Mr. Domenne. Thank you, Your Honor. Good morning, May it please the Court, Jeffrey Domenne appearing for the Pellent Union, SEIU Local 24-7. I'd like to reserve two minutes of my time to rebuttal. Thank you. I'd like to start with the problem that I think this case exemplifies. And the problem to say what the problem is, we have to go back. 50 years ago in the Steelworkers' Trilogy, the Supreme Court of the United States held that federal labor policy requires arbitration awards, labor arbitration awards. To be enforced, regardless of whether the Court agrees with the arbitrator's interpretation of the collective bargaining agreement, as long as the arbitrator is even arguably interpreting the collective bargaining agreement and not dispensing his or her own brand of industrial justice is how the Court put it
. Now, we fast forward a little bit, 30 years ago, this Court decided in the petroleum workers' case that because of that deferential standard of review, an employer's unjustified refusal to comply with an arbitration award equates with bad faith, and if it gives rise to a necessary litigation to enforce that award, it's a result in an attorney's fee award against the employee. But that case, and maybe or maybe not, this makes a difference. That case, I think, was a simply a refusal to abide by the award rather than bringing a challenge in court to the award. Am I wrong? Yes. And you're wrong? Yes, I'm wrong. No, yes, you're right. You're right. But there have been numerous cases since then where let me put it this way. It's irrelevant who gets to the courthouse first
. Whether the union has to go in because the employer just ignores the award, or whether the employer goes into vacate the award as here and the union counterclams to enforce the award, either way the union has to engage in unnecessary litigation and spend its money to try and get the award enforced. And that is the reason why. If I could just say, just finish one last thing, Your Honor, I'm sorry. And in the seventh circuit case, we cited Jasper, as well as a whole bunch of district court cases, we cited, the employer did move, did go in first to vacate the award, and fees were granted. I guess I boiled this down. Tell me if I'm oversimplifying the case. A determination as to whether PG&E's motion to vacate the Arbitrators Award was frivolous or not. That to me seems like the key question from your standpoint as to whether attorney's fee should have been awarded. And don't we review for abuse of discretion that district court's determination that it wasn't frivolous? No, Your Honor, because the district court applied the wrong standard, and therefore it's not in the district court that the exact standard that you were sorry
. Am I? Why are people not able to hear me? Sorry. The district court quoted the right standard. She quoted the exact same standard you have in your brief. So I don't know. And if she had stopped there, you'd be correct, Your Honor. But respectfully, I disagree, because this, as you cited, a bankruptcy case. What, for a general proposition, is that your- No, she, well, I don't recall if it was the bankruptcy case offhand, but she cited another case for the proposition that in order to award fees, the court has to make a specific finding of bad faith. And that, in fact, is not the law of petroleum workers. The court doesn't have to make a specific finding of bad faith because the unjustified refusal equates with bad faith
. There doesn't have to be, I think, really what she was thinking of was a sort of subjective bad faith. And that is absolutely not the law. I think the court had it right, which is to say, I need to figure out whether this attempt to vacate the award was frivolous or not. And the court analyzed the frivolousness question under the exact standard that we've articulate, whether the arbitrator was basically, you know, coming up with some kind of a rough, rough justice or whatever the right phrase is. The court clearly applied that standard. And I mean, listen, I would be inclined to agree with you if I were sitting here by myself that the attempt to vacate the award was frivolous. But that's why I say it. I thought we had to review that determination under an abuse of discretion standard and the court is the one that ultimately ruled on the motion. Why wouldn't we defer to the court's judgment on that? Well, two reasons
. One, again, I don't want to belabor this, but I don't think the court, I don't think the district court applied the correct standard. It added an unjustified refusal plus standard. But even if the court had nearly cited the petroleum workers standard, I think it would be an abuse of discretion to conclude that this was not a frivolous matter. This was not a frivolous. Listen, the court, the district court held that, in fact, I have the exact words, the district court held that this was, excuse me, Your Honor. Well, I don't have it right in front of me. The district court held this was not a viable ground. It was not legally cognizable ground. And yet the court held that it wasn't frivolous
. It doesn't make any sense. In fact, as the, there was a very good decision from the Northern District of California SSA terminals. What SSA terminals decided was, quote, because of the deference courts owed arbitral decisions, a challenge to an arbitral decision based only on the merits of the case is frivolous because it is destined to fail. And so my answer to your question is, even if you were reviewing for abuse of discretion, there is an abuse of discretion. Just tell me this. I couldn't find a single case in the sanctions context where we were reviewing the frivolousness determination for abuse of discretion. And the court said, no, I find this isn't frivolous. And then we looked at it and said, no, actually that was an abuse of discretion. This was so clearly frivolous, we're reversing you
