Court Opinion

ID: 2963888
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:16:52.627453+00
Date Added: 2024-06-11T08:37:23.107925
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

        No. 95-1794

                            NORTH ADAMS REGIONAL HOSPITAL,

                                 Plaintiff, Appellee,

                                          v.

                          MASSACHUSETTS NURSES ASSOCIATION,

                                Defendant, Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                    [Hon. Michael A. Ponsor, U.S. District Judge]
                                             ___________________
                                 ____________________

                                        Before

                       Selya, Boudin, and Lynch, Circuit Judges.
                                                 ______________

                                 ____________________

            Fernand J. Dupere, Jr. for appellee.
            ______________________

            Alan  J. McDonald,  with whom  Jack  J.  Canzoneri and  McDonald &
            _________________              ___________________      __________
        Associates were on brief, for appellant.
        __________

                                 ____________________

                                   January 24, 1996
                                 ____________________

                      LYNCH,  Circuit  Judge.    When  the  North   Adams
                      LYNCH,  Circuit  Judge.
                              ______________

            Regional Hospital was required by an  arbitrator, as a matter

            of  contract  interpretation, to  hire  an  individual as  an

            Emergency  Room  nurse whom  the  Hospital  considered to  be

            unqualified, the Hospital  challenged the arbitrator's  award

            in  federal court.   The  reviewing court  found against  the

            Hospital on  the merits, but  also found the  Hospital's suit

            was not "frivolous, unreasonable, or without foundation," nor

            was  the suit "simply  a delaying tactic."   Accordingly, the

            court  denied the  motion  for attorneys'  fees  made by  the

            Massachusetts Nurses Association.  MNA has appealed, claiming

            the  decision not to award  fees was an  abuse of discretion.

            As it clearly was not, we reject the appeal and affirm.

                      To state  the facts briefly:  In  1993 the Hospital

            attempted to hire for a core Emergency Room nurse position an

            external candidate who was better qualified than any internal

            candidate.   MNA grieved and the arbitrator held that where a

            "qualified"  internal candidate  was available,  the internal

            candidate  must   be   hired   regardless   of   the   better

            qualifications of the external candidate.  The crux, for this

            appeal,  was in  the arbitrator's  finding that  the internal

            candidate  was at  least "minimally  qualified" although  the

            candidate  lacked  certification  in  Advanced  Cardiac  Life

            Support ("ACLS"),  a  skill the  Hospital, not  unreasonably,

            desired.  The arbitrator appeared to base this finding on the

            testimony  of one witness, whom  the Hospital argued had said

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            no such thing.  The parties have represented to us that there

            was no transcript of the arbitration proceedings.

                      The Hospital filed suit  in the U.S. District Court

            challenging the  award.  Its essential argument  was that the

            award  was  based on  a "non-fact"  and  was in  violation of

            public policy.  But  for the gross factual error made  by the

            arbitrator  as   to  whether   the  internal   candidate  was

            qualified,  said the  Hospital, the  outcome would  have been

            different.   The  Hospital  argued that  while  lack of  ACLS

            qualifications might  be tolerable among  non-core staff,  it

            was unacceptable for a  core-staff nurse -- who would  be for

            some  periods the  person  with  primary  responsibility  for

            Emergency  Room trauma and other cases -- not to be qualified

            in advanced  cardiac life  support techniques.   The Hospital

            argued  that the increased risk  to the health  and safety of

            Emergency Room  patients should  lead to invalidation  of the

            arbitrator's award on public policy grounds.   Faced with the

            deference given by  law to arbitral awards and  the lack of a

            transcript, the district court  rejected the challenge on the

            merits.  The Hospital has not appealed.

                      Nevertheless, MNA  has appealed, claiming  that the

            district  court  was plainly  wrong  in not  awarding  it its

            attorneys'  fees  and costs  arising  out  of the  Hospital's

            challenge to the award.  MNA argues that  United Paperworkers
                                                      ___________________

            Int'l Union v. Misco, Inc., 484 U.S. 29 (1987), so foreclosed
            ___________    ___________

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            the  Hospital's  challenge   as  to   render  the   challenge

            "unreasonable  and  without  foundation"  and   the  district

            court's finding to the contrary to be an abuse of discretion.

            MNA's position both misreads Misco and the decisions of  this
                                         _____

            court.

                      This  court has  repeatedly held  that an  arbitral

            award  may  be challenged  on a  showing  that the  award was

            "mistakenly based on a  crucial assumption that is concededly

            a non-fact."  Advest, Inc. v. McCarthy, 914  F.2d 6, 8-9 (1st
              ________    ____________    ________

            Cir. 1990) (emphasis added); see also Local 1445, United Food
                                         ___ ____ _______________________

            and Commercial Workers Int'l Union v. Stop & Shop Cos., Inc.,
            __________________________________    ______________________

            776 F.2d 19, 21 (1st Cir. 1985); Trustees of  Boston Univ. v.
                                             _________________________

            Boston Univ. Chapter, Am. Ass'n of Univ. Professors, 746 F.2d
            ___________________________________________________

            924, 926 (1st  Cir. 1984); Bettencourt v.  Boston Edison Co.,
                                       ___________     _________________

            560  F.2d 1045, 1050 (1st  Cir. 1977).   The somewhat awkward

            phrasing "non-fact" refers to  a situation "where the central

            fact  underlying  an  arbitrator's  decision   is  concededly

            erroneous," Electronics Corp.  of Am. v.  International Union
                        _________________________     ___________________

            of Electrical  Workers,  Local 272, 492 F.2d 1255,  1256 (1st
            __________________________________

            Cir. 1974), that is, where  "there was a gross mistake .  . .

            made out by  the evidence,  but for which,  according to  the

            arbitrator's rationale, a  different result  would have  been

            reached."     Id.  at   1257  (internal  quotation  omitted).
                          ___

            Prudential-Bache Sec., Inc. v.  Tanner, No. 95-1590, slip op.
            ___________________________     ______

            at  6-7 (1st  Cir. Dec.  29, 1995),  recently  reaffirmed the

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            principle.  The  Hospital's challenge to  a "non-fact" was  a

            recognized ground to attack an arbitral award.

