Court Opinion

ID: 9499425
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:48:15.990777+00
Date Added: 2024-06-11T17:59:30.105377
License: Public Domain

BOYCE F. MARTIN, JR., Circuit Judge,
with whom CLAY and GILMAN, Circuit Judges, join concurring in part and dissenting in part.
I.
My dissent is a narrow one: I agree with the majority in principle, but not in application. As to principle, I agree with the majority’s conclusion that this Court’s Cement Divisions test be dropped. See Maj. Op. at 753. The four-part Cement Divisions inquiry has allowed this Court too much latitude to review the merits of arbitrator interpretations of collective bargaining agreements, in contravention of the dictates of the Supreme Court’s Steelworkers Trilogy as clarified in Misco and, to a lesser extent, Garvey. Cement Divisions should consequently be replaced by a test more reflective of Misco and Garvey, i.e., something to the tune of “as long as the arbitrator is arguably construing the contract or applying the contract and acting within the scope of his authority, this court will not overturn his decision.”
Of course, simply replacing this Court’s test with that of the Supreme Court does not advance matters much, especially since the Supreme Court has provided us with only two post-Trilogy cases for guidance. See Garvey, 532 U.S. at 512, 121 S.Ct. 1724 (noting that the Supreme Court’s cases “do not provide significant guidance as to what standards a federal court should use in assessing whether an arbitrator’s behavior is so untethered to either the agreement of the parties or the factual record so as to constitute an attempt to ‘dispense his own brand of industrial justice’ ”) (Stevens, J., dissenting). To be fair, the majority appears to replace Cement Divisions with an inquiry that looks only for “procedural aberration” committed by the arbitrator, not for legal error. Maj. Op. at 753. The majority then posits a series of hypotheti-cals to indicate when such procedural aberrations might have occurred. This is an admirable start, especially since the majority writes from a clean slate. But the contours of “procedural aberration” — or, if one prefers, when an arbitrator is not “arguably construing or applying the collective bargaining agreement, and acting within the scope of his authority” — can only be defined as we apply this new test to new, discrete cases. After all, “[t]he glory of the Anglo-American system of adjudication is that general principles are tested in the crucible of concrete controversies. A court cannot be assumed to address and resolve in the case in which it first lays down a rule every controversy within the semantic reach of the rule.” Malhotra v. Cotter & Co., 885 F.2d 1305, 1312 (7th Cir.1989). Misco was a relatively easy case, because the appeals court there applied vague notions of public policy to overturn the arbitrator’s decision. Garvey was also easier than the case we review now, because in Garvey the appeals court attempted to substitute its own credibility determination (a factual finding) for that of the arbitrator. Here, however, we deal with an arbitrator’s decision that a term of the collective bargaining agreement “becomes ambiguous.” This is completely non-sensical because it implies that the term was unambiguous to begin with.
Thus I turn to the application of the majority’s new standard. Arbitrator Glazer began his analysis by quoting the relevant pay raise parity language in Article 35 of the collective bargaining agreement: “Bargaining unit members will receive the same cost of living [“COLA”] increases paid to other MFR employees pursuant to the directive of MFR’s funding source.” Arb. Op. at 7. As the majority correctly points out, the plain meaning of this pari*758ty provision does not jump off the page. Because MFR’s “funding source” is the federal government, Article 35 clearly requires union/nonunion parity as to government-funded cost-of-living increases. But Article 35 says little about union/non-union parity as to employer-funded cost-of-living increases, the key issue here. Had Glazer found that the Article 35 parity clause was inherently ambiguous, then there is some merit to the majority’s argument that this finding, even if erroneous, is unreviewable inasmuch as it represents an arbitrator’s attempt to “arguably construe” the collective bargaining agreement. But Glazer ruled, instead, that Article becomes ambiguous “because of [MFR’s] prior decision to characterize both its [employer] payment and its payment from the federal funding source as ‘COLA.’ ” Arb. Op. at 8. This is where Glazer’s opinion is woefully flawed.
