Opposition Brief — Air Line Pilots Ass'n v. Northwest Airlines, Inc.

(i)

TABLE OF CONTENTS

Page

TABLE GF AUTIRORITIES «nn eke cces (i)

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TABLE OF AUTHORITIES

Cases:

Bower v. Eastern Airlines, 214 F.2d 623 (3d Cir.

eee en ga ea ho ad ke 48d Red DS ei 10

Brotherhood of Railroad Signalers v. Chicago, M. St.

P. & P. R.R., 444 F.2d 1270 (7th Cir. 1971) ........ 8

Brotherhood of Railway Trainmen v. Central of

Georgia Ry., 415 F.2d 403 (Sth Cir. 1969), cert.

denied 396 U.S. 1008 (1970) ............. ease 8

Citizens to Preserve Overton Park v. Volpe, 401

I Cte a ae ks Aw Seg Gon tebe 8k a ges 10

Commissioner V. Shapiro, __ US. —— (No.

SA II, ee ble se ea es 10

Diamond v. Terminal Ry., 421 F.2d 228 (Sth Cir.

SE SO ee aie ob a hea wy a eR ae oA 8

Dunlop v. Bachowski, 421 U.S. 560 (1975) ........... 10

Dunn v. INS, 419 U.S. 919 (1974)... 1... eee 7

Electronics Corp. vv. International Union of

Electrical Workers, Local 272, 492 F.2d 1255

SR ee Le eae a oka a ak ae ow hs oe es 9

Gateway Coal Co. v. United Mine Workers, 414 U.S.

fe oo ee eee ig cue eh ik < oe ue 10

Gunther v. San Diego & A.E.Ry., 382 U.S. 257

NS ks oe a ok eS ES Oe Oa eee KEK Ce ees 8

oem, BIG KS a IL SP AAAI IES it EIN SRSLY

(ii)

Page

International Ass'n. of Machinists v. Central

Airlines, 372 U.S. 682 (1963) ......-.-0 eee eee 7,10

International Ass’n. of Machinists, Local 2003 v.

Hayes Corp., 296 F.2d 238 (Sth Cir. 1961) ......... 9

Laday v. Chicago, M. St. P. &P.R.R., 422 F.2d

CBB CI Gar, TOT) onc ccc ccc ere eee ene. 8

Leedom v. Kyne, 358 U.S. 184 (1958) 6... ee eee 10

Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d

qecgs fee | ar ee ee 9

NF&M Corp. v. United Steelworkers Local 8148,

ewe me, Te a A. Sn an arama eae 9

Textile Workers Local 1386 v. American Thread

Co., 291 F.2d 894 (4th Cir. 1961) ...........00.. 9

Timken Co. v. Local 1123, United Steelworkers, 482

ey Bes Ce TE ha ow ke Sek 8s ees 9

Torrington Co. v. Metal Produce Workers, Local

1645, 362 F.2d 677 (2d Cir. 1966) ............--- 9

United Steelworkers v. Enterprise Wheel & Car

Comm, 363 US. FOCI ww ov teens 6, 10, 11, 12

United Steelworkers v. Warrior & Gulf Navigation

ee Be Be Ls a 11

Washington-Baltimore Newspaper Guild, Local 35 v.

The Washington Post Co., 442 F.2d 1234 (D.C.

CR seeks Fe Re Rae eine nd Fab ee ee 9

Washington Terminal Co. v. Boswell, 124 F.2d 235

a eee are eee eae 10

Statutes:

Railway Labor Act

§ 3 First (p), 45 U.S.C. § 153 First (p) ........-.-.- 7

§ 3 First (q), 45 U.S.C. § 153 First (q) .........-4-- Pe

§ 3 Second, 45 U.S.C. §153 Second .............. 7

ee 8 a | ee rere ee ee a

Congressional Materials:

H. Rep. No. 1114, 89th Cong. Ist Sess (1965) ......... 8

S. Rep. No. 1201, 89th Cong. 2nd Sess (1966) ......... 8

RI FED THI

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IN THE

Supreme Court of the Anited States

October Term 1975

No. 75-1653

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL,

Petitioner,

V.

