Teamsters Local Union No. 760 v. United Parcel Service, Inc.
| Decision Date | 12 December 1990 |
| Docket Number | No. 89-35769,89-35769 |
| Citation | 921 F.2d 218 |
| Parties | 136 L.R.R.M. (BNA) 2114, 117 Lab.Cas. P 10,474, 18 Fed.R.Serv.3d 1122 TEAMSTERS LOCAL UNION NO. 760, Plaintiff-Appellant, v. UNITED PARCEL SERVICE, INC., an Ohio corporation, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Bruce E. Heller, Davies, Roberts & Reid, Seattle, Wash., for plaintiff-appellant.
Bruce D. Corker and David T. Pimentel, Perkins Coie, Seattle, Wash., for defendant-appellee.
Appeal from the United States District Court for the Western District of Washington.
Before WRIGHT, BEEZER and TROTT, Circuit Judges.
Teamsters Local No. 760 ("Teamsters") appeals from the district court's order awarding sanctions under Fed.R.Civ.P. 11 to United Parcel Service, Inc. ("UPS"). We affirm.
In August of 1989, an arbitrator determined that UPS discharged an employee in violation of a collective bargaining agreement. He ordered UPS to reinstate the employee with full back pay and benefits. He retained jurisdiction over the matter for 60 days to resolve computational issues. After the arbitrator's jurisdiction expired, UPS issued a check to the employee for back pay.
Teamsters believed that UPS failed to comply with the arbitrator's back pay award because UPS did not compensate the employee for overtime that the employee would have earned had he not been discharged. UPS disagreed. The parties submitted their dispute to the arbitrator. Their Agreement for Arbitration stated in part:
By agreeing to submit the two issues to arbitration, the parties agree that the Arbitrator has jurisdiction to determine the issues submitted. The parties also agree as follows:
(1) To submit the following two issues to arbitrator Lehleitner for final and binding arbitration:
(a) By not raising an issue concerning computation of back pay within the 60-day period during which the arbitrator retained jurisdiction for the limited purpose of resolving any computational issues arising out of the relief granted, has the Union waived objections to the Company's back pay computation?
(b) If not, does the arbitrator's award require inclusion of overtime in the computation of back pay?
(Emphasis added.)
The arbitrator determined that He noted: He concluded, however, that "this argument may or may not be correct, but it has nothing to do with the ability of either party to bring clarification issues directly to the arbitrator."
When the arbitrator declined to clarify his previous decision, Teamsters brought suit under 29 U.S.C. Sec. 185 to enforce the arbitrator's original decision. The district court granted UPS's motion to dismiss under Fed.R.Civ.P. 12(b)(6), and awarded sanctions constituting costs and attorneys' fees totaling $6,595.15. The union appeals only the district court's decision to award sanctions.
The Supreme Court recently held that an abuse of discretion standard applies "in reviewing all aspects of a district court's Rule 11 determination." Cooter & Gell v. Hartmarx Corp., --- U.S. ----, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359 (1990) (); see also United States v. Stringfellow, 911 F.2d 225, 226 (9th Cir.1990) (per curiam) (). The Court elaborated that "[a] district court would necessarily abuse its discretion if it based its rule on an erroneous view of the law or on a clearly erroneous assessment of the evidence." Cooter & Gell, 110 S.Ct. at 2461.
We must first determine whether the district court abused its discretion by basing its Rule 11 determination on "an erroneous view of the law." Cooter & Gell, 110 S.Ct. at 2461. If the district court employed a proper view of the law, we must then determine whether it abused its discretion in holding that the facts alleged in the union's complaint diverge so far from existing law that the union's claim amounts to a Rule 11 violation. The facts and the sanction amount are not in dispute.
Our review here is severely hampered by the fact that the district court's order awarding sanctions did not discuss the relevant substantive law. When a district court fails to set out the controlling substantive law in a Rule 11 case, we can only infer its view of the law from its decision awarding sanctions. While we do not know exactly what this district court considered the state of the law to be, we do know that it thought that the pertinent law was very different from the plaintiff's claim. District courts should clearly set forth their view of the substantive law at issue so we can provide a meaningful de novo review of the controlling law before reviewing the application of that law for abuse of discretion, as directed by Cooter & Gell. See 110 S.Ct. at 2460-2461.
Before we can determine whether the district court abused its discretion in awarding sanctions, we must determine what law governed the dispute between UPS and Teamsters. UPS contends that Teamsters had no right to a second bite at the apple after the arbitrator decided that the union had waived its right to have him determine if the back pay award should have included overtime pay. The company points out that issues submitted to arbitration cannot be relitigated in federal court. Stead Motors v. Automotive Machinists Lodge No. 1173, 886 F.2d 1200, 1209 (9th Cir.1989) (en banc), cert. denied, --- U.S. ----, 110 S.Ct. 2205, 109 L.Ed.2d 531 (1990). We agree.
Having determined the relevant substantive law, we must next examine whether the union's argument to extend the law violates Rule 11. In Zaldivar v. City of Los Angeles, 780 F.2d 823, 830-831 (9th Cir.1986), we explained that Rule 11...
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...a lack of lucidity, while disfavored, will not automatically require reversal of sanctions. Cf. Teamsters Local Union No. 760 v. United Parcel Serv., Inc., 921 F.2d 218 (9th Cir.1990) (affirming imposition of sanctions, even where appellate review was "severely hampered by the fact that the......
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