California Trucking Ass'n v. Brotherhood of Teamsters & Auto Truck Drivers, Local 70

• Decision Date: 03 June 1982
• Docket Number: No. 77-3445,77-3445
• Citation: 679 F.2d 1275
• Parties: 108 L.R.R.M. (BNA) 2955, 110 L.R.R.M. (BNA) 2741, 92 Lab.Cas. P 13,156, 95 Lab.Cas. P 13,766 CALIFORNIA TRUCKING ASSOCIATION, Plaintiff-Appellee, v. BROTHERHOOD OF TEAMSTERS & AUTO TRUCK DRIVERS, LOCAL 70, Defendant-Appellant. GRANNY GOOSE FOODS, INC., et al., Plaintiffs-Appellees, v. BROTHERHOOD OF TEAMSTERS & AUTO TRUCK DRIVERS, LOCAL 70, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1275

679 F.2d 1275

108 L.R.R.M. (BNA) 2955, 110 L.R.R.M. (BNA) 2741,

92 Lab.Cas. P 13,156, 95 Lab.Cas. P 13,766

CALIFORNIA TRUCKING ASSOCIATION, Plaintiff-Appellee, v. BROTHERHOOD OF TEAMSTERS & AUTO TRUCK DRIVERS, LOCAL 70,

Defendant-Appellant.

GRANNY GOOSE FOODS, INC., et al., Plaintiffs-Appellees, v. BROTHERHOOD OF TEAMSTERS & AUTO TRUCK DRIVERS, LOCAL 70,

Defendant-Appellant.

No. 77-3445.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Sept. 10, 1980.

Decided Oct. 19, 1981.

As Amended Dec. 10, 1981 and June 2, 1982.

Rehearing and Rehearing En Banc Denied June 3, 1982.

David A. Rosenfeld, Victor J. Van Bourg, Van Bourg, Allen, Weinberg & Roger, San Francisco, Cal., for defendant-appellant.

George J. Tichy, II, Richard H. Harding, Littler, Mendelson, Fastiff & Tichy, San Francisco, Cal., for plaintiffs-appellees.

Appeal from the United States District Court for the Northern District of California.

Before ELY and TANG, Circuit Judges and GRANT ^*, District Judge.

TANG, Circuit Judge:

This is an action arising under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1976), to recover damages caused by a claimed violation of a collective bargaining agreement. Brotherhood of Teamsters & Auto Truck Drivers, Local 70 (Local 70) appeals the district court's judgment determining Local 70's liability in damages for breach of the collective bargaining agreement running between it and the employers, California Trucking Association and two manufacturing concerns, Granny Goose Foods, Inc. and Sunshine Biscuit, Inc. (the employers). Although each issue spawns several sub-issues, the appeal can be reduced to three central questions: (1) whether the district court erred in entertaining the employers' damage actions instituted without prior resort to grievance procedures contained in the collective bargaining agreement; (2) whether the district court erred in its determination that each work stoppage litigated was in breach of the agreement; and (3) whether the damage formulae adopted by the lower court were erroneous. We hold that the district court had jurisdiction over the employers' damage action because Local 70 repudiated its agreement in proceedings before the lower court. We also hold that the court correctly determined that the work stoppages were in breach of the agreement. We affirm the district court's computation of damages save and except as to the issue of lost customers. Because the trial court failed to determine whether overhead should be deducted from projected lost gross profits, on that issue we reverse and remand.

I.

On April 1, 1967, the parties entered collective bargaining agreements entitled "National Master Freight Agreement" (NMFA) and "Local 70 Pickup and Delivery Supplemental Agreement" (Supplemental Agreement). The court below found that although the agreements ostensibly bound the principals for the term April 1, 1967 to March 31, 1970, Article 61 of the Supplemental Agreement provided that the term of the agreement was subject to and controlled by all the provisions of Article 37 of the National Master Agreement which in turn allowed annual extensions of the agreements absent notice by any of the parties to the contrary. ¹ The trial court also found that the 1967-1970 contracts were in effect during the period April 1, 1970, to May 18, 1970 (representing an extension of the original agreement by nearly two months) because neither side proffered notice of intent to discontinue the contracts.

Pursuant to section 2 of Article 37 of the NMFA, however, the parties took steps to amend the contracts in early 1970. ² These negotiations proceeded without impasse until a tentative agreement was achieved on April 2, 1970. The agreement was consummated when the union acquired the requisite ratification of the full membership of teamsters on May 18, 1970.

