US Airways, Inc. v. US Airline Pilots Association
Filing
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ORDER denying 34 Motion to Dismiss for Lack of Jurisdiction. Signed by Chief Judge Robert J. Conrad, Jr on 8/17/2011. (bsw)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
Case No. 3:11-cv-371–RJC–DCK
US AIRWAYS, INC.,
Plaintiff,
v.
US AIRLINE PILOTS ASSOCIATION
and MICHAEL J. CLEARY,
Defendants.
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ORDER
THIS MATTER is before the Court on the defendants’ motion to dismiss the complaint
filed by the plaintiff, or in the alternative to transfer this action to the Eastern District of New York,
or stay this action pending resolution of the action currently pending in the Eastern District of New
York (Doc. No. 37) and the parties’ respective briefing on this motion. For the reasons stated
below, the Court will DENY the defendants’ motions to dismiss, stay, or transfer the abovecaptioned case.
I.
BACKGROUND
On July 29, 2011, Plaintiff US Airways, Inc. (US Airways) filed a Complaint and a Motion
for Preliminary Injunction against Defendant US Airline Pilots Association (USAPA), and the
president of USAPA, Michael Cleary. The Complaint alleges that the defendants have engaged in
a campaign “to cause nationwide flight delays and cancellations in order to put pressure on US
Airways in its current collective bargaining negotiations” with USAPA in violation of the “status
quo” provisions of the Railway Labor Act (RLA). See (Doc. Nos. 1 at ¶1: Complaint). US Airways
alleges that USAPA is directly instigating the illegal slowdown by encouraging pilots to take various
measures that slow down operations of the airline and by threatening to expose and retaliate against
pilots who do not participate. On August 12, 2011, after hearing oral arguments, the Court stayed
a ruling on Plaintiff’s motion for a temporary restraining order (TRO) and set the matter for a
preliminary injunction hearing on August 19, 2011. The defendants responded to the TRO motion
by filing the instant motion to dismiss, transfer, or stay the case pursuant to Federal Rules of Civil
Procedure 12(b)(1), 12(b)(3), 12(b)(6), and13. (Doc. No. 34).
Defendants contend that the complaint should be dismissed pursuant to the first-filed rule
because they filed an action in the Eastern District of New York (the NY Action) against US
Airways, seeking declaratory and injunctive relief, before US Airways filed the instant action
against them. Defendants allege that the two actions share many common issues of fact, and that
many of the allegations in US Airways’s Complaint pertain to issues raised in Defendants’ Amended
Complaint in the NY Action. Therefore, defendants argue, the allegations in the instant action must
be filed as a compulsory counterclaim in the previously filed NY Action. Moreover, defendants
assert that US Airways has failed to state a claim upon which relief can be granted in the instant
action because – as USAPA alleged in its Complaint in the NY Action – US Airways has itself
violated the status quo provisions of the RLA and is thus barred from relief under the “unclean
hands” doctrine incorporated in Section 8 of the Norris–LaGuardia Act. See (Doc. No. 37 at 23).
II.
THE “FIRST-FILED” RULE
When a lawsuit is filed in multiple forums, the Fourth Circuit generally adheres to the “first-
filed” rule, which holds that “the first suit should have priority, absent the showing of [a] balance
of convenience in favor of the second action.” Volvo Const. Equip. N. Am., Inc. v. CLM Equip.
Co., Inc., 386 F.3d 581, 594-95 (4th Cir. 2004) (quoting Ellicott Mach. Corp. v. Modern Welding
Co., Inc., 502 F.2d 178, 180 n.2 (4th Cir. 1974)); accord Learning Network, Inc. v. Discovery
Commc’ns, Inc., 11 F. App’x 297, 300 (4th Cir. June 7, 2001) (unpublished). Multiple lawsuits are
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subject to the first-filed rule if “the same factual issues” provide the basis for each suit. Allied-Gen.
Nuclear Serv's v. Commonwealth Edison Co., 675 F.2d 610, 611 n. 1 (4th Cir.1982). Courts
applying the first-filed rule will dismiss, stay, or transfer a later-filed lawsuit in deference to the
earlier-filed action. See id. (citing Carbide & Carbon Chem. Corp. v. U.S. Indus. Chems., Inc., 140
F.2d 47, 49 (4th Cir. 1944)) (the earlier-filed lawsuit must proceed “to the exclusion of”
subsequently-filed lawsuits); see also Quesenberry v. Volvo Group N. Am., Inc., No. 1:09cv22,
2009 WL 648658, at *2-3 (W.D. Va. March 10, 2009) (“[T]he “first-to-file” rule supports
dismissing, staying or transferring [an] action . . . .”); Nutrition & Fitness, Inc. v. Blue Stuff, Inc.,
264 F. Supp. 2d 357, 360 (W.D.N.C. 2003) (“Where the same parties have filed similar litigation
in separate federal fora, . . . the later-filed action should be stayed, transferred, or enjoined.”).
