Am. President Lines, Ltd. v. Int'l Longshore

• Decision Date: 12 July 2013
• Docket Number: No. 11–36080.,11–36080.
• Citation: 721 F.3d 1147
• Parties: AMERICAN PRESIDENT LINES, LTD., Plaintiff–Appellant, v. INTERNATIONAL LONGSHORE AND WAREHOUSE UNION, ALASKA LONGSHORE DIVISION, UNIT 60, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

721 F.3d 1147

AMERICAN PRESIDENT LINES, LTD., Plaintiff–Appellant,

v.INTERNATIONAL LONGSHORE AND WAREHOUSE UNION, ALASKA LONGSHORE DIVISION, UNIT 60, Defendant–Appellee.

No. 11–36080.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted May 21, 2013.

Filed July 12, 2013.

Philip L. Ross (argued), Littler Mendelson, P.C., San Francisco, CA; Douglas S. Parker, Littler Mendelson, P.C., Anchorage, AL, for Plaintiff–Appellant.

Robert S. Remar (argued), Eleanor I. Morton, and Emily M. Maglio, Leonard Carder, LLP, San Francisco, CA, for Defendant–Appellee.

Appeal from the United States District Court for the District of Alaska, John W. Sedwick, District Judge, Presiding. D.C. No. 3:10–cv–00183–JWS.

Before: A. WALLACE TASHIMA, RICHARD C. TALLMAN, and N. RANDY SMITH, Circuit Judges.

OPINION

TALLMAN, Circuit Judge:

Section 303 of the Labor Management Relations Act ¹ (“LMRA”) provides a judicial forum to pursue damages resulting from certain unfair labor practices ² committed by a union. In rare cases, the union can commit a predicate unfair labor practice through its conduct in an arbitration proceeding. The plaintiff employer's claim requires us to resolve whether Section 303 permits an action challenging the union's conduct at the arbitration when the plaintiff has admittedly failed to challenge the arbitration award itself in court under Section 301 of the LMRA, 29 U.S.C. § 185.

The defendant union maintains that as a matter of policy, the interest in the finality of arbitration proceedings should require plaintiffs in these rare cases to first exhaust a petition to vacate the arbitration award before they can claim Section 303's remedy. But in the face of a statutory right to pursue damages, we cannot place additional obstacles to enforcing that right without congressional authorization. Because nothing in Section 303 precludes this action, even without exhausting a petition to vacate, we reverse the district court's dismissal for lack of statutory standing.

I

A

This case places the courts in the middle of a longstanding dispute between plaintiff American President Lines, Ltd. (“APL”), and the defendant, the International Longshore and Warehouse Union (“the ILWU”), over who may claim certain longshore work handling cargo at the Port of Seward, Alaska.

APL operates ocean-going container ships and marine terminals involved in transporting cargo throughout the world, including in and out of Alaska. The ILWU represents longshore workers in specified Alaskan ports, including the Port of Seward on the Alaskan mainland. APL and one other steamship operator, Horizon Lines, form the multi-employer bargaining group called the Alaska Maritime Employers Association (“AMEA”), which is a signatory to the All Alaska Longshore Agreement (“AALA”). The AALA is a collective bargaining agreement covering dockside activity directed by the employers that applies to all ILWU longshore workers in all covered ports in Alaska.

Under the AALA, APL has traditionally used ILWU-represented longshore workers in Dutch Harbor, APL's deep water port at the tip of the Aleutian Islands and its main Alaskan cargo handling location. Because of their size, APL's deep draft, ocean-going cargo vessels cannot call at small ports in remote areas of Alaska, and APL does not own or operate in Alaska its own tender vessels, such as barges, that can operate in these ports. So APL enters into connecting carrier agreements with local barge operators to bring export product, usually containers of frozen fish, for APL customers from Alaskan mainland ports to the Dutch Harbor terminal.

This dispute was triggered by a separate carrier agreement with a barge company, Samson Tug & Barge, which operates out of Seward. In 2004, APL contracted with Samson to move APL containers between Seward and Dutch Harbor. Under the agreement, APL employed ILWU longshore workers to load empty cargo containers onto Samson barges in Dutch Harbor. When the barges reach Seward the containers are off-loaded onto Seward's public dock. APL's customers then fill the empty containers with their product. Once filled, the containers are loaded back onto Samson's barges, which then transport the product back to Dutch Harbor—where they are off-loaded by ILWU-represented longshore workers and onto APL's container ships.

The crux of the dispute is that Samson employees—who are not ILWU-represented laborers—perform all of the cargo handling of APL containers in Seward. Samson employees are represented by a different union, the Marine Engineers' Beneficial Association (“MEBA”). The ILWU balked at this arrangement and argued that the AALA requires APL to give the Seward work to members of the ILWU.