First, to say that a clause becomes ambiguous makes little sense in the realm of contract interpretation, because it implies that the clause was un ambiguous to begin with. And if that were the case, then Glazer would have no business bringing in extrinsic evidence to construe it. The majority views Glazer’s use of the phrase “becomes ambiguous” as either a slip of the pen or a slip of thought. Maj. Op. at 755. This may or may not be true, but I am less willing than the majority to give the arbitrator the benefit of the doubt. The majority opines that either way, Glazer was faced with “contractual silence,” and thus it was proper for him to look for “other indicators of meaning.” Maj. Op. at 755. Another plausible reading of Glazer’s opinion, however, is that he viewed — rightly or wrongly — the Article 35 plain language as unambiguous, and then went beyond the scope of his authority in subsequently “rendering” it ambiguous.
Furthermore, even if the majority is correct that Glazer was faced with “contractual silence,” that does not automatically mean his subsequent interpretation of this silence must evade our review. In this case, cost-of-living increases from sources other than the “funding source” — here, the federal government — are simply not provided for by the collective bargaining agreement, and so it is not at all clear why union employees should have a right to such a benefit in the absence of express language creating that benefit in the agreement itself. In other words, Article 35 does not require further construction as to cost-of-living increases- from non-federal sources. To say that Glazer was “arguably construing” something that requires no further construction is to say that Glazer was acting beyond the scope of his authority as an arbitrator: Contractual silence does not always equal contractual ambiguity.
Second, the alleged “past practice” that Glazer uses to render the Article 35 parity provision ambiguous, Arb. Op. at 8, is actually a “past memorandum” discussing raises for contract year 2002 (as opposed to contract year 2003, the dispute over which spawned the arbitration at issue in this case). And yet the memorandum clearly states that the 2002 raises are being given on a “one-time, non-precedent setting basis.” In light of this language, for Glazer to have used the 2002 memorandum as a precedent to render Article 35 ambiguous simply contravenes common sense. In my opinion, then, Arbitrator Glazer clearly acted beyond the scope of his authority in finding new meaning in Article 35 of the collective bargaining agreement. Or if the majority prefers, Glazer’s actions were procedurally aberrant for those of a professional labor arbitrator.
II.
Let me be clear about what I am not saying. I am not suggesting that we de*759cide an arbitration case such as this one on the merits. I am simply suggesting that we affirm the judgment of the district court, which was to vacate the award and remand for further proceedings — i.e., for re-arbitration, or at the very least for a clarification by Arbitrator Glazer. And I am not suggesting that upon re-arbitration, or upon further clarification, the decision of the arbitrator has to be different.1 And contrary to what the majority suggests, a decision simply to vacate and remand an arbitration award, as opposed to a decision that reverses the award on the merits, is not inconsistent with the high level of deference that we must show to arbitrators’ decisions regarding collective bargaining agreements. The majority reasons that since appellate courts generally “review judgments, not opinions” while performing de novo review, therefore we must assuredly “review outcomes, not opinions” while performing hyper-deferential arbitrator award review. Maj. Op. at 755-56. I disagree. This Court routinely reviews a lower court’s reasoning (i.e., process) on de novo review, even if such review has no bearing on our affirmance of the outcome of the case. Appellate courts constantly write de novo review opinions including such language as: "While we disagree with the district court’s analysis of the_issue, we nevertheless affirm.” Why do we do this? Because process and reasoning are important, as they provide the justification and backbone for outcomes. And in a hyper-deferential review situation, as opposed to de novo review, process is often the only thing we can review.
Some may think that my position seems contrary to that outlined by the Supreme Court in its Steehuorkers Trilogy:
A mere ambiguity in the opinion accompanying an award, which permits the inference that the arbitrator may have exceeded his authority, is not a reason for refusing to enforce the award. Arbitrators have no obligation to the court to give their reasons for an award. To require opinions free of ambiguity may lead arbitrators to play it safe by writing no supporting opinions. This would be undesirable for a well-reasoned opinion tends to engender confidence in the integrity of the process and aids in clarifying the underlying agreement.
