful status quo while litigation is pending, can become moot when the NLRB issues its decision in the underlying administrative proceeding. See Miller, 19 F.3d at 453. Here, however, the Board filed in the district court a motion for civil contempt on February 14, 2011—while the Hotel was subject to the District Court's injunction, after this appeal was filed, and before the Board issued its order. The original contempt motion sought both coercive and compensatory relief, including back pay for an employee allegedly terminated in violation of the injunction and the Board's attorneys' fees and costs incurred in connection with the contempt proceeding. After the Board issued its decision, the Director notified the District Court that he no longer sought coercive remedies and, receiving an extension of time to file an amended civil contempt motion, withdrew the original contempt motion. On July 8, 2011, the Board filed an amended civil contempt motion seeking compensatory relief.

We hold that this appeal is not moot because its resolution is crucial to a pending claim for retrospective monetary relief sought by the Board against the Hotel in a civil contempt proceeding. See Trans Int'l Airlines, Inc. v. Int'l Bhd. of Teamsters, 650 F.2d 949, 955 (9th Cir.1980). “Despite superseding events, an issue is not moot if there are present effects that are legally significant.” Jacobus v. Alaska, 338 F.3d 1095, 1104 (9th Cir.2003). The validity of a civil contempt adjudication turns on the legitimacy of the underlying injunction. See, e.g., Kirkland v. Legion Ins....