District No. 1, Pacific Coast District, Marine Engineers' Beneficial Association, Afl-Cio v. Liberty Maritime Corporation ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
DISTRICT NO. 1, PACIFIC COAST )
DISTRICT, MARINE ENGINEERS’ )
BENEFICIAL ASSOCIATION )
AFL-CIO, )
)
Plaintiff, )
)
v. ) Civil Action No. 17-1641 (ABJ)
)
LIBERTY MARITIME CORPORATION, )
)
Defendant. )
____________________________________)
MEMORANDUM OPINION
This case involves a dispute between a labor union and a shipping company. On August
14, 2017, plaintiff District No. 1, Pacific Coast District, Marine Engineers’ Beneficial Association
AFL-CIO (“MEBA” or “the union”) brought this action against defendant Liberty Maritime
Corporation (“Liberty”) pursuant to Section 301 of the Labor Management Relations Act, 29
U.S.C. § 185. Compl. [Dkt. # 1] ¶¶ 1, 34. MEBA alleges that Liberty refused to arbitrate a dispute
as required by the terms of their collective bargaining agreement (“Agreement”), and it seeks an
order compelling arbitration. Compl. ¶¶ 9, 35–37. Liberty answered the complaint, see Ans.
[Dkt. # 5]; Am. Ans. [Dkt. # 7], and plaintiff has moved for judgment on the pleadings. Pl.’s Mot.
for J. on the Pleadings [Dkt. # 8] (“Pl.’s Mot.”); Pl.’s Mem in Supp. of Pl.’s Mot. [Dkt. # 8-1]
(“Pl.’s Mem.”).
The union contends that it is entitled to an order compelling arbitration as a matter of law
based on the terms of the Agreement. Pl.’s Mem. at 1–2. Liberty has opposed the motion, arguing
that arbitration is premature because the union failed to negotiate in good faith prior to invoking
the arbitration clause. Def.’s Opp. to Pl.’s Mot. [Dkt. # 9] (“Def.’s Opp.”) at 1, 7–18. But the
union maintains that the determination of whether the parties have engaged in good faith
negotiations is itself a question that must be decided by an arbitrator, and not by the Court, under
the terms of the Agreement. Pl.’s Mem. at 15. It also seeks attorneys’ fees to cover the cost of
bringing this case and preparing the instant motion. Id.
Because the Court agrees that the predicate question of whether the parties complied with
the good faith negotiation requirement in the wage reopener provision of the Agreement must be
resolved by an arbitrator, it will grant plaintiff’s motion for judgment on the pleadings, enter
judgment in favor of MEBA, and enjoin Liberty from refusing to participate in the arbitration of
the parties’ wage dispute on the grounds that the union failed to engage in good faith negotiations
before invoking the arbitration clause. But the union’s request for attorneys’ fees will be denied.
BACKGROUND
Plaintiff MEBA is a labor union that represents employees in the U.S. maritime industry
who are located at ports throughout the United States and on oceangoing vessels. Compl. ¶ 2.
Liberty is a shipping company that operates various seagoing vessels, and many of its employees
are represented by MEBA. Id. ¶ 3.
On January 23, 2012, MEBA and Liberty signed a Memorandum of Understanding
(“MOU” or “Agreement”), a collective bargaining agreement that is in effect until at least June 15,
2019. Compl. ¶¶ 8–9; Ex. A to Compl. [Dkt. # 1-1] (“MOU”) at 1. The Agreement contains a
“wage reopener provision,” which states that “[e]ither party may reopen this Agreement, effective
as of October 1, 2015, by giving the other party written notice at least 60 days and no more than
90 days prior to the reopener date.” MOU § 3(f); Compl. ¶ 10. According to the MOU, “[i]n the
event the Agreement is reopened, the parties agree to negotiate over the wages, benefits, and other
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economic terms and conditions for subsequent years of the extended Agreement.” MOU § 3(f);
Compl. ¶ 11. The Agreement goes on:
If, after engaging in good faith negotiations . . . the parties are unable to
reach an agreement regarding changes in wages, benefits or other economic
terms and conditions, the parties agree to submit on an expedited basis their
dispute to a mutually selected arbitrator in accordance with the provisions
set forth in the [collective bargaining agreement]. The arbitrator’s decision
will be final and binding on the parties.
MOU § 3(g); Compl. ¶ 12.
By letter on January 24, 2017, MEBA notified Liberty of its intent to reopen the Agreement
for negotiations pursuant to the wage reopener provision, and it proposed several available dates
for conducting the negotiations. Compl. ¶ 13; Ex. B to Compl. [Dkt. # 1-2]; see Am. Ans. ¶ 13;
Def.’s Opp. at 3. One week later, MEBA provided Liberty with its first bargaining proposal.
Compl. ¶ 14; Am. Ans. ¶ 14. The pleadings contain considerable detail about what happened next.
The parties exchanged emails concerning the proposal over the course of the next month.
