FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SEIU LOCAL 121RN, No. 19-55185
Plaintiff-Appellee,
D.C. No.
v. 2:18-cv-03928-
SVW-RAO
LOS ROBLES REGIONAL MEDICAL
CENTER, DBA Los Robles Hospital
and Medical Center, OPINION
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued and Submitted March 31, 2020
Pasadena, California
Filed September 18, 2020
Before: Consuelo M. Callahan, Kenneth K. Lee, and
Lawrence VanDyke, Circuit Judges.
Opinion by Judge VanDyke;
Dissent by Judge Lee
2 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
SUMMARY *
Arbitration
The panel (1) reversed the district court’s order on a
motion to compel arbitration of a grievance in which SEIU
Local 121RN, who represented registered nurses working at
Los Robles Regional Medical Center, asserted that the
Hospital placed certain types of patients with nurses who did
not have the appropriate training for those patients and that
the Hospital was violating nurse-to-patient ratios established
by state law; and (2) remanded for further proceedings.
In First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938
(1995), the Supreme Court established that a court, not the
arbitrator, must make the determination whether the
arbitrability of an issue is itself arbitrable when the relevant
agreement is silent on that question. In United Bhd. Of
Carpenters & Joiners of Am., Local No. 1780 v. Desert
Palace, Inc., 94 F.3d 1308 (9th Cir. 1996), this court stated
that labor cases are different, and in those cases, an arbitrator
should decide arbitrability as long as the agreement includes
a broad arbitration clause. Desert Palace distinguished
collective bargaining disputes (at issue in Desert Palace)
from commercial arbitration disputes (at issue in First
Options) on policy grounds, and thus opted not to apply First
Options.
Applying Desert Palace, the district court found that the
arbitration provision in the parties’ collective bargaining
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 3
agreement was broad enough to authorize the arbitrator—
rather than the court—to determine whether the grievance
was arbitrable and therefore granted SEIU’s motion to
compel arbitration without reaching the question of whether
the grievance was in fact arbitrable.
The panel held that the rationale in Desert Palace, Inc. is
“clearly irreconcilable with the reasoning or theory of
intervening higher authority” set forth in Granite Rock Co.
v. Int’l Bhd. Of Teamsters, 561 U.S. 287 (2010), which
expressly rejected the notion that labor arbitration disputes
should be analyzed differently than commercial arbitration
disputes. The panel concluded that it was therefore not
bound by Desert Palace. Absent clear and unmistakable
evidence of the parties’ intent to have an arbitrator—rather
than the court—decide whether SEIU’s grievance is
arbitrable, the panel held that the district court is responsible
for deciding that issue. The panel remanded for further
proceedings.
Dissenting, Judge Lee agreed with much of the
majority’s analysis, but was not convinced that Granite Rock
has effectively overruled Desert Palace because they
address two related—but distinct—issues. Therefore,
Desert Palace should still stand.
COUNSEL
Stefan H. Black (argued), Ford Harrison LLP, Los Angeles,
California, for Defendant-Appellant.
Jason Wojciechowski (argued) and Ira L. Gottlieb, Bush
Gottlieb, Glendale, California, for Plaintiff-Appellee.
4 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
OPINION
VANDYKE, Circuit Judge:
This case presents the question of whether the
arbitrability of an issue is itself arbitrable, where the relevant
agreement includes a broad arbitration clause but is
otherwise silent on the question. Over a quarter-century ago,
the Supreme Court established that a court must make that
determination when the agreement does not specifically
address the “who” question. See First Options of Chicago,
Inc. v. Kaplan, 514 U.S. 938, 944–45 (1995). That
instruction notwithstanding, this court subsequently stated
that labor cases are different, and in those cases, an arbitrator
should decide arbitrability as long as the agreement includes
a broad arbitration clause. See United Bhd. of Carpenters &
Joiners of Am., Local No. 1780 v. Desert Palace, Inc.,
94 F.3d 1308, 1309 (9th Cir. 1996). The Desert Palace court
reached its conclusion by distinguishing collective
bargaining 1 disputes (at issue in Desert Palace) from
commercial arbitration disputes (at issue in First Options) on
policy grounds, and thus opted not to apply First Options.
Id. at 1310–12.
After Desert Palace, the Supreme Court expressly
rejected the notion that labor arbitration disputes should be
analyzed differently than commercial arbitration disputes.
See Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S.
287, 300–01 (2010). The Court disagreed that “courts may
use policy considerations as a substitute for party
agreement.” Id. at 303. Since then, our court has not
meaningfully considered whether Desert Palace’s rationale
1
This opinion refers to “collective bargaining” and “labor”
arbitration interchangeably.
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 5
holds after Granite Rock. We do so now. Because the
rationale in Desert Palace is “clearly irreconcilable with the
reasoning or theory of intervening higher authority” (i.e.,
Granite Rock), we are not bound by Desert Palace. Miller
v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc). We
therefore reverse and remand for further proceedings.
I.
Los Robles Regional Medical Center (the “Hospital”)
entered into a collective bargaining agreement (“CBA”) with
SEIU Local 121RN (“SEIU”), who represented registered
nurses working at the Hospital. The CBA established the
terms and conditions of employment for these nurses and
was effective from September 16, 2014 through September
15, 2017, subject to certain renewal provisions. Article 38
of the CBA provided for a three-step procedure to address
grievances, with the final step resulting in arbitration. A
“grievance” subject to Article 38 was defined as “a dispute
or disagreement involving the interpretation, application or
compliance with specific provisions of this Agreement
(including Article and Section) or a dispute or disagreement
concerning whether or not discipline including discharge
was for just cause.” But an arbitrator was not allowed to
“add to or subtract from or to modify the terms of [the CBA]
or to arbitrate any matter after [the CBA] has expired[,] other
than matters which arose prior to the time of the expiration
of [the CBA], or to hear any dispute on any claim that has
been asserted in state or federal court or other governmental
adjudicatory forum.” Other articles of the CBA exempted
certain disputes from the grievance procedures, including
health and safety issues under Article 22 and certain staffing
and workload issues under Article 25.
