Opposition Brief — United Food & Commercial Workers International Union v. John Morrell & Co.

FILLED

| APR 5 199)

7

No. 90-1394 | OFFICE Ge THE CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM 1990

United Food and Commercial Workers

International Union and Its Local 304A,

Petitioners,

John Morrell & Co.,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Eighth Circuit

BRI! F IN OPPOSITION

JeReMIAH D. MURPHY

James E. MCMAHON

Boyce, MurPHyY, MCDOWELL

& GREENFIELD

Post Office Box 5015

Sioux Falls, SD 57117

(605) 336-2424

DATED: April 8, 1991

——_

GEORGE A. JOSEPH

(Counsel of Record)

MICHAEL P. FORADAS

CHAIM T. KIFFEL

Lestie M. SMITH

KIRKLAND & ELLIS

200 East Randolph Drive

Chicago, IL 60601

(312) 861-2274

i

QUESTIONS PRESENTED

Morrell believes the questions presented are more prop-

erly phrased as set forth below.

The breach of contract action raises the following

question:

1. Did the lower courts err in ruling (a) that the particu-

lar collective bargaining agreement in this case was ambigu-

ous and (b) that the jury was permitted to decide, using

extrinsic evidence, whether the parties intended the contract

to bar sympathy strikes?

The action to overturn the arbitration award raises the

following questions:

2. Did the lower courts err in ruling that, under the

particular facts of this case, a labor arbitrator had exceeded

the scope of his authority in concluding that the collective

bargaining agreement permitted sympathy strikes where the

courts found that both parties had expressly agreed not to

submit the issue to the arbitrator?

3. Did the lower courts err in ruling that an arbitrator

may not ignore the collateral estoppel effect of a prior

liability judgment that is entered following a full trial on the

merits and the denial of all post-trial motions simply be-

cause the judgment was not appealable until the separate

issue of damages was decided? (This question would be

reached only if this Court were to grant certiorari on

Question 2 and rule that the lower courts had erred in

finding that the arbitrator had exceeded the scope of his

authority.)

ii

LIST OF PARTIES

John Morrell & Co. is a wholly-owned subsidiary of

Chiquita Brands International, Inc., which in turn is approx-

imately 53% owned by American Financial Corporation and

certain of its wholly-owned subsidiaries. John Morrell &

Co. has one subsidiary, Carmell Corporation.

TABLE OF CONTENTS

Page

GE EWU ee PREOEINIED . occ cc ccc cccceses i

EE ncn csc ccc css cesbceesavees il

pp a yy ey | Oe v

COUNTERSTATEMENT OF THE CASE ....... |

eer 4

I. THE ISSUES UPON WHICH REVIEW IS

SOUGHT CONCERNING THE SCOPE OF

THE UNIONS’ NO-STRIKE OBLIGATIONS

ARE NOT WORTHY OF THIS COURT'S

DISCRETIONARY JURISDICTION ......... 4

A. The Lower Courts’ Determination That The

Parties’ No-Strike Clause Is Ambiguous Is

Not Appropriate For Review ............... 5

B. There Is No Conflict Among The Circuits

Regarding The Admissibility Of Extrinsic Evi-

dence Concerning The Parties’ Intent Under

An Ambiguous No-Strike Clause And, In

Any Case, The Unions Waived The Issue

EES 8

1. All Courts Agree That Extrinsic Evidence

May Be Considered In Construing An

Ambiguous No-Strike Clause............ 8

(a) There is no conflict between the Sev-

enth and Eighth Circuits............ 9

(b) All other circuits are in accord with

the Seventh and Eighth Circuits ..... 16

2. Even If A Conflict Arguably Exists, The

Unions Waived The Issue Below ......... 18

iv

Il. THE ISSUES RAISED BY THE

OVERTURNING OF THE ARBITRATION

AWARD DO NOT MERIT A GRANT OF

«x oP Perr Te reer rr eee 20

A. The Eighth Circuit Applied Settled Legal

Principles In Deciding That The Arbitrator

Had Exceeded The Parties’ Submission ...... 20

B. There Is No Conflict Among The Circuits

Regarding The Applicability Of Collateral

Estoppel To Bar Arbitrators From

Disregarding Prior Judicial Decisions ........ 24

C. Certiorari Review of the Eighth Circuit's

Specific Application Of Collateral Estoppel

Principles To The Facts Of This Case Is Not

CEE SEs ncn Vou swasebensvasnsey ates 27

CO INIT oo 66 Ke reece ss Cuvee we vecnetes 30

v

TABLE OF AUTHORITIES

Cases Page

Aetna Cas. & Sur. Co. v. Jeppesen & Co., 440 F.

gs Pre re eae ee 28

Aiello v. City of Wilmington, 470 F. Supp. 414 (D.

Del. 1979), aff'd, 623 F.2d 845 (3d Cir. 1980).... 28

Amcar Div., ACF Indus., Inc. v. NLRB, 641 F.2d

SOU COUN GO GOED oo vce cccwnsetabeeeace 10, 19

Arizona v. California, 460 U.S. 605 (1983) ........ 28

AT&T Technologies, Inc. v. Communications

Woermera, 475 US. G43 (ISRG) 2... cc ccccccsccccc 21

Avondale Shipyards, Inc. v. Insured Lloyd's, 786 F.2d

SOG Qoee Gk WOOD wiv i cchewnceccechedcubene 28

Buffalo Forge Co. v. United Steelworkers,

GOO CAs Set COMPU aN cieidusedeeseuccukiess 2,3

Burmah Oil Tankers, Ltd. v. Trisun Tankers, Ltd.,

687 F. Supp. 897 (S.D.N.Y. 1988)...:.......... 25

Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213

COUNTS 0 hkws oss cans bane suxunebasubicnsowebicns 26

Delaware Coca-Cola Bottling Co. v. General

Teamster Local Union 326, 624 F.2d 1182

| ee ere Pn on nae 16

Gary Hobart Water Corp. v. NLRB, 511 F.2d 284

(7th Cir.), cert. denied, 423 U.S. 925 (1975) .. passim

Hudson-Berlind Corp. v. Local 807, Int'l Bhd. of

Teamsters, 597 F. Supp. 1282 (E.D.N.Y. 1984)... 25

Indianapolis Power & Light Co. v. NLRB,

ogee Foe, be | es ree 1S

IBEW, Local 803 v. NLRB, 826 F.2d 1283 (3d Cir.

WUE: ShedES uncweshNupavee teukeesaeertayies 17

International Chem. Workers Union v. Mobay Chem.

Corp., 755 F.2d 1107 (4th Cir. 1985)............ 21

vi

Cases =

Johnston Boiler Co. v. Local Lodge No. 893, 753 F.2d

40 (6th Clr. T5GBD no vd dneccviessseueteee 21

Lackawana Leather Co. v. UFCW, 706 F.2d 228

(Sth Cie. 19635) Catt QOMED . c.cs cundecaauacees 22, 23

Local 791, Int'l Union of Elec. Radio & Mach.

Workers v. Magnavox Co., 286 F.2d 465 (6th Cir.

IGGED on oc cdcccccensbenee eakeeee eee 23

Local Union 1395, IBEW v. NLRB, 797 F.2d 1027

(DC. Caz, TERE asks kee 15, 17

Lummus Co. v. Commonwealth Oil Ref. Co.,

297 F.2d 80 (2d Cir. 1961), cert. denied,

368 U.S. SR6 CORE o osctsa See 28

Mastro Plastics Corp. v. NLRB, 350 U.S. 270 (1956)... 4

McDonald vy. City of West Branch, Michigan,

466 U.S. Fae Cis ccccvceteucieseeecex 26, 27

Metropolitan Edison Co. v. NLRB,

466 US, Gs Cire o ccs saseeenscae 4-5, 10, 19

Miller Brewing Co. v. Fort Worth Distrib. Co., 781

F268 4B0 (5 Car, Gi xo Oh cs veccasedieera 25

Mobil Oil Corp. v. Independent Oil Workers Union,

ae 2k Ls reer 21-22

NLRB vy. C.K. Smith & Co., 569 F.2d 162 (1st Cir.

