Petition for Writ of Certiorari — O'Neill v. Continental Airlines, Inc., 125 S. Ct. 614 (2004) (No. 04-378)
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Supreme Court, U.S.
FILED
O4 378SEP16 2004
No. OFFICE OF THE CLERK
gn The
Supreme Court of the Anited States
RAMON E. O’NEILL
Petitioner,
Vv.
CONTINENTAL AIRLINES, INC.,
and
_ JAMES BALDRIDGE; WILLIAM MANN; LARRY
DUNN, individually and as representative of a class of
persons similarly situated who are referred to as LPP
CLAIMANTS.
Respondent.
On Petition For A Writ of Certiorari
To The United States Court OF Appeals
For The Third Circuit
VOL I
PETITION FOR A WRIT OF CERTIORARI
Ramon E. O’Neill, Pro Se
7424 SW 129 Ct.
Miami, FL. 33183 i?
(305) 386-4866 ?
QUESTION PRESENTED
The Railway Labor Act establishes a “mandatory
arbitral mechanism to handle disputes growing out of
grievances or out of the interpretation or application of
agreements concerning rates of pay, rules, or working
conditions.”” Norris, 512 U.S. at 248 (citing 45 U.S.C.
153, First (1)).
The Court of Appeals for the Third Circuit, in a
bankruptcy proceeding involving Continental Airlines,
Inc.; James Baldridge; William Mann; and Larry Dunn
(Respondents) acknowledge that Continental had not
rejected a collective bargaining agreement that affords
continuing mandatory arbitral rights to all former Eastern
pilots. To reject a collective bargaining agreement, a
debtor must first engage in collective bargaining with the
authorized bargaining representative in an attempt to
reach a mutually satisfactory modification of the
agreement, and then apply for court approval after notice
and a hearing. 11 U.S.C. § 1113.
The Court of Appeals for the Third Circuit noted
on a previous decision precedential to this case that
“Consistent with federal courts’ role relating to minor
disputes i.e., to protect the jurisdiction of the arbitration
board, federal courts cannot inquire into the merits of an
underlying dispute except to the extent necessary to
determine its proper characterization as minor or major.”
Chicago & Northwestern Transp., 829 F.2d at 1428. Nor
may the courts decide what remedy is appropriate if the
agreement is interpreted to require recovery of remedy
General Com of Adj., United Transp. Union v. CSX R.R.
893 F.2D 584, 592-593 (3®” Cir. 1990) “ [citing 522 U.S.
1114(1998) and 125 F.3d 120 (1997) }.
The Supreme Court decided that “Nor may a party
circumvent the remedial powers of an adjustment ‘board
through methods of review outside the RLA” Brotherhood
Of Locomotive Engineers v. Louisville & Nashville R.R.
li
373 U.S. 33, 38-39 (1963) (“BLE”). In BLE the Supreme
Court based its holding on the principle that “the process
of decision through the Adjustment Board cannot be
challenged collaterally by methods of review not provided
for in the statute.”
James Baldridge; William Mann and Larry Dunn,
not being the collective bargaining representative of, thus
not having the power to settle the claims of the LPP
Claimants nor any other Eastern pilot, were certified as a
class, orchestrated by Class Counsel and Continental
Airlines, Inc. in order to circumvent the arbitration.
Continental’s and the Class counsel’s collusion illegally
bypassed the arbitral forum with the foreknowledge that
Continental had participated in an arbitration which
merged only a portion of the Eastern Pilots Seniority List
into Continental, illegally excluding Eastern pilots’
representation therein. They then withheld that legally
relevant information from the Bankruptcy Court and
presented perjurious statements in the bankruptcy
proceedings concerning the merger arbitration,
constituting deception and fraud, and violating previous
Supreme Court rulings.
The question presented is whether, knowing these
circumstances, the Court of Appeals erred in holding that
those asserted arbitrational rights and other rights
contained within the collective bargaining agreement
could be dismissed by non-authorized representatives of
employees under a collective bargaining agreement, when
both the Supreme Court and this very same Court of
Appeals, itself, have affirmed the same collective
bargaining agreement rights? LPP Claimants v.
Continental Airlines, Inc., 125 F.3d 120 (1997) 522 U.S.
1114 (1998).
ill
TABLE OF CONTENTS
Page
QUESTION PRESENTED.......-----+s-eeeeeeseeeeereceeeeerees i-
TABLE OF AUTHORITIES .........-.-seeeeeeseeeeeerceeseeee vi
INTRODUCTION. .......----00sceeceeeeecncseceereceeeneneeceeees 1
OPINIONS BELOW. ..........-2c-seeeeececeeeereeeeseeseeeees eee 3
JURISDICTION. ........-.-.eeeeeecenenccecererceeesececene cones 2
STATUTES INVOLVED. ........-.sceeeeeceeeeceerenseeerseesers .
STATEMENT OF THE CASE
I Background..........cssseeseceecseeeeeensenecerersnescnesees a
IL The First Bankruptcy Court Decision...........-..++-++ 10
Ill. The First District Court eS sc susiuntnsineanne
IV. The First Court of Appeals Decision. 11
V. The Second Bankruptcy Court Decision..............+0++- 12
VI. The Third Bankruptcy Court Decision. «3
VII. The Second District Court Decision............-ssrsssre" 13
VIII. The Second Court of Appeals Decision. 14 ;
IX. The Third Court of Appeals Decision..........-.-.--.0-s-+-+- 15
X. The Fourth Bankruptcy Court Decision . 15
,
iv
XI. The Eastern District of Virginia
Bankruptcy Court Decision. 16
SUMMARY OF ARGUMENT............c.sccsscorssessnssenseesensenses 17
ARGUMENT - . 19
I.
THE DECISION OF THE COURT OF
APPEALS NOT ONLY REVERSES
CONTINENTAL LBUT IT ALSO
VIOLATES WELL ESTABLISHED
PRECEDENTS OF THIS COURT.AND
THE RAILWAY LABOR ACT.| ...........cccccccsscseeee coves 20
THE DECISION OF THE COURT OF
APPEALS FOR THE THIRD CIRCUIT IS
NOT ONLY INTERNALLY INCONSISTENT
WITH ITS PREVIOUS RULING IN
CONTINENTAL I BUT IS ALSO
INCONSISTENT WITH THE FIRM DECISIONS
OF THIS COURT AND CREATES A SPLIT
WITHIN THE JUDICIAL CIRCUITS THAT THIS
COURT SHOULD RESOLVE. ..... w24
Il. THE CERTIFICATION OF A CLASS BY
INDIVIDUALS WHO ARE NOT THE
COLLECTIVE BARGAINING
REPRESENTATIVE AND THE ACTIONS
WHICH LED TO A SETTLEMENT
AGREEMENT, ORCHESTRATED BY
CONTINENTAL ARE: (1) IN DIRECT
VIOLATION OF THE RAILWAY LABOR ACT;
(2) ARE IN VIOLATION OF THIS COURT’S
FIRM DECISIONS IN REGARDS TO THE ACT;
AND (3) ARE IN VIOLATION SECTION 1113
OP TEES BANE RUT CY CONDE, cccrecrcccccsresssesesrsescessece .28
CONCLUSION ........cecccsccosccsrcocscesccecrscccscsessssssssssssssossesoess 30
TABLE OF AUTHORITIES
CASES
Adventure Resources, Inc. v. Holland,
137F.3d 786, 796 (4 Cir.),
cert. denied, 522 U.S. 962 (1998)
American Flint Glass Workers Union v.
Anchor Resolution Corp.,
197 F.3d 76, 82 (3d Cir. 1999)
Andrews v. Louisville & Nashville R.R.
406 U.S. 320 (1972)
Bhd. Of locomotive Eng’rs v.
Louisville &Nashviile RR.
373 U.S. 33 (1963) |
Century Brass Prods. v. UAW
(In re Century Brass Prods., Inc.),
795 F.2d 265, 272 (2d Cir.),
cert. denied 479 U.S. 949 (1986)
Century Indem. Co. v. National Gypsum Co.
(In the matter of Nat’l Gypsum Co.),
208 F3d 498, cert. denied, 531 U.S. 871 (2000)
Chicago & Northwestern Transp.,
829 F.2d at 1428
Consolidated Rail Corp. v.
Railway Labor Executive Associations
491 US. at 299 (1989)
Conrail
Page
26, 27
20
i, 22
2, 23,21
18, 20, 21,
22
CASES
Eastern Airlines v. ALPA,
861 F.2d 1546 (11™ Cir. 1988).
Elgin, Joliet & E. Ry. V. Burley,
325 U.S. 711 (1945)
Federal’s Inc. v. Edmonton Inv. Co.,
555 F.2d. 577, 579 (6" Cir. 1977)
General Com of Adj.,
United Transp. Union v. CSX R.R.,
893 F.2D 584, 592-593 (3"” Cir. 1990)
Hawaiian Airlines v. Norris,
Norris, 512 U.S. 246 (1994)
Hays and Co. y. Merrill Lynch
885 F.2d 1149 (3d Cir. 1989)
In re Ionosphere Clubs, Inc.,
105 B.R. 761 (Bankr. S.D.N.Y. 1989)
In re Ionosphere Clubs.,
922 F. 2d 984 (2™ Cir. 1990)
cert. denied, 502 U. S. 808 (1991)
In re Continental Airlines, Inc.
125 F.3d 120 (3™ Cir. 1997)
cert. denied, 522 U.S. 1114 (1998)
Continental I
Page
20
27
i, 21
i, 13, 18,
20
im io
5, 6
2, 6, 16
i, ii, 2, 3, 11, 14,
15, 16, 18, 27, 28
—
CASES
In re US Airways Group, Inc. et al
Case No. 02-83984-SSM,
Bankruptcy Court Ruling for the Eastern
District of Virginia. March 7, 2003
In re of the Eastern
Air Lines Pilots
System Board of Adjustment
September 22, 1989
Elkouri Arbitration Award
In re Roth American, Inc.,
975 F.2d 949, 957 (3d Cir. 1992)
In the Matter of an Arbitration between
Eastern Air Lines, Inc. and
Airline Pilots Association,
Kasher, arbitration (August 4, 1992)
In the Matter of the Pilot Seniority
Integration Arbitration among People
Express Pilot Merger Committee and
Continental Pilot Merger Committee and
Frontier Pilot Merger Committee and
Continental Airlines, Inc, August 13, 1991
Ross Arbitration Award
Massachusetts Air Conditioning &
Heating Corp. v. McCoy,
196 B.R. 659, 663 (D. Mass. 1996)
NLRB vy. Bildisco & Bildisco,
465 US. 513 (1984)
Bildisco
Page
16-17
5-6
26
6-7
26
25, 26, 27
CASES
Norfolk & W. Ry. v. American Train
Dispatchers’ Ass’n,
499 U.S. 117, 136 n.2 (1991)
Protective Committee v. Anderson,
390 U.S. 414 (1968)
Public Law 85-726 Title IV
Air Carrier Economic Regulation
Tool & Die Makers Local lodge
No., 113 v. Buhrke Indus., Inc., (1996)
UFCW Local 211 v. Family Snacks, Inc.
(In re Family Snacks, Inc.),
257 B.R. 884, 907n.19 (B.A-P. 8” Cir. 2001)
Union Pac. R.R. v. Sheehan,
439 US. 89, 91, 93 (1979)
United Steelworkers of Am. v.
Enterprise Wheel & Car Corp.,
363 U.S. 593, 596-97 (1960)
Wien Air Alaska, Inc. v. Bachner,
865 F.2d 1106, 1111 & n.5 (9 Cir. 1989)
18
10
26
27
26, 27
- STATUTES
9 U.S.C. (Arbitrations)
11 U.S.C. § 365
11 U.S.C. § 502 (b) (7)
11 U.S.C. § 1113
28 U.S.C. § 1254(1)
45 U.S.C. § 151
45 U.S.C. § 153
45 U.S.C. § 159
45 U.S.C. § 184
Page
17
4, 29
12, 14
i, 4, 17, 27
4, 20
TABLE OF CONTENTS
APPENDIX
VOL I
Title and Description
Opinion from the United State Court of
Appeals for the Third District.
March 5,2004.
Denial of petition for re-hearing and motions
of compliance by all parties from the
United States Court of Appeals for the
Third District. April 23, 2004
Memorandum Order from District Court.
Court did not address the merit of the appeal.
March 31, 2003
Memorandum Order from District Court
Court denial of motion for rehearing.
April 28, 2003
Final Order and Judgment of Dismissal
Order appeal from Bankruptcy Court
January 31 2002.
Order Re: Docket No. 118
Order to compel with the settlement
agreement- injunction on my right to
arbitrate. May 02, 2002.
In re Continental Airlines, Inc.,
125 F.3d 120 (3™ Cir. 1997)
Pages
11-18
19-20
21-25
Title and Description
Memorandum Opinion from the
District Court November 29, 1995
Railway Labor Act
Bankruptcy Code § 365
11 U.S.C. § 365
Bankruptcy Code § 1113
11 U.S.C. § 1113
Before the Eastern Air Lines Pilots
System Board of Adjustment
Elkouri Arbitration Award
September 22, 1989
Labor Protective Provisions Arbitration 7
Kasher Arbitration Award
August 4, 1992
Pages
67 — 103
105 — 157
159-177
179 — 183
185 —216
217 —235
a il inal a
TABLE OF CONTENTS
APPENDIX
VOL Il
Title and Description
In the Matter of the Pilot Seniority Integration
Arbitration among People Express Pilot
Merger Committee and Continental Pilot
Merger Committee and Frontier Pilot Merger
Committee and Continental Airlines, Inc ,.
Ross Arbitration Award,
August 13, 1991
United States of America
Dept. of Transportation, Docket 47390
Public Law 85-726 Title IV
Air Carrier Economic Regulation
Petition to National Mediation Board,
Request for Arbitrators selection panel.
January 29, 2002
Bankruptcy Code Rule 6006
Bankruptcy Code Rule 9014
Bankruptcy Court Ruling for the District of
Delaware, granting some Eastern pilots the
right to arbitrate. December 17, 2003
Bankruptcy Court Ruling for the Eastern
District of Virginia. March 7, 2003.
Pages
237 — 345
347 — 355
357 — 363
365 — 366
367 — 368
369 — 370
371 — 380
381 — 408
XIV
Protective Committee v. Anderson,
390 U.S. 414 (1968) 409 — 448
In The
Supreme Court of the United States
October Term, 2004
No.
RAMON E. O’NEILL
Petitioner,
v.
CONTINENTAL AIRLINES, INC.,
and
JAMES BALDRIDGE; WILLIAM MANN; LARRY DUNN;
individually and as representative of a class of persons
similarly situated who are referred to as LPP CLAIMANTS.
Respondents.
PETITION FOR A WRIT OF CERTIORARI
I, Ramon E. O’Neill, respectfully petition for a writ of
certiorari to review the judgment of the United States Court of
Appeals for the Third Circuit. The Court of Appeals
previously held that Continental Airlines, Inc. (“Continental”)
did not reject the Eastern Pilots Collective Bargaining
Agreement (“EPCBA”) that affords me and the other Eastern
pilots the right to arbitration and the arbitrational tribunal to
resolve disputes under specified circumstances described
within the EPCBA in accordance with the Railway Labor Act
(“RLA”). Disregarding the decisions of this Court, the Court
of Appeals for the Fifth Circuit decision and its own
decisions, the Court of Appeals for the Third Circuit has
reversed itself and has abrogated all rights contained within
the unrejected EPCBA. Thus, Continental obtained results
that would only have been available had the EPCBA been
timely and properly rejected during Continental’s bankruptcy
proceedings. Had the RLA (45 U.S.C.) been properly
followed the results would have been different.
Accordingly, the Third Circuit Court of Appeals
effectively nullified the RLA (45 U.S.C.) which imposes a
mandatory arbitral mechanism to handle disputes growing out
of grievances or out of the interpretation or application of
agreements concerning rates of pay, rules, or working
conditions, and further nullified Bankruptcy Code 11 U.S.C.
1113, which imposes detailed restrictions on the ability of a
company in bankruptcy to rid itself of obligations under a
collective bargaining agreement (“CBA”).
Review is warranted because the question presented
raises a recurring issue of paramount importance regarding
companies trying to circumvent the RLA utilizing the
Bankruptcy Codes and the effect of non-rejection on
continuing rights under a CBA after a bankruptcy proceeding.
This Court’s review is essential to resolve the conflicts
between this decision and the decisions below: the decision of
this Court in LPP Claimants v. Continental Airlines, Inc., 125
F.3d 120, 522 U.S. 1114 (1998); the decision of this Court
and the Court of Appeals for the Fifth Circuit in Century
Indem. Co. v. National Gypsum Co. (In the matter of Nat’l
Gypsum Co.), 208 F3d 498, cert. denied, 531 U.S. 871 (2000);
the decision of the Court of Appeals for the Second Circuit, Jn
re Ionosphere Clubs, Inc., 922 F.2d 984 (2d Cir. 1990); the
decision of the Court of Appeals for the Third Circuit in, Hays
and Co. v. Merrill Lynch, 885 F.2d 1149 (3d Cir. 1989); the
jurisdiction of the arbitral tribunal; and the rights asserted
under the RLA.
OPINIONS BELOW
The opinion of the United States Court of Appeals for
eer, eee
3
the Third Circuit is not reported, but is reprinted at pages la-8a
of the Appendix to this Petition (“Pet. App.”). The denial of the
United States Court of Appeals for the Third Circuit, on
petition for panel rehearing, Pet. App. 9a. The decision of the
United States District Court for the District of Delaware is
unpublished, but is reprinted at Pet. App. 1 la- 18a. The denial
of the United States District Court for the District of Delaware
on motion for re-hearing en banc Pet. App.19a- 20a. The order
from which this appeal originally is taken of the United States
Bankruptcy Court for the District of Delaware is reported, and
reprinted at Pet. App. 21a-25a. The order to compel from the
United States Bankruptcy Court for the District of Delaware, is
reprinted. Pet. App. 27a-29a.
An earlier decision from this Court and the United
States Court of Appeals for the Third Circuit in this case is
reported at 125 F.3d 120, 522 U.S. 1114 (1998); and is
reprinted at Pet. App. 31a — 66a. The decision of the United
States District Court for the District of Delaware from which
that appeal was taken is unpublished, but is reprinted at Pet.
App. 67a — 104a.