On September 7, 2017, SEIU filed a grievance asserting
that the Hospital placed certain types of patients with nurses
6 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
who did not have the appropriate training to care for those
patients. The grievance also accused the Hospital of
violating nurse-to-patient ratios established by state law.
SEIU claimed that these practices violated Articles 22
(“Safety”), 39 (“Job Descriptions”), and 64 (“In-Service
Education”) of the CBA, along with other provisions of the
CBA and state and federal laws. The Hospital and SEIU
were unable to resolve the grievance among themselves, so
SEIU notified the Hospital on November 13, 2017 that it was
pursuing arbitration. The Hospital responded that the
grievance appeared to be a staffing issue covered under
Article 25 of the CBA and thus was not arbitrable. After a
series of further communications between the parties
regarding the arbitrability issue, the Hospital sent an email
“confirm[ing] we continue to disagree that this matter is
substantively arbitrable AND disagree that an arbitrator has
the authority to decide that issue.”
SEIU filed a complaint in the district court on May 10,
2018 and subsequently filed a motion to compel arbitration,
which the district court granted on January 15, 2019. The
court identified two main questions raised by the motion—
first, whether the parties were bound by the arbitration
provision in the CBA, and second, whether the grievance fell
within the scope of that provision. Acknowledging no
argument to the contrary, the district court determined that
the parties were bound by the arbitration provision, and thus
it needed to address only the second question. But as part of
that second inquiry, the district court explained that it had to
first determine whether the arbitration provision gave an
arbitrator—rather than the court—the authority to decide its
own jurisdiction (i.e., to decide if the grievance was subject
to the arbitration provision).
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 7
The district court engaged in a thorough analysis of
Supreme Court and Ninth Circuit precedent on the issue and,
although it “believe[d] that the Ninth Circuit’s reasoning [in
Desert Palace] no longer controls in light of more recent
Supreme Court decisions,” the district court concluded that
it could not overrule Desert Palace. Applying Desert
Palace, the district court found that the arbitration provision
in the CBA was broad enough to authorize the arbitrator—
rather than the court—to determine whether the grievance
was arbitrable and therefore granted SEIU’s motion to
compel arbitration without reaching the question of whether
the grievance was in fact arbitrable. The Hospital filed a
timely notice of appeal. We have jurisdiction under
28 U.S.C. § 1291.
II.
We review de novo the district court’s decision to
compel arbitration. Bushley v. Credit Suisse First Boston,
360 F.3d 1149, 1152 (9th Cir. 2004); Chiron Corp. v. Ortho
Diagnostic Sys., 207 F.3d 1126, 1130 (9th Cir. 2000).
This case implicates three types of disputes: (1) the
“Merits Question”—a dispute between the parties regarding
the merits of an issue (e.g., whether the Hospital’s conduct,
as set out in the grievance, violates the CBA); (2) the
“Arbitrability Question”—a dispute regarding whether the
parties agreed to arbitrate the Merits Question (e.g., whether
the arbitration provision in the CBA requires the Hospital
and SEIU to arbitrate the grievance); and (3) the “Delegation
Question”—a dispute regarding whether an arbitrator or a
court is tasked with deciding the Arbitrability Question. 2
2
The concept of classifying the “Merits Question,” the
“Arbitrability Question,” and the “Delegation Question” originated from
8 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
Resolution of the main issue in this appeal—the Delegation
Question—largely depends on the interplay of three
different cases: the Supreme Court’s decision in First
Options, the Ninth Circuit’s subsequent decision in Desert
Palace, and the Supreme Court’s even later decision in
Granite Rock. We will briefly describe each in turn.
In First Options, the Supreme Court considered whether,
under the Federal Arbitration Act, the arbitrator or a court
“has the primary power to decide arbitrability”—i.e., the
Delegation Question. 514 U.S. at 940, 943. The Court
reasoned that “[j]ust as the arbitrability of the merits of a
dispute [i.e., the Arbitrability Question] depends upon
whether the parties agreed to arbitrate that dispute, so the
[Delegation Question] … turns upon what the parties agreed
about that matter.” Id. at 943 (internal citations omitted).
This is because “arbitration is simply a matter of contract
between the parties; it is a way to resolve those disputes—
but only those disputes—that the parties have agreed to
submit to arbitration.” Id.
The Court in First Options explained that, when
answering the Delegation Question, courts “should not
assume that the parties agreed to arbitrate arbitrability unless
there is clear and unmistakable evidence that they did so.”
Id. at 944 (emphasis added) (internal citations, quotation
marks, and alteration marks omitted). In fact, the
Judge Ikuta’s dissent in ASARCO LLC v. United Steel, Paper & Forestry,
Rubber, Manufacturing, Energy, Allied Industrial & Service Workers
International Union. 910 F.3d 485, 496–97 (9th Cir. 2018) (Ikuta, J.,
dissenting). The “Delegation Question” received its name “[b]ecause
this third species of dispute raises the question whether the parties
delegated the arbitrability decision to the arbitrator.” Id. at 497
(emphasis added). Because these labels aid in differentiating between
the types of disputes at issue, we adopt the use of them here.
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 9
presumption in favor of arbitration, which applies when a
valid arbitration agreement is silent or ambiguous as to the
arbitrability of a particular dispute, does not apply to “silence
or ambiguity” with respect to the Delegation Question. Id.
at 944–45. Instead, “the law reverses the presumption.” Id.
at 945. The Court noted that this difference in presumptions
follows from the fact that the Delegation Question is “rather
arcane” and might not be a focus of negotiation and, thus,
courts should not “force unwilling parties to arbitrate a
matter they reasonably would have thought a judge, not an
arbitrator, would decide.” Id. The Court ultimately
concluded that the court was presumptively the appropriate
entity to review the question of arbitrability because the
parties “did not clearly agree to submit the question of
arbitrability to arbitration.” Id. at 947.
