Petition for Writ of Certiorari — Sigfred v. Pan American World Airways, Inc.

Supreme Court brief1956

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MAR 23 1956

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IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1955.

No. G88...

STURE V. SIGFRED,

Petitioner,

vs.

PAN AMERICAN WORLD AIRWAYS, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT.

LAURENCE A. SCHROEDER,

of: Watton LAnTarr SCHROEDER ATKINS

Carson & WAHL,

916 Alfred I. duPont Building,

Miami 32, Florida,

Attorney for Petitioner.

ee ———

E. L. Muwpenmats, Inc., 924 Wranporrs, Kansas Crrr, Mo., HAzamuson 1-3080

Opinions Below

Jurisdiction

Questions Presented

Statute Involved

Statement

Reasons for Granting the Writ

Conclusion

Appendix—

The Constitution of the United States—

Article ITI, Section 1

Amendment 5 -—

Railway Labor Act, 45 U. S. C—

Section 153, First (m)

Section 153, First (p) ——

Court of Appeals Opinions

Judgment

Order Denying Rehearing

CITATIONS

Cases—

Bernhardt v. Polygraphic Co., 100 L. Ed. (Adv. 203) 10

DeCarlo v. Town of West Miami, 49 So. 2d 596... 8

Elgin, Joliet & Eastern R. Co. v. Burley, 325 U.S. 711 11

Erie Railroad Co. v. Tompkins, 304 U. S. 64 9, 10

Glens Falls Ins. Co. v. Gulf Breeze Cottages, 38 So.

2d 828 8

Guaranty Trust Co. v. York, 326 U. S. 99

bef INDEX

Moore V. Illinois Cent. R. Co., 312 U. S. 630... 2

Morrison v. Plotkin, 77 So. 2d 254 —........---_-_-_------ 8

Sigfred v. Pan American World sant Inc., 122

F. Supp. 881 - — nconiigiscsialitarhiatianih ae

Slocum Vv. ‘aieeeans & &W. R. ce. 339 U. S. 239_9, 10, 12

Trancsomtinensel & West 1, Inc., Vv. sathee 345 U.

S. 653 . iniibansi aioe ian 5

Washington Terminal Co. v. Boswell, 1 App. D. C.

1, 124 F. 2d 235, affirmed 319 U. S. 732 - =

Constitution—

The Constitution of the United States—

Article III, Section 1-5,

Statutes—

28 U. S. C., Sec. 1254(1) --— 2

Railway Labor Act, 49 Stat. 1189, 45 U. s. C—

Sec. 153, First (m) - ll

Sec. 153, First (p) ————------—--— ul

* Sec. 181 eked aietorst 46

Sec. 184 _. 46

Texts—

1 Fla. Jur., Admin. Law, Sec. 175 &

1 Fla. Jur., Admin. Law, Sec. 184 - oa

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1955.

No.

PAN AMERICAN WORLD AIRWAYS, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT.

Petitioner prays that a writ of certiorari issue to re-

view the judgment of the United States Court of Appeals

for the Fifth Circuit entered January 19, 1956, in the ap-

peal numbered and entitled on its docket 15490, Sture V.

Sigfred, Appellant, v. Pan American World Airways, Inc.,

Appellee.

CITATIONS TO OPINIONS BELOW.

The District Court’s opinion sustaining petitioner’s

complaint (R. 49) is reported in 122 F: Supp. °881. The

opinion of the District Court on final hearing (R. 59) is

unreported. The majority opinion of the Court of Appeals

and the dissenting opinion of Judge Brown (R. 74) are

unreported at the time of printing this petition and are

printed in Appendix, infra, A3 and A12, respectively.

JURISDICTION.

The judgment of the Court of Appeals was entered

January 19, 1956 (R. 107, App. A36). A timely petition for

rehearing in banc was denied February 21, 1956 (R. 108,

113, App. A37). The jurisdiction of this Court is invoked

under 28 U. S. C., Sec. 1254(1).

QUESTIONS PRESENTED.

This diversity action was by a discharged pilot against

his employer, an air carrier subject to the Railway Labor

Act, to recover damages for breach of an employment con-

tract. Administrative remedy provisions therein con-

formed to requirements of the Act. Florida law requires

exhaustion of administrative remedies as a prerequisite

to court action and permits judicial review for error of

law in an award made pursuant to a contractual arbitra

tion. In exhausting his contractual administrative rem-

edies prior to suit, the pilot was denied relief by the

carrier’s administrative board established pursuant to the

Railway Labor Act. No factual issues were in dispute.

The laymen comprising the arbitration board ruled, as §

3

matter of law, that the contract did not require payment

by the carrier. Despite the fact that the contract was made

in Florida, was to be performed in Florida and was

breached in Florida, the majority of the court below denied

the right of review given by Florida law. They held that

federal law, not Florida law controlled the scope of judicial

review of the arbitration board decision; that jurisdiction

to interpret the employment contract was vested in such

administrative board to the exclusion of the courts; and,

that the board’s decision upon a pure question of law was

final and binding, even upon the judiciary. Thus, the

questions presented are:

1. Whether Florida or federal law controls.

2. Whether the holding of the majority below placed

a construction upon the Railway Labor Act which rendered

it unconstitutional as (a) lacking in due process and (b)

as an unlawful delegation of complete judicial power to a

nonjudicial body.

3. Where a suit by a discharged pilot seeking a money

judgment for sums allegedly owed under his employment

contract (which embodied the provisions of a collective

bargaining agreement) is conditioned upon compliance

with existing state law requiring exhaustion of adminis-

trative remedies, and it thereby became necessary first

to submit the claim to the air carrier’s administrative

board (established pursuant to the Railway Labor Act),

is the board’s adverse interpretation of the contract re-

viewable for error of law in such state-created action for

breach of contract, or is the employee irrevocably bound

by the decision of a pure question of law by laymen com-

prising the board?

STATUTE INVOLVED.

The statute involved is Title II of the Railway Labor

Act, 49 Stat. 1189, et seq., 45 U.S. C., Sec. 181, et seq., par-

ticularly 45 U. S. C., Sec. 181, which provides:

“All of the provisions of sections 151, 152 and

154-163 of this title are extended to and shall cover

continuing authority to supervise and direct the man-

ner of rendition of his service. May 20, 1926, c. 347,

Sec. 201, as added Apr. 10, 1936, c. 166, 49 Stat. 1189.”

and Sec. 184 of 45 U. S. C., which provides:

“The disputes between an employee or group of

employees and a carrier or carriers by air growing

out of grievances, or out of the interpretation or ap-

plication of agreements, concerning rates of pay, rules,

or working conditions, including cases pending and

unadjusted on April 10, 1936, before the National

Labor Relations Board, shall be handled in the usual

manner up to and including the chief operating officer

of the carrier designated to handle such disputes; but,

failing to reach an adjustment in this manner, the dis-

putes may be referred by petition of the parties or by

either party to an appropriate adjustment board, as

hereinafter provided, with a full statement of the facts

and supporting data bearing upon the disputes.

“It shall be the duty of every carrier and of its

employees, acting through their representatives, se

lected in accordance with the provisions of sections

181-188 of this title, to establish a board of adjustment

5

of jurisdiction not exceeding the jurisdiction which

may be lawfully exercised by system, group, or regional

boards of adjustment, under the authority of section

153 of this title.

“Such boards of adjustment may be established

by agreement between employees and carriers either

on any individual carrier, or system, or group of car-

riers by air and any class or classes of its or their

employees; or pending the establishment of a perma-

nent National Board of Adjustment as hereinafter

provided. Nothing in sections 151-163 and 181-188 of

this title shall prevent said carriers by air, or any class

or classes of their employees, both acting through

their representatives selected in accordance with pro-

visions of sections 181-188 of this title, from mutually

agreeing to the establishment of a National Board of

Adjustment of temporary duration and of similarly

limited jurisdiction. May 20, 1926, c. 347, Sec. 204, as

added Apr. 10, 1936, c. 166, 49 Stat. 1189.”

The constitutional provisions involved are Article III,

Section 1, and the Due Process Clause of the Fifth Amend-

ment of the Constitution of the United States. They are

printed in Appendix, infra, A1.

STATEMENT.

Witk jurisdiction predicated solely upon diversity of

citizenship and amount in controversy, this state-created

action seeking a money judgment for breach of contract

was instituted in a federal court in Florida by petitioner,

Sture V. Sigfred, a citizen of Florida, against his former

employer, Pan American World Airways, Inc., a New

York corporation, and a common carrier by air subject

to Title II of the Railway Labor Act (R. 2).

