FOR PUBLICATION



### UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

C O LUMB I A E XP O R

T T E R M I N AL , LLC, Plaintiff-Appellant
,

v

.

I N T E R N A T I ON AL L ON G S H O R

E A ND WA R E H O U S E U

N I ON ; K A NE A HU N A , an individual; J A S ON A ND R E W S , an individual; J E S U S A R A N G O , an individual; M I K

E A Y E R S , an individual; B R

I A N B A N T A , an individual; K E

N B A N T A , an individual; K E I T H B A N T A , an individual; A ND R

E B AR B E R , an individual; C R

Y S T AL B AR

N E S , an individual; C R

AI G B I T Z , an individual; L I S A B L A N C H AR D , an individual; R A

ND Y B O O K

E R , an individual; B R

A D B O YD , an individual; L AR

R Y B RO AD I E , an individual; F E L I X B R O W N , an individual; J I MM

Y B RO W N , an individual; J ON B UD I S E L I C , an individual; W I L L I AM B UR R I S , an individual; D O U GL A S C AR E Y , an individual; G R

E G C AR S E , an individual; Anthony Cerrutti, an individual; H U GH C O L S ON , an individual; T I M C O P P , an individual; No. 20-35037

D.C. No. 3:18-cv-02177- JR

OPINIONC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 2

E. C O T UR

E N , an individual; S T E V E N C O X , an individual; R Y A N C R A N S T ON , an individual; J AM E S D AW , an individual; A D AM D A Y , an individual; J AM E S D E GM A N , an individual; T O R

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E N C E D O D S ON , an individual; G AR

Y D O T S ON , an individual; O L I V E R E D E , an individual; R A

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I S E UB A NK S , an individual; D A

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. ILWU 3

individual; A N T H ON

Y J E F F R I E S , an individual; K E V I

N J O H N S ON , an individual; P A T J O H

N S ON , an individual; T E R

R Y J O H N S ON , an individual; T I M J ON E S , an individual; J ON JUL I A

N , an individual; L E RO Y K AD O W , an individual; G E O RG E KE L L Y , an individual; E R I C K I N G , an individual; W A

Y N E K I N G , Esquire, an individual; K E V I

N K N O T H , an individual; K E

N N E T H K Y T L E , an individual; M I K

E L A C HAP E L L E , an individual; J I MM

Y L A I , an individual; T O M L A N GM A N , an individual; T Y L E R L A

U T E N S C H L A G E R , an individual; J A C K L E E , an individual; KE N L E E , an individual; D A N L E S S AR D , an individual; S HA N T I L E W AL L E N , an individual; D A

N N Y L O K E , an individual; T H O M A S L O V E , an individual; W I L F R E D L U C H , an individual; K AR

L L U ND E , an individual; C R

AI G M A G O ON , an individual; M I K

E M A H E R , an individual; J A S ON M AL A C H I , an individual; L E V I M A

N N I N G , an individual; R I C K

I E M A N N I N G , an individual; J A

Y M A N T E I , an individual; P A T M ARON A Y , an individual; A. M AR

T I N , an individual; G AR

R Y M A T S ON , an individual; P A T M C C L A I N , an individual; M. M C M AH O N , anC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 4

individual; M I K

E M C M UR

T R E Y , an individual; D ON

AL D M E H

N E R , an individual; C UR

T I S M EUL E R , an individual; K AR

L M I N I C H , an individual; J O S H M O R R I S , an individual; J O H

N M UL C AHY , an individual; T O M N E I T L I N G , an individual; M AR

T I N N E L S ON , an individual; G R

E G N E M YR E , an individual; R I A

N N E S T L E

N , an individual; C H R

I S O V E R B Y , an individual; K E

N O V I A T T , an individual; T H O M

A S O WE N S , an individual; J O H

N P EAK , an individual; Shane Pederson, an individual; J E F F P E R

R Y , an individual; J O H

N P E R R Y , an individual; A R

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N , an individual; T E R

R Y P L A YE R , an individual; J AM E S P O P HAM , an individual; D A

V I D P O R T E R , an individual; M I K

E R AP A C Z , an individual; J O H

N R I N T A , an individual; W I L L I AM R O B E R T S , an individual; J O S E P H R O B I N S ON , an individual; M AR

K R O B I N S ON , an individual; C H R

I S S C H E F F E L , an individual; T H E O D O R E S C HU H , an individual; M I K

E S E X T ON , an individual; M AR

K S I E G E L , an individual; C O UR

T N EY S MI T H , an individual; J E F F S M I T H , an individual; M I K

E S M I T H , anC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 5

individual; S C O T T S T E I N , an individual; D ON

AL D S T YK

E L , an individual; M I K

E S UH R , an individual; L E AL S U

ND E T , an individual; L AW

R E N C E T H I B E D E A

U , an individual; M AR

K T H O R S F E L D T , an individual; S HAW

N T H O R S TAD , an individual; J AM E S T H O R U D , an individual; D A

V I D T R A C H S E L , an individual; W I L L I AM U ND E R W O O D , an individual; J A S ON V A N C E , an individual; D A

V I D V AR

N ON , an individual; P A

N V A R N ON , an individual; M I K

E WAL K E R , Esquire, Attorney, an individual; D W A Y N E WA M S H E R ; E U G E

N E W E B B , an individual; M I K

E W E HA G E , an individual; K E V I

N W E L D ON , an individual; S P E

N C E R W H I T E , an individual; R I C HAR

D W I D L E , an individual; N UR

AL W I L L I S , an individual; R ON

AL D W O O D S , an individual; M AR

K W R I GH T , an individual; C ARO L WUR D I N G E R , an individual; J E R

R Y Y L ON E

N , an individual; P. Y O C I T I M , an individual; R I C HAR

D Z A T T E R

B E RG , an individual; F R

E D Z O S K

E , an individual; J AM E S C O T H R E N , an individual; B O B B Y C R A N S T ON , an individual; T E R

E K J O H N S ON , an individual; A N G E L A M AR T I N , Esquire, an individual; P A T R I C KC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 6

M C C LA I

N , an individual; M A T T H E W M C M AH ON , an individual; S HA N N P E D E R S ON , an individual; M I C HA E L S E X T O N , an individual; J E F F R E Y S M I T H , an individual; L A UR E N C E T HUB E D E A

U , an individual; P A

UL Y O C H I M , an individual,

Defendants-Appellees

.

Appeal from

the United States District Court for the District of Oregon Michael H. Sim on, District Judge, Presiding

Argued and Subm itted October 26, 2020

Portland, Oregon

Filed June 28, 2021

Before: Susan P. Graber, Richard R. Clifton, and Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Clifton; Dissent by Judge IkutaC O LUMB I A E X P O R T T E R M I N AL V

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SUMMARY *

RICO / Labor Law

The panel affirm ed the district court’s dism issal of an action brought by Colum bia Expor t Te r m inal under the Racketeer Influenced and Corrupt Organizations Act against the International Longshore and W arehouse Union and individual union workers.

The panel concluded that Colum b ia Export Term inal’s RICO claim s alleging overbilling via fraudulen t tim esheets required interpretation of the collective barg ain i n g agreem ent (“CBA”) under which the workers were em ployed, and t h e CBA provided a p ro c e s s for arbitration of disputes. The panel concluded that the CBA’s arbitration provision applied to the R ICO claim s. A ccordingly, § 301 o f the Labor M anagem ent Relations Act precluded adjudication of the RICO claim s before the arbitration pro cess was exhausted.

The panel agreed w ith the district court that H ubbard v. United Airlines, Inc.
, 927 F.2d 109 4 ( 9 t h Cir. 1991),

rem ained good law, and the panel found persua sive Hubbard ’s holding that the Railway Labor Act preem pted a fraud claimunder RICO. The panel held that a RICO claim is precluded by § 301 of the LMRA when the right or duty upon which the claim is ba s e d is created by a C BA o r resolution of the claim substantially d epends on analysis o f a CBA.

* This summ ary constitutes no part of the opinion of the court. It h as been prepared by court staff for the convenience of the reader.C O LUMB I A E X P O R T T E R M I N AL V

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Dissenting, Judge Ikuta wr ote that the m ajority erred in holding that any federal claim that is related to a CBA is preem pted o r p r e c lu ded by § 301 of LMRA and m ust autom aticall y b e dism issed b y the d istrict court and sent for arbitration. The m ajority also erred i n applying a presum ption of arbitrability and in determ ining that the CBA’s arbitration p rovision encom passed the RICO claim s at issue.

C OUNSEL

Christ o p her F. McCracken (argued) and Jacqueline M. Damm , Ogletree Deakins N ash Sm oak & Stewart P.C.
, Portland, Oregon; T hom as A. Lidbury, Ogletree Deak i n s Nash S m oak & Stewart P.C., Chicago, Illinois; for PlaintiffAppellant.

