Opposition Brief — National Elevator Industry, Inc. v. International Union of Elevator Constructors

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je Supreme Court, U.S.

a) P23, Ee D

MAR 20 1987

No. 86-1333

a siiceneamersnmmcaesenatent

ULERKR

IN THE

Supreme Cont of the Wuited States

OCTOBER TERM, 1986

NATIONAL ELEVATOR INDUSTRY, INC.,

Petitioner,

¥,

INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF FOR RESPONDENT IN OPPOSITION

DONALD J. CAPUANO

ROBERT MATISOFF

(Counsel of Record)

O’ DONOGHUE & O’ DONOGHUE

4748 Wisconsin Avenue, N.W.

Washington, D.C. 20016

(202) 362-0041

Attorneys for Respondent

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WILSON - Epes PrinTinG Co., INc. - 789-0096 - WASHINGTON, D.C. 20001

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QUESTION PRESENTED

Acting in asserted reliance on a provision in a collec-

tive bargaining agreement, employers in one locality re-

duced wage rates. On the union’s grievance, an arbi-

trator determined that the agreement permitted the wage

reduction. The award was confirmed by a court on the

ground that it “draws its essence from the collective

bargaining agreement” (Steelworkers v. Enterprise Wheel

& Car Corp., 363 U.S. 598, 597). The court thereupon

dismissed the union’s complaint, filed prior to the arbi-

tration, which sought a nationwide injunction against

wage reductions. Neither the arbitrator nor the court

determined that the arbitration award was binding out-

side the locality in which the grievance was raised.

The question presented is whether either the court’s

order confirming the award, or its order dismissing the

complaint for a nationwide injunction, bars another court

from directing the arbitration of grievances challenging

wage reductions at other locations.

(i)

TABLE OF CONTENTS

Page

eb yy | § Sec i

COUNTERSTATEMENT OF THE CASE .................... 1

1. The Goldberg Award and Its Confirmation ........

a. Tee Pees Litiention .......................... ss Seated 4

REASONS FOR DENYING THE WRIT ...................... 5

1. The Asserted Preclusive Effect of Judge Goettel’s

Order Confirming the Award ............... Sa aR 5

2. The Asserted Preclusive Effect of Judge Goettel’s

Order Dismissing IUEC’s Complaint _................ 8

CONCLUSION .................. SNS nn | OTRO 10

(iii)

TABLE OF AUTHORITIES

CASES:

International Longshoremen’s Association v. West

Gulf Maritime Association, 765 F.2d 135, affirm-

ing 594 F. Supp. 670 (S.D. N.Y.) (C.A. 2,

I irectcercnpee toate nn ctlliseetadiine-ascccinennttiiesio’s

International Union of Elevator Constructors,

AFL-CIO v. National Elevator Industry, Inc.,

590 F. Supp. 1219, affirmed, 760 F.2d 253 (C.A.

2), cert. denied, —— U.S. ——, 106 S.Ct. 607

RII sicickdcnncicaionenctonsespicncnstiinedeincnsmsinniainnesiteammbemmpeniss

S.C. Stevedores Ass’n V. Local 1422, ILA, 765 F.2d

SD CLA, OR ici eins

S.E.L. Maduro (Fla.) Ine. v. ILA, 765 F.2d 1057

CED, BAF TIED ncinccerecencenseninisstiasnnetinntaininttiaicanennees

Steelworkers v. Enterprise Wheel & Car Corp., 363

Es ED ceceesnetctncenntenanivnnncomengunieastinnansnieubians

W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757

I een cscckits tasetesncctinconaepiactinhihebtsashlibetine sappiooninni

RULE:

US. Gupreme Court Rate 17 —.............................

Page

3, 7

IN THE

Supreme Court of the United States

OCTOBER TERM, 1986

No. 86-1333

NATIONAL ELEVATOR INDUSTRY, INC.,

i: Petitioner,

INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF FOR RESPONDENT IN OPPOSITION

COUNTERSTATEMENT OF THE CASE?

In general, we accept the statement of the case by peti-

tioner, National Elevator Industry, Ine. (“NEII’”’). It

may aid the Court, however, for us to set forth the facts

which bear most directly on the questions sought to be

presented by petitioner.

