Opposition Brief — Interstate Brands Corp. v. Bakery Drivers & Bakery Goods Vending Machines, Local No. 550, International Brotherhood of Teamsters

No. 98-2015 AUS 16 129

IN THE

Supreme Court of the Hnited States

OCTOBER TERM 1999

INTERSTATE BRANDS CORPORATION.

Petitioner,

v.

BAKERY DRIVERS & BAKERY GOODS

VENDING MACHINES, LOCAL UNION NO. 550,

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

Respondent.

Own Petririon For a Writ OF CERTIORARI

To Tue Unrrep States Court OF APPEALS

FOR THE SECOND CIRCUIT

—_—_——_—— a

BRIEF OF RESPONDENT IN OPPOSITION TO PETITION

FOR A WRIT OF CERTIORARI

— —_—__—_ ee ——— ——

7

Roy N. WATANABE

Counsel of Record

Enc R. GREENE

Spvak, Lipton, WATANABE, Spivak &

Moss LLP

Attorneys for Respondent

1700 Broadway

Suite 2100

New York, New York 100/9

(212) 765-2100

SE ee ee ee ee ee ee

TABLE OF CONTENTS

TABLE OF CONTEINEG......4.0.0000cscccccccseee i

TABLE OF AUTHORITIES hieianwae | i

POINT I

POINT II

THE COURT OF APPEALS CORRECTLY

HELD THAT PETITIONER’S LAWSUIT

BROUGHT UNDER SECTION

303 OF THE LMRA WAS

ARBITRABLE UNDER THE BROAD

ARBITRATION CLAUSE CONTAINED IN

THE PARTIES’ COLLECTIVE BARGAINING

AGREEMENT I

CONGRESS DID NOT INTEND TO

EXCLUDE SECTION 303 CLAIMS FROM

ARBITRATION 6

CONCLUSION 12

TABLE OF AUTHORITIES

Vv. = v

956 F. Supp. 1190 (D.N_J. 1996)............... 5,7

$00 U.S. 20 (1991)... ccc ccccccceeceeeceeeeeeeees 3

925 F.2d 1486 (D.C. Cir. 1991)................. 11

: ;

eer cemneeneeer ay arma ‘o ieien w '

- .) | Ree 9,10

460 U.S. 693 (1993)...... 5

Mitsubishi Motor Corp. v.

473 US. 614 (1985)..................------6,7.B,11

***

Cases Page

Dairy Emo! Local Union No. 58

59 F.2d 598 (2d Cir. 1966)........00.0.0000.... 4,5

Vv.

482 U.S. 220 (1987)......... 00000. 6,7,8,9,11

Vv. i 731,

337 F.2d 437 (7 Cir. 1964).....00000000.0 00. 8

v. "

111 F.3d 1289 (6" Cir. 1997)...000000 0. 5

Wright v. Uni 1 Maritime Service Com..

Us. .

Le 3.4.5

Statutes

The Clayton Act, Section 4 --

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The Securities Exchange Act of 1934,

Section 10(b) --

Bee ie OP PUI cncccocccescnccccccsssccccoceens 9

The Racketeer Influenced and

Corrupt Organization Act --

IS U.S.C. § 19G4(e).....................00000-. 8.9

The National Labor Relations Act,

Section 8(a)(3) --

29 U.S.C. § 158(8)(3)....0.0-cecccccceeeeeeeeeeen $

Statues Page

The National Labor Relations Act,

Section 8(b)\(4) --

BF Claes OF Be iccencecoccctnescnscsonssel 9,10

The Labor-Management Relations Act,

Section 303 --

ere

Other Authoriti

105 Cong. Rec. 3512 (1959)...............ccceeeeeeeeeeee IO

Respondent, Bakery Drivers Local Union No. $50

(“Respondent,” “Local 550,” or the “Union”™), submits this

bnef in opposition to the Petition for a Writ of Certiorari

filed by Interstate Brands Corporation (“Petitioner” or

“IBC")