Compl. ¶¶ 15–16; Am. Ans. ¶¶ 15–16. While the union claims that Liberty did not provide a
counterproposal during this time, and that it did not suggest any dates for the start of the
negotiations, see Compl. ¶¶ 15–17, Liberty asserts that it responded to MEBA’s proposal by
requesting information, and that MEBA refused to provide it with the information it needed in
order to bargain. Am. Ans. ¶¶ 15–17; see also Def.’s Opp. at 3.
On March 10, 2017, MEBA sent Liberty a letter asserting that it had attempted to negotiate
in good faith, but because Liberty had not yet engaged in negotiations, the union intended to invoke
section 3(g) of the MOU and begin arbitration proceedings. Compl. ¶¶ 18–19; Ex. C to Compl.
[Dkt. # 1-3]; see Am. Ans. ¶¶ 18–19. MEBA attached another bargaining proposal to the letter,
which it characterized as the union’s “last, best and final offer” that it would present to the
arbitrator. Compl. ¶¶ 18–19; Ex. C to Compl. [Dkt. # 1-3]; see Am. Ans. ¶¶ 18–19.
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MEBA’s counsel then contacted Liberty and invited its assistance in selecting an arbitrator.
Compl. ¶ 20; Am. Ans. ¶ 20. Liberty rejected the arbitration demand and subsequently transmitted
its first counter-proposal and offered to meet with MEBA and negotiate. Compl. ¶ 21; Am.
Ans. ¶ 21.
MEBA then offered a third proposal, and the parties met on April 18, 2017 to begin
negotiations. Compl. ¶ 22; Am. Ans. ¶ 22. At the end of the meeting, Liberty responded with its
second counter-proposal. Compl. ¶ 22; Am. Ans. ¶ 22. In response, MEBA gave Liberty the
fourth and fifth versions of its proposal. Compl. ¶ 23; Am. Ans. ¶ 23.
On June 13, 2017, 1 the parties met for a second negotiation session to discuss the new
terms. Compl. ¶ 24; Am. Ans. ¶ 24. During the meeting, Liberty gave MEBA its third counter-
proposal, and the parties set a future meeting date for July 18, 2017. Compl. ¶¶ 23, 27; Am.
Ans. ¶¶ 23, 27. Prior to the July meeting, MEBA responded to Liberty’s third counter-proposal
with a sixth proposal for Liberty’s review. Compl. ¶ 27; Am. Ans. ¶ 27.
On July 12, 2017, Liberty notified MEBA that it would not participate in the upcoming
meeting because it did not want to engage in wage negotiations until a pending grievance issue
involving both parties had been resolved. Compl. ¶ 28; Am. Ans. ¶ 28. MEBA immediately
objected, and it insisted that Liberty’s decision to suspend negotiations “amount[ed] to a failure to
bargain in good faith.” Compl. ¶ 29; Ex. D to Compl. [Dkt. # 1-4]; see Am. Ans. ¶ 29. MEBA
then again invoked section 3(g) of the Agreement and sought to bring the wage reopener dispute
before an arbitrator. Compl. ¶ 30; Ex. D to Compl. [Dkt. # 1-4].
2 One letter erroneously describes this meeting as taking place on June 18 rather than June
13. See Ex. E to Compl. [Dkt # 1-5] at 2; Def.’s Opp. at 4 n.3.
4
On July 17, 2017, Liberty rejected MEBA’s demand for arbitration. Compl. ¶ 31; Ex. E to
Compl. [Dkt. # 1-5]; Am. Ans. ¶ 31. Liberty stated in a letter that the demand for arbitration was
premature, and it explained that the grievance had to be decided first because resolution of the
contract interpretation issue at stake could “have a major economic impact which will affect [the]
wage re-opener discussions.” Ex. E to Compl. [Dkt. # 1-5] at 2.
At that point, the union went to court. On August 14, 2017, it filed a complaint seeking to
compel arbitration of the wage reopener issues. Compl. And on November 6, 2017, while the
case was pending, the parties settled the grievance that Liberty had cited as the reason for putting
negotiations on hold in July. Decl. of Counsel William G. Miossi in Supp. of Def.’s Opp.
[Dkt. # 9-1] (“Miossi Decl.”); Ex. A to Miossi Decl.; Def.’s Opp. at 6.
On November 8, 2017, then, Liberty notified MEBA that it was prepared to restart the wage
reopener negotiations. Ex. A to Miossi Decl. [Dkt. # 9-1]. But MEBA refused to continue
negotiations, see Ex. B to Miossi Decl. [Dkt. # 9-1]; Ex. C to Miossi Decl. [Dkt. # 9-1]; Ex. D to
Miossi Decl. [Dkt. # 9-1], explaining that “[t]he fact that [Liberty] is now willing to bargain does
nothing to absolve its conduct that has placed the parties in this situation.” Pl.’s Reply in Supp. of
Pl.’s Mot. [Dkt. # 11] (“Pl.’s Reply”) at 4. 2 With the parties in that posture, the union put the
question to the Court to decide.
