Greater Missoula v. Child Start I

October 30 2009
DA 07-0702
IN THE SUPREME COURT OF THE STATE OF MONTANA
2009 MT 362GREATER MISSOULA AREA FEDERATION
OF EARLY CHILDHOOD EDUCATORS AND
RELATED PERSONNEL, MEA-MFT, AFT, NEA,
AFL-CIO,
Plaintiff and Appellee,
v.
CHILD START, INC., WHITTIER SCHOOL,
MISSOULA, MONTANA,
Defendant and Appellant.
APPEAL FROM: District Court of the Fourth Judicial District,
In and For the County of Missoula, Cause No. DV 2006-834
Honorable Ed McLean, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Stacey Weldele-Wade, Antonioli & Wade, P.C., Missoula, Montana
For Appellee:
Karl J. Englund, Karl J. Englund, P.C., Missoula, Montana
Submitted on Briefs: September 24, 2008
Decided: October 30, 2009
Filed:
__________________________________________
Clerk
Justice James C. Nelson delivered the Opinion of the Court.
¶1 The Greater Missoula Area Federation of Early Childhood Educators and Related
Personnel, MEA-MFT, AFT, NEA, AFL-CIO (the Federation) commenced the instant
action against Child Start, Inc. (Child Start) in September 2006 by filing a Complaint and
Motion to Compel Arbitration. The District Court granted the Federation’s motion.
Child Start then filed a motion under M. R. Civ. P. 60(b) for relief from the District
Court’s order. The court denied this motion, and Child Start now appeals. We affirm.
ISSUE
¶2 The sole issue on appeal is whether the District Court erred in denying Child
Start’s Rule 60(b) motion.
BACKGROUND
The Grievance
¶3 This case involves an employer and the union representing its employees. Child
Start operates a Head Start early-childhood-development program at Whittier School in
Missoula, Montana. The Federation, a local union affiliated with MEA-MFT and its
national affiliates, is the certified collective-bargaining representative for nonsupervisory
employees of Child Start.
¶4 Child Start and the Federation are parties to a collective-bargaining agreement (the
Agreement). The stated term of the Agreement is January 1, 2003, through December 31,
2006, though Article One, Section 2 of the Agreement provides that the contract shall
remain in full force until a new agreement is negotiated. Of relevance to the present case,
Article Two, Section 7 sets forth a “Grievance Procedure,” the stated intent of which is to
2
resolve employee complaints “at the earliest possible step.” A “grievance” is defined as
“a complaint by an employee that there has been a violation, misinterpretation, or
misapplication of the provisions of this agreement.” An “employee” is defined as “(1) an
individual employee or (2) a group of employees having the same grievance.”
Furthermore, “[a]ny employee, or group of employees, has the right to Union
representation at any stage of the grievance procedure.” Until the grievance is resolved,
the employee proceeds through the following six steps:
Step 1: The employee discusses the grievance with the immediate supervisor.
Step 2: The employee submits the grievance to the immediate supervisor on a
mutually approved form.
Step 3: The employee submits the written grievance to Child Start’s director.
Step 4: The employee may appeal to Child Start’s Policy Council.
Step 5: The employee may proceed to mediation before three mediators.
Step 6: The employee may proceed to binding arbitration.
¶5 In early 2006, Child Start faced rising costs without a corresponding increase in
federal funding. Thus, Child Start decided that for budgetary reasons it would reduce by
one week the number of weeks the program would operate during the school year. As a
result, all employees’ annual wages would be cut by 40 hours at their respective hourly
rates, regardless of program priority, job position, or seniority rank.
¶6 On May 30, 2006, Karen Giuliani filed a grievance (using a Head Start Grievance
Form) concerning Child Start’s decision. At the time, Giuliani was an employee of Child
Start and a member of the bargaining unit represented by the Federation. She also was
president of the Federation. She named the Federation as the aggrieved party but
indicated that the grievance was on behalf of “Several Affected” employees. Giuliani
asserted that Child Start’s decision to reduce the work year of bargaining-unit employees
3
“does not comply with the requirements of our Collective Bargaining Agreement
regarding a reduction in force.” She stated that the provisions of the Agreement on which
the grievance was based “include but are not necessarily limited to” Article Two,
Section 2 (the Job Security provision), which states, in relevant part, that in the event of
“provable financial exigency necessitating a reduction in force,” a management/union
committee shall meet to examine personnel areas in which savings may be made.
Furthermore, layoffs are to be made “on the basis of program priority,” and reductions in
force are to be made “on the basis of seniority.” Giuliani requested that the reduction in
the work year for bargaining-unit employees be rescinded and that Child Start conduct
any necessary reduction in force in compliance with Article Two, Section 2. She also
sought “any additional relief necessary to rectify this matter.”
¶7 Giuliani’s grievance proceeded through the Grievance Procedure outlined above.
At each step, however, Child Start repeatedly refused even to recognize the grievance, let
alone attempt to resolve it “at the earliest possible step.” On June 6, 2006, Scot Anderson
(Child Start’s director) sent a letter to Giuliani asserting that the grievance was not a valid
grievance because, in his view, it had not been filed by an individual employee, no group
of employees had been identified, and the Federation as a whole did not qualify “because
not all members have the same complaint.” Anderson opined that the Federation had a
“conflict of interest” in representing all bargaining-unit employees because their
“individual interests differ according to whether they would or would not be laid off.”
