Of the District of Rhode Island, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 07-1024

HORVING RAMOS-SANTIAGO,

Plaintiff, Appellant,

v.

UNITED PARCEL SERVICE,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Camille L. Vélez-Rivé, U.S. Magistrate Judge]

Before

Torruella and Howard, Circuit Judges,

and Smith, District Judge. *

Manuel A. Rodríguez-Banchs, on brief for appellant.

Juan J. Casillas-Ayala, with whom Diana M. Espinosa-Núñez and

Fiddler González & Rodríguez, PSC, on brief for appellee.

April 24, 2008
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TORRUELLA, Circuit Judge. Horving Ramos-Santiago

("Ramos") was a driver with the United Parcel Service ("UPS") when

he failed to deliver thirty-seven packages over the span of two

business days in 2003. For this incident, UPS terminated his

employment and Ramos, through his union representative, filed a

grievance challenging the termination. Pursuant to the controlling

collective-bargaining agreement ("CBA"), Ramos's grievance was

submitted to arbitration. The arbitrator found that under Article

11, § 3 of the CBA, UPS was justified in terminating him. Ramos

now seeks judicial review. Applying the high degree of deference

generally accorded arbitral decisions, we affirm the district

court's grant of summary judgment enforcing the arbitration award.

I. Background

As this is an appeal from a grant of summary judgment, we

recite the facts in the light most favorable to the non-movant,

Ramos, drawing all reasonable inferences in his favor. Franceschi

v. U.S. Dep't of Veterans Affairs, 514 F.3d 81, 84 (1st Cir. 2008).

Petitioner Ramos had been a UPS employee for the past twelve years,

most recently as a driver. He is a member of the International

Brotherhood of Teamsters ("Union"), which, along with UPS, is party

to a CBA; the CBA outlines the procedure to be followed in carrying

out disciplinary actions against union members. On Friday,

January 24, and Monday, January 27, 2003, Ramos failed to deliver

thirty-seven packages to Centro Médico, a medical institution in
Ramos failed to deliver fifteen packages on Friday, and those 1

same fifteen packages plus seven additional ones on Monday.

 Article 11, § 3 reads: "The Company can suspend or discharge any 2

delegate or employee who declares an unauthorized strike, work

stoppage, slowdown, walk out or who takes any other action that

paralyzes, obstructs, or interrupts the operations of the Company

without resorting to the grievance procedure."

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Río Piedras, Puerto Rico. As a result, UPS terminated Ramos's 1

employment pursuant to Article 11, § 3 of the CBA. The Union then 2

filed a grievance challenging Ramos's discharge, arguing that UPS

had failed to follow the disciplinary procedure mandated by the

CBA, which requires the application of progressive discipline

before a final dismissal. The grievance was submitted to

arbitration.

The arbitrator assigned to adjudicate Ramos's grievance

held hearings at the Puerto Rico Department of Labor on

September 29, 2003, and August 13, 2004. At these hearings, Ramos

stated that he had engaged in an "error of judgment" when he "made

the decision" not to deliver the packages to Centro Médico. After

reviewing the evidence, the arbitrator held in favor of UPS,

finding that the failure to deliver the packages was "not about

mere negligence nor failure of procedures," but was instead a

"deliberate action." As such, Ramos had violated Article 11, § 3

of the CBA and UPS had properly terminated his employment.

Thereafter, Ramos filed a complaint in Puerto Rico state

court challenging the arbitrator's decision. UPS promptly removed
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the case to the District Court for the District of Puerto Rico

based on jurisdiction granted by § 301 of the Labor Management

Relations Act. 29 U.S.C. § 185(a) (2000). On August 7, 2006, UPS

filed a motion for summary judgment, which Ramos opposed. The

district court granted the motion on October 2, 2006, finding that

the arbitral award was a plausible interpretation of the CBA.

Subsequently, the district court granted UPS's request for costs on

November 2, 2006. Ramos now appeals the district court's decision,

as well as its award of costs.

II. Discussion

A. Arbitration Award

1. Standard of Review

We review a district court's decision to vacate or

confirm an arbitration award de novo. Cytic Corp. v. DEKA Prods.

