Carr v. Air Line Pilots Ass'n, Int'l

• Decision Date: 13 July 2017
• Docket Number: No. 16-20578,16-20578
• Citation: 866 F.3d 597
• Parties: Michael A. CARR ; Gregory Kathan; Perry Meier; Kelly L'Roy; Charles Mulhall; Scott Mund, Plaintiffs–Appellants v. AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendant–Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

866 F.3d 597

Michael A. CARR ; Gregory Kathan; Perry Meier; Kelly L'Roy; Charles Mulhall; Scott Mund, Plaintiffs–Appellants

v.AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendant–Appellee

No. 16-20578

United States Court of Appeals, Fifth Circuit.

FILED July 13, 2017

REVISED July 14, 2017

Howard Taylor Dulmage, Law Offices of Howard T. Dulmage, P.L.L.C., Houston, TX, for Plaintiffs–Appellants.

Michael E. Abram, Esq., Joshua Ellison, Michael Lawrence Winston, Esq., Cohen, Weiss & Simon, L.L.P., New York, NY, Jonathan A. Cohen, Marcus Charles Migliore, Attorney, Airline Pilots Association International, Washington, DC, James Kenneth Lobsenz, Esq., Senior Attorney, Airline Pilots Association, Legal Department, Herndon, VA, James Alfred Southerland, Southerland Law Firm, P.C., Houston, TX, for Defendants–Appellees.

Before STEWART, Chief Judge, and WIENER and PRADO, Circuit Judges.

PER CURIAM:

Plaintiffs-Appellants, Michael Carr, Gregory Kathan, Perry Meier, Kelly L'Roy, Charles Mulhall, and Scott Mund ("Appellants"), formerly pilots for Continental Airlines ("Continental") but now pilots for United Airlines ("United"), sued their collective bargaining agent, Defendant-Appellee Air Line Pilots Association International ("ALPA"), on behalf of themselves and all former Continental pilots. Appellants alleged that ALPA breached the duty of fair representation by interfering with the process of creating an integrated pilot seniority list ("seniority list") for all pilots of the two merging airlines, Continental and United Airlines. The district court granted ALPA's motion for a summary judgment and dismissed the Appellants' suit. We affirm.

I. FACTS AND PROCEEDINGS

A. Factual Background

In 2010, United and Continental merged, operating thereafter as United. ALPA represented the pilots of both airlines as their collective bargaining agent before and during the merger.

ALPA had a preexisting Merger Policy which required it to "provide the process" when two airlines whose pilots it represented merged. That process included the integration of the two seniority lists into one. ALPA's representation structure before and during this merger included Master Executive Councils ("MECs") elected to represent each airline's pilot group. ALPA's role during a merger is limited to providing the Merger Policy and facilitating the merger in accordance with that policy. In this case, each MEC appointed a three-member "Merger Committee" to create the seniority list. Pursuant to ALPA's Merger Policy, the Merger Committees had "complete and full authority" to negotiate and, if necessary, arbitrate a "fair and equitable" and "final and binding" seniority list. ALPA Merger Policy permitted the MECs and Merger Committees to "fashion their own process" for integrating the seniority lists, while observing specified "fundamental requirements."

Ultimately, the MECs and Merger Committees were unable to agree on a seniority list. ALPA's Merger Policy specifies that if the pilots are unable to agree on a seniority list, arbitrators would merge the existing lists. The Merger Committees voluntarily agreed to select the arbitrators from a list proffered by ALPA.

During the course of the arbitration, two discovery disputes arose, and the Merger Committees chose a separate arbitrator to referee those two disputes. First, Continental requested that United provide specific W-2 data showing each pilot's earnings for a period. The discovery arbitrator ruled that Continental could discover earnings information from the W-2s, subject to confidentiality procedures designed to prevent disclosure of the pilots' seniority numbers. Second, the arbitrator granted United's request for Continental pilots' defined-benefit plan records and did not subject that request to any restrictions, even though he acknowledged that the parties had agreed to protect the confidentiality of the information with respect to those records.

Following 16 days of hearings, during which both sides submitted extensive testimony, expert witness reports, and documents, each side presented its proposal for integrating the seniority lists. The arbitrators subsequently issued an award that integrated the seniority lists into one list. The arbitrators included a thorough explanation of how they incorporated the factors required by the ALPA Merger Policy. The arbitrators rejected various parts of Continental's and United's proposals in coming up with the seniority list. Thereafter, United implemented that list, and the combined groups of pilots have been working under it ever since.

