Court Opinion

ID: 3189049
Source: CourtListenerOpinion
Date Created: 2016-03-25 20:01:08.657578+00
Date Added: 2024-06-11T07:39:03.096256
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                           MAR 25 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

BERNADETTE PAULEY, an individual;                No. 14-55131
THOMAS CLARK, an individual on
behalf of themselves and all others              D.C. No. 2:13-cv-08011-R-CW
similarly situated,

              Plaintiffs - Appellants,           MEMORANDUM*

 v.

CF ENTERTAINMENT, a California
corporation; COMICS UNLEASHED
PRODUCTIONS, INC., a California
corporation; ENTERTAINMENT
STUDIOS, INC., a California corporation;
BYRON ALLEN FOLKS, an individual;
SCREEN ACTORS GUILD-AMERICAN
FEDERATION OF TELEVISION AND
RADIO ARTISTS, a California
corporation,

              Defendants - Appellees.

BERNADETTE PAULEY, an individual,                No. 14-55155
on behalf of herself and all others similarly
situated,                                        D.C. No. 2:13-cv-08012-R-CW

              Plaintiff - Appellant,

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
 v.

CF ENTERTAINMENT, a California
corporation; COMICS UNLEASHED
PRODUCTIONS, INC., a California
corporation; ENTERTAINMENT
STUDIOS, INC., a California corporation;
BYRON ALLEN FOLKS, an individual;
SCREEN ACTORS GUILD-AMERICAN
FEDERATION OF TELEVISION AND
RADIO ARTISTS, a California
corporation,

              Defendants - Appellees.

                    Appeals from the United States District Court
                       for the Central District of California
                     Manuel L. Real, District Judge, Presiding

                    Argued and Submitted February 10, 2016**
                               Pasadena, California

Before: FARRIS, CLIFTON, and BEA, Circuit Judges.

      Plaintiffs filed various claims in federal district court against the employer

defendants (hereinafter collectively described as “CF Entertainment”) and their

union SAG-AFTRA prior to exhausting contractual grievance procedures. The

district court dismissed all claims for lack of subject matter jurisdiction and

Plaintiffs appealed. While the appeal was pending, the union and CF Entertainment

      **
             These cases were consolidated for oral argument only. We have also
consolidated their dispositions in this Memorandum.

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purported to settle all of Plaintiffs’ claims pursuant to their authority under the

collective bargaining agreement to resolve employee grievances. We have

jurisdiction under 28 U.S.C. § 1291. We affirm in part, vacate in part, and remand

for further proceedings consistent with this memorandum disposition.

      Courts of appeals have jurisdiction to review “all final decisions of the

district courts” that continue to present a live case or controversy on appeal. 28

U.S.C. § 1291; U.S. Const. art. III, §2, cl. 2. It is immaterial to this jurisdictional

analysis whether the basis for the district court’s opinion is moot. So long as this

Court “can give the appellant any effective relief in the event that it decides the

matter on the merits in his favor,” the appeal is not moot. Garcia v. Lawn, 805 F.2d

1400, 1402 (9th Cir. 1986).

      The September 2014 settlement agreement does not moot Plaintiffs’

statutory claims against CF Entertainment. Under California law, an arbitration

clause does not encompass statutory claims unless the agreement clearly and

unmistakably states otherwise. Hoover v. Am. Income Life Ins. Co., 206 Cal. App.

4th 1193, 1208 (2012). The arbitration provision in the parties’ collective

bargaining agreement does not expressly cover statutory claims. The union and CF

Entertainment had no authority, therefore, to settle Plaintiffs’ statutory claims. As

to Plaintiffs’ claim under the Private Attorneys General Act specifically, this Court

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recently confirmed that an arbitration clause may not waive the right to file a

PAGA claim. Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425, 439 (9th Cir.

2015).

      Plaintiffs’ claim for a breach of the duty of fair representation against SAG-

AFTRA is also not moot. Post-complaint conduct cannot moot a claim for punitive

or monetary damages, as this Court may still grant effective relief for prior

misconduct, if proven on the merits. See Friends of the Earth, Inc. v. Laidlaw

Envtl. Servs. (TOC), Inc., 528 U.S. 167, 196–97 (2000) (Stevens, J., Concurring).

The union cannot moot a claim that it failed to protect its members’ interests by

later initiating a grievance and securing a settlement only after the aggrieved

members turn to the courts for relief.

      This Court may not grant relief for Plaintiffs’ contract and tort claims

against CF Entertainment, as these claims were legally settled and released by the

settlement agreement. The arbitration provision of the parties’ collective

bargaining agreement permits the union and CF Entertainment to arbitrate and

settle claims for breach of contract and any tort claims “rooted” in the contractual

relationship between the parties. Buckhorn v. St. Jude Heritage Med. Grp., 121

Cal. App. 4th 1401, 1407 (2004). Plaintiffs’ three tort claims concern CF

Entertainment’s business and employment conduct. These tort claims are rooted in

                                          4
the contractual relationship between the parties. They fall within the scope of the

arbitration provision and are moot as a result of the settlement agreement. The

dismissal of those claims is affirmed.

      We review the district court’s dismissal for lack of subject matter

jurisdiction of the non-moot claims de novo. The district court has jurisdiction over

all remaining claims. We affirm in part, vacate in part, and remand for further

proceedings.

      The district court has jurisdiction over Plaintiffs’ statutory claims against CF

Entertainment. Whether the district court erred in dismissing these claims for

failure to exhaust contractual grievance procedures is no longer an issue. The

settlement agreement has now satisfied any potential exhaustion requirement.

Plaintiffs may seek relief in federal court for any unsettled claims. See Rodrigues v.

Donovan, 769 F.2d 1344, 1349 (9th Cir. 1985). The union was not authorized to

settle Plaintiffs’ statutory claims against CF Entertainment. This portion of the

district court’s decision is vacated.

      The district court also has jurisdiction over Plaintiffs’ claim for breach of the

duty of fair representation against SAG-AFTRA. The Supreme Court has long

recognized that a labor union has a statutory duty of fair representation under the

National Labor Relations Act, which creates federal question jurisdiction over

                                          5
claims for a breach of the duty of fair representation. Breininger v. Sheet Metal

Workers Int’l Ass’n Local Union No. 6, 493 U.S. 67, 83 (1989). A fair

representation claim is a separate federal cause of action from any suit against the

employer. Id. at 84. Federal court jurisdiction exists over a claim against the union

whether or not a parallel suit against the employer is brought in federal court or

arbitration. Id. The parties’ arbitration agreement governs disputes “between any

Producer and AFTRA or between any Producer and any member of AFTRA”; it

does not apply to disputes between SAG-AFTRA and its members. The arbitrator

would have no power to award damages attributable to the union’s breach of duty.

The district court’s dismissal for lack of subject matter jurisdiction of Plaintiffs’

claim against SAG-AFTRA for breach of the duty of fair representation was error.

This portion of the district court’s decision is vacated.

      The district court properly ruled that Plaintiffs’ Unfair Business Practices

claim against SAG-AFTRA is preempted by federal law. See Adkins v. Mireles,

526 F.3d 531, 539 (9th Cir. 2008). The dismissal of that claim is affirmed.

      Plaintiffs’ request for an order of reassignment to a different district court

judge is denied.

      Each party shall bear its own costs.

                                            6
      AFFIRMED in part, VACATED in part, and REMANDED for further

proceedings.

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