Just one year later, the Ninth Circuit considered the
Delegation Question in the context of a collective bargaining
agreement between a union and an employer. Desert
Palace, 94 F.3d at 1309. The Desert Palace court initially
acknowledged that courts, not arbitrators, should determine
the arbitrability of an issue unless “the parties clearly and
unmistakably provide otherwise.” Id. at 1310 (citation
omitted). But it went on to cite a series of pre-First Options
decisions from this circuit for the proposition that construing
a broad arbitration clause as conferring authority on the
arbitrator to decide arbitrability “is an act of legitimate
contract interpretation.” Id. (citation and quotation marks
omitted). The court therefore concluded that the broad
arbitration clause at issue in Desert Palace, which covered
matters of interpretation and application of the agreement
and did not explicitly exclude arbitrability or jurisdictional
issues, evinced the parties’ agreement to have an arbitrator
decide arbitrability. Id.
10 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
The Desert Palace court asserted that its “conclusion
[wa]s not affected by the Supreme Court’s recent decision in
First Options” because the policy concerns and other
considerations driving the analysis in First Options were
specific to the commercial arbitration context and did not
apply to the collective bargaining context at issue in Desert
Palace. Id. at 1310–11 (“These policy concerns [described
in First Options], however, do not come into play in the
collective bargaining context” and “unlike parties in the
commercial arbitration context, parties entering into a
collective bargaining agreement know they are granting the
arbitrator tremendous power ….” (emphases added)). 3
Relying on the policy differences between commercial and
labor arbitration, the Desert Palace court determined that
First Options did not specifically speak to “whether a broad
arbitration clause in a collective bargaining agreement
grants the arbitrator the power to decide his or her own
jurisdiction” and thus “decline[d] to extend First Options to
the collective bargaining context.” Id. at 1311 (emphasis
added).
Nearly fifteen years later, the Supreme Court in Granite
Rock discussed arbitration in both the commercial and labor
contexts when it “reemphasize[d] the proper framework for
deciding when disputes are arbitrable under [its]
precedents.” 561 U.S. at 297. Granite Rock involved a
dispute between an employer and a union regarding when
their collective bargaining agreement was ratified and
whether the court or an arbitrator had the authority to resolve
that dispute. Id. at 291–92. The Court began by explaining
3
See also Desert Palace, 94 F.3d at 1312 (opining that the Supreme
Court’s observation in First Options that “there is no strong federal
policy favoring arbitration of commercial disputes, does not apply in the
collective bargaining context”).
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 11
that the Delegation Question presumption applies in both the
commercial and labor contexts: “It 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 (citations,
quotation marks, and alteration marks omitted). It
emphasized—repeatedly—that the analysis for determining
whether a dispute is arbitrable in the labor context is the
exact same analysis applied in the commercial context. See
id. at 301 (explaining “[o]ur cases invoking the federal
policy favoring arbitration of commercial and labor disputes
apply the same framework” (emphasis added) (quotation
marks omitted)). 4
The Court explicitly rejected the argument that its
precedents required that labor disputes be arbitrated “based
on policy grounds even where evidence of the parties’
agreement to arbitrate the dispute in question [was] lacking.”
Id. at 300. The Court responded: “we have never held that
this policy [favoring arbitration] overrides the principle that
a court may submit to arbitration only those disputes that the
parties have agreed to submit. Nor have we held that courts
may use policy considerations as a substitute for party
agreement.” Id. at 302–03 (emphasis added) (internal
citations, quotation marks, and alteration marks omitted).
4
See also Granite Rock, 561 U.S. at 302–03 (citing a commercial
arbitration case for the assertion that “[t]he FAA’s proarbitration policy
does not operate without regard to the wishes of the contracting parties”
and, in the same string cite, citing a labor case as “applying the same rule
to the presumption of arbitrability for labor disputes” (emphases added)
(internal citations and quotation marks omitted)); id. at 303 (“We have
applied the presumption favoring arbitration, in FAA and in labor cases,
only where it reflects … that arbitration of a particular dispute is what
the parties intended ….” (emphases added)).
12 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
The Supreme Court’s emphasis in Granite Rock on
applying the same arbitrability framework to both
commercial and labor disputes—combined with its
conclusion that the policy favoring arbitration of labor
disputes cannot substitute for party agreement—is clearly
irreconcilable with the reasons that this court in Desert
Palace relied on to distinguish First Options. SEIU
contends, however, that Granite Rock answered a
completely different question than the question addressed in
Desert Palace (i.e., the Delegation Question). The Court in
Granite Rock specifically did not reach the Delegation
Question, argues SEIU, based on a footnote stating that
“[b]ecause neither party argues that the arbitrator should
decide [whether the ratification dispute is arbitrable], there
is no need to apply the rule requiring ‘clear and
unmistakable’ evidence of an agreement to arbitrate
arbitrability.” Granite Rock, 561 U.S. at 297 n.5 (quoting
First Options, 514 U.S. at 944). To that end, SEIU asserts
that Desert Palace is not inconsistent with Granite Rock.
But SEIU misses the problem that Granite Rock creates
for Desert Palace. “[T]he issues decided by the higher court
need not be identical in order to be controlling” over a prior
circuit decision; rather, the Supreme Court “must have
undercut the theory or reasoning underlying the prior circuit
precedent in such a way that the cases are clearly
irreconcilable.” Miller, 335 F.3d at 900 (emphases added).
Even though Granite Rock dealt with a formation-related
Arbitrability Question and Desert Palace dealt with a
Delegation Question, these questions ultimately derive from
the same inquiry—what did the parties agree to have the
arbitrator decide? 5 Because of this shared genesis, the
5
Compare Granite Rock, 561 U.S. at 297, 299 (explaining, in
response to the Arbitrability Question, that a dispute should be decided
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 13
Supreme Court in Granite Rock and the Ninth Circuit in
Desert Palace unsurprisingly identified the same initial step
for their analyses. The Court in Granite Rock explained that:
[Our precedents] recognize that, except
where the parties clearly and unmistakably
provide otherwise, it is the court’s duty to
interpret the agreement and to determine
whether the parties intended to arbitrate
grievances concerning a particular matter.
