General Teamsters Union Local No. 174 v. Trick & Murray, Inc.

FLETCHER, Circuit Judge,

dissenting:

I respectfully dissent from Part III of the majority’s opinion. Consideration of *1425 the three factors set forth in Chevron Oil Co. v. Huson, 404 U.S. 97 , 92 S.Ct. 349 , 30 L.Ed.2d 296 (1971), convinces me that retroactive application of Teamsters Union Local 315 v. Great Western Chemical Co., 781 F.2d 764 (9th Cir.1986) (Great Western), is inappropriate.

First, I am at a loss to understand the majority’s conclusion that Great Western was clearly foreshadowed by DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151 , 103 S.Ct. 2281 , 76 L.Ed.2d 476 (1983). Prior to DelCostello , state statutes of limitations applied to all section 301 cases. DelCostello borrowed a federal six month rule for one category of those cases, hybrid cases in which the employee sued the union for breach of the duty of fair representation, in addition to suing the employer. Great Western applied the DelCostello rule, previously used in hybrid cases, to an entirely different type of proceeding — one in which a union sued to compel an employer to arbitrate. The Great Western court does not suggest that its result was clearly foreshadowed by DelCostello .

The majority asserts that the dicta in footnote 12 of DelCostello “foreshadowed the abandonment of applying state statutes of limitations to section 301 suits to compel arbitration.” Ante at 1422. In the light of language used in the text of DelCostello , however, it cannot be said that the future applications of section 10(b) were at all predictable. The DelCostello Court stated:

We stress that our holding today should not be taken as a departure from prior practice in borrowing limitations periods for federal causes of action, in labor law or elsewhere. We do not mean to suggest that federal courts should eschew use of state limitations periods anytime state law fails to provide a perfect analogy____ On the contrary, as the courts have often discovered, there is not always an obvious state-law choice for application to a given federal cause of action; yet resort to state law remains the norm for borrowing limitations periods.

462 U.S. at 171 , 103 S.Ct. at 2294 (citation omitted) (emphasis added). This statement, standing alone, convinces me that those who did not guess the scope of DelCostello ’s progeny should not be penalized.

However, in addition to the plain language of DelCostello , we have this court’s pro-Great Western analysis of DelCostel lo’s footnote 12. It further erodes any claim that Great Western was clearly foreshadowed. In United Brotherhood of Carpenters v. FMC Corp., 724 F.2d 815 , 817 n. 1 (9th Cir.1984) (FMC), we rejected a broad reading of footnote 12. Rather, we (1) noted that DelCostello approved the continuing use of state statutes of limitations in section 301 actions; (2) recognized the requirement that the section 301 action resemble an unfair labor practice charge before section 10(b) is applicable; and (3) emphasized that footnote 12 dealt only with section 301 actions brought by employees against employers. Id. 1

The majority’s attempt to distinguish FMC fails to convince. The majority ar *1426 gues the union should not have relied on FMC because here, in contrast to FMC, (1) there is no state statute of limitations that directly governs this dispute and (2) “the underlying dispute involves a representation issue and therefore resembles an unfair labor practice.” Ante at 1421.

In response, first, it must be noted that under DelCostello “resort to state law remains the norm” even though state law may not provide a perfect analogy. 462 U.S. at 171 , 103 S.Ct. at 2294 . Second, regardless of the underlying dispute, the action before the district court was one to compel arbitration. It is not at all clear that an action to compel arbitration is analogous to an unfair labor practice claim. It is an action to enforce a contract; 2 the district court is not permitted to consider the merits of the underlying dispute — its only role is to decide whether the parties agreed to arbitrate the dispute. United Steelworkers v. American Mfg. Co., 363 U.S. 564, 567-69 , 80 S.Ct. 1343, 1346-47 , 4 L.Ed.2d 1403 (1960). The Great Western court did not address the “closer analogy” prong of DelCostello ; rather it adopted the conclusion of the Third Circuit in Federation of Westinghouse Independent Salaried Unions v. Westinghouse Electric Corp., 736 F.2d 896 (3d Cir.1984), that the section 10(b) period should apply to actions to compel arbitration. Great Western, 781 F.2d at 769 . The Third Circuit, to the extent it found an analogy, relied on the fact that the underlying dispute in an action to compel arbitration may involve an activity that is an unfair labor practice. Westinghouse, 736 F.2d at 902 . This is a rather weak analogy since the actual dispute — whether the parties agreed to submit a particular issue to arbitration — has little in common with the typical unfair labor practice dispute. I find the union’s reliance on FMC perfectly reasonable.

