Tristar Pictures v. Directors Guild of America
160 F.3d 537 (1998)
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Rule of Law:
A court will uphold an arbitrator's award so long as it is plausibly derived from the collective bargaining agreement. A party that argues the merits of a dispute in arbitration proceedings, even while objecting to jurisdiction, may be deemed to have waived its right to later challenge the arbitrator's authority to decide the issue.
Facts:
- Director Michael Apted and Tristar Pictures were parties to a collective bargaining agreement (the 'Basic Agreement') negotiated by the Directors Guild of America (DGA).
- Tristar decided to shorten Apted's 118-minute film, 'Thunderheart,' by nearly half an hour to accommodate a two-hour television broadcast slot with commercials.
- Over Apted's objections, Tristar hired an editor who made 270 cuts, removing 22 minutes from the film, and further shortened the runtime through other electronic means.
- Apted, believing the edits compromised the film's artistic integrity, requested that his director's credit be replaced with a pseudonym.
- Tristar refused Apted's request for a pseudonym.
- The Basic Agreement contained a specific 'pseudonym clause' (section 8-211) for handling such requests through a joint DGA-studio panel.
- The Basic Agreement also contained a broad, general arbitration clause for resolving 'all grievances, disputes or controversies over the interpretation or application' of the agreement.
- When the joint panel did not convene in time before the scheduled broadcast, the DGA invoked the general arbitration clause to resolve the dispute.
Procedural Posture:
- The Directors Guild of America (DGA), on behalf of Michael Apted, initiated an expedited arbitration against Tristar Pictures.
- The arbitrator found Tristar breached the duty of good faith and fair dealing and issued a conditional award requiring Tristar to air a disclaimer if a pseudonym was not granted to Apted.
- Tristar Pictures filed a petition in state court to vacate the arbitrator's award.
- The DGA removed the action to the United States District Court.
- The district court confirmed the arbitrator's award, ruling in favor of the DGA.
- Tristar Pictures (appellant) appealed the district court's judgment to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
Does an arbitrator exceed their authority under a collective bargaining agreement by fashioning a conditional remedy for a dispute over film editing when the agreement also contains a specific, separate procedure for resolving such disputes?
Opinions:
Majority - Kozinski, Circuit Judge
No, the arbitrator did not exceed their authority. A court's review of an arbitrator's award is extremely narrow, and the award must be upheld if it is plausibly derived from the contract. First, by participating in the arbitration and arguing the merits of its good faith, Tristar evinced an intent to allow the arbitrator to decide the question of arbitrability and thus waived its right to later challenge the arbitrator's jurisdiction. A party cannot submit to arbitration, await an unfavorable outcome, and then challenge the arbitrator's authority. Second, the collective bargaining agreement granted the arbitrator broad authority to fashion remedies, including 'any other reasonable relief the Arbitrator deems appropriate.' The arbitrator's conditional award—requiring a disclaimer if a pseudonym was not granted—was a plausible remedy for Tristar's breach of the implied covenant of good faith and fair dealing. Therefore, the arbitrator's solution was rationally derived from a plausible interpretation of the agreement and must be affirmed.
Analysis:
This decision strongly reinforces the federal policy of extreme judicial deference to labor arbitration awards. It illustrates that courts will not vacate an arbitrator's decision for errors of law or fact, so long as the interpretation of the contract is 'plausible.' The case also serves as a cautionary tale about waiver, establishing that a party challenging an arbitrator's jurisdiction risks waiving that challenge if it proceeds to argue the merits of the case. This holding solidifies the power of arbitrators to craft creative and conditional remedies, even when a contract provides other specific dispute resolution mechanisms.