Anderson concluded that “[n]o further action will be taken regarding the grievance.” The
Federation then gave notice of its intent to appeal to Child Start’s Policy Council;
4
however, Anderson wrote a second letter reiterating his position that the grievance was
not valid and asserting that “[s]ince there is no grievance, there will be no appeal.” The
Federation then gave notice of its intent to proceed to mediation; however, Sally
Woodruff (president of Child Start’s Board of Directors) issued a letter giving the same
responses Anderson had previously given: the grievance was not valid, the Federation
could not represent all of its members in this matter due to a supposed “conflict of
interest,” and Child Start would not take any further action regarding the grievance.
¶8 Having reached Step 6, the Federation gave notice of its intent to proceed to
arbitration. To that end, the Federation sent a letter to the Department of Labor and
Industry’s Board of Personnel Appeals (BOPA) requesting a list of qualified arbitrators.
Anderson, however, responded with a letter to BOPA stating that the grievance was
invalid and that Child Start intended “to take no further action regarding this grievance.”
Indeed, he asserted that Child Start did not agree to arbitration or to participate in
requesting the list of arbitrators and that Child Start “will not participate in the arbitration
process, since we are not obligated to do so by the Master Contract.” Shortly thereafter,
Child Start implemented the one-week reduction. The 2006-2007 school year, which had
been scheduled to start on August 14, 2006, instead started on August 21.
The Federation’s Motion to Compel Arbitration
¶9 On September 6, 2006, the Federation filed its Complaint and Motion to Compel
Arbitration under § 27-5-115, MCA, which states:
(1) On the application of a party showing an agreement [to submit a
controversy to arbitration] and the opposing party’s refusal to arbitrate, the
district court shall order the parties to proceed with arbitration; but if the
5
opposing party denies the existence of the agreement to arbitrate, the court
shall proceed summarily to the determination of that issue raised and shall
order arbitration if it finds for the applying party or deny the application if
it finds for the opposing party.
. . .
(5) An order for arbitration may not be refused on the ground that
the claim in issue lacks merit or good faith or because no fault or grounds
for the claim sought to be arbitrated have been shown.
The Federation contended that under this statute, the only issue before the District Court
was “whether there is an agreement to arbitrate—not the merits of the claim or the nature
of the defense to a claim.” Here, the Federation argued, there is an agreement to arbitrate
unresolved grievances like the one filed by Giuliani, and Child Start’s objections as to the
validity of the grievance are matters to be decided by the arbitrator.
¶10 Child Start responded with a motion to dismiss in which it raised a number of
different points. As to the question of arbitrability, Child Start argued that the Agreement
did not require the parties to arbitrate all disputes; rather, it required them to arbitrate
only “properly filed” grievances. Child Start maintained that the grievance here was not
properly filed for the reasons stated in Anderson’s and Woodruff’s letters. In addition,
Child Start argued that there was no “grievance” at all because the Federation had not
identified a “specific” violation, misinterpretation, or misapplication of the Agreement.
Lastly, Child Start discussed the merits of the grievance. According to Child Start, “there
is nothing in the [Agreement] which prohibits [Child Start] from shortening the length of
the school year for budgetary purposes.” To the contrary, Child Start asserted that Article
One, Section 10 (the Management Rights provision) “legally authorized” it to decide, in
6
its “sole and exclusive discretion,” to cut the length of the school year by one week rather
than reduce the workforce. Moreover, Child Start argued that there had been no
violation, misinterpretation, or misapplication of Article Two, Section 2 (the Job Security
provision) because there had been no layoffs and no reductions in force.
¶11 In November 2006, while their respective motions were pending in the District
Court, the parties settled a separate grievance concerning a pay increase. In conjunction
with that settlement, the parties agreed that while the Federation “will continue to pursue
resolution of its Reduction-In-Force (RIF) grievance,” the Federation “will not seek a
remedy requiring a back pay or other financial award for the one week reduction in the
2006-07 work schedule.” They also agreed that “neither party makes any admissions
with respect to its position on the validity and/or merits of the so-called RIF grievance by
entering into this agreement” and that “this agreement sets no precedent.”
¶12 The District Court issued its Opinion and Order on August 2, 2007, denying Child
Start’s motion to dismiss and granting the Federation’s motion to compel arbitration. The
court first observed that the parties did not dispute two points: the Agreement contains a
valid and enforceable arbitration clause, and the arbitration clause applies to unresolved
“grievances.” The court also noted that the Federation had complied methodically with
the procedural steps for pursuing a grievance, as set out in Article Two, Section 7. Thus,
the court focused on the question of whether the complaint filed by Giuliani constituted a
“grievance” under the Agreement.
¶13 In this regard, the court flatly rejected Child Start’s contention that the grievance
had not been filed by a proper party, observing that Article Two, Section 7 “expressly
7
gives the Federation clear contractual authority to bring the grievance on behalf of an
identifiable ‘employee, or group of employees.’ ” The court reasoned that an identifiable
group of employees had been implicated and affected by Child Start’s decision to cut the
annual wages of all bargaining-unit employees by 40 hours at their respective hourly
rates, regardless of program priority, job position, or seniority rank. Likewise, the court
rejected Child Start’s claim that the Federation’s pursuit of the grievance compromised
its duty to represent all of its members, noting that this was a contractual issue between
the Federation and its members. Lastly, the court observed that Child Start’s argument
regarding the merits of the grievance “clearly reveals a contractual dispute under the
terms of the Agreement”—namely, whether Child Start has “sole authority” under Article
One, Section 10 to reduce the annual salaries of all employees, or whether Child Start has
a duty under Article Two, Section 2 to meet with a union committee to examine
personnel areas in which savings may be made when there is a provable financial need to
make budgetary cuts affecting bargaining-unit employees. The court reasoned that an
arbitrator, not the court, must resolve the parties’ conflicting interpretations of the
Agreement’s provisions. For the foregoing reasons, the District Court concluded that the
Federation’s grievance is subject to the Agreement’s arbitration clause, and the court
accordingly ordered the parties to submit the grievance to arbitration.
