# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

__ __ __ __ __ __ __ __ __ __ __ __ __ _

No. 1 2- 30 90

__ __ __ __ __ __ __ __ __ __ __ __ __ _

ABF Fre ig ht Sy st em , Inc

.

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

In te rn at io na l Br ot he rh oo d o f Team st ers , as a nd for th em se lv es an d a s

rep res en ta ti ve s o f a cl as s o f te am st ers lo cal un io ns th at are p art ie s t o t he Nati on al

Mas te r Frei gh t Ag reem en t; Team st ers Nati on al Frei gh t In du st ry Nego ti at in g Co m m it te e, as an d fo r th em se lv es an d a s re pr es en ta ti ve s o f a cl as s o f te am st ers lo cal un io ns th at are p art ie s t o t he Nati on al Mas te r Frei gh t Ag reem en t; Team st ers Loc al Uni on 37 3, as an d fo r th em se lv es an d a s re pr es en ta ti ve s o f a cl as s o f

te am st ers lo cal un io ns th at are p art ie s t o t he Nati on al Mas te r Frei gh t Ag reem en t;
Team st ers Loca l Un io n 8 78 , as a nd for th em se lv es an d a s re pr es en ta ti ve s o f a
cl as s o f te am st ers lo cal un io ns th at are p art ie s t o t he Nati on al Mas te r Frei gh t Agr eem en t; YRC, In c.; New Pe nn Mo to r Exp res s, In c.; USF Hol la nd , Inc .;

Truc ki ng Man ag em en t, In c.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

__ __ __ __ __ __
App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Weste rn Dis tri ct of Ark an sa s - F t. Sm it h

__ __ __ __ __ __

Su bm it te d: Apri l 1 0, 2 01 3
Fil ed : Au gu st 30 , 20 13

__ __ __ __ __ __

Befo re RI LEY, Chi ef J ud ge , BYE and BENTON, Circu it Ju dg es

.

__ __ __ __ __ __BENTON, Circu it Ju dg e.

ABF Frei gh t Sy st em , In c., su ed th e fo ll owi ng de fen da nt s: YRC, In c., New

Pen n Mo to r Exp res s, In c., USF Hol la nd

, In c. (co ll ect iv el y , “ YRC”) ; th e In te rn at io na l

Bro th erh oo d o f Team st ers an d t wo of it s lo cal s (co ll ect iv el y , t he “ Uni on ”); an d t he

b a rg ai ni ng rep res en ta ti ve s of YRC an d th e Uni on

. ABF al le ge d a vi ol at io n o f a

co ll ect iv e-b arg ai ni ng ag reem en t. Arg ui ng th at th e ag reem en t’s gr ie va nc e-re so lu ti on
syste m was un av ai la bl e, ABF as ke d th e di st ric t co ur t to ap po in t a di si nt eres te d 1

tri bu na l to he ar th e gr ie va nc e or , al te rn at i v e l y, to pr ov id e red res s. The de fen da nt s

m ov ed to di sm is s un de r Ru le 12 (b ) ( 6) , wh ic h th e di st ric t co ur t gr an te d. Thi s co ur t

affi rm s.

I.

YRC an d ABF are frei gh t tru ck in g c om pa ni es who se em

pl oyees are

rep res en te d by th e U n i o n. Bo th co m pa ni es pe rio di cal ly ne go ti at e th e te rm s of a

Nati on al Mas te r Frei gh t Agr eem en t (NMFA) wit h th e Uni on

. The NMFA

st an da rd iz es co m

pe ns at io n, be ne fit s, an d wor ki ng co nd it io ns

. In ne g ot ia ti ng th e

20 08 -2 01 3 NMFA, th e Team st er Nat io na l Fr ei gh t In du st ry Neg ot ia ti ng Co m m it te e (TNFINC) rep res en te d th e Uni on ; Truc ki ng Man ag em en t, In c. (TMI) rep res en te d

YRC

, I n c

. an d USF Hol la nd , I nc

. TMI pr ev io us ly rep res en te d ABF, bu t it in 20 07

wit hd rew au th or iz at io n an d be ga n ne go ti at in g di rect ly wit h TNFINC. In 20 08

, ABF

an d TNFINC si gn ed an “ In te rim Agr eem en t” wher e ABF ag reed to be co m e a pa rty

to th e n ew NMFA an d i m pl em en t i ts work co nd it io ns

.

The Ho n or ab le Su sa n W eb be r W rig ht

, Uni te d St at es Dis tri ct Co ur t fo r th e 1

W es te rn Dis tri ct of Ark an sa s.

-2

-Fo ll owi ng th e NMFA’s rat ifi cat io n an d th e on se t of th e 20 08 rece ss io n, YRC

an d TNFINC ne go ti at ed am en dm en ts red uc in g pa y an d be ne fit s of YRC em pl oyees,

in ex ch an ge fo r va rio us co nc es si on s. The am en dm en ts ap pl ie d on ly to YRC an d it s

em pl oyees. ABF ne go ti at ed a di ffer en t co m pr om is e, whi ch it s em

pl oyees reject ed

. A BF co m pl ai ns th at th e YRC-Un io n am en dm en ts vi ol at e pr ov is io ns of th e N M F A

th at r e q u i r e em

pl oyers to m ai nt ai n wor k co nd it io ns at th e “ hi gh es t st an da rd s” in

effe ct at th e ti m e of th e NMFA an d no t to en te r ag reem en ts th at co nf l i c t w it h th e

N M FA. On Nov em

be r 1, 20 10

, ABF fil ed a gr ie va nc e un de r th e N M F A a n d

si m ul ta ne ou sl y br ou gh t th is cas e un de r se ct io n 30 1( a) of th e La b o r Man ag em en t

Rel at io ns Act (LM RA), 2 9 U.S.C. § 18 5( a).

Grie va nc es un de r th e NMFA are su bm it te d to a pe rm an en t Nati on al Grie va nc e

Co m m it te e (NGC), co m

pr is ed eq ua ll y of em

pl oyer an d un io n rep res en ta ti ve s. The

NGC’s m ajor it y de ci si on s are fin al an d bi nd in g. Dead lo ck e d gr ie va nc es no rm al ly

m ov e to th e Nati on al Rev ie w Co m m it te e (NRC)

, co ns is ti ng of TNFINC’s ch ai rm an

an d TMI’s ex ecu ti ve di rect or

. If th e two NRC m em be rs di sa g r ee, TNFINC’s

ch ai rm an an d th e em

pl oyer’s p r e s i d e n t h av e 30 da y s to try to res ol ve th e di sp ut e. Lawy ers m ay

no t p res en t ca se s at an y

st ep

.

The NMFA m an da t e s t ha t th e NGC ad op t ru le s of pr oc ed ur e. Und er Arti cl e

II of th os e ru le s, em

pl oyer an d un io n rep res en ta ti ve s ca n no t pa rti ci pa te in “ cas es

in vo lv in g th ei r res pe ct iv e co m pa ny or lo cal un io n.” Arti cl e V st at es , “ No Unio n or

Em pl oyer rep res en ta ti ve sh al l se rv e in an y cap a c i t y o n a Co m m it te e or Pan el

pr ov id ed fo r un de r th es e Ru le s in he ari ng a cas e in whi ch th ey were di rect ly in vo lv ed

, in cl ud in g h eari ng a cas e in vo lv in g t he ir o wn Lo cal Uni on or C om pa ny.”

