OPINION OF THE COURT
GRANITE ROCK CO. V. TEAMSTERS
561 U. S. ____ (2010)
SUPREME COURT OF THE UNITED STATES
NO. 08-1214
GRANITE ROCK COMPANY, PETITIONER
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS et al.
on writ of certiorari to the united states court of
appeals for the ninth circuit
[June 24, 2010]
Justice Thomas delivered the
opinion of the Court.
This case involves an employer’s
claims against a local union and the union’s international parent
for economic damages arising out of a 2004 strike. The claims turn
in part on whether a collective-bargaining agreement (CBA)
containing a no-strike provision was validly formed during the
strike period. The employer contends that it was, while the unions
contend that it was not. Because the CBA contains an arbitration
clause, we first address whether the parties’ dispute over the
CBA’s ratification date was a matter for the District Court or an
arbitrator to resolve. We conclude that it was a matter for
judicial resolution. Next, we address whether the Court of Appeals
erred in declining the employer’s request to recognize a new
federal cause of action under §301(a) of the Labor Management
Relations Act, 1947 (LMRA), 61 Stat. 156, 29 U. S. C. §185(a),
for the international union’s alleged tortious interference with
the CBA. The Court of Appeals did not err in declining this
request.
I
Petitioner Granite Rock Company
is a concrete and building materials company that has operated in
California since 1900. Granite Rock employs approximately 800
employees under different labor contracts with several unions,
including respondent International Brotherhood of Teamsters, Local
287 (Local). Granite Rock and Local were parties to a 1999 CBA that
expired in April 2004. The parties’ attempt to negotiate a new CBA
hit an impasse and, on June 9, 2004, Local members initiated a
strike in support of their contract demands.[
Footnote 1]
The strike continued until July
2, 2004, when the parties reached agreement on the terms of a new
CBA. The CBA contained a no-strike clause but did not directly
address union members’ liability for any strike-related damages
Granite Rock may have incurred before the new CBA was negotiated
but after the prior CBA had expired. At the end of the negotiating
session on the new CBA, Local’s business representative, George
Netto, approached Granite Rock about executing a separate
“back-to-work” agreement that would, among other things, hold union
members harmless for damages incurred during the June 2004 strike.
Netto did not make execution of such an agreement a condition of
Local’s ratification of the CBA, or of Local’s decision to cease
picketing. Thus, Local did not have a back-to-work or hold-harmless
agreement in place when it voted to ratify the CBA on July 2,
2004.
Respondent International Brotherhood of
Teamsters (IBT), which had advised Local throughout the CBA
negotiations and whose leadership and members supported the June
strike, opposed Local’s decision to return to work without a
back-to-work agreement shielding both Local and IBT members from
liability for strike-related damages. In an effort to secure such
an agreement, IBT instructed Local’s members not to honor their
agreement to return to work on July 5, and instructed Local’s
leaders to continue the work stoppage until Granite Rock agreed to
hold Local and IBT members free from liability for the June strike.
Netto demanded such an agreement on July 6, but Granite Rock
refused the request and informed Local that the company would view
any continued strike activity as a violation of the new CBA’s
no-strike clause. IBT and Local responded by announcing a
company-wide strike that involved numerous facilities and hundreds
of workers, including members of IBT locals besides Local 287.
According to Granite Rock, IBT not only
instigated this strike; it supported and directed it. IBT provided
pay and benefits to union members who refused to return to work,
directed Local’s negotiations with Granite Rock, supported Local
financially during the strike period with a $1.2 million loan, and
represented to Granite Rock that IBT had unilateral authority to
end the work stoppage in exchange for a hold-harmless agreement
covering IBT members within and outside Local’s bargaining
unit.
On July 9, 2004, Granite Rock sued IBT and
Local in the District Court, seeking an injunction against the
ongoing strike and strike-related damages. Granite Rock’s
complaint, originally and as amended, invoked federal jurisdiction
under LMRA §301(a), alleged that the July 6 strike violated Local’s
obligations under the CBA’s no-strike provision, and asked the
District Court to enjoin the strike because the hold-harmless
dispute giving rise to the strike was an arbitrable grievance. See
Boys Markets, Inc. v.
Retail Clerks,
398 U. S. 235, 237–238,
253–254 (1970) (holding that federal courts may enjoin a strike
where a CBA contemplates arbitration of the dispute that occasions
the strike). The unions conceded that LMRA §301(a) gave the
District Court jurisdiction over the suit but opposed Granite
Rock’s complaint, asserting that the CBA was not validly ratified
on July 2 (or at any other time relevant to the July 2004 strike)
and, thus, its no-strike clause did not provide a basis for Granite
Rock’s claims challenging the strike.
The District Court initially denied Granite
Rock’s request to enforce the CBA’s no-strike provision because
Granite Rock was unable to produce evidence that the CBA was
ratified on July 2. App. 203–213. Shortly after the District Court
ruled, however, a Local member testified that Netto had put the new
CBA to a ratification vote on July 2, and that the voting Local
members unanimously approved the agreement. Based on this statement
and supporting testimony from 12 other employees, Granite Rock
moved for a new trial on its injunction and damages claims.
On August 22, while that motion was pending,
Local conducted a second successful “ratification” vote on the CBA,
and on September 13, the day the District Court was scheduled to
hear Granite Rock’s motion, the unions called off their strike.
