Northern New England Telephone v. Local 2327, International , 735 F.3d 15 ( 2013 )


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  •            United States Court of Appeals
    For the First Circuit
    Nos. 13-1167
    13-1186
    NORTHERN NEW ENGLAND TELEPHONE OPERATIONS LLC,
    d/b/a FAIRPOINT COMMUNICATIONS,
    Plaintiff-Appellant, Cross-Appellee,
    v.
    LOCAL 2327, INTERNATIONAL BROTHERHOOD OF
    ELECTRICAL WORKERS, AFL-CIO,
    Defendant-Appellee, Cross-Appellant.
    APPEALS FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF MAINE
    [Hon. George Z. Singal, U.S. District Judge]
    Before
    Lynch, Chief Judge,
    Torruella, Circuit Judge,
    and Stearns,* District Judge.
    Arthur G. Telegen, with whom John E. Duke and Seyfarth Shaw
    LLP, were on brief for appellant/cross-appellee.
    Alfred Gordon O'Connell, with whom Pyle Rome Ehrenberg PC, was
    on brief for appellee/cross-appellant.
    November 12, 2013
    *
    Of the District of Massachusetts, sitting by designation.
    TORRUELLA, Circuit Judge.             This case asks us to review
    the appropriateness of an arbitral award entered against FairPoint
    Communications ("FairPoint") in favor of Local 2327, International
    Brotherhood      of   Electrical    Workers,       AFL-CIO     (the     "Union").
    Fairpoint asserts, as it did in the court below, that the arbitral
    panel exceeded the scope of its authority in crafting the award,
    disregarding      the    express   terms      of   the     parties'        Collective
    Bargaining Agreement ("CBA") and adopting a manifestly unreasonable
    interpretation of this agreement's terms.                     The district court
    disagreed, finding that the panel's interpretation fell within the
    wide boundaries of discretion granted to arbitral decisions by our
    courts and granting summary judgment in favor of the Union.
    Although the district court affirmed the award, it denied the
    Union's request for costs and fees.           The parties now cross-appeal,
    both seeking review of the aspects of this decision contrary to
    their interests.        Agreeing with the district court's determination
    -- albeit on different grounds as to the non-imposition of costs
    and fees -- we affirm.
    I. Background
    A. FairPoint's telecommunications operation
    On    April     1,   2008,   FairPoint        purchased     Verizon    New
    England,   Inc.'s       ("Verizon")     telecommunications           operations   in
    Vermont,   New    Hampshire,     and    Maine.      As    a   term    of    purchase,
    FairPoint agreed to hire all former Verizon employees, represented
    -2-
    by the Union, in those states.          FairPoint and Verizon negotiated a
    Transition Services Agreement under which Verizon's employees and
    systems remained active through February 1, 2009 (the "cutover
    date") so as to ensure continuity of service during the transfer of
    operations and ownership to FairPoint.
    This appeal concerns FairPoint's Wholesale Group, which
    is   responsible        for   facilitating     the    purchase   of   access   to
    FairPoint's operational infrastructure and services by smaller,
    regional telecommunication operators.                These purchase orders are
    grouped into Access Service Requests ("ASRs"), which are complex
    orders requiring personal service, and Local Service Requests
    ("LSRs"),    which      are   simple   orders   generally    completed    by   an
    automated system, without human intervention.
    At the time of FairPoint's purchase, 94% of Verizon's LSR
    orders were fully automated; only the remaining 6% of more complex
    LSR work was routed to employees.             FairPoint intended to complete
    a number of system upgrades prior to the cutover date, so as to
    match this 94% percent "flowthrough" rate by the time it took over
    Verizon's operations.         Consequently, FairPoint expected that only
    a small percentage of complex LSR work would be completed by Union
    employees.       Its original staffing plan included no reference to
    subcontracting.
    As    the    cutover   date   approached,      however,    FairPoint
    realized that its flowthrough rate was significantly lower than
    -3-
    expected,   only   around   60%.   It    also    became   clear   that   the
    transition in ownership would require a ten-day "blackout period,"
    during which all orders would be handwritten, resulting in a
    significant backlog. These unexpected obstacles created additional
    staffing needs not addressed by FairPoint's original staffing plan.
    FairPoint approached the Union and explained that it would need to
    hire a "bubble workforce" until the backlog created by the blackout
    period had been resolved and the flowthrough rate neared 94%.
    FairPoint estimated this would take between sixty days and six
    months.
    Subsequently,   FairPoint    hired    TeleTech,   a   Canadian
    company, to staff the bubble workforce. Beginning in February 2009,
    TeleTech staff handled simple LSR work -- the work that would have
    been otherwise fully automated -- while Union employees handled
    more complex LSR work.1     Despite FairPoint's assurances that this
    bubble workforce was temporary, the simple LSR work was never
    allocated to Union employees.       In September 2010, the work was
    indefinitely transferred from Teletech to APAC, a subcontractor
    located in Utica, New York.
    1
    TeleTech originally completed some ASR work as well, although
