[00:00:00] Speaker 04: Case number 12-1071 at L, Camelot Terrace Inc. [00:00:04] Speaker 04: at L Petitioners vs. National Labor Relations Board. [00:00:07] Speaker 04: Mr. Landu for the petitioners, Ms. [00:00:09] Speaker 04: Sheheek responded. [00:00:30] Speaker 00: Good morning, and may it please the Court. [00:00:32] Speaker 00: I'm Chris Landau, and I'm here today on behalf of the Appellants. [00:00:34] Speaker 00: I'd like to reserve three minutes for rebuttal. [00:00:37] Speaker 00: This case turns on the simple and subtle point that administrative agencies have only those powers granted to them by statute. [00:00:46] Speaker 00: Those powers may be explicit or implicit, but unless they're in the statute, the agency doesn't have them. [00:00:53] Speaker 05: Let me ask you, you argue that there's no difference between litigation costs and bargaining costs. [00:01:00] Speaker 05: Is that correct? [00:01:01] Speaker 00: No, Your Honor, we don't say there's no difference. [00:01:03] Speaker 00: We say that there is a spectrum where litigation... Should I pull out your brief? [00:01:09] Speaker 00: Again, I think what we say is bargaining costs are akin to litigation costs on the spectrum that has litigation costs clearly not recoverable on one end of the spectrum and reinstatement with or without back pay on the other end of the spectrum, which is clearly a substantive remedy. [00:01:29] Speaker 00: Our position, Your Honor, is that bargaining costs are like litigation, the costs that you have to encourage to try to get the substantive remedy, not the substantive remedy in and of itself. [00:01:41] Speaker 00: So to the extent we suggested in our brief that they are indistinguishable or absolutely identical. [00:01:48] Speaker 05: You're qualifying that now? [00:01:49] Speaker 00: I'm qualifying that today, yes. [00:01:51] Speaker 05: Because we have already held, as you know, in Falbrook, that bargaining [00:02:00] Speaker 05: expenses was a reasonable interpretation. [00:02:05] Speaker 00: Absolutely, Your Honor. [00:02:06] Speaker 00: And let me qualify what I'm about to say again. [00:02:10] Speaker 00: Your Honor just said the word we have held in Fallbrook. [00:02:13] Speaker 00: As we said in our recent 28-J letter last week, we think that that was not a holding in Fallbrook, that the issue presented in Fallbrook and the way the decision is written [00:02:23] Speaker 00: It says the only issue here is whether the board abused its discretion in, you know, applying its standard and that there was no challenge there to the authority issue. [00:02:35] Speaker 00: If your honors believe that you crossed that bridge in Fallbrook, then, you know, [00:02:41] Speaker 00: I'll have to live with that, but we just wanted to point out that we think that that is an over-reading of Fallbrook and that Fallbrook falls more naturally into the unbelievable mold where the issue, in unbelievable, they did enforce an award of negotiating fees because that had not been challenged. [00:03:00] Speaker 00: And again, I think this is the first case to present a square challenge to the authority issue on bargaining costs. [00:03:08] Speaker 04: I agree with you. [00:03:09] Speaker 04: I agree with you because Fahlberg, I looked and looked for any site to any time we had. [00:03:18] Speaker 04: said bargaining costs were awardable and the only sites are to the board and that's that would be fine if we'd gone ahead to say and we agree or and we affirm or something like that. [00:03:32] Speaker 04: It'd be just like noting that the district court held such-and-such and stopping there. [00:03:38] Speaker 04: I think at most it's a subsolential holding which [00:03:42] Speaker 04: is not favored. [00:03:44] Speaker 00: Again, so I think bargaining costs, certainly the authority issue for bargaining costs is still a live issue in this court, unless you want to go to a regime where overly broad language can be characterized as a holding. [00:03:57] Speaker 00: Again, let's start here with the litigation costs, because I think the litigation costs are just squarely in the face of this court's [00:04:07] Speaker 05: OK, we're talking about attorney's fees, right? [00:04:09] Speaker 00: Yes, exactly. [00:04:10] Speaker 05: I just want to get language straight. [00:04:12] Speaker 00: Yes, exactly. [00:04:13] Speaker 00: So attorney's fees. [00:04:14] Speaker 00: We think that their assertion that they can invoke the board, the board's assertion of inherent authority, which is the only basis on which they are basing their award-shifting attorney's fees, is inherent authority. [00:04:29] Speaker 00: That that is not only incorrect, but truly radical in administrative law. [00:04:34] Speaker 00: One can certainly agree or disagree with the extent to which Congress gives a particular authority to the board. [00:04:41] Speaker 00: And there are plenty of cases where this Court and others have held that general rulemaking authority carries with it certain implicit [00:04:50] Speaker 00: grants of power. [00:04:53] Speaker 00: The point is, and this court held this in unbelievable, that precisely because fee-shifting is such an exception to our general rule, it cannot be fit into that rubric of implicit authority. [00:05:07] Speaker 00: So in unbelievable- That's a slight overstatement of unbelievable. [00:05:11] Speaker 05: Yes. [00:05:12] Speaker 03: Well, John- It seems to me that the footnote two leaves it open. [00:05:19] Speaker 00: Again, what I was saying, Your Honor, again, I mean to be very clear, and I apologize if I was not. [00:05:25] Speaker 00: Unbelievable resolves the statutory authority issue, both explicit and implicit statutory authority. [00:05:35] Speaker 00: It leaves open the question of inherent authority. [00:05:37] Speaker 00: The footnote star says, we are not deciding. [00:05:42] Speaker 00: The dissent in that case suggested that there might be inherent authority. [00:05:47] Speaker 00: And the majority in Unbelievable said, [00:05:49] Speaker 00: The board order before us relied solely on its statutory authority. [00:05:56] Speaker 00: So we have no reason to address the inherent authority issue that the dissent is getting into. [00:06:02] Speaker 00: And I apologize if I just misspoke a moment ago. [00:06:05] Speaker 00: What I was saying is the unbelievable court [00:06:07] Speaker 00: clearly said there was no statutory authority, but it reserved, in the footnote that Your Honor mentioned, the question of inherent authority. [00:06:17] Speaker 00: And our basic point here is that as a matter of Administrative Law 101, there is no such thing as inherent authority for an administrative agency the way an Article III court may have inherent authority. [00:06:29] Speaker 00: To be sure, this court and others have sometimes used the phrase inherent authority. [00:06:35] Speaker 00: But if you look at each one of those cases, they're always talking about implicit statutory authority. [00:06:42] Speaker 05: They're looking at... Well, we have said it wasn't ultra-virus. [00:06:46] Speaker 00: This court in the Alwyn case, again, the issue came up about litigation costs, and there had been no objection. [00:06:55] Speaker 00: You had almost probably the same colloquy that you had today. [00:06:59] Speaker 00: And all this court said is it's not obviously ultra virus. [00:07:03] Speaker 00: That hardly means that it's correct or that they have it. [00:07:07] Speaker 00: And so Judge Wald, who was the author of The Descent in Unbelievable, speaking for the court in Alwyn, just said in a footnote in Alwyn, you know, this was not properly raised here and we don't have to get to the extraordinary circumstances exception under 1080 because it's not obviously ultra-virus. [00:07:27] Speaker 00: This case is the first case where this court is squarely presented with the issue whether or not the board can has inherent authority separate and independent from statute. [00:07:40] Speaker 00: And our proposition to you today is that that would be truly revolutionary administrative law. [00:07:47] Speaker 00: Yeah. [00:07:48] Speaker 05: Revolutionary. [00:07:49] Speaker 03: It doesn't, I mean, let's assume, Marguerite, that the talk of inherent authority in a congressionally created agency is an oxymoron. [00:08:02] Speaker 03: But does unbelievable exhaust all the possible inferences of a grant of authority from the statute? [00:08:14] Speaker 00: Well, your honor, it certainly does under 10 C. Right. [00:08:18] Speaker 00: And what I would say to you in response to that question is that the board in this case did not purport to point to some other implicit source of statutory authority. [00:08:29] Speaker 00: In other words, it didn't say here's our general rules and regulations provision. [00:08:35] Speaker 00: The board in this case [00:08:37] Speaker 00: specifically relied on inherent authority akin to the inherent authority of the Article III court. [00:08:43] Speaker 00: So from a chennery point of view, that is the issue you have here before you. [00:08:47] Speaker 00: This would be a different case if the board had gone off and found some other source of