Dist. No. 1 v. Liberty Mar. Corp.

• Decision Date: 09 August 2019
• Docket Number: No. 18-7148,18-7148
• Citation: 933 F.3d 751
• Parties: DISTRICT NO. 1, PACIFIC COAST DISTRICT, MARINE ENGINEERS BENEFICIAL ASSOCIATION, AFL-CIO, Appellee v. LIBERTY MARITIME CORPORATION, Appellant
• Court: U.S. Court of Appeals — District of Columbia Circuit

933 F.3d 751

DISTRICT NO. 1, PACIFIC COAST DISTRICT, MARINE ENGINEERS BENEFICIAL ASSOCIATION, AFL-CIO, Appellee

v.LIBERTY MARITIME CORPORATION, Appellant

No. 18-7148

United States Court of Appeals, District of Columbia Circuit.

Argued May 10, 2019

Decided August 9, 2019

Steffen N. Johnson, Washington, DC, argued the cause for appellant. With him on the briefs were William G. Miossi and Paul N. Harold.

Mark J. Murphy argued the cause and filed the brief for appellee.

Before: Millett, Katsas, and Rao, Circuit Judges.

Rao, Circuit Judge:

Liberty Maritime Corporation (Liberty) is a shipping company that has contracted over the past thirty years with District No. 1, Pacific Coast District, Marine Engineers Beneficial Association, AFL-CIO (MEBA), a labor union representing supervisory employees in the maritime industry. This case arises out of an underlying dispute about whether Liberty was contractually required to hire MEBA employees on a new vessel managed by Liberty. MEBA sued in the United States District Court for the District of Columbia, claiming its contract with Liberty required the parties to submit the dispute to arbitration. The district court ruled in favor of the union, granting judgment on the pleadings under Federal Rule of Civil Procedure 12(c) and compelling arbitration. Liberty timely appealed, arguing that the district court lacked subject matter jurisdiction, or in the alternative, erred in its application of the Rule 12(c) standards.

For the reasons explained below, we agree that the district court had jurisdiction over MEBA’s claim under Section 301 of the Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. §§ 141 et seq ., which provides federal jurisdiction over suits for "violation of contracts between an employer and a labor organization." Id . § 185(a). MEBA raised contractual issues regarding the arbitrability of the dispute and thus its claim clearly falls within the district court’s statutory jurisdiction. Although Liberty alleges that the dispute primarily raised representational issues and thus should be within the exclusive jurisdiction of the National Labor Relations Board (NLRB) under the doctrine of "Garmon preemption," federal courts retain jurisdiction over "hybrid" claims raising both contractual and representational issues.

Dist. No. 1, Pac. Coast Dist., Marine Engineers’ Beneficial Ass’n, AFL-CIO v. Liberty Mar. Corp. , 815 F.3d 834, 840 (D.C. Cir. 2016) ("Liberty Maritime I "); see also William E. Arnold Co. v. Carpenters Dist. Council of Jacksonville & Vicinity , 417 U.S. 12, 18, 94 S.Ct. 2069, 40 L.Ed.2d 620 (1974).

Although jurisdiction here was proper, we reverse and remand because material facts remained in dispute regarding the existence of an applicable arbitration clause, and therefore MEBA was not entitled to judgment on the pleadings under Rule 12(c).

I.

Appellant Liberty is a shipping company that transports commodities, vehicles, equipment, and other cargoes on the seagoing vessels it manages. Liberty’s clients include the U.S. Government, the United Nations, and commercial entities such as automobile manufacturers. Liberty manages vessels transporting bulk cargo—including dry bulk, break bulk, and bagged commodities—and "roll on/roll-off" vessels, like car and truck carriers configured to transport vehicles that drive on and off the vessel. Many of these vessels are enrolled in the U.S. Maritime Security Program, a federal program that subsidizes shipping companies for national security purposes—namely, to ensure a fleet of vessels is available in the event of a war or national emergency. See generally 46 U.S.C. §§ 53101 et seq. App ellee MEBA is a labor organization that represents supervisory employees in the U.S. maritime industry at ports throughout the United States and on oceangoing vessels. On car and truck carrier vessels operated by Liberty and enrolled in the U.S. Maritime Security Program, MEBA represents licensed officers and engineers.

