Opinion
Civil No. 02-1101 ADM/AJB.
July 15, 2003.
Richard A. Williams, Jr., Esq., Williams Iversen, P.A., Roseville, MN, appeared for and on behalf of Plaintiff.
Dominic J. Cecere, Esq., Leonard, Street and Deinard, P.A., Minneapolis, MN, appeared for and on behalf of Defendant.
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
On June 4, 2003, counsel presented oral arguments before the undersigned United States District Judge on the Motions for Summary Judgment of Plaintiff Minneapolis-St. Paul Mailers Union, Local #4 (the "Union") [Docket No. 14] and Defendant Northwest Publications, Inc., d/b/a St. Paul Pioneer Press (the "Company") [Docket No. 11], as well as the Union's Rule 11 Motion for Sanctions [Docket No. 23]. The Union seeks to vacate pursuant to 9 U.S.C.
§ 10(a)(4) the February 24, 2002 Opinion and Award ("the Award") of Arbitrator Gerald Wallin (the "Arbitrator"). The Company moves to affirm the Award. For the reasons set forth below, the Union's Motions are denied and the Company's Motion for Summary Judgment is granted.
II. BACKGROUND
The Company publishes the St. Paul Pioneer Press and employs members of the Union to perform various tasks to prepare the newspapers for sale to the public. The working relationship between the parties is governed by a Collective Bargaining Agreement ("CBA"). At issue in the present dispute is work known as "insertion" or "inserting," which is the placing of sections of the paper into one another to create a single package.
A. Relevant Contract Provisions
The CBA sets forth the Union's jurisdiction as follows:
Section 6. Jurisdiction. The jurisdiction of the Union is defined as including all mailing room work of the Publisher and includes all work appertaining to mailing, such as addressing, tagging, jogging, stamping, labeling, bundling or wrapping, preparing list or wrappers . . . stacking, folding, handling of bundles or mail sacks, distributing, counting of papers (leaving or returning), banding, strapping, tying, sacking, delivering papers to chutes, inserting or dispatching papers, envelopes or magazines, whether done by hand or power machine . . . and the Publisher shall make no other contract covering such work except as otherwise provided in this agreement . . .
All work within the jurisdiction of the Union shall be performed only by journeymen, journeymen II, trainees and extras, except as otherwise provided in this agreement.
Notwithstanding any other provision of this agreement, the Publisher shall have the right to do the following:
A. To distribute newspapers and transaction sheets to the field in any form or manner determined by management and to count and tie newspapers in the field by persons not covered by this agreement. However, the Publisher's right to tie newspapers in the field shall not be construed as a right to prepare newspapers in the field for wholesale redistribution to other distribution centers.
. . .
CBA § 6 (Cecere Aff. Ex. C).
A subsequent Addendum, incorporated by its terms into the CBA, provided for increased employee benefits in exchange for an agreement eliminating restrictions on bulk distribution:
THIS AGREEMENT, made this 21st day of November, 1978, between NORTHWEST PUBLICATIONS, INC., publishers of the St. Paul Pioneer Press and Dispatch and MINNEAPOLIS-ST. PAUL MAILERS' UNION #4, shall be attached to, and made part of, the present collective bargaining agreement.
A. The intent of this Agreement is as follows:
1. The Publisher shall have no restrictions on his method of bull distribution other than the inserting of a minimum of 40,000 complete Sunday papers by Mailroom personnel (40,000 changed to 20,000 effective 11-1-83).
2. The balance of the Sunday paper may be distributed in a maximum of three separate parts. Inserting (if any) into the three separate parts will be done by Mailroom personnel.
3. In the event of any conflict between this supplemental agreement and any provision of the collective bargaining agreement between Minneapolis-St. Paul Mailers' Union #4 and Northwest Publications, Inc. . . . the terms of this supplemental agreement shall control.
. . .
Addendum at 1 (Cecere Aff. Ex. D).
