Reply Brief — Garda CL Northwest, Inc., fka AT Systems, Inc., Petitioner v. Lawrence Hill, et al.

Case No. 18-1083

IN THE

Supreme Court of the United States

GARDA CL NORTHWEST, INC. f/k/a AT

Systems, Inc.,

Petitioner,

v.

LAWRENCE HILL, ADAM WISE, and

ROBERT MILLER, on their own behalves

and on behalf of all persons similarly

situated,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE WASHINGTON SUPREME COURT

REPLY BRIEF IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI

FRED A. ROWLEY, JR.

Counsel of Record

MALCOLM A. HEINICKE

ERIC P. TUTTLE

AARON D. PENNEKAMP

MUNGER, TOLLES & OLSON LLP

350 South Grand Avenue

Fiftieth Floor

Los Angeles, CA 90071-3426

(213) 683-9100

fred.rowley@mto.com

Counsel for Petitioner

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...................................... ii

I.

THE DECISION BELOW IS “FINAL”

FOR PURPOSES OF 28 U.S.C. §

1257(a) ..............................................................2

II.

THIS CASE PRESENTS A SUITABLE

VEHICLE FOR RESOLVING THE

PERSISTENT APPELLATE-COURT

CONFLICT OVER THE SCOPE AND

APPLICATION OF LMRA

PREEMPTION .................................................5

III.

THE WASHINGTON SUPREME

COURT IMPOSED AN

IMPERMISSIBLE STATE-LAW

“CLEAR AND UNMISTAKABLE”

TEST ON COLLECTIVE MEALBREAK WAIVERS .........................................10

CONCLUSION ..........................................................13

ii

TABLE OF AUTHORITIES

Page(s)

FEDERAL CASES

Allis-Chalmers Corp. v. Lueck,

471 U.S. 202 (1985)......................................3, 9, 10

Belknap, Inc. v. Hale,

463 U.S. 491 (1983)................................................4

Cox Broadcasting Corp. v. Cohn,

420 U.S. 469 (1975)............................................2, 3

Enterp. Irrigation Dist. v. Farmers

Mutual Canal Co.,

243 U.S. 157 (1917)................................................7

Foster v. Chatman,

136 S. Ct. 1737 (2016)............................................5

Goodyear Atomic Corp. v. Miller,

486 U.S. 174 (1988)................................................4

Lingle v. Norge Div. of Magic Chef, Inc.,

486 U.S. 399 (1988)........................................11, 13

Livadas v. Bradshaw,

512 U.S. 107 (1994).................................... 8, 11, 13

Michigan v. Long,

463 U.S. 1032 (1983)..........................................5, 6

iii

Mississippi Power & Light Co. v.

Mississippi ex rel. Moore,

487 U.S. 354 (1988)............................................3, 4

Stop the Beach Renourishment, Inc. v.

Fla. Dep’t of Envtl. Prot.,

560 U.S. 702 (2010)................................................7

Valles v. Ivy Hill Corp.,

410 F.3d 1071 (9th Cir. 2005)..............................12

Wright v. Georgia,

373 U.S. 284 (1963)................................................7

STATE CASES

Cal. Grocers Ass’n v. City of Los

Angeles,

254 P.3d 1019 (Cal. 2011) ....................................12

Ehret v. WinCo Foods, LLC,

26 Cal. App. 5th 1 (2018) .....................................13

FEDERAL STATUTES

28 U.S.C. § 1257(a)..............................................1, 2, 3

STATE STATUTES

Cal. Labor Code § 219(a) ...........................................11

1

REPLY BRIEF

This case well-illustrates the lower courts’

continued confusion over the scope of preemption

under the Labor Management Relations Act

(“LMRA”) and the National Labor Relations Act

(“NLRA”). Despite this confusion, Plaintiffs urge this

Court not to accept review, devoting most of their brief

in opposition to the contention that this case is an

inappropriate vehicle for resolving the questions

presented. They argue, for example, that the ruling

below concerning LMRA preemption is not yet “final”

for purposes of 28 U.S.C. § 1257(a), that Garda failed

to preserve its LMRA-preemption argument, and that

the lower court’s “clear and unmistakable” mealperiod waiver requirement for collective bargaining

agreements (“CBAs”) does not implicate any NLRApreemption concerns.

Plaintiffs are wrong at every turn. Because the

opinion below fully and finally decided Garda’s

LMRA- and NLRA-preemption defenses, the

Washington Supreme Court’s decision to remand on

other issues does not create a “finality” problem.