statutory authority that wasn't covered in unbelievable. [00:08:56] Speaker 05: What I want to be clear about is when the board says it's our inherent authority, and then it talks about we're acting [00:09:07] Speaker 05: to sort of control our proceedings and the integrity and efficiency and effectiveness of our proceedings. [00:09:17] Speaker 05: My question is, is that a sufficient enough reference? [00:09:21] Speaker 05: Because I think it was one of our judges in a dissenting opinion who said that to talk about inherent authority in the administrative context is incorrect. [00:09:34] Speaker 05: It's a question of whether or not [00:09:36] Speaker 05: you can infer it from the statutory grant. [00:09:40] Speaker 05: So the board in talking about, you know, we do have authority to control our proceedings, to control those who come before us, that type of thing. [00:09:49] Speaker 05: Do you think that's enough of an invocation or do they have, does the board have to cite, you know, section 10Q or something? [00:09:59] Speaker 00: Your Honor, I think that's a hard question to answer in the abstract. [00:10:03] Speaker 05: No, I'm asking it in the context of this case. [00:10:06] Speaker 00: I think they clearly did not. [00:10:07] Speaker 00: In the specific context of this case, I think it is crystal clear, if you look at the board's opinion, they're citing Chambers versus Nasco. [00:10:14] Speaker 00: They're citing the entire line of Article III cases involving the bad case shifting as an inherent sanction outside of Rule 11 and everything else. [00:10:23] Speaker 00: There is not one word in the board's decision here that says anything about any other statutory source of authority. [00:10:31] Speaker 05: I agree. [00:10:32] Speaker 05: They don't cite 10Q. [00:10:34] Speaker 05: But they're talking about, I'm just asking this as a question. [00:10:38] Speaker 05: Sure. [00:10:38] Speaker 05: Is it sufficient that they're saying we do have authority to control the proceedings before us? [00:10:45] Speaker 05: And when a party comes before us and acts in the manner of this party, we can say, [00:10:53] Speaker 05: there, we can try to establish a status quo and we can try to equalize the [00:11:05] Speaker 05: What is it, the relationship between the parties in the sense that one party doesn't end up with an advantage over another by means of corrupting our procedures? [00:11:19] Speaker 05: Absolutely not, because the language... So there is nothing... I just want to be clear. [00:11:24] Speaker 05: There is nothing, in your view, that the board could do in the most egregious case [00:11:34] Speaker 05: that the board thought was before it. [00:11:38] Speaker 05: other than say, Congress, please help us out. [00:11:42] Speaker 00: Your Honor, I think you shifted the verb tense slightly, because I think your initial question was to me saying, in this case, so my response to you was, in this case, there's absolutely nothing that the board did to invoke any other statutory source of authority. [00:11:56] Speaker 05: So what other source of authority might be available? [00:11:58] Speaker 00: Well, again, I think that is a question for the board in the first instance. [00:12:01] Speaker 00: That could create a chennery issue. [00:12:02] Speaker 05: What would you think? [00:12:03] Speaker 00: Well, again, [00:12:04] Speaker 00: I don't think there is money. [00:12:06] Speaker 05: The way your brief is written, all right? [00:12:08] Speaker 05: Be clear. [00:12:09] Speaker 05: As I read it, and I may have misread it, your point is that unless there's a statute 10Q saying the board is hereby authorized to impose attorney's fees, it lacks such authority statutorily and necessarily. [00:12:28] Speaker 05: It therefore lacks authority as a matter of its inherent power [00:12:34] Speaker 05: period. [00:12:36] Speaker 05: And you stop there. [00:12:37] Speaker 00: Yes, I think, again, that's not just me. [00:12:39] Speaker 00: That is Unbelievable saying the standard the Supreme Court has set. [00:12:43] Speaker 00: No, no, no. [00:12:43] Speaker 05: We're trying to be clear about Unbelievable. [00:12:45] Speaker 05: I thought Judge Williams' questions are trying to point out that Unbelievable doesn't. [00:12:50] Speaker 05: At least I understood his question to ask whether you thought Unbelievable went that far. [00:12:56] Speaker 00: Well, I think Unbelievable does say that attorney's fees are different. [00:13:02] Speaker 00: Shifting attorney's fees is different. [00:13:03] Speaker 00: And we've known since Alieska and the Summit case that Congress doesn't hide attorney's fees shifting in mouse holes. [00:13:12] Speaker 00: That is a big deal. [00:13:13] Speaker 05: At least in the Article III context. [00:13:16] Speaker 00: Well, again, I would think even less so in the agency context. [00:13:19] Speaker 00: I would think it would be strange to think that it would. [00:13:23] Speaker 00: And I think, again, this court addressed that specific potential distinction in Unbelievable 2, because the dissent in Unbelievable made that argument, and the court said, made the point that I just made it even weirder to say it in the agency context. [00:13:36] Speaker 00: So yeah, I think the answer to your question, Judge Rogers, is to say, I think the logic of unbelievable and really of the Supreme Court is that you can't [00:13:48] Speaker 00: kind of through conjuring up, through implications in very general provisions, fine authorization for fee shifting. [00:13:55] Speaker 00: That's not the way our system works. [00:13:57] Speaker 05: Let me just go back, because I want to be clear about Fulbrook. [00:14:02] Speaker 05: The court there says the only question before the court on the petition for review is whether the board [00:14:10] Speaker 05: I'm quoting, award of negotiation expenses was a clear abuse of discretion, citing steelworkers. [00:14:18] Speaker 05: Fallbrook argues that the board decision is wanting because it fails to take account of the totality of the circumstances and is unsupported by law. [00:14:29] Speaker 05: We reject that argument. [00:14:32] Speaker 00: And I think that's why, in response to our, in our 20HA letter, we attach not only the opinion, but the briefs. [00:14:39] Speaker 00: And I think it is clear, when it says unsupported by law, it was not actually making a broader authority point. [00:14:46] Speaker 00: It was simply saying it's unsupported in the board's law, insofar as the board's case law about negotiating costs required X, Y, and Z. And in Fallbrook, they were saying it didn't meet X, Y, and Z, the board's standard. [00:14:58] Speaker 05: And this court says and has a rational basis in the law. [00:15:03] Speaker ?: Right. [00:15:04] Speaker 05: All right. [00:15:05] Speaker 05: You just think it's an application case, not an authority case. [00:15:10] Speaker 00: I do, Your Honor. [00:15:11] Speaker 00: I do, Your Honor. [00:15:12] Speaker 00: I recognize there is some language in this Court's opinion that seems to go broader than that. [00:15:19] Speaker 05: And I think then the question... Well, when we talk about abuse of discretion, it means, you know, arbitrary capricious or contrary to law. [00:15:25] Speaker 05: Well... So, you know, several things going on. [00:15:29] Speaker 00: If this court wants to read its cases that way and say that case is, that's water under the bridge and we're never, you know, that's fine. [00:15:36] Speaker 00: The one thing I would say on bargaining costs is that we have a separate and independent argument apart from the authority argument, which is the award of all costs. [00:15:43] Speaker 00: And in that regard, I think it's quite felicitous that our case is here today along with the HDH case. [00:15:48] Speaker 05: Why isn't it just premature, that issue? [00:15:51] Speaker 00: Well, again, the question is, we are fine. [00:15:54] Speaker 00: If this court says this is premature, no problem, as long as it's clear that the standard that applies in the subsequent compliance proceeding is the standard that the board itself articulated in HDH under which [00:16:08] Speaker 00: It says, and I'm quoting now from HDH, to guard against a speculative remedy or a punitive remedy, to put it differently, we will require the union to provide detailed evidence of such expenditures at the compliance proceeding. [00:16:20] Speaker 00: But this is your point, that there's a subsequent compliance proceeding, along with evidence showing that they resulted from the respondents' unfair labor practices and why they would not otherwise have been incurred. [00:16:31] Speaker 05: I think this is your argument to the board. [00:16:33] Speaker 05: I'm sorry? [00:16:34] Speaker 05: This is your argument on compliance. [00:16:35] Speaker 00: I understand, but the board has said- We don't have to jump ahead. [00:16:37] Speaker 00: In its briefing in this court, the board said, well, it's premature. [00:16:41] Speaker 00: And then in a subsequent proceeding, it says, we, the company, can try to show that these are not causally related. [00:16:48] Speaker 00: The burden is key. [00:16:49] Speaker 