Child Start’s Rule 60(b) Motion
¶14 Child Start did not appeal the District Court’s August 2, 2007 Opinion and Order.
Rather, on August 31, Child Start filed a Rule 60(b) Motion for Relief from Judgment or
Order. Relying on subsections (4), (5), and (6) of M. R. Civ. P. 60(b), Child Start asked
8
the court to vacate its Opinion and Order “due to events which transpired prior to this
Court’s order.”1 In particular, Child Start pointed out that the one-week reduction in the
school year had occurred in August 2006 and that the Federation had agreed in November
2006 not to seek any financial award for the reduction in the work schedule. Child Start
contended that rescission and monetary damages, therefore, were not available and that
the Federation had not requested any other specific relief. Child Start thus reasoned that
the matter is moot, as there is nothing to arbitrate and no relief to be granted; that
mootness results in a loss of jurisdiction; and that the District Court’s decision, therefore,
is “void for lack of jurisdiction,” entitling Child Start to relief under subsection (4).
Alternatively, relying on the “equity” clause of subsection (5), Child Start argued that
arbitration here would be “needless and wasteful” and would “damage all parties through
the depletion of scarce financial resources.” Similarly, invoking subsection (6), Child
Start suggested that relief was appropriate because “intervening circumstances” had
rendered arbitration on the Federation’s grievance “moot and pointless.” Child Start
concluded that in the interests of “equity, common sense and judicial/administrative
economy,” the court should vacate its August 2, 2007 Opinion and Order.
¶15 In response, the Federation contended that Child Start had misidentified the actual
controversy underlying the District Court’s decision. That controversy, the Federation
1
M. R. Civ. P. 60(b) states, in relevant part: “On motion and upon such terms as
are just, the court may relieve a party or a party’s legal representative from a final
judgment, order, or proceeding for the following reasons: . . . (4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon
which it is based has been reversed or otherwise vacated, or it is no longer equitable that
the judgment should have prospective application; or (6) any other reason justifying relief
from the operation of the judgment.”
9
argued, as defined by § 27-5-115, MCA, was whether there is an agreement between the
parties to arbitrate unresolved grievances and whether the Federation’s complaint
constitutes a “grievance” under the Agreement. The Federation noted that the court had
answered both questions in the affirmative and, thus, had granted the “relief” requested
by the Federation (i.e., it ordered arbitration); and for this reason, the Federation disputed
Child Start’s assertion that the District Court lacked the ability to grant relief. The
Federation further argued that the question of whether its grievance has become moot is a
separate matter for the arbitrator, not the court, to decide. Nevertheless, the Federation
pointed out that even with the passage of time, disputes still remained as to whether Child
Start misinterpreted or misapplied the Agreement when it reduced the work year in lieu
of implementing the seniority and layoff procedures and whether Child Start has sole
authority to reduce unilaterally the work year and the annual salary of all employees or
whether it has a duty to work first with the Federation.
¶16 The District Court rendered its decision on October 29, 2007, denying Child
Start’s Rule 60(b) motion. The court agreed with the Federation that the issues at hand
are not moot. For one thing, the court observed, the contractual relationship between
Child Start and the Federation “continues and is dependent on disputed interpretations of
critical and material contract language.” Furthermore, the court reasoned, Child Start
“forced” these court proceedings to occur “by thwarting the grievance and arbitration
provisions” of the Agreement and is likely to do so again “given the arbitrary and
capricious manner” in which it dealt with the present grievance. As for Child Start’s
claim that it was entitled to equitable relief under Rule 60(b), the court quite clearly was
10
not persuaded in light of Child Start’s conduct throughout the grievance process. For
starters, the court found that Child Start’s stated reasons for repeatedly refusing to
recognize the Federation’s grievance “bordered on the frivolous.” For example, the court
noted that Child Start had no legal right to refuse the grievance on the ground that the
Federation might have a “conflict of interest” in pursuing it, as this was an issue solely
between the Federation and its membership. Moreover, the court found that Child Start’s
“arrogant decision” to summarily refuse to honor the grievance process was “arbitrary
and capricious” and that Child Start’s “unreasonabl[e]” conduct had forced the
Federation to file the present court action after expending significant time and effort to
follow the steps for resolving grievances. Lastly, as to Child Start’s claim that arbitration
would be a financial burden, the court pointed out that had Child Start
not arbitrarily and capriciously refused to perform its contractual duties
under the bargaining agreement, the added expense of going to arbitration
following this court proceeding would not have transpired, and therefore,
[Child Start] is solely responsible for the added expense and cannot use it
as an excuse for not arbitrating the procedural and substantive issues which
are within the sole jurisdiction of the arbitrator under the bargaining
agreement and statutory law.
The District Court concluded that Child Start’s “continuing indefensible resistance” to
arbitration must fail. Child Start now appeals.
STANDARD OF REVIEW
¶17 Our standard of review of a district court’s ruling on a motion under M. R. Civ. P.
60(b) depends on the nature of the final judgment, order, or proceeding from which relief
is sought and the specific basis of the Rule 60(b) motion. Essex Ins. Co. v. Moose’s
Saloon, Inc., 2007 MT 202, ¶ 16, 338 Mont. 423, 166 P.3d 451. As a general rule, we
11
review the district court’s ruling for abuse of discretion; however, different standards
apply where the movant sought relief from a default judgment or where the movant
sought relief under subsections (2) or (4) of Rule 60(b). See Essex, ¶¶ 16-17.
