AMERCO v. National Labor Relations Board
Opinion of the Court
We must address a question that we have never explicitly addressed: whether a district court has jurisdiction to enjoin an ongoing unfair labor practices hearing when one party asserts that it has not been accorded all the process it is due. Because the answer is squarely controlled by Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638 (1938), we affirm the district court’s order dismissing the Appellants’ motion for a preliminary injunction based on lack of subject matter jurisdiction. In accordance with Myers and all of our sister circuits that have considered this question, we hold that the petition for review process detailed in the National Labor Relations Act, 29 U.S.C. § 160(f), which authorizes appellate court review of final decisions by the National Labor Relations Board, is the exclusive mechanism for federal court review of decisions made in unfair labor practice hearings.
I.
In 2003, the National Labor Relations Board (NLRB) initiated a complaint
The NLRB filed a Fourth Consolidated Complaint against U-Haul on December 24, 2003, setting a hearing date before an Administrative Law Judge (ALJ) for January 12, 2004. At some point between December 24, 2003, and January 7, 2004, officials in the NLRB’s Region. 28 office uncovered alleged unfair labor practice violations associated with the facility closure by U-Haul’s parent companies AMERCO, U-Haul International, and Oxford Life Insurance Company (collectively “AMER-CO”),
The hearing against U-Haul began as planned on January 12. After three weeks of testimony, a significant part of which had focused on U-Haul’s relationship with AMERCO, the NLRB filed a Fifth Consolidated Complaint on February 5, 2004. The Fifth Consolidated Complaint included the two independent allegations of unfair labor practices against AMERCO. It also charged them with being a “single employer” and a “single integrated enterprise” with U-Haul. The “single integrated enterprise” allegation was particularly troubling for AMERCO, because, if proven, it would make them derivatively liable for any violations found to have been committed by U-Haul.
Over AMERCO’s objections, the ALJ granted the NLRB’s motion to consolidate the Fifth Complaint into the ongoing trial. In an effort to accommodate AMERCO’s due process and fairness concerns, the ALJ granted AMERCO the right to recall any witnesses or challenge any evidence relating to its relationship with U-Haul (the basis for derivative liability). However, he denied their request to recall witnesses and challenge evidence associated only with U-Haul’s liability for the primary offenses. His order explained:
Since the primary issue for resolution is really the derivative liability of the new respondents, there has been no prejudice to respondents as these issues have yet to be litigated. If the new respondents are given an opportunity to prepare and an opportunity to present evidence, including the right to examine and cross-examine any witnesses called on the issues of derivative liability, as well as the [independent charges against AMERCO], including the right to call those who have already testified ... on these issues, they will be afforded a full and fair hearing on the issues affecting them.
After the denial of their numerous requests for a continuance, motions for reconsideration, and efforts to obtain in
After the district court denied a motion to stay the ALJ proceedings pending appeal, the hearing resumed and ultimately concluded in July 2005. The ALJ reached a decision on September 30, 2005, and both parties have filed exceptions to the decision, 29 C.F.R. § 101.11, on which the NLRB has yet to rule.
II.
We have jurisdiction over this appeal from the district court’s final order pursuant to 28 U.S.C. § 1291. We review de novo the district court’s grant of a motion to dismiss for lack of subject matter jurisdiction. See Luong v. Circuit City Stores, Inc., 368 F.3d 1109, 1111 n. 2 (9th Cir. 2004).
III.
A.
We requested supplemental briefing as to whether this appeal has become moot. “The test for mootness of an appeal is whether the appellate court can give the appellant any effective relief in the event that it decides the matter on the merits in his favor.” Garcia v. Lawn, 805 F.2d 1400, 1402 (9th Cir. 1986). That the unfair labor practice hearing AMERCO sought to enjoin has since concluded is not dispositive. We recently reiterated that “[t]he question is not whether the precise relief sought at the time of the application for an injunction was filed is still available. The question is whether there can be any effective relief.” Earth Island Inst. v. U.S. Forest Serv., 442 F.3d 1147, 1157 (9th Cir. 2006) (internal quotation marks omitted). The NLRB has not yet issued a “final order” in the proceedings before it, a decision which would enable appellate review pursuant to 29 U.S.C. § 160(f). Because the underlying proceedings are still in progress, we could reverse the district court’s decision that it lacked jurisdiction to enjoin the proceedings and order that it “undo” the alleged constitutional injuries by restoring the pre-consolidation status quo, thus providing AMERCO complete and effective relief. See Earth Island Inst., 442 F.3d at 1157-58; Garcia, 805 F.2d at 1402-03. Therefore, this case is not moot.
