Domino Sugar Corp. v. Sugar Workers Local Union 392 of United Food and Commercial Workers Intern. Union
| Decision Date | 30 November 1993 |
| Docket Number | No. 93-1449,93-1449 |
| Citation | 10 F.3d 1064 |
| Parties | 144 L.R.R.M. (BNA) 2817 DOMINO SUGAR CORPORATION, Plaintiff-Appellant, v. SUGAR WORKERS LOCAL UNION 392 OF the UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, an Unincorporated Association, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Jeffrey Peabody Ayres, Venable, Baetjer & Howard, Baltimore, MD, argued (Valerie Floyd Portner, on brief), for plaintiff-appellant.
Richard David Zeff, Pfeifer, Fabian & Zeff, P.A., Baltimore, MD (Julie T. Sweeney, on brief), for defendant-appellee.
Before POWELL, Associate Justice (Retired), United States Supreme Court, sitting by designation, and WILKINSON and HAMILTON, Circuit Judges.
Domino Sugar Corporation (the Company) appeals the district court's Fed.R.Civ.P. 12(b)(6) dismissal, without prejudice, of its complaint alleging that Sugar Workers Local Union (the Union) breached the no-strike provision in their Collective Bargaining Agreement (CBA). The district court granted the Union's Rule 12(b)(6) motion on the basis that the CBA required the Company to submit its dispute to arbitration before seeking judicial review. Finding no error, we affirm.
Because this appeal involves the interpretation of the CBA between the Company and the Union, it is helpful to begin with a discussion of the relevant provisions within that agreement. Article V of the CBA, entitled "Strikes, Stoppages, and Lockouts," discusses the consequences of an employee strike or work stoppage. Specifically, paragraph 5.1 provides:
It is the intent of the parties to this Agreement that the procedures herein shall serve as a means for peaceful settlement of all disputes that may arise between them, and between the Company and its employees.
(J.A. 19). Paragraph 5.2 requires the Union to employ "reasonable efforts to avoid and end [a] strike...." (J.A. 20). Paragraph 5.4 provides:
An employee who ... participates in a strike ... during the term of this Agreement will be subject to discharge, or other disciplinary action by the Company. If requested by the Union, such disciplinary action will be processed as a grievance according to the grievance procedure set forth in this Agreement.
The grievances provision within the CBA (Article XV) provides:
p 15.1 When a difference or complaint arises between the Company and the Union, or any employee or employees, there shall be no suspension of work on account of such dispute.... An earnest effort shall be made to settle immediately a difference or complaint by the following successive steps:
(a) by conference between the aggrieved employee and the foreman....
(b) by conference between the Union Grievance Committee ... and the Refinery Employee Relations Manager....
(c) by conference between representatives of the [Union] on the one hand, and representatives of the Company on the other hand....
p 15.2 The Company shall give its decision on a grievance at the earliest possible moment, and in no event later than the following periods of time:
Step (a)--Twenty-four hours
Step (b)--Three days
Step (c)--Five days
p 15.3 The Company's answer at Step (b) and (c) shall be in writing.
If the grievance process does not adequately resolve the dispute, the CBA also provides for binding arbitration. Specifically, Article XVI, states:
p 16.1 If the dispute shall not have been satisfactorily settled, the Union may demand arbitration as follows:
(a) If the grievance shall have not been satisfactorily settled the Union may demand arbitration by notifying the Company in writing....
(b) If the Union demands arbitration as provided above the arbitrator shall be selected in accordance with the rules of the American Arbitration Association....
(J.A. 29). Notably, the CBA did not specifically indicate that the Company could request a grievance conference or arbitration. However, nothing in the CBA precluded the Company from pursuing these procedures.
On January 26, 1993, the employees of the Company conducted a work stoppage at the Company's Baltimore sugar refinery. Believing that the Union did not satisfy its obligation to use "reasonable efforts to avoid or end such ... stoppage," (J.A. 20), the Company, on the same day, filed suit against the Union in the United States District Court for the District of Maryland. Without first filing an answer, the Union filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6). In its motion, the Union asserted that the Company failed to state a claim because it failed to exhaust the grievance and arbitration procedures within the CBA before filing suit.
Without allowing extrinsic evidence to establish whether the parties intended the grievance and arbitration procedures within the CBA to apply to the Company's complaints, the district court granted the Union's motion and dismissed the Company's complaint without prejudice. The district court reasoned that, without an express limitation on the scope of arbitratable disputes, the presumption in favor of arbitrability requires even the Company to pursue arbitration before seeking traditional judicial relief. (J.A. 12-13).
