Summary
discussing Capraro and refusing to rule that “a union employee who is covered by the RLA can be contractually precluded from independently pursuing arbitration before an [adjustment board]”
Summary of this case from Santiago v. United Air Lines, Inc.Opinion
Civil Action No. 3:03-CV-0984-D
December 15, 2003
MEMORANDUM OPINION AND ORDER
This lawsuit arises from American Airlines, Inc.'s ("AA's") acquisition of certain assets of the bankrupt Trans World Airlines, Inc. ("TWA") and the integration of former TWA pilots into the AA pilot seniority list. Plaintiffs, who grieved an AA decision to furlough former TWA pilots, maintain that they were entitled to, but denied, a System Board of Adjustment ("SBOA") to resolve their grievance and that the decision of the AA/APA TWA Merger Committee ("JMC"), which resolved the grievance adversely to them, must be vacated. The court dismisses three of plaintiffs' four claims but grants them leave to replead one dismissed claim. The court declines to dismiss plaintiffs' claim that they are entitled to have an SBOA convened to decide their grievance.
I
Plaintiffs Peter D. Brady ("Brady"), Michael S. McFarland ("McFarland"), Charles E. Long ("Long"), Howard B. Hollander ("Hollander"), and Garth Richards ("Richards") sued defendants Allied Pilots Association ("APA") and AA arising from AA's decision to furlough AA pilots who were formerly employed by TWA. AA, through a wholly — owned subsidiary, acquired certain assets of TWA, a bankrupt airline. Under the terms of the relevant transition agreement, TWA pilots were integrated into the AA pilot seniority list, resulting in a modified System Seniority List. AA has a collective bargaining agreement ("CBA") with its pilots, who are represented by APA. To effect the integration of former TWA pilots into the AA pilot System Seniority List, APA and AA executed a modification to the CBA, entitled Supplement CC. Under the "Fence Provisions" of Supplement CC, a number of pilot positions were reserved to former TWA pilots generally domiciled and working at the St. Louis station.
In deciding defendants' motions filed under Fed.R.Civ.P. 12(b)(6), the court accepts all well — pleaded facts as true and views them in the light most favorable to plaintiffs. See Capital Parks, Inc. v. Southeastern Adver. Sales Sys., Inc., 30 F.3d 627, 629 (5th Cir. 1994) (citing O'Quinn v. Manuel, 773 F.2d 605, 608 (5th Cir. 1985)). "In order to avoid dismissal for failure to state a claim, however, a plaintiff must plead specific facts, not mere conclusory allegations. We will thus not accept as true conclusory allegations or unwarranted deductions of fact." Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000) (internal quotation marks omitted) (quoting Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir. 1994) (internal citations, quotation marks, and ellipses omitted)).
AA later informed certain pilots that, unless APA agreed to amend Supplement CC, it would be necessary to furlough more than 100 former TWA St. Louis station pilots. In response to AA's notice, plaintiffs McFarland, Long, and Hollander, represented by Brady, grieved AA's interpretation and application of Supplement CC. They exhausted all contractual remedies, including appealing to the SBOA, and they complied with Supplement CC and exhausted all remedies under it. Plaintiffs also sought to arbitrate their grievance without APA representation, with their own representative and at their own expense. In response, APA and AA referred the grievance to the JMC, a joint merger committee established under Supplement CC. The JMC consists of two AA representatives and two APA — appointed representatives, but lacks a neutral arbitrator. The representatives from AA and APA were appointed by signatories to Supplement CC who were hostile to plaintiffs' position. Another APA signatory, who was a member of the JMC, was equally hostile. Supplement CC provides that, if a majority of the JMC cannot resolve a dispute, it may be referred to the SBOA provided for in the CBA.
On January 20, 2003 the JMC convened a hearing. Plaintiffs were neither advised of the right, nor permitted, to have counsel, they did not have the power to compel the attendance of witnesses or the production of documents, no testimony was taken, and other rights that would have been provided before a SBOA were lacking. APA arbitrarily and in bad faith refused to convene an SBOA and denied plaintiffs arbitration. AA also arbitrarily and in bad faith refused to convene an SBOA and refused to hear the Supplement CC grievance. On February 20, 2003 the JMC denied plaintiffs' grievance.
