Unite Here Local 217 v. SAGE HOSPITALITY RESOURCES

United States Court of Appeals
For the First Circuit

No. 10-1667

UNITE HERE LOCAL 217,

Plaintiff, Appellee,

v.

SAGE HOSPITALITY RESOURCES,
d/b/a Renaissance Providence Hotel,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. William E. Smith, U.S. District Judge]

Before

Lipez, Circuit Judge,
Souter, Associate Justice,*
and Howard, Circuit Judge.

Norman R. Buchsbaum, with whom Louis J. Cannon, Jr., Law
Offices of Norman R. Buchsbaum, W. Mark Russo, Moshe Berman, and
Ferrucci Russo P.C. were on brief, for appellant.
Michael T. Anderson, with whom Murphy Anderson PLLC, Amato
A. DeLuca, and DeLuca & Weizenbaum Ltd. were on brief, for
appellee.

April 29, 2011

*
Hon. David H. Souter, Associate Justice (Ret.) of the Supreme
Court of the United States, sitting by designation.
 LIPEZ, Circuit Judge. Appellant Sage Hospitality

Resources ("Hotel") seeks review of a district court order

compelling it to submit to arbitration a dispute over the meaning

of ambiguous language in the duration clause of a neutrality

agreement between the Hotel and appellee UNITE HERE Local 217

("Union"). As the parties agreed to a broad arbitration clause that

unambiguously encompasses their dispute, we hold that the issue was

properly consigned to the arbitrator for resolution. We therefore

affirm.

I.

The Hotel and the Union entered into a neutrality

agreement ("Agreement") on June 9, 2003, in anticipation of the

renovation of a dilapidated structure in downtown Providence into

the Renaissance Providence Hotel. The Agreement set forth a process

allowing the Union to organize the Hotel's employees and to seek

recognition as their collective bargaining representative; in turn,

the Union would refrain from engaging in any picketing or economic

activity against the Hotel.

Three provisions of the parties' Agreement are relevant

to this case. First, the Agreement established a "card check"

procedure, by which "[t]he Union may request recognition as the

exclusive collective bargaining agent for [the Hotel's] Employees."1

1
The Agreement provides that upon the Union's request, an
arbitrator

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Second, the Agreement provided for binding arbitration of "any

dispute over [its] interpretation or application":

The parties agree that any dispute over the
interpretation or application of [the Agreement] shall be
submitted to expediated [sic] and binding arbitration
pursuant to [the] procedures below. . . . The parties
hereto agree to comply with any order of the arbitrator,
which shall be final and binding, and furthermore consent
to the entry of any order of the arbitrator as the order
of judgment of the United States District Court for the
District of Rhode Island without entry of findings of
fact and conclusions of law.

Finally, the duration clause of the Agreement stipulated that the

"Agreement shall be in full force and effect from the date it is

fully executed . . . until thirty months from the full public

opening of the hotel, or if sooner upon the Employer's recognition

of the Union." The Agreement did not define the term "full public

opening."

A dispute over the meaning of this term arose on January

5, 2010, when the Union requested recognition from the Hotel

pursuant to the card check procedure. The Hotel declined the

request, characterizing it as untimely. In the Hotel's view, the

"full public opening" occurred on June 1, 2007, when it held a

ceremony marking the "opening of the hotel doors." This event, says

will conduct a review of Employee's authorization cards
and membership information submitted by the Union in
support of its claim to represent a majority of such
Employees. If that review establishes that a majority of
such Employees has designated the Union as their
exclusive collective bargaining representative or joined
the Union, the Employer will recognize the Union as such
representative of such Employees.

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the appellant, was preceded by a "soft opening" in which it had

already begun renting out a small number of rooms and holding

events. According to the Hotel, the Agreement expired on December

1, 2009, thirty months after June 1, 2007, and it thus was no longer

obligated to participate in the card check procedure.

