Sheet Metal Workers' Int'l Assoc. v. Alliance Mech. Corp.

Decision Date07 November 2011
Docket NumberCase No. SACV 09-1163 RNB
CourtU.S. District Court — Central District of California

This is an action to enforce an arbitration award arising under § 301 of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185. On February 5, 2010, the parties consented to this Court's jurisdiction pursuant to 28 U.S.C. § 636(c).

The underlying facts are undisputed. Sheet Metal Workers' International Association, Local Union No. 105 (hereinafter the "Union") and Alliance Mechanical Corporation ("Alliance") were parties for several years to a series of collective bargaining agreements ("CBAs"), the most recent of which expired on June 30, 2009.That agreement (hereinafter the "Expired Agreement") contained an "interest arbitration" clause that required the parties to submit any dispute in negotiations over a successor agreement to binding arbitration. The Union brought the matter to the National Joint Adjustment Board ("NJAB"), which held an arbitration hearing in September of 2009 and issued an award on September 10, 2009 (the "Award").1

The parties' dispute arose out of the following section of the Award: In issuing this order, it is not the intention of the NJAB to impose any non-mandatory subject of bargaining over the objections of the Employer [Alliance]. To the extent that the Employer objects to any provision in the agreement that is determined to be a non-mandatory subject by the National Labor Relations Board or a court, such provision shall be deleted.

The parties agreed that this section of the Award permitted Alliance to exclude from the Agreement provisions that were included in the Expired Agreement, but which constituted non-mandatory subjects. However, they disagreed about which provisions addressed non-mandatory subjects. In accordance with the Court's scheduling conference order, the parties engaged in a process to narrow the issues in dispute. This process culminated in the filing of cross-motions for summary judgment in the form of a Joint Stipulation, in which the parties set forth their respective positions with respect to the provisions from the Expired Agreement that still remained in dispute.

On December 21, 2010, the Court issued its opinion and order ruling on the cross-motions. The Court ruled in the Union's favor with respect to five of the sixremaining provisions in dispute, finding that those provisions were mandatory subjects of bargaining that consequently could not be excluded from the new agreement. The Court ruled in Alliance's favor with respect to one of the six provisions remaining in dispute, which the Court found was a non-mandatory subject of bargaining. On July 27, 2011, the Court entered a Judgment confirming the September 10, 2009 arbitration award of the NJAB and ordering a new binding collective bargaining agreement.

Now pending before the Court and ready for decision is the Union's motion for attorney fees and Alliance's cross-motion for attorney fees.

For the reasons that follow, the Court (a) grants in part and denies in part the Union's motion for attorney fees, and (b) denies Alliance's cross-motion for attorney fees.

I. Federal law governs the award of attorney fees in this case.

LMRA § 301 does not expressly authorize the award of attorney fees. See United Food & Commercial Workers v. Marval Poultry Co., 876 F.2d 346, 350 (4th Cir. 1989). However, Article X, § 6 of the parties' Residential Addenda to Standard Form Union Agreement ("SFUA") executed July 1, 2005 contains an attorney fee provision that states as follows:

In the event of noncompliance within thirty (30) calendar days following the mailing of a decision of a Local Joint Adjustment Board, Panel or the National Joint Adjustment Board, a local party may enforce the award by any means including proceedings in a court of competent jurisdiction in accord with applicable state and federal law. If the party seeking to enforce the award prevails in litigation, such party shall be entitled to its costs and attorneys fees in addition to such other relief as is directed by the courts. Any party that unsuccessfully challenges thevalidity of an award in a legal proceeding shall also be liable for the costs and attorneys fees of the opposing parties in the legal proceedings.

Both parties seek fees pursuant to this CBA provision. The Union urges the application of federal law, while Alliance urges the application of California Civil Code § 1717. Thus, the first question presented is whether federal or state law governs the award of attorney fees in this case.