Although plaintiffs' assertions concerning APA's bad faith can be accepted as true for purposes of deciding APA's motion to dismiss, plaintiffs have failed sufficiently to raise a fact question concerning these allegations in the context of APA's summary judgment motion addressed to claim two, which alleges a breach of the union's duty of fair representation. The court therefore is properly granting summary judgment as to this claim despite the fact that Rule 12(b)(6) dismissal would likely be improper.
In an amended complaint that the court today grants plaintiffs leave to file, plaintiffs McFarland, Long, and Hollander assert four claims against defendants. They allege in claim one that defendants violated plaintiffs' individual statutory rights under the Railway Labor Act, 45 U.S.C. § 151-188 ("RLA"), by failing to convene an SBOA to arbitrate a Supplement CC grievance that McFarland, Long, and Hollander filed and were entitled to initiate independently of the union. They request that the court order APA and AA to convene an SBOA. Alternatively, in claim two they assert that APA breached its duty of fair representation, and in claim three they posit that AA breached the CBA, when APA and AA refused to convene an SBOA to arbitrate their Supplement CC grievance. They seek damages under these causes of action. Plaintiffs sue in claim four to vacate the February 20, 2003 decision of the JMC to the extent it constitutes final and binding arbitration, contending that the JMC failed to comply with the RLA, failed to act within its jurisdiction, and deprived plaintiffs of due process.
Plaintiffs also allege in their amended complaint that defendants improperly failed to arbitrate the Richards Grievance. See Am. Compl. ¶¶ 29, 34, 39. In response to defendants' motions, however, plaintiffs concede that if the court grants leave to amend to remove Brady and Richards as plaintiffs, defendants' motions to dismiss their claims are moot. See Ps. July 21, 2003 Br. at 45.
Accordingly, the court does not address plaintiffs' claims to the extent they involve the Richards Grievance. APA asks the court to dismiss with prejudice the claims brought by Brady and Richards, despite their removal from the case via the amended complaint. The court declines this request because APA does not object to granting leave to amend the complaint, which has the effect of dismissing Brady's and Richards' claims without prejudice.
Plaintiffs move for leave to amend their complaint. AA moves to dismiss plaintiffs' complaint and amended complaint under Fed.R.Civ.P. 12(b)(6) for failure to state a claim on which relief can be granted, and APA moves to dismiss plaintiffs' complaint and amended complaint or for summary judgment. Because the court grants plaintiffs' motion to amend, AA's June 16, 2003 motion to dismiss and APA's June 16, 2003 motion to dismiss or for summary judgment are denied without prejudice as moot. In considering their motions directed to the amended complaint, however, the court will consider their papers filed in support of their original motions. See Holmes v. Nat'l Football League, 939 F. Supp. 517, 522 n. 7 (N.D. Tex. 1996) (Fitzwater, J.) (noting that court may consider sufficiency of amended complaint in response to motion to dismiss filed before that pleading was filed, where defects in complaint to which motion is addressed reappear in amended complaint).
II
The court turns first to plaintiffs' motion for leave to amend. Although plaintiffs styled the motion as opposed, APA states in its response that it does not oppose the motion, and it has filed a motion to dismiss the amended complaint or for summary judgment. AA has assumed that the amended complaint will be filed and has moved to dismiss it under Rule 12(b)(6), and it states in its August 5, 2003 reply brief that it does not oppose the motion. See AA Aug. 5, 2003 Rep. Br. at 1 n. 1. Because neither APA nor AA opposes the filing of the amended complaint, and each defendant has had a fair opportunity to challenge it on the merits, the court grants the motion. The court will therefore address AA's and APA's substantive motions in the context of plaintiffs' amended complaint.III
The court now considers AA's motion to dismiss plaintiffs' amended complaint and APA's motion to dismiss plaintiffs' amended complaint or for summary judgment. Plaintiffs allege in claim one that AA and APA violated plaintiffs' individual statutory rights under the RLA by failing to convene an SBOA to arbitrate their Supplement CC grievance.A
AA maintains that the claims against it should be dismissed because plaintiffs have already received a decision of the JMC and cannot re-arbitrate the matter before an SBOA. The court is unable to say beyond doubt that AA is entitled to dismissal on this basis.AA argues that plaintiffs' right to an SBOA is governed by the CBA, as supplemented by Supplement CC, which states:
[i] f a dispute described in Section VII.B. [of Supplement CC] is not resolved by a majority vote of the [JMC], the unresolved dispute may be referred by either party to the Five Member System Board of Adjustment as provided in Section 23 of the [CBA] and related letters and practices.
