Gulfside Casino v. MS Riverboat Council ( 2008 )


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  •            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 R. 47.5, the court has determined that this opinion should not
    be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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).
    
                                                   2
                                          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”).
    
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