Although their return to work mooted Granite Rock’s request for an
injunction, the District Court proceeded with the hearing and
granted Granite Rock a new trial on its damages claims. The parties
proceeded with discovery and Granite Rock amended its complaint,
which already alleged federal[
Footnote 2] claims for breach of the CBA against both
Local and IBT, to add federal inducement of breach and interference
with contract (hereinafter tortious interference) claims against
IBT.
IBT and Local both moved to dismiss. Among
other things, IBT argued that Granite Rock could not plead a
federal tort claim under §301(a) because that provision supports a
federal cause of action only for breach of contract. The District
Court agreed and dismissed Granite Rock’s tortious interference
claims. The District Court did not, however, grant Local’s separate
motion to send the parties’ dispute over the CBA’s ratification
date to arbitration.[
Footnote
3] The District Court held that whether the CBA was ratified on
July 2 or August 22 was an issue for the court to decide, and
submitted the question to a jury. The jury reached a unanimous
verdict that Local ratified the CBA on July 2, 2004. The District
Court entered the verdict and ordered the parties to proceed with
arbitration on Granite Rock’s breach-of-contract claims for
strike-related damages.
The Court of Appeals for the Ninth Circuit
affirmed in part and reversed in part. See 546 F. 3d 1169
(2008). The Court of Appeals affirmed the District Court’s
dismissal of Granite Rock’s tortious interference claims against
IBT. See
id., at 1170–1175. But it disagreed with the
District Court’s determination that the date of the CBA’s
ratification was a matter for judicial resolution. See
id., at 1176–1178. The Court of Appeals reasoned that the
parties’ dispute over this issue was governed by the CBA’s
arbitration clause because the clause clearly covered the related
strike claims, the “national policy favoring arbitration” required
that any ambiguity about the scope of the parties’ arbitration
clause be resolved in favor of arbitrability, and, in any event,
Granite Rock had “implicitly” consented to arbitrate the
ratification-date dispute “by suing under the contract.”
Id., at 1178 (internal quotation marks omitted). We
granted certiorari. See 557 U. S. ___ (2009).
II
It is well settled in both
commercial and labor cases that whether parties have agreed to
“submi[t] a particular dispute to arbitration” is typically an
“ ‘ issue for judicial determination.’ ”
Howsam v.
Dean Witter Reynolds, Inc.,
537 U. S. 79, 83 (2002)
(quoting
AT&T Technologies, Inc. v.
Communications
Workers,
475 U. S. 643, 649 (1986)); see
John Wiley & Sons, Inc. v.
Livingston,
376 U. S. 543,
546–547 (1964). It is similarly well settled that where the dispute
at issue concerns contract formation, the dispute is generally for
courts to decide. See,
e.g.,
First Options of Chicago,
Inc. v.
Kaplan,
514 U. S. 938, 944 (1995) (“When
deciding whether the parties agreed to arbitrate a certain matter …
courts generally … should apply ordinary … principles that govern
the formation of contracts”);
AT&T Technologies,
supra, at 648–649 (explaining the settled rule in labor
cases that “ ‘arbitration is a matter of contract’ ” and
“arbitrators derive their authority to resolve disputes only
because the parties have agreed in advance to submit such
grievances to arbitration”);
Buckeye Check Cashing, Inc.
v.
Cardegna,
546 U. S. 440, 444, n. 1 (2006)
(distinguishing treatment of the generally nonarbitral question
whether an arbitration agreement was “ever concluded” from the
question whether a contract con- taining an arbitration clause was
illegal when formed, which question we held to be arbitrable in
certain circumstances).
These principles would neatly
dispose of this case if the formation dispute here were typical.
But it is not. It is based on when (not whether) the CBA that
contains the parties’ arbitration clause was ratified and thereby
formed.[
Footnote 4] And at the
time the District Court considered Local’s demand to send this
issue to an arbitrator, Granite Rock, the party resisting
arbitration, conceded both the formation and the validity of the
CBA’s arbitration clause.
These unusual facts require us to reemphasize
the proper framework for deciding when disputes are arbitrable
under our precedents. Under that framework, a court may order
arbitration of a particular dispute only where the court is
satisfied that the parties agreed to arbitrate
that
dispute. See
First Options,
supra, at 943;
AT&T Technologies,
supra, at 648–649. To
satisfy itself that such agreement exists, the court must 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. See,
e.g.,
Rent-A-Center, West,
Inc. v.
Jackson,
ante, at 4–6 (opinion of
Scalia, J.). Where there is no provision validly committing them to
an arbitrator, see
ante, at 7, these issues typically
concern the scope of the arbitration clause and its enforceability.
In addition, these issues always include whether the clause was
agreed to, and may include when that agreement was formed.
A
The parties agree that it was
proper for the District Court to decide whether their ratification
dispute was arbitrable.[
Footnote
5] They disagree about whether the District Court answered the
question correctly. Local contends that the District Court erred in
holding that the CBA’s ratification date was an issue for the court
to decide. The Court of Appeals agreed, holding that the District
Court’s refusal to send that dispute to arbitration violated two
principles of arbitrability set forth in our precedents. See 546
F. 3d, at 1177–1178. The first principle is that where, as
here, parties concede that they 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.’ ”
First
Options,
supra, at 945 (quoting
Mitsubishi Motors
Corp. v.
