Petition for Writ of Certiorari — John Krakowski, et al., Petitioners v. Allied Pilots Association, et al.
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Docket No. ________
IN THE
SUPREME COURT OF THE UNITED STATES
In re: AMR Corporation, Debtor.
JOHN KRAKOWSKI, et al.,
Petitioners,
v.
ALLIED PILOTS ASSOCIATION, et al.,
Respondents.
APPENDIX TO PETITION FOR
A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
Joe D. Jacobson, Counsel of Record
Allen P. Press
Jacobson Press P.C.
222 South Central Ave., Suite 550
Clayton, MO 63105
Tel: (314) 899-9790
Email: Jacobson@ArchCityLawyers.com
Attorneys for Petitioners
i
TABLE OF CONTENTS
Court of Appeals Decision (Feb. 1, 2021) . . . . APP-1
Dec. 2019 District Court Decision
(Krakowski II). . . . . . . . . . . . . . . . . . . . . . . . . . APP-4
Oct. 2019 District Court Decision
(Krakowski I) . . . . . . . . . . . . . . . . . . . . . . . . . APP-24
June 2018 Bankruptcy Court Decision
(Krakowski I) . . . . . . . . . . . . . . . . . . . . . . . . . APP-60
April 2017 Bankruptcy Court Decision
(Krakowski II). . . . . . . . . . . . . . . . . . . . . . . . APP-140
Sept. 22, 2015 Bankruptcy Court Decision
(Krakowski II). . . . . . . . . . . . . . . . . . . . . . . . APP-166
Sept. 3, 2015 Bankruptcy Court Decision
(Krakowski I) . . . . . . . . . . . . . . . . . . . . . . . . APP-190
June 2014 Bankruptcy Court Decision
(Krakowski I) . . . . . . . . . . . . . . . . . . . . . . . . APP-219
Denial of Rehearing and
Rehearing En Banc (March 24, 2021) . . . . . APP-236
45 U.S.C. § 152 . . . . . . . . . . . . . . . . . . . . . . APP-238
11 U.S.C. § 1113 . . . . . . . . . . . . . . . . . . . . . . APP-247
APP-1
COURT OF APPEALS DECISION
Krakowski v. Allied Pilots Association, 834 Fed.
Appx. 660, 2021 U.S. App. LEXIS 2644, 2021 WL
319443, Appeal Nos. 19-3506 (L), 19-4378 (CON) (2d
Cir. Feb. 1, 2021).
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
IN RE: AMR CORP.,
Debtor,
No. 19-3506(L)
No. 19-4378(CON)
JOHN KRAKOWSKI, et al.,
Plaintiffs-Appellants
D.C. No. 17-CV-03237
(KMW)
v.
ALLIED PILOTS ASSOC.,
AMERICAN AIRLINES, INC.
Defendants-Appellees.
D.C. No. 18-cv-06187
(LAK)
UNPUBLISHED
OPINION
Appeal from the United States District Court
for the Southern District of New York
District Judges Kimba Wood and Lewis A. Kaplan
February 1, 2021
Before Circuit Judges Amalya L. Kearse, Pierre N.
Leval, Raymond J. Lohier, Jr.
APP-2
SUMMARY ORDER
UPON DUE CONSIDERATION, IT IS HEREBY
ORDERED, ADJUDGED, AND DECREED that the
judgments of the District Court are AFFIRMED.
The Plaintiffs-Appellants are pilots formerly
employed by Trans World Airlines, Inc. (“TWA”) and
now employed by American Airlines, Inc. They appeal
from both an October 2, 2019 judgment of the District
Court (Kaplan, J.) and a December 18, 2019 judgment
of the District Court (Wood, J.). Each judgment affirmed orders entered by the United States Bankruptcy
Court for the Southern District of New York (Lane,
B.J.) granting summary judgment in favor of Allied
Pilots Association (“APA”) and American Airlines on
some claims and dismissing all other claims on a
motion to dismiss. The Plaintiffs-Appellants claimed
that APA, the union representing all American Airlines
pilots, including legacy TWA pilots, breached its duty
of fair representation, and that American Airlines
colluded in that breach. We assume the parties’ familiarity with the underlying facts and prior record of
proceedings, to which we refer only as necessary to
explain our decision.
We affirm the dismissals of the Plaintiffs-Appellants’ claims against APA and American Airlines for
substantially the reasons stated (a) by the Bankruptcy
Court in its opinions and orders entered June 3, 2014,
September 3, 2015, September 22, 2015, April 14, 2017,
and June 12, 2018, (b) by Judge Kaplan in his opinion
and order dated October 2, 2019, and (c) by Judge
Wood in her opinion and order dated December 17,
2019.
APP-3
We have considered the Plaintiffs-Appellants’
remaining arguments and conclude that they are without merit. For the foregoing reasons, the judgments of
the District Court are AFFIRMED.
APP-4
DEC. 2019 DISTRICT COURT DECISION
(Krakowski II)
Krakowski v. American Airlines, Inc., 610 B.R. 714,
2019 U.S. Dist. LEXIS 218479, 2019 WL 6879517, Case
No. 17-CV-03237 (S.D.N.Y. Dec. 17, 2019).
UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK
JOHN KRAKOWSKI, et al.,
Plaintiffs-Appellants
No. 17-CV-03237
(KMW)
v.
ALLIED PILOTS ASSOC.,
AMERICAN AIRLINES, INC.
Defendants-Appellees.
UNPUBLISHED
OPINION
Appeal from the United States Bankruptcy Court
for the Southern District of New York
Bankruptcy Judge Sean H. Lane
December 17, 2019
Before District Judge Kimba M. Wood
OPINION & ORDER
John Krakowski, Kevin Horner, and M. Alicia Sikes
(together, the “Appellants”) are pilots, currently
employed by American Airlines, Inc. (“American”) and
represented by the Allied Pilots Association (“APA”).
APP-5
They were employed by Trans World America (“TWA”)
until it merged with American. In the adversary bankruptcy proceeding below, they bring several claims
arising from American’s and APA’s treatment of former
TWA pilots during and after the American-TWA
merger.
In a pair of decisions, the Bankruptcy Court, Hon.
Scan H. Lane, dismissed all of Appellants’ claims, as
follows: (1) a breach of contract claim against American, for failure to state a claim; (2) a breach of duty of
fair representation claim against APA, as procedurally
barred, under the law of the case doctrine, by the
Bankruptcy Court’s prior dismissal of an identical
claim in a separate adversary proceeding between the
same parties; and (3) a claim that American colluded
in APA’s breach of the duty of fair representation,
because plaintiffs did not have a viable duty of fair
representation claim, and, in any event, failed to
adequately allege collusion.
Appellants now appeal from the Bankruptcy Court’s
orders dismissing their claims. For the following
reasons, the decisions of the Bankruptcy Court are
AFFIRMED.
BACKGROUND
I. Relevant Facts
Appellants are former TWA pilots who currently fly
for American. (Second Amended Complaint (“SAC”)
¶ 8.) In April 2001, American acquired TWA’s assets.
(Id. ¶ 16.) In November 2001, American and APA
executed a document called “Supplement CC”, which
merged the former TWA pilots into American’s pilot
APP-6
seniority list. (Id. ¶ 17.) Under Supplement CC, former
TWA pilots were integrated into American’s seniority
list with none or a fraction of the seniority they had
earned at TWA. (Id. ¶¶ 18-19.) To compensate the
former TWA pilots for their loss of seniority, Supplement CC established what the parties call a “protective
fence” in TWA’s former hub of St. Louis, Missouri. The
“fence” guaranteed a certain number of captain and
first officer positions for St. Louis-based former TWA
pilots, and thus permitted former TWA pilots to fly
St. Louis-based routes that would otherwise be unavailable due to their reduced seniority. (Id. ¶ 19-20.)
Supplement CC was a supplement to American’s
then-existing collective bargaining agreement with
APA (the “Old CBA”). When American and APA agreed
to Supplement CC, the former TWA pilots were not
represented by APA. They were represented by a different union. (Id. ¶ 27.) After the acquisition, however,
the former TWA pilots became part of the bargaining
unit of American pilots represented by APA. (Id. ¶ 29.)
Roughly a decade later, in November 2011, American filed for bankruptcy. (Id. ¶ 34.) As part of the
bankruptcy proceedings, the Bankruptcy Court granted
American’s request to abrogate the Old CBA. (Id. ¶ 36.)
The Old CBA and its supplements, including Supplement CC, became null and void as of September 5,
2012. (Id. ¶ 37.)
In the course of negotiating a replacement collective
bargaining agreement, American and APA signed a
APP-7
letter of agreement called “LOA 12-05”.1 It had two
main provisions. First, the seniority list established by
Supplement CC would remain in place, notwithstanding the termination of Supplement CC. (LOA 12-05 at
1, Appendix to Appellants’ Opening Brief (“App’x”) at
134). Second, the protective “fence,” which gave preferential flying rights to former TWA pilots on St. Louisbased routes, would not remain in place. (SAC ¶ 39.)
APA and American agreed to appoint an arbitrator to
decide how to compensate the former TWA pilots for
the loss of the “fence.” The parties agreed that the
arbitrator would not be permitted to revise the seniority list established by Supplement CC but could award
other types of compensation. (LOA 12-05 at 1.)
II. Procedural History
Appellants have brought many cases against American and APA, several of which are now adversary proceedings in American’s bankruptcy case. The parties
refer to these adversary proceedings, chronologically by
date of filing, as Krakowski I and Krakowski II. The
earlier case is Krakowski I. See Krakowski v. Am. Airlines, Inc. (In re AMR Corp.), Case No. 11-15463, Adv.
Proc. No. 13-01238 (Bankr. S.D.N.Y.) [hereinafter Krakowski I]. The instant matter is known as Krakowski
II. See Krakowski v. Am. Airlines, Inc. (In re AMR
1
Although Appellants did not include the New CBA in their
appendix on appeal, they appended it to the First Amended
Complaint. The Bankruptcy Court properly considered the New
CBA and its supplements, including LOA 12-05, in deciding APA’s
motion to dismiss. See In re AMR Corp., 538 B.R. 213, 217 (Bankr.
S.D.N.Y. 2015) (citing Cortec Indus. Inc. v. Sum Holding L.P., 949
F.2d 42, 47 (2d Cir. 1991)).
APP-8
Corp.), Case No. 11-15463, Adv. Proc. No. 14-01920
(Bankr. S.D.N.Y.) [hereinafter Krakowski II].2 A brief
description of the proceedings in Krakowski I and
Krakowski II follows.3
a. Proceedings in Krakowski I
Krakowski I was initially filed in the Eastern
District of Missouri in 2012. See Krakowski I, 927 F.
Supp. 2d 769, 771 (E.D. Mo. 2013). It was transferred
to the Bankruptcy Court for the Southern District of
New York on March 4, 2013. Id. at 776.
In Krakowski I, Appellants claimed APA breached
its duty of fair representation to former TWA pilots by
agreeing, in the New CBA, to compensate former TWA
pilots for the loss of the protective “fence” via an arbitration procedure that could not modify the unfair
seniority list established by Supplement CC. Appellants also claimed American colluded in this breach.
See Krakowski I, 199 L.R.R.M. (BNA) 3584, 2014
Bankr. LEXIS 2610, 2014 WL 2508729, at *4-6 (Bankr.
S.D.N.Y. June 3, 2014).
On June 3, 2014, the Bankruptcy Court dismissed
the complaint for failure to state a claim, reasoning
that APA’s agreement not to modify the seniority list
2
There is a third case, which the parties call Krakowski III,
but it is not relevant to the present appeal. See Krakowski v. Am.
Airlines (In re AMR Corp.), Case No. 11-15463, Adv. Proc. No.
16-01138 (Bankr. S.D.N.Y.).
3
For clarity, all filings in these cases, regardless of the court
in which they were filed, are cited as “Krakowski I” or “Krakowski
II.”
APP-9
when negotiating the New CBA did not breach APA’s
duty of fair representation. See id. On October 2, 2019,
the District Court, Hon. Lewis Kaplan, affirmed the
Bankruptcy Court’s dismissal of the complaint.4 See
Krakowski I, 610 B.R. 434, 2019 U.S. Dist. LEXIS
171319, 2019 WL 4857640, at *7 (S.D.N.Y. Oct. 2,
2019) (Kaplan, J.).
b. Proceedings in Krakowski II
The instant case, Krakowski II, was initially filed in
the Eastern District of Missouri on May 1, 2013. (App’x
at 9-19). Appellants filed their First Amended Complaint six days later, on May 7, 2013. (First Amended
Complaint (“FAC”), App’x at 20-31.). Thereafter, the
case was transferred to the Southern District of New
York on motion of the defendants, where it was referred to the Bankruptcy Court. (App’x at 8.)
The First Amended Complaint in Krakowski II
made three claims. In Count One, Appellants alleged
that American breached the New CBA by placing
former TWA pilots on American’s seniority list according to Supplement CC, rather than crediting them for
seniority they earned at TWA. (FAC ¶¶ 36-45.) In
Count Two, Appellants alleged that APA breached its
duty of fair representation by agreeing to continue to
use the seniority list established by Supplement CC,
which violated the New CBA; was unfair to former
TWA pilots; and treated former TWA pilots worse than
4
Judge Kaplan also affirmed several other decisions of the
Bankruptcy Court that are not directly relevant to the appeal now
before the Court. See Krakowski I, 2019 U.S. Dist. LEXIS 171319,
2019 WL 4857640, at *6-13.
APP-10
the pilots of other airlines acquired by American. (Id.
¶¶ 43-50.) In Count Three, Appellants alleged that
American colluded with APA in APA’s breach of the
duty of fair representation. (FAC ¶ 52-54.)
On September 22, 2015, the Bankruptcy Court
partially granted Appellees’ motions to dismiss the
First Amended Complaint. Krakowski II, 538 B.R. 213,
215 (Bankr. S.D.N.Y. 2015). The Bankruptcy Court
dismissed Count One, the breach of contract claim
against American, for failure to state a claim, reasoning that Appellants’ argument was incompatible with
the plain language of the New CBA. Id. at 218-22. The
Bankruptcy Court permitted Appellants to proceed
with Count Two, the duty of fair representation claim
against APA, but only to the extent the claim was
based on the alleged unfairness of the seniority list
established by Supplement CC, and only as it pertained to the narrow time period after the Old CBA was
abrogated but before the New CBA was executed.5 Id.
at 223-24. The Bankruptcy Court warned Appellants
that they would be duplicating their claims in Krakowski I if they argued that APA breached its duty of fair
representation by agreeing to continue Supplement
CC’s allegedly unfair seniority list in the New CBA. Id.
The Bankruptcy Court granted plaintiffs leave to
amend Count Two, the duty of fair representation
claim, and Count Three, the accompanying claim that
5
In a subsequent conference, the Bankruptcy Court confirmed that Count Two survived only in relation to this discrete time
period, when “the old CBA was abrogated … and before there was
a new CBA.” Krakowski II, 567 B.R. 247, 253 (Bankr. S.D.N.Y.
2017).
APP-11
American colluded in APA’s breach of its duty of fair
representation. Id. at 223-24.
On October 22, 2015, Appellants filed their Second
Amended Complaint. (App’x at 219-28). The Bankruptcy Court dismissed the Second Amended Complaint on
April 14, 2017. See Krakowski II, 567 B.R. 247, 250
(Bankr. S.D.N.Y. 2017). The Bankruptcy Court found
that Appellants’ amended duty of fair representation
claim pertained only to APA’s agreement to the New
CBA, rather than to the narrow time period between
the Old CBA and the New CBA. Id. at 254-58. The
claim, as pled, was essentially identical to the parallel
claim in Krakowski I, which the Bankruptcy Court had
already dismissed. Appellants’ duty of fair representation claim in Krakowski II was accordingly dismissed
under the law of the case doctrine. Id. at 258. Appellants’ accompanying claim that American colluded in
APA’s breach of its duty of fair representation was also
dismissed. Id. The court also noted that Appellants
failed to allege any acts by American that would be
legally sufficient to prove that it colluded with APA in
a breach of the duty of fair representation. Id. at
258-60.
Appellants appealed the Bankruptcy Court’s dismissals of the First Amended Complaint and Second
Amended Complaint to this Court on April 28, 2017.
(App’x at 414-16.)
LEGAL STANDARD
When hearing an appeal from an order of the Bankruptcy Court, this Court reviews the Bankruptcy
Court’s findings of law de novo and its findings of fact
APP-12
for clear error. See In re Bayshore Wire Prods. Corp.,
209 F.3d 100, 103 (2d Cir. 2000). The Bankruptcy
Court’s decisions regarding the management of its
docket are reviewed for abuse of discretion. See In re
Fletcher Intern. Ltd., 536 B.R. 551, 557 (S.D.N.Y. 2015)
(Sullivan, J.). This Court may affirm on any ground
supported by the record, not just the ones relied upon
by the Bankruptcy Court. See Freeman v. Journal
Register Co., 452 B.R. 367 369 (S.D.N.Y. 2010) (Koehl,
J.).
A complaint must be dismissed if it fails to state a
claim upon which relief can be granted. Fed. R. Civ. P.
12(b)(6); see also Fed. R. Bankr. P. 7012. “To survive a
motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.” Aschroft v. Iqbal,
556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). “A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. (citing Twombly, 550 U.S. at
556).6
Where a complaint alleges that a union has violated
its duty of fair representation, the District Court has a
6
Appellants’ assertion that this case is governed by the “no
set of facts” standard set forth in Conley v. Gibson, 355 U.S. 41, 78
S. Ct. 99, 2 L. Ed. 2d 80 (1957), is without merit. The Conley standard was overruled by Iqbal and Twombly and has no continuing
vitality. See Iqbal, 556 U.S. at 670.
APP-13
special duty to “construe complaints so as to avoid
dismissals and … give plaintiffs the opportunity to file
supplemental pleadings unless it appears beyond doubt
that a good cause of action cannot be stated.” Eatz v.
DAIS Unit of Local Union Number 3 of Intl. Bhd. of
Elec. Workers, 794 F.2d 29, 34 (2d Cir. 1986).
“In considering a motion to dismiss for failure to
state a claim, a district court must limit itself to the
facts stated in the complaint, documents attached to
the complaint as exhibits and documents incorporated
by reference in the complaint.” Hayden v. Cty. of
Nassau, 180 F.3d 42, 54 (2d Cir. 1999).
DISCUSSION
The Bankruptcy Court properly dismissed all of
Appellants’ claims because none states a claim upon
which relief could be granted. Appellants’ claims are
reviewed in the order in which they were initially pled.
I. The Bankruptcy Court Did Not Err in Dismissing Appellants’ Breach of Contract Claim
Against American.
In Count One of the First Amended Complaint,
Appellants claim American breached the New CBA by
placing former TWA pilots on the seniority list established by Supplement CC. According to Appellants, in
order to comply with the New CBA, American should
have placed the former TWA pilots on its seniority list
according to the time they started working at TWA.
(FAC ¶¶ 36-39.) The Bankruptcy Court dismissed this
claim, holding that it “is inconsistent with the plain
language of the New CBA.” Krakowski II, 538 B.R. at
218. Appellants now argue the Bankruptcy Court
APP-14
erroneously failed to consider American’s general practices when interpreting the New CBA. (Appellants’
Opening Brief (“Op. Br.”) at 22-24, ECU’ No. 6.) Their
position is unpersuasive.
