UNITE HERE LOCAL 30 V. SYCUAN BAND, No. 21-55017 (9th Cir. 2022)
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The Sycuan Band of the Kumeyaay Nation (“Sycuan” or “Tribe”), a federally recognized Indian tribe, sought the reversal of the district court’s order granting labor union, Unite Here Local 30’s (“Unite Here”), motion for judgment on the pleadings with respect to its own complaint and motion to dismiss Sycuan’s counterclaim. Unite Here alleged that Sycuan violated the labor provisions of a contract between the two parties respecting the operation of a casino. The union brought suit to compel arbitration of that dispute pursuant to a clause contained in the contract. Sycuan opposed arbitration.
The Ninth Circuit affirmed the district court’s judgment on the pleadings in favor of Unite Here and the district court’s dismissal of a counterclaim brought by Sycuan. The court held the district court had original jurisdiction over Unite Here’s claims. Further, the court held that the district court had supplemental, but not original, jurisdiction over Sycuan’s counterclaim because the Declaratory Judgment Act does not confer jurisdiction, and Section 301 of the Labor Management Relations Act could not confer federal question jurisdiction.
The court concluded that the arbitrator should decide issues of contract validity, and the counterclaim rested on an issue of contract validity. Accordingly, the district court’s declining to exercise supplemental jurisdiction served economy, convenience, and fairness. The court also held that Unite Here and Sycuan formed an agreement to arbitrate because Sycuan promised California that if any union made certain promises to the tribe, Sycuan would automatically enter into a bilateral contract with that union adopting the TLRO’s terms.
Court Description: Labor Law / Arbitration / Indian Gaming. Regulatory Act The panel affirmed the district court’s judgment on the pleadings in favor of labor union Unite Here Local 30 and the district court’s dismissal of a counterclaim brought by the Sycuan Band of the Kumeyaay Nation, a federally recognized Indian tribe. The union brought suit to compel arbitration of its allegation that Sycuan violated the labor provisions of the parties’ contract respecting the operation of a casino. Sycuan opposed arbitration principally because it believed that federal labor law preempted its contract with the State of California that had required it to enter into the contract with Unite Here. In its counterclaim, Sycuan sought a declaratory judgment that federal law preempted the labor organizing provisions of its contract with California, a gaming compact governed by the Indian Gaming Regulatory Act. These provisions required Sycuan to adopt and maintain a Tribal Labor Relations Ordinance (TLRO), which set forth the parties’ agreement about specific labor rights for casino employees and included an arbitration provision. Unite Here alleged that Sycuan violated the TLRO by refusing the union’s demands regarding its intention to organize the casino employees. The panel held that the district court had original jurisdiction over Unite Here’s claims pursuant to 28 U.S.C. UNITE HERE LOCAL 30 V. SYCUAN BAND 3 § 1331 and 29 U.S.C. § 185. The panel held that the district court had supplemental, but not original, jurisdiction over Sycuan’s counterclaim because the Declaratory Judgment Act does not confer jurisdiction, and § 301 of the Labor Management Relations Act could not confer federal question jurisdiction because Sycuan’s challenge was to the agreement between Sycuan and the State of California, rather than to a contract between an employer and a labor organization. The panel held that the district court did not abuse its discretion in declining to exercise its supplemental jurisdiction because adjudicating the counterclaim in federal court would interfere with the arbitrator’s authority. The panel concluded that the district court was correct that the arbitrator should decide issues of contract validity, and the counterclaim rested on an issue of contract validity. Accordingly, the district court’s declining to exercise supplemental jurisdiction served economy, convenience, and fairness. Further, as argued by the State of California in its amicus brief, Sycuan did not give the State notice before filing the counterclaim, as required by the gaming compact, and the State was not a party to this suit seeking to invalidate the compact. Addressing contract formation, the panel held that Unite Here and Sycuan formed an agreement to arbitrate because, in the TLRA, Sycuan promised California that if any union made certain promises to the tribe, Sycuan would automatically enter into a bilateral contract with that union adopting the TLRO’s terms. The panel concluded that Unite Here made such promises, and a contract was formed, because the TLRO was essentially an open-ended offer to any union to enter into a bilateral contract. With respect to the validity of the contract between United Here and Sycuan, the panel declined to address 4 UNITE HERE LOCAL 30 V. SYCUAN BAND Sycuan’s argument that there was no enforceable promise to arbitrate because the National Labor Relations Act preempted the TLRO. The panel held that the preemption argument challenged the contract as a whole and therefore was a question for the arbitrator to decide. Rejecting Sycuan’s argument that arbitrating NLRA preemption would infringe on its tribal sovereign immunity, the panel concluded that in the TLRO there was an express waiver of sovereign immunity from suit for the purpose of compelling arbitration.
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