USCA1 Opinion
United States Court of Appeals
For the First Circuit
____________________
No. 95-1794
NORTH ADAMS REGIONAL HOSPITAL,
Plaintiff, Appellee,
v.
MASSACHUSETTS NURSES ASSOCIATION,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge] ___________________
____________________
Before
Selya, Boudin, and Lynch, Circuit Judges. ______________
____________________
Fernand J. Dupere, Jr. for appellee. ______________________
Alan J. McDonald, with whom Jack J. Canzoneri and McDonald & _________________ ___________________ __________
Associates were on brief, for appellant. __________
____________________
January 24, 1996
____________________
LYNCH, Circuit Judge. When the North Adams LYNCH, Circuit Judge. ______________
Regional Hospital was required by an arbitrator, as a matter
of contract interpretation, to hire an individual as an
Emergency Room nurse whom the Hospital considered to be
unqualified, the Hospital challenged the arbitrator's award
in federal court. The reviewing court found against the
Hospital on the merits, but also found the Hospital's suit
was not "frivolous, unreasonable, or without foundation," nor
was the suit "simply a delaying tactic." Accordingly, the
court denied the motion for attorneys' fees made by the
Massachusetts Nurses Association. MNA has appealed, claiming
the decision not to award fees was an abuse of discretion.
As it clearly was not, we reject the appeal and affirm.
To state the facts briefly: In 1993 the Hospital
attempted to hire for a core Emergency Room nurse position an
external candidate who was better qualified than any internal
candidate. MNA grieved and the arbitrator held that where a
"qualified" internal candidate was available, the internal
candidate must be hired regardless of the better
qualifications of the external candidate. The crux, for this
appeal, was in the arbitrator's finding that the internal
candidate was at least "minimally qualified" although the
candidate lacked certification in Advanced Cardiac Life
Support ("ACLS"), a skill the Hospital, not unreasonably,
desired. The arbitrator appeared to base this finding on the
testimony of one witness, whom the Hospital argued had said
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no such thing. The parties have represented to us that there
was no transcript of the arbitration proceedings.
The Hospital filed suit in the U.S. District Court
challenging the award. Its essential argument was that the
award was based on a "non-fact" and was in violation of
public policy. But for the gross factual error made by the
arbitrator as to whether the internal candidate was
qualified, said the Hospital, the outcome would have been
different. The Hospital argued that while lack of ACLS
qualifications might be tolerable among non-core staff, it
was unacceptable for a core-staff nurse -- who would be for
some periods the person with primary responsibility for
Emergency Room trauma and other cases -- not to be qualified
in advanced cardiac life support techniques. The Hospital
argued that the increased risk to the health and safety of
Emergency Room patients should lead to invalidation of the
arbitrator's award on public policy grounds. Faced with the
deference given by law to arbitral awards and the lack of a
transcript, the district court rejected the challenge on the
merits. The Hospital has not appealed.
Nevertheless, MNA has appealed, claiming that the
district court was plainly wrong in not awarding it its
attorneys' fees and costs arising out of the Hospital's
challenge to the award. MNA argues that United Paperworkers ___________________
Int'l Union v. Misco, Inc., 484 U.S. 29 (1987), so foreclosed ___________ ___________
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the Hospital's challenge as to render the challenge
"unreasonable and without foundation" and the district
court's finding to the contrary to be an abuse of discretion.
MNA's position both misreads Misco and the decisions of this _____
court.
This court has repeatedly held that an arbitral
award may be challenged on a showing that the award was
"mistakenly based on a crucial assumption that is concededly
a non-fact." Advest, Inc. v. McCarthy, 914 F.2d 6, 8-9 (1st ________ ____________ ________
Cir. 1990) (emphasis added); see also Local 1445, United Food ___ ____ _______________________
and Commercial Workers Int'l Union v. Stop & Shop Cos., Inc., __________________________________ ______________________
776 F.2d 19, 21 (1st Cir. 1985); Trustees of Boston Univ. v. _________________________
Boston Univ. Chapter, Am. Ass'n of Univ. Professors, 746 F.2d ___________________________________________________
924, 926 (1st Cir. 1984); Bettencourt v. Boston Edison Co., ___________ _________________
560 F.2d 1045, 1050 (1st Cir. 1977). The somewhat awkward
phrasing "non-fact" refers to a situation "where the central
fact underlying an arbitrator's decision is concededly
erroneous," Electronics Corp. of Am. v. International Union _________________________ ___________________
of Electrical Workers, Local 272, 492 F.2d 1255, 1256 (1st __________________________________
Cir. 1974), that is, where "there was a gross mistake . . .
made out by the evidence, but for which, according to the
arbitrator's rationale, a different result would have been
reached." Id. at 1257 (internal quotation omitted). ___
Prudential-Bache Sec., Inc. v. Tanner, No. 95-1590, slip op. ___________________________ ______
at 6-7 (1st Cir. Dec. 29, 1995), recently reaffirmed the
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principle. The Hospital's challenge to a "non-fact" was a
recognized ground to attack an arbitral award.