Co nt en di ng th es e ru le s di sq ua li fy ev ery m em be r of th e NGC fro m he ari ng it s

gr i ev an ce, ABF as ke d th e di st ric t co ur t to ap po in t a di si nt eres te d tri bu na l (o r

al te rn at iv el y pr ov id e red res s)

. The de fen da nt s m ov ed to di sm is s for lack of su bjec t

m at te r juri sd ic ti on un de r Ru le 12 (b )(1 ), arg ui ng th at ABF la ck ed st an di ng to en fo rce

-3

-th e NMFA’s pr ov is io ns be cau se ABF was no t a pa rty to th e NMFA bu t m erel y si gn ed

a “ m e to o” ag reem en t. The Uni on al so m ov ed to di sm is s u nd er Ru le 12 (b )(6 ),

arg ui ng th at ABF sh ou ld go be fo re th e NGC. The di st ric t co ur t di sm is se d fo r la ck of

st an di ng

. Thi s co ur t va cat ed an d rem an de d, ex pl ai ni ng th at ABF ha d “ pr od uc ed

su ffi ci en t fact s, fo r st an di ng pu rp os es , i nd ic at in g a jud ic ia ll y co gn iz ab le in te r e st in

th e NMFA,” an d th at “ [t]he di st ric t co ur t erre d in de ci di ng th e m eri ts of ABF’s rig ht s

un de r th e NMFA, rat he r th an whe th er ABF ha d a jud ic ia ll y co gn iz ab le in te res t in th e

NMFA.” ABF Fr ei

gh t Sys
., In c. v. In t’l Bhd

. of Tea m st

er s , 64 5 F.3 d 95 4, 96 0 (8 th

Ci r. 20 11 ). Thi s co ur t d ecl in ed to co ns id er rem ed ie s an d ex pl ai ne d th at th e cas e’s

po st ur e pr ev en te d eva lu at io n of ABF’ s clai m s un de r Ru le 12 (b )(6 ). Id

. at 96 4- 65

.

On rem an d, ABF am en de d it s co m pl ai nt an d th e de fen da nt s m ov ed to di sm is s

un de r Ru le 12 (b )(6 ). The d is tri ct co ur t ag ai n d is m is se d. ABF a pp eal s.

II.

“ W e rev ie w de no vo th e di st ric t co ur t’s gr an t of a m ot io n to di sm is s, acce pt in g

as tru e al l fact ua l al le ga ti on s in th e co m pl ai nt an d dr awin g al l reas on ab le in fere nc es

in fav or of t he no nm ov in g p art y .” Fr ei ta s v. W el ls Fa rg o Ho m e Mo rt

g., In c. , 7 03

F.3 d 43 6, 43 8 (8 th Ci r. 20 1 3 )

. “ To su rv iv e a m ot io n to di sm is s, a co m pl ai nt m us t

co nt ai n su ffi ci en t fact ua l m at te r, a c c e p t e d as tru e, to st at e a cl ai m to rel ie f th at is
pl au si bl e o n i ts face .” Id

. , qu ot in g As hcr of

t v. I qb al , 55 6 U.S. 6 62 , 67 8 (2 00 9)

.

III.

ABF’s fir st cau se of act io n se ek s ap po in tm e n t o f a di si nt eres te d tri bu na l to

ad jud ic at e it s gr ie va nc e. ABF co nt en ds th at th e NGC ru le s di sq ua li fy al l it s m em be rs

fro m he ari ng th e gr ie va nc e be c a u s e th ey are al l pa rti es to it

. ABF co nc lu de s th at

be cau se th e ru le s d o n ot all ow re pl acements , th e di sq ua li fic at io n of the en ti re NGC

res ul ts in a fai lu re or la ps e in fil li ng an arb it ral va can cy , an d un de r th e LMRA, th e

-4

-co ur t m ay ap po in t a rep la cem en t. Se e Tex ti le Wo rk er s Unio n of Am

. v. Linc ol n

Mi ll s of Al a. , 35 3 U.S. 4 4 8

, 4 5 7 ( 1 95 7) (al lo win g fo r “ jud ic ia l in ve nt iv en es s” in

res ol v i n g p ro bl em s un de r th e LMRA). Se e ge ne ra ll y Bet hl ehem Mi nes Co rp

. v.

Unit ed Mi ne Wo rk er

s of Am

. , 49 4 F.2 d 72 6, 74 0 (3 d Ci r. 19 74 ) (ap pr ov in g di st ric t

co ur t’s fas hi on in g a pr oc ed ur e to ch oo se an um pi re aft er th e pa rti es fai le d to ag ree on

on e); Bel l Aer os pa ce Co

. Div. of Tex tr o n , I n c. v. Loc al 51 6, UAW

, 50 0 F.2 d 92 1,

92 4- 25 (2 d Ci r. 19 74 ) (rev ers in g di st ric t co ur t’s co nf irmatio n of an arb it rat io n award

an d in st ru ct in g th at on rem an d, if th e pa rti es di d no t ag ree on an arb it rat or , th e di st ric t

co ur t m us t ap po in t o ne ). 2

Here, th e di st ric t co ur t can no t ap po in t a ne w tri bu na l be cau se th e ru le s pr ov id e

a so lu ti on

. The NGC’s ru le s st at e th at t h e y “ m ay be am en de d or m od ifi ed by a

m ajor it y vo te of th e [NGC].” Thi s of fers a way to qu al ify or rep la ce NGC m em be rs ,

or ot he rwis e effi caci ou sl y al te r th e gr ie va nc e pr oc es s. Th ou gh th e cu rren t ru le s

di sq ua li fy

co nf li ct ed NGC m em

be rs fro m he ari ng cas es , t he y do no t d is qu al ify any

m em be rs fro m ru le m ak in g. Bec au se th e NMFA gr ie va nc e pr oc es s is av ai la bl e, th e

di st ric t co ur t i s o bl ig at ed to en fo rce it

. Se e Fa be r v. Men ar d, In c. , 3 67 F.3 d 1 04 8,

10 52 (8 th Ci r. 20 04 ) (“ [A]rbi tra ti on ag reem en ts are to be en fo rced un le ss a pa rty can

sh ow th at i t w i l l n o t b e ab le to vi nd ic at e it s rig ht s in th e arb it ral fo ru m .”), ci ti ng

G re en Tree Fi n. Co rp

. v. Ra nd ol ph

, 53 1 U.S. 79

, 90 -9 2 (2 00 0)

. App oi n t i n g a

ne ut ral tri bu na l wou ld am en d or m od ify th e ru le s, whi ch are ex pl ic it ly po wers of th e

NGC.

The NMFA gr ie va nc e pr oc es s “ is no t tru e arb it rat io n by a ne ut ral th ird pa rty.”

2

Se e St even s v. Hi

gh wa y, Ci ty & Ai r Fr ei

gh t Dri ver

s, Loc al 60 0

, 79 4 F.2 d 37 6, 37 7 (8 th Ci r. 19 86 ). Se e a ls o Mer ry m an Ex ca va ti on , I nc. v. In t’l Unio n of Ope ra ti ng Eng ’r s, Loc al 15 0

, 63 9 F.3 d 28 6, 29 0 (7 th Ci r. 20 11 ) (“ [A] joi nt co m m it te e is no t a

ge nu in e arb it rat io n su bjec t to th e [FAA] an d th e fu ll req ui rem en ts of im pa rti al it y th at

ap pl y to ge nu in e arb it rat io n.” )

. Bu t, be cau se it is st il l a fo rm of arb it rat io n, th is co ur t rel ie s on cas e la w reg ard in g arb it rat io n. Se e St even s , 79 4 F.2 d at 37 8 (ref erri ng to a joi nt co m m it te e g rie va nc e p ro ced ur e as a “ ki nd of a rb it rat io n” ).

