Fees and Costs Assignment

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS

EL PASO DIVISION

EL PASO ELECTRIC COMPANY, § §

Plaintiff/Counterdefendant, § §

v. § § CASE NO. 3:11-cv-00080-FM

INTERNATIONAL BROTHERHOOD § OF ELECTRICAL WORKERS, § LOCAL NO. 960, §

§ Defendant/Counterclaimant. §

DEFENDANT’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS COMPLAINT

Defendant/Counterclaimant International Brotherhood of Electrical Workers, Local No.

960 (“Local 960” or “the Union”), by and through undersigned counsel, hereby replies in support

of its Motion to Dismiss the Complaint filed by Plaintiff/Counterdefendant El Paso Electric

Company (“EPE” or “the Company”). In support, the Union replies as follows.

ARGUMENT

I. EPE MISAPPREHENDS THE MOTION-TO-DISMISS STANDARD AND THE RANGE OF DOCUMENTS THE COURT MAY PROPERLY CONSIDER IN RULING ON SUCH A MOTION.

In laying out the motion-to-dismiss standard in its Response (p. 3), EPE recites by rote

outdated case law suggesting that a court may not dismiss a complaint “unless it appears beyond

doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him

to relief.” The case cited for this proposition is a Fifth Circuit case from 2000 which, in turn,

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quotes a U.S. Supreme Court case from 1957, namely, Conley v. Gibson, 355 U.S. 41, 45-46. In

doing so, EPE ignores a critical and extensive revision to the applicable standard wrought by the

Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and its

progeny.

Indeed, the Twombly Court specifically disapproved the very language quoted by EPE –

dubbed the “no set of facts” language by the Supreme Court – and noted that it had “earned its

retirement” and was “best forgotten as an incomplete, negative gloss on an accepted pleading

standard.” Id. at 563. In its place, the Supreme Court announced a new “plausibility” standard,

requiring a pleader to allege facts sufficient to “nudge[] their claims across the line from

conceivable to plausible.” Id. at 570. Put differently, the “plausibility” standard requires, at the

pleading stage, “enough fact[s] to raise a reasonable expectation that discovery will reveal

evidence” supporting a claim for relief. Id. at 556. After all, “when the allegations in a

complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency

should . . . be exposed at the point of minimum expenditure of time and money by the parties and

the court.” Id. at 558 (internal quotations and citations omitted).

This standard is applicable to “all civil actions.” See Ashcroft v. Iqbal, __ U.S. __, 129

S.Ct. 1937, 1953, 173 L.Ed.2d 868, 887 (2009). See also Moore v. Potter, 275 Fed.Appx. 405,

408, 2008 U.S. App. LEXIS 9215, **5 (5th Cir. April 28, 2008) (applying the Twombly standard

to a motion to dismiss a complaint to vacate a labor arbitration award); Am. Postal Workers

Union v. U.S. Postal Service, 188 L.R.R.M. 3590, 2010 U.S. Dist. LEXIS 47619, *5 (N.D. Tex.

May 14, 2010) (same). Thus, under the present motion-to-dismiss standard, EPE must set forth

sufficient facts to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570.

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For the reasons set forth in Local 960’s Motion to Dismiss and below, EPE fails to state such a

claim in this case.

In addition, EPE incorrectly insists that the EPE’s claims “must be evaluated solely on the

basis of the pleadings” (Response, p. 2). Such is simply not the case. As the U.S. Supreme

Court and the Fifth Circuit have noted, courts ordinarily examine documents attached to the

complaint and incorporated into the complaint by reference. See Tellabs, Inc. v. Makor Issues &

Rights, Ltd., 551 U.S. 308, 322 (2007) (“[C]ourts must consider the complaint in its entirety, as

well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss,

in particular, documents incorporated in the complaint by reference . . .”); U.S. ex rel. Willard v.

Humana Health Plan of Texas Inc., 336 F.3d 375, 379 (5th Cir. 2003) (“In deciding a motion to

dismiss the court may consider documents attached to or incorporated in the complaint . . .”).

Indeed, the Fifth Circuit recently considered an arbitration award attached to a complaint in

evaluating, and granting, a motion to dismiss a complaint to vacate a labor arbitration award,

basing its decision in large part on what the award itself indicated. See, e.g., Moore, 275

Fed.Appx. at 409-11 & n.2, 2008 U.S. App. LEXIS 9215, at **8-9, 14.

II. THE UNION DOES NOT SUGGEST THE CONTRACT LANGUAGE PROVIDING THAT THE ARBITRATOR’S DECISION IS TO BE “FINAL AND BINDING” PRECLUDES ANY JUDICIAL REVIEW UNDER ANY CIRCUMSTANCES, BUT RATHER ANY REVIEW IS “VERY LIMITED” IN LIGHT OF THIS PROVISION AND THE POLICY FAVORING FINALITY.