APA June 16, 2003 App. 59. It is undisputed that plaintiffs' grievance was resolved by the JMC by a unanimous adverse vote. AA therefore contends that plaintiffs are not entitled to an SBOA and that claims one and three lack merit as a matter of law. Plaintiffs maintain that they are entitled under the RLA to exercise their rights independently of APA and that AA and APA cannot contractually preclude them from doing so under the terms of the CBA and Supplement CC.
"In deciding a motion to dismiss the court may consider documents attached to or incorporated in the complaint and matters of which judicial notice may be taken." United States ex rel. Willard v. Humana Health Plan of Tex., Inc., 336 F.3d 375, 379 (5th Cir. 2003) (citing Love lace v. Software Spectrum Inc., 78 F.3d 1015, 1017-18 (5th Cir. 1996)). "[D]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim." Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993)). "In so attaching, the defendant merely assists the plaintiff in establishing the basis of the suit, and the court in making the elementary determination of whether a claim has been stated." Id. at 499. Accordingly, the court may consider the contents of the CBA and Supplement CC.
The parties have not cited, and the court has not found, a decision of the Fifth Circuit that resolves whether a union employee who is covered by the RLA can be contractually precluded from independently pursuing arbitration before an SBOA. AA has failed to cite a case that squarely supports its position that the CBA and Supplement CC can lawfully require that, before they may pursue relief before an SBOA, plaintiffs must obtain a deadlocked decision by the JMC. An opinion of the Third Circuit, however, undercuts AA's position. In Capraro v. United Parcel Serv. Co., 993 F.2d 328 (3d Cir. 1993), the court held:
As we have earlier noted, the grievance and arbitration process is not optional under the RLA. Congress intended the RLA's procedures, particularly the Adjustment Boards, to be the exclusive means of dealing with minor matters involving the interpretation of a collective bargaining agreement and for all aggrieved employees to have access to such procedures. It necessarily follows that an employer and a union, through a negotiated collective bargaining agreement, cannot deprive a category of employees of access to the grievance and arbitration process. Thus, if the collective bargaining agreement here is read to deny such access, the relevant clauses, to that extent, are invalid and unenforceable. Therefore, if the Adjustment Board were to refuse to entertain Capraro's claim (or if UPS were to refuse to participate in the arbitration proceedings), Capraro would be entitled to a judicial order compelling arbitration. Such an order would serve the competing policies of ensuring that employees are not left remediless, and that minor disputes are resolved through arbitration rather than litigation.Id. at 336-37 (emphasis added) (citations and footnotes omitted). The Eleventh Circuit stated in dicta in Pyles v. United Air Lines, Inc., 79 F.3d 1046, 1052 n. 9 (11th Cir. 1996), that it "believed" that airline employees had a statutory right to pursue claims before an SBOA without union assistance. In Whitaker v. American Airlines, Inc., 285 F.3d 940 (11th Cir. 2002), APA relied on Capraro to "argue that 45 U.S.C. § 184 establishes the individual right of an air industry employee to compel arbitration before the adjustment board established by his union and employer." Id. at 944. It "maintain[ed] that this individual statutory right of [the pilot's] would continue to exist even if the Agreement purported to waive it because any waiver would be void." Id. And in the present case, APA characterizes the issue as "not clear," APA June 16, 2003 Br. at 20 ("Whether or not individual employees in the airline industry have the right to bring their claims to a board of adjustment under Section 204 without the concurrence of the labor organization is not clear."), and describes this area of the law as "unsettled," APA Aug. 5, 2003 Rep. Br. at 8 n. 3.
In Whitaker v. American Airlines, Inc., 285 F.3d 940, 945 (11th Cir. 2002), the Eleventh Circuit characterized the discussion in Pyles as dicta.
This court may dismiss a complaint under Rule 12(b)(6) for failing to state a claim on which relief can be granted only if AA can establish beyond doubt that plaintiffs can prove no set of facts in support of their claim that would entitle them to relief. See, e.g., Royal Bank of Canada v. FDIC, 733 F. Supp. 1091, 1094 (N.D. Tex. 1990) (Fitzwater, I). AA has failed to demonstrate beyond dispute that, due to the provisions of the CBA and Supplement CC, plaintiffs cannot recover under claim one.
