Air Line Pilots Ass'n v. Guilford Transp. Indust.

• Decision Date: 13 October 2004
• Docket Number: No. Civ. 04-331-JD.,Civ. 04-331-JD.
• Citation: 360 F.Supp.2d 248
• Parties: AIR LINE PILOTS ASSOCIATION, INTERNATIONAL v. GUILFORD TRANSPORTATION INDUSTRIES, INC. et al.
• Court: U.S. District Court — District of New Hampshire

Page 248

360 F.Supp.2d 248

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL v. GUILFORD TRANSPORTATION INDUSTRIES, INC. et al.

No. Civ. 04-331-JD.

United States District Court, D. New Hampshire.

October 13, 2004.

Andrew W. Serell, Rath Young & Pignatelli, P.A., Concord, NH, for Plaintiff.

ORDER

DICLERICO, District Judge.

The defendants, Guilford Transportation Industries, Inc. ("Guilford"), Pan American Airways Corp. ("Pan Am"), and Boston-Maine Airways Corp. ("Boston-Maine"), object to the magistrate's report and recommendation ("R & R") that an injunction issue against them pursuant to the Railway Labor Act, 45 U.S.C. § 152 ("the RLA"). The plaintiff, Airline Pilots Association, International ("ALPA") has filed a response to the objection.

Standard of Review

ALPA's "motion for temporary restraining order and preliminary injunction" was referred to the magistrate under 28 U.S.C. § 636(b)(1)(b) to conduct an evidentiary hearing and to submit proposed findings of fact and recommendations for the disposition of the motion. This court must therefore conduct de novo review of the report and recommendation. Fed.R.Civ.P. 72(b); 14 James Wm. Moore et al., Moore's Federal Practice § 72.02[9], at 72-18 (3d ed.2004). Following this review, the court "may accept, reject, or modify the recommended decision, receive further evidence, or recommit the matter to the magistrate judge with instructions." Fed.R.Civ.P. 72(b); see also 28 U.S.C. § 636(b)(1)(c).

Although the de novo standard does not compel a new hearing, the court "must give fresh consideration to those issues to which specific objections have been made." 12 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice & Procedure § 3072.2, at 374 (2d ed.1997) (internal quotation marks and footnote omitted); accord Gioiosa v. United States, 684 F.2d 176, 178 (1st Cir.1982). Fresh consideration includes "at least, reading the transcripts of the testimony that relates to the objected-to portions of the magistrate judge's report." Coolspring Stone Supply, Inc. v. Am. States Life Ins. Co., 10 F.3d 144, 147 (3rd Cir.1993); see also R.I. Laborers' Health & Welfare Fund v. Philip Morris, Inc., 99 F.Supp.2d 174, 176-77 (D.R.I.2000). With these principles in mind, the court turns to the defendants' objections.

Background¹

ALPA brought this action to, inter alia, prevent the defendants from transferring the work of flying B-727 passenger aircraft from Pan Am to Boston-Maine. Although Pan Am has a collective bargaining agreement ("the CBA") in place with ALPA, who represents the majority of its pilots, the pilots of Boston-Maine are not unionized. Pan-Am and Boston-Maine are subsidiaries of the same parent company, Pan American Airlines, Inc. Guilford does not have any ownership interest in either Pan-Am or Boston-Maine, but leases 727s to both companies. Neither Boston-Maine nor Guilford is a party to the CBA.

Pan American Airlines, Inc., acquired the assets of Pan Am following its bankruptcy in June 1998. Boston-Maine was formed as a wholly owned subsidiary of Pan American Airlines, Inc., in March, 1999. Since it was acquired, Pan Am has been losing money and has furloughed approximately two-thirds of the pilots it once employed. Similarly, Boston-Maine has never turned a profit, although its operations have expanded. Pan Am notified the Federal Aviation Administration in June 2004, that it intended to cease operations by October 31, 2004.

Although Pan Am has different personnel from Boston-Maine serving as the directors of various aspects of Pan Am's operations, the two entities have the same president, chief financial officer, and general counsel.² Boston-Maine has hired a number of former Pan Am employees (including some into management-level positions), has used Pan Am employees to train Boston-Maine workers, and has specifically solicited job applications from Pan Am flight attendants.³ While Boston-Maine maintains its own operating specifications, procedures, facilities, programs, and accounts, it entered into a "support services and facilities agreement" with Pan Am in October 2001. Pan Am and Boston-Maine also operate a joint reservation system accessible from either company's website, and a route map on the Boston-Maine website includes Pan Am service (albeit in a different color from that of the Boston-Maine routes).

