FILED NOT FOR PUBLICATION MAR 25 2019 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARVIN KROPKE; JOHN A. ) No. 17-56479 BROWN; DOUG CHAPPELL; ) RICHARD REED; ROGER ROPER; ) D.C. No. 2:16-cv-08753-MWF-FFM JAMES WILSON; PEGGY ) BROWN; ERIC CARTIER; TOM ) MEMORANDUM* ISPAS; FRED NEUBAUER; ) BARRY MEYER, in their capacity ) as Trustees of the Southern ) California IBEW-NECA Pension ) Trust Fund, ) ) Plaintiffs-Appellants, ) ) v. ) ) ANDY DUNBAR; GERALD ) MINEY; MICHAEL RICHARD; ) DAVE KURTZ; THOMAS ) MITTELBRUN; BEN ) ROSENBERG, in their capacity as ) Trustees of the Electrical Workers ) Pension Trust Fund of Local Union ) No. 58, IBEW Detroit, Michigan; ) RICHARD A. MARKEE; TED ) ANTON; PAUL KELLEY; RUSS ) SMITH; SEAN EGAN; JOHN ) BOND, Jr.; THOMAS EASTWOOD; ) DAVID FASHBAUGH, in their )
* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. capacity as Trustees of the Michigan ) Electrical Employees Pension Fund, ) ) Defendants-Appellees. ) ) MARVIN KROPKE; JOHN A. ) No. 17-56793 BROWN; DOUG CHAPPELL; ) RICHARD REED; ROGER ROPER; ) D.C. No. 2:16-cv-08753-MWF-FFM JAMES WILSON; PEGGY ) BROWN; ERIC CARTIER; TOM ) ISPAS; FRED NEUBAUER; ) BARRY MEYER, in their capacity ) as Trustees of the Southern ) California IBEW-NECA Pension ) Trust Fund, ) ) Plaintiffs-Appellees, ) ) v. ) ) ANDY DUNBAR; GERALD ) MINEY; MICHAEL RICHARD; ) DAVE KURTZ; THOMAS ) MITTELBRUN; BEN ) ROSENBERG, in their capacity as ) Trustees of the Electrical Workers ) Pension Trust Fund of Local Union ) No. 58, IBEW Detroit, Michigan; ) RICHARD A. MARKEE; TED ) ANTON; PAUL KELLEY; RUSS ) SMITH; SEAN EGAN; JOHN ) BOND, Jr.; THOMAS EASTWOOD; ) DAVID FASHBAUGH, in their ) capacity as Trustees of the Michigan ) Electrical Employees Pension Fund, ) ) Defendants-Appellants. )
2 )
Appeal from the United States District Court for the Central District of California Michael W. Fitzgerald, District Judge, Presiding
Submitted March 4, 2019** Pasadena, California
Before: FERNANDEZ and OWENS, Circuit Judges, and DONATO,*** District Judge.
The Trustees of the Southern California IBEW-NECA Pension Trust Fund
(the “SoCal Fund”) appeal1 from the order of the district court denying their
motion to vacate an arbitration award in favor of the Trustees of the Electrical
Workers’ Pension Trust Fund of Local Union No. 58, IBEW Detroit, Michigan,
and the Michigan Electrical Employees’ Pension Fund (both hereafter referred to
as the “Michigan Funds”). For their part, the Michigan Funds appeal2 from the
district court’s order denying their motion for attorney’s fees against the SoCal
Fund. We affirm.
** The panel unanimously finds this case suitable for decision without oral argument. Fed. R. App. P. 34(a)(2). *** The Honorable James Donato, United States District Judge for the Northern District of California, sitting by designation. 1 No. 17-56479. 2 No. 17-56793.
3 The SoCal Fund, the Michigan Funds, and numerous other pension trust
funds entered into the Electrical Industry Pension Reciprocal Agreement (“the
Reciprocal Agreement”), which in effect provided that when an employee
(interchangeably referred to as a “traveler”) temporarily works in an area covered
by a participating IBEW local union pension fund, “an amount of money equal to
all” pension contributions3 earned by the traveler would be transferred from the
participating local union pension fund to the traveler’s home fund. The Reciprocal
Agreement contains an arbitration provision covering all disputes and
disagreements “arising out of this Agreement.” A dispute arose when the SoCal
Fund refused to send a portion of the contributions earned by travelers to their
home funds—the Michigan Funds. After an arbitrator ruled against the SoCal
Fund and the district court confirmed the award, these appeals ensued.
A. SoCal Fund Appeal
(1) The district court did not err when it applied ordinary California state
law principles in analyzing the validity of the arbitration agreement. See First
Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S. Ct. 1920, 1924, 131 L.