NORTHWEST AIRLINES, INC.,

Respondent,

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE DISTRICT OF

COLUMBIA CIRCUIT

BRIEF FOR NORTHWEST AIRLINES, INC.

IN OPPOSITION

QUESTION PRESENTED

Whether the Court of Appeals correctly concluded on

the basis of the peculiar facts of this case that it was

improper to enforce an arbitration award under the

Railway Labor Act, §3 First (p) and (q), because the

award was based entirely upon a supposed concession

which, all parties agree, was never made, and was not

based on the arbitrator’s own interpretation of the

contract or findings of fact.

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2

STATEMENT

This case grows out of a labor contract dispute

between respondent Northwest Airlines, Inc.

(‘‘Northwest”’), an air carrier, and petitioner Air Line

Pilots Association (“ALPA”), the collective bargaining

representative of Northwest’s pilots. The dispute

involves the permissibility of Northwest’s use of some

furloughed pilots to serve as instructor pilots during a

1970 strike by other Northwest employees, represented

by a different union, without selecting the instructors

according to seniority.

The strike by non-pilot employees forced curtailment

of Northwest’s flight operations, and pilots were laid

off or “‘furloughed”’ in reverse order of seniority. Senior

pilots remaining on active status were sometimes asked

to operate aircraft or assume duties to which they had

not been customarily assigned, and Northwest used

instructor pilots to familiarize those pilots with new

assignments. Northwest chose the instructor pilots from

the Pilots’ System Seniority List, which carried the

names of all Northwest pilots, including those tempo-

rarily “‘furloughed”’ during the strike or furloughed for

other reasons, but did not select the instructors on the

basis of their seniority ranking on that list.

Utilizing the procedure established by collective

bargaining agreement, ALPA filed a grievance con-

tending that Northwest was obliged to select as

instructors only those pilots who had remained on

active service during the strike. Northwest’s position

was that its only obligation was to draw instructor

pilots — a distinct craft — from the system seniority list

but did not have to reassign active pilots or proceed in

accordance with seniority renkings.

3

Pursuant to an arbitration agreement made by the

parties in conformity with § 204 of the Railway Labor

Act, 45 U.S.C. § 184, the dispute was then submitted

to a five-member adjustment board composed of two

Northwest representatives, two ALPA representatives,

and a “neutral” member serving as Chairman. In

accordance with the agreement establishing its juris-

diction and prescribing its procedures, the adjustment

board held a hearing at which both parties presented

evidence.

After two executive sessions were held about a year

after the hearing, the Chairman, with the concurrence

of the two ALPA representatives, filed an opinion

stating that Northwest should have selected the

instructors from pilots in active service. The ALPA

members concurred in that award. In his opinion,

however, the Chairman stated that while the collective

bargaining agreement was “insufficient”? to support the

union’s position, the grievance was sustainable on the

basis of a 1969 letter from Northwest to ALPA

representing that Northwest would follow past practice

by choosing as instructors qualified pilots whose names

appeared on the “pilot seniority list.” Despite the fact

that the only seniority list introduced at the hearing

was the Pilots’ System Seniority List containing the

names of all pilots, including those “furloughed” (see

Pet. 23a n. 6), the Chairman’s opinion went on to state

that:

“It is agreed that the reference to ‘pilot

seniority list? in the letter does not include

furloughed pilots, but is limited to those pilots on

the active roster.” (Emphasis added.) (Opinion of

the Board, quoted at Pet. 23a.)

As the court of appeals noted, this “agreement” to

which the Chairman referred “was allegedly arrived at

POP On i ne lll Sig ato adage ling >.