B. The Inserting Dispute
For over 30 years, the Sunday newspapers were distributed to home delivery carriers in bundles of separate sections, such that they were not fully inserted when they left the mailroom. In early 1990, the Union learned that Sunday papers were being delivered to customers' homes as fully-inserted single packages, despite continuing to leave the printing facility in bundles. The Union brought this issue to the attention of the Company, contending that any insertion work done by home delivery carriers contravened the CBA, which reserved all inserting duties for Union members. The Company responded that the delivery persons were independent contractors, as opposed to employees, who were making autonomous decisions to insert the papers and deliver them as such, and over whom the Company had no control. This dispute continued informally until the Union filed a formal grievance claiming violation of the jurisdiction provision of the CBA, based on the Company's alleged use of nonUnion personnel for performance of insertion work. The matter resulted in an arbitration hearing, held September 18-20, 2001, and culminated in the Arbitrator's Opinion and Award of February 24, 2002, determining the Company had not violated its jurisdictional agreements with the Union and denying the grievance accordingly. Award at 12.
The stipulated issue statement presented the following questions to the Arbitrator: "Did the Company violate its jurisdictional agreements with Local 4 by having inserting work performed at distribution centers by non-union personnel? If so, what is the appropriate remedy?" Id. at 2. After chronicling the history and evolution of the distribution process and the contention over insertion work, the Arbitrator made findings regarding the submitted evidence and the operative provisions of the CBA. He concluded that the language of the Addendum established that all inserting work beyond the specified minimum number of papers was outside the scope of the Union's exclusive jurisdiction. Id. at 11-12. In reaching this decision, the Arbitrator cited an internal office memorandum (the "Memo") proffered by the Company as evidence of the parties' intent regarding the Addendum. Id. at 10-11. He found that the Memo, summarizing for management a Company negotiator's understanding of the agreements reached with the Union, provided a useful indication of the intended meaning of the pertinent portion of the Addendum. Id. at 11. He concluded that the language of the Addendum, as construed in light of the Memo, "relinquished a substantial amount of" insertion work to the Company's discretion, and, therefore, given that the Union had always inserted more than the minimum number of papers specified in the Addendum, the Company did not breach the CBA. Id. at 11-12. In their cross Motions, the Union moves to vacate this award and the Company seeks to enforce it.
The cited text of the Memo states:
The parties agreed also to a change in the concept of jurisdiction in that the union stated the company must insert a minimum of 40,000 "Complete Sunday Papers." In the exchanges on this subject it is important to remember what the understandings of the parties were on this [sic] 40,000 completes.
(1) This is the total liability of the Company.
(2) The union stated it did not care to when [sic] these completes were distributed.
(3) The Company can distribute the rest of its circulation in any manner and to whomever it chooses so long as it is not over three pieces.
It is clearly understood that management need not concern itself that these completes be distributed to single copy distributors.
(4) The union stated what it was giving to management was "Bulk Delivery" as opposed to its current odd counts etc. delivery.
(5) The union stated management attorneys should write the language which would reflect this understanding.
Note: It is important that the language reflect this is a modification of the union's jurisdiction on inserting total product — and that its only obligation is to a number (40,000 completes) and further the rest of the distribution would be at the discretion of the company.
. . .
Memo at 3-4 (Cecere Aff. Ex. E); Award at 10.
III. DISCUSSION
The Company contends summary judgment in its favor is appropriate on two bases. First, it argues the Union's Motion was untimely under the Federal Arbitration Act's ("FAA") three-month statute of limitations. Additionally, the Company submits that the Award was a proper exercise of the Arbitrator's powers and must be affirmed, given the deferential standard of the Court's review. The Union counters that not only was its Motion timely, but the Company's argument to the contrary warrants sanctions for lack of basis in law, and further, that the Arbitrator's method contravened Eighth Circuit precedent and demands the Award be vacated.
