Cuna Mutual Insur v. Int'l Union 39

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 05-1021 & 05-1226
CUNA MUTUAL INSURANCE SOCIETY,
Plaintiff-Appellant,
v.
OFFICE AND PROFESSIONAL EMPLOYEES
INTERNATIONAL UNION, LOCAL 39,
Defendant-Appellee.
____________
Appeals from the United States District Court
for the Western District of Wisconsin.
No. 04 C 0138—Barbara B. Crabb, Chief Judge.
____________
ARGUED SEPTEMBER 20, 2005—DECIDED MARCH 16, 2006
____________
Before CUDAHY, KANNE, and ROVNER, Circuit Judges.
CUDAHY, Circuit Judge. The appellant CUNA Mutual
Insurance Society (CUNA) brought an action in the dis-
trict court to vacate part of an arbitration award in which
the arbitrator determined that CUNA had violated its
collective bargaining agreement (CBA) with the appellee
Office and Professional Employees International Union,
Local 39 (Local 39). The parties agreed to have the mat-
ter decided on cross-motions for summary judgment. After
the parties filed their cross-motions and responses, Local 39
filed a motion for Rule 11 sanctions against CUNA. The
district court denied CUNA’s motion for summary judg-
2 Nos. 05-1021 & 05-1226
ment, granted Local 39’s motion for summary judgment and
granted Local 39’s motion for sanctions under Rule 11.
CUNA now appeals only the portion of the district court’s
award that granted Local 39’s motion for Rule 11 sanctions.
For the following reasons, we affirm the judgment of the
district court.
I. Background
The plaintiff CUNA and the defendant Local 39 were
parties to a CBA covering roughly 1400 CUNA employees,
including about 150 who worked in a support services
division providing housekeeping, cafeteria services and
other maintenance services. The present case arose under
this CBA, which became effective April 1, 2001 and expired
on March 31, 2004. The plaintiff CUNA underwrites,
markets and administers insurance and financial products
for credit unions and their members. The defendant Local
39, a labor union, represents roughly 1,430 people employed
by the plaintiff in Madison, Wisconsin.
Article XIX of the governing CBA details a procedure for
grievance resolution. According to Article XIX, all griev-
ances had to be put in writing and had to articulate the
nature of the dispute, the relief sought and the specific
article and section of the agreement alleged to be vio-
lated. The procedure required several steps to be taken to
resolve the grievance before it went to arbitration. If the
attempts at resolution were unsuccessful, either party could
appeal the grievance to arbitration. Article XIX, Section 4
of the CBA states, “[t]he suggested relief and the article and
section cited shall be considered a formal framing of the
issue or remedy if the issue is arbitrated.”
The procedure for selecting an arbitrator is set out in
Article XIX, Section 5 of the CBA. This Section states that
the “decision of the arbitrator shall be final and binding
upon the Employer, the Union and the Employee(s) present-
Nos. 05-1021 & 05-1226 3
ing the grievance.” Additionally, “the arbitrator shall not
change, but shall interpret only, the terms of
this Agreement.”
A. Grievance Filing
On July 18, 2002, CUNA advised Local 39 of its intent
to outsource twenty-two housekeeping jobs and three
other positions as a cost-saving measure. Local 39 proposed
alternative methods of cost saving that did not involve
outsourcing work, but these were rejected. On August 20,
2002, Local 39 filed a grievance regarding layoffs that were
impending. The grievance read, in relevant part:
The Employer is implementing a layoff resulting
in a reduction of the bargaining unit of up to 25 em-
ployees without showing such reduction is ‘necessary’ in
accordance with Article XX, Section 1. . . . This griev-
ance is also subject to any other contract violations
determined after the investigation or grievance process
begins.
The grievance did not mention any article or section of the
agreement other than Sections 1 and 2 of Article XX.
On August 30, CUNA issued layoff notices to roughly
twenty-two housekeeping or janitorial employees working in
the support services department. CUNA cited the partial
outsourcing of certain housekeeping or janitorial operations
to independent contractors as the reason for the layoffs.
B. Arbitration
Local 39 appealed the grievance to arbitration and a
hearing was held on October 28, 2003. The arbitrator
conducted a one-day hearing and subsequently issued a
written decision on February 26, 2004. The arbitrator
identified two main issues for resolution based on the
4 Nos. 05-1021 & 05-1226
arguments of the parties: “(1) Whether the issue of the
propriety of the Company’s outsourcing of certain bargain-
ing unit work in September 2002 is arbitrable”; and “(2)
Whether, if the issue is arbitrable, the Company vio-
lated the parties’ collective bargaining agreement when it
outsourced that bargaining unit work and, if so, what is the
appropriate remedy.”