The court recognizes that, in the context of this Rule 12(b)(6) motion, it could decide as a matter of first impression how the Fifth Circuit would resolve the question whether plaintiffs have an independent statutory right to pursue a hearing before an SBOA despite the terms of the CBA and Supplement CC and the adverse decision of the JMC. It prefers, however, to do so when addressing a substantive motion that presents the question more directly and briefs this specific issue thoroughly and cogently.
B
APA moves to dismiss or for summary judgment as to claim one on the ground that plaintiffs received the hearing to which they were entitled under the RLA when the JMC heard their grievance. It posits that the RLA requires only a hearing before a board composed of equal numbers of representatives of the employee and union, that employees are not entitled to a neutral arbitrator when a majority of board members are in agreement, and that plaintiffs had their grievance heard in accordance with the RLA. APA contends that plaintiffs are demanding a right to a hearing before — and a decision by — a neutral arbitrator that the RLA does not confer.Under the CBA, however, an SBOA is a distinct body from the JMC that heard plaintiffs' grievance, with different functions and composition. Compare CBA § 23, APA June 16, 2003 App. 16-18 ("System Board of Adjustment") with CBA § 22, id at 13-15 ("Grievance Review Board"). Even if the JMC is not the equivalent of the § 22 Grievance Review Board, see APA Aug. 5, 2003 Rep. Br. at 14-15, Supplement CC itself distinguishes between the JMC and "the Five Member System Board of Adjustment as provided in Section 23 of the [CBA,]" APA June 16, 2003 App. 59. The JMC is structured to function prior to, and separately from, the SBOA. APA has failed to establish that it is entitled to dismissal or summary judgment with respect to plaintiffs' claim one, which seeks the convening of an SBOA to hear their claims.
C
APA moves to dismiss or for summary judgment concerning plaintiffs' claim two, in which they allege that APA breached its duty of fair representation. The sole basis for this cause of action is the contention that APA breached its duty when it refused to convene an SBOA to arbitrate plaintiffs' Supplement CC grievance. See Am. Compl. ¶ 34.
A union's duty to represent employees fairly is violated "only when a union's conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith." Vaca v. Sipes, 386 U.S. 171, 190 (1967) (citing Humphrey v. Moore, 375 U.S. 335 (1964); Ford Motor Co. v. Huffman, 345 U.S. 330 (1953)). Because APA will not have the burden of proof on this claim at trial, it can meet its summary judgment obligation by pointing the court to the absence of evidence to support plaintiffs' claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). APA has pointed the court to the absence of evidence to support a finding that APA's actions were arbitrary, discriminatory, or in bad faith. See APA June 16, 2003 Br. at 27-29. Plaintiffs must therefore go beyond their pleadings and designate specific facts showing there is a genuine issue for trial. See Celotex, 477 U.S. at 324; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam). Summary judgment is mandatory when the nonmoving parties fail to meet this burden. Little, 37 F.3d at 1076. Plaintiffs have not adequately responded to this ground of APA's motion, see Ps. July 21, 2003 Resp. at 1-2, and have therefore failed to present evidence that would permit a reasonable trier of fact to find in their favor on this claim. Accordingly, the court grants summary judgment dismissing claim two.
Plaintiffs' summary judgment response contains assertions regarding APA's motion that do not clearly address the elements of a claim for breach of the duty of fair representation and do not cite the summary judgment evidence. See Ps. July 21, 2003 Resp. at 1-2. To the extent plaintiffs have addressed claim two inferentially by asserting other arguments not explicitly directed to this claim, or have adduced summary judgment evidence that they do not clearly connect to this claim in their brief, the court is not required to consider the arguments or evidence. See, e.g., Malacara v. Garber, F.3d 2003 WL 22890688, at * 10 (5th Cir. Dec. 9, 2003) (holding that record evidence that summary judgment nonmovant did not mention in his brief was not properly before district court, that district courts have no duty under Rule 56 to sift through record in search of evidence to support nonmovant's opposition to summary judgment, and that because nonmovant did not identify any evidence of damages in his response, evidence was not properly before district court and would not be considered on appeal); N.D. Tex. Civ. R. 56.5(c) ("A party whose . . . response is accompanied by an appendix must include in its brief citations to each page of the appendix that supports each assertion that the party makes concerning the summary judgment evidence.").