The Union emphatically does not assert – “half-heartedly”1 or otherwise – that this Court

“has no jurisdiction to review the arbitration decision” solely by virtue of the fact “the parties’

1 In using this particular adverb and in making the larger assertion, the Company merely parrots the language of the Dole Ocean Liner Exp. v. Georgia Vegetable Co. case cited in its Response (p. 3), a decision arising under the Federal Arbitration Act that was reversed on appeal.

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collective bargaining agreement provides that the ‘arbitrator’s decision shall be final and binding

upon both Parties’” (Response, p. 3). Instead, the Union notes the existence of this provision – a

provision notably omitted from the text of EPE’s Complaint but attached in an exhibit – and that,

in light of this provision and the overall federal labor policy favoring the finality of awards, “the

Court’s review here is to be ‘very limited’” (Motion to Dismiss, pp. 5-6). This is a simple

restatement of the applicable standard of review and is patently not an argument that the presence

of this language per se precludes any judicial review (as res judicata or otherwise), regardless of

the circumstances involved in a case or the objectionable nature of an award.

The existence of this language in the CBA is nevertheless significant for other reasons. In

Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 594, 599 (1960), as in subsequent

cases, the U.S. Supreme Court noted the presence of such a provision in the CBA being

considered and further observed, in explaining the rationale behind the policy of finality and the

concomitant limited judicial review of labor arbitration awards, that “plenary review by a court of

the merits would make meaningless the provisions that the arbitrator’s decision is final, for in

reality it would almost never be final.” Stated differently, the presence of this standard language

in the parties’ agreement both underpins and comports with the overall federal policy favoring

the finality of awards in all but exceptional cases; extreme deference is critical to giving effect to

the parties’ bargained-for arbitration provision. As an examination of the instant Awards

themselves indicates, this case is no exception, and the Complaint should therefore be dismissed.

III. A PERUSAL OF THE AWARDS IN LIGHT OF THE PARTIES’ CBA AND GOVERNING CASE LAW DEMONSTRATES THAT THERE IS NO BASIS HERE FOR VACATING THE AWARDS.

The Company asserts in the Complaint that Arbitrator Sherman “exceeded his authority”

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in three respects.2 The fact that EPE makes such an assertion based on conclusory allegations

and unwarranted factual inferences does not make it so and does not preclude a dismissal at this

stage, particularly since the Court has the benefit of reviewing and considering the actual Awards

and pertinent CBA provisions that were attached to and incorporated into the Complaint.

When considered in view of the extremely deferential standard in this area and the

applicable CBA provisions, EPE’s legal theories find no support in the Award and are unavailing

for the reasons set forth in the Motion to Dismiss. Such being the case, there is no reason, rooted

in law or in principles of judicial economy, to allow this case to proceed. Discovery is generally

not permitted in such cases and, consequently, if the case were not dismissed at this stage, the

Court would simply face the same arguments at a later date. See JCI Communs., Inc. v. IBEW,

Local 103, 324 F.3d 42, 50 (1st Cir. 2003) (barring the parties from conducting further discovery

in order to ensure a review based on the record before the arbitrator and in light of the narrow

standard of review). Cf. Midwest Generation EME, LLC v. Continuum Chem. Corp., 2010 U.S.

Dist. LEXIS 61635, *6 (N.D. Ill. June 21, 2010) (“Post-arbitration discovery is rare, and courts

have been extremely reluctant to allow it. It is often a ‘tactic’ employed by disgruntled or

suspicious parties who, having lost the arbitration, are anxious for another go at it.”). Local 960

therefore respectfully requests that the Court grant its Motion to Dismiss the Complaint.

2 The Company states in its Response (without additional argument as to how this basis applies to the instant matter) that “the Fifth Circuit also recognizes arbitrariness and capriciousness as a valid ground for vacatur in cases arising from the terms of a bargaining agreement” (p. 5). In this connection, the Union first notes that EPE never argued that the Awards were arbitrary and capricious or mentioned such as a basis for vacating the Awards in its Complaint. Second, the case cited for this proposition refers to such basis in dicta and relies on several decisions which are highly questionable authorities in light of the Supreme Court’s recent pronouncement on the proper standard in Garvey, as set forth in the Motion to Dismiss (pp. 5-6).

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Respectfully submitted,

LUBIN & ENOCH, P.C.

By: /s/ Nicholas J. Enoch, Esq. NICHOLAS J. ENOCH Texas State Bar No. 24042618 [email protected] STANLEY LUBIN Texas State Bar No. 24049352 [email protected] 7362 Remcon Circle El Paso, Texas 79912-1623 (915) 585-8008 (Phone) (602) 626-3586 (Fax)

ATTORNEYS FOR DEFENDANT IBEW LOCAL 960

CERTIFICATE OF SERVICE

I hereby certify that on the 6th day of June, 2011, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following:

Dan C. Dargene, Esq. Dallan F. Flake, Esq.

Ogletree, Deakins, Nash, Smoak & Stewart, P.C. 700 Preston Commons

8117 Preston Road Dallas, Texas 75225

Attorneys for the Plaintiff

By: /s/ Nicholas J. Enoch, Esq.

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