00: The burden makes it punitive. [00:16:51] Speaker 00: The union should have the burden of showing why, for instance, to go back to Judge Henderson's hypo from the previous case, somebody isn't getting double paid from their salary of sitting there in the negotiating table and elsewhere. [00:17:04] Speaker 00: That should be the union's burden. [00:17:05] Speaker 00: My only point you're making. [00:17:06] Speaker 05: Isn't that, just as we were discussing in the other case, the type of thing that you would raise on a motion for consideration, then? [00:17:14] Speaker 00: Well, Your Honor, again, I think they have now said it is premature. [00:17:19] Speaker 00: We are just saying, it's kind of strange for them to say it's too late. [00:17:22] Speaker 00: It should have been raised in motion for reconsideration. [00:17:23] Speaker 00: And now you can't raise it now. [00:17:27] Speaker 00: We are just saying, please, we are 100% fine if this court. [00:17:30] Speaker 05: But you agree with me you could have raised this on a motion for reconsideration. [00:17:34] Speaker 00: You could have, but again, it's a little bit strange for them to be saying, you know, they have somehow waived it. [00:17:39] Speaker 00: They can no longer ever raise it. [00:17:40] Speaker 00: At the same time, they're saying to you, this is premature. [00:17:43] Speaker 05: They're giving you another chance. [00:17:44] Speaker 00: I'm sorry? [00:17:45] Speaker 05: They're giving you another chance. [00:17:46] Speaker 00: Well, yeah, OK. [00:17:47] Speaker 00: And what we're saying is we're delighted. [00:17:49] Speaker 05: Take it and run. [00:17:50] Speaker 00: Let's just be clear that when we get that other chance, that it's the other chance under the current board standard. [00:17:57] Speaker 05: Ah, but the point is the court [00:18:00] Speaker 05: doesn't have jurisdiction because you didn't raise it. [00:18:03] Speaker 05: It's the argument being made. [00:18:05] Speaker 05: So you have to make all your arguments. [00:18:07] Speaker 05: The board has given you this opportunity. [00:18:08] Speaker 00: Well, Your Honor, again, I think we have two answers to that. [00:18:11] Speaker 00: First, again, I think by them saying that they don't actually say that you don't have jurisdiction in the sense that when they're saying that it's premature, that is actually inconsistent with saying that you don't have jurisdiction. [00:18:23] Speaker 00: And the second is, this seems to me, is ordering [00:18:28] Speaker 00: Allowing us to be responsible for bargaining costs that did not flow from an unfair labor practice would be clearly antivirus and punitive. [00:18:38] Speaker 00: In other words, that, it seems to me, would fall into the extraordinary circumstances exception to the extent that they are forcing us to pay, in their words, all bargaining expenses from the first session in January 2008 to the last session in May 2009, every nickel, [00:18:56] Speaker 00: And there has been no factual finding that every single one of those flowed from an unfair labor practice. [00:19:03] Speaker 00: So again, I think that would be clearly untrue, even assuming they have the authority to award these as a general matter, to award all bargaining costs without qualification. [00:19:14] Speaker 00: And unless this court says something, what they're going to do in the compliance proceeding is hand us a bill that says, OK, here's the guy spent two days. [00:19:24] Speaker 00: You have to pay 2% of his yearly salary or whatever. [00:19:28] Speaker 00: And the union has to show why they would not have incurred those costs but for the unfair labor practice or else it's punitive. [00:19:35] Speaker 05: Now, the board says that you, your client, never raised to the board [00:19:44] Speaker 05: that it lacked a statutory authority under 10C regarding reimbursement. [00:19:52] Speaker 03: Right. [00:19:53] Speaker 05: All right. [00:19:54] Speaker 05: And then in your response, you say, well, yes, we did. [00:19:58] Speaker 05: But when I look at what you referred to, it's just in a heading. [00:20:02] Speaker 05: There's no argument. [00:20:04] Speaker 00: That is true, Your Honor. [00:20:05] Speaker 05: And references to costs, which heretofore we've been talking about costs as attorney's fees. [00:20:10] Speaker 00: We do specifically say bargaining costs in that heading. [00:20:13] Speaker 05: And that's the last time it's mentioned. [00:20:16] Speaker 00: That is true, Your Honor. [00:20:17] Speaker 05: How does that comply with the board's rules? [00:20:20] Speaker 00: I think perhaps a more important point is that the board then went on to actually assert authority to do it, to award bargaining costs. [00:20:30] Speaker 05: No, no, no, no. [00:20:31] Speaker 05: It asserted authority, but you never challenged, says the board, its authority to impose that as a remedy. [00:20:39] Speaker 05: And the only place you mentioned it to the board is in a heading. [00:20:43] Speaker 05: And you had no argument. [00:20:45] Speaker 05: No, I'm just asking you, because you came back in your reply very strongly saying, no, no, we did raise it. [00:20:53] Speaker 00: And we did. [00:20:54] Speaker 00: You can query whether or not that was sufficient. [00:20:56] Speaker 00: But I mean, factually, it is there. [00:20:58] Speaker 05: This is not a query. [00:21:00] Speaker 05: It's in a heading. [00:21:01] Speaker 05: There's no argument. [00:21:02] Speaker 00: Well, Your Honor, again, but what I would emphasize then is that the Board did proceed to address that issue. [00:21:09] Speaker 00: If you look at page three of the Board opinion... No, no. [00:21:11] Speaker 05: The Board imposed it. [00:21:13] Speaker 05: That it was your obligation, was it not, to object. [00:21:18] Speaker 00: Well, again, the ALJ imposed it. [00:21:21] Speaker 00: Then we go to the board, and we have this heading that specifically includes bargaining costs. [00:21:28] Speaker 05: And that's the last mention of bargaining costs. [00:21:30] Speaker 00: That's fair. [00:21:31] Speaker 00: But I would say then, what happens after that is the board issues a decision. [00:21:35] Speaker 00: The board specifically affirms, we have authority to do this. [00:21:40] Speaker 00: And so the point I would make is that where the board is actually [00:21:45] Speaker 00: making legal conclusions. [00:21:49] Speaker 00: It's one thing for the board to say, you know something, we're not going to address our legal authority because it's never been challenged, so we don't have to go there. [00:21:55] Speaker 00: But when the board affirmatively goes there, it seems like it would be undesirable to have a regime where this court then cannot review legal conclusions that the board actually made. [00:22:05] Speaker 05: Where it's never challenged? [00:22:07] Speaker 05: Well, if the... In a motion for reconsideration? [00:22:09] Speaker 05: If the board doesn't ever go there, again... But you can say you've done this, but you don't have any authority to do it. [00:22:17] Speaker 05: Your Honor, again, the record is... Why isn't that exactly the scheme that Congress had in mind? [00:22:22] Speaker 00: Your Honor, again, I think what Congress had in mind was not necessarily the board making legal conclusions on allegedly unchallenged grounds that then were immune from judicial review. [00:22:33] Speaker 05: Okay, let me just underscore... No, it said... [00:22:36] Speaker 05: Let's raise your objection to the board. [00:22:38] Speaker 05: Let's see what the board says about it. [00:22:40] Speaker 05: The board might say you're right. [00:22:42] Speaker 00: Your Honor, again, all I can say is that it is in the heading. [00:22:46] Speaker 00: It was specifically addressed by the board. [00:22:48] Speaker 00: But again, just to be clear, we're talking there only about the authority on the bargaining cost side of the house. [00:22:53] Speaker 00: There's several different issues here. [00:22:54] Speaker 00: I just want to make sure that we don't get them. [00:22:56] Speaker 05: I thought that's what we were discussing. [00:22:57] Speaker 00: We don't get them confused. [00:22:59] Speaker 05: Then there's the no one's getting them confused. [00:23:01] Speaker 00: Maybe I'm getting all right. [00:23:03] Speaker 05: We've been talking about bargaining. [00:23:04] Speaker 05: Yes expenses. [00:23:05] Speaker 00: Yes. [00:23:06] Speaker 00: There's a different issue of bargaining expenses, which is the all bargaining expenses. [00:23:10] Speaker 00: And that is a different issue where the board is happy to get a chance to [00:23:14] Speaker 00: It's premature. [00:23:15] Speaker 00: And let me underscore again, there is no procedural barrier that is put up in this case, unlike the HTH case where there was some colloquy on this, with respect to the inherent authority to award litigation costs. [00:23:27] Speaker 00: So I think what this case is really teeing up for the first time is the question whether the board has inherent authority that is separate and independent from any statute [00:23:39] Speaker 00: to award, to shift attorney's fees. [00:23:43] Speaker 