¶18 Here, Child Start invoked subsections (4), (5), and (6) in the District Court, and
the Federation asserts that Child Start has “never clearly articulated” which subsection it
is attempting to invoke. In its reply brief, Child Start acknowledges that it has cited
subsections (4), (5), and (6) “in the alternative” but indicates that it is invoking only
subsection (4). Accordingly, as Child Start contends, our standard of review is de novo.
See Essex, ¶ 16 (“[W]here the movant sought relief under subsection (4) of Rule 60(b) on
the ground that the judgment is void, the standard of review is de novo, since the
determination that a judgment is or is not void is a conclusion of law.”).
DISCUSSION
¶19 Under M. R. Civ. P. 60(b)(4), a party is entitled to relief from a final judgment,
order, or proceeding if the judgment is void. As it did in the District Court, Child Start
maintains that the court’s August 2, 2007 Opinion and Order directing the parties to
proceed to arbitration is void. Child Start again points out that in August 2006 it
implemented the one-week reduction in the work year with no attendant layoffs or
reductions in force. Child Start also points out that the Federation agreed in November
2006 not to seek a remedy requiring back pay or other financial award for the one-week
reduction. Child Start contends that these events effectively mooted the controversy
between the parties and “thwarted” any relief that could have been granted in response to
the Federation’s grievance. Child Start thus reasons that the present action has been moot
12
since November 2006, if not earlier; that there is no justiciable controversy between the
parties; and that the District Court consequently lacked jurisdiction when it issued its
decision on August 2, 2007.2
¶20 The Federation responds that Child Start’s mootness argument fails because it is
incorrectly based on whether the issue to be presented to the arbitrator is moot, rather
than on whether the issue before the District Court was moot. The Federation points out
that the dispute underlying the District Court’s August 2, 2007 Opinion and Order had
nothing to do with the merits of its grievance. Rather, as defined by § 27-5-115, MCA,
the specific dispute was whether the parties had an agreement to arbitrate the grievance.
In this connection, the Federation suggests that Child Start is improperly attempting to
narrow the range of grievances that are arbitrable under the Agreement. The Federation
notes that a “grievance,” as defined by the Agreement, includes a complaint that there has
been a “misinterpretation or misapplication” of the Agreement’s provisions, and the
Federation observes that its grievance is just that: a complaint that Child Start
misinterpreted or misapplied the Agreement by reducing the work year in lieu of
implementing the seniority and layoff procedures. The Federation points out that
although the one-week reduction has already occurred, and although it is not pursuing a
financial award, there is nothing in the Agreement limiting arbitration of grievances to
situations where the parties can be restored to their original positions or where monetary
2
Recognizing that the factual basis for its mootness argument existed long before
it filed its Rule 60(b) motion on August 31, 2007, Child Start offers the somewhat
dubious explanation that “[c]ounsel for Child Start was not aware until after receipt of the
District Court’s August 2, 2007 Opinion and Order of the facts which made moot that
decision.”
13
damages are available. To the contrary, the Federation contends that the grievance and
arbitration process is “ ‘a vehicle by which meaning and content are given to the
collective-bargaining agreement’ ” (quoting United Steelworkers of America v. Warrior
and Gulf Navigation Co., 363 U.S. 574, 581, 80 S. Ct. 1347, 1352 (1960)), and the
Federation explains that an arbitrator’s decision on the Federation’s grievance will
resolve the parties’ “festering disputes” over the meaning of the Agreement—in
particular, whether Child Start has sole authority to unilaterally reduce the work year or
has a duty to work with the Federation under the Agreement’s layoff and reduction-in-
force procedures, and whether the president of the Federation may sign a grievance on
behalf of the Federation’s members.
¶21 Before considering these arguments, we first note the Federation’s suggestion that
“mootness is [not] properly raised within the context of a Rule 60(b)(4) motion.” A
judgment or order may be challenged as “void” under Rule 60(b)(4) on the ground that
the rendering court lacked jurisdiction. See e.g. Nikolaisen v. Advance Transformer Co.,
2007 MT 352, 340 Mont. 332, 174 P.3d 940; see also O’Rourke Bros. Inc. v. Nesbitt
Burns, Inc., 201 F.3d 948, 951 (7th Cir. 2000) (“A judgment is void only if the court
which rendered it lacked jurisdiction of the subject matter or of the parties, or if it acted
in a manner inconsistent with due process of law.”). It follows from this and from the
justiciability and mootness principles discussed below that a judgment or order may be
challenged as void (as Child Start does here) on the ground that the controversy between
the parties was moot at the time the court rendered the judgment or order. See e.g.
Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198, 1202-03 (Fed. Cir. 2005).
14
Justiciability and Mootness
¶22 The judicial power of the courts of Montana is limited to justiciable controversies.
See Dukes v. City of Missoula, 2005 MT 196, ¶ 15, 328 Mont. 155, 119 P.3d 61; Powder
River County v. State, 2002 MT 259, ¶ 101, 312 Mont. 198, 60 P.3d 357; cf. Flast v.