JURISDICTION
The judgment of the Court of Appeals was entered on
March 05, 2004. Pet. App. la-8a. I filed for a rehearing on
March 23, 2004, which was denied by order dated April 23,
2004. Pet. App.9a. The jurisdiction of this Court is invoked
under 28 U.S.C. § 1254(1).
An extension of time within which to file a petition for
a writ of certiorari was granted on July 12, 2004, which
extended the time to September 20, 2004.
STATUTES INVOLVED
This case involves 45 U.S.C , the Railway Labor Act;
11 U.S.C. § 365 and § 1113 of the United States Bankruptcy
Codes; which are set forth respectively at Pet. App. 105a —
158a, Pet. App. 159a — 178a and Pet. App. 179a — 183a
STATEMENT OF THE CASE
Background
This Court, as well as other courts following the
interpretation of this Court, has concluded that the firm and
longstanding policy under the RLA of deferring to the
arbitration mechanism established by the RLA precludes this
Court and any other court from deciding the merits of a
dispute. For that reason, the courts have declined to make any
findings. In this case, the debtor has effected a distress
termination of the EPCBA utilizing a no-opt out class
certification and totally ignoring Bankruptcy Code 1113 and
the RLA.
The EPCBA is composed of 43 sections and 64 letters
of agreement. Continental has only sought relief from one
section of the agreement, the seniority integration section
between the Eastern pilots and the Continental pilots.
Continental obtained this relief without utilizing the
_ Bankruptcy Code 1113 procedure. Instead, Continental
presented to the bankruptcy court and subsequent courts the
argument that the relief from seniority integration is warranted
because it was a requirement from the investors in order to
invest in the New Continental and emerge from bankruptcy. It
was part of the confirmation plan. The merger and seniority
rights contained in the EPCBA are part of an on-going
arbitration. The other 42 sections and the other 63 letters of
agreement contained in the EPCBA have never been addressed
or rejected in the bankruptcy proceedings. In light of this,
5
Continental orchestrated a class action, and with the help of
class counsel, James Baldridge, William Mann, and Larry
Dunn, a settlement agreement was put forward that, if affirmed
by this Court, will totally nullify the RLA and Bankruptcy
Code 1113.
In early 1986, Eastern and ALPA entered into a CBA,
governed by the RLA, 45 U.S.C. 151 et seg. In re Ionosphere
Clubs, Inc., 105B.R. 761, 762 (Bankr. $.D.N.Y. 1989), that
included Labor Protective Provisions (“LPP”). Under these
LPPs, “ Eastern pilots secured protection of their seniority
rights in the event of a merger between Eastern and another
airline carrier” by requiring the “integration of Eastern’s pilots
seniority list with the merging carrier’s pilot seniority list.” Jd
Less than twenty-four hours after the parties entered into the
EPCBA, Texas Air Corporation, Parent Corporation of
Continental Airlines, Inc. (“Continental”), acquired Eastern.
ALPA subsequently concluded that Continental and
Eastern had effectively merged, as defined by the LPPs. When
Eastern disagreed with this conclusion, ALPA initiated
arbitration before the System Board of Adjustments (“SBA”),
the arbitral panel responsible under the RLA for adjudicating
disputes under the agreement. Eastern Air Lines, Inc. v. ALPA,
861 F.2d 1546, 1549 (11™ Cir. 1988). In response, Eastern
sought a declaratory judgment that there was no collective
bargaining agreement between the parties, on the ground, inter
alia, that the parties disagreed about the meaning of several
provisions of the purported EPCBA, including the LPPs. Jd.
The Court of Appeals for the Eleventh Circuit ultimately ruled
in ALPA’s favor, holding that EPCBA was in effect, and that
the parties were obligated to arbitrate their disputes regarding
the meaning of the ambiguous provisions. Jd. 1550, 1555.
The arbitration previously initiated by ALPA then
proceeded, with the SBA addressing a number of preliminary
questions regarding the meaning of the LPPs.
In an opinion authored by the neutral referee, Professor
Frank Elkouri, the SBA construed the Agreement to st
incorporate LPPs that provide the Eastern pilots with the right
6
to seniority integration upon the occurrence of certain defined
events, including a merger Pet. App.185a-216a (quoting full
text of provisions held to be incorporated). The arbitrator also
interpreted the LPPs under the EPCBA to create a continuing
obligation:
[T]he right of pilots to know the general scope of their
contractual LPP protection, and their right to insist that the
Company likewise know, and their right to insist that the
Company not deny the existence or general scope of the
contractual LPP protection, are all coztinuing rights: each
and every day that these rights are denied to the pilots by the
Company, their right to protest by grievances arises anew.”
Id. at 7 (emphasis added) Pet. App 193a.
The Elkouri / SBA decision became part of the EPCBA.
It includes Sections 2(a), 3 and 13 of the Allegheny-Mohawk
LPP’s as cited in the award Pet. App. 216a.
This decision was never appealed at the respective
District Court by Eastern nor by Continental. Neither Eastern
nor Continental asked the bankruptcy court for relief from this
arbitration award under Bankruptcy Code § 1113.
Whether a merger had in fact occurred was not before
this arbitrator and/or the SBA, and before the parties could
proceed to the next step, Eastern and its affiliates filed for
bankruptcy in the Southern District of New York. See Jn re
Ionosphere Clubs, Inc., 105 B.R. at 763. Citing the automatic
stay in section 362 of the Bankruptcy Codes, Eastern refused to
submit to further arbitration, and the Bankruptcy Court denied
ALPA’s request for relief from the stay. Jd. at 765.
On appeal, the District Court reversed, Jn re Ionosphere
Clubs, Inc., 114 B.R. at 381, and the Court of Appeals for the
Second Circuit affirmed, 922 F.2d 984 (2d Cir. 1990), holding
that the application of the automatic stay to allow Eastern to
avoid its obligation to arbitrate the LPP dispute was
impermissible in the “absence of the debtor’s compliance with
the requirements of section 1113 [of the Bankruptcy Code]”.
In April 1991, ALPA and Eastern proceeded to
arbitration before arbitrator Richard Kasher. Continental was
7
invited to participate in the arbitration. Pet. App. 217a-235a.
By this time, Continental had filed for bankruptcy. Despite the
earlier Second Circuit decision in Eastern’s bankruptcy,
Continental refused to arbitrate, repeating Eastern’s argument
that the arbitration was stayed under section 362 of the
Bankruptcy Code. Arbitrator Kasher disagreed, ruling in
August 1992, that he had jurisdiction over the LPP dispute and
could render a determination of the appropriate remedies;
relying on the Second Circuit’s decision in Eastern’s
bankruptcy, he rejected Continental’s suggestion that the
arbitration was barred by the automatic stay. Pet. App. 231a-
235a. He scheduled hearings on the merits of the LPPs dispute
to commence in February of 1993. |
In light of the pending Kasher Arbitration, Continental
protected some selected Eastern pilots, listed on the Eastern
pilots seniority list. By doing this, Continental unilaterally
created a de facto merger and determined where in the
Continental seniority list these selected Eastern pilots
| would be placed, without informing the bankruptcy court,
| as required by the Bankruptcy Code Rule 6006 and 9014.
Pet. App. 367a-369a
| Continental violated 29 CFR 10-1204.1 and 1204.2
when it unilaterally changed the seniority and LPP provisions
of the CBA. Code of Federal Rules 29 CFR 10-1204.1 and
1204.2 states:
ct i a tel he
§ 1204.1 Making and maintaining contracts.
“It is the duty of all carriers, their officers, agents, and
employees to exert every reasonable effort to make and
maintain contracts covering rates of pay, rules, and working
conditions.”
§ 1204.2 Arbitrary changing of contracts.
“No carrier, its officers, or agents shall change the rates
of pay, rules, or working conditions of its employees, as a class"
as embodied in agreements except in the manner prescribed in
such agreements or in section 6 of the Railway Labor Act.”
On August 13, 1991, Arbitrator Ross issued an award,
In the Matter of the Pilot Seniority Integration Arbitration
among People Express Pilot Merger Committee and
Continental Pilot Merger Committee and Frontier Pilot
Merger Committee and Continental Airlines, Inc , (“Ross
arbitration”) Pet. App. 237a-345a, citing his reasons for
overruling Continental’s unilateral placement of those selected
Eastern pilots, and reshuffling all pilots contained within the
Continental Seniority list including the selected Eastern pilots.
“Because the CAL pilots hired after April 1987 were hired
for the benefit of Eastern and not Continental, it would be
unfair to place them ahead of the FMRs.” Pet. App. 284a.
“In this regard, it would be particularly inequitable to
elevate the pilots hired after April 1987 as potential strike
replacements for Eastern, as they were surplus to
Continental’s operational needs.” Pet. App. 289a.
Continental had filed for bankruptcy protection on
December 10, 1990. Continental did not seek protection from
the Ross arbitration through the bankruptcy process.
Nowhere in the bankruptcy process did Continental:
1. Notify the bankruptcy court that it had unilaterally merged
some Eastern pilots into Continental Pilots Master Seniority list
and assumed the EPCBA.
~ 2. Notify the bankruptcy court that it had unilaterally
determined the seniority integration of the Eastern pilots.
3. Seek relief under 11 U.S.C. § 1113 to exclude the remaining
Eastern pilots from the Ross arbitration process.
Instead Continental in September of 1993 sought relief
from the EPCBA LPPs in bankruptcy court as part of the
Confirmation Plan. In doing so Continental violated 45 U.S.C.
(RLA) and 11 U.S.C. 1129 a (3) .
11U.S.C. 1129 a(3) states:
(3) The plan has been proposed in good faith and not by any
means forbidden by law.
On December 22, 1992, Continental filed in
Bankruptcy Court a motion seeking relief from the Eastern
pilots’ arbitration, even when it was aware that some Eastern
pilots in Eastern Air Lines seniority list had been unilaterally
merged into Continental’s seniority list. Under the RLA and as
noted on 29 CFR 10-1204.1 and 1204.2, Continental was fully
aware that once one Eastern pilot was merged it was obligated
to merge the entire Eastern Pilots’ seniority list.
Continental from 1989 to 1993 mounted a heavy
campaign against organized labor. Being fully aware that a
merger which included Eastern pilots would have brought
organized labor (ALPA) into the Continental property,
Continental decided to avoid arbitration with the Eastern pilots
at all cost. As noted in the Ross arbitration Continental only
agreed to merge non- unionized pilots, Pet. App.248a, 30l1a
and 336a, a clear violation of 29 CFR 1205.2 ~
§ 1205.2 Employees’ Bill of Rights.
“The provisions of the third, fourth, and fii.a
paragraphs of section 2 are by law made a part of the contract
of employment between the carrier and each employee and
shall be binding upon the parties regardless of any other
express or implied agreements between them. Under these
provisions the employees are guaranteed the right to organize
without interference of management, the right to determine
who shall represent them, and the right to bargain collectively
through such representatives. This section makes it unlawful
for any carrier to require any person seeking employment to
sign any contract promising to join or not to join a labor
organization. Violation of the foregoing provisions is a
misdemeanor under the law and subjects the offender to
punishment.”
10
Another violation of the RLA and 29 CFR 10-1204.1
and 1204.2, which the courts have conveniently ignored
occurred when Continental decided to dispose of some Eastern
international routes without transferring Easter pilots with
those routes as required by the LPPs of the unrejected EPCBA.
It is Eastern pilots’ rights to be transferred with those
international routes. As reflected on Pet. App. 350a,
Continental, denied rights accorded to me by the Department of
Transportation and the LPPs . This was done to obtain higher
values for these assets by eliminating labor requirements
specified by the Labor Protective Provisions contain in Public
Law 85-726 Title IV —- AIR CARRIER ECONOMIC
REGULATION — Sections 401 K 1 through 5, Pet. App. 361a-
362a. Compliance with Labor Legislation clearly mandates the
protection of pilots with the transfer of international routes.
The First Bankruptcy Court Decision
In April of 1993, notwithstanding arbitrator Kasher’s
August 1992 ruling (and the decision of the Court of Appeals
for the Second Circuit in the Eastern bankruptcy case), the
Delaware Bankruptcy Court ruled that the Kasher arbitration
was prohibited by the automatic stay. The court also
incorporated by reference ruling from February 1993, that the
equitable remedy of seniority integration was a “claim” within
the meaning of the Bankruptcy Code, and could be satisfied by
monetary awards in lieu of specific performance, and that this
claim was not entitled to administrative expense treatment.
The First District Court Decision
After appealing the Bankruptcy Court’s orders to the
District Court, ALPA settled with Continental, but the
individual claimants known as the LPP Claimants, listed
individually, continued the appeal. On that appeal, the District
Court made several rulings. It dismissed as moot the pilots’
appeal from that portion of the Bankruptcy Court’s decision
11
denying administrative expense status to the claims, and it
affirmed the Bankruptcy Court’s ruling that the claims for
equitable relief could be converted to money damages.
However, it also vacated the injunction against the arbitration
on the grounds that the Bankruptcy Court lacked jurisdiction
to issue it. The District Court made these rulings ignorant of
the facts that some members of the class of claimants had been
surreptitiously merged into the Continental seniority list with a
full specific performance award.
The First Court of Appeals Decision
Continental, the LPP Claimants listed individually,
including myself and another group of pilots represented by
separate counsel, the Eastern Pilots Merger Committee
(“EPMC”), also listed individually, appealed to the Court of
Appeals for the Third Circuit. The Court of Appeals affirmed |
125 F.3d 120, 522 U.S. 1114 (1998); (“Continental I”).
The Court of Appeals ruled that “the bankruptcy court
was well within its authority to exercise jurisdiction over the —
issue of the status of the bankruptcy claim[s].” The Court of
Appeals also affirmed the decisions of the lower courts that the
pilots’ seniority rights could be converted to bankruptcy claims
for money damages. Significantly, however, the Court
“limited” its holding to “how the claims should be treated in _
bankruptcy” and “We take care to note the boundaries of our
holding. It is not our purpose to suggest the award the arbitrator
should grant, if an award is warranted upon disposition of the
LPP dispute. Our holding is limited to how the claims should
be treated in bankruptcy. Simply put, we hold that any claim
based on.an award of seniority integration arising out of the
resolution of the LPP dispute will be treated as a claim in.
bankruptcy giving rise to a right of payment.”. Id. .136-38
The Court of Appeals also ruled “Accordingly, we
conclude that Continental is bound by its prior
representations that it has a duty to arbitrate the LPP _
dispute.” Id. 136-38
12
The Second Bankruptcy Court Decision
After the decision in Continental I, a dispute arose over
the scope of the arbitration to be conducted as a result of this
decision. Continental asserted that the Eastern pilots
were entitled to arbitrate only the existence and amount of
bankruptcy claims, i.e., that they had no continuing rights
subsequent to entry of the Confirmation Order.
Continental took the position that any seniority
integration right acknowledged in arbitration would be
subject to the limitations of Bankruptcy Code section -
502(b)(7), 11 U.S.C. § 502(b)(7), and would thus be limited to
one year’s back pay based on Continental’s pay structure as of
January 1991. An attorney for the LPP Claimants agreed to
bring a declaratory judgment action in the Bankruptcy Court to
determine whether § 502(b)(7) applied, and requested class
certification for the action. The LPP claimants had hired Myles
Tralins as the attorney, to exclusively pursue the rights of
arbitration as contained in the EPCBA. Mr Tralins was not
hired for the purposes of any settlement or class certification.
Disregarding the lack of legal standing under the RLA
and utilizing the funds raised by the LPP claimants exclusively
to pursue arbitration, James Baldridge, William Mann, Larry
Dunn, attorney, Tralins, and Continental orchestrated a class
certified by the Bankruptcy Court under Fed. R. Civ. Pr.
23(b)(2). No other LPP claimant besides James Baldridge,
William Mann, and Larry Dunn were notified of the class
certification and its implications.
Lacking notification of the settlement agreement
and its implications, I had petitioned the National
Mediation Board (°“NMB”) to recognize my rights and let
me proceed to arbitration. The NMB granted the request to
exercise my rights to arbitration on January 29, 2002. Pet.
App. 365a.
On January 31, 2002, together with 54 class members, I
objected to the settlement agreement because our rights to
13
settle this dispute under 45 U.S.C. arbitration were being
settled on our behalf without our consent.
The Bankruptcy Court approved the class settlement,
finding it to be “in all respects, fair, reasonable and adequate to
the Class”, despite the fact that I had proven inequitable
treatment within the Class at the hearing. The Bankruptcy
Court and Continental acknowledged at the hearing that
members of the same Class were being afforded positions as
pilots in Continental Airlines with full specific performance
disregarding all previous court rulings. In the RLA extensive
history of arbitration, no carrier has ever been allowed to
merge just some selected pilots of the acquired carrier system
seniority list without addressing the entire seniority list.
The Bankruptcy Court hearing of January 31, 2002
disregarded Norris, 512 U.S. at 248 (citing 45 U.S.C. 153, First
(1) (“mandatory arbitral mechanism to handle disputes growing
out of grievances or out of the interpretation or application of
agreements concerning rates of pay, rules, or working
conditions.”], and approved the settlement. Also discussed was
how the settlement agreement affected my rights against third
parties not protected by the Bankruptcy Confirmation Order.
The Third Bankruptcy Court Decision
On March 6, 2002, Continental filed a motion to
compel me to comply with the settlement order of January 31,
2002. The court, overstepping its boundaries, issued again an
injunction against the arbitration under the pretence of a class
action settlement.
The Second District Court Decision
A total of 54 Eastern pilots appealed the order of the
Bankruptcy Court. The District Court entered an order on April
1, 2003. without addressing the merits of the appeal, it ruled
upon a motion of mootness submitted by Continental. 3
Affirming the Bankruptcy Court’s settlement order, it found
14
the Settlement Order appeal moot, and granted the appellees’
motion.
The Second Court of Appeals Decision
I appealed and argued that: 1. The lower courts had
misunderstood the decision on Continental I. 2. The
Settlement Order violates the order contained in Continental
I. 3. I petitioned the court to revisit Continental I based on the
new evidence that Eastern pilots had been merged into
Continental’s pilot system seniority list (as reflected in the
Ross arbitration). :
The Court of Appeals also noted in its decision that:
“The Bankruptcy Court noted that the Ross arbitration decision
dealt with former People Express pilots; and, while they may
have been Eastern pilots at some point, the arbitration award
was based on the People Express merger.” So, again, another
court recognized the evidence establishing the existence of
some Eastern pilots in Continental's pilot seniority list and their
participation in an arbitration in which Eastern pilots were
supposedly not entitled to participate, but failed to recognize
the violation of the RLA, and thus, the violation of Bankruptcy
Law. No Eastern pilot included in the certified class could
be in the November 1990 Eastern’s Pilot Seniority list and
legally be in the People Express Pilot Seniority list at the
same time, especially when People Express had shutdown
operation on December 29, 1986. .
