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Frankl v. HTH Corp.

July 13, 2011


Appeal from the United States District Court for the District of Hawaii J. Michael Seabright, District Judge, Presiding D.C. No. 1:10-cv-00014-JMS-LEK

The opinion of the court was delivered by: Judge Berzon, Circuit Judge



Argued and Submitted February 15, 2011 Honolulu, Hawaii

Before: TASHIMA, W. FLETCHER, and BERZON, Circuit Judges.

This appeal of an injunction issued pursuant to § 10(j), 29 U.S.C. § 160(j), of the National Labor Relations Act, 29 U.S.C. §§ 151 et seq., (the "NLRA" or the "Act"), raises two questions, one difficult, the other relatively straightforward.

The straightforward question is whether the injunction should be affirmed on its merits. We have little difficulty concurring in the District Court's assessment that the National Labor Relations Board (the "Board" or the "NLRB") is likely to determine, and be affirmed by this Court in so determining, that appellants (the "Hotel") engaged in violations of § 8(a)(1), (3) and (5) of the Act by refusing to bargain in good faith and excluding five union activists from the workforce. The District Court likewise did not abuse its discretion in concluding that the other requisites for § 10(j) relief were met.

The somewhat more difficult question is the logically prior one of whether the District Court had the power to issue the injunction. In 2007, the Board assigned the authority to approve § 10(j) petitions to the General Counsel of the Board. See Minute of Board Action, Dec. 20, 2007. Pursuant to this delegation, the General Counsel approved the filing of the instant § 10(j) petition. The Hotel argues that the Act requires that petitions for § 10(j) relief be individually approved by the Board before they are filed with a district court. Because the Regional Director did not obtain such approval, the Hotel argues, he did not have authority to petition for the injunction, and the District Court was without the power to grant it. Like all the federal courts of appeals to have addressed the question, we disagree. See Osthus v. Whitesell Corp., No. 09-3209, --F.3d--, 2011 WL 1517949, at *2 (8th Cir. Apr. 22, 2011); Overstreet v. El Paso Disposal, L.P., 625 F.3d 844, 851-52 (5th Cir. 2010); Muffley v. Spartan Mining Co., 570 F.3d 534, 539-40 (4th Cir. 2009).


When the General Counsel of the National Labor Relations Board issues a complaint alleging an unfair labor practice and commences proceedings before the Board, it takes considerable time--sometimes years--for the administrative process to conclude. But "[t]ime is usually of the essence [in labor disputes]." Miller v. Cal. Pac. Med. Ctr., 19 F.3d 449, 455 n.3 (9th Cir. 1994) (en banc) (quoting S. Rep. No. 80-105, at 8 (1947) (second alteration in original)). As a result of "the relatively slow procedure of Board hearing and order, followed many months later by an enforcing decree of the circuit court of appeals . . . [i]t [may be] possible for persons violating the act to accomplish their unlawful objective before being placed under any legal restraint and thereby to make it impossible or not feasible [for the Board] to restore . . . the status quo." Id. (quoting S. Rep. No. 80-105, at 27 (1947). To remedy this problem, Congress added § 10(j) to the NLRA, as part of a comprehensive labor law reform in 1947. See Labor-Management Relations Act, 1947 (the "Taft-Hartley Act"), Pub. L. No. 80-101, § 101, 61 Stat. 136, 149, codified at 29 U.S.C. § 160(j). Section 10(j) provides:

(j) Injunctions

The Board shall have power, upon issuance of a complaint as provided in subsection (b) of this section charging that any person has engaged in or is engaging in an unfair labor practice, to petition any United States district court, within any district wherein the unfair labor practice in question is alleged to have occurred or wherein such person resides or transacts business, for appropriate temporary relief or restraining order. Upon the filing of any such petition the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction to grant to the Board such temporary relief or restraining order as it deems just and proper.

29 U.S.C. § 160(j). The purpose of a § 10(j) injunction is "to protect the integrity of the collective bargaining process and to preserve the Board's remedial power while it processes" an unfair labor practice complaint. Miller, 19 F.3d at 459-60.

