FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
COLUMBIA EXPORT TERMINAL, LLC, No. 20-35037
Plaintiff-Appellant,
D.C. No.
v. 3:18-cv-02177-
JR
INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION; KANE AHUNA,
an individual; JASON ANDREWS, an ORDER AND
individual; JESUS ARANGO, an OPINION
individual; MIKE AYERS, an
individual; BRIAN BANTA, an
individual; KEN BANTA, an
individual; KEITH BANTA, an
individual; ANDRE BARBER, an
individual; CRYSTAL BARNES, an
individual; CRAIG BITZ, an
individual; LISA BLANCHARD, an
individual; RANDY BOOKER, an
individual; BRAD BOYD, an
individual; LARRY BROADIE, an
individual; FELIX BROWN, an
individual; JIMMY BROWN, an
individual; JON BUDISELIC, an
individual; WILLIAM BURRIS, an
individual; DOUGLAS CAREY, an
individual; GREG CARSE, an
individual; ANTHONY CERRUTTI, an
individual; HUGH COLSON, an
individual; TIM COPP, an individual;
2 COLUMBIA EXPORT TERMINAL V. ILWU
E. COTUREN, an individual; STEVEN
COX, an individual; RYAN
CRANSTON, an individual; JAMES
DAW, an individual; ADAM DAY, an
individual; JAMES DEGMAN, an
individual; TORRAE DE LA CRUZ, an
individual; FRANK DE LA ROSA, an
individual; THOMAS DEMUTH, an
individual; JAMES DINSMORE, an
individual; BRIAN DIRCKSEN, an
individual; TERENCE DODSON, an
individual; GARY DOTSON, an
individual; OLIVER EDE, an
individual; RAY ELWOOD, an
individual; TODD ENGLERT, an
individual; CHRIS EUBANKS, an
individual; DAVID FAMBRO, an
individual; LARRY FAST, an
individual; JAMES FINCH, an
individual; GREG FLANNERY, an
individual; MIKE GARDNER, an
individual; BRETT GEBHARD, an
individual; RICHARD GILSTRAP, an
individual; TED GRAY, an individual;
KURTIS HANSON, an individual;
MIKE HARMS, an individual; RANDY
HARPER, an individual; TERRY
HICKMAN, an individual; JAMES
HOLLAND, an individual; BRUCE
HOLTE, an individual; RONALD
HUSEMAN, an individual; NATHAN
HYDER, an individual; TROY JAMES,
an individual; SAM JAURON, an
COLUMBIA EXPORT TERMINAL V. ILWU 3
individual; ANTHONY JEFFRIES, an
individual; KEVIN JOHNSON, an
individual; PAT JOHNSON, an
individual; TERRY JOHNSON, an
individual; TIM JONES, an individual;
JON JULIAN, an individual; LEROY
KADOW, an individual; GEORGE
KELLY, an individual; ERIC KING, an
individual; WAYNE KING, Esquire,
an individual; KEVIN KNOTH, an
individual; KENNETH KYTLE, an
individual; MIKE LACHAPELLE, an
individual; JIMMY LAI, an individual;
TOM LANGMAN, an individual;
TYLER LAUTENSCHLAGER, an
individual; JACK LEE, an individual;
KEN LEE, an individual; DAN
LESSARD, an individual; SHANTI
LEWALLEN, an individual; DANNY
LOKE, an individual; THOMAS LOVE,
an individual; WILFRED LUCH, an
individual; KARL LUNDE, an
individual; CRAIG MAGOON, an
individual; MIKE MAHER, an
individual; JASON MALACHI, an
individual; LEVI MANNING, an
individual; RICKIE MANNING, an
individual; JAY MANTEI, an
individual; PAT MARONAY, an
individual; A. MARTIN, an
individual; GARRY MATSON, an
individual; PAT MCCLAIN, an
individual; M. MCMAHON, an
4 COLUMBIA EXPORT TERMINAL V. ILWU
individual; MIKE MCMURTREY, an
individual; DONALD MEHNER, an
individual; CURTIS MEULER, an
individual; KARL MINICH, an
individual; JOSH MORRIS, an
individual; JOHN MULCAHY, an
individual; TOM NEITLING, an
individual; MARTIN NELSON, an
individual; GREG NEMYRE, an
individual; RIAN NESTLEN, an
individual; CHRIS OVERBY, an
individual; KEN OVIATT, an
individual; THOMAS OWENS, an
individual; JOHN PEAK, an
individual; SHANE PEDERSON, an
individual; JEFF PERRY, an
individual; JOHN PERRY, an
individual; ARNOLD PETERSON, an
individual; TERRY PLAYER, an
individual; JAMES POPHAM, an
individual; DAVID PORTER, an
individual; MIKE RAPACZ, an
individual; JOHN RINTA, an
individual; WILLIAM ROBERTS, an
individual; JOSEPH ROBINSON, an
individual; MARK ROBINSON, an
individual; CHRIS SCHEFFEL, an
individual; THEODORE SCHUH, an
individual; MIKE SEXTON, an
individual; MARK SIEGEL, an
individual; COURTNEY SMITH, an
individual; JEFF SMITH, an
individual; MIKE SMITH, an
COLUMBIA EXPORT TERMINAL V. ILWU 5
individual; SCOTT STEIN, an
individual; DONALD STYKEL, an
individual; MIKE SUHR, an
individual; LEAL SUNDET, an
individual; LAWRENCE THIBEDEAU,
an individual; MARK THORSFELDT,
an individual; SHAWN THORSTAD, an
individual; JAMES THORUD, an
individual; DAVID TRACHSEL, an
individual; WILLIAM UNDERWOOD,
an individual; JASON VANCE, an
individual; DAVID VARNON, an
individual; PAN VARNON, an
individual; MIKE WALKER, Esquire,
Attorney, an individual; DWAYNE
WAMSHER; EUGENE WEBB, an
individual; MIKE WEHAGE, an
individual; KEVIN WELDON, an
individual; SPENCER WHITE, an
individual; RICHARD WIDLE, an
individual; NURAL WILLIS, an
individual; RONALD WOODS, an
individual; MARK WRIGHT, an
individual; CAROL WURDINGER, an
individual; JERRY YLONEN, an
individual; P. YOCITIM, an
individual; RICHARD ZATTERBERG,
an individual; FRED ZOSKE, an
individual; JAMES COTHREN, an
individual; BOBBY CRANSTON, an
individual; TEREK JOHNSON, an
individual; ANGELA MARTIN,
Esquire, an individual; PATRICK
6 COLUMBIA EXPORT TERMINAL V. ILWU
MCCLAIN, an individual; MATTHEW
MCMAHON, an individual; SHANN
PEDERSON, an individual; MICHAEL
SEXTON, an individual; JEFFREY
SMITH, an individual; LAURENCE
THUBEDEAU, an individual; PAUL
YOCHIM, an individual,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Oregon
Michael H. Simon, District Judge, Presiding
Argued and Submitted October 26, 2020
Portland, Oregon
Filed January 5, 2022
Before: Susan P. Graber, Richard R. Clifton, and
Sandra S. Ikuta, Circuit Judges.
Order;
Opinion by Judge Clifton;
Dissent by Judge Ikuta
Dissent from Order by Judge Bennett
COLUMBIA EXPORT TERMINAL V. ILWU 7
SUMMARY*
RICO / Labor Law
The panel filed (1) an order withdrawing an opinion and
dissent and denying, on behalf of the court, a petition for
rehearing en banc; and (2) a new opinion and dissent. In the
new opinion, the panel affirmed the district court’s dismissal
of an action brought by Columbia Export Terminal under the
Racketeer Influenced and Corrupt Organizations Act against
the International Longshore and Warehouse Union and
individual union workers.
The panel concluded that Columbia Export Terminal’s
RICO claims alleging overbilling via fraudulent timesheets
required interpretation of the collective bargaining agreement
(“CBA”) under which the workers were employed, and the
CBA provided a process for arbitration of disputes. The
panel concluded that the CBA’s arbitration provision applied
to the RICO claims. Accordingly, § 301 of the Labor
Management Relations Act precluded adjudication of the
RICO claims before the arbitration process was exhausted.
The panel agreed with the district court that Hubbard v.
United Airlines, Inc., 927 F.2d 1094 (9th Cir. 1991),
remained good law, and the panel found persuasive
Hubbard’s holding that the Railway Labor Act preempted a
fraud claim under RICO. The panel held that a RICO claim
is precluded by § 301 of the LMRA when the right or duty
upon which the claim is based is created by a CBA or
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
8 COLUMBIA EXPORT TERMINAL V. ILWU
resolution of the claim substantially depends on analysis of a
CBA.
Dissenting, Judge Ikuta wrote that the majority erred in
holding that any federal claim that is related to a CBA is
preempted or precluded by § 301 of LMRA and must
automatically be dismissed by the district court and sent for
arbitration. The majority also erred in applying a
presumption of arbitrability and in determining that the
CBA’s arbitration provision encompassed the RICO claims
at issue.
Dissenting from the denial of rehearing en banc, Judge
Bennett, joined by Judges Ikuta, R. Nelson, Bumatay, and
VanDyke, wrote that, whether called preemption or
preclusion, the LMRA does not bar a federal statutory claim
brought in federal court. Judge Bennett wrote that a footnote
in Alaska Airlines Inc. v. Schurke, 898 F.3d 904, 920 n.10
(9th Cir. 2018) (en banc), erroneously suggested that § 301
“precludes” federal statutory claims in the same way it
preempts state law claims, and the court should have reheard
this case en banc to excise this erroneous preclusion notion
from its jurisprudence. Judge Bennett wrote that preclusion
of federal claims is inconsistent with the purpose of § 301,
and a statute passed by Congress to help maintain a uniform
body of federal labor law does not somehow nullify a
different statute passed by Congress to, among other
objectives, eradicate organized attempts to defraud through a
pattern of racketeering activity. Judge Bennett wrote that the
panel also erred in applying a presumption of arbitrability
contrary to Supreme Court precedent and created an
agreement to arbitrate RICO claims, even though the parties
never signed such an agreement.
COLUMBIA EXPORT TERMINAL V. ILWU 9
COUNSEL
Christopher F. McCracken (argued) and Jacqueline M.
Damm, Ogletree Deakins Nash Smoak & Stewart P.C.,
Portland, Oregon; Thomas A. Lidbury, Ogletree Deakins
Nash Smoak & Stewart P.C., Chicago, Illinois; for Plaintiff-
Appellant.
Darin M. Dalmat (argued) and Robert H. Lavitt, Barnard
Iglitzin & Lavitt LLP, Seattle, Washington, for Defendants-
Appellees.
10 COLUMBIA EXPORT TERMINAL V. ILWU
ORDER
The opinion and dissent filed on June 28, 2021 (Docket
Entry No. 31), and published at 2 F.4th 1243 (9th Cir. 2021)
are withdrawn. A new opinion and dissent are filed
concurrently with this order.
Plaintiff-Appellant has filed a petition for rehearing en
banc (Docket Entry No. 34). Judge Graber votes to deny the
petition for rehearing en banc, and Judge Clifton so
recommends. Judge Ikuta votes to grant the petition for
rehearing en banc.