“When courts interpret CBAs, traditional rules of
contract interpretation apply as long as they are
consistent with federal labor policies. When provisions
in the agreement are unambiguous, they must be given
effect as written. Only when provisions are ambiguous
may courts look to extrinsic factors—such as bargaining history, past practices, and other provisions in the
CBA—to interpret the language in question.” Aeronautical Indus. Lodge 91 of Int’l Ass’n of Machinists and
Aerospace Workers v. United Techs. Corp., 230 F.3d
569, 576 (2d Cir. 2000) (citations omitted).
Appellants argue the New CBA required American
to place the former TWA pilots on its seniority list
according to their “Occupational Date,” a date that
Appellants claim is tied to the time the former TWA
pilots started working at TWA. Appellants allege that
Section 2(AA) of the New CBA requires a pilot’s placement on American’s seniority date be determined by
his or her “Occupational Date.” (FAC ¶ 23.) They allege
that, under American’s “general practice,” a pilot’s
“Occupational Date” is simply his or her date of hire,
plus a period of about seven weeks. (Id. ¶ 22). They
further claim “American has consistently acknowledged each former TWA pilot’s ‘Date of Hire’ as the date
they were hired by TWA.” (Id. ¶ 20.) Thus, Appellants
conclude that that American breached the New CBA
when it failed to base the former TWA pilots’ seniority
on the dates they started working at TWA, and instead
APP-15
placed them on its seniority list according to Supplement CC. (Id. ¶ 25.)
As the Bankruptcy Court correctly determined,
however, this was the very outcome that the New CBA
required. Section 13 of the New CBA sets out the New
CBA’s general seniority rules, but also provides that
“certain other rules in this Agreement stipulating
specific methods and procedures of applying system
seniority shall govern such application of system
seniority.” (Appendix to APA’s Brief (“APA App’x”) at
4.) Thus, the parties agreed that, whatever the New
CBA’s general seniority rules were, they would be
trumped by any other, more specific seniority provisions in the New CBA. One such rule was outlined in
LOA 12-05, which was incorporated into the New CBA.
(Appendix to American’s Brief (“American App’x”) at
SA000008, 10.) LOA 12-05 provides that the “TWA
Pilots’ existing seniority placements on the Pilots’
System Seniority List are final and shall continue
pursuant to Section 13 of the CBA, notwithstanding
the termination of Supplement CC and any preferential flying rights associated with those seniority placements.” (LOA 12-05 at 1.) In other words, the parties
agreed that LOA 12-05, rather than the general seniority provisions of the CBA, would govern seniority for
former TWA pilots.
Thus, rather than breaching the New CBA, American followed the New CBA’s express provisions when
it continued to use the seniority list placements established by Supplement CC, rather than ranking the
former TWA pilots according to their Occupational
Dates or Dates of Hire. Even though the Bankruptcy
APP-16
Court made this precise point when dismissing Count
One of the First Amended Complaint, Appellants’
Opening Brief makes no mention whatsoever of LOA
12-05. Thus, Appellants fail to identify any error in the
Bankruptcy court’s dismissal of their breach of contract
claim.
Even if LOA 12-05 did not trump the general
seniority provisions of the New CAA, Appellants’
claims, based on those general provisions, would still
fail. According to Appellants, American has “consistently acknowledged” that former TWA pilots’ “Date of
Hire” is the date the pilot was hired by TWA, and
American’s “general practice” was that a pilot’s Occupational Date is a date some 45 to 49 days after the
Date of Hire. (FAC §§ 20, 22.) The New CBA, however,
states that a pilot’s Occupational Date is “the date a
pilot is first scheduled to complete initial new hire
training with the Company.” (APA App’x at 3.) The
New CBA defines “Company” as “American Airlines,
Inc.” (Id. at 2.) Moreover, the New CBA defines “date
of hire” as “[t]he first day as an AA pilot.” (American
App’x at SA000027.)
These provisions unambiguously tie seniority to a
pilot’s start at American, not at any other airline. The
Court cannot look to extrinsic evidence, such as American’s past or general practices, to interpret their meaning. See Aeronautical Indus. Dist. Lodge 91, 230 F.3d
at 576. Thus, even if LOA 12-05 did not govern the
seniority of former TWA pilots (which it does), American would not have breached the New CAA by failing
to place pilots on its seniority list according to their
start dates at TWA.
APP-17
Appellants argue that the New CBA’s seniority
rules are ambiguous as applied to them, such that
extrinsic evidence may be used to discern their meaning. First, they argue the New CBA’s general seniority
rules must have been ambiguous because American did
not follow them; that is, former TWA pilots were not
placed on the seniority list according to their start date
at American. (Op. Br. at 24.) But the manner in which
American implemented the New CBA is simply more
extrinsic evidence, rather than evidence of ambiguity
in the language of the New CAA. Even if this extrinsic
evidence could be considered, it would not be persuasive. American’s reason for failing to follow the general
seniority rules of thy New CBA was not that those
rules were ambiguous; rather, it was simply that, per
LOA 12-05, American agreed not to apply those rules
to former TWA pilots.
Appellants also argue that the CBA’s requirement
that Occupational Date is tied to a pilot’s “new hire
training” is ambiguous as applied to former TWA pilots
because, as experienced pilots, they never underwent
“new hire training.” (Appellants’ Reply Brief at 16,
ECF No. 16). But this fact was not pled, and Appellants do not contest the Bankruptcy Court’s refusal to
take judicial notice of it. Nor was the Bankruptcy
Court’s decision in this regard erroneous, since Appellants failed to explain why the type of training former
TWA pilots received at American is a “fact … not
subject to reasonable dispute,” and thus suitable for
judicial notice. Fed. R. Evid, 201(b); 201(c)(2) (court
must grant party’s request for judicial notice if it is
“supplied with the necessary information”).
APP-18
Accordingly, even if the New CBA’s general seniority provisions are applicable to former TWA pilots—
and they are not—Appellants fail to state a claim for
breach of contract by arguing that American failed to
place them on its seniority list in accordance with an
Occupational Date based on their first day at TWA.7
7
American argues that, even if Appellants state a claim for
breach of contract, they may not pursue it in federal court because
they have not exhausted their contractual and administrative
remedies. (American’s Brief at 23-26, ECF No. 12.) Like the
Bankruptcy Court, this Court declines to reach the issue. See
Krakowski II, 538 B.R. at 221 n.10. Under the Railway Labor Act
(“RLA”), “minor disputes,” such as those involving the interpretation of collective bargaining agreements, must be arbitrated before
the boards of adjustment. See 45 U.S.C. §§ 153, 184. This remedy
must be exhausted before an employee can pursue a breach of
contract claim based on a collective bargaining agreement in
federal court. See Drywall Tapers and Pointers of Greater N.Y.,
Local 1974 v. Local 530 of Operative Plasterers and Cement
Masons Int’l Ass’n, 954 F.2d 69, 77 (2d Cir. 1992). An employee
need not pursue these remedies, however, if doing so “would be
wholly futile.” Id. (citing Glover v. St. Louis-San Francisco Ry. Co.,
393 U.S. 324, 330, 89 S. Ct. 548, 21 L. Ed. 2d 519 (1969). Here,
Appellants concede their breach of contract claim is a “minor
dispute.” (FAC ¶ 45.) They claim they need not pursue arbitration,
however, since most of the members of the arbitration panel would
be chosen by American or APA, rendering the process “futile.” (Id.)
Because Appellants fail to state a claim for breach of contract, the
Court need not address whether Appellants should be excused
from pursuing administrative remedies. See Peltzman v. Cent.
Gulf Lines, Inc., 497 F.2d 332, 335 n.5 (2d Cir. 1974) (district court
should address whether plaintiff employee should be excused from
exhausting RLA’s administrative remedies only if it first determines that plaintiff’s breach of contract claim is viable).
APP-19
II. The Bankruptcy Court Did Not Err in Dismissing Appellants’ Breach of Duty of Fair
Representation Claim.
In the Second Amended Complaint, Plaintiffs allege
that APA breached its duty of fair representation to the
former TWA pilots, and that American was complicit in
that breach. (SAC ¶¶ 42,44.) The Bankruptcy Court’s
dismissal of these claims was sound.
a. Appellants Fail to State a Claim that APA
Breached its Duty of Fair Representation.
Appellants claim APA violated its duty of fair representation to the former TWA pilots by agreeing, in the
New CBA, to continue to use the seniority list established by Supplement CC but without the protective
“fence” in St. Louis. (Op. Br. 16-19.) This claim is barred by both the rule against duplicative litigation and
the law of the case doctrine.
As the Bankruptcy Court explained in its September 22, 2015 Order, Appellants’ duty of fair representation claims survived dismissal only to the extent they
addressed a narrow subject: whether APA breached its
duty of fair representation by continuing to use the
allegedly unfair seniority list established by Supplement CC in the time period between the abrogation of
the Old CBA and the implementation of the New CBA.
See Krakowski II, 538 B.R. at 223-24. To the extent the
claim addressed APA’s agreement to the New CBA, it
would be duplicative of Krakowski I. See id. Despite
this guidance, Plaintiffs’ Second Amended Complaint
includes no allegations whatsoever that APA breached
its duty of fair representation in the time period
APP-20
between the two CBAs. Instead, the Second Amended
Complaint merely repeats earlier allegations that APA
breached its duty by agreeing to the terms of the New
CBA. (SAC ¶ 42.)
This claim, as pled, is barred by the rule against
duplicative litigation, which permits a federal court to
“stay or dismiss a suit that is duplicative of another
federal court suit.” Sacerdote v. Cammack Larhette
Advisors, LLC, 939 F.3d 498, 505 (2d Cir. 2019) (citing
Curtis v. Citibank, N.A., 226 F.3d 133.138 (2d Cir.
2000)). This is because “plaintiffs may not file duplicative complaints in order to expand their legal rights.”
Curtis, 226 F.3d at 140.8 The rule applies where a suit
features the same parties or interests, rights asserted,
relief prayed for, factual basis, and “essential” legal
basis, as a suit already pending in federal court. Sacerdote, 939 F.3d at 506 (citing The Haytian Republic, 154
U.S. 118, 124, 14 S. Ct. 992, 38 L. Ed. 930 (1894)). Such
is the case here. In Krakowski I, Appellants “allege[d]
that the APA breached its duty of fair representation
by agreeing to terminate Supplement CC and to limit
any potential relief from altering the seniority of legacy
TWA pilots.” Krakowski I, 2019 U.S. Dist. LEXIS
171319, 2014 WL 2508729, at * 4. This is essentially
the same claim Appellants make in the instant matter:
in both suits, Appellants allege the APA breached its
duty of fair representation by agreeing to use the
seniority list established by Supplement CC, without
8
Sacerdote and Curtis refer to the authority of a federal
District Court to manage lawsuits that are duplicative of suits
already pending in other District Courts. The Court is of the
opinion that Bankruptcy Courts have the same authority.
APP-21
the possibility of revising it, and without the benefit of
the “fence.” Thus, Appellants have duplicated their
claims in Krakowski I. The Bankruptcy Court did not
err in ordering Appellants to narrow their claims to
avoid duplication, or by dismissing their claims when
they failed to follow its clear guidance.
In addition to being barred by the rule against
duplicative litigation, Appellants’ claims alternatively
fail under the law of the case doctrine. This is because
the Krakowski I court considered and dismissed the
claim that Appellants duplicate in the instant proceedings. The law of the case doctrine provides that “[w]hen
a court decides upon a rule of law, that decision should
continue to govern the same issues in subsequent
stages in the same case.” Arizona v. California, 460
U.S. 605, 618, 103 S. Ct. 1382, 75 L. Ed. 2d 318 (1983).
In Krakowski I, the Bankruptcy Court dismissed
Appellants’ duty of fair representation claim against
APA, reasoning that APA had no obligation to prioritize the former TWA pilots over other American pilots
in the “zero sum game” of seniority when it negotiated
the New CBA. See Krakowski I, 2019 U.S. Dist. LEXIS
171319, 2014 WI. 2508729, at * 4; see also Krakowski
I, 536 13.R. at 371-72 (confirming dismissal of Appellants’ duty of fair representation claim). Although
Krakowski I is, of course, a different adversary proceeding than the one now before the court, “[c]ourt
have held that the law-of-the-case doctrine applies to
different adversary proceedings filed within the same
main bankruptcy case.” In re Motors Liquidation Co.,
590 B.R. 39, 62 (S.D.N.Y. 2018) (Furman, J.) (quotation
marks omitted); see also In re PCH Assocs., 949 F.2d
585, 592 (2d Cir. 1991) (noting that law of the case
APP-22
doctrine “has application to different lawsuits between
the same parties”). Thus, the Bankruptcy Court’s earlier ruling on APA’s duty of fair representation to the
former TWA pilots during the negotiation of the New
CBA is the law of the case, and it governs the instant,
nearly-identical claims.
b. Appellants Fail to State a Claim that American Colluded in APA’s Breach of its Duty of Fair
Representation.
Because Appellants fail to state a claim that APA
breached its duty of fair representation, they necessarily fail to state a claim that American colluded in
any such breach. See Flight Attendants in Reunion v.
Am. Airlines, Inc., 813 F.3d 468, 475 (2d Cir. 2016).9
9
The Bankruptcy Court concluded that, even assuming APA
breached its duty of fair representation, Appellants’ claims would
still fail because Appellants failed to plead facts that would prove
American’s collusion in the breach. The Court declines to reach
this alternative ground for dismissal. It is well-established that a
plaintiff employee is excused from exhausting the Railway Labor
Act’s administrative remedies in pursuing a breach of contract
claim against his employer if he also claims the union breached its
duty of fair representation against him. See, e.g., O’Mara v. Erie
Lackmvanna R.R. Co., 407 F.2d 674, 679 (2d Cir. 1969). Whether
this combination of claims can render the employer liable for the
union’s breach of duty is less clear. The Second Circuit has suggested that “collusion” between a union and an employer in a union’s
breach of the duty of fair representation may give rise to liability
on the employer’s part for that breach, but it has never identified
what conduct would amount to “collusion,” or held an employer
liable on this basis. See Flight Attendants in Reunion, 813 F.3d at
475 (citing United Indep. Flight Officers, Inc. v. United Air Lines,
Inc., 756 F.2d 1274, 1283 (7th Cir. 1985)); but see Beckington v.
Am. Airlines, Inc., 926 F.3d 595, 603-610 (9th Cir. 2019) (holding
APP-23
CONCLUSION
The Bankruptcy Court’s partial dismissal of the
First Amended Complaint and dismissal of the Second
Amended Complaint are AFFIRMED.
that “collusion” cannot be the basis for an employer’s liability in
the union’s breach of its duty of fair representation). In the
absence of a viable duty of fair representation claim against APA,
the Court declines to broach the subject.
APP-24
OCT. 2019 DISTRICT COURT DECISION
(Krakowski I)
Krakowski v. American Airlines, Inc., 610 B.R. 434,
2019 U.S. Dist. LEXIS 171319, Case No. 18-cv-06187
(S.D.N.Y. Oct. 2, 2019).
UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK
In re: AMR CORP.
No. 18-CV-06187
(LAK)
JOHN KRAKOWSKI, et al.,
Plaintiffs-Appellants
v.
ALLIED PILOTS ASSOC.,
AMERICAN AIRLINES, INC.
Defendants-Appellees.
UNPUBLISHED
OPINION
Appeal from the United States Bankruptcy Court
for the Southern District of New York
Bankruptcy Judge Sean H. Lane
October 2, 2019
Before District Judge Lewis A. Kaplan
MEMORANDUM OPINION
This high-flying bankruptcy appeal arises from a
dispute between three airline pilots (the “TWA pilots”),
APP-25
their labor union Allied Pilots Association (“APA”), and
their current employer American Airlines (“AA”). The
TWA pilots, who worked for Trans World Airlines, Inc.
(“TWA”) until it merged with AA, allege on behalf of a
putative class of similarly situated individuals that
APA breached its duty of fair representation throughout an arbitration process involving AA and that AA
colluded in this conduct. The United States Bankruptcy Court for the Southern District of New York (Lane,
J.) dismissed some of these claims under Rule 12(b)(6)
at the pleading stage and decided the remainder in the
defendants’ favor on summary judgment. I affirm.
Facts1
A. The TWA-AA Merger
The airline industry hit a rough patch in the early
2000s. High oil prices, an economic crisis, and changes
wrought by the terrorist attacks of 9/11 caused many
major airlines to cut back their operations or fold into
bankruptcy.2 Among the struggling carriers was TWA,
an airline with a St. Louis hub that sold many of its
1
[I] take the following facts primarily from the statements
of material facts. The TWA pilots neglected to include their
responses to AA’s statement of material facts on the record, while
AA filed that statement—but not the TWA pilots’ responses—
alongside its brief. I therefore reviewed the response statement
from the bankruptcy court’s docket. See Bkr. Ct. Docket, DI-122
(hereinafter “AA SMF”).
2
See ELM Ben-Yosef, The Evolution of the US Airline
Industry: Technology, Entry, and Market Structure—Three
Revolutions, 72 J. AIR L. & COMM. 305, 314-15 & n.64 (2007).
APP-26
assets to AA in 2001.3 At the time of the sale, TWA
employed roughly 1,300 pilots, 650 of whom were based
in St. Louis.4
APA is a union authorized to collectively bargain on
behalf of AA pilots, a group that includes, following the
sale, former TWA pilots.5 At the time of the TWA sale,
APA and AA added to their existing CBA an agreement
called “Supplement CC,” which governed the integration of the TWA pilots into AA’s workforce.6 Supplement CC specified that, for the purpose of AA’s “seniority list,” a ranking of pilots by years of experience that
has significant implications for pay and scheduling
preferences,7 the pilots would not receive credit for the
full number of years they served at TWA.8 The pilots
would, however, receive the benefit of a “protective
fence” around the St. Louis base.9 The metaphorical
3
AA SMF ¶¶ 1-2.
4
Modified Supplemental Class Action Complaint for
Damages and Declaratory Relief (“MSC”) ¶¶ 9,11 [DI 48].
5
Id. ¶ 5.
6
AA SMF ¶ 2.
7
As one website explains, “[t]he three most important
things in the airline piloting profession are seniority, seniority[,]
and seniority.” Joel Freeman, How Becoming an Airline Pilot
Works, HOWSTUFFWORKS, https://science.howstuffworks.com/
transport/flight/modern/pilot6.htm.
8
AA SMF ¶ 2.
9
Id.
APP-27
fence guaranteed former TWA pilots at that base a
certain number of captain positions and preferential
bidding rights.10
B. AA’s Bankruptcy and Subsequent CBA Negotiations
AA and its corporate parent, AMR, filed for bankruptcy in the SDNY in 2011.11 In February 2012, AA
began the process of abrogating the CBA with its
pilots, including Supplement CC, under 11 U.S.C.
§ 1113.12 It served APA with a term sheet indicating
that it would eliminate Supplement CC and close the
St. Louis base that year.13 The proposal stated that the
TWA pilots would retain their current places on the
seniority list and that AA would consider “[p]ossible
protections for TWA pilots” to replace those provided
by Supplement CC.14
APA’s board of directors at this time included two
locally selected members from each of several pilot
bases.15 In St. Louis—where around 93 percent of AA
10
Id.