The Company now appeals the Rule 12(b)(6) dismissal of its complaint without prejudice.
As a preliminary attack on the Company's appeal, the Union argues that the district court's order requiring the Company to submit its grievances to arbitration is non-final and, therefore, not subject to appellate review.
The Union first contends that we lack appellate jurisdiction because the district court dismissed the Company's complaint without prejudice. Because such an order does not preclude the losing party from filing a new complaint, the Union concludes that the order cannot be considered a "final order" within the meaning of 28 U.S.C. Sec. 1291. Thus, the Union believes we must dismiss the Company's appeal as interlocutory. We disagree.
The courts are apparently divided on whether an order which dismisses a complaint without prejudice qualifies as final and subject to appeal. Some courts hold that such orders are appealable as a matter of right. See, e.g., Davis Forestry Corp. v. Smith, 707 F.2d 1325 (11th Cir.1983); Elfenbein v. Gulf and Western Industries, Inc., 590 F.2d 445 (2d Cir.1978). These courts reason that such a dismissal terminates the action, thereby entitling the losing party to appeal.
Other courts reject this view, holding that "[a]n order which dismisses a complaint without expressly dismissing the action is [generally] not ... an appealable order." Ruby v. Secretary of the United States Navy, 365 F.2d 385, 387 (9th Cir.1966). See also, Borelli v. City of Reading, 532 F.2d 950, 951 (3d Cir.1976); Azar v. Conley, 480 F.2d 220, 223 (6th Cir.1973). The courts adopting this rule reason that "the plaintiff may be able to amend his complaint to cure whatever deficiencies had caused it to be dismissed." Coniston Corp. v. Village of Hoffman Estates, 844 F.2d 461, 463 (7th Cir.1988). However, under this approach, if "the grounds of the dismissal make clear that no amendment could cure the defects in the plaintiff's case, the order dismissing the complaint is final in fact and [appellate jurisdiction exists]." Id.
We find the latter view more persuasive. Under this approach, an appellate court may evaluate the particular grounds for dismissal in each case to determine whether the plaintiff could save his action by merely amending his complaint. When such action would permit the plaintiff to continue the litigation in the district court, we believe the plaintiff should not be allowed to appeal the dismissal without prejudice. Such a rule better serves judicial economy than one providing an appeal of right. Thus we hold that a plaintiff may not appeal the dismissal of his complaint without prejudice unless the grounds for dismissal clearly indicate that "no amendment [in the complaint] could cure the defects in the plaintiff's case." Id.
Applying this rule to the present case reveals that the district court's order nonetheless qualifies as a final order subject to appeal. Specifically, the district court's order dismissed the Company's complaint "on account of [the Company's] failure to exhaust contractual remedies." (J.A. 13). The clear import of this order required the Company to pursue remedies within the CBA before filing suit in court. In other words, the district court essentially made a final ruling that the Company had to proceed to arbitration before seeking judicial relief. Thus, "the grounds of the dismissal ma[de] clear that no amendment could cure the defects in [the Company's] case." Coniston Corp., 844 F.2d at 463. Accordingly, the mere fact that the district court dismissed the Company's complaint without prejudice does not render the order interlocutory and not subject to appeal.
Alternatively, the Union argues that orders requiring parties to submit their disputes over collective bargaining agreements to arbitration are interlocutory and, therefore, not subject to appeal. In support, the Union relies on Stedor Enterprises, LTD. v. Armtex, Inc., 947 F.2d 727, 728 (4th Cir.1991), where we recognized that the Federal Arbitration Act (FAA), 9 U.S.C. Sec. 1 et seq., reflects "a strong congressional policy against appeals which delay the onset of arbitration." By analogy, the Union asserts that this policy should also apply in the context of collective bargaining agreements.
Under the FAA, 9 U.S.C. Sec. 16(b)(2), "an appeal may not be taken from an interlocutory order directing arbitration to proceed under section 4 of this title." In Stedor Enterprises, LTD., 947 F.2d at 730, we described Congressional intent behind this provision:
Congress sought to prevent parties from frustrating arbitration through lengthy preliminary appeals by providing that, "if the district court determine[s] that arbitration is called for, the court system's interference with the arbitral process will terminate...
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