A. Timeliness
The FAA provides that a motion to vacate an arbitration award "must be served upon the adverse party or his attorney within three months after the award is filed or delivered." 9 U.S.C. § 12. The Award in this matter was signed February 24, 2002, and the Union served the Company with the Complaint seeking to vacate the Award on May 28, 2002.
The Union asserts that Rule 6 of the Federal Rules of Civil Procedure supplies the relevant standard for computing this time period and that pursuant to this rule, the Union filed on the 90th day, making the Motion timely. The Company argues that because "three months" is not equivalent to 90 days, Rule 6 does not apply, and the Union would have had to effect service no later than May 23, 2002.
Courts applying or referencing § 12 of the FAA have expressed the limitations period both as "three months" and as "90 days."Compare International Union of Operating Eng'rs., Local No. 841 v. Murphy Co., 82 F.3d 185, 188 (7th Cir. 1996) (citing interchangeably "90-day limitation period" and "three-month limitation period" as time limit applicable to motions to vacate) with Harry Hoffman Printing, Inc. v. Graphic Comms., Int'l Union, Local 261, 912 F.2d 608, 610-11 (2d Cir. 1990) (distinguishing between three-month and 90-day statutes of limitations). The statute does not define "three months," but does discuss service of motions to vacate, stating "service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court." 9 U.S.C. § 12. Based on this language, the Union relies on the Federal Rules of Civil Procedure, particularly Rule 6, as the appropriate source of reference.
Although the statute refers only to the possessive form of the masculine singular pronoun, the Court will assume our wise Congress intended for this rule of service also to apply to the Union, a non-human, non-gender-specific entity, and perhaps even to women!.
The Union assumes three months to be synonymous with and calculable as 90 individual days. See Pl.'s Mem. in Opp. at 3-4. Though the Union cites no authority for this proposition, the computation method of Rule 6 has been applied to FAA § 12.See Holodnak v. Avco Corp., Avco-Lycoming Div., 381 F. Supp. 191, 198 (Conn. 1974). The Union's timeliness depends entirely upon application of this rule, as the Union's Complaint falls within 90 days of the award only when discounting the Saturday, Sunday and federal holiday immediately preceding the date of service. See Fed.R.Civ.Pro. 6(a) ("The last day of the period shall be included, unless it is a Saturday, Sunday, or a legal holiday. . . .").
The Company argues the time limitation begins to run from the date of the Award, while the Union contends the award was delivered upon mailing. The statute reads "within three months after the award is filed or delivered," without defining delivery. 9 U.S.C. § 12 (emphasis added). Because the parties indicate that no filing of the award occurred, the Court will accept the date of issuance, February 24, 2002, as the date of delivery, in accordance with decisions of other courts. See, e.g., Florasynth, Inc. v. Pickholz, 750 F.2d 171, 177 (2d Cir. 1984).
The Federal Rules of Civil Procedure are to govern FAA proceedings to the extent that procedural matters are not otherwise provided for. Fed.R.Civ.P. 81(a)(3); Piccolo v. Dain, Kalman Quail. Inc., 641 F.2d 598, 601 n. 5 (8th Cir. 1981). Additionally, the broad language of the introductory sentence of Rule 6(a) states that it shall be used for "computing any period of time prescribed by . . . any applicable statute." Fed.R.Civ.Pro. 6(a) (emphasis added).
Thus, although the limitation period and the direction as to method of service set forth in § 12 do not directly implicate Rule 6 or mention time computation, the Union's reliance on Rule 6 under the circumstances is reasonable and justifiable. In accordance with the "liberal spirit of the Federal Rules of Civil Procedure," application of Rule 6(a) is appropriate in light of the FAA's lack of specificity on method of time calculation. Boulet v. Millers Mut. Ins. Assoc., 36 F.R.D. 99, 101 (Minn. 1964).
