Teamsters Local 177 v. United Parcel Service

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 19-3150
________________
TEAMSTERS LOCAL 177,
Appellant
v.
UNITED PARCEL SERVICE
________________
Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 2-19-cv-00726)
District Judge: Honorable Kevin McNulty
________________
Argued April 14, 2020
Before: AMBRO, JORDAN, and SHWARTZ, Circuit Judges
(Opinion filed July 16, 2020)
Edward H. O’Hare (Argued)
Raymond M. Baldino
Zazzali Fagella Nowak Kleinbaum & Friedman
570 Broad Street, Suite 1402
Newark, NJ 07102
Counsel for Appellant
Michael T. Bissinger
Michael H. Dell (Argued)
Day Pitney
One Jefferson Road
Parsippany, NJ 07054
Counsel for Appellee
________________
OPINION OF THE COURT
________________
AMBRO, Circuit Judge
We address how Article III standing principles apply in
proceedings to confirm arbitration awards under § 9 of the
Federal Arbitration Act (“FAA”). 9 U.S.C. § 9. Teamsters
Local Union No. 177 (“Local 177” or the “Union”) sought
confirmation of an arbitration award in its favor (the “Award”)
per § 9, which provides that a district court “must grant” a
confirmation order for an award upon application where the
award has not been “vacated, modified, or corrected” under
applicable provisions of the FAA. § 9. United Parcel Service,
Inc. (“UPS”), the loser in arbitration, opposed confirmation
and filed a cross-motion to dismiss, arguing that the District
Court did not have subject-matter jurisdiction because there
was no case or controversy as required by Article III of the
Constitution, given that UPS agreed to abide by the Award and
2
corrected any subsequent violations of it. The District Court
denied the Union’s motion to confirm and granted UPS’s
motion to dismiss on the ground that it lacked subject-matter
jurisdiction. It acknowledged a circuit split on whether a court
may confirm an award absent an active dispute.
We reverse and hold that the District Court had subject-
matter jurisdiction to confirm the Award even in the absence
of a new dispute about it. We agree with the Second Circuit
that “the confirmation of an arbitration award is a summary
proceeding that merely makes what is already a final
arbitration award a judgment of the court.” Florasynth, Inc. v.
Pickholz, 750 F.2d 171, 176 (2d Cir. 1984). Confirmation is
the process through which a party to arbitration completes the
award process under the FAA, as the award becomes a final
and enforceable judgment. See 9 U.S.C. § 13. The FAA not
only authorizes, but mandates, that district courts confirm
arbitration awards by converting them into enforceable
judgments through a summary proceeding.
I. FACTUAL AND PROCEDURAL BACKGROUND
UPS and the Union are parties to a collective bargaining
agreement (the “Agreement”). It was in effect from August 1,
2013 through July 31, 2018, and it governed the terms and
conditions of employment of bargaining unit employees,
including package car drivers who operate the ubiquitous
brown UPS trucks and provide delivery and pick-up services.
Local 177 represents more than 9,000 workers
employed at various UPS facilities in northern and central New
Jersey, and New York City and Orange County in New York.
Article 46, Section 3 of the Agreement groups areas of
principal responsibility. Drivers are assigned to particular UPS
buildings, called “home centers,” but may be assigned to other
3
buildings in other areas, subject to the restrictions of Section 2
of Article 46. That Article provides in relevant part:
SECTION 2
It is understood that employees may be assigned
in classification to work in their home center or
at places other than their home center, as follows:
(a.) Employees will be required to accept
assignments, within classification, when
ordered, anywhere within their area.
(b.) Any employee who refuses an assignment
out of his/her classification under the above
conditions will forfeit their rights to report pay.
SECTION 3
For the purposes of other assignments, the
following areas are applicable:
(1) Lakewood, Tinton Falls, Trenton
(2) Edison, Staten Island, Gould Avenue,
Meadowlands
(3) Parsippany, Bound Brook, Mt. Olive
(4) Chester, New Windsor
(5) Saddle Brook, Spring Valley.
J.A. 24. Section 3 is known as the “sister building” provision.
When drivers are assigned to work at a place outside their
home center, as permitted in Section 2, then Section 3 governs
where those drivers may be sent. The locations grouped in
4
subsections (1) through (5) represent those groupings, known
as “sisters.” For example, a Lakewood domiciled driver may
be assigned to work in the sister building in Tinton Falls or
Trenton. Forbidden, however, would be the assignment of a
Lakewood driver to Staten Island. These restrictions are the
product of negotiations spanning several decades.