11
Id. 13.
12
Plaintiffs’ Response to APA’s Statement of Material Facts,
and Their Statement of Additional Material Facts (“APA SMF”)
¶ 4 [TWA Pilot App. 143].
13
Id.
14
Id.
15
Id. ¶¶ 19-10.
APP-28
pilots formerly were of TWA—the representatives were
Keith Bounds and Doug Gabel, both TWA pilots.16
Gabel had been a union representative for over a
decade,17 and Bounds was an experienced representative as well.18
Upon receiving the term sheet from AA, APA’s
board approved a motion proposing three neutral arbitrators to decide how to protect the TWA pilots if Supplement CC were eliminated.19 The motion proposed
also that the arbitrators would be unable to make any
changes to the AA seniority list.20 APA informed its
members of this motion the day the board approved
it.21
In September 2012, the bankruptcy court granted
AA leave to abrogate the CBA, including Supplement
CC.22 Three months later, AA and APA, with significant and frequent input from Gabel and Bounds, nego-
16
Id. ¶¶ 11-12.
17
Id. ¶ 13.
18
Id. ¶ 16. At some point in 2012, Marcus Spiegel, also a
TWA pilot, replaced the term-limited Gabel. Id ¶ 17.
19
Id. ¶ 5.
20
Id. ¶ 6.
21
Id.
22
AA SMF ¶ 2.
APP-29
tiated a new CBA.23 A side letter agreement, LOA
12-05, provided that AA would have the exclusive right
to close the St. Louis base and that “a dispute resolution procedure is necessary to determine what alternative contractual rights should be provided to TWA
pilots as [a] result of the loss of flying opportunities
due to the termination of Supplement CC and the
closing of the [St. Louis] base.”24 The dispute resolution
procedure would be “final and binding interest arbitration” before a panel of three neutral arbitrators led by
Richard Bloch.25 AA and APA agreed that Bloch was a
prominent arbitrator and familiar to industry practitioners.26 LOA 12-05 provided additionally that “[t]he
arbitrators shall decide what non-economic conditions
should be provided to TWA pilots,” while specifying
that “[i]n no event shall the arbitrators have authority
to modify [AA’s seniority list] … or impose material
costs beyond training costs on [AA].”27
Gabel and Bounds approved of all the language in
LOA 12-05 except, the TWA pilots assert, the limitation on changes to the seniority list.28 They did not
23
Id. ¶¶ 4-5; APA SMF ¶¶ 18-19.
24
AA SMP ¶ 5.
25
Id. ¶ 16.
26
Id.
27
Id. ¶ 7.
28
APA SMF ¶ 20.
APP-30
object to the selection of Bloch,29 and at least Gabel
heard feedback from other TWA pilots before determining Bloch would be “a good choice.”30 APA’s membership ratified the new CBA, and the bankruptcy court
approved the CBA and LOA 12-05.31 81 percent of the
St. Louis pilots voted in favor of the CBA.32
C. The LOA 12-05 Arbitration
In January 2013, AA and APA reached a protocol
agreement for the upcoming LOA 12-05 arbitration.33
It specified that Stephen Goldberg and Ira Jaffe—both
nationally recognized arbitrators recommended to APA
by Gabel—would round out the arbitration panel.34
Gabel recommended Goldberg because he had previously ruled in favor of APA in a $23 million arbitration
against AA.35 No TWA pilot complained to Gabel about
Goldberg or Jaffe.36
29
Id. ¶ 42.
30
Id. ¶ 41.
31
Id. ¶¶ 8, 10, 60.
32
Id. ¶ 9. AA and APA agreed at the time, and agree now,
that a “yes” vote would not preclude the sort of duty of fair representation claims underlying this litigation. Id.
33
AA SMF ¶ 1.
34
Id. ¶ 12; APA SMF ¶ 51.
35
APA SMF ¶ 52.
36
Id. ¶ 53.
APP-31
The protocol agreement provided that the TWA
pilots and all other AA pilots would be represented by
separate committees with their own counsel.37 There is
no dispute that AA played no role whatsoever in selecting the committees or their counsel.38 Gabel chaired
the TWA pilots committee and selected its members—
all TWA pilots—and the committee chose as its legal
counsel John O’B. Clarke, who had argued three cases
involving the same labor statutes before the Supreme
Court, and represented the TWA pilots several other
times both before and after the arbitration.39 The AA
pilots committee included AA pilots not formerly of
TWA.40 It selected Wesley Kennedy as counsel.41 The
parties dispute whether APA influenced the selection
of counsel for both committees,42 and the TWA pilots
committee asserted at the time that Kennedy was
conflicted because he was advocating on behalf of all
AA pilots in a separate arbitration involving AA’s
merger with U.S. Airways.43 APA hired an attorney
specializing in ethics to address this concern, and the
37
AA SMF ¶ 14.
38
Id. ¶¶ 17, 20.
39
Id. ¶¶ 16, 19; APA SMF ¶¶ 25, 61-66.
40
AA SMF ¶¶ 15, 19.
41
Id.
42
APA SMF ¶ 60.
43
Id. ¶ 72.
APP-32
attorney concluded there was no conflict.44 Despite the
committee structure, APA informed the TWA pilots
well in advance that they had the right to participate
individually in the arbitration.45 Hundreds did by
attending the hearings, accessing the arbitration
materials, and making written submissions or oral
presentations.46
The arbitration began on April 2, 2013. The TWA
pilots committee submitted briefing, presented and
cross-examined witnesses, and introduced evidence
throughout.47 It argued that LOA 12-05 required the
panel to “replicate” Supplement CC’s protections.48 The
panel disagreed, reading LOA 12-05 to require “alternative” or “substitute” protections and finding that
replicating Supplement CC would be impossible
because the St. Louis base was closing.49 The TWA
pilots sought also to reassert their TWA hire dates for
the purpose of AA’s seniority list.50 Objecting, AA
pointed to LOA 12-05’s stipulation that the panel could
44
Id. ¶¶ 75, 78. AA was unaware of the allegations involving
Kennedy. AA SMF ¶ 21.
45
APA SMF ¶ 79.
46
Id. ¶¶ 87-88; AA SMF ¶ 25.
47
AA SMF ¶¶ 23-24.
48
APA SMF ¶¶ 104-07.
49
Id. ¶ 109.
50
Id. ¶ 118.
APP-33
“[i]n no event” modify the seniority list.51 The panel
agreed with AA.52 As an alternative to these proposals,
and in opposing the replication standard, the AA pilots
committee suggested that TWA pilots receive “pay
protection”—effectively, a guarantee that 340 TWA
pilots earn a captain’s salary.53 AA objected to this
proposal as exceeding the panel’s jurisdiction to “decide
what non-economic conditions” should be awarded.54
The panel agreed with AA.55
Additionally, the TWA pilots made two “procedural”
proposals for future arbitrations: that the panel
establish a “multi-party adjustment board” to resolve
disputes arising from their proposed “Revised Supplement CC,” and that TWA pilots be granted “separate
party status” in any future seniority-list negotiation.56
APA submitted a three-page brief objecting to both
proposals as outside the arbitrators’ jurisdiction based
on LOA 12-05.57 The panel disagreed with APA’s juris-
51
Id. ¶ 120.
52
Id. ¶ 122.
53
Id. ¶ 112.
54
Id. ¶ 113 (emphasis added).
55
Id. ¶ 116.
56
Id. ¶¶ 124-27.
57
Id. ¶ 124.
APP-34
dictional argument but nonetheless declined to adopt
the proposals on their merits.58
Based on the foregoing, the panel issued a unanimous merits award, the contents of which are not
detailed in the stipulations and are not relevant here.59
AA and APA, working with the TWA and AA pilots
committees, drafted contractual language to implement
the award.60
D. Procedural History
Dissatisfied with the arbitration process, the TWA
pilots filed a complaint against APA and AA in the
Eastern District of Missouri in 2012.61 The case was
transferred to this district’s bankruptcy court in 2013.62
That court dismissed the complaint with prejudice in
2014 while allowing the TWA pilots to amend certain
claims in their then-pending Modified Supplemental
Class Action Complaint for Damages and Declaratory
Relief (“MSC”).63 The primary allegation in the MSC is
that APA breached its duty of fair representation of the
58
Id. ¶ 130.
59
Id. ¶¶ 131-32.
60
Id. ¶¶ 133-34.
61
Docket No. 13-01283 (Bankr. S.D.N.Y. 2013) at 4 [TWA
Pilot App. 4].
62
Id.
63
Order at 1-2 [TWA Pilot App. 37-38].
APP-35
TWA pilots and AA colluded with APA in its alleged
breaches.
In 2015, the bankruptcy court dismissed the MSC
in part. Drawing from the MSC’s own organization, the
court explained that the single breach count relied on
ten alleged breaches.64 Treating these as effectively
separate claims, the court dismissed the claims that
APA:
1. Failed to bargain on behalf of the TWA pilots
over the abrogation of Supplement CC;
2. Agreed with AA to abrogate Supplement CC
without securing equivalent job protections;
3. Falsely represented to the bankruptcy court
that the LOA 12-05 arbitration’s purpose was to
“replicate” Supplement CC’s protections;
4. Precluded the panel from addressing the
seniority list and failed to require that the panel
“replicate” Supplement CC’s protections.65
However, the court allowed the TWA pilots to
proceed with their theories that APA:
5. Selected the arbitrators without input from
the TWA pilots;
6. Selected the arbitration participants without
such input;
64
Memorandum of Decision (“Dismissal Op.”) at 14 [TWA
Pilot App. 69] (citing MSC ¶ 48 [TWA Pilot App. 33]).
65
Id. [TWA Pilot App. 69]; MSC ¶ 48 [TWA Pilot App. 33].
APP-36
7. Selected the lawyers without such input;
8. Hired Kennedy to represent the AA pilots
despite his alleged conflicts;
9. Pursued through the AA pilots committee a
position adverse to the TWA pilots;
10. Objected to the TWA pilots committee’s
procedural proposals.66
Following discovery, the bankruptcy court found on
summary judgment for the defendants on all six
remaining claims.67 The TWA pilots timely appealed.
Discussion
“District courts … review the legal conclusions of
the Bankruptcy Court de novo, and its findings of fact
under the clearly erroneous standard.”68 I assume familiarity with the standards governing motions to dismiss
under Rule 12(b)(6) and motions for summary judgment under Rule 56.69
66
Dismissal Op. at 14 [TWA Pilot App. 69]; MSCI ¶ 48 [TWA
Pilot App. 33-34].
67
Memorandum of Decision (“Summary Judgment Op.”) at
2-3 [TWA Pilot App. 81-82].
68
See, e.g., In re Motors Liquidation Co., 428 B.R. 43, 51
(S.D.N.Y. 2010) (citing AppliedTheory Corp. v. Halifax Fund, L.P.
(In re AppliedTheory Corp.), 493 F.3d 82, 85 (2d Cir. 2007)).
69
The TWA pilots argue for a more forgiving pleading standard than Iqbal and Twombly’s plausibility test. They note that
the Supreme Court stated in Czosek v. O’Mara, a 1970 decision
predating these more recent cases, that “where the courts are
APP-37
The Supreme Court has been somewhat unclear
about the precise source of a union’s duty of fair representation.70 But there is no doubt the duty exists. For
our purposes, it is simple. To state a claim for a breach
of the duty of fair representation, plaintiffs must allege
(1) that the union’s “conduct toward a member of the
bargaining unit is arbitrary, discriminatory, or in bad
faith,” and (2) “a causal connection between the union’s
wrongful conduct and their injuries.”71 “A union’s
actions are ‘arbitrary only if, in light of the factual and
legal landscape at the time of the union’s actions, the
union’s behavior is so far outside a wide range of
reasonableness as to be irrational.”72 Mere “tactical
errors” and “even negligence” do not suffice for arbi-
called upon to fulfill their role as the primary guardians of the
duty of fair representation, complaint should be construed to avoid
dismissals.” 397 U.S. 25, 27, 90 S. Ct. 770, 25 L. Ed. 2d 21 (1970).
Nothing about this language is at odds with the plausibility test
or purports to create a different standard.
70
See Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65, 76,
111 S. Ct. 1127, 113 L. Ed. 2d 51 (1991) (describing the doctrine as
a “duty grounded in federal statutes, [for which] federal law therefore governs”).
71
White v. White Rose Food, a Div. of DiGiorgio Corp., 237
F.3d 174, 179 (2d Cir. 2001) (first quoting Marquez v. Screen
Actors Guild, Inc., 525 U.S. 33, 44, 119 S. Ct. 292, 142 L. Ed. 2d
242, and then quoting Spellacy v. Airline Pilots Ass’n–Int’l, 156
F.3d 120, 126 (2d Cir. 1998)).
72
Vaughn v. Air Line Pilots Ass’n, Int’l, 604 F.3d 703, 709 (2d
Cir. 2010) (quoting O’Neill, 499 U.S. at 67 (citation and quotation
marks omitted)).
APP-38
trariness.73 As to “discriminatory,” “‘substantial
evidence’ [must] indicate[] that [the union] engaged in
discrimination that was ‘intentional, severe, and
unrelated to legitimate union objectives.”74 “Bad faith,
which ‘encompasses fraud, dishonesty, and other intentionally misleading conduct,’ requires [well-pleaded
factual allegations] that the union acted with ‘an
improper intent, purpose, or motive.’”75
The TWA pilots argue that the bankruptcy court
failed to construe the complaint as a whole by analyzing separately the ten components of the single,
sprawling breach count.76 This argument is meritless.77
The court in fact drew its organization from the MSC
73
Id.
74
Id. (quoting Amalgamated Ass’n of St., Elec. Ry. & Motor
Coach Employees of Am. v. Lockridge, 403 U.S. 274, 301, 91 S. Ct.
1909, 29 L. Ed. 2d 473 (1971)).
75
Id. at 709-10 (quoting Spellacy, 156 F.3d at 126).
76
Appellant Br. 29-31.
77
No case to which the TWA pilots point forbids courts from
taking this approach. In fact, the Second Circuit analyzed a duty
of fair representation claim similarly in Vaughn v. Air Line Pilots
Association, International. See 604 F.3d at 710-12. Moreover, in
rejecting this argument below, the bankruptcy court asserted that
it “has examined each of the [TWA pilots’] allegations and has
found no basis for the individual claims asserted. … This assessment does not change whether those allegations are evaluated as a
whole or parsed individually.” Summary Judgment Op. at 53 n.41
[TWA Pilot App. 132] (emphasis added).
APP-39
itself,78 and the TWA pilots largely follow that framing
in their brief. As viewing the components of the alleged
breach separately is a sensible way of construing the
MSC as a whole, I do so here.
I. The Bankruptcy Court Correctly Dismissed the
First Four Claims.
The first four claims were resolved on a motion to
dismiss. The analysis that follows therefore ignores the
discovery record and assumes the allegations in the
MSC to be true.
A. Claims One and Two
Claims one and two center on the abrogation of
Supplement CC: that APA (1) failed to bargain on
behalf of the TWA pilots over the abrogation of Supplement CC, and (2) agreed to abrogate Supplement CC
without securing equivalent job protections. The bankruptcy court held APA’s alleged conduct, even if true,
could not have injured the TWA pilots because there
was no true bargaining or agreement over Supplement
CC’s termination—the court abrogated it.79 Moreover,
in taking judicial notice of the abrogation proceedings
previously before it, the court found that “APA opposed
the termination of the collective bargaining agreement
at every turn.”80
78
See MSC ¶ 48 [TWA Pilot App. 33].
79
Dismissal Op. at 14-16 [TWA Pilot App. 69-71].
80
Id. at 15.
APP-40
The TWA pilots devote a single paragraph in their
brief to each of their first two claims. As to the first,
they argue that the bankruptcy court “ignor[ed] the
fact that APA had agreed to terminate Supplement CC
before the CBA was abrogated.”81 But the bankruptcy
court observed that any “agreement” to terminate
Supplement CC “was only a piece of the negotiations”
and was not binding in any sense.82 For that reason,
APA’s decision to enter into a nonbinding agreement,
when the court itself abrogated Supplement CC, cannot
satisfy the causation requirement for a duty of fair
representation claim.
On the second claim, the TWA pilots argue that
“[a]brogation of the CBA [including Supplement CC]
did not preclude APA from negotiating with [AA] for
‘equivalent job protections.’”83 Again, this argument
fails because the bankruptcy court abrogated Supplement CC.
In effect, the TWA pilots would hold APA accountable for something it did not do. The dismissal of the
first two claims is affirmed.
B. Claim Three
Claim three fares no better. The TWA pilots allege
that APA and AA falsely told the bankruptcy court
during a hearing that the LOA 12-05 arbitration was
81
Appellant Br. 31.
82
Dismissal Op. at 15-16 [TWA Pilot App. 70-71].
83
Appellant Br. 31.
APP-41
intended to “replicate” Supplement CC’s protections.84
They appear to read “replicate” as literally as one can
—a promise to produce an exact copy of Supplement
CC’s protections. Thus, their claim is that APA and AA
misled the bankruptcy court into believing that it
would duplicate Supplement CC via arbitration, and
that the court therefore approved LOA 12-05 when it
otherwise would not have.
In rejecting this claim, the bankruptcy court relied
on the text of LOA 12-05, which, of course, had been
presented to it years earlier when it approved the
letter.85 The LOA states that the purpose of the arbitration was “determin[ing] what alternative contractual rights should be provided to TWA Pilots as a
result of the loss of flying opportunities due to [the]
termination of Supplement CC and the closing of the
84
85
MSC ¶ ¶ 22, 48(c).
Dismissal Op. at 17 [TWA Pilot App. 72]. This document
was not attached to the MSC, but the court took judicial notice of
its contents. The TWA pilots have waived any objection to this
decision by not challenging it in their brief. I find, alternatively,
that the court properly took judicial notice of the contents of the
letter. I find also that the MSC incorporated LOA 12-05 by reference. Claim three references “LOA 12-05” by name, see MSC ¶
48(c) [TWA Pilot App. 33], and the LOA is highly relevant to the
allegations throughout the MSC. “In most instances where
[incorporation by reference applies], the incorporated material is
a contract or other legal document containing obligations upon
which the plaintiff’s complaint stands or falls, but which for some
reason—usually because the document, read in its entirety, would
undermine the legitimacy of the plaintiff’s claim—was not
attached to the complaint.” Glob. Network Commc’ns, Inc. v. City
of New York, 458 F.3d 150, 157 (2d Cir. 2006).
APP-42
[St. Louis] base.”86 The court observed also that the
word “replicate” appears nowhere in LOA 12-05, and it
found impossible the premise that the arbitration was
intended to “replicate” Supplement CC because the
St. Louis base was closing and the protective fence no
longer could exist.87
The TWA pilots now argue that the bankruptcy
court erroneously dismissed their claim because literal
replication was the true meaning of LOA 12-05.88 This
argument in fact undermines their claim. The MSC
alleges that APA and AA misrepresented to the court
that the arbitration would replicate Supplement CC’s
protections. This means the MSC’s position is that the
true intent of LOA 12-05 arbitration was not literal
replication. If we agree with the TWA pilots’ current
argument that literal replication was the true meaning
of LOA 12-05, there was no misrepresentation—and
therefore no breach by APA—and their claim must be
dismissed.
