Petition for Writ of Certiorari — Air Line Stewards & Stewardesses Ass'n Local 550 v. American Airlines, Inc.

Supreme Court brief1986

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What actually matters in this document.

Text

: NOV 12 1985

JOSEPH F. SPANION,

BO Ary" S

Michael B. Roche

(Counsel of Record)

Jeffrey B. Lieberman

SCHUYLER, ROCHE & ZWIRNER

3100 Prudential Plaza

Chicago, Illinois 60601

(312) 565-2400

Attorneys for Petitioners

QUESTIONS PRESENTED

l. After reversing the district

court's decision that certain terms of its

own class action settlement agreement were

clear and unambiguous, did the court of

appeals vi »dlate this Court's ruling in

Anderson v. City of Bessemer by reviewing

incomplete extrinsic evidence in the record

de novo and then deciding previously unde-

cided issues of fact with finality?

2. After the district court had re-

viewed and approved a class action settle-

ment agreement pursuant to Fed.R.Civ.P.

23(e) and ordered specific performance based

upon its interpretation of that agreement,

did the court of appeals err by ignoring the

district court's interpretation and substi-

tuting its own interpretation based upon

extrinsic evidence not considered by the

district court?

3. After reversing the district

court's grant of specific performance, did

the court of appeals err by not remanding

but rather proceeding to adjudicate the

pet.tioners' alternative motion on the mer-

its -- even though the district court had

never considered this motion and even though

the court of appeals' decision required a

determination of numerous disputed issues of

fact on an incomplete evidentiary record?

THE PARTIES

The petitioners represent those members

of a certified class of stewardesses who had

been terminated from their employment with

the respondent because they had become preg-

mant and given birth to a child. Petition-

ers were subsequently rehired by the respon-

dent pursuant to a written settlement agree-

ment previously entered in this cause and

approved by the district court pursuant to

Fed.R.Civ.P. 23(e). The certified class

representative is Darlene Burmeister (for-

merly Darlene Preston). The respondent is

American Airlines, Inc.

ead

—

TABLE OF CONTENTS

QUESTIONS PRESENTED... ..cceeeeees eee

THE ft aes ee ee ee see 8 @

TABLE OF CONTENTS.......e08. ee eseccs

TABLE OF CASES AND AUTHORITIES......

OPINIONS BELOW... cccccccccccccccces

JURISDICTIONAL STATEMENT...... ecceces

STATUTE INVOLVED... cc. ceccccscncccecs

STATEMENT OF THE CASE... ..cwceccceen

Genesis of the Litigation......

The Entry of Summary Judgment

Against AMETican....cecceeeeees

The 1977 Settlement Agreement..

The Returning Mothers Were

Denied Benefits Under American's

Retirement Pac 606860068666 8b6

The Returning Mothers' Motion

In The District Court..........

The District Court's Order

of May Dt tttecthotebannes ch eeoe

The Decision Of The Court

OF Appeals... ccs eeeseesvessees

p\ es, JP Se ee *eeeeeees

II.

IIt.

This Court Should Review The

Decision Of The Court Of Appeais

Because It Improperly Decided

Issues Of Fact De Novo And On

The Basis Of An Incomplete

Evidentiary Record...... TEETTTTTTT

The Court Of Appeals'

Decision Is In Direct

Conflict With The Recent

Decision Of This Court

In Anderson v. City Of

0 ere see

This Court Should Exercise

Its Supervisory Power Here

Because The Court Of Appeals

Has Dramatically Departed

From The Accepted And

Usual Course Of Judicial

PFOCCeGINGS.... cee reeeeseveees

In Order To Insure The Finality

Of Class Action Settlements, This

Court Should Review This Case And

Establish The Appropriate Standard

Of Review Which Courts Of Appeal

Should Apply In Reviewing A

District Court's Interpretation

Of Its Own Class Action

SQCCLOMONE. ccccccccccecccessccccces

This Court Should Review The

Decision Of The Court Of Appeals

Because It Improperly Adjudicated

The Returning Mothers' Alternative

Motion TO Vacate... ccecereceeeeeeces

A. The Court Of Appeais'

Adjudication Of Petitioners’

Alternative Motion To

Vacate On Its Merits

Conflicts With Several

Decisions Of This Court...... =

B. The Court Of Appeais'

Adjudication Of Petitioners'

Alternative Motion To Vacate

On Its Merits Directly

Conflicts With A Decision

Of The Court Of Appeals For

The Second Circuit On The

Very Same [SSUC... cee eeeeeeeee 38

c. This Court Should Exercise

Its Supervisory Power Here

Because The Court Of Appeals

Has Significantly Departed

From The Accepted And

Usual Course Of Judicial

ProceedingS....ceseeeeeseeseeese 40

COPPER s COCO SEE OESESEEOOE ELE OEESSE 42

APPENDIX

Opinion of the United States

Court of Appeals for the

Seventh Circuit dated

JUNE 7, LHBS.ccccccccccccescsseccsee La

Memorandum Opinion and Order

of the United States District

Court for the Northern District

of Illinois, Eastern Division

dated May 20, 1983... cceeeessseeee 248

Order of the United States

Court of Appeals for the

Seventh Circuit denying re-

nearing dated August 15, 1985...... 29a

| cian aia ia

TABLE OF CASES AND AUTHORITIES

Cases

Aetna Casualty & Surety Co.

v. Flowers, 330 U.S. 4164 (1947)......... 37,39

Air Line Stewards and Stewardesses

Association, Local 550 v. American

Airlines, Inc., 490 F.2d 636 (7th

Cir. 1973) cert. denied sub nom,

Air Line Stewards and Stewardesses

Association, Local 550 v. Zipes,

SiG Uses GES TAP TE) ccccrccesscsccceces o> A

Anderson v. City of Bessemer,

eas U.S. ONS 105 ScGee 1504 (APES) ccsccvce 22-26

Barnes v. St. Catherine's

Hospital, 563 F.2d 324

(7th Cat < St yeeererere re eeesteee#eee?## eeee#eeee#ee#f8# ° 26

Continental Group, Inc. v.

Lincoln Land Moving ad

Storage, Inc., 710 F._d 368

(7tH Civ. 1983). cccccccscccevecccseseser 26

Dandridge v. Williams,

397 U.S. 471 CEPI dc ce ertecosccceeseseeeee 37,39

Denofre v. Transportation

Insurance Rating Bureau,

Se FPeae SF (7EM Cif. 1976) .cccccceses oo 26

Leonteos v. Haase, 410 F.2d 633

(7th Cir. 1969)... ceceeeseeees se eeees ~- 26

Securities Investor Protection

Corp. v. Morgan, Kennedy & Co.,

ree. 5 SES Cc ee B2E6 £268 GEE. AS76)ccccese

ewe.

—

Wyant v. J. i. Case Company,

LmC., 633 F.2d i254

(7th Cie. AFSO dnccccweccceectiseneccesene 26

Zenith Radio Corp. v. Hazeltine

ROGBPGD., ING. e 399 Ucde LUG (LIES) ccces 23

Other Authorities

Fed R.Civ.P. 23(S)cccccccccees cocccccccs PASSIN

2B U.S Cw SLASS(1L) co vceccccecccscccccsecss 9

2B U.S.Cw SLIZL. nc ccc cccccccsvecsvesvccses ll

No.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1985

AIR LINE STEWARDS AND STEWARDESSES

ASSOCIATION, Local 550, TWU, AFL-CIO,

et al.

Petitioners,

VS.

AMERICAN AIRLINES, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioners respectfully pray that a Writ

of Certiorari issue to the United States Court

of Appeals for the Seventh Circuit to review

its judgment and opinion entered in this case

on June 7, 1985.

aan

mt<<

OPINIONS BELOW

The opinion of the court of appeals is

reported at 763 F.2d 875 (7th Cir. 1985) and is

reproduced in the appendix hereto, at pages la-

23a. The order of the court of appeals denying

rehearing is unreported, but is reproduced in

the appendix hereto, at page 29a. The district

court's opinion is unreported, but is repro-

duced in the appendix hereto, at pages 24a-28a.

JURISDICTIONAL STATEMENT

The court of appeals entered its opinion

in this case on June 7, 1985. A timely Peti-

tion for Rehearing and Suggestion for Rehearing

In Banc was denied on August 15, 1985. This

Court has jurisdiction to review the decision

of the court.of appeals by writ of certiorari

under 28 U.S.C. §1254(1).

ti ll

STATUTE INVOLVED

Fed.R.Civ.P. 23(e):

“Dismissal or Compromise.: A class

action shall not be dismissed or

compromised without the approval of

the court, and notice of the pro-

posed dismissal or coxnpromise shall

be given to all members of the

class in such a manner as the court

directs."

STATEMENT OF THE CASE

Genesis of the Litigation

In 1970, the Airline Stewards and Ste-

wardesses Association, Local 550 ("“ALSSA")

commenced this action by filing a Complaint

against the respondent, American Airlines,

Inc. ("American") in the United States Dis-

trict Court for the Northern District of

Illinois, Eastern Division, Case No. 70 C

2069. The Complaint alleged that American's

employment policy of terminating the empioy-

ment of stewardesses who became pregnant and

gave birth to a child (the “Injured Class")

violated Title VII of the Civil Rights Act

of 1964 (42 U.S.C. §2000(e)-2) (the "1970

-10-

case"). The jurisdiction of the district

court was based on 28 U.S.C. §1331.

On March 17, 1972, the late Judge Sam

Perry, over the objection of several members

of the Injured Class, approved a settlement

agreement between ALSSA and American in the

1970 case (the "1972 Agreement“). The 1972

Agreement provided for the re-hiring cf mem-

bers of the Injured Class but did not pro-

vide for either back-pay or full retroactive

credit for length of service or seniority.

In 1973, the Court of Appeals for the

Seventh Circuit reversed Judge Perry's

approval of the 1972 Agreement on the ground

that ALSSA was not an adequate representa-

tive of the Injured Class.*

* Air Line Stewards and Stewardesses Associa-

tion, Local OQ v. American Airlines, inc., 490 F.2d

36, 0-642 (7th Cir. 1973) cert. denied sub nom, Air

Line Stewards and Stewardesses Association, Local 550

v. Zipes, 416 U.S. 993 (1974).

