Pullman Power Products Corp. v. Local 403, United Ass'n of Journeymen & Apprentices of the Plumbing & Pipefitting Industry

OPINION ON REHEARING

This is a union appeal from a district court judgment vacating an arbitrator’s award. It arises out of the same series of events considered in Howard P. Foley Co. v. International Brotherhood of Electrical Workers, Local 639, 789 F.2d 1421 (9th Cir.1986). The case came before us in October of 1987, and by memorandum disposition we affirmed, 831 F.2d 303 , stating that the majority opinion in Foley governed the outcome in this case.

Following our decision, and during the pendency of the appellant’s petition for rehearing, the Supreme Court decided United Paperworkers International Union v. Misco, Inc., — U.S. —, 108 S.Ct. 364 , 98 L.Ed.2d 286 (1987). We asked for supplemental briefing and granted rehearing because of that decision. We now hold that we must vacate our earlier disposition and reverse the judgment of the district court. We do so because this court’s decision in Foley is inconsistent with Misco. Foley can no longer be regarded as controlling circuit law. See LeVick v. Skaggs Co., Inc., 701 F.2d 777, 778 (9th Cir.1983); Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 492 (9th Cir.1979).

This case, like Foley, involves a grievance of…

dissenting:

This case presents the same fact pattern as Foley v. IBEW, Local 639, 789 F.2d 1421 (9th Cir.1986). Our holding in Foley *1213 controls. The Supreme Court’s decision in United Paperworkers Intern. Union v. Misco, Inc., — U.S. —, 108 S.Ct. 364 , 98 L.Ed.2d 286 (1987), does not affect our holding in Foley .

In Foley we held that in the absence of causation, an award of damages is punitive. Because the collective bargaining agreement did not provide for punitive awards, the arbitrator’s award could not be based on the collective bargaining agreement. Foley, 789 F.2d at 1423-24 .

In this case, as in Foley , the company’s breach of the agreement did not cause the employee’s loss. In Foley we reasoned as follows:

Id. at 1423 .

As this passage shows, Foley is consistent with an earlier Supreme Court case, W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757 , 103 S.Ct. 2177 , 76 L.Ed.2d 298 (1983). In W.R. Grace the Court noted that a court is not free to disagree with an arbitrator’s rejection of an employer’s impossibility defense to breach of contract. Id. at 767 n. 10, 103 S.Ct. at 2184 n. 10. In Foley we did not disturb the arbitrator’s rejection of Foley’s…