86
Dismissal Op. at 17 [TWA Pilot App. 72] (citation omitted).
87
Id. at 18-19.
88
Of course, the underlying claim is that the court prior to
approving LOA 12-05 did understand it to require literal replication. This leaves the TWA pilots in the awkward position of arguing that the same court that once was duped into believing that
“replicate” should be taken literally erroneously dismissed their
claim based on its then-present belief that “replicate” should not
be taken literally, and in fact asserted that it never understood
LOA 12-05 in that way. By appealing this issue, the TWA pilots
are effectively accusing the court of misrepresenting its initial
understanding of what LOA 12-05 required.
APP-43
Even setting aside this confusion, the TWA pilots’
unnatural reading of “replicate” raises several
concerns. Chief among them is that it is utterly
implausible that APA promised to do the impossible by
building a protective fence around an AA hub that was
slated for closure. One cannot build even a metaphorical fence around something that does not exist. Agreeing with the TWA pilots would require further a belief
that APA and AA left no hint in LOA 12-05 of their
agreement to do the impossible, but instead revealed
their hidden intent in a stray comment before disclaiming that position as soon as the arbitration began.89
This is beyond implausible.90
89
In their brief, the TWA pilots attempt to add further
evidence that AA and APA intended a literal replication standard.
In their words, the evidence comes from “discovery conducted after
[the bankruptcy court’s] erroneous ruling,” Appellant Br. 32—i.e.,
facts not alleged in the MSC. They cite to statements from APA’s
general counsel, none in the text of LOA 12-05, that the arbitration would create protections “just like,” “equivalent to,” or “not
better or worse than” the prior ones. Id. (emphasis omitted). Even
if it were appropriate to consider this evidence on appeal from a
motion to dismiss—it is not—no fair-minded reader could conclude
these statements indicate that APA and AA agreed via LOA 12-05
to replicate Supplement CC. Rather, these comments indicate that
the parties believed LOA 12-05 would create, as it stated, “alternative” protections.
90
See Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937,
173 L. Ed. 2d 868 (2009) (“Determining whether a complaint states
a plausible claim for relief will, as the Court of Appeals observed,
be a context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.”).
APP-44
C. Claim Four
The bankruptcy court dismissed also the claim that
APA breached its duty by precluding the arbitrators
via LOA 12-05 from addressing the seniority list and
failing to require them to “replicate” Supplement CC’s
protections. It found that even if this allegation were
true, the TWA pilots would not be entitled to relief
because the claim incorrectly assumes that the only
satisfactory remedies in arbitration were changing the
seniority list and replicating Supplement CC’s protections.91 Instead, the court found, APA’s duty was to
balance the interests of two groups of pilots, and the
TWA pilots had not alleged APA discriminated in
balancing those interests.92
To begin, the half of this claim that faults APA for
not requiring the arbitrators to impossibly “replicate”
Supplement CC fails for the same reasons noted above.
And the TWA pilots do not argue that we should read
“replicate” more reasonably for the purpose of this
claim.93 In fact, they do not advance any argument at
91
Dismissal Op. 19 [TWA Pilot App. 74].
92
Id. at 20.
93
Even if they did, the MSC alleges that the purpose of the
arbitration was resolving the “TWA pilot issue”—the hole left by
Supplement CC’s abrogation. MSC ¶ 19 [TWA Pilot App. 27]. The
TWA pilots thus cannot argue that APA’s decision to sign LOA
12-05 precluded them from finding an alternative to Supplement
CC. Moreover, “a showing that union action has disadvantaged a
group of members, without more, does not establish a breach of the
duty of fair representation” because “a union by necessity must
differentiate among its members in a variety of contexts.” Flight
APP-45
all for why the bankruptcy court’s decision to dismiss
this claim was erroneous; their argument focuses
entirely on the seniority list.94
As to APA’s agreement precluding the arbitrators
from revisiting the seniority list, the bankruptcy court
concluded that APA had no duty to demand revisiting
it through the arbitration because doing so would harm
the AA pilots by lowering their positions on the list.
While the TWA pilots find this reasoning “incorrect,”
they make no clear argument for why this is so.95
Binding precedent supports the bankruptcy court’s
holding. Under the similar facts of Flight Attendants in
Reunion v. American Airlines,96 TWA’s flight attendants were placed at the bottom of AA’s seniority list
after the two airlines merged.97 When AA and U.S. Airways agreed to merge in 2013, the AA flight attendants’ union entered into negotiations with the U.S.
Airways’ attendants’ union over integrating their
Attendants in Reunion v. Am. Airlines, Inc., 813 F.3d 468, 473 (2d
Cir. 2016) (quoting Haerum v. Air Line Pilots Ass’n, 892 F.2d 216,
221 (2d Cir. 1989)). Even construed generously, the MSC simply
does not allege the necessary “substantial evidence” that APA’s
conduct was “intentional, severe, and unrelated to legitimate
union objectives.” Id. (quoting Lockridge, 403 U.S. at 301).
94
See Appellant Br. 33-35.
95
See id.
96
813 F.3d 468.
97
Id. at 470-71.
APP-46
seniority lists.98 The U.S. Airways attendants’ union
argued that TWA attendants should be given seniority
based on their TWA dates of hire, but the AA union
threatened that the U.S. Airways attendants might not
be credited for their years with U.S. Airways if they
maintained that position.99 The unions subsequently
agreed to integrate their seniority lists, which meant
the TWA attendants would continue receiving no credit
for their TWA years.100
The TWA attendants sued for breach of the duty of
fair representation, and the Second Circuit affirmed
the lower court’s dismissal of that claim.101 Based on
the aforementioned facts, it held that “the union’s
decision not to reorder the existing seniority list at
[AA] prior to the merger and to agree to integrate the
two separate seniority lists based on each flight attendant’s ‘length of service’ cannot fairly be described as
either irrational or discriminatory, even though it ultimately, and unfortunately, disadvantaged the plaintiffs.”102 It found principally that the union could not be
held liable for merely balancing its members’ necessarily competing interests when refusing to modify its
existing seniority list in the course of negotiating the
98
Id. at 471.
99
Id.
100
Id.
101
Id. at 472-75.
102
Id. at 473-74.
APP-47
integration of that list with another.103 “[C]atapulting
the former TWA flight attendants up the [AA] seniority
list would have resulted in other [AA] flight attendants
losing their relative seniority, and such a ‘juggl[ing] [of]
the existing seniority ladder … would have exposed
[the union] to countervailing claims.”104
The TWA pilots offer no reason why APA’s decision
was irrational, discriminatory, or in bad faith.105 They
assert only that the bankruptcy court’s reasoning that
seniority is a “zero sum game” was flawed. Whether
the bankruptcy court engaged in an error of reasoning
(it did not) is insufficient for reversal on de novo
review. In any event, Flight Attendants in Reunion
makes clear that declining to modify an existing seniority list to address past grievances when negotiating the
integration of that list with another is not, without
more, a breach of the duty of fair representation. As
the TWA pilots make no effort to assert the additional
facts necessary to advance their claim, they have
waived any argument to that effect.106
103
Id. at 474.
104
Id. (quoting Haerum, 892 F.2d at 221).
105
Appellant Br. 33-35.
106
Even then, and as noted with respect to the “replicate”
theory, nothing in the MSC when construed generously in favor of
the TWA pilots suggests that APA’s decision was irrational,
discriminatory, or in bad faith, particularly when it is compared to
the factually similar decision blessed by the Second Circuit in
Flight Attendants in Reunion.
APP-48
Nothing about this analysis changes when these
four claims are viewed in the context of the entire
MSC. The dismissal order is affirmed.
II. The Bankruptcy Court Correctly Entered Summary Judgment for APA on the Remaining Six Claims.
The remaining six claims were resolved in AMA’s
favor in a summary judgment order. While the parties
agree largely on the basic facts, there are several
purported questions of material fact that the bankruptcy court resolved in its opinion. I introduce them
where relevant in the sections that follow, mindful that
I review the bankruptcy court’s fact finding for clear
error.107
A. Claims Five, Six, Seven, and Eight
As alleged in the MSC, claims five through eight
charge APA with:
5. Selecting the arbitrators without input from
the TWA pilots;
6. Selecting the arbitration participants without
such input;
7. Selecting the lawyers without such input;
8. Hiring Kennedy to represent the AA pilots
committee as counsel despite his alleged conflicts.
Each of these claims turns on APA’s alleged role in
setting up the arbitration process. None is meritorious.
What follows is akin to a “greatest hits” version of their
107
In re Motors, 428 B.R. at 51 (citing In re AppliedTheory,
493 F.3d at 85).
APP-49
defects, a more comprehensive discussion of which is
found in the bankruptcy court’s opinion.
The TWA pilots have abandoned claim five by not
advancing in their appellate brief any argument that
the bankruptcy court resolved the claim erroneously
against them. In addition, however, the TWA pilots’
own stipulations defeat the claim. The parties agree
that Gabel and Bounds, the TWA pilots’ union representatives, approved of LOA 12-05’s language naming
Bloch as lead arbitrator. Gabel in fact determined
Bloch would be “a good choice” after hearing feedback
from other TWA pilots. Gabel himself recommended
the remaining two arbitrators, one of whom had ruled
in APA’s favor in a $23 million arbitration against AA.
Despite these stipulations, the TWA pilots theorize
that APA controlled the TWA pilots committee and,
thus, that the selection of the panel should be attributed to APA. The bankruptcy court found “no evidence
to support [the] assertions that APA in some way
controlled or directed the decisions made by the pilots
committees.”108 Nothing the TWA pilots argue on
appeal suggests this finding was clearly erroneous. As
there is thus no dispute of material fact that APA
played no role in the committee’s decisionmaking, no
reasonable jury could conclude that APA acted in an
arbitrary, discriminatory, or bad-faith manner with
respect to selecting the arbitrators—or that it acted at
all. Nor could a reasonable jury conclude that APA
caused the TWA pilots’ injuries by sitting on the sidelines, or even that the composition of the arbitration
panel caused any injuries to the TWA pilots.
108
Summary Judgment Op. at 22 [TWA Pilot App. 101].
APP-50
Claim six fails for similar reasons. The parties stipulate that the TWA pilots’ St. Louis union representatives chose Gabel to chair their arbitration committee.109 They stipulate also that Gabel selected the
committee members, all of whom were TWA pilots.110
It therefore is undisputed that the TWA pilots, not
APA, selected the committee members. The stipulations reveal also that APA played no role in selecting
the AA pilots committee, whose members the parties
agree were selected by an AA pilot.111 To whatever
extent these stipulations do not demonstrate APA’s
nonparticipation, the bankruptcy court expressly found
that APA did not select the committee members. As
nothing the TWA pilots argue suggests this finding
was clearly erroneous, claim six fails.112 Even then, the
TWA pilots do not argue, and no reasonable jury could
infer from this record, that the committee members
failed to perform their duties in a manner that injured
the TWA pilots. The overwhelming evidence that the
committees acted properly severs causation as a matter
of law.
109
APA SMF ¶ 24 [TWA Pilot App. 149].
110
Id. ¶ 25.
111
Id. ¶¶ 33-35; AA SMF ¶ 15.
112
Moreover, the TWA pilots stipulate that “it would not have
been fair for the former TWA pilots to participate in selecting the
members of [the] AA Pilots Committee.” APA SMF ¶ 36. That
stipulation further absolves APA with regard to the AA pilots
committee, as the TWA pilots concede APA had no duty to consider
their input in forming that committee.
APP-51
On claim seven, the TWA pilots object to a paragraph in the stipulated facts stating that each committee selected its own counsel.113 But they do in fact
concede that the committees selected their own counsel, as their only objection is to the assertion that the
committees did so without influence from APA.114
APA’s influence, they argue, stems from the allegation,
rejected above, that “[t]he TWA Pilot Committee was
formed by APA as an AD Hoc Committee of itself.”115
The court below did not clearly err by finding that the
committees chose their own counsel without APA’s
influence.116 Moreover, the TWA pilots have failed to
show causation, as they have not argued, and no
evidence suggests, that the committee’s decision to hire
experienced counsel—who represented the TWA pilots
in matters both before and after the arbitration—
caused their injuries.
Claim eight, that APA hired the allegedly conflicted
Kennedy to represent the AA pilots committee, fails for
similar reasons. The bankruptcy court found that the
AA pilots committee—not APA—hired Kennedy.117 The
113
Id. ¶¶ 61, 68.
114
Id. ¶ 61 [TWA Pilot App. 159].
115
Id.
116
Summary Judgment Op. at 21-22, 43-44 & nn. 31-32 [TWA
Pilot App. 100-01, 122-23].
117
Id. at 44 n.32 (“[N]othing presented the [TWA pilots]
suggests that APA controlled or otherwise dictated who the AA
Pilots Committee should hire as counsel.”).
APP-52
TWA pilots point to no evidence contradicting this
finding and continue resting on their argument that
APA controlled the committees. Further, although I
need not wade into Kennedy’s alleged conflicts, they
are de minimus at best, and an independent ethics
attorney advised APA that they were not disqualifying.
The TWA pilots have not explained how APA’s
supposed decision to hire Kennedy was bad-faith
conduct. And as for the previous three claims, there is
no evidence that Kennedy’s selection caused the TWA
pilots any injury or that the process would have gone
differently if the AA pilots committee had retained a
different attorney.
B. Claims Nine and Ten
The final two claims turn on APA’s alleged conduct
during the arbitration.
There is no merit to claim nine, viz, that APA
pursued, through the AA pilots committee, a position
in the arbitration designed to take jobs away from the
TWA pilots when it should have attempted to “replicate” Supplement CC’s protections. The lack of
evidence that APA controlled the AA pilots committee
is decisive. But the court below construed the claim
more generously as one that APA failed to prevent the
AA pilots committee from taking a position adverse to
the TWA pilots.118 This framing does not rescue the
claim.
When a union is “faced with two groups of its
members with objectives that [are] directly at odds …
118
Summary Judgment Op. 46-49 [TWA Pilot App. 125-28].
APP-53
[s]ubmission of the impending dispute to arbitration
[is] an equitable and reasonable method of resolving
it,” and not “arbitrary, discriminatory, in bad faith, or
wholly outside the range of reasonableness.”119 It logically follows that dividing the members into committees
is a reasonable way of working around such conflicts
when a union negotiates with a third party on behalf of
members with directly competing interests. The
premise of APA’s committee approach to the LOA
12-05 arbitration was that the TWA and AA pilots had
conflicting goals. No matter how the new CBA ultimately addressed the treatment of the TWA pilots,
there would be winners and losers. When advantages
to one group are disadvantages to another, balancing
their interests is a zero-sum game.
Viewed in this light, it is easy to see why APA had
no duty to control the committees’ bargaining positions
or to endorse the substantive positions of the TWA
pilots. If a union submits a dispute to arbitration to
avoid conflicts among its members and then advocates
on behalf of some members to the detriment of others,
that advocacy would defeat the purpose of the arbitration, and the union would expose itself to legal action
by the members it sided against.120 Agreeing with the
TWA pilots would have stranded the union between
Scylla and Charybdis—it would breach its duty of fair
119
Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100, 1107
(2d Cir. 1991).
120
That APA unfairly took sides is, of course, the premise of
this lawsuit, and of claim nine in particular.
APP-54
representation by taking sides, and it would breach it
by not taking sides.
Even if we passed the duty hurdle, the TWA pilots
have failed to show causation. The undisputed facts
indicate that the TWA pilots vigorously pursued their
positions on replicating Supplement CC’s protections
and rearranging the seniority list. That APA supporting their position would have swayed the arbitrators’
views is extraordinarily unlikely, particularly where
“replicating” Supplement CC’s protections was impossible and LOA 12-05 expressly precluded the arbitrators from ordering much of the relief the TWA pilots
sought.
Claim ten is that APA improperly objected to the
TWA pilots’ two procedural proposals. The TWA pilots
have abandoned this claim by not pursuing it in their
appellate brief. But in any event, the undisputed facts
would preclude a finding of causation. The procedural
proposals concerned future negotiations, and therefore
had no bearing on this negotiation, the results of which
form the basis of the alleged injury. Further, the TWA
pilots agree that they had a full and fair opportunity to
respond to APA’s objections.121 But most compelling of
all is that the arbitrators disagreed with APA’s objections, which were jurisdictional, and ruled against the
TWA pilots’ procedural proposals on their merits.122
121
APA SMF ¶ 86 [TWA Pilot App. 167].
122
Id. ¶ 130
APP-55
C. Remaining Claims
Although I have now gone through the TWA pilots’
entire complaint, they pursue several other claims in
their brief. The first of these is that APA breached its
duty of fair representation by failing to present an
“institutional position against [AA].”123 In effect, the
claim is that LOA 12-05 was rotten from the start—
and made rotten everything that followed—because
APA acted in “brazen bad faith” by dividing the TWA
and AA pilots into separate committees for arbitration.124 Instead, the TWA pilots argue, APA should
have resolved the differences between the two groups
internally and then argued on their collective behalf in
arbitration.
There are several problems with this theory, the
most glaring of which is that it appears nowhere in the
MSC. The bankruptcy court found that the TWA pilots
raised it for the first time in their response to the
defendants’ motions for summary judgment and accordingly held it was waived.125 It is black-letter law that
courts will not consider an argument raised for the
first time in an opposition brief.126 But to make matters
worse, the TWA pilots do not challenge the bankruptcy
123
Appellant Br. 37.
124
Id. at 39.
125
Summary Judgment Op. at 25-26 [TWA Pilot App. 104-05].
126
Wright, 152 F.3d at 178.
APP-56
court’s waiver finding in their appellate brief. They
therefore have waived their waiver argument.127
That problem aside, the TWA pilots would need to
show that the bankruptcy court abused its discretion
by declining to consider a theory raised for the first
time in an opposition to summary judgment.128 Even if
it did, the TWA pilots then would need to show that
APA acted in bad faith by dividing two conflicted
groups into separate committees, each with its own
representation and counsel.129 As explained above,
dividing union members into committees for arbitration involving a third party is, without more, not
evidence of bad faith. The TWA pilots offer no compelling evidence of bad faith. Even construing the facts
generously in their favor, the only reasonable inference
to draw from APA’s decision is that APA wanted to
127
See, e.g., EDP Med. Computer Sys., Inc. v. United States,
480 F.3d 621, 625 (2d Cir. 2007) (holding the failure to raise an
argument in an opening brief constitutes waiver).
128
See, e.g., Zann Kwan v. Andalex Grp. LLC, 737 F.3d 834,
843 (2d Cir. 2013) (“The District Court held that because the
plaintiff had never asserted a claim of hostile work environment
until her brief in opposition to the motion for summary judgment,
it would not consider the claim. We agree with the District Court
and will not address the merits of that late-asserted claim.”);
Greenidge v. Allstate Ins. Co., 446 F.3d 356, 361 (2d Cir. 2006)
(“abuse of discretion”).
129
The TWA pilots do not appear to argue that the decision
was discriminatory or arbitrary. These arguments are thus
waived, but in any event the decision was not discriminatory
because it applied equally to both groups and was not arbitrary
because APA clearly sought to mitigate the conflicts among the
TWA and AA pilots.
APP-57
avoid the obvious litigation risk that might arise from
the forced marriage of the TWA and AA pilots.
