Unpublished Disposition, 869 F.2d 1496 (9th Cir. 1987)

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US Court of Appeals for the Ninth Circuit - 869 F.2d 1496 (9th Cir. 1987)

No. 87-15102.

United States Court of Appeals, Ninth Circuit.

Before BRUNETTI and LEAVY, Circuit Judges, and CURTIS, District Judge.* 

MEMORANDUM** 

This is an appeal from the district court's denial of plaintiffs' motion to amend their complaint. We hold that the district court was correct in holding that the proposed amended complaint would be futile and that the district court's denial was proper. We AFFIRM.

FACTS

Plaintiffs/appellants are eight longshoremen members of defendant International Longshoremen's and Warehousemen's Union ("ILWU") Local 10 (the Longshoremen's Local). The other defendants are ILWU Local 34 (the Clerk's Local), and the Pacific Maritime Association ("PMA"), a multi-employer association of stevedore, shipping and terminal companies. The PMA negotiates and enters into contracts for employment with the ILWU.

In July 1972, defendant unions and defendant PMA entered into a "Tripartite Agreement" whereby appellants were reassigned from Local 10 to Local 34 for a period of not less than 30 days. The parties reserved the right under the terms of the agreement to modify, change and end the Tripartite Agreement.

Appellants continued working at Local 34 until March 1985, when pursuant to a Letter of Understanding dated March 7, 1985, appellants were reassigned to Local 10. The ILWU claims the reassignment was to make clerking jobs available to older or partially disabled workers on the Local 10 Dock Preference Board. Appellants, however, claim the reassignment was arbitrary and failed to serve the interests of all the members of Locals 10 and 34 in that it increased the amount of clerks' work to be performed by casual, non-union workers.

At the time of the reassignment, appellants were advised that they could submit to a medical examination to establish their possible eligibility to the Local 10 Dock Preference Board. Further, appellants over the age of 55 were automatically eligible to qualify for the Board. Nonetheless, appellants chose not to seek classification with the Board.

The appellants allege in their complaint that their reassignment to the Local 10 longshore hall was a breach of the Pacific Coast Longshore and Clerks Agreement ("PCLCA") and related agreements. They also challenged the decision to reassign them to the Local 10 hall under state laws for breach of an implied covenant of good faith and fair dealing and for intentional infliction of emotional distress.

The proceedings in the district court were stayed pending the resolution of appellants' grievances that had been previously filed under the PCLCA alleging breach of contract and discrimination under section 13 thereof in retaliation for their participation in other litigation against PMA.1 

After a hearing on the merits, the Coast Arbitrator denied appellants' grievances, and appellants took no action to have the arbitration decision vacated within the required six months of its issuance. Instead, after this period had elapsed, appellants filed their motion for leave to amend the complaint to state a claim against appellee unions for breach of the duty of fair representation and intentional infliction of emotional distress based upon the same facts raised in their initial complaint and grievance. The cross motion filed by the appellees for summary judgment and the opposition to appellants' motion to amend the complaint were granted upon the grounds that the contract claims were resolved by the arbitration decision and that the related state law claims were preempted by federal labor law. The district court also denied appellants' motion to amend their complaint because the proposed claim for breach of the duty of fair representation would be futile. The court ruled that the "factual predicates" of appellants' representation claim were raised and rejected at arbitration and "when coupled with the demanding legal standard for demonstrating a breach of the duty of fair representation, doom the plaintiffs' new theory as surely as they did the old one." Alley, et al. v. Int'l Longshoremen's and Warehousemen's Union, et al., No. C 85-3225, slip op. at 6 (N.D. Cal. Dec. 7, 1987) (footnote omitted).

STANDARD OF REVIEW

This court reviews the district court's denial of a motion for leave to amend for abuse of discretion. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987) (citing Loehr v. Ventura County Community College Dist., 743 F.2d 1310, 1313 (9th Cir. 1984); Klamath-Lake Pharm. Ass'n v. Klamath Medical Serv. Bureau, 701 F.2d 1276, 1292 (9th Cir.), cert. denied, 464 U.S. 822 (1983).