1977), cert. denied, 436 U.S. 957 (1978)......... 16

NLRB v. Gould, Inc., 638 F.2d 159 (10th Cir. 1980),

oe @ vais & Fi. .) Ree 17

NLRB y. Southern Cal. Edison, 646 F.2d 1352 (9th

|) ee ree te On bs 17

Pacemaker Yacht Co. v. NLRB, 663 F.2d 455 (3d Cir.

WORD). vccvcvicccretresneeetemni ere 16-17

Vii

Cases Page

Piggly Wiggly Operators’ Warehouse, Inc. v.

Piggly Wiggly Operators’ Union, 611 F.2d 580

Ce eee EE wi on Ves Ss Sis sos swe See aek bale 22, 24

Pitta v. Hotel Ass'n of New York City, Inc., 643 F.

Supp. 247 (S.D.N.Y.), vacated on other grounds,

Dee Fee SE Gls PEE cv ce cwugunesrcccaas 25

Realex Chem. Corp v. S.C. Johnson & Son, 849 F.2d

Bee ee SE ok sb baNG pecece dew kecupenees 6, 7

Retail Store Employees Union, Local 782 v. Sav-On

Groceries, 508 F.2d 500 (10th Cir. 1975) ........ 23

Ryder Truck Lines, Inc. v. Teamsters Freight Local

Union, 727 F.2d 594 (6th Cir.), cert. denied, 469

GR SE nc pau puccs-ke ewakeven etn enls 17

Sunshine Mining Co. v. United Steelworkers, 823

of ge of, 1s |) ee, Serer 21

Synergy Gas Co. v. Sasso, 853 F.2d 59 (2d Cir.), -

cert. denied, 488 U.S. 994 (1988) ............... 21

Telephone Workers Union, Local 827 v. New Jersey

Bell Tel. Co., 584 F.2d 31 (3d Cir. 1978) ........ 25

Textile Workers Union v. American Thread Co.,

ro A ee 22

United Elec. Radio & Mach. Workers vy. Litton

Microwave Cooking Products, Litton Sys., Inc.,

728 F.2d 970 (8th Cir. 1984)(en banc) .......... 23

UFCW vy. Safeway Stores, Inc., 889 F.2d 940 (10th

ee rere ere rir re tee 21

United Paperworkers Int'l Union v. Misco,

484 U.S. 29 (1987)....... Pere re eee 20

United States Steel Co. v. NLRB, 711 F.2d 772

tot | Rr irene? 12, 13, 14, 15

vill

Cases Page

United Steelworkers v. Enterprise Wheel & Car Corp.,

ee ee Es vices denascceschesseetkic 20

United Steelworkers v. Warrior & Gulf Navigation Co.,

Co? CR ere amare 20-21

W. R. Grace & Co. v. Rubber Workers,

See Se Se SD es oc dce shin ceeesunees 25, 26

W-I Canteen Service, Inc. v. NLRB, 606 F.2d 738

ROS ER errr rt 11, 12, 13

Statutes |

ee Se er ee rere ee Tere 5

ee OD hits ccadetawedeusehan Rs

Miscellaneous )

Restatement (Second) of Judgments §13.......... 28

COUNTERSTATEMENT OF THE CASE

Following a ten-day trial, the jury below found that the

unions had cleariy and unmistakably waived the nght to

engage in sympathy strikes under the parties’ collective

bargaining agreement (“Agreement”) and that, therefore.

the three sympathy strikes at issue were a breach of the

Agreement. Subsequently, in an arbitration over seniorty

rights of recalled strikers, an arbitrator swa sponte disre-

garded the jury’s verdict, finding that the Agreement did not

prohibit sympathy strikes. The Eighth Circuit affirmed both

the jury verdict for Morrell and the district court's conclu-

sion that the inconsistent arbitrator's award must be va-

cated. Those rulings were well-supported by the record

The unions advised Morrell during contract negotiations

in 1982 that the parties’ no-strike clause barred al! strikes

App. 16a. Subsequently, during the 1985 negotiations over

the successor agreement, the unions tried to amend the no-

strike clause to permit their members to honor picket lines

set up by employees from other plants. /d. 16a-17a. Morre!!

repeatedly rejected that proposal because it would “essen-

tially eviscerate” the contract's no-strike clause by permit-

ting sympathy strikes. /d. The unions never disputed during

negotiations Morrell’s conséruction of the clause.

Instead of accepting a dilution of the no-strike clause in

1985, Morrell strengthened it by obtaining a “struck work”

provision, which “expressly obligates the [Sioux Falls)

workers to accept work transferred from another Morre!!

plant which is on strike.” /d. 15a. The “struck work” clause

reinforced the ban on sympathy strikes because “[t}hat

protection would be rendered meaningless if Sioux Falls

employees could avoid their contractual duty to accept work

from striking plants by simply engaging in a sympathy

strike.” /d. Having abandoned their efforts to add language

allowing sympathy strikes, and having agreed that they

2

would perform struck work, the unions signed the new

Agreement in November 1985.

On August 4, 1986, employees from Morrell’s Kansas

plant set up a picket line at the company’s Sioux Falls plant.

Morrell reminded the unions that the Sioux Falls employees

were required to cross the picket line. Nevertheless, they

honored it. A similar incident occurred eleven days later.

Morrell sued for damages under Section 301 of the Labor

Management Relations Act, 29 U.S.C. § 185, in the federal

court in Sioux Falls. Following an evidentiary hearing, the

court enjoined further strikes under Buffalo Forge Co. v.

United Steelworkers, 428 U.S. 397 (1976), finding that the

second strike had been over an arbitrable dispute. App. 70a.

On appeal, the Eighth Circuit vacated the preliminary

injunction. App. 60a. (“Morrell I’) The court held that the

strikes were sympathy strikes and therefore not enjoinable

under Buffalo Forge, regardless of whether or not such

strikes breached the contract. The court remanded the case

for further proceedings on Morrell’s claim that it was

entitled to damages because the strikes violated the Agree-

ment. App. 69a n.7.

In 1986, while the parties were litigating the legality of

the injunction, the unions initiated, but ultimately refused to

continue, an arbitration proceeding that directly raised the

question of whether sympathy strikes were barred under the

Agreement. In light of the unions’ representations to the

Eighth Circuit in Morrell I that they were prepared to

arbitrate that issue, App. 66a, Morrell asked the unions to

agree to proceed with the arbitration. The unions refused,

forcing resolution of the scope of the no-strike clause to be

resolved in Morrell’s federal court case.

With the unions avoiding arbitration and the Eighth

Circuit refusing to enjoin the strike, Morrell filed a petition

for writ of certiorari asking this Court to overrule Buffalo

|

3

Forge so that employers could stop sympathy strikes in

breach of collective bargaining agreements. The Court de-

nied the petition. 481 U.S. 1014 (1987). Morrell was left

with only one remedy—its Section 30] damages suit. Less

than a month later, with Morrell powerless to prevent

further sympathy strikes, the Sioux Falls employees struck

again when pickets from another Morrell plant appeared at

Sioux Falls. This strike lasted six months.