Regardless of the viability of AMERCO’s constitutional claims, the district court lacked jurisdiction to remedy them. Section 10 of the National Labor Relations Act, which defines the procedure for adjudicating unfair labor practice claims, vests exclusive jurisdiction in the courts of appeals to review errors arising from such proceedings:
Any person aggrieved by a final order of the Board granting or denying in whole or in part the relief sought may obtain a review of such order in any United States court of appeals in the circuit wherein the unfair labor practice in question was alleged to have been engaged in ... by filing in such a court a written petition praying that the order of the Board be modified or set aside.
29 U.S.C. § 160(f)- Section 10 provides no separate process for obtaining injunctive relief prior to the issuance of a final order.
In Myers, the Supreme Court confronted the precise question raised here: whether a district court has the authority to enjoin an unfair labor practice hearing when the corporation under investigation claims that the hearing is proceeding in violation of the United States Constitution. 303 U.S. at 43, 46, 58 S.Ct. 459. The Court answered in the negative, emphasizing that review in the courts of appeals is both exclusive and comprehensive. Id. at 48, 58 S.Ct. 459. The Myers Court explained that the scope of the review authorized by Section 10(f) allows an appellate court to consider “all questions of the jurisdiction of the Board and the regularity of its proceedings, [and] all questions of constitutional right or statutory authority.” Id. at 49, 58 S.Ct. 459; see also Detroit Newspaper Agency v. NLRB, 286 F.3d 391, 400-01 (6th Cir. 2002) (following Myers).
AMERCO contends that, despite this language, the Supreme Court intended that injunctive relief should be available in the district courts to remedy procedural due process violations. For this proposition, AMERCO points to one sentence in the Myers opinion, in which the Court noted that in the case before it, there was “no claim by the corporation that the statutory provisions and the rules of procedure prescribed for such hearings are illegal; or that the corporation was not accorded ample opportunity to answer the complaint of the Board; or that opportunity to introduce evidence on the allegations made will be denied.” 303 U.S. at 47, 58 S.Ct. 459. Appellants construe this sentence as a declaration that any time a corporation claims it was not afforded “ample opportunity” to answer the complaint or to introduce evidence it wishes to admit in an unfair labor practice hearing, immediate remedy may be sought in the district court. We reject such a strained reading of Supreme Court precedent.
First, AMERCO does not cite, and we cannot find, any case law supporting such a broad interpretation. Indeed, a number of our sister circuits have rejected the proposition that procedural due process claims warrant departure from the Myers rule. See, e.g., J.P. Stevens Employees Educ. Comm. v. NLRB, 582 F.2d 326, 328-29 (4th Cir. 1978) (district court lacked jurisdiction to review ALJ’s denial of motion to intervene, even though the ALJ’s ruling implicated due process and impeded the organization’s ability to respond to the complaint and introduce evidence); Bokat v. Tidewater Equip. Co., 363 F.2d 667, 670-71 (5th Cir. 1966) (district court lacked jurisdiction to grant injunctive relief when employer claimed that the failure to sever unfair labor practice charges violated due process).
Second, allowing parties to seek injunctive relief whenever an “opportunity to
Third, and most important, the exception advanced by AMERCO is inconsistent with the doctrine of administrative exhaustion. Exhaustion serves two vital purposes: first, to give the agency an initial opportunity to correct its mistakes before courts intervene; and second, to enable the creation of a complete administrative record should judicial review become necessary. Ngo v. Woodford, 403 F.3d 620, 624 (9th Cir. 2005), rev’d on other grounds, — U.S.—, 126 S.Ct. 2378, 165 L.Ed.2d 368 (2006). If we allowed companies accused of unfair labor practices to raise their procedural claims in federal court before the NLRB had a chance to review their grievances, we would be “substitut[ing] the District Court for the Board as the tribunal to hear and determine what Congress declared the Board exclusively should hear and determine in the first instance.” Myers, 303 U.S. at 50, 58 S.Ct. 459. As the Myers Court concluded, such an approach would be “at war with the long-settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.” Id. at 50-51, 58 S.Ct. 459.
