781 F.2d 1349 (9th Cir. 1986), 84-6137, Martori Bros. Distributors v. James-Massengale

Docket Nº:84-6137, 84-6274 and 84-6275.
Citation:781 F.2d 1349
Party Name:7 Employee Benefits Ca 1312 MARTORI BROS. DISTRIBUTORS, an Arizona partnership; O.P. Murphy Produce Company, Inc., dba O.P. Murphy & Sons, a Texas corporation; J.R. Norton Company, an Arizona corporation; and Mario Saikhon, Inc., a California corporation, Plaintiffs-Appellants-Cross-Appellees, v. Jyrl JAMES-MASSENGALE, [*] Chair; Gregory L. Gonot,*
Case Date:January 30, 1986
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1349

781 F.2d 1349 (9th Cir. 1986)

7 Employee Benefits Ca 1312

MARTORI BROS. DISTRIBUTORS, an Arizona partnership; O.P.

Murphy Produce Company, Inc., dba O.P. Murphy & Sons, a

Texas corporation; J.R. Norton Company, an Arizona

corporation; and Mario Saikhon, Inc., a California

corporation, Plaintiffs-Appellants-Cross-Appellees,

v.

Jyrl JAMES-MASSENGALE, [*] Chair; Gregory L.

Gonot,* Board Member; Patrick Henning, Board Member; John

McCarthy, Board Member; Jorge Carrillo, Board Member;

Regional Director--El Centro; [**] Regional

Director--Salinas; [***]] Agricultural Labor

Relations Board, State of California, Defendants-

Appellees-Cross-Appellants.

Nos. 84-6137, 84-6274 and 84-6275.

United States Court of Appeals, Ninth Circuit

January 30, 1986

Argued and Submitted March 7, 1985.

As Amended April 1, 1986.

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[Copyrighted Material Omitted]

Page 1351

Hersh & Stoll, Wayne A. Hersh, Charley M. Stoll, Alan J. Saxe, Newport Beach, Cal., for plaintiffs-appellants-cross-appellees.

Littler, Mendelson, Fastiff & Tichy, A Professional Corp., Robert K. Carrol, Scott A. Wilson, Samuel F. Hoffman, San Francisco, Cal., for Mario Sikhon, Inc.

Daniel G. Stone, Sol. of the Bd., Nancy C. Smith, Cathy Christian, Deputy Solicitors Agricultural Labor Relations Bd., Sacramento, Cal., for defendants-appellees-cross-appellants.

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

Before BARNES and REINHARDT, Circuit Judges, and SOLOMON, [****] District Judge.

REINHARDT, Circuit Judge:

I. BACKGROUND

A. Proceedings Below

The appellants (the Employers) are all employers of agricultural laborers. The California Agricultural Labor Relations Board (the ALRB), in several unfair labor practice proceedings, held that all of the Employers violated the Agricultural Labor Relations Act of 1975 (the ALRA), Cal.Lab.Code Secs. 1140-1166.3 (Deering 1976 & Supp.1985) by refusing to bargain in good faith with the union representing their employees. By way of remedy, the ALRB then ordered the employers to make their employees whole by paying them the difference between the compensation, including wages and fringe benefits, the employees actually received, and the compensation the ALRB determined the employees would have received had the Employers bargained in good faith.

While the various cases were apparently in differing postures before the ALRB and the California Court of Appeal, 1 the Employers filed an action in federal district court to enjoin the ALRB and certain of its officials 2 (hereafter collectively referred to as the ALRB) from enforcing the component of the "make-whole" order that deals with fringe benefits. The Employers also sought a declaration that California Labor Code Sec. 1160.3, to the extent that it permits the ALRB to award the fringe benefit component of a "make-whole" order, is preempted by the Employee Retirement Income Security Act (ERISA), Pub.L. No. 93-406, 88 Stat. 832 (1974) (codified at 29 U.S.C. Secs. 1001 et seq. ), and violates the Contract Clause (art. I, Sec. 10, cl. 1) and the Fifth Amendment of the United States Constitution. The Employers challenge only the legality of the part of the "make-whole" order that is calculated with reference to amounts paid in the form of fringe benefits. They do not challenge the component of the "make-whole" order that is computed on the basis of the amount paid as hourly wages. The district court granted summary judgment in favor of the ALRB, and the Employers appealed. 3

We review the grant of summary judgment de novo, Lojek v. Thomas, 716 F.2d 675, 677 (9th Cir.1983). Because it is agreed that there are no contested issues of fact, we need decide only whether the substantive law was correctly applied. Lane v. Goren, 743 F.2d 1337, 1339 (9th

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Cir.1984). We hold that it was, and affirm the district court.