Liability on Morrell’s Section 301 suit was tried in March

1988 in federal district court—the forum that the unions had

chosen to have the legality of sympathy strikes decided.

Under concededly proper instructions, the jury found that

the unions had “clearly ond unmistakably” waived the night

to engage in sympathy strikes and had violated the Agree-

ment by engaging in them. App. 10a n.8.

The district court denied the unions’ post-trial motions on

May 18, 1988. All that remained was to hold a separate trial

on Morrell’s damage claims.

On August 25, 1988, five months after the liability verdict

and three months after the district court had denied the

unions’ post-trial motions, an arbitration took place in re-

sponse to a new union grievance. which claimed that recal-

led strikers were entitled to their pre-strike positions. The

stipulated submission to the arbitrator was as follows: “Do

the seniority and discrimination provisions of the parties’

collective bargaining agreement apply to the recall of those

employees who were on a sympathy strike from May | to

November 4, 1987?" App. 28a-29a. The submission said

nothing about the legality of sympathy strikes or the scope

of the no-strike clause. In fact, both lower courts found that

the parties had expressly agreed that the submission ex-

cluded the question of whether sympathy strikes were per-

mitted under the Agreement. /d.; App. 53a-S4a.

4

The damages trial began on November |, 1988. Morrell

introduced expert testimony and other evidence showing

that its damages were between $24.6 million and $34 mil-

lion. The jury awarded Morrell $24.6 million, an amount the

unions do not contest here.

In the middie of the damages trial, the arbitrator issued

his award regarding the recall grievance. App. 83a. The

arbitrator ruled, sua sponte—and contrary to the jury's

The Eighth Circuit affirmed the district court judgments

on both the breach of contract action and the suit to vacate

the Unions’ arguments, and we are convinced that they lack

merit.” App. 36a.

ARGUMENT

1. THE ISSUES UPON WHICH REVIEW IS

SOUGHT CONCERNING THE SCOPE OF THE

UNIONS’ NO-STRIKE OBLIGATIONS ARE NOT

WORTHY OF THIS COURT'S DISCRETIONARY

JURISDICTION,

Based upon Mastro Plastics Corp. v. NLRB, 350 U.S. 270

(1956). and Metropolitan Edison Co. v. NLRB, 460 US

5

693 (1983), all federal courts, including the Eighth Circuit

below, apply three major principles in determining whether

sympathy strikes are in breach of a particular collective

bargaining agreement:

(1) Section 7 of the National Labor Relations Act, 29

U.S.C. § 157 (1988), grants employees the right to

engage « strikes, including sympathy strikes. App.

9a:

(2) The right to engage in a symipethy strike may be

waived. /d.

(3) Any waiver of the right to engage in sympathy strikes

must be clear and unmistakable. /d.

The unions identify no disagreement among the courts

about these principles. Applying them, the Eighth Circuit

agreed with the district court that whether the unions had

waived the right to engage in sympathy strikes presented an

issue of fact. The unions’ first two issues ostensibly attack

the standards applied by the Eighth Circuit in this regard. In

reality, the Eighth Circuit applied settled principles to a

wnique no-strike clause in a unique collective bargaining

agreement, the unions are simply asking this Court to review

an outcome that they do not like. The outcome of the court's

application of these settled rules presents no issue suitable

for review.

A. The Lower Courts’ Determination That The Par-

ties’ No-Strike Clause Is Ambiguous Is Not Appro-

priate For Review.

The unions’ first issue concerning the sate of the no-

strike clause is “[w]hether a limited no-strike clause—

which does not prohibit all strikes but rather prohibits only

strikes over specified contract disputes between the con-

tracting parties—clearly and unmistakably waives” the right

to engage in sympathy strikes. (Pet. i)

CR eee

6

It is unclear what this issue asks the Court to decide. As

presented, it appears to be a tautology. The unions seem to

be asking this Court to decide whether an unambiguously

limited no-strike clause, that clearly bars only certain strikes

and is equally clear in its failure to bar others, may neverthe-

less be interpreted to bar strikes outside its clearly limited

scope. It is so plainly uncontroversial that the answer to that

question is “no” that it cannot be worthy of this Court's

attention. Accordingly, the unions must be quarreling with

the Eighth Circuit's conclusion that the particular no-strike

clause here is ambiguous. That determination was based on

the settled legal principles advanced by the unions

themselves.

The Eighth Circuit started its analysis by ruling that

“[e])xtrinsic evidence may not be considered ‘for the pur-

pose of showing that the parties intended to make an

agreement which is inconsistent with the unambiguous

words of their written contract." App. 8a (citation omit-

ted). This was exactly the standard urged by the unions

below. (Un. Cir. Br. 18) Because the Eighth Circuit prop-

erly stated the applicable law, which the unions themselves

urged, this aspect of the court's analysis presents no issue for

review.

Having agreed with the unions that extrinsic evidence

cannot be used to contradict an unambiguous contract, the

Eighth Circuit turned to deciding whether the parties’ no-

strike clause was unambiguously limited, as the unions

claimed. The court phrased this inquiry as involving

> “whether the contractual language is reasonably susceptibic

of the meaning proposed by the party asserting the ambigu-

ity.” App. 9a, quoting Realex Chem. Corp. v. S.C. Johnson

& Son, 849 F.2d 299, 302 (8th Cir. 1988). Once again,

although the unions make veiled criticism of this standard

here (Pet. 5, 11, 12, 21), they urged below exactly the same

—— re

7

test: “The relevant question is . . . ‘whether the contract is

reasonably susceptible to the meaning proposed by [the

plaintiff}. " (Un. Cir. Reply Br. 2, quoting Realex)

In applying the unions’ proposed standards to determine

whether an ambiguity existed, the Eighth Circuit reviewed

the Agreement and the circumstances surrounding its nego-

tiation. App. I4a-ISe. Yet again, the unions urged this

precise approach below, stating that, “in determining

whether the contract language is ambiguous,” a court may

review the contract language and “ ‘the circumstances pror

to and contemporancous with the making of the contract.” ”

(Un. Cir. Reply Br. 2-3, quoting Un. Cir. Br. 18-19)

Counsel for the unions reaffirmed this position at oral

argument in the Eighth Circuit.

Given their agreement with cach of the Eighth Circuit's

legal standards, the unions’ only possible complaint regard-

ing the court's ambiguity determination is with the result

reached by applying the standards. Review of such a highly-

particularized inquiry is not appropriate for this Court's

consideration. The unions virtually concede as much. (Pet.

21)' In any event, the Eighth Circuit's conclusion was

correct. (See pp. 13-14 infra)

In sum, the Eighth Circuit's conclusion that the parties’

no-stnke clause was ambiguous was based upon well-settled

standards that were advanced by the unions themselves. The

' While Morrell believes that the unions’ first issue is directed

at the Eighth Circuit's ambiguity determination, review must also

be denied if the unions are attacking the jury's verdict. Morrell

and the unions presented their evidence and made their argu-

ments to the jury. The unions do not claim that the jury was

improperly instructed. The Eighth Circuit carefully reviewed the

evidence, and a writ of certiorari is not appropriate to conduct yet

another review of that evidence, which was more than sufficient to

sustain the verdict

application of those standards presents no question suitable

for review.

B. There Is No Conflict Among The Circuits Regard-

ing The Admissibility Of Extrinsic Evidence Con-

cerning The Parties’ Intent Under An Ambiguous

Neo-Strike Clause And, In Any Case, The Unions

Waived The Issue Below.