-5

-Fu rth er, th ere ha s be en no fai lu re or la ps e in ex erci si ng th at po wer. ABF rel ie s

on th e Fi fth Ci rcu i t ’s d e f i n i t io n of a “ la ps e”: “ a la ps e in ti m e in th e na m in g of th e

arb it rat or or in th e f

i l l i n g of a va can cy on a pa ne l of arb it rat or s, or so m e ot he r

m ech an ic al br eak do wn in th e arb it rat or se le ct io n pr oc es s.” BP Ex pl or at io n Li by a

Ltd

. v. Ex xo nMo bi l Lib

ya Ltd

. , 68 9 F.3 d 48 1, 49 1- 92 (5 th Ci r. 20 12 ) (in te rn al

qu ot at io n m ark s om it te d)

, qu ot in g In re Sa lo m on S ’ h o ld er s Der iv at iv e Lit ig

. , 68

F.3 d 55 4, 56 0 (2 d Ci r. 19 95 ). The fact th at co ns id erab le ti m e ha s pa ss ed si nc e ABF

fil ed it s gr ie va nc e is un pe rs ua si ve

. The de fen da nt s co nt en d th at ABF ha s no rig ht to

in vo ke th e gr ie va n c e pr oc es s. If it do es no t, th ere is no la ps e in in vo ki ng th at

pr oc es s. Res ol vi ng th at co nt en ti on m us t oc cu r be fo re th e NGC can ad dr es s th e cas e.

The re ha s be en no m ech an ic al br eak do wn, ei th er; as ex pl ai ne d ab ov e, th e pr oc es s is

av ai l ab le

. The pa rti es ’ di sa gr eem en t ab ou t th at is irr el ev an t; th e po ss ib il it y of

am en dm en t o r m od ifi cat io n i s cl ear.

ABF co m

pl ai ns th at “ a m ajor it y of th e NGC’s m em be rs h i p c o ns is ts of

rep res en ta ti ve s of th e Defen da nt s,

. . . who in an y ev en t wou ld ne ve r vo te to im po se

li ab il it y on th ei r em

pl oyers in fav or of ABF.” Thi s ris k ABF ag reed to by si gn in g th e

In te rim Agr eem en t, whi ch al lo wed th e NGC to pr om ul ga te it s own ru le s. Se e Delt a

Mi ne Ho ld

in g Co . v . A FC Co al Pro

ps ., I nc. 2 8 0 F

. 3 d 8 1 5 , 8 23 -2 4 (8 th Ci r. 20 01 )
(p art ia li ty of arb it rat or is no t a ba si s to rev ers e an arb it rat io n award whe re “ [t]he

pa rti es ex pr es sl y ag reed to th e se le ct io n of pa rti sa n pa rty arb it rat or s” ); Gos s Gol de n

W. Shee t Met

al v. Shee t Met

al Wo rk er

s In t’l Unio n, Loc al 10 4

, 93 3 F.2 d 75 9, 76 4-

65 (9 th Ci r. 19 91 ) (“ Gos s rece iv ed ex act ly wha t it ba rg ai ne d fo r” in ap pe ari ng be fo re

a joi nt bo ard co ns is ti ng of rep res en ta ti ve s fro m th e un io n a nd Gos s’s co m pe ti to rs );

Shee t Met

al Wo rk er

s In t’l As s’ n, Loc al 16 2 v. Ja so n Mfg
., I n c

. , 9 0 0 F.2 d 13 92

, 13 98 (9 th Ci r. 19 90 ) (“ Ja so n al so kn ew of th e NJAB pr oc ed ur es an d in te res t pr io r to

si gn in g th e co l l e c ti ve ba rg ai ni ng ag reem en t.”)

. So m e gr ie va nc e syste m s are no t

m ean t to be di si nt eres te d. Se e S t e vens , 79 4 F.2 d at 37 7 (“ W e reco gn iz e th at th e

gr ie va nc e syste m se t up by th is la bo r co nt ract is no t tru e arb it rat io n by a ne ut ral th ird

-6

-pa rty, bu t in st ead in vo lv es de ci si on s by joi nt la bo r-m an ag em en t p an el s.”)

. Tho ug h

th is co ur t on ce ha d “ se rio us res erv at io ns ” ab ou t th e ba si c fai rn es s o f su ch a syste m (d ue to po ss ib le gr av e ab us es ), it co nc lu de d th at “ th e la w se em s to be es ta bl is he d th at

t h e jo i n t c o m

m it te e m et ho d is

. . . v al id .” Id

. at 37 7- 78 (m od ifi cat io n in or ig in al )

. Se e al so Wa rr en v. In t’l Bhd

. Of Tea m st

er s , 54 4 F.2 d 33 4, 34 0 (8 th Ci r. 19 76 ) (“ The

act io ns of su ch joi nt co m m it te es ha ve co ns is te nt ly be en co ns id ered jus t as fin al an d

bi nd in g a s i f th e act io ns ha d b een cal le d a rb it rat io n.” ).

ABF no t on ly as ke d th e di st ric t co ur t to rep la ce an arb it rat or or th e m et ho d of

se le ct in g on e, bu t al so to im po se an en ti rel y ne w–f

un da m en ta ll y di ffer en t– gr ie va nc e

res ol ut io n syste m

. The di st ric t co ur t p r o p e r l y d e c li ne d to do so

. Se e 29 U.S.C. §

17 3( d) (“ Fi na l ad

jus tm en t b y

a m et ho d a gr eed up on by t he pa rti es is de cl ared to be

th e de si rab le m et ho d fo r se tt le m en t of gr ie va nc e di sp ut es ari si ng ov er th e ap pl ic at io n

or in te rp ret at io n of an ex is ti ng co ll ect iv e-b arg ai ni ng ag reem en t.”) ; Gener al Dri ver s,

Loc al 89 v. Ri

ss & Co

. , 37 2 U.S. 51 7, 51 9 (1 96 3) (“ [T]he po li cy of th e Lab or Act can

be effe ct ua te d on ly if th e m ean s ch os en by th e pa rti es fo r se tt le m e n t o f t h ei r

di ffer en ces un de r a co ll ect iv e ba rg ai ni ng a g reem en t is gi ve n fu ll pl ay .” (in te rn al

qu ot at io n m ark s om it te d) ); Ar t Et c. LLC v. Ang el Gift

s, In c. , 68 6 F.3 d 65 4, 65 6 (8 th

Ci r. 20 12 ) (“ Arb it rat io n is a m at te r of co nt ract

, . . . ‘and a pa rty can no t be req ui red to

su bm it to a rb it rat io n an y di sp ut e whi ch he ha s no t ag reed so to su bm it .’ ”), qu ot in g

Unit ed St eel wo rk er s v. Wa rr io r & Gulf Nav ig at io n Co

. , 36 3 U.S. 57 4, 58 2 (1 96 0)

. In it s rep ly br ie f, ABF arg ue s th at th e de fen da nt s m is un de rs ta nd it s cl ai m

. ABF

cl ai m s it “ m erel y se ek s pa ne li st s who are no t di s q u a l i f ie d un de r th e ag reed -u po n

Grie va nc e Ru le s.” ABF ex pl ai ns th a t t h e d i st ric t co ur t “ co ul d se le ct ba la nc ed

m an ag em en t-l ab or pa ne ls as co nt e mp l at ed by th e NMFA; th os e pa ne li st s si m pl y

co ul d no t be rep res en ta ti ve s of th e pa rti e s

. ” Bu t su ch a pa ne l wou ld li ke ly no t be

di si nt eres te d, as req ue st ed by ABF’s Am en de d Co m pl ai nt

. Fu rth er, it wou ld st il l no t

be th e m et ho d th e pa rti es ag reed to – a NGC co m pr is ed of rep res en ta ti ve s of NMFA

si gn at or ie s.