Da r in M. Dalm at (argued) and Robert H. Lavitt, Barnard Iglitzin & Lavitt LLP, Seattle, W ashington, for DefendantsAppellees.C O LUMB I A E X P O R T T E R M I N AL V

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OPINION

CLIFTON, Circuit Judge:

Col u mb i a Export Term inal (“CET”) brought an action

u nd er the Racketeer Influenced and Corrupt Organization s Act (“RICO”) agai nst the International Longshore and W arehouse Un i o n (“ILWU”) and 154 individual ILWU workers em

ployed b y CET. The d istrict court concluded that CET’s RICO claim s could n o t properly proceed in court at this tim e and dism issed the case wi t h out prejudice. It reasoned that t h e claim s required interpretation of the collective bargaining a g re em ent (“CBA”) under which the workers w ere em

ployed, that the CBA provided a process for arbitration o f disputes, and that the La b or Managem ent Relations Act (“LMRA”) precluded court adjudication of the RICO claim s before the arbitration process h a d been exhausted. CET appeals the dism issal.

W e previously reached a conclusion sim ilar to that reached by the district court reg a r di n g a labor contract go v erned by the Railway Labor Act (“RLA”). Hubbard v. United Airlines, Inc.
, 927 F.2d 1094 (9th C ir. 1991). The district court relied on that precedent, rejecting an argum ent by CET that Hubbard had been overruled. W e agree with the district court that H

ubbard rem ains alive and persuasive. Our

con c l u sion that the sam e result is required for a contract governed by the LMRA is a logical extension of our precedents. W e take that step here and affirm the judgm ent o f the district court.C O LUMB I A E X P O R T T E R M I N AL V

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I. Background

CET operates a grain export term inal in the P ort o f Portland and e m

ploys workers who are m em bers of the ILWU

. CET alleges that the ILWU and the 154 nam ed individu al defendants conspired to fraudulently furnish tim esheets reporting hours that were not actually worked and, as a result, overbilled CET by m ore than $5.3 m illion.

CET filed this action alleging seven claim s under RICO, 18 U.S.C. §§ 1961–68. In response, the ILWU filed a m otion to dism iss contending, am ong other things, that CET’s claim s

were preem

pted under § 301 of the LMRA, 29 U.S.C. § 185, because resolution of the claim s required interpretation of the underlying C BA, w hich requires exhaus t ion of the ag reem e n t’s grievance p rocedures. The indiv id u al d ef en d ants joined the union’s m otion. The district court agreed with the ILWU and dism issed the case without p rejudi ce. CET appeals.

II. Discussion

The central dispute on appeal is w hether CET’s claim s, which it styled as RICO claim s, are preem pted or precluded by § 301 o f the LMRA. W e review the d istrict cour t’s interpretation of the statutes de novo

. Alaska Airlines Inc. v. Schurke , 898 F.3d 904, 916 (9th Cir. 2018) (en banc).

A. The tw o -step preclusion andpreemption under L MRA § 301.

The L MR A
, so m etim es d escrib ed as the Taft-Hartley Act,

was enacted in 1947 to “prom ote the full flow of comm erce” by “provid[ing] orderly and peaceful procedures forC O LUMB I A E X P O R T T E R M I N AL V

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preventing [] interference by [em ployees or em

ployers] with the legitim ate rights of the other.” 29 U.S.C. §141(b). To that end, LMRA § 301(a) provides that “[s]uits for viola tion o f

con t r acts between an em

ployer and a labor organization

. . . m ay be brought in any district court.” 29 U.S.C. § 185(a).

On its face, § 301 reads as a jur is di c t i o nal statute, and it “contains n o express language of preem ption, [b u t ] the Suprem e Court has long interprete d the [provision] as authorizing f

ederal courts to create a uniform body of federal

co mmo n law to adjudicate disputes that arise out of labor contracts.” Curtis v. Irwin Indus., Inc.
, 913 F.3d 1146, 1151 (9th Cir. 2019); Textile Workers Union v. Li n coln Mills
, 353 U.S. 448, 450–51, 457 (1957).

Consiste nt with this purpose, the Suprem e Court concluded that § 301 im

pliedly p reem

pted state law in order
t o g i v e effect to the congressional intent that “doctrines of federal labor law uniform ly [] prevail over inconsistent local rules.” Teamsters v. Lucas F lour Co.
, 369 U .S. 9 5, 104 (1962). Therefore, any “union agreem ent m ade pursuant to [a federa l l ab o r law] has [] the im prim atur of the federal law upon it and, by force of the Suprem acy Clause of Article VI of the C o nstitution, could not be [] vitiated by any provision of the laws of a State.” Californ ia v. Taylor
, 353 U .S. 553, 561 (1957) (quoting Ry. Emp. Dept. v. Hanson
, 351 U.S. 225, 232 (1956)).

Federal courts have dev e l o p e d comm on law to govern labor disputes and h ave concluded that a “central tenet of federal labor-contract law under § 301 [is that] the arbitrator, not the court, [] has the responsibility to interp r e t t he labor contract in the first instance.” Allis-Chalmers Corp. v. Lueck
, 471 U.S. 202, 220 (1985). As we explained in A laska AirlinesC O LUMB I A E X P O R T T E R M I N AL V

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and reiterated l a s t y e ar in Curtis
, preserving the role of the CBA’s grievance process is im portant for three reasons:

First, a [CBA] is m or e than just a contract; it is an effort to erect a system o f industrial selfgov er n ment. Thus, a CBA is part of the continuous collective barg aining process. Second, b e cause the CBA is designed to g o vern the entire em

ploym ent relationship, including disputes which the drafters m ay not h a v e anticipated, it calls into being a new

comm on law—th e comm on law o f a particular industry or of a parti c u l ar plant. Accordingly, the labor arbitrator is usually the appropriate a djudicator for CBA disputes becau s e he was chosen due to the parties’ confidence in his knowledge of t h e comm on law of the shop and their trust in his personal judgm ent to b r ing to bear considerations which are no t expressed in the contract as criteria for judgm ent. Third, grievance and

a r b i t r a t i o n p r o c e d u r e s p r o v i d e c e r t a i n procedural b enefits, including a m ore prom pt and orderly settlem ent o f C BA disputes than that offered by the ordinary judicial process.

Curtis
, 913 F.3d at 1152 (internal quotatio n ma rks and citations om itted).

For m ore than sixty years, the Sup r e m e Court has interpreted § 301 to require the spec i fic perform ance o f prom ises to arbitrate grievances in collecti v e bargaining agreem ents. Textile Workers , 353 U.S. at 451.C O LUMB I A E X P O R T T E R M I N AL V

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W e have thus applied the preem ptive effect of § 301 to all “state law claim s grounded in t h e p r o v isions of a CBA o r requiring interpretation of a CBA.” Kobold v. Good Samaritan Reg’l Med. Ctr.
, 8 32 F.3d 1024, 1 0 3 2 (9 th Cir. 2016). W e have distilled the relevant S uprem e Co u r t cases into a two-part test:

The essential inquiry is this: [1] Does the claimseek p urely to vindicate a right or duty created by the CBA it s e l f? If so, then the cla i m i s preem

pted, and the analysis ends there.

[2] But if not, we proc e e d t o the second step and ask whether a plaintiff’s state law right is substantially dependent on analysis o f the CBA, which turns o n w hethe r the claim

c annot be resolved by sim ply looking to versus interpreting the CBA.

Curtis
, 913 F.3d at 1152–53 (internal citations and quotation

m arks om itted). 1

CET argues that this preem ptio n approach properly applies only to claim s arising under state law, not to claim s, such as the RICO claim s alleged here, ari s i n g under federal law. Instead, CET contends that w e should apply a preclusion test that asks whether the two federal statutes necessarily conflict, and if so, favors the statute passed later in tim e. CET

1 A v a ri a t i o n of the t est asks: (1) whether the claim asserted exists independently of the CBA, and if so (2) whether the re solution of the claim nonetheless substantially depends on analysis of the CBA. Kobold
, 832 F.3d at 1032. Both versions of the test are used interchangeably.C O LUMB I A E X P O R T T E R M I N AL V

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argues that because the RICO statute was enacted after t h e LMRA, if there is an irreconcilable conflict between the two federal statutes, the older o ne, the LMRA, m ust b e d eem ed to have been repealed or am ended by the later legislation.