1. The Goldberg Award and Its Confirmation.

Article V of the Standard Agreement between NEII

and respondent, International Union of Elevator Con-

structors, AFL-CIO (“IUEC”’), provides a formula where-

by wages in each locality are to be determined on the

1 Throughout this brief, “Pet.” will refer to the Petition for a

Writ of Certiorari and “Pet. App.” will refer to the Appendix

thereto.

basis of the collectively bargained compensation of four

other building and construction trades in that locality.

In August 1983, NEII sought to impose a wage reduc-

tion in Cedar Rapids, Iowa. The IUEC contended that

the formula permitted only increases and not decreases.

The IUEC filed a grievance under the arbitration clause

of the agreement and filed suit in the United States Dis-

trict Court for the Southern District of New York, pray-

ing for a temporary injunction to block the wage cut

pending arbitration of the grievance and for a perma-

nent nationwide injunction barring NEII from decreas-

ing the wage rate in Cedar Rapids or in any other loca-

tion in the United States. (Pet. App. 48a.) The District

Court (Lowe, J.) refused to enjoin the wage increase

pending arbitration; she did not rule on the request for

permanent relief (Pet. App. 50a).

On April 23, 1984, Arbitrator Stephen B. Goldberg

issued his Award. Arbitrator Goldberg framed the issue

before him as follows:

The central issue presented by this case is whether

the Employers were authorized by Article V of the

1967 Agreement, as carried forward into the 1982

Agreement, to decrease the Cedar Rapids wage rate

on the basis of the four highest paid building trades

in the Cedar Rapids area. [Pet. App. 70a.]

Arbitrator Goldberg determined, on the basis of his in-

terpretation of the agreement, that the Employers were

authorized to decrease t« Cedar Rapids wage rate. Ac-

cordingly, his award was “The grievance is denied.”

(Pet. App. 5la, 79a). NEII thereupon filed a motion,

in the suit which had been filed by IUEC, to confirm the

award and for summary judgment dismissing the IUEC’s

complaint for a permanent injunction against wage reduc-

tion in Cedar Rapids or in any other location in the United

States. The IUEC cross-moved to vacate the award and

for summary judgment on its complaint for a permanent

nationwide injunction against wage decreases.

On August 29, 1984, the District Court (Goettel, J.)

granted NEII’s motion to confirm and denied IUEC’s

motion to vacate. International Union of Elevator Con-

structors, AFL-CIO v. National Elevator Industry, Inc.,

590 F. Supp. 1218. In his opinion, Judge Goettel first

ruled that the legal standard to be applied in reviewing

the arbitrator’s findings is that of Steelworkers v. Enter-

prise Wheel & Car Corp., 363 U.S. 593 (1960):

Thus, in considering the motions to confirm or to

vacate the findings of the arbitrator, the Court may

only decide whether the findings draw their essence

from the agreement under which the arbitrator based

his authority. [590 F. Supp. at 1220.]

Judge Goettel then determined, on the basis of his exam-

ination of the contract and the award, that Arbitrator

Goldberg’s findings did draw their essence from the col-

lective bargaining agreement (id.). Thereupon, Judge

Goettel concluded:

For the reasons outlined above, the findings of Arbi-

trator Stephen B. Goldberg are confirmed and the

motion of the IUEC to vacate those findings are

denied. The defendant will enter judgment accord-

ingly. [Jd. at 1221.]

Thereafter, Judge Goettel ordered, adjudged and decreed

that:

1. Plaintiff’s [IUEC’s] motion to vacate said arbi-

tration award be and hereby is DENIED.

2. Plaintiff's motion for summary judgment in

this action be and hereby is DENIED.

3. Defendant’s [NEII’s; motion to confirm said

arbitration award be and hereby is GRANTED.

4. Because said arbitration award has been con-

firmed the plaintiff's complaint be and hereby is

DISMISSED. [App. 81la.]

The Court of Appeals affirmed without opinion (Pet.

App. 82a), and this Court denied certiorari (106 S.Ct.

67 (1985) ).

