Seafarers Intern. Union of North America v. National Marine Services, Inc.

• Citation: 820 F.2d 148
• Decision Date: 29 June 1987
• Docket Number: No. 86-3321,86-3321
• Parties: 125 L.R.R.M. (BNA) 3069, 1988 A.M.C. 1215, 106 Lab.Cas. P 12,439 SEAFARERS INTERNATIONAL UNION OF NORTH AMERICA, Plaintiff-Appellant, v. NATIONAL MARINE SERVICES, INC., et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 148

820 F.2d 148

125 L.R.R.M. (BNA) 3069, 1988 A.M.C. 1215,

106 Lab.Cas. P 12,439

SEAFARERS INTERNATIONAL UNION OF NORTH AMERICA, Plaintiff-Appellant, v. NATIONAL MARINE SERVICES, INC., et al., Defendants-Appellees.

No. 86-3321.

United States Court of Appeals,

Fifth Circuit.

June 29, 1987.

Louis L. Robein, Jr., William Lurye, Gardner, Robein & Healey, Metairie, La., for plaintiff-appellant.

D. Michael Linihan, McMahon, Berger, Hanna, Linihan, Cody & McCarthy, St. Louis, Mo., Terrence C. Forstall, Courtenay, Grace, Forstall & Hebert, New Orleans, La., for Nat'l Marine.

Harry A. Rosenberg, Phelps, Dunbar, Marks, Claverie & Sims, New Orleans, La., for Compass Marine.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before BROWN, REAVLEY and JOLLY, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

National Marine Services, Inc. ("National Marine") sold off its tugboat operation and laid off its employees the day after the expiration of the collective bargaining agreement between National Marine and Seafarers International Union ("SIU"), which represented the laid off workers. SIU claimed that the sale and layoff was a subterfuge that violated the subcontracting provisions of the expired agreement and sought arbitration under the arbitration clause of the expired agreement.

SIU now appeals from the district court's denial of its motions to compel arbitration and its motion for an injunction prohibiting the sale and layoff. 639 F.Supp. 1283. Because it has been rendered moot, we dismiss SIU's appeal from that part of the district court's order denying injunctive relief. However, since we find that the district court erred by denying SIU's motion to compel arbitration, we reverse its judgment.

I

National Marine is engaged in the barge transportation industry, operating a large

fleet of barges primarily for transporting liquid petroleum products. National Marine formerly operated about eighteen towboats in connection with its barge operations. SIU is an unincorporated labor organization that represents employees of National Marine who were laid off when National Marine sold fourteen of its towboats to the defendant-appellee, Compass Marine Propulsion, Inc. ("Compass"). Compass is also engaged in the barge transportation industry, specializing in the towing business

National Marine and SIU were parties to a collective bargaining agreement which was effective between October 9, 1982, and October 8, 1985. The agreement contained a provision barring National Marine from subcontracting out work except under certain limited circumstances. ¹ The agreement also contained an extremely broad arbitration clause. ²

In 1985, while experiencing financial difficulties, National Marine decided to sell its tugs in order to streamline its operations and raise cash. It contracted with Compass to sell fourteen of its eighteen tugs, effective October 9, 1985, for $5,275,000. At the same time National Marine and Compass also entered into a towage contract whereby Compass agreed to dedicate the tugs to move National Marine's barges. In a letter dated September 26, 1985, National Marine informed SIU of its agreement with Compass and stated that as a result of the transactions all bargaining unit personnel (these workers were represented by the union) would be laid off permanently on October 8, 1985, at the expiration of the collective bargaining agreement. On September 27, 1985, pursuant to a collective bargaining agreement between the parties (also called "the agreement"), the SIU filed grievances challenging the sale of the tugs and the layoff of its members. Its grounds were that the sale of the tugs was a sham and the sale and towage agreement constituted a subcontracting of bargaining unit work in violation of the collective bargaining agreement and that the layoff of its members was a violation of the recognition clause of the collective bargaining agreement. On October 4, 1985, the SIU demanded arbitration of its September 27 grievances pursuant to the binding arbitration provisions of the collective bargaining agreement. National Marine refused to submit to arbitration because, among other reasons, the collective bargaining agreement, by its terms, was effective only from October 9, 1982, through October 8, 1985, and therefore the sale and the layoffs would not occur until after its expiration.