561 U.S. at 301 (emphasis added) (internal citations and
quotation marks omitted). The Desert Palace court likewise
asserted that:
Generally, the question of whether a dispute
is arbitrable is decided by the courts.
However, where the parties clearly and
unmistakably provide otherwise, the courts
will be divested of their authority and an
arbitrator will decide in the first instance
whether a dispute is arbitrable.
94 F.3d at 1310 (emphasis added) (internal citations and
quotation marks omitted). But what precedents was the
by an arbitrator “only where the court is satisfied that the parties agreed
to arbitrate that dispute” because “[a]rbitration is strictly a matter of
consent, and thus is a way to resolve those disputes—but only those
disputes—that the parties have agreed to submit to arbitration” (internal
citations and quotation marks omitted)), with First Options, 514 U.S.
at 943 (“Just as the arbitrability of the merits of a dispute depends upon
whether the parties agreed to arbitrate that dispute, so the question ‘who
has the primary power to decide arbitrability’ [i.e., the Delegation
Question] turns upon what the parties agreed about that matter.” (internal
citations omitted)).
14 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
Supreme Court referring to in Granite Rock in its statement
quoted above? The Court tells us: “[o]ur cases [involving]
… commercial and labor disputes.” Granite Rock, 561 U.S.
at 301 (emphasis added). Because the Court interpreted both
its commercial and labor arbitration cases as requiring the
same framework to determine whether a dispute is
arbitrable, and the initial step of such framework is the same
standard as that applied to Delegation Questions, it follows
that a Delegation Question must be analyzed the same way
in both commercial and labor contexts. That is not what
Desert Palace said. Indeed, Desert Palace reached the
opposite conclusion, distinguishing First Options on the
basis that the “policy concerns” underlying the Supreme
Court’s decision in First Options “do not come into play in
the collective bargaining context.” Desert Palace, 94 F.3d
at 1311. Granite Rock forcefully (and repeatedly) put the lie
to any such difference. 6
6
The dissent’s conclusion that, although Desert Palace is wrong, it
isn’t necessarily irreconcilable with Granite Rock, relies on essentially
the same argument made by SEIU—that Desert Palace and Granite
Rock are reconcilable because the former dealt with the Delegation
Question and the latter dealt with the Arbitrability Question. The dissent
elaborates that, although the Supreme Court in Granite Rock applied the
same arbitration framework with respect to both commercial and labor
disputes, the “arbitration framework” at issue was only in the context of
Arbitrability Questions. Relying on certain text in Granite Rock, the
dissent asserts that the Court “appeared to implicitly recognize that this
[uniform framework in commercial and labor cases] does not necessarily
implicate the Delegation Question.”
As an initial matter, the dissent’s conclusion that the Supreme
Court’s broad statements made in the context of Arbitrability Questions
do not “necessarily implicate” Delegation Questions ignores that a
Delegation Question is, really, just a very specific type of Arbitrability
Question. The Arbitrability Question asks whether the parties agreed to
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 15
have an arbitrator decide “a particular matter.” Granite Rock, 561 U.S.
at 301. The Delegation Question asks whether the parties agreed to have
an arbitrator decide the specific matter of arbitrability. Given this close
relationship between the two questions, if the Supreme Court has
generally declared—as it has in Granite Rock—that commercial and
labor disputes are subject to the same analysis in the context of
Arbitrability Questions, then presumably such a declaration applies to
Delegation Questions.
Indeed, we don’t actually need to presume that the two related
questions share the same starting point for the “who decides” issue—the
Supreme Court, as far back as First Options, made clear they do when it
said: “Just as the arbitrability of the merits of a dispute depends upon
whether the parties agreed to arbitrate that dispute, so the question ‘who
has the primary power to decide arbitrability’ turns upon what the parties
agreed about that matter.” 514 U.S. at 943 (first emphasis added and
citation omitted). The only difference between the two questions is that,
unlike the Arbitrability Question, for the Delegation Question, courts
apply both a presumption and a heightened evidentiary requirement
against arbitrability. Id. at 944–45 (for the Delegation Question, courts
“reverse[] the presumption” and require “clear and unmistakable
evidence” of the parties’ intent to arbitrate (citation, quotation marks,
and alteration marks omitted)). Since Delegation Questions are
generally treated similarly to Arbitrability Questions—except
arbitrability is harder to establish for Delegation Questions—the
dissent’s speculation that the Granite Rock Court may have intended to
implicitly cordon off what our court has subsequently labeled
“Delegation Questions” from the Court’s discussion about arbitrability
seems a stretch. Why would the Granite Rock Court’s emphasis that
labor policy concerns cannot substitute for evidence of party agreement
not apply a fortiori to the subset of Arbitrability Questions that we have
labeled Delegation Questions?
Lastly, the dissent’s rationale—that the Granite Rock Court might
have carved out the Delegation Question from its broad statement that
labor and commercial cases should be treated no differently—is belied
by the context of the very Granite Rock text the dissent references. The
full text from Granite Rock that the dissent quotes from reads: “Our cases
invoking the federal ‘policy favoring arbitration’ of commercial and
labor disputes apply the same framework. They recognize that, except
16 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
The footnote addressing the Delegation Question in
Granite Rock further undermines SEIU’s attempt to distance
that case. That footnote reinforces that “clear and
unmistakable” evidence would be required to authorize an
arbitrator to decide if a dispute is arbitrable, even in the
collective bargaining context at issue in Granite Rock. See
Granite Rock, 561 U.S. at 297 n.5. Importantly, the source
cited for this proposition is none other than First Options.
Id. This citation indicates the Court’s view that First
Options, despite involving a commercial dispute, applies in
the collective bargaining context. Again, this logic cannot
be reconciled with this court’s attempt in Desert Palace to
differentiate a labor dispute from the commercial dispute in
First Options.
