Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, AFL-CIO v. The Boeing Company

Filing 588

MEMORANDUM AND ORDER determining Plaintiff's right to a jury trial. Signed by District Judge Monti L. Belot on 1/30/2013. (alm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
SOCIETY OF PROFESSIONAL
ENGINEERING EMPLOYEES IN
AEROSPACE, et al.,
Plaintiffs,
v.
BOEING CO., et al.,
Defendants.

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CIVIL ACTION
Nos. 05-1251-MLB
07-1043-MLB

MEMORANDUM AND ORDER
After entering an order denying summary judgment to Boeing on
the majority of plaintiffs’ section 301 claims1 (Doc. 581), this court
instructed the parties to submit briefs on the issue of whether the
claims may be submitted to a jury.
(Docs. 583, 586).

The parties have now done so.

The court is prepared to rule.
Analysis

Pursuant to Federal Rule of Civil Procedure 39(a)(2), the court
must deny a jury trial when it determines that there is no federal
right to a jury trial on the issues raised.

Plaintiffs contend that

their request for compensatory damages on the section 301 claims are
legal in nature and, therefore, ensure their right to a jury trial
even though the request for monetary relief is combined with claims
for equitable relief. Boeing responds that plaintiffs are not entitled
to a jury trial because they seek equitable relief on their claims.
The Seventh Amendment provides that “[i]n Suits at common law,

1

denied.

Plaintiffs’ motion for partial summary judgment was also

where the value in controversy shall exceed twenty dollars, the right
of trial by jury shall be preserved.” U.S. CONST. amend. VII. The
Supreme Court has stated that “[s]uits at common law” refers to “suits
in which legal rights [are] to be ascertained and determined.”
Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S. 558,
564, 110 S. Ct. 1339, 108 L. Ed.2d 519 (1990).

“Maintenance of the

jury as a fact-finding body is of such importance and occupies so firm
a place in our history and jurisprudence that any seeming curtailment
of the right to a jury trial should be scrutinized with the utmost
care.”

Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 501, 79 S.

Ct. 948, 3 L. Ed.2d 988 (1959).
To determine whether plaintiffs are entitled to a jury trial,
the court must undertake a two-part inquiry: (1) comparison of the
claims at issue to “18th-Century actions brought in the courts of
England prior to the merger of the courts of law and equity” and (2)
a review of the remedies sought to determine whether they are “legal
or equitable in nature.”

Terry, 494 U.S. at 565.

If the two-step

inquiry concludes that an action is equitable, the court should strike
the jury demand. See id.

The Supreme Court has held that a request

for an equitable remedy does not waive the right to trial by jury on
legal issues.

Dairy Queen, Inc. v. Wood, 369 U.S. 469, 473 (1962).

In “only under the most imperative circumstances, circumstances which
in view of the flexible procedures of the Federal Rules we cannot now
anticipate, can the right to a jury trial of legal issues be lost
through prior determination of equitable claims.”

Id.

“If a legal

claim is joined with an equitable claim, the right to jury trial on
the legal claim, including all issues common to both claims, remains
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intact.

The right cannot be abridged by characterizing the legal

claim as ‘incidental’ to the equitable relief sought.” Tull v. United
States, 481 U.S. 412, 425 (1987).
In Terry, the Court held that a claim brought pursuant to
section

301

is

comparable

therefore, a legal issue.

to

a

breach

of

contract

claim

and,

494 U.S. at 569; see also Lampkin v. UAW,

154 F.3d 1136, 1146 (10th Cir. 1998)(the Seventh Amendment right to
a jury trial applies in section 301 claims).

Therefore, the first

part of the inquiry has been satisfied.
Turning to the second prong, the court must determine if
plaintiffs’ damages are legal or equitable in nature.

In their

request for relief, plaintiffs seek “an award of contract damages .
. . to remedy Boeing’s breaches of the labor contracts, in order to
attempt to put Plaintiffs in the position they would have been in
absent Boeing’s breaches.”

(Doc. 548 at 46).

The parties have not

conducted damages discovery at this time and the pretrial order is
silent as to a dollar amount and the exact nature of their monetary
damages.

Plaintiffs’ position at summary judgment, however, was that

their damages consisted of the loss of age 55 pension benefits and
health care.
Turning to the facts presented on summary judgment, the court
will attempt to construct the potential amount of money damages.
There are nine individuals who are named plaintiffs in the Harkness
Class.

