H onor abl e D onal d C . Pogue, C hi ef J udge, U ni t ed St at es C our tof I nt ernat i onal T r ade, 1 s i t t i ng bydes i gnat i on. NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

_____________ N os . 11- 1134 & 11- 1225

_____________ W I LKE S BARRE HOSP I TAL COM P ANY , LL C, A ppel l ant/ C r os s - A ppel l ee i n 11- 1134

v. W Y O M I N G V A LLE Y N U RSE S A SSO CI A TI O N PA SN A P,

A ppel l ee/ C r os s - A ppel l anti n 11- 1225

_____________ O n A p p e a l f

ro m th e U n ited S tate s D istric t C o u rt F o r th e M id d le D istric t o f P e n n sy lv a n ia ( N o. 10- cv- 1421) D i s tr i ctJ udge: H onor abl e W i l l i am J. N eal on Subm i tt ed Pur s uantt o T hi r d C i r cui tL A R 34. 1( a)

N ovember17, 2011 B efor e: FU E N T E S and C H A G A R E S, C i r cui tJ udges and PO G U E , J udge. 1 ( Fi l ed D ece m ber1, 2011)

____________ OP I NI ON

____________C H A G A R E S, C i r cui tJ udge.

W i l kes - B arr e H os pi t al C om pany , L L C ( “the H os pi t al ”) appea l s the dec i s i on of the D i s tr i ctC our tt o denyi t s pet i t i on t o vaca t e the arbi tr at i on aw ar d agai ns ti ti n favorof W y o m in g V a lleyN u rse s A ss o c iatio n /P A S N A P (“ th e U n io n ” ). T h e U n io n c ro ss -a p p e a ls the D i s tr i ctC our t ’ s deni al of i t s r eques tforatt orney s ’ fee s and cos t s . Forthe r eas ons t hat f o llo w , w e w ill a f

f ir m th e ju d g m e n t o f

th e D is tr ic t C o u rt . I. W e w r i t e forthe part i es ’ benef i tand r eci t e onl ythe fa ct s es s ent i al t o our di s pos i t i on. O n J une 9, 2009, the H os pi t al t erm i nat ed A l es s andr o R endi na, a r egi s t er ed n u rs e , f o r w h a t it a rg u e s w a s “

ju s t c a u s e ,” o n g ro u n d s o f p a tie n t c a re a n d in s u b o rd in a tio n . A ppendi x ( “A pp. ”) 138- 39. T he U ni on, pur s uantt o the governi ng C ol l ect i ve B ar gai ni ng A gr eement( “C B A ”) , fi l ed a gr i evanc e on R endi na’ s behal f ar gui ng the H os pi t al di d not h a v e ju st c a u se to ter m in a te R e n d in a . A p p . 1 3 9 . T h e p a rties su b m itt e d th e m a tter to arbi tr at i on and a he ar i ng w as hel d on M ar ch 10, 2010. A pp. 140. T he arbi tr at ori s s ued hi s deci s i on on J une 9, 2010, fi ndi ng thatthe H os pi t al di d nothave j us tcaus e for t erm i nati ng R end i na an d o rder i ng him t o b e rei nst at ed w i th fu l l seni ori tyand ben efi t s, r educe d bya t en- days us pens i on for“br eac h of epi demi ol ogyuni ver s al s t andar ds and/ or bl ood bor ne pathogen s t andar ds . ” A pp. 147- 48, 153- 55. T he H os pi t al fi l ed a pe t i t i on t o vaca t e the arbi tr at or ’ s aw ar d on J ul y8, 2010. A pp. 26. O n J ul y20, 2010, the U ni on fi l ed i t s ans w erand count er cl ai m , s eeki ng enfor cement of the arbi tr at i on aw ar d and cos t s , i ncl udi ng att orney s ’ fee s . A pp. 26. T he U ni on fi l ed a3