D
APA moves to dismiss claim three, plaintiffs' breach of contract claim. The court holds that AA and APA are both entitled to dismissal of this cause of action because neither violated the CBA by declining to convene an SBO A. Although defendants are not entitled to dismissal of plaintiffs' first claim because, inter alia, of the possibility that plaintiffs have a right to an SBOA that is independent of the CBA, the CBA, combined with Supplement CC, clearly provide that plaintiffs were entitled to an SBOA only if the JMC decision was deadlocked. Because the JMC was not deadlocked, defendants did not breach the CBA by denying plaintiffs an SBOA. Plaintiffs' claim three is dismissed with prejudice.
IV
Plaintiffs allege in claim four that the JMC's award should be voided because the committee failed to comply with the requirements of the RL A, failed to conform or confine itself to matters within the scope of its jurisdiction, and failed to afford minimal due process. AA moves to dismiss this claim, and APA moves to dismiss the claim or for summary judgment. The court grants defendants' motion to dismiss, but it affords plaintiffs leave to replead.
Perhaps because claim four is a new cause of action asserted in plaintiffs' amended complaint, APA does not contend until its reply brief that the court lacks jurisdiction to vacate the JMC's decision. See APA Aug. 5, 2003 Rep. Br. at 16-17. Despite the fact that the briefing has been affected by the midstream amendment of plaintiffs' complaint, the court will not consider an argument raised for the first time in a reply brief. See, e.g., Senior Unsecured Creditors' Comm. of First RepublicBank Corp. v. FDIC, 749 F. Supp. 758, 772 (N.D. Tex. 1990) (Fitzwater, I). Accordingly, the court will not reach APA's jurisdictional challenge at this time, but APA may raise it anew by proper motion to dismiss, if it has grounds to do so.
Because the court grants APA's motion to dismiss, it does not reach APA's alternative motion for summary judgment. Until plaintiffs adequately plead claim four, there is no reason to address whether the cause of action is subject to dismissal under the summary judgment standard.
To dismiss plaintiffs' fourth claim, the court need only address the contention that the cause of action is pleaded in a conclusory manner. A plaintiff "must plead specific facts, not mere conclusory allegations." Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992) (quoting Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989)). The sole allegation that plaintiffs make that is explicitly related to the merits of claim four is contained in ¶ 46 of their amended complaint, which states:
The award of the [JMC] rendered on February 20, 2003, following a hearing on January 20, 2003, is voidable because the [JMC] failed to comply with the requirements of the [RLA], failed to conform, or confine, itself to matters within the scope of its jurisdiction, and failed to afford minimal due process.
Am. Compl. ¶ 46. This allegation is conclusory. Although in ¶ 44 plaintiffs incorporate the prior 43 paragraphs of their amended complaint to support claim four, and there are hints in ¶ 22 of possible bases for this claim, it is unclear which, if any, components of ¶ 22 are intended to support the conclusory assertion of ¶ 46. Accordingly, the court grants AA's and APA's motions to dismiss claim four under Rule 12(b)(6).
The court will allow plaintiffs 30 days from the date of this memorandum opinion and order to file an amended complaint that alleges claim four in a non-conclusory manner.
In view of the consequences of dismissal on the complaint alone, and the pull to decide cases on the merits rather than on the sufficiency of pleadings, district courts often afford plaintiffs at least one opportunity to cure pleading deficiencies before dismissing a case, unless it is clear that the defects are incurable or the plaintiffs advise the court that they are unwilling or unable to amend in a manner that will avoid dismissal.Great Plains Trust Co. v. Morgan Stanley Dean Witter Co., 313 F.3d 305, 329 (5th Cir. 2002) (Fitzwater, J.).
For the reasons set out, plaintiffs' July 17, 2003 motion for leave to amend the complaint is granted, and the clerk of court is directed to file the first amended complaint today. The court denies as moot AA's June 16, 2003 motion to dismiss and APA's June 16, 2003 motion to dismiss or for summary judgment. The court grants in part and denies in part AA's July 30, 2003 motion to dismiss and grants in part and denies in part APA's July 30, 2003 motion to dismiss and for summary judgment. The court does not reach the part of APA's July 30, 2003 alternative motion for summary judgment that addresses claim four. Plaintiffs are granted 30 days from the date of this memorandum opinion and order to file an amended complaint that adequately pleads claim four.