Opinion
No. C 02-05376 JSW.
February 11, 2005
ORDER (1) DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY ADJUDICATION AND (2) DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Now before the Court is the motion for partial summary adjudication filed by plaintiff U.A. Local 342 and the cross-motion for summary judgment or for summary adjudication filed by defendant Calpine Corporation. Having carefully reviewed the parties' papers and considered their arguments and the relevant legal authority, and good cause appearing, the Court hereby DENIES U.A. Local 342's motion for partial summary adjudication and Calpine's cross motion for summary judgment.
BACKGROUND
On November 24, 1999 the parties signed the Northern California Project Labor Agreement (" PLA"). (Declaration of Mark C. Thomas in support of Calpine's motion ("Thomas Decl."), Ex. J (PLA)). On January 31, 2002, U.A Local 342 filed a grievance regarding Calpine's conduct under the PLA. (Supplemental Declaration of Mark C. Adams in support of Calpine's motion ("Sup. Adams Decl."), Ex. B). After Calpine opted out of the PLA's grievance and arbitration procedures pursuant to § 10.4 of the PLA, U.A Local 342 filed this lawsuit pursuant to § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 ("Section 301"), claiming that Calpine breached the PLA. Specifically, U.A. Local 342 contends that Calpine breached two provisions of the PLA: (1) § 2.1, the Scope of Agreement provision, which provides in pertinent part: "Work performed by Calpine employees after the mechanical completion of each system within a unit is not include within the scope of the agreement" and (2) § 3.1, which provides in pertinent part: "Calpine agrees that any contractor or subcontractor at any tier performing work within the scope of the Agreement shall be (I) signatory to this Project Labor Agreement. . . . (Thomas Decl., Ex. J (PLA, §§ 2.1 and 3.1)). In essence, U.A. Local 342 contends that Calpine breached the PLA by allowing its employees to perform start-up and commissioning work at the Delta Energy Center (the "Project") and by allowing subcontracted work covered by the PLA to be performed by contractors who were not signatories to the PLA.
U.A Local 342 moves for partial summary judgment that Calpine violated the PLA by performing working covered by the PLA with its own employees and by allowing subcontractors to perform work who were not signatories to the PLA. In its cross-motion, Calpine moves for summary judgment or summary adjudication on several bases, including that Calpine did not breach the PLA and that U.A. Local 342 failed to timely file a grievance as required by the PLA.
ANALYSIS
I. Legal Standard
Summary judgment is proper when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A principal purpose of the summary judgment procedure is to identify and dispose of factually unsupported claims. Celotex Corp. v. Cattrett, 477 U.S. 317, 323-24 (1986).
The party moving for summary judgment bears the initial burden of identifying those portions of the pleadings, discovery, and affidavits which demonstrate the absence of a genuine issue of material fact. Id. at 323. Once the moving party meets this initial burden, the non-moving party must go beyond the pleadings and by its own evidence "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). The non-moving party must "identify with reasonable particularity the evidence that precludes summary judgment." Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (quoting Richards v. Combined Ins. Co., 55 F.3d 247, 251 (7th Cir. 1995)) (stating that it is not a district court's task to "scour the record in search of a genuine issue of triable fact"). If the non-moving party fails to make this showing, the moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 323.
II. Calpine's Evidentiary Objections
As a preliminary matter, this Court addresses Calpine's objections to U.A. Local 342's evidence. Calpine objects to much of the evidence submitted by U.A. Local 342 in support of its motion and in opposition to Calpine's cross-motion. With limited exceptions addressed below, the evidence objected to by Calpine is not necessary to the resolution of this motion. Therefore, the Court need not rule on the admissibility of such evidence at this time.
Calpine's objections to paragraph 4 of the Declaration of Thomas R. Adams, to paragraphs 3 and 7 of the Declaration of Bob Balgenorth, and to the entire Declaration of Scott M. De Nardo are overruled except for portions of paragraph 6 of De Nardo's Declaration. Calpine's objection to the portion of paragraph 6 of De Nardo's Declaration which summarizes what the timesheets indicate is sustained.
III. U.A Local 342's Motion for Partial Summary Adjudication
U.A. Local 342 seeks to have the Court interpret two provisions of the Project Labor Agreement as a matter of law — § 2.1 and § 3.1. The Court concludes that the language in the provisions at issue is ambiguous and that there are genuine issues of material fact regarding the parties' intent and the meaning of the provisions. Pace v. Honolulu Disposal Service, Inc., 227 F.3d 1150, 1158 (9th Cir. 2000) (interpretation of ambiguous terms depends on the parties' intent). Accordingly, the Court DENIES U.A. Local 342's motion for partial summary adjudication.
