Court Opinion

ID: 4286382
Source: CourtListenerOpinion
Date Created: 2018-06-20 17:00:41.347882+00
Date Added: 2024-06-11T14:09:00.485239
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

NU IMAGE, INC., a California             No. 16-55451
corporation,
                 Plaintiff-Appellant,    2:15-cv-05704-
                                           CAS-AFM
                 v.

INTERNATIONAL ALLIANCE OF                  OPINION
THEATRICAL STAGE EMPLOYEES,
MOVING PICTURE TECHNICIANS,
ARTISTS AND ALLIED CRAFTS OF THE
UNITED STATES, ITS TERRITORIES
AND CANADA, LOCAL 720, AFL-CIO,
CLC,
               Defendant-Appellee.

     Appeal from the United States District Court
         for the Central District of California
     Christina A. Snyder, District Judge, Presiding

       Argued and Submitted December 7, 2017
                Pasadena, California

                  Filed June 20, 2018
2                      NU IMAGE V. IATSE

        Before: Paul J. Kelly, Jr., * Consuelo M. Callahan,
                and Carlos T. Bea, Circuit Judges.

                     Opinion by Judge Kelly;
                      Dissent by Judge Bea

                          SUMMARY **

                            Labor Law

    The panel affirmed the district court’s dismissal for lack
of subject matter jurisdiction of an action brought under the
Labor Management Relations Act.

    An employer alleged that a union engaged in intentional
and negligent misrepresentation to induce it to enter into a
collective bargaining agreement. The employer sought a
declaratory judgment that part of the CBA was invalid.

    The panel held that § 301(a) of the LMRA grants
jurisdiction only for suits that claim a violation of a CBA,
which the employer did not do. The panel rejected the
argument that the LMRA grants a district court jurisdiction
to hear any case in which a party, or third party, has alleged
a violation of a CBA. The panel concluded that the court’s
holding in Rozay’s Transfer v. Local Freight Drivers, Local
208, Int’l Bhd. of Teamsters, Chauffeurs, Warehousemen &

    *
      The Honorable Paul J. Kelly, Jr., United States Circuit Judge for
the U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
                    NU IMAGE V. IATSE                      3

Helpers of Am., 850 F.2d 1321 (9th Cir. 1988), that an
employer can sue under § 301(a) for declaratory relief to
void a provision of a CBA without alleging a contract
violation, could not stand following Textron Lycoming
Reciprocating Engine Div., Avco Corp. v. United Auto.,
Aerospace, & Agric. Implement Workers of Am., 523 U.S.
653 (1998). The panel further held that jurisdiction was not
authorized under Textron’s holding that, in the course of
deciding whether a plaintiff is entitled to relief for the
defendant’s alleged violation of a contract, a court may,
consistent with § 301, adjudicate an affirmative defense that
the contract was invalid.

    Dissenting, Judge Bea wrote that he agreed with the
majority that Textron abrogated the reasoning underlying
Rozay’s Transfer. Diverging from the majority, however,
Judge Bea wrote that, under Textron, § 301(a) extends
subject matter jurisdiction to actions seeking declaratory
relief from alleged violations of a CBA. Because the
employer sought relief from its accused violation of the
parties’ CBA, its claims should be allowed to proceed in
federal court.
4                    NU IMAGE V. IATSE

                         COUNSEL

Martin D. Katz (argued), Richard W. Kopenhefer, and
Matthew G. Ardoin, Sheppard Mullin Richter & Hampton
LLP, Los Angeles, California, for Plaintiff-Appellant.

David A. Rosenfeld (argued), William A. Sokol, and
Michael D. Burstein, Weinberg Roger & Rosenfeld,
Alameda, California, for Defendant-Appellee.

                          OPINION

KELLY, Circuit Judge:

    This case concerns the scope of federal subject matter
jurisdiction under section 301(a) of the Labor Management
Relations Act (“LMRA”), 29 U.S.C. § 185(a). Plaintiff-
Appellant Nu Image, Inc., brought suit in federal district
court under section 301(a) against Defendant-Appellee
International Alliance of Theatrical Stage Employees,
Moving Picture Technicians, Artists and Allied Crafts of the
United States, Its Territories and Canada, AFL-CIO
(“IATSE”). Nu Image claimed that IATSE engaged in
intentional and negligent misrepresentation to induce Nu
Image to enter into a collective bargaining agreement
(“CBA”) and sought a declaratory judgment that part of the
CBA was invalid. The district court dismissed the action for
lack of subject matter jurisdiction, holding that section
301(a) grants jurisdiction only for suits that claim a violation
of a CBA, which Nu Image did not do. Nu Image, Inc. v.
Int’l All. of Theatrical Stage Emps., No. 2:15-CV-05704-
CAS(AFMx), 2016 WL 917887, *4, *7 (C.D. Cal. Mar. 7,
2016). Having jurisdiction under 28 U.S.C. § 1291, we
affirm.
                       NU IMAGE V. IATSE                              5

        FACTUAL AND PROCEDURAL HISTORY

    Prior to 2006, Nu Image, an independent movie
production and marketing company, and IATSE, a labor
organization that represents motion picture production crew
members, entered into single production CBAs. These
CBAs governed their relationship on a per-motion-picture
basis. After 2006, Nu Image and IATSE entered into
negotiations for an “Overall CBA” that would govern all
motion picture productions. The Overall CBA required Nu
Image to make residual contributions to the Motion Picture
Industry Health and Pension Plans (the “Plans”).