2. The Present Litigation.

In March and May of 1985, NEII, asserting Article V,

reduced the wage rates of elevator mechanics in Houston

and Dallas, Texas, respectively. Separate grievances were

filed, invoking arbitration of the legality of the decreases

under the agreement. NEII then brought the present

action in the United States District Court for the South-

ern District of Texas seeking to enjoin these arbitrations;

IUEC filed a counterclaim to compel arbitration of the

Houston and Dallas wage reductions. The District Court

(DeAnda, J.) ordered, inter alia, that the IUEC was

entitled to summary judgment and an order compelling

arbitration. (Pet. App. 10a.) In his Memorandum Opin-

ion (Pet. App. 3a-9a), Judge DeAnda concluded as

follows:

1. The scope of Arbitrator Goldberg’s Award was

limited to the Cedar Rapids wage reduction (Pet. App.

6a-7a).

2. Arbitrator Goldberg’s Award does not bar abri-

tration of the Houston and Dallas wage reductions (Pet.

App. 7a-8a).

3. Arbitration is not barred by the res judicata effect

of Judge Goettel’s decisions confirming the Arbitrator’s

Award and denying a permanent injunction against the

wage reduction (Pet. App. 8a-9a).

The Court of Appeals for the Fifth Circuit affirmed

“for the reasons assigned in the District Court’s Order

of April 17, 1983...” (Pet. App. la-2a).?

2 Subsequently, on December 29, 1986, Arbitrator Howard

LeBaron sustained IUEC’s grievance that the Dallas reduction

was not authorized by the Agreement. On March 6, 1987, Arbi-

trator John Owen heard the Houston grievance; his award has not

yet issued.

REASONS FOR DENYING THE WRIT

Petitioner seeks to bring before this Court two ques-

tions: first, whether Judge Goettel’s order confirming the

Goldberg Award bars arbitration of the Houston and

Dallas grievances and, second, whether his order dismiss-

ing the union’s complaint, insofar as it sought a nation-

wide injunction, bars such arbitration. The decision of

bota courts below that neither of these rulings bars the

arbitration is clearly correct. Neither question raises an

issue warranting review under the criteria delineated in

Rule 17 of this Court’s rules.

1. The Asserted Preclusive Effect of Judge Goettel’s

Order Confirming the Award.

A. In an effort to suggest a conflict between the deci-

sion below and decisions of this Court, Petitioner asserts:

The effect of the Fifth Circuit’s summary affirm-

ance herein is that the IUEC is permitted to chal-

lenge an award in a second arbitration even though

that award was judicially confirmed. Clearly, this

is contrary to the intent of Steelworkers v. Enter-

prise Wheel & Car Corp., [863 U.S. 593 (1960)];

and W.R. Grace & Co. v. Rubber Workers [461 U.S.

757 (1983)]. [Pet. 15.]

This argument is entirely invalid. It depends on using

the word “challenge” in two materially different senses

(Pet. 14-15) :

(1) A “challenge” of an award in a judicial review

or enforcement proceeding as exemplified by Enterprise,

seeks to set aside the result reached by the arbitrator;

(2) on the other hand, a “challenge” of an award in

a subsequent arbitration—such as was involved in W.R.

Grace—does not seek to upset the result of the first

award but asks the second arbitrator, in resolving a sep-

arate grievance, to reach a different conclusion with

respect to the meaning of the agreement.

Respondent IUEC challenges the Goldberg award only

in the second sense—that is, we seek to persuade arbi-

trators, in resolving the Houston and Dallas wage reduc-

tion grievances, that Article V does not permit those

wage reductions. IUEC does not seek to change the

result of the Goldberg arbitration—that is, we do not

seek to upset the Cedar Rapids wage reduction. W.R.

