Nat'l Labor Relations Bd. v. Fresh & Easy Neighborhood Mkt., Inc.

Decision Date13 November 2015
Docket NumberNo. 12–55828.,12–55828.
Citation805 F.3d 1155
PartiesNATIONAL LABOR RELATIONS BOARD, On Relation of the United Food and Commercial Workers International Union, Petitioner–Appellee, United Food and Commercial Workers International Union, Intervenor–Plaintiff–Appellee, v. FRESH AND EASY NEIGHBORHOOD MARKET, INC., Respondent–Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Stuart Newman (argued), Seyfarth Shaw LLP, Atlanta, GA; Joshua L. Ditelberg, Seyfarth Shaw LLP, Chicago, IL, for RespondentAppellant.

David A. Rosenfeld (argued) and Sean D. Graham, Weinberg, Roger & Rosenfeld, Alameda, CA, for PetitionerAppellee.

Appeal from the United States District Court for the Central District of California, Consuelo B. Marshall, Senior District Judge, Presiding. D.C. No. 2:11–cv–10070–CBM–FMO.

Before: HARRY PREGERSON, MICHAEL R. MURPHY* , and MARSHA S. BERZON, Circuit Judges.

OPINION

BERZON, Circuit Judge:

PetitionerAppellee United Food and Commercial Workers Union (the Union) asks this court to enforce a subpoena duces tecum it served on RespondentAppellant Fresh & Easy Neighborhood Market, Inc. (Fresh & Easy) in advance of a hearing before the National Labor Relations Board (the “NLRB” or “Board”). The Board issued the subpoena at the Union's request in connection with charges that Fresh & Easy engaged in unfair labor practices by stifling union activity.

Fresh & Easy did not contest the validity of the subpoena by requesting within five days of service that the Board revoke the subpoena, as required by the National Labor Relations Act (the NLRA or the Act) and its corresponding Board regulations. See 29 U.S.C. § 161 ; 29 C.F.R. § 102.31(b). Fresh & Easy contends that it missed the filing deadline because the Union did not serve Fresh & Easy's counsel of record with a copy of the subpoena; only the party was served.

The district court held the subpoena properly served and ordered Fresh & Easy to comply with the Union's requests. Fresh & Easy timely appealed. We disagree with the district court's conclusion but affirm the order to comply with the subpoena on different grounds.

I.

As of January 2012, Fresh & Easy operated a chain of approximately 170 grocery stores, with locations in California, Nevada, and Arizona. Beginning in December 2010, Fresh & Easy posted signs near the entrances of at least four of its California stores reading, “Sorry but we don't allow solicitation, loitering or the posting of flyers.”

In January 2011, the Union filed an unfair labor practices charge with the Board. The charge alleged that the maintenance of the signs constituted a violation of the NLRA, see 29 U.S.C. § 158(a)(1), by interfering with, restraining, or coercing employees in the exercise of their rights protected under the Act.1 Pursuant to that charge, the General Counsel of the NLRB filed a complaint against Fresh & Easy before the Board. Fresh & Easy answered the complaint, denying that it had violated the Act. A hearing before an Administrative Law Judge (“ALJ”) was held on July 19, 2011.

In preparation for the hearing, the Union sought and the Board provided a blank subpoena duces tecum. On July 8, the Union served the completed subpoena duces tecum on Hugh Cousins and/or the Custodian of Records of Fresh & Easy Neighborhood Market” by courier at Fresh & Easy's principal place of business. As pertinent here, the subpoena sought [a]ll documents which concern, mention, or relate to any union organizing or union activities” and [a]ll documents maintained on any company hotline or similar message system which concern [sic] mention, relate or refer to union activity.”2 Any petition to revoke the subpoena was due in writing within five days of service. 29 C.F.R. § 102.31(b).

The Union never served the subpoena on Fresh & Easy's counsel of record. But prior to the hearing, Fresh & Easy sent a copy of the subpoena to its counsel by email. It is not clear from the record exactly when counsel received the client email, but Fresh & Easy never suggested, and has not established, that it was after the deadline to file a petition to revoke. Fresh & Easy's counsel simply overlooked the email “until the evening of July 18, 2011, the night before the hearing at which production of the subpoenaed documents would have been required.”

At the hearing, Fresh & Easy did not produce documents responsive to the subpoena. Instead, it argued that the subpoena was invalid because it had not been served on Fresh & Easy's counsel and because it sought evidence outside the scope of the General Counsel's complaint. The ALJ declined to entertain Fresh & Easy's arguments in absence of a petition to revoke, and left the record open following the hearing to permit the Union to decide whether to seek enforcement of the subpoena. Thereafter, the Union requested that the NLRB, through its General Counsel, initiate enforcement proceedings. See 29 C.F.R. § 102.31(d).