00: And I think the answer to that fundamental question of administrative law is and has to be no. [00:23:49] Speaker 03: There's a passage in your reply brief where you respond to the board on chambers. [00:23:55] Speaker 00: Okay. [00:23:55] Speaker 03: Looking at the top of page 16. [00:23:56] Speaker 03: Okay. [00:23:58] Speaker 03: Thus the board's efforts to characterize the fee shifting here is remedial rather than punitive. [00:24:03] Speaker 03: rather impunitive in nature fails utterly, citing footnote 15. [00:24:08] Speaker 03: And I guess I'm just not sure what that means. [00:24:10] Speaker 00: Well, Your Honor, I think Chambers is somewhat of an ironic case for the board to be relying on. [00:24:19] Speaker 00: Because it seems to me Chambers makes it crystal clear, and even the board's reading of Chambers here a few minutes ago, that what was at issue in Chambers was [00:24:30] Speaker 00: the court's remedial authority to punish or to sanction the parties for misconduct in the courtroom. [00:24:45] Speaker 00: So it's not the underlying offense. [00:24:47] Speaker 00: In other words, I think opposing counsel, my friend, got up here and actually emphasized that it was not for the underlying offense. [00:24:54] Speaker 00: This case is chambers on steroids. [00:24:56] Speaker 00: Because in this case, the board is actually saying, [00:24:59] Speaker 00: the bad faith exception for shifting attorney's fees is warranted because of the underlying unfair labor practices. [00:25:07] Speaker 00: They're saying, your client didn't, you know, he didn't bargain in good faith. [00:25:12] Speaker 00: He showed up late for the meetings. [00:25:13] Speaker 00: He canceled the meetings. [00:25:15] Speaker 00: That is not, [00:25:16] Speaker 00: The conduct underlying the sanction for which they are claiming inherent authority is not limited to conduct before the board and the litigation proceeding. [00:25:29] Speaker 00: And I think, Your Honor, you asked a question earlier. [00:25:31] Speaker 00: Why did chambers go off on whether this was punitive? [00:25:34] Speaker 00: It's because it had to be [00:25:36] Speaker 00: clear that it was imposing sanctions as there was an eerie issue in chambers. [00:25:44] Speaker 00: And it had to be litigation-related conduct to avoid the eerie issue, because if it was for the underlying breach of contract, then it would look a lot more substantive. [00:25:55] Speaker 00: If it was remedial in order to make the other party whole, it would create a lot more eerie questions. [00:26:01] Speaker 00: That's I think the answer to your question why chambers went out of its way to say our bad faith attorney shifting is punitive, which again I think goes to underscore why even assuming that agencies could invoke inherent authority completely separate from their statutory authority, they don't fit into the chambers box. [00:26:21] Speaker 00: It's a totally different box. [00:26:23] Speaker 00: And that's not what they're actually doing here. [00:26:24] Speaker 00: If you look at their order, the conduct that they are talking about is all the underlying unfair labor practice conduct. [00:26:31] Speaker 00: It is by no means limited to the conduct in the proceedings before the board. [00:26:36] Speaker 05: So the board says the respondents accept only. [00:26:41] Speaker 05: You're familiar with that language. [00:26:44] Speaker 00: In which context is the board saying this, Your Honor? [00:26:46] Speaker 05: This is in the second paragraph of its decision and order. [00:26:50] Speaker 00: OK. [00:26:55] Speaker 05: Actually, it's the third paragraph. [00:26:57] Speaker 00: Yes, I see that language you're on in front of me. [00:27:00] Speaker 00: So I think what the board is saying there is we are not accepting to the underlying unfair labor practices conduct, which is true, the exceptions we brought before the board related to the attorney's fees and to the bargaining costs. [00:27:16] Speaker 05: Where does it say that? [00:27:17] Speaker 00: The response says, only to the order granted, general counsel's request that reimburse the union for all costs and expenses incurred in collective bargaining negotiations. [00:27:25] Speaker 00: So that's the negotiating costs. [00:27:27] Speaker 00: It says, in addition, the respondents accept to the judge's order that they reimburse the board and charging party for, quote, all costs and expenses. [00:27:36] Speaker 00: And this, again, just goes to show how remarkable this is. [00:27:38] Speaker 00: In the investigation, preparation, and conduct of these cases before the board and the courts. [00:27:46] Speaker 00: So those are the two. [00:27:48] Speaker 00: In other words, this even goes beyond attorney's fees to investigation costs and things that are absolutely unheard of in our system to be reimbursing a government agency for its investigation costs and its bargaining costs. [00:28:07] Speaker 00: Again, a similar kind of order came up in Unbelievable, and this court [00:28:12] Speaker 00: characterize this generally as shifting attorney's fees. [00:28:16] Speaker 00: But frankly, I think even looking at the kind of language they have here about investigation, preparation, and conduct just shows that they're going even further. [00:28:26] Speaker 00: I mean, if attorney's fees can't be recovered, then if, or she or I, the cost of investigating for the thing that results in the litigation. [00:28:34] Speaker 05: So the board operates under an annual appropriation. [00:28:38] Speaker 00: Right. [00:28:38] Speaker 05: The union has presumably an annual budget. [00:28:42] Speaker 00: Right. [00:28:43] Speaker 05: And everybody spent years wasting time because of the object of the charge brought by the general counsel. [00:28:59] Speaker 05: All right. [00:29:00] Speaker 05: And the way I read your brief, it really doesn't matter. [00:29:05] Speaker 05: there's nothing the board can do. [00:29:08] Speaker 05: I just want to be clear about that. [00:29:11] Speaker 05: So that even if an employer admits, doesn't challenge factual findings about a pattern of violations of unfair labor practices for years and years and years and years, [00:29:37] Speaker 05: And it's just been a total waste of time. [00:29:44] Speaker 05: The board just has to swallow hard and say, well, that's the way it is. [00:29:52] Speaker 05: We're not going to be able to, our backlog will just grow 10, 20 times, because everybody will come in here and simply do what this employer did, frustrate our proceedings, and admit that it's done that, and admit it's done it deliberately. [00:30:16] Speaker 05: And I just want to be clear. [00:30:19] Speaker 05: Your position is they have no authority [00:30:23] Speaker 05: whatsoever to award any costs, whether you call them bargaining expenses or attorney's fees. [00:30:37] Speaker 00: Two points, Your Honor. [00:30:40] Speaker 00: Even under the board's regime, these costs would not go back to the general counsel of the board. [00:30:46] Speaker 00: These would be paid to the US Treasury. [00:30:48] Speaker 05: No question about it. [00:30:49] Speaker 05: We all know how that works with OMB. [00:30:51] Speaker 05: So let's not get into the details of your negotiations with OMB. [00:30:56] Speaker 05: The Labor Department can handle that. [00:30:58] Speaker 05: But the point is it sends a message to the people who are coming before the board [00:31:03] Speaker 05: that you can't wreck the system that Congress has created for the purpose of not only Section 7 rights, but Section 8 rights as well to protect the employer. [00:31:17] Speaker 00: Congress can correct this with the stroke of a pen. [00:31:20] Speaker 05: That's your point. [00:31:21] Speaker 05: There is nothing the board can do other than say to Congress, we need punitive authority. [00:31:28] Speaker 00: So either correct, either this court's decision in unbelievable was wrong and the [00:31:35] Speaker 00: general authority to- Well, we're stuck with it, but- Well, I'm saying that. [00:31:40] Speaker 00: In other words, one could have made an argument, and they did make an argument at the time of Unbelievable, that for exactly the policy reasons that Your Honor just articulated, you should read this kind of authority into some of the general interstices and the general remedial authority under Section 10C. [00:31:54] Speaker 00: This court rejected that. [00:31:56] Speaker 00: So they have gone now to an assertion of inherent authority. [00:32:00] Speaker 00: Our proposition is, and I agree with Your Honor, as things stand now, they don't have inherent authority that exists separate and apart from their statute. [00:32:08] Speaker 00: So if this is a problem, and Your Honor has articulated an entirely valid policy concern, the answer is, given the American rule's strong rooting in our legal culture, they have to go to Congress. [00:32:20] Speaker 00: Unbelievable already held. [00:32:22] Speaker 00: It's not in the statute. [00:32:24] Speaker 00: So if it's not in the statute, then what they're saying is, well, they've now tried to come up with, it's inherent. [00:32:29] Speaker 00: It's in