Horner et al v. American Airlines Inc et al

REPLY

N.D. Tex.September 15, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION ) KEVIN HORNER, ) JOHN KRAKOWSKI, ) KEITH BOUNDS, and ) JOE TERSTEEG, ) ) Plaintiffs, ) ) Civil Action No. 3:17-cv-00665-D v. ) ) AMERICAN AIRLINES, INC. and ) ALLIED PILOTS ASSOCIATION, ) ) Defendants. ) ) ALLIED PILOTS ASSOCIATION’S REPLY IN SUPPORT OF CROSS-MOTION TO DISMISS OR, IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT SANFORD R. DENISON STEVEN K. HOFFMAN* TX Bar No. 05655560 D.C. Bar No. 384696 Baab & Denison, LLP DANIEL M. ROSENTHAL* 6301 Gaston Avenue, Suite 550 D.C. Bar No. 1010473 Dallas, TX 75214 James & Hoffman, P.C. Tel.: (214) 637-0750 1130 Connecticut Avenue, NW, Suite 950 Fax: (214) 637-0730 Washington, DC 20036 Email: denison@baabdenison.com Tel.: (202) 496-0500 Fax: (202) 496-0555 Email: skhoffman@jamhoff.com *Admitted Pro Hac Vice dmrosenthal@jamhoff.com Counsel for Defendant Allied Pilots Association Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 1 of 19 PageID 1486 i TABLE OF CONTENTS TABLE OF AUTHORITIES .......................................................................................................... ii INTRODUCTION .......................................................................................................................... 1 ARGUMENT .................................................................................................................................. 4 I. PLAINTIFFS FAIL TO STATE A PLAUSIBLE CLAIM TO VACATE THE ARBITRAL AWARD. ....................................................................................................... 4 A. The Fifth Circuit has foreclosed Plaintiffs’ argument that they have standing. ..... 4 B. There was an arbitrable RLA dispute between legacy American pilot grievants and American. ......................................................................................... 6 C. The grievance process complied with the RLA and the CBA. ............................... 8 D. The CBA expressly authorized Arbitrator Bloch to arbitrate disputes over Supplement C as a single-member System Board. ................................................. 9 II. PLAINTIFFS FAIL TO STATE A CLAIM FOR BREACH OF THE DFR, OR, ALTERNATIVELY, APA IS ENTITLED TO SUMMARY JUDGMENT ON THAT CLAIM. ................................................................................................................. 11 A. None of APA’s actions were arbitrary, discriminatory, or in bad faith. ............... 11 B. Plaintiffs have not plausibly established DFR causation. ..................................... 13 CONCLUSION ............................................................................................................................. 14 CERTIFICATE OF SERVICE ..................................................................................................... 15 Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 2 of 19 PageID 1487 ii TABLE OF AUTHORITIES Cases Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65 (1991) ............................................................13 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ......................................................................................... 11 Beard v. Banks, 548 U.S. 521 (2006) ..............................................................................................3 Chernak v. Southwest Airlines Co., 778 F.2d 578 (10th Cir. 1985) ................................................5 Cont’l Airlines, Inc. v. E. Pilots Merger Comm., Inc. (In re Cont’l Airlines, Inc.), 484 F.3d 173 (3d Cir. 2007).................................................................................................7 Friou v. Phillips Petroleum Co., 948 F.2d 972 (5th Cir. 1991) .......................................................8 Hall v. Eastern Air Lines, Inc., 511 F.2d 663 (5th Cir. 1975) .........................................................5 Henry v. Delta Air Lines, 759 F.2d 870 (11th Cir. 1985) ................................................................5 Henson v. Geithner, No. 3:11-CV-1892-D, 2013 U.S. Dist. LEXIS 1301 (N.D. Tex. Jan. 4, 2013) .......................................................................................................4 Hopkins v. Women’s Div., Gen. Bd. of Global Ministries, 284 F. Supp. 2d 15 (D.D.C. 2003), aff'd, 98 F. App’x 8 (D.C. Cir. 2004) ...................................................................................8 Krakowski v. Am. Airlines, Inc. (In re AMR Corp.), Case No. 11-15463 (SHL), Adv. Proc. No. 13-01283 (SHL), 2014 WL 2508729 (Bankr. S.D.N.Y. June 3, 2014) ......................................................................................................................12 Mackenzie v. Air Line