At this time, the NLRB has taken under submission both parties’ exceptions to the ALJ’s September 2005 ruling. The NLRB may yet decide that AMERCO’s due process rights were violated and that the ALJ hearing must be reopened to allow them to participate fully in the litigation of U-Haul’s primary liability. If, on the other hand, the NLRB rejects these due process claims, AMERCO may at that point raise them before us, pursuant to 29 U.S.C. § 160(f). Given the possibility of correction by the administrative agency and the availability of federal appellate review, district court jurisdiction at this stage would be both premature and contrary to congressional intent.
C.
We also reject AMERCO’s argument that the district court may exercise jurisdiction pursuant to Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958) (allowing district court jurisdiction to enjoin the NLRB from acting in a manner clearly contrary to statutory direction), or Fay v. Douds, 172 F.2d 720 (2d Cir. 1949) (Hand, J.) (suggesting that district court jurisdiction is appropriate whenever a party in a labor dispute asserts non-frivolous claims of a constitutional violation). Neither of these cases is applicable here. Both Leedom and Fay arose in the context of Section 9 representation proceedings, see 29 U.S.C. § 159 (establishing procedures for selecting union representation and determining appropriate bargaining units), which are distinct from Section 10 unfair labor practice hearings in a way critical to our decision. Whereas Congress explicitly authorized appellate review of every NLRB unfair labor practice decision, Congress provided no similar check
The exceptions of Fay and Leedom derive from the inequity that would result if no court could review claims that the NLRB acted unconstitutionally or contrary to statutory authority in a Section 9 determination. The Supreme Court explained in Leedom:
[Ajbsence of jurisdiction of the federal courts would mean a sacrifice or obliteration of a right which Congress has given professional employees, for there is no other means, within their control, to protect and enforce that right. And the inference is strong that Congress intended the statutory provisions governing the general jurisdiction of those courts to control.
358 U.S. at 190, 79 S.Ct. 180 (alterations omitted) (citations and internal quotation marks omitted); see also Fay, 172 F.2d at 723. Therefore, both cases held that the district court has jurisdiction to enter injunctive relief against certain representation decisions when a party’s statutory or constitutional rights otherwise might never be vindicated.
This principle and its limited scope were reinforced in Board of Governors of the Federal Reserve System v. MCorp Financial, Inc., 502 U.S. 32, 112 S.Ct. 459, 116 L.Ed.2d 358 (1991). The MCorp Court reviewed the validity of an injunction requiring the Federal Reserve Board (FRB) to halt an enforcement action it had instituted against a bank. Although the Court of Appeals acknowledged that a federal statute explicitly precluded the district courts from enjoining such enforcement proceedings, id. at 36-37, 112 S.Ct. 459, it invoked Leedom for the principle that the district court nonetheless possessed jurisdiction because MCorp alleged that the FRB was enforcing a regulation that exceeded its statutory authority, id. at 42-43, 112 S.Ct. 459. The Supreme Court reversed. It reasoned that because the relevant statute “expressly provides MCorp with a meaningful and adequate opportunity for judicial review of the validity of the [regulation]” after the FRB issues a final order, the district court could not exercise jurisdiction. Id. at 43, 112 S.Ct. 459; see also id. (noting that “central to [Leedom] was the fact that the Board’s interpretation of the Act would wholly deprive the union of a meaningful and adequate means of vindicating its statutory rights”).