Because the court’s “waiver” holding is bound-up with

its misreading of the parties’ CBAs—and is meritless

to boot—it furnishes no “independent” or “adequate”

state-law ground that could forestall this Court’s

review. And because the lower court’s “clear and

unmistakable” language test for CBA meal-period

waivers is an impermissible state-law rule, not a

federal rule endorsed or adopted by this Court, the

opinion below squarely raises the NLRA-preemption

question presented in the Petition. Certiorari is

warranted.

2

I. THE DECISION BELOW IS “FINAL” FOR

PURPOSES OF 28 U.S.C. § 1257(a)

Plaintiffs maintain that the ruling below is not yet

“final” within the meaning of 28 U.S.C. § 1257(a)

because the Washington Supreme Court “‘remanded

[Plaintiffs’ double-damages claims] to the Court of

Appeals to address Garda’s remaining statutory

defenses …, including whether there was a bona fide

dispute based on [non-LMRA] preemption and

whether the Plaintiffs knowingly submitted to

Garda’s meal period violation.’” BIO 9.

But this Court has never adopted any bright-line

rule insulating a state court’s ruling on federal issues

from review merely because it remands on other, nonfederal aspects of a case. Instead, the Court takes a

“pragmatic approach” to finality. Cox Broadcasting

Corp. v. Cohn, 420 U.S. 469, 486 (1975). According to

that approach, there are several circumstances in

which the Court will “treat[] the decision on the

federal issue as a final judgment for the purposes of”

section 1257 and will “take[] jurisdiction without

awaiting the completion of the additional proceedings

anticipated in the lower state courts.” Id. at 477.

This case falls neatly into at least one such

circumstance:

[W]here the federal issue has been finally

decided in the state courts with further

proceedings pending in which the party seeking

review here might prevail on the merits on

nonfederal grounds, … and where reversal of

the state court on the federal issue would be

preclusive of any further litigation on the

relevant cause of action rather than merely

3

controlling the nature and character of, or

determining the admissibility of evidence in,

the state proceedings still to come. In these

circumstances, if a refusal immediately to

review the state court decision might seriously

erode federal policy, the Court has entertained

and decided the federal issue.

Id. at 482-83.

Here, the Washington Supreme Court has finally

decided a crucial “federal issue”—namely, whether

Plaintiffs’ double-damages claims are preempted by

the LMRA. There is a possibility that Garda will

“prevail” on remand “on nonfederal grounds,” which

would rob this Court of the ability to cure the lower

court’s misguided preemption jurisprudence. This

Court’s “reversal” of the Washington Supreme Court’s

erroneous preemption holding “would be preclusive of

any further litigation” on Plaintiffs’ double-damages

claims. What’s more, the “refusal immediately to

review” the lower court’s preemption decision “might

seriously erode” federal labor policy, including the

long-established policy requiring state-law claims

that are “substantially dependent upon analysis of

the terms of [a CBA]” to be “brought under § 301” of

the LMRA. Allis-Chalmers Corp. v. Lueck, 471 U.S.

202, 210, 220 (1985). Section 1257(a) thus does not

bar this Court’s review.

Indeed, this Court frequently has agreed to review

questions, like those presented here, concerning the

scope of a federal statute’s preemptive force despite

the fact that the state-court decision rejecting

preemption contemplates further proceedings. In

Mississippi Power & Light Co. v. Mississippi ex rel.

4

Moore, 487 U.S. 354 (1988), for example, respondents

argued that the state court’s judgment was “not ‘final’

within the meaning of 28 U.S.C. § 1257 because

further proceedings will be held on remand.” Id. at

370 n.11.

This Court rejected that argument,

however, explaining that “[t]he critical federal

question—whether federal law pre-empts such

proceedings …—ha[d] already been answered by the

State Supreme Court and its judgment [was]

therefore ripe for review.” Ibid. Similarly, in

Belknap, Inc. v. Hale, 463 U.S. 491, 497 n.5 (1983),

this Court found finality where, as here, the state

court’s decision “finally disposed of the federal

preemption issue.” See also Goodyear Atomic Corp. v.

Miller, 486 U.S. 174, 178-79 (1988) (deeming a

judgment final “even though further proceedings are

anticipated” because “[t]he federal question whether

the additional workers’ compensation award is barred

by federal law has been finally determined by the

Ohio Supreme Court”).

