Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-3_09-cv-00678/USCOURTS-alnd-3_09-cv-00678-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

NORTHWESTERN DIVISION

UNITED STEEL, PAPER AND )

FORESTRY, RUBBER, )

MANUFACTURING, ENERGY, )

ALLIED INDUSTRIAL AND )

SERVICE WORKERS )

INTERNATIONAL UNION AFL- )

CIO-CLC, INTERNATIONAL )

UNION OF OPERATING )

ENGINEERS, LOCAL 320 AND )

THE UNITED BROTHERHOOD OF )

CARPENTERS AND JOINERS, )

LOCAL 1209, )

)

Plaintiffs, )

)

vs. ) Civil Action No. 3:09-CV-678-CLS

)

WISE ALLOYS, LLC, )

)

Defendant. )

MEMORANDUM OPINION AND FINAL JUDGMENT

Plaintiffs — i.e., the United Steel, Paper and Forestry, Rubber, Manufacturing,

Energy, Allied Industrial and Service Workers International Union AFL-CIO-CLC;

the International Union of Operating Engineers, Local 320; and the United

Brotherhood of Carpenters and Joiners, Local 1209 (collectively, “the Unions” or

“plaintiffs”) — filed suit against Wise Alloys, LLC (“Wise Alloys” or “defendant”),

asserting a breach of contract in violation of § 301 of the Labor Management

FILED

 2010 Apr-13 AM 11:43

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 1 of 10
Relations Act (“LMRA”), 29 U.S.C. § 185. The case currently is before the court on 1

plaintiffs’ motion for summary judgment. Upon consideration of the motion, the

2

pleadings,the parties’ briefs, and the evidentiary submissions, the court concludes the

motion is due to be granted, and judgment is due to be entered in plaintiffs’ favor.

I. STANDARD OF REVIEW

Federal Rule of Civil Procedure 56 provides that summary judgment “should

be rendered if the pleadings, the discovery and disclosure materials on file, and any

affidavits show that there is no genuine issue as to any material fact and that the

movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). In other

words, summary judgment is proper “after adequate time for discovery and upon

motion, against a party who fails to make a showing sufficient to establish the

existence of an element essential to that party’s case, and on which that party will

bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 

“In making this determination, the court must review all evidence and make all

reasonable inferences in favor of the party opposing summary judgment.” Chapman

See doc. no. 1 (Complaint). 29 U.S.C. § 185(a) provides: 1

Suitsfor violation of contracts between an employer and a labor organization

representing employees in an industry affecting commerce as defined in this chapter,

or between any such labor organizations, may be brought in any district court of the

United Sates having jurisdiction of the parties, without respect to the amount in

controversy or without regard to the citizenship of the parties.

Doc. no. 31. 2

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Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 2 of 10
v. AI Transport, 229 F.3d 1012, 1023 (11th Cir. 2000) (en banc) (quoting Haves v.

City of Miami, 52 F.3d 918, 921 (11th Cir. 1995)). Inferences in favor of the nonmoving party are not unqualified, however. “[A]n inference is not reasonable if it is

only a guess or a possibility, for such an inference is not based on the evidence, but

is pure conjecture and speculation.” Daniels v. Twin Oaks Nursing Home, 692 F.2d

1321, 1324 (11th Cir. 1983). Moreover,

[t]he mere existence of some factual dispute will not defeat summary

judgment unless that factual dispute is material to an issue affecting the

outcome of the case. The relevant rules of substantive law dictate the

materiality of a disputed fact. A genuine issue of material fact does not

exist unless there is sufficient evidence favoring the nonmoving party

for a reasonable jury to return a verdict in its favor.

Chapman, 229 F.3d at 1023 (quoting Haves, 52 F.3d at 921) (emphasis supplied). 

See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986) (asking

“whether the evidence presents a sufficient disagreement to require submission to a

jury or whether it is so one-sided that one party must prevail as a matter of law”).

II. DISCUSSION

Plaintiffs and defendant are parties to a series of collective bargaining

agreements (“CBAs”), each of which contains the following language addressing

quarterly cost of living adjustments (“COLAs”) for employees of Wise Alloys:

Section 2 Cost of Living Adjustment: Effective on each

adjustment date, a cost-of-living-adjustment will be made to the current

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Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 3 of 10
cost of living allowance. The cost of living allowance will be equal to

1¢ per hour for each full 0.3 of a point change in the Consumer Price

Index calculation.

Section 3 Effective on each adjustment date, the cost-of-living

allowance as determined above shall be applied exclusively to offset

health insurance costs for hourly-rated employees. The cost-of-living

adjustments under this paragraph shall not be applied to employees’

hourly wage rates.