LMRA § 301 gives federal courts jurisdiction over "[s]uits for violations of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organizations" without regard to the amount in controversy or the citizenship of the parties. See 29 U.S.C. § 185(a). "[T]he preemptive force of § 301 is so powerful as to displace entirely any state cause of action 'for violation of contracts between an employer and a labor organization.'" Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 23-24, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983)); see also Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6, 123 S. Ct. 2058, 156 L. Ed. 2d 1 (2003); Lingle v. Norge Div. of Magic Chef, Inc. 486 U.S. 399, 403-06, 108 S. Ct. 1877, 100 L. Ed. 2d 410 (1988); Caterpillar, Inc. v. Williams, 482 U.S. 386, 388, 392-93, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987). "Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Caterpillar, 482 U.S. at 393.

The Supreme Court has interpreted § 301(a) not only to confer federal jurisdiction over such actions, but also to mandate that federal courts "fashion a body of federal common law to be used to address disputes arising out of labor contracts." See Lingle, 486 U.S. at 403 (citing Textile Workers of America v. Lincoln Mills of Ala., 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957)); Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 209, 105 S. Ct. 1904, 85 L. Ed. 2d 206 (1985). Federal courtsmust apply this federal common law to the exclusion of state law. See Teamsters v. Lucas Flour Co., 369 U.S. 95, 103-04, 82 S. Ct. 571, 7 L. Ed. 2d 593 (1962).

This Court must make "an inquiry into whether the asserted cause of action involves a right conferred upon an employee by virtue of state law, not by a [CBA]. If the right exists solely as a result of the CBA, then the claim is preempted . . . and . . . analysis ends there." See Burnside v. Kiewit Pacific Corp., 491 F.3d 1053, 1059 (9th Cir. 2007). If, however, the right exists independently of the CBA, the Court must determine whether the right is nevertheless "substantially dependent on analysis of a collective-bargaining agreement." See Caterpillar, 482 U.S. at 394 (citation omitted). If such dependence exists, then the claim is preempted by § 301; if not, the claim can proceed under state law. See Burnside, 491 F.3d at 1059-60.

Here, each party traces its asserted right to attorney fees to the CBA provision in the Expired Agreement that entitles a "prevailing party" to such fees. Because each party's asserted right to attorney fees exist solely as a result of the CBA, any determination of the right's scope must be governed by federal law. There is no need to inquire whether enforcement of the right "substantially depends" on interpretation of the CBA. See Burnside, 491 F.3d at 1059.

Also militating in favor of this conclusion is that a primary purpose of the LMRA, national uniformity, would be undermined by the application of various States' laws to attorney fee applications. As the Supreme Court explained in Lucas Flour, 369 U.S. at 103-04:

"The possibility that individual contract terms might have different meanings under state and federal law would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements. Because neither party could be certain of the rights which it had obtained or conceded, the process of negotiating an agreement would be made immeasurably more difficult by the necessity of trying to formulate contract provisions in such a way as to contain the samemeaning under two or more systems of law which might someday be invoked in enforcing the contract. Once the collective bargain was made, the possibility of conflicting substantive interpretation under competing legal systems would tend to stimulate and prolong disputes as to its interpretation. Indeed, the existence of possibly conflicting legal concepts might substantially impede the parties' willingness to agree to contract terms providing for final arbitral or judicial resolution of disputes."

See also Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211, 105 S. Ct. 1904, 85 L. Ed. 2d 206 (1985) (noting that "questions relating to what the parties to a labor agreement agreed, and what legal consequences were intended to flow from breaches of that agreement, must be resolved by reference to uniform federal law"). Since, the entitlement to fees is among the "legal consequences" that the signatories to the CBA agreement here "intended to flow from breaches of that agreement," resolution of the fee issue must be governed by federal law. "Otherwise," for example, "unions successfully litigating arbitration in one state might get attorneys fees on simply prevailing, while in another state [they might] get attorneys fees only when they show 'bad faith.'" Teamsters Local 117 v. Davis Wire Corp., 187 F. Supp. 2d 1279, 1282 (W.D. Wash. 2001).

"Precisely because of this concern with uniformity," the Ninth Circuit has "held that...

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