Court Opinion

ID: 4699130
Source: CourtListenerOpinion
Date Created: 2021-06-28 17:03:19.169325+00
Date Added: 2024-06-11T08:06:00.833957
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

COLUMBIA EXPORT TERMINAL, LLC,         No. 20-35037
              Plaintiff-Appellant,
                                          D.C. No.
                 v.                    3:18-cv-02177-
                                             JR
INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION; KANE AHUNA,
an individual; JASON ANDREWS, an         OPINION
individual; JESUS ARANGO, an
individual; MIKE AYERS, an
individual; BRIAN BANTA, an
individual; KEN BANTA, an
individual; KEITH BANTA, an
individual; ANDRE BARBER, an
individual; CRYSTAL BARNES, an
individual; CRAIG BITZ, an
individual; LISA BLANCHARD, an
individual; RANDY BOOKER, an
individual; BRAD BOYD, an
individual; LARRY BROADIE, an
individual; FELIX BROWN, an
individual; JIMMY BROWN, an
individual; JON BUDISELIC, an
individual; WILLIAM BURRIS, an
individual; DOUGLAS CAREY, an
individual; GREG CARSE, an
individual; Anthony Cerrutti, an
individual; HUGH COLSON, an
individual; TIM COPP, an individual;
2       COLUMBIA EXPORT TERMINAL V. ILWU

E. COTUREN, an individual; STEVEN
COX, an individual; RYAN
CRANSTON, an individual; JAMES
DAW, an individual; ADAM DAY, an
individual; JAMES DEGMAN, an
individual; TORRAE DE LA CRUZ, an
individual; FRANK DE LA ROSA, an
individual; THOMAS DEMUTH, an
individual; JAMES DINSMORE, an
individual; BRIAN DIRCKSEN, an
individual; TERENCE DODSON, an
individual; GARY DOTSON, an
individual; OLIVER EDE, an
individual; RAY ELWOOD, an
individual; TODD ENGLERT, an
individual; CHRIS EUBANKS, an
individual; DAVID FAMBRO, an
individual; LARRY FAST, an
individual; JAMES FINCH, an
individual; GREG FLANNERY, an
individual; MIKE GARDNER, an
individual; BRETT GEBHARD, an
individual; RICHARD GILSTRAP, an
individual; TED GRAY, an individual;
KURTIS HANSON, an individual;
MIKE HARMS, an individual; RANDY
HARPER, an individual; TERRY
HICKMAN, an individual; JAMES
HOLLAND, an individual; BRUCE
HOLTE, an individual; RONALD
HUSEMAN, an individual; NATHAN
HYDER, an individual; TROY JAMES,
an individual; SAM JAURON, an
        COLUMBIA EXPORT TERMINAL V. ILWU   3

individual; ANTHONY JEFFRIES, an
individual; KEVIN JOHNSON, an
individual; PAT JOHNSON, an
individual; TERRY JOHNSON, an
individual; TIM JONES, an individual;
JON JULIAN, an individual; LEROY
KADOW, an individual; GEORGE
KELLY, an individual; ERIC KING, an
individual; WAYNE KING, Esquire,
an individual; KEVIN KNOTH, an
individual; KENNETH KYTLE, an
individual; MIKE LACHAPELLE, an
individual; JIMMY LAI, an individual;
TOM LANGMAN, an individual;
TYLER LAUTENSCHLAGER, an
individual; JACK LEE, an individual;
KEN LEE, an individual; DAN
LESSARD, an individual; SHANTI
LEWALLEN, an individual; DANNY
LOKE, an individual; THOMAS LOVE,
an individual; WILFRED LUCH, an
individual; KARL LUNDE, an
individual; CRAIG MAGOON, an
individual; MIKE MAHER, an
individual; JASON MALACHI, an
individual; LEVI MANNING, an
individual; RICKIE MANNING, an
individual; JAY MANTEI, an
individual; PAT MARONAY, an
individual; A. MARTIN, an
individual; GARRY MATSON, an
individual; PAT MCCLAIN, an
individual; M. MCMAHON, an
4      COLUMBIA EXPORT TERMINAL V. ILWU

individual; MIKE MCMURTREY, an
individual; DONALD MEHNER, an
individual; CURTIS MEULER, an
individual; KARL MINICH, an
individual; JOSH MORRIS, an
individual; JOHN MULCAHY, an
individual; TOM NEITLING, an
individual; MARTIN NELSON, an
individual; GREG NEMYRE, an
individual; RIAN NESTLEN, an
individual; CHRIS OVERBY, an
individual; KEN OVIATT, an
individual; THOMAS OWENS, an
individual; JOHN PEAK, an
individual; Shane Pederson, an
individual; JEFF PERRY, an
individual; JOHN PERRY, an
individual; ARNOLD PETERSON, an
individual; TERRY PLAYER, an
individual; JAMES POPHAM, an
individual; DAVID PORTER, an
individual; MIKE RAPACZ, an
individual; JOHN RINTA, an
individual; WILLIAM ROBERTS, an
individual; JOSEPH ROBINSON, an
individual; MARK ROBINSON, an
individual; CHRIS SCHEFFEL, an
individual; THEODORE SCHUH, an
individual; MIKE SEXTON, an
individual; MARK SIEGEL, an
individual; COURTNEY SMITH, an
individual; JEFF SMITH, an
individual; MIKE SMITH, an
       COLUMBIA EXPORT TERMINAL V. ILWU   5

individual; SCOTT STEIN, an
individual; DONALD STYKEL, an
individual; MIKE SUHR, an
individual; LEAL SUNDET, an
individual; LAWRENCE THIBEDEAU,
an individual; MARK THORSFELDT,
an individual; SHAWN THORSTAD, an
individual; JAMES THORUD, an
individual; DAVID TRACHSEL, an
individual; WILLIAM UNDERWOOD,
an individual; JASON VANCE, an
individual; DAVID VARNON, an
individual; PAN VARNON, an
individual; MIKE WALKER, Esquire,
Attorney, an individual; DWAYNE
WAMSHER; EUGENE WEBB, an
individual; MIKE WEHAGE, an
individual; KEVIN WELDON, an
individual; SPENCER WHITE, an
individual; RICHARD WIDLE, an
individual; NURAL WILLIS, an
individual; RONALD WOODS, an
individual; MARK WRIGHT, an
individual; CAROL WURDINGER, an
individual; JERRY YLONEN, an
individual; P. YOCITIM, an
individual; RICHARD ZATTERBERG,
an individual; FRED ZOSKE, an
individual; JAMES COTHREN, an
individual; BOBBY CRANSTON, an
individual; TEREK JOHNSON, an
individual; ANGELA MARTIN,
Esquire, an individual; PATRICK
6       COLUMBIA EXPORT TERMINAL V. ILWU

MCCLAIN, an individual; MATTHEW
MCMAHON, an individual; SHANN
PEDERSON, an individual; MICHAEL
SEXTON, an individual; JEFFREY
SMITH, an individual; LAURENCE
THUBEDEAU, an individual; PAUL
YOCHIM, an individual,
              Defendants-Appellees.

      Appeal from the United States District Court
               for the District of Oregon
      Michael H. Simon, District Judge, Presiding

        Argued and Submitted October 26, 2020
                  Portland, Oregon

                  Filed June 28, 2021

    Before: Susan P. Graber, Richard R. Clifton, and
            Sandra S. Ikuta, Circuit Judges.

               Opinion by Judge Clifton;
                Dissent by Judge Ikuta
            COLUMBIA EXPORT TERMINAL V. ILWU                            7

                            SUMMARY*

                        RICO / Labor Law

    The panel affirmed the district court’s dismissal of an
action brought by Columbia Export Terminal under the
Racketeer Influenced and Corrupt Organizations Act against
the International Longshore and Warehouse Union and
individual union workers.

    The panel concluded that Columbia Export Terminal’s
RICO claims alleging overbilling via fraudulent timesheets
required interpretation of the collective bargaining agreement
(“CBA”) under which the workers were employed, and the
CBA provided a process for arbitration of disputes. The
panel concluded that the CBA’s arbitration provision applied
to the RICO claims. Accordingly, § 301 of the Labor
Management Relations Act precluded adjudication of the
RICO claims before the arbitration process was exhausted.