DISCUSSION

Pursuant to Federal Rule of Civil Procedure 15(a), leave to amend "shall be freely given when justice so requires." Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227 (1962); see generally, 6 C. Wright & A. Miller Federal Practice and Procedure Sec. 1487 (1971). Several factors which govern the propriety of a motion under Rule 15 are: (1) undue delay, (2) bad faith, (3) futility of amendment, and (4) prejudice to the opponent. Loehr, 743 F.2d at 1319; Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973). A plaintiff should be afforded an opportunity to test his claim on the merits if the underlying facts or circumstances relied upon by him are a proper subject of relief. Foman, 371 U.S. at 182; Klamath Lake, 701 F.2d at 1293 (futile amendments should not be permitted).

Appellants claim that there is a more stringent standard than that of futility for cases alleging a breach of the duty of fair representation. They rely on Conley v. Gibson, 355 U.S. 41 (1957) and Czosek v. O'Mara, 397 U.S. 25 (1970) for the proposition that plaintiffs should be given the opportunity to amend their pleadings when there is an allegation of a breach of the duty of fair representation unless it appears "beyond doubt" that they cannot state a good cause of action.

Although the Supreme Court in Conley cited cases which involved the alleged breach of the duty of fair representation, it merely reiterated that the "beyond doubt" standard applies generally to all pleadings, see Conley, 355 U.S. at 45-46; the Court did not limit the "beyond doubt" standard to allegations of a breach of duty. Similarly, the Court in Czosek, as in Conley, did not apply the "beyond doubt" standard solely to allegations of a union's breach of the duty of fair representation; the Court in both cases applied the standard to complaints in general. See Czosek, 397 U.S. at 27.

The "beyond doubt" standard, as appellees correctly assert, does not replace the well settled rule that a motion to amend may be denied if it would prove to be futile. The district court, therefore, used the correct legal standard in denying plaintiffs' motion to amend on the ground of futility.

Appellees argue that the district court, in considering their claim for the alleged breach of the duty of fair representation, erred by relying on the Coast Arbitrator's factual findings. They claim that the arbitrator's findings were limited to the issue of whether there was a breach of contract and not whether there was a breach of duty.

These same arguments were made at the district court level and rejected. Chief Judge Robert Peckham held that although a contractual breach claim is analytically different from a breach of duty claim, and although the breach of duty claim was not passed on by the Coast Arbitrator, the factual predicates of the claim had been raised and decided by the arbitrator. Alley v. ILWU, supra, No. C 85-3225, slip op. at 6. Thus, permitting appellants to amend their complaint to allege that the reassignment was arbitrary would be an exercise in futility since both the district court and the Coast Arbitrator have already ruled upon that issue.

In the proceeding before the arbitrator the plaintiffs argued that their reassignment by Letter of Understanding dated March 7, 1985 was arbitrary, unnecessary, and therefore contrary to the intent of the Collective Bargaining Agreement, and as such constituted a breach of that Agreement. The arbitrator concluded that the reassignment was made in good faith, upon sufficient cause, and therefore did not breach the Agreement.

In the proposed amended complaint, plaintiffs claim a breach of the duty of fair representation, alleging that: "Defendants by reassigning Plaintiffs out of Local 34 and back to Local 10 have acted in an arbitrary fashion, and have failed to serve the interests of the union members for which they have a statutory obligation to fairly represent...." A finding by the arbitrator that the reassignments were not arbitrary, but were made upon good and sufficient cause, dooms the cause of action for breach of the duty of fair representation which forms the basis for plaintiffs' proposed amended complaint. The district court, therefore, did not err in denying appellants leave to amend the complaint since the facts upon which their proposed claim was predicated had previously been determined adverse to them. See Kasey v. Molybdenum Corp., 467 F.2d 1284, 1285 (9th Cir.), cert. denied, 409 U.S. 1063 (1972).

For the foregoing reasons, the district court's order denying appellants' motion to amend is AFFIRMED.

 *

Honorable Jesse W. Curtis, United States District Judge for the Central District of California, sitting by designation

 **

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3

 1

The retaliation claim later alleged in the complaint was subsequently withdrawn