Article 44 of the Agreement contains mandatory
grievance and arbitration procedures. It provides that if a
matter is brought to arbitration, the arbitrator has the authority
to decide the grievance, and that decision “shall be final and
binding on the parties and employees involved.” J.A. 17–18.
The Union filed two grievances, one in July 2014 and
the other in February 2015, respectively, alleging that UPS
violated Article 46. The July 2014 grievance alleged that New
Windsor drivers were improperly assigned to Spring Valley.
The February 2015 grievance alleged a Chester driver was also
improperly assigned to Spring Valley.
UPS denied the grievances, and the Union filed a
demand for arbitration. During the arbitration hearing, both
parties were represented by counsel and had the opportunity to
present testimony along with documentary evidence and to
make arguments. The Arbitrator sustained the grievances and
ordered UPS to “cease and desist assigning package car drivers
to work in buildings outside the areas designated in Article 46,
Section 3 of the parties’ . . . Agreement.” J.A. 47. UPS
“accept[ed] the Award,” and has never sought to challenge or
vacate it. J.A. 49.
The Union alleges, and UPS does not deny, that the
latter has subsequently violated the Award. In April 2018 it
did so by assigning a driver outside his contractually
designated area. Local 177 Secretary-Treasurer Chris
Eltzholtz informed UPS District Labor Manager Steve Radigan
5
of the violation. Eltzholtz later became aware of two more
violations. Radigan acknowledged them and assured Eltzholtz
that the situation was corrected and would not occur again. In
June 2018, Eltzholtz learned that UPS had nonetheless violated
the Award by assigning a driver to work outside a designated
area. He informed Radigan of the new violation. Eltzholtz
then traveled to a UPS facility in New Windsor, New York,
and personally witnessed UPS about to violate the Award yet
again by assigning a driver outside his assigned area. Eltzholtz
brought this to the attention of management, and it stopped the
violation from occurring. The Union ultimately obtained a
monetary settlement for these violations.
Thereafter, the Union moved for confirmation of the
Award under § 9 of the FAA, which provides in relevant part
that,
[i]f the parties in their agreement have agreed
that a judgment of the court shall be entered upon
the award made pursuant to the arbitration, and
shall specify the court, then at any time within
one year after the award is made any party to the
arbitration may apply to the court so specified for
an order confirming the award, and thereupon
the court must grant such an order unless the
award is vacated, modified, or corrected as
prescribed in sections 10 and 11 of this title.
9 U.S.C. § 9 (emphasis added). The Union argues that it
petitioned for confirmation in light of UPS’s repeated
violations and to preserve its rights in case of future violations.
UPS opposed the Union’s motion and filed a cross-motion to
dismiss, arguing that the District Court did not have
jurisdiction because confirmation requires a pending case or
controversy about the arbitration award, and no case or
controversy existed, as there were no ongoing violations.
6
In its decision, Teamsters Local Union No. 177 v.
United Parcel Servs., 409 F. Supp. 3d 285 (D.N.J. 2019), the
District Court acknowledged a circuit divide on whether a
court may confirm an award in a labor arbitration absent a then-
existing dispute about the arbitration award. Id. at 290. It
noted that the First Circuit has held that confirmation is not
proper without an active controversy, see Derwin v. Gen.
Dynamics Corp., 719 F.2d 484, 492–93 (1st Cir. 1983), while
the Second Circuit has held that a district court must confirm
an arbitration award if the statutory requirements are met even
absent a new dispute, see Zeiler v. Deitsch, 500 F.3d 157 (2d
Cir. 2007); see also Ottley v. Schwartzberg, 819 F.2d 373 (2d
Cir. 1987); Florasynth, 750 F.2d 171. When the District Court
followed Derwin, the Union appealed to us.
II. JURISDICTION
The District Court had statutory subject-matter
jurisdiction under § 301 of the Labor Management Relations
Act (“LMRA”), 29 U.S.C. § 185, along with the usual federal
question jurisdiction accorded by 28 U.S.C. § 1331.11
Section 9 of the FAA does not provide an independent
basis for subject-matter jurisdiction, see Moses H. Cone Mem’l
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25, n.32 (1983);
Goldman v. Citigroup Glob. Mkts. Inc., 834 F.3d 242, 255 (3d
Cir. 2016), but § 301 of the LMRA does, see Citgo Asphalt Ref.