The circumstances leading to the application for a § 10(j) injunction in this case are as follows: In 2002, the International Longshore and Warehouse Union, Local 142 (the "Union") began to organize employees at the Pacific Beach Hotel in Waikiki, Honolulu.*fn2 A representation election was held in July, 2002, but the Board set it aside, finding that the Hotel had "engaged in objectionable conduct by coercively interrogating employees and maintaining an overly broad no-solicitation policy." HTH Corp., 342 N.L.R.B. 372, 374 (2004). After a second election, preceding which, the Board found, the Hotel again engaged in objectionable conduct, see generally Pac. Beach Corp., 344 N.L.R.B. 1160 (2005), the Union was certified, prevailing by a one-vote margin.

Bargaining between the Union and the Hotel did not go well. Between January 22, 2007 and August 29, 2008, the Union filed numerous unfair labor practice charges with the Regional Director of Region 20 of the Board (the "Regional Director" or the "Director"). The Director investigated the charges and issued an unfair labor practice complaint.

On September, 30 2009, after thirteen days of hearings, a Board Administrative Law Judge ("ALJ") determined that the Hotel had violated § 8(a)(1), (3) and (5) of the Act and recommended that the Board order the Hotel to cease and desist from various unfair labor practices and to take other remedial actions. The Hotel filed extensive exceptions to the ALJ's ruling with the Board, and the Director filed limited ones. The case remains pending before the Board. On January 7, 2010, the Director filed a petition in the District Court for injunctive relief under § 10(j) of the Act. In accordance with the Board's 2007 delegation of litigation authority, the filing of the petition was approved by the Board's General Counsel but not by the members of the Board itself. The Hotel opposed the petition on its merits but also moved to dismiss the complaint for lack of subject-matter jurisdiction, contending that the Director's failure to obtain the Board's approval to file the § 10(j) petition deprived the District Court of jurisdiction. Siding with the Director, the District Court issued an injunction requiring the Hotel to bargain with the Union, to reinstate certain discharged employees, to rescind unilateral changes to the bargaining unit members' terms and conditions of employment, and to take various other remedial measures. The Hotel appealed. On June 14, 2011, while this appeal was pending, the Board issued its decision in the underlying action. See HTH Corp., 356 N.L.R.B. No. 182 (2011). It affirmed the ALJ's rulings, findings, and conclusions, and it modified the ALJ's recommended remedies in respects not relevant here.*fn3


Before turning to the substantive issues at stake in this case, we must first address the issue of mootness. A Section 10(j) proceeding, in which the Board seeks injunctive relief to protect the lawful status quo while litigation is pending, can become moot when the NLRB issues its decision in the underlying administrative proceeding. See Miller v. Cal. Pac. Med. Ctr., 19 F.3d 449, 453 (9th Cir. 1994). Here, however, the Board filed in the district court a motion for civil contempt on February 14, 2011-while the Hotel was subject to the District Court's injunction, after this appeal was filed, and before the Board issued its order. The original contempt motion sought both coercive and compensatory relief, including back pay for an employee allegedly terminated in violation of the injunction and the Board's attorneys' fees and costs incurred in connection with the contempt proceeding. After the Board issued its decision, the Director notified the District Court that he no longer sought coercive remedies and, receiving an extension of time to file an amended civil contempt motion, withdrew the original contempt motion. On July 8, 2011, the Board filed an amended civil contempt motion seeking compensatory relief.

We hold that this appeal is not moot because its resolution is crucial to a pending claim for retrospective monetary relief sought by the Board against the Hotel in a civil contempt proceeding. See Trans Int'l Airlines, Inc. v. Int'l Bhd. of Teamsters, 650 F.2d 949, 955 (9th Cir. 1980). "Despite superseding events, an issue is not moot if there are present effects that are legally significant." Jacobus v. Alaska, 338 F.3d 1095, 1104 (9th Cir. 2003). The validity of a civil contempt adjudication turns on the legitimacy of the underlying injunction. See, e.g., Kirkland v. Legion Ins. Co., 343 F.3d 1135, 1142-43 (9th Cir. 2003); see also United States v. United Mine Workers, 330 U.S. 258, 294-95 (1947). The legitimacy of the District Court's injunction, in turn, depends on whether the District Court abused its discretion in granting the Board's § 10(j) petition. It also depends on the antecedent question whether the Board has authority to assign § 10(j) decisions to the General Counsel.*fn4 Accordingly, we hold that neither the delegation issue nor the merits of the injunction are moot. Cf. Trans Int'l Airlines, 650 F.2d at 957 (holding that alternative grounds for the injunction underlying a contempt proceeding remained live on appeal and noting a reluctance to fragment an appeal into "live" and "moot" issues).