However, application of the rule is discretionary, not mandatory. Id. at 361. As the Fourth Circuit
has stated, “this Circuit has no unyielding ‘first-to-file’ rule.” CACI Intern., Inc. v. Pentagen
Technologies Int’l., 1995 WL 679952, 6 (4th Cir. 1995) (unpublished).
III.
DISCUSSION
A.
Applicability of the First-Filed Rule
In determining whether to apply the first-filed rule, courts have recognized three factors : 1)
the chronology of the filings, 2) the similarity of the parties involved, and 3) the similarity of the
issues at stake. E.g., Alltrade, Inc. v. Uniweld Products, Inc., 946 f.2d 622, 628 (9th Cir. 1991);
Nutrition & Fitness 264 F. Supp. At 360; Plating Resources Inc. v. UTI Corp, 47 F.Supp.2d 899 at
903 (N.D.Ohio, 1999). Applying these factors here favors application of the rule.
Chronologically, the NY Action, commenced by summons and complaint on May 27,
2011, and served on US Airways on June 6, 2011, was the first-filed lawsuit. See U.S. Airline
Pilots Ass’n v. US Airways, Inc., No. 1:11cv02579, 2011 WL 2138741 (E.D.N.Y. May 27,
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2011). The instant action was not filed until two months later on July 29, 2011. Regarding the
second factor, both this action and the NY Action involve almost identical parties. The only
difference between the two suits is that US Airway Group, Inc., is also a defendant in the NY
Action as an airline holding company of which US Airways is a wholly owned operating
subsidiary, and the instant action names Cleary individually while the NY Action is brought by
Cleary on behalf of the USAPA.
The third and final factor, the similarity of the issues at stake, is a close call. In the New
York action, USAPA alleges that US Airways violated the RLA’s status quo and dispute
resolution provisions by improperly docking pilot pay, refusing to schedule arbitrations on an
accelerated basis, declining to enter global settlements of grievances and last chance agreements,
refusing to resolve grievances arising under a Letter of Agreement devising a voluntary
grievance mediation program, extending grievance hearings unnecessarily through the use of
stall tactics, disciplining pilots (including by discharge), and restricting the type of lanyards
pilots may wear to display their identification badges. See (Doc. No. 37-1). USAPA also claims
that US Airways violated the RLA’s prohibition against interfering with the right of employees
to organize and is bargaining in bad faith. See id.. USAPA points out that both actions claim
violations of the RLA and discuss USAPA’s Safety Committee Chairman Captain Kubik, the
Safety Culture Survey, USAPA’s “Safety First” lanyards, and US Airways’s distance learning
requirement. US Airways emphasizes that the NY Action focuses on the conduct of US Airways
during collective bargaining negotiations, and the manner in which US Airways administers the
grievance and arbitration provisions contained in their CBA, while the instant action involves the
conduct of USAPA and its members in implementing an illegal slowdown.
Although the two actions do involve different legal and factual issues, and are clearly not
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“mirror images” of one another, this Court finds that they are substantially similar: both actions
involve the same ongoing dispute between the same parties, both seek injunctive relief under the
RLA,, and both will rely on some of the same evidence. This Court therefore concludes that on
balance, the three factors are satisfied. However, this Court’s finding of substantial similarity
under the third factor of the first-filed rule does not necessarily require a finding that US
Airways’s claims are compulsory counterclaims in the NY Action, which is analyzed under a
different standard. This Court, in fact, finds that the instant action did not arise out of “the
transaction or occurrence that is the subject matter of the opposing party’s claim” in the NY
Action as required by Rule 13 of the Federal Rules of Civil Procedure. See Fed.R.Civ.Pro.13(a).
Even if US Airways’s claim in the instant case was a compulsory counterclaim in the NY
Action, the Eastern District of New York has just granted Plaintiff’s request to file a motion to
dismiss the Amended Complaint in the NY Action, and it therefore appears improper (though
not impermissible) to allege any counterclaims in the NY Action at this time. See (Doc. No. 43
at 24). US Airways’s letter requesting dismissal of the NY Action is part of the record before
this Court, and the undersigned has reviewed the arguments for dismissal contained therein.