2 On November 30, 2017, the Court issued an order compelling MEBA to show cause why
the action should not be dismissed as moot since the separate grievance had been resolved and
Liberty had proposed dates for renewed negotiations. Order [Dkt. # 10]. Plaintiff responded that
the case is not moot because defendant’s actions prior to the abrupt end of negotiations showed a
“pattern and practice of conduct” aimed at delaying negotiation proceedings. Pl.’s Reply at 2–3.
Thus, the question of whether either party has engaged in good faith negotiations remains a live
dispute.
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STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(c) authorizes a party to move for judgment on the
pleadings at any time “after the pleadings are closed.” Fed. R. Civ. P. 12(c). 3 Parties are entitled
to pretrial judgment on the pleadings “if the moving party demonstrates that no material fact is in
dispute and that it is entitled to judgment as a matter of law.” Schuler v. PricewaterhouseCoopers,
LLP, 514 F.3d 1365, 1370 (D.C. Cir. 2008), quoting Peters v. Nat’l R.R. Passenger Corp., 966
F.2d 1483,1485 (D.C. Cir. 1992). When analyzing a motion for judgment on the pleadings, the
Court must “view the facts presented in the pleadings and the inferences to be drawn therefrom in
the light most favorable to the nonmoving party.” Peters, 966 F.2d at 1485, quoting Jablonski v.
Pan Am. World Airways, Inc., 863 F.2d 289, 290–91 (3d Cir. 1988); see Thompson v. District of
Columbia, 428 F.3d 283, 284 (D.C. Cir. 2005) (viewing the complaint’s allegations in the light
most favorable to the plaintiff when the defendants filed a 12(c) motion); see also Hall v. District
of Columbia, 867 F.3d 138, 152 (D.C. Cir. 2017) (“A Rule 12(c) motion considers the defendant
answer together with the complaint.”).
While there are opinions in this district that state that the standards of review for a Rule
12(b)(6) motion and a Rule 12(c) motion are “essentially the same” or “virtually identical,” see,
e.g., Nat’l Shopmen Pension Fund v. Disa, 583 F. Supp. 2d 95, 99 (D.D.C. 2008), citing Plain v.
AT & T Corp., 424 F. Supp. 2d 11, 20 n.11 (D.D.C. 2006); Maniaci v. Georgetown Univ., 510 F.
Supp. 2d 50, 58 (D.D.C. 2007); Jung v. Ass’n of Am. Med. Colls., 339 F. Supp. 2d 26, 35–36
3 Pleadings are closed for Rule 12(c) purposes when a complaint and an answer have been
filed. See Fed. R. Civ. P. 7(a); Maniaci v. Georgetown Univ., 510 F. Supp. 2d 50, 60 (D.D.C.
2007) (“Pleadings are closed within the meaning of Rule 12(c) if no counter or cross claims are at
issue when a complaint and an answer have been filed.”).
6
(D.D.C. 2004), the standard set out in the Schuler case by the D.C. Circuit more closely resembles
a summary judgment type of determination.
Wright’s Federal Practice and Procedure makes the same observation, noting that a Rule
12(c) motion asks a court to address the merits of the parties’ claims and defenses and not simply
procedural barriers or pleading deficiencies. 5C Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure § 1369 (3d ed. 2017) (commenting that the appropriate standard of review
for a Rule 12(c) motion is more similar to a Rule 56 motion for summary judgment, except that
the Court may only consider the contents of the pleadings); see also Jones v. Dufek, 830 F.3d 523,
528 (D.C. Cir. 2016) (“The district court properly resolved these questions as a matter of law on a
motion under Rule 12(c).”), citing Alexander v. City of Chicago, 994 F.2d 333, 336 (7th Cir. 1993)
(“[T]he standard courts apply for summary judgment and for judgment on the pleadings ‘appears
to be identical.’”). 4
If on a Rule 12(b)(6) or 12(c) motion, “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.” Fed. R. Civ. P. 12(d); see Marshall Cnty. Health Care Auth. v. Shalala, 988 F.2d 1221, 1226
(D.C. Cir. 1993) (applying the same test when converting a Rule 12(b)(6) motion to one for
4 See also Landmark Am. Ins. Co. v. VO Remarketing Corp., 619 F. App’x 705, 708 (10th
Cir. 2015) (“Granting a motion for judgment on the pleadings requires the movant to establish an
absence of any issue of material fact and entitlement to judgment as a matter of law.”); Poehl v.
Countrywide Home Loans, Inc., 528 F.3d 1093, 1096 (8th Cir. 2008) (“A grant of judgment on the
pleadings is appropriate where no material issue of fact remains to be resolved and the movant is
entitled to judgment as a matter of law.”) (internal quotation marks omitted); DiCarlo v. St. Mary
Hosp., 530 F.3d 255, 259 (3d Cir. 2008) (“[Rule 12(c)] [j]udgment will only be granted where the
moving party clearly establishes there are no material issues of fact, and that he or she is entitled
to judgment as a matter of law.”); Nat’l Fid. Life Ins. Co. v. Karaganis, 811 F.2d 357, 358 (7th
Cir. 1987) (“A motion for judgment on the pleadings may be granted only if the moving party
clearly establishes that no material issue of fact remains to be resolved and that he or she is entitled
to judgment as a matter of law.”) (internal citation omitted).
