Tice v. American Airlines, Inc.

• Decision Date: 26 January 1999
• Docket Number: 97-2027,Nos. 97-1888,s. 97-1888
• Parties: 78 Fair Empl.Prac.Cas. (BNA) 1019, 74 Empl. Prac. Dec. P 45,664 Robert H. TICE, et al., Plaintiffs-Appellants, Cross-Appellees, v. AMERICAN AIRLINES, INC., Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 966

162 F.3d 966

78 Fair Empl.Prac.Cas. (BNA) 1019,

74 Empl. Prac. Dec. P 45,664

Robert H. TICE, et al., Plaintiffs-Appellants, Cross-Appellees, v. AMERICAN AIRLINES, INC., Defendant-Appellee, Cross-Appellant.

Nos. 97-1888, 97-2027.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 7, 1997.

Decided Dec. 17, 1998.

Rehearing and Suggestion for Rehearing En Banc be Denied

Jan. 26, 1999.

Alan M. Serwer (argued), Bell, Boyd & Lloyd, Chicago, IL, for Plaintiffs-Appellants.

Ronald L. Marmer, Jerold S. Solovy, Jenner & Block, Chicago, IL, for Defendant-Appellee in No. 97-1888.

Jerold S. Solovy, Jenner & Block, Chicago, IL; Terence G. Connor (argued), Morgan, Lewis & Bockius, Miami, FL, for Defendant-Appellant in No. 97-2027.

Dori K. Bernstein (argued), Equal Employment Opportunity Commission, Washington, DC, for Amicus Curiae.

Before COFFEY, FLAUM, and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

It is a fundamental principle of American law that every person is entitled to his or her day in court. Multiple victims of air disasters, multiple stockholders of companies that have committed securities violations, and multiple holders of rights in pensions, normally may all bring their own suits even if the defendant engaged in a single course of action that affected everyone similarly. One formal exception to this principle is the class action, recognized in federal court under Fed.R.Civ.P. 23. The vigor with which the defense bar has often opposed class certifications might cause one to think that defendants prefer to take their cases one at a time, but that would be too simplistic a view. In fact, the existence and incidence of another exception to the general rule, the doctrine of virtual representation, suggests that defendants sometimes like the benefits of a group result--because it is usually defendants who argue that a new group of plaintiffs is barred from bringing an action since the plaintiff in an earlier suit was its "virtual representative."

This case requires us to explore what courts have actually meant when they have referred to virtual representation, and what if any independent significance that concept has. The district court dismissed the claims of American Airlines pilot Robert Tice and his eleven colleagues on the ground that they were bound by the result reached in a different lawsuit brought by different pilots, in which essentially the same American Airlines policy was challenged under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 623(a)(1), (2). The Tice plaintiffs argue that this was error, because they were represented neither formally nor "virtually" in the earlier case, Johnson v. American Airlines, Inc., 745 F.2d 988 (5th Cir.1984), and it would thus violate due process to preclude them from bringing their own suit. American has cross-appealed, claiming that the district court abused its discretion in refusing to transfer this case to the Northern District of Texas pursuant to 28 U.S.C. § 1404(a).

I

At the center of this case is the way that American Airlines has responded to the Federal Aviation Administration (FAA) rule providing that no person may serve as a pilot if that person has reached the age of 60. See 14 C.F.R. § 121.383(c); Baker v. FAA, 917 F.2d 318 (7th Cir.1990). This rule covers only the positions of pilot and copilot, and it thus does not prevent former pilots from serving as flight officers after their 60th birthday. The flight officer, third in command of commercial passenger aircraft, monitors the aircraft's fuel, electrical, hydraulic and other systems before, during and after the flight, but does not pilot the aircraft. The reason why American does not permit people who they determine are too old to be pilots to bid for or hold the flight officer position is because it has a rigid "up-or-out" policy under which all flight officers must be eligible to advance to the position of pilot. See Murnane v. American Airlines, Inc., 667 F.2d 98, 99 (D.C.Cir.1981). That rule permits American to use the flight officer slot as a training ground for future pilots--a practice that would obviously be impossible if individuals deemed ineligible for the pilot's job were to occupy those positions.

