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Fallbrook Hospital Corporation v. California Nurses Association/National Nurses Organizing Committee

United States District Court, S.D. California

June 19, 2014

FALLBROOK HOSPITAL CORPORATION, Plaintiff,
v.
CALIFORNIA NURSES ASSOCIATION/NATIONAL NURSES ORGANIZING COMMITTEE (CNA/NNOC), AFL-CIO Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS THIRD AMENDED COMPLAINT WITH PREJUDICE [Dkt. No. 23.]

GONZALO P. CURIEL, District Judge.

Before the Court is Defendant California Nurses Association/National Nurses Organizing Committee's ("CNA/NNOC" or "CNA") motion to dismiss the third amended complaint ("TAC") under Federal Rule of Civil Procedure ("Rule") 12(b)(6). (Dkt. No. 23.) Plaintiff Fallbrook Hospital Corporation d/b/a Fallbrook Hospital filed an opposition and Defendant filed a reply. (Dkt. Nos. 25 & 26.) The motion is submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1). Based on the analysis below, the Court GRANTS Defendant's motion to dismiss with prejudice.

Background

Plaintiff Fallbrook Hospital operates an acute care hospital in Fallbrook, California. (Dkt. No. 20, TAC ¶ 5.) Defendant CNA/NNOC is a labor organization and was certified by the National Labor Relations Board ("NLRB") on May 24, 2012 as the exclusive collective bargaining representative of registered nurses employed by Fallbrook Hospital. (Id. ¶¶ 6, 7.) According to the third amended complaint, around March 13, 2012, the parties met to discuss an agreement between Fallbrook Hospital and the CNA "which would define certain terms and conditions to govern any organizing which might be conducted by the CNA among Registered Nurses employed by Fallbrook, and which would define a framework for the negotiation of an initial collective bargaining agreement in the event the CNA was certified by the NLRB as the exclusive collective bargaining agent for Fallbrook's Registered Nurses." (Dkt. No. 20, TAC ¶ 14.) At the meeting, the parties entered into a proposed labor relations agreement ("proposed LRA") where the parties agreed to submit any unresolved disputes about compliance with or construction of the Agreement to final and binding arbitration, including disputes related to the conduct of any collective bargaining negotiations which might ensue between the parties out of organizing activity on the part of the CNA at Fallbrook. (Id. ¶ 15.) They also agreed that they would work together to resolve issues through direct discussion and arbitration. (Id.) The CNA representatives assumed the responsibility of preparing an initial draft of the proposed LRA. (Id. ¶ 16.) Written drafts of the proposed LRA were then exchanged between the parties. (Id. ¶ 17.)

The proposed LRA contained an "Election Procedure Agreement" which defined certain terms and conditions governing any organizing the CNA might conduct among Registered Nurses employed by Fallbrook. (Id. ¶ 18.) According to these terms, the CNA was entitled to commence organizing among RNs employed by Fallbrook by serving a "Notice of Intent to Organize." (Id. ¶ 19.) In order for the "Notice of Intent to Organize" to be effective, the CNA would have to serve any such "Notice" within 48 hours of being notified by Fallbrook that it had received written notification from another specified labor organization that the other specified labor organization was commencing its own organizing activities among employees other than RN employed by Fallbrook. (Id. ¶ 20.) Around April, 10, 2012, an attorney from the other specified labor organization informed Carmody by telephone that a "Non-RN Notice of Intent to Organize" would be served later that day upon Fallbrook. (Id. ¶ 21.) Following that telephone conversation, the other specified labor organization served Fallbrook with a "Non-RN Notice of Intent to Organize." (Id. ¶ 22.)

On April 12, 2012, in a telephone conversation between Don Carmody, Fallbrook's representative, who is also an attorney, and Jane Lawhon, legal counsel for the CNA, Carmody informed Lawhon about Fallbrook's receipt of the Non-RN Notice of Intent to Organize." (Id. ¶ 23.) In that conversation, both discussed the fact that the proposed LRA required the CNA to satisfy the 48 hours requirements in order to serve an effective "Notice of Intent to Organize" the registered nurses at Fallbrook. (Id.) They also discussed that although Fallbrook and the CNA expected the proposed LRA would be mutually executed relatively soon, they were still in the process of exchanging comments regarding minor modifications to drafts. (Id. ¶ 24.) Further, Carmody proposed and Lawhorn agreed that the parties should simply orally agree to apply the terms memorialized in the most recent written draft copy of the proposed LRA with respect to the following terms: "a) the CNA's service of a Notice of Intent to Organize' the Registered Nurses employed by Fallbrook; b) [t]he CNA's subsequent organizing activity at Fallbrook; c) [t]he filing of a petition for an election with, and the conduct of a secret ballot election by, the National Labor Relations Board ("N.L.R.B."); and d) [t]he negotiation of an initial collective bargaining agreement in the event the CNA won an election and was certified by the NLRB, including the standard of the conduct of bargaining between the Parties as specified on page 5, Section 4(a)(2) of the Proposed LRA." (Id. ¶ 25.)