Soler Chrysler-Plymouth, Inc.,
473 U. S. 614, 626
(1985)); see 546 F. 3d, at 1177–1178 (citing this principle
and the “national policy favoring arbitration” in concluding that
arbitration clauses “are to be construed very broadly” (internal
quotation marks and citations omitted)). The second principle the
Court of Appeals invoked is that this presumption of arbitrability
applies even to disputes about the enforceability of the entire
contract containing the arbitration clause, because at least in
cases governed by the Federal Arbitration Act (FAA), 9 U.
S. C. §1
et seq.,[
Footnote 6] courts must treat the arbitration clause as
severable from the contract in which it appears, and thus apply the
clause to all disputes within its scope “ ‘[u]nless the
[validity] challenge is to the arbitration clause itself’ ” or
the party “disputes the formation of [the] contract,” 546
F. 3d, at 1176 (quoting
Buckeye, 546 U. S., at
445–446); 546 F. 3d, at 1177, and n. 4 (explaining that
it would treat the parties’ arbitration clause as enforceable with
respect to the ratification-date dispute because no party argued
that the “clause is invalid in any way”)).
Local contends that our
precedents, particularly those applying the “ ‘ federal
policy favoring arbitration of labor disputes,’ ” permit no
other result. Brief for Respondent Local, p. 15 (quoting
Gateway Coal Co. v.
Mine Workers,
414 U. S. 368, 377 (1974)); see Brief
for Respondent Local, pp. 10–13; 16–25. Local, like the Court of
Appeals, overreads our precedents. The language and holdings on
which Local and the Court of Appeals rely cannot be divorced from
the first principle that underscores all of our arbitration
decisions: Arbitration is strictly “a matter of consent,”
Volt
Information Sciences, Inc. v.
Board of Trustees of Leland
Stanford Junior Univ.,
489 U. S. 468, 479
(1989), and thus “is a way to resolve those disputes—
but only
those disputes—that the parties have agreed to submit to
arbitration,”
First Options, 514 U. S., at 943 (emphasis
added).[
Footnote 7] Applying
this principle, our precedents hold that courts should order
arbitration of a dispute only where the court is satisfied that
neither the formation of the parties’ arbitration agreement
nor (absent a valid provision specifically committing such
disputes to an arbitrator) its enforceability or applicability to
the dispute is in issue.
Ibid. Where a party contests
either or both matters, “the court” must resolve the disagreement.
Ibid.
Local nonetheless interprets some of our
opinions to depart from this framework and to require arbitration
of certain disputes, particularly labor disputes, based on policy
grounds even where evidence of the parties’ agreement to arbitrate
the dispute in question is lacking. See Brief for Respondent Local,
p. 16 (citing cases emphasizing the policy favoring
arbitration generally and the “impressive policy considerations
favoring arbitration” in LMRA cases (internal quotation marks
omitted)). That is not a fair reading of the opinions, all of which
compelled arbitration of a dispute only after the Court was
persuaded that the parties’ arbitration agreement was validly
formed and that it covered the dispute in question and was legally
enforceable. See,
e.g.,
First Options,
supra, at 944–945. That
Buckeye and some of our
cases applying a presumption of arbitrability to certain disputes
do not discuss each of these requirements merely reflects the fact
that in those cases some of the requirements were so obviously
satisfied that no discussion was needed.
In
Buckeye, the formation of the
parties’ arbitration agreement was not at issue because the parties
agreed that they had “concluded” an agreement to arbitrate and
memorialized it as an arbitration clause in their loan contract.
546 U. S., at 444, n. 1. The arbitration clause’s scope was
also not at issue, because the provision expressly applied to
“ ‘[a]ny claim, dispute, or controversy … arising from or
relating to … the validity, enforceability, or scope of this
Arbitration Provision or the entire Agreement.’ ”
Id., at 442. The parties resisting arbitration (customers
who agreed to the broad arbitration clause as a condition of using
Buckeye’s loan service) claimed only that a usurious interest
provision in the loan agreement invalidated the entire contract,
including the arbitration clause, and thus precluded the Court from
relying on the clause as evidence of the parties’ consent to
arbitrate matters within its scope. See
id., at 443. In
rejecting this argument, we simply applied the requirement in §2 of
the FAA that courts treat an arbitration clause as severable from
the contract in which it appears and enforce it according to its
terms unless the party resisting arbitration specifically
challenges the enforceability of the arbitration clause itself, see
id., at 443–445 (citing 9 U. S. C. §2;
Southland
Corp. v.
Keating,
465 U. S. 1, 4–5 (1984);
Prima Paint Corp. v.
Flood & Conklin Mfg.
Co.,
388 U. S.
395, 402–404 (1967)), or claims that the agreement to arbitrate
was “[n]ever concluded,” 546 U. S., at 444, n. 1; see also
Rent-A-Center, ante, at 6–7, and n. 2.
Our cases invoking the federal “policy
favoring arbitration” of commercial and labor disputes apply the
same framework. They recognize that, except where “the parties
clearly and unmistakably provide otherwise,”
AT&T
Technologies, 475 U. S., at 649, it is “the court’s duty to
interpret the agreement and to determine whether the parties
intended to arbitrate grievances concerning” a particular matter,
id., at 651. They then discharge this duty 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. See
id., at 651–652;
Prima Paint
Corp.,
supra, at 396–398;
Gateway Coal Co.
v.
Mine Workers,
414 U. S. 368, 374–377 (1974);
Drake Bakeries Inc. v.
Bakery Workers,
370 U. S. 254, 256–257
(1962);
Atkinson v.
Sinclair Refining Co.,
370 U. S. 238,
241–242 (1962);
Steelworkers v.
