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finding a subsidiary is not considered inadequately capitalized where it was "once adequately capitalized but subsequently fell upon bad financial times"
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This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted Sept. 13, 1999.
Appeal from the United States District Court for the Northern District of California, Charles A. Legge, District Judge, Presiding.
Before CANBY, SILVERMAN, Circuit Judges, and FITZGERALD, Senior District Judge.
The Honorable James M. Fitzgerald, Senior District Judge for the District of Alaska, sitting by designation.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir. R. 36-3.
Gurdial Pegany (Pegany) alleged before the district court that the Californian And Hawaiian Sugar Company, Inc. (C & H) violated the terms of a collective bargaining agreement by laying off Pegany in December 1995. Pegany also alleged that the Sugar Workers Union (SWU) breached its duty of fair representation by failing to file a grievance or otherwise protest Pegany's layoff. Pegany appeals the district court's summary judgment in favor of C & H and SWU.
A grant of summary judgment is reviewed de novo. See Margolis v. Ryan, 140 F.3d 850, 852 (9 th Cir.1998). The appellate court's review is governed by the same standard used by the trial court under Federal Rule of Civil Procedure 56(c). See Ghotra v. Bandila Shipping, Inc., 113 F.3d 1050, 1054 (9 th Cir.1997), cert. denied, 118 S.Ct. 1034 (1998). The appellate court must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. See Margolis, 140 F.3d at 852. The appellate court must not weigh the evidence or determine the truth of the matter, but only determine whether there is a genuine issue for trial. See Covey v. Hollydale Mobilehome Estates, 116 F.3d 830, 834 (9 th Cir.); amended by, 125 F.3d 1281 (9 th Cir.1997). "Moreover, 'if the non-moving party will bear the burden of proof at trial as to an element essential to its case, and that party fails to make a showing sufficient to establish a genuine dispute of fact with respect to the existence of that element, then summary judgment is appropriate." ' Stevens v. Moore Business Forms, Inc., 18 F.3d 1443, 1446 (9 th Cir.1994) (citation omitted).
The action against C & H can succeed only if Pegany " 'can prove that the union breached its duty of fair representation in its handling of the employee's grievance." ' Stevens, 18 F.3d at 1447 (quoting Vaca v. Sipes, 386 U.S. 171, 186 (1967). See also Banks v. Bethlehem Steel Corp, 870 F.2d 1438, 1441 (9 th Cir.1989) ("An employee subject to a collective bargaining agreement who makes his or her union the exclusive bargaining agent must prove that the union breached its duty of fair representation before a claim against the employer can be established.") (citation omitted). Accordingly, the main issue presented for review is whether SWU breached its duty of fair representation to Pegany when it refused to file and process a grievance contesting his layoff.
A union breaches its duty of fair representation only when its conduct is " 'arbitrary, discriminatory, or in bad faith." ' United Steelworkers v. Rawson, 495 U.S. 362, 372 (1990) (citation omitted). "[A] union's actions are arbitrary only if, in light of the factual and legal landscape at the time of the union's actions, the union's behavior is so far outside a 'wide range of reasonableness,' as to be irrational." Air Line Pilots Ass'n., Int'l v. O'Neill, 499 U.S. 65, 67 (1991) (citation omitted). Furthermore, unions retain "wide discretion to act in what they perceive to be their members' best interests." Peterson v. Kennedy, 771 F.2d 1244, 1253 (9 th Cir.1985) (citation omitted), and "mere negligence on the part of a union does not rise to the level of a breach of the duty of fair representation." Peters v. Burlington N. R.R. Co., 914 F.2d 1294, 1299 (9 th Cir.1990)amended and superseded on other grounds, 931 F.2d 534 (9 th Cir.1991). " 'To comply with its duty of [fair representation], a union must conduct some minimal investigation of grievances brought to its attention." ' Peters, 914 F.2d at 1300 (citation omitted). Thus, " '[a] union does not breach its duty of fair representation to others as long as it proceeds on some reasoned basis." ' Id. at 1299 (citation omitted).
Initially, we must consider whether SWU's decision not to pursue Pegany's grievance was "an act involving the union's judgment or whether it was a 'procedural or ministerial' act." Stevens, 18 F.3d at 1447 (quoting Moore v. Bechtel Power Corp., 840 F.2d 634, 636 (9 th Cir.1988). "[I]f the conduct was procedural or ministerial, then the plaintiff may prevail if the union's conduct was arbitrary, discriminatory, or in bad faith. However, if the conduct involved the union's judgment, then the plaintiff may prevail only if the conduct was discriminatory or in bad faith." Wellman v. Writers Guild of America, West, Inc., 146 F.3d 666, 670 (9 th Cir.1998) (citations omitted). Generally, a union's decision not to pursue a grievance is considered an exercise of its judgment. Id. at 671.
The case before us is not a question of SWU's failure to perform an "administrative or ministerial task, such as the timely filing of a meritorious grievance. Rather, this is a question of judgment, a 'rational attempt[ ] on the part of a union to properly interpret a collective bargaining agreement or otherwise handle a grievance." ' Stevens, 18 F.3d at 1448 (quoting Peters, 931 F.2d at 540). Because SWU's decision not to pursue Pegany's grievance was an exercise of judgment, Pegany must show that SWU's conduct was discriminatory or in bad faith.
The evidence before the district court established that SWU made a thorough investigation of Pegany's layoff before deciding not to pursue a grievance on his behalf. SWU's requested an extension of the ten-day deadline for filing grievances; obtained seniority lists for C & H establishing the identity of laid off employees and the positions they held, obtained lists from C & H of retained employees, prepared its own lists of employees laid of based upon seniority, gathered data regarding the positions held by each employee, solicited information from laid of employees, and SWU's Executive Board met to assess the layoff of each employee. Additionally, SWU Secretary/Business Agent Rios contacted C & H numerous times specifically about Pegany. Rios learned that because Pegany failed the math test, he did not complete the training necessary to be qualified as a Process Technician, Level 1. Those retained, however, had either passed the test or were grandfathered because they held their positions before the testing requirement was adopted. SWU then attempted to persuade C & H to allow Pegany to retake the math test. C & H, however, did not permit Pegany to retake the test.
The evidence presented to the district court establishes that SWU's actions were not discriminatory or in bad faith. SWU evaluated Pegany's claim, determined it to be without merit, and provided a rational basis for failing to pursue a grievance. Moreover, Pegany did not offer evidence which established that SWU handled his grievance in a perfunctory fashion or treated his rights with "egregious disregard." Wellman, 146 F.3d at 671. SWU provided an explanation for its decision not to pursue a grievance on behalf of Pegany, and even if the decision was wrong, "an error in judgment does not constitute bad faith." Stevens, 18 F.3d at 1448 (citation omitted).
SWU's decision not to pursue Pegany's grievance did not constitute a breach of the duty of fair representation. Because Pegany did not establish that SWU breached the duty of fair representation, he cannot succeed in his action against C & H. See Stevens, 18 F.3d at 1447. Accordingly, we conclude that the district court did not err in granting summary judgment in favor of SWU and C & H.
AFFIRMED.