The full court has been advised of the petition for
rehearing en banc. A judge of the court requested a vote on en
banc rehearing. The matter failed to receive a majority of
votes of non-recused active judges in favor of en banc
consideration. Fed. R. App. P. 35.
The petition for rehearing en banc is DENIED. No further
petitions for rehearing or rehearing en banc will be
entertained.
OPINION
CLIFTON, Circuit Judge:
Columbia Export Terminal (“CET”) brought an action
under the Racketeer Influenced and Corrupt Organizations
Act (“RICO”) against the International Longshore and
Warehouse Union (“ILWU”) and 154 individual ILWU
workers employed by CET. The district court concluded that
CET’s RICO claims could not properly proceed in court at
COLUMBIA EXPORT TERMINAL V. ILWU 11
this time and dismissed the case without prejudice. It
reasoned that the claims required interpretation of the
collective bargaining agreement (“CBA”) under which the
workers were employed, that the CBA provided a process for
arbitration of disputes, and that the Labor Management
Relations Act (“LMRA”) precluded court adjudication of the
RICO claims before the arbitration process had been
exhausted. CET appeals the dismissal.
We previously reached a conclusion similar to that
reached by the district court regarding a labor contract
governed by the Railway Labor Act (“RLA”). Hubbard v.
United Airlines, Inc., 927 F.2d 1094 (9th Cir. 1991). The
district court relied on that precedent, rejecting an argument
by CET that Hubbard had been overruled. We agree with the
district court that Hubbard remains alive and persuasive. Our
conclusion that the same result is required for a contract
governed by the LMRA is a logical extension of our
precedents. We take that step here and affirm the judgment of
the district court.
I. Background
CET operates a grain export terminal in the Port of
Portland and employs workers who are members of the
ILWU. CET alleges that the ILWU and the 154 named
individual defendants conspired to fraudulently furnish
timesheets reporting hours that were not actually worked and,
as a result, overbilled CET by more than $5.3 million.
CET filed this action alleging seven claims under RICO,
18 U.S.C. §§ 1961–68. In response, the ILWU filed a motion
to dismiss contending, among other things, that CET’s claims
were preempted under § 301 of the LMRA, 29 U.S.C. § 185,
12 COLUMBIA EXPORT TERMINAL V. ILWU
because resolution of the claims required interpretation of the
underlying CBA, which requires exhaustion of the
agreement’s grievance procedures. The individual defendants
joined the union’s motion. The district court agreed with the
ILWU and dismissed the case without prejudice. CET
appeals.
II. Discussion
The central dispute on appeal is whether CET’s claims,
which it styled as RICO claims, are preempted or precluded
by § 301 of the LMRA. We review the district court’s
interpretation of the statutes de novo. Alaska Airlines Inc. v.
Schurke, 898 F.3d 904, 916 (9th Cir. 2018) (en banc).
A. The two-step preclusion and preemption under LMRA
§ 301.
The LMRA, sometimes described as the Taft-Hartley Act,
was enacted in 1947 to “promote the full flow of commerce”
by “provid[ing] orderly and peaceful procedures for
preventing [] interference by [employees or employers] with
the legitimate rights of the other.” 29 U.S.C. §141(b). To that
end, LMRA § 301(a) provides that “[s]uits for violation of
contracts between an employer and a labor organization . . .
may be brought in any district court.” 29 U.S.C. § 185(a).
On its face, § 301 reads as a jurisdictional statute, and it
“contains no express language of preemption, [but] the
Supreme Court has long interpreted the [provision] as
authorizing federal courts to create a uniform body of federal
common law to adjudicate disputes that arise out of labor
contracts.” Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1151
COLUMBIA EXPORT TERMINAL V. ILWU 13
(9th Cir. 2019); Textile Workers Union v. Lincoln Mills,
353 U.S. 448, 450–51, 457 (1957).
Consistent with this purpose, the Supreme Court
concluded that § 301 impliedly preempted state law in order
to give effect to the congressional intent that “doctrines of
federal labor law uniformly [] prevail over inconsistent local
rules.” Teamsters v. Lucas Flour Co., 369 U.S. 95, 104
(1962). Therefore, any “union agreement made pursuant to [a
federal labor law] has [] the imprimatur of the federal law
upon it and, by force of the Supremacy Clause of Article VI
of the Constitution, could not be [] vitiated by any provision
of the laws of a State.” California v. Taylor, 353 U.S. 553,
561 (1957) (quoting Ry. Emp. Dept. v. Hanson, 351 U.S. 225,
232 (1956)).
Federal courts have developed common law to govern
labor disputes and have concluded that a “central tenet of
federal labor-contract law under § 301 [is that] the arbitrator,
not the court, [] has the responsibility to interpret the labor
contract in the first instance.” Allis-Chalmers Corp. v. Lueck,
471 U.S. 202, 220 (1985). As we explained in Alaska Airlines
and reiterated last year in Curtis, preserving the role of the
CBA’s grievance process is important for three reasons:
First, a [CBA] is more than just a contract; it
is an effort to erect a system of industrial self-
government. Thus, a CBA is part of the
continuous collective bargaining process.
Second, because the CBA is designed to
govern the entire employment relationship,
including disputes which the drafters may not
have anticipated, it calls into being a new
common law—the common law of a
14 COLUMBIA EXPORT TERMINAL V. ILWU
particular industry or of a particular plant.
Accordingly, the labor arbitrator is usually the
appropriate adjudicator for CBA disputes
because he was chosen due to the parties’
confidence in his knowledge of the common
law of the shop and their trust in his personal
judgment to bring to bear considerations
which are not expressed in the contract as
criteria for judgment. Third, grievance and
arbitration procedures provide certain
procedural benefits, including a more prompt
and orderly settlement of CBA disputes than
that offered by the ordinary judicial process.
Curtis, 913 F.3d at 1152 (internal quotation marks and
citations omitted).
For more than sixty years, the Supreme Court has
interpreted § 301 to require the specific performance of
promises to arbitrate grievances in collective bargaining
agreements. Lincoln Mills, 353 U.S. at 451.
We have thus applied the preemptive effect of § 301 to all
“state law claims grounded in the provisions of a CBA or
requiring interpretation of a CBA.” Kobold v. Good
Samaritan Reg’l Med. Ctr., 832 F.3d 1024, 1032 (9th Cir.
2016). We have distilled the relevant Supreme Court cases
into a two-part test:
The essential inquiry is this: [1] Does the
claim seek purely to vindicate a right or duty
created by the CBA itself? If so, then the
claim is preempted, and the analysis ends
there.
COLUMBIA EXPORT TERMINAL V. ILWU 15
[2] But if not, we proceed to the second
step and ask whether a plaintiff’s state law
right is substantially dependent on analysis of
the CBA, which turns on whether the claim
cannot be resolved by simply looking to
versus interpreting the CBA.
Curtis, 913 F.3d at 1152–53 (internal citations and quotation
marks omitted).1
CET argues that this preemption approach properly
applies only to claims arising under state law, not to claims,
such as the RICO claims alleged here, arising under federal
law. Instead, CET contends that we should apply a preclusion
test that asks whether the two federal statutes necessarily
conflict, and if so, favors the statute passed later in time. CET
argues that because the RICO statute was enacted after the
LMRA, if there is an irreconcilable conflict between the two
federal statutes, the older one, the LMRA, must be deemed to
have been repealed or amended by the later legislation.
We recognize, as CET argues, that a conflict between two
federal laws implicates different considerations than a
conflict between a state and a federal law. The Sixth Circuit
considered this issue in the context of an Americans with
Disabilities Act (“ADA”) claim brought by a union
employee. In permitting the ADA claim to proceed, the court
explained that “Congress’s power to preempt state law is
rooted in the Supremacy Clause of the United States
1
A variation of the test asks: (1) whether the claim asserted exists
independently of the CBA, and if so (2) whether the resolution of the
claim nonetheless substantially depends on analysis of the CBA. Kobold,
832 F.3d at 1032. Both versions of the test are used interchangeably.
16 COLUMBIA EXPORT TERMINAL V. ILWU
Constitution.” Watts v. United Parcel Serv., Inc., 701 F.3d
188, 191 (6th Cir. 2012). “Because [the plaintiff’s] claim is
based on a federal cause of action and is in federal court,
there is no danger of divergent application of a CBA’s
provisions by state courts; thus, the motivating purpose of
§ 301 preemption simply does not apply.” Id. at 191–92.
We agree, but that is not the only purpose of § 301
preemption. Crucially, § 301 preemption also is designed to
ensure “specific performance of promises to arbitrate
grievances under collective bargaining agreements.” Lincoln
Mills, 353 U.S. at 451. As the Supreme Court explained in
Lueck,
If respondent had brought a contract claim
under § 301, he would have had to attempt to
take the claim through the arbitration
procedure established in the collective-
bargaining agreement before bringing suit in
court. Perhaps the most harmful aspect of the
Wisconsin decision [that permitted the state
law tort claim to proceed] is that it would
allow essentially the same suit to be brought
directly in state court without first exhausting
the grievance procedures established in the
bargaining agreement. The need to preserve
the effectiveness of arbitration was one of the
central reasons that underlay the Court’s
holding in [Lucas Flour, 369 U.S. at 105.]
The parties here have agreed that a neutral
arbitrator will be responsible, in the first
instance, for interpreting the meaning of their
contract. Unless this suit is pre-empted, their
COLUMBIA EXPORT TERMINAL V. ILWU 17
federal right to decide who is to resolve
contract disputes will be lost.
471 U.S. at 219.
This principle—that claims which are, in substance, labor
disputes subject to the CBA must not be evaded by artful
pleading—applies with equal force to federal statutory
claims,2 “although they might be better described as
‘precluded.’” Alaska Airlines, 898 F.3d at 920 n.10. The
LMRA guarantees a “federal right to decide who is to resolve
contract disputes.” Lueck, 471 U.S. at 21. Therefore, when a
claim styled as a federal statutory claim turns in substance on
the provisions of the CBA rather than on an independent
statutory right, the federal court must direct the claim to the
proper adjudicator. Cf. Vadino v. A. Valey Engineers, 903
F.2d 253, 266 (3d Cir. 1990) (“In short, while claims resting
on [the Fair Labor Standards Act (“FLSA”)] are clearly
2
Watts seemed to recognize this principle as well. The Sixth
Circuit did not rest its holding solely on the inapplicability of preemption
doctrine as between two federal laws. The court further explained that “the
right to be free from disability discrimination that Watts seeks to vindicate
in this action does not arise from the CBA or from state law; rather, it is
founded on the ADA.” Watts, 701 F.3d at 192 (emphasis added).
Moreover, the Watts court recognized that the outcome might have been
different had the employer “argued that [the employee] was subject to a
mandatory arbitration agreement under the CBA that she failed to exhaust
before bringing her ADA claim in federal court.” Id. (emphasis added).
Thus, the Watts court acknowledged the distinction between federal
rights that arise independently from the CBA and rights that exist only
because of the CBA. This is precisely the distinction the preclusion
analysis aims to sift through, and the LMRA requires disputes arising
from the CBA to be funneled, if so required by the CBA, to arbitration.
Accordingly, our holding here is entirely consonant with Watts.
