Air Line Stew. & S. Ass'n, Loc. 550 v. American Airlines, Inc.

• Decision Date: 21 December 1973
• Docket Number: 72-1399.,72-1335,No. 72-1336,72-1503,72-1336
• Citation: 490 F.2d 636
• Parties: AIR LINE STEWARDS AND STEWARDESSES ASSOCIATION, LOCAL 550, TWU, AFL-CIO et al., Plaintiffs, v. AMERICAN AIRLINES, INC., Defendant. Appeal of Darlene PRESTON et al., in No. 72-1336. Appeal of Bonnie PULSKAMP et al., in No. 72-1503. AIR LINE STEWARDS AND STEWARDESSES ASSOCIATION, LOCAL 550, TWU, AFL-CIO et al., Plaintiffs, v. TRANSWORLD AIRLINES, INC., Defendant. Appeal of Patricia A. SANTINI et al., Darlene PRESTON et al., Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

490 F.2d 636 (1973)

AIR LINE STEWARDS AND STEWARDESSES ASSOCIATION, LOCAL 550, TWU, AFL-CIO et al., Plaintiffs, v. AMERICAN AIRLINES, INC., Defendant.

Appeal of Darlene PRESTON et al., in No. 72-1336.

Appeal of Bonnie PULSKAMP et al., in No. 72-1503.

AIR LINE STEWARDS AND STEWARDESSES ASSOCIATION, LOCAL 550, TWU, AFL-CIO et al., Plaintiffs, v. TRANSWORLD AIRLINES, INC., Defendant.

Appeal of Patricia A. SANTINI et al.,

Darlene PRESTON et al., Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees.

Nos. 72-1336, 72-1503, 72-1335, 72-1399.

United States Court of Appeals, Seventh Circuit.

Argued September 11, 1973.

Decided December 21, 1973.

Bradley D. Steinberg, Arnold I. Shure, Charles Pressman, Ronald Bailis, Chicago, Ill., Elnora Beth Livezey, Los Angeles, Cal., for plaintiffs-appellants.

Gilbert Feldman, Laurence A. Carton, Joseph P. Carr, Chicago, Ill., for defendants-appellees.

Lutz Alexander Prager, Equal Employment Opportunity Commission, Office Gen. Counsel, Washington, D. C., for amicus curiae.

Before KILEY, FAIRCHILD and STEVENS, Circuit Judges.

FAIRCHILD, Circuit Judge.

These appeals form a sequel to Air Lines Stewards, etc., Loc. 550 v. American Airlines, Inc., 455 F.2d 101 (7th Cir., 1972), and some of the background facts appear there. That decision, affirming denial of intervention by EEOC, was filed January 18, 1972. Thereafter notices of hearing in the district court on approval of the settlement, referred to at 455 F.2d 103, were mailed to members of the class in each action. A hearing was held. Plaintiff union (ALSSA) and the defendants supported the settlement, and the support of several individual members of the class was made known. Objections on behalf of dissatisfied members of the classes, including several named individual plaintiffs, were filed or made known at the hearing.

On March 17, 1972, a judgment was entered in each action (American Airlines, Inc., and Trans World Airlines, Inc., being the respective defendants), approving the settlement, ordering it implemented, and dismissing the action on the merits. Appeals were filed by members of the classes, including certain named plaintiffs, in each case. A related action against American and ALSSA was also dismissed, and those plaintiffs appealed.

Appellants contend that the district court should not have approved the settlements because ALSSA (certified bargaining agent for airlines cabin attendants under the Railway Labor Act), which negotiated the settlements disposing of the interests of members of the class, had interests antagonistic to them. Appellants also maintain that they were entitled to exclude themselves from the action and avoid the binding effects of the judgments. Other arguments are urged in addition.

Until October, 1970, defendant airlines followed the practice of discharging, permanently, a stewardess who became pregnant. On August 18, 1970, ALSSA and 12 stewardesses who had lost their jobs under this policy commenced an action against American challenging this practice as unlawful sex discrimination, in violation of 42 U.S.C. § 2000e et seq. The complaint asserted that the action was within Rule 23(b) (2), F.R.Civ.P., and that the class consisted of all present and former American stewardesses employed at any time since July 2, 1965, the effective date of the Civil Rights Act of 1964, who had been, desired to be, or would in the future desire to be, pregnant. The complaint sought declaratory, injunctive, and monetary relief. On the same day, ALSSA and five individuals filed a similar action against TWA.

Counsel for ALSSA signed the complaint as attorney for the plaintiffs and conducted the litigation and negotiations for settlement. He did not consult the individual plaintiffs nor any other members of the class concerning the terms of settlement.

