District No. 1, Pacific Coast v. Liberty Maritime Corporation , 933 F.3d 751 ( 2019 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 10, 2019 Decided August 9, 2019
No. 18-7148
DISTRICT NO. 1, PACIFIC COAST DISTRICT, MARINE
ENGINEERS BENEFICIAL ASSOCIATION, AFL-CIO,
APPELLEE
v.
LIBERTY MARITIME CORPORATION,
APPELLANT
Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-02173)
Steffen N. Johnson 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.
Opinion for the Court filed by Circuit Judge RAO.
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,
2
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
(1974).
3
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. Appellee 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
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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
5
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.
6
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 (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
7
usual processes of the law.” Charles Dowd Box Co. v.
Courtney, 368 U.S. 502, 513 (1962).
Nevertheless, Liberty argues the district court lacked
subject matter jurisdiction over this case under the judicially
created doctrine known as “Garmon preemption.” Washington
Serv. Contractors Coal. v. Dist. Columbia, 54 F.3d 811, 815
(D.C. Cir. 1995) (citing San Diego Bldg. Trades Council v.
Garmon, 359 U.S. 236 (1959)). This doctrine holds that
“[w]hen an activity is arguably subject to § 7 or § 8 of the
[NLRA], . . . the federal courts must defer to the exclusive
competence of the [NLRB].” Garmon, 359 U.S. at 245. Suits
implicating § 7 or § 8 of the NLRA are often described as
“representational.”
Liberty attempts to rely on this court’s decision in a
previous suit between Liberty and MEBA, in which Liberty
raised and lost a similar jurisdictional argument. Liberty cites
this case for the proposition that three categories of legal claims
are preempted by the NLRA under Garmon: claims over which
the NLRB “has already exercised jurisdiction,” claims that call
for “an initial decision in the representation area,” and claims
“in which the center of the dispute is a representational
question.” Appellant Br. 35–36 (quoting Liberty Maritime I,
815 F.3d at 841 (citations and quotation marks omitted)).
Liberty urges this court to evaluate whether MEBA’s claim is
“primarily representational or primarily contractual,” as
several other circuits do. See, e.g., United Food & Commercial
Workers Union, Local 400 v. Shoppers Food Warehouse Corp.,
35 F.3d 958, 961 (4th Cir. 1994); Local Union 204 of Int’l Bhd.
of Elec. Workers, AFL-CIO v. Iowa Elec. Light & Power Co.,
668 F.2d 413, 419 (8th Cir. 1982). Liberty claims such analysis
would show this suit may fall into the purported third category
of claims preempted under Garmon: that the center of the
dispute may concern a representational matter, such as whether
8
MEBA or another union has representational rights over
crewmembers of the Liberty Peace. In order to determine the
true center of this dispute, Liberty argues the district court
should have considered MEBA’s grievance letter instead of
focusing only on MEBA’s complaint. Liberty contends it was
legal error for the district court to have concluded that, as a
matter of law, it maintained jurisdiction over MEBA’s claims.
MEBA responds that Liberty’s argument on appeal
“conflates the type of claim with the effect of a claim’s
enforcement.” Appellee Br. 26 (quoting Liberty Maritime I,
815 F.3d at 843). While the possible outcome of its suit may
touch on representational issues, MEBA argues it has a contract
that requires Liberty to arbitrate, and MEBA asked the district
court to compel compliance with that contract. MEBA
maintains this type of contractual dispute is squarely covered
by Section 301 of the LMRA.
The district court properly exercised jurisdiction over
MEBA’s claim under the plain meaning of Section 301 as well
as established Supreme Court and Circuit precedent. Section
301 covers “[s]uits for violations of contracts between an
employer and a labor organization.” Liberty Maritime I, 815
F.3d at 840 (quoting 29 U.S.C. § 185(a)). As the Supreme
Court has stated, Section 301 “permits suits for breach of a
collective bargaining agreement regardless of whether the
particular breach is also an unfair labor practice within the
jurisdiction of the Board.” Vaca v. Sipes, 386 U.S. 171, 179–
80 (1967) (emphasis added); see also Carey v. Westinghouse
Corp., 375 U.S. 261, 267–68 (1964) (holding that Section 301
gives a federal court jurisdiction over a suit to enforce an
arbitration clause in a collective bargaining agreement even if
the case is “truly a representation case” that could also be heard
by the NLRB under Section 9 of the NLRA). Thus, the
“Garmon doctrine is ‘not relevant’ to actions within the
9
purview of § 301” of the LMRA. Arnold, 417 U.S. at 16 (citing
Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 101 n.9
(1962)). We held in Liberty Maritime I that federal courts and
the NLRB have concurrent jurisdiction over claims that are
“both contractual and representational.” 815 F.3d at 840
(emphasis original) (citing Arnold, 417 U.S. at 16, and Smith v.