Warrior & Gulf
Nav. Co.,
363 U. S. 574, 576 (1960).[
Footnote 8]
Local is thus wrong to suggest that the
presumption of arbitrability we sometimes apply takes courts
outside our settled framework for deciding arbitrability. The
presumption simply assists in resolving arbitrability disputes
within that framework. Confining the presumption to this role
reflects its foundation in “the federal policy favoring
arbitration.” As we have explained, this “policy” is merely an
acknowledgment of the FAA’s commitment to “overrule the judiciary’s
longstanding refusal to enforce agreements to arbitrate and to
place such agreements upon the same footing as other contracts.”
Volt, 489 U. S., at 478 (internal quotation marks and
citations omitted). Accordingly, we have never held that this
policy overrides the principle that a court may submit to
arbitration “only those disputes … that the parties have agreed to
submit.”
First Options, 514 U. S., at 943; see also
Mastrobuono v.
Shearson Lehman Hutton, Inc.,
514 U. S. 52, 57 (1995) (“[T]he FAA’s
proarbitration policy does not operate without regard to the wishes
of the contract parties”);
AT&T Technologies, 475 U.
S., at 650–651 (applying the same rule to the “presumption of
arbitrability for labor disputes”). Nor have we held that courts
may use policy considerations as a substitute for party agreement.
See,
e.g.,
id., at 648–651;
Volt,
supra, at 478. We have applied the presumption favoring
arbitration, in FAA and in labor cases, only where it reflects, and
derives its legitimacy from, a judicial conclusion that arbitration
of a particular dispute is what the parties intended because their
express agreement to arbitrate was validly formed and (absent a
provision clearly and validly committing such issues to an
arbitrator) is legally enforceable and best construed to encompass
the dispute. See
First Options,
supra, at 944–945
(citing
Mitsubishi, 473 U. S., at 626);
Howsam,
537 U. S., at 83–84;
AT&T Technologies,
supra, at 650 (citing
Warrior & Gulf,
supra, at 582–583);
Drake Bakeries,
supra, at 259–260. This simple framework compels reversal
of the Court of Appeals’ judgment because it requires judicial
resolution of two questions central to Local’s arbitration demand:
when the CBA was formed, and whether its arbitration clause covers
the matters Local wishes to arbitrate.
B
We begin by addressing the
grounds on which the Court of Appeals reversed the District Court’s
decision to decide the parties’ ratification-date dispute, which
the parties characterize as a formation dispute because a union
vote ratifying the CBA’s terms was necessary to form the contract.
See App. 351.[
Footnote 9] For
purposes of determining arbitrability,
when a contract is
formed can be as critical as
whether it was formed. That
is the case where, as here, the date on which an agreement was
ratified determines the date the agreement was formed, and thus
determines whether the agreement’s provisions were enforceable
during the period relevant to the parties’ dispute.[
Footnote 10]
This formation date question
requires judicial resolution here because it relates to Local’s
arbitration demand in such a way that the District Court was
required to decide the CBA’s ratification date in order to
determine whether the parties consented to arbitrate the matters
covered by the demand.[
Footnote
11] The parties agree that the CBA’s arbitration clause
pertains only to disputes that “arise under” the agreement.
Accordingly, to hold the parties’ ratification-date dispute
arbitrable, the Court of Appeals had to decide whether that dispute
could be characterized as “arising under” the CBA. In answering
this question in the affirmative, both Local and the Court of
Appeals tied the arbitrability of the ratification-date issue—which
Local raised as a defense to Granite Rock’s strike claims—to the
arbitrability of the strike claims themselves. See
id., at
347. They did so because the CBA’s arbitration clause, which
pertains only to disputes “arising under” the CBA and thus
presupposes the CBA’s existence, would seem plainly to cover a
dispute that “arises under” a specific substantive provision of the
CBA, but does not so obviously cover disputes about the CBA’s own
formation. Accordingly, the Court of Appeals relied upon the
ratification dispute’s relationship to Granite Rock’s claim that
Local breached the CBA’s no-strike clause (a claim the Court of
Appeals viewed as clearly “arising under” the CBA) to conclude that
“the arbitration clause is certainly ‘susceptible of an
interpretation’ that covers” Local’s formation-date defense. 546
F. 3d, at 1177, n. 4.
The Court of Appeals overlooked the fact that
this theory of the ratification dispute’s arbitrability fails if
the CBA was not formed at the time the unions engaged in the acts
that gave rise to Granite Rock’s strike claims. The unions began
their strike on July 6, 2004, and Granite Rock filed its suit on
July 9. If, as Local asserts, the CBA containing the parties’
arbitration clause was not ratified, and thus not formed, until
August 22, there was no CBA for the July no-strike dispute to
“arise under,” and thus no valid basis for the Court of Appeals’
conclusion that Granite Rock’s July 9 claims arose under the CBA
and were thus arbitrable along with, by extension, Local’s
formation date defense to those claims.[
Footnote 12] See
ibid. For the foregoing
reasons, resolution of the parties’ dispute about whether the CBA
was ratified in July or August was central to deciding Local’s
arbitration demand. Accordingly, the Court of Appeals erred in
holding that it was not necessary for the District Court to
determine the CBA’s ratification date in order to decide whether
the parties agreed to arbitrate Granite Rock’s no-strike claim or
the ratification-date dispute Local raised as a defense to that
claim.