-ii-

In 1972, plaintiff, Darlene Preston

(now Darlene Burmeister), a member of the

Injured Class in the 1970 case, commenced a

Class action suit against American on sub-

stantially the same grounds as the 1970 case

(the “1972 case"). In 1974, Darlene Bur-

meister also commenced a class action suit

against ALSSA alleging that it had violated

Title VII of the Civil Rights Act of 1964

("the Civil Rights Act") by actively parti-

cipating in American's discrimination

against the Injured Class (the "1974 case").

On October 16, 1974, the district court

certified Darlene Burmeister as an adequate

class representative for a class consisting

of all American stewardesses whose employ-

ment had been terminated between 1965 and

1970 because of their becoming pregnant and

having children (the “Certified Class").

-l12-

The Entry of Summary Judgment

Against American

On November 18, 1974, the 1970, 1972

and 1974 cases were consolidated. On April

28, 1976, the district court, through the

Honorable Judge Frank McGarr, entered sum-

mary judgment in this consolidated action

against American on the issue of liability,

holding that American's employment policy

violated the Civil Rights Act.

The 1977 Settlement Agreement

Pending American's appeal of the dis-

trict court's grant of summary judgment a-

gainst it, on August 3, 1977, the parties

entered into a whitten Settlement Agreement

(the "1977 Agreement"). Under the 1977

Agreement, American agreed, inter alia, to

re-employ all members of the Certified Class

who applied for re-employment. In Section

V(A) of the 1977 Agreement, the parties spe-

cifically agreed that:

-13-

“Each re-employed class member

shall be credited with the amount

of company seniority and length of

service to which she was entitled

at the date on which her employment

was terminated plus company senior-

ity and such length of service for

the entire compensation pericd."*

Notice of the 1977 Agreement (the

"Notice") was approved by the district court

and mailed to all members of the Certified

Class pursuant to Fed.R.Civ.P. 23(e). The

stated purpose of the Notice was to inform

members of the Certified Class of the terms

of the 1977 Agreement and that on October 3,

1977, a hearing would be held to determine

whether the 1977 Agreement should be ap-

proved. In paragraph 2 of the Notice, the

parties described the 1977 Agreement as fol-

lows:

* "Compensation period” is defined in Section I

of the 1977 Agreement as "the period of time which

commenced upon the termination of a class member's

employment and ends on the date on which an order is

entered approving this settlement."

"Each re-employed class member will

be restored to full seniority and

credit for length of service, in-

cluding such seniority and credit

for the time since her employment

was terminated ... The seniority

thus computed will apply for all

purposes ..."

On October 3, 1977, the district court,

again through Judge McGarr, conducted a

hearing on the fairness of the 1977 Agree-

ment. On October 4, 1977, Judge McGarr

issued an order approving the 1977 Agreement

and dismissing the consolidated action. At

least 120 members of the Certified Class,

including Darlene Burmeister (hereinafter

collectively referred to as the “Returning

Mothers"), were later re-employed by Ameri-

can under the terms and conditions of the

1977 Agreement.

The Returning Mothers Were

Denied Benefits Under

American's Retirement Plan

At all times since their re-employment,

it is undisputed that, for purposes for cal-

culating their qualifications and benefits

-15-

sa2

under American's Retirement Benefit Plan

(the “Retirement Plan“), American has re-

fused to grant the Returning Mothers "“cre-

dited service"* for their length of service

with American prior to the date on which

their employment was illegally terminated

and during the compensation period.

The Returning Mothers'

Motion In The District Court

On December 28, 1982, the Returning

Mothers filed in the district court their

"Motion to Order Specific Performance of

Settlement Agreement, or in the Alternative,

to Vacate Order Dismissing Cases" (the

"Motion"). The Motion requested the dis-

trict court: (1) to grant the Returning

Mothers retroactive credit for their length

of service with American for purposes of

* "Credited service" is the operative term used

in the Retirement Plan and is defined essentially as

the total length of employment with American for which

each participating employee receives corresponding

retirement benefits.

att.

sk pan ; Ay

ant) a ei

a3 cow eee

alld

qualifying, vesting and calculating their

benefits under the Retirement Plan as pro-

vided in the 1977 Agreement; or, in the

alternative, (2) to vacate the Order dis-

missing the consolidated action because, in

violation of the due process clause and

Fed.R.Civ.P. 23(e), the Notice mislead the

Returning Mothers as to the actual benefits

they were to receive under the 1977 Agree-

ment.

American answered the Motion by filing

its "Response to Preston Motion for Specific

Performance" in which American admitted all

the material factual allegations of the

Motion. American simply denied that the

1977 Agreement included retroactive credited

service under the Retirement Plan. There-

after, no discovery was conducted and no

evidentiary hearing was held. Rather, the

Motion was briefed by the parties, each

party primarily contending that the 1977

-l7-

~“

Agreement was clear and unambiguous on its

face and supported its respective position.

The District Court's

Order Of May 20

On May 20, 1983, the district court,

through Judge McGarr, issued a written Memo-

randum Opinion and Order (the “May 20

Order"). The May 20 Order granted the

Motion to the extent it requested specific

performance. The district court did not

pass upon the alternative motion to vacate

and therefore it did not adjudicate any of

the factual or legal issues raised therein.

In granting specific performance, the

district court ordered American to provide

the Returning Mothers with full retroactive

credit for length of service for purposes of

qualifying, vesting and calculating their

benefits under the Retirement Plan. The

district court predicated its decision pri-

Marily on its conclusion that the 1977

Agreement was clear and unambiguous and

-18-

expressly included the retirement benefits

at issue (App., p. 26a). Because the dis-

trict court ruled that the terms of the 1977

Agreement were clear and unambiguous, it did

not review any extrinsic evidence of record

or enter any findings of fact.

The Decision Of The Court Of Appeals

On June 7, 1985, the Court of Appeals

for the Seventh Circuit reversed the May 20

Order (the “June 7 Decision"). In the June

7 Decision, the court of appeals first held

that the district court erred in finding

that the 1977 Agreement was clear and unam-

biguous with respect to retirement benefits

(App., p. 6a). In so holding, the court of

appeals paid no deference whatsoever to

Judge McGarr's interpretation of the 1977

Agreement. Rather, the court of appeals

ignored Judge McGarr's interpretation and

held that the 1977 Agreement was ambiguous

and that an examination of extrinsic evi-

-19-

iil

dence was necessary to ascertain its true

meaning (Id.).

Instead of stopping there and remanding

the case to the district court for an evi-

dentiary hearing, the court of appeals then

embarked on its own detailed and elaborate

examination of the incomplete extrinsic evi-

dence in the record. It did so de novo and

made numerous factual findings to support

its conclusion that the provision in the

1977 Agreement for "credited with ... length

of service" did not include retroactive

"credited service” under the Retirement Plan

(App., pp. 6a-21a). The court of appeals

also examined the same incomplete extrinsic

evidence de novo and again made numerous

factual findings to support its conclusion

that the Returning Mothers' alternative

motion to vacate, a motion never considered

by the district court, should be denied on

its factual merits (App., pp. 2la-22a).

-20-

only reversed the May 20 Order but it also

Accordingly, the court of appeals not

remanded the cause to the district court

with a direction essentially to enter judg-

ment on behalf of American.*

ARGUMENT

I. This Court Should Review The Deci-

sion Of The Court Of Appeals Be-

cause It Improperly Decided Issues

Of Fact De Novo And On The Basis Of

An Incomplete Evidentiary Record.

The court of appeals held that the dis-—

trict court erred in finding that the dis-

puted language in the 1977 Agreement was

clear and unambiguous (App., p. 6a). In-

stead of stopping there and remanding the

case to the district court for an eviden-

tiary hearing, the court of appeals pro-

ceeded to make its own factual determina-

tions de novo and concluded that the 1977

*Specifically, the Court of Appeals reversed and

remanded with directions to the district court to deny

the motion for specific performance and to deny the

alternative motion to vacate (App., p. 23a).

alts

bes

Agreement did not entitle the Returning

Mothers to receive retroactive credited ser-

vice under the Retirement Plan. The June 7

Decision should be reviewed by this Court

because: (a) it is in direct conflict with

applicable decisions of this Court; and (b)

it represents such a dramatic departure from

the accepted and usual course of judicial

proceedings that the exercise of this

Court's power of supervision is mandated.

A. The Court Of Appeals' Decision Is

In Direct Conflict With The

Recent Decision Of This Court In

Anderson v. City Of Bessemer.

This Court recently defined the limited

scope of an appellate court's power of re-

view in Anderson v. City of Bessemer, _

U.S. __, 105 S.Ct. 1504 (1985). Ia review-

ing the extrinsic evidence of record de

novo, the court of appeals completely disre-

garded this Court's decision in Anderson.

In Anderson, after a bench trial, the

district court had found that the plaintiff

-22-

Anderson had been denied a job by the defen-

dant City on account of her sex. The Court

of Appeals for the Fourtn Circuit re-

versed. It did so primarily on the basis of

its own review of the evidence and its own

factual determinations based on that re-

view. This Court held that this type of

review by the court of appeals was improper

and reversed.

The lynchpin of this Court's decision

was its finding that the Fourth Circuit im-

properly exceeded its power in conducting

its independent review of the evidence of

rés.e<d. In language directly applicable

here, this Court stated as follows:

""(Ajppellate courts must- con-

Stantly have in mind that their

function is not to decide “actual

issues de novo.' Zenith Radio

Corp. v. Hazeltine Research, Inc.,

5 U.S. 100, 123 (1969)." 105

S.Ct. at 1512.

In the June 7 Decision, the court of

appeals recognized the decision in Anderson,

-23-

but attempted to skirt its holding by inef-

fectively attempting to distinguish the in-

stant case (App., p. 7a, n. 5). The court

of appeals stated that this Court's admoni-

tion in Anderson was not applicable here

because the district court in the instant

case never made any findings of fact. Asa

result, the court of appeals improperly

concluded that it was free to conduct its

own review of the evidence de novo and,

based on that review, make its own findings

of fact.