. Are there other cases that said that? There is a case, Your Honor. And it's the case that this court relied on extremely heavily and quoted from and expressly approved in the petroleum workers case. And that's the fifth circuit case in the steel, Texas steel company. And what the, there, the fifth circuit reversed the district courts refusal to grant fees and found that, in fact, it was frivolous. And if I can just quote from the steel case, Texas steel case, because it was so heavily relied on by this court and petroleum workers, what the Court and Texas steel said is the company's objection, properly characterized, addressed not the arbitrator's jurisdiction, but rather the panels, it's an arbitration panel there. The panel's action on a matter involving the intrinsic merits of the dispute, i.e., the panel's interpretation of the grievance and its broad discretion in fashioning and appropriate remedy. As noted, Supra, these grounds for attacking an arbitration award, no matter how characterized, are without merit and a refusal to abide by a decision based on such grounds, is without justification
. Consequently, we hold that the district court abused its discretion in refusing to award attorneys fees against the company. And that's the case that this court built the petroleum workers case from. And that decision was in the context of a petition to vacate the award by the panel, which was deemed not frivolous by the district court, and the fifth circuit said no. It clearly was. I don't recall whether it was the employer's petition to vacate or the union's petition to enforce. I don't remember who got to court first, but clearly in the lower court, the, the employer raised the inherently frivolous argument. Yes. What do we do with, and I'm basically following up on Judge Watford's questions, what do we do with simultaneously the standard is it's frivolous or not, and we review for abusive discretion, because that's puzzling to me, because in determinations whether an argument is frivolous really strikes me as a question of law. But on the other hand, we're reviewing for abusive discretion as to whether or not the district judge got the question of law, right? What else must, what am I supposed to do here? I guess, first of all, I'd just like to reiterate one more time
. I don't agree. It's a question of abusive discretion, but if that were the legal standard that was applied, I think that it depends on why it's frivolous. There are certain things that are frivolous, that are sort of factual matters, and that would kind of, the district court would have a broader discretion. But where the employer raises the ground, and this is its sole ground as here, that the arbitration award should be overturned because the arbitrator misinterpreted the collective bargaining agreement, that is, by definition, as a matter of law, that is a frivolous argument, and if the district court were to conclude, as it did here, it's not a viable ground, it's not cognizable in law, but somehow it's not frivolous, that's an abusive discretion. So I think the only way to apply the abusive discretion standard here is to say, since the employer argued the arbitrator misinterpreted the collective bargaining agreement, it is frivolous in any determination about the district court to the contrary is an abusive discretion. Other cases may raise factual questions. Thank you. I'm just, why don't we hear from the outside? Thank you, Your Honor. Good morning
. May I please the Court? Why wasn't it frivolous? It seemed like a pretty lousy argument being made. Well, Your Honor, the, you know, if you'd asked me, you said, am I going to win in front of the district judge on this, I'd say, are you out of your mind? You're out of the argument that PG&E made, as the district court recognized, was the argument PG&E made. It strikes me to the district court on the question of the enforceability arbitration award, the district judge was right and so right as to its impossible to think you would have got a different answer. Your Honor, the, the, PG&E relied on the United Markis decision of this court in 1985, where an arbitrator, respected arbitrator, Sam Kegel, turned a contractual phrase that the employer could no longer classify employees as general clerks and made an award where an employer could continue to classify employees as general clerks. The union in that case moved to vacate under Section 301 on the same grounds, PG&E moved to vacate here and succeeded. But in that case, in the United Markis Justice Kennedy, then the Circuit Judge here have dissented and called the court's interpretation of the contract, a wooden interpretation. Justice Kennedy would have relying on the arbitrator's broad discretion to interpret the contract would have affirmed arbitrator Kegel's award. And, and he, Justice Kennedy would have ordered that what the arbitrator was doing was actually interpreting the contract, not ignoring it, and so that the question of whether it's a misinterpret, it's an interpretation, excuse me, or ignoring is a, is a result. Well, that the court, that the court reaches and it was, and Judge Armstrong recognized if PG&E's argument had been accepted, if the contractual language, nothing here in shall be construed to require the company to pay for meal periods, if