In the twilight of a lifelong career as a pilot for Pan

American, Captain Sigfried, in the line of his duties, suf-

fered an occupational injury which made him, Pan Amer-

ican declared, “permanently disqualified for flight status

with this Company.” He was summarily discharged on

April 1, 1951, and denied benefits which he maintained —

were due him under his employment contract (R. 10).

Sigfred had been employed in Florida to fly Pan

American’s aircraft into and out of Dade County, Florida, —

his permanent base. The alleged breach of contract also

occurred in Florida (R. 3, 67). The individual contract of

employment embodied as conditions of employment the

provisions of a written collective bargaining agreement

entered into by Pan American and the pilots’ union in

conformity with the provisions of the Railway Labor Act,

as amended (45 U. S. C., Secs. 181, 184). It contained

detailed administrative procedure for the handling of any

pilot’s grievance (concerning any action of the company

affecting him) through the Division Manager of the com-

pany whose decision became final and binding unless the

pilot appealed further to the Pan American World Air-

ways, Inc., Pilots’ System Board of Adjustment. This

private board of adjustment, comprised of four laymen

employees of the company, had been established by sepa-

rate contract with the union pursuant to the mandatory

requirements of the Act (45 U. S. C., Sec. 184) for the

purpose of adjusting and deciding disputes “growing out

of grievances or out of interpretation or application of any

of the terms of the Pilots’ Agreement.” It further pro

vided:

“Decision of the Board in all cases properly ref-

erable to it shall be final and binding upon the parties

hereto.”

esa RSW Pee PF eS Tee BaP SR RRO KP SG

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7

Not seeking reinstatement, but asserting his right to

the substantial contractual benefits accorded an injured

pilot, Sigfred first filed in the Florida Chancery Court his

bill for declaratory decree against Pan American, seeking

a construction of the pertinent section of the contract and

a declaration of his rights thereunder. That suit was re-

moved to federal court by Pan American and on its motion

dismissed without prejudice, the Court stating that it

declined jurisdiction until Sigfred had exhausted his reme-

dies under the agreement and the Railway Labor Act or

elected his statutory or common law remedy for breach

of contract for wrongful discharge (R. 61).

Sigfred then proceeded to and did exhaust all of the

administrative remedies provided in his employment con-

tract, including the submission of the interpretation of the

provision of the contract in question to the Pan American

World Airways, Inc., Pilots’ System Board of Adjustment

(comprised of four laymen employees of the defendant)

(R. 62). No issues of fact were involved and the sole ques-

tion submitted to the board was one of law, that is, the

legal meaning and effect of Section 25 of the collective

bargaining contract." The board decided that Sigfred was

entitled to all medical expenses incurred by reason of his

occupational injury but erroneously construed the contract

as not requiring the payment of a sum equal to his salary

during the period of his disablement (R. 46).

Having thus exhausted his contractual administrative

remedies as a prerequisite to court action and anticipating

removal proceedings by Pan American, Sigfred filed the

present action in the United States District Court for the

Southern District of Florida, seeking a judgment for dam-

—_—_ CF

‘Quoted at page 60 of the record and in the Court of Appeals

opinion, page A4, Appendix hereto.

ages for breach of contract in a sum equal to his salary

from the date of his discharge to the date of the suit (R.

8). The complaint detailed the plaintiff's pursuit and ex-

haustion of his administrative remedies, including the final

decision of the Pilots’ System Board of Adjustment, which

he incidentally attacked as arbitrary, unsupported by, and

contrary to law, especially in the light of his admitted

service-connected, occupationally precipitated disability (R.

2-9).

All material facts were admitted by its answer, but

Pan American asserted as a defense the finality of the de-

cision of the Pan American board of adjustment, which it

alleged was not subject to review in the courts (R. 56-58).

The District Judge, in determining the sufficiency of

Sigfred’s complaint and accepting jurisdiction. applied

Florida law which required exhaustion of administrative

remedies as a prerequisite to court action (R. 49-52)?

The District Judge similarly applied Florida law in de-

termining the sufficiency of Pan American’s defense at-

tributing final and binding effect to the decision of the Pan

American adjustment board on a pure question of law.’

He therefore held that the Court had the power to review

the board’s interpretation of the contract but denied relief

because his own independent construction of the contract

conformed to that of the board (R. 59-65).

From this final judgment Sigfred appealed to the court

below and the only error specified (assigned) on appeal

2DeCarlo v. Town of West Miami, 49 So. 2d 596; Morrison v.

Plotkin, 77 So. 2d 254; 1 Fla. Jur., Admin. Law, Sec. 175.

®Florida law permits court review for error of law in an

award made pursuant to a contractual arbitration. Glens Falls

Ins. Co. v. Gulf Breeze Cottages, 38 So. 2d 828; 1 Fla. Jur., Admin.

Law, Sec. 184.

9

was the District Court’s interpretation of the employment

contract. Nevertheless, the majority of the division hear-

ing the appeal refused to review the pure question of law

involved in the legal interpretation of one section of a con-

tract which was made and to be performed in Florida, for

the reason that “federal law” and not Florida law con-

trolled; that Congress intended that the scope of review

in appeals from an air carrier’s arbitration board should

be determined by federal courts applying federal law; and

that the interpretation of Section 25 of the contract was

within the exclusive jurisdiction of the Pan American

Pilots’ System Board of Adjustment (R. 74, Appendix A3).

Judge Brown, in a scholarly dissent, sharply disagreed

with the majority decision (R. 84, Appendix Al2). He

pointed out that Transcontinental & West Air, Inc., v. Kop-

pal, 345 U. S. 653, conditions a suit for breach of contract

upon compliance with existing state policy requiring the

exhaustion of administrative remedies; that under Erie

Railroad Co. v. Tompkins, 304 U. S. 64, state law determines

suability, as well as the scope and force of the mandated

administrative action; that it was explained in Slocum Vv.

Delaware L. & W. R. Co., 339 U. S. 239, that the Railway

Labor Act does not bar courts from adjudicating actions

by discharged employees seeking damages for breach of

contract, or from interpreting some provision of a collec-

tive bargaining contract inevitably involved in the state-

created action; and finally, that there must be some char-

acter of judicial review to test whether a decision of a pure

question of law by a lay board having no standing as an

official arm of the executive, legislative or judicial branch

of government, has afforded a proper respect for basic

guaranties inherent in our system of law.

The judgment sought to be reviewed is printed in the

Appendix, infra, A36.

10

A timely petition for rehearing by the full Court was

filed and denied, Judge Brown again dissenting (R. 113,

App. A37). The petition for rehearing pointed up the re-

fusal of the majority to follow applicable decisions of this

Court and the further fact that the construction placed

upon the Railway Labor Act rendered it suspect as un-

constitutionally delegating complete judicial power to a

nonjudicial body and as wanting in due process (R. 108).

REASONS FOR GRANTING THE WRIT.

1. In disregarding and refusing to apply Florida law,

which would be controlling if the state-created action had

been brought in the state court rather than as a diversity

action in the federal court, the decision of the majority

below is in direct conflict with fundamental principles

announced by this Court in Erie R. Co. v. Tompkins, 304

U. S. 64, 82 L. Ed. 1188, 58 S. Ct. 817, 114 A. L. R. 1487;

Guaranty Trust Co. v. York, 326 U. S. 99, 89 L. Ed. 2079,

65 S. Ct. 1464, 160 A. L. R. 1231; and Bernhardt v. Poly-

graphic Co., decided January 16, 1956, 100 L. Ed. (Adv.

203).

2. In attributing positive finality to, and holding that

there is no right to judicial review of, a decision upon &

pure question of law by an air carrier’s board of adjust-

ment created pursuant to the Railway Labor Act, the

majority of the court below has decided an important and

far-reaching question of law which this Court has hereto

fore carefully left open and should now settle. Most

pointedly was this question reserved in footnote 7 in

Slocum v. Delaware L. & W. R. Co., 339 U. S. 241:

“Nor are we called upon to decide any question

concerning judicial proceedings to review board action

or inaction.”

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11

See also Elgin, Joliet & Eastern R. Co. v. Burley, 325 U. S.

711, wherein it was stated:

“We do not reach the questions of finality, which

turn upon construction of the statutory provisions

and their constitutional validity as construed.”

3. In refusing to permit or even recognize any char-

acter of judicial review of a nonjudicial, nongovernmental

poard’s denial of a money award to a former employee,

attacked as erroneous as a matter of law, for the reason

that the Railway Labor Act provides for judicial review

only if a money award is made against the carrier (45

U.S. C., Sec. 153, First (m) (p); App. Al, A2), the majority

of the court below deprives a defeated employee, but not

a defeated employer, of a substantial contract right with-

out a day in court and places a construction upon the Act

which would render it unconstitutional as violative of the

Fifth Amendment’s due process provision and of Article

III, Section 1 of the Constitution of the United States.