Local seeks to address this flaw in the Court
of Appeals’ decision by arguing that in December 2004 the parties
executed a document that rendered the CBA effective as of May 1,
2004 (the date the prior CBA expired), and that this effective-date
language rendered the CBA’s arbitration clause (but not its
no-strike clause) applicable to the July strike period
notwithstanding Local’s view that the agreement was ratified in
August (which ratification date Local continues to argue controls
the period during which the no-strike clause applies). See Brief
for Respondent Local, pp. 26–27; Tr. of Oral Arg. 32, 37–39.
The Court of Appeals did not rule on the merits of this claim
(
i.e., it did not decide whether the CBA’s effective date
language indeed renders some or all of the agreement’s provisions
retroactively applicable to May 2004), and we need not do so
either. Even accepting Local’s assertion that it raised this
retroactivity argument in the District Court, see Brief for
Respondent Local, p. 26,[
Footnote 13] Local did not raise this argument in the
Court of Appeals. Nor, more importantly, did Local’s brief in
opposition to Granite Rock’s petition for certiorari raise the
argument as an alternative ground on which this Court could or
should affirm the Court of Appeals’ judgment finding the
ratification-date dispute arbitrable for the reasons discussed
above. Accordingly, the argument is properly “deemed waived.” This
Court’s Rule 15.2;
Carcieri v.
Salazar, 555 U. S.
___, ___ (2009) (slip op., at 15–16).[
Footnote 14]
C
Although the foregoing is
sufficient to reverse the Court of Appeals’ judgment, there is an
additional reason to do so: The dispute here, whether labeled a
formation dispute or not, falls outside the scope of the parties’
arbitration clause on grounds the presumption favoring arbitration
cannot cure. Section 20 of the CBA provides in relevant part that
“[a]ll disputes
arising under this agreement shall be
resolved in accordance with the [Grievance] procedure,” which
includes arbitration. App. 434 (emphasis added); see also
id., at 434–437. The parties’ ratification-date dispute
cannot properly be characterized as falling within the (relatively
narrow, cf.,
e.g.,
Drake Bakeries Inc., 370 U.
S., at 256–257) scope of this provision for at least two reasons.
First, we do not think the question whether the CBA was validly
ratified on July 2, 2004—a question that concerns the CBA’s very
existence—can fairly be said to “arise under” the CBA. Second, even
if the “arising under” language could in isolation be construed to
cover this dispute, Section 20’s remaining provisions all but
foreclose such a reading by describing that section’s arbitration
requirement as applicable to labor disagreements that are addressed
in the CBA and are subject to its requirement of mandatory
mediation. See App. 434–437 (requiring arbitration of disputes
“arising under” the CBA, but only after the Union and Employer have
exhausted mandatory mediation, and limiting any arbitration
decision under this provision to those “within the scope and terms
of this agreement and … specifically limited to the matter
submitted”).
The Court of Appeals’ contrary
conclusion does not find support in the text of §20. The Court of
Appeals’ only effort to grapple with that text misses the point
because it focuses on whether Granite Rock’s claim to enforce the
CBA’s
no-strike provisions could be characterized as
“arising under” the agreement. See 546 F. 3d, at 1177,
n. 4. Even assuming
that claim can be characterized
as “arising under” the CBA, it is not the issue here. The issue is
whether the formation-date defense that Local raised in response to
Granite Rock’s no-strike suit can be characterized as “arising
under” the CBA. It cannot for the reasons we have explained,
namely, the CBA provision requiring arbitration of disputes
“arising under” the CBA is not fairly read to include a dispute
about when the CBA came into existence. The Court of Appeals erred
in failing to address this question and holding instead that the
arbitration clause is “susceptible of an interpretation” that
covers Local’s formation-date defense to Granite Rock’s suit
“[b]ecause Granite Rock is suing ‘under’ the alleged new CBA” and
“[a]rbitration clauses are to be construed very broadly.”
Ibid.; see also
id., at 1178.
D
Local’s remaining argument in
support of the Court of Appeals’ judgment is similarly unavailing.
Local reiterates the Court of Appeals’ conclusion that Granite Rock
“implicitly” consented to arbitration when it sued to enforce the
CBA’s no-strike and arbitrable grievance provisions. See Brief for
Respondent Local, pp. 17–18. We do not agree that by seeking
an injunction against the strike so the parties could arbitrate the
labor grievance that gave rise to it, Granite Rock also consented
to arbitrate the ratification (formation) date dispute we address
above. See 564 F. 3d, at 1178. It is of course true that when
Granite Rock sought that injunction it viewed the CBA (and all of
its provisions) as enforceable. But Granite Rock’s decision to sue
for compliance with the CBA’s grievance procedures on
strike-related matters does not establish an agreement, “implicit”
or otherwise, to arbitrate an issue (the CBA’s formation date) that
Granite Rock did not raise, and that Granite Rock has always (and
rightly, see Part II–C,
supra) characterized as beyond the
scope of the CBA’s arbitration clause. The mere fact that Local
raised the formation date dispute as a defense to Granite Rock’s
suit does not make that dispute attributable to Granite Rock in the
waiver or estoppel sense the Court of Appeals suggested, see 546
F. 3d, at 1178, much less establish that Granite Rock agreed
to arbitrate it by suing to enforce the CBA as to other matters.
Accordingly, we hold that the parties’ dispute over the CBA’s
formation date was for the District Court, not an arbitrator, to
resolve, and remand for proceedings consistent with that
conclusion.
