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Hospital of Barstow, Inc. v. California Nurses Association

United States District Court, C.D. California

September 18, 2014

HOSPITAL OF BARSTOW, INC.,
v.
CALIFORNIA NURSES ASSOCIATION/NATIONAL NURSES ORGANIZING COMMITTEE

Robert Rosenthal, Attorneys Present for Plaintiffs.

Nicole Daro, Attorneys Present for Defendants.

CIVIL MINUTES - GENERAL

CHRISTINA A. SNYDER, District Judge.

Proceedings: DEFENDANT'S MOTION FOR ATTORNEYS' FEES (Dkt. #32, filed August 8, 2014)

I. INTRODUCTION

Plaintiff Hospital of Barstow filed this action on June 13, 2013, against defendant California Nurses Association/National Nurses Organizing Committee. The underlying litigation arises from disputes between plaintiff, a hospital, and defendant, the union certified by the NLRB as the representative of registered nurses employed by plaintiff. Plaintiff filed its lawsuit under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, et seq. Plaintiff filed a first amended complaint ("FAC") on July 2, 2013. Dkt. #7. Defendant filed a motion to dismiss the FAC pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) on July 26, 2013. By order dated August 26, 2013, the Court granted defendant's motion to dismiss. Dkt. #16. Plaintiff filed a second amended complaint ("SAC") on September 26, 2013, seeking damages, specific performance, and declaratory relief under Section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185(a), arising from an alleged breach of an oral collective bargaining agreement. Dkt. #19. By order dated November 18, 2013, the Court granted defendant's motion to dismiss the SAC with prejudice. Dkt. #24. Plaintiff appealed the dismissal of the SAC to the Ninth Circuit on December 18, 2013. Dkt. #25. On July 2, 2014, the Ninth Circuit granted the parties' motion to voluntarily dismiss the appeal. Dkt. #29. On July 23, 2014, defendant lodged a proposed entry of judgment with the Court. Dkt. #30. On July 25, 2014, the Court entered judgment for defendant. Dkt. #31.

On August 8, 2014, defendant filed a motion for attorneys' fees. Dkt. #32. This motion seeks attorneys' fees as a sanction pursuant to the Court's inherent powers and under 28 U.S.C. § 1927. Id . Plaintiff filed an opposition to the motion on August 25, 2014. Dkt. #33. Defendant replied on September 2, 2014. Dkt. #35. After considering the parties' arguments, the Court finds and concludes as follows.

II. BACKGROUND

Plaintiff operates an acute care hospital in Barstow, California. SAC ¶ 5. Defendant is a labor organization with its principal place of business in Oakland, California. Id . ¶ 6. On June 29, 2012, the National Labor Relations Board ("NLRB") certified defendant as the exclusive collective bargaining representative of the registered nurses employed by plaintiff. Id . ¶ 7.[1]

A. Litigation in This Court

In its now-dismissed action, plaintiff alleged that, prior to certification, representatives of defendant entered into an oral collective bargaining agreement with plaintiff. Id . ¶¶ 15, 18-20. Plaintiff also claimed that, on or about April 12, 2012, the parties communicated regarding defendant's service on plaintiff of a notice of intent to organize. Id . ¶¶ 21-23. Plaintiff alleged that these communications included a telephone conversation between Don Carmody ("Carmody") and Jane Lawhon ("Lawhon"), one of defendant's attorneys. Id . ¶ 24. Plaintiff contended that, during that telephone conversation, Carmody proposed to Lawhon that the parties orally agree to the terms contained in the most recent draft of the proposed labor relations agreement with regard to several items. Id . ¶ 25. Plaintiff claimed that Lawhon agreed to this proposal. Id . ¶ 39. Plaintiff also alleged a course of conduct by defendant that, according to plaintiff, served to ratify the oral collective bargaining agreement. Id . ¶¶ 31-32. Finally, plaintiff claimed that defendant breached the alleged oral agreement by refusing to negotiate pursuant to its standards and filing unfair labor practice ("ULP") charges with the NLRB instead of submitting the disputes to arbitration under the purported agreement.

In its November 18, 2013 order, the Court granted defendant's motion to dismiss the SAC with prejudice. Dkt. #24. The Court noted that no case law supported the proposition that parties may enter into an oral collective bargaining agreement, but relied on other grounds in finding that plaintiff had failed to state a claim for breach of the alleged oral agreement. Id. at 7. First, the Court concluded that the SAC failed to allege that the parties agreed to submit their charges to arbitration or that defendant waived its right to file ULP charges with the NLRB. Id . In so concluding, the Court reasoned that plaintiff based its contention that the parties had agreed to arbitrate any disputes on the terms of a proposed agreement that had not been executed. Id. at 8. The Court also found that allegations that defendant had submitted some disputes to arbitration were insufficient to support a contention that defendant waived its right to ever bring ULP charges before the NLRB. Second, the Court found that even if the SAC contained allegations of a waiver of defendant's right to file ULP charges, such a waiver would be unenforceable under the National Labor Relations Act. Id. at 9-11. Finally, the Court concluded that dismissal with prejudice was appropriate. The court reasoned that the SAC "suffers from the same deficiency as the FAC, namely, that it lacks factual allegations supporting plaintiff's contention that the parties orally agreed to arbitrate all disputes" and that amendment would be futile because any waiver plaintiff could allege would be unenforceable. Id. at 13.

B. Unfair Labor Practice Proceedings Before the NLRB

As mentioned above, plaintiff's claims were based largely on defendant's filing ULP charges with the NLRB instead of submitting the disputes to arbitration under the purported agreement. Two of these charges were the subject of an administrative law judge ("ALJ") decision adverse to plaintiff. See Hosp. of Barstow, Inc. ("ALJ Hearing"), JD(SF)-41-13, 2013 WL 4835039 (Sept. 9, 2013), adopted as modified by Hospital of Barstow, Inc. ("NLRB Order"), 361 N.L.R.B. No. 34 (Aug. 29, 2014). The ALJ ruled against defendants, on September 9, 2013, finding no agreement to arbitrate, oral or otherwise. See ALJ Hearing, 2013 WL 4835039. The NLRB affirmed that decision on August 29, 2014. See NLRB Order, 361 N.L.R.B. No. 34, at *1 n.3 ("The parties have no collective-bargaining agreement setting forth an agreed-upon grievance-arbitration procedure.").

III. ANALYSIS

A. The Timeliness of ...


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