Evening News Ass’n, 371 U.S. 195, 197 (1962)).
Thus, if a case is both representational and contractual, it
is treated as a “hybrid” claim. See, e.g., United Parcel Serv.,
Inc. v. Mitchell, 451 U.S. 56, 66 (1981) (Stewart, J., concurring
in the judgment) (describing “a hybrid ‘§ 301 and breach of
duty suit’”); DelCostello v. Int’l Bhd. of Teamsters, 462 U.S.
151, 165 (1983) (describing “hybrid § 301/fair representation
litigation”); Cephas v. MVM, Inc., 520 F.3d 480, 485 (D.C. Cir.
2008) (same). Such “hybrid” claims create concurrent
jurisdiction for the federal courts and the NLRB, but they do
not divest courts of their statutory jurisdiction. Consistent with
Supreme Court precedent, that is precisely what this court has
held: “Instead of forcing courts to shoehorn a hybrid claim into
one category or the other, the Supreme Court has held that they
retain jurisdiction to hear a contractual claim even if the claim
is also representational.” Liberty Maritime I, 815 F.3d at 840
(citing Arnold, 417 U.S. at 16). “[F]ederal courts have
independent jurisdiction to decide cases alleging a breach of
collective bargaining agreements, even though that very breach
may also be an unfair labor practice.” Mullins v. Kaiser Steel
Corp., 642 F.2d 1302, 1316 (D.C. Cir. 1980), rev’d on other
grounds, 455 U.S. 72 (1982).
Allowing “hybrid” claims to be brought in federal court
reads together the two statutes, the LMRA and the NLRA,
giving effect to Congress’s provision of federal court
jurisdiction for contractual claims and NLRB jurisdiction over
representational claims. See Vaca, 386 U.S. at 179–80;
10
Wachovia Bank v. Schmidt, 546 U.S. 303, 315–16 (2006)
(“under the in pari materia canon of statutory construction,
statutes addressing the same subject matter generally should be
read as if they were one law”) (citations and quotation marks
omitted).
Liberty continues to argue that if a case is both
representational and contractual, a district court must place
those claims on a sliding scale to determine if the case is
primarily one or the other. Neither the Supreme Court nor this
court have required such an inquiry. In Liberty Maritime I, we
described and discussed the practice in some circuits, which
“examine the major issues to be decided” and “determine
whether they can be characterized as primarily representational
or primarily contractual” in order to dismiss “primarily
representational” claims. 1 Liberty Maritime I, 815 F.3d at 840
(alterations, quotation marks, and citation omitted).
Liberty’s reliance on the categories recognized by other
circuits is misplaced. While the Liberty Maritime I court
described the approaches from “several of our sister circuits,”
it did not adopt any of these competing decisions. Id. at 841.
Because the categories identified by other circuits were not
necessary to the decision, the Liberty Maritime I discussion of
those cases “does not constitute a precedent to be followed with
respect to that issue.” UC Health v. NLRB, 803 F.3d 669, 682
(D.C. Cir. 2015) (quotation marks and citations omitted). We
follow Liberty Maritime I, which refused to define the
1
Compare Iowa Elec. Light & Power Co., 668 F.2d at 419; Paper,
Allied–Indus., Chem. & Energy Workers Int’l Union v. Air Prods. &
Chems., Inc., 300 F.3d 667, 675 (6th Cir. 2002); Pace v. Honolulu
Disposal Serv., Inc., 227 F.3d 1150, 1156 (9th Cir. 2000); Shoppers,
35 F.3d at 961; Copps Food Ctr., Inc. v. United Food & Commercial
Workers Union, Local 73–A, No. 90–1905, 1991 WL 135508, at *2
(7th Cir. July 23, 1991) (unpublished).
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“parameters of a claim that is ‘primarily representational’ as
opposed to ‘primarily contractual’” and declined “to shoehorn”
a given “claim into one category or the other.” 815 F.3d at 840–
41.