While the unions’ first question apparently takes issuc

with the Eighth Circuit's ambiguity determination, the sec-

ond one assumes that the no-strike clause here was ambigu-

ous and asks this Court to decide “[w]hether extrinsic

evidence can properly be relied upon to transform an ‘am-

biguous’ provision of a collective bargaining agreement into

a ‘clear and unmistakable’ waiver” of the right to engage in

sympathy strikes, “or whether, per contra, such a waiver

must be clearly stated in the contract's text.” (Pet. i)

The unions assert that this issue is appropriate for review

because “the lower courts are in disagreement as to whether

such a waiver must be stated im the contract's text .

(Pet. 7) There is no such conflict. All courts agree that

extrinsic evidence should be considered in determining the

parties’ intent concerning an ambiguous no-strike clause.

No court has held that an ambiguity is fatal to a claim of

waiver of the right to engage im sympathy strikes. No court

requires an explicit waiver in the contract's text.

In any event, even if a conflict arguably exists, this Court

should decline review because the unions created the con-

flict or, at the wery least, acceded to it below.

1. All Courts Agree That Extrinsic Evidence Miay Be

Considered In Construing An Ambiguous No-

Strike Clause.

The sole authority for the asserted conflict is a 16-year-

old Seventh Circuit case, Gery Hobart Water Corp. v.

tee

9

NLRB, 511 F.2d 284 (7th Cir.), cert. denied, 423 U.S. 925

(1975). Based upon this case, the unions assert that the

Seventh Circuit “requires ‘clear and unmistakable language’

in the labor contract to effect a waiver... .” (Pet. 19) The

unions claim that, by contrast, “under the approach of the

Eighth Circuit panel majority here, wherever contractual

language is ‘ambiguous’ the fact-finder is authorized to

engage in an entirely open-ended inquiry into extrinsic

evidence of the parties’ ‘intent’... .” (Pet. 19) (emphasis in

iginal)

The Eighth Circuit's decision here creates no conflict

with Gary Hobart. Moreover, the unions’ myopic focus on

Gary Hobart ignores three subsequent Seventh Circuit cases

that have made clear that sympathy strikes need not be

waived explicitly by the language of the no-strike provision

and that extrinsic evidence may be considered in determin-

ing the scope of an ambiguous no-strike provision. All other

decided cases—representing another six circuit courts of

appeal—are in accord.

(a) There is no conflict between the Seventh and

Eighth Circuits.

There is but one rule in the Seventh and Eighth Circuits,

as in all federal courts: whether the right to engage in

sympathy strikes has been waived depends upon the partics’

intent. If the contract language does not clearly express that

intent, extrinsic evidence is admissible to determine whether

the parties intended a waiver. The different results below

and in Gary Hobart are not because different legal standards

are applied in different circuits; they are because the same

standards were applied to different no-strike provisions in

different contracts with different negotiating histories.

In analyzing the no-strike clause at issue here, the Eighth

Circuit applied what the unions themselves termed “unusu-

ally well-marked” (Un. Cir. Br. 16) contract law standards,

10

particularized to meet the rigorous requirements for finding

waiver of an NLRA-protected right. Thus, in determining

the scope of a no-strike clause, the focus is whether the

“Union intended to waive its right to engage in sympathy

strikes.” App. 8a-9a, quoting Amcar Div. ACF Indus. Inc.

v. NLRB, 641 F.2d 561, 567 (8th Cir. 1981). To determine

the parties’ intent, “[w]e look to the language of the

contract, the structure of the contract, the bargaining his-

tory, and any other relevant conduct of the parties that

shows their understanding of the contract.” /d) Where

sympathy strikes are not barred by the express language of

the no-strike clause itself, “an implied waiver must be

established only by ‘clear and unmistakable’ evidence.” /d.,

quoting Metropolitan Edison, 460 U.S. at 708.

The Seventh Circuit's standards are in accord with the

foregoing rules. The Seventh Circuit, like the Eighth Cir-

cuit, has made clear that the issue of waiver depends upon

the parties’ intent. Gary Hobart simply illustrates an appli-

cation of this settled principle to a particular no-strike clause

that the court found unambiguously expressed the parties’

intent. The no-strike provision in Gary Hobart, unlike the

provision at issue here, was contained within the contract's

arbitration procedures. Moreover, also unlike the contract at

issue here (see pp. 13-14 infra), the contract in Gary

Hobart contained no other provisions indicating an intent to

bar sympathy strikes. Given these facts, the Seventh Circuit

concluded that the language of the contract “indicates an

intention to treat the no-strike clause as having application

coextensively with that of the arbitration clause.” 511 F.2d

at 288.

Having concluded that the contract language itself

demonstrated an intent to permit sympathy strikes, the court

believed that “bargaining history between the Company and

Union need not be examined....” /d. Nevertheless, the

court did review the negotiating history, concluding that “if

we Carry our consideration into that history, our conclusion

is only reinforced.” /d. The court did not rule that the no-

strike clause must itself explicitly waive the right to engage

in sympathy strikes. Nor did it rule that extrinsic evidence

could not be considered in interpreting ambiguous no-strike

“e

Four years after Gary Hobart, in W-I Canteen Service.

Inc. v. NLRB, 606 F.2d 738 (7th Cir. 1979), the Seventh

Circuit made clear that the determination of whether a

“a case-by-case analysis of the language of the bargaining

agreements in issue and on their operation within the factual

circumstances of the labor controversy at hand.” /d. at 743.

(citation omitted) The no-strike provision in W-/ Canteen,

like the provision in Gary Hobart and the one here, did not

contain an explicit waiver of thé right to engage in sympathy

strikes. Like the no-strike clause in Gary Hobart and the

one here, the W-/ Canteen provision also referred to the

contract's arbitration procedures. It stated in relevant part:

[ T] here will be no strike or lockout during the life of

this Agreement so long as the Company and the Union

abide by the terms of this Agreement or submit to

arbitration any differences which may arise which are

not covered by this Agreement.’ Id. at 740.

SS ——

* The italicized language of the no-strike clause in W-/ Canteen

is similar to the one in the instant case and different from the one

in Gary Hobart. In W-/ Canteen the clause required arbitration of

all disputes, including those that “are not covered by this Agree-

ment.” Similarly, Article Il of the Morrell no-strike provision

requires arbitration of “any disputes which may arise between

[the] Company and the Union™ (Art. Il § 5), and affirms the

need for a “means to facilitate peaceful adjustments of all

12

In deciding whether the W-/ Canteen no-strike clause

barred sympathy strikes, the court specifically rejected the

claim “that the no-strike clause [must] contain the specific

term ‘sympathy strike’ before finding a waiver.” /d. at 745.

In fact, after analyzing the no-strike clause, together with

other provisions of the contract, the court was “satisfied that

the language of the no-strike clause is sufficiently clear to

preclude sympathy strikes,” even though, as here, sympathy

strikes were not explicitly prohibited and the no-strike

clause referred to the arbitration procedures. /d. at 746. The

court confirmed its conclusion by “turn[ing] to a discussion

of the extrinsic evidence of intent in the record, most of

which relates to bargaining history.” /d. at 746. That negoti-

ating history, like the evidence here, included the fact that

the union had requested “a clause specifically reserving the

right to honor picket lines at the employer's premises, which

was rejected.” Jd.