Applying Rule 6 to the present case, the filing period would begin on February 25, 2002, the day following the date of delivery, and would expire on May 28, 2002, since May 25, three months from the commencement of the limitation period, fell on a Saturday and the subsequent Monday was Memorial Day. See Fed.R.Civ.P. 6 (instructing that the day of the "act, event or default" triggering the limitations period, weekends and specified holidays are not included); Holodnack, 381 F. Supp. at 198 ("[U]nder Federal Rules of Civil Procedure, Rule 6(a), when the last day of the limitations period falls on a Sunday . . . the period is extended until the end of the following day. While the [FAA] contains no such provision, the policy of liberality embodied in Fed.R.Civ.P. 6(a) should be applied by analogy."); see also Piccolo, 641 F.2d at 600 (considering October 4 to January 4 to comprise three-month period when analyzing timing of plaintiff's motion). Thus, the Court need not decide whether or not the Union is entitled to 90 days, as distinct from three months, to serve its Motion, as it was timely under both the arbitration and general rules of procedure.
However, the Company's position has a colorable basis in law and reflects a logical reading of a statute which lacks elaborative definitions and any significant amount of interpretive case law. The Company supports its argument on this unresolved issue with relevant decisions and fair assertions.
The Union's Motion for Sanctions pursuant to Rule 11 is denied.
B. The Award
As grounds for vacating the Award, the Union claims the Arbitrator exceeded his authority under the CBA. The Union argues the Arbitrator improperly addressed an issue not previously presented, failed to consider past practice and, in relying on the extra-contractual memo, effectively added a new provision to the parties' agreement. The Company responds that the Arbitrator did precisely what he was empowered to do, interpret and apply the CBA, and that even if the result reached is incorrect, such a ground is not justification for reversing an arbitration award.
Section 1O(a)(4) of the FAA provides that the district court may vacate an arbitration award where "the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definitive award upon the subject matter submitted was not made." 9 U.S.C. § 10(a)(4). The scope of review of an arbitrator's decision, however, is extremely limited and deferential. Gas Aggregation Servs. v. Howard Avista Energy, 319 F.3d 1060, 1064 (8th Cir. 2003). The reviewing court must affirm the arbitration award if it "draws its essence from the collective bargaining agreement" at issue. United Steelworkers of Am. v. Enterprise Wheel Car Corp., 363 U.S. 593, 597 (1960); Titan Wheel Corp. v. Local 2048. Int'l Ass'n of Machinists, 253 F.3d 1118, 1119 (8th Cir. 2001). The decision draws its essence from the agreement "[e]ven if the court is convinced the arbitrator committed serious error, so 'long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority.'" Gas Aggregation, 319 F.3d at 1064 (internal citations omitted).
Despite this circumscribed review, arbitration awards will be set aside if the arbitrator unilaterally modifies the contract or contradicts its express terms. Keebler Co. v. Milk Drivers Dairy Employees Union. Local No. 471, 80 F.3d 284, 288 (8th Cir. 1996). Thus, while the arbitrator "may look to sources other than the collective bargaining agreement . . . to aid in his interpretation of the contract," he may "not amend the contract." Id.
The Union's fundamental assertion is that the Arbitrator placed undue emphasis on a one-sided, extrinsic document while ignoring the many years of the parties' past practices. The Union concedes, however, that the weight of the evidence is a determination within the province of the Arbitrator and, implicitly, that it presented ample evidence of past practice at the arbitration hearing.
The Union's contention that the arbitrator did not have jurisdiction to consider the Addendum and the related arguments is without merit. First, the Union cites no contract language to support its assertion that the "arbitrator is authorized to resolve only those disputes which have been previously submitted to the Joint Standing Committee." Pl.'s Mem. in Supp. at 2 (emphasis in original). As the Arbitrator explained, "nothing in the parties' Agreement requires the assertion of a negotiated substantive right at the earliest opportunity to avoid forfeiture of the right." Award at 11. Second, it is undisputed that the Addendum was directly incorporated into and part of the CBA, such that its interpretation is within the scope of the Arbitrator's authority. The issue framed and stipulated to by the parties placed before the Arbitrator the determination of whether "the Company violate[d] its jurisdictional agreements with Local 4 by having inserting work performed at distribution centers by non-union personnel?," the precise question addressed and answered in the Award with reference to the relevant CBA provisions, including the Addendum. Award at 2, 11-12.