Ed. 2d 985 (1995); see also Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford
3 Contributions are defined as payments “which an employer is duly required to make by the terms of a collective bargaining agreement, or is otherwise legally bound, to make to” the pension fund where the employee is working.
4 Junior Univ., 489 U.S. 468, 475–76, 109 S. Ct. 1248, 1254, 103 L. Ed. 2d 488
(1989). The Employee Retirement Income Security Act of 19744 does not preempt
California law because the state’s general principles of contract formation applied
in this case are not directed at ERISA plans, and ERISA plans are not essential to
the operation of that law.5 Nor does the Labor Management Relations Act6
preempt California law because breach of a collective bargaining agreement is not
claimed here.7
(2) The SoCal fund asserts that there was no arbitration agreement at all
because the Reciprocal Agreement provides that if there is a dispute it “may” be
submitted for arbitration if a party so requests in writing. That is not an indication
of a lack of agreement; rather it provides that any party to a dispute has the
unilateral right to demand arbitration. See Erickson v. Aetna Health Plans of Cal.,
Inc., 84 Cal. Rptr. 2d 76, 83 (Ct. App. 1999). The SoCal Fund also points out that
4 Pub. L. No. 93–406, 88 Stat. 829 (codified as amended in scattered sections of 26 & 29 U.S.C.) (hereafter, “ERISA”). 5 See Gobeille v. Liberty Mut. Ins. Co., __ U.S. ___, ___, 136 S. Ct. 936, 943, 194 L. Ed. 2d 20 (2016). 6 Ch. 120, 61 Stat. 136 (1947) (codified as amended in scattered sections of 29 U.S.C.). 7 Cf. Roy Allen Slurry Seal v. Laborers Int’l Union of N. Am. Highway & St. Stripers/Rd. & St. Slurry Local Union 1184, AFL-CIO, 241 F.3d 1142, 1146 (9th Cir. 2001).
5 no particular set of arbitration rules were set forth in the agreement. However, the
parties agreed that rules would “be promulgated by the Reciprocal Administrator,”
who was provided for in the Reciprocal Agreement. That sufficed. Nor was it
unconscionable to confer that sort of authority upon the Reciprocal Administrator;
nothing in the record suggests that the terms of the arbitration for this dispute were
overly harsh, oppressive, or one-sided. See Poublon v. C.H. Robinson Co., 846
F.3d 1251, 1260–61 (9th Cir. 2017); Tompkins v. 23andMe, Inc., 840 F.3d 1016,
1023–24 (9th Cir. 2016); Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1170–73
(9th Cir. 2003). Insofar as the SoCal Fund complains that the Reciprocal
Administrator participated in the arbitration as an “interested party,” which the
rules provided for, we note that at the outset of the arbitration hearing the SoCal
Fund agreed that he could do so.
(3) The SoCal Fund then asserts that the district court erred when it
confirmed the arbitrator’s award rather than vacating it. But review of the
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FILED NOT FOR PUBLICATION MAR 25 2019 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARVIN KROPKE; JOHN A. ) No. 17-56479 BROWN; DOUG CHAPPELL; ) RICHARD REED; ROGER ROPER; ) D.C. No. 2:16-cv-08753-MWF-FFM JAMES WILSON; PEGGY ) BROWN; ERIC CARTIER; TOM ) MEMORANDUM* ISPAS; FRED NEUBAUER; ) BARRY MEYER, in their capacity ) as Trustees of the Southern ) California IBEW-NECA Pension ) Trust Fund, ) ) Plaintiffs-Appellants, ) ) v. ) ) ANDY DUNBAR; GERALD ) MINEY; MICHAEL RICHARD; ) DAVE KURTZ; THOMAS ) MITTELBRUN; BEN ) ROSENBERG, in their capacity as ) Trustees of the Electrical Workers ) Pension Trust Fund of Local Union ) No. 58, IBEW Detroit, Michigan; ) RICHARD A. MARKEE; TED ) ANTON; PAUL KELLEY; RUSS ) SMITH; SEAN EGAN; JOHN ) BOND, Jr.; THOMAS EASTWOOD; ) DAVID FASHBAUGH, in their )
* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. capacity as Trustees of the Michigan ) Electrical Employees Pension Fund, ) ) Defendants-Appellees. ) ) MARVIN KROPKE; JOHN A. ) No. 17-56793 BROWN; DOUG CHAPPELL; ) RICHARD REED; ROGER ROPER; ) D.C. No. 2:16-cv-08753-MWF-FFM JAMES WILSON; PEGGY ) BROWN; ERIC CARTIER; TOM ) ISPAS; FRED NEUBAUER; ) BARRY MEYER, in their capacity ) as Trustees of the Southern ) California IBEW-NECA Pension ) Trust Fund, ) ) Plaintiffs-Appellees, ) ) v. ) ) ANDY DUNBAR; GERALD ) MINEY; MICHAEL RICHARD; ) DAVE KURTZ; THOMAS ) MITTELBRUN; BEN ) ROSENBERG, in their capacity as ) Trustees of the Electrical Workers ) Pension Trust Fund of Local Union ) No. 58, IBEW Detroit, Michigan; ) RICHARD A. MARKEE; TED ) ANTON; PAUL KELLEY; RUSS ) SMITH; SEAN EGAN; JOHN ) BOND, Jr.; THOMAS EASTWOOD; ) DAVID FASHBAUGH, in their ) capacity as Trustees of the Michigan ) Electrical Employees Pension Fund, ) ) Defendants-Appellants. )
2 )
Appeal from the United States District Court for the Central District of California Michael W. Fitzgerald, District Judge, Presiding
Submitted March 4, 2019** Pasadena, California
Before: FERNANDEZ and OWENS, Circuit Judges, and DONATO,*** District Judge.