Plaintiffs nevertheless claim that the decision

below is not “final” because “[n]o federal policy would

be seriously eroded by leaving in place the

Washington Supreme Court’s holding that Garda

failed to preserve its CBA-based arguments.” BIO 1213. But that argument is built on the (false) premise

that the lower court’s “waiver” holding is an

independent and adequate state law ground that,

alone, supports the lower court’s no-preemption

holding. As described below, that “waiver” holding

falls short of both the “independent” and “adequate”

marks. See infra 5-7; see also Pet. 25-26. This Court

should accordingly reject Plaintiffs’ arguments based

on 28 U.S.C. § 1257(a)’s finality requirement.

5

II. THIS CASE PRESENTS A SUITABLE

VEHICLE

FOR

RESOLVING

THE

PERSISTENT

APPELLATE-COURT

CONFLICT OVER THE SCOPE AND

APPLICATION OF LMRA PREEMPTION

Plaintiffs resist certiorari on Garda’s first question

on two grounds. First, they argue that this case is a

poor vehicle for addressing the scope of LMRA

preemption because the Washington Supreme Court

held that Garda “fail[ed] to preserve the essential

premise of” its preemption arguments. BIO 14.

Second, Plaintiffs contend that there is no real split of

authority on the LMRA-preemption issue presented

by this case. Neither argument is persuasive.

A. To start, Plaintiffs’ alleged vehicle problem is

illusory. Under the independent-and-adequate-statelaw doctrine, “[t]his Court lacks jurisdiction to

entertain a federal claim on review of a state court

judgment ‘if that judgment rests on a state law

ground that is both “independent” of the merits of the

federal claim and an “adequate” basis for the court’s

decision.’” Foster v. Chatman, 136 S. Ct. 1737, 1745

(2016) (citation omitted). Here, the Washington

Supreme Court’s “waiver” holding is neither

“independent” nor “adequate.”

On independence: “[W]hen the … independence of

any possible state law ground is not clear from the

face of the opinion, [this Court] will accept as the most

reasonable explanation that the state court decided

the case the way it did because it believed that federal

law required it to do so.” Michigan v. Long, 463 U.S.

1032, 1040-41 (1983). Here, that presumption weighs

in favor of this Court’s jurisdiction. After all, the

6

Washington Supreme Court went on to interpret the

language in Plaintiffs’ CBAs despite purporting to

find “waiver,” and fully and finally decided that it had

authority to do so under the LMRA. See Pet.App. 13a20a.

Because the state court plainly found it

necessary to address the LMRA-preemption

questions at issue in this Petition, its “waiver” holding

is not “clear[ly]” “independent” and does not preclude

this Court’s review of those same federal questions.

That is doubly so here, where the Washington

Supreme Court’s “waiver” holding is “‘interwoven’”

with the preemption issues raised by Garda’s

Petition. Long, 463 U.S. at 1038 n.4 (citation

omitted). Contrary to Plaintiffs’ claim, this was not a

simple matter of “the Washington Supreme Court

read[ing] [Garda’s] briefs incorrectly.”

BIO 16.

Garda’s briefs deliberately used the “on duty”/“off

duty” language because that was the language used

in the relevant CBAs: “on duty” meal periods in the

CBAs were periods that Plaintiffs must work through;

“off duty” periods were periods that required no work.

See Pet.App. 15a-16a. Garda’s briefs argued that

Plaintiffs waived this latter category of meal periods

in their CBAs, in favor of being paid for the former.

The Washington Supreme Court nevertheless found

that Garda had “waived” its waiver argument only

because that court leveraged Washington state law’s

unique understanding of the meaning of the term “on

duty” to misinterpret the parties’ CBAs and, in turn,

Garda’s appellate briefs.

That reasoning itself

contravenes section 301 of the LMRA and this Court’s

precedents. In these circumstances, “where the nonFederal ground is so interwoven with the other as not

to be an independent matter,” this Court’s

7

“jurisdiction is plain.” Enterp. Irrigation Dist. v.

Farmers Mutual Canal Co., 243 U.S. 157, 164 (1917).

Nor is the “waiver” holding an “adequate” basis for

the Washington Supreme Court’s no-preemption

determination. As this Court has long explained,

Plaintiffs cannot evade Supreme Court review by

relying on a (purported) state-law ground “so

certainly unfounded that it properly may be regarded

as essentially arbitrary, or a mere device to prevent a

review of the decision upon the federal question.”

Ibid. Instead, this Court “insist[s] that the nonfederal

ground of decision have ‘fair support.’” Stop the Beach

Renourishment, Inc. v. Fla. Dep’t of Envtl. Prot., 560

U.S. 702, 725 (2010).