4

between the company and union representatives during

the board’s first executive session.” As the court of

appeals also noted, and as ALPA’s counsel formally

stipulated in the district court, no such agreement in

the course of the arbitration proceedings had ever been

made. (Pet. 23a.)

The Northwest representatives on the board promptly

but unsuccessfully sought to correct the Chairman's

crucial misapprehension.’ Because the Chairman

expressly stated that his only basis for sustaining the

grievance was the supposed “agreement” on the

meaning of the 1969 letter, and because it was

undeniable that the exclusive premise for the award was

illusory, Northwest brought suit in the district court to

set aside the award. ALPA counterclaimed for enforce-

ment.

Ruling upon cross-motions for summary judgment,

the district court entered an order enforcing the award.

Citing the “‘policy of encouraging arbitral resolution of

labor disputes” (Pet. 10a) the district court concluded

that it was powerless to vacate the award, even though

it found that the Chairman’s decision was based “on an

‘When the Chairman’s opinion and award supporting the

union on the basis of the nonexistent “agreement” was first

circulated to other board members, the Northwest representatives

notified the Chairman by letter that no such “agreement”

appeared of record. (A. 40.) The Chairman responded that the

Northwest representatives had made a concession to this effect

during the first executive session. (A. 4647.) The Northwest

representatives then submitted affidavits confirming that there

had been no such concession. (A. 41-45, 133-34.)

The ALPA representatives subsequently acknowledged that

there had been no concession by Northwest on this matter

during the executive sessions. (Pet. 23a n. 6.) Nevertheless, they

signed the Chairman’s proposed award and the opinion without

bringing the error to his attention, even though the error had

been called to ALPA’s attention as well (A. 48-49).

5

erroneous finding of fact”, and a “substantial factual

error.” (Pet. 10a, 13a)

The court of appeals reversed, holding that under the

exceptional circumstances presented here, where the

arbitration tribunal had disposed of the question before

it by invoking a non-existent concession allegedly made

in the course of proceedings, rather than resolving the

dispute by independently interpreting the collective

bargaining agreement and finding the facts, the award

should be vacated.2 The court ordered the case

remanded to permit the arbitration board to address the

dispute on the merits.

ARGUMENT

In holding that the award in this case should not be

enforced, the court of appeals remained well within the

compass prescribed for review of adjustment board

awards. The court recognized and articulated the

pertinent, settled principles of law and reached the

conclusion that the award here had to be set aside

because of the peculiar, uncontested facts. Indeed, as

we shall show, the court did not even exercise its full

power to vacate improper awards.

2Northwest also argued in the court of appeals that the

decision based on material entirely outside the record made at

the hearing constituted a denial of due process, that such a

decision was outside the jurisdiction conferred on the board by

the arbitration agreement, and that the failure of the ALPA

representatives on the Board to inform the Chairman of his error

in postulating a non-existent stipulation constituted fraud

compelling vacation of the award. Because of its disposition of

the case, the court below did not reach these issues.

~

6

1. Despite petitioner’s assertions before this Court,

the court of appeals has not invited “massive judicial

involvement” in arbitration proceedings. Its decision did

not entail any judicial “probing” of the arbitrator's

“thought processes,” or any evaluation of “what weight

- he gave the evidence before him, and what testimony

he credited,” as petitioner alleges. (Pet. 8, 10.) The

Chairman’s own statements on the face of the award

itself showed that he found ALPA’s arguments

“insufficient” to support the grievance and instead

rested exclusively on an alleged “agreement” between

the parties as to the meaning of the term “pilot

seniority list” in a letter commitment. As ALPA

expressly acknowledged before the district court, such a

concession had never taken place. The district court

sustained the award only by ignoring that its sole basis

was a single, glaring error — the supposed “agreement”

which, both parties acknowledged, had never occurred

and which was without foundation in the record. Once

the court of appeals recognized the patent defect which

all parties acknowledged and the district court itself

specifically found, the award collapsed of its own

weight.