                      MNA's argument  that in any event  the Hospital was

            foreclosed from mounting a public policy argument under Misco
                                                                    _____

            is also without  merit.  Because the Hospital did not cite to

            a  specific statute  or  case to  support its  precise public

            policy argument,  the argument must be  deemed frivolous, the

            MNA says.  There are three responses.

                      First,  while Misco  did  discourage public  policy
                                    _____

            challenges  to  an  arbitrator's  award  based  on  "'general

            considerations of supposed public interests,'" 484 U.S. at 43

            (quoting  W.R. Grace & Co.  v. Rubber Workers,  461 U.S. 757,
                      ________________     ______________

            766  (1983)), it  reaffirmed that such  a challenge  could be

            mounted  by  "ascertaining"  a  "well-defined  and  dominant"

            policy  "'by reference  to the  laws and  legal precedents.'"

            484 U.S. at 43 (quoting W.R. Grace, 461 U.S. at 766). Whether
                                    __________

            such a policy  may be  ascertained by reference  to laws  and

            legal  precedents is  ultimately an  issue for the  courts to
                                                                ______

            decide  on a challenge to an arbitral  award.  See Misco, 484
                                                           ___ _____

            U.S.  at  43.   Other courts  have  recognized that  a public

            policy challenge may be based not directly on a specific rule

            or regulation, but on the stated purpose behind such  statute

            or  regulation.   See Exxon  Shipping Co.  v. Exxon  Seamen's
                              ___ ___________________     _______________

            Union, 993  F.2d 357, 364  (3d Cir. 1993).   It was  at least
            _____

            arguable that there  is a public  policy in Massachusetts  to

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            protect  patients  by requiring  nurses  to  be qualified,  a

            policy established by the Massachusetts  regulations defining

            the  general responsibilities  of  a registered  nurse.   See
                                                                      ___

            Brigham & Women's Hosp. v. Massachusetts Nurses Ass'n, 684 F.
            _______________________    _____________ ____________

            Supp.  1120, 1125 (D.  Mass. 1988).   We need not  and do not

            decide  whether such a policy exists,  but recognize that the

            existence  of  the  argument supports  the  district  court's

            finding  that the making of  the argument did  not justify an

            award of attorneys' fees.  

                      Second, MNA's  argument, whether meant  as such  or

            not, comes  perilously close  to  inappropriately asking  the

            court to evaluate  the competency of the  presentation of the

            argument, rather than the merits of the argument itself,  for

            the  purposes   of  imposition  of  attorneys'   fees.    Cf.
                                                                      ___

            Christiansburg  Garment Co.  v. Equal  Employment Opportunity
            ___________________________     _____________________________

            Comm'n, 434 U.S.  412, 422 (1978) (attorneys' fees should not
            ______

            be awarded  simply because,  in hindsight, the  claim appears
                                         __ _________

            unreasonable).   The interests served by  the attorneys' fees

            award rules are vastly different from those served by the law

            governing attorney competence, in its various manifestations.

            Cf. id.  (in deciding whether successful  Title VII defendant
            ___ ___

            can recover attorneys' fees,  court considers interests to be

            served by doctrine).   Further, while it is true  that claims

            may be dismissed, and the consequences visited on  the client

            for the conduct of counsel, see  Link v. Wabash R.R. Co., 370
                                        ___  ____    _______________

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                                          7

            U.S.  626,  633  (1962), the  loss  of  one's  own claims  is

            different  in kind  from being  penalized for  bringing those

            claims in the first place.    

                      Third, MNA's argument  does not serve  the purposes

            of the award of attorneys' fees doctrine, which carves out an

            exception to the usual  "American Rule".  Cf. Christiansburg,
                                                      ___ ______________

            434  U.S.  at  422   (under  the  "American  Rule"  litigants

            generally pay their own costs).  If a public policy challenge

            to  an  arbitral  award proves  ultimately  to  be  weak, the

            challenge  will lose on the merits.  That the challenge fails

            is not  by itself a reason  to penalize the party  making the

            challenge.   Such a rule would subvert the public interest in

            allowing public policy challenges at all to arbitral awards. 

                      The  evaluation   of  whether  such  a   claim  was

            frivolous  at the  outset,  or when  continued, is  initially

            committed to the  district court.  Our review is for abuse of

            discretion  and MNA has not  come close to  showing an abuse.

            Cf.  Local 285,  Service  Employees Int'l  Union v.  Nonotuck
            ___  ___________________________________________     ________

            Resource Assoc., Inc.,  64 F.3d 735,  738-39 (1st Cir.  1995)
            _____________________

            (finding  no abuse of discretion in the refusal to award fees

            in an argument presented  by the employer which was  weak but

            arguable;  and an abuse of discretion in the refusal to award

            fees  where  the  employer  presented a  type  of  procedural

            argument clearly foreclosed by a long line of precedent).

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                      The  decision  of the  district court  is affirmed.
                                                                ________

            Costs to the Hospital.
            _____________________

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