Continental I had already limited the class members’
relief to money damages. The Court of Appeals, as well as the
lower courts overlooked the inequities of equitable relief within
the Class.
The Court of Appeals in this March 5, 2004 decision
states: “Finally, O’Neill argues that his right to arbitration
survives the settlement. We disagree. If O’Neill were to return
to arbitration, the arbitrator might recognize his right to
seniority integration under the LPPs. However, any amount
award by the arbitrator would be subject to § 502(b)(7)’s cap
‘
15
and would be less than he can recover under the settlement.
Any relief awarded by the arbitrator would be meaningless;
thus, O’Neill’s right to arbitration has been mooted by the
settlement.” Pet. App. 8a. This is a complete reversal from
Continental I, and Hays and Co. V. Merrill Lynch, 885 F.2d
1149, 1158 (3d Cir.1989) and an absolutely egregious
violation of the Railway Labor Act.
The Third Court of Appeals Decision
On March 23, 2004, I petitioned a rehearing from the
Court of Appeals for the Third Circuit. I included a motion of
compliance by ail parties, based on Continental I and the
decision rendered by the court on March 5, 2004. To my
amazement, the Court of Appeals for the Third District would
not rule on the motion of compliance, expressly contradicting
the March 5, 2004 ruling. Again, the court changed its position
and denied a rehearing on April 23, 2004.
The Fourth Bankruptcy Court Decision
Strangely. the Delaware Bankruptcy Court, the same
court which is enjoining me and other Eastern pilots from
proceeding to arbitration, issued a contrary decision on
December 17, 2003, to other individually represented former
Eastern pilots preserving their individual right to arbitration
under Continental I. Pet. App. 376a — 378a.
Following are excerpt of the opinion, Pages 7 through
10 of the opinion:
“We disagree. We conclude that the Respondents’
request for arbitration does not violate the Confirmation Order
or any other order entered in this case. In Continental I, the
Third Circuit upheld the District Court’s dissolution of the
injunction of arbitration. Continental I, 125 F.3d at 136-37. The
Court concluded that section 1113 of the Bankruptcy Code
renders the injunction invalid because Continental failed to ~
reject the CBA. Id. The intent of section 1113 is to preclude
q
16
debtors from unilaterally terminating a collective bargaining
agreement without following its strict mandate. Id. at 137. The
Court consequently held that the discharge injunction could not
apply to the arbitration because enforcing it would have the
effect of permitting Continental to escape its duty to arbitrate
under the CBA. Jd Accordingly, we must follow the law of the
case and conclude that the discharge injunction does not enjoin
the Respondents’ attempt to resume the arbitration under the
CBA.” Id. Pet. App. 376a-377a
“Again, we find that we are bound by the decision of
the Third Circuit in Continental I. In concluding that the right
to seniority integration gave rise to monetary damages,
the Third Circuit determined that the claims were dischargeable
in bankruptcy. Continental I, 125 F.3d at 136. The Third
Circuit, however, limited its holdings to how the claims would
be treated in Continental’s bankruptcy. Id. The Court did not
determine if an award was warranted, whether an award should
be granted or who would be liable should an arbitration award
be granted. Id. At the time it upheld the right to arbitrate under
the CBA, the Third Circuit knew that any award the arbitrator
may enter against Continental was discharged by the
Confirmation Order. It nonetheless concluded that the
arbitration should be permitted to proceed. The facts are no
different now. Thus, we cannot enjoin the arbitration.”
Pet. App. 377a-378a.
The Eastern District of Virginia Bankruptcy Court Decision
In re US Airways Group, Inc. et al Case No. 02-83984-
SSM, (Pet. App. 381a-408a) the court had to address the issues
of collective bargaining agreement under the RLA and
rejection of these agreements through the bankruptcy process.
Citing Continental J and Ionosphere I 922 F.2d 984 (2d Cir.
1990), case law for the case in front of this Court, concludes
that the “firm and longstanding policy under the RLA of
deferring to the arbitration mechanism established by the Act
17
precluded the court in reaching any merits on the dispute.”
The conclusion of this aforementioned case sums it up.
The similarities with our case are identical, but the court for the
Fourth Circuit interprets Continental I differently than the
Third Circuit Court.
“In summary, the court finds that the financial
requirements for a distress termination have been met, and the
court has approved such termination provide the termination
does not violate terms of the collective bargaining agreement
between the debtors and ALPA. The court declines to make a
ruling on that issue, and that dispute will have to be resolve
under the arbitration mechanism established by the collective
bargaining agreement pursuant to the Railway Labor Act.”
Pet. App 407a-408a.
SUMMARY OF ARGUMENT
The Railway Labor Act (“RLA”), as construed by this
Court, permits lower courts neither to interpret disputed
contract terms nor to set aside adjustment board awards except
on the narrow base prescribed in the RLA. Absent rejection,
the contract must be given effect through the adjustment board
mechanism.
This case involves three adjustment board / arbitrator _
awards. The first, Elkouri award reaffirmed that the LPPs were
applicable to the EPCBA. The second, arbitrator Kasher
opinion rendered that the arbitrational tribunal has sole
jurisdiction over the issues. The third, rendered by arbitrator
Ross, recognized the merger of Eastern pilots in the
Continental seniority list. These arbitration’s were not rejected
by either utilizing 9 U.S.C. (Arbitrations), 45 U.S.C. § 159
Fifth & Six (The Railway Labor Act) or 11 U.S.C. § 1113
(Bankruptcy), therefore, the arbitration awards are still in
effect at this time.
The Court of Appeals decision from which this appeal
is taken, conflicts with well established precedents of this
18
Court and the decision in Continental I. Those precedents
mandate exclusive adjustment board jurisdiction over disputed
terms of labor agreements in industries covered by the RLA
disputes growing “out of the interpretation or application of
agreements covering rates of pay, rules, or working
conditions.” Hawaiian Airlines v. Norris, 512 U.S. 246, 252-53
(1994); Consol. Rail Corp. v. y. Labor Executives’ Ass’n, 491
U.S. 299, 303 (1989) (“Conrail”). This decision erroneously
approved court resolution rather than adjustment board
resolution of disputed remedial terms of the CBA.
The Court of Appeals in Continental I , concluded “that
Continental is bound by its prior representations that it has a
duty to arbitrate the LPP dispute” In addition, during the
Continental I proceedings the court was unaware of the
essential fact that Eastern pilots in the Eastern Air Lines
Seniority List had been merged into Continental Pilots
Seniority List.
The Court of Appeals in this last decision
acknowledged that “the Bankruptcy Court noted that the
Ross arbitration decision dealt with former Peoples Express
pilots; and, while they may have been Eastern pilots at some
point, the arbitration award was based on the People Express
merger.” But they erred by not addressing the proviso
contained within the RLA that no pilot from an acquired
carrier, (in this case Eastern, since some of the pilots were on
the Eastern seniority list), could be merged into the seniority
list of the acquiring carrier without addressing the entire pilots
seniority list of the acquired carrier. The Court also erred by
not addressing equitable relief within the Class. The Supreme
Court has previously ruled that equitable relief within the
Class, had to be addressed in light of new findings which
clearly demonstrated inequities within the class. Protective
Committee v. Anderson 390 U.S. 414 (1968), Pet. App. 409a-
448a.
Also, the courts have permitted the actions of three
individuals, notwithstanding evidence that they are not the
collective bargaining representative of the Eastern Air Line
“rr => s ew 4 >
aaa ante asie eekigteP in NE: Wr Re a Hoe a LL Gente ERE COR Wek yt HAE adalat
19
pilots, to orchestrate, along with Continental, the means to
circumvent the obligations contained within EPCBA, i.e., to
arbitrate. The actions of these three and Continental have
effectively nullified the RLA, and have opened new means for
carriers to avoid the obligations contained within CBAs.
Carriers in the future could use a class certification settlement
in lieu of RLA arbitration.
By creating a split within its own judicial circuit and a
split with other judicial circuits over bankruptcy law, the RLA
and violating this Court’s precedents on the appropriate role of
courts in interpreting labor agreements under the RLA, this
decision undermines the RLA, and the unrejected EPCBA.
ARGUMENT
The petitioner is respectfully urging this Court to
review the judgment of the Court of Appeals for the reasons set
forth in this Petition for a Writ of Certiorari: a) to resolve the
conflict of jurisdiction between the RLA and Bankruptcy Code
and b) to resolve the judicial circuit conflict over the effect of
an employer’s failure to reject a collective bargaining
agreement under section 1113 of the Bankruptcy Code.
I emphasize that the decisions of the lower courts
create effective nullifications of 11 U.S.C. § 1113 and also
violates this Court’s well-established precedents under the
RLA. An employer utilizing methods not described under
the mandatory mechanism of the RLA could now
circumvent the resolution of disputes; a process this Court
has ruled on many occasions must be followed.
Collective bargaining representative (unions) will be
forced to seek new and expanded protections against the
negative effects brought about by this decision, not limited to
new legislation, unless this Court acts and reminds the lower
courts of their boundaries and jurisdiction.
OO OLO
20
I. THE DECISION OF THE COURT OF APPEALS
NOT ONLY REVERSES CONTINENTAL I, BUT ALSO
VIOLATES WELL ESTABLISHED PRECEDENTS OF
THIS COURT AND THE RAILWAY LABOR ACT.
Under the Railway Labor Act, interpretative disputes
over labor agreements are subject to exclusive adjustment
board jurisdiction, and resulting awards may be set aside only
on statutorily prescribed grounds. |
The RLA establishes a comprehensive framework for
resolving labor disputes in the rail and airline industries.
Pursuant to that scheme, the statute divides contractual
disputes into two classes. The first class, concern disputes over
the creation of new collective bargaining agreements or
attempts to change the terms of the existing agreements. This is
the class that addresses this case. The RLA establishes a
“mandatory arbitral mechanism to handle disputes growing out
of grievances or out of the interpretation or application of
agreements Concerning rates of pay, rules, or working
conditions.”” Norris, 512 U.S. at 248 (citing 45 U.S.C. § 153,
First (i)). In the airline industry, the Act mandates that Carrier’s
and employee’s representatives establish “board of adjustment”
to arbitrate such disputes.45 U.S.C. § 184. This Court termed
such disputes “minor disputes.” Elgin, 325 U.S. at 723
Adjustment board jurisdiction to resolve minor disputes
is compulsory, binding, and exclusive. Conrail,491 U.S. 303-
04 & n.4; Andrews v. Louisville & Nashville R.R., 406 U.S.
320, 322-25 (1972) (“the notion that the grievance and
arbitration procedures provided minor disputes in the Railway
Labor Act are optional, to be availed of as the employee or the
carrier chooses, was never good history and is no longer good
law”). The reasons for this rule are well established and have
been articulated repeatedly by this Court. First, of course, the
statute demands it. 491 U.S. 303-04 & n.4; 406 U.S. 322-25.
But in addition, this Court has recognized the special
competence of industry arbitrators to resolve such disputes
eS i ante fe Me eC Cen ee Dt lk ee ae co ane ety St See ek MEER ee Soe et cant
21
based on custom and practice in the industry — and in particular
to formulate remedies:
“The federal policy of settling labor disputes by
arbitration would be undermined if courts had the final say on
the merits of the awards....[T]he arbitrators under these
collective agreements are indispensable agencies in a
continuous collective bargaining process. They sit to settle
disputes at the plant level - disputes that require for their
solution knowledge of the custom and practices of a particular
factory or of a particular industry as reflected in particular
agreements.”
eee
“When an arbitrator is commissioned to interpret and
apply the collective bargaining agreement, he is to bring his
informed judgment to bear in order to reach a fair solution to a
problem. This is especially true when it comes to formulating
remedies. There the need is for flexibility in meeting a wide
variety of situations.”
In re United Steelworkers of Am. v. Enterprise Wheel &
Car Corp., 363 U.S. 593, 596-97 (1960). There can be no
question that the exclusive jurisdiction of RLA adjustment
boards extends not just to the substantive rights under a labor
agreement, but, also, to nonfrivolous disputes over agreed
remedies for violation of those rights as well. A core holding of
Conrail was that the burden on the party seeking to invoke
adjustment board jurisdiction is “light.” If the party “asserts a
contractual right to take the contested action, the ensuing
dispute is minor if the action is arguably justified by the terms
of the parties’ collective bargaining agreement. Where, in
contrast, the [party’s] claims are frivolous or obviously
insubstantial, the dispute is major.” Conrail, 491 U.S. at 307.
By making a nonfrivolous assertion to right a particular remedy
under a labor agreement, a party meets its burden to vest the
adjustment board with jurisdiction to decide the issue. ‘.
Thus, for instance, in General Committee of Adjustment
v. CSX Railroad, 893 F.2d 584 (3 Cir.1990), where a railroad
22
sought to sell a line without bargaining over its effects, the
court dismissed a union complaint seeking to enjoin the sale by
noting that [t]he merits of [the] issue[ of the impact on union
jobs] will be before the Adjustment Board as will the question
of what remedy may be appropriate if it decides for the Union.”
Id at 592. Citing Conrail, the court declined to retain
jurisdiction pending arbitration, noting that “(ijn minor
disputes, the Board has full authority to resolve the matter and
can grant a complete and adequate remedy to the prevailing
party.” Id. at 593.
Buttressing the exclusive jurisdiction of adjustment
boards to decide interpretive disputes in the first instance,
judicial review of adjustment board decisions is “among the
narrowest known to law.” Union Pac. R.R. v. Sheehan, 439
U.S. 89, 91, 93 (1979) (quoting the circuit court below, and
noting that “[w]e have time and again emphasized” that the
statutory language specifying three “limited” and “specific”
grounds for review “means just what it says”).
The RLA subsections 3, First (p) and (q) permit federal
courts to set aside adjustment board decisions on only three
bases: (1) failure of the Adjustment Board to comply with the
requirements of the RLA; (2) failure of the Adjustment Board
to conform or confine itself to matters within the scope of its
- jurisdiction; or (3) fraud or corruption. 45 U.S.C. 153, First (p)
and (q).
Nor may a party circumvent the remedial powers of an
adjustment board through methods of review outside the RLA.
Brotherhood of Locomotive Engineers v. Louisville &
Nashville., 373 U.S. 33, 38-39 (1963) (“BLE”). In BLE, the
National Railroad Adjustment Board refused the parties’
request to clarify the scope of a remedial award mandating
“pay for time lost as the rule is construed on the property.” Jd
at 34. The carrier sued for injunctive relief when the union
threatened a strike to enforce its interpretation of the disputed
term. This Court affirmed the lower courts’ judgment that the
union was limited to the judicial enforcement procedure
,
Re re A) i ee ee Ge I See Pe EEE HN SEL SRT.
23
established in section 3, First (p) of the RLA, 45 U.S.C. 153,
First (p), and could not strike to enforce its interpretation. Id
at 35-36. This Court based its holding on the principle that “the
process of decision through the Adjustment Board cannot
be challenged collaterally by methods of review not provided
for in the statute.” Id. at 38.
The Court of Appeals, (Pet. App. 211a) in Continental
I, acting outside its jurisdiction, edited Section 13 (a) of the
Elkouri award as follows by deleting the following underlined
selection:
“Section 13(a): In the event that any dispute or
controversy (except as to matters arising under section 9) arises
with respect to the protections provided herein, which cannot
be settled by the parties within 20 days after the controversy
arises, it may be referred by any party to an arbitrator selected
from a panel of seven names furnished by the National
Mediation Board for consideration and determination. The
parties shall select the arbitrator from such panel by
alternatively striking names until only one remains, and he
shall serve as arbitrator. ited hea and
will be expected, and a decision shall be rendered within 90
davs after the controversy arises, unless an extension of
time mutua ble to all
expenses of the arbitrator shall be borne equally by the
carrier and (i) the o ization or organizatio
representing the e ee or emplo or (i
unrepresented, the employee or employees or group or
groups of employees. The decision of the arbitrator shall be
final and binding on the parties. (Emphasis added)
This set a precedent allowing the courts to be able to
abrogate unilaterally any CBA under the RLA. If this precedent
is allowed to stand, this Court will have allo the
the debtor to abrogate the CBA unilaterally, and de
to do likewise.
a4
The Ross award has been totally misinterpreted. Even
though I’m not a former People Express pilot, Continental
knowingly granted some pilots on the Eastern Seniority list
specific, administrative remedies virtually equal to the LPPs,
while denying them to the majority of Eastern pilots, without
any reference whatever to Bankruptcy law or RLA law. The
RLA does not permit a merger of a few, the whole seniority list
had to be merged.
The courts do not have the jurisdiction (1) to
unilaterally amend a CBA by editing parts of the agreement;
(2) to establish the composition of the members of a Class
which are contained under a CBA within the jurisdiction of the
RLA; (3) to determine how the Class should be merged; (4) to
determine the compensation of the Class; (5) to determine the
date of merger; (6) to interpret the CBA; and (7) to determine
the amount of the last year of compensation, even if this Court
permits the utilization of section 502 (b) (7) of the Bankruptcy
Code as a method to unilaterally abrogate the CBA. These are
exclusive issues requiring arbitration as mandated by the RLA.
Two things are certain: a merger took place, and Continental,
acting outside the mandatory parameters of the RLA, merged
Eastern pilots into Continental.
Il. THE DECISION OF THE COURT OF APPEALS
FOR THE THIRD CIRCUIT IS NOT ONLY
INTERNALLY INCONSISTENT WITH ITS PREVIOUS
RULING IN CONTINENTAL I, BUT ALSO IS
INCONSISTENT WITH THE FIRM DECISIONS OF
THIS COURT AND CREATES A SPLIT WITHIN THE
JUDICIAL CIRCUITS THAT THIS COURT SHOULD
RESOLVE.
The Court of Appeals for the Third Circuit stated
unequivocally in this case that Continental did not reject the
EPCBA that provides the former Eastern pilots certain rights
and benefits.