We recognize the necessity of providing a forum for the vindication of statutory and constitutional rights, but that is not a concern here. As was the case with the statutory question in MCorp, any constitutional infirmities raised by AMERCO can be remedied on petition for review from a final order of the NLRB. In fact, the primary case cited by AMERCO to support the merits of their due process claims was decided on a petition for review of a final order, pursuant to Section 10(f). See N. Mont. Health Care Ctr. v. NLRB, 178 F.3d 1089, 1093, 1098 (9th Cir. 1999) (as amended); see also Viking Indus. Sec., Inc. v. NLRB, 225 F.3d 131, 134-36 (2d Cir. 2000). Therefore, we hold that the Leedom and Fay exceptions do not apply outside the context of Section 9 actions or
In a final effort to prop up their jurisdictional argument, AMERCO cites three out-of-circuit district court cases. See McCormick v. Hirsch, 460 F.Supp. 1337 (M.D.Pa. 1978); Caulfield v. Hirsch, No. 76-279, 1977 WL 15572 (E.D.Pa. July 7, 1977); Council 19 v. NLRB, 296 F.Supp. 1100 (N.D.Ill. 1968). None of these, however, is on point. The first two cases, McCormick and Caulfield, involved unionization in parochial schools and its impact on First Amendment religious freedoms. While the two opinions used unnecessarily broad language to describe the reach of Fay, they both arose in Section 9 representation disputes and, as in Leedom and Fay, depended on the fact that judicial “review at that stage is not even possible.” McCormick, 460 F.Supp. at 1346. The third case, Council 19, also arose from a Section 9 dispute. In that case, Council 19 of the American Federation of State, County, and Municipal Employees sought injunctive relief after the Regional Director of the NLRB dismissed its petition to be certified as the exclusive bargaining representative for a group of nurses’ aids and orderlies. 296 F.Supp. at 1101-02. AMERCO relies heavily on one sentence from that opinion: “Although most of the reported cases deal with district court jurisdiction in election cases rather than unfair labor practice cases, the same general rule and[the Leedom and Fay exceptions] appear to apply to both situations.” Id. at 1103. This slim reed of dictum, unsupported by any reasoning in the opinion, does not support the analytical leap AMERCO urges us to make, from situations in which judicial review is not available at all to situations in which judicial review simply is not available yet. Relying instead on the guidance of the Supreme Court in MCorp, we hold that a district court may intervene in an ongoing labor dispute to remedy alleged statutory or constitutional violations only where meaningful judicial review is otherwise unavailable.
Each of our sister circuits that has considered this question has answered it as we do, holding that Leedom and Fay are inapplicable to Section 10 unfair labor practice hearings. See Interstate Dress Carriers, 610 F.2d at 107; J.P. Stevens, 582 F.2d at 328-29; Grutka v. Barbour, 549 F.2d 5, 9 & n. 7 (7th Cir. 1977); Bokat, 363 F.2d at 672-73.
IV.
The Supreme Court’s decision in Myers requires that employers exhaust their con
AFFIRMED.
. U-Haul International provides accounting, technical, and advisory services to a number of independently operated subsidiaries that provide direct moving-related services to consumers. U-Haul is one of its subsidiaries but is not a party to this appeal. AMERCO is a holding company that holds the stock of four corporations, including U-Haul International and Appellant Oxford Life Insurance Company-
. The Complaint also named Five Sac Self-Storage Corporation, Sac Holding Corporation, and Sac Holding Corporation II. The record does not explain their lack of partic- ■ ipation in this appeal.
. The record does not inform us precisely how the ALJ ruled on the numerous issues before him, but given that AMERCO filed exceptions to his decision, as well as a motion to reopen the record, we assume that the ALJ ruled at least in part against them.
. That we have cited Fay approvingly on a handful of occasions over the past four decades is of no consequence. None of the decisions citing Fay found it applicable in Section 10 proceedings, and, indeed, most have noted that the doctrine is applicable only in representation disputes. See, e.g., Cannery Warehousemen, Food Processors, Drivers & Helpers for Teamsters Local Union # 748 v. Haig Berberian, Inc., 623 F.2d 77, 79 & n. 2 (9th Cir. 1980) (describing Fay as an "obscure” exception to the rule of "non-reviewability of representation decisions”); Teamsters, Chauffeurs, Helpers & Delivery Drivers, Local 690 v. NLRB, 375 F.2d 966, 969-70 (9th Cir. 1967) (describing Fay as one of three "extraordinary circumstances” in which a district court may enjoin representation proceedings).
. The Sixth Circuit has gone a step further, rejecting the Fay doctrine, even in Section 9 proceedings, as "in clear violation of both the expressed Congressional purpose and the principle of exhaustion of administrative remedies.” Blue Cross & Blue Shield of Mich. v. NLRB, 609 F.2d 240, 244-45 (6th Cir. 1979).
Reference
- Full Case Name
- AMERCO, a Nevada Corporation U-Haul International Inc., a Nevada corporation Oxford Life Insurance Company, an Arizona corporation v. NATIONAL LABOR RELATIONS BOARD Robert J. Battista, Chairman, National Labor Relations Board Wilma B. Liebman, Board Member, National Labor Relations Board Peter C. Schaumber, Board Member, National Labor Relations Board Dennis P. Walsh, Board Member, National Labor Relations Board Peter N. Kirsanow, Board Member, National Labor Relations Board Ronald E. Meisburg, General Counsel, National Labor Relations Board Cornele A. Overstreet Regional Director, Region 28, National Labor Relations Board
- Cited By
- 1 case
- Status
- Published