    During negotiations for the Overall CBA, Nu Image
alleges that it told IATSE “it would not agree to an Overall
CBA if it were required to remit Residual Contribution
payments to the Plans.” 3 ER 318. Nu Image claims that
IATSE orally represented that neither IATSE nor the Plans
would seek contribution. Between 2006 and 2009, Nu
Image did not pay into the Plans and neither the Plans nor
IATSE took the position that Nu Image was required to pay.

    On May 13, 2013, however, the Plans sued Nu Image for
breach of the Overall CBA for failure to pay residual
contributions to the Plans from 2006 to 2010. 1 Nu Image
informed the Plans of the prior oral agreement between Nu
Image and IATSE; however, IATSE denied that any oral
agreement occurred. On March 9, 2015, IATSE filed a
grievance under the Overall CBA against Nu Image for its
failure to pay into the Plans, which IATSE maintained was a

    1
      The Plans later filed a second suit on December 30, 2014, claiming
a failure to pay from 2011 through 2014. That lawsuit was dismissed
pending a further audit of Nu Image. On February 4, 2015, Nu Image
settled the Plans’ first lawsuit.
6                   NU IMAGE V. IATSE

“continuing breach of the parties’ [CBA].” 3 ER 224. Nu
Image and IATSE thereafter entered in arbitration. Nu
Image soon hired new counsel, put the arbitration on hold,
and filed the present suit. Asserting jurisdiction under
section 301(a), Nu Image claimed that as a result of IATSE’s
intentional and negligent misrepresentation, Nu Image
incurred and will continue to incur significant costs. Nu
Image also claimed that IATSE claimed “that Nu Image
breached the CBA . . . by failing to pay Residual
Contributions.” 3 ER 314. Nu Image finally sought
declaratory relief requesting “a judicial determination that
the Residual Contribution provisions in the [Overall CBA]
do not apply to Nu Image.” 3 ER 324. IATSE filed a motion
to dismiss the complaint for lack of subject matter
jurisdiction arguing that Nu Image’s complaint was not a suit
for violation of a contract. See Fed. R. Civ. P. 12(b)(1). The
district court agreed and dismissed the action. This timely
appeal followed.

                       DISCUSSION

    A district court’s dismissal for lack of subject matter
jurisdiction is reviewed de novo. Young v. United States,
769 F.3d 1047, 1052 (9th Cir. 2014).

    This case presents a difficult question regarding the
scope of the jurisdiction granted by section 301(a). Nu
Image argues that the LMRA grants a district court
jurisdiction to hear any case in which a party, or third party,
has alleged a violation of a CBA. According to Nu Image,
it does not matter whether the plaintiff in a given case
specifically alleges a violation of a CBA as an element of its
claims. As a result, Nu Image contends that the district court
has jurisdiction to hear this case because it arises out of the
fact that IATSE accused Nu Image of violating the Overall
CBA.
                    NU IMAGE V. IATSE                       7

    IATSE, on the other hand, argues that section 301(a)
grants jurisdiction to hear only those cases in which the
plaintiff alleges a claim based on a violation of a CBA.
Because Nu Image does not allege that there has been a
violation of the Overall CBA as an element of any of its
claims contained in its complaint, IATSE argues that section
301(a) does not provide the district court with subject matter
jurisdiction to resolve Nu Image’s claims. We agree.

    Section 301(a) grants federal courts jurisdiction to hear
“[s]uits for violation of contracts between an employer and
a labor organization.” 29 U.S.C. § 185(a). This statute is an
“exception to the primary jurisdiction doctrine [of the
NLRB] . . . designed to afford the courts jurisdiction to
resolve labor disputes that focused on the interpretation of
the terms of the collective bargaining agreement.” Pace v.
Honolulu Disposal Serv., 227 F.3d 1150, 1156 (9th Cir.
2000) (quoting United Ass’n of Journeymen v. Valley
Eng’rs, 975 F.2d 611, 614 (9th Cir. 1992)). Section 301(a)
is designed to allow federal courts the limited role of
“enforc[ing] . . . collective bargaining agreements.” Lewis
v. Benedict Coal Corp., 361 U.S. 459, 470 (1960).

    This seemingly simple statute is complicated by
precedent. We previously have allowed an employer to sue
under section 301(a) for declaratory relief and
misrepresentation to void a provision of a CBA. See Rozay’s
Transfer v. Local Freight Drivers, Local 208, Int’l Bhd. of
Teamsters, Chauffeurs, Warehousemen & Helpers of Am.,
850 F.2d 1321 (9th Cir. 1988). In Rozay’s Transfer, Rozay’s
Transfer, an employer, sued Teamster’s Local 208
(“Teamster’s”) under section 301(a) for fraudulent
inducement into executing a new CBA. Id. at 1323. During
the negotiations for the new CBA, Rozay’s had expressed
concern that it might not be able to pay trust fund
8                   NU IMAGE V. IATSE

