Dean v. Trans World Airlines, Inc.

• Decision Date: 22 January 1991
• Docket Number: 85-4399 and 85-4432,Nos. 85-4384,s. 85-4384
• Citation: 924 F.2d 805
• Parties: 136 L.R.R.M. (BNA) 2273, 59 USLW 2479, 117 Lab.Cas. P 10,513, 32 Fed. R. Evid. Serv. 140 John L. DEAN, Plaintiff-Appellant, v. TRANS WORLD AIRLINES, INC., and Air Line Pilots Association, International, Defendants-Appellees. John L. DEAN, Plaintiff-Appellee, v. TRANS WORLD AIRLINES, INC., and Air Line Pilots Association, International, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 805

924 F.2d 805

136 L.R.R.M. (BNA) 2273, 59 USLW 2479,

117 Lab.Cas. P 10,513,

32 Fed. R. Evid. Serv. 140

John L. DEAN, Plaintiff-Appellant, v. TRANS WORLD AIRLINES, INC., and Air Line Pilots Association, International, Defendants-Appellees.

John L. DEAN, Plaintiff-Appellee, v. TRANS WORLD AIRLINES, INC., and Air Line Pilots Association, International, Defendants-Appellants.

Nos. 85-4384, 85-4399 and 85-4432.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 8, 1987.

Opinion Filed Jan. 12, 1990.

Order Granting Rehearing Filed June 28, 1990.

Reargued and Submitted Aug. 21, 1990.

Decided Jan. 22, 1991.

Jocelyn J. Lyman, Law, Hemstad, Lyman & Daniel, Olympia, Wash., for plaintiff-appellant-cross-appellee.

Gary Green and Eugene B. Granof, Air Line Pilots Ass'n, Washington, D.C., Ronald T. Schaps, Bogle & Gates, Seattle, Wash., for defendants-appellees-cross-appellants.

Appeal from the United States District Court for the Western District of Washington.

Before WALLACE and POOLE, Circuit Judges, and KEEP, ^* District Judge.

WALLACE, Circuit Judge:

The Air Line Pilots Association (ALPA) appeals from a judgment entered following a jury verdict against it on pilot Dean's wrongful discharge claim. ALPA argues that the district judge erred by denying its motion for a judgment notwithstanding the verdict, and by excluding evidence relating to Dean's previous misdemeanor conviction. Former employer Trans World Airlines (TWA) joins ALPA's appeal. Dean cross-appeals, challenging the district court's entry of partial summary judgment in favor of ALPA and TWA, which eliminated his constitutional challenge and limited his remedies to back pay prior to May 1982. The district court exercised jurisdiction under 28 U.S.C. Sec. 1331. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. Sec. 1291. We affirm in part, reverse in part, and remand.

I

Dean became a pilot for TWA and a member of ALPA in 1966. Dissatisfied with ALPA's representation, he resigned his union membership in February 1973. In 1975, TWA and ALPA negotiated a collective bargaining agreement, which included an agency shop clause requiring nonunion pilots to pay ALPA fees equal to the amount of dues paid by union members. Under this contract, ALPA assessed nonunion fees on a yearly basis, and charged interest on unpaid yearly balances.

Dean immediately protested the assessment authorized by the agreement, contending that ALPA's billing procedures violated the first amendment by forcing him to subsidize ALPA's ideological activities. He wrote ALPA letters over the next several months, demanding an accounting and a refund of any money used to defray expenses unrelated to collective bargaining. Dean received little meaningful response to his complaints. In December 1976, he reduced his payments to ALPA from $36 per month to $10 per month. Dean explained this reduction by letters accompanying the payments reiterating his objections to the fees and requesting an accounting.

The collective bargaining agreement provides that ALPA may request the discharge of any employee who is 60 days delinquent in his service charges. Section 3-B establishes a two-step discharge process. First, the union must send a registered letter to the employee, demanding payment within 15 days upon pain of discharge (step one letter). Second, the union must send a registered letter to TWA, formally requesting discharge, and certifying that the employee failed to tender the delinquency within 15 days of receipt of the step one letter (step two letter). A copy of this letter must also be sent to the employee, return receipt requested.

In early May 1977, ALPA treasurer Magee wrote Dean, advising him that the agency shop fees were legal, and that his failure to pay overdue fees would force ALPA to request his discharge. Dean responded by reiterating his protests, and again paid only part of the fees assessed. Thereafter, on June 29, 1977, Magee sent Dean a step one letter. Davis, the manager of the condominium facility where Dean lived, accepted the letter in Dean's absence. ALPA made no inquiry into whether Dean actually received the letter despite the fact that the return receipt bore Davis's signature.