The Trustees of the Southern California IBEW-NECA Pension Trust Fund
(the “SoCal Fund”) appeal1 from the order of the district court denying their
motion to vacate an arbitration award in favor of the Trustees of the Electrical
Workers’ Pension Trust Fund of Local Union No. 58, IBEW Detroit, Michigan,
and the Michigan Electrical Employees’ Pension Fund (both hereafter referred to
as the “Michigan Funds”). For their part, the Michigan Funds appeal2 from the
district court’s order denying their motion for attorney’s fees against the SoCal
Fund. We affirm.
** The panel unanimously finds this case suitable for decision without oral argument. Fed. R. App. P. 34(a)(2). *** The Honorable James Donato, United States District Judge for the Northern District of California, sitting by designation. 1 No. 17-56479. 2 No. 17-56793.
3 The SoCal Fund, the Michigan Funds, and numerous other pension trust
funds entered into the Electrical Industry Pension Reciprocal Agreement (“the
Reciprocal Agreement”), which in effect provided that when an employee
(interchangeably referred to as a “traveler”) temporarily works in an area covered
by a participating IBEW local union pension fund, “an amount of money equal to
all” pension contributions3 earned by the traveler would be transferred from the
participating local union pension fund to the traveler’s home fund. The Reciprocal
Agreement contains an arbitration provision covering all disputes and
disagreements “arising out of this Agreement.” A dispute arose when the SoCal
Fund refused to send a portion of the contributions earned by travelers to their
home funds—the Michigan Funds. After an arbitrator ruled against the SoCal
Fund and the district court confirmed the award, these appeals ensued.
A. SoCal Fund Appeal
(1) The district court did not err when it applied ordinary California state
law principles in analyzing the validity of the arbitration agreement. See First
Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S. Ct. 1920, 1924, 131 L.
Ed. 2d 985 (1995); see also Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford
3 Contributions are defined as payments “which an employer is duly required to make by the terms of a collective bargaining agreement, or is otherwise legally bound, to make to” the pension fund where the employee is working.
4 Junior Univ., 489 U.S. 468, 475–76, 109 S. Ct. 1248, 1254, 103 L. Ed. 2d 488
(1989). The Employee Retirement Income Security Act of 19744 does not preempt
California law because the state’s general principles of contract formation applied
in this case are not directed at ERISA plans, and ERISA plans are not essential to
the operation of that law.5 Nor does the Labor Management Relations Act6
preempt California law because breach of a collective bargaining agreement is not
claimed here.7
(2) The SoCal fund asserts that there was no arbitration agreement at all
because the Reciprocal Agreement provides that if there is a dispute it “may” be
submitted for arbitration if a party so requests in writing. That is not an indication
of a lack of agreement; rather it provides that any party to a dispute has the
unilateral right to demand arbitration. See Erickson v. Aetna Health Plans of Cal.,
Inc., 84 Cal. Rptr. 2d 76, 83 (Ct. App. 1999). The SoCal Fund also points out that
4 Pub. L. No. 93–406, 88 Stat. 829 (codified as amended in scattered sections of 26 & 29 U.S.C.) (hereafter, “ERISA”). 5 See Gobeille v. Liberty Mut. Ins. Co., __ U.S. ___, ___, 136 S. Ct. 936, 943, 194 L. Ed. 2d 20 (2016). 6 Ch. 120, 61 Stat. 136 (1947) (codified as amended in scattered sections of 29 U.S.C.). 7 Cf. Roy Allen Slurry Seal v. Laborers Int’l Union of N. Am. Highway & St. Stripers/Rd. & St. Slurry Local Union 1184, AFL-CIO, 241 F.3d 1142, 1146 (9th Cir. 2001).
