IAM v. Eastern Air Lines, Inc.
| Decision Date | 07 November 1990 |
| Docket Number | 90 Civ. 1205 (LBS) and 90 Civ. 0003 (LBS).,No. 90 Civ. 1204 (LBS),90 Civ. 1204 (LBS) |
| Citation | 121 BR 428 |
| Parties | INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AFL-CIO, et al.; Air Line Pilots Association International, et al., Defendants-Appellants, v. EASTERN AIR LINES, INC., Plaintiff-Appellee. |
| Court | U.S. District Court — Southern District of New York |
Mark D. Schneider, Washington, D.C., for defendant-appellant Intern. Ass'n of Machinists and Aerospace Workers.
Peter Herman, Cohen, Weiss, & Simon, New York City, for defendants-appellants Air Line Pilots Ass'n Intern., et al.
William G. Ballaine, Mark S. Landman, Siff, Rosen & Parker, P.C., New York City, for plaintiff-appellee.
Defendants-Appellants International Association of Machinists and Aerospace Workers, AFL-CIO et al. (collectively "IAM") appeal from an injunction order entered by the Bankruptcy Court for the Southern District of New York on an application from Eastern Air Lines, Inc. ("Eastern"). In re Ionosphere Clubs, Inc., 108 B.R. 901, 948 (Bkrtcy.S.D.N.Y.1989). The injunction limits IAM's allegedly unlawful strike activity which the Bankruptcy Court identified after an extensive hearing. Id. at 903-04. The basis for the IAM appeal is that the Bankruptcy Court had no jurisdiction to issue the injunction because this is not a "core" proceeding within the meaning of 28 U.S.C. § 157(b)(2) (1988). In the alternative, if this Court determines as a matter of law that the Bankruptcy Court had jurisdiction, IAM claims that the injunction should be vacated since it violates the statutory and constitutional rights of the strikers.
Defendant-Appellant Air Lines Pilots Association, International ("ALPA"), also appeals the decision below, but for different reasons. The Bankruptcy Court found that the injunctive order against ALPA became moot since ALPA had terminated its strike. Ionosphere Clubs, 108 B.R. at 908 n. 2. However, since Eastern in its complaint requested damages in addition to injunctive relief from all the defendants for torts committed, the Bankruptcy Court included ALPA in its Findings of Fact and Conclusions of Law. Id. ALPA claims that once the Court determined that Eastern's request for an injunction against ALPA was moot, it lacked authority to issue findings and conclusions regarding ALPA. ALPA brings a mandamus motion to vacate the Bankruptcy Court's Findings of Fact and Conclusions of Law as to ALPA. Plaintiff-Appellee Eastern opposes both the IAM and ALPA appeals.
This Court has jurisdiction of the appeal pursuant to 28 U.S.C. § 158 (1988). For the reasons stated below, this Court holds that this matter is a core proceeding but vacates the injunctive order entered by the Bankruptcy Court since it violates portions of the Norris-LaGuardia Act ("NLGA"). Therefore, this Court need not reach a decision on IAM's claim of constitutional violations. We deny ALPA's mandamus action since we find that ALPA suffers no cognizable injury by virtue of its inclusion in the findings of fact and conclusions of law which it could not appeal and which were the predicate of an order which is in any event vacated.1
Eastern is a well known company that provides commercial air service in the United States and abroad. On March 9, 1989 Eastern filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 101-1330, following a labor dispute with the IAM which began on March 4, 1989. ALPA and the Transport Workers Union of America ("TWU") engaged in a sympathy strike in support of the IAM's efforts that lasted until late November, 1989. Presently, only the IAM is still on strike. Aspects of this bitter and protracted labor dispute are the subject of this litigation.
For many years prior to this dispute, Eastern and IAM were parties to collective bargaining agreements entered into pursuant to the Railway Labor Act ("RLA"), 45 U.S.C. §§ 151-188, which governs such matters as rates of pay, rules and working conditions for mechanics and other IAM member employees.2 The most recent agreement between the parties was executed on May 16, 1985 and expired on December 31, 1987. Pursuant to federal labor policy, both Eastern and the IAM were required to honor the terms of this agreement until they had exhausted the extended bargaining procedures of the RLA.
After Eastern and the IAM failed to agree on the terms of a new agreement in January, 1989 the parties were assisted in the negotiation process by the National Mediation Board ("NMB") pursuant to § 6 of the RLA, 45 U.S.C. § 156. A year later in February, 1989, the NMB concluded that mediation had been unsuccessful and terminated its services. This commenced a 30 day statutory cooling-off period, after which Eastern and IAM were freed from the procedures of the RLA and entitled to exercise economic self-help.