The “institutional position” argument fails also for
lack of causation. The undisputed facts demonstrate
that the TWA pilots had a full and fair opportunity to
raise their arguments at arbitration, and the arbitration panel rejected them largely because they fell outside the scope of LOA 12-05. The TWA pilots advance
no compelling argument, and no reasonable jury could
find, that any institutional position would have been
similar to their own or resulted in better relief.
The second additional claim the TWA pilots
advance is that APA failed to enforce LOA 12-05 in
various ways. This claim undergirds many of those
considered above and primarily recycles the allegation
that LOA 12-05 bound APA to “replicate” the protections of Supplement CC. The TWA pilots point to
cherry-picked statements, none from the text of LOA
12-05, that supposedly shed light on this reading.
As discussed at length, the “replicate” standard
would impossibly require APA to build a protective
fence around an airport base that soon no longer would
exist. No reasonable jury could read LOA 12-05 as
setting this goal, particularly as the word “replicate”
appears nowhere in the LOA. The actual text states
that AA and APA “agree that a dispute resolution
procedure is necessary to determine what alternative
contractual rights should be provided.”130 None of the
statements APA points to contradicts this straightforward language. Many of them in fact bolster the
130
AA SMF ¶ 5 (emphasis added).
APP-58
theory that the parties agreed to negotiate for alternative protections.”131 In these circumstances, no reasonable jury could conclude that APA violated LOA 12-05
by not pushing for the “replicate” theory or that APA’s
failure to advocate for impossible relief caused the
panel to reject it.132
III The Bankruptcy Court Correctly Entered
Summary Judgment for AA on the Collusion Claim.
The collusion claim against AA hinges on the
existence of a breach of duty by APA.133 As there was
no breach, there was no collusion to commit a breach.
Other than a lengthy string of citations supporting the
rule that an employer can be held liable when it
colludes with a union, the TWA pilots spend just four
sentences asking for reversal on the collusion claim,
the first of which admits that “[AA’s] liability, if any, is
derivative of APA’s liability.”134 Their only real argument is that we should reverse here for the same
reasons we should reverse with respect to AA.
131
See note 89, supra.
132
We need not reach the issue of whether APA had any duty
to assert itself into the arbitration proceedings once it became
apparent that AA did not read LOA 12-05 to require replication of
Supplement CC.
133
See, e.g., Flight Attendants in Reunion, 813 F.3d at 475
(“Because the plaintiffs fail to state a claim for a breach of the duty
of fair representation by [their union], the plaintiffs also fail to
state a claim that [the employer] colluded in [the union’s]
breach.”).
134
Appellant Br. 57.
APP-59
The TWA pilots state also, in half a sentence, “that
the evidence shows that [AA] had knowledge of, and
was complicit in, nearly all of the facts that demonstrate[] APA breached its [duty of fair representation].”
This assertion is cursory and includes no citation to
any supporting evidence. “Issues not sufficiently argued in the briefs are considered waived and normally
will not be addressed on appeal.”135 As the TWA pilots
make no real argument that AA colluded with APA, I
decline to make one for them.
Conclusion
The judgment appealed from is affirmed.
SO ORDERED.
135
Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998).
APP-60
JUNE 2018 BANKRUPTCY COURT DECISION
(Krakowski I)
Krakowski v. American Airlines, Inc. (In re AMR
Corp.), 2018 Bankr. LEXIS 1726, 2018 L.R.R.M.
208039, Adv. No. 13-01283 (Bankr. S.D.N.Y. June 12,
2018).
UNITED STATES BANKRUPTCY COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK
In re: AMR CORP., et al.,
Reorganized Debtors.
JOHN KRAKOWSKI, et al.,
individually and on behalf of
those similarly situated,
Plaintiffs,
Chapter 11
Case No. 11-15463
(SHL) (Confirmed)
Adv. No. 13-01283
(SHL)
v.
AMERICAN AIRLINES, INC.,
et al.,
Defendants.
June 12, 2018
Before Bankruptcy Judge Sean H. Lane
APP-61
MEMORANDUM OF DECISION
Before the Court are the Defendants’ motions for
summary judgment [ECF Nos. 111-1, 114]1 with
respect to the Plaintiffs’ modified supplemental class
action complaint filed on behalf of the Plaintiffs and all
persons similarly situated (the “Complaint”) [ECF No.
48]. Plaintiffs John Krakowski, Kevin Horner, and M.
Alicia Sikes are former Trans World Airlines (“TWA”)
pilots that are now employed by American Airlines,
Inc. (“American”). The Complaint alleges that the
Allied Pilots Association (“APA”)—the pilots’ union at
American—breached its duty of fair representation to
the Plaintiffs and that American colluded in that
breach.2
As part of American’s bankruptcy restructuring, the
company sought and received authority to reject its
then-existing collective bargaining agreement with
APA (the “Old CBA”). See Plaintiffs’ Response to American’s Statement of Material Facts (“Resp. to American
SMF”) ¶ 3 [ECF No. 122]. American subsequently
negotiated a new collective bargaining agreement with
APA (the “New CBA”) that eliminated certain job
protections that legacy TWA pilots like the Plaintiffs
1
Unless otherwise specified, references to the Case Management/Electronic Case Filing (“ECF”) docket are to this adversary
proceeding.
2
The Plaintiffs originally brought this action in the United
States District Court for the Eastern District of Missouri. The
Missouri District Court transferred the case to this Court on
March 6, 2013. See Memorandum and Order, Case No. 4:12-cv00954-JAR [ECF No. 1].
APP-62
had held under the Old CBA. See Resp. to American
SMF ¶¶ 2-4. At the same time, American and APA
entered into a letter agreement that contemplated an
arbitration proceeding to create new job protections for
these legacy TWA pilots as an alternative to those lost
under the New CBA. See Resp. to American SMF
¶¶ 4-6.
The Court has issued two prior decisions in this
adversary proceeding granting dismissal of many of the
claims asserted by the Plaintiffs against the Defendants. See Krakowski v. American Airlines, Inc. (In re
AMR Corp.), 536 B.R. 360 (Bankr. S.D.N.Y. 2015); Krakowski v. American Airlines, Inc. (In re AMR Corp.),
2014 Bankr. LEXIS 2610, 2014 WL 2508729 (Bankr.
S.D.N.Y. Jun. 3, 2014).3 The Plaintiffs’ remaining
claims allege breaches of APA’s duty of fair representation with respect to the procedures used to conduct the
3
Today’s decision is but one part of an ongoing blizzard of
litigation involving these parties. In addition to the two decisions
referenced above, the Court in this case has also issued a decision
denying the Plaintiffs’ request for a stay of the arbitration. See
Krakowski v. American Airlines, Inc. (In re AMR Corp.), 2015
Bankr. LEXIS 1721, 2015 WL 2414750 (Bankr. S.D.N.Y. May 19,
2015). Moreover, the Court has issued two opinions in another
adversary proceeding filed by these same Plaintiffs relating to
disputes between the same parties over the alternative job protections to be awarded legacy TWA pilots. See Krakowski v. American
Airlines, Inc. (In re AMR Corp.), 538 B.R. 213 (Bankr. S.D.N.Y.
2015); Krakowski v. American Airlines, Inc. (In re AMR Corp.), 567
B.R. 247 (Bankr. S.D.N.Y. 2017). Last but not least, these Plaintiffs have filed another case involving the same parties regarding
the arbitration on the alternative job protections. See Adv. No.
16-01138. This extensive litigation history will become relevant in
analyzing certain legal issues below.
APP-63
arbitration, and assert that American colluded in those
breaches. See generally Krakowski, 536 B.R. 360;
Compl. ¶¶ 48(E)-(J), 57. For the reasons set forth
below, the Court grants the Defendants’ motions for
summary judgment and denies the Plaintiffs’ related
motion to amend the Complaint. [ECF No. 134].
BACKGROUND
A. The Collective Bargaining Agreement and
Establishment of the Arbitration
In 2001, American acquired the assets of TWA. See
Resp. to American SMF ¶ 1. Shortly thereafter, American and APA executed an agreement entitled “Supplement CC” that integrated the TWA pilots into American’s pilot group. See Resp. to American SMF ¶ 2.
Supplement CC modified American’s pilot seniority list
to include the former TWA pilots, but stripped these
former TWA pilots of much of the seniority earned
while at TWA. See Resp. to American SMF ¶ 2. But it
also constructed a “protective fence” at American’s
St. Louis pilot base, which created a minimum number
of captain positions for legacy TWA pilots and provided
them with preferential bidding for first officer positions. See Resp. to American SMF ¶ 2.
In November 2011, American filed for protection
under Chapter 11 of the Bankruptcy Code. See Resp. to
American SMF ¶ 3. As part of its reorganization,
American sought and obtained the Court’s permission
to abrogate its obligations under the Old CBA, including Supplement CC, pursuant to Section 1113 of the
Bankruptcy Code. See Resp. to American SMF ¶ 3; In
re AMR Corp., 477 B.R. 384, 393-95 (Bankr. S.D.N.Y.
2012); In re AMR Corp., 478 B.R. 599, 601-02 (Bankr.
APP-64
S.D.N.Y. 2012); In re AMR Corp., 2012 Bankr. LEXIS
4168, 2012 WL 3834798 (Bankr. S.D.N.Y. Sept. 5,
2012), aff’d, 523 B.R. 415 (S.D.N.Y. 2014), aff’d, 622
Fed. App’x 64 (2d Cir. 2015). In December 2012, American and APA came to an agreement on the New CBA,
which included a side letter of agreement numbered
12-05 (“LOA 12-05”). See Resp. to American SMF
¶¶ 4-5. Later that month, the Court entered an order
approving the New CBA. See Resp. to American SMF
¶ 10.
The New CBA, including LOA 12-05, was voted on
and ratified by APA membership, including the legacy
TWA pilots. See Resp. to American SMF ¶ 8. Approximately 81% of the participating pilots at American’s
St. Louis domicile voted in favor of the New CBA. See
Resp. to American SMF ¶ 9. Significantly, about 85%
of the legacy TWA pilots at American were APA members in St. Louis at the time of the vote. See Resp. to
American SMF ¶ 9.
LOA 12-05 provided that American “will have the
right, in its sole discretion, to decide whether to close
the existing STL pilot base,” and that “a dispute resolution procedure is necessary to determine what alternative contractual rights should be provided to TWA
Pilots as a result of the loss of flying opportunities due
to termination of Supplement CC and the closing of the
STL base.”4 Resp. to American SMF ¶ 5 (quoting Am.
4
Due to American’s desire to close the St. Louis base, and
the difficult and politically charged nature of the debate that had
surrounded Supplement CC, APA’s Board of Directors (the “APA
Board”) determined that American and APA should let three
neutral arbitrators decide the protections for the affected pilots if
APP-65
Ex. A, LOA 12-05 at 1 [ECF No. 117-1]). With respect
to the dispute resolution process, LOA 12-05 stated
that the parties would “engage in final and binding
interest arbitration” in front of a panel “consist[ing] of
three neutral arbitrators who are members of the
National Academy of Arbitrators with Richard Bloch as
the principal neutral.” Resp. to American SMF ¶ 6
(quoting Am. Ex. A, LOA 12-05 at 1, 2 [ECF No.
117-1]). Under LOA 12-05, the arbitrators were to
“decide what non-economic conditions should be
provided to TWA Pilots,” but “[i]n no event shall the
arbitrators have authority to modify the Pilots’ System
Seniority List … or impose material costs beyond training costs on the Company.” Resp. to American SMF ¶ 7
(quoting Am. Ex. A, LOA 12-05 at 2 [ECF No. 117-1]).
During the relevant time period, the APA Board
was composed of two members from each of several
geographic pilot “bases,” including the St. Louis base,
who were elected by APA members at their respective
bases and served as advocates for those pilots. See
Resp. to APA SMF ¶¶ 9-10. During the period relevant
to this case, nearly all of APA’s members at the
St. Louis base—at least 93%—were legacy TWA pilots.
See Resp. to APA SMF ¶ 11. In 2012, the APA Board
members that were elected from the St. Louis base
Supplement CC were eliminated. See Plaintiffs’ Response to APA’s
Statement of Material Facts (“Resp. to APA SMF”) ¶ 5 [ECF No.
124]. The APA Board approved a motion to that effect in February
2012. See Resp. to APA SMF ¶ 5. APA posted a public message to
the pilots explaining the motion. See Resp. to APA SMF ¶ 7. American and APA ultimately agreed to resolve the issue through the
process described in the February 2012 motion, and that agreement became LOA 12-05. See Resp. to APA SMF ¶ 8.
APP-66
were Captain Keith Bounds and Captain Douglas
Gabel, both of whom were legacy TWA pilots. See Resp.
to APA SMF ¶ 12. During 2012, Captain Gabel reached
his term limit as an APA Board member and Captain
Marcus Spiegel, a legacy TWA pilot, was elected by the
St. Louis base to replace Captain Gabel. See Resp. to
APA SMF ¶ 17.
APA attorney Edgar James, Esq. negotiated the
language of LOA 12-05 on behalf of APA. See Resp. to
APA SMF ¶ 18. In doing so, he consulted frequently
with Captains Gabel, Bounds and Spiegel from the
St. Louis base. See Resp. to APA SMF ¶ 19. Indeed,
Captain Gabel “was involved in the formation of LOA
12-05 from the early drafts in February 2012 through
the final agreement.” See Resp. to APA SMF ¶ 19
(quoting Pl. Ex. 4, Decl. of Douglas J. Gabel ¶ 13 [ECF
No. 97-4]). While Captains Gabel and Bounds opposed
the limitation on changes to seniority contained in
LOA 12-05, it is undisputed that they approved all of
the other language of LOA 12-05, including the language identifying Arbitrator Bloch as the principal arbitrator. See Resp. to APA SMF ¶¶ 20, 39-40; Resp. to
American SMF ¶ 8. Additionally, American and APA
both agreed that Arbitrator Bloch should serve as the
principal arbitrator because he was a prominent Railway Labor Act arbitrator that was familiar to airline
industry practitioners. See Resp. to American SMF ¶ 6.
In January 2013, American and APA entered into
a protocol agreement regarding the LOA 12-05 arbitration (the “Protocol Agreement”). See Resp. to American
SMF ¶ 11. The Protocol Agreement stated that the
LOA 12-05 arbitration would “provide for party status
and the hearings and for substantive presentations by:
APP-67
(1) American Airlines, Inc.; (2) a representative
committee of AA Pilots … and (3) a representative
committee of TWA Pilots … .” Resp. to American SMF
¶ 14 (quoting Am. Ex. B, Protocol Agreement ¶ 1 [ECF
No. 117-2]).
The representative committee of legacy AA Pilots
(the “AA Pilots Committee”) was chaired by Captain
Mark Stephens and also included Captain Michael
Mellerski, Captain James Eaton, and Captain Drew
Engelke. See Resp. to American SMF ¶ 15. Captain
Stephens chose the other members of the AA Pilots
Committee. See Resp. to APA SMF ¶ 34. The representative committee of legacy TWA Pilots (the “TWA
Pilots Committee”) was chaired by Captain Gabel and
also included Captain Dave Williams, Captain John
Swanson, First Officer Cary Bouchard, and First
Officer Thomas Duncan, all of whom were legacy TWA
pilots. See Resp. to American SMF ¶ 16; Resp. to APA
SMF ¶ 25. Captain Gabel was chosen as the chair of
the TWA Pilots Committee by Captains Bounds and
Spiegel, the two legacy TWA pilots that were then serving as the elected representatives from the St. Louis
base. See Resp. to APA SMF ¶ 24. Captain Gabel chose
the other members of the TWA Pilots Committee. See
Resp. to APA SMF ¶ 25.
American was not consulted or otherwise involved
in selecting the members of either pilot committee or
their committee chairs, and was unaware of how committee members were chosen. See Resp. to American
SMF ¶ 17. Thus, American was not aware of the
committee members and chairs that were chosen until
after the decisions had been made. See Resp. to American SMF ¶ 17. APA budgeted $100,000 for each of the
APP-68
pilot committees but, as of October 2013, it had reimbursed the TWA Pilots Committee fees and expenses in
the amount of $532,971 and the AA Pilots Committee
in the amount of $336,657. See Resp. to APA SMF
¶ 102.
The Protocol Agreement further provided that in
addition to Arbitrator Bloch, the members of the arbitration panel would include Arbitrators Stephen Goldberg and Ira Jaffe. See Resp. to American SMF ¶ 12.
Captain Gabel suggested the appointment of Arbitrators Goldberg and Jaffe as the remaining two arbitrators and APA accepted the suggestion. See Resp. to
APA SMF ¶ 51; Resp. to American SMF ¶ 12. American subsequently accepted Arbitrators Goldberg and
Jaffe because they were nationally prominent arbitrators that were familiar to airline industry practitioners. See Resp. to American SMF ¶ 12.
B. The Arbitration Process
During the course of the arbitration, the TWA Pilots
Committee, the AA Pilots Committee and American
were each represented by separate counsel. See Resp.
to American SMF ¶ 19. The AA Pilots Committee was
represented by Wesley Kennedy, Esq., while the TWA
Pilots Committee was represented by John O’B.
Clarke, Esq. See Resp. to American SMF ¶ 19. American chose its own counsel, but was not consulted or
otherwise involved in selecting counsel for the pilot
committees, and was unaware of how the committees’
counsel were selected. See Resp. to American SMF
¶¶ 19-20. Thus, American was also unaware of who
represented the pilot committees until after the decisions had been made. See Resp. to American SMF ¶ 20.
APP-69
At some point during the arbitration, the TWA Pilots
Committee claimed that Mr. Kennedy had a conflict of
interest in representing the AA Pilots Committee, but
American was not aware of this allegation until after
the arbitration concluded. See Resp. to American SMF
¶ 21.
Prior to the commencement of the LOA 12-05 arbitration, APA emailed all pilots about the arbitration
process and gave them contact information for the
TWA Pilots Committee and the AA Pilots Committee.
See Resp. to APA SMF ¶ 79. APA also posted a document informing pilots that they had a right to participate individually in the LOA 12-05 proceeding. See
Resp. to APA SMF ¶ 79.
The LOA 12-05 arbitration began with a procedural
hearing on April 2, 2013, followed by several days of
evidentiary hearings in April and May 2013, and
closing arguments in June 2013. See Resp. to APA
SMF ¶ 80. Prior to the arbitration commencing, the
TWA Pilots Committee submitted a pre-hearing brief
of approximately 40 pages. See Resp. to American SMF
¶ 24. During the arbitration, the TWA Pilots Committee presented five witnesses and cross-examined all
witnesses called by the AA Pilots Committee and
American. See Resp. to American SMF ¶ 24. The TWA
Pilots Committee also introduced dozens of exhibits, in
addition to the joint exhibits that were submitted by
the parties. See Resp. to American SMF ¶ 24. Subsequent to the arbitration, the TWA Pilots Committee
submitted a 44-page brief in support of its proposal, as
well as a 29-page reply brief. See Resp. to American
SMF ¶ 24.
APP-70
The Plaintiffs and all other legacy TWA pilots had
access to all materials from the arbitration, including
hearing transcripts, through a website on which the
materials were promptly posted. See Resp. to APA
SMF ¶ 87. All pilots were also allowed to attend the
hearings, and Plaintiffs Sikes and Horner did so. See
Resp. to APA SMF ¶ 88. Indeed, Plaintiff Krakowski
read transcripts of the hearings and both Plaintiffs
Krakowski and Horner reviewed the briefs submitted
to the arbitrators. See Resp. to APA SMF ¶ 88.