the clouds outside the statute. [00:32:32] Speaker 00: That won't work. [00:32:33] Speaker 00: So again, I think as a result of unbelievable, if they feel that there is a hole to be filled, they should go to Congress. [00:32:39] Speaker 00: Now again, I will say one thing that's important. [00:32:42] Speaker 00: We are not saying that the agency has absolutely no way to discipline people and no implicit [00:32:50] Speaker 00: No other authorities. [00:32:52] Speaker 00: I mean, Lord knows, the board has a lot of weapons in its quiver. [00:32:56] Speaker 00: The one weapon it doesn't have is litigation costs. [00:32:59] Speaker 05: It's shifting... And what weapon? [00:33:00] Speaker 05: You don't want to tell me what weapon it has with regard to what the board says is bad faith conduct at the bargaining table, precluding any progress toward reaching agreement on numerous occasions [00:33:14] Speaker 05: And it just goes on and on and on. [00:33:17] Speaker 00: Well, again, the board's authority is remedial. [00:33:19] Speaker 05: Blatantly circumventing the bargaining process, disregarding their statutory bargaining obligations by unilaterally implementing numerous changes. [00:33:33] Speaker 05: And then it cites its opinion in frontier. [00:33:38] Speaker 00: which actually, again, was a statutory opinion saying that it had this authority under 10C, a proposition that this court rejected in unbelievable. [00:33:48] Speaker 00: And again, the board is a creature of stature. [00:33:53] Speaker 00: The board has, from day one, been deemed to be remedial. [00:33:58] Speaker 00: Maybe your honor is suggesting that when you have some bad apples who come before the board, they ought to be able to do some punishment. [00:34:04] Speaker 00: How are you going to deter things? [00:34:05] Speaker 05: The normal practice would be [00:34:08] Speaker 05: And the cases are cited involving the SEC. [00:34:11] Speaker 05: You're barred from this area of endeavor. [00:34:15] Speaker 05: Correct. [00:34:16] Speaker 05: All right. [00:34:17] Speaker 05: Now, can the board bar your clients from interstate commerce? [00:34:24] Speaker 00: We see no problem with the proposition that administrative agencies, as in the Touche Ross case, the Tchaikovsky case, the Polidorov case, can be deemed to have certain implicit [00:34:40] Speaker 00: authority to police their own processes. [00:34:43] Speaker 00: And in those cases that I just mentioned, I think your honor just mentioned, courts have upheld under agencies general rulemaking and adjudicatory. [00:34:52] Speaker 05: I'm with you, counsel, but the point is the SEC cases, they bar you from practice in that field. [00:34:59] Speaker 00: Right. [00:34:59] Speaker 05: Can the board [00:35:01] Speaker 05: bar your client from engaging in interstate commerce because of its egregious conduct before the board? [00:35:08] Speaker 00: Again, your honor, that is not presented here. [00:35:10] Speaker 05: I know, but I'm pressing you. [00:35:11] Speaker 05: You say the board has all these remedies. [00:35:14] Speaker 00: I think that would seem to me to cross the punitive remedial line. [00:35:19] Speaker 04: Well, I would think you would. [00:35:20] Speaker 04: Well, didn't the board do exactly that when it said Boeing couldn't move from Washington state to South Carolina? [00:35:27] Speaker 04: Yes. [00:35:28] Speaker 04: That's exactly what the board. [00:35:30] Speaker 00: And I think that was a highly controversial decision. [00:35:34] Speaker 00: And again, I mean, I think. [00:35:36] Speaker 05: Why did it do that? [00:35:37] Speaker 00: Yeah, I'm not that familiar with the ins and outs of that case, but I'm just in the background of everything we're talking about. [00:35:43] Speaker 05: We're going back to the eulies of egregious conduct over decades by the employer. [00:35:48] Speaker 05: Or was it because of the treatment of the union members and employees? [00:35:52] Speaker 05: I mean, I don't know why the board did it, but I'm just talking about in this case, [00:35:59] Speaker 05: This says, you know, abrogation of the settlement agreements, defiance of their legal obligations to bargain, refusal to resolve these cases short of trial, reliance on non-meritorious defenses that cause the general counsel and the union to expend resources needlessly and burden the board's processes unnecessarily. [00:36:19] Speaker 00: I think you are raising some interesting questions. [00:36:23] Speaker 05: But I mean, I'm raising it only in the context of saying that the board has made a finding of bad faith in exceptional circumstances, and there still is nothing the board can do. [00:36:33] Speaker 00: Certainly, I don't know about nothing, but the one thing I can say it can't do is invoke extra statutory inherent authority akin to the authority of the Article 3-4. [00:36:43] Speaker 05: Although you do acknowledge it has inherent authority in some respects. [00:36:47] Speaker 00: Again, I think then it depends what you mean by inherent authority. [00:36:51] Speaker 05: What do you mean by it? [00:36:52] Speaker 00: Well, what I mean is authority that does not derive from a statute. [00:36:55] Speaker 00: I think this is the point that we all have to be. [00:36:56] Speaker 05: But you said the board had some inherent authority. [00:36:59] Speaker 00: No. [00:37:00] Speaker 00: Again, Your Honor, what I [00:37:02] Speaker 00: But this court has certainly used the word adherent authority. [00:37:06] Speaker 00: If you look at every single case in which that has ever been used, it has always been used as another way of referring to implicit statutory authority. [00:37:16] Speaker 00: That is exactly the point that Judge Pillard made in her recent dissent in the Ivy sports case. [00:37:21] Speaker 00: Pillard. [00:37:22] Speaker 00: I'm sorry. [00:37:22] Speaker 02: Pillard. [00:37:23] Speaker 00: Pillard. [00:37:23] Speaker 00: Excuse me. [00:37:24] Speaker 00: That Judge Pillard made in that case. [00:37:30] Speaker 00: Again, we are not saying the board does not have certain implicit forms of statutory authority to control its own processes. [00:37:38] Speaker 00: What we are saying is what Unbelievable said was such kind of implicit authority does not extend to fee shifting, and once you acknowledge that, you can't [00:37:46] Speaker 00: go outside the statutory realm to invoke inherent authority that exists independent, that is not implicit statutory authority, but is actually inherent authority that is extra statutory by definition. [00:37:59] Speaker 00: That is what this case is about. [00:38:01] Speaker 04: If we rule in your favor, wouldn't we simply be saying, with all the other powers you may have, NRB, it doesn't include the redistribution of money [00:38:16] Speaker 04: In other words, the fees, the costs, maybe redistribution is the wrong word. [00:38:23] Speaker 04: It's loaded. [00:38:25] Speaker 04: But the one thing the board can't do is impose monetary [00:38:35] Speaker 04: remedies in the form of bargaining costs that aren't related to ULPs, attorney's fees, and anything else, fines, whatever they may. [00:38:47] Speaker 00: Yes, Your Honor. [00:38:48] Speaker 00: I think that's a good way of putting it. [00:38:49] Speaker 05: All right. [00:38:50] Speaker 00: There are no further questions. [00:38:50] Speaker 05: Has any court taken that position, just so I'm clear? [00:38:55] Speaker 00: I don't know that that issue has ever been teed up as such. [00:38:59] Speaker 05: Again, we honestly- I just wanted to know if in your research you had come across something. [00:39:04] Speaker 05: I assume you would have cited it. [00:39:07] Speaker 00: I have come across certainly many cases, and your honor is aware of many cases, saying that their authority is remedial, not punitive. [00:39:13] Speaker 00: I think once you start to getting into you must pay money, and it's remedial for the unfair labor practice. [00:39:23] Speaker 05: So once you start to- But I mean, the board does that when it orders back pay, front pay, reinstatement of employees. [00:39:32] Speaker 05: as you know, et cetera. [00:39:35] Speaker 05: I think Judge Henderson is drawing a distinction, and I just want to understand. [00:39:41] Speaker 05: I think she is, yeah. [00:39:43] Speaker 05: I'm sure she is. [00:39:45] Speaker 00: I agree. [00:39:45] Speaker 00: I think I understood that to be implicit in the question. [00:39:48] Speaker 00: I think you were talking about you can't impose money [00:39:51] Speaker 00: not to compensate the underlying unfair labor practice, but really as a result of alleged misconduct. [00:40:01] Speaker 00: And if Congress wants to get litigation misconduct or bad faith, and if Congress wants to give the board that authority, it can give it, but that doesn't fit easily into the remedial punitive dichotomy that is the world that we live in here. [00:40:12] Speaker 05: So where we've spoken of agencies having authority to protect the integrity of its processes, [00:40:19] Speaker 05: for the purposes of policing the conduct of practitioners before. [00:40:25] Speaker 00: Correct. [00:40:25] Speaker 00: That was