The purported distinction between the

Anderson case and the instant case is really

mo distinction at all or, in any event, is a

distinction without any substantive differ-

ence. If the June 7 Decision is permitted

to stand, it will effectively turn this

Court's prior decision in Anderson literally

on its head, and seriously undermine the

future role of the trial judge as the trier

of fact.

-24-

The rationale underlying this Court's

holding in Anderson was cogently enunciated

for the Court by Justice White who stated:

“The trial judge's major role is

the determination of fact, and with

experience in fulfilling that role

comes expertise." 105 S.Ct. at

1512.

Accordingly, the main thrust of this Court's

decision in Anderson was that even where a

court of appeals appears to be in as good a

position as the district court to make fac-

tual determinations, it should still refrain

from doing so. Plainly, the experience and

expertise which lies in the district court

is not to be usurped.

Indeed, the result reached in Anderson

is even more compelling here -- where the

court of appeals did not, as in Anderson,

simply disagree with the trial judge's find-

ings, but pre-empted the trial judge's func-

tion by entering its own findings and there-

by precluding the trial judge from ever

-25-

' making any findings of fact. In the oro-

cess, the June 7 Decision has stripped the

district court of its orimary function in

direct contravention of this Court's deci-

sion in Anderson.

B. This Court Should Exercise Its

Supervisory Power Here Because

The Court of Appeals Has

Dramatically Departed From The

Accepted And Usual Course Of

Judicial Proceedings.

No principle of appeliate review is

more firmly established than the principle

that an appellate court will not examine

evidence in the record de novo. As noted

above, this principle was recently

reaffirmed by this Court in Anderson v. City

of Bessemer.* The June 7 Decision directly

* Indeed, the Court of Appeals for the Seventh

Circuit had, previous to its decision in this case,

also consistently adhered to this legal maxim. &.g.,

Continental Group, Inc. v. Lincoln Land Moving and

Storage, Inc., 710 F.2d 368, 373 (7th Cir. 1983);

Wyant v. J. I. Case Company, Inc., 633 F.2d 1254, 1256

(7th Cir. 1980); Barnes v. St. Catherine's Hospital,

563 F.2d 324, 329 (7th Cir. 1977); Denofre v. Trans-

portation Insurance Rating 3ureau, 532 F.2d +3 (7th

Cir. 1976); Leonteos v. Haase, 410 F.2d 633, 037 (7th

Cir. !969).

-26-

contravened this Court's holding in

Anderson, and in the process, so radically

departed from the accepted and usual course

of appellate procedure that this Court

should exercise its supervisory power to

correct the untold damage caused thereby.

After concluding that the 1977 Agree-

ment was ambiguous and that an interpreta-

tion of the provisions at issue involved

questions of fact, the court of appeals

should have remanded the cause to the dis-

trict court with instructions to conduct an

evidentiary hearing and enter findings of

fact. But the court of appeals refused to

do so and proceeded to violate the mandate

of Anderson by conducting its own de novo

review of the facts of record and by reach-

ing its own conclusion as to what the par-

ties intended in the 1977 Agreement.

Moreover, the court of appeals signifi-

cantly compounded these errors by making its

-27-

—

‘

de novo review of the evidence on the basis

of a totally incomplete evidentiary

record. Because the parties had each main-

tained in the district court that the mean-

ing of the language at issue was clear and

unambiguous, neither party initiated dis-

covery; no testimony was adduced; and no

documents were produced. In addition, at no

time did either party represent or in any

manner indicate to the district court, or to

the court of appeals, that the limited evi-

dence in the record (i.e., certain limited

documents and affidavits attached to the

pleadings) constituted all che relevant

extrinsic evidence necessary for deciding

the factual issues present in the Motion.

Nevertheless, the court of appeals made the

wholly unwarranted assumption, without any

Support in the record whatsoever, that "the

parties ... have submitted to us all the ex-

trinsic evidence that they have" (App., p.

6a) (emphasis added).

-28-

ane

Ae ra Se baa: :

ie aaron ree ia

Bo HE Hn

7 7

; The June 7 Decision, if allowed to

| stand, precludes the Returning Mothers from

adducing additional evidence probative of

the intention of the parties and dissecting

what the court of appeals has now found to

be ambiguous language in §V(A) of the 1977

Agreement. We submit that a wealth of ex-

trinsic evidence potentially exists relevant

to the issue (now raised by the court of

appeals) as to what the parties intended by

the insertion of the disputed language in

§V(A) of the 1977 Agreement. Indeed, the

court of appeals itself conceded this fact

when it stated that:

"In principle, we could consider

other forms of extrinsic evidence

as well, but we have found nothing

useful in the record." (App., p.

8a, n. 7).

Finally, the process employed by the

court of appeals in reviewing the extrinsic

evidence of record was, by necessity, impre-

cise and conjectural. For example, many of

-29-

Loe) ane Foe OP

the factual determinations which it made

were predicated upon voids in the eviden-

tiary record -- each one of which was con-

strued against the Returning Mothers. As an

illustration, the exact import of the term

“credited with ... length of service" in

§V(A) was the key issue to be decided. Yet,

the court of appeals could not, based on the

limited evidence of record before it, dif-

ferentiate between the term “length of ser-

vice" and the terms "company seniority" and

“occupational seniority" as those terms ap-

pear in §V of the 1977 Agreement (App., pp.

lla-l3a). Further, since the court of ap-

peals was unable to ascribe any definitive

meaning to the term "length of service," it

openly admitted "we are puzzled as to its

Significance" (App., p. 13a). Since the

meaning of this term was the central issue

in American's appeal, it should not have

been decided out of such confusion, baffle-

ment or “puzzlement."

-30-

2 Melt a PE ihe MS stl F >.

The court of appeais aiso conceded that

while the parties must have “intended for

that credit [for length of service] to have

beneficial consequences of some sort for the

re-employed class members," the term

“appears to be an idle wheel" (Id.). None-

theless, despite its admitted perplexity

over what the parties intended by the use of

this term, the court of appeals proceeded to

conclude definitively and with finality that

the term did not include "credited service"

within the meaning of American's Retirement

Plan.

The court of appeals' analysis of the

limited evidence of record brings into sharp

focus the impropriety of its de novo review

of the incomplete record before it. The Re-

turning Mothers never had an opportunity to

conduct discovery or to present evidence at

a hearing. Plainly, if discovery were per-

mitted and an evidentiary hearing conducted,

-3l1-

these crucial issues could be ‘fully and

fairly explored and a logical and well-

reasoned interpretation of them could be

made. As it stands now, in its rush to

finality, the court of appeals improperly

construed any doubt as to the meaning and

significance of the disputed language in the

1977 Agreement against the Returning

Mothers.

To summarize, the court of appeals not

only made factual findings de novo in direct

contravention of the mandate of this Court,

but it also made these findings on the basis

of an incomplete and entirely undeveloped

evidentiary record. This is simply too

Slender a reed to support a conclusion that

deprives many women of significant employ-

ment benefits.* Under these circumstances,

* american estimated that it would presently

cost approximately $850,000 to fund the retirement

benerits actuarially attributable to the credits for

length of service sought dy the Returning Mothers

(Apo., p. 18). Thus, although it cannot de stated

with exact certainty, at issue nere are millions of

dollars in future pension benefits.

-32-

aie

Tie

iat

-f

it is imperative that this Court grant re-

view of the decision of the Court of

Appeals.

II. In Order To Insure The Finality Of

Class Action Settlements, This

Court Should Review This Case And

Establish The Appropriate Standard

Of Review Which Courts Of Appeal

Should Apply In Reviewing A Dis-

trict Court's Interpretation Of Its

Own Class Action Settlement.

Judge McGarr had initially approved the

1977 Agreement pursuant to Fed.R.Civ.P.

23(e). In reversing Judge McGarr's May 20

Order, the court of appeals applied a de

novo standard of review (App., p. 4a) and

rejected outright Judge McGarr's interpreta-

tion of the 1977 Agreement. In the process,

the court of appeals accorded no weight

whatsoever to Judge McGarr's interpretation

-- even though he had reviewed the 1977

Agreement and had supervised its approval

and implementation.

Given the fact that federal dockets are

crowded with numerous class actions and

-33-

at GREE TEN SEY bn M

BS Nebel ot

;

tad

{

given the strong pubdlic and judicial policy

of encouraging settlements of such suits, it

is crucial that the finality of class action

settlements be established by this Court

through its definition of the proper stan-

dard governing courts of appeal in their

review of a district court's interpretation

of its own class action settlement.

Lest it be forgotten, it was Judge

McGarr who, as he was required to do under

Fed.R.Civ.P. 23(e), reviewed, assessed and

approved the terms of the 1977 Agreement.

Accordingly, who, other than Judge McGarr,

was and is better qualified to ascertain the

true meaning of the 1977 Agreement? We sug-

gest no one. Now that an interpretation of

certain of the terms in the 1977 Agreement

are at issue, the court of appeals should,

at the bare minimum, have given substantial

deference to Judge McGarr's interpretation

of those disputed terms. To hold otherwise,

~34-

| oy

res

cr’

<n)

as the court of appeais plainly did here,

seriously undermines and trivializes the

approval process outlined by Fed.R.Civ.P.

23(e).

Moreover, the interests of judicial

economy are not well served by the June 7

Decision. For, the court of appeals has

effectively undermined the future finality

of class action settlements and, in the

process, encouraged dissident class members

and other objectors (like American) to

appeal from court approved class. action

settlements.

Therefore, this Court should review the

decision of the court of appeals and estab-

lish once and for all the proper standard

which governs the review by courts of appeal

of class action settlements approved under

Fed.R.Civ.P. 23(e).

-35-

ee ety Sy ta en ee zie ae

al ear eel eee s*

i y

ie]

(en

: ‘

a |

an fe

} f

na Porn & i

wwrttrip +o

III. This Court Should Review The Deci-

sion Of The Court Of Apveais Be-

cause It Improperly Adjudicated The

Returning Mothers' Alternative

Motion To Vacate.

The court of appeals not only reversed

the district court's order of specific per-

formance, it also proceeded to adjudicate

the Returning Mothers' alternative motion to

vacate. The court of appeals did so not-

withstanding the following: (a) the district

court had not even considered the alterna-

tive motion to vacate; and (b) adjudication

of the alternative motion to vacate, by

necessity, required a determination of cer-

tain issues of fact.