POINT I

THE COURT OF APPEALS CORRECTLY HELD

THAT PETITIONER'S LAWSUIT BROUGHT

UNDER SECTION 303 OF THE LMRA WAS

ARBITRABLE UNDER THE BROAD

ARBITRATION CLAUSE CONTAINED IN THE

PARTIES’ COLLECTIVE BARGAINING

AGREEMENT

The underlying issue presented in this case 1s

whether a lawsuit brought by Petnoner against the union

under Section 303 of the Labor-Management Relatons Act

(“LMRA"), 29 U.S.C. § 187, is subject to arbitration under

what the Court of Appeals observed to be the “unusually

broad arbitration clause” contained in the parties’ collective

bargaining agreement. Pet App A. 3a That clause subjects

the following matters to gnevance and arbrtranon

[A] complaints, disputes or gnevances

ansing between (the parues) involving

questions of interpretation or apphcanon of

any clause or matter covered by this

Agreement, or any act or conduct or relapon

between the parves hereto. directly or

mdurectiy

Id

In wew of the breadth of the agreement 5 artetrapon

clause, the Unsted States Distrnct Court for the Eastern

2

Dastnct of New York held that the Petinoner was obhgated

to arbetrate its statutory claim and therefore dismussed [BC's

law sult

In this case, the Court concludes that the

broad arbitration clause as set forth m [the]

agreement does cover Planuff s clam

Indeed, Plaintiff's claim is a “dispute”

“artsing between” the Plaintiff and Local 550

mvolving “conduct” “between the partes ~

Pet App B, 25a-26a

The Second Circuit affirmed, as « agreed with the

Destrct Court that Pettnoner’s Section 303 clam 1s clearly

covered under the agreement s broad arbitravon clause

Thus, it seems appropnate for us to infer

from [the arbraton clause] of the

Agreement that IBC has waived ms nght to «

pedbcial forum for the vindication of ms

provision 1s quite simular to one our Court

deemed “very broad” m Associated Bock

Mason Contractors \ Hamngton 820 F 24

31 22d Caw 1987) Indeed, the two clauses

we near! idenucal Such language Could

The Court of Appeals stated. moreover that such s

concluson “1s compelled as a mate: of contract

construcuon without the use of am presumppon Pet

App A. 9 in so holding the Croun Court was fact to

the Supreme Court's recent decumon = Wogtt . Umversal

Macume Semce Com, US. 1195 Ci 391 (1008)

Wags requires « court to determine whether wathout the

use of a presumpvon favonng arbrrabilt) an ordinary

textual anatves of a CBA show{s) thet matters wach go

bevond the imerpretanor and apphoanor of comtract term

are sulyect to arbitration” id at . 119 S Ci ot 906

The Second Circunt aso followed Wngts

Concluding that 1 was not reguired to find that Petmione:

hac Glearh and unmustakabh” warved ms mgt to # pudicun!

forum for ts Secuon 303 clam ' ls Wrgtn the Coun heid

that 2 umon ) negotusted waver is Coliectrve harpaming

agreemen' of an wadragua) emplover + matunon ngtr ice

pu@aal forum may be grven effect on) dee clew and

unmusakeble” id ot . 119 S Ci 395-06 By comment

the Wogts Cour exphorth stated that the cies and

unmustakabie requiremem [:}) agi apphcate oo the Cane

an indridual emplover who a: 6 direct part tos comtract

has personal war (ed) his own | statutory | git tc 6

picdfouwm ia. 1995 Ci aot 397 (emphees

supphed) (ortung

SOUS 20 (199!) (hokdung thet « Glam brought under

| Peutone: misstates the Second Crown) opmor wher

asserung the! the Cour ‘notled) the sbeence of 6 Cine

exphot satemen the [BC waned m ngtr ic procend

under Sector 30) @ federal cout" Pe 3 The Coun of

Appeals di¢ not sey thet the agreemen faued ic Coma

language induating ¢ Glew end unmumeiatee wee Racker

the Cour teié thet the ‘Glee ané unmumebabie ware”

requrremen dors nc app tc e pert) the 8 Gre pat:

1° &2 agreement to afherete Pe App A 6A

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6

As an additional matter, the Wnght Court’s

application of the “clear and unmistakable” standard to a

union’s negotiated waiver of an individual employee’s

statutory claim was motivated by broad policy concerns that

do not exist in the case at bar. Thus, in carving out that

narrow exception to the Gilmer line of cases, the Wright

Court explicitly relied upon the Supreme Court’s decisions

in Alexander v. ner-Denver Co., 415 U.S. 36 (1974)

