Ballew v. Cont'l Airlines, Inc.

• Decision Date: 31 January 2012
• Docket Number: No. 11–20279Summary Calendar.,11–20279Summary Calendar.
• Citation: 162 Lab.Cas. P 10444,52 Employee Benefits Cas. 1321,192 L.R.R.M. (BNA) 2879,668 F.3d 777
• Parties: Edward S. BALLEW; Timothy J. Shannon; Craig P. Bowcock; William Bauer, Plaintiffs–Appellants, v. CONTINENTAL AIRLINES, INCORPORATED; Continental Pilots Retirement Plan, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

162 Lab.Cas. P 10,444

192 L.R.R.M. (BNA) 2879

52 Employee Benefits Cas. 1321

668 F.3d 777

Edward S. BALLEW; Timothy J. Shannon; Craig P. Bowcock; William Bauer, Plaintiffs–Appellants,

v.CONTINENTAL AIRLINES, INCORPORATED; Continental Pilots Retirement Plan, Defendants–Appellees.

No. 11–20279Summary Calendar.

United States Court of Appeals, Fifth Circuit.

Jan. 31, 2012.

Thomas G. Moukawsher, Moukawsher & Walsh, L.L.C., Groton, CT, for Plaintiffs–Appellants.

W. Carl Jordan, Sean Michael Becker, Vinson & Elkins, L.L.P., Houston, TX, for Defendants–Appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before GARZA, SOUTHWICK and HAYNES, Circuit Judges.

HAYNES, Circuit Judge:

This appeal arises from the district court's order dismissing Plaintiffs–Appellants' (“Retirees”) claim for lack of subject matter jurisdiction due to the Railway Labor Act's (“RLA”) exclusive and mandatory dispute resolution process that applies to Retirees' claims. Retirees argue on appeal that the RLA does not apply to them because they are no longer “employees” as contemplated by the RLA, 45 U.S.C. §§ 151, 181. Alternatively, Retirees argue that even if the RLA applies to them as former employees, they complied with the terms of their Collective Bargaining Agreement (“CBA”), which allowed them to bring an action in federal district court pursuant to Section 502(a)(1)(B) of the Employee Retirement Income Security Act (“ERISA”). For the reasons set forth below, we AFFIRM.

I. Facts & Procedural History

Retirees are all former Continental Airlines pilots who filed a proposed class action against Continental Airlines, Inc. and the Continental Pilots Retirement Plan (“Continental”) in the United States District Court for the Southern District of Texas in May 2010. Retirees sued under ERISA § 502(a)(1)(B), alleging Continental breached the terms of Retirees' pension plan. On March 21, 2011, the district court dismissed Retirees' claims for lack of jurisdiction, holding that the RLA applied to Retirees and that the RLA gives exclusive jurisdiction over their contract interpretation claim to the administrative resolution process. Retirees timely appealed the district court's order on April 18, 2011.

In their complaint, Retirees allege that Continental misinterpreted the terms of their pension benefits as memorialized in the Retirement Plan—a pension plan generally subject to ERISA. Specifically, Retirees contend that the pilots' retirement pensions should be calculated according to the most recent sixty consecutive months' salaries before leaving Continental. Retirees argue that Continental inappropriately considered any utilized “sick leave” as an interruption of a pilot's consecutive sixty months and thus calculated the continuous sixty month period from an earlier period in the pilot's career. Retirees aver that this computation method accounts for lower pension calculations because pilots earn less earlier in their careers.

The CBA provided that employees like Retirees must seek review of adverse benefit determinations through the Retirement Board, a properly established “System Board” under the RLA, 45 U.S.C. § 184. The Retirement Board is composed of four people, two appointed by Continental and two appointed by the Air Line Pilots Association (“ALPA”).¹ Section 21 of the CBA outlines the jurisdiction of the Board, vesting it with the authority to hear grievances stemming from the “interpretation or application of any of the terms of the Agreement.” The CBA specifically exempts “changes in hours of employment, rates of compensation, or working conditions covered by existing agreements between the parties,” from the Board's jurisdiction. Moreover, section 21 dictates that “all cases properly referred to [the Board] will be final and binding upon the parties.” If the Board deadlocks on a particular dispute, parties are allowed to seek further arbitration, so long as the claimants waive their right to further litigation and the arbitrator is selected from a mutually agreed list of ERISA arbitrators. If the Board does not deadlock the CBA contemplates employees' ability to sue under ERISA.

