Araiza v. National Steel and Shipbuilding Co.

• Decision Date: 23 July 1997
• Docket Number: No. Civil 97-0819-B(LSP).,Civil 97-0819-B(LSP).
• Citation: 973 F.Supp. 963
• Court: U.S. District Court — Southern District of California
• Parties: Antonio ARAIZA, Plaintiff, v. NATIONAL STEEL AND SHIPBUILDING CO. and Carl Hinrichson, Defendants.

Page 963

973 F.Supp. 963

Antonio ARAIZA, Plaintiff, v. NATIONAL STEEL AND SHIPBUILDING CO. and Carl Hinrichson, Defendants.

No. Civil 97-0819-B(LSP).

United States District Court, S.D. California.

July 23, 1997.

Dennis Grady, Jeff Geraci, Grady and Associates, San Diego, CA, for Plaintiff.

John Klinedinst, Garrett Gillespie, Klinedinst, Fliehman & McKillop, San Diego, CA, for Defendants.

ORDER DENYING DEFENDANTS' MOTION TO DISMISS

BREWSTER, District Judge.

On June 10, 1997, Defendants filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). Plaintiffs are represented by Dennis Grady and Jeff Geraci of Grady and Associates. Defendants are represented by John Klinedinst and Garrett Gillespie of Klinedinst, Fliehman & McKillop. After careful consideration of the moving and opposing papers, the Court hereby DENIES Defendants' motion to dismiss.

I. Background

Antonio Araiza worked for Defendant National Steel and Shipbuilding Company ("NASSCO") for approximately 22 years before being terminated on July 22, 1997. Araiza was placed on disability by his physician on June 12, 1995 due to medical problems including cirrhosis of the liver and gall stones. Plaintiff's physician released him to return to work in July 1996. Araiza was then examined by a physician of NASSCO's choosing, who cleared him to return to work on August 19, 1996. Araiza reported to NASSCO's human resources department and spoke with Defendant Carl Hinrichson. Plaintiff alleges that Hinrichson accused him of abusing alcohol and then terminated him.

Plaintiff filed a complaint in federal court on May 1, 1997, alleging violations of the Age Discrimination in Employment Act ("ADEA"), the Americans with Disabilities Act ("ADA"), and the California Fair Employment and Housing Act ("FEHA"). Plaintiff indicated that timely charges of discrimination were filed with the Equal Employment Opportunity Commission and the California Department of Fair Employment and Housing, and that he received notifications of the right to sue.

On June 10, 1997, Defendants filed a motion to dismiss for lack of subject matter jurisdiction. As a member of Carpenters Local 1300, Plaintiff was subject to a collective bargaining agreement ("CBA") entered into by NASSCO and Plaintiff's union. Defendants argue that Plaintiff's ADEA, ADA, and FEHA claims are barred by the CBA's mandatory arbitration provision. The agreement states that all grievances, complaints, and disputes must be settled in accordance with the grievance procedure. In the event that an agreement is not reached, either party may refer the matter to arbitration. Defendants do not contend that Plaintiff waived his rights under the ADEA, ADA, or FEHA. Rather, Defendants move to compel Plaintiff to arbitrate his claims in accordance with the grievance and arbitration provisions of his union's CBA. Defendants additionally argue that Plaintiff's FEHA claim is preempted under Section 301 of the Labor Management Relations Act ("LMRA").

II. Discussion

A. Standards for 12(b)(1) Motion to Dismiss

Dismissal is appropriate when the court lacks subject matter jurisdiction over a claim. Fed.R.Civ.P. 12(b)(1). A 12(b)(1) motion to dismiss may attack either the complaint on its face or the existence of subject matter jurisdiction in fact. See Thornhill Publ'g v. General Tel. & Elecs., 594 F.2d 730, 733 (9th Cir.1979). The plaintiff, as the party seeking to invoke the court's jurisdiction, bears the burden of establishing subject matter jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Amer., 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994).

When considering a 12(b)(1) motion to dismiss, the district court "is free to hear evidence regarding jurisdiction and to rule on that issue prior to trial, resolving factual disputes where necessary." Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983). "[N]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Mortensen v. First Federal Sav. and Loan Ass'n, 549 F.2d 884, 891 (3rd Cir.1977).

Defendants properly raise this motion as a 12(b)(1) motion for lack of subject matter jurisdiction. Plaintiff asserts federal question and supplemental jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. The Court lacks diversity jurisdiction; Araiza is a resident of California, and NASSCO's principal place of business is San Diego, California. See 28 U.S.C. § 1332(c)(1). If the CBA bars Plaintiff from pursuing judicial resolution of his statutory claims, Plaintiff's assertion of federal question jurisdiction would be void and the Court would have no basis for jurisdiction.