not money. [00:40:26] Speaker 00: That case, I think the Polydorov case, the Tusharov case, that was about suspending a professional who practices before the agency for some period of time. [00:40:37] Speaker 05: And the right to practice in the profession itself for some time. [00:40:42] Speaker 05: If that's not monetary shifting, [00:40:45] Speaker 00: But it isn't directly. [00:40:46] Speaker 00: I mean, it is an exercise of the agency's authority. [00:40:51] Speaker 05: Well, I'm a stockbroker, and I can't function as a stockbroker for five years until I'm reinstated by the SEC. [00:40:59] Speaker 00: Your Honor, again, I think Judge Henderson's line has a lot to recommended that there are these cases. [00:41:08] Speaker 00: But put it this way, I think all the cases that I'm aware of, at least, are along the lines that Judge Henderson suggested, which are [00:41:15] Speaker 00: You can't practice. [00:41:16] Speaker 00: I'm not aware of anything that says, and you shall also remedy the harm you did on our process by reimbursing us for every day that you were standing before us being a clown. [00:41:31] Speaker 00: And again, I think that's somewhat interesting that it's fallen into more that kind of injunctive declaratory side rather than imposing fines and penalties. [00:41:45] Speaker 00: If there are no further questions? [00:41:47] Speaker 01: Thank you, Your Honor. [00:41:50] Speaker 02: Good morning again. [00:41:57] Speaker 02: Barbara Sheehy for the National Labor Relations Board. [00:42:02] Speaker 02: I want to start with the sort of where the court finished on opposing counsel thing. [00:42:07] Speaker 02: And I would like to caution the court the idea that there could simply be a statement from the court that within the board's powers is not, or within the board's remedial authority, is not the ability to redistribute [00:42:18] Speaker 02: for whatever the phrasing would be, the redistribution of money. [00:42:23] Speaker 02: Because it's not, I think in this case, you're talking two different, very, very different types of costs. [00:42:29] Speaker 02: You're talking about litigation expenses, which there's been a lot of discussion on how rooted in the American jurisprudence that is. [00:42:36] Speaker 02: But then you're also talking about the board's statutory authority under 10C to impose [00:42:42] Speaker 02: bargaining expenses as a remedial measure. [00:42:45] Speaker 02: So I would just caution the court, and I'd also say, and I think we've sort of belabored the point so I won't go there too much, is that the argument on the 10E that frankly it's not, again, it's not a preserved claim, that it was taken for granted that the board had the authority on bargaining costs. [00:43:00] Speaker 02: Certainly we are in complete agreement that the issue of [00:43:02] Speaker 02: litigation expenses is entirely preserved and properly before the court. [00:43:06] Speaker 02: But just like the employer before, this employer did not properly preserve the authority of the board. [00:43:12] Speaker 02: If you read the brief, the brief goes strictly to whether or not the employer's conduct reached the threshold level of imposing bargaining expenses on this employer. [00:43:22] Speaker 02: Want to speak. [00:43:23] Speaker 02: Also, I'm going to say we're in agreement with the council on the issue of Fallbrook. [00:43:29] Speaker 02: I was the attorney that handled Fallbrook and I agree that the court there, I know for a fact that the employer in that case did not challenge the underlying authority of the board to act. [00:43:40] Speaker 02: that what was briefed in that case was whether or not irrespective of, I think, how their brief read in terms of the authority of the board, I think it went to what opposing counsel said, which was whether or not under the board's precedent did their conduct reach the sufficiently egregious level. [00:43:54] Speaker 02: So that notwithstanding, so we certainly don't believe, unfortunately, that Fallbrook is [00:43:59] Speaker 02: on the issue of bargaining expenses should the court decide to reach that. [00:44:03] Speaker 02: But we would say, and I think Judge Henderson commented on this, that sub silencio, there is in that case certainly an endorsement from this court. [00:44:10] Speaker 02: There's very emphatic language on the board's remedial authority to issue bargaining expenses. [00:44:14] Speaker 02: So I'd encourage the court not just simply to say Fulbrook has no bearing, but there is language in that case that I think is very helpful in defending what the board sees as its remedial authority to impose bargaining costs. [00:44:27] Speaker 02: I wanted to speak now to chambers, just to clarify what happened there. [00:44:31] Speaker 02: And I think it is relevant. [00:44:32] Speaker 02: I must have done a poor job trying to explain it before, so I'm going to take one more crack at it now that I have two times to be up here this morning. [00:44:39] Speaker 02: In that case, it was significant. [00:44:40] Speaker 02: Because of the Erie issue, it was significant to determine whether the conduct that was being sanctioned was [00:44:49] Speaker 02: the underlying claim or whether the conduct was in the litigation itself. [00:44:54] Speaker 02: Because if a finding of the latter would have meant [00:44:58] Speaker 02: that litigation expenses were properly awardable because it wouldn't have been punitive. [00:45:04] Speaker 02: It would have been punitive if the sanctions were imposed because of the breach of contract claim, because you're piling on in that instance. [00:45:12] Speaker 02: And so I know we're all going to stumble over exactly what does it mean then to have it be the underlying conduct. [00:45:17] Speaker 02: And I would encourage the court to look at what the conduct was in chambers. [00:45:22] Speaker 02: I said this before, and I'll just repeat it. [00:45:24] Speaker 02: In chambers, the conduct was filing false and frivolous pleadings, attempting by other tactics of delay, oppression, harassment, and massive expense to reduce NASCO to exhausted compliance. [00:45:35] Speaker 02: And here you have the board looking at Camelot's conduct, which wasn't simply the bad faith. [00:45:42] Speaker 02: I think that's a massive understatement of what the board looked at from what the conduct was. [00:45:49] Speaker 02: The board ordered the exchanging of fees, the shifting of fees rather, for four reasons. [00:45:54] Speaker 02: The abrogation of the settlement agreements, defiance of legal obligation to bargain, refusal to resolve the 2009 cases short of litigation, [00:46:02] Speaker 02: and reliance on transparently non-meritorious defenses. [00:46:06] Speaker 02: And I think if you look at the reasons that the board imposed there and said your conduct is sufficiently [00:46:14] Speaker 02: bad faith that we're going to invoke the bad faith exception of the American rule, but that is remarkably similar to the conduct that was found by the Supreme Court in chambers to not be related strictly to the underlying claim, but to the actual conduct of the litigation itself, to bring it outside the realm of punitive. [00:46:32] Speaker 02: So I would say that it would be worthwhile to look at what the specific conduct was in both cases when deciding whether or not the board's order is punitive. [00:46:41] Speaker 02: I'd also remind the court that the litigation costs, because I think there's been some perhaps overstatements of what the board actually imposed, the litigation costs against Camelot were limited to the 2009 cases. [00:46:54] Speaker 02: There were two sets of unfair labor practices. [00:46:56] Speaker 02: They were limited to, the litigation costs are limited to the 2009 cases. [00:47:02] Speaker 02: And that's specifically because, as I outlined before, what the board's order was, the abrogation of the settlement agreements. [00:47:09] Speaker 02: the façade of entering into settlement agreements with the implicit understanding that you're just gonna walk away, those cases subsequent to that, those cases are the ones where the board ordered litigation expenses, not dating all the way back throughout all of the 2008 and 2009 issues. [00:47:29] Speaker 02: To be fair, the 2008 bargaining, so the bargaining expenses [00:47:33] Speaker 02: are dating back under the order to the 2008. [00:47:36] Speaker 02: That will go for the length of the bargaining. [00:47:38] Speaker 02: But the litigation expenses were limited to everything that happened when the employer repudiated the settlement agreements. [00:47:45] Speaker 04: Is this case 33 CA 15781? [00:47:48] Speaker 04: I'm sorry? [00:47:49] Speaker 04: Is this what, Linda, remedy C? [00:47:55] Speaker 04: reimburse the NLRB and the union for all costs and expenses incurred in the investigation preparation conduct of case 33 CA 1578. [00:48:04] Speaker 02: Yes, yes, I believe that's the 2009. [00:48:06] Speaker 02: Let me double check. [00:48:08] Speaker 02: I believe those are the 2009. [00:48:09] Speaker 02: I think we try to make this point in the brief. [00:48:11] Speaker 02: Those are the 2009 cases. [00:48:12] Speaker 02: Let me just before I definitively say that 15781, yes, was the 2009 case. [00:48:17] Speaker 02: All right, and then the next one, D, sweeps in all the cases. [00:48:22] Speaker 02: That's 2008 and 2009. [00:48:24] Speaker 02: So right, to be sure the bargaining expenses date back from the time of the sham bargaining that the employer engaged in. [00:48:34] Speaker 01: Moving to the... [00:48:37] Speaker 02: issue of the all costs. [00:48:41] Speaker 02: I did want to make a small point here that the employer makes much of the fact that the board's order in HTH was far more specific than it was in this case, so therefore the board's order must be in from here because they didn't tie the bargaining costs to the unfair labor practice. [00:49:00] Speaker 02: And I think there's a fundamental misunderstanding on what's being quoted when the board says in HTH, the very specific evidence that it's requiring the union to come forward to. [00:49:10] Speaker 02: That was on a unique remedy that we haven't, in my knowledge, we haven't seen before. [00:49:15] Speaker 02: It wasn't the bargaining expenses as related to sitting at the table. [00:49:19] Speaker 02: It was the bargaining costs. [00:49:21] Speaker 02: non bargain costs rather associated with the borrowing of the access of the employees in that case. [00:49:27] Speaker 02: If the board looks, I'm sorry, from the court looks at the actual order itself. [00:49:31] Speaker 02: in HTH, the very detailed language about insisting that the union come forward with very detailed evidence showing that any of the expenses it intends to recoup stem from the violations is not a bargaining expense order. [00:49:45] Speaker 02: That is part of the board's remedy of the unfair labor practice of the employer in that case, from unilaterally barring two of the employees, union organizers, or union employees, or union representatives, rather, from entering the facility. [00:50:00] Speaker 03: I mean, I take it you're saying that on remand and compliance procedures, the company would have the burden of showing the absence of causal connection, right? [00:50:15] Speaker 03: You're saying that. [00:50:16] Speaker 02: No, what I'm saying is I think all you can read into the board the difference. [00:50:20] Speaker 03: No, I'm just trying to get your either prediction or commitment as to what the board is going to do in compliance procedures. [00:50:27] Speaker 03: And what you're saying here would seem to be pointless unless you were essentially saying the burden will be on the company to show absence of causal relationship. [00:50:39] Speaker 02: No, I don't think so. [00:50:40] Speaker 02: I think in a compliance proceeding for here, for instance, the union, the union would have to come forward to show what cost it incurred in bargaining or in the HTH case, what cost it. [00:50:49] Speaker 03: So you're agreeing with Mr. Landau's request that the union carry the burden in that process. [00:50:59] Speaker 02: I think that's typically in compliance when the union is coming forward. [00:51:02] Speaker 02: Somebody has to produce it for negotiating expenses, for instance. [00:51:05] Speaker 02: Somebody has to start the conversation to say, I'm entitled to $25,000. [00:51:09] Speaker 03: Sometimes when you start the conversation, other people end it. [00:51:13] Speaker 05: That's right. [00:51:14] Speaker 05: Burden of coming forward, they distinguish from the burden of proof. [00:51:19] Speaker 02: Certainly, no. [00:51:19] Speaker 02: But I think the burden is still on the union to show that. [00:51:22] Speaker 03: You're saying counsel is wrong in citing what happened at HDH, but he's right in asking that the burden be placed on the union. [00:51:32] Speaker 02: Absolutely. [00:51:32] Speaker 02: And I think he's wrong in making, hey, that the board made some error here. [00:51:35] Speaker 02: I think it was just an instruction to the parties, because it was a different sort of remedy than you've seen. [00:51:40] Speaker 02: So they were reminding the union, we've not imposed something like this before. [00:51:44] Speaker 02: FYI, here's what you need to do in compliance. [00:51:46] Speaker 02: But I don't think it's any different than other typical compliance proceeding. [00:51:49] Speaker 02: I think it was reinforcing because it was a new order. [00:51:52] Speaker 03: OK. [00:51:53] Speaker 03: And the board does rely explicitly and exclusively on inherent authority. [00:51:58] Speaker 03: Is that right? [00:51:59] Speaker 02: It does rely on its inherent authority, right, to police its proceedings, which I agree. [00:52:04] Speaker 02: And there's been a lot of conferences. [00:52:06] Speaker 03: There's a lot that can fit within the concept of policing proceedings. [00:52:10] Speaker 02: absolutely right. [00:52:11] Speaker 02: And so I think we agree that the cases, and this is why the board in its brief sort of didn't really cite to the SEC cases or the FDA cases, because we agree, I agree, that in the reply brief, I think is where you see the bulk of the argument, that those cases, and also relying on Pollard's dissent in the Ivy Medical Center, that those are when [00:52:31] Speaker 02: the court is evaluating an administrative agency's invocation of inherent authority at a fundamental level in terms of the very function of the agency and it's like a jurisdictional question or whether or not it has authority over to regulate a particular industry in the FDA case. [00:52:50] Speaker 02: that in that circumstance, this court, I do think has been in other jurisdictions, don't speak to inherent authority. [00:52:56] Speaker 02: That's implicit in your statutory authority. [00:52:59] Speaker 02: But here, so I do agree that the way the board is using the term, the notion inherent authority is different than in those cases. [00:53:06] Speaker 02: The board here is not trying to assert itself in a jurisdictional fashion. [00:53:10] Speaker 02: Here you have the board outlining that at some point, at some basic level, it has to protect the integrity of its own process. [00:53:19] Speaker 02: That you can't function, even as a congressionally mandated body, you cannot function if parties before you behave in a manner that is at its fundamental level entirely inconsistent with the basic decorum and basic ways that you behave before the agency. [00:53:38] Speaker 02: So it's not that the board is relying on an implicit statutory ability or at its fundamental level, like I said, to promulgate legislative rulemaking. [00:53:49] Speaker 02: What it's relying on is its ability to protect its own process and to ensure that it can carry out its congressionally mandated [00:53:57] Speaker 02: I'm sorry, it's congressional mandate, that it can actually process the cases and that it can decide the cases and to just control its own process. [00:54:06] Speaker 02: So that's the inherent authority. [00:54:08] Speaker 02: So I completely agree that the notions of inherent authority are quite different and the way the board is invoking it here is not in the same sense that you've seen the FDA invoke it to defend a regulatory measure or the EPA when it went and when it defended or any of the other types of administrative regulations that we've seen in the briefs. [00:54:27] Speaker 05: I understand in those other types of cases cited in the gray brief that there is someone before the agency whom the agency can cite and whose behavior the agency can directly affect. [00:54:44] Speaker 05: Here, what authority does the board have to protect the processes Congress intended it to carry out? [00:54:56] Speaker 05: if it has no authority inherent or otherwise. [00:55:03] Speaker 02: And I guess that's where we part ways. [00:55:04] Speaker 02: I think the board views its authority differently, that it has its statutory authority to regulate the labor industry. [00:55:12] Speaker 05: Well, why aren't attorney's fees different? [00:55:21] Speaker 05: Well, I'm trying to draw this line. [00:55:23] Speaker 05: You know, counsel says in his brief, and he's backed off his brief a little bit this morning, but basically he says you can't do this. [00:55:35] Speaker 05: You're not a court. [00:55:38] Speaker 05: You don't have any sort of inherent authority like a court. [00:55:42] Speaker 05: You're an agency. [00:55:43] Speaker 05: And unless Congress says in height verba that you can do something, [00:55:49] Speaker 05: agency, you cannot do it. [00:55:52] Speaker 05: And so even if the board doesn't go that far, the question is, where do you draw the line? [00:55:59] Speaker 05: For example, if the board were to issue an order telling the company it has to sell its business in 30 days and it can never enter this business again because of the egregious way it behaved before the board, [00:56:17] Speaker 05: As distinct from some things that you're arguing under 10C, the board has been given the authority to do in terms of bargaining expenses. [00:56:30] Speaker 05: So has Congress signaled that attorney's fees are different? [00:56:38] Speaker 02: I don't think so, no. [00:56:39] Speaker 02: And I think two parts, two answers, two ways that