Unite Here Local 30 v. Sycuan Band of the Kumeyaay Nation

• Decision Date: 20 May 2022
• Docket Number: 21-55017
• Citation: 35 F.4th 695
• Parties: UNITE HERE LOCAL 30, Plaintiff-Appellee, v. SYCUAN BAND OF THE KUMEYAAY NATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

35 F.4th 695

UNITE HERE LOCAL 30, Plaintiff-Appellee,

v.SYCUAN BAND OF THE KUMEYAAY NATION, Defendant-Appellant.

No. 21-55017

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 10, 2022 Pasadena, California

Filed May 20, 2022

Steven G. Biddle (argued), Van Allyn Goodwin, and Warsame Y. Hassan, Littler Mendelson P.C., San Diego, California, for Defendant-Appellant.

Kristin L. Martin (argued), McCracken Stemerman & Holsberry LLP, San Francisco, California, for Plaintiff-Appellee.

Rob Bonta, Attorney General; Sara J. Drake, Senior Assistant Attorney General; William P. Torngren, Supervising Deputy Attorney General; Paras Hrishikesh Midha, Deputy Attorney General; Office of the Attorney General, Sacramento, California; for Amicus Curiae State of California.

Before: A. WALLACE TASHIMA, MILAN D. SMITH, JR., and PAUL J. WATFORD, Circuit Judges.

M. SMITH, Circuit Judge:

Appellant the Sycuan Band of the Kumeyaay Nation (Sycuan or Tribe), a federally recognized Indian tribe, seeks the reversal of the district court's order granting labor union, Unite Here Local 30's (Unite Here), motion for judgment on the pleadings with respect to its own complaint and motion to dismiss Sycuan's counterclaim for declaratory relief. Unite Here alleges that Sycuan violated the labor provisions of a contract between the two parties respecting the operation of a casino. The union brought suit to compel arbitration of that dispute pursuant to an arbitration clause contained in the contract. Sycuan opposes arbitration principally because the Tribe believes that federal labor law preempts its contract with the State of California that had required Sycuan to enter into the contract with Unite Here. In a counterclaim, Sycuan seeks a declaratory judgment that federal law preempts the labor organizing provisions of the agreement with California. We affirm the district court.

BACKGROUND

The Sycuan Casino Resort is located on the Tribe's reservation, and revenue from the operation of the casino provides funding for tribal governmental services and programs for the benefit of the Tribe. Under the rules of the federal Indian Gaming Regulatory Act (IGRA), tribes can only operate high-stakes casino games (known as Class III games) if they sign a gaming compact with the surrounding state, and that compact is approved by the Secretary of the Interior. 25 U.S.C. § 2710(d)(1), (3)(B). Tribal-state compacts may address "subjects that are directly related to the operation of gaming activities," 25 U.S.C. § 2710(d)(3)(C)(vii), including labor relations. Coyote Valley Band of Pomo Indians v. California (In re Indian Gaming Related Cases) , 331 F.3d 1094, 1115–16 (9th Cir. 2003).

The State of California and Sycuan entered into a compact in 2015 (Compact). Part of the Compact specified that Sycuan must adopt and maintain a Tribal Labor Relations Ordinance (TLRO), which was included in an appendix as a material part of the Compact. The TLRO sets forth the parties' agreement about specific labor rights for casino employees and allows labor unions to organize those employees. The TLRO also established procedures for organizing employees into unions. Section 13 of the TLRO provides for arbitration as the dispute resolution procedure for all issues arising under the TLRO. In Section 13(e), Sycuan waived its sovereign immunity against suits brought in state or federal court seeking to compel arbitration.

Section 7 of the TLRO is at issue in this appeal. In that section, Sycuan agreed "that if a union first offers in writing that it and its local affiliates will comply with [certain provisions of the TLRO] the Tribe shall comply with [other provisions]." Included in those provisions is a promise to "resolve all issues, including collective bargaining impasses, through the binding dispute resolution mechanisms set forth in Section 13." The TLRO further provides that a union making these promises "shall be deemed an offer to accept the entirety of this Ordinance as a bilateral contract between the Tribe and the union, and the Tribe agrees to accept such offer."

In November 2019, Unite Here made such an offer in a letter to Sycuan's top elected officer indicating the union's intention to organize Sycuan's casino employees. Unite Here then made demands of Sycuan in keeping with the terms of the TLRO, but arguably in excess of the rights and obligations provided for in the National Labor Relations Act (NLRA). Sycuan refused Unite Here's demands. Unite Here sought to begin arbitration proceedings against Sycuan regarding these alleged TLRO violations, but Sycuan informed the American Arbitration Association that it would not participate in the arbitration. Sycuan stated that it believed that portions of the TLRO, including the arbitration provision and delegation clause, were not valid because the agreement is preempted by the NLRA.