    all of that work eventually returned to the Union and is not in
    dispute here. Some simple LSR work was also completed by Union
    employees based in Portland, Maine. This was usually as a result
    of FairPoint's "Single Point of Contact" program, which allowed
    clients to have all of their service needs, simple and complex,
    handled by a single representative.
    -4-
    B. The Fairpoint-Union CBA
    When     FairPoint      purchased      Verizon's     telecommunication
    systems, it also succeeded to Verizon's CBA with the Union,
    originally signed in 2003.            Under a provision titled "Limitations
    on Transfer of Jobs," this 2003 agreement held that: "a Company may
    not permanently transfer more than 0.7% of [Union] represented jobs
    .   .   .   to   an   area   outside    the       New   England   States   []."    As
    interpreted in a prior grievance arbitration -- filed by the Union
    in an attempt to arrest Verizon's sale of the company to FairPoint
    -- this restriction applied only to transfers "between Verizon
    entities," not transfers to external companies.                       IBEW, System
    Council T-6 and Verizon New England, Grievance #77-07 and 78-07 at
    57-58.
    Throughout February 2008, the Union negotiated with
    FairPoint to amend and extend this 2003 agreement.                    In its final
    version, the revised CBA deleted much of the language that had been
    subject to the earlier arbitration, replacing it with new terms:
    During each contract year of the parties'
    current collective bargaining agreement[]
    ("CBA"), from August 3, 2008 to August 3,
    2013, the Company may not permanently transfer
    [Union] represented jobs to any entity which
    is not a signatory to this agreement.
    Also incorporated into the revised CBA, however, was an agreement
    letter      signed    by     Union    and    FairPoint      representatives       that
    referenced certain pre-amendment elements of the Limitation on
    Transfer of Jobs provision.            In particular, this letter announced
    -5-
    a method for calculating the 0.7% transfer cap, despite this cap's
    deletion from the revised CBA.
    At this same time, the parties negotiated amendments to
    a   Memorandum     of    Agreement       specifically    focused     on    the   sub-
    contracting of plant-technician jobs.               This agreement, along with
    another, unmodified provision -- detailing FairPoint's ability to
    contract    out    certain   other       non-sales    jobs   --    appeared      in   a
    different section of the CBA from the Limitation on Transfer of
    Jobs provision.
    C. The arbitration
    In 2010, the Union filed a grievance based on the
    allegedly   wrongful      transfer       of   LSR   work.    A     panel   of    three
    arbitrators took up this grievance on October 27 and November 17,
    2010,   with      both    parties    stipulating        to   the     question      for
    arbitration:
    Did the Company violate [the Limitation on
    Transfer of Jobs provision] of the April 1,
    2008 collective bargaining agreement with
    regard to wholesale work being performed by
    employees of TeleTech or APAC? If so, what
    shall be the remedy?
    FairPoint argued that no violation had occurred, citing
    the   previous    arbitration       as    evidence    that   the    Limitation        on
    Transfer of Jobs provision applied only to transfers between
    FairPoint owned-entities, making transfers to independent entities
    like TeleTech and APAC acceptable.              FairPoint also claimed that,
    regardless of whether the panel interpreted "any entity . . . not
    -6-
    signatory    to    this    agreement"      to     include    non-FairPoint        owned
    businesses, no transfer had ever occurred. Because Union employees
    never possessed the jobs in question -- under Verizon's ownership
    they were completed by an automated system -- FairPoint contended
    they could not have been "transferred" away.
    The panel disagreed.         As to the restriction on transfers
    to "any entity," it reasoned that "any" implied "the opposite of
    limitation."       As     such,   the     plain    meaning    of    this      provision
    restricted transfer to "any business, not just those affiliated
    with FairPoint."        Moreover, the panel identified no evidence that
    the parties intended to retain the pre-amendment CBA's more limited
    restrictions on job transfer.             It refused to hold that the other
    provisions    of    the    CBA    --    defining     the    scope    of       acceptable
    subcontracting for certain non-sales jobs -- were necessarily
    incongruous, expressing a belief that all three provisions could be
    interpreted in a consistent manner.               Although recognizing that the
    agreement letter's reference to the since-deleted 0.7% transfer cap
    was clearly contradictory, the panel reasoned that it could not
    "disregard the plain language of the [Limitation on Transfer of
    Jobs provision] because of [this] apparent inconsistency with
    another provision."
    Although     the     issue    of     whether     jobs    were       indeed
    "transferred" gave the panel more pause, ultimately it concluded
    that   the    facts     presented      constituted     just    such       a    wrongful
    -7-
    conveyance. First, the panel noted that FairPoint's staffing plan,
    shared with the Union, envisioned that all necessary LSR work would