Cf. Washington Terminal Co. v. Boswell, 75 App. D. C. 1,

124 F. 2d 235, affirmed by an equally divided court, 319

U. S. 732.

4. The majority decision of the Court of Appeals is

patently erroneous when viewed in the light of the actu-

alities of the instant case and this Court’s express holding

in Transcontinental & West Air, Inc., v. Koppal, 345 U. S.

653, that the law of the state controls all phases of the

cause of action, including the necessity of exhausting ad-

ministrative remedies under an employment contract

similar to the one here involved, even though the em-

ployer is an air carrier subject to the Railway Labor Act.

5. Clearly the questions presented herein are im-

portant and far-reaching. They concern the effect of the

Railway Labor Act upon substantial and vital contractual

rights of every individual employed in transportation by

12

rail or air. They concern the unconstitutional invasion

of the local law field by “federal law.” They involve due ©

process and lack of the most elemental requirement of ©

fair play—that where there is no alternative remedy avail- ©

able, there must be some kind of judicial review of a non- ~

judicial, nongovernmental boards’ decision upon a pure ©

question of law. They present for review the complete —

misunderstanding by the majority below, or their refusal ~

to follow, what this Court has specifically held in Moore ~

v. Illinois Cent. R. Co., 312 U. S. 630; Slocum v. Delaware ©

L. & W. R. Co.,; 339 U. S. 239, and Transcontinental & West ;

Air, Inc., v. Koppal, 345 U. S. 653.

Finally, the practical effect and consequence of the ©

disputed decision is that every discharged employee of a ©

carrier by air or rail in a state which requires exhaustion ~

of administrative remedies before bringing an action for

breach of contract will, by the very act of complying with ©

the condition precedent to bringing an action at law, fur- ~

nish his employer, should he receive an adverse, though ~

erroneous, administrative decision of a pure question of —

law, with a complete defense to his state-created and ©

recognized claim, ee

viewed in any forum.

CONCLUSION.

For the foregoing reasons, this petition for a writ

of certiorari should be granted.

Respectfully submitted,

LAURENCE A. SCHROEDER,

Attorney for Petitioner.

THE CONSTITUTION OF THE UNITED STATES

_ Article III, Section 1:

“The judicial Power of the United States,

vested in one supreme Court, and in such inferor

Courts as the Congress may from time to time ordain

and establish. The Judges, both of the supreme and

inferior Courts, shall hold their Offices during good

Behaviour and shall, at stated Times, receive for

i their Services, a Compensation, which shall not be

a diminished during their Continuance in Office.”

; ; Amendment 5:

ee “No person shall be held to answer for a capital,

a or otherwise infamous crime, unless on a presentment

oe or indictment of a Grand Jury, except in cases arising

in the land or naval forces, or in the Militia, when in

4 RAILWAY LABOR ACT, 45 U. S. C.

4 Section 153, First (m):

“The awards of the several divisions of the Ad-

justment Board shall be stated in writing. A copy

of the awards shall be furnished to the respective

parties to the controversy, and the awards shall be

final and binding upon both parties to the dispute,

except insofar as they shall contain a money award.

In case a dispute arises involving an interpretation

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UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT.

STURE V. SIGFRED,

Appellant,

versus

PAN AMERICAN WORLD AIRWAYS, INC.,

Appellee.

Appeal from the United States District Court for the

Southern District of Florida.

(January 19, 1956.)

Before HUTCHESON, Chief Judge, and TUTTLE and

BROWN, Circuit Judges.

TUTTLE, Circuit Judge: This appeal presents ques-

tions regarding the reviewability of the award of an

air carrier board of adjustment, established pursuant to

204 of the Railway Labor Act as amended (45

Aé¢

U. S. C. A., $184), and the interpretation of a collective

bargaining agreement entered into between the Air Line

Pilots Association International and Pan American World

Airways, Inc. In 1950, appellant Sigfred, a pilot with

more than twenty years’ service with Pan American, suf-

fered an ear injury which caused him occasional dizziness

while in flight and resulted in the company grounding

him for varying periods of time during that year. Medical

examination later disclosed that he was unfit for further

flight duty and on March 29, 1951, the company advised

him that since there were no other available jobs for

which he was qualified, he would be discharged from its

service effective April 1, 1951. Under Section 25 of the

Pilots Association International and Pan American, the

company paid Sigfred his full salary while he remained

in its employ, but since his discharge it has refused to

make any further payments. Sigfred claims here that, in

accordance with Section 25,’ he is entitled to his full

!

:

|

AS

salary for as long as his disability continues, for the bal-

ance of his life if it lasts that long.

On April 27, 1951, Sigfred brought suit against Pan

American in a Florida court for a decree declaring his

rights under the collective bargaining agreement. The

company removed the case to federal district court, which

dismissed the complaint without prejudice, holding that

jurisdiction should be declined until the plaintiff should

exhaust his administrative remedies under the Railway

Labor Act or elect to pursue “his statutory or Common

Law remedy for breach of contract for wrongful dis-

charge.” Sigfred then filed a claim for workmen’s com-

pensation with the Florida Industrial Commission, and

obtained an award to the effect that his disablement was

a result of an occupational injury.

This having been established, he reasserted his claim

with the company that it pay him his full salary. The

from April 1, 1951, until the filing of the complaint. The

district court dismissed the complaint on the ground that

the board’s interpretation of the contract was correct,

and Sigfred brings this appeal.

The company argues that the judgment must be af-

firmed because the plaintiff elected to pursue the ad

ministrative route through to an award

board, which is made “final and binding,”

tive bargaining agreement; and because

both the board and the court properly interpreted the

agreement as not allowing recovery. Sigfred contends

A6

that his election to pursue his remedy to the Pilots’ System

Board of Adjustment was not voluntary, but pursuant to

Florida law; that Florida law governs the reviewability

of the board’s award; that under the Florida rule of re-

viewability of arbitration awards all pure questions of

law may be reexamined by the reviewing court, and that

a consideration of the board’s interpretation of the agree-

ment will reveal it to be patently erroneous.

Without expressing any opinion on the first of these

propositions, a matter not entirely free from doubt under

Florida law,2 we may proceed to an examination of the

second, viz., that Florida law governs the reviewability

of the board’s award. The establishment of boards of this

type is authorized under the 1936 amendments to the

Railway Labor Act extending many of the provisions of

that Act to air carriers in interstate and foreign com-

merce. 45 U.S. C. A., $181. The Act as originally passed

stated among its general purposes the avoidance of any

interruption to commerce and the providing for the

prompt and orderly settlement of labor disputes, includ-

ing those arising out of the interpretation or application

of collective bargaining agreements. 45 U.S. C. A., §15la.

Pursuant to these aims, Congress provided that disputes

concerning the interpretation of collective bargaining

agreements in rail transportation are to be “handled in the

usual manner up to and including the chief operating

officer of the carrier”, but that if no adjustment is reached

at this level, they can then be referred by petition of either

party to a division of the National Railroad Adjustment

Board, whose decision, except insofar as it contains 4

money award, is final and binding, 45 U. S. C. A., §153 (i)

(m). It also provided, however, that any carrier, system,

or group of carriers and their employees may establish

2See Mountain v. National Airlines, Inc., 75 So. 2d 574.

A7

system, group or regional boards for the deciding of dis-

putes of the same character, with the express provision

in the statute that if either party to such an arrangement

becomes dissatisfied therewith, it may elect upon ninety

days’ notice to come under the jurisdiction of the national

Adjustment Board. 45 U.S. C. A., §153 “Second.”

The 1936 amendments, in extending many provisions

of the Act to air carriers, did not provide for the im-

mediate establishment of a National Air Transport Ad-

justment Board. 45 U. S. C. A., §185. Instead, Congress

provided that such a board should be set up when “it

shall be necessary,” “in the judgment of the National

Mediation Board.” 45 U. S. C., $185. It expressly ap-

plied to air carriers that section declaring it to be the duty

of carriers and employees “to exert every reasonable

effort to make and maintain” collective bargaining agree-

ments. 45 U.S.C. A. §181. It also made it the duty of

“to an appropriate adjustment board.” 45 U.S.C. A. §184.

The question in this case is whether Florida law or

"Glens Falls Ins. Co. v. Gulf Breeze Cottages, 38 So. 2d 828.