This result does not depend on any reweighing of

evidence or second-guessing of the arbitrator's thought

processes. It is simply a recognition of the fact that the

arbitrator, through an incontrovertible mistake, failed to

discharge his duty to decide questions of interpretation

and evidence because he erroneously believed they had

been withdrawn by “agreement.” For this reason the

court below emphasized the absence of any possibility

that refusal to enforce the award would encroach upon

the arbitrator’s power to “bring his informed judgment

to bear” on interpretation of a collective bargaining

agreement, United Steelworkers v. Enterprise Wheel &

Car Corp., 363 U.S. 593. 597 (1960): the arbitration

SP PEP PE ce SR COR A

>

tribunal here simply had not performed that inde-

pendent function. The unusual circumstances com-

pelling vacation of the award are unlikely to recur, and

the uniqueness of the case furnishes a “sound reason to

deny review.” Dunn vy. INS, 419 U.S. 919, 924 (1974)

(Stewart, J., dissenting from denial of certiorari).

2. In any event, the decision below vacating the

award is entirely in accord with general legal principles.

While the circumstances under which courts set aside

arbitration awards are assuredly exceptional, the

standards of review mandated by Congress, interpreted

by this Court, and regularly applied by lower federal

courts, not only permit judicial vacation of an award

such as that presented here, indeed they compel it.

Sections 3 First (p) and (q) of the Railway Labor

Act. 45 U.S.C. § 153 First (p), (q), which set forth the

general standards of judicial review deemed applicable

in air carrier arbitration cases,’ provide that a reviewing

court may set aside an award:

3Sections 3 First (p) and (q) of the Railway Labor Act

expressly govern judicial review of awards made by divisions of

the National Railroad Adjustment Board. Awards made by

“system, group, or regional boards of adjustment” established by

railroads and unions under Section 3 Second, 45 U.S.C. § 153

Second, are subject to review under the same standards. Section

204 of the Act. 45 US.C. § 184, directs air carriers and their

collective bargaining representatives to establish boards of

adjustment “not exceeding the jurisdiction which may be

lawfully exercised by system, group, or regional boards”

established under Section 3. Ordinarily, the “finality to be

accorded” awards of boards created by Section 204 agreements is

determined by the standards of Section 3 of the Act. See

International Ass'n. of Machinists v. Central Airlines, 372 U.S.

682, 694 (1963) and cases cited therein.

note

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8

“for failure of [the arbitration board] to comply

with the requirements of this chapter, for failure

of the order to conform, or confine itself, to

matters within the scope of the [board’s]

jurisdiction, or for fraud or corruption by a

member of the [board] making the order.”

This formulation was added in 1966, just after this

Court had recognized in Gunther v. San Diego &

A.E.Ry., 382 U.S. 257, 261 (1965), that “‘wholly

baseless” arbitration awards should be set aside. In

doing so, the congressional committees explained that

the grounds listed were intended to incorporate those

bases traditionally available to vacate an arbitration

award, and the committee reports expressly affirmed

the duty of reviewing courts to refuse enforcement of

an award “actually and indisputably without foundation

in reason or fact.’”*

As explained in Brotherhood of Railway Trainmen v.

Central of Georgia Ry., 415 F.2d 403, 411-412 (Sth

Cir. 1969), cert. denied, 396 U.S. 1008 (1970), “an

award ‘without foundation in reason or fact’ is equated

with an award that exceeds the authority or jurisdiction

of the arbitrating body.” Accord, Brotherhood of

Railroad Signalers v. Chicago, M., St. P. & P. R.R., 444

F.2d 1270, 1273-1274 (7th Cir. 1971) (Stevens, &

Laday v. Chicago, M. St. P. & P. R.R., 422 F.2d 1168

(7th Cir. 1970); Diamond v. Terminal Railway, 421

F.2d 228 (Sth Cir. 1970).