m ot i on forj udgm enton the pl eadi ngs . T he H os pi t al fi l ed a c r os s - m ot i on forj udgm enton the pl eadi ngs , abandoni ng the cl ai m s i tr ai s ed i n i t s pet i t i on thatthe arbi tr at orexce eded hi s pow er s byr et ai ni ng j ur i s di ct i on t o r es ol ve di s put es ar i s i ng fr om the aw ar d and thatt he a rb itrato r d id n o t ap p lyth e c o rre c t sta n d a rd f o r h is re v iew o f

th e d isc h a rg e , rais in g o n ly th e iss u e o f

w h e th e r th e a rb itrato r e x c e e d e d th e sc o p e o f h is a u th o rityb yf

a ili n g to lim it h is d e c is io n to u p h o ld in g o r d e n y in g th e g ri e v a n c e . A p p . 1 9 -2 0 , 1 5 9 -6 0 . II. T h e D istric t C o u rt h a d ju risd ictio n p u rsu a n t 2 9 U .S .C . § 1 8 5 a n d w e h a v e a p p e llate j ur i s di ct i on pur s uantt o 28 U . S. C . § 1291. O urr evi ew of the D i s tr i ctC our t ’ s j udgm enton the p lead ing s u p h o lding the a rbitrati o n aw ard is plen aryan d “w e a p p lythe s am e stan d ard the di s tr i ctcourts houl d have appl i ed i n r evi ew i ng the arbi tr at i on aw ar d. ” Exxon Shi ppi ng C o. v. E xxon Seamen’ s U ni on, 73 F. 3d 1287, 1291 ( 3d C i r . 1996) ( ci t i ng S tr o eh m an n B ak eries, I n c. v. L o ca l 77 6 , Int’l B h d . o f T ea m sters , 969 F. 2d 1436, 1440- 41 ( 3d C i r . 1992) ) ; Si ki r i ca v. N at i onw i de I ns . C o. , 416 F. 3d 214, 219- 20 ( 3d C i r . 2005) (c itin g J a b lo n s k i v . P a n A m . W o rl d A ir w a y s , In c ., 8 6 3 F .2 d 2 8 9 , 2 9 0 (3 d C ir . 1 9 8 8 )) . O urr evi ew of the D i s tr i ctC our t ’ s deni al of a pe t i t i on foratt orney s ’ fee s and cos t s i n a s ui tt o compel a partyt o abi de byan arbi tr at i on aw ar d i s foran abus e of di s cr et i on. See T ea m sters L o ca l U n ion N o . 7 6 4 v . J. H . M erritt and C o . , 7 7 0 F . 2 d 4 0 , 4 3 n . 2 (3d C ir . 1 9 8 5 ). III .4

T he H os pi t al cont ends thatthe C B A , i n A r t i cl e 13, Sect i on 2, r equi r ed an “ up or dow n” r evi ew of the gr i evanc e bythe arbi tr at orbeca us e i tpr ovi ded: T he arbi tr at ors hal l have the author i tyonl yt o i nt erpr etthe t erm s and pr ovi s i ons of the A gr eementand s hal l have no a uthor i tyt o add t o, m odi fyorchange anyof the p ro v isio n s h e re in . T h e a rb itrato r sh a ll h a v e th e a u th o rityo n lyto d e n yo r u p h o ld th e g ri e v a n c e . A p p . 5 5 . T h e H o sp ital a rg u e s th a t th e a rb itrato r o n lyh a d th e c o n tra c tu a l au th o rity re in sta te R e n d in a o r to u p h o ld th e ter m in a tio n b a se d o n a f in d in g o f ju st c a u se , b u t d id nothave the contr actual author i tyt o r endera part i al orm i xed r emedyof a 10- day s u s p e n s io n a n d re in s ta te m e n t. T h e U n ited S tate s S u p re m e C o u rt h a s h e ld th a t “th e c o u rts p lay on lya lim ited ro le w hen as ked t o r evi ew the dec i s i on of an a rbi tr at or . ” U ni t ed Paperw or ker s I nt ’ l U ni on, A F L -C IO v . M isc o , In c ., 4 8 4 U .S . 2 9 , 3 6 (1 9 8 7 ). “T h e c o u rts a re n o t au th o riz e d to re c o n sid e r th e m e rits o f a n a w a rd e v e n th o u g h th e p a rties m a ya lleg e th a t th e a w a rd re sts o n erro rs of