    The panel agreed with the district court that Hubbard v.
United Airlines, Inc., 927 F.2d 1094 (9th Cir. 1991),
remained good law, and the panel found persuasive
Hubbard’s holding that the Railway Labor Act preempted a
fraud claim under RICO. The panel held that a RICO claim
is precluded by § 301 of the LMRA when the right or duty
upon which the claim is based is created by a CBA or
resolution of the claim substantially depends on analysis of a
CBA.

    *
      This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
8         COLUMBIA EXPORT TERMINAL V. ILWU

     Dissenting, Judge Ikuta wrote that the majority erred in
holding that any federal claim that is related to a CBA is
preempted or precluded by § 301 of LMRA and must
automatically be dismissed by the district court and sent for
arbitration.    The majority also erred in applying a
presumption of arbitrability and in determining that the
CBA’s arbitration provision encompassed the RICO claims
at issue.

                        COUNSEL

Christopher F. McCracken (argued) and Jacqueline M.
Damm, Ogletree Deakins Nash Smoak & Stewart P.C.,
Portland, Oregon; Thomas A. Lidbury, Ogletree Deakins
Nash Smoak & Stewart P.C., Chicago, Illinois; for Plaintiff-
Appellant.

Darin M. Dalmat (argued) and Robert H. Lavitt, Barnard
Iglitzin & Lavitt LLP, Seattle, Washington, for Defendants-
Appellees.
          COLUMBIA EXPORT TERMINAL V. ILWU                  9

                         OPINION

CLIFTON, Circuit Judge:

    Columbia Export Terminal (“CET”) brought an action
under the Racketeer Influenced and Corrupt Organizations
Act (“RICO”) against the International Longshore and
Warehouse Union (“ILWU”) and 154 individual ILWU
workers employed by CET. The district court concluded that
CET’s RICO claims could not properly proceed in court at
this time and dismissed the case without prejudice. It
reasoned that the claims required interpretation of the
collective bargaining agreement (“CBA”) under which the
workers were employed, that the CBA provided a process for
arbitration of disputes, and that the Labor Management
Relations Act (“LMRA”) precluded court adjudication of the
RICO claims before the arbitration process had been
exhausted. CET appeals the dismissal.

    We previously reached a conclusion similar to that
reached by the district court regarding a labor contract
governed by the Railway Labor Act (“RLA”). Hubbard v.
United Airlines, Inc., 927 F.2d 1094 (9th Cir. 1991). The
district court relied on that precedent, rejecting an argument
by CET that Hubbard had been overruled. We agree with the
district court that Hubbard remains alive and persuasive. Our
conclusion that the same result is required for a contract
governed by the LMRA is a logical extension of our
precedents. We take that step here and affirm the judgment of
the district court.
10        COLUMBIA EXPORT TERMINAL V. ILWU

I. Background

    CET operates a grain export terminal in the Port of
Portland and employs workers who are members of the
ILWU. CET alleges that the ILWU and the 154 named
individual defendants conspired to fraudulently furnish
timesheets reporting hours that were not actually worked and,
as a result, overbilled CET by more than $5.3 million.

    CET filed this action alleging seven claims under RICO,
18 U.S.C. §§ 1961–68. In response, the ILWU filed a motion
to dismiss contending, among other things, that CET’s claims
were preempted under § 301 of the LMRA, 29 U.S.C. § 185,
because resolution of the claims required interpretation of the
underlying CBA, which requires exhaustion of the
agreement’s grievance procedures. The individual defendants
joined the union’s motion. The district court agreed with the
ILWU and dismissed the case without prejudice. CET
appeals.

II. Discussion

    The central dispute on appeal is whether CET’s claims,
which it styled as RICO claims, are preempted or precluded
by § 301 of the LMRA. We review the district court’s
interpretation of the statutes de novo. Alaska Airlines Inc. v.
Schurke, 898 F.3d 904, 916 (9th Cir. 2018) (en banc).

     A. The two-step preclusion and preemption under LMRA
        § 301.

   The LMRA, sometimes described as the Taft-Hartley Act,
was enacted in 1947 to “promote the full flow of commerce”
by “provid[ing] orderly and peaceful procedures for
          COLUMBIA EXPORT TERMINAL V. ILWU                   11

preventing [] interference by [employees or employers] with
the legitimate rights of the other.” 29 U.S.C. §141(b). To that
end, LMRA § 301(a) provides that “[s]uits for violation of
contracts between an employer and a labor organization . . .
may be brought in any district court.” 29 U.S.C. § 185(a).

    On its face, § 301 reads as a jurisdictional statute, and it
“contains no express language of preemption, [but] the
Supreme Court has long interpreted the [provision] as
authorizing federal courts to create a uniform body of federal
common law to adjudicate disputes that arise out of labor
contracts.” Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1151
(9th Cir. 2019); Textile Workers Union v. Lincoln Mills,
353 U.S. 448, 450–51, 457 (1957).

    Consistent with this purpose, the Supreme Court
concluded that § 301 impliedly preempted state law in order
to give effect to the congressional intent that “doctrines of
federal labor law uniformly [] prevail over inconsistent local
rules.” Teamsters v. Lucas Flour Co., 369 U.S. 95, 104
(1962). Therefore, any “union agreement made pursuant to [a
federal labor law] has [] the imprimatur of the federal law
upon it and, by force of the Supremacy Clause of Article VI
of the Constitution, could not be [] vitiated by any provision
of the laws of a State.” California v. Taylor, 353 U.S. 553,
561 (1957) (quoting Ry. Emp. Dept. v. Hanson, 351 U.S. 225,
232 (1956)).

    Federal courts have developed common law to govern
labor disputes and have concluded that a “central tenet of
federal labor-contract law under § 301 [is that] the arbitrator,
not the court, [] has the responsibility to interpret the labor
contract in the first instance.” Allis-Chalmers Corp. v. Lueck,
471 U.S. 202, 220 (1985). As we explained in Alaska Airlines
12        COLUMBIA EXPORT TERMINAL V. ILWU

and reiterated last year in Curtis, preserving the role of the
CBA’s grievance process is important for three reasons:

       First, a [CBA] is more than just a contract; it
       is an effort to erect a system of industrial self-
       government. Thus, a CBA is part of the
       continuous collective bargaining process.
       Second, because the CBA is designed to
       govern the entire employment relationship,
       including disputes which the drafters may not
       have anticipated, it calls into being a new
       common law—the common law of a
       particular industry or of a particular plant.
       Accordingly, the labor arbitrator is usually the
       appropriate adjudicator for CBA disputes
       because he was chosen due to the parties’
       confidence in his knowledge of the common
       law of the shop and their trust in his personal
       judgment to bring to bear considerations
       which are not expressed in the contract as
       criteria for judgment. Third, grievance and
       arbitration procedures provide certain
       procedural benefits, including a more prompt
       and orderly settlement of CBA disputes than
       that offered by the ordinary judicial process.

Curtis, 913 F.3d at 1152 (internal quotation marks and
citations omitted).

    For more than sixty years, the Supreme Court has
interpreted § 301 to require the specific performance of
promises to arbitrate grievances in collective bargaining
agreements. Textile Workers, 353 U.S. at 451.
           COLUMBIA EXPORT TERMINAL V. ILWU                          13

    We have thus applied the preemptive effect of § 301 to all
“state law claims grounded in the provisions of a CBA or
requiring interpretation of a CBA.” Kobold v. Good
Samaritan Reg’l Med. Ctr., 832 F.3d 1024, 1032 (9th Cir.
2016). We have distilled the relevant Supreme Court cases
into a two-part test:

         The essential inquiry is this: [1] Does the
         claim seek purely to vindicate a right or duty
         created by the CBA itself? If so, then the
         claim is preempted, and the analysis ends
         there.

             [2] But if not, we proceed to the second
         step and ask whether a plaintiff’s state law
         right is substantially dependent on analysis of
         the CBA, which turns on whether the claim
         cannot be resolved by simply looking to
         versus interpreting the CBA.