The magistrate heard testimony from Linda Toth, one of Pan Am's former regional managers, relating certain conversations with David Fink, the president of Pan Am, Boston-Maine, and Guilford. According to Toth, Fink regularly expressed his dislike for ALPA and even said in March or April 2004, that "it was going to be smooth sailing with Boston-Maine as soon as they got rid of all those union jackasses and life would be so much easier...." Tr. Inj. Hrg. at 78:3-19 (Sept. 9, 2004). Toth also related Fink's statement that all of Pan Am's aircraft would soon be flying under the Department of Transportation operating certificate issued to Boston-Maine.

Over ALPA's objections, Boston-Maine received permission from the DOT and the FAA to operate 727 aircraft in July 2004, and began doing so in August 2004. Prior to that time, Boston-Maine had flown passengers only on Jetstream 3100 turboprop planes, which seat nineteen as opposed to the 149 passengers who can be accommodated by one of the 727s. At the hearing before the magistrate, Pan Am pilots testified to an approximate twenty-five percent reduction in the number of hours that Pan Am offers them to fly each month since Boston-Maine started operating 727s, as well as to specific experiences suggesting that Pan Am was giving their work to Boston-Maine. According to the general counsel for all three defendants, Boston-Maine will operate the same service now performed by Pan Am after that entity's operations are discontinued.⁴

ALPA commenced this action on September 1, 2004, invoking this court's jurisdiction under the RLA. ALPA seeks, inter alia, an order enjoining the defendants "from utilizing Boston-Maine or any other alter ego operation to operate B-727s or other large jet aircraft for the purpose of transferring work and work opportunities of the Pan Am flight crewmembers" on the ground that to do so would interfere with the organization of Pan Am's pilots in violation of 45 U.S.C. § 152, Third and Fourth. Compl. at 16, 19. Asserting that this course of conduct would also violate the "status quo" provisions of the RLA codified at 45 U.S.C. § 152, First and Seventh, and 45 U.S.C. § 156, ALPA seeks to enjoin it "until all required bargaining, mediation and dispute resolution procedures of the RLA are exhausted." Id.

With its complaint, ALPA filed a "motion for temporary restraining order and preliminary injunction." The court referred this motion to the magistrate, who conducted an evidentiary hearing spanning September 9 and 10, 2004.⁵ In his subsequent report and recommendation, issued September 17, 2004, the magistrate proposed that

upon the posting of adequate security by ALPA, that the defendants, Pan American Airlines, Inc., and their officers, agents, servants, employees, attorneys, and those persons acting in active concert or participation with them ... be ordered to take the following acts:

1. Restore to the status quo rates of pay, rules and working conditions of the Pan Am flight crewmembers as they existed on July 15, 2004, including but not limited to, all those embodied in the [CBA], until all required bargaining, mediation and dispute resolution procedures of the RLA are exhausted.

2. Refrain from using Boston-Maine, or any other affiliated operation, to operate B-727s or any other large jet aircraft in service traditionally performed by Pan Am and that Pan Am is capable of performing.

3. Refrain from transferring to Boston-Maine any aircraft from the Pan Am certificate to the Boston-Maine certificate.

R & R at 31.

On September 20, 2004, the court granted ALPA's motion for a temporary restraining order, to the extent it required the parties to maintain the status quo existing the day the R & R issued, pending a ruling on the parties' objections. Following a telephone conference with counsel on September 20, 2004, the court amended the order to enjoin the defendants from issuing a notice that Pan Am would be discontinuing its operations after October 31, 2004, also pending a ruling on the parties' objections. The court also directed the parties to file separate briefing on the issue of security for the recommended injunction. The defendants filed a timely objection to the R & R; both parties filed the requested briefing on the bond issue.

Discussion

The defendants object to the report and recommendation on a number of grounds. First, they argue that the transfer of work from Pan Am to Boston-Maine presents only a minor dispute, over which the court lacks jurisdiction under the RLA, because it is permitted under an arguable reading of the CBA. Second, the defendants contend that the magistrate erred in determining that Boston-Maine is an alter ego of Pan Am such that the transfer of work from the latter to the former violates the status quo provisions of the RLA. Third, the defendants argue that the record fails to show what they call the "extremely limited circumstances" appropriate for judicial relief under 45 U.S.C. § 152, Third and Fourth. Fourth, the defendants challenge the magistrate's "conclusion that a preliminary injunction may issue under the RLA without the necessity of the plaintiff [sic] making the customary showing that it is entitled to equitable relief," i.e., irreparable injury, a balance of harms in its favor, and the public interest on its side. Finally, the defendants make a series of objections to the "form" of the recommended order. The court will address these objections in turn, then consider the issue of security for the injunction.

I. Whether the Transfer to Boston-Maine Poses a Major Dispute

As the First Circuit explained in ...