fa ct or o n m isi n terpretati o n o f th e c o n tr ac t . . . A s lon g as th e a rbitrator’s a w a rd ‘d ra w s its e ss e n c e f ro m th e c o llec tiv e b a rg a in in g a g re e m e n t,’ an d is n o t m e re ly ‘his o w n b ran d o f in d u str ial justi ce , ’ th e a w ard is l eg it im ate.” Id. (qu o ti n g S teelw o rke rs v . E n ter . W h e e l & C a r C o rp ., 3 6 3 U .S . 5 9 3 , 5 9 7 (1 9 6 0 )). “ [ A ]s lo n g a s th e a rb itrato r is e v e n a rg u a b lyc o n stru in g o r a p p ly in g th e c o n tra c t an d a c tin g w ith in th e sc o p e o f h is a u th o rity , tha t a c o u rt is c o n v in c e d h e c o m m itt e d se rio u s e rro r d o e s n o t su f f ice to overturn hi s deci s i on. ” I d. at38. T he Supr eme C our thas fur therhel d that“[w ] hen an arbi tr at ori s comm i s s i oned t o i nt erpr etand appl ythe col l ect i ve bar gai ni ng agr eement , he5

is to b ri n g h is in f

o rm e d ju d g m e n t to b e a r i n o rd e r t o re a c h a f a irs o lu tio n o f

a p ro b le m . T hi s i s es peci al l ytrue w hen i tcomes t o form ul at i ng r emedi es . T her e the nee d i s for fl exi bi l i tyi n m eet i ng a w i de var i etyof s i tuat i ons . ” St eel w or ker s v. E nt er . W heel & C ar C o rp., 3 6 3 U . S . 5 9 3 , 5 9 7 (19 6 0 ). T he p art i es can l i m i tan arbi trat or’ s abi l i tyt o craftrem edies w i th an exp res s s t at ement . See M i s co, 484 U . S. at41 ( hol di ng part i es m ayl i m i tdi s cr et i on of arbi tr at or w i th r es pectt o r emedi es ) ; H i l l v. St at en I s l and Zool ogi cal Soc’ y , 147 F. 3d 209, 213- 14 ( 2d C i r . 1998) ( “B oth t he Supr eme C our tand thi s courthave s ai d thata l i m i t at i on on the arbi trat or’ s abi l i tyt o sub st i tute a l esserpen al tyw here he o r s he h as fou nd that j ustcause d id n o t ex ist m u st b e sta ted e x p re ss ly .”). T h e H o sp ital a rg u e s th a t A rticle 1 3 , S e c tio n 2 is s u c h a n e x p re s s s ta te m e n t lim itin g th e a rb itr a to r’ s a u th o ri ty to is s u e a m o d if ie d p e n a lty. H o w e v e r, A rticle 1 3 , S e c tio n 2 ’s s tate m e n t th a t “[ t]h e a rb itrato r sh a ll h a v e th e a u th o rity o n lyto d e n yo r u p h o ld th e g rie v a n c e ,” w h e n re a d in c o n tex t, do e s n e c e ss a rilyn o t re late to avai l abl e r emedi es . A s the D i s tr i ctC our tnot ed, the fol l ow i ng s ent ence i n the s ect i on addr es s es damages , w hi ch contr adi ct s the H os pi t al ’ s ar gum entthatthe arbi tr at oronl yhad th e a u th o rityto re in sta te R e n d in a o r u p h o ld h is te rm in a tio n . A p p . 5 5 -5 6 (“ D a m a g e s, if aw ar ded, s hal l be r educe d bythe gr i evant ’ s r ece i ptof unempl oym entcompensa t i on benef i t s , w or ker ’ s compensa t i ons benef i t s , earni ngs fr om anothers our ce, empl oym entor otherw i s e, and/ orfai l ur e t o m i t i gat e bys eeki ng empl oym entand/ orearni ngs fr om another s o u rc e .” ).6