The Union then demanded arbitration over the meaning of

the term "full public opening," alleging that the "full public

opening" instead occurred on August 21, 2007, when the Hotel held

a ribbon-cutting and gala. The Hotel rejected the arbitration

demand, again relying on untimeliness in arguing that its obligation

to honor the arbitration clause of the Agreement expired on December

1, 2009, along with the Agreement itself.

On January 7, 2010, the Union filed in federal court a

petition to compel the Hotel to submit to arbitration. The Union

argued that the meaning of the term "full public opening" was for

the arbitrator, who should decide the threshold issue of whether the

Agreement was in effect, as well as the ultimate issue of the

results of the card check procedure. The Hotel countered that the

court should determine whether an agreement to arbitrate continued

to bind the parties. It maintained that the term "full public

opening" did not need to be construed by an arbitrator, because

either it was not an ambiguous term or it was tantamount to a "date

certain." To the extent evidence was needed to determine the date

of the full public opening and hence the duration of the Agreement,

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the Hotel argued that the court, not an arbitrator, should conduct

an evidentiary hearing.

In an Opinion and Order dated May 4, 2010 ("May 4

Order"), the district court granted the Union's petition. See UNITE

HERE Local 217 v. Sage Hospitality Res., 722 F. Supp. 2d 161, 163

(D.R.I. 2010) [hereinafter UNITE HERE I]. Relying primarily on this

court's holdings in International Brotherhood of Electrical Workers,

Local 1228 v. Freedom WLNE-TV, Inc., 760 F.2d 8 (1st Cir. 1985), and

New England Cleaning Services, Inc. v. Services Employees

International Union, Local 254, 199 F.3d 537 (1st Cir. 1999), the

district court determined, inter alia, that this case was "directly

in the path of the rule consigning termination disputes to

arbitration if the agreement includes a 'broad' arbitration clause"

and ordered the parties to arbitration. UNITE HERE I, 722 F. Supp.

2d at 168; see also id. at 165.

A week later, the Union moved to enforce the district

court's judgment. In response, the Hotel filed a motion to stay the

court's order pending appeal and, in the alternative, for

reconsideration. It assayed an argument not previously raised: that

this circuit's law on the arbitrability of termination disputes was

"implicitly overruled" by the Supreme Court's decision in Howsam v.

Dean Witter Reynolds, Inc., 537 U.S. 79 (2002), under which the

parties' dispute, the Hotel claimed, would presumptively be for a

court to decide. In an Order and Opinion dated September 24, 2010

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("September 24 Order"), the district court granted the Union's

motion to enforce the judgment and denied the Hotel's motion to

stay. See UNITE HERE Local 217 v. Sage Hospitality Res., 722 F.

Supp. 2d 169, 171 (D.R.I. 2010) [hereinafter UNITE HERE II]. The

court granted in part the Hotel's motion to reconsider by

"clarif[ying]" certain parts of its May 4 Order; however, it

declined to withdraw any part of that order.2 Id. at 177-78.

The Hotel appeals, asserting that the district court

erred in concluding that the question of what "full public opening"

means, and thus whether the Agreement was still in effect at the

time the Union demanded the card check and arbitration, is for the

arbitrator, and not the court, to resolve.3

2
We denied on October 18, 2010, the Hotel's emergency motion
for a stay of arbitration pending appeal or, in the alternative,
for a protective order.
3
The Hotel also seeks review of a determination by the
district court, set forth as "[a] second factor supporting" its May
4 Order and later "clarif[ied]" in its September 24 Order, that
"the rule allowing arbitration of disputes after a contract expires
might still secure the relief the Union seeks." UNITE HERE I, 722
F. Supp. 2d at 168; see also UNITE HERE II, 722 F. Supp. 2d at 178.
We decline to reach this issue, as we find ample support in our
caselaw for sending the parties' dispute to the arbitrator without
invoking post-expiration arbitrability.

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 II.