In United States Steel Co. v. NLRB, 711 F.2d 772, 779

(7th Cir. 1983), the Seventh Circuit reaffirmed that “[t)he

failure of the no-strike clause to refer expressly to sympathy

strikes is not conclusive ... .” Rather, as in Gary Hobart

and W-/ Canteen, the court reviewed the extrinsic evidence,

finding that “the terms of the collective bargaining agree-

ment and the background under which it was negotiated

persuades us that there was a clear and unmistakable waiver

of the employees’ right to engage in a sympathy strike.” /d

at 778. The court made clear that Gary Hobart was simply a

particularized application of the principle that the parties’

intent must be given controlling weight. Thus, “where an

arbitration clause and an express no-strike clause are closely

interwoven, it may be reasonable to infer that the parties

intended the two provisions to have the same scope.” /d at

gnevances or other disputes that may arise between the Company

and the Union " (Art. I § 3) (emphasis added)

13

777 (emphasis added). In all cases, however, “[t]he ques-

tion is simply whether the parties intended to preclude

sympathy as well as work-related strikes.” /d at 779. It had

been reasonable to infer in Gary Hobart that the particular

no-strike clause was limited because “not only was the

contract lacking any acknowledgment of the industrial ne-

cessity to avoid work stoppages, but the no-strike clause and

in the same clause and were directly intertwined.” /d. at

779.

The factual considerations that harmonized Gary Hobart,

W-I Canteen and United States Steel also demonstrate that

this case is not in conflict with Gary Hobart. These same

considerations also demonstrate that the Eighth Circuit was

correct in concluding that the no-strike clause here is not

unambiguously limited.

The Morrell no-strike clause—like the one in United

States Steel and unlike the one in Gary Hobart—is part of a

broader portion of the Agreement, Article II, which is

captioned “Purpose of Agreement.” Article II contains

several provisions that confirm the parties’ intent to bar

sympathy strikes.

First, the no-strike clause itself, which is contained in

Article II § 5, is comprehensive. It provides that there shall

be no strikes. The unions repeatedly try to edit the provision

to make it appear that the no-strike obligation is limited to

arbitrable disputes (see, e.g. Pet. 5, 7, 9), although the

clause does not say so. The unions’ need to use ellipses and

brackets to make clear their reading of the provision con-

firms, at the very least, that the clause is not unambiguous.

Second, Article 11 § 3 provides that “/i/1 is the intent and

purpose of the parties” to “establish the means to facilitate

peaceful adjustments of all grievances or other dis-

putes....” (emphasis added) The Eighth Circuit con-

functionally

contract.” 711 F.2d at 778.

The Eighth Circuit here and the Seventh Circuit in

United States Steel viewed these different features of the

no-strike obligations. Compare App. |Sa with 711 F.2d at

778. Put simply, Gary Hobart is distinguishable on its facts.

The Eighth Circuit's conclusion that this case is factually

’The unions’ argument that the obligation to handle struck

work and the asserted right to engage in sympathy strikes can be

reconciled makes no sense. The refusal to handle struck work

from another Morrell plant would itself be a strike, because the

employees would be refusing to perform such work. Such a stnke

would be a sympathy strike because it would not arise out of any

dispute with Morrell at the plant to which the product was

shipped. By agrecing to handle struck work, the unions recognized

that they could not strike, /.¢., refuse to do work, in sympathy with

other striking plants.

1S

closer to United States Steel than Gary Hobart was well-

founded.

Finally, any doubt about whether the Seventh Circuit,

like the Eighth Circuit, gives controlling weight to the

parties’ intent was resolved in /ndianapolis Power & Light

Co. v. NLRB, 898 F.2d $24 (7th Cir. 1990). That case

involved an appeal of an NLRB decision following remand

from a prior appeal to the D.C. Circuit. In the initial appeal,

the D.C. Circuit held that, in determining whether the

parties intended to waive the right to engage in sympathy

strikes:

[T]he words parties use . . . are only evidence of their

intent; the words are not themselves the parties’ intent

. The intent of the parties to collective bargaining

agreements is not to be discerned by reference to

“abstract definitions unrelated to the context in which

the parties bargained,” C&C Plywood, 385 U.S. at 430,

87 & Cu at 565, expecially where bargaining history i

crucial to an understanding of that intent.

Local Union 1395, IBEW v. NLRB, 797 F.2d 1027, 1036

(D.C. Cir. 1986). The Seventh Circuit quoted this proposi-

tion with approval on the subsequent appeal, adding that

these principles required a careful consideration of the

“extrinsic evidence bearing on the parties’ actual intent in

analyzing waiver” of the right to engage in sympathy strikes.

898 F.2d at $29. The court did not rule, as the unions

ee ey eee

no-strike clause is, on its face, ‘all encompassing .

(Pet 11) That issue was not even before the court.

The Seventh Circuit's rule that the parties’ intent is to be

given controlling weight is exactly the rule that the Eighth

Circuit applied here. The asserted conflict with the Seventh

Circuit is chimerical

16

(b) All other circuits are in accord with the Seventh

and Eighth Circuits.

Every other court that has decided whether a no-strike

provision bars sympathy strikes agrees with the foregoing

principles. Because the unions base the asserted conflict

solely upon Gary Hobart, they virtually ignore the other

cases, arguing only in a footnote that there is “confusion and

uncertainty in the lower courts regarding the proper ap-

proach to interpreting no-strike provisions.” (Pet. 17 n.6)

The cited evidence of this supposed confusion and uncer-

tainty is that in some cases “no-strike clauses were held not

to reach sympathy strikes” while others “reach the opposite

result.” (/d.)

There is no confusion among the courts. Different results

are to be expected when courts are construing different no-

strike provisions in different contracts with different negoti-

ating histories. Far from being confused, the federal

courts—representing six circuits in addition to the Seventh

and Eighth—have uniformly given the parties’ actual intent

controlling weight, viewing extrinsic evidence as a crucial,

and often dispositive, factor.‘ No court has held that the no-

* See, e.g. NLRB v. C.K. Smith & Co., 569 F.2d 162 (ist Cir

1977), cert. denied, 436 U.S. 957 (1978)(although no-stnke

clause referred to arbitration procedures, court consulted bargain-

ing history to determine whether sympathy strikes were barred);

Delaware Coca-Cola Bottling Co. v. General Teamster Local

Union 326, 624 F.2d 1182, 1190-9) (3d Cir. 1980) (“[a]dsent

evidence to the contrary, . . . where the contract read as a whole

indicates that the no-strike clause is tied to issues covered by the

contract,” sympathy strikes are not barred; “[hJere none of the

evidence satisfies the quantum of proof necessary to overcome

this result”) (emphasis added); Pacemaker Yacht Co. v. NLRB.

663 F.2d 455, 457 (3d Cir. 1981)(agreement as a whole and

extrinsic evidence supported conclusion that parties intended to

waive right to engage in sympathy strikes; Delaware Coca-Cola

ee

17

strike clause must expressly preclude sympathy strikes. No

court has refused to consider extrinsic evidence bearing

upon the parties’ intent. No court has perceived any conflict

on these matters.

Sometimes the parties’ intent is clearly stated by the

words of the contract. Sometimes the parties’ intent, al-

though itself clear, has been imperfectly expressed by the

contract, and the language is ambiguous. In such cases, no

distinguished because there “we were unable to find any extrinsic

evidence indicating that the parties had intended the no-strike

clause to be broader than the arbitration clause”); /JBEW Local

803 v. NLRB, 826 F.2d 1283, 1294 (3d Cir. 1987) (different

results in Pacemaker Yacht and Delaware Coca-Cola turned on

availability of extrinsic evidence in the former but not the latter.

regarded “extrinsic evidence as an integral part of [the] determi-

nation of the parties’ intent on the issue of waiver”); Ryder Truck

Lines, Inc. v. Teamsters Freight Local Union, 727 F.2d 594, 599

(6th Cir.), cert. denied, 469 U.S. 825 (1984) (no-strike provision

and other portions of contract demonstrated “that the parties

intended to prohibit” sympathy strikes “regardless of whether the

underlying dispute is arbitrable”); NLRB v. Southern Cal

Edison, 646 F.2d 1352, 1364-65 (9h Cir. 1981) (“[ waiver may

be found in unequivocal extrinsic evidence bearing on ambiguous

contract language”; moreover, “contract need not explicitly pro-

hibit sympathy strikes to show intent to waive the right to engage

in such activity”); NLRB v. Gould, Inc., 638 F.2d 159, 164 (10th

Cir. 1980), cert. denied, 452 U.S. 930 (1981) (“no evidence was

presented to suggest the parties intended a Prohibition™ of

sympathy strikes; case “distinguishable from cases where extrinsic

evidence was offered to prove that the no-strike clause was

intended to prohibit sympathy strikes”); Local Union / 395.