CUNA argued that the arbitrator did not have jurisdiction
to address any outsourcing challenge because: “(1) the
agreement required that a written grievance refer to the
specific article and section allegedly violated; (2) the
grievance in this dispute referred to Sections 1 and 2 of
Article XX, which dealt exclusively with layoffs; and (3)
Article XX did not prohibit outsourcing and was not con-
cerned with the underlying causes of layoffs.” CUNA
further argued that the agreement was silent regarding the
plaintiff’s ability to outsource work. CUNA participated in
the remainder of the arbitration, but did not waive its
position that the arbitrator lacked the authority to rule on
whether its outsourcing violated labor contract provisions
not cited in the written grievance.
On February 26, 2004, Arbitrator Cohen issued a writ-
ten decision on the issues. He first found that the case
was properly before him. He noted that Article XX re-
quires that any “lesser reduction” (i.e. less than fifty
employees) of the bargaining unit be “necessary.” To
interpret “necessary,” he found that the plaintiff had to
show that there was a legitimate reason to justify the
layoffs. He determined that the question whether
outsourcing constituted a legitimate reason to justify the
layoffs is necessarily encompassed in the grievance, and
thus he had authority to rule on the outsourcing issue. He
then ruled on the other issues. He found that CUNA’s
layoffs violated the layoff procedure, and also that the
underlying outsourcing violated several provisions of the
CBA.
Nos. 05-1021 & 05-1226 5
Arbitrator Cohen ultimately sustained the grievance
and directed, as a remedy, that the work be restored to
the bargaining unit. He also directed the parties to attempt
to resolve, themselves, whether employees suffered lost
wages and benefits, and if so, whether and how much they
should be compensated. He retained jurisdiction of this
issue so that he could step in “to resolve any controversy”
regarding implementation of the award.
Of note is an earlier arbitration award of November 23,
2002. In that case, Arbitrator Herbert Berman issued an
arbitration award involving the same parties, in which he
interpreted Article XIX, Section 5, of the contract as
prohibiting the resolution of an issue not expressly raised
in the grievance. This decision was never brought to
Arbitrator Cohen’s attention.
C. District Court Action
In March 2004, CUNA brought an action in the Western
District of Wisconsin to vacate the arbitration award in
part. CUNA’s lawsuit sought to vacate the portion of the
award that held that the Company’s outsourcing vio-
lates provisions of the CBA. It also sought to vacate the
arbitration award’s remedial provisions which advised the
parties to privately resolve the issue of damages for affected
employees. CUNA did not challenge the Arbitrator’s ruling
that the layoffs implemented by CUNA violated layoff
procedures. The parties agreed to have the matter decided
in the district court on cross-motions for summary judg-
ment. Both parties filed cross-motions for summary judg-
ment and responses to cross-motions for summary judg-
ment. Local 39 also filed a motion for Rule 11 sanctions
against CUNA, and separate briefing was provided on this
issue.
On November 30, 2004, the district court entered an
opinion and order denying CUNA’s motion for summary
6 Nos. 05-1021 & 05-1226
judgment and granting Local 39’s motion for summary
judgment and its motion for sanctions against CUNA under
Rule 11. The district court awarded Local 39 attorneys’ fees
totaling $9,132.50 in a January 10, 2005 order based on the
Rule 11 violation.
Here, CUNA appeals only the portion of the district
court’s award that granted Local 39’s motion for Rule 11
sanctions. CUNA’s appeal of the November 30, 2004 opinion
and order (with respect to the award of Rule 11 sanctions)
was instituted on December 20, 2004. CUNA’s appeal of the
January 14, 2005 entry of judgment (with respect to the
award of Rule 11 sanctions) was instituted on January 26,
2005. This Court consolidated these appeals by order on
February 2, 2005.
II. Discussion
We review a district court’s decision to impose Rule 11
sanctions using an abuse of discretion standard. Cooter &
Gell v. Martmarz Corp., 496 U.S. 384, 405 (1990); Corley v.