Grace holds that a “challenge” in the second sense is

permissible, unless the parties’ agreement requires future

arbitrators to follow the first arbitrator’s interpretation,

and holds further that the question whether the agree-

ment does so require is for the arbitrator. (461 U.S. at

764-766.) Judicial confirmation of the first arbitrator’s

award does not change this result; indeed, petitioner’s

contention that these types of “challenge” are mutually

exclusive fails to take account of the restrictive standard

of review which was established in Enterprise and re-

affirmed in W.R. Grace (461 U.S. at 764-765). Judicial

enforcement of an award establishes only that the award

“draws its essence from the collective bargaining agree-

ment” (Enterprise, 363 U.S. at 567). Since, under this

standard enforcement is required “regardless of what

[the court’s] view might be of [the arbitrator’s] con-

tractual interpretation” (W.R. Grace, 461 U.S. at 765),

such enforcement does not establish that the opposite

interpretation is not “correct” or could not likewise “draw

its essence from the collective bargaining agreement”.

Accordingly, in W.R. Grace, where the second arbitrator

(Barrett) had disagreed with the first arbitrator (Sa-

bella), this Court, in enforcing the Barrett award, “dis-

agree[d] with the [Court of Appeals’] initial premise

that the validity of the Sabella award is relevant.” (Jd.

at n. 7.)

In reviewing Arbitrator Goldberg’s award in this case,

Judge Goettel applied the Enterprise standard; he noted

that Arbitrator “Goldberg quite properly looked to the

history of the agreement and found that the use of the

word ‘increase’ was not in any way intended to bar de-

creases”, and held ultimately that the Goldberg award

eee

“draws its essence” from the Standard Agreement. (590

F. Supp. 1220, quoted at Pet. 19). Petitioner correctly

states that these holdings “are binding upon the parties”

(id.) but, as shown earlier, they do not establish that

a second arbitrator, looking at the same agreement, is

not free to determine that the bargaining history is ir-

relevant (or to disagree with Arbitrator Goldberg’s as-

sessment of that history), or, for some other reason, to

conclude that Article V does “bar decreases”. Thus, peti-

tioner errs when it says that “IUEC’s attempt to obtain

a second and third arbitration of what is concededly the

same dispute, is an impermissible collateral attack on

that award and the judgment of the federal court con-

firming the award.” (Jd.)

B. In the present action, Judge DeAnda recognized

that “confirmation of the [arbitrator’s] award is not an

affirmation that the award represents the correct resolu-

tion of the dispute” (Pet. App. 8a, citing Judge Goettel’s

explication of the standard of review). It was on this

basis that he determined: “The District court’s decision

confirming the award and denying a permanent injunc-

tion against the wage reduction is not res judicata in this

case because its scope is limited to the scope of the arbi-

trator’s award.” (Id.) Accordingly, as petitioner says,

“Judge DeAnda held that since the scope of the award

was limited to Cedar Rapids, Judge Goettel’s judgment

confirming that award was similarly limited” (Pet. 17,

citing Pet. App. 8a-9a). Petitioner disagrees with that

holidng only on the basis “that Judge DeAnda erred in

concluding that Goldberg’s award was limited to Cedar

Rapids” (Pet. 17). In support of this claim of error

(id. 18-19), petitioner does not—and cannot—point to

anything in Judge Goettel’s opinion which constitutes a

ruling that the scope of the Goldberg award extended

beyond the Cedar Rapids grievance. Rather, petitioner

perforce confines itself to arguing that Judge DeAnda

himself misinterpreted the Goldberg award in this re

spect.

The first question presented by the petitioner thus

comes down to the claim that the District Court, and the

unanimous Court of Appeals in adopting the District

Court’s reasoning, have erred in interpreting a particu-

lar arbitration award. Plainly, such a contention does

not raise an issue of general importance which merits

this Court’s attention.

2. The Asserted Preclusive Effect of Judge Goettel’s

Order Dismissing IUEC’s Complaint.

Petitioner’s second question presented seeks further re-

view of Judge DeAnda’s ruling, affirmed by the Court

of Appeals, that Judge Goettel’s dismissal of the IUEC

complaint for a nationwide injunction against wage re-

ductions does not, as a matter of res judicata, bar arbi-

tration of the Houston and Dallas wage reduction griev-

ances. That ruling was clearly correct, and petitioner’s

contention that it conflicts with decisions in other cir-

cuits disregards the critical difference between those cases

and the present one.