    eventually be completed by Union employees.                Second, the panel
    determined that it was "not completely correct" to say that the
    Union never did any LSR work; testimony established some small
    amount of this work was completed by Union employees.                On these
    grounds, the panel found an "unmistakable mutual understanding and
    expectation" that the jobs in question would be completed by Union
    employees.      The   panel     concluded    that   this   concrete,    shared
    expectation was sufficient to make the allocation of this work to
    TeleTech and APAC a wrongful transfer of jobs.
    The panel entered an award in favor of the Union,
    requiring FairPoint to return all LSR work and to rehire any Union
    employees wrongfully laid off during the relevant time period.
    D. The district court's opinion
    FairPoint filed suit in district court under section 301
    of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185,
    arguing that the arbitral panel had exceeded its authority by
    wrongfully adding and subtracting terms from the CBA. Specifically,
    FairPoint     asserted   that    the    panel's     interpretation     of   the
    Limitation on Transfer of Jobs provision impermissibly stripped
    FairPoint of management rights expressly afforded to it by the CBA
    and could not be reconciled with the CBA's other subcontracting
    provisions.     It also restated the argument that no transfer had
    -8-
    occurred, the jobs in question having never been possessed by Union
    employees.     The Union cross-filed, seeking an award of costs and
    fees for what it asserted was spurious litigation.
    The district court granted summary judgment in favor of
    the Union, finding that FairPoint's arguments established only a
    disagreement with the panel's interpretation of the CBA, not proof
    that such an interpretation was in excess of the panel's authority.
    Nonetheless, the district court denied costs and fees pursuant to
    Federal Rule of Civil Procedure 11, reasoning that the Union had
    failed to properly abide by the rule's provisions and that,
    regardless, sanctions were inappropriate in this case.        These
    cross-appeals followed.
    II. Discussion
    A. FairPoint's request to vacate the award
    Review of a district court's decision to grant summary
    judgment affirming an arbitral award is plenary.     Teamster Local
    Union No. 42 v. Supervalu, Inc., 
    212 F.3d 59
    , 65 (1st Cir. 2000).
    Yet, "[c]ourts [] do not sit to hear claims of factual or legal
    error by an arbitrator as an appellate court does reviewing
    decisions of lower courts."    United Paperworkers Int'l Union, AFL-
    CIO v. Misco, Inc., 
    484 U.S. 29
    , 38 (1987).        Rather, judicial
    review of arbitration awards is "among the narrowest known in law."
    Me. Cent. R.R. Co. v. Bhd. of Maint. of Way Emps., 
    873 F.2d 425
    ,
    428 (1st Cir. 1989).
    -9-
    Our review, therefore, adopts the same highly deferential
    standard as did the court below.               See Pérez-Acevedo v. Rivero-
    Cubano,     
    520 F.3d 26
    ,   29    (1st     Cir.   2008).        Moreover,    "an
    arbitrator's factual findings are not open to judicial challenge."
    El Dorado Technical Servs., Inc. v. Unión Gen. de Trabajadores de
    P.R., 
    961 F.2d 317
    , 320 (1st Cir. 1992).              Instead, we accept the
    arbitrator's factual conclusions, Bos. Med. Ctr. v. Serv. Emps.
    Int'l Union, Local 285, 
    260 F.3d 16
    , 18 (1st Cir. 2001), and limit
    our review to "determining if the arbitrator's interpretation of
    the contract is in any way plausible,"               Labor Relations Div. of
    Constr. Indus., Inc. v. Int'l Bhd. of Teamsters, Chauffeurs,
    Warehousemen & Helpers, Local No. 379, 
    29 F.3d 742
    , 745 (1st Cir.
    1994); see also 
    Misco, 484 U.S. at 38
    ("[A]s long as the arbitrator
    is even arguably construing or applying the contract and acting
    within the scope of his authority, that a court is convinced he
    committed     serious    error      does    not   suffice     to   overturn     his
    decision.").
    It is through this exceedingly narrow lens that we assess
    the appropriateness of the FairPoint-Union arbitral award.
    1. Scope of the panel's authority
    FairPoint first asserts that the panel acted in excess of
    the authority granted to it by the CBA's arbitration clause.                   This
    clause provides that an arbitrator "shall have no power to add to,
    subtract from, modify or disregard any of the provisions of this
    -10-
    agreement."        FairPoint purports that this provision raises the
    standard of our review, requiring us to reject even plausible
    interpretations of the CBA that exceed this "express limitation[]"
    on an arbitrator's authority.
    This    argument      asks   too    much   of    the       broadly    worded
    arbitration provision in question.              In interpreting a provision of
    similar    generality,2      we   have   recognized      that      a    "standard    'no
    modification'       clause     incorporates       general         legal     principles
    concerning an arbitrator's authority, reinforcing the admonition
    . . . that legitimate arbitral awards draw their essence from the
    contract." Kraft Foods, Inc. v. Office & Prof'l Emps. Int'l Union,
    AFL-CIO,    CLC,    Local    1295,   
    203 F.3d 98
    ,      101    (1st    Cir.    2000)
    (internal alteration and quotation marks omitted) (quoting LaRocque