Th at is not the path that this court o r o ther cou r t s h a v e taken. Rather, the term s “preem ption” and “preclusion” have been used i nterchangeably and the sam e two-step approach app l i e s whether the conflicting statute is a federal or state provision. In Hubbard
, for instance, we held that the RLA, which also preceded the enactm ent o f RICO, preem pted a fraud claim under RICO. 927 F.2d at 1099; see also Long v. Flying Tiger Line, Inc.
, 994 F. 2 d 6 9 2 (9th Cir. 1 9 93) (RLA precludes ERISA claim s)

. Sim ilar conclusions have been reached by circuit courts across the country. 2

Although the Suprem e Court h as never directly passed on that precise qu e s tion, we are guided by its holding that “[s]ection 301(a) govern s claim s founded directly on rights

2 Other circuits have applied t he “preem

ption” or “preclusion” test when considering federal claim s in the context of labor disputes, without referencing the d a t e s of passage of each federal act. Like our court, the Seventh C i rc u i t has also held t hat the RLA precludes RICO claim s. Unde r wo o d v. Venango R iver Corp
., 995 F.2d 677 (7th Cir. 1993) narrowed by Westbrook v. Sky Chefs, I nc. , 3 5 F.3d 316, 317–18 (7th Cir. 1994) (RLA precludes RICO claim s unless causes of ac tion are independent o f the CBA). Sim ilarly, at least two circuits have h eld that the LMRA precludes Fair Labor S tandards Act (“FLSA”) c l ai m s

. Vadino v. A. Valey Eng’rs
, 903 F.2d 253 (3d Cir. 1990); Martin v. Lake Cnty. Sewer Co., Inc.
, 2 6 9 F.3d 673 (6th Cir. 2001). At least four circuits have held that the RLA precludes ERISA claim s. de la Rosa Sanchez v. E

. A i rlines, Inc
., 574 F.2d 29 (1st Cir. 1978) ; Ballew v. Cont’l Airlines, Inc
., 668 F.3d 777 (5th Cir. 2 012); Hastings v. Wilson
, 516 F .3d 1055 (8th Cir. 2008); Oakey v. U.S. Airways Pilots Disability Income P lan
, 723 F.3d 227 (D.C. Cir. 2013).C O LUMB I A E X P O R T T E R M I N AL V

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created by collective-bargaining agreem ents, and a lso claim s ‘substantially dependent on analysis of a collectivebargaining agreem ent.’” Caterpi ll a r, Inc. v. Williams
, 482 U.S. 386, 394 (1987) (em phasis added) ( qu o ting Int’l Bh d

. o f Elec. Workers v. H

echler
, 4 81 U.S. 851, 859 n

. 3 (1987)). The Sup r em e Court has enforced arbitration requirem ents in § 3 01 cases when resolution of the c l a im s required interpretation of the CBA, regardless of the form o f the claim

. S

ee, e.g. , L ueck
, 4 7 1 U .S. at 219 (“Since nearly any all eg e d willful breach of contract can be restated as a tort claim for breach of a good-faith obligation under a contract, the arbitrator’s role in every case could b e b ypassed easily if § 301 is not understood to pre-em p t such claim s.”)

Thus, in Hubbard
, we explained that “ fe d e r a l labor law

was i n t en ded to provide the exclusive rem edy for g eneric fraud cla i ms r e lating to rights under a CBA. If the sam e predicate acts were the basis of state claim s for fraud

. . . they

wo u ld be preem

pted

. . . [ so plaintiffs] cannot evade preem ption throug h ‘ a r t ful pleading’ of the claim s as RICO claim s.” 927 F.2d at 1098. If the court held otherwise, any plaintiff could avoid arb it r a tion by converting a gardenvariety contract dispute into a case of federal racketeering.

Though in Hubbard we considered a labor contract under the RLA and reserved for another day the question of whether LMRA precludes RICO claim s, that day has com e. W e hold that a RICO claim is precluded by § 301 of the LMRA when the right or duty upon which the claim is based is created by

a CBA or resolution of the claim substan t i ally depends on analysis of a CBA.

W e have previously suggested this extensi on

. Notably, two years ago our court, sitting en banc, observed that “theC O LUMB I A E X P O R T T E R M I N AL V

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RLA a nd L MRA § 3 01 preem ption standards are ‘virtually identical’ in p urpose and function, [and] they are, for the m ost part, analyzed under a single test and a single, cohesive body

o f case law.” Alaska Airlines
, 898 F.3d at 913 n .1 (quo ti n g Hawaiian A irlines, Inc. v. Norris
, 5 12 U.S. 246, 260 (1994)). After discussing the d evelopm ent o f the two-step test applying to claim s under state law that require interpretation of a CBA, we explained that “[t]he sam e principle applies to federal law claim s, although they m ight be better described as ‘precluded.’” Id

. at 9 20 n.10. The labor contract a t issue in Alaska Airlin e s , like the contract involved in Hubbard
, was governed by the RLA. The fact that the plaintiff had asserted

a claim under a federal statute rather than a state law did not alter the o utcom e. T he claim could n ot proceed, regardless o f whether it was described as precluded or preem pted.

B. CET’s RICO claims require analysis of the CBA.

Applying the two-step test, w e co n clu d e th at C E T ’s RICO claim s are preem

p ted by § 301 because r e s olution o f the claim s is subst an t i a lly dependent on interpretation of the CBA. CET’ s RICO claim s are prem ised on allegations that tim esheets subm itted by ILWU w orkers were i nflated. T o p ro v e its case, CET m

ust dem onstrate that ILWU workers

comm itted the p r edicate acts of m ail and wire f raud by knowingly overbilling CET for tim e not work e d

. However, ILWU contends that the billed h ours were expressly authorized b y CET and charged in accordance with the CBA.

There are a host of CBA provisions that could excuse the workers from being p resent at the tim e of work report ed on the tim esh e ets o r could explain why workers are com pensated for tim e not a c tually worked. F or instance, ¶ 4-1 guarantees

a m inimum of 8 h o urs o f pay f or em ployees who arrive atC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 17

work and are p u t to work even if released before the 8-hour shift concludes. Paragraph 4-5 guarantees a m inimum 4 hours of p ay for those sent hom e upon arrival. Further, Section XII of the CBA details special rules for “stead y ” em ployees: ¶ 12-3 guarantees 40 h ours’ work per week, and ¶ 12-4 sets

m aximum durations for lay-off periods. Finally, ¶ 8-1 of the CBA lists paid holidays, ¶ 9-1 alludes to paid vacation tim e, and ¶ 6-4 provi d es for p aid m eal periods with m inimum durations.

Resolution of the RICO claim s wil l a lso require interpretation of the CBA to determ ine how i t applies, if it does, to an issue which its exp r e s s t e rm s do not appear to discuss: w hether em

p loyees can cl a i m all of their

c o m pensable hours in their weekly tim esheets, or whet h e r they m u st sim ply list tim e actually worked and awai t a forensic recalculation of their pay.

These issues are not, as the dissent suggests, at 3 4
, m erely “speculative” or “hypothetical.” Rather, they are intrinsic to CET’s claim s as pleaded and argued to the district court and to us. Perm itting the district court to proceed before the grievance process has been exhausted would “e v is cerate a central tenet of federal labor-contract law under § 301 that it is the arbitrat o r , n o t the court, who has the responsibility to interpret the labor contract in the first instance.” Lueck
, 471 U.S. at 220.

Notably, C ET has not argued that its claim s are unrelated to the CBA. T hat is n ot surprising, for the subject of its claim
, the num ber o f hours for which its em ployees are entitled to claim paym ent, is at the core of an em ploym ent relationship

a nd is som ething a CBA could be expected to govern. Instead, C E T contends that the CBA is unam b iguous. T h at isC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 18

an argum ent that CET can m ake within the grievance process. The claim s cannot be resolved by m ere reference to the CBA. W e thus conclude that CET’s RICO claim s were properly dism issed by the district court because they subs tantially depend on interpretation of the CBA.

C. The C

BA’s arbitration provision applies to R ICO claims.

CET a rgues that even if § 301 could preclude its RI CO claim s, it should have no preclusive effect in this i nstance b ecau se t h e C B A ’s arb itration provision does n o t co n tem p late RICO claim s and does not bind CET with regard to the ILWU

or the i n dividually-nam ed d efendants. CET argues that the CBA’s arbitration provision should be interpreted to exclude any statutor y claim s or any disputes between the em ployer and the ILWU um

brella organization, or between the

em ployer and the 154 individually-nam ed defendants. These argum ents fail for several reasons.

CET’s preferr e d reading of the arbitration provision directly cont r adicts the p lain text of the CBA. By its o wn term s, the C B A’s arbitration provision ap p l i e s to “any

c o n t r o versy or disagreem ent or dispute

. . . as to the interpretation, application, or violation” of “any” o f its provisi ons. ¶ 16-2. It then sets forth a process for the resolution of “all grievances.” ¶ 1 6

- 4

. The text o f the CBA does not say, as it could, th a t RI CO—or any other statutory claim

— is excluded from th e grievance process, even if it involves “the interpretation, application, or violation” of the CBA.