18 COLUMBIA EXPORT TERMINAL V. ILWU
cognizable under that section, we believe that claims which
rest on interpretations of the underlying collective bargaining
agreement must be resolved pursuant to the procedures
contemplated under the LMRA, specifically grievance,
arbitration, and, when permissible, suit in federal court under
section 301.”).
Whether called “preemption” or “preclusion,” the same
two-step approach applies whether the conflicting statute is
a federal or state provision. In Hubbard, for instance, we held
that the RLA, which also preceded the enactment of RICO,
preempted a fraud claim under RICO. 927 F.2d at 1099; see
also Long v. Flying Tiger Line, Inc., 994 F.2d 692 (9th Cir.
1993) (RLA precludes ERISA claims). Similar conclusions
have been reached by circuit courts across the country.3
Although the Supreme Court has never directly passed on
that precise question, we are guided by its holding that
“[s]ection 301(a) governs claims founded directly on rights
created by collective-bargaining agreements, and also claims
3
Other circuits have applied the “preemption” or “preclusion” test
when considering federal claims in the context of labor disputes, without
referencing the dates of passage of each federal act. Like our court, the
Seventh Circuit has also held that the RLA precludes RICO claims.
Underwood v. Venango River Corp., 995 F.2d 677 (7th Cir. 1993)
narrowed by Westbrook v. Sky Chefs, Inc., 35 F.3d 316, 317–18 (7th Cir.
1994) (RLA precludes RICO claims unless causes of action are
independent of the CBA). Similarly, at least two circuits have held that the
LMRA precludes FLSA claims. Vadino, 903 F.2d 253; Martin v. Lake
Cnty. Sewer Co., Inc., 269 F.3d 673 (6th Cir. 2001). At least four circuits
have held that the RLA precludes ERISA claims. de la Rosa Sanchez v.
E. Airlines, Inc., 574 F.2d 29 (1st Cir. 1978); Ballew v. Cont’l Airlines,
Inc., 668 F.3d 777 (5th Cir. 2012); Hastings v. Wilson, 516 F.3d 1055 (8th
Cir. 2008); Oakey v. U.S. Airways Pilots Disability Income Plan, 723 F.3d
227 (D.C. Cir. 2013).
COLUMBIA EXPORT TERMINAL V. ILWU 19
‘substantially dependent on analysis of a collective-
bargaining agreement.’” Caterpillar, Inc. v. Williams,
482 U.S. 386, 394 (1987) (emphasis added) (quoting Int’l
Bhd. of Elec. Workers v. Hechler, 481 U.S. 851, 859 n.3
(1987)). The Supreme Court has enforced arbitration
requirements in § 301 cases when resolution of the claims
required interpretation of the CBA, regardless of the form of
the claim. See, e.g., Lueck, 471 U.S. at 219 (“Since nearly any
alleged willful breach of contract can be restated as a tort
claim for breach of a good-faith obligation under a contract,
the arbitrator’s role in every case could be bypassed easily if
§ 301 is not understood to pre-empt such claims.”)
Thus, in Hubbard, we explained that “federal labor law
was intended to provide the exclusive remedy for generic
fraud claims relating to rights under a CBA. If the same
predicate acts were the basis of state claims for fraud . . . they
would be preempted . . . [so plaintiffs] cannot evade
preemption through ‘artful pleading’ of the claims as RICO
claims.” 927 F.2d at 1098. If the court held otherwise, any
plaintiff could avoid arbitration by converting a garden-
variety contract dispute into a case of federal racketeering.
Though in Hubbard we considered a labor contract under
the RLA and reserved for another day the question of whether
LMRA precludes RICO claims, that day has come. We hold
that a RICO claim is precluded by § 301 of the LMRA when
the right or duty upon which the claim is based is created by
a CBA or resolution of the claim substantially depends on
analysis of a CBA.
We have previously suggested this extension. Notably,
two years ago our court, sitting en banc, observed that “the
RLA and LMRA § 301 preemption standards are ‘virtually
20 COLUMBIA EXPORT TERMINAL V. ILWU
identical’ in purpose and function, [and] they are, for the most
part, analyzed under a single test and a single, cohesive body
of case law.” Alaska Airlines, 898 F.3d at 913 n.1 (quoting
Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 260 (1994)).
After discussing the development of the two-step test
applying to claims under state law that require interpretation
of a CBA, we explained that “[t]he same principle applies to
federal law claims, although they might be better described as
‘precluded.’” Id. at 920 n.10. The labor contract at issue in
Alaska Airlines, like the contract involved in Hubbard, was
governed by the RLA. The fact that the plaintiff had asserted
a claim under a federal statute rather than a state law did not
alter the outcome. The claim could not proceed, regardless of
whether it was described as precluded or preempted.
B. CET’s RICO claims require analysis of the CBA.
Applying the two-step test, we conclude that CET’s
RICO claims are precluded by § 301 because resolution of the
claims is substantially dependent on interpretation of the
CBA. CET’s RICO claims are premised on allegations that
timesheets submitted by ILWU workers were inflated. To
prove its case, CET must demonstrate that ILWU workers
committed the predicate acts of mail and wire fraud by
knowingly overbilling CET for time not worked. However,
ILWU contends that the billed hours were expressly
authorized by CET and charged in accordance with the CBA.
There are a host of CBA provisions that could excuse the
workers from being present at the time of work reported on
the timesheets or could explain why workers are compensated
for time not actually worked. For instance, ¶ 4-1 guarantees
a minimum of 8 hours of pay for employees who arrive at
work and are put to work even if released before the 8-hour
COLUMBIA EXPORT TERMINAL V. ILWU 21
shift concludes. Paragraph 4-5 guarantees a minimum 4 hours
of pay for those sent home upon arrival. Further, Section XII
of the CBA details special rules for “steady” employees:
¶ 12-3 guarantees 40 hours’ work per week, and ¶ 12-4 sets
maximum durations for lay-off periods. Finally, ¶ 8-1 of the
CBA lists paid holidays, ¶ 9-1 alludes to paid vacation time,
and ¶ 6-4 provides for paid meal periods with minimum
durations.
Resolution of the RICO claims will also require
interpretation of the CBA to determine how it applies, if it
does, to an issue which its express terms do not appear to
discuss: whether employees can claim all of their
compensable hours in their weekly timesheets, or whether
they must simply list time actually worked and await a
forensic recalculation of their pay.
These issues are not, as the dissent suggests, at 38–39,
merely “speculative” or “hypothetical.” Rather, they are
intrinsic to CET’s claims as pleaded and argued to the district
court and to us. Permitting the district court to proceed before
the grievance process has been exhausted would “eviscerate
a central tenet of federal labor-contract law under § 301 that
it is the arbitrator, not the court, who has the responsibility to
interpret the labor contract in the first instance.” Lueck,
471 U.S. at 220.
Notably, CET has not argued that its claims are unrelated
to the CBA. That is not surprising, for the subject of its claim,
the number of hours for which its employees are entitled to
claim payment, is at the core of an employment relationship
and is something a CBA could be expected to govern.
Instead, CET contends that the CBA is unambiguous. That is
22 COLUMBIA EXPORT TERMINAL V. ILWU
an argument that CET can make within the grievance process.
The claims cannot be resolved by mere reference to the CBA.
We thus conclude that CET’s RICO claims substantially
depend on interpretation of the CBA. The LMRA thus
precludes them and requires that federal courts ensure
“specific performance of promises to arbitrate grievances
under collective bargaining agreements.” Lincoln Mills, 353
U.S. at 451. Accordingly, we turn next to what, exactly, the
CBA promises.
C. The CBA’s arbitration provision applies to RICO
claims.
CET argues that even if § 301 could preclude its RICO
claims, it should have no preclusive effect in this instance
because the CBA’s arbitration provision does not contemplate
RICO claims and does not bind CET with regard to the ILWU
or the individually-named defendants. CET argues that the
CBA’s arbitration provision should be interpreted to exclude
any statutory claims or any disputes between the employer
and the ILWU umbrella organization, or between the
employer and the 154 individually-named defendants. These
arguments fail for several reasons.
CET’s preferred reading of the arbitration provision
directly contradicts the plain text of the CBA. By its own
terms, the CBA’s arbitration provision applies to “any
controversy or disagreement or dispute . . . as to the
interpretation, application, or violation” of “any” of its
provisions. ¶ 16-2. It then sets forth a process for the
resolution of “all grievances.” ¶ 16-4. The text of the CBA
does not say, as it could, that RICO—or any other statutory
claim—is excluded from the grievance process, even if it
COLUMBIA EXPORT TERMINAL V. ILWU 23
involves “the interpretation, application, or violation” of the
CBA.
Rather, the CBA explicitly contemplates a dispute
resolution mechanism covering the exact conduct alleged as
the basis of CET’s current claims. For example, Section XIV
lays out the standard of work expected of individual
employees (e.g., “not leaving their work station in advance of
the designated quitting time”) and goes on to state that “[a]ny
Employer may file with the union a complaint in writing
against any member of the grain section of the Union” and
allows the aggrieved employer to proceed before the Joint
Labor Relations Committee if it does not receive a
satisfactory response.
Further, the ILWU is a signatory to the agreement and is
capable of enforcing the agreement on its own behalf, and the
employees, through their bargaining representatives, are also
treated as parties to the agreement.
At most, CET’s preferred interpretation could create some
doubt as to the scope of the CBA’s grievance procedures.
Even so, “[t]he party contesting arbitrability bears the burden
of demonstrating how the language in the collective
bargaining agreement excludes a particular dispute from
arbitration.” Standard Concrete Prods., Inc. v. Gen. Truck
Drivers, Office, Food & Warehouse Union, Local 952,
353 F.3d 668, 674 (9th Cir. 2003) (quoting Phx. Newspaper,
Inc. v. Phx. Mailers Union Local 752, 989 F.2d 1077, 1080
(9th Cir. 1993)). Any “[d]oubts should be resolved in favor of
coverage.” Id. at 674 (citations omitted). CET, as the party
refuting the plain reading of the CBA’s scope, has not met its
burden of persuasion.
24 COLUMBIA EXPORT TERMINAL V. ILWU
The dissent reaches a different conclusion in large
because it disregards the presumption in favor of arbitration
under federal law. It contends, at 39, that the parties must
“expressly consent” to arbitrate RICO claims, citing Granite
Rock Co. v. Int’l Brotherhood of Teamsters, 561 U.S. 287,
298 n.6, 297 (2010). But it does not consider or account for
what else Granite Rock says.
Like this case, Granite Rock was a dispute between an
employer and a union. The CBA governing the relationship
between the parties expired in April 2004. Id. at 292. When
negotiations for a new CBA reached an impasse, the union
workers initiated a strike in June 2004. Id. Granite Rock and
the union ultimately reached an agreement on a new CBA on
July 2. Id. at 292–93. However, the new CBA did not include
a provision to hold the union and its members harmless for
any strike-related damages that the employer may have
incurred in the interim. Id. at 293. In an effort to secure the
waiver of liability, the local union, under the instruction of its
parent, the International Brotherhood of Teamsters (“IBT”),
resumed the strike even though the new CBA contained a no-
strike provision. Id. Granite Rock brought a § 301 action in
federal court seeking an injunction against the ongoing strike,
and seeking damages against both the local union and IBT.