Barrentine v. Ark -Best Frei ., 450

U.S. 728 (1981). In those cases, the Supreme Court was

particularly concerned about a claim that “is based on rights

arising out of a statute designed to provide minimum

substantive guarantees to individual workers.” Barrentine,

450 U.S. at 737. Clearly, no such concerns exist as to a

lawsuit brought by a nationwide producer and distributor of

cake and bakery products seeking damages resulting from

an alleged secondary boycott. Pet. App B., 18a. °

POINT i

CONGRESS DID NOT INTEND TO EXCLUDE

SECTION 303 CLAIMS FROM ARBITRATION

In Mitsubishi, the Supreme Court unequivocally

abandoned the presumption against arbitration of statutory

claims and held that a party opposing such arbitration has

the burden of proving that Congress evinced an intention,

through the statute’s text or its legislative history, to

preclude a waiver of judicial remedies for the statutory

* The Supreme Court has also expressed a policy concern

where a broad arbitration clause resulted “from

overwhelming economic power.” Mitsubishi Motors Corp.

v. Soler Chrvsler-Plymouth, Inc., 473 U.S. 614, 627,

(1985); see also Shearson American Express, Inc. v.

McMahon, 482 U.S. 220, 227 (1987). Applying the clear

and unmistakable standard to a national employer’s

statutory claim would turn such a policy on its head.

Ta ene een eee en eR

-

rights at issue. 473 U.S. at 628; see also

Shearson/American Express, 482 U.S. at 227.

The District Court below unearthed no such

Congressional intent. Instead, it determined that "there is

no evidence [of] Congressional intent to preclude [Section

303] claims for arbitration." Pet. App. B, 29a, 30a; see also

Farmland Dairies, Inc., 956 F. Supp. at 1202 (reviewing

statute and legislative history of the LMRA, court concludes

that "there is no indication that [a federal court] remedy was

meant to be exclusive if the parties have agreed otherwise").

Petitioner nonetheless contends that it has met its

burden of proof under Mitsubishi and Shearson/American

Express demonstrating that Congress intended to exclude

Section 303 claims from arbitration. Pet. 3. The crux of

Petitioner’s argument is that the mere fact that Congress

made damage claims under Section 303 of the LMRA

judicially enforceable is sufficient to establish that Congress

intended to preclude arbitration of such claims. In support

of its argument, IBC points to references in the legislative

history of Section 303 addressing the remedial and deterrent

functions of a damages claim. Pet. 4-5. This precise

argument was rejected in both Mitsubishi and

Shearson/American Express.

In Mitsubishi, the Court conducted an exhaustive

investigation of Section 4 of the Clayton Act, 15 U.S.C. §

15, to determine whether Congress, in creating a judicially

enforceable private-treble damages claim, intended to

exclude such a damages claim from arbitration. The Court

found no such Congressional intent:

[nJotwithstanding its important incidental

policing function, the treble-damages cause

of action... . seeks primarily to enable an

injured competitor to gain compensation for

8

that injury. . . .[s]o long as the prospective

litigant effectively may vindicate its statutory

cause of action in the arbitral forum, the

statute will continue to serve both its

remedial and deterrent function.

473 US. at 635, 637.

The Mitsubishi Court made clear, moreover, that the

submission of a treble damages claim to arbitration would

not undermine the substantive rights afforded under the

statute: “[b]y agreeing to arbitrate a statutory claim, a party

does not forgo the substantive nghts afforded by the statute;

it only submits to their resolution in an arbitral, rather than a

judicial, forum.” 473 U.S. at 628.“

Likewise, the Shearson/American Express Court

found no evidence that Congress intended to exclude a

treble damages claim brought under the RICO statute from

arbitration, even though “the legislative history of [18

* IBC’s reliance on the pre-Mitsubishi decision rendered by

the Seventh Circuit in 1964 in Twin Excavating Co. v.

Local Union No. 731, 337 F.2d 437 (7™ Cir. 1964) is

misplaced. The Seventh Circuit’s hesitation in Twin

Excavating to subject an employer’s Section 303 claim to

arbitration reflected previously held notions that arbitrators

were limited to hearing statutory claims sounding in

contract, as opposed to those involving torts. However, as

the Mitsubishi Court stated emphatically: "[W]e are well

past the time when judicial suspicion of the desirability of

arbitration and of the competence of arbitral tribunais

inhibited the development of arbitration as an alternative

means of dispute resolution [of statutory claims].” 473 U.S.

at 626-627, 105 S. Ct. at 3354." Indeed, Twin Excavating

has not been cited since Mitsubishi by a single court in any

jurisdiction.