I'd like to address the question is I think if you see the board do a patent overreach, like the example, you have to liquidate your assets because of the way you behaved, there is a way to seek review on that and the board couldn't defend. [00:56:53] Speaker 02: It would be under the patent overreach, this court could review that order. [00:56:58] Speaker 02: But on top of that, [00:57:00] Speaker 02: the notion that the board, I think I'd go back to many of the questions that you were asking opposing counsel, which is that there has to be some measure of ability, even in an administrative agency, to govern your own processes. [00:57:15] Speaker 02: And if it was simply a matter of there's no statutory authority so that ends the inquiry, there would have been no reason for this court in Alwyn, or even in Unbelievable, but I think it was more powerful in Alwyn, to say that [00:57:28] Speaker 02: the invocation of authority and inherent authority in awarding attorney's fees, that it's not obviously ultra-viris. [00:57:35] Speaker 02: I think that if it was a simple matter of if you can show that there is no statutory authority, you cannot have inherent authority. [00:57:41] Speaker 02: If that was the case, I don't think we would have seen that footnote from the Alwin Court indicating that it's not obviously ultra-viris to invoke an authority to govern your own processes where you have a very abusive party before you. [00:57:56] Speaker 04: Can I ask you, do you see the NLRB as sui generis? [00:57:59] Speaker 04: I mean, if you can impose attorney's fees, why can't any agency? [00:58:05] Speaker 02: I don't think that's a concern. [00:58:07] Speaker 02: And I say it because of this. [00:58:08] Speaker 02: The board has, and I'm not familiar with the enabling statutes of many of the other agencies, but the board is vested with the authority to [00:58:21] Speaker 02: to regulate the processes in the labor industry. [00:58:24] Speaker 04: So when somebody's litigating before it. [00:58:26] Speaker 04: Well, so does the securities industry. [00:58:28] Speaker 04: So does the drug industry. [00:58:30] Speaker 04: I mean, if you're authorized to award attorney's fees, why aren't they under this inherent authority argument? [00:58:40] Speaker 02: And I don't know. [00:58:41] Speaker 02: I don't know whether, if you could show that an administrative agency [00:58:46] Speaker 02: has the inherent authority. [00:58:47] Speaker 02: I don't know if there's a difference, for instance, and I wouldn't be able to speak to it. [00:58:50] Speaker 02: Is there a difference in what the SEC does versus the board as it matters to attorney's fees? [00:58:55] Speaker 02: I mean, not just fundamentally do they have a different function. [00:58:58] Speaker 02: So I wouldn't want to speak to that. [00:59:00] Speaker 02: But I think that if I don't see that the board's authority here is unique to the board if it's drawing from an inherent authority to govern its process. [00:59:13] Speaker 01: Unless there are [00:59:16] Speaker 01: Any other questions? [00:59:17] Speaker 01: I don't think I had anything else. [00:59:19] Speaker 01: Okay. [00:59:21] Speaker 01: Thank you. [00:59:23] Speaker 04: Thank you. [00:59:27] Speaker 00: Thank you, Your Honor. [00:59:28] Speaker 00: I'll be very brief. [00:59:29] Speaker 00: I have three quick points I'd like to make. [00:59:31] Speaker 00: First, my friend admitted, in a sense, that this is not just chambers and the inherent authority of the Article III courts that they're seeking, but chambers on steroids. [00:59:41] Speaker 00: Because she actually quoted, and it's right here on, it's on page six of the NLRB, the board's decision, the appendix, page six, [00:59:49] Speaker 00: It specifically says, in this proceeding, as in the above cases, we find ample proof that respondents here display bad faith, both in their underlying unlawful conduct and in their conduct related to the litigation. [01:00:05] Speaker 00: So there can be no question here. [01:00:10] Speaker 00: attorney's fees and the inherent authority invoked was not just the inherent authority invoked to police the proceedings, but to actually sanction the underlying conduct. [01:00:19] Speaker 00: So again, that is right there in the board's order that's before you. [01:00:22] Speaker 00: So at a minimum, this thing cannot be approved as an application of chambers. [01:00:28] Speaker 00: Second quick point I wanted to make. [01:00:29] Speaker 00: I think with respect to the burden on the bargaining costs in the compliance proceedings, that was a very interesting colloquy where I understood counsel basically to concede that the burden should be on the union. [01:00:43] Speaker 00: I just want to underscore that that is certainly different than what counsel said on pages 16 and 51 of the brief, where they said if the company believes that the award of bargaining cost should be limited, it is free to put forth [01:00:55] Speaker 00: supporting evidence. [01:00:56] Speaker 00: That was on 16, and the same thing on 51. [01:00:59] Speaker 00: According to the extent the company seeks to limit liability, it can bring forth evidence and argument. [01:01:04] Speaker 05: I thought the argument is that somebody's got to take the first step. [01:01:08] Speaker 05: The union says we spent $100,000. [01:01:10] Speaker 05: The company says, that's crazy. [01:01:12] Speaker 05: How much do you pay your attorneys? [01:01:14] Speaker 05: How much do you pay your secretaries? [01:01:16] Speaker 05: You know, that's ridiculous. [01:01:17] Speaker 05: You ought to cut that in half. [01:01:18] Speaker 05: The board has, the employer comes forward to challenge what the union says. [01:01:23] Speaker 05: I think this is where the union has the I go back to HCH then what does the union do after it says we spent a hundred thousand dollars and here are [01:01:34] Speaker 05: employee vouchers and our payroll records. [01:01:38] Speaker 00: We're going now to bargaining costs. [01:01:40] Speaker 00: And I think what the union has to do is say, look, we're charging you for five nights at this hotel. [01:01:47] Speaker 05: But all I'm getting at is, why are we getting into the nitty gritty of this? [01:01:51] Speaker 05: This is a board proceeding. [01:01:53] Speaker 05: They know how to run it. [01:01:54] Speaker 05: This is standard operating procedure. [01:01:57] Speaker 05: And it's premature for us to get it if you're not properly treated [01:02:02] Speaker 05: there, you can come back. [01:02:04] Speaker 00: Well, your honor, I guess I just wanted to underscore that the what the board is saying here would seem to be punitive. [01:02:11] Speaker 00: And I don't want the board to be able to turn around in compliance proceedings that you didn't object to that in the D. C. Circuit. [01:02:16] Speaker 00: So now guess what? [01:02:17] Speaker 00: It's race judicata. [01:02:19] Speaker 00: And you can't you lost your ability that just to make it very clear that we think it's clear you object. [01:02:24] Speaker 00: Okay, perfect. [01:02:25] Speaker 00: Then I have done my job on that sport. [01:02:27] Speaker 00: The last final, just very brief point is, again, I think it was very telling that when council was up here a moment ago talking about what is the best authority that they have for the proposition that the board or any agency has inherent authority that is completely separate and apart from their statute. [01:02:47] Speaker 00: The best that they could say was, well, the court dropped a footnote in Unbelievable, leaving that issue open, and then the court subsequently, in an opinion offered by Judge Wall for the court, [01:03:02] Speaker 00: also said it's not obviously ultra-virus, again, in a footnote. [01:03:07] Speaker 00: But whereas on the other side of the ledger, we have dozens of cases from the Supreme Court and this court saying that agencies are creatures of statute. [01:03:15] Speaker 05: But you have no case that makes this case... You admitted to me when I asked you that question, what's your best case? [01:03:25] Speaker 05: Has any other court decided this? [01:03:27] Speaker 05: And you said no. [01:03:28] Speaker 00: Well, this is the first time that an agency has ever invoked inherent extra statutory authority to award attorney's fees. [01:03:41] Speaker 00: There is no case that specifically addressed that issue, but there's lots of cases saying that's because they don't have inherent extra statutory authority at all. [01:03:50] Speaker 05: To do anything. [01:03:52] Speaker 00: To do anything. [01:03:52] Speaker 05: Even though you acknowledge that they have inherent authority in some respects. [01:03:57] Speaker 00: And again, I hope I have been 100% clear. [01:04:01] Speaker 00: The terminology gets confusing here. [01:04:03] Speaker 00: And again, I think this court and others have used sometimes the terminology of inherent authority when in fact they are referring to implicit statutory authority that is contained within a broad grant of authority. [01:04:15] Speaker 00: That's the only point I'm trying to underscore. [01:04:17] Speaker 00: Thank you, Your Honor.