The central question here is whether a court or an

arbitrator should decide whether the Agreement was in effect at the

time it was invoked by the Union. The Union points out that the

resolution of that question turns on the meaning of the phrase "full

public opening" as it appears in the duration clause of the

Agreement. It contends that this is a straightforward issue of

contract interpretation, which the Agreement's arbitration clause

and relevant First Circuit law assign to the arbitrator. As its

main rejoinder, the Hotel posits that the parties' conflict

implicates a question of arbitrability under Howsam, 537 U.S. 79,

and hence is presumptively for a court to decide. To the extent our

precedents might require a different outcome, the Hotel argues, we

should declare them overruled by this subsequent Supreme Court

precedent.

We review a district court's order compelling arbitration

de novo, S. Bay Boston Mgmt. v. Unite Here, Local 26, 587 F.3d 35,

42 (1st Cir. 2009), and we are "not wedded to the lower court's

rationale, but, rather, may affirm its order on any independent

ground made manifest by the record," Kristian v. Comcast Corp., 446

F.3d 25, 31 (1st Cir. 2006) (quoting InterGen N.V. v. Grina, 344

F.3d 134, 141 (1st Cir. 2003)). In our review, we focus only on the

threshold issue of arbitrability; we do not rule on the merits of

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the underlying claims. AT&T Techs., Inc. v. Commc'ns Workers, 475

U.S. 643, 649-50 (1986).

A. The General Legal Framework: Does the Dispute Fall Within
the Scope of the Parties' Arbitration Clause?

It is axiomatic that arbitration is a creature of

contract. See United Steelworkers v. Warrior & Gulf Navigation Co.,

363 U.S. 574, 582 (1960). Where there is a validly formed and

enforceable arbitration agreement, "a court may order arbitration

of a particular dispute only where the court is satisfied that the

parties agreed to arbitrate that dispute." Granite Rock Co. v.

Int'l Bhd. of Teamsters, 130 S. Ct. 2847, 2856 (2010) (citing First

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995); AT&T

Techs., 475 U.S. at 648-49). Our focus in this inquiry is to

determine and effectuate the parties' intent, not to substitute our

own preferences. Municipality of San Juan v. Corporación para el

Fomento Económico de la Ciudad Capital, 415 F.3d 145, 151 (1st Cir.

2005).

Here, the parties' dispute concerns the interpretation of

the duration clause of the Agreement. We may only affirm the

district court's order compelling arbitration if this issue is

within the scope of the parties' arbitration clause. That clause

of the Agreement provides that "any dispute over [the Agreement's]

interpretation or application" shall be submitted to binding

arbitration. The parties did not place any limitations on that

language, and certainly did not exclude controversies relating to

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the duration or termination of the contract. A question as to the

meaning of the term "full public opening" is manifestly a "dispute

over [the Agreement's] interpretation or application." Accordingly,

by its own phraseology, the arbitration clause applies to the issue

in dispute, which was appropriately referred to the arbitrator for

resolution.

This result, grounded in the unambiguous language of the

parties' arbitration clause, also comports with our precedents.

Inquiring into the scope of similar arbitration clauses, we have

concluded that they encompass disputes over the interpretation of

duration language. In International Brotherhood of Electrical

Workers, Local 1228 v. Freedom WLNE-TV, Inc., 760 F.2d 8, for

example, we considered an arbitration clause that covered "[a]ll

problems arising out of grievances or out of the application or

interpretation of [the a]greement or the performance of any party

under it," and inferred from this broad language "the parties'

agreement to arbitrate any dispute involving construction of the

substantive provisions of the contract." Id. at 11. We thus held

that the employer was required to submit to arbitration the question

of whether its agreement with the union continued in effect beyond

its stated expiration date. Id. Likewise, in Municipality of San

Juan v. Corporación para el Fomento Económico de la Ciudad Capital,

415 F.3d 145, we declared it "manifest" that "the issue of contract

duration must be decided by the arbitrator," where the arbitration

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clause covered "any controversy aris[ing] between the parties with

regard to their responsibilities and obligations under this

contract." Id. at 150; cf. Green Tree Fin. Corp. v. Bazzle, 539

U.S. 444, 451-52 (2003) (plurality opinion) (suggesting that where

"parties agreed to submit to the arbitrator '[a]ll disputes, claims,

or controversies arising from or relating to this contract or the

relationships which result from this contract,'" a "dispute about

what the arbitration contract . . . means . . . is a dispute

'relating to this contract'" and constitutes evidence that "the

parties seem to have agreed that an arbitrator, not a judge, would

answer the relevant question").