-7

-ABF es pe ci al ly em ph as iz es th at th e Fed eral Arb it rat io n Act (FAA) al lo ws fo r

co ur ts to ap po in t arb it rat or s in so m e si tu at io ns

. Se e 9 U.S.C. § 5

. Bu t, th e FAA do es

no t ap pl y in th is cas e. Se e 9 U.S.C. § 1 (ex em pt in g em pl oym en t co nt ract s of wor ke rs

en ga ge d in in te rs ta te co m m erce fro m th e FAA); Ci rc ui t Ci ty St or es , In c. v. Ad

am s , 53 2 U .S. 10 5, 11 9 (2 00 1) (tr an sp or ta ti on wor ke rs ’ em pl oym en t co nt ract s are

ex em pt ed fro m th e F A A ) ; I

n t ’l Bhd

. of Tea m st

er s Loc al 50 v. Ki ens tr a Prec as t,

LLC

, 70 2 F.3 d 95 4, 95 7 (7 th C i r

. 20 12 ) (tr uc ke rs oc cas io na ll y tra ns po rti ng lo ad s

acro ss st at e bo rd er “ were in t e r s t a te tra ns po rta ti on wor ke rs wit hi n th e m ean in g of §

1 of th e FAA as in te rp ret ed by Ci rc ui t Ci ty

, whi ch in tu rn m ean s th at th e Ill in i CBA

is ex cl ud ed fro m

th e FAA’s co ve rag e”).

ABF rep e a t e d l y ci te s an FAA cas e, Na ti on al Ameri ca n In su ra nc e Co

. v.

Tr an sa mer ic a Occi de nt al Li fe In su ra nc e Co

. , 32 8 F.3 d 46 2 ( 8 t h Ci r. 20 03 ). Thi s

co ur t he ld th at th e di st ric t co ur t co rrec tl y ap po in te d a su bs ti tu te whe n: an arb it rat or

res ig ne d aft er pr oc eed in gs be ga n, th e pa rti es co ul d no t ag ree on a rep la cem en t

pr oc es s, an d th e arb it rat io n ag reem en t di d no t “ st ip ul at e a m et ho d to rep la ce an

arb it rat or in th e ev en t of a va can cy on th e arb it rat io n pa ne l.” I d

. a t 4 6 3

- 6 4. Thi s

co ur t ex pl ai ne d th at “ [b ]ecaus e th e ag reem en ts are si le nt on th is is su e, th is di sp ut e is

go ve rn ed by 9 U.S

. C

. § 5.” Id

. at 46 4. In th is co ll ect iv e ba rg ai ni ng cas e, th e ru le s

are no t si le nt ; th ey st ip ul at e th at th e r u l e s can be am en de d or m od ifi ed

, al lo win g a

res po ns e to th e d is qu al ifi cat io n i ss ue

.

ABF co nt en ds th at th is ho ld in g a m ou nt s t o a ll owi ng th e arb it rat or s t o se t t he

bo un ds of th ei r own po wer. “ [T]he la w crea te s a pr es um pt io n th at th e pa rti es di d no t

ag ree to su bm it an y qu es ti on as to th e arb it rat or ’s own p o w e r t o t h a t ve ry sa m e

arb it rat or .” Gener al Mo to rs Co rp

. v. Pam el a Eq ui ti es Co rp

. , 14 6 F.3 d 24 2, 24 8 (5 th

Ci r

. 1 9 9 8)

, ci ti ng Fi rs t Opt io ns of Chi ca

go , In c. v. Ka

pl an , 51 4 U.S. 93 8, 94 4
(1 99 5)

. “ [C]ou rts sh ou ld no t as su m e or co nc lu de th at th e pa rti es ag reed to su bm it th e

qu es ti on of th e sc op e of th e arb it rat or ’s own au th or it y to th at arb it rat or un le ss th ere

is ‘clear an d un m is ta ka bl e ev id en ce’ th at th ey di d so .” Id

. , qu ot in g Fi r s t Opt

io ns ,

-8

-51 4 U.S. at 94 4. “ Co ns eq ue nt ly, an y si le nc e, am bi gu it y or do ub ts ab ou t th is qu es ti on

sh ou ld be res ol ve d in fav or of co nc lu di ng th at th e pa rti es di d no t ag ree to su bm it th e

is su e to th e arb it rat or .” Id

. Bu t, “[c ]o u r t s a r e no t to us ur p th os e fu nc ti on s whi ch

co ll ect iv e-b arg ai ni ng co nt ract s ha ve pr op erl y ‘ent ru st ed to th e arb it rat io n tri bu na l.’”

Hi nes v. Anch or Mo to r Fr e i g h t , In c. , 42 4 U.S. 55 4, 56 2- 63 (1 97 6)

, qu ot in g

St eel wo rk er s v. Am

. Mfg

. Co

. , 36 3 U.S. 56 4, 56 9 (1 96 0)

. The re are no do ub ts he re

ab ou t th e NGC’s po wer. The NMFA ex pl ic it ly m an da te s th at th e NGC ad op t ru le s.

The NGC’s ru le s in cl ud e bo th di s q u a l ifi cat io n fro m he ari ng cas es fo r co nf li ct of

in te res t, an d th e ab il it y to am en d or m od ify th e ru le s (b ut do no t di sq ua li fy th e NGC

fro m su ch am en di ng or m od ifyin g)

. Tha t di sq ua li fie d NGC m em be rs m ay fo rm

ul at e

a ne w ru le res po ns iv e t o d i s q u a l ifi cat io n fin ds su pp or t el se whe re in th e NMFA.

Und er Arti cl e 7 of th e NMFA, “ No Em pl oyer or Uni on rep res en ta ti ve who is di rect ly

in vo lv e d i n a cas e m ay se rv e as a pa ne l m em be r ex cep t at a lo cal le ve l co m m it te e

whe re th ere is on ly on e Loc al Uni on su bjec t to th e ju r i s di ct io n of th e co m m it te e.”

Si m il arl y , if th e NGC an d NRC de ad lo ck

, TNFINC’s ch ai rm an (a un io n le ad er) an d

th e em pl oyer’s pr es id en t t r y t o r es ol ve th e di sp ut e. Bo th sc en ari os al lo w fo r th e

pa rti ci pa ti on of i nt eres te d p art ie s wi th ou t a t hi rd -p art y arb it rat or

.