Co. v. Paper, Allied-Indus., Chem. & Energy Workers Int’l
Union Local No. 2-991, 385 F.3d 809, 815 n.2 (3d Cir. 2004).
Even where a complaint does not expressly plead LMRA
claims, courts usually consider it to state a claim under § 301
if it pertains to violations of contracts between an employer and
a labor organization. See Allis–Chalmers Corp. v. Lueck, 471
7
That there is federal statutory and federal question
jurisdiction is clear. The harder question—the one before us
here—is whether there was a sufficient “case or controversy”
under Article III so as to confer jurisdiction on the District
Court.
We have appellate jurisdiction pursuant to 28 U.S.C.
§ 1291. We review de novo the District Court’s order granting
a motion to dismiss. Mayer v. Belichick, 605 F.3d 223, 229 (3d
Cir. 2010).
III. DISCUSSION
To repeat, UPS argues that the District Court lacked
subject-matter jurisdiction to confirm the arbitration award
under FAA § 9 because, post-Award, there was no longer a
“case or controversy,” which the Constitution’s Article III
requires.
A. Confirmation –– the Final Step and Remedy in
Arbitration
To establish that a “case or controversy” exists, a party
seeking relief must have, among other things, standing. In
legal jargon this requires that a plaintiff show “(1) an ‘injury in
fact,’ (2) a sufficient ‘causal connection between the injury and
the conduct complained of,’ and (3) a ‘likel[ihood]’ that the
injury ‘will be redressed by a favorable decision.’” Susan B.
Anthony List v. Driehaus, 573 U.S. 149, 157–58 (2014)
(quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61
(1992)). Think of standing as a stake in the outcome, and what
a court does can help a party claiming to be hurt. For example,
a plaintiff whose injuries have been fully remedied before
U.S. 202, 220 (1985); Berda v. CBS Inc., 881 F.2d 20, 21 n.1
(3d Cir. 1989).
8
seeking judicial relief cannot show a sufficient risk of
imminent injury, and thus lacks standing. Cf. Holmes v.
Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 136–37
(3d Cir. 2000) (holding that putative class representatives who
settled their claims through administrative means prior to filing
their complaint lacked standing). And Congress cannot by
statute grant courts jurisdiction where there is no case or
controversy. See Muskrat v. United States, 219 U.S. 346, 362–
63 (1911) (holding that Congress could not confer on federal
courts the ability to hear a matter if it lacked a “case or
controversy”).
The parties do not dispute that the causation and
redressability prongs of the standing analysis are satisfied; only
at issue is whether Local 177 was injured. UPS argues that,
because it has agreed to abide by the arbitration award and has
remedied any violations of it thus far, the case-or-controversy
requirement is not satisfied, as the Union has not suffered and
will not imminently suffer an injury.
We disagree. Under the FAA a party’s injuries are only
fully remedied by the entry of a confirmation order. The statute
“creates a body of federal substantive law establishing and
regulating the duty to honor an agreement to arbitrate . . . .”
Moses H. Cone Mem’l Hosp., 460 U.S. at 25 n.32. Congress
enacted the FAA to “reverse the longstanding judicial hostility
to arbitration agreements . . . , and to place arbitration
agreements upon the same footing as other contracts.” EEOC
v. Waffle House, Inc., 534 U.S. 279, 289 (2002) (citation and
internal quotation marks omitted). Once parties contract to
settle their disputes by arbitration, federal courts become
involved only in limited circumstances for limited purposes.
The FAA “authorizes district court involvement in the
arbitration process primarily in two ways.” John Hancock
Mut. Life Ins. Co. v. Olick, 151 F.3d 132, 136 (3d Cir. 1998).
9
The first is “when a party resists arbitration under an existing
arbitration clause.” Id. (citing 9 U.S.C. §§ 3, 4). Second,
“when enforcement of an arbitration award is sought[,] . . . the
statute authorizes the district court to confirm, vacate, or
modify the award under a narrow scope of judicial review.” Id.(citing 9 U.S.C. §§ 9–11); see also Isidor Paiewonsky Assoc.,
Inc. v. Sharp Prop. Inc., 998 F.2d 145, 154 n. 11 (3d Cir. 1993).
Specifically, the FAA provides in relevant part that a court,
save exceptions not before us, “must grant” a timely request
for an arbitration award. § 9.2 Once confirmed, an arbitration
award becomes a judgment of the court, entitled to “the same
force and effect, in all respects, as, and . . . subject to all the
provisions of law relating to, a judgment in [any other] action.”