Cohen, 392 U.S. 83, 94-95, 88 S. Ct. 1942, 1949-50 (1968) (noting the same limitation
on the judicial power of the federal courts). This limitation derives in part from
constitutional requirements and in part from policy or “prudential” considerations. See
e.g. Montana Power Co. v. Montana Public Service Commn., 2001 MT 102, ¶ 32, 305
Mont. 260, 26 P.3d 91 (observing that the ripeness doctrine is grounded in both the
constitution and judicial prudence); Olson v. Dept. of Revenue, 223 Mont. 464, 469-70,
726 P.2d 1162, 1166 (1986) (same with respect to the doctrine of standing); cf. Flast, 392
U.S. at 94-97, 88 S. Ct. at 1949-51. Article VII, Section 4 of the Montana Constitution,
in relevant part, confers original jurisdiction on district courts in “all civil matters and
cases at law and in equity.” Mont. Const. art. VII, § 4(1). This language has been
interpreted as embodying the same sorts of limitations as those imposed on federal courts
by the “case or controversy” provision of Article III, Section 2 of the United States
Constitution. See Seubert v. Seubert, 2000 MT 241, ¶ 17, 301 Mont. 382, 13 P.3d 365;
Olson, 223 Mont. at 469-70, 726 P.2d at 1166.
¶23 The central concepts of justiciability have been elaborated into more specific
categories or doctrines—namely, advisory opinions, feigned and collusive cases,
standing, ripeness, mootness, political questions, and administrative questions—each of
which is governed by its own set of substantive rules. See e.g. Clark v. Roosevelt County,
15
2007 MT 44, ¶ 11, 336 Mont. 118, 154 P.3d 48 (advisory opinions); Havre Daily News,
LLC v. City of Havre, 2006 MT 215, ¶¶ 19, 31, 333 Mont. 331, 142 P.3d 864 (ripeness
and mootness); Columbia Falls Elementary School Dist. No. 6 v. State, 2005 MT 69,
¶ 15, 326 Mont. 304, 109 P.3d 257 (political questions); Armstrong v. State, 1999 MT
261, ¶¶ 6-7, 296 Mont. 361, 989 P.2d 364 (standing); Hardy v. Krutzfeldt, 206 Mont. 521,
524-26, 672 P.2d 274, 275-76 (1983) (advisory opinions); Carlson v. City of Helena, 38
Mont. 581, 585, 101 P. 163, 164 (1909) (collusive cases); see also Charles Alan Wright,
Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure vol. 13, § 3529,
612 (3d ed., West 2008). In the present case, we are concerned with the question of
mootness. As we have previously observed, mootness is “the doctrine of standing set in a
time frame: The requisite personal interest that must exist at the commencement of the
litigation (standing) must continue throughout its existence (mootness).” Havre Daily
News, ¶ 31 (internal quotation marks omitted). Thus, if the issue presented at the outset
of the action has ceased to exist or is no longer “live,” or if the court is unable due to an
intervening event or change in circumstances to grant effective relief or to restore the
parties to their original position, then the issue before the court is moot. See Powder
River, ¶ 101; Shamrock Motors, Inc. v. Ford Motor Co., 1999 MT 21, ¶ 19, 293 Mont.
188, 974 P.2d 1150; Serena Vista, LLC v. Dept. of Natural Resources and Conservation,
2008 MT 65, ¶ 14, 342 Mont. 73, 179 P.3d 510; Los Angeles County v. Davis, 440 U.S.
625, 631, 99 S. Ct. 1379, 1383 (1979). And because the constitutional requirement of a
“case or controversy” contemplates real controversies and not abstract differences of
opinion or moot questions, Seubert, ¶ 18; cf. Wright et al., Federal Practice and
16
Procedure vol. 13B, § 3533.1, 725-27, courts lack jurisdiction to decide moot issues
insofar as an actual “case or controversy” no longer exists, see Dennis v. Brown, 2005
MT 85, ¶ 8, 326 Mont. 422, 110 P.3d 17; Iron Arrow Honor Socy. v. Heckler, 464 U.S.
67, 70, 104 S. Ct. 373, 374-75 (1983) (per curiam); Enrico’s, Inc. v. Rice, 730 F.2d 1250,
1253 (9th Cir. 1984); see also Ballas v. Missoula City Bd. of Adjustment, 2007 MT 299,
¶¶ 15-16, 340 Mont. 56, 172 P.3d 1232.
Application of Mootness Principles
¶24 The issue as framed by Child Start is whether a district court lacks jurisdiction to
render a decision on a motion to compel arbitration of a dispute that the opposing party
contends has become moot. This Court has not previously addressed this issue directly,
but we note that some federal and state courts have. In fact, the parties rely on several
cases from other jurisdictions in support of their respective positions. We will consider
these authorities for their persuasive value in resolving the mootness issue presented.
¶25 At the outset, it is necessary to clarify the focus of our analysis in light of two
related points raised by the parties. First, in both the District Court and this Court, Child
Start has repeatedly confused the justiciability requirement’s applicability to courts, as
opposed to arbitrators. For example, relying on our statements in ¶ 14 of Serena Vista
that “[w]e do not render advisory opinions, and we limit our rulings to those matters in
which we can grant effective relief,” Child Start contends that all an arbitrator could do
regarding the Federation’s allegedly moot grievance is render an “advisory opinion”
answering “abstract questions,” which Child Start contends is “not appropriate” under
Serena Vista. It is essential to keep in mind, however, that arbitration is a matter of
17
contract, Solle v. Western States Ins. Agency, 2000 MT 96, ¶ 22, 299 Mont. 237, 999 P.2d
328, and the arbitrator’s authority derives from and is limited by the parties’ agreement,
not the case-or-controversy provision of the Constitution, see Miller v. County of Glacier,
257 Mont. 422, 427-28, 851 P.2d 401, 404 (1993); Terra West Townhomes, LLC v. Stu
Henkel Realty, 2000 MT 43, ¶ 27, 298 Mont. 344, 996 P.2d 866; Barrentine v. Arkansas-
Best Freight System, Inc., 450 U.S. 728, 744, 101 S. Ct. 1437, 1446 (1981). As one court
has pointed out, “[t]here would be nothing improper or illegal (and certainly not
unconstitutional) about an arbitration panel resolving a dispute that would have to be
dismissed from federal court because it did not constitute a case or controversy.” Klay v.