Additionally, all affected pilots, including all legacy
TWA pilots, were allowed to present written submissions and make oral presentations to Arbitrator Bloch
in Washington, D.C. and St. Louis on May 14-15, 2013,
regarding the impact on them from the loss of Supplement CC and the St. Louis base. See Resp. to APA SMF
¶¶ 93, 96; Resp. to American SMF ¶ 25. In all, the
arbitrators received 270 written pilot submissions, and
approximately 43 of the 55 pilots that made oral
presentations were legacy TWA pilots. See Resp. to
American SMF ¶ 25. This included Plaintiff Sikes, who
endorsed the proposal made by the TWA Pilots Committee, and Keith Bounds, a St. Louis representative
who presented a statement on behalf of 120 legacy
TWA pilots. See Resp. to American SMF ¶ 25.
C. Arguments at Arbitration and Arbitrators’
Rulings
The parties focus on three substantive issues that
are relevant to the legal challenges raised regarding
APP-71
the arbitration.5 First, the TWA Pilots Committee
argued that the arbitrators should seek to “replicate”
Supplement CC’s protections, relying on a statement
previously made by APA attorney Edgar James in
court proceedings and on testimony by Captain Gabel
that the intent of LOA 12-05 was to “replicate”
Supplement CC. See Resp. to APA SMF ¶¶ 104, 106-07.
APA did not take a position on the “replicate” issue.
See Resp. to APA SMF ¶ 108. Though opposed to the
“replicate” standard, the AA Pilots Committee argued
that its proposal best satisfied that standard. See Resp.
to APA SMF ¶ 110. American objected to the TWA
Pilots Committee’s advocacy of a “replicate” standard,
arguing that it contravened the terms of LOA 12-05.
See Resp. to American SMF ¶ 28. The arbitrators
ultimately agreed, concluding that “replicate” was not
the proper standard:
the Panel does not seek to re-establish, reproduce or replicate Supplement CC or its customized preferences. Given the termination of that
document and the impending St. Louis base
closing, that effort would be both fruitless and
contrary to the manifested intent of LOA 12-05,
which is to determine ‘alternative’ rights and to
‘substitute’ for the lost preferential flying opportunities.
5
The Plaintiffs’ duty of fair representation challenge relates
to how the arbitration was conducted and not what the arbitrators
ultimately awarded. Accordingly, this decision focuses on facts
that relate to the process of the arbitration itself, not those that
relate solely to the substance of the arbitrators’ ultimate award.
APP-72
Resp. to APA SMF ¶ 109 (quoting APA Ex. 1-F, LOA
12-05 Merits Opinion at 5 [ECF No. 92-9]).
Second, the AA Pilots Committee proposed “pay
protection” for a certain number of legacy TWA pilots.
See Resp. to APA SMF ¶ 112. Under this proposal, if
fewer than 340 legacy TWA pilots were able to acquire
captain positions after the closing of the St. Louis base,
American would offer “pay protection” to the number of
legacy TWA pilots that equaled the difference between
340 and the number of legacy TWA pilots then serving
as captains. See Resp. to APA SMF ¶ 112. American
would in effect pay 340 legacy TWA pilots as if they
were captains, whether or not such individuals were
actually able to obtain captain positions. See Resp. to
APA SMF ¶ 112. American argued that this proposal
was outside the arbitrators’ jurisdiction because LOA
12-05 permitted the arbitrators only to award “noneconomic conditions,” and not to increase costs for
American. See Resp. to APA SMF ¶ 113. APA did not
take a position on the issue because, as explained by
Edgar James, “[i]t’s the company’s role to object to
additional costs. It’s not the union role.” Resp. to APA
SMF ¶ 115 (quoting APA Ex. 15, James Depo. Tr.
103:19-20, June 14, 2016 [ECF No. 111-23]).6 While the
AA Pilots Committee responded that the baseline for
measuring economic costs should be the status quo as
of the LOA 12-05 arbitration, see Resp. to APA SMF
6
The Plaintiffs deny this statement of fact because they assert
the pay protection proposal was made by the AA Pilots Committee.
But for reasons discussed more fully below, there is no evidence that
APA was responsible for the positions taken by the AA Pilots
Committee (or the TWA Pilots Committee) during the arbitration.
APP-73
¶ 114, the arbitrators indicated that they agreed with
American’s position. See Resp. to APA SMF ¶ 116.7 The
AA Pilots Committee subsequently revised its proposal,
including a more limited pay protection proposal. See
Resp. to APA SMF ¶ 117; APA Ex. 9-L, Closing Brief of
AA Pilots Committee at 11, 68 [ECF No. 111-16].
Third, the TWA Pilots Committee made a proposal
regarding how legacy TWA Pilots were permitted to bid
on schedules. As described by the arbitrators, the TWA
Pilots Committee’s initial proposal would have permitted legacy TWA pilots bidding for schedules to bid
based on seniority determined by “their TWA date of
hire, while AA pilots against whom they bid would use
their AA date of hire,” or, in the alternative, employ a
“percentile bidding methodology to accomplish the
same goal.” Resp. to APA SMF ¶ 118 (quoting APA Ex.
7
See also APA Ex. 9-H, LOA 12-05 Arbitrator Panel Suggestions Regarding Post-Hearing Submissions at 2 [ECF No. 111-12]
(“In reviewing the submissions thus far, we are concerned that the
APA AA Pilots’ Committee proposal, which includes pay protection
provisions for certain narrow-body captain positions and certain
small-wide body captain positions amounts to an ‘economic condition,’ the imposition of which is foreclosed to this Panel by agreement of the parties to LOA 12-05. For similar reasons, we are
troubled by that portion of the APA AA Pilots’ Committee Proposal
suggesting that the pay protection proposal is not material
(perhaps not even economic) because, on balance, it is claimed, the
Company will save more by closing St. Louis as a pilot domicile
than it will expend by means of pay protection. We are not convinced either that the premises [sic] underlying the analysis are
necessarily correct or, more importantly, that without regard to
arguments concerning calculations, these are non-economic conditions or material costs beyond those associated with training.”).
APP-74
9-H, LOA 12-05 Arbitrator Panel Suggestions Regarding Post-Hearing Submissions at 3 [ECF No. 111-12]).
In support of this argument, the TWA Pilots Committee presented evidence regarding the intent of LOA
12-05, including testimony regarding Captain Gabel’s
conversations with Mr. James. See Resp. to APA SMF
¶ 121. American opposed this proposal, arguing that by
imposing a date of hire bidding methodology, the
proposal did not provide “preferential flying rights” as
required by LOA 12-05 but instead substituted a new
seniority list in violation of the prohibition on modifications to the seniority list. See Resp. to APA SMF ¶ 120.
The TWA Pilots Committee disagreed, contending that
its proposal provided only “preferential flying rights,”
that the bidding rules would only apply “inside … your
equipment group,” and that “[t]he relative order among
TWA pilots [was] the same relative order as TWA
pilots stand [on] the system seniority list.” Resp. to
APA SMF ¶ 120 (quoting APA Ex. 9-A, LOA 12-05
Arbitration Tr. 780:2, 777:20-22, Apr. 2, 2013 [ECF No.
111-5]).
After hearing these arguments, the arbitrators
concluded that the TWA Pilots Committee proposal
regarding bidding violated LOA 12-05 because it did
not constitute “preferential flying rights” but rather
“effectively modif[ied] the position of the TWA pilots on
the system seniority list (at least for some purposes).”
Resp. to APA SMF ¶ 122 (quoting APA Ex. 9-H, LOA
12-05 Arbitrator Panel Suggestions Regarding PostHearing Submissions at 3 [ECF No. 111-12]). Like the
AA Pilots Committee did after its proposal was deemed
outside the scope of the arbitrators’ authority, the TWA
Pilots Committee subsequently changed its proposal
APP-75
“to advocate a path to an award that is clearly within
this Board’s jurisdiction to grant.” See Resp. to APA
SMF ¶ 123 (quoting APA Ex. 9-C, Post-Hearing Brief
of the TWA Pilots Committee at 27 [ECF No. 111-7]).
These changes included a shift away from its date of
hire or percentile bidding proposals and towards a
“protective fences” approach for the flying assigned to
the legacy TWA pilots. See APA Ex. 9-C, Post-Hearing
Brief of the TWA Pilots Committee at 27-28 [ECF No.
111-7].
In addition to these three substantive areas, the
TWA Pilots Committee proposal also contained two
procedural provisions for future arbitrations. See Resp.
to APA SMF ¶ 124. First, the TWA Pilots Committee
asked the arbitrators to “[e]stablish a multiparty
adjustment board … in which TWA and preacquisition
AA pilots have equal representation to raise and
resolve disputes arising out of the application [and]
interpretation of the Revised Supplement CC.” See
Resp. to APA SMF ¶ 125 (quoting APA Ex. 1-H, APA
Response to Proposal at 2 [ECF No. 92-11]). APA
considered that proposal to be outside the panel’s jurisdiction because LOA 12-05 already specified a dispute
resolution mechanism, providing Bloch with continuing
jurisdiction. See Resp. to APA SMF ¶ 126. [*18]
Second, the TWA Pilots Committee asked that the
TWA pilots be granted “separate party status … in any
AA/US Airways … seniority integration negotiation
and/or arbitration in which they may propose an integration of their seniority by TWA [date of hire].” Resp.
to APA SMF ¶ 127 (quoting APA Ex. 1-H, APA
Response to Proposal at 2 [ECF No. 92-11]). APA
responded that this second procedural proposal was
APP-76
outside the panel’s jurisdiction because, among other
reasons, it contemplated changing the legacy TWA
pilots’ seniority as compared to other American Airlines pilots, violating the provision of LOA 12-05 barring such change. See Resp. to APA SMF ¶ 128. The
TWA Pilots Committee submitted a response to APA’s
brief, arguing that it should be stricken by the arbitrators. See Resp. to APA SMF ¶ 129. The panel did not
accept APA’s jurisdictional arguments, but also
declined to adopt either of the TWA Pilots Committee’s
procedural proposals. See Resp. to APA SMF ¶ 130.
After the arbitrators issued their merits award in
July 2013, American and APA drafted contractual
language to implement the award, subject to approval
by the arbitrators. See Resp. to APA SMF ¶ 131-33.
The TWA Pilots Committee participated in the development of this contractual language. See Resp. to APA
SMF ¶ 134. The parties were unable to agree on two
issues regarding the contractual language, and the
TWA Pilots Committee then submitted a brief to the
arbitrators regarding those issues. See Resp. to APA
SMF ¶ 135. The AA Pilots Committee opposed the
TWA Pilots Committee’s positions. See Resp. to APA
SMF ¶ 135. In September 2013, the panel issued an
opinion resolving the remaining issues regarding the
contractual language. See Resp. to APA SMF ¶ 136.
During the arbitration, American advanced its own
position on the alternative contractual rights that
should be provided to the legacy TWA pilots as it was
entitled to under the Protocol Agreement. See Resp. to
American SMF ¶ 26. There is no evidence that American contributed to the positions of the pilot committees
in the arbitration. See Resp. to American SMF ¶ 27.
APP-77
Nor is there evidence that American supported the
positions of either of the pilot committees as to the
substitute job protections that should be awarded to
the legacy TWA pilots by the arbitrators. See Resp. to
American SMF ¶ 28.8 Aside from its three-page posthearing brief regarding the TWA Pilots Committee
procedural proposals, there is no evidence that APA
took any position on the merits of the parties’ substantive proposals or any other substantive issue in the
arbitration. See Resp. to American SMF ¶ 31. American did not contribute to the APA post-hearing brief on
the procedural issues and was unaware of its content
until after it was filed. See Resp. to American SMF
¶ 31.9
8
Indeed, American objected to each pilot committees’
proposal, arguing that they both contravened the terms of LOA
12-05. See Resp. to American SMF ¶ 28. American argued that the
proposal made by the AA Pilots Committee would improperly
require American to downgrade captains to first officer positions
and pay them at captain rates—an economic condition that would
impose excessive costs on American in violation of LOA 12-05, and
contrary to the purpose of closing the St. Louis base. See Resp. to
American SMF ¶ 29. With respect to the proposal made by the
TWA Pilots Committee, American argued that it improperly
substituted a reconfigured seniority list, despite the fact that LOA
12-05 prohibited the arbitrators from modifying the seniority list.
See Resp. to American SMF ¶ 30.
9
Most of the sentences in this paragraph are disputed by
the Plaintiffs in their response to APA’s statement of material
facts. But for reasons further discussed below, the Court finds that
the Plaintiffs have no basis to dispute these facts.
APP-78
DISCUSSION
A. Legal Standards
1. Breach of Fiduciary Duty
“A union has a duty to represent fairly all employees subject to the collective bargaining agreement.”
Vaughn v. Air Line Pilots Ass’n Int’l, 604 F.3d 703, 709
(2d Cir. 2010) (internal citations and quotations omitted). This duty of fair representation requires that a
union represent employees adequately, honestly, and
in good faith. See Krakowski v. American Airlines, Inc.,
(In re AMR Corp.), 2014 Bankr. LEXIS 2610, 2014 WL
2508729, at *3 (Bankr. S.D.N.Y. June 3, 2014) (citing
Air Line Pilots Ass’n, Intern. v. O’Neill, 499 U.S. 65, 75,
111 S. Ct. 1127, 113 L. Ed. 2d 51 (1991)). But
“Congress did not intend judicial review of a union’s
performance to permit the court to substitute its own
view of the proper bargain for that reached by the
union.” O’Neill, 499 U.S. at 78. Thus, “[a]ny substantive examination of a union’s performance … must be
highly deferential, recognizing the wide latitude that
negotiators need for the effective performance of their
bargaining responsibilities.” Id. To prove that a union
breached its duty of fair representation, a plaintiff
must show that the union’s actions or inactions were
arbitrary, discriminatory, or in bad faith. Vaughn, 604
F.3d at 709. Each of these three concepts has its own
standard.
First, a union’s actions are arbitrary “only if, in
light of the factual and legal landscape at the time of
the union’s actions, the union’s behavior is so far outside a wide range of reasonableness as to be irrational.”
Vaughn, 604 F.3d at 709 (quoting O’Neill, 499 U.S. at
APP-79
67). Courts must review a union’s actions “in light of
both the facts and the legal climate that confronted the
negotiators at the time the decision was made.”
O’Neill, 499 U.S. at 78. While a union’s decision may in
hindsight “appear to the losing employee to have been
erroneous[,] … tactical errors are insufficient to show
a breach of the duty of fair representation; even
negligence on the union’s part does not give rise to a
breach.” Barr v. United Parcel Serv., Inc., 868 F.2d 36,
43 (2d Cir. 1989).
Second, a union’s actions are considered discriminatory if they were “intentional, severe, and unrelated
to legitimate union objectives.” Amalgamated Ass’n of
St., Elec., Ry., & Motor Coach Employees of Am. v.
Lockridge, 403 U.S. 274, 301, 91 S. Ct. 1909, 29 L. Ed.
2d 473 (1971); see also Nikci v. Quality Bldg. Services,
995 F. Supp. 2d 240, 248 n.4 (S.D.N.Y. 2014) (dismissing complaint for failure to allege the Lockridge
factors). “There is no requirement that unions treat
their members identically as long as their actions are
related to legitimate union objectives.” Vaughn, 604
F.3d at 712. For instance, the Supreme Court held in
O’Neill that “discrimination” “in the form of granting
one union member seniority over another similarly
situated member did not per se violate a union’s duty
of fair representation.” Krakowski, 2014 Bankr. LEXIS
2610, 2014 WL 2508729, at *3 (citing O’Neill, 499 U.S.
at 81). Rather, such treatment is improper “where the
union prefers or disparages the union members based
upon characteristics that are irrelevant to legitimate
union objectives.” Krakowski, 2014 Bankr. LEXIS
2610, 2014 WL 2508729, at *3 (citing Jones v. Trans
World Airlines, 495 F.2d 790, 797-98 (2d Cir. 1974)
APP-80
(union membership alone is not proper ground for
union to determine seniority); Wolf Trap Foundation
for the Performing Arts, 287 N.L.R.B. 1040, 1059 (1988)
(finding discrimination where union singled out an
employee only because she was female and a non-union
member)).
Third, a union has acted in bad faith, where it
“engaged in fraud, dishonesty, or other intentionally
misleading conduct with an improper intent, purpose,
or motive.” Krakowski, 2014 Bankr. LEXIS 2610, 2014
WL 2508729, at *4 (citing Vaughn, 604 F.3d at 709-10).
2. Causation
To prove a breach of duty of fair representation,
plaintiffs must also “demonstrate a causal connection
between the union’s wrongful conduct and their injuries.” Vaughn, 604 F.3d at 709 (internal citations and
quotations omitted). In cases alleging a breach of duty
of fair representation claim relating to an arbitration
award, causation may be assessed in the summary
judgment context. See Mullen v. Bevona, 1999 U.S.
Dist. LEXIS 16434, 1999 WL 974023, at *6 (S.D.N.Y.
Oct. 26, 1999) (citing Hines v. Anchor Motor Freight,
Inc., 424 U.S. 554, 563, 96 S. Ct. 1048, 47 L. Ed. 2d 231
(1976)); see also Alen v. U.S. Airways, Inc., 526 F.
App’x 89, 91 (2d Cir. 2013) (“A union breaches its duty
to fairly represent its members if its conduct is arbitrary, discriminatory, or in bad faith, and if there is a
causal connection between the union’s wrongful
conduct and their injuries.”) (internal citations and
quotations omitted). This is because, to succeed on
such a claim, a plaintiff must show “that defendant’s
conduct ‘seriously undermined the arbitral process.’”
APP-81
Mullen, 1999 U.S. Dist. LEXIS 16434, 1999 WL
974023, at *6 (quoting Barr, 868 F.2d at 43). The
plaintiff must further establish that “‘the unsuccessful
result was due to the union’s wrongful conduct.’” 1999
U.S. Dist. LEXIS 16434, [WL] at *6 (quoting Young v.
United States Postal Serv., 907 F.2d 305, 307 (2d Cir.
1990)).
[I]t is insufficient to show that the outcome
might have been different if defendant’s conduct
had been different. To demonstrate that defendant ‘seriously undermined the arbitral process,’
the plaintiff must show more than a remote
possibility that the outcome would have differed
if the defendant had not breached its duty of fair
representation.
Id. (emphasis in original).
The Plaintiffs argue that causation should not be
evaluated on summary judgment, relying on Gorwin v.
Local 282, I.B.T., 1997 U.S. Dist. LEXIS 3822, 1997
WL 151043 (S.D.N.Y. April 1, 1997). But the Court
disagrees. The court in Gorwin actually assessed
causation in the summary judgment context. See 1997
U.S. Dist. LEXIS 3822, [WL] at *11 (The Court … finds
that Gorwin has not presented any evidence that the
Union’s misrepresentation of its progress could have
contributed to the erroneous outcome of the arbitration.”). While the court ultimately denied summary
judgment on the claim in Gorwin, it was only because
the court concluded that there were disputed factual
issues in the case on the related legal questions,
including causation. See id.