These holdings are in harmony with the position

traditionally taken by courts reviewing arbitration

awards in other industries. Deference to the arbitrator

requires judicial restraint, not abdication; courts have

4S. Rep. No. 1201, 89th Cong. 2d Sess. 3 (1966). See also H.

Rep. No. 1114, 89th Cong. Ist Sess. 16 (1965).

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9

routinely held that an award which is wholly

“capricious,” has “no support whatever” or is defective

under an equivalent formulation of the governing

standard cannot be enforced.‘

None of the cases cited by petitioner at Pet. 13

rejects the principle expressed in the cases discussed and

followed by the court below. Petitioner’s cited cases

stand only for the proposition that a court “cannot sub-

stitute its judgment for that of the arbitrator” (Pet.

12-13), but the same courts readily acknowledge that this

salutary principle of restraint does not compel a court to

rubber-stamp an award, even in the face of patent

defects. E.g., Washington-Baltimore Newspaper Guild,

Local 35 v. The Washington Post Co., 442 F.2d 1234

(D.C. Cir. 1971); Ludwig Honold Mfg. Co. v. Fletcher.

405 F.2d 1123, 1126-1127 (3d Cir. 1969).

°E.g., NF&M Corp. v. United Steelworkers, Local 8148, 524

F.2d 756, 760 (3d Cir. 1975) (award must be vacated if “record

before the arbitrator reveals no support whatever for his

determinations”); Electronics Corp. v. International Union of

Electrical Workers, Local 272, 492 F.2d 1255, 1257 (lst Cir.

1974) (enforcement denied where “the ‘fact’ underlying an

arbitrator’s decision is concededly a non-fact” [emphasis in

original] ); Timken Co. v. Local 1123, United Steelworkers, 482

F.2d 1012, 1015 (6th Cir. 1973) (enforcement denied when is

award is “without support in the record” and “cannot be

rationally deduced from the agreement”); Torrington Co. v.

Metal Produce Workers, Local 1645, 362 F.2d 677, 680-681 (2d

Cir. 1966) (award vacated was beyond arbitrator’s authority in

view of “uncontroverted fact”); Jnternational Ass’n.. of

Machinists, Local 2003 v. Hayes Corp., 296 F.2d 238, 243 (Sth

Cir. 1961) (enforcement will be denied where award is

“arbitrary, capricious or not adequately grounded in the

collective bargaining contract”); Textile Workers, Local 1386 v.

American Thread Co., 291 F.2d 894, 899 (4th Cir. 1961)

(“decisions which do such violence to the clear, plain, exact, and

unambiguous terms of the submission” must be set aside).

YT Age Ae <y) OER Ep Qe Opa te- wee ter

10

With arbitration awards, as with decisions of other

administrative tribunals, the “finality” that precludes

judicial redetermination of the merits, Enterprise Wheel,

supra, 363 U.S. at 596, has always been considered

compatible with the availability of some meaningful

judicial review. Such review has been regarded as

imperative to insure that the discretion entrusted to the

primary decision-maker remains within lawful bounds.

Compare Dunlop v. Bachowski, 421 U.S. 560 (1975);

Citizens to Preserve Overton Park v. Volpe, 401 US.

402 (1971); Leedom v. Kyne, 358 U.S. 184 (1958).

The propriety of judicial review for fundamental

errors is especially compelling in airline system board

arbitrations. In these cases, unlike the usual case, the

obligation to arbitrate does arise “solely from operation

of law,” and is not the product of voluntary bargaining.

Compare Gateway Coal Co. v. United Mine Workers,

414 U.S. 368, 374 (1974). The assent to an agreement

establishing the arbitration board here was compelled

by Section 204 of the Railway Labor Act, 45 U.S.C.