The Harkness Class itself is composed of “hundreds” of

individuals. (Doc. 100 at 6). In addition, there are seventeen named
plaintiffs who comprise the McCartney/Boone plaintiffs.

The CBAs in

this case provided early retirement and health care benefits for
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Boeing employees who had at least 10 years of service and reached age
55.

The monthly pension benefit in June 2005 was $60 per year of

service.

This amount was reduced by 10% when an employee retired at

age 55.

Therefore, an employee who elected to take early retirement

and had 25 years of service would receive $16,200 per year ($1,500 per
month, less 10%).

Several of the named plaintiffs had at least 25

years of service in 2005.
This case has been pending for more than seven years. Therefore,
considering that the Harkness Class is comprised of hundreds of
individuals, the amount of money damages due to plaintiffs for their
loss of pension benefits, should they prevail, could potentially be
in the millions.2

Plaintiffs also seek equitable relief in the form

of specific performance and an injunction requiring Boeing to provide
the benefits at issue.
The general rule is that money damages constitute a legal
remedy. Terry, 494 U.S. at 565, 570. Terry recognized two exceptions
to this general rule.

An award of money damages may be considered

equitable relief if it is restitutionary or if the monetary award is
incidental or intertwined with injunctive relief. Id. at 571. Boeing
asserts that the money damages in this case are “plainly incidental
to or intertwined with injunctive relief - i.e., specific performance
in the form of benefits.”

(Doc. 586 at 4). Boeing cites a Sixth

Circuit opinion, Golden v. Kelsey-Hayes Co., 73 F.3d 648 (6th Cir.
1996), in support of its position.
2

The court has no indication the amount of compensatory damages
on plaintiffs’ claim for their loss of health care benefits.
Presumably, the amount would include past premiums paid by plaintiffs
and past payments made for healthcare services.
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In Golden, the Sixth Circuit addressed unlawful modifications
to retiree healthcare benefits and held that the Seventh Amendment did
not entitle the plaintiffs to a jury trial.
addition

to

declaratory

relief

and

a

73 F.3d at 659–63.

request

for

a

In

permanent

injunction, the plaintiffs sought damages for costs and expenses
sustained due to the defendant’s modifications of their healthcare
benefits.

In Golden, the plaintiffs incurred damages over a period

of approximately two months.

The court determined that those damages

were incidental to the grant of equitable relief because it allowed
the plaintiffs to be made whole. Golden, 73 F.3d at 660–61. Notably,
there was a dissent in Golden which held that Dairy Queen and
subsequent decisions dictate that the inclusion of injunctive relief
does not negate the right to a jury trial in a section 301 claim which
seeks monetary damages. In discussing the dissent, the majority noted
that

the

plaintiffs

injunction.

had

sought

and

were

granted

a

preliminary

The majority stated that the granting of injunctive

relief essentially concluded that plaintiffs had no adequate remedy
at law and this ruling was not challenged on appeal.

Therefore, the

majority concluded that the plaintiffs could not be made whole through
legal relief alone and the monetary relief was merely incidental.
In Stewart v. KHD Deutz, 75 F.3d 1522 (11th Cir. 1996) and Senn
v. United Dominion Indus., 951 F.2d 806 (7th Cir. 1992) the Eleventh
and Seventh Circuits addressed the same issue as in Golden, but held
that the plaintiffs had a right to a jury trial.

In both cases the

plaintiffs sought health care benefits which were negotiated in
collective bargaining agreements.

The plaintiffs requested damages

for the breach of the agreements and equitable relief in the form of
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an injunction requiring the employer to provide future benefits.

In

both cases, the circuits held that Tull and Terry required a jury
trial on the plaintiffs’ monetary damages claims.

In Senn, the

Seventh Circuit held that the right to a jury trial was intact even
though the primary relief sought by the plaintiffs was injunctive
relief.

The Circuit reasoned that the right to a jury trial is

preserved when legal rights are at stake and it cannot be abridged by
characterizing the legal claim as incidental to equitable relief.
Senn, 951 F.2d at 814.
While the Tenth Circuit has not directly addressed this issue,
the court finds the Supreme Court’s opinion in Dairy Queen instructive
and supports the holdings in Senn and Stewart.