Liberty also contends that it cannot “be ruled out, based on
the pleadings alone, that the major issues to be decided are
primarily representational.” Appellant Br. 38. MEBA’s
grievance letter, like its complaint, however, raised numerous
contractual issues. See MEBA Compl. Exhibit G (“Please be
advised that Liberty is in violation of the parties’ collective
bargaining agreement . . . . Consider this notice of an official
grievance for violation of the parties’ labor contract . . . . We
demand that the parties participate in expedited arbitration to
resolve this contractual dispute . . . .”). And Liberty does not
argue that the claim here is exclusively representational. See
Liberty Maritime I, 815 F.3d at 843 (“Garmon preemption is
designed to prevent a court from deciding a claim that can only
be characterized as representational.”) (emphasis added). At
most, then, Liberty has left open the possibility that this case
involves a hybrid claim raising both contractual and
representational questions. As discussed, however, such hybrid
claims are subject to the concurrent jurisdiction of the NLRB
and the federal courts. Id. at 840. To hold otherwise “would
frustrate rather than serve the congressional policy expressed
in [Section 301].” Smith, 371 U.S. at 200.
Finally, it may be true, as Liberty stresses, that “a party’s
mere assertion that a claim is contractual is not an automatic
ticket to federal court” under the LMRA. Appellant Br. 35
(quoting Liberty Maritime I, 815 F.3d at 840). A plaintiff must
plausibly demonstrate the dispute falls within the terms of
Section 301, and is not an “end run around [the
NLRA] . . . under the guise of contract interpretation.” Pace,
227 F.3d at 1157 (citation and alteration omitted); accord
12
Paper, 300 F.3d at 675 (“[S]imply referring to the claim as a
‘breach of contract’ was insufficient for purposes of § 301
federal courts’ jurisdiction.”). This proposition, however, goes
little further than the axiom that a plaintiff’s claim must invoke
a proper basis for federal court jurisdiction within a well-
pleaded complaint. Cf. Greenhill v. Spellings, 482 F.3d 569,
575 (D.C. Cir. 2007) (under the well-pleaded complaint rule,
jurisdiction arising under federal law is established by looking
to the legal basis of plaintiff’s claim) (citing Louisville &
Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152–53 (1908));
see also 13D Charles Alan Wright, Arthur R. Miller, Edward
H. Cooper, & Richard D. Freer, Federal Practice and
Procedure § 3566, at 261–62 (3d ed. 2008) (“The well-pleaded
complaint rule stands for the proposition that the court, in
determining whether the case arises under federal law, will
look only to the claim itself.”).
Put simply, Congress gave federal courts jurisdiction to
hear contractual claims between labor organizations and
employers in Section 301 of the LMRA. The existence of
representational issues does not divest the federal courts of
jurisdiction. Here, MEBA’s suit alleges a breach of the parties’
labor contract. The suit requires a judicial determination as to
whether an arbitration clause in the agreements between
Liberty and MEBA covers the dispute over the Liberty Peace.
See Gen. Elec. Co. v. Local 205, United Elec., Radio & Mach.
Workers of Am., 353 U.S. 547, 548 (1957) (Section “301(a)
furnishes a body of federal substantive law for the enforcement
of collective bargaining agreements” that provides for suits “to
enforce the obligation to arbitrate grievance disputes.”); see
also Westinghouse, 375 U.S. at 267–68. As the dispute includes
contractual claims, the district court properly concluded subject
matter jurisdiction was established under Section 301 of the
LMRA.
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III.
Proceeding to the merits of Liberty’s appeal, we consider
next whether the district court properly granted MEBA’s
motion for judgment on the pleadings.
A.
This court reviews a Rule 12(c) judgment on the pleadings
de novo. Judicial Watch, Inc. v. United States Dep’t of
Homeland Sec., 895 F.3d 770, 777 (D.C. Cir. 2018); Mpoy v.
Rhee, 758 F.3d 285, 287 (D.C. Cir. 2014). Federal Rule of Civil
Procedure 12(c) provides, “After the pleadings are closed—but
early enough not to delay trial—a party may move for
judgment on the pleadings.” Pleadings include any “copy of a
written instrument that is an exhibit to a pleading,” Fed. R. Civ.