Rather, the CBA explicitly contem plates a d i s p ute resolution m echanism covering the exact conduct alleged asC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 19

the basis of CET’s current claim s. F or exam ple, Section XIV lays o ut th e s t andard of work expected of individual

em ployees ( e.g ., “not leaving their work station in advance o f the designated quitting tim e”) and goes on to state that “[a]ny Em ployer m ay file w ith the union a com plaint in writi ng against any m em

ber o f the grain section of the Union” and

a llows the aggrieved em

ployer to proceed b efore the J oi n t Labor Relations Comm ittee if it does n ot re ceive a satisfactory response.

Further, the ILWU is a signatory to the agreem ent and is capable of enforcing the agreem ent on its own behalf, and the

em ployees, through their bargaining representatives, are also treated as parties to the agreem ent.

At m ost, CET ’s p ref

erred interp retatio n co u l d create som e doubt as t o t he scope of the CBA’s grievance procedures. Even so, “[t]he party contesting arbitrability bears the burden of d em onstrating how the language in the coll e ctive bargaining agreem ent excludes a partic u l ar d ispute from arbitration.” Standard Concrete Prods., Inc. v. Gen. T ruck Drivers, Office, Food & Warehouse Union, Local 952
, 353 F.3d 6 68, 674 (9th Cir. 2003) (quoting Phx. Newspaper, Inc. v. Phx. Mailers Union Lo c al 752
, 989 F.2d 1077, 1080 (9th Cir. 1993)). Any “[d]oubts should be resolved in favor o f coverage.” Id. at 674 (citations om itted). CET, as the party refuting the p lain reading of the CBA’s scope, has not m et its burden of persuasion.

The dissent reaches a d ifferent conclusion in large because it disregards the presum ption in favor of arbitration under f ederal law. It contends, at 35, that the parties m ust “expressly consent” to arbitrate RICO claim s, citing Granite Rock Co. v. Int’l Brotherhood of Teamsters
, 5 6 1 U. S. 2 8 7,C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 20

300 (2010). But it does not consider or account for w hat else Granite Rock

says.

Like this case, Granite Rock was a dispute betwee n a n

em ployer and a union. The CBA governing the relat i o n ship between the parties expired in April 2004. I d

. at 292. Wh en negot ia t i o n s for a new CBA reached an im passe, the union workers initiated a strike in June 2004. Id

. Granite Rock and the union ultim ately reached an agreem ent on a new CBA on July 2. Id. at 292–93. H owever, the new CBA did not include

a provision to hold the union and i t s m e mbers harm less for any strike-related dam ages that th e em ployer m ay have incurred in the interim

. Id

. a t 293. In an effort to secure the waiver of liability, the local union, under the instruction o f its parent, the International Brotherhood o f Team sters (“IBT”),

resum ed the strike even though the new CBA contained a nos trike p rovision. Id. Granite R ock brought a § 301 ac t i o n i n federal court seeking an injunction against the ongoing strike, and seeking dam age s against b oth the local union and IBT. Id. at 294. T he stri k e ultim ately ended in S eptem ber, but Granite Rock continued to seek dam ages. Id. at 294–95.

During the litigation, a factual dispute arose as to the date that the new CBA becam e effe c tive, with Granite Rock claim ing that the agreem ent wa s ratified by union m em bers

on July 2, and the union claim ing that it was ratified later, on August 2 2. Id. at 295. The district court held that the i s su e

wa s fo r a court to decide, and subm itted the q u estion to a jury, which reached a unanim ous verdict that the local h ad ratified the C B A on July 2. Id. at 295. Th e Ni n t h Circuit reversed, reasoning that the parties’ dispute was governed by the CBA’s arbitration clause, which covered strike- r e la ted claim s. Id.C O LUMB I A E X P O R T T E R M I N AL V

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The Suprem e Court granted certiorari, and reversed, viewing the case as an opportunity to “reem phasize the proper fram ework for deciding when disputes are arbitrable.” Id. at 297. T he Court began with the proposition that “[i]t is well settled in both comm ercial and labor cases that whether parties have agreed to subm it a pa r ticular dispute to arbitration is typically an issue for judicial determ i n ation.” Id

. at 2 9 6 (internal quotation m arks and brackets om itted). More specifically, “where the d ispute at issue concerns contract form ation, the dispute is generally for c o u rts to decide.” Id. But where, as here, the f

orm ation and validity of the contract is not at issue, and the parties “have agreed to arbitrate som e

m atters pursuant to an arbitration clause, the law’s perm issive policies in respect to arbitr a t i o n counsel that any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration.” Id. at 298 (internal quotation m arks and

em phasis o m itted). In such cases, reviewing courts m ust proceed by:

(1) appl ying the presum

p tion of arbitrability only where a validly fo rmed and enforceable arbitration agreem ent is am biguous about whether it covers the d ispute at hand; and (2) adhering to the presum ption and ordering arbitration only where the p resum ption is not rebutted.

Id . at 301 (internal quotation m arks om itted).

The parties in our case do n ot dispute that there is a valid CBA and that the CBA includes a grievance provision under which they have agreed to arbitrate som e m atters. The dissent does not contend o therwise. Rather, there is only a dispute as to wh ether the agreem ent’s scope covers C ET’s R IC O claim s.C O LUMB I A E X P O R T T E R M I N AL V

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Granite Rock directs us, therefore, to r e solve any doubts concerning the scope of issues to be referred to arbitration in favor of arbitration. T hat is the process that the district court followed to reach the conclusion that we affirm

.

W e do not hold, as the dissent suggests, at 41, that RICO claim s are preem

pted b y the LMRA and subject to arbitration in every instance, sim

ply by virtue of being an “em p loym entrelated dispute.” Like state-law fraud c l a im s, R ICO claim s

are not preem

pted or precluded b y § 301 unless t h e y a r e (1) based on a right or duty created by the CBA, or (2) require interpretation of the CBA. S ee, e.g. , Operating Eng’rs Pension Tr. v. Wilson
, 9 15 F.2d 535, 537–39 (9th Cir. 1 990) (holding that § 301 does n ot p r eem pt state tort claim for fraud in the inducem ent of a CBA). 3 Even then, reviewing

cou r t s m ust still look to the scope o f the CBA’s arbitration provision to determ ine if those claim s are arbitrable under the fram ework established in Granite Rock

.

Th e dissent’s argum ent that there is no presum ption i n favor of arbitration, such that it m ust b e established that the parties agreed to each specific type of claim
, is sim ply inconsistent with Granite Rock
, the authority it purp o r t s to rely on, and decades of c a selaw. See, e.g., United Ste e lworkers of Am. v. Warrior & Gulf Navigation Co.
, 363 U.S. 5 74, 582–83 (1960) (“[Under § 301, an] o rder to arbitrate the particular g rievance should not be denied unless it m ay be said with positive a s s u r ance that the arbitration clause is not susceptible of an interpretation that covers the

3 Si m i l arly, we have already h eld that f ederal l abor law does n ot preclude crim inal RICO action. S ee , e

. g. , United States v. Thordarson
, 646 F.2d 1323, 1331 (9th Cir. 1981).C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 23

asserted d isp ute. Doubts should be resolved in favor o f coverage.”) 4

Finally, we note that CET is not perm anently barred from pursuing its claim s. The dism issal by the district co u r t was without p rejudice and p roperly so. CET is sim ply required to exhaust the grievance process to which it agreed in the CBA before it can proceed in federal court with those claim s.

D. The Buell exception does not apply.

W e address one fi n al p oint. CET argues that another precedent, A tchison, Topeka & S anta Fe Ry

. Co. v. Buell
, 480 U.S. 557 (1987), should control. W e disagree.

In Buell
, the Supr e me Court held that an em ployee’s claim s un de r a n independent federal statute, the Federal Em ployers Liability Act, were not precluded by the RLA. Id.
at 565–67. In that decision, h o wever, the Suprem e Court reiterated the general rule in favor of com pe l l i n g arbitration in labor disp u t es, while recognizing an exception for claim s based o n f

ederal statutes that contain specific substantive guarantees for workers. Id. at 565 (“[N]otwithstanding the

s t r o n g p o l i c i e s e n c o u r a g i n g a r b i t r a t i o n , ‘ d i f f e r e n t considerations apply w here the em ployee’s claim is based on rights arising out of a statute designed t o provide m inimum substantive g u arantees to individual workers.’” (quoting

4 See also G ateway Coal Co. v. United Mine Workers
, 414 U .S. 368, 377–78 (1974); Nolde Bros. v. B akery & Confectionery W orkers Union
, 430 U .S. 2 43, 254–55 (1977); AT& T Techs. v. Communs. Workers of Am.
, 475 U .S. 64 3
, 650 ( 1986); Inlandboatmens Union of the Pac. v. Dutra Grp.
, 279 F .3d 1075, 1078 (9th Cir. 2002); SEIU v. St. Vincent Med. Ctr.
, 344 F.3d 977, 985 (9th Cir. 2003); Int’l A ll. of Theatrical Stage Emple. v. Insync Show Prods., Inc. , 801 F.3d 1033, 1042 (9th Cir. 2015).C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 24

Ba rrentine v. Arkansas-Best Freight System, Inc.
, 450 U. S. 728, 737 (1981))); see also id. (citing McDonald v. West Branch
, 466 U.S. 284 (1984) (CBA arbitration decision does not preclude § 1983 claim s); Barrentine
, 450 U.S. 728 (CBA arbitration decision does n o t preclude FLSA claim s); Alexander v. Gardner-Denver Co.
, 415 U.S. 36 (1974) (CBA arbitration decision does not preclude Title VII claim s)).