PG&E was right that that language which the company believed was clear and unambiguous was, we would have one. Well, let me put it in these terms, because I certainly agree with you that you raised a ground that, if it had been viable, you could have won on it. It wasn't frivolous. You invoked the right legal standard, but when you map it on to the facts before us, I think that's what Judge Fletcher's question gets to. I look at 15.2, and I look at the Arbitrator's Award, and I don't see how for one second you could make the argument that the Arbitrator was doing anything other than construing how broadly should that second paragraph, the exception carved out in the second paragraph, how broadly should we constru that? And that is squarely within the realm of our cases that say you don't get to vacate an Arbitrator's Award on that basis. So you can't just talk in abstract generalities about, well, we raised a ground that if we had prevailed on it would have been successful. Explain to me how what the Arbitrator was doing here in any way fits into that role. Absolutely, Your Honor. And this is the argument that PG&E made to the district court that the district court was reviewing
. Well, let me put it in these terms, because I certainly agree with you that you raised a ground that, if it had been viable, you could have won on it. It wasn't frivolous. You invoked the right legal standard, but when you map it on to the facts before us, I think that's what Judge Fletcher's question gets to. I look at 15.2, and I look at the Arbitrator's Award, and I don't see how for one second you could make the argument that the Arbitrator was doing anything other than construing how broadly should that second paragraph, the exception carved out in the second paragraph, how broadly should we constru that? And that is squarely within the realm of our cases that say you don't get to vacate an Arbitrator's Award on that basis. So you can't just talk in abstract generalities about, well, we raised a ground that if we had prevailed on it would have been successful. Explain to me how what the Arbitrator was doing here in any way fits into that role. Absolutely, Your Honor. And this is the argument that PG&E made to the district court that the district court was reviewing. The first paragraph of Section 15.2 says nothing herein shall be construed to require the company to pay for meal periods during regular workouts. The second paragraph says if the company assigns, the company may assign officers to a certain ship in which the company makes a decision to assign officers to a paid ship. Again, it's not a required amount of ship. Kagan, the question became how has the company in fact within the meaning of paragraph 2, has the company in fact assigned these employees? It's just you're trying to construe what is this language in the second paragraph meaning that's by definition an interpretation question. This wasn't an Arbitrator, you know, just coming up with their own, hey, I just want to ignore what this says because I think this is the just result. I mean, I think I might agree with you if the all you had was the first paragraph. But you have the second paragraph. And our argument was it was based on that exact language
. The first paragraph of Section 15.2 says nothing herein shall be construed to require the company to pay for meal periods during regular workouts. The second paragraph says if the company assigns, the company may assign officers to a certain ship in which the company makes a decision to assign officers to a paid ship. Again, it's not a required amount of ship. Kagan, the question became how has the company in fact within the meaning of paragraph 2, has the company in fact assigned these employees? It's just you're trying to construe what is this language in the second paragraph meaning that's by definition an interpretation question. This wasn't an Arbitrator, you know, just coming up with their own, hey, I just want to ignore what this says because I think this is the just result. I mean, I think I might agree with you if the all you had was the first paragraph. But you have the second paragraph. And our argument was it was based on that exact language. And into the district court we cited Supreme Court authority on linguistics. Shao in the first sentence is mandatory. That was our argument. May in the second sentence, second paragraph is permissive. Meaning the clear language of section 15.2 says nothing requires the company to do this. The company may do this by choice. And the Arbitrator's award, our argument was required the company to go back and pay not only for the instances where the company did assign, in which in those instances it was stipulated were already paid when the company actually made that decision to assign an officer to an on duty shift. It was when the company did not assign that the Arbitrator ordered those muo periods are paid too