APP-82
The Plaintiffs also argue for a different—and higher
—standard for evaluating causation than set forth
above. The Plaintiffs contend that causation is shown
only when “there is substantial reason to believe that
a union breach of duty contributed to the erroneous
outcome of the proceedings.” Plaintiffs’ Memo. in Opp.
to APA Renewed Mot. for Summ. J. [ECF No. 123] (“Pl.
Opp. to APA SJM”) at 26 (quoting Hines, 424 U.S. at
568; citing Ghartey v. St. John’s Queens Hosp., 869
F.2d 160, 163 (2d Cir. 1989); Bacchus v. N.Y.C. Dep’t of
Educ., 137 F. Supp. 3d 214, 251 (E.D.N.Y. 2015);
Tomney v. Int’l Ctr. For the Disabled, 357 F. Supp. 2d
721, 736 (S.D.N.Y. 2005). But some courts citing this
language have also stated that “unless there is some
causal connection between the breach and the alleged
erroneous outcome, then [the plaintiff] has no action.”
Phillips v. Lenox Hill Hospital, 673 F. Supp. 1207,
1214 (S.D.N.Y. 1987); see also Bacchus, 137 F. Supp. 3d
at 251 (“‘[P]laintiff cannot prevail on [duty of fair
representation] claim unless she establishes that
further action on the Union’s part would have resulted
in a favorable outcome.’”) (quoting Yarde v. Good
Samaritan Hosp., 360 F. Supp. 2d 552, 563 (S.D.N.Y.
2005)). In fact, the case law on causation for a duty of
fair representation claim is not extensive in this jurisdiction nor is it consistent as to the standard to be
employed.
In any event, the Court has no reason to further
parse the standard given that—for the reasons discussed below—the Court finds that the Plaintiffs have
failed to put forward evidence demonstrating a causal
connection for their various claims under either formula of the causation standard. See Hellstrom, 46 Fed.
APP-83
App’x at 654 (quoting Celotex, 477 U.S. at 325) (stating
that when the issue is one for which the nonmoving
party bears the ultimate burden of proof at trial, the
burden on the party moving for summary judgment is
to “demonstrate ‘that there is an absence of evidence to
support the nonmoving party’s case.’”). APA raised
numerous causation-related issues with respect to the
Plaintiffs’ arguments about the arbitration process—
specifically regarding the selection of arbitrators,
committees, and counsel—for which the Plaintiffs do
not offer evidence (or even an argument) in response.
See, e.g., Memo. in Support of APA Renewed Mot. for
Summ. J. [ECF No. 111-1] at 15-17, 20, 22, 24-28, 31.
While these circumstances are discussed individually
below, the Court notes that the Plaintiffs only affirmatively address causation with respect to their arguments on the lack of a “unified position” and “replicate”
issues. See Pl. Opp. to APA SJM at 27. But, as discussed below, APA’s motion is granted on these issues for
other reasons beyond causation.
3. Summary Judgment
Summary judgment is appropriate “if the pleadings,
depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a
matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317,
322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Fed. R.
Civ. P. 56(a) (made applicable to the adversary proceeding by Fed. R. Bankr. P. 7056). A material fact is one
that “might affect the outcome of the suit under
governing law.” McCarthy v. Dun & Bradstreet Corp.,
APP-84
482 F.3d 184, 202 (2d Cir. 2007) (internal citations and
quotations omitted).
“The moving party bears the initial burden of
‘informing the … court of the basis for its motion, and
identifying those portions of the pleadings, depositions,
answers to interrogatories, and admissions on file,
together with affidavits, if any, which it believes
demonstrate the absence of a genuine issue of material
fact.’” Hellstrom v. U.S. Dep’t of Veterans Affairs, 46
Fed. App’x 651, 654 (2d Cir. 2002) (quoting Celotex, 477
U.S. at 322). When the issue is one for which the nonmoving party bears the ultimate burden of proof at
trial, the burden on the party moving for summary
judgment is to “demonstrate ‘that there is an absence
of evidence to support the nonmoving party’s case.’” Id.
(quoting Celotex, 477 U.S. at 325). “‘It is ordinarily
sufficient for the movant to point to a lack of evidence
… on an essential element of the non-movant’s claim.
…’” Netherlands Ins. Co. v. United Specialty Ins. Co.,
276 F. Supp. 3d 94, 105 (S.D.N.Y. 2017) (quoting
Jaramillo v. Weyerhaeuser Co., 536 F.3d 140, 145 (2d
Cir. 2008)). This does not, however, “absolve the
movant of the obligation, articulated in Celotex, to
“‘identify[] those portions of [the record] which it
believes demonstrate the absence of a genuine issue of
material fact.’” Nick’s Garage, Inc. v. Progressive
Casualty Ins. Co., 875 F.3d 107, 117 n.5 (2d Cir. 2017)
(quoting Celotex, 477 U.S. at 323).
Once this burden is met, the non-moving party
“must come forward with specific facts showing that
there is a genuine issue for trial.” Hellstrom, 46 Fed.
App’x at 654 (citing Celotex, 477 U.S. at 322). A
“dispute about a material fact is ‘genuine’ … if the
APP-85
evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L.
Ed. 2d 202 (1986). But where “reasonable minds could
not differ as to the import of the evidence, then
summary judgment is proper.” Hellstrom, 46 Fed.
App’x at 654 (citing Bryant v. Maffucci, 923 F.2d 979,
982 (2d Cir. 1991)).
The court should “resolve all ambiguities and draw
all inferences in favor of [the] party against whom
summary judgment is sought.” Hellstrom, 46 Fed.
App’x at 654 (internal citations omitted). But a nonmovant cannot defeat summary judgment merely by
raising “a ‘metaphysical doubt’ concerning the facts” or
by simply offering “conjecture or surmise.” Id. (citing
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986)).
Moreover, the “nonmoving party’s opposition may not
rest on mere allegations or denials of the moving
party’s pleading, but ‘must set forth specific facts showing that there is a genuine issue for trial.’” Id. (quoting
Fed. R. Civ. P. 56(e)).
i. Facts Disputed by These Plaintiffs
In applying these summary judgment principles
here, the Court notes that the Plaintiffs have broadly
denied most facts that the Defendants contend are
undisputed regarding the arbitration. These include
facts about the most basic questions, such as the positions taken by the parties in the arbitration and who
chose the committee members, the arbitrators, and
counsel. But an examination of the record demonstrates that the Plaintiffs have not provided a suffi-
APP-86
cient basis for these sweeping denials and, therefore,
the Court considers many of the facts the Plaintiffs
oppose to be, in fact, undisputed.
The Plaintiffs offer two grounds for disputing these
facts, neither of which has a basis in law or fact.
First, the Plaintiffs contend that the AA Pilots
Committee—and in some circumstances the TWA
Pilots Committee—were mere creatures of APA, and
therefore all actions taken by either committee were
under the direction of and should be imputed to APA.
However, as the undisputed facts in the record establish—and as will be discussed further below—APA took
a neutral position in the arbitration and allowed the
two pilot committees to make their own arguments
before the arbitrators about the substitute protections
that should be afforded to the legacy TWA pilots. See
also Protocol Agreement ¶ 1 (“APA participation as a
party in the Interest Arbitration shall not be for the
purposes of advocating a substantive position but to
facilitate an orderly process and resolution of the
dispute” and that “[w]hile AA and APA are the parties
to this Agreement, the Interest Arbitration shall
provide for party status and the hearings and for
substantive presentations by: (1) American Airlines,
Inc.; (2) a representative committee of AA Pilots … and
(3) a representative committee of TWA pilots. …”). The
Plaintiffs provide no evidence to support their assertions that APA in some way controlled or directed the
decisions made by the pilot committees. Indeed, most
of the Plaintiffs’ denials of the Defendants’ proposed
undisputed facts are thinly disguised legal argument
relating to their position that it was inappropriate for
APA to allow two pilots committees to participate in
APP-87
the arbitration rather than having APA put forward a
“unified position” during the arbitration.10
10
Thus, the Plaintiffs deny numerous facts based on their
general view that the AA Pilots Committee and the TWA Pilots
Committee were somehow simply carrying out APA’s bidding. See,
e.g., Resp. to APA SMF ¶ 61 (Plaintiffs deny fact that the TWA
Pilots Committee chose Mr. Clarke as their counsel “with no
influence whatsoever from APA” because Plaintiffs assert that “the
TWA Pilots Committee was formed by APA as an ad hoc of itself,
and given ‘party status’ to the LOA 12-05 arbitration between APA
and American.”); Resp. to APA SMF ¶ 81 (Plaintiffs admit fact
that that arbitrators stated that APA delegated its advocacy
position to pilot committees and took no position on the substantive positions submitted by the committees, but deny the truth of
those statements because Plaintiffs assert that APA did not and
could not outsource its duty of representation and established the
committees of itself to present evidence and argument during the
arbitration); Resp. to APA SMF ¶ 82 (Plaintiffs admit fact that
APA’s president informed the union’s board members that APA
was to remain neutral throughout process, but deny the truth of
that statement because Plaintiffs assert that APA did not and
could not outsource its duty of representation and established the
committees of itself to present evidence and argument during the
arbitration); Resp. to APA SMF ¶ 83 (Plaintiffs admit fact that
stated role of TWA Pilots Committee in arbitration was to further
the interests of the TWA pilot group, but deny that was its true
role because Plaintiffs assert that APA established the committee
structure to create potential defense in this case); Resp. to APA
SMF ¶ 84 (Plaintiffs deny fact that TWA Pilots Committee carried
out its role without interference from APA or American because
“American and APA’s AA Pilots Committee” interfered with the
TWA Pilot Committee throughout the arbitration and because
during the arbitration American and the AA Pilots Committee
objected to the TWA Pilots Committee proposal as a de facto
seniority adjustment and the TWA Pilots Committee’s replicate
argument); Resp. to APA SMF ¶ 85 (Plaintiffs deny fact that the
TWA Pilots Committee had the opportunity to present its views
without interference from APA or American for same reasons);
APP-88
Second, the Plaintiffs deny various facts based on
their contention that American was supporting APA.
The Plaintiffs point out that the positions taken by
American were similar to those taken by the AA Pilots
Committee, specifically the objections made by American to arguments made by the TWA Pilots Committee
during the arbitration relating to (1) the “replicate”
issue, and (2) whether the TWA Pilots Committee’s
proposal was a de facto seniority adjustment for the
legacy TWA pilots. See Resp. to American SMF ¶ 27.11
Resp. to APA SMF ¶ 108 (Plaintiffs deny fact that APA did not
take a position in the arbitration on the replicate issue for same
reasons); Resp. to APA SMF ¶ 115 (Plaintiffs deny fact that APA
did not take position on “non-economic issue’ during arbitration
because Plaintiffs assert that the pay protection proposal was
made by “its Ad Hoc AA Pilots Committee.”); Resp. to APA SMF
¶ 135 (Plaintiffs deny fact that TWA Pilots Committee submitted
brief to arbitrators regarding contractual language “without interference from APA or American” because Plaintiffs assert that
“APA’s Ad Hoc American Pilot Committee opposed the TWA Pilot
Committee’s position.”).
11
Thus, the Plaintiffs deny numerous facts based on their
general view that American interfered with the TWA Pilots
Committee by taking certain positions during the arbitration,
some of which also happened to overlap with the positions taken
by the AA Pilots Committee. See Resp. to American SMF ¶ 27
(Plaintiffs deny fact that American did not contribute regarding
the positions of the pilot committees in the arbitration because
Plaintiffs assert that American supported APA’s positions regarding replicating and de facto seniority adjustment); Resp. to American SMF ¶ 28 (Plaintiffs deny fact that American did not support
the positions of either pilot committee and objected to each
committee’s position for same reasons); Resp. to American SMF
¶ 31 (Plaintiffs deny fact that APA did not take position on merits
of parties’ proposals or any other substantive issue at the arbitra-
APP-89
But there is no evidence to support that the positions
taken by American during the arbitration should be
attributed to another party or that American somehow
interfered with the TWA Pilots Committee ability to
present its case. Rather, the undisputed facts—discussed more fully below—demonstrate that APA remained
neutral during the arbitration process regarding the
substitute job protections to be awarded, and American
simply took its own position on the issues, which it was
allowed to do by right under the Protocol Agreement.
See Resp. to American SMF ¶ 26 (noting that in
accordance with the Protocol Agreement, American
may advance its own position regarding the alternative
contractual rights that should be provided to the legacy
TWA pilots).12
Where the Plaintiffs base their objection to American and APA’s proposed statements of undisputed fact
on these two arguments, therefore, the Court finds the
Plaintiffs’ objection to be without merit. It is well
established that “[t]he nonmovant … cannot create a
genuine issue of fact and defeat summary judgment
through ‘conclusory allegations, conjecture, and specu-
tion because Plaintiffs assert that APA and American were the
only parties to the arbitration and APA took positions throughout).
12
For instance, the language of LOA 12-05 provided American with the right to object to anything that imposed costs on them
or modified the seniority list. See LOA 12-05 at 2, Am. Ex. A [ECF
No. 117-1] (under LOA 12-05, the arbitrators were to “decide what
non-economic conditions should be provided to TWA Pilots,” but
“[i]n no event shall the arbitrators have authority to modify the
Pilots’ System Seniority List … or impose material costs beyond
training costs on the Company.”).
APP-90
lation.’” Mishkin v. Gurian (In re Adler, Coleman
Clearing Corp.), 399 F. Supp. 2d 486, 490 (S.D.N.Y.
2005) (quoting Kerzer v. Kingly Mfg., 156 F.3d 396, 400
(2d Cir. 1998)). “Rather, the nonmoving party must
present ‘significant probative evidence tending to
support the complaint.’” Smith v. Menifee, 2002 U.S.
Dist. LEXIS 4943, 2002 WL 461514, at *3 (S.D.N.Y.
March 26, 2002) (quoting First Nat’l Bank of Arizona
v. Cities Serv. Co., 391 U.S. 253, 290, 88 S. Ct. 1575, 20
L. Ed. 2d 569 (1968)). A trial court is not required to
“wade through improper denials and legal argument in
search of a genuinely disputed fact.” Bordelon v. Chi.
Sch. Reform Bd. of Trs., 233 F.3d 524, 528-29 (7th Cir.
2000); see also In re Gutierrez, 528 B.R. 1, 8 (Bankr. D.
Vt. 2014) (noting that “in each instance where the
Creditor asserts one of the Debtor’s ‘undisputed material facts’ is disputed, either (1) the fact is not material,
(2) the Creditor has failed to present significant probative evidence that any genuine dispute of fact exists,
(3) the materials upon which the Creditor relies do not
establish a dispute, or (4) the ‘disputed fact’ is actually
a legal argument.”). And while a party opposing summary judgment “is entitled to make legal arguments
regarding the facts alleged in [the movant’s statement
of facts], [ ] the Court is not obliged to accept [the nonmovant’s] characterization of those facts as facts themselves.” Chaney v. Stewart, 2015 U.S. Dist. LEXIS
45197, 2015 WL 1538021, at *1 n.2 (D. Vt. Apr. 7,
2015) (noting that nonmovant’s statement of disputed
facts was deficient, in part, because instead of contradicting the factual statements made in the movant’s
statement of undisputed facts, it instead “proffers additional facts and makes legal arguments. …”). Indeed,
courts have criticized parties for challenging “‘disputed’
APP-91
facts by proffering additional facts for context, without
actually contradicting the underlying factual statement” and for using their denial of facts to make “legal
argument more appropriately addressed in [a] memorandum.” Milnes v. Blue Cross & Blue Shield of Vt.,
2013 U.S. Dist. LEXIS 44162, 2013 WL 1314520, at *2
n.1 (D. Vt. Mar. 28, 2013) (noting that each side had
“postured considerably in their statements of disputed
facts” and that in its “search for genuine factual
disputes, the Court [ ] examined the documents in the
summary judgment record and not the parties’ characterizations of these documents.”)13
B. Plaintiffs’ Claim for Breach of Duty of Fair
Representation
The Plaintiffs present a number of arguments in
support of their duty of fair representation claim, each
of which the Court will address separately.
1. Unified Position
The Plaintiffs first argue that APA breached its
duty of fair representation in structuring the arbitration to permit two separate pilot committees to submit
two competing proposals rather than have APA present
one unified pilot position. See Plaintiffs’ Statement of
Additional Material Facts Regarding APA [ECF No.
13
The Court has also reviewed the Plaintiffs’ affirmative facts
[ECF Nos. 122, 124], and finds them to largely be either conclusory
or legal argument. In any event, the Court concludes that they
would not be material because, for all the reasons discussed below,
they would not “affect the outcome of the suit under the governing
law.” Mai v. Colvin, 2015 U.S. Dist. LEXIS 165609, 2015 WL
8484435, at *4 (E.D.N.Y. Dec. 9, 2015) (internal quotations omitted).
APP-92
124] (“Pl. Add’l Facts re: APA”) ¶ 29. The Plaintiffs
assert that the lack of a unified position was unprecedented, against industry custom, counter to the advice
of APA’s own counsel, and was therefore a breach of
APA’s fiduciary duty.
As a threshold matter, this argument must be
rejected because the Plaintiffs improperly raised it for
the first time in their response to the Defendants’
summary judgment motions. See Shah v. Helen Hayes
Hosp., 252 F. App’x 364, 366 (2d Cir. 2007) (“A party
may not use his or her opposition to a dispositive
motion as a means to amend the complaint.”) (citing
Wright v. Ernst & Young LLP, 152 F.3d 169, 178 (2d
Cir. 1998) (collecting cases)). The Plaintiffs have
known from the outset of the case that APA did not
present a unified position at the arbitration and
instead appointed separate pilot committees. But the
Plaintiffs did not assert this issue as a claim in their
initial complaint, amended complaint, or various briefs
in response to APA’s earlier motions to dismiss or even
APA’s initial summary judgment motion. The scope of
this case is clearly limited to Paragraphs 48(E) through
(J) “relating to how the arbitration was conducted,” the
only claims to survive American’s prior motion to dismiss. Krakowski, 536 B.R. at 372; Order at 2 [ECF No.
80] (granting in part motion to dismiss). The Plaintiffs
very clearly identified their disputes with the arbitration process in Paragraphs 48(E) through (J) of their
Complaint, none of which included an argument about
the lack of a “unified position.” See Compl. ¶ 48(E)-(J).
The Plaintiffs nonetheless contend that somehow a
reference in the Complaint to the existence of two pilot
committees encompasses their “unified position” claim.
APP-93
See Plaintiffs’ Memo. in Support of Mot. for Leave to
Amend at 3 [ECF No. 134-1] (citing Compl. ¶ 26).
While the Complaint does reference the creation of two
committees by APA, the existence of two committees is
presented only as factual background. See Compl. ¶ 26.
Nothing in the Complaint indicates a claim by the
Plaintiffs based on the lack of a “unified position.” See
Plaintiffs’ Memo. in Support of Mot. for Leave to
Amend at 3-4 (citing Compl. ¶ 48(F)). Thus, the
Complaint does not provide adequate notice to APA or
American of such a claim, and has hampered the
Defendants’ ability to conduct discovery on this issue.
See APA Opp. to Pl. Mot. for Leave to Amend at 7-8
(noting that APA’s document requests and interrogatories were limited to the claims in Paragraphs 48(E)(J) of the Complaint and did not include anything
about the “unified position,” and that APA did not
depose any witnesses on this topic); Malmsteen v.
