Bernadette Pauley v. Cf Entertainment

FILED
NOT FOR PUBLICATION
MAR 25 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BERNADETTE PAULEY, an individual; No. 14-55131
THOMAS CLARK, an individual on
behalf of themselves and all others D.C. No. 2:13-cv-08011-R-CW
similarly situated,
Plaintiffs - Appellants, MEMORANDUM*
v.
CF ENTERTAINMENT, a California
corporation; COMICS UNLEASHED
PRODUCTIONS, INC., a California
corporation; ENTERTAINMENT
STUDIOS, INC., a California corporation;
BYRON ALLEN FOLKS, an individual;
SCREEN ACTORS GUILD-AMERICAN
FEDERATION OF TELEVISION AND
RADIO ARTISTS, a California
corporation,
Defendants - Appellees.
BERNADETTE PAULEY, an individual, No. 14-55155
on behalf of herself and all others similarly
situated, D.C. No. 2:13-cv-08012-R-CW
Plaintiff - Appellant,
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
v.
CF ENTERTAINMENT, a California
corporation; COMICS UNLEASHED
PRODUCTIONS, INC., a California
corporation; ENTERTAINMENT
STUDIOS, INC., a California corporation;
BYRON ALLEN FOLKS, an individual;
SCREEN ACTORS GUILD-AMERICAN
FEDERATION OF TELEVISION AND
RADIO ARTISTS, a California
corporation,
Defendants - Appellees.
Appeals from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Argued and Submitted February 10, 2016**
Pasadena, California
Before: FARRIS, CLIFTON, and BEA, Circuit Judges.
Plaintiffs filed various claims in federal district court against the employer
defendants (hereinafter collectively described as “CF Entertainment”) and their
union SAG-AFTRA prior to exhausting contractual grievance procedures. The
district court dismissed all claims for lack of subject matter jurisdiction and
Plaintiffs appealed. While the appeal was pending, the union and CF Entertainment
**
These cases were consolidated for oral argument only. We have also
consolidated their dispositions in this Memorandum.
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purported to settle all of Plaintiffs’ claims pursuant to their authority under the
collective bargaining agreement to resolve employee grievances. We have
jurisdiction under 28 U.S.C. § 1291. We affirm in part, vacate in part, and remand
for further proceedings consistent with this memorandum disposition.
Courts of appeals have jurisdiction to review “all final decisions of the
district courts” that continue to present a live case or controversy on appeal. 28
U.S.C. § 1291; U.S. Const. art. III, §2, cl. 2. It is immaterial to this jurisdictional
analysis whether the basis for the district court’s opinion is moot. So long as this
Court “can give the appellant any effective relief in the event that it decides the
matter on the merits in his favor,” the appeal is not moot. Garcia v. Lawn, 805 F.2d
1400, 1402 (9th Cir. 1986).
The September 2014 settlement agreement does not moot Plaintiffs’
statutory claims against CF Entertainment. Under California law, an arbitration
clause does not encompass statutory claims unless the agreement clearly and
unmistakably states otherwise. Hoover v. Am. Income Life Ins. Co., 206 Cal. App.
4th 1193, 1208 (2012). The arbitration provision in the parties’ collective
bargaining agreement does not expressly cover statutory claims. The union and CF
Entertainment had no authority, therefore, to settle Plaintiffs’ statutory claims. As
to Plaintiffs’ claim under the Private Attorneys General Act specifically, this Court
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recently confirmed that an arbitration clause may not waive the right to file a
PAGA claim. Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425, 439 (9th Cir.
2015).
Plaintiffs’ claim for a breach of the duty of fair representation against SAG-
AFTRA is also not moot. Post-complaint conduct cannot moot a claim for punitive
or monetary damages, as this Court may still grant effective relief for prior
misconduct, if proven on the merits. See Friends of the Earth, Inc. v. Laidlaw
Envtl. Servs. (TOC), Inc., 528 U.S. 167, 196–97 (2000) (Stevens, J., Concurring).
The union cannot moot a claim that it failed to protect its members’ interests by
later initiating a grievance and securing a settlement only after the aggrieved
members turn to the courts for relief.
This Court may not grant relief for Plaintiffs’ contract and tort claims
against CF Entertainment, as these claims were legally settled and released by the
settlement agreement. The arbitration provision of the parties’ collective
bargaining agreement permits the union and CF Entertainment to arbitrate and
settle claims for breach of contract and any tort claims “rooted” in the contractual
relationship between the parties. Buckhorn v. St. Jude Heritage Med. Grp., 121
Cal. App. 4th 1401, 1407 (2004). Plaintiffs’ three tort claims concern CF
Entertainment’s business and employment conduct. These tort claims are rooted in
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the contractual relationship between the parties. They fall within the scope of the
arbitration provision and are moot as a result of the settlement agreement. The
dismissal of those claims is affirmed.
We review the district court’s dismissal for lack of subject matter
jurisdiction of the non-moot claims de novo. The district court has jurisdiction over
all remaining claims. We affirm in part, vacate in part, and remand for further
proceedings.
The district court has jurisdiction over Plaintiffs’ statutory claims against CF
Entertainment. Whether the district court erred in dismissing these claims for
failure to exhaust contractual grievance procedures is no longer an issue. The
settlement agreement has now satisfied any potential exhaustion requirement.
Plaintiffs may seek relief in federal court for any unsettled claims. See Rodrigues v.
Donovan, 769 F.2d 1344, 1349 (9th Cir. 1985). The union was not authorized to
settle Plaintiffs’ statutory claims against CF Entertainment. This portion of the
district court’s decision is vacated.
The district court also has jurisdiction over Plaintiffs’ claim for breach of the
duty of fair representation against SAG-AFTRA. The Supreme Court has long
recognized that a labor union has a statutory duty of fair representation under the
National Labor Relations Act, which creates federal question jurisdiction over
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claims for a breach of the duty of fair representation. Breininger v. Sheet Metal
Workers Int’l Ass’n Local Union No. 6, 493 U.S. 67, 83 (1989). A fair
representation claim is a separate federal cause of action from any suit against the
employer. Id. at 84. Federal court jurisdiction exists over a claim against the union
whether or not a parallel suit against the employer is brought in federal court or
arbitration. Id. The parties’ arbitration agreement governs disputes “between any
Producer and AFTRA or between any Producer and any member of AFTRA”; it
does not apply to disputes between SAG-AFTRA and its members. The arbitrator
would have no power to award damages attributable to the union’s breach of duty.
The district court’s dismissal for lack of subject matter jurisdiction of Plaintiffs’
claim against SAG-AFTRA for breach of the duty of fair representation was error.
This portion of the district court’s decision is vacated.
The district court properly ruled that Plaintiffs’ Unfair Business Practices
claim against SAG-AFTRA is preempted by federal law. See Adkins v. Mireles,
526 F.3d 531, 539 (9th Cir. 2008). The dismissal of that claim is affirmed.
Plaintiffs’ request for an order of reassignment to a different district court
judge is denied.
Each party shall bear its own costs.
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AFFIRMED in part, VACATED in part, and REMANDED for further
proceedings.
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