Rosewood Care Center Inc. of Peoria, 388 F.3d 990, 1013-14
(7th Cir. 2004) (“Because the district courts have the best
information about the patterns of their cases, they are in
the best position to determine whether a legal position is
far enough off the mark to be frivolous or whether an
attorney conducted an adequate inquiry under the particu-
lar circumstances of a case.”); Mars Steel Corp v. Continen-
tal Bank N.A., 880 F.2d 928, 933 (7th Cir. 1989) (en banc).
Under Rule 11, the district court may impose sanctions if
a lawsuit is “not well grounded in fact and is not warranted
by existing law or a good faith argument for the extension,
modification, or reversal of existing law.” National Wrecking
Co. v. Int’l Brotherhood of Teamsters, Local 731, 990 F.2d
957, 963 (7th Cir. 1993). The court must “undertake an
objective inquiry into whether the party or his counsel
Nos. 05-1021 & 05-1226 7
should have known that his position is groundless.” Id.,quoting CNPA v. Chicago Web Printing Pressmen’s Union
No. 7, 821 F.2d 390, 397 (7th Cir. 1987) (citations omitted).
Rule 11(c) of the Federal Rules of Civil Procedure allows
courts to impose sanctions on a party if the requirements of
Rule 11(b) are not met. Rule 11(b)(2) requires that “the
claims, defenses, and other legal contentions [of filings] are
warranted by existing law or by a nonfrivolous argument
for the extension, modification, or reversal of existing law
or the establishment of new law.”
Not only do we have to consider the general Rule 11
sanction principles in this case, but we must also con-
sider the long line of Seventh Circuit cases that have
discouraged parties from challenging arbitration awards
and have upheld Rule 11 sanctions in cases where the
challenge to the award was substantially without merit.
See, e.g., Bailey v. Bicknell Minerals, Inc., 819 F.2d 690, 691
(7th Cir. 1987); Hill v. Norfolk and Western Ry., 814 F.2d
1192 (7th Cir. 1987); Machinists & Aerospace Workers v.
Clearing, 807 F.2d 618 (7th Cir. 1986); Dreis & Krump
Manufacturing Co. v. Int’l Assoc. Machinists District 8, 802
F.2d 247, 255-56 (7th Cir. 1986). In Dreis & Krump Manu-
facturing Co., 802 F.2d at 255-56 this Court said:
A company dissatisfied with the decisions of labor
arbitrators need not include an arbitration clause in its
collective bargaining contracts, but having agreed to
include such a clause it will not be permitted to nullify
the advantages to the union by spinning out the arbi-
tral process unconscionably through the filing of
meritless suits and appeals. For such conduct the law
authorizes sanctions that this court will not hesitate
to impose. Mounting federal caseloads and growing
public dissatisfaction with the costs and delays of
litigation have made it imperative that the federal
courts impose sanctions on persons and firms that
8 Nos. 05-1021 & 05-1226
abuse their right of access to these courts. . . . Lawyers
practicing in the Seventh Circuit, take heed!
The precedent is clear and emphatic and directs us to
uphold sanctions in a broad spectrum of arbitration cases.
The “filing of meritless suits and appeals” in arbitration
cases warrants Rule 11 sanctions. We are thus compelled to
uphold the lower court’s award of sanctions against CUNA.
We find that CUNA’s claims were meritless and were very
unlikely to succeed in the lower court based on the straight-
forward case law relevant to these claims.
A. Arbitrability Issue
CUNA’s ability to avoid Rule 11 sanctions is difficult not
only because of the deferential standard by which we
evaluate a district court’s award of such sanctions, but
also because both our court and the Supreme Court have
held that judicial review of arbitration awards is limited.
See Baravati v. Josephthal, Lyon & Ross, Inc., 28 F.3d 704,
706 (7th Cir. 1994) (“Judicial review of arbitration awards
is tightly limited; perhaps it ought not be called ‘review’
at all.”). A court must uphold an arbitrator’s decision
as long as it “draws its essence from the collective bargain-
ing agreement” and is not merely the arbitrator’s “own
brand of industrial justice.” United Paper Workers Int’l
Union et al. v. Misco, 484 U.S. 29, 36 (1987), quoting
Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593,
596 (1960). An award does not draw its essence from the
collective bargaining agreement “only when the arbitrator
must have based his award on some body of thought, or
feeling, or policy, or law that is outside the contract.” Arch
of Illinois v. District 12, United Mine Workers of America, 85
F.3d 1289, 1292 (7th Cir. 1996), quoting Polk Bros v.
Chicago Truck Drivers Union, 973 F.2d 593, 597 (7th Cir.