Fresh & Easy subsequently filed a motion to close the record before the ALJ, arguing that because the General Counsel had already rested its case, supplementation of the record was unnecessary. The ALJ denied Fresh & Easy's motion, holding that [u]ntil the subpoena enforcement proceedings are concluded, this record will remain open and the matter postponed indefinitely.” The ALJ again declined to address Fresh & Easy's argument that the subpoena was invalid.

Fresh & Easy then filed a motion with the NLRB seeking special permission to appeal from the ALJ's ruling, maintaining that because the Union did not serve the subpoena on counsel, Fresh & Easy had no obligation to petition to revoke it. Fresh & Easy also argued that even if a petition to revoke was called for, the ALJ should still have considered the present relevance and burden of the subpoena, particularly given that the General Counsel had already rested its case, to determine whether enforcement of the subpoena would be “inconsistent with law and with the policies of the act.” 29 C.F.R. § 102.31(d).

The Board granted the request for special permission to appeal the ALJ's ruling but denied the appeal on the merits. After ruling that Fresh & Easy “failed to establish or even allege that it suffered any prejudice from the charging Party's failure to serve the subpoena on the Respondent's counsel,” the Board determined that proceedings to enforce the subpoena were appropriate despite the General Counsel's having rested its case. In support of that conclusion, the Board determined that “General Counsel's right to control the theory of the case does not preclude the Charging Party from introducing evidence at the hearing once it receives documents in response to its subpoena.” Finally, the Board noted that Fresh & Easy never filed a petition to revoke the subpoena, and that such a petition “would have been the appropriate vehicle for raising any issue regarding its validity.” The Board therefore declined to rule on the substantive validity of the subpoena.

Shortly thereafter, pursuant to 29 U.S.C. § 161(2), the Board filed an application on behalf of the Union to enforce the subpoena in the United States District Court for the Central District of California. The Union intervened and took responsibility for the application. Fresh & Easy opposed enforcement on the grounds that the subpoena was improperly served and sought information that was irrelevant, overly broad, and unduly burdensome.3

The district court granted the application to enforce the subpoena. It held that the subpoena was properly served, because the governing statutes and regulations do not require a private party to serve papers upon a party's attorney. On the merits, the district court found that the requests were relevant to the proceeding and not overly broad nor unduly burdensome.

II.

We review de novo a district court's decision regarding enforcement of an agency subpoena.” N.L.R.B. v. N. Bay Plumbing, Inc., 102 F.3d 1005, 1007 (9th Cir.1996) ; E.E.O.C. v. Fed. Exp. Corp., 558 F.3d 842, 846 (9th Cir.2009). In deference to the Board's interest and expertise in managing the cases before it, we generally will not entertain a challenge to a subpoena that was not first brought before the Board. See E.E.O.C. v. Cuzzens of Ga., Inc., 608 F.2d 1062, 1063 (5th Cir.1979) (“Generally, one who has neglected the exhaustion of available administrative remedies may not seek judicial relief.”); E.E.O.C. v. Hennepin Cnty., 623 F.Supp. 29, 31–32 (D.Minn.1985) (“A party's failure to attempt [the] administrative appeal procedure prevents the party from challenging the subpoena, except on constitutional grounds.”).

Because we determine that exhaustion was required and that Fresh & Easy suffered no prejudice that would excuse it from that requirement, we affirm the decision to enforce the subpoena.

III.
A. Service on Counsel

In neglecting to serve the subpoena on Fresh & Easy's counsel of record, the Union failed to meet its procedural obligations. Section 102.113 of the Code, entitled “Methods of service of process and papers by the Agency; proof of service,” provides that [w]henever these rules require or permit the service of pleadings or other papers upon a party, a copy shall also be served on any attorney or other representative of the party who has entered a written appearance in the proceedings on behalf of the party.” 29 C.F.R. § 102.113(f) (emphasis added).

The Union argues that section 102.113 does not apply to private parties, as the heading indicates that it governs service “by the Agency.” Because a representative of the Union served the subpoena, the Union argues, section 102.114 governs.

The heading to section 102.114 reads: “Filing and service of papers by parties; form of papers; manner and proof of filing or service; electronic filings.” (Emphasis added). In contrast to the preceding section, section 102.114 does not explicitly require service on counsel. The Union therefore concludes that it had no obligation to serve a subpoena on Fresh & Easy's cou...

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