Lead Opinion
Dissenting opinion filed by Circuit Judge MILLETT.
Heartland Plymouth Court MI, LLC (“Heartland”) successfully petitioned this Court to review an Order of the National Labor Relations Board (“the Board” or “NLRB”). The Order found Heartland violated its collective-bargaining agreement by failing to bargain over the effects of reducing employee hours. In granting the petition, we also denied the Board’s cross-application to enforce its Order. Neither outcome was a surprise. As we explained in our Judgment, and as this Court had explained over a decade earlier, we possess a “fundamental and long-running disagreement” with the Board over “whether an employer has violated section 8(a)(5) of the National Labor Relations Act [NLRA] when it refuses to bargain with its union over a subject allegedly contained in a colleetive[-]bargaining agreement.” See Enloe Med. Ctr. v. NLRB,
Emphasizing the real-world consequences of forcing parties to waste time and resources litigating, Heartland moves here for an award of attorney fees. In response, the Board provided a sweeping—and startling—defense of its nonac-quiescence policy. The Board said it would be justified in refusing to apply the law of any circuit. The Board’s logic makes no exception for the scenario in Heartland’s case, where the Board knew that it would end up in a circuit with adverse law. Nor does the Board reject nonacquiescence when any presentation would be a putsch—ie., when no circuit at all supports the Board’s legal position. See NLRB Atty Fee Resp. Br. at 13 & n.8. Because the Board’s actions go beyond whatever limited justification nonacquies-cence may have, we agree with Heartland that the Board is guilty of bad faith, grant Heartland’s motion for attorney fees, and award it $17,649.00.
I.
Factual Summary
Our Judgment already details the facts giving rise to the Board’s NLRA suit
Heartland first appealed the Board’s adverse Order to our Court in 2018. See Case No. 13-1227. Due to the Supreme Court’s pending decision in NLRB v. Noel Canning, — U.S. -,
Given our well-established “contract coverage” precedent, Heartland’s seсond appeal was pre-ordained.
In .this case, the Board neither confessed the error of the Order against Heartland under our law, nor sought to preserve its argument against our precedent for certio-rari (or even en banc reconsideration). The Board did not seek a transfer to'the Sixth Circuit either. The- Sixth Circuit embraces the Board’s “clear and unmistakable” waiver-policy. See, e.g.] Beverly Health and Rehab. Servs., Inc. v. NLRB,
In lieu of its legitimate options, the Board chose obstinacy. The Board cross-petitioned our Court to enforce its Order. In its responsive brief, the Board spent several pages asking us to uphold its “clear and unmistakable” waiver policy here. See NLRB Merits Br. at 17-20. Our adverse precedent made only a cameo appearance, where the Board spent a few sentences on an illusory distinction. See id. at 21-22 (stating Enloe does not apply “[b]ecause the effects of the change in hours are not matters that were covered by the pаrties’ agreement,” so, to the Board, “the contract coverage doctrine does not play a role”). The Board’s tactics forced Heartland to waste resources in replying. See Heartland Merits Reply Br. at 2-3, 8-10.
Given the Board’s behavior, it is little wonder that when Heartland moved for attorney fees, it sought fées under both the “not-substantially-justified” and “bad faith” provisions of the Equal Access to Justice Act. See 28 U.S.C. § 2412(b) (allowing “bad faith” attorney fee awards against the United States government); § 2412(d)(1)(A) (allowing attorney fee awards against the United States government “unless the court finds ... the position of the United States was substantially justified.... ”).
Replying to' Heartland’s motion, the Board referenced its general policy of flouting any circuit’s NLRA interpretation
II.