Pursuant to the Agreement, the CNA agreed to a standard that would apply to the parties' negotiations of a collective bargaining agreement ("CBA") and that the negotiations would be governed by a private standard developed by the parties whereby a private arbitrator would have jurisdiction to decide whether the CNA or Fallbrook had violated the private standard that would apply to the parties' negotiation of a collective bargaining agreement. (Id. ¶ 27.)

Pursuant to the terms of the Agreement, around May 16, 2012, the NLRB conducted a secret ballot election among the registered nurses employed at Fallbrook. (Id. ¶ 28.) Around May 24, 2012, the NLRB certified the CNA as the exclusive collective bargaining representative of registered nurses employed at Fallbrook. (Id. ¶ 29.) Around June 12, 2012, pursuant to the terms of the Agreement, the parties began collective bargaining. (Id. ¶ 31.)

To demonstrate that the parties were in compliance with the terms and conditions of the Agreement, Plaintiff points to numerous instances where the parties' conduct demonstrate compliance with the Agreement. (Id. ¶ 32.) Moreover, from April 12, 2012 until September 26, 2012, Plaintiff claims that the CNA sought to resolve all disputes through the dispute resolution procedure in the Agreement and presents two examples where the CNA informed Fallbrook that it would submit the disputes to an arbitrator. (Id. ¶¶ 33, 34.)

In addition, the TAC alleges that on July 3, 2012, the parties participated in a bargaining session pursuant to the Agreement when a dispute arose. (Id. ¶¶ 36, 38.) Mr. Carmody stated that when he told Matthews, the CNA representative, that he could take the matter to binding arbitration in compliance with the terms of the Agreement, Matthews did not state any disagreement that arbitration was the parties' agreed upon forum. (Id. ¶ 42.) Matthews ultimately filed an unfair labor practice charge against Fallbrook with the NLRB. (Id. ¶ 44.) Around July 2012, Plaintiff complains that Defendant breached the Agreement by failing and refusing to negotiate a collective bargaining agreement pursuant to the standards of bargaining defined in the Agreement for the conduct of collective bargaining negotiations between the Parties arising out of organizing activity on the part of the CNA at Fallbrook. (Id. ¶ 45.) Also, the CNA breached the Agreement by failing and refusing to submit to arbitration any disputes that arose during and were related to the collective bargaining between Fallbrook and the CNA pursuant to the Agreement. (Id. ¶ 46.)

Plaintiff has demanded that the CNA resolve "any and all disputes that arise from and are related to the Parties' negotiations of a collective bargaining agreement in compliance with the terms and conditions of the Agreement by going through binding arbitration with a private arbitrator." (Id. ¶ 47.) The Agreement's Dispute Resolution Procedure is mandatory. (Id. ¶ 49.) Plaintiff has complied with the terms and conditions of the Agreement. (Id. ¶ 50.)

Plaintiff brings this action under Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185 et seq. against Defendant for breaching an implied-in-fact contract by failing and refusing to negotiate a collective bargaining agreement pursuant to standards of bargaining defined by the Agreement for the conduct of collective bargaining negotiations between the parties arising out of organizing activity on the part of the CNA at Fallbrook; and failing to submit any disputes that arose during and were related to the collective bargaining between Fallbrook and the CNA pursuant to the Agreement. It alleges a cause of action for breach of contract and seeks relief in the form of damages, specific performance and declaratory relief.

A. Legal Standard on Federal Rule of Civil Procedure 12(b)(6)

Federal Rule of Civil Procedure ("Rule") 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't. , 901 F.2d 696, 699 (9th Cir. 1990). Under Federal Rule of Civil Procedure 8(a)(2), the plaintiff is required only to set forth a "short and plain statement of the claim showing that the pleader is entitled to relief, " and ...


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