Review should be granted in this case

because: (a) the decision of the court of

appeals is in direct conflict with appli-

cable decisions of this Court; (b) the deci-

Sion is in conflict with a decision of

another court of appeals on the very same

issue; and (c) the court of appeals has so

-36-

Le IR

nays

4% &

s i

bn ities Aas

far departed from the accepted and usual

course of judicial proceedings that this

Court should exercise its power of super-

vision.

A. The Court Of Appeals' Adjudica-

tion Of The Returning Mothers'

Alternative Motion To Vacate On

The Merits Conflicts With Several

Decisions Of This Court.

In Dandridge v. Williams, 397 U.S. 471,

475 n. 6 (1970) and Aetna Casualty & Surety

Co. v. Flowers, 330 U.S. 464, 468 (1947),

this Court squarely held that a court of

appeals should not consider for review

issues not reached by the lower court. The

court of appeals in the instant case com-

pletely disregarded these decisions by ad-

judicating the Returning Mothers' alterna-

tive motion to vacate on the merits.

As noted above, the district court

granted the Returning Mothers' motion for

specific perfirmance and never reached the

factual and legal issues raised in their

-37-

;

alternative motion to vacate. The court of

appeals reversed the order of specific per-

formance. However, instead of stopping

there and remanding the case to the district

court for an evidentiary hearing and the

entry of findings of fact on the alternative

motion to vacate, the court of appeals pro-

ceeded to adjudicate the merits of that

motion. The court of appeals' action in

this regard was in flagrant contravention of

the mandate of this Court in Dandridge and

Flowers.

B. The Court Of Appeals' Adjudica-

tion Of The Returning Mothers'

Alternative Motion To Vacate On

The Merits Directly Conflicts

With A Decision Of The Court Of

Appeals For The Second Circuit On

The Very Same Issue.

In Securities Investor Protection Corp.

v. Morgan, Kennedy & Co., Inc., 533 F.2d

1314 (2d Cir. 1976), the Court of Appeals

for the Second Circuit refused to consider

on appeal an issue which had not been fully

-38-

‘

adjudicated by the lower court. in language

directly on point here, the Court there held

as follows:

"The Supreme Court has cautioned

against tne consideration, on re-

view, of issues not reached by the

lower court and not adequately

presented in the reviewing tri-

bunal. Dandridge v. Williams, 397

U.S. 471, 475 n. 6 (1970) (parallel

citations omitted]; Aetna Casualty

& Surety Co. v. Flowers, U.S.

464, 468 (1947) (parallel citations

omitted]. Where, as here, there

ta be a need for findings of Fact

ore a decision Can be rendered,

chat caution takes on an added

dimension." S33 F.2d at 1322.

(Emphasis added).

Here, the court of appeals' decision to

deny the motion to vacate was predicated

upon its factual determinations that: (1)

members of the Certified Class were not

mislead by the Notice advising them of the

terms and conditions of the 1977 Agreement;

and (2) no class member other than the class

representative would have objected to the

1977 Agreement if that Notice had stated

that retirement benefits were specifically

-39-

excluded (App., pp. 2la-22a). Cleariy, if

the court of appeals had followed the deci-

sion in Morgan, Kennedy, it would not have

adjudicated the Returning Mothers' alterna-

sive motion to vacate.

Obviously, the Court of Appeals for the

Seventh Circuit and the Cor -t of Appeals for

-he Second Circuit are in direct ccnflict on

this important issue.

C. This Court Should Exercise Its

Supervisory Power Here Secause

The Court of Appeals Has

Significantly Departed From The

Accepted And Usual Course Of

Judicial Proceedings.

Finally, the decision of the court of

appeals represents a radical departure from

the accepted and usual course of judicial

proceedings. As noted above, this Court has

repeatedly held that issues not decided by

the lower court should not be considered by

the reviewing tribunal and appellate courts

should not make factual determinations de

novo. Nevertheless, in adjudicating the

-40-

alternative motion to vacate, the court of

appeals violated both of these fundamental

principles.

In addition, the court of appeals de-

cided these factual issues in an evidentiary

vacuum. The ‘Returning Mothers never had an

opportunity to present evidence that they

were mislead by the Notice and Darlene Bur-

meister, the representative of the Certified

Class, never had a chance to explain fully

the circumstances surrounding the negotia-

tion, execution and interpretation of the

1977 Agreement. Accordingly, unless this

Court grants review in this case, the

Returning Mothers will not only have been

deprived of substantial retirement benefits,

they will have lost them without any eviden-

tiary hearing or any effective right of re-

view. Such a result is unfair, inequitable,

and a violation of the Returning Mothers'

right to due process.

This is a particularly egregious result

since the only basis for the refusal of the

court of appeals to remand the case for a

determination on its merits was its stated

desire to “put the question of retroactive

retirement credits under the settlement

agreement finally to rest" (App., p. 22a, n.

24). Yet, if the June 7 Decision is allowed

to stand, the Returning Mothers will be for-

ever foreclosed from a full and fair hearing

on their right to receive employment bene-

fits worth millions of dollars. The concern

of the court of appeals for judicial

economy, while commendable, cannot justify

the resultant deprivation to the Returning

Mothers of valuable property rights without

any form of hearing.

CONCLUSION

For the reasons stated above, peti-

tioners respectfully request that this Court

either: 1) issue a writ of certiorari to the

=42-

United ‘eeanen Court of Appeals for che

Seventh Circuit to review its decision in

this case; or 2) enter a summary reversal

and remand to the court of appeals with

directions that the case be remanded to the

district court with instructions to permit

discovery, to conduct an evidentiary hearing

and to enter findings of fact with respect

to the issues raised in the motion for spe-

cific performance and in the alternative

motion to vacate.

Respectfully submitted,

Michael B. Roche, one of the

attorneys for petitioners

Michael B. Roche

(Counsel of Record)

Jeffrey B. Lieberman

Schuyler, Roche & Zwirner

3100 Prudential Plaza

Chicago, Illinois 60601

(312) 565-2400.

-43-

Sl |

pal

| du the

Anited States Court of Appeals

For the Seventh Cirrnit

No. 84-1073

Arr LINE STEWARDS AND STEWARDESSES ASSOCIATION,

LOCAL 550, TWU, AFL-CIO, et al.,

Plaintiffs- Appellees,

AMERICAN AIRLINES, INC.,

Defendant- Appellant.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 70 C 2069-—Frank J. McGarr, Chief Judge.

ARGUED OCTOBER 5, 1984—DECIDED JUNE 7, 1985

Before CUMMINGS, Chief Judge, and Woop and

ESCHBACH, Circuit Judges.

ESCHBACH, Circuit Judge. American Airlines appeals

an order of the district court directing it to give retro-

active retirement credit to all flight attendants who have

returned to work in accordance with the provisions of a

1977 settlement agreement, and who desire to participate

in its retirement plan. The district court held that the

settlement agreement requires American Airlines to give

such retroactive retirement credit. We must decide

whether the district court’s interpretation of the settle-

ment agreement is correct. We reverse.

Until October 1970 it was the practice of defen-

dant/appellant American Airlines, Inc. (“American”) to

No. 84-1073

terminate flight attendants who became pregnant. In

1972 plaintiff/appellee Darlene Burmeister (then Pres-

ton), one of the flight attendants terminated, commenced

a class action against American, charging that the prac-

tice violated Title VII of the Civil Rights Act of 1964, 42

U.S.C. § 2000e.' In 1976 the district court entered sum-

mary judgment against American on the issue of liability.

On August 3, 1977, while American’s appeal was pending,

the parties entered into a written settlement agreement

(the “Settlement Agreement”), which provided in essence

that (1) a pro rata share of the remainder of $2,700,000,

after court awards for litigation expenses, costs, and

attorneys’ fees were deducted, would be paid to each class

member; (2) American would re-employ all class members

who applied and met various requirements; and (3) all

returning class members would receive the amount of

company end occupational seniority and credit for length

of service that they would have received if American had

not terminated their employment. The district court

approved the settlement in October 1977 and dismissed

the class action.

On January 3, 1983, Burmeister filed a motion in the

district court seeking specific performance of the Settle-

ment Agreement. In particular, she asked the district

court to direct American to provide retroactive retire-

ment credits to class members re-employed under the

Settlement Agreement. In the alternative, she asked the

court to vacate its order approving the Settlement Agree-

ment, so that the litigation might continue. On May 20,

1983, the district court granted the motion for specific

performance, holding that according to the clear and

‘ We omit parts of the history of the case not essential to the

understanding of this appeal. For further details see Airline

Stewards and Stewardesses Association, Local 550 v. American

Airlines, Inc., 573 F.2d 960 (7th Cir.) (per curiam), cert. denied,

489 U.S. 876 (1978). Though named in the caption, Air Line

Stewards and Stewardeases Association, Local 550, is not a party

in this appeal.

No. 84-1073

unambiguous terms of the agreement, “plaintiff and the

returning class members are entitled to receive any and

all of the benefits they would have received had they not

been discharged by American.” On May 31, 1983, Ameri-

can moved under Rule 59(e) of the Federal Rules of Civil

Procedure for reconsideration of the May 20 order. The

district court denied the motion.

American appeals from the May 20 order of specific

performance and the subsequent denial of its Rule 59(e)

motion. Our disposition of the appeal from the May 20

order renders the second matter moot, and we do not

reach the issues raised in it.

The issue presented to us is whether the Settlement

Agreement requires American to give retroactive retire-

ment credit to class members who returned to work in

accordance with its terms. The parties agree that the

answer hinges on the meaning of the following provision

in section V of the Settlement Agreement, entitled “Se-

niority and Credit for Length of Service”:

A. Each re-employed class member shall be credited

with the amount of company seniority and length of

service to which she was entitled at the date on which

her employment was terminated plus company se-

niority and such length of service for the entire

compensation period [the period between termination

and approval of the Settlement Agreement], except

‘or those periods of time during which she was dis-

abled from working by reason of pregnancy or other-

wise.