Id. at 294. The strike ultimately ended in September, but
Granite Rock continued to seek damages. Id. at 294–95.
During the litigation, a factual dispute arose as to the date
that the new CBA became effective, with Granite Rock
claiming that the agreement was ratified by union members
on July 2, and the union claiming that it was ratified later, on
August 22. Id. at 295. The district court held that the issue
was for a court to decide, and submitted the question to a
jury, which reached a unanimous verdict that the local had
COLUMBIA EXPORT TERMINAL V. ILWU 25
ratified the CBA on July 2. Id. at 295. The Ninth Circuit
reversed, reasoning that the parties’ dispute was governed by
the CBA’s arbitration clause, which covered strike-related
claims. Id.
The Supreme Court granted certiorari, and reversed,
viewing the case as an opportunity to “reemphasize the
proper framework for deciding when disputes are arbitrable.”
Id. at 297. The Court began with the proposition that “[i]t 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 (internal quotation marks and brackets omitted). More
specifically, “where the dispute at issue concerns contract
formation, the dispute is generally for courts to decide.” Id.
But where, as here, the formation and validity of the contract
is not at issue, and the parties “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.” Id. at 298 (internal quotation marks and
emphasis omitted). In such cases, reviewing courts must
proceed 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 (internal quotation marks omitted).
26 COLUMBIA EXPORT TERMINAL V. ILWU
The parties in our case do not dispute that there is a valid
CBA and that the CBA includes a grievance provision under
which they have agreed to arbitrate some matters. The dissent
does not contend otherwise. Rather, there is only a dispute as
to whether the agreement’s scope covers CET’s RICO claims.
Granite Rock directs us, therefore, to resolve any doubts
concerning the scope of issues to be referred to arbitration in
favor of arbitration. That is the process that the district court
followed to reach the conclusion that we affirm.
We do not hold, as the dissent suggests, at 45, that RICO
claims are preempted by the LMRA and subject to arbitration
in every instance, simply by virtue of being an “employment-
related dispute.” Like state-law fraud claims, RICO claims
are not preempted or precluded by § 301 unless they are
(1) based on a right or duty created by the CBA, or (2) require
interpretation of the CBA. See, e.g., Operating Eng’rs
Pension Tr. v. Wilson, 915 F.2d 535, 537–39 (9th Cir. 1990)
(holding that § 301 does not preempt state tort claim for
fraud in the inducement of a CBA).4 Even then, reviewing
courts must still look to the scope of the CBA’s arbitration
provision to determine if those claims are arbitrable under the
framework established in Granite Rock.
The dissent’s argument that there is no presumption in
favor of arbitration, such that it must be established that the
parties agreed to each specific type of claim, is simply
inconsistent with Granite Rock, the authority it purports to
rely on, and decades of caselaw. See, e.g., United
Steelworkers of Am. v. Warrior & Gulf Navigation Co.,
4
Similarly, we have already held that federal labor law does not
preclude criminal RICO action. See, e.g., United States v. Thordarson,
646 F.2d 1323, 1331 (9th Cir. 1981).
COLUMBIA EXPORT TERMINAL V. ILWU 27
363 U.S. 574, 582–83 (1960) (“[Under § 301, an] order to
arbitrate the particular grievance should not be denied unless
it may be said with positive assurance that the arbitration
clause is not susceptible of an interpretation that covers the
asserted dispute. Doubts should be resolved in favor of
coverage.”)5
Finally, we note that CET is not permanently barred from
pursuing its claims. The dismissal by the district court was
without prejudice and properly so. CET is simply required to
exhaust the grievance process to which it agreed in the CBA
before it can proceed in federal court with those claims.
D. The Buell exception does not apply.
We address one final point. CET argues that another
precedent, Atchison, Topeka & Santa Fe Ry. Co. v. Buell,
480 U.S. 557 (1987), should control. We disagree.
In Buell, the Supreme Court held that an employee’s
claims under an independent federal statute, the Federal
Employers Liability Act, were not precluded by the RLA. Id.
at 565–67. In that decision, however, the Supreme Court
reiterated the general rule in favor of compelling arbitration
in labor disputes, while recognizing an exception for claims
based on federal statutes that contain specific substantive
guarantees for workers. Id. at 565 (“[N]otwithstanding the
5
See also Gateway Coal Co. v. United Mine Workers, 414 U.S. 368,
377–78 (1974); Nolde Bros. v. Bakery & Confectionery Workers Union,
430 U.S. 243, 254–55 (1977); AT&T Techs. v. Communs. Workers of Am.,
475 U.S. 643, 650 (1986); Inlandboatmens Union of the Pac. v. Dutra
Grp., 279 F.3d 1075, 1078 (9th Cir. 2002); SEIU v. St. Vincent Med. Ctr.,
344 F.3d 977, 985 (9th Cir. 2003); Int’l All. of Theatrical Stage Emple. v.
Insync Show Prods., Inc., 801 F.3d 1033, 1042 (9th Cir. 2015).
28 COLUMBIA EXPORT TERMINAL V. ILWU
strong policies encouraging arbitration, ‘different
considerations apply where the employee’s claim is based on
rights arising out of a statute designed to provide minimum
substantive guarantees to individual workers.’” (quoting
Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S.
728, 737 (1981))); see also id. (citing McDonald v. West
Branch, 466 U.S. 284 (1984) (CBA arbitration decision does
not preclude § 1983 claims); Barrentine, 450 U.S. 728 (CBA
arbitration decision does not preclude FLSA claims);
Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974) (CBA
arbitration decision does not preclude Title VII claims)).
This reading of Buell is consistent with decisions that
have stressed that Ҥ 301 cannot be read broadly to pre-empt
nonnegotiable rights conferred on individual employees [even
under] state law.” Livadas v. Bradshaw, 512 U.S. 107, 123
(1994). “Setting minimum wages, regulating work hours and
pay periods, requiring paid and unpaid leave, protecting
worker safety, prohibiting discrimination in employment, and
establishing other worker rights remains well within the
traditional police power of the states.” Alaska Airlines,
898 F.3d at 919. Therefore, “claims alleging violations of
such protections will not necessarily be preempted, even
when the plaintiff is covered by a CBA.” Curtis, 913 F.3d
at 1152.
We have consistently observed this exception. See, e.g.,
Felt v. Atchison, Topeka & Santa Fe Ry. Co., 60 F.3d 1416
(9th Cir. 1995) (RLA does not preclude Title VII claims);
Saridakis v. United Airlines, 166 F.3d 1272 (9th Cir. 1999)
(RLA does not preclude ADA claims).
The exception does not apply here, however. The current
claims have been brought by an employer, and the federal
COLUMBIA EXPORT TERMINAL V. ILWU 29
statute at issue, RICO, does not establish substantive
guarantees for workers.
III. Conclusion
We affirm the dismissal of this action without prejudice
by the district court. CET’s RICO claims are subject to the
CBA’s arbitration provision, and are precluded by LMRA
§ 301.
AFFIRMED.
IKUTA, Circuit Judge, dissenting:
The majority today makes two serious errors that will
throw our Labor Management Relations Act (LMRA)
jurisprudence into disarray. First, it holds that any federal
claim that is related to a collective-bargaining agreement
(CBA) is preempted or precluded by § 301 of LMRA and
must automatically be dismissed by the district court and sent
for arbitration. Majority at 22. This ruling mistakenly
applies our jurisprudence developed for Railway Labor Act
(RLA) claims to LMRA claims. Second, the majority
contradicts itself by holding that even if a federal claim is
“precluded,” a court “must still look to the scope of the
CBA’s arbitration provision to determine if those claims are
arbitrable.” Majority at 26. Here, the majority errs by
applying a presumption of arbitrability, even though the
Supreme Court has made clear that such a presumption does
not apply where the arbitration provision is unambiguous.
Granite Rock Co. v. Int’l Brotherhood of Teamsters, 561 U.S.
287, 301 (2010). In light of these and other errors, I dissent.
30 COLUMBIA EXPORT TERMINAL V. ILWU
I
The primary purpose of § 301 of LMRA is to ensure that
federal courts can apply federal common law to CBA
disputes even when a claim is pleaded as a state-law claim.
On its face, § 301 gives federal courts jurisdiction over
“[s]uits for violation of contracts between an employer and a
labor organization representing employees in an industry
affecting commerce.” 29 U.S.C. § 185(a).1 The Supreme
Court has interpreted this section as directing federal courts
to create and apply a federal common law for interpreting
CBAs, see Textile Workers Union v. Lincoln Mills of Ala.,
353 U.S. 448, 456 (1957), so as to ensure that uniform federal
labor law prevails over inconsistent interpretations of CBAs
by state courts, see Loc. 174, Teamsters, Chauffeurs,
Warehousemen & Helpers v. Lucas Flour Co., 369 U.S. 95,
104–05 (1962). We refer to state claims covered by § 301 of
LMRA as “preempted” and federal claims covered by § 301
of LMRA as “precluded.” Alaska Airlines, Inc. v. Schurke,
898 F.3d 904, 920 n.10 (9th Cir. 2018) (en banc). These
terms do not mean “typical conflict preemption” or
preclusion, id. at 922, but merely refer to claims that,
pursuant to § 301 of LMRA, must be decided in federal court
under federal labor law.
1
Section 301 of LMRA, 29 U.S.C. § 185(a), states in full:
Suits for violation of contracts between an employer
and a labor organization representing employees in an
industry affecting commerce as defined in this chapter,
or between any such labor organizations, may be
brought in any district court of the United States having
jurisdiction of the parties, without respect to the amount
in controversy or without regard to the citizenship of
the parties.
COLUMBIA EXPORT TERMINAL V. ILWU 31
If a plaintiff brings a state-law claim in state court, courts
apply a two-part inquiry, asking whether (1) the claim alleges
a breach of a CBA or (2) requires the interpretation of the
CBA. See, e.g., Lingle v. Norge Div. of Magic Chef, Inc.,
486 U.S. 399, 405–07 (1988); Schurke, 898 F.3d at 920. If
the court finds that § 301 of LMRA applies under this two-
part test, then the defendants may remove the case to federal
court through the jurisdictional doctrine of “complete
preemption,” which is “an exception to the well-pleaded
complaint rule.” Schurke, 898 F.3d at 923 n.15. Once the
federal court determines that removal under § 301 of LMRA
was proper, the jurisdictional inquiry for preemption is over.
By contrast, when a federal claim is brought in federal court
in the first instance, no jurisdictional inquiry under § 301 of
LMRA is necessary. Therefore, in this context, § 301 has
little work to do.2
Once a claim (state or federal) is properly in federal court,
the court’s inquiry under LMRA is, at its core, a question of
contract interpretation. See id. at 918 n.7.3 If the claim
2
Indeed, given the limited nature of LMRA’s impact in this context,
a sister circuit has concluded that “the motivating purpose of § 301
preemption simply does not apply” to federal claims. Watts v. United
Parcel Serv., Inc., 701 F.3d 188, 190–93 (6th Cir. 2012). We have not
directly ruled on this point. Cf. Schurke, 898 F.3d at 920 & n.10.