Gen eral ly, a di sq ua li fie d arb it rat or m ay na m e a rep la cem en t if th e ru le s al lo w

it

. Se e Ap

pe rs on v. F

l e e t C a r r ie r Co rp

. , 87 9 F.2 d 13 44

, 13 55 (6 th Ci r. 19 89 )
(aff irming arb it rat or ’s se le ct io n of hi s rep la cem en t whe re th e pr oc ed ur e fo r do in g so

was m an da te d by th e ag reed -u po n ru le s)

. Tho ug h th e ru le s he re do no t m an da te th e

NGC’s sp eci fic res po ns e t o a di sq ua li fic at io n, th ey no ne th el es s m ak e cl ear th at

res ol vi ng it by am en di ng or m od ifyin g t he rul es is an is su e fo r th e NGC.

IV.

ABF’s se co nd cau se of act io n is it s req ue st fo r red res s di rect ly fro m th e co ur t

fo r br each of th e NMFA. The de fen da nt s ob ject th at th e d is tri ct co ur t ca nn ot gr an t

rel ie f be cau se ABF di d no t ex ha us t th e gr ie va nc e pr oc es s. Se e Unit ed Pap er wo rk er

s ,

-9

-48 4 U.S. at 37 (1 98 7) (“ [W] he re th e co nt ract p r ov id es gr ie va nc e an d arb it rat io n

pr oc ed ur es , th os e pr oc ed ur es m us t fir st be ex ha us te d an d co ur ts m us t or de r res or t to

th e pr iv at e se tt le m en t m ech an is m s wit ho ut de al in g wit h th e m eri ts of th e di sp ut e.”).

ABF res po nd s th at : 1) ex ha us ti on is ex cu se d be cau se t h e gr ie va nc e res ol ut io n

pr oc es s is un av ai la bl e an d e x h au st io n wou ld be fu ti le

, 2) th e de fen da nt s fai le d to

affi rm at iv el y pl ead an d pro ve fai lu re to ex ha us t, an d 3) th e de fen da nt s waiv ed th ei r rig ht to in si st on ex ha us ti on

. Exh au st io n is rev ie wed de no vo

. Cho ro se vi c v. Met Life

Cho ic es , 60 0 F .3d 93 4, 9 41 (8t h C ir. 2 01 0)

.

A.

ABF arg ue s th at it co ul d no t ex ha us t th e gr ie va nc e res ol ut io n pr oc es s be cau se

it is un av ai la bl e or fu ti le he re. Se e Ba rr on ex rel . D.B. v. S.D. Bd. o

f Reg ent s , 65 5

F.3 d 78 7, 79 2 (8 th Ci r. 20 11 ) (ex ha us ti on is ex cu se d whe re “ ad eq ua te rel ie f li ke ly

co ul d no t ha ve be en ob ta in ed t h ro ug h th e ad m in is tra ti ve pr oc es s” ); Ma rt in v. Am

. Ai rl in es , In c. , 39 0 F.3 d 60 1

, 6 0 9 ( 8 th Ci r. 20 04 ) (“ The fu ti li ty ex cep ti on ap pl ie s

‘w h e re th e effo rt to pr oc eed fo rm al ly wit h co nt ract ua l or ad m in is tra ti ve rem ed ie s

wou ld be who ll y fu ti le .’ ”), qu ot in g Glo ver v. St. Lo ui

s- S.F. Ry. Co

. , 39 3 U.S. 32 4,

33 0 (1 96 9)

. To th e co nt rary, as ex pl ai ne d, th e ru l e s o f f e r a means of am en di ng or

m od ifyin g t he gri ev an ce re so lu ti on pro ces s, s o t ha t i t i s n ot un av ai la bl e o r fu ti le

.

B.

ABF ne xt as se rts th at th e de fen da nt s are no t en ti tl ed to th e ex ha us ti on de fen se , whi ch th ey rai se d a y ear aft er li ti ga ti on be ga n, be cau se th ey fai le d to affi rm at iv el y pl ead an d pr ov e it

. Se e Wr ig ht v. Univ er sa l Ma r. Ser v. Co rp

. , 52 5 U.S. 70

, 75 (1 99 8)
( “Resp on de nt s’ an swe r as se rte d va rio us affi rm at iv e de fen se s, in cl ud in g W rig ht ’s

fai lu re to ex ha us t h i s rem ed ie s un de r th e CBA.”); Nas h v. Lap pi n , 1 72 Fed . Ap px

. 70 2, 70 3 (8 th Ci r. 20 06 ) (p er cu ria m ) (“ [T ]h e ex ha us ti on req ui rem en t is an

affi rm at iv e de fen se th at a de fen da nt m us t pl ead an d pr ov e.”). Bu t, th ou gh it ge ne ral ly

-1 0-m

us t be affi rm at iv el y pl ed an d pr ov ed

, “ [i]f an affi rm at iv e de fen se

. . . is ap pa ren t on

th e face of th e co m

pl ai nt

. . . th at [d efen se ] can pr ov id e th e ba si s fo r di sm is sa l un de r

Ru le 12 (b )(6 ).” C.H. Ro bi ns on Wo rl dw id e, In c. v. Lob ra no , 69 5 F.3 d 75 8, 76 4 (8 th

Ci r. 20 12 ) (al te rat io ns in or ig in al ); se e al so Jo nes v. Bo ck

, 54 9 U.S. 19 9, 21 5 (2 00 7)

.

ABF’s fai lu re t o e x h a u s t is ap pa ren t on th e face of it s Am en de d Co m pl ai nt

. ABF’s gr ie va nc e was fil ed th e sa m e da y as th is su it

. The Am en de d Co m pl ai nt sa y s,

“ The ABF Gri ev an ce se eks a de cl arat io n th at th e NMFA Am en dm en ts No. 1, No. 2

an d No. 3 be set as id e.” (em ph as is ad de d)

. Res po nd in g to th e de fen da nt s’ m ot io ns

to di sm is s, ABF st at ed th at it “ ha s p u r s u e d an d is pu rs ui ng th e gr ie va nc e pr oc es s,”

an d th at it “ in vo ke d th os e pr oc ed ur es by fil in g a gr ie va nc e an d st an ds re ad y to pu rs ue

th em .” (em

ph as es ad de d)

. Bec au se th e gr ie va nc e pr oc es s was in it ia te d th e sa m e da y

as th e Co m

pl ai nt an d was on go in g d ur in g t he su it , it co ul d on ly b e ex ha us te d i f th e

pr oc es s were un av ai la bl e or fu ti le

. ABF al le ge d in it s Am en de d Co m pl ai nt “ th at th e

req ui si te tri bu na ls can no t be co ns ti tu te d as req ui red un de r th e Grie va nc e Ru le s.” Bu t

it was ap pa ren t on th e face of th e co m pl ai nt th at th e NGC was em po wered to am en d

or m od ify it s ru le s be cau se th e ru le so st at in g was at ta ch ed to th e Am en de d

Co m pl ai nt

. Se e C.H. Ro bi ns on , 69 5 F.3 d at 76 4 (th e ph ras e “ face of th e co m pl ai nt ”

in cl ud es m at eri al s at ta ch ed to th e co m pl ai nt ). Thi s co ur t m

us t acce pt ABF’s fact ua l

al le ga ti on s, bu t no t it s le ga l co nc lu si on s. Se e As hcr of t

, 55 6 U.S. at 67 8. Bec au se th e

NGC’s ab il it y to am en d or m od ify th e ru le s m ean s th e gr ie va nc e res ol ut io n pro ces s

is no t un av ai la bl e or fu ti le

, th e face of th e co m pl ai nt in di cat es th at th e pr oc es s is no t

un av ai la bl e o r fu ti le

.