The appellant acknowledges that the Agreement's

arbitration clause covers a broad range of matters. On appeal, the

Hotel stakes its hopes on the claim that under the Supreme Court's

decision in Howsam, 537 U.S. 79, its dispute with the Union must be

considered a question of arbitrability that is presumptively for a

court to resolve.4

4
The Hotel also raises a less serious argument that a court
should resolve the parties' dispute because the Agreement contains
a "date certain" for expiration. The Agreement's duration clause
did not set a "date certain." The parties logically made the
duration of the Agreement contingent on the hotel's "full public
opening" to accommodate unforeseen construction delays. Moreover,
the very fact that the parties each have offered plausible but
competing theories of when the hotel "opened" indicates that the
date was anything but certain. See Municipality of San Juan, 415
F.3d at 151 (rejecting the "date certain" theory on similar
grounds).

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B. The Howsam Framework: Does the Dispute Raise a Question
of Arbitrability?

In Howsam, the Court observed that "[a]lthough [it] has

. . . long recognized and enforced a 'liberal federal policy

favoring arbitration agreements,'" 537 U.S. at 83 (quoting Moses H.

Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25

(1983)), it has also carved out an exception to this policy: the

threshold "question of whether the parties have submitted a

particular dispute to arbitration, i.e., the 'question of

arbitrability,' is 'an issue for judicial determination [u]nless the

parties clearly and unmistakably provide otherwise.'" Howsam, 537

U.S. at 83 (quoting AT&T Techs., 475 U.S. at 649; First Options, 514

U.S. at 944). In other words, questions of arbitrability are

subject to a presumption against arbitration and in favor of

judicial resolution. This difference in treatment is animated by

"the principle that a party can be forced to arbitrate only those

issues it specifically has agreed to submit to arbitration" and

should not be compelled to arbitrate arbitrability unless it

committed itself to doing so. First Options, 514 U.S. at 945.

But Howsam emphasized that "question of arbitrability" is

a term of art with a narrow scope:

The Court has found the phrase applicable in the kind of
narrow circumstance where contracting parties would
likely have expected a court to have decided the gateway
matter, where they are not likely to have thought that
they had agreed that an arbitrator would do so, and,
consequently, where reference of the gateway dispute to

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 the court avoids the risk of forcing parties to arbitrate
a matter that they may well not have agreed to arbitrate.

Howsam, 537 U.S. at 83-84. Consequently, Howsam specified that only

certain "substantive" gateway matters are subject to the anti-

arbitrability presumption, id. at 85 (quoting Revised Unif.

Arbitration Act of 2000 § 6 cmt. 2, 7 U.L.A. 13 (Supp. 2002)), and

identified "two categories of disputes where [that presumption

clearly applies]: (1) disputes 'about whether the parties are bound

by a given arbitration clause'; and (2) disagreements 'about whether

an arbitration clause in a concededly binding contract applies to

a particular type of controversy,'" Kristian, 446 F.3d at 39

(quoting Howsam, 537 U.S. at 84); see also id. (clarifying that

"[e]xamples of the former include whether an arbitration contract

binds parties that did not sign the agreement[,] and whether an

arbitration agreement survived a corporate merger and bound the

subsequent corporation," and "examples of the latter include whether

a labor-management layoff controversy was covered by the arbitration

clause of a collective-bargaining agreement[,] and whether a clause

providing for arbitration of various grievances covers claims for

damages for breach of a no-strike agreement"). In contrast,

"'procedural' questions [that] grow out of the dispute and bear on

its final disposition are presumptively not for the judge, but for

an arbitrator, to decide." Howsam, 537 U.S. at 84 (quoting John

Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557 (1964))

(internal quotation mark omitted).