IV. Calpine's Cross-Motion for Summary Judgment
Calpine moves on several different bases for summary judgment against U.A. Local 342's breach of contract claim. None are meritorious.
A. Evidence of Breach
Calpine argues that it is entitled to judgment as a matter of law because the terms of the PLA are clear and unambiguous and U.A. Local 342 lacks sufficient evidence of breach of the alleged "clear and unambiguous terms." (Calpine's Mot., ¶. 14-17). As discussed above, the Court concludes that the terms at issue are ambiguous, and thus denies Calpine's motion on this basis.
Calpine also makes several arguments for summary judgment specific to § 3.1 of the PLA, which provides that "Calpine agrees that any contractor or subcontractor at any tier performing work with the scope of this Agreement shall be (i) signatory to this Project Labor Agreement. . . ." (Thomas Decl., Ex. J (PLA, § 3.1)). In essence, Calpine contends that it fulfilled its obligations by engaging Bechtel, a signatory to the PLA, as its general contractor for the project, and that it cannot be held liable for subcontractors hired by Bechtel. (Calpine's Mot., p. 20-21). As discussed above, the Court concludes that this section of the PLA is ambiguous. Specifically, this provision is silent regarding the extent of Calpine's obligation to ensure contractors and subcontractors performing work are signatories to the PLA. Because neither party submitted evidence regarding the parties' intent, the Court cannot construe this provision as a matter of law on either party's motion for summary judgment. Furthermore, without a determination of what this provision means and requires of Calpine, it would be premature to evaluate any evidence of breach. Therefore, the Court denies Calpine's motion for summary adjudication on § 3.1 of the PLA.
B. Alleged Untimely Filing of Grievance
Calpine contends that U.A. Local 342 failed to file a grievance within five working days of the incident giving rise to the alleged grievance as required by § 10.4 of the PLA, and thus bars U.A Local 342's action in its entirety. U.A. Local 342 counters that because Calpine opted out of the grievance procedure, it should not be held to the five-day limitations period. Alternatively, U.A. Local 342 argues that the Court should apply the doctrine of continuing violations to its breach of contract claim, and because Calpine's alleged breaches were "ongoing," its grievance was not filed late.
Without any argument or evidence in support, U.A. Local also asserts that Calpine waived this timeliness defense. At the hearing on these cross-motions, U.A. Local argued that Calpine participated in a lengthy grievance procedure and only opted out at the last stage, just before arbitration, but never argued that the grievance was void as untimely. However, U.A. Local did not any present evidence of such facts. The Court thus rejects U.A Local's waiver defense to Calpine's motion for summary judgment. However, the Court's ruling on this motion for summary judgment is without prejudice to U.A. Local raising this defense at trial if it is properly supported with evidence and authority.
To pursue a breach of contract claim pursuant to Section 301, U.A. Local 342 must first exhaust the applicable contractual grievance procedures. Castaneda v. Dura-Vent Corp., 648 F.2d 612, 617 (9th Cir. 1981). Pursuant to § 10.4 of the PLA, any grievance not filed within five working days "after the incident which initiated the alleged grievance occurred" is considered "null and void." (Thomas Decl., Ex. J (PLA, § 10.4)). § 10.1 of the PLA provides, in pertinent part: "In any matter where the grievance alleges that Calpine has violated [the PLA], Calpine, in its sole discretion, may opt to remove the matter from coverage of this procedure." (Thomas Decl., Ex. J (PLA, § 10.1) (emphasis added).
The Court gave U.A. Local an opportunity to provide authority supporting its position that Calpine cannot assert U.A. Local 342's failure to satisfy this condition precedent based on Calpine's decision pursuant to § 10.1 of the PLA to opt-out of the grievance and arbitration procedures. U.A Local 342 provided none on point. U.A. Local 342's reliance on Independent Oil Workers v. Mobil Oil, 441 F.2d 651 (3rd Cir. 1971), is misplaced. In that case, the Third Circuit interpreted provisions of the agreement at issue to make arbitration entirely optional, for both parties. Id. at 653. Here, § 10.1 of the PLA only grants Calpine with the option of removing a matter from coverage of the grievance and arbitration procedure, not U.A. Local 342.
Interpretation of a labor agreement pursuant to Section 301 is governed by federal common law. International Brotherhood of Electrical Workers, AFL-CIO v. Hechler, 481 U.S. 851, 856 (1987). If a clause is unambiguous, courts may interpret the plain language of a labor agreement. Pace, 227 F.3d at 1157. Neither party has argued that the grievance procedures under § 10 of the PLA are ambiguous.
