Background. UPW brought two class-action grievances against the employer, the City and County of Honolulu, based on violations of the collective bargaining agreement. The grievances were denied by the City's human resources department. The parties agreed to arbitrate pursuant to the CBA and the circuit court consolidated the grievances and appointed Keith Hunter to arbitrate.
The City contested whether these grievances could be arbitrated at all. The arbitrator held a hearing on the issue and concluded that the grievances were subject to arbitration--in other words, that he had jurisdiction. The UPW filed in the circuit court a motion to confirm the decision and "award" by the arbitrator. The motion was granted and the City appealed.
The Arbitration Statute Confers Appellate Jurisdiction to "Awards." Appeals in arbitrations may be taken from "[a]n order confirming or denying confirmation of an award[.]" HRS § 658A-28(a)(3). According to the ICA, the issue here was whether the order granting UPW's motion to confirm was an "award" that vested appellate jurisdiction.
Only Final Awards can be "Awards" The word "award" is not defined by HRS chapter 658A, and the ICA found "no Hawai'i case construing the phrase." The ICA then turned to Black's Law Dictionary, which defined "award" as a "final judgment or decision, esp. one by an arbitrator." Black's Law Dictionary, 147 (8th ed. 2004). The ICA also looked to cases from other jurisdictions. In Connecticut, "[t] he principal characteristic of an arbitration award is its finality as to the matters submitted so that the rights and obligations of the parties may be definitely fixed." Coldwell Banker Manning Realty, Inc. v. Cushman & Wakefield of Connecticut, Inc., 293 Conn. 582, 980 A.2d 819, 825-26 (Conn. 2009). The ICA agreed with a Texas appeals court and held that appellate review is limited to "the final arbitration award and not merely any . . . intermediate decision labeled award." John O'Quinn v. Wood, 244 S.W.3d 549, 553 (Tex. Ct. App. 2007). The ICA underscored its importation of the Texas holding, with Hawai'i's strong public policy of encouraging arbitration. See Kona Village Realty, Inc. v. Sunstone Realty Partners, XIV, LLC, 123 Hawai'i 476, 489, 236 P.3d 456, 469 (2010). According to the ICA, prohibiting a party from appealing intermediate decisions promotes the arbitration process itself.
Without a Final Award, there is no Appellate Jurisdiction. Because this decision by the arbitrator did not resolve the merits of the grievances, it cannot be considered a final award. And because it cannot be a final award, the circuit court's order granting UPW's motion is not it is not "[a]n order confirming or denying confirmation of an award[.]" HRS § 658A-28(a)(3). Thus, there was no jurisdiction for the ICA to hear the appeal. "When we perceive a jurisdictional defect in appeal, we must, sua sponte, dismiss that appeal." Brooks v. Dana Nance & Co., 113 Hawai'i 406, 412, 153 P.3d 1091, 1097 (2007). The ICA did just that.
So is the City out of luck? Of course not. The City could always win on the merits. And if it does not, then the arbitrator makes his award, the UPW has the circuit court confirm the award, and then it can appeal and argue that the grievances were not subject to arbitration in the first place. It just might take a bit longer.
A Consistent Holding with the Final-Judgment rule (for now) The ICA's holding is consistent with the law of judgments. Generally, the appellate court can only review judgments entered by the courts that are "final." Jenkins v. Cades Schutte Fleming & Wright, 76 Hawai'i 115, 119, 869 P.2d 1334, 1338 (1994). It would make sense for the ICA to rule consistently with appeals from arbitration decisions and orders. But there are a number of exceptions to this final-judgment rule. See, e.g., Ciesla v. Reddish, 78 Hawai'i 18, 20, 889 P.2d 702, 704 (1995). Perhaps the appellate courts will have to some day revisit this holding to find exceptions for arbitration awards.
Rules Statutory Construction. In arriving to its holding, the ICA followed well-established rules of statutory construction. First, there was the word "award." It was not defined by the statute nor by existing Hawai'i case law. So it turned to the law dictionary and cases from other jurisdictions. This is a faithful application of one of our rules of statutory construction: "Ordinary meanings are attached to terms not given a statutory definition and one may resort to legal or other well accepted dictionaries as one way to determine the ordinary meanings of certain terms." State v. Cooley, 123 Hawai'i 293, 296, 233 P.3d 713, 716 (App. 2010). What is interesting, is that the ICA declined to cite this particular rule. It just, well, did it.