United Healthgroup, Inc., 376 F.3d 1092, 1106 (11th Cir. 2004); cf. Wright et al.,
Federal Practice and Procedure vol. 13B, § 3533.1, 728 (noting that an administrative
agency is not bound by constitutional limits and may be empowered to maintain
proceedings that would be moot in a court). Likewise, there is no basis under Montana
law for Child Start’s proposition that an arbitrator may not resolve a dispute which does
not constitute a “case or controversy” under Article VII, Section 4(1). Along these same
lines, we note that an arbitrator has broad power to fashion remedies on issues the parties
have empowered the arbitrator to resolve, and in some instances the arbitrator may be
authorized to grant relief that could not be granted by a court of law or equity. See
§ 27-5-312(2), MCA; Nelson v. Livingston Rebuild Center, Inc., 1999 MT 116, ¶¶ 18-19,
294 Mont. 408, 981 P.2d 1185; Courier-Citizen Co. v. Boston Electrotypers Union
No. 11, 702 F.2d 273, 281 (1st Cir. 1983); Bowen v. Amoco Pipeline Co., 254 F.3d 925,
937 (10th Cir. 2001); see also e.g. Wallace v. Hayes, 2005 MT 253, ¶ 40, 329 Mont. 23,
18
124 P.3d 110; United Steelworkers of America v. USX Corp., 966 F.2d 1394, 1402 (11th
Cir. 1992). For these reasons, Child Start’s application of justiciability doctrines as limits
on the arbitrator’s authority is misplaced. In evaluating Child Start’s motion under Rule
60(b)(4), our focus is on whether there was a “live” case or controversy in the District
Court, not whether there would be one in front of the arbitrator.
¶26 This leads into the second point. The Federation has consistently maintained that
the question of whether its grievance is moot is for the arbitrator to decide. The
Federation cites some cases, and we have found others, which support this proposition.
See e.g. W. Dow Hamm III Corp. v. Millennium Income Fund, LLC, 237 S.W.3d 745, 757
(Tex. App. 1st Dist. 2007) (“[W]hether matters sought to be arbitrated are in fact moot is
a question of procedural arbitrability that is reserved for the arbitrator, absent the parties’
agreement to the contrary.”); Oil, Chemical and Atomic Workers Intl. Union v. Conoco,
Inc., 64 Fed. Appx. 178, 185 (10th Cir. 2003) (unpublished3) (“Given the tightly
circumscribed role that the courts are assigned in determining arbitrability, and
considering that arbitrators have broad equitable powers to fashion remedies, it is not for
us to decide that a remedy will not be available for a particular grievance.”); Galveston
Maritime Assn. v. South Atlantic & Gulf Coast Dist., 234 F. Supp. 250, 251-52 (S.D. Tex.
1964); Western Automatic Mach. Screw Co. v. Intl. Union, 335 F.2d 103, 105-06 (6th Cir.
1964). The Supreme Court has stated that a gateway dispute about whether the parties
3
Unpublished decisions of other courts may be cited as legal authority to the
extent the rules of the rendering court allow. McDonald v. Dept. of Envtl. Quality, 2009
MT 209, ¶ 53, 351 Mont. 243, 214 P.3d 749. Under 10th Cir. R. 32.1, unpublished
decisions issued prior to January 1, 2007, “are not precedential, but may be cited for their
persuasive value.”
19
are bound by a given arbitration clause raises a “question of arbitrability” for a court to
decide. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S. Ct. 588, 592
(2002). Likewise, a disagreement about whether an arbitration clause in a concededly
binding contract applies to a particular type of controversy is for the court. Howsam, 537
U.S. at 84, 123 S. Ct. at 592. But “procedural questions” which grow out of the dispute
and bear on its final disposition—such as time limits, waiver, notice, laches, estoppel, and
whether the steps of a grievance procedure were completed—are presumptively not for
the court, but for an arbitrator, to decide. Howsam, 537 U.S. at 84-85, 123 S. Ct. at 592;
see also Klay, 376 F.3d at 1109 (“Generally speaking, courts are empowered to resolve
disputes that solely involve whether a particular claim should be resolved in court or
arbitration. Arbitrators, on the other hand, are empowered, absent an agreement to the
contrary, to resolve disputes over whether a particular claim may be successfully litigated
anywhere at all (due to concerns such as statute of limitations, laches, justiciability, etc.),
or has any substantive merit whatsoever.” (citation omitted)). Likewise, this Court has
indicated that although the question of whether the parties agreed to arbitrate is, as a
general rule, to be decided by the court, see Higgins Dev. Partners, LLC v. Skanska
U.S.A. Bldg., Inc., 2009 MT 287, ¶ 20, 352 Mont. 243, 216 P.3d 199, procedural
questions such as “the arbitrability of an indisputably arbitrable issue” are for the
arbitrator to decide, see Intl. Bhd. of Elec. Workers v. Montana Power Co., 280 Mont. 55,
60-61, 929 P.2d 839, 842-43 (1996). Cf. § 27-5-115(5), MCA (“An order for arbitration
may not be refused on the ground that the claim in issue lacks merit or good faith or
because no fault or grounds for the claim sought to be arbitrated have been shown.”).