Curtis, 913 F.3d at 1152–53 (internal citations and quotation
marks omitted).1

    CET argues that this preemption approach properly
applies only to claims arising under state law, not to claims,
such as the RICO claims alleged here, arising under federal
law. Instead, CET contends that we should apply a preclusion
test that asks whether the two federal statutes necessarily
conflict, and if so, favors the statute passed later in time. CET

    1
      A variation of the test asks: (1) whether the claim asserted exists
independently of the CBA, and if so (2) whether the resolution of the
claim nonetheless substantially depends on analysis of the CBA. Kobold,
832 F.3d at 1032. Both versions of the test are used interchangeably.
14          COLUMBIA EXPORT TERMINAL V. ILWU

argues that because the RICO statute was enacted after the
LMRA, if there is an irreconcilable conflict between the two
federal statutes, the older one, the LMRA, must be deemed to
have been repealed or amended by the later legislation.

    That is not the path that this court or other courts have
taken. Rather, the terms “preemption” and “preclusion” have
been used interchangeably and the same two-step approach
applies whether the conflicting statute is a federal or state
provision. In Hubbard, for instance, we held that the RLA,
which also preceded the enactment of RICO, preempted a
fraud claim under RICO. 927 F.2d at 1099; see also Long v.
Flying Tiger Line, Inc., 994 F.2d 692 (9th Cir. 1993) (RLA
precludes ERISA claims). Similar conclusions have been
reached by circuit courts across the country. 2

    Although the Supreme Court has never directly passed on
that precise question, we are guided by its holding that
“[s]ection 301(a) governs claims founded directly on rights

     2
       Other circuits have applied the “preemption” or “preclusion” test
when considering federal claims in the context of labor disputes, without
referencing the dates of passage of each federal act. Like our court, the
Seventh Circuit has also held that the RLA precludes RICO claims.
Underwood v. Venango River Corp., 995 F.2d 677 (7th Cir. 1993)
narrowed by Westbrook v. Sky Chefs, Inc., 35 F.3d 316, 317–18 (7th Cir.
1994) (RLA precludes RICO claims unless causes of action are
independent of the CBA). Similarly, at least two circuits have held that the
LMRA precludes Fair Labor Standards Act (“FLSA”) claims. Vadino v.
A. Valey Eng’rs, 903 F.2d 253 (3d Cir. 1990); Martin v. Lake Cnty. Sewer
Co., Inc., 269 F.3d 673 (6th Cir. 2001). At least four circuits have held
that the RLA precludes ERISA claims. de la Rosa Sanchez v. E. Airlines,
Inc., 574 F.2d 29 (1st Cir. 1978); Ballew v. Cont’l Airlines, Inc., 668 F.3d
777 (5th Cir. 2012); Hastings v. Wilson, 516 F.3d 1055 (8th Cir. 2008);
Oakey v. U.S. Airways Pilots Disability Income Plan, 723 F.3d 227 (D.C.
Cir. 2013).
          COLUMBIA EXPORT TERMINAL V. ILWU                     15

created by collective-bargaining agreements, and also claims
‘substantially dependent on analysis of a collective-
bargaining agreement.’” Caterpillar, Inc. v. Williams,
482 U.S. 386, 394 (1987) (emphasis added) (quoting Int’l
Bhd. of Elec. Workers v. Hechler, 481 U.S. 851, 859 n.3
(1987)). The Supreme Court has enforced arbitration
requirements in § 301 cases when resolution of the claims
required interpretation of the CBA, regardless of the form of
the claim. See, e.g., Lueck, 471 U.S. at 219 (“Since nearly any
alleged willful breach of contract can be restated as a tort
claim for breach of a good-faith obligation under a contract,
the arbitrator’s role in every case could be bypassed easily if
§ 301 is not understood to pre-empt such claims.”)

    Thus, in Hubbard, we explained that “federal labor law
was intended to provide the exclusive remedy for generic
fraud claims relating to rights under a CBA. If the same
predicate acts were the basis of state claims for fraud . . . they
would be preempted . . . [so plaintiffs] cannot evade
preemption through ‘artful pleading’ of the claims as RICO
claims.” 927 F.2d at 1098. If the court held otherwise, any
plaintiff could avoid arbitration by converting a garden-
variety contract dispute into a case of federal racketeering.

    Though in Hubbard we considered a labor contract under
the RLA and reserved for another day the question of whether
LMRA precludes RICO claims, that day has come. We hold
that a RICO claim is precluded by § 301 of the LMRA when
the right or duty upon which the claim is based is created by
a CBA or resolution of the claim substantially depends on
analysis of a CBA.

   We have previously suggested this extension. Notably,
two years ago our court, sitting en banc, observed that “the
16        COLUMBIA EXPORT TERMINAL V. ILWU

RLA and LMRA § 301 preemption standards are ‘virtually
identical’ in purpose and function, [and] they are, for the most
part, analyzed under a single test and a single, cohesive body
of case law.” Alaska Airlines, 898 F.3d at 913 n.1 (quoting
Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 260 (1994)).
After discussing the development of the two-step test
applying to claims under state law that require interpretation
of a CBA, we explained that “[t]he same principle applies to
federal law claims, although they might be better described as
‘precluded.’” Id. at 920 n.10. The labor contract at issue in
Alaska Airlines, like the contract involved in Hubbard, was
governed by the RLA. The fact that the plaintiff had asserted
a claim under a federal statute rather than a state law did not
alter the outcome. The claim could not proceed, regardless of
whether it was described as precluded or preempted.

     B. CET’s RICO claims require analysis of the CBA.

    Applying the two-step test, we conclude that CET’s RICO
claims are preempted by § 301 because resolution of the
claims is substantially dependent on interpretation of the
CBA. CET’s RICO claims are premised on allegations that
timesheets submitted by ILWU workers were inflated. To
prove its case, CET must demonstrate that ILWU workers
committed the predicate acts of mail and wire fraud by
knowingly overbilling CET for time not worked. However,
ILWU contends that the billed hours were expressly
authorized by CET and charged in accordance with the CBA.

    There are a host of CBA provisions that could excuse the
workers from being present at the time of work reported on
the timesheets or could explain why workers are compensated
for time not actually worked. For instance, ¶ 4-1 guarantees
a minimum of 8 hours of pay for employees who arrive at
          COLUMBIA EXPORT TERMINAL V. ILWU                    17

work and are put to work even if released before the 8-hour
shift concludes. Paragraph 4-5 guarantees a minimum 4 hours
of pay for those sent home upon arrival. Further, Section XII
of the CBA details special rules for “steady” employees:
¶ 12-3 guarantees 40 hours’ work per week, and ¶ 12-4 sets
maximum durations for lay-off periods. Finally, ¶ 8-1 of the
CBA lists paid holidays, ¶ 9-1 alludes to paid vacation time,
and ¶ 6-4 provides for paid meal periods with minimum
durations.

    Resolution of the RICO claims will also require
interpretation of the CBA to determine how it applies, if it
does, to an issue which its express terms do not appear to
discuss: whether employees can claim all of their
compensable hours in their weekly timesheets, or whether
they must simply list time actually worked and await a
forensic recalculation of their pay.

     These issues are not, as the dissent suggests, at 34, merely
“speculative” or “hypothetical.” Rather, they are intrinsic to
CET’s claims as pleaded and argued to the district court and
to us. Permitting the district court to proceed before the
grievance process has been exhausted would “eviscerate a
central tenet of federal labor-contract law under § 301 that it
is the arbitrator, not the court, who has the responsibility to
interpret the labor contract in the first instance.” Lueck,
471 U.S. at 220.

     Notably, CET has not argued that its claims are unrelated
to the CBA. That is not surprising, for the subject of its claim,
the number of hours for which its employees are entitled to
claim payment, is at the core of an employment relationship
and is something a CBA could be expected to govern.
Instead, CET contends that the CBA is unambiguous. That is
18        COLUMBIA EXPORT TERMINAL V. ILWU

an argument that CET can make within the grievance process.
The claims cannot be resolved by mere reference to the CBA.
We thus conclude that CET’s RICO claims were properly
dismissed by the district court because they substantially
depend on interpretation of the CBA.