3

Plaintiffs and defendant disagreed about how these contractual provisions should be

interpreted. When a COLA of eight cents was approved, Wise Alloys thought the

offset should be applied on a weekly basis, and it consequently reduced employees’

weekly health insurance premiums by eight cents, from $20.00 to $19.92. The 4

Unions, on the other hand, maintained that the offset should be calculated on an

hourly basis, and that the employees’ weekly share of health insurance premiums

should be reduced by eight centsfor each hour of a forty-hour work week, or by $3.20

per week.

5

Because Wise Alloys refused to adopt the Unions’ interpretation, the Unions

filed grievances under the CBAs. The disputes proceeded to arbitration pursuant to 6

Complaint, at ¶¶ 9-10. See also doc. no. 6 (Answer), at ¶¶ 9-10 (admitting these portions 3

of ¶¶ 9-10 of the Complaint).

Complaint, at ¶¶ 11-12. See also Answer, at ¶¶ 11-12 (admitting the allegations of ¶¶ 11-12 4

of the Complaint).

Complaint, at ¶ 13. See also Answer, at ¶ 13 (admitting this allegations of ¶ 13 of the 5

Complaint).

Complaint, at ¶ 14. See also Answer, at ¶ 14 (admitting the allegations of ¶ 14 of the

6

Complaint).

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Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 4 of 10
the terms of the CBAs, which called for final and binding arbitration of unresolved

grievances. The arbitrator held a hearing on July 23, 2008, and rendered a written

7

decision on November 21, 2008, interpreting Sections 2 and 3 of the CBAs to mean

that “all employees regardless of the number of hours worked are entitled to receive

cost of living adjustment [sic] equal to $0.08 per hour to offset health insurance

costs.” The arbitrator consequently ordered Wise Alloys to adjust the weekly health 8

care premiums to reflect a $3.20 offset for the COLA increase. Wise Alloys refused

to comply. 

9

Plaintiffs argue that the arbitrator’s award is final and binding, and that they

consequently are entitled to summary judgment on their breach of contract claim. As

relief for that claim, plaintiffs requested the following:

an Order requiring Wise Alloys to (1) complywith the arbitrator’s award

and honor the terms of the award on a prospective basis, (2) rescind any

actions taken to undermine or narrow the scope of the relief awarded by

[the arbitrator] and return to the status quo ante, (3) pay interest on the

amounts owed under the award, (4) payPlaintiffs a reasonable attorney’s

fee and costs associated with this litigation and (5) any other legal or

equitable relief the Court deems appropriate to remedy the alleged

violations, including but not limited to, any relief that Plaintiffs may

subsequently suggest is necessary to fully implement [the arbitrator’s]

Complaint, at ¶¶ 14-15. See also Answer, at ¶¶ 14-15 (admitting the allegations of ¶¶ 14-15 7

of the Complaint).

Complaint, at ¶ 17. See also Answer, at ¶ 17 (admitting the allegations of ¶¶ 17 of the 8

Complaint).

Complaint, at ¶¶ 18-19. See also Answer, at ¶¶ 18-19 (admitting the allegations of ¶¶ 18-19 9

of the Complaint).

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Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 5 of 10
award.

10

General principles regarding review of arbitrator awards under the LMRA

support plaintiffs’ argument. An arbitrator’s authority to interpret a collective

bargaining agreement is “broad,” and the scope of a district court’s review of an

arbitrator’s decision, consequently,is “‘exceedingly narrow.’” Bakery, Confectionery

and Tobacco Workers Local Union No. 362-T, AFL-CIO-CLC v. Brown and

Williamson Tobacco Corp., 971 F.2d 652, 655 (11th Cir. 1992) (quoting Loveless v.

Eastern Airlines, Inc., 681 F.2d 1272, 1275 (11th Cir. 1982)). Thus, it generally is

not the court’s “role to review the merits of the arbitrator’s interpretation” of a

collective bargaining agreement. IMC-AgricoCo. v. International Chemical Workers

Council of the United Food and Commercial Workers Union, AFL-CIO, 171 F.3d

1322, 1326 (11th Cir. 1999). 

Defendant offers only one argument against enforcement of the arbitrator’s

decision: i.e., that the award was procured through fraud and, therefore, it does not

reflect the essence ofthe parties’ agreement. See Barrington v. Lockheed Martin, 257

Fed. Appx. 153, 155 (11th Cir. 2007) (holding that, despite the generally narrow

scope of review of arbitration awards, a court can review an award to determine if the

award “fails to draw its essence from the collective bargaining agreement”). The

Complaint, at ¶ 24. 10

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Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 6 of 10
court has already held that defendant is time-barred from asserting those arguments

because defendant did not raise the arguments within three months of the date of the

arbitrator’s decision. To the extent defendant is asking the court to reconsider that 11

decision, the court declines to do so. 

In summary, the arbitrator’s decision is due to be enforced, and plaintiffs are

entitled to summary judgment in their favor on the relief requested in their complaint.