SEIU separately contends that Desert Palace is
distinguishable from First Options because the two courts
faced different types of “silence or ambiguity” with respect
to the Delegation Question. The “silence or ambiguity” at
issue in First Options arose from the fact that the parties
were not governed by the language in an arbitration clause—
instead, the party seeking arbitration argued that the resisting
party agreed to arbitrate by filing objections at the arbitration
proceedings. First Options, 514 U.S. at 941, 945–46. The
parties in Desert Palace, by contrast, were governed by an
where ‘the parties clearly and unmistakably provide otherwise,’ it is ‘the
court’s duty to interpret the agreement and to determine whether the
parties intended to arbitrate grievances concerning’ a particular matter.”
561 U.S. at 301 (citations omitted). The “clearly and unmistakably”
language quoted in the second sentence comes from AT&T
Technologies, Inc. v. Communications Workers of America, 475 U.S.
643, 649 (1986), where the Court was discussing the Delegation
Question. It would be quite odd for the Court to have tacitly excluded
the Delegation Question from its broad statement when it relied on a
Delegation Question case to support it.
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 17
arbitration clause, and the dispute in that case related to
whether the clause covered the Delegation Question. Desert
Palace, 94 F.3d at 1310. SEIU argues that this difference—
in particular, the fact that the Supreme Court had no
arbitration clause to interpret in First Options—was the
reason for the Desert Palace court’s observation that “First
Options did not address the question whether a broad
arbitration clause in a collective bargaining agreement grants
the arbitrator the power to decide his or her own
jurisdiction.”
But this argument, based on one sentence plucked from
its context, also founders on the text of Desert Palace when
read as a whole. In the discussion immediately following the
statement quoted above, the Desert Palace court did not
point to factual differences between the two cases; it instead
pointed to the Supreme Court’s acknowledgment in First
Options that there was “no strong arbitration-related policy
favoring First Options,” and contrasted that with the
“collective bargaining context, where there is a strong
federal policy favoring arbitration of labor disputes.” Desert
Palace, 94 F.3d at 1311–12 (emphasis in original). The
entirety of the Desert Palace opinion turns on one repeated
argument: that policy differences justify different
application of the arbitrability framework in commercial
versus labor disputes—precisely the argument that Granite
Rock rejected. 7
7
The dissent contends that “Desert Palace did not purport to rely on
policy considerations,” but instead relied on a principle of contract
interpretation. It purported to rely on both. After stating that the rule it
was applying was “‘an act of legitimate contract interpretation’ … under
this circuit’s precedents,” Desert Palace, 94 F.3d at 1310, it proceeded
to distinguish “the Supreme Court’s recent decision in First Options” on
the sole basis that the Court’s expressed “policy concerns, however, do
18 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
not come into play in the collective bargaining context.” Id. at 1310–11;
see also id. at 1312 (asserting “there is no strong federal policy favoring
arbitration of commercial disputes,” but there is “a strong federal policy
favoring arbitration of labor disputes” (first and third emphasis added));
id. (stating “federal labor policy strongly favors the resolution of labor
disputes through arbitration” (emphasis added) (quoting United Food &
Commercial Workers Int’l Union, Local 588 v. Foster Poultry Farms,
74 F.3d 169, 173 (9th Cir. 1995))).
But even the “act of legitimate contract interpretation” relied on by
Desert Palace was itself a result of a labor-context policy decision. Any
time a court says that it will assume the parties agreed to something they
didn’t actually expressly agree to, that rule—whether labeled a “contract
interpretation” rule or something else—is a result of a policy decision.
Here, the case cited in Desert Palace for the broad arbitration clause rule
as “an act of legitimate contract interpretation” does not offer any
rationale for the rule other than labor policy considerations. See
Frederick Meiswinkel, Inc. v. Laborer’s Union Local 261, 744 F.2d
1374, 1376 (9th Cir. 1984) (asserting that “[f]ederal policy generally
favors arbitration of labor disputes” (citation omitted)). Indeed, other
decisions from this court have explained in more detail the labor policy
considerations at play in Desert Palace, as Desert Palace itself
emphasized. Only a few paragraphs after relying on “this circuit’s
precedents,” it block-quotes from one of those “precedents” that fleshes
out in more detail its strong reliance on labor policy considerations. See
Desert Palace, 94 F.3d at 1311 (“The labor arbitrator does not merely
provide an alternative means of resolving disputes …. Unlike the
commercial contract, … [t]he labor arbitrator is the person the parties
designate to fill in the gaps; … the arbitrator will state the parties’
bargain. He is ‘the parties’ officially designated “reader” of the
contract … their joint alter ego …’ to handle matters omitted from the
agreement.” (underlining added and alteration marks omitted) (quoting
Stead Motors of Walnut Creek v. Auto. Machinists Lodge No. 1173, 886
F.2d 1200, 1205 (9th Cir. 1989) (en banc))). So ultimately, it’s policy
considerations all the way down.
The Desert Palace court had to rely on these policy differences so
that its “conclusion [wa]s not affected by the Supreme Court’s recent
decision in First Options.” Id. at 1310. Absent its policy-based
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 19
III.
