United Brotherhood of Carpenters & Joiners of America v. Tappan Zee Constructors, LLC
2015 U.S. App. LEXIS 18241
| 2d Cir. | 2015Background
- TZC won the contract to design and build the Tappan Zee Crossing and allocated three categories of concrete formwork between two unions represented by UBC: Dockbuilders Local 1556 and Carpenters Local 279. Dockbuilders received pile formwork; Carpenters received pier and column formwork.
- Dockbuilders disputed the pier and column assignments; the dispute was submitted under the PLA and the National Plan for Settlement of Jurisdictional Disputes (the Plan), which mandates expedited arbitration and specifies three sequential criteria (agreement, trade/local practice, then efficiency/cost) for assignment decisions.
- Arbitrator Pierson issued a short-form award within five days (May 4) awarding the work to Dockbuilders based on an asserted established trade practice. TZC appealed and sought full opinion; Pierson then issued a twelve-page written opinion (May 13) reversing himself, finding no trade practice and awarding the work to the Carpenters on cost-efficiency grounds (over $7M savings).
- UBC sought to enforce the May 4 short-form award and vacate the May 13 award in district court; TZC cross-petitioned to confirm the May 13 award.
- The District Court confirmed the May 13 award and vacated the May 4 award, holding the PLA’s two-decision requirement meant the short-form was not final; UBC appealed to the Second Circuit.
Issues
| Issue | Plaintiff's Argument (UBC) | Defendant's Argument (TZC) | Held |
|---|---|---|---|
| Whether the arbitrator could change his short-form award when issuing the later written decision | The short-form award was final; once issued Pierson became functus officio and lacked authority to alter it | The PLA contemplates a short-form followed by a written opinion; the later opinion may alter the short-form to fully resolve the submitted dispute | Court upheld arbitrator authority to revise short-form in the written opinion; May 13 award confirmed and May 4 vacated |
| Whether the arbitrator’s May 13 decision exceeded the scope of contractual arbitration authority | The May 13 award contradicted the May 4 award and thus was beyond his authority | The arbitrator acted under PLA/Plan procedures and construed those provisions in reaching his substantive conclusion | Court applied deferential review and found the May 13 award draws its essence from the arbitration agreement; not subject to vacatur |
| Proper standard of judicial review for the arbitration award | N/A (UBC argues arbitrator exceeded authority) | Courts must defer to arbitrator as long as award is arguably based on the contract | Court applied settled, highly deferential standard: review de novo for legal questions but uphold awards that arguably construe/apply the agreement |
| Whether the parties submitted the scope/interpretation of PLA §10.3(D) to the arbitrator | UBC: scope question should be for courts; arbitrator lacked authority to reconsider final awards | TZC: parties submitted dispute under PLA/Plan, which required two decisions, so interpretive question was within arbitrator’s remit | Court concluded parties intended the arbitrator to resolve issues under the PLA/Plan; arbitrator’s interpretation entitled to deference |
Key Cases Cited
- Am. Exp. Co. v. Italian Colors Rest., 133 S. Ct. 2304 (2013) (courts must rigorously enforce arbitration agreements according to their terms)
- ReliaStar Life Ins. Co. of N.Y. v. EMC Nat’l Life Co., 564 F.3d 81 (2d Cir. 2009) (arbitrator’s award must draw its essence from the arbitration agreement)
- United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29 (1987) (arbitrator must be at least arguably construing/applying the contract for courts to defer)
- T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., 592 F.3d 329 (2d Cir. 2010) (arbitrator’s power to revise awards may be upheld when parties’ intent and agreement support such authority)
- Local 1199, Drug, Hosp. & Health Care Employees Union v. Brooks Drug Co., 956 F.2d 22 (2d Cir. 1992) (court’s task is whether arbitrator interpreted an arguably ambiguous contractual provision in light of parties’ intent)
- Ottley v. Schwartzberg, 819 F.2d 373 (2d Cir. 1987) (general rule: arbitrator becomes functus officio after deciding submitted issues)