The terms of that judgment will be set out in more detail below.

III. ATTORNEY’S FEES

Plaintiffs also argue that defendant should be required to pay their attorney’s

fees, along with interest, for forcing plaintiffs to bring this action to enforce the

arbitration award. The Eleventh Circuit has been critical of parties’ unfounded and

unnecessary attempts to challenge arbitrators’ decisions in the federal courts, and has

suggested that sanctions may be appropriate for parties who bring such challenges.

In litigating this case without good basis through the district court

and now through this Court, Harbert has deprived Hercules and the

judicial system itself of the principal benefits of arbitration. Instead of

costing less, the resolution of this dispute has cost more than it would

have had there been no arbitration agreement. Instead of being decided

sooner, it has taken longer than it would have to decide the matter

without arbitration. Instead of being resolved outside the courts, this

dispute has required the time and effort of the district court and this

Court.

See doc. no. 30 (memorandum opinion and order on defendant’s motion to compel 11

discovery).

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Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 7 of 10
When a party who loses an arbitration award assumes a

never-say-die attitude and drags the dispute through the court system

without an objectively reasonable belief it will prevail, the promise of

arbitration is broken. Arbitration’s allure is dependent upon the

arbitrator being the last decision maker in all but the most unusual cases.

The more casesthere are, like this one, in which the arbitrator is only the

first stop along the way, the less arbitration there will be. If arbitration

is to be a meaningful alternative to litigation, the parties must be able to

trust that the arbitrator’s decision will be honored sooner instead of

later.

Courts cannot prevent parties from trying to convert arbitration

losses into court victories, but it may be that we can and should insist

that if a party on the short end of an arbitration award attacks that award

in court without any real legal basis for doing so, that party should pay

sanctions. A realistic threat of sanctions may discourage baseless

litigation over arbitration awards and help fulfill the purposes of the

pro-arbitration policy contained in the FAA. It is an idea worth

considering.

B.L. Harbert International, LLC v. Hercules Steel Co., 441 F.3d 905, 913-14 (11th

Cir. 2006). The Eleventh Circuit in Harbert went on to find that the imposition of

sanctions was not warranted in that case, primarily due to the lack of any prior case

law to place the parties on notice thatsanctions would be available in such a situation. 

Id. at 914. The Eleventh Circuit has not since addressed the issue, but district courts

within the Eleventh Circuit have relied upon Harbert to determine whether sanctions

should have been imposed upon parties who brought baseless challenges to

arbitration awards. See, e.g., Deitchman v. Bear Stearns Securities Corp., No. 07-

60465-CIV, 2007 WL 4592238, *7 (S.D. Fla. Dec. 28, 2007); Reuter v. Merrill

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Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 8 of 10
Lynch, Pierce, Fenner & Smith, Inc., 440 F. Supp. 2d 1256, 1265-66 (N.D. Ala.

2006). 

Even considering the Eleventh Circuit’s statements about sanctions in Harbert

to be the definitive law of the Circuit on the matter, this court does not find that

sanctions are warranted in this case. The court cannot conclude that defendant had

no “objectively reasonable belief” that its challenge to the arbitrator’s decision would

prevail, or that it lacked any “real legal basis” for the challenge. The arguments

defendant raised in support of its defense were colorable, just not ultimately

persuasive or successful. As such, plaintiffs are not entitled to receive an award of

attorney’s fees. As set forth below, however, the court concludes it would be just for

defendant to pay the actual costs (i.e., filing fee, transcription costs, etc) incurred by

plaintiffs in bringing this action. 

IV. CONCLUSION AND FINAL JUDGMENT

In accordance with the foregoing, plaintiffs’ motion for summary judgment is

GRANTED. It is hereby ORDERED as follows:

1. Judgment is entered in favor of plaintiffs — the United Steel, Paper and

Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers

International Union AFL-CIO-CLC; the International Union of Operating Engineers,

Local 320; and the United Brotherhood of Carpenters and Joiners, Local 1209 — and

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Case 3:09-cv-00678-CLS Document 37 Filed 04/13/10 Page 9 of 10
against defendant Wise Alloys, LLC.

2. Wise Alloys must comply with the November 21, 2008 decision of

arbitrator Allen D. Schwartz, and must honor all terms of that decision on a

prospective basis.

3. Wise Alloys must rescind any actionstaken to undermine or narrow the

scope of the relief awarded by arbitrator Allen D. Schwartz on November 21, 2008.

4. Wise Alloys must pay interest on any amounts owed under the

November 21, 2008 decision of arbitrator Allen D. Schwartz. 

5. Costs incurred in filing this action (not including attorney’s fees) are

taxed to defendant.

6. The Clerk of Court is directed to close this file. 

DONE and ORDERED this 13th day of April, 2010.

______________________________

United States District Judge

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