POO RIT ILD ED ig —— pe RE BEE LEICA DOR DO EBC Br Bn NG LOIN
FOS MOLY ECAP RDY sla RAYA RITE ng ne 08 2
a TI
25
The courts never gave relief of the EPCBA and
Continental never sought relief in their Confirmation Plan of
the other sections of the EPCBA which address pension,
medical, and retirement benefits, etc. This holding (that LPP
rights had been reduced to bankruptcy “claims” ) is _
inconsistent with this Court‘s decision in NLRB v. Bildisco
&Bildisco, 465 U.S. 513 (1984),and in conflict with the
decision of the Court of Appeals for the Fifth Circuit in
Century Indem. Co. v. National Gypsum Co.( In the Matter of
Nat'l Gypsum Co.), 2008 F.3d 468 (5" Cir.), cert. denied,531
U.S. 871 (2000), which expressly holds that, absent rejection,
an executory contract does not give rise to a claim in
bankruptcy. Id. at 507, 508.
In response to this Court’s decision in Bildisco,
Congress enacted Bankruptcy Code 1113. In that section,
Congress “created an expedited form of collective bargaining
with several safeguards designed to insure that employers did
not use Chapter 11 as medicine to rid themselves of corporate
indigestion” Century Brass Prods. v. UAW (In re Century
Brass Prods., Inc.),795 F.2d 265, 272 (2d Cir.), cert. denied
479 U.S. 949 (1986). Section 1113 of the Bankruptcy Code sets
forth detailed procedural and substantive requirements a debtor
must follow before a bankruptcy court may approve the
alteration or rejection of a collective bargaining agreement.
It provides, in two different subsections, that its
provisions are the exclusive means by which a collective
bargaining agreement can be modified. Subsection (a) states
that a debtor may reject a collective bargaining agreement
“only in accordance with the provisions of this section” 11
U.S.C. § 1113 (a). And subsection (f) states that: “[njo
provision of [the Code] shall be construed to permit a [debtor]
to unilaterally terminate or alter any provision of a collective
bargaining agreement prior to the provisions of this section” 11
U.S.C. § 1113 (f)
—
This language “plainly imposes a legal duty on the
26
debtor to honor the terms of a CBA, at least until that
agreement is properly rejected.” Adventure Resources, Inc. v.
Holland, 137¥F .3d 786, 796 (4® Cir.), cert. denied, 522 U.S.
962 (1998). Consequently, if a debtor fails to reject a collective
bargaining agreement, the debtor assumes the agreement by
operation of law. Id. at 798. See also Jn re Roth American,
Inc., 975 F.2d 949, 957 (3d Cir. 1992).
Although the enactment of Bankruptcy Code 1113
altered the means by which a CBA agreement could be
rejected, it did not otherwise alter the applicability of section
365 to such agreements. Adventure Resources, (“in erecting
§ 1113 substantive and procedural obstacles to the unilateral
rejection of collective bargaining agreements, Congress did not
indicate that it intended to otherwise restrict the general
application of section 365 to those agreements”); Tool & Die
Makers Local lodge No., 113 v. Buhrke Indus., Inc.,1996.
Section 1113 applies only to the means by which a collective
bargaining agreement may be rejected; the assumption of such
agreements continues to be governed by Bankruptcy Code 365.
Norfolk & W. Ry. v. American Train Dispatchers’ Ass’n, 499
U.S. 117, 136 n.2 (1991); American Flint Glass Workers Union
v. Anchor Resolution Corp., 197 F.3d 76, 82 (3d Cir. 1999);
Wien Air Alaska, Inc. v. Bachner, 865 F.2d 1106, 1111 & n.5
(9™ Cir. 1989); Massachusetts Air Conditioning & Heating
Corp. v. McCoy, 196 B.R. 659, 663 (D. Mass. 1996).
Thus, except by the means by which it may be rejected,
the treatment of a CBA under section 365, as described by this
Court in Bildisco, remains unchanged. If the agreement is
rejected [in accordance with the requirements of section 1113],
it gives rise to a pre-petition general unsecured claim for the
damages resulting from the breach. 465 U.S. at 530, 531. If the
agreement is assumed, it must be assumed cum onere, “and the
expenses and liabilities incurred may be treated as
administrative expenses, which are afforded the highest priority
on the debtor’s estate.” Id. at 531-32. As stated by the Court of
Appeals for the Ninth Circuit, after the enactment of
Bankruptcy Code section 1113:
se, ee See oe
rs Se aS ee Ce Ee eee eS ee Ee ee ee ee ee a
27
“To reject a collective bargaining agreement, a debtor
must first engage in collective bargaining with the authorized
bargaining representative in an attempt to reach a mutually
satisfactory modification of the agreement, and then apply for
court approval after notice and a hearing. 1 1 U.S.C. 1113. To
assume a collective bargaining agreement, a debtor must cure
any default and provide adequate assurance of future
performance if the court finds such assurance necessary, 11
U.S.C. §365 (b)(1).” Wien Air, 865 F.2d at 1111. See also
Adventure Resources, 137 F.3d at 798 (“as conditions of the
contract’s assumption, the debtor [must] cure any existing
default and compensate all non-debtor parties for actual
pecuniary losses that have resulted therefrom.”)
Consistent with the foregoing principles, if a CBA iS
not rejected, it “rides through” the debtor’s bankruptcy
proceedings, as if the bankruptcy had never occurred. National
Gypsum, 208 F.3d at 504 n.4 (“If an executory contract is
neither assumed nor rejected, it will ‘ride through’ the
proceedings and be binding on the debtor even after a
discharge is granted, thus allowing the non-debtor’s claim to
survive the bankruptcy.”) (citing Federal’s Inc. v. Edmonton
Inv. Co., 555 F.2d 577, 579 (6™ Cir. 1977). See also Bildisco,
465 U.S. at 546 n.12 ( if “the contract is neither accepted nor
rejected, it will ‘ride through’ the bankruptcy proceeding and
be binding on the debtor even after a discharge is granted.”);
UFCW Local 211 v. Family Snacks, Inc. (In re Family Snacks,
Inc.), 257 B.R. 884, 907n.19 (B.A.P. g™ Cir. 2001) ( if a debtor
fails to assume or reject a collective bargaining agreement, the
agreement “effectively ‘ rides through’ the bankruptcy
process.”)
In Continental I, this Court upheld the Court of Appeals
decision. The courts and I were ignorant of the fact that
Continental had assumed the EPCBA. It was Continental —
responsibility to inform the Bankruptcy Court and the non- ~
debtors of its assumption of the EPCBA.
28
Early January 2002, I received a copy of the Ross
arbitration, in which the arbitrator awarded specific seniority
positions to the former Eastern pilots. Some of whom retained
the seniority given unilaterally by Continental, and other
Eastern pilots were placed in specific positions on the
Continental seniority list as dictated within the arbitration
award. Nonetheless, all selected Eastern pilots are still merged
into Continental. This irrefutable evidence proves; (1)
Continental had assumed the EPCBA; (2) the rejection of the
EPCBA using Bankruptcy Code 365 (Confirmation Plan) was
done in order to have complete unilateral control over the
merger and as a union busting tactic; and (3) a merger between
the Eastern pilots and the Continental pilots had occurred.
This de facto merger calls for the revisiting of
Continental I. The debtor not only did not reject the EPCBA
under Bankruptcy Code 1113, but also selectively accepted the
EPCBA when it merged Eastern pilots into its own pilot force.
The debtor cannot have it both ways. In reality, in this case it
gets it three ways: (a) debtor does not reject the CBA under
Bankruptcy Code 1113, but gets the effect of having done so;
(b) debtor accepts the EPCBA when it merges the selected
Eastern pilots, but does not have to honor the remaining
Eastern pilots rights; and (c) debtor then rejects the EPCBA
utilizing using Bankruptcy Code 365.
The abuse of Continental within the bankruptcy courts,
and the allowance of those courts to be party to such abuse, has
led me to ask this Court to address the RLA and laws to be
followed by the lower courts in order to bring resolution to this
dispute.
Ill. THE CERTIFICATION OF A CLASS BY
INDIVIDUALS WHO ARE NOT THE COLLECTIVE
BARGAINING REPRESENTATIVE, AND THE
ACTIONS WHICH LED TO A SETTLEMENT
AGREEMENT, ORCHESTRATED BY CONTINENTAL
ARE: (1) IN DIRECT VIOLATION OF THE RAILWAY
LABOR ACT; (2) ARE IN VIOLATION OF THIS
29
COURT’S FIRM DECISIONS IN REGARDS TO THE
ACT; AND (3) ARE IN VIOLATION SECTION 1113 OF
THE BANKRUPTCY CODE.
As stated by the Court of Appeals for the Ninth Circuit,
after the enactment of Bankruptcy Code section 1113:
“To reject a collective bargaining agreement, a debtor
must first engage in collective bargaining with the authorized
bargaining representative in an attempt to reach a mutually
satisfactory modification of the agreement, and then apply for
court approval after notice and a hearing. 11 U.S.C. 1113. To
assume a collective bargaining agreement, a debtor must cure
any default and provide adequate assurance of future
performance if the court finds such assurance necessary.” 11
U.S.C. 365 (b)(1).
As arbitration got closer for the Eastern pilots,
Continental was looking for a way to stop the process. After
talks with LPP Claimants counsel, Continental suggested a
settlement agreement using a class certification mechanism.
LPP Claimants’ counsel, decided to certify a class with James
Baldridge, William Mann, and Larry Dunn as the named
plaintiffs. rs
Once the class was certified, the composition of the
class became a problem; the Eastern pilots that had been
unilaterally merged at Continental were included within the
class certification composition. Continental and class counsel,
presented a grossly under inclusive list of Eastern pilots to the
Bankruptcy Court, suppressing from the list those Eastern
pilots unilaterally merged at Continental.
The Court of Appeals ignored the evidence in which
Continental admits that Eastern pilots were secretly merged
into the Continental seniority list as part of a separate deal.
Continental never offered the option of seniority >
integration to any Eastern pilot except those secretly merged.
30
CONCLUSION
The Eastern Pilots have been denied the right to
arbitration guaranteed by federal law. The lower courts have
not followed the mandate of this Court.
The Congress of the United States, in its wisdom, has
passed legislation requiring mandatory arbitration. That
legislation was signed by the Chief Executive Officer of the
United States. Furthermore, mandatory arbitration has been
completely confirmed by this Supreme Court of the United
States, the Appellate Courts (including the Third Circuit in
previous rulings) and most Bankruptcy Courts. Now, the Court
of Appeals of the Third Circuit has reversed itself, and also
allowed a lower court, the Bankruptcy Court to determine the
Law of the Land, based upon proven fraudulent representation.
The Bankruptcy Court has determined that Congress should be
disregarded and all previous firm rulings from the Supreme
Court were mistakes. The Appeals Court of the Third Circuit
now apparently agrees with the Bankruptcy Court that: 1.
Arbitration is not mandatory 2. That any number of judicial
remedies, including creation of a mandatory Class, selectively
populating that Class with a minimum number of individuals to
cover up fraud, ignoring a whole range of benefits, limiting the
compensation of the Class, and 3. Requiring that members of
the Class hold harmless the Directors and Officers of the
company after orchestrating unlawful acts, are permissible. The
ramifications resulting from allowing the Bankruptcy Court to
establish national labor policy are ominous.
For the reasons described above, I respectfully request
the petition for certiorari to the Court of Appeals for the Third
Circuit be granted.
pectfully submitted,
abinaad Tye ee,
on E. O’Neill,
Appellant, Pro Se
ery ere
|
4
3
i
a
%
No.
gn The
Supreme Court of the Anited States
re
ee ee eee eee ee Ne
RAMON E. O’NEILL
Petitioner,
Vv.
CONTINENTAL AIRLINES, INC.,
and
JAMES BALDRIDGE; WILLIAM MANN; LARRY
DUNN, individually and as representative of a class of
persons similarly situated who are referred to as LPP
CLAIMANTS.
Respondent.
On Petition For A Writ of Certiorari
To The United States Court OF Appeals
For The Third Circuit
VOL I
PETITION FOR A WRIT OF CERTIORARI
Ramon E. O’Neill, Pro Se
7424 SW 129 Ct
Miami, FL. 33183
(305) 386-4866
a
I Ea
TABLE OF CONTENTS
APPENDIX
VGLI
Title and Description
Opinion from the United State Court of
Appeals for the Third District.
March 5,2004.
Denial of petition for re-hearing and motions
of compliance by all parties from the
United States Court of Appeals for the
Third District. April 23, 2004
Memorandum Order from District Court.
Court did not address the merit of the appeal.
March 31, 2003
Memorandum Order from District Court
Court denial of motion for rehearing.
April 28, 2003
Final Order and Judgment of Dismissal
Order appeal from Bankruptcy Court
January 31 2002.
Order Re: Docket No. 118
Order to compel with the settlement
agreement- injunction on my right to
arbitrate. May 02, 2002.
In re Continental Airlines, Inc.,
125 F.3d 120 (3 Cir. 1997)
Pages
11-18
19-20
21-25
27-29
31-66
Title and Description
Memorandum Opinion from the
District Court November 29, 1995
Railway Labor Act
Bankruptcy Code § 365
11 U.S.C. § 365
Bankruptcy Code § 1113
— «1LUSS.C. § 1113
Before the Eastern Air Lines Pilots
System Board of Adjustment
Elkouri Arbitration Award
September 22, 1989
Labor Protective Provisions Arbitration
Kasher Arbitration Award
August 4, 1992
Pages
67 — 103
105 — 157
159-177
179 — 183
185 —216
217 —235
: l
UNREPORTED-NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 03-2374 and 03-2375
IN RE: CONTINENTAL AIRLINES INC., sig AL,
Debtor |
RAMON E. O’NEILL
Vv.
JAMES BALDRIDGE; WILLIAM MANN; LARRY
DUNN, individually
and as representatives of a class of persons similarly
situated who are referred to as LLP CLAIMANTS
UNITED STATES TRUSTEE
Ramon E. O’Neill,
Appellant
On Appeal From the United States District Court
For the District of Delaware
(D.C. Civ. Nos. 02-CV-00375 and 02-CV-00479)
District Judge: Honorable Sue L. Robinson
Submitted Under Third Circuit LAR 34.1 (a)
March 5, 2004 ra
Before: Sloviter, Nygaard, and Chertoff, Circuit Judges.
(Filed March 9, 2004)
OPINION
PER CURIAM
Ramon O’Neill, a pilot formerly employed by
Eastern Airlines, Inc., appeals from an order of the United
States District Court for the District of Delaware, affirming
the final judgment and order of dismissal of an adversary
proceeding in the Continental Airlines, Inc. bankruptcy. We
will affirm. .
As we write for the parties, we need not set forth the
complete procedural and factual history of the case. The
history is set forth in detail in In re Continental Airlines, 125
F.3d 120, 124-28 (3d Cir. 1997) (“Continental I”). In that
case, we held that the question of whether there had been a
“merger” between Continental and Eastern under the terms
of the collective bargaining agreement, and thus whether
LPP Claimants! had standing to maintain an individual claim
for seniority integration was a matter for arbitration, and that
the District Court properly vacated an injunction against
arbitration.
1. “LPP Claimant’s refers to a group of former Eastern pilots [including
O’Neill] whose claims in this appeal are based on certain ‘labor
protective provisions’ (LPPs) contained im the collective bargaining
agreement.” Continental I, 125 F.3d at 124 n.1.
2.
—
ES ee ee ee
3
Continental I, 125 F.3d at 130, 137-38. We also held that
“any claim based on an award of seniority integration arising
out of the resolution of the LPP dispute
will be treated as a claim in bankruptcy giving rise to a right
of payment.” Id. at 136.
Following Continental I, Continental took the
position that any seniority integration right acknowledged in
arbitration would be subject to the limitations of Bankruptcy
Code Section 502 (b)(7), 11 U.S.C. § 502(6X7), and would
thus be limited to one year’s back pay based on
Continental’s pay structure as of January 1991. An attorney
for the LLP claimants agreed to bring a declaratory judgment
action in the Bankruptcy Court to determine whether §
502(b)(7) applied, and requested class certification for the
action. The Bankruptcy Court certified the class under Fed.
R. Civ. P. Rule 23(b\2), and later determined that §
502(b)(7) applied. Based on that finding, the LPP claimants
agreed to settle with Continental, with each class member to
receive a ition general unsecured claim in the amount
of $110,000.27 Continental represented that this amount
would be substantially more than the claimants would
receive under § 502(b)(7)’s one-yeas cap.
On January 31, 2002, the Bankruptcy Court held a
hearing on a petition to approve the settlement. O’Neill was
the sole class member to appear at the hearing to object to
the settlement terms. The Bankruptcy Court approved the
settlement, finding it to be “in all
2. Although the Class initially appealed the declaratory judgment
decision, following settlement, a stipulation for dismissal of the appeal
was file on February 19, 2002 and approved by the District Court on
February 20, 2002.
Be
respects, fair, reasonable and adequate to the Class.”
Appellees’ App. at 223. Without seeking a stay of the
4
implementation of the settlement order, O’Neill appealed to
the District Court. The appeal was docketed in the District
Court at 02-CV-00375 (“the Settlement Order appeal”). On
March 6, 2002, Continental filed a motion to compel O’Neill
to comply with the settlement order. The Bankruptcy Court
entered an order granting the motion on May 2, 2002.
O’Neill’s appeal from that order was docketed in the District
Court at 02-CV-00479 (the “Compliance Order appeal”).
After motions and briefs were filed in the District
Court, the Court entered an order on April 1, 2003, captioned
with both district court docket numbers, which affirmed the
Bankruptcy Court’s settlement order, found the Settlement
Order appeal moot, and granted the appellees’ motions to
dismiss. The Court also held that the Compliance Order
appeal was mooted by the resolution of the Settlement Order
appeal. This timely appeal followed.
O’Neill’s appeal appears to raise three main points.
First, he argues that Continental perpetrated a fraud on the
court by failing to disclose the “Ross arbitration,” whereby
former People Express pilots, some of whom were on
Eastern’s pilot seniority list, were integrated into
Continental’s work force, while all other Eastern pilots were
precluded from a specific performance award. O’Neill
appears to argue that due to this
3. On the same day that O’Neill filed his Notice of Appeal, the District
Court denied his request for rehearing en banc. Although O’Neill’s
Notice of Appeal does not mention this order, to the extent that he
intended to appeal that order, we hold that the District Court did not
abuse its discretion in denying the motion for rehearing.
4.
new evidence, Continental I should be overturned. Second,
O’Neill argues that the settlement was not fair, as the
$110,000 does not cover his last year’s compensation.
