Us Airline Pilots Ass'n v. Awappa Llc.

• Decision Date: 30 July 2010
• Docket Number: No. 08-1858.,08-1858.
• Citation: 615 F.3d 312
• Parties: US AIRLINE PILOTS ASSOCIATION, Plaintiff-Appellant, v. AWAPPA, LLC; John McIlvenna; Mitch Vasin; Peter Blandino; Eric Ferguson; Jeff Koontz; Russ Payne; Keith Krueger; Eric Auxier; Christopher Cundari; Jack Tooke; David Braid; Robert J. Narloch; Bruce A. Hannah; Ron Gabaldon; Shawn Metzker; Jurie Maree; John Does 1-100; Al Casby; Jeff Abbott; Mark Doyal; Larry Diehl; Steve Trimmer; CJ Szmal; Joe Heil; Kevin Steele, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

615 F.3d 312

US AIRLINE PILOTS ASSOCIATION, Plaintiff-Appellant,

v.AWAPPA, LLC; John McIlvenna; Mitch Vasin; Peter Blandino; Eric Ferguson; Jeff Koontz; Russ Payne; Keith Krueger; Eric Auxier; Christopher Cundari; Jack Tooke; David Braid; Robert J. Narloch; Bruce A. Hannah; Ron Gabaldon; Shawn Metzker; Jurie Maree; John Does 1-100; Al Casby; Jeff Abbott; Mark Doyal; Larry Diehl; Steve Trimmer; CJ Szmal; Joe Heil; Kevin Steele, Defendants-Appellees.

No. 08-1858.

United States Court of Appeals,Fourth Circuit.

Argued: March 23, 2010.

Decided: July 30, 2010.

COPYRIGHT MATERIAL OMITTED.

ARGUED: Lee R.A. Seham, Seham, Seham, Meltz & Petersen, LLP, White Plains, New York, for Appellant. John Miller West, Bredhoff & Kaiser, PLLC, Washington, D.C., for Appellees. ON BRIEF: Nicholas Paul Granath, Seham, Seham, Meltz & Petersen, LLP, Minneapolis, Minnesota, Stanley J. Silverstone, Lucas Middlebrook, Seham, Seham, Meltz & Petersen, LLP, White Plains, New York, for Appellant. Lat J. Celmins, Patrick J. Van Zanen, Michael L. Kitchen, Margrave Celmins, P.C., Scottsdale, Arizona, for Appellees Keith Krueger, Eric Auxier, Christopher Cundari, Jack Tooke, David Braid, Robert Narloch, Bruce Hannah, Ron Gabaldon, Shawn Metzker, Al Casby, Larry Diehl, CJ Szmal, Joe Heil, and Kevin Steele; Jeffrey R. Freund, Bredhoff & Kaiser, PLLC, Washington, D.C., for Appellees AWAPPA, LLC, John McIlvenna, Mitch Vasin, Peter Blandino, Eric Ferguson, Jeff Koontz, and Russ Payne.

Before MICHAEL, MOTZ, and KING, Circuit Judges.

Affirmed by published opinion. Judge MOTZ wrote the opinion, in which Judge MICHAEL and Judge KING joined.

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

The U.S. Airline Pilots Association (“USAPA”) filed this action against the America West Airlines Pilots Protective Alliance, LLC (“AWAPPA”) and several individual defendants pursuant to the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-68 (2006). The complaint, which seeks an injunction and damages, alleges that the defendants engaged in extortionate acts that constitute a pattern of racketeering activity. The district court granted the defendants' motion to dismiss the complaint for failure to state a federal claim and thus lack of subject-matter jurisdiction. USAPA appeals, and we affirm.

I.

The facts, as set forth in USAPA's First (and repeated in the proposed Second) Amended Complaints, are as follows:

On May 19, 2005, U.S. Airways, Inc. and America West Airlines (“AWA”) merged to form U.S. Airways, Inc. (“US Airways”). In the airline industry, pilot compensation and benefits depend in large part on seniority, and the newly merged company sought to integrate the two constituent carriers' pilots on the basis of seniority. To that end, the Air Line Pilots Association (“ALPA”), the union representing both groups of pilots at the time of the merger, worked to prepare an integration proposal for submission to U.S. Airways.

Negotiations between the two pilot groups floundered because, on average, pilots from the former U.S. Airways, Inc. (“East pilots”) had an earlier date of hire than pilots from the former AWA (“West pilots”). Thus, East pilots lobbied for seniority to be determined solely by date of hire, while West pilots championed a system that would incorporate other variables, including the relative economic strength of the pre-merger carriers.