3
Although the majority claims that other circuits apply a
“preemption” or “preclusion” test to consider federal claims in the context
of labor disputes, Majority at 18 n.3, the LMRA cases cited by the
majority merely determined that an employee’s Fair Labor Standards Act
claims required an interpretation of the CBA, and therefore were subject
to LMRA’s statute of limitations. See Vadino v. A. Valey Eng’rs, 903
F.2d 253, 266 (3d Cir. 1990); Martin v. Lake Cnty. Sewer Co., 269 F.3d
673, 679 (6th Cir. 2001). These cases do not affect the conclusion that,
after federal jurisdiction exists, we are tasked only with deciding a
32 COLUMBIA EXPORT TERMINAL V. ILWU
alleges a breach of the CBA or requires interpretation of the
CBA, then the federal court need only read, apply, and
enforce the CBA, including any applicable arbitration
provision. There is no “presumption that labor disputes are
arbitrable whenever they are not expressly excluded from an
arbitration clause.” Granite Rock, 561 U.S. at 301 n.8. If the
CBA or labor contract does not require that the dispute be
resolved by arbitration, then the court must resolve the
dispute itself by applying the terms of the CBA pursuant to
federal common labor law. See, e.g., Painting & Decorating
Contractors Ass’n v. Painters & Decorators Joint Comm.,
707 F.2d 1067, 1070–72 (9th Cir. 1983).
This contractual focus differentiates LMRA from the
RLA, 45 U.S.C. §§ 151–65, which covers the railroad and
airline industries. The standard for determining when a state-
law claim is preempted by the RLA is “virtually identical to
the pre-emption standard the Court employs in cases
involving § 301 of the LMRA.” Hawaiian Airlines, Inc. v.
Norris, 512 U.S. 246, 260 (1994). But if the RLA’s dispute-
resolution provisions apply to a claim, then the statute itself
“requires submission of such disputes to internal dispute-
resolution processes and then to a division of the National
Adjustment Board or an arbitration board selected by the
parties.” Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d
1241, 1245 (9th Cir. 2009). Because the text of the RLA
mandates arbitration of any covered claim, it provides no
guidance in determining whether a claim precluded by
LMRA must be arbitrated. Cf. Hubbard v. United Airlines,
question of contract interpretation to determine whether the federal claims
must be arbitrated. See Granite Rock, 561 U.S. at 310–11.
COLUMBIA EXPORT TERMINAL V. ILWU 33
Inc., 927 F.2d 1094, 1097–98 (9th Cir. 1991), abrogated in
part, Norris, 512 U.S. at 263 n.9.4
Here, Columbia Export Terminal (CET) brought federal
claims in federal court, so no jurisdictional inquiry is required
to ensure the propriety of removing the case from state court.
And because § 301 of LMRA applies, rather than the RLA,
this case presents only a question of contract interpretation,
see Granite Rock, 561 U.S. at 311, and we must determine
whether CET’s claims as pleaded are subject to the CBA’s
grievance and arbitration procedures. In short, the only
question at issue here is whether CET’s complaint raises
claims that the parties intended to be decided in the arbitral
forum established by the CBA among the parties.5
Accordingly, to the extent the majority holds that if a federal
claim is “grounded in the provisions of a CBA or requiring
interpretation of a CBA,” Majority at 14, then the claim is
4
Thus, the majority’s reliance on RLA cases that required federal
RICO claims to go to RLA-mandated adjustment boards, Majority at 18
& n.3, is inapposite, as these cases do not provide guidance on the
question whether LMRA can “preclude” CET’s RICO claims. Cf.
Underwood v. Venango River Corp., 995 F.2d 677, 685 (7th Cir. 1993),
overruled in part, Westbrook v. Sky Chefs, Inc., 35 F.3d 316, 317–18 (7th
Cir. 1994). And the majority’s reliance on ERISA cases involving RLA-
mandated arbitration proves even less persuasive, because ERISA itself
disclaims any effect on or conflict with earlier enacted federal laws. See
29 U.S.C. § 1144(d).
5
The majority implicitly acknowledges that the only question here is
whether the parties agreed to arbitrate the types of claims raised in CET’s
complaint. Thus, the majority explains that the “LMRA requires disputes
arising from the CBA to be funneled, if so required by the CBA, to
arbitration,” Majority at 17 n.2, and the majority's “preclusion” analysis
is merely intended to “direct the [federal statutory claim] to the proper
adjudicator,” Majority at 17.
34 COLUMBIA EXPORT TERMINAL V. ILWU
precluded by § 301 of LMRA and must be dismissed by the
district court for arbitration, Majority at 22, it is wrong.
II
After consuming multiple pages with its theory that RICO
claims are “precluded by § 301” and subject to the two-part
test for preemption, Majority at 12–22, the majority suddenly
shifts gear and indicates that this conclusion is irrelevant,
because, even after the two-step preemption test, “reviewing
courts must still look to the scope of the CBA’s arbitration
provision to determine if those claims are arbitrable under the
framework established in Granite Rock.” Majority at 26.
Although this conclusion is correct (and makes the majority’s
lengthy preclusion analysis mere dicta), the majority errs by
misunderstanding Granite Rock’s analysis of how courts must
determine whether an arbitration provision in a CBA covers
the claim at issue.
A
In Granite Rock, the Ninth Circuit made the same mistake
the majority makes here: it applied the presumption that “any
doubts concerning the scope of arbitral issues should be
resolved in favor of arbitration,” and erroneously held that a
LMRA dispute was governed by a CBA’s arbitration clause.
561 U.S. at 298. The Supreme Court reversed. As Granite
Rock explained, the Supreme Court has never “held that
courts may use policy considerations as a substitute for party
agreement,” id. at 303, or “held that this policy overrides the
principle that a court may submit to arbitration ‘only those
disputes . . . that the parties have agreed to submit,’” id.
at 302 (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S.
938, 943 (1995)). Rather, a court must apply “the proper
COLUMBIA EXPORT TERMINAL V. ILWU 35
framework for deciding when disputes are arbitrable.” Id.
at 297.
Under the Granite Rock framework, a court must first use
ordinary principles of contract interpretation to determine if
the arbitration provision is “best construed to encompass the
dispute.” Id. at 303. “[A] court may order arbitration of a
particular dispute only where the court is satisfied that the
parties agreed to arbitrate that dispute.” Id. at 297. This
means that a court must first “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.” Id.
Then, only “where a validly formed and enforceable
arbitration agreement is ambiguous about whether it covers
the dispute at hand,” may a court apply “the presumption of
arbitrability” and ask whether the arbitration provision is
reasonably construed as covering the asserted dispute. Id.
at 301. Even if the court concludes the arbitration provision
is susceptible to such an interpretation, and therefore the
presumption of arbitrability applies, a court may order
arbitration “only where the presumption is not rebutted.” Id.
B
Applying this framework here, we begin by construing
the text of the CBA, using ordinary principles of contract
interpretation, to determine which claims must be decided by
the CBA’s grievance and arbitration procedures. Section
XVI of the CBA provides “procedures for handling
grievances and disputes.” The CBA defines a grievance as
follows:
36 COLUMBIA EXPORT TERMINAL V. ILWU
A grievance shall be defined as any
controversy or disagreement or dispute
between the applicable ILWU Local Union
and the Employer for the particular grain
elevator(s) involved as to the interpretation,
application, or violation of any provision of
this Agreement.
The CBA provides that all grievances between the local
unions and CET must be resolved pursuant to the procedures
in Section XVI of the CBA. Under Section XVI, the parties
must attempt to resolve the grievance informally. If it is not
resolved, it must be referred to a “Joint Labor Relations
Committee” comprised of representatives from “the
applicable ILWU Local Union” and “the applicable
Employer.” The committee has “the power and duty to
investigate and adjudicate all grievances or disagreements or
disputes arising under this Agreement.” If the committee is
unable to resolve the dispute, then the committee defines “the
question or questions in dispute,” and either party may refer
the question “to an impartial arbitrator.” The CBA then
outlines the procedure for conducting arbitration. Finally,
CET “shall also have the right to file a grievance and to
follow the above grievance procedure in an effort to resolve
it.”
C
After reviewing the relevant provisions of the CBA
regarding which claims are subject to its grievance and
arbitration procedures, we next consider the nature of CET’s
claims, beginning with an accurate description of CET’s
claims “as pleaded.” See Schurke, 898 F.3d at 924 (holding
that, in determining whether a state law claim requires the
COLUMBIA EXPORT TERMINAL V. ILWU 37
interpretation of a CBA, a federal court must consider the
claim “as pleaded”). According to the operative complaint,
CET employs union-represented workers to load grain for
international shipping at a terminal in Portland, Oregon
(Terminal 5). CET sued the International Longshore and
Warehouse Union (ILWU) and approximately 160 individual
hourly workers who are members of two local labor
organizations chartered by ILWU. According to the
complaint, the defendants, “with specific intent to defraud,
jointly entered into a conspiracy and scheme” to “routinely
and systematically, over a period of more than four years,”
under-staff jobs and submit time sheets “indicating time
worked for employees who did not work, and were not even
at Terminal 5, for some or all of the indicated time.” The
complaint alleged that workers “billed hours and received
unearned payment” for time claimed on their time sheets
when they were not present at Terminal 5. Among other
practices, workers split shifts “with one working the first half
and the other working the second half, yet submitting time
sheets indicating falsely that both had worked the full shift.”
Another practice involved workers who were present at the
terminal submitting time sheets showing that an absent
worker, who had not showed up, “worked a full shift.” The
complaint alleged that through these fraudulent practices,
workers illegally obtained over $5 million from CET.
Based on these factual allegations, the complaint brought
seven RICO claims.6 The complaint alleged that each
6
These claims include allegations that the defendants invested income
derived from a pattern of racketeering activity in violation of 18 U.S.C.
§ 1962(a), that ILWU acquired an indirect interest in and indirect control
of CET through a pattern of racketeering activity in violation of 18 U.S.C.
§ 1962(b), that the defendants participated in the conduct of the local
38 COLUMBIA EXPORT TERMINAL V. ILWU
submission of a fraudulent time sheet constituted a predicate
act of mail or wire fraud under 18 U.S.C. § 1341 and § 1343,
and that the defendants engaged in a pattern of racketeering
activity.
D
The key question is whether CET’s claims, as pleaded,
must be arbitrated under the CBA. To make this
determination, we apply principles of contract interpretation,
as informed by the common law of federal labor law and
labor arbitration precedents. See Standard Concrete Prods.,
Inc. v. Gen. Truck Drivers, Office, Food & Warehouse Union,
Loc. 952, 353 F.3d 668, 673–75 (9th Cir. 2003); see also M
& G Polymers USA, LLC v. Tackett, 574 U.S. 427, 435
(2015); Granite Rock, 561 U.S. at 298 n.6.
Federal common law provides important guidance for
interpreting the key terms in the CBA. Under federal
common law, we construe the word “interpretation” narrowly
as meaning “something more than ‘consider,’ ‘refer to,’ or
‘apply.’” Schurke, 898 F.3d at 921 (quoting Balcorta v.