By October, 1970, ALSSA and the airlines had made collective bargaining agreements which eliminated the challenged practice prospectively. Thus, although the class defined by the complaints included currently employed stewardesses who, presumably, had an interest in the declaratory and injunctive relief sought, that segment of the class had little further interest in the action, except for such interest as the junior among them would have adverse to the reinstatement of previously discharged stewardesses. Since the currently employed stewardesses were more actively the constituents of ALSSA, the change of circumstances made ALSSA at least a less adequate representative of the remaining members of the class than it may have been considered for the entire original class.

In July, 1971, counsel agreed on a settlement, subject to court approval. The proposed terms required discharged stewardesses who desired re-employment to notify the airline within 60 days from court approval. They would then be placed on a preferential hiring list, to be employed to fill vacancies before others were hired. When offered a job, a stewardess must accept within 10 days and meet specified standards of physical condition. The airline would have no liability whatsoever to any stewardess who failed, timely, to give the notice of desire to be re-employed or notice of acceptance of an offer. If reemployed, the stewardess would start with the same seniority as she had up to the date of termination, in the case of TWA, or that seniority plus 90 days additional in the case of American. Under the agreement, an order would be entered defining the class, in each case, as all former stewardesses who were removed from the payroll because of pregnancy, between July 2, 1965 and July 31, 1969, in the case of TWA, and August 11, 1970, in the case of American. If approved the settlement and resulting judgment, would bind all members of the class.

It does not appear that the district court made any order concerning the maintenance of these actions as class actions, pursuant to Rule 23(c) (1), until July 16, 1971, after the settlement had been proposed. On that date, the court ordered that the class in each action be redefined in accordance with the settlement agreement, and that the action be maintained as a class action. The order did not expressly address the fulfilment of the prerequisites listed in Rule 23(a) nor of any additional requirement of Rule 23(b). Presumably the court did not consider (b) (3) applicable, as it did not order a notice pursuant to (c) (2).¹ Notices of hearing on approval of the settlement were sent out, both in July, after which the hearing was delayed by the appeal, and again the next February.²

At or before the March, 1972 hearing on approval of the settlement, opposition to it was manifested by some of the named plaintiffs and by other members of the class in each action. With some variations, the objectors wanted all, or more nearly all, of the "whole loaf", i.e., reinstatement with seniority accrued to date, and back pay. Several members of the American class, the appellants here in No. 72-1503, had brought their own action July 14, 1971 in the Central District of California. They had attempted to opt out of the instant action, their California action, meanwhile, having been stayed. The district court heard objecting plaintiffs and class members, and their attorneys, only in the capacity of objectors, and in effect recognized ALSSA as the sole representative plaintiff, representing all class members, including the individual named plaintiffs.

The judgments entered as a result of the hearings determined that "Plaintiffs", without distinguishing between ALSSA and other plaintiffs, are adequate representatives of the class and have adequately represented them; that the action is a Rule 23(b) (2) class action;³ that the judgment is binding on all members of the class; and that the settlement is fair, reasonable, and adequate for all.

On February 28, 1972, Darlene Preston, a plaintiff in the action against American, above referred to, had brought a new class action against American and ALSSA predicated upon a claim of unlawful discrimination similar to that in the earlier complaint, and upon a claim that ALSSA failed to fulfill its duty of fair representation. Judgment was entered March 20, 1972 dismissing the complaint, apparently on the ground that the claims had been adjudicated by the judgment of March 17, 1972.

1. ALSSA's Representation of the Class.

Mr. Feldman, counsel for ALSSA, and attorney of record for all the plaintiffs, testified in support of the settlement.

He took into consideration the proposition that the answer to the ultimate question of liability, common to all members of the class, i. e., whether the discharge policy was a violation of the Act, was less than a certainty. He felt that about 90% of the members of the class faced a serious legal question as to recovery because they had been terminated long before any complaint was filed with EEOC and these stewardesses might not be able to rely on the later filing by other members of the class. He noted that the circumstances of termination varied and that these differences might raise questions concerning recovery by members of the class. The airlines had terminated some on the ground of pregnancy, and others on the ground that they had concealed pregnancy, in violation of a company rule. Others had voluntarily resigned after becoming pregnant, and others resigned, but claimed they were coerced.

Mr. Feldman testified that ALSSA made the decision to agree to the settlement. One advantage was that it afforded an opportunity to every member of the class to return to work, including those against whom the statute of limitations defense might have been urged, as well as those whose claim did not have that problem; those whose termination had clearly been grounded on pregnancy, as well as those who had less clearly been terminated for that cause.

Mr. Feldman conceded that ALSSA had obligations to groups which had conflicting interests. Junior currently employed...