343 P.3d 1233
Mont.2015Background
- In 2009 Bozeman fired building inspector Robert Chase; MPEA (union) pursued a grievance under the parties’ collective bargaining Agreement.
- Grievance advanced through steps 1–3 (supervisor, management rep, City Manager) and MPEA gave timely notice to arbitrate at step 4.
- The Agreement required, within 10 days of notice, requesting a list of seven potential arbitrators from the Montana Board of Personnel Appeals; MPEA failed to make that timely request.
- MPEA sought arbitration later (2010); the City refused because MPEA missed the contractual time limit. MPEA sued in 2013, seeking a declaratory judgment to compel arbitration; the City counterclaimed that no grievance remained.
- The District Court granted summary judgment for the City, holding MPEA’s grievance was withdrawn/waived by delay; MPEA appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court erred by deciding arbitrability and granting summary judgment denying arbitration | MPEA: Dispute is arbitrable; procedural defenses (time limits, waiver) are for an arbitrator | City: Time-limit language makes the grievance permanently withdrawn; waiver/laches bar arbitration and are judicial questions | Court: District court improperly decided procedural arbitrability; substantive arbitrability exists and procedural defenses must be left to arbitrator; reverse and remand with judgment to compel arbitration |
| Whether time limits/condition precedent in the Agreement are substantive (for court) or procedural (for arbitrator) | MPEA: Time-limit defenses are procedural and for arbitrator | City: Agreement language (grievance deemed "permanently withdrawn") shows no dispute remains to arbitrate (substantive) | Court: Time limits/withdrawal language are procedural; John Wiley controls — such prerequisites are for arbitrator absent clear contractual intent otherwise |
| Whether the District Court had jurisdiction to compel arbitration | MPEA: Court may decide substantive arbitrability and compel arbitration under §27-5-115(1), leaving procedural issues to arbitrator | City: No live dispute to compel; jurisdiction lacking if grievance withdrawn | Court: Jurisdiction exists to decide substantive arbitrability and to order arbitration; claim justiciable |
| Whether MPEA waived the right to arbitrate by four-year delay | MPEA: Did not litigate on the merits and consistently sought arbitration; no waiver | City: Four-year delay and inaction demonstrate waiver and prejudice | Court: Waiver/estoppel/laches arising from delay are procedural questions for arbitrator; MPEA did not act inconsistently by litigating, so no judicial finding of waiver here |
Key Cases Cited
- John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (1964) (contractual filing-time prerequisites to arbitration are procedural questions for the arbitrator)
- Howsam v. Dean Witter Reynolds, 537 U.S. 79 (2002) (distinguishes substantive vs procedural arbitrability; prerequisites like time limits are for arbitrators)
- AT&T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643 (1986) (courts decide substantive arbitrability questions)
- United Steelworkers of Am. v. American Manufacturing Co., 363 U.S. 564 (1960) (courts should not replace arbitrator when parties agreed to arbitrate)
- Int’l Bhd. of Elec. Workers, Local 1638 v. Montana Power Co., 280 Mont. 55 (1996) (Montana case recognizing procedural/substantive arbitrability distinction; waiver/withdrawal issues for arbitrator)
- Holm-Sutherland Co., Inc. v. Town of Shelby, 295 Mont. 65 (1999) (participation in litigation can constitute waiver of arbitration where conduct is inconsistent)
- Downey v. Christensen, 251 Mont. 386 (1992) (party asserting waiver bears burden; mere participation in litigation is insufficient without inconsistent acts)