Section 28 of the CBA expressly incorporates Continental's retirement plans into the CBA—including the Retirement Plan at issue here. Section 9.21(c) of the Retirement Plan provides standard notification procedures for a claimant's adverse benefit determination by a Benefits Administrator. That provision requires the Administrator to “includ[e] a statement of the Claimant's right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review.” Section 9.21(d) of the Retirement Plan provides that a Plan participant has a right to have an adverse benefit determination reviewed by the Retirement Board. That section also provides a claimant with “the opportunity to submit written comments, documents, records, and other information relating to the claim for Plan benefits to the Retirement Board” and establishes that a “decision on review by the Retirement Board will be binding and conclusive upon all persons and the Claimant shall neither be required nor permitted to pursue further appeals to the Retirement Board.” The following section, 9.21(e), does, however, contemplate a claimant's “right to bring an action under section 502(a) of ERISA” following an adverse determination by the Retirement Board. Like the CBA, the Retirement Plan, section 9.21(f), allows a claimant to pursue binding arbitration before an ERISA arbitrator in the event of a Retirement Board deadlock.

Acting for Retirees, Captain Edward Ballew sought review of Continental's initial adverse benefit determination on August 6, 2009 and made oral arguments to the Retirement Board on August 10, 2009. The Retirement Board issued a unanimous decision rejecting Ballew's interpretation of the Plan in October 2009. In its decision, the Retirement Board provided that “Captain Ballew also has the right to bring suit under section 502(a) of ERISA.” Retirees thus commenced this action in May 2010.

II. Standard of Review

This Court has jurisdiction over the final judgment of the district court under 28 U.S.C. § 1291. We review a district court's dismissal for lack of subject matter jurisdiction under Rule 12(b)(1) de novo. Ramming v. United States, 281 F.3d 158, 161 (5th Cir.2001); see also St. Paul Fire & Marine Ins. Co. v. Labuzan, 579 F.3d 533, 538 (5th Cir.2009) (stating that this Court reviews a district court's rulings on questions of statutory interpretation de novo). We may also affirm on any ground supported by the record, including one not reached by the district court. Moncrief Oil Int'l Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir.2007).

The party asserting jurisdiction bears the burden of proof for a 12(b)(1) motion to dismiss. Ramming, 281 F.3d at 161 (citations omitted). The plaintiff must prove by a preponderance of the evidence that the court has jurisdiction based on the complaint and evidence. Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir.1981). A court can find that subject matter jurisdiction is lacking based on “(1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.” Ramming, 281 F.3d at 161 (citing Barrera–Montenegro v. United States, 74 F.3d 657, 659 (5th Cir.1996)).

III. Discussion

Retirees filed this action pursuant to ERISA § 502(a)(1)(B), alleging that Continental breached the CBA by failing to provide Retirees with pension benefits outlined in the Retirement Plan. The issues presented by this appeal are (1) whether the RLA applies to Retirees as “employees” under the Act; and (2) whether, despite the RLA's exclusive arbitration procedures, Retirees may seek judicial review of adverse Retirement Board determinations.

A. Retirees as “Employees” under the RLA

First, Retirees contend that they are not covered by the RLA. Citing the language governing the RLA, 45 U.S.C. §§ 151, 181, Retirees argue that their status as former employees exempts them from the RLA's mandates. This argument has been squarely rejected by this court. See Bowcock v. Cont'l Airlines, Inc., No. 10–20856, 2011 WL 2672521 (5th Cir. July 8, 2011) (unpublished).² In that case, one of the appellants here, Craig Bowcock, pursued similar litigation based on his allegation that Continental breached its fiduciary duty under ERISA by indicating that he would have to abandon his contemporaneous pension claims (the suit before us now) in order to take advantage of an early retirement program. This Court affirmed the district court's dismissal of Bowcock's claims due to lack of subject matter jurisdiction. Id. at *3. Bowcock argued, just as Retirees do here, that the RLA's mandatory dispute resolution procedures were not applicable to him as a retiree because retirees are not “employees” under the RLA. Id. at *1. As noted in Bowcock, the Supreme Court decided this issue in Pennsylvania Railroad Co. v. Day, 360 U.S. 548, 79 S.Ct. 1322, 3 L.Ed.2d 1422 (1959). The Day Court considered whether the National Railroad Adjustment Board maintained exclusive jurisdiction over a former rail employee. Id. at 551, 79 S.Ct. 1322. Holding that the RLA applied despite the claimant's status as a retiree, the Court stated that “[a]ll the considerations of legislative meaning and policy which have compelled the conclusion that an active employee must submit his claims to the Board, and may not resort to the courts in the first instance, are the same when the employee has retired and seeks compensation for work performed while he remained on active service.” Id. at 552, 79 S.Ct. 1322.

Despite Day's clear pronouncement, Retirees invite us to ignore Supreme Court precedent because they believe the current Supreme Court would overrule Day. We are a “strict stare decisis court,” Bowcock, at *3 (citing ...