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MILLER v. AMERICAN AIRLINES

September 28, 2004.

LOUIS MILLER and RICHARD J. ROYALS, Plaintiffs,
v.
AMERICAN AIRLINES, INC. Defendant.



The opinion of the court was delivered by: SIDNEY SCHENKIER, Magistrate Judge

MEMORANDUM OPINION AND ORDER*fn1

The defendant, American Airlines, Inc. ("American"), has filed a motion to dismiss, pursuant to Federal Rule of Civil Procedure ("Rule) 12(b)(1) and (b)(6), or in the alternative, for summary judgment pursuant to Rule 56. American's motion seeks dismissal of a two-count complaint filed by the plaintiffs, Louis W. Miller and Richard J. Royals, who each allege violations of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et. seq.

The threshold issue presented by American's motion involves a question of preclusion under the Railway Labor Act, 45 U.S.C. § 151 et seq. ("RLA"), that challenges the Court's subject matter jurisdiction. As we explain below, we conclude that this case presents a question of interpretation of a collective bargaining agreement ("CBA") that falls within the exclusive jurisdiction of the arbitral process created by the RLA. But, rather than dismissing this case, as requested by American, we follow the Seventh Circuit's instruction in Tice v. American Airlines, Inc., 288 F.3d 313, 318-19 (7th Cir. 2002), and stay the case pending resolution, through arbitration, of the CBA interpretation issues involved in this case. Accordingly, American's motion to dismiss pursuant to Rule 12(b)(1) is denied without prejudice (doc.# 14-1), and American's alternative motions, to dismiss under Rule 12(b)(6) for failure to state a claim (doc.# 14-2) and for summary judgment under Rule 56 (doc.# 14-3), are denied as moot.

  I.

  American's motion raises the threshold procedural issue of whether the motion should be dismissed pursuant to Rule 12(b)(1), 12(b)(6) or Rule 56. As indicated, a related issue (not raised by the parties) is also embedded in this motion, namely, whether the case should be stayed, rather than dismissed, upon a finding that the RLA precludes this Court from adjudicating questions of interpretation of the CBA that underlie plaintiffs' ADEA claims. As we indicated above, and for reasons we explain in more detail below, we conclude that the case should be stayed rather than dismissed, pursuant to Tice. However, whether the result of RLA preclusion is the dismissal or stay of the case, the question presented by American's motion implicates the Court's subject matter jurisdiction. Therefore, we treat American's motion as one under Rule 12(b)(1) and, as a result, we "may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists." Id. (quoting Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir. 1979)).

  We hasten to note that in doing so, we do not transform the Rule 12(b)(1) motion into one for summary judgment under Rule 56. Unlike Rule 12(b)(6) motions, Rule 12(b)(1) motions for lack of subject matter jurisdiction are not transformed into Rule 56 motions for summary judgment simply because matters outside the pleadings are presented or considered. "Indisputably, a district court can transform a motion for dismissal under Federal Rule 12(b)(6) into one for summary judgment when "matters outside the pleadings are presented to and not excluded by the court. . . ." Fed.R.Civ.P. 12(b). But, "the Federal Rules of Civil Procedure contain no analogous recognition that a 12(b)(1) motion can evolve into dismissal pursuant to Rule 56." Crawford v. United States, 796 F.2d 924, 928 (7th Cir. 1986) ("The omission from the Federal Rules of Civil Procedure of a provision for converting a Rule 12(b)(1) motion into a summary judgment motion if evidence is submitted with it was not an oversight."). "Whereas a grant of summary judgment is a decision on the merits, . . . a court must dismiss the case without ever reaching the merits if it concludes that it has no jurisdiction. In short, the question of jurisdiction is inappropriate for summary judgment, and discussing the interplay of Rule 12(b)(1) and Rule 56 verges on non sequitur." Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1999) (citations omitted).

  With these procedural considerations in mind, we consider the undisputed evidence submitted by the parties insofar as it is relevant to determine the Court's subject matter jurisdiction.

  II.