Pilots Ass’n, Int’l, 598 F. App’x 223 (5th Cir. 2014) ..............................4, 5 MacKenzie v. Castro, No. 3:15-CV-0752-D, 2017 WL 1021299 (N.D. Tex. Mar. 16, 2017) (Fitzwater, J.) .......................................................................................................................5 Martino v. American Airlines, Inc., 404 F. Supp. 1202 (S.D.N.Y. 1975) .......................................5 McFarland v. Allied Pilots Ass’n, No. 3:03-CV-0984-B (N.D. Tex. Sept. 22, 2005) ...............2, 10 Mitchell v. Cont’l Airlines, 481 F.3d 225 (5th Cir. 2007) ...........................................................4, 5 O’Neill v. Air Line Pilots Ass’n, Int’l, 886 F.2d 1438 (5th Cir. 1989) ..........................................12 Ramming v. United States, 281 F.3d 158 (5th Cir. 2001) ................................................................5 Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 3 of 19 PageID 1488 iii Travelers Lloyds Ins. Co. v. All-Glass Aquarium Co., No. 3:12-CV-3635, 2014 WL 222356 (N.D. Tex. Jan. 17, 2014)...............................................................................................6, 13 Vore v. Colonial Manor Nursing Ctr., No. 3-03-CV-1660-BD(P), 2004 WL 2348229 (N.D. Tex. Oct. 19, 2004) ....................................................................................................8 Statutes 45 U.S.C. § 153(q) ...........................................................................................................................5 Rules Fed. R. Civ. P. 56(e)(2) ....................................................................................................................3 Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 4 of 19 PageID 1489 1 Defendant Allied Pilots Association (APA) respectfully submits its Reply Brief in further support of its Cross-Motion to Dismiss or, in the Alternative, for Summary Judgment (Doc. 50) and brief in support (Doc. 51), and in response to pertinent portions of Plaintiffs’ Reply Brief in Support of Their Motions for Partial Summary Judgment and for Preliminary Injunction, and Their Opposition to Defendants’ Motions to Dismiss (Doc. 57) (Opposition or Opp.). As demonstrated below, the Opposition does nothing to counter APA’s showing that dismissal or, in the alternative, summary judgment in APA’s favor is warranted. INTRODUCTION Plaintiffs’ entire brief is premised on the notion that they can ignore some or all of the following undisputed material facts: 1. The dispute at issue in the Supplement C grievances before Arbitrator Bloch was whether the trigger to end the protective fence had been met under the language of Supplement C—i.e., a dispute over the interpretation of Supplement C. See APA Br. in Supp. of Omnibus Resp. & Cross. Mot. to Dismiss or, in the Alternative, for Summ. J. (APA Cross Mot.) at 7. 2. Supplement C was devised by a panel of three neutral arbitrators pursuant to the Letter of Agreement (LOA) 12-05 interest arbitration—not as a result of contract negotiations between APA and American. See id. at 5. 3. Three legacy American pilots grieved American’s failure to drop the protective fence as a violation of Supplement C. See id. at 7. Those legacy American pilots waived all pre- arbitral steps in the grievance process. See id. at 7, 9. 4. The legacy American pilot grievants had to wait months before their grievances were arbitrated. See id. at 7 (grievances filed in September 2016, October 2016, and January 2017), 11 (arbitration held in March 2017). Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 5 of 19 PageID 1490 2 5. Belatedly, four months after the first legacy American pilot grievance, Plaintiff Bounds filed his own grievance. See id. at 7. Captain (CA) Bounds, too, waived all pre-arbitral steps. See id. at 7, 9 & n.5. 6. Rather than ignore or downgrade CA Bounds’s belated grievance, APA made sure he could participate fully in the arbitration, including by providing funding for him to retain counsel. See id. at 11. 7. Although given an opportunity to participate in the arbitration, Plaintiffs Horner, Krakowski, and Tersteeg decided not to do so. See id. at 10. 8. APA and American had agreed in Supplement C that any disputes regarding the language or implementation of Supplement C were to be adjudicated before a System Board with Arbitrator Bloch as the neutral. See APA Cross Mot. at 6, citing P. App. 30, Section J.1. 9. APA and American had agreed in LOA 12-05 that a single arbitrator, Richard Bloch, “shall have continuing jurisdiction to resolve disputes over the implementation and interpretation of the decision by the [LOA 12-05 arbitrators’] panel”—i.e., over the implementation and interpretation of the decision that ultimately became Supplement C. See id. at 4, quoting P. App. 73 and APA App. 43 (LOA 12-05 at 2). 