Thus we are presente’ with a question of contract inter-

pretation. The inter, ation of settlement agreements is

governed by principles of state law applicable to contracts

generally. See Air Line Stewards and Stewardesses Assoc.,

Lecal 550 v. Trans World Airlines, Inc., 713 F.2d 319, 321

(7th Cir. 1983) (quoting Florida Education Association,

No. 84-1073

Inc. v. Atkinson, 481 F.2d 662, 663 (5th Cir. 1973)). The

Settlement Agreement contains no choice of law clause;

we thus follow the district court in looking to Illinois law

for applicable principles of contract construction.

A. The Ambiguity of the Settlement Agreement

The primary object in construing a contract is to give

effect to the intention of the parties. Schek v. Chicago

Transit Authority, 42 Ill. 2d 362, 364, 247 N.E.2d 886, 888

(1969). The starting point is the Settlement Agreement

itself; if the language of the Settlement Agreement

clearly and unambiguously determines an answer to the

question at issue, then the inquiry is over. See J.R.

Watkins Co. v. Salyers, 384 Ill. 369, 373, 51 N.E.2d 574, 576

(1943). Whether a contract is ambiguous is a conclusion of

law, reviewed de novo. National Tea Co. v. American

National Bank & Trust Co., 100 Ill. App. 3d 1046, 1649, 427

N.E.2d 806, 808 (1981). If the trial court holds that the

contract is unambiguous, it must then go on to declare the

meaning, and its declaration is likewise a conclusion of

law, reviewed de novo. See Hagerty, Lockenvitz, Ginzkey &

Associates v. Ginzkey, 85 Ill. App. 3d 640, 641, 406 N.E.2d

1145, 1146 (1980). But if the trial court holds that the

contract is ambiguous, the meaning becomes a question of

fact to be submitted to the trier of fact. Jd. at 642, 406

N.E.2d at 1146. The trier of fact considers not only the

language of the contract but also any extrinsic or parol

evidence presented by the parties. See Fox v. Inter-State

Assurance Co., 84 Ill. App. 3d 512, 515, 405 N.E.2d 873, 876

(1980). Its determination is a finding of fact and is

reviewed as such.

In this case the district court held that the Settlement

Agreement unambiguously provides retroactive retire-:

ment credit to returning class members; under the prin-

ciples just outlined, our review of this conclusion is de

novo. Reading section V A in the context of the entire

agreement, as we must, Martindell v. Lake Shore National

Bank, 15 Ill. 2d 272, 283, 154 N.E.2d 683, 689 (1958), we

find that we are unable to determine solely from the

No. 84-1073

language of the Settlement Agreement whether section V

A is intended to grant such credits. It does net expressiy

mention retroactive retirement credit at all. Credit for

company seniority and length of service may include

retroactive retirement credit by implication, but we can-

not ascertain this from section V A or any other provision

of the Settlement Agreement.’ Indeed, while it is clear

that the parties intended the express grant of company

seniority and credit for length of service to have beneficial

consequences for the re-employed class members, we cs n-

not determine from the face of the agreement what any

of those beneficial consequences might be. The terms

“company seniority” and “length of service” are nov

defined in the Settlement Agreement, either expressly or

by reference to another document. No documents are

incorporated by reference into the Settlement Agree-

ment. No clause in the Settlement Agreement identifies

or defines the specific benefits that are to flow from the

grant of company seniority and credit for length of

service. The language of section V A is compatible with an

intention to grant retroactive retirement credit and also

compatible with an intention not to grant it. Neither

intention is so clearly favored by the language that we can

say as a matter of law that one and not the other is

embodied in the Settlement Agreement.’

* Section III of the Settlement Agreement outlines the struc-

ture of the entire settlement; later sections fill in details.

Section III C says: “All re-employed class members shall have, be

credited with and enjoy the amount of Seniority and Credit for

Length of Service as provided in Section V hereof.” This

provision, which refers to section V for details, sheds no addi-

tional light on the meaning of section V with respect to the

question at issue.

* Burmeister argues earnestly that we can determine from the

clear and unambiguous language of the Settlement Agreement

itself, without reference to any extrinsic evidence, that credit

for length of service means Credited Service, a defined term of

(Footnote continued on following page)

No. 84-1073

We therefore hold that the district court erred in

concluding as a matter of law that the Settlement Agree-

ment unambiguously awards retroactive retirement cred-

it to returning class members. The Settlement Agree-

ment is ambiguous, and its meaning is a question of fact.

Consequently extrinsic evidence may, and indeed must, be

considered in determining its meaning.‘

If w» were to follow the general rule, we would end

our opinion at this point and remand the case for findings

of fact. There are, however, strong reasons for not

following the general rule in this case. The parties have

thoroughly briefed the issue before us and have submitted

to us all the extrinsic evidence that they have. The

evidence is entirely documentary; no determinations of

the credibility of witnesses are required. We are in as

good a position to evaluate this evidence as the district

court. Our own survey of the evidence persuades us that it

* continued

American’s Retirement Benefit Plan. See infra pt. II B (iii).

But without consulting the Retirement Benefit Plan we have no

way of knowing that the term “Credited Service” occurs in it, or

what the term means, or whether a grant of retroactive Credit-

ed Service would amount to a grant of retroactive retirement

credit. Burmeister’s own argument thus requires us to consider

some extrinsic evidence.

‘ The Settlement Agreement contains an exclusivity clause as

section XII, which reads as follows:

Nothing contained in any other agreement or writing

and no right or obligation which has arisen or accrued

outside of this Settlement Agreement (including prior,

current and future labor agreements) shall be deemed to

modify, change or diminish the rights and obligations

which arise under this agreement.

To use extrinsic evidence to determine what rights and obliga-

tions arise under the Settlement Agreement is not to use it “to

modify, change or diminish” those rights and obligations. Thus

the exclusivity clause does not bar the use of extrinsic evidence

for the purpose of inferring what the parties have agreed to.

No. 84-1073

compels one conclusion and that a contrary conclusion

would be clearly erroneous. To remand the case would

require yet a third round of argument in the district

court, doubtless to be followed by a fourth round on appeal.

When we know the inevitable outcome, it would be a waste

of judicial resources and an undue burden on the parties

for us to order a remand. Accordingly, we shall depart

from the general rule and forgo a remand.’

B. The Extrinsic Documentary Evidence

Because the Settlement Agreement does not define

“company seniority” and “length of service,” it is highly

likely that the parties intended for these terms to have

the significance that they have in some other document or

documents governing the relationships among American,

the flight attendants, and their union, and that the

parties viewed the reference of the two terms to these

other documents as too obvious to require explicit men-

tion.* Since we must interpret the Settlement Agreement

in accordance with the intentions of the parties, and since

we have determined that the Settlement Agreement is

ambiguous, permitting us to consider extrinsic evidence,

we shall adopt the following procedure: we shall examine

the three principal documents that govern the relation-

ships among American, the flight attendants, and their

union—American’s regulations, the collective bargaining

agreement, and the retirement plan—as they were in

effect on the date of the Settlement Agreement, in order

to determine if the terms “company seniority” and

* In Anderson v. City of Bessemer City, ___ U.S. —_., 105 S.

Ct. 1504 (1985), the Supreme Court cautions courts of appeals

against reviewing a lower court’s findings of fact de novo, even

when those findings are based on documentary evidence. This

admonition does not apply to the present case, because the

district court made no findings of fact.

* Needless to say, we deprecate this approach to the drafting of

contracts. If the parties had troubled to state what is meant by

“eompany seniority” and “length of service” or to incorporate

definitions by reference to other documents, this case probably

would not have arisen.

No. 84-1073

“length of service” can be traced to any of them, so as to

permit plausible inferences as to the beneficial con-

sequences for flight attendants that the parties intended

to flow from section V A.’ In the light of our results we

shall then consider the merit of the proposition that

section V A grants retroactive retirement credit to re-

employed class members.

(i) American’s Regulations

In section 120-8 of the Regulations of American

Airlines* we find three types of seniority defined: Com-

pany, Occupational, and Classification.’ Company Senior-

ity is “accredited service with the Company in any job

classification.” The “Company Seniority Date” is the date

of employment by American or by a subsidiary or pre-

decessor company, subject to adjustment for periods of

inactive status. The Company Seniority Date determines

the length of “accredited service” with American and is

the basis for determining an employee's eligibility for

length of vacation, vacation termination pay, leaves of

* The record contains a complete copy only of the Retirement

Plan; our examination of the Regulations and collective

bargaining agreement is confined to the parts in the record. In

principle, we could consider other forms of extrinsic evidence as

well, but we have found nothing useful in the record.

* The copy of this regulation contained in the record bears a

date of 1982, and we are not certain that the same regulation

has been in effect without amendment since 1977. Neither

party has objected to the inclusion of a 1982 regulation in the

record, although certain difficulties do arise. See infra p. 20.

* “Occupational Seniority” is accredited service in any particu-

lar “family” or “title group” under a labor agreement and

applies only to employees covered by labor agreements. The

term “seniority” as used in labor agreements with American,

means “Occupational Seniority,” unless the agreement specifies

otherwise. “Classification Seniority” is accredited service ir a

particular job classification under a labor agreement or in Agent

or Clerical/Other job classification under the Non- Management

Salaried Pay Plan.

No. 84-1073

absence, initial sick leave, jury duty pay, travel, length of

service awards, retirement benefits,"* and long-term dis-

ability insurance. “Accredited service,” we take it, is the

period of time from the Company Seniority Date (adijust-

ed for discontinuities of service) to the date of termina-

tion or to the present. “Company Seniority” appears to be

nothing more than accredited service. The term “length

of service” does not appear in the regulation, and we see

no basis for inferring that “length of service” (as used in

the Settlement Agreement) means accredited service.

(ii) The Collective Bargaining Agreement

The collective bargaining agreement between Ameri-

can and its flight attendants in effect in 1977 (the “CBA”)

defines “Service” as “the period of time assigned to active

duty as a flight attendant with the Company unless

otherwise specified.” CBA art. 2(d). In Article 3, on

compensation, we read: “For each full month of service, a

flight attendant shall receive a base pay amount in ac-

attendant as follows: [table omitted].” The term “length

SN ees need not be. If

“service” is used as defined, then “length of service” would

appear to mean, ex vi termini, the sum of all periods of

service. Length of service also figures in the determina-

tion of incentive pay, apparently for overtime work, for

which a separate table is provided.

