Opinion ID: 855223
Heading Depth: 4
Heading Rank: 2

Heading: Peterson Award

Text: As explained supra, the Union alleges that it communicated Boldra’s misconduct in the first arbitration to Peterson. We can therefore infer that Peterson was fully aware that, when a neutral arbitrator had proposed ruling against the Railway, the Railway’s representative had threatened the arbitrator with never working again for a Class One Railroad. It is therefore plausible, as the Union alleges, that Peterson himself wanted to work for a Class One Railroad again, and might have been concerned that he, like Zimmerman, would be threatened if he chose to rule against the Railway. Based on these allegations, Peterson’s issuance of the Award in favor of the Railway could conceivably be the result of corrupt action, for reasons similar to those related to the Zimmerman Order. Of course, the Union would have to substantiate its allegations by clear and convincing evidence at the summary judgment phase, or perhaps at a trial. Because we deal only with this case at the motion to dismiss stage, we need conclude only that the Union’s allegations state a plausible claim upon which relief can be granted. They do so here. 36 UNITED TRANSP . UNION V . BNSF RAILWAY CO . Even if the Union were unable to prove that Peterson acted under an implicit threat in issuing an award in favor of the Railway, § 153(q) First nevertheless allows for the setting aside of the Peterson Award as the tainted product of Boldra’s alleged corruption, if such corruption (as defined herein) is proved by the Union by clear and convincing evidence. Section 153(q) First states that the district court may “set aside” an order “for fraud or corruption by a member of the division making the order.” Under the plain terms of the statute, the Peterson Award can be set aside because Boldra was a member of the Peterson Board and, under the Union’s allegations, he acted corruptly. Moreover, under those allegations, the Peterson Board would not have existed but for corruption by Boldra. That is, had Boldra not threatened Zimmerman, who then recused herself, there would have been no Peterson proceedings and hence no Peterson Award. Furthermore, the Union’s allegations state that Boldra’s corruption had a direct causal relationship to the Peterson Award. The Union contends that the Railway’s intended purpose in leveling the economic threat against Zimmerman was, inter alia, to re-list the case and acquire a new hearing in which it might (and did) prevail. Indeed, because the Railway’s deficiency in the Zimmerman proceedings was apparently a failure to include evidence of the discharged employee’s prior violation, a second hearing offered Boldra an opportunity to enhance his arguments before a new neutral arbitrator. Thus, under the allegations set forth in the Union’s Petition for Review, the Peterson Award was both the intended and actual product of Boldra’s alleged corruption. Accordingly, under § 153(q) First, the Peterson Award can be “set aside . . . for corruption” by Boldra, the Railway’s representative in the proceeding and a necessary voting UNITED TRANSP . UNION V . BNSF RAILWAY CO . 37 member in order to achieve a majority award in favor of the Railway.18 The Railway asserts that the Peterson Award should instead be viewed as curing the alleged corruption that occurred during the Zimmerman proceedings. It contends that, because no threat was made during the Peterson proceedings, Peterson’s decision to issue the award in the Railway’s favor was based on his independent, neutral judgment. The Peterson Award, it argues, is therefore the outcome that the Railway would have acquired had it been given a new hearing without a corrupt arbitrator. The Railway contends that the Union may not be happy with the Peterson Award, but the harm from the alleged corruption has been cured by the issuance of that Award. This argument fails on several accounts. First, as a preliminary matter, the Union’s allegations contradict the premise that, because no explicit threat was made during the Peterson hearing, no threat could have affected the outcome of those proceedings. The Union alleges that, because Peterson was fully aware of the threat made during the Zimmerman proceedings, the threat actually carried over into the Peterson proceedings. Thus, at the motion to dismiss 18 The district court believed that the Peterson Award could not be set aside because the alleged corruption had not been used “to obtain the award.” Pacific & Arctic Railway, 952 F.2d 1144, 1151 (9th Cir. 1991). In fact, as explained supra in text, under the allegations of the complaint, that is exactly what the Railway was seeking to accomplish with its economic threat to Zimmerman: acquire a new hearing in which it could prevail. It is true that the Railway could not guarantee itself an award in its favor. However, there is no guarantee requirement in Pacific & Arctic Railway. If the Railway used corruption “to obtain the [Peterson A]ward,” it can be set aside. 38 UNITED TRANSP . UNION V . BNSF RAILWAY CO . stage, drawing all inferences in favor of the non-moving party, we cannot accept the Railway’s argument. Second, and more fundamental, the Railway’s argument is properly one of remedy: that the remedy for the alleged corruption at the Zimmerman proceedings would have been to remand for a new hearing before a different neutral arbitrator and that such a hearing effectively occurred here in the form of the Peterson proceedings. As we discuss further infra, we cannot determine the appropriate remedy at this stage of the proceedings, and thus the Railway’s argument is premature. Third, even if an untainted hearing were the appropriate remedy, the Peterson proceedings fail to meet this description because Boldra, the Railway representative who allegedly made the threat of economic retribution, was a member of the Board that issued the Peterson Award and a necessary signatory to it. Even if the Peterson Award were free of Zimmerman’s alleged taint, it is not free of Boldra’s. Thus, as alleged, the Peterson Board and the Peterson Award were tainted. These and other factual matters may be litigated at the summary judgment or trial stage. We cannot conduct a factual inquiry here. At this stage, however, on the basis of the Union’s allegations, we reject the Railway’s curing argument and hold that, in asking the district court to set aside the Peterson Award, the Union stated a claim upon which relief can be granted.