contributions that would be owed under the new CBA. Id.
at 1324. Teamster’s told Rozay’s that it would ask the Trust
Fund to waive them. Id. When asked, however, the Trust
Fund refused to waive the contribution requirements. Id.
Teamster’s did not inform Rozay’s of the denial and it
entered into the new CBA. Id. Southwest Administrators,
the Trust Fund’s assignee, subsequently sued Rozay’s for
failure to pay into the fund. Id. Because Rozay’s could not
assert a fraudulent inducement claim against the fund under
the law, Rozay’s instead filed a separate suit against
Teamster’s for fraudulent inducement to recover its
damages. Id. at 1324–25. The district court resolved the
action in favor of Rozay’s. Id. at 1325. On appeal, union
amicus contested jurisdiction, arguing that this court did not
have jurisdiction over the claim because the NLRB had
exclusive jurisdiction. This court disagreed and held that the
district court had jurisdiction under section 301(a) to
“entertain this action alleging fraudulent inducement in the
formation of the agreement.” Id. at 1325–26.

    The parties agree that if Rozay’s Transfer remains good
law, then the district court had subject matter jurisdiction
over this case. Since Rozay’s Transfer, however, the
Supreme Court decided Textron Lycoming Reciprocating
Engine Division, Avco Corp. v. United Automobile,
Aerospace, and Agriculture Implement Workers of America,
523 U.S. 653 (1998), which calls into doubt Rozay’s holding.
Thus, the question before us is whether Rozay’s Transfer
remains good law and, if not, whether Textron now
forecloses section 301 jurisdiction over Nu Image’s claims.
See Miller v. Gammie, 335 F.3d 889, 899 (9th Cir. 2003).

   In Textron, the United Automobile, Aerospace and
Agricultural Implement Workers of America (“UAW”) and
Textron Lycoming Reciprocating Engine Division
                    NU IMAGE V. IATSE                        9

(“Textron”) were parties to a CBA that “required Textron to
give the Union seven days’ notice before entering into any
agreement to ‘subcontract out’ work.” 523 U.S. at 654–55.
Textron later announced that it would subcontract out its
work, causing many Union members to lose jobs. Id. at 655.
UAW sued under section 301(a) claiming that it was
fraudulently induced into signing a CBA and seeking a
declaratory judgment that the CBA was void. Id. Of
importance, UAW did not allege that either it or Textron had
violated the CBA. Id. Applying a textual analysis of section
301(a), the Court held that because “‘[s]uits for violation of
contracts’ under [section] 301(a) are not suits that claim a
contract is invalid, but suits that claim a contract has been
violated,” the district court lacked jurisdiction. Id. at 657
(emphasis added).

    After careful consideration of both opinions, we
conclude that Textron has abrogated the reasoning
underlying Rozay’s Transfer. In Rozay’s Transfer, citing
previously established circuit precedent, this court held that
the declaratory relief and misrepresentation claims could
move forward because “[s]ection 301 . . . applies not only to
suits for breach of a collective bargaining agreement once it
is duly formed, but also to suits impugning the existence and
validity of a labor agreement.” 850 F.2d at 1326. Textron
clearly states that section 301(a)’s grant of jurisdiction does
not sweep so broadly. 523 U.S. at 656. Thus, our holding
in Rozay’s, that an employer can sue under section 301(a)
for declaratory relief to void a provision of a CBA all
without alleging a contract violation, cannot stand after
Textron.

    This does not end the case though. Textron made clear
that its holding “does not mean that a federal court can never
10                  NU IMAGE V. IATSE

adjudicate the validity of a contract under [section] 301(a).”
523 U.S. at 657. Instead,

       [Section 301(a)] simply erects a gateway
       through which parties may pass into federal
       court; once they have entered, it does not
       restrict the legal landscape they may traverse.
       Thus if, in the course of deciding whether a
       plaintiff is entitled to relief for the
       defendant’s alleged violation of a contract,
       the defendant interposes the affirmative
       defense that the contract was invalid, the
       court may, consistent with [section] 301(a),
       adjudicate that defense.          Similarly, a
       declaratory judgment plaintiff accused of
       violating a collective-bargaining agreement
       may ask a court to declare the agreement
       invalid. But in these cases, the federal court’s
       power to adjudicate the contract’s validity is
       ancillary to, and not independent of, its power
       to adjudicate ‘[s]uits for violation of
       contracts.’”

Id. at 657–58 (emphasis added) (citation omitted). Nu Image
argues this language completely supports its position—Nu
Image is “a declaratory judgment plaintiff” that has been
“accused of violating a collective-bargaining agreement”
and is now asking the court to “declare the agreement
invalid.” While Nu Image may admit that its suit is one
claiming the contract is invalid (which Textron does not
allow), it argues that in this context “ancillary” refers to “a
federal court’s power to entertain a declaratory judgment
action as part and parcel of its jurisdiction over ‘suits for
violation of contracts’ under Section 301(a).” Aplt. Reply
                        NU IMAGE V. IATSE                             11

Br. at 13. Therefore, its suit passes through the jurisdictional
gateway and the court has jurisdiction.

    Nu Image’s reading of Textron ignores what Textron
commands: a party must first pass through the jurisdictional
“gateway” (by alleging a violation of contract) before asking
if any of its additional claims (such as its declaratory
judgment action to void the Overall CBA) are ancillary or
independent. Textron, 523 U.S. at 658.