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summary judgment). While Liberty attaches correspondence relating to the resumption of
negotiations to its pleading, see Decl. & Exs. to Def.’s Opp. [Dkt. # 9-1], the Court does not need
to consider them to resolve the legal issue presented in the pending motion. Therefore, the Court
finds it appropriate to consider this case under the standard of review for judgment on the
pleadings, and it will not convert the motion to one for summary judgment.
ANALYSIS
I. The union is entitled to judgment on the pleadings.
MEBA seeks to compel arbitration of the parties’ failure to come to terms under the wage
reopener provision of the collective bargaining agreement. See Compl.; Pl.’s Mem. at 2. Liberty
does not deny that the parties agreed in the MOU to arbitrate disputes arising under that provision.
See Am. Answer ¶¶ 11–12. But it highlights the language in the MOU that requires the parties to
negotiate first, see Def.’s Opp. at 1 (“According to its express terms, the arbitration agreement in
this case is available only to resolve differences concerning wage rates and benefit contributions
the parties cannot settle themselves after first engaging in good faith bargaining.”), and it maintains
that MEBA’s invocation of the arbitration provision is premature because the union did not
negotiate in good faith before demanding arbitration. Id. at 7.
Each party has advanced its own characterization of the series of events set forth above.
They plainly disagree about whether the good faith negotiation requirement has been satisfied, but
more important, they disagree about who should decide that question. See Compl. ¶¶ 13–31; Pl.’s
Mem. at 13, 15; Def.’s Opp. at 8–19; Pl.’s Reply at 3–4, 8. MEBA contends that pursuant to the
MOU, and in the absence of any evidence of the parties’ intent to submit the matter to a court, the
threshold question must be referred to an arbitrator, see Pl.’s Mem. at 13–15; Pl.’s Reply at 7–8,
while the employer is equally adamant that the Court must decide it. Def.’s Opp. at 8–18; see also
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id. at 3 (“The arbitration provision contained in Section 3(g) applies only to the parties’ reopener
negotiations and no other type of dispute.”). Since the Court will resolve the arbitration question
in favor of the union, it will not address the adequacy of the negotiations, and nothing in this
opinion should be read as expressing any view on the matter.
While there is a strong “federal policy favoring arbitration agreements,” Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983), “arbitration 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.” United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960).
“If the contract is silent on the matter of who primarily is to decide ‘threshold’ questions about
arbitration, courts determine the parties’ intent with the help of presumptions.” BG Grp., PLC v.
Republic of Argentina, 572 U.S. 25, 34 (2014) (using general contract interpretation principles to
interpret the arbitration provision of an international treaty, and concluding that the arbitrator, not
the court, must determine if a procedural condition precedent to arbitration had been satisfied).
Courts presume that the parties intend courts, not arbitrators, to decide questions of
“arbitrability.” BG Grp., 572 U.S. at 34. These includes questions such as “whether the parties
are bound by a given arbitration clause,” or “whether an arbitration clause in a concededly binding
contract applies to a particular type of controversy.” Howsam v. Dean Witter Reynolds, Inc., 537
U.S. 79, 84 (2002); see, e.g., Granite Rock v. Int’l Bhd. of Teamsters, 561 U.S. 287, 299–300
(2010) (concluding that disputes over “formation of the parties’ arbitration agreement” and “its
enforceability or applicability to the dispute” at issue are “matters . . . the court must resolve”); AT
& T Techs., Inc. v. Commc’ns Workers, 475 U.S. 643, 651 (1986) (holding that it was for the court
to decide whether a labor-management lay-off controversy fell within the arbitration clause of a
collective bargaining agreement); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 546–51
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(1964) (concluding that a court must determine whether an arbitration agreement survived a
corporate merger and bound the resulting corporation since “[u]nder our decisions, whether or not
[t]he company was bound to arbitrate, as well as what issues it must arbitrate, is a matter to be
determined by the Court on the basis of the contract entered into by the parties”), quoting Atkinson
v. Sinclair Refining Co., 370 U.S. 238, 241 (1962).
But, “courts presume that the parties intend arbitrators, not courts, to decide disputes about
the meaning and application of particular procedural preconditions for the use of arbitration.” BG
Grp., 572 U.S. at 34; see, e.g., Howsam, 537 U.S. at 84, 86 (observing that “‘procedural questions
which grow out of the dispute and bear on its final disposition’ are presumptively not for the judge,
but for an arbitrator,” and that parties “normally expect a forum-based decisionmaker to decide
forum-specific procedural gateway matters”) (emphasis in original); John Wiley, 376 U.S. at 557
(concluding that an arbitrator must determine whether the first two steps of a grievance procedure
were followed when those steps were prerequisites to beginning arbitration); Exxon Chem. Co. v.