United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). Here, however, we deal not with a “mere ambiguity” in Arbitrator Glazer’s opinion, but rather a completely nonsensical construction. I do not believe that even the Supreme Court would wish to see such errors go uneor-rected, or at the very least, unchallenged. And the Court is not entirely correct in its prediction that searching review of arbitrators’ reasoning will lead them to “play it safe” by issuing summary decisions unsupported by any writing at all, see also Maj. Op. at 756, for any ability of arbitrators to avoid scrutiny in this way is ultimately circumscribed by the desires of the parties who select and agree to be bound by them. Losing parties will no longer agree to arbitration schemes if they are never informed in writing, at least on a basic level, why it is that they have lost. Furthermore, no matter how deferential an “arguably construing” test this Court wishes to apply to *760arbitral review cases, the test is rendered impotent if the arbitrator issues only an up-or-down decision. Our deference is not so great that we allow the arbitrator to do all the “construing” in his head only, without committing anything to writing.
My position therefore does not stray from what the Supreme Court noted in Misco:
[I]n the very rare instances when an arbitrator’s procedural aberrations rise to the level of affirmative misconduct, as a rule the court must not foreclose further proceedings by settling the merits according to its own judgment of the appropriate result, since this step would improperly substitute a judicial determination for the arbitrator’s decision that the parties bargained for in the collective-bargaining agreement. Instead, the court should simply vacate the award, thus leaving open the possibility of further proceedings if they are permitted under the terms of the agreement. The court also has the authority to remand for further proceedings when this step seems appropriate.
484 U.S. at 40 n. 10, 108 S.Ct. 364. This case presents us with such a rare instance, and I would thus vacate and remand for further proceedings. See also Patten v. Signator Ins. Agency, Inc., 441 F.3d 230, 236 (4th Cir.2006) (vacating and remanding an award because the arbitrator “simply amended or altered the agreement, and thus he acted without authority”); Cytyc Corp. v. DEKA Products Ltd. P’Ship, 439 F.3d 27, 34 (1st Cir.2006) (noting that an award “unfounded in reason and fact” could properly be vacated even under the highly deferential standard of arbitrator review); Brentwood Medical Associates v. United Mine Workers of America, 396 F.3d 237, 242 (3d Cir.2005) (while circuit court review of arbitration awards is limited to asking whether the parties “got what they bargained for,” this includes inquiry into whether the arbitrator produced a “rational award”); Int'l Union of Operating Eng’rs, Local 139, AFL-CIO v. J.H. Findorff & Son, Inc., 393 F.3d 742, 745 (7th Cir.2004) (courts must only enforce “intellectually honest arbitral decisions”).
An arbitrator who writes a ten-page opinion containing “all the hallmarks of interpretation,” Maj. Op. at 754, may indeed be “arguably construing” the collective bargaining contract, but he could still be guilty of a procedural aberration by virtue of his irrational reasoning, reasoning that seriously calls into question whether or not he was acting within the scope of his authority. In other words, no matter how deferential is our review on the merits, we may still demand rational thought from the arbitrator in reaching those merits. Otherwise it strikes me as no review at all. See Cytyc, 439 F.3d at 32 (holding that while the “authority of a federal court to disturb an arbitration award is tightly circumscribed,” such awards are not “utterly impregnable”); Brentwood Medical, 396 F.3d at 244 (noting that courts are “neither entitled nor encouraged to simply ‘rubber stamp’ the interpretations and decisions of arbitrators”) (Ambro, J., dissenting).
I therefore respectfully dissent.

. This is not an absurd result. In sentencing cases, for example, we are often fully aware that a trial judge may issue exactly the same sentence, or perhaps even a higher one, on remand for re-sentencing. What we are typically asking for in such cases is that the trial judge simply clarify his reasons for issuing the sentence (e.g., that he was treating the Sentencing Guidelines as advisory only, or that he had assessed all of the § 3553 factors), not that the trial judge substitute our reasons for his own.