    We hold that Nu Image has not crossed this initial
threshold. Its claim is that part of the Overall CBA is invalid
because IATSE misled Nu Image during the contract
negotiations. Complaint at 2, Nu Image, Inc v. Int’l All. of
Theatrical Stage Emps., No. 2:15-CV-05704 (C.D. Cal.
Mar. 7, 2016), ECF No. 1. Clearly, Nu Image seeks not the
enforcement of a contract, but rather the voiding of it. Nu
Image forthrightly asks “[f]or a judicial determination that
the Residual Contribution provisions in the Basic Agreement
do not apply to Nu Image.” Id. at 11. While its motivation
for seeking this relief may be an accusation of a contract
violation by IATSE, Nu Image did not bring suit “because a
contract has been violated.” Textron, 523 U.S. at 657.
Textron bars suits claiming a contract is void unless a
plaintiff also alleges as an element of its claim 2 a “violation
of the collective-bargaining agreement,” which Nu Image
has not done. Id. at 661. To the contrary, Nu Image does
not claim that either it or IATSE violated the Overall CBA.
To restate: Nu Image filed suit seeking to void the CBA
    2
       The dissent contends that section 301(a) does not require a
violation of the CBA as an element of the claim. However, if section
301(a) grants federal courts jurisdiction to hear only “suits that claim a
contract has been violated,” Textron, 523 U.S. at 657, it is unclear how
a suit could be filed in which a contract violation is not an element of
that claim.
12                       NU IMAGE V. IATSE

(which Textron clearly bars) based on an alleged state law
misrepresentation claim (a theory the NLRB arguably has
primary jurisdiction over, see id. at 662 (Stevens, J.,
concurring)), all under a statute that grants jurisdiction for
only “[s]uits for violation of contracts.” 29 U.S.C. § 185(a).
This is a bridge too far.

    Considering both the plain language of the statute,
Textron’s holding, and the limited role of federal courts in
labor disputes, we hold that Nu Image’s claim is too far
removed and too independent to pass through section
301(a)’s jurisdictional gateway. We are mindful that this
point has divided the circuits, compare Gerhardson,
698 F.3d at 1058 (“Textron only permits a litigant to raise
the validity of a contract as an affirmative defense; it does
not allow such claims to be asserted offensively”), with
Hous. Ref., L.P. v. United Steel, Paper & Forestry, Rubber,
Mfg., 765 F.3d 396, 406 n.16 (5th Cir. 2014) (“A plaintiff's
claim that it (and not the defendant) allegedly violated a
labor contract is sufficient to support section 301
jurisdiction.”), and J.W. Peters, Inc. v. Bridge, Structural &
Reinforcing Iron Workers, Local Union 1, 398 F.3d 967, 973
(7th Cir. 2005), as amended on denial of reh’g and reh’g en
banc, No. 04-2797, 2005 WL 957272 (7th Cir. Mar. 28,
2005) (holding that district court had jurisdiction over
declaratory judgment plaintiff “accused of violating the
terms of the collective bargaining agreement”), but in our
judgment, absent some affirmative claim by the plaintiff 3 of

     3
      Of course, once a plaintiff makes a claim of violation of contract,
the federal court obtains jurisdiction and section 301(a) “does not restrict
the legal landscape [the federal court] may traverse.” Textron, 523 U.S.
at 658.
                     NU IMAGE V. IATSE                       13

a violation of the contract, a district court does not have
jurisdiction under section 301(a).

    The dissent advances two principal reasons against our
reading of Textron. First, in its view, the examples provided
in Textron (after invocation of the “gateway” metaphor) are
all examples of the types of cases that automatically pass
through the gateway and by holding otherwise, we are
ignoring “clear guidance” in the form of Supreme Court
dicta. Second, the dissent suggests that Nu Image is without
recourse and our result favors IATSE. Neither reason is
persuasive. Under the dissent’s view, section 301(a) as a
jurisdictional grant is limitless.

    We reject the first reason because the dissent’s broad
reading of Textron’s gateway language does not make sense
in context. Supreme Court dicta should be given “due
deference,” but it is the Court’s holding that is ultimately
binding. See United States v. Montero-Camargo, 208 F.3d
1122, 1132 n.17 (9th Cir. 2000). Textron’s very next
sentence—“the federal court’s power to adjudicate the
contract’s validity is ancillary to, and not independent of, its
power to adjudicate ‘[s]uits for violation of contracts’”—
belies any notion that a party may pursue non-contract
violation claims without first alleging a violation of contract.
Concerning the second reason, Nu Image cannot complain
about inequity, having intentionally withdrawn from
arbitration to pursue a federal forum. The dissent also gives
no reason, and we see none, why Congress cannot create a
jurisdictional statute that at times allows one party into
federal court but not another. It is not strange at all that Nu
Image cannot file in federal court because IATSE could file
a claim. Cf. Franchise Tax Bd. of State of Cal. v. Constr.
Laborers Vacation Tr. for S. Cal., 463 U.S. 1 (1983).
14                  NU IMAGE V. IATSE

    In the end, the dissent’s reading of the statute would
expand section 301(a) beyond recognition. Any party
seeking to invalidate a contract would have a federal forum
merely by alleging that another party claimed, in any
context, a contract violation. Section 301(a), a limited
jurisdictional grant, cannot sweep so broadly.