Since Granite Rock, none of our decisions have squarely
grappled with the fundamental inconsistencies between
Desert Palace and Granite Rock. Only one subsequent
Ninth Circuit majority opinion has even cited to Desert
Palace. See Kramer v. Toyota Motor Corp., 705 F.3d 1122,
1127 (9th Cir. 2013). But Kramer merely cited Desert
Palace for the general proposition that “clear and
unmistakable evidence” of the parties’ agreement is required
to “arbitrate arbitrability.” Id. Kramer says nothing about
Desert Palace’s conclusion that, notwithstanding First
Options, because of unique policy considerations in the
labor context, a broad arbitration agreement in that context
can itself constitute “clear and unmistakable evidence” of the
parties’ agreement to arbitrate arbitrability. Because Kramer
involved a commercial arbitration dispute, not a labor
dispute, it is not surprising that its passing citation to Desert
Palace had nothing to do with whether Desert Palace’s
cordoning off of labor cases survives Granite Rock. See
Head v. Wilkie, 936 F.3d 1007, 1012–13 (9th Cir. 2019)
(acknowledging Supreme Court precedent overruled two
prior Ninth Circuit cases despite continued citation of the
overruled cases because none of the subsequent citations
“expressly addressed the[ir] continuing viability” (internal
citations omitted)); cf. In re Magnacom Wireless, LLC,
503 F.3d 984, 993–94 (9th Cir. 2007) (“In our circuit,
statements made in passing, without analysis, are not binding
precedent.”); Estate of Magnin v. C.I.R., 184 F.3d 1074,
1077 (9th Cir. 1999) (“When a case assumes a point without
discussion, the case does not bind future panels.”).
distinction, the Desert Palace court itself recognized First Options
mandated a different outcome.
20 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
The only meaningful discussion from this court of the
interplay between Granite Rock and Desert Palace appears
in Judge Ikuta’s dissent in ASARCO LLC v. United Steel,
Paper & Forestry, Rubber, Manufacturing, Energy, Allied
Industrial & Service Workers International Union, where
the majority opinion never addressed the issue. 910 F.3d
485, 496–98 (9th Cir. 2018) (Ikuta, J., dissenting). Judge
Ikuta determined that Desert Palace distinguished itself
from First Options on the basis that “First Option’s holding
applied only in the commercial context, not in the collective
bargaining context, where there is a strong federal policy
favoring arbitration of labor disputes.” Id. at 498 (citations
and quotation marks omitted). She concluded, as the court
now does, that “Granite Rock superseded Desert Palace.”
Id.
SEIU counters that the Ninth Circuit applied the “broad
arbitration clause” rule post-Granite Rock in International
Alliance of Theatrical Stage Employee & Moving Picture
Technicians, Artists, & Allied Crafts v. InSync Show
Productions, Inc., 801 F.3d 1033 (9th Cir. 2015). Because,
according to SEIU, the current case is “indistinguishable”
from InSync, concluding that a court should determine
arbitrability in this case would improperly overturn InSync
without intervening Supreme Court precedent.
It is unclear whether SEIU argues that the continued
application of the “broad arbitration clause” rule indicates
the continuing vitality of Desert Palace, or that SEIU’s case
is separately governed by InSync even if Desert Palace is no
longer good law. With respect to the first argument, InSync
does not discuss Desert Palace. It does not cite to the case
even once. InSync is also completely silent as to the alleged
differences between commercial and labor arbitration. The
court in InSync does indicate that a broad arbitration clause
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 21
can constitute “clear and unmistakable” evidence of an
arbitrator’s authority to determine arbitrability, but it makes
such acknowledgment in a conclusory statement in a
footnote. InSync, 801 F.3d at 1043 n.7 (stating “[b]ecause
the scope of the arbitration provision broadly covers claims
or allegations of employer violations of the agreement, this
case is not one in which the arbitration provision’s scope is
too narrow to ‘clearly and unmistakably’ leave questions of
arbitrability for determination by the arbitrator” (internal
citations and quotation marks omitted)). Again, concepts
only referenced in passing, without analysis, in a prior
opinion do not have precedential value. In re Magnacom
Wireless, LLC, 503 F.3d at 993–94.
SEIU also could be arguing that, regardless of the fate of
Desert Palace, this case should be governed by InSync’s
holding that a broad arbitration clause was sufficient to
authorize the arbitrator to determine the parties’ dispute over
the termination clause in their collective bargaining
agreement. But the arbitrability of a termination clause is
obviously different than the arbitrability of the arbitration
requirement itself. See, e.g., First Options, 514 U.S. at 944–
45 (“[T]he law treats … the question ‘who (primarily) should
decide arbitrability’ differently from the way it treats … the
question ‘whether a particular merits-related dispute is
arbitrable …’—for in respect to this latter question the law
reverses the presumption.”). Although the InSync court
initially recited general principles of arbitration, it
determined that Brotherhood of Teamsters & Auto Truck
Drivers Local No. 70 v. Interstate Distributor Co., 832 F.2d
507 (9th Cir. 1987), governed its analysis because
“Interstate Distributor explained how to approach a case in
which the parties to a collective bargaining agreement
disagree about the proper meaning or interpretation of a
termination clause in their agreement, and whether an
22 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
arbitrator should decide that question.” InSync, 801 F.3d at
1041–42 (emphasis added) (internal citations, quotation
marks, and alteration marks omitted). The InSync court
repeatedly stated that it was applying principles specific to
addressing the arbitrability of expiration and termination
disputes, characterizing such disputes as “one step removed
from the issue of substantive arbitrability.” Id. at 1042
(describing the proper inquiry set out in Interstate
Distributor for cases, like InSync, where “a dispute exists
over whether a contract with an arbitration clause has
expired or been terminated” (emphasis added)). 8 The
InSync court explicitly distinguished its case—a case
resolving a termination dispute—from cases that address
disputes involving contract formation or the scope of an
existing arbitration provision, such as in Granite Rock. Id.
at 1044 n.9 (“Because this appeal involves the parties’
dispute relating to expiration or termination of their CBA,
cases involving contract formation and disputes regarding
the scope of an arbitration provision are distinct.”). The case
8
See also InSync, 801 F.3d at 1042 (discussing the application of
“Interstate Distributor’s rule that when the collective bargaining
agreement contains a customary arbitration clause acts of repudiation
and other acts of termination must be submitted to arbitration” (emphasis
added) (citations and quotation marks omitted)); id. at 1043 (setting out
the principle from Interstate Distributor’s progeny that “an agreement to
arbitrate any differences that may arise regarding the meaning and
enforcement of this Agreement, or any other broad arbitration clause, …
ordinarily requires us to hold that the parties have provided for
arbitration of disputes regarding termination” (emphasis added)
(citations, internal quotation marks, and emphasis omitted)); id. at 1043–
44 (distinguishing a Supreme Court case on the basis that the parties in
InSync disputed “the issue of whether the agreement has expired or been
terminated” (emphasis added)); id. at 1044 (acknowledging that “once it
is found that a contract did exist at some time, the questions of whether
that contract has expired, or has been terminated or repudiated, may well
present arbitrable issues” (emphasis added)).