Without speaking to the merits of those arguments, this Court finds that the Eastern District of
New York could rule in favor of US Airways. For all of these reasons, the instant action will not
be considered a compulsory counterclaim in the NY Action.
B.
Exceptions to the First-Filed Rule
Having decided that the three factors of the first-filed rule are satisfied, this Court next
considers whether the “balance of convenience” nevertheless warrants dispensing with the rule
and litigating the Plaintiff’s claims in this forum. See Volvo Contr. Equip. N. Am., Inc., 386
F.3d at 584-95. The factors the Court is to consider under this inquiry are “essentially the same
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as those considered in connection with motions to transfer venue pursuant to 28 U.S.C.
§ 1404(a).” Employers Ins. of Wasau v. Fox Entm’t Group, Inc., 522 F.3d 271, 275 (2d Cir.
2008) (quoting Everest Capital Ltd. v. Everest Funds Mgmt., L.L.C., 178 F. Supp. 2d 459, 465
(S.D.N.Y.2002)). See also Neuralstem, Inc. v. StemCells, Inc., 573 F. Supp. 2d 888, 901 (D.
Md. 2008); Christian Broadcasting Network, Inc. v. Busch, No. Civ. A. 2:05cv558, 2006 WL
51190, at *5 (E.D. Va. Jan. 9, 2006). Eleven general factors guide the Court’s analysis of a
motion to transfer venue: (1) the plaintiff’s choice of forum; (2) the residence of the parties; (3)
access to evidence; (4) the availability of compulsory process for witnesses and the costs of
transporting and obtaining those witnesses; (5) the possibility of a view by the jury; (6) the
enforceability of a judgment; (7) the relative advantages and obstacles to a fair trial; (8) practical
issues affecting trial expediency and efficiency; (9) the relative court congestion between the
districts; (10) the interest of resolving localized controversies at home and the appropriateness of
having the trial of a diversity case in a forum that is at home with the state law that must govern
the action; and (11) the avoidance of conflict of laws. Nutrition & Fitness, Inc., 264 F. Supp. 2d
at 362 (citing Jim Crockett Promotions, Inc. v. Action Media Group, Inc., 751 F. Supp. 93, 96
(W.D.N.C. 1990)).
Applying these factors, this Court finds that the balance of convenience weighs heavily in
favor of this forum. The Plaintiff’s choice of forum (factor one) refers to US Airways’s decision
to file its lawsuit in North Carolina, and not to USAPA’s decision as the plaintiff in the first-filed
action to file in New York.1 See Quesenberry, 2009 WL 648658 at *6 (finding that the second1
In St. Paul Fire & Marine Ins. Co. v, Renne Acquisitions Corp, 2010 WL 2465543
(W.D.N.C. June 14, 2010), this Court noted the defendant’s choice of forum as being entitled to
deference where the defendant had been the first-to-file a mirror image lawsuit in another forum
and was entitled to a transfer under the first-filed rule. Where, as here, the second-to-file
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to-file Plaintiff’s choice of forum is “ordinarily to be given great weight”); United Energy
Distributors, Inc. v. Rankin-Patterson Oil Co., Inc., No. 7:07-3234-HMH, 2007 WL 4568997 at
*2 (D.S.C. Dec 20, 2007) (evaluating the second-to-file Plaintiff’s choice of forum in denying
Defendant’s motion to transfer venue). Accordingly, this factor favors venue in Charlotte. See
Collins v. Straight, Inc., 748 F.2d 916, 921 (4th Cir. 1984) (quoting Gulf Oil v. Gilbert, 330 U.S.
501, 508 (1947) 508) (“[T]he plaintiff’s choice of forum should rarely be disturbed.”).
The residence of the parties (factor two), access to evidence (factor three), and
availability of Compulsory Witnesses and Associated Costs (factor four) all cut in favor of
keeping this action in this forum. Charlotte is home to USAPA’s headquarters, US Airways’s
largest hub and the largest East pilot domicile. Consequently it is a convenient forum for
potential witnesses and pilots. Moreover, Defendants do not identify any witness subject to
process in New York who would be unavailable for a trial in Charlotte, but US Airways does
assert that there are witnesses who reside in the Charlotte area who would not be subject to
compulsory process in New York. See (Doc. No. 43 at 12).
Neither party has argued that a view by the jury (factor five) is necessary, so the Court
gives this factor no weight. Concerns with enforceability of the judgment (factor six) and the
relative advantages and obstacles to a fair trial (factor seven) are also uncontested by the parties
and raise no issue for this Court.