    v. R.W.F., Inc., 
    8 F.3d 95
    , 97 (1st Cir. 1993)).                        That an award
    "must draw its essence from the contract," 
    Misco, 484 U.S. at 38
    ,
    is simply a reiteration of our requirement, described above, that
    the interpretation be in some way "plausible."                         Labor Relations
    Div. of Constr. 
    Indus., 29 F.3d at 745
    (citing 
    Misco, 484 U.S. at 36-38
    ). As such, without foreclosing the possibility that the text
    of some arbitration clauses might "limit an arbitrator's power of
    2
    That clause stated: "'[t]he arbitrator shall have no authority
    to amend, alter, or modify this Agreement or its terms and shall
    limit the decision solely to the interpretation and application of
    this Agreement.'" Kraft Foods, Inc. v. Office & Prof'l Emps. Int'l
    Union, AFL-CIO, CLC, Local 1295, 
    203 F.3d 98
    , 101 (1st Cir. 2000).
    -11-
    contract construction to a greater extent than the background law,"
    Kraft Foods, 
    Inc., 203 F.3d at 101
    n.1, we find that the generic
    no-modification    provision   in     question   evidences    no    intent   to
    circumscribe    the   arbitrator's     authority     beyond   our    accepted
    standard.3
    2. The ban on subcontracting to "any entity"
    In any case, FairPoint struggles to identify precisely
    how the panel's decision on subcontracting veered over the line
    separating interpretation and modification.               In sum, FairPoint
    forwards two arguments in support of its claim.             First, it notes
    that the CBA grants it an express right to "manage its business
    subject [only] to the limitations contained in [the CBA]."                   By
    restricting subcontracting, FairPoint asserts that the arbitrator
    wrongly "subtract[ed] from" this right by "add[ing]" additional
    restrictions not clear on the CBA's face.           Second, it argues that
    the CBA's specific restrictions on subcontracting certain plant
    jobs   imply   that   the   parties    knew   how    to   explicitly    limit
    subcontracting and would have done so for sales jobs if so desired.
    Moreover, interpreting the Limitation on Transfer of Jobs provision
    to create a blanket ban on subcontracting would render these
    provisions superfluous, in violation of a basic rule of contract
    3
    We would be hard-pressed to identify an instance in which an
    "interpretation" that in fact disregarded express contract terms,
    or created additional terms from thin air, would be found
    "plausible."
    -12-
    interpretation.       FairPoint contends, therefore, that the panel
    clearly "disregard[ed]" these specific provisions and impermissibly
    "add[ed]" an overly broad restriction to the CBA.
    Certainly, the narrow nature of our review does not
    amount to a blank check.          United Steelworkers of Am. v. Enter.
    Wheel & Car Corp., 
    363 U.S. 593
    , 597 (1960) ("[A]n arbitrator is
    confined   to   interpretation      and   application      of    the   collective
    bargaining agreement; he does not sit to dispense his own brand of
    industrial justice.").         Yet, considering these arguments in turn,
    we are unable to identify any instance in which the panel exceeded
    the bounds of its interpretative powers.
    As    to   the   management    rights       provision,      we   see   no
    contradiction between its terms and the arbitrator's interpretation
    of the Limitation on Transfer of Jobs provision.                       The former
    provision grants FairPoint control over all management decisions,
    save those limited by other provisions of the CBA.                      The panel
    interpreted     the   latter    provision,   in    a    manner   not    expressly
    foreclosed by anything in the CBA, as one such limitation.                        In
    reaching this conclusion, the panel neither "disregarded [] the
    lack of restrictions on FairPoint's ability to subcontract" nor
    "added subcontracting restrictions."         It simply read one provision
    as creating an exception to another that, by its terms, allowed for
    just such exceptions.          This is not the stuff of which vacated
    arbitral awards are made.
    -13-
    On a review of the record, neither can we agree that the
    arbitral panel manifestly disregarded the other CBA provisions
    limiting subcontracting for particular plant jobs.                    The panel
    explicitly stated that "it would be possible to interpret the []
    two   [specific    restrictions]     as    exceptions   to   the    broad   jobs
    prohibition of the [CBA]."4              It also directly considered the
    inconsistency between the Limitation on Transfer of Jobs provision
    and the agreement letter, but ultimately concluded that it could
    not "disregard the plain language of the [CBA]."             In reaching this
    conclusion, the panel relied heavily on the parties' apparent
    intent.     It     highlighted     the    parties'   extended      negotiations
    regarding the Limitation on Transfer of Jobs provision, during
    which they undisputedly deleted the 0.7% cap and removed other
    language that had previously been interpreted as restricting only
    transfers between Verizon-owned entities.
    While finding it "hard to fathom" why this letter was
    executed   as     written,   the   panel     reasoned   that    the    parties'
    bargaining history made clear their intent to construct a more
    4