The Propriety of Nonacquiescence.,
We begin first with the goal of nonac-quiescence, as stated by the Board itself over sixty years ago: to “achieve[]” “a uniform and orderly administration of a national act, such as the [NLRA].” See Ins. Agents Int'l Union,
Our approval' of nonacquiescence presumеd its stated virtue: opposing adverse circuit decisions permits the Board to bring national labor law questions to Supreme Court resolution. See, e.g., Enloe,
To that end, nonacquiescence allows for an issue’s “percolation” among the circuits; generating a circuit split that can improve the likelihood of certiorari being granted. See id. at 1093; see also id. at 1097 (Buckley, J., concurring in part and dissenting in part) (“Catching Congress’s ear ... is more easily said than done; and
Achieving judicial finality through national uniformity requires nonacquies-cence to rest on certain conditions. First, as explained above, any nonacquiescence depends upon the agency actually seeking Supreme Court review of adverse decisions.
In cases where the appeal implicates a statute’s multi-venue provision, the reviewing Court must assess a third condition: venue uncertainty. When an agency’s assertion of .venue uncertainty is plausible on the facts and proper nonacquiescence is otherwise pursued, the agency acts in good faith. But, when an agency’s assertion of venue uncertainty is implausible on the facts, the situation is no different than intracircuit nonacquiescence—where the agency’s conduct would constitute bad faith if its nonacquiescence is- not clearly asserted and accompanied by a preservation of arguments for Supreme Court or en banc review. Cf. Johnson,
Intracircuit nonacquiescence is not the same as refusing to apply an adverse circuit’s law due to the underlying statute’s multi-venue provision. For example, when a party appeals an adverse NLRB order under the NLRA, the statute provides the appealing party with multiple venue options. See 29 U.S.C. § 160(f). This uncer
There are, however, multiple instances when an agency’s assertion of venue uncertainty is implausible, ie., it knows that its order will be subjected to an adverse circuit’s law on appeal. Estreicher & Revesz point out two examples: (1) when “all courts of proper venue have adopted positions contrary to the agency’s policy”; and (2) when an order has been issued by an agency on remand from an adverse circuit court which retained jurisdiction over the action. See Estreicher & Revesz, Nonac-qwiescence, supra n.4, at 687 & n.34. In these cases, any nonacquiescence is necessarily intentional and, thus, of the intracir-cuit variety. These are just “example[s],” however, see id. at 687, and there are others. When a case’s facts result in only two venue choices for the party appealing the adverse order, and one circuit’s precedent is in agreement with the agency’s legal interpretation while the other is adverse to it, the agency knows any appeal will be to the adverse circuit. See Ithaca Coll. v. NLRB,
In any event, venue uncertainty cannot license improper nonacquiescence. Nothing about venue uncertainty excuses: (1) a less-than-candid representation of the agency’s disagreement with adverse circuit law; (2) the failure to indicate the preservation of opposing arguments for Supreme Court review; or (3) the failure to seek certiorari of adverse decisions to achieve a national resolution. Letting the mere possibility of venue uncertainty excuse those conditions not only makes nonacquiescence unbounded—it also would be a failure. Distinguishing, case-by-case, plausible venue uncertainty from intracircuit nonacquies-cence is critical to avoid “nonacquiescence in its most sweeping sense,” ie., a form divorced from the end of judicial finality and the requirement of candor. See Johnson,
Unfortunately, the NLRB’s history with nonacquiesсence reveals “its primary goal is ... to see its interpretation of the federal labor laws prevail in as many cases as possible, rather than to change contrary law in particular circuits or ... serve as a percolator for the Supreme Court.” See Ross E. Davies, Remedial Nonacquiescence, 89 Iowa L. Rev, 65, 100 (2003); cf.
As a former NLRB Chairman and Chief Counsel, respectively, explained;
In fact, rather than promoting uniformity, the Board’s policy of nonacquiescence has fostered a bifurcated system in which litigants willing to pursue their case to the appellate level are able to avoid [the] Board[’s] orders. Thus, the Board’s policy has had the effect of needlessly protracting litigation, establishing a two-tiered system of labor law in the same jurisdiction, encouraging disrespect for [the] Board[’s] orders, and antagonizing the courts ... Even worse, it compels litigants to expend resources in litigating cases in which it is clear that the appropriate circuit will not enforce the Board’s order.