When negotiations stalled, ALPA forced the two groups into arbitration. On May 1, 2007, Arbitrator George Nicolau issued an award (“the Nicolau Award”) that rejected a pure date-of-hire system (and therefore favored the West pilots). The Nicolau Award could have no binding effect until the merged carrier adopted it as its integration policy, so East pilots lobbied against (and West pilots lobbied for) its submission to U.S. Airways as ALPA's official proposal. Although the fight over the Nicolau Award raged without solution, ALPA ultimately presented it to U.S. Airways. ¹ Several East pilots, dissatisfied with ALPA's representation, formed USAPA in order “to replace ALPA as the collective bargaining representative of the pilots at the combined U.S. Airways.” The National Mediation Board called for an election to allow the pilots to choose between USAPA and ALPA. USAPA campaigned on a platform of date-of-hire-based seniority. In response, several West pilots formed AWAPPA to support ALPA's candidacy, allegedly “to oppose USAPA and its goal of date of hire seniority integration.” USAPA defeated ALPA in the election, and on April 18, 2008, the National Mediation Board certified USAPA as the new collective bargaining representative of U.S. Airways's pilots. In re Representation of Employees of U.S. Airways Pilots, 35 N.M.B. 135 (2008).

USAPA alleges that, after the election, “the leaders of AWAPPA issued a press release, stating that AWAPPA had been formed to engage in an ‘aggressive strategy’ against USAPA, and further stating that ‘USAPA's demise is just a matter of time.’ ” USAPA asserts that “[s]ince [its] certification ..., [AWAPPA and its] co-conspirators have subjected USAPA, its officers, and individual U.S. Airways pilots to a concerted campaign of extortion and sabotage.” According to USAPA, in an effort to destroy it, AWAPPA has clogged USAPA's toll-free hotline with frivolous phone calls; used “profane, indecent, vulgar and threatening language in telephone voicemail messages to USAPA, its officers, and individual U.S. Airways pilots;” made other threatening and harassing communications; conspired to “create a mass violation of the contractual dues obligation” to USAPA, in violation of the collective bargaining agreement; filed frivolous grievances; increased USAPA's mail costs; prevented East pilots from using the “jump seat[s]” on airplanes in order to commute to work; and interfered with USAPA's e-mail communications through spamming. One person posted on the AWAPPA online message board that “[w]e'll be playing this game for 10 years or until ALPA is back on property.”

On May 30, 2008, USAPA brought this action against AWAPPA and several of its members, asserting RICO violations and state-law claims including civil conspiracy and defamation, and seeking injunctive relief and damages. The complaint alleges that the

[d]efendants and their co-conspirators seek to destroy USAPA in order to compel the implementation of the Nicolau Award and to deprive USAPA of its statutory right ... to negotiate terms and conditions of employment, and otherwise provide representation services, for the U.S. Airways pilots. In so doing, defendants and their co-conspirators seek, inter alia, to obtain pecuniary benefits for America West pilots that would otherwise be distributed to all U.S. Airways pilots on a date of hire seniority basis.

USAPA asserts that the defendants “also seek to deprive USAPA of dues/agency fee revenue ... and divert these monies to AWAPPA.”

The district court dismissed the complaint for failure to state a federal claim, and therefore for lack of subject-matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1) and (b)(6). US Airline Pilots Ass'n v. Awappa, LLC, No. 3:08cv246, 2008 WL 2761388, at *14-15 (W.D.N.C. July 11, 2008). The court declined to exercise supplemental jurisdiction over USAPA's state-law claims, denied as futile USAPA's motion to amend its complaint, and denied as moot USAPA's request for injunctive relief. Id. at *15-18.

USAPA timely filed this appeal.

II.

We review de novo a district court's dismissal for failure to state a claim. See Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th Cir.2007). In doing so, “we must accept as true all of the factual allegations contained in the complaint.” Id. (internal quotation marks omitted). To survive a motion to dismiss, a complaint need not provide “detailed factual allegations,” but it must “provide the grounds of [the plaintiff's] entitlement to relief” with “more than labels and conclusions” and more than “a formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation marks and alterations omitted). Ultimately, “[f]actual allegations must ... raise a right to relief above the speculative level,” and the complaint must offer “enough fact to raise a reasonable expectation that discovery will reveal evidence” of the alleged activity. Id. at 555, 556, 127 S.Ct. 1955.

RICO, the federal claim at issue, “does not cover all instances of wrongdoing. Rather, it is a unique cause of action that is concerned with eradicating organized, long-term, habitual criminal activity.” Gamboa v. Velez, 457 F.3d 703, 705 (7th Cir.2006). The Supreme Court has described the penalties authorized by RICO as “drastic.” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 233, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989). Indeed, in a civil RICO action, a successful plaintiff may recover not only costs and attorney's fees, but also treble damages. See 18 U.S.C. § 1964(c). These penalties are primarily designed to provide society with a powerful response to the dangers of organized crime. See H.J. Inc., 492 U.S. at 245, 109 S.Ct. 2893. Thus, although we read the terms of the statute “liberally” in order to “effectuate its remedial purposes,” Boyle v. United States, --- U.S. ----, ----, 129 S.Ct. 2237, 2243, 173 L.Ed.2d 1265 (2009) (internal quotation marks omitted), we must also exercise caution

to ensure that RICO's extraordinary remedy does not threaten the ordinary run of commercial transactions; that treble damage suits are not brought against isolated offenders for their harassment and settlement value; and that the multiple state and federal laws bearing on transactions ... are not eclipsed or preempted.

Menasco, Inc. v. Wasserman, 886 F.2d 681, 683 (4th Cir.1989).

To state a civil RICO claim, a plaintiff must allege that the defendants engaged in, or conspired to engage in, a “ pattern of racketeering activity.”...