IBEW v. NLRB, 797 F.2d 1027, 1036 (D.C. Cir. 1986) (parties

intent must be given “ ‘controlling weight’ whether that intent

is established by the language of the clause itself, by inferences

drawn from the contract as a whole, or by extrinsic evidence”)

authority supports taking from a jury its role of determining

the parties’ intent. As long as the evidence supports a finding

of clear and unmistakable waiver, the jury's verdict cannot

be disturbed. Having been instructed on this high standard

of proof, the jury here concluded that the unions had

breached their no-strike obligation to Morrell. The unions

cannot convert the Eighth Circuit's affirmance of this ver-

dict into a conflict among the circuits.

2. Even If A Conflict Arguably Exists, The Unions

Waived The Issue Below.

Even if the purported conflict alleged by the unions exists,

it is not reviewable because the unions conceded below the

propriety of the supposedly inconsistent Eighth Circuit stan-

dards. They admitted that (i) extrinsic evidence could be

toned to 1 ambi . Arecengioar

(ii) the language of the no-strike clause need not itself

licit! ud ,

The unions began the legal discussion in their Eighth

Circuit brief by stating that “the proper analytic approach to

the question presented here is unusually well-marked by the

basic principles of contract law . . . .” (Un. Cir. Br. 16) One

of those “basic principles” was that “[w]here a contract ‘is

to aid in its construction.” (/d. at 18) (citation omitted) In

their reply brief, the unions underscored that “[t}he major

premise of our opening brief is that a district court is to

submit a contract interpretation question to a jury if and

only if that court has first determined that the contract

provision at issue is ambiguous.” (Un. Cir. Reply Br.

|) (emphasis in original) At oral argument, the unions again

agreed that extrinsic evidence may be considered in inter-

preting an ambiguous no-strike clause.

———

19

Similarly, and contrary to their claim here that waiver of

the right to sympathy strike must be “clearly stated in the

contract’s text” (Pet. i), the unions stated below that

“[w]here there is not an express waiver” of the right to

engage in sympathy strikes, the right may nevertheless be

waived, although “the evidence of waiver must be ‘clear and

unmistakable.’ ” (Un. Cir. Br. 21, quoting Amcar, 641 F.2d

at 566) It was exactly this standard that the Eighth Circuit

applied below in ruling that the right to engage in sympathy

strikes “may be waived expressly or impliedly; however, an

implied waiver must be established only by ‘clear and

unmistakable’ evidence.” App. 9a, quoting Metropolitan

Edison, 460 U.S. at 708.°

In sum, if the purported conflict with the Seventh Circuit

exists—which it does not—it is only because the unions

created it by advocating below the very standards the Eighth

Circuit adopted. Having successfully urged those standards

below, the unions cannot dispute them here or assert that

the Eighth Circuit’s adoption of them created a conflict

between the circuits that this Court must resolve.

* Contrary to their suggestion here that Metropolitan Edison

requires that the no-strike clause itself must contain an express

waiver of the right to engage in sympathy strikes (Pet. 19), the

unions advised the Eighth Circuit below that the above-quoted

portion of its prior decision in Amcar—which permits an implied

waiver if the evidence of waiver is clear and unmistakable—

“correctly anticipated the Supreme Court's holding in Metropoli-

tan Edison.” (Un. Cir. Br. 21)

20

Il. THE ISSUES RAISED BY THE OVERTURNING

OF THE ARBITRATION AWARD DO NOT

MERIT A GRANT OF CERTIORARI.

A. The Eighth Circuit Applied Settled Legal Princi-

ples In Deciding That The Arbitrator Had Ex-

ceeded The Parties’ Submission.

“After reviewing the record, the arbitration clause, and

the issues submitted for arbitration,” the Eighth Circuit

affirmed the district court's decision vacating the arbitrator's

award because, by sua sponte deciding the meaning of the

no-strike clause, “the arbitrator was not ‘even arguably . . .

acting within the scope of his authority.” App. 28a, 31a,

quoting United Paperworkers Int'l Union v. Misco, 484 U.S.

29, 38 (1987).

The unions seck review of this determination on the

ground that the Eighth Circuit's ruling “stands in direct

conflict with the Sixth and Tenth Circuits’ understanding of

the governing rule” and “gravely threatens the federal policy

favoring the arbitration to labor disputes.” (Pet. 25, 26)

Neither claim is correct. The unions’ true complaint is, once

again, not with legal principles but with the Eighth Circuit's

fact-bound application of settled law to this case.

The Eighth Circuit recognized that an arbitrator's con-

struction of a collective bargaining agreement is entitled to

great deference, but that an award must nevertheless be

vacated where the arbitrator “has not stayed within the

areas marked out for his consideration,” including where the

arbitrator “went beyond the submission.” United Steelwork-

ers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 598

(1960). See App. 28a. This proposition flows inexorably

from the doctrine that “arbitration is a matter of contract

and a party cannot be required to submit to arbitration any

dispute which he has not agreed so to submit.” United

Steelworkers v. Warrior & Gulf Navigation Co., 363 US.

21

$74, 582 (1960). This principle is judicially enforced by the

rule that “the question of whether the parties agreed to

arbitrate is to be decided by the court, not the arbitrator.”

AT&T Technologies, Inc. v. Communications Workers, 475

U.S. 643, 649 (1986). The Eighth Circuit explicitly applied

these standards in holding that “where ‘a court concludes

that the arbitrator did not stay within the bounds of his

authority, this principle of deference inevitably gives way . . .

to the greater principle that an award not drawing its essence

from the agreement is not entitled to judicial enforce-

ment.” App. 27a. (citation omitted)

Contrary to the unions’ claims, there is no split in the

circuits concerning the scope of the proper inquiry. Courts

must review the arbitrator's authority as delineated by the

terms of the collective bargaining agreement, the scope of

the issue submitted, the statements made by the arbitrator

and the parties during the proceedings, and other conduct of

the parties. App. 28a-3la. The two cases the unions cite

from the Sixth and Tenth Circuits in support of the claimed

conflict adhere to the same rule. See UFCW v. Safeway

Stores, Inc., 889 F.2d 940, 946 (10th Cir. 1989)(“[t]he

scope _of the issues submitted to the arbitrator also controls

the arbitrator's authority”; “ ‘courts must look both to the

contract and to the submission to determine his author-

ity’ "); Johnston Boiler Co. v. Local Lodge No. 893, 753

F.2d 40, 43 (6th Cir. 1985)(“an award that clearly goes

beyond the grievance submitted to the arbitrator is [not]

enforceable”; parties can “limit the arbitrator's authority by

careful drafting of the submission™).°

* See also Synergy Gas Co. v. Sasso, 853 F.2d $9, 63-64 (2d

Cir.), cert. denied, 488 U.S. 994 (1988); Sunshine Mining Co. »