Practical issues affecting trial expediency and efficiency (factor eight) favor venue in
Charlotte. In the instant action, the parties have filed lengthy briefs, testimony, and documentary
Plaintiff’s choice of forum has a substantial connection to the controversy at issue in the secondfiled case, it is the plaintiff’s choice of forum that will be given deference. See United Energy
Distributors, 2007 WL 4568997 at *2.
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evidence addressing the merits of US Airways’s claims and have already had a TRO hearing
before this Court and are rapidly proceeding toward a preliminary injunction hearing. In the NY
Action, however, the parties have not even had an initial status conference, and that court has not
made any substantive rulings. Practically speaking, trial in this venue appears likely to be more
expedient and efficient than in New York. In the same vein, the relative court congestion
between the districts (factor nine) supports venue in Charlotte. Contrary to Defendants’
contention that “both districts are busy and neither forum has an advantage[,]” (Doc. No. 37 at
25), US Airways submits credible, statistical evidence from the Administrative Office of U.S.
Courts that this Court is less congested than the Eastern District of New York based on 2010
statistics comparing the number of civil filings, pending cases, completed trials, and the median
time from civil filings to disposition . See (Doc. No. 43 at 13).
The interest of resolving localized controversies at home (factor ten) is not significant in
this case as US Airways services people from all over the world, so this controversy necessarily
has wide-reaching implications. Notwithstanding, this factor tips the balance slightly more in
favor of Charlotte considering that US Airways alleges that the primary impact of the slowdown
has been suffered in Charlotte, and the publications allegedly encouraging the slowdown
originated in Charlotte. See (Doc. No. 43 at 15). Finally, avoidance of conflict of laws (factor
eleven) is not at issue in this case. In sum, the balance of convenience clearly favors this forum.
C.
Whether the Norris--LaGuardia Act Bars this Action
Section 82 of the Norris–LaGuardia Act (NGLA), 29 U.S.C. §§ 101 et seq, prevents
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Section 8 of the NLGA provides that: No restraining order or injunctive relief shall be
granted to any complainant who has failed to comply with any obligation imposed by law which is
involved in the labor dispute in question, or who has failed to make every reasonable effort to settle such
dispute either by negotiation or with the aid of any available governmental machinery of mediation or
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injunctive relief from being granted to any party in a labor dispute who has failed to comply with
all obligations imposed by law, or who has failed to make every reasonable effort to settle the
labor dispute in question. Defendants argue that US Airways has violated Section 8's “clean
hands” requirement by committing its own status quo violations and by failing to make every
reasonable effort to resolve this dispute. As a result, Defendant asserts, this Court lacks subject
matter jurisdiction over US Airways’s claims.
Assuming arguendo that US Airways did violate Section 8 of the NLGA, that still does
not form “an absolute bar to injunctive relief against status quo violations.” United Air Line,
Inc. v. Int’l Ass’n of Machinist & Aerospace Workers, 243 F.3d 349, 365 n.11 (7th Cir. 2001)
(citation omitted). Rather, this Court must weigh “the competing equities to determine whether
applying section 8's bar to injunction relief would serve to further underlying purposes of both
the RLA and the NGLA.” Id. Here, the balancing of hardships and the public interest weigh in
favor of at least considering an injunction in this case, despite the possibility that US Airways
may have unclean hands. This conclusion is especially true in light of the fact that there is no
evidence before this Court that US Airways has violated the status quo or failed to make every
effort to resolve this dispute. Moreover, if USAPA does submit such evidence, this Court would
be evaluating it only to determine the limited issue of whether the unclean hands provision of the
NLGA precludes an RLA injunction. This Court’s assessment is thus for a different purpose
than in the NY Action, where (if the case is not dismissed), the Eastern District of New York
will be determining whether US Airways has violated Section 2 of the RLA. Accordingly, the
danger of inconsistent results or a waste or judicial resources is minimal.
voluntary arbitration. 29 U.S.C. § 108.
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The Court thus finds that a balance of convenience favors this forum such that an
exception to the first-filed rule is justified, and that the Court is not positively barred from
considering a preliminary injunction. This conclusion is consistent with the policy underlying
the first-filed rule, which seeks to avoid duplicative litigation and conserve judicial resources,
and also it upholds the RLA’s goal of protecting the public from interruptions to transportation
caused by labor disputes.
IV.
CONCLUSION
IT IS, THEREFORE, ORDERED that the defendant’s motion to dismiss the complaint
filed by the plaintiff, or in the alternative to transfer this action to the Eastern District of New
York, or stay this action pending resolution of the action currently pending in the Eastern
District of New York (Doc. No. 37) is DENIED.
Signed: August 17, 2011
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