§ 13.
Thus, barring any dispute whether the arbitration award
shall be vacated, modified, or corrected, it is confirmation
under § 9 that converts the award into a judgment of the court
and completes the arbitration process under the FAA
framework. This puts an award on the “same footing” as other
legally enforceable documents. Waffle House, 534 U.S. at 289.
Put another way, the dispute the parties went to arbitration to
resolve is “live” until the arbitration award is confirmed and
the parties have an enforceable judgment in hand. See, e.g.,
Ameriprise Bank, FSB v. PNC Bank, N.A., No. 12-cv-1113,
2012 WL 5906400, at *9 (W.D. Pa. Nov. 26, 2012) (holding
that “a federal court constrained by Article III may confirm an
award even in the absence of a new dispute involving the
award’s application or enforcement” because the “controversy
between the parties remains live until the arbitral award is
confirmed”); National Football League Players Assoc. v.
National Football League Mgmt. Council, No. 08-cv-3658,
2
The parties do not dispute that the Agreement includes
a provision for confirmation of the Award in court.
10
2009 WL 855946, at *3–4 (S.D.N.Y. Mar. 26, 2009) (holding
the district court had jurisdiction to confirm an arbitration
award absent a new dispute about the award and stating that
“[t]he real question is whether . . . the Court should impose a
new requirement that, in addition to the dispute which clearly
exists between the parties on [the underlying issue being
arbitrated], one of the parties must raise a new dispute in order
to have the arbitral award confirmed”).
The FAA explicitly requires that arbitration awards be
confirmed. What could be stronger than language that, upon
application, a district court “must grant [a confirmation] order”
unless the arbitration award is “vacated, modified, or
corrected.” § 9. The Supreme Court tells us that § 9 “carries
no hint of flexibility.” Hall Street Associates, LLC v. Mattel,
Inc., 552 U.S. 576, 587 (2008). “There is nothing malleable
about ‘must grant,’ which unequivocally tells courts to grant
confirmation in all cases, except when one of the ‘prescribed’
exceptions applies.” Id. (quoting § 9). The Court further noted
that § 9 “suggests that, so long as the parties contemplated
judicial enforcement, the court must undertake such
enforcement under the statutory criteria.” Id. at n.6.
We agree with the Second Circuit that “the confirmation
of an arbitration award is a summary proceeding that merely
makes what is already a final arbitration award a judgment of
the court.” Florasynth, 750 F.2d at 176 (citation omitted).
That Circuit has long held that district courts have jurisdiction
to confirm arbitration awards even in the absence of a new
dispute about them. In Florasynth, it reasoned that an “[a]n
examination of the underlying purposes of the arbitration
mechanism” supported this conclusion, as confirmation arms
the winning party of an arbitration “with a court order . . . [and]
a variety of remedies available to enforce the judgment.” 750
F.2d at 176; see also Zeiler, 500 F.3d at 169 (“Confirmation
. . . is a summary proceeding . . . , which is not intended to
11
involve complex factual determinations, other than a
determination of the limited statutory conditions for
confirmation or grounds for refusal to confirm. . . . At the
confirmation stage, the court is not required to consider the
subsequent question of compliance.”); Ottley, 819 F.2d at 377(“[A]ctions to confirm arbitration awards . . . are
straightforward proceedings in which no other claims are to be
adjudicated. . . . [I]n a confirmation proceeding, the court
properly may consider only the statutory bases for modifying
or vacating an award and challenges to the award’s clarity.”).
Confirming an arbitration award under § 9 is not to be
confused with litigating a dispute over the validity or accuracy
of that award under § 10 or § 11, or seeking later to enforce
that arbitration award where there is noncompliance. Section
9 expressly provides for confirmation in the absence of such
disputes. Once a court confirms an arbitration award and
makes it a judgment of the court, noncompliance with that
order is separately analyzed. See Am. Nursing Home v. Local
144, No. 89-cv-1704, 1992 WL 47553, at *2 (S.D.N.Y. Mar.
4, 1992) (“The issues of compliance and confirmation are
distinct . . . . [C]onfirmation of an arbitration award . . . is not
a novel inquest into the merits of the award or compliance with
it . . . .” (internal citation and quotation marks omitted)).