10. APA and American have a history and practice of providing for arbitrations before a single neutral arbitrator for grievances filed by former TWA pilots over the terms of Supplement CC, the contractual predecessor to Supplement C—i.e., precisely the approach favored by former TWA pilots in McFarland v. Allied Pilots Ass’n, No. 3:03-CV-0984-B (N.D. Tex. Sept. 22, 2005), cited in Opp. at 5–6, 12, 20–21, 29. See APA Cross Mot. at 9–10. Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 6 of 19 PageID 1491 3 11. CA Bounds had the opportunity to present his arguments challenging Arbitrator Bloch’s jurisdiction—twice—and Arbitrator Bloch rejected them twice based on his interpretation of the CBA and APA and American’s past practice. See id. at 11, 13. 12. CA Bounds had a full opportunity to argue the merits of the dispute and present to Arbitrator Bloch all of the evidence regarding APA and American’s alleged intent and interpretation of Supplement C to which Plaintiffs refer in their Second Amended Complaint and Opposition. See id. at 11–13. 13. Just as CA Bounds’s attorney had argued, see APA App. 88 (Supplement C Hr’g Tr. at 58), Arbitrator Bloch found that evidence regarding APA and American’s alleged intent with respect to Supplement C was unpersuasive, because the question at issue was the LOA 12- 05 arbitrators’ intent, not that of APA and American. See id. at 13; P. App. 79 (“Critically important to resolution of the question at issue are the structure and contents of the operative negotiated agreements, as interpreted by the LOA 12-05 Arbitration Panel.” (emphasis added)); P. App. 84 (relying on what the LOA 12-05 Board “explicitly anticipated and accommodated”). 14. In ruling on the merits of the grievances, Arbitrator Bloch relied on the plain language of Supplement C, which the LOA 12-05 arbitrators had approved, stating that the fence would fall when pilot Magnus Alehult has sufficient seniority to bid on “any aircraft.” APA Cross Mot. at 5, 13; P. App. 28 (Section E.4); P. App. 84 (finding that “any aircraft” includes Group I aircraft). Plaintiffs’ failure to properly address—or address at all—these material facts established in APA’s Cross-Motion deems them admitted and undisputed for the purpose of a summary judgment motion. See Fed. R. Civ. P. 56(e)(2); Beard v. Banks, 548 U.S. 521, 527 (2006) (since plaintiff failed to challenge the facts in the defendant’s statement of undisputed facts on Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 7 of 19 PageID 1492 4 summary judgment, the facts were deemed admitted); Opp. at 1, citing Henson v. Geithner, No. 3:11-CV-1892-D, 2013 U.S. Dist. LEXIS 1301, at *4 (N.D. Tex. Jan. 4, 2013).1 Based on the undisputed material facts set forth above and in APA’s Cross-Motion, the Court should dismiss or, in the alternative, grant summary judgment to APA with respect to Plaintiffs’ Second Amended Complaint (SAC) (Doc. 35). ARGUMENT I. PLAINTIFFS FAIL TO STATE A PLAUSIBLE CLAIM TO VACATE THE ARBITRAL AWARD. A. The Fifth Circuit has foreclosed Plaintiffs’ claim that they have standing. APA established that under Fifth Circuit precedent, Plaintiffs lack standing to seek judicial review of the arbitral award. See APA Cross Mot. at 22–23, citing Mitchell v. Cont’l Airlines, 481 F.3d 225, 233 (5th Cir. 2007) and Mackenzie v. Air Line Pilots Ass’n, Int’l, 598 F. App’x 223, 224 (5th Cir. 2014). Plaintiffs attempt to distinguish Mitchell and Mackenzie, arguing that the CBA gives individual pilots the right to file and pursue grievances. Opp. at 2–3, citing CBA Section 21.D.2. Yet, Plaintiffs appear to acknowledge, as they must, that under the CBA, only the President of the APA—not an individual grievant—may elect to take a grievance to arbitration. See id. at 3. Indeed, under CBA Section 21.G.5, only the President of the APA—not an individual grievant—has the right to advance a grievance past the appeal hearing. P. App. 47 (“After the appeal provisions of this Section have been exhausted, the President of the 1 The “facts” that Plaintiffs claim APA “admitted” are either not material or legal arguments (as opposed to facts). See Opp. at 1, 2. For example, statements regarding APA and American’s alleged prior intent, see Opp. at 1 #1–3, are immaterial—as Arbitrator Bloch decided—because the issue in the Supplement C grievances was the intent of the LOA 12-05 arbitrators, not APA and American. See APA Cross Mot. at 38–39. Statements regarding purported violations of the CBA and APA’s Constitution and By-laws, see Opp. at 1 # 4–6, are not factual assertions at all but legal arguments that APA has directly refuted. See, e.g., APA Cross Mot. at 26–30 (the Supplement C grievance process complied with the CBA), 29 (the legacy American pilots’ grievances were not “expedited”), 33–34 (modification or amendment of CBA is immaterial). Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 8 of 19 PageID 1493 5 Association shall have the right to appeal … .”); see also, e.g., P. App. 52 (APA and American select the arbitrators under Section 23.C). Thus, Mitchell and Mackenzie control.2 Plaintiffs next argue that 45 U.S.C. § 153(q) of the RLA “confers standing to Plaintiffs,” Opp. at 3–4, but the Fifth Circuit has already rejected that same argument. See Mackenzie, 598 F. App’x at 226 n.4. Plaintiffs’ cited authorities, see Opp. at 4, cannot overcome Fifth Circuit precedent that is directly on point and, in any case, do not save Plaintiffs’ claim because none of them specifically addressed the issue of whether aggrieved employees had standing to challenge arbitral awards.3 Plaintiffs also cannot overcome APA’s showing that their allegations failed to satisfy the redressability element of Article III standing. See APA Cross Mot. at 23. They protest that “it is not appropriate to assume that APA’s wild speculation [that the result of the Supplement C grievances would be the same if Plaintiffs received their requested relief] would come true.” Opp. at 5. But it is Plaintiffs, not APA, who “constantly bear[] the burden” of proving jurisdiction. MacKenzie v. Castro, No. 3:15-CV-0752-D, 2017 WL 1021299, at *3 (N.D. Tex. Mar. 16, 2017) (Fitzwater, J.), quoting Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (per curiam). Plaintiffs’ conjecture that “we might very well find” that forcing Defendants 2 Plaintiffs’ casual suggestion that other former TWA pilots, such as Plaintiffs Horner, Krakowski, and Tersteeg, who did not even participate in the arbitration, could challenge the arbitral award, see Opp. at 3, likewise directly contradicts the Fifth Circuit’s holding in Mitchell, 481 F.3d at 232, cited in APA Cross Mot. at 23 n.7. 3 Hall v. Eastern Air Lines, Inc. predated Mitchell and Mackenzie and did not address the issue of whether the employee had standing to seek vacatur of an arbitral award. 511 F.2d 663 (5th Cir. 1975). Martino v. American Airlines, Inc. merely found that the court had jurisdiction to review awards of an airline adjustment board; it did not address employee standing. 404 F. Supp. 1202, 1203–04 (S.D.N.Y. 1975). Henry v. Delta Air Lines applied the narrow scope of judicial review under 45 U.S.C. § 153(q) to reject an employee’s challenge to the award, but again did not address employee standing. 759 F.2d 870, 872 (11th Cir. 1985). And Chernak v. Southwest Airlines Co. actually affirmed the lower court’s refusal to review an arbitral award. 778 F.2d 578 (10th Cir. 1985). Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 9 of 19 PageID 1494 6 to go through all the pre-arbitral steps will redress their injuries, see Opp. at 5, does not satisfy their burden. See id.; Travelers Lloyds Ins. Co. v. All-Glass Aquarium Co., No. 3:12-CV-3635, 2014 WL 222356, at *3 (N.D. Tex. Jan. 17, 2014) (“Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence.”). Indeed, Plaintiffs cite no provision of the CBA (or any other authority) requiring Defendants—or any representatives appointed by Defendants to a System Board—to take a position on the Supplement C grievances, and do not (and cannot) dispute that Arbitrator Bloch would be the neutral in any System Board. In short, Plaintiffs cannot establish that the outcome would be any different if more process had been provided, thereby failing the redressability requirement for standing.4 B. There was an arbitrable RLA dispute between legacy American pilot grievants and American. Plaintiffs continue to confuse the substance of the dispute at issue with the manner in which two positions—for and against the view that the Supplement C fence had fallen—were presented at the arbitration. Indeed, Plaintiffs’ fixation on American’s failure to “defend its actions,” Opp. at 9, entirely ignores American’s actions themselves. Plaintiffs do not—and cannot—dispute that (1) American failed to drop the Supplement C fence, (2) three legacy American pilots filed grievances contending that American breached the CBA by failing to drop the fence, and (3) Arbitrator Bloch expressly found that American breached the CBA by not dropping the fence. See APA Cross Mot. at 6–7, 13, 24. These undisputed facts establish that there was an RLA dispute between the three legacy American pilots and American. See id. at 24– 25. 4 Notably, it is undisputed that CA Bounds waived the preliminary pre-arbitral steps that he now purports to seek as relief in this lawsuit. See APA Cross Mot. at 9 & n.5. He cannot now undo that waiver after specifically requesting that his grievance be consolidated with and given “equal footing” as the three legacy American pilot grievants. See id. at 7, citing P. App. 41. Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 10 of 19 PageID 1495 7 Moreover, Plaintiffs fail to counter APA’s demonstration that nothing in the CBA requires APA and American to take positions during the grievance process or at the arbitration. See APA Cross Mot. at 25. Although Plaintiffs point to language in the CBA requiring parties to “state their respective positions,” Opp. at 9, citing CBA Section 23.F, nothing in that language— or elsewhere in the CBA—prohibits the parties from stating that their positions are neutral. APA set forth APA’s and American’s respective neutral positions in its position statement to Arbitrator Bloch, which was “agreed by the parties.” P. App. 58–59.5 Plaintiffs’ refrain that APA’s evidence regarding American’s intent to remain neutral is “hearsay,” see, e.g., Opp. at 28, flies in the face of their own allegations and summary judgment evidence. See SAC ¶ 46; P. App. 8 ¶ 26; P. App. 65 (statement of American’s counsel that “American took a position only on jurisdiction in this case, not on the merits of the dispute”).6 Finally, the Court should reject Plaintiffs’ notion that Defendants were not “parties” to the arbitration. Opp. at 8–9. Arbitration is a creature of contract, and it is APA and American— not the Supplement C grievants—who agreed, as parties to the CBA, to arbitrate disputes. P. App. 52 (Section 23.A) (“[T]he parties establish the [System Board] for the purpose of adjusting and deciding disputes which may arise under the terms of this [CBA].”). Under CBA Section 23.B, APA and American—not individual grievants—appoint members and select arbitrators for the System Board, schedule the arbitrations, and submit the dispute to the System Board. P. App. 52–54 (Sections 23.B, 23.C, 23.D, and 23.F). In the case of a deadlock in a case before a four- 5 Under the CBA, American had the opportunity to file a separate submission to correct misstatements, if any, in APA’s submission to the arbitrator, but it did not do so. P. App. 54 (Section 23.F). 6 Plaintiffs fall back again on Cont’l Airlines, Inc. v. E. Pilots Merger Comm., Inc. (In re Cont’l Airlines, Inc.), 484 F.3d 173 (3d Cir. 2007), see Opp. at 9–10, and represent—falsely— that APA “does not mention” the case in its brief. Id. at 10 n.2. Apparently, they only selectively read APA’s brief, which explained in detail why In re Cont’l Airlines is not on point. APA Cross Mot. at 25–26. Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 11 of 19 PageID 1496 8 member System Board, “the grieving party (the [APA] or the Company)” has the right to appeal to the five-member System Board. P. App. 55 (Section 23.L). Decisions of the System Board are “final and binding upon the parties”—i.e., APA and American. P. App. 55 (Section 23.H). And APA and American, as the parties, share the expenses incurred by the arbitration. P. App. 55 (Section 23.L). In short, just as Arbitrator Bloch explained in denying grievant FO Csoros’s post- hearing request for clarification, “nothing in the AA/APA labor agreement confers ‘Party’ status on employees, as distinguished from CBA’s signatories.” See APA App. 104 (Grievant’s Request for Clarification at 3). Here, as expressly permitted by the CBA, the actual parties to the Supplement C arbitration, APA and American, merely “permit[ted] employees covered by this Agreement to be represented at Board hearings by such person(s) as they may choose and designate” under CBA Section 23.G(1). P. App. 54. In doing so, there can be no question that they did not delegate “party” status to the Supplement C grievants. See APA App. 104–06 (Grievant’s Request for Clarification at 3–5). C. The grievance process complied with the RLA and the CBA. Plaintiffs’ Opposition cannot overcome APA’s showing that the Supplement C grievance process complied with both the RLA and the CBA. See APA Cross Mot. at 26–30. Critically, their brief fails to address—and thus concedes7—APA’s demonstration that where, as here, grievants waive the initial hearing and American indicates it will not change its mind in an appeal hearing (or, alternatively, does not hold a hearing within the time prescribed), the 7 Failure to address an argument in response to a dispositive motion constitutes a concession of the issue. See, e.g., Friou v. Phillips Petroleum Co., 948 F.2d 972, 974 (5th Cir. 1991) (“[The issue] is not discussed in their briefs. A party who inadequately briefs an issue is considered to have abandoned the claim.”); Vore v. Colonial Manor Nursing Ctr., No. 3-03-CV- 1660-BD(P), 2004 WL 2348229, at *2 n.3 (N.D. Tex. Oct. 19, 2004) (failure to address arguments concedes them); Hopkins v. Women's Div., Gen. Bd. of Global Ministries, 284 F. Supp. 2d 15, 25 (D.D.C. 2003), aff'd, 98 F. App’x 8 (D.C. Cir. 2004) (“[W]hen a plaintiff files an opposition to a dispositive motion and addresses only certain arguments raised by the defendant, a court may treat those arguments that the plaintiff failed to address as conceded.”). Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 12 of 19 PageID 1497 9 President of APA has the right under the CBA to move the grievances directly to the System Board. See APA Cross Mot. at 8, 27–28; P. App. 47 (Section 21.G).8 Instead, Plaintiffs remarkably claim that “none of the Supplement C grievants actually waived” the appeal hearing—despite the fact that both their own complaint and APA’s evidence so establish. Compare Opp. at 11, with SAC ¶ 52(A); P. App. 58 (“The four individual grievants agreed to waive all preliminary hearings so that the grievances could be submitted directly to the System Board of Adjustment.”), and APA App. 3 (Hairston Decl. ¶ 10).9 D. The CBA expressly authorized Arbitrator Bloch to arbitrate disputes over Supplement C as a single-member System Board. Plaintiffs argue there is “nothing in the CBA, LOA 12-05, or Supplement C that provides [for] a single-member System Board for disputes over the language of Supplement C.” Opp. at 15. In doing so, they continue to ignore the express language of LOA 12-05, which is part of the CBA. LOA 12-05 states that “Richard Bloch”—i.e., one single neutral arbitrator—“shall have continuing jurisdiction to resolve disputes over the implementation and interpretation” of the LOA 12-05 arbitrators’ decision—i.e., the decision that would ultimately become Supplement C. 8 Plaintiffs insist that their case is not a minor dispute, yet do not challenge—because they cannot—that they raise contractually-based objections to the Supplement C grievance and arbitration process. See APA Cross Mot. at 27 n.10. Nor can Plaintiffs dispute that their claims require interpretation of what the CBA, including the contracting parties’ past history and practice, requires with respect to that process. See id. Because Arbitrator Bloch ruled on Plaintiffs’ contractually-based objections, and that ruling draws its essence from the CBA, that decision is final and binding. See id. at 11, 13, 24, 27 n.10. 9 Without any basis, Plaintiffs challenge the competence of Charles Hairston to attest to the facts in his Declaration. See, e.g., Opp. at 28, 30. But Mr. Hairston’s competence is clear from the face of his Declaration: he was a member of the APA Legal Department, attested to his personal knowledge of the facts, and demonstrated personal knowledge of and involvement in the Supplement C grievance process. See APA App. 1, 3, 6 (Hairston Decl. ¶¶ 1, 2, 10 & Exh. 1). Plaintiffs’ resort to challenging the competency of APA’s evidence only demonstrates how far afield they are forced to go because they are unable to meet APA’s evidence with any of their own. Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 13 of 19 PageID 1498 10 APA App. 43 (LOA 12-05 at 2).10 Given this clear language authorizing a single arbitrator to decide disputes over the language of Supplement C, Plaintiffs’ myopic focus on whether there was a valid “modification” or “amendment” to the CBA, see Opp. at 13–15, and whether there was a “majority vote,” see id. at 19–20, entirely misses the mark. In an attempt to avoid that fact, Plaintiffs completely misread Judge Boyle’s decision in McFarland, cited in Opp. at 5–6, 12. The former TWA pilots in McFarland contended they were entitled to have their case “decided solely by a ‘neutral’ arbitrator”—i.e., by a single-member System Board. Mem. Order at 15, McFarland v. Allied Pilots Ass’n, No. 3:03-CV-0984-B (N.D. Tex. Sept. 22, 2005), Doc. 81.11 As APA pointed out in its Cross Motion, the McFarland Court did not find that a single-member System Board was in any way prohibited under the CBA or the RLA—only that the former TWA pilots did not have a right to demand one from APA and American. See APA Cross Mot. at 34 n.13.12 In response to APA’s showing that proceeding before a single-member System Board merely gave effect to Section 23 of the CBA in light of the parties’ neutrality, see APA Cross Mot. at 32, Plaintiffs assert that company- and union-appointed members of a System Board “may not abstain” at Defendants’ direction. See Opp. at 30. Yet, the very CBA provision on 10 Plaintiffs state that LOA 12-05 “called for a panel of three neutral arbitrators,” Opp. at 29, but that was for the LOA 12-05 arbitration itself—not for disputes arising from implementation and interpretation of the decision that would become Supplement C. See APA App. 42–43. 11 It is certainly ironic that Plaintiffs, purporting to act on behalf of former TWA pilots, now excoriate APA for acceding to the former TWA pilots’ request for arbitration before a single neutral arbitrator. 