Dotson & Williamson, NLRB v. The Courts,
For these reasons, and others, our sister circuits have spilled much ink admonishing thе NLRB’s nonacquiescence. See id. at 1091 (“Intracircuit nonacquiescence has been condemned by almost every circuit court of appeals that has confronted it.”); Dotson & Williamson, NLRB v. The Courts,
In Yelloio Taxi, we warned the NLRB that sweeping nonacquiescence “may ... require[ ] [us]' to secure adherence to the rule of law by measures more direct than refusing to enforce its orders.”
III.
The. Board’s Nonacquiesoence Against Heartland Amounts To Bad Faith
The legal dispute in Heartland’s case demonstrates persistent nonacquies-cence without either candor or the pursuit of judicial finality. As we mentioned, our “contract coverage” case law has diverged from the Board’s “clear and unmistakable” waiver policy for almost a quarter century. Now, seven of the twelve geographic circuits take a side in That debate.
Worse still, the Board’s lack of candor is evident in its handling of our “contract coverage” precedent. Rather than confess the error of its Order against Heartland under our law, the Board’s merits brief, in relevant part, urges us to embrace the “reasonableness” of its “clear and unmistakable” waiver analysis. See NLRB Merits Br. at 17-20. Then, as a brief aside, it pretends there is no conflict between its Order and our law. See id. at 21 (“[Beсause the effects in the change in hours are not matters that were covered by the parties’ agreement, the contract coverage doctrine does not play a role”). The Board’s reasoning is nonsensical because, if a subject is not covered by a contract, then the contract certainly does not clearly and unmistakably waive bargaining over that matter. “[D]isguis[ing] its disagreement by means of a disingenuous distinction of adverse circuit precedent” is yet another indication of improper nonacquies-cence. See Estreicher & Revesz, Nonac-quiescence, supra n.4, at 755.
On these facts, nothing about the NLRA’s multi-venue provision sanitizes the Board’s eleventh-hour nonacquiescence plea. The Board knew ruling against Heartland would prompt an appeal to our circuit. Why? It already did. Recall that Heartland previously appealed the same ruling to our Court before the case was held in abeyance due to Noel Canning. See NLRB Merits Br. Cert, as to Parties, Rulings, and Related Cаses (“The ruling under review has previously been before the Court.”). When the Board readopted its prior Order against Heartland—with the only material difference being that the Board panel was now comprised of Senate-confirmed members—it had every reason to think Heartland would appeal here again. For another matter, Heartland’s appellate options were twofold: (1) our circuit, to which it previously appealed the same substantive Order and which has favorable law; or (2) the Sixth Circuit, which embraces the Board’s “clear and unmistakable” waiver policy. There is no reason to think Heartland would seek appellate review in a circuit where it would almost certainly lose. See Ithaca Coll.,
If the Board did not want to sacrifice its Ordеr against Heartland or defend nonacquiescence before us, it still had a viable option: transfer the case to the Sixth Circuit. As we noted above, the facts favored a transfer, and the Board’s Order would have almost assuredly been enforced in that jurisdiction. The Sixth Circuit accepts the Board’s “clear and unmistakable” waiver position; the NLRA allows the Sixth Circuit jurisdiction over Heartland’s appeal; Heartland’s operations are within the Sixth Circuit; and the underlying conduct took place within the Sixth Circuit.