In sum, language in both DelCostello and FMC at a minimum made Great Western’s extension of DelCostello to actions to compel arbitration difficult to predict. Certainly the extension was not clearly foreshadowed. Thus, I would find that consideration of the first Chevron factor, which is also the most important, McNaughton v. Dillingham Corp., 722 F.2d 1459, 1461 (9th Cir.1984), argues for the nonretroactivity of Great Western in this case.

As to the second Chevron factor, retroactive application will not further Great Western’s goal of promoting prompt resolution of labor disputes. The union’s complaint seeks either an order compelling arbitration or damages for breach of the collective bargaining agreement. Under the majority’s opinion, the union may now proceed with its breach of contract claim. Judicial resolution of this dispute will take at least as long as would arbitration. Not only does this result fail to promote Great Western’s articulated goals, it also flies in the face of the well-established and important policy of favoring resolution of labor disputes through arbitration. See generally United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 , 80 S.Ct. 1347 , 4 L.Ed.2d 1409 (1960). Cf. Galindo v. Stoody Co., 793 F.2d 1502 , 1510 n. 4 (9th Cir.1986) (finding that “the policy of nonjudicial resolution of labor disputes should outweigh the policy of prompt resolution of labor disputes in cases where the pursuit of contractual remedies would toll the statute for only a few months”).

Finally, application of the third Chevron factor, whether inequity will result from retroactive application, weighs against retroactivity: “It would also produce the most ‘substantial inequitable results’ ... to hold that the [union] ‘slept on [its] rights’ at a time when [it] could not have known the time limitation that the law imposed upon [it].” Chevron, 404 U.S. at 108 , 92 S.Ct. at 356 (quoting Cipriano v. City of Houma, 395 U.S. 701, 706 , 89 S.Ct. 1897, 1900 , 23 L.Ed.2d 647 (1969)). Because Great Western was decided after this suit was filed and, to my mind, was not predictable in the least, it is unfair and unreasonable to penalize the union for its failure to act in accordance with its holding. I would *1427 hold that the rule announced in Great Western does not apply to this case and, accordingly, that the district court erred in dismissing the union’s action to compel arbitration.

. Footnote 1 of FMC Corp., 724 F.2d at 817, in its entirety, states as follows:

In footnote 12, the Supreme Court in DelCostello indicates that it would have applied the six-month limitation period of § 10(b) to the employees’ suits even if the suits had been brought exclusively under § 301. 103 S.Ct. at 2287 n. 12. The union contends that footnote 12 requires that the six-month limitation period of § 10(b) be applied to all actions arising under § 301, no matter how unlike an unfair representation charge they may be.

The union reads far too much into footnote 12. The Supreme Court approves drawing a limitation period from state law when the § 301 claim does not resemble an unfair labor practice charge. See DelCostello, 103 S.Ct. at 2289-90 (approving Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696 , 86 S.Ct. 1107 , 16 L.Ed.2d 192 (1966), which applied the state limitation for breach of contract actions to a suit by a union alleging a violation of the collective bargaining agreement); id. 103 S.Ct. at 2294 . Footnote 12 addresses only a § 301 action brought by an employee against the employer. Unlike the present action, that particular § 301 action should be governed by the § 10(b) limitation period; it closely resembles an unfair labor practice charge because the employee cannot prevail unless he establishes a breach of the duty of fair representation by the union. See DelCostello, 103 S.Ct. at 2290-91 ; Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 570-71 , 96 S.Ct. 1048, 1059 , 47 L.Ed.2d 231 (1976).

. That rationale would suggest that Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696 , 86 S.Ct. 1107 , 16 L.Ed.2d 192 (1966) would govern.