Twentieth Century-Fox Film Corp., 208 F.3d 1002, 1108 (9th
Cir. 2000)). Because a plaintiff’s claim, “as pleaded,” drives
the analysis, there must be an “active dispute” as to the
interpretation of a CBA provision and not simply a
“‘hypothetical connection between the claim and the terms of
the CBA.’” Schurke, 898 F.3d at 921 (quoting Cramer v.
Consol. Freightways, Inc., 255 F.3d 683, 691 (9th Cir. 2001)
(en banc)). A court must wait until an active dispute arises;
unions through a pattern of racketeering activity in violation of 18 U.S.C.
§ 1962(c), and that the defendants conspired to violate the prior three
sections in violation of 18 U.S.C. § 1962(d).
COLUMBIA EXPORT TERMINAL V. ILWU 39
it cannot rely on the “speculative possibility” of an
interpretive dispute or the “possibility that things could
change down the road.” McCray v. Marriott Hotel Servs.,
Inc., 902 F.3d 1005, 1013 (9th Cir. 2018). Nor does an
interpretive dispute exist merely because a defendant relies
on CBA provisions as a defense to a plaintiff’s claim. See,
e.g., Ward v. Circus Circus Casinos, Inc., 473 F.3d 994,
997–99 (9th Cir. 2007); Detabali v. St. Luke’s Hosp.,
482 F.3d 1199, 1203–04 (9th Cir. 2007); Matson v. United
Parcel Serv., Inc., 840 F.3d 1126, 1134–35 (9th Cir. 2016).
Using ordinary principles of contract interpretation, it is
immediately apparent that the arbitration provision in the
CBA does not cover CET’s claims against ILWU. The
CBA’s interpretation of “grievance” is limited to
controversies, disagreements, or disputes “between the
applicable ILWU Local Union and the Employer for the
particular grain elevator(s).” Therefore, it is unambiguous
that CET’s claims against ILWU falls outside the definition
of a grievance. See, e.g., Standard Concrete, 353 F.3d at
674–75. Accordingly, CET has no obligation to arbitrate its
claims against ILWU. The majority errs in holding
otherwise. Majority at 22–27.
Second, it is immediately apparent that the parties did not
agree to arbitrate federal statutory claims in general, or RICO
claims in particular. The parties to the CBA could have
agreed to do so, because courts will enforce agreements to
arbitrate federal statutory claims, see 14 Penn Plaza LLC v.
Pyett, 556 U.S. 247, 263–64 (2009). But, for such an
agreement to be enforceable, the parties must expressly
consent to such a provision, see id.; Granite Rock, 561 U.S.
at 300, and any CBA requirement to arbitrate such claims
“must be particularly clear,” Wright v. Universal Mar. Serv.
40 COLUMBIA EXPORT TERMINAL V. ILWU
Corp., 525 U.S. 70, 79–80 (1998). The CBA’s grievance and
arbitration provisions here do not expressly agree to arbitrate
RICO claims, or any other statutory claims, or authorize the
arbitrators to resolve such claims.
Therefore, unless the CBA’s arbitration provision is
ambiguous, it would apply to CET’s claims only if the CBA’s
definition of “grievance” is best construed as covering the
claims. The word “grievance” is defined in the CBA as “any
controversy or disagreement or dispute” involving “the
interpretation, application, or violation of any provision of
this Agreement.” Under federal labor law, a dispute over “the
interpretation or application” of a CBA refers to “a claim
arising out of a CBA.” Norris, 512 U.S. at 254. Because
CET does not allege a violation of the CBA, and there is no
dispute over how a CBA provision applies to CET’s claims,
the key question is whether litigating CET’s RICO claim
“requires interpretation of a CBA.” Schurke, 898 F.3d at 921.
As noted above, under federal common labor law,
“‘interpretation’ is construed narrowly,” and covers claims
only “to the extent there is an active dispute over ‘the
meaning of contract terms.’” Id. (quoting Livadas v.
Bradshaw, 512 U.S. 107, 124 (1994)).
Based on a straightforward application of ordinary
contract interpretation principles, resolving CET’s RICO
claims does not require interpretation of the CBA. The
complaint simply alleges that the individual workers
submitted fraudulent time sheets claiming hours worked at
Terminal 5 during periods in which they were not physically
present at the terminal. Proving the elements of mail and
wire fraud here requires only a factual inquiry into whether
employees claimed they were working when they were not
physically on site. “The need for a ‘purely factual inquiry
COLUMBIA EXPORT TERMINAL V. ILWU 41
that does not turn on the meaning of any provision of a
collective-bargaining agreement,’ however, is not cause for
preemption under section 301,” Burnside v. Kiewit Pac.
Corp., 491 F.3d 1053, 1072 (9th Cir. 2007) (quoting Lingle,
486 U.S. at 407) (cleaned up), meaning that a purely factual
inquiry does not require an interpretation of a CBA under our
two-part test.
The defendants’ arguments to the contrary fail. Because
it is not possible to explain how CET’s claims, “as pleaded,”
require construing the CBA, Schurke, 898 F.3d at 924, the
defendants take the easier route of recharacterizing the
complaint. While CET’s complaint alleges that defendants
conspired to defraud CET by making false claims about their
presence for work at Terminal 5, the defendants reinvent the
complaint as alleging instead that CET overpaid the
individual defendants for not working hard enough while on
site. The majority follows this same approach, pretending
that CET is merely disputing whether defendants billed hours
that were or were not “expressly authorized by CET and
charged in accordance with the CBA.” Majority at 20.
Having recharacterized CET’s complaint in this way, the
defendants then argue that interpretation of the CBA is
necessary to address their defense that the CBA’s pay
guarantees, minimum staffing levels, longstanding industry
practices, and the parties’ bargaining discussions justify the
employees’ wage claims, because employees are entitled to
compensation for certain time not worked. The majority
again echoes this approach, identifying hypothetical defenses
that the defendants could raise to “excuse the workers from
being present at the time of work reported on the timesheets”
or to “explain why workers are compensated for time not
actually worked.” Majority at 20. Indeed, the majority goes
42 COLUMBIA EXPORT TERMINAL V. ILWU
so far as to suggest there could be an interpretive dispute over
whether defendants were entitled to compensation for paid
holidays.7 Majority at 21. The majority concludes that the
mere existence of these hypothetical defenses in the CBA
means that adjudication of CET’s re-imagined claims will
substantially depend on interpretation of the CBA. Majority
at 20–22.
These arguments are meritless. We must consider CET’s
claims “as pleaded,” and those claims allege only that
defendants engaged in fraud by claiming they were present at
Terminal 5 when they were not. No contract terms in the
CBA authorize that sort of fraud, so interpretation of the CBA
is not required. The defendants’ possible future defenses do
not turn CET’s claims into “grievances” as defined in the
CBA. The Supreme Court has made clear that a party cannot
manufacture a CBA dispute through raising a defense. See
Caterpillar, Inc v. Williams, 482 U.S. 386, 398–99 (1987);
Schurke, 898 F.3d at 921. While defendants may defend
themselves on the ground that CET’s allegations are factually
erroneous (for instance, because workers arrived at the
terminal but then were released from work as permitted under
the CBA, because weather prevented work, because workers
get a paid holiday for Christmas Day, or because CET could
not provide sufficient work), such factual questions or
excuses do not create any disputes about the interpretation of
CBA provisions at this stage of the litigation. Nor does the
defendants’ defense that the alleged fraud did not result in
overbilling raise an interpretive dispute. As our en banc court
has explained, a defendant’s allegation of “a hypothetical
7
Given that the CBA helpfully defines Christmas Day as December
25, there is unlikely to be an interpretive dispute over the defendants’
entitlement to payment for this holiday.
COLUMBIA EXPORT TERMINAL V. ILWU 43
connection between the claim and the terms of the CBA is not
enough” to conclude that the claim “cannot be resolved
without interpreting the applicable CBA.” Cramer, 255 F.3d
at 691.
The majority’s further arguments that CET’s claims are
grievances under the CBA are meritless. First, the majority
places weight on CET’s alleged failure to argue “that its
claims are unrelated to the CBA.” Majority at 21. It then
argues that CET’s claims are related to the CBA because “the
subject of its claim, the number of hours for which its
employees are entitled to claim payment, is at the core of an
employment relationship.” Majority at 21. Factually, of
course, the majority is wrong: CET argued on appeal that
“the district court erred in finding that CET’s RICO claim
required substantial analysis of the CBA,” because “CET’s
complaint makes no reference to the CBA,” “does not rely
on” the CBA, and the complaint “alleges simply that the
ILWU and Members submitted fraudulent timecards claiming
they worked time that they did not work.” But more
important, for purposes of determining whether CET’s claims
are “grievances” subject to resolution under the CBA, the
existence of an employment relationship between CET and
the defendants is not dispositive. As the Supreme Court has
explained, “not every dispute concerning employment, or
tangentially involving a provision of a collective-bargaining
agreement, is pre-empted by § 301 or other provisions of the
federal labor law.” Caterpillar, 482 U.S. at 396 n.10 (quoting
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985)).
CET must only argue (as it did persuasively) that resolving its
RICO claims does not require resolving any active
interpretive dispute as to the particular meaning of CBA
provisions. Our task, in turn, is merely to consider whether
CET’s claims are “grievances” for purposes of the CBA.
44 COLUMBIA EXPORT TERMINAL V. ILWU
Second, the majority argues that CET’s claims are
“grievances” covered by the CBA because the CBA
provisions “could excuse” workers from being present or
“could explain” compensation for time not worked. Majority
at 20. But the CBA does not define a “grievance” as
including possible defenses that may be raised by a
defendant. The majority’s ruling is contrary to federal
common labor law, which holds that unless there is a
currently existing, active dispute requiring interpretation of
the CBA, such a claim does not require interpretation of the
CBA. See Cramer, 255 F.3d at 691–92. Rather, “we have
held that a CBA provision does not trigger preemption when
it is only potentially relevant to the state law claims, without
any guarantee that interpretation or direct reliance on the
CBA terms will occur.” Humble v. Boeing Co., 305 F.3d
1004, 1010 (9th Cir. 2002); see also Dent v. Nat’l Football
League, 902 F.3d 1109, 1116–17 (9th Cir. 2018) (same). If
CET broadens its theory of liability later in litigation, the
defendants may again raise an argument under § 301 of
LMRA, and the court can then decide whether to refer
interpretive disputes to the CBA’s arbitration procedures at
that time. See McCray, 902 F.3d at 1013 & n.3. Likewise, if
disputes arise in the calculation of damages, then relevant
interpretive disputes may be referred to the CBA’s arbitration
procedures. See, e.g., Lingle, 486 U.S. at 413 n.12; Schurke,
898 F.3d at 922 & n.14. But because no active interpretive
dispute exists at this time as CET’s claims are pleaded, these
claims are not subject to resolution under the CBA.8 Nor
8
Therefore, the majority has it backward in saying that CET must
first “exhaust the grievance process” and then return to federal court with
its claims. Majority at 27. Moreover, the majority’s promise that CET
can return to federal court after arbitration is an empty one. This promise
would make sense if the majority held it was necessary for arbitration to
COLUMBIA EXPORT TERMINAL V. ILWU 45
would analogous state law claims be removable under § 301
of LMRA if CET had raised the claims in state court.
Because CET’s RICO claims are not a “dispute . . . as to
the interpretation, application, or violation of any provision
of” the CBA, there is no “grievance,” as defined in the CBA.