A8

in the agreement that awards of the Pilots’ System Board

of Adjustment shall be final and binding. Appellant urges

that it likewise allows the review of any pure question

of law. However tenuous the distinction between so-

called “unmixed” questions of law and those requiring

the deciding of a factual issue also, the appellant contends

that we have such a pure question of law before us here in

the problem of interpreting the collective bargaining

agreement.

Without passing on the issue of whether such a rule

exists in Florida, it becomes plain upon a moment’s re-

flection that such a system of review would completely

sweep aside Congress’s efforts to provide for a prompt and

orderly settlement of labor disputes by system boards of

adjustment. Moreover, such a result would obtain solely

as a matter of compliance with Florida’s contrary policy

of allowing disputants a court review of their disputes,

regardless of their agreements to arbitrate those questions

with finality. It would rest the effectiveness of the statu-

tory plan upon the variegated characteristics of state law,

and eventually lead to the anomaly of a National Air

Transport Adjustment Board whose decisions, except in

awarding money, must be final,‘ existing alongside co-

ordinate system boards in Florida whose decisions cannot

be final. Although the parties could achieve what they

have here sought, a final decision by a board versed in the

problems of the industry, by electing to come under the

national board,’ they would lose thereby whatever ad-

vantages there are in operating under a board established

by a single carrier and its employees.

445 U. S.C. A., §185.

"Ibid.

Ag

We see no reason to force such an election. Congress

having required the negotiation of collective bargaining

agreements, and the establishment of boards of adjust-

ment to interpret them, we deem it a reasonable corollary

thereto that it intended that the scope of review in ap-

peals from these boards should be determined by federal

courts, applying federal law. In the light of the declared

aims of the Act, we also find it to be the intent of Con-

gress to allow the parties to make the awards of such

boards final and binding. Therefore, giving normal ef-

fect to these words, we refuse to review a challenged rul-

ing of law, there being no question raised regarding the

jurisdiction of the board or the regularity of its proceed-

ing. James Richardson & Sons v. W. E. Hedges Trans-

portation Corp., (2 Cir.) 98 F. 2d 55.

However, it was urged upon the district court that

the system board’s construction of the agreement is ar-

bitrary and capricious. If we regard this as an assertion

that the board’s arbitrariness rose to the level of a denial

of due process, it is not amiss to add that we regard the

board’s interpretation of the agreement not only entirely

reasonable, but we believe it to be the correct interpreta-

tion. The language in question reads as follows:

penses occasioned by the pilot’s location at the time

of such injury or illness. During such period the

pilot’s salary will be continued and the pilot

that all workmen’s compensation benefits due

applicable laws shall be paid by the pilot to

Company.”

Al0

The arguments of counsel debate whether the third

sentence of the section refers to the second sentence or

to the first sentence as well. The company argues that

the words, “During such period,” at the beginning of the

third sentence, by their natural sense refer to the period

mentioned in the immediately preceding sentence. It is

significant that it is only the second sentence that makes

a reference to time (“while on assignment at a point * * *”

etc.). Sigfred urges that such an interpretation is patently

erroneous because a pilot would then draw full salary

during periods of non-occupational injury, but only work-

men’s compensation during periods of occupational injury.

Therefore, he reasons, sentence 3 must refer also to sen-

tence 1, granting full salary during the period of any oc-

cupational injury.

We perceive in this agreement, as construed by the

arbitration board, a clearly understandable and helpful

policy of the company. It provides that when a pilot is

away from home, and it is of peculiar value when he is

in a foreign country, he is protected in his salary if mis-

hap befalls him, whether or not such mishap is occupa-

tional. Instead of providing for the cost of complete

medical eare, as is provided for in the case of occupational

sickness or injury, this provision takes care of such “ad-

ditional expenses”’ beyond what he would be put to if he

were at his home base, thus excluding reimbursement for

medical treatment if such medical treatment is not more

expensive on account of the pilot’s being away from home.

It then provides the further assurance, partially, no doubt,

because of the failure to provide complete medical care,

that during such period his salary will be continued.

The construction of this paragraph in the manner con-

tended for by the appellant would amount to providing

a guaranteed full salary payment for life in the event of

All

any permanent occupational disability that disqualified

the pilot from passing a rigid physical examination. Of

course, such a provision could be included in a collective

bargaining agreement. But if it were it is not too much

to assume that it would be in such terms and with such

clarity that there could be no doubt about its meaning.

We think it also appropriate to remark that in those ex-

ceptions to the normal subjects covered by collective bar-

gaining agreements in which provision is made for bene-

fits after employment ceases, the provisions relating to

such pensions are usually carefully spelled out in the

agreement, as they should be.

Without, therefore, making a choice between the al-

ternative constructions, since we find that the complaint

failed to set out a cause of action for review of the ac-

tion of the board, we nevertheless express the conviction

that the arbitrators could not easily have yielded to a con-

struction that would require the company to pay a pen-

sion of the full $13,440 annual salary to all pilots who no

longer meet rigid flight medical requirements for as long

as their disability exists. Certainly we cannot strike

down as arbitrary an award which refused to make such

an interpretation.

It is finally argued that not every employer-employee

dispute falls within the exclusive jurisdiction of the sys-

tem board. Thus, it was held in Moore v. Illinois Central

Railroad Co., 312 U. S. 630, 61 S. Ct. 754, 85 L. Ed. 1089,

that a suit under state law for wrongful discharge could

be brought by a former employee, despite the fact that

he might also have a right to reinstatement and back pay

under the collective bargaining agreement. However, in

Slocum v. Delaware, Lackawanna & Western Railroad Co.,

339 U. S. 239, 70 S. Ct. 577, 94 L. Ed. 795, the Supreme

Court held that a state court has no power to declare

Al2

rights under a collective bargaining agreement negotiated

under the Act, since the statutory procedure in such cases

is exclusive. The appellant here does not claim that he

was wrongfully discharged (in fact, he concedes that he

was not), and does not assert a cause of action arising

out of any rights except those created by the collective

bargaining agreement. The interpretation of such an

agreement was held by the Slocum case to be within the

exclusive jurisdiction of the statutory board there in-

volved. The construction of this agreement was there-

fore correctly referred to the Pilots’ System Board of

Adjustment, and since, as noted above, its award presents

no reviewable question of law, the district court’s dis-

missal of appellant’s complaint was correct.

The judgment is AFFIRMED.

BROWN, Circuit Judge, dissenting:

While I differ finally from the majority on the in-

terpretation of the contract, the difficulties on any inter-

pretation of it and doubts about the final correct one are

such that, standing alone, I would not have thought my

contrary views sufficiently well founded to outweigh the

collective judgment of my associates or move me to dis-

sent. But there is much more to this case than that—

much more than the able opinion of Judge Tuttle reflects.

I would accept their interpretation of this contract, or

for that matter the district judge’s alone, had there ever

been one. The trouble is that here, and below, all that

Sigfred got'was a “but if” opinion—the award of the Ad-

justment Board construing the contract is not subject to

review but if it were, we would agree. But Sigfred is

entitled to more than to a “but if’ adjudication. Had he

Al3

gotten that I would again have submerged my own small

differences and would have joined in an unanimous de-

Had some effective right of judicial review been recog-

nized, I would have accepted also the thesis that the claim

must be tested by Federal, not Florida, law, although the

approach of Judge Tuttle seems to me to place responsi-

bility entirely on the appellant’s contentions instead of the

historical fact that the Supreme Court, not Sigfred, in

Moore, and revived in Koppal, imported state principles

into these problems arising under the Railway Labor Act.

But the Court by-passes these important matters al-

together. It does not even discuss the basic notion of the

necessity for some character of judicial review even

though that has been expressly left open by the Supreme

Court. And, under the severe limitation of space imposed

upon appellate opinions, it compresses the problem into

a nice academic inquiry to the point that it loses nearly

all of the essential flesh to give it life, especially in terms

of agonizing, tactical-strategic problems facing diligent

counsel as they attempt to chart the course for passage

between Moore-Koppal versus Slocum, State versus Fed-

eral, Voluntary versus Involuntary administrative remedy

—a task which, in contrast, makes the classic figure of

Odysseus between Scylla and Charybdis quite unfore-

boding.

In view of this, some elaboration of my views may be

justified.