1992). An arbitrator may, however, look to sources other
than the CBA for guidance. Anheuser-Busch, Inc. v. Beer,
Nos. 05-1021 & 05-1226 9
Soft Drink Local Union No. 744, 280 F.3d 1133, 1137 (7th
Cir. 2002) (quoting Tootsie Roll Indus., Inc. v. Local Union
#1, 832 F.2d 81 (7th Cir. 1987)).
This court has ruled that it is not our job to decide if an
arbitrator erred in interpreting a labor contract, even if the
error was significant. Instead, we will only determine if the
arbitrator did indeed interpret the contract. Hill v. Norfolk
& Wesleyan Railway Co., 814 F.2d 1192, 1195 (7th Cir.
1987). Thus, a petitioner will not prevail unless he can
prove that “there is no possible interpretive route to the
[arbitrator’s] award, so a non-contractual basis can be
inferred.” Arch of Illinois, 85 F.3d at 1293-94, quoting
Chicago Typographical Union No. 16 v. Chicago Sun-Times,
Inc., 935 F.2d 1501, 1506 (7th Cir. 1991).
Here, the interpretive route is easy to follow. CUNA
argues that Arbitrator Cohen exceeded his authority by
finding that CUNA’s outsourcing violated contractual
provisions because his ruling considered provisions of the
CBA other than those cited by Local 39 in its grievance.
However, Arbitrator’s Cohen’s decision to consider the
outsourcing issue is reasonable and clearly “draws its
essence from the collective bargaining agreement,” and is
not merely Arbitrator Cohen’s “own brand of industrial
justice.” United Paper Workers Int’l Union et al., 484 U.S. at
36. Arbitrator Cohen found that because Local 39 alleged in
the grievance that CUNA failed to show that the layoffs
were necessary, he had to examine CUNA’s reason underly-
ing the layoffs to determine whether or not the layoffs were
necessary. Since the plaintiff claimed the layoffs were
necessary due to outsourcing, outsourcing was within the
scope of what Arbitrator Cohen had to address to deal
thoroughly with the grievance. There was no provision in
the articles cited in the grievance that specifically endorsed
outsourcing. Thus, Cohen looked to other articles in the
CBA.
10 Nos. 05-1021 & 05-1226
This reasoning fits within the guidelines of the provi-
sion in question, the scope of authority provision in Article
XIX, Section 4 of the CBA. The layoffs did constitute the
formal framing of the issue, but since the necessity of the
layoffs was also at issue per the grievance, and outsourcing
was cited by CUNA as the reason the layoffs were neces-
sary, outsourcing was necessarily at issue as well. Nothing
in the CBA said that an arbitrator could not consider
other parts of the agreement. The CBA simply said that
all considerations must relate to what was in the grievance,
and here they did so relate. In other words, the layoffs (and
their necessity) constituted the “formal framing” of the
issue being arbitrated, but since outsourcing was related to
the necessity of the layoffs, the arbitrator was able to
address outsourcing as well.
Because Arbitrator Cohen’s interpretive route was easy to
follow and the case law upholding the deferential treatment
courts accord arbitration awards is clear, extensive, and
readily available, the district court’s decision to apply Rule
11 sanctions to CUNA was proper.
CUNA attempts to sidestep the deferential standard
under which arbitration awards are reviewed and to
justify its challenge to the arbitration award, by arguing
that it was not challenging Arbitrator Cohen’s interpreta-
tion of the CBA, but instead whether the issue of its
subcontracting was arbitrable. A question of arbitrability,
as opposed to an interpretation of a CBA, is “undeniably an
issue for judicial determination. Unless the parties clearly
and unmistakably provide otherwise, the question of
whether the parties agreed to arbitrate is to be decided by
the court, not the arbitrator.” AT&T Technologies v.