Without a confirmation order, the parties would essentially
have to relitigate the case via a suit to enforce the arbitration
award. But where there is such an order, and one of parties
violates it, the court applies the analysis as when one of its
orders is defied—it can penalize the non-complying party
through contempt proceedings or the issuance of injunctive
relief. Contempt proceedings and a trial over the underlying
dispute are clearly very different than the summary proceeding
provided for by § 9.
Thus, like the Second Circuit, we view the confirmation
of an arbitration award as the final step in arbitration
12
proceedings under the FAA where there is no dispute about the
validity or accuracy of that award under § 10 or § 11. As a
result, a party seeking to confirm an arbitration award
continues to have a live stake in the proceeding, and thus it has
standing to seek confirmation.3
3
We limit our holding to an award for equitable relief
and express no opinion as to whether a party that receives an
arbitration award for money damages has standing to confirm
the award in federal court after those damages are paid in full.
Additionally, we note that an alternative way of
understanding why confirmation of an arbitration award
satisfies the jurisdictional existing or imminent injury-in-fact
prong is to view confirmation as a statutory right created by the
FAA. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1545–49
(2016) (stating that the Fair Credit Reporting Act of 1970
created a statutory right to fair and accurate credit reporting,
and remanding for further assessment of whether the injury
was sufficiently particularized and concrete). Parties to
arbitration forgo litigation with the expectation that under the
FAA they will be able to obtain a judgment at the end of the
process under § 9. A party to arbitration suffers an injury when
he is denied the right to obtain confirmation, for it is the
judgment that makes the party whole and concludes the
arbitration process. Our case exemplifies this point. UPS has
recently and repeatedly violated the Award. And although it
states that it will comply and refrain from violating the Award
further, that promise does not have the force of a judgement.
If UPS violates the Award again, the Union may be forced to
relitigate the case. We need not engage in this separate
jurisdictional analysis, however, because the principle is well
established that district courts can preside over summary
13
B. Summary Proceedings and the District
Court’s Imprimatur
In the interest of further explaining the path forward, we
analogize the confirmation of arbitration awards to other
summary proceedings in which a district court enters orders
without the parties filing complaints and appearing before it to
litigate a matter in full. For example, courts enter investigatory
subpoenas ex parte without the filing of a formal complaint and
hold summary proceedings to enforce Securities and Exchange
Commission orders. See, e.g., S.E.C. v. McCarthy, 322 F.3d
650, 657 (9th Cir. 2003) (holding that Section 21(e) of the
Exchange Act of 1934 permits the use of summary proceedings
in district courts to enforce Commission orders); S.E.C. v.
Sprecher, 594 F.2d 317, 319–20 (2d Cir. 1979) (holding that
the Securities Act of 1933 authorizes district courts to order
enforcement of investigatory subpoenas on application by the
S.E.C. in a summary proceeding without the filing of
complaints by the Commission (citations omitted)).
The Supreme Court has held summary proceedings
permissible where expressly authorized by statute. See New
Hampshire Fire Ins. Co. v. Scanlon, 362 U.S. 404, 406–07
(1960). Confirmation of arbitration awards is also a summary
proceeding. And it is authorized by § 9 of the FAA. In
Scanlon, the Supreme Court explained that “[t]he very purpose
of summary . . . trials is to escape some or most of these trial
procedures.” Id. at 406. They may be “conducted without
formal pleadings, on short notice, without summons and
complaints, generally on affidavits, and sometimes even ex
parte.” Id; see also Continental Illinois Nat. Bank & Trust Co.
of Chicago v. Chicago, Rock Island & Pacific Railway Co.,
294 U.S. 648, 682 (1935) (holding that district court could
proceedings (such as entering consent decrees or confirming
arbitration awards) where there is statutory authorization.
14
preside over summary proceedings “without the formality in
respect of pleadings which is required in actions at law or suits
in equity”).
The summary proceeding perhaps most analogous to the
confirmation of arbitration awards is the entry of consent
decrees. They are orders or judgments that reflect the
settlement terms agreed by the parties and contain an
injunction. See United States v. ITT Cont’l Baking Co., 420
U.S. 223, 236 n.10 (1975) (stating that consent decrees “have
attributes both of contracts and of judicial decrees” and a “dual
character”); FTC v. Enforma Natural Prods., Inc., 362 F.3d
1204, 1218 (9th Cir. 2004) (“[A] consent decree is ‘no more
than a settlement that contains an injunction.’” (quoting In re
Masters Mates & Pilots Pension Plan & IRAP Litig., 957 F.2d
1020, 1025 (2d Cir. 1992))). District courts have the power to
enter consent decrees without first determining that a statutory
or constitutional violation has occurred. See Swift & Co. v.