     C. The CBA’s arbitration provision applies to RICO
        claims.

    CET argues that even if § 301 could preclude its RICO
claims, it should have no preclusive effect in this instance
because the CBA’s arbitration provision does not contemplate
RICO claims and does not bind CET with regard to the ILWU
or the individually-named defendants. CET argues that the
CBA’s arbitration provision should be interpreted to exclude
any statutory claims or any disputes between the employer
and the ILWU umbrella organization, or between the
employer and the 154 individually-named defendants. These
arguments fail for several reasons.

    CET’s preferred reading of the arbitration provision
directly contradicts the plain text of the CBA. By its own
terms, the CBA’s arbitration provision applies to “any
controversy or disagreement or dispute . . . as to the
interpretation, application, or violation” of “any” of its
provisions. ¶ 16-2. It then sets forth a process for the
resolution of “all grievances.” ¶ 16-4. The text of the CBA
does not say, as it could, that RICO—or any other statutory
claim—is excluded from the grievance process, even if it
involves “the interpretation, application, or violation” of the
CBA.

    Rather, the CBA explicitly contemplates a dispute
resolution mechanism covering the exact conduct alleged as
          COLUMBIA EXPORT TERMINAL V. ILWU                  19

the basis of CET’s current claims. For example, Section XIV
lays out the standard of work expected of individual
employees (e.g., “not leaving their work station in advance of
the designated quitting time”) and goes on to state that “[a]ny
Employer may file with the union a complaint in writing
against any member of the grain section of the Union” and
allows the aggrieved employer to proceed before the Joint
Labor Relations Committee if it does not receive a
satisfactory response.

    Further, the ILWU is a signatory to the agreement and is
capable of enforcing the agreement on its own behalf, and the
employees, through their bargaining representatives, are also
treated as parties to the agreement.

    At most, CET’s preferred interpretation could create some
doubt as to the scope of the CBA’s grievance procedures.
Even so, “[t]he party contesting arbitrability bears the burden
of demonstrating how the language in the collective
bargaining agreement excludes a particular dispute from
arbitration.” Standard Concrete Prods., Inc. v. Gen. Truck
Drivers, Office, Food & Warehouse Union, Local 952,
353 F.3d 668, 674 (9th Cir. 2003) (quoting Phx. Newspaper,
Inc. v. Phx. Mailers Union Local 752, 989 F.2d 1077, 1080
(9th Cir. 1993)). Any “[d]oubts should be resolved in favor of
coverage.” Id. at 674 (citations omitted). CET, as the party
refuting the plain reading of the CBA’s scope, has not met its
burden of persuasion.

   The dissent reaches a different conclusion in large
because it disregards the presumption in favor of arbitration
under federal law. It contends, at 35, that the parties must
“expressly consent” to arbitrate RICO claims, citing Granite
Rock Co. v. Int’l Brotherhood of Teamsters, 561 U.S. 287,
20        COLUMBIA EXPORT TERMINAL V. ILWU

300 (2010). But it does not consider or account for what else
Granite Rock says.

    Like this case, Granite Rock was a dispute between an
employer and a union. The CBA governing the relationship
between the parties expired in April 2004. Id. at 292. When
negotiations for a new CBA reached an impasse, the union
workers initiated a strike in June 2004. Id. Granite Rock and
the union ultimately reached an agreement on a new CBA on
July 2. Id. at 292–93. However, the new CBA did not include
a provision to hold the union and its members harmless for
any strike-related damages that the employer may have
incurred in the interim. Id. at 293. In an effort to secure the
waiver of liability, the local union, under the instruction of its
parent, the International Brotherhood of Teamsters (“IBT”),
resumed the strike even though the new CBA contained a no-
strike provision. Id. Granite Rock brought a § 301 action in
federal court seeking an injunction against the ongoing strike,
and seeking damages against both the local union and IBT.
Id. at 294. The strike ultimately ended in September, but
Granite Rock continued to seek damages. Id. at 294–95.

     During the litigation, a factual dispute arose as to the date
that the new CBA became effective, with Granite Rock
claiming that the agreement was ratified by union members
on July 2, and the union claiming that it was ratified later, on
August 22. Id. at 295. The district court held that the issue
was for a court to decide, and submitted the question to a
jury, which reached a unanimous verdict that the local had
ratified the CBA on July 2. Id. at 295. The Ninth Circuit
reversed, reasoning that the parties’ dispute was governed by
the CBA’s arbitration clause, which covered strike-related
claims. Id.
          COLUMBIA EXPORT TERMINAL V. ILWU                     21

    The Supreme Court granted certiorari, and reversed,
viewing the case as an opportunity to “reemphasize the
proper framework for deciding when disputes are arbitrable.”
Id. at 297. The Court began with the proposition that “[i]t is
well settled in both commercial and labor cases that whether
parties have agreed to submit a particular dispute to
arbitration is typically an issue for judicial determination.” Id.
at 296 (internal quotation marks and brackets omitted). More
specifically, “where the dispute at issue concerns contract
formation, the dispute is generally for courts to decide.” Id.
But where, as here, the formation and validity of the contract
is not at issue, and the parties “have agreed to arbitrate some
matters pursuant to an arbitration clause, the law’s permissive
policies in respect to arbitration counsel that any doubts
concerning the scope of arbitral issues should be resolved in
favor of arbitration.” Id. at 298 (internal quotation marks and
emphasis omitted). In such cases, reviewing courts must
proceed by:

        (1) applying the presumption of arbitrability
        only where a validly formed and enforceable
        arbitration agreement is ambiguous about
        whether it covers the dispute at hand; and
        (2) adhering to the presumption and ordering
        arbitration only where the presumption is not
        rebutted.

Id. at 301 (internal quotation marks omitted).

    The parties in our case do not dispute that there is a valid
CBA and that the CBA includes a grievance provision under
which they have agreed to arbitrate some matters. The dissent
does not contend otherwise. Rather, there is only a dispute as
to whether the agreement’s scope covers CET’s RICO claims.
22         COLUMBIA EXPORT TERMINAL V. ILWU

Granite Rock directs us, therefore, to resolve any doubts
concerning the scope of issues to be referred to arbitration in
favor of arbitration. That is the process that the district court
followed to reach the conclusion that we affirm.

    We do not hold, as the dissent suggests, at 41, that RICO
claims are preempted by the LMRA and subject to arbitration
in every instance, simply by virtue of being an “employment-
related dispute.” Like state-law fraud claims, RICO claims
are not preempted or precluded by § 301 unless they are
(1) based on a right or duty created by the CBA, or (2) require
interpretation of the CBA. See, e.g., Operating Eng’rs
Pension Tr. v. Wilson, 915 F.2d 535, 537–39 (9th Cir. 1990)
(holding that § 301 does not preempt state tort claim for
fraud in the inducement of a CBA).3 Even then, reviewing
courts must still look to the scope of the CBA’s arbitration
provision to determine if those claims are arbitrable under the
framework established in Granite Rock.

    The dissent’s argument that there is no presumption in
favor of arbitration, such that it must be established that the
parties agreed to each specific type of claim, is simply
inconsistent with Granite Rock, the authority it purports to
rely on, and decades of caselaw. See, e.g., United
Steelworkers of Am. v. Warrior & Gulf Navigation Co.,
363 U.S. 574, 582–83 (1960) (“[Under § 301, an] order to
arbitrate the particular grievance should not be denied unless
it may be said with positive assurance that the arbitration
clause is not susceptible of an interpretation that covers the

     3
      Similarly, we have already held that federal labor law does not
preclude criminal RICO action. See, e.g., United States v. Thordarson,
646 F.2d 1323, 1331 (9th Cir. 1981).
            COLUMBIA EXPORT TERMINAL V. ILWU                           23

asserted dispute. Doubts should be resolved in favor of
coverage.”)4

   Finally, we note that CET is not permanently barred from
pursuing its claims. The dismissal by the district court was
without prejudice and properly so. CET is simply required to
exhaust the grievance process to which it agreed in the CBA
before it can proceed in federal court with those claims.

    D. The Buell exception does not apply.

    We address one final point. CET argues that another
precedent, Atchison, Topeka & Santa Fe Ry. Co. v. Buell,
480 U.S. 557 (1987), should control. We disagree.