After 21 years of faithful service as Chief Pilot with

a ranking of 19 out of 1200 on the seniority roster, Captain

Sigfred became a casualty of his own air age when air-

otitis media—an occupational disturbance of the ears—

made him, Pan American doctors declared, “permanently

disqualified for flight status with this Company.” Dis-

Al4

charged on April 1, 1951, he has, with tenacious persist-

ence, twice in State Courts of Florida, twice in Florida

Federal Courts, once in a Florida administrative agency,

and twice in the administrative forum of a Railway Board

of Adjustment, sought a judicial determination of his

contention that, having spent his life fo. the Company,

it is obligated, under the Collective Bargaining Contract’

1On its merits, the case turns on the application of § 25 of the

Contract dated October 14, 1950. As this imvolves interrelation

of various sentences, I have, to facilitate cross reference, num-

bered each sentence in brackets [ |].

“Section 25.

{1} “(a) The Company will provide or compensate the pilot

for the cost of complete medical care for occupational sickness

or injury. [2] In the event of non-occupational injury or illness

occurring while on assignment at a point other than the pilot's

base station, or outside the Continental United States, the Com-

pany agrees to reimburse the pilot for such additional expenses

occasioned by the pilot’s location at the time of such injury or ill-

ness. [3] During such period the pilot's salary will be continued

and the pilot agrees that all workmen’s compensation benefits

due under applicable law shall be paid by the pilot to the Com-

pany.

[6] “(c) The standard per diem allowance will be con-

tinued, or room and board will be provided in quarters designated

by the Company, until the pilot returns to his base station if he

becomes sick or injured while en route.”

Al5

with the Pilots’ Union, ALPA, to pay medical expenses

and, most important, his salary during the continuance of

such occupational disability.

In this final action, filed in the Court below June 17,

1954, Sigfred sought a money judgment only for his back

pay.” The complaint detailed historically his Pilgrim’s

2April 1, 1951 to June 1, 1954, 38 months at $1,120.00 per

month. In the earlier action filed April, 1951, State Court of

Florida, and removed to Federal Court, he sought also declaratory

relief construing the contract § 25(a), (b), supra.

Progress® including, of course, the final decision of the

*Those who champion the administrative, non-judicial course

as speedy, inexpensive justice (cf. opinion by Judge, later, Justice

Rutledge in Washington Terminal Co. v. Boswell, D. C. Cir., 124

F. 2d 235, and Justice Jackson’s description of “hoary litigation”

Order of R. Telegraphers v. Railway Express Agency, 321 U. S.

342, 88 L. Ed. 788, find no helpful illustration here:

April 4, 1951, 4 days after discharge Sigfred requested con-

tract hearing under § 22(a)(1), which company declined as not

appropriate in view medical discharge, and suggested review under

§ 26, Medical Disagreements.

April 22, 1951, Sigfred filed State Court, Florida, in Chan-

was denied November 15, 1951, on the ground there

“no basis for a hearing under Section 22(a) * * *.” As

Al6

Pilots’ System Board of Adjustment* which he attacked

as arbitrary, unsupported by, and contrary to law, es-

Company, October 9, 1951, asserted medical condition was not

compensable, Sigfred filed claim Florida Industrial Commission

December 1, 1951, for compensation benefits to enable him to

reimburse company for benefits received § 25(a)(b).

The next step was submission December 16, 1951, by Presi-

dent, ALPA, to System Board of Adjustment (49 U. S. C. 184) on

Sigfred’s behalf for compliance § 25(a). February 11, 1952, sub-

mission withdrawn without prejudice by ALPA to permit de-

termination Florida compensation case.

Compensation case heard before Deputy Commissioner Feb-

ruary to May, 1952; award by Deputy Commissioner holding or-

cupational disability September 18, 1952, appealed by company

(insurance carrier) to Full board, affirmed March 23, 1953, af-

firmed Florida Circuit Court July 13, 1953, appeal dismissed by

Florida Supreme Court October 23, 1953.

November 5, 1953, Sigfred, referring to the Compensation

holding that his condition was occupational disability, renewed

request for benefits under § 25(a) and compliance with contract.

November 10, 1953, President, ALPA, reinstated submission to

System Board of Adjustment. January 5, 1954, February 22, 1954,

March 22, 1954, Sigfred requested advices from company and

tenders compensation payments; all ignored.

May 17, 1954, System Board of Adjustment issued award that

Sigfred does not have a valid claim for payment of salary as

§ 25(b) is applicable and governs; medical expenses were, how-

ever, allowed.

June 17, 1954, Civil Action 5648 (this suit) was instituted

below.

‘In order to handle matters not disposed of under contract

grievance machinery, Pan American and ALPA, pursuant to

mandatory requirements of Railway Labor Act, 45 U.S. C. 181, 184,

by separate agreement June 16, 1945, established a System Board

of Adjustment “for the purpose of adjusting and deciding disputes

which may arise under the terms” of, and with jurisdiction over

disputes “growing out of grievances or out of interpretation or

application of any” of the terms of the Collective Bargaining

Agreement. The Board was bipartisan, two members each from

ALPA and the company, and provided:

Al7

pecially in the light of an admitted service-connected,

occupationally precipitated disability.’ The trial judge,

“(1) Decision of the Board in all cases properly referable

tn w $y Rerition ofthe Board in all cases properly ret

“(n) Nothing herein shall be construed to limit, restrict

or abridge the rights or privileges accorded either to the em-

Rare & te Oe enptayer © © ee Oe Eee ae

*Sigfred insists that if his quest for legal satisfaction was

bility under the Compensation Act, Florida Statutes Annotated,

$§ 440.01, 440.10, 440.20(4), 440.25(2), 440.25(3) (b)(c), 440.38,

440.43.

8. A. About mid April, Doctor Mansfield, discontinuing radium

treatments, again released Sigfred for flight duty prescribing

pressurized cabins with few landings (instructions never com-

plied with), but on return from flights to Puerto Rico, Brazil, the

Miami first aid station, finding his ears blocked again, grounded

him and returned him to Doctor Mansfield.

ie SU MATE

Ba nih a adit cif: i a

#2 +7 aie iM it ial

pi Hi ik i

il Hh

i

nt EH Latah ti

parva foe

of

Medically, muscular control of the eustachian tube is essential

to permit equalization of air pressure within the middle ear @

npeeraieinte Haag

i

Alg

In our task, as I view it, we cannot reach the merits,

A20

be determined? (b) If exhaustion of remedies was not re-

quired, was his pursuit of them voluntary; and, if so, is

he bound; if not, what is the extent of the review and

by what standards, State or Federal, is it to be determined?

If Slocum: (a) Is the award reviewable by the terms of

the statute Railway Labor Act? (b) If not, must a right

of review be implied, and if so, what is the extent of the

review?

L

If form alone controls, this is not a Moore case for

while the administrative contract grievance machinery

was first invoked because of Sigfred’s discharge April 1,

1951, the issue presented through the Adjustment Board

and in both Civil Actions was the obligation, if any, under

Section 25 for salary during disability and not that of

wrongful discharge’ as such.

But Moore, in the light of Slocum, is not to be read

so narrowly. Where the relationship of carrier and the

concerned employee (either an individual or a group in-

volved) exists, all disputes concerning the interpretation

or application of the contract are exclusively within the

province of the Adjustment Board for in such cases, “its

settlement would have prospective as well as retrospec-

tive inportance to both the railroad and its employees,

since the interpretation accepted would govern future re-

lations of those parties * * *,” Slocum v. Delaware L. &

W. R. Co., supra, at 242. But where that relationship has

ceased to exist whether from rightful or wrongful cause

so long as accepted and final, the controversy becomes @

capacitated * * *.”

a aS ee .—( (iter

ane OS elhlhU[[=

eae @QOwreor -~-aeaeeaer: 7s =

Ts ee

A21

very narrow one: What is owed to this former employee?

That interpretation of the contract is inevitably required

is not decisive for Slocum recognizes, “If a court in han-

dling such a [Moore] case must consider some provision of

a collective-bargaining agreement, its interpretation would

of course have no binding effect on future interpretations

by the Board,” Slocum v. Delaware L. & W. R. Co., supra,

at 244. Slocum intends that where the controversy is one

in which the consequence of a court action is, or may be,

to substitute a judicial agency for the Statutory Adjust-

ment Board in the continuing superintendence and nurture

of labor relations in the industry, it is then clearly be-

yond the pale. But where the impact is confined to the

requirement that, in the court judgment, a carrier pay or

not pay to a former employee a specified sum, this will have

if at all, only remote influence on future industrial re-

lations. It would in no way involve the displacement’ of

"Suits after discharge seeking reinstatement and back pay

are of course forbidden:

Switchmen’s Union v. Ogden Union R. Co., 10 Cir., 209

F. 2d 419;

Broady v. Ill. Cent., 7 Cir., 191 F. 2d 73;

Buster v. Chicago, M. St. P. P. R. Co., 7 Cir., 195 F. 24 73;

Van Zandt v. Rwy. Express, S. D. N. Y., 99 Fed. Supp. 820;

anaes © renmmpuenie &. Ca, 1. D: Cite, 06 Ben, Gray.