The arbitration agreement is not “ambiguous about whether
it covers the dispute at hand,” Granite Rock, 561 U.S. at 310,
because the CBA is not susceptible to an interpretation that
CET’s RICO claims require an interpretation of the CBA.
There is no ambiguity that would give rise to a presumption
of arbitrability. Because “a court may submit to arbitration
only those disputes that the parties have agreed to submit,” id.
at 302 (cleaned up), the majority errs in holding that CET’s
claims are subject to the CBA’s grievance and arbitration
procedure.
E
The majority opinion is both erroneous and internally
inconsistent. First, it presents an erroneous theory of LMRA
preclusion. Under the majority’s new rule, almost any
employment-related dispute between parties covered by a
CBA is precluded and sent to arbitration, even though the
Supreme Court has expressly disclaimed this approach and,
unlike the RLA, LMRA itself does not require arbitration of
resolve a key issue in CET’s RICO claims, and then CET could litigate the
remainder. Cf. Schurke, 898 F.3d at 922 & n.14. But because the
majority does not and cannot do so—because there is no such key
issue—its promise is empty.
46 COLUMBIA EXPORT TERMINAL V. ILWU
every precluded claim. See Schurke, 898 F.3d at 918 n.7.9
Second, even though the majority goes on to hold that it
remains necessary to determine whether CET’s claims are
covered by the arbitration provision, the majority fails to
apply the Granite Rock framework correctly, and instead
holds that the CBA applies based on meritless, hypothetical
connections to CBA provisions. Cf. Schurke, 898 F.3d
at 921; Cramer, 255 F.3d at 691–92. This approach is
directly contrary to the Supreme Court’s labor arbitration
precedents, which prevent a court from compelling arbitration
of disputes that the parties have not agreed to arbitrate.
The majority offers the reassurance that workers, at least,
will not be compelled to arbitrate all their disputes, because
our cases allow workers to litigate claims based on statutes
that provide “substantive guarantees for workers.” Majority
at 27–28. Under this rationale, only employers will have to
arbitrate their claims without their consent. But the Supreme
Court’s labor arbitration precedent does not permit this
lopsided interpretation of LMRA. If the CBA expressly
requires the arbitration of a federal statutory claim, the
worker is bound to arbitration, regardless of any “substantive
guarantee.” See Penn Plaza, 556 U.S. at 256 n.5, 263–64.
And by the same token, if the employer did not consent to
arbitrate a federal statutory claim, then no labor policy
considerations can require the employer to do so. See
Granite Rock, 561 U.S. at 299, 303.
9
The majority disputes this characterization, Majority at 26–27, but
the majority points to no basis for its conclusion that CET’s RICO claims
are “substantially dependent on interpretation of the CBA” (Majority
at 20) other than its reasoning that the defendants who allegedly defrauded
CET were parties to a CBA and can now manufacture CBA-based
defenses to compel arbitration.
COLUMBIA EXPORT TERMINAL V. ILWU 47
Taken together, the majority’s many misstatements of law
upend the carefully limited scope of § 301 of LMRA that our
circuit has so consistently upheld and give future defendants
new, previously rejected, ways of depriving CBA-covered
plaintiffs of their rights to a judicial forum and to vindication
of independent statutory rights. I therefore dissent.
BENNETT, Circuit Judge, joined by IKUTA, R. NELSON,
BUMATAY, and VANDYKE, Circuit Judges, dissenting
from the denial of rehearing en banc:
Our Labor Management Relations Act (“LMRA”) § 301
preemption doctrine developed to prevent state courts from
interpreting collective bargaining agreements (“CBAs”)
inconsistently under state law. Teamsters v. Lucas Flour Co.,
369 U.S. 95, 104 (1962) (“[I]n enacting [§] 301 [of the
LMRA,] Congress intended doctrines of federal labor law
uniformly to prevail over inconsistent local rules.” (emphasis
added)). We have never applied that reasoning to preempt (or
“preclude”) a federal statutory claim. But in Alaska Airlines
Inc. v. Schurke, we erroneously suggested in a footnote that
§ 301 “precludes” federal statutory claims in the same way it
preempts state law claims. 898 F.3d 904, 920 n.10 (9th Cir.
2018) (en banc) (“The same principle [of LMRA preemption]
applies to federal law claims, although they might better be
described as ‘precluded.’”). Led astray by this footnote, the
panel entrenches the position that § 301 can preclude federal
statutory claims.
But the footnote was wrong, and the panel is wrong.
“Whether called ‘preemption’ or ‘preclusion,’” Op. 18, the
LMRA does not bar a federal statutory claim brought in
48 COLUMBIA EXPORT TERMINAL V. ILWU
federal court. Today, the barred claim is a Racketeer
Influenced and Corrupt Organizations Act (“RICO”) claim
alleging a $5.3 million mail and wire fraud racketeering
scheme. Tomorrow, the barred claim may be based on the
Americans with Disabilities Act (“ADA”) or Title VII of the
Civil Rights Act of 1964. We should have reheard this case
en banc to excise this erroneous preclusion notion from our
jurisprudence, and I respectfully dissent from our failure to
do so.
I start with what ought to be a very straightforward
premise—preclusion of federal claims is inconsistent with the
purpose of § 301, which is primarily a jurisdictional statute
intended to ensure the uniform interpretation of CBAs. And
because preclusion of federal statutory claims is so divorced
from the purpose of § 301, the panel’s idea of preclusion
creates absurd and confusing results, as this case shows. But
the most fundamental problem is the most obvious. A statute
passed by Congress to help maintain a uniform body of
federal labor law does not somehow nullify a different statute
passed by Congress to, among other objectives, eradicate
organized attempts to defraud through a pattern of
racketeering activity. Cf. Alexander v. Gardner-Denver Co.,
415 U.S. 36, 49–50 (1974) (“In submitting his grievance to
arbitration, an employee seeks to vindicate his contractual
right under a collective-bargaining agreement. By contrast,
in filing a lawsuit under Title VII, an employee asserts
independent statutory rights accorded by Congress.”).
Though this is the panel’s most fundamental error, it is
not the only one. The panel applies a presumption of
arbitrability contrary to Supreme Court precedent and creates
an agreement to arbitrate RICO claims, even though the
COLUMBIA EXPORT TERMINAL V. ILWU 49
parties never signed such an agreement.1 By doing so, the
panel invents a new rule. Absent an explicit arbitration
exclusion clause, every issue that could relate to a CBA must
be arbitrated—even if the parties never specifically agreed to
arbitrate that issue. Contra Granite Rock Co. v. Int’l Bhd. of
Teamsters, 561 U.S. 287, 297 (2010) (“[A] court may order
arbitration of a particular dispute only where the court is
satisfied that the parties agreed to arbitrate that dispute.”).
The panel also does not provide any coherent principle that
limits its new rule. If alleged fraud must be arbitrated as the
panel claims, which other RICO predicate acts and federal
statutory claims must be arbitrated? We should have reheard
this case en banc to correct all these errors.
I.
The purpose of LMRA preemption of state law claims is
to prevent divergent interpretations of a CBA. “The interests
in interpretive uniformity and predictability that require that
labor-contract disputes be resolved by reference to federal
law also require that the meaning given a contract phrase or
term be subject to uniform federal interpretation.” Allis-
Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985). And our
test for § 301 preemption reflects that purpose: state law
claims are preempted if they are “founded directly on rights
created by collective-bargaining agreements” or are
“substantially dependent on analysis of a [CBA].”
Caterpillar Inc. v. Williams, 482 U.S. 386, 394 (1987)
1
Even if plaintiff Columbia Export Terminal, LLC (“CET”) and the
International Longshore and Warehouse Union (“ILWU”) had contracted
to arbitrate such a dispute, which they did not, CET’s RICO claim would
still not be precluded.
50 COLUMBIA EXPORT TERMINAL V. ILWU
(quotation marks omitted); see also, e.g., McCray v. Marriott
Hotel Servs., Inc., 902 F.3d 1005, 1010 (9th Cir. 2018).
When a plaintiff brings federal claims in federal court, the
need for LMRA preemption disappears. The supposed
preclusion inquiry is whether the application of a federal
statute would be plainly inconsistent with or frustrate the
purpose of another federal statute. See United States v. Est.
of Romani, 523 U.S. 517, 533 (1998). But how can any
federal claim (much less a RICO claim) brought in federal
court cause interpretations or applications of a CBA that
conflict with § 301? A federal claim brought in federal court
will necessarily be consistent with § 301’s jurisdictional rule.
And even if adjudicating a federal claim requires
interpretation of a CBA, the court would simply apply federal
common law, thus eliminating the risk of divergent
interpretations of the CBA. See Textile Workers Union of
Am. v. Lincoln Mills of Ala., 353 U.S. 448, 451, 456 (1957).
As Judge Ikuta noted in her dissent, Ҥ 301 has little work to
do” here. Dissent, 31.
The panel conflates LMRA and Railway Labor Act
(“RLA”) preemption2 in an attempt to justify the untenable
position that “[w]hether called ‘preemption’ or ‘preclusion,’
[this] approach applies whether the conflicting statute is a
federal or state provision.” Op. 18. The panel claims that
“[i]n Hubbard [v. United Airlines, Inc., 927 F.2d 1094, 1098
(9th Cir. 1991)] . . . we held that the RLA, which . . .
preceded the enactment of RICO, preempted a fraud claim
under RICO.” Op. 18. The panel also claims that Atchison,
2
“The RLA establishes a comprehensive scheme governing labor
relations on railroads and airlines.” Barthelemy v. Air Lines Pilots Ass’n,
897 F.2d 999, 1007 (9th Cir. 1990) (per curiam).
COLUMBIA EXPORT TERMINAL V. ILWU 51
Topeka & Santa Fe Railway Co. v. Buell, 480 U.S. 557
(1987), “reiterated the general rule in favor of compelling
arbitration in labor disputes.” Op. 27 (quoting 480 U.S. at
565–67).
But there is no basis to the panel’s claim that preemption
under the RLA and LMRA is the same, or its claim that this
incorrect premise somehow allows the LMRA to preclude
federal statutory claims. Although both “RLA and LMRA
§ 301 preemption are, in effect, a kind of ‘forum’
preemption,” Alaska Airlines, 898 F.3d at 922, the two
statutes are very different. In the RLA, Congress established
a mandatory arbitral forum superintended by the National
Railroad Adjustment Board for disputes relating to the
formation, interpretation, or application of relevant CBAs.
Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252 (1994);
Union Pac. R.R. Co. v. Bhd. of Locomotive Eng’rs &
Trainmen Gen. Comm. of Adjustment, 558 U.S. 67, 74 (2009).
Thus, some federal claims brought in federal court that
involve the interpretation of such CBAs are in the wrong
forum. See Hubbard, 927 F.2d at 1098.