In Article 9, entitled “Seniority General,” we read:

“Seniority as a flight attendant shall be based on the

length of service as a flight attendant ... .” Under the

Regulations, see supra note 9 and accompanying text, this

means Occupational Seniority, not Company Seniority.

Article 14, entitled “Transfer to Non-Flying or Su-

pervisory Duties,” provides that a flight attendant trans-

ferred to supervisory or other non-fiying duties “shall

* On the inclusion of retirement benefits in this list, see infra

p. 20.

No. 84-1073

retain and continue to accrue seniority and length of

service credit for pay purposes for a period of one (1) year

The generalization that we draw from these provi-

sions is that length of service as a flight attendant

determines a flight attendant’s pay and Occupational

Seniority.

(iii) The Retirement Plan

American's Retirement Benefit Plan for Flight At-

tendants, amended and restated as of January 1, 1976,

(the “Retirement Plan”), was in effect in 1977. Under the

plan, membership is voluntary; to be eligible, a flight

attendant must be twenty-five years old and have com-

pleted a year of service. Members are required to make

regular contributions to the plan,"' and American is re-

quired to contribute the amounts necessary to fund the

plan's obligations on a sound basis.

Roughly speaking, members are credited with one

year of “Vesting Service” for each year they are credited

with at least 386 Hours of Service, see infra note 12, after

reaching age twenty-two. Members terminated with ten

or more years of Vesting Service are entitled to a benefit

on retirement; those with less than ten years of Vesting

Service on termination of employment receive their own

contributions back with interest.

Again speaking roughly, members are credited with

one year of “Credited Service” for each year in which they

are credited with at least 734 Hours of Service, see infra

note 12, while both an employee and a member of the plan.

Credited Service is a crucial factor in the determination of

“In 1981 American agreed to an amendment of its collective

bargaining agreement that changed the Retirement Plan to

eliminate past and future contributions by the flight atten-

dants. The amendment provided that previous employee contri-

butions would be refunded to employees at work on September

1, 1981.

10a

No. 84-1073

the amount of the retirement benefit to which a member

is entitled.

Although fifty terms are expressly defined in the

definitions article of the plan, neither “company senior-

ity” nor “length of service” is among them. We have not

been cited to, nor have we ourselves been able to find, any

occurrences of these terms in the entire plan. We do find

the expression “aggregate years of service.” The defini-

tion is somewhat intricate and is set out in the margin.”

The only significance of the aggregate years of service’

that we can find lies in the determination of the date of

eligibility for readmission to the plan following a break in

service.” Art. III, § 3.6.

C. “Length of Service” in Section V A

Our examination of the Settlement Agreement,

American’s Regulations, the CBA, and the Retirement

Plan suggests some possible conclusions: (1) that the term

“company seniority” as it appears in section V A of the

Settlement Agreement means Company Seniority as de-

fined in the Regulations, (2) that the term “length of

service” as used in section V A means length of service as

used in the CBA, and (3) that section V A’s credit for

length of service does not implicate the Retirement Plan

An “Hour of Service” is any hour for which the employee is

paid, whether for work performed or for vacation, holiday, etc.

Art. II({z) (paraphrased). A “year of service” is any calendar

year during which the employee is credited with 386 Hours of

Service. The “aggregate years of service” are the number of

years of service. Art. III, § 3.2 (paraphrased).

4% if the break in service equals or exceeds the individual's

aggregate years of service, then the prior service is disregarded

and the individual is treated as a new employee. Otherwise, the

individual becomes a member on the date on which he or she is

first credited with an Hour of Service, see supra note 12, after

termination, unless the date on which he or she would become a

member without regard for this provision is later. Art. III, § 3.2

(paraphrased ).

lla

No. 84-1073

or provide retroactive retirement credit. But this is too

hasty; a full reading of section V persuades us that (2), at

least, is erroneous.

Section V comprises two subsections, A and B, more or

less parallel. Subsection B grants to re-employed class

members “full occupational (union) seniority and credit

for length of service to the same extent as provided in

Section V A... ,” provided the union concurs in writing.

If the union does not concur in writing, then “the amount

of seniority and credit for length of service will be

determined by the Court... .”"* Occupational seniority is

the second kind of seniority defined in the Regulations.

See supra note 9. It determines priority of bidding for

days off and flights and priority of layoffs and recalls.

Section V is divided into two subsections apparently in

order to provide the union with a veto over restoration of

full occupational seniority and the corresponding length

of service." Occupational seniority is treated in the CBA

and is apparently a subject of collective bargaining,

“ At the time the Settlement Agreement was approved, the

Association of Professional Flight Attendants (APFA) had

replaced the Air Line Stewards and Stewardesses Association as

the exclusive bargaining representative for American’s flight

attendants. Section V B refers to APFA. Far from concurring

in writing, APFA intervened in the proceeding below while the

court was considering the Settlement Agreement, for the pur-

pose of objecting to the Settlement Agreement’s grant of

retroactive occupational seniority to re-employed class mem-

bers. APFA argued that such a measure would be an onerous

burden on incumbent employees. The district court nevertheless

approved the Settlement Agreement and in its order of October

4, 1977, exproasly ordered that re-employed class members be

restored to full occupational (union) seniority and credit for

length of service as provided. The union appealed the order, and

we affirmed. Airline Stewards and Stewardesses Association,

Local 550 v. American Airlines, Inc., 573 F.2d 960 (7th Cir.) (per

curiam), cert. denied, 439 U.S. 876 (1978).

‘* This veto could be, and was, overridden by the court. See

supra note 14.

12a

No. 84-1073

whereas company seniority is apparently not. The length

of service on which pay depends under the CBA is clearly

length of service as a flight attendant, i.e., length of service

in that occupation, rather than length of service with the

company. CBA art. 2(d), 3(a). Since “length of service”

in section V B occurs in tandem with “occupational

(union) seniority,” we think it likely that it means length

of service in the occunation of flight attendant. In that

case, a re-employed class member’s pay will be determined

by the length of service accorded to her under section V B,

and not section V A. If “length of service” in section V B

means length of service as a flight attendant, then

“length of service” in section V A doubtless means length

of service with the company. We think it is clear that they

cannot mean the same thing, because the union is given a

veto power over the Settlement Agreement’s award of the

one but not of the other. The length of service referred to

in section V A appears to be beyond the reach of collective

bargaining, just as company seniority is. But we are

puzzled as to its significance.

One possibility, suggested by American, is that

“length of service” in section V A means “accredited

service” as defined in the Regulations. But this is highly

implausible, because company seniority is nothing but

accredited service with the company. On that reading, the

phrase “company seniority and length of service” would

be a pleonasm, like “triangle with three sides.” Certainly

the parties intended credit for “length of service” under

section V A to be something in addition to credit for

company seniority, and they intended for that credit to

have beneficial consequences of some sort for the re-

employed class members. But we have been unable to

discover any independent significance for length of ser-

vice with the company, as opposed to length of service as a

flight — or company seniority. It appears to be an

idle w .

l3a

No. 84-1073

D. Burmeister’s Position

Burmeister contends that the credit for “length of

service” in section V A is (or includes) a grant of retro-

active retirement credit. In the absence of any straight-

forward explanation of the significance of the credit for

length of service in section V A, this contention has some

facial plausibility. At the least, it gives a function to an

otherwise functionless term. Bringing retirement credits

within the scope of section V A is not wholly arbitrary

either; according to the Regulations, company seniority

determines an employee’s eligibility for retirement ben-

efits."* Since the Retirement Plan is outside the scope of

the CBA, if the Settlement Agreement was intended to

give retroactive retirement credit, the grant would most

likely have occurred in section V A.

In support of her position Burmeister argues that the

close similarity between the terms “Credited Service” in

the Retirement Plan and “credit for length of service” in

section V A shows that section V A is intendéd to give re-

employed class members retroactive Credited Service. She

maintains further that this is the clear and unambiguous

intent of section V A, when its terms are accorded their

ordinary and natural meaning. She points out that the

Notice to Class Members, on which the parties agreed,

stated that each re-employed class member will be re-

stored to full seniority and credit for length of service,

which will apply for all purposes, and that American has in

fact used the retroactive credit for seniority and length of

service for the purpose of computing all employee benefits

tied to seniority and length of service—with the sole

exception of benefits under the Retirement Plan. Finally,

she argues that she, as the named plaintiff, understood

when she signed the Settlement Agreement that it in-

cluded retroactive retirement benefits, and that she would

not have signed it if she had believed that no such benefits

had been included.

“ On this point, the Regulations do not appear to agree with

the Retirement Plan. See infra p. 20.

No. 84-1073

E. Analysis

After considering all the arguments of the parties, we

think that Burmeister’s case is weak and that the reasons

for not finding in section V A a grant of retroactive

retirement credit are overpowering. Burmeister exag-

gerates the similarity of “Credited Service” and “credit

for length of service.” “Credited Service” is a defined term

of the Retirement Plan that conspicuously does not appear

in section V A. If “length of service” is given its ordinary

and natural meaning, it certainly would not mean “Cred-

ited Service” under the Retirement Plan but simply the

length of time the employee has been with the company.

Furthermore, if the parties had intended to allow for

retroactive retirement credit, it is unlikely that they

would have done so by a simple blanket extension of

Credited Service to all re-employed class members for the

entire compensation period. Participation in the Retire-

ment Plan was voluntary, and according to the only

evidence on the point that we find in the record, only one

or two of the 120 re-employed class members had joined

the Retirement Plan before termination.” Participation

required more than an election to participate; members

had to make regular contributions. In view of this it could

hardly have been known to the negotiators of the Settle-

ment Agreement that all the re-employed class members

would want to participate or would have been able to make

the required retroactive contributions.

" The affidavit of Eva Chang, American's Manager of Pension

Plan Administration, states on information and belief that

“only one or two of the 120 returning class members had joined

the Retirement Benefit Plan at the time of their initial employ-

ment with American Airlines.” We interpret “at the time of

their initial employment” to mean “before they were termi-

nated for pregnancy.” It cannot reasonably be taken to mean

“at the time they were first hired,” because participation in the

Retirement Plan requires a year of service. While Burmeister

draws our attention to the fact that Chang’s statement was

made on information and belief, she submitted no evidence to

contradict or correct it.