B. The Agricultural Labor Relations Act

The ALRB has jurisdiction under the ALRA to investigate and adjudicate unfair labor practices committed by agricultural workers or their employers. See Cal.Lab.Code Secs. 1160-1160.3. If the ALRB determines that the ALRA has been violated, it is authorized to issue remedial orders. Cal.Lab.Code Sec. 1160.3. Within 30 days after the ALRB issues a final order, any aggrieved person may file a petition for review with the California Court of Appeal. Cal.Lab.Code Sec. 1160.8. The ALRB cannot file a petition for review, and once a petition for review has been filed, the ALRB cannot move in Superior Court, as described infra, to enforce its order. Cal.Lab.Code Sec. 1160.8; Tex-Cal Land Management, Inc. v. ALRB, 24 Cal.3d 335, 348 n. 8, 595 P.2d 579, 587 n. 8, 156 Cal.Rptr. 1, 8 n. 8 (1979). The Court of Appeal, when acting on a petition for review, may modify, enforce, or set aside in whole or in part, the order of the ALRB. Cal.Lab.Code Sec. 1160.8. The Court of Appeal may also summarily deny the petition for review. Tex-Cal Land Management, 24 Cal.3d at 351, 595 P.2d at 588, 156 Cal.Rptr. at 10. When considering the petition for review, the Court of Appeal must give conclusive effect to the ALRB's findings of fact if they are supported by substantial evidence on the record considered as a whole. Cal.Lab.Code Sec. 1160.8.

If, after 30 days from the entry of a final order by the ALRB, no petition for review has been filed and the order has not been complied with, then the ALRB may apply to the California Superior Court for enforcement of its order. Cal.Lab.Code Sec. 1160.8. If the Superior Court determines that the order was issued pursuant to ALRB procedures and that the order has not been complied with, then the Superior Court is to enforce the order without reviewing its merits. Cal.Lab.Code Sec. 1160.8. Furthermore, if the Court of Appeal should summarily deny a petition for review, and the ALRB's order is not then complied with, the ALRB must request the Superior Court to enforce the order. Tex-Cal Land Management, 24 Cal.3d at 352, 595 P.2d at 589, 156 Cal.Rptr. at 11. 4

When the ALRB finds that an employer has refused to bargain, it can require the employer "to take affirmative action, including ... making employees whole, when the [ALRB] deems such relief appropriate for loss of pay resulting from the employer's refusal to bargain." Cal.Lab.Code Secs. 1160.3. The purpose of such a "make-whole" award is "to remedy [an employer's] unfair labor practice by placing the employees in the economic position they would likely have been in but for that unfair labor practice." Robert H. Hickam, 9 ALRB No. 6 at p. 2 (1983). The ALRB has determined that as used in section 1160.3, "pay" refers "not only to cash wages paid directly to the employee, but also [to] all other benefits, capable of a monetary calculation, which flow to the employee by virtue of the employment relation." Adam Dairy dba Rancho Dos Rios, 4 ALRB No. 24 at p. 6 (1978). Thus, when the ALRB concludes that a "make-whole" remedy is appropriate, it estimates the total value of the compensation package that the employees would have received had their employers bargained in good faith, and then subtracts the total value of the

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compensation package the employees actually received, to determine the amount of the "make-whole" award. Adam Dairy; Robert H. Hickam. The employer is then ordered to make a one-time, lump-sum payment in the amount of the award to the affected employees. 5

While various methods have been used in the past to estimate the total value of the compensation package the employees would have received had their employer bargained in good faith, see, e.g., Adam Dairy, Robert H. Hickam, supra, the method currently used by the ALRB is set out in J.R. Norton Co., 10 ALRB No. 42 (1984). The ALRB first estimates a cash wage rate by examining actual contracts that are deemed comparable to the contract that might have been reached had the employer bargained in good faith. Then, based on these comparable contracts, it determines which fringe benefits might have been included had a contract been reached, and the cash value of these benefits is added to the cash wage rate to determine the total compensation package that would have been reached had the employer bargained in good faith. The value of the total compensation actually paid is then subtracted, to yield the amount of the "make-whole" award. 6

II. JURISDICTION

The district court had subject matter jurisdiction in this action. The Employers are seeking to enjoin the enforcement of various ALRB orders on the grounds they are preempted by Federal law and are unconstitutional. Federal questions are thus presented and jurisdiction exists under 28 U.S.C. Sec. 1331. See Champion International Corp. v. Brown, 731 F.2d 1406, 1407-08 (9th Cir.1984); Shaw v. Delta Air Lines, 463 U.S. 85, 96 n. 14, 103 S.Ct. 2890, 2899 n. 14, 77 L.Ed.2d 490 (1983).

III. ABSTENTION

The ALRB contends that even though the district court may have had jurisdiction to hear the case, it should have abstained from so doing under the doctrine enunciated in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). 7 In analyzing this claim, we begin with the basic proposition that "abstention from the exercise of federal jurisdiction is the exception, not the rule." Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 104 S.Ct. 2321, 2327-28, 81 L.Ed.2d 186 (1984). Under the Younger doctrine, a federal court must abstain whenever there is an ongoing state judicial proceeding, the proceeding concerns vital state interests, and there is an adequate opportunity to present the federal claims in the state proceedings. Id. at 2328; Middlesex Ethics Committee v. Garden State Bar Association, 457 U.S. 423, 432, 102 S.Ct....

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