In contrast, § 301 was enacted to ensure “specific
performance of promises to arbitrate grievances under
[CBAs].” Lincoln Mills, 353 U.S. at 451; see id. at 452
(“Once parties have made a collective bargaining contract,
the enforcement of that contract should be left to the usual
processes of the law and not to the National Labor Relations
Board.” (quoting H.R. Conf. Rep. No. 510, 80th Cong., 1st
Sess., p.42)). That is, the LMRA itself does not prescribe the
52 COLUMBIA EXPORT TERMINAL V. ILWU
arbitration mechanism that parties must use, but merely
facilitates the enforcement of CBAs through federal courts.3
Unlike the RLA, the LMRA “does not mandate
arbitration, nor does it prescribe the types of disputes to be
submitted to arbitration under bargaining agreements.”
Hawaiian Airlines, 512 U.S. at 263 n.9. So even though we
use the same test to determine preemption under the RLA and
the LMRA, the results are different. When a claim is
preempted under the RLA, the plaintiff’s claim is sent to the
RLA’s mandatory arbitration process. See Hawaiian
Airlines, 512 U.S. at 252–53. But when a state law claim is
preempted under the LMRA, it “must either be treated as a
§ 301 claim” under the complete preemption doctrine “or
dismissed as pre-empted by federal labor-contract law,” thus
extinguishing the state law claim. Allis-Chalmers, 471 U.S.
at 220. If the claim is treated as a federal common law
contract claim, we might dismiss it “for failure to make use
of the grievance procedure established in the collective-
bargaining agreement.” Id. at 220–21 (emphasis added).4
But there is no basis for precluding a federal statutory claim
under the LMRA or RLA. Indeed, contrary to the panel’s
3
Of course, a federal court may be unable to decide a federal claim
if the parties have agreed to arbitrate it. But an agreement to arbitrate a
claim does not mean the claim is preempted or precluded. A party, for
example, cannot bring any claim that the party has released or that is
barred by issue or claim preclusion. See, e.g., Lucky Brand Dungarees,
Inc. v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589, 1594 (2020). But that
doesn’t mean the claim is “precluded,” as the panel uses the term.
4
“As a general rule in cases to which federal law applies, federal
labor policy requires that individual employees wishing to assert contract
grievances must attempt use of the contract grievance procedure agreed
upon by employer and union as the mode of redress.” Republic Steel
Corp. v. Maddox, 379 U.S. 650, 652 (1965) (emphasis added).
COLUMBIA EXPORT TERMINAL V. ILWU 53
position, Buell held that “[t]he fact that an injury otherwise
compensable under the [Federal Employers’ Liability Act
(“FELA”)] was caused by conduct that may have been
subject to arbitration under the RLA does not deprive an
employee of his opportunity to bring an FELA action.” 480
U.S. at 564.
Because the panel’s erroneous extension of LMRA
preemption to federal law claims contravenes longstanding
Supreme Court caselaw, the panel opinion creates a circuit
split. The Sixth Circuit has correctly recognized that, when
a claim is “based on a federal cause of action and is in federal
court, there is no danger of divergent application of a CBA’s
provisions by state courts; thus, the motivating purpose of
§ 301 preemption simply does not apply.” Watts v. United
Parcel Serv., Inc., 701 F.3d 188, 192 (6th Cir. 2012). The
Sixth Circuit declined to extend § 301’s preemption analysis
to plaintiff’s ADA claim and instead concluded that “§ 301 of
the LMRA does not preempt a claim brought in federal court
under the ADA.” Id. at 193. It is unclear how the panel
believes that “[its] holding here is entirely consonant with
Watts,” Op. 17 n.2, while also acknowledging Watts’s
holding that “the motivating purpose of § 301 preemption
simply does not apply” when a federal statutory claim is
brought in federal court, Op. 16.
The panel claims that “at least two circuits have held that
the LMRA precludes FLSA [Fair Labor Standards Act]
claims,” Op. at 18 n.3, citing Martin v. Lake County Sewer
Co., Inc., 269 F.3d 673 (6th Cir. 2001), and the case it relied
on, Vadino v. A. Valey Engineers, 903 F.2d 253 (3d Cir.
1990). But those cases applied the National Labor Relations
Act’s (“NLRA”) six-month statute of limitations to a
particular class of claims brought under the LMRA and
54 COLUMBIA EXPORT TERMINAL V. ILWU
FLSA. Although applying the NLRA’s statute of limitations
may lead to the dismissal of a late-filed FLSA claim, that
result is assuredly not § 301 preclusion.
The panel opinion claims that § 301 both preempts state
law claims and sub silentio precludes federal law claims. In
an attempt to justify this position, the panel conflates LMRA
and RLA preemption. Because there is no basis for
conflating preemption under the LMRA and RLA, or for
extending that preemption to preclude federal law claims, the
panel opinion needlessly creates a circuit split.
II.
The panel creates a presumption of arbitrability contrary
to Supreme Court precedent and, in doing so, rewrites the
CBA to require arbitration of RICO claims—despite
conceding that “[r]esolution of the RICO claims will . . .
require interpretation of the CBA to determine how it applies,
if it does, to an issue which its express terms do not appear to
discuss.” Op. 21 (emphasis added). But Granite Rock held
that the presumption applies “only where a validly formed
and enforceable arbitration agreement is ambiguous about
whether it covers the dispute at hand.” 561 U.S. at 301
(emphasis added). As I discuss below, the CBA here is not
ambiguous—its arbitration provision does not cover CET’s
RICO claims. Thus, the presumption does not apply.
The panel suggests that the presumption in favor of
arbitration applies whenever the parties have agreed to
arbitrate some matters under a CBA and dispute only whether
the CBA covers the claims alleged. Op. 26. But Granite
Rock specifically rejected such an argument. “Although
[United Steelworkers of America v. Warrior & Gulf
COLUMBIA EXPORT TERMINAL V. ILWU 55
Navigation Co., 363 U.S. 574 (1960)] 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 . . . 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.’” Granite Rock, 561 U.S. at
301 n.8.
Perhaps recognizing the difficulty of applying the
presumption to the CBA at issue, the panel attempts to
rewrite it. Under the CBA here, “grievances” must be
arbitrated. The CBA defines a grievance as any dispute about
the “interpretation, application, or violation” of the CBA and
the panel claims that interpretation and application of the
CBA are involved here. Op. 20–27. But CET’s dispute with
the defendants concerns the alleged submission of fraudulent
timesheets, and proof of such fraud does not require any
interpretation or application of the CBA. That is especially
so because CET’s complaint alleges that some employees did
“not show[] up at all and yet those who did show up
submit[ted] time sheets indicating that the absent employee
worked a full shift.”
The panel points to various provisions of the CBA that
require an employee who is sent home early to be paid for a
half or full shift, as well as provisions that require paid meal
periods, paid holidays, and paid vacation time. Op. 20–22.
These hypothetical defenses may explain why employees
may receive pay for time they do not work, but these
hypothetical defenses do not authorize an employee to submit
a timesheet on behalf of an absent employee. Nor do the
provisions of the CBA explain why an employee might
56 COLUMBIA EXPORT TERMINAL V. ILWU
submit a timesheet claiming hours that were not actually
worked—especially if that employee did not show up to
work.
The panel states that an issue may be “whether employees
can claim all of their compensable hours in their weekly
timesheets, or whether they must simply list time actually
worked.” Op. 21. But, in the panel’s own words, the CBA’s
“express terms do not appear to discuss” this issue, id., thus
admitting that CET’s RICO claims likely depend on an issue
that the CBA does not discuss. This is not merely a dispute
over the hours that an employee worked and logged on a
timesheet, but an allegation of a $5.3 million fraudulent
scheme executed by approximately 150 employees over four
years. As Judge Ikuta’s dissent states, “[p]roving the
elements of mail and wire fraud here requires only a factual
inquiry into whether employees claimed they were working
when they were not physically on site.” Dissent, 40. That
inquiry does not require interpretation of the CBA. The panel
errs both in applying a presumption in favor of arbitration and
in finding that the CBA requires arbitration of CET’s RICO
claims.
III.
The panel’s creation of a presumption in favor of
arbitration and an agreement to arbitrate where none exists is
not only legally erroneous, but also practically harmful. First,
as plaintiff points out, the panel opinion “creates a new
standard under which statutory claims are subject to
arbitration unless a CBA expressly excludes statutory claims
from the CBA’s arbitration procedures.” PFREB 3. The
notion that any claim that is not expressly excluded is
arbitrable largely defeats the point of negotiating a CBA; the
COLUMBIA EXPORT TERMINAL V. ILWU 57
scope of arbitration would become comprehensive no matter
what the CBA says, unless it explicitly excludes from
arbitration a laundry list of claims. And typical CBAs (those
without a laundry list of exclusions) will prove no less
troublesome in litigation, forcing courts to deduce parties’
arbitration intent from what they didn’t say, rather than read
the written agreement to determine what they specifically
agreed to arbitrate. The panel’s opinion will lead to a mass
of arbitrations never contemplated by a CBA.
Second, there would be no objectively discernible rule to
decide which federal statutory claims must be sent to
arbitration and which can proceed in court. The panel argues
that CET tried to circumvent arbitration by presenting
“claims which are, in substance, labor disputes” as federal
statutory claims. Op. 17. But the panel fails to explain how
“Individual Defendants not showing up at all and yet those
who did show up submitting time sheets indicating that the
absent employee worked a full shift,” is a contractual claim
that was “artful[ly] plead[ed]” as a RICO claim. Op. 17.
CET’s claim describes precisely the kind of activity that
RICO prohibits: “It shall be unlawful for any person
employed by . . . any enterprise engaged in, or the activities
of which affect, interstate or foreign commerce, to conduct or
participate . . . in the conduct of such enterprise’s affairs
through a pattern of racketeering activity.” 18 U.S.C.
§ 1962(c). If fraud of this nature must be sent to arbitration
in the panel’s view, a CBA’s arbitrability scope would be
almost limitless, as almost any claim would relate to the
58 COLUMBIA EXPORT TERMINAL V. ILWU
CBA. If there is any limiting principle as to which claim
must be arbitrated, I don’t discern it.5
IV.
Section 301 of the LMRA is a far-reaching provision that
affects every CBA in “an industry affecting commerce.”
29 U.S.C. § 185(a). Until now, we have consistently applied
§ 301 preemption to further the statute’s purpose of
promoting uniform interpretations of CBA provisions.
Today, the panel wrongly strips federal courts of jurisdiction
to hear federal claims under the guise of “preclusion.” The
panel’s error is magnified by the lack of a limiting principle
that explains which claims must be arbitrated and which can
proceed to litigation, and by the panel’s misconception of
how to determine when a CBA mandates arbitration. The
actual standard requires a court to submit to arbitration only
disputes that the parties have specifically agreed to submit.
See Granite Rock, 561 U.S. at 302. Because of the panel
opinion, the standard in our Circuit will require us to submit
to arbitration any claims that were not expressly excluded,
even if there was no agreement to arbitrate such claims. This
erroneous change will harm both labor and management.
For all these reasons, I respectfully dissent from our
decision not to rehear this case en banc.
5
This case involved alleged mail and wire fraud. But crimes such as
arson, bribery, extortion, theft, embezzlement, obstruction of justice, and
witness tampering can also be predicate acts under 18 U.S.C. § 1961(1).
It takes little imagination to foresee how each of these predicate criminal
acts by management or labor could be related to a CBA. It also takes little
imagination to see how a vast number of other federal statutory claims
brought by labor or management could also be related to a CBA.