C.

Acco rd in g to ABF, “ Defen da nt s waiv ed th ei r rig ht to as se rt th e gr ie va nc e

p r o c e s s as a de fen se by act iv el y an d su bs ta nt ia ll y pa rti ci pa ti ng in li ti ga ti on .” Th i s

co ur t rev ie ws th e qu es ti on of waiv er de no vo

. Wo ot te n v. Fi sh er In v., In c. , 68 8 F.3 d

-1 1-48 7, 49 2 (8 th Ci r. 20 12 ). To pr ov e th e de fen da nt s waiv ed th ei r rig ht to th e pr oc es s,

A B F mu s t sh ow: (1 ) th e de fen da nt s kn ew of th e rig ht to it ; (2 ) th ey act ed

in co ns is te nt ly wit h th at rig ht ; an d (3 ) th ei r in co ns is te nt act s pr ejud ic ed ABF. Se e id

.
at 49 2- 93

. “ [I]n lig ht of th e st ro ng fed eral po li cy in fav or of arb it rat io n, an y do ub ts

c o n c ern in g waiv er of arb it rab il it y sh ou ld be res ol ve d in fav or of arb it rat i o n

. ”

Lewa ll en v. G r e e n Tree Ser v’g

, LLC

, 48 7 F.3 d 10 85

, 10 90 (8 th Ci r. 20 07 ). Se e

ge ne ra ll y Nich ol as v. KBR , I

nc. , 5 65 F.3 d 90 4, 90 7 (5 th Ci r. 20 09 ); Unit e d S t at es

v. Par k Pl

ac e As so c., Ltd

. , 56 3 F .3d 90 7, 9 21 (9t h C ir. 2 00 9) . It i s u nd is pu te d th at

al l p art ie s k ne w of t he gri ev an ce p ro ces s.

“ A pa rty act s in co ns is te nt ly wit h it s rig ht to arb it rat e if th e pa rty su bs ta nt ia ll y

in vo ke s th e li ti ga ti on m ach in ery be fo re as se rti ng it s arb it rat io n rig ht .” So ut hea st er n

St ud & Co m

po nent s, In c. v. Am

. Ea

gl e Des ig n Bui ld St ud

io s, LLC

, 58 8 F.3d 96 3,

96 8 (8 th Ci r. 20 09 ) (in te rn al qu ot at io n m ark s an d al te ra t i o n s o m it te d)

. “ A pa rty

su bs ta nt ia ll y in vo ke s th e li ti ga ti on m ach in ery whe n, fo r ex am pl e, it fil es a la wsu it on

arb it rab le cl ai m s, en ga ge s in e x t e n s i v e di sc ov ery, or fai ls to m ov e to co m pe l

arb it rat io n an d st ay li ti ga ti on in a ti m el y m an ne r.” Id

. “To s a f

e g u a r d it s rig ht to

arb it rat io n, a pa rty m

us t ‘do al l it co ul d reas on ab ly ha ve be en ex pe ct ed to do to m ak e

th e earl ie st feas ib le de te rm in at io n of whe th er to pr oc eed jud ic ia ll y or by ar bit ra tio n. ’ ”

Lewa ll en , 48 7 F.3 d at 10 91

, qu ot in g Ca bi net re e of Wi

s. , I n c

. , v. Kr af

tm ai d

Ca bi net ry , Inc

. , 50 F.3d 38 8, 3 91 (7t h C ir. 1 99 5)

.

In Rit ze l Co mmun ic at io ns
, In c. v. Mid -Amer ic an Cel lu la r Tel ep ho ne Co

. , 98 9

F.2 d 96 6, 96 9 (8 th Ci r. 19 93 ), th is co ur t fo un d su bs ta nt ia l in vo cat io n of th e li ti ga ti on

m ach in ery aft er th ird -p art y de fen da n ts m ov ed to di sm is s th e cas e. Bu t, th os e

de fen da nt s di d m

uc h m or e th an jus t m ov e to di sm is s: th ey act ua ll y tri ed th e cas e in

di st ric t co ur t whi le th ei r ap pe al of it s d e ni al of a m ot io n- to -s ta y -li ti ga ti on -an dco m pe l-a rb i t rat io n was pe nd in g (in pa rt be cau se of th ei r rep eat ed req ue st s fo r

ex te ns io ns ). Id

. at 96 8. “ By fai li ng to req ue st a st ay in th i s c o u r t o r t o m ov e to

ex pe di te th e ap pe al an d b y de la y in g t he pro ces s o f ap pe al so th at or al arg um en t di d

-1 2-no t oc cu r un ti l aft er th e tri al on th e m eri ts in th e di st ric t co ur t, th e gr ou p sq ua nd ered

th e eco no m ie s of arb it rat io n an d ga ve th e ap pe aran ce of ha vi ng no si nc ere in te res t in

av oi di ng li ti ga ti on of th e di sp ut e.” Id

. at 97 0. The “ who le pu rp os e of th e arb it rat io n

cl au se ” was de feat ed

. Id

. at 97 0. Here, th ere was no tri al on th e m eri ts

. The re was

no sq ua nd eri ng of th e eco no m ie s of th e gr ie va nc e pr oc es s be cau se th e cas e was ab ou t

th e th res ho ld is su e whe th er ABF h ad a ri gh t t o i t.

In Hoo pe r v. Adv an ce Ameri ca
, Ca sh Adv an ce Cen te rs of Mis so ur i, In c. , 58 9

F.3 d 91 7, 91 9- 21 (8 th Ci r. 20 09 ), th is co ur t he ld th at a m ot io n to di sm is s un de r Ru le s

12 (b )(1 ) an d 1 2( b) (6 ) su bs ta nt ia ll y in vo ke d t he li ti ga ti on m ach in ery:

Adv an ce Am eri ca’s m ot io n to di sm is s was ex te ns iv e a n d ex ha us ti ve ,

an d su bs ta nt ia ll y in vo ke d t h e l it ig at io n m ach in ery. Adv an ce Am eri ca dr ew th e di st ric t co ur t’s at te nt io n to m ul ti pl e m at te rs of fir st im

pr es si on ,
as se rte d Pl ai nt iff

s fai le d to st at e cl ai ms u po n whi ch rel ie f co ul d be

gr an te d, an d en co ur ag ed th e di st ric t co ur t to res ol ve th e p art ie s’ ent ire
di sp ut e in Adv an ce Am eri ca’s fav or

. In ot he r wor ds

, Adv an ce Am eri ca

so ug ht a fin al de ci si on fro m th e di st ric t co ur t up on th e m eri ts of th e

pa rti es ’ di sp ut e, ev en th ou gh a req ue st to di sp os e of a cas e on th e m eri ts be fo re reac hi ng arb it rat io n is in c o n si st en t wit h res ol vi ng th e cas e th ro ug h a rb it rat io n.