Communications Workers, 475 U.S. 643, 649 (1986). Thus,
if there were a true question of arbitrability, our analysis
Nos. 05-1021 & 05-1226 11
might be different.1
However, we agree with the district court that there
was not a true question of arbitrability in this case. Instead,
CUNA “dresses up its arguments about the scope of the
arbitrator’s authority in arbitrability clothing.” CUNA
Mutual Insurance Society v. Office and Professional Employ-
ees International Union, Local 39, 2004 U.S. Dist. LEXIS
24120, at *15 (W.D. Wis. Nov. 29, 2004). CUNA’s argument
that the clause in question is an arbitration clause is, to put
it mildly, stretching a point. The provision at issue, Article
XIX, Section 4 of the CBA, reads, “the article and section
cited [in the grievance] shall be considered a formal framing
of the issue or remedy if the issue is arbitrated.” CUNA
argues that the above language results in a case-by-case
substantive limit on disputes that can be submitted to
arbitration. Thus, CUNA reasons, because Local 39’s
grievance did not mention subcontracting, but instead
1
We note that even if there was a question of arbitrability in this
case, Rule 11 sanctions may still apply. The Supreme Court held,
“where the contract contains an arbitration clause, there is a
presumption of arbitrability in the sense that ‘[an] order
to arbitrate the particular grievance should not be denied unless it
may be said with positive assurance that the arbitration clause is
not susceptible of an interpretation that covers the asserted
dispute. Doubts should be resolved in favor of coverage.” AT&T
Technologies Inc. v. Communications Workers of America et al.,
475 U.S. 643, 650 (1986), quoting Steelworkers v. Warrior & Gulf
Navigation Co., 363 U.S. 574, 582-83 (1960). Here, it would be
difficult to argue with “positive assurance” that the provision of
the CBA at issue is not susceptible to an interpretation that
covers the asserted dispute. The provision does not state that
arbitrating the subcontracting issue is prohibited. It merely states
that the article and section cited in the grievance should be the
“formal framing” of the issue or remedy. In other words, the
article and section cited need only provide an orderly outline of
the issue.
12 Nos. 05-1021 & 05-1226
mentioned only layoffs, Article XIX, Section 4 prevented the
arbitrator from reaching the subcontracting issue and it
was not arbitrable. But CUNA’s interpretation of the
language of this provision is erroneous.
The final part of the clause, “if the issue is arbitrated,”
implies that the clause in question applies to issues that
have already been designated as arbitrable. Additionally,
true arbitrability clauses tend to use language that excludes
specific subject matters from arbitration. Here, the provi-
sion only defines the scope of the arbitrator’s inquiry; it
does not impose a substantive limit on what is to be arbi-
trated. This scope is open to interpretation by
the arbitrator, and as we have discussed above, Ar-
bitrator Cohen’s interpretive route was reasonable and easy
to follow.
Case law supports the above reasoning and not that of
CUNA. In Dreis & Krump Manufacturing Co. v. Int’l Assoc.
of Machinists, 802 F.2d 247, 253 (7th Cir. 1986) an em-
ployer argued that even though there was no express
language in the agreement that limited subcontracting, the
management rights clause of the contract allowed the
company to subcontract and precluded the issue from
arbitration. Like the present case, the company argued that
a clause that did not specifically address subcontracting
(the management rights clause) nonetheless
made subcontracting non-arbitrable. However, the court
found the issue was really one of interpretation of the
agreement and not one of arbitrability, stating “[a]ll the
company is left with is a disagreement with the arbitrator
over the precise meaning of the agreement in the circum-
stances of the present case.” Id. at 253. The court then
applied the deferential standard of review used in arbitra-
tion cases which involve CBA interpretations and found
against the employer, ruling that Rule 11 sanctions in the
form of attorneys’ fees should apply.
Nos. 05-1021 & 05-1226 13
CUNA argues Dreis can be distinguished from the present
case because, unlike the company in Dreis, CUNA raised its
arbitrability objection prior to the hearing and therefore
preserved judicial review. This argument involves a hasty
reading of Dreis. The court there explicitly rejected this
argument, stating that even assuming arguendo the
employer had timely challenged the arbitrability of the
dispute, “the management rights clause does not so clearly
withdraw the subject of subcontracting from the scope of the
arbitration clause as to deprive the arbitrator of jurisdic-
tion.” Dreis, 802 F.3d at 252-53. Thus, a thorough reading
of Dreis should have provided CUNA with further evidence
that a challenge to the Arbitrator Cohen’s decision would
fail.
