Granite Rock Co. v. International Brotherhood of Teamsters, Freight, Construction, General Drivers, Warehousemen & Helpers , 649 F.3d 1067 ( 2011 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GRANITE ROCK COMPANY, 
Plaintiff-Appellee,
v.
INTERNATIONAL BROTHERHOOD OF No. 07-16142
TEAMSTERS, FREIGHT,
CONSTRUCTION, GENERAL DRIVERS, D.C. No.
WAREHOUSEMEN & HELPERS, LOCAL  CV-04-02767-JW
Northern District of
287 (AFL-CIO),
Defendant-Appellant, California,
San Jose
and
INTERNATIONAL BROTHERHOOD OF
TEAMSTERS,
Defendant.

GRANITE ROCK COMPANY, 
Plaintiff-Appellant,
No. 07-16236
v. D.C. No.
INTERNATIONAL BROTHERHOOD OF CV-04-02767-JW
TEAMSTERS, FREIGHT,  Northern District of
California,
CONSTRUCTION, GENERAL DRIVERS,
WAREHOUSEMEN & HELPERS, LOCAL San Jose
287 (AFL-CIO) and INTERNATIONAL ORDER
BROTHERHOOD OF TEAMSTERS,
Defendants-Appellees.

Filed May 20, 2011
6655
6656 GRANITE ROCK CO. v. TEAMSTERS
Before: Ronald M. Gould and Carlos T. Bea, Circuit Judges,
and John W. Sedwick, District Judge.*
ORDER
Granite Rock Company (“Granite Rock”) sued Interna-
tional Brotherhood of Teamsters, Local 287 (“Local”) and
International Brotherhood of Teamsters (“IBT”) under section
301(a) of the Labor Management Relations Act (“LMRA”)
with claims relating to a collective bargaining agreement
(“CBA”). Granite Rock seeks remedies against Local for
breach of the CBA. We reversed the district court’s denial of
Local’s motion to compel arbitration on the question of con-
tract formation. The Supreme Court subsequently granted cer-
tiorari and reversed this court on this issue. Granite Rock Co.
v. Int’l Bhd. of Teamsters, 130 S. Ct. 2847 (2010). On
remand, we ordered the parties to file supplemental briefs
addressing what further proceedings are required consistent
with the Supreme Court’s opinion.
The parties filed supplemental briefs discussing the follow-
ing issues: (1) whether the district court erred by denying
Local’s motion to strike Granite Rock’s jury demand; and (2)
whether the district court erred when it held that the National
Labor Relations Board’s (“NLRB”) decision that the CBA
was not ratified on July 2, 2004, did not collaterally estop
Granite Rock from re-litigating the issue in the district court.
We conclude the district court did not err on these issues. We
thus affirm the district court’s holding on these two issues and
remand the case to the district court for further proceedings
consistent with this disposition.
*The Honorable John W. Sedwick, District Judge for the U.S. District
Court for Alaska, Anchorage, sitting by designation.
GRANITE ROCK CO. v. TEAMSTERS 6657
I
The district court did not err by denying Local’s motion to
strike Granite Rock’s jury demand. A district court’s decision
to grant a jury trial is reviewed de novo. United States v. Cal.
Mobile Home Park Mgmt. Co., 107 F.3d 1374, 1377 (9th Cir.
1997). The resolution of that issue depends upon whether
plaintiff’s claim is properly characterized as legal or equita-
ble. Chauffeurs, Teamsters and Helpers, Local 391 v. Terry,
494 U.S. 558, 564 (1990). The Supreme Court has established
a two-part test for making that determination. Tull v. United
States, 481 U.S. 412, 417 (1987). First, a court determines
whether the claim was historically tried to juries in the court
of law before the courts of law and equity merged. Id. Second,
a court determines whether the remedy sought is legal or equi-
table. Id. at 417-18. In close cases, a court should err on the
side of preserving the right to a jury trial. See Beacon The-
atres, Inc. v. Westover, 359 U.S. 500, 510 (1959).