20
¶27 In light of these authorities, and since the Agreement does not provide otherwise,
we agree with the Federation that the question of whether its grievance is moot is for the
arbitrator, not the District Court, to decide. Necessarily, then, we also agree with the
Federation that the District Court’s jurisdiction over the present case does not turn on
whether the Federation’s grievance is moot. This does not mean, however, that mootness
doctrine does not apply to motions to compel arbitration of labor disputes. It only means,
as previously indicated, that the focus of the mootness question is not on whether the
issues raised in the grievance are themselves “live.” The “case or controversy” presented
to the District Court in this case was the narrow question of whether the Agreement’s
arbitration clause applied to the Federation’s grievance. See § 27-5-115(1), MCA. It
follows, therefore, that the specific question we must answer in resolving Child Start’s
Rule 60(b)(4) motion is whether this “case or controversy” was “live” at the time the
District Court rendered its August 2, 2007 decision. Cf. Klay, 376 F.3d at 1110 n. 19
(“Of course, if a party makes a motion to compel arbitration under 9 U.S.C. § 4, a district
court must determine if there exists a case or controversy in order for it to exercise its
jurisdiction over that motion to compel. . . . [T]he absence of a case or controversy
requires a court to abstain from mandating arbitration . . . .”). We conclude that it was.
¶28 It would be one thing if the Federation had decided to withdraw its grievance
during the pendency of the District Court proceedings. At that point, the issue presented
at the outset of this action—whether the Agreement’s arbitration clause applied to the
Federation’s grievance—would have become a purely academic point. The parties would
have lost their legally cognizable interest in the outcome, and the court would have been
21
unable to grant effective relief. Indeed, the court would have been left in the position of
issuing an advisory opinion on whether the arbitration clause applied to a nonexistent
grievance. In short, the case would have become moot, and the District Court would
have been bound to dismiss it for lack of jurisdiction. See Indep. Union of Flight
Attendants v. Pan American World Airways, Inc., 966 F.2d 457, 459 (9th Cir. 1992) (a
party’s decision to withdraw a claim renders it moot); Dennis v. Brown, 2005 MT 85, ¶ 8,
326 Mont. 422, 110 P.3d 17 (courts have no jurisdiction to answer moot questions);
Shamrock Motors, Inc. v. Ford Motor Co., 1999 MT 21, 293 Mont. 188, 974 P.2d 1150(a case that has become moot must be dismissed); accord Great Western Sugar Co. v.
Nelson, 442 U.S. 92, 99 S. Ct. 2149 (1979) (per curiam). The same result would have
obtained had Child Start withdrawn its objections to arbitration and proceeded to arbitrate
the Federation’s grievance. At that point, there would have been no case or controversy
before the District Court.4
¶29 But no such events transpired here. The Federation has continually pursued its
complaint related to Child Start’s decision to reduce the work year by one week. The
Federation reached the last step of the Grievance Procedure—arbitration—but Child Start
refused to participate in arbitration. So, the Federation commenced the present action
solely to compel Child Start to submit to the arbitration. Child Start responded that the
4
That was essentially the situation in Great Western Sugar, on which Child Start
relies heavily. Nelson sued to compel arbitration, the district court granted the motion,
and Great Western Sugar appealed. But before the appeal could be decided on the merits,
the arbitration proceedings were completed. Thus, the Supreme Court concluded that the
court case had become entirely moot and that dismissal was required. See Great Western
Sugar, 442 U.S. at 93-94, 99 S. Ct. at 2150. In contrast, the arbitration sought by the
Federation here has not even been started, let alone completed.
22
Agreement’s arbitration clause does not apply to the Federation’s complaint. Child Start
maintained this position throughout this litigation. The District Court was in a position to
grant effective relief by either granting the Federation’s motion to compel arbitration or
granting Child Start’s motion to dismiss. This constitutes a “live” case or controversy,
which still existed on August 2, 2007, when the District Court issued its decision.
¶30 Most of Child Start’s arguments to the contrary are directed to the question of
whether the issues raised in the Federation’s grievance are moot—a question, as noted,
for the arbitrator to decide. But Child Start does raise two points requiring some
discussion. First, Child Start contends that the Federation’s grievance does not qualify
for arbitration because the Federation is not seeking any specific relief. Child Start points
out that the Federation originally sought rescission of the one-week reduction in the work
year, which is no longer possible since Child Start implemented the reduction in August
2006, and that the Federation agreed in November 2006 not to seek a financial award.
We note, however, that Child Start expressly conceded in the November 2006 settlement
that the Federation “will continue to pursue resolution of” its grievance—an implicit
acknowledgement that the Federation was seeking some other form of relief. In this
regard, the Federation points out that under Article Two, Section 7, a complaint regarding
an interpretation or application of a provision of the Agreement may be pursued to
arbitration; and here, the basis of the Federation’s grievance is that Child Start
misinterpreted or misapplied provisions of the Agreement, including Article Two,
Section 2 (the Job Security provision). In its grievance, the Federation requested Child
Start’s compliance with Article Two, Section 2 plus “any additional relief necessary to
23
rectify this matter.” The Federation explains that in light of its ongoing contractual
relationship with Child Start, it seeks resolution of the parties’ conflicting interpretations
of the Agreement; and citing Stead Motors of Walnut Creek v. Automotive Machinists
Lodge No. 1173, 886 F.2d 1200, 1205 (9th Cir. 1989) (en banc), the Federation contends
that the arbitrator is “the parties’ officially designated ‘reader’ of the contract . . . their
joint alter ego for the purpose of striking whatever supplementary bargain is necessary”
(ellipsis in original, some internal quotation marks omitted). We agree that an arbitrator
may serve to resolve disputes over the interpretation or application of a collective-
bargaining agreement, see Intl. Bhd. of Elec. Workers, 280 Mont. at 58, 929 P.2d at 841;
see also United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S.