$184. As this Court has recognized, an adjustment

board created pursuant to Section 204 serves as “a

public agency, not as a private go-between.” /nter-

national Ass’n. of Machinists v. Central Airlines, 372

U.S. 682, 695 (1963). quoting Bower v. Eastern

Airlines, 214 F.2d 623, 626 (3d Cir. 1954); Washington

Terminal Co. v. Boswell, 124 F.2d 235, 244 (D.C. Cir.

1941). Just as in other contexts where this Court has

recognized that Congress did not intend to deny judicial

redress to a party aggrieved by the clearly unlawful

action of a public agency, see Commissioner v. Shapiro,

U.S. (No. 74-744, March 8, 1976); Dunlop

v. Bachowski, supra; Leedom vy. Kyne, supra, the

Congressional mandate here for judicial interdiction of

“wholly baseless” awards or those “indisputably

without foundation” must be given full effect. Unusual

but undisputed facts established that enforcement of

the award in this case was precluded under those

standards.

3. The court of appeals did not rest on that analysis,

but emphasized an additional, peculiar feature of the

case: the arbitral function had never been performed.

The Chairman, who spoke for the adjustment board,

did not interpret the collective bargaining agreement in

light of the evidence of custom and practice presented

to him at the hearing. Nor did he apply “his knowledge

of the common law of the shop” or his judgment of

“the effect upon productivity” of the particular result

reached. Compare United Steelworkers yv. Warrior &

Gulf Navigation Co., 363 U.S. 574, 582 (1960). In

short, the Chairman made none of the judgments that

are peculiarly those of the arbitrator, but instead

disposed of the case on the basis of the non-existent

“agreement” allegedly made by the Northwest repre-

sentatives during arbitration proceedings. The Chairman

treated that phantom “agreement” as having withdrawn

from the dispute the issues of interpretation and prior

practice. (Pet. 24a.)°

ALPA’s belated acknowledgement that no such “‘agree-

ment” had ever occurred removed the only prop

supporting the award. Under these circumstances the

®That this was the sole basis for the award was readily

apparent from the face of the award and from the Chairman’s

letter to the Northwest representatives on the board. Both courts

below, moreover, found as a fact that the award was “based” on

a Clear mistake of fact. The court below thus did not construe

adversely a “mere ambiguity” in the opinion accompanying the

award, as disapproved in Enterprise Wheel, supra, 363 U.S. at

598.

1

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12

court below properly concluded that the award should

be vacated, just as a court would necessarily set aside

an award indicating on its face that the arbitrator had

exceeded his jurisdiction. (Pet. 25a.)’

The court of appeals correctly concluded that the

policy favoring arbitral resolution of labor disputes

would be disserved by the enforcement of the instant

award. The court did not “overrule” the arbitrator here,

compare Enterprise Wheel, supra, 363 U.S. at 599, for

the court did not even purport to interpret the

contract. It simply acknowledged that the non-existent

“asreement” was an improper basis for the award, and

remanded the case so that an arbitration board could

make a dispositive interpretation of the contract. It is

only because of the court’s decision that an arbitrator

will now render an interpretation, as contemplated in

Enterprise Wheel and intended by the parties when they

established the board of adjustment. This result hardly

involves impermissible judicial intrusion into the

arbitration process, as alleged by petitioner.

7Confusingly labelling the pattern of facts presented here as a

“ ‘reverse-Enterprise’ situation” (Pet. 9), petitioner contends that

a reviewing court should indulge every ambiguity in favor of

enforcement of an award. (Pet. 11.) But here the face of the

award and the concession of petitioner that the “stipulation” on

which it was based had never occurred removed any doubt that

the award was without foundation. The circumstances thus

furnished the “positive assurance” petitioner demands. (Pet. 11.)

13

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

PHILIP A. LACOVARA

Hughes Hubbard & Reed

Attorney for Respondent

Of Counsel:

DAVID A. RANHEIM

Dorsey, Marquart, Windhorst,

West & Halladay

May 1976

eR So ben Cee awe as