15a

No. 84-1073

If the parties had intended to accord retroactive

retirement credits to re-employed class members, we

tuink it highly likely that they would have mentioned the

Retirement Plan or at least used distinctive terms like

“retirement credit” or “Credited Service,” and that they

would have provided all re-employed class members the

option of joining the plan or not, provided for the effec-

tive date of joining, and provided for the payment of back

contributions so as to bring each member’s account up to

date. In view of the complexity and precision of the

Retirement Plan, the value of rights under it, and the

potential for continued confusion and controversy over

details, we think it most unlikely that the parties, in

providing for retroactive retirement credit, would have

contented themselves with an oblique and uncertain ref-

erence to credit for “length of service,” letting all the rest

go. The language of section V A more readily supports the

conclusion that the parties did not intend to include

retroactive retirement credit in the Settlement Agree-

ment.

The language in the Notice to Class Members” cannot

be given controlling weight over the Settlement Agree-

ment itself, and in any event it lends no support to

Burmeister’s position. The notice actually says only that

“the seniority thus computed will apply for all

for some reason leaving out length of service, but even if it

is interpreted to mean that the length of service thus

computed will also apply for all purposes, this can only

mean for all purposes for which length of service is used.

“* The relevant part of the Notice to Class Members reads:

Each re-employed Class Member will be restored to full

seniority and credit for length of service, including such

porns ete gage eehpedhe ay mn deny es on pee arden

terminated, but without credit for time during which

was pregnant or otherwise disabled to work. a ye or

thus computed will apply for all purposes, including choice

of home base and pay.

l6a

No. 84-1073

But bare length of service is not used to compute any

variable of significance in the Retirement Plan.”

The fact that American has used the re-employed

class members’ retroactive credit for seniority and length

of service for the purpose of computing all employee

benefits tied to seniority and length of service except for

retirement benefits gives no support to Burmeister’s posi-

tion. The accrual of retirement benefits is not tied to

seniority or to mere length of service, but to Vesting

Furthermore, we think it significant that the benefits

that have been provided to re-employed class members in

consequence of their retroactive seniority are all current

benefits. For example, re-employed class members have

not received credit for the paid vacation they would have

earned if they had not been terminated; they have re-

ceived only credit for the paid vacation they have earned

after re-employment, based on their retroactively adjust-

ed seniority. If the Settlement Agreement granted

“ Since eligibility for membership in the Retirement Plan

requires completion of a “year of service,” it might be argued

that the credit for “length of service” in section V A applies at

least to this eligibility requirement. But that is by no means

clear. The “year of service” required for eligibility is defined

within the Retirement Plan in terms of “Hours of Service,” also

a defined term. See supra note 12. Hours of Service do no

accumulate as “length of service” under the plan, but as “aggre

gate years of service.” See id. If section V A had spoken

credit for “aggregate years of service,” instead of “length

service,” the implicit reference to the Retirement Plan would

reasonably clear. But “length of service” is a term

the Retirement Plan, and we cannot say, without

question, that the parties intended that the re-

members should receive credit for “aggregate years

equal to the entire compensation period, a result

apparently be compelled by the suggested reading of “le

service.” Intuitively, a person might serve a year

fulfilling the number of Hours of Service requisite for a “

service” under the Retirement Plan.

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No. 84-1073

retroactive retirement credit to re-employed class mem-

bers, American would be obligated to fund the retirement

benefits actuarially attributable to those credits—an ex-

penditure that American estimates at $850,000, or $86,500

a year for thirty years, almost a third of American’s

express monetary obligation under the Settlement Agree-

ment.” Such an expenditure would be a retroactive ben-

efit—American would have to pay what it would have paid

if the re-employed class members had not been termi-

nated and had all been members of the Retirement Plan.

We think it unlikely that a uniquely retroactive benefit of

such magnitude would have been buried so unobtrusively

in the chosen language of section V A amidst other

implied benefits that were wholly current, if the parties

had really intended to create it.

In addition, we think that section III D of the

Settlement Agreement was intended in part to prevent

just such massive monetary obligations from being teased

out of the language of the Settlement Agreement after it

was signed and approved. In section IIJ A, American

agreed to pay $2,700,000 to the class, the only monetary

obligation to the class members expressly set forth. Sec-

tion III D reads as follows:

American Airlines will have no monetary or other

obligation to any member of the class or to any

representative or attorney for the class unless ex-

pressly provided in this Agreement.

No obligation to fund retroactive retirement benefits is

expressly provided in the Settlement Agreement, and

section III D bars implied monetary obligations. Indeed,

section III D provides a strong reason in itself to think

that the parties did not intend to include retroactive

* This is what it would have cost American in .381, taking into

account the 1981 amendment to the Retirement Plan. See supra

note 11. The record does not show what it would have cost

American in 1977, but the figure would clearly have been

substantial, although less.

18a

No. 84-1073

retirement credit in the settlement. The parties knew the

content of section III D and so would have realized that if

the Settlement Agreement was to grant retroactive re-

tirement credits, American’s obligation to fund those

credits would have to be set forth expressly in the agree-

ment.

In an affidavit attached to her memorandum in sup-

port of her motion for specific performance below, Bur-

meister said the following:

6. In 1977, one of the counsel for plaintiffs

informed me that a tentative settlement agreement

(“the 1977 Agreement”) had been reached with

American. I had previously explained that retroactive

credited service under the Retirement Plan must be

included in the 1977 Agreement in order for it to be

acceptable to me. I signed the 1977 Agreement

having been assured and led to believe that it included

these benefits.

In the same affidavit she also says:

10. Had I believed at the time I signed the 1977

Agreement that it did not provide for retroactive

credited service under the Retirement Plan, I would

not have signed it on behalf of myself or as a class

representative.

If Burmeister had made her understanding clear to

American before signing the Settlement Agreement, and

if American assured her and led her to believe that it

included retroactive Credited Service, then American

might very well be bound by her understanding. But

Burmeister conspicuously does not say that she explained

to American how she understood section V A, or that

American assured her and led her to believe that her

understanding was correct. If she could have truthfully

made such assertions, we presume that she would have.

Any particular interpretation that only one of the parties

may have envisioned at the time the contract was exe-

cuted is immaterial. Smith v. Vernon, 6 Ill. App. 3d 434,

436, 286 N.E.2d 99, 101 (1972).

19a

No. 84-1073

Finally, we consider the effect of section 120-8 of

American’s Regulations, dated November 24, 1982, which

states:

The Company Seniority Date determines the length

of “accredited service” with the Company. It is the

basis for determining an employee's eligibility for-

Retirement Benefits (REG 160-1).

Since this section bears a date of 1982, the quoted passage

may have been revised to reflect the 1981 changes to the

Retirement Plan. See supra note 11. Thus we hesitate to

treat it as straightforwardly applicable in 1977. It is

insignificant that the passage speaks of “Company Se-

niority Date” rather than “Company Seniority”; length of

accredited service is Company Seniority, and, as the

passage says, length of accredited service is determined by

Company Seniority Date. “Company Seniority” and

“Company Seniority Date,” though differently defined,

appear to us to be functionally interchangeable. The

passage refers us to another regulation, REG 160-1, which

evidently contains more information. But the parties

have not supplied us with REG 160-1, and we do not know

what it says. The statement that Company Seniority Date

is the basis for determining an employee's eligibility for

retirement benefits conflicts with te clear provisions of

the Retirement Plan as in effect in 1977, and we doubt

that it is true. Article VI of the Retirement Plan, entitled

“Eligibility for Benefits,” does not make use of the terms

“Company Seniority Date” or “Comp ay Seniority,” nor

does it in any other way indicate that Company Seniority,

as defined in the Regulations, plays any part in the

determination of an employee's eligibility for benefits.

Because of this discrepancy and the uncertain effective-

ness of the quoted passage in 1977, we do not find the

passage to be trustworthy evidence supporting Bur-

meister’s position.

All of these considerations lead us to conclude, and we

hold, that the Settlement Agreement does not provide

20a

No. 84-1073

retroactive retirement credit to re-employed class mem-

Ill

In her motion to the district court seeking specific

performance of the Settlement Agreement, Burmeister

moved in the alternative to vacate the order of October 4,

1977, approving the Settlement Agreement and dis-

missing the action, “to allow plaintiff to adjudicate fully

her cause of action against defendant.” Because the dis-

trict court granted the motion for specific performance, it

did not rule on the alternative motion. Thus it may

appear that we must remand the case for such a ruling.

After reviewing her motion and supporting memo-

randum, we have come to the conclusion that such a

remand is unnecessary. '

Burmeister’s reason for seeking the vacation of the

order is that the Notice to Class Members, supra note 18,

misled them into believing that they would receive full

retroactive credited service under the Retirement Plan.

We assume without holding that inadequate notice of a

proposed settlement in a class action may be sufficient

grounds for vacating the order approving the settlement.

See Simer v. Rios, 661 F.2d 655, 664 (7th Cir. 1981), cert.

denied, 456 U.S. 917 (1982). But Burmeister submitted no

evidence that the notice misled any class member into

believing that the Settlement Agreement provided retro-

active retirement credit to those re-employed, and no

evidence that any class member (besides herself) would

have objected to the settlement if the notice had stated

rere ry that retroactive retirement credit was not in-

" Burmeister’s affidavit of March 18, 1983, states that after she

was told in 1979 that she would not receive retroactive retire-

ment credit, she contacted a re-employed class member, Peggy

Allen, who engaged counsel to pursue the matter adminis-

tratively. But the record contains no affidavit from Allen

asserting that she was misled by the notice.

2la

_—

No. 84-1073

The language in the notice that Burmeister finds

especially misleading is the statement: “The seniority thus

computed will apply for all purposes....” As we noted

supra, the subject of this statement is seniority, which, at

least in 1977, had nothing to do with the Retirement Plan.

It is not seniority but credit for lenyth of service that

Burmeister consistently portrays as suggesting retro-

active retirement credit, yet the statement says nothing

about credit for length of service, even though the pre-

ceding sentence does.”

Furthermore, it appears that the vast majority of re-

employed class members were not members of the Retire-

ment Plan when they were terminated.” In order to

believe on the basis of the notice that they were to receive

retroactive retirement credits, such persons would have to

infer that the Settlement Agreement retroactively in-

ducted them into the Retirement Plan. It is clear to us

that such an inference could not reasonably be based on

the language of the notice, without further inquiry.