. And into the district court we cited Supreme Court authority on linguistics. Shao in the first sentence is mandatory. That was our argument. May in the second sentence, second paragraph is permissive. Meaning the clear language of section 15.2 says nothing requires the company to do this. The company may do this by choice. And the Arbitrator's award, our argument was required the company to go back and pay not only for the instances where the company did assign, in which in those instances it was stipulated were already paid when the company actually made that decision to assign an officer to an on duty shift. It was when the company did not assign that the Arbitrator ordered those muo periods are paid too. And the district court eventually determined the Arbitrator's decision. So I can't remember which case of ours put the standard in this term. But it said, we're just trying to determine whether the Arbitrator was interpreting the collected bargaining agreement, not whether the Arbitrator interpreted it correctly. And so what's your argument for saying that the Arbitrator was doing anything other than just trying to interpret paragraph two? The argument PGD. Rightly or wrong. I mean, I hear what you're saying. Maybe you think that the paragraph two shouldn't have been construed in that way, but how can you say that that wasn't what the Arbitrator was at least trying to do? And the argument PGD made, which is the argument Joe Johnstone rejected on the merits, was that the Arbitrator ignored the mandatory nothing in the first paragraph and made the permissive may in the second paragraph mandatory. That sounds like construing the language of the CBU. And in your honor, that's what in United Markets, that's what Justice Kennedy and his descent would have, that's how he would have viewed the award of San Pagan
. And the district court eventually determined the Arbitrator's decision. So I can't remember which case of ours put the standard in this term. But it said, we're just trying to determine whether the Arbitrator was interpreting the collected bargaining agreement, not whether the Arbitrator interpreted it correctly. And so what's your argument for saying that the Arbitrator was doing anything other than just trying to interpret paragraph two? The argument PGD. Rightly or wrong. I mean, I hear what you're saying. Maybe you think that the paragraph two shouldn't have been construed in that way, but how can you say that that wasn't what the Arbitrator was at least trying to do? And the argument PGD made, which is the argument Joe Johnstone rejected on the merits, was that the Arbitrator ignored the mandatory nothing in the first paragraph and made the permissive may in the second paragraph mandatory. That sounds like construing the language of the CBU. And in your honor, that's what in United Markets, that's what Justice Kennedy and his descent would have, that's how he would have viewed the award of San Pagan. Yes, that's right. And if Justice Kennedy had been in the majority in that case, that would not have trans-retroactively transferred the company's argument into a bad faith. Now, the argument should be considered again. Review the betting for me on what our standard review is of what the district judge did. Is it abuse and discretion? And your honor, yes it is. And where's that come from? How do I know that we review for abuse and discretion rather than do we think it ourselves that it's frivolous? Under the inherent powers. When a district court does, it does not award at 20 cities under the inherent powers. That's reviewed for abuse and discretion. That's the Supreme Court's decision in chambers
. Yes, that's right. And if Justice Kennedy had been in the majority in that case, that would not have trans-retroactively transferred the company's argument into a bad faith. Now, the argument should be considered again. Review the betting for me on what our standard review is of what the district judge did. Is it abuse and discretion? And your honor, yes it is. And where's that come from? How do I know that we review for abuse and discretion rather than do we think it ourselves that it's frivolous? Under the inherent powers. When a district court does, it does not award at 20 cities under the inherent powers. That's reviewed for abuse and discretion. That's the Supreme Court's decision in chambers. This court's decision in Virginia Mason and this court's decision in well-made. Does that mean that if the district judge had agreed with Magistrate Judge Beeler and awarded fees, he would lose? Let's say we would be reviewing for abuse and discretion. If the district judge had agreed with Magistrate Judge Beeler, would that have been under abuse and discretion? If that had been Judge Armstrong's award, we would be fighting against both the abuse and discretion standard and the clearly erroneous standard, which applies to Judge Armstrong's decision that PG&E did or did not act in bad faith. And that comes from Virginia Mason. I'm not sure you're answering my question. Assume that this had simply been assigned to Magistrate Judge Beeler and that's the answer. And we were reviewing Magistrate Judge Beeler for abuse and discretion. Do you lose? The company I can- That's not the case from the property. Probably would not have appealed because we would be fighting against the abuse and discretion standard on a appeal
. This court's decision in Virginia Mason and this court's decision in well-made. Does that mean that if the district judge had agreed with Magistrate Judge Beeler and awarded fees, he would lose? Let's say we would be reviewing for abuse and discretion. If the district judge had agreed with Magistrate Judge Beeler, would that have been under abuse and discretion? If that had been Judge Armstrong's award, we would be fighting against both the abuse and discretion standard and the clearly erroneous standard, which applies to Judge Armstrong's decision that PG&E did or did not act in bad faith. And that comes from Virginia Mason. I'm not sure you're answering my question. Assume that this had simply been assigned to Magistrate Judge Beeler and that's the answer. And we were reviewing Magistrate Judge Beeler for abuse and discretion. Do you lose? The company I can- That's not