12 Plaintiffs also cite McFarland in an attempt to counter APA’s showing that Defendants have a history and practice of providing for arbitrations before a single-member System Board for grievances filed by former TWA pilots over the contractual predecessor to Supplement C. See Opp. at 12 n.6. That attempt fails, as Plaintiffs neither dispute nor even address APA’s summary judgment evidence regarding APA and American’s past practice after the McFarland decision, which issued in 2005. See APA App. 30 (Hoffman Decl. ¶¶ 5, 8) (discussing agreements to arbitrate before single-member System Boards in 2006 and 2007). Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 14 of 19 PageID 1499 11 which they rely, Section 23.N, states that Board members are free to vote as they see fit—and it does not prohibit abstentions. See Opp. at 30, citing P. App. 56 (CBA Section 23.N). APA and American have the right under CBA Section 23.B to select and appoint members to the System Board, see P. App. 52, and no doubt would have selected members who would abstain, consistent with the neutrality espoused by the parties.13 II. PLAINTIFFS FAIL TO STATE A CLAIM FOR BREACH OF THE DFR, OR, ALTERNATIVELY, APA IS ENTITLED TO SUMMARY JUDGMENT ON THAT CLAIM. A. None of APA’s actions were arbitrary, discriminatory, or in bad faith. Perhaps recognizing that they have no case under the governing legal standards to attack the arbitral decision directly, Plaintiffs cite pre-Iqbal cases to create a standard more conducive to them in a duty of fair representation (DFR) case. See Opp. at 22. Applying the correct legal standard, however, see APA’s Cross Mot. at 15–16 and 20–22 (discussing legal standards), it is clear that Plaintiffs have failed to plausibly allege a claim for breach of DFR or, in the alternative, that APA is entitled to summary judgment on the claim. Plaintiffs accuse APA of “abject bad faith” and argue that had APA “simply honored” its prior “agreement,” “there would have been no arbitration with Bloch.” Opp. at 24.14 This argument reveals that Plaintiffs’ professed concern with going through each preliminary pre- 13 Plaintiffs conveniently ignore that APA and American had a past practice of arbitrating before a single neutral arbitrator for grievances filed by former TWA pilots concerning Supplement C’s contractual predecessor specifically in order to preclude the potential of prejudice to former TWA pilots. See APA Cross Mot. at 9–10, citing APA App. 3, 29–31 (Hairston Decl. ¶ 8; Hoffman Decl. ¶¶ 3–10). If APA had appointed members to a larger System Board who voted with American appointees against CA Bounds and in favor of the legacy American pilots, Plaintiffs no doubt still would have sued. APA proceeded as it did precisely to avoid that result. 14 Yet again, the “agreement” Plaintiffs reference—the putative “agreement” between APA and American on the intent of Supplement C with respect to the fence provision—is irrelevant, as Arbitrator Bloch found, because the only intent that mattered was that of the LOA 12-05 arbitrators, who devised Supplement C. See APA Cross Mot. at 38–39. Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 15 of 19 PageID 1500 12 arbitral step and proceeding before a four- or five-member System Board is just a smokescreen. Plaintiffs’ real complaint is that APA should have exercised its discretion differently—that it should not have permitted the legacy American pilots’ grievances to be arbitrated at all, but rather treated them as denied and final. See id.; id. at 28–29 (speculating that it “may very well have been” that APA, “in the proper exercise of its discretion” elected not to process the grievances any further). However, a union has a “statutory obligation to serve the interests of all members without hostility or discrimination toward any.” O’Neill v. Air Line Pilots Ass’n, Int’l, 886 F.2d 1438, 1443 (5th Cir. 1989) (emphasis added; quotation marks omitted), cited in Opp. at 26–27. Notably, Plaintiffs have no response to the argument—and thus concede—that “APA necessarily was required to balance the interests” of the former TWA pilots and “all the other pilots that the APA represents.” Krakowski I, Case No. 11-15463 (SHL), Adv. Proc. No. 13-01283 (SHL), 2014 WL 2508729, at *4 (Bankr. S.D.N.Y. June 3, 2014), cited in APA Cross Mot. at 36. Ignoring the legacy American pilot grievants and denying them arbitration cannot be squared with APA’s duty of fair representation, which indisputably extends to all of its member pilots—not just the former TWA pilots. See APA Cross Mot. at 36–38. Plaintiffs’ attempt to distinguish the authorities cited in APA’s Cross-Motion at 36–38 on the basis that “[t]he Supplement C grievances were not brought to create a seniority list,” Opp. at 27, is a distinction without a difference. It is indisputable that, as in seniority