There is one other indication that venue uncertainty is not the real reason behind the Board’s behavior. The Board’s response to Heartland’s attorney fee motion offers an extreme and unbounded view of nonacquiescence. This position, combined with the Board’s conduct on the merits, embraces the following nonacquiescence standard: the Board can employ nonac-quiescence: (1) without ever saying so to the Court until after judgment is entered; (2) without ever seeking certiorari to resolve the disputed issue; (3) even when it knows what law will apply in advance of the appeal; and (4) even when every circuit in the country disagrees with it. See NLRB Atty Fee Resp. Br. at 13-14. In sum, the Board’s candor-free approach to nonacquiescence asks this Court to let the Board do what no private litigant ever could: make legal contentions not warranted by existing law and supported by no argument for modifying, reversing, or establishing new law. This is intolerable. See, e.g., Fed. R. Civ. P. 11(b)(2). We are under no obligation to bless the desire of “federal agencies [to] be subject to no law at all— as, indeed, it appears [the NLRB] believe[s] to be the case.” See U.S. Dep’t of Energy v. FLRA,
Taken together, the Board’s conduct before our Court makes out a clear case of bad faith litigation. The standard for an award of attorney fees for bad faith is met “where the party receiving thé award has been the victim of unwarranted, oppressive, or vexatious conduct on the
The Board’s' obstinacy forced Heartland to waste time and resources fighting for a freedom the Board knew our precedent would provide. The Board did nothing to employ permissible nonacquiescence; it just saved the concept as a post-hoc rationalization in case Heartland had the temerity to ask us not to make it pay for the Board’s hubris. And worse, when it did finally mention nonacquiescence in response to Heartland’s attorney fee motion, the Board proposed an exasperatingly expansive rationale.
It is clear enough that the Board’s conduct was intended to send a chilling message to Heartland, as well as others caught in the Board’s crosshairs: “Even if we think you will win, we will still make you pay.” This roguish form of nonаcquies-cence assures the Board’s gambit is virtually cost-free—the Board either enjoys the fruits of a settlement, or it dares a party to employ “the money and power [needed] to pay-for and survive the process of fighting with an agency through its administrative processes and into the federal courts of appeals.” Davies, Remedial Nonacquies-cence,
A few words in response to our dissenting colleague. The dissent acknowledges the propriety of awarding Heartland fees based on the Board’s “failure to candidly acknowledge binding circuit precedent in its answering brief and for pressing only a gossamer-thin argument for distinguishing Enloe.” Dissent Op. 33. We also agree that “an agency’s persistent defiance of uniform and settled circuit precedent could ignite a separation-of-powers firestorm.” See id. at 29. The Board should take note of these conclusions.
We are at a loss to understand, however, how either of these’ conclusions is consistent with the rest of the dissent. If the Board’s reply brief merits a fee award, was it not “thumbing its nose at settled decisional law?” But see id. at 29. If “Heartland had to file a petition for judicial review in this circuit,” id. at 31, where else could the Board expect to be? But see id. As the Board cross-petitioned to enforce its own Order here—asking us to bless its’ “clear and unmistakable” waiver policy in the process—did it not do more than simply “litigat[e] [Heartland’s] aрpeal?” But see id. at 30. Is the Board’s refusal to seek certiorari on the “contract coverage” issue, even after it has percolated among the circuits, something other than “persistent defiance” of judicial finali
Granting Heartland’s motion for attorney fees “serve[s] the dual purpose of vindicating judicial authority ... and making the prevailing party whole for expenses caused by his opponent’s obstinacy.” See Chambers v. NASCO, Inc.,
IV.
For the foregoing reasons, .we grant Heartland’s motion for attorney fees and award it $17,649.00 for the Board’s bad faith litigation.
So ordered.
Notes
. The fact that Heartland’s parent company "transacts business” outside the Sixth Circuit is irrelevant. See, e.g., Bally’s Park Place, Inc. v. NLRB,
. As we find that the Board’s conduct before our Court warrants an attorney fee award for bad faith, we do not address whether Heartland is also entitled to attorney fees under the "not-substantially-justifiеd" provision.
. The seminal academic discussion of agency nonacquiescence adds an important point to the insistence on seeking Supreme Court review:
Of course, agencies generally cánnot directly petition the Supreme Court but must obtain the clearance of the Solicitor General,.... We do not mean to authorize judicial review of-the delicate negotiations and deliberative processes that inform the Solicitor General’s decision whether or not to petition for certiorari. Nevertheless,. the government cannot defend continued nonac-qtíiescence- without seeking Supreme Court intervention merely because it has chosen to divide petitioning authority in this way.
