Cornele Overstreet v. Gunderson Rail Services , 587 F. App'x 379 ( 2014 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT OCT 16 2014
MOLLY C. DWYER, CLERK
CORNELE A. OVERSTREET, No. 14-15713 U.S. COURT OF APPEALS
Regional Director of the Twenty-Eighth
Region of the National Labor Relations D.C. No. 4:14-cv-01323-FRZ
Board on behalf of the National Labor
Relations Board,
Petitioner - Appellee,
v. MEMORANDUM*
GUNDERSON RAIL SERVICES, LLC,
doing business as Greenbrier Rail
Services,
Respondent - Appellant.
Appeal from the United States District Court
for the District of Arizona
Frank R. Zapata, Senior District Judge, Presiding
Argued and Submitted September 8, 2014
San Francisco, California
Before: BEA, IKUTA, and HURWITZ, Circuit Judges.
Gunderson Rail Services (“GRS”) appeals the district court’s grant of a
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
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preliminary injunction pursuant to Section 10(j), 29 U.S.C. § 160(j), of the
National Labor Relations Act, requiring GRS to reopen its Tucson repair facility,
reinstate employees, and bargain in good faith with a union on behalf of the
employees. We have jurisdiction over this appeal under 28 U.S.C. §§ 1291,
1292(a)(1). We review the grant of a preliminary injunction for an abuse of
discretion. McDermott v. Ampersand Publ’g, LLC, 593 F.3d 950, 957 (9th Cir.
2010).
“A plaintiff seeking a preliminary injunction must establish that he is likely
to succeed on the merits, that he is likely to suffer irreparable harm in the absence
of preliminary relief, that the balance of equities tips in his favor, and that an
injunction is in the public interest.” Winter v. Natural Res. Def. Council, Inc., 555
U.S. 7, 20 (2008); see also Frankl v. HTH Corp., 650 F.3d 1334, 1355 (9th Cir.
2011) (applying the preliminary injunction standard in connection with a petition
for relief under Section 10(j)). In considering the balance of equities, a district
court has a duty to “balance the interests of all parties and weigh the damage to
each.” L.A. Mem’l Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197,
1203 (9th Cir. 1980).
Here the district court abused its discretion in issuing the preliminary
injunction. The district court made both an error of law and a clear error of fact by
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failing to give serious consideration to GRS’s equities and by improperly weighing
the burden on GRS against the burden on the Regional Director of the National
Labor Relations Board (“Director”). Specifically, GRS claimed that an order
requiring it to reopen the Tucson facility would be disruptive to the employees
formerly located at the Tucson facility, because the majority had already accepted
relocation options or severance packages. GRS also claimed that an order to
reopen would require it to operate a facility that was (and would continue to be)
wholly unprofitable due to the loss of its major customer, TTX. GRS’s claims
were amply supported by the record. Because the district court did not
meaningfully evaluate these claims or explain its reasons for concluding that the
order would not impose significant financial losses on GRS, the court failed to
discharge its burden of fairly weighing the equities of both parties. See Winter,
555 U.S. at 20. Further, the district court’s conclusion that GRS could reopen and
support full-time employees by repairing GRS’s own railcars and those of non-
TTX customers is unsupported by the record and thus is a clear factual error.
In addition to these errors, the court abused its discretion in determining that
the Director’s equities outweighed GRS’s equities. The district court correctly
identified the Director’s equities, namely the need “to protect the integrity of the
collective bargaining process and to preserve the Board’s remedial power,” Frankl,
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650 F.3d at 1355, but such equities have less weight in this context because they
can be vindicated after a final judgment. If it is determined that GRS’s November
2012 layoffs and closure of the Tucson facility constitute an unfair labor practice,
then an order for reinstatement, back pay, and bargaining regarding the layoffs and
effects of the closure may issue following final judgment. These equities are
outweighed by the potential economic harm caused by a reopening order under the
circumstances of this case. See, e.g., First Nat’l Maint. Corp. v. NLRB, 452 U.S.
666, 686 (1981) (holding that an employer has no duty to bargain over a decision
to shut down part of its business purely for economic reasons); Great Chinese Am.
Sewing Co. v. NLRB, 578 F.2d 251, 256 (9th Cir. 1978) (per curiam) (emphasizing
the burden of a reopening order when a plant has already been dismantled and its
equipment sold).
Because the district court erred in concluding that the balance of equities
tipped in favor of the Director, the court abused its discretion in issuing a
preliminary injunction requiring reopening of the Tucson facility. The Board has
not argued on appeal that, in the absence of an order requiring reopening, it is
entitled to preliminary injunctive relief requiring GRS to engage in bargaining with
the union regarding issues applicable to employees who were formerly working at
the now closed facility. Nor has the Board identified harms that will be caused by
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GRS’s failure to bargain with the union regarding such employees, and that cannot
be remedied after final judgment. Accordingly, the Board is not entitled to a
preliminary injunction ordering GRS to bargain with the union. See L.A. Mem’l
Coliseum Comm’n, 634 F.2d at 1202. The judgment of the district court is
reversed, and the preliminary injunction is vacated.
REVERSED AND VACATED.
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FILED
Overstreet v. Gunderson Rail Services, LLC, No. 14-15713 OCT 16 2014
HURWITZ, Circuit Judge, with whom BEA, Circuit Judge, joins, concurring:
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
I concur in the memorandum disposition, but write separately to identify
what I find the most compelling reason to vacate the preliminary injunction.
“On a § 10(j) petition, likelihood of success is a function of the probability
that the Board will issue an order determining that the unfair labor practices
alleged by the Regional Director occurred and that this Court would grant a
petition enforcing that order, if such enforcement were sought.” Frankl v. HTH
Corp., 650 F.3d 1334, 1355 (9th Cir. 2011) (citation omitted).
The district court concluded that the Director was likely to succeed in
establishing that GRS’s economic justification for closing the Tucson facility was a
pretext and that the closure had in fact been motivated by anti-union animus. This
case arrived at the district court after an administrative law judge (“ALJ”) held a
hearing on the merits of the Director’s claims, but before the ALJ made findings of
fact or conclusions of law. Thus, the district judge made his findings on the basis
of the transcript of the administrative hearing. We now have the benefit of the
ALJ’s findings, and we may take judicial notice of them and treat them as part of
the record on appeal. See Small v. Avanti Health Sys., LLC, 661 F.3d 1180, 1186
(9th Cir. 2011); Bloedorn v. Francisco Foods, Inc., 276 F.3d 270, 288 (7th Cir.
2001).
The ALJ found that GRS’s economic justification for closing the Tucson
facility was not a pretext. We must determine today whether a decision by the
Board that the Tucson closing was an unfair labor practice would be enforced by
this Court in light of the ALJ’s findings. “[A] reviewing court will review more
critically the Board’s findings of fact if they are contrary to the administrative law
judge’s factual conclusions.” Penasquitos Vill., Inc. v. NLRB, 565 F.2d 1074, 1078
(9th Cir. 1977) (citation omitted). This is particularly true where, as here, the
ALJ’s findings are based on credibility determinations. See Universal Camera
Corp. v NLRB, 340 U.S. 474, 496-97 (1951).
The linchpin of the reopening order was the district court’s conclusion, on
the paper record before it, that GRS likely acted out of anti-union animus in
closing the Tucson facility. Whatever the merits of the district court’s decision
when made, it cannot stand in light of the ALJ’s findings. I therefore agree that the
preliminary injunction should be vacated.
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