    The provisions in question are indeed worded so as to plausibly
    create exceptions to an otherwise total ban. For instance, one
    provision states that "under the following conditions work may be
    contracted out," while the other states that "[t]he Company will
    maintain its established policies as to assignment of work in
    connection with the installation and maintenance of communications
    facilities." Both, therefore, could be interpreted as granting a
    greater power to subcontract in certain specific instances than was
    permitted under the more general Limitation on Transfer of Jobs
    provision. While perhaps this was not the best interpretation,
    neither can we deem it a wholly implausible one.
    -14-
    comprehensive ban on job transfers than that of the pre-amendment
    CBA.   In light of this mutual intent, the panel was unwilling to
    allow a letter -- incorporated into the CBA but apparently based
    erroneously on a since-amended version of its text5 -- to prevail
    over the express terms of the current provision.
    Ideally, the panel's discussion of these points would
    have been more robust, and we are not untroubled by its contention
    that a more thorough attempt to harmonize these provisions "would
    be rash."   Still, we are not tasked with reviewing the intricacies
    of these provisions anew, but only with determining if the panel's
    resolution supplants express contract terms with "[its] own brand
    of industrial justice." 
    Id. On the
    whole, the panel's decision
    that these apparent inconsistencies could not overwrite the plain
    meaning of the phrase "any entity" -- bolstered as it was by the
    parties' bargaining history and apparent intent -- does not appear
    wholly contrary to either basic reason or rules of contract
    interpretation.    See Smart v. Gillete Co. Long-Term Disability
    Plan, 
    70 F.3d 173
    , 178 (1st Cir. 1995) (stating that contract
    interpretation looks first to the text's plain meaning and, if
    ambiguity exists, then to the parties' intent).
    5
    We express no conclusive opinion as to whether, in fact, the
    parties simply erred by not updating this letter, but we note that
    its text also includes reference to "the December 2000 bargaining
    sessions." Because the Union and FairPoint's negotiations occurred
    in 2008, this lends plausibility to the panel's suggestion that the
    text mistakenly referenced the prior CBA.
    -15-
    Ultimately,        FairPoint's     arguments      in      regard    to
    subcontracting express disagreement with the panel's interpretation
    of the CBA, suggesting an alternative interpretation that it
    believes is more appropriate.         These arguments do not establish,
    however, that the panel's interpretation was either implausible or
    in excess of its authority.
    3. The meaning of "transfer"
    FairPoint next contests the panel's decision that jobs
    once completed by a computer program were wrongfully "transferred"
    away from Union employees.       It asserts, as it did before the court
    below,   that    the   only   plausible     interpretation      of   "transfer"
    requires an element of predicate possession that was absent in this
    case.    Therefore, FairPoint concludes, the panel's determination
    that jobs were impermissibly transferred away from Union employees
    "ignores   the    plain   language"    of     the    CBA   in     favor   of   an
    impermissible construction that is clearly in excess of the panel's
    interpretive authority.
    We do not disagree that the term "transfer" connotes an
    assignment from one entity to another.              See Webster's Third New
    International Dictionary 2426-27 (1971) (defining "transfer" as "to
    carry or take from one person or place to another" or "the
    conveyance . . . from one person to another" (emphasis added)).
    Therefore, we must review the facts presented in this case to
    determine whether, given this definition, the panel's finding that
    -16-
    a transfer occurred was indeed plausible.                 We begin this review by
    adopting the panel's factual findings in full, including the
    determination that the Union had a concrete expectation, amounting
    to a "legitimate claim," that its employees would perform these
    jobs.    El Dorado Technical Servs., 
    Inc., 961 F.2d at 320
    (holding
    that courts, in considering arbitral awards, do not review findings
    of fact). Our inquiry is thus limited to determining whether it is
    conceivable that this "legitimate claim" vested in the Union a
    degree of possession sufficient to make the subcontracting of these
    jobs a form of transfer.
    The   panel's   interpretation        of   "transfer"     is    indeed
    expansive, and if we were initially tasked with construing the
    meaning of this term, we might find FairPoint's argument more
    convincing.          We   cannot   say,   however,     that    it   is   beyond      any
    plausible interpretation of the term as used in the CBA that
    subcontracting jobs to which Union employees had a "legitimate
    claim" -- undisputedly founded on a mutual understanding of the
    parties -- constituted a "transfer."             It is at least conceivable
    that    this    well-defined       expectation   was      a   sufficient      form   of
    predicate possession to mean that these jobs were indeed removed or
    conveyed away from the Union. See Local 1445, United Food &
    Commercial Workers Int'l Union, AFL-CIO v. Stop & Shop Co., Inc.,
    