Third, O’Neill argues that his right to arbitration was not
5
extinguished by the settlement. In the course of these
arguments, O’Neill seems to argue that he was not properly
represented by class counsel.
Continental argues (and the class representative
appellees make similar arguments) that O’Neill cannot argue
that there is any basis for relief on appeal because he failed
to appeal the Bankruptcy Court’s order granting class
certification, and he failed to appeal the Bankruptcy Court’s
order finding that any claim would be capped by Bankruptcy
Code § 502(b)(7). The appellees also agree that O’Neill’s
appeal is moot.
We turn first to the issue of mootness, because, if a
case is constitutionally moot, we lack power to hear it.
United Artists Theatre Co. v. Walton, 315 F.3d 217, 226 (3d
Cir. 2003). A case is constitutionally moot only if the court
cannot fashion any form of meaningful relief. In_re
Continental Airlines, Inc., 91 F.3d 553, 558 (3d Cir. 1996)
(en banc), cert. denied, 519 U.S. 1057 (1997). We do not
find the case to be constitutionally moot. If we were to find
that the settlement in this case was unfair to the class, we
cannot say that there would be no possible relief for the
Appellant.
The District Court’s holding that O’Neill’s appeal
was moot may refer to equitable mootness, a doctrine which
“prevents a court from unscrambling complex bankruptcy
reorganizations when the appealing party should have acted
before the plan became
a
extremely difficult to retract.” Nordhoff Investments, Inc. v.
Zenith Electronics Corp., 258 F.3d 180, 185 (3d Cir. 2001).
The equitable mootness inquiry “is a more limited inquiry
into whether, though we have the power to hear a case, the
equities weigh against upsetting a bankruptcy plan that has
already been confirmed.” United Artists, 315 F.3d at 226.
6
Particularly significant here is the fact that O’Neill did not
obtain a stay of the settlement confirmation. See In re
Chateaugay Corp., 988 F.2d 322, 325 (2d Cir. 1993) (party
who appeals without protection of stay does so at his own
risk). However, we decline to engage in a complete analysis
of whether the appeal is equitably moot. Rather, we will,
like the District Court, affirm the Settlement Order on the
merits. :
We review a district court’s decision to approve a
proposed settlement of a class action for an abuse of
discretion. Girsh v. Jepson, 521 F.2d 153, 156 (3d Cir.
1975). We likewise review a court’s grant of class
certification under an abuse of discretion standard. Newton
v. Merrill Lynch, Pierce, Fenner & Smith, 259 F.3d 154,
165-66 (3d Cir. 2001). Appellees argue that O’Neill cannot
challenge the class certification, as he
4. To determine whether an appeal is equitably moot, the court examines
five factors:
(1). whether the reorganization plan has been substantially
consummated,
(2). whether a stay has been obtained,
(3). whether the relief requested would affect the rights of the parties
not before the court,
(4). whether the relief requested would affect the success of the plan,
and
(5). the public policy of affording finality to bankruptcy judgments.
In re: Continental Airlines, Inc., 91 F.3d at 560.
6.
did not file an appeal of the order certifying the class.
However, we hold that to the extent he objected to the class
certification at the settlement hearing, he preserved his right
to object to the certification on appeal. In re Integra Realty
Resources, Inc., 354 F.3d 1246, 1261-62 (10 Cir. 2004).
O’Neill did object to the class certification at the
7
hearing, but he only objected to the extent that he felt the
class was underinclusive, as it failed to include certain pilots,
including those pilots who were parties to the Ross
arbitration. This is related to O’Neill’s first major point:
that this Court should overturn Continental _I and the
settlement agreement because Continental failed to disclose
the Ross arbitration in its bankruptcy.” The Bankruptcy
Court noted that the Ross arbitration decision dealt with
former Peoples Express pilots; and, while they may have
been Eastern pilots at some point, the arbitration award was
based on the Peoples Express pilots should be members of
the present class; and that if they were, he would be entitled
to a specific performance award so that all class. members
would be treated equally. O’Neill has not represented that he
was a former Peoples Express pilot. Thus, he is not entitled
to the same treatment as those pilots. Further, his argument
fails as this Court has already limited class members’ relief
to money damages. Continental I, 125 F.3d at 136.
5. Continental declined to discuss this issue in its brief “because matters
relating to the so-called “Ross Arbitration’ are not contained in the record
on appeal . . . .” Brief at 14. We note that the Ross arbitration was
discussed at length in the settlement fairness hearing, and thus find that
it is proper subject of appeal.
Ve
To the extent that O’Neill argued that other pilots
were missing from the class list, the settlement, as approved
by the Bankruptcy Court on January 31, 2002, included a
clause which allowed other class members who met the
definitions to file a claim by April 3, 2002. Thus, this
objection to the class certification was remedied by the
Bankruptcy Court.
O’Neill’s second argument is that the settlement is
not fair. Given our previous holding that any claim based on
award of seniority integration would be satisfied by a
s
is
ev \
ae ;
8
monetary claim in bankruptcy, the Bankruptcy Court’s
holding that any such claim would be limited to one-year’s
salary pursuant to § 502(b)(7),° and the fact that the
settlement provided two to three and one-half times the one-
year cap for every class member, we hold that the
Bankruptcy Court did not abuse its discretion in finding that
the settlement was fair. O’Neill argues on appeal that the
$110,000 settlement amount does not cover his last year’s
compensation. O’Neill’s argument appears to be based on
his salary at Eastern, rather than what his salary would have
been at Continental. As class counsel pointed out at the
fairness hearing, even if an arbitrator found that O’Neill’s
seniority had been preserved through the LPPs, his position
would have been subject to Continental’s pay structure.
Appellees’ App. at 185. O’Neill conceded in the fairness
hearing that the maximum Continental salary was $64,000.
Appellees’ App. at 187. Thus, the $110,000
6. As Appelles note, we cannot reach the merits of whether the
Bankruptcy Court correctly found that § 502(b)(7) applied, as no party
preserved a timely appeal to that final decision.
exceeds any amount he could have recovered in arbitration,
as the amount would be subject to the cap of § 502(b)(7).
Finally, O’Neill argues that his right to arbitration
survives the settlement. We disagree. If O’Neill were to
return to arbitration, the arbitrator might recognize his right
to seniority integration under the LPPs. However, any
amount awarded by the arbitrator would be subject to §
502(bX(7)’s cap and would be less than he can recover under
the settlement. Any relief awarded by the arbitrator would
be meaningless; thus, O’Neill’s right to arbitration has been
mooted by the settlement.
For the foregoing reasons, we will affirm.
=
9
THE UNITES STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-2374
No. 03-2375
: IN RE: CONTINENTAL AIRLINES INC., ET AL,
: Debtor
. RAMON E. O’NEILL
Vv
JAMES BALDRIDGE; WILLIAM MANN; LARRY
| DUNN, individually and as representatives of a class of
- persons similarly situated who are referred to as LLP
; CLAIMANTS
UNITES STATES TRUSTEE
Ramon E. O’Neill,
Appellant
On Appeal from the United States District Court
for the District of Delaware
(D.C. Civ. No. 02-cv-00375)
SUR PETITION FOR PANEL REHEARING
BEFORE: SLOVITER, NYGAARD and CHERTOFF,
Circuit Judges
The Petition for rehearing filed the Appellant in the
above-entitled matter, having been submitted to the judges
who participated in the decision of this court, and no judge
who concurred in the decision having asked for rehearing,
the Petition for Rehearing is hereby DENIED.
It is so ordered.
By the Court,
/s/ Richard L. Nygaard ©
United States Circuit Judge
DATE: April 23, 2004
10
11
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
In re:
CONTINENTAL AIRLINES, INC., et al.,
Debtors.
RAMON E. O’NEILL,
Appellant,
v.
JAMES BALDRIDGE, WILLIAM MANN and LARRY
DUNN, individually and as representatives of a class of
persons similarly situated who are referred to as LPP
CLAIMANTS,
Appellees.
Chapter 11
Case Nos. 90-932 through 90-984-MFW
Jointly Administered
C.A. No. 02-375-SLR
C.A. No. 02-479-SLR
12
MEMORANDUM ORDER
At Wilmington this 31* day of March, 2003, having
reviewed appellees’ motions to dismiss the above captioned
appeals and the papers submitted in connection therewith;
IT IS ORDERED that said motions (02-375/D.I. 27; 02-
479/D.1. 6) are granted, for the reasons that follow:
1. Standard of Review. This court has jurisdiction to
hear an appeal from the bankruptcy court pursuant to 28
U.S.C. § 158 (a). In undertaking a review of the issues on
appeal, the court applies a clearly erroneous standard to the
bankruptcy court’s findings of fact and a plenary standard to
that court’s
i.
legal conclusions. See Am. Flint Glass Workers Union v.
Anchor Resolution Corp., 197 F. 3d 76, 80 (3d Cir. 1999).
With mixed questions of law and fact, the court must accept
the bankruptcy court’s “finding of historical or narrative
facts unless clearly erroneous, but exercise[s] ‘plenary
review of the [bankruptcy] court’s choice and interpretation
of legal precepts and its application of those precepts to the
historical facts.’” Mellon N.A. _v.
Communications, Inc., 945 F.2d 635, 642 (3d Cir. 1991)
(citing Universal Minerals, Inc. v. C.A. Hughes & Co., 669
F.2d 98, 101-02 (3d Cir. 1981)). The district court’s
appellate responsibilities are further informed by the
directive of the United States Court of Appeals for the Third
Circuit, which effectively reviews on a de novo basis
bankruptcy court opinions. In re Hechinger, 298 F.3d 219,
224 (3d Cir. 2002); In re Telegroup, 281 F.3d 133, 136 (3d
Cir. 2002).
2. Background. The underlying dispute has a long and
convoluted procedural history. On February 23, 1986,
Eastern Airline (“Eastern”) and its pilots’ union, the Air
13
Lines Pilot Association (“ALPA”), ratified a collective
bargaining agreement. On February 24, 1986, Texas Air
Corporation, the parent of Continental Airlines, Inc.
(“Continental”), acquired Eastern. ALPA asserted that the
acquisition was a merger requiring integration of the Eastern
and Continental pilots’ seniority lists under Eastern’s
collective bargaining agreement. When
rR
Eastern and Continental refused to bargain with ALPA on
the issue, ALPA initiated arbitration.
3. In March 1989, Eastern filed for protection under
chapter 11 of the Bankruptcy Code and asserted that the
automatic stay precluded ALPA from proceeding with the
arbitration. After protracted litigation, the Court of Appeals
for the Second Circuit held that the automatic stay did not
preclude arbitration. In re Ionosphere Clubs, Inc., 922 F. 2d
984 (2d Cir. 1990). ALPA and Eastern thereafter proceeded
with arbitration, during which ALPA sought prospective
integration of the Eastern and Continental pilots’ seniority
lists and back pay until the integration was completed.
4. Continental filed for protection under chapter 11 of
the Bankruptcy Code in December 1990. ALPA (and certain
individual Eastern pilots) filed unliquidated proofs of claim —
in that proceeding. Continental filed objections and sought a
declaration that the claims were general unsecured
prepetition dischargeable claims compensable by an award
of monetary damages. ALPA disagreed and asserted that the
pilots were entitled to specific performance of the collective
bargaining agreement, namely, seniority integration. In
addition, ALPA asserted that only the arbitrator had
jurisdiction to determine whether a merger had occurred as
defined by the collective bargaining
‘
3.
14
agreement.!
5. The United States Court of Appeals for the Third
Circuit ultimately held “that any claim based on an award of
seniority integration arising out of the resolution of the [labor
arbitration] dispute will be treated as a claim in bankruptcy
giving rise to a right of payment. As such, the right to
seniority integration is satisfiable by the payment of money
damages.” In re Continental Airlines, 125 F.3d 120, 136 (3d
Cir. 1997). The Third Circuit prefaced its holding with the
following language:
We take care to note the boundaries of our
holding. It is not our purpose to suggest the
award the arbitrator should grant, if an
award is warranted upon disposition of
the [labor arbitration] dispute. Our holding
is limited to how the claims should be
treated in bankruptcy.
Id. At 136. In other words, the Third Circuit, in its 1997
decision, determined the proper forum (arbitration) for
resolution of the pilots’ substantive rights (whether they have
seniority integration rights), while maintaining the
bankruptcy court’s jurisdiction to determine the “manner in
which the
1. On October 12, 1999, James Baldridge, William Mann and Larry
Dunn, individually and as the representatives of a number of former
Eastern pilots (referred to as the “LPP Claimants” since 1991), filed an
adversary proceeding against Continental. By order dated February 3,
2000 and amended July 10, 2001, the bankruptcy court certified a non-
opt out class that included appellant (the “Baldridge LPP Class”).
Appellant did not object to entry of the class certification order nor did he
seek an appeal from that order.
4.
[claims] in bankruptcy would be treated if a right to seniority
integration is established.” Jd. at 131, n. 8.”
6. By order dated October 12, 2000, the bankruptcy
15
court granted summary judgment to Continental, finding
that, if the Eastern pilots established their right to seniority
integration in arbitration, each of the pilots’ claims would be
treated as a general unsecured prepetition claim and that the
value of each such claim for payment purposes would be
limited to one year’s wages pursuant to Rule 502 (b) (7).
(Bk. Case No. 90-932, D.1. 46)
7. Although appellant did not file and individual appeal
from that order, an appeal from this order was filed by the
“Baldridge LPP Class Action” plaintiffs.
8 On or about November 26, 2001, a settlement notice
was sent to each member of the “Baldridge LPP Class,”
including appellant. (D.I. 1, attachment at Ex. A) After a
hearing, the bankruptcy court entered an order in January 31,
2002 (the “Settlement Order”) approving a settlement (the
“Settlement Agreement”) between the Baldridge LPP Class
(appellees herein)
2. Despite the Third Circuit’s ruling, a group of dissatisfied Eastern
pilots thereafter filed a lawsuit in the United States District Court for the
District of New Jersey seeking enforcement of their collective bargaining
rights outside the arbitration proceeding. That lawsuit was transferred to
this court and thereafter dismissed. Pi i
i Airli C.A. No. 99-795-SLR (D. Del. September 12,
2000), aff'd, 279 F. 3d 226 (3d Cir. 2002), cert. denied, U.S. __,
123 S. Ct. 345 (2002).
and Continental, whereby:
a. The bankruptcy court dismissed “on the merits
with prejudice . . . any and all claims, actions, requests for
relief or causes of action alleged in the Baldrige class action
complaint by plaintiffs and the members of the class as to all
Defendants.” (D.I. 1, attachment at Ex. A, { 5)
b. The Class Representatives “shall be deemed to
have released and forever discharged each and every Settled
Claim which they, or any of them had, may have had, now
16
have or have as of the Effective Date of the Settlement
against the Released Parties.” (Id. at 46)
c. Class Counsel, on behalf of the Class
Representatives and the Class, “shall file a dismissal with the
clerk of the United States District Court for the District of
Delaware of the Baldridge LPP Class Action plaintiffs’
pending appeal of the October 12, 2000 Order and Opinion
of [the bankruptcy court]. (Id. at ¥ 7)
d. Class Councel, on behalf of the Class
Representatives and the Class, “shall withdraw its Demand
for LPP Arbitration filed with the National Mediation Board
in March 1998.” (id. at ¥ 8)
e. “[T]he Class Representatives and all of the
Members of the Class and anyone claiming through any of
them will be forever barred and enjoined from commencing,
instituting or
6.
prosecuting any action or other proceeding in any court of
law or equity, arbitration tribunal or administrative or other
forum directly, representatively or derivatively against any
of the Released Parties as to any of the Settled Claims.” (Id.
at ¥ 9)
f. As the court understands the terms of the
settlement, the Class members should receive under the
settlement “a claim value two to three and one-half times one
year’s wages...” (D.I. 29 at J 3)
9. Analysis of the merits. In his appeal, appellant
essentially argues that the Baldridge LPP class does not have
the authority to enter into an agreement with Continental
“that overrides the September 29, 1997, Third Circuit Court
of Appeals decision.” (D.I. 25, | 15) Appellant
characterizes the September 29, 1997 decision as holding
“that the rights of individual pilots to pursue their claims for
seniority integration would be an issue folding within to the
exclusive jurisdiction of an arbitrator selected in accordance
17
of Section 13(a) of the Labor Protective Provisions.” (D.1.
25, 4 13)
10. Appellant’s reading of the Third Circuit’s decision is
legally incorrect, as is abundantly clear from the procedural
history recited above. The Third Circuit limited the scope of
the arbitrable question to be whether the Eastern pilots have
established seniority integration rights. The Third Circuit
further determined that if those rights were established, they
7.
would be satisfiable by the payment of money damages.
The bankruptcy court limited the amount of money damages
to one year’s wages. The Settlement Agreement at issue
increased the maximum claim award by two- or three- fold.
Appellant did not individually appeal from the class
certification order or from the summary judgment order of
the bankruptcy court. The Settlement Agreement moots the
arbitration proceeding by recognizing the Eastern pilots’
claims to seniority integration and gives to members of the
Baldridge LPP Class more value than that provided for in the
bankruptcy court’s summary judgment decision.
11. Mootness. Not only is appellant’s position
untenable, but the appeal is moot, given the withdrawal of
the pending appeals and the distribution of consideration to
class members, acts in furtherance of the settlement which
cannot be undone.
12. Conclusion. For the reasons stated above, the
motions to dismiss are granted; the January 31, 2002
Settlement Order
entered by the bankruptcy court is affirmed and the appeal
dismissed.’
‘
s/s: Sue L. Robinson
United States District Judge
3. To convolute the procedural history of this dispute even further, the
sole appellant to actually appear at the settlement hearing in order to
formally object to the terms of the settlement was Ramon E. O’Neill. Mr
O’Neill appealed the Settlement Order to this court in C.A. No. 02-375-
SLR. A series of “joinders” in that appeal were filed by numerous other
individuals, On May 2, 2002, the bankruptcy judge entered an order
which, in effect, directed Mr. O’Neill (and only Mr. O’Neill) to comply
with the terms of the Settlement Order (the “Compliance Order”). Mr.
O'Neill appealed the Compliance Order to this court in C.A. No. 02-479-
SLR. Although various of the other appellants who joined with Mr.
O’Neill in his appeal from the Settlement Order also appealed from the
Compliance Order, they lack standing to do so because the Compliance
Order was directed only to Mr. O’Neill. In any event, the Compliance
Order appeal has been mooted by the resolution of the Settlement Order
appeal.