The Hotel contends that each petition for relief under § 10(j) must be individually authorized by a quorum of NLRB members. Because the particular petition in this case was not so authorized, the Hotel maintains, the petition was improperly before the District Court and should have been dismissed for want of subject-matter jurisdiction.



The circumstances surrounding the 2007 delegation of litigation authority to the General Counsel here contested was described recently by the Supreme Court:

As 2007 came to a close, the Board found itself with four members and one vacancy. It anticipated two more vacancies at the end of the year, when the recess appointments of Members Kirsanow and Walsh were set to expire, which would leave the Board with only two members--too few to meet the Board's quorum requirement. The four sitting members decided to take action in an effort to preserve the Board's authority to function. On December 20, 2007, the Board made two delegations of its authority, effective as of midnight

December 28, 2007. First, the Board delegated to the general counsel continuing authority to initiate and conduct litigation that would normally require case-by-case approval of the Board. Second, the Board delegated "to Members Liebman, Schaumber and Kirsanow, as a three-member group, all of the Board's powers, in anticipation of the adjournment of the 1st Session of the 110th Congress."

On December 31, 2007, Member Kirsanow's recess appointment expired. Thus, starting on January 1, 2008, Members Liebman and Schaumber became the only members of the Board.

New Process Steel, L.P. v. NLRB, 130 S. Ct. 2635, 2638-39 (2010) (citations omitted). New Process Steel went on to consider the second of the two described delegations, holding that a three-member group with one vacancy could not exercise the powers of the Board. Id. at 2641-42. Section 3(b) of the Act authorizes delegations to three-member groups, 29 U.S.C. § 153(b), but, the Supreme Court reasoned, such a "delegee group ceases to exist once there are no longer three Board members to constitute the group." New Process Steel, 130 S. Ct. at 2642 n.4.

At the same time, New Process Steel expressly declined to discuss the legality of the Board's assignment of litigation authority to the General Counsel, the delegation challenged in this case. The Supreme Court explained:

Our conclusion that the delegee group ceases to exist once there are no longer three Board members to constitute the group does not cast doubt on the prior delegations of authority to nongroup members, such as the regional directors or the general counsel. The latter implicates a separate question that our decision does not address.

Id. We now consider that "separate question," beginning with a brief survey of the relevant history.


From 1935, when the NLRA was enacted, to 1947, the Board consisted of three members responsible for both the prosecution and the adjudication of all cases over which the Board had jurisdiction. See National Labor Relations Act, Pub. L. No. 74-198 (the "Wagner Act"), § 3(a), 49 Stat. 449, 451 (1935); id. § 10, 49 Stat. at 453-55; 2 JOHN HIGGINS, JR., THE DEVELOPING LABOR LAW 2656-57 (5th ed. 2006). In response to criticism that the Board's exercise of both prosecutorial and adjudicatory functions was improper, Congress established the position of General Counsel of the Board and assigned the General Counsel the Board's prosecutorial functions, as well as other roles. See id. at 2657; Taft-Hartley Act, § 101, 61 Stat. at 139, codified at 29 U.S.C. § 153(d). The Taft-Hartley Act also increased the membership of the Board to five. Id., codified at 29 U.S.C. § 153(a). Section 3(d) of the Act now provides, in pertinent part:

There shall be a General Counsel of the Board who shall be appointed by the President, by and with the advice and consent of the Senate, for a term of four years. The General Counsel of the Board shall exercise general supervision over all attorneys employed by the Board (other than administrative law judges and legal assistants to Board members) and over the officers and employees in the regional offices. He shall have final authority, on behalf of the Board, in respect of the investigation of charges and issuance of complaints under section 160 of this title, and in respect of the prosecution of such complaints before the Board, and shall have such other duties as the Board may prescribe or as may be provided by law.