Id

. at 92 1 (in te rn al qu ot at io n m ark s an d ci ta ti on s om it te d)

. Bu t, “ [n ]ot ev ery m ot io n

to di sm is s is in co ns is te nt wit h th e rig ht to arb it rat io n. Mo t i o n s to di sm is s are no t

h o mo g en eo us

. Dis tri ct co ur ts sh ou ld co nt in ue to co ns id er th e to ta li ty of t h e

ci rc u m st an ces .” Id

. at 92 2 (in te rn al ci ta ti on s om it te d) ; se e al so Ri tz el

, 98 9 F.2 d at

97 1 (“ W he th er t he re i s wai ve r de pe nd s o n t he pa rti cu la r fac ts be fo re u s.”)

.

Hoo pe r li st s Sw ea te r Bee by Ban ff

, Lt d. v. Man ha tt an In du s., In c

. , 75 4 F.2 d

45 7, 46 3 (2 d Ci r. 19 85 )

, as a cas e whe re a m ot io n to di sm is s was no t in co ns is te nt

wit h th e rig ht to arb it rat io n. Ho op er , 58 9 F.3 d at 92 2 Thi s co ur t de sc rib ed th at cas e

as “ reco gn iz in g a m ot io n to di sm is s may be ne ces sa ry to so rt ou t arb it rab le an d

-1 3-no n a r b i t r a bl e cl ai m s.” Id

. Tho ug h m os t of th e cl ai m s th e de fen da nt m ov ed to

di sm is s in Sw ea te r Bee were no n- arb it rab le

, at le as t on e (al be it fri vo lo us ) arb it rab le

cl ai m was d is m is se d a s a res ul t of the m ot io n. Swea te r B ee , 75 4 F .2d at 4 63 . That

co ur t he ld th at th ere was no waiv er de sp i te th e fact th at di sm is sa l of th e arb it rab le

cl ai m was a “ ru li ng on th e m eri ts .” Id

. Si m il arl y , th e de fen da nt s he re di d no t waiv e

th e arg um en t of ex ha us ti on in co nt es ti ng A B F ’s st an di ng be cau se th at co nt es t

ad dr es se d whe th er ABF ha d rig h t s un de r th e NMFA. If it di d no t, th ere was no

pr oc es s t o e xh au st

.

Thi s cas e is si m il ar to Dumo nt v. Sa sk at ch ewa n Gov er nme nt In su ra nc e , 25 8

F.3 d 88 0 (8t h Cir. 20 01 ). The re, the fam il ie s of aut om ob il e cras h vi ct im s su ed SGI

in st at e co ur t. Id

. at 88 3. SGI rem ov ed th e cas e to fed eral co ur t, an swe red a m ot io n

fo r pa rti al su m

m ary jud gm en t, an d m ov ed to di sm is s fo r la ck of pe rs on al juri sd ic ti on

an d fo ru m no n c o n v e n i e n s

. Id

. at 88 3- 84

. The di st ric t co ur t de ni ed al l m ot io ns ,

or de rin g bi nd in g arb it rat io n in acco rd an ce wit h th e in su r an ce po li ci es

. Id

. at 88 4.

The fam il ie s ar gu ed th at SGI wai ve d i ts rig ht to en fo rce th e arb it rat io n pr ov is io ns

. Id

. at 88 6. A f

f i r mi ng th e di st ric t co ur t’s fin di ng of no waiv er, th is co ur t ex pl ai ne d

th at “ SGI to ok no act io n wit h res pe ct to th e m eri ts of th e cas e pr io r to th e di st ric t

co ur t or de rin g arb it rat io n. R a th er, SGI so ug ht earl y di sm is sa l of th e cas e on juri sd ic ti on al an d q ua si -juri sd ic ti on al gro un ds .” Id

. at 8 86 -8 7.

ABF cl ai m s th at Dumo nt is in ap pl ic ab le be cau se on th ei r in it ia l ap pe al

, th es e

de fen da nt s as ke d th is c ou rt to affi rm un de r Ru le 12 (b )(6 ) if it de te rm in ed th at th e

qu es ti on was on e of m eri ts

, whi le in Dumo n t

, th e de fen da nt “ to ok no act io n wit h

res pe ct to th e m eri ts .” Id

. at 88 6; se e Fed

er at ed D e p ’t St or es , In c. v. Mo it

ie

, 45 2

U.S. 39 4, 39 9 n.3 (1 98 1) (d is m is sa l un de r Ru le 12 (b )(6 ) is a jud gm en t on th e m eri ts ).

Seek in g a de ci si on o n t h e mer it s do es no t ne ces sa ril y de no te waiv er. Se e Ho op er , 58 9 F.3 d at 92 2, ci ti ng Sha ri f v. Wel ln es s In t’l Netw or k, Ltd

. , 37 6 F.3 d 72 0, 72 6- 27
(7 th Ci r. 20 04 ) (fi nd in g no waiv er by a pa rty th at ha d fil ed a Ru le 12 (b )(6 ) m ot io n)

, R u s h v. Opp enhe im er & Co

. , 77 9 F.2 d 88 5, 88 6- 88 (2 d Ci r. 19 85 ) (s am e), a n d

-1 4-Swea te r Bee

, 75 4 F.2 d at 46 3 (f i n d i n g n o waiv er whe re di sm is sa l of an arb it rab le

cl ai m was a “ ru li ng on th e m eri ts ”). Tho ug h th is co ur t in th e pr ev io us ap pe al st at ed

th at th e di st ric t co ur t’s di sm is sa l erro ne ou sl y de ci de d “ th e m eri ts ,” th os e m eri ts

co nc ern ed st an di ng , no t th e act ua l gr ie va nc e. Se e ABF Fr ei gh t Sys
., In c. , 64 5 F.3 d

a t 96 0. The qu es ti on of co nt ract fo rm at io n an d st an di ng req ui red jud ic ia l

de te rm in at io n be fo re ABF ne ed ed to br in g it s gr ie va nc e th ro ug h th e gr ie va nc e

p r oc es s. Se e In te rn at io na l As s’ n of Br id

ge , St ru ct ur al
, Orna m ent

al a n d

Rei n f o r c i n g Ir on wo rk er

s, Loc al 49 3 v. EFC O Co rp

. & Co ns tr

. Pro ds
., In c. , 35 9

F.3 d 95 4, 95 6 (8 th Ci r. 20 04 ) (“ whe th er th e pa rti es ha ve a va li d arb it rat io n ag reem en t

th at bi nd s th em

is a qu es ti on for

jud ic ia l d et erm in at io n” ), ci ti ng Fi rs t Op ti on s , 5 14

U.S. at 94 3- 46 (1 99 5)

. Eve n th e de fen da nt s’ Ru le 12 (b )(6 ) arg u men t s were on ly

ab ou t whe th er AB F w as a pa rty to th e NMFA. Loo ki ng at th e to ta li ty of th e

ci rcu m st an ces , th e de fen da nt s’ arg um en t th at ABF was no t a pa rty to th e NMFA was

no t in co ns is te nt wit h arg ui ng th at if ABF were a pa rty, it s co m pl ai nt sh ou ld be

di sm is se d fo r fai lu re t o e xh au st

.

The pa rti es ex te ns iv el y di sc us s a Fi fth Ci rcu it cas e, Gen er al G u a r an ty

In su ra nc e Co

. v. New Orl ea ns Gen er al Age nc y, In c. , 42 7 F.2d 92 4 (5 th Ci r. 19 70 ).