In this case, Granite Rock asserted a cause of action under
section 301(a) of the LMRA for breach of the no-strike provi-
sion in the July 2, 2004, CBA. As to the first prong of Terry,
the issues in this case—the existence and breach of contract
and the amount of damages—traditionally were legal in
nature and tried by a jury under the Seventh Amendment. See,
e.g., Dairy Queen, Inc. v. Wood, 369 U.S. 469, 479-80 (1962);
Scott v. Neely, 140 U.S. 106, 110 (1891). Furthermore, in
Terry, the Supreme Court held that employees who brought
a section 301 action alleging breach of a CBA had a constitu-
tional right to a trial by jury. Terry, 494 U.S. at 573-74. Spe-
cifically, Terry held that the section 301 issue “is comparable
to a breach of contract claim—a legal issue.” Id. at 569-70
(emphasis added).
As to the second prong of the Terry test, Granite Rock was
seeking monetary damages. A request for monetary damages
is also generally legal in nature in these circumstances. See id.
at 570-71. Hence, because Granite Rock’s claim was one for
6658 GRANITE ROCK CO. v. TEAMSTERS
monetary damages for a breach of contract—an essentially
legal claim—the district court did not err in submitting the
issue of the CBA formation to the jury.
II
The district court did not err by denying Local’s summary
judgment motion, which contended collateral estoppel pre-
cluded Granite Rock from asserting Local ratified the CBA on
July 2, 2004. The availability of issue preclusion is reviewed
de novo. Robi v. Five Platters, Inc., 838 F.2d 318, 321 (9th
Cir. 1988).
In Reyn’s Pasta Bella, LLC v. Visa USA, Inc. 442 F.3d 741
(9th Cir. 2006), we explained that collateral estoppel applies
to preclude an issue adjudicated in an earlier proceeding if:
(1) the issue was necessarily decided at the previous proceed-
ing and is identical to the one which is sought to be re-
litigated; (2) the first proceeding ended with a final judgment
on the merits; and (3) the party against whom collateral estop-
pel is asserted was a party or in privity with a party at the first
proceeding. Id. at 746 (citing Kourtis v. Cameron, 419 F.3d
989, 994 (9th Cir. 2005)).
Here, these requirements are not met. First, the parties in
the administrative proceeding—the NLRB and Local—did
not contest whether Local held a ratification vote on July 2,
2004, so the administrative law judge (“ALJ”) did not decide
the issue on the merits. Rather, both the NLRB and Local
averred Local did not hold a ratification vote on that date.
Issues not litigated on the merits are not subject to collateral
estoppel. See Sekaquaptewa v. MacDonald, 575 F.2d 239,
247 (9th Cir. 1978).
Second, Granite Rock was not a party or in privity with
Local in the administrative hearing. Granite Rock filed a com-
plaint with the NLRB; NLRB investigated the complaint and
brought an enforcement action, on the government’s behalf,
GRANITE ROCK CO. v. TEAMSTERS 6659
against Local. Thus, the parties were the NLRB and Local—
not Granite Rock.
Furthermore, Granite Rock and the NLRB were not in priv-
ity. Although Granite Rock, as a “charging party,” is allowed
a significant role in NLRB proceedings, it may not direct the
course of litigation or control the theories of the case. It is a
longstanding principle in this court that a privity finding “ne-
cessitates a showing that control was exercised over the litiga-
tion by the party alleged to be in privity.” Troy Co. v. Prods.
Research Co., 339 F.2d 364, 367 (9th Cir. 1964). Because
Granite Rock could not control the NLRB’s litigation strat-
egy, it was not in privity with the agency. Accordingly, the
district court’s denial of Local’s summary judgment motion as
to issue preclusion was proper.
III
In light of Granite Rock Co., 130 S. Ct. 2847, which
reversed the judgment of this court, 546 F.3d 1169, and
remanded, we in turn remand this case to the district court for
further proceedings in accordance with the Supreme Court’s
decision and with this order.
AFFIRMED and REMANDED.