Universal Music Grp., Inc., 940 F. Supp. 2d 123, 135
(S.D.N.Y. 2013) (noting that because plaintiff failed to
include claim in amended complaint, and instead
raised it for the first time in opposition to summary
judgment, the claim was waived) (citing Rojo v. Deutsche Bank, 487 Fed. App’x 586, 588-89 (2d Cir. 2012));
see also Lyman v. CSX Transp., Inc., 364 Fed. App’x
699, 701-02 (2d Cir. 2010) (holding that claims raised
for first time in opposition to summary judgment “need
not be considered” and that complaint and interrogatory response were insufficient to put defendant on
notice of plaintiff’s new claims) (citing Greenidge v. Allstate Ins. Co., 446 F.3d 356, 361 (2d Cir. 2006) (“[T]he
central purpose of a complaint is to provide the defendant with notice of the claims asserted against it. …”)).
APP-94
Even if this argument were not waived, however, it
would fail because the lack of a unified position was
not discriminatory, arbitrary, or in bad faith. A claim
of discriminatory conduct could not succeed here, as
both the legacy TWA pilots and the American pilots
were treated equally within the context of the arbitration and provided with the same resources, procedures,
and opportunities to present their position to the arbitrators. See Bowerman v. Int’l Union, 646 F.3d 360,
368-71 (6th Cir. 2011) (no evidence of discrimination
when contested training opportunities were available
to plaintiffs and other groups); Buford v. Runyon, 160
F.3d 1199, 1202 (8th Cir. 1998) (no breach of duty of
fair representation when two employees’ cases that
were similarly treated received different outcomes).
Indeed, a claim of discrimination by the same Plaintiffs as to a related arbitration has already been
rejected by another court for much the same reason. In
Horner v. American Airlines, Inc., 2017 U.S. Dist.
LEXIS 202806, 2017 WL 6313943 (N.D. Tex. Dec. 11,
2017), the Texas District Court was presented with a
dispute involving an arbitration under Supplement C,
which comprised the substitute protections for the
legacy TWA pilots that were put in place as a result of
the very same LOA 12-05 arbitration now before this
Court. See 2017 U.S. Dist. LEXIS 202806, [WL] at *1-2.
Supplement C provided for a dispute resolution procedure for any grievances arising thereunder. See 2017
U.S. Dist. LEXIS 202806, [WL] at *2. Legacy American
pilots and legacy TWA pilots both filed grievances. See
id. The plaintiff legacy TWA pilots asserted, among
other things, that APA’s failure to enforce a prior
agreement regarding Supplement C, as well as the
APP-95
stated intent of Supplement C, was arbitrary and
hostile. See 2017 U.S. Dist. LEXIS 202806, [WL] at *7.
They asserted that APA’s decision to allow the arbitration between the opposing sides and to remain neutral
throughout the process was due to hostility against the
legacy TWA pilots, and that the grievance process was
undermined as a result. See 2017 U.S. Dist. LEXIS
202806, [WL] at *7. But the court in Horner ultimately
held that “maintaining neutrality and providing two
groups of employees the same resources to pursue
arbitration could only be found to be reasonable. And
because the two groups were provided equal opportunity to assert their cases, the procedure cannot be
deemed discriminatory.” 2017 U.S. Dist. LEXIS
202806, [WL] at *9 (internal citations and quotations
omitted).14
Nor can the Plaintiffs show that the conduct of the
APA in utilizing two ad hoc pilot committees was
arbitrary, that is, “so far outside a wide range of
reasonableness … as to be irrational.” O’Neill, 499 U.S.
at 67 (internal citations and quotations omitted). The
Plaintiffs complain that APA did not work to develop a
unified position to present to the arbitrators. More
specifically, they note that the Chairman of the APA
Negotiating Committee did not work on crafting a
unified position but instead Captain Stephens and
Captain Gabel were tasked, on behalf of their respec-
14
Perhaps for these reasons, the Plaintiffs appear to concede
that the claim does not involve discriminatory conduct on the part
of APA. See Pl. Opp. to APA SJM at 7 (arguing that lack of a
unified position was arbitrary and bad faith, but making no reference to discrimination).
APP-96
tive pilot groups, with developing an APA position for
the arbitration. See Pl. Add’l Facts re: APA ¶¶ 33, 34.
The Plaintiffs note that Captains Stephens and Gabel
had one substantive meeting, which, according to
Captain Stephens, “didn’t go very long” because it
“became clear relatively early that we were conceptually very far apart.” Pl. Add’l Facts re: APA ¶ 34
(quoting Pl. Ex. 18, Stephens Depo. Tr., 13-14, 23, June
8, 2016 [ECF No. 124-18]). Rather than making further
efforts to develop a unified position, the APA instead
entered into the Protocol Agreement with American
that created the AA Pilots Committee and the TWA
Pilots Committee and gave them each “party status” at
the arbitration. See Pl. Add’l Facts re: APA ¶¶ 35-36
(explaining that each committee presented competing
proposals to the arbitrators).
But as the Horner court found, it was reasonable for
APA to remain neutral and allow each of the pilot
groups an opportunity to present their cases. Horner,
2017 U.S. Dist. LEXIS 202806, 2017 WL 6313943, at
*9. Indeed, the undisputed facts demonstrate the difficulty of arriving at a unified position that would satisfy
both pilot groups. APA’s counsel Mr. James testified
that though he had once hoped the two groups could
come together on a unified position, he later characterized such hopes as “unfounded.” APA Ex. 26, James
Depo. Tr. 29:9-10, June 14, 2016 [ECF No. 128-7]. That
view was echoed by the Chair of the TWA Pilots
Committee, Captain Gabel, who characterized the hope
of the two sides coming together as “a pipe dream.”
APA Ex. 9-J, Gabel email [ECF No. 111-14]; Pl. Opp. to
APA SJM at 6 (Plaintiffs’ conceding that the two sides
had been “conceptually very far apart”). Indeed, the
APP-97
Court cannot help but notice the profound distrust—
and lack of agreement—between the legacy TWA and
American pilots throughout the record of the yearslong litigation in this Court alone, encompassing three
adversary proceedings, multiple dispositive motions,
and amended complaints in each. See, e.g., Krakowski
v. American Airlines, Inc., (In re AMR Corp.), 567 B.R.
247 (Bankr. S.D.N.Y. 2017); Krakowski v. American
Airlines, Inc., (In re AMR Corp.), 538 B.R. 213 (Bankr.
S.D.N.Y. 2015); Krakowski v. American Airlines, Inc.,
(In re AMR Corp.), 536 B.R. 360 (Bankr. S.D.N.Y.
2015); Krakowski v. American Airlines, Inc., (In re
AMR Corp.), 2015 Bankr. LEXIS 1721, 2015 WL
2414750 (Bankr. S.D.N.Y. May 19, 2015); Krakowski v.
American Airlines, Inc., (In re AMR Corp.), 2014
Bankr. LEXIS 2610, 2014 WL 2508729 (Bankr.
S.D.N.Y. June 3, 2014).
Moreover, the process of conducting arbitrations
with separate presentations from employee sub-groups
is an accepted method of balancing competing employee interests. Indeed, the court in Horner ruled that a
similar arbitration process involving the very same
parties did not breach APA’s duty of fair representation. See Horner, 2017 U.S. Dist. LEXIS 202806,
2017 WL 6313943, at *9. In that case, the Plaintiffs
asserted that APA had advanced the parties’ grievances to arbitration “in a manner that pitted pilot
(Plaintiff Bounds) versus pilots (three legacy American
pilots).” 2017 U.S. Dist. LEXIS 202806, [WL] at *7. The
plaintiffs argued that “this choice to allow arbitration
and remain neutral throughout the arbitration process
is due to the new APA President’s hostility toward
former TWA pilots [and] that the grievance process
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was irredeemably undermined as a result.” Id. But the
Horner court found that “given its membership’s
contentious split over [the protections at issue], a
reasonable jury could only find that APA concluded
that the circumstances warranted neutrality.” 2017
U.S. Dist. LEXIS 202806, [WL] at *8. Furthermore,
“when ‘faced with two groups of its members with
objectives that were directly at odds … [submitting]
the impending dispute to arbitration was an equitable
and reasonable method of resolving it.” Id. (quoting
Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100,
1107 (2d Cir. 1991)).15
While the Plaintiffs assert that APA has never
previously used ad hoc committees in an interest
arbitration, this distinction is unavailing. The fact that
15
Likely for this reason, arbitrations involving different pilot
groups have been utilized to resolve merger-related issues for
years. See, e.g., Oling v. Air Line Pilots Ass’n, 346 F.2d 270 (7th
Cir. 1965) (after merger of United and Capital Air Lines, arbitration between representatives of each pilot group, arranged by
union representing both groups); Carr v. Airline Pilots Ass’n, Int’l,
2016 U.S. Dist. LEXIS 99895, 2016 WL 4061145 (S.D. Tex. July
29, 2016) (after merger of United and Continental, arbitration
between representatives of each pilot group, arranged by union
representing both groups). Arbitration is also commonly used as
a continuing process of dispute resolution to address issues
between merged employee groups. See, e.g., Pilots Representation
Org. v. Airline Pilots Ass’n, Int’l, 2007 U.S. Dist. LEXIS 62881,
2007 WL 2480349, at *1 (D. Minn. Aug. 24, 2007); Marcucilli v.
American Airlines, Inc., 2007 U.S. Dist. LEXIS 15962, 2007 WL
713146, at *7 (E.D. Mich. Mar. 7, 2007). Additionally, unions
utilize arbitration to resolve other types of intra-union issues, such
as disputes relating to the allocation of funds among employees
represented by the union. See, e.g., Barnes v. Air Line Pilots Ass’n,
Int’l., 141 F. Supp. 3d 836, 839 (N.D. Ill. 2015).
APP-99
this case involved an interest arbitration does not by
itself bar the use of this type of arbitration process.
The Plaintiffs do not provide any case authority in
support of such a notion or even any logical reason why
this would be the case. And while the circumstances
here are somewhat unusual—the abrogation of a
collective bargaining agreement in bankruptcy—it was
nonetheless a circumstance under which APA was
faced with an intractable dispute between two pilot
groups. See Horner, 2017 U.S. Dist. LEXIS 202806,
2017 WL 6313943, at *8.
Turning to the third leg of the duty of fair representation inquiry, the Plaintiffs argue that APA’s failure
to take a unified position was in bad faith because it
was against the advice of APA’s own counsel. The
Plaintiffs rely upon an early draft of LOA 12-05 that
explicitly contemplated participation by both American
and TWA pilots, but was changed by Mr. James. See
Pl. Add’l Facts re: APA ¶ 28. An email of Mr. James
explained he was at that time “of the view that it is
APA v. AA and we get an institutional position rather
than invite the AA pilots to beat up on the TWA pilots
without the latter being able to threaten to re-open the
seniority list.” See Pl. Add’l Facts re: APA ¶ 28 (quoting
Pl. Ex. 8, James email [ECF No. 124-8]). When appearing before the Court to obtain approval of LOA 12-05,
Mr. James also stated that “‘we have the legal duty to
go in and make the presentation on what ought to happen and the company will make its presentation. …’”
Pl. Add’l Facts re: APA ¶ 30 (quoting Pl. Ex. 15, Hr’g
Tr. 32:1-3, Dec. 19, 2012 [ECF No. 124-15]). But taking
all these facts to be true, APA’s failure to present a
“unified position” does not qualify as bad faith, which
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would require that APA have engaged in “fraud, dishonesty, [or] other intentionally misleading conduct …
with an improper intent, purpose, or motive.” See
Vaughn, 604 F.3d at 709-10 (internal citations and
quotations omitted).16 As explained above, the undisputed facts demonstrate the futility of insisting upon a
unified pilots position here. Under such circumstances,
it cannot be said that APA’s actions were in bad faith.
The Plaintiffs also argue that APA’s action was in
bad faith because it was taken to protect APA. The
Plaintiffs cite to an email in which APA general
counsel Steven Hoffman observed that APA’s potential
liability would be diminished by allowing both the
legacy TWA pilots and American Pilots to present their
proposals directly to the arbitrators. See Resp. to APA
SMF ¶ 83 (quoting Pl. Ex. 8, Hoffman email [ECF No.
124-8]). But while Mr. Hoffman noted that a “unified
position” would be vulnerable to challenge by any pilots
dissatisfied with the results of the arbitration, id., such
statements do not reflect an “improper intent, purpose,
or motive” of APA in how the arbitration was structured. Rather, Mr. Hoffman concluded that this structure
protected APA precisely because it fulfilled APA’s duty
to ensure that all groups, including the legacy TWA
pilots, had adequate representation at the arbitration.
See Pl. Ex. 8, Hoffman email [ECF No. 124-8] (“If
16
Mr. James’ statements and actions early in the arbitration
process are easily explained by Mr. James himself: while he had
once hoped the two groups could come together on a unified
position, he eventually realized that such a hope was unfounded.
See APA Ex. 26 (James Depo. Tr. 29:9-24, June 14, 2016) [ECF No.
128-7].
APP-101
incumbent APA and TWA people did their own presentations to the arbitrator, the decision would be on the
arbitrator, not us.”);17see also Vaughn, 604 F.3d at 710;
Horner, 2017 U.S. Dist. LEXIS 202806, 2017 WL
6313943, at *9 (“[P]laintiffs do not assert facts that
would support a reasonable finding of the ‘substantially egregious’ conduct required to infer that APA’s
neutrality was motivated by a desire to harm APA’s
membership … [w]ithout additional evidence of deceitful, malicious, or improper acts, a reasonable jury could
not find that APA’s neutrality and submission of grievances breached the duty of fair representation.”) (internal citations and quotations omitted).
Last but not least, the Plaintiffs’ claim about lack of
a unified position fails the causation requirement. This
is because—even considering all inferences in favor of
the Plaintiffs—a reasonable jury could not conclude
that a “unified position” would have achieved a more
favorable outcome from the arbitrators. Even if APA
had wholly adopted the position that was advocated by
the TWA Pilots Committee, that position was ultimately rejected by the arbitrators as violating LOA
17
This is also consistent with the public position that APA
had taken that the two committee structure ensured full participation of all constituents and fulfilled APA’s legal duties. See APA
Ex. 22-B (APA article regarding Supplement CC Interest Arbitration: Agreement and Procedure, dated Feb. 10, 2013) [ECF 128-3]
(“APA has the legal duty to fairly represent all pilots subject to the
provisions of the CBA. Consequently, APA is providing both the
former TWA pilots and the pre-merger AA pilots with an opportunity to make separate cases regarding proposed modifications to
the CBA. APA is also providing both groups with equal union
resources to prepare and present those cases.”).
APP-102
12-05 because it did not constitute “preferential flying
rights,” but rather “effectively modif[ied] the position
of the TWA pilots on the system seniority list (at least
for some purposes).” Resp. to APA SMF ¶ 122 (quoting
APA Ex. 9-H, Arbitrators’ Panel Suggestion Regarding
Post-Hearing Submissions at 3 [ECF No. 111-12]).
Notably, the arbitrators unanimously agreed on this
issue with American, an independent participant acting consistent with its rights under LOA 12-05 and the
Protocol Agreement. Taking the Plaintiffs’ allegations
at face value, therefore, their interests were not hampered by having their own separate representation and
right to present their views unfiltered at the arbitration, rather than proceeding through a unified pilots
position.
2. Allegation that APA Failed to Enforce LOA 12-05
The Plaintiffs also allege that APA failed to enforce
the intent of LOA 12-05, which the Plaintiffs maintain
was to “replicate” the protections of Supplement CC.
But this exact same argument was previously presented by the Plaintiffs and rejected in a detailed decision
previously issued by this Court in this case. See Krakowski, 536 B.R. at 370-71. In ruling, the Court observed that “it would be impossible to make an exact copy
or duplicate of those St. Louis protections”, id. at 371,
given that American intended to close the St. Louis
base. In a ruling that echoes the thinking of the arbitrators on the same issue, this Court rejected the
Plaintiffs’ attempt to shoehorn the concept of “repli-
APP-103
cate” into LOA 12-05. See id.18 Instead, the Court
concluded that LOA 12-05 instead provided for an arbitration procedure to arrive at substitute job protections. See id. at 370-71 (“The intent of LOA 12-05 was
clear from its written terms: ‘The Company and the
APA agree that a dispute resolution procedure is necessary to determine what alternative contractual rights
should be provided to TWA Pilots as a result of the loss
of flying opportunities due to termination of Supplement CC and the closing of the STL base.’”) (emphasis
in original).19 This ruling is the law of the case and cannot be revisited here. See Sagendorf–Teal v. County of
Rensselaer, 100 F.3d 270, 277 (2d Cir. 1996) (law of the
case doctrine “posits that if a court decides a rule of
law, that decision should continue to govern in subse-
18
Indeed, when the Plaintiffs subsequently sought discovery
on the issue, the Court rejected the request, reiterating that the
issue was “off the table.” APA Ex. 24 (Hr’g Tr. at 64-66, 69-70, Feb.
16, 2016 [ECF No. 128-5]). The Court considers the Plaintiffs’
repeated repackaging of its arguments on this same issue to
border on a violation of Fed. R. Civ. P. 11.
19
The Plaintiffs argue that in its prior decision on the issue,
the Court did not explicitly strike Paragraph 48(I) of the
Complaint, which uses the word “replicate.” But that paragraph
of the Complaint also references arguments other than replicate.
See Compl. ¶ 48(I) (discussing APA taking a position through the
AA Pilots Committee that “was designed to take jobs from the
former TWA pilots to the benefit of the legacy American pilots …”).
It is clear from this Court’s prior decision that Paragraph 48(I)
was preserved only to the extent that it did not relate to the “replicate” argument. See Krakowski, 536 B.R. at 371 (“[T]he Court
categorically rejects Plaintiffs’ reliance on the term ‘replicate’ as
an independent basis for any rights asserted by the Plaintiffs.”).
APP-104
quent stages of the same case.”) (internal citations and
quotations omitted); 18B Charles Alan Wright &
Arthur R. Miller, Fed. Prac. & Proc. Juris. § 4478 (2d
ed. April 2018 Update) (“Law-of-the-case rules have
developed to maintain consistency and avoid reconsideration of matters once decided during the course of
a single continuing lawsuit.”).
The Plaintiffs’ position is doomed for another
reason: APA took no position on the “replicate” issue at
the arbitration, choosing instead to remain neutral and
allow both sides to present their positions without
interference. As previously discussed, and further
expanded on below, APA’s neutrality eviscerates any
duty of fair representation claim on this issue as the
TWA Pilots Committee was given free rein to advocate
extensively for the “replicate” standard during the
arbitration. See Resp. to APA SMF ¶¶ 104-09; see also
APA Ex. 1-F (LOA 12-05 Merits Opinion at 5 [ECF
[*47] No. 92-9]) (arbitrators rejecting TWA Pilots
Committee’s replicate argument).20
20
After the parties finished briefing these motions for
summary judgment, the Plaintiffs filed a motion to amend the
Complaint to add claims relating to APA’s lack of a “unified
position” and failure to “replicate” Supplement CC. [ECF No. 134].
It appears that the motion was filed in response to the Defendants’
argument that the Plaintiffs improperly raised the lack of a
unified
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