    IATSE also argues that Rozay’s Transfer was implicitly
overruled by the Supreme Court’s opinion in Granite Rock
Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010). Because
we resolve the case on the reasoning above, we decline to
rule on the applicability of Granite Rock.

     AFFIRMED.

BEA, Circuit Judge, dissenting:

    The majority opinion ignores clear guidance from the
Supreme Court regarding the meaning of section 301(a) of
the Labor Management Relations Act (the “LMRA”), see
29 U.S.C. § 185(a), and, in doing so, reaches a formalistic
and impractical result which gives to a game-playing party,
who is perhaps in violation of a collective bargaining
contract (“CBA”), the option to avoid the federal court
jurisdiction provided by section 301(a) of the National Labor
Relations Act. Because I think this court is bound to give
the Supreme Court’s guidance deference, I respectfully
dissent.

                              I

   Plaintiff-Appellant Nu Image, Inc. (“Nu Image”) is an
independent movie production and marketing company.
Defendant-Appellee International Alliance of Theatrical
                     NU IMAGE V. IATSE                       15

Stage Employees, Moving Picture Technicians, Artists and
Allied Crafts of the United States, Its Territories and Canada
(“IATSE”) is a labor union that represents motion picture
production crew members.

     In 2006, Nu Image and IATSE negotiated a universal
CBA to govern their future dealings (the “Overall CBA”).
The Overall CBA incorporated by reference a form CBA
used by IATSE to govern its relationship with a variety of
production companies. The form CBA included a provision
that required production companies to make “residual
contribution” payments to certain defined benefit plans (the
“Plans”). During negotiations, Nu Image claims that it made
it clear that it would not enter into the Overall CBA if it were
required to make residual contribution payments to the
Plans.      Nu Image claims that, in response, IATSE
represented to Nu Image that neither IATSE nor the Plans
would seek residual contribution payments from Nu Image.
The parties then entered into the Overall CBA.

    For seven years, Nu Image and IATSE operated and
worked under the Overall CBA. Nu Image did not make
residual contribution payments to the Plans. Neither the
Plans nor IATSE requested residual contribution payments.
In May 2013, however, the Plans, as beneficiaries to the
Overall CBA, sued Nu Image for failure to make the residual
contribution payments from 2006 through 2010 (the “First
Plans-Nu Image Lawsuit”). Nu Image asked IATSE to
inform the Plans that Nu Image was not required to make
those payments, and to execute a side letter to that effect, but
IATSE declined to do so.

   When IATSE refused to execute the requested side letter,
Nu Image filed a grievance against IATSE under the Overall
CBA alleging that IATSE had fraudulently induced Nu
Image to enter into the Overall CBA (the “Nu Image
16                  NU IMAGE V. IATSE

Grievance”). Importantly, Nu Image could not raise these
arguments in the First Plans-Nu Image Lawsuit because
fraud in the inducement of the underlying contract is not a
defense in certain ERISA actions, such as the First Plans Nu-
Image Lawsuit. See Sw. Administrators, Inc. v. Rozay’s
Transfer, 791 F.2d 769, 775 (9th Cir. 1986). As a result, Nu
Image’s only remedy was to seek indemnification from
IATSE against the claims brought by the Plans in the First
Plans-Nu Image Lawsuit.

    In 2015, while the Nu Image Grievance was pending, Nu
Image settled the First Plans-Nu Image Lawsuit with the
Plans. But, in the meantime, the Plans sued Nu Image again,
this time alleging that Nu Image had failed to make the
required residual contribution payments from 2011 through
2014 (the “Second Plans-Nu Image Lawsuit”). The Second
Plans-Nu Image Lawsuit was dismissed without prejudice to
allow the Plans to conduct a further audit of Nu Image.

    In March 2015, IATSE submitted a grievance against Nu
Image, pursuant to the overall CBA. It claimed that Nu
Image breached the overall CBA by failing to make the
required residual contribution payments and that Nu Image’s
failure to make those payments was a “continuing breach”
of the Overall CBA (the “IATSE Grievance”). IATSE
sought to recover the difference between the residual
contribution payments Nu Image should have made under
the Overall CBA and the amount Nu Image had paid to the
Plans to settle the First Plans-Nu Image Lawsuit.

    Nu Image and IATSE moved toward arbitration on both
the Nu Image Grievance and the IATSE Grievance.
However, Nu Image then retained new counsel, who put the
grievance proceedings on hold. Subsequently, Nu Image
filed a complaint against IATSE in the District Court for the
Central District of California (the “Complaint”). The
                    NU IMAGE V. IATSE                      17

Complaint alleges claims for Intentional Misrepresentation,
Negligent Misrepresentation, and Declaratory Relief. In the
Complaint, Nu Image seeks a judicial determination that
residual contribution provisions of the Overall CBA do not
apply to Nu Image and a finding that IATSE must indemnify
Nu Image for any damages Nu Image incurs as a result of
the Plans’ lawsuits.

    The Complaint asserted that the district court had subject
matter jurisdiction pursuant to section 301(a) of the LMRA,
which allows district courts to hear “Suits for violation of
contracts between an employer and a labor organization.”
29 U.S.C. § 185. IATSE filed a motion to dismiss the
Complaint for lack of subject matter jurisdiction, arguing
that the Complaint was not a suit “for violation of” a
contract. See Fed. R. Civ. P. 12(b)(1). The district court
agreed with IATSE and dismissed the Complaint. In
response, Nu Image filed the instant appeal.