It ex pl ai ns , “ The pr op rie ty an d de si rab il it y of ha vi ng an in it ia l jud ic ia l de te rm in at io n

of whe th er an arb it rat io n co nt ract ex is ts is well reco gn iz ed .” Id

. at 92 8. In Gen er al

Gua ra nt y , NOGA arg ue d th at th e co nt ract at is su e, in cl ud in g an ar b it rat io n cl au se , ha d be en ab an do ne d. Id

. at 92 6. The Fi fth Ci rcu it he ld th at in so arg ui ng , NOGA di d

no t wai ve arb it rat io n:

GIC’s im pl ic it po si ti on is th is : be cau se th e is su e of ab an do nm en t wou ld
de te rm in e no t on ly th e ex is te nc e of an arb it rat io n ag reem en t bu t a l so

e ffec tu al ly de te rm in e a de fen se of NOGA an d th e in de m ni to r s o n t h e

m eri ts

, NOGA ha d to m ak e an el ect io n – it co ul d ad m it th e co nt ract was in effe ct an d cal l fo r arb it rat io n, or de ny th e vi ab il it y of th e co nt ract an d
de fen d i n c ou rt. No su ch ele ct io n was req ui red

.

. . .

-1 5-A de fen da nt can waiv e arb i t r a t io n by act io ns whi ch it ta ke s du rin g

de te rm in at io n in th e le ga l fo ru m of th e th r e s h o l d is su e of ex is te nc e of

an arb it rat io n co nt ract

, if th os e act io ns are su ffi ci en tl y in co ns is te nt wit h
th e rig ht to arb it rat e. Bu t it lo se s si gh t of th e pu rp os es an d effe ct s of
arb it rat io n, an d of th e de si rab il it y of th e in it ia l jud ic i a l d e t e rm in at io n,
to tre at th e co ur t pr oc eed in gs as a so rt of jud ic ia l ti gh tro pe whi ch th e

pa rty seek in g a rb it rat io n wal ks at h is pe ril

.

Id

. at 9 29 . True, t he fact s i n Gen er al Gua ra nt y di ffer fro m th os e he re in th at when

NOGA m ov ed fo r su m

m ary jud gm en t, it m ov ed in th e al te rn at iv e fo r a st ay pe nd in g

arb it rat io n. I

d

. a t 9 26

. ABF co nt en ds th at NOGA’ s si m ul ta ne ou s as se rti on of

arb it rat io n rig h t s p rev en te d waiv er. Bu t, th e Fi fth Ci rcu it ex pl ai ne d th at pr e-s ui t

de m an d fo r arb it rat io n was no t ne ces sa ry to pr ev en t waiv er an d in fact co ul d su bjec t

a de fen da nt li ke NOGA “ to th e ris k of a ch arg e by th e ot he r pa rty th at by de m an di ng

arb it rat io n it ha s reco gn iz ed th e co nt in ue d ex is te nc e of th e co nt r a c t c l a i m ed to be

a b a n d o n ed .” Id

. at 92 8. It th us co nc lu de d th at “ NOGA di d no t lo se it s rig ht s t o

arb it rat io n by pl ead in g al te rn at iv el y th at th e co nt ract ha d be en ab an do ne d an d th at

co ur t p ro ceed in gs sh ou ld be st ay ed pe nd in g arb it rat io n.” Id

. at 92 8 (em

ph as is

ad de d)

.

No el ect io n be twee n pu rs ui ng th e gr ie va nc e pr oc es s or de fen di ng in co ur t was

req ui red he re, ei th er. The de fen da nt s’ in it ia l m ot io ns to di sm is s di d no t su bs ta nt ia ll y

in vo ke th e li ti ga ti on m ach in ery, an d th eref or e di d no t waiv e th e rig ht to th e gr ie va nc e

pr oc es s. The de fen da nt s di d no t fil e th e la wsu it or en g a g e i n e xt en si ve di sc ov ery.

Se e So ut hea st er n St ud & Co m

po nent s, In c. , 58 8 F.3 d at 96 8. The y di d no t se ek to

se rv e di sc ov ery req ue st s aft er th e ad ve rs a ry pr oc eed in g co m m en ced

, or m ov e to

c o n t i n u e t he cas e. Se e Lewa ll en , 48 7 F.3 d at 10 91

, 10 93

. The y di d no t pr e s e n t

“ m ul ti pl e m at te rs of fir st im pr es si on .” Se e Ho op er , 58 9 F.3 d at 92 1. Th i s is no t a

cas e whe re “ a pa rty act iv el y li ti ga te s a cas e fo r an ex te nd ed pe rio d on ly to be la te dl y

as se rt t ha t t he di sp ut e sh ou ld ha ve be en arb it rat ed , n ot li ti ga te d, i n t he fir st pl ace.”

Nino v. Je wel

ry Ex ch., In c. , 60 9 F.3 d 19 1, 20 9 (3 d Ci r. 20 10 ). The li ti ga ti on at is su e

-1 6-he re was no t an al te rn at iv e to th e gr ie va nc e pr oc es s; it was to de te rm in e whe th er ABF

m us t u se th e p ro ces s.

ABF po in ts ou t th at th e de fen da nt s “ di d no t as k th e d i s t r i c t c ou rt to st ay or

di sm is s ABF’s la wsu it pe nd in g res ol ut io n of th e gr ie va nc e pr oc eed in g.” Th a t was

ap pr op ria te , s in ce th ey co nt en de d ABF was no t a pa rty t o th e NMFA an d th eref or e

ha d no acce ss to th e gr ie va nc e pr oc es s. The f act th at a y ear pa ss ed be fo re th e

de fen da nt s rai se d th e ex ha us ti on is su e do es no t ch an ge th e fact th at th ey were do in g

“ al l [th ey ] co ul d reas o na bl y ha ve be en ex pe ct ed to do to m ak e th e earl ie st feas ib le

de te rm in at io n of whe th er to pr oc eed jud ic ia ll y or by arb it rat io n.” Lewa ll en , 48 7 F.3 d

at 10 91

, qu ot in g Ca bi net re e , 50 F.3d at 3 91

.

ABF ad ds th at “ YRC h as waiv ed it s rig ht fo r th e ad di ti on al reas on th at it ha s

ta ke n in co ns is te nt an d co nf us in g le ga l po si ti on s reg ard in g th e en fo rcea bi li ty o f th e

co nt ract

, be la te dl y in vo ki ng th e NMFA gr ie va nc e pr oc es s as a d e f e ns e in th is

li ti ga t i o n w h i l e al so in si st in g th at it ha s no ag reem en t (an d th us no gr ie va nc e

mec h a ni sm wit h ABF).” To th e co nt rary, YRC’s al te rn at iv e po si ti on s are no t

co nf us in g. As YRC sa y s, “ YRC is no t su dd en ly ag reei ng th at ABF is a pa rty to th e NMFA, as ABF co nt en ds

. Rat he r, YRC is acce pt in g fo r pu rp os es of a m ot io n to

di sm is s ABF’s al le

ga ti on th at ABF is a p a r t y to th e sa m e co ll ect iv e ba rg ai ni ng

ag reem en t as YRC (al be it no ti ng cl earl y th at YRC dis ag rees wit h th e al le ga ti on ).”

Bec au se th e de fen da nt s di d no t act in co ns is te nt ly wit h th e rig ht to th e

gr ie va nc e pr oc es s, t h i s c o u r t ne ed no t co ns id er th e el em en t of pr ejud ic e. Se e

Dum on t , 25 8 F .3d at 8 87

.

V.

The de ci si on of t he di st ric t co ur t i s af fir m ed

.

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-1 7-