American has successfully defended its policy twice before. The first time was in the Johnson litigation mentioned above, a case brought by 22 pilots as a group action authorized by the ADEA, see 29 U.S.C. § 626(b) (incorporating 29 U.S.C. § 216(b) of the Fair Labor Standards Act), in which the Fifth Circuit upheld a jury verdict that American's up-or-out policy qualified as a bona fide occupational qualification (BFOQ) for purposes of the ADEA. See also Murnane, 667 F.2d at 98 (upholding a related aspect of the then-extant version of American's up-or-out policy under which it would not hire anyone over the age of 30 to be a flight officer). The second time was in an action brought by the Equal Employment Opportunity Commission (EEOC) under the ADEA on behalf of a class of named pilots age 40 and over who applied for and were denied employment with American as flight officers because, under the current version of the up-or-out policy, they would not have enough time to progress to the rank of Captain and work there long enough to satisfy American. See EEOC v. American Airlines, Inc., 48 F.3d 164 (5th Cir.1995) ( EEOC).

The Tice plaintiffs, however, did not participate in those earlier cases, and the claims they present are somewhat different: because they were already American pilots, they are not complaining about a failure to be hired. Instead, they were forced to retire when they turned 60, because the up-or-out policy prevented them from "downbidding," which is the mechanism by which they might transfer back to the flight officer level. (In the absence of American's policy, downbidding would probably have been easy for them, because the flight officer position, while not affected by the FAA's rule that commercial pilots and copilots be under 60, is on the same union seniority list as that maintained for pilots.) The Tice plaintiffs point out that American permits or requires pilots below the age of 60 to downbid to flight officer in a variety of situations, and, according to the Tice plaintiffs, all other major U.S. airlines now permit their pilots who turn 60 to downbid in this manner. The "downbidding" claim never arose in the Murnane or EEOC litigation, and the Tice plaintiffs stress that they were American employees, either working as pilots or in line to become pilots, at the time those cases were pending, and thus they were unaffected by the initial hiring rules. Even though the claims of the Tice plaintiffs are quite similar to those of the Johnson plaintiffs, the Tice plaintiffs stress that they had not yet been subjected to the ban on downbidding at the time of that case. In fact, they were actually excluded from the class eligible to join that litigation as plaintiffs because they were too young at the relevant time. Furthermore, their interests at the time diverged from those of the Johnson plaintiffs (forcing out older workers can be thought to help younger workers, on at least a surface level), which suggests that the Johnson plaintiffs could not have adequately represented them.

II

Shortly after the plaintiffs filed their complaint, American moved for a transfer of venue to the U.S. District Court for the Northern District of Texas under 28 U.S.C. § 1404(a), arguing that most witnesses and evidence were located there, including a flight simulator at American's facility at the Dallas-Fort Worth Airport (DFW) that could not be transported out of Texas, that the principal situs of American's operations is in the Northern District of Texas, and that more of the named plaintiffs resided in Texas than in Illinois. American pointed out as well that the Johnson case, which eventually wound up in Texas, had also begun in Illinois and had been transferred for many of the same reasons American was urging here. The Tice plaintiffs responded that almost the same number of plaintiffs were based at O'Hare Airport, in Chicago, as at DFW, that most documents had already been produced, and that American engaged in enough business in Illinois through its extensive operations at O'Hare, American's largest international airport, to warrant respecting their choice of forum.

The court denied American's motion, stating its reasons in open court. It found that from the standpoint of convenience to parties and witnesses the advantages of the two districts were relatively evenly balanced. The court also expressed skepticism that American's flight simulator at DFW was truly unique, or (more importantly) that such a machine would be useful in any event at a jury trial. When American renewed the motion after another similar case was filed in the Northern District of Texas, Roddie v. American Airlines, Inc., 4:96-CV-548-A (N.D.Tex. Sept. 9, 1996), the court denied it again.

American then moved for judgment on the pleadings, under Fed.R.Civ.P. 12(c), on the ground that the doctrine of claim preclusion applied here. The court (Judge Ann C. Williams taking over for Judge Brian Barnett Duff) granted the motion. The district court found that under federal principles of preclusion American had to show three things: (1) a final judgment on the merits in an earlier action, (2) an identity of the cause of action in both the earlier and the later suit, and (3) an identity of parties or their privies in the two suits. The first element was undisputed, and the court found that for the second element the question in both cases was whether American's policy violated the ADEA. That left the third element, which is central to this appeal. The court recognized that the Tice plaintiffs were not formal parties to the Johnson action and that "privity" could exist only if the doctrine of virtual representation applied. (It also noted that neither Murnane nor...