                              II

    This case presents a difficult question, made more
difficult by complicated precedent, regarding the scope of
the federal court jurisdiction granted by section 301(a) that
is complicated by precedent. Nu Image argues that the
LMRA grants district courts jurisdiction to hear any case in
which a party, or third party, has alleged a violation of a
CBA, regardless whether the plaintiff in a given case
specifically alleges a violation of a CBA as an element of its
claims. IATSE, on the other hand, argues that section 301(a)
grants jurisdiction to hear only those cases in which the
plaintiff alleges a claim based on a violation of a CBA.
Because Nu Image does not allege that there has been a
violation by IATSE of the Overall CBA as an element of any
of the claims in its Complaint, IATSE argues that section
18                      NU IMAGE V. IATSE

301(a) does not provide the district court with subject matter
jurisdiction in this case.

    As the majority recognized, we have previously allowed
claims substantively identical to Nu Image’s to proceed
under section 301(a). See Rozay’s Transfer v. Local Freight
Drivers, Local 208, Int’l Bhd. of Teamsters, Chauffeurs,
Warehousemen & Helpers of Am., 850 F.2d 1321 (9th Cir.
1988). In Rozay’s Transfer, we held that that the district
court had jurisdiction under section 301(a) to “entertain this
action alleging fraudulent inducement in the formation of the
agreement.” Id. at 1325–26. If Rozay’s Transfer remains
good law, the parties agree that the district court had subject
matter jurisdiction over Nu Image’s claims.

   The majority correctly notes that the subsequent
Supreme Court precedent has called our decision in Rozay’s
Transfer into doubt. See Textron Lycoming Reciprocating
Engine Div., Avco Corp. v. United Auto., Aerospace, Agric.
Implement Workers of Am., Int’l Union, 523 U.S. 653
(1998). Thus, the first question we must answer in this case
is whether Textron impliedly abrogated our decision in
Rozay’s Transfer. 1

    I agree with the majority that Textron clearly abrogated
the reasoning underlying Rozay’s Transfer. 2 In Textron, the

     1
      Textron did not directly address our opinion in Rozay’s Transfer.
Thus, any abrogation of our precedent would be implied, not direct.

    2
       In Textron, an employer and labor union negotiated a CBA.
523 U.S. at 654–55. During negotiations, the labor union repeatedly
asked the employer if it had any plans to shift its production to non-union
channels; the employer stated that it had no such plans. Id. After the
CBA had been signed, the employer announced plans to shift its
production to non-union channels. Id. The union filed suit in federal
                        NU IMAGE V. IATSE                              19

Supreme Court held that “‘Suits for violation of contracts’
under [section] 301(a) are not suits that claim a contract is
invalid, but suits that claim a contract has been violated.” Id.
at 656–58. The Textron explained that that a “Suit for
violation of” a contract “is one filed because a contract has
been violated.” Id. (emphasis in the original). The Court
concluded that because “the [plaintiff] Union neither
allege[d] that [the employer] has violated the contract, nor
[sought] declaratory relief from its own alleged violation,”
the suit was not one “for violation of” a CBA and, as a result,
there was no jurisdiction under section 301(a). Id. (emphasis
added).

    It is this last, underlined statement from the Textron court
that causes me to diverge from the majority’s opinion. In
short, although the majority is correct that Textron abrogates
the reasoning of Rozay’s Transfer, my view is that the
majority errs when it ignores Textron’s clear guidance that
section 301(a) extends subject matter jurisdiction to actions
seeking declaratory relief from alleged violations of a CBA.

    There are two relevant statements from Textron that lead
me to conclude that the district court had subject matter
jurisdiction over Nu Image’s claims. First, Textron states
that its holding “does not mean that a federal court can never

court, seeking a declaration that the CBA was invalid due to the
employer’s misrepresentation. Id. The union claimed the district court
had jurisdiction under section 301(a), but the district court dismissed the
suit because it did not view it as a “suit for violation” of the CBA. Id.
The third circuit reversed, holding that there was jurisdiction because the
suit sought to invalidate the CBA. Id. The Supreme Court reversed the
Third Circuit, finding that there was no jurisdiction under section 301.
Id.
20                   NU IMAGE V. IATSE

adjudicate the validity of a contract under § 301(a).”
Instead:

        [Section 301(a)] simply erects a gateway
        through which parties may pass into federal
        court; once they have entered, it does not
        restrict the legal landscape they may traverse.
        Thus if, in the course of deciding whether a
        plaintiff is entitled to relief for the defendant's
        alleged violation of a contract, the defendant
        interposes the affirmative defense that the
        contract was invalid, the court may,
        consistent with § 301(a), adjudicate that
        defense. Similarly, a declaratory judgment
        plaintiff accused of violating a collective-
        bargaining agreement may ask a court to
        declare the agreement invalid. But in these
        cases, the federal court’s power to adjudicate
        the contract’s validity is ancillary to, and not
        independent of, its power to adjudicate
        “[s]uits for violation of contracts.”

Id. (citations omitted) (emphasis added).