United States, 276 U.S. 311, 327 (1928). Cf. Rufo v. Inmates
of Suffolk Cty. Jail, 502 U.S. 367, 389 (1992). They “must
spring from and serve to resolve a dispute within the court’s
subject-matter jurisdiction . . . . and must further the objectives
of the law upon which the complaint was based.” Local No.
93, Int’l Ass’n of Firefighters, AFL-CIO C.L.C. v. City of
Cleveland, 478 U.S. 501, 525 (1986) (citations omitted); see
also Sansom Committee by Cook v. Lynn, 735 F.2d 1535, 1538
(3d Cir. 1984) (stating that a district court has authority to enter
a consent decree “as long as [its] terms . . . come within the
general scope of the case made by the pleadings . . . [and] if the
pleadings state a claim over which a federal court has
jurisdiction.” (internal citations and quotation marks omitted)).
Here the FAA provides for confirmation proceedings to
be summary proceedings akin to the entry of consent decrees
by requiring that the parties “apply” for confirmation rather
than file a complaint. 9 U.S.C. § 9. “An ‘application’ is merely
15
a ‘motion,’” or a request for the court to make a particular
ruling or enter a particular order, and not a formal lawsuit or
“action.” McCarthy, 322 F.3d at 657 (citations omitted). This
distinction applies to the FAA with equal force, as the statute
specifically provides for an “application” for confirmation.
Moreover, courts do not resolve these applications for
relief using procedures for ordinary civil actions because the
FAA provides for applications to be made and heard as
motions rather than the filing of a complaint. 9 U.S.C. § 6(“Any application to the court hereunder shall be made and
heard in the manner provided by law for the making and
hearing of motions, except as otherwise . . . expressly provided
[in the FAA].” (emphasis added)); Fed. R. Civ. P. 81(a)(6)(B)
(providing that the Federal Rules of Civil Procedure apply only
to the extent procedures are not provided for under the FAA);
Champ v. Siegel Trading Co., Inc., 55 F.3d 269, 275–76 (7th
Cir. 1995) (stating that Rule 81 provides that the Federal Rules
apply only to the extent that matters of procedure are not
provided for under the FAA); Booth v. Hume Pub., Inc., 902
F.2d 925, 931 (11th Cir. 1990) (same). As the FAA expressly
provides for an “application” for confirmation, does not
instruct parties to file a complaint, and does not instruct the
district court to carry on a formal judicial proceeding, § 9
indeed calls for a summary proceeding.4
4
Whether a proceeding is “summary” in nature, of
course, does not address how Article III’s standing limitations
apply to that proceeding. Its summary nature defines only the
procedures employed for motion practice, discovery, and so
forth; it does not address whether the proceeding requires a live
case or controversy in order to proceed. Nevertheless, for the
reasons stated in this opinion, we hold that Local 177
demonstrated a live controversy here.
16
Accordingly, we hold that the District Court had
jurisdiction to confirm the Award under § 9 of the FAA even
in the absence of a new dispute about its terms because the
underlying dispute between the parties remains live until entry
of that order. Confirmation is the final step of the FAA’s
arbitration process. By a truncated summary proceeding, the
FAA directs district courts to give their imprimatur to
arbitration awards by converting them into enforceable
judgments of the court.
C. The Illogical Consequences of Requiring a
New Dispute Before Confirmation
We also note the practical absurdity and harmful
consequences of holding that district courts cannot confirm
arbitration awards in the absence of a new dispute. First, if we
allow UPS to challenge confirmation of the arbitration award
at this stage, we would be allowing it to upend and undermine
the statutory scheme of the FAA. That scheme expressly gives
more time to the parties to move for confirmation than to
dispute the award. While the statute of limitations for
confirmation of arbitration awards under the FAA is one year,
9 U.S.C. § 9, the time for moving to vacate or modify the award
is three months, see § 12. If the party seeking confirmation
makes its application after that three-month period elapses,
then the opposing party cannot, as a matter of law, assert a §
10 or § 11 ground for vacating, modifying or correcting an
award, even as affirmative defenses to the application to
confirm. See Florasynth, 750 F.2d at 175. UPS is effectively
challenging the arbitration award well outside the three-month
statute of limitations.