19
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
In re:
Chapter 11
CONTINENTAL AIRLINES,
INC., et al., Case Nos. 90-932
through 90-984-
Debtors MFW
Jointly
RAMON E. O’NEILL, Administered
Appellant,
v.
C.A. No. 02-375-
JAMES BALDRIDGE, WILLIAM SLR
MANN and LARRY DUNN,
individually and as representatives
of a class of persons similarly
situated who are referred to as LPP
CLAIMANTS,
Appellees.
MEMORANDUM ORDER
At Wilmington this 28" day of April, 2003, having
reviewed appellant’s motion for re-hearing en banc of the
court’s March 31, 2003 Memorandum Order;
IT IS ORDERED that said motion (D.I. 33) is denied,
the court finding no justification for convening an en banc
empanelment of the district court to reconsider its March 31,
2003 decision to dismiss appellant’s case. See 28 U.S.C. §
132 (c) (authority of district court to consider certain issues
OE! OE
20
——
en banc) ; United States v. Anaya, 509 F. Supp. 289 (S.D.
Fla. 1980) ; see generally Max’s Seafood Café ex-rel. Lou-
Ann, Inc. v.
1.
Quinteros, 176 F. 3d 669, 677 (3d Cir. 1999) (limited basis
for reconsideration of reargument motions). :
s/ Sue L Robinson
United States District Judge
21
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
) In Re: }
| } Case No. 90-932
CONTINENTAL AIRLINES, INC., } Chapter 11
et al., }
}
Debtors }
}
JAMES BALDRIDGE, WILLIAM }
MANN, and LARRY DUNN, }
individually, and as representatives }
or a class of persons similarly }
situated who are referred to as the }
LPP CLAIMANTS, }
}
Plaintiffs, } Adversary
} Proceeding
v. } No. A-99-412
} Class Action
CONTINENTAL AIRLINES }
HOLDINGS, INC., }
CONTINENTAL AIRLINES, INC. }}
and SYSTEM ONE HOLDINGS, }
INC. }
}
Defendants. }
}
FINAL JUDGMENT AND ORDER OF DISMISSAL
This matter having come before this Court on Motion
for Approval of a Settlement in this class action, and the
Court, having considered all papers filed in connection with
said motion, good cause appearing therefore, it is,
ORDERED, ADJUDGED AND DECREED THAT:
22
1.
1. This Court has jurisdiction over the subject matter
of this litigation and over all Parties, including all members
of the Class.
2. On November 26, 2001: (a) the Class Settlement
Notice, together with copies of the Proof of Claim
substantially in the forms annexed as Exhibits 1 to 3 to
Exhibit B, respectively, to the Settlement Agreement were
mailed by First Class Mail to all members of the Class as
identified. on Exhibit C to the Settlement Agreement at their
addresses listed therein; (b) the Summary Notice for
Publication, substantially in the form annexed as Exhibit 2 to
Exhibit B to the Settlement Agreement was published once
in the National Edition of USA Today on December 3, 2001;
and (c) both the Summary Notice for Publication and the
Class Settlement Notice were posted on the Internet by Class
Counsel on November 27, 2001. Such notice is hereby
determined to be in full compliance with Rule 23 of the
Federal Rules of Civil Procedure and of due process, is
found to be the best notice practicable under the
circumstances, and to constitute due and sufficient notice to
all Persons entitled thereto.
3. The Court finds that the Class consists of those
persons identified on Exhibit A attached hereto, without
prejudice to persons who file a Proof of Claim on or before
April 3, 2002 and who establish, to the mutual agreement of
the parties, or, absent same, to the Court, that they satisfy all
criteria necessary to be included in the Class.
4. This Court hereby approves the Settlement set forth
in the Stipulation and Agreement of Compromise and
Settlement (the “Settlement Agreement”) dated
2.
October 16, 2001, and finds that the Settlement of the claims
of the Plaintiffs and the Class embodied therein is, in all
23
respects, fair, reasonable and adequate to the Class. The
terms and phrases used in this judgment shall have the same
definition and meaning as in the Settlement Agreement.
5. The Court hereby dismisses on the merits
withprejudice and without costs or attorneys’ fees except as
provided for in the Settlement Agreement, any and all
claims, actions, requests for relief or causes of action alleged
in the Baldridge class action complaint by Plaintiffs and the
members of the Class as to all Defendants.
6. Upon the Effective Date, the Class Representatives
and the Class, on behalf of themselves, the Persons they
represent, their heirs, predecessors, successors and assigns,
or any Person claiming or purporting to claim through any of
the foregoing, for good and sufficient consideration, the
adequacy of which is hereby acknowledged, shall be deemed
to have released and forever discharged each and every
Settled Claim which they, or any of them had, may have had,
now have or have as of the Effective Date of the Settlement
against the Released Parties.
7. Upon the Effective Date, Class Counsel, on behalf
of the Class Representatives and the Class, shall file a
dismissal with the clerk of the United States District Court
for the District of Delaware of the Baldridge LPP Class
Action plaintiffs’ pending appeal of the October 12, 2000
Order and Opinion of this Court.
3.
8. Upon the Effective Date, Class Counsel, on behalf
of the Class Representatives and the Class, shall withdraw its
Demand for LPP Arbitration filed with the National
Mediation Board in March, 1998.
9. Upon the Effective Date, the Class Representatives
and all of the Members of the Class and anyone claiming
through any of them will be forever barred and enjoined
from commencing, instituting or prosecuting any action or
other proceeding in any court of law or equity, arbitration
3
- ¥ f
cf
24
tribunal or administrative or other forum directly,
representatively or derivatively against any of the Released
Parties as to any of the Settled Claims.
10. The Settlement Agreement, all proceedings
undertaken in accordance with the terms set forth therein and
all papers relating to it are not, and shall not be construed to
be, an admission by any Party of either the validity of any of
the claims or defenses or of liability to Plaintiffs, any
member of the Class or any others with respect to any LPP
claim arising out of the alleged Eastern merger, which
liability is hereby expressly denied and disclaimed by
Continental. The Settlement Agreement and any of the
papers, negotiations, transactions or proceedings relating
thereto, or any of the terms hereof or recitations herein, shall
not be offered or received in evidence in any proceeding as
an admission on the part of the Parties, or any of them, of
liability or of the merit or lack of merit of any claim or
defense.
11. This Court has reviewed the application of Class
Counsel for an award of attorneys’ fees and hereby awards
Class Counsel 30% of the Gross
4.
Settlement Consideration which shall be paid to Class
Counsel upon the Effective Date.
12. This Court has reviewed the application of Class
Representatives James Baldridge, William Mann and Larry
Dunn for a compensation award and hereby awards each, for
the services each performed as Class Representatives in this
litigation, 1,700 shares of Continental Airlines common
stock to be distributed from the Gross Settlement
Consideration upon the Effective Date.
13. This Court has reviewed the application of Class
Counsel for reimbursement of expenses advanced by Eastern
Pilots for Fairness, Inc. and hereby awards Eastern Pilots for
Fairness, Inc. $95,530.14 to be paid from the Gross
25
Settlement Consideration upon the Effective Date.
14. This Court has reviewed the application of Class
Counsel for the payment of claims administration and
publication expenses of the Claims Administrator and hereby
awards The Garden City Group, Inc. claims administration
expenses not to exceed $49,140.48 to be paid from the Gross
Settlement Consideration upon the Effective Date.
15. If this Final Judgment is reversed, vacated, or
modified, this Final Judgment (except for this Paragraph and
paragraph 10 herof) shall be rendered null and void and
vacated nunc pro tunc, the Settlement shall be deemed
terminated pursuant to the terms of the Settlement
Agreement and the Parties shall be deemed to have reverted
to their respective status and position as provided in Article
VIII vf the Settlement Agreement.
a
16. Without in any way affecting the finality of this
Final Judgment, this Court hereby reserves and retains
continuing jurisdiction over matters subsequently arising
concerning this Settlement, including performance of the
Settlement Agreement and the Settlement embodied therein,
including, but not limited to the award of attorneys’ fees,
costs and expenses to Class Counsel and the Class from the
Gross Settlement Consideration, the approval or rejection of
any Proofs of Claim filed by members of the Class, the
approval of settlement Administration Costs and the
distribution of the proceeds of the Settlement in accordance
with the Settlement Agreement and Continental’s Revised
Second Amended Joint Plan on Reorganization.
SO ORDERED January 31, 2002.
BY THE COURT:
s/ Mary F. Walrath
United States Bankruptcy Judge
\o
N
27
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
In Re: } Chapter 11
CONTINENTAL AIRLINES, } Case Nos. 90-932
INC., et al., } (MFW)
} Through 90-984
Debtors } (MFW)
Jointly Administered
JAMES BALDRIDGE, j
WILLIAM MANN, and LARRY}
DUNN, individually, and as }
representatives of a class of }
persons similarly situated who are }
referred to as the LPP }
CLAIMANTS, }
} Adversary No.
Appellants, 99-412 (MFW)
Vv. }
}
CONTINENTAL AIRLINES }
HOLDINGS, INC., \
CONTINENTAL AIRLINES, }
INC. and SYSTEM ONE }
HOLDINGS, INC. }
Appellees.
ORDER RE: DOCKET NO. 118
AND NOW, the Court having considered the Motion
Of Continental To Enforce Compliance With Court Order
(the “Motion”) And Objection Of Continental To Request
28
For Extension Of Deadline From Rule 8006 (the
“Objection”) dated March 4, 2002 [Docket No. 118; and the
Court having considered the responses filed by Ramon E.
O’Neill (O’Neill) [Docket Nos. 153 and 164] and the joinder
filed by the LPP Class Action Plaintiffs [Docket No. 152]
and
i.
all related pleadings: and a hearing having been held on
April 2, 2002 (the “Hearing”); and for the reasons stated by
the Court on the record at the Hearing, it is hereby
ORDERED that the Motion is granted; and it is further
ORDERED that absent further order of this Court or an
appellate court. O’Neill is bound by the terms of the Court’s
Final Judgment and Order of Dismissal, dated January 31,
2002, a copy of which is attached hereto as Exhibit A (the
“Final Judgment”), and specifically O’Neill and anyone
acting on his behalf or at his direction are enjoined from
commencing, instituting or prosecuting any action or other
proceeding in any court of law or equity, arbitration tribunal
or administrative or other forum against Continental as to
any of the Settled Claims as that term is defined in the Final
Judgment; and it is further
ORDERED, that O’Neill and anyone acting on his
behalf or at his direction is prohibited from attempting to
cause any LPP class member to forgo their right to
participate in the class action settlement by advising them
they have a current right to appeal the Final Judgment and/or
that they have a current right to join an arbitration for
enforcement. of the labor protective provisions against
Continental; and it is further
ORDERED, that pursuant to Bankruptcy Rule 8011,
O’Neill’s Request For Extension Of Deadline From Rule
8006 and Continental’s Objection thereto are properly
considered by the District Court.
29
Dated: Wilmington, Delaware
May 2, 2002
s/ Mary F Walrath
United States Bankruptcy Judge
y a
PRE IT PEE, a BS en ee
i)
fae)
31
IN RE: CONTINENTAL AIRLINES,
Debtor
AIR LINE PILOTS ASSOCIATION
Vv
CONTINENTAL AIRLINES
LPP CLAIMANTS; EFFECTIVE DATE COMMITTEE,
Claimants
HONORABLE JOHN STONITSCH,
Trustee
CONTINENTAL AIRLINES, INC.
Appellant No. 96-7038
(Captioned amended in accordance with Clerk’s Order dated
3/4/96)
ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF DELAWARE
(D.C. Civil No. 93-cv-00163)
ARGUED MARCH 13, 1997
BEFORE: MANSMANN, LEWIS and MICHEL,®* Circuit
Judges.
(Filed August 29, 1997)
* Honorable Paul R. Michel, Circuit Judge for the United
States Court of Appeals for the Federal Circuit, sitting by -
designation.
32
John A. Geier (ARGUED)
Paul, Hastings, Janofsky & Walker,
1299 Pennsylvania Avenue, N.W.
10" Floor
Washington, DC 20004
Laura D. Jones
Robert S. Brady
Young, Conaway, Stargatt & Taylor
Post Office Box 391
Rodney Square North, 11™ Floor
Wilmington, DE 19899-0391
Attorneys for Continental Airlines
Michael J. Isaacs
Agostini, Levitsky & Isaacs
623 King Street
Post Office Box 2323
Wilmington, DE 19899
Myles J. Tralins (ARGUED)
Tralins & Associates
One Biscayne Tower
2 South Biscayne Boulevard
Suite 3310
Miami, FL 33131
Attorneys for LPP Claimants
John A. McGuinn (ARGUED)
Schmeltzer, Aptaker & Shepard
2600 Virginia Avenue, N.W.
Suite 1000
Washington, DC 20037
Attorney for Eastern Pilots Merger
Committee
a
33
OPINION OF THE COURT
LEWIS, Circuit Judge.
In this appeal and cross-appeal, we are confronted with a
tension between bankruptcy law and labor law. The dispute
arose when the Air Line Pilots Association, Inc. (“ALPA”),
collective bargaining agent for Eastern Air Lines’
(“Eastern”) pilots, filed proofs of claim in bankruptcy court
against Continental Airlines Holdings, Inc. and Continental
Airlines, Inc. (“Continental”). These claims were based on
alleged seniority integration rights stemming from a pending
labor arbitration dispute and were filed following
Continental’s acquisition of Eastern and subsequent refusal
to bargain over the seniority integration of Eastern’s pilots.
The bankruptcy court determined that the claims could be
satisfied by monetary awards in lieu of specific performance
and enjoined scheduled arbitration proceedings to enforce
the seniority rights under the collective bargaining
agreement. The district court affirmed the bankruptcy
court’s determination relating to the claims, but vacated the
injunction. Two groups of former Eastern pilots, the LPP
Claimants and the Group of 31, both of which are no longer
represented by ALPA, appealed to this court.'
Resolution of this dispute requires us to determine: (1)
whether the bankruptcy claims that the LPP Claimants and
the Group 31 seek to enforce constitute “claims” within the
meaning of the bankruptcy code and thus are satisfiable, in
the alternative, by a monetary award; and (2) whether the
arbitration of a labor dispute that may give rise
i. “LPP Claimants’ refers to a group of former Eastern Pilots whose
claims in this appeal are based on certain “labor protective provisions”
(LPPs) contained in the collective bargaining agreement. The “Group of
31” is a group of former Eastern pilots, who originally were part of the
“LPP Claimants” group and who have retained separate counsel for
purposes of this appeal. See discussion infra Part 1.D. While both
groups claims were filed in bankruptcy court by ALPA on their behalf,
34
these two groups are no longer represented by ALPA. See discussion
infra note 5.
4.
to the right to seniority integration under a collective
bargaining agreement can be enjoined, where the debtor has
not explicitly rejected the agreement. We conclude that the
rights to seniority integration do constitute “claims” within
the meaning of the bankruptcy code. Accordingly, we find
that the right to seniority integration gives rise to a right of
payment and that any equitable remedy recovered against
Continental via arbitration of the underlying labor dispute
may be satisfied through an award of monetary damages.
We further conclude that the district court properly vacated
the injunction barring arbitration of the underlying labor
dispute. Thus, we will affirm.
I,
A. The Underlying LPP Dispute
On February 23, 1986, following intense negotiations,
Eastern and its pilots’ union, ALPA, ratified a collective
bargaining agreement. On February 24, 1986, the Texas Air
Corporation (“Texas Air”), parent corporation to
Continental, acquired Eastern. Believing that the acquisition
constituted a “merger” within the meaning of certain “labor
protective provisions” (LPPs) contained in the collective
bargaining agreement, ALPA requested a meeting with
Texas Air, Eastern, and Continental to discuss the integration
of Eastern’s and Continental’s seniority lists. Under the
LPPs, Eastern’s pilots secured protection of their seniority
rights in the event of a merger between Eastern and another
airline carrier through the integration of Eastern’s seniority
lists with the merging carrier’s list. Specifically, the LPP
terms provide:
Section 2(a). The term “merger” as used herein means
35
joint action by the two carriers whereby they unify,
consolidate, merge, or pool in whole or in part their separate
airline facilities or any of the operations or services
previously performed by them through such separate
facilities.
Section 3. Insofar as the merger affects the seniority
rights of the carriers’ employees, provisions shall be
De
made for the integration of seniority lists in a fair and
equitable manner, including, where applicable,
agreement through collective bargaining between the
carriers and the representative of the employees
affected. In the event of failure to agree, the dispute
may be submitted by either party for adjustment in
accordance with section 13.
*x * *
Section 13(a). In the event that any dispute or
controversy . . . arises with respect to the protections
provided herein, which cannot be settled by the
parties within 20 days after the controversy arises, it
may be referred by any party to an arbitrator selected
from a panel of seven names furnished by the
National Mediation Board for consideration and
determination.
(Labor Protective Provisions, sections 2(a), 3, and 13(a)).”
Despite ALPA’s requests, both Eastern and Continental
refused to bargain with ALPA about the integration of the
seniority lists. Consequently, ALPA requested the National
Mediation Board to proffer a list of seven arbitrators from
which a neutral arbitrator could be chosen to determine
whether an alleged merger occurred between Eastern and
Continental that triggered the LPP seniority integration
provision (LPP dispute). Eastern, however, filed for
36
bankruptcy in March, 1989, and refused to submit to
arbitration pursuant to the bankruptcy code’s section 362
automatic stay provision. 11 U.S.C. § 362 (providing that
petitions filed pursuant to Chapter 11 operate as a stay of the
commencement or continuation of judicial, administrative, or
other actions or proceedings against the debtor). In
bankruptcy court, ALPA sought relief from the automatic
stay to compel Eastern to arbitrate the LPP
2. The LPPs were based on the standard Allegheny-Mohawk LPPs,
C.A.B. 22 (1972))
6.
dispute. The bankruptcy court denied ALPA’s petition.
After much litigation, however, the Court of Appeals for the
Second Circuit held that the section 362 automatic stay
provision did not preclude arbitration in this instance. See In
re Ionosphere Clubs, Inc., 922 F.2d 984 (2d Cir. 1990).