The district court found that under the terms of the contract only the monetary items contained in the agreement would have retroactive effect to April 1, 1970. In contrast, the court's interpretation of the agreement specifically disallowed retroactivity as to the nonmonetary language of the contract. Those provisions were found to be prospective only, dating from May 18, 1970, the date of ratification. The nonmonetary terms of the 1967-1970 contract, consequently, were deemed to be effective during the interim period, April 1, 1970 to May 18, 1970. ³

Although no impasse had been reached in the negotiations for the amendments to the contracts, Local 70, disenchanted with national negotiations and in apparent pursuit of a separate contract, initiated strike and picket activity against the trucking plaintiffs on or about April 1, 1970. As a consequence of a temporary restraining order issued by the Superior Court of Alameda County, the picketing ceased on April 4, 1970. Because of a mass "sick-in" executed on April 6 and 7, however, the work stoppage did not cease until April 8, 1970. Local 70 reinstated its work stoppage against the trucking association on May 8, 1970, and expanded the activity on May 14, 1970, to encompass the snack food industry plaintiffs, Granny Goose and Sunshine Biscuits. The work stoppages against the employers, which did not fully terminate until June, resulted in a complete cessation of virtually all revenue-producing operations during the period of the work stoppage.

Both the trucking association and the snack food plaintiffs' claims were removed from Alameda Superior Court to the United States District Court for the Northern District of California and there consolidated. After the claims were removed and consolidated, the trucking plaintiffs filed an unfair labor practice charge against Local 70 based on the April and May events. As an upshot of the filing, the National Labor Relations Board (the Board) issued complaint against the union. The NLRB trial examiner found that Local 70's April and May activity had violated the NLRA as an attempt to break the employers away from the multi-employer bargaining unit. The union's appeal to the NLRB was unsuccessful and its subsequent noncompliance with the NLRB order was countered by this court's judgment enforcing the Board's order. ⁴ The union later moved in district court for dismissal of the consolidated actions but the court denied the motion. Although the district court stayed proceedings with respect to claims arising on or after May 18, 1970, it conducted trial without jury as to the earlier claims, and found Local 70 liable in damages in excess of three million dollars. From that disposition, Local 70 appeals.

II

We must first determine whether the district court erred in holding that the employers could maintain a damages action under section 301 in lieu of arbitration. Review of this issue must begin with the language of the collective bargaining agreement.

Section 8(d) of the NMFA provides that:

In the event of strikes, work stoppages, or other activities which are permitted in a case of deadlock, default or failure to comply with majority decisions, no interpretation of this agreement by a tribunal shall be binding upon the Union or affect the legality or lawfulness of the strike unless the Union stipulates to be bound by such interpretation. Nothing herein shall prevent legal proceedings by the employer where the strike is in violation of this agreement (emphasis added).

The employers contend that this language permits a damages action in district court without prior resort to arbitral grievance procedures. Local 70 disputes this contention, arguing that arbitration is a condition precedent to an action in district court. In turn, the employers argue that even if Local 70's assertions are correct, it cannot now rely on grievance procedures it expressly repudiated in pleadings and motions before the district court.

Specifically, Local 70 argues that two provisions in the NMFA require arbitration prior to suit in district court. First, Local 70 argues that the word "herein" in section 8(d) of the NMFA is referable only to the NMFA and not its Supplemental Agreements. As a consequence, argues Local 70, the district court could not ignore the mandatory grievance procedures enumerated in the Supplemental Agreement. Second, Local 70 contends that the words "strike" and "in violation of this agreement" must first be construed before suit can be brought in district court and that only the arbitrator can determine the significance of the contested language. Resolution of these two questions hinges initially on a purely legal issue-whether the district court has the power to determine the existence and scope of a contract to arbitrate.

A.

The Supreme Court has repeatedly held that, absent a contrary provision in the collective bargaining agreement, the existence and scope of a contract to arbitrate are questions for the court to determine in the first instance:

The Congress * * * has by § 301 of the Labor Management Relations Act, assigned the courts the duty of determining whether the reluctant party has breached his promise to arbitrate. For arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.

United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1352, 4 L.Ed.2d 1409 (1960). Under the court's decisions, whether or not the parties are bound to arbitrate, as well as what issues they must arbitrate, is a matter to be determined by the court on the basis of the contract entered into by the parties. Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S.Ct. 1318, 1320, 8 L.Ed.2d 462 (1962). See International Union of Operating Engineers v. Flair Builders, Inc., 406 U.S. 487, 491-92, 92 S.Ct. 1710, 1712-1713, 32 L.Ed.2d 248 (1972); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 547, 84 S.Ct. 909, 912, 11 L.Ed.2d 898 (1964); Local Freight Drivers v. Braswell Motor Freight...