The parties’ relationship began in 1988 when they signed two agreements: the Tanker Vessels Master Agreement and the Dry Cargo Vessels Master Agreement. Although the authenticity of some of the documents attached to the pleadings is disputed, the documents that purport to be current copies of these Master Agreements provide that "[a]ll disputes relating to the interpretation or performance of this Agreement shall be determined in accordance with the provisions of this Section." "[T]his Section" states that grievances will be presented to a licensed personnel board consisting of two persons appointed by the union and two persons appointed by the company; if the licensed personnel board fails to resolve a grievance, an arbitrator will assume jurisdiction over the grievance.

Over the past three decades, the parties have modified their contractual relationship on numerous occasions. At this stage of the proceedings, the record includes only a few of these agreements. Both parties agree, however, they were signatories to a 2012 Memorandum of Understanding (MOU). This MOU identifies numerous prior agreements and states that prior agreements will remain in effect except as expressly modified, but the MOU does not expressly modify any arbitration clause in a manner relevant to this case.

This suit arises out of a dispute between Liberty and MEBA over a ship named the M/V Liberty Peace . On July 24, 2017, Liberty sent MEBA a letter stating its intention to commence managing this foreign flagged car and truck carrier vessel and operate it as a U.S. flagged vessel. In the letter, Liberty claimed the Liberty Peace would not fall under the parties’ collective bargaining agreements and the various contractual modifications of those agreements because the vessel would not be enrolled in the U.S. Maritime Security Program. MEBA disagreed, insisting the existing agreements covered the new vessel. Although the parties met to discuss the matter, they did not resolve their dispute. In the meantime, Liberty began managing the Liberty Peace as the agent of a third party, and that third party entered into labor agreements with a different union.

MEBA sent Liberty a grievance letter on August 31, 2017, asserting Liberty was "in violation of the parties’ collective bargaining agreement by failing to apply the terms and conditions of the parties’ labor contract" to the Liberty Peace . Liberty did not submit MEBA’s grievance to arbitration.

MEBA subsequently filed a "Complaint to Compel Arbitration" in the United States District Court for the District of Columbia. MEBA requested the district court compel Liberty to participate in the arbitration process set forth in the parties’ collective bargaining agreement and grant any other appropriate relief, including attorneys’ fees and costs. MEBA attached as exhibits several documents purporting to be the two original Master Agreements, the MOU, MEBA’s August 31 grievance letter, and some additional correspondence between MEBA and Liberty.

In its answer to MEBA’s complaint, Liberty admitted it had signed the Master Agreements and the MOU. Liberty admitted the authenticity of the MOU, but denied the authenticity of the exhibits MEBA claimed were copies of the Master Agreements. Liberty denied that the MOU incorporated the terms of the Master Agreements and that the arbitration clauses covered the Liberty Peace . Liberty also denied that any labor contract or arbitration agreement with MEBA covered the Liberty Peace . As an affirmative defense, Liberty alleged the district court lacked subject matter jurisdiction because the suit concerned representational rights and therefore was preempted by the jurisdiction of the NLRB under the terms of the National Labor Relations Act (NLRA).

MEBA moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), and the district court granted the motion. The district court found that the Master Agreements stated, "[a]ll disputes relating to the interpretation or performance of this Agreement shall be determined in accordance with the provisions of this Section." Dist. Ct. Op. at 3, 13. The district court concluded that this language created a presumption of arbitrability; Liberty failed to rebut the presumption; and no agreement between the parties excluded this sort of dispute from arbitration. Id . at 13-14. The district court also rejected Liberty’s preemption argument on the grounds that federal courts have jurisdiction over contractual matters and that MEBA’s suit "plainly requires deciding a contractual matter: whether the arbitration clause covers the dispute at issue." Id . at 10-11 n.7.

Liberty timely appealed, challenging the district court’s order on jurisdictional grounds and arguing the district court violated Rule 12(c) by making findings the pleadings did not adequately support.

II.

"The ‘first and fundamental question’ that we are ‘bound to ask and answer’ is whether the court has jurisdiction to decide the case." Bancoult v. McNamara , 445 F.3d 427, 432 (D.C. Cir. 2006) (quoting Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ). The district court held that federal courts have jurisdiction over contractual matters under Section 301 of the LMRA, which provides:

Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, ... may be brought in any district court of the United States having jurisdiction of the parties ....

29 U.S.C. § 185(a). Section 301 confers federal court jurisdiction over suits for breach of collective bargaining agreements, which are contractual. "Congress deliberately chose to leave the enforcement of collective agreements to the usual processes of the law." Charles Dowd Box Co. v. Courtney , 368 U.S. 502, 513, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962).

Nevertheless, Liberty argues the district court lacked subject matter jurisdiction over this case under the judicially...