As Petitioner says, Judge Goettel dismissed IUEC’s

complaint “because he confirmed the Goldberg award

which expressly held that such reductions were author-

ized by the Standard Agreement.” (Pet. 20, emphasis in

original.) In that complaint, the IUEC had sought a

preliminary and permanent injunction against the wage

reduction in Cedar Rapids or “in any other location in the

United States” (Pet. 5, emphasis in original). IUEC

would have been entitled to that relief only if the court

were to rule that no arbitrator could properly conclude

that the Agreement permits a wage reduction. Once

Judge Goettel had determined, in confirming the Gold-

berg award with respect to the Cedar Rapids grievance,

that an arbitrator could properly so determine, so that

the Cedar Rapids wage reduction could go into effect, it

necessaril, followed that the IUEC was not entitled to

an injunction against the reduction “in any other loca-

tion * * * .” But, for the reasons discussed at pp. 6-7,

supra, Judge Goettel’s conclusion that the Goldberg award

I eee

was a@ permissible interpretation of the Agreement did

not carry with it the proposition that it was the only

permissible interpretation of the Agreement. By a parity

of reasoning, the refusal to grant IUEC a nationwide

injunction against wage reductions is not a judgment—

expressly or implicitly—that the NEII is entitled to im-

pose such a reduction beyond Cedar Rapids. It means

only that the court will not interfere with either party’s

right under the agreement to have the propriety of wage

reductions at other locations—if imposed by the employ-

ers and challenged by the union—determined by arbitra-

tion.

Moreover, because the denial of the injunction was due

to the confirmation of the award, rather than to any

determination concerning the scope of the Goldberg

award, that order did not foreclose the courts below from

concluding, as they did, that the scope of the award was

limited to Cedar Rapids. It is in this critical respect

that the present case differs from the decisions of the

Fourth and Eleventh Circuits which petitioner asserts

are in conflict with the ruling below: S.C. Stevedores

Ass'n V. Local 1422, ILA, 765 F.2d 422 (C.A. 4, 1985)

and S.E.L. Maduro (Fla.) Ine. v. ILA, 765 F.2d 1057

(C.A. 11, 1985). For there, the same courts which con-

firmed the arbitration award—which was rendered by a

Special Emergency Hearing Panel (“EHP”) under the

Containerization Agreement of the ILA Master Contract

—had expressly determined that that award was bind-

ing on all ports, although it had been rendered in dis-

posing of a grievance arising out of a single port, Gal-

veston.* The Second Circuit ruled:

* The issue had arisen because employer associations from ports

in regions other than Galveston had objected to being joined as

defendants in the ILA’s action to confirm the EHP’s award. It is,

of course, unremarkable that, under one agreement an award aris-

ing out of a dispute at a single location has a nationwide effect

whereas, under a different agreement between other parties, an

award arising out of a grievance in one location is binding only

there. (Cf. W.R. Grace, supra, 461 U.S. at 765 quoted at p. 6, supra.)

the award purported to be a decision based on the |

Master Contract. All of the respondents are parties

to the Master Contract. Thus, the EHP decision, if

valid, would be binding against all of the respond-

ents. The district court did not err in confirming

the award against them. The decision of the EHP

is binding on all ports governed by the Master Con-

tract. ([Unpublished Slip Op. at p. 3, International

Longshoremen’s Association v. West Gulf Maritime

Association, 765 F.2d 135 (C.A. 2 1985), affirming

594 F.Supp. 670 (S.D.N.Y. 1984), emphasis added. ] )

The Fourth Circuit quoted the emphasized sentence, 765

F.2d at 423, and the Eleventh Circuit quoted the entire

passage from the Second Circuit’s opinion, 765 F.2d at

1059, n. 3. Those courts correctiy reco: nized that this

holding precluded arbitrations concerning the same ques-

tion arising at other ports. But the decisions of the |

Fourth and Eleventh Circuits in the ILA litigation are

not in point in the present case because the courts which

confirmed the Goldberg award made no rulings concerning

its scope and therefore did not preclude Judge DeAnda’s

consideration of that issue. -

CONCLUSION

For the foregoing reasons, the Petition For A Writ of

Certiorari should be denied.

Respectfully submitted,