    776 F.2d 19
    , 21 (1st Cir. 1985) (finding that to warrant reversal,
    awards must be premised on reasoning "so palpably faulty" that no
    -17-
    judicial body "ever could conceivably have made such a ruling"
    (citing Bettencourt v. Bos. Edison Co., 
    560 F.2d 1045
    , 1050 (1st
    Cir.   1977))).        The   plausibility    of   this       reading    is   further
    bolstered by the panel's factual finding that some small portion of
    LSR work was already completed by Union employees.
    That   FairPoint   contracted      to       resolve   disputes    via
    arbitration means they must now live by the bargain they struck.
    
    Misco, 484 U.S. at 37-38
    ("Because the parties have contracted to
    have disputes settled by an arbitrator . . . it is the arbitrator's
    view of the . . . meaning of the contract that they have agreed to
    accept.").       Finding no grounds on which to vacate the arbitral
    award, we affirm the district court's grant of summary judgment for
    the Union.
    B. The Union's request for costs and fees
    A district court's decision to grant or deny a request
    for    costs    and   fees   is   reviewed    for      a    "manifest    abuse    of
    discretion."      Gay Officers Action League v. Puerto Rico, 
    247 F.3d 288
    , 292 (1st Cir. 2001).         Here, the district court assessed the
    Union's request under Federal Rule of Civil Procedure 11 ("Rule
    11"), apparently not recognizing that an award of costs and fees is
    available as a matter of federal common law for actions proceeding
    under § 301 of the LMRA.           See Local 2322, Int'l Bhd. of Elec.
    Workers v. Verizon New England, Inc., 
    464 F.3d 93
    , 100 (1st Cir.
    2006).   It is well accepted that "a court's material error of law
    -18-
    is invariably an abuse of its discretion."              Negrón-Almeda v.
    Santiago, 
    528 F.3d 15
    , 25 (1st. Cir. 2008).               Therefore, the
    district court's determination not to award costs and fees based on
    the   Union's   failure   to   "cite   Rule   11   or   comply   with   its
    requirements" was in error.
    The district court went on, however, to hold that even
    had the Union complied with the procedural requirements of Rule 11,
    it would have, "in its discretion," denied the request "to award
    fees and costs as a sanction on the record presented." Because the
    standard for awarding costs and fees under Rule 11 is substantially
    the same as that of section 301 actions, compare Fed. R. Civ. P. 11
    (allowing courts to apply sanctions in the case of "frivolous"
    arguments), with Local 2322, Int'l Bhd. of Elec. 
    Workers, 464 F.3d at 100
    (allowing for an award of costs and fees where arguments are
    "frivolous, unreasonable, or without foundation"), the district
    court's error appears, for all practical purposes, devoid of
    materiality.    Consequently, we review the district court's latter
    holding,   denying an award of costs and fees based on its review of
    the record, for an abuse of discretion.
    The Union asserts that an award of costs and fees is
    necessary to avoid the continued filing of frivolous litigation
    seeking to overturn arbitral awards.      It requests that this court
    assign costs and fees as a means by which to deter potential
    -19-
    litigants, lest we be continually inundated with what the Union
    styles as wholly frivolous claims.
    Undisputedly,       this    court     has   long   lamented      the
    "exasperating      frequency"    with    which     arbitration    awards    are
    appealed.    See Posadas de P.R. Assocs., Inc. v. Asociación de
    Empleados de Casino de P.R., 
    821 F.2d 60
    , 61 (1st Cir. 1987).
    Here, however, FairPoint's claims do not appear wholly "frivolous,
    unreasonable, or without foundation."             Local 2322, Int'l Bhd. of
    Elec. 
    Workers, 464 F.3d at 100
    .                 The line between frivolous
    arguments and merely unpersuasive ones is fine, and while FairPoint
    was   ultimately    unsuccessful,       its   contention   that    the     panel
    impermissibly modified, rather than interpreted, the CBA was "at
    least colorable."       
    Id. On this
    basis, we will not usurp the
    district court's discretion by awarding costs and fees it chose to
    deny.
    III. Conclusion
    For the foregoing reasons we affirm.
    Affirmed.
    -20-
    