574, 578, 80 S. Ct. 1347, 1351 (1960) (noting that “arbitration of labor disputes under
collective bargaining agreements is part and parcel of the collective bargaining process
itself”), and here, Article Two, Section 7, clearly authorizes the arbitrator to resolve such
disputes arising out of the Agreement. We also agree that an arbitrator is not constrained
by Article VII, Section 4(1)’s case-or-controversy requirement and may grant relief that
might not be available in a court of law or equity. See ¶ 25, supra. Thus, it follows from
all this that a simple interpretation of the Agreement (which Child Start characterizes as
an “advisory opinion” by the arbitrator) is in fact a form of “relief” available under the
Agreement and requested by the Federation here.5
5
Child Start cites District 2, Marine Engineers Beneficial Assn. v. Isbrandtsen
Co., 226 N.Y.S.2d 883 (Sup. Ct. 1962), for the proposition that “an actual case or
controversy [is] a prerequisite for any adjudication whether in the courts or by
arbitration.” However, to the extent District 2 stands for this rule, subsequent decisions
24
¶31 Second, Child Start contends that the Federation cannot pursue arbitration of a
grievance that is based on an expired contract. Yet, while the Agreement’s stated term is
January 1, 2003, through December 31, 2006, Article One, Section 2 provides that the
Agreement shall remain in full force until a new agreement is negotiated, and there is no
evidence in the record that a new agreement has been negotiated.6 Furthermore, it should
be noted that the expiration of a collective-bargaining agreement does not necessarily
extinguish a grievance or a party’s obligation to arbitrate it. See Providence Journal Co.
v. Providence Newspaper Guild, 308 F.3d 129, 132 (1st Cir. 2002) (citing Litton Fin.
Printing Div. v. NLRB, 501 U.S. 190, 204, 111 S. Ct. 2215, 2224 (1991), and Nolde
Bros., Inc. v. Bakery and Confectionery Workers Union, 430 U.S. 243, 255, 97 S. Ct.
1067, 1074 (1977)); see also e.g. Solle v. Western States Ins. Agency, 2000 MT 96,
¶¶ 26-29, 299 Mont. 237, 999 P.2d 328. For example, the obligation to arbitrate survives
expiration where (as here) the dispute arose during the life of the contract but arbitration
proceedings had not begun before expiration. See Intl. Union v. Telex Computer Prods.,
Inc., 816 F.2d 519, 522 (10th Cir. 1987) (citing Nolde Bros., 430 U.S. at 251, 97 S. Ct. at
1071-72). And although the Federation is seeking an interpretation of a purportedly
expired contract, the fact is that Child Start and the Federation still have a
suggest that it is no longer a correct statement of the law in New York. See e.g. Bd. of
Educ. v. Merrick Faculty Assn., 410 N.Y.S.2d 876, 879 (App. Div. 2d Dept. 1978); Long
Island Lighting Co. v. Trigen-Nassau Energy Corp., 628 N.Y.S.2d 222, 224 (Sup. Ct.
1995). Likewise, Child Start’s reliance on Portland Web Pressmen’s Union v. Oregonian
Publg. Co., 286 F.2d 4 (9th Cir. 1960), is unpersuasive, as the parties’ controversy in that
case was specifically covered by the Labor Management Relations Act, not the
collective-bargaining agreement.
6
Indeed, Child Start indicates, without explanation, that it does not know “if any
new contract even exists” as of the date of its reply brief in this appeal (April 24, 2008).
25
collective-bargaining relationship which, as the District Court noted, “is dependent on
disputed interpretations of critical and material contract language.” Cf. Intl. Assn. of
Machinists and Aerospace Workers v. BF Goodrich Aerospace Aerostructures Group,
387 F.3d 1046, 1049 (9th Cir. 2004) (noting that courts long have been aggressive in
determining that a collective-bargaining dispute remains live where the disputed issue
continues to shape the parties’ periodic bargaining or day-to-day interaction).
CONCLUSION
¶32 We conclude that a “live” case or controversy existed throughout the proceedings
in the District Court. This case was not moot when the court issued its August 2, 2007
Opinion and Order, and that order is not void under Rule 60(b)(4). Accordingly, the
District Court did not err in denying Child Start’s Rule 60(b) motion.7
Affirmed.
/S/ JAMES C. NELSON
We Concur:
/S/ PATRICIA O. COTTER
/S/ BRIAN MORRIS
/S/ JIM RICE
Justice W. William Leaphart, concurring.
¶34 I agree with the Court’s analysis and framing of the issue as whether there was a
“live” case or controversy in the District Court. The Court concludes that since the
7
The Federation has requested that we award sanctions against Child Start for this
appeal pursuant to M. R. App. P. 19(5). However, we do not agree that Child Start’s
appeal meets the requirements of this rule. The Federation’s request is, therefore, denied.
26
grievance sought “any additional relief necessary,” it was appropriate for the arbitrator to
resolve the parties’ conflicting interpretations of the Agreement, even though the specific
concerns giving rise to this dispute were fait accompli. Given that the grievance sought
any “additional relief necessary to rectify this matter,” (i.e., the particular layoff at issue),
allowing the matter to proceed to arbitration as an abstract interpretation of contract
hangs on a very thin thread. However, in the interest of liberally interpreting pleadings, I
give the grievance the benefit of the doubt.
¶35 Obviously, if the grievance had specifically sought declaratory relief rather than
being so focused on the one-week reduction, the Court would not have to divine the
pleader’s true intent under the catch-all prayer for “any additional relief necessary.”
/S/ W. WILLIAM LEAPHART
27