Ltd. P'ship, 439 F.3d 27, 32 (1st Cir. 2006). A federal court's

review of an arbitrator's decision, however, is "'extremely narrow

and exceedingly deferential.'" Airline Pilots Ass'n, Int'l v. Pan

Am. Airways Corp., 405 F.3d 25, 30 (1st Cir. 2005) (quoting Bull HN

Info. Sys., Inc. v. Hutson, 229 F.3d 321, 330 (1st Cir. 2000));

First State Ins. Co. v. Banco de Seguros del Estado, 254 F.3d 354,

357 (1st Cir. 2001) (quoting Wheelabrator Envirotech Operating

Servs. Inc. v. Mass. Laborers Dist. Council Local 1144, 88 F.3d 40,

43 (1st Cir. 1996)). Indeed, it is "among the narrowest known in
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the law." Maine Cent. R.R. Co. v. Bhd. of Maint. of Way Employees,

873 F.2d 425, 428 (1st Cir. 1989).

When parties include an arbitration clause in their

collective-bargaining agreement, they are choosing to forego a

number of legal options in favor of having their disputes regarding

the construction of that contract settled by an arbitrator. As

this was the bargain the parties struck, they are bound by the

arbitrator's decision. See Keebler Co. v. Truck Drivers, Local

170, 247 F.3d 8, 10 (1st Cir. 2001). In the spirit of freedom of

contract then, we cannot review the merits of the underlying

dispute and are obligated to enforce the arbitral award unless the

decision fails to "draw[] its essence from the collective

bargaining agreement." See United Steelworkers of Am. v. Enter.

Wheel & Car Corp., 363 U.S. 593, 597 (1960); accord Kraft Foods,

Inc. v. Office & Prof. Employees Int'l Union, Local 1295, 203 F.3d

98, 100 (1st Cir. 2000). Though we may be convinced that the

arbitrator committed a serious error, if she is "even arguably

construing or applying the contract and acting within the scope of

his authority," we may not overturn the arbitrator's decision.

United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38

(1987).

2. Review of the Arbitration Award

This Court has recognized a very limited exception under

which we may vacate an arbitration award when there is evidence
 We acknowledge the Supreme Court's recent holding in Hall Street 3

Assocs., L.L.C. v. Mattel, Inc., No. 06-989, 2008 WL 762537, at *4-

5 (March 25, 2008), that manifest disregard of the law is not a

valid ground for vacating or modifying an arbitral award in cases

brought under the Federal Arbitration Act ("FAA"). Because the

case at hand is not an FAA case -- neither party has invoked the

FAA's expedited review provisions, and the original complaint was

filed in Puerto Rico state court under a mechanism provided by

state law -- we decline to reach the question of whether Hall

Street precludes a manifest disregard inquiry in this setting.

Whether or not Hall Street applies, Ramos's claim fails.

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that the arbitrator acted in "manifest disregard of the law."

Wonderland Greyhound Park, Inc. v. Autotote Sys., Inc., 274 F.3d

34, 35 (1st Cir. 2001). To establish such an exception, the

challenger must show that the arbitration award complained of is:

(1) unfounded in reason and fact; (2) based on reasoning so

palpably faulty that no judge, or group of judges, could ever

conceivably have made such a ruling; or (3) mistakenly based on a

crucial assumption that is concededly a non-fact. McCarthy v.

Citigroup Global Mkts., Inc., 463 F.3d 87, 91 (1st Cir. 2006). To

succeed, there must be "some showing in the record, other than the

result obtained, that the arbitrator[] knew the law and expressly

disregarded it." Advest, Inc. v. McCarthy, 914 F.2d 6, 9 (1st Cir.

1990) (quoting O.R. Secs., Inc. v. Prof'l Planning Assoc., Inc.,

857 F.2d 742, 747 (11th Cir. 1988)).3

Ramos argues that this is the type of extraordinary case

that warrants our vacating the arbitral decision because the

arbitrator who issued it acted in manifest disregard of the law by

knowingly applying the wrong provision of the CBA. Ramos's
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argument is unavailing. UPS terminated Ramos's employment under

Article 11, § 3 of the CBA, which by its text allows for the

summary discharge or suspension of an employee who declares "an

authorized strike, work stoppage, slowdown, walkout or . . . other

action that paralyzes, obstructs or interrupts the operations of

the Company." The arbitrator properly found that Ramos's dismissal

was justified under this provision.