B. The Federal Arbitration Act

The Federal Arbitration Act ("FAA") is a "congressional declaration of a liberal federal policy favoring arbitration agreements." Moses H. Cone Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983). Section 2 of the FAA declares that a written agreement to arbitrate "in any maritime transaction or a contract evidencing a transaction involving commerce" is valid and enforceable.¹ 9 U.S.C. § 2. "If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court ... shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement...." 9 U.S.C. § 3. In cases decided under the FAA, "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. at 941. Section 1 expressly excludes from the FAA's purview employment contracts of seaman, railroad workers, and any other class of workers engaged in foreign or interstate commerce. 9 U.S.C. § 1. Those who fall within the Section 1 exclusion are not subject to the FAA.

The Supreme Court has yet to interpret the scope of Section 1. See Gilmer v, Interstate/Johnson Lane Corp., 500 U.S. 20, 25, n. 2, 111 S.Ct. 1647, 1651 n. 2, 114 L.Ed.2d 26 (1991) (declining to address the scope of Section 1 because the arbitration clause at issue was not contained in an employment contract). Under a broad interpretation of Section 1, courts have held that all employment contracts are excluded from the FAA. Id. The Tenth Circuit concluded that Section 1 "encompasses collective bargaining agreements, and [] thus held the FAA `is generally inapplicable to labor arbitration.'" Harrison v. Eddy Potash, Inc., 112 F.3d 1437, 1454 (10th Cir.1997) (quoting United Food & Commercial Workers. Local Union No. 7R v. Safeway Stores. Inc., 889 F.2d 940, 944 (10th Cir.1989)). The Ninth Circuit has not decided how to interpret Section 1. See Mago v. Shearson Lehman Hutton. Inc., 956 F.2d 932, 934 (9th Cir.1992) (noting that the FAA's application to employment contracts is unresolved). The "majority of the circuits ... have concluded that the exclusion should be narrowly construed to apply only to workers who ... are involved directly in interstate transportation of goods." Golenia v. Bob Baker Toyota, 915 F.Supp. 201, 203 (S.D.Cal.1996) (citing Dickstein v. duPont, 443 F.2d 783, 785 (1st Cir.1971); Erving v. Virginia Squires Basketball Club, 468 F.2d 1064, 1069 (2nd Cir.1972); Tenney Eng'g. Inc. v. United Elec., Radio & Mach., Workers, 207 F.2d 450, 452 (3rd Cir.1953); Asplundh Tree Expert Co. v. Bates, 71 F.3d 592, 596-602 (6th Cir.1995); Miller Brewing Co. v. Brewery Workers Local No. 9, 739 F.2d 1159, 1162 (7th Cir.1984), cert. denied, 469 U.S. 1160, 105 S.Ct. 912, 83 L.Ed.2d 926 (1985)).

The Court narrowly construes Section 1 of the FAA to exclude only employment contracts of workers directly involved in interstate transportation of goods. Plaintiff's employment as an abrasive blaster does not fall within the exclusion of Section 1. The FAA therefore applies in this case.

C. Arbitration of Statutory Claims

Defendants argue that Plaintiff's ADEA, ADA, and FEHA claims are barred under the CBA provisions setting out grievance and arbitration procedures as the exclusive mechanism for dispute resolution. Defendants cite Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991), arguing that statutory claims may be waived under arbitration agreements. Plaintiff argues that the holding in Gilmer does not apply to collective bargaining agreements. Plaintiff contends that the Supreme Court's decision in Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), controls, and that his statutory claims were not waived under the CBA's mandatory arbitration provisions.

1. The Majority View Reconciling Gardner-Denver and Gilmer

In 1974, the Supreme Court held that union employees do not forfeit their statutory claims, even if they first pursue their grievance to final arbitration under a nondiscrimination clause of a collective bargaining agreement. See Gardner-Denver, 415 U.S. at 49, 94 S.Ct. at 1020. In Gardner-Denver, the plaintiff filed a grievance under his union's collective bargaining agreement claiming that he was wrongfully terminated on the basis of race. The arbitrator ruled that the plaintiff was discharged for cause. Alexander then filed a claim in federal court, alleging violations of Title VII of the Civil Rights Act of 1964. The district court granted the defendant's motion for summary judgment, finding that the plaintiff was bound by the arbitration decision and had no right to sue. The Court of Appeals affirmed, and the plaintiff appealed. The Supreme Court reversed, holding that an individual "does not forfeit his private cause of action if he first pursues his grievance to final arbitration under the nondiscrimination clause of a collective-bargaining agreement." I...