B. Procedural Background

Appellants filed the instant complaint, alleging that ALPA breached its duty of fair representation by acting in bad faith. Appellants requested that the court vacate the arbitration award and order ALPA to start a new seniority list integration process.

ALPA filed a motion to dismiss on the pleadings. The district court denied that motion and converted it to a motion for summary judgment, allowing "tailored discovery" on the issue of ALPA's alleged breach. ALPA renewed its motion for summary judgment following preliminary discovery. The court granted that motion and Appellants timely appealed.

II. STANDARD OF REVIEW

"We review a grant of summary judgment de novo under the same standard applied by the district court."¹ Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."² We consider the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in its favor.³

"Once a movant who does not have the burden of proof at trial makes a properly supported motion" for summary judgment, "the burden shifts to the nonmovant to show that [the motion] should not be granted."⁴ To do so, the nonmovant must "identify specific evidence in the record and ... articulate the precise manner in which that evidence supports his or her claim."⁵ Neither we nor the district court have a duty to "sift through the record in search of evidence to support" the nonmovant's opposition to summary judgment.⁶

III. ANALYSIS

A. Breach of the Duty of Fair Representation

1. Applicable Law

The duty of fair representation requires a union "to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct."⁷ The fact that a union decided a dispute in a way that favored one group's interests over another is not sufficient to show a breach of that duty.⁸

Unions have broad discretion in resolving internal disputes, and their actions are judged by a "wide range of reasonableness."⁹ A breach of fair duty occurs only when the union's conduct is "arbitrary, discriminatory, or in bad faith."¹⁰ Here, Appellants allege only bad faith.

Bad faith occurs when a union acts with a "motive to harm" a particular group, and turns on the subjective motivation of the union officials.¹¹ Bad faith is a "demanding standard" met only by "sufficiently egregious" union action.¹² To prove that ALPA violated its duty to fairly represent all members by acting in bad faith, Appellants must show that the union acted intentionally to harm them by "seriously undermin[ing] the integrity of the arbitral process."¹³ Even if a member shows that his union breached its duty, he must also show that the breach "contributed to the erroneous outcome of the ... proceedings."¹⁴

2. Analysis

Appellants allege that underlying ALPA's bad faith was its preference for United pilots.¹⁵ We address Appellants' supporting contentions in turn.

a. Richard Harwood's Participation

Appellants assert that ALPA acted in bad faith by not barring—and allegedly encouraging—the participation of Delta Airlines pilot Richard Harwood ("Harwood") in the merger proceedings. Harwood was hired by the United Merger Committee as a consultant and testified in the arbitration proceeding on the longevity factor. Then, after the hearings ended, Harwood worked as a member of the arbitration panel's technical assistance team. That team consisted of technical experts designated by both Merger Committees to help the panel members obtain data required to generate the seniority list.

Appellants focus on the fact that ALPA rules state that an MEC is prohibited from hiring "active member pilots" as consultants and that Harwood was an active member pilot. However, a separate ALPA rule in the Merger Policy gives the Merger Committees "complete and full authority" to act on behalf of the pilots they represent. That authority would include the hiring and paying of consultants of its choice, thereby making Harwood's participation completely consistent with ALPA policy. It is unclear how these provisions are meant to interact, but a union's interpretation of its own governing documents is entitled to deference unless the interpretation is "patently unreasonable,"¹⁶ which ALPA's interpretation is not. The Merger Policy vests broad discretion in the Merger Committees to create seniority lists, and the provisions of ALPA policy that prohibit active member pilots from consulting specifically limits this prohibition to MECs: It does not apply to Merger Committees.

Appellants also allege that ALPA encouraged—or at least did not discourage—Harwood's participation in the arbitration process. However, it was the United Merger Committee, not ALPA, that had the authority to hire Harwood as a consultant and did so. Appellants adduced no evidence to show that bad faith motivated ALPA's decision not to prevent Harwood's participation.

Appellants further claim that they were misinformed as to the nature of Harwood's participation in the arbitration proceedings. They claim that they were led to believe that Harwood would work only in a technical capacity, yet he also testified on longevity. Appellants did not object to Harwood's testimony or service at any point during the arbitration. Moreover, the arbitrators had full...