NLRB, 386 F.3d 1160, 1166 (D.C. Cir. 2004) (“Exxon’s objections that the three grievances were
untimely under the contract . . . are properly for the arbitrator to resolve.”); Wash.-Baltimore
Newspaper Guild, Local 35 v. Wash. Post, 959 F.2d 288, 291 (D.C. Cir. 1992) (confirming the
general rule that “‘procedural’ arbitrability questions are for arbitrators and not courts to decide”);
Wash. Hosp. Ctr. v. Serv. Emp. Int’l Union Local 722, 746 F.2d 1503, 1507–09 (D.C. Cir. 1984)
(finding that an arbitrator should decide the effects of a party’s admitted failure to follow the
contractual grievance process, which was a prerequisite to arbitration).
The Supreme Court has said that these procedural “gateway” matters include claims of
“waiver, delay, or a like defense to arbitrability.” BG Grp., 572 U.S. at 35, quoting Moses H. Cone
Mem’l Hosp., 460 U.S. at 25. They also include the “satisfaction of ‘prerequisites such as time
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limits, notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate.’” Id.,
quoting Howsam, 537 U.S. at 85. 5
In BG Group, PLC v. Republic of Argentina, the Supreme Court had to determine
“who – court or arbitrator – bears primary responsibility for interpreting and applying [the] local
court litigation provision” contained in a treaty’s arbitration clause. 572 U.S. at 33. The
international agreement provided for arbitration if a period of eighteen months had elapsed after
the dispute had been submitted to a local tribunal and that tribunal “ha[d] not given its final
decision.” Id. at 28, 35. The Court first observed that questions related to procedural preconditions
to arbitration are for arbitrators, not courts, to decide. Id. at 35. It then concluded that the
assessment of whether the party seeking to compel arbitration had complied with the local
litigation requirement was a question of the “procedural[] variety” because “[i]t determines when
the contractual duty to arbitrate arises, not whether there is a contractual duty to arbitrate at all.”
Id. (emphasis in original). Furthermore, the Court observed that the treaty contained no evidence
that the parties had any “intent contrary to our ordinary presumptions about who should decide
threshold issues related to arbitration”: the treaty did not specify that the litigation requirement “is
5 The Supreme Court has also noted that the Revised Uniform Arbitration Act of 2000
supports this position.
Indeed, the Revised Uniform Arbitration Act of 2000 (RUAA), seeking to
“incorporate the holdings of the vast majority of state courts and the law
that has developed under the [Federal Arbitration Act],” states that an
“arbitrator shall decide whether a condition precedent to arbitrability has
been fulfilled.” And the comments add that “in the absence of an agreement
to the contrary, issues of substantive arbitrability . . . are for the court to
decide and issues of procedural arbitrability, i.e., whether prerequisites such
as time limits, notice, laches, estoppel, and other conditions precedent to an
obligation to arbitrate have been met, are for the arbitrators to decide.”
Howsam, 537 U.S. at 84–85 (alterations in original) (emphasis in original), quoting RUAA § 6(c)
& cmt. 2, 7 U.L.A. 12–13 (Supp. 2002).
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to operate as a substantive condition on the formation of the arbitration contract, or that it is a
matter of such elevated importance that it is to be decided by courts.” Id. at 40.
In making its decision, the Court also observed that the local litigation requirement was
highly analogous to procedural provisions that other courts have found to be for arbitrators, not
courts, to interpret. BG Grp., 572 U.S. at 36. Particularly relevant here, the Court cited
approvingly to the First Circuit’s decision in Dialysis Access Center, LLC v. RMS Lifeline, Inc., in
which that court concluded that a “good faith negotiations” clause was a procedural prerequisite
to arbitration and thus a matter for the arbitrator and not the court. Id., citing Dialysis Access Ctr.,
LLC v. RMS Lifeline, Inc., 638 F.3d 367, 383 (1st Cir. 2011).
In Dialysis Access Center, the parties entered into a management services agreement which
stated in part, “[the parties] shall use good faith negotiation to resolve any dispute that may arise
under this Agreement . . . . In the event [the parties] cannot reach agreement on any issue, such
issue will be settled by binding arbitration.” 638 F.3d at 371. A number of disputes arose between
the parties regarding their obligations under the agreement, so the defendant submitted the disputes
to arbitration. Id. In response, the plaintiffs filed suit. Id. The plaintiffs asserted that the parties’
disputes over their agreement could not be submitted to arbitration because the defendant had not
complied with the condition that the parties engage in good faith negotiations prior to arbitration.
Id. at 383. The parties also disagreed about whether the arbitration clause “in fact establishe[d] a
condition precedent to arbitration,” but the court concluded that it did not need “to resolve this
disagreement because, assuming arguendo that the [a]rbitration [c]lause establishes such a pre-
condition to arbitration, [plaintiffs] have not rebutted the presumption that the arbitrator should
decide whether the parties complied with such a procedural pre-requisite to arbitration.” Id.