Document Info

Docket Number: 18-1623

Citation Numbers: 735 F.3d 15

Filed Date: 11/12/2013

Precedential Status: Precedential

Modified Date: 1/12/2023

Authorities (17)

Negrón-Almeda v. Santiago , 528 F.3d 15 ( 2008 )

Smart v. Gillette Co. Long-Term Disability Plan , 70 F.3d 173 ( 1995 )

Local 1445, United Food and Commercial Workers ... , 776 F.2d 19 ( 1985 )

El Dorado Technical Services, Inc. v. Union General De ... , 961 F.2d 317 ( 1992 )

Teamsters Local Union No. 42 v. Supervalu, Inc. , 212 F.3d 59 ( 2000 )

Kraft Foods, Inc. v. Office & Professional Employees ... , 203 F.3d 98 ( 2000 )

Boston Medical Center v. Service Employees International ... , 260 F.3d 16 ( 2001 )

Edward Larocque v. R.W.F., Inc. , 8 F.3d 95 ( 1993 )

Local 2322, International Brotherhood of Electrical Workers ... , 464 F.3d 93 ( 2006 )

Edward R. Bettencourt v. Boston Edison Company , 560 F.2d 1045 ( 1977 )

Gay Officers Action League v. Puerto Rico , 247 F.3d 288 ( 2001 )

the-maine-central-railroad-company-and-portland-terminal-company-v , 873 F.2d 425 ( 1989 )

Perez Acevedo v. Rivero Cubano , 520 F.3d 26 ( 2008 )

labor-relations-division-of-construction-industries-of-massachusetts-inc , 29 F.3d 742 ( 1994 )

Posadas De Puerto Rico Associates, Inc., D/B/A Condado ... , 821 F.2d 60 ( 1987 )

United Steelworkers v. Enterprise Wheel & Car Corp. , 80 S. Ct. 1358 ( 1960 )

United Paperworkers International Union v. Misco, Inc. , 108 S. Ct. 364 ( 1987 )

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