P. 10(c), such as relevant and authentic documents attached to
the complaint. See, e.g., Philips v. Pitt Cty. Mem’l Hosp., 572
F.3d 176, 180 (4th Cir. 2009).
Very few of our precedents discuss Rule 12(c), in part
because judgment on the pleadings is rare. As Wright & Miller
notes, “Federal Rule 12(c) has its historical roots in common
law practice, which permitted either party, at any point in the
proceeding, to demur to his opponent’s pleading and secure a
dismissal or final judgment on the basis of the pleadings.” 5C
Wright & Miller § 1367, at 205; see also Patel v. Contemp.
Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001)
(“[A] motion for judgment on the pleadings is the direct
descendant of that ancient leper of the common law, the
‘speaking demurrer.’”); 5C Wright & Miller § 1369, at 265
(noting “the Rule 12(c) motion is little more than a relic of the
common law and code eras”).
Because Rule 12(c) provides judicial resolution at an early
stage of a case, the party seeking judgment on the pleadings
14
shoulders a heavy burden of justification. A reviewing court
“will affirm the district court if the moving party demonstrates
that no material fact is in dispute and that it is entitled to
judgment as a matter of law.” Peters v. Nat’l R.R. Passenger
Corp., 966 F.2d 1483, 1485 (D.C. Cir. 1992) (quotation marks
omitted). The moving party must demonstrate its entitlement to
judgment in its favor, even though the “court evaluating the
12(c) motion will accept as true the allegations in the
opponent’s pleadings, and as false all controverted assertions
of the movant.” Haynesworth v. Miller, 820 F.2d 1245, 1249
n.11 (D.C. Cir. 1987) (collecting cases), abrogated on other
grounds by Hartman v. Moore, 547 U.S. 250 (2006); see also
Beal v. Missouri Pac. R.R. Corp., 312 U.S. 45, 51 (1941) (when
the plaintiff moves for judgment on the pleadings, the
defendant’s “denials and allegations of the answer which are
well pleaded must be taken as true”). We must give “all
reasonable inferences to the opponent’s pleadings” before
entering a judgment on the pleadings. Wager v. Pro, 575 F.2d
882, 884 (D.C. Cir. 1976).
Under this standard, “a judgment on the pleadings is not
appropriate” if there are “issues of fact which if proved would
defeat recovery,” “even if the trial court is convinced that the
party opposing the motion is unlikely to prevail at trial.” Id.
“[I]f material questions of fact are presented by the pleadings,
the remedy by motion for judgment on the pleadings under
Rule 12(c) is not available.” Noel v. Olds, 149 F.2d 13, 14 &
n.7 (D.C. Cir. 1945) (citing James A. Pike, Objections to
Pleadings Under the New Federal Rules of Civil Procedure, 47
Yale L.J. 50 (1937)).
B.
Applying these standards, MEBA’s pleadings and
attachments cannot carry the day. The district court erred in
15
granting MEBA’s Rule 12(c) motion. The district court found
that Liberty and MEBA agreed to arbitrate their disputes in the
Master Agreements, which included clauses stating: “All
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 13. The district
court acknowledged that Liberty contested “whether a
collective bargaining agreement exists between the parties
under which the union can assert its right to arbitrate” and that
Liberty argued the absence of such an agreement rendered
judgment on the pleadings inappropriate. Id. at 9–10 & n.7. But
the district court construed Liberty’s assertion that no
agreement existed as a legal conclusion, not a factual dispute.
Because legal conclusions about a collective bargaining
agreement are accorded “no special deference,” id. at n.7
(quoting Local Union No. 47, Int’l Bhd. Of Elec. Workers v.
NLRB, 927 F.2d 635, 640 (D.C. Cir. 1991)), the district court
found no material fact about the contract to be in dispute.
On appeal, Liberty argues that its denial was factual, not
legal, and so failure to accept its denial as true was legal error;
that the complete contractual terms and scope were not before
the district court on the pleadings, as recognized by the district
court’s opinion and the pleadings; and that without a full
contract to interpret, the order to arbitrate was error. Echoing
the district court, MEBA simply responds that Liberty’s claim
that it did not have an agreement with MEBA covering the
Liberty Peace is a legal conclusion, not a dispute of material
fact. MEBA also argues that Liberty never denied the existence
of a collective bargaining agreement that contains a broad
arbitration clause, nor that those agreements are still in effect.
It claims that Liberty’s “tactic” is “smoke and mirrors.”