CUNA’s strongest argument regarding arbitrability is
that in 2002, a different arbitrator issued an arbitration
award involving the same parties, but with respect to a
different issue. This arbitrator interpreted Article XIX,
Section 5 of the agreement (the clause at issue here) as
prohibiting the resolution of an issue not expressly raised
in the grievance. CUNA reasons that based on this decision,
it had reason to believe that Cohen exceeded his authority
by arbitrating the subcontracting issue. However, the
precise circumstances and facts surrounding the earlier
grievance were presumably different. More significantly, we
have held that it does not matter if an arbitrator’s interpre-
tation of a CBA is flawed, just so long as it is an interpreta-
tion. See, e.g., E.I. DuPont de Nemours & Co. v. Grasselli
Employees Independent Ass’n of East Chicago, Inc., 790 F.2d
611, 614 (7th Cir. 1986) (“[T]he judiciary has no power to
reach and determine the merits of arbitration awards
merely because of disagreement, even strong disagreement,
with the arbitrator’s interpretation of the contract. As here,
so long as the arbitrator interpreted the contract in making
his award, his award must be affirmed even if he clearly
misinterpreted the contract.”). Even if one arbitrator
14 Nos. 05-1021 & 05-1226
interpreted the agreement one way, and a different arbitra-
tor interpreted the agreement another way, we need not
decide which interpretation is correct. Case law could not be
more clear: courts should not overrule an arbitrator’s
interpretation of an arbitration agreement unless “there is
no possible interpretive route to the [arbitrator’s] award, so
a non-contractual basis can be inferred.” Arch of Illinois v.
District 12, United Mine Workers of America, 85 F.3d 1289,
1293-94 (7th Cir. 1996), quoting Chicago Typographical
Union No. 16 v. Chicago Sun-Times, Inc., 935 F.2d 1501,
1506 (7th Cir. 1991).
B. Retention of Jurisdiction
In the district court, CUNA argued that Arbitrator Cohen
erred by retaining jurisdiction to address damages issues.
CUNA did not raise this issue here. However, Local 39
raised it in its brief, and it contributed to the district court’s
decision to impose Rule 11 sanctions of CUNA. Thus, we
will give it brief attention.
After directing that work be restored to the bargaining
unit and tentatively awarding the affected employees lost
wages and benefits, Arbitrator Cohen noted that the parties
disputed whether the affected employees had in fact lost
any wages and benefits, and that the record regarding
damages was not developed. He therefore directed the
parties to try to resolve the issues themselves, but he
retained jurisdiction so that he could settle disputes
regarding the implementation of his award.
The functus officio doctrine holds that “after a final
decision by an arbitrator, the arbitrator becomes functus
officio and lacks the power to reconsider or amend the
decision.” Anderson v. Norfolk & Western Ry. Co., 773 F.2d
880, 883 (7th Cir. 1985), quoting A/S Siljestad v. Hideca
Trading, Inc., 541 F.Supp. 58, 61 (S.D.N.Y 1981), aff’d, 678
Nos. 05-1021 & 05-1226 15
F.2d 391 (2d Cir. 1982) (per curiam). However, the present
case falls within the “clarification-completion” exception to
the functus officio doctrine, which allows arbitrators to
clarify an award already made. In Glass, Molders, Pottery,
Plastics & Allied Workers Int’l Union, Local 182B v. Excel-
sior Foundry Co., 56 F.3d 844 (7th Cir. 1995) this court
rejected a company’s argument that clarification of an
award was forbidden by the functus officio doctrine after the
arbitrator had issued his opinion and award. Additionally,
there is an abundance of case law in both this circuit and
other circuits that recognizes the propriety of an arbitrator
retaining jurisdiction over the remedy portion of an award.
See, e.g., Dreis & Krump Mfg. v. Int’l Ass’n of Machinists &
Aerospace Workers, Dist. No. 8, 802 F.2d 247, 250 (7th Cir.
1986); Department of the Navy v. Federal Labor Relations
Auth., 815 F.2d 797, 802 (1st Cir. 1987); Engis Corp. V.
Engis Ltd., 800 F. Supp. 627 (N.D. Ill. 1992).
The case law on this issue is clear, and CUNA’s counsel
“should have known that [its] position is groundless.”
National Wrecking Co. v. Int’l Brotherhood of Teamsters,
Local 731, 990 F.2d 957, 963 (7th Cir. 1993), quoting CNPA
v. Chicago Web Printing Pressmen’s Union No. 7, 821 F.2d
390, 397 (7th Cir. 1987) (citations omitted). The fact that
CUNA’s lawyers did not discuss this claim in its appellate
brief suggests that perhaps they knew this argument was
flawed. This aborted claim further justifies the district
court’s decision to apply Rule 11 sanctions to CUNA.
III. Conclusion
In sum, we AFFIRM the Rule 11 sanctions applied to
CUNA by the district court and order CUNA to pay the
reasonable attorney fees Local 39 incurred as a result of
being forced to litigate this matter, as directed by the
district court.
16 Nos. 05-1021 & 05-1226
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—3-16-06