integrations, the dispute over whether American maintains or drops the fence squarely fits the definition of a “zero sum” game situation: any gains on the part of the former TWA pilot group come at the expense of the legacy American pilot group, and vice versa. Given the “zero sum” nature of the dispute, referring the Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 16 of 19 PageID 1501 13 dispute to a neutral arbitrator was fair, impartial, and consistent with legitimate union objectives. See APA Cross Mot. at 36–38. Although Plaintiffs apparently feel it was not “reasonable” for APA to accommodate CA Bounds’ belatedly filed grievance, and set up and fund an arbitration in which CA Bounds and the legacy American pilots could each advocate their respective positions to a neutral arbitrator, see Opp. at 27 (arguing APA’s neutrality was not “reasonable”), that is—once again—the wrong legal standard. Plaintiffs must plausibly allege that APA’s conduct was “so far outside a ‘wide range of reasonableness’ … that [they are] wholly ‘irrational’ or ‘arbitrary.’” See APA Cross Mot. at 20, citing Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65, 78 (1991). They do not even come close to doing so.15 And APA ‘s decision to ensure CA Bounds’s full participation in a process initiated four months before he chose to file his grievance cannot as a matter of law be deemed “irrational”—or, in fact, in any way “unreasonable.”16 B. Plaintiffs have not plausibly established DFR causation. Plaintiffs’ glib retort that “[o]f course there is causation,” Opp. at 28, does not satisfy their burden to plausibly plead that they would not have been injured but for APA’s actions or omissions. See APA Cross Mot. at 21–22 (discussing legal standard). Plaintiffs’ assertion that “Bloch would have been hard-pressed to rule against APA if it advocated for the protections as agreed” is mere unsupported speculation and therefore insufficient to forestall dismissal or summary judgment. See Travelers, 2014 WL 222356, at *3. 15 Their citation to cases regarding failure to enforce collective bargaining agreements, see Opp. at 25, are inapposite in light of APA’s compliance with the CBA. See supra at 8–11; APA Cross Mot. at 26–35. Likewise, Plaintiffs’ arguments that APA violated the C&B by modifying the CBA’s grievance procedures, see Opp. at 25–26, ignore that the Supplement C grievance process complied with the CBA. See APA Cross Mot. at 26–35. 16 Indeed, it would not have been “irrational” for APA to choose not to pursue CA Bounds’s belated grievance at all. But in order to give this former TWA pilot a chance to make his case in any way he chose to do so—and at APA’s expense—APA did not follow that course. Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 17 of 19 PageID 1502 14 Critically, Plaintiffs make no attempt to counter—and thus concede—the fact that Supplement C was not the result of contract negotiations, and thus the merits in the Supplement C arbitration turned not on the intent of American or APA, but rather on the intent of the LOA 12-05 interest arbitrators. See APA Cross Mot. at 38. Nor do they dispute that CA Bounds presented to the arbitrator all the evidence Plaintiffs now point to regarding APA’s purported prior “intent” or “agreement”—and that Arbitrator Bloch ruled against Plaintiffs’ position anyway, relying on the plain language of Supplement C. See id. at 39. This concession dooms Plaintiffs’ claim under the DFR causation standard. See id. at 21–22 (discussing legal standard). CONCLUSION For the reasons stated above, and in APA’s Brief in Support of Omnibus Response and Cross-Motion to Dismiss or, in the Alternative, for Summary Judgment (Doc. 51), the Court should dismiss or, in the alternative, grant summary judgment in favor of APA on all claims in Plaintiffs’ Second Amended Complaint. Date: September 15, 2017 Respectfully submitted, s/Sanford R. Denison SANFORD R. DENISON TX Bar No. 05655560 Baab & Denison, LLP 6301 Gaston Avenue, Suite 550 Dallas, TX 75214 Tel.: (214) 637-0750 Fax: (214) 637-0730 Email: denison@baabdenison.com STEVEN K. HOFFMAN* D.C. Bar No. 384696 DANIEL M. ROSENTHAL* D.C. Bar No. 1010473 James & Hoffman, P.C. Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 18 of 19 PageID 1503 15 1130 Connecticut Avenue, NW, Suite 950 Washington, DC 20036 Tel.: (202) 496-0500 Fax: (202) 496-0555 Email: skhoffman@jamhoff.com dmrosenthal@jamhoff.com Counsel for Defendant Allied Pilots Association *Admitted Pro Hac Vice CERTIFICATE OF SERVICE The undersigned certifies that on September 15, 2017, a copy of the foregoing was filed with the Court via ECF and served on all parties of record via the Court’s ECF system. s/Sanford R. Denison SANFORD R. DENISON Case 3:17-cv-00665-D Document 59 Filed 09/15/17 Page 19 of 19 PageID 1504