United Steelworkers, 823 F.2d 1289, 1294 (9th Cir 1987),

International Chem. Workers Union v. Mobay Chem. Corp. 755

F.2d 1107, 1110 (4th Cir. 1985); Mobil Oil Corp. v. Independent

22

Nor are the circuits split over the standard of review to be

used in conducting this inquiry. To alleviate any concern

(quoted out of context by the unions (Pet. 26-27)) that

courts would be required to “determine, case by case, the

exact scope of submission in the endless number of griev-

ances and disputes that inevitably occur between employers

and employees,” Mobil Oil Corp. v. Independent Oil Work-

ers Union, 679 F.2d 299, 302 (3d Cir. 1982), courts accord

deference to an arbitrator's interpretation of the issue sub-

mitted. /d. This precise approach was adopted by the Eighth

Circuit in Lackawana Leather Co. v. UFCW, 706 F.2d 228,

230-31 (8th Cir. 1983)(en banc), and followed by the

Eighth Circuit in the case below. App. 27a (following

Lackawana Leather and recognizing that “ ‘an arbitrator's

interpretation of the scope of the issue submitted to him is

entitled to the same deference accorded his interpretation of

the collective bargaining agreement’™) (citation omitted).

In their briefs below, the unions repeatedly cited Lackawana

Leather as stating the correct rule and successfully urged the

Eighth Circuit to follow it in this case. (See, e.g. Un. Cir.

Reply Br. 28)

Given the nature of the required inquiry, it is not surpris-

ing that, while the usual rule of deference generally results

im courts sustaining awards, the application of these princi-

ples to particular cases has yielded varying results. Thus,

despite the fact that the Eighth Circuit in this case over-

turned the arbitrator's award for exceeding the boundaries of

the parties’ submission, the Eighth Circuit has more fre-

quently affirmed arbitration awards and rejected arguments

Oil Workers Union, 679 F.2d 299, 302 (3d Cir. 1982); Piggly

Wiggly Operators’ Warehouse. Inc. v. Piggly Wiggly Operators’

Union, 611 F.2d $80, 583-34 (Sth Cir. 1980); Textile Workers

Union v American Thread Co.. 291 F.2d 894, 896-97 (4th Cir.

1961)

23

that the arbitrator had overstepped his bounds. See, e.g.,

Lackawana Leather, 706 F.2d at 231-32; United Elec. Radio

& Mach. Workers v. Litton Microwave Cooking Products,

Litton Sys. Inc., 728 F.2d 970, 972 (8th Cir. 1984) (en

banc). The same variance occurs in other circuits, including

the Tenth and Sixth Circuits, whose views the unions ask

this Court to follow. Both circuits have vacated arbitration

awards where appropriate.’

The unions also appear to argue that the Eighth Circuit

improperly looked only to Morrell’s intent concerning the

scope of the submission and disregarded both the unions’

intent and the arbitrator’s understanding of the submission.

(Pet. 24) While review of the Eighth Circuit's inquiry is too

particularized to merit this Court’s review, the unions’

claims are meritless. The court's decision was based on an

examination of the entire record concerning the understand-

ing of all relevant persons—Morrell, the unions and the

arbitrator—concerning the submission. As the Eighth Cir-

cuit explained:

[T]he parties indicated at {the initial arbitration hear-

ing] that they did not want the arbitrator to address the

issue of the legality of sympathy strikes. Each party

insisted that it would prevail in arbitration of the recall

issue regardless of the outcome of the appeal of the

liability verdict. .. . The parties discussed providing the

” See, e.g. Retail Store Employees Union, Local 782 v. Sav-On

Groceries, 508 F.2d 500, 502-03 (10th Cir. 1975) (overturning an

arbitration award where the arbitrator decided a back-pay issue

that had not been submitted to him); Local 791, Int'l Union of

Elec. Radio & Mach. Workers v. Magnavox Co., 286 F.2d 465,

466 (6th Cir. 1960)(overturning an award, where “[u]pon a

review of the record, we are of the opinion that . . . the arbitrator

went beyond the grievance submitted to him for arbitration and

beyond the provisions of the collective bargaining contract”).

en

24

arbitrator with their briefing of the sympathy strike

issue; the evidence suggests, however, that the parties

intended such information to be used only as back-

ground material for the recall issue.

App. 28a (emphasis added). The court went on to explain

that, in their opening arbitration briefs, “neither party re-

ferred to the issue of the legality of the strikes” and that the

arbitrator's “characterization of the issue contains no sug-

gestion that the issue previously decided by the jury, the

meaning of the no-strike clause, was submitted for arbitra-

tion. Moreover, neither party offered any evidence on the

issue... .” App. 28a, 29a. (emphasis added) The Eighth

Circuit referred to Morrell’s intent only to reject the unions’

claim that Morrell’s framing of the issue showed that

Morrell intended to arbitrate the meaning of the no-strike

clause. /d.*

B. There Is No Conflict Among The Circuits Regard-

ing The Applicability Of Collateral Estoppel To

Bar Arbitrators From Disregarding Prior Judicial

Decisions.

The unions also attack the Eighth Circuit's ruling that the

arbitrator was bound to give collateral estoppel effect to the

prior jury verdict concerning the no-strike clause. This case

*The unions’ mischaracterization of the basis for the Eighth

Circuit's decision in this regard led them to argue here that

“under the Eighth Circuit's rule cither party . . . may, with

impunity, trump the arbitration provision . . . by unilaterally

withholding its consent to the arbitration of a particular issue

: " (Pet. 27) (emphasis in original) This alleged concern is

obviously not a problem because any improper “withholding [ of}

consent to the arbitration” is readily and easily addressed by

asking a court to compel arbitration. See Piggly Wiggly, 611 F.2d

at 583-84.

25

presents a poor vehicle for reviewing this question. The

Eighth Circuit's holding was an alternative ground for the

decision below and would be reached only if the Court were

to (i) grant certiorari on the unions’ third issue and (ii)

reverse the Eighth Circuit's determination that the arbitra-

tor exceeded the scope of his authority. Such an alternative

ground is not an appropriate candidate for review.

Only a few cases have considered whether collateral

estoppel bars arbitrators from reconsidering judicial deci-

sions. Each has held that collateral estoppel principles did

govern. The unions cannot cite a single contrary case.

Instead, they argue that the Eighth Circuit's alternative

holding “merits plenary review by this Court,” because W

R. Grace & Co. v. Rubber Workers, 461 U.S. 757 (1983),

“considered an analogous issue.” (Pet. 27)

W. R. Grace did not involve an analogous issue. It

involved the distinctly different question of the precedential

impact of an arbitral decision on a second arbitrator. The

case had nothing to do with, and the Court did not even

refer to, res judicata or collateral estoppel. The question

was what level of deference should be accorded a second

arbitrator's determination that the collective bargaining

agreement did not require him to follow the first arbitrator's

* See, e.g, Miller Brewing Co. v. Fort Worth Distrib. Co., 781

F.2d 494, 498-99 (Sth Cir. 1986); Telephone Workers Union.

Local 827 v. New Jersey Bell Tel. Co., $84 F.2d 31, 33-34 (3d Cir

1978); Burmah Oil Tankers, Lid v. Trisun Tankers, Lid. 687 F

Supp. 897, 899 (S.D.N.Y. 1988); Hudson-Berlind Corp. v. Local

807, Int'l Bhd. of Teamsters, 597 F. Supp. 1282, 1285-86

(E.D.N.Y. 1984); Pitta v. Hotel Ass'n of New York City, Inc.