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While the D.C. Circuit has not directly considered who should decide whether the parties
have complied with a good faith negotiation provision that is a condition precedent to arbitration,
other courts appear to be in agreement that it is a question for the arbitrator. See, e.g., Dialysis
Access Ctr., 638 F.3d at 383 (“[W]e find that the parties’ disagreement over whether RMS
complied with the . . . alleged good faith negotiations pre-requisite to arbitration is an issue for the
arbitrator to resolve . . . .”); Cutler Assocs., Inc. v. Palace Constr., LLC, 132 F. Supp. 3d 191, 196,
198 (D. Mass. 2015) (concluding that the “decision as to the effect of [p]laintiff’s alleged failure
to comply with the preconditions of arbitration,” including the requirement to engage in
“uninterrupted good faith discussions for at least two hours,” “is one for the arbitrator,” especially
because the defendants “have made no argument as to why [the] presumption is or should be
overcome”); Dixon v. Wilora Lake Healthcare LLC, No. 3:17-00713, 2018 WL 792065, at *3
(W.D.N.C. Feb. 8, 2018) (“The Court . . . determines [d]efendants’ alleged failure to try in good
faith to resolve the dispute is a procedural question that rightly should be decided by an
arbitrator.”); Mike Rose’s Auto Body, Inc. v. Applied Underwriters Captive Risk Assurance Co.,
No. 16-1864, 2016 WL 5407898, at *10 (N.D. Cal. Sept. 28, 2016) (concluding that whether the
requirement to negotiate in good faith was a condition precedent to arbitration was a question for
the arbitrator to decide, and that whether such a condition precedent was satisfied was also for the
arbitrator to decide); Enter. Info. Mgmt, Inc. v. SuperLetter.com, Inc., No. 13-2131, 2013 WL
5964563, at * 8–9 (D. Md. Nov. 7, 2013) (finding that the clause requiring “negotiation” prior to
a referral to arbitration was a procedural precondition to arbitration that must be interpreted by the
arbitrator, not the court); U.S. ex rel. Alamo Envtl., Inc., v. Cape Envtl. Mgmt., Inc., No. 11-482,
2012 WL 6726571 at *7–8 (W.D. Okla. Dec. 27, 2012) (holding that an arbitrator must decide
whether the defendant had “satisfied or waived any procedural preconditions to arbitration,”
13
including the requirement that the parties seek to resolve their disputes through “good faith
negotiation” before engaging in arbitration or litigation). 6
6 Liberty does not address this authority in its opposition. It points to one case involving a
good faith negotiation provision, see Def.’s Opp. at 13–14, citing Local 743 Int’l Bhd. of Teamsters
v. Rush Univ. Med. Ctr., No. 15-2457, 2016 WL 7491812, at *2 (N.D. Il. Dec. 30, 2016), but it is
not binding on this Court, and it is distinguishable. In Local 743 International Brotherhood of
Teamsters v. Rush University Medical Center, the collective bargaining agreement at issue
provided that if any matters remained unresolved “after a reasonable period of good faith collective
bargaining and an impasse has been reached,” those matters must be “submitted by either party to
an impartial arbitrator.” 2016 WL 7491812, at *2. At one point, the defendant refused to bargain,
and the plaintiff filed suit to compel arbitration. Id.
The court first addressed the preliminary question of whether it had subject matter
jurisdiction over the case under Section 301 of the Labor Management Relations Act, which grants
jurisdiction over “[s]uits for violation of contracts between an employer and a labor organization
representing employees in an industry affecting commerce.” Id. at *3 (alteration in original),
quoting 29 U.S.C. § 185(a). The parties disputed whether they had even formed a valid contract,
id., but the court concluded that even if they had, the second amended complaint failed “to allege
a contract violation that require[d] arbitration.” Id. It observed that “any negotiations dispute
under the contract would need to reach impasse before the parties must submit their dispute to
arbitration.” Id. Because the union’s own second amended complaint alleged that the employer
was still willing to negotiate, the court determined that impasse had not been reached and the
parties were not yet required to arbitrate. Id. at *4.
Liberty argues that this Court should follow a similar approach and make its own
assessment of whether the case is ripe for arbitration. But in the Rush case, the court’s factual
analysis flowed from its legal determination that the particular agreement in question contained an
express provision excluding certain grievances from arbitration. See id. at *3–4. Not only did the
agreement require negotiation and reaching an impasse before labor issues could be arbitrated, but
it also provided that “disputes concerning the interpretation, application or violation” of the
agreement itself were subject to the obligation to go through that process prior to arbitration. Id.
at *4. Thus, the court found that “[t]he fact that the Agreement explicitly excludes from arbitration
those matters that have not reached an impasse overcomes the presumption of arbitration where
such a clause is otherwise ambiguous.” Id.