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 23
before us does not involve a dispute over the termination or
expiration of the CBA, but rather whether the arbitration
provision delegates the arbitrability question to the
arbitrator. InSync therefore cannot control.
IV.
This court has, in fact, already recognized the
incompatibility of the rationale in Desert Palace with that in
Granite Rock, albeit indirectly so. In Pacesetter
Construction Co. v. Carpenters 46 Northern California
Counties Conference Board, this court addressed the
question of whether an arbitration panel had the authority to
determine the arbitrability of a dispute between an employer
and a union. 116 F.3d 436, 437 (9th Cir. 1997), cert. denied,
522 U.S. 1014 (1997), abrogated by Granite Rock, 561 U.S.
287 (2010), as recognized in Local Joint Exec. Bd. v. Mirage
Casino-Hotel, Inc., 911 F.3d 588 (9th Cir. 2018). The
underlying dispute in Pacesetter related to whether the
agreement between the parties had been repudiated. Id. This
court concluded that submitting the repudiation dispute to
the arbitration panel, without also challenging the panel’s
jurisdiction, constituted implicit consent to having the panel
arbitrate the latter issue. Id. at 438–39. But the Supreme
Court vacated and remanded that decision for
reconsideration in light of First Options. Id. at 438.
On remand, the employer argued that First Options
controlled the case and invalidated the court’s prior holding,
but the Pacesetter panel rejected this contention, citing
Desert Palace for the assertion that “[o]ur court has recently
held that it is not appropriate to transfer wholesale the
rationale of First Options to the collective bargaining
context.” Id. at 439. As the court in Pacesetter explained,
the court in Desert Palace declined to follow First Options
due to the “fundamentally different policy concerns” that are
24 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
implicated in commercial, as opposed to labor, arbitration
agreements. Id. The court concluded that “all of Desert
Palace’s policy reasons for arbitrating disputes between the
parties to labor disputes” were applicable in Pacesetter also
and thus that case was not controlled by First Options, but
rather a prior Ninth Circuit opinion in the labor context. Id.
at 439–40.
This court has since recognized that the analysis in
Granite Rock undermined Pacesetter and its reliance on the
differences between commercial and labor arbitration cases.
Specifically, in Local Joint Executive Board v. Mirage
Casino-Hotel, Inc., the court explained:
It is true that in Pacesetter Construction Co.
v. Carpenters 46 Northern California
Counties Conference Board, 116 F.3d 436,
439 (9th Cir. 1997), this court declined to
adopt “wholesale” the Court’s reasoning in
First Options—a commercial arbitration
case—and held that [prior Ninth Circuit
precedent] remained good law in the labor
context. But since Pacesetter, the Supreme
Court has made clear that the “same
framework” applies in both labor and
commercial arbitration disputes. Indeed,
several other circuits have applied First
Options in the labor context.
911 F.3d 588, 598 (9th Cir. 2018) (citations omitted). We
now reach the same conclusion with respect to Desert
Palace that the court in Local Joint Executive Board reached
with respect to Pacesetter—the Supreme Court’s reasoning
in Granite Rock is clearly irreconcilable with Desert Palace,
and thus Desert Palace has been abrogated. See Miller,
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 25
335 F.3d at 893 (“We hold that in circumstances … where
the reasoning or theory of our prior circuit authority is
clearly irreconcilable with the reasoning or theory of
intervening higher authority, a three-judge panel should
consider itself bound by the later and controlling authority,
and should reject the prior circuit opinion ….”). 9
V.
Having concluded that Desert Palace is no longer good
law, we must determine whether there is “clear and
unmistakable” evidence of the parties’ intent to have an
arbitrator—rather than the court—decide whether the
grievance is arbitrable. Under Article 38 of the CBA, an
arbitrator is tasked with resolving any “dispute or
disagreement involving the interpretation, application or
compliance with specific provisions of [the CBA].” The
CBA is otherwise silent as to the arbitrator’s authority to
determine its own jurisdiction, and SEIU does not provide
any other evidence of an agreement to have an arbitrator
decide that issue.
As First Options instructs us, “[c]ourts should not
assume that the parties agreed to arbitrate arbitrability” in the
face of “silence or ambiguity” with respect to the Delegation
Question. 514 U.S. at 944–45. Without “clear and
unmistakable” evidence, then, we rely on the well-settled
principle “that whether parties have agreed to submit a
9
See also Head, 936 F.3d at 1014 (concluding that Ninth Circuit
precedent was irreconcilable with a subsequent Supreme Court opinion
and overruling such precedent without taking the case en banc); Palmer
v. Sanderson, 9 F.3d 1433, 1437 n.5 (9th Cir. 1993) (noting “a panel can
reexamine the earlier decision of a three-judge panel if that earlier
decision has been undermined by later overriding precedent” (quoting
United States v. Magana, 797 F.2d 777, 779 (9th Cir. 1986))).
26 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
particular dispute to arbitration is typically an issue for
judicial determination.” Granite Rock, 561 U.S. at 296
(citations, quotation marks, and alteration marks omitted).
We therefore hold that the district court is responsible for
determining whether the grievance filed by SEIU is
arbitrable.
The district court’s order granting SEIU’s motion to
compel arbitration is reversed and the case is remanded for
further proceedings consistent with this opinion.
REVERSED and REMANDED.
LEE, Circuit Judge, dissenting:
I agree with much of the majority’s analysis. But I am
not convinced that Granite Rock Co. v. International
Brotherhood of Teamsters, 561 U.S. 287 (2010) has
effectively overruled United Brotherhood of Carpenters &
Joiners of America, Local No. 1780 v. Desert Palace, Inc.,
94 F.3d 1308 (9th Cir. 1996) because they address two
related—but distinct—issues.