the case from the property. Probably would not have appealed because we would be fighting against the abuse and discretion standard on a appeal. Okay. If there are no examples in this circuit of an instance where this court has reversed district courts restraint in not imposing inherent power sanction, in Chambers the Supreme Court, and this is after the 1983 case in the Petroleum Workers' case that SEIU relies heavily on, Chambers in the Supreme Court counsel that inherent power sanctions must be exercised with the strength. That's consistent with the Supreme Court's decision in Christian Bergarmant company versus the EOC, which said that district courts must avoid the temptation to engage in post-tocque reasoning by concluding that an argument because it was unsuccessful must have been made in bad faith initially. It's consistent with the teaching of Chambers. It's consistent with this court's decision in Primus Automotive, which denies sanctions under the inherent powers because parties must be free to make colorable, arguments based in law even if they're unsuccessful. It's consistent with this court's decision in sheet metal workers versus Kinney and federated department stores. And in Virginia Mason, Virginia Mason is a 2007 case upon which Judge Armstrong relied in her decision on the merits. Virginia Mason denied an employer's challenge on public policy grounds, so the employer you don't have the valid public policy challenge and denied an employer's challenge to an arbitration award on interpretation grounds, said to the employer, this is not, the arbitrator is not ignoring the arbitrator's interpreting and denied it on those grounds. But the reason that Virginia Mason, this Court of Virginia Mason, didn't award sanctions is not because the company was close in went to winning
. Okay. If there are no examples in this circuit of an instance where this court has reversed district courts restraint in not imposing inherent power sanction, in Chambers the Supreme Court, and this is after the 1983 case in the Petroleum Workers' case that SEIU relies heavily on, Chambers in the Supreme Court counsel that inherent power sanctions must be exercised with the strength. That's consistent with the Supreme Court's decision in Christian Bergarmant company versus the EOC, which said that district courts must avoid the temptation to engage in post-tocque reasoning by concluding that an argument because it was unsuccessful must have been made in bad faith initially. It's consistent with the teaching of Chambers. It's consistent with this court's decision in Primus Automotive, which denies sanctions under the inherent powers because parties must be free to make colorable, arguments based in law even if they're unsuccessful. It's consistent with this court's decision in sheet metal workers versus Kinney and federated department stores. And in Virginia Mason, Virginia Mason is a 2007 case upon which Judge Armstrong relied in her decision on the merits. Virginia Mason denied an employer's challenge on public policy grounds, so the employer you don't have the valid public policy challenge and denied an employer's challenge to an arbitration award on interpretation grounds, said to the employer, this is not, the arbitrator is not ignoring the arbitrator's interpreting and denied it on those grounds. But the reason that Virginia Mason, this Court of Virginia Mason, didn't award sanctions is not because the company was close in went to winning. The reason was that there was no evidence that the company had acted in bad faith or excessively, wantonly or for oppressive reasons. The district court found us with evidence here and the district court's order should be affirmed. Thank you. Thank you. We've got down to about 30 seconds. Why don't we make it a minute and 30 seconds? Thank you, Your Honor. There's two brief points. First of all, Virginia Mason is not determined to appear because there the employer did raise a public policy defense. It lost on the public policy defense, but a public policy argument is not inherently frivolous the way a misinterpretation argument is
. The reason was that there was no evidence that the company had acted in bad faith or excessively, wantonly or for oppressive reasons. The district court found us with evidence here and the district court's order should be affirmed. Thank you. Thank you. We've got down to about 30 seconds. Why don't we make it a minute and 30 seconds? Thank you, Your Honor. There's two brief points. First of all, Virginia Mason is not determined to appear because there the employer did raise a public policy defense. It lost on the public policy defense, but a public policy argument is not inherently frivolous the way a misinterpretation argument is. The last thing I'd like to say is sort of, I think, where I wanted to start today, the problem exemplified by this case is that because the district courts have not uniformly been applying and following the petroleum workers' case, you keep getting cases before the district courts and then coming up to this court where largely employers, have keep raising this argument that for 50 years the courts have said is a frivolous argument. And the only way to stop it is to send a clear message that this is the law that these arguments are inherently frivolous and that they will be met with a fee award. That is how we can put an end to this 50 years of frivolous arguments. That's a lot to put on a single case. 50 years of abuse by you guys. Okay. Thank you. Thank you, Your Honor. Pacific PGA and Eversist SEIU Local 24-7 is estimated for decision