    In Buell, the Supreme Court held that an employee’s
claims under an independent federal statute, the Federal
Employers Liability Act, were not precluded by the RLA. Id.
at 565–67. In that decision, however, the Supreme Court
reiterated the general rule in favor of compelling arbitration
in labor disputes, while recognizing an exception for claims
based on federal statutes that contain specific substantive
guarantees for workers. Id. at 565 (“[N]otwithstanding the
strong policies encouraging arbitration, ‘different
considerations apply where the employee’s claim is based on
rights arising out of a statute designed to provide minimum
substantive guarantees to individual workers.’” (quoting

    4
      See also Gateway Coal Co. v. United Mine Workers, 414 U.S. 368,
377–78 (1974); Nolde Bros. v. Bakery & Confectionery Workers Union,
430 U.S. 243, 254–55 (1977); AT&T Techs. v. Communs. Workers of Am.,
475 U.S. 643, 650 (1986); Inlandboatmens Union of the Pac. v. Dutra
Grp., 279 F.3d 1075, 1078 (9th Cir. 2002); SEIU v. St. Vincent Med. Ctr.,
344 F.3d 977, 985 (9th Cir. 2003); Int’l All. of Theatrical Stage Emple. v.
Insync Show Prods., Inc., 801 F.3d 1033, 1042 (9th Cir. 2015).
24       COLUMBIA EXPORT TERMINAL V. ILWU

Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S.
728, 737 (1981))); see also id. (citing McDonald v. West
Branch, 466 U.S. 284 (1984) (CBA arbitration decision does
not preclude § 1983 claims); Barrentine, 450 U.S. 728 (CBA
arbitration decision does not preclude FLSA claims);
Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974) (CBA
arbitration decision does not preclude Title VII claims)).

    This reading of Buell is consistent with decisions that
have stressed that “§ 301 cannot be read broadly to pre-empt
nonnegotiable rights conferred on individual employees [even
under] state law.” Livadas v. Bradshaw, 512 U.S. 107, 123
(1994). “Setting minimum wages, regulating work hours and
pay periods, requiring paid and unpaid leave, protecting
worker safety, prohibiting discrimination in employment, and
establishing other worker rights remains well within the
traditional police power of the states.” Alaska Airlines,
898 F.3d at 919. Therefore, “claims alleging violations of
such protections will not necessarily be preempted, even
when the plaintiff is covered by a CBA.” Curtis, 913 F.3d
at 1152.

    We have consistently observed this exception. See, e.g.,
Felt v. Atchison, Topeka & Santa Fe Ry. Co., 60 F.3d 1416
(9th Cir. 1995) (RLA does not preclude Title VII claims);
Saridakis v. United Airlines, 166 F.3d 1272 (9th Cir. 1999)
(RLA does not preclude ADA claims).

    The exception does not apply here, however. The current
claims have been brought by an employer, and the federal
statute at issue, RICO, does not establish substantive
guarantees for workers.
          COLUMBIA EXPORT TERMINAL V. ILWU                  25

III.     Conclusion

    We affirm the dismissal of this action without prejudice
by the district court. CET’s RICO claims are subject to the
CBA’s arbitration provision, and are precluded by LMRA
§ 301.

       AFFIRMED.

IKUTA, Circuit Judge, dissenting:

    The majority today makes two serious errors that will
throw our Labor Management Relations Act (LMRA)
jurisprudence into disarray. First, it holds that any federal
claim that is related to a collective-bargaining agreement
(CBA) is preempted or precluded by § 301 of LMRA and
must automatically be dismissed by the district court and sent
for arbitration. Majority at 17–18. This ruling mistakenly
applies our jurisprudence developed for Railway Labor Act
(RLA) claims to LMRA claims. Second, the majority
contradicts itself by holding that even if a federal claim is
“precluded,” a court “must still look to the scope of the
CBA’s arbitration provision to determine if those claims are
arbitrable.” Majority at 22. Here, the majority errs by
applying a presumption of arbitrability, even though the
Supreme Court has made clear that such a presumption does
not apply where the arbitration provision is unambiguous.
Granite Rock Co. v. Int’l Brotherhood of Teamsters, 561 U.S.
287, 301 (2010). In light of these and other errors, I dissent.
26             COLUMBIA EXPORT TERMINAL V. ILWU

                                        I

    The primary purpose of § 301 of LMRA is to ensure that
federal courts can apply federal common law to CBA
disputes even when a claim is pleaded as a state-law claim.
On its face, § 301 gives federal courts jurisdiction over
“[s]uits for violation of contracts between an employer and a
labor organization representing employees in an industry
affecting commerce.” 29 U.S.C. § 185(a).1 The Supreme
Court has interpreted this section as directing federal courts
to create and apply a federal common law for interpreting
CBAs, see Textile Workers Union v. Lincoln Mills of Ala.,
353 U.S. 448, 456 (1957), so as to ensure that uniform federal
labor law prevails over inconsistent interpretations of CBAs
by state courts. See Loc. 174, Teamsters, Chauffeurs,
Warehousemen & Helpers v. Lucas Flour Co., 369 U.S. 95,
104–05 (1962). We refer to state claims covered by § 301 of
LMRA as “preempted” and federal claims covered by § 301
of LMRA as “precluded.” Alaska Airlines, Inc. v. Schurke,
898 F.3d 904, 920 n.10 (9th Cir. 2018) (en banc). These
terms do not mean “typical conflict preemption” or
preclusion, id. at 922, but merely refer to claims that,
pursuant to § 301 of LMRA, must be decided in federal court
under federal labor law.

     1
         Section 301 of LMRA, 29 U.S.C. § 185(a), states in full:

            Suits for violation of contracts between an employer
            and a labor organization representing employees in an
            industry affecting commerce as defined in this chapter,
            or between any such labor organizations, may be
            brought in any district court of the United States having
            jurisdiction of the parties, without respect to the amount
            in controversy or without regard to the citizenship of
            the parties.
            COLUMBIA EXPORT TERMINAL V. ILWU                           27

     If a plaintiff brings a state-law claim in state court, courts
apply a two-part inquiry, asking whether (1) the claim alleges
a breach of a CBA or (2) requires the interpretation of the
CBA. See, e.g., Lingle v. Norge Div. of Magic Chef, Inc.,
486 U.S. 399, 405–07 (1988); Schurke, 898 F.3d at 920. If
the court finds that § 301 of LMRA applies under this two-
part test, then the defendants may remove the case to federal
court through the jurisdictional doctrine of “complete
preemption,” which is “an exception to the well-pleaded
complaint rule.” Schurke, 898 F.3d at 923 n.15. Once the
federal court determines that removal under § 301 of LMRA
was proper, the jurisdictional inquiry for preemption is over.
By contrast, when a federal claim is brought in federal court
in the first instance, no jurisdictional inquiry under § 301 of
LMRA is necessary. Therefore, in this context, § 301 has
little work to do.2

    Once a claim (state or federal) is properly in federal court,
the court’s inquiry under LMRA is, at its core, a question of
contract interpretation. See id. at 918 n.7.3 If the claim

    2
      Indeed, given the limited nature of LMRA’s impact in this context,
a sister circuit has concluded that “the motivating purpose of § 301
preemption simply does not apply” to federal claims. Watts v. United
Parcel Serv., Inc., 701 F.3d 188, 190–93 (6th Cir. 2012). We have not
directly ruled on this point. Cf. Schurke, 898 F.3d at 920 & n.10.
     3
       Although the majority claims that other circuits apply a
“preemption” or “preclusion” test to consider federal claims in the context
of labor disputes, Majority at 14 n.2, the LMRA cases cited by the
majority merely determined that an employee’s Fair Labor Standards Act
claims required an interpretation of the CBA, and therefore were subject
to LMRA’s statute of limitations. See Vadino v. A. Valey Eng’rs, 903
F.2d 253, 266 (3d Cir. 1990); Martin v. Lake Cnty. Sewer Co., 269 F.3d
673, 679 (6th Cir. 2001). These cases do not affect the conclusion that,
after federal jurisdiction exists, we are tasked only with deciding a
28          COLUMBIA EXPORT TERMINAL V. ILWU

alleges a breach of the CBA or requires interpretation of the
CBA, then the federal court need only read, apply, and
enforce the CBA, including any applicable arbitration
provision. There is no “presumption that labor disputes are
arbitrable whenever they are not expressly excluded from an
arbitration clause.” Granite Rock, 561 U.S. at 301 n.8. If the
CBA or labor contract does not require that the dispute be
resolved by arbitration, then the court must resolve the
dispute itself by applying the terms of the CBA pursuant to
federal common labor law. See, e.g., Painting & Decorating
Contractors Ass’n v. Painters & Decorators Joint Comm.,
707 F.2d 1067, 1070–72 (9th Cir. 1983).