29 U.S.C. § 153(d).

As a matter of the Board's historical practice, the General Counsel has not always sought case-specific approval before filing a § 10(j) petition. Immediately after the Taft-Hartley Act's passage, for instance, the General Counsel and the Board entered into a "memorandum of understanding" according to which the "General Counsel [was to] exercise full and final authority and responsibility on behalf of the Board for initiating and prosecuting injunction proceedings as provided for in Section[] 10(j)." Evans v. Int'l Typographical Union, 76 F. Supp. 881, 888 (S.D. Ind. 1948) (quoting the memorandum) (emphasis added); see also National Labor Relations Board--Procedures § 202.35, reprinted in 20 Labor Relations Reference Manual 3117-18 (1947) ("Whenever the Regional Director deems it advisable to seek temporary injunctive relief under Section 10(j) . . . the officer or Regional Attorney to whom the matter has been referred will make application for appropriate temporary relief . . . .") (emphasis added).

In 1950, however, the Board published a memorandum in the Federal Register "describ[ing] the statutory authority and set[ting] forth the prescribed duties and authority of the General Counsel of the Board." Nat'l Lab. Rel. Bd., General Counsel--Description of Authority and Assignment of Responsibilities, 15 Fed. Reg. 6924, 6924 (Oct. 14, 1950) (the "1950 Memorandum"). That memorandum provided that "[o]n behalf of the Board, the General Counsel of the Board will[,] in full accordance with the directions of the Board, . . . initiate and prosecute injunction proceedings as provided in section 10(j) . . . Provided, however, That the General Counsel will initiate and conduct injunction proceedings under section 10(j) . . . only upon approval of the Board . . . ." Id. In other words, the 1950 Memorandum authorized the General Counsel to file § 10(j) petitions on the Board's behalf, but required him to seek case-specific authorization from the Board before filing them. The Board issued a new memorandum in 1955 containing an assignment of litigation authority to the General Counsel identical to that in the 1950 Memorandum. See Nat'l Lab. Rel. Bd., Authority and Assigned Responsibilities of General Counsel of National Labor Relations Board, 20 Fed. Reg. 2175, 2175 (April 6, 1955) (the "1955 Memorandum").*fn5 These two memoranda set forth what was the Board's standard, but not invariant,*fn6 practice until the 2007 delegation at issue in this case. The General Counsel's § 10(j) Manual describes that procedure in greater detail:

After the Region [i.e., a regional office of the agency] determines that a case has merit and believes 10(j) proceedings are appropriate, the Region makes a recommendation in writing to the General Counsel, through the Injunction Litigation Branch (ILB) of the Division of Advice, as to whether it believes that Section 10(j) relief is warranted. . . . If the General Counsel agrees that 10(j) proceedings should be sought, the Region's memorandum provides the foundation for the General Counsel's request for authorization from the Board.

After the General Counsel reviews and signs ILB's cover memorandum to the Board, the entire case, including the Region's memorandum and attachments, is submitted to the Board. . . . At this point, at the latest, the Region should immediately begin preparing papers to file in district court. . . . If the Board authorizes Section 10(j) proceedings, the ILB will immediately notify the Region.

NLRB Office of the General Counsel, Electronic Redacted § 10(j) Manual §§ 5.2, 5.3, & 5.5 at 12 & 14 (2002).*fn7 The § 10(j) Manual does not describe the Board's procedure upon receipt of the General Counsel's memorandum, but the Board's Case Handling Manual suggests that the ordinary practice has been for the Board to vote on each petition individually:

The Regional Office, based on either the Director's sua sponte determination or a request from the charging party, initially considers whether 10(j) relief is warranted. In contrast to 10(l) injunctive relief, where by statute interim relief must be sought whenever certain unfair labor practices have occurred and are likely to continue, the Board decides on a case-by-case basis whether to authorize the Regional Office to seek 10(j) relief.

NLRB Case Handling Manual, Part I, Unfair Labor Practice Proceedings § 10310 (2009).*fn8 After obtaining the Board's approval, the Regional Director files the § 10(j) petition in district court.*fn9 See 29 C.F.R. § 101.37 ("Whenever it is deemed advisable to seek temporary injunctive relief under section 10(j) . . . the officer or regional attorney to whom the matter has been referred will make application for appropriate temporary relief . . . .").