Here, Liberty has not pointed to an express provision that overcomes the presumption of
arbitration. Moreover, the Rush court did not explicitly evaluate whether the negotiation and
impasse provision was a procedural condition precedent or a substantive provision. By contrast,
a court in this district has observed that arbitration provisions requiring reaching a “deadlock” prior
to arbitration raise procedural questions for an arbitrator to decide. M.R.S. Enters., Inc. v. Sheet
Metal Workers’ Int’l Ass’n, Local 40, 429 F. Supp. 2d 72, 80 (D.D.C. 2006) (concluding that it
would “defer to the arbitration board’s decision regarding whether a deadlock was reached”
because “procedural questions . . . are presumptively not for the judge, but for the arbitrator[] to
decide”) (emphasis omitted), quoting Howsam, 537 U.S. at 84.
14
In an effort to avoid the application of these principles, defendant attempts to characterize
the good faith negotiation requirement in the MOU as a substantive limit on topics subject to
arbitration, instead of a procedural precondition to arbitration. See Def.’s Opp. at 15. According
to Liberty, the good faith negotiation provision establishes the “scope” of the parties’ agreement
to arbitrate: that is, the arbitration clause is limited to those reopener disputes that have been first
narrowed through the parties’ good faith bargaining efforts. Id. at 11. Thus, according to Liberty,
the presumption that a court must decide any questions related to the scope of an arbitration
provision applies in this case. Id. at 9–13.
But defendant cannot transform this issue into a question concerning arbitrability simply
by calling it one in a legal pleading. There is no dispute that the parties have agreed to arbitrate
wage reopener issues. And defendant has already admitted that the good faith negotiation
requirement is merely a “precondition” to arbitrating those issues. See, e.g., Def.’s Opp. at 15
(“[T]he good faith bargaining requirement is the essential precondition to the parties’ agreement
to arbitrate anything related to the reopener negotiations.”) (emphasis added); id. at 7 (“[T]he
Union has not satisfied the condition precedent to having an arbitrator decide the wages and
benefits Liberty Maritime will pay its employees.”); id. at 15 (“Here, the terms of the MOU
arbitration provision require the Union to have first engaged in good faith bargaining as the
condition precedent to interest arbitration . . . .”). Also, Liberty’s own characterization of the
contractual clause at issue shows that it falls well within the Supreme Court’s definition of a
procedural precondition.
As noted above, in BG Grp. PLC, the Supreme Court explained that a procedural condition
precedent to arbitration “determines when the contractual duty to arbitrate arises, not whether there
is a contractual duty to arbitrate at all.” BG Grp., 572 U.S. at 35 (emphasis in original). The Court
15
also noted that since the treaty provided that only an arbitral determination – and not any local
court decision – would be final and binding on the parties, the requirement to await a local court
ruling was a “purely procedural requirement – a claims processing rule that governs when the
arbitration may begin, but not whether it may occur or what its substantive outcome will be on the
issues in dispute.” Id. at 35–36. Similarly, here, defendant states in its opposition that in crafting
the arbitration provision, “the Union and Liberty Maritime exercised ‘their power to specify’ the
time at which ‘their obligation to arbitrate’ would arise, as well as the ‘clear condition’ that triggers
the obligation – namely, following bargaining in good faith.” Def.’s Opp. at 12 (emphasis added);
see id. at 15 (“The parties crafted the MOU arbitration provision to restrict arbitration to only the
circumstances where both parties first have bargained in good faith . . . .”) (emphasis added). And
the arbitration provision provides that “[t]he arbitrator’s decision will be final and binding on the
parties,” MOU § 3(g), which is a further indication of the procedural nature of the good faith
negotiation requirement. 7
7 The parties appear to dispute whether the good faith negotiation provision even qualifies
as a condition precedent to arbitration. See Pl.’s Mem. at 15 (“Contrary to Liberty’s suggestion,
good faith bargaining is not a precondition to proceeding to interest arbitration. Rather, it is merely
[a] term of the parties’ labor contract that is subject to interpretation by an arbitrator.”); Def.’s
Opp. at 7 (“[T]he Union has not satisfied the condition precedent to having an arbitrator decide
the wages and benefits Liberty Maritime will pay its employees.”); id. at 15 (“Here, the terms of
the MOU arbitration provision require the Union to have first engaged in good faith bargaining as
the condition precedent to interest arbitration . . . .”). This is also a question reserved for the
arbitrator. See Dialysis Access Ctr., 638 F.3d at 383 (assuming arguendo that the arbitration clause
established a condition precedent to arbitration, even though it was disputed between the parties,
and holding that the arbitrator must decide whether the parties complied with such a procedural
pre-requisite to arbitration); Mike Rose’s Auto Body, Inc., 2016 WL 5407898, at *10 (concluding
that whether the good faith negotiation provision was a “condition precedent” was “a matter of
contract interpretation for the arbitrator to decide” in addition to “whether a condition precedent
was in fact satisfied”).