Ramos argues that his actions cannot be characterized as

a strike, work stoppage, slowdown or walkout for the sole reason

that he did not engage in any concerted activity with other

employees. While Ramos is correct that the existence of a strike

requires concerted action, see 29 U.S.C. § 142 (2000), this Court

has stated that concerted action may be carried out by a single

employee under certain circumstances. Five Star Transp. v. NLRB,

No. 07-1316, 2008 WL 839758, at *4 (1st Cir. Mar. 31, 2008)

(holding that the critical inquiry in determining whether action by

a single employee constitutes concerted activity is whether such

action is in furtherance of a group concern). More to the point,

the very text of Article 11, § 3 contemplates actions carried out

by "any employee or delegate," and does not institute a group

action requirement. Thus, though concerted action does not by

itself constitute a strike, the fact that Ramos acted alone does

not render the application of Article 11, § 3 improper.
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Furthermore, the fact that Ramos delivered packages other

than those scheduled for delivery at Centro Médico on the Friday

and Monday in question does not make his discharge under Article

11, § 3 unwarranted. Ramos's decision to not deliver the thirtyseven packages on the assigned days clearly obstructed and/or

interrupted UPS's operations in contravention of Article 11, § 3.

As developed in arbitration, UPS's regular mode of operation is

that packages be delivered to the recipient on the day they are

sent out from the UPS processing center for delivery. Even if it

is understood that some low number of packages might miss their

delivery date due to extenuating circumstances, that that number

should be as high as thirty-seven is clearly a departure from the

norm.

Based on Ramos's admission during arbitration, the

arbitrator found that this departure from UPS's normal operations

was caused by Ramos's conscious decision to not deliver the thirtyseven packages to Centro Médico. As such, Ramos's action

obstructed and/or interrupted UPS's operations and the arbitrator's

decision is a plausible construction of Article 11, § 3. It is

also clear that the arbitrator's decision draws its essence from

the CBA. Because the arbitrator did not act in manifest disregard

of the law, and her opinion is supported in reason and fact and is

not based on faulty reasoning or a crucial assumption that is

concededly a non-fact, the arbitral award is allowed to stand.
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B. Bill of Costs

1. Standard of Review

We ordinarily review a district court's award of costs

for abuse of discretion. In re San Juan Dupont Plaza Hotel Fire

Lit., 111 F.3d 220, 228 (1st Cir. 1997); see also García-Goyco v.

Law Envtl. Consultants, Inc., 428 F.3d 14, 18 (1st Cir. 2005). In

doing so, we remember that an award of costs is the type of

discretionary ruling to which appellate courts should give

"'virtually complete'" deference. Dupont Plaza Hotel Fire, 111

F.3d at 228 (quoting Estate of Borst v. O'Brien, 979 F.2d 511, 517

(7th Cir. 1992)).

2. Review of the Award of Costs

Ramos alleges that the district court erred in awarding

UPS litigation costs because it did so before the ten-day period to

file an objection to a bill of costs had run out. See D.P.R. R.

54(b). Specifically, UPS filed its brief in support of its bill of

costs on October 24, 2006, and the district court granted its award

of costs within the ten-day period on November 2, 2006. Yet Ramos

never filed his objection to the bill of costs either before or

after it was awarded. As such, and according to the text of Puerto

Rico Local Rule 54(b), Ramos has waived his objection. Id.

("Unless within ten (10) days after the filing of a bill of costs

the opposing party files a written objection thereto, incorporating

a memorandum of law, the opposing party shall be deemed to have
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waived objection and the Clerk shall tax the costs which appear

properly claimed."

III. Conclusion

For the foregoing reasons, the district court's grant of

summary judgment enforcing the arbitration award is affirmed.

Affirmed.