Ct. Butler v. Thompson, 8 Cir., 192 F. 2d 831:

Brooks v. Chicago, R. I. & P. R. Co., 8 Cir., 177 F. 24 385.

This includes employees displaced by union shop requirements

(1951 Amendment, 45 U. S. C. 152):

Alabaugh v. Baltimore & Ohio R. 4 Cir gh ng

SOL, cart. dam. Oct. 1908, and cones cited trom

7th, 6th Circuits.

Likewise suits to establish seniority are forbidden:

ea ee eee eee, 6

Cir. 199 F. 2d 384;

Canes 3. Soaanens Rng: Satu, 0% Ce, 206 F.

mnaes &. Fy Chicago & St. L. R. Co., 7 Cir., 180 F. 2d

SPoamag Southern Rwy. Co., 4 Cir., 204 F. 2d 453.

A22

one, or one group, for another, cf. Slocum v. Delaware L.

& W. R. Co., supra; Order of Ry. Conductors v. Pitney,

326 U. S. 561, 90 L. Ed. 318; Washington Terminal Co. v.

Boswell, supra, the increase in rate or determination of

pay for work performed by employees, cf. Order of Ry.

Conductors v. Southern Ry., 339 U.S. 255, 94 L. Ed. 811; and,

as precedent it would not be binding on the Board, see

Slocum, supra, in adjudication cases (so-called minor

cases, cf. Elgin, Joliet and Eastern R. Co. v. Burley, 325

U. S. 711, 89 L. Ed. 1886); and, in negotiations for future

contracts, it would be irrelevant in the function of the

Mediation machinery, General Committee of Brother-

hood v. M. K. T. R. Co., 320 U. S. 88 L. Ed. 76; General

Committee v. Southern Pacific Co., 320 U. S. 338, 88 L. Ed.

85; Switchmen’s Union v. National Mediation Board, 320

U. S. 297, 88 L. Ed. 61.

IL

As a Moore claim, the Railway Labor Act did not de-

prive the court of jurisdiction to hear it or require ar

administrative finding as a prerequisite to the filing of

the suit. But such remedy was sought in fact. Of what

significance is that?

This depends, initially at least, on the policy of Florida.

Transcontinental & Western Air, Inc., v. Koppal, 345 U. S.

653, 97 L. Ed. 1325, conditions a Moore suit upon com-

pliance with any existing state policy requiring the ex-

haustion of administrative remedies. If the state law de-

mands exhaustion of the administration remedy, the suit,

even though Federally permitted, cannot be maintained.’

*Sigfred’s suit, Moore and Koppal are each diversity actions.

Koppal treats the contract of employment as a “Missouri contract,”

a factor not discussed specifically in our case. The ALPA agree-

ment here is completely silent on the place of execution delivery

of the contract. ‘

A23

Did Florida require exhaustion of the administrative

remedy? We think that, under the circumstances of this

case, Mountain v. National Airlines’® (Supreme Court of

Florida 1954), 75 So. 2d 574, answers this in the affirmative

and in doing so thus applied the traditional Florida view,

Ervin v. City of North Miami Beach, 66 So. 2d 235; De-

Carlo v. Town of West Miami, 49 So. 2d 596; and the most

recent case Morrison v. Plotkin, (1955) 77 So. 2d 254.

Moreover this is the view which the trial judge, familiar

with Florida law, took in dismissing the original Civil

Action 3774 in 1951."' Of course Pan American cannot as-

104 suit for declaratory judgment to determine whether

(a) strike-breaking pilots were “employees” and whether, if em-

ployees, (b) they had to exhaust their contract remedies. The

court refused to enter declaratory judgment on the first as it was

plain they were employees and rejected the latter as parties are

not permitted to use declaratory relief to advise them on the

procedural steps to be taken. The Court had pointed out that for

wrongful discharge, if the employee sought reinstatement and

back wages, it was necessary to pursue the remedy before the

Adjustment Board, but, as in Moore, had the right to treat em-

ployment at an end and sue for wrongful discharge. Since that

election was the first requirement and the pleadings there re-

flected that the pilots had made no such decision, the court said,

“Until the necessary election is made by the plaintiff-appellants,

and a claim for relief in accordance therewith attempts to be

stated, we can see no useful purpose in further consideration of

the problem.” Of course the “problem” referred to is whether,

once a decision is made to go the Moore route, Florida, as did

Missouri, would require allegation and proof of exhaustion of

the contract-statutory grievance machinary method.

11See Court’s findings this case: “* * * Suit No. 3774 was

dismissed, the Court holding that the jurisdiction should be de-

clined until the plaintiff has exhausted his remedies under the

agreement (the same contract known in this present suit as Ex-

hibit No. 1), and the Railway Labor Act, or elects his statutory

or Common Law remedy for breach of contract for wrongful

discharge.”

A24

sert here that the action of dismissal of 3774 was wrong,

or that Sigfred should have sought to upset it by an ap-

peal.

iL

Since Sigfred was required, either by Florida law, or

by reason of an authoritative decision which Pan Ameri-

can is not now free to question applying Florida law, to

pursue his remedy through the System Adjustment Board,

it is evident that, in assaying its impact upon his rights,

the so-called “election” was not voluntary, that is, one

resulting from his free choice. But as I view it, this

coercive characteristic need not alone be decisive here.

If, as Koppal holds, the Railway Labor Act does not

pull a Moore case out of Erie Railroad Co. v. Tompkins,

304 U. S. 64, 82 L. Ed. 1188, to determine suability, I think

it likewise follows that the state law will also determine

Of course this was not a Mountain v. National Airlines, Inc,

situation, since C. A. 3774 sought determination that Pan Amer-

ican now owed salary under § 25(a). The filing of that suit,

seeking that relief, was itself the exercise of the “election” to

pursue the Moore route. It would have been a vain thing to have

dismissed C. A. 3774, so that the plaintiff could determine whether

he wished to file a suit seeking Moore (not Slocum) judicial re-

lief. The trial judge, in his memorandum rescinding an order in

the present suit erroneously dismissing the Complaint on defend-

ant’s motion, referring to his prior dismissal of C. A. 3774 reflects

this also: “The plaintiff has exhausted the administrative rem-

edies necessary and here pursues his remedy for breach of con-

tract” (Emphasis supplied).

12Koppal might indicate a paradox which, with Moore and

Slocum, further complicates strategic and tactical problems con-

fronting counsel: If the state law requires exhaustion of rem-

edies, the election is not voluntary and hence not binding (or not

as binding); if state law does not require exhaustion of remedies,

pursuit is voluntary and hence binding. In the former, the “neces-

sity” might thus become an empty, time-consuming, useless act,

and, as not binding, be in express conflict with the Act which

states it to be final.

A25

the scope and force of the mandated administrative action.

Florida law declares that, unless the proceeding is a

Florida statutory arbitration, a party to an arbitration

proceeding may have an unlimited right of court review

on asserted errors of law. Glens Falls Insurance Company

v. Gulf Breeze Cottages, Inc., (Fla.) 38 So. 2d 828. See

Steinhardt v. Consolidated Grocery Company, (Fla.) 86

So. 431; Hanover Fire Insurance Co. v. Louis, (Fla.) 10 So.

297.

Indeed, so strong is this Florida policy against ousting

the courts of jurisdiction, that even assuming the pursuit

of the administrative remedy was, in a legal sense, vol-

untary, the Florida courts would still be open for review

of errors of law.”

4*Qur decision in Michel v. Louisville N. R. Co., 5 Cir., 188

P. 2d 224, was rendered in 1951 prior to Koppal (1953) which

introduced, for the first time, the state law in Moore cases as the

test for exhaustion and significance of administrative remedies.

In neither Michel nor Bower v. Eastern Air Lines, 3 Cir. (1954),

214 F. 2d 623, was state law (Louisiana and Pennsylvania) shown

to permit, as does Florida, court review. This, as well as some

additional factors, distinguishes other pre-Koppal cases: Charman

v. Pan American Air Lines, 9 Cir., 188 F. 2d 875; Reynolds v.