ALPA and Eastern proceeded to arbitration in April, 1991,
commencing with a pre-hearing conference before Richard
R. Kasher (Kasher Arbitration). In this proceeding, ALPA
sought prospective integration of seniority lists, back pay
from the effective date of the merger to the date of the
arbitration award to the date that the Eastern pilots would
complete training and begin flying for Continental. Prior to
the pre-hearing conference, Arbitrator Kasher solicited brief
statements of position from the parties to the dispute, and
from all potential parties. Eastern consistently maintained
that the LPP dispute was not properly within the arbitrators
jurisdicition? Continental filed a statement informing
Arbitrator Kasher that it had filed a Chapter 11 petition for
37
reorganization in December, 1990. Therefore, it maintained
that the arbitration pursued by ALPA was stayed under
section 362 of the bankruptcy code and could not proceed
without the express approval of the bankruptcy court.
In August, 1992, Arbitrator Kasher issued a decision
concluding that he had jurisdiction over the LPP dispute, and
could render a determination of the appropriate remedies
under the circumstances. Kasher, relying on the bankruptcy
court’s determination in In re Ionosphere Clubs, Inc., 114
B.R. 379 (Bankr. S.D.N.Y. 1990), specifically rejected
Continental’s suggestion that the arbitration was barred by
the automatic stay. Kasher scheduled hearings on the merits
of the dispute, to commence in February, 1993.
3. Eastern maintained that only the System Board of Adjustment had
jurisdiction to determine whether a merger occurred that triggered the
LPPs. On the merits, Eastera contended that if the arbitration proceeded,
the Arbitrator should conclude that no merger occurred.
ae
B. The Bankruptcy Court Proceedings
In September, 1991, while the initial Kasher Arbitration
decision was pending, ALPA, on behalf of its members, filed
proofs of claim against Continental in Delaware Bankruptcy
Court. Their claims were based on the asserted right to
seniority integration under the LPPs and specified an
unliquidated amount as the debt for which Continental was
obligated. In response, Continental initiated an adversary
proceeding in bankruptcy court against ALPA, seeking
injunctive and declaratory relief relating to the proofs of
claim. In that action, Continental filed a Partial Objection
To Allowance of Claims and a Motion for Partial Summary
Judgment on its Partial Objection. In both motions,
Continental contended that the seniority integration that the
claimants sought was not feasible because it would be
detrimental to Continental’s successful reorganization.
para hor ie naw Ne Codie SAA a a 8 oe ed Eid ae RR is
n aah ul clnd ahs Sik meh elke Aim ano ak Pe eS aE PON | la Puts a oe
38
Thus, Continental sought a declaration that the claims were,
at best, “general, dischargeable, pre-petition, unsecured
claims,” compensable by an award of monetary damages.
ALPA and the LPP Claimants each filed a separate
response to Continental’s Partial Objection and Motion for
Partial Summary Judgment.° ALPA contended that, contrary
to Continental’s argument, the claims pursued were not
general, unsecured pre-petition claims that could be
converted to a payment of money damages. ALPA also
argued that only an arbitrator had jurisdiction to determine
4. Prior to the Kasher Arbitration decision, Comtinental filed an initial
motion for partial summary judgment, seeking a preliminary injunction.
Continental argued that the arbitration should be enjoined to protect the
jurisdiction of the bankruptcy court over the administration of its estate.
It also maintained that the automatic stay provision of the bankruptcy
code precluded that arbitration from proceeding. Finally, Continental
contended that it was not a party to the collective bargaining agreement
between Eastern and ALPA and that it could not be bound by the result
of any arbitration over the LPPs.
5. ALPA’s representation of the LPP Claimants ceased after the LPP-
Claimants instituted actions in federal court agaimst ALPA. The actions
alleged causes-of action for the breach of the dutty of fair representation
and defamation arising out of the publication and dissemination of a
“blacklist” and for alleged violations of the civil provisions of RICO.
the appropriate remedy under the LPPs. The LPP Claimants
essentially maintained that an arbitration proceeding was the
appropriate forum to determine the issue of whether a merger
occurred that triggered the LPPs, and that the proper remedy
was integration of Eastern’s seniority lists with Continental’s
lists.
In February, 1993, the bankruptcy court judge, in two
orders, granted Continental’s Partial Objection To
Allowance of Claims and its related motion for partial
summary judgment, determining that there was no genuine
issue for trial and that Continental was entitled to judgment
Se
39
as a matter of law. In re Continetal Airlines, Inc., et al., Nos.
90-932 through 90-984 (Bankr. D. Del. Feb. 11, 1993) (order
granting motion for partial objection to allowance of claims);
In re Continental Airlines, Inc., et al., No. 91-153 (Bankr. D.
Del. Feb. 11, 1993) (order granting motion for partial
summary judgment). Addressing the jurisdictional argument
asserted by ALPA, the bankruptcy court concluded that the
‘ssue of whether any award granted to ALPA would
constitute general, unsecured, pre-petition claims was a core
matter under the bankruptcy code. Thus, it concluded that it
had jurisdiction to resolve the matter. In re Continental
Airlines, Inc., et al., Nos. 90-932 through 90-984, slip op. at
1-2 (order granting motion for partial objection to allowance
of claims); Jn re Continental Airlines, Inc., et al., No. 91-
153, slip op. at 2 (order granting motion for partial summary
judgment). The court then determined that the equitable
remedy of seniority integration constituted a “claim” within
the meaning of §101(5) of the bankruptcy code.
Accordingly, the court concluded that the remedy could be
converted to an award of money damages. In re Continental
Irlines, Inc., et al., Nos. 90-932 through 90-984, slip op. at 3-
4 (order granting motion for partial objection to allowance of
claims); In re Continental Airlines, Inc., et al., No. 91-153,
slip op. at 3-4 (order granting motion for partial summary
judgment). Finally, the court determined that any right of
payment asserted by ALPA was, at best, a general,
dischargeable, unsecured claim that was entitled to no
administrative priority. In re Continental Airlines, Inc., et
al., Nos. 90-932 through 90-984, slip op. at 4-5 (order
granting motion for partial objection to allowance of claims);
In re Continental .
9. .
Airlines Inc., et al, No. 91-153, slip op. at 5 (order granting
motion for partial summary judgment).
In April, 1993, Continental’s Second Amended Joint Plan
40
of Reorganization was confirmed by the bankruptcy court.
The court’s confirmation order incorporated its prior rulings
from the two orders issued in February, 1993. Essentially, it
clarified that any valid claims based on the LPPs would give
rise to a right of payment dischargeable in bankruptcy and
that no right to injunctive, equitable or other prospective
relief would flow from any valid claim based on an award
under the LPPs. In re Continental Airlines, Inc., et al, Nos.
90-932 through 90-984 (Bankr. D. Del. April, 1993)
(Findings of Fact, Conclusions of Law and Order Plan of
Reorganization). The court also enjoined the arbitration of
the LPP dispute. Continental’s plan of reorganization was
consummated in late April, 1993.
C. The ALPA/Continental Settlement
ALPA and the LPP Claimants appealed the bankruptcy
court’s February and April, 1993 orders to the district court.
While the appeals were pending, ALPA and Continental
settled the LPP dispute. The Settlement Agreement,
ultimately approved by the bankruptcy court, finally resolved
all of ALPA’s claims including those pursued in
Continental’s bankruptcy proceeding and those based on the
enforcement- of the LPPs in the Kasher Arbitration. Under
the terms of the agreement, ALPA agreed to withdraw its
appeals to the district court. The Settlement Agreement also
provided an option to the “pilots formerly employed by
Eastern” who were no longer represented by ALPA, and who
had filed proofs of claim in the bankruptcy proceeding, to
participate in the settlement. Approximately two-thirds of
these pilots did so.
D. The District Court Proceedings
Prior to the ALPA/Continental settlement, Continental
filed a motion to dismiss ALPA’s and the LPP Claimants’
appeals. Continental argued that the appeals from the
41
confirmation order were moot because: (1) the plan of
reorganization had been substantially consummated; (2) it
was not feasible for the plan to be undone; and (3) any
10.
alteration to the plan’s fundamental terms would be
inequitable. After the settlement, Continental filed a second
motion to dismiss the appeals as moot, contending that the
LPP Claimants had no individual right to maintain their
claims based on the LPP grievance. Thus, Continental
argued, the pilots were bound by the settlement agreement.
In a comprehensive memorandum opinion, the district
court addressed the issues appealed by ALPA and the LPP
Claimants and presented in Continental’s motions to
dismiss.© As to the first motion to dismiss, the court
concluded, inter alia, that ALPA’s and the LPP Claimants’
appeals relating to the claim for administrative priority was
moot. In support of its conclusion, the court emphasized the
substantial consummation of the plan. Specifically, the court
noted that the investment leading to the consummation of the
plan was based on an overall limit on administrative claims
and a determination that ALPA and the LPP Claimants were
not entitled to equitable relief. In re Continental Airlines,
Inc., et al., No. 93-163 (D. Del. Nov. 29, 1995). As to
Continental’s second motion to dismiss as moot, the court
determined that it could not consider the merits of whether
the LPP Claimants had standing under the LPPs to pursue
seniority integration individually. Specifically, the court
concluded that this issue should be determined by the
arbitrator. Therefore, the court refused to dismiss their
claims based on their alleged lack of standing to assert the
contractual right. Jd. at 22-25. The court also rejected
Continental’s argument that the LPP Claimants were bound
by the ALPA/Continental settlement. Jd. at 23.
Turning to the merits of the appeals, the court affirmed the
orders of the bankruptcy court in all respects, except for the
42
bankruptcy court’s injunction of the arbitration proceedings.
Id. at 26-45. Relating to the injunction, the
6. Although the ALPA/Continental settlement agreement provided that
ALPA would dismiss its appeal to the district court, ALPA failed to do
so prior to the district court’s disposition. Ultimately, ALPA did
withdraw its claims against Continental. ALPA is not a party to this
appeal.
11.
court concluded that the bankruptcy court’s failure to
adequately set forth the reasons for the issuance of the
injunction and to describe the acts restrained in its order, as
mandated by Federal Rule of Civil Procedure 65(d), was
fatal to the validity of the injunction. Jd. at 34-37. Although
it vacated the injunction, the district court refused to remand
the matter to the bankruptcy court with instructions to strike
the injunction. Rather, the court concluded that under
section 1113 of the bankruptcy code, the bankruptcy court
could not enjoin the arbitration even if the requirements of
Rule 65(d) were met. Id. at 37-40.’
The LPP Claimants appealed the district court’s order.
Continental cross-appealed on the issues of the mootness of
the claims and the dissolution of the injunction. On appeal,
the Group of 31, a group of former Eastern pilots who
previously had been represented by counsel for the LPP
Claimants, have obtained substitute counsel, and have filed a
separate briei. For purposes of brevity, the Group of 31 and
the LPP Claimants will be referred to collectively as “the
Claimants” where permissible.
The district court had jurisdiction under 28 U.S.C. §
158(a). We exercise jurisdiction of the appeal and the cross-
appeal from the district court’s order pursuant to 28 U.S.C. §
158(d).
Il.
43
Our review of the district court’s determination is plenary.
Brown v. Pennsylvania State Employees Credit Union, 851
F.2d 81, 84 (3d Cir. 1988); see In re Ionosphere Clubs, Inc.,
922 F.2d 984, 988 (2d Cir. 1990). We exercise the same
review of the district court’s decision as that exercised by the
district court. Brown, 851 F.2d at 84. The bankruptcy
court’s findings of fact are reviewable only for clear error.
Id. Legal determinations are subject to plenary review. Id.
7. The court reached this issue only after determining that in spite of the
invalidity of the injunction under Rule 65(d), the statutory injunction
under 11 U.S.C. § 524, referenced by the bankruptcy court in its order,
survived. Jn re Continental Airlines, Inc., et al., No. 93-163, slip op. at
37. (D. Del. Nov. 29, 1995).
12.
Before we reach the merits of the parties’ claims, we must
address Continental’s two challenges to the Claimants’
appeals contending that the appeals should be dismissed.
First, Continental maintains that the LPP Claimants’ notice
of appeal is defective for lack of adequate identification of
the parties to the appeal under Federal Rule of Appellate
Procedure 3(c). Next, Continental argues that the Claimants’
lack standing to assert claims for individual seniority
integration under the ’ "?s and that the appeals should be
dismissed as moot.
A. Appellate Jurisdiction
Continental requests that the LPP Claimants’ appeal be
dismissed pursuant to Federal Rule of Appellate Procedure
3(c) for failure of their notice of appeal to identify each
member if its group participating in this appeal. The notice
of appeal filed by the LPP Claimants simply identifies the
appellants as “the LPP Claimants.” Continental argues that
this identification is insufficient, emphasizing that a number
of the LPP Claimants participated in the Continental/ALPA
44
settlement and, consequently, waived their claims on appeal.
Continental contends that the notice of appeal did not specify
those members who did not waive their claims and who are
appealing from the district court’s order. We reject this
argument, and conclude that the LPP Claimants notice of
appeal adequately identifies the appellants.
The requirements of Rule 3(c) are jurisdictional. Torres v.
Oakland Scavenger Co., 487 U.S. 312, 320-21, 108 S. Ct.
2405, 2411, 101 L.Ed.2d 285 (1988). In Torres, the
Supreme Court explained that permitting a court to exercise
jurisdiction over parties not named in a notice of appeal
would be equivalent to extending the time prescribed to file a
notice of appeal, a power not granted to the court. Jd. at 315.
Thus, the failure of a notice of appeal to name a party
constitutes a jurisdictional bar to the appeal, and thus a
failure of that party to appeal. Dura Systems, Inc. v.
Rothbury Investments, Lid, 886 F.2d 551, 554 (3d Cir.
1989).
Generally, rules of procedure should be liberally construed.
Torres, 487 U.S. at 316. In Torres, the Supreme
13.
Court emphasized that, “mere technicalities should not stand
in the way of consideration of a case on its merits.” Id.
(internal quotations omitted). Thus, in the context of Rule
3(c), jurisdiction may be appropriate if a litigant’s actions are
functionally equivalent to the requirements of Rule 3(c).
Masquerade Novelty v. Unique Industries, 912 F.2d 663, 665
(3d Cir. 1990). We have applied this construction numerous
times to support a finding of jurisdiction in the absence of
strict, technical compliance with the requirements of Rule
3(C). See id. (where the contents of documents filed within
the time prescribed to file a notice of appeal contain the
information required by Rule 3(c), the party will be deemed
to have complied with the rule and the case will not be
dismissed for lack of appellate jurisdiction); Dura Systems,
45
Inc., 886 F.2d at 554-55 (Consent Order filed by the
appellants within the time prescribed to file a notice of
appeal served as the “functional equivalent” of what Rule
3(c) required such that the technical failure of the actual
notice of appeal was not a bar to jurisdiction); see also In re
Bertoli, 812 F.2d 136 (3d Cir. 1987) (litigant’s filing of a
‘Notice of Motion for Certification of An Interlocutory
Appeal” in the district court within the thirty-day time period
allowed to file a notice of appeal was sufficient to satisfy
Rule 3(c) where the litigant failed to file an actual notice of
appeal; the document communicated an intention to appeal
and identified the judgment appealed from and the court to
which the appeal was taken).
The purpose of Rule 3(c)’s identification requirements is to
provide notice to the court and the opposing parties of the
identity of the appellants. Torres, 487 U.S. at 318; Dura
Systems, Inc., 886 F.2d at 555. Since ALPA and the LPP
Claimants filed their appeals in the district court, the LPP
Claimants have been identified as a group of former Eastern
pilots, no longer represented by ALPA, seeking to enforce
their seniority integration rights under the LPPs. When
ALPA settled its claims with Continental, both Continental
and ALPA, via the settlement agreement, granted the LPP
Claimants the opportunity to participate in the settlement.
Continental was well aware of the individuals who elected to
exercise this option. The settlement agreement specifically
required those pilots
14.
electing to participate in the settlement to execute one of two
forms indicating an intent to participate in the settlement and
to return the form to Continental. Those individuals who
opted to settle their claims waived their right to appeal.
Thus, the group of LPP Claimants dwindled to an
identifiable, discrete entity made up of those individual pilots
who chose not to participate in the settlement.
46
The term “LPP Claimants” has been subject to a common
understanding among all parties to this litigation relating to
the individuals comprising the group. Accordingly, we
conclude that the LPP Claimants’ notice of appeal
sufficiently identifies the entity such that Continental, as well
as this Court, is adequately apprised of the identity of the
appellants such that appellate jurisdiction is proper. In so
doing, we follow the Supreme Court’s directive to construe
Rule 3(c) liberally and to avoid a construction that would
permit “mere technicalities” to bar the consideration of this
case on the merits, Masquerade Novelty, 912 F.2d at 666
(quoting Dura Systems, 886 F.2d at 555).
B. Whether the Claimants’ Appeals are Moot.
Continental argues that the Claimants’ appeals are moot,
relying on ALPA’s settlement of its LPP dispute with
Continental. Essentially, Continental maintains that the
claim settled by ALPA was a “group” claim. Thus,
Continental argues, when ALPA settled the dispute, it settled
the claim on behalf of the entire group on whose behalf it
filed the bankruptcy claims, including the Group of 31 and
the LPP Claimants. According to Continental, then the
relevant question is whether “if [individual rights to seniority
integration arbitration under the LPPs] existed at all, [those]
rights survived ALPA’s settlement of the group grievance.”
In the district court, Continental challenged the LPP
Claimants’ individual standing under the LPPs to prosecute
their rights to seniority integration. The district court
declined to consider the merits of this argument, explaining
that the issue constituted a “minor” dispute under the
Railway Labor Act. 45 U.S.C. §§ 151-163, and was subject
to the jurisdiction of the arbitrator. We conclude that
because the Claimants’ individual rights to prosecute their
claims for seniority integration have not
15.
been established under the LPPs, we need not address
47
whether the Claimants’ individual rights to seniority
integration survived ALPA’s settlement of the dispute.
The right to seniority integration under the LPPs turns on
whether a “merger” between Eastern and Continental
occurred within the meaning of the LPPs. This
determination depends on the meaning, interpretation and
proper application of the LPPs. In turn, the issue of standing
to maintain an individual claim for seniority integration
under the LPPs is a “minor” dispute under the Railway
Labor Act. 45 U.S.C. §§ 151-163. See Consolidated Rail v.
Labor Executives, 491 U.S. 299, 302 (1989) (“major disputes
seek to create contractual rights, minor disputes to enforce
them”) (quoting Elgin, J & E. Ry. Co. v. Burley, 325 US.