Appellee Br. 10. MEBA maintains that Liberty contradicted its
appellate theory of the case in litigating the case below,
claiming that Liberty conceded the existence of the contract
16
and disputed only whether the contract’s broad terms covered
the Liberty Peace. Essentially, MEBA claims that Liberty’s
appeal is rooted in procedural technicalities, rather than a good
faith factual dispute over whether an arbitration clause exists in
an authentic, extant contract.
Giving all reasonable inferences to Liberty, Liberty raised
material issues of fact that rendered judgment on the pleadings
inappropriate. First, Liberty properly disputed the existence of
a contract to arbitrate in this case. Without a contract binding
the parties to arbitrate, an order compelling arbitration is
improper. “[A]rbitration is a matter of contract and a party
cannot be required to submit to arbitration any dispute which
he has not agreed so to submit.” AT&T Techs., Inc. v.
Commc’ns Workers of Am., 475 U.S. 643, 648 (1986)
(quotation marks and citation omitted). Such contracts must be
“interpreted as a whole.” United States v. Hunt, 843 F.3d 1022,
1028 (D.C. Cir. 2016) (quoting Restatement (Second) of
Contracts § 202(2)). And although “the determination that
parties have contractually bound themselves to arbitrate
disputes . . . is a legal conclusion[,] . . . the findings upon which
that conclusion is based are factual.” Bailey v. Fed. Nat’l
Mortg. Ass’n, 209 F.3d 740, 744 (D.C. Cir. 2000) (quoting
Chelsea Square Textiles, Inc. v. Bombay Dyeing & Mfg. Co.,
189 F.3d 289, 295 (2d Cir. 1999)); see also 11 Williston on
Contracts § 30:3 (4th ed.) (“It is generally a question of fact . . .
whether or not a contract . . . actually exists.”).
The existence of a contract to arbitrate must first be
established through a factual determination of what constitutes
the parties’ full agreement. As such, the district court erred
when it based its conclusion of arbitrability on a contract of
genuinely disputed authenticity. Liberty denied the authenticity
of the copies of the Master Agreements that MEBA attached to
its complaint. Specifically, MEBA alleged in its complaint:
17
Liberty first became signatory to a collective bargaining
agreement with MEBA in 1988 when the Company signed
on to both the Union’s 1986-1990 Tanker Vessels Master
Agreement and the 1986-1990 Dry Cargo Vessels Master
Agreement. A copy of the 1986-1990 Tanker Vessels
Master Agreement and Liberty’s signature page is attached
hereto as Exhibit A. A copy of the 1986-1990 Dry Cargo
Vessels Master Agreement is attached hereto as Exhibit B.
These agreements cover all U.S. flagged vessels owned,
managed or operated by Liberty.
MEBA Compl. ¶ 8. In its answer, Liberty admitted that Liberty
signed the Master Agreements but denied all other allegations
in ¶ 8 of the complaint not expressly admitted. This included
denying MEBA’s allegation that Exhibits A and B were copies
of the Master Agreements. Liberty also denied that even the
authentic version of these agreements covered all U.S. flagged
vessels managed by Liberty.
Accepting Liberty’s allegations as true and making all
reasonable inferences in Liberty’s favor, as the Rule 12(c)
standards require, means that Exhibits A and B were not
authenticated copies of the two Master Agreements. Without
authenticated Master Agreements, the district court lacked
adequate factual support for its finding that the language of the
agreements contained an extant arbitration clause. This dispute
over authenticity created a material issue of fact that should
have been enough to defeat MEBA’s Rule 12(c) motion. See
Horsley v. Feldt, 304 F.3d 1125, 1135 (11th Cir. 2002)
(“Because the authenticity of the [documents] attached to the
amended answer is disputed, . . . they may not be considered in
deciding the Rule 12(c) motion for judgment on the
pleadings.”); see also Philips, 572 F.3d at 180.
18
Second, several disputed contract provisions were not
included in the pleadings and attachments. The pleadings
showed that, at least in 2012, Liberty and MEBA were parties
to “a Memorandum of Understanding dated September 23,
2005, as amended; various Side Letters, dated June 8, 2005,
October 28, 2005, and July 14, 2010, respectively; and Letters
of Understanding, dated July 7, 2009, and February 21, 2010,
respectively.” MEBA Compl. Exhibit C. Liberty conceded the
authenticity of the MOU. But Liberty maintained that the six
documents referenced in the MOU, but not attached to
MEBA’s complaint, were relevant to whether any collective
bargaining agreement or arbitration clause applied to the new
vessel.