Denver & Rio Grande Western R. Co., 10 Cir., 174 F. 24 673; Hart-

ley v. Pan American Airways, N. D. Calif., 98 Fed. Supp. 247;

Hecoxr v. Pullman Co., W. D. Wash., 85 Fed. Supp. 34; Berryman

v. Pullman Co., W. D. Mo., 48 Fed. Supp. 543; Ramsey v. Chesa-

peake & Ohio R. Co., N. D. Ohio, 75 Fed. Supp. 740; Ferris v. Alaska

Airlines, Inc., W. D. Wash., 113 Fed. Supp. 907; Kelly v. Nashville,

Chattanooga, St. L. R., E. D. Tenn., 75 Fed. Supp. 737.

Moreover, Michel, unlike our present case, was the completely

voluntary assertion before the Board of an obvious Slocum case

seeking Slocum relief—reinstatement. His suit was thus an at-

tempt to change from Slocum to Moore, and, being in no sense an

appeal or quasi-appeal from the Board’s Slocum decision, the

prior determination of the fact of rightful discharge was binding

on the usual rationale of res judicata or estoppel.

See also the recent (October 19, 1955) opinion of the Supreme

Court of Florida, Flaherty v. Metal Products Corporation, 83 So.

A26

Of course, in a very real sense the System Board of

Adjustment was actually a board of arbitration which,

under the agreement and by statute, was conceived as a

bipartisan agency with deadlocks or impasses to be re-

solved by the naming of a “neutral referee.” The pro-

vision in the supplemental agreement establishing the

System Adjustment Board (see footnote 4, supra) that

decisions should be final is, of course, an implied char-

acteristic of arbitration agreements and would not ex-

empt this action from the Florida policy.

IV.

If I am correct under I, II, III, the intrinsic merits are

open to us and the court below for some character of re-

view. I believe this same result follows if we assume it

was a Slocum, not a Moore, case. Of course, in this ap-

proach the right of review must be found either expressly

in the Railway Labor Act or by necessary, fundamental

implication. We find no express right of review. The

Board’s award, denying, not granting, money relief, and

in favor of, not against, the carrier is not reviewable under

45 U. S. C. 153 First (m) or (p).”*

2d 9: “By common law doctrine, which has been recognized

by this court, parties to a contract are unable to make an ir-

revocable agreement to arbitrate all future controversies. Such

agreement is said to be contrary to public policy and obnoxious

to the law in that it seeks to oust courts of jurisdiction. Stein-

hardt v. Consolidated Grocery Co., 80 Fla. 531, 86 So. 431; Fenster

v. Makovsky, Fla., 1953, 67 So. 2d 427.”

14*(m) * * * and the award shall be final and binding upon

both parties to the dispute, except insofar as they shall contain

a money award.”

“(p) If a carrier does not comply with an order * * * of the

Adjustment Board * * * the petitioner, or any person for whose

benefit such order was made, may file in the district court * * *

a petition.”

A27

But I think that if a controversy is of a nature which

requires administrative determination by the Board of Ad-

justment, there must be some character of judicial re-

view to test whether such action afforded a proper respect

for basic guaranties inherent in our system of law.

I am aware, of course, of numerous expressions at-

tributing positive finality to the Adjustment Boards’ ac-

tions, and which take this to be a closed matter. The

fact is, however, that the Supreme Court has at least

twice taken specific pains to leave the question

Most pointedly was this done in footnote” 7 in

Delaware L. & R. Co., supra:

“We hold that the jurisdiction of

adjust grievances and disputes of the type here involved

is exclusive.’

Mr. Justice Frankfurter, in his dissent in Elgin, Joliet and

Eastern R. Co. v. Burley, 325 U. S. 711, 760, 89 L. Ed. 1886, 1914,

on a point not challenged by the majority, stated: “* * * but

the determination here in controversy does not ‘contain a money

award’ so as to be excepted from the final and binding effect

given other awards. The obvious meaning of ‘money award’ is

an award directing the payment of money, not one denying pay-

ment * * *” (Emphasis supplied). Accord: Reynolds v. Denver,

Rio Grande, W. R. Co., 10 Cir., supra.

Mr. Justice Reed, dissenting, refers to Feotnote 7: “From

this I take it that the Court means only to hold that the Board has

what might be called exclusive, primary jurisdiction and that the

decision is to have no implications for later cases which might

pose the issue of judicial review of Board ‘action or inaction.’”

A28

Elgin, Joliet and Eastern R. Co. v. Burley, supra, at pages

719, 720, was another, and its affirmance by an equally

divided court of Washington Terminal Co. v. Boswell,”

D. C. Cir., 124 F. 2d 235, affirmed 319 U. S. 732, 87 L. Ed.

1694, indicates that the issue is substantial.

We would not have to mark out the full limits of the

review. It is sufficient here to permit reappraisal of the

construction of a written contract to determine whether,

on the contract, there has been an error of law. I think

this much is assuredly required. If not, substantial and

vital rights are imperiled or may be lost altogether. And

this must be determined in the light of actuality, reflect-

ing no real, free, deliberate relinquishment of the right

of recourse to all legal protection by the employee. Under

the Act the employee must be represented by a union.

If he desires to work in transportation (rail or air), he is

compelled to work under the contract negotiated for him.

The Act requires that the union and carrier establish

compulsory grievance machinery, and that contract dis-

putes, failing agreement, must be heard and determined

by a Board.

Boswell was a declaratory suit by a carrier challenging the

validity of a money award by the Adjustment Board. Holding

that the carrier had an adequate right of legal review in resisting

the suit brought by the employee within two years (45 U. S. C.

153, First (p) (q)), the suit was dismissed. Judge, later Justice,

Rutledge for the majority implied that were no such opportunity

available to test the award, it would be unconstitutional. At least

four Justices must have thought that was inadequate for a carrier.

The other four could have been of the view that no review of any

kind was needed, or that, for a carrier in that situation, there

was an adequate right to contest the employees’ Petition to enforce

filed within two years. See also Dahlberg v. Pittsburgh and L. E.

R. Co., 3 Cir., 138 F. 2d 121; and, Alabaugh v. Baltimore and Ohio

R. Co., 4 Cir., supra, at pages 866, 867.

In New Orleans Public Belt Railroad Commission v. Ward, 5

Cir., 182 F. 2d 654, we likewise, by two to one, dismissed a similar

declaratory suit by a carrier.

A29

A person’s contract of employment covering his com-

pensation for work done and, nowadays, all of those so-

called fringe benefits relating to sickness and health pay-

ments, accidents, hospitalization, retirement and pension

rights as well, is a vital right. Applied literally, the Act

forces a person to commit every question as to the very

existence, scope or application of that right to an agency

having no standing as an official arm of the executive,

legislative, or judicial branch of government."*

As we are not foreclosed by prior decisions or the

contract," I adhere to the fundamental conviction that

with rights so vital some suitable means must be available

to determine whether the agency to which Congress has

committed the parties to resolution of their differences

has adequately adjudicated the controversy.

But the court declines to permit any review. Indeed,

it ignores the problem altogether. The result is that, out

of the countless situations one can now think of, in which

the heavy hand of Government determines the very eco-

nomic existence or survival of an activity, the railway-

"The parties are denied even the protection of the Admin-

istrative Procedure Act, 5 U. S. C. 1001, et seq. See Section 1001.

“* * * Except as to the requirements of Section 1002 of this Title,

there shall be excluded from the operation of this chapter

(1) agencies composed of representatives of the parties or of rep-

resentatives of organizations of the parties to the disputes de-

termined by them * * *.”

“The parties have not lost this fundamental right by their

contract. The contract provision (footnote 4, supra), of final-

ity, par. 3(L), is contractually modified by par. 3(N), preserving

all rights, etc., under the Act; and the Act, 46 U.S. C. 184, expressly

limits the agreement and the Board to the Act:

A30

airline employee vis-a-vis railroad-airline employer is the

sole’ one in which no judicial review whatever is af-

forded.

"The following are a few of many examples in which the

right to carry on some trade or business, or to do (or not do) some

particular act is controlled by statute or committed by statute to

determination by some administrative agency [cf. a Railway Ad-

justment Board] and in each, judicial review is afforded:

A carrier, rail, motor or water, seeking a Certificate of public

convenience and necessity, 49 U. S. C. A. 1, 306, 905, 909, or con-

tract carrier permit, 49 U. S. C. A. 309, or seeking to prevent grant

of rights to a competitor, or enforcement of adverse tariff rates,

etc. 49 U. S.C. A. 6, 15, 16, has judicial review of Interstate

Commerce Commission orders and decisions, 28 U. S. C. A. 1336.