5 no particular set of arbitration rules were set forth in the agreement. However, the
parties agreed that rules would “be promulgated by the Reciprocal Administrator,”
who was provided for in the Reciprocal Agreement. That sufficed. Nor was it
unconscionable to confer that sort of authority upon the Reciprocal Administrator;
nothing in the record suggests that the terms of the arbitration for this dispute were
overly harsh, oppressive, or one-sided. See Poublon v. C.H. Robinson Co., 846
F.3d 1251, 1260–61 (9th Cir. 2017); Tompkins v. 23andMe, Inc., 840 F.3d 1016,
1023–24 (9th Cir. 2016); Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1170–73
(9th Cir. 2003). Insofar as the SoCal Fund complains that the Reciprocal
Administrator participated in the arbitration as an “interested party,” which the
rules provided for, we note that at the outset of the arbitration hearing the SoCal
Fund agreed that he could do so.
(3) The SoCal Fund then asserts that the district court erred when it
confirmed the arbitrator’s award rather than vacating it. But review of the
arbitration award is “‘both limited and highly deferential.’” Comedy Club, Inc. v.
Improv W. Assocs., 553 F.3d 1277, 1288 (9th Cir. 2009); see also 9 U.S.C. § 9;
Hall St. Assocs. v. Mattel, Inc., 552 U.S. 576, 581–84, 128 S. Ct. 1396, 1402–03,
170 L. Ed. 2d 254 (2008). In support of its position, the SoCal Fund claims that
the arbitrator manifestly disregarded the law and demonstrated evident partiality.
6 We disagree.
(a) Manifest Disregard
To support its manifest disregard claim, the SoCal Fund had to show more
than “a failure on the part of the arbitrator[] to understand or apply the law. It must
be clear from the record that the arbitrator[] recognized the applicable law and then
ignored it.” Collins v. D.R. Horton, Inc., 505 F.3d 874, 879 (9th Cir. 2007).
“Moreover, to rise to the level of manifest disregard ‘[t]he governing law alleged to
have been ignored by the arbitrator[] must be well defined, explicit, and clearly
applicable.’” Id. at 879–80. The SoCal Fund’s thoughts about the effect of the
Pension Protection Act of 20068 on the Reciprocal Agreement are of no avail. On
its face, the arbitrator’s decision was reasonable, and neither the record, nor the
language of the PPA, nor any binding case law or other authority points to manifest
disregard of the law by the arbitrator. This claim fails.
(b) Evident Partiality9
We have carefully reviewed the record and are satisfied that nothing therein
shows actual bias or a failure to disclose information that would point to bias. See
8 Pub. L. No. 109–280, 120 Stat. 780 (codified as amended in scattered sections of 26 & 29 U.S.C.) (hereafter, “PPA”). 9 9 U.S.C. § 10(a)(2).
7 Lagstein v. Certain Underwriters at Lloyd’s, London, 607 F.3d 634,
645–46 (9th Cir. 2010); see also Woods v. Saturn Distribution Corp., 78 F.3d 424,
428–29 (9th Cir. 1996); Emp’rs Ins. of Wausau v. Nat’l Union Fire Ins. Co. of
Pittsburgh, 933 F.2d 1481, 1490 (9th Cir. 1991). This claim also fails.
B. Michigan Funds Appeal
The Michigan Funds assert that the district court erred when it denied their
motion for an award of attorney’s fees against the SoCal Fund. See 29 U.S.C. §
1132(g)(1). They argue that the district court failed to apply the correct
standard—that is, the ERISA standard. See Hummell v. S. E. Rykoff & Co., 634
F.2d 446, 453 (9th Cir. 1980); see also Hardt v. Reliance Standard Life Ins. Co.,
560 U.S. 242, 249 n.1, 130 S. Ct. 2149, 2154 n.1, 176 L. Ed. 2d 998 (2010);
Graphic Commc’ns Union, Dist. Council No. 2, AFL-CIO v. GCIU-Emp’r Ret.
Ben. Plan, 917 F.2d 1184, 1189 (9th Cir. 1990). The district court’s order belies
the assertion that it merely applied a bad faith standard. While the district court did
consider bad faith, that is a proper factor. Hummell, 634 F.3d at 453. Moreover,
the district court carefully considered the other factors. See Graphic Commc’ns,
917 F.2d at 1190. We cannot say that the district court abused its discretion.
AFFIRMED. Costs are to be taxed against the SoCal Fund in No. 17-56479.
Costs are to be taxed against the Michigan Funds in No. 17-56793.