A review of the Award reveals that the Arbitrator thoroughly considered the history of the dispute over insertion work and the parties' attendant actions and interactions, the respective positions of the Union and the Company and the pertinent language of the CBA and the Addendum. See Award at 3-12. Even if the Court were to determine, as the Union adamantly asserts, that the Arbitrator disregarded testimony as to past practice and ultimately drew an incorrect conclusion, such would not provide justification for overturning the Award. See Midwest Coca-Cola Bottling Co. v. Allied Drivers. Local 792, 89 F.3d 514, 517, 518 (8th Cir. 1996) (expressing that a difference of opinion regarding interpretation is an insufficient ground for reversal of arbitrator's award) (citing Enterprise, 363 U.S. at 599). The role of judicial review is merely to assess whether or not the decision of the arbitrator reflects an arguable interpretation of the agreement. Gas Aggregation, 319 F.3d at 1064. If so, even a belief that the arbitrator "has committed serious error" does not permit a court to substitute its conclusion for that of the arbitrator. Midwest 89 F.3d at 517. The Award in this case establishes that, pursuant to his contractual authority, the Arbitrator rendered a decision based expressly on the terms of the relevant CBA provisions, viewed in light of a document he found to be "the only meaningful evidence of bargaining history." Award at 10. Accordingly, the Award draws its essence from the CBA between the Union and the Company.
The Arbitrator first considered CBA § 6, remarking that it "appears to reserve to the bargaining unit all mailing room work, which included the inserting of newspapers, without regard to the location of its performance." Id. at 9. He then referenced the modifications set forth in the Addendum, noting that contrary to the Union's contention that the agreement was meant to refer only to single-copy, as opposed to home delivery, sales, "no such limitation is expressed in the language," and that "the Addendum explicitly says that the Company '. . . shall have no restrictions . . .' on the method of bull distribution."Id. at 10. Faced with this seemingly broad terminology, he sought to ascertain the parties' intent in enacting the contract changes contained in the Addendum. Acknowledging that the Memo was an internal document expressing only the perspective of the Company's negotiators, the Arbitrator nonetheless found it to "accurately describe the parties' intent underlying the jurisdictional change," based on the significant concessions given by the Company in exchange for the modifications, and the parallel between the content of the Memo and that of the Addendum, as signed by both sides. Id. at 11.
"An arbitrator's paramount obligation is to apply the parties agreement in a way that gives effect to their intent." Boise Cascade Corp. v. Paper-Allied-Indus., Chem., and Energy Workers, Local 7-0159, 309 F.3d 1075, 1081 (8th Cir. 2002). To do so, resort to extrinsic evidence of past practice and bargaining history is not only acceptable, but encouraged. See id. at 1081-82. Although the Memo admittedly represents the views of only one side of the negotiations, the Arbitrator stated that "no contrary documentary evidence of bargaining history was introduced and none of the witnesses . . . were participants in that round of bargaining." Award at 10. After evaluating its credibility, the Arbitrator relied on it, not exclusively, as the Union argues, but to bolster his understanding of the plain language of the Addendum. See id. at 10-12. It cannot be said that his judgment in this regard so deviated from the terms of the CBA as to "dispense his own brand of industrial justice" or improperly amend the contract. Enterprise, 363 U.S. at 597.