There is no such “fair support” here. As the court

below acknowledged, Garda argued that Plaintiffs

had affirmatively waived their right to a “meal period

… during which the employee is relieved of all work

duties.” Pet.App. 12a (emphasis added). Although

Garda might not have used particular state-law

magic words in making that argument, the substance

of Garda’s argument was broad enough to cover the

meal-period rights Plaintiffs seek to enforce in this

case—that is, meal periods during which Plaintiffs

are so “relieved of all work duties” that they need not

even be present at the workplace. See Pet. 25-26; BIO

3. This Court should therefore reject the Washington

Supreme Court’s “waiver” argument as inadequate to

support its no-LMRA-preemption conclusion. See

Wright v. Georgia, 373 U.S. 284, 289-91 (1963)

(finding “no adequate state ground” based on

“abandon[ment]” because “[o]bviously petitioners did

in fact argue the point which they press in this

Court”).

8

B. Plaintiffs’ attempts to reconcile the decision

below with this Court’s precedents and the other

appellate decisions discussed in Garda’s Petition

likewise fall flat.

Plaintiffs first discuss Livadas v. Bradshaw, 512

U.S. 107 (1994), claiming that the holding in that case

fully supports the Washington Supreme Court’s nopreemption determination. See BIO 19-21. That is

wrong. Livadas, in fact, says little of merit about the

preemption issues involved here. There, unlike here,

the Court considered whether enforcement of a nonnegotiable state-law right was preempted by section

301 of the LMRA. Livadas, 512 U.S. at 125. And

there, unlike here, the CBA was “irrelevant to the

dispute” because “there [was] no suggestion [] that

[plaintiff’s] union sought or purported to bargain

away her protections under” state law. Ibid. Here,

the Washington Supreme Court expressly assumed

that the state-law right could be bargained away, and

the crucial question became whether the CBAs should

be interpreted to accomplish that. It then erred in

applying state law to interpret terms in the CBAs and

to require greater clarity and specificity in CBAs than

in individual contracts.

Indeed, Livadas only underscores the magnitude

of the Washington Supreme Court’s error: Livadas

notes that while state courts may “interpret[] the

terms of [CBAs] in resolving non-pre-empted claims,”

they “must apply federal common law” when doing so.

Id. at 123 n.17 (emphasis added). The court below did

not follow that command; instead, it applied “[a] state

rule that purports to define the meaning or scope of a

term in” the parties’ CBAs—a tack that “is pre-

9

empted by federal labor law.” Allis-Chalmers, 471

U.S. at 210.

Plaintiffs next contend that the appellate

decisions cited in Garda’s Petition “fail[] to support

any claim of decisional conflict” because none of those

cases “address[] issues of asserted CBA waiver of

actionable state statutory rights.” BIO 23; see also id.

at 22-23. But any differences concerning the context

in which the LMRA-preemption issue arises does not

ameliorate the tension between the LMRApreemption rules announced in Garda’s cited cases

and the holding below. As Garda explained in its

Petition, the Fourth, Seventh, and Ninth Circuits

have correctly held that state-law claims are

preempted when they require the plaintiff to show

that the defendant’s conduct was “willful,”

“wrongful,” or otherwise unreasonable and thus

depend on whether the defendant’s behavior violated

the terms of a CBA. See Pet. 21-22. Here, by contrast,

the Washington Supreme Court adopted a different

preemption rule, finding no LMRA preemption

despite the fact that Plaintiffs must establish that

Garda’s failure to pay them for meal periods was

“willful,” and despite the fact that resolving that

“willfulness”

question

would

require

close

examination of the parties’ CBAs. Id. at 23.

Finally,

Plaintiffs

protest

that

Garda’s

understanding of the scope of LMRA preemption is

“extreme” and cannot be correct. BIO 24-25. But that

is a merits argument, and does nothing to change the

need for this Court’s intervention. In any event, there

is nothing “extreme” in suggesting that the lower

courts should uniformly apply the LMRA-preemption

rules described in Allis-Chalmers and its progeny,

10

whereby state-law claims that, as here, are

“substantially dependent upon analysis of the terms

of an agreement made between the parties in a labor

contract” “must be brought under § 301 and be

resolved by reference to federal law.” 471 U.S. at 210,

220.