Second, requiring a new dispute about the arbitration
award would allow, or even incentivize, the party that lost at
arbitration to defeat confirmation simply by claiming it agrees
to abide by the Award. In the worst-case scenario, the losing
17
party could wait until after the statute of limitations to confirm
an award has run to start violating it, and the winning party
would be left to relitigate the case. That UPS says it will stop
moving employees outside of their home centers does not mean
there was no injury to the Union’s members who were moved
when the Award was violated previously, and it does not mean
that the Union does not have a right to seek compliance with
the Award in the future. UPS cannot “defeat or frustrate
confirmation simply by claiming acquiescence with the
[A]ward[,]” and Local 177 is “entitled to obtain judicial
confirmation in order to protect its rights under the award . . .
.” National Football League Players Assoc., 2009 WL
855946, at *3.
D. Parting With First Circuit Precedent
In light of these considerations, we are not persuaded by
the approach taken by the First Circuit in Derwin, 719 F.2d
484, and adopted by the District Court. In Derwin,
representatives of a union sought confirmation of an arbitration
award issued under a collective bargaining agreement between
the union and a corporate employer. The former did not allege
any instances where the employer refused to abide by the
award. Rather, it relied on the language of the applicable state
statute, which, like the FAA, provided for a right to
confirmation when no party had challenged the award within
30 days after issuance of it. Id. at 486. Derwin held that
confirmation was “unwarranted,” and noted that
[t]he union’s application for confirmation—
unlike the usual complaint seeking confirmation
of an arbitrator’s award—does not seek
resolution of a concrete dispute between the
parties. The union does not allege that the
company has repudiated or violated the award in
some particular calling for judicial resolution.
18
No relief involving specific enforcement of the
. . . award is requested.
Id. The Court declined to “put its imprimatur upon an arbitral
award in a vacuum” and dismissed the action to confirm it. Id.at 491–93. It reasoned that judicial economy counseled against
the entry of a confirmatory award, and that a more economical
approach was to require that confirmation petitions allege an
actual violation or other dispute entitling the party to some
relief. Id. at 492.
However, the First Circuit did not consider the
mandatory language of the FAA, it did not consider whether
an arbitration dispute was ongoing until confirmation of the
arbitration award, and, puzzlingly, it considered instead how
the limitations period in the state statute affected its
jurisdiction. It reasoned that because in the case before it the
time to sue was either six or twenty years, the union would
have plenty of time to seek to enforce the award if a dispute
arose. Recognizing the need for confirmation under certain
circumstances, the Court nonetheless allowed that there would
be a “most compelling basis” for confirmation even without a
pending dispute in some instances:
If there were a strict limitations period for actions
to confirm, one could reasonably argue that, even
in the absence of any current dispute over an
award’s effort, a party should be entitled to
obtain judicial confirmation in order to protect its
rights under the award from lapse due to the
passage of time.
Id. The Court did not explain why the statute of limitations
would affect whether it has jurisdiction to hear the case.
19
The District Court here followed the First Circuit and
specifically relied on the latter’s statute-of-limitations
reasoning. In its analysis the District Court held that “two
potentially dispositive factors” emerged from the case law:
“(1) whether there is an ongoing dispute over the terms or
enforcement of the award; and (2) whether there is a realistic
probability that the employer can wait out the limitations
period and violate the arbitration award when it is too late for
the union to obtain judicial relief.” United Parcel Servs., 409
F. Supp. 3d at 293. It acknowledged that if a one-year statute
of limitations applied, like in the FAA, there would “surely be
a realistic possibility that UPS could violate the order after it
was too late for the Union to seek judicial confirmation.” Id.
at 294. Yet the Court, relying on Derwin, applied the longer
six-year statute of limitation under New Jersey law, and
determined that such a period would give the Union “plenty of
time to bring an action to confirm the award should a problem
arise.” Id.
Neither the First Circuit nor the District Court here
explained, however, how the ability of the winning party in an
arbitration to file suit later has any bearing on the existence of
a “case or controversy.” Both ignored that statutes of
limitations and a court’s power to hear a case are separate
questions. Accordingly, we decline to follow the First
Circuit’s holding that a new dispute is required before an
arbitration award can be confirmed, and we reverse the
judgment of the District Court.
We remand with instruction for the Court to confirm the
Award unless the statutory grounds for rejecting it are satisfied.
20