Gulfside Casino Partnership v. Mississippi Riverboat Council

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
June 18, 2008

No. 07-60807 Charles R. Fulbruge III
Summary Calendar Clerk

GULFSIDE CASINO PARTNERSHIP

Plaintiff-Appellee
v.

MISSISSIPPI RIVERBOAT COUNCIL; UNITE HERE; INTERNATIONAL
BROTHERHOOD OF TEAMSTERS; INTERNATIONAL UNION OF
OPERATING ENGINEERS

Defendants-Appellants

Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 1:07-CV-110

Before WIENER, GARZA, and BENAVIDES, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellee Gulfside Casino Partnership (“Gulfside”) initiated this
action, seeking a declaratory judgment that the Memorandum of Agreement
(“MOA”) entered into between (1) Defendants-Appellants Mississippi Riverboat
Council, UNITE HERE, International Brotherhood of Teamsters, and

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
 No. 07-60807

International Union of Operating Engineers (collectively, the “Unions”) and (2)
Grand Casinos of Mississippi LLC-Gulfport (“Grand Casino-Gulfport”) is not
enforceable as to Gulfside. The MOA, which addresses representational and
union organizing issues affecting employee rights at the Grand Casino-Gulfport,
contains an arbitration clause providing in part that “[t]he parties agree that
any disputes over the interpretation or application of this Agreement shall be
submitted to expedited and binding arbitration.” The Unions ask us to reverse
the district court’s denial of their alternative motion to compel arbitration and
to dismiss or stay Gulfside’s declaratory-judgment action. We decline this
request and affirm.
First, the Unions contend that the district court erred when it ruled that
it, not the arbitrator, had to determine whether Grand Casino-Gulfport’s rights
and obligations under the MOA were assigned to Gulfside. Second, the Unions
insist that, assuming, arguendo, the district court was the proper arbiter, it
erred in ruling that Grand Casino-Gulfport’s rights and obligations under the
MOA were not assigned to Gulfside, especially because it did not require
Gulfside to introduce evidence supporting the allegations in its complaint before
ruling.
Having reviewed the record on appeal, the parties’ briefs, and the
applicable law, we are convinced that the district court properly denied the
Unions’ motion. When a party challenges the very existence of an agreement,
as opposed to its continued validity or enforcement, the court, not the arbitrator,
must first resolve the dispute.1 Even though Grand Casino-Gulfport entered into
the MOA with the Unions, and later entered into a side agreement with Gulfside
in which it purported to assign its rights and obligations under the MOA,
Gulfside—which was not a signatory to the MOA—insists that Grand Casino-

1
See, e.g., Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d 211, 214-19 (5th Cir. 2003);
EEOC v. Waffle House, Inc., 534 U.S. 279, 293-94 (2002).

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 No. 07-60807

Gulfport’s rights and obligations were not properly assigned to it. In other
words, Gulfside contends that it is not a party to the MOA, and therefore
challenges the very existence of the agreement with respect to itself.
Accordingly, we hold that the district court properly ruled that it, not the
arbitrator, had to resolve the question whether Grand Casino-Gulfport’s rights
and obligations under the MOA were assigned to Gulfside.
Furthermore, we hold that the district court properly ruled that Grand
Casino-Gulfport’s rights and obligations were not assigned to Gulfside. The
MOA, by its own terms, applied only to active casino and associated landside
operations. Following Hurricane Katrina, Grand Casino-Gulfport was forced to
cease all riverboat casino and associated landside operations and to terminate
all employees. It follows that there were no rights or obligations remaining
under the MOA that could be assigned to Gulfside when it entered into the side
agreement with Grand Casino-Gulfport.2 The Unions’ contention to the contrary
is rejected. Moreover, because of the Unions’ prior insistence that the district
court rule expeditiously on their motion, their contention that the court decided
the issue prematurely is unavailing.
The district court’s ruling denying the Unions’ alternative motion to
compel arbitration and to dismiss or stay Gulfside’s declaratory-judgment action
is, in all respects, AFFIRMED.

2
See United Mine Workers of America v. Apogee Coal Co., 330 F.3d 740, 745 (6th Cir.
2003) (holding that term “operations” in successorship clause—which language is analogous
to that in MOA at issue—“connoted actively producing mines and does not include mines closed
in good faith for economic reasons”).

3