This reading of Buell is consistent wi t h d e c isions that have stressed that “§ 301 cannot be read broadly to pre-em pt

n o nn eg o tiab le rig h ts co n f

erred o n in d iv id

u al em p lo yees [ ev en unde r] state law.” Livadas v. Bradshaw
, 512 U.S. 107, 123 (1994). “Setting m inimum wages, regulating work hours and pay periods, requiring paid and unpaid leave, p ro te c ting worker safety
, p ro h i b itin g d iscrim ination in em ploym ent, and est ab li s h ing other worker rights rem ains w ell within the traditional po l i ce power of the states.” Alaska Airlines
, 898 F.3d at 919. Ther e fo r e, “claim s alleging violations o f such protections will n o t necessarily be preem pted, even when the plaintiff i s c o v e re d by a CBA.” Curtis
, 913 F.3d at 1152.

W e have consistently observed this exception. See, e.g. , Felt v. Atchison, T

opeka & Sa n t a Fe Ry. Co.
, 60 F.3d 1416 (9th Cir. 1995) (RLA does not p reclude Title V II claim s); Saridakis v. United Airlines
, 1 66 F.3d 12 7 2 (9th Cir. 1 999) (RLA does not preclude ADA claim s).

The exception does n o t apply here, however. The current claim s have been brought by an e mployer, and the federal statute at issue, R ICO, does not establish sub stantive guarantees for workers.C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 25

III. Conclusion

W e affirm the dism issal o f this action without p rejudice by the d istrict court. CET’s RICO claim s are subject to the CBA’s a r bitration provision, and are p recluded by LMRA § 301.

AFFIRMED.

IKUTA, Circuit Judge, dissenting:

The m ajority today m akes two serious errors tha t wi l l throw our Labor Managem ent R elations Act (LMRA) jurisprudence into disa rr ay

. First, it holds that any federal claim that is related to a collective-bargaining agre e me n t (CBA) is p reem

pted or preclud e d b y § 301 of LMRA and

m ust autom atically be dism issed by the district court and sent for arbitration. Majority at 17–18. This ruling m is t a kenly

applies our jurisprudence developed for Railway Labo r Ac t (RLA) claim s to LMRA claim s. Second, the ma jo r ity contradicts itself b y holding that even if a federal claim is

“ p r ec lu d ed,” a court “m u st still look to the scope of the CBA’s arbitration provision to determ ine if those claim s are arbit rable.” Majority at 2 2. Here, the m ajority errs by applying a presum

ption of arbitrability, ev e n though the Suprem e Court has m ade clear that such a p resum ption does not apply where the arbitration provision is unam biguous. Granite Rock C

o. v. Int’l Brotherhood of Teamsters
, 561 U.S. 287, 301 (2010). In light of these and other errors, I dissent.C O LUMB I A E X P O R T T E R M I N AL V

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I

The prim ary purpose o f § 301 of LMRA is to ensure that federal courts can appl y federal comm on law to CBA disputes even when a claim is pleaded as a state- l a w c l a im

. On its face, § 301 gives federal courts jurisdict i o n o v er “[s]uits for v iolation of contracts between an em ployer and a labor organ i za tion representing em ployees in an industry

a ffe cting comm erce.” 29 U.S.C. § 185(a). 1 The Supre me Court h as interpreted this section as directing federal courts to create and apply a federal comm on law for interpreting CBAs
, s e e Textile Workers Union v. Lincoln Mills of Ala.
, 353 U.S. 448, 456 (1957), so as to ensure that uniform federal labor law prevails over inconsistent interpretations of CBAs by state courts. See Loc. 174, Teams t e r s , Chauffeurs, W a r e housemen & Helpers v. Lucas Flour Co.
, 369 U.S. 9 5
, 104–05 (1962). W e refer to state claim s covered by § 301 o f LMRA as “preem

pted” and federal claim s covered by § 301 of LMRA as “preclud e d

. ” Alaska Airlines, Inc. v. Schurke
, 898 F.3d 9 04, 920 n.10 (9th Cir. 2018) (en banc). These term s d o not m ean “typical confli c t preem ption” o r preclusion, id. at 922, but m erely refe r t o claim s that, pursuant to § 301 of LMRA, m u st be decided in federal court under federal labor law.

1 Section 301 of LMRA, 29 U.S.C. § 185(a), states in full:

Suits f or violation of contracts b etween a n em ployer and a labor organization representing em ployees in an industry affecting comm erce as defined in this chapter,

or between any such l abor organizations, m ay be brought in any district court of the United States having jurisdiction of the parties, without respect to the am ount in controversy or without regard to t he citi z e n ship o f the parties.C O LUMB I A E X P O R T T E R M I N AL V

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If a plaintiff brings a state-law claim in state court, courts apply a two-part inquiry, asking whether (1) the claim alleges

a b reach of a CBA or (2) requires the interpretation of the CBA. See, e.g. , Lingle v. Norge Div. of Magic Ch e f

, Inc.
, 486 U.S. 399, 405–07 (1988); Schurke
, 898 F.3d a t 920. If the court finds that § 301 of LMRA applies un d er this twopart test, then the defendants m ay rem ove the case to federal court through the jurisdictional doctrine of “com p lete preem ption,” w hich is “an exception to t h e well-pleaded

com plaint rule.” Schurke
, 898 F.3d a t 9 2 3 n

. 1 5. Once the federal court determ ines that rem oval under § 301 of LMRA

was proper, the jurisdictional inquiry for preem p tion is over. By contrast, when a federal claim is brought in f ederal court in the first instance, no jurisdictional inquiry under § 301 o f LMRA is ne c e s sa ry. Therefore, in this context, § 301 has little work to do. 2

Once a claim (state or federal) is properly in federal court, the court’s inquiry under LMRA is, at its core, a question o f contract interpretation. See id. at 918 n.7. 3 I f t he claim

2 Indeed, given the lim ited nature of LMRA’s im pact in this context,

a sister circuit has concluded that “the m o tivating purpo s e of § 3 0 1 p re e m p ti o n sim ply does not apply” to federal claim s. Watts v. Unit e d Parce l S e r v

. , Inc.
, 701 F.3d 188, 190–93 ( 6th Cir. 2012). W e have not directly ruled on this point. Cf. S churke , 898 F.3d at 920 & n.10.

3 A l though the m ajority claim s that other circuits appl y a “preem ption” or “preclusion” test to consider federal claim s in the context of labor disputes, Majority at 14 n.2, the LMRA cases cited by the

m ajority m erely determ ined that an em ployee’s Fair Labor Standards A ct claim s required an interpretation of the CBA, and therefore were subject
t o LM RA ’s s tatute of lim itations. See Vadino v. A. Valey Eng’rs
, 9 0 3 F.2d 253, 266 ( 3d Cir. 1 990); Martin v. Lake Cnty. Se w e r Co.
, 269 F.3d 673, 679 (6th Cir. 2001). These cases do not a ffe c t the conclusion that, after federal jurisdiction exists, we are tasked only with deciding aC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 28

alleges a breach of the CBA or requires interpretation of the CBA, then the fed e r a l court need only read, apply, and enforce the C BA, including any ap plicable arbitration pro v ision. There is no “presum ption that labor disputes are arbitrable whenever they are not expressly excluded from an arbitration clause.” Granite Rock
, 561 U.S. at 301 n.8. If the CBA or labor contract does not require that the dispute be resolved by a r

bitration, then the court m ust resolve the dispute itself by applyin g the term s of the CBA pursuant to federal comm on labor law. See, e.g. , Painting & Decorating Con t r actors A ss’n v. Painters & D ecorators Joint Comm.
, 707 F.2d 1067, 1070–72 (9th Cir. 1983).