II

On October 7, SIU, the plaintiff-appellant, filed an action against National Marine and Compass under section 301(a) of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. Sec. 185(a). In its complaint, SIU sought:

(1) An order compelling National Marine to submit the SIU's grievances over National Marine's proposed sale to binding arbitration, and

(2) An injunction prohibiting National Marine and the defendant-appellee from effectuating the sale of the tugs and prohibiting National Marine from laying off bargaining unit employees pending arbitration of the SIU's grievances over the proposed sale.

On October 30, and November 7 National Marine and Compass respectively filed their answers to SIU's complaint.

On October 8, the district court held a hearing on SIU's request for a temporary restraining order. The district court denied SIU's request for temporary injunctive relief by order dictated into the record.

On October 30, the district court conducted a trial on SIU's request for a preliminary injunction and the matter was then submitted for disposition.

On March 28, 1986, by minute entry, the district court ordered that SIU's complaint for injunctive relief be dismissed, and on July 18, the district court issued its written opinion denying SIU's complaint for injunctive relief. The district court held that SIU's grievances did not involve contractual rights under the collective bargaining agreement, but rather involved statutory rights under the National Labor Relations Act, Secs. 7 and 8, as amended, 29 U.S.C. Secs. 157, 158. The district court concluded that the proper forum for adjudication of those statutory rights was the National Labor Relations Board, not the federal district court.

III

As a threshold matter, we must first decide whether this appeal should be dismissed on mootness grounds. We note that the actions that SIU had sought to enjoin (the sale of the fourteen tugboats and the accompanying layoff of workers) have already taken place. An appeal from a denial of a motion for preliminary injunction is rendered moot when the act sought to be enjoined has occurred. Marilyn T., Inc. v. Evans, 803 F.2d 1383, 1384 (5th Cir.1986); Thournir v. Buchanan, 710 F.2d 1461, 1463 (10th Cir.1983); In re Cantwell, 639 F.2d 1050, 1054 (3d Cir.1981). The rationale for this rule was explained by the court in the Marilyn T. decision, which held that once the action that the plaintiff sought to have enjoined has occurred, the case is mooted because "no order of this court could affect the parties' rights with respect to the injunction we are called upon to review." 803 F.2d at 1384 (quoting Honig v. Students of the California School for the Blind, 471 U.S. 148, 149, 105 S.Ct. 1820, 1821, 85 L.Ed.2d 114 (1985)). The court went on to explain that the appeal from denial of injunctive relief is mooted even where the court could fashion other relief for the appellant:

Marilyn T. maintains, nevertheless, that its appeal is not moot because it continues to suffer harm from the loss of its license. It argues that this court can fashion effective relief by declaring the suspension and revocation procedures unconstitutional and ordering reinstatement of its license. These concerns are not properly before the court, however. This appeal is from the denial of a preliminary injunction. The sole issue concerning the denial is whether the initial suspension should have been enjoined. Whether the later revocation was proper has not yet been decided by the district court. Nor has the district court decided whether Marilyn T. is entitled to damages for either the suspension or revocation. To grant the relief that Marilyn T. now requests, we would have to decide these issues. Because these issues have yet to be resolved by the district court, they are not before us on appeal.

Marilyn T., 803 F.2d at 1383-84.

Nevertheless, there is an exception to the mootness doctrine. A case that is otherwise moot can be decided if: "(1) the challenged action was in its duration too short to be fully litigated prior to its cessation or expiration, and (2) there was a reasonable expectation that the same complaining party would be subject to the same action again." Weinstein v. Bradford, 423 U.S. 147, 149, 96 S.Ct. 347, 349, 46 L.Ed.2d 350 (1975); Marilyn T., Inc., 803 F.2d at 1384.

Although the first prong of this test has been met in this case because the transaction which SIU sought to enjoin occurred prior to argument of this appeal (SIU did not seek a stay pending appeal) the second prong has not been met. National Marine's sale of virtually the whole of its tugboat fleet to Compass is a one-time occurrence.

Since the action that SIU sought to enjoin has already occurred, and since there is no reasonable expectation that SIU will be subject to the same action again, we dismiss SIU's appeal from the district court's denial of its motion for a preliminary injunction.

This action does not dispose of the whole appeal, however, because SIU also sought from the district court an order compelling National Marine to arbitrate SIU's grievance. And because SIU makes a colorable argument that it was and is entitled to seek some relief through arbitration, we do not believe that SIU's appeal from the denial of its arbitration request is mooted. Accordingly, we will exercise our jurisdiction to review the district court's order insofar as it deals with SIU's motion to compel arbitration.

IV

Turning to the merits of this appeal, we must resolve two related issues: (1) whether a federal court has the power...