To be clear, the foundation for Desert Palace appears
flawed. The Supreme Court in First Options of Chicago,
Inc. v. Kaplan went to great lengths to specify that “[c]ourts
should not assume that the parties agreed to arbitrate
arbitrability unless there is clear and unmistakable evidence
that they do so.” 514 U.S. 938, 944 (1995) (internal
quotation marks and alterations omitted) (emphasis added).
This court in Desert Palace, however, distinguished First
Options by limiting it to the commercial arbitration context
only. We held that, in contrast, a broad arbitration
agreement in the collective bargaining context reflects “clear
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 27
and unmistakable evidence” that the parties agreed to
arbitrate arbitrability—even though the contract is silent on
that issue. Desert Palace, 94 F.3d at 1311–12.
But it is counterintuitive to construe silence as “clear and
unmistakable evidence” of an agreement on an issue that
neither party has addressed in the contract. To be sure, courts
sometimes infer silence as an implicit agreement. But
silence certainly does not indicate “clear and unmistakable
evidence” of an agreement. Cf. First Options, 514 U.S.
at 945 (“And, given the principle that a party can be forced
to arbitrate only those issues it specifically has agreed to
submit to arbitration, one can understand why courts might
hesitate to interpret silence or ambiguity on the ‘who should
decide arbitrability’ point as giving the arbitrators that
power.”); 1 Corbin on Contracts § 3.18 (2020) (explaining
that it is “not a rule of law” that “silence gives consent,” but
sometimes “silence coupled with conduct or with
expectations engendered by a prior relationship can
reasonably be understood by the offeror as an acceptance”).
Our holding in Desert Palace has thus created a strained
distinction between commercial arbitration and labor
arbitration on who decides arbitrability.
Nonetheless, I do not believe that Desert Palace is
clearly irreconcilable with Granite Rock because it dealt
with a related but different question: Desert Palace
addressed who decides arbitrability (i.e., the Delegation
Question), while Granite Rock dealt with whether a specific
issue is arbitrable (i.e., the Arbitrability Question). Compare
Granite Rock, 561 U.S. at 297–98 (“The parties agree that it
was proper for the District Court to decide whether their
ratification dispute was arbitrable [i.e., Delegation
Question]. They disagree about whether the District Court
answered the question correctly [i.e., Arbitrability
28 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
Question].” (footnote omitted)) with Desert Palace, 94 F.3d
at 1311 (“As our precedents hold, a broad arbitration
clause—even one that does not specifically mention who
decides arbitrability—is sufficient to grant the arbitrator
authority to decide his or her own jurisdiction.”). 1
As the majority notes, the Supreme Court in Granite
Rock did emphasize courts should apply the same arbitration
framework in both commercial and labor arbitration
contexts. But the Court in Granite Rock was addressing the
need to ensure that courts “compel[] arbitration of a dispute
only after [a court is] persuaded that the parties’ arbitration
agreement was validly formed and that it covered the dispute
in question and was legally enforceable.” Granite Rock,
561 U.S. at 300. It also explained that courts discharge their
duty to apply the “settled framework for deciding
arbitrability” 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 301–02. The Supreme Court in Granite
Rock appeared to implicitly recognize that this does not
1
Admittedly, Desert Palace remains vague on whether it actually
applied the clear and unmistakable evidence standard. After articulating
that standard in the second sentence of the discussion section, the opinion
curiously never mentions it again. 94 F.3d at 1310. But cases applying
Desert Palace have construed it as applying the clear and unmistakable
standard. See, e.g., IATSE Local 720 v. InSync Show Productions, Inc.,
801 F.3d 1033, 1043 n.7 (9th Cir. 2015) (“Because the scope of the
arbitration provision broadly covers claims or allegations of employer
violations of the agreement, this case is not one in which the arbitration
provision’s scope is too narrow to ‘clearly and unmistakably leave
questions of arbitrability for determination by the arbitrator’” (internal
quotation marks omitted)).
SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR. 29
necessarily implicate the Delegation Question: It explained
that the “duty to interpret the agreement and to determine
whether the parties intended to arbitrate grievances
concerning a particular matter” applies “except where the
parties clearly and unmistakably provide otherwise.” Id.
at 301 (emphasis added, internal quotation marks omitted).
Moreover, Granite Rock’s rejection of using policy
consideration as a substitute for party agreement does not
necessarily undermine Desert Palace. Desert Palace did not
purport to rely on policy considerations to overcome a lack
of agreement on the Delegation Question. Rather, Desert
Palace stated that it was relying on “an act of legitimate
contract interpretation” to interpret a broad arbitration clause
in the collective bargaining context as delegating the
Arbitrability Question to the arbitrator. 94 F.3d at 1310
(emphasis added, internal quotation marks omitted). The
Desert Palace court explained that “[i]n the collective
bargaining context, the issue of who gets to decide
arbitrability is not an ‘arcane’ question the parties do not
think about,” so “[b]y entering into a collective bargaining
agreement, the parties know they will get an arbitrator rather
than the courts to decide any labor dispute that arises under
their collective bargaining agreement, including a dispute
over arbitrability.” Id. at 1311. While one may question the
analysis in Desert Palace, we need to accept the opinion’s
assertion that it relied on contract principles, not policy
considerations.
In sum, I do not believe that Granite Rock “undercut the
theory or reasoning underlying the prior circuit precedent in
such a way that the cases are clearly irreconcilable.” Miller
v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003). So I believe
that Desert Palace should still stand, even if it teeters on a
flawed foundation. See Federal Trade Commission v.
30 SEIU LOCAL 121RN V. LOS ROBLES REG’L MED. CTR.
Consumer Defense, LLC, 926 F.3d 1208, 1213 (9th Cir.
2019) (explaining that “if we can apply our precedent
consistently with that of the higher authority, we must do
so”).
I respectfully dissent.