III. THE WASHINGTON SUPREME COURT

IMPOSED AN IMPERMISSIBLE STATELAW “CLEAR AND UNMISTAKABLE”

TEST ON COLLECTIVE MEAL-BREAK

WAIVERS

Plaintiffs next contend that there is no NLRApreemption issue for this Court to resolve because the

Washington state law that Garda complains of—that

is, the requirement that collective waivers of mealperiod rights be stated in “clear and unmistakable”

language—is not really a state law at all, but is,

instead, a federal rule of CBA interpretation. BIO 2526. Wrong again. The Washington Supreme Court’s

clear-statement rule is wholly a creature of state law,

and because that rule applies only to CBAs, the rule

runs afoul of the NLRA.

As an initial matter, contrary to Plaintiffs’ claim,

there is no federal clear-statement rule that governs

collectively bargained waivers in cases like this one,

where state law plainly allows individual employees

to negotiate away their meal-period rights. Here,

Plaintiffs do not, and cannot, dispute that

Washington’s meal-period rights are “negotiable.”

The Washington Court of Appeals held as a matter of

state law that these rights were individually

negotiable, but not collectively negotiable.

See

Pet.App. 51a-54a. The Washington Supreme Court

11

attempted to soften this blatant discrimination

against collective bargaining by adopting a slightly

more subtle rule: It explicitly assumed as a matter of

state law that the rights were collectively negotiable,

but then applied a heightened standard that CBAs

uniquely must meet to actually negotiate those rights.

See Pet.App. 19a.

As a result, the cases Plaintiffs cite to support the

Washington Supreme Court’s clear-statement rule

are entirely inapposite. Each of Plaintiffs’ cases

concerned either non-negotiable state rights or

certain fundamental federal labor rights.

For

example, Livadas considered whether a plaintiff had

“bargain[ed] away [certain employee] protections”

under California law. 512 U.S. at 125. This Court

held that any such “waiver … would (especially in

view of Labor Code § 219) have to be clear and

unmistakable.”

Ibid. (emphasis added; internal

quotation marks omitted). The driving force behind

this Court’s “clear and unmistakable” test was

therefore a California statute that made the rights in

question non-negotiable. See Cal. Labor Code § 219(a)

(“[N]o provision of this article can in any way be

contravened or set aside by a private agreement.”).

Other decisions of this Court confirm this limited

application of the federal clear-statement rule. See,

e.g., Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S.

399, 409-10 n.9 (1988) (“We note that under Illinois

law, the parties to a [CBA] may not waive the

prohibition against retaliatory discharge…. Before

deciding whether such a state-law bar to waiver could

be pre-empted under federal law by the parties to a

[CBA], we would require ‘clear and unmistakable’

12

evidence … in order to conclude that such a waiver

had been intended.”).

Valles v. Ivy Hill Corp., 410 F.3d 1071 (9th Cir.

2005), is consistent with this limited view of the

federal clear-statement rule’s scope.

Plaintiffs

suggest that Valles “h[eld] that the clear-andunmistakable standard applies ‘where … under state

law waiver of state rights may be permissible.’” BIO

28 (quoting Valles, 410 F.3d at 1076). That is wrong.

The holding in Valles could not possibly have said

anything about whether negotiable state rights can be

waived only through “clear and unmistakable”

language because the meal-period rights at issue in

that case—unlike in this case—were non-negotiable.

See 410 F.3d at 1082.

Plaintiffs’ opposition to certiorari is thus

fundamentally flawed. There is no basis in federal

law for the discriminatory standard that the

Washington Supreme Court applied in finding waiver

of negotiable rights in CBAs, but not in individual

contracts. Instead, that court adopted an expanded

state clear-statement rule of CBA construction that

improperly discourages the collective-bargaining

process. That rule is therefore preempted by the

NLRA. See Cal. Grocers Ass’n v. City of Los Angeles,

254 P.3d 1019, 1031 n.7 (Cal. 2011) (“[R]egulations

aimed solely at unionized workers may intrude into

aspects of organizing and bargaining Congress

intended the states not to regulate.”).

This Court should accordingly grant certiorari not

only to correct the Washington Supreme Court’s

error, but also to cure the appellate courts’ continued

confusion over the proper scope and application of the

13

clear-statement rule described in Livadas and Lingle.

See Pet.App. 18a-20a; Ehret v. WinCo Foods, LLC, 26

Cal. App. 5th 1, 6 (2018).

CONCLUSION

The Court should grant Garda’s petition.

Respectfully submitted,

FRED A. ROWLEY, JR.

Counsel of Record

MALCOLM A. HEINICKE

ERIC P. TUTTLE

AARON D. PENNEKAMP

MUNGER, TOLLES &

OLSON LLP

350 South Grand Avenue,

50th Floor

Los Angeles, CA 900713426

(213) 683-9100

fred.rowley@mto.com

Counsel for Petitioner