711, 723, 65 S. Ct. 1282, 1289-90, 89 L.Ed. 1886 (1945)
(minor disputes are those relating either to the meaning or
proper application of a particular provision with reference to
a specific situation)); Chicago & Northwestern Transp. Vv.
Local Union 214, 829 F.2d 1424, 1427 (7" Cir. 1987).
Accordingly, the issue of standing is subject to the exclusive
jurisdiction of the arbitrator, and the district court properly
concluded that its role relating to this issue was to protect the
jurisdiction of the arbitrator board. Consolidated Rail, 491
U.S. at 304 (“the [National Railroad Adjustment] Board . . .
has executed jurisdiction over minor disputes. Judicial
review of the arbitral decision is limited.”); Chicago &
Northwestern Transp., 829 F.2d at 1428.
- Consistent with the federal courts’ role relating to minor
disputes, i.e., to protect the jurisdiction of the arbitration
board, federal courts cannot inquire into the merits of an
underlying dispute except to the extent necessary to
determine its proper characterization as minor or major.
Chicago & Northwestern Transp., 829 F.2d at 1428. Nor
may the courts decide what remedy is appropriate if the
agreement is interpreted to require recovery of a remedy.
General Com of Adj., United Transp. Union v. CSX R.R.,
893 F.2d 584, 592-93 (3d Cir. 1990). Thus, the district court
properly concluded that it could not consider the merits of
POT SSE ge Le
48
Continental’s argument that the Claimants did not have
Standing under the LPPs. As the Claimants’ right to
16.
prosecute their claims for seniority integration have not been
established under the LPPs, we find that we need not address
Continental’s argument that their individual rights did not
survive ALPA’s settlement of the LPP dispute.
C. Merits of the Appeal
1. Bankruptcy Court's Jurisdiction
Before we determine whether the bankruptcy court
properly determined the status of the Claimant’s claims, we
must address the Claimants’ contention that the bankruptcy
court did not have jurisdiction over the matter. The
Claimants maintain that because the LPP dispute arose
wholly outside the bankruptcy context, the matter is a “non-
core” dispute over which the bankruptcy court did not have
jurisdiction. The flaw in the Claimants’ argument is that
they confuse the disposition of the merits of the underlying
LPP dispute with the treatment of their claims in bankruptcy.
The bankruptcy court had exclusive jurisdiction over the
latter.
A bankruptcy court has jurisdiction over all “core
proceedings arising under title 11, or arising in a case under
title 11.” 28 U.S.C. § 157(b)(1) (1993); In re Wood, 825 F.2d
90, 95 (5" Cir. 1987). Section 157(b) does not define “core
proceedings.” However, the phrase has been interpreted to
apply to those rights that are created by federal bankruptcy
law:
If the proceeding involves a right created by the federal
bankruptcy law, it is a core proceeding . . . If the
proceeding is one that would arise only in bankruptcy,
it is also a core proceeding; for example, the filing of a
49
proof of claim or an objection to the discharge of a
particular debt. :
In re Wood, 825 F.2d at 97. See Beard v. Braunstein, 914
F.2d 434 (3d Cir. 1990) (acknowledging the standard for
“core proceedings” articulated in Wood).
There can be no dispute that the issue as to whether the
bankruptcy claim could be satisfied by a monetary award is a
“core bankruptcy matter.” By filing a proof of claim against
Continental’s estate in bankruptcy court, the Claimants
“invoke[d] the special ruled of bankruptcy
17.
concerning objections to the claim, [and] estimation of the
claim.” Wood, 825 F.2d at 97. Further, the issue decided bu
the bankruptcy court was how the claim would be treated in
bankruptcy. Thus, the bankruptcy court was well within its
authority to exercise jurisdiction over the issue of the status
of the bankruptcy claim. Our conclusion is consistent with
principles that govern the disposition of issues when
bankruptcy law and labor law intersect. See L.O. Koven &
Brothers, Inc. v. Local Union No. 5767, 381 F.2d 196, 205
(3d Cir. 1966) (“Questions involving an interpretation of the
Bankruptcy Act should be decided by the court, while
questions involving an interpretation of the collective
bargaining agreement should if feasible be decided by the
arbitrator.”); see also Garland Coal & Mining Co. v. United
Mine Workers, 778 F.2d 1297, 1304 (8 Cir. 1985) (“Once
the arbitrator has decided the liability issue, the case should
be returned to the bankruptcy court to decide the questions of
allowability and priority of claims.”). Accordingly, we
conclude that the bankruptcy court had jurisdiction to
determine whether the Claimants’ claims could be satisfied
by a monetary award in lieu of specific performance.*
8. For the same reasons, we reject the Group of 31's efforts to invoke the
Norris-La Guardia Act, 29 U.S.C. § 101. et seq., to implicate the
50
bankruptcy court’s jurisdiction to determine how the claims will be
treated in bankruptcy. Section | of the Norris-LaGuardia Act provides:
No court of the United States as defined in this chapter, shall have
jurisdiction to issue any restraining order or temporary or
permanent injunction in a case involving or growing out of a labor
dispute, except in a strict.conformity with the provisions of this
chapter; nor shall any such restraining order or temporary or
permanent injunction be issued contrary to the public policy
declared in this chapter.
29 U.S.C. § 101.
The Group of 31 contends that despite the district court’s order
vacating the injunction the ruling that the remedy in arbitration can be
“reduced” from full seniority integration to a claim for front pay “is as
clearly an injunction and interference with the Kasher arbitration as was
the bankruptcy court’s blanket injunction against the continuation of the
arbitration.” The conversion of the equitable remedy to front pay, upon
successful challenge at the arbitration proceedings, only affects the
18.
2. Whether the Equitable Remedy Constitutes a Claim
Under the Bankruptcy Code
The LPP Claimants’ and the Group of 31’s primary
contention on appeal is that the right to the equitable remedy
of seniority integration under the LPPs cannot be converted
into a claim for money damages. The Claimants emphasize
that they seek specific performance under the LPPs, and they
vehemently argue that the payment of money damages is not
a viable alternative to the equitable right to seniority
integration.
The district court rejected the Claimants’ argument,
holding that seniority integration under the LPPs gave rise to
a “right of payment” within the definition of a “claim” under
the bankruptcy code. In support of its conclusion, the district
court further determined that money damages are a viable
alternative to seniority integration.
. The bankruptcy code defines “claim” as
(B) right to an equitable remedy for breach of
performance if such breach gives rise to a right to
51
administration of the claim in bankruptcy. It does not operate to enjoin
the arbitrator, nor does it dictate any particular remedy. Cf. Lukens. 989
F.2d at 677 (order directing an arbitrator not to preside over any newly
ordered arbitration and deeming prior arbitration ineffectual involved
operated as an injunction). Thus, we will not disturb the bankruptcy
court’s exercise of jurisdiction over the matter.
Similarly we reject the Claimants’ argument that the determination
whether the equitable remedy can be converted to a payment of money
damages is inconsistent with the district court’s conclusion that the
individual right to seniority integration under the LPPs involves a
“minor” dispute, subject to the exclusive jurisdiction of the arbitrator.
See discussion, supra Part I1.B. We discern no inconsistency between the
bankruptcy court’s exercise of jurisdiction to determine the status of the
claim and the district court’s characterization of the issue of
the Claimants’ standing under the LPPs as a “minor” dispute. The
court’s ruling related only to the matter in which the
Claimants’ claims in bankruptcy would be treated if a right to seniority
integration is established. This ruling, unlike the standing issue, does not
turn on an interpretation of the LPPs. Thus, the bankruptcy court’s
determination of the status of the claims and the district court’s refusal to
consider the merits of the standing issue was not inconsisten.
19.
payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured,
or unsecured.
11 U.S.C. § 101(5). The term “claim” as defined in the
bankruptcy code is construed broadly to permit debtors to
meet all of their legal obligations in bankruptcy and to
enable holders of claims to participate in the bankruptcy
proceedings. See Ohio v. Kovacs, 469 U.S. 274, 279, 83
L.Ed.2d 649, 105 S. Ct. 705 (1985) (“Congress desired a
broad definition of claim.”)’ see, e.g., Pennsylvania Dept of
Public Welfare v. Davenport, 495 US. 552, 558 (1990)
(debtors’ obligation to pay restitution as a condition of
probation which arose out of a criminal conviction for
welfare fraud constituted a “debt” within the meaning of the
SOT ee x
eae vat fa Br
52
bankruptcy code that gave rise to a “claim” under the code).
Under section 101(5), an equitable remedy can be deemed
a “claim” if that remedy “gives rise to a right of payment.”
We are guided as to what constitutes a “right of payment”
under the bankruptcy code by the Supreme Court’s analysis
in Ohio v. Kovacs. In Kovacs, the petitioner, the State of
Ohio, obtained an injunction ordering the respondent,
William Kovacs, to clean up a hazardous waste sit. After
Kovacs failed to comply with the injunction, the State
obtained the appointment of a receiver, who was directed to
take possession of all of Kovacs’ assets and property and to
clean up the waste site. Subsequent to the appointment of
the receiver, Kovacs filed for bankruptcy. In response, the
State filed a complaint in bankruptcy seeking a declaration
that Kovacs’ obligation under the injunction was not
dischargeable in bankruptcy because it was not a liability on
a “claim” under the bankruptcy code.
The Supreme Court held that the obligation imposed by the
injunction had been converted to an obligation to pay money
that was dischargeable in bankruptcy. Kovacs, 469 U.S. at
283. Critical to the Court’ conclusion was it determination
that the appointment of a receiver had dispossessed Kovacs
of the property and therefore, had removed Kovacs’ ability
to cooperate with the receiver and
20.
removes the waste from the site in compliance with the
injunction. Specifically, the Court stated:
The injunction surely obliged Kovacs to clean up the
site. But when he failed to do so, rather than prosecute
Kovacs under the environmental laws or bring civil or
criminal contempt proceedings, the State secured the
appointment of a receiver, who was ordered to take
possession of all of Kovacs’ nonexempt assets . . . and
to comply with the injunction .. . . As wise as this
course may have been, it dispossessed Kovacs,
a
an
at
%
:
Z
53
removed his authority over the site, and divested him of
assets that might have been used by him to clean up the
property . . . Although Kovacs had been ordered to
“cooperate” with the receiver, he was disabled by the
receivership from personally taking charge of and
carrying out the removal of wastes from the property.
What the receiver wanted from Kovacs after
bankruptcy was the money to defray cleanup costs. . .
Had Kovacs furnished the necessary funds, either
before or after bankruptcy, there seems little doubt that
the receiver and the State would have been satisfied.
Id. at 283. Thus, the Court concluded that under the
circumstances, the clean up order had been converted into an
obligation to pay money. /d. at 283.
In In re Torwico Electronics, Inc., 8 F.3d 146 (3d Cir.
1993), we addressed the issue whether a regulatory
obligation directing a Chapter 11 debtor to develop a plan to
ameliorate an ongoing environmental hazard could be
converted into a “claim” in bankruptcy. In that case,
Torwico Electronics, a manufacturing business, filed for
Chapter 11 bankruptcy and listed the New Jersey
Department of Environmental Protection and Energy (the
“Department”) as a creditor with a disputed and unliquidated
claim. After Torwico filed its petition for bankruptcy , the
Department performed an on-site inspection of Torwico’s
property and found hazardous waste, for which it issued a
notice of violation to Torwico. Two months later, the
deadline for filing proofs of claim in Torwico’s bankruptcy
case passed. The Department had failed to file any proof of
claim by this deadline.
21.
The Department, seeking to enforce Torwico’s obligation
under state and federal environmental laws, issued an
Administrative Order requiring Torwico to submit a written
closure plan for the hazardous site and assessing a monetary
54
penalty for failure to take action under the earlier notice of
violation: The Order specifically stated: “All obligations are
imposed pursuant to the police powers of the State of New
Jersey, intended to protect the public health, safety, welfare,
and environment.”
In bankruptcy court both parties sought summary
judgment. Torwico maintained that the obligation
constituted a “claim” under the bankruptcy code and that the
State’s failure to file a timely proof of claim was fatal to the
State’s position that Torwico was responsible for the
obligation. The State, however, argued that the claims
involved were regulatory obligations, not bankruptcy claims,
and that Torwico was obligated to remedy the violations
addressed in the Order pursuant to state and federal law.
Turning our attention to the Supreme Court’s analysis in
Kovacs, we explicitly noted that this case was unlike Kovacs
in that the State was not demanding that Torwico pay money
to it, but rather was requesting it to take action to ameliorate
an ongoing hazard. Torwico Electronics, 8 F.3d at 150.
Next, we shifted our focus to the nature of the obligation
imposed buy the Order and concluded that it was not an
order for breach of an obligation that gave rise to the right of
payment. Specifically, we noted:
The state here found that the seepage pit was a
continuing problem that was leaking hazardous
material into the surrounding environment. Thus, the
State is not asserting a “repackaged claim for
damages”; rather there is an ongoing and continuing
threat and . . . an obligation on the part of the debtor to
“ameliorate ongoing pollution emanating from
accumulated wastes” . . . The state has no “right to
payment” here. What it has is a right to force the |
debtor to comply with applicable environmental laws
by remedying an existing hazard.
22.
Id. (quoting In re Chateauguay, 944 F.2d 997, 1008 (2d Cir.
55
1991)).’
Kovacs indicates, and Torwico Electronics implies, that a
right of payment under the bankruptcy code is, essentially,
an obligation to pay money. Thus, the issue we must decide
is whether monetary payment is an alternative for the
equitable remedy of seniority integration. See Matter of
Udell, 18 F.3d 403, 407 (7™ Cir. 1994) (“[an] example of a
‘claim’ is a right to an equitable remedy that can be satisfied
by an ‘alternative’ right to payment”). The district court
answered this question affirmatively, and we agree.
We begin our analysis by noting that here, when ALPA
filed its proof of claim in bankruptcy court, it enumerated the
claim as one for money damages, in addition to specific
performance, arising out of the underlying LPP labor
arbitration dispute. Indeed, in its supplemental pre-hearing
statement filed at the arbitration, ALPA specifically noted
that it sought “damages in the form of back pay and front
pay against . . . Continental . . . in addition to integrated pilot
positions.” This is not the end of our inquiry, however.
Consistent with the analyses in Kovacs and Torwico
Electronics, we are compelled to examine the nature of the
remedy sought and to ascertain whether it can give rise to a
right of payment. We conclude that it does.
Unlike the obligation at issue in Torwico Electronics,
seniority integration is not a remedy tailored to enforce
compliance with any federal or state laws or regulations.
9. In Torwico Electronics, we were persuaded by, and explicitly applied,
the approach adopted by the Court of Appeals for the Second Circuit in
In re Chateauguay, 944 F.2d 997 (2d Cir. 1990). In that case, the court
addressed the issue of what constituted a claim in the context of the
bankruptcy of an entity that operated hazardous waste sites. There, the
court stated:
Where an order imposes obligations distinct from any obligation
to stop or ameliorate ongoing pollution, the order presents a claim
if the government could have done the work itself and then sought
reimbursement: under such circumstances there is a breach of an
obligation that gives rise to a right of payment.
In re Chateauguay. 944 F.2d at 1008.
56
23.
The source of the remedy is a provision contained in an
agreement. By its contractual nature, it is clear that the
remedy was not created to enforce compliance with any
particular mandate. Rather, by its terms, seniority
integration is a discrete remedy, specifically created to
protect a group of employees.’° Thus, the remedy is a
vehicle by which to provide a benefit or compensation to
individuals who are covered by the explicit terms of the
agreement and who, by the agreement’s terms, are entitled to
enforce the remedy.
- _ Although the collective bargaining agreement is silent as to
the remedy following a breach of the agreement, it is
reasonable to conclude that a “corollary right to payment of
liquidated damages” would flow from a breach giving rise to
the equitable remedy under the LPPs. See Matter of Udell,
18 F.3d at 408 (holding that a right to an equitable remedy
for breach of performance is a claim if the same breach also
gives rise to a right of payment with respect to the equitable
remedy or if the right of payment is an alternative to the right
to an equitable remedy). See generally Chauffeurs,
Teamsters, Etc. vy. Terry, 494 U.S. 558, 108 L.Ed.2d 519,
110 S. Ct. 1339 (1990) (claim based on breach of a collective
bargaining agreement is comparable to a breach of contract
claim for which a legal award of money damages in the form
of back pay is permitted); Stewart v. KHD Deutz of America
Corp., 75 F.2d 1522 (11 Cir. 1996) (breach of [collective
bargaining claim] claim is most analogous to a claim for
breach of contract). The Court of Appeals for the Ninth
Circuit’s opinion in Van Waters & Rogers, Inc. v. Int'l
Brotherhood of Teamsters, 913 F.2d 736 (9" Cir. 1990), is
instructive.
In that case, the court upheld an award of monetary
damages for breach of a contract mandating seniority
integration. There, Van Waters, a seller and distributor of
57
10. The LPPs specifically state:
Section 1. The fundamental scope and purpose of the conditions
hereinafter specified are to provide for compensatory allowances to
employees who may be affected by (a) proposed merger . . . .
(Labor Protective Provisions. Section 1).
24.
chemicals purchased its competitor, McKesson. Pursuant to
the acquisition, Van Waters agreed to assume the terms and
conditions of a collective bargaining agreement that existed
between McKesson and its employees’ union, Local 70.
Although the collective bargaining agreement contained a
seniority integration clause triggered by a purchase or sale of
McKesson, Van Waters refused to honor the terms of the
clause after the purchase was complete. Accordingly, Local
70 filed a grievance based on Van Waters’ failure to
integrate the seniority of the former McKesson employees
with Van Waters’ seniority list.
Arbitration of the dispute was complicated by two
additional factors. First, Van Waters maintained a collective
bargaining agreement with another union, Local 287.
Second, the collective bargaining agreement between Local
70 and McKesson/Van Waters contained a clause precluding
the arbitrator from determining any jurisdictional dispute
arising between Local 70 and any other union. The effect of
the latter factor was that any ruling on a jurisdictional
dispute would be outside of the scope of the arbitrator’s
authority. As seniority integration of Local 70’s employees
would affect the seniority of Van Waters’ employees and
create a potential conflict between the two unions, resolution
of the dispute implicated the arbitrator’s authority to resolve
the dispute.
At the arbitration hearing, the arbitrator granted Local 70’s
grievance demanding that the seniority of the former
McKesson employees be considered as integrated. However,
the arbitrator declined to enforce seniority integration to
58
avoid any jurisdictional dispute. Instead, the arbitrator ruled
that the employees would re
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