Before terminating its services and entering the cooling-off period, the NMB asked both Eastern and IAM if they would voluntarily agree to arbitration, pursuant to § 7 of the RLA, 45 U.S.C. § 157. IAM agreed to submit to arbitration. See Ionosphere Clubs, 108 B.R. at 907. Eastern declined. Id. Pointing to a financial weakening of the company, Eastern decided that submitting the dispute to binding arbitration was not in its best interest. Since there is no mandatory arbitration provision in any relevant labor statute, Eastern violated no law in making this decision. The cooling-off period expired at 12:01 a.m. (EST) on March 4, 1989 at which time Eastern unilaterally implemented its proposals for a new labor agreement for IAM-represented employees, as it was permitted to do by law. 45 U.S.C. § 157. IAM then commenced its strike, as it also was permitted to do by law.3 45 U.S.C. § 157; also see Brotherhood of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 378, 89 S.Ct. 1109, 1115, 22 L.Ed.2d 344 (1969).
Three days after IAM's strike was instituted, Eastern filed a petition for protection in the Bankruptcy Court for the Southern District of New York. The alleged unlawful actions began to occur shortly thereafter and Eastern commenced the injunctive proceeding that is the subject of this appeal. The Bankruptcy Court held long hearings and made factual findings concerning the strike activities. Although the strike itself was lawful, the Bankruptcy Court held that numerous tortious acts occurred continually over a fifteen month period. Ionosphere Clubs, 108 B.R. at 909-930.
In a lengthy opinion that resulted from 4000 pages of transcripts and 75 witnesses, the Bankruptcy Court described the types of acts IAM committed during this bitter strike in both New York and Georgia. Id. At LaGuardia Airport in New York, IAM members stormed Eastern's facilities, discouraged customers from patronizing Eastern's flights and interfered with non-union employees' efforts to report to work. Specific unlawful acts at the Eastern terminal included flooding bathrooms, interfering with skycaps assisting passengers and sabotaging baggage conveyor belts with "crazy glue." Id. at 910-911. Harassment was commonplace during this strike. The Bankruptcy Court found that strikers called passengers "scab" and "cheap ass" while telling them to have a "shit flight," that they will be "killed" and not to forget their "body bag." Id. at 911-912. Eastern's non-union employees also were attacked. In at least one case, the car window of an employee was smashed. Id. at 913. The Bankruptcy Court found that similar acts also occurred at Hartsfield Airport in Georgia. Id. at 918-929.
Based upon its fact finding and conclusions of law, the Bankruptcy Court enjoined the IAM from engaging in certain strike related activities. The strikers were not allowed, among other things, to shout, bang or clap in a disruptive way, to trespass onto Eastern property, engage in mass picketing that interfered in any way with Eastern employees' and passengers' use of the public roads, or vandalize and assault property or persons. Id. at 948-950. It is not clear from the language of the injunction whether some of the limitations are only applicable in New York and Georgia or apply across the United States. The injunction is broad on its face and requires the order to be placed on union bulletin boards at all strike headquarter locations around the United States.
At issue in this appeal is the authority of a federal bankruptcy court to intervene on behalf of a debtor in a labor dispute. Before reaching the merits, this Court must focus on issues of jurisdiction. The threshold question is whether jurisdiction to resolve this labor dispute vests in the bankruptcy court or an article III tribunal. If a labor dispute is considered a "core proceeding" that directly involves the reorganization of the debtor, the bankruptcy court has jurisdiction. See 28 U.S.C. § 157. On the other hand, if the labor dispute is classified as only peripherally relevant to bankruptcy concerns, it is a non-core proceeding and an article III court must adjudicate the conflict. See In re Wood, 825 F.2d 90, 96 (5th Cir.1987). Any resolution to this question involves an examination of the scope of the bankruptcy power which has been determined by Congress, subject to certain constitutional limitations. See Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 73, 102 S.Ct. 2858, 2872, 73 L.Ed.2d 598 (1982).
Congress has defined federal bankruptcy court jurisdiction to include any adversarial proceeding which by its nature is core to restructuring the debtor-creditor relationship. 28 U.S.C. § 157(b)(1) (1988). Section 157(b)(2) of title 28 sets forth a non-exclusive list of matters that Congress has determined to be core proceedings. The relevant portion of the list for this action is "matter concerning the administration of the estate." 28 U.S.C. § 157(b)(2)(A). At issue is whether "matters concerning the administration of the estate" includes...
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