III
We turn now to the claims
available on remand. The parties agree that Granite Rock can bring
a breach-of-contract claim under LMRA §301(a) against Local as a
CBA signatory, and against IBT as Local’s agent or alter ego. See
Brief for Respondent IBT 10–13; Reply Brief for Petitioner 12–13
and n. 11.[
Footnote 15]
The question is whether Granite Rock may also bring a federal tort
claim under §301(a) for IBT’s alleged interference with the
CBA.[
Footnote 16] Brief for
Petitioner 32. The Court of Appeals joined virtually all other
Circuits in holding that it would not recognize such a claim under
§301(a).
Granite Rock asks us to reject
this position as inconsistent with federal labor law’s goal of
promoting industrial peace and economic stability through judicial
enforcement of CBAs, as well as with our precedents holding that a
federal common law of labor contracts is necessary to further this
goal. See
id., at 31; see also,
e.g.,
Textile
Workers v.
Lincoln Mills of Ala.,
353 U. S. 448, 451 (1957). Explaining
that IBT’s conduct in this case undermines the very core of the
bargaining relationship federal labor laws exist to protect,
Granite Rock argues that a federal common-law tort remedy for IBT’s
conduct is necessary because other potential avenues for deterring
and redressing such conduct are either unavailable or insufficient.
See Brief for Petitioner 32–33; Reply Brief for Petitioner 19–20.
On the unavailable side of the ledger Granite Rock lists state-law
tort claims, some of which this Court has held §301(a) pre-empts,
as well as administrative (unfair labor practices) claims, which
Granite Rock says the National Labor Relations Board (NLRB) cannot
entertain against international unions that (like IBT) are not part
of the certified local bargaining unit they allegedly control. On
the insufficient side of the ledger Granite Rock lists federal
common-law breach-of-contract claims, which Granite Rock says are
difficult to prove against non-CBA signatories like IBT because
international unions structure their relationships with local
unions in a way that makes agency or alter ego difficult to
establish. Based on these assessments, Granite Rock suggests that
this case presents us with the choice of either recognizing the
federal common-law tort claim Granite Rock seeks or sanctioning
conduct inconsistent with federal labor statutes and our own
precedents. See Brief for Petitioner 13–14.
We do not believe the choice is as stark as
Granite Rock implies. It is of course true that we have construed
“Section 301 [to] authoriz[e] federal courts to fashion a body of
federal law for the enforcement of collective bargaining
agreements.”
Lewis v.
Benedict Coal Corp.,
361 U. S. 459,
470 (1960) (citing
Lincoln Mills,
supra). But we
have also emphasized that in developing this common law we “did not
envision any freewheeling inquiry into what the federal courts
might find to be the most desirable rule.”
Howard Johnson
Co. v.
Hotel Employees,
417 U. S. 249, 255
(1974). The balance federal statutes strike between employer and
union relations in the collective-bargaining arena is carefully
calibrated, see,
e.g.,
NLRB v.
Drivers,
362 U. S. 274,
289–290 (1960), and as the parties’ briefs illustrate, creating a
federal common-law tort cause of action would require a host of
policy choices that could easily upset this balance, see Brief for
Respondent IBT 42–44; Reply Brief for Petitioner 22–25. It is thus
no surprise that virtually all Courts of Appeals have held that
federal courts’ authority to “create a federal common law
of
collective bargaining agreements under section 301” should be
confined to “a common law of contracts, not a source of independent
rights, let alone tort rights; for section 301 is … a grant of
jurisdiction only to enforce contracts.”
Brazinski v.
Amoco Petroleum Additives Co., 6 F. 3d 1176, 1180
(CA7 1993). We see no reason for a different result here because it
would be premature to recognize the federal common law tort Granite
Rock requests in this case even assuming that §301(a) authorizes us
to do so.
In reaching this conclusion, we emphasize that
the question before us is a narrow one. It is not whether the
conduct Granite Rock challenges is remediable, but whether we
should augment the claims already available to Granite Rock by
creating a new federal common-law cause of action under §301(a).
That we decline to do so does not mean that we approve of IBT’s
alleged actions. Granite Rock describes a course of conduct that
does indeed seem to strike at the heart of the
collective-bargaining process federal labor laws were designed to
protect. As the record in this case demonstrates, however, a new
federal tort claim is not the only possible remedy for this
conduct. Granite Rock’s allegations have prompted favorable
judgments not only from a federal jury, but also from the NLRB. In
proceedings that predated those in which the District Court entered
judgment for Granite Rock on the CBA’s formation date,[
Footnote 17] the NLRB concluded that
a “complete agreement” was reached on July 2, and that Local and
IBT violated federal labor laws by attempting to delay the CBA’s
ratification pending execution of a separate agreement favorable to
IBT. See
In re Teamsters Local 287, 347
N. L. R. B. 339, 340–341, and n. 1 (2006)
(applying the remedial order on the 2004 conduct to both Local and
IBT on the grounds that IBT did not disaffiliate from the AFL–CIO
until July 25, 2005).
These proceedings, and the proceedings that
remain to be conducted on remand, buttress our conclusion that
Granite Rock’s case for a new federal common-law cause of action is
based on assumptions about the adequacy of other avenues of relief
that are at least questionable because they have not been fully
tested in this case and thus their efficacy is simply not before us
to evaluate. Notably, Granite Rock (like IBT and the Court of
Appeals) assumes that federal common law provides the only possible
basis for the type of tort claim it wishes to pursue. See Brief for
Respondent IBT 33–34; Reply Brief for Petitioner 16. But Granite
Rock did not litigate below, and thus does not present us with
occasion to address, whether state law might provide a remedy. See,
e.g.,
Steelworkers v.
