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Cunningham v. United Airlines, Inc.

United States District Court, N.D. Illinois, Eastern Division

February 4, 2014

SCOTT CUNNINGHAM, ANDREW HOLZMANN, and TROY LOWN, individually and on behalf of all other similarly situated, Plaintiffs,
v.
UNITED AIRLINES, INC. and AIR LINE PILOTS ASSOCIATION, Defendants.

MEMORANDUM OPINION AND ORDER

JAMES F. HOLDERMAN, District Judge.

On February 22, 2013, plaintiffs Scott Cunningham, Andrew Holzmann, and Troy Lown (collectively "Plaintiffs"), on behalf of themselves and all other similarly situated individuals, filed their three-count Amended Class Action Complaint (Dkt. No. 2, "Am. Compl.") in the Eastern District of Missouri against defendants United Airlines, Inc. ("United") and the Air Line Pilots Association ("ALPA") (collectively "Defendants"). Plaintiffs' Amended Complaint alleges claims for breach of contract, breach of duty of fair representation, and complicity in breach of duty of fair representation arising out of the October 1, 2010 merger of United Air Lines, Inc. ("pre-merger United") and Continental Airlines ("Continental"). On August 2, 2013, the case was transferred to this court. (Dkt. No. 29.)

Pending before the court are ALPA's motion to dismiss (Dkt. No. 39) and United's motion to dismiss (Dkt. No. 42), both of which argue that this court lacks jurisdiction over Plaintiffs' claims, because they raise only "minor disputes" subject to mandatory arbitration under the Railway Labor Act, 45 U.S.C. §§ 151, et seq. ("RLA"). For the reasons stated in this order, the court grants Defendants' motions to dismiss.

BACKGROUND

When ruling on a motion to dismiss, a court must accept as true all well-pleaded allegations in the complaint, drawing all reasonable inferences in favor of the plaintiff. Cole v. Milwaukee Area Tech. Coll. Dist., 634 F.3d 901, 903 (7th Cir. 2011) (quoting Justice v. Town of Cicero, 577 F.3d 768, 771 (7th Cir. 2009)). Accordingly, this court accepts the allegations in Plaintiffs' Amended Class Action Complaints as true in articulating the relevant background facts below.

On October 1, 2010, pre-merger United acquired Continental in what was termed a "merger of equals." (Am. Compl. ¶ 8.) In March 2012, United ceased operating Continental as a separate airline. ( Id. )

ALPA is an international pilot union, representing nearly 51, 000 pilots at 35 airlines in the United States and Canada. ( Id. ¶ 31.) ALPA is the certified collective bargaining agent for all of United's pilots, including Plaintiffs. ( Id. ¶ 9.) ALPA's organizational structure includes a governing body called the "Master Executive Council" ("MEC") for each ALPA-represented airline, with each individual MEC responsible for carrying out ALPA's business at that particular airline. ( Id. ¶ 33.) Prior to the merger, ALPA represented the pilots of both pre-merger United and Continental through separate MECs elected by each airline's pilots. ( Id. ¶ 34.) After the merger, ALPA continued to represent the pilots of the merged airline through its separate legacy pre-merger United and Continental MECs. ( Id. ¶ 35.)

In December 2012, United and ALPA entered into a new collective bargaining agreement that governs the pay and work rules of United's pilots known as the "United Pilot Agreement" ("UPA").[1] ( Id. ¶ 9.) The UPA was jointly negotiated by committees from the legacy pre-merger United and Continental MECs. ( Id. ¶ 36.) Under the UPA, a pilot's hourly pay rate is determined by three basic factors: (1) his or her "longevity;" (2) his or her rank (Captain or First Officer); and (3) the type of aircraft he or she flies. ( Id. ¶ 22.) A pilot's pay longevity, in turn, is determined by the date he or she was "hired as a Pilot" by pre-merger UAL or Continental, and includes time while he or she was furloughed from either airline. ( Id. ¶ 23.) For pay purposes, longevity is capped at 12 years under the UPA. ( Id. ) The UPA was made effective on December 15, 2012, with pay provisions made retroactive to December 1, 2012. ( Id. ¶ 21.)

Although each of the Plaintiffs' longevity exceeds 12 years, United has given each Plaintiff and purported Class[2] member credit for only 4 years and 7 months of longevity for purposes of determining their pay-specifically, from May 7, 2008 through December 1, 2012- beginning December 1, 2012. ( Id. ¶¶ 10, 25.) United did so at the insistence of the Continental MEC, to the detriment of the Class and in favor of the junior legacy Continental pilots, the most junior of which were hired in May 2008. ( Id. ¶ 39.) United and ALPA's agreement in this regard is evidenced in a side "Letter of Agreement" identified as "LOA 25" entered into between United and ALPA as part of the UPA, paragraph 4 of which provides as follows:

Upon date of signing [the UPA], any pilot who is, or previously was, furloughed and whose accrued pay longevity is less than that of pilots hired on or before 5/6/08 shall receive additional pay longevity credit for time spent on furlough, but only to the extent that such credit does not provide a pay longevity date prior to 5/7/08.

( Id. ¶ 40.) Plaintiffs allege that this agreement has caused United to under-pay Plaintiffs and the Class members since December 1, 2012. ( Id. ¶ 45.)

Plaintiffs allege in Count 1 that United's actions in reducing Plaintiffs' and the Class members' longevity to only 4 years and 7 months violates the express terms of the UPA. ( Id. ¶ 26.) Plaintiffs allege in Count 2 that ALPA breached its duty to fairly represent Plaintiffs and the Class (1) by entering into paragraph 4 of LOA 25 and (2) by agreeing that its provisions apply to Plaintiffs and the Class to reduce their longevity at United to 4 years and 7 months. ( Id. ¶ 47.) Plaintiffs allege in Count 3 that United "colluded with ALPA" in entering into paragraph 4 of LOA 25, and in agreeing to the above interpretation of paragraph 4 of LOA 25, "in order to secure ALPA's approval" of the UPA. ( Id. ¶ 51.)

LEGAL STANDARD

As stated earlier, under the Federal Rules of Civil Procedure, when deciding a Rule 12(b)(6) motion, the court "construe[s] the... [c]omplaint in the light most favorable to Plaintiff, accepting as true all well-pleaded facts and drawing all possible inferences in his favor." Cole, 634 F.3d at 903. A complaint need contain only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2).

However, the complaint must "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Though "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555.

The complaint must "include sufficient facts to state a claim for relief that is plausible on its face.'" Cole, 634 F.3d at 903. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

ANALYSIS

1. Count 1 - Breach of Contract Against UAL

Again, in Count I, Plaintiffs allege that their longevity for purposes of pay determinations exceeds 12 years, but United has only given them credit for 4 years and 7 months. (Am. Compl. ¶ 25.) According to Plaintiffs, this act violates "the express terms of the CBA." ( Id. ¶ 26.) Plaintiffs acknowledge that Count I raises a "minor dispute" that would usually be considered "arbitrable" under the RLA. ( Id. ¶ 29.)

However, Plaintiffs claim that this court has jurisdiction over its breach of contract claim since "plaintiffs' administrative remedy is wholly futile." ( Id. ) The arbitration panel "would consist of one arbitrator selected by United, one selected by ALPA, and a third independent arbitrator". ( Id. ) Plaintiffs assert this remedy "would be a basically rigged' arbitration", ...


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