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Beckington v. American Airlines Inc.

United States District Court, D. Arizona

March 20, 2018

Bruce Beckington, et al., Plaintiffs,
v.
American Airlines Incorporated, Defendant.

          ORDER

          Honorable John J. Tuchi United States District Judge

         At issue is Defendant American Airlines, Inc.'s Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc. 18, MTD), to which Plaintiffs filed a Response (Doc. 26, Resp.), and American filed a Reply (Doc. 28, Reply). The Court heard oral argument on the Motion on June 30, 2017. (Doc. 36, Tr.)

         I. BACKGROUND

         In the First Amended Complaint (Doc. 17, FAC), the operative pleading, Plaintiffs Bruce Beckington, John Jurik, and James Van Sickle allege the following facts.[1] In 2005, America West Airlines and U.S. Airways merged into an airline also called U.S. Airways. The two merged airlines set forth their reorganization plan in a Transition Agreement, which among many things provided that the pre-merger America West pilots (“West Pilots”), of which Plaintiffs are three, and the pre-merger U.S. Airways pilots (“East Pilots”) would create a single integrated seniority list that U.S. Airways would implement after a single Collective Bargaining Agreement (“CBA”)-or “Single Agreement”-was negotiated between the pilots' union and the airline.

         Two years after the merger, the West and East Pilots-both represented by their union at the time, the Air Line Pilots Association (“ALPA”)-entered into binding arbitration pursuant to an ALPA Merger Policy, which resulted in a May 2007 award, called the Nicolau Award, that established an integrated seniority list, called the Nicolau List. The West Pilots claim that U.S. Airways formally accepted the Nicolau Award in late 2007, but no Single Agreement was in place.

         Apparently unhappy with the Nicolau List, the East Pilots formed a new union, the U.S. Airline Pilots Association (“USAPA”), and used their numerical superiority to replace ALPA as the certified collective bargaining representative of both groups of pilots as of April 18, 2008. USAPA took the position that the Nicolau Award was binding only on ALPA, not USAPA. As a result, in the collective bargaining negotiations, USAPA proposed another integrated seniority list that was more favorable to the East Pilots.

         On September 4, 2008, six West Pilots filed the first of three prior, related lawsuits in this District. (Addington v. USAPA, No. CV-08-1633-PHX-NVW (“Addington I”).) In that action, the West Pilots raised claims under the Railway Labor Act, 45 U.S.C. § 151, et seq. (“RLA”), against USAPA for breach of the duty of fair representation (“DFR”) and against U.S. Airways for failure to negotiate in good faith. The West Pilots sought injunctive relief that included requiring USAPA and U.S. Airways to implement the Nicolau List in the CBA. At the end of a ten-day trial, a jury concluded that USAPA breached the DFR because its sole reason for proposing an integrated seniority list different from the Nicolau List was to benefit the East Pilots rather than the union of pilots as a whole. District Judge Wake entered a permanent injunction against USAPA to the effect of requiring it to advocate for the implementation of the Nicolau Award and to refrain from advocating for separate CBAs for the East and West Pilots. (Addington I, Doc. 593 at 46.)

         On June 4, 2010, the Ninth Circuit vacated the District Court's judgment because it concluded the dispute was not ripe on account of the uncertainty as to whether a single CBA incorporating the Nicolau Award would be ratified by USAPA's membership and approved by the airline, and thus as to the appropriate remedy for the West Pilots' alleged harm. Addington v. USAPA, 606 F.3d 1174, 1179-81 (9th Cir. 2010). That court commented, “By deferring judicial intervention, we leave USAPA to bargain in good faith pursuant to its DFR, with the interests of all members-both East and West-in mind, under pain of an unquestionably ripe DFR suit, once a contract is ratified.” Id. at 1180 n.1.

         On July 27, 2010, U.S. Airways filed the second related lawsuit in this District, a declaratory judgment action as to whether it would be liable under the Transition Agreement if it entered into a CBA with USAPA that did not require use of the Nicolau Award. (US Airways v. Addington & USAPA, No. CV-10-1570-PHX-ROS (“Addington II”).) On October 11, 2012, in granting USAPA partial summary judgment and dismissing the remaining claims, District Judge Silver stated as follows:

Pursuant to the Ninth Circuit's decision [upon its review of Addington I], any claim for breach of the duty of fair representation will not be ripe until a collective bargaining agreement is finalized. In this case, that means even though an integrated seniority regime is an incredibly important issue, and USAPA appears totally committed to a particular seniority regime, it is not possible to determine the viability of any claim for breach of the duty of fair representation until a particular seniority regime is ratified. When the collective bargaining agreement is finalized, individuals will be able to determine whether USAPA's abandonment of the Nicolau Award was permissible, i.e. supported by a legitimate purpose. Thus, the best “declaratory judgment” the Court can offer is that USAPA's seniority proposal does not automatically breach its duty of fair representation.

(Addington II, Doc. 193 at 7-8.) As for U.S. Airways, Judge Silver stated that “it need not insist on any particular seniority regime” but “must evaluate any proposal by USAPA with some care to ensure that it is reasonable and supported by a legitimate union purpose.” (Addington II, Doc. 193 at 1-2.)

         Meanwhile, U.S. Airways and American Airlines began negotiating a potential merger in early 2012, while American was engaged in a Chapter 11 bankruptcy reorganization. At that time, U.S. Airways continued to operate with two pilot CBAs and two pilot seniority lists because a single CBA still had not been successfully negotiated between U.S. Airways and USAPA and thus no single integrated seniority list-including the Nicolau List-had been implemented. In mid-December 2012, representatives of and attorneys for U.S. Airways, American, USAPA and the Allied Pilots Association (“APA”)-the union representing the American Airlines pilots-met to develop a Memorandum of Understanding (“MOU”) with the purpose of providing a process for reaching a Merger Transition Agreement and a Joint Collective Bargaining Agreement (“JCBA”). Paragraph 10.h of the MOU ultimately contained the following provision: “US Airways agrees that neither this Memorandum nor the JCBA shall provide a basis for changing the seniority lists currently in effect at U.S. Airways other than through the process set forth in this Paragraph 10.” (Doc. 19-1 at 6-24, MOU.)

         The West Pilots claim that, “[b]ut for the language that became paragraph 10.h, the MOU/CBA would have provided a basis for using the Nicolau List whenever pilot operations at U.S. Airways would be integrated, as required by the 2005 Transition Agreement.” (FAC ¶ 53.) Thus, the West Pilots contend, the purpose of Paragraph 10.h “was to avoid the obligation to use the Nicolau List to integrate pilot operations.” (FAC ¶ 54.) The West Pilots further claim that, by agreeing to the language of Paragraph 10.h with the knowledge that USAPA had no legitimate union purpose for including that language, U.S. Airways-now American-improperly colluded with USAPA. (FAC ¶ 56.)

         The “legacy U.S. Airways pilots” ratified the MOU on February 8, 2013, making it a CBA. U.S. Airways and ...


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