Rawson,
495 U. S. 362, 369–371
(1990);
Textron Lycoming Reciprocating Engine Div., AVCO
Corp. v.
Automobile Workers,
523 U. S. 653, 656, 658
(1998). Nor did Granite Rock fully explore the breach-of-contract
and administrative causes of action it suggests are insufficient to
remedy IBT’s conduct. For example, far from establishing that an
agency or alter ego claim against IBT would be unsuccessful, the
record in this case suggests it might be easier to prove than usual
if, as the NLRB’s decision observes, IBT and Local were affiliated
in 2004 in a way relevant to Granite Rock’s claims. See
In re
Teamsters Local 287, supra, at 340, n. 6. Similarly,
neither party has established that the Board itself could not issue
additional relief against IBT. IBT’s
amici argue that the
“overlap between Granite Rock’s §301 claim against the IBT and the
NLRB General Counsel’s unfair labor practice complaint against
Local 287 brings into play the National Labor Relations Act rule
that an international union commits an unfair labor practice by
causing its affiliated local unions to ‘impose extraneous
non-bargaining unit considerations into the collective bargaining
process.’ ” Brief for American Federation of Labor et al.
30–31 (quoting
Paperworkers Local 620, 309
N. L. R. B. 44, 44 (1992)). The fact that at least
one Court of Appeals has recognized the viability of such a claim,
see
Kobell v.
United Paperworkers Int’l Union,
965 F. 2d 1401, 1407–1409 (CA6 1992), further persuades us
that Granite Rock’s arguments do not justify recognition of a new
federal tort claim under §301(a).
* * *
We reverse the Court of Appeals’
judgment on the arbitrability of the parties’ formation-date
dispute, affirm its judgment dismissing Granite Rock’s claims
against IBT to the extent those claims depend on the creation of a
new federal common-law tort cause of action under §301(a), and
remand the case for further proceedings consistent with this
opinion.
It is so ordered.
Footnote 1
In deciding the arbitration question in this
case we rely upon the terms of the CBA and the facts in the
District Court record. In reviewing the judgment affirming
dismissal of Granite Rock’s tort claims against respondent
International Brotherhood of Teamsters (IBT) for failure to state a
claim, we rely on the facts alleged in Granite Rock’s Third Amended
Complaint. See,
e.g.,
H. J. Inc. v.
Northwestern Bell Telephone Co., 492 U. S. 229, 250
(1989).
Footnote 2
This Court has recognized a federal
common-law claim for breach of a CBA under LMRA §301(a). See,
e.g.,
Textile Workers v.
Lincoln Mills of
Ala.,
353 U. S. 448, 456 (1957).
Footnote 3
The CBA’s ratification date is important to
Granite Rock’s underlying suit for strike damages. If the District
Court correctly concluded that the CBA was ratified on July 2,
Granite Rock could argue on remand that the July work stoppage
violated the CBA’s no-strike clause.
Footnote 4
Although a union ratification vote is not
always required for the provisions in a CBA to be considered
validly formed, the parties agree that ratification was such a
predicate here. See App. 349–351.
Footnote 5
Because neither party argues that the
arbitrator should decide this question, there is no need to apply
the rule requiring “ ‘clear and unmistakable’ ” evidence
of an agreement to arbitrate arbitrability.
First Options of
Chicago, Inc. v.
Kaplan,
514 U. S. 938, 944 (1995) (quoting
AT&T Technologies, Inc. v.
Communications
Workers,
475 U. S. 643, 649 (1986) (alterations
omitted)).
Footnote 6
We, like the Court of Appeals, discuss
precedents applying the FAA because they employ the same rules of
arbitrability that govern labor cases. See,
e.g.,
AT&T Technologies,
supra, at 650. Indeed, the
rule that arbitration is strictly a matter of consent—and thus that
courts must typically decide any questions concerning the formation
or scope of an arbitration agreement before ordering parties to
comply with it—is the cornerstone of the framework the Court
announced in the
Steelworkers Trilogy for deciding
arbitrability disputes in LMRA cases. See
Steelworkers v.
American Mfg. Co.,
363 U. S. 564, 567–568
(1960);
Steelworkers v.
Warrior & Gulf Nav.
Co.,
363 U. S. 574, 582 (1960);
Steelworkers v.
Enterprise Wheel & Car Corp.,
363 U. S. 593,
597 (1960).
Footnote 7
See also
Mastrobuono v.
Shearson
Lehman Hutton, Inc.,
514 U. S. 52, 57 (1995);
Dean
Witter Reynolds Inc. v.
Byrd,
470 U. S. 213, 219–220
(1985);
Scherk v.
Alberto-Culver Co.,
417 U. S. 506, 511
(1974);
AT&T Technologies,
supra, at 648;
Warrior & Gulf,
supra, at 582;
United
States v.
Moorman,
338 U. S. 457, 462
(1950).
Footnote 8
That our labor arbitration precedents apply
this rule is hardly surprising. As noted above, see n. 6,
supra, the rule is the foundation for the arbitrability
framework this Court announced in the
Steelworkers
Trilogy. Local’s assertion that
Warrior & Gulf
suggests otherwise is misplaced. Although
Warrior &
Gulf contains language that might in isolation be misconstrued
as establishing a presumption that labor disputes are arbitrable
whenever they are not expressly excluded from an arbitration
clause, 363 U. S., at 578–582, the opinion elsewhere emphasizes
that even in LMRA cases, “courts” must construe arbitration clauses
because “a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit.”