     This contractual focus differentiates LMRA from the
RLA, 45 U.S.C. §§ 151–65, which covers the railroad and
airline industries. The standard for determining when a state-
law claim is preempted by the RLA is “virtually identical to
the pre-emption standard the Court employs in cases
involving § 301 of the LMRA.” Hawaiian Airlines, Inc. v.
Norris, 512 U.S. 246, 260 (1994). But if the RLA’s dispute-
resolution provisions apply to a claim, then the statute itself
“requires submission of such disputes to internal dispute-
resolution processes and then to a division of the National
Adjustment Board or an arbitration board selected by the
parties.” Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d
1241, 1245 (9th Cir. 2009). Because the text of the RLA
mandates arbitration of any covered claim, it provides no
guidance in determining whether a claim precluded by
LMRA must be arbitrated. Cf. Hubbard v. United Airlines,

question of contract interpretation to determine whether the federal claims
must be arbitrated. See Granite Rock, 561 U.S. at 310–11.
            COLUMBIA EXPORT TERMINAL V. ILWU                          29

Inc., 927 F.2d 1094, 1097–98 (9th Cir. 1991), abrogated in
part, Norris, 512 U.S. at 263 n.9.4

    Here, Columbia Export Terminal (CET) brought federal
claims in federal court, so no jurisdictional inquiry is required
to ensure the propriety of removing the case from state court.
And because § 301 of LMRA applies, rather than the RLA,
this case presents only a question of contract interpretation,
see Granite Rock, 561 U.S. at 311, and we must determine
whether CET’s claims as pleaded are subject to the CBA’s
grievance and arbitration procedures. In short, the only
question at issue here is whether CET’s complaint raises
claims that the parties intended to be decided in the arbitral
forum established by the CBA among the parties.
Accordingly, to the extent the majority holds that if a federal
claim is “grounded in the provisions of a CBA or requiring
interpretation of a CBA,” Majority at 13, then the claim is
precluded by § 301 of LMRA and must be dismissed by the
district court for arbitration, Majority at 17–18, it is wrong.

                                   II

    After consuming multiple pages with its theory that RICO
claims are “precluded by § 301” and subject to the two-part

    4
      Thus, the majority’s reliance on RLA cases that required federal
RICO claims to go to RLA-mandated adjustment boards, Majority at 14
& n.2, is inapposite, as these cases do not provide guidance on the
question whether LMRA can “preclude” CET’s RICO claims. Cf.
Underwood v. Venango River Corp., 995 F.2d 677, 685 (7th Cir. 1993),
overruled in part, Westbrook v. Sky Chefs, Inc., 35 F.3d 316, 317–18 (7th
Cir. 1994). And the majority’s reliance on ERISA cases involving RLA-
mandated arbitration proves even less persuasive, because ERISA itself
disclaims any effect on or conflict with earlier enacted federal laws. See
29 U.S.C. § 1144(d).
30        COLUMBIA EXPORT TERMINAL V. ILWU

test for preemption, Majority at 10–18, the majority suddenly
shifts gear and indicates that this conclusion is irrelevant,
because, even after the two-step preemption test, “reviewing
courts must still look to the scope of the CBA’s arbitration
provision to determine if those claims are arbitrable under the
framework established in Granite Rock.” Majority at 22.
Although this conclusion is correct (and makes the majority’s
lengthy preclusion analysis mere dicta), the majority errs by
misunderstanding Granite Rock’s analysis of how courts must
determine whether an arbitration provision in a CBA covers
the claim at issue.

                              A

    In Granite Rock, the Ninth Circuit made the same mistake
the majority makes here: it applied the presumption that “any
doubts concerning the scope of arbitral issues should be
resolved in favor of arbitration,” and erroneously held that a
LMRA dispute was governed by a CBA’s arbitration clause.
561 U.S. at 298. The Supreme Court reversed. As Granite
Rock explained, the Supreme Court has never “held that
courts may use policy considerations as a substitute for party
agreement,” id. at 303, or “held that this policy overrides the
principle that a court may submit to arbitration ‘only those
disputes . . . that the parties have agreed to submit,’” id.
at 302 (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S.
938, 943 (1995)). Rather, a court must apply “the proper
framework for deciding when disputes are arbitrable.” Id.
at 297.

    Under the Granite Rock framework, a court must first use
ordinary principles of contract interpretation to determine if
the arbitration provision is “best construed to encompass the
dispute.” Id. at 303. “[A] court may order arbitration of a
          COLUMBIA EXPORT TERMINAL V. ILWU                   31

particular dispute only where the court is satisfied that the
parties agreed to arbitrate that dispute.” Id. at 297. This
means that a court must first “resolve any issue that calls into
question the formation or applicability of the specific
arbitration clause that a party seeks to have the court
enforce.” Id.

    Then, only “where a validly formed and enforceable
arbitration agreement is ambiguous about whether it covers
the dispute at hand,” may a court apply “the presumption of
arbitrability” and ask whether the arbitration provision is
reasonably construed as covering the asserted dispute. Id.
at 301. Even if the court concludes the arbitration provision
is susceptible to such an interpretation, and therefore the
presumption of arbitrability applies, a court may order
arbitration “only where the presumption is not rebutted.” Id.

                               B

    Applying this framework here, we begin by construing
the text of the CBA, using ordinary principles of contract
interpretation, to determine which claims must be decided by
the CBA’s grievance and arbitration procedures. Section
XVI of the CBA provides “procedures for handling
grievances and disputes.” The CBA defines a grievance as
follows:

        A grievance shall be defined as any
        controversy or disagreement or dispute
        between the applicable ILWU Local Union
        and the Employer for the particular grain
        elevator(s) involved as to the interpretation,
        application, or violation of any provision of
        this Agreement.
32        COLUMBIA EXPORT TERMINAL V. ILWU

     The CBA provides that all grievances between the local
unions and CET must be resolved pursuant to the procedures
in Section XVI of the CBA. Under Section XVI, the parties
must attempt to resolve the grievance informally. If it is not
resolved, it must be referred to a “Joint Labor Relations
Committee” comprised of representatives from “the
applicable ILWU Local Union” and “the applicable
Employer.” The committee has “the power and duty to
investigate and adjudicate all grievances or disagreements or
disputes arising under this Agreement.” If the committee is
unable to resolve the dispute, then the committee defines “the
question or questions in dispute,” and either party may refer
the question “to an impartial arbitrator.” The CBA then
outlines the procedure for conducting arbitration. Finally,
CET “shall also have the right to file a grievance and to
follow the above grievance procedure in an effort to resolve
it.”

                              C

    After reviewing the relevant provisions of the CBA
regarding which claims are subject to its grievance and
arbitration procedures, we next consider the nature of CET’s
claims, beginning with an accurate description of CET’s
claims “as pleaded.” See Schurke, 898 F.3d at 924 (holding
that, in determining whether a state law claim requires the
interpretation of a CBA, a federal court must consider the
claim “as pleaded”). According to the operative complaint,
CET employs union-represented workers to load grain for
international shipping at a terminal in Portland, Oregon
(Terminal 5). CET sued the International Longshore and
Warehouse Union (ILWU) and approximately 160 individual
hourly workers who are members of two local labor
organizations chartered by ILWU. According to the
            COLUMBIA EXPORT TERMINAL V. ILWU                           33

complaint, the defendants, “with specific intent to defraud,
jointly entered into a conspiracy and scheme” to “routinely
and systematically, over a period of more than four years,”
under-staff jobs and submit time sheets “indicating time
worked for employees who did not work, and were not even
at Terminal 5, for some or all of the indicated time.” The
complaint alleged that workers “billed hours and received
unearned payment” for time claimed on their time sheets
when they were not present at Terminal 5. Among other
practices, workers split shifts “with one working the first half
and the other working the second half, yet submitting time
sheets indicating falsely that both had worked the full shift.”
Another practice involved workers who were present at the
terminal submitting time sheets showing that an absent
worker, who had not showed up, “worked a full shift.” The
complaint alleged that through these fraudulent practices,
workers illegally obtained over $5 million from CET.