Samuel Estreicher & Richard Revesz, Nonac-quiescence by Federal Administrative Agencies, 98 Yale L.J. 679, 756-57 (1989) (emphasis added).
. An agency may also petition a circuit to reconsider its adverse precedent via en banc review, but this is subject to even more limits. If there is little or no reason for the agency to conclude the circuit is open to revisiting its precedent—as is the case where a precedent has been reaffirmed multiple times—the agency should not irritate the Court with an en banc rehearing petition. Cf. Fed. R. App. P. 35(a)(1).
. ' See NLRB Br, in Opposition to Petition for ' a Writ of Certiorari, Road Sprinkler Fitters Local Union No. 699, etc. v. "Automatic” Sprinkler Corp. of Am., No. 97-1249,
. Compare Bath Marine Draftsmen’s Assn,
. If the Board moved for enforcement in the Sixth Circuit first, 28 U.S.C. § 2112(a)(1) and (5) would have allowed the Board to file a motion to transfer venue once Heartland filed its petition for review here. Alternatively, the Board could have moved to transfer venue after Heartland filed here, regardless of whether the Board had filed in the Sixth Circuit first See Eastern Air Lines, Inc. v. Civil Aeronautics Bd.,
. Perhaps Heartland could have moved for summary disposition at the appeal’s outset, see D.C. Circuit Handbook of Practice & Internal Procedures, § VIII.G, but this does not absolve the Board from paying Heartland’s attorney fees. "Summary reversal is rarely granted,” id., and requires establishing that "no benefit will be gained from further briefing and argument of the issues presented,” Taxpayers Watchdog, Inc. v. Stanley,
Dissenting Opinion
dissenting:
I certainly understand my colleagues’ concern that an agency’s persistent defiance of uniform-and settled circuit precedent could ignite a separatión-of-powers firestorm. But this case is nothing like that, and I strongly disagree that a bad-faith award of all the fees that Heartland incurred in this appeal is warranted.
Awarding fees for bad faith is an exceptional sanction that should only be employed “when extraordinary circumstances or dominating reasons of fairness so demand.” Nepera Chem., Inc. v. Sea-Land Serv., Inc.,
■First, for all of the majority opinion’s concerns about an agency thumbing its nose at settled decisional law, this case involves an issue on which there is an inter-circuit conflict and on which the Board’s position accords with the majority view. Compare Local Union 36, Int'l Bhd. of Elec. Workers, AFL-CIO v. NLRB,
So there has been no “putsch” here (Majority Op. 18). This case, by its terms, does not implicate at all the majority opinion’s concerns about a Board refusal to acquiesce in the face of .uniformly adverse circuit precedent. To be sure; the Board discussed a potentially sweeping realm for ■nonacquiescence in its brief. See NLRB Opp’n to Mot. for Att’y Fees at 13. But the bad faith for which we can authorize fees must have occurred in the Board’s actual conduct of its appellate litigation in the case at hand, not in a later overstatement in its opposition to attorneys’ fees concerning hypothetical facts not before us.
Second, the last time the Board was before this court 'on this very same issue, this court unanimously assured the Board that it had “every right” to “refuse[] to acquiesce in our analysis” of when and under what circumstances the terms of a collective bargaining agreement may discharge an employer’s collective-bargaining duties. Enloe Med. Ctr. v. NLRB,
In particular, I see nothing remotely approaching bad faith in requiring Heartland to file its petition for review and to prosecute its appeal by filing either an opening brief or, easier still, a motion for summary reversal, see D.C. Cir. Handbook of Practice and Internal Procedures VII.G.