  The plaintiffs previously worked as Flight Engineers ("FEs") for American Airlines (American's Local Rule 56.1 Statement of Undisputed Material Facts ¶ 1, hereinafter "SMF ____"). American hired Mr. Miller in 1955 and Mr. Royals in 1952 (SMF ¶ 2). As FEs, the plaintiffs were unionized employees represented by the Flight Engineers' International Association (the "FEIA") (SMF ¶ 3). Throughout American's history, FEs have worked only in the third-seat of the aircraft (SMF ¶ 5). In the 1940's, prior to the introduction of commercial jet aircraft, American utilized FEs to serve in the third seat of its propeller-driven aircraft and FEs were not required to be pilots (SMF ¶ 6). Most FEs came from mechanical or maintenance backgrounds. Id. In 1958, President Eisenhower appointed a Presidential Fact Finding Board and in July 1958, that Board recommended that third-seat crew members on turbo jet aircraft become pilot-qualified (SMF ¶ 7). American then began to hire pilots, as opposed to FEs, for that third seat (Am. Mem. at 2).

  As a result, in the early 1960s, a jurisdictional dispute ensued between the Allied Pilots Association (the "APA") and the FEIA. American, the APA and the FEIA finally resolved this dispute by entering into a "Tripartite Agreement," executed on December 11, 1964. The parties described it as "a permanent resolution of a long-standing problem" (SMF ¶ 8). That Agreement recognized FEIA as the exclusive bargaining representative of the existing FEs. Id. Thereunder, existing FEs, including plaintiffs, were grandfathered in and allowed to serve out their careers as "professional" FEs (SMF ¶ 9).

  Given the creation of professional FEs, American, the APA and the FEIA negotiated a supplement to the Tripartite Agreement. Enacted on August 12, 1983, Supplement U provides:
In the event a surplus of flight engineers exists, each flight engineer so affected, who is qualified or trainable, will be guaranteed placement within the Company in a position not covered by the FEIA Collective Bargaining Agreement. If not qualified, such employee shall be afforded training to enable satisfactory performance in the job in which placed. Such flight engineer must perform the duties in accordance with his new work assignments and schedules as required by the job in which he is placed.
At the time of placement, the employee's monthly salary will be fixed based on the average of his earnings for the previous twelve (12) months as a flight engineer. If the employee's average monthly earnings as a flight engineer exceed the total monthly compensation actually earned in his new job, the employee will be paid such flight engineer's guaranteed monthly earnings. Such guarantee will be in effect until his normal flight engineer retirement date and, thereafter, his salary will be governed by the compensation plan applicable to the new position.
(SMF ¶¶ 10-11). Supplement U ensured that if three-seat aircraft were eliminated, FEs would continue to receive the same rate of pay (in whatever alternate job they held) until they reached the "normal flight engineer retirement date,"*fn2 which would have the effect of permitting their pension payments to be based on the highest Final Average Compensation possible (SMF ¶ 13).*fn3

  In May 2002, American grounded the last remaining three-seat craft. Plaintiffs and one other FE were the only remaining FEs employed at that time, and both plaintiffs had reached Normal Retirement Age and were vested in their Pension (SMF ¶ 17). After plaintiffs' jobs had been eliminated, American offered them alternate positions as Staff Assistants (SMF ¶ 18). American interpreted Supplement U as meaning that these positions would be "governed by the compensation plan applicable to the new position," since the plaintiffs already had reached normal retirement age (SMF ¶ 19). Plaintiffs assert that the wage offered was $13.25 per hour (Pls.' Resp. at 2). Plaintiffs declined these positions and, instead, elected to receive a payout under the Pension Plan: Mr. Miller received $649,363.21, and Mr. Royals received $983,923.24 (SMF ¶ 21).

  The plaintiffs then filed EEOC charges alleging age discrimination (SMF ¶ 22). In their charges, plaintiffs alleged that the Tripartite Agreement guaranteed them another position of comparable salary when their positions were eliminated. Specifically, each plaintiff alleged as follows: "I was not offered a position with a comparable salary as required by the Tripartite Agreement." Id. (emphasis added). American denied plaintiffs' ADEA claims, and argued in its responses to the charges that such a dispute was "preempted" by the RLA because it required an interpretation of the Tripartite Agreement (SMF ¶ 22).

  After receiving their notices of a right to sue, plaintiffs filed this lawsuit. In this Court, they continued to allege, as they did in the EEOC charges, that the Tripartite Agreement "require[d]" American to provide them with a position of comparable salary (SMF ¶ 25). Plaintiffs' complaint alleges that American "promised" them "a position which provided equal compensation" (SMF ¶ ...


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