This contractual focus differentiates LMRA from the RLA, 4 5 U.S.C. §§ 151–65, which covers the r ai l r o a d and airline industries. The standard for determ ining when a statelaw claimis preem

pted by the RLA is “virtually identical to the pre-em

ption sta n dard the Court em ploys in cases involving § 301 of t h e LMRA.” Hawaiian Airlines, Inc. v. Norris
, 512 U.S. 246, 260 (1994). But if the RLA’s disputeresolution provisions apply to a claim
, th e n the statute itself “requires subm ission of such disputes to internal disputeresolution processes and then to a division of the N ational Ad justm ent Board or an arbitration board selected b y t h e parties

. ” Moore-Thomas v. Alaska Airlines, Inc.
, 553 F.3d 1241, 1 245 (9th Cir. 2009). Because the text of the RLA

m andates arbitration of any covered claim
, it provides no guidance in determ ining whether a claim precluded by LMRA m ust be arbitrated. Cf. H

ubbard v

. United Airlines,

question of contract i nterpretation to determ ine whether the federal claim s

m ust be arbitrated. See Granite Rock , 561 U.S. at 310–11.C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 29

I nc. , 927 F.2d 1094, 1097–98 (9th Cir. 1 991), abrogated i n part , N orris , 512 U.S. at 263 n.9. 4

Here, C olum

bia Export Term inal (CET) brought federal claim s in federal court, so no jurisdictional inquiry is required to ensure the p ropriety of rem oving the case from state court. And because § 3 0 1 o f LMRA applies, rather than the RLA, this case pre sents only a q uestion of contract interpretation,

see Granite Rock
, 561 U.S. at 311, and we m ust determ ine whether CET’s claim s as pleaded are subject to the CBA’s gr i e vance and arbitration procedures. In short, the only question at issue here is whether CET’s com plaint raises claim s that the parties intended to be decided i n t h e arbitral forum established b y the CBA am ong the parties. Accordingly, to the extent the m ajority holds that if a federal claim is “grounded in the p r o visions o f a CBA or requiring interpretation of a CBA,” Majority at 13, then the claim is precluded by § 3 0 1 o f LMRA and m ust be dism issed by the district court for arbitration, Majority at 17–18, it is wrong.

II

After consum ing m

ultiple pages with its theory that RICO

c l aim s are “precluded by § 301” and subject to the two

- pa r t

4 Thus, the m a

j o rity’s reliance on RLA cases that required federal R ICO claim s to go to RLA-m andated adjustm ent boards, Majority a t 14 & n .2, is inapposite, as these cases d o not provide g u i d a n c e on the question whether L M RA can “ preclude” CET’s RICO claim s. Cf. Underwood v. Venango River Corp.
, 995 F.2d 677, 685 (7th Cir. 1993), overruled in part , Westbrook v. S ky Chefs, Inc.
, 3 5 F.3d 316, 317–18 (7th Cir. 1994). And the m ajority’s reliance on ERISA cases involving RLAm andated arbitration proves even l ess persuasive, because ERISA itself disclaim s any effect on or conflict with earlier enacted federal laws. See 29 U.S.C. § 1144(d).C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 30

test for p reem

ption, Majority at 10–18, the m ajority suddenly shifts g ear and indicates that this conc l u s i o n is irrelevant, because, even after the two-step preem p tion test, “reviewing

cou r t s m ust still look to the scope o f the CBA’s arbitration provision to determ ine if those claim s are arbitrable under the fram ework established in Granite R ock .” Majority at 22

. Although this conclusion is correct (and m akes the m ajority’s lengthy preclusion analysis m ere dicta), the m ajority errs by

m isu n d e rstanding Granite R o ck ’s a n a ly sis o f h o w co urts m

u st determ ine whether an arbitration provision in a CBA covers the claim at issue.

A

In Granite Rock
, the Ninth C ircuit m ade the sam e m istake the m ajority m akes here: it applied the p resum ption that “any doubts co nc e rn i ng the scope of arbitral issues should be resolved in favor of arbitration,” and erroneously held that a LMRA dispute was governed b y a CBA’s arbitration clause. 561 U.S. at 298. Th e Suprem e Court reversed. As Granite Rock explaine d, the Suprem e Court has never “held that courts m ay u se policy considerations as a substitute for party agreem ent,” id. at 303, or “held that this policy overrides the principle that a court m ay subm it to arbitr a tion ‘only those disputes

. . . that the parties h a v e a g r eed to subm it,’” id.
at 302 (quoting First Options of C hi., Inc. v. Kaplan
, 514 U.S. 938, 943 (1995)). Rather, a court mu st apply “the proper fr a me work for deciding when d isputes are arbitrable.” Id. at 297.

Under the Granite Rock fram ework, a court m u st first use ordinary princi p les of contract interpretation to determ ine if the arbitration provision is “best construed to encom pass the dispute.” Id. at 3 0 3

. “[A] court m ay order arbitration o f aC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 31

p articular dispute only where the court is satisfied t h a t t h e parties agreed to arbitrate that dispute

. ” Id. at 297

. This

m eans that a court m

ust first “resolve any issue that calls into question the form ation or applicability o f t he specific arbitration clause that a party seeks to have the cou rt enforce.” Id.

Then, only “where a validly form ed and enfo r ceable arbitration agreem ent is am b iguous abou t whether it covers the dispute at hand
, ” m ay a court apply “the p resum ption o f arbitrability ” and ask whether the arbitration provision is

reasona b l y construed as covering the asserted dispute. Id.
at 301. Even if the court concludes the arbitration provision is susceptible to such an interpretation, and therefor e the presum ption o f arbitrability applies, a cou r t m ay order arbitration “only where the presum ption is not rebutted.” Id.

B

Applying this fram ework here, we begin b y c o n s truing the text of the CBA, u sing ordinary principles of contract interpretation, to determ ine which claim s m ust be decided by the CBA’s grievance and arbitration p rocedure s

. Section XVI o f the CBA p rovides “procedures for han d l ing grievances and disputes.” The CBA defines a grievance as follows:

A grievance shall be defined as a n y controversy or disagreem ent or dispute between the applicable ILWU Loc a l Union and the Em

p loyer for the particular grain elevator(s) involved as to the interpretati o n,

app lication, or v iolation of any provision of this Agreem ent.C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 32

The CBA provides that all grievances between the local unions and CET m

ust b e resolved p ursuant to the procedures in Section XVI of the CBA. Under Section XVI, the parties

m ust attem pt to resolve the grievance inform ally. If it is not resolved, it m

ust be referred to a “Joint Labor Re l a tions Comm it tee” com

prised of representatives from “the applicable ILWU Local Un ion” and “the applicable Em ployer.” T he comm ittee has “the powe r a n d duty to investigate and adjudicate all grievances or disagreem ents o r dis putes arising under this Agreem ent.” If the comm ittee is unable to resolve the dispute, then the comm ittee defines “the question or questions in dispute,” and either party m ay refer the question “to an im

partial arbitrator. ” The C BA then outlines the procedure for conducting arbitration. Finally, CET “shall a lso have the right to file a grievance and to follow the above grievance procedure in an effort to resolve it.”

C

After reviewing the relevant prov i sions of the CBA reg a rding which claim s are subject to its grievance and arbitration procedures, we next consider the nature of C ET’s claim s, beginning w ith a n a ccurate description of C ET’s claim s “as pleaded.” See Schurke , 898 F.3d at 924 (holding that, in determ ining whether a state law c l a i m requires the int e rp r etation of a CBA, a federal court m ust consider the claim “as pleaded”). A ccordi n g t o the operative com plaint, CET em ploys union- r e presented workers to load grain for international shipping at a ter m i n al in Portland, Oregon (Term inal 5). CET sued the International Longshore and W arehouse Union (ILWU ) and approxim ately 160 individual hourly workers who are m em bers o f two loca l l abor organizations chartered b y ILWU. According to theC O LUMB I A E X P O R T T E R M I N AL V

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com plaint, the defendants, “with s p e c ific intent to defraud, jointly e n t e r e d into a conspiracy and schem e” to “routinely

an d system atically, over a period of m ore than four years,” under-staff jobs and subm it tim e sheets “in d i c a t ing tim e worked for em

ployees who did not work, and were not even at Term inal 5, for som e or all of the indic a t e d t im e.” The

com plaint alleged that workers “billed hours and re c e i ved unearned paym ent” for tim e c l a i me d on their tim e sheets when they were not p resent at T erm inal 5. Am ong other practices, workers split shifts “with one working the f irst half and the other working the second ha l f
, yet subm itting tim e sheets indicating falsely that both had worked the full shift.” Anothe r p r actice involved workers who were present at the term inal subm itting time sheets showing that an absent worker, who had not showed up , “wo r k ed a full shift.” The

com plaint alleged that th rough these fraudulent practices, workers illegally obtained over $5 m illion fromCET.

Based on these factual allegations, the com plaint brought

s ev e n RICO claim s. 5 The com plaint alleged that eac h subm ission of a fraudulent tim e sheet constituted a predicate act o f m ail or wire fraud under 18 U.S.C. § 1341 and § 1343, and that the defendants engaged in a p attern o f racke t e e ring activity.