In support of its contention that the Award must nonetheless be overturned, the Union places heavy reliance on Alvey, Inc. v. Teamsters Local Union No. 688, 132 F.3d 1209 (8th Cir. 1997), claiming the arbitrator's exclusive use of "an inconclusive outside source" in that case is squarely analogous to the present facts. In Alvey, the Eighth Circuit reversed an arbitration award based on the arbitrator's refusal to consider a company work rule because of his determination, "derived from a contextually inapposite" state court decision, that the rule was inapplicable. Id. at 1212-13. Rendering a "hyper-technical" interpretation of one sole word of the policy, the arbitrator summarily dismissed its applicability entirely.Id. at 1213. The court concluded that by ignoring the relevant policy, the arbitrator essentially wrote the work rule out of the parties' agreement such that his award did not draw its essence from the contract at issue. Id. at 1213.
Alvey is readily distinguishable from the present dispute. Here, rather than fail to consider a key component of the agreement, Arbitrator Wallin explicitly interpreted and premised his decision on the Addendum, using as a guide a memo that addressed the specific issue of the dispute, insertion jurisdiction. See Award at 10-11. While this piece of extrinsic evidence may have reflected only the Company's position, it is not devoid of any direct connection to the dispute, as was the rule of state law referenced in Alvey. See Alvey, 132 F.3d at 1213. As the Arbitrator acknowledged, the Memo is contextually linked, both temporally and substantively, to the Addendum, an express part of the CBA.See Award at 11; Memo (Cecere Aff. Ex. E). In construing the contract the arbitrator is entitled to rely on outside sources as interpretive aids to ascertain the parties' intent. See Alvey, 132 F.3d at 1213. The giving of some consideration to the Memo does not warrant vacating the award.
The Union additionally avers that despite a purported textual basis in the CBA, the Award is subject to vacation because the Arbitrator ignored past practice, contrary to the rule ofInternational Woodworkers of America v. Weyerhauser Co., 7 F.3d 133 (8th Cir. 1993). Again, however, this case is inapposite to the instant factual scenario. In Weyerhauser, the arbitrator based his decision entirely on a CBA provision neither discussed nor even suggested by the parties, "without seeking the parties' guidance as to its intent and without evidence of their relevant past practices." Id. at 136-37. The arbitrator relied strictly on the language of this one provision, finding the absence of a single word to be determinative. Id. at 134-35. After issuance of the award, he refused to reopen the proceedings to review the employer's asserted evidence that the omission of the decisive word was a clerical error and that the parties had consistently read the rule to have the opposite meaning to that prescribed by the arbitrator. Id. The Eighth Circuit held that under such circumstances, faced with a contractual ambiguity not addressed by the parties, the arbitrator's failure to evaluate bargaining history and past practices meant "he acted without considering the entire agreement." Id. at 137.
In marked contrast, the parties here advocated extensively regarding the proper interpretation of the Addendum and presented their respective positions on past practices as evidence of mutual intent. See Award at 8-9 (summarizing arguments of parties' "comprehensive post-hearing brief[s]"). By asserting that the "[A]rbitrator totally ignored all of the testimony regarding the history of Addendum No. 4 and the application of the Addendum by the parties," the Union concedes that the Arbitrator had before him evidence of the history of the working relationship between the Union and the Company. Pl.'s Mem. in Supp. at 33. The Arbitrator's ruling, therefore, was not the type of "purely textual analysis," made in the absence of any indicia of intent and past practice, which resulted in reversal in Weyerhauser. Weyerhauser, 7 F.3d at 136-37. Rather, in assessing the parties' arguments and finding that the Addendum represented an intent to cede significant control of inserting to the Company, Arbitrator Wallin exercised his contractually-conferred authority to interpret and weigh the evidence presented and render an accordant decision. The Award is affirmed.
IV. CONCLUSION
Based on the foregoing, and all the files, records and proceedings herein, IT IS HEREBY ORDERED that:
1. The Union's Motion for Summary Judgment [Docket No. 14] to vacate the arbitration award is DENIED,
2. The Union's Motion for Sanctions [Docket No. 23] is DENIED, and
3. The Company's Motion for Summary Judgment [Docket No. 11] to enforce the arbitration award is GRANTED.