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 In defending against the arbitration demand, the Hotel

maintains that the dispute between it and the Union implicates a

substantive question of arbitrability and, as such, should

presumptively be for the court to decide. The contrary results

required by Freedom WLNE-TV and like cases, the Hotel insists,

demonstrate that our precedents are inconsistent with the Court's

recent caselaw and should be repudiated.5 The Union counters that

Howsam requires no reconsideration of our law; that the parties'

dispute does not fit into the types of exceptional questions Howsam

reserves presumptively for the courts; and that even if their

dispute were to be characterized as a substantive question of

arbitrability, the presumption in favor of judicial resolution would

nonetheless be overcome by the parties' clearly manifested intent

to arbitrate a dispute over the interpretation of the duration

clause of the Agreement. We agree with the Union.

The Hotel's absolutist position that contract expiration

issues are necessarily substantive questions of arbitrability proves

too much. Not all questions of contract duration are alike.6 Cf.

5
Given the Hotel's view on how significant a change to the
law was wrought by Howsam, we find it curious and telling that it
did not even mention Howsam until its May 26, 2010, reply to the
Union's motion to enforce the district court's May 4 Order.
6
The Hotel suggests without much in the way of analysis that
Granite Rock Co. v. International Brotherhood of Teamsters, 130 S.
Ct. 2847, supports its position. That case, however, dealt with
the arbitrability of a dispute over the date of contract formation,
where the contract's arbitration clause limited its coverage to
disputes that "arise under" the contract. See id. at 2855-56,
2860-61. Not only does the present dispute not involve an issue of

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Granite Rock Co., 130 S. Ct. at 2860 n.11. (emphasizing that "it is

not the mere labeling of a dispute for contract law purposes," but

"whether the parties consented to arbitrate the dispute," that

determines whether an issue is arbitrable). In this instance, the

parties dispute the meaning of language in the duration clause of

the Agreement -- a classic issue of contract construction and one

the parties clearly contemplated would be resolved by an arbitrator.

This type of grievance "concerns neither the validity of the

arbitration clause nor its applicability to the underlying dispute

between the parties." Green Tree, 539 U.S. at 452. Indeed, the

parties do not contest that the Agreement was valid, that they were

subject to its requirements, and that the substantive scope of the

arbitration clause is clear. The present dispute is therefore not

a substantive question of arbitrability but a "matter of contract

interpretation [that] should be for the arbitrator, not the courts,

to decide." Id. at 453.

In any event, even if we were to agree with the Hotel

that a duration dispute of the type at issue here could be

characterized as a question of substantive arbitrability and thus

contract formation, cf. Nat'l R.R. Passenger Corp. v. Boston & Me.
Corp., 850 F.2d 756, 762 (D.C. Cir. 1988) (distinguishing duration
disputes from formation disputes on the theory that "[w]hen there
is an issue of formation, the court cannot be sure that the party
resisting arbitration ever viewed the arbitrator as competent to
resolve any dispute"), the arbitration clause here is broader than
the one at issue in Granite Rock. It covers not just disputes that
"arise under" the Agreement but instead "any dispute over [the
Agreement's] interpretation or application."

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presumptively reserved for judicial determination, the presumption

would be overcome by the clear and unmistakable intent of the

parties to arbitrate controversies such as the one raised here. See

First Options, 514 U.S. at 943. The breadth of the arbitration

clause, which covers "any disputes over [the] interpretation or

application" of the Agreement, presents an insurmountable impediment

to the Hotel's position.

III.

The parties to this grievance negotiated a broad

arbitration clause memorializing their intention to arbitrate all

questions of contract construction. Whether categorized as an issue

of substantive arbitrability or not, the instant dispute over the

meaning of language in the duration clause is one that the parties

clearly anticipated would be resolved by an arbitrator, not a court.

See Howsam, 537 U.S. at 83. In these circumstances, we must enforce

the bargain the parties struck and allow the arbitrator to decide

the issues they committed to her resolution. The district court's

order compelling arbitration is, accordingly, affirmed. Costs are

awarded to the Union.

So ordered.

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