MNA's argument that in any event the Hospital was
foreclosed from mounting a public policy argument under Misco _____
is also without merit. Because the Hospital did not cite to
a specific statute or case to support its precise public
policy argument, the argument must be deemed frivolous, the
MNA says. There are three responses.
First, while Misco did discourage public policy _____
challenges to an arbitrator's award based on "'general
considerations of supposed public interests,'" 484 U.S. at 43
(quoting W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, ________________ ______________
766 (1983)), it reaffirmed that such a challenge could be
mounted by "ascertaining" a "well-defined and dominant"
policy "'by reference to the laws and legal precedents.'"
484 U.S. at 43 (quoting W.R. Grace, 461 U.S. at 766). Whether __________
such a policy may be ascertained by reference to laws and
legal precedents is ultimately an issue for the courts to ______
decide on a challenge to an arbitral award. See Misco, 484 ___ _____
U.S. at 43. Other courts have recognized that a public
policy challenge may be based not directly on a specific rule
or regulation, but on the stated purpose behind such statute
or regulation. See Exxon Shipping Co. v. Exxon Seamen's ___ ___________________ _______________
Union, 993 F.2d 357, 364 (3d Cir. 1993). It was at least _____
arguable that there is a public policy in Massachusetts to
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protect patients by requiring nurses to be qualified, a
policy established by the Massachusetts regulations defining
the general responsibilities of a registered nurse. See ___
Brigham & Women's Hosp. v. Massachusetts Nurses Ass'n, 684 F. _______________________ _____________ ____________
Supp. 1120, 1125 (D. Mass. 1988). We need not and do not
decide whether such a policy exists, but recognize that the
existence of the argument supports the district court's
finding that the making of the argument did not justify an
award of attorneys' fees.
Second, MNA's argument, whether meant as such or
not, comes perilously close to inappropriately asking the
court to evaluate the competency of the presentation of the
argument, rather than the merits of the argument itself, for
the purposes of imposition of attorneys' fees. Cf. ___
Christiansburg Garment Co. v. Equal Employment Opportunity ___________________________ _____________________________
Comm'n, 434 U.S. 412, 422 (1978) (attorneys' fees should not ______
be awarded simply because, in hindsight, the claim appears __ _________
unreasonable). The interests served by the attorneys' fees
award rules are vastly different from those served by the law
governing attorney competence, in its various manifestations.
Cf. id. (in deciding whether successful Title VII defendant ___ ___
can recover attorneys' fees, court considers interests to be
served by doctrine). Further, while it is true that claims
may be dismissed, and the consequences visited on the client
for the conduct of counsel, see Link v. Wabash R.R. Co., 370 ___ ____ _______________
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U.S. 626, 633 (1962), the loss of one's own claims is
different in kind from being penalized for bringing those
claims in the first place.
Third, MNA's argument does not serve the purposes
of the award of attorneys' fees doctrine, which carves out an
exception to the usual "American Rule". Cf. Christiansburg, ___ ______________
434 U.S. at 422 (under the "American Rule" litigants
generally pay their own costs). If a public policy challenge
to an arbitral award proves ultimately to be weak, the
challenge will lose on the merits. That the challenge fails
is not by itself a reason to penalize the party making the
challenge. Such a rule would subvert the public interest in
allowing public policy challenges at all to arbitral awards.
The evaluation of whether such a claim was
frivolous at the outset, or when continued, is initially
committed to the district court. Our review is for abuse of
discretion and MNA has not come close to showing an abuse.
Cf. Local 285, Service Employees Int'l Union v. Nonotuck ___ ___________________________________________ ________
Resource Assoc., Inc., 64 F.3d 735, 738-39 (1st Cir. 1995) _____________________
(finding no abuse of discretion in the refusal to award fees
in an argument presented by the employer which was weak but
arguable; and an abuse of discretion in the refusal to award
fees where the employer presented a type of procedural
argument clearly foreclosed by a long line of precedent).
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The decision of the district court is affirmed. ________
Costs to the Hospital. _____________________
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