For these reasons, we hold that the notice to class

members was not so misleading as to require the vacation

of the order approving the settlement and dismissing the

action.”

= We noted this anomaly supra, p. 16. A prudent class member

might have inquired whether the omission of “credit for length

of service” was deliberate, and if so, what it meant, but as far as

we know, no one did.

= See supra note 17.

“ Ordinarily we would not decide a motion addressed to but

not acted on by the district court. In this case, however, we have

before us all the briefs and evidence presented to the district

court, and since we are in as good a position as the district court

to decide the motion, we depart from our usual practice in the

interest of judicial economy and put the question of retroactive

retirement credits under the Settlement Agreement finally to

rest.

22a

No. 84-1073

The judgment of the district court is reversed, and the

case is remanded with directions to deny the plaintiff's

motion for specific performance of the Settlement Agree-

ment and her motion to vacate the order approving the

Settlement Agreement.

SO ORDERED.

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA 50234—Pandick Midwest, Inc., Chicago—6-7-85—450

23a

IN THE UNtreD States District Court

For the Northern District of [linois

Eastern Division

70 Cc 2069

MEMORANDUM OPINION AND ORDER

(Entered May 20, 1983)

On August 3, 1977, a settlement agreement was entered

into between plaintiff and class representative Darlene Preston

(now “Darlene Burmeister”) and defendant American Airlines

(“American”). Plaintiff contends that American has not

fulfilled its obligations under the terms of the agreement

because American has refused to allow plainuff and the other

class members who were re-employed under the terms of the

settlement agreement (“returning class members”) to fully

participate in its Retirement Benefit Plan (“Plan”). Specific-

ally, plaintiff avers that the returning class members should be

allowed, in accordance with the provisions of the settlement

agreement, to participate in the Plan on a retroactive basis,

encompassing both the period of employment each returning

class member worked for American prior to her termination,

and the compensation period."

The sequence of events which led to the parties’ decisions

to enter into the settlement agreement is briefly as follows. In

1970, the Air Line Stewards and Stewardesses Association,

Local 550 (“ALSSA”), filed a complaint against American. In

its complaint, ALSSA alleged that American had violated Tide

Vil, 42 U.S.C. § 2000e-2, by terminating stewardesses who

became pregnant and had children. In 1972, plaintiff filed a

'“Compensation period” is defined in the settlement

agreement as “the period of time which commenced upon the

termination of a class member’s employment and ends on the

date on which 2n order is entered approving this settlement.”

Settlement Agreement at 2. ‘

24a

class action on behalf of the stewardesses who became preg-

nant, had children, and were terminated by American. Once

again, the cause of action was that American had violated Title

VII. In 1974, the class was certified? and plaintiff became the

class representative. Finally, in 1974, plaintiff filed a class

action against ALSSA contending that it had actively partici-

pated in American’s discrimination and had thereby violated

Title VII. These three cases were eventually consolidated and

on April 28, 1976, summary judgment was entered against

American.

Pending American’s appeal of that decision, the parties

entered into the 1977 settlement agreement. The agreement, in

essence, provides that: (1) a pro rata share of the remainder of

$2,700,000, after court awards for litigation expenses, costs and

attorneys’ fees are deducted, will be paid to each certified class

member, (2) American will re-employ all members of the

certified class who apply and meet various requirements; and

(3) all returning class members will receive the amount of

company seniority and credit for length of service that should

have been received had their employment not been terminated

by American. In 1977, the settlement agreement was approved

by court order and the consolidated case was dismissed.

Plaintiff has filed a motion asking the court to order

specific performance of the settlement agreement, which woula

allow plaintiff and the returning class members to fully partici-

pate in the Retirement Benefit Plan or, in the alternative, to

vacate the order dismissing the case. For the following reasons,

plaintiff's motion seeking specific performance is granted.

The construction of a settlement agreement is to be

governed in accordance with the principles of law which govern

a contract. Okonko v. Union Oil Co. of California, 519 F. Supp.

372 (C. D. Cal. 1981); see also United States v. Orr Construc-

2 The certified class was composed of stewardesses whose

employment had been terminated between 1965 and 1970

because they had become pregnant and had children.

25a

tion Co., 560 F. 2d 765 ‘7th Cir. 1977). The interpretation,

construction, or legal effect of a contract are issues to be

resolved by the court as questions of law. Mazanek v. Rockford

Drop Forge Co., 98 Ill. App. 3d 956, 424 N. E. 2d 1271 (1981).

Further, when the terms of a contract are clear and unam-

biguous, no parol or extrinsic evidence can be considered to

change the meaning of the terms. Susmano v. Associated

Internists of Chicago, Lid., 97 Ill. App. 3d 215, 422 N. E. 2d

879 (1981). To determine whether ambiguity exists in the

language of a contract, the instrument must be considered as a

whole. Courts cannot consider some clauses and ignore other

clauses. Valerio v. R & R Construction Co., 20 Ill. App. 3d 48,

312 N. E. 2d 713 (1974).

In applying these rules to the 1977 settlement agreement, it

is evident that the terms of the agreement are clear and

unambiguous. The language is not “reasonably susceptible to

more than one meaning.” Susmano, at 219, 422 N. E. 2d at

882. According to the clear terms of the agreement, plainuff

and the returning class members are entitled to receive any and

all of the benefits they would have received had they not been

discharged by Amencan.

Paragraph V of the settlement agreement is entitled “‘Sen-

iority and Credit for Length of Service.” The first sentence of

this paragraph explicitly provides that “[e]ach re-employed

class member shall be credited with the amount of company

seniority and length of service to which she was entitled at the

date on which her employment was terminated plus company

seniority and such length of service for the entire compensation

period....”

The Retirement Benefit Plan is one of the benefits Amen-

can employees enjoy. In addition, the retirement benefits of the

Plan are determined by the number of years an employee has

worked for American. Clearly, the phrase “credited with ...

company seniority and length of service to which she was

26a

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are entitled to the benefits of the Plan consistent with their

credit for length of service.

At one time, in order to be eligible to receive the benefits of

the Plan, employees were required to make yearly contributions

to the Plan. If an employee’s contribution were still a require-

ment, American would have to allow plainuff and other

returning class members the opportunity to make retroactive

contributions to the Plan and thus participate in the Plan’s

benefits.

However, since 1980, a new version of the Plan has been in

effect. This new Plan does not require employee contributions

in order for an employee to be eligible to receive its benefits. In

addition, in 1981, American agreed? to pay back to its employ-

ees all of the contributions previously paid into the Plan. As a

result of these facts, plaintiff and the returning class members

are no longer required to make contributions to the Plan in

order to receive benefits based on credit for length of service.

Finally, the mandate found within paragraph VI of the

settlement agreement that “American ... will not discriminate

in any way against any class member by virtue of the fact that

she is a class member or adopt or enforce any employment

practice, condition or qualification which operates to dis-

criminate against any class member” buttresses the clear mean-

ing of the terms of the agreement. In order to avoid dis-

crimination, plaintiff and the returning class members must be

awarded all of the benefits they would huve received had they

not been discharged. Clearly, the Plan is a part of those

benefits.

In conclusion, plaintiff's motion for specific performance is

granted. According to the terms of the settlement agreement,

plaintiff and the returning class members who desire to partici-

3 The agreement was between the Association of Profes-

sional Flight Attendants and American. Plaintff and the

returning class members are members of the Association.

27a

pate in the Plan must be credited with their length of service

during the compensation period and their time of employment

with American prior to the compensation period, for purposes

of qualifying, vesting and calculating benefits under the Plan.

In addition, American must inform plaintiff and the returning

class members of their rights to participate retroactively in the

Plan.

ENTER:

/s/ Frank J. McGarr

UNITED STATES

DISTRICT JUDGE

DATED: May 20, 1983

28a

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

——_—__Ausust15 , 19.85.

Before

Hon. WALTER J. CUMMINGS, Chief Judge

Hon. HARLINGTON Wooo, JR... Circuit Judge

Hon. wJESSE £. ESCHBACH, Circuit Judge

AIR LINE STEWARDS AND STEWARDESSES ) Appeal from the Unit

ASSOCIATION, LOCAL 550, TWU, AFL-CIO, States District Cour

et al., for the Northern

ala District of Illinois

Plaintiffs-Apvellees, Eastern Division.

No. 84-1073 vs. No. 70 ¢ 2069

AMERICAN AIRLINES, INC., * Frank J. McGarr,

Defendant-Appvellant. Chief Judge.

ORDER

On consideration of the petition for rehearing and sug-

sestion for rehearing en banc filed in the above entitled

cause by plaintiffs-appellees, no judge in active service

has requested a vote thereon, and all of the judges on the

original panel have voted to deny a rehearing. Accordingly,

IT IS ORDERED that the aforesaid petition for rehearing

be, and the same is hereby, DENIED.

29a

STATE OF ILLINOIS )

) SS.

COUNTY OF COOK )

CERTIFICATE OF SERVICE

I, Michael B. Roche, being first duly

sworn upon oath, depose and state as

follows:

l. I am a member of the Bar of this

Court in good standing.

2. I caused to be deposited in the

United States mailbox at 3100 Prudential

Plaza, Chicago, Illinois, 60601, with first

class postage prepaid, a sufficient number

of copies of the “Petition for a Writ of

Certiorari to the United States Court of

Appeals for the Seventh Circuit” in the

lawsuit styled Air Line Stewards _ and

Stewardesses Association, Local 550, MTWU,

AFL-CIO, et al. v. American Airlines, Inc.

This mailing occurred on Tuesday, November

12, 1985 at approximately 5:00 p.m. within

the permitted time under 28 U.S.C. §2101(c).

3. At the same time and place, with

first class postage prepaid, I caused to be

served by mail three copies of said Petition

on Gordon 8B. Nash, Jr., Esq., Counsel of

Record for Respondent, American Airlines,

Inc., at Gardner, Carton & Douglas, One

First National Plaza, Chicago, Illinois,

60603.

Michael B. Roche

Subscribed and sworn to

before me this 12th day

of November, 1985.

Notary Public

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.