Id., at 582
(applying this rule and finding the dispute at issue arbitrable
only after determining that the parties’ arbitration clause could
be construed under standard principles of contract interpretation
to cover it).
Our use of the same rules in FAA cases is also
unsurprising. The rules are suggested by the statute itself.
Section 2 of the FAA requires courts to enforce valid and
enforceable arbitration agreements according to their terms. And §4
provides in pertinent part that where a party invokes the
jurisdiction of a federal court over a matter that the court could
adjudicate but for the presence of an arbitration clause, “[t]he
court shall hear the parties” and “direc[t] the parties to proceed
to arbitration in accordance with the terms of the agreement”
except “[i]f the making of the arbitration agreement or the
failure, neglect, or refusal to perform the same be in issue,” in
which case “the court shall proceed summarily to the trial
thereof.” 9 U. S. C. §4.
Footnote 9
The parties’ dispute about the CBA’s
ratification date presents a formation question in the sense above,
and is therefore not on all fours with, for example, the formation
disputes we referenced in
Buckeye Check Cashing, Inc. v.
Cardegna,
546 U. S. 440, 444, n.1 (2006), which
concerned whether, not when, an agreement to arbitrate was
“concluded.” That said, the manner in which the CBA’s ratification
date relates to Local’s arbitration demand makes the
ratification-date dispute in this case one that requires judicial
resolution. See
infra, at 14–19.
Footnote 10
Our conclusions about the significance of the
CBA’s ratification date to the specific arbitrability question
before us do not disturb the general rule that parties may agree to
arbitrate past disputes or future disputes based on past
events.
Footnote 11
In reaching this conclusion we need not, and
do not, decide whether every dispute over a CBA’s ratification date
would require judicial resolution. We recognize that ratification
disputes in labor cases may often qualify as “formation disputes”
for contract law purposes because contract law defines formation as
acceptance of an offer on specified terms, and in many labor cases
ratification of a CBA is necessary to satisfy this formation
requirement. See App. 349–351. But it is not the mere labeling of a
dispute for contract law purposes that determines whether an issue
is arbitrable. The test for arbitrability remains whether the
parties consented to arbitrate the dispute in question.
Footnote 12
This analysis pertains only to the Court of
Appeals’ decision, which did not engage the 11th-hour retroactivity
argument Local raised in its merits brief in this Court, and that
we address below.
Footnote 13
This claim is questionable because Local’s
February 2005 references to the agreement “now in effect” are not
obviously equivalent to the express retroactivity argument Local
asserts in its merits brief in this Court. See Brief for Respondent
Local, pp. 26–>27.
Footnote 14
Justice Sotomayor’s conclusion that we should
nonetheless excuse Local’s waiver and consider the retroactivity
argument, see
post, at 5–6 (opinion concurring in part and
dissenting in part), is flawed. This Court’s Rule 15.2 reflects the
fact that our adversarial system assigns both sides responsibility
for framing the issues in a case. The importance of enforcing the
Rule is evident in cases where, as here, excusing a party’s
noncompliance with it would require this Court to decide, in the
first instance, a question whose resolution could affect this and
other cases in a manner that the District Court and Court of
Appeals did not have an opportunity to consider, and that the
parties’ arguments before this Court may not fully address.
Footnote 15
Although the parties concede the general
availability of such a claim against IBT, they dispute whether
Granite Rock abandoned its agency or alter ego allegations in the
course of this litigation. Compare Brief for Respondent IBT, p. 10
with Reply Brief for Petitioner 12–13, n. 11. Granite Rock concedes
that it has abandoned its claim that IBT acted as Local’s
undisclosed principal in orchestrating the ratification response to
the July 2, 2004, CBA. See Plaintiff Granite Rock’s Memorandum of
Points and Authorities in Opposition to Defendant IBT’s Motion to
Dismiss in No. 5:04–cv–02767–JW (ND Cal., Aug. 7, 2006), Doc. 178,
pp. 6, 8 (hereinafter Points and Authorities). But Granite
Rock insists that it preserved its argument that Local served as
IBT’s agent or alter ego when Local denied ratification and engaged
in unauthorized strike activity in July 2004. Nothing in the record
before us unequivocally refutes this assertion. See App. 306,
311–315, 318; Points and Authorities 6, n. 3. Accordingly,
nothing in this opinion forecloses the parties from litigating
these claims on remand.
Footnote 16
IBT argues that we should dismiss this
question as improvidently granted because Granite Rock abandoned
its tortious interference claim when it declared its intention to
seek only contractual (as opposed to punitive) damages on the
claim. See Brief for Respondent IBT 16. We reject this argument,
which confuses Granite Rock’s decision to forgo the pursuit of
punitive damages on its claim with a decision to abandon the claim
itself. The two are not synonymous, and IBT cites no authority for
the proposition that Granite Rock must allege more than economic
damages to state a claim on which relief could be granted.
Footnote 17
Although the Board and federal jury reached
different conclusions with respect to the CBA’s ratification date,
the discrepancy has little practical significance because the
Board’s remedial order against Local and IBT gives “retroactive
effect to the terms of the [CBA of] July 2, 2004, as if ratified on
that date.”
In re Teamsters Local 287, 347
N. L. R. B. 339, 340 (2006).
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