In Dairy Queen, the

plaintiff filed suit against defendant alleging a breach of contract.
The plaintiff sought an accounting to determine the amount owed to
plaintiff as well as an injunction.
defendant’s request for a jury trial.

The district court denied the
The Supreme Court held that a

breach of contract is legal in nature and a request for an accounting
does not render the claim equitable. The Court specifically held that
“the district judge erred in refusing to grant [defendant’s] demand
for a trial by jury on the factual issues related to the question of
whether there has been a breach of contract.”
at 479.

Dairy Queen, 369 U.S.

The Court held that the defendant had “a right to have the

jury determine not only whether the contract has been breached and the
extent of the damages if any but also just what the contract is.” Id.
Citing Dairy Queen, the Second Circuit determined that a breach
of the labor contracts, by failing to make pension payments, was
triable to a jury.

See Brown v. Sandimo Materials, 250 F.3d 120 (2d
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Cir. 2001). The Circuit held that at trial the plaintiffs would “seek
to establish, first, which parties are bound by the relevant CBAs, and
second, that those parties violated the terms of the CBAs.”
126.

Id. at

The Circuit held that the right to a jury trial is a basic and

fundamental

feature

of

our

system

of

jurisprudence

and

that

plaintiffs’ breach of contract claim must be presented to a jury, even
though the claim also sought equitable relief.

In this case, the

issues to be decided by a factfinder will be to determine the exact
terms of the CBAs at issue and whether Boeing breached those terms by
failing to classify plaintiffs as laid off when their employment with
Boeing ended.

If plaintiffs prevail, they seek monetary damages to

compensate them for the seven plus years that Boeing has been in
breach of the agreement.
breach.

Those damages relate directly to Boeing’s

They are not intertwined with the equitable question before

the court. Notably, if the jury determines that the terms of the CBAs
required Boeing to treat plaintiffs as laid off, the equitable remedy
will flow from that determination.
In comparison with Golden, the monetary damages are significant
and the legal question in this case is central to the damages.

The

monetary damages are not merely incidental. Therefore, the court does
not find the Sixth Circuit opinion in Golden to be persuasive.

The

court is persuaded by the Second, Seventh and Eleventh Circuits’
opinions and finds that plaintiffs’ request for monetary damages for
their loss of pension and health care benefits is legal in nature and
not merely incidental to their claim for equitable relief. Plaintiffs
have the right to have a jury decide whether the CBAs at issue were
breached in this case.
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Moreover, in Great-West Life & Annuity Ins. Co. v. Knudson, 534
U.S. 204 (2002), the Supreme Court clarified a significant difference
between legal and equitable remedies.

Great-West explained that a

monetary award is equitable when the money identified as belonging to
the plaintiff can be traced to funds or property in the defendant’s
possession.

534 U.S. at 213.

When the property sought to be

recovered is no longer in the defendant’s control, the plaintiff’s
claim “is only that of a general creditor” and thus a legal claim.
Id.

In this case, the monetary relief sought by plaintiffs is the

payment of pension funds and health care provisions due under the
plan.

An undisputed fact in this case is that Boeing is no longer in

possession of the Harkness Class’ pension.

Therefore, the monetary

damage claim is legal in nature. See Calhoon v. Trans World Airlines,
Inc., 400 F.3d 593, 598 (8th Cir. 2005)(“The district court correctly
concluded that the requested monetary relief is in the nature of legal
relief because it seeks to impose personal liability on the defendant,
is measured by the plaintiffs' loss, and does not involve traceable
funds that belong to the plaintiff and are being unlawfully held by
the defendant.”)
Conclusion
Plaintiffs have the right pursuant the Seventh Amendment to
proceed to a jury trial on their section 301 claims.

The court,

however, declines to empanel the jury in an advisory capacity to hear
plaintiffs’ ERISA claims. A trial date will be determined at a status
conference to be held on February 19, 2013 at 3:30 p.m.

Counsel who

will present the case to the jury are required to attend the status
conference in person.
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IT IS SO ORDERED.
Dated this

30th

day of January 2013, at Wichita, Kansas.

s/ Monti Belot
Monti L. Belot
UNITED STATES DISTRICT JUDGE

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