B ec au se in terpretati o n o f th e C B A as g ran ti n g the a rbitrator the au tho ri tyto aw ard a modi fi ed pena l ty , as the arbi tr at orr ead the C B A , “dr aw s i t s es s ence fr om the [CB A ] ”, w e w i l l aff

i r m the D i s tr i ctC our t ’ s deci s i on t o enfor ce the arbi tr at i on aw ar d and denyt he p e tit io n to v a c a te it. I V. T he U ni on cr os s appea l s the D i s tr i ctC our t ’ s deci s i on nott o gr antthe U ni on att orney s ’ fee s and cos t s . “I n s ui t s t o compel one partyt o s ubm i tt o arbi tr at i on orabi de byan aw ar d, fee s ar e gene r al l yaw ar ded i f the def aul t i ng partyact ed w i thoutj us t i fi cat i on, o r i f th e p artyresist ing arb itrati o n d id n o t hav e a ‘reaso n ab le ch an ce to p rev ail . ’” C hauff eur s , T eamst er s and H el per s , L ocal U ni on N o. 765 v. St r oehmann B r os . C o. , 625 F .2 d 1 0 9 2 , 1 0 9 4 (3 d C ir. 1 9 8 0 ) (c itatio n s o m itt e d ); se e a lso M o b il O il C o rp . v . In d e p . O il W o rk e rs U n io n , 6 7 9 F .2 d 2 9 9 , 3 0 5 (3 d C ir. 1 9 8 2 ) (“ U n d e r th e A m e ric a n ru le, e a c h p a rty nor m al l ym us tbearthe bur den of i t s ow n l egal expens es , i ncl udi ng att orney s ’ fee s . O ne of the narr ow exce pt i ons t o t hi s rul e i s a fi ndi ng thatthe l os i ng partyl i t i gat ed i n bad fa i th, vexat i ous l y , orforoppr es s i ve r eas ons . ” ( ci t i ng St r aub v. V ai s m an & C o. , 540 F. 2d 591, 600 ( 3d C i r . 1976) ) ) . T he U ni on ar gues thati ti s ent i t l ed t o att orney s ’ fee s beca us e the H os pi t al abandone d t w o of the thr ee c l ai m s fr om i t s compl ai nti n i t s m ot i on forj udgm ent on the pl eadi ngs and i tdi d nothave a “r eas onabl e cha nce of s ucce edi ng” on the cl ai m t hat itarg u ed b ef

o re the D istri ct C o u rtan d w ith w h ich w e d ea ltab o v e. T h e D istri ct C o u rt found thatther e w as no evi dence thatthe H os pi t al br oughtthe ac t i on i n bad fa i th and that th e H o sp ital’s d e c isio n to f o c u s o n its p rim a ryc laim a n d a b a n d o n se c o n d a ryc laim s d id7

n o t d e m o n stra te b a d f

a ith . W e d o n o t b e liev e th e D istric t C o u rt a b u se d its d isc re tio n in reachi ng i t s conclusi on that the U nion w as not ent i t l ed to at t orney s’ fees and cost s. B ec au se th e D istri ct C o u rtd id n o t abu se it s d iscreti o n in d ec li n ing to aw ard a tto rn e y s ’ f

e e s a n d c o s ts , w e w ill a f f ir m . V. F o r t h e f o re g o in g re a s o n s , w e w ill a f f ir m th e ju d g m e n t o f

th e D is tr ic t C o u rt .