     The Textron Court went on to note that:

        [T]he Union neither allege[d] that Textron
        has violated the contract, nor [sought]
        declaratory relief from its own alleged
        violation. Indeed, as far as the Union’s
        complaint disclose[d], both parties [were] in
        absolute compliance with the terms of the
        collective-bargaining agreement. Section
                        NU IMAGE V. IATSE                              21

         301(a) jurisdiction does not lie over such a
         case.

Id. (emphasis added).

    When read in conjunction, these two statements imply
that had the union in Textron sought “declaratory relief from
its own alleged violation” of the CBA, the district court
would have had jurisdiction under section 301(a). Because
Nu Image seeks precisely that sort of relief in this case, these
statements from Textron support the conclusion that the
district court had jurisdiction over Nu Image’s claims. 3

    The majority makes much of the Textron court’s
statement regarding the “gateway” through which parties
must pass into federal court. But the majority’s reading of
that passage is both strained and inconsistent with other
portions of Textron. It is true that section 301(a) creates a
“gateway” through which parties must pass before a district
court may exercise jurisdiction over a claim that a CBA is
invalid. But the Textron court provides two examples of
cases that have passed through the jurisdictional gateway

     3
       IATSE argues that these statements are mere dicta and should not
overshadow Textron’s core holding. But IATSE’s position is untenable
in light of our repeated holding that we do “not treat considered dicta
from the Supreme Court lightly. Rather, we accord it appropriate
deference.” United States v. Montero-Camargo, 208 F.3d 1122, 1132
n.17 (9th Cir. 2000). Indeed, “Supreme Court dicta ‘have a weight that
is greater than ordinary judicial dicta as prophecy of what that Court
might hold’; accordingly, we do ‘not blandly shrug them off because
they were not a holding.’” Id. (quoting Zal v. Steppe, 968 F.2d 924, 935
(9th Cir.1992) (Noonan, J., concurring and dissenting)). This deference
is particularly persuasive in light of our rule that well-reasoned dicta in
panel opinions is the binding law of the circuit. See United States v.
Johnson, 256 F.3d 895, 914 (9th Cir. 2001).
22                     NU IMAGE V. IATSE

other than by alleging a violation of a contract as an element
of a claim. First, a defendant in a section 301(a) suit who
raises the invalidity of the CBA as a defense in a breach of
contract action. Second, a plaintiff who brings a declaratory
judgment action seeking relief from the plaintiff’s alleged
violation 4 of a CBA.

    The Textron court clearly meant both examples it gave
to serve as illustrations of cases where the parties had passed
through the gateway erected by section 301(a). That
understanding is further confirmed by the Textron court’s
later statement that the district court lacked jurisdiction, in
part, because the union did not seek “declaratory relief from
its own alleged violation” of the CBA, implying that the
district court would have had jurisdiction had the union
sought declaratory relief from its alleged violation of the
CBA. Seeking declaratory relief from an alleged violation
of a CBA is sufficient to pass through section 301(a)’s
gateway. If these two examples given by the Textron Court
do not provide an illustration of situations in which federal
courts have jurisdiction to hear disputes regarding CBAs, in
addition to cases in which a plaintiff asserts a breach of
contract action, what do the Textron Court’s words mean?
The majority opinion elides an answer.

    In this case, because Nu Image seeks relief from its
accused violation of the Overall CBA, it has passed through
section 301(a)’s “gateway,” and its claims should be allowed
to proceed in federal court. This result makes sense. After
all, a breach of contract claim and a claim seeking

     4
      Notably, the Textron court does not require a declaratory judgment
plaintiff to state in the complaint that it actually violated the CBA,
merely that it has been “accused” of violating the CBA, as Nu Image has
done here. 523 U.S. at 656.
                         NU IMAGE V. IATSE                              23

declaratory relief from an alleged violation of a contract are
flip sides of the same coin. It would be strange indeed if a
district court could exercise subject matter jurisdiction over
one, but not the other. Instead, the Supreme Court correctly
recognized that the power to hear declaratory judgment
actions seeking relief from an accused violation of a contract
is “ancillary” 5 to, or part and parcel with, a court’s power to
hear the underlying breach of contract action.

    5
       The parties vehemently disagree over what Justice Scalia
expressed when he used the word “ancillary.” IATSE argues that Justice
Scalia was referring to the court’s “ancillary jurisdiction,” thereby
implying that there had to be an independent basis for jurisdiction to
allow the court to reach a declaratory judgment action. That
interpretation is unpersuasive for a number of reasons. First, Justice
Scalia did not specifically invoke the doctrine of “ancillary jurisdiction,”
which allowed federal courts to exercise jurisdiction over certain claims
because they were closely related to claims over which the court had
subject matter jurisdiction and was ultimately replaced by statute by the
doctrine of supplemental jurisdiction. More importantly, by the time
Textron was decided, the concept of “ancillary jurisdiction” had been
replaced with “supplemental jurisdiction,” which would make a
reference to a legal doctrine that was defunct at the time odd at best. See
28 U.S.C. § 1367(a) (1990). It would be uncharacteristic of a punctilious
wordsmith such as Justice Scalia to use a superseded term, without
adding at least an “obs.” (for obsolete) after “ancillary.” Finally, Justice
Scalia’s statement regarding declaratory judgment plaintiffs came in the
context of his examples of when a court could “adjudicate the validity of
a contract under § 301(a).” 523 U.S. 657–58. This context indicates that
these examples, including that of a declaratory judgment plaintiff, are
examples where the court has jurisdiction under section 301(a). See A.
Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts
180–82 (2012) (noting that the Harmonious-Reading Canon requires that
“[t]he provisions of a text should be interpreted in a way that renders
them compatible, not contradictory”).
24                      NU IMAGE V. IATSE