5 These claim s include allegations that th e d ef en d ant s i nv est e d i n co m e derived from a pattern of racketeering a ctivity in violation of 18 U.S.C. § 1 9 62(a), t

hat ILW U acquired an indirect interest in and indirect control of CET through a pattern o f racketeering activity in violation o f 18 U.S.C. § 1962(b), that the defendants participated in the conduct of the local unions through a pattern of r acketeering activity in violation o f 18 U.S.C. § 1962(c), and t

hat the defendants co n s pired t o violate the prior three sections in violation of 18 U.S.C. § 1962(d).C O LUMB I A E X P O R T T E R M I N AL V

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D

The key question is whether CET’ s claim s, as pleaded,

m ust be arbitrated un d e r t h e CBA. To m ake this determ ination, we apply principles of contract interpretation,

as inform ed by the c o mmo n law of f ederal labor law and labor arbitration precedents. See Standard Concrete Prods., Inc. v. Gen. Truck Drivers, Office, F ood & Warehouse Union, Loc. 952
, 353 F.3d 668, 673–75 (9th Cir

. 2 00 3) ; see also M & G Polymers US

A, LLC v

. Tackett
, 574 U.S. 4 27, 435 (2015); G ranite Rock
, 561 U.S. at 298 n.6.

Federal comm on law p rovides im portant g uida n ce for interpreting the k e y t erm s in the CBA. Under federal

comm on law, we construe the word “interpretation” narrowly

as m eaning “som ething m ore than ‘consider,’ ‘refer to,’ o r ‘apply.’” Sc h urke
, 898 F .3d at 9 21 (quoting Balcorta v. Twentieth Century-Fox Film Corp.
, 208 F.3d 1002, 1108 (9th Cir. 2000)). Because a plaintiff’s claim
, “as p leaded,” drives the analysis, there mu st be an “active dispute” as to the interpretation of a CBA provision a n d n o t sim ply a

“‘ hypothetical connection between the claim and the term s o f the CBA.’” S

c h u rk e , 898 F.3d at 921 (quoting Cramer v. Consol. Freightways, Inc.
, 255 F.3d 683, 691 (9th C ir. 2 001) (en banc)). A co u r t m

ust wait until an active dispute arises; it cannot rely on the “s p e culative possibility” of an int e rpretive dispute or the “possibility that things could change down the roa d .” M c Cray v. Marriott Hotel Servs., Inc.
, 9 02 F.3d 100 5, 1 01 3 (9th Cir. 2018). Nor does an interpretive dispute exist m erely because a defendant relies

on CBA provisions as a defense to a plaintiff’s claim

. See,
e.g. , Ward v. Circus Circus C asinos, Inc.
, 473 F .3d 994, 997–99 (9th Cir. 2007); Detabali v. St. Lu ke’s H osp. ,C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 35

482 F.3d 1199, 1203–04 (9 t h Cir. 2007); Matson v. United Parcel Serv., Inc. , 840 F.3d 1126, 1134–35 (9th Cir. 2016).

Us ing ordinary principles of contract interpretation, i t i s imm ediately apparent that the arbitration provi s io n in the CBA d oes not cover CET’s claim s a gainst ILWU. The CBA’s interpretation o f “grievance” is l i m ited to controversies, disagreem ents, or disputes “between the applicabl e I LWU Local Union and the Em ployer for the par t i cu lar grain elevator(s).” T herefore, it is unam biguous that CET’s cl a i m s against ILWU falls outside the definition of a grievance. See, e.g. , Stand a r d Concrete
, 353 F.3d at 674–75. A ccordingly, CET h as no obligation to arbitrate its claim s against ILWU. Th e m ajority errs in holding otherwise. Majority at 18–22.

Second, it is imm ediately apparent that the parties d id not agree to arbitrate f

ederal statutory claim s in general, or RICO claim s in particular. The parties to the CBA could have agreed to do so, b e cause courts will enforce agreem ents to arbitrate fed er a l s tatutory claim s, see 14 Penn Plaza LLC v. Py ett , 5 56 U.S. 247, 263–64 (2009). But, for such an agreem ent to b e e n forceable, the parties m ust expressly consent to such a provision, see id. ; G rani t e Rock
, 561 U.S.

a t 3 0 0
, and any CBA requirem ent to arbitrate such claim s “m ust b e p articularly clear,” Wright v. Universal Mar. Serv. Corp.
, 525 U.S. 70, 79–80 (1998). The CBA’s grievance and arbitration provisions here do not expressly agree to arbitrate RICO claim s, or any other statutory cl aim s, or authorize the arbitrators to resolve such claim s.
Therefore, unless the CBA’s arbitration provisi o n is

am biguous, it w ould apply to CET’s claim s only if the CBA’s definition of “grievance” is best construed as cover i n g theC O LUMB I A E X P O R T T E R M I N AL V

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claim s. The word “grievance” is defined in the C BA as “any controversy or di s a g r eem ent or d ispute” involving “the interpretation, applicatio n, or violation of any provision o f this Agreem ent.” Under federal labor law, a dispute over “the interpretation or application” of a CBA refers t o “a claim arising out of a CBA.” Norris
, 512 U.S. at 254. Because CET does not allege a violation o f the CBA, and there is no dispute over h ow a CBA provision applies to CET’s claim s, the key question is whether litigating CET’s RICO claim “requires interpretation of a CBA.” Schurke
, 898 F.3d at 921. As noted above, under f ederal commo n labor law, “‘interp r etation’ is construed narrowly,” and covers claim s only “to the extent there is an active di s pu te over ‘the

m eaning of contra c t t erm s.’” Id. (quoting Livadas v. Bradshaw , 512 U.S. 107, 124 (1994)).

Based on a st raightforward application of ordinary contract interp r etation principles, resolving CET’s RICO claim s does not require inte r p r e tation of the CBA. The

com plaint sim

ply alleges that the individua l workers subm itted fraudulent t i me sheets claim ing hours worked at Term inal 5 during periods in which they were not physically present at t h e term inal. Proving the elem ents of m ail and wire fraud here requires o nly a factual inq uiry into whether

em ployees claim ed they were working when they were not physically on site. “Th e need for a ‘purely factual inquiry
t h a t does not turn on the m eaning of any provision o f a collective-bargaining agreem e n t ,’ however, is not cause for preem ption under section 301,” B urnside v. Kiewit Pac. Corp.
, 491 F.3d 1053, 1072 (9th Cir. 2007) (quoting Lingle
, 486 U.S. at 407) (cleaned up), m eaning that a purely factual inquiry does not require an interpretation of a CBA under our two-part test.C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 37

The d efendants’ argum ents to the contrary fail. Because it is not possible to explain how C ET’s claim s, “as pleaded,” require construing the CBA, Schurke
, 898 F.3d at 924, the defendants take the easier route of rechara cterizing the

com plaint. While CET’s com p laint alleges that defendants conspired to d efraud C ET by m aking f alse claim s about their presence for work at Term inal 5
, the defendants reinvent the

com plaint as a lleging instead that C ET overpaid the individual defendants for not w orking hard enough w hile on site. The m ajority follows this sam e app roach, pretending that CET is m erely disputing whether defendants billed hours that w ere or were not “expressly authorized by CET and charged in accordance with the CBA.” Majority at 16.

Having recharacterized CET’s com p laint in this way, the d efe ndants then argue that interpretation of the CBA i s necessary to addre s s t h eir d efense that the CBA’s p ay guarantees, m inimum s t a ffing levels, longstanding industry p ra ctices, and the parties’ bargaining discussions justify the

em ployees’ w age claim s, because em ployees are entitled to

com pensation for certain tim e not worked. The ma j o rity again echoes this approach, identifying hypothetical defenses that the defendants could raise to “excuse the workers from being present at the tim e of work reported on the tim esheets”

or to “explain why workers are co m p ensated for tim e not actually worked.” Majority at 1 6. Indeed, the m ajority goes

so far as to suggest there could be an interpretive dispute over whether defendants were entitled to c o mpensation for paid holiday s

. 6 Majority at 17. The m ajority concludes that the

m ere existence of these hypothe t ical d efenses in the CBA

6 Given that the CBA helpfully defines Christm as Day as Decem ber 25, there is unlikely to b e an interpre t i v e dispute over the defendants’ entitlem ent to paym ent for this holiday.C O LUMB I A E X P O R T T E R M I N AL V

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m eans that adjudication o f CET’s re-im agined claim s will substantially d epend o n interpretation of the CBA. Majority at 16–18.