Unite Here filed a complaint in the United States District Court for the Southern District of California alleging that Sycuan violated the Compact's TLRO and asking the court to compel arbitration in accordance with the TLRO's dispute resolution provisions. Unite Here first contended that pursuant to TLRO Section 7, Sycuan entered into a contract with them when Sycuan received Unite Here's offer letter. Unite Here alleged that Sycuan breached their contract by: (1) not giving Unite Here a list of employees' names and contact information, (2) telling employees that it opposes their unionizing, (3) not allowing Unite Here's representative to enter the casino, and (4) not facilitating the dissemination of information from Unite Here to employees. Sycuan filed an answer asserting: (a) the NLRA preempts the TLRO, (b) there is no binding bilateral agreement between Unite Here and Sycuan, (c) parts of the TLRO are unenforceable because the terms are not sufficiently definite, and (d) Sycuan did not waive its sovereign immunity with respect to Unite Here or NLRA preemption. Sycuan also filed a counterclaim for declaratory relief claiming that: (1) the NLRA preempts portions of the TLRO, so the dispute between Sycuan and Unite Here is not arbitrable; and (2) Sycuan may still assert its sovereign immunity.

Unite Here filed a motion to dismiss the counterclaim asking the court to decline supplemental jurisdiction over the counterclaim for prudential reasons and a motion for judgment on the pleadings to compel Sycuan to participate in arbitration. Sycuan opposed both motions arguing, among other things, that: (1) Sycuan and Unite Here did not mutually and voluntarily enter into an agreement to arbitrate the dispute at issue; (2) the contract between Sycuan and Unite Here is unenforceable because it lacks sufficiently definite terms and constitutes an "agreement to agree;" and (3) Sycuan did not waive its sovereign immunity to suit with respect to Unite Here or the claims alleged.

The district court granted Unite Here's motion for judgment on the pleadings and dismissed Sycuan's counterclaim. The district court also concluded that there is a bilateral contract between Sycuan and Unite Here in which both agreed to comply with the arbitration provision of the TLRO, and that the remaining disputes must be decided by the arbitrator.

ANALYSIS

I. Standard of Review

A district court must grant a motion for judgment on the pleadings when there is no issue of material fact, and the moving party is entitled to judgment as a matter of law. Fleming v. Pickard , 581 F.3d 922, 925 (9th Cir. 2009). "All allegations of fact by the party opposing the motion are accepted as true, and are construed in the light most favorable to that party." Gen. Conf. Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church , 887 F.2d 228, 230 (9th Cir. 1989). We review the granting of such a motion de novo. Lyon v. Chase Bank USA, N.A. , 656 F.3d 877, 883 (9th Cir. 2011). We also review an order compelling arbitration de novo.

SEIU Loc. 121RN v. Los Robles Reg'l Med. Ctr. , 976 F.3d 849, 852 (9th Cir. 2020). Disputes about contract formation are a question of law, unless the parties contest material facts. United States v. Mujahid , 799 F.3d 1228, 1237–38 (9th Cir. 2015). We review for abuse of discretion a district court's decision to exercise or not exercise supplemental jurisdiction. Carlsbad Tech., Inc. v. HIF Bio, Inc. , 556 U.S. 635, 639, 129 S.Ct. 1862, 173 L.Ed.2d 843 (2009).

II. Jurisdiction

We have appellate jurisdiction pursuant to 28 U.S.C. § 1291. The district court had original jurisdiction over Unite Here's claims pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 185.

The district court correctly concluded that it had supplemental, but not original, jurisdiction over Sycuan's counterclaim, and did not abuse its discretion in declining to exercise that jurisdiction. District courts have supplemental jurisdiction over "claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy." 28 U.S.C. § 1367(a). In its counterclaim, Sycuan seeks a declaratory judgment that the NLRA preempts inconsistent portions of the TLRO. The legal and factual issues in Unite Here's claims and Sycuan's counterclaim are sufficiently similar that the district court did have supplemental jurisdiction because they form a part of the same case or controversy concerning the meaning and effect of the TLRO.

Sycuan argues, however, that the district court abused its discretion in declining to exercise supplemental jurisdiction over Sycuan's counterclaim. Courts can decline to exercise supplemental jurisdiction for compelling reasons, 28 U.S.C. § 1367(c)(4), in line with the principles of economy, convenience, fairness, and comity. See Arroyo v. Rosas , 19 F.4th 1202, 1205 (9th Cir. 2021). The district court in this case declined supplemental jurisdiction here because adjudicating the counterclaim in federal court "would interfere with the arbitrator's authority." Citing Buckeye Check Cashing, Inc. v. Cardegna...