The Director and the Hotel dispute whether this procedure, case-by-case prefiling approval by the Board of § 10(j) petitions, is mandated by the Act. We conclude that it is not.*fn10


The parties and some of the courts to have considered the question have assumed that if a Regional Director failed to obtain the necessary authorization to file a § 10(j) petition, that failure would deprive a district court of subject-matter jurisdiction. See Osthus, 2011 WL 1517949, at *2 (holding that the Board's delegation did not deprive the district court of "subject matter jurisdiction"); El Paso Disposal, 625 F.3d at 851-52 (same); cf. Fed. Election Comm'n v. NRA Political Victory Fund, 513 U.S. 88, 98-99 (1994) (dismissing a petition for certiorari for lack of jurisdiction because the FEC lacked "statutory authority to litigate th[e] case in" the Supreme Court without the Solicitor General's authorization). In support of its contention that a district court's jurisdiction hangs in the balance, the Hotel observes that § 10(j)'s first sentence describes the manner and circumstances in which a § 10(j) petition may be filed, and its second sentence then provides that "[u]pon the filing of any such petition the court . . . shall have jurisdiction." 29 U.S.C. § 160(j) (emphasis added). The use of the word "such," the Hotel argues, means that a district court does not have jurisdiction to grant § 10(j) relief if the petition seeking it was not approved in accordance with the terms of the first sentence. An alternative view of the statutory language is that as long as the petition is facially regular--that is, is filed on behalf of the Board in the appropriate court, specifies that a complaint alleging an unfair labor practice has been issued, and requests appropriate relief--it is "such [a] petition" and the district court has jurisdiction to consider it. On that view, issues concerning whether the petition was properly approved might at most be considered on the merits, but would not implicate the court's jurisdiction. We regard it unlikely that Congress intended a district court's jurisdiction to depend on the backstage subtleties of how a facially proper petition came to be before it, especially as both the court and the respondent in § 10(j) proceedings will often have no reason to suspect that a petition was not properly authorized.

Here, however, the issue of the propriety of the Board's 2007 delegation of its authority to approve § 10(j) petitions to the General Counsel has been squarely raised before us. Because we conclude that the General Counsel's exercise of that authority was permitted by the statute, it does not matter--except at one point in the analysis, see infra section II.D--whether the District Court's jurisdiction turned on the issue. We shall therefore assume, without deciding, that an improperly authorized § 10(j) petition would have implications for a district court's subject- matter jurisdiction.



The Hotel urges us to read § 10(j)'s language as requiring that the Board approve each individual § 10(j) petition. That section provides, "The Board shall have power . . . to petition . . . for appropriate temporary relief . . . ." 29 U.S.C. § 160(j) (emphasis added). "The Board," the Hotel insists, means the five members of the Board, acting as a group, not the General Counsel and not the Regional Director.*fn11 By contrast, § 10(l), which was also added by the Taft-Hartley Act in 1947, provides that, upon the filing of certain kinds of charges with the Board, the charges must be investigated and

[i]f, after such investigation, the officer or regional attorney to whom the matter may be referred has reasonable cause to believe such charge is true and that a complaint should issue, he shall, on behalf of the Board, petition [the appropriate] United States district court . . . for appropriate injunctive relief pending the final adjudication of the Board with respect to such matter.

29 U.S.C. § 160(l) (emphases added). In other words, § 10(l) makes clear that an officer of the Board--not the Board itself--not only may, but must, seek temporary injunctive relief to remedy certain narrow violations of the Act. That § 10(j) references only the Board, not the Board's officers or regional attorneys, the argument goes, suggests that the Board itself must approve each § 10(j) petition before it is filed.

We conclude that these statutory considerations are more than counterbalanced by a number of others. As we explain, § 10(j) gives the Board the power to petition a court for relief, which the Board necessarily does through counsel, but does not specify the level of involvement that the Board must have with each individual petition. The contrast with § 10(l) reflects only that § 10(l) removes from the Board the authority, left to the Board in § 10(j), to determine how and by whom the filing of petitions is to be authorized. § 3(d) of the Act, providing that the General Counsel shall, in addition to the duties prescribed by the statute, "have such other duties as the Board may prescribe," supplies the Board's authorization to assign the General Counsel the duty to decide whether § 10(j) petitions should be filed. Relying on these statutory features, we hold that, although the Board may reserve to itself the ...

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