16
Ultimately, defendant does not point to any evidence to indicate that the parties intended
to have a court, and not an arbitrator, determine whether the good faith negotiation requirement
has been satisfied. And there is no language in the Agreement “that might overcome the ordinary
assumption,” or that “demonstrates a contrary intent as to the delegation of decisional authority
between judges and arbitrators.” BG Grp., 572 U.S. at 36. Therefore, defendant has failed to rebut
the applicable presumption, and this issue must be submitted to an arbitrator. 8
8 The fact that the procedural and substantive issues involved in the parties’ dispute are
intertwined supplies another reason why they are best taken up together by an arbitrator. See John
Wiley, 376 U.S. at 557–59. In John Wiley, the Court first concluded that the arbitration provision
in the collective bargaining agreement survived the Wiley-Interscience merger so as to be
operative against Wiley. Id. at 546. Then, the Court had to determine whether the Court or an
arbitrator must decide whether the procedural prerequisites to arbitration had been met. Id. at 544,
555–58. The collective bargaining agreement provided for arbitration after a three-step grievance
procedure: the first two steps involved conferences between the employee, the union, the
employer, and other personnel of those entities, and the third step called for arbitration “in the
event that the grievance shall not have been resolved or settled” after the second step. Id. at 555–
56. The plaintiff argued that since the first two steps had not been followed, no duty to arbitrate
had arisen. Id.
The Court held that this question was best left for the arbitrator in order to avoid duplicative
efforts by courts and arbitrators. Id. at 558. It observed that “whether such procedures have been
followed or excused, or whether the excused failure to follow them avoids the duty to arbitrate
cannot ordinarily be answered without consideration of the merits of the dispute which is presented
for arbitration.” Id. at 557. The Court emphasized that “[i]t would be a curious rule which required
that intertwined issues of ‘substance’ and ‘procedure’ growing out of a single dispute and raising
the same questions on the same facts had to be carved up between two different forums, one
deciding after the other.” Id.
Liberty attempts to distinguish this case from the John Wiley decision on the grounds that
the policy considerations underlying the case are not implicated here. It argues that the parties did
not agree to arbitrate the issue of whether the parties have complied with the good faith negotiation
requirement, and that there is no need for an arbitrator to deal with this question because “there is
no overlap between the predicate good faith bargaining obligation and the ultimate merits of the
parties’ dispute.” Def.’s Opp. at 8–9, 11–12, 15–16. However, a decision concerning whether the
parties did indeed bargain in good faith may rest in part on evaluating the substance of the parties’
various proposals to one another, and this analysis bears on the merits of the dispute over the
appropriate wage and economic benefits to be negotiated under the collective bargaining
agreement. Thus, the reasoning underlying the John Wiley decision is equally applicable here.
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II. Plaintiff’s request for attorney’s fees will be denied.
In one sentence at the end of its memorandum, the union makes a very summary request
for attorneys’ fees and costs because Liberty forced it to “resort to litigation in order to enforce the
parties’ clear contractual arbitration provision.” Pl.’s Mem. at 15. However, MEBA does not
point to any legal authority in support of its entitlement to a fee award. Therefore, the Court will
deny the request. 9
CONCLUSION
For the foregoing reasons, the Court will grant plaintiff’s motion for judgment on the
pleadings and deny its request for attorneys’ fees.
A separate order will issue.
AMY BERMAN JACKSON
United States District Judge
DATE: September 14, 2018
9 The Agreement does not appear to contain a provision for the award of attorneys’ fees, and
the Labor Management Relations Act does not expressly authorize the award of attorneys’ fees.
See Nat’l Ass’n of Letter Carriers, AFL-CIO v. U.S. Postal Serv., 590 F.2d 1171, 1175 (D.C. Cir.
1978); Wash. Hosp. Ctr., 746 F.2d at 1509. A court may award attorneys’ fees where a case “was
in bad faith, vexatious, wanton or undertaken for oppressive reasons justifying the imposition of
attorney’s fees.” Wash. Hosp. Ctr., 746 F.2d at 1509, 1512 (awarding attorneys’ fees to the union
for the “vexatious” nature of the hospital’s arguments in support of its refusal to arbitrate because
the Supreme Court had “decided the exact issue,” and the hospital made no attempt to distinguish
its case from the facts of that case), citing Nat’l Ass’n of Letter Carriers, 590 F.2d at 1177.
“‘[V]exatious]’ means that the losing party’s actions were ‘frivolous, unreasonable, or without
foundation, even though not brought in subjective bad faith.’” Id., quoting Christiansburg
Garment Co. v. EEOC, 434 U.S. 412, 421 (1978). The fact that a party does not prevail before the
district court does not necessarily establish that its conduct was “vexatious” or “wanton.” Nat’l
Ass’n of Letter Carriers, 590 F.2d at 1178. And here, as in Nat’l Assn. of Letter Carriers, MEBA
has not come forward with evidence that would prompt the Court to exercise its discretion to
invoke the equitable authority of the Court to award attorneys’ fees.
18