9

U.S.C.] § 1964(c), reveal[ed] [an] emphasis on the

remedial role of the treble-damages provision.” 482 U.S. at

240.°

Petitioner makes the additional argument that the

National Labor Relation Board’s deferral policies regarding

unfair labor practice charges brought under Section 8(b)(4)

of the National Labor Relations Act (“NLRA”), 29 U.S.C. §

158(b)(4), substantiate its claim that Congress intended to

exclude LMRA Section 303 claims from arbitration. IBC,

however, erroneously conflates two distinct and unrelated

legal remedies.

The Supreme Court, in International

Longshoremen’s & Warehousemen’s Union v. Juneau

Spruce Corp., 342 U.S. 237 (1952), reviewed the LMRA’s

legislative history and concluded that the respective modes

of relief provided under Section 8(b)(4) of the NLRA and

Section 303 of the LMRA are separate and independent of

each other:

Section 8(b)(4)(D) gives rise to an

administrative finding; § 303(a)(4), toa

judgment for damages. The fact that the two

sections have an identity of language and yet

specify two different remedies is strong

confirmation of our conclusion that the

remedies provided were to be independent of

* The Shearson/American Express Court also rejected the

argument, identical to the one made by Petitioner here,

Pet. 4, that Congress’ failure to specifically identify

arbitration as a substitute forum for a claim brought under

Section 10(b) of the Securities Exchange Act of 1934, 15

U.S.C. § 78j(b), meant that Congress intended to exclude

such a statutory claim from arbitration. 482 U.S. at 229-

238.

10

each other. Certainly there is nothing in the

language of § 303(a)(4)° which makes its

remedy dependent on any prior

administrative determination that an unfair

labor practice has been committed. Rather,

the opposite appears to be true.

Id. at 243-44 (footnote omitted).

Thus, Petitioner’s reference to the NLRB’s deferral

policies in the case of 8(b)(4) charges as evidence of

Congressional intent with respect to the separate and

different remedy provided by Congress under Section 303

misses the mark entirely.

As a public law enforcement agency, the NLRB

vindicates public rights through its pursuit of equitable relief

under Section 8(b)(4). By stark contrast, Congress, in

enacting Section 303, “set aside for private redress, acts

which might also be subjected to the administrative

process.” Juneau Spruce, 342 U.S. at 244 (emphasis

supplied).’ When redress is pursued through the Board’s

administrative process, public — not private — nghts and

° Section 303(a) formerly contained separate subsections

which addressed each of the respective subcategories of

Section 8(b)(4). These subsections were eliminated in 1959

with the adoption of the Landrum-Gniffin amendments to

the LMRA in order to streamline the statute. See 105 Cong.

Rec. 3512 (1959).

” As Petitioner acknowledges, Congress specifically

divested the NLRB of jurisdiction to pursue a Section 303

damages claim. Pet. 4.

11

agreements are implicated.* When relief is sought by a

private employer under §303, purely private rights are at

issue.

Thus, the Supreme Court has held that when a

Statute provides for both public and private remedies, the

disposition of the public remedy is irrelevant to the

determination of the validity of a contractual agreement to

arbitrate a private cause of action involving the same or

similar underlying facts. See Mitsubishi, 473 U.S. at 633

(treble-damages suits under federal antitrust laws may be

subject to arbitration even though such conduct may also

give rise to claims of criminal liability); Shearson/American

Express, 482 U.S. at 240 (the “overlap” between RICQ’s

civil and criminal provisions does not render a treble-

damages claim nonarbitrable).

* The NLRB has broad discretion to decide whether or not

to defer an unfair labor practice charge to arbitration. See

Hammontree v. NLRB, 925 F.2d 1486, 1499 (D.C. Cir.

1991) (“Board’s policy of deferment represents a reasonable

construction of the Board’s statutory duties and authority

under the NLRA and the LMRA”). But its election not to

exercise such discretion has no bearing on the enforceability

of a private employer’s contractual commitment to arbitrate

its private damages claim.

12

CONCLUSION

For the foregoing reasons, IBC’s Petition for a Wnit

of Certiorari should be denied.

Dated: August 13, 1999

New York, New York

Respectfully submitted,

ROY N. WATANABE

Counsel of Record

ERIC R. GREENE

SPIVAK, LIPTON, WATANABE,

SPIVAK & MOSS LLP

Attorneys for Respondent

1700 Broadway

New York, New York, 10019

(212) 765-2100