Similarly for decisive orders of Civil Aeronautics Board, is-

certificates, taritfs, et, 49 U. S.C. A. 422, 481, 483, are re

U. S. C. A. 646;

for radio and television station permits or denial to com-

tor or threatened competitor, 47 U. S. C. A. 303, et seq., 402;

for licenses to construct, operate interstate gas and oil pipe

lines, electricity rates, dams, etc., by Federal Power Commission,

15 U.S. C. A. 717(a) to 717(u), see 717(R), 16 U. S.C. A. 797(e)

and 824, 825 (L);

Mconsing eperation and retes of pectsars and Stockyards, ¥ ©:

S. C. A. 192, 193, 194, 211, 212, 213, 216, 217;

issuance, underwriting of securities, approval or disapproval,

cease and desist orders, etc. 15 U. S. C. A. 77(a) to 77 (bbbb),

78(a) to 78(jj), review 78(y);

alteration of bridges over navigable waters, 33 U. S. C. A. Sil

to 523, reviewable 520;

Postal Department orders restricting use of the mails, 39 U.

S. C. A. 259, 732, see Reilly v. Pinkus, 338 U. S. 273, 94 L. Ed. 63;

unfair trade practices, investigations, cease and desist orders

by Federal Trade Commission, 15 U. S. C. A. 45, 46, 52-56, 68

68(j), 71-77, reviewable 45(c)(d);

certain foods, orders by Food and Drug Administration, 21 U. 5.

C. A. 301, 341, 344, 355, reviewable 371(f), 355(h).

i el

c

t

e

.

-

-

ore BM ee tt

oe.

A31

The Adjustment Board mechanism is in no sense

voluntary. It is forced on employer and employee alike.

Government cannot compel people to resort to such a

tribunal for the irrevocable determination of issues which

go to the heart of life itself, unless some means is afforded

to test the elemental correctness of it. Justice Brandeis

(St. Joseph Stock Yard Co. v. United States, 298 U. S. 38,

80 L. Ed. 1033) phrased it:

“The supremacy of law demands that there shall

ducted regularly. To that extent, the person asserting

a right, whatever its source, should be entitled to the

independent judgment of a court on the ultimate ques-

tion of constitutionality.”

The need for this is as great for the railroad-airline

held for, rather than against, Sigfred’s construction of the

contract.

Vv.

The review which I hold must exist may, at least,

take the form of the suits brought here for declaratory

Here it is sufficient if it has the minimum capacity to re-

view an asserted plain error of law in the construction of

A32

a written contract.” The troublesome questions on the

reviewability of controverted fact issues, the use or non-

use of a concept of substantial evidence, the problem of

administrative expertise on inferences from uncontradicted

evidence are points for determination at a later day.

VL

I come then finally to the question: Was the Adjust-

ment Board’s decision that Section 25 (a) did not require

payment of salary during continuance of this occupation

disability correct? In brief,” Sigfred contends that the

Here the questions so troublesome to judges and lawyers,

see VI, infra, were determined by laymen, at least three of whom

were pilots. :

21(References are to sentences as numbered [ ] footnote 1,

supra.) The Company maintains that upon intrinsic analysis Sig-

fred’s construction cannot be sustained. It argues that [3] must

refer only to [2] non-occupational sickness or injury away from

home base, because the term “during such period” in [3] being

in the singular can refer to one event only, either that in [1] or

[2] and of these, it must be [2] for only in [2] is there a state-

ment in terms of a period of time, namely, “While on assignment

at a point other than the pilot’s base station.” The Company

bolsters this by pointing out that for Sigfred’s construction to be

consistent, [4] must refer to non-occupational sickness or injury

only, whereas in terms it makes no distinction between occupa-

tional and non-occupational.

In replying to these contentions, Sigfred asserts that if [3]

refers to [2] and is thus limited to non-occupational sickness

or injury, then the provision in [3] that Workmen’s Compensation

must be paid back to the Company is superfluous. But this can-

not be decisive since Sigfred faces the same difficulty in maintain-

ing that [4] applies to non-occupational only, for then the similar

provision of [5] would likewise be superfluous. Sigfred suggests

an answer for each: The Company, as was the case here, may

consider an injury to be non-occupational which the Commission

later holds is compensable.

As a telling and principal argument, Sigfred points out that

if, as the Company maintains, [3] refers to [2] and [4] applies

A33

salary payable under sentence [3] relates to sentence

{1}; Pan American, on the other hand, insists that sen-

tence [3] relates only to sentence [2], non-occupational

injury or illness away from the pilot’s base station, and

that the provision for the continuance of salary is permis-

sive within the sole discretion of the Company under

sentence [4], Section 25(b).

On the basis of this analysis, construction of the con-

tract is, to be sure, most difficult. However, I think that

the fine, technical, intrinsic analysis of the Company can-

not stand against the absurdities which would result, and

that Sigfred’s construction is, on the whole, the more

reasonable one. The majority opinion oversimplifies the

matter to suggest that arbitrators “could not easily have

yielded to a construction that would require the Com-

pany to pay a pension of the full sum of $13,440.00 annual

salary to all pilots who no longer meet rigid flight medical

requirements for as long as their disability exists.” This

both to occupational and non-occupational, then absurd results

necessarily follow: pilots away from the base station will not be

entitled to salary if their sickness or injury is occupational (for

example, a severe crash through no personal fault) but are ab-

solutely entitled to it if the sickness or injury is non-occupational

(applying [3] to [2]); pilots with occupational sickness or injury

away from the base may not get salary, yet if the occupational

sickness or injury is at the home base where the need for salary

is minimized, they may get it ([{4] construed to cover occupational

and non-occupational). As thus construed the salary benefits

are available when the need is least and unavailable when needed

most.

Section 28, Workmen’s Compensation, offers little intrinsic

help. By its reference to §§ 29, 30 (prisoner, internment, missing,

ete.) and sentences [3] and [5], § 25 it is clear that both recog-

ized that obligations for illness/injury would frequently exceed

the limited benefits under compensation Acts; but since state or

federal law would require compliance (see Florida laws footnote

5, supra, Longshoremen’s Act, 33 U. S. C. 901, 904, 914, 932, 938),

provision should be made for credit to prevent double benefits.

A34

ignores the requirement of the contract of “occupational

sickness or injury” and, here, the fact which res judicata

charges to Pan American that its own actions may well

have been the cause of his final permanent incapacity. I

would think—since the majority has undertaken to assay

its business reasonableness—such a result was hardly

to be described as unexpected.

This is not the case of a manual laborer. Here the

contract dealt with persons having responsibilities and

duties of those of near executive status. Airline pilots

prises would, in many cases, exceed that of the Captain

on a modern airliner. Yet these businesses recognizing

the inevitable deficiencies in workmen’s compensation

schemes, Social Security, or the like, frequently provide

for service-connected-disability payments approximating

former income. My view is that reasonableness is not

for us to determine—but if it is, I cannot escape the feel-

ing that if a business makes a person physically unfit

work, it is quite reasonable for it to agree to shoulder the

responsibility.

The question would then be: did they so agree? With

considerable uncertainty, I think they did. But the im

portant thing is that that question ought to have been re

viewed directly and affirmatively by a court and, on ap

peal by an appellate court.

oan _i- 4

A3&

That question has, at best, been only obliquely

answered by judges to whorn our systern accords the right

and duty to determine questions of law.

I therefore respectfully dissent.

CSL —_ a,

ann es se weeewsi@iiawwsegei awwPpPp2eii Sa @

S848 46 A

A36

JUDGMENT.

Extract from the Minutes of January 19th, 1956.

No. 15490

STURE V. SIGFRED,

versus

PAN AMERICAN WORLD AIRWAYS, INC.

This cause came on to be heard on the transcript of

the record from the United States District Court for the

Southern District of Florida, and was argued by counsel;

On consideration whereof, It is now here ordered and

adjudged by this Court that the judgment of the said Dis-

trict Court in this cause be, and the same is hereby, af-

firmed;

It is further ordered and adjudged that the appellant,

Sture V. Sigfred, and the surety on the appeal bond here-

in, Phoenix Indemnity Company, be condemned, in solido,

to pay the costs of this cause in this Court for which exe-

cution may be issued out of the said District Court.

“Brown, Circuit Judge, dissenting.”

ORDin DENYING REHEARING.

Extract from the Minutes of February 21st, 1956.

No. 15490

STURE V. SIGFRED

versus

PAN AMERICAN WORLD AIRWAYS, INC.

It is ordered by the Court that the petition for re-

hearing filed in this cause be, and the same is hereby,

denied.

“Brown, Circuit Judge, dissenting.”

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

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Petition for Writ of Certiorari — Sigfred v. Pan American World Airways, Inc. · 351 U.S. 925 | Frix