On July 29, ALPA sent TWA and Dean the step two letter, certifying Dean's delinquency and requesting his discharge. TWA vice president Rhodes wrote to Dean on August 3, warning him that he would be discharged on August 11 if the delinquency was not remedied. Rhodes terminated Dean's employment by letter on August 12. Dean later testified that he did not receive any of these letters until August 16 because he was out of town during most of late July and early August. He learned of his discharge on August 12 when he called TWA to check his flight schedule.

After hearing of his discharge, Dean sent a mailgram to Hilly, TWA's Vice President for Labor Relations. Dean explained his position regarding the discharge, including his lack of notice, and requested all representation and relief due him under the contract. In reply, Hilly advised Dean to send ALPA a check for the delinquency. Dean complied, but ALPA refused to accept the payment.

On August 18, Dean sent Hilly another objection to the discharge. He included copies of the postal receipts to verify his claim that he had not received notice as required by the contract. Hilly responded 5 days later by denying the protest as untimely, reasoning that Dean had not filed the protest within 5 days of receipt of the step two letter, as required by section 3-B. Hilly alternatively found that Dean had offered no evidence that ALPA had violated the procedures established by the collective bargaining agreement. Hilly also refused Dean's request for interim reinstatement, concluding that this relief was unavailable because Dean's discharge had preceded his protest.

On July 28, 1979, Dean filed a complaint in district court, alleging that TWA and ALPA had breached the collective bargaining agreement, by failing to comply with the discharge procedures established by section 3-B. As an alternative ground for relief, Dean alleged that the agency shop agreement violated the Railway Labor Act and the United States Constitution because it forced him to subsidize the union's political activities.

The district judge granted partial summary judgment in favor of Dean on the statutory and constitutional claims, and ordered TWA to reinstate him. This ruling was reversed on appeal. Dean v. Trans World Airlines, 708 F.2d 486 (9th Cir.) (Dean I ), cert. denied, 464 U.S. 995, 104 S.Ct. 490, 78 L.Ed.2d 685 (1983). On remand, the district court granted summary judgment in favor of ALPA and TWA on the statutory and constitutional claims. The district judge also ruled that Dean's remedies would be limited to recovery of back pay prior to May 26, 1982. The case then proceeded to trial on the contractual claim. After a 10-day trial, the jury found against ALPA and awarded Dean $110,000 damages. The jury absolved TWA of liability.

All parties appealed. We initially reversed, holding:

The jury's finding that pursuit of Dean's contractual remedies would have been wholly futile is not supported by the evidence. The denial of defendants' motion for JNOV was therefore error. The judgment of the district court is reversed and the court is directed to enter judgment for the defendants.

We subsequently granted a petition for rehearing and heard oral argument. We vacate our prior opinion filed January 12, 1990.

II

Dean first argues that Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986) (Hudson ), decided after the panel's ruling in Dean I, requires reversal of the summary judgment on his constitutional and statutory claims. TWA and ALPA respond that Hudson is not retroactive, but that even if applied to this case, Hudson does not undermine our reasoning in Dean I. They further argue that Dean's challenge is foreclosed by law of the case. We review de novo the district court's entry of summary judgment. Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir.1989) (Kruso ), cert. denied, --- U.S. ----, 110 S.Ct. 3217, 110 L.Ed.2d 664 (1990).

A.

Although agency shop agreements are not unconstitutional, the Supreme Court has long held that unions may not force nonmembers to support the union's ideological and political causes. International Association of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961) (decided under Railway Labor Act); Brotherhood of Railway and S.S. Clerks v. Allen, 373 U.S. 113, 83 S.Ct. 1158, 10 L.Ed.2d 235 (1963) (same); Abood v. Detroit Board of Education, 431 U.S. 209, 97 S.Ct. 1782, 52 L.Ed.2d 261 (1977) (Abood ) (concluding that forced subsidization of union's political activities is unconstitutional). In Hudson, the Court for the first time considered a challenge to a union's fee collection procedures, rather than to the fees themselves. The Court concluded that before collecting fees through an agency shop agreement, a union must adequately explain the basis for the fee, and provide a reasonably prompt opportunity to challenge it before an impartial decisionmaker. Hudson, 475 U.S. at 310, 106 S.Ct. at 1077. The Court also held that unions must keep dissenting employees' fees in an escrow account pending resolution of any challenge. Id.

Before considering the effect of Hudson on our ruling in Dean I, we must first address ALPA's argument that Hudson is not retroactive. Under Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971), a decision must be applied retroactively unless, among other things, "the decision ... establish[es] a new principle of law, either by overruling clear past precedent ... or by deciding an issue of first impression whose resolution was not clearly foreshadowed." Id. at 106, 92 S.Ct. at 355. In Lowary v. Lexington Local Board of Education, 903 F.2d 422 (6th Cir.1990), the...