    Based on these factual allegations, the complaint brought
seven RICO claims.5 The complaint alleged that each
submission of a fraudulent time sheet constituted a predicate
act of mail or wire fraud under 18 U.S.C. § 1341 and § 1343,
and that the defendants engaged in a pattern of racketeering
activity.

    5
      These claims include allegations that the defendants invested income
derived from a pattern of racketeering activity in violation of 18 U.S.C.
§ 1962(a), that ILWU acquired an indirect interest in and indirect control
of CET through a pattern of racketeering activity in violation of 18 U.S.C.
§ 1962(b), that the defendants participated in the conduct of the local
unions through a pattern of racketeering activity in violation of 18 U.S.C.
§ 1962(c), and that the defendants conspired to violate the prior three
sections in violation of 18 U.S.C. § 1962(d).
34        COLUMBIA EXPORT TERMINAL V. ILWU

                              D

    The key question is whether CET’s claims, as pleaded,
must be arbitrated under the CBA. To make this
determination, we apply principles of contract interpretation,
as informed by the common law of federal labor law and
labor arbitration precedents. See Standard Concrete Prods.,
Inc. v. Gen. Truck Drivers, Office, Food & Warehouse Union,
Loc. 952, 353 F.3d 668, 673–75 (9th Cir. 2003); see also M
& G Polymers USA, LLC v. Tackett, 574 U.S. 427, 435
(2015); Granite Rock, 561 U.S. at 298 n.6.

    Federal common law provides important guidance for
interpreting the key terms in the CBA. Under federal
common law, we construe the word “interpretation” narrowly
as meaning “something more than ‘consider,’ ‘refer to,’ or
‘apply.’” Schurke, 898 F.3d at 921 (quoting Balcorta v.
Twentieth Century-Fox Film Corp., 208 F.3d 1002, 1108 (9th
Cir. 2000)). Because a plaintiff’s claim, “as pleaded,” drives
the analysis, there must be an “active dispute” as to the
interpretation of a CBA provision and not simply a
“‘hypothetical connection between the claim and the terms of
the CBA.’” Schurke, 898 F.3d at 921 (quoting Cramer v.
Consol. Freightways, Inc., 255 F.3d 683, 691 (9th Cir. 2001)
(en banc)). A court must wait until an active dispute arises;
it cannot rely on the “speculative possibility” of an
interpretive dispute or the “possibility that things could
change down the road.” McCray v. Marriott Hotel Servs.,
Inc., 902 F.3d 1005, 1013 (9th Cir. 2018). Nor does an
interpretive dispute exist merely because a defendant relies
on CBA provisions as a defense to a plaintiff’s claim. See,
e.g., Ward v. Circus Circus Casinos, Inc., 473 F.3d 994,
997–99 (9th Cir. 2007); Detabali v. St. Luke’s Hosp.,
          COLUMBIA EXPORT TERMINAL V. ILWU                  35

482 F.3d 1199, 1203–04 (9th Cir. 2007); Matson v. United
Parcel Serv., Inc., 840 F.3d 1126, 1134–35 (9th Cir. 2016).

    Using ordinary principles of contract interpretation, it is
immediately apparent that the arbitration provision in the
CBA does not cover CET’s claims against ILWU. The
CBA’s interpretation of “grievance” is limited to
controversies, disagreements, or disputes “between the
applicable ILWU Local Union and the Employer for the
particular grain elevator(s).” Therefore, it is unambiguous
that CET’s claims against ILWU falls outside the definition
of a grievance. See, e.g., Standard Concrete, 353 F.3d at
674–75. Accordingly, CET has no obligation to arbitrate its
claims against ILWU. The majority errs in holding
otherwise. Majority at 18–22.

    Second, it is immediately apparent that the parties did not
agree to arbitrate federal statutory claims in general, or RICO
claims in particular. The parties to the CBA could have
agreed to do so, because courts will enforce agreements to
arbitrate federal statutory claims, see 14 Penn Plaza LLC v.
Pyett, 556 U.S. 247, 263–64 (2009). But, for such an
agreement to be enforceable, the parties must expressly
consent to such a provision, see id.; Granite Rock, 561 U.S.
at 300, and any CBA requirement to arbitrate such claims
“must be particularly clear,” Wright v. Universal Mar. Serv.
Corp., 525 U.S. 70, 79–80 (1998). The CBA’s grievance and
arbitration provisions here do not expressly agree to arbitrate
RICO claims, or any other statutory claims, or authorize the
arbitrators to resolve such claims.

    Therefore, unless the CBA’s arbitration provision is
ambiguous, it would apply to CET’s claims only if the CBA’s
definition of “grievance” is best construed as covering the
36        COLUMBIA EXPORT TERMINAL V. ILWU

claims. The word “grievance” is defined in the CBA as “any
controversy or disagreement or dispute” involving “the
interpretation, application, or violation of any provision of
this Agreement.” Under federal labor law, a dispute over “the
interpretation or application” of a CBA refers to “a claim
arising out of a CBA.” Norris, 512 U.S. at 254. Because
CET does not allege a violation of the CBA, and there is no
dispute over how a CBA provision applies to CET’s claims,
the key question is whether litigating CET’s RICO claim
“requires interpretation of a CBA.” Schurke, 898 F.3d at 921.
As noted above, under federal common labor law,
“‘interpretation’ is construed narrowly,” and covers claims
only “to the extent there is an active dispute over ‘the
meaning of contract terms.’” Id. (quoting Livadas v.
Bradshaw, 512 U.S. 107, 124 (1994)).

    Based on a straightforward application of ordinary
contract interpretation principles, resolving CET’s RICO
claims does not require interpretation of the CBA. The
complaint simply alleges that the individual workers
submitted fraudulent time sheets claiming hours worked at
Terminal 5 during periods in which they were not physically
present at the terminal. Proving the elements of mail and
wire fraud here requires only a factual inquiry into whether
employees claimed they were working when they were not
physically on site. “The need for a ‘purely factual inquiry
that does not turn on the meaning of any provision of a
collective-bargaining agreement,’ however, is not cause for
preemption under section 301,” Burnside v. Kiewit Pac.
Corp., 491 F.3d 1053, 1072 (9th Cir. 2007) (quoting Lingle,
486 U.S. at 407) (cleaned up), meaning that a purely factual
inquiry does not require an interpretation of a CBA under our
two-part test.
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     The defendants’ arguments to the contrary fail. Because
it is not possible to explain how CET’s claims, “as pleaded,”
require construing the CBA, Schurke, 898 F.3d at 924, the
defendants take the easier route of recharacterizing the
complaint. While CET’s complaint alleges that defendants
conspired to defraud CET by making false claims about their
presence for work at Terminal 5, the defendants reinvent the
complaint as alleging instead that CET overpaid the
individual defendants for not working hard enough while on
site. The majority follows this same approach, pretending
that CET is merely disputing whether defendants billed hours
that were or were not “expressly authorized by CET and
charged in accordance with the CBA.” Majority at 16.

    Having recharacterized CET’s complaint in this way, the
defendants then argue that interpretation of the CBA is
necessary to address their defense that the CBA’s pay
guarantees, minimum staffing levels, longstanding industry
practices, and the parties’ bargaining discussions justify the
employees’ wage claims, because employees are entitled to
compensation for certain time not worked. The majority
again echoes this approach, identifying hypothetical defenses
that the defendants could raise to “excuse the workers from
being present at the time of work reported on the timesheets”
or to “explain why workers are compensated for time not
actually worked.” Majority at 16. Indeed, the majority goes
so far as to suggest there could be an interpretive dispute over
whether defendants were entitled to compensation for paid
holidays.6 Majority at 17. The majority concludes that the
mere existence of these hypothetical defenses in the CBA

    6
       Given that the CBA helpfully defines Christmas Day as December
25, there is unlikely to be an interpretive dispute over the defendants’
entitlement to payment for this holiday.
38        COLUMBIA EXPORT TERMINAL V. ILWU

means that adjudication of CET’s re-imagined claims will
substantially depend on interpretation of the CBA. Majority
at 16–18.