Based on the plain language of the PLA, U.A. Local 342 has an obligation to file a grievance and to do so within five working days of the incident giving rise to the grievance. Once a grievance is filed, Calpine then has a choice of whether to address the grievance through the proscribed grievance and arbitration procedures, or not. Calpine is entitled to make this choice after U.A Local 342 files a grievance, and therefore whatever choice Calpine makes does not relieve U.A. Local 342 of its obligation to timely file a grievance in the first instance.
However, the Court concludes that there is a question of fact as to when U.A. Local 342 had knowledge of the breach. Calpine bears the burden of demonstrating it should be granted summary judgment on its affirmative defense. Hunter v. Bryant, 502 U.S. 224, 233 (1991). U.A Local 342 filed its grievance on January 31, 2002. (Sup. Adams Decl., Ex. B). In support of its motion, Calpine points to the following evidence to demonstrate that U.A. Local 342 had notice of Calpine's position with respect to the PLA and Calpine's alleged breach more than five working days before January 31, 2002: (1) Bechtel and Calpine communicated at a meeting where a representative of U.A. Local 342 was present that Calpine would perform start-up and commissioning work (Beech Decl., ¶ 3) and (2) Craig Rose, a member of U.A Local 342, testified that he saw nonunion labor performing work on the Project in October 2001. (Declaration of Scott M. De Nardo in support of U.A. Local 342's Motion, Ex. E (Rose Deposition Transcript)). Yet at the same time, Calpine also attacks the Rose's testimony as insufficient to demonstrate any breach by Calpine. (Calpine's Mot., ¶ 16). Moreover, as late as January 14, 2002, Calpine submitted a proposal to revise portions of the PLA. In particular, Calpine proposed that the following language be inserted into the Scope of Agreement section: "Calpine is committed to using its own start-up crew and operations personnel to perform start up and commissioning work," and summarized the change to mean that "[a]ll work following acceptance of any system by Calpine is excluded from the Agreement, including start-up and commissioning work." (Declaration of Bob Balgenorth in support of Plaintiff's motion, Ex. A). The change Calpine proposed to make to the PLA is exactly what Calpine argues in its motion has always been its interpretation of the PLA and that U.A. Local 342 was aware of this months before it filed any grievance. At the very least, this evidence creates a question of fact as to what the existing Scope of Agreement section in the PLA means and when U.A. Local 342 had knowledge of Calpine's position and alleged breaches. Accordingly, the Court denies Calpine's motion on this basis.
Calpine also points to evidence that it turned over the first system within a unit in July 2001 (Beech Decl., ¶ 7, Ex. A), but did not present any evidence indicating that Calpine employees actually performed start-up and commissioning work on this unit or that U.A. Local 342 was aware of such work more than five working days before January 31, 2002. Without such information, evidence of when Calpine turned over a system is insufficient to demonstrate U.A. Local 342's knowledge of Calpine's alleged breach.
Because a question of fact exists regarding when U.A Local 342 had knowledge of Calpine's alleged breach or breaches, the Court need not address whether U.A. Local 342 could maintain a cause of action based on later occurring breaches and whether the doctrine of continuing violations applies.
C. Jurisdiction Over U.A. Local 342's Complaint
Calpine attempts to construe U.A. Local 342's breach of contract claim as primarily representational in nature versus contractual. In other words, Calpine argues that U.A. Local 342's suit, in essence, is an attempt to organize Calpine's employees, and thus falls within the primary jurisdiction of the National Labor Relations Board. (Calpine's Mot., p. 11). Whatever U.A Local 342's true intent is in bringing this suit, the claim before this Court involves a contract dispute. Thus, this Court has jurisdiction over U.A. Local 342's claim. Pace, 227 F.3d at 1157 (federal courts have jurisdiction over cases that involve contract interpretation).
On a related basis, Calpine also argues that the relief U.A. Local 342 seeks is preempted by the National Labor Relations Act because U.A. Local 342 seeks to have it recognized as the bargaining representative for Calpine employees and because U.A. Local 342 seeks to modify the PLA. Again, at this point, U.A. Local 342's suit appears to be a straight contract dispute requiring the court to interpret the terms of the PLA. The Court agrees with U.A. Local 342 that these asserted bases for summary judgment are red herrings. If this Court ultimately determines the interpretation of the PLA proposed by U.A. Local 342 is correct, then perhaps the Court would consider whether applying this interpretation may raise representational issues. However, because the Court concludes that questions of fact exist regarding the meaning of PLA provisions at issue, any such analysis would be premature. Therefore, the Court denies Calpine's motion on these bases.
CONCLUSION
For the foregoing reasons, the Court DENIES U.A Local 342's motion for summary judgment and Calpine's cross-motion for summary judgment or summary adjudication.
IT IS SO ORDERED.