643 F. Supp. 247, 252 (S.D.N.Y.), vacated on other grounds, 806

F.2d 419 (2d Cir. 1986)

26

reasoning.'° The crucial differences between the preclusive

effect of a judicial decision and that of an arbitral proceed-

ing have been explained by this Court in two recent

cases—McDonald v. City of West Branch, Michigan, 466

U.S. 284 (1984), and Dean Witter Reynolds, Inc. v. Byrd,

470 U.S. 213 (1985).

McDonald held that an arbitration award is not given

preclusive effect in a Section 1983 action because it is not a

“judicial proceeding,” and because “an arbitration proceed-

ing cannot provide an adequate substitute for a judicial trial”

under Section 1983 and the federal rights that statute is

designed to protect. 466 U.S. at 288, 292. One year later, in

Dean Witter, this Court held that federal courts hearing

federal securities law cases need not stay related arbitration

proceedings for fear of the potential collateral estoppel

impact of an arbitration award on the federal case. The

Court held that an arbitration ruling may not have any

preclusive effect on federal litigation. 470 U.S. at 222.

These cases are grounded on the fundamental differences

between the functions of courts and arbitrators. First, “be-

cause an arbitrator's authority derives solely from the con-

tract,” McDonald, 466 U.S. at 290, an arbitrator's focus is to

interpret collective bargaining agreements—not to construc

the law. Second, “arbitral factfinding is generally not

equivalent to judicial factfinding”—with its less complete

'© The second arbitrator in W. R. Grace refused to abide by the

first arbitrator's reasoning exonerating the company for laying-off

another employee. He based his conclusion solely on the con-

tract, explaining that the “collective bargaining agreement limited

the arbitrator's authority . . . to considering whether the express

terms of the contract had been violated,” whereas the first

arbitrator “had considered the fairness of enforcing the terms of

the contract” and thus “had acted outside his contractually-

defined jurisdiction.” 461 U.S. at 763.

(EE

27

record of the proceedings, no rules of evidence, and limited

or no discovery, compulsory process, cross-examination and

testimony under oath. McDonald, 466 U.S. at 291. Thus, an

arbiter’s determination about what the parties agreed to in

their contract cannot have the same impact as a judicial

decision.

Finally, it would be highly ironic and fundamentally

unfair if the unions were to be permitted to have the

arbitrator disregard the jury's verdict and consider anew the

very issue the unions forced the courts—instead of an

arbitrator—to decide. When the no-strike controversy arose,

the unions filed a grievance concerning their asserted right

to engage in sympathy strikes. The unions then refused

Morrell’s request to go forward with arbitration, successfully

resisted a motion to compel arbitration, and thereby forced

years of federal court litigation that eventually resulted in a

verdict against them. After losing in the forum they chose,

the unions should not now be able to trump the judicial

process, escape the adverse verdict, and prevail based on a

subsequent award by an arbitrator who decided an issue that

the parties agreed not to submit.

C. Certiorari Review of the che yt

Of Collateral To

Facts Of This Case Is Not doves,

The unions also seek review of the Eighth Circuit's

specific application of collateral estoppel principles. Recog-

nizing that, almost by its very nature, this fact-bound

determination is not worthy of certiorari, the unions attempt

to create the facade of a split in the circuits and an inherent

conflict between the jury's verdict and the Eighth Circuit's

earlier decision in Morrell J. Both efforts are futile.

The long-standing distinction between “finality” for col-

lateral estoppel purposes and “finality” for appeal purposes

has been widely recognized since Judge Friendly’s decision

28

in Lummus Co. v. Commonwealth Oil Ref. Co., 297 F.2d

80, 89 (2d Cir. 1961), cert. denied, 368 U.S. 986 (1962).

The Lummus rule has been adopted by other lower courts,

as well as the Restatement (Second) of Judgments § 13,

which this Court quoted favorably in Arizona v. California,

460 U.S. 605, 618 n.7 (1983), in stating that “[a] judgment

may be final in a res judicata sense as to a part of an action

although the litigation continues as to the rest.” The Re-

statement and the few courts that have addressed whether a

liability judgment, even though not appealable, is entitled to

collateral estoppel effect have uniformly held that it is."

The unions argue that “[o]ther circuits” disagree with

Lummus, citing Avondale Shipyards, Inc. v. Insured

Lloyd's, 786 F.2d 1265, 1269. (Sth Cir. 1986) (Pet. 30) To

the contrary, the Fifth Circuit in Avondale was careful not

to disagree with Lummus, explaining that its decision was

limited to partial summary judgment orders, which, by their

very nature, are subject to continuing change, modification

or reversal. /d. at 1270. Avondale explained that its decision

was not inconsistent with Lummus, and the court expressly

left open “whether the Lummus doctrine is the law of this

Circuit,” /d. at 1271 & n.7. Moreover, Avondale did not

involve the situation presented here, ie, the preclusive

effect of a jury verdict following a two-week trial on the

merits that has been sustained over motions for judgment

notwithstanding the verdict. In the final analysis, no case

supports the unions’ claim that the non-appealability of a

liability judgment prevents that judgment from being given

preclusive effect.

'' Restatement (Second) Judgments § 13, comment g, illustra-

tion 3 (1982); Aiello v. City of Wilmington, 470 F. Supp. 414,

418-19 (D. Del. 1979), aff'd, 623 F.2d 845 (3d Cir. 1980); Aetna

Cas. & Sur. Co. v. Jeppesen & Co., 440 F. Supp. 394, 399-403 (D

Nev. 1977).

29

Finally, in a last effort to cast doubt on the collateral

estoppel decision, the unions resort to mischaracterizing the

Eighth Circuit's holding in Morrell I as being inconsistent

with the jury’s verdict. (Pet. 29-30) The Eighth Circuit

properly rejected this argument, explaining that Morrell |

“was not called upon to decide whether the collective

bargaining agreement barred sympathy strikes,” because the

only issue on that appeal “was whether the Unions had

engaged in a sympathy strike .. . .” App. 7a. Morrell / itself

made this clear, expressly leaving “[t}he merits of Morrell’s

request for damages” to be decided as a separate matter by

the district court. App. 69a n.7.

The unions have been unable to convince anybody of their

claim that Morrell I and this case are inconsistent—not

Judge Bowman, who was on the Morrell J panel and also

joined in the majority decision below, not Judge McMillan,

who dissented below but made no reference to any inconsis-

tency with Morrell I, and not Judges Lay or Fagg. both of

whom were on the Morrell | panel and neither of whom

voted to accept the unions’ petition for rehearing en banc. In

any event, the place to correct any conflict between Morrell

I and this case was in the Eighth Circuit, which saw no

conflict—not on certiorari review here.

Both lower courts correctly decided to vacate the arbitra-

tor’s award because the arbitrator decided an issue that was

expressly withheld from his consideration, and because he

then violated principles of issue preclusion in deciding that

issue. The courts applied settled legal principles about which

the circuits are in agreement. There is no reason for this

Court to conduct yet another review.

3”

CONCLUSION

For the foregoing reasons, the petition for certiorari

should be denied

DATE: April 8, 199!

Respectfully submitted,

JEREMIAH D. MuRpPHy GeoRGE A. JOSEPH

James E. MCMAHON ‘Counsel of Record

Boyce, Murrny, McDoOweL! MICHAEL P. FORADAS

& GREENFIELD CHa T. KIFrel

Post Office Box 5015 Leste M. Smiru

Sioux Falls, SD $7117 KIRKLAND & ELLs

(605) 336-2424 200 East Randolph Drive

Chicago, IL 6060)

(312) 861-2274