The ILWU believed that APL had violated Section 7.641 of the AALA (“the Work Preservation Clause”), which provides:

In further consideration of the terms and conditions set forth in this Contract, the Employer hereby assures the Union that it will use its best efforts and act in good faith in preserving as much as possible all of the work covered by this Contract for the registered work force.

It is undisputed that prior to 2003, the ILWU had performed the same longshore work at Seward for a different employer, North Star Stevedore, when North Star was a signatory to the AALA. The parties dispute, though, whether any of the Seward work previously performed for North Star involved APL containers. Compare Appellant's Opening Brief at 13 (“APL first penetrated the Seward market in July 2004.”) with Appellee's Answering Brief at 8 (“Before 2004 ILWU Alaska Longshore Division-represented longshore workers loaded and discharged APL containers at the Port of Seward ... for North Star.”). MEBA has disclaimed any right to this work.

The ILWU brought a grievance against APL for breach of the collective bargaining agreement, claiming that APL failed to preserve the Seward work for members of the ILWU. At the time, however, a new bargaining agreement was being negotiated, and the parties ultimately came to terms. In a Letter of Understanding incorporated in the renegotiated AALA, APL agreed that it “[p]robably will cease doing business in Seward with Samson.”

APL attempted to contract with Horizon Lines, an AMEA member that uses trucks to move cargo from Seward to Anchorage and then transports containers to Dutch Harbor on ships. But Horizon would not agree to take on 100 percent of APL's Seward cargo, so APL continued to use Samson, and its MEBA-represented employees, to handle its Seward customers' containers.

In 2006, the local Seward constituent of the ILWU (“Unit 60”) filed a grievance over APL's refusal to have ILWU-represented workers perform the off-loading and loading of APL containers in Seward. The grievance alleged that the displacement of ILWU longshore workers in Seward violated the AALA.

B

The AALA has a two-step arbitration procedure for resolving grievances. The grievance first goes before an Alaska Arbitrator. Once the Alaska Arbitrator reaches a final decision, and the award has been implemented, the parties can appeal to the Coast Arbitrator in California for a final determination.

In September 2006, the Alaska Arbitrator conducted the initial arbitration based solely on the parties' written submissions. The arbitrator determined that: (1) “[t]he work in dispute was previously performed by APL using a stevedore signatory to the AALA as required by the agreement prior to the work being performed by Samson employees;” and (2) “APL ... conditions and controls the hiring of Samson in violation of the agreement with the ILWU.” The Alaska Arbitrator ordered APL to assign the Seward work to Unit 60. The Alaska Arbitrator also determined, as a matter of labor law, that the union was not violating Section 8(b)(4) of the National Labor Relations Act by demanding the work.

APL appealed the decision to the Coast Arbitrator, who did not initially rule on the merits. The Coast Arbitrator remanded the matter and instructed the Alaska Arbitrator to hold a full evidentiary hearing and to refrain from making any conclusions regarding the legal impact of its decision. The Coast Arbitrator ruled that the initial Alaska Arbitrator decision would remain in effect in the interim. APL never gave the work to the ILWU; instead, it paid “in lieu of” time cards to the ILWU, which essentially pays the union at contract rates for all hours of longshore work performed by Samson employees in Seward.

The Alaska Arbitrator, after a full hearing, then issued a new decision in which he once again required that the ILWU receive APL's Seward longshore work. He found that: (1) “[t]he work that has historically been performed, now has been agreed is longshore work;” and (2) “[l]oading/discharging containers from Samson barges was work previously performed by the ILWU ... through a signatory stevedore, North Star.” The arbitrator stated that APL could give the work to ILWU's Unit 60 in several ways, including: (1) Samson could sign a compliance agreement with the AALA and hire the ILWU directly; (2) APL could have its own stevedore company—which does not currently operate in Alaska—perform the work; or (3) the work could be done using a company that will work with the ILWU in Seward. “Obviously this is an Employer decision,” the Alaska Arbitrator wrote, “but in any event, [ILWU] longshore personnel must perform the work.” The arbitrator ordered APL to give the work to Unit 60, and in the interim pay “in lieu of” time cards for longshore work Samson performed with APL containers.

APL refused to give the work to the ILWU, contending that the arbitrator's interpretation of the Work Preservation Clause rendered it a “hot cargo” agreement ³ prohibited by Section 8(e) of the NLRA.⁴ So APL continued to pay “in lieu of” time cards. It attempted to appeal again to the Coast Arbitrator. The ILWU, though, objected and claimed that the Alaska Arbitrator's decision would not be “implemented”—as required for an appeal—until...