    These arguments are meritless. We must consider CET’s
claims “as pleaded,” and those claims allege only that
defendants engaged in fraud by claiming they were present at
Terminal 5 when they were not. No contract terms in the
CBA authorize that sort of fraud, so interpretation of the CBA
is not required. The defendants’ possible future defenses do
not turn CET’s claims into “grievances” as defined in the
CBA. The Supreme Court has made clear that a party cannot
manufacture a CBA dispute through raising a defense, see
Caterpillar, Inc v. Williams, 482 U.S. 386, 398–99 (1987);
Schurke, 898 F.3d at 921. While defendants may defend
themselves on the ground that CET’s allegations are factually
erroneous (for instance, because workers arrived at the
terminal but then were released from work as permitted under
the CBA, because weather prevented work, because workers
get a paid holiday for Christmas Day, or because CET could
not provide sufficient work), such factual questions or
excuses do not create any disputes about the interpretation of
CBA provisions at this stage of the litigation. Nor does the
defendants’ defense that the alleged fraud did not result in
overbilling raise an interpretive dispute. As our en banc court
has explained, a defendant’s allegation of “a hypothetical
connection between the claim and the terms of the CBA is not
enough” to conclude that the claim “cannot be resolved
without interpreting the applicable CBA.” Cramer, 255 F.3d
at 691.

    The majority’s further arguments that CET’s claims are
grievances under the CBA are meritless. First, the majority
places weight on CET’s alleged failure to argue “that its
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claims are unrelated to the CBA.” Majority at 17–18. It then
argues that CET’s claims are related to the CBA because “the
subject of its claim, the number of hours for which its
employees are entitled to claim payment, is at the core of an
employment relationship.” Majority at 17–18. Factually, of
course, the majority is wrong: CET argued on appeal that
“the district court erred in finding that CET’s RICO claim
required substantial analysis of the CBA,” because “CET’s
complaint makes no reference to the CBA,” “does not rely
on” the CBA, and the complaint “alleges simply that the
ILWU and Members submitted fraudulent timecards claiming
they worked time that they did not work.” But more
important, for purposes of determining whether CET’s claims
are “grievances” subject to resolution under the CBA, the
existence of an employment relationship between CET and
the defendants is not dispositive. As the Supreme Court has
explained, “not every dispute concerning employment, or
tangentially involving a provision of a collective-bargaining
agreement, is pre-empted by § 301 or other provisions of the
federal labor law.” Caterpillar, 482 U.S. at 396 n.10 (quoting
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985)).
CET must only argue (as it did persuasively) that resolving its
RICO claims does not require resolving any active
interpretive dispute as to the particular meaning of CBA
provisions. Our task, in turn, is merely to consider whether
CET’s claims are “grievances” for purposes of the CBA.

    Second, the majority argues that CET’s claims are
“grievances” covered by the CBA because the CBA
provisions “could excuse” workers from being present or
“could explain” compensation for time not worked. Majority
at 16. But the CBA does not define a “grievance” as
including possible defenses that may be raised by a
defendant. The majority’s ruling is contrary to federal
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common labor law, which holds that unless there is a
currently existing, active dispute requiring interpretation of
the CBA, such a claim does not require interpretation of the
CBA. See Cramer, 255 F.3d at 691–92. Rather, “we have
held that a CBA provision does not trigger preemption when
it is only potentially relevant to the state law claims, without
any guarantee that interpretation or direct reliance on the
CBA terms will occur.” Humble v. Boeing Co., 305 F.3d
1004, 1010 (9th Cir. 2002); see also Dent v. Nat’l Football
League, 902 F.3d 1109, 1116–17 (9th Cir. 2018) (same). If
CET broadens its theory of liability later in litigation, the
defendants may again raise an argument under § 301 of
LMRA, and the court can then decide whether to refer
interpretive disputes to the CBA’s arbitration procedures at
that time. See McCray, 902 F.3d at 1013 & n.3. Likewise, if
disputes arise in the calculation of damages, then relevant
interpretive disputes may be referred to the CBA’s arbitration
procedures. See, e.g., Lingle, 486 U.S. at 413 n.12; Schurke,
898 F.3d at 922 & n.14. But because no active interpretive
dispute exists at this time as CET’s claims are pleaded, these
claims are not subject to resolution under the CBA.7 Nor
would analogous state law claims be removable under § 301
of LMRA if CET had raised the claims in state court.

      7
        Therefore, the majority has it backward in saying that CET must
first “exhaust the grievance process” and then return to federal court with
its claims. Majority at 23. Moreover, the majority’s promise that CET
can return to federal court after arbitration is an empty one. This promise
would make sense if the majority held it was necessary for arbitration to
resolve a key issue in CET’s RICO claims, and then CET could litigate the
remainder. Cf. Schurke, 898 F.3d at 922 & n.14. But because the
majority does not and cannot do so—because there is no such key
issue—its promise is empty.
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     Because CET’s RICO claims are not a “dispute . . . as to
the interpretation, application, or violation of any provision
of” the CBA, there is no “grievance,” as defined in the CBA.
The arbitration agreement is not “ambiguous about whether
it covers the dispute at hand,” Granite Rock, 561 U.S. at 310,
because the CBA is not susceptible to an interpretation that
CET’s RICO claims require an interpretation of the CBA.
Majority at 19–20. There is no ambiguity that would give
rise to a presumption of arbitrability. Because “a court may
submit to arbitration only those disputes that the parties have
agreed to submit,” id. at 302 (cleaned up), the majority errs in
holding that CET’s claims are subject to the CBA’s grievance
and arbitration procedure.

                                    E

    The majority opinion is both erroneous and internally
inconsistent. First, it presents an erroneous theory of LMRA
preclusion. Under the majority’s new rule, almost any
employment-related dispute between parties covered by a
CBA is precluded and sent to arbitration, even though the
Supreme Court has expressly disclaimed this approach and,
unlike the RLA, LMRA itself does not require arbitration of
every precluded claim. See Schurke, 898 F.3d at 918 n.7.8
Second, even though the majority goes on to hold that it
remains necessary to determine whether CET’s claims are
covered by the arbitration provision, the majority fails to

    8
      The majority disputes this characterization, Majority at 22, but the
majority points to no basis for its conclusion that CET’s RICO claims are
“substantially dependent on interpretation of the CBA” (Majority at 16)
other than its reasoning that the defendants who allegedly defrauded CET
were parties to a CBA and can now manufacture CBA-based defenses to
compel arbitration.
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apply the Granite Rock framework correctly, and instead
holds that the CBA applies based on meritless, hypothetical
connections to CBA provisions. Cf. Schurke, 898 F.3d
at 921; Cramer, 255 F.3d at 691–92. This approach is
directly contrary to the Supreme Court’s labor arbitration
precedents, which prevent a court from compelling arbitration
of disputes that the parties have not agreed to arbitrate.

    The majority offers the reassurance that workers, at least,
will not be compelled to arbitrate all their disputes, because
our cases allow workers to litigate claims based on statutes
that provide “substantive guarantees for workers.” Majority
at 23–24. Under this rationale, only employers will have to
arbitrate their claims without their consent. But the Supreme
Court’s labor arbitration precedent does not permit this
lopsided interpretation of LMRA. If the CBA expressly
requires the arbitration of a federal statutory claim, the
worker is bound to arbitration, regardless of any “substantive
guarantee.” See Penn Plaza, 556 U.S. at 256 n.5, 263–64.
And by the same token, if the employer did not consent to
arbitrate a federal statutory claim, then no labor policy
considerations can require the employer to do so. See
Granite Rock, 561 U.S. at 299, 303.

    Taken together, the majority’s many misstatements of law
upend the carefully limited scope of § 301 of LMRA that our
circuit has so consistently upheld and give future defendants
new, previously rejected, ways of depriving CBA-covered
plaintiffs of their rights to a judicial forum and to vindication
of independent statutory rights. I therefore dissent.