These argum ents are m eritless. W e m ust consider C ET’s claim s “as pleaded, ” and those claim s allege only that defendants engaged in fraud by claim ing they were present at Term inal 5 w hen they were not. No contract term s in the CBA authorize that sort of fraud, so interpretation of the CBA is not required. The defendants’ possible future defenses do

no t tu rn CET’s claim s into “grievances” as defined in the CBA. The S uprem e Court has m ade clear that a party cannot

m anufacture a CBA dispute through raising a defense, see Caterpillar, Inc v. Williams
, 4 8 2 U.S. 3 86, 398–99 (1987); Schurke
, 898 F.3d at 921. While defe n d a n ts m ay defend them selves on the ground that C ET’s allegations are factually

erroneou s (for instance, because workers arrived at the term inal but then w ere released from work as perm itted under the CBA, because weather prevented work, because workers get a paid holiday f

or Christm as Day, or because C ET could not provide sufficient work), such factual q uestions o r

excuses do n ot create any disputes about the interpretation o f CBA provisions at this stage of the litigation. No r d o es the defendants’ defense that the alleged fraud did not result in overbilling raise an interpretive d ispute. As our en banc court has e x plained, a defendant’s allegation of “a hypothetical connection between the claim and the term s of the C BA is not

eno u gh” to conclude that the claim “cannot be resolved without interpreting the applicable CBA.” Cramer
, 2 55 F.3d at 691.

The ma j or i ty’s further argum ents that CET’s claim s are grievances un d e r the CBA are m eritless. First, the m ajority places w eight on CET’s alleged failure to argue “that itsC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 39

claim s are unrelated to the CBA.” Majority at 17–18. It then argues that CET’s claim s are related to the CBA because “the subject of its claim
, the num ber o f hours for which its

em ployees are entitled to claim paym ent, is at the core of an

em ploym ent relationship.” Majority at 17–18. Factually, o f
course, the m ajority is wrong: CET argued on app e a l t h at “the district court erred in finding that CET’s R ICO claim required substantial analysis of the CBA,” because “CET’s

com plaint m akes n o r eference to the CBA,” “does not rely on” the CBA, and the com plaint “alleges sim

ply t h a t t h e IL W U an d Mem

bers subm itted frau d

u lent tim ecard s claimin g they worked tim e t hat they did not work.” But m ore im p o rtant, for purposes of d eterm ining whether CET’s claim s

are “gri e v a nces” subject to resolution under the CBA, the existence of an em

ploym ent relationship bet ween CET and the defendants is not d ispositive. As the Suprem e Court has explaine d
, “not every dispute concerning em ploym ent, o r tangentially involving a provision of a collective-bargaining agreem ent, is p re-em

pted by § 301 or other provisions of the federal labor law.” Caterpillar
, 482 U .S. at 396 n.10 (quoting Allis-Chalmers Corp. v

. Lu e c k
, 471 U.S. 202, 211 (1985)). CET m ust only argue (as it d id persuasively) that resolving its RICO claim s does not require resolving any ac t i v e i n terpretive dispute as to the p articular m eaning o f CBA provisions. Our task, i n turn, is m erely to consider whether CET’s claim s are “grievances” for purposes of the CBA.

Second, the m ajorit y a r g ues that CET’s claim s are “grievances” covered by the C BA because the CBA provisions “could excuse” workers from being present o r “could explain” com

pensation f

or tim e not worked. Majority
at 16. But the CBA does not define a “grievanc e ” as including p ossible defenses that m ay be raised by a d efendant. The m ajority’s ruling is contrary to federa lC O LUMB I A E X P O R T T E R M I N AL V

. ILWU 40

comm on labor law, which holds that unless t h ere is a currently existing, active dispute requiring interpretation of the CBA, such a claim does n ot require interpretation of the CBA. See C

ramer , 255 F.3d at 691–92. Rath er, “we have held that a CBA provision does not trigger preem p tion when it is only p otentially relevant to the state law claim s, without any g uarantee that interpretation or d i r e c t reliance on the CBA term s will o ccur.” H umble v. Boeing Co.
, 30 5 F. 3 d 1004, 1 010 (9th Cir. 2002 ) ; s e e also Dent v. Nat’l F o otball League
, 902 F.3d 1 109, 1116–17 (9th Ci r

. 2 0 18) (sam e). If CET b roadens its theory of liability la t e r in litigation, the defendants m ay again raise an argu m ent under § 301 o f LMRA, and the court can then decide whether t o refer interpretive disputes t o the C BA’s arbitration procedures at that tim e. See McCray
, 902 F.3d at 1013 & n.3. Likewise, if disputes arise in the calculation of dam ag es, then relevant interpretive d isputes m ay be referred to the CBA’s arbitration procedures. See, e.g. , Lingle
, 486 U.S. at 413 n.12; Schurke
, 898 F.3d at 9 22 & n.14. Bu t because no active interpretive dispute exists at this tim e as CET’s claim s are pleaded, these claim s are n o t s ub

j e ct to resolution under the CBA. 7 Nor would analogous state law claim s be rem ovable under § 301 of LMRA if CET had raised the claim s in state court.

7 Therefore, the m ajority has it backward in saying that CET m u st first “exhaust the grievance process” and then r eturn to federal court with it s c l a i m s

. Majority at 2 3. Moreover, t he m ajority’s prom ise that CET

can return to federal court after arbitration is an em pty one. This prom ise would m ake sense if the m ajority held it was necessary for arbitration to resolve a key issue in CET’s RICO claim s, and then CET could l itigate the

rem ainder. Cf. Schurke
, 898 F.3d a t 9 2 2 & n.14. But because the

m ajority does not an d c a n n o t do so—because there is n o such k ey issue—its prom i se is empty.C O LUMB I A E X P O R T T E R M I N AL V

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Because C ET’s RICO claim s are not a “dispute

. . . as to t h e interpretation, application, or violation of any provis i o n of” the C BA, there is no “grievance,” as defined in the CBA. The arbitration agreem ent is not “am biguous ab o ut whether it covers the dispute at h and,” Granite R ock
, 561 U.S. at 310, because the CBA is not susceptible to an in te r p r e tation that CET’s RICO claim s r equire an interpretation of the CBA. M ajority at 1 9–20. There is no am biguity that w ould g i v e rise to a presum

ption of arbitrability. Because “a court m ay subm it to arbitration only those disputes that the parties have agreed to subm it,” id. at 302 (cleaned up), the m ajority errs in holding that CET’s claim s are subject to the C BA’s grievance and arbitration procedure.

E

The m ajority opini on is both erroneous and internally inconsistent. F irst, it presents an erroneous theory of LMRA preclusion. Under the m ajority’s n ew ru l e , alm ost any

em ploym ent-related dispute between par t i e s covered by a CBA is precluded and s e n t to arbitration, even though the Suprem e Court has expres s ly disclaim ed this approach and, unlike the RLA, LMRA itself does not require arbitration o f every precluded claim

. See Schurke
, 8 9 8 F. 3 d at 918 n.7. 8 Se cond, even though the m ajority g oes on to hold that it

rem ains necessary to determ ine whether CET’ s claim s are covered b y the arbitration provisio n , t h e m ajority fails to

8 The m ajority disputes this characteriz ation, Majority at 22, but the

m ajority points to no basis for its conclusion that CET’s RICO claim s are “substa nt i a lly dependent on interpretation of the CBA” ( Majority at 1 6 ) other than its r easoning that the defendants who allegedly defrauded CET

were parties to a CBA and can n ow m anufacture CBA-based defenses to

com p el arbitration.C O LUMB I A E X P O R T T E R M I N AL V

. ILWU 42

apply the Gra n i te Rock fram ework correctly, and instead holds th a t t h e CBA applies based on m eritless, hypothetical connections to CBA provisions. Cf

. Schurke
, 898 F.3d

a t 921; Cramer
, 255 F.3d at 691–92. This approac h i s directly contrary to the Suprem e Court’s labor arb i t ration p reced e n t s, w h ich prevent a court from com pellin g arb itratio n of disputes that the parties have not agreed to arbitrate.

The m ajority offers the reassurance that workers, at least, will n ot be com

pelled to arbitrate all t h e i r disputes, because

our cases allow workers to litigate claim s based on s t a tutes that provide “substantive g uarantees for workers.” Majority
at 23–24. Under this rationale, o n l y e m ployers will have to arbitrate their claim s w ithout their consent. But the Suprem e Court’s labor arbitration precedent does not perm it t h is l o p sided interpretation of LMRA. If the CBA expres s l y requires the arbitratio n o f a federal statutory claim
, the worker is bound to arbitration, regardless of any “substantive guarantee.” S

ee Pe n n Pl aza , 556 U.S. at 256 n.5, 263–64. And by the sam e token, if the em ployer did not consent to arbitrate a federal statutory claim
, then no labor policy considerations can require t h e e mployer to do so. See Granite Rock , 561 U.S. at 299, 303.

T ak e n to g eth er, t

h e m ajority’s m any m isstatem ents of law upend the carefully lim ited scope of § 301 of LMRA that our circuit has so consistently upheld and give future defendants
new, pre v i o usly rejected, ways o f depriving CBA-covered plaintiffs of their rights to a judicial forum and to vindication of independent statutory rights. I therefore dissent.