Accordingly, as the majority opinion acknowledges (at 19-20, 26-27), there was nothing remotely bad faith about the Board’s application and enforcement of its “clear and unmistakable waiver” rule in the agency proceedings. And given the
The majority opinion says (at 26) that the Board should have known the case was destined for this circuit after remand, and thus apparently should have given up before Heartland even filed its petition. But as the circuit conflict attests, plenty of losing litigants before the Board have chosen to litigate in their home jurisdictions long after this court first adopted the “contract coverage” rule in 1993, see United States Postal Service, supra, and even after our reaffirmation of that rule in Enloe in 2005, see Bath Marine, supra, Local Union 86, supra, and Local Joint Exec. Bd., supra. Moreover, this court did not retain jurisdiction after granting the Board’s motion to dismiss the case in the wake of NLRB v. Noel Canning,
To be sure, the Board could have beaten Heartland to the punch by petitioning the Sixth Circuit for enforcement or moving to transfer the case to the Sixth Circuit. But the Board’s failure to deprive an employer of its chosen forum for review or to forgo imposing on the employer the additional costs of litigating a transfer motion cannot by itself meet the “stringent” requirement for bad faith, Nepera Chem.,
Third, the majority opinion (at 25-26) decries the Board’s failure to have sought certiorari to resolve the circuit conflict in an earlier case. But, again, the question is whether the Board litigated this appeal in bad faith, not whether it should have taken an additional procedural step in some other case. Sanctioning the Board for failing to seek certiorari is 'doubly inappropriate because the questions of whether and when-Supreme Court review should be sought to eliminate the conflict and establish a single, uniform federal rule rest exclusively with the Solicitor General in the Department of Justice and not with the Board. 28 U.S.C. § 518(a); see also 28 C.F.R. § 0.20 (Solicitor General is assigned duty of “[cjonducting, or assigning and supervising, all Supreme Court cases, including * * * petitions for and in opposition to certiorari”). Surely we cannot sanction as “bad faith” the Board’s failure to make a decision Congress has said it cannot make.
It also bears noting that cases in which the Board ends up at loggerheads with this court’s contract-coverage rule do not appear to arise with significant frequency. Since we first adopted the contract-coverage rule for Board cases in 1993 in United States Postal Serv., only Enloe and this
Fourth, the award of fees for bad faith is an equitable exercise of the court’s inherent power to control litigation before it. See, e.g., Copeland v. Martinez,
To begin with, given the clarity of our precedent, Heartland could have short-circuited this litigation by moving for summary reversal. To be sure, a party seeking summary disposition bears “the heavy burden of establishing that the merits of his case are so clear that expedited action is justified.” Taxpayers Watchdog, Inc. v. Stanley,
Contrary to the majority opinion’s suggestion (at 27 n.9), an opposition by the Board preserving its arguments for review en banc or by the Supreme Court would not have altered the straightforward task of panel disposition since the law of the circuit would have controlled. See, e.g., La-Shawn A. v. Barry,
Heartland chose instead to initiate the ordinary briefing process and to then file a full-throated opening brief that raised additional issues for our review beyond the contract-coverage dispute. Heartland’s failure to reasonably mitigate the fees it incurred should factor into the court’s decision to award fees for bad faith. See Wright v. Jackson,
Worse still, Heartland itself filed a vastly ovеrblown application for fees that unjustifiably included the agency litigation that the Board had every right to pursue under the Sixth Circuit’s “clear and unmistakable waiver” precedent. Heartland thus has not exhibited the care and calibration that equity desires in those who themselves seek equity.
Having said that, the majority opinion (at 25-26) quite fairly calls the Board out for its failure to candidly acknowledge binding circuit precedent in its answering brief and for pressing only a gossamer-thin argument for distinguishing Enloe. Indeed, I might well have been persuaded that a small amount of fees should be awarded only for the portion of Heartland’s reply brief that was dedicated to rebutting the Board’s frail argument. But that is not the course that the majority opinion takes or that Heartland sought.
For the foregoing reasons, I respectfully dissent.
. See also Cascade Broad. Grp. v. FCC,