    Aside from its reference to the Textron court’s
“gateway,” the majority provides no support for its decision
to discard clear guidance from the Supreme Court. Ignoring
the Supreme Court’s direction, the majority insists that a
violation of the CBA must be “an element of [Nu Image’s]
claim,” a requirement found in neither the statute nor
Textron. Such a formalistic approach defies the Textron
court’s reading of section 301(a) as providing jurisdiction
over suits “filed because a contract has been violated.”
Simply put, a suit seeking declaratory relief from an alleged
violation of a contract is a suit filed “because” of an accused
violation of the contract. 6

    Additionally, the majority’s opinion means that parties
in Nu Image’s position cannot independently choose to
present their arguments in a judicial forum. As discussed
above, Nu Image could not raise its arguments regarding the
validity of the CBA’s residual contribution payment
provision in the First or Second Plans-Nu Image Lawsuits
because our precedent bars such arguments in certain ERISA
cases. See discussion supra at 15–16. Thus, Nu Image was
left to pay the Plans and seek compensation from IATSE

     6
      The majority contends that my reading of Textron would “expand
section 301(a) beyond recognition” and grant any party access to federal
court “merely by alleging that another party claimed, in any context, a
contract violation.” This characterization ignores Textron’s limiting
guidance: a suit for violation of a contract is a suit “filed because a
contract has been violated.” This language demonstrates that there must
be some causal link between the alleged contractual violation and the
lawsuit. Thus, a plaintiff’s mere allegation that another party had alleged
a contract violation in a wholly unrelated context would be insufficient
to invoke Section 301(a)’s jurisdictional grant. Here, however, Nu
Image seeks declaratory relief from the very violation IATSE has
alleged. There is a clear, definitive link between the alleged violation
and Nu Image’s claim, rendering this a suit “filed because a contract has
been violated.”
                    NU IMAGE V. IATSE                      25

after the fact. But while the majority’s decision means that
section 301(a) empowers IATSE to sue Nu Image in federal
court for failure to make the residual contribution
payments—a right the Plans also have under ERISA—it
deprives Nu Image of the opportunity to press its claims or
defenses in that same court unless IATSE chooses a judicial
forum. This result is not only inefficient, it also gives one
party—IATSE, in this case—the power to dictate whether
another party—here, Nu Image—can raise its arguments in
a judicial forum, or only in the grievance forum, which
IATSE now prefers. The majority’s opinion fails to justify
this strange outcome.

    To summarize, an examination of Textron in the context
of this case would lead me to two holdings. First, I would
hold that Textron has abrogated the reasoning of Rozay’s
Transfer. Not all suits asserting that a CBA is void invoke
the district court’s jurisdiction pursuant to section 301(a).
Second, following Textron’s guidance, I would hold that a
district court has jurisdiction to hear a declaratory judgment
action brought by a plaintiff seeking relief from what a
counterparty to the CBA has alleged is a violation of a CBA.
Because Nu Image’s Complaint seeks just this sort of relief,
I would hold the district court had jurisdiction under section
26                       NU IMAGE V. IATSE

301(a) to hear Nu Image’s claims and erred in dismissing
those claims for want of subject matter jurisdiction. 7

     7
       Finally, because I would hold that Textron did not here remove
jurisdiction from the district court, it would be necessary to reach
IATSE’s alternative argument that Nu Image’s claims are barred by the
Supreme Court’s opinion in Granite Rock Co. v. Int’l Bhd. of Teamsters,
561 U.S. 287 (2010). I would hold that Granite Rock does not bar
jurisdiction in this case. IATSE argues that Granite Rock stands for the
proposition that no tort claim is cognizable under section 301(a) and, as
a result, Nu Image’s Complaint, which is based on tort-misrepresentation
does not fall within section 301(a)’s grant of jurisdiction. There are at
least two problems with this argument.

     First, Nu Image’s claims sound, at least partially, in contract. A suit
for a declaratory judgment that a contract is unenforceable as a result of
a fraudulent misrepresentation can be maintained as an action in contract.
Picot v. Weston, 780 F.3d 1206, 1212 (9th Cir. 2015) (“A claim for
declaratory judgment as to the existence of a contract is an action
sounding in contract.”); see generally 1A C.J.S. Actions § 126. Thus, at
a minimum, Nu Image’s request for a declaration that the residual
contribution provisions of the CBA are unenforceable survives Granite
Rock.

     Second, Granite Rock’s holding is not as broad as IATSE contends.
The Granite Rock court itself “emphasize[s]” that its holding is a narrow
one. 561 U.S. at 312. The Granite Rock court simply declined to
recognize a new federal common law tort for tortious interference with
a CBA. Id. at 312–13. Granite Rock did not speak to the availability of
misrepresentation actions under section 301(a). Because Nu Image does
not bring a claim for tortious interference with a CBA, Granite Rock does
not bar Nu Image’s claims.