Liberty stresses the pre-suit correspondence attached to
MEBA’s complaint referenced over a dozen other documents,
only three of which were attached to the complaint, and only
one of which was conceded to be authentic. Liberty also
disputed that a contract covered the Liberty Peace on the basis
that MEBA failed to define “this Agreement” in the arbitration
clause. Because the parties’ contractual relationship has been
modified by numerous agreements over the decades since the
Master Agreements were signed, the record does not make
clear to what “this Agreement” refers.
The district court, however, assumed these numerous side
letters and letters of understanding did not modify the
agreement in any meaningful way, accepting that “the
grievance and arbitration procedures contained in the Tanker
and Dry Cargo Master Agreements remain binding” without
having reviewed the “terms and conditions of employment of
the [collective bargaining agreements], side letters, and letters
of understanding.” Dist. Ct. Op. at 3. These assumptions were
inappropriate in the face of controverted facts about the
Agreements’ content. The pleadings and limited attachments
19
did not support the conclusion that “no material fact is in
dispute.” Peters, 966 F.2d at 1485.
Third, the district court drew improper inferences against
Liberty, the opposing party, rather than against MEBA, the
moving party. The district court concluded “Liberty failed to
point to any evidence to rebut the presumption of arbitrability.”
Dist. Ct. Op. at 14. Yet at this stage of the proceedings, it was
MEBA’s burden to demonstrate the existence of an applicable
arbitration agreement, not Liberty’s burden to rebut it. See
Beal, 312 U.S. at 51. Although the district court correctly
identified the federal policy in favor of arbitration agreements,
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24–25 (1983), that policy becomes a presumption only
when the factual existence of a contract for arbitration has been
established. See AT&T, 475 U.S. at 648; Bailey, 209 F.3d at
744. The district court also found that “no agreement between
the parties contains language excluding this sort of dispute
from arbitration.” Dist. Ct. Op. at 14. But because the whole
“agreement” was not before the district court, it erred by
inferring, in a manner that favored MEBA, that the “cont[ent]”
and “language” of the agreement did not exclude the dispute
over the Liberty Peace from arbitration.
Fourth, the district court erred by refusing to allow
discovery over Liberty’s objection that there was a material
factual dispute about the existence of an agreement to arbitrate
issues relating to the Liberty Peace. See Dec. 14, 2017 Minute
Order. Discovery would have required the district court to treat
MEBA’s motion as one for summary judgment. Fed. R. Civ. P.
12(d) (“If, on a motion under Rule 12(b)(6) or 12(c), matters
outside the pleadings are presented to and not excluded by the
court, the motion must be treated as one for summary judgment
under Rule 56. All parties must be given a reasonable
opportunity to present all the material that is pertinent to the
20
motion.”). Granting such discovery would have allowed
Liberty to attempt to substantiate, or MEBA to refute, the claim
that the complete contractual record, when read as a whole,
does not require arbitration of this dispute.
Despite MEBA’s claim that Liberty’s argument consists of
“smoke and mirrors,” MEBA has not shown that Liberty lacks
a good faith basis for its appeal. Parties are presumed to have a
good faith basis for denying allegations, even at the pleading
stage. See Amnesty Am. v. Town of W. Hartford, 361 F.3d 113,
131 (2d Cir. 2004) (“Because attorneys, as officers of the court,
are presumed not to offer in opposition” to dispositive motions
“evidence that they have no good faith basis to believe will be
available or admissible at trial, the burden is on the moving
party.”). For the reasons stated above and in light of the
incomplete contractual record, we assume there was a good
faith basis for Liberty to challenge judgment on MEBA’s
pleadings. We expect the parties, on remand, will act in good
faith to narrow their dispute and avoid burying the district court
with reams of contractual provisions not arguably relevant to
the arbitrability issue in this case.
***
This case involved disputed issues of material fact that
rendered the unusual remedy of judgment on the pleadings
inappropriate. Because the district court should have first
determined whether Liberty and MEBA had a valid contract
for arbitration by looking at their whole agreement, we reverse
the judgment on the pleadings and remand the case for further
proceedings consistent with this opinion.
So ordered.