Operating Engineers Local 3 v. Marathon Petroleum Company Lp

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 20, 2024
• Docket: 23-15854
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 20 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

OPERATING ENGINEERS LOCAL 3, No. 23-15854

Plaintiff-Appellee, D.C. No. 3:22-cv-09057-AGT

v. MEMORANDUM* MARATHON PETROLEUM COMPANY LP; TESORO REFINING & MARKETING COMPANY, LLC,

Defendants-Appellants.

OPERATING ENGINEERS LOCAL 3, No. 23-16067

Plaintiff-Appellant, D.C. No. 3:22-cv-09057-AGT

v.

MARATHON PETROLEUM COMPANY LP; TESORO REFINING & MARKETING COMPANY, LLC,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Alex G. Hse, Magistrate Judge, Presiding

Argued and Submitted June 6, 2024

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. San Francisco, California

Before: S.R. THOMAS and MILLER, Circuit Judges, and BENNETT,** District Judge.

Marathon Petroleum Company appeals the district court’s grant of summary

judgment compelling Marathon to arbitrate a grievance brought by the

International Union of Operating Engineers Local 3 under a project labor

agreement (the Agreement). Local 3 cross-appeals the district court’s denial of

attorney’s fees. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

We review de novo a district court’s grant of summary judgment and a

dispute’s arbitrability under a collective bargaining agreement. Westinghouse

Hanford Co. v. Hanford Atomic Metal Trades Council, 940 F.2d 513, 516 (9th Cir.

1991). We review evidentiary rulings made in the context of summary judgment

motions for abuse of discretion. Bias v. Moynihan, 508 F.3d 1212, 1224 (9th Cir.

2007). We likewise review a district court’s decision to grant or deny attorney’s

fees for abuse of discretion. Thomas v. City of Tacoma, 410 F.3d 644, 647 (9th Cir.

2005).

1. When a bargaining agreement contains a broad arbitration clause, “there is

a presumption of arbitrability.” AT&T Techs., Inc. v. Communications Workers of

** The Honorable Richard D. Bennett, United States District Judge for the District of Maryland, sitting by designation.

2 Am., 475 U.S. 643, 650 (1986). The court has “a limited role . . . . ‘confined to

ascertaining whether the party seeking arbitration is making a claim which on its

face is governed by the contract.’” Westinghouse, 940 F.2d at 520 (quoting United

Steelworkers of Am. v. American Mfg. Co., 363 U.S. 564, 568 (1960)). The

Agreement includes an arbitration clause that applies to “any question arising out

of . . . this Agreement involving its interpretation and application.” Local 3’s

grievance—which alleges that Marathon subcontracted soils and material

inspection and testing to non-union contractors in violation of the Agreement—

presents just such a question. Therefore, the grievance is arbitrable unless the

Agreement contains an “express provision excluding [the] particular grievance

from arbitration.” United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363

U.S. 574, 585 (1960). It does not.

Marathon argues that the Agreement’s arbitration clause does not apply to

non-Covered Work as defined in Section 2, including soils and material inspection

and testing. But Section 2’s provisions govern the Agreement’s scope; they do not

contain any “clear, unambiguous exclusion[s] from arbitration.” AT&T, 475 U.S.

at 647 (emphasis added) (quoting Communications Workers of Am. v. Western

Elec. Co., 751 F.2d 203, 206–07 (7th Cir. 1984)). In the absence of any express

exclusion, Marathon’s argument is “for the arbiter, not for the courts.” Warrior &

Gulf, 363 U.S. at 585.

3 Nor does Marathon’s status as the “Owner” under the Agreement exempt

Local 3’s grievance from arbitration. The Agreement does not contain “an express

exclusion to arbitration” for claims against the Owner. Westinghouse, 940 F.2d at

523. To the contrary, Section 8 plainly contemplates grievances against the Owner:

“[T]he Owner will not be responsible for any costs or expenses unless the

grievance is against the Owner.” (emphasis added).

Next, Marathon asserts that “it cannot be ordered to arbitrate an issue if the

[arbitration] award conflicts with a statutory requirement,” in this case, California

Senate Bill 54. Cal. Health & Safety Code § 25536.7. But conflicts are “necessarily

speculative when the arbitrator has yet to rule,” so “[t]he mere possibility of

conflict . . . is no barrier to arbitration.” Hospital and Inst. Workers Union Local

250, SEIU, AFL-CIO v. Marshal Hale Mem’l. Hosp., 647 F.2d 38, 42 (9th Cir.

1981); see id. (holding that conflicts should be “resolved . . . in an action to enforce

the award”). Marathon cites United Teachers of Los Angeles v. Los Angeles

Unified School District for the proposition that a grievance “subject only to the

constraints of [a] statute” is not arbitrable. 278 P.3d 1204, 1215 (Cal. 2012). But

United Teachers concerns the arbitrability of grievances that “arise[] from a

matter . . . on which collective bargaining is statutorily preempted.” Id. Senate Bill

54 does not preempt collective bargaining on any issue, let alone soils and material

inspection and testing. Cal. Health & Safety Code § 25536.7.

4 2. Marathon sought to admit notes from its negotiator bearing on the

arbitrability of grievances against the Owner. The district court did not abuse its

discretion when it excluded that evidence. While “[e]vidence that the parties

intended to exclude a particular type of claim from arbitration may be relevant and

admissible,” Haig Berberian, Inc. v. Cannery Warehousemen, 535 F.2d 496, 499

(9th Cir. 1976), “[w]here the words of a contract in writing are clear and

unambiguous, its meaning is to be ascertained in accordance with its plainly

expressed intent,” M&G Polymers USA, LLC v. Tackett, 574 U.S. 427, 435 (2015)

(quoting 11 Richard A. Lord, Williston on Contracts § 30:6 (4th ed. 2012)). The

Agreement expressly contemplates grievances against the Owner, and the

grievance process culminates in arbitration. The district court’s reliance on the

express language of the Agreement was not an abuse of discretion. See

International Longshore and Warehouse Union v. NLRB, 978 F.3d 625, 641 (9th

Cir. 2020) (stating that when a bargaining agreement is unambiguous, “the parties’

negotiations . . . bear no relevance to its meaning”).

3. Finally, Local 3 challenges the district court’s denial of attorney’s fees on

the ground that the court “applied an incorrect legal standard” because it

considered whether Marathon’s position was “frivolous” rather than merely

“without justification.” Even assuming that Local 3 is correct as to the standard, it

cannot show a legal error because the district court found that it was not entitled to

5 fees under either standard. Although we agree with Local 3 that Marathon’s

arguments are not meritorious, the question before us is not whether we consider

Marathon’s position to be so lacking in merit as